. Chikwanda

By MAIMBOLWA MULIKELELA –
FINANCE Minister Alexander Chikwanda has pledged to restrict the country’s fiscal deficit to around three per cent of the Gross Domestic Product (GDP) in 2015 in line with the policy of promoting the availability of capital for private sector growth.
In 2014, the Government made progress towards fiscal consolidation and current assessment which indicates that the deficit will be contained to around 5.4 per cent of GDP, a rate lower than the 6.7 per cent posted in 2013.
Mr Chikwanda said in 2015 the Government had projected a lower deficit of 4.6 per cent and would later reduce it to around three per cent of GDP.
He said the reduction in the deficit would firmly be anchored on continued re-alignment of expenditures to priority areas such as infrastructure, public service delivery and rationalising the Government wage bill to forestall structural imbalances and deformities.
“Recurrent expenditures of up to 70 per cent largely emolument and emolument related cannot be a recipe for country-wide sustainable development,” he said.
In a statement on the state of Zambia’s economy, Mr Chikwanda expressed commitment towards reforming the public pension system by implementing broader reforms and undertaking revenue administration reforms to enhance tax collections.
“It is noteworthy that the expenditure and revenue strategies over the medium-term will moderate Government domestic borrowing. Reduced domestic borrowing by the Government will contribute to lower lending rates and in turn increased access to loanable resources for the private sector, particularly SME’s,” he said.
Mr Chikwanda said the Government recognised the importance of increased access to affordable credit by the private sector, saying this would lead to increased investment and growth of the economy as well as job creation.
Through the Financial Sector Development Programme, Mr Chikwanda said efforts were underway to not only improve financial inclusion among the unbanked citizenry but also to ensure innovative and affordable credit for productive business ventures at all levels of entrepreneurship.
“Clearly, our fiscal policy is grounded on strong fundamentals,” Mr Chikwanda said.