P R E S E N TAT I O N T E M P L AT E

ECONOMIC POLICY, DEBT AND

BUDGETING PROCESS IN ZAMBIA

BUDGET PROCESS

Open Call Ministry of Finance Parliament Committee and

Approval

The budget is the most important economic policy tool for macroeconomic management and resource allocation for any government. It provides a comprehensive statement of the nation’s priorities. Over the years, the budget has evolved from being a simple accounting tool to a planning and governance document upon which the success or failure of government policy can be evaluated.

Budget Process

Auditing

Drafting

Legislative and Approval

Implementation

Achieve Real GDP growth of 5%

Attain domestic Revenue Mobilisation of at least 17.7% of GDP

Limit overall fiscal deficit to no ore than 6.1 % of GDP on cash basis

Maintain domestic borrowing to no more than 4% of GDP

Build Foreign exchange Reserves to atleast 3 months import cover

Maintain Inflation between 6-8%

Agriculture Industrialisation Tourism Mining

Macroeconomic Objectives

Seventh National Development Plan

Enhance Domestic Resource

Mobilization

Scale up Protection Programs

Raise levels of accountability

and transparency

Minimize Unplanned

Expenditures

Policy Consistency

Zambia Plus Economic Recovery Program

2018 National BudgetGovernment proposes to spend K71.6 billion in 2018

Government has accessed US$50 million for on lending to SMEs. This will create dynamic SMEs that will contribute to growth and jobs.

Energy

2016 2017 2018 2019 2020 2021 2022

Supply (GWh) 12,773 14,894 21,018 21,018 22,118 22,118 34,476

Demand (GWh) 16,764 18,314 19,117 19,944 20,721 21,185 22,021

Energy satiation to normalize after 2

good rainy seasons

New Energy from KGL, BGHES and LRB

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Ener

gy (

GW

h)

Energy Load Forecast, 2016-2022

Supply Capacity

Power Demand

According to Zesco Energy satiation is projected to normalize after two good rain season. This

effectively means load shedding will end.

Energy

0

0.5

1

1.5

2

2.5

3

2010 2011 2012 2013 2014 2015

Bill

ion

s

Projected Fuel subsidy Actual Fuel subsidy

In the petroleum sub sector, fuel is still purchased by cargo shipments at spot price. Deals for

bilateral trade remain positive.

Agriculture

0

500

1000

1500

2000

2500

3000

2015 2016 2017

Agriculture Policy (K'million)

FISP

FRA

0

0.5

1

1.5

2

2.5

2010 2011 2012 2013 2014 2015 2016

Bill

ion

s

Projected FISP Actual FISP

In the petroleum sub sector, the Government will disengage from the procurement

of finished petroleum products with effect from1st March, 2017 to be undertaken

by the private sector.

In the petroleum sub sector, the Government will disengage from the procurement of

finished petroleum products with effect from1st March, 2017 to be undertaken by the

private sector.

Government will refrain from using export bans to regulate agricultural markets.

Tax: Zambia is one of the countries with high corporate taxes in Sub Saharan Africa.

15

25

22

25 25

28

30 30 30 30

32 32

30

35 35

0

5

10

15

20

25

30

35

40

Per

cen

tage

(%

)

Comparison of Corporate Tax Rates (2017)

Pension reform in Napsa deduction of K225

Honorable Minister of Finance, 2018 Budget address

BUDGET PROCESSEntry points

ApprovalCall for submissions Ministry of Finance Parliament

Minister of Finance

Budget presented in

parliament

Committee Review

Expanded budget review

committee

Youths can also submit

here

KEY ENTRY POINT

You can make tax and non-

tax submissions

Ministry Consultations

Budget submission compiled

Water and Sanitation

540.99

283.64

391.7

2015 2016 2017

Water Supply & Sanitation (K'million)

Water up to K564 million

Education

9433.33

9143.21

10641.93

2015 2016 2017

Education (K'million)

Education up K11.5 billion

Health

4464.09 4431.85

5762.03

2015 2016 2017

Health (K'million)

Health up to k6billion

Social Protection

1257.8 1273.76

2693.21

2015 2016 2017

Social Protection (K'million)

Social down to k2.3 billion

A LITTLE HISTORY OF MONEY

2020500BC 1700 1948 1971

World war Two

IMF is formed for global

monetary stability. Global

currency anchored in dollar

USA

US president Richard Nixon

Decoupled dollar from gold

Zambia

Proposing gold reserves

Romans

Romans used gold and

copper for coins

USA

United states backed the

dollar on one to one with

gold

Audit Report

Zambia loses revenue through unvouched for expenditure. This underscores the need for public finance reforms and the corresponding bills and acts to be legislated .

0

50

100

150

200

250

300

350

400

450

2013 2014 2015

Mill

ion

s

Auditors General Report 2015

Unaccounted for Revenue

Unaccounted for Funds

Misapplication of Funds

Unretired Accountable Imprest

Unvouched Expenditure

Unaccounted for Stores

Irregular Payments

Non Recovery of Advances and Loans

Failure to Follow Procurement Procedures

Undelivered Materials

Undelivered Materials

Non Submission of Expenditure Returns

Wasteful Expenditure

Overpayments

THANK YOU