Analysis: CHARITY MUSAMBA
THIS pre-budget analysis was guided by the following three national development commitments espoused by the current ruling Patriotic Front government. These are:
• Pursuit of a pro-poor development agenda through the provision of developmental goods and services to the most needy, especially those in the rural areas
• Provision of jobs and employment opportunities, particularly among the youth – at both national and local level
• Leaving no one behind in the national development process through the pursuit of Inclusive growth and a people-led governance system
In practical terms, these commitments entail giving urgency to ensuring that annual expenditures concretely contribute to the reduction to poverty and inequality and that there is sufficient political will to drive this cause to a successful end by October 2019.
What is a pro-poor budget?
At a general level, the first indicator of a pro-poor budget relates to the extent to which it is aligned to the public policy framework on a nation’s poverty and inequality reduction agenda. There are two major straightforward additional characteristics used to this paramount indicator. One, on the expenditure side, a pro-poor budget is characterised by significant allocation of resources to basic social, economic and political sectors that directly reach the segment of a national population that is classified “poor”. In particular, these allocations should be directed towards enhancing the poor people’s access to economic, financial, social and political opportunities. Two, on the revenue side, such a budget places emphasis on progressive taxation for the purpose of ensuring that the burden of taxation on incomes is aligned to the levels of earnings.
In relation to the 2018-2019 national budget of Zambia, this spending plan should be married to the pro-poor agenda with on-the-ground action. However, it is important to note that higher levels of spending in areas that target the poor cannot all be made through the mere increase of the overall budget expenditures. More importantly, the efficient use of available resources and a keen focus on the outcomes have the potential to lead to greater impacts on reduction in poverty and inequality
So where should the money go in the 2018-2019 national budget?
It is important to mention from the outset that simply pumping resources into sectors perceived to benefit the poor is not “pro-poor” budgeting.
This needs to be complemented by a solid connection between the budgetary inputs and quality outcomes. In particular, it is important to acknowledge that the heavy and narrow focus on economic growth and efficiency in the last two annual budgets (2016-2017, 2017-2018) has greatly contributed to the decline in human development and public service delivery in Zambia.
While growth is important, it is by no means the only determinant of development, especially in the prevailing development context of Zambia.
Based on these notions, it is anticipated that for the 2018-2019 national budget, there will be greater spending on the following development areas:
• Agriculture sector: Resources should be directed towards the provision of adequate and affordable farming inputs to the small and medium-scale farmers in a timely fashion. This should be complemented with functional public extension services, access to markets and information of pricing. Special attention should be directed towards female farmers who constitute the largest proportion of small and medium-scale farmers. The guiding agenda for Government in this regard should be diversification and value addition
• Tourism sector: This Sector should be adequately resourced as it provides a major source of employment for the youth, especially those located in remote areas. Financing should be tailored towards supporting locally-owned enterprises, capacity building and skills training opportunities for the youth as well as the provision of basic public services such as education, health, communication and recreation facilities.
• Education and health sectors: More resources should be directed towards the frontline service delivery institutions such as hospitals, health centres and education institutions, especially in the peri-urban and rural areas as opposed to the current tendency of financing administrative expenditures at national and provincial levels.
• Social protection sector: Government should continue to finance social protection programmes but should ensure that the provision of support is based on a solid and reliable mechanism. The main aim should be to ensure that the most and appropriate beneficiaries access this form of support.
• Access to development infrastructure: More resources should be directed towards ensuring that the poor and vulnerable communities in Zambia have access to reliable and affordable energy as well as functional systems of justice.
In this regard, Government should ensure that programmes such as the rural electrification programme, initiatives on renewable energies and access to justice are adequately funded and implemented.
Government should not to maintain the same financing model of routinely dishing out resources, including subsidies, without paying sufficient attention to the importance of placing focus on improving the quality and outcomes of the annual development programmes.
Pre-requisites for the successful execution of a “pro-poor 2018-2019 budget” in Zambia
It is important to note that how public expenditures affect poverty and inequality is a function of many factors.
Some of these include resource allocation, the proportion of allocated resources actually reaching the poor and vulnerable and the quality and use of services and goods delivered to the poor.
In this regard, for the 2018- 2019 budget to lead to the desired results on poverty and inequality in Zambia, it would be pertinent for the Government to consider the following;
• Re-allocation of resources: Withdrawing resources from categories currently taking up large shares of the budget but have little or no impact on poverty reduction. The focus should not be on decision-making involved in the budgeting process but more importantly on enabling the poor influence in the allocation of resources for development
• Strengthening the Expenditure Policy: With the aim of making the disbursement timely and predictability in accordance with budgets.
• Effective and comprehensive response to the current debt crisis: Coming up with such a mechanism in order to ensure that mobilised resources and budget allocations, particularly to social sectors, are not negatively affected by Government’s actions on debt servicing.
• Improve the capacity of public expenditure management and reporting: Building the capacities of relevant ministries for undertaking the budgetary process as well as in executing the budget and reporting. It is pertinent to build these capacities for the purpose of ensuring financial transparency, accountability and efficiency.
The author is a lecturer at the University of Zambia.
Analysis: CHARITY MUSAMBA