LUSAKA, (Xinhua) --
Zambia’s Finance Minister Alexander Chikwanda
unveiled on Friday the 2016 budget with the declaration that the
year will witness further challenges to government’s efforts to
raise the economy to higher heights in order to reduce poverty.
Announcing the 53.14
billion Zambian kwacha (about 4.5 billion U.S. dollars) budget
in parliament, the Zambian minister said the southern African
nation should be prepared to meet the challenges that may arise
from externally-induced shocks, especially further falls in
commodity prices and their knock-on effects on the economy.
The Zambian economy
has come under extreme pressure this year due to falling copper
prices and power shortages caused by reduced waters in its
reservoirs, resulting in the local currency depreciating
significantly and fueling skyrocketing of prices of products and
services while mining firms have threatened to cut down
production and retrench thousands of workers.
He said the
expenditure for next year represents 25.8 percent of Gross
Domestic Product (GDP), with 42.11 billion Kwacha of the budget
expected to be raised through domestic revenues while grants
from cooperating partners will represent 550 million kwacha.
intends to spend 36.1 percent of the budget on general public
services which includes allocation of funds to a sinking fund to
for repayment of three Eurobonds the government has acquired ,
cost related to the general elections, among others.
The Zambian minister
admitted that the adverse global economic environment
experienced this year has negatively affected the country’s
economic growth which has now been revised from 7.0 percent to
The revision of the
economic growth target is due to weaker global economic
activity, especially in China and the Eurozone which has
dampened demand for commodities and lowered mining sector
output, he added.
“The poor rains
last season also led to an unfavorable performance of the
agriculture sector. Further, electricity supply constraints in
the second half of this year, will affect output across all
sectors of the economy,” he said.
objectives, the government intends to achieve real GDP growth
rate of 5.0 percent, increase domestic revenue mobilization to
at least 20.4 percent of GDP from 18.1 percent projected in
2015, reduce budget deficit to 3.8 percent of GDP from 6.9
percent in 2015 and limit domestic borrowing to 1.2 percent of
objectives include maintaining a single digit inflation with an
end-year target of no more than 7.7 percent, accelerate
diversification of the economy, maintain international reserves
at no less than 4 months of import cover and creation of
employment opportunities through accelerated implementation of
programs such the country’s Industrialization and Job Creation
Strategy and the Youth Empowerment Action Plan.