2025 NATIONAL BUDGET HIGHLIGHTS
By Sean Tembo – PeP President
1. 2024 economic growth is projected to decline to 2.3 percent from 5.4 percent in 2021 at beginning of New Dawn administration;
2. External debt has grown to $15.17 billion from $11 billion at the beginning of the New Dawn administration in 2021;
3. Annual inflation is 15.6 percent compared to an average of 10.3 percent in 2021;
4. ZMW-USD exchange rate averages K26.30 compared to K15.80 on 24th August 2021 when New Dawn administration took over the reigns;
5. Monetary Policy Rate is now 13.5 percent compared to 8.5 percent in August 2021, meaning high interest to borrowers for MPR linked loans;
6. Statutory Reserve Ratio has been increased by BOZ to 26 percent, from 7.5 percent in August 2024, meaning less money available to commercial banks to lend to economic players;
7. 2024 National Budget is projected to have a deficit of 11.6 percent which amounts to over expenditure at a time the country does not have money;
8. The 2024 Budget Deficit as a percentage of GDP is projected at 6.4;
9. Domestic Debt is now K225.5 billion compared to K89.5 billion in August 2021, which represents a 252 percent increase in only 3 years;
10. Domestic Arrears, which is money that Govt owes to various suppliers of goods and services in the country, is now K79.8 billion compared to K18.2 billion in August 2021. This means reduced liquidity needed for the private sector to grow;
11. The private sector only accounts for 36.9 percent of all credit issued by financial institutions while the balance of 63.1 percent is attributed to GRZ. This exemplifies the extent to which Govt’s increased borrowing using Treasury Bills and Bonds has crowded out the private sector;
12. Total budget for 2025 is K217.1 billion, representing 26.6 percent of GDP. In the 10 years prior to 2021, the national budget averaged 17 percent of GDP, while between 2001 and 2011, it averaged 14 percent of GDP. This means there is a high appetite for over expenditure under the New Dawn administration;
13. A total of about K19 billion will be spent on Defense & Public Order. For a country which is not at war and which has very high levels of poverty, this appears to be misplaced expenditure;
14. The fixed charges of K5,000 and K1,500 to be paid to Govt promoters of local artists and venue hosts per event is way too exorbitant and will kill the local music industry. For the majority of local music events, the gate takings do not even amount to K1,000, so where will artists get K5,000 to pay Government every time they perform a gig?
Anyway, the Future is SET ✌️✌️✌️
SET 28.09.2024