Commentary 25th September - 2nd October, 09

In about two weeks, Finance Minister Situmbeko Musokotwane will be announcing the 2010 National Budget. This is the first budget to be announced three months before the implementation year. The national expectations are not as pronounced as in previous budgets. The reason is not so much about the change in the budget cycle though that has some bearing.

The main reason is that many people, ordinary citizens and corporate entities, do not think the National Budget provides the platform for everyone to succeed. The National Budget is not only about fiscal and monetary policy and its measures. It is about opportunities for business and household prosperity.

Corporate entities seek for an investment where they maximize value. They look for lower taxes, huge capital investments, business contracts which can reactivate income flows and high consumption levels that have a direct effect on the goods and services they produce.

Workers equally look for a budget that will increase disposal incomes. Given the levels of poverty, the few working Zambians do not only have to pay taxes but will still have to meet the personal needs of their relatives who cannot afford school and medical fees.

Ordinary citizens, especially young people look to the budget for the creation of jobs. Unfortunately, for many years now, the national budget, on account of its size and expenditure priorities, has not performed to the expectation of these categories of people. Many are disillusioned when seemingly pro-investment, pro-worker and pro-poor budgets are announced but with little impact.

The chunk of the revenue is spent on administrative structures of government such as emoluments. The government priorities do not yet appear to be in synch with realities on the ground. The national budgets are not forward looking either. They remain short term instruments for immediate survival with low linkages to long term national development plans.

For the 2010 budget, we expect Dr. Musokotwane to simply bite the bullet and announce a budget that ignores the immediate short term needs of government administrative structures. He should put on the table huge resources that go towards important social investments primarily in education and capital projects such as road networks.

The Minister should reactivate industry by supporting tax levels that help create jobs. All expenditures that gobble resources without any meaningful returns should be curtailed. The weakness about the National Budgets is government failure to stick to expenditure priorities and allocating huge sums of money towards activities that have no real return.

A mechanism should be found about the funding of bye-elections. The National Constitution Commission should end its exercise in 2009 and no gratuities should be paid. We need to streamline expenditures in foreign missions and other activities that Zambia does not have the luxury to maintain. This requires substantial discipline and Dr. Musokotwane has the capacity to take leadership in this direction. All the best!