Friday, 27^th September, 2024

The House met at 1415 hours

[MADAM SPEAKER in the Chair]

NATIONAL ANTHEM

PRAYER

_______

MOTION

BUDGET ADDRESS

The Minister of Finance and National Planning (Dr Musokotwane): Madam Speaker, I have the honour to present the Estimates of Revenue and Expenditure for the period 1^st January, 2025 to 31^st December, 2025. This is pursuant to Article 202 of the Constitution of Zambia (Amendment) Act of 2016.

Madam Speaker, this is the fourth Budget that the United Party for National Development (UPND) Government is presenting to our nation. It is special in two respects. Firstly, the 2025 Budget marks the start of a new way of processing the budget here, in Parliament. The new process will give the hon. Members of Parliament and the public at large more time to scrutinise our budget proposals. In this sense, this is yet another important step in delivering better governance.

Madam Speaker, the second reason the 2025 Budget is special is that it comes after the extraordinary year of 2024. This is the year when the most severe drought in our living memory unleashed unprecedented socio-economic challenges. Millions of our citizens face food insecurity. They are facing extended hours of load-shedding and have inadequate access to safe and clean water. Understandably, life has been tough. As the Government, we have had to respond to these challenges.

Madam Speaker, to address the effects of the drought, His Excellency, Mr Hakainde Hichilema, President of the Republic of Zambia, on 29^th February, 2024, declared the drought a national disaster and an emergency. Following the declaration, this august House revised the 2024 Budget in order to channel more resources toward humanitarian relief. The top priority of the Government, in this regard, is to ensure no one dies from hunger and thirst. I will cover these initiatives in depth later in my address.

Madam Speaker, amidst the challenges the country is facing, there is some good news. Let me at this stage just give four examples.

Madam Speaker, Firstly, the effort to transform our economy is now in high gear. The debt burden inherited has been made lighter after debt restructuring. We have resolved challenges at Konkola Copper Mines (KCM) PLC and Mopani Copper Mines PLC and then re-opened them. In other words, rather than thinking that closing the mines is a way of improving the economy, we have opened the mines because that is the way to improve the economy.

Hon. Government Members: Hear, Hear!

Dr Musokotwane: Further, new companies in the mining and non-mining sectors are coming in strongly, with the prospects of increasing jobs and foreign exchange earnings in the next few years;

Madam Speaker, the second example is that social and economic infrastructure is being constructed like at no other time in the history of this country, whereby even the remotest place is having its share of the Zambian cake. The Constituency Development Fund (CDF) is truly a game changer. And, in this respect, I have further good news for this august House regarding the CDF for 2025.

Madam Speaker, thirdly, the road infrastructure is expanding, with the flagship road being the Lusaka/Ndola Dual Carriageway and fourthly, the Government has continued with the provision of free education and embarked on major social infrastructure projects.

Madam Speaker, these are, but few examples of the progress that the country has made in a year when the drought has been devastating.

Madam Speaker, the 2025 Budget, which I am presenting today, is premised on economic recovery and promoting growth to improve the livelihoods of our people. The Budget is well-placed to enhance our capacity to withstand shocks. It is for this reason that the theme for the 2025 Budget is “Building Resilience for Inclusive Growth and Improved Livelihoods”. The Budget, therefore, provides policy measures that will build the resilience of our economy and promote inclusive growth.

Madam Speaker, my address this afternoon is in four parts. In Part 1, I will discuss macroeconomic developments in 2024. In Part II, I will present the macroeconomic goals and strategies for 2025, while in Part III, I will provide Estimates of Revenue and Expenditure as well as the Annual Borrowing Plan for 2025. In Part IV, I will conclude.

MACROECONOMIC DEVELOPMENTS IN 2024

Global Economic Developments

Madam Speaker, global growth is projected to slow down to 3.2 per cent in 2024, from 3.3 per cent in 2023. This is on account of lower growth in advanced economies despite higher growth in emerging and developing economies. Over the medium-term, global growth prospects remain sluggish mainly due to geopolitical tensions, climate change events and tight financial conditions.

Domestic Economic Developments: Economic Growth

Madam Speaker, our economy is projected to grow by 2.3 per cent in 2024 compared to 5.4 per cent recorded in 2023. The slowdown is mainly attributed to the impact of the drought, which has significantly reduced agriculture production and electricity generation.

Madam Speaker, the economy is expected to rebound in 2025. This is premised on the recovery of agriculture and a pickup in mining. It is also premised on the continued growth of information and communication technologies (ICT), accommodation and food services, and construction sector.

Inflation

Madam Speaker, on inflation, the country has experienced pressure over the past year, registering 15.6 per cent in September this year from 13.1 per cent in December 2023. The main drivers are linked to the drought, which resulted in increased food prices. The Kwacha-United States Dollar exchange rate saw a depreciation of 2.8 per cent on a year-to-year basis.

Madam Speaker, the Bank of Zambia (BoZ) tightened monetary policy, raising the policy rate to 13.5 per cent from 11.0 per cent and the statutory reserve ratio to 26.0 per cent from 17.0 per cent.

Budget Performance

Madam Speaker, I will now summarise the performance of the 2024 Budget. The total expenditure for the year is now projected at K198.6 billion, which is 11.6 per cent above the approved 2024 Budget. Notable expenses include debt service, the Farmer Input Support Programme (FISP), the CDF, scaled-up Social Cash Transfer (SCT), and Cash-for-Work.

Madam Speaker, with respect to revenues and grants, these are projected to close at K148.1 billion, which is 2.5 per cent above the target of K144.5 billion. The favourable revenue performance underscores the Government’s efforts to enhance domestic resource mobilisation and grant financing, to support Government expenditure.

Madam Speaker, following the realignment of the Budget, the deficit is now expected to be 6.4 per cent of the gross domestic product (GDP) compared to the initial estimate of 4.8 per cent of the GDP. This projected fiscal outturn is actually very commendable given all the pressures emanating from the drought. It is a reflection of this Government’s commitment to prudent management of public funds.

Madam Speaker, early indications are that both the SCT and the Cash-for-Work programmes are being implemented and communities in the areas affected by the drought have received them well. As we speak, young men and women engaged in the Cash-for-Work programme in Lusaka, for example, are clearing drainages and cleaning streets. No doubt, this will assist in reducing waterborne diseases in the coming rainy season. In Mbabala Constituency, young men and women are clearing culverts. In Liuwa Constituency, the recipients of the Cash-for-Work programme are digging and clearing canals.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, this Government has turned the drought tragedy into a positive force by empowering communities with funds with which to buy food. In other words, communities are being given the opportunity to earn money as they perform works that are important for their areas.

Debt Position

Madam Speaker, as at the end of June 2024, the Central Government external debt stock, excluding publicly guaranteed external debt, increased by 4.1 per cent to US$15.17 billion from US$14.57 billion at the end of December 2023. The increase was largely on account of new disbursements from multilateral creditors and the continued accumulation of arrears before the debt restructuring.

Madam Speaker, as at the end of June 2024, publicly guaranteed external debt declined by 1.3 per cent to US$1.39 billion from US$1.41 billion at the end of December 2023. This was on account of debt service payments by some institutions that we had provided guaranteed for. The stock of Treasury bills and Government bonds was reduced by 3.1 per cent to K225.5 billion at the end of June 2024.

Madam Speaker, as at the end of June 2024, the stock of outstanding Government bills to various suppliers reduced by 18.3 per cent to K79.8 billion from K97.7 billion as at the end of December 2023.  In other words, we have been paying arrears. With the commitment to dismantle fuel arrears, we expect the stock to reduce significantly by the end of the year.

Financial Sector Performance

Madam Speaker, commercial banks’ average nominal lending rates rose to 28.7 per cent in August 2024, from 26.6 per cent in December 2023. This was broadly in line with the upward adjustment in the policy rate by the BoZ. Notwithstanding the increase in lending rates, credit to the private sector has been expanding, growing by 36.9 per cent in July this year compared to 34.2 per cent in July 2023. The bulk of the credit went to wholesale and retail trade, manufacturing, and agriculture sectors.

Madam Speaker, overall, the banking sector continues to be resilient, supported by adequate capital, liquidity buffers, and good asset quality. Similarly, the performance of the deposit-taking non-bank financial institutions sector has remained satisfactory as the capital position, earnings performance, liquidity management and sensitivity to market risk remain satisfactory while asset quality is rated fair.

Madam Speaker, in April this year, the BoZ took possession of Investrust Bank as it was no longer financially sound. In accordance with the law, the BoZ executed a purchase and assumption transaction, in other words, the bank was taken over by the Zambia Industrial Commercial Bank Limited. I am happy to report that all deposit balances, with matching assets, were transferred to the Zambia Industrial Commercial Bank Limited and all customers have access to their money.

External Sector Performance

Madam Speaker, preliminary data indicates that imports amounted to US$4.5 billion during the first half of this year, 2.7 per cent lower than the corresponding period in 2023. This largely reflects subdued economic activity mainly occasioned by the drought. Exports were broadly unchanged at US$5.3 billion during the same period. Most of the export earnings were from copper, driven by higher prices, while non-traditional export earnings from commodities such as cane sugar declined.

Madam Speaker, as at the end of July 2024, gross international reserves, in other words, foreign exchange reserves, increased to US$3.9 billion, equivalent to 4.3 months of import cover, from US$3.3 billion at end of December 2023, which was equivalent to 3.7 months. The increase was mainly on account of the support that we got from the International Monetary Fund (IMF).

MACROECONOMIC OBJECTIVES

Madam Speaker, the devastation caused by the drought demands a response, not just to recover, but also to build resilience in our people and the economy. An important element of realising this is to build a stronger economy. It is a well-known fact that the stronger an entity is, the better its ability to respond to shocks and challenges such as drought.

Madam Speaker, to build economic resilience and improve the livelihoods of our people, the Government has set the following macroeconomic objectives for 2025:

1. attain a real GDP growth rate of 6.6 per cent;
2. reduce inflation to the range of 6 to 8 per cent target band in the medium-term;
3. maintain international reserves above three months of import cover;
4. increase domestic revenue to at least 21.3 per cent of GDP;
5. reduce the fiscal deficit to 3.1 per cent of GDP; and
6. limit net domestic borrowing to 1.9 per cent of GDP.

POLICIES FOR 2025

Madam Speaker, I will now present specific policies for 2025.

ECONOMIC TRANSFORMATION AND JOB CREATION

Madam Speaker, I start with economic transformation and job creation simply because it is one of the biggest challenges facing our country. The economic transformation and job creation pillar is key in transforming the livelihoods of the Zambian people, especially with regard to increasing income and reducing inequality. It is also a pillar where measures to enhance resilience to shocks are of utmost importance. I will now present interventions in the various sectors under this pillar.

Mining

Madam Speaker, I will start with mining because it remains the most important sector for Zambia. It sets the tempo of other activities. When the industry does well, other sectors do well too. Of course, the opposite is also true. This largely explains the difficult conditions our economy has gone through in the past few years because two of the biggest players in the sector, namely Konkola Copper Mines (KCM) and Mopani Copper Mines, were on their death beds.

Madam Speaker, an industry that is on the death bed does not create economic prosperity. It reduces economic prosperity. Therefore, when we came into office, in 2021, we prioritised reviving this industry because to revive the mining sector is to revive the economy. The strategy involved three steps. The first step was to re-open mining companies that were locked up in legal disputes.  In the words of the President, mining appeared to be taking place in the courts of law and not in the mines. Through this step, as we all know by now, KCM and Mopani Copper Mines are back to life, they have been revived.

Hon. Members: Hear, hear!

Dr Musokotwane: This is the way to improve the economy.

Madam Speaker, the second step under mining was to improve the mining investment climate in our country. This has been achieved and today, mining companies that had planned to leave Zambia, have stayed on. I am happy to report that those who threatened to leave, like First Quantum Minerals (FQM) Limited and Lumwana Mining Company (LMC), are already implementing ambitious expansion programmes.  I believe that this week, the President is going to open the so-called super pit in Lumwana, which is going to double the production of copper over time from 120 metric tonnes to more than 240 metric tonnes. This is the way you build the economy by encouraging production, not shutting down production.

Madam Speaker, again, because of the improved investment climate, a mine was abandoned seventeen or is it twenty years ago? Luanshya Mine –

Mr Nkandu: Twenty-three years ago.

Dr Musokotwane: Twenty-three years ago. As we speak, everybody knows that the mine is being dewatered and, in a few years, it will come back to life. This is the way we improve the economy by encouraging production. Luanshya Copper Mine (LCM) is going to create 3,000 jobs. We also know that Lubambe Mine was also pushed to death, but it is now coming back to life with the encouragement of this Government and the initial investment to be paid is US$300 million.

Madam Speaker, there was a very old mine going back to the 1970s and 1980s called Kalengwa Mine, in Mufumbwe. This is also coming out of the grave. As we speak, there is a US$200 million investment to increase production because that is how we improve the economy.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, still on the improved investment climate, the interest that the country is attracting in new mines is profound, in other words, astonishing. For the first time in our country, a copper mine is being opened at Kitumba in Mumbwa District. Whoever dreamt that in Mumbwa District there would be a copper mine, it is now happening and it will create 2,500 jobs.

Madam Speaker, in addition, a total of US$2 billion will be invested at the recently commissioned Mingomba Mine Project in Chililabombwe. This will create over 1,000 jobs.

Madam Speaker, the final step in reviving the mining sector, under a good investment climate is to encourage mineral exploration.  New mines cannot be opened unless there is exploration taking place. I also want to state that exploration by itself is actually a very important economic activity because money is spent, jobs are created and services are bought. So, this exploration is a very important aspect.  

Madam Speaker, last year, the President announced that the country was going to launch a country-wide high-resolution aerial geophysical survey, in other words, exploration. To demonstrate that this is a President who does not just talk, as we speak, those aerial explorations are taking place. Those who are in doubt, can call the people in the North-Western Province, the Western Province and the Southern Province, and they will tell you that they see the airplanes flying up. Exploration is taking place because this is the way to open new mines, encourage production, and grow the economy.

Madam Speaker, copper production in the first half of 2024 increased by 6.2 per cent to 346,747 metric tonnes from 326,408 metric tonnes produced in 2023. I am very hopeful that this rebound marks the start of our consistent journey towards the target of 3 million tonnes of copper production. With the profound interest that we have seen in the expansion of existing mining assets, the development of new mines and the expansion in mineral explorations, I have no doubt that we shall reach the target, and this will help to establish a strong economy, which has never been seen in this country before.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, the Government will also continue to encourage explorations of hydrocarbons such as oil and gas to help unleash areas of new investments for the country. In this regard, we shall emulate the approaches taken by neighbouring and other countries that have succeeded in attracting capital in the industry on a win-win basis.

Madam Speaker, before I move away from the mining sector, the House needs to know that the Government, will this year, formalise trading in gold. The Government is establishing gold marketing centres with pilot projects in Mumbwa and Rufunsa districts. The hon. Minister of Mines and Minerals Development will provide the details in due course.

Agriculture, Livestock and Fisheries

Madam Speaker, building resilience in the agriculture sector is imperative for the growth of our economy. During the 2023/2024 Farming Season, crop production was severely affected by the drought in seven out of the ten provinces. This resulted in reduced production of soya beans by 77.7 per cent, rice by 60.8 per cent and maize by 53.6 per cent. A similar pattern was observed in other crops such as cassava, millet, sorghum, wheat and groundnuts. The consequence was a deficit in the national food balance sheet of 2.1 million metric tonnes of maize grain equivalent.

Madam Speaker, in July this year, the Government launched the Comprehensive Agriculture Transformation Support Programme (CATSP). The programme has seven main components, namely irrigation, mechanisation financing, farm blocks, extension services, input support, agro-processing and infrastructure development. The objective of all this is to expand the sector.

Madam Speaker, to reduce over-reliance on rainfed agriculture, we will continue to promote irrigation development. To this end, we will continue with on-going irrigation schemes, and embark on the construction of five new dams, namely Chinkhombe in Katete, Kashambana in Nkeyema, Mulemba in Kalomo, Namakala in Mulobezi and Pemba in Pemba District.

Madam Speaker, let me assure the nation through this august House that the New Dawn Administration has no intention of abandoning the FISP.

Hon. Government Members: Hear, hear!

Dr Musokotwane: The intention of the Government is to improve the performance of the programme and ensure that only eligible farmers benefit. That is the way it should be. The Government will, therefore, in 2025, fully migrate the FISP from Direct Input Support to e-Voucher modality, which is more flexible and effective under the processes.

Madam Speaker, to increase the area under agricultural production, the Government has continued with farming block development at Luena, Nansanga and Shikabeta. At Luena, 275 ha is under avocado production and the first harvest is expected next month. In addition, an anchor farm has commenced maize production. A total of 50 km of the road network at Nansanga and 30 km at Luena farming blocks have been completed. Further, the Government has demarcated 350 farms and approved thirty-six co-ventures at Kalumwange, Kalungwishi, Luena, Luswishi, Manshya, Musokotwane, Shikabeta, and Solwezi farming blocks.

 Madam Speaker, in the livestock sub-sector, the Government will continue to prioritise disease control and prevention. The Government has this year procured 620,000 doses of the contagious bovine pleuropneumonia (CBPP) vaccine for 380,783 cattle in Muchinga Province, the Northern Province, the North-Western Province and the Western Province. Further, 437,051 cattle were vaccinated against foot and mouth disease in Itezhi-tezhi, Kalomo, Mkushi and Namwala. This Government is treating and providing support for livestock.

Madam Speaker, the Government will continue to undertake animal disease and prevention measures through the construction of bio-security checkpoints, quarantine of stations and operationalisation of regional and district laboratories. In this regard, Chipata and Choma laboratories have been operationalised while Isoka and Mongu are partially operational. Works at Kasama, Ndola and Solwezi laboratories are expected to be completed by the end of this year. Equipment for all the seven laboratories has been procured and distributed. Further, the construction of the vaccine plant at Central Veterinary Institute has commenced so that we can produce vaccines in this country.

Madam Speaker, to increase livestock production to 7 million by 2027 and increase the number of households engaged in livestock farming, the Government will enhance stocking and restocking programmes, and has targeted to distribute 6,000 heifers, as well as 300 superior bulls for both artificial insemination and natural mating amongst the community herds.

Dr Musokotwane drank water.

Hon. Members: Water, water!

Dr Musokotwane: Madam Speaker, the interventions we have been putting in place in the fisheries sub-sector are paying dividends. The national fish deficit has reduced to 51,000 metric tonnes from 74,000 metric tonnes in 2023. To ensure all year-round production of fingerlings at Government fish farms, greenhouses are being constructed at Chadiza, Kaoma, Mwenda, Mwinilunga, and Sinda fish farms. To further increase fingerling production, three hatcheries are being established in Kasempa, Mushindamo and Samfya aqua parks, bringing the total to eighty-four in 2025. This will increase fingerling production to 460 million in 2025 from the current 433.4 million.

Energy

Madam Speaker, I move on to the energy sector, which I am sure is of interest to many people here.

Hon. Members: Hear, hear!

Hon. Opposition Member: Load-shedding!

Dr Musokotwane: Madam Speaker, our dependence on hydropower generation; hydro means generating electricity from water, is at 84 per cent. This has exposed our vulnerability to climate change events. Due to the drought, the current generation capacity has significantly reduced to around 1,225 MW against the installed capacity of 3,811 MW. This under generation is responsible for the shortage of electricity.

Madam Speaker, in a bid to urgently address the power deficit, we have taken a multi-pronged approach. Firstly, contrary to what people are claiming that we are not importing, we are importing power from other countries, like Mozambique, Namibia, South Africa and Zimbabwe. As we import we pay, unlike those who imported and never paid. This time, we pay.

Interruptions

Hon. Government Members: Repeat!

Dr Musokotwane: Madam Speaker, I repeat: In a bid to urgently address the power deficit, we have taken a multi-pronged approach. Firstly, we are importing power from other countries, and these are Mozambique, Namibia, South Africa and Zimbabwe, and this time, as we import, we pay.

Hon. Government Members: Hear, hear!

Interruptions

Dr Musokotwane: Madam Speaker, I am saying this because those who used to import before were not paying.

Interruptions

Dr Musokotwane: Madam Speaker, the second approach is that we are promoting the use of off-grid solutions such as industrial generators and solar systems. These are being installed. I am sure, hon. Members have seen them in markets, public hospitals and schools.

Madam Speaker, thirdly, the Government has encouraged the construction of an additional thermal power plant in Maamba. Previously, the power capacity was at 300 MW. However, with the steps that we have taken, by next year, production at Maamba Collieries will double the capacity to 600 MW.

Madam Speaker, constructing a thermo or coal power station is not something that you would do in a month, it takes time. So, when I say this will be done next year, it is just like a song to them.

Interruptions

Madam Speaker: Order, hon. Members!

Madam Speaker, the fourth step that we have taken is that ZESCO Limited and private investors are investing in a number of solar power stations right now, in several strategic locations. These include Chisamba 100 MW, Choma 50 MW, Kasama 100 MW and Kariba 100 MW. So, you can see that this Government, in spite of the problems that are there, has taken steps to improve the situation. If this had happened so in the past, we would not be having problems today.

Madam Speaker, the Government is also implementing the net-metering initiative to encourage consumers to generate power. What this means is that those with the capacity can install power on the roofs of their houses and if they have excess power being generated out of that, then they will be in a position to push it onto the grid. So, individuals will be in a position to generate power and if they produce excess, they can sell it to ZESCO Limited and get credit for that.  Further, we have streamlined the system of licensing so that the process of obtaining licenses and permits for energy projects does not take too long. Instead, the process will move faster.

Madam Speaker, I also want to say something that sometimes we may not want to hear, but is the truth.  Part of the severe power shortage that the country is going through now, is as a result of our nation’s opposition, all of us, to what energy experts have been advising us for decades. In warning against over-dependence on hydro electrical power, in other words , electricity from water, the experts, for over twenty years, have been advising us to have an energy mix that is not just dependent on hydropower, but also on other sources of power. The issue though is that these other sources of power are expensive compared to hydro. So, experts have always been saying that we need to accept some increase in tariffs so that investments into the other sources of power come onstream and we can have more electricity. This is what the experts have been saying going back to the United National Independence Party (UNIP) days and as a nation, we have not been accepting that.    

Madam Speaker, it is clear at this stage that this opposition from all of us has been short-sighted. The loss of power is proving to be real. We are realising that, in fact, the absence of electricity is more expensive than something. This is because when there is no electricity, businesses shut down and that is very expensive. When we have no electricity, we have to buy a generator set and run it. The cost of electricity for that becomes very high. So, the very thing that we are trying to avoid; we, the chickens have come home to roost. What is the answer? The answer is that we must accept that we need to attract investment into alternative energy sources at a slightly higher price so that we are assured of the availability of electricity. This is what this Government is going to do. However –

Mr Chisopa: Read the speech.

Dr Musokotwane: I am reading from the speech. It is in the mind.

Hon. Government Members: Hear, hear!

Interruptions

Dr Musokotwane: Madam Speaker, however, when we say that we are going to encourage alternative sources of energy at slightly higher prices, the Government is saying that everyone will be given a minimum threshold, something that can make you survive at a lower price. It is now up to each one of us to say “If I consume more than what I have been given, I must pay more.” Then it becomes our responsibility to see how we manage our energy consumption. If we manage our energy consumption within an amount that is free or subsidised, then we will never pay anything more. In fact, we will pay less. If we go through that process, this is how we are going to encourage more investment and the issue of load-shedding is going to end.

Madam Speaker, to increase access to electricity in rural areas, the Government will continue implementing the rural electrification programme. So far, 131 grid developments and thirty-eight off-grid renewable energy projects have been completed. The Rural Electrification Authority (REA) is currently operating twelve mini grid stations resulting in 2,095 connections. By the end of the year, fifteen new solar projects will be completed and this will result in 3,421 connections.

Transport and Logistics

Madam Speaker, my opening remark is that the passion with which hon. Members of this House debate roads and other transport modes is a clear indication of the importance they attach to this sector. The Government will, therefore, continue to invest and encourage investment in the construction, rehabilitation and maintenance of roads, rail, aviation and maritime infrastructure. Let me now update the nation on recent developments in the sector, starting with roads.

Madam Speaker, the construction of the 210 km Chinsali/Nakonde Road which started in 2018, is at 98 per cent and the road will be completed by the end of this year. In addition, the Government has secured funding from co-operating partners for the rehabilitation of 162 km of the Chinsali/Mpika Road. Further, the Government, through the Transport Corridor for Economic Resilience (TRACER), project will rehabilitate 238 km of road network from Serenje to Mpika.

Madam Speaker, the Government is rehabilitating and upgrading the 71 km Monze/Niko Road. Works commenced in 2023 and are scheduled to be completed in 2025. Rehabilitation of the Lusaka/Mongu Road from Tateyoyo Gate to Katunda/Lukulu Junction, covering a distance of 87 km, commenced in August this year and works are scheduled to be completed in 2026. In addition, rehabilitation of the 88 km Batoka/Maamba Road commenced in March this year and is scheduled to be completed in 2026.

Madam Speaker, in July this year, the Government concluded negotiations with Millennium Challenge Corporation, an agency of the United States Government, for a grant, in other words, a gift of US$458 million. The Millennium Challenge Corporation Board has since approved the project and signing is scheduled to take place next month, here in Lusaka. The funds will, among others, be used to rehabilitate and maintain the 116 km Mumbwa/Landless Road, and the 222 km Chipata/Lundazi to Old Magodi Road in the Eastern Province. This will be signed next week, which is next month.

Madam Speaker, the Government is upgrading and rehabilitating 22 km of urban roads in Lusaka and Sinazongwe this year. In 2025, the Government will upgrade and rehabilitate more urban roads in Choma, Kitwe, Luanshya, Lusaka, Mazabuka, Ndola, Sinazongwe and Solwezi.

Madam Speaker, let me now turn to our flagship instrument in the road sub-sector, namely the public-private partnerships (PPPs). This Government found empty coffers, yet key infrastructure like the Lusaka/Ndola Road was in desperate need of repairs. While the need was recognised, sadly there was no public money to repair the roads. This is how we turned to PPPs to find a solution and, indeed, other countries have successfully used the same method.

Madam Speaker, the New Dawn Administration has demonstrated that PPPs can deliver results in infrastructure development. Currently, Zambia is being cited all over Africa as an example of a success story in the implementation of the PPPs. Through the PPPs mode, the Government has signed seven projects with a total coverage of 838 km. So far, the Chingola/Kasumbalesa Road is completed, operational and is of very good quality. As we speak, works on the Lusaka/Ndola Dual Carriageway, including the rehabilitation of the Masangano/Fisenge/Luanshya Road, are progressing very well. We do not need to debate about it because it is visible.

Madam Speaker, another PPP project that has started and is under implementation right now is the Katete/Chanida Road, the Mufulira/Mokambo Road and the Ndola/Mufulira Road, and the access road to Sakania on course. I think, we have all seen with our own eyes the work that has been done. Further, we are hoping that the mobilisation and early works on the Lumwana/Kambimba Road, which will join with Kolwezi in the Democratic Republic of Congo (DRC), will start in the last quarter of this year. People can see that with very limited resources, this Government is making so much progress in the construction of the roads, without putting the citizens and the young people into new and unsustainable debts. This is what is meant by good governance.

Madam Speaker, I will now turn to feeder roads because they play a critical role in farming and rural communities. I am happy to report that 4,806 km of feeder roads have been graded, rehabilitated or maintained across the country. Of these, 2,980 km were graded and maintained under the CDF, while the rest have been rehabilitated and are being maintained under the Improved Rural Connectivity Project supported by the World Bank.

Madam Speaker, regarding the feeder roads, I have some good news for the House as I indicated earlier. So, when I start talking about the 2025 Budget, I will reveal this good news on the feeder roads. So far, no one knows about this.

Madam Speaker, in the rail sub-sector, the Government has signed a Memorandum of Understanding (MoU) with the Governments of China and Tanzania to rehabilitate and modernise the Tanzania Zambia Railway Authority (TAZARA). The President witnessed this in China, demonstrating that when the President goes to places, it is not party after party, rather it is to work.

Interruptions

Dr Musokotwane: Madam Speaker, once rehabilitated, the tonnage on the railway line will increase to 2.5 million metric tonnes instead of the current half a million metric tonnes per annum.

Madam Speaker, with the support of co-operating partners, the New Dawn Government is actively working to revitalise the Zambia Railways Limited (ZRL) in a methodical and cost-effective manner. The ultimate goal is to improve track speed, signalling, and secure funding for long-term investments.

Madam Speaker, in the second phase, the Government aims to accelerate the acquisition of additional grant financing for the long-term rehabilitation of the railway system from Chingola to Livingstone. In addition, the Government is in discussion with co-operating partners for possible support with rail wagons and locomotives.

Tourism

Madam Speaker, I want to report that two years ago, the Government took some bold measures to assist the sector to quickly recover from the effects of the Coronavirus Disease - 2019 (COVID-19) pandemic. The measures included robust marketing, hosting of conferences and favourable policies such as waiver of visa fees. The outcome of the measures has been very good. During the first half of 2024, for example, there has been a 21 per cent increase in international arrivals in our country to 732,732 compared to the same period in 2023.

Madam Speaker, to conserve biodiversity and promote integrated transboundary management, the Government will continue to collaborate with neighbouring countries in the development of transfrontier conservation areas. So far, the Kavango Zambezi Transfrontier Conservation Area (KAZA TFCA) has been implemented while agreements with Malawi, Mozambique and Zimbabwe have been signed. These agreements will facilitate the development of infrastructure to ease the movement of tourists across the borders.

Madam Speaker, in the 2024 Budget Address, I informed this august House that the US$100 million of the Green, Resilient and Transformational Tourism Development Project from the World Bank, will support the development of tourism infrastructure at Kasaba Bay, Liuwa National Park and the source of the Zambezi River. I am happy to report that the project has commenced. Feasibility studies that will inform the planned infrastructure development in the project areas are underway. Construction works are scheduled to commence in 2025.

Manufacturing

Madam Speaker, the manufacturing sector has been growing. However, this year, it has been adversely affected by the shortage of electricity due to the drought. According to preliminary data, the sector grew by 4 per cent in the first quarter of 2024, but contracted by 2.7 per cent in the second quarter.

 Madam Speaker, to support the growth of the sector, the Government has continued to develop multi-facility and special economic zones. So far this year, the Lusaka South Multi-Facility Economic Zone has secured US$110 million in investment from fifteen companies bringing the cumulative investment to US$1.6 billion. Currently, the zone has thirty operational companies, which have created about 16,000 jobs for our people. Further, twenty-one companies are at the construction stage and have created 8,450 jobs. The Jiangxi Multi-Facility Economic Zone in Chibombo has attracted investment in excess of US$40 million in the production and recycling of batteries and manufacturing of copper cables, thereby creating more than 400 jobs.

Madam Speaker, to support the sector further, the Government is in the process of establishing special economic zones for beef in the Kafue Flats and crop production in Kafulafuta, Lufwanyama, Masaiti, Mpongwe and Ngabwe districts.

Madam Speaker, let me also shed some light on specific achievements that the Government has realised in this sector.

Interruptions

Dr Musokotwane: I repeat: Let me also shed some light on specific achievements that the Government has realised in this sector. The Zambia-China Mulungushi Textiles …

Hon. Government Members: Hear, hear!

Dr Musokotwane: …was finally reopened in August this year, with a planned investment of US$170 million.

Hon. Government Members: Hear, hear!

Dr Musokotwane: The company was abandoned seventeen years ago, and in the past years, there were false promises to reopen it. It has taken “Bally” to fix it. The UPND Government has reopened it, and the company is expected to create more than 500 jobs.

Hon. Members: Hear, hear!

Mr Chibombwe: Takwaba malaiti!

Dr Musokotwane: Madam Speaker, the development of the Zambia-China Mulungushi Textiles will be done in four phases. Phase I is the printing of fabrics and garments, Phase II –Somebody was saying that there is no electricity. However, under Phase II, solar panels will be installed.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, in Phase III, the installation of a spinning facility and a 20 MW solar power plant will be installed. Under Phase IV, there will be the development of the cotton value chain and will include engaging small-scale farmers through an out-grower scheme.

Hon. Government Members: Hear, hear!

Dr Musokotwane: The company has since started receiving machines and equipment, which will enable the completion of the first three phases this year, 2024. Anyone can go and examine them.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, I wish to elaborate further on what is happening in the manufacturing sector, this time giving an example of the fertiliser subsector. From being a net importer of fertiliser, I am happy to report that the country is now a net exporter of Compound D fertiliser.

Hon. Government Members: Hear, hear!

Dr Musokotwane: In 2023, the country exported over 19,000 metric tonnes of fertiliser to neighbouring countries. This year, more than 91,000 metric tonnes will be exported.

Further, I do not know how many of us have seen an advertisement by the Zambia Environmental Management Agency (ZEMA). The advertisement is about opening a phosphate mine in Katete to supplement and support the fertiliser factory. So, things are happening.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, further, the construction of a urea plant with a production capacity of 300,000 metric tonnes per annum is expected to be commissioned by early 2025. This will make Zambia not only self-sufficient in fertiliser production, but as I said earlier, we will be exporting to our neighbours. This is how you grow the economy by encouraging production.

Small and Medium Enterprise Development

 Madam Speaker, the Government will continue to support small and medium enterprises (SMEs). Our interventions will focus on facilitating access to affordable financing and provision of infrastructure. In this regard, the Government will continue implementing empowerment programmes such as the Citizens Economic Empowerment Fund, as well as the Women and Youth Empowerment Fund under the CDF.

Madam Speaker, under the Citizens Economic Empowerment Fund, the Government has in the last three years disbursed more than K950 million to over 83,000 beneficiaries. Further, under the CDF, the Government has, this year, disbursed more than K485 million to the youth, women, persons living with disabilities, and co-operatives.

Madam Speaker, to provide appropriate infrastructure for SME operations, the Government has completed the construction of industrial yards in Chipata, Kasama, Kitwe, Lusaka, Mansa, Mongu, Ndola and Solwezi. So far, 108 SMEs and thirty-eight co-operatives have been onboarded and are operating in the yards. The construction of the second phase of yards is earmarked to commence in 2025 and will focus on constructing industrial yards in the remaining three provinces.

Dr Musokotwane drank water.

Hon. Government Members: Hear, hear!

Mr Amutike: That is water, not Jameson.

Dr Musokotwane: Madam Speaker, to further address challenges faced by SMEs in accessing affordable finance, the Government increased the allocation to the Zambia Credit Guarantee Scheme (ZCGS) Limited to K386 million in 2024 from K150 million in 2023. The allocation to the scheme will increase further in 2025, as I will highlight when I come to the expenditure measures.

Madam Speaker, to mitigate the impact of the drought on the agriculture and energy sectors, the BoZ will soon roll-out a support facility. Funds will be provided to eligible financial institutions to on-lend to businesses and households operating in sectors such as SMEs.

Information and Communication Technology

Madam Speaker, in the first half of this year, the number of active mobile cellular subscriptions increased to 21.9 million from 20.1 million people in the corresponding period of 2023. This represents an increase in the mobile penetration rate to 109.2 per 100 inhabitants from 102.4 over the same period, last year. To accelerate digital transformation, the Government will continue to invest in communication and technology infrastructure across the country. A total of 202 towers are being constructed and will be completed by the end of this year. Of these, the Government through Zambia Information and Communications Technology Authority (ZICTA) is constructing 171 at a cost of K409 million while thirty-one are being constructed by the private sector.

Madam Speaker, I am happy to report that a fourth mobile network operator, Zed Mobile, commenced operations in August this year. The operator has committed to investing over US$400 million and is expected to create more than 450 jobs.

Madam Speaker, following the granting of a low-earth-orbit satellite license to Starlink, unserved and underserved areas are now being connected. So far, the Government has procured 525 Starlink kits, out of which, 288 will be installed in 109 post offices, twenty-three youth resource centres, and all the 156 constituency offices.

Hon. Members: Hear, hear!

Dr Musokotwane: I am sure, some of our colleagues here, in the House, have already received the kits.

Madam Speaker, the balance of the 237 kits will be installed in agriculture camps, selected local authorities, and border facilities so that we can improve public service delivery.

Madam Speaker, the Government realises the significance of establishing digital transformation centres (DTCs). These centres offer access to digital tools, internet services, and training programmes. To this end, the Government has embarked on the rehabilitation of post offices, which will be established as DTCs. This year, forty-eight DTCs have been established, out of which twenty-three are located in youth resource centres and twenty-five in rural post offices. Further, seventy-five post offices will be repurposed into DTCs with full internet connectivity by the end of this year.

Science, Technology and Innovation

Madam Speaker, science, technology and innovation remain pivotal to the success of key sectors in our economy. To sustain progress and ensure long-term growth, the Government will continue to prioritise investment in research and development to enhance the country’s innovation capacity. These investments are essential to driving economic growth, industrialisation, and diversification.

Madam Speaker, notable progress has been made in the establishment of innovation hubs and incubators. To date, fifty-three innovation hubs and twenty-one incubators have been established to nurture start-ups, promote entrepreneurship, and accelerate the growth of tech-based businesses.

HUMAN AND SOCIAL DEVELOPMENT

Madam Speaker, let me say something about human and social development. Under this aspect, I will start with education.

Madam Speaker, the Government will continue to improve access to quality education through infrastructure development, teacher recruitment, curriculum development and provision of teaching requisites.

Madam Speaker, the provision of free education is meant to ensure that no child is left behind. Since its introduction in 2022, we have seen a massive increase in enrolment of about two million learners. Invariably, the increase led to a deterioration in the teacher-pupil ratio to 1:60 in 2022 from 1:43 in 2021. In other words, it was one teacher to forty-three children in 2021. Obviously, the children could not afford to go to school then. So, when education was made free, many children enrolled. For every teacher, there are sixty pupils now. It has also led to congestion in classrooms and a shortage of desks in some areas such as rural areas. So, it is a problem, but the good news is that the solution to solve this problem is there. I will elaborate on that.

Madam Speaker, to address these challenges, the Government concurrently embarked on the recruitment of teachers, construction of schools and classrooms as well as procurement and rehabilitation of school desks. The solution for that is under the CDF. With the CDF, we are building classrooms, teachers’ houses and procuring desks. So, yes, there were initial problems, but the framework for solving these problems is intact.

Madam Speaker, to improve the quality of education, we have recruited an unprecedented number of teachers since 2022. Cumulatively, since we started recruiting, we stand at 39,250 teachers.

Hon. Government Members: Hear, hear!

Dr Musokotwane: This has resulted in an improvement in the teacher-pupil ratio to an average of 1:51 in 2024 from 1:60 in 2022. In 2024, we are recruiting 4,200 teachers and an additional 2,000 in 2025.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Teacher recruitment is a major driver of ensuring quality education through increased teacher-pupil contact time.

Madam Speaker, the Government is constructing a total of 317 secondary schools across the country. Of these, 151 have been completed and the balance of 166 is scheduled for completion by 2025. The Government is also constructing 480 early childhood education centres, earmarked for completion by the end of 2025.

 Madam Speaker, to improve the learning environment for our learners, the Government has continued to procure desks in public schools. So far, 812,598 desks have been procured, out of which 712,562, or 87 per cent, were acquired using the CDF. As I indicated in my last address, the target is to procure desks locally and not import them from anywhere in the world, which of course, is also providing jobs and business opportunities for our people.

Madam Speaker, to address the challenge of accommodation in public universities, the Government is constructing fifty-eight hostel blocks across eight public universities with a total bed capacity of 9,280. To further improve the learning environment in our public universities, the Government is constructing additional university infrastructure at Chalimbana, Mukuba, Nkrumah, and Palabana universities.

Hon. Government Members: Hear, hear!

Mr Mtolo: Kasamba wamvela!

Dr Musokotwane: Madam Speaker, the Government has prioritised the expansion of Technical Education, Vocational and Entrepreneurship Training (TEVET) infrastructure, particularly in rural areas.

Mr B. Mpundu: Abene bansala!

Dr Musokotwane: This is to ensure that technical education is accessible to our citizens. To this effect, the construction of Mporokoso and Lundazi Trades Training Institutes and the student hostels at Ukwimi and Chipata Trades Training Institutes have been completed. These institutions have also been equipped with state-of-the-art training equipment. Further, the Mumbwa Polytechnic and student hostels at the Evelyn Hone College of Applied Arts and Commerce will be completed. The Government, in partnership with Kagem Mining, has also commenced the construction of the polytechnic in Lufwanyama.

Health

Madam Speaker, the Government considers the health of our people very important. We, therefore, continue providing quality and affordable healthcare services by strengthening health systems, recruiting health personnel, providing drugs and medical supplies, as well as developing infrastructure, especially in rural areas.

Madam Speaker, the New Dawn Administration has been recruiting health personnel ever since it assumed office in 2021. During the last three years, over 14,276 frontline health workers have been recruited. This year, 4,000 more health workers will be recruited. An additional 2,000 frontline health personnel will be hired in 2025, bringing the total to 20,276 since the UPND Government came into office.

Hon. Government Members: Hear, hear!

Dr Musokotwane: One of the goals of the Government is to make sure that all health facilities have at least one qualified health personnel to ensure quality healthcare. Further, the increase in the number of frontline health workers has contributed to a reduction in maternal and child mortality as 82 per cent of deliveries are conducted by skilled personnel due to the increase in the recruitment.

Madam Speaker, the Government has completed the construction of seven Level 1 hospitals in Chililabombwe, Kitwe, Mambwe, Mwansabombwe, Nchelenge and Ndola districts. These state-of-the-art hospitals are equipped with modern medical facilities.

Madam Speaker, the Government has also completed constructing 279 health facilities across the country, out of which, 164 were constructed using the CDF. These facilities include 115 mini-hospitals, thirty-three health centres, and 131 health posts. The construction of the 800-bed space King Salman Bin Abdulaziz Specialised Hospital for women and children is at 70 per cent. The hospital is scheduled for completion in 2025.

Madam Speaker, to improve maternal healthcare, the Government has constructed 123 maternity annexes across the country. Of these, eighty-two have been constructed under the CDF. An additional thirty annexes will be constructed in 2025 using the CDF.

 Madam Speaker, the continued repatriation of patients abroad for specialised treatment is costly to the nation. To mitigate this, the Government has been capacitating our local health facilities to perform specialised treatment. To this end, the National Heart Hospital has, this year, conducted 137 surgeries, out of which, fifty-one were open-heart surgeries and eighty-six coronary angiograms. In addition, the Government has commenced the construction of the Ndola Cancer Treatment Centre and is also modernising the Cancer Diseases Hospital (CDH) in Lusaka. The construction of the cancer treatment centre in Livingstone will commence before the end of this year.

Madam Speaker, the Government has continued to procure medicines and medical supplies to ensure availability at all times. You will recall that there used to be many complaints regarding the shortage of drugs. I am happy to say that the drug stock availability has increased to 85 per cent at health centres and 76 per cent at the hospital level, from 37 per cent and 46 per cent in 2021, respectively. This is above the 70 per cent threshold recommended by the World Health Organisation (WHO). To prevent theft of medicines, the Government is implementing digital inventory management systems to track medicines from procurement to dispensing.

Madam Speaker, to improve patient care and enhance record management in public health facilities, the Government is already implementing an electronic health record system known as Smartcare Pro System. By 2026, most facilities would have been covered.

Water and Sanitation

Madam Speaker, water is life. It is, therefore, critical that we fully harness this resource. To this effect, the Government has since 2022 constructed sixteen dams, rehabilitated twelve, and maintained 770 across the country.

Hon. Government Members: Hear, hear!

Dr Musokotwane: These dams are expected to harvest at least 15.7 million m³ of water to benefit 2 million people for domestic use, livestock, and irrigation. In 2025, the Government will construct twelve dams, rehabilitate fourteen, and maintain 385.

Madam Speaker, with regard to boreholes, the Government has since 2022 constructed 2,277 boreholes and rehabilitated 3,025. In addition, 365 piped water schemes have been constructed across the country. These interventions are benefiting over 902,490 people. In 2025, the target is to construct 947 boreholes and 500 piped water schemes, as well as rehabilitate 500 boreholes.

 Madam Speaker, under the Food Security and Drought Response Plan, a total of 1,835 water points will be constructed countrywide in 2025. Of these, 1,500 will be piped water schemes for rural communities, 110 commercial boreholes to support water utilities, 150 boreholes to support livestock, and seventy-five boreholes to support wildlife. These interventions will benefit more than 3.5 million people.

 Madam Speaker, further, I wish to report that works on the Integrated Small Towns Water Supply and Sanitation Project in Luapula Province, Muchinga Province and the Northern Province have been completed and will benefit over 900,000 people. Works in the Western Province are at 78 per cent and will be completed in 2025.

Madam Speaker, to mitigate against waterborne diseases and improve sanitation, since 2022, a total of 706 waterborne sanitation facilities have been constructed while construction of an additional 155 facilities is ongoing and scheduled for completion in 2025. The facilities are being constructed countrywide in public places such as schools, health centres, markets, and bus stations.

Social Protection

Madam Speaker, the New Dawn Administration is unwavering in its resolve to improve the living standards of the poor and vulnerable members of our society. In this regard, the Government will continue to implement social protection programmes such as the Social Cash Transfer (SCT), Food Security Pack (FSP), and Keeping Girls in School (KGS). In addition, the Government introduced the Cash-for-Work programme to support our people in the current drought situation. In other ways, the number of beneficiaries under various social protection interventions, as at August, 2024, stood at 2.5 million households.  If you are to extend that into individuals, the number of interventions we have an impact on is almost 14 million people.

Hon. Government Members: Hear, hear!

Dr Musokotwane: Madam Speaker, under the regular SCT, the number of beneficiary households increased to 1.3 million as at the end of August 2024 from 1.1 million in 2023. Further, to cushion beneficiary households from the effects of the drought, the regular SCT beneficiaries are now receiving an additional K200 per month during the drought period. In other words, these people used to receive K200 per month before the drought. However, under the Food Security and Drought Response Plan programme, they are receiving K400 per month to assist them in coping with food requirements.

Madam Speaker, the Government is further providing the Drought Emergency SCT. In other words, beyond those who used to receive the SCT, another group of people who were vulnerable to drought were identified. Those too, are receiving K400 per month, and this is benefiting 952, 570 households that have become vulnerable as a result of crop failure. I wish to emphasise that the Drought Emergency SCT is for the period of the drought.

Madam Speaker, the Cash-for-Work programme, in response to the drought experienced during the 2023/2024 Farming Season, is being implemented in 123 constituencies, which were affected. As I said, to ensure that the benefits go down to the basic level, the money is not just sent to provinces or districts, but to constituencies. In each constituency, money is sent to the wards, depending on the population and vulnerability. So, this intervention goes deep down into the basic structures of our society.

Madam Speaker, through the Cash-for-Work programme, the Government is not only improving the quality of lives of the people but also providing public services through the works being undertaken. These include clearing of solid waste in drainages, cleaning of public places, garbage collection, and road maintenance.

Madam Speaker, the Government will continue keeping girls in school and empowering women under the Girls Education and Women Empowerment and Livelihood (GEWEL) Project. The keeping girls in school component will be expanded to support 262,444 girls in response to increased demand following the implementation of the Free Education Policy. The women’s empowerment and livelihood component will be scaled-up to all the 116 districts covering 200,000 beneficiaries.

Madam Speaker, with regard to the pension system, the Government’s goal is to be current with payments and reduce the waiting time for pensioners under the Public Service Pension Fund (PSPF) and the Local Authorities Superannuation Fund (LASF). The Government will, therefore, continue to dismantle pension arrears. Further, the Government, through the National Pension Scheme Authority (NAPSA), will continue implementing partial withdrawal of pension benefits to help improve people’s livelihoods and empower individuals for their immediate investment.

Hon. Government Members: Hear, hear!

ENVIRONMENTAL SUSTAINABILITY

Dr Musokotwane: Madam Speaker, the devastating effects of climate change have demonstrated the importance of environmental sustainability. In this regard, the Government this year, launched the National Green Growth Strategy, aimed at creating green jobs, enhancing resilience to shocks, and creating business opportunities.

Madam Speaker, to build resilience against climate change, the Government will continue to expand, modernise, and maintain meteorological equipment, such as automatic weather stations that have been installed in 116 districts. Further, to increase access to weather-related information, climate data records have been digitised. We have also scaled-up the provision of meteorological information for use in the aviation, agriculture, water, and energy sectors.

GOOD GOVERNANCE ENVIRONMENT

Madam Speaker, the Government is committed to providing a conducive environment through which political, social, and economic affairs can be conducted in a transparent and efficient manner. The Government remains resolute to enforcing the rule of law, upholding human rights, and enhancing transparency and accountability in the management of public resources. To this end, the Government will undertake legislative, structural, and policy reforms in a number of areas, such as fiscal policy, domestic resource modernisation, and debt management.

Fiscal Policy

Madam Speaker, to ensure that the Government has resources to meet disasters given the frequency and intensity of climate change, the Government will establish a stabilisation fund. To this end, revenues derived from the mineral royalty in excess of the projection will be channelled to the stabilisation fund. To further increase resources available to financing disasters, the Government is working with the development financial institutions to access contingent financing immediately after a natural disaster occurs.

Domestic Resource Mobilisation

 Madam Speaker, domestic resource mobilisation remains critical for the smooth implementation of Government programmes. The Government will, therefore, continue to implement policy and administrative interventions to broaden the tax base and curb revenue leakages. In this regard, the Zambia Revenue Authority (ZRA) has restructured its operating model to make it more efficient and effective in tax administration. This includes the use of enhanced data analytics and compliance risk management.

Madam Speaker, in December 2023, the Government rolled out the Smart Invoice System to optimise revenue collection and seal leakages. So far, 19,262 taxpayers are registered on this system, out of which, 10,019 are Value Added Tax (VAT) registered on the system. The remaining eligible VAT taxpayers are requested to register on the system by 30^th September this year, as after that, the ZRA will not recognise any invoices issued outside the system.

Madam Speaker, as I indicated in my last Budget Address, the Co-ordinated Border Management has been implemented at Kazungula and Chirundu One-Stop Border Posts. This has limited the number of regulatory agencies at the border posts to six and has improved processing efficiency.

Madam Speaker, the Government, in collaboration with the local authorities, will implement measures to enhance revenue collection, particularly in property taxes.

Debt Management

Madam Speaker, I am pleased to inform you that the Government has made significant progress in restructuring our external debt. In June this year, the Government successfully restructured its Eurobonds. The restructured bonds were issued on 12^th June, 2024, and are currently trading on the international market.

Madam Speaker, with regard to the debt owed to the official creditors, the House may recall that the Government had reached a debt restructuring agreement with its official creditors in 2023, and we have made significant progress on that matter.

Madam Speaker, with regard to the status of the debt restructuring, negotiations with other commercial creditors, I wish to report that these are at different stages as follows:

1. we have concluded negotiations with Paramount and Huawei Technologies, and we have since executed an agreement; and
2. we also recently reached agreements in principle with some Chinese banks.

Madam Speaker, this is making progress. The implementation of the debt restructuring exercise is having notable benefits for Zambia. It has created the much-needed fiscal space for the implementation of developmental programmes to the benefit of the people of Zambia.

Madam Speaker, to illustrate this, accumulated arrears on external debt up to December 2023 were US$5.34 billion, and debt service due in 2024 would have been US$2.15 billion. So, without debt restructuring, debt service in 2024 would have been US$2.15 billion. The assessed debt service in 2025 would have been US$1.38 billion. If the debt was not restructured, the total debt service payable in 2025 would have been US$8 billion, equivalent to K246.4 billion, which would have swallowed up the entire Budget of Zambia. As a responsible Government, we have managed to restructure the debt. In this regard, we will only pay US$599 million, which is about K16.7 billion in 2025. So, the debt restructuring has had a very useful impact on us.

Decentralisation

Madam Speaker, in ensuring that services are taken closer to the people without leaving anyone behind, the Government has continued to devolve functions to local authorities.

Madam Speaker, the CDF is working. A total of 9,992 community projects have been under implementation in sectors such as health, education, water and sanitation and agriculture. We have witnessed improved provision of running water to communities, desks have been provided in schools, and there is now an acceleration in the pickup.

Madam Speaker, to make the implementation of the CDF more effective and efficient, the Government enacted the Constituency Development Fund Act of 2024. This Act has streamlined operations.

THE 2025 BUDGET

Madam Speaker, in 2025, the Government proposes to spend K217.1 billion or 26.6 per cent of the gross domestic product (GDP). Those of you, who were listening, if we had not restructured the debt, Zambia, next year would be paying almost K270 billion on debt service alone. The total Budget for 2025 is K217 billion, which means that if we had not restructured the debt, the whole of next year’s Budget would just have gone to debt service. We would have done nothing else.

Hon. Government Members: Hear, hear!

Mr Amutike: PF masholi!

Dr Musokotwane: Madam Speaker, this is just how important this debt restructuring is. So, 26 per cent of the GDP is what we will spend next year. Out of this amount, K174.2 billion or 80.2 per cent of the Budget will be financed by domestic revenue, while K8.2 billion or 3.8 per cent, less than 4 per cent, will be grants from our co-operating partners. The balance of K34.7 billion or 16 per cent will be financed through borrowing. Domestic borrowing will be K15.4 billion, or 7.1 per cent, while K19.4 billion or 8.9 per cent will come from external sources.

Madam Speaker, I will now highlight some of the expenditure proposals in the 2025 Budget. As usual, what I will highlight here is a summary, because the expenditures in totality are what you see in the Yellow Book. Of course, if I were to read through the Yellow Book, we would be here for one week, day and night. So, this is just a summary of what is in the Yellow Book.

Hon. Government Member: Kafwaya, uleumfwa?

Dr Musokotwane: Madam Speaker, the following are the categories under the expenditures:

General Public Services

Madam Speaker, under the General Public Services, I propose to spend K73.8 billion or 34 per cent of the Budget. Of this amount, K37.3 billion is for domestic debt servicing, K16.7 billion is for external debt payments, and K317.2 million is for continuous voter registration. Further, I propose to spend K5.7 billion on outstanding Government bills to increase liquidity in the economy.

Economic Affairs

Madam Speaker, I propose to spend K48.7 billion or 22.4 per cent of the Budget on the economic affairs function to stimulate economic activity and improve livelihoods. Of this amount, K12 billion is for the construction, upgrades, and rehabilitation of roads.

Hon. Members: Hear, hear!

Dr Musokotwane: So, this is an increase of more than K4 billion from what we had last year. The K12 billion is for the road sector.

Madam Speaker, I have allocated K15.4 billion to support interventions in the agriculture, fisheries, and livestock sub-sectors. Of this amount, K9.3 billion is for the Farmer Input Support Programme (FISP) to benefit more than 1 million farmers. To ensure food security, I propose to increase the allocation for the strategic food reserves to K2.4 billion from K1.7 billion. So, the strategic reserves are now going to increase.

Madam Speaker, I have increased the allocation to the Zambia Credit Guarantee Scheme, which I mentioned earlier on, from K386 million in 2024 to K852 million so that the SMEs, the small-scale farmers, and all the like that I spoke about, can go to the bank and borrow money. If the bank needs security, there is the credit guarantee that is being provided. We have more than doubled the amount for the Credit Guarantee Scheme. This increase will enable more of our small and medium enterprises to access affordable financing. The allocation will also support the implementation of the Sustainable Agriculture Financing Facility (SAFF) Programme …

Hon. Government Members: Hear, hear!

Dr Musokotwane: … so that many of us can grow our crops on land as big as 3 ha, 5 ha or 4 ha, whether you are in employment or not. People wishing to benefit under this scheme, whether farmers or otherwise, can approach any of the participating banks for a loan. The bank will undertake the usual assessment, and if satisfied, will provide a loan, which of course will be partially guaranteed by the Government.

Madam Speaker, earlier this afternoon, I said that the Government has embarked upon an aerial survey for minerals under the Aerial Geological and Geophysical Mapping. I have increased the allocation for this exercise to K364 million from K160 million this year. The mapping exercise will help define the nation’s mineral resource endowment and attract investment.

Madam Speaker, the enhanced CDF has proved to be a game changer. It is improving infrastructure, providing employment and income opportunities for many of our citizens, especially in rural areas. I, therefore, propose to increase the allocation for the CDF to K5.6 billion in 2025, from K4.8 billion in 2024. This will increase the allocation to each constituency to K36.1 million.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, I repeat: The enhanced CDF has proved to be a game-changer. It is improving infrastructure, providing employment and income opportunities for many of our citizens, especially in the rural areas. In other words, money is going to the rural areas. I, therefore, propose to increase the allocation for the CDF to K5.6 billion in 2025, from K4.8 billion in 2024. This will increase the allocation to each constituency to K36.1 million.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, I also need to say something about this amount. This is a rise from the K30.6 million we had this year to K36.1 million. However, earlier in my address today, I indicated that I had some good news regarding the CDF. This is the good news.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, there is also something that I made to link on feeder roads. The increased amount is now K5.5 million per constituency. So, the K3.3 million out of the K5.5 million, which all hon. Members will receive, is earmarked for improving feeder roads in rural areas.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, some constituencies bought the so-called yellow machines for grading and compacting the roads so that they are motorable throughout the year. We must accept that it is impossible to tar all the roads in a short period. However, rural roads must still be motorable. So, the way to achieve that, with the machines that some hon. Members have and what others are going to buy, is to work together. Some constituencies are struggling with fuel. So, the amount that we are allocating now, plus what is normally put out of the CDF, should help to improve feeder roads in the rural areas.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, it does not matter whether a constituency has yellow machines or not, if a neighbouring constituency has yellow machines, you can talk, is it not?

Hon. Member: Hire!

Dr Musokotwane: You can hire. It is still cheaper than going through –

Madam Speaker, with this additional amount that we have given, the view of the Government is that the feeder roads across the countryside should now improve to how we used to see them in the 1960s and 1970s. After each rainy season, the machines should move in and grade.

Madam Speaker, this is the good news that I had in my pockets, which I have now delivered.

Madam Speaker, a stern warning is appropriate at this stage to the officials involved in the administration of the CDF, especially those managing councils whereby, in spite of the efforts made by the Government to eliminate red tape and change the laws, they are still very slow in the implementation. I think, the Government has now lost patience. It will crack the whip on those who will be seen to be deliberately delaying the CDF implementation.

Mr Chabinga: Repeat!

Dr Musokotwane: Should I repeat?

Hon. Opposition Members: Yes!

Dr Musokotwane: Madam Speaker, a stern warning is appropriate at this stage to officials involved in the administration of the CDF, especially those managing councils. In spite of the efforts already made to eliminate red tape and other legal sources, the implementation of the CDF projects remains painfully slow. In addition, audited reports have in many cases cited abuse of the CDF funds, including illegal allowances. These vices are totally unacceptable and, therefore, the Government will now be cracking the whip on those who are found to be erring.

Madam Speaker, I propose to spend K700.7 million on the construction, upgrading, and rehabilitation of provincial aerodromes. So, K700.7 million has been allocated for upgrading provincial aerodromes. This will improve airport infrastructure and boost the tourism sector. I have further allocated K1.3 billion for the development of the tourism infrastructure, wildlife conservation and tourism marketing.

Education

Madam Speaker, I propose to spend K31.5 billion or 14.5 per cent of the Budget on education. Of this amount, K2.3 billion is for grants to early childhood education, primary and secondary schools to continue providing free education to our children.

Madam Speaker, the stern warning I gave on the CDF implementation also applies to the school grants because some of them are abused.

Madam Speaker, I have also allocated K2.6 billion to education infrastructure, of which K1.6 billion is for the construction of 120 secondary schools, while K300.5 million is for the completion of the stalled hostels at the Copperbelt University (CBU), the University of Zambia (UNZA) and other public universities.

 Madam Speaker, to improve the teacher-people ratio, the Government has allocated K80.3 million for the recruitment of 2,000 teachers in 2025. Further, I propose to increase the allocation to the School Feeding Programme to K534.4 million in 2025 to keep learners in school and improve learning outcomes.

Madam Speaker, I propose to spend K150 million on the implementation of the new national education curriculum, which will promote lifelong learning entrepreneurship and practical skills required by industry.

Health

Madam Speaker, to support the health service, I propose to spend K23.2 billion, or 10.7 per cent of the Budget. Of this amount, K5 billion is for the procurement of medicines and medical supplies, while K718.2 million is for the procurement of medical equipment. I have further allocated K1.9 billion for various health infrastructure.

Madam Speaker, to improve the quality of health care, I propose to allocate K156.9 million for the recruitment of 2,000 health personnel. I have further allocated K120 million for continued improvement of health care management information systems.

Housing and Community Amenities

Madam Speaker, I propose to spend K3 billion on housing and community amenities. Of this amount, K2.3 billion is for water supply and sanitation projects. This includes the construction of 947 boreholes and the rehabilitation of 500 boreholes, as well as the construction of twelve dams and the rehabilitation of fourteen. In addition to promoting decent housing and access to clean and safe water supply and sanitation, these allocations will contribute to building resilience among our citizens.

Social Protection

Madam Speaker, to improve the living standards of the poor and vulnerable, I propose to spend K16.2 billion on social protection. Of this amount, K8.3 billion is for the SCT programme in 2025, which includes the Drought Emergency SCT programme and K2 billion for the Cash-for-Work programme. So, the Cash-for-Work programme will continue in 2025. This is a clear demonstration of the commitment of the New Dawn Government to alleviating poverty and building resilience for inclusive growth.

Madam Speaker, when you look at these interventions, starting from this year to next year, no administration has pushed so much money to the ordinary people on the ground to support them in poverty. This is the first time it has happened and, indeed, a test to those who used to claim that they stood for the poor people, when in fact, the money went to a few people. These are the ones who would appear on social media posting how much bundles of money they had. The money, which was being displayed like that, is now going to the owners of the social support programmes.

Madam Speaker, to ensure that our pensioners have a dignified life, I propose to increase the allocation to the PSPF to K4.2 billion from K3.9 billion in 2024. I have also allocated K400 million to the LASF so that our colleagues who retire, can quickly get their money.

Public Order and Safety

Madam Speaker, I have allocated K8.4 billion or 3.9 per cent of the Budget towards the Public Order and Safety function. Of this amount, K217.8 million is for the implementation of the Integrated National Registration Information System (INRIS). Other interventions include the construction of prison infrastructure and the modernisation of law enforcement agencies.

Other Functions

Madam Speaker, I propose to allocate a total of K12.4 billion to the functions of Defence; Environmental Protection; and Recreation, Culture and Religion.

REVENUE ESTIMATES AND MEASURES

Madam Speaker, following the successful restructuring of our external debt, we need to strengthen domestic resource mobilisation to enable us to service the debt and sustain public service delivery. This will be achieved through tax and non-tax policy rationalisation as well as enhanced administration of tax. In this regard, I will not propose any tax concessions in this Budget. Instead, I propose revenue-generating measures.

Madam Speaker, to address the challenge of undeclared income and illicit financial flaws, I propose to introduce an advance income tax at 15 per cent on remittances exceeding US$2,000 or its equivalent. This will be for transactions made without a valid tax clearance certificate.

If you are transmitting money and you have a valid tax certificate, there will be no problem because we will know that you pay taxes. However, if you come from nowhere with millions and billions to transfer, when there is no evidence that you pay taxes, then the condition for allowing you to transmit the funds is that a 15 per cent tax will be withheld before the transmission is made. This will also apply to non-tax-compliant exporters.

Madam Speaker, in line with our commitment to harmonise the corporate income tax rate, I propose to revise upwards to 20 per cent from 15 per cent the corporate income tax rate applicable to profits realised from export of non-traditional products and value addition to copper cathodes. The harmonisation is aimed at unifying the income tax regime under the medium-term.

Madam Speaker, to support local industries and encourage further investments, I propose to introduce and revise upwards selected goods surtax applicable on imports of specified products which are locally manufactured.

Madam Speaker, to preserve the value of respective specific extra duty on tobacco and tobacco products, fuel and used motor vehicles, I propose an automatic annual adjustment index to the average inflation rate for the preceding year, which shall be capped at 20 per cent.

Madam Speaker, I propose to introduce excise duty at the rate of 10 per cent on the betting amount. Betting has become a big business, and it looks like tax compliance is not very transparent, hence the proposal for that percentage.

Madam Speaker, I also propose to increase excise duty on non-alcoholic beverages to K1 per litre from the current 60n.

Madam Speaker, I propose to revise upwards by 20 per cent the bands for presumptive tax on operators of motor vehicles for transportation of persons.

Non-Tax Revenue Measures

Madam Speaker, I propose to introduce a fee of K1,500 on occupational safety and health training offered by the hon. Minister of Labour and Social Security when requested for. I also propose to introduce fees for mine safety and examination and revise geological survey fees upwards.

Madam Speaker, I propose to increase fees for foreign artists because they do the same to our artists when they go out, to other countries. I propose to increase the fees for foreign artists to K5,000 and K15,000 from K1,778 for Southern African Development Community (SADC) and non-SADC-based artists, respectively. I also propose to categorise the arts promoter licences to international, local, and venue and exhibition licences.

Madam Speaker, to provide improved technology and advisory services to farmers and other stakeholders by the Zambia Agriculture Research Institute (ZARI), I propose to introduce a licensing fee for crop variety, basic and certified seed sales and parental line sales.

Madam Speaker, I propose the introduction of a fee of K2,500 for resident permit holders who stay outside Zambia for more than six months in line with international practice. That is what other countries are doing.

Madam Speaker, the revenue gain from these measures I have proposed is K3.1 billion. The measures will take effect on 1^stJanuary, 2025.

 Housekeeping Measures

Madam Speaker, to update, strengthen, and remove ambiguities in certain provisions of the tax laws and make tax administration more effective, I propose to amend the Income Tax Act, the Customs and Excise Act, and the Value-Added Tax Act, among others.

CONCLUSION

Madam Speaker, as I indicated earlier in my address, this year is special because of the unprecedented drought we have faced. The drought is the worst in our living memory. It has challenged us as a people to be more compassionate, to look after each other, and more importantly, to lift each other up. We have been challenged to stand together as One Zambia, One Nation, and build a more resilient and prosperous country.

Madam Speaker, as is clearly evident in my address today, the New Dawn Government has risen up to the challenge with ingenuity, determination, and unshakeable resolve. We acknowledge the difficult times, but we remain comforted by the refrain that “It is always darkest before the dawn of a bright new day”. We are convinced that in the light of this new day, the fruits of our collective work will clearly be seen. Let us, therefore, remain resolute and not lose faith.

Madam Speaker, we have addressed the immediate needs of our citizens by enhancing and extending the provision of social welfare support through programmes such as the scaled-up SCT, the recently introduced Cash-for-Work, the free education and the school feeding programmes.

Madam Speaker, we are also laying the foundation for resilience by investing in the health and education of our people. Further, by significantly enhancing resources under the CDF and devolving decision-making and responsibility, we are truly putting power in the hands of our people.

Hon. Members: Hear, hear!

Dr Musokotwane: Madam Speaker, despite the many challenges we have faced, we have not lost focus on the long-term goal of enhancing growth by promoting investments across critical sectors of the economy, such as mining, manufacturing, agriculture and energy. In addition, we are improving supportive infrastructure, such as roads and rail. Further, by utilising innovative approaches such as the public-private partnership (PPP), we are not only providing economic opportunities for businesses and the household, but also ensuring that we do not burden our children and grandchildren with the shameful yoke of unsustainable debt.

Madam Speaker, finally, by achieving significant milestones in resolving the crushing external debt burden that we inherited from our predecessors, we have re-established credibility with the rest of the world. In doing so, we are laying a firm foundation for a prosperous and sustainable future.

Madam Speaker, it is, therefore, no empty boast or talk to say that, as the New Dawn Government, we are truly building resilience for inclusive growth and improved livelihoods in a manner that no one is left behind.

Madam Speaker, I thank you.

Hon. Members: Hear, hear!

Madam Speaker: Hon. Members, in line with Order No.166(2) of the National Assembly of Zambia Standing Orders 2024, the Estimates stand referred to the respective Committees for detailed consideration. In that regard, the Expanded Planning and Budgeting Committee is expected to submit its report on the Estimates to the House by 30^th October, 2024.

The House will be adjourned until Tuesday, 15^th October, 2024. This follows a resolution by the House Business Committee at its meeting held today, 27^th September, 2024, to enable the House deal with urgent business in line with Standing Order No. 166(4).

 

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MOTION

ADJOURNMENT

The Vice-President (Mrs Nalumango): Madam Speaker, I beg to move that the House do now adjourn.

 

Question put and agreed to.

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The House adjourned at 1650 hours until 1430 hours on Tuesday, 15^th October, 2024.

 

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