BUUMBA CHIMBULU writes
ZAMBIA needs to adopt stress testing factors of economic variables such as investing in data mining tools to attain realistic targets for the 2021 National Budget.
Finance Minister, Bwalya Ng’andu, is expected to announce the 2021 national budget on the 25th of this month.
Zambia’s 2020 national budget was sized at K106 billion with estimates of attaining a 6.5 percent fiscal deficit and growth target of 4.2 percent.
Going forward, it will not be adequate to only get budget proposals from stakeholders and the districts, but focus should be on how agile and quick estimates can be revised and robust data reservoirs.
This is according to the Economics Association of Zambia (EAZ) National Secretary, Mutisunge Zulu.
Mr Zulu said factors ranging from the exchange rate to commodity price forecasts to aggregate demand to depending factors both endogenous and were becoming critical in determining what the size of the budget should be.
He said in an interview that there was therefore need to adopt stress testing factors of economic variables to attain realistic targets.
Mr Zulu said it was time to make investments in real tool sets that would help the budget process a reality.
“Data is indeed the new oil. These investments should go beyond technology investments such as e-mail and internet usage but should focus on the tools that will reveal trends, correlations and comparisons with peers.
“Much as economic theory traditionally guides on resource allocation mathematically, data mining brings a different information view as it points to the needy areas of the economy requiring resources and as such will yield the desired optimisation,” he said.
Mr Zulu said considering the tedious nature of national planning, it was vital that the authorities invest in data mining tools that would inform national strategy better.
In this generation, he explained, there could be no effective strategic implementation in the absence of data.
He indicated that Covid-19 also revealed the evolution in skill set requirements especially for planners from pure economics and accountancy to data science.
“With that said, longer cycles are now more risky and extraordinarily uncertain due to the unpredictability of events that could spontaneously occur.
“It is imperative for budget cycles to either be flexible or shorter with constant revised estimates to accommodate risk events as the one experienced in 2020,” Mr Zulu said.