Maravi

Govt announces proposed budget outline

Govt announces proposed budget outline
By Fridah Zinyama
Friday November 09, 2007 [03:00]

THE government has announced a proposed budget outline of about K41.2 trillion over the next three years, running from 2008 to 2010. According to the 2008-2010 Medium Term Expenditure Framework (MTEF) released by finance minister Ng’andu Magande yesterday at Intercontinental Hotel, the government has committed about K12.7 trillion to next year’s budget and the remaining K28.5 trillion for 2009 (K13.7 trillion) and 2010 (K14.8 trillion) respectively.

Next year’s budget reveals a deficit of about K954 billion which government will have to fill from both domestic and donor sources.

According to the Ministry of Finance director of budgeting Danies Chisenda, about K618 billion would be locally sourced while the remaining K336 billion would be obtained from grants from the donor community.

“Of the K12.7 trillion, K10.5 trillion is supposed to be domestically financed while K2.1 trillion is foreign financed,” the MTEF green paper stated.

The government has further projected to achieve a real Gross Domestic Product (GDP) of at least 7 per cent a year, and to bring down inflation to less than 5 per cent by 2009.

“Domestic revenues are projected at 18.13 per cent of GDP in 2008, tax revenues projected at 17.37 per cent of GDP in 2008 and VAT at 5.17 per cent of GDP in 2008,” the green paper stated.

“Excise taxes are projected at 2.41 per cent of GDP in 2008 and customs duty is projected at 1.84 per cent of GDP in 2008.”

In addition, the green paper states that the government anticipates recruiting 4,000 teachers, at a cost of (K51 billion), 3,000 medical staff (K24.75 billion), 20 magistrates (K2.3 billion) and some extension officers.

It said the government expected to raise K9.3 trillion from taxes next year, K10.4 trillion in 2009 and K11.5 trillion, accounting for a lion’s share of anticipated domestic revenue.

Reflecting the traditional reliance on taxation as the main sources of government revenue, government expects non-tax income to be K391.9 billion next year, K430.7 billion for 2009 and K467.21 billion for 2010.
Stakeholders have however been calling on the government to review the mineral royalties as a way of increasing its revenue base domestically.

With copper prices at their highest on the international market, stakeholders have called on the government to seriously consider taxing the mining sector more in order to increase its revenue base and not insist on getting the majority of its revenue from individual tax payers.
The green paper anticipates revenues and grants to be K11.7 trillion next year, increasing to 12.8 trillion and 13.6 trillion for 2009 and 2010 respectively.
“And government has allocated about K48.15 billion to cater for presidential affairs for both local and foreign meetings,” the green paper stated.

Magande said it was government’s intention to dismantle most of its domestic debt by allocating about K53 billion for next year, K20 billion for 2009 and another K20 billion for 2010 to pay retrenched and retired public servants due to restructuring.

“Part of the debt government is trying to dismantle comes from arrears it owes to suppliers of goods and services of about K351 billion for next year and K101 billion for 2009,” the green paper stated. “And government has allocated about K269 billion for arrears for retirements projected to be paid off in full by 2009.”
And the government has allocated about K150 billion for the Fertiliser Support Programme for next year and the same amount for each of the two subsequent years.

For the 2007/8 farming season only about 157,000 farmers are expected to benefit from inputs that will be obtained using these funds. This is a reduction from last year’s 210,000 farmers who benefited from the FSP.

The government has maintained that it cannot continue giving the same number of farmers inputs because the intention is to have the small-scale farmers who are the targets of these funds graduate to medium farmers so that others can also benefit.

“On the other hand, the government has allocated about K80 billion for the Food Strategic Reserve (FSR) aimed at building sustainable strategic national food reserves. This exact amount has been allocated for the next two subsequent years,” the green paper stated.
Further allocations for interest on treasury bills and bonds have been made of K650 billion, K703 billion and K693 billion for domestic debt interest covering the period 2008 to 2010.

External debt interest for foreign debt stands at K40.86 billion for next year and, K35.48 billion and K30.34 billion for 2009 and 2010.
And the government has allocated a further K159 billion for next year and K318 billion and for 2009 for the new constitution review roadmap.

“As Zambia will be hosting the All-Africa games, the government has allocated K34.31 billion for next year and K157.9 billion and K137.9 billion for 2009 and 2010 to cater for infrastructure development,” the green paper indicated.

In summary, the government has allocated about 33 per cent of next year’s budget to the general public services, 19 per cent to economic affairs, 15 per cent to education, 11 per cent to health while the rest goes to other sectors.

Labels: 2008 BUDGET

posted by MrK @ 6:23 AM