Finance Minister says he will endeavor to achieve fiscal sustainability by reducing the deficit over the medium term to sustainable levels of 3 to 4 percent of Gross Domestic Products GDP.
Speaking at the Second Quarter Ministerial Economic Brief, Dr Bwalya Ng’andu said he will ensure that the ministry enhances measures to achieve fiscal restraint or consolidation, by implementing well targeted expenditure measures.
Mr Bwalya said the ministry will work in increasing capacity to mobilize resources by increasing efficiency in collection of tax revenue and fixing leakages in Non-Tax revenue collections through increased use of IT solutions.
“Another priority will be ensuring debt sustainability, which is cardinal in reducing fiscal risks and vulnerabilities, our main focus will be to enhance the pace at which we will be implementing the austerity measures that were pronounced by Cabinet,” He said
The minister said he will work to ensure that arrears owed to suppliers and contractors are dismantled through the commencement of a calculated strategy towards dismantling of arrears to ease liquidity in the market, improve financial sector performance, get businesses to operate smoothly and reduce lending rates to get the economy back on a higher growth path.
He said the vision of the ministry will therefore be to attain fiscal fitness, increase tax and non-tax revenue collections, sustainable debt levels, reduced arrears, a healthy financial system, reduced lending rates, and increased provisions for the social sector.
“I would like to see an economy where all citizens meaningfully participate in economic activities and meet our obligations” Dr Ng’andu said.
The Minister adds that first quarter of 2019, preliminary data indicates that the economy grew by 2.6 percent compared 2.7 percent in the first quarter of 2018.
He said the growth was driven by the wholesale and retail and information and communication sectors, the financial and insurance sector also performed favourably and Positive growth was also recorded in electricity generation and transport. Mining and Agriculture growth was subdued.

“Risks to growth include electricity load management being carried out by Zesco that will affect most sectors, further, the continued lower investment and subdued commodity prices may affect copper production. Climate change challenges continue to weigh down agricultural production and electricity generation” He said.
“On the basis of these risks, we project that growth will be in the 2 to 3 percent range in 2019, and to gradually pick up in 2020 and the medium term,”.
Dr Ngándu said over the first half of 2019, total revenues and grants amounted to K32.6 billion, 8.31 percent above the projection of K30.1 billion.
He said domestic revenues at K32.1 billion were above target by 9 percent as this was mainly driven by higher nontax revenues collections, mostly from declaration of dividends.
He said in the quarter under review tax revenues, VAT collections were higher than projected by 17 percent, although refunds have increased to an average of K1.4 billion per month from around K800 million in 2018. This has deprived the revenues required for capital and social sector spending.
The Minister said total expenditures were above target by 6.4 percent at K46.8 billion, as this was mainly on account of interest payments on debt which were 27.3 percent higher than projected at K9.2 billion, due to the depreciation of the Kwacha in the second quarter of 2019. Most expenditure items were constrained below budget projections during the quarter.
He said the target for 2019 remains to reduce the budget deficit to 6.5 percent of GDP, a level which even if lower than last years is still high when compared to our objectives of getting the budget deficit below 4% of GDP.
He further pointed out the elevated fiscal deficits have been driven, by higher than programmed external project financing hence, ggovernment has taken measures for management of project disbursements, debt cancellation and rescheduling to bring down deficits to sustainable levels. This is in line with the SADC macro convergence regional targets.