Debate about the supprementary budget

Filed under: Special Comments |

By Dr Lubinda Haabazoka

I have followed closely the debate currently going on about the K22bn supplementary budget. Kudos to Mr Trevor Simumba and Mr Trevor Hambayi for taking a lead in making sure the state and the population are on the same page. I am also very happy that ST has also moved in to add to his views!

In fact Both Trevors and the ST are talking about the same thing that there is no budget surplus. All government is doing is doing a budget variation as certain unexpected revenue came in and certain activities have been shelved in favor of other expenses that government want to undertake but we’re not budget for.

The misunderstanding probably came from an earlier post from government that mentioned of a surplus.

A budget is a wish list of planned revenue and expenditure for a fiscal year. Now not all planned revenue comes in and not all expenditure is incurred. Some revenue even comes from sources no one expected and as such, governments will in the middle of the year go to parliament to ask for a supplementary budget for additional spending.

In this case, government didn’t expect dividends from BoZ for the year 2021 but these monies have come in. Government also had planned to repay certain debt in 2022 but because foreign debt service was suspended in 2020 and it still hasn’t resumed, government wishes to use this money for something else.

Government also has additional things they want to spend money on to a tune of K22bn and that’s why they have gone to parliament to increase the allocation. My brothers Trevor and Trevor in their argument are worried that why increase expenditure instead of keeping expenditure low? I also argue that certain monies that government didn’t expect can go towards current expenditure instead of borrowing since even our treasury bills remain undersubscribed.

The debate is whether their is budget surplus or not? The answer is NO. You can’t have a budget surplus when you have arrears on certain things. The minister of finance said teacher recruitment will come from IMF funds and the package is not there yet but the expense is going to be incurred. Then also what government planned to borrow is not coming because of treasury bill under subscription.

Economic development is a complex thing and not a two day marathon. The global economy has since 2016 been facing turbulences. Zambia has had droughts since 2015! Covid from 2020. Certain industries were shut! The USA is now in recession and Europe is about to slip into it because “when America sneezes, Europe catches a cold”. We need to thank technocrats, politicians and even consultants that have kept our country afloat! Companies bigger than the Country Zambia have collapsed in these trying times but we remain afloat!

We shall face tougher times going forward as fertiliser and energy costs increase and the global appetite for raw materials fade amid struggling western economies. So instead of focusing on UPND vs PF rhetoric, why can’t we unite as a country and prepare for what is about to come? Unless we can see it? Unless it’s Normal to see America pass price controls on essential goods through the “inflation control Act”. Unless it’s normal to see copper prices in two weeks fall from $10,000 to $7,000!

Those days, I couldn’t write these things because I had direct access. Now the access is scanty so sorry if it looks as if we are advising in the media.

Special sorry also goes to my fellow citizens who without reading just go and insult people.

This country belongs to all of us and as such, there is nothing like going on leave from national matters. When people are not allowed to talk, you won’t know what they are thinking and it will be very difficult to govern because you won’t know people’s expectations.

Otherwise healthy debate fellow economists. And have a lovely weekend country men and women.


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