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Friday, 10 October 2014

Zambia Budget 2015

Finance Minister Alexander Chikwanda delivered the Budget Statement 2015 earlier today. I have read through it but not fully process it. Everything in the Budget was leaked to the Post newspaper. There are no surprises in that sense. In short it a budget short of new things - the word "continue" seems to be all over it. However it does contain important proposals relation to the mining fiscal regime and ZCCM-IH. More discussion on the proposals in due course. 

Chola Mukanga
Economist | Researcher
Copyright © Zambian Economist 2014


  1. The 2015 budget is better than the 2014 one because although both are developmental the 2015 has a more easier to manage fiscal deficit than the 2014.The fiscal deficit for 2014 will be about 5.5 % of Gdp while that for 2015 is projected at 4.4 %. The most impressive provision is that the tax regime for mines has shifted from the traditional accounting based to a self adjusting revenue based. This does away with calls to re - introduce windfall taxes because more taxes will be Payable by the mines whenever there is an increase in production, price of copper or both. This means that the country will get an additional $ 300 million In taxes which is 1 % of Gdp and this explains the reduction in the fiscal deficit from 5.5 % of Gdp in 2014 to 4.4 % in 2015.

  2. Sadly Tonny this is incorrect. It will result in mine closures and an end to investor interest in Zambia. In short:

    1. Closure of mines which were marginal under the previous tax regime.
    2. Curtailment of capital investment in new mines and expansions of existing operations.
    3. Reduction in capital investment in ongoing operations.
    4. Reduction in mine life of existing operations.
    5. Collapse of mineral exploration resulting in no new projects to replace depleting resources.
    6. Reduction in mining labour force.

    I'm not convinced this is what ABC intended. But that's what he will get.

    Fred M


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