Wed, 31 Jan 2018 13:07:43 +0000
By BUUMBA CHIMBULU
GOVERNMENT has clarified that the International Monetary Fund (IMF) support currently under negotiation process, is not part of the 2018 national budget financing and that the delay for the agreement will therefore not have any impact of the execution of the plan.
Government has however said the programme, once concluded, will be premised on the balance of payments support through the supply of resources towards the national reserves.
According to Government, the 2018 budget was skewed towards domestic revenues and confirmed external support.
In a statement released by Ministry of Finance head of public relations and media, Chileshe Kandeta, Government, however, remained optimistic that when the support from the IMF was finally agreed, the recovery and positive performance that Zambia was currently experiencing would further be augmented resulting in accelerated recovery and robust growth.
Mr. Kandeta emphasised that the IMF support was not intended for budget support and therefore, the delay in ascending to a programme, regrettable though it maybe, would not have a debilitating impact on the budget.
He said to avoid disruptions in its implementation, Government had put in place cautious measures and it would not rely on parameters that were outside its control.
“The estimates of revenue and expenditure and the other economic parameters adopted in drawing up the budget for the current fiscal year are premised on domestic resources and confirmed support from some of Zambia’s Cooperating Partners,
“In this regard, the envisaged support from the International Monetary Fund has not been taken into account in our economic parameters as no programme has been concluded yet,” he said.
Mr. Kandeta said the domestic resource mobilisation enhancement measures which were being implemented as part of the 2018 budget, coupled with the stepped-up focus on public-private-partnerships, would be the game changers in the way the Government financed development programmes.
“The Government will in 2018 continue with the economic stabilisation and growth reforms. The process will involve taking fiscal measures to consistently lower the budget deficit until a target of at least 3 percent of GDP is attained by 2020. In this regard, the measures to increase domestic revenue and contain expenditures will remain in force,” he said.
Meanwhile, Mr Kandeta said the 2017 economic performance was driven largely by positive performance in manufacturing, mining and agriculture sectors adding that Gross Domestic Product growth continued on a positive trajectory.
He explained that the good performance coupled with Government’s measures in transforming economic management had been confirmed by international rating agencies, Moody’s and Standard and Poors, both of whom had in the past few months affirmed their ratings and revised the country’s outlook to stable from negative.
“Inflation was contained within the band of 6-8 percent that was set at the beginning of the year. End year inflation was 6.1 percent.
“Budget performance was satisfactory with preliminary numbers showing that the fiscal deficit was 6.1 percent of GDP against a target of 7.0 percent, consistent with fiscal consolidation policies that the government embarked on in 2017 and is continuing with. In the year under review, tax revenues also performed above the budget target by 3 percent,” he said.
