Friday, March 29, 2024

Finance Minister paints a gloomy picture of the Economy as a result of COVID-19, budget shortfall estimated at 20%

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Finance Minister Bwalya Ngandu says it is estimated that the budgeted revenue will fall short of the target by at least K14.8 billion or 19.7 percent of the approved 2020 budget.

Dr Ng’andu said this estimated impact does not include the revenue loss arising from the tax relief measures that he announced on 26th March 2020.

He said it is based entirely on the expected economic adjustments due to COVID-19 adding that in the projections, the Government has assumed that the peak period for the impact of the Coronavirus on revenues in April and May.

“If we further assume that the pandemic will be quenched by August 2020, we project that the negative impact on revenue will continue until December 2020.

Dr. Ng’andu said in addition, projections suggest that the reduction in the price of copper on the London Metal Exchange will continue until June resulting in a drop in mineral royalty and income tax payments from mining companies.

He said Pay As You Earn from the mining sector is also expected to fall as some contractors may lose their contracts going forward.

Announcing further measures aimed at mitigating the impact of the coronavirus on the Zambian Economy said scaling down of mining sector activities will lead to reduced engagement of foreign providers of management services, hence affecting Withholding tax receipts on management fees and consultancy.

He said the scaling down of economic activity is expected to cut across all sectors including manufacturing, transport, power generation and transmission, wholesale and retail trade, tourism and the hospitality industry in general.

Dr. Ng’andu said this will basically translate into a reduction in all tax and non-tax revenues among them PAYE, VAT, customs duty, excise duty, fuel levy, export duty, road user charges, fees, and fines.

He said in responding to these challenges, President Edgar Lungu directed the Ministry of Finance to prioritize the saving of lives by providing the Ministry of Health with resources needed to undertake the fight against the pandemic in a timely manner.

Dr. Ng’andu said furthermore, in order to prevent companies from collapsing under the weight of the current challenges, President Lungu has directed that both the Ministries of Finance and Commerce, Trade and Industry workout measures that will sustain businesses during this period.

He said in arriving at these measures, the Government engaged various stakeholders, including the business community as well as bilateral partners on the possible interventions to mitigate the negative impacts of COVID-19.

46 COMMENTS

  1. Wouldn’t it be nice, in turbulent times, to have financial reserves to fall back on? Like having taxed the mines instead of taking on debt from the mines ultimate owners, to be paid back at interest, and now to be defaulted upon? I’m sure with ever increasing demands from the IMF’s ‘structural adjustument programs’.

    Zambia should renationalize the mines and use all foreign currency earnings to develop the nation, district by district. How about a people centered plan to develop towns. Zambia could easily create a currency based on copper.

    Time to turn away from neoliberalism, free trade and supply side economics forever.

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  2. I cant blame Bwalya Ngandu for the PF’s economic mess. Things had already collapsed even before he and Covid-19 came on the scene.
    Because of the high debt levels brought on by the PF, Zambia missed out on the recent $130 million IMF Covid-19 debt relief package.
    Our neighbors Malawi,Mozambique, DRC benefited and but Zambia has to ask China for more money.
    SO SAD

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  3. Independent, you could have listened to the briefing before commenting as some details are not included in the above article

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  4. Dunderheads Primitives Lusambo and Kaizar Zulu jump up and down like monkeys when they hear “LOCKDOWN”…they think stopping people conducting business is funny business…now watch how the Zambian people will suffer….Kukopela Western countries and yet we dont even have reserves..going around beating innocent Zambians as if you have food to feed them useless PF bandit Pompwes and sleepy ever drunk Bandit President Edgar Lungu

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  5. The truth is Zambia and most African countries have no capacity to save their economies if this covid gets out of propotion. Neither do we have the capacity to save our population from dying using our meagre resources. Just imagine we get to the stage of TOTAL LOCK DOWN and we all stay at home for the next one month and the mines shut down ? Our manufacturing base will not feed us. Our supply chain will not deliver anything and the govt reserves will diminish rapily because no one will pay TAXES. PLEASE HID THE CURRENT ADVISE AS GIVEN BY LUNGU AND CHITALU to avoid going into a waste case scenario.

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  6. We have been advising PF regime for a long time on the fiscal discipline that should have been the core concept on borrowed loans for national expenditure. This was ignored as it worked against PF regime tendency of corruption and reckless spending on over budgets and over inflating of contracts for extra money to feed the greed of corrupt PF officials. Sad, PF can not bake and eat the cake themselves, others have to taste it. The result scored is Zambia has lost creditworthiness, unable to service existing loans, unable to borrow further from International Financial Markets. It does not end there, even failed to qualify for IMF Covid-19 debt relief package. This is a serious inditement to the nation. PF and Edgar Lungu have destroyed the international standing of Zambia on the world…

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  7. Please Zambia….I told you guys that PF bandits will start blaming the economic collapse on COVID….PF Bandits started stealing and wasting chinese borrowed money in 2011….there was no COVID then…. sikanka pakunya Kaizar Zulu and chi color Lusambo now go buy cheese for your fellow dull PF cadres

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  8. The indication of how useless African leaders are is that Africa with a population of 1.3bn people has 4 million intensive care beds in hospitals. KZ and his gang of F.OOLs have been laughing at people dying in Europe. Just wait mwana when the boom happens you will die like flies. I was in Poland just before the boom happened there and everyone was saying no we only have few numbers infected. I can assure you right now Zambia has thousands of infections…. its like pregnancy soon the woman will give birth

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    • So Ba Engineer you are actually praying for Africans to die like flies. Usually every post has a tone and yours is one of doom for Africa. Yaba What kind of Africans have we got?

  9. By fighting covid 19 on ground we help reduce impact, economically, socially and health wise. I am on the ground

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  10. They should not even blame covid-19. Ours is already a ravaged economy. They started ravaging this economy the moment they got into power. Shame!

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  11. RESTRUCTURE THE ECONOMY SIR. where is our ZAMBIA on the list below.
    Africa’s Most Visited Countries (2019)

    1. South Africa (16.65 million people)

    2. Egypt (13.1 million people)

    3. Morocco (13 million people)

    4. Tunisia (9.430 million people)

    5. Cote d’Ivoire (3.4 million people)

    6. Zimbabwe (2.6 million people)

    7. Kenya (2.2 million).

    • Like I have said elsewhere Africa needs radical Finance Ministers so that our economies can be restructure. We have ministers who come into office to imitate colonialists. No original ideas no consultation with economists and businessmen in the country. I think a person like that Dr Moyo woman needs to be appointed insuch portfolios because our current ministers have no courage to implement radical policy.

  12. Lets accepts Bowman is not clever academically, I doubt he even reads reports (he relies on his PS) but remember Michael Sata was not educated either but was very effective in every Ministry he worked, Bowman is like Sata. Just listen to the way he handles inteviews and he is very visible while other Ministers are sleeping.
    Bane Lungu is not seen anywhere in public, instead he decides to hide in state house. Bowman would be a very visible and effective President. Sadly the likes of Kampyongo, Jean Kapata, Joyce Nonde would be fired in a Lusambo Government.
    BOWMAN LUSAMBO FOR RUNNING MATE 2021 AND PRESIDENT 2026.

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    • @Patriotic Foolishness

      Ati Bowman, President, my foot!!! Anyway its a world and time of Patriotic Foolishness till 2021

  13. Let people go along doing their businesses, don’t interfere covid-19 will doa as it pleases those that get spared will live on to testify. It’s a fight beyond our capacity and capability the effects on the economy will be more devastating than the lives covid-19 will take because more will die from the aftermath shock than they will die from infection. The problem has been laid bare by ngandu let’s now collectively find a solution and work together.

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  14. Its not like revenues were going to raise …covid-19 is just a convenient excuse as Chilufya is pocketing all the money.

  15. Zambia’s economy was very sick under PF way before even Covid 19 came to the scene .This pandemic is a convenient excuse for PF’s failures.

  16. It’s time to now pay the price of specializing in by-elections at the expense of the real economy. For decades, Min of Commerce has been lethargic and we are now butt broke. Covid 19 just exposed the sad reality. We have a huge market in DRC but have chosen to use ZNS to engage in fruitless patrols to curb smuggling of mealie meal & Mukula instead of engaging ZNS to grow maize throughout the year to earn forex. Too much bureaucracy as one gentleman alluded to during the Q&A session. Let’s move quickly on medicinal marijuana than disgustingly debate bill 10 endlessly, Green party has been singing this song for a while now. Empower local companies to grow, how much has AVIC donated compared to Trade Kings despite “winning” multi billion kwacha tenders? This is a wake up call, African…

  17. At least the minister is trying to buttress the Zambian economy against the economic impact caused by the spread in corona virus global its expected countries like Zambia that are not well diversified will greatly impacted in the short to medium term Now without proper cares act and resilient measures to propel the economies to growth again the efforts in stimulus being provided by the minister our business and citizens must take advantage of before economies abound We espect more innovations from Gov and Individuals to make good and positive the risks presented on our economies by the epidemic There are positivities also to perform the Zambia economy Only for…

  18. those can see and look at the potentials positively and create value Take advantage of various rate cuts and profit because in such help to liquidity people will always find time to perform the economy of Zambia .Yes the outlooks in global could be depressed but potential there is for out performers and those who will seek those economic stimulus and value

  19. This Finance minister just wasted time and money for this briefing and he could have just written press release. Perhaps I could helped him to come up with robust cost cutting measures to eliminate financial challenges Zambia faces, although some Tom and Jacks would have cried for loss of ministrial jobs and board members and directors of certain parastal companies would have suffered greatly to mitigate the megre resources the country have. I know the country has been performing poorly since 2016 and it has been on life support of borrowed money from China and local creditors. Corona virus is just lame excuses of lazy and corrupt leadership.

  20. Ye had some points We know that the recent global outlook by IMF was not impressive The coming quarters will be more challenging for the Zambian economy with hghtened risks but Our systems that is Financial systems must come strong to recover and before coming to be under pressure as economic corrections global are made that should be in the mind of the minister because there could be contagions also The prediction by IMF of global economies contracting by 3% this year is also something to look at seriously apart from simply these Financial stimulus announcement and 20 Billion injection The response from our central bank and ministries must be forecast swift and…

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  21. and well coordinated to ensure the Zambia economy registers some performance amidst that Those stimulus programmes must have in view the additions against the sizable measure of GDPs You stimulate hoping to gain some growth and not simply in consumption areas alone

    The quicker the stimulus works out the economy the better and effectiveness Its not cast in the stone and by nature the global is always moving and move with time like it move in time away from the Financial crisis of 2008

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  22. If I were the PF finance minister, I would have recommended to the president considering to reduce the size of the cabinet ministers to at least 18, cut down the controlling officers some of them, down size the board members of the parastal organizations, implement robust anti corruption crusade and making sure the culprits are prosecuted and stolen proceeds are brought into the public coffer. I could havd engaged external debt or credit consultants to renegotiate the debts and interest payments and ask for deferment where possible. Then these measures would have helped economy of the republic of Zambia. Please this my opinion!

  23. That wont work at-least for now properly What is needed most is to provide stimulus and liquidity to critical sectors You should rater be taking advantage of his stimulus packages including the low interest rates to Invest in stocks others Gov across are engaged in bond buyout strategies and some in QE spending their reserves well to ensure liquidity to economic sectors are provided Restructuring debt and renegotiation term structures yes

    but like the storm at the Sea of Galilee Rembrandt of 1633 it will come to pass and the resilient Financial system and economies which Zambia should be now will sail the storm and land safely Its not game…

  24. but like we read about the storm at the Sea of Galilee Rembrandt of 1633 and likened to economic crisis such as this , it will come to pass and the resilient Financial system and economies which Zambia should be now will sail the storm and land safely Its not game over but be like Jose Mourinho ,the special one,and diverse workable stimulus and Financial restructuring strategies

    Look for value and solutions always do not be drowned in the forecasts ,grown and epidemics

  25. PF and lungu now have cover for their abysmal economic performance…….C19.

    Even western lenders giving debt relief to poor countries who’s economy will be affected by this pandemic know it is hopeless giving Zambia under lungu any relief because they will only get more Chinese loans and be back at square one in no time ……relief would be a waisted effort under lungu

  26. “Bull & Bear indicator” Its always to important to see how the markets are in those liquidity and asset trading Current there is a lot of activity in our class of bonds and commodities to help us assume resilient in this crisis so its above that The global outflows and Inflows are well modeled and often will change course but the zambia economy must see opportunities to restructure in this

    Okay napyamo

  27. The writing was there on the wall that the economy would collapse and they would jump on every excuse and use it as a smokescreen for their unprecedented levels of stealing of tax payers cash .How on earth can a country have forty eight houses without owners ?

  28. Yaa even payment holidays in case of our low reserves but some sectors certainly need that small 20 Billion to kick start some thing Those rates adjustments will also help businesses to build on cash flows You will always crisis of this and that putting up proper resilient systems will therefore be forward looking You cannot simply assume it will be well always no This is a global economy and must be seen from its effects and local so managed You can hedge out but what will work is the local resilient Financial and economic structures This disaster that This cares act that etc because the epidemic has come and history can repeat it self and therefore…

  29. in times like these of pandemics, the minister in his fiscal policy is correct to help save lives and provide healthy cover for Zambians But the Most important thing for him even now to ensure that the economy works grows and THE GOVERNMENT REVENUES CONTINUE quickly as before the epidemic everything else is supporting this That is why stimulus is important in those economic sectors whether deferred or in financials

  30. They couldnt pay retirees when they had money for Gulf Private Jet which is completely useless now in ZAF hanger …you surely expect these thieves to pay them now when money is tight..really laughable.

  31. Zambia’s economy was already ailing with various complications covid-19 just came to finish it like it is taking lives of those already sick.

  32. Something very unusual happened today, oil prices dipped below zero as producers forced to pay to dispose of excess. US crude has negative value for first time in history as stockpiles overwhelm storage facilities. If this fool Ngwenya Ngandu Bwanyo had a proper brain not thuse Katangese Kasai faeces he has in his skull, they would buy in massive bulk now to help kick start the economy after COVID-19.

    • This was not the OPEC prices. It was American oil and Zambia doesn’t buy from the US. Well placed buyers in Canada and Mexico could have taken advantage

  33. Kaizer Zulu,I know you’re not a sela kwakaba, what’s your take on the economy boss. Ati boma ya broka, Nizoona ai?

  34. I expected the minister to focus on real issues affecting citizens during this period of the pandemic, e.g why hasn’t he reduced or slashed import duty on fuel?

  35. We are being ruled by people who sound like they have had a serious bump on their heads .The only thing they can remember now is fattening their bank accounts with tax payers cash .The ACC makes me sick .How can they fail to locate the owners of the forty eight houses ? Zambians think it is the ACC and the police who should be in court charged with gross incompetence which has resulted in the collapse of the economy of our once rich country .These guys are a joke and worse than covid -19

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