The 2010 Zambian Budget - To Enhance Growth Through Competitiveness And Diversification

On 9th October 2009, the 2010 Zambian budget was unveiled by finance minister Dr. Situmbeko Musokotwane. The K16.71 trillion budget retained the same 2009 theme of Enhancing Growth through Competitiveness and Diversification, aimed at economic diversification.

Here were the high lights of the 2010 Zambian Budget:

  • Because of the creation of a separate Ministry, Livestock and Fisheries, the allocation to the agriculture and livestock sectors has been increased from K1.096 trillion allocated in 2009 to K1.139 trillion in 2010.
  • The allocation to the education sector has been increased from K2.628 trillion to K3.320 trillion.
  • The allocation to the health sector has been reduced from K1.82 trillion to K1.36 trillion.
  • The non-taxable monthly income threshold has been increased from K700, 000 to K800, 000.
  • The import duty has been removed from insecticide treated curtains.
  • Customs duty on cranes and garbage dumpers has been removed.

Funding of the 2010 Zambian Budget

The K16.71 trillion budget expenditure, which is 22.5 percent of the Gross Domestic Product (GDP is estimated at K70 trillion), will be funded as follows:

  • The government will raise domestic revenue of K12.1 trillion.
  • K2.42 trillion will be received as grants from cooperating partners.
  • K1.48 trillion will be financed through domestic borrowing.
  • K697.1 Billion will be financed through foreign borrowing.

Microeconomic objectives for the year 2010

The following are the Microeconomic objectives which have been set for 2010:

  • Domestic borrowing will be limited to 2 percent of GDP.
  • To exceed 5 percent economic growth.
  • To reduce year-end inflation to 8 percent.

Critical areas of expenditure in the year 2010

The general Public Services would account for the largest share of the budget, at K5.36 trillion. This is because certain key expenditure areas are planned: Voter and national registration exercise is budgeted at K128.5 billion, the national census exercise is budgeted at K 97.6 billion and the constitution making process sitting is budgeted at K50 billion.

As regards tourism, the government would introduce a tourism levy that would become the major source of financing for tourism.

In an effort to transform the Northern Circuit, K 95 billion has been allocated in 2010, from K50.7 billion in 2009. The funds are meant for construction of Mbala-Kasaba Bay Road, Electrification of the area, reconstruction of the airport and, restocking of the Nsumbu National Park.

In the health sector, there is a notable reduction in the allocation due to the non-commitment of resources from cooperating partners. The reason? The alleged misappropriation of resources in the health sector!

In the formal sector, all employees earning below K800.000 will be exempt from paying PAYE.

All these changes will take effect on 1st January 2010.

Reactions to the Zambian Budget

  • The Zambia Farmer’s Union(ZNFU), deputy executive director, Ella Chembe who spoke during the 2010 post budget analysis discussion in Lusaka on 9th October 2009, said the agriculture sector was regarded as a risky business by the financial institutions. “The move by the government to increase domestic borrowing will be terrible to the farming sector”, she said.

  • The Zambia association of Pensions Fund Managers (ZAPFM) chairperson, Mr. Charles Mpundu expressed concern that the 2010 budget did not include measures to stimulate savings. He wondered how the economy would grow without saving.

  • The Copperbelt Show Society (CSS) chairperson, Bill Osborne, reacting to the Zambian budget presented by Finance and National Planning Minister Situmbeko Musokotwane said the government’s decision to allocate additional funds to the agriculture sector would help to revamp the sector. He said it was good that the small farmers were receiving attention through the Farmer Input Support Program (FISP).

  • The Zambia National Union of Teachers (ZNUT) in Northern Province reacted to the 2010 Zambian budget as well. ZNUT provincial chairman, Mr. Nonde Kasanda said, he was happy with the increased allocation of resources to the education sector.


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