ZAMBIA: 2023 NATIONAL BUDGET AIMS TO STIMULATE ECONOMIC GROWTH
Amid a global environment with multiple shocks, high volatility, uncertainty and economic disruptions stemming from the pandemic and the Russia-Ukraine war, Zambia looks like an oasis of relative economic prosperity. On 30 September, Minister of Finance and National Planning, Dr Situmbeko Musokotwane (Minister), unveiled the Government’s Budget for 2023 (Budget), which was broadly in line with the previous one.
Zambia anticipates spending ZMW167.3 billion next year, which is equivalent to 31.4% of the country’s gross domestic product (GDP), trailing the 2022 Budget, which equalled 37.1% of GDP forecast for that year. However, in US dollar (USD) terms, this marks a marginal increase of about 3%. The perceived decrease in Kwacha terms is attributed to a 5.2% appreciation of the country’s base currency against the greenback on a year-to-date basis.
The Budget, themed ‘stimulating economic growth for improved livelihoods’, comes at a time when the country has made significant strides in restoring debt sustainability in the form of a USD 1.4 billion International Monetary Fund (IMF) three-year extended credit facility.
The Budget sets an ambitious real GDP growth target of above 4% and proposes several changes to tax legislation as well as other legislative changes relevant to doing business in Zambia, which are likely to come into effect soon.
Members of our Corporate Practice give their views on some of the business and tax changes, including measures aimed at:
- Reforming the mining tax regime;
- Targeting manufacturing to stimulate growth and value addition;
- Squaring property transfer tax legislation;
- Re-emphasising public-private partnerships;
- Considering green finance mechanisms;
- Relooking the gaming, betting and lotteries industry; and
- Increasing the uptake of insurance services.