PMRC National Budget Analysis 2024

2024 NATIONAL
BUDGET ANALYSIS
THEME: UNLOCKING ECONOMIC POTENTIAL
ANALYSIS October 2023

PREPARED BY:
RESEARCH:
Leya Namonje Tembo (Acting Head of Research and Analysis), Alice Pearce (Senior Researcher), Kaputo Chiwele
(Researcher), Chisengele Chibuta (Researcher), Ikabongo Mwiya (Research Associate), Mabvuto Lungu (Research
Assistant), Dorothy Zunduma (Research Assistant), and with support of the Executive Director Sydney Mwamba.
TECHNICAL REVIEW:
Sydney Mwamba (Executive Director) and Leya Tembo (Acting Head of Research and Analysis)
EDITORIAL TEAM:
Chiti Jacob Nkunde (Communication Specialist) Layout and Design
Melody M. Simukali (Head Communications and Grants) Editorial
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NATIONAL BUDGET
ANALYSIS 2024
THEME: UNLOCKING ECONOMIC POTENTIAL
TABLE OF CONTENTS
List of Figures i
List of Tables i
Abbreviations ii
Introduction 1
Macroeconomic Environment 2
Macroeconomic Overview for 2023 3
Global Economic Developments 3
Domestic Economic Developments 4
2024 Macro-Economic Objectives 5
2024 Expenditure Estimates by Function 9
Economic Transformation and Job Creation 16
Agriculture, Livestock and Fisheries 17
Mining 21
Tourism 22
Manufacturing 23
Energy 24
Information Communication Technology 25
Transport and Logistics 26
Human and Social Development 29
Social Protection 30
Education and Skills Development 32
Health 35
Water and Sanitation 37
Environmental Sustainability 40
Good Governance Environment 44
List of Figures
Figure 1: Projected Global Growth Rates (2022, 2023 and 2024) 3
Figure 2: Global Commodity Prices (USD) 3
Figure 3: Trends in Inflation from 2021 to 2023 4
Figure 4: Average Exchange Rate from 2021 to 2023 5
Figure 5: Resource Envelope 2024 Budget 8
Figure 6: 2024 Budget as Share of GDP 9
Figure 7: Trend Analysis of Expenditure by Functions (2022, 2023 and 2024) 10
Figure 8: Trend analysis of the Budget Allocation Against International Protocols 11
Figure 9: Trend Analysis of 2022-2024 Revenue Estimates 12
Figure 10: Comparison Analysis of 2024 and 2023 Agriculture, Livestock and Fisheries 18
Budget Allocation.
Figure 11: Proposed Road Infrastructure Expenditure (ZMW) 27
Figure 12: Social Protection Budgetary Allocation Trends 30
Figure 13: Education Budgetary Allocation Trends 33
Figure 14: Health Budgetary Allocation Trends 35
Figure 15: Water and Sanitation Budgetary Allocation Trends 38
Figure 16: Environmental Protection Budgetary Allocation Trends 41
List of Tables
Table 1: Statistics of the Macroeconomic Variables from 2021 to 2023 4
Table 2: Analysis of the Macroeconomic Indicators for the years 2022, 2023 and 2024 6
Table 3: Resource Envelope 2024 Budget 8
Table 4: National Budget Expressed as a Share of GDP 2022, 2023 and 2024 9
Table 5: Expenditure by Function 2022, 2023 and 2024 9
Table 6: Budgetary Allocation against Best Practice 11
Table 7: Tax Regime 12
Table 8: Mobile Money Transaction Cost 13
Table 9: Proposed Road Infrastructure Expenditure (ZMW) 27
i | PMRC National Budget Analysis 2024

ABBREVIATIONS
8NDP Eighth National Development Plan
AfDB African Development Bank
BO Beneficial Ownership
CATSP Comprehensive Agriculture Transformation Programme
CDF Constituency Development Fund
CTPD Centre for Trade and Policy Development
CPI Consumer Price Index
CRVS Civil Registration and Vital Statistics
DIS Direct Input Support
DNA Deoxyribonucleic acid
EIA Environmental Impact Assessment
FRA Food Reserve Agency
GBV Gender-Based Violence
GRA Government of the Republic of Zambia
GEWEL Girls’ Education and Women’s Empowerment and Livelihoods
GDA Government Diagnostic Assessment
GDP Gross Domestic Product
ICT Information and Communication Technology
IFF Illicit Financial Flow
IMF International Monetary Fund
INRIS Integrated National Registration Information System
JCTR Jesuit Centre for Theological Reflection
MFEZ Multi-Facility Economic Zone
MTBP Medium Term Budget Plan
MoU Memoranda of Understanding
NRC National Registration Card
PAYE Pay As You Earn
PEP Politically Exposed Persons
PMRC Policy Monitoring and Research Centre
PPP Public Private Partnership
SCT Social Cash Transfer
SOE State-owned Enterprise
TEVET Technical Education, Vocational and Entrepreneurship Training
UHC Universal Health Coverage
VAT Value Added Tax
WDC Ward Development Committee
ZICA Zambia Institute of Chartered Accountants
ZICTA Zambia Information and Communication Technology Authority
ZRA Zambia Revenue Authority
PMRC National Budget Analysis 2024 | ii

INTRODUCTION
The Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, unveiled
the K177.89 billion 2024 National Budget on 29th September, 2023 under the theme
“Unlocking Economic Potential.” The delivery of the 2024 budget took place in a
context marked by concerns and elevated anticipations, stemming from the Country’s
successful restructuring of a $6.3 billion debt with its official creditors in June 2023.
Additionally, this budget holds significance as it is the second one following the
attainment of an IMF Extended Credit Facility, which was officially announced in
September 2022.
The 2024 National Budget seeks to promote economic growth through enhanced
private sector investment, increased production and productivity, and improved public
service delivery. Government is therefore committed to providing policy framework,
resources and incentives to unlock the country’s economic potential. Therefore, this
analysis seeks to assess the recommendations made in the budget against critical
economic and social sectors and their responsiveness towards the aspirations of the
Eighth National Development Plan (8NDP) as well as in meeting global development
statutes to which Zambia is a member.
1 | PMRC National Budget Analysis 2024

MACROECONOMIC
ENVIRONMENT
PMRC National Budget Analysis 2024 | 2

MACROECONOMIC OVERVIEW FOR 2023
Global Economic Developments
 At the global level, economic growth was expected to slow down to 3.0 % in 2023 from 3.5
% recorded in 2022.
 Sustained tightening of monetary policy in advanced economies, adverse effects of climate
change, and the impact of the prolonged Russia-Ukraine war were largely responsible for
the subdued economic growth.
Figure 1: Projected global growth rates (2022, 2023 and 2024)

3.60%
3.50% 3.50%
Global Economic Growth
3.40%
3.30%
3.20%
3.10%
3.00% 3.00% 3.00%
2.90%
2.80%
2.70%
Year 2022 Year 2023 Year 2024
Source: PMRC adapted from IMF and 2024 budget speech
 According to the International Monetary Fund (2023), the global growth rate is projected to
reduce from an estimated 3.5 % in 2022 to 3.0 % in both 2023 and 2024 as shown in the graph
above. This is due to global economic activity experiencing a broad-based and sharper
than expected slowdown, with inflation higher than seen in several decades, cost-of-
living crisis, tightening financial conditions in most regions and Russia’s invasion of
Ukraine.
 The consequence of the weak global economy was that during the first nine months of 2023,
commodity prices trended downwards.
 Copper prices declined to an average of US $8,589 per metric tonne from US $9,084 during the
same period in 2022.
 Crude oil prices also reduced to an average of US $82.8 per barrel from US $104.6.
Figure 2: Global commodity prices (USD)
155.83
Fertilizer 235.74 2023 2022 2021
Price Index
151.59
82.8
Crude Oil 104.6
Prices
69
8,589
Copper 9,084
Prices
9,550
Source: PMRC adapted from IMF, World Bank (Fertilizer Price Index) and Budget speeches

Domestic Economic Developments
 The economy was projected to grow by 2.7 % in 2023 compared to 5.2 % in 2022.
 The slowdown was mainly attributed to reduced production in the mining sector on account of
operational challenges and flooding in some of the major mines.
 Notwithstanding the slowdown in growth in 2023, prospects in the medium-term are positive
with the resolution of challenges in the mining sector. Because of this, an acceleration in
LEGEND
growth is anticipated both in 2024 and throughout the medium term.
Table 1: Statistics of macroeconomic variables from 2021 to 2023
Domestic Growth Fiscal Deficit

Year International Reserves (USD)
Rate (%) (% of GDP)
2021 4.60 8.10 2.8 Billion (above 3 months of import cover)
Source: African Development Bank (AfDB) and Budget speeches
 Inflation edged upwards to 12.0 % in September 2023 from 9.9 % in December 2022. This
was largely driven by increases in prices of maize grain and meat products as well as the
depreciation of the Kwacha against the United States dollar.
 In response to the rise in inflation, the Bank of Zambia raised the policy rate by 100 basis points
to 10.0 % in August.
Figure 3: Trends in inflation from 2021 to 2023
24.6 24.6
24.0 2021 2022 2023
23.2
22.8
22.7
22.5
22.1
21.5
21.1
19.3
INFLATION (%)
16.4
15.1
14.9
13.1
12.0
10.5 10.8
10.2 10.3
9.9 9.9 9.9
9.8 9.8 9.8
10.2 9.9 9.7
9.6 9.9
9.4 9.7
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
MONTHS
Source: PMRC adapted from Zambia Statistics Agency
 The Kwacha depreciated by 10.9 % against the US dollar to K20.05 per US dollar between
January and August 2023. The depreciation of the Kwacha was mainly on account of
strong demand while inflows, especially from the mining sector, reduced.

Figure 4: Average exchange rate from 2021 to 2023
25
22.58
22.43
22.21
21.99
21.62
21.59
21.3
20.63
Average Exchange Rate (US$/ZMW)
19.46
19.41
20
18.72
18.58
18.66
18.45
18.52
18.07
17.93
18.1
17.39
17.54
17.48
17.26
17.09
17.04
17.01
16.78
16.55
16.42
16.37
16.08
15.92
15.62
15
10
0
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
MONTHS
Source: PMRC adapted from Bank of Zambia
 To address volatility in the exchange rate as well as safeguard the stability of the foreign
exchange market, the statutory reserve ratio was increased by 250 basis points to 11.5 %
in February 2023.
2024 MACROECONOMIC OBJECTIVES

To take the country to a higher growth position through strategies set out in the
Eighth National Development Plan (8NDP), the Government will pursue the following
macroeconomic objectives in 2024:
1. Attain a real GDP growth rate of at least 4.8 %;
2. Reduce inflation to the 6-8 % medium-term target band;
3. Maintain international reserves above 3.0 months of import cover;
4. Increase domestic revenue to at least 22.0 % of GDP;
5. Reduce the fiscal deficit to 4.8 % of GDP; and
6. Limit domestic borrowing to no more than 2.5 % of GDP.

Table 2: Analysis of the macroeconomic indicators for the years 2022, 2023, 2024
Macroeconomic 2022 2023 2024

Indicators
8NDP MTBP BUDGET 8NDP MTBP BUDGET 8NDP MTBP BUDGET
Real GDP Growth Rate 3.5 3.1 3.5 3.7 3.7 5.2 4.4 4.8 2.7
(%)
CPI Inflation (annual < 10 13.4 6-8 6–8 10.3 6–8 6–8 8.2 12
average %)
Domestic Revenue (% 21.2 21.2 21 21.8 21.2 20.9 22.3 21 22.0
of GDP)
Overall Fiscal Deficit 6.7 6.7 9.2 6.3 6.3 7.7 5.2 5 5.8
(% of GDP)
Source: Eighth National Development Plan (8NDP), Medium Term Budget Plan (MTBP) and Budget Speeches
The 2024 National Budget projected a decrease in the real GDP growth rate from an actual
domestic growth rate of 5.2% in 2022 to 2.7% in 2023 as shown by the 2023 and 2024
budgets. Computed by the Consumer Price Index (CPI), the inflation is targeted to reduce
from the 12% reported in September 2023 to within the target band of 6 – 8% in 2024. The
Government is targeting to mobilise domestic revenue to at least 22.0% of GDP in 2024
from the projected 20.9% of GDP in 2023. The fiscal deficit was projected to reduce to 5.8%
of GDP in 2023 from the projected 7.7% in 2022.
2023 BUDGET PERFORMANCE

 The budget performance in 2023 was favourable and broadly in line with the projection. Total
expenditure for the year was projected at K157.5 billion, 5.8 % below the K167.3 billion.
 Notable expenses included social cash transfer, dismantling of arrears, infrastructure
development, and the Constituency Development Fund.
 Revenues and grants were projected at K119.1 billion, 5 % above the target of K113.3 billion.
Revenue collections were projected to be above target while borrowing at K31.1 billion and
lower than the target of K40.9 billion.
 Arising from the expenditure, revenue and financing outturn, the fiscal deficit was projected
at 5.8 % of GDP and below the target of 7.7 %. The lower budget deficit outturn was reflective of
the Government’s commitment to fiscal discipline.
Debt Position
 The central Government external debt stock, excluding publicly guaranteed external debt,
as at end-June 2023 increased marginally by 0.8 % to US $14.07 billion from US $13.96
billion at end-December 2022. The increase was largely on account of disbursements by
multilateral creditors.
 Total publicly guaranteed external debt, however, declined by 1.9 % to US $1.43 billion at
end-June 2023 from US $1.45 billion at end-December 2022.

 The stock of Treasury bills and Government bonds stood at K213.9 billion as at end-June
2023 from K210.0 billion as at end-December 2022, representing an increase of 1.9 %.
 The stock of domestic arrears marginally increased by 0.2 % to K77.8 billion as at end-June
2023 from K77.6 billion as at end-December 2022.
Financial Sector Performance

 Growth in lending by the banking sector slowed down to 6.4 % in the first seven months of 2023
compared to a growth of 11.9 % recorded in the corresponding period in 2022. The slowdown
was due to reduced borrowing by the Government.
 Growth in lending to the private sector remained steady at 15.0 %.
 The capital position was adequate and earnings performance was strong. Asset quality was
satisfactory, reflected in a lower non-performing loans ratio of 4.4 % at end-August 2023,
below the 10.0 % prudential benchmark.
 The capital position earnings performance, liquidity management and sensitivity to market
risk remained satisfactory.
 Asset quality was rated fair with the ratio of non-performing loans improving to 12.1 % at end-
June 2023 from 13.0 % at end-June 2022, but remained above the prudential limit of 10.0 %.
 In the first half of the year, the value of mobile payments grew by 38.0 % to K199.5 billion
while the volume of transactions grew by 7.1 % to 976.4 million because of emerging financial
technologies and digitalization resulting in ease of accessing financial services.
 To mitigate the threat of cyberattacks from increased usage of digital financial services
and preserve the integrity of the financial sector, the Bank of Zambia issued the Cyber and
Information Risk Management Guidelines to the financial service and payment systems
providers in May this year.
External Sector Performance

 In the first half of 2023, the merchandise trade surplus narrowed to US $200 million from
US $1.7 billion during the same period in 2022. This outturn was due to higher imports while
exports declined. Imports rose by 23.0 % to US $5.2 billion driven by capital and consumer
goods.
 In contrast, export earnings declined by 11.6 % to US $5.3 billion. This was largely due to
reduced copper export earnings on account of lower export volumes and prices.
 As at end-August 2023, gross international reserves amounted to US$2.9 billion, representing
3.2 months of import cover.

Resource Envelope for the 2024 Budget in Comparison with 2023 and 2022
Budgets
Table 3: Resource envelope 2024 Budget
Source 2024 Budget 2023 Budget 2022 Budget

Amount Share of Amount Share of Amount Share of
(‘K’ Billion) Budget (%) (‘K’ Billion) Budget (%) (‘K’ Billion) Budget (%)
Domestic
141.11 79 111.64 66.7 98.86 57
Revenue
Domestic
16.33 9.3 15.58 9.3 24.46 14
Financing
Foreign
17.01 9.7 38.4 23 47.85 28.22
Financing
Grants 3.44 2 1.71 1 1.82 0.78
Total
177.89 100 167.33 100 172.99 100
Budget
Source: 2022, 2023 and 2024 National Budget Speeches
Domestic revenue, as one of the components of the resource envelope, increased from
year to year for the period 2022 to 2024, indicating the Government’s desire to maximise
domestic resource mobilisation. On the contrary, foreign financing has trended
downwards from K47.85 billion in 2022 to K38.4 billion in 2023 and further to K17.01 billion
in 2024. This could as well be attributed to Government’s reluctance to overdependence
on financing through borrowing and mobilising more domestic resources.
Figure 5: Resource envelope 2024 Budget
Grants
Domestic Financing
9.3% 2%
Foreign
Financing
9.7%
%
Domestic
Revenue
PERCENTAGE
79%
OF BUDGET

Table 4: National Budget expressed as a share of GDP 2022, 2023 and 2024
2024 Budget as 2023 Budget as Share 2022 Budget as

Source
share of GDP (%) of GDP (%) share of GDP (%)
Domestic Revenue 22 20.9 21.2
Domestic Financing 2.5 2.9 5.2
Foreign Financing 2.7 7.3 10.41
Grants 0.6 0.3 0.29
Total 27.8 31.4 37.1

Source: National Budget Speeches
The table above indicates that the budget expressed as a share of GDP, has been
decreasing from 37.1% in 2022 to 31.4% and 27.8% in 2023 and 2024 respectively. This
could be attributed to other macroeconomic variables that affect GDP having a large
share of GDP due to the performance and size of an economy.
Figure 6: 2024 Budget as share of GDP
Grants 0.6%
Foreign Financing 2.7%

Source
Domestic Financing 2.5%
Domestic Revenue 22%
0% 5% 10% 15% 20% 25%

Budget percentage share of GDP
Source: National Budget Speeches
2024 EXPENDITURES ESTIMATES BY FUNCTION

Table 5: Expenditure by Function 2022, 2023 and 2024
Functions 2024 Budget 2023 Budget 2022 Budget
Amount (K) % of Budget Amount (K) % of Budget Amount (K) % of Budget
General Public
58.93 Billion 33.1 66.17 Billion 39.5 86.4 Billion 49.9
Services
Defence 9.92 Billion 5.6 8.15 Billion 4.9 7.6 Billion 4.4
Public Order and

6.76 Billion 3.8 5.19 Billion 3.1 3.5 Billion 2
Safety

Economic Affairs 39.76 Billion 22.3 35.01 Billion 20.9 33.7 Billion 19.5
Environmental
1.45 Billion 0.8 1.06 Billion 0.6 971.9 Million 0.6
Protection
Housing and
Community 2.65 Billion 1.5 2.58 Billion 1.5 2.4 Billion 1.4
Amenities
Health 20.91 Billion 11.8 17.40 Billion 10.4 13.9 Billion 8
Recreation, Culture
493 Million 0.3 444 Million 0.3 156.4 Million 0.1
and Religion
Education 27.35 Billion 15.4 23.19 Billion 13.9 18.1 Billion 10.4
Social Protection 9.67 Billion 5.4 8.13 Billion 4.9 6.3 Billion 3.6
Total 177.89 Billion 100.00 167.32 Billion 100.00 172.9 Billion 100.00
Source: 2022, 2023 and 2024 Annual National Budget Speeches
The budget reduced by approximately K5.58 billion from K 172.9 billion in 2022 to K167.32
billion in 2023. On a more positive note, the 2024 budget increased by approximately
K10.57 billion from K167.32 billion to K177.89 billion. Equally, more funds have been
allocated to other functions of Government except for general public services which
declined from K66.17 billion in 2023 to K58.93 billion in 2024. (Table 5)
Figure 7: Trend Analysis of Expenditure by Functions (2022, 2023 and 2024)
K58.93 Billion (33.1%)

GENERAL
PUBLIC
SERVICES
K66.2 Billion (39.5%)
K86.4 Billion (49.9%)
TOTAL BUDGET
K39.76 Billion (22.3%) K 177.89 BILLION
ECONOMIC K35.0 Billion (20.9%)
AFFAIRS K33.7 Billion (19.5%)
PUBLIC K6.76 Billion (3.8%)
K27.35 Billion (15.4%) ORDER & K5.2 Billion (3.1%)
K23.2 Billion (13.9%) SAFETY K3.5 Billion (2%)
EDUCATION
K18.1 Billion (10.4%)
K2.65 Billion (1.5%)
K20.91 Billion (11.8%) HOUSING &
COMMUNITY K2.6 Billion (1.5%)
HEALTH K17.4 Billion (10.4%) AMENITIES K2.4 Billion (1.4%)
K13.9 Billion (8%)
K9.92 Billion (5.6%) K1.45 Billion (0.8%)

K8.1 Billion (4.9%) ENVIRONMENTAL K1.1 Billion (0.6%) Legend
DEFENCE
K7.6 Billion (4.4%) PROTECTION K971.9 Million (0.6%)
2024
K9.67 Billion (5.4%) K493 Million (0.3%) 2023
RECREATION,
SOCIAL K8.1 Billion (4.9%) CULTURE & K444.4 Million (0.3%) 2022
PROTECTION K6.3 Billion (3.6%) RELIGION K156.4 Million (0.1%)
Source: 2022, 2023 and 2024 Annual National Budget Speeches

2024 Budget Allocation Against International Protocols
Table 6: Budgetary allocations against best practice
International 2024 National 2023 National 2022 National

Sector Budget Budget Budget Budget Score
Allocation (%) Allocation (%) Allocation (%) Allocation (%)
Education 20 15.4 13.9 10.4 X
Health 15 11.8 10.4 8 X
Social Protection 3.5 5.4 4.9 3.6 ✓

Agriculture 10 7.8 6.7 3.7 X
Water and 1 to 3 1.1 1.5 1.4 ✓

Sanitation
Source: Compiled by PMRC
Zambia is a signatory to numerous international treaties, such as the Maputo Declaration
on Agriculture and Food Security, which makes several key obligations, including one to
devote at least 10 % of national budgetary funds to agriculture. Similar obligations are
made in the Abuja Declaration on HIV and AIDS, Tuberculosis and other infectious
diseases, which calls for an objective of dedicating at least 15 % of the national budget
to the health sector. According to the Incheon Declaration and Framework for Action
towards Inclusive and Equitable Quality Education and Lifelong Learning for All,
20% of the entire national budget should be allocated towards the education sector.
While there has been an increase in the amounts allocated to the education, health, social
protection and agriculture sectors in the 2024 budget, the % allocation falls short of the
aspirations of international protocols. However, PMRC commends the Government for
its continued allocation in meeting international best practices in percentages allocated
to social protection, and water and sanitation sectors. These strides are key in meeting
global development agendas where Zambia is a signatory.
Figure 8: Trend analysis of budget allocations against international protocols
15.40%
13.90%
Budget allocations per sector
National budget
allocations
11.80%
2024 2023 2022

10.40%
10.40%
8.00%
7.80%
6.70%
5.40%
4.90%
3.70%
3.60%
1.40%
1.50%
1.10%
20% 15% 3.5% 10% 1-3%

Education Health Social Agriculture Water and
Protection Sanitation
International allocations per sector
Source: Compiled by PMRC

REVENUE ESTIMATES AND FINANCING
Domestic revenue in Zambia is projected to increase in nominal terms from K98.6 billion
in 2022 to K141.1 billion in 2024. This represents an annual growth rate of 8.6% over the
three-year period. Tax revenue is projected to account for a large portion of domestic
revenue, with a share of 81.3% in 2024. Non-tax revenue is projected to account for the
remaining 18.7% of domestic revenue.
Figure 9: Trend Analysis of 2022-2024 Revenue Estimates
150 141
111.7 114.5
98.6 93.6
100
77.9
50
20.7 26.5
18.1
0
(Billion of Kwacha) (Billion of Kwacha) (Billion of Kwacha)
2022 2023 2024
Tax Revenue Non-Tax Revenue Total Domestic Revenue
Source: National Budget Speeches (2022 - 2024)
Key Tax Measures

The Government intends to raise K177.9 billion to meet the proposed expenditure; a
total amount of K141.1 billion will be domestically sourced of which K114.5 billion should
come from tax revenue and K26.5 billion from non-tax revenue while the difference will
be sourced through grants from cooperating partners.
Pay As You Earn (PAYE)

The Government proposes to revise the PAYE by increasing the exempt threshold to
K5,100 from K4,800 and reducing the top rate to 37.0% from 37.5 %.
Table 7:Tax Regime
2023 2024
Income Band (K, per month) Tax Rate Income Band (K, per month) Tax Rate
K0 – K4800 0% K0 – K5100 0%
K4,801 – K6,800 20% K5,101 – K7,100 20%
K6,801 – K8,900 30% K7,101 – K9,200 30%
Above K8,900 37.5% Above K9,200 37%
Source: National Budget Speeches (2023 and 2024)

This is a positive move, as it will provide some relief to low- and middle-income earners.
The increase in the exempt threshold is particularly significant as it effectively raises
the income level below which individuals are not liable to pay income tax. Setting the
new threshold at K5,100, the Government aims to ensure that a larger portion of the
population, especially those with modest earnings, is exempted from paying income
tax. This measure acknowledges the relevance of providing economic relief to
individuals who are at the lower end of the income scale, potentially freeing up more
of their income for essential living expenses.
Value Added Tax (VAT) and Related Taxes

The Government also proposes to increase the VAT rate on non-alcoholic beverages to 60
Ngwee per litre from 30 Ngwee per litre. Increasing the specific excise duty for tobacco
and tobacco products to K400 per mille from K361 per mille. Introducing excise duty at
5% on specific solid fuels made from coal. Changing the excise duty valuation method for
spirits, liqueurs, and other spirituous beverages to be determined on the basis of market
price and not the value of inputs at importation. Introducing a levy of between 8 Ngwee
and K1.80 on the transaction value for person-to-person mobile money transfers. These
measures are likely to have a mixed impact on taxpayers. Some of the measures, such as
the increase in the excise duty on tobacco and tobacco products, are likely to be borne
by high-income earners. However, other measures, such as the levy on mobile money
transfers, are likely to have a greater impact on low-income earners.
Table 8: Mobile Money Transaction Cost
Amount Range (K) Proposed Levy (K)

Between 1 to 150 0.08
Above 150 to 300 0.10
Above 300 to 500 0.20
Above 500 to 1,000 0.50
Above 1,000 to 3,000 0.80
Above 3,000 to 5,000 1.00
Above 5,000 to 10,000 1.50
Above 10,000 1.80

Non-Tax Measures
Government plans to introduce a fee of K3,750 for Deoxyribonucleic Acid (DNA) testing
under the National Forensic Science and Biometrics Department. Increase the licence
fee for commercial Kapenta operators to K4,000.00 from K3,333.00, last revised in 2011.
Increase toll tariffs for heavy-duty trucks with 4 axles and above by K100 and for abnormal
load vehicles by K300. These measures are expected to generate K721 million in additional
revenue for the Government. They will take effect on January 1, 2024. The proposed non-
tax measures put forth by the Government signify a pragmatic approach to resource
mobilisation and financial sustainability. These actions are characterised by a diversified
revenue strategy, which aims to produce additional income for the Government without
imposing direct tax obligations on the general populace. The goal of this strategy is to
generate additional revenue for the Government without imposing direct tax burdens on
the general people.
Strategies to Enhance Domestic Resource Mobilization

In order to bolster domestic resource mobilisation, several strategic steps can be taken.
Government should endeavour to broaden the tax base, involving a reduction in the
multitude of tax exemptions and deductions, and the inclusion of a greater number
of individuals and businesses within the tax framework. The introduction of new
taxation avenues, such as levies on digital products and services or taxes targeting
environmentally detrimental practices, can diversify revenue streams. Finally, enhancing
tax administration is pivotal, entailing the simplification of tax procedures, facilitating
taxpayer compliance, and implementing stringent measures to combat tax evasion.
These multifaceted strategies collectively contribute to the Government’s fiscal resilience
and financial sustainability.
Untapped Revenue Sources

Exploring untapped revenue sources offers an avenue for fiscal growth and sustainability.
Consideration of augmenting royalties on natural resources, including minerals, presents an
opportunity to enhance Government revenue streams while ensuring equitable resource
extraction compensation in the advent of new mineral discoveries. Implementation
of financial transaction taxes, levied on the trading of financial assets, can serve as
a viable revenue source. Notably straightforward to administer, these taxes have the
potential to yield substantial income, contributing to a diversified fiscal portfolio.

Cost Saving Measures
In order to improve fiscal sustainability and promote efficiency, a multifaceted approach
can be adopted. Privatisation of state-owned enterprises (SOEs) stands as a viable
strategy, not only generating revenue from SOE sales but also fostering potential
efficiency enhancements. Public-Private Partnerships (PPPs) present another avenue,
allowing the Government to collaborate with private entities in delivering public services,
thereby lowering costs and infusing fresh expertise and innovation during periods
of tight fiscal conditions. This measure will allow for the implementation of capital
projects during the period of the debt break and debt repayment period. Further, refining
procurement processes to curtail waste and fraud can yield substantial savings.
Streamlining Governmental procedures and trimming unnecessary regulations and
bureaucracies may also contribute to cost reductions, ensuring a more economically
sustainable Government operation.

ECONOMIC
TRANSFORMATION
& JOB CREATION

INTRODUCTION
The Government proposes to spend K39.8 billion or 22.3 % of the total budget to support
economic sectors and unlock the growth potential of the country. The substantial
resources allocated to this function are in line with the priorities enshrined in the Eighth
National Development Plan (8NDP). In order to achieve the 2024 National Budget theme
of “Unlocking Economic Potential”, it is imperative that advancements are made
with regard to industrialisation and economic diversification in the key drivers of the
economy which are agriculture, mining, manufacturing and tourism. This is supported
by investment in the energy sector, transport and logistics, and will ensure sustainable
economic transformation and resilience of the economy to external shocks. These
targeted investments enshrined in the 2024 budget signal a great ambition to unlock
Zambia’s economic potential.
Agriculture, Livestock and Fisheries

Agriculture is one of the sectors identified as a key driver for economic transformation and
job creation in the Eighth National Development Plan (8NDP). Zambia’s agriculture sector
comprises crops, livestock, and fisheries. The Agriculture sector accounts for about
20% of Zambia’s GDP and employs over half of the workforce. It has the potential
to be a major source of economic growth, given the country’s abundant fertile land
and good rainfall (International Fund for Agriculture Development, 2023). However,
its contribution to GDP has been gradually declining (15.60% in 2010 to 3.39% in 2022)
(World Bank, 2022) and productivity remains very low by global standards due to several
factors such as adverse effects of climate change, high cost of inputs, unaffordable
finance, inadequate irrigation and other agricultural support infrastructure, poor
livestock and crop management practices, as well as inadequate mechanization
(Ministry of Finance and National Planning, 2023).
In November 2022 the world’s population surpassed 8 billion people, having grown by
1 billion since 2010 (United Nations, 2023). Population growth is a major driver of the
increasing demand for food, given the increase in the global population, Zambia can
position itself to become a food hub for the rest of the world as it is endowed with a
large arable land resource base and abundant water resources for irrigation which
gives it a comparative advantage. In order to achieve this, investment is needed within
the agriculture sector to address the various challenges faced as well as to increase
productivity.
Figure 10: Comparison Analysis of 2024 and 2023 Agriculture, Livestock and Fisheries Budget Allocation
K16,000,000,000
K13,826,019,474 2024 2023
K14,000,000,000
K11,209,692,002
K12,000,000,000
K9,119,154,149
K10,000,000,000 K8,561,421,253
K8,000,000,000
K6,000,000,000
K1,680,000,000
K4,000,000,000
K1,216,140,030 K274,397,835
K2,000,000,000 K598,376,550
K498,822,748
K0
Agriculture, Farmers Input Farm Blocks, Animal Disease Strategic Food
Livestock and Support Development, Control Reserve
Fisheries Budget Extension and
Irrigation
The Maputo declaration requires African states to allocate a minimum of 10% of their
national budgets to agriculture in order to assist in achieving a 6% annual growth rate.
The agriculture component of the budget has fallen short of meeting this requirement
for many years now. The 2024 budget proposed an allocation of K13, 826, 019,474 (7.8%)
towards agriculture, livestock and fisheries interventions. This represents an increase
in funding of approximately K11, 209, 692, 002 (6.7%) when compared to the 2023 budget
allocation.
There has been a reduction in the Farmers Input Support Programme (FISP) from K9,
119, 154,149 in 2023 to K8, 561, 421, 253 in the 2024 National Budget. The reduction in
FISP is as a result of reduced input price, such as fertiliser on the global market to
target the same number of beneficiaries. Reduced input prices are key to increasing
production and productivity in the crop subsector. In addition, the budget allocation
for farm blocks, extension services, and irrigation support has been cut from
K1,216,140,030 in the 2023 budget to K598, 376,550 in the 2024 budget. There has been
an increase in budget allocation towards animal disease control from K274,397, 888 in
2023 to 498,822,748 in 2024. The 2024 budget has further allocated a K1,680,000,000
to Strategic Food Reserves. This increase in budgetary allocation will help the Food
Reserve Agency (FRA) to enter the marketing season early and secure the various
strategic crops as enshrined under the FRA Act critical to food commodity price
stabilization. Strategic food reserves are stockpiles of food (staple food crops) that are
held in reserve with the intention of releasing the food during times of emergency or when
there is a scarcity of food. They can provide a buffer against shocks to the food supply in
periods of droughts, floods, or crop failures due to climate change which enables them
to play a vital role in the process of guaranteeing food security. This measure has the
capacity to curtail the cost of staple food such as mealie meal on the market.

In the 2022 budget, Government announced a new comprehensive support program for
the agriculture sector which was to commence in the 2022 - 2023 farming season. The
Comprehensive Agriculture Transformation Programme (CATSP) is designed to translate
into action the will and commitment of the Government of the Republic of Zambia (GRZ)
to implement an agriculture transformation policy. The Comprehensive Agriculture
Support Programme aims at not only providing farmers with inputs as was the case
with the Farmers Input Support Programme, but will also enhance extension services,
improve market access and financing to farmers, and develop irrigation systems.
The implementation of the CATSP, originally scheduled to commence during the 2022-
2023 farming season, has experienced a delay. However, it has been officially confirmed
that the plan would be launched prior to the end of the year 2023. CATSP is an important
policy instrument that will foster inclusive prudent allocation of resources to agricultural
productivity drivers.
As a way of diversifying the economy away from overdependence on copper exports,
the Zambian Government has put in place various initiatives aimed at transforming
the agriculture sector, key among them is the development of farm blocks. According
to the Ministry of Finance and National Planning, a farm block is envisaged to be a
large agricultural area where basic infrastructure for agriculture, such as feeder
roads, electricity, water for irrigation and communication facilities, are provided.
Government in the 2024 budget has announced its intention of constructing 300
kilometres of roads in Nansanga, Luena and Shikabeta farm blocks. In the same
vein, the Government will also embark on the construction of 10 bridges to enhance
connectivity in the farm blocks. In order to facilitate the installation of power to farms
within the farm blocks, 200 kilometres of powerlines will be constructed in Luena,
Luswishi and Shikabeta farm blocks. Lastly, to mitigate reliance on rain-fed agriculture
and facilitate year-round crop cultivation, there will be increased investments directed
towards enhancing irrigation infrastructure. These measures are key commendable
interventions for creating an effective operational environment for farm blocks.
Climate change, as well as weather variability in Zambia, has resulted in crop devastation,
reduced cultivable area, and soil erosion, which has increased hunger in affected
agroecologies. In order to cope with climate change, the Government has devised
adaptation and mitigation strategies. Government will use smart farming technologies
with support from Cooperating Partners in the 2024 budget. These will include
conservation agriculture, water harvesting, adaptive research, on-farm research
programmes, agricultural insurance, as well as early warning systems.
With regards to livestock, the Government in 2024 will improve animal health, animal
identification and traceability as well as livestock breeding programmes. In order to
achieve this, the Government will endeavour to enhance disease surveillance and
response system through the operationalisation of regional veterinary laboratories
in Chipata, Choma, Isoka, Kasama, Mongu, Ndola and Solwezi. In addition, the Central

Veterinary Research Institute will be rehabilitated in order to enhance Research and
Development on the prevention, control, diagnosis, and treatment of diseases as well
as on the basic biology, welfare, and care of animals. Government will also enhance
animal identification and traceability through the development of an online system which
is being piloted in Central, Lusaka, Northwestern, Southern, and Western Provinces. The
system will enable the public to register, search and identify animals and will be linked
to a Short Messaging System for ease of access by animal owners. Enhancing animal
identification and traceability will result in the prevention of theft as well as the ability
to quickly respond to concerns related to animal health and food safety. Lastly, the
Government will strengthen legal reforms on animal identification and traceability,
through the introduction to Parliament for debate, the Animal Identification and
Traceability Bill.
Raising healthy and robust animals with improved animal welfare is a priority in modern
livestock farming. By improving the propensity of animals for certain traits and preserving
genetic diversity, it is possible to enhance entire populations of animals, with tangible
benefits for farmers, consumers, and the environment. Animal breeding is the selective
crossing of domestic animals chosen for their desirable or preferred traits (European
Livestock Voice, 2022). Government has recognised the importance of animal breeding
in improving the genetics of animals, making them more resistant and more productive.
It is for this reason that Government will in 2024 implement a community-based livestock
breeding programme through a pass-on scheme to support livestock farmers
Government will also promote the establishment of fish hatcheries. The 2024 budget
highlights Government’s intention to establish 3 hatcheries in 3 aquaculture parks in
Kasempa, Mushindamo and Samfya districts which will increase fingerling production
from the current 302.0 million to 433.4 million in 2024. A fish hatchery breeds and
raises fish or other aquatic animals in a controlled and captive setting. Hatcheries can
be a unique and powerful tool for wildlife conservation when they are used to recover
wild populations and support sustainable recreational fisheries (U.S. Fish & Wildlife
Service).
Access to finance is a major challenge in the agricultural sector. Agriculture finance

empowers farmers to increase their wealth and facilitates the development of food value
chains. In enhancing farmers’ access to finance, Government in collaboration with
cooperating partners has allocated K186.0 million towards the establishment of a
financing and credit window for small-scale farmers, public service workers, and
emergent farmers. This will support small-scale farmers, emergent farmers, and public
service workers with affordable financing to procure inputs, equipment and irrigation
systems, among others. Financial provision speaks to the theme of unlocking Zambia’s
economic potential where farmers diversify and produce more for the local and export
market.

Mining
The mining sector remains the bedrock of Zambia’s economy accounting for over 10% and
70% of GDP and export earnings respectively. Since 1920, when the first commercial mine
opened, mining has been a key economic activity for Zambia. Mining taxes account for a
large share of Government revenue and foreign direct investment (World Bank, 2016).
It contributes significantly to GDP and has been the fastest-growing sector in the Zambian
economy (Sikamo et al., 2016). In terms of the country’s revenue, the mining sector
contributes to the treasury through an array of taxes, directly and indirectly. In addition,
the sector contributes heavily to the country’s trade profile with copper accounting for a
staggering 70% of export earnings (Bank of Zambia, 2021).
Lack of geological information hinders mining industry expansion, especially green field
investments in mineral value chains. According to the findings of the PMRC study titled
“Zambia’s Key Reforms for the Actualisation of the 3 Million Metric Tonnes of Copper in
a Decade” has shown that the lack of comprehensive geological information has been
hampering the development of the mining sector. The measure will, in the long term, help
unlock more mineral deposits and contribute to the targeted metric tonnes. Only 55%
of the land was geologically mapped, and the data is outdated with low resolution.
The lack of financing for the Ministry of Mines and Minerals Development hampers
the update and development of high-resolution geological data. The Government
has budgeted K160 million in the 2024 budget for a high-resolution national geophysical
survey. The sub-surface’s composition can be revealed by geophysical surveys used
in mining exploration. This information helps find opportunities, irregularities, and
features with minimal environmental impact. Due to the high resolution countrywide
geophysical survey, investors will have enough information to decide when and where to
invest time and resources and how to safely and effectively find targets. The Government
will conduct aerial surveys in Copperbelt, Lusaka, Northwestern, Southern, Western,
and Central Provinces in 2024. Aerial surveys measure and collect mine locations
efficiently and securely. Aeronautical surveys will enable inspection, surveying,
mapping, safety, and security, which are essential to meeting the 3 million metric
tonnes of copper output target by 2032 through the creation of more Greenfield
Investments in the mining sector.

Regulatory oversight is critical to a well-functioning mining sector. To this end, the
Government in the 2024 budget has proposed to introduce to Parliament for debate
a Bill to operationalise the Minerals Regulation Commission. The Commission will
focus on production reporting, mineral content analyses and illegal mining. Minerals
Regulation Commission operationalization will improve site monitoring and transparent
cooperation among mine operators, resulting in cleaner and safer mining operations,
increased mine uptime, and more consistent revenue collection for the country. This
will help organise the mining sector and respond to the modernisation of the sector to
increase productivity.
Tourism
Zambia stands out as one of the prime tourism destinations in Africa offering a wealth
of natural tourism assets such as waterfalls, lakes and rivers which hold close to 35% of
Southern Africa’s total natural water resources and wildlife protected areas’ occupying
about 32% of the country’s total land area. The tourism sector is an important contributor
to the country’s economic development through job creation, foreign exchange
earnings, contributions to Gross Domestic Product (GDP) and other economic facets.
(Office of the Auditor General, 2020).
In the 2024 budget, the Government announced an allocation of K769.5 million to the
tourism sector for the development of tourism infrastructure, marketing, wildlife
management, and development of tourism products, among others. Government intends
to establish a tourism satellite account to measure the contribution of the tourism sector
to the economy. This pronouncement is timely as the 2020 report by the Office of the
Auditor regarding the tourism sector’s performance in increasing international tourists’
stay length, a tourism satellite account to quantify its economic impact has been lacking.
Due to non-systematic data collection, tourism statistics were incomplete. An inaccurate
data collection system made it difficult to determine how many international tourists
visited each tourism destination and how long they stayed. It also affected the Ministry’s
planning. Through collaboration with Immigration and Customs, the Tourism Satellite
Account will facilitate visitor arrival data collection and research. PMRC envisions that
the effective implementation of this satellite account will improve the accuracy of data
collection and analysis which is key for planning purposes.

Tourism is hindered by inaccessibility and poor infrastructure. Under the Green,
Resilient, and Transformational Tourism Development Project, the Government has
allocated US$100 million to upgrade infrastructure. Improve air and road connectivity
to Liuwa, Sioma-Ngwezi, Livingstone, Lower Zambezi, and Kafue National Parks in
the South-West tourism circuit. The acquired money will also diversify tourism offerings
including cultural, avitourism, health, and sports tourism. Current tourism offerings are
mostly nature-based, which limits international tourists’ stays. This move will increase
their stay.
To support tourism, the Government will change wildlife conservation and management.
Since cultural and natural habitat preservation are important, this is timely. Events,
conferences, exhibitions, and incentive travel will continue to get Government funding.
Manufacturing
The proposed 2024 National Budget re-affirms the importance of the manufacturing
sector for the economic growth of the country. The sector experienced a growth rate of
4.2% in 2022 . The Multi-Facility Economic Zones (MFEZs) continue to be a key avenue
through which the Government aims to grow the manufacturing sector. MFEZs are
specific geographical areas where Government facilitates industrial activity through
fiscal and regulatory incentives and infrastructure support (UNCTAD, 2019)
The development of MFEZs has attracted local and foreign investors. In the Lusaka South
MFEZ, 22 enterprises have invested $541.4 million and created 12,558 jobs. The Government
is delighted with local entrepreneurs’ response to MFEZs and encourages production.
To make MFEZs more appealing, the Government recognises their shortcomings.
Harmonising and lowering land costs, revisiting burdensome Employment Code Act
restrictions, and streamlining immigration and work permit formalities are proposed.
The Government also plans to liberalise expatriate work in MFEZs to encourage investment
and jobs, challenging the idea that more aggressive employment rules create local jobs.
To stimulate further private sector led Multi-Facility Economic Zone development and
industrialization, the Government will provide the following fiscal incentives:

a) Extend the accelerated depreciation up to 100 percent in respect of any new implement,
plant or machinery to developers of Multi-Facility Economic Zones; and
b) Provide for the extension of the validity period for the customs duty incentives accessible by
a developer of a Multi-Facility Economic Zone for 5 years upon fulfilment of the conditions
as may be prescribed.
The incentive of accelerated depreciation of up to 100% for new tools, plants, and machines
for MFEZ developers is important. Tax deductions allow businesses in MFEZs to recoup
their investments faster. This decreases investors’ financial burden and encourages
them to upgrade and expand their facilities in MFEZs, increasing economic activity.
Another noteworthy measure is extending customs tax incentives for MFEZ developers
for 5 years under certain conditions. This gives MFEZ enterprises long-term consistency
and stability. When customs duty incentives are extended, investors are more willing to
invest in long-term projects and large amounts. This can encourage domestic and global
investors to start or expand in MFEZs, boosting economic growth.
Energy
The 2024 National Budget underscores the significance of the energy sector in driving
economic development and sustainability. This is in keeping with Zambia’s 8NDP which
identifies the energy sector as a key enabler of economic growth. Both the 8NDP and
Zambia’s Medium Term Budget Plan (2024-2026) outline the objective to increase the
country’s electricity generation capacity and to promote the use of green and renewable
energy. The major priorities for the sector in the proposed 2024 budget therefore include
improving efficiency, promoting competition and private sector participation, increasing
electricity generation capacity and expanding access to clean energy, especially in rural
areas.
Of particular note, the move to enable third-party access to the TAZAMA Pipeline is a
positive step towards fostering competition in the energy sector. This open-access policy
is poised to benefit consumers by providing them with more choices and potentially lower
prices. Moreover, the call for private sector investment in a new pipeline to increase fuel
import capacity signifies a broader effort to diversify energy infrastructure and ensure
long-term energy security. This is a call to Oil Marketing Companies (OMCs) to invest in
fuel storage infrastructure to support this policy measure.

There are two further proposed measures to note:
a) To promote investment in power generation, the Government proposes to increase the
period in which a business can claim a refund on VAT incurred on eligible goods before
the commencement of commercial operations to 7 years from the current 4 years for
hydroelectricity generation.
b) To promote geothermal energy, the Government proposes to remove customs duty on
machinery, equipment and other goods designed for geothermal energy activities.
One major benefit of increasing the hydroelectricity generation VAT return term to 7
years from 4 years is the ability to claim a refund on qualified goods before commercial
operations. Hydroelectric projects involve large upfront costs and long gestation
periods. Hydroelectric power investors are financially rewarded by the VAT refund
extension. This can assist in enticing private investment into hydropower projects by
giving investors more time to repay their VAT costs.
Removing customs duty on geothermal energy machinery, equipment, and other
commodities encourages project growth. Geothermal energy is a sustainable energy
source with great promise, but it requires specialised equipment. Therefore, a
geothermal energy installation project is usually long and expensive (Ribeiro et al., 2023).
The Government is lowering the cost of importing these essential components by
abolishing customs duty, making geothermal energy projects more affordable and
appealing to investors. This can boost geothermal energy investment and diversify
Zambia’s energy mix.
The Government hopes to meet the country’s expanding energy needs and strengthen the
energy industry by offering these incentives to attract power generation investment and
promote renewable energy. For Zambia’s economic growth and development, a stable
and sustainable energy supply is essential, hence boosting generation capacity is a
priority.
Information & Communications Technology
The ICT sector’s role in economic digitalization and inclusive growth is clearly outlined
in the 2024 National Budget. Zambia’s ICT sector’s 2024 budget goals include digital
inclusion, access to digital services, and public service efficiency, especially in
rural and disadvantaged areas. The budget prioritises many efforts to enhance ICT

infrastructure and services nationwide.
§ The Government is committed to universal internet and mobile connectivity, as seen by the
construction of 139 communication towers in 2023 and 169 scheduled for 2024. This massive
investment aims to boost network coverage from 78% in 2020 to 92%. The Government’s
aggressive network infrastructure expansion shows its acknowledgement of connectivity’s
importance in digitalization and economic progress.
§ The creation of Digital Transformation Centres in rural areas demonstrates a commitment
to closing the digital gap. These centres can empower rural communities by providing ICT
resources and services, potentially enabling education, entrepreneurship, and quality of life.
§ Thirdly, moving governmental services via ZamPortal is crucial for improving service delivery
and streamlining Government processes. The platform, which offers 280 services and will add
382 by 2024, promises to lower transaction costs, eliminate bureaucratic bottlenecks, and
improve public service transparency and accountability. Increasing public knowledge and use
of online services is difficult.
§ The Government’s focus on private sector collaboration, such as satellite and fibre connectivity,
provides a strategic method to extend ICT access, especially in distant and underserved areas.
Effective digital inclusion requires this public-private partnership.
Digitalisation promotes transparency and accountability through enhanced public service

delivery, reduced corruption, fraud and public participation that ultimately reduces the
cost of doing business by fostering efficiency.
Transport & Logistics
The Transport and Logistics sector unlocks economic potential and eases economic
operations, thus the 2024 National Budget priority setting. Public Private Partnerships
(PPPs) rural road development, border clearance times, and airport infrastructure
upgrades are the sector’s top priorities to improve transportation and logistics.
Building and maintaining Zambia’s enormous road network is expensive, as the budget
shows. Fiscal restrictions limit borrowing capability, but the Government’s innovative use
of PPPs is important. Recent developments include dualising the Lusaka-Ndola road and
rehabilitating other roads. This shows dedication to improving transit infrastructure while
managing budgets.

Table 9: Proposed Road Infrastructure Expenditure (ZMW)
Year Proposed road infrastructure expenditure (ZMW) Percentage change

2022 4,929,279,060 N/A
2023 5,156,017,706 4.6%
2024 8,337,221,909 61.6%

The table above shows that there was a 4.6% increase in road infrastructure
expenditure from 2022 to 2023, and a significant increase of 61.6% from 2023 to 2024.
The expenditure has notably increased in 2024 compared to the previous years.
Figure 11: Proposed Road Infrastructure Expenditure (ZMW)
K9,000,000,000
K8,000,000,000
K7,000,000,000
Budget Amount
K6,000,000,000
K5,000,000,000
K4,000,000,000
K3,000,000,000
K2,000,000,000
K1,000,000,000
2022 2023 2024

Year
The improved Rural Connectivity Project is another noteworthy rural development

endeavour. This initiative empowers rural communities and boosts economic activity by
building, maintaining, and upgrading feeder roads. Road construction by constituencies
through the Constituency Development Fund (CDF) ensures decentralised infrastructure
development and better connectivity in remote locations.
Additional measures proposed include the following:

a) To improve railway operations by removing customs duty on the importation of rolling stock,
namely, wagons and locomotives.
b) To continue promoting the usage of clean energy as well as supporting the green economy and
climate change mitigation by:
i) Removing customs duty on electric motorcycles, electric vehicles, electric buses,
electric trucks, and attendant accessories such as charging systems; and
ii) Reducing excise duty to 25 percent from 30 percent on hybrid vehicles designed for the
transportation of persons.

By removing customs duty on the importation of rolling stock, such as wagons and
locomotives, the Government is lowering the cost of acquiring and maintaining these
essential railway assets. This reduction in import taxes can make railway operations more
cost-effective, encouraging both public and private investment in the railway sector. It
will also help modernise and expand the railway network, potentially leading to improved
efficiency and capacity.
Multiple benefits come from clean energy transportation proposals. Customs duty-
free electric bikes, automobiles, buses, trucks, and charging accessories stimulate
transport sector’s use of electric vehicles. Electric vehicles are more affordable for
individuals and businesses after this change. It cooperates with worldwide carbon
reduction and sustainable transportation projects. Reduced excise duty on hybrid
passenger automobiles encourages eco-friendly mobility. Hybrid cars reduce
greenhouse gas emissions and are a step towards electric cars. The reduced excise
duty makes these vehicles more cheap and attractive boosting the green economy
and climate change mitigation.

HUMAN & SOCIAL
DEVELOPMENT

Social Protection
One of the key pillars of social protection programming is the expansion of livelihood
support that aims to reduce poverty and vulnerability. In the 2024 budget, 9,671,765,277
has been earmarked towards social protection programming representing 5.4% of the
National Budget. Of this amount, 4,118,237,220 is towards Social Cash Transfer (SCT),
3,872,921,174 towards Public Service Pension Fund, 1,260,855,784 towards Food Security
Pack and 400,000,000 towards Local Authorities Superannuation Fund. The allocation
to the sector is an increase from the 2023 allocation of K8, 127,762,301, equivalent to
4.9% of the budget. This underscores the Government’s ongoing dedication to prioritise
and enhance social protection initiatives, signifying their recognition of the importance
of safeguarding the welfare and economic stability of vulnerable segments of the
population.
Figure 12: Social Protection Budgetary allocation trends
6.00%
5.00%
Percentage
4.00%
3.00% 5.4%
4.9%
2.00% 3.6%
1.00%
0.00%
K6.2 Billion K8.1 Billion K9.6 Billion
2022 2023 2024

The SCT programme which is Zambia’s flagship programme has over the years risen
to over a million beneficiary households with a reach of 1,100,998 as at June 2023
from 1,027,000 in 2022. With the aim of providing support to vulnerable households
in order to alleviate poverty and enhance their wellbeing, the transfer value has
equally been increasing over the years from K150 to K200 and from K300 to K400 for
beneficiary households of a member with a disability. Some of the challenges that
have necessitated the continued expansion and support of the SCT programme are
the high levels of poverty which according to preliminary findings of the 2022 Living
Conditions Monitoring Survey currently stand at alarming rates with 31.9% in urban
and 78.8% in rural areas, thus threatening the well-being and economic stability of a

significant portion of Zambia’s population. Social protection therefore remains key,
particularly, due to the rise in poverty as well as the cost of living which according to
Jesuit Centre for Theological Reflection (JCTR) currently stands at K9, 267.34 of the
basic’needs and food basket for a family of five in Lusaka as of August 2023.
One of the major factors that have continued to influence the rise in poverty is a lack
of industrialisation. With regards to rural poverty, the drivers have been due to limited
economic activity, mainly because Zambia’s rural economy is largely driven by
rainfed agriculture with limited opportunities for economic activities off season.
Thus, negatively impacting livelihood opportunities. As for the rise in urban poverty, it
can be attributed to the fact that Zambia has been urbanising rapidly with limited
industrialisation. There are limited job opportunities, and this drives the rural population
to move to urban areas where there is a lack of industries that can absorb low skilled
labour into the market. This has largely resulted in the rise in urban poverty. In order
to remedy poverty, there is need for increased investments in the productive sectors
in areas such as agriculture, mining and manufacturing to promote value-addition on
which industrialisation can be underpinned to spur job creation. The agricultural sector
has the highest potential to create jobs, therefore there is need to invest in areas such
as irrigation and lowering the cost of production which then promotes economic activity
for the majority of the population without relying on rain-fed agriculture. Processing
and manufacturing sectors can also absorb a greater percentage of the unemployed
population, the trickle-down effects of this are increased productivity and value addition
for economic growth. There is also need to enhance investments in skills development
and innovation, particularly among youths who then contribute effectively to national
development.
The Food Security Pack Programme enhances household food security by supplying
vulnerable households with fertiliser and seed to maintain nutrition and livelihoods. In
2022, 241,000 families were beneficiaries; now 242,000. Rising poverty rates make this
vital. Another project, the Public Welfare and Assistance Scheme, will serve 40,000
disadvantaged people, up from 16,000 now. Another programme slated for upscaling
is the Girls’ Education and Women’s Empowerment and Livelihoods (GEWEL) Project,
which helps extremely poor girls attend secondary school. The livelihood support and
economic development of underprivileged women and girls through this project reduces
negative vices such Gender Based Violence (GBV), early marriages, and inadequate
education for females. Deciding to increase beneficiaries from 116,891 in 76 districts to
129,400 in 81 districts by April 2024 is commendable.
In recognition of the need to improve comprehensive social protection programmes for
the disadvantaged, Cashplus includes livelihood support and social services in addition
to cash transfers. It strives to reduce income poverty and address broader poverty,

connecting disadvantaged people to education, healthcare, and livelihoods.
Integrating the programme with other poverty alleviation and livelihood development
efforts through the single window approach to social protection provision reduces
duplication and increases Government monitoring capacity to link vulnerable
individuals to additional programmes. It could target many poverty aspects and
provide safety nets quickly to boost efforts and programme efficiency.
Recommendations
§ Government is urged to expedite the development of the National Social Protection Policy
in order to reform social protection programmes that will effectively respond to the current
poverty trends. Further, it is urged to strengthen social protection programming and in order
to provide a comprehensive social protection system that can adequately address the rise in
poverty.
§ There is also need to enhance investments in skills development and innovation, particularly
among youths to support livelihood opportunities through entrepreneurship and avert poverty.
§ Government is urged to promote industrial growth in the agriculture and manufacturing
sectors that have the highest potential for absorbing low-skilled labour-force to contain
unemployment and poverty across the country.
Education & Skills Development
Access to quality education remains a critical concern as it directly impacts the

success of national development goals while also improving livelihood opportunities for
citizens. Some of the major challenges that have been impacting the sector include
poor quality education, inadequate human resource, distance to schools and poor
infrastructure. Therefore, enhancing the quality of education has remained key
and measures outlined in the 2024 National Budget are aimed at addressing these
challenges.
In 2024, the Government has allocated K27.4 billion (15.4%) of the budget to the education
sector which is an increase from 23.2 billion (13.9%) in 2023. Of the allocated funds, K1.9
billion is towards the provision of grants to schools in order to support the implementation
of the Free Education Policy. The recruitment of 4,200 teachers in addition to the 4,500
and 30,496 that were targeted for 2022 and 2023 respectively will greatly impact the

teacher-pupil ratio and support the implementation of the Free Education Policy. Further,
the 1,200 non-teaching staff will assist in supporting a conducive learning environment as
well as reducing unemployment of which K356.1 million has been allocated to support this.
However, it will be key that the majority of these teachers are allocated towards secondary
education given that in the previous recruitments, the focus was towards primary and
early childhood education.
Figure 13: Education budgetary allocation trends
18.00%
16.00%
14.00%
12.00%
Percentage
10.00%
8.00% 15.4%
13.9%
6.00%
4.00% 10.4%
2.00%
0.00%
2022 2023 2024
Due to the rising demand for education services, education infrastructure must be
developed to make it accessible. Of the 115 secondary schools under development, 69
were completed and 46 will be completed by 2025. K338.3 million has been allotted
to build 202 secondary schools, of which 82 have begun construction and will be
completed in 2024. Construction of another 120 secondary schools will begin in 2024.
This is a good investment because secondary schools nationwide have been unable to
fulfil demand, especially since the free education programme. In addition, CDF has built
3,132 classrooms to expand infrastructure. As of August 2023, CDF had procured about
442,000 workstations to meet the 1 million-desk deficit.
Access to online learning is a challenge in rural schools. Zambia Information and
Communications Technology Authority (ZICTA) reports 56% internet connectivity.
Increased expenditures in this area could improve internet access, a key tool for
national growth. The Government is encouraging e-learning services to address
online learning issues. To improve access to online teaching and learning materials
and incorporate global technology in education, the e-learning management system is
being implemented. Online learning and internet connectivity will give students access
to digital libraries and a wider selection of educational materials. Digital and media
literacy must be improved to avoid the harmful effects of irresponsible resource use.
This presents a chance to invest more in digital inclusion, especially in rural areas where
digital tools are scarce.

The provision of meals in schools has shown positive impacts under the Home-Grown
School Feeding Programme with funding being increased from K39.4 million to K111.7
million from K39.4 million. This will positively impact the coverage and quality of meals.
This increased allocation is also against the backdrop of high levels of poverty which
according to preliminary findings of the 2022 Living Conditions Monitoring Survey
currently stand at alarming rates with 31.9% in urban and 78.8% in rural areas, thus
threatening the well-being and economic stability of a significant portion of Zambia’s
population. Therefore, this programme has the potential to support key nutritional
benefits to children from vulnerable households, thereby ensuring their access to at
least one nutritional meal. Furthermore, studies have shown that the school attendance
of children accessing these meals improved to 71% with retention of learners improving
by 70% (Zimba, 2018). Academic performance also recorded positive progression,
improving from 60% to 90% pass rate while the failure rate equally reduced from 40%
to 10%. Similarly, learners that progressed to the next grade had improved from 65%
to 88% (Phiri & Chisala, 2017). This is evidence that the programme has the potential
to increase equitable access to education, particularly, among poorer households.
Likewise, it has a positive trickle-down effect in that, access to education has the
potential to uplift families and communities out of poverty. Under this programme,
children have continued to benefit immensely from this intervention since there is a
correlation between children’s performance, nutrition and food security in the home.
Research further suggests that food insecurity contributes to high dropout rates
among children, particularly in rural areas where they provide labour in exchange for
food or assist the family to produce food.
K1.2 billion has been allocated to the Higher Education Loans and Scholarship Board to
finance bursaries for additional students. The Loan Scheme will assist more students. To
match industry needs, skills training has been prioritised. Modernising training institutes
with equipment improves student skills. In addition, apprenticeships will boost skills
and experience. This may reduce unemployment as graduates pursue CDF projects
through innovation and entrepreneurship. To equip TEVET training centres with
modern equipment to provide quality and relevant vocational skills, K70.0 million has
been budgeted.
Recommendations
§ PMRC urges the Government through consultations with stakeholders to develop an online
learning and media literacy strategy to be rolled out in schools in order to enhance the benefits
of digital and media learning platforms.
§ Government with the support from cooperating partners is urged to enhance the provision
of the Home-Grown School Feeding Programme to all schools across the country in order to
support the nutritional needs of children.

§ Furthermore, the Government is urged to link youths obtaining skills training under CDF to
loans aimed at providing support for innovation and entrepreneurship.
§ Government is urged to promote the monitoring of education quality standards to ensure
adherence to education standards which are key for ensuring quality.
Health
The health sector plays a key role in maintaining a productive workforce critical
for driving economic growth and national development. The 2024 National budget
allocated 20,906,443,693 which is 11.8% of the budget and an increase from K17.4 Billion
in 2023. Of this amount, 4,951,092,795 is going towards drugs and medical supplies,
1,394,734,394 for health infrastructure with 239,836,842 targeted for the construction
of mini-hospitals and 120,000,000 targeted for the expansion of the Electronic Health
Records System.
Figure 14: Health Budgetary Allocation Trends
14.00%
12.00%
10.00%
Percentage
8.00%
6.00% 11.8%
10.4%
4.00% 8.0%
2.00%
0.00%
2022 2023 2024

Prominent challenges negatively impacting the sector include drug shortages and
inadequate modern equipment to provide specialised medical care and undertake critical
surgeries, among others. In addition, the health worker to patient ratio still remains high.
The 2024 budget outlines measures to improve the situation.
To address the challenges with medical supply, the Government will adopt a hybrid supply
chain system that will allow for health centre kits and bulk sourcing of medical supplies.

This is expected to mitigate this challenge along-side pursuing a Local Pharmaceuticals
Manufacturing Strategy that seeks to promote the local pharmaceuticals industry
to meet local demands as well as create jobs. In the short-term, about 42,000 health
centre kits have been purchased to last until mid-2024 and the Government has
already commenced the procurement process under the bulk source supply system.
Zambia, like several other developing African countries, is not able to produce most
medications to supply its population and is largely dependent on medical imports from
other countries, especially India (Chongo & Chituta, 2021). Therefore, the Government
is putting in place measures to try to reduce costs on the importation of conventional
medicine by promoting the setting up of local manufacturing of essential medicines.
A major challenge that is impacting advancements in the sector is the low levels of
research and development (R&D) therefore inhibiting any level of collaboration with the
pharmaceutical industry, whose role is to scale up and commercialise pharmaceutical
products (Kalachi, 2014). Hence, the strategy to develop the local pharmaceutical
industry could yield positive results in boosting R&D which is critical to the growth of
the sector. These measures collectively could reduce the logistical challenges faced
in the supply of essential drugs by sourcing locally as well as enhancing our local
manufacturing industries. Coupled with the necessary incentives, this sector could
attract both local and foreign investments for the set up of pharmaceutical industries
in Zambia.
With regards to infrastructure development in the sector, the Government will continue
to construct mini hospitals in order to improve access and provision of medical services
across the country. Of the 16 mini hospitals earmarked for construction in 2023, 12 have
been completed bringing the total number of mini hospitals completed under Phase
1 to 111 out of the target of 115. In 2024, K239.8 million has been allocated for the
completion of the 4 mini hospitals to be completed in Lufwanyama, Lusaka, Mpongwe
and Mufumbwe districts and will commence Phase 11 of the project which targets
the construction of 135 mini hospitals. Furthermore, 62 maternity annexes have
been constructed this year of which 19 were financed under CDF. Government plans
to construct another 30 maternity annexes. Additionally, the construction of cancer
treatment centres in Livingstone and Ndola will help decongest the Cancer Diseases
Hospital in Lusaka as well as decentralise the provision of cancer management and
treatment. Other measures are aimed at upgrading radiotherapy equipment and
infrastructure at the Cancer Diseases Hospital.
To support the human resource component in the health sector, K344.1 million has been
allocated for the recruitment of 4,000 health personnel in 2024, this is a positive step
in addition to the recent recruitments of the 4,500 health personnel in 2022 and the
3,000 in 2023. To improve the quality of services, the Government will also be scaling up

the implementation of the Electronic Health Record System for easy access to medical
records from the current 600 to 3,000 health facilities over a period of 3 years with
K120.0 million being reserved for this purpose.
Additionally, the attainment of Universal Health Coverage (UHC) that facilitates access
to quality and affordable health care for all is a national aspiration that seeks to reform
the provision of health care in Zambia. To this end, the National Health Insurance
Scheme has played a critical role in enhancing access to affordable medical services,
therefore it remains crucial that the scheme is sustained by increasing the monthly
contributions to support universal coverage which currently stands at 2% shared
equally by the employer and employee.
Healthcare investment needs to lean more towards disease prevention by promoting
public health as curative care is more costly. There is need to strengthen innovative
resource mobilisation mechanisms for the provision of primary health care services.
Recommendations
§ PMRC urges the Government to urgently strengthen procurement systems and reinforce
accountability in the health sector to resolve the various challenges in the procurement and
disbursement of supplies to curb the wastage of resources.
§ PMRC urges the Government to increase funding towards ICT for service delivery in the
health sector. Particularly on digital health to improve provision to rural areas that may be
inadequately staffed.
§ Government is urged to provide incentives to attract both local and foreign investments for the
setup of pharmaceutical industries in Zambia.
§ Finally, the Government is urged to increase allocation towards research and development in
the health sector which remains low.
Water & Sanitation
Zambia aspires to achieve universal access to clean and safe Water and Sanitation
(WASH) services by 2030. To meet this goal, steady progress has been made through
investments such as the implementation of the National Urban and Rural Water Supply
Programme with projects being implemented in Kafue, Nakonde, Chinsali, Chongwe,
Lusaka, Kafulafuta, Serenje and Mufumbwe districts. As such, the 2024 National Budget

has allocated 2,651,214,182 representing 1.5% of the national budget to the sector of
which 1,948,869,116 is towards the provision of water and sanitation while 443,487,003
has been allocated for the construction and rehabilitation of dams.
Figure 15: Water and Sanitation budgetary allocation trends
1.52%
1.50%
1.48%
Percentage
1.46%
1.44%
1.42% 1.5% 1.5%
1.40%
1.38%
1.4%
1.36%
1.34%
2022 2023 2024

Some of the major challenges that continue to impact the WASH sector are the low
levels of access to and provision of services which perhaps could be attributed to the
low budgetary allocations and inadequate private sector financing. As observed in the
budgetary allocation trends to the sector, the financing of this sector has remained
significantly low, posing potential challenges to meeting the Sustainable Development
Goals targets (UNICEF, 2022). According to USAID (2022), Zambia needs an investment
of about US$384 million dollars annually into the provision and infrastructure
maintenance of WASH if it is to meet universal coverage by 2030. In line with meeting
the 2030 coverage goals, the Zambia Water and Investment Programme worth US$6
Billion was launched in 2022. The programme seeks to provide support towards water
investments for economic transformation, resilience and water and sanitation. It is
envisaged this will provide critical financing towards enhancing the provision of WASH
across the country. In order to bridge the financing gaps in the sector, innovative
opportunities for PPP model financing in the sector could be explored to increase
investments and meet development outcomes.
Poor access to water and sanitation services has been persistent, particularly in rural
areas. According to the 2018 Zambia Demographic and Health Survey, access to an
improved drinking water source stood at 71% of the population with access standing at
57% in rural areas compared to 91% in urban areas. Notwithstanding these challenges,
the Government has continued to make strides aimed at meeting its commitments to
improve access to water, the Government as of June 2023 constructed 634 boreholes
and aims to complete over 1000 boreholes by the end 2023 set to benefit over 52,000

households. Of the 130 piped water schemes constructed, over 13,000 households
have benefited from the scheme. Additionally, the Government has earmarked the
construction of 38 dams across the country set to commence in 2024. As outlined in
the 2024 National Budget, the intention to construct 1,374 boreholes and rehabilitate
1,270 boreholes across the country aimed at benefiting 92,000 households is a positive
measure aimed at improving the provision of clean and safe water. Other projects such
as the Integrated Small Towns Project in Luapula, Muchinga, Northern and Western
Provinces to be completed in 2024 stand to benefit over 193,000 households.
With regards to sanitation services, 54% reported access to improved sanitation services.
Urban areas had 79% access compared to 38% in rural areas (Zambia Statistics Agency,
2020). To provide adequate sanitation services, the Government will link 6,000 households
to sewage networks in Chipata, Kalulushi, Kitwe, Lusaka, Mongu, and Sesheke in 2024.
Public health depends on the development of 168 waterborne sanitation facilities in public
places and institutions nationwide, especially in high-traffic areas like markets and bus
terminals, which lack sanitation. Investment in infrastructure and technology to promote
recycling is also needed to improve solid waste management.
Given the effects of climate change and its impact on national water security, the
Government commenced the construction of 16 multi-purpose water harvesting
dams in Central, Eastern, Luapula, Northern, Northwestern and Southern provinces
in 2023. The project is estimated to harvest about 1.7 million cubic metres of water to
support over 22,000 households and about 1.7 million livestock. Other works include the
rehabilitation of 6 dams in Central, Eastern, Muchinga, Northern and Western provinces
with an additional 6 earmarked for rehabilitation in Eastern and Southern provinces in
2024.
Recommendations
§ Government is urged to conduct a costing exercise in order to determine the necessary
resources and financing that would support the provision of decent and affordable WASH
services across the country.
§ Government is urged to pursue private sector financing in the provision of WASH services in
order to diversify and complement Government funding in the sector.
§ In view of the increased funding towards CDF, communities are urged to prioritise the
development, provision and maintenance of WASH services and infrastructure within their
communities. Further to this, the Government is urged to pursue development of decentralised
WASH services to cater to communities, particularly in rural and peri-urban areas.

ENVIRONMENTAL
SUSTAINABILITY

The allocation for environmental sustainability in the 2024 budget stands at
K1,450,767,798, constituting 0.8% of the National Budget. This marks a noteworthy
increase of 36%, in comparison to the allocation in 2023 (K1,059,981,064). Government
has further proposed an allocation of K1.5 billion towards environmental protection
and climate change resilience initiatives, which is a positive step in addressing
critical environmental challenges. Such funding can significantly contribute to the
preservation of natural resources, reduction of pollution, and adaptation to climate
change impacts. This upward trajectory in funding for environmental sustainability
is commendable and demonstrates a growing commitment to safeguarding the
environment. Nevertheless, it is of paramount importance that concurrent policy and
legislative measures are promptly developed and implemented to ensure the effective
utilisation of this budget allocation. Such measures are indispensable for the seamless
execution of environmental initiatives and the realisation of sustainable outcomes.
Figure 16: Environmental Protection Budget Allocation (2022 – 2024)
K1,600,000,000
K1,450,767,798
K1,400,000,000
K1,200,000,000
K1,059,981,064
Budget Amount
K1,000,000,000
K971,923,264
K800,000,000
0.8%
K600,000,000
0.6% 0.6%
K400,000,000
K200,000,000
K0
2022 2023 2024
Year
Source: 2022, 2023 and 2024 Annual National Budgets

The 2024 budget underscores the Government’s initiatives aimed at addressing climate
change, strengthening financial resilience, and streamlining environmental impact
assessments. The budget outlines the promotion of innovative financing mechanisms
for climate change interventions, including Green Bonds, carbon trading, and the
establishment of a National Climate Change Fund, which demonstrates a positive and
forward-thinking commitment to addressing environmental challenges. Additionally,
the Government has committed to expanding early warning systems for adverse weather
conditions. While this move is undoubtedly a step in the right direction, it’s important to
emphasise that the effectiveness of these systems hinges not only on the quantity but
also the quality of weather stations, along with robust communication infrastructure
and the capacity to disseminate timely warnings to vulnerable communities. In this
regard, a comprehensive approach that considers both technological and logistical

aspects is crucial to ensure that early warning systems effectively serve their intended
purpose and protect the populace.
Another noteworthy commitment is the recognition of climate-related financial risks

and the intention to strengthen the legal and regulatory framework supporting green
finance. Nevertheless, the budget lacks specificity regarding the exact nature of these
regulatory enhancements. This omission raises questions about how “green finance” will
be precisely defined and operationalised in practice. Clearly defined and well-detailed
policies in this area are essential to drive meaningful change in this sector, encouraging
sustainable investments while mitigating climate-related risks. Additionally, it is crucial
to emphasise the necessity for a comprehensive National Climate Change Policy to
replace the old policy (2016 - 2021). Such a policy would provide a strategic framework
for addressing climate change challenges and guiding the nation towards a more
sustainable future.
The budget also highlights the Government’s intention to review the Environmental
Impact Assessment (EIA) process to expedite investment by reducing processing time.
While streamlining the EIA process is indeed a valuable endeavour to attract investment,
the proposal to deem applications approved beyond specified timeframes raises
valid concerns. This expedited approval approach could inadvertently compromise
rigorous environmental and social assessments, potentially leading to unforeseen
consequences. Striking a balance between efficient approvals and thorough evaluation
of environmental and social impacts is crucial to ensuring sustainable development and
responsible investment practices.
Furthermore, the Government has introduced measures to encourage the use of electric
and hybrid vehicles, demonstrating a commitment to reducing carbon emissions and
promoting sustainable transportation. Removing customs duties on electric vehicles and
accessories, as well as reducing excise duty on hybrid vehicles designed for passenger
transportation, is a positive move. These actions can lower financial barriers, incentivizing
individuals and businesses to adopt eco-friendly modes of transport. Consequently, this
can contribute to reduced greenhouse gas emissions and improved air quality, furthering
environmental protection.
However, as these measures are steps in the right direction, certain considerations must
be taken into account. It’s imperative to have a strategy for monitoring the environmental
impact of these policies, encompassing not only the benefits of electric and hybrid vehicles
but also the sustainability of electricity generation and battery disposal. Complementary
policies, such as infrastructure development for electric vehicle charging stations and
incentives for renewable energy sources, may be needed to maximise the benefits. An

assessment of the potential impact on Government revenue and budget allocation for
environmental protection initiatives is essential to ensure a balanced fiscal approach that
doesn’t compromise environmental goals.
Recommendations
PMRC urges the Government to:
§ Develop and implement comprehensive policies and legislative measures to effectively utilise
the increased budget allocation for environmental sustainability, ensuring seamless execution
of environmental initiatives and the realisation of sustainable outcomes.
§ Expedite the development of a comprehensive National Climate Change Policy to replace
the old policy (2016 - 2021), providing a strategic framework for addressing climate change
challenges and guiding the nation towards a more sustainable future.
§ Invest in the quality, quantity, and accessibility of weather stations and communication
infrastructure for early warning systems, ensuring they effectively serve their intended
purpose and protect vulnerable communities.
§ Provide clear and detailed definitions and regulations for “green finance” to drive meaningful
change, encourage sustainable investments, and mitigate climate-related risks effectively.
§ Approach the Environmental Impact Assessment (EIA) process streamlining cautiously,
considering reasonable time limits for approvals while maintaining rigorous environmental
and social assessments, thus ensuring responsible investment practices.
§ Develop a robust strategy for monitoring the environmental impact of policies promoting
electric and hybrid vehicles, encompassing not only vehicle benefits but also the sustainability
of electricity generation and battery disposal.
§ Consider complementary policies such as infrastructure development for electric vehicle
charging stations and incentives for renewable energy sources to maximise the environmental
benefits of electric and hybrid vehicles.
§ Conduct a comprehensive assessment of the potential impact of the proposed measures on
Government revenue and budget allocation for environmental protection initiatives, ensuring
a balanced fiscal approach without compromising environmental goals.

GOOD GOVERNANCE
ENVIRONMENT

INTRODUCTION
The 2024 National Budget reflects a commitment by the Government to address
governance weaknesses and enhance transparency and accountability in the use of
public resources.
Government conducted a Governance Diagnostic Assessment (GDA) in 2022 in line with

the International Monetary Fund (IMF) 2018 Framework on Enhanced Fund Engagement
on Governance. The diagnostic assessment focused on governance weaknesses and
corruption vulnerabilities in macroeconomically critical priority areas of:
(i) Anti-corruption and anti-money laundering;

(ii) Fiscal governance (e.g., public financial management, revenue administration, oversight of
State Owned Enterprises, natural resource management, and procurement);
(iii) Enforcement of contract and protection of property rights;
(iv) Central bank governance and operations, and
(v) Financial sector oversight.
The GDA revealed serious governance weaknesses and corruption vulnerabilities across
all state functions, but those with particular macroeconomic impact were found to be
present in public financial management (especially in relation to planning and monitoring
of large investment projects), granting and managing contracts in the mining sector,
transparency in public procurement, including adequate monitoring of Politically Exposed
Persons (PEPs), the autonomy of the central bank and effective financial sector oversight
(especially oversight on banks with Government ownership), Beneficial Ownership (BO)
transparency and land management. These weaknesses and vulnerabilities highlight
several themes, including weak transparency and accountability mechanisms in public
service, weak legal frameworks for key institutions and lack of coordination and clarity in
the roles and responsibilities in key governance and anti-corruption functions.
To cure these weaknesses, the GDA report made recommendations which the Government
intends to implement in 2024. Priority Recommendations include the following:
§ Adopt a legal framework that guarantees public access to information;
§ Introduce necessary measures to ensure that top anti-corruption and AML officials such as
Director General of ACC, Director General of DEC, Director General of FIC, DPP are selected and
appointed through transparent, merit-based and participatory processes;
§ Prepare, with the participation of civil society, academia and legal profession, a comprehensive
reform strategy to strengthen the independence, professionalism and efficiency of the
judiciary and prosecution authorities;

§ Operationalize PACRA’s beneficial ownership register, including ensuring the availability of
accurate, complete and up-to-date beneficial ownership information and imposing effective
sanctions on entities for non-compliance;
§ Prepare a time-bound action plan and roll out E-Government Procurement;
§ Mandate the use of the Financial Management Information Systems (FMIS) system for all
transactions currently able to be undertaken through the system;
§ Mandate regular preparation and external publication of tax expenditure reports on measures
expected to result in significant foregone revenue;
§ Increase internal audits in the VAT refund process and customs warehouse management, as
well as in other processes where IT systems are not fully integrated or are unstable;
§ Strengthen the MMMD’s capacity to properly scrutinize license and transfer applications,
and monitor the associated commitments on safety and environment, work programs, and
production;
§ Bring the Public Audit Act of 2016 and the State Audit Commission Act of 2016 into force by
issuing the statutory instrument; and
§ Develop and reinforce supervisory processes for banks and other financial institutions with
Government ownership to address specific risks and challenges associated with these special
entities.
Implementation of these recommendations in 2024 is a positive step towards

entrenching transparency and accountability; identifying governance weaknesses
and corruption vulnerabilities is crucial for addressing these issues effectively.
However, the critical actions will rely on the Government’s capacity to build a robust risk
management framework and ensure compliance across all sectors.
In tandem with the foregoing, the Government’s commitment to ongoing legal, structural,
and policy reforms is noteworthy. These reforms span various areas such as fiscal
policy, domestic resource mobilisation, debt management, decentralisation, public-
private partnerships, and public investment management; and successful reform
actions will support economic growth and development.
However, the critical aspect in this regard is the clarity and specificity of the required
reforms. While mentioning the reform areas is a positive step, it is important to ensure
the presence of well-defined policies to accompany actual implementation. Stakeholder
involvement and consultation are also vital to ensure that the reforms align with and
respond to the country’s specific needs and challenges.

FISCAL POLICY
Governments’ primary fiscal objective is to decrease the budget deficit from 5.8
percent of GDP in 2023 to 4.8 percent in 2024, reflecting a responsible goal focused
on macroeconomic stability and diminishing the need for extensive borrowing. This
will be achieved through efficiency gains in domestic resource mobilisation, emphasising
the need to close tax loopholes, improve tax administration, and combat tax evasion.
There is a revenue collection target set at a minimum of 22.0 percent of GDP, a challenging
but necessary goal, contingent on economic growth, tax policy effectiveness, and
taxpayer compliance. The budget highlights the prioritisation of areas that promote
economic growth, such as infrastructure development, Constituency Development Fund
(CDF), with a keen focus on ensuring efficient and transparent utilisation of allocated
funds. Commitment to continuing social protection programs to safeguard vulnerable
communities is also emphasised. In addition, the introduction of an annual Fiscal Risk
Statement enhances fiscal transparency and budget credibility, while the maintenance
of stable and predictable tax and non-tax policies supports a conducive business
environment. These objectives represent a balanced approach to fiscal management,
provided they are effectively implemented and monitored.
Domestic Resource Mobilisation
Government has emphasised the need to seal revenue leakages and improve service
delivery in tax administration. Leveraging technology and redefining the operating model
for the Zambia Revenue Authority (ZRA) is key in this regard. This is a commendable step
as modernising tax administration can lead to more efficient revenue collection and
reduced opportunities for tax evasion.

The proposed introduction of an electronic invoicing system is an innovative response
to some of the challenges faced by ZRA in dealing with fraud. It not only enhances
transparency but also allows real-time access to business transactions, making
it harder for entities to use counterfeit invoices for VAT refund claims. This can
significantly reduce fraudulent activities and ensure that only eligible entities claim
deductions. However, the Government needs to ensure that the implementation of this
system is smooth and user-friendly. Attendant actions will be awareness raising and
sensitisation campaigns to ensure onboarding by users of the system.
The budget also highlights the potential of the growing digital economy to expand the tax
base. By taxing cross-border electronic services, Government can tap into a new revenue
stream. However, it will be crucial to develop a clear legal framework and effective
strategies for implementing and enforcing this taxation.
Reference was made to international taxation and cooperation as one of the areas of
interest. Joining the Global Forum on Tax Transparency and Exchange of Information
demonstrates Zambia’s commitment to combat tax evasion and illicit financial flows
(IFF). Zambia has been dealing with the issue of IFF and it has been recognised that
the main conduit for illicit financial flows is the use of abusive transfer pricing by
way of multiple and often complex structures to shift profits from normal rate
tax jurisdictions to low or no tax jurisdictions. According to the United Nations
Commission on Africa, Zambia loses 10% of its gross domestic product annually, due
to corporate tax avoidance practices. The Centre for Trade and Policy Development
(CTPD) claims that Zambia accounts for 65% of Africa’s illicit financial flows, of which
80% is through copper. This has a significant negative impact on revenues for the
Republic. Therefore, the move to join the Global Forum will be beneficial as we improve
international collaboration and information sharing, enhancing transparency and tax
compliance. It is expected that this will inform efforts to stem IFF and channel the revenue
to the appropriate income streams.
Lastly, the plan to introduce a unified Tax Administration Act and reward whistle-
blowers is a step towards simplifying tax administration and encouraging citizens to
report tax-related misconduct. However, the success of such initiatives will depend on
effective implementation and safeguards to protect whistle-blowers.

Debt Management
External Debt Restructuring:
Government acknowledges the need to address its external debt burden. Undertaking a
debt restructuring exercise with official creditors under the G20 Common Framework is a
major achievement and provided important impetus for mobilising around the efforts to
unlock the stagnation that had resulted from debt financing. In principle, the agreement
reached with official creditors in June 2023 signified progress in managing the country’s
debt crisis..
Engagement with Commercial Creditors:
Engaging with commercial creditors, including Eurobond holders, to seek debt

treatment comparable to official creditors is a reasonable approach. It demonstrates the
Government’s commitment to treating all creditors fairly and seeking a comprehensive
solution to its debt challenges. However, the success of these negotiations will depend
on the willingness of commercial creditors to cooperate. It is important that Zambia
concludes the discussions with commercial lenders regarding commercial debt as
this will lure financial investments and improve the Country’s credit rating
Focus on Concessional Loans:
Government’s commitment to contracting only concessional loans in the medium term is a

responsible debt management strategy. Concessional loans typically have lower interest
rates and more favourable terms, reducing the burden on the Government and taxpayers.
This approach aligns with the goal of debt sustainability.
Addressing High Interest Rates:
The mention of high interest rates in Government securities market highlights an issue
that affects the cost of borrowing for Government. A progressive reduction of the fiscal
deficit is a prudent step to mitigate this challenge. Additionally, expanding the E-bond
trading platform to include retail investors is a positive move to promote competition and
liquidity in the secondary market, potentially leading to better pricing for Government
securities.

Auction-Based Issuance:
The commitment to issuing Government securities through auctions and avoiding private
placements enhances transparency and fairness in the debt issuance process. Auctions
allow market forces to determine interest rates, contributing to more accurate pricing and
reducing the risk of unfavourable terms for the Government.
Decentralisation
Decentralisation by Devolution: Government’s commitment to fully implementing

decentralisation by devolution in the medium-term is a significant step towards
empowering Local Authorities (Councils) and addressing socio-economic inequalities.
Devolving functions to local authorities can enhance local governance, improve
service delivery, and better address the specific needs of communities. However,
successful implementation will depend on adequate capacity building and resource
allocation.
Devolution of Functions: All eight functions in Phase I have been devolved to local
authorities, with civil servants attached. This is a positive development as it signifies
a transfer of decision-making and service provision closer to the communities. It’s
important to ensure that the devolved functions are managed effectively and efficiently
at the local level.
Zambia Devolution Support Programme: The implementation of the Zambia Devolution

Support Programme focusing on fiscal decentralisation, financial management, local
area planning, governance, and human resource management is a commendable effort.
Strengthening the capacities of local authorities is crucial for them to effectively
manage the devolved functions and resources.
Delegation of Authority: Delegating the authority to approve projects to the Provincial

Administration from the Ministry of Local Government and Rural Development, as well
as empowering Principal Officers in Local Authorities to vary committed funds, can
improve operational efficiency. It streamlines decision-making and allows for more
timely project implementation.

Constituency Development Fund (CDF): The increased allocation towards CDF is a
positive step, as it enables constituencies to address pressing needs, such as water
reticulation and sanitation systems in public amenities and provision of school desks.
However, effective utilisation and monitoring of CDF funds will be essential to ensure that
these investments benefit the intended communities.
Citizen Participation: The commitment to involving the public in defining their

development needs is fundamental to democratic governance. It ensures that
projects and initiatives align with the priorities of the communities they serve. This is,
however,dependent on how much information is shared with the public and brings the
conversation back to the need to expedite the Access to Information Bill.
Review of Relevant Legislation: Government’s intention to review the Constituency

Development Fund Act, 2018, and the Public Procurement Act, 2020, to strengthen
citizen participation and streamline procurement processes is a positive move.
Transparent and efficient procurement processes are essential for the successful
implementation of development projects.
Population & Development
There is a clear emphasis by the Government on the importance of integrating population-

related factors into the country’s development planning. Government plans to achieve this
by conducting subnational analyses and carrying capacity assessments for all districts
and constituencies. These assessments will serve multiple purposes, including the
identification of poverty levels and living conditions at the constituency level. By doing so,
the Government aims to design more precise interventions that target poverty reduction
and inequality reduction.
Furthermore, the mention of conducting carrying capacity assessments for districts

and constituencies highlights the Government’s commitment to ensuring effective
and efficient delivery of public services. These assessments will help determine the
readiness and capacity of each region to provide essential public services, allowing for
more strategic allocation of resources based on specific district needs.

A critical aspect addressed in this year’s budget is the alarming increase in the poverty
rate, which rose to 60 percent in 2022 from 54.4 percent in 2015, according to the Living
Conditions Monitoring Survey. The Government acknowledges this challenge and has
outlined its strategies in alignment with the Eighth National Development Plan. These
strategies are aimed at unlocking economic potential, boosting economic growth,
and increasing household income. Government recognises that sustainable poverty
reduction hinges on enhancing overall economic prosperity..
Integrated National Registration Information System
The Government’s initiation of the Integrated National Registration Information System

(INRIS) represents a commendable effort to address the limitations associated with
manual national identity documents. A Complete Civil Registration and Vital Statistics
(CRVS) system that reflects international standards has been the Government’s aim; the
National CRVS Policy (2022) lays the foundation for interventions to ensure that the use of
technology is applied to national identity documents. The move towards biometric identity
within INRIS is a significant step in modernising and securing our national identification
system. The inclusion of biometric data, including fingerprints and facial recognition,
offers a more robust and secure means of verifying individuals’ identities, far superior
to the conventional paper-based identity cards.
One of the key advantages of the INRIS system is to eliminate duplicate National
Registration Cards (NRCs). Duplicate identity cards have led to severe issues like
identity theft, fraud, and misuse of public services. By utilising biometric data
and a centralised database, the Government will exercise better control and take
effective preventive measures against such problems. This will be most appreciated
when applied to national activities such as voter registration where duplicate national
registration cards have been used in electoral malpractice.
Streamlining access to services such as registering for a SIM card or opening a bank
account or accessing one’s pension account through the use of biometric identity
from INRIS is expected to enhance efficiency while reducing the administrative burden
on individuals. Furthermore, it has the potential to significantly reduce fraudulent
activities within these sectors.

Biometric authentication is notoriously difficult to forge, offering an additional layer of
security in financial and other transactions. Overall, the INRIS system holds promise for
modernising our national identity infrastructure and enhancing security and efficiency
in various sectors.
The mention of eliminating costly silo approaches to service delivery is noteworthy.

The integration of various Government systems and databases can lead to cost savings,
improved data accuracy, and better coordination among Government agencies.
This, in turn, can result in more efficient service delivery and reduced administrative
redundancies.
Monetary Policy
Inflation and Its Impact: Inflation lowers the purchasing value of money, making it
harder for low-income people to buy basic essentials. It also disrupts planning, boosts
borrowing rates, and discourages investment, which can hinder economic progress.
Inflation Targeting: The Bank of Zambia targets 6-8 percent inflation. Inflation targets
are standard in modern monetary policy. It guides policy and gives businesses and
consumers transparency and predictability critical for the economy.
Monetary Policy Tools: A key tool for achieving the inflation target is the monetary
policy rate. The economy’s money supply is frequently affected by this rate. A higher
rate raises borrowing costs and slows spending, lowering inflation. Lower rates boost
economic activity.
Challenges of Addressing Food Inflation: The rise in food costs makes it difficult to
address inflation with standard monetary policy measures. Food inflation depends on
the weather, crop harvests, and global commodity prices, thus this is important. To
combat food inflation, monetary and fiscal policies may be needed as well as efforts to
boost agricultural productivity and food security.
Supply-Side Interventions: Overcoming food inflation requires increasing food supply.

Policies to assist agriculture, increase distribution, and reduce post-harvest losses are
possible. Stabilising prices and making food affordable requires supply-side initiatives.

Financial Sector Policy and Financial Inclusion
Some of the key elements of Zambia’s financial sector policy for 2024 encompass various
aspects of financial governance and economic development. The establishment of
the Financial Stability Committee, as outlined in the Bank of Zambia Act, signifies the
Government’s commitment to maintaining financial system stability, which is crucial
for economic growth and investor confidence. Additionally, the decision to review the
Banking and Financial Services Act in 2024 is a positive step, despite the absence of
specific details, raising questions about the scope and objectives of the review.
Acknowledging the issue of high borrowing costs and expecting yield rates on Government
securities to fall demonstrates the Government’s efforts to stimulate economic activity by
making credit more accessible to businesses and individuals. Furthermore, recognising
the importance of financial inclusion and the rapid expansion of mobile money services
is commendable. However, addressing challenges related to internet connectivity,
especially in rural areas, is essential to ensure a broader segment of the population can
access financial services.
Lastly, the emphasis on financial literacy as a key constraint to financial inclusion is valid.
Initiatives like the “Go Cashless” Awareness Campaign and the forthcoming National
Financial Inclusion Strategy aims to enhance financial literacy and promote the use
of formal financial services. While the broad objectives of Zambia’s financial sector
policy are laudable, providing more specific details regarding regulatory changes and
implementation strategies would enhance transparency and accountability within the
financial sector.

External Sector Policy
The Financial Stability Committee, established in the Bank of Zambia Act, shows the
Government’s commitment to financial system stability, which is essential for economic
growth and investor trust. The 2024 Banking and Financial Services Act review is a good
idea, but it lacks details, raising uncertainties about its scope and goals.
Accepting high borrowing costs and expecting Government securities yields to fall shows
the Government’s efforts to boost economic activity by making credit more accessible
to firms and individuals. Furthermore, acknowledging financial inclusion and mobile
money’s quick growth is laudable. Addressing internet connectivity issues, especially in
rural regions, is crucial to expanding financial services to more people.
Financial literacy as a barrier to financial inclusion is valid. Financial literacy and formal
financial services are promoted by the “Go Cashless” Awareness Campaign and the
future National Financial Inclusion Strategy. Zambia’s financial sector strategy has
good goals, but more clear regulatory adjustments and execution techniques would
improve transparency and accountability.
CONCLUSION
The 2024 National Budget, titled “Unlocking Economic Potential,” was introduced to
promote economic growth, stimulate private sector investments, enhance production and
productivity, and improve public service delivery. Similar to the previous budget, the 2024
budget aligns with four main thematic areas: Economic Transformation and Job Creation,
Human and Social Development, Environmental Sustainability, and Good Governance.
Within these themes, the Minister highlighted accomplishments from the past two years
and identified ongoing challenges. The Budget underscores the Government’s steadfast
commitment to unlocking the economy, improving people’s livelihoods, and fostering a
favourable business environment to encourage increased private sector collaboration.
The 2024 National Budget has an increased resource allocation to key economic sectors,
including agriculture, mining, manufacturing, and tourism, signaling Government’s
concerted efforts to stimulate growth and development in these crucial sectors.

PMRC commends the Minister for acknowledging the numerous challenges the
Government must address in order to unleash the Country’s economic potential. He
reaffirmed the Government’s dedication to tackling these issues directly and emphasized
the importance of hard work, perseverance, and discipline in this endeavour. These
measures present the aspirations outlined in the 2024 National Budget, while the budget
performance for last two years signals positive economic development prospects. The
2022 and 2023 national budgets demonstrated budget credibilty through the continous
efforts of reducing fiscal deficits.

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2024 NATIONAL

ANALYSIS October 2023

i | PMRC National Budget Analysis 2024

PMRC National Budget Analysis 2024 | ii

1 | PMRC National Budget Analysis 2024

PMRC National Budget Analysis 2024 | 2

Figure 1: Projected global growth rates (2022, 2023 and 2024)

Source: PMRC adapted from IMF and 2024 budget speech

Figure 2: Global commodity prices (USD)

3 | PMRC National Budget Analysis 2024

Table 1: Statistics of macroeconomic variables from 2021 to 2023

Domestic Growth Fiscal Deficit

2021 4.60 8.10 2.8 Billion (above 3 months of import cover)

2022 5.20 8.90 3.0 Billion (above 3 months of import cover)

2023 2.70 5.8 2.9 Billion (above 3 months of import cover)

Source: African Development Bank (AfDB) and Budget speeches

Figure 3: Trends in inflation from 2021 to 2023

Source: PMRC adapted from Zambia Statistics Agency

PMRC National Budget Analysis 2024 | 4

2024 MACROECONOMIC OBJECTIVES

5 | PMRC National Budget Analysis 2024

Macroeconomic 2022 2023 2024

2023 BUDGET PERFORMANCE

PMRC National Budget Analysis 2024 | 6

Financial Sector Performance

External Sector Performance

7 | PMRC National Budget Analysis 2024

Source 2024 Budget 2023 Budget 2022 Budget

Grants 3.44 2 1.71 1 1.82 0.78

PMRC National Budget Analysis 2024 | 8

2024 Budget as 2023 Budget as Share 2022 Budget as

Domestic Revenue 22 20.9 21.2

Domestic Financing 2.5 2.9 5.2

Foreign Financing 2.7 7.3 10.41

Grants 0.6 0.3 0.29

Total 27.8 31.4 37.1

Foreign Financing 2.7%

Domestic Financing 2.5%

Domestic Revenue 22%

0% 5% 10% 15% 20% 25%

Source: National Budget Speeches

2024 EXPENDITURES ESTIMATES BY FUNCTION

Functions 2024 Budget 2023 Budget 2022 Budget

Amount (K) % of Budget Amount (K) % of Budget Amount (K) % of Budget

Public Order and

9 | PMRC National Budget Analysis 2024

Health 20.91 Billion 11.8 17.40 Billion 10.4 13.9 Billion 8

Source: 2022, 2023 and 2024 Annual National Budget Speeches

Figure 7: Trend Analysis of Expenditure by Functions (2022, 2023 and 2024)

K58.93 Billion (33.1%)

K9.92 Billion (5.6%) K1.45 Billion (0.8%)

Source: 2022, 2023 and 2024 Annual National Budget Speeches

PMRC National Budget Analysis 2024 | 10

International 2024 National 2023 National 2022 National

Education 20 15.4 13.9 10.4 X

Health 15 11.8 10.4 8 X

Social Protection 3.5 5.4 4.9 3.6 ✓

Water and 1 to 3 1.1 1.5 1.4 ✓

2024 2023 2022