It’s recovery budget/ …Govt won’t spend what it doesn’t have, will not borrow beyond what it can repay

Sat, 12 Nov 2016 13:20:20 +0000

THERE are no conditions or financing arrangements with the International Monetary Fund in the country’s economic recovery programme because Zambia has not yet discussed any programme with the Fund, Finance Minister Felix Mutati has clarified. And Mr Mutati has warned of hard economic times, stating that Government is not going to spend what it does not have nor will it borrow beyond its ability to repay. Unveiling the 2017 National Budget at Parliament yesterday, Mr Mutati said in order to restore economic stability, Government had designed an economic recovery programme dubbed ‘Zambia Plus’ aimed at ensuring sustained and inclusive growth.

Mr Mutati said Government realized that the hard choices it was making would have consequences on society particularly the vulnerable and there was need, therefore, to make a commitment to scale up social safety net programmes.   Mr Mutati said Zambia’s economic recovery programme was built on five pillars which included enhancing domestic resources mobilisation and refocusing of public spending on core public sector mandates as well as scaling up Government’s social protection programmes to shield the most vulnerable in society from negative effects of the programmes. He also pledged to improve Zambia’s economic and fiscal governance by raising the levels of accountability and transparency in the allocation and use of public finances and restoring the credibility of the budget by minimising unplanned expenditure and halting the accumulation of arrears.

Mr Mutati said the fifth pillar of Zambia’s economic recovery was ensuring greater economic stability, growth and job creation through policy consistency to raise confidence for sustained private sector investment. “This programme will not be achieved in one year, but over the medium term,” Mr Mutati told Parliament. “This budget, therefore, aims to set the foundation for success. Mr Speaker, I carry a message for my fellow Zambians. The message is simple. We are not going to spend what we do not have. We cannot borrow beyond our ability to repay. Turning the economy round requires that we make hard choices and implement difficult reforms. We are all agreed that the task of restoring stability and accelerating growth will not be easy. We have to be bold and decisive.” Mr Mutati said Zambia’s economy faced a number challenges which included low commodity prices, electricity deficits, high inflation, a deteriorating external sector, and Government’s challenge to finance its commitments. “Growth is, therefore, projected to be just above 3 percent in 2016 against a target of 5.0 percent and to marginally rise to 3.4 percent in 2017,” Mr Mutati said.   Mr Mutati said Zambia re-elected President Edgar Lungu and the Patriotic Front in the last general elections so as to continue with the ambitious development agenda. He said the PF government under President Lungu was a government for all Zambia and that the equitable allocation of resources in the 2017 national budget.