Lungu moves to cut govt spending


President Edgar Lungu has announced wide ranging austerity measures in a bid to reduce the cost of running government.
He says the measures are necessary in view of the current budgetary pressures and in order to bring the country back on the path of economic stability.
Speaking during his first press conference since assuming office in Lusaka this afternoon, President Lungu has in this regard restricted foreign travel by Ministers, government and quasi-government officials to essential meetings only with the size of delegations restricted to the barest minimum.
President Lungu has since directed government ministries, provinces and spending agencies start utilizing the skills and resources available in the country’s missions abroad.
He has further directed that local travel by Ministers and other public service officials be significantly minimized.
President Lungu has also suspended the establishment of new missions abroad and deferred the establishment of a national airline until such a time that the economy is able to afford the high establishment cost.

President Lungu has further directed that all government ministries, provinces and spending agencies cease the procurement of or the entering into contracts for new works including in the road sector.
He says focus should be on the completion of ongoing projects.
President Lungu says there is need to realign the financing of the ambitious infrastructure development programme to ensure budgetary sustainability.
And President Lungu has noted with regret that inflation is artificially accelerating due to the dollarization of prices, a practice he says is illegal and immoral.
He has since appealed to businesses in the country to with immediate effect stop pricing their goods and service in dollars.
He states that there is no justification in dollarizing the market.
Mr. Lungu has further directed the Bank of Zambia and the Ministry of Finance to ensure that this pronouncement is backed by law.
Meanwhile President Lungu says failure to adhere to cost reflective pricing in petroleum procurement has had a negative impact on the budget.
He says by the end of 2015 government would have spent in excess of US$300 million about K3.6 billion in subsidizing fuel pump prices.
Mr. Lungu says an additional US$200 million approximately K2.4 billion is in arrears will have to be paid next year.
He states that this is clearly unsustainable.
The Head of State has since directed the ministries of Energy and Finance to sit down with the ERB and proposal measures in the petroleum pricing which Cabinet can look at to reverse the current trend.
President Lungu has further directed the ministry of energy and water development, the ERB and ZESCO to implement a new electricity tariffs schedule and progressively move to full cost reflective tariffs thereafter.
President Lungu has also announced that in government’s resolve to improve the power supply situation in the country, he will this Saturday be launching the 750 Mega Watts Kafue Gorge Lower hydropower station.
He emphasized that this is the first major investment the country is making in 40 years.