By Sean Tembo – PeP President
- Targeted GDP growth rate at 3.5% is too low and not ambitious enough especially given the fact that we are coming from an era of economic contraction.
- a target of 3 months import cover for GFR is too low considering the fact that we are currently at 5 months import cover.
- the target of increasing domestic revenue to 21% of GDP is ambiguous because domestic revenue is a wide term. The minister should have specified targets for tax-revenue and non-tax revenue.
- a target fiscal deficit of 6.7% of GDP is an admission of lack of fiscal discipline. A fiscal deficit should never be planned. It should arise due to unforeseen circumstances.
- Budget is inconsistent. Current domestic debt is K189 billion, only K27.4 billion has been allocated for liquidating domestic debt of which additional domestic debt amounting to K24.5 billion will be acquired during the fiscal year (K189bn-K27.4bn+24.5bn = K186.1bn ) and yet the target for domestic debt is indicated as 5.2% of GDP (5.2% x K466.3 billion = K24.3 billion). The targeted domestic debt (K24.3 billion) and the projected domestic debt based on the figures provided (K186.1 billion) are two totally different figures. In other words, the budget is incoherent.
Additionally, it is a contradictory budget i.e it says Govt will spend K27.4 billion to pay off domestic debt but will also acquire new domestic debt amounting to K24.5 billion. Only the net amount of K2.9 billion should have been reflected on the expenditure as the total amount of domestic debt paid off. Otherwise the budget is wrongfully inflated, which is a misrepresentation. The true size of the 2022 National Budget when you remove duplicated figures is K148.5 billion and NOT the K173 billion presented by the Minister.
- Allocation of K3.1 billion in the budget towards liquidation of domestic arrears that stand at K46.9 billion is too small as it will take at least 15 years to pay all Government creditors. Is the UPND administration telling Zambians who supplied food to schools to wait 15 years to be paid?
- Amount of K350 million allocated to empowerment funds for SMEs too small to have an impact on economic growth.
- About K8.5 billion allocated towards handouts compared to K350 million allocated to economic empowerment means that the dependency syndrome will only grow bigger among our people, at the expense of self-sustainability.
- The budget will be 29% funded by borrowing which is not sustainable considering that we are heavily indebted already.
- The increase in the PAYE exempt threshold to K4,500 is appreciated but the upper band rate of 37.5% for amounts above K6,900 is still too harsh to employees.
Overall, the 2022 national budget is not very different from the national budgets which the PF administration prepared in the past 10 years.