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Ng’andu presents a K119.6 billion, 2021 National Budget

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Finance Minister, Bwalya Ng’andu on Friday 25 September 2020, unveiled the country’s 2021 National Budget to the tune of K119.6 billion, which is aimed at stimulating economic recovery in the wake of the COVID-19 pandemic.

He said of this budgeted amount, 68.0 billion Kwacha will come from domestic revenues and grants while the balance of 51.6 billion Kwacha will be raised through financing.

In his budget, Ng’andu also said he seeks to enhance the social protection response programs to prevent the worsening of poverty levels despite constrained fiscal conditions, which has been further compounded by the pandemic.

He gave the breakdown of the proposed income and expenditure for the coming year as follows;

“I expect to raise a total of K119.6 billion to finance this Budget. Out of this amount, K53.3 billion will be raised from taxes while K12.7 billion will be from non-tax revenues.

“In addition, K2.0 billion will be grants from our Cooperating Partners.

“The balance of the total amount will be financed through borrowing K17.4 billion from the domestic market and K34.2 billion will be from external sources.”

The Finance Minister disclosed that under the 2021 budget, the government has proposed to spend 119.6 billion Zambian Kwacha which translates to 32.6 percent of the gross domestic product (GDP).

He said the fiscal deficit was targeted to reduce to 9.3 percent of GDP in 2021 from the 11.7 percent projected outturn for 2020.

According to him, the COVID-19 pandemic has stifled economic growth, adding that the focus in the medium term will be on containing the spread of the virus, mitigating its effect and restoring macroeconomic stability as well as growth.

On the expenditure side, he allocated K4.8 billion to social protection. Out of this amount, K2.3 billion is for the social cash transfer, with the remainder covering the other items in the same bracket.

Debt servicing he allocated K18. 338, 481.00 for domestic, and K27. 745, 178, 541 for external debt. He also provided K598, 112, 678 to fund the forthcoming general elections, the amount is to cover, voter registration and other electoral modalities.

Education, he gave an allocation of K13.8 billion to the education sector. Of this amount, K7.1 billion will go towards early childhood and primary education, K2.7 billion to secondary education and K1.9 billion to tertiary education.

Meanwhile, the biggest beneficiaries of the budget include, General Public Services i;e, debt servicing, Constituency Development Fund, Elections, etc; this section received K57. 819. 227, 707; Defence got K5, 642 820 725; Economic Affairs got K21 499, 987 741 and the Health sector was given K9 653 313 513.

Ng’andu also pointed out that priority will be to move towards attaining fiscal fitness and restoring debt sustainability, dismantling domestic arrears and safeguarding social protection spending, among other critical areas.

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