Govt loses K600bn annually, says Lungu
Govt loses K600bn annually, says LunguBy Joan Chirwa
Tuesday March 20, 2007 [08:45]
THE government loses an average of K600 billion every year through expenditures losses and unreceipted revenues, Transparency International Zambia executive director Goodwell Lungu (right) has disclosed. Making a presentation under the theme: “Is the end of corruption in sight for Zambia?” at a discussion forum organised by the Zambia Institute of Purchasing in Lusaka on Friday, Lungu said the whole government system needed a complete overhaul.
He observed that losses to the national treasury had shot up to K700 billion in 2004, and statistics showed that much of the funds has been lost during President Levy Mwanawasa's administration. He said during the Second Republic under former president Frederick Chiluba's administration, the average losses were around K275 billion a year, but stated that the figures could be even higher since corruption was not widely spoken about that time.
Over a 20-year period to date, government has lost over K2 trillion in unaccounted-for money. “These figures are an indication that corruption remains an uphill battle and that its end is not yet in sight,” Lungu said. He said it was surprising that corruption cases, especially within the government systems, had continued to go up despite massive publicity on the dangers of corruption and its preventive measures.
He said a number of government departments and institutions had not been audited in some cases for over ten years, hence creating room for misappropriation of public funds by financial controllers. "A very good example is the University of Zambia. Last year it had problems and government sent auditors to the institutions but they failed to do the job because they did not find any information needed to carry out an audit," Lungu said. "Because of situations like this, Zambia is nowhere near ending corruption since we are still close to zero." Lungu hoped that the formulation of the Public Expenditure Management and Financial Accountability (PEMFA) under the Ministry of Finance and National Planning would help overcome imprudent financial management.
And Lungu urged the procurement staff in both government and private institutions to guard against corruption. He noted that government was the largest buyer of goods and services provided through procurement processes using taxpayers' money. "Total public procurement is estimated at US $485 million (15 per cent of GDP in 2001). If 10 per cent of this can be saved through better management of procurement policies, the gain to government coffers would be about US$ 83 million (approximately K400 billion)," Lungu said.
He said corruption in public contracting led to a distortion of fair competition.
"If corruption in public procurement is not contained, it will grow," Lungu said. "It is estimated that systematic corruption can add to 20-25 per cent to the costs of government procurement and frequently results in inferior quality goods and services and unnecessary purchases." Lungu noted that corruption was common in public procurement because it was easier to cover up one's tracks. Unofficial payments to get government contracts are also quite widely spread and managers report forfeiting up to 32 per cent of the invoice value to public officials in order to expedite contract payments from the government.
And ZIPS has lined up a number of discussion fora and workshops across the country aimed at educating its members on the benefits of transacting under laid down procedures in the procurement profession. ZIPS executive director Mwape Mutakila said the institution would now be strict on who carries out duties in procurement departments to help reduce corruption cases. "You will now have to be qualified to be in the procurement department. We have had too many unqualified staff in procurement departments. This is denting the profession," observed Mutakila.
Labels: CORRUPTION, INEFFICIENCY
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