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Stick to budget, spend what you have, Chibamba urges govtBy Mirriam Chabala on 16 Sep 2017
Former International Monetary Fund communications advisor Chibamba Kanyama says government must stick to the budget if it is to clear all outstanding debt.
And Economics Association of Zambia national secretary Herryman Moono says it seems government is no longer interested in an IMF bailout package because they feel they have gotten out of a “coma”.
Speaking when he featured on Radio Phoenix’s Let the People Talk today, where he discussed 2018 budget expectations, Kanyama said it was necessary to review previous budgets before announcing new ones.
“We have experienced over expenditure in the implementation of most of our budgets each single year. What we don’t seem to understand is that we can only spend what we have as a country and the five pillars of government are quite emphatic that let us stick to the budget and spend only what we have. The Minister of Finance announces the budget for 2018 next week to explain government’s expenditure for the next financial year. However, before focusing on next year’s budget, we can address the fundamentals of this year’s budget in terms of how much we have diverted from what the budget said last year. Are we in line with what it said? And it’s also pointless to announce a new budget when you have not stock edited how you managed the budget that is in existence right now. So let us see how far we have diverted from that before we can move on to the next budget. We need to establish if we are really on budget or not and what about the arrears? We should not build arrears anymore, we should halt them, otherwise we won’t manage to settle all of our outstanding debts,” Kanyama said.
He also said that the country’s economic growth would rise above the initial projection due to stability in the electricity supply and the significant rise in Copper prices on the international market.
“The budget cycle has changed from end of March to beginning of January each year and that is why towards the end of the actual fiscal year, which used to be October and this year it will be in September. This shows that we don’t actually know how we shall change the year. But indications are that we might end positively on most of these indicators and I am very positive that economic growth will be above the planned repose for many reasons because firstly, we have had stability in electricity supply the whole of this year starting from March, we think significant stability has been made in that area. We have also seen Copper prices going beyond what was projected initially, you may remember that most international organizations like the IMF and World Bank had actually projected much demand of Copper from China,” said Kanyama.
And Moono observed that government seemed reluctant about signing an IMF bailout package.
“For me I would like to see that there is a continuity of economic stabilization and growth programme, this is just the first year of the programme and we have seen positive results for the programme to succeed. So we would like to see that the programme continues next year and the subsequent years as well. And then we also want to see that government sticks to its policy programme. For example, this year they projected that they wouldn’t go beyond two per cent of the GDP from the local market but as of June they already borrowed over K6 billion. So there is an issue of adhering to the target that they set. We want to see to it that they adhere to the target that they set. However, I am quite skeptical about the IMF deal right now and this because government thinks they are out of the coma and no longer need the fund. Of course that’s just my assumption and I could be wrong but I am able to read the signs and how the statements are being structured. But I still ask government to consider going for a standby facility under IMF if they can’t go for a full programme because you may never know,” said Moono.
Meanwhile, business consultant Dennis Wood he expected finance minister Felix Mutati to give a clear roadmap on debt repayment.=
“I think for me the most important thing is to look at fiscal sustainability and credibility measures, those are very key things and if that is not done, then we will have a very big problem in our hands because we will actually be carrying over the 2017 financial deficit to 2018. Then the other thing that I think we need to look at is the public debt, we need to dismantle it as soon as we can. Whatever happens once we dismantle it then we will generate some form of enthusiasm in the economy. So those are the two things that I want to see from the Minister’s budget next week,” said Wood.
About Mirriam Chabala
Mirriam Chabala is a Zambian journalist who covers current affairs and writes in-depth feature articles on social issues.
Email: mirriam [at] diggers [dot] news
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