THE Government is proposing to establish a Local Government Equalisation Fund (LGEF) to be announced in the 2015 National Budget that will help put local authorities on a secure financial footing, Secretary to the Treasury Fredson Yamba has said.
Releasing the 2015-2017 ‘Green Paper’ detailing the proposed policies underlined in the Medium Term Expenditure Framework (MTEF) in Lusaka yesterday, Mr Yamba said the LGEF, which would be based on a domestic revenue sharing mechanism.
The LGEF) would provide a predictable, stable and more sustainable source of financing for local development and local government services.
“In order to prepare for the effective devolution of functions to councils, the Government will put in place an equitable, efficient and transparent inter-governmental fiscal regime. Further efforts that are aimed at ensuring that councils progressively dismantle their debt and keep current with their statutory and contractual obligations will continue,” Mr Yamba said.
Mr Yamba said the MTEF was premised on the Government’s unwavering commitment to enhance inclusive growth and advance social justice, so that Zambians could benefit from the impressive economic growth that the country had continued to record.
According to the MTEF, the 2015 Budget to be presented, to the National Assembly by Finance Minister Alexander Chikwanda on October 10 this year, projected economic growth to exceed seven per cent per annum from 2015 onwards while inflation would fall to below six per cent by 2017.
Mr Yamba called for enhanced participation in the consultative process towards preparing the 2015 Budget.
“It is a consultative document and I sincerely hope that all stakeholders would take time to study it and to relay to the Ministry of Finance their thoughts and reflections on its content so that these can be considered as the 2015 Budget is finalised,” he said.
He said it was Government’s objective to ensure that Zambians benefited from the fruits of the nation’s economic development by facilitating further broad-based economic growth through creation of
job opportunities, especially for the youth and improving access to basic socio-economic services.
This would also be achieved through continued implementation of enhanced levels of investment in major socio-economic infrastructure, continued structural reforms to diversify the economy and reducing the cost of conducting business.
Mr Yamba said the MTEF would build upon the favourable macro-economic performance recorded over the last five years, which had been evidenced by the high economic growth rates, attainment of the single-digit inflation and positive trade balances.
“The specific broad economic policy intentions include promoting high growth in the labour-intensive sectors of agriculture, tourism, manufacturing and construction and continuing to promote Zambia as an investor-friendly destination and implementing structural reforms aimed at reducing the cost of doing business,” he said.
Times of Zambia