The just-announced 2022 national budget by the United Party for National Development (UPND) government has been described as an ‘ambitious budget’ as it can make the party in government or break it.
In an interview in Lusaka, Lusaka based economist Lubinda Habaazoka said that in as much as it is a formidable budget the party in government should strive to attain it and be able to raise the much-needed revenue, particularly with the first Eurobond due in 2022 and with no concrete pronouncement in the 2022 budget that was made by the finance minister on how the country is going to treat that EURO bond.
Dr. Habaazoka noted that if the government can manage to raise the resources, the country’s economy may improve owing to the fact that there are about 44, 000 jobs to be created.
“First of all the budget is US$10 billion, guaranteed revenue to support the budget is about five billion this can be easily raised if the economic growth remains at the same trajectory and if efficiency in tax collection continues.
“But what is worrying is the other five billion of which about 4.3 billion is going to come from debt. This amount of money is so huge owing to the fact that we already have about US$12.9 billion external debt and if for example, the previous government borrowed about US$11 billion in the last ten years because the MMD government left about one point eight billion, this means that for the year 2022 we shall borrow US$4.3 billion,” he stated.
“And the recruitment of teachers, health workers, and agriculture extension officers is a very welcome move and there are a lot of people that are languishing in the streets, people that are qualified to do jobs who are not engaged in any activities. Kudos to government that they will be creating about 3, 600 jobs every month up to December for us to achieve the 44, 000 figure, which is a very good move, ” he said
He, however, lamented that this is not backed by any strong fundamental shift in the macroeconomic valuables and the growth of the economy.
Dr. Habaazoka indicated that what will happen in the coming years is that these new recruitments are going to add to the wage bill by not less than K2.5 billion and this will have to be born by a very small formal sector of Zambia struggling amidst COVID-19.
He stated that this should not resist the government from recruiting people but that it is something to think about and worry about.