President Edgar Lungu should show the same commitment he put in effecting major fiscal policy changes towards the fight against corruption and tax evasion to enhance the country’s fiscal position, says CSPR.
President Lungu has effected major fiscal policy changes at the Ministry of Finance and announced new austerity measures in order to get government out of its current debt crisis situation.
In a statement released last Thursday, Finance Minister Margaret Mwanakatwe stated that the Head of State, who was on a three-day state visit to Kenya, ordered cancellation of some existing loans, banned the issuance of letters of credit and guarantees to State-owned enterprises, terminated financing of development project that were below 80 per cent completion and cut down on ministerial travels with immediate effect.
Reacting to the announcement, CSPR executive director, Patrick Nshindano, explained that it was not enough to put in place austerity measures, while the country continued to experience unprecedented leakages and blatant theft through corruption and tax evasion practices as evidenced in the Auditor General’s and the Financial Intelligence Centre (FIC) reports.
He added that the pronouncements made by President Lungu and his government would bring about significant improvement in the country’s debt profile and attract partner support if fully implemented by government.
“As Civil Society for Poverty Reduction (CSPR), we welcome and commend government for the austerity measures aimed at containing the country’s debt, but also enhancing public finance management, which included, among others, the cancellation of some existing loans, banning the issuance of letters of credit and guarantees to State-owned enterprises, terminated financing of development projects that are below 80 per cent completion and cut down on ministerial travels with immediate effect. As CSPR, we believe that if the pronouncements made are fully committed to by government and implemented, this would bring about significant improvement in the country’s debt profile and also international confidence to attract partner support both in terms of private sector investment and grants, including IMF renewed negotiations and plan for balance of payment support,” Nshindano told News Diggers! in an interview, Friday.
“Debt has become one of Zambia’s biggest challenge towards national development and poverty reduction as evidenced through reduced fiscal space for economic and social spending with government emoluments and debt repayments taking up over 77 per cent of our national budget, leaving only 23 per cent for programme implementation. As we welcome the measures to be implemented to tackle this challenge, we are, however, wary of the country’s history in its failures to stick to plans as evidenced with the ‘Zambia Plus’ and the Medium-Term Debt Strategy to mention but a few.”
Nshindano called on government to back up its pronouncements with the enactment of long-overdue legal reforms, which included the Planning and Budgeting Bill and the Loans and Guarantees Bill, among others, to bring about much-needed budget integrity to the Ministry of Finance.
“The enactment of these critical Bills will not only make it easy for the Ministry of Finance to implement the measures, but bring about adherence and the much-needed budget integrity. It should be realised that no one can be held accountable in this country by a piece of policy pronouncement or document as we have already observed with the straying away from the debt strategy and Zambia Plus. More than ever, given the state of our debt and economy, it becomes critical that legal reforms that support the actualization of these pronouncement are done so that there is adherence and anyone who goes against the law is punished accordingly,” Nshindano advised.
“And in line with the debt sustainability and public finance management pronouncements, we reiterate and urge government, through the Ministry of Finance, to urgently table the remaining Bills before Parliament. This will lead to enhanced budget integrity, reduced wasteful expenditure, and alignment to the 7NDP (Seventh National Development Plan) for effective and efficient implementation of the national budget, but also stimulate growth and investor confidence necessary for sustainable development and poverty reduction.”
Nshindo further challenged President Lungu to show the same level of commitment he had demonstrated to putting austerity measures in order revive the country’s debt profile towards the fight against corruption and financial crimes.
“We are calling on the Head of State, President Lungu, to demonstrate the same level of leadership he has demonstrated in facilitating for these austerity measures towards the fight against corruption and tax evasion to enhance the country’s fiscal position. It’s not enough to put in place austerity measures, while the country continues to experience unprecedented leakages and blatant theft through corruption and tax evasion practices as evidenced in the Auditor General’s Report and the FIC Report. Austerity measures go hand-in-hand with prudent management of the nation’s resources, but also important to gain public support as the brunt of austerity is usually felt more by the poor and vulnerable. Citizens, therefore, must be confident enough that their sacrifice will be rewarded for the good of national progress and that resources are being used for their intended purposes, including investing in social safeguards such as; social protection and not being looted by a privileged few,” said Nshindano.