Mutati: Pruning subsidies bearing fruit

By JAMES MUYANWA in Washington, USA –
FINANCE Minister Felix Mutati has said that Zambia’s painful but inevitable decisions have started bearing fruit with current positive economic outlook.
Mr Mutati said the major challenge going forward is how to balance on the need to ensure debt sustainability on hand and the need for infrastructural development on the other.
The minister said in an interview upon arrival here on Thursday to attend the International Monetary Fund (IMF)/World Bank annual October meetings that the Zambian economic outlook was now brighter.
The painful decisions which had borne fruit include the removal of subsidies on things like electricity and fuel as well as the reforms in the Farmers Input Support Programme (FISP).
He said the reforms in the agro sector and those in the energy sector were acknowledged by even bodies like the IMF.
He said the Government had under the 2017 national budget embarked on an economic journey to restore fiscal fitness whose results have changed the outlook of the country’s economy.
The efforts have yielded positive results in terms of the positive economic fundamentals like the reduction in inflation rate, stabilisation of the lending interest rates, the improvement in the value of the local currency and occasional trade surpluses.
Mr Mutati said the Government would continue addressing some of the concerns recently expressed IMF through Article IV Consultation with Zambia, the rising debt stock for the copper-rich southern African country.
He said it was for that reason that there was need to balance between the debt sustainability and the infrastructure growth on the other hand.
Article IV of the IMF is an instrument that governs the fund in providing guidance on the economic outlook of its member countries.
Mr Mutati said the latest Article IV result basically outlines an assessment undertaken by the fund in June this year, and offers guidance on issues Zambia should focus on going forward.
He also said the 2018 National Budget was focused on reducing fiscal deficit to 6.1 percent and addressing some of the remaining concerns to ensure continued fiscal fitness.
To this effect, the Government had reformed legislation and was focusing on accelerating the management of systems in the coming year, to assist in fiscal consolidation.
To ensure domestic resource mobilisation, he said the Government was undertaking the modernisation of the Zambia Revenue Authority, including benchmarking its performance.
The specific areas of modernisation include automation, information technology, customer service, taxpayer education and enforcement.
He was confident that the Zambian would continue on it’s the current growth path next year and beyond because of the reforms undertaken and those earmarked for next year.