2025 Budget Speech by Dr. Situmbeko Musokotwane, Zambia PDF

2025 BUDGET ADDRESS BY HONOURABLE DR. SITUMBEKO MUSOKOTWANE, MP, MINISTER OF FINANCE AND NATIONAL PLANNING, DELIVERED TO THE NATIONAL ASSEMBLY ON FRIDAY, 27TH SEPTEMBER, 2024 1. Madam Speaker, I have the honour Hichilema, President of the...

2025 BUDGET ADDRESS BY HONOURABLE DR. SITUMBEKO MUSOKOTWANE, MP, MINISTER OF FINANCE AND NATIONAL PLANNING, DELIVERED TO THE NATIONAL ASSEMBLY ON FRIDAY, 27TH SEPTEMBER, 2024 1. Madam Speaker, I have the honour Hichilema, President of the Republic of to present the Estimates of Revenue and Zambia, on 29th February, 2024, declared Expenditure for the period 1st January, 2025 the drought a National Disaster and to 31st December, 2025. This is pursuant to Emergency. Following the declaration, this Article 202 of the Constitution of Zambia august House revised the 2024 Budget in (Amendment) Act, 2016. order to channel more resources towards humanitarian relief. The top priority of the 2. Madam, this is the fourth budget Government, in this regard, is to ensure no that the UPND Government is presenting to one dies from hunger and thirst. I will cover our nation. It is special in two respects. these initiatives in depth later in my Firstly, the 2025 Budget marks the start of a Address. new way of processing the budget here in Parliament. The new process will give the 5. Madam Speaker, amidst the Honorable Members of Parliament and the challenges the country is facing, there is public at large more time to scrutinise our some good news. Let me at this stage just budget proposals. In this sense, this is yet give four examples: another important step in delivering better governance. (i) The effort to transform our economy is now in high gear after 3. Madam Speaker, the second reason we resolved challenges at Konkola why the 2025 Budget is special is because it Copper Mines and Mopani Copper comes after the extraordinary year of 2024. Mines and then re-opened them. This is the year when the most severe Further, new companies in mining drought in our living memory unleashed and non-mining sectors are coming unprecedented socio-economic challenges. in strongly, with the prospects of Millions of our citizens face food insecurity. increasing jobs and foreign They are facing extended hours of load exchange earnings in the next few shedding. They have inadequate access to years; safe and clean water. Understandably, life has been tough. As a Government, we have (ii) Social and economic infrastructure had to respond to these challenges. is being constructed like at no other time in the history of this country 4. Madam, to address the effects of where even the remotest place is the drought, His Excellency, Mr. Hakainde having its share. Madam, CDF is 1  truly a game changer. And, on this well as the Annual Borrowing Plan for subject of CDF, I have further good 2025. In Part four, I conclude my Address. news for this august house later this afternoon; Part I (iii) Road infrastructure is expanding, MACROECONOMIC DEVELOPMENTS IN 2024 with the flagship road being the Lusaka-Ndola dual carriageway; Global Economic Developments and 8. Madam Speaker, global growth is (iv) Government has continued with the projected to slow down to 3.2 percent in provision of free education and 2024 from 3.3 percent in 2023. This is on embarked on major social account of lower growth in advanced infrastructure projects. Madam, economies despite higher growth in these are but few examples of the emerging and developing economies. Over progress that our country is making the medium-term, global growth prospects even as we face challenges caused remain sluggish mainly due to geopolitical by the drought. tensions, climate change events, and relatively tight financial conditions. 6. Madam, the 2025 Budget which I am presenting today, is premised on Domestic Economic Developments economic recovery and promoting growth to improve the livelihoods of our people. Economic Growth The Budget is well-placed to enhance our capacity to withstand shocks. It is for this 9. Madam Speaker, our economy is reason that the theme for the 2025 Budget is projected to grow by 2.3 percent in 2024 “Building resilience for inclusive growth compared to 5.4 percent recorded in 2023. and improved livelihoods”. The Budget, The slowdown is mainly attributed to the therefore, provides policy measures that impact of the drought which has will build the resilience of our economy and significantly reduced agriculture production promote inclusive growth. and electricity generation. 7. Madam Speaker, my Address this 10. Madam, the economy is expected afternoon is in four Parts. In Part one, I to rebound in 2025. This is premised on the discuss macroeconomic developments in recovery of agriculture and a pickup in 2024. In Part two, I present the mining. It is also premised on the continued macroeconomic goals and strategies for growth of the information and 2025, while in Part three, I provide communication technology, Estimates of Revenue and Expenditure as accommodation and food services, and construction sectors. 2 Inflation 14. Madam Speaker, following the realignment of the Budget, the deficit is now 11. On inflation, Madam Speaker, the expected to be 6.4 percent of GDP country has experienced pressure over the compared to the initial estimate of 4.8 past year, registering 15.6 percent in percent of GDP. This projected fiscal September this year from 13.1 percent in outturn is actually very commendable given December 2023. The main drivers are all the pressures emanating from the linked to the drought, which resulted in drought. It is a reflection of this increased food prices. The Kwacha-US Government’s commitment to prudent dollar exchange rate, which saw a management of public funds. depreciation of 2.8 percent on a year-to-date basis, has also been a factor in raising 15. Madam, early indications are that inflation. To moderate inflationary both the Social Cash Transfer and the Cash pressures, the Bank of Zambia tightened for Work are being implemented and monetary policy, raising the Policy Rate to communities in the areas affected by the 13.5 percent from 11.0 percent and the drought have received them well. As we statutory reserve ratio to 26.0 percent from speak now, young men and women engaged 17.0 percent. in the Cash for Work Programs in Lusaka, for example, are clearing drainages and Budget Performance cleaning streets. No doubt, this will assist in reducing water borne diseases in the coming 12. Madam Speaker, I will now rainy season. In Mbabala Constituency, summarise the performance of the 2024 young men and women are clearing Budget. Total expenditure for the year is culverts. In Luola and Ngúnyama Wards of now projected at K198.6 billion, which is Liuwa Constituency, canals are being 11.6 percent above the approved 2024 cleared. Budget. Notable expenses include debt service, Farmer Input Support Programme, 16. Madam Speaker, this Government CDF, scaled up Social Cash Transfer, and has turned the drought tragedy into a Cash for Work. positive force by empowering communities with funds with which to buy food. In other 13. Madam, with respect to revenues words, communities are being given the and grants, these are projected to close at opportunity to earn money as they perform K148.1 billion, which is 2.5 percent above works that are important for their areas. the target of K144.5 billion. The favorable revenue performance underscores Debt Position Government’s efforts to enhance domestic resource mobilisation and grant financing, 17. Next, I will make remarks on debt. to support Government expenditure. Madam Speaker, as at end-June 2024, the central Government external debt stock, 3 excluding publicly guaranteed external in the policy rate. Notwithstanding the debt, increased by 4.1 percent to US $15.17 increase in lending rates, credit to the billion from US $14.57 billion at end- private sector has been expanding, growing December 2023. The increase was largely by 36.9 percent in July this year compared on account of new disbursements from to 34.2 percent in July 2023. The bulk of the multilateral creditors and continued credit went to wholesale and retail trade, accumulation of arrears. manufacturing, and agriculture sectors. 18. Madam, as at end-June 2024, 22. Madam, overall, the banking sector publicly guaranteed external debt declined continues to be resilient, supported by by 1.3 percent to US $1.39 billion from US adequate capital, liquidity buffers, and good $1.41 billion at end-December 2023. This asset quality. Similarly, the performance of was on account of debt service payments by the deposit-taking non-bank financial some guaranteed entities. institutions sector has remained satisfactory as the capital position, earnings 19. Madam Speaker, the stock of performance, liquidity management and Treasury bills and Government bonds sensitivity to market risk remain reduced by 3.1 percent to K225.5 billion at satisfactory while asset quality is rated fair. end-June 2024 from K232.6 billion at end- December 2023. The reduction was mostly 23. Madam Speaker, in April this year, due to tight money market liquidity the Bank of Zambia took possession of conditions, which constrained commercial Investrust Bank as it was no longer banks’ lending to Government. financially sound. In accordance with the law, the Bank of Zambia executed a 20. Madam, as at end-June 2024, the purchase and assumption transaction with stock of outstanding Government bills to Zambia Industrial Commercial Bank various suppliers reduced by 18.3 percent to Limited. All deposit balances, with K79.8 billion from K97.7 billion as at end- matching assets, were transferred to the December 2023. With the commitment to Zambia Industrial Commercial Bank dismantle fuel arrears, we expect the stock Limited and all customers have access to to reduce significantly by the end of the their money. year. External Sector Performance Financial Sector Performance 24. Madam Speaker, preliminary data 21. Madam Speaker, commercial indicate that imports amounted to US $4.5 banks’ average nominal lending rates rose billion during the first half of this year, 2.7 to 28.7 percent in August 2024 from 26.6 percent lower than the corresponding period percent in December 2023. This was in 2023. This largely reflects subdued broadly in line with the upward adjustment economic activity mainly occasioned by the 4 drought. Exports were broadly unchanged at b) Reduce inflation to the 6-8 percent US $5.3 billion during the same period. target band in the medium-term; Most of the export earnings were from copper, driven by higher prices, while non- c) Maintain international reserves above traditional export earnings from 3.0 months of import cover; commodities such as cane sugar declined. d) Increase domestic revenue to at least 25. Madam, as at end-July 2024, gross 21.3 percent of GDP; international reserves increased to US $3.9 e) Reduce the fiscal deficit to 3.1 percent billion, equivalent to 4.3 months of import of GDP; and cover from US $3.3 billion at end- December 2023, which was equivalent to f) Limit net domestic borrowing to 1.9 3.7 months. The increase was mainly on percent of GDP. account of the US $570 million disbursement by the International Monetary POLICIES FOR 2025 Fund under the Extended Credit Facility Arrangement. 28. Madam, I now present specific policies for 2025. Part II A. ECONOMIC TRANSFORMATION MACROECONOMIC AND JOB CREATION OBJECTIVES 29. Madam Speaker, the economic 26. Madam Speaker, the devastation transformation and job creation pillar is key caused by the drought demands a response, in transforming the livelihoods of the not just to recover, but also to build Zambian people, especially with regard to resilience in our people and the economy. increasing income and reducing inequality. An important element of realising this is to It is also a pillar where measures to enhance build a stronger economy. It is a well- resilience to shocks are of utmost known fact that the stronger an entity is, the importance. I now present interventions in better its ability to respond to shocks and the various sectors under this pillar. challenges such as drought. Mining 27. Madam, to build economic resilience and improve the livelihoods of 30. Madam Speaker, mining remains our people, Government has set the very important for Zambia. It sets the tempo following macroeconomic objectives for of other activities. When the industry does 2025: well, other sectors do well too. Of course, the opposite is also true. This largely a) Attain a real GDP growth rate of 6.6 explains the difficult conditions our percent; economy has gone through in the past few 5 years because two of the biggest players in be invested at the recently commissioned the sector, namely, Konkola Copper Mines Mingomba Mine Project in Chililabombwe. and Mopani Copper Mines were on their This will create over 1,000 jobs. death beds. 34. Madam Speaker, riding on an 31. Madam, noting the importance of improved investment climate, the third and the mining sector to Zambia, this final step was to encourage mineral Government prioritised reviving the exploration. Mining exploration is an industry when we came into office, in 2021. important economic activity by itself as it The strategy involved three steps. The first creates jobs. Following on the step was to re-open mining companies that announcement by the President last year, were locked up in legal disputes. Through Zambia has already launched a country- this step, Konkola Copper Mines and wide high-resolution aerial geophysical Mopani Copper Mines have been revived. survey and this is going on right now. The survey will generate reliable and updated 32. Madam Speaker, the second step geological information which will support was to improve the mining investment investment in greenfield projects and climate in our country. This has been expansion of brownfield projects. achieved and today, mining companies that had planned to leave Zambia, have stayed 35. Madam, copper production in the on and FQM and Lumwana are already first half of 2024, increased by 6.2 percent implementing huge production expansion to 346,747 metric tonnes from 326,408 projects. The improved investment climate metric tonnes produced in 2023 during the has also resulted in the revival of Shaft 28 same period under review. I am very in Luanshya, a mine that had been hopeful that this rebound marks the start of abandoned for nearly two decades, and will our consistent journey towards the target of create 3,000 jobs. Lubambe Mine has also three million tonnes of copper production. been saved from closing and is expanding With the profound interest that we see in the with an initial investment of US $300 expansion of existing mining assets, the million. Kalengwa Mine, in Mufumbwe, development of new mines and the will soon come onboard with an initial expansion in mineral explorations, I have no investment of about US $200 million. doubt that we shall reach the target. And, this will help to establish a strong economy 33. Madam, still on the improved never seen in this country before. investment climate, the interest that the country is attracting in new mines is 36. Madam Speaker, Government will profound. For the first time in our country, also continue to encourage explorations of a copper mine is being opened at Kitumba hydrocarbons such as oil and gas to help in Mumbwa District and will create 2,500 unleash areas of new investments for the jobs. In addition, a total of US $2 billion will country. In this regard, we shall emulate the 6 approaches taken by neighboring and other improve nutrition, create jobs, and increase countries that have succeeded in attracting agricultural exports. capital in the industry on a win-win basis. 40. Madam Speaker, to reduce over 37. Madam, before I move away from reliance on rainfed agriculture, we will the mining sector, the House needs to know continue to promote irrigation development. that Government will this year formalise To this end, we will continue with ongoing trading in gold. Government is establishing irrigation schemes, and embark on the gold marketing centres with pilot projects in construction of five new dams, namely, Mumbwa and Rufunsa districts. The Chinkhombe in Katete, Kashambana in Ministry of Mines will provide the details in Nkeyema, Mulemba in Kalomo, Namakala due course. in Mulobezi, and Pemba in Pemba districts. Agriculture, Livestock and Fisheries 41. Madam, let me assure the nation through this august House that the New 38. Madam Speaker, building Dawn Government has no intention of resilience in the agriculture sector is abandoning the Farmer Input Support imperative for the growth of our economy. Programme. The intention of Government is During the 2023/2024 farming season crop to improve the performance of the production was severely affected by the El Programme and ensure that only eligible Niño phenomenon in seven out of the ten farmers benefit. Government will, provinces. This resulted in reduced therefore, in 2025, fully migrate the Farmer production of soya beans by 77.7 percent, Input Support Programme from Direct Input rice by 60.8 percent and maize by 53.6 Support to e-voucher modality, which is percent. A similar pattern was observed in more flexible and effective. Under the e- other crops such as cassava, millet, voucher, we are leveraging on technology to sorghum, wheat, and groundnuts. The eliminate ghost farmers, as well as promote consequence was a deficit in the national efficiency and real time settlement of agro- food balance sheet of 2.1 million metric dealer payments. tonnes of maize grain equivalent. 42. Madam Speaker, to increase the 39. Madam, in July this year, area under agricultural production, Government launched the Comprehensive Government has continued with farm block Agriculture Transformation Support development at Luena, Nansanga and Programme. The Programme has seven Shikabeta. At Luena, 275 hectares is under main components, namely, irrigation, avocado production and the first harvest is mechanisation financing, farm blocks, expected next month. In addition, an anchor extension services, input support, agro- farm has commenced maize production. A processing, and infrastructure development. total of 50 kilometres of road network at The objective is to increase food security, Nansanga and 30 kilometres at Luena farm 7 blocks have been completed. Further, programmes, and has targeted to distribute Government has demarcated 350 farms and 6,000 heifers, as well as 300 superior bulls approved 36 co-ventures at Kalumwange, for both artificial insemination and natural Kalungwishi, Luena, Luswishi, Manshya, mating amongst the community herds. Musokotwane, Shikabeta, and Solwezi farm blocks. 46. Madam Speaker, the interventions we have been putting in place in the 43. Madam, in the livestock sub- fisheries sub-sector are paying dividends. sector, Government will continue to The national fish deficit has reduced to prioritise disease control and prevention. 51,000 metric tonnes from 74,000 metric Government has this year procured 620,000 tonnes in 2023. To ensure all year round doses of CBPP vaccine for 380,783 cattle in production of fingerlings at Government Muchinga, Northern, Northwestern and fish farms, greenhouses are being Western provinces. Further, 437,051 cattle constructed at Chadiza, Kaoma, Mwenda, were vaccinated against foot and mouth Mwinilunga, and Sinda fish farms. To disease in Itezhi tezhi, Kalomo, Mkushi, and further increase fingerling production, three Namwala. hatcheries are being established in Kasempa, Mushindamo and Samfya aqua 44. Madam Speaker, Government will parks, bringing the total to 84 in 2025. This continue to undertake animal disease and will increase fingerling production to 460 prevention measures through the million in 2025 from the current 433.4 construction of biosecurity checkpoints, million. quarantine stations and operationalisation of regional and district laboratories. In this Energy regard, Chipata and Choma laboratories have been operationalised while Isoka and 47. Madam Speaker, our dependence Mongu are partially operational. Works at on hydropower generation, at 84 percent, Kasama, Ndola and Solwezi laboratories are has exposed our vulnerability to climate expected to be completed by the end of this change events. Due to the drought, the year. Equipment for all the seven current generation capacity has significantly laboratories has been procured and reduced to around 1,225 megawatts against distributed. Further, the construction of the the installed capacity of 3,811 megawatts. vaccine plant at Central Veterinary Institute This under generation is responsible for the has commenced. shortage of electricity. 45. Madam, to increase livestock 48. Madam, in a bid to urgently production to seven million by 2027 and address the power deficit, we have taken a increase the number of households engaged multi-pronged approach. First, we are in livestock farming, Government will importing power from other countries, enhance stocking and restocking notably Mozambique, Namibia, South 8 Africa and Zimbabwe. Second, we are hydro power tends to be more expensive. promoting use of off-grid solutions such as But clearly this opposition has been short industrial generators and solar systems. sighted because now the loss of power is These are being installed in markets, public proving to be more expensive compared to hospitals and schools. Third, Government a situation where power was available even has encouraged the construction of an at a higher cost than hydro power tariffs. additional thermal power plant in Maamba People are struggling in business because to double capacity to 600 megawatts by next either they have no power at all or they are year. Fourth, Zesco and private investors are forced to run expensive gen sets. investing in a number of solar power stations at several strategic locations. These 51. Madam Speaker, this experience is include Chisamba 100 megawatts, Choma a clear lesson that the country would have 50 megawatts, Kasama 100 megawatts, and been better off to attract investment in Kariba 100 megawatts. alternative energy sources by implementing cost-reflective tariffs. Even though power 49. Madam Speaker, Government is would be more expensive than it is now, at also implementing the net-metering least, it would be available and there would initiative to encourage consumers to be no requirement to run expensive generate power and supply excess to the generators. However, this should be done national grid. Further, in June this year, together with a framework that guarantees Government launched the Energy Single affordable electricity for households on Licensing System to streamline the power consumption within an agreed limit licensing process. This will reduce the per month. period applicants take to obtain licenses and permits for energy projects. 52. Madam, to increase access to electricity in rural areas, Government will 50. Madam, the severe power shortage continue implementing the Rural that the country is going through now is Electrification Programme. So far, 131 Grid partly a result of our nation’s opposition to Development and 38 Off-Grid Renewable what energy experts have been advising us Energy Projects have been completed. The for decades. In warning against over Rural Electrification Authority is currently dependence on hydro electrical power the operating 12 mini grids resulting in 2,095 experts have, over decades, advised us to connections. By the end of the year, 15 new have an energy mix that included non-hydro solar projects will be completed and will power sources in order to avoid the risk of result in 3,421 connections. the very problem that we are going through now. As a nation, we have not taken heed of Transport and Logistics this advice because it would result in the 53. Madam Speaker, the passion with cost of electricity being higher since non- which Members of this House debate roads 9 and other transport modes is a clear year and is scheduled to be completed in indication of the importance they attach to 2026. this sector. Government will, therefore, continue to invest and encourage 56. Madam, in July this year, investment in the construction, Government concluded negotiations with rehabilitation and maintenance of road, rail, Millennium Challenge Corporation, an aviation and maritime infrastructure. Let me agency of the United States Government, now update the nation on recent for a grant financing of US $458 million. developments in the sector, starting with The Millennium Challenge Corporation roads. Board has since approved the project and signing is scheduled to take place next 54. Madam, the construction of the 210 month, here in Lusaka. The funds will, kilometres Chinsali-Nakonde Road which among others, be used to rehabilitate and started in 2018, is at 98 percent, and will be maintain 222 kilometre Chipata-Lundazi- completed by the end of this year. In Old Magodi Road and 116 kilometre addition, Government has secured funding Landless-Mumbwa Road. Detailed designs from Cooperating Partners for the will be undertaken in 2025 and works will rehabilitation of 162 kilometres of the commence thereafter. Chinsali-Mpika Road. Further, Government through the Transport Corridor for 57. Madam Speaker, Government is Economic Resilience Project will upgrading and rehabilitating 22 kilometres rehabilitate 238 kilometres of road network of urban roads in Lusaka and Sinazongwe from Serenje to Mpika. The design review this year. In 2025, Government will upgrade process has been completed and works will and rehabilitate more urban roads in Choma, commence in 2025. Kitwe, Luanshya, Lusaka, Mazabuka, Ndola, Sinazongwe and Solwezi. 55. Madam Speaker, Government is rehabilitating and upgrading the 71 58. Madam, let me now turn to our kilometre Monze-Niko Road. Works flagship instrument in the road sub-sector, commenced in 2023 and are scheduled to be namely, the Public- Private Partnerships. completed in 2025. Rehabilitation of the This Government found empty coffers and Lusaka-Mongu Road from Tateyoyo Gate yet the key infrastructure like the Lusaka- to Katunda/Lukulu Junction, covering a Ndola Road was in desperate need of distance of 87 kilometres commenced in repairs. While the need was recognised, August this year and works are scheduled to sadly there was no public money to repair be completed in 2026. In addition, the roads. This is how we turned to PPPs to rehabilitation of the 88 kilometre Batoka- find a solution and, indeed, other countries Maamba Road commenced in March this have successfully used the same method. 10 59. Madam Speaker, the New Dawn 61. Madam, in the rail sub-sector, Administration has demonstrated that Government has signed a Memorandum of Public-Private Partnerships can deliver Understanding with the Governments of results in infrastructure development. We China and Tanzania to rehabilitate and are being cited all over Africa as an example modernise TAZARA Railway of success. Through the PPPs mode, infrastructure and equipment. Once Government has signed seven Projects with rehabilitated, tonnage on the railway line a total coverage of 838 kilometres. So far, will increase to 2.5 million metric tonnes the Chingola-Kasumbalesa Road is from the current half a million metric tonnes completed and is operational while works per annum. on the Lusaka-Ndola Dual Carriageway, including the rehabilitation of the 62. Madam Speaker, with support of Masangano-Fisenge-Luanshya Road, are Cooperating Partners, the New Dawn progressing very well and are earmarked to Government is actively working to be completed in 2026 ahead of schedule. revitalise Zambia Railways System in a Works on the Katete-Chanida Road, methodical and cost-effective manner. The Mufulira-Mokambo Road and the Ndola- ultimate goal is to improve track speed, Mufulira Road and access road to Sakania signaling and secure funding for long-term are on course. Further, mobilisation and investments. early works on the 85 kilometres of the 63. Madam, in the second phase, the Lumwana-Kambimba Road in Government aims to accelerate the Northwestern Province will commence in acquisition of an additional grant financing the last quarter of 2024. for the long-term rehabilitation of the 60. Madam, I will now turn to feeder railway system from Chingola to roads because they play a critical role to Livingstone. In addition, the Government is farming and rural communities. I am happy in discussion with Cooperating Partners for to report that 4,806 kilometres of feeder possible support with rail wagons and roads have been graded, rehabilitated or locomotives. maintained across the country. Of these, Tourism 2,980 kilometres were graded and maintained under the Constituency 64. Madam Speaker, two years ago, Development Fund, while the rest have been Government took some bold measures to rehabilitated and are being maintained assist this sector to quickly recover from the under the Improved Rural Connectivity effects of the COVID-19 Pandemic. The Project. I will have some good news for you, measures included robust marketing, Madam Speaker, on feeder roads when I hosting of conferences and favourable discuss the estimates of revenue and policies such as waiver of visa fees. The expenditure for 2025. outcome of the measures has been very 11 good. During the first half of 2024, for However, this year, it has been adversely example, there has been a 21 percent affected by the shortage of electricity due to increase in international arrivals to 732,732 the drought. According to preliminary data, compared to the same period in 2023. To the sector grew by 4.0 percent in the first further boost tourism, plans are underway to quarter but contracted by 2.7 percent in the operate the Victoria Falls Border for 24 second quarter. hours. 68. Madam, to support the growth of 65. Madam, to conserve biodiversity the sector, Government has continued to and promote integrated transboundary develop multi-facility and special economic management, Government will continue to zones. So far this year, the Lusaka South collaborate with neighboring countries in Multi-Facility Economic Zone has secured the development of transfrontier US $110 million in investment from 15 conservation areas. So far, the Kavango- companies bringing the cumulative Zambezi Transfrontier Conservation Area investment to US $1.6 billion. Currently, has been implemented while agreements the Zone has 30 fully operational with Malawi, Mozambique and Zimbabwe companies, which have created about have been signed. These agreements will 16,000 jobs for our people. Further, 21 facilitate the development of infrastructure companies are at construction stage and to ease movement of tourists across the have created 8,450 jobs. The Jiangxi Multi- borders. Facility Economic Zone in Chibombo has attracted investment in excess of US $40 66. Madam Speaker, in the 2024 million in the production and recycling of Budget Address, I informed this august batteries and manufacturing of copper House that the US $100 million Green, cables, thereby creating more than 400 jobs. Resilient and Transformational Tourism Development Project will support the 69. Madam Speaker, to support the development of tourism infrastructure at sector further, Government is in the process Kasaba Bay, Liuwa National Park, and the of establishing special economic zones for source of the Zambezi River. I am happy to beef in the Kafue Flats and crop production report that the Project has commenced. in Kafulafuta, Lufwanyama, Masaiti, Feasibility studies that will inform the Mpongwe, and Ngabwe districts. Our goal planned infrastructure development in the is to become an export hub for beef and project areas are underway. Construction crops. works are scheduled to commence in 2025. 70. Madam, let me also shed some Manufacturing light on specific achievements that this Government has realised in this sector. The 67. Madam Speaker, the Zambia-China Mulungushi Textiles was manufacturing sector has been growing. finally reopened in August this year with a 12 planned investment of US $170 million! production and will create about 2,000 The company, was abandoned 17 years ago, additional jobs. and in the past years, there were false promises after promises to reopen it. It had Small and Medium Enterprise to take Bally to fix it! The UPND Development Government has truly re-opened it and the 73. Madam Speaker, Government will company is expected to create more than continue to support SMEs as they play a 500 jobs. critical role in national development. Our 71. Madam Speaker, the development interventions will focus on facilitating of Zambia-China Mulungushi Textiles will access to affordable financing and provision be done in four phases. Phase I is the of infrastructure. In this regard, printing of fabrics and garments, Phase II is Government will continue implementing solar panel assembly, and Phase III is empowerment programmes such as the installation of a spinning facility and a 20- Citizens Economic Empowerment Fund, as megawatts solar power plant. Phase IV will well as Women and Youth Empowerment be the development of the cotton value Fund under the Constituency Development chain and will include engaging small-scale Fund. farmers through an out-grower scheme. The 74. Madam, under the Citizens company has since started receiving Economic Empowerment Fund, machines and equipment which will enable Government has over the last three years completion of the first three phases this disbursed more than K950 million to over year. 83,000 beneficiaries. Further, under the 72. Madam, I wish to elaborate further Constituency Development Fund, on the specific progress under the Government has, this year, disbursed more manufacturing sector by giving the example than K485 million to the youth, women, of production of fertilisers. From being a net persons living with disabilities, and importer, I am happy to report that the cooperatives. country is now a net exporter of Compound- 75. Madam Speaker, to provide D fertiliser. In 2023, the country exported appropriate infrastructure for SME over 19,000 metric tonnes of fertiliser to operations, Government has completed the neighbouring countries. This year, more construction of industrial yards in Chipata, than 91,000 metric tonnes will be exported. Kasama, Kitwe, Lusaka, Mansa, Mongu, Further, construction of a urea plant with a Ndola, and Solwezi. So far, 108 SMEs and production capacity of 300,000 metric 38 cooperatives have been onboarded and tonnes per annum is expected to be are operating in the yards. The construction commissioned by early 2025. This will of the second phase of yards is earmarked to make Zambia self-sufficient in fertiliser commence in 2025 and will focus on 13 constructing industrial yards in the communication and technology remaining three provinces which are infrastructure across the country. A total of Central, Muchinga and Southern. 202 towers are being constructed and will be completed by the end of this year. Of these, 76. Madam, to further address 171 are being constructed by Government challenges faced by SMEs in accessing through ZICTA at a cost of K409 million affordable finance, Government increased while 31 are being constructed by the the allocation to the Zambia Credit private sector. Guarantee Scheme Limited to K386 million in 2024 from K150 million in 2023. The 79. Madam, I am happy to report that a allocation to the Scheme will be increased fourth mobile network operator, Zed further in 2025. Mobile, commenced operations in August this year. The operator has committed to 77. Madam Speaker, to mitigate the investing over US $400 million and is impact of the drought on the agriculture and expected to create more than 450 jobs. energy sectors, the Bank of Zambia will soon roll-out a support facility. Funds will 80. Madam Speaker, following the be provided to eligible financial institutions granting of a low-earth-orbit satellite to on-lend to non-financial businesses and license to Starlink, unserved and households operating in these sectors at underserved areas are now being connected. concessional interest rates. In addition, the So far, Government has procured 525 Bank of Zambia has been collaborating with Starlink kits, out of which 288 will be the private sector to establish a credit installed in 109 post offices, 23 youth guarantee scheme to enable affordable resource centres, and all the 156 credit to micro, small and medium constituency offices. This will all happen by enterprises. end of this year. The balance of the 237 kits will be installed in agriculture camps, Information and Communication selected local authorities, and border Technology facilities, among others. These installations will improve public service delivery. 78. Madam Speaker, in the first half of this year, the number of active mobile 81. Madam, Government realises the cellular subscriptions increased to 21.9 significance of establishing Digital million from 20.1 million in the Transformation Centres. These centers offer corresponding period of 2023. This access to digital tools, internet services, and represents an increase in the mobile training programs. To this end, Government penetration rate to 109.2 per 100 inhabitants has embarked on the rehabilitation of post from 102.4 over the same period. To offices which will be established as Digital accelerate digital transformation, Transformation Centres. This year, 48 Government will continue to invest in Digital Transformation Centres have been 14 established, out of which 23 are located in education through infrastructure youth resource centres and 25 in rural post development, teacher recruitment, offices. Further, 75 post offices will be curriculum development and provision of repurposed into Digital Transformation teaching requisites. Centres with full internet connectivity by the end of this year. In 2025, an additional 85. Madam, the provision of free 50 post offices will be repurposed into education is meant to ensure that no child is Digital Transformation Centres. left behind. Since its introduction in 2022, we have seen a massive increase in Science, Technology and Innovation enrolment of about two million learners. Invariably, the increase led to a 82. Madam Speaker, science, deterioration in the teacher-pupil ratio to technology and innovation remain pivotal to 1:60 in 2022 from 1:43 in 2021. It also led the success of key sectors in our economy. to congestion in classrooms and shortage of To sustain progress and ensure long-term desks in some areas. To address these growth, Government will continue to challenges, Government concurrently prioritise investment in research and embarked on recruitment of teachers, development to enhance the country's construction of schools and classrooms as innovation capacity. These investments are well as procurement and rehabilitation of essential to driving economic growth, school desks. industrialisation, and diversification across key sectors such as agriculture, 86. Madam Speaker, to improve the manufacturing, mining, tourism, energy, quality of education, we have recruited an and health. unprecedented number of teachers cumulatively standing at 39,250 since 2021. 83. Madam, notable progress has been This has resulted in an improvement in the made in the establishment of innovation teacher-pupil ratio to an average of 1:51 in hubs and incubators. To date, 53 innovation 2024 from 1:60 in 2022. In 2024, we are hubs and 21 incubators have been recruiting 4,200 teachers and an additional established to nurture start-ups, promote 2,000 in 2025. Teacher recruitment is a entrepreneurship, and accelerate the growth major driver of ensuring quality education of tech-based businesses. through increased teacher-pupil contact time. B. HUMAN AND SOCIAL DEVELOPMENT 87. Madam, Government is constructing a total of 317 secondary Education and Skills Development schools across the country. Of these, 151 84. Madam Speaker, Government will have been completed and the balance of 166 continue to improve access to quality are scheduled for completion by 2025. Government is also constructing 480 early 15 childhood education centres, earmarked for the construction of the Polytechnic in completion by the end of 2025. Lufwanyama. 88. Madam Speaker, to improve the Health learning environment for our learners, Government has continued to procure desks 91. Madam Speaker, the health of our in public schools. So far, 812,598 desks people remains a key priority in our have been procured, out of which 712,562, development agenda. Government will, or 87 percent, were acquired using CDF. As therefore, continue providing quality and I indicated in my last Address, the target is affordable healthcare services by to procure locally one million desks under strengthening the health system, recruiting CDF. health personnel, providing drugs and medical supplies, as well as developing 89. Madam, to address the challenge of infrastructure, especially in rural areas. accommodation in public universities, Government is constructing 58 hostel 92. Madam, the New Dawn blocks across eight public universities with Administration has been recruiting health a total bed capacity of 9,280. To further personnel ever since it assumed office. improve the learning environment in our During the last three years, over 14,276 public universities, Government is frontline health workers have been constructing additional university recruited. This year, 4,000 more health infrastructure at Chalimbana, Mukuba, workers will be recruited. An additional Nkrumah, and Palabana universities. 2,000 frontline health personnel will be hired in 2025, bringing the total to 20,276. 90. Madam Speaker, Government has These recruitments have enabled prioritised the expansion of TEVET Government to achieve the goal of ensuring infrastructure, particularly in rural areas. that all health facilities have at least one This is to ensure that technical education is qualified health personnel to ensure quality accessible by our citizens. To this effect, the healthcare. Further, the increase in the construction of Mporokoso and Lundazi number of frontline health workers has Trades Training institutes and the student contributed to a reduction in maternal and hostels at Ukwimi and Chipata Trades child mortality as 82 percent of deliveries Training institutes have been completed. are conducted by skilled personnel due to These institutions have also been equipped the increased recruitments. with state-of-the-art training equipment. Further, the Mumbwa Polytechnic and 93. Madam Speaker, Government has student hostels at Evelyn Hone College will completed the construction of seven Level- be completed. Government, in partnership 1 Hospitals in Chililabombwe, Kitwe, with Kagem Mining has also commenced Mambwe, Mwansabombwe, Nchelenge, and Ndola districts. These state-of-the-art 16 hospitals are equipped with modern medical 97. Madam Speaker, Government has facilities. continued to procure medicines and medical supplies to ensure availability at all times. 94. Madam, Government has also Consequently, drug stock availability has completed constructing 279 health facilities increased to 85 percent at health centers and across the country, out of which, 164 were 76 percent at the hospital level, from 37 constructed using CDF. These facilities percent and 46 percent in 2021, include 115 mini-hospitals, 33 health respectively. This is above the 70 percent centres and 131 health posts. The threshold recommended by the World construction of the 800-bed space King Health Organization. To prevent theft of Salman Bin Abdulaziz Specialised Hospital medicines, Government is implementing for women and children is 70 percent digital inventory management systems to complete. The hospital is scheduled for track medicines from procurement to completion in 2025. dispensing. 95. Madam Speaker, to improve 98. Madam, to improve patient care maternal healthcare, Government has and enhance record management in public constructed 123 maternity annexes across health facilities, Government is already the country. Of these, 82 have been implementing an electronic health record constructed under CDF. An additional 30 system known as Smartcare Pro System annexes will be constructed in 2025 using with 1,400 health facilities across the CDF. country already covered. The Smartcare Pro System will be rolled out to an additional 96. Madam, the continued repatriation 1,600 facilities of out the 3,543 Health of patients abroad for specialised treatment facilities by 2026. is costly to the nation. To mitigate this, Government has been capacitating our local Water and Sanitation health facilities to perform specialised treatment. To this end, the National Heart 99. Madam Speaker, water is life! It is, Hospital has, this year, conducted 137 therefore, critical that we fully harness this surgeries, out of which 51 were open-heart resource. To this effect, Government has surgeries and 86 coronary angiograms. In since 2022 constructed 16 dams, addition, Government has commenced the rehabilitated 12, and maintained 770 across construction of the Ndola Cancer Treatment the country. These dams are expected to Centre and is also modernising the Cancer harvest at least 15.7 million cubic meters of Diseases Hospital in Lusaka. Construction water to benefit 2 million people for of the cancer treatment centre in domestic use, livestock, and irrigation. In Livingstone will commence before the end 2025, Government will construct 12 dams, of this year. rehabilitate 14 and maintain 385. 17 100. Madam, with regard to boreholes, places such as schools, health centers, Government has since 2022 constructed markets, and bus stations countrywide. In 2,277 boreholes, and rehabilitated 3,025. In 2025, the target is to construct an additional addition, 365 piped water schemes have 100 facilities across the country. been constructed across the country. These interventions are benefiting over 902,490 104. Madam, we are indeed building people. In 2025, the target is to construct resilience for inclusive growth and 947 boreholes and 500 piped water improved livelihoods. schemes, as well as rehabilitate 500 Social Protection boreholes. 105. Madam Speaker, the New Dawn 101. Madam Speaker, under the Food Administration is unwavering in its resolve Security and Drought Response Plan, a total to improve the living standards of the poor of 1,835 water points will be constructed and vulnerable members of our society. In countrywide in 2025. Of these, 1,500 will be this regard, Government will continue to piped water schemes for rural communities, implement social protection programmes 110 commercial boreholes to support water such as the Social Cash Transfer, Food utilities, 150 boreholes to support livestock, Security Pack and Keeping Girls in School. and 75 boreholes to support wildlife. These In addition, Government introduced the interventions will benefit over 3.5 million Cash for Work to support our people in the people and ensure sustenance of livestock current drought situation. The total number and wildlife. of beneficiaries under various social 102. Madam, further, I wish to report protection interventions, as at August-2024, that works on the Integrated Small Towns stood at 2,515,671 households. These Water Supply and Sanitation Project in interventions will have impact on 13.9 Luapula, Muchinga and Northern provinces million people in the communities have been completed and will benefit over especially those severely affected by the 900,000 people. Works in Western Province effects of drought. are at 78 percent and will be completed in 106. Madam, under the regular social 2025. cash transfer, the number of beneficiary 103. Madam Speaker, to mitigate households increased to 1.3 million at end- against waterborne diseases and improve August 2024 from 1.1 million in 2023. To sanitation, since 2022, a total of 706 further cushion beneficiary households waterborne sanitation facilities have been from the effects of the drought, the regular constructed while construction of an Social Cash Transfer beneficiary additional 155 facilities is ongoing and households are now receiving an additional scheduled for completion in 2025. The K200 per month for a period of 12 months facilities are being constructed in public starting June this year. 18 107. Madam Speaker, Government is livelihoods component will be scaled up to further providing the Drought Emergency all the 116 districts, covering 200,000 Social Cash Transfer of K400 per month to beneficiaries. 952,570 households that have become vulnerable as a result of crop failure and are 110. Madam, with regard to the pension not on the regular Social Cash Transfer system, Government’s goal is to be current Programme. I wish to emphasise that the with payments and reduce the waiting time Drought Emergency Social Cash Transfer is for pensioners under Public Service Pension only for a period of 12 months and will end Fund and Local Authorities Superannuation in June 2025. Fund. Government will, therefore, continue to dismantle pension arears. Further, 108. Madam, Government is Government through the National Pension implementing the Cash for Work Scheme Authority will continue programme in response to the drought implementing partial withdraw of pension experienced in the 2023/2024 farming benefits to help improve people’s livelihood season. The programme is being and empower individuals for their implemented in 123 constituencies in 87 immediate investment needs. districts targeting vulnerable households not covered by the Social Cash Transfer and C. ENVIRONMENTAL Emergency Social Cash Transfer SUSTAINABILITY programmes. Through the Cash for Work, 111. Madam Speaker, the devastating Government is not only improving the effects of climate change events have quality of lives of the people, but also demonstrated the importance of providing public services through the works environmental sustainability. In this regard, being undertaken which include clearing of Government, this year, launched the solid waste in drainages, cleaning of public National Green Growth Strategy aimed at places, garbage collection, and road creating green jobs, enhancing resilience to maintenance. shocks and creating business opportunities. 109. Madam Speaker, Government will 112. Madam, to build resilience against continue to keep girls in school and climate change events, Government will empower women under the Girls Education continue to expand, modernise and maintain and Women’s Empowerment and metrological equipment such as the Livelihoods Project. The keeping girls in automatic weather stations that have been school component will be expanded to installed in all the 116 districts. Further, to support 262,444 girls in response to increase access to weather-related increased demand following the information, climate data records have been implementation of the Free Education digitised. We have also scaled-up provision Policy. The women’s empowerment and of meteorological information for use in the 19 aviation, agriculture, water, and energy Domestic Resource Mobilisation sectors as well as in disaster risk management. 115. Madam Speaker, domestic resource mobilisation remains critical for D. GOOD GOVERNANCE the smooth implementation of Government ENVIRONMENT programmes. Government will, therefore, continue to implement policy and 113. Madam Speaker, Government is administrative interventions to broaden the committed to providing a conducive tax base and curb revenue leakages. In this environment through which political, social regard, Zambia Revenue Authority has and economic affairs can be conducted in a restructured its operating model to make it transparent and efficient manner. more efficient and effective in tax Government remains resolute to enforcing administration. This includes the use of the rule of law, upholding human rights and enhanced data analytics and compliance enhancing transparency and accountability risk management. To further strengthen tax in the management of public resources. To and non-tax administration, Government this end, Government will undertake will continue to automate processes, legislative, structural and policy reforms in including the integration of the Zambia a number of areas such as fiscal policy, Revenue Authority systems to the domestic resource mobilisation, debt Government Service Bus and other third management and decentralisation. parties. Fiscal Policy 116. Madam, in December 2023, Government rolled out the Smart Invoice 114. Madam, to ensure that Government System to optimise revenue collection and has resources to meet disasters given the seal leakages. So far, 19,262 taxpayers are frequency and intensity of climate change registered on the System out of which induced shocks, Government will establish 10,019 are VAT taxpayers. The remaining a stabilisation fund. To this end, revenues eligible VAT taxpayers are required to derived from mineral royalty in excess of register on the System by 30th September of the projection will be channeled to the this year as ZRA will not recognise any stabilisation fund. To further increase invoices issued outside the system. resources available to financing disasters, Government is working with the 117. Madam Speaker, as I indicated in Development Finance Institutions to access my last Budget Address, the Coordinated contingent financing immediately a natural Border Management has been implemented disaster occurs. at Kazungula and Chirundu One Stop Border Posts and will be rolled out to other border posts. This has limited the number of regulatory agencies at border posts to six 20 and improved processing efficiency. creditors. We have now reached agreement Further, I wish to report that the with France on the terms of the bilateral Governments of Zambia and Namibia agreement to implement the MoU and are entered into a bilateral agreement in April now in the process of going through the this year to establish a One-Stop-Border- necessary formalities required for Post at Katima Mulilo. execution. We expect this agreement to serve as a model for negotiations with our 118. Madam, Government in other official creditors. collaboration with Local Authorities will implement measures to enhance revenue 121. Madam Speaker, with regard to the collection, particularly property taxes. The status of debt restructuring negotiations collaboration will be strengthened by with other commercial creditors, I wish to integrating systems, building capacities, report that these are at different stages as reviewing and amending existing laws, and follows: reassigning responsibilities for the collection of revenues. (a) We have concluded negotiations with Paramount and Huawei Debt Management Technologies and have since executed the agreements; 119. Madam Speaker, I am pleased to inform you that Government has made (b) We recently reached Agreement in significant progress in restructuring our Principle with Industrial and external debt. In June this year, Government Commercial Bank of China, and successfully restructured its Eurobonds. China Development Bank. The The restructured bonds were issued on 12th Agreements in Principle have been June this year and are currently trading on subjected to the IMF to check for the international market. I also wish to compatibility with programme report that we have since commenced debt parameters and to the Official servicing on these bonds, with the first Creditor Committee for the payment having been made in June. Comparability of Treatment. I wish to inform this august House that 120. Madam, with regard to the debt these two Agreements, accounting owed to the official creditors, the House for a total of US $1.5 billion, have may recall that Government had reached a passed both tests. The next step is to debt restructuring agreement with its finalise the agreements for official creditors in June 2023, which was execution; followed by the signing of an MoU in October 2023. The MoU provides the (c) We have also reached Agreement in framework for bilateral agreements to be Principle with Nedbank and ZTE entered into with individual official Technologies and are making 21  progress in finalising the agreements without leaving anyone behind, for execution; and Government has continued to devolve functions to local authorities. Following the (d) For the remaining commercial devolution of eight functions to the local creditors, we are in active authorities this year, Government will, in engagement and are at different 2025, devolve four more functions. These stages of negotiation. are livestock and fisheries, agriculture, community development, and social 122. Madam Speaker, implementation welfare services. All these functions are of the debt restructuring exercise is having being devolved with matching resources. notable benefits for Zambia. It has created the much-needed fiscal space for 125. Madam, CDF is working! Since implementation of developmental 2022, a total of 9,992 community projects programmes to the benefit of the Zambian have been under implementation in sectors people as demonstrated in the 2025 Budget. such as health, education, water and To illustrate this, accumulated arrears on sanitation, and agriculture. We have external debt up to December 2023 were US witnessed the provision of running water to $5.34 billion, debt service due in 2024 communities. Desks have been provided in would have been US $2.15 billion and the schools so that children no longer have to sit assessed debt service in 2025 would have on the floor. Youths have been given been US $1.38 billion. If the debt was not opportunities to improve their livelihoods restructured, total debt service payable in through skills development bursary. In 2025 would have been US $8 billion, addition, over 57, 000 groups of micro and equivalent to K246.4 billion. As a small entrepreneurs across the country have responsible Government, we have managed been given an opportunity to grow their to restructure the debt. In this regard, we businesses through grants and loans. will only pay US $599 million, equivalent Through community projects, local to about K16.7 billion, in 2025. contractors and suppliers have been empowered to supply goods and services 123. Madam, I wish to reaffirm within their localities. Government’s commitment to reaching comparable debt agreements with all of our 126. Madam Speaker, to make the other external creditors and to remain in implementation of CDF more effective and arrears towards those with whom we have efficient, Government enacted the not yet reached agreement. Constituency Development Fund Act, 2024. The new Act has streamlined the approval Decentralisation processes and expanded the participation of 124. Madam Speaker, in ensuring that marginalised groups such as the women, services are taken closer to the people youths and persons living with disabilities. 22 Government is aligning the CDF Guidelines 129. Madam, to reinforce the role of the to the new Act to accelerate the uptake of Kwacha as legal tender in domestic the CDF. Further, Government is enhancing transactions in line with the provisions of the management and monitoring of the CDF the Bank of Zambia Act, 2022, currency implementation through a robust regulations will be issued once information, communication and consultations with stakeholders are technology system being developed with concluded. support from the Cooperating Partners. Financial Sector Policy State Owned Enterprise Management 127. Madam Speaker, Government has 130. Madam Speaker, I wish to inform developed a Supervisory and Performance this august House that the Financial Monitoring Framework for State-Owned Stability Committee was operationalised in Enterprises. The Framework provides April this year in line with the Bank of guidelines on financial reporting, Zambia Act, 2022 to enhance financial borrowing, capitalisation, board system surveillance. In 2025, the Bank of appointments, and dividend declaration, Zambia will establish a deposit protection among others. In addition, Government will fund to safeguard depositors in the event of revise the State-Owned Enterprise Policy to insolvency. strengthen the regulatory framework, Financial Inclusion reduce fiscal risks and costs by establishing fiscal discipline rules. 131. Madam Speaker, the National Monetary Policy Financial Inclusion Strategy II for the period 2024-2028 was launched in March 128. Madam Speaker, the Government this year. The Strategy reaffirms our will continue to implement policies aimed at commitment to address challenges such as achieving and maintaining price stability to low utilisation of financial services in rural promote robust growth and enhance the areas as well as limited financial inclusion living standards of our citizens. In this for women and micro, small and medium regard, monetary policy will best support enterprises. The target is to achieve 85 these efforts by guiding inflation back to the percent financial inclusion by 2028 from 6-8 percent target range and anchoring 69.4 percent recorded in 2020. Government inflation expectations over the medium- will undertake a FinScope Survey next year term. To this end, the forward-looking to ascertain progress made in the attainment monetary policy framework, centered on the of financial inclusion targets. Policy Rate, will remain the main indicator of the monetary policy stance. 132. Madam, to enhance financial inclusion, the Government is moving 23 towards a cashless economy riding on 2025, the Framework will be enhanced to digital financial platforms. In this regard, include services and imports. Government will repeal and replace the National Payment Systems Act, 2007 to Risk Management align with the current payment systems 135. Madam Speaker, the impact of the landscape which has undergone significant drought we are experiencing underscores transformation. Further, the Bank of the importance of risk management in Zambia will extend the operating hours for building resilience and capacity against the RTGS with a 6-month pilot set to future threats such as climate change and commence on 1st October 2024. On pandemics. Government has, therefore, weekdays, the RTGS will operate from enhanced integration of risk management in 07:00 hours to 19:30 hours and on Saturdays all public programmes to minimise from 10:00 hours to 14:30 hours. This move disruptions to our lives. is aimed at supporting a 24-hour digital economy. 136. Madam, to actualise our commitment of enhancing fiscal External Sector Policy transparency and budget credibility, 133. Madam Speaker, Government will Government has developed a Fiscal Risk continue to maintain a flexible exchange Statement to address factors that may affect rate regime. In this regard, we will continue the performance of the National Budget. To to accumulate reserves, including the operationalise this Statement, a Fiscal Risk domestic purchase of gold, and provide Management Framework will be developed necessary market support to avoid excess by the end of this year to outline the roles volatility in the exchange rate. To enhance and responsibilities of ministries, provinces foreign exchange earnings, Government and agencies in the fiscal risk management will foster diversification of exports, sustain cycle. foreign investment flows and facilitate Monitoring and Evaluation private sector entry into new markets. 137. Madam Speaker, Government will 134. Madam, to enhance the quality of continue to strengthen monitoring and balance of payments statistics, the Export evaluation systems at all governance levels Proceeds Tracking Framework was to facilitate and enhance the tracking of launched in January this year. The annual budget outputs. Particularly, Framework requires all exporters to route Government has rolled out an electronic export earnings through a bank account Management Monitoring System to support domiciled in Zambia. Since the introduction evidence-based decision-making and real of the Framework, there has been an time planning, monitoring, evaluation and improvement in data capture and a reporting. significant reduction in net outflows. In 24  Part III borrowing. Domestic borrowing will be K15.4 billion or 7.1 percent while K19.4 THE 2025 BUDGET billion or 8.9 percent will come from 138. Madam Speaker, in 2025, external sources. As a share of GDP, Government proposes to spend K217.1 domestic borrowing is projected at 1.9 billion or 26.6 percent of GDP. Out of this percent while external borrowing is 2.4 amount, K174.2 billion or 80.2 percent of percent. Details of the borrowing are in the the Budget will be financed by domestic Annual Borrowing Plan. revenues while K8.2 billion or 3.8 percent 139. Madam, I will now highlight some will be grants from our Cooperating of the expenditure proposals in the 2025 Partners. The balance of K34.7 billion or Budget. As usual, the full details are 16.0 percent will be financed through contained in the Yellow Book. 25  2025 EXPENDITURE BY FUNCTIONS OF GOVERNMENT 2025 BUDGET ALLOCATIONS BY FUNCTIONS OF GOVERNMENT 2025 BUDGET SHARE OF FUNCTION (ZMW) BUDGET General Public Services 73,815,232,616 34.0% O/w Domestic Debt 37,334,576,117 External Debt (Interest and Principal) 16,664,307,558 Dismantling of Arrears 5,674,875,908 Mobile Voter Registration & Elections 317,246,458 Local Government Equalization Fund 1,449,071,480 Compensation Fund 772,926,700 Defence 10,321,443,219 4.7% Public Order and Safety 8,406,134,559 3.9% O/w Integrated National Registration Information System (INRIS) 217,800,000 Economic Affairs 48,713,513,734 22.4% O/w Agriculture, Fisheries & Livestock Interventions 15,404,760,005 O/w Farmer Input Support 9,270,982,106 Strategic Food Reserve 2,366,000,000 Road Infrastructure 11,984,360,459 O/w Rural Roads 271,171,220 Constituency Development Fund 5,625,071,493 O/w Feeder Roads Maintenance (Fuel) 511,370,136 Tourism Sub-Sector 1,289,935,340 Provincial Aerodromes Infrastructure 700,721,345 Credit Guarantee Scheme 851,699,959 Aerial Geological & Geophysical Mapping 364,000,000 Environmental Protection 1,480,370,709 0.7% Housing and Community Amenities 2,988,713,846 1.4% O/w Water Supply & Sanitation Infrastructure 2,311,809,831 Health 23,167,325,387 10.7% O/w Drugs and Medical Supplies 4,951,092,793 Medical Equipment 718,205,518 Health Infrastructure 1,918,899,375 Recreation, Culture and Religion 558,704,668 0.3% Education 31,493,302,845 14.5% O/w School Grants 2,252,489,105 School & University Infrastructure 2,581,243,469 Social Protection 16,160,637,078 7.4% O/w Social Cash Transfer 8,270,004,255 Public Service Pension Fund 4,172,921,174 Cash for Work Programme 2,000,000,000 Food Security Pack 1,206,855,784 Local Authorities Superannuation Fund 400,000,000 TOTAL 217,105,378,661 100.0% Note: The Table only highlights some of the notable expenditure items under each of the function categories. 26 General Public Services financing. The allocation will also support implementation of the Sustainable 140. Madam Speaker, under the General Agriculture Financing Facility programme. Public Services function, I propose to spend People wishing to benefit under this K73.8 billion or 34.0 percent of the Budget. scheme, whether farmers or otherwise, can Of this amount, K37.3 billion is for approach any of the participating banks for domestic debt servicing, K16.7 billion for a loan. The bank will undertake the usual external debt payment, and K317.2 million assessment and if satisfied will provide a for continuous voter registration. Further, I loan, which will be partially guaranteed by propose to spend K5.7 billion on Government. outstanding Government bills to increase liquidity in the economy. 144. Madam, earlier this afternoon, I said the Government has embarked upon Economic Affairs aerial survey for minerals under Aerial Geological and Geophysical Mapping. I 141. Madam Speaker, I propose to have increased the allocation for this spend K48.7 billion or 22.4 percent of the exercise to K364.0 million from K160.0 Budget on the Economic Affairs function to million in 2024. The mapping exercise will stimulate economic activity and improve help define the nation’s mineral resource livelihoods. Of this amount, K12.0 billion is endowment and attract investment. for construction, upgrade and rehabilitation of roads. 145. Madam Speaker, the enhanced CDF has proved to be a game changer. It is 142. Madam, I have allocated K15.4 improving infrastructure, providing billion to support interventions in the employment and income opportunities for agriculture, fisheries and livestock sub- many of our citizens especially in rural sectors. Of this amount, K9.3 billion is for areas. I, therefore, propose to increase the the Farmer Input Support Programme to allocation for CDF to K5.6 billion in 2025 benefit over 1 million farmers. To ensure from K4.8 billion in 2024. This will increase food security, I propose to increase the the allocation to each constituency to K36.1 allocation for strategic food reserves to K2.4 million from K30.6 million in 2024. Earlier billion from K1.7 billion in 2024. in my Address, I did indicate that I had some 143. Madam Speaker, I have increased good news regarding feeder roads. The good the allocation to the Zambia Credit news is that CDF has increased by K5.5 Guarantee Scheme to K851.7 million in million per constituency. Of this increased 2025 from K386.0 million in 2024. This amount, K3.3 million is earmarked for increase will enable more of our small and treating feeder roads. This is in view of medium enterprises to access affordable Government’s realisation that while constituencies have bought road making 27 equipment, they are struggling to raise funds 149. Madam, I have allocated K2.6 to buy fuel. It is imperative, therefore, that billion to education infrastructure of which these funds are specifically reserved for this K1.6 billion is for construction of 120 purpose. Constituencies who have not yet secondary schools while K300.5 million is bought their equipment are encouraged to for completion of the stalled hostel projects collaborate with neighbouring at the Copperbelt University, the University constituencies who have the machinery. of Zambia, and other public universities. 146. Madam, a stern warning is 150. Madam Speaker, to improve the appropriate at this stage to officials involved teacher-pupil ratio, Government has in the administration of CDF, especially allocated K80.3 million for the recruitment those managing councils. In spite of the of 2,000 teachers. Further, I propose to efforts already made to eliminate red tape increase the allocation to the School and other legal sources of delays, the Feeding Programme to K534.4 million in implementation of CDF projects remains 2025 to keep learners in school and improve painfully slow. In addition, audit reports learning outcomes. have in many cases cited abuse of CDF funds. The vices are totally unacceptable 151. Madam, I propose to spend K150.0 and, therefore, it will not take long before million on the implementation of the new Government takes strong measures against national education curriculum, which will erring officers to bring things in line. promote life-long learning, entrepreneurship, and practical skills 147. Madam, I propose to spend K700.7 required by industry. million on construction, upgrade and rehabilitation of provincial aerodromes. Health This will improve airport infrastructure and 152. Madam Speaker, to support health boost the tourism sector. I have further service delivery, I propose to spend K23.2 allocated K1.3 billion for the development billion or 10.7 percent of the Budget. Of this of tourism infrastructure, wildlife amount, K5.0 billion is for the procurement conservation and tourism marketing. of medicines and medical supplies while Education K718.2 million is for the procurement of medical equipment. I have further allocated 148. Madam Speaker, I propose to K1.9 billion for various health spend K31.5 billion or 14.5 percent of the infrastructure. Budget on the Education function. Of this amount, K2.3 billion is for grants to early 153. Madam, to improve quality of childhood education, primary and healthcare, I propose to allocate K156.9 secondary schools to continue provi