THE government last month spend K3.2 billion on dismantling domestic and external debt arrears, says Secretary to the Treasury Fredson Yamba.
And the Treasury released K11.17 billion during the month under review to finance developmental programmes and public service delivery.
Meanwhile, K900 million has been spent on helping the National Savings and Credit Bank (NATSAVE) meet its minimum capital requirement set by the Bank of Zambia for it to access the K10 billion Central Bank’s Medium Term Refinancing Facility (MTRF).
In a statement issued by Ministry of Finance spokesperson Chileshe Kandeta on the July 2020 budget performance and preparations on the 2021 national budget, Yamba said the release of K3.2 billion was in tandem with the government’s desire to dismantle its huge debt stock.
“In line with Governments commitment to reduce indebtedness, a sum of K3.2 billion was released towards the payment of both domestic and external debt. We also released a sum of K281.4 million towards the dismantling of liabilities owed by various ministries and agencies to several suppliers of good and services. Further, K20 million was disbursed to help dismantle liabilities under the compensation and awards provision. The Government, in July 2020, spent K3.5 billion on the public service wage bill. In addition, K11 million was channelled towards chief’s subsidies and retainer’s wages,” Yamba said.
“K74.6 million was released to Zambia Revenue Authority was for operations and domestic resource mobilisation activities. Through ZRA, we will strive to mobilise more domestic resources to respond to the various competing developmental needs of the country, including responding to the unprecedented Covid-19 pandemic. This notwithstanding, we will continue to constrain public debt accumulation and endeavour to effectively implement public financial management regulations at all times. In the month under review, Zambia’s cooperating partners contributed K54.5 million to various socio-economic development activities.”
He further said out of the total K11.7 billion released in July, K1.48 billion was for transfer payments, subsidies, and social benefits, of which K585 million went towards the payment of pensioners under the Public Service Pensions Fund and K1.45 billion used on financial and non-financial assets, while K1.2 billion financed various government programmes.
“For subsidies and agriculture sector social-benefit programmes, the Treasury released K318.5 million of which K185.5 million was channelled towards the on-going construction of maize-grain storage facilities under the Food Reserve Agency, K103 million to the Farmer Input Support Programme (FISP) to finance activities related to the vulnerable but viable farmers and, lastly but not the least, K30 million was released for the Food Security Pack Programme. These interventions, in-tandem with other activities under the community development and social sector umbrella, are key in the Governments drive to empower the rural poor and create sustainable livelihoods for them. In July 2020, K593 million was released towards social benefits, of which, K585 million was for the payment of pensioners under the Public service pension fund whilst K8 million went towards Social Cash Transfer programme,” Yamba said.
And the Treasury helped NATSAVE attain a clean balance sheet through an injection of K900 million.
“Through this capital injection, NATSAVE will meet the minimum capital requirements set by the Bank of Zambia, enabling it to access the Bank of Zambia K10 billion Medium Term Refinancing Facility (MTRF). With a clean balance sheet, NATSAVE is expected to enhance provision of affordable financing to both SMEs and households. We are confident that through NATSAVE, more SME’s will now access the K10 billion facility from BoZ,” Yamba said.
“K38.4 million was released to the education sector for existing capital projects. Treasury released also K62.7 million for water and sanitation projects, K34.2 million for the Kafue bulk water project, and K20 million for works under the Millennium Challenge Account Programme. K372.1 million went to road sector infrastructure while K23.5 million was released for development of electricity infrastructure in rural areas through the Rural Electrification Programme. In the month under review, the Treasury released K889 million towards transfers and subsidies. Under the transfer’s category, K270 million was channelled towards supporting operations of Grant Aided Institutions such as Road Development Agency which got K9.8 million, Food Reserve Agency K6.3 million, and National Assembly K5.5 million. In addition, K97 million local government equalisation fund was also released to support the operations of local authorities. Further, the Treasury released K79 million for operations of public universities while public hospitals received a total of K52 million.”
In the same month, the Treasury released K437.5 million for general operations of Ministries, Provinces, and Agencies while the purchase of essential drugs and medical supplies in Public Health Institutions was allocated K550 million, and court operations under the judiciary got K33 million.
“Other key beneficiaries were Disaster Management and Mitigation Unit which was released K22 million for various Covid-19 related activities and the Zambia Statistical Agency which received K17.3 million to support preparatory activities for the 2020 National Census which is scheduled to begin in some weeks,” Yamba said.
On the 2021 national budget preparations, he said 145 submissions were received from umbrella organisations, institutional stakeholders, single-standing private businesses, civil society, and numerous individuals and citizens, which were currently being reviewed by the committees constituted to scrutinize both tax and non-tax proposals.
“Although the notice for submissions has lapsed, proposals are still welcome for the period until Wednesday 12th August 2020. This is to ensure that citizens, including the youth, women groups, the private sector, and all other stakeholders and interest groups that may feel left out in the preparation process, are included through receipt of their submission of tax and non-tax policy proposals for the 2021 National Budget. In July 2020, stakeholder engagements for the 2021 National Budget commenced at provincial level. A total of five (5) Provinces were visited between 15 and 21 July 2020. These are, Luapula, Muchinga, Northern, Eastern, and Central Provinces. However, as the daily Covid-19 cases began to escalate, it became necessary to adjust the stakeholder engagement method from the interactive town-hall version, to virtual and electronic based consultative meetings for the remaining provinces,” said Yamba.
“I also take this opportunity to announce that an inter-ministerial Tax Policy Review Committee (TPRC) for the 2021 Budget National Budget, has been constituted. The committee comprises experts in direct taxes, mining matters, customs and excise, and value added tax. In addition, an inter-ministerial Non-Tax Policy Review Committee (NTPRC), comprising experts from all revenue generating ministries and agencies, has also been constituted to assess proposed options and recommend the best possible non-tax measures for the 2021 National Budget. The two committees are currently evaluating the submissions from stakeholders. The evaluation and analysis process will run up to 21st August, 2020, however, in instances where a respective committee seeks clarity on a particular submission, virtual consultations with stakeholders will be arranged.”