By OLIVER SAMBOKO
THE reclassification of Zambia as a low income country may induce lenders that provide grants and financing to low-income countries to relook at their policies on Zambia and resume grant financing, Finance and National Planning Minister Situmbeko Musokotwane has said.
Delivering a Ministerial statement in Parliament yesterday, Dr Musokotwane said this may be more helpful for Zambia given the high indebtness the country is undergoing and the policy that have been put in place to stop commercial borrowing.
He however, said on the negative side, the level of resources Zambia can access for development will now be less as the country cannot borrow non-concessional loans even if its debt crisis is resolved. Dr Musokotwane said government is confident that next year, the country will have a better assessment by the World Bank and get back on track towards meeting the clear aspirations of the Zambian people as contained in the Vision 2O3O. He said upon assuming office, the new Dawn administration undertook economic transformation with focus to stabilize the economy.
Dr Musokotwane also said Zambia had a GNI per capita income of US $1,000 in 2021, from US $ 1,190 in 2O2O, adding that despite positive growth in 2021, the economic challenges of the past years continued including sharp depreciation of the Kwacha against the US dollar.
Dr Musokotwane explained that the 2022 classification of Zambia to low income country was based on performance in 2021, and that the World Bank used the threshold of Low income, Lower Middle, Upper Middle-income, and High Income above US $13,205 GNI per capita.
Dr Musokotwane said should Zambia’s GNI per capita for 2022 remain below the operational cut off point again, the Zambia will move from blend to IDA, with concessional financing for the fiscal year 2024 that begins in July 2023.
He said if Zambia’s income remains below operational cut off point for three consecutive years, accessing financing from the concessional window will imply cheaper interest rates for the country as the terms will be lower.
He said so far, government has managed to bring down the inflation rate, stabilize the exchange rate, and controlled domestic borrowing resulting in lower cost of funds.
Dr Musokotwane also said government has introduced free education, decentralized resources through the CDF and scaled up social sector spending and that recruitment of health personnel is close to fruition, and the successful applicants will be announced in the next few weeks.
He further said government has embarked on a multi-pronged approach to improve the financial and economic governance of the country, which includes return to debt sustainability through debt restructuring among other interventions aimed at improving the economy.
Meanwhile, Dr Musokotwane told Parliament that reports suggesting that ZRA did not meet the revenue target for the first half of 2022 are incorrect and totally baseless.
He said in 2022 National Budget, the approved revenue estimates under the mandate of ZRA was K91.03 billion, and that in the first half of the year, ZRA was expected to collect about K46 billion but that the Authority has collected K48.31 billion, which was more than what they were expected to collect for the first half of 2022.
He said all the revenues collected by ZRA are monitored by the Ministry on a daily basis as they are credited to the Treasury Account and as such, cumulative amounts that are reported at the end of any period, are reconciled and cannot be misrepresented.
