The Irish government has this year pledged to give Zambia US$35 million as its financial assistance to the country’s development programmes.

And the Irish government has welcomed the increased allocation of funds and the introduction of other incentives in the agriculture sector in the 2009 national budget.

Irish Ambassador to Zambia, Bill Nolan, said his government will this year give US$35 million to Zambia’s development programmes, particularly in the education, health, tourism, agriculture sectors, governance and HIV/AIDS related programmes.

Mr. Nolan told ZANIS in an interview in Lusaka today that his government has been prompted to increase donor support to Zambia in order to support development in the country’s governance system and make Zambia more viable to respond to corruption issues.

The envoy said that his government was happy with the way the Zambian government was utilizing donor funds.

He said 50 per cent of the funds will go to programmes aimed at improving the education sector in the country.

The envoy has since challenged the Zambian government to prudently use donor funds in order to instill more confidence in the cooperating partners.

He said there was need for the Zambian government to put in place stringent measures to ensure that resources allocated towards economic programmes were prudently and transparently utilised.

And the Irish government has welcomed the increase in the allocation of funds to the agriculture sector and the zero rating of taxes on some agriculture equipment as spelled out in the 2009 budget.

Mr. Nolan said this will help diversify the economy in order to counter effects of the current economic meltdown.

He said it was impressive that the Zambian government has increased funding to the agriculture sector despite the fall in copper prices and the current global economic crunch.

The Irish envoy said improving the agriculture sector would help the country reduce poverty levels and be able to attain the Millennium Development Goals (MDGs) by 2015.

Mr. Nolan has since assured Zambia of his government’s continued support to the country’s economic development programmes.

ZANIS/TK/KSH/ENDS

The international community and other cooperating partners have welcomed the 2009 national budget which was presented by Finance and National Planning Minster Dr. Situmbeko Musokotwane in Parliament today.

European Head of Delegation Derrick Fee described the budget as an opportunity to diversify in many key sectors of the country.

He said the budget is also positive for the country’s economy as it is aimed at addressing key sectors such as health and education which have recorded an increase in budget allocation.

He also noted that the increases in tax on mobile phones will not necessarily affect the communication industry negatively as it is a small reduction.

And the World Bank has welcomed Zambia’s 2009 national budget.

World Bank Country Representative Kapil Kapoor says he is overwhelmed to see that the Zambian government in its 2009 national budget has reflected a number of programmes that would enhance economic development.

Dr. Kapoor told ZANIS in an interview in Lusaka today that the 2009 national budget has touched on a number of development programmes which he said when implemented will harness economic development in the country.

He cited the mining, agriculture, tourism, health, education and construction sectors respectively, as some of the key sectors that needed to be supported in order to enhance economic development in the country.

Kapoor said the World Bank is happy to see that the 2009 national budget was focusing on diversification a move he said will help to address some challenges associated with the global economic and financial crunch.

He further called on the Zambian government to implement the prospects of the 2009 national budget with a view to enhancing economic development in the country.

LOCAL REACTION

And former Finance Minister Ng’andu Magande has welcomed the 2009 national budget.

Mr. Magande said the 2009 national budget was welcome as it was showing signs of economic recovery to the nation.

He said he was happy with the measures that have been proposed by government in the 2009 budget which he said needed to be understood and implemented by the Zambian citizenry if the 2009 budget was to became a reality.

Mr. Magande further said that the 2009 national budget was reflecting the country’s economic recovery as it was massively supporting key sector such as education, health, agriculture and tourism which he said was key to the economic emancipation of the country.

He has since urged farmers in the country to take advantage of the zero-rated agricultural equipment in order to boost the agriculture sector in the country.

And the Zambia Manufacturing Association Chairperson Dave Babbar said this year’s budget is positive as it is aiming at addressing key economical sectors such as agriculture which will help increase food production and poverty reduction.

He said the 2009 budget which is targeted at over 15 trillion kwacha will also help in addressing reduced cost of doing business in the country.

He said reduced cost in doing business will help empower many Zambians thereby further reducing poverty.

And ZRA Commissioner General Criticles Mwansa said this year’s budget has parameters for Zambia’s economic development.

He said the budget will also help many government systems to transform into productive ones.

The ZRA chief said the 2009 budget will also help reduce tax evasion.

He said ZRA will this year find means of curbing tax evasion in order to increase revenue for the country.

He cited the reduction in tax on clear beer as a measure to curb smuggling of imported beer.

Meanwhile, Patriotic Front Spokesperson Given Lubinda has noted that the recruitment of more teachers will help in further reducing the teacher pupil ratio.

He said government should continue allocating more funds to the education sector in order to ensure that the sector plays an active role in enhancing economic development.

Mr Lubinda however said that the government needs to do more in ensuring that the budget is effectively implemented to mean its target such as annual economic growth or 5% as estimated in this year’s budget.

ZANIS/CM/ENDS.

TAXES

Government has increased the Pay As You Earn, PAYE, exempt threshold from K600, 000.00 to K700, 000.00 and provided further relief to workers through adjusted income tax bands.

Finance and National Planning Minister, Situmbeko Musokotwane, said working earning K700, 000.00 monthly income would be exempted from PAYE while those earning K700, 000.00 and K1, 335, 000.00 would contribute 25 per cent of the earning as PAYE.

He further explained that those earning between K1, 335,001 to K4, 100, 000.00 would pay 30 per cent while those above the K4, 100, 000.00 would pay 35 per cent.

Dr Musokotwane said government’s intention to provide further relief to workers was constrained by the prevailing economic environment.

Government has also in the budget proposed an increase in the tax credit for disabled persons from K600,000.00 to K900, 000.00 per year while the exempt portion for terminal benefits has also been increased from K20 million to K25 million.

Dr. Musokotwane said government has also proposed to increase the allowable pension contribution from K135, 000.00 to K155, 000.00 per month.

He also said government has proposed that income equivalent to the annual exempt income under PAYE be exempt from taxation and that the balance be taxed at a rate of 25 per cent.

AGRICULTURAL SECTOR

Government has allocated the agricultural sector, over One trillion Kwacha in this year’s national budget, representing a 37 per cent increase from last year’s K800 billion.

Finance and National Planning Minister, Situmbeko Musokotwane, said the budgetary provision is meant to help promote growth in the sector.

Dr. Musokotwane said government’s focus is to develop the sector in its efforts of diversifying the economy following the poor performance of the mining sector in view of the decline in Copper prices on the international market last year.

He noted a decline in agriculture sector performance with crop production declining to 7 per cent thereby contributing to the contraction of the sector by 4 per cent.

He attributed the poor performance in agriculture to high cost of inputs, poor livestock management and weaknesses in the Fertilizer Support Programme.

He said that limited access to credit, inputs and extension facilities by farmers coupled with the failure to attract adequate private investment in sector negatively impacted on the performance of the overall agriculture sector.

In an effort to revamp growth in the agriculture sector, government has allocated K435 billion towards Fertilizer Support Programme, a measure meant to enhance farmers’ access to inputs in efforts of securing national food security.

Dr. Musokotwane said government expects the number of beneficiaries for the Fertilizer Support Programme to increase once the measure is implemented during the course of this year.

He indicated government’s concern over the limited impact that the programme has had on increasing agricultural productivity.

He added that in view of the concern, government has initiated a comprehensive review of the programme to improve its effectiveness especially in rural areas.

Dr. Musokotwane said K25.4 billion for the procurement of motorbikes and bicycles and an addition K12.3 billion for the construction and rehabilitation of camp houses for extension workers

He further said K70.7 billion is for livestock farming development, the resources which will also be used to create at least One disease-free livestock zone.

He said government is determined to learn from some neighboring countries that have succeeded in the development of vibrant livestock sector.

He also said K42.4 billion has been allocated towards the development of the Nansanga Farm Block in Serenje, which is expected to be a model of agriculture development in Zambia.

He added that K56.5 billion has been allocated for various irrigation projects, the allocation has been made to reduce small-scale farmers dependence on rain-fed agriculture in view of the unpredictable weather patterns

Government has also allocated K100 billion to the Food Reserve Agency, [FRA], for strategic food reserves and an additional K10 billion for the Food Security Pack as part of the measures to mitigate the high cost of food and ensure household food security.

It has also waved tax on imported Two wheel tractors and accessories, tractors up 60 Horse power, ploughs, harrows, disc harrows, planters, seeders, rippers, Sub-Soilers, cultivators and Pump sets. Others are Treadle pumps, hip pumps,Knapb Sack Sprayers and Suction, Delivery and Falt hoses.

The measure, which is meant to promote growth in agriculture, will cost government an estimated K38.9 billion.

HEALTH SECTOR

Government has allocated about K1.8 trillion to the health sector.

The allocation of K1, 823.4 billion, represents 1.4 percent increase from last year’s allocation of K1, 586.6 billion.

Of the allocation, about K208.6 billion had been allocated towards the procurement of essential drugs and medical supplies.

Dr. Situmbeko Musokotwane has allocated K168.1 billion towards the improvement of infrastructure.

Some of the hospitals to be worked on include samfya, Chadza , Mumbwa, Kapiri Mposhi, Isoka, Shangombo Chongwe , Kaputa and Lumfwanyama .

The Minister said about 1970 health personnel would be recruited at a cost of K25.0 billion while K33.2 billion would be spent on procuring media equipment.

About K170 .7 billion has been channeled for the prevention and treatment of HIV/AIDS , K94.9 for the control and management of malaria and K9.6 billion in the fight against tuberculosis.

TOURISM SECTOR

Government has allocated K77.6 billion to the tourism sector in the 2009 National Budget.

Dr. Situmbeko Musokotwane said government hopes the budgetary allocation would help improve performance in the tourism sector.

Dr. Musokotwane said government has allocated K24 billion towards the rehabilitation of the road from Mbala to Kasaba Bay in an effort to improve access to the Northern Tourism Circuit.

Dr. Musokotwane said K11 billion has been allocated towards the construction of a terminal building at Mbala Airport and rehabilitation of the Kasaba Bay airstrip, while another K10 billion has been allocated towards the preparation of an integrated development plan for the Kasaba Bay tourist area.

He said a further K14.7 billion has been allocated towards the electrification of Kasaba Bay.

He said government hopes to attract more than 12 world class hotels to the area, once the planned infrastructural developments are completed.

Dr. Musokotwane said this when he announced the 2009 national budget under a theme ‘Enhancing growth through competitiveness and diversification.’

The minister said K99 billion has been allocated for rehabilitation of the Zimba/Livingstone Road, which when completed would improve access to the tourist capital.

He said K7.5 billion has been allocated towards the proposed development of a new tourism zone in Livingstone that will have necessary infrastructures for investors to readily establish tourism facilities.

Dr Musokotwane said K59.1 billion has been allocated towards rehabilitation of roads in key national parks of which amount, K36.6 billion will be used for the Chipata-Mfuwe road and K24 billion will be used for the Kafue National Park spinal road.

He said in an effort to promote the marketing of the country and a measure of tourism promotion, government proposes to refund certain expenses incurred in shooting movies.

He said government has proposed a 15 per cent rebate of expenses to filmmakers incurred in shooting movies locally

EDUCATION SECTOR

Government has increased the budgetary allocation to 24 per cent towards education and skills development from K2.1 trillion to K2.6 trillion this year.

The increase in the budgetary allocation is in line with government policy of investing in human capital development in an effort to enhance productivity and contribute to the attainment of a vibrant economy.

Dr. Musokotwane said government will use the resources towards improvement of access to education at all levels.

He said K45 billion has been allocated towards the recruitment of 5, 000 teachers this year in government efforts of improving the teacher pupil ratio and the quality of education in the country.

He said K577.9 billion towards infrastructural development in education sector compared to K368.7 billion last year.

He said K423.3 billion of the total amount will be channeled towards the construction odf basic and high schools, providing an additional 2, 500 classrooms.

He also indicated that K42.8 billion has been allocated in this year’s national budget for educational materials that include books and desks.

Dr Musokotwane said K207.9 billion has been allocated to the three public universities, of which K35 billion has be allocated towards infrastructure development.

He said K5 billion has been allocated towards the transformation of Copperbelt Secondary Teacher Training College and Kwame Nkrumah Teacher Training College into a university and an additional K5 billion for the conversion the dilapidated Mulakupikwa Police Training College in Chinsali district into a teacher training college specialising in sciences.

ENERGY SECTOR

And government has allocated K16.8 billion   to ZESCO for the completion   of the rehabilitation works.

Government has further allocated K88.8 billion to the rural electrification so as to expand the national grid and improve access to power in rural areas.

ZANIS/ENDS/SJK/MKM/ENDS

The government has removed windfall tax in order to salvage the mining sector from collapse. However, the government has retained the variable profit tax , which will still capture any windfall gains that may arise in the sector.

Zambia’s mining sector which has seen some companies winding up has been badly affected due to the falling prices of copper and other commodities on the international market.

The global effects on the sector led to government collecting revenue of K319.5 billion last year, representing a 65 percent drop from the targeted K917.3 billion by the end of December 2008.

Finance and national planning minister Dr. Situmbeko Musokotwane said government has also allowed hedging income to be a part of the mining income for tax purposes and increased capital allowance to 100 percent as an investment incentive.

Dr. Musokotwane said’ that measures have been taken after consultations with the industry and other stakeholders and are in line with the impact of the global crisis on the sector.

He said the concession through which government will register a revenue loss of K19.3billion will come into effect from April 1, 2009.

Government has however maintained corperate tax at 30 percent, mineral royalty rate on base metals at 3 percent of gross value, withholding tax on interest , royalties management fees at 15 percent .

Government last year introduced a tax of 25 percent at the copper price of $US 2.50 per pound , 50 percent at price for the next 50 cents and increase in price and $US 75 percent for above $US 3.50 per pound.

These measures were intended to ensure that the nation received a fair return from its resources, while maintaining a globally competitive mining industry.

However the sector despite the challenges recorded a 4.9 percent growth as compared to 3.6 percent recorded for 2007.

Preliminary estimates indicate that copper production increased by 3.7 percent to 569,891 metric tones while Cobalt production increased by 19.5 percent from 4,414 metric tones in 2007 to 5,275 metric tones.

The Minister has further proposed to reduce customs duty on Heavy Oil from 30 to 15 percent and to remove customs duty on copper powder, copper flakes and copper blisters.

He has also proposed to include copper and cobalt concentrates on the import deferment scheme for Value Added Tax (VAT) purposes.

He stated that the measure will reduce the operating costs of mining companies as well as encourage the utilization of local smelting capacity.

ENDS/MKM/PKZANIS