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Next year's budget will expose 'the reality' - Nonde

Next year's budget will expose 'the reality' - Nonde
By Fridah Zinyama and Mutuna Chanda
Wednesday November 14, 2007 [03:00]

FEDERATION of Free Trade Unions of Zambia president Joyce Nonde has said next year's national budget will expose the reality of the much talked about growth in the Zambian economy. And Economics Association of Zambia (EAZ) committee member Bob Liebenthal has said the government needs to be commended for coming up with the Medium Term Expenditure Framework (MTEF) as it gives stakeholders a clear picture of what it intends to accomplish.

In an interview on the proposed 2008 budget and the Medium term Expenditure Framework (MTEF) for 2008 to 2010 which was launched by finance minister Ng’andu Magande last week, Nonde said what was being awaited was the truth on how much the government had done on the issues that they had committed themselves to, such as broadening the tax base and renegotiating the development agreements so as to increase revenue from mineral royalties.

“What we are expecting is for the government to tell us that they have broadened the tax base across many sectors so that there is relief on workers’ taxes. They have been talking about broadening the tax base and we want to see that in the 2008 budget,” Nonde said.

“We also expect them to announce by the time the budget is presented next year that the renegotiation of development agreements has been concluded so that we know how much is going to be committed to development resulting from that. There have been a lot of tax holidays mainly on foreign investors.

“If there is nothing on broadening the tax base and increasing mineral royalties then there would be nothing for the workers because we would not expect anything.”

She also said if the government continued borrowing huge sums of money to finance its activities, then the growth of the economy would be questioned.

“There is a lot of talk on the economy doing well but for whom? We should see the doing well of the economy reflecting in the reduction of problems for workers. If we are growing and our income as a country is increasing we must see a reduction in borrowing,” Nonde said.

In a separate interview, Liebenthal said there was need for the government to ensure that it puts measures in place to implement the good plans it had come up with.

Liebenthal said the Green Paper was a very welcome gesture by government as it gave stakeholders enough information and time to react to what the government was trying to do.

“Another thing to commend government about is that the Green Paper is being done in a three-year period. Other countries have been doing this for a long time now and it helps stakeholders to know what government is doing and allows the stakeholders adequately,” he said.

Liebenthal said the government had given priority to important sectors that dealt with uplifting the lives of people.

He added that on the macroeconomic level, the government’s targets were realistic as it was aiming for 7 per cent real Gross Domestic Product (GDP) growth.

Liebenthal said if government could control other factors like the exchange rate, the prices of food and fuel, the five per cent inflation target was achievable.

“And government’s intention to limit borrowing to one per cent of GDP is rather conservative,” he said. “However, it should be commended as there is no reason to continue borrowing if plans are not being well implemented.”

Meanwhile, Liebenthal observed that the government had been doing a terrible job in implementing most of the strategic programmes that it had been putting in place.

“Implementation is the most important of the part of the strategic plans that the government comes up,” he noted.

“If implementation is poorly done, then the strategic plans just end up being academic papers and of no use to anybody. And government should also try and indicate how they have spent the funds that they managed to raise. The paper doesn’t indicate anything on how money was spent.”

Meanwhile, Secretary to the Treasury Evans Chibiliti has urged the controlling officers to ensure that they implement the strategic programmes that government comes up with.

“The biggest problem that we have at the moment is implementation of these programmes,” Chibiliti said.
“Once we iron out these areas, we will be heading in the right direction.”

Labels: JOYCE NONDE, MTEF

posted by MrK @ 4:07 AM