Rhetoric in the Green Paper
Rhetoric in the Green PaperBy Editor
Wednesday November 14, 2007 [03:00]
At independence in 1964, Zambia was the richest country in sub-Saharan Africa. Twenty years down the line, it was one of the poorest with nearly 70 per cent of its population living in poverty. By 1982 Zambia, already highly indebted, faced financial and economic crises.
Between 1983 and 1995, the World Bank committed about US$1.4 billion to the country, 70 per cent of which was in support of structural adjustment. The aim was to help Zambia diversify its exports away from copper and to establish efficient import substitution in agriculture and industry.
Since the 1990s, the MMD government has continued structural reforms to the economy. However, as shown by the latest Green Paper, there is still weak ownership of the reforms.
Outside a very narrow group of politicians and senior officials, there is little ownership of the reform process. But we have to come to a realisation that civil society, like many other stakeholders in the country, has an important role in terms of its ability to provide input in the formulation as well as analysis of the impact of the budget on the economy. And this type of work is only possible when timely, reliable and comprehensive information is made available by the authorities.
The IMF programme in Zambia recently came to an end. However, looking at the recently released Medium Term Expenditure Framework (MTEF) for 2008 to 2010, the government seems to have agreed to continue with IMF monitoring its economic policies. It is unfortunate that the government has decided to continue with IMF policies and remain in bondage of the Washington Consensus.
Our understanding is that the government's recently released MTEF, or Green Paper, for the years 2008-2010 is ostensibly for the purpose of consulting stakeholders on the course of action with regard to Zambia's development agenda. As to how and when such consultations will take place before the 2008 budget is yet to be known.
Given that we have roughly about 75 days before the 2008 budget is presented to Parliament, for all practical purposes this so-called consultation seems to be a mere public relations exercise in futility. In our view, the Green Paper has been published just to please the IMF and donors.
It is important to stress that the MTEF is only a method of budget preparation, which involves better information on which to strengthen transparency and accountability. The MTEF process by itself cannot lead to improved fiscal discipline, accountability and open government; these will only happen if there are related reforms to democratic and public sector management processes.
As such, it is important to distinguish between the MTEF as a budget preparation process and the implementation of the budget, which is not part of the MTEF process per se. Thus, we ought to look at whether smaller fiscal deficits were planned as a result of the introduction of the MTEF rather than the actual out-turn. Higher deficits may be the result of a breakdown in budget implementation processes.
It is important for the MTEF to be introduced as part of an array of financial management reforms. The Secretary to the Treasury, Evans Chibiliti would have done well to have instead announced the time and place where these consultations would be taking place across Zambia. We hope that the government will adequately advertise the consultative meetings over this MTEF, although it is clear that time is running out. In any case, Chibiliti is candid in his comment when he says:
"My preliminary assessment is that we have not done much so far. This is because of the slow pace of project execution."
What is glaringly lacking in the twenty-two page Green Paper are possible ideas, solutions or remedies to overcome the problems described therein. As usual, the paper simply restates the age-old issues, constraints and intentions. For instance, Chibiliti says:
"Another impediment to broad-based and higher rates of growth has been the slow pace of implementation of structural reforms such as the Private Sector Development Initiative (PSD) and Public Sector Management and Accountability Reforms (PEMFA). We recall that these reforms were, only a few years ago, launched with much fanfare and expense. Tens of millions of dollars have been allocated to these two critical reform programmes." Yet Chibiliti says: "In this regard, the government will quicken the pace of implementation of these reforms."
The question is how? When? What are the reasons for slow implementation?
These are the issues that stakeholders need to know before they can provide their inputs and possible solutions. In our view, the government is already aware of where some of the delay in structural reform implementation has come from. In this regard, a few examples are appropriate.
Under the subject of "Expanding the Structure of Growth" the Green Paper states that the growth in the mining sector has had little impact on the majority of the population and will therefore target new growth opportunities and diversify exports in agriculture, manufacturing and tourism sectors, as well as expand electricity generation.
In tourism, the government will re-capitalise the Zambia Wildlife Authority (ZAWA), with K23 billion in 2008. Why? What happens to the money that ZAWA generates from fees and the support it gets from donors? The World Bank's Support for Economic Expansion and Diversification (SEED) project is being implemented very slowly by the Ministry of Tourism, as is the PSD by the Ministry of Commerce, Trade and Industry, which has about US$10 million grant money over a three-year period to implement PSD but the Green Paper is silent on how implementation will be improved.
On electricity generation, the Green Paper is loudly silent as to when the government will make a decision to open up the sector for private investment. There have been mixed signals on this issue, as to whether it will be ZESCO Limited and or the private sector. Why can't the private sector be allowed to invest in this sector without partnership with ZESCO Limited?
At the Ministry of Mines, there is confusion in managing prospecting and mining licences and most of the country has been allocated to very few foreign owned companies, leaving the idea of empowering Zambians illusive. The capacity for mine safety management has also not received the necessary support.
On public sector management, the government says it will focus on right-sizing, pay reform and payroll management. However, it should be recalled that public sector reforms started in the 1990s with the same focus. Therefore, what we need to know is whether the reforms have failed.
If so, why? The bottom line is that on key structural policies and reforms, the government is at a loss as to how and when implementation will be stepped up in order to support private sector-led growth. Even worse is that the government is equally silent on how management and implementation of its programmes will be improved.
As much as the MTEF can provide predictability in resource allocation to all sectors without a plan to implement structural reforms, what is the purpose of the rhetoric in the Green Paper? The government ought to get more serious with its economic and financial policies and programmes.
The people of Zambia are fatigued by the not-so-inspiring old stories contained in the so-called Green Paper.
posted by MrK @ 4:08 AM
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