Zambia National budget 2013, K32.2 trillion
THE Government next year proposes to spend K32.2 trillion out of which 76.6 per cent will be locally sourced.
Presenting the 2013 National Budget to Parliament today, Finance Minister Alexander Chikwanda said that the 2013 budget will aim to deliver real economic results that will be felt by all Zambians.
“The budget proposed for 2013 launches Zambia on a new path of inclusive development and societal transformation, where the benefits of growth are not merely recorded in dry statistics but felt tangibly by all Zambians,” Chikwanda said in his budget speech.
Mr Chikwanda said K24.7 trillion, or 76.6 per cent of the total expenditure would be financed locally while grants from cooperating partners would account for K1.5 trillion.
The remaining K5.6 trillion or 18.4 per cent of the expenditure would be raised through domestic and external loans.
Mr Chikwanda said out of the K32.2 trillion the economic affairs would get the single biggest chunk of K8.9 trillion or about 27.6 per cent followed by the general public services which would get K8.4 trillion or 26.2 per cent of the total budget.
A total of K5.6 trillion has been allocated to the education sector in the 2013 National Budget that was presented. Mr Chikwanda proposed that K5.6 trillion be allocated towards the education sector for the purpose of providing quality education and skills training to children and the youth.
Mr. Chikwanda said that this represents a 15.8 percent increase over the 2012 allocation.
He said the sector has been allocated K393.3 billion for the development of secondary school infrastructure across the country.
The Minister said the move is government’s intention to revamp secondary and tertiary education in order to significantly improve the progression rate of pupils that are being produced from primary schools.
He explained that a further K475.1 billion has been earmarked for operations and expansion of infrastructure in universities, colleges, and trades training institutions.
Mr. Chikwanda added that in addition to the funds allocated to the trades training institutions for training an additional K50 billion to empower the unemployed and vulnerable youth with vocational skills will be given.
Mr. Chikwanda also said that he has allocated sufficient resources to facilitate the net recruitment of not fewer than 5,000 teachers.
The rest of the allocations are: housing and community amenities (K1 trillion), social protection (K892.2 billion), recreation, culture and religion (K252.3 billion) and environmental protection (K74.2 billion).
“Sir, it is as unacceptable as it is unsustainable that in much of the post-independence era recurrent expenditure has eclipsed the development budget.
“Steps have been taken in the recent past to remedy the situation and a major aim of the 2013 National Budget is to further reorient the budget towards increasingly enhanced capital expenditure in a wider scope of sectors,” Mr Chikwanda said.
According to Mr Chikwanda the 2013 National Budget was the beginning of the bold steps towards giving practical effect to the attainment of inclusive economic growth.
To finance the K32.2-trillion budget Mr Chikwanda projects to raise K23.5 trillion or 19.4 per cent of the Gross Domestic Product (GDP) from taxes, K1.2 trillion from non-tax revenues and K1.8 trillion from domestic borrowing.
The government expects to raise K5.6 trillion from foreign grants and financing, out of which K1.5 trillion will be in form of grants and K4.1 foreign financing.
“Mr Speaker, to support the expenditure I have outlined above, Government expects to raise a total of K32.2 trillion in revenues and financing.
“Domestic revenues will account for 76.8 per cent, support from cooperating partners will account for 4.7 per cent and domestic and foreign financing will account for 18.4 per cent,” he said.
Of the total income tax of K12.8 trillion which the government projects to raise during the year, K4.7 trillion will be in form of company income tax while Pay As You Earn (PAYE) will contribute K5 trillion and the mines K1.9 trillion through mineral royalty.
The Value Added Tax (VAT) will account for K6 trillion with K5.5 trillion being from imports and K500 billion from domestic transactions.
Under the customs and excise duty, K2.1 trillion would be from the custom, K2.5 trillion from excise and K659 billion from fuel levy.
Mr Chikwanda said he was confident that the revenue measures would support the policies and strategies to meet the 2013 macroeconomic objectives and those for the medium term.
“These measures aim to foster local value addition, reduce the cost of doing business, encourage savings and investments and streamline the tax incentives and make the tax system more equitable, at the same time generating adequate resources for development,” Mr Chikwanda said.
The government has maintained this year’s real GDP growth target of above seven per cent but reduced the end-year inflation target to not more than six per cent from not more than seven per cent.
Other macroeconomic targets for 2013 include the domestic revenue of at least 20 per cent of GDP, limit the overall fiscal deficit to 4.3 per cent, maintain gross international reserves of at least four months import cover and create 200,000 decent jobs.