The Good, The Bad, The Ugly & Not-So-Sure 2017 Budget Summary

On 11 November 2016, we had the 2017 budget presented by the new Minister of Finance Honourable Felix Mutati. This is perhaps the first budget in which the most important thing I wanted to hear was not the Pay As You Earn adjustments because I have been out of formal employment for over a year now. I was more interested on the impact of whatever pronouncements he would make on small businesses, or a start-up like the one I am in the process of setting up. So like I have done for the past few years, I present what I think were the interesting parts of the budget and as usual ignored quite a lot.

Let me begin by saying that the K64.5 billion 2017 budget begins with pretty much the same rhetoric we have heard year in year out and quite frankly it is becoming boring now. We are told that we need to diversify, agriculture is the 'holy grail' to our diversification agenda and this budget proved that. We are also told that the government aims to be prudent. The budget is spiced with low inflation aspirations, stable forex (which based on 2016, we need to put it in a straitjacket) and a warning of difficult times ahead. With that little preamble, I present to you the Good, the Bad, the Ugly and the Not-So-Sure 2017 Budget Summary.

The Good

• In the first nine months of 2016, mobile users increased from 11.5 million from 10.9 million in 2015. This is quite impressive considering we are a population of about 15 million that is 77% of the population people with mobile phones.

• It is about time the cashew nut industry was raised from its doldrums in Western Province. Government has launched the Cashew Nut Infrastructure Support Programme, valued at US$55.4million. The project will target 600,000 beneficiaries in Western Province.

• Government will by the end of 2017 move to cost reflective electricity tariffs to attract private sector investment while maintaining the life line tariff to protect poorer households. It will further, implement the phased removal of electricity subsidies. We must brace ourselves for electricity to become more expensive. I just hope that this devilish loadshedding will end.

• Youth Resettlement Schemes will be established through which land and start-up kits will be provided to the youth to enable them engage in agriculture and agri-business for their livelihood. If there is a place with no loadshedding, free wifi, and fuel is K5/litre sign me up.

• Most of the land in Zambia is not on title as only about 200,000 parcels of land are on title. Government will in 2017 commission a pilot programme in Lusaka that will commence the process of titling all land in the Province. It is about time.

• Government will in 2017 commence distribution of free sanitary towels to girls in rural and peri-urban areas. The minister should have even gone a step further by making them tax free.

• Timely and quality statistics will be critical in order for us to monitor and evaluate the progress we are making. The minister implores all Government Agencies to compile and maintain credible statistics. The minister should have also told them that they should share the statistics. Does he know how painful it is to get data from government ministries?

• If you needed any more evidence that the agriculture sector is the most loved, here it is. It has been proposed to increase the capital allowance for plant, equipment and machinery used in farming and agro-processing to 100 percent from 50 percent. Farmers should be mightily excited

The Bad

• The key sectors have been identified for intervention as agriculture, industrialisation, tourism and mining. This is in the bad section because we now need to start asking the tough questions. Are we getting our policies right? Mining still accounts for 70% of export earnings what are the other sectors doing nkanshi. From the days of Kaunda we have known we cannot depend on the copper mines. But still here we are as dependent as ever.

• There is yet again the creation of other funds. The Agricultural and Industrial Credit Guarantee Fund, Skills Development Fund and the Tourism Development Fund. The principle of these funds is awesome; however, often these funds rarely reach the intended targets. There are questions around the disbursing of funds and who actually receives it.

• It's been proposed to increase the exempt threshold for Pay As You Earn (PAYE) from K3,000 to K3,300 per month and increase the top marginal tax rate from 35 percent to 37.5 percent. This will hardly make a dent on the low income earners. That additional exemption has been swallowed up by inflation. I feel even a K500 difference would have been worth talking about.

• Customs duty on plastic shopping bags will increase from 25 percent to 40 percent. This is one tax I am a little disappointed was only increased by 15 percent. I would have loved it increased by say 50 percent. Supermarkets give plastics for everything, a toothbrush in its own plastic, toothpaste in its own plastic, imwe. No wonder our streets are littered with plastics because they are so cheap and carelessly dished out.

The Ugly

• The annual inflation which reached a peak of 22.9% in February 2016 has declined to 12.5% in October 2016. The minister expects inflation to fall to single digit by year end (boza is not a good thing). How? Just how is inflation expected to reach a single digit by year end when fuel prices just sky-rocketed to close to 40% increase. Ask for forgiveness for lying.

• Government to stop policies on export bans and it will refrain from using these instruments to regulate agricultural markets. My concern here is that so many subsidies go to the agricultural sector, aren't we just subsidising other countries? Until I am convinced otherwise this will remain in the ugly.

• Excise duty on air time will increase from 15 percent to 17.5 percent. Just great, as if airtime and bundles are not already expensive. This will make us resume sending text messages instead of calling.

The Not-So-Sure

• The theme of the 2017 Budget is "Restoring Fiscal Fitness for Sustained Inclusive Growth and Development”. This theme sounds like a PhD or master's degree thesis. I feel the words 'sustained inclusive growth' have been over used. Couldn't they have found an edgier theme like "Get Off Your Behind and Work"?

• The minister announced that he wants to support the creation of 100,000 jobs. He was sharp here. He did not say what type of jobs are to be created. Is it low skilled jobs like sweepers, grave diggers, or formal high skilled jobs like astronauts, marine biologist or neurologists?

• It will now be required that every person changing ownership of a motor vehicle to obtain a tax clearance certificate from the Zambia Revenue Authority. This will most likely make second hand vehicles more expensive and this is more administrative work.

• Vehicle carbon tax has been revised upwards. Owning a car will further becoming a liability. There are just too many things to be paying on it. The expected increase in spare parts and now carbon tax.

This budget had one central theme which I can liken to the movie, 'Taken'. This is the government telling us that, "If you do not pay your taxes, we will find you and you will pay." It is about the government raising revenue and squeezing us for every ngwee possible. As always the people with the widest smiles are the people in agriculture, their incentives just keep getting better. Overall, I was rather disappointed in this budget because there was very little in it that inspired me, especially when it came to the diversification agenda. At this point I will not be surprised if once again next year we have a similar budget.

So what things in the budget would have made your The Good, The Bad, The Ugly and Not-So-Sure list?

I strongly encourage you to read the full budget here >>> http://www.parliament.gov.zm/node/6051

How CSOs Can Help Feed Africa

The African Development Bank's CSO Forum was held on 26-27 May 2016 in Lusaka. The forum was held during the AfDB Annual Meetings. It focused on three areas energy, agriculture and jobs for youth. Over the two days the bank and CSOs met to chart the way in which there can be better collaboration between the two. In an earlier post, I informed you what the main objectives of the forum were, I can report back to you on whether those objectives were met. I was in the agriculture session. Therefore, that is what this piece will focus on that as well as other issues that emerged from the forum.

Agriculture breakout session

 AfDB's President Dr. Akinwumi Adesina in his address to the forum said that the bank was committed to strengthening CSO engagement. He also confirmed that the CSOs were needed in areas of advocacy. He further mentioned that Africa had so much potential for wealth creation. There were other speakers who addressed the forum such as Her Excellency Mary Robinson, founder of Africa2.0, Mamadou Toure and a representative for the CSOs came from the Non-Governmental Organisations Coordinating Council (NGOCC). Over the next two-day deliberations, CSOs and the bank engaged in various sessions.

In the agriculture session, there were some revealing statistics about the state of affairs of Africa's agriculture sector. Agriculture accounts for 25% of GDP in Africa and there are 33% of African children who live in chronic hunger. Africa also has a staggering food net import bill of $35.4 billion per annum. The statistics do not make great reading. AfDB has embarked on an ambitious initiative called Feed Africa, which seeks to take a commodity focused integrated approach. AfDB identified seven enablers that will make the Feed Africa possible- Increased productivity, realised value of increased production, increased investment in hard and soft infrastructure; finance expanded agriculture, improved agribusiness environment, increased inclusivity, sustainability, nutrition; and coordination. It is in these seven enablers that CSOs can find their roles to play.

Agriculture breakout session

AfDB recognises that strong partnership and collaboration with CSOs will make it possible to achieve agricultural transformation. CSOs also had the opportunity to present their concerns. There were concerns that research institutions did not want to work with subsistence farmers this is although subsistence farmers are the ones who feed Africa. CSOs also addressed the threat to indigenous seeds. The proposed agro-industrial parks by AfDB raised concerns among some CSOs that farmers would be denied access to land and other natural resources. It could also lead to some farmers being indebted.

On the second and final day of the forum it was great to hear what the agreeable plan was for agriculture. CSOs proposed that there was need for capacity building for all fields. It was important to exactly know what capacities are needed for farmers. AfDB together with CSOs need to identify what markets would help in the development of farmers. CSOs advised that there is a need to ensure all programmes and projects are demand driven and not multinational agenda driven. CSOs can ensure that improved nutrition goes hand in hand with improved livelihoods through agriculture. CSOs will also play a role in linkages, identifying opportunities and provide training for youth in agriculture. It was also important to provide land security for farmers as no one can invest in land that they know there is a possibility of being kicked out the next day.

It was an engaging two-day session at the CSO Forum. Both the AfDB and CSOs shared their challenges and expectations, which culminated in them arriving at a plan to move forward. The bank heard the concerns of the CSOs and it is hoped that they will take them on board. In the same vein, the CSOs heard the plans of the bank, and they should be open to collaborate and partner with them. However, as one participant stated that there have been too many meetings and conferences with nothing to show for it. Now is the time to begin implementation. Hopefully at the next CSO Forum, we shall be able to see the fruits of these sessions.

Why AfDBs CSO Forum Matters

This year Zambia will have the privilege of hosting the African Development Bank Annual  Meetings. The meetings will take place between 23- 27 May 2016 in Lusaka. During this event, there will be a special Civil Society Organisations (CSO) Forum, which will be held between 26-27 May 2016. The aim of the CSO Forum is to engage CSOs  and AfDBs senior management on the Bank's strategic focus on three priority areas- energy, agriculture and jobs for youth. We are becoming quite accustomed to hosting these international conferences in Zambia.

CSOs encompass a broad spectrum of organisations, which include community groups, nongovernmental organisations, labour unions, charitable organisations, faith-based organisations, professional associations, and foundations. The question that many might be asking is what exactly does AfDB hope to achieve with this CSO Forum and why should we care? For one, the strong statistical data shows that Africa has challenges regarding energy, agriculture and jobs for youth. Over 645 million Africans have no access to electricity services, and approximately 730 million people rely on traditional biomass for cooking and heating. Africa is the continent with most of the remaining arable lands of the world (about 65%) and basic conditions for growing crops; Africa should hence be able to feed itself, create jobs for youth and women and enhance incomes from agriculture. Africa has an estimated 60 percent of its population between the ages of 15 and 24, with 10 – 12 million youths entering the job market each year resulting in more than half of them unemployed, underemployed, or inactive.

The continent has many challenges yet at the same time possesses so much potential, which needs to be exploited. AfDB knows that there are a variety of stakeholders required in order to achieve the goals for their three priority areas. CSOs are one of the stakeholders whom AfDB wants to collaborate with in order to achieve their goals. CSOs play important roles within our society. AfDB recognises that CSOs amplify the voices of the poor and marginalised, partner with governments to provide social services, are a hub of technical expertise, increase public accountability among others. During the CSO Forum for each of the thematic areas, the round table groups shall come up with issues to be addressed by each of the players (CSOs, Bank, private sector, and collaboratively) and prepare a road map stipulating specific tasks and outputs.

When the forum is over it is hoped there will be a set of identified general themes and points of agreement on areas of collaboration between the Bank and CSOs. Key issues will have been identified to be taken forward in pursuant of the Bank’s evolving agenda focusing on the three focus areas among the High 5s. Groups or individual CSOs shall have been recognized with their comparative advantages in various ways such as technical and technological know-how, proximity and geographical location and factors that make them an appropriate and cost effective organ for delivering economic development. 

Now, what would a forum be without bloggers? Therefore, during the meeting you will be able to follow proceedings and take part through social media such as Twitter, Facebook, Instagram, and Flickr. I look forward to the CSO Forum where I am one of the official bloggers, and I will be updating with all the information you need to know. Of course, I will be letting you know if the outcomes were achieved.