(BUSINESS DAILY AFRICA KE) Sun setting on British empire?
Opinion and Analysis
By John Kamau
Posted Wednesday, April 10 2013 at 18:04
Three noteworthy events occurred this week — the death of Margaret Thatcher, the swearing-in of Uhuru Kenyatta as Kenya’s fourth president, and the departure of Mwai Kibaki from office.
If we have to remember Mrs Thatcher, it is because of the way she sustained the Kanu government, turned a blind eye to former President Moi’s dictatorship and kept pumping money into the bottomless pit that was his government as budgetary support.
But we have to understand that the relationship between Thatcher and Moi was of two hard-driving hard-headed characters who had assumed office months apart.
While Thatcher had been sworn into office in May 1979 Mr Moi was first sworn into office on October 14, 1978 — two green-horns in power seven months apart.
Interestingly, Thatcher invited Moi as the first head of state to visit the UK during her reign with Moi arriving at No 10 Downing Street on June 12, 1979. His only other State Visit being Ethiopia in January, 1979.
From then on, Thatcher made the mistake of oiling the wheels of Moi’s dictatorship and it was not until her fall in 1990 that Kenyans were able to push for sensible reforms in the country.
In all that, the British economic interests outweighed Kenya’s desire for change. So close were Moi and Thatcher that when Moi University was built in Eldoret in 1984, the library, with a sitting capacity of 2,500 readers, was named the Margaret Thatcher Library.
Moi also allowed Thatcher to have Kenya as a training ground for troops destined to defend the Falkland Islands in a pact that still brings in 10,000 troops. For all that, Thatcher will always have a place in our history.
The entry of Kibaki in 2002 was unanticipated by British top echelons who had given tacit support to Moi’s candidate Uhuru Kenyatta hoping that there would be no change of policy that would affect their geo-political and economic interests.
But months before Moi left, he had been irked by the British and called British High Commissioner, Sir Jeffrey James a “meddler” when he went to bid him bye.
Sir James’ replacement, Edward Clay, turned as combative as his predecessor with the Kibaki government cancelling British tenders and turning East for development support.
In a radical twist, the government unbanned Mau Mau and unveiled Dedan Kimathi’s monument still regarded in Westminister as a terrorist. And that explains the “they are vomiting on our shoes” remark by Mr Clay.
Mr Kibaki has left State House without paying a State visit to the UK despite being invited. His handlers said he was busy. And that shows that despite the diplomatic speak of cordial relationship with the UK London’s influence on Kenya is on the wane.
The numbers tell the story with UK aid to Kenya on the decline. Since 1997 — when the Tories lost power — the UK’s expenditure on Kenya has been cut by more than 50 per cent from a high of 2.8 per cent of the entire UK DFID bilateral programme.
“With our recent direct experience of fraud in the Ministry of Education, we will make limited use of Government systems to distribute aid, but…the 2012 elections could be a major watershed for governance in Kenya, and we will review our aid delivery instruments again after that,” says a DFID strategy document.
And that is where Mr Kenyatta’s relationship with UK will start. How things change!
Mr Kamau is the Associate Editor, Business Daily. Email: jkamau@ke.nationmedia.com
Labels: 2011 BUDGET, ELECTIONS, KENYA, MARGARET THATCHER, UHURU KENYATTA
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Biti vows to probe empowerment deals
14/02/2013 00:00:00
by Gilbert Nyambabvu
FINANCE Minister Tendai Biti has vowed to investigate indigenisation agreements reached with various foreign companies amid concern over revelations that a single Harare advisory firm has handled the most lucrative of the deals reached to date.
Brainworks Capital provided advisory servcies on the US$750 million Zimplats indigenisation transaction with a local daily claiming that the consultancy firm could pocket up to US$45 million from that deal alone.
An evidently thrilled George Manyere, the company’s managing partner, said of the Zimplats deal: “This transaction is a further milestone in our quest to building an even stronger advisory business in Zimbabwe and we believe that our specialist advisory services will continue to grow this year.”
And grow they have, with the company revealing in January that it had handled compliance arrangements for Mimosa and Unki platinum mines, gold producer Caledonia Mining as well as cement producer Pretoria Portland Cement.
However, the Daily News claimed Thursday that Brainworks was handed the consultancy contracts without going to tender
But Empowerment Minister Saviour Kaskuwere dismissed the allegations on Twitter, quipping: “Wolves are at the door; nothing to lose sleep over. We forge ahead with our empowerment”
Meanwhile, Biti told a business meeting in Victoria Falls that agreements reached with Implats, Aquarius and Amplats would be scrutinised to ensure they do not “cost the country money”.
According to Bloomberg, Biti said some of the agreements may have to be referred to Parliament for approval.
Zimbabwe’s indigenisation laws require foreign companies to transfer at least 51 percent of their Zimbabwe operations to locals.
In addition to the equity handovers, the companies have also been compelled to donate up to US$20 million to so-called community share schemes.
The programme has however, divided the country’s coalition government with President Robert Mugabe and his Zanu PF party insisting it was necessary to economically empower historically marginalised blacks.
The MDC-T says while economic empowerment was needed, the approach taken by Zanu PF benefits the wealthy elite and does little to solve the country’s employment crisis in addition to scaring away much-needed foreign investment.
Bickering over the policy has escalated lately as parties campaign for elections later this year and, with some analysts suggesting the programme is a potential vote-winner for Mugabe and Zanu PF, the MDC-T has sharpened its attacks.
Biti recently claimed that the community share ownership schemes were potentially illegal adding the foreign firms were, in fact, using them to bribe their way out of compliance with the law.
“There is nowhere in the Indigenisation act that compels companies to donate money to a community share scheme or to any farm or to anything so what you are actually seeing is coercion; companies being forced to part up with US$10 or US$15 million,” the MDC-T secretary general said last month.
“(And) to the extent that there is no company in Zimbabwe that I know of which has actually parted with 51% of its shareholding , you are having the anomalous situation where companies are bribing themselves out of compliance with the act by paying a mere US$ 10 million, US$5 million, whatever is the amount of the community share scheme.”
The claim was however, rejected by Kasukuwere advisor and Zanu PF spokesperson Psychology Maziwisa who accused Biti of “stupid politicking” ahead of the new elections.
He charged: “Just because the law is silent about community share ownership trusts doesn’t per se render the schemes unlawful.
“The Indigenisation Act contemplates broad-based empowerment and community share ownership schemes are a means of achieving that. In ordinary life, one would expect a person of (Finance Minister, Tendai) Biti’s background to understand this very simple legal fact but quite evidently, he doesn’t.
“The programme has helped take the poorest of our people out of abject poverty and given them a once-in-a-lifetime opportunity to make something out of their lives. In the process, thousands of jobs have been created.
"We need jobs in this country and community share schemes have gone a long way in addressing this situation.”
Labels: 2011 BUDGET, BRAINWORKS CAPITAL, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), NEOLIBERALISM, SAVIOUR KASUKUWERE, TENDAI BITI
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Government to ease the tax burden on personal income taxpayers-Musokotwane
TIME PUBLISHED - Friday, July 22, 2011, 4:18 am
GOVERNMENT will undertake a comprehensive reform on tax policy to ease the tax burden on personal income taxpayers. Currently, the first K800, 000 is exempt from Pay-As-You-Earn (PAYE).
Minister of Finance and National Planning Situmbeko Musokotwane assured the International Monetary Fund (IMF) that the 2011 fiscal policy will focus on creating space to facilitate spending on infrastructure and the social sector. Dr Musokotwane said this in a Letter of Intent to the IMF dated June 3, 2011.
He said Government will continue to improve the performance of revenues by drawing on technical assistance from the co-operating partners and also conclude the auditing of the mining sector.
“In the medium term, the focus will remain on undertaking a comprehensive reform of the tax policy and administration to improve the performance of customs and excise taxes, to ease the revenue burden on personal income taxpayers,” he said.
Dr Musokotwane said domestic revenues are projected at 19.3 percent of gross domestic product (GDP) on account of strong economic growth and improved metal prices.
He said macroeconomic objectives in 2011 are to sustain the high levels of growth in the economy, lower inflation and strengthen the economy against external shocks by building up gross international reserves.
He said the increase in revenue will be driven by growth in income taxes, from 9.4 percent in 2010 to 10.1 percent of GDP on account of collections of mining taxes, including tax arrears.
Real GDP growth in 2011 has been revised upwards to 6.8 percent from an earlier projection of 6.4 percent driven by the mining, construction and transport, storage and communication sectors.
He said inflation is projected to close the year at seven percent while gross international reserves are projected to rise to at least US$2.4 billion, or 3.4 months of prospective imports.
He pointed out that recent development in both the global and domestic economy present downside risks.
“If oil prices remain high or continue rising, this has the potential to drive up inflationary pressures in oil importing countries and slow global growth.
On the domestic front, the recovery in private sector credit, from the sharp contraction during the global financial crisis, needs to remain consistent with underlying demand in the economy to avoid fuelling inflationary pressures,” he said.
Dr Musokotwane said expenditures are projected at 24.1 percent of GDP with 3.4 percent financed using foreign grants and loans.
He said wages will decline slightly to 7.9 percent of GDP from 8.1 percent while domestically financed expenditures or the social sectors and infrastructure development in the transport sector will increase to 50 percent of the budget compared to 35.7 percent in 2010.
He said the budget outlay for maize purchases will be K653 billion, a reduction of 46 percent in 2011 (about 0.6 percent of GDP) compared to 2010.
The overall fiscal deficit (including grants) has been projected to decrease to 2.9 percent of GDP from 3.1 percent recorded in 2010.
Dr Musokotwane said domestic financing will be limited at 1.3 percent of GDP, which is 1.5 percentage points below the outturn in 2010.
And Government intends to issue its sovereign bond in the second half of this year.
Dr Musokotwane said the bond issue will be used on infrastructure development, in particular roads and power projects.
“In this context, the government will carefully consider maturity and exchange rate risks, and the debt sustainability and cashflow implications,” he said.
Zambia was in March this year assigned a sovereign credit rating of B+ by Fitch and Standard and Poor’s Ratings.
Dr Musokotwane said Government intends to take appropriate measures for a successful bond issue, which include the procurement of legal and financial advisors, the use of collective action clauses and will consider phased issuance.
[Zambia Daily Mail]
Labels: 2011 BUDGET, NEOLIBERALISM, SITUMBEKO MUSOKOTWANE
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Ndalamei bemoans reduced funding
By Joseph Mwenda
Thu 11 Nov. 2010, 04:01 CAT
REDUCED donor funding to the national budget has negatively impacted the housing infrastructure development, Secretary to the Treasury Likolo Ndalamei has observed.
Speaking when he launched the affordable housing and development conference at Lusaka’s Southern Sun Hotel yesterday, Ndalamei said the national budget was overstretched, making it difficult to adequately cover the development of housing infrastructure.
“The budget is overstretched because of the reduction in the external support from cooperating partners, owing to the economic downturn as well as non adherence to some donor conditions by the government,” he said.
Ndalamei said in order to bridge the financing gap, government tried to rationalise
its operational expenditures to free resources for development projects.
“Some of the measures included cutting down on purchase of consumables, limiting capacity building to essential staff and rationalising the use of transport,” Ndalamei said.
He urged financial institutions to pursue the financing of housing infrastructure through the Public Private Partnership (PPP) projects.
“There has been a huge housing deficit in Zambia. Effectively no new formal accommodation has been built for over a decade, and the rapidly urbanising population further adds to the housing need in the country,” he said.
Ndalamei further observed that poor land administration at the Ministry of Lands was also affecting the housing infrastructure development.
“The constraints include, inadequate funding, poor land management and very poor engineering service reticulation. It is hoped that through this conference, government can find a solution to the housing and associated infrastructure deficit,” said Ndalamei.
And finance deputy minister Chileshe Kapwepwe urged financial institutions to reduce lending rates and provide innovative funding products that could be accessed by people of all incomes.
Labels: 2011 BUDGET, CHILESHE KAW, LIKOLO NDALAMEI
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Rupiah vows to continue campaigning as presidential candidate for 2011
By Salim Dawood in Lusaka and Mwala Kalaluka in Mpulungu
Sat 23 Oct. 2010, 04:20 CAT
PRESIDENT Rupiah Banda has vowed to continue campaigning as presidential candidate for the 2011 general elections despite the ruling MMD not having endorsed him as the party’s sole candidate. And President Banda has said he can knock down anyone who writes newspaper articles portraying him as a weakling if such a person availed themselves before him.
Speaking at a public rally at Mwembeshi Basic School on Wednesday afternoon to drum up support for MMD parliamentary candidate, Keith Mukata, in the forthcoming Chilanga by-election, President Banda said he wanted to see peaceful campaigns as opposed to campaigns of hatred, insults and lies.
“In 2011, I think you have heard, my party is indicating that they want me to stand. I have raised my hands and said yes, I accept! I will stand and I will campaign, I will beg all Zambians and I am sure they will give it to me,” he said.
President Banda expressed hope that Zambians would vote for him next year because they voted for him when they did not know him in 2008.
“They gave it to me when they didn’t know me, when they didn’t know my work, when I had not built any road, hospitals, no roads, no health centre but still the people of Zambia gave me the presidency. And now that they know just next to me here where we are standing a brand new secondary school is coming up for the benefit of the people here.”
President Banda, whose address was largely centred on his personal campaign and attacks on Patriotic Front leader (PF) Michael Sata said he was experienced in capsizing the boat (PF symbol) because he had capsized it before.
He said one did not have to form pacts to be a president because if the people did not choose a person, he would never be president.
President Banda said while the UPND and PF had formed a pact, his pact was with the people of Zambia and that with them, he was assured he would scoop the 2011 general elections.
“We are going to campaign and you can see we are strong, they are telling stories that…some of you who have never seen me, when you just read in the newspaper, particularly those newspapers that try to portray me as some weakling; ‘nine weakling neo olo niwamene uja olemba mu newspaper’, (Who is a weakling between me and the same person who writes in the newspaper)? I can knock him down if he came straight to me,” President Banda said, provoking applause and cheers from MMD cadres.
President Banda said he was thankful to God that he was still able to stand, walk and campaign and be welcomed the way he had been welcomed at Mwembeshi Basic School.
He said some of the projects that he was now completing were begun by late president Levy Mwanawasa, who belonged to the same party - MMD.
President Banda said there were projects that stayed uncompleted for the last 20 years but were only being completed in his tenure of office.
He told the gathering that he needed more time to be able to complete the projects and bring positive development to Zambia.
And speaking at the same rally, local government deputy minister Moses Muteteka said the opposition political parties were being used by the devil to discredit positive government projects.
Meanwhile MMD Kafue district chairman, Goodson Sansakuwa said expelled MMD Chilanga parliamentarian Ng’andu Magande was a well behaved member of the MMD until he decided to contest the party’s presidency.
And Mukata begged the electorate to vote for him, saying he was a young and capable leader who would provide credible and quality representation for the constituency.
In Mpulungu on Thursday, President Banda pleaded with the people of Isoko ward not to get tired of voting for him.
During a campaign rally held at Isoko Basic School grounds ahead of Monday’s by-election, President Banda urged the electorate in the area not to listen to people that were telling them to fight for change.
He told the people that anybody seeking their vote should first explain what they would do for them. He said they should demand an explanation from the political parties.
“We have been going around the constituency since I came in the morning but I said there is no way I can cancel my appointment with the people of senior chief Tafuna’s area,” said President Banda, who started his rally one hour and 47 minutes behind schedule.
“You know that we lost honourable (Lameck) Chibombamilimo, who was ill, and we tried to take him for advanced treatment overseas. I took him to India. Unfortunately, he passed away. There is an election taking place…you need to replace your representative, that is our system.”
President Banda skirted away from discussing what caused him to fire the late Chibombamilimo and expel him from the party at a heated State House rally.
He instead pleaded with the people of Mpulungu to replace the constituency’s late MMD parliamentarian with the ‘young man’ Given Mungo’mba.
President Banda nevertheless said the people of Mpulungu gave him Mung’omba as the candidate for the MMD in the October 25, 2010 by-election.
“And I am very proud to announce to you that we accepted him and we have come here to come and ask you to vote for him on Monday so that he can be fully fledged,” said President Banda, as the sun started to set. “He is a child of this area.”
President Banda said he had travelled all the way from Lusaka to ask the people of Mpulungu to vote for Mung’omba.
“I have also come here to say thank you. As you know I was vice-president to the late president Levy Patrick Mwanawasa, who passed away, may his soul rest in peace; now I am President after the election in 2008 for which you the people of this area voted for me in big majority,” President Banda said.
“Osa beba iyai kuni votela, (don’t get tired of me). I have been President for only two years and during these two years, myself and my colleagues the ministers, permanent secretaries, all in the government, we have tried to complete the projects which my predecessor started and we have created new projects all over the country.”
President Banda said his government had opened up Mpulungu district by working on the road from Kasama to the district via Mbala.
“I was very proud to see the road between Mbala and Mpulungu because when I was here, that road was not there and that road from Mbala to Kasama was not there,” President Banda said. “These are the reasons why you should vote for a particular candidate either as a president, member of parliament or as a councillor. We are very ready to continue to work with you to improve your condition of living.”
President Banda said he was grateful for the confidence that the Zambian people had continued to direct towards the MMD and pledged to build a school in the area before calling Mug’omba to address the rally.
Mung’omba only said he was lucky the MMD had adopted him as its parliamentary candidate and was asking the people of Isoko to vote for him; and he ended his oration.
President Banda, surprised by the snappy oration from Mung’omba, asked: “You have finished, eeh!”
President Banda told the crowd, comprising young boys and girls, that Mung’omba was a young man of very few words but with a lot of action.
“I have seen your road. The road from the main road to here is in a very bad condition. Give us a chance together with him (senior chief Tafuna) to fix that road,” President Banda said.
“I also hear at the palace there is a problem of water because…the solar panels were stolen. These are simple things.”
Meanwhile, classes were disrupted for the whole day on Thursday when the MMD campaign team decided to hold their rally at Isoko Basic School grounds near senior chief Tafuna’s palace in Mpulungu.
The pupils, boys wearing khaki uniforms and girls wearing green dresses with white collars, were found dancing to MMD campaign songs blaring from huge loud speakers mounted on a light truck, before President Banda’s rally.
During President Banda’s rally, the children made the bulk of the crowd.
Governments in the world’s developing countries have up to 2015 to achieve the universal primary education goal for all children of school-going age within the context of the Millennium Development Goals (MDGs).Labels: 2011 BUDGET, RUPIAH BANDA
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JCTR bemoans reduced budgetary allocation to agriculture
By Fridah Zinyama
Tue 19 Oct. 2010, 14:50 CAT
THE Jesuit Centre for Theological Reflection (JCTR) has said the reduction in budgetary allocation to the agriculture sector from 6.8 per cent to six per cent in the 2011 budget has serious implications on the livelihoods of the people, especially the poor.
And the JCTR Basic Needs Basket (BNB) has revealed an increase of K18,500 in the cost of food in Lusaka for the month of September to K867,850 from K849, 350.
The BNB is a tool for measuring the cost of living for an average family of six in various towns across Zambia In a press statement, JCTR Social Conditions Programme coordinator Miniva Chibuye stated that agriculture was another key sector in Zambia’s economy as over 80 per cent of Zambia’s labour force is dependent on agriculture production.
She said the reduction in budgetary support towards agriculture would therefore affect the sector negatively. “Furthermore, the Budget has consistently reduced funding towards promoting sustainable agriculture systems such as conservation farming.
In the wake of climate change era, the success of the agriculture sector is not only dependent on increased productivity but also on ensuring sustainable ways of practising agriculture. Therefore, the government must prioritise sustainable agriculture practices and allocate more funding to support extension services,” she added. And Chibuye stated that she was encouraged that next year’s budget had aligned itself to the Sixth National Development Plan (SNDP), which placed strategic focus on infrastructure and human development.
“However, the Budget shows a mixed picture,” she noted. “While the proportion of the health and social protection sectors increased, the education and agriculture sectors saw reduced budgetary allocations as a percentage of the entire Budget. In comparison to the 2010 Budget, the 2011 allocations towards the Ministry of Health increased marginally from 8.3 per cent to 8.6 per cent of the total Budget.”
Chibuye stated that this was far below the recommended 15 per cent in the Abuja declaration to which Zambia was a signatory. “An analysis of the detailed expenditure plan in the Yellow Book shows that the entire Anti Retroviral Treatment programme has suffered a Budget cut,” she stated. “Other notable lines with reduced allocations include general health service delivery such as purchase of medicine, surgery and paediatrics.”
According to Chibuye, these reductions would compromise access to quality health care and may increase the mortality rate in the country. And Chibuye stated that the BNB saw increases in the cost of kapenta, meat, tomato, onion, cooking oil and bread, which contributed to the upward in the cost of living for the month of September to K2, 850,680 from K2, 828,780 in August 2010.
“In this regard, the government needs to deal with the wider challenge of the employment sector, which is marred by very low wages as well as low levels of formal employment,” stated Chibuye.
Labels: 2011 BUDGET, AGRICULTURE, JCTR
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2011 budget stirs fear among banks
By Chiwoyu Sinyangwe
Mon 18 Oct. 2010, 13:10 CAT
COMMERCIAL banks in the country are worried the 2011 national budget will hurt the local financial sector, Bankers Association of Zambia (BAZ) chairman Saviour Chibiya has observed.
Finance minister Dr Situmbeko Musokotwane has proposed to, beginning next year, charge value added tax (VAT) on fee-based banking services at the standard rate.
The move means that other than interest on lending rate, fees charged for specified banking services would attract VAT.
Commenting of the developments, Chibiya said local commercial banks feared the measures would hurt growth of the local banking sector and stifle financial inclusiveness, especially towards the huge unbanked population.
He said the local commercial banks who hurriedly praised next year’s budget soon after its announcement opposed introduction of VAT on fee-based banking services at the standard rate.
“I don’t think so that banks will benefit. We have not looked at this in detail but we don’t want to give everybody an impression that banks wanted this so that they can claim VAT,” Chibiya said. “We don’t want this. Generally speaking, we have not done our number crunching but last week Wednesday when we had an industry meeting everybody was worried about the administrative cost that would go into this.
We were worried how this will contribute in terms of bank charges at the time we are all trying to figure out how we can reduce bank charges...And what this will mean in terms of deepening financial inclusiveness because we do have a large population that is unbanked and how we will compete with other non-bank financial institutions that are doing transfers.”
Chibiya said although the move would help raise money for the
Treasury, it would certainly hurt the local banking sector.
“…this is not the drive that is being driven by banks that we want to claim VAT,” said Chibiya.
“The fact that VAT is going up to me suggest that the government has done their calculation that we will claim much less and that is the point. This was the revenue raising measure; this was not something to help our industry...the overall numbers suggest that we are not going to benefit from this as an industry from the VAT side.”
Labels: 2011 BUDGET, BANKING ASSOCIATION OF ZAMBIA, SAVIOR CHIBIYA, SITUMBEKO MUSOKOTWANE
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Govt claim of middle income country status is insensitive – Kasanga
By Fridah Zinyama
Mon 18 Oct. 2010, 18:50 CAT
GOVERNMENT’S revelation that Zambia will soon become a middle income country are insensitive as 70 per cent of the country’s population still live in abject poverty, a local economist has charged.
John Kasanga said
it was surprising that finance minister Situmbeko Musokotwane told Parliament during the presentation of the 2011 budget that Zambia would in the next few years attain a middle income status when the country still ranked as one of the poorest countries in the world.
“Government should deal with the real issues of making the economy meaningful to its populous,” he said. “It’s not just a matter of saying that Zambia will become a middle income country...has the economy worked on reducing poverty for its people?”
And Kasanga said although the budget had a number of attractive fiscal features in it, it was overly dependent on Pay As You Earn (PAYE), adding that tax exemptions for constitutional office holders should be removed.
“Government’s over-dependence on PAYE is not good; it shows that government has failed to broaden the tax base,” he said. “I think that constitutional office holders should be made to pay tax also so that they contribute to the country’s coffers... Maybe it’s because they do not pay tax that they depend on it too much,” he said.
Kasanga further asked government to clearly explain whether the reduction in donor support was deliberate or not.
“Giving this explanation will help the public to understand whether Zambia is able to support most of its budget without much assistance from donors or not,” he said. “We are asking for an explanation because a reduction in donor support means government will have to find an alternative source of revenue...”
Kasanga further said ordinary people in business would be starved of finances if government sourced for the additional funds locally because the banking sector would concentrate on transacting with the government at the expense of the private sector.
“If the funds are to be sourced internationally, there are concerns of the public debt increasing,” he said.
Kasanga said the issue of the reduction in donor support would have to be explained to the public, as the implications on the economy were enormous. He further observed that government had made huge commitments to infrastructure development in next year’s budget.
“This move is not realistic as it will put too much pressure on government to source for funds to undertake these projects,” he observed. “This move also sends a message to the public that the infrastructure projects are meant to please the electorate next year.”
Kasanga said much as government intended to spend a lot of resources on infrastructure, the Mid Term Expenditure Framework did not include how government would maintain those structures after they were built.
“Is government going to train more doctors, nurses, teachers to meet increased demand in services once those structures are completed?” asked Kasanga.
Labels: 2011 BUDGET, DOMESTIC DEBT, JOHN KASANGA, MDGs, MINING, TAXATION
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COMMENT - Donors are not 'benefactors'. Donor aid is not charity. If anything, it are the Zambian people who are donating their copper to the world, because they are not getting paid for it. And copper profits amount to $2.5 billion a year, while donor aid is only about $700 million.
2011 budget lacks inspiration - Magande
By Kombe Chimpinde
Sun 17 Oct. 2010, 04:00 CAT
NG’ANDU Magande has said the reduction in donor funding to the government coffers is a clear indication that the
benefactors have lost confidence in President Rupiah Banda’s regime.
And Magande has expressed doubt over the MMD’s ability to move the country's domestic revenue from the current 15 per cent to 18 per cent of the national Gross Domestic Product (GDP) achieved two years ago. In an interview, Magande, a former finance minister, said next year’s budget lacked innovation and inspiration.
Magande said donors and Zambians were slowly losing confidence in the MMD going by the low levels of grants and domestic revenue reflected in next year’s budget.
“We had a very comprehensive arrangement with donors. We built that over a period of three years. We worked mechanisms under the Paris Declarations, where we said we want you donors to trust us. I had a very nice time by the time I was leaving because I would call a donor if I had a US $2 billion dollar deficit for salaries of public service workers. Within two days the money would be in the Bank of Zambia,” Magande said on Tuesday.
[Two billion? - MrK]
“This was because they knew I would not take even one kwacha of that into my pocket. It was not money I would bring perhaps to finance holidays for the late Levy Mwanawasa to go on some holiday in Mfuwe.”
Magande said the 2011 budget seemed ambitious.
“It would seem really like we are all anxious at the figure which has gone up from K16 trillion in 2010 to K20 trillion 2011 which is a 25 per cent increase,” he noted.
“It might be just a number, but the actual execution could obviously be very different. I have a problem with where they will get the money because they are still insisting they don’t want to change the mining tax regime.
“They think what they have is good. The economy of the country is growing but the revenue collections are going down which gives us a clear indication that some of the big economic operations in Zambia are happening outside.”
Magande observed that raising the intended revenue from the country’s economic activities would be more challenging with the removal of the abuse of office offence clause from the revised Anti Corruption Commission (ACC) Act.
“Even the question of diversification which the minister is talking about, we have to be a bit imaginative. Just like irrigation, government has been talking about irrigation but has not mapped out a way for local farmers to do this,” he said.
Magande said it was erroneous for the MMD government to continue promising to deliver change to the people without facilitating self-development among people to enable them achieve their aspirations. Magande said the concentration on building roads and infrastructure alone would not trigger any meaningful growth for as long as people were not empowered.
“We are putting emphasis on roads. For instance, the Choma-Chitongo road a beautiful tarmac road, but what do you expect if you have no plans for the people around or on the sides of the road? Those are farmers, they grow crops, they rear cattle; how does this road suddenly improve their conditions?” he wondered.
Magande said the MMD clearly had no modern, innovative and organised manner of governance. Magande’s comments come in the wake of the reduction in donor support to the 2011 national budget.
Labels: 2011 BUDGET, NG'ANDU MAGANDE
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Speaker threatens to wind up debate on 2011 budget
By Ernest Chanda
Fri 15 Oct. 2010, 04:00 CAT
SPEAKER of the National Assembly Amusaa Mwanamwambwa has threatened to order finance minister Situmbeko Musokotwane to wind up the motion on the 2011 budget if more members of parliament do not debate.
Speaker Mwanamwambwa issued the warning on Tuesday upon noticing that no other parliamentarian was willing to debate after the only two debaters, Lombe Mulenga and Levy Ngoma for Kwacha and Sinda respectively, concluded their debates.
Upon noticing that no one indicated to debate, Speaker Mwanamwambwa told members of parliament that they had failed again, barely two weeks after issuing a similar warning.
“You are failing again, and yet again I watched some of you on television. I watched you on Friday, on Saturday, on Sunday and yesterday, Monday. I heard you on radio, I saw your interviews in the papers on the budget. What has happened to the data that you provided out there?” Speaker Mwanamwambwa asked.
“I'm asking the honourable minister of finance to wind up the motion tomorrow if what I have seen here will continue. We will find something else to do. So, minister be ready to wind up.”
Speaker Mwanamwambwa also asked the Executive to go out and correct what he called distortions from parliamentarians who commented on the 2011 budget through the media.
He wondered why parliamentarians feared to debate in the House and yet they found it safe to give their views outside.
“Do you fear that when you debate here your data will be diluted by the Executive? No you are not safe even there. In fact, Executive, go out there and collect the data. Some of the information they gave without research were distortions. So, I'm asking the Executive to go out there and correct the distortions,” said Speaker Mwanamwambwa.
Labels: 2011 BUDGET, AMUSA MWANAMWAMBA, SITUMBEKO MUSOKOTWANE
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Govt's planned $400m debt perturbs CCZ
By Fridah Zinyama
Thu 14 Oct. 2010, 16:00 CAT
THE Council of Churches in Zambia (CCZ) has expressed sadness at government’s intentions to borrow about US $400 million to finance programmes in next year’s budget, saying this might take the country back to being indebted.
And the Zambia Competition Commission (ZCC) has stated that the 2011 national budget will enhance competitiveness of the Zambian economy and reduce the cost of doing business through accelerating infrastructural development.
Commenting on the K20.5 trillion 2011 budget presented to parliament by finance minister Situmbeko Musokotwane, CCZ stated that the government’s intentions to borrow heavily in next year’s budget might take the country back to the pre-Jubilee debt cancellation campaign era where the country’s foreign debt had reached over US $7 billion.
“We therefore urge the MPs to compel the government to justify in clear measurable terms plans for such borrowings so that the country is not tied to a loan that we may not need and which may commit our children for generations to come,” the Council stated.
CCZ also called on Parliament to reconsider the proposals that the church and civil society had originally presented to the Mung’omba Constitution Review Commission on the need for parliament to scrutinise and approve all borrowings on behalf of the nation.
“We sadly note that even though in the budget speech, the Minister of Finance assures the nation that government places paramount priority in ensuring that public financial resources are used for the intended purposes, the government has proposed removing section 37 from the current Anti-corruption Commission (ACC) Act that protects public finance from abuse by thieving public officers,” CCZ stated. “We hope the MPs will seriously consider this as they debate the proposed amendments to the ACC Act.”
And CCZ stated that the absence of agreed government benchmarks and instruments in assessing the performance of the Zambian economy had for over the years created a problem for the church and other stakeholders in assessing the performance of the economy.
“For example the UN has their Human Development Index which contains benchmarks for measuring human growth and development in a nation,” the Council stated. “Our observations as Church leaders, therefore, are that even though the government has recorded a 6.4 percentage growth, this figure is difficult to quantify as we do not know how many Zambian families are now better off this time than they were last year. We also do not know how many quality jobs for Zambians were created by the economic activities that produced the reported growth in the economy.”
CCZ stated that the absence of government benchmarks to measure the performance of key economic sectors made it difficult for the country to measure whether the economy was achieving real social and economic development that could benefit the Zambian poor.
And the ZCC stated that government’s decision to prioritise resources in the 2011 budget on infrastructure development would undoubtedly have the likelihood of ensuring that Zambia remained competitive for trade and investment.
ZCC director for Consumer and Public Relations Brian Lingela stated that the investment in infrastructural development, particularly rural roads, would enhance connectivity to markets and thereby stimulating trade and investment in most rural areas whose potential have not been tapped for sometime due to poor road infrastructure.
Lingela noted that most rural roads had not been prioritized in the past leading to lack of business competitiveness in view of the high cost of doing business in such areas.
“When you look at the allocation for roads, rural roads have been prioritised and this will open up these areas for trade and investment and ensure that they also contribute effectively to the national economy particularly that the cost of doing business in those areas is likely to be reduced,” Lingela stated.
Compared to other southern African countries, one of the challenges that Zambia has continued to face in relation to business competitiveness especially in rural areas has been poor infrastructure.
The Commission further stated that there was need for a further reduction in bank interest rates to complement infrastructural development.
“It is the Commission’s view that despite the country sustaining improved macroeconomic performance over the past few years, bank lending rates still remain high,” stated Lingela.
Labels: 2011 BUDGET, CCZ, DOMESTIC DEBT, SITUMBEKO MUSOKOTWANE
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Execution of 2011 budget faces challenges – CSPR
By George Zulu in Monze
Thu 14 Oct. 2010, 04:00 CAT
CIVIL Society for Poverty Reduction (CSPR) vice chairperson Partner Siabutuba has said the execution of the 2011 national budget faces a lot of challenges because there is
no political will in the fight against corruption and abuse of public funds.
In an interview, Siabutuba said it would be difficult for the government to implement and execute the 2011 budget without
putting in place the mechanism to fight abuse of public funds and corruption.
“From the face value it gives a good budget for any economically oriented country in terms of figures. However, the challenge will remain obvious especially that donors have decided to reduce their commitment,” he said. “In other words donors have decided to pull out because they are frustrated, they are not respected by the current leadership.”
Siabutuba said Zambia had for a long time now been experiencing abuse of both locally organised and donors’ funded resources without any government commitment to fight the vice.
“History is a big lesson enough for us because we have seen a lot of abuse of locally organised resources; we have seen a lot of abuse on donor contributed funds, so it doesn’t matter whether it is a K20.5 trillion budget, there should be financial discipline among government officials,” he said.
Siabutuba said levels of abuse of public funds as presented annually by the Auditor General was another area government had failed to address, adding that it was a source of concern and a challenge to the implementation of next year’s budget.
“Money is still abused and this still remains a thorn which government needs to address. Government needs to look at how they will ensure that tax-payers money does not find itself into irresponsible hands. This remains a thorn into the national developmental processes, so even if it is a good budget and we don’t address the issues of corruption and the issue of abuse of public funds, then we are not going anywhere,” he said.
Siabutuba said the donors’ reduction of their budgetary contribution to Zambia was enough warning that the trend could continue down the line in the process of implementing the national budget.
“You have also seen that the British government has moved its visa office to Pretoria, if you want to acquire your visa. How can that be done? So for me these are issues which are pointing directly to poor and pathetic government donor relations in terms of budgetary implementation and execution,” he said.
“Donors might continue pulling out because they are frustrated. We have not been accountable, we have been irresponsible in the way we have been managing their funds, we have been irresponsible in the manner we have been responding to their demands for accountability. Donors have been asking government to present accountability in the manner we have been using their funds but we respond by asking them to pack their bags and go. Those are the answers donors are not going to entertain, they may not respond directly but actions speak louder than words and we are beginning to see those things.”
Siabutuba said it was time government apologised to donors for their past mistakes because President Rupiah Banda and his government had committed serious economic crimes by abusing donor funds.
Labels: 2011 BUDGET, CSPR, PARTNER SIABUTUBA
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2011 budget is an empty promissory note - Mpombo
By Chibaula Silwamba
Mon 11 Oct. 2010, 04:00 CAT
THE 2011 budget is an empty promissory note, MMD Kafulafuta member of parliament George Mpombo said yesterday.
Commenting on the K20.5 trillion 2011 national budget presented by finance minister Dr Situmbeko Musokotwane under the theme:
'A people's budget, from a people's government' in the National Assembly last Friday, Mpombo said President Rupiah Banda’s government had put up a very indifferent performance in the fight against corruption and imprudent management of resources; hence losing the confidence of foreign donors that consequently reduced aid to Zambia.
“It’s an empty promissory note because the donors have cut budget support. This situation will have a very negative impact on economic growth. Unless you have resources, the budget amounts to political rhetoric,” said Mpombo, a one-time defence minister in President Banda’s cabinet before resigning in mid-2009, citing lack of leadership, mismanagement of public resources and corruption in the current government.
“Donors have seen that Zambia is gripped by a destructive culture of wastage and political profligacy as evidenced by Mr Rupiah Banda’s constant useless international travels. We must also know that the decision by the donors is an open secret that they find there is no prudent usage of funds by this government. The other example is committing the meagre resources of the country on poor projects like mobile hospitals,” Mpombo said.
Mpombo said President Banda’s administration had failed to prioritise the needs of Zambians as evidenced by its purchase of mobile hospitals from China on loan.
He said what was alarming in the budget was the non-committal of the donors to fund the health sector.
Mpombo observed that at the moment, the health sector had severe shortages of drugs, equipment and manpower.
“The biggest losers in this case are ordinary Zambians who cannot travel to Cape Town in South Africa for a knee surgery. But also, they government officials should not hoodwink people about so-called new hospitals,” Mpombo said.
“You can’t just hoodwink people that we are building hospitals and yet these hospitals are white elephants – there is no staff, there are no medicines and equipment. It’s wrong to try to mislead the Zambian people that government is doing something and yet what they are trying to do is just mere politicking.”
He said the government was still frivolous about its responsibilities of governance.
“This government is very arrogant; it doesn’t listen to the people of Zambia. When people are complaining about these useless overseas trips, that is when Mr Banda dares the people and travels without shame. You cannot do things like that,” Mpombo said.
Mpombo said there was a gaping hole in the integrity of the government; hence the donors’ cutting of aid.
“Clearly, it is a vivid manifestation of the donors’ concerns on the lukewarm efforts by the government to promote good governance, the fight against corruption has been compromised and yet this is a big benchmark and magnet to attract investment and support in the country. But the government has put up a very lackadaisical performance as far as the fight against corruption is concerned,” said Mpombo.
“Instead of strengthening the fight against corruption, government is diluting the fight against corruption by the intention to remove the abuse of office clause from the revised Anti Corruption Commission bill. It’s very clear this government has hidden intentions as far as the fight against corruption is concerned.”
According to Dr Musokotwane’s budget speech, donors have cut their support by about half, from 14.5 per cent in 2010 to 7.7 per cent in the 2011 national budget.
Labels: 2011 BUDGET, GEORGE MPOMBO, SITUMBEKO MUSOKOTWANE
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Lubinda expresses disappointment over 2011 budget
By Kombe Chimpinde
Mon 11 Oct. 2010, 14:01 CAT
KABWATA PF member of parliament Given Lubinda has the government has lost another opportunity to utilize its mineral resources to cover most of its national expenditure. And Lubinda described finance minister Dr Situtembeko Musokotwane ‘s 2011 budget after it was presented to parliament on Friday as disappointing.
“Dr Musokotwane had a very big problem writing that budget and had a big problem reading it because that budget is clearly a campaign budget,” Lubinda said. “To drive the campaign of Rupiah Banda in 2011 that’s the reason why you heard him struggling with the level of detail to which he was presenting the budget. However we have missed an opportunity of raising sufficient domestic resources to finance the huge expenditure they are intending to have in 2011.”
He said it was only logical to subject the country’s mining sector to appropriate taxation because it was the most productive sector at the moment.
“…the minister in one hand told us that the mining sector is doing extremely well producing the highest tonnage of copper in many years and yet shying away from taxing the mine. Now that is imprudent budgeting,” Lubinda said.
“And that’s the reason why you see that they have increased the amount of domestic borrowing. Financial borrowing will have a negative impact on our financial sector as it would crowd out the private sector. What more when they have also reduced the amount of money available for the Citizens Economic Empowerment Commission from K120 billion that was allocated last year to a meager K40 billion.”
He observed that the private sector was going to denied access to affordable funds.
“...in a nutshell it is a very disappointing budget. The sector is the one that is the most productive and the one which is remitting the highest turn instead they have decided to go and tax somewhere else,” said Lubinda.
Labels: 2011 BUDGET, CEEC, GIVEN LUBINDA, SITUMBEKO MUSOKOTWANE
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2011 budget not a poor man’s budget – Sata
By Chibaula Silwamba and Chiwoyu Sinyangwe
Sun 10 Oct. 2010, 04:01 CAT
PATRIOTIC Front (PF) president Michael Sata yesterday said the 2011 national budget does not support the poor as claimed by President Rupiah Banda's government. And Professor Oliver Saasa has observed that corruption should not be the motivation for the government's attempts to reduce dependence on donor inflows for budget implementation.
Commenting on the K20.5 trillion 2011 national budget presented by finance and national planning minister Dr Situmbeko Musokotwane under the theme: "A people's budget, from a people's government" in the National Assembly on Friday, Sata said national budget revenue measures were meant to generate funds for President Banda's foreign trips.
"It's not a poor man's budget. Rupiah Banda a few months ago increased fuel prices. Now his minister because they are so desperate, they have increased everything. The money they have increased on motor vehicles licence fees is not because they want to repair the roads but they just want to raise money for Rupiah Banda's useless and unproductive movements," Sata said.
"If there is bumper harvest, where is bumper harvest because the cost of mealie meal is still very high? Now, Nakapwasha information and broadcasting services minister Ronnie Shikapwasha or whatever his name is, he is talking about foreign reserves but if there is any reserves why should our currency be so weak?"
He said Zambia was headed for a disaster because of poor leadership.
"We are in big trouble, we are heading for disaster. All the money which Musokotwane is going to raise is to help them for rigging the elections," said Sata.
And Prof Saasa said key social sectors such as health, education, water and sanitation were always the hardest hit each time the donors pull a plug on budgetary allocation to the country.
Prof Saasa, a prominent Lusaka economic consultant, said the government should only be motivated to reduce dependence on donor inflows when the country gets to a position to survive without external aid.
He said the donor component in the current overall execution was too significant to be ignored.
"But one has to be realistic, the reason to reducing it should not be because there is corruption; the reason is that we should be able to meet the gap and that is the challenge we have now," Prof Saasa said.
"If it is reduced so fast when we are least able to shoulder the difference, then of course you saw what happened in the social sector. Mind you much of the aid to Zambia goes to the social sector, health, education and things like water and sanitation."
He said drastically cutting donor aid would harm key sectors of the economy that would be sacrificed as witnessed last year when the donors reduced funding to the Ministry of Health.
"If donor receipts are reduced drastically before we are ready to find the difference, then of course we will be affected," he said "Last year, when the donors suddenly reduced, what the government did was to mop up finances from other expenditures including infrastructure development. A number of roads were suspended even after approving the contracts, that is not good. So, yes, we should reduce dependence on donors, but yes we must decide on replacement for those resources."
Prof Saasa said the current economic position was not adequate enough to make Zambia live off donors.
"At the moment, donor aid has been quiet significant. But since last year, it has been below 20 per cent of the total government expenditure," said Prof Saasa.
Labels: 2011 BUDGET, DONORS, MICHAEL SATA, SITUMBEKO MUSOKOTWANE
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COMMENT - At an exchange rate of 5,000/$, 20.5 trillion is $4.1 billion dollars, double the 2004 budget. Since this Second Great Depression is reducing the amount the so-called donors want to spend, this is the time to start massively taxing the mines, especially as the Minister has admitted that there will be no poverty reduction using the present economic model. Well if he doesn't now how to reduce poverty, I do. Reduce the number of government ministries, make them service delivery oriented and decentralize to local government, and tax the mines for AT LEAST $1.2 billion a year. Create works and infrastructure project, put all kids in school and ensure universal access to healthcare.
Donors reduce grants to 2011 budget
By Chibaula Silwamba
Fri 08 Oct. 2010, 16:30 CAT
COOPERATING partners have reduced their grants contributions to Zambia’s national budget for 2011 by almost half to only 7.7 per cent compared to 14.5 per cent this year. And the government has allocated K244.6 billion for the holding of next year’s tripartite elections.
Meanwhile, finance and national planning minister Situmbeko Musokotwane admitted that there was continued absence of commitments from cooperating partners in the health sector.
Unveiling the 2011 national budget worth K20.5 trillion under the theme: “A people’s budget, from a people’s government,” in the National Assembly in Lusaka yesterday, Dr Musokotwane said over the last 10 years, the government had increasingly relied on
domestic resources to finance the national budget and would continue on that path.
“We remain committed to paying our own way in the world. Sir, K15, 769.1 billion about K15.76 trillion or 76.8 per cent of the budget will come from domestic revenues and K1, 587.7 billion about K1.58 trillion or 7.7 per cent through grants from our cooperating partners,” Dr Musokotwane said.
[That's not 'paying your own way in the world, that is making workers pay for YOUR way in the world, while shielding your 'friends' in the mining industry from paying a penny in taxes. It is shifting the burden of taxation from the mining industry to workers. For the sake of 'development', which will not reduce poverty in the country for 3 decades to come, as you have admitted. - MrK]
“The deficit of K3, 180.6 billion about K3.2 trillion or 15.5 per cent will be financed through domestic borrowing of K1,219.8 billion about K1.2 trillion and external borrowing of K1, 960.8 billion about K1.9 trillion.”
Going by Dr Musokotwane’s figures, the donors’ grant contribution has been reduced by over K1 trillion and foreign borrowing increased threefold compared to figures in the 2010 budget.
According to the 2010 national budget, which he presented last year, Dr Musokotwane had said: “The government proposes to spend K16,717.8 billion or 22.5 percent of GDP in 2010. To finance these expenditures, the government will raise domestic revenues of K12,107.0 billion representing 72.4 percent of the budget and expects to receive grants from our Cooperating Partners amounting to K2,426.7 billion or 14.5 per cent of the budget.
The balance of K2,184.1 billion or 13.1 per cent will be financed through domestic borrowing of K1,487.0 billion and foreign borrowing of K697.1 billion.”
In the 2011 budget, Dr Musokotwane said expenditure on general public service would be reduced to below 30 per cent for the first time while expenditure on economic affairs, health and education had been increased and would account for over half of the budget.
“The allocation to the general public services amounts to K5,855.5 billion or 28.5 per cent of the budget. Of this, K1, 665.3 billion will be used to service domestic and external debt,” he said.
“I have also allocated K244.6 billion for the holding of elections. In addition, K146.2 billion has been provided for grants to local authorities and K108 billion for constituency development fund (CDF).”
Dr Musokotwane allocated K3.5 billion for the preparation for sector devolution, which will commence in 2012, following the approval of decentralisation implementation plan in 2009.
In agriculture sector, Dr Musokotwane said the government would continue to help farmers to increase output, productivity and incomes.
“Drawing on the successes of the Farmer Input Support Programme in 2010, I have increased the allocation to the programme to K485 billion in 2011 from K435 billion in 2010,” Dr Musokotwane said.
However, a check in the 2010 budget speech, Dr Musokotwane had said: “I have allocated K430 billion for the Farmer Input Support programme in 2010.”
Further, Dr Musokotwane said the increment to the Farmer Input Support Programme (FISP) in 2011 would make farmers deliver even a higher harvest in 2012 compared to the historic 2.8 million metric tones of maize in the 2009/2010 agricultural season.
Dr Musokotwane said sustaining bumper harvests required strengthening of marketing arrangements to avoid wastage and losses to farmers.
“To continue with our efforts to support farmers in far flung areas of the country and to guarantee national food security, I have allocated K150 billion for the Food Reserve Agency in 2011,” he said.
Dr Musokotwane said he had increased allocation for the Food security pack programme by 50 per cent to K15 billion in 2011.
He also allocated K13.3 billion to agricultural extension services and K37.2 billion for the construction of dams, irrigation projects and training of small-scale farmers to enhance irrigation farming.
Dr Musokotwane allocated K1.5 billion for construction of a bridge and preparatory works at Luena farm block in Luapula Province and K261.8 billion to livestock and fisheries programmes, which he said had tremendous potential to create jobs and serve as a source of diversified economic growth and export earnings.
Dr Musokotwane said in an effort to reduce animal diseases through creation of disease-free zones, the government would construct livestock service centres in five districts in Northern Province, four districts in Soutehrn Province, two districts each in Central and western Provinces and one each in North Western and Eastern province as well as construction of disease check points across the country and purchase vaccines in 2011.
“For these activities, I have allocated K26.6 billion in 2011. in addition, K21.8 billion has been provided for fish breeding and aquaculture extension services,” he said.
In tourism sector, Dr Musokotwane allocated K12.8 billion for marketing Zambia’s tourism sites and K37.7 billion for the development of roads and infrastructure in Kafue National Park, development of Lusaka National Park and creation of a tourism one-stop-shop facility and K1.1 billion for to upgrade permanent exhibitions at Lusaka National Museum.
In energy sector, Dr Musokotwane said power would be very important for the growth of Zambia’s economy and the government was working on increasing power production output.
He increased allocation to the Rural Electrification Programme to K314.3 billion in 2011 from K234.7 billion in 2010 to spur rural development, adding that the government would develop mini-hydro power stations and extend access to rural areas to open them to investments and reduce the rural-urban divide.
In transport and communication sector, Dr Musokotwane said he had increased allocation to the road and infrastructure development to about K3 trillion in 2011 from about K1.4 trillion in 2010.
He said the rural road unit had been allocated K6 billion and K28.4 billion for rehabilitation and upgrading of airports and airstrips including at Kasaba Bay, Mansa, Kasama and Mongu.
“The total allocation to the transport and communication sector amounting to K3, 327.9 billion is historic and unprecedented,” Dr Musokotwane said.
In education and skills development sector, Dr Musokotwane said he allocated about K3.8 trillion to the sector, representing 18.6 per cent of the budget.
Of that amount, the government allocated K444.2 billion for building high and basic schools across the country and K36.5 billion for construction and rehabilitation of training institutes and research centres.
“In 2011, the government will recruit 5, 000 teachers, for which a provision of K131.6 billion has been made. Another K46.4 billion has been provided for the procurement of desks and learning materials,” he said. “We provided K159.9 billion towards the dismantling of personal related arrears to our teachers and lecturers.”
In health sector, Dr Musokotwane said the government continued to invest in infrastructure and human resources.
“In the continued absence of commitments from cooperating partners in the health sector, I have increased the allocation of domestic resources to the health sector by 30.1 per cent. In 2011, I have allocated K1, 772.9 billion about K1.77 trillion to the sector compared to K1, 362.5 billion about K1.36 trillion in 2010. this is a demonstration of our resolute commitment to ensuring that service delivery is not compromised at our health posts, health centres and hospitals,” Dr Musokotwane.
He said the government would recruit 1, 700 health personnel that include doctors, nurses and other essential medical staff at a cost of K52.7 billion while K37.5 billion had been allocated for procurement of medical equipment.
He said K117.8 billion had been allocated for the procurement of essential drugs and medical supplies, of which K23.1 billion was for anti-retro-viral medication and K11.5 billion for vaccines and immunizations.
In water and sanitation, Dr Musokotwane said K555 billion had been allocated for construction of boreholes, repair water reticulation systems and pit latrines in a bid to meet Millennium Development Goals (MDGs).
He allocated K919 billion towards public order and safety programmes.
On social protection, Dr Musokotwane said government allocated K547.5 billion for retirees.
Dr Musokotwane said he had allocated K76 billion for empowerment funds, of which K10 billion was for youths, K26 billion for women and remaining K40 billion had been allocated to Citizens Economic Empowerment Fund (CEEF).
Dr Musokotwane said the government was firmly committed to provide relief to workers and had, therefore, proposed to increase Pay As You Earn (PAYE) exempt threshold by 25 per cent K800, 000 to K1 million per month.
“Proposed PAYE system: income band K1, 000, 000 and below tax rate zero per cent, K1,001,000 to K1,735,000 per month tax rate 25 per cent, K1,735,001 to K4,200,000 per month take rate 30 per cent,” he said.
“I propose to provide further relief by: (a) increasing the exempt portion of income paid at termination of employment from K25 million to K35 million; and (b) increasing the tax credit for differently-abled persons from K1.92 million to K3 million per annum.”
Dr Musokotwane zero-rated value added tax (VAT) on hammer mills and standard rated property and casualty insurance, fee-based banking services such as manager/bank cheques, drafts and transfer and excess withdrawal fees.
“These two measures will result in a revenue gain of K109.9 billion,” he said. “All VAT measures will come into effect on 1st January, 2011.”
He removed customs duty on electricity and fire-fighting equipment but introduced customs duty of 15 percent on deformed bars and galvanised cold-rolled coils, hoping to raise K1.6 billion.
Dr Musokotwane observed that most shops give free plastic bags to shoppers, which harm the environment.
He said he had introduced an excise duty on plastic bags at the rate of 10 per cent to promote environmentally friendly behaviour and discourage the use of plastic bags.
“This will not apply to paper bags which are biodegradable,” Dr Musokotwane explained. “Road user charges are one of the main sources of financing for road maintenance under the Road Sector Investment Plan. Current charges, however, are too low to meaningfully contribute to the cost of road maintenance.
I, therefore, propose to increase one of these charges, the motor vehicle licence fee, by 50 per cent. This measure will raise K40.7 billion and will take effect on 1st January, 2011.”
Labels: 2011 BUDGET, CORRUPTION, SITUMBEKO MUSOKOTWANE
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ZNFU reckons 2011 budget a chance to tackle hopelessness
By Mutale Kapekele
Tue 28 Sep. 2010, 04:00 CAT
THE 2011 national budget provides the government with an opportunity to address the despondency that has beset the agriculture sector, the Zambia National Farmers Union has observed.
In their submissions for the 2011 national budget, the union observed that it was time for the government to make long-lasting and favourable decisions for the agriculture sector.
“The Union is convinced that this is an opportune time for the government to take far-reaching decisions that will forever change the Zambian agricultural sector for the better and achieve the shared view of economic growth through competitiveness and diversification,” ZNFU observed.
In its 2011 budget submissions, the ZNFU has observed that the agriculture sector has remained uncompetitive due high production costs.
“Lack of competitiveness has become an eminent threat to any further expansion in agriculture production because the surplus that has been produced cannot land in export markets at a competitive price,” the ZNFU stated.
“The main reason for this is that farmers in general (small, medium or large scale) engaged in production of maize or other crops and livestock (dairy, beef, pigs, poultry etc) all buy inputs at retail commercial prices and have to survive in the business of farming without subsidies.”
ZNFU observed that production costs had risen to unsustainable levels despite consumer price resistance on the local market that saw farmers getting sub-economic prices.
“This is one of the contributing factors to farm liquidations and perpetuation of poverty in the rural areas,” the ZNFU stated. “In the export markets, products are uncompetitive compared to products sourced from other countries. Therefore, while there is desire to diversify the economy through agriculture, it is eminent that this will only come about if production costs are reduced across the board.”
ZNFU is demanding value added tax (VAT) exemption for all agriculture products, the removal of import duty on electric delivery vehicles and livestock levies among other things.
It has proposed an increase in VAT to 16.5 per cent for the country to realise the lost revenue if agriculture products get the zero rating.
ZNFU is also demanding an increase in tax for edible oils to encourage local production.
It also called for the introduction of duty on mobile phone airtime and urged the government to target expenditure for the agriculture sector at programmes that support private sector growth “in line with the free market principles.”
Labels: 2011 BUDGET, VAT, ZNFU
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COMMENT - How dare they? Their expenditures have gone up $1bn compared to 2004, and what do they have to show for it? Where is the universal healthcare and education, that can EASILY be funded with $1bn, many times over? They should
resign in shame.
Govt proposes K17 trillion budget
By Post Online
Thu 16 Sep. 2010, 07:50 CAT
THE government has proposed a K17 trillion budget for the year 2011, Secretary to the Treasury, Likolo Ndalamei has disclosed. In a statement on fiscal trends, strategy and forecast for the 2011 budget and the Medium Term Expenditure Framework for 2011 to 2013, Ndalamei said the K17 trillion budget represented 20 per cent of the country’s Gross Domestic Product (GDP).
He said the total expenditure is projected to be K 21 trillion Kwacha representing 21 per cent of GDP. He said the medium term budget spending is proposed to increase to K20 trillion in 2012 and then K22 trillion in 2013.
Ndalamei further explained that government projects to incur a deficit of 3.5 per cent of GDP between 2011 and 2013, to finance ambitious infrastructure expansion programmes in roads and the energy sector.
He however noted that domestic borrowing would reduce from 1.4 per cent in 2011 to 1.2 per cent by the year 2013.
Ndalamei said net external financing was also expected to decline from two per cent to 1.8 per cent in the same period.
He said in the period 2011 to 2013, government will emphasise efficient use of resources and re-align expenditure to create room for development and investment spending.
This will be done by avoiding spreading resources too thinly across many developmental projects and implementing cost cutting measures.
Labels: 2011 BUDGET, CORRUPTION, LIKOLO NDALAMEI
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