By Patson Chilemba
Former Commerce minister Bob Sichinga says the UPND administration will struggle to finance what he describes as their good pronouncements because the country’s major mining sector is only contributing K9 billion to the K167 billion budget.
Speaking with Daily Revelation on the 2023 national budget presented by Finance minister Dr Musokotwane last Friday, Sichinga said the UPND administration is struggling with a lack of finance while wanting to meet costs and expectations of the people.
He said looking at the budget from the general pronouncements, the socio and political point, many of the things the administration said were very good, but the important thing was to focus at the structure of the economy.
Sichinga said he was looking at the table of content, containing the revenues and expenditure, saying this was not just the problem of the current government but it has always affected the previous governments as well.
He said the total budget for this year was K167 billion, which was just over $10 billion, saying looking at the functions, the general public services accounted to K66 billion representing 40 percent of the total budget, defence at five percent, public order and safety is nine percent and environmental protection one percent, health 10.5 percent, education 14 percent and social protection five percent.
Sichinga said all these were desirable as they were pointing towards the right direction in terms of where the country should spend the money, but the question was where the money to finance the same programmes will come from.
He said looking at the revenues, domestic revenue was K111 billion, and that all the taxes put together were only giving about K93 billion to the treasury and that the known taxes were K18 billion.
“How much of it is coming from the mines? K9 billion. What does that represent? Eight percent. We are a mining country, where would we expect the revenues to come from? From mining. And I am saying to you just look at the resource envelope on page 49, it’s telling you that of the domestic revenues, what you are going to get locally is K112 billion, of that amount what is coming from your main activity that you do as a country, which is mining? It’s eight percent,” Sichinga asked. “Or if you want to use another term it’s K9 billion. K9 billion, out of what? K112 billion…let me now say to you look at the summary at the bottom which says total domestic financing, what you are generating locally, is about K16 billion. What is the external financing? It’s about K40 billion…you are a banana republic.”
Sichinga said the country was reliant on being financed from outside despite being a mining country.
On the expenditure side, he said the money going to the expenditure side of the economy was K35 billion, about 21 percent but the money being spent on the general public services which includes debt servicing is 40 percent of the budget, saying this won’t yield anything.
He said Mopani produced 25,000 metric tones last year, yet only about 5000 belonged to Zambia and the remaining 20,000 with Glencore saying however, that the current government was not to blame but decried was he described as a stupid arrangement by the Edgar Lungu PF administration.
But Sichinga said UPND administration should be looking at the macro side by changing the way matters were handled.
He said whatever Zambians aspired for, the money must come from the country’s main activity, mining, arguing why the UPND administration could not allow Mopani, which is currently owned 100 percent by Zambia, to go into the market and borrow and sort out the issue of the 80 percent going to Glencore.
“Baletulila amasuku pamutwe, Glencore is making money over our heads because of what Lungu’s PF did, just stupid things they did. Why would they do that? Why would they sign an agreement like that? Because those guys were pulling out?” Sichinga wondered. “And that’s exactly my fear, why would Glencore pull out and you expect that you are going to attract other investors? How is that possible?”
He said Mopani should be allowed to borrow money to increase their production, which he said should not be going to Glencore, but should be sold by Zambia to customers all over the world.
He said only by doing so will the country secure value addition in order to also create the jobs and generate the profitability.
Sichinga said every president and minister should be devising ways of how to utilize the biggest industry to get the much needed revenue to finance development in this country.
“And that’s why any minister, every president that comes to the throne should be aiming to do that,” he said.
But put to him that he served as a minister under late president Michael Sata and why he did not advise on the same things he was advising now, Sichinga said he gave the same advise, and even urged against selling row copper to the outside, something he said was implemented, only to be reinstated by then Finance minister Alexander Chikwanda under the tutelage of Edgar Lungu after Sata’s demise.
He said he could only go so far as he was neither finance minister nor president, adding that even then, president Sata was not too well for the better part of his presidency.
Sichinga said late Chikwanda would bring the huge yellow book for one hour, which he said was impossible to discuss within the given timeframe.
“That’s why I am saying based on that experience I am now giving advice that if I was doing it the second time, if I was Minister of Finance, if I was President this is how I would do it,” Sichinga said, and that there were many good people in the current administration who may not not have their way.
He said even the Sata government he served under should have done better than this.
“And those that were in cabinet know very well what my position was. There was a time when people were now pushing and saying no mwiladonsana naba president. I said no sir, I am not going to do that. For example there was no money provided for payment to farmers, I said how do you expect us to operate, when I was Minister of agriculture. And there was a deficit of $45 million which I needed,” said Sichinga. “So I was not minister of finance, what was I expected to do? I should resign? So if I resign then there is no voice which also says no we should not be doing this. So it’s not that way where you say people on moral grounds they resign. Yes you can resign. The fact that I went though that have given me sufficient confirmation of my experience that maybe those that have come after us can do a better job and hence I am giving that particular advice.”
