 Let me begin by thanking our Fed, Pia, and the team at UNWIDE for this opportunity to come and share our work with a wider group, but at the same time for excellent organization of a big function. Pia was talking about it similar to preparing a wedding or something like that. And if people have taken part in the preparation of a wedding, you know how stressful it is. And I can imagine how it has been for the last couple of months to prepare this particular big function. So thank you very much UNWIDE for inviting us. Working, I'm from Zambia, as introduced area on and work, I'm from the Ministry of Finance. With me is other three guys, one who is here, they look at the back over there seated. He wasn't here in June, I was with Obie, but Lukha is able to join us. So we are very grateful that you could invite us. We are looking at financing the Zambia social cash transfer scale up. The tax benefit micro simulation analysis, of course, based on micro-zar mode, which has been developed and I'll come to it. With support from UNWIDE, SASPRI and in cooperation with ZIPA, the local research think tank in Zambia, which is a Zambia Institute for Policy and Research. What is our motivation behind this particular research? First and foremost, for the last couple of years up until about 2015, from around, I would probably go beyond 2006 and probably put it at 2005, Zambia experienced reasonably high levels of growth averaging about 6.4% for last, for 10 years up to 2015 before growth plummeted to about 2.9% and they're about lower due obviously to unfavorable base metal prices on the old market. But despite this average good growth, poverty has stagnantly remained very high. It only marginally declined while inequality in fact increased and this has been seen by living conditions monitoring survey that has been conducted, that are usually conducted by the Central Statistical Office of Zambia. The 2015 survey shows that 54.4% of the Zambian population of about 16 million people living below the national poverty line with 76.6% which is just roughly 77% in rural areas and in urban areas about 23.4%. The survey also shows that extreme poverty was still stagnantly high at 41%. They are about 60.8% in rural areas and 12.8% in urban areas. The 2011 living condition monitoring survey was about 59%. So the reduction in poverty was quite low. As measured by the coefficient, the income inequality was also very high at 0.69 and not 0.60 for rural areas and not 0.61 for urban areas. And the survey report says that the poor still remain vulnerable facing challenges including food insecurity and adequate access to basic services such as education, self-drinking water and healthcare. And therefore this poses a challenge what can be done in a developing country where growth is high and you would want to reduce poverty levels. This brings in the component of social protection interventions and this is why countries, most stations and policy makers alike I think I've moved away from just focusing on economic growth or growing the economy alone but also bringing in the component social protection interventions that remain key. And the Zambian government I'll come to it later on as recognize this point in the sense that the 7th National Development Plan significantly points to social protection as well as the other reforms that have been undertaken as having a very strong component on social protection. This is and in Zambia one such social protection intervention that remain key is a social cash transfer or indirect transfer as it were as this has been seen to reduce poverty, hunger, income inequality and promote inclusive growth. Social protection is not very new to Zambia as it has been implemented since 2003 but before then social protection still existed in Zambia as it was done through in kind support such as food aid, clothes and so on and so forth. And the thinking then was that by the policy makers and implementers alike was that they knew much more than what the poor needed most but this resulted in some problems as logistically it was quite very expensive in terms of storage and also transportation but there was also a pill fridge as this food aid never reached the intended target. But at the same time for beneficiaries some beneficiaries also sold some of these handouts that were given to them and therefore a government decided to establish or to introduce a direct transfer as a main social intervention program. And currently it definitely consists of a bi-monthly grant to households and it looks at households and for households without people with disabilities it's about nine dollars which is nine to Zambian kwacha and for households with disabilities or disability person it's about 18 dollars a month and the idea is that this should reduce extreme poverty and the inter-generation transfer poverty but as we saw area on in the statistics that I presented it was introduced in 2003 and the living conditions monitoring survey that was conducted in 2015 at that particular time still indicated I was seen that poverty still remained very high and therefore this poses a question of whether the program in its current form is efficiently enough to have an impact on poverty and inequality and this is what has motivated us to to essentially propose a number of social cash transfer reforms which I will come to later on. At the moment the program targets vulnerable but not viable households and this includes persons with severe disabilities the elderly in Zambia the elderly has defined as 65 and above because the retirement age is 65 years of age those that are chronically ill on palliative care and also for female-headed households with three children and above who are between the ages of 19 to 64 years after 65 years then they fall into the elder group and then of course the child-headed households. The other two criteria that are added to this the first one is about is is essentially the residence test that you should be living in a particular area for about six months or more otherwise then you cannot participate in the program the last one is worth estimation which is based on some threshold that you should have this level of you should have a lower level of income to about this threshold for you to participate. From literature the area versions of the program which were done in selected districts literature particularly those done by hand and the team when they did an evaluation an impact evaluation on selected districts about three districts or so they discovered or they found that social cash transfer indeed in those areas was had an impact on poverty and those households also increased their productivity levels by increasing in livestock that they owned also increase in land that was operated so there is evidence from current literature that social cash transfer cared and does have an impact on poverty in this study we attempted to test the realism of the alternative social cash transfer reform options that we are that were proposed using the microxamot which has been developed as I said with support from SACPRI and UNWIDER and it is based on the EuroMod that is being spearheaded by the University of Essex and colleagues at European Union Commission and the simulation is based on the 2015 living condition monitoring survey dataset I'll leave out the detail of the microxamot because SACPRI is here and Michael is going to talk about that or to improve the quality of data and so on we begin our simulations first and foremost by assessing with the current social cash transfer levels using the microxamot and of course the 2015 living condition monitoring survey data and the results seem to tell us that in its current form the social cash transfer model the Xabben model would have a very minimal impact on poverty as only would only reduce poverty by 1.56 percentage points that would be the head count poverty head count and in most cases the effect would be much larger on female-headed households and those households with older persons probably because the households with older persons are much more vulnerable but at the same time because the retirement age is at 65 so they are much more labor constrained and therefore the effect is much higher upon those the simulation also seems to tell us that that the government would need to spend about 977 million which is about quacha which is much more than what was estimated or estimated in the 2018 budget of 721 million quacha but with these statistics aside there is still political way on the government way on the Xambian side because as you can see that cumulatively over a period of time from 2011 there has been an increase in terms of the number of beneficiaries and the social cash transfer from about 32,000 in 2011 to last year about 530,000 which is a huge increase and correspondingly budget reasons also have increased from about 42 million to about 5 and then 590 million last year and in this year's budget 2018 there has been on a location about 700 million quacha so there has been an increase not sufficient though as particularly when you compare to the region average because this is just about 0.7% of the Xambian GDP on average much lower than what is being spent by other countries on average in the region of about 1.7% further as I stated government commits to reduce poverty and extreme poverty as stated in the 7th national development plan by 20% by 2021 from the initial analysis of the current design of the program that is not possible because you need to reduce by about 80% points which is much higher than what we are getting if we use the current data on the current design the 7th national development plan also commits to increase coverage of social assistance from about 40% to 7% of the poor average value of pick up to social assistance benefits as well as a percentage of the poverty line from 6.5% to 20% further in the other government documents that particularly those that are aimed at fiscal consolidation and so on there is a strong commitment to preserve what is being budgeted for social protection therefore to be desirable for a program like this to have a huge impact and this is our suggestions on how alternative social cash transfer reforms first and foremost the first four scenarios I am that changing the targeting approach by extending coverage the second is about improving adequacy by increasing the transfer levels and the first one including the children that are aged between zero and two years revising eligibility from instead of looking at the household level to include at the individual level and then of course removing the means test and residence test so as to make the the to increase coverage from selected to universal coverage again the improving adequacy we we take consideration of the sizes of the households rather than looking at just individuals if you have a hand-capped person in the house or you have one with on palliative care and then despite the numbers of the household and or indeed just by doubling the amount that is given the simulations on the alternatives seems to suggest that first and foremost under the status quo poverty would be reduced very minimally if we add children aged between zero to two years the difference would be slightly huge that what is on using under the status quo and if we shift to individual eligibility it is slightly lower than if you adding children to zero to two and universal cover for universal rural areas mostly because at the at the moment almost every person that is eligible in the rural areas is covered but if you include urban areas you see a substantial impact on poverty and the expenditure that would be needed is just roughly around 1.1.5 billion quacha which is less than the regional average further if we increase or change the transfer levels what we see particularly when we combine is that when we combine children between the ages of zero to two and the transfer to account for household size the impact would be huge and it would be 5.08 percent which is 4 percentage points that government is targeting and if you look if you include or you just use an absolute transfer increase the difference or the impact to be slightly lower than what under the the transfer to account for household size so this inequality however the difference there seems to be huge inequality seems to social cash transfer seems not to have much impact on inequality and there is there could be many reasons probably where it could be that as it could be that maybe due to deindustrialization or other causes that could have an impact but I think this inequality is something that needs to go beyond social protection or it did like so our conclusions are that first and foremost social cash transfer yes as a name as there is there is opportunity for it to have a contribution on poverty reduction but in the absence of the program taking a nationwide approach the impact to be smaller and it might not be significant to reduce the extreme poverty in line with the government policy unless it is reformed further and the reforms would take further extension of coverage increasing transfer levels and so on and so forth but this poses a challenge because remember when I that what would what would be needed earlier first would be if indeed you look at the amounts needed first and foremost the budget would be 2.5 billion from what is 1 billion so there will be the difference in terms of commitment from government resources will be huge so how can this be financed if indeed it has to take to have an impact on poverty but at the same time contribute meaningfully to poverty reduction so this therefore leads us to to first and foremost look at financing options how can it be financed first and foremost we look at the various package of tax reforms which we propose and we also simulate them on first on impact on poverty as well but also on revenue collection as well we look at introducing a sin vat rate of 30% on howko and tobacco because these are products that are consumed obviously by those that are a bit better off also look at revision of income tax particularly the higher bracket level and the result tend to tell us that in fact even we can be generated which is sufficient enough but there would be a bit obviously reduction increase in poverty extreme poverty head count without tax reform it's 36.8 but with tax reform that would be to rise to slightly 36.9% and but this would have an impact on extreme poverty because definitely those tax proposed taxes are aimed at the income group that is slightly higher than the rest thank you very much