IN CASE YOU MISSED IT:
Parliament yesterday approved the 2022 National Budget and accompanying #legislation.
The approval of the Budget marks a crucial step towards the transformation of Zambia’s economy by bringing resources closer to people, creating #jobs, eliminating inefficiencies, stimulating growth, and attracting investment.
The Budget was presented to Parliament on 29th October 2021 by the Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, MP.
Policies that support Zambia’s human development are a central part to the 2022 National Budget and the Government can now take steps to invest in education, health, and social protection – which are the cornerstones of economic growth and resilience.
As part of the new Budget, Government has undertaken to eliminate inefficiencies, fight #corruption, target resources into areas with significant growth potential and create incentives for businesses to invest into promising #industries.
At the same time, the 2022 Budget ensures prudent spending by decreasing the budget deficit, limiting #borrowing, and introducing measures to enhance public #finance management at all levels. More importantly, bringing debt to sustainable levels will remain the key priority for Government.
The Minister of Finance and National Planning has reiterated:
“This Budget is an #investment in our country’s future. It is ambitious yet realistic, supporting the New Dawn Government’s path towards Zambia’s #economic transformation. With this budget and all accompanying legislative changes, we will accelerate Zambia’s economic development, enhance job creation, promote local industries, and maximise opportunities for business and our #youth. This is a budget that ensures every Zambian can benefit from the rich endowment of our country.”
The key #macroeconomic objectives that the 2022 National Budget seeks to achieve are:
1) Attain real #GDP of at least 3.5 percent;
2) Reduce #inflation to single digit by end-2022 and to target band of 6-8% over the mid-term;
3) Maintain international reserves of at least 3 months of #import cover;
4) Increase domestic #revenue to not less than 21.0 percent of GDP;
5) Reduce the #fiscal #deficit to not more than 6.7 percent of GDP; and,
6) Limit domestic borrowing to no more than 5.2 percent of GDP.
Along with the 2022 Budget, Parliament has approved an accompanying legislative package which stipulates the following:
REFORM THE TAX SYSTEM
The New Dawn administration is embarking on an ambitious plan to revamp the tax system, making it not only more efficient and effective, but also fairer. The aim is to boost economic activity and stimulate investment into priority sectors thereby creating jobs and improving #livelihoods.
As part of this plan, #Parliament approved the Income Tax (Amendment) Bill, 2021 whose aim is to amend the Income Tax Act so as to, among other things:
a) provide for the deductibility of mineral royalty for corporate income tax assessment purposes;
b) increase the Pay-As-You Earn tax-free threshold for individuals to fifty-four thousand Kwacha per annum; and,
c) reduce the standard corporate income tax rate to thirty percent.
Under the #Customs and Excise Duty (Amendment) Bill, 2021 – the aim is to amend the Customs and Excise Act so as to, among other things remove the export duty on maize.
INVESTING IN ZAMBIA’S HUMAN DEVELOPMENT
The budget supports crucial social spending as part of our drive to invest in human capital. Only by investing in human #capital and protecting the most vulnerable can the nation ensure economic recovery and inclusive, sustainable economic growth.
Key priority areas for the New Dawn administration in the public sector include education, healthcare, social protection and youth employment. The Government allocated 10.4% of the total budget for 2022 to finance #education, 8% for healthcare and 3.6% for social protection.
BETTER SUPPORT FOR ZAMBIA’S #HEALTHCARE INFRASTRUCTURE
In healthcare, the government is recruiting 11,200 healthcare professionals to protect the lives of Zambians everywhere. The budget also envisages improvement of supply management systems to ensure availability of essential #medicines and medical supplies and create specialized healthcare regional centres in partnership with the private sector.
SCALING-UP INVESTMENT IN EDUCATION
The budget will invest significant amounts into Zambia’s education system, building a further 120 schools and recruiting 30,000 teachers. The Government will also provide funding for free education from pre-primary to secondary level, with a special focus on supporting schools in Zambia’s #rural areas.
DECENTRALISING GOVERNMENT EXPENDITURE AND LOCAL SPENDING PRIORITIES
The decision to expand the Constituency Development Fund (CDF) 18 times from K1.6 million to K25.7 million per #constituency opens opportunities for every Zambian community to improve its public service delivery, safeguard #livelihoods and create jobs. This will help local communities invest in priorities that are closest to them.
The Government of the Republic of Zambia remains committed to restoring economic growth and boosting economic activity by eliminating the #unsustainable levels of debt that has been choking the economy.
On 3rd December 2021, the Government reached an #IMF Staff-Level-Agreement that envisages the provision of US$1.4 billion under the Extended Credit Facility (ECF) Programme over the next three years to provide much needed fiscal space, help anchor Zambia’s reform agenda, and facilitate debt restructuring talks with Zambia’s creditors. The Agreement is subject to the IMF Board approval. As part of Zambia’s commitment to equitable treatment of all #creditors and #transparency in its #debt reporting, Zambia will regularly publish its debt figures. The latest debt figures, including a detailed creditor-by-creditor breakdown, can be accessed on our website.
(File Copy Signed)
MINISTRY OF FINANCE AND NATIONAL #PLANNING
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Ministry of Finance and National Planning
P.O. Box 50062,