AS the Nation is eagerly waiting in anticipation of how the national resources will be utilised next year, the Economics Association of Zambia (EAZ) has laid out its key expectations for the upcoming 2025 National Budget.
Finance minister Situmbeko Musokotwane is scheduled to present the 2025 national budget today at a time when the country is grappling with a drought, high cost of living, unstable exchange rate and an energy crisis which has left citizens in prolonged hours without electricity.
In line with today’s presentation, EAZ has urged the government to prioritise domestic revenue financing, focus on key sectors like energy, mining, agriculture, and manufacturing, and promote non-traditional sectors such as logistics.
EAZ President Dr Oswald Mungule, emphasised the need for the budget to address the country’s unsustainable debt levels and build resilience against economic shocks.
“The 2025 budget should place a strong emphasis on increasing domestic
revenue financing, aiming to reduce Zambia’s dependency on external borrowing. This is crucial for improving the country’s fiscal sustainability, especially in the context of its current unsustainable debt levels,” Dr Mungule shared.
“We advocate for the government to target domestic revenue contributions of at least 80 percent of the total budget. This would involve expanding and diversifying the tax base
through progressive measures that capture revenue from a broader spectrum of
the economy, including previously under-taxed sectors.”
He also called for a review of the Constituency Development Fund (CDF) administration to ensure more efficient and effective use of resources.
“A rethinking of the CDF model is necessary to ensure that funds are used in a way that supports sustainable development, particularly in sectors like infrastructure, education, and healthcare, where long-term benefits can be realised.”
“By ensuring that CDF allocations are aligned with national priorities and closely monitored, the government can prevent wastage and ensure that funds truly benefit the population. This will require improved oversight mechanisms and better coordination between national and local authorities to ensure efficient use of resources,” added Dr Mungule.
He said the 2025 budget must be a decisive tool in promoting economic resilience and inclusive growth by focusing on these key areas so that the government can lay the foundation for a sustainable and prosperous future for Zambia.
Furthermore, Dr Mungule reiterated the need for the 2025 budget to adopt an export-led growth strategy as it is a cornerstone for Zambia’s economic transformation.
“Key to this strategy is the development of a steel-led manufacturing economy, driven by Zambia’s rich mineral resources. Government incentives, such as tax breaks, reduced
import duties on manufacturing equipment, and targeted investment in export oriented industries, are essential to driving manufacturing growth.”
He also called for the budget to align with Zambia’s medium-term plan (2025-
2027) and the broader National Development Plan.
“This alignment is key to ensuring that budgetary decisions are not only responsive to current economic challenges but also forward-looking, with a focus on long-term sustainability and growth, said Dr Mungule .
“To achieve the targeted 5 percent GDP growth next year, the budget must address critical issues such as climate change, food security, and water scarcity, which have the potential to disrupt Zambia’s socio-economic stability.”
By Moses Makwaya
Kalemba September 27, 2024
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