There are no funds being saved from removal of subsidies – Chikwanda

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Finance Minister Alexander Chikwanda with Muchinga Permanent Secretary Charles Sipanje touring newly opened Zambia National Commercial Bank Branch in Nakonde
File: Finance Minister Alexander Chikwanda with Muchinga Permanent Secretary Charles Sipanje touring newly opened Zambia National Commercial Bank Branch in Nakonde
Finance Minister Alexander Chikwanda with Muchinga Permanent Secretary Charles Sipanje touring newly opened Zambia National Commercial Bank Branch in Nakonde
Finance Minister Alexander Chikwanda with Muchinga Permanent Secretary Charles Sipanje touring newly opened Zambia National Commercial Bank Branch in Nakonde

Finance Minister Alexander Chikwanda has clarified that there are no funds that are being saved from the removal of subsidies on fuel and maize.

In the recent past some civil society organizations in the country had been pressing government to avail how much it has saved from the removal of subsidies on fuel and maize and how the saved funds are being utilized.

But Mr. Chikwanda has explained to Qfm news that what government is actually doing is merely preventing expenditure of funds that were being allocated for the subsidies.

Mr. Chikwanda says this is also what government implied when it said it is saving funds from the remove of subsidies by cutting expenditures on subsidies.

The Minister has also notes that government has to this effect increased expenditure to other areas of developmental projects which he says could have suffered if such funds were still being allocated to subsidies.

97 COMMENTS

    • hahahahahah! what is the minister taking about here??… if you are avoiding/preventing expenditure you must be saving in some way!!,,, you people who claim to be educated,, explain your economics!!!

    • Hey, minister, the citizenry wants documented proof from the Ministry of Finance in respect to the funds which were initially meant for subsidies, but which you purport that it is now being diverted to other developmental projects. Phrase differently, there is no transparency in your state expenditures and yet, all state officials claim that there is zero corruption in all gov’t departments. We cannot believe you on the face value and we have to probe your claims in order to balance the interests of society and attain legal convictions of community. Your gov’t is incompatible with facts and, you cannot bring chips on the deck and accuse your humble masses of desperation whilst resorting to name calling.

    • @ Mushota, I also wonder what this minister means. Are they telling us that cutting subsidies was unnecessary? Coz if really was necessary, then it should results in certain numbers, and those are the numbers that Zambians demand to know & also what’s happening to them!

    • Hey, minister, there are a lot of grey areas in the manner in which you allocate funds to various ministries. similarly, you always fail to disclose any proof of what has been spent or what has been left after funds allotments. Who is auditing your accounts? For the purposes of being fair and transparent, the Zambian people need the services of an independent experienced auditor who can thoroughly scrutinize your expenditure. We are of the view that there are a lot of rotten apples in your system and the big fish is rotten from his head up until to his tail. The whole Sata administration needs to be shaken up and thoroughly cleaned. You have created a huge mess and this mess will cost tax-payer a lot of money so as to correct it. This mess is being executed at the expense of tribalism.

    • Minister, Chikwanda, I am postulating that you must posit to your commander in chief, Sata, that concerned world citizens are willing to provide solutions to Zambia’s manmade financial mayhems, on the condition that they are given access to complete data about Zambian gov’t ‘s expenditures dating back from 2011 until to this financial year. We do not need stories such as shifting the blame to the opposition especially the UPND or least the MMD. Sata and his cronies are victims of their own circumstances and, they (Sata & his cronies) always strive to appear flawless and victims of the opposition. Do not offer the above immediate breakdown of your excuses because we already know it. Please, do not bother or else it is an evident attempt designedly made to insult our critical reasoning.

    • Really Ba Paya Farmer fiposwa. They are a waste.

      Mr. ABC, what we the people are saying is simple.

      We are not asking you to show us a suitcase of the money saved from subsidies. NO!

      We want you to tabulate nicely from the available trade data for a given period (Say from June to Dec 2013) how much money that was originally budgeted for subsidies, was saved, and where that money was spent.

      E.g. If K 2m should have been spent on subsidies, tell us. Also tell us which project benefited from that K2m.

    • Money saved from subsidies is being spent on schools, universities, roads, etc. It is not being saved in the bank, but diverted to other projects. If you initially wanted to spend K30 000 on a 75 inch LED 3D TV, but decide to buy a plot, it does not mean you have saved, you have just used your money wisely! Capital expenditure instead of consumption

    • Chikwanda has just confirmed what HH said about the PF scheme to remove subsidies as some dodgy ploy for them to misappropriate the money.

      They just wanted to show credibility to IMF so they could borrow money from IMF and other lenders. Now that all the money has been used for by elections and no major lender wants to lend them money they have now admitting the obvious that most us have known since the removal of subsidies was announced.

      Even the postponement of the by elections is partly due to lack of money.

      Government workers brace yourselves for a time when you will not be paid your salaries for months because the government is dead broke. This is bound to happen very soon. This is happening already to some workers in created districts and very soon it will be wide spread.

    • 1.11 That is the point i was looking for good explanation Action man. Reading most of the comments makes me wonder the bloggers are high school drop-outs or…..! It is simple English, it’s not magic so don’t jump to conclusion, read and understand the main idea in the paragraph like Action man and me. Ba Mwankole muleikalafye

  2. Uhm, okay am a little confused here, if, say, in your home you used to pay for the full bouquet ku DSTV which is roughly K500 per month and then you decide that you will downgrade to the mini bouquet which is about K170, then what do you call the K330 difference which you would not have spent that month? Is this not a saving? Am I missing something here from honourable Chikwanda’s statement or is he trying to be clever with words?

    • If you apply that to ZESCO bills, it becomes an increase on utility expenditure. What the minister is saying is that we are not saving but diverting the money to more meaningful projects. CSOs want a specific amount which they think is lying idle somewhere in some bank. Like govt has no plan for the same money..

    • @milansichinga
      get your head screwed up straight!!! for you to divert money to other projects… that money must be saved from somewhere first.
      so if you were to be right then the minister should have said that what is being saved from the removal of subsidies is being used somewhere else

    • Money DIVERTED from subsidies is being spent on schools, universities, roads, etc. It is not being saved in the bank, but diverted to other projects. If you initially wanted to spend K30 000 on a 75 inch LED 3D TV, but decide to buy a plot, it does not mean you have saved, you have just used your money wisely! Capital expenditure instead of consumption

  3. Running government is a serious matter . It needs men and women with a plan. If a teacher to teacher a grade 1, one plus one is commanded to have a lesson plan what more of a country?

    • Chikwanda shouldn’t be in that portfolio OR anywhere near 5miles radius of that ministry. Sata had an opportunity to headhunt anyone for that position what did he do…he handpicks this utterly clueless old man from UNIP who happens to be his uncle.

    • @Jay Jay.
      The one who picked him is also a clueless fellow from UNIP! Tribe yes or maybe but there is just sheer incompetence here.
      This from a person who has been in govt from the time he was 20 years old is just a clear case of a person who can’t just be taught anything or can’t learn. This country is doomed.

  4. This an utterly reckless government…honestly what government spends 12% of GDP on wages for public service. …with the creation of the pointless IDC, I see this wage bill raising.
    Fossil Chikwanda has got a clue about public finance management…absolutely no clue.

  5. If money is not spent on subsidies it is saved (S), if those savings are used somewhere else, they are invested (I). There is money being saved. What people may be wanted to know was how much could have been spent of subsidies but was not spent on them and how those savings are being reallocated and where

    • Impossible to determine that. This is because budgetary allocation to every sector of economy is not static every year. For example, suppose the subsidies are still in existence today, it implies that the budgetary allocation for last year will be different from this year because of so many changes in the economy which includes the prices of fuel and farming inputs. Therefore, the issue of serving does not arise as the policy direction is to stop subsidizing but to increase budgetary allocation to areas such as Education, Health, Infrastructure development etc. As mentioned earlier on, There is no way the government should start estimating how much should have been allocated to subsidies assuming they were in existence. the question is, have we seen any increment in the health, education?

  7. Shikulu… sir the money you are now able to allocating to other expenditure is the saving we are asking for. we seem to be going round in cycles even on simple issues. if for example you were spending KR1million on subsidies thats the saving you are able to allocate to other expenditures. so what we are asking is how are you spending the KR 1 million ….which expenditure is benefitting from the saving and how much has been allocated.

  8. ‘The Minister has also notes that government has to this effect increased expenditure to other areas of developmental projects which he says could have suffered if such funds were still being allocated to subsidies.’

    Yes Minister, this is the breakdown we want! We want the actual figures that you have diverted to these other areas and HOW exactly they have been allocated. This is information a normal minister of finance would give us not just this useless blanket statement iwe! it’s called ‘accountability!! People need to understand why they are buying ubunga at K90 pin you m.oron, and this can be done by following the audit trail of these ‘non-saved’ funds from subsidy removal. But ba PF mulanasha zoona, even when we pledge we are tired of commenting you come up with such…

  10. Dude u are right indirectly they are saving. What the Minister is saying in short is that they never used to budget funds for subsides and if that’s the case then he needs to tell us how much money would have been wasted on subsides had they not removed it.

  11. I don’t seem to understand what the minister is taking about here. our understanding of a savings is when instead of paying. so much as subsidy that money is no longer being paid therefore is amounts to a savings whether that money is being spent in other important areas it still applies. Chikwanda must still account for that money.

    • Money REDIRECTED from subsidies is being spent on schools, universities, roads, etc. It is not being saved in the bank, but diverted to other projects. If you initially wanted to spend K30 000 on a 75 inch LED 3D TV, but decide to buy a plot, it does not mean you have saved, you have just used your money wisely! Capital expenditure instead of consumption

    • Hey Action Man, what you are doing is similar to shouting to make you point. A good point need only be said once to be appreciated. If its ignored then people dont understand or its utterly stupid. Keep posting that and people will go for the the latter.

  12. Put differently, maybe the Minister can explain the percentage increase to other sectors given that subsidies have been removed. Awe ba Chikwanda nayimwe, ku ingilila abantu mu kaputula uku, ni simple economics iyi, understood by many. Zambians are not stupid and this answer is really an insult to their intelligence.

    • True!! I do not understand why they cannot acknowledge that the Zambian of today is not the same timid naive Zambian of the UNIP days. We WILL question such funny statements so you can forget whatever illusion you have in your old head that we will swallow without question whatever comes out of your mouth.

  13. More like:

    We are not on contraception.

    Mr. Chikwanda has explained to Qfm news that what government is actually doing is merely preventing ejaculation of semen that were being allocated for ova.

  14. @Milansichinga

    Bro what do you mean are you supporting the minister? the money being diverted is from savings from subsidies….

  16. This explains why IDC or indenco won’t work , too much diversion of funds
    With zero budgeting, so we are wasting our time with coming up with a budget
    Only to trash the budget and resort to unvouchered spending, I don’t think the
    The minister even has an idea where all the money is going

  17. this must be the most incompetent finance minister this side of the equator.are we really that short brains in zambia sure.GOD speed the day………

    • But our dear Ukwa Chumbu Munshololwa Chimbwi no plan of the urinary bag told us that his appointments are based on brains and not tribe!

  19. How can anyone in their right frame call subsidising mealie meal meaningless? When ministers can’t understand simple issues, then we are in serious trouble as a nation. Than Chikwanda appears to know only one thing: borrowing! Kwasila!

  21. thus being very stupld if so then you must bring back our subsidies so that we continue enjoying our money as we used

  22. I thought they said removal of subsidies was going to benefit the poor,What a big joke or scam.Please our leaders be serious we are all not fools like your cadres that you choose to tell lies at will.Honestly this who thing is making me sick.

  23. Some explanation here: As the Minister says, there is no ACTUAL SAVING of money here. What has happened is that the government has not BUDGETED OR ALLOCATED any funds for these two subsidy components. Assuming the budget with these two subsidy components was “W” (X + Y with Y being the amount for these two subsidy components and X being budget without them) then this year’s budget is simply X. The “SAVING” if any that may have been there to talk about should have been this Y but it cannot be said to be a saving because it was not budgeted for in the first place. It would have been a different story if the government had budgeted for these two subsidy components and the Minister would have mentioned this amount but he cannot because it was not budgeted for. Clear or still confused?

  24. That is state secret. But I can guess where the money is going. Increment for president’s salary, pay for increased number of deputy ministers and their allowances, pay for DCs in the new districts and their staff, pay for ambassadors and high commissioners without vacancies etc.

  26. THE GOVERNMENT IS NOT A BANK. IT IS NOT LIKE MONEY SAVED BY REMOVAL OF SUBSIDIES IS KEPT IN SOME BASKET SOMEWHERE. AS IF THE GRZ HAS NO PLANS. THE MONEY IS IMMEDIATELY CHANNELLED TO OTHER ACTIVITIES.

    • Stop thinking like a child and imagining things “like immediately channeled to other activities” .There is a distinct and laid down procedure of doing things which incudes planning and budgeting.The government comes up with the budget and should be able to produce figures showing the increment in allocation to other developmental sectors resulting from the non allocation to subsidies

    • Please,I hope you understand the term “saving” and then directing it to something else,” a little bit of self education could come in handy. Regardless of our politics let us be honest and truthful, the statement by the minister is absolutely crap, full stop. He is a dinnassour and may not be conversant with current economic thought or theories, this is the 21/ going into the 22nd century.

  27. What the minister is saying is that money which was meant for Subsidies is being channeled towards developmental projects.

    We need details from the minister in terms of numbers and projects that are being undertaken as a results of these funds.

  30. @Mushota

    THIS IS SIMPLE ACCOUNTING ENGLISH.

    THE MINISTER IS SIMPLY SAYING THAT SUBSIDIES HAVE BEEN REMOVED AND THAT THE EXPENSE HAS ALREADY BEEN ALLOCATED TO OTHER AREAS OF DEVELOPMENTAL PROJECTS SUCH AS THE NEW AIRPORT AND ROAD UPGRADES, WHICH HE SAID COULD HAVE SUFFERED IF SUCH FUNDS WERE STILL BEING ALLOCATED TO SUBSIDIES.

    IN OTHER WORDS, THERE WOULD BE NO SAVING AS SUCH WHEN YOU DECIDE TO SPEND THE MONEY ON CAPITAL GOODS INSTEAD OF SPENDING IT ON CONSUMER GOODS.

  31. I’m inspired by great African leaders like The Great Thomas Sankara of Bukina Faso who lifted that country from abject poverty in a space of 2 years.
    During the years of Sankara’s administration, things were turning around, especially in the areas of health, education and the environment. Mass vaccination campaigns were rolled out with a level of rapidity and success that was unprecedented for an African country at that time. Infant mortality rates dropped. School attendance rates doubled. Millions of trees were planted in a far-sighted effort to counter deforestation. Feminism was a core element of political ideology, manifested through improved access to education for girls, and inclusion of women in leadership roles.

  32. How did he do it?
    In a speech to the UN General Assembly, Sankara reflected on the state of Burkina Faso at the time that he had come to power, stating that “The diagnosis was clearly sombre. The root of the disease was political. The treatment could only be political.” And Sankara did not hold back with the treatment. As soon as he came into power, he set about razing the conventional structures of power and inequality.
    In one of his most famous speeches, delivered at the summit of the OAU (now the African Union) in Addis Ababa in 1987, Sankara issued a passionate call for a United Front Against Debt. (Cont’d)

  33. “We think that debt has to be seen from the standpoint of its origins. Debt’s origins come from colonialism’s origins. Those who lend us money are those who had colonized us before,” he declared. “Under its current form, that is imperialism-controlled, debt is a cleverly managed re-conquest of Africa, aiming at subjugating its growth and development through foreign rules. Thus, each one of us becomes the financial slave, which is to say a true slave…”

  34. Sankara was able to do this not only because he had political commitment to the proverbial grassroots – as many leaders claim to do – but because, through the choices he made, he positioned himself as their equal. He made personal sacrifices that no other president has ever made, and did not view them as sacrifices, but as an act of solidarity, of African pride. In his view it was only through collective commitment to such sacrifices, which he hoped would one day be viewed as “normal and simple” actions, that Africans could begin to work their way towards self-reliance.

  35. “He who does not feed you can demand nothing of you,” he said. “We however, are being fed every day and every year. We say, ‘Down with imperialism!’ yet we can’t ignore our bellies… Let us consume only what we ourselves control! Many people ask, “Where is imperialism?” Look at your plates when you eat. These imported grains of rice, corn, and millet—that is imperialism. You need look no further.”

    Read more about Thomas Sankara on the website ; thisisafrica.me/
    “Debt is a cleverly managed reconquest of Africa” – Thomas Sankara
    by Paula Akugizibwe

    • This new version of Bo Ndobo is making exciting reading,on outstanding African leaders read also on Jerry Rowling of Ghana and how he used some dictatorship to get Africans to give Ghana exellent results in equally a small period of governance.Democracy just doesn’t work well for most lazy Africans hence the need for use of well managed force.

  36. Finance minister has a record of failure, he was in kaunda era and failed lamentably, justice minister, cader and dull lawyer, agriculture minister ukubwatabwata no action, president standard 4……hey people, we are expecting too much from these people……ZAMBIA TALILUSA KALE IN 2011.

  37. I need to find a way to connect, who knows may be we already know each other, but when you have got repressive systems even the simple idea of talking becomes a threat, bloody shame.

  38. The minister should inform us properly we need proof. When they removed subsidies they were telling us that the govt will be saving from subsidies & have more money for other developmental activities. What the minister is telling us doesn’t make sense, this is the problem of using dead wood as ministers.

  39. First of all: DUH!

    Secondly. We all knew this would happen. The money NOT spent on subsidies should be somewhere. Where is this money that would normally NOT be spent on subsidies? On developmental projects you say? Well what about all those loans that we sign each week?
    Hmm.

    We really need to open our eyes guys. This is our country.

    #OneZambia

  40. Guys whats so difficult to understand here? Money is being saved in the sense that instead of spending the money on subsidies, the money is funding other projects i.e. infrastructure development. It simply means government has more cash in the treasury to spend on things that are much more important and tangible in the long term.

    Play Sim City to understand the basic dynamics of an economy.

  41. Action Man. Why are u deciding to twist the ministers statement & put in ur own words in his mouth ?? The minister`s statement is as clear for a grade one to digest. His said there are no savings being made & if at all the savings existed as you want to imagine in your head the minister word hv been categorical & would hv informed us proudly tht the savings comings from fuel subsides today things hv turned round as such funds r now helping zambia build roads,schools etc

    • Well said gadafie, bt it’s just the break down of what’s initially saved and how much which ministry benefited from the removal of subsidies lot. Finance come on up with financial statements to show them and bwana minister sometimes send PS to comment to avoid top man confusion.

  42. Is it really tenable to hold that old age goes with wisdom? It may be contextual. It appears many variables are at play in this regard. One thing seems to vivid. Look at the gaits of Michael Satelite,Guy Sikota Wina, Alexander Chikwalakwala and Kenneth Kalukanya Kaunda who is Zambia’s colonial advisor. These people are tired both physically and mentally. If you run a Mental State Examination on them, the results will be obvious= “Senile degeneration” characterized by amnesia. How then, do you expect people with amnestic syndrome to govern the country without been ambiquous in both their verbal and non verbal behaviour?

  43. To borrow from the lyrics of darmian marley and nas in the album distant relatives,”hey Mr president,what are you doing for my residents.Mr minister,please dont be sinister!”

  44. All of you posting here and pretending you can’t understand the minister are very worring beings.

    The statement from the minister is self explainatory and requires little knowledge to understand it, if the little is all you have. The Minister is simply saying that there was a reduced allocation to subsidies. The figure used to be 2 million+ ZMW per month and now it is less. meaning, other areas of the economy are getting whatever could have gone to this hand to mouth project that you are all worried about.

    Let’s contribute objectively.

  46. Shocking how some people still have faith in this govt to deliver a strong economy, all they policies are unclear or just not there to drive a positive economy

  47. The removal of subsidies was exellent, only if the saved cash can be put to productive use which am sure the Govt is doing quite well.Minister explain figures to Shem critics.

  48. You people u should understand issues, the money for sudsidies was coming from other projects, so now projects are running properly not money beeing set aside…

  49. Mulongoti apapena watoba 0 pa 100,its you who is confusing yourself.Because ba shikulu ba Chikanda said and i quote:

    “The Minister has also notes that government has to this effect increased expenditure to other areas of developmental projects which he says could have suffered if such funds were still being allocated to subsidies. “

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