THE Zambia Institute for Policy Analysis and Research (ZIPAR) says government should be mindful of the critical gaps and potential slippages inherent in the design of public policy when executing the 2020 National budget.

Minister of Finance Bwalya Ng’andu on Friday, September 27, 2019, presented to Parliament a K106 billion budget which represented 32.4% of the Gross Domestic Product (GDP) compared to 28.9% of GDP in 2019.

According to the 2020 National Budget analysis report presented by ZIPAR on Thursday, October 3, 2019 at Lusaka’s Taj Pamodzi Hotel, the institute advised government to stick to the budget as presented to Parliament to ensure effectively and efficiently implementation of policies and interventions.

ZIPAR said re-establishing robust growth over the medium term is not out of Zambia’s reach but will require being mindful of the challenging macroeconomic conditions, the policy stance of the fiscus and debt, and the confounding effects of climate change.

“Ultimately, the 2020 Budget holds promise  to stimulate the domestic economy and position Zambia for growth. Planting and nurturing seeds for growth in 2020 and beyond will not be easy  in view of the anticipated macroeconomic conditions, challenging fiscal and debt expansions, adverse climate change effects and urgent social sector demands,” the report read in part.

The report further states that the external economy remains uncertain and this has hampered the country’s ability to rebuild its depleted international reserves thus the government should strive hard in the 2020 National Budget to balance between stability and growth objectives.

In terms of debts, ZIPAR said the huge debt mountain will have to be addressed, in particular, the escalating debt servicing costs brought about the unrelenting appetite by authorities to borrow.

The institute said government should put up a spirited fight to curtail debt accumulation and dismantling payment arrears.

“More importantly, key intervention for addressing for addressing the debt overhang in the 2020 will include: the increased allocation to the sinking funds for the Eurobonds; refinancing of the Eurobonds; expediting the development the development and implementation of the 2020-2022 Medium-Term-Debt-Management Strategy (MTDS); and finalising the long overdue legislative reforms for fiscal governance, which risks remains in abeyance in 2020 and pose further risks of missing the opportunity to enhance rule-based fiscal restraint, austerity and discipline,” the report states.

ZIPAR said the issue of stopping unsustainable debt servicing will require a high degree of creativity and innovativeness suggesting that government should pursue options such as bond buy backs, strengthening of Ministry of Finance officials capabilities in  debt management, innovative term financing of infrastructure, the use of Private Public Partnerships, issuance of infrastructure bonds targeting  retail investors,  and the financing of infrastructure  using proceeds  from road tolls.


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