What will the copper briefcase unveil?

Finance and National Planning Minister Situmbeko Musokotwane today presents the 2011 national Budget to Parliament as he among others issues, spells out how Government intends to apportion the proposed K17 trillion Budget to achieve the projected 6.6 per cent growth.

As Dr Musokotwane climbs up the stairs of Manda Hill to unveil the contents in the copper-coated briefcase, the country will be anxiously waiting to hear how the Government would achieve some of the pronouncements by President Rupiah Banda during the official opening of the fifth session of the 10th National Assembly.

In September this year, Secretary to the Treasury Likolo Ndalamei announced that the Government was proposing a K17 trillion budget for 2011.

The Government also announced that the economy was expected to grow by 6.6 per cent this year, an upward revision from the projected five per cent that was contained in the previous Medium Term Expenditure Framework (MTEF).

When the president opened Parliament last month, he said in the year 2010 there were some challenges that included declining domestic tax revenue and reduced donor support for the health and road sectors.

There was, therefore, need for continued economic growth and for the Ministry of Finance to review tax policy and administration.
Zambians will thus, be expectant about how the Ministry of Finance will review the tax policy and administration in view of the declining domestic tax revenue and reduced donor support for the health and road sectors.
Some analysts have recently said that there was need to broaden the tax base to capture the informal sector to lessen the burden on the close to 400,000 citizens in the formal sector.
Still on this front, Zambians are expected to hear whether Pay As you Earn (PAYE) would be reviewed in this year’s Budget. In the 2010 Budget, the PAYE threshold was raised from K700,000 to K800,000.
Dr Musokotwane will also stipulate how Government will shift focus from the current scenario to create fiscal space through the expansion of domestic revenues, the reduction of lower priority expenditures and the allocation of more resources to infrastructure and human development.

This is the year when the Government will be launching the sixth National Development following the expiry of the 5th NDP which was a success as it has achieved most of the targets set out.

It is also expected that the minister will also announce how Government will apportion the K17 trillion in a year Zambia is expected to go to the polls.

In his Green paper presented last month, Mr Ndalamei said the projected growth of 6.6 per cent is on account of the better than expected performance in several sectors of the economy during the first half of 2010.

During the last farming season, Zambia recorded the largest maize harvest in history of approximately 2.7 million tonnes compared with the 1.8 million in the previous season. This owing largely to the good policies to support smalls scale farmers.

The president in his opening speech indicated that the Government intends to maintain the positive developments in the agriculture sector by increasing the number of beneficiaries on the Farmer Input Support Programme from 500,000 upwards.

The Government also realises the importance of not depending on rain-fed crop and has embarked on putting up irrigation facilities to ensure farming is an all year round activity.

Mr Banda in his address said this year’s projections are that growth will remain at about 6.6 per cent or even higher.

“This growth is being driven by the mining, agriculture, tourism and construction sectors,” he said.
This being the first year since the Budget cycle was changed, it is expected that the minister will give an update on its performance with regard to the economy and infrastructure development.