WHY THE UPND ADMINISTARTION MAY PULL AN ECONOMIC DELIVERY SUPRISE
BY FRANCIS CHIPILI – BUSINESS AND POLITICAL ANALYST
THEME: “STIMULATING ECONOMIC GROWTH FOR IMPROVED LIVELIHOOD”
There is no doubt that Zambia’s economy requires some economic catalytic reactors in order to boost its growth. Our economy has recently experienced negative growth, stagnation due to global as well as local factors.
Majority of the Zambian people including businesses are struggling for survival.
The theme of “stimulating economic growth for improved livelihood”, therefore fits in as all economic players are pursuing better survival.
In my review, I shall focus on tourism, agriculture, agro processing including value addition, social protection and environmental sustainability.
Zambia’s top developmental priority sectors are agriculture, tourism, mining, manufacturing and energy.
2023 BUDGET POLICY P PRONOUNCEMENTS
Zambia’s tourism sector remains mostly untapped. Most of the tourist destination localities remains unexploited due to accessibility challenges as well as entry barriers such as cost.
The announcement to suspend customs duty on selected fixtures, fitting, capital equipment, machinery will provide the necessary boost to simulate sectorial investment and encourage the upgrading of hotels, lodges, restaurants as well as high end bars. The importation of state of the art equipment needed in the tourism sector will position the industry to compete favorably with other alternative international tourist destinations. This policy will result in a modernized tourism sector in Zambia.
Further the proposed waiver on visa requirement for selected high tourist generating countries is absolutely a “WOW” strategy, that will result in increased tourists arrivals in the country. The increase in tourists arrivals will result in improved local economies of the various destinations across the country. Hospitality establishment will eventually develop appetite to hire additional labor force to sustain quality service deliver. Increased tourists arrival will equally aid the exchange rate stability and lower pressure on the Kwacha.
AGRICULTURE, LIVESTOCK AND FISHERIES
In his presentation Hon. Situmbeko Musokotwane underscored the importance of the agricultural sectors in Zambia. The minister acknowledged the critical fact that many of the citizen’s livelihood across the country is drawn from various agricultural undertakings. This sector equally feeds the industries with raw materials needed to produce both consumables and non-consumable products.
RESUSCITATION OF FARM BLOCKS
This policy direction if fully implemented can position Zambia greatly in becoming a global food supplier, given the abundance of water resources, fertile land that remains underutilized.
Zambia must leverage on its distinctive advantage of agricultural ecological regions. Its therefore critical that government urgently facilitate the connection of all farm blocks to the national power grid. It’s important that government equally pays particular attention, during the selection of core venture farms. Some of the out grower schemes in some part of Africa and elsewhere have been used to propagate modern day slavery, others have been used as a strategy to grab Africa’s farm land by foreign countries through multinational corporations, foundations and other vehicles.
GLOBAL AGRICULTURE MARKET
The global population as forecast by the UN is projected to reach 8.5 billion in 2030 and to further increase to 9.7 billion in 2050. This is a great market that Zambia’s current agricultural policies must aim to appropriately position for. Government must continue to engaging China in lobbying for the expansion of agricultural products that Zambia can export. Global high food demand is an opportunity Zambia must aggressively exploit.
Government must actualize the policy pronouncement of setting up national bio security surveillance centers across the country by working with various stakeholder associations. Equal priority must be given to all livestock subsectors. Just as government must not just focus on crop production only.
The minister proposed to introduce income tax concessions to attract corn starch processing in the country. However, the initiative should have gone further to facilitate agro-value addition by small and medium scale enterprises. Tax waiver incentives on all food processing, value addition, packaging, butchery, cold storage equipment used by SMEs should have been proposed in the 2023 budget.
Social Protection as defined by the United Nations Research Institute for Social Development is primarily concerned with preventing, mitigating and overcoming situations that adversely affect people’s well-being. The goal of social protection is to implement programs and policies that are aimed at reducing poverty and vulnerability to social economic risks such as unemployment.
The 2023 national budget therefore responds to the citizens needs for social protection by ensuring vulnerable citizens are not excluded from attaining their education goals. The Constituency Development Fund has been used to sponsor viable but vulnerable young citizens to school grade one to twelve. The reintroduction of meal allowance for university students further cushions them from starvation as has been the case after the previous administration abolished the meal allowance. There has been a general appreciation of the social cash transfer administration by many beneficiaries across the country.
It’s very unfortunate that government didn’t see the need or importance of increasing the budget allocation for sector. This sector unfortunately has continued to receive more of lip service than practical policy implementation. The 2023 budget allocation for this important sector is way to small given the devastation impact of a poorly managed environment. The effects of global warm are real and government must be seen to demonstrate its seriousness to mitigate negative effects of global warming by ensuring the sector is receiving resources that are adequate or proportion to its needs.
OTHER NOTABLE BUDGET ALLOCATION BY FUNCTIONS
It’s quite interesting to see the UPND administration increase the budget allocation for public order and safety from 2.0% in 2022 to 3.1 % for the 2023 budget just a year after the general election. I will be interested in knowing the rational for that. All budget allocations by function have been increased such as Defense from 4.4% to 4.9%, health 8.0% to 10.4%, Education 10.4% to 13.9%, Economic Affairs 19.5% to 20.9%.
WHY THE UPND ADMINISTRATION MAY PULL AN ECONOMIC DELIVERY
• Once the CDF administration law is amended constituencies will see an increase in economic activities, communities will have liquidity.
• The resuscitation of farm block and leveraging on agricultural export markets particularly the Chinese market will be a game changer that will positively transform as well as position Zambia’s agriculture sector.
• Increased agricultural production will awaken the processing and manufacturing sectors such as food processing as well as the textile industry.
• The UPND administration in the 2023 budget has demonstrated that it listens to intellectual criticism and is ready to act on citizen’s input on economic governance matters.