AFDB Cautions State On Fisp

THE African Development Bank (AfDB) has cautioned Government against over spending on Farmer Input Support Programme (FISP) and maize purchases to minimise Budget overruns.

AfDB said Government should monitor spending on FISP and grain purchases for strategic reserves to avoid Budget overruns.

In a quarterly overview and analysis on Zambia, published in Centurion, South Africa, AfDB said in the past years, costs for the FISP and the purchase of maize for the strategic grain reserves had overrun the Budget.

The 2013 end-of-year Budget deficit reached 8.5 per cent of the Gross Domestic Product (GDP), exceeding the planned deficit of 4.3 per cent of the GDP.

“The 2014, Zambia’s Budget deficit is targeted at 6.6 per cent of the GDP. In the past years the cost for the FISP and the purchase of maize for strategic reserves have overrun the Budget and it will be important to monitor spending on these items,” AfDB said.

AfDB stressed that there will be need for Government to strengthen Budget control to avoid similar Budget overruns as recorded in the previous years.

The statement also highlighted that according to the “2014 Doing Business Report” by the World Bank, Zambia’s overall business environment improved significantly in the last quarter of 2013.

Zambia moved up seven places in the ranking to 83rd position, globally and is the 7th highest in Africa and within the Southern African region, only Botswana and South Africa are doing better than Zambia.

“This is mainly attributed to improvements in starting a business, resolving insolvency issues and obtaining credit,” said AfDB.

Credit rating agency, Moody’s Investors Service, in their affirmation of Zambia’s economic outlook as stable, also noted that rising fiscal deficits driven by over spending were deterrents to economic stability.

Moody’s anticipated that these deficits were likely to remain high unless Government cut spending on wage increases and roads.

Source : The Times of Zambia

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