Finance inside Zambia The 2020 national budget

Zambian finance minister Bwalya Ng’andu on Friday unveiled the 2020 national budget, which he said will focus on stimulating the domestic economy.

The US$8,15 billion (K106,0 billion) budget, which represents about 32,4% of gross domestic product (GDP), will have US$,4 billion (K72 billion) coming from domestic revenues, while the balance will be raised through domestic and external financing.

The finance minister said the budget will focus on stimulating the domestic economy by reducing the budget deficit, rationalising debt contraction, and dismantling domestic arrears, while protecting social sector allocations.

“The budget further seeks to consolidate the austerity measures that the government has been implementing by directing resources and efforts towards stimulating the domestic economy,” he noted.

The key goals of the budget include achieving real GDP growth of at least 3%, achieving and maintaining inflation within the target range of 6% and 8%, increasing international reserves to at least 2,5 months import cover, and reducing the fiscal deficit to 5,5% of GDP.

In the 2019 budget, the government had proposed to abolish value added tax (VAT), and replace it with sales tax.

But the announcement received mixed reactions, with most stakeholders rejecting the new tax, forcing the government to conduct countrywide consultations.

Ng’andu said the government has decided to maintain the VAT tax, based on the outcomes of the consultations.

He added that when unveiling the 2020 budget, the government intends to introduce measures to strengthen the enforcement of VAT.

Zambia’s VAT is levied at 16%, with a registration threshold of K800 000 (N$917 900).

Minister of mines and minerals development Richard Musukwa said the government has no plans of nationalising the mines, but will instead continue promoting a private sector-led mining industry which was anchored on the rule of law.

Speaking when Finnish ambassador to Zambia Pirjo Suomela-Chowdhury paid a courtesy call on him, the Zambian minister said the government has put a high premium on safety, and wants to partner with Finnish firms which are interested in investing in the mining sector.

He then expressed happiness that some Finnish companies have partnered with local firms in the supply of equipment for the mining industry.

On her part, the Finnish envoy said Finnish companies were ready to partner with Zambian minining companies in areas of technology, which will further promote the private sector’s participation in the mining sector.

She said Finnish firms operating in Zambian mines have also prioritised safety. – Nampa-Xinhua

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