The 2016 budget presented on the 9th October by the Minister of Finance carries an appropriate theme (“Fiscal Consolidation to Safeguard our Past achievements and Secure a Prosperous Future for All”) but is neither bold nor realistic. It is a deceptive budget that is camouflaging the dire economic reality of the Zambian economy.
Given the economic crises the country finds itself in, the expectations were to see more realism in the macro-economic objectives as well as bold decisions in economic sector policies, revenue and financing. As things stand now, the 2016 budget is far from being “crisis responsive”, it is “business as usual”.
The macro-economic objectives are unrealistic and deceptive: For example, there are currently no economic sectors of the Zambian economy that we can look up to in driving the projected 5.0 percent real GDP growth rate. Aiming at this level of growth rate in a declining economy is wishful thinking.
Similarly, the suggested reduction of the budget deficit to 3.8 percent of GDP from 6.9 percent projected in 2015 does not add up with the fiscal indiscipline characteristic of the PF government.
Worse still, aiming at an end-year inflation target of less than 7.7 percent without showing how this is possible under the current situation is a crude lie.
The Zambian workers are the biggest losers in the context of the 2016 budget: Fiscal incentives have been provided to business houses. The budget is silent on tax reliefs for those in employment. Their 2016 fate is the high cost of living induced through the downfall of the Kwacha and increased tariffs for utilities. 2016 will be a miserable year for Zambian workers.