Wednesday, November 13, 2013

Govt has shown political will on constitution, says Bwalya
By Kabanda Chulu and Abel Mboozi
Wed 16 Oct. 2013, 14:01 CAT

THERE is no corresponding improvement in the living conditions of people despite the extraordinary increase in the size of the national budget, says Bweengwa member of parliament Highvie Hamududu.

And Lubansenshi member of parliament, Patrick Mucheleka has advised the government to stick to the budget and not treat the document as a mere piece of paper. Meanwhile, Alliance for Better Zambia president Frank Bwalya says the PF government has shown political will towards the constitution-making process by providing over K44 million towards the exercise.

Bwalya has also commended the government for raising the Pay As You Earn tax exempt threshold to K3,000 from K2,200 last year. Commenting on the K42.68 billion (US$ 8 billion) budget announced last Friday by finance minister Alexander Chikwanda, Hamududu said the government should start addressing challenges of implementation deficit.

"The PF government has doubled the budget amount from what they found, but what is of concern is that there is no corresponding improvement in the living conditions of peopleā€¦ poverty is still high, inequality is widening, education standards are not improving, unemployment rates are still high and death rates are also still high," said Hamududu. "This means that we are not making progress despite the huge amounts that are being spent. So, government should engage public service workers to sign performance contracts like what President Paul Kagame is doing in Rwanda.
This way, we shall create a system that will make everyone perform and it will also help to weed out non-performers. Actually, performance-based approach will produce results since people will apply seriousness to service delivery."

And Mucheleka said the 2014 budget seemed to be an ambitious and good document.

"But given the experience of 2013, where government borrowed beyond what they had projected, we don't know how they will implement most of the programmes contained in the budget document. We know what has necessitated the increase, it is the desire to improve social services, which is a good thing," Mucheleka said. "But how do you fund the budget with 25 per cent borrowing? There is nothing wrong in borrowing if the money is invested in productive sectors but our fear is that this government sometimes borrows without having any ideas on how to spend the money and they have no regard to the budget which they treat as a mere piece of paper."

He advised the government to widen domestic resource mobilisation instead of resorting to borrowing.

"We expected to see measures of broadening the tax base, including the capture of the informal sector and how to maximise revenue collections from the mining sector which engages in tax avoidance," Mucheleka said.

He said Zambia was likely to slide back into the debt trap due to lack of a consistent and transparent debt strategy.

"By his own admission, the finance minister said Zambia's debt stands at US$3.2 billion as at September 30, 2013, and when you add the K10.51 billion which they intend to borrow in 2014, then the debt levels will rise and by the time PF will complete its tenure, we might even exceed the US$7.2 billion debt that was cancelled in 2006," said Mucheleka.

And Bwalya said the government's allocation of money for the constitution making process in the 2014 budget was commendable.

"We are happy that there is a provision for the constitution-making process, although it's clear that the government does seem to favour a referendum to legitimise the entire process as a popular way of adopting the constitution. But the fact that some money, about K44.2 million, has been set aside for the exercise is in itself a good step," he said.

On the PAYE exempt threshold of K3,000, Bwalya said the move would put more money in the few people who were in formal employment.

"Against this background, we urge the government to do more to stimulate the economy,create more meaningful jobs so that more people can feel the impact of this good policy by the PF. Overall, we feel it's a good budget that should be implemented in a pragmatic manner so as to benefit the poor citizens in our nation," he said.

Bwalya noted however, that having a good budget was not enough but what mattered was its effective implementation.

"As the government implements the 2014 budget, it should do so with prudence and financial discipline so that the welfare of our people is uplifted for them to make economic progress," he said.

Bwalya urged the government to stick to the budget next year and avoid unbudgeted for projects and activities at all costs.

"If this is not done, we fear that there will be increased borrowing and we shall even deplete the reserves. We are fearful of that because it's us that will bear the burden of paying back such debts in future," said Bwalya.

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