Maravi

Magande urges govt to cut expenditure in 2010 budget

Magande urges govt to cut expenditure in 2010 budget
Written by Kabanda Chulu
Thursday, October 08, 2009 4:51:23 PM

FORMER finance minister Ng’andu Magande yesterday said all Zambians will only benefit from the 2010 budget if the government cuts expenditure on personal emoluments from the current 50 per cent allocation and invests the money in capital projects.

And financial market expert Miles Sampa has challenged finance minister Dr Situmbeko Musokotwane to cast his net wider and diversify the revenue base so that the burden borne by the formal sector in paying many taxes is spread out.

Meanwhile, economic analyst Robert Sichinga has said there is need to ensure cost effectiveness in spending for resources allocated for projects in the country.

In an interview ahead of the 2010 budget expected to be announced by Dr Musokotwane tomorrow, Magande said the government should reduce its expenditure patterns and come up with specific measures to generate revenue that will not affect people’s livelihoods in view of the global finance and economic crisis.

“Let me put it this way, the unions have not started negotiations and yet this is a very contentious issue that needs to be resolved before budget is announced. Even the President [Rupiah Banda] expressed concern earlier this year because the almost 50 per cent allocations for personal emoluments is a matter that should be resolved so that money is taken to capital projects like roads that benefits all people,” said Magande. “In view of the global crisis, there is need to have specific measures to generate revenue that will not affect people’s lives and emphasis should be placed on completion of existing projects and not to start new ones.”

And Sampa said the 2010 budget must be pro-business by having incentives that would make the cost of doing business affordable in Zambia.

“We want government through this budget to diversify its revenue base and not just focusing on taxing the formal sector, the finance minister should cast his net wider and we want to see measures that will reduce the cost of doing business like reduction in higher interest rates,” Sampa said. “Government should also reduce its domestic borrowing since these are some of the factors that push interest rates and crowd out the private sector from borrowing.”

He said the disbursements of the Citizen Economic Empowerment Commission (CEEC) funds should be broadened and tangible for results to be seen in the development of the economy.

“In other regional countries, it is clear for everyone to see how economic empowerment funds are having a huge impact on people’s lives and this budget should put in place measures to address these issues,” said Sampa.

Zambia National Farmers Union (ZNFU) executive director Ndambo Ndambo said the government should allocate more incentives to the agriculture sector since it has a direct bearing on food security and job creation.

“Government should reduce its expenditure line so that we can attain the Maputo declaration of allocating 10 per cent of the budget to agriculture. In this budget, we looking for tax incentives like zero rating agro-equipment especially on VAT because when this system was in place before 2005, we recorded positive results,” said Ndambo.

Meanwhile, Sichinga said ordinary people normally see development in fixed assets hence the need to allocate resources for project completion and move forward.

“Usually the advice given before budget presentation falls on deaf ears but we look forward to see improved efficiency in project implementation and this will be “said Sichinga. “Let’s fund major projects, complete them and move forward since ordinary people see development in fixed assets like roads, bridges hence the need to balance recurrent and capital expenditure.”

Labels: BUDGET, CEEC, MAGANDE, MILES SAMPA, NDAMBO NDAMBO, ROBERT SICHINGA, SITUMBEKO MUSOKOTWANE, ZNFU

posted by MrK @ 3:52 PM