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ARTICLE · 12 OCTOBER 2023

2024 Budget Bulletin

SNG Grant Thornton
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This comprehensive guide provides valuable information on the country's financial plans and outlines the government's priorities for the upcoming year.

ZambiaGovernment, Public Sector
SNG Grant Thornton
SNG Grant Thornton

2024 BUDGET COMMENTARY

The 2024 National Budget was presented by the Honourable Minister of Finance and National Planning to the National Assembly on 29 September 2023.

The theme of the 2024 budget is "Unlocking Economic Potential".

The country is projected to achieve a positive 2.7% of Gross Domestic Product (GDP) growth in 2023, compared to 5.2% in 2022.

The slowdown in growth is mainly attributed to:

  • Challenges arising from the Russia- Ukraine war;
  • Delayed conclusion of the negotiations with the country's creditors; and
  • Weak performance that was recorded in the mining sector.

Projected GDP Growth in 2024

The strategy to achieve the growth objectives will be founded on four thematic areas as outlined in the Presidential Address delivered on the Official Opening of the Third Session of the Thirteenth National Assembly. The Address provided the policy direction as laid out in the Eighth National Development Plan and the 2024 budget. The four thematic areas are:

  • Economic transformation and job creation;
  • Human and Social development;
  • Environmental sustainability; and
  • Good governance environment.

In order to achieve the budget objectives and targets for 2024, Government has proposed to spend K177.9 billion (2023:K167.3 billion).

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In order to achieve the budget objectives and targets for 2024, the Government has proposed to spend K177.9 billion (2023:K167.3 billion) .

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The allocation of the budgeted expenditure in percentage terms is as follows:

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Overall Comments Challenges
  • Social Sector spending in health, education and social security has seen an increase in proposed spending.
  • The New Dawn Administration has produced a budget that aims to continue to empower people at the constituency level by increasing the Constituency Development Fund (CDF) from K28.3 million in 2023 to K30.6 million per constituency in 2024.
  • Furthermore, people at the local level will continue to make decisions on how to spend the CDF based on guidelines to be improved upon and the CDF Act that will be revised.
  • The need for efficient and effective procurement of goods and services so as to achieve the right price, right quality and delivery on time has been emphasised.
  • Completion of the restructuring of the external debt remains an urgent objective so as to deal with the principal and interest arrears as well as have an agreed way forward with the lenders.
  • Job creation for the youth continues to be a priority with the intended recruitment of 5,400 teachers and 4,000 health workers.
  • Furthermore, measures have been suggested to create a conducive environment for both local and foreign investors to invest in Multi Facility Economic Zones (MFEZ) and Industrial Parks as well as partnering with government in various capital projects through Public Private Partnerships (PPPs).
  • Mining is to receive particular attention through revised tax framework so as to increase production from 800,000 tonnes currently to 3,000,000 tonnes in 8 years.
  • The implementation of the Budget is dependent on Government continuing to meet its revenue targets.
  • The Budget faces the following risks:
    • Increased infrastructure development costs arising from suspended works and related consequential contract penalties, interest and potential legal costs;
    • Any slowness in mindset change by the implementors of projects at the local level under CDF;
    • Continuation of the Russia/Ukraine conflict and the consequential impact on oil and gas prices, higher interest rates and food prices;
    • Any low uptake by investors who are expected to partner with Government in the Public Private Partnership (PPP) as a model of infrastructure development;
    • Weaker copper revenues on account of lower ore grades and delayed investments in the sector; as well as weakening of copper prices;
    • Exchange rate fluctuations on account of high demand for importation of commodities and foreign debt service;
    • Climate change effects that pose a risk in terms of both food security and hydropower generation;
    • Inflationary pressures due to exchange rate passthrough effects and climate induced events such as food shortages; and
    • Subdued global growth due to contraction of China's economy, a main market for Zambia's copper exports.

Presidential Comment on opening of Parliament

During the official opening of the Third Session of the Thirteenth National Assembly, His Excellency Mr Hakainde Hichilema, the Seventh President of the Republic of Zambia, outlined the policy direction that the New Dawn Government will take.

The theme of his address was "Building On The Socio-Economic Gains for Improved Livelihoods And A Better Zambia".

The President emphasised the need to:-

  • Unite and build upon individual and collective achievements.
  • Improve production, productivity, value addition, investment and trade.
  • Continue implementing the policy of positive discrimination in the procurement process by buying from local manufacturers and other value adding businesses.
  • Support science and technology innovations.
  • Build on gains made in education, health, water and sanitation sectors.
  • Address vulnerability and inequality among people.
  • Achieve economic growth that is environmentally sustainable.
  • Take services and decision making closer to the people following the national decentralisation policy.

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