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Monday, 27 January 2014

IMF on Zambia's Poor Financial Management

The recent IMF Article 4 report paints a bleak picture of Zambia's poor public financial management :
"...The recent [IMF] assessment found a deterioration in [Zambia’s] Public Financial Management (PFM) , including reporting and quality control. Procurement practices have also deteriorated, with single-source contracts for some large projects. While the rollout of the Integrated Financial Management Information System (IFMIS) has continued, its implementation, as well as that of the Treasury Single Account (TSA), has been weak, and only release-based fiscal data are available. In addition, consolidation of financing data with the Bank of Zambia (BOZ) needs to be improved..."

"....IMF stressed the importance of stepping up PFM reform to support fiscal consolidation and improve budget planning and implementation. Staff underlined the importance of (i) enhancing budget credibility and consistency between the National Development Plan, Medium-Term Expenditure Framework, and annual budget; (ii) improving fiscal data as well as forecasts by enhancing the macro fiscal framework; (iii) expanding the coverage of the TSA by closing line ministries’ accounts at commercial banks; (iv) improving collaboration between units at the Ministry of Finance, and with the BOZ, to produce fiscal data based on expenditures rather than releases; (v) strengthening IFMIS implementation and controls; and (vi) providing additional resources to the Accountant General’s Department to support these reforms..."

(Source: IMF Article 4 Report 2013, Paras 21-22)
I remember last year suggesting that Finance Minister Chikwanda has been presiding over incompetence, I was told I was playing politics. We need to increasingly learn to listen to each other. There's a rottenness at the heart of Zambia's public financial management that even Noah would struggle to keep the ship afloat! 

AUTHOR
Chola Mukanga | Economist
Copyright © Zambian Economist 2013

1 comment:

  1. 'to produce fiscal data based on expenditure rather than releases'.

    What does that mean? Is it that the reported figures are not true and things are actually worse than they are reported due to false reporting?

    ReplyDelete

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