The 2023 National Budget: A Look At The Macroeconomic Objectives


By Sean Tembo – PeP President

1. Naturally the 2023 National Budget which was unveiled by the Minister of Finance last Friday, is a bulk document. This makes it impossible to analyze all of it in one goal, that is if one intends to do a good job. So we are going to look at it one portion at a time. Subsequently, these portions will be consolidated into the PeP 2023 Alternative National Budget which we intend to present to the public before the end of October, 2022. The first portion of the 2023 National Budget which we are going to look at are the macroeconomic objectives. These are the goals which the New Dawn administration intends to achieve for the 2023 financial year. In analyzing these macroeconomic objectives, we shall be looking at how ambitious and attainable they are. Goals should be ambitious enough but reasonable so that they can be attained.

2. The starting point is that MoF says the K167.3 billion 2023 national budget represents 31.4% of the projected GDP for 2023. This means the projected GDP for 2023 can be calculated at (K167.3/0.314) K532.8 billion. The projected GDP for 2022 is K418 billion using an average exchange rate of K16 per US Dollar. That means based on the figures in the budget, Government intends to grow the GDP by (K532bn-K418bn) K114 billion representing a growth of about (K114bn/K418bnx100%) 27% in monetary terms or about 17% in real terms if we factor average inflation of 10%, which is even conservative because MoF says their target inflation rate is 6-8% in the planning period. Our submission is that a GDP real growth rate of 17% is not possible, given the existing economic conditions and policies in place. Even if it were possible, pursuing such an overambitious growth rate would make the economy to overheat and boil. Therefore, in this particular regard, the 2023 National Budget is premised on a fallacy.

3. The next macroeconomic objective in the Budget is that the New Dawn administration intends to limit domestic borrowing to not more than 3% of GDP, which amounts to about K16 billion. However, domestic borrowing is currently standing at about K203 billion, which represents about 38% of the projected GDP for 2023, meaning that Government is targeting a reduction in domestic borrowing of about (K203bn – K16bn) K187 billion. This is not only overambitious and unrealistic but it is also not feasible because the National Budget for the 2023 fiscal year is only estimated at about K167 billion.

4. The other microeconomic objective is to reduce fiscal deficit to about 7.7% of GDP, which amounts to about K41 billion. This represents more than 24% (K41bn/K167bn) of the national budget which is not only very high, but also contradictory. A fiscal deficit is simply the amount by which the expenditure is expected to exceed the revenue. It is a revenue shortfall to fund the budget. However, when you look at page 49 of the budget, the total projected revenue of K167 billion is equal to the proposed expenditure of K167 billion on page 43. Now, if the New Dawn is telling us that they expect a shortfall in revenue of about K41 billion, then perhaps they need to go further and tell us which revenue lines they expect to underperform. Also, if you know in advance that some revenue lines in the budget will underperform, then why not adjust the budget so that it can reflect the expected reality. Why develop a K167 billion budget when you know that K41 billion of that figure is unlikely to be realized? Why not develop a (K167bn – K41bn) K126 billion budget?

5. Indeed, based on the little that we have analyzed so far, the 2023 National Budget that was presented by the Honorable Minister of Finance is self-contradictory, inaccurate and convoluted. It is inadequate as a tool for guiding Zambia’s economic management for 2023. The trouble is that the National Budget is developed using a template that was developed more than 20 years ago, and whose relevance has diminished over the years. We were hoping that the New Dawn administration would develop a modern template for the National Budget. One which is realistic and relevant. Last year we decided to excuse their failure to develop a meaningful budget because they had only been in office for a few months and we’re developing the national budget at gunpoint, but this year there is no discernible excuse why they could not do a proper job. The bottom line is that you cannot implement what you cannot plan.


  1. We the PF in UK believe that SET would be a big asset to the pf..can join forces with this wise man.

    Set is offering checks and balances in the right way. All he needs is a strong platform to stand on like PF

  2. SET your take is high appreciated, keep up your good work.
    But Sean, you should have developed a PeP budget before or along with the New dawn just in case the govt fails the vote of no confidence(pun intended).
    So what you can do now as you analyse propose policy suggestion or amendment to help your big bro HH cohort.
    As you know, budget is at bill stage subject to parley adoption procedures.
    Fine, along with Pep alternative budget, may be suggest a more potent budget template using the new dawn budget as a case study.

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