‘ZAMBIA SHOULD PRIORITISE GROWTH SECTORS’
GOVERNMENTcan create the needed fiscal space and foster the achievement of the projected growth by reprioritise planned expenditure particularly away from “slow return” debt financed investments in infrastructure.
This is according to the Zambia Institute of Policy and Research Centre (ZIPAR).
ZIPAR Research Fellow, Mbewe Kalikeka, said this would assist Government to manage the 2020 financing deficit and support economic recovery.
Zambia is this year expected to record a financing gap of K26.9 billion due to decline in revenues and increased expenditure.
Mr Kalikela however said this called for re-priotisation of expenditure, especially for debt financed investments in infrastructure.
He said Kalikeka said repurposed funds from infrastructure development could be directed towards identified growth driving sectors such as agriculture, tourism and manufacturing.
This, Mr Kalikeka said, would support growth, create jobs and ultimately improve livelihoods.
He said this during the ZIPAR- Zambia Association of Manufacturers (ZAM) Webinar: Analysis of the 2021 National Budget dubbed Quest for Growth and Resilience in the Face of Mounting Economic Headwinds.
“Nevertheless, it is worth noting that within what would remain as infrastructure spending, rural roads, rural electrification and rural Information Communication Technology connectivity should be prioritized.
“This will support agricultural activities and also take modern social and other economic services to rural areas,” Mr Kalikeka said.
He said the measures put in place to contain the spread of Covid-19 had caused significant disruptions in the country’s real sectors to the extent that Zambia would for the first time since 1998, record negative gross domestic product (GDP) growth.
Mr Kalikeka said even though Zambia had begun to ease its Covid-19 containment measures, uncertainties around the pandemic still remained with growth expected to be slow in 2021.
He said this situation would likely cause domestic revenues to fall as the country spent more to try and contain the damage.
ZAM Chief Executive Officer, Florence Banda-Muleya, urged Government to increase the period requirements for presenting proof of exportation to four from three months.
Ms Muleya further urged Government to increase the period for export Value Added Tax ( VAT) claims under VAT Rule number 18.
"We are also urging the Government to reinstate the implied duty rates under the Duty Draw-Back Scheme," she said.