adminyear, Finance Minister Alexander Chikwanda told parliament last Friday.
His 27 trillion kwacha (US$5,4 billion) budget for next year calls for increases in education and health spending, to be financed via a US$500 million bond issue and a doubling of copper royalties to six percent.
“The specific macroeconomic objectives in 2012 will be to achieve real gross domestic product growth of above 7,0 percent, attain end-year inflation of no more than 7,0 percent,” Chikwanda said.
The 2012 budget will amount to 26,5 percent of the country’s GDP, against 21 percent this year, he added.
Chikwanda took office under new President Michael Sata, who won elections in a September with promises to harness the mineral wealth of Africa’s largest copper producer in order to benefit the poor.
His Patriotic Front campaigned on a promise to raise mining taxes, an idea, which the International Monetary Fund has supported in recent years.
Sata also promised new rules to govern mining exports amid criticism that the government had little reliable data on how much the country was actually selling.
“The continued targeting of single-digit inflation via money supply targeting is
encouraging and will reinforce expectations of macroeconomic stability,” said Razia Khan, head of Africa research for Standard Chartered Bank.
“We view this positively. Even though the budget outlined slightly more spending than had been anticipated, it’s still taking place against a backdrop of increased revenue collection and an effort to raise more meaningful receipts from previously undertaxed sectors of the economy,” she said.
The government’s economic forecasts are in line with analysts’ expectations but much will depend on the global economy and whether copper prices will take a hit, she added. – AFP.
Online Reporter