Former Commerce Minister, Felix Mutati has predicted that the 2016 national budget will be expansionary than developmental.
Mr. Mutati says his predication is based on President Edgar Lungu’s speech to Parliament which indicated that government will be spending more in 2016.
He has told Qfm News in an interview that President Lungu’s speech also gives him an impression that next year’s national budget will be very heavy on borrowings.
Mr. Mutati who is also Lunte Member of Parliament states that this is particularly that President Lungu’s speech to Parliament does not give comfort that efforts are being made to expand the revenue side of the national budget.
He notes that this is given the fact that the President’s speech did not talk about anything to do with tax reforms.
Mr. Mutati has forewarned that this implies that the year 2016 is going to be a lot harder than 2015 has been.
He says this also means that government needs to start responding to what the Bank of Zambia has indicated that the country’s balance of payment is at its lowest and therefore it can no longer afford to support interventions in the economy through the banking system.
Mr Mutati notes that if the Central Bank’s current account is in deficits it means that Zambia’s ability to create reserves is eroded.
Mr. Mutati has since noted the need for government to start capping up the expenditure side of the budget and minimize deficits.