Saturday, February 10, 2007

Magande’s 2007 poverty reduction and growth budget

Magande’s 2007 poverty reduction and growth budget
By Editor
Saturday February 10, 2007 [02:00]

Let’s put the Budget speech rhetoric aside and critically examine things. This year’s Budget goes under the theme “From stability to improved service delivery”. Closely examining this year’s expenditure, it becomes very clear that it is only government that is improving its consumption service delivery. It has nothing to do with people at large. The devil is in the detail. We have now all heard and read finance minister Ng’andu Magande’s Budget speech. The Post has now closely reviewed the 1,439 pages of the Estimates of Revenue and Expenditure, famously known as the “Yellow Book”. The next bombshell will be when Magande tables tax and customs legislation, which detail has yet to be disclosed.

Some people never learn. Some people take all the people all the time for granted. We cannot count on any member of parliament to work for the people; except for themselves - this includes the President, ministers and opposition members of parliament.

The report below will show how President Levy Mwanawasa and Magande want to develop Zambia. We will give you only a glimpse of some of the bizarre expenditures. You will see what government means by poverty reduction programmes. Essentially they are about improving the living standards of the President, ministers and members of parliament. In this analysis, we have only shown our readers less than 1 per cent of the proposed expenditures by Magande. This analysis tells why there is gross incompetence at the highest levels of government.

Billions of kwacha have been allocated in the name of poverty reduction programms, when they are simply consumption-oriented. For instance, how on earth can international obligations, outstanding bills, settling in allowances - a total of K38.69 billion as allocated under the Ministry of Education Programme 3 and 7 - constitute poverty reduction programmes? Since we need to have economic growth, the Ministry of Works and Supply has allocated K650 billion to procure state functions, motor vehicles and a staggering K5.322 billion for VIP motor vehicles and K1.612 billion for motor vehicle consumables. Under the Buildings Department another K1 billion has been allocated for more motor vehicles. Under National Assembly, Magande has allocated a staggering K19, 488 billion for vehicles for members of parliament. In 2006 members of parliament took K33.2 billion in gratuities!

This madness does not end here - Levy is not even in the first year of his second term of office and Magande is already planning for his boss’ retirement benefits. Levy, the third Republican President, like all our former Republican presidents is entitled to several perks, one of them being housing upon retirement. Magande has allocated K1 billion for Mwanawasa’s retirement house! While the still incomplete house of the first Republican president (Dr Kenneth Kaunda) since the early 1990s has been allocated a K4 billion, and the second Republican president (Frederick Chiluba) also still incomplete house has been allocated K2 billion.

In addition, the Ministry of Works and Supply, under their budget head “Poverty Reduction Program”, State House renovations has been allocated K15.786 billion. Is this a poverty reduction programme? However, under the actual State House budget, the 2006 budget of K13.232 billion has been increased to K18.998 billion for 2007, the rest as you will have noted has been “hidden” under the Ministry of Works and Supply. Compare this with K10 billion allocated under the Ministry of Local Government for capital grants to District Local Authorities and recurrent grants of K50 billion and K25 billion for retrenchments under Local Authorities! We have to ask: Did Levy sleep through the Cabinet budget meetings? Or does he even understand the consequences? The buck stops on the President’s table and he must be made answerable.

Under the Vice-President, it’s all humpty-dumpty. In 2006 for Vice-President’s Office operation, Parliament approved K2.04 billion, but instead spent an additional K10.563 billion, making a total of K12.612 billion. We assume this was to facilitate the campaign tours former Vice-President Lupando Mwape undertook. This year, Vice-President Rupiah Banda’s office administration gets a healthy K6 billion. The country is currently under serious flooding disasters. Of the total K20.78 billion allocation to the entire Vice-President’s Office, the Disaster Management and Mitigation Department of the Vice-President’s Office has been allocated a total of K6.93 billion of which K1.616 billion has been allocated for office administration and K238.7 million for stockpiling non-food supplies and about K25 million for stockpiling food supplies and zero for procurement of relief supplies!

Since all presidential and vice-presidential travel expenses are “hidden” it is interesting to note that under Cabinet Office, State Functions (local) a total of K 4.62 billion has been allocated. What is astonishing is that allocations of K905 million and K600 million have been made for the Ndola International Trade Fair and Lusaka Agricultural and Commercial Show respectively, while the Ministry of Commerce has allocated K32 million and an additional K102.9 million for the International Trade Fair and the Ministry of Agriculture has allocated K42.2 million for agricultural and commercial shows under their Department of Agriculture.

The Ministry of Foreign Affairs has allocated K21 million for its participation at the International Trade fair. This is why we said last year that it was a mad budget and so it is this year.

Further K45 billion has been allocated for public affairs and Summit meetings, whilst NIPA gets a paltry K100 million. Contrast this with a total allocation of K2.5 billion under Zambia Police under the Ministry of Home Affairs for rehabilitation of police camps, grading of police camp roads, prison cell and police stations rehabilitation. But not to be outdone, government spent K2.5 billion in 2006 to rehabilitate one helicopter. Government also spent K11.34 billion in 2006 to buy vehicles for the police and have allocated about K2 billion for more in 2007.

Under the Zambia Police poverty reduction programme about K182 million has been allocated for rehabilitation of water and sewer systems and K30 billion for construction of new housing units. But for Lt. Gen. Ronnie Shikapwasha at his Ministry headquarters, he has got himself K1.8 billion for office administration and almost K862 million for international travel during 2007. Government spent K4.373 billion for the yet to be seen digitalised national travel documents and has now allocated a further K4.28 billion for the same this year. Since we expect huge foreign investments, not to be outdone the Immigration Department has allocated itself almost K1.8 billion to buy more motor vehicles. At Local Government under their poverty reduction programme
called smallholder enterprise marketing programme, they spent an incredible K45 billion in 2006 for rehabilitation of footbridges and other than donor-funded projects in 2007, they intend to spend K2.4 billion for “mobilisation” in 2007 under their urban market development programmes. At the Ministry of Finance K30 billion has been allocated for the farm mechanisation and irrigation fund and K30 billion for credit enhancement for SME’s, and an additional K55 billion for “other
financial restructuring” - whatever all that means.

Whilst TAZAMA Pipeline gets almost K10 billion and the Zambia National Building Society gets almost K16 billion and Indeni Refinery gets K42 billion, in addition to an allocation under the Ministry of Energy of K234 million and RAMCOZ gets an allocation of K13 billion, when the
Administrator General’s Office at the Ministry of Justice spent K700 million on liquidation of RAMCOZ in 2006. Nitrogen Chemicals gets K3 billion, against K9 billion allocated for Constituency Development Fund, under the poverty reduction programme at Ministry of Local Government.

Last year government spent K29 billion on the youth empowerment fund, but there is little to show for it. The Ministry of Information and Broadcasting in 2006 spent K1.35 billion on presidential trips abroad, ostensibly to provide press coverage to Levy, and for 2007 they have allocated K1.46 billion to provide overseas press coverage for Levy. Support to the entire public media has been allocated K1.5 billion, against K7.19 billion that was allocated and spent by the Zambia National Broadcasting Corporation in 2006. The Ministry however has allocated itself K481 million for foreign tours in 2007. K2 billion has also been allocated for the appointment of the Independent Broadcasting Authority and almost K230 million for the review of media laws and a further K1.1 billion to rent satellite space, whilst the Zambia News and Information Services gets K1.5 billion to procure motor vehicles.

Meanwhile, Cabinet Office at Public Service Management Division has allocated itself K8.5 billion for “voluntary medical scheme”, for the select few it seems, and K533 million for negotiations and collective agreements, less this year from 2006 when they spent K846 million. But let’s not forget our chiefs, they have a bonanza this year; they get K6.6 billion allocated for motor vehicles. Like local government and housing minister Sylvia Masebo said recently, decentralisation is not a priority of her colleagues, hence they had the luck of the Irish who have granted her almost K1.5 billion for decentralisation sector development, while government has allocated a total of K700 million for office administration and staff welfare in the decentralisation department.

Constitutional reforms at the Ministry of Justice get K202 billion and another K1.7 billion for the procurement of motor vehicles. Are you still with us? It gets even more absurd; the ill-fated Triangle of Hope initiative launched with much aplomb by Levy last year, but generally “rejected” by the Ministry of Finance gets K248 million - to do what? And since Citizens Economic Empowerment Fund is now no longer relevant, government has allocated a mere K49 million. But attending international conferences by the staff of the human resources and administration department of the Ministry of Finance is very important, so they allocated themselves K909 million and an additional K400 million for them to revise the Ministerial Strategic Plan. As if this is not enough for them, they also allocated additional K380 million for “culture remodelling-radio and TV production and K280 million for advertising and a whopping K700 million for Ministerial publications in foreign press. In order to educate us, they will spend K360 million for post-budget and MTEF outreach! Yet another K1 billion for motor vehicles and K600 million for their fuel reserves.

The University Teaching Hospital does not have a proper functioning incinerator, but who cares about human health? The Ministry of Finance is going to spend K450 million installing their own electrical incinerator and K700 million painting the Ministry of Finance HQ. That is not all, since the Ministry of Finance HQ is the ‘tallest’ building in Zambia, they will also spend K450 million fitting 2 elevators. Since the Zambia Revenue Authority seems to be incompetent, the Budget Office is spending K627 million for non-tax inspections and K129 million for development of new customs duty/VAT funding system and K978 million for tax policy reforms. But the Department of Planning and Economic Management cannot be sidelined, so they have come up with K2.28 billion to disseminate the National Development Plan (NDP) 2006-2010 and a further K1.18 billion to co-ordinate the implementation of the NDP. This is after they spent K5.26 billion in 2006 on dissemination of the NDP. It gets even more ridiculous. Under their poverty reduction programme, they spent K277 million for FNDP progress report writing in 2006 and want another K300 million this year and K706 million for preparation of the development budget. In order to hoodwink the private sector, one needs to have meetings, so they have allocated K80 million for public-private partnership meetings as well.
They spent about K32 million on review of population policy in 2006, so in order to disseminate their review findings they have allocated themselves K200 million this year. But consultations with the IMF/World Bank are crucial to this short-sighted government, so they have allocated K253million for that purpose in 2007.

With all this critical work, one needs economic performance monitoring and reporting, so they have allocated K400 million for the production of the annual economic report, K205 million for preparation of mid-year economic report and K100 million for budget analysis.
It will not cease to amaze you; under their poverty reduction programme, they have allocated K204 million for management information system, K161 million for field inspection and report writing. Not to be outdone, the Ministry of Finance Economic and Technical Cooperation department has allocated itself K346 million for implementation of aid policy strategy, and K300 million for new office furniture, since they are currently all sitting on the floor. You may have thought these people know what they are doing - not so! They have allocated K703 million for short and long-term training as well.
Miraculously, the Department of Financial Management and Accounting in the Ministry of Finance spent K3.8 billion on office administration in 2006, but in 2007 they only need K1.1 billion. This again is laughable; under their poverty reduction programme they spent K22 billion for payment of arrears and this year another K22.966 billion will be spent. K82 billion was spent for payment of arrears to contractors and this year K68.898 billion and K36 billion for payment of utility arrears.
Surely can all this be classified as poverty reduction programmes? If you thought it cannot get any more hilarious, they have allocated K921 million for enhancement of commitment control system/financial and K456 million for production of financial reports - yes yet again! Not to be outstaged, the donors have found it fit to grant the said Department K141 billion for Public Expenditure Management and Financial Accountability Reforms (PEMFAR).

At the Ministry of Labour HQ - control of foreign labour gets K71 million, review of labour laws gets K30 million and in 2007 SADC Conference gets K600 million, their own staff welfare gets K400 million and in their Planning and Research Department they have allocated K1 billion for their own employment promotion activity, in addition to K200 million for staff welfare, K800 million for National Employment and Labour Market Policy and K700 million for capacity building for labour market information.

The Ministry of Community Development and Social Services HQ exists for noble work for the poor in our society, so they will spend a little more than K1 billion on transport management, K663 million to develop and manage human resources and K520 million for management information systems, while spending K10 billion for agricultural support and K5 billion for retirement benefits for the Zambia Agency for Persons with Disabilities. Their Community Development Department will spend K1.16 billion for “women development” - whatever that may mean - and their Cultural Department will spend K1 billion for “creative and cultural industries”. The Ministry of Health under their poverty reduction programme will spend K3.14 billion for international specialised treatment and K1.1 billion for local specialised treatment. While the very efficient Ministry of Communications and Transport has allocated itself K3.7 billion for office administration and K532 million for extension of their offices. K2.15 billion for Government Communications Flight, which is almost non-existent and we all know Levy uses the Challenger, whose costs they have again hidden this year. K80 million for supervision of establishment of a national airline and K400 million for co-ordination and establishment of a national airline, and to top it off, K231 million for” gender”. What does that mean? Rural telephone gets K400 million under their poverty reduction programme. We thought the Communications Authority was supposed to do that from the fee they charge to all telephone operators and or ZAMTEL! And K350 million for the implementation of the Triangle of Hope.

Since all the major mining investments have been made near the Kasama area, the Civil Aviation Department has allocated K2.08 billion for rehabilitation of the Kasama airport and K217 million for Solwezi airport, which area has little investment in the new mines! As is this was not adequate, can you imagine a further K513 million has been allocated for “feasibility study on reforming the department”. Rehabilitation of the country’s canals, waterways, harbours get a paltry K1.36 billion. Ministry of Works and Supply under their poverty reduction programme has allocated just over K2 billion for long service bonus and separation packages, K1 billion for roads department repatriation package and a further K1 billion roads department notice of termination, K1 billion for construction of the Solwezi lodge, there is no decent place for VIPs to stay, K500 million for construction of the Livingstone lodge and K528 million for the establishment of conference room and bar at the Kabwe lodge, K200 million for Luangwa lodge and K150 million for renovation of the Kasama lodge. K306 million for maintenance of government and VIP gardens. After spending K300 million on Public Private Partnership in 2006, they have allocated a further K525 million in 2007- to do what? For their Planning Department to attend parliamentary sessions they have allocated K115 million and International Women’s Day gets K241 million.

At the ministry of Science, Technology and Vocational Training, Evelyn Hone College gets K800 million; Northern Technical College gets K600 million. But the medical scheme - for the chosen few- at the ministry gets K190 million. And to inspect all the institutions they have allocated K140 million. To hold a national conference on Technical Education and Vocational Training (TEVET) K211 million has been set aside. K255 million has also been set aside to undertake performance review of TEVET. Government allocation for bursary gets zero, however, the ever-nice donors have allocated K5.5 billion.

A Youth Inventors Fund is being established and K5 billion has been allocated. Most of the development programmes are funded by the donors, as is the case at ministries of health, education, works and supply, among others.

Tourism is the government’s second tier strategy for economic growth, after agriculture, so this year they allocated K140 million for provincial tours to monitor human resource management, K334 million for maintenance of Kwacha House, where their offices are located, pay K400 million for their outstanding bills, K683 million for transport management, and a total of K34.353 billion - of which K20 billion is for ZAWA funded by the donors - to support the staff and activities of the Environmental Council of Zambia, Zambia National Tourist Board, National Museum Board, National Heritage, Hotel and Tourism Training Institute.

Services to the ministers have been allocated K710 million, while services to the permanent secretary have been allocated K149 million and the director of human resources and administration gets K114 million. HIV/AIDS awareness in the Ministry gets K103 million. The Forestry Department has allocated K3 billion in 2007, after having spent K7.35 billion in 2006 for Forestry Development Credit Facility.
While Zambia Forestry College gets a total lump sum of K2.35 billion. Planning is very important so their Planning Department gets K200 million for staff welfare, K12 million for services to director’s office and K254 million for office administration. Getting money out of the donors is the key, so K183.5 million has been allocated for international meetings. All this requires monitoring and evaluation, so a total of K427 million has been budgeted for. A further K297 million has been allocated for data management. To ensure that we are part of the global community, K1.49 billion has been allocated as contribution to international organisations. Just in case citizens get angry, an allocation of K4 billion has been made for the Tourism Development Credit Facility in 2007, after having spent K3.759 billion in 2006.
All this is no good unless we host international conferences, so this year K300 million has been allocated to host the World Tourism Organisation meeting. Since the Ministry of Tourism thinks that the Ministry of Justice is incompetent, they have allocated K500 million for operationalisation of the Tourism and Hospitality Bill-this is not even law yet! The development of the Northern Tourism Circuit (Northern and Luapula provinces) gets K1 billion and the private sector development and Triangle of Hope get a total of K100 million. The Department of Environment and Natural Resources got K60 million for staff welfare in 2006 - too little - so this year they have allocated K360 million. Gender mainstreaming and domestication of multi-lateral agreements gets K240 million - though it was the work of Ministry of Justice! All this is irrelevant because the World Bank is bankrolling about K63 billion under their Sector for Economic Expansion and Diversification Project (SEED), as are few other donors.

President Hu has come and gone. We will finally get a new stadium in Ndola. With so much work ahead of them, the Ministry of Sports, Youth and Child Development HQ has allocated itself K2.08 billion for office administration in 2007 from K873 million in 2006. All this requires a motivated staff, so K550 million for staff welfare has been budgeted from zero last year, and K906 million has been allocated for their 2006 outstanding bills. K105 million has been allocated for the National Survey on Sport, Youth and Child Development and K298 million for programme inspections.

The Sports Department under the ministry will be busy this year, so they have allocated K550 million for office administration, and under their poverty reduction programme they have allocated K285 million for mobilisation of communities into sports sectors and K300 million for rehabilitation of three provincial stadia and K30 million for strategic planning for youth sport- a further K200 million for focus on sports all this and more in the name of poverty reduction programmes! Not to be outdone, the Department of Youth Affairs has allocated itself K851 million for office administration and a further K334 million will be spent on review of the National Action Plan, and between 31 Youth Institutions/Centres will get K3 billion. A further K30 billion has been allocated to Youth Empowerment Fund.

This will require supervision and monitoring, so a total of K869 million has been allocated for this purpose. The Department of Child Affairs has allocated itself K489 million for office administration, while they will spend K528 million between 31 child-related institutions like child-care and adoption societies, orphanages, street children, YMCA and YWCA, among others. Under their poverty reduction programme for rehabilitation and reintegration of street children they have allocated a total of K3.20 billion.

The Ministry of Defence HQ has allocated K2.67 billion for office administration just a little more than the very important Ministry of Sports, Youth and Child Affairs. The total defence budget is K809 billion, as compared to K741 billion in 2006. The Zambia Security and Intelligence Service gets K31.68 billion for office administration, up from K20 billion in 2006.

They spent K13 billion in 2006 on procurement of “moveable assets”, but this year they are being kind to the Treasury and will only spend K1.8 billion, but also spend K5.7 billion on “construction of fixed assets”. Last year they spent K27 billion on “operations” and this year K30.5 billion. Their total budget in 2006 was about K165 billion, and this year its K184 billion.

At the Ministry of Education, under poverty reduction programmes, K38 billion has been allocated for the University of Zambia’s (UNZA) outstanding bills from 2006 and about K8 billion for new staff at the country’s third university, when we cannot even properly manage the existing two universities. Students loan and bursary award for UNZA from K40.5 billion in 2006 reduces to K24 billion and from K20.2 billion in 2006 to K10.5 billion for Copperbelt University (CBU). Enhancement of UNZA student’s welfare and learning gets K25 billion, while CBU gets K10 billion.

Research and University education at UNZA gets another K74.9 billion and CBU gets K27.9 billion. An allocation of K737 million has also been set aside for negotiations with the unions, from zero in 2006. K12 billion has been allocated for construction of student’s hostels at public universities, of which donors have funded K2 billion.
At the Ministry of Lands, K1.6 billion has been set aside for office administration and the office of the minister gets K462 million, while the permanent secretary gets K257 million. Renovations to their offices have been budgeted for K215 million.

Under the Human Resource and Administration Department K200 million has been allocated for land policy formulation and review of regulatory framework. The ministry has allocated K2 billion for civil works under Land Development Fund, K100 million for “systems” development and K170 million for monitoring and evaluation of Land Development Fund projects. Staff development gobbles up another K256.5 million. Under the Lands and Deeds Registry office registration of properties gets K10 million, while production of Certificate of Title Deeds gets K120 million. The Lands Department gets K1.17 billion for office administration.

Under their poverty reduction programme the Lands Department boundaries has allocated K123 million for land advocacy. The Survey department, under their poverty reduction programme has K1 billion allocated for demarcation of the Zambia-Malawi/Congo DR and a further K1.67 billion for survey of “special” projects.
The Anti-Corruption Commission gets K1.758 billion to procure motor vehicles, while much of their other activities are funded by the donors. The Ministry of Agriculture HQ gets K311 million for office administration, far less than the ministries of sports and of lands, but probably hidden elsewhere. However, the Policy and Planning Department gets K713 million for its office administration and K729 million for them to prepare MTEF estimates in 2007.The rest of policy and planning work is being funded by our donor friends.

Under the Agricultural Department’s poverty reduction programme K113 million has been allocated for “review” meetings under their extension monitoring and evaluation programme and a further K137 million for “backstopping and monitoring”, while K100 million goes to support community micro projects, peri-urban irrigation development gets K1.49 billion and support to irrigation equipment manufacturing gets K525 million.

The Agribusiness and Marketing Department gets K144.5 billion for procurement and distribution of inputs, but fully funded by the Japanese government, while the government resources of K2.12 billion will be used for “identification of farmers and hire of transport” and K1.4 billion will be used for programme coordination and another K1.5 billion for logistics and operations. K205.5 billion has been allocated to purchase National Food Reserves, up from K140 billion in 2006. Under the Co-operatives Department, K802 million will be used for Co-operative database management and another K1.31 billion for “backstopping on co-operative inspections”.

The review and development of co-operative manuals will gobble up K1.9 billion and training of co-operators has been allocated K2.14 billion. While “backstopping on distribution of developed promotion materials” will get K1.42 billion. Under the National Agricultural Information Service poverty reduction programme K1.2 billion has been allocated for agricultural show facilitation and participation and distribution- whatever that means!

Now for icing on the cake! How much do you think it costs to run ministers, deputy ministers and permanent secretaries offices? Here is a sampling. On top of the league is the minister of communications at K3.7 billion, followed by the sports minister at K2.08 billion for their office expenditure. The home affairs minister has allocated himself K K1.8 billion for office expenditure and K862 million for international travel in 2007. The health minister and her permanent secretary have allocated themselves K1.183 billion for office expenditure and K723 million for foreign travel.

The labour minister and his permanent secretary have allocated K550 million, the community development minister, her permanent secretary and directors have awarded themselves K414 million for office expenditure, while the tourism minister gets K710 million, his permanent secretary K149 million and director of human resources K114 million to run their offices.

The energy minister’s office expenditure has been budgeted for at K200 million, while the foreign minister at K331 million. The local government minister and her permanent secretary have allocated themselves K879 million, up from K175 million they got in 2006. Most, but not all of the other ministers have “hidden” either their office and or travel expenses under ambiguous headings, like the Minister of Finance. And yet Magande in his Budget speech asserts that there may not be enough money to provide a lower tax regime for individuals and business - no wonder, because government is on a serious consumption expenditure binge and mostly they have disguised it under their so-called poverty reduction programmes.

Under Constitutional and Statutory Expenditure K129 billion has been allocated to pay external debt and K656.5 billion to pay internal debt. While Constitutional posts gets K25.78 billion and medium term pay reform for the civil service is budgeted for K258.445 billion, from K298.48 billion in 2006. The grand total of the estimates of revenue and expenditure is budgeted for K12.042 trillion.

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