THE national budget that was presented by finance minister Bwalya Ng’andu, the last of the PF government, is worrying and a reflection of total failure in economic management, observes UPND leader Hakainde Hichilema.
In a statement to dissect the K119.6 billion 2021 national budget that was presented in Parliament on Friday, Hichilema said it was shocking that the minister planned to finance it through borrowing.
“Firstly, the week started with the announcement that Zambia will not only fail to pay the first Eurobond bullet payment due in 2022, but is [also] having challenges in paying the interest owing on Eurobonds up to April 2022, and calling on creditors for a meeting on September 28, 2020, to discuss the Eurobond debt service suspension,” Hichilema said in his Facebook post. “Fair enough, this is a commendable effort to admit that things are not the way they should be, especially if it means we shall soon get on a programme to live within our means as a country. Shockingly, the Minister of Finance plans to finance the 2021 budget through borrowing K51.6 billion (US$2.6 billion), representing 43.1 per cent of the total budget. Of this K51.6 billion, the PF wants to borrow K27.7 billion or $1.4 billion from external sources, an amount equal to total interest payments on external debt and about the size of our reserves.”
The UPND leader wondered why government was seeking further debt when the country was failing to settle existing debts.
He said the budget was shallow on specific measures to be implemented.
“Given the poor track record of the PF administration at the execution level, such lack of details spells doom on the horizon, and prolonged economic uncertainty if this government is given an opportunity to present another national budget,” he said further. “Simply put, we cannot pay our workers and debts without borrowing. Out of the K66.0 billion that will be generated domestically, PF is expecting to raise 5.5 per cent or K6.6 billion of the budget through fees and fines – how can you run government expecting to make money charging those who drill boreholes because the government is failing to provide water, hoping your citizens can commit traffic offences and other misdemeanors?”
He further wondered why the Zambia Revenue Authority should start charging more for imported second hand cars.
“They are back to that old system that they discarded. They have decided to exclude the so-called high-value motor vehicles from the definition of used motor vehicles, and adjust them to ad valorem import duty. We continue to argue that the PF has wrong priorities. We find it strange that the budget line for health was increased by only 3 per cent in the middle of a deadly pandemic,” said Hichilema. “Adjusted for inflation, the PF has reduced the allocation in real terms. Further, we also note that you set aside K202 million as gratuity for MPs. At the same time, we appreciate that they worked for this money, like many public servants that have not yet obtained their pension. A normal father will not ask his children to tighten their belts while he continues feasting. They can wait for their gratuity. Prioritise paying the outstanding pensions of those public servants who spent over 30 years serving this great nation.”