By JUDITH NAMUTOWE –

THE Economics Association of Zambia (EAZ) has praised the 2016 National Budget, saying it is responding to the current economic challenges the country is faced with.
In his Budget presentation to Parliament on Friday, Finance Minister Alexander Chikwanda said fiscal deficit was projected to reduce to 3.8 per cent of the Gross Domestic Product (GDP) from the current 6.9 per cent.
EAZ president Crispin Mphuka said the association was happy that the Government had responded to some of its expectations of narrowing the budget deficit in 2016.
“As EAZ, we are happy that the Government has responded to our call of narrowing the deficit.
“Generally speaking it is a good budget and we are happy that the Government tackled the deficit,” Dr Mphuka said.
He has, however, advised the Government to avoid embarking on new contracts because would make it difficult to achieve the target.
Dr Mphuka said this was so because the already running contracts could not be avoided at the moment.
“I think that the gap is too much and may only be achieved if the Government can avoid opening up new contracts,” he said.
He said the deficit drives external and domestic borrowing, a situation which leads to high interest rates thereby affecting the private sector, hence Government’s intention to limit domestic borrowing to 1.2 of GDP was a step in the right direction saying it will impact positively on the industry.