Honorable minister, Dr. Situmbeko Musokotwane during the symposium held on the update of the 1st quarter budget and economic performance, at Mulungushi conference center, said that the ministry of finance and national planning holds these regular quarterly symposium to provide updates on Zambia’s budget and overall economic performance. He said that the aim is to ensure that information about Zambia’s economic outlook is available. He started by sharing the recent economic development based on the issue of estimate. On economic growth, during his address in January this year, the projection for real GDP growth in 2022 was 3.1%, the out turn however based on further preliminary estimates from the Zambia statistic agency is a much higher growth at 4.7%, this growth was driven by the ICT, transport and the education sectors, growth was however subdued in the key sectors such as agriculture, mining, tourism and manufacturing industry. He further stated that we must aspire for much higher economic growth year after year, it is only when the economy is growing preferably in double digits that growth can have meaningful impact on job creation, poverty reduction and improvements on the lives of the people, without strong growth we cannot have prosperity in the country just like a human being in a family, he said. Taking into account of this,government is working on various initiatives to unlock this higher growth that we are looking for as a country, for example farm blocks in agriculture, and this is an initiative to improve agriculture production in the country, both in raw products and value added production products. The need to provide larger agricultural surpluses has never been greater in our country today. Currently our country is faced with huge demand for grain and other products from the region, this demand has caused mealie meal prices to rise and therefor adversely affect the people. In the immediate response government has heightened security against illegal export. Government has encouraged the local private sector to import mealie meal from other surplus countries for sale at boarder areas in those towns that are next to countries with deficit food availability.
Speaking further he said the ultimate solution in the food deficit in the region should be a sweet one for Zambia. Zambia should produce more food and export to countries in need, which will bring more dollars and job creation. The export market is huge that it is necessary to bring in extra skills and capital. The farm blocks have been designed for this purpose. The implementation plans for the farm blocks are nearly ready, the money to establish the farm blocks in terms of infrastructure is there, and within a few months it will take effect. He emphasized that Zambians should not be afraid of foreigners coming to collaborate with Zambia, as they will be carefully selected on the basis of capability to come and produce the surplus that is needed, he said that the numbers will be few compared to the jobs that will be created, few investors to produce large quantities but the output will be there to assist the country to its deficit in the region, therefor feed the region and have enough at home hence earn dollars. The Nakambala estate is foreign owned but we do not feel that we have been swamped by foreigners, similarly with other foreign companies. He stated that no one should be scared that the market will be taken away from them, or being taken off their lands as the target is the export market.
The mining sector was not one of the key drivers to growth in 2022, but the government wants this sector to be one of the key drivers for growth, in line with the ambition to attain copper production of 3million tons per year, the ground work for more production in mining was laid out following the realignment of the tax regime in mineral royalty tax and establishment for more stable investment climate for the sector, positive response has been observed in this regard, for example first Quantum is making an investment excess of 1.2 billion USD, and works have started on the Nicole mine and others, and announcement for KCM and Mopani copper mines in terms of getting them in production will be made fairly soon, no doubt we can confidently expect the mining sector alongside other supportive sectors where most people play a role in being suppliers and contractors, it is expected that this sector will perform better this year and going forward, thereby contribute to higher growth.
Third area that is expected to push growth is the infrastructuredevelopment hence the procedures for CDF was rationalized to improve efficiency, we should see more classrooms, health facilities, service housing and others to go up in terms of production, on top of this we expect a push arising from other capital expenditure in line with the 2023 national budget, for example there are 120 high schools to be constructed this year through the World bank funding, there is also budget money to continue completing high schools that where left abandoned in the last government, there are also roads to be constructed. Still on infrastructure and economic growth, infrastructure financed under PPP make a strong contribution starting mid 2023 going forward to the next election, work on the Lusaka to Ndola dual carriage way starts in the middle of this year, also the Chingola to Kasumbalesa road are ready fully under way, on top of this there are several other roads, all these are under the pipeline and these projects will help to create jobs with a lot of businesses and incomes income in the next three years.
Finally speaking on manufacturing he said that there is a lot of interest and therefor potential for growth in manufacturing, Zambia was totally of special mention in this area regarding fertilizers until recently Zambia was totally dependent on imported fertilizers, but because of the conducive business environment major investments have been made in this sub sector, as he was informed, Zambia has self-sufficiency for the peso fertilizers, and in the next few years Zambia will be exporting some fertilizer surpluses to the region, top dressing works on the plant to produce top dressing fertilizers was launched by the president last week, this will also lead to self-sufficiency in the next two years or so, these are examples of what is happening in the manufacturing sector. The government will double its efforts in combatting red tape, corruption and bureaucracy in the facilitation of investments in all sectors, this should also be understood by all officials in the public sectorwho are fond of frustrating investments that the government will not tolerate such practices, any one in charge of licenses should understand that their work is important for the creation of jobs for their children and others, he said. As the economy produces more, more tax revenue will become available and salaries for public service workers will improve, while the absence of that means no jobs and no improved salaries.
The honorable minister also gave highlights of the performance of the budget, in which he stated that, total revenue and grant collection amounted to K25.4 billion which is 0.7% lower than the targeted revenue collection for the quarter. 0.7% lower should not be worrying as we are on target in terms of revenue and grants, this outcome was largely due to underperformance in income and company tax collection. On non-tax revenue collection, this amounted to K3.73 billion against the target of K3.83 billion and this also is just slightly below. In terms of spending the treasury released 38.5 billion for implementation of various projects and programs against the target of K37.8 billion which was slightly above target but in broad terms working very close to the target.
In conclusion he said, while it has been recognized that economic hardships persist for many Zambians, the ministry is confident that the economy is on the right path. The government is implementing all measures to unlock barriers to growth here at home and working tirelessly to secure a resolution of the debt issue to unlock barriers in the global economy.