By Jane Chanda
Finance minister Dr. Situmbeko Musokotwane says Zambia needs to increase its mine production to guarantee economic growth and improved lives.
Dr. Musokotwane noted that since the UPND came into power, the country had recorded tax cuts amounting to K9 billion which were generated through proposals submitted prior to the 2024 national budget presentation.
Speaking at the Mulungushi International Conference Center during the Town Hall Forum on the 2024 national budget performance and economic development in Lusaka yesterday, the minister said increasing mine production was aimed at boosting economic growth and development in Zambia.
“This is the only way the country is guaranteed of economic growth and improved lives,” he said.
The minister said the government collected K151.2 billion in terms of revenue and grants, which was 4.8 percent higher than the target of K149.8 billion.
“The debt restructuring agreement will enable the country to pay its official creditors US$750 Million for the next ten years compared to the US$ 6.3 billion that was supposed to be repaid in the same period,” Dr. Musokotwane said.
According to the minister, this significant reduction in debt repayment would free up resources for developmental projects and investment programs that would generate revenue for the country.
Dr. Musokotwane reported that Zambia made significant progress in debt restructuring, with 90 percent of the country’s debt now restructured, and as of September 2024, the public and publicly guaranteed debt stood at $25.5 billion.
“Today’s agreement with the Steering Committee brings us closer to the completion of Zambia’s debt restructuring, edging us nearer to unlocking substantial resources vital for our developmental aspirations,” said Dr Musokotwane.
And MFNP acting permanent secretary Mulele Mulele said the government spent K200.2 billion in 2024, exceeding the target of K177.9 billion by a significant 31.2 percent, largely due to increased allocations for vital areas, including social benefits, interest payments and personal salaries.
Mulele added that the government’s overspending was attributed to several key areas, notably social benefits, including the social cash transfer, which exceeded their target by 23.6 percent to reach K10.4 billion.
He noted that the government’s salaries totaled K53.3 billion, just 0.9 percent above the target, while other areas, such as the use of goods and services, saw significant underspending, coming in at K11.4 billion, a substantial 36.0 percent below the target.
“This underspending has led to the accumulation of arrears, with transfers and subsidies falling short by 15.2%, totaling K23.6 billion, below the target of K27.8 billion, and Personal emoluments which amounted to K53.3 billion, 0.9% above the target,” Mulele said.
He further explained that the government spent less than budgeted on goods and services, but this resulted in the accumulation of arrears.
“Government spent less than budgeted on: Use of goods and services at K11.4 billion, 36.0% below the target,” Mulele said. However, the government’s revenue performance was more promising, with total revenues and grants collections reaching K151.2 billion, 4.8% higher than the target of K149.8 billion,” he said.
On the revenue side, Mulele said tax revenue performed well, totaling K118.8 billion, 3.5 percent above the target of K114.8 billion.
He said non-tax revenue also exceeded expectations, reaching K29.5 billion, 12.1percent above the target of K26.3 billion.
Mulele, however, said grants were 4.6 percent lower than anticipated.
“This was mostly due to over-performance both under Customs and Duties and VAT,” Mulele explained, attributing the revenue growth to strong performances in customs, duties, and value-added tax (VAT).
The permanent secretary said the government’s budget deficit for 2024 stood at 2.7 percent of the country’s total income, which was much better than the targeted 4.8 percent, showing a significant improvement in how the government managed its finances.