Sean E. Tembo
PeP STATEMENT No.82 ISSUED ON TUESDAY, 2nd NOVEMBER 2021: FOR IMMEDIATE RELEASE
1. As Patriots for Economic Progress (PeP) we have noted with interest the 2022 National Budget that was presented to the nation through Parliament by the UPND administration last Friday. Our considered view is that the 2022 national budget is not significantly different from the other national budgets that have been presented over the past 10 years. It still relies heavily on debt to finance consumption, makes little effort to dismantle domestic arrears, places greater emphasis on handouts (social cash transfer and farmer input support program) at the expense of economic empowerment to citizens through small loans, still crowds out the private sector from access to reasonably priced finance due to high levels of domestic debt and is too expansionary as it seeks to hire as many as 40,000 civil servants all in one fiscal year.
2. As Patriots for Economic Progress we also wish to put it on record that it is extremely unlikely that the International Monetary Fund (IMF) will approve the US$3 billion bailout loan which the Government is seeking. The standard operating procedures of the IMF are to only bailout countries which are making an honest effort at implementing austerity measures and not those who are pursuing an expansionary fiscal policy. It must be noted that the 2022 National Budget is more expansionary in nature than the national budgets of the past 5 years which the IMF refused to fund through a bailout loan. The fact that there has been a change of administration in itself matters less to the IMF. The key consideration is the fiscal stance taken by a given administration. In this particular case, given the UPND administration’s decision to provide unconditional free education to the poor and rich alike and to exponentially expand the civil service through the recruitment of more than 40,000 civil servants in a single fiscal year, there is no question that Zambia’s 2022 National Budget is the most expansionary that Africa has ever seen in the past 20 years.
3. As Patriots for Economic Progress we wish to take this opportunity to advise the UPND administration to come up with a plan B regarding funding of the 2022 National Budget, in the likely scenario that the IMF decides not to extend a bailout loan. Such a plan B could consist of implementing free education in a phased manner as opposed to rolling it out all at once. In this regard, Government could consider implementing free education for grade 1 to 4 during the 2022 fiscal, grade 5 to 8 during the 2023 fiscal year, grade 9 to 12 during the 2024 fiscal year and tertiary education during the 2025 fiscal year. Such a phased approach would exert less pressure on the national treasury and also ensure an orderly implementation of the free education policy.
4. As Patriots for Economic Progress we further bemoan the lack of effort by the UPND administration in the 2022 national budget to make the tax burden fair and equitable between corporate taxpayers and individuals. We fail to get the rationale why Government decided to introduce a 5 year tax holiday for ceramic floor tile manufacturers such as Marcopolo Tiles while failing to adjust the 37.5% upper band for Pay As You Earn from the current K6,900 despite the huge increase in the cost of living that has taken place over the past year. Why should foreign Chinese manufacturers be given a tax holiday at the expense of the Zambian workforce which is heavily taxed?
5. Given how unfair, how unreasonable and how unrealistic the 2022 National Budget is, we wish to call upon the UPND administration in general and the Minister of Finance in particular to consider withdrawing the 2022 National Budget from Parliament so that it can be re-drafted. If the proposal to withdraw the 2022 National Budget is not considered, the nation will be headed for economic chaos of untold proportions in 2022. The nation should take this as a timely warning.
Thank You and May God Bless the Good Citizens of the Republic of Zambia and Our Ailing Nation.
YOURS SINCERELY
SEAN E. TEMBO (SET)
PARTY PRESIDENT
PATRIOTS FOR ECONOMIC PROGRESS (PeP)