BUDGET SPEECH PRESENTED BY THE CHAIRPERSON OF THE FINANCE,VALUATION AND COMMERCIAL UNDERTAKING COMMITTEE COUNCILLOR PATRICK MWANSA TO THE SPECIAL COUNCIL MEETING HELD IN THE COUNCIL CHAMBER AT CIVIC CENTRE ON TUESDAY,6TH DECEMBER, 2016 AT 08:30HOURS
In accordance with Section 39 of the Local Government ACT CAP, 281 of the Laws of Zambia, Councils are required to prepare revenue and expenditure estimates and submit the same to the Minister of Local Government and Housing for approval each year.
In conforming to this requirement, the Finance, Valuation and Commercial Undertaking Committee Meeting was held on Monday 28thNOVEMBER, 2016 to approve the 2017 budget.
It is my privilege and honor to present the 2017 budget for consideration and adoption by the special council meeting.
REVIEW OF 2016 BUDGET
Members may wish to note that the 2016 budget was approved on 16th November 2015 under minute number C/125/11/15 with a total budget figure of K359.7Million representing 11% increase from the 2015 budget. I wish to report that Lusaka City Council had anticipated collecting K299.75 Million as at 31st October, 2016 however, a total of K180.94 Million was received/ collected representing 60% collection efficiency.
K148.84 Million was collected from internally generated revenues representing 82.2% of the Actual budget as 31st October, 2016 and 17.8% as GRZ support.
I further wish to report for the information of the Council that, expenditure is depended on the income received by Council. Therefore the level of income determines the level of expenditure.
Actual amount spent is 97% of the budgeted amount of K97.6 Million. The actual spent is slightly below the expected because Council is not up to date with remitting statutory deductions.
Currently Government grants the Council K3.5 Million Equalization Fund which is broken down as follows:
Personal Emoluments 80% K2, 800,000.00
Capital Expenditure 20% K700, 000.00
The Council’s total monthly wage bill currently stands at K12 Million. This means therefore that, the balance of K9, 200,000.00 has to be financed by Council internally generated funds in each month.
Actual spent is 45% of the budgeted amount of K1.3 Million.
Actual spent on Ward Projects is K4.25 Million against a budgeted amount of K8.31 Million translating into 51%. This represents 2.52% of the expected expenditure.
Ward development fund accounts for 5% of the locally generated funds.
Actual spent is K7.3Million against a budgeted amount of K28.66 Million translating into 26%. Capital expenditure has accounted for 4.4 % of the total expenditure.
Actual spent is K34.6 Million against a budgeted amount of K106.4 Million translating into 33%. Service Provision has accounted for 20.5% of the total expenditure.
Actual spent is K3.95 Million against a budgeted amount of K8.16 Million translating into 48%. Constituency Development Funds for 2015 and 2016 have not yet been received. Members may wish to Note that the 2016 expenditure reflected above is for 2013 & 2014 allocations and all unspent funds for CDF have since been mopped by the Ministry of Finance (MOF).
EXPECTED PERFORMANCE TO 31st DECEMBER, 2016
Council projects to collect K234.7M (65%) inclusive of national support ofK42M and to spend K210.7M of the total budget to 31ST December, 2016.
BUDGET ESTIMATE 2017 -2019
It is assumed that general inflation of goods and services for the next 3 years will be as follows (as guided by budget office – (Ministry of Finance)
These rates have been used in coming up with the budget estimates for the next 3 years.
- Attain overall collection efficiency of 85%, compared to the target for Local Authorities of 75%
- Attain 40% service provision target
- Automate all revenue sources to reduce human contact in line with e-governance
- Finance infrastructure and capital assets to improve efficiency
- Improve customer care and support through training
- Improve budget tracking and monitoring
- Prioritize and Control expenditure on key council programs
The Committee proposes a budget of K372.2M as income and expenditure in 2017 representing an increase of 3.75%compared to 2016 budget estimates. A total of K319.5M will be raised internally while K52.7M will come in as government support / grant.
Though GRZ funding has declined by 10% from K67M to K60M, The Committee approved adebt recovery plan to support the 2017 budget. The plan outlines measures that will result in the recovery of already billed but not collected revenues amounting to K34M for 2017. See attached debt recovery plan
UPWARD INCREASE OF FEES AND CHARGES
Attached is a schedule of the proposed increase in fees and charges to support the 2017 budget. The committee approved the proposed adjustments in fees and charges.
The Lusaka City Council anticipates increasing service provision spending in the year 2017. Service provision for the year 2017 has been provided for at K150 Million representing 40% of the total Council budget as per guideline and is inclusive of the Ward Development Fund K11.9 Million comprising of K8.7 Million for projects, K1.0 Million for waste collections, K0.5 Million for stakeholders meeting, stationery etc., Monitoring and evaluation, K0.5 Million for Youth related activities and K 0.5 Million for HIV and AIDS activities and K0.5 million for Gender Activities. Capital projects of K26.2 Million and Constituency Development Funds at K9.8 Million.
I THEREFORE PRESENT THE 2017 BUDGET FOR CONSIDERATION AND ADOPTION BY THE COUNCIL.