World Bank Country Representative, Kapil Kapoor, says he is happy with the the 2010 national budget presented yesterday afternoon to Parliament by Finance Minister, Situmbeko Musokotwane.

Mr Kapoor told ZANIS in an interview in Lusaka that the 2010 budget was impressive.

He added that the change in the financial cycle of the budget would reduce the pressure of putting the budget into effect.

Mr Kapoor, however, said he is worried with the decline in revenue as indicated in the 2010 national budget.

He urged government to increase the national budgetary allocation of different sectors, saying it is difficult to run a nation with such financial constraints.[quote]

Mr Kapoor said it is worrying to note that 50 per cent of the budgetary allocation goes to salaries and personal emoluments.

He explained that at the end of the day there is not so much left for developmental issues issues.

Mr Kapoor also observed that the increase in the cost of petroleum products will result in the increase of transportation of major agricultural products.

And Bank of Zambia (BoZ) governor, Caleb Fundanga, has welcomed the 2010 national budget, adding that Zambia performed well in 2009 despite the global economic crunch down.

Dr Fundanga says government’s efforts should be commended for projecting a 4.1 per cent economic growth for next year.

Dr Fundanga said in an interview with ZANIS shortly after the budget was presented that government needs to maintain the good policies despite passing through difficult economic conditions.

And former Finance and National Planning Minister, Ngandu Magande, said Zambia requires to sit down with its cooperating partners to mend the economic gaps arising from deficits mainly through exports.

Mr Magande explained that there is need to address the down-fall of revenue targets and diversify from copper, noting that the mining of copper is Zambia’s main export for its Gross Domestic Product (GDP).

He further welcomed the budget change cycle, saying he proposed it when he was a Cabinet Minister because Zambia needed to offset the huge debt Zambia had experienced.

Mr Magande, however, commended his predecessor for achieving $1.8 billion national reserves and quickly admitted that it was difficult to score it during his six-year tenure of office.

ZANIS

Government says it expects the agriculture sector to grow by 5.2 percent in 2010 compared to the 1.9 percent in 2009 following the bumper harvest in maize this year.

Finance and National Planning Minster, Stumbeko Musokotwane, said the maize production rose from 1.5 million metric tones to 1.9 million metric tonnes the country the biggest the country has recorded in the last ten years.

Dr. Musokotwane said this in Parliament today during the presentation of the 2010 national budget adding that government views the improved performance of the agriculture and the livestock as the most powerful tool to reduce poverty and stem the rural-urban divide.

Government has increased the allocation to agriculture and livestock sector from K1, 096 trillion in 2009 to K1, 139 trillion in the 2010 national budget.

The minister told parliament that the creation of the newly created Livestock and Fisheries ministry will ensure that the sector receives focused attention.

He added that its potential will be supported by targeted intervention aimed at controlling animal disease and improve veterinary services.

Dr. Musokotwane said through this intervention the sector will become the next priority sector to contribute to the national GDP after cooper.

He said government will continue with the create of disease free zones (D.F.Z)throughout the country to facilitate livestock exports.

He has announced that government has allocated K430 billion to the revised Farmers Input Support Programme (FISP), K100 billion to the Food Reserve Agency (FRA) and another K10 billion towards Food Security Packs.

He added that government will complete the remaining works on the Nansanga farming block in Serenje and has since allocated about K 40 billion to step up development of the block.

Dr. Musokotwane has also disclosed that government wills also commence similar infrastructure development in Luena Farms block in Kawambwa district where they will be growing sugar.

He further said that government will this year continue rehabilitating grain silos across the country to improve grain storage and protection.

ZANIS

Government says increased the allocation to the education sector to K3.320.9 billion representing a 26.4 percent increase.

Announcing the increase in Parliament today, Finance and National Planning minister Situmbeko Musokotwane said this is because government places much importance on education to make it the second largest sector of priority in the 2010 national budget.

He said, during the presentation of the 2010 national budget in parliament today, that government has since devoted substantial resources to the sector in order to raise the standards of education and provides better opportunities to the children.

He revealed to parliament that the country is on course of achieving the Millennium development Goals (MDG) on achieving universal access to primary education by 2015.

He has attributed this to the critical role communities’ schools and the private sector has played in increasing access to education for all.

Dr. Musokotwane has further disclosed that K 215.2 billion from 2009 budget has been used to complete 12 basic schools across the country while 2,500 classrooms for basic schools which were planned last year will be completed early next year.

He said an addition of 20 high schools are in their advance stages around the country and will be completed soon.

He added that government has allocated K553.5 billion for the construction of an additional 2,900 classrooms to provide school places for over 250,000 students across the country.

The Minister said K 21.4 billion has been allocated towards the procurement of books, desks, and other educational materials.

He further said government has allocated the three public universities with 317.9 billion for operations, infrastructure development and bursaries for students.

ZANIS

Government has unveiled a K 16.7 trillion (about US$3.55 billion) budget for the year 2010 as compared to the approved budget of K 15.27 trillion for this year.

Presenting the budget to parliament today, Minister of Finance and National Planning, Situmbeko Musokotwane disclosed that government would constrain lower priority expenditures but direct more resources to programmes aimed at stimulating growth and diversifying the economy.

Dr. Musokotwane said government’s economic agenda for 2010 and beyond would be to overcome the current recession and restore growth back to the pre-global economic crisis trend levels.

He said macroeconomic policies will in 2010 continue to focus on consolidating the recovery of the domestic economic base and protecting key social expenditures in the education and health sectors.

“This will be done by continuing with our economic diversification programme, thereby laying a solid foundation for higher sustainable growth and building resilience to external shocks,” he said.

He said out of the K16.7 trillion 2010 national budget, K12.1 trillion will be raised through domestic revenue collection, representing 72.4 per cent of the budget.

He added that K2.42 trillion, which is 14.5 per cent of the national budget, would be raised from grants from Zambia’s cooperating partners while the balance of K2.18 trillion or 13.1 per cent will be financed through domestic borrowing.

Government will borrow K1.48 trillion from domestic sources and K697.1 billion from foreign financial institutions.

Dr. Musokotwane told parliament that the general public services will consume the largest share of the 2010 national budget at 32.1 per cent.

“This is slightly higher than the 31.8 per cent share in 2009, as a result of the need to finance certain key expenditures such as voter and national registration at a cost of K 128.5 billion, the national census at a cost of K97.6 billion, and the constitution making process at K50 billion,” he explained.

He added that these programmes will collectively consume 1.7 per cent of the 2010 budget.

The presentation of national budget in advance of the financial year follows a change in the budget cycle after a constitutional amendment.

This will ensure that the budget is implemented over a full one year as opposed to previous years when the budget for a particular year was presented in March of the financial year.

And Dr. Musokotwane has proposed that the Pay As You Earn (PAYE) threshold should increase from K700,000 to K800,000 per month while the tax bands have remained unchanged.

“This means that those earning below K 800, 000 per month will be exempt from this tax. This measure will return K 85.0 billion to pockets of our workers,” he said.

He said the tax credit to the differently-abled persons has been increased from this year’s K 900, 000 to K1, 560,000 per annum, adding that this will result in minimum revenue loss.

These measures will be effected in April 2010.

Meanwhile, Dr. Musokotwane has expressed optimism that Zambia’s economic growth for this year has been projected at 4.3 per cent, which is a downward revision from the 5 per cent he announced in his 2009 budget address.

He said although the country suffered adverse effects of the 2008/2009 global economic crisis, the country will achieve and exceed the 5 per cent economic growth if the economic conditions continue to improve in the final quarter of 2009.

The minister said government’s macroeconomic objectives in 2010 are to exceed 5 per cent economic growth and reduce end-year inflation to 8 per cent.

He said government will limit domestic borrowing to 2.0 per cent.

Dr. Musokotwane has since called on Zambians to continue working hard in order to economically prosper the country.

“It is imperative that we do not lose the ground that we have gained. It is therefore essential that we continue to pursue business friendly macroeconomic policies in order to strengthen and sustain the investor confidence needed for economic growth and job creation,” he stressed.

ZANIS