LUSAKA, Oct. 20 (Xinhua) -- The Zambian government on Thursday officially launched an economic recovery program that will drive the country's growth in the wake of constrained growth in 2015 and 2016.
Minister of Finance Felix Mutati said in a state of the economy address in parliament that the government was aware that the economic glitches facing the country were hitting "the pockets of families" hence the decision to launch the recovery program.
"To shorten the challenging period for our people, the government is determined to embark on emergency measures to start addressing the economic imbalances through a home grown economic recovery program," he said.
The minister said the program provides the country with solutions to the challenges being faced, adding that the government will seek external support as a supplementary measure.
The program comprises of five pillars, which include strengthening tax policy and administration to improve revenue inflows and to shift public expenditure to affordable levels.
This will also involve reallocating subsidies that have grown to over 1 billion U.S. dollars this year from 600 million dollars last year, with the saved money expected to be channeled in more productive areas.
The second pillar involves increasing budgetary allocation to social protection in order to ameliorate the negative effects that will arise out of the removal of subsidies on fuel, electricity and agricultural inputs, while the third pillar will involve improving economic and fiscal government in order to strengthen regulations and laws on abusers of public resources.
The fourth pillar will deal with better planning and adherence to expenditure plans and improvement of the quality of government spending.
The fifth one was aimed at providing the government with greater economic stability, which will be a panacea for economic growth and job creation. Under the pillar, the government will also put in place measures to unlock growth by targeting investment in sectors with binding constraints to growth.
According to the minister, the economic recovery plan will require strong domestic and external collaboration, adding that the government will welcome the financial and technical support of the International Monetary Fund (IMF).
He said the discussion with the IMF was beyond getting financing but inducing confidence and cooperation of external benefactors such as the investor community and cooperating partners.
The Zambian economy has constrained in the last two years, growing around three percent last year while projections this year is slightly above three percent, which is far below the seven percent levels required to reduce poverty.
On the other hand, the value of the country's exports has declined due to falling global commodity prices, resulting in a trade deficit.
The trade deficit has put pressure on the country's international reserves, which have declined to 2.3 billion dollars.
