SOME
Lusaka pirate taxi drivers briefly parked their cars to listen in to a
live broadcast of the 2012-2013 national budget. Picture by BRIAN MALAMA
MORE stakeholders have praised Government for presenting a budget that adequately responds to the needs of majority Zambians.
African Development Bank (AfDB) country Manager Freddie Kwesiga said emphasis on infrastructure development, particularly energy, is a key milestone in addressing the power deficit the country is currently facing and affects efficiency in doing business.
Government has in the 2013 national budget allocated about K1.4 trillion to the energy sector with Zesco being allocated K984.3 trillion for power generation, transmission and distribution.
Government has further removed customs duty on wind-powered engines, gas stoves and electrical capacitors in view of the challenges in the supply of electrical power.
Dr Kwesiga, who described the budget as developmental, said the AfDB stands committed to support Government in ensuring that the budget is fully implemented, adding that the bank will soon sign a memorandum of understanding with various stakeholders involved in the development of the Itezhi-tezhi Hydro power project.
“As AfDB we like the emphasis on energy sector. We are also happy that emphasis has been put on agriculture, especially the diversification of Farmer Input Support Programme (FSIP), creation of wealth through the development of the small and medium-scale enterprises (SMEs).
We feel these fundamental steps taken respond to the promises made by the Patriotic Front (PF) government,” he said.
And Standard Chartered Bank managing director Mizinga Melu, who described the budget as inclusive, said the incentives given to various sectors will only be meaningful if the players pass on the benefits to the public.
“For example, Government has zero-rated dental drill engines, so we expect the cost of dental services to go down,” she said.
Mrs Melu said the bank is happy that the reduction in the cost of doing business is fundamental in attaining economic development, adding that the bank will ensure that the interest rates reduce to acceptable levels.
“We have been critised as the banking sector for the high interest rates but we are working to ensure that we reduce them to acceptable levels,” she said.
She also said the six percent inflation rate by year-end is achievable in view of the stable currency that has been triggered by the Statutory Instrument number 33, which prohibits the quoting of goods and services in foreign currency.
And Secretary to the Treasury Fredson Yamba explained that this year’s budget does address some of the social agendas that President Sata had initially put forward in his policy statement when he opened Parliament in September.
Mr Yamba said this during an interview on CNBC Africa, monitored by the Zambia Daily Mail on Friday evening.
He described particular programmes under the social sector namely in health, education and local government as being the areas where the government was trying to ensure that resources were made available to the needy in society.
With regards the current account budget deficit of 4.3 percent, Mr Yamba said the deficit would be financed from the government’s own domestic borrowing and also from external borrowing. In this regard, he said the government had already done a debt sustainability analysis.
Concerning the global economic crisis, he said any happenings in America, Europe or China would definitely affect Zambia’s growth forecasts, seeing it is equally a player in the global economic system.
“Even though we get some kind of insulation because our economy in terms of finance is not highly dependent on the international financial economic system, because of the exports in terms of copper and other requirements, once there is a slump in the world economic system that would ultimately affect Zambia’s exports and hence slow down our growth,” Mr Yamba said.
And pertaining to various taxes being imposed on foreign investors, Mr Yamba said the government had consultations with various stakeholders to try and see how best they could come up with some of the measures.
“I would like to believe some tax measures are actually difficult to implement so that’s why we are talking about undertaking some major tax reforms so that we do some kind of diagnostics study and see how best we can change the tax system,” continued Mr Yamba.
In certain instances, he said, particularly regarding taxation on the mines, people were expecting the government to come up with windfall tax, which he explained was not the right way of doing it in the sense that even in the current set-up, government did not have the mechanisms to effectively monitor what the mines were producing and what they were selling.
He said perhaps it would be better for the government to come up with a mechanism that would be in a position to determine what the mines were actually producing and later on what they were selling out before any tax measures relating to an increase or decrease could be implemented.
In terms of the Eurobond, Mr Yamba said the government did raise US$750 million, which he said was oversubscribed by US$11.9 billion. This being a reflection that Zambia was doing well in terms of winning investor confidence as a good investment destination because of the current policies that the government had put in place.
Mr Yamba also broke down the Eurobond and briefly explained that about US$255 million would be directed to hydro-energy projects, in particular energy generation and transmission, while US$430 million would be channelled to the transportation sector specifically in the areas of road and rail.
Other amounts he said would go to human capital and access to finance. In this respect, Mr Yamba said US$29 million would be channelled towards rehabilitation of the country’s central hospitals or referral hospitals.
He also said it was government’s desire to have these hospitals up and running with the right diagnostic equipment.
Regarding access to finance, Mr Yamba said government recognised this as one of the major constraints and wanted to help small and medium-scale enterprises access funds through the vehicle of the Development Bank of Zambia (DBZ) with an injection of US$20 million from the Eurobond.
Other expenditures, he said, were user fees and transaction costs at US$1.4 million as well as a discount premium of US$14.6 million, altogether which amounted to US$750 million.
And Minister of Labour Fackson Shamenda said the 2013 sole PF government national budget guarantees that workers continue to have more money in their pockets.
Mr Shamenda said last year as promised in their campaign messages, PF reduced taxes and gave workers 100 percent, which government has stablised in the 2013 budget by indexing it above the anticipated inflation.
Deputy Minister of Health Patrick Chikusu said the increase in budgetary allocation in the health sector goes with the new vision to enhance perimeters in health service delivery by bringing services closer to people.
Dr Chikusa said the 40 percent increment was significant especially in bringing health facilities and services to people in rural areas.
And teachers in Kitwe have described the 2013 national budget as pro-poor and that it has the potential to create wealth and employment if it is well implemented.
Professional Teachers Union of Zambia (PTUZ) Kitwe district chairman Aaron Chansa said in a statement yesterday in Kitwe that teachers have welcomed the increment in the budgetary allocation to the education sector.
“As PTUZ we are aware that any nation needs skilled inhabitants for it to develop economically. We are also happy that money has been set aside for the construction of institution houses for government ministries. PTUZ, however, would want the government to restructure the National Housing Authority and the Zambia National Building Society so that these two institutions could be well positioned to give affordable mortgagees to teachers,” he said.
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