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2018 Budget.Pdf Republic of Zambia 2018 BUDGET ADDRESS By the Minister of Finance Hon. Felix C. Mutati, MP “Accelerating fiscal fitness for sustained inclusive growth, without leaving anyone behind” 1 2018 Budget Address by Honourable Felix C. Mutati, MP Minister of Finance Delivered to the National Assembly on Friday, 29th September, 2017 1. Mr. Speaker, I beg to move Further, I wish to applaud the that the House do now resolve into church, media, private sector, civil Committee of Supply on the society organisations and Estimates of Revenue and cooperating partners for their Expenditure for the year 1st support in our development January, 2018 to 31st December, endeavours. 2018, presented to the National 4. Sir, during the official Assembly on Friday, 29th opening of the second session of September, 2017. the twelfth National Assembly, 2. Sir, I am a bearer of a message His Excellency, Mr. Edgar Chagwa from His Excellency, Mr. Edgar Lungu, President of the Republic Chagwa Lungu, President of the of Zambia reminded the nation of Republic of Zambia the need to uphold our national recommending favourable values and principles, which are consideration of the motion that I centred on patriotism and love for now lay on the Table. one another as enshrined in our national anthem ‘’one land and 3. Mr. Speaker, this is my one nation is our cry’’. I wish to second address since I was reiterate the President’s call, as it is granted this rare and momentous critical if we are to effectively task to serve as Minister of implement our development Finance. The walk has not been agenda and meet our aspirations easy, but collectively we have as a nation, without leaving made notable successes as I will anyone behind. highlight in my address. I once again wish to thank His 5. Mr. Speaker, the people of Excellency, Mr. Edgar Chagwa Zambia deserve peace and Lungu, President of the Republic stability, decent employment, of Zambia for giving me this quality public services and a opportunity. I also thank my conducive environment where Cabinet colleagues, all members of they can thrive, create their own this august House and the wealth and prosper. Achieving Zambian people for their support. these outcomes is the task with 2 which the Zambian people have started showing positive results in entrusted us. securing a sustainable growth going forward. Through these 6. Sir, this we shall attain measures Government through the diligent pursuit of the significantly reduced the strategic objectives contained in accumulation of arrears. As a the recently launched Seventh result of the reforms, Zambia’s National Development Plan. We credit rating outlook and investor aspire to make a reality of the confidence have improved. Plan’s theme of “accelerating Government is mindful that development efforts towards the despite this positive outlook, the Vision 2030, without leaving measures in the short term have anyone behind”. not yet favourably impacted on 7. Mr. Speaker, during the nine the welfare of the people. The long months of implementing the term benefits will be inclusive Economic Stabilisation and growth and prosperity. Growth Programme, dubbed 9. Mr. Speaker, by working “Zambia Plus”, a lot has been collectively, we can ensure that achieved. The Patriotic Front our goals and priorities are clearly Government is cognisant of the defined. Our resolve for inclusive fact that our people deserve much development remains more. We have made strides, yet unwavering. Our actions remain challenges still remain. Youth fiscally prudent. It is in this context unemployment and poverty levels that the theme of the 2018 Budget remain high. To this end, is “Accelerating fiscal fitness for Government is resolved to work sustained inclusive growth, tenaciously to uplift the wellbeing without leaving anyone behind.” of our people and enhance their meaningful participation in the 10. Sir, my address to this economy. august House is in four parts. In Part One, I review the 8. Sir, inclusive growth is only performance of the global and possible if we are steadfast in domestic economies during 2017 collectively implementing bold and present the outlook for the rest policy decisions and reforms. This of the year. Part Two, outlines the year, Government implemented macroeconomic objectives, austerity measures that have policies and strategies for 2018. In 3 Part Three, I present the details of compared with an average of US$ the 2018 budget and in Part Four, I 4,868 per tonne in 2016. Similarly, conclude. international crude oil prices are expected to surge upwards to an PART I average of US$49.0 per barrel in GLOBAL AND DOMESTIC 2017 from an average of US $42.8 per barrel in 2016. ECONOMIC DEVELOPMENTS IN 2017 14. Sir, the Zambian economy in 2017 has continued to rebound. 11. Mr. Speaker, the global Growth is expected to be above 4.0 economy is projected to grow by percent from 3.8 percent in 2016. 3.5 percent in 2017, compared to Key drivers will be the mining, 3.2 percent in 2016. This is mainly agriculture and manufacturing premised on a projected 4.6 sectors supported by improved percent growth in the large electricity generation. It is worth emerging and developing noting that the Zambian economy economies, driven by the gradual has outpaced the Sub-Sahara improvement in commodity African economic growth of 2.7 prices. percent. This is a reflection of the 12. Sir, growth in advanced sound economic policies that this economies is expected to Government has put in place. strengthen to 2.0 percent in 2017 15. Mr. Speaker, I now outline in from 1.7 percent in 2016. Sub- detail, the developments in the Sahara African growth is projected domestic economy. to expand to 2.7 percent in 2017 from 1.3 percent in 2016, driven by Real Sector increased agricultural and mining output. 16. Sir, crop production during the 2016/2017 farming season was 13. Mr. Speaker, as global favourable with significant economic activity gains increases in the output of maize, momentum, commodity prices are Irish-potatoes, rice, tobacco, expected to continue groundnuts and soya beans. strengthening in 2017. Copper prices are projected to average 17. Mr. Speaker, growth in the US$5,827 per tonne in 2017 fisheries sub-sector strengthened for both capture and aquaculture 4 fisheries to 77,029 metric tonnes exceed the 2016 output of 770,000 for the period January to June 2017 metric tonnes. from 56,241 metric tonnes in the 21. same period in 2016. This was Mr. Speaker, following the explained by higher participation initiative to modernise Harry by commercial and emergent fish Mwanga Nkumbula International farmers in aquaculture, and Airport, tourist arrivals at the enhanced enforcement of fisheries airport increased by 23.6 percent regulation in capture fisheries. in the first half of 2017 compared with the same period in 2016. We 18. Sir, in the livestock sub- anticipate similar trends at Ndola sector, there was an increase in the and Lusaka once the livestock population to 4.9 million modernisation projects have been during the period January to June completed. 2017 from 4.3 million compared to External Sector Performance the same period in 2016. This was due to the stocking and re- 22. Sir, the performance of the stocking programmes and external sector has improved improved animal disease control relative to 2016. Zambia’s trade programmes. balance recorded a surplus of US$388.3 million during the first 19. Mr. Speaker, on account of six months of 2017 compared with improved water levels, electricity a surplus of US$45.8 million generation in the first eight during the corresponding period months of 2017 increased by 23.7 in 2016. This was mainly driven by percent to 9.4 million megawatt higher export earnings relative to hours from 7.6 million megawatt imports. Total export earnings hours during the corresponding were 25.8 percent higher at US$3.9 period in 2016. This has billion compared with US$ 3.1 significantly reduced load billion in the corresponding shedding creating better prospects period in 2016. for industrialisation. 23. Mr. Speaker, copper export 20. Sir, as at end August 2017, earnings were higher by 38.1 copper production stood at percent at US$ 2.9 billion from US$ 510,369 metric tonnes, with the 2.1 billion in the corresponding end year production expected to period in 2016. This was due to a 5 rise in both export volumes and remained satisfactory as at end- prices. Non-traditional exports, August 2017. The banking sector however, marginally declined to also maintained a strong capital US$ 811.7 million during the first adequacy position and satisfactory six months of 2017 from US$ 835.5 earnings performance. million during the same period in 26. 2016. Sir, despite the easing of monetary policy, commercial bank 24. Sir, Gross international average lending rates only fell reserves as at end-August 2017 marginally to 26.6 percent in were estimated at US $2.3 billion, August 2017 from 29.4 percent in relatively unchanged from the December 2016. Private sector end-2016 level. This translates into credit remained subdued, 3.2 months of import cover. contracting by 2.9 percent as at end August 2017. Asset quality Monetary and Financial also deteriorated as reflected by Performance increased non-performing loans to 25. Mr. Speaker, monetary 12.2 percent relative to total loans, performance in 2017 has been compared to 9.7 percent as at end- positive. The exchange rate of the December 2016. This is above the Kwacha against major tradable internationally acceptable currencies has been relatively threshold of 10 percent. However, stable appreciating by measures are being taken to approximately 4.0 percent to date.
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