Mazabuka council unveils K37bn 3-year budget
By Henry Chibulu in Mazabuka
Mon 27 Dec. 2010, 04:00 CAT
MAZABUKA municipal council has unveiled a K37 billion budget to begin next year covering three years. Mayor Davis Katowa, who disclosed this during a full council meeting held in the Mazabuka council chamber, said the budget would be implemented under a Medium Term Expenditure Framework (MTEF).
Katowa explained that in next year's budget, the council estimated to spend K11.8 billion and would concentrate its expenditure on road rehabilitation, solid waste management system, capacity building, health education and inspection among other programmes.
He added that in 2012, the council would spend another K11 billion while in 2013, K13 billion would be utilised.
He also informed the meeting that the Ministry of Local and Government Housing had directed the local authority to adjust upward by 10 per cent salary and other conditions of service for council workers.
Katowa said in view of the directives to improve conditions of service for council workers, subsistence allowance for the town clerk had been increased from K350,000 to K500,000, directors and their deputies would now receive K450,000 from the previous K 320,000.
Lunch allowance for management staff has been increased from K100,000 to K150,000 for work performed outside the district while that of unionised workers has been pegged at K100,000 from K70,000.
Meanwhile, the local authority is expected to rehabilitate and maintain over 10 roads of economic development to the district next year at the cost of K698,452,004.
Enforcement and maintenance of law and order has been allocated K6.1 million. The budget for personal emoluments is K3.7 billion.
Katowa said the council estimates to spend K120,755,000 for capacity building and another K814,928,892 for solid waste management while health education and inspection will gobble K90,145,000.
He said the resources for the MTEF would be realised from local tax, national support, fees and charges.
He observed that under national support, the council would only receive a total of K1,565,383,686. Local tax will contribute K4,505,050,412 while K1, 508,067,420 and another K1,296,500,000 will be raised from charges.
Katowa said the budget, which had since been approved by a full council meeting, was a milestone for the local authority particularly that workers' conditions of service would be improved.
Labels: MAZABUKA DISTRICT, MTEF
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Ndalamei questions RDA’s failure to scrutinize, approve road contracts
By Ernest Chanda
Thu 24 June 2010, 04:01 CAT
SECRETARY to the treasury Likolo Ndalamei yesterday expressed surprise that the Road Development Agency (RDA) board did not have a hand in scrutinising and approving road contracts when the law empowered them to do so.
And Auditor General Anna Chifungula has called for an investigation to establish
how many contracts were signed during the time late president Levy Mwanawasa fell ill, through the time he died and when the country held the presidential election.
Appearing before the parliamentary public accounts committee (PAC), Ndalamei wondered what RDA board’s role was if they could not participate in awarding of contracts.
Ndalamei was responding to PAC chairperson Emmanuel Hachipuka who wanted to know if it was in order for the RDA board not to participate in the awarding of road contracts when the law empowered them to do so.
"It is strange that the RDA board does not participate in approving contracts. The law provides that they also participate and if they don't do that where is corporate governance? In fact according to the Act everything RDA does should be cleared by the board,” Ndalamei said.
“The board should make the agency accountable in whatever it does and the board should subsequently be made accountable for everything that RDA does. Otherwise what's the essence of their existence as a board if they can't participate in such a serious undertaking?"
On over-commitments, Ndalamei said his office could not be blamed for late or non-release of funds as alleged by RDA management because all the funds were released in 2009 as budgeted.
"I will not comment about other years because there are people who were there. But in 2009 all monies budgeted for on roads were released with supplementaries."
He said in 2008 the budget was K501 billion and K648 billion was released while in 2009 the budget provided for K715 billion and K822 billion was disbursed, with a supplementary of K116 billon.
“And I can also say that for 2010 all the monies will be released with supplementaries. And for this year we have even gone out mobilising additional resources for roads so that there is no excuse on why some of our budgeted roads cannot be worked on. And when I talk about meeting the budget allocation in terms of resources I'm talking about government resources, not donor money," he said.
When asked by Chifungula whether his office makes institutions such as RDA understand the meaning of the mid-term expenditure framework (MTEF) which they used as part of their excuse for over commitment, Ndalamei urged RDA to rely on the national budget provisions rather than MTEF.
"As for MTEF and the issue of multi year contracts, an institution is not supposed to commit based on MTEF figures on the green paper. Those are just indicative numbers for planning purposes. Institutions should follow the budget so that they do not overcommit," Ndalamei said.
And Chifungula called for an investigation into the number of contracts awarded in 2008.
She said a lot of very big contracts were signed when the President was ill and he subsequently died.
“ I remember that earlier in the same year 2008 42 companies were blacklisted by government. And let me take this opportunity to make it clear that my office did not recommend for the blacklisting of these companies, we only recommended for 10 companies. Of course government had their own inquiry system and they brought in more companies,” Chifungula said.
“…The number of contracts signed during that period is just too much. Since you are in control of the treasury maybe you should find someone to investigate financial crimes because to me this seems to be a serious matter of investigation.”
In response, Ndalamei said the government could investigate the matter.
"Normally we the civil servants don't comment about matters of a political nature, that is for you politicians. In any case I will comment in this way, that we can investigate how many contracts were signed that year and find out if the money was available for those contracts," said Ndalamei.
This prompted Hachipuka to say that he too had authority under Parliament to call for such an investigation.
Labels: ANNA CHIFUNGULA, AUDITOR GENERAL, CORRUPTION, EMMANUEL HACHIPUKA, LIKOLO NDALAMEI, MTEF, PAC, RDA, ROADS
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Floods threaten agribusiness
By Joan Chirwa
Tuesday January 22, 2008 [03:00]
ZAMBIA’S agribusiness is likely to face a serious hitch this season owing to the current rainfall pattern, as the country is projected to slip from being competitive on the export market. And the
World Development Report (WDR) 2008 has emphasised the need for
greater investments in agriculture in developing countries in view of the sector’s
high potential for job creation.
Commenting on this season’s rainfall pattern and the likely impact on agri-business, Small Holder Enterprise and Marketing Programme Agribusiness Development Component (SHEMP-ADC) team leader, Gerrit Struyf said there is a likelihood of reduced crop yields and subsequently, farmer incomes due to heavy rains.
Struyf said the above normal rainfall being experienced in the country had both negative and positive impacts; although the former outweigh the latter considering that Zambia was largely dependent on agriculture for household incomes, food security as well as overall economic growth.
“The heavy rains over the last six weeks will especially affect large parts of the Southern, Central and Eastern provinces. It will mainly affect cotton, being a crop which needs warm conditions and cannot withstand water logging,” Struyf said.
Following last year’s campaign by the ginning companies and Cotton Association of Zambia, more farmers have this season planted the crop. However, they are likely to get less income from cotton due to the expected low production despite the current attractive prices on the international market.
According to the Cotlook Index, international cotton prices have gone up by 30 per cent over the last few months, and local farmers would be in a position to benefit from the boom if production is enhanced.
“The prices of cotton on the international market are very strong and it will be a pity for cotton farmers not to benefit from this due to poor harvest due to current climatic conditions,” Struyf said. “This year’s rain is likely to reduce crop yields per hectare.”
Struyf further said reduced maize production resulting from poor climatic conditions would make it difficult for Zambia to benefit from regional export markets.
“The high rainfall will definitely affect yields for maize due to leaching of fertilisers from soil and water logging and shortage of sunlight. International grain prices are expected to continue to be strong in the coming year,” Struyf said. “Reduced Zambian maize production will make it difficult for Zambia to benefit from regional export markets to Zimbabwe and the DRC.”
On the other hand, Struyf indicated that the heavy rains would have a positive effect on the falling water tables in the Southern and Eastern Provinces for the improvement of livestock and irrigated production perspectives.
The Meteorological Department last week forecast reduced rains over the Southern half in the short term, although most parts of the country are expected to record normal to above normal rainfall throughout this season.
The heavy rains being experienced in the country have claimed lives of a couple of individuals and rendered hundreds of people homeless, with serious threats of food insecurity.
And WDR 2008 has established that agriculture employs 65 per cent of the sub-Saharan Africa labour force, generates 32 per cent of the region’s GDP, and is about four times more effective than non-agricultural growth in reducing poverty.
“However, farm productivity is lagging behind, threatening to push millions of people into poverty,” the report noted.
The WDR 2008 warns that the agriculture sector must be placed at the centre of the development agenda in order to achieve the goals of halving extreme poverty and hunger by 2015, as set out in the Millennium Development Goals (MDGs).
Titled ‘Agriculture for Development’, the report says the agricultural and rural “While 75 per cent of the world’s poor live in rural areas in developing countries, a mere four per cent of official development assistance goes to agriculture.
In Sub-Saharan Africa, a region heavily reliant on agriculture for overall growth, public spending for farming is also only about four per cent of total government spending and the sector is still taxed at relatively high levels,” the report stated.
“For the poorest people, GDP growth originating in agriculture is about four times more effective in raising incomes of extremely poor people than GDP growth originating outside the sector.”
In the case of Zambia, budgetary allocation to the agriculture sector is slowly getting close to 10 per cent of the total national budget.
The Economic Commission for Africa (ECA) and the African Union Commission (AUC) have also intensified their efforts to compel African countries to allocate at least 10 per cent of their budgets to agriculture.
For example, in the 2006, the government allocated 5.5 per cent of the budget towards agriculture and the figure rose to 8.8 per cent the following year (2007).
The report states that a dynamic ‘agriculture for development’ agenda could benefit an estimated 900 million rural people in the developing world who live on less than US $1 a day, most of whom are engaged in agriculture.
World Bank president, Robert B Zoellick, has also emphasized the need for giving agriculture more prominence across the board.
Zoellick said countries must deliver on vital reforms such as cutting distorting subsidies and opening markets, while civil society groups especially farmer organizations need more say in setting the agricultural agenda.
And Zambia National Farmers Union (ZNFU) executive director, Songowayo Zyambo, said a much higher allocation to the agriculture sector is expected out of this year’s budget as opposed to what was stipulated in the Medium Term Expenditure Framework (MTEF).
Zyambo said according to the MTEF, the agriculture sector is likely to receive slightly lower funding compared to last year’s 8.8 per cent of the national budget.
“We need to see more allocation towards infrastructure development in agriculture, livestock disease control and irrigation.
The target is for most African countries to start allocating at least 10 per cent of their total national budgets towards agricultural development because most of African countries are heavily dependent on agriculture for economic development,” said Zyambo.
Labels: AGRIBUSINESSES, ECA, FLOODS, MTEF, RAINFALL, WDR 2008
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Mismanaging our mineral resources
By Editor
Friday November 16, 2007 [03:00]
THE renegotiation of copper mining agreements is an important process which requires a lot of seriousness. And it is good that Levy Mwanawasa’s government has admitted that the copper mine deals were poorly handled and there is need to have another look at them. How we wish Levy and his government had paid attention to various stakeholders who raised alarm over the fact that the mining deals had not been carefully and fairly handled. However, the renegotiation process is a step in the right direction because this is the only way Zambians will be guaranteed some benefits from copper and other mineral resources.
However, looking at the recently released Medium Term Expenditure Framework (MTEF) or the Green Paper, we have some issues to raise with the government over the way it intends to deal with the mining renegotiations. Specifically, we are interested in the line which states: “In order to facilitate new large scale mining ventures, government’s focus will be developing capacities in geological and structural mapping including acquiring geological laboratory facilities and equipment.
In addition, more effort will be made in undertaking mineral exploration and resource surveys such as petroleum and uranium exploration. Government will also focus on small scale mining development and technical support by, among other things, providing revolving funds and technical services in geology”.
According to the MTEF, the Ministry of Mines and Mineral Development has been allocated K43 billion in 2008 of which K15 billion is for strengthening institutional capacity and K5 billion for personal emoluments. In 2007, royalties were budgeted for at K77.34 billion and projected by end of December 2007 at K72.76 billion. In 2008, royalties have been projected at K72 billion while K79 billion is for 2009 and K86 billion is the projection for 2010.
Looking at the MTEF projections, it is obvious that the government is not expecting much more royalties even with the expected re-negotiations with the mining companies.
To us, this is disgraceful and scandalous. Despite all this, the reality on mining and prospecting licensing management on the ground is appalling. In June 2007, the Minister of Mines and Mineral Development announced that his ministry was undertaking an audit of issued licences and that there were plans to cancel licences that were not used. In a speech read on behalf of Levy, the minister warned: “Use it or lose it”.
As we near the end of the year, we are yet to see any action on this. Surely, after six months, has the audit not been completed? If it has been completed, and in public interest, we need to know what the findings were. In our November 14, 2007 editorial we stated that there was total confusion in managing prospecting and mining licences at the Ministry of Mines and Mineral Development.
From the most recent prospecting maps, which we have had sight of, it will baffle any Zambian to know that almost the entire country mineral resources for prospecting and/or mining have been given away to a few foreign mining companies. Today, very few prospecting or mining licences are being held by Zambians.
And in a handful of these foreign companies which hold most of the licences, a few Zambian elite either hold honorary directorships, legal advisory or have been given negligible share options. Perhaps these few Zambians have been asked either to front the foreign mining companies’ local operations or to help them “facilitate” with the government bureaucracy.
As if to add insult to injury, most of these foreign mining companies have been holding on to prospecting or mining licences for years, and in some cases decades and this too, illegally! There are also many instances in which the same area has been allocated to more than one licence holder. Do the director of mines and his staff not know how to allocate areas and read maps? It is also not uncommon for application files to go missing. Perhaps the projected allocation of K15 billion in 2008 to strengthen institutional capacity will help the ministry remove this gross incompetence.
The current mining law clearly states that if no prospecting is undertaken in a two-year period, the holder of such a licence loses it. In some instances the foreign holders of prospecting and mining licenses have even sold their rights to other foreign companies. Then there is the incredible bureaucracy that is involved in applying and obtaining prospecting and mining licences, to a point where it is one of the most infuriating exercises which takes any investor juggling and cajoling the staff at the Ministry of Mines headquarters and their various departments.
This is why we said the other day that the MTEF Green Paper is full of rhetoric; it’s just words, words and more words. And words which mean nothing.
We therefore urge Levy and his government to get more serious about the copper mining renegotiations because this is a very serious matter for the nation. We want to see action from Levy’s government over the renegotiations. A lot has been said but we have not yet seen action. Levy and his government should take a leaf from what is happening in Tanzania, where President Jakaya Kikwete has even set up a committee to look at mining contracts and a clear time-table has been given to those who have been given the task.
Just like in the case of Tanzania, we believe that the terms of reference for renegotiation should include going through all mining contracts and all other documents involving large-scale mining, the tax regime and in the mining sector, including issues that border on the rights of both investors and the government. This has to be done because we need to start managing our mineral resources properly.
Labels: DEVELOPMENT AGREEMENTS, MINING CONTRACTS, MTEF
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Rhetoric in the Green Paper
By 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.
Labels: IMF, MTEF
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Next year's budget will expose 'the reality' - Nonde
By Fridah Zinyama and Mutuna Chanda
Wednesday November 14, 2007 [03:00]
FEDERATION of Free Trade Unions of Zambia president Joyce Nonde has said next year's national budget will expose the reality of the much talked about growth in the Zambian economy. And Economics Association of Zambia (EAZ) committee member Bob Liebenthal has said the government needs to be commended for coming up with the Medium Term Expenditure Framework (MTEF) as it gives stakeholders a clear picture of what it intends to accomplish.
In an interview on the proposed 2008 budget and the Medium term Expenditure Framework (MTEF) for 2008 to 2010 which was launched by finance minister Ng’andu Magande last week, Nonde said what was being awaited was the truth on how much the government had done on the issues that they had committed themselves to, such as broadening the tax base and renegotiating the development agreements so as to increase revenue from mineral royalties.
“What we are expecting is for the government to tell us that they have broadened the tax base across many sectors so that there is relief on workers’ taxes. They have been talking about broadening the tax base and we want to see that in the 2008 budget,” Nonde said.
“We also expect them to announce by the time the budget is presented next year that the renegotiation of development agreements has been concluded so that we know how much is going to be committed to development resulting from that. There have been a lot of tax holidays mainly on foreign investors.
“If there is nothing on broadening the tax base and increasing mineral royalties then there would be nothing for the workers because we would not expect anything.”
She also said if the government continued borrowing huge sums of money to finance its activities, then the growth of the economy would be questioned.
“There is a lot of talk on the economy doing well but for whom? We should see the doing well of the economy reflecting in the reduction of problems for workers. If we are growing and our income as a country is increasing we must see a reduction in borrowing,” Nonde said.
In a separate interview, Liebenthal said there was need for the government to ensure that it puts measures in place to implement the good plans it had come up with.
Liebenthal said the Green Paper was a very welcome gesture by government as it gave stakeholders enough information and time to react to what the government was trying to do.
“Another thing to commend government about is that the Green Paper is being done in a three-year period. Other countries have been doing this for a long time now and it helps stakeholders to know what government is doing and allows the stakeholders adequately,” he said.
Liebenthal said the government had given priority to important sectors that dealt with uplifting the lives of people.
He added that on the macroeconomic level, the government’s targets were realistic as it was aiming for 7 per cent real Gross Domestic Product (GDP) growth.
Liebenthal said if government could control other factors like the exchange rate, the prices of food and fuel, the five per cent inflation target was achievable.
“And government’s intention to limit borrowing to one per cent of GDP is rather conservative,” he said. “However, it should be commended as there is no reason to continue borrowing if plans are not being well implemented.”
Meanwhile, Liebenthal observed that the government had been doing a terrible job in implementing most of the strategic programmes that it had been putting in place.
“Implementation is the most important of the part of the strategic plans that the government comes up,” he noted.
“If implementation is poorly done, then the strategic plans just end up being academic papers and of no use to anybody. And government should also try and indicate how they have spent the funds that they managed to raise. The paper doesn’t indicate anything on how money was spent.”
Meanwhile, Secretary to the Treasury Evans Chibiliti has urged the controlling officers to ensure that they implement the strategic programmes that government comes up with.
“The biggest problem that we have at the moment is implementation of these programmes,” Chibiliti said.
“Once we iron out these areas, we will be heading in the right direction.”
Labels: JOYCE NONDE, MTEF
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