2010 Budgetary changes
Zambia Budget Review1
‘’Enhancing Growth through Competitiveness and
Diversifcation” retained as the theme
Very few proposed tax changes The strategy of the Government continues tobe ‘Enhancing growth throughCompetitiveness and
Manufacturing and tourism decline...Mining, agricultureand construction grow 5% GDP growthtarget for 2010 Some proposed changes may impact negatively on agriculture and tourismGDP Growth of 4.3% projected
The title/theme of the 2010 budget hasremained the same as that of the 2009address “Enhancing Growth through
Competitiveness and Diversication”.
We hope this is an acknowledgement of
unnished business and a realisation that
the development agenda is a long term
one. It was unrealistic to refocus on an
annual basis without any regard to theactual achievements, as the previous annual
theme changes suggested.
Considering the turbulence in the globaleconomy for the most part of 2009, the
economy performed reasonably well. Theprojected GDP growth rate of 4.3%, or more,far exceeds the 1.3% projected for SubSahara Africa.
However, it is not appropriate to gauge our performance against a rough aggregate
such as the Sub Sahara rate. We should
develop targets based on the resources andother competitive advantages we enjoy as a
nation.In 2009, manufacturing and tourism areprojected to decline by 1% and 15%
respectively, whilst mining, agriculture,and construction are projected to grow by
13.1%, 5.2% and 10% respectively. If theeconomy can grow by 4.3% in a very difcultyear, is the 2010 GDP growth target of 5%
ambitious enough? We believe we should
and can achieve higher rates of growth.
To do that we need to set our prioritiesand then focus and execute them as one
management guru put it. We appear to have
set the priorities and to some extent have
started focusing. Next we have to ensure weexecute relentlessly.
Prior years’ budget addresses have been
dominated by changes in the tax regime.
The 2010 budget differs from prior years inthat there are a few proposed changes to
the tax regime. Considering the changes
introduced in the past two budgets, this isa welcome relief, particularly to the mining
industry. We are not suggesting that the
current tax regime is perfect and does not
need improvement. But as we all know
changes have to be carefully planned and
managed. We are not sure that can be said
of some of the recent changes to the tax
regime.Some of the proposed changes in the 2010
budget address might impact negativelyon two priority sectors: agriculture and
tourism. The increase in the fees payableunder the Lands Act might hinder accessto land. Further, the increase in the excise
duty payable on the diesel will surely
increase the cost of farming. The proposed
tourism levy also has the potential to have
similar counter-productive effect. We urgecircumspection before its introduction.Beyond the gures, we believe the 2010
budget proposals are realistic, albeit a bit