Budget 2023: Reduce the Deficit, Increase Investment, Boost Agriculture
Zambia’s Minister of Finance and National Planning has unveiled the national budget for 2023. Speaking in Parliament on Friday the Minister, Situmbeko Musokotwana, emphasised continuing economic growth, attracting foreign investment, and deficit reduction as crucial points.
The Government is targeting a 4% growth rate in 2023 whilst attempting to bring inflation further under control. The Hichilema administration has seen inflation drop from 24.4% when the New Dawn government took office in August 2021 to 9.7% in June of this year. The budget seeks to further reduce that rate to 6-8%.
Last Thursday, October 28, the first-ever Zambia-China trade forum concluded. The forum is one of a number of ways the administration is pursuing increased foreign investment to stimulate the economy. To this end, taxes on the mining industry have been restructured - with First Quantum Minerals (FQM) being the major beneficiaries.
FQM recently committed to a $1.35bn investment in the Kansanshi and Enterprise Copper, Nickel, and Gold mines. Regulations around the petroleum energy sub-sector have also been liberalised to stimulate investment.
The Zambia Chamber of Commerce and Industry (ZACCI) has praised these steps, saying reform has been overdue and that the budget will build the credit of the Zambian market.
The British High Commissioner to Zambia, Nicholas Woolley, commented that the new budget demonstrated the Government’s commitment to economic growth. Speaking of a “close partnership” between the UK and Zambia, he was pleased to “note a clear focus on social sectors like investment in schools, health, expansion of social protection schemes, and a desire to unlock investment in renewable and clean energy sectors.”
The budget aims to reduce the spending deficit from 9.8% (forecast 2022) to 7.7%. As part of this, it is hoped a number of its external loans will be restructured in the coming months. As a whole, there is a planned 6 billion Kwacha reduction in spending when compared to 2022.
Yet, there are important spending increases as part of delivering on their elected mandate. The Constituency Development Fund has been increased from K25.7 million to K28.3 million, K274 million has been set aside to buy livestock vaccines and build a production plant in Lusaka, and 500 extension officers are to be hired to help increase agricultural productivity.
A further, K11.2 billion has been committed to interventions in the agriculture, fisheries, and livestock sub-sectors.
Over the weekend students from the University of Zambia marched in thanks for the announced reintroduction of meal allowances for students at public universities. The budget also committed the further hiring of four thousand teachers as part of the administration’s free education programme.
The statement also committed to the hiring of three thousand more health workers as a step to the improvement of medical provision across the country.
President Hichilema welcomed the budget on Twitter, saying that they had “planted the #SeedsOfProsperity” and were still “working hard to see results that benefit all Zambian people.”
Image via Twitter @HHichilema