FINANCE Minister Bwalya Ng’andu has announced a K119.6 billion National Budget which translates into 32.6 percent of the country’s Gross Domestic Product (GDP).
The budget which is a K13.6 billion increase from the 2020 National Budget will see K68 billion, a representation of 18 percent of the country’s GDP would come from domestic revenues while the balance would come through financing.
Speaking when he presented the next year’s National Budget in Parliament this afternoon, Dr Ng’andu said K53.3 billion will be raised from taxes while K12.7 billion will be from non-tax revenues with K2 billion being grants from cooperating partners.
The Minister noted that fiscal deficit is equally expected to reduce to 9.3 percent in 2021 from 11.3 percent in 2020.
He also announced that all ministries, provinces and government spending agencies have migrated from Activity Based Budget to Output Based which is more performance oriented and promotes transparency and accountability.
Dr Ng’andu said the government intends to spend K57.8 billion on general public services with K18.3 billion going towards domestic debts interest while K27.7 billion would be channeled towards external debt.
“In addition, K598.1 billion is for the 2021 General Elections while K1.2 billion has been allocated to the Local Government Equalization Fund,” Dr Ng’andu said.
The Minister revealed that K21.1 billion has been allocated for economic affairs a slight reduction from 2020 National Budget which had K21.8 billion.
Out of the K21.1 billion, K5.7 billion has been allocated for Farmer Inputs Support Programme (FISP), a notable increase from the 2020 budget of K1.1 billion.
Dr Ng’andu however, proposed a notable reduction in road infrastructure allocation of K6.2 billion from K10.6 billion which was allocated in 2020 National Budget.
Similarly, K13.8 billion has been allocated towards education with K7.1 billion will go towards early childhood and primary education while K2.7 billion and K1.9 billion would go towards secondary and tertiary education respectively.
Dr Ng’andu proposed a K9.7 billion for the health sector, with K3.2 billion set aside for primary health care while K5.1
billion is for hospital services.
“Of the allocations to primary health care and hospital services, K1.4 billion is earmarked for the procurement of essential drugs and medical supplies. This amount includes a provision for the COVID-19 vaccine once it is developed and made available,” he said.
In an effort o increase disposable income of employees, Dr Ng’andu announced an increase in the exempt threshold for Pay-As-You-Earn (PAYE) to K4,000 from K3,300 per month.
This means employees earning K4,000 or less are not subject to PAYE while the first K4,000 will attract tax for those earning above the threshhold.
“This measure will result in K455.6 million additional income in the pockets of the Zambian workers,” he said.
Dr Ng’andu announced almost 100 percent increase social protection by allocating K4.8 billion including K2.3 going towards social cash transfer – an increase from K1 billion in the 2020 national budget.