The long awaited 2017 Annual Budget for Zambia was presented on November the 11th. Despite Zambia experiencing rapid economic growth, many Zambians are yet to have seen their economic situations improving.
One of the major changes for taxpayers is the increase of the non-taxable income threshold by 10% to K3300.00 which, while welcome, is below the rise in the cost of living. This will hit us hard, particularly as the price of fuel has also been increasing since October.
The 5 Pillars
In his budget, the Finance Minister introduced 5 pillars called Zambia Plus to help address ‘economic imbalances’. The aim of Zambia Plus is to improve revenue collection, to enable the country to afford some social protection, promote transparency and good governance, to control public expenditure by adhering to budget lines, thus providing economic stability.
I can’t help but notice that this has the fingerprints of the usual suspects on it, namely the International Monetary Fund (IMF) and World Bank (WB)! Twice my pre-arranged meetings at the Ministry have been cancelled by them. They are apparently going to fund service training for Maths and Science teachers, look at the textbook chain and build some rural Primary schools (Proof that nowadays even the World Bank needs to showcase corporate social responsibility!).
Within the Education Sector, the main focus is to complete infrastructure developments. Over 6000 teachers are needed to fill open places and to reduce the high pupil-teacher ratio. Grants will be replaced by student loans and a public-private Skills Development Fund established for entrepreneurial vocational education.
Small and Medium Enterprise.
As well as offering greater social protection, there are moves to improve matters for small and medium enterprises with a Credit Guarantee which offers credit at more affordable interest rates. Irrigation is to be helped to increase the production of non-traditional exports such as cotton, rice and soya beans. The aim is to create 100,000 decent jobs.
Water and Sanitation
Many Zambians do not have access to safe drinking water or decent toilet facilities. There is therefore an objective to increase rural access to safe drinking water from the current 51% to 55% and to raise the amount of households having toilets. There is also a bid to promote recycling and waste-to-energy innovations.
Construction and upgrading of health facilities continues with the recruitment and training of frontline health personnel. Ida has spent the last two days queueing in the courtyard of the Ministry of Health with paperwork for the recruitment of staff for the UCZ Health Institutions, along with thousands of other youngsters hoping to get on the Government payroll. The procurement of drugs and medical equipment is another priority, as is the opening of universal compulsory health coverage by a Social Health Insurance Scheme. Provincial satellite cancer centres are planned.
Social and Economic Support
The Social Cash Transfer Scheme is a Government of Zambia programme aimed at reducing extreme poverty and the inter-generational transfer of poverty. It will now extend to 500,000 households, up from 24,000, and the monthly amount of money given will increase by 28%. The Food Security Pack Programme will reach 40,000 vulnerable farmers, up from 30,000. The Public Welfare Assistance Scheme for Health and Education will help 134,000 poor and vulnerable. The School Feeding Programme will be increased from 1 million to 1.25 million pupils. The Women’s Development Programme is now reaching 7,000 women will add 25,000 women each year for the next 3 years, and will provide free sanitary towels to schools in peri-urban and rural areas. That is a summary and round-up of the Social Sector.
The Cost of Living
We regularly follow the Zambian Jesuit Centre for Theological Reflection (JCTR) which keeps a monthly tally of the cost of a shopping basket of basic commodities, known as a Basic Needs Basket, for a family of five in various cities nationwide.
The cost of living for Lusaka as measured by the JCTR Basic Needs Basket (BNB) for an average Zambian family of five has hit a first time high: ZMW5,036.28 (£405.59) in the month of October 2016. The price of mealie meal, beans, green-leafy vegetables, cooking oil, bread, sugar, tea and charcoal have all gone up. The other major economic concern of many Zambians is the expected increase in the price of electricity so that it becomes more ‘cost-reflective’.
Life is difficult at the moment for city and town-dwellers who are struggling with little or no inflation level pay-rises. Often they come home from work to no power and water. This means cooking on charcoal and doing washing at unusual times to make use of the water when it is available. There is a familiar ZESCO advert on power-saving that the ZNBC TV. broadcasts which uses the slogan: Let’s tekanya (let’s get prepared, let’s organise ourselves) and that’s what most Zambians uncomplainingly, resourcefully and almost fatalistically are doing ready for hard times ahead….