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"The 2007 National Budget: Politically practical, or practically political?"

A 2007 Post budget synopsis of the Civil Society for Poverty Reduction (CSPR) Network

February 2007

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Following the announcement of the 2007 National Budget, the CSPR, a Network of over one hundred and forty Civil Society Organizations from diverse backgrounds and from different parts of the country, puts forth its comments and suggestion on the 1st post-Fifth National Development Plan (FNDP) National Budget.

Driven by a vision of "A Zambia In Which All Of Its People Enjoy All Basic Needs" and having contributed to the National 2030 Vision of Zambia becoming a 'Middle Income Prosperous Nation By 2030', CSPR is compelled to carry out a postmortem of the 2007 National Budget, to assess the extent to which this policy instrument practically supports a pro-poor development agenda aimed at uplifting the lives of the majority of Zambians that live in deplorable conditions, as promised in various international declarations and treaties such as the Millennium Development Goals (MDGs), sector strategies and the more recently launched FNDP.

  1. On Face Value

    The theme of the 2007 National Budget, 'From Stability to Improved Service Delivery', presents an admission that the previous budgets have focused largely on macro economic aspects and fallen short of paying optimal attention to the delivery of quality and essential services to the majority of the people. Government is also echoing the demands of civil society that macroeconomic stability and positive economic growth be translated into improved standard of living for the people. We welcome these admissions and echoes as moves in the right direction in the delivery of the many development pronouncements made at local and international forums.

    CSPR acknowledges and commends the Government on the positive macroeconomic gains during 2006. Further, the 2007 Budget strives to reflect the development priorities of the FNDP, a practical step after the adoption of a national development strategy, an issue many actors encouraged Government to do. Although it falls short on some of the resource targets, it is largely aligned.

    The costing of decentralization is commendable as one of the core minimum requirements for the effective implementation of the FNDP.

    However, there continues to be a lack of clarity on how politically practical the Government is willing to take the pro poor development agenda as evidenced from the continued high allocations to defense in a seemingly peaceful country, and to political personnel, especially when compared to people-centered sectors such as social security, water and sanitation and the health sectors.

    The 2007 budget of approximately K12 trillion or 26% of Gross Domestic Product (GDP), would appear ambitious, especially in comparison to the approximately K10 trillion budget in 2006. However, the confidence to fund over 70% of the budget from domestic resources is commendable.

  2. 2006 Performance

    CSPR commends government for the positive macroeconomic indicators achieved in 2006, including the upward GDP growth rate of 5.8% (though short of the 2006 target of 6%) ; single digit end year inflation of 8.2% compared to the previous year's end year inflation of 15.9%; and the within target domestic borrowing of 1.5% of GDP. Zambia was also fortunate to experience outstandingly high copper prices on the global market, at a time of increasing oil prices and hence cushioning the country's terms of trade.

    We further congratulate the Government for spearheading concerted stakeholder efforts for Zambia's shift from a Heavily Indebted Poor Country (HIPC) to a level of annual debt service of US$33.9 million compared to US$373.2 million per annum in 2004. Zambians expect to reap the benefits of this debt relief through increased resource allocation to priority and previously competing expense lines. It is necessary at this point to remind the Government of the punitive experiences under high debt levels and caution against already threatening signs of borrowing for expenditures on ventures that will not directly generate the resources required for repayment.

    On the overall 2006 budget performance, we are pleased that Government has reported that despite an overall budget shortfall of 8.4%, cash releases for Poverty Reduction Programmes (PRPs) were in line with the budget. We will keenly follow up the utilization of these resources in line with the priorities of the poor.

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