Rise in poverty reduction spending, but workers protest wage freeze

Spending by the Zambian government on poverty reduction programmes has increased by almost US $22 million this year - an amout described as "modest" by the International Monetary Fund (IMF), given the scale of the country's problems. "Increasing the spending on poverty reduction programmes from 1.5 percent last year to two percent of the GDP (Gross Domestic Product) is a modest improvement. We hope that more funds can be allocated in the future," IMF's resident representative in Zambia, Joseph Kakoza, told IRIN: According to the new budget released last Friday, spending on poverty reduction programmes is slated to rise from $88.6 million in 2003 to $109.5 million for 2004. Zambia's key social indicators are among the worst in Africa. According to the UN Children's Fund (UNICEF), life expectancy fell from 54 years in 1990 to approximately 39 years in 1999. In the same period, infant mortality rates increased from 108 to 112, and among under-fives from 191 to 202, per 1000 live births. About 32,000 HIV-positive children are born in Zambia every year and most do not live to their fifth birthday, while malaria kills 40,000 children below the age of five annually. UNICEF estimates that 80 percent of the preventable diseases in Zambia are related to "poor environmental sanitation". In his budget speech the Minister of Finance and National Planning, Ng'andu Magande, remarked that Zambia's external debt continues to be "unsustainable". Last year the country spent $113.1 million in servicing the debt, which stands at $6.5 billion. Zambia has qualified for the Highly Indebted Poor Countries (HIPC) debt-relief programme of the IMF and World Bank. But the country was unable to reach its HIPC completion point in December 2003 - which would have slashed debt repayments - due to a budget overrun. Zambia still has chance of reaching its HIPC goal by June 2004 and, should it do so, will benefit from a reduction of $3.8 billion in its external debt. Despite a commitment to controlling expenditure, in line with IMF demands, Magande announced an allocation of more than $600,000 for a Roll Back Malaria programme, almost $1 million for child health schemes, and $4 million for water supply and sanitation initiatives. Gregory Chikwana, assistant coordinator of the Civil Society for Poverty Reduction, welcomed the fact that the funds for poverty relief were for the "first time being sourced internally, so we know how much money we have in our hands for the programmes - in the past we have had to wait for the money promised by donors to materialise." The IMF's Kakoza noted that, on paper, the Zambian budget did seem to "focus on the re-estbalishment of fiscal discipline, and on the need to reduce fiscal debt. I am cautiously optimistic, because the difficulty always lies in the implementation." However, the budget's focus on meeting the HIPC completion point has attracted criticism from civic bodies, such as the Jesuit Centre for Theological Reflection (JCTR), who feel that the government should also be responding to other needs, such as employment creation. Muweme Muweme, coordinator of the JCTR's Social Conditions Research Project, commented: "While it is highly important that Zambia attains the HIPC completion point, we should not forget that in the process of instituting austerity measures to achieve that objective, some sectors of the population might be impacted upon negatively." Among the austerity measures which have not proved popular, said political analyst Fred Mutesa, was a wage freeze for state employees, and higher income taxes. Zambia has about 495,000 workers, who will shoulder the burden of the up to 40 percent hike in income tax. Industrial action against the budget is already looming. Workers are expected to hold a countrywide strike next Wednesday to protest against the wage freeze and increased income tax. Sylvester Tembo, secretary-general of the Zambia Congress of Trade Unions (ZCTU), told IRIN: "How can the government expect 400,000 workers to shoulder the burden of 10 million Zambians - why tax us only? What is the point in building more clinics and schools when they will not have any doctors or teachers?" The government has argued that although income tax was higher, the tax threshold had been raised, so that workers earning less than $54.73 a month would pay no tax. The take-home salary of a security guard, for example, ranges between $8.42 and $37.89 per month. However, according to the JCTR's monthly calculation of a basic needs basket, the average family in January needed $224.40 to cover household expences.