Finance Minister Bwalya Ng’andu has unveiled a K119 billion proposed National Budget for 2021 aimed at laying a foundation for economic recovery, safeguarding livelihoods and protecting the vulnerable in society in light of the COVID-19 pandemic.
The usual pomp and splendor that characterizes budget presentation was missing today when Dr Ng’andu arrived at the National Assembly building at 13:58 hours in the company of his wife and daughter to present the country’s proposed budget.
The ceremonial events were suspended as the country observes the COVID-19 health guidelines following the outbreak of the pandemic which has claimed many lives world over.
Dr Ngandu presented a K119.6 billion proposed 2021 national budget representing 32.6 percent of the Gross Domestic Product (GDP), which is more than the K106 billion 2020 National Budget.
Of this amount, K68 billion, representing 18.5 percent of GDP will come from domestic revenues and grants, while the balance of K51.6 billion will be raised through domestic and external financing.
Delivering the 2021 budget presentation, Dr Ng’andu said government has developed a medium term Economic Recovery Programme as a successor to the Economic Stabilization and Growth Programme of 2019.
He said the Economic Recovery Programme provides incentives to reinvigorate growth and build resilience and safeguard livelihoods and protect the vulnerable in society as well as restore debt sustainability.
Dr Ngandu said the 2021 budget will now be output based as opposed to activity based budgeting in order to promote performance and enhance transparency and accountability.
The Minister of Finance has since raised the exemption threshold for Pay-As-You Earn to K4, 000 from K3, 300 per month in order to increase disposable income of employees.
The minister has further given relief to differently abled persons by increasing tax credit to K500 from K250 and has also increased deduction by an employer for employing a person with disability to K2, 000 from K1, 000.
He has also increased the allocation towards dismantling of arrears to K2.3 billion in 2020 from K437 million in 2019.
Further, Dr Ng’andu said Government will reduce borrowing from the domestic market to 1.1 percent of GDP from 1.4 percent of GDP in 2019.
He said government is resolved to restore fiscal health and has projected fiscal deficit to reduce to 9.3 percent of GDP in 2021 from 11.7 percent in 2019.
Dr Ng’andu has since proposed to spend K57.8 billion for general public services with K18.3 billion being for domestic debt servicing and K27.7 billion for external debt obligations.
The minister has further allocated K1.2 billion for the Local Government Equalisation Fund and K598.1 million for the 2021 General Elections.
Dr Ngandu said government has provided K2.8 billion to dismantling arrears owed to suppliers of goods and services in order to improve liquidity and stimulate economic activity.
He said government has allocated K5.7 billion for the Farmer Input Support Programme (FISP) to reach out to 1 million farmers and a further K517.5 million for the national strategic food reserve in order to make the country food secure.
The minister said government will spend K567.3 million to complete the Kenneth Kaunda and Simon Mwansa Kapwepwe International Airports while K6.2 billon will be spent on ongoing road infrastructure projects.
Dr Ngandu said K13.8 billion has been allocated to the education sector in order to improve it with K7.1 billion for early childhood and primary education, K2.7 billion for secondary education and K1.9 billion for tertiary education.
The health sector has been allocated K9.7 billion with K3.2 billion for primary health care while K5.1 billion for hospital services.
He said K1.4 billion from the budget for primary health care will go towards the procurement of essential drugs and medical supplies.
Dr Ngandu said a further K4.8 billion has been allocated to mitigate the impact of Covid 19 and enhance social protection with K2.3 billion for Social Cash Transfer and K1 billion for the Food Security Pack from K100 million.
Government has also provided K6.7 billion on Defence, Environmental Protection, Religion, Recreation and Culture while Housing and community amenities has been allocated K2.2 billion.
Dr Ngandu further said government has allocated K266.3 million for youth and women empowerment with K155.2 million specifically for youths.
He explained that the budgetary allocations for 2021 are based on priority areas as identified in the Economic Recovery Programme as aligned to the 7th National Development Plan.