Monday, December 30, 2013

Chilufya calls for more effort in diversifying agriculture
By Abel Mboozi

Tue 05 Nov. 2013, 14:00 CAT

THE government should stick to planned activities and avoid unwarranted expenses if it to meet the 6.6 per cent budget deficit target in 2014, says UPND Bweengwa member of parliament Highvie Hamududu.

Hamududu who chaired the committee on estimates said the unprecedented 8.5 deficit of the Gross Domestic Product for this fiscal year was unacceptable and was mainly caused because of high unplanned for expenditure.

Hamududu said fiscal indiscipline by the government should be stopped because it entailed that the state spent more than it planned.

"If government continues implementing unplanned for policies and projects, then Zambia will continue having budget deficits and we might not achieve the target of reducing it to 6.6 per cent next year. The government should learn from this year's experience and correct things," Hamududu said.

He cited the funding to unbudgeted for new districts as well as the establishment of new universities that had contributed to the high budget deficit for this year.

"The frequent changes of PSs, where they are appointed and removed, these officers go away with benefits. The recalling of officers in foreign service as well their replacements too is another costly venture as there is repatriation expenses involved," he said.

"Ideally, before such measures are undertaken, government is supposed to budget for them, but this was not the case. The government should at all times consider the budget implication whenever it wishes to undertake such measures."

He said the creation of new districts should have been a well planned exercise that should have been undertaken in phases.

"Instead, these districts were announced, and DCs appointed and that was not planned for in the 2013 national budget and so, the key point is that we are telling the government to plan for unplanned expenditures by factoring them into the national budget," he said.

Hamududu said any new project the government wished to undertake should be slotted in the national budget.

On external debt, Hamududu said the rise in the debt stock was extremely worrying and if not checked, it could plunge Zambia into another foreign debt trap.

"The foreign debt currently stands at U$3. 1 billion which is unprecedented because when there was a debt write-off in 2005, it was way below U$1 billion, but within a period of seven years it has risen so high and our fear is that we could fall into another debt trap," he said.

Hamududu said even if the debt at the moment was still sustainable looking at the size of the economy, at the rate the debt was increasing was worrisome; more so that there were indications by the state to borrow another U$2 billion.

"This therefore means that by end of next year, our foreign debt could stand at U$5 billion plus which is not correct," he said.

And Hamududu said many stakeholders that appeared before his committee, including finance minister Alexander Chikwanda expressed concern that Zambia was not reaping much from its mineral wealth.

"In fact, Mr Chikwanda himself said Zambia was getting about five per cent in form of revenues from the mines when in SADC generally, the mines contributed about 11 per cent and so, we are quite below what mining houses in the region are contributing," said Hamududu.

"Clearly we are way below examples in the region. Other mine houses in the SADC region pay more and so Zambia is under taxing the mines.

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