Transparency International Zambia (TI-Z) acknowledges the transparency demonstrated by the Government in announcing the supplementary budget amounting to K41.9 billion. This announcement reflects a proactive approach in reallocating resources, in response to current challenges and potentially in response to the utilization patterns observed by Ministries, Provinces and Spending Agencies (MPSAs).
However, TI-Z wishes to raise some concerns following the submission made by the Minister of Finance and National Planning, Hon. Situmbeko Musokotwane, regarding the underlying drivers necessitating this supplementary budget. The attribution of these financial adjustments primarily to the poor 2023/2024 rain season unveils several critical issues. These include the Government’s failure to integrate meteorological forecasts into effective planning and budgeting processes, the energy sector’s vulnerability due to inadequate diversification, and the nation’s food security fragility.
Nevertheless, it is crucial to highlight that the assertion by the Minister attributing the supplementary budget solely to the drought may not fully encapsulate the situation. Analysis of the supplementary budget reveals that 71.1% of its allocation is earmarked for external debt repayment (34.8%) and fuel arrears (36.3%), suggesting that substantial portions would have been allocated regardless of climatic conditions.
TI-Z notes with concern that despite early alerts from the Zambia Meteorological Department in October 2023, no preemptive measures were reflected in the 2024 Zambia National Budget enacted in December 2023. Additionally, there was a noticeable absence
of public awareness campaigns by the Ministries of Agriculture and Green Economy and
Environment to prepare citizens for the farming season.
The emergency drought response outlined in the supplementary budget allocates K8.3 billion, with K5.2 billion specifically designated for Social Cash Transfer. However, TI-Z emphasizes the need for enhanced administration, monitoring, and accountability frameworks to oversee the implementation of these critical interventions, given irregularities and underspending seen in previous fiscal years.
TI-Z further highlights that 9.1% of the revenue for the supplementary budget will be sourced from additional domestic revenue, including forfeited assets. While acknowledging the establishment of a forfeiture asset management department, TI-Z urges the development of transparent guidelines and regulations for their management and disposal. The Government’s efforts to generate 41% of the supplementary budget from operational savings are commendable, but it is worth cautioning against overreliance on domestic and external borrowing, which constitutes 39.6% of the budget. Such practices risk exacerbating the strain on the private sector and jeopardizing sustainable public debt management goals.
In light of these observations, TI-Z makes the following recommendations:
1. Government must enhance budget credibility, transparency, and accountability in public finance management, with increased opportunities for public participation in supplementary budget development processes.
2. Government should adopt a sustainable approach to debt repayment, avoiding excessive borrowing and adhering to the timelines outlined in the Public Debt Management Act for amending annual borrowing plans.
3. Clear and transparent selection criteria must govern initiatives like “food for work” and “cash for work,” ensuring they are shielded from political influence, especially during by-elections.
4. Enhanced administrative and accountability mechanisms are imperative for the effective implementation of drought response and Social Cash Transfer programs, mitigating administrative and financial irregularities.
5. Civil society and citizen monitoring mechanisms should be empowered to oversee the drought response and Social Cash Transfer programs, reporting any maladministration or financial misconduct promptly.
6. Cabinet Office should coordinate robust responses to early warnings from meteorological assessments, integrating these insights into ministry operations and national planning and budgeting decisions.
7. The Ministry of Agriculture should intensify efforts in food diversification and security, while the Ministry of Energy must fully implement the Renewable Energy Strategy and Action Plan to bolster energy security and diversify Zambia’s energy mix.
TI-Z remains committed to promoting integrity and accountability in Zambia’s governance processes and stands ready to collaborate with stakeholders to address these critical issues.
Tommy Singongi (Mr.)
TI-Z Public Resource Management Coordinator
