03 October 2019

Analytical Brief on the 2020 Social Sector budget in Zambia

The social sectors are the backbone of society and the engine for human capital development. The Government of Zambia has shown its commitment to the social sectors in the 2020 budget, in spite of the challenging fiscal conditions and downward trend in economic growth forecasts. In a quest to address high levels of vulnerability among the poor, the Government has been implementing several programmes in support of social protection, including the Social Cash Transfer scheme (SCT), the Food Security Pack (FSP) and Public Welfare Assistance (PWA). The SCT programme has been subject to a further budgetary allocation increase in 2020. Overall, the social protection and water and sanitation budgets have increased nominally by 18% and 32% respectively. However, both functions suffered from partial budgetary execution performance in 2019 and spending against allocated budgets in 2020 will be key. Enactment of the Planning and Budgeting Act is directly linked to the overall credibility of the budget and its in-year execution. Zambia continues to make significant progress in the health sector. Ambitious policy reforms and investment particularly in health infrastructure and human resources for health have yielded considerable improvements in the health outcomes of women and children as evidenced in the indicators released in the 2018 Demographic and Health Survey. Although allocations to the health sector increased by 16% in nominal terms, as a share of the total budget it has reduced from 9.3% to 8.8%, falling short of the National Health Strategic Plan (NHSP) target of 13% annually and below the 15% Abuja Declaration target. To sustain the gains made thus far, there will be a need for the introduction and implementation of innovative health financing modalities to increase domestic resources for health, and to sustain health security and the supply chain. The education budget nominally reduced from K13.2 billion in 2019 to K13.1 billion. As a share of the total budget, the education budget represents 12% of the total budget compared to 15% in 2019. The international benchmark for education spending is 20% of total government expenditure. These reductions risk compromising the education sector’s ambitions to enhance access and improve the quality of education in 2020. The allocations towards water and sanitation have increased but allocations remain skewed towards urban areas where access is already relatively high thus risking leaving behind rural populations in access to quality water and sanitation services. By leveraging more private sector funding through public-private partnerships, the Government could potentially fund critical water investments and services in rural areas.