K46.7bn Budget unveiled

GOVERNMENT has embarked on the modernization of the tax administration system and is restructuring the mining tax regime in order to capture more resources to address its public expenditure needs.  

The government, through the K46.7 billion 2015 National Budget, has also proposed to carry out amendments to the controversial Value Added Tax (VAT) regulation which has left Finance Minister Alexander Chikwanda attacked, slandered and blackmailed in the last one month.

Government has also taken measures to consolidate the fiscal position by containing the size of the public sector wage bill which has been consuming about 60 percent of the total Budget and streamlined expenditure towards priority programmes.

Mr Chikwanda yesterday unveiled a K46.7 billion Budget which has seen a substantial increase of K9.4 billion to the education sector that would address the problems of the bursaries system that has caused a lot of strife among the vulnerable school leavers with one prospective female student dead.

The 2015 Budget has also seen the prices of whisky and brandy go up with the increase in excise duty on imported un-denatured spirits of alcohol content of 80 percent.

The theme for this year’s national Budget is: Celebrating our Golden Jubilee as One Zambia One Nation by Making Economic Independence a Reality for All.

Mr Chikwanda said the K46.7 billion Budget was about 24.6 percent of the country’s Gross Domestic Product (GDP) which would be financed from the domestic revenue projected at K35.1 billion, representing 72.2 percent of the total Budget.

Mr Chikwanda said Zambia’s cooperating partners are expected to support the national budget by contributing 2.6 percent representing K1.2 billion while domestic borrowing has been projected at K3.8 billion with K4.2 billion of the total Budget being a combination of foreign programme and project financing.

Of the K46.7 billion total Budget, the government has proposed to spend K9.4 billion on the education sector which would see the recruitment of about 5000 teachers with the hope of reducing the pupil-teacher ratio.

“Mr Speaker Sir, to address the challenges facing our vulnerable school leavers to access tertiary education at our colleges and universities, I have raised the allocation to bursaries by 27.9 percent to K200.2 million from the 2014 allocation of K156.5 million. The cost of publicly provided tertiary education per student is among the highest in the SADC region. There is need, therefore, to review the cost of providing tertiary education in Zambia,” Mr Chikwanda said.

Mr Chikwanda has allocated K12 billion of the Budget to general public services and to ensure that government met its domestic and external debt obligations, K2.9 billion and K2.4 billion has been provided respectively.

Government has injected a total of K12.7 billion in the economic sector with the road infrastructure development which included the Link Zambia 8000 and the Pave Zambia 2000 projects receiving K5.6 billion.

Mr Chikwanda said government would continue promoting diversification of the agriculture sector with the prospects of attaining inclusive growth and economic independence and has injected K254.9 million into the E-Voucher System which would allow farmers have a choice in the inputs they received.

In the 2015 national Budget, about 1 000 000 farmers are expected to benefit from the Farmer Input Support Programme (FISP) which would cost government K1.1 billion.

“Government will continue promoting private sector participation in grain marketing by limiting grain purchase by the Food Reserve Agency (FRA) to the 500 000 metric tonnes required for the strategic food reserve. In this regard, I have provided K992.9 million for strategic food reserve. Mr Speaker, to promote irrigated agriculture and increased access to water resources, I have allocated K164.5 million towards the construction and rehabilitation of dams to achieve our target of an additional 17.500 hectares under irrigation by 2016,” Mr Chikwanda said. The health sector has been allocated K4.5 billion and of this allocation, K268.2 million would be channeled to the construction and rehabilitation of health infrastructure in various parts of the country.

Government has also set aside K753.5 million for the procurement of essential drugs and medical supplies which have been erratic in most hospitals and clinic while K52.5 million has been allocated for the recruitment of over 2000 health personnel.Mr Chikwanda said although inflation was contained reducing to 7.1 percent from 7.8 percent over the first nine month, the Kwacha suffered serious depreciation hitting a record high of K7 per US dollar in the month of May 2014.He explained that the rapid depreciation was due to the reduction of in the supply of foreign exchange to the market particularly from the mining sector apart from speculative behaviour.

“Sir, the tight liquidity conditions came at the cost of a temporary rise in interest rates which constrained access to credit. Having achieved relative stability in the foreign exchange market, the Bank of Zambia has since July 2014 eased liquidity conditions,” Mr Chikwanda said.