Policy control measures will be implemented in the execution of the budget to avoid the deficit in 2016, says Ministry of Finance Economic Management and Finance permanent secretary Ronald Simwinga.

He said once Government observed that the budget was not being implemented as planned, it would enforce expenditure controls as used in the Western world to avoid a deficit.

“Government is considering that aspect of imposing policy control measures on the budget especially if we see that the budget is not going as approved. This was backed up by the presidential pronouncements last year,” Dr Simwinga said.

He said such measures which were usually not used in Zambia had the capacity to prevent a budget deficit.

“This works in such a way that you impose some policies on the budget itself particularly on the expenditure side where you can do away with subsidies,” Dr Simwinga said.

He said Government was aware of the need to adjust the budget expenditure to prevent revenues from declining.

“A budget is a very simple accounting identity, on one side we have the revenues on the others side we have the expenditures and normally the revenues and expenditures do not match,” Dr Simwinga said.

He said Government had an option of either increasing the financing and borrow to maintain expenditures.

“There is also a third aspect which is not usually used in this country but I have seen it used in the western world. This can enable you come up with cost reflective tariffs and stop subsidising on fuel , those are also structural measures that maybe lacking to ensure we do not spend more than prepared in the budget,” Dr Simwinga said.

He also said Government would follow measure announced by the President in dealing with cost reflective tariffs that would also help in avoiding a budget deficit.

“All those measures are meant to cut the budget deficit, we do not get there in one day, you start and process towards what you need to ensure that the position you come up with does not come with adverse effect,” Dr Simwinga said.

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