NEW BUDGET, SAME OLD STORY
Hon Felix Mutati and his drafters of the budget tried very hard to sound convincing and forward looking in their wording of the 2017 National Budget, but like the old cliché goes the devil is in the detail. A critical analysis of the 2017 budget has proved that there is really nothing fundamentally new or radical about this budget; The 2017 National Budget, just like the previous ones under the PF Government lacks radical measures to eradicate poverty, create jobs, create wealth, spur growth and ensure sustainable development. Just like the previous PF budgets, there is really nothing much in this budget that can significantly turn the fortunes of the poor farmers or the working poor or the small and medium scale businesses.
There is an enormous gulf, in fact a gigantic contrast between what Hon Mutati says are his macro objectives and the measures he has actually proposed to achieve the same said macro economic objectives. He says we should not spend more than what we have but his Government is creating more ministries as well as proposing the re-introduction of Deputy Ministers among other unnecessary government expenditure; He says Agriculture and industrialisation will be the hub of Zambia’s economic recovery but his allocations to these sectors fall far below recommended thresholds; he says capital projects such as road constructions will be slowed but he goes ahead and allocate collosal sums of money in the budget towards the construction of the same roads; He says the Public Finance Act must be amended to make it more punitive to public officers who are embezzling public resources but his Government has serious inertia on acting on the Auditor General’s report despite the amended Republican Constitution being very instructive on what should be done with regards to thieving public officers.
In short, in terms of the quantum, the structure and focus, nothing really has changed in this year’s budget; The working poor will have to pay more in taxes than the mining conglomerates and other corporations put together. Small and medium sized businesses will either have to cut down on their business activities or cut down the size of their workforce or worse still fold up all together due to the ever rising cost of doing business, the massive hikes in taxes such as income tax rates, exercise duty, company income tax and other regulations such as lending rates that have drastically been adjusted upwards.
Let’s now break down the budget in terms of sectors and allocations.
Of the total budget of K64.5 billion Kwacha a total of K19 billion, that is 29% of the entire budget will be financed through borrowing.
1. GENERAL PUBLIC SERVICES
Out of a total of K18billion kwacha allocated to General Public Services, a whopping K11.5 billion of this money will go towards payment of debt leaving a paltry K6.5 billion for actual implementation of public services. Debt repayment and payment of arrears to road contractors and suppliers will gobble the biggest chunk of the entire general public service allocation. CDF has remained almost static at K1.4 billion despite the fact that the cost of goods and services is ever on the rise.
The biggest challenge beleaguering Zambia’s health sector is the lack of access to quality and affordable healthcare by our people.
The total allocation to the health sector is K5.8 billion representing 8.9% of the entire budget. To begin with this amount falls far below the recommended 15% threshold and to make matters worse, the bulk of this allocation is going to emoluments. Only slightly over K1billion will go towards the purchase of drugs, medical supplies and infrastructure development the rest, about K4.7 billion will go to emoluments.
Like the health sector the biggest challenge hampering our education sector is the lack of access to quality and affordable education.
K10 billion, representing 16.5% of the budget has been allocated to the education sector. Of this about K8.4 billion will go to emoluments leaving very little for infrastructure development, training and research and development.
President Edgar Lungu and his Ministers have spent alot of time talking about their vision to diversify our economy from one, depending on copper mining to one depending on Agriculture. And most people were expecting a revolutionary change to the allocation and structure of the budget money towards the agriculture sector but apart from the K55.4 million Kwacha that has been earmarked for a cashew nuts project in western province nothing much has changed to ensure a robust program of mechanisation, diversification and agro-processing. The allocation to FISP has remained static and the biggest question with regards to FISP is whether it has been effective in moving farmers from the peasantry bracket to the subsistence bracket and enventually to the commercial brackets. It seems FISP is there to just keep farmers stagnant in their poverty. Very few farmers are graduating from peasantry to subsistence due to inadequacy of FISP and the infective manner it is being administered.
I want to commend the Minister, however for proposing the removal of bans and price fixing because such measures distort production as they send uncertainty in the market.
Very little has been allocated to Rural Electrification. This will continue to undermine rural development because electricity just like fuel is the engine of production.
The story of irrigation has been on the cards for years now but nothing significant has been achieved. I would like the Hon Minister to explain what happened to the 150million dollars that was borrowed for irrigation projects as way back as 2014.
5. HOUSING AND SANITATION
Over 40% of Zambia’s population has no access to clean water and over 40% of our rural population has access to sanitation. We expected a significant amount of the proposed budget, as opposed to the K822 million to be allocated towards housing, water and sanitation because these are crucial in the provision of healthcare and reducing the burden on our healthcare system. Housing is dignity. Water is life and nyumba ni chimbuzi. This meager allocation will only have a 3% bearing on improving access to housing, clean water and sanitation. This is very minute.
It is now abundantly clear that loadshedding is damaging our economy as it is seriously hampering production. And it is also very clear that our over dependence on hydro power is not helping us. We expected a revolutionary change in the allocation and structure of both the budget and ZESCO with regards to energy but it’s the same old story.
The Minister should also have explained what happened to the Eurobond money which was meant to improve generation, transmission and distribution of electricity. What happened to that money. Equally what happened to the Eurobond money meant to revamp railway transport?
In terms of the percentage quantum Hon Mutati has significantly increased the allocation to social protection, however, the social cash transfer at about K192 per month is quite insignificant.
All in all, in terms of the quantum, the structure and focus, the 2017 budget is just the same as the previous budgets. In short, we have a new budget but the same old story. Zambians should just brace themselves for harder times.