Effective management of public resources is essential in the development of any nation. Public resources should therefore, be applied for the best possible public benefit. It is for this reason that the Zambian Government allocates public resources to Parastatal bodies and Statutory institutions as they have an important role to play in service delivery, which ranges from water and sanitation, electricity, education and transportation among others.
The African Continental Free Trade Area (AfCFTA) is a flagship project of African Union Agenda 2063 and refers to a continental geographic zone in which goods and services are to move with, no restrictions; among member states of the African Union (AU). The AfCFTA aims to boost Intra-African trade by providing a comprehensive and mutually beneficial trade agreements among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy. The agreement has been signed by member states of the African Union, bringing together 1.2 billion people with a combined Gross Domestic Product (GDP) of more than US$2 trillion. The draft agreement commits countries to removing tariffs on 90 % of goods, with 10% of “sensitive items” to be phased in later. The agreement is also set with the aim of liberalising services and to tackle non-tariff barriers, which hinder trade between African countries.
The (CFTA) intends to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African Customs Union. Through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across Regional Economic Communities (RECs) and across Africa in general; the CFTA aims to expand intra African trade. It further aims to resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes. Through exploiting opportunities for scales of production, continental market access and better reallocation of resources; the CFTA further aims to enhance competitiveness at the industry and enterprise level.
Zambia faces a challenge to meet rising demand for electricity as the economy, population and electrification continue to grow. Load-shedding in 2015-16 demonstrated just how high the stakes are for meeting this challenge as the economy suffered losses equivalent to 20% of GDP (Samboko et al 2016) and government bore the cost of expensive energy imports. As government undergoes fiscal consolidation in response to high debt levels, it should look to increased investment in Independent Power Producers (IPPs) to develop energy capacity. This approach offers the opportunity to meet increased demand in a way that protects fiscal spending and ultimately promotes long-term economic growth.
IPPs offer a sustainable route to increased energy capacity across Sub-Saharan Africa, where public and utility financing has traditionally been the largest source of investment in power generation. This picture is true of Zambia, where IPPs currently make up a small but growing part of Zambia’s energy portfolio through plants ranging in capacity from a few megawatts to around 300MW. Zambia has faced significant challenges in attracting IPP investment for several reasons, including below-cost tariffs, its regulatory framework and procurement processes, all of which need to be addressed if Zambia is to better exploit the opportunities that IPPs provide.
Public Financial Management (PFM) refers to the set of laws, rules, systems and processes used by sovereign nations (and sub-national governments), to mobilise revenue, allocate public funds, undertake public spending, account for funds and audit results (Lawson, 2015). It encompasses a broader set of functions than financial management and is commonly conceived as a cycle of six phases, beginning with policy design and ending with external audit and evaluation. A large number of actors engage in this “PFM cycle” to ensure it operates effectively and transparently, whilst preserving accountability.
Why Public Financial Management (PFM) is Important
A strong Public Financial Management (PFM) system is an essential aspect of the institutional framework for an effective Government because:
- Effective delivery of public services is closely associated with poverty reduction and economic growth, and countries with strong, transparent, accountable PFM systems tend to deliver services more effectively and equitably and regulate markets more efficiently and fairly. In this sense, good PFM is a necessary, if not sufficient, condition for most development outcomes.
- A key element of statehood is the ability to tax fairly and efficiently and to spend responsibly. These are fundamental characteristics of ‘inclusive’ state institutions, which generate trust, promote innovative energies and allow societies to flourish.
Improving the effectiveness of a PFM system may generate widespread and long-lasting benefits, and may in turn help to reinforce wider societal shifts towards inclusive institutions, and thus towards stronger states, reduced poverty, greater gender equality and balanced growth (Lawson, 2015) . For this reason, the Public Finance Management Act and other support regulations have been contentious matters for long time in Zambia.
On Friday 28th September 2018, the Minister of Finance, Honourable Margaret D. Mwanakatwe, and MP delivered the 2019 Budget address to the National Assembly under the theme “Delivering Fiscal Consolidation for Sustainable and Inclusive Growth”. The 2019 National Budget was formulated against the backdrop of the austerity measures being implemented by Government to deliver fiscal consolidation. Among several observations, the budget proposes bold and substantial changes in revenue mobilisation and spending strategies in support of the goal for fiscal consolidation. The budget is aligned to the Economic Stabilization and Growth Programme, the Seventh National Development Plan (7NDP), and the vision of becoming a prosperous middle- income country by 2030.
PMRC has since produced the 2019 National Budget analysis, which explains key aspects of the Budget in all the 5 pillars of the Seventh National Development Plan and further provides recommendations to aid with the implementation of the Budget