06 Feb 2018

Despite recent signs of recovery in both the global and domestic economies, growth in government’s revenues continued to be slow compared to the pressure on expenditure arising from unlimited societal needs. This was said by the Minister of Finance and Economic Development, Mr Kenneth Matambo when delivering the 2018/19 budget speech yesterday.

Mr Matambo said the scenario called for continued judicious management of public resources in order to maintain fiscal sustainability as one of the objectives to achieve the goal of macro-economic stability.

He said to achieve fiscal sustainability in the medium to long-term, government was committed to continue implementing measures aimed at improving its revenues and expenditure management.

He said on the revenue side, efforts were underway to increase efficiency of collection from existing sources as well as expanding the revenue base by identifying additional potential alternative sources. Mr Matambo said with respect to expenditure management, government was committed to prudent management of its expenditure to ensure value-for-money from the limited financial resources.

He noted that in the context of budget preparation and management, more emphasis would continue to be placed on expenditure targeting, prioritising spending, aligning annual budgetary allocation to existing implementation capacity of executing ministries and assessing the readiness of projects for implementation as part of the budgeting to avoid over provision under the development budget.

 The measures, he said, were aimed at ensuring that government achieved the fiscal rules as stated in NDP11.

He said one of the main components of the fiscal rule was that annual government expenditure as a percentage of the Gross Domestic Product (GDP) be restricted to 30 per cent while the other was that total public debt as a percentage of GDP be restricted  to 40 per cent. “While in the proposed budget for 2018/19, the government’s expenditure ration to GDP is slightly above the target (34 per cent), the debt to GDP ratio is well below the target at 15.1 per cent,” he said, explaining that it demonstrated government’s continued commitment to maintaining fiscal sustainability in the medium term. BOPA