Two years after assuming office, the Government has made some positive steps towards meeting its campaign promises, most notably through the increase in minimum wages in 2012, above inflation annual increases to the minimum tax threshold, the creation of new jobs and the initiation of infrastructure development projects.
Whilst a significant budget deficit has arisen this year due to unplanned expenditure the Government has announced tough decisions to reduce the fiscal deficit in the 2014 Budget. It is essential that this course is held in the years leading up to the next general election.
While the Government’s proposed diversification and development infrastructure plans are commendable, it would appear there are constraints and challenges in implementing these projects in a prudent and effective manner. Echoing the sentiments of international agencies, the Government needs to strengthen its capacity to appraise, monitor and deliver on projects.
Overall, in our view the outlook for the Zambian economy remains positive and there is no reason why, with appropriate management, the challenges the Government faces cannot be overcome.