By Chinoyi Chipulu
Socialist party leader Dr Fred M’membe has described the 2025 nation budget as a political statement that has failed to address the challenges Zambians are going through.
And M’membe questioned the UPND administration’s announcement projecting economic growth at 6.6 percent in 2025 when loadshedding alone had curtailed economic growth in the country with many businesses scaling down.
Speaking at a press briefing in Lusaka, Dr M’membe said the budget had failed to restore hope for Zambians for a better tomorrow.
He said the national budget had failed to address the country’s challenges because it had a lot of inadequacies.
“We have taken time and reviewed the 2025 national budget presented by the UPND government. It was our hope that we would receive a budget that would address the hardships, the pain, the suffering business that our people are going through,” he said. “A budget that will restore hope for a better tomorrow. One we would have thought was going to be a simple and logical thing to do but shocking they presented a political budget or a political speech.”
M’membe said the government had set an unattainable Growth Domestic Product (GDP) growth rate as the budget sets ambitious growth rate targets for 2025 aiming for the 6.6 percent growth rate, an increase from 2.3 percent in 2024.
He wondered how a GDP of 6.6 percent in 2025 could be attained when the economy was contracting.
“Loadshedding alone has significantly curtailed economic activities in the country with most businesses either scaling down production of goods or provision of services or literally closing down. Monitory policy measures presently prevailing are contractionious. So how will this support GDP growth, where will GDP growth come from?” he said.
He said the country had high interest rates and high statutory reserve ratios and tightened liquidity in the market.
“All these can not be recipes for growing an economy for GDP growth. There is no tangible to credible plan on how this GDP will or can be achieved,” he said.
He said these targets could only be achieved when the country invested in the energy sector and agriculture productivity.
“And there is also need to stabilise the exchange rate. These are critical to the budget for it to achieve the target they have set themselves in the 2025 budget. There can be no consumption without production, there can be no consumption without investment. Our own prediction is that even the 2.3 percent GDP growth in 2024 will not be attained,” he said.
“Given the economic downward, our prediction is a 1.7 percent growth rate in 2024.”
He said the government aimed to fund 80 percent of the 2025 budget through domestic resource mobilisation warning that this approach could crowd out the private sector from the credit market, as the government would need to raise funds through the issuance of government securities at increasing yield rates.
“Tax revenues will dwindle as the economy contracts. So where will this 80 percent domestic revenue mobilisation come from? Another pie in the sky. A notable increase in VAT collection is projected rising from K36.4 billion in 2024 to K48.3 billion in 2025. This is amid stressed homes and local businesses,” he said.
M’membe said this meant that the government was telling people to brace themselves for more stress and hardships.
“The UPND government intends to introduce a 10 percent exercise duty on betting in 2025. Mukachula ngatamuposeleoko amano (You will suffer of you are not careful),” he said.
M’membe also said debt servicing was projected to grow by 22 percent, reaching K217.1 billion in 2025, saying that while it was sold as a solution, it had only led to increased allocations for debt servicing, from K38.9 billion in 2024 to K54 billion in 2025.
He said debt restructuring came with challenges and this was being seen now.
“Domestic debt has also ballooned and it’s mopping up resources for investments, it is a suction pump. Government is taking all the money that local investors are supposed to access and invest in production of goods and services,” he said.
M’membe questioned how the economy would grow when the private sector was being crowded out of the market.
