FORMER finance minister Ng’andu Magande says the government is under pressure to manage this year’s budget following its unplanned expenditures.
And Magande says the government is likely to U-turn on the increased wages for civil servants because the increment was not budgeted for this year.
Commenting on the Economics Association of Zambia’s warning that Zambians should expect more stringent measures on the revenue and expenditure side of government as there is likely to be upward adjustments in the next budget, Magande said he anticipated tax increases.
“We anticipate increases in some taxes because there are so many capital projects being started and we do not know where the money is going to come from. Apart from the capital projects, there are also a number of recurrent expenditures, which are increasing because of all these appointments of new people in different positions. So I can imagine the Ministry of Finance might even be having problems on how to balance the recurrent budget already,” he said.
Magande said the government would have no choice but to adjust some of its revenues upwards.
“Where will they get the money, unless they adjust some of their earnings by increasing taxes. So that definitely is going to happen,” he said.
Magande said there was no consolation in talking about the maize and fuel subsidies because they were covered by loans which must be paid back to the lending institutions.
“There is no consolation in talking about the subsidies because already, the Minister of Agriculture Robert Sichingaexplained that these subsidies have been covered by loans which have not been paid and are already over K2 trillion. So there is no savings to be made there. What will happen now is any savings that will be made will go towards settling the loans which are owed by FRA and the government to the various financial institutions,” he said. “Even when we are told the savings from the subsidies are going to capital projects, I don’t think that will be possible for the next two, three years because the banks have to be paid their money.”
And Magande said there was lack of planning on the part of the Ministry of Finance because the planning department had been dissolved.
“The first thing the PF government did at Ministry of Finance was to dissolve the planning department, so who is the Minister of Finance going to consult on how things have to be? The people who are there now are just Treasury people who look at the bank statement from Bank of Zambia to see what money is there and that is not the best way you can run a development agendaâ€¦,” Magande said.
Asked on the wage agreement for civil servants which is supposed to be effected this September, Magande said the situation was turning negative for the government and might not materialise.