Zambia To Increase Agro Subsidies.
MINISTER of Finance Felix Mutati says Government will maintain and increase subsidies related to the agriculture sector as it is projected to become the anchor of the country’s economy.
In an interview on Tuesday, Mr Mutati, however, could not divulge more details as he is expected to announce the 2017 budget today.
He said economic diversification away from mineral production can be attained by directing efforts to priority sectors such as agriculture that have potential for job creation and poverty reduction due to their labourintensive nature.
Mr Mutati said there is need for Government’s policy and facilitative role in developing the agriculture sector since 60 percent of the population derives its livelihood from the sector.
The agriculture sector has strong linkages with other sectors of the economy, mainly manufacturing in the form of the agro- processing and transport sectors.
“ Government will endeavour to implement policies that are supportive to private sector growth. Key will be addressing energy deficit, addressing logistics to facilitate the flow of goods, unlocking liquidity and ensuring predictable and consistent policies.
“ In removing subsidies, Government is not going to tamper with those related to agriculture. We will maintain agricultural subsidies and even increase them. The only structural adjustment we are undertaking in this regard is to introduce efficiencies and cut administrative costs related to logistics by moving to electronic voucher. Government will also implement efforts to de- risk lending to agriculture within medium term,” he said.
Recently, in a ministerial statement to Parliament, Mr Mutati outlined five pillars expected to assist in Zambia’s economic recovery.
The first plan will involve strengthening of the tax policy and administration to improve revenue in- flows and to shift public expenditure back to affordable levels while the second one will focus on increased budgetary allocation to social protection, including addressing the plight of pensioners.
Others are those aimed at improving economic and fiscal governance, and that will ensure adherence to expenditure plans and improvement of the quality of Government’s spending, and also focus on greater economic stability and market confidence.