On 31^st January 2009 Micah Challenge Zambia held a meeting at Savoy on the National Budget entitled A Reflection on the 2009 National Budget which targeted Christian Professionals. The main speaker was Mr Japo Mbetwa (A fellow of the Association of Chartered Certified Accountants -ACCA and the Zambia Institute of Certified Accountants. He is also Finance Director and Chief Operational Officer for the Jasembe Enterprises LTD). Rev Derrick Mutungu (Chairperson of the Zambia Christian Chamber of Commerce) was the respondent.

As we called for this meeting it was our observation that Christian professionals are socially, economically and politically alienated from the main stream of national development. The church most often does not have adequate and reliable data to engage with precision and certainty on the nature, extent and magnitude of national problems. We sensed that there is room for the church through its Christian professionals to speak prophetically into gaps that are in the policies and guidelines for government institutions dealing with development, especially in areas of HIV/AIDS, gender, youth, trade and poverty. We identified monitoring of the implementation of our national budget as one way Christian professionals can engage with national developmental issues. Government normally comes up with good budget to address issues facing our nation but the citizen especially the church rarely hold the government accountable in the way it implements the activities.

Resolutions of the Savoy Hotel meeting were shared with the Evangelical Fellowship of Zambia (EFZ). Some of the resolutions were part of EFZ’s presentation to the Parliamentary Expanded Committee on Estimates. See below an article from the Post Newspaper which captured the EFZ presentation on the national budget.

Government should cut NCC Delegates –EFZ 9th February, 2009.

The Evangelical Fellowship of Zambia (EFZ) on Friday submitted to a parliamentary Expanded Committee on Estimates that the government should cut down on the number of National Constitution Conference (NCC) delegates due to the global economic crisis.

The committee, which was chaired by Lukulu East Member of Parliament Batuke Imenda, comprised chairpersons of all parliamentarian select committees.

Making the submission on the 2009 budget estimates, EFZ advocacy programme officer Myiya Mwandawande said the current economic situation could not support such a large number of delegates at the NCC.

“With the current economic meltdown, we ask government to scale down the number of membership in the NCC in order to free up some resources for economic development. We are aware that there are people participating in the NCC in the name of the church. But I would like to state that these are some of the people government can remove because EFZ is not participating in the NCC. So these people are either representing themselves or their individual churches, not the EFZ,” he said.

Mwandawande further submitted that the government should reduce on the number of ministries and channel more funds into job creation.

“We recommend that the government reduce the number of ministries in order to have a lean government which will exhibit government’s commitment to save money. These funds will in turn be redirected to the social sector such as education and health. We further recommend that the government should avail more funds towards the preservation of jobs and creating new ones and ultimately protecting those in the mines,” he submitted.

Mwandawande also said the government should cut down expenditure on VIPs.

Government should cut down expenditure on VIPs through Ministry of Works and Supply. We therefore ask government to rationalize expenditure toward actual poverty reduction programmes aimed at empowering communities through social and economic sectors’ increased funding. We ask the government to uphold to windfall taxes in the mining sector. Funds raised from same should be directed to the social sector,” he said.

On agriculture, Mwandawande submitted that members of parliament and the government review the use of funds channeled to the agriculture sector.

“The government together with all the stakeholders should develop an accountability and transparency programme to deal the agricultural sector. Members of parliament and government to review the actual expenditure for funds availed to small scale farmers and the improvement of food security. We recommend the review of staff and ministerial heads who mismanaged the resources in the previous financial year. It would be outrageous to give them custody of extra funds,” submitted Mwandawande.

Press Statement

On the 2009 National Budget

By Micah Challenge Zambia in conjunction with  the Ndola Pastors Fellowship

February 11, 2009

As pastors in Ndola we are very conscious of the environment in which God has placed us in. As we release our statement on the National Budget which was presented to Parliament on 30^th January 2009 by the Hon. Minister of Finance and National Planning, Dr. Situmbeko Musokotwane for the year 1 January 2009 to 31 December 2009. The Theme of the budget was “Enhancing growth through competitiveness and diversification.”

This budget was presented on the backdrop of the Global economic and financial crisis and which significantly affected performance of the economy in 2008 and will pose challenges in the quest to reduce poverty levels as desired under the FNDP and Zambia Vision 2030. As we look around on the Copperbelt we are already seeing the effect of the global economic melt down.

Positive Steps

We would like to start by commending the government for the positive indicators that the Zambia economy had registered in 2008. However, the good fortunes where turned round in the fourth quarter as Zambia started to feel the effect of global economic recession. We would like also to commend the government for some positive outlooks contained in the 2009 National Budget. Some of these are:

1. The proposed 37 percent increase in the allocation to the Agriculture Sector this year.
2. The Government’s commitment to extending the benefits of growth and development across the whole nation through the devolution of appropriate service deliveries to local authorities.
3. The Government intends to address the question of competitiveness by dealing with the high cost of doing business.
4. The Government has a commitment to the development of the agricultural sector as a key to the poverty reduction program.
5. The Government has set up three initial Multi Facility Economic Zones in Lusaka and the Copperbelt
6. The Government has outlined efforts to improve the performance of the tourism sector.
7. The government has allocated 12.9 percent of the budget to the health sector.

Major Concerns

1. Poverty Reduction

The budget speech does not march the deeds in the yellow book. Under poverty reduction programs (PRP), there is money allocated for workshops, conferences, audits, management of petroleum, paying outstanding utility bills, drafting legislation, construction of offices, travel and production of documents, honestly how low can you refer these aspects to (PRP) when you want to achieve growth by 5%. There is a lot of wasteful expenditure.

We would therefore ask our Members of Parliament to help the nation understand that the budget speech does not meet with the reflections in the yellow budget. We would like to see a more pro-poor budget that meets the aspirations of the majority of the poor and helps us to attain the Millennium Development Goals.

Surely, in a year of financial crisis, falling commodity prices and less revenue, the Ministry of Works and Supply used K9.537 billion in 2008 for very important people (VIP) residential furniture, curtains, carpets, linen and banqueting suite. This year another K3.286 billion has been allocated for maintenance of VIP houses and other leaders’ houses, translate all these amounts into education and health services. Genuinely, would you say these expenditures carry on appreciable social and economic return?

We therefore asks our government to rationalize expenditure towards actual poverty reduction programs aimed at empowering communities through social and economic sector increased funding.

2. Auditor General Report

It is saddening to know that huge sums of money as much over K700 billion are being plundered at the expense of National Development. We ask our honourable members of parliament to come together and formulate a plan together with civil society and the church on how we can recover that money because the government has proved to have failed to bring the culprits to book.

Our concern is that the same staff who mismanaged the resources in the previous financial year are yet to be in custody of even extra 2 trillion. We also call on Members of Parliament to strengthen various investigative wings of the government such as ACC, DEC and the Police in order to intensify the fight against corruption.

3. Mining

This year’s budget indicates that the mining sector recorded positive growth of 4.9 percent in 2008, comparing favourably with growth of 3.6 percent in 2007. Our concern in this sector is dropping windfall and reduction of mineral taxes. The mining companies have been complaining about costs of inputs in production. However, the recent development shows that ordinary oil has come down by US$ 100 per barrel which is about 60 to 70percent down. How has that affected the profitability of the mines? “How come they are closing?”

We are therefore asking government to re-direct that money for the windfall to the social sectors or rather than hike the P.A.Y.E for the worker. It is our sincere hope that our members of parliament will help us in the deliberations to ensure government changes this decision regarding the windfall and reduction of mineral taxes, Zambian also need to benefit from copper resources.

4. Agriculture and Food Security

We ask government to channel more resources to agriculture and other tangible agro programs that will benefit small scale farmers at household level. It is our conviction that our members of parliament will help during the subsequent deliberations on the budget to ensure the monies are utilized for the purposes that will serve communities at household level as compared to workshop, fuel and travel allowances for government workers. The K35 billion for small-scale farmers meant for ensuring national food security is welcome. However, as we ask our members of parliament to ask government to review the actual indicated expenditure of these allocations, with a focus to improve food security at household level.

5. Social Sectors

We welcome the increase to the allocation in the health sector by 12.9 percent. However, our concern is raised on why the Zambian Government has failed to adhere to their commitment to increase the health budget in line with Abuja declaration 2001 of 51 heads of state Zambia inclusive of 15% commitment towards budgeting to the heath sector. Zambia’s health sector requires urgent redress to end premature death resulting from deficiency in health service delivery. Our appeal to the government and our members of parliament is that for us to achieve all the MDGs related to health we need to ensure that all resources allocated to the health sector are prudently managed and ring fenced towards actual households and individual health priorities.

Final remarks

1. The economy is too dependent on mining though pronouncements have bee made to diversify the economy though not much has been done. We call on the government to learn from the current fall of copper prices and other commodity prices to institute measures to diversify the economy by seriously promoting agriculture, tourism and manufacturing.
2. The budget does not seem to address specific interventions which can lead to economic recovery. At the same time the budget is not realistic because the government is thinking in terms of raising more money without telling us how they are going to cut down on the costs. We recommend that the government reduces the number of government ministries in order to have a lean government which will exhibit government’s commitment to save money in order to redirect more resources to social sectors such as education and health.
3. We call on government to enact a specific bill which will lay out its plans and commitments to infrastructure development.
4. We observed that Decentralization is a good strategy. However, this can not be fully implemented due to lack of capacity in the local authorities and if not checked this can lead to gross mismanagement of the resources
5. We call on the government to release monthly reports to show how the budget is fairing. This information can be made available in the Parliamentary Constituency Offices. We believe that making this information readily available will increase accountability.
6. The government is called upon to devise an industrial revolution plan which will see us add value to raw materials such as copper, uranium, and cobalt in stead of the present trend of exporting raw materials.
7. Economic development zones: is this the most strategic way to develop our economy. Why only relocate economic Zones on the Copperbelt and Lusaka. We need economic Zones to set up in rural areas as a well of stimulating rural development. Furthermore industries should be taken to places where raw materials are found. It was also noted that the present design of the economic zones favour more foreigners than indigenous entrepreneurs. The government is also called upon to consider setting up an economic zone in Ndola’ as Industrial area which seems to be going to waste due to lack of economic activity in the area. As a way of expanding the manufacturing base we would like to call on the government to locate Multi Facility Economic Zones in places where there are raw materials instead of localising these facilities in Lusaka and the Copperbelt only.
8. We also call on the Government to quickly conclude business in the NCC in order to free up some resources for economic development.
9. We call on the government to reduce interest rates in order to stimulate economic activity by reducing the cost of doing business.
10. We call on the government to deal with the budget cycle in order follow through and implement the budget. We propose that the government considers presenting the budget to Parliament by October rather the preset trend of presenting the budget in January or February.
11. We call on the government recapitalize NCZ in order to show its commitment to the agriculture sector. It does not make sense to import fertilizer at a high cost when the same can be sourced locally and save the nation missions of forex. If the government does not have a capacity it should invite a reputable foreign investor to partner with in order to revamp NCZ. This we believe will help build the capacity of the fertilizer support program
12. We do not agree with government intentions to run the mines. Instead this can be done in partnership with companies local or foreign and shares floated on LUSE in order for citizens to participate in financing these institutions.
13. It is our sincere hope that our members of parliament will help us in the deliberations to ensure government changes this decision regarding the windfall and reduction of mineral taxes, Zambian also need to benefit from copper resources.
14. The K100, 000 increase on the threshold PAYE (K600, 000 to K700, 000) does not realistically represent majority of those in employment. We would like to ask government to increase the PAYE to the minimum amount of K1, 800,000 to meet the ordinary Zambian household needs according to the food basket.
15. We also call on the members of Parliament to prioritise the empowerment of the youth and scale up HIV interventions among the youth.