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Analysis of the Public Finance Management Act of 2018

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.

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PMRC 2019 National Budget Analysis

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

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Zambia National Budget 2019 Infographic

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PMRC 2019 Budget Presentation to the Parliamentary Committee on Budget Estimates

PMRC presentation to Parliamentary Committee on Budget Estimates

The discussions bordered around;

  1.  Fiscal Consolidation for Sustainable and Inclusive Growth.
  2. The specific macroeconomic objectives for 2019.
  3. Major observations on Education, Health and Agriculture allocation
  4. The 5 pillars of the Seventh National Development Plan

Among other points, PMRC submitted that for the 2019 Budget implementation to score above 70% success,

  • Government must enforce and improve public finance management and curbing the misuse of public resources
  • Government must take a decisive position on reducing on debt contraction and put in place a stringent debt management mechanism that would be transparent, accountable and participatory
  • All spending Agencies must adhere to budget provisions as stipulated and there should be strict financial management at all levels.

 

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Presidential Speech 3rd Opening Infographic_2018

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The e-Voucher Restructuring: SMART 2018/2019 Farming Season – Infographic

According to the Seventh National Development Plan (7NDP), the agriculture sector is the fourth largest contributor to GDP (8.7 percent) and the largest contributor to employment (70 percent). The sector is critical for achieving diversification, economic growth and wealth creation in Zambia. One major component of the agriculture sector is the e-Voucher programme which was introduced in the 2016/17 farming season a er a successful pilot season in 2015/2016 farming season.

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The Aquaculture Sub Sector in Zambia Challenges and Opportunities

The fisheries sub-sector in Zambia plays a significant role in the economy as it offers an opportunity for improved nutrition, income generation and job creation, resulting in general wealth creation and food security at national and household levels. At national level, the fisheries sub-sector contributes approximately 3.2% to the national Gross Domestic Product (GDP) (Second Agricultural Policy , 2016). Given the abundant water resources that Zambia has, the fisheries sub-sector has been identified as one of the avenues for agriculture and general economic diversification through enhanced and efficient capture fisheries and fish farming. At household level, the fisheries sub-sector is identified as one of the sectors that can provide additional protein. In addition to other sources such as livestock and crops, fish accounts for about 40% of protein intake in rural areas. This sector is key in efforts towards scaling up nutrition levels, food security and income generation. At household level, the fisheries sector contributes to household income through fishing activities as an income generating activity in some parts of the country.

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PMRC Policy Analysis of The National Tourism Policy – Repositioning The Tourism Sector As One Of The Country’s Major Economic Contributors

Zambia’s tourism sector has been identified as one of the key economic sectors for diversification of the economy. Government and key stakeholders recognize the potential the sector has in contributing to the economy through job creation, foreign exchange earning, contributions to Gross Domestic Product (GDP) and other economic facets. The sector’s potential to contribute to the economy has not however been fully unlocked due to a number of impediments. Some of these include delays in policy and legislative reforms and administrative and structural reforms.

In February 2017, the Government of the Republic of Zambia launched the National Tourism Policy of 2015. The delayed launch of the policy was attributed to the interruptions in the review process, in the form of various national events such as the successive presidential, parliamentary, and local government elections and others. The aim of reviewing the policy was to present stakeholders’ views in light of the changing trends in the tourism sector and also to reposition the sector as one of the county’s major economic contributors. This followed the recognition and reclassification of the tourism sector from a social sector to an economic sector. The revised policy is aimed at ensuring the tourism sector contributes to job creation, foreign exchange earnings Gross Domestic Product (GDP) and poverty reduction through wealth creation. Additionally, the policy is meant to provide a strategic framework for sustainable tourism development intended to ensure the sector realizes its full potential (Ministry of Tourism and Arts, 2015).

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Mid Year Economic Brief (Jan – June) Infographic

On 19th July 2018, the Minister of Finance,Honourable Margaret D. Mwanakatwe, MP, provided the midyear economic brief to update the nation on the following subject matters:

  1. Recent Economic Development
  2. Policy and Structural Reforms Measures
  3. Implications of Austerity Measures
  4. IMF Programme

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Energy Policy Reform – Independent Power Producers and Power Sector Reform – Infographic

Overview: Improving the performance of the electricity sector in Sub-Saharan African (SSA) countries is a long-standing agenda, going back to the 1990s. The early approach was to attempt to implement a set of ‘standard’ or ‘textbook’ reforms based on economic theory and experience in countries.

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