JCTR - Basic Needs Basket; March 2002 Press Statement

6 MARCH 2002

THE 2002 NATIONAL BUDGET: BASIC NEEDS AND THE POOR

The 2002 National Budget presented by the Minister of Finance and National Planning has been applauded as one of the best National Budgets Zambia has ever had. This judgment is essentially based on what the Budget has set out to achieve. The realization in concrete terms of what the Budget has set out to achieve is the greatest challenge that lies ahead, observes the Jesuit Centre for Theological Reflection (JCTR).

''Particularly important is whether or not the Budget proposals will enable the majority Zambians, especially the poor to have food to eat,'' this says Muweme Muweme Coordinator of the Economic Development Research Project of the JCTR, ''is in our view one of the key criteria for judging how 'good or 'bad' the Budget is.

The JCTR Basic Needs Basket which estimates cost of living in Lusaka urban for a family of six -- through taking into account costs for food such as mealie meal, beans, dry fish, meat, etc., and non-food essentials such as housing, charcoal, electricity, water, etc -- is now costing K823,510. This is down by K5,740 from the January figure of K829,250.

The proposed K150,000 tax exemption in this year's Budget fall far below meeting only food costs. ''Instead of continuously strangling or incapacitating those in the formal sector in terms of meeting their food and non-food essential requirements for their welfare, government should move quickly with its plans of broadening the tax base, whose concern has been raised several times. Moreover, the proposed blanket taxation of 30 percent will hurt even more those who are earning just above the tax exempt threshold,'' says Muweme.

In hindsight, particularly looking at the year 2001, we see that Zambia recorded economic growth of 5.2 per cent. To this growth, the agricultural sector's contribution has been minimal at 2.6 percent, though this figure is higher by one percent over the 2000 figure. What does this situation tell us in relation to welfare of the people?

First, the economic growth (5.2%) experience of the year 2001 seems to strength the common view that economic growth does not necessarily lead to improvement in the lives of the people, particularly the poor.

The second lesson we can draw is that if agriculture been a significant source of growth during the year 2001, living conditions would not have been the way they are currently. We may have seen some improvement in living conditions through availability of food for both the rural and urban poor.

It is thus vividly clear that without improvements in the agricultural sector in this country, there will be less real progress in improving the welfare of the majority of the people.

The attention given to agriculture in this year's National Budget, which has been an incessant call by JCTR, is encouraging. It is JCTR's hope that the Budgetary allocation to this sector, including other measures that government has announced will translate into real action leading to improvement of lives of the poor.

Muweme further says that ''ultimately one of the all-time criteria for judging any budget or indeed economic policy is what it does in real or concrete terms in making available food, clean water, education, housing, health, the essentials of human welfare.'' It is important that any Budget currently and in future move away from being perceived as something which ''might'' happen in terms of delivering to something that realistically happens.

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