Parliament approved the proposed K106 billion 2020 national budget and adjourned Sine die.
This was after the Appropriation Bill of 2019 passed the third reading in Parliament, Wednesday evening.
Speaking earlier, Finance Minister Dr Bwalya Ng’andu reiterated government’s commitment to ensuring that the 2020 budget was effectively implemented.
He said next year’s budget, effective January 1, was prepared on an exchange rate ratio of K15 per dollar to help mitigate the effects of the kwacha’s depreciation against major convertible currencies.
“I would like to reiterate the commitment that will we focus on ensuring that we will implement the budget as approved. Bearing in mind the fact that in some cases, shocks may occur in the economy that’s where it may make it difficult for us to ignore the challenges of not having power, the challenges of food shortages in the country for which we have to respond and requires taking scare resources where they were initially intended to issues of matters of life and death,” Dr Ng’andu said.
“I also want to make mention that in preparing this budget, we used K15 to the dollar as the exchange rate. And also, it was prepared from the background that we will reduce the debt stock in the course of the year. So, the quantum that of the loan size will be less than it is at the moment. So, we think with those points I have mentioned, we should be able to implement the budget as planned.”
And closing debate on the constitutional and statutory expenditure, Dr Ng’andu assured Parliament that he would present detailed measures of reducing the debt burden next February when the House reconvenes.
Zambia’s external debt stock hit to an unprecedented US $10.23 billion by June 30, 2019, while domestic debt equally jumped to K60.3 billion compared to K58.3 billion by the half-year period.
Government debt is expected to rise by nine percentage points this year, driven by high fiscal deficits and large currency depreciation, according to the World Bank.
“I need to indicate that on the issue of debt, government has been very candid about the position that we are in. When I came to this House to present the budget, I made mention of the fact that the fiscal space was constricted and that we will try our best to begin to work on reducing the fiscal space and a number of measures will presented to this House. We did mention that the will be a slowing down on external debt contraction; in fact, the process we have reached is one where there is no more external debt contraction; whether it is concessionary debt or commercial debt. That represents a stop in the process,” said Dr Ng’andu.
“There is also a cancellation of some pipeline loans. Now, this is something that I will be representing to this House when we come back in February; the full and comprehensive detail of the measures that we are taking in this space to reduce the debt situation. And also to see the issuance of guarantees in some cases as stage two of the process to begin to engage the creditors in a view of restructuring the loans so that we can create additional space. So, all the measures are being taken to deal the debt situation.”
The House passed seven other bills that included: the Supplementary Appropriation Bill, 2019; the Electricity and Energy Regulation Bills; Property Transfer Tax; Value Added Tax; Income Tax and Customs and Excise Amendment Bills.
Later, Vice-President Inonge Wina moved a motion to adjourn Parliament Sine die.