2013 REVIEW STARTS

AS we move towards the end of 2013, we will, in the next number of weeks, look at some of the highlights of the year in terms of new policies.


We will look at the implementation of these policies and how that will possibly affect the economic sector in 2014 and beyond.

 

Without going into details, I have in mind the rebasing of the Kwacha whose upshots affect all Zambian nationals and residents.

 

 

 

Effective January 1, 2013, Zambia has had a new currency.


Then there is the introduction of the Cheque Truncation System (CTS) for all commercial banks whose implementation, however, seems to have not achieved the desired goals.

 

 

 

There are various policy changes which have been effected through Statutory Instruments (SIs) like number 55 of 2013 as well as the now infamous SI 89 on the export of unprocessed minerals.

 

 

 

We will further relook at some of the notable economic achievements in the year and the challenges like the widened budgetary deficit.

 

 

 

The deficit which was initially planned at 4.3 per cent will rise up to 8.5 per cent by December 31 2013.

 

The review will lead us to the 2014 National Budget where I will draw the readers’ attention to some of the measures espoused in the document.

But that will be after looking at some of the efforts the Bank of Zambia has made to address various monetary challenges in the country, including the high lending interest rates.

 

 

 

 

We will further refocus at the newly-launched Mines and Mineral Development Policy and ascertain its relevancy to the sector.

 

 

 

By the time we look at all these issues, we may well be in time to welcome the beginning of 2014 at which instant Policy Analysis may go on recess while we try to look at its relevancy to you, the readers.

 

 

 

Before going full throttle into the 2013 review, however, I want to attend to unfinished business by featuring an abridged mail from a reader on the toll gate fees.

 

 

 

Bwalya Mutale, a CIMA student writes:

 

 

 

“Dear Muyanwa (Mr)

I hope and trust that my mail finds you well.

I write to make a comment on the on-going toll gate debate in Zambia. First and foremost it is agreeable that this toll gate fees are another increase on the tax burden on the ordinary Zambians.

 

The question that begs for an immediate answer is, is the tollgate tax the only and best method to better roads?

 

I leave it to the Zambians to answer but what is my point?

 

My point is that a quick glance at the Zambian budget shows that a staggering 60 per cent or so of the total budget goes to consumption!

 

If I was the minister of finance, my objective should then be to find creative ways to reduce this trend first before going about in burdening the poor Zambians with more tax.

You see no one can ever develop if they eat more than they invest.

Back to the tollgate tax, no one can deny that through this tax government will raise substantial amounts of revenue which could lead to better roads. But you see our governments have a pedigree of long fingers.

 

Tell me, if tomorrow the doctors took to the streets demanding better salaries that our government will not be tempted to deep their fingers in these same funds!

So you see the problem is financial discipline.

Zambia currently ranks amongst the top in the high cost of living category in the region.

 

Of course this is subject to further debate by experts. So if the tollgate tax is implemented that should push the cost of living higher and so will inflation. This then means the recent salary increments will be wiped out by inflationary pressures.

 

This again will contradict the government’s goal of creating a middle class.

“In my concluding the tollgate fees should just be for bigger automobiles especially those trucks exporting copper which is not even properly taxed while the ordinary cargo should be exempted,” ends Mr Mutale.

Further, in response to my question if there is anything positive about the fees, Mr Mutale writes:

“My desire which I believe is shared by many is to see a better Zambia for all.

 

I do in some way agree that certain strategic roads should be tolled especially those going to the mining regions such as Copperbelt and North-western Provinces.

 

However, to be effective these fees should not go to the central treasury but should be left to develop the respective provinces. In other words the revenue should be ring-fenced as provincial or some other criteria but not centralised.

 

This will mean decentralising the road fund into regions so that the money does not come to Lusaka. This will also be in line with government’s policy of decentralisation.

 

For comments/other contributions call: 0955431442, 0977246099 or e-mail: jmuyanwa@gmail.com.