Zambia’s finance minister has presented a 64.5 billion kwacha ($6.6 billion) budget to parliament.
The 2017 budget contains proposed measures aimed at curbing the country’s budget deficit at a time when commodity price slumps have forced mine closures in the country as well as caused a rise in unemployment and food prices.
Finance Minister Felix Mutati told parliament that Zambia would cut its fiscal deficit to 7 percent of Gross Domestic Product (GDP) in 2017 from the 2016 projection of 10 percent.
“We all agree that the task of restoring stability and accelerating growth will not be easy. We have to be bold and decisive,” he said.
Zambia’s economy is expected to grow 3.4 percent in 2017 from the current 3 percent. But the finance minister cautioned that the “economic environment in which the 2017 budget will be implemented will be challenging”.
“Growth in the global economy is expected to be subdued,” he said, adding that domestically “low water levels will continue to hamper electricity generation and thus constrain production. These realities mean that we have to act decisively to address the challenges we face.”
The price of electricity is expected to go up to reflect the cost of production by the end of 2017.
Former finance minister, Ng’angu Magande, has however raised concern over some allocations in the budget pointing specifically to the allocation for general services, half of which he says will go into paying “for work which has been done”. This he says means there will not be enough money in the future.
Zambia is expected to introduce a 7.5 percent import duty on copper concentrates from January next year but mining taxes are expected to remain the unchanged.