Tuesday, August 13, 2013

Donors concerned with country's fiscal situation
By Gift Chanda
Thu 25 July 2013, 14:00 CAT

ZAMBIA'S development partners yesterday said they were greatly concerned with the country's deteriorating fiscal situation.

But Secretary to the Treasury Dr Fredson Yamba said the country's debt and fiscal deficit positions were within sustainable levels.

During the first poverty reduction budget support (PRBS) review meeting for 2013 held in Lusaka yesterday, the cooperating partners, who provide poverty reduction budget support to Zambia, emphasised the need for sound fiscal management, saying it was an extremely important condition for budget support.

The partners said they were concerned that the budget deficit was expected to be much higher than planned, with significant gaps this year and next year.

"The fiscal trajectory sends a worrying signal on Zambia's performance," Kevin Quinlan, representative of the cooperating partners, said.

Quinlan, who is also head of the Department for International Development (DFID), said cooperating parents had, however, seen some policy decisions that align well with the goal of reducing poverty this year.

"These include the 2013 budget increases for health and education and frontline staff, a doubling of the budget for essential drugs and the removal of costly fuel subsidies that mainly were benefiting wealthier Zambians," he said.

"On the other hand, in some cases the government's decisions can appear to be inconsistent with the goal of tackling poverty. For example, the recent generous wage increases for public sector workers, whose income was already well above the poverty line."

He said the partners appreciated that the government wanted to pay its civil servants decent salaries but the large and mostly unbudgeted cost risks crowding-out resources for programmes targeted at the poor.

"Looking ahead, we appreciate that rewards are closely related to returns and so we urge the government to use the recent wage increase to leverage higher performance from the civil servants," Quinlan said.
On corruption, Quinlan said the cooperating partners appreciate the government's commitment to combating the vice.

"We also welcome the progress being made with the government's new strategy for strengthening Public Financial Management, as well as continued implementation of important reform programmes such as the decentralisation of public procurement and human resourcing. However, as budget support partners we remain concerned over the deterioration in the credibility and transparency of the budget in recent years and continued challenges with implementing the Integrated Financial Management System (IFMIS)," he said.

"We urge the government to take every effort to return to producing consolidated quarterly budget execution reports in a timely manner and to share these reports with cooperating partners in order to assist the government in monitoring the analysis of the budget execution."

But Yamba said the execution of the 2013 budget was on course despite recording a K900 million shortfall to finance the K2.5 billion expenditure budgeted for June 2013.

He also said the government remained committed to the fight against corruption as noted from the strong political will.

He added that there had been a rise in the number of corruption cases being prosecuted in the courts of law.

On peace, human rights, democratic principles and the rule of law, Yamba said the government was cognisant of issues of human rights and has taken measures to address them by signing international treaties on the promotion of human rights.

"Additionally, we have taken steps to revise the Sixth National Development Plan in line with the Patriotic Front manifesto," he said.

The cooperating partners said they shared concerns raised last week by the Human Rights Commission around on-going infringements of the freedom to assembly of opposition parties.

Quinlan said the cooperating partners consider an active and free opposition as an essential element of democracy.

"We are also concerned about recent allegations of constraints of freedom of the media in Zambia," Quinlan said, adding that the partners have further noted on-going debate on minority rights issues in Zambia.

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