MINISTER of Finance Alexander Chikwanda today presents the 2016 national budget that is expected to be an antidote for economic shocks arising from the fall of commodity prices across the world.
All ears will be cocked in the direction of Parliament where Mr Chikwanda will give the direction Government will take to handle issues ranging from mining and infrastructure development to fiscal management and pay as you earn (PAYE).
One such commodity is copper, which is Zambia’s major export and accounts for 70 percent of the country’s gross domestic product.
The 2016 budget is expected to be escalated from the K46.7 billion presented last year, the bulk of which was locally sourced.
The budget is also drawing lots of attention as it comes in the wake of a sharply depreciated Kwacha, which is trading at just under K11 to US$1. At about this time the rate was around K7 to US$1.
This partly arose from a reduction in the supply of foreign exchange to the market particularly from the mining sector and subsequent speculative behaviour which in response the Bank of Zambia tightened monetary policy through a number of measures, among them an upward adjustment of the policy rate.
Inflation was, however, maintained within the single digit of around 7.8 percent within the first nine months of 2014, which is similar to what is obtaining this time around.
Another area of critical interest is how much finances Government will allocate to the education and health sectors, which usually receive a lion’s share of the budget.
The education sector was allocated K9.4 billion or 20.2 percent of the total 2015 national budget, largely aiming at reducing the teacher-pupil ratio by recruiting 5,000 teachers and sustaining the current establishment.
The health sector received K4.5 billion or 9.6 percent of the total 2015 national budget with a huge chunk of the amount channelled towards the construction of health infrastructure throughout the country.
On PAYE, the workers are highly expectant of a rise in the threshold from last year’s K3,000 which had increased from K2,200 the previous year.
Of more interest will be the end-year overall budget deficit which in 2014 was projected to be within the target of 5.5 percent of GDP, down from 6.5 percent in 2013 while it was anticipated to further fall to 4.6 percent of GDP in 2015.
Zambians and indeed all stakeholders are anticipating efficacious measures and expenditure rounding all sectors to stimulate the country’s economy which has succumbed to the declining global economy.
From Non-Governmental Organisations Co-ordinating Council (NGOCC), the umbrella body of NGOs, other expectations abound.
NGOCC executive director Engwase Mwale has asked Government to introduce production-based mineral royalty taxes.
Ms Mwale said these should be commensurate with what the mining companies are making out of the minerals if Zambians, especially the poor, are to benefit adequately.
In its tax and non-tax proposals, NGOCC observes that the current mine tax obligations are far below the expected contributions to the economy for them to substantially contribute to economic growth and job creation.
The proverbial fingers will remain crossed as Mr Chikwanda, fondly known as ABC, unbundles the contents of the traditional copper briefcase which is expected to provide for over 13 million Zambians despite its conspicuous small size and sleekness!