Global economic think-tank, the Economist Intelligence Unit (EIU), has warned that government revenue will be going down between now and the next few years on account of slow recovery in the country’s key sectors.
The sectors include agriculture and tourism.
The firm says, on the other side, public expenditure will remain elevated, at more than 30 percent of GDP between 2021 and 2026.
This is quoted by local advisory firm, Bridgepath Capital Limited, in its April 2022 Economic Performance Report.
According to the report, the EIU expects revenue collection to remain subdued.
Commenting on the matter, taxation expert Emmanuel Kaluluma agreed with the notion, adding that the country is facing tough that it would and it will be hard to sustain expenditure.
He added that although such is the case, all hope is not lost, saying if government can move in quick to enhance revenue collection, things can change.
“We need to move with speed as the President has been preaching, we need to implement projects and laws that will make sure that revenue collection is improved through improved economic environment,” he said.
The total revenue and grants for the 2022-23 fiscal year are projected at K1.96 trillion, a 58 percent increase from K1.24 trillion in the 2021-22 fiscal year.
The total expenditure for the 2022-23 fiscal year is projected at K2.84 trillion, an increase of 38 percent increase from K2.06 trillion for the 2021-22 fiscal year.
Economist Ben Kalua said unless government changes on expenditure the going will continue getting tough.
“We need, as a country, to tighten how we are spending so that it matches revenue. Otherwise, the deficit will continue widening pushing us further to debt distress which we are already in,” he said.
The overall fiscal deficit for the 2022-23 fiscal year is projected at K884 billion, an increase of 7 percent from a revised fiscal deficit of K825 billion for the 2021/22 fiscal year and represents 7.7 percent of GDP.
Delivering the 2022-23 national budget in parliament, Minister of Finance and Economic Affairs Sosten Gwengwe said government will implement different measures to control expenditure.
Among others, he said government will review benefits and entitlements for senior government officials, including the Presidency and Cabinet Ministers, in consultation with the Office of the President and Cabinet.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.