Govt employee salaries consume 42% of national budget – HH

Govt employee salaries consume 42% of national budget – HH

President Hakainde Hichilema – HH has revealed that government workers that are just over 400,000 individuals consume 42% of the entire annual government revenues, a situation he described as unsustainable and has led to lack of funds for investment.

And a check by Zambian Business Times – ZBT on official statistics shows that Zambia has an average of about 10 million adult population, meaning that 9.4 million adult citizens who are not employed in government, plying their trade in the informal sector have to fend off the remaining 66% of the budget.

This clearly shows that the government annual budget spend is anchored on consumption expenditure rather than investments, a situation that has perpetuated a vicious poverty cycle and stagnated economy.

Ironically, however, it is the new dawn government itself that had aggressively increased the government payroll in its first year by employing over 30,000 teachers and over 11,000 health workers.

HH challenged his meeting of Permanent Secretaries – PS’s to do more and improve on their delivery to grow the economy so that this ratio or percentage of 42% can be corrected. He urged them to do more by channeling more resources to investment than consumption.

But analysts say it’s failure by successive government to leverage the massive copper industry in generating billions of dollars in annual revenues that continues to elude even the new dawn government which is the elephant in the room.

Large scale copper mines are currently enjoying tax incentives and VAT refunds, the economy has not been rebased for over a decade such that even targets for industry tax and non tax revenues are not based on current and relevant data.

More over, civil servants are not even well paid in real terms, when you look at the escalated cost of living and perpetual depreciation of the Kwacha. With the Kwacha to dollar rate currently at about K26 to US$1, with an average salary of K7,000 for the larger government workers groups, this works out to a monthly salary of a paltry $270 per month.

Prominent constitutional lawyer John Sangwa SC had revealed during Radio Phoenix’s let the people talk program that high court Judges get about $1,000 (K26,000) per month, and these are considered among the most admired high paying jobs in government.

With these numbers, it’s very clear that Governments key challenge is to expand the local private sector and local industries that would lead to generating more tax and non tax revenues. The need to leverage the massive copper mining industry can not be overemphasized.