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Govt shouldn’t give up on IMF bailout package yet – PMRCBy Mirriam Chabala on 23 Oct 2018
The Policy Monitoring and Research Centre (PMRC) has advised government to continue pursuing the IMF economic bailout programme for the country, saying the package is important for balance of payment support.
And PMRC has called for the enactment of critical policies under the Medium Term Debt Strategy (MTDS) to provide for enhanced oversight over government’s borrowing activities, which would also compel government to seek the National Assembly’s approval, before loans are contracted.
In a statement, PMRC executive director Bernadette Deka stated that the fact that Zambia needed a bailout package from the International Monetary Fund (IMF), widely expected to be around US $1.3 billion, could not be overemphasized.
“The importance of the IMF package to Zambia cannot be overemphasized. Zambia needs an IMF package. We have been submitting to government to pursue the IMF bailout programme for balance of payment support for as long as the bailout terms and conditions are favourable to all Zambians by consolidating growth. As a matter of fact, the IMF presents affordable finance and is significantly more affordable than commercial borrowing from domestic and international markets and, thus, PMRC encourages the government to continue pursuing an IMF package that complements our home-grown Economic Stabilization and Growth Programme (ESGP),” Deka stated.
“The IMF package would further complement the government through technical assistance on fiscal management, as well as offer external accountability of fiscal and growth policies for the country. In view of the foregoing, we also commend the Ministry of Finance for instructing all Ministries to concentrate [on] arrears dismantling to areas that will significantly reduce Non-Performing Loans (NPLs) and release liquidity to the private sector. In the meantime, PMRC remains hopeful that the upcoming engagements with the IMF will result in a positive.”
And Deka expressed confidence that the World Bank’s support to the country’s Office of the Auditor General would supplement government’s efforts towards the fight against corruption.
“The World Bank has offered additional support for capacity-building to institutions responsible to fighting corruption, e.g. Office of the Auditor General and others, to enhance accountability and transparency in the use of public funds in order to restore confidence by donors. PMRC is confident that this support to the AG’s Office and other offices will enhance ongoing efforts towards the fight against corruption. PMRC continues to advocate for increased capacity-building in organisations, such as the office of the AG in its annual analyses of the AG’s reports,” she stated.
“Another strategic realignment that we have observed is the elevation of the office of the Chief Internal Auditor to the level of Permanent Secretary, giving the office more power to execute various tasks, advancing accountability and transparency. PMRC is of the view that this decision is necessary in order to promote accountability of government resources and to strengthen the levels of internal controls. PMRC continues to play its role by conducting seminars and workshops for key enforcement bodies and the media, respectively, to enhance capacity in execution of their respective mandates.”
Meanwhile, Deka stated that the PMRC was hoping that those plundering resources meant for the vulnerable would be dealt with, according to the stiffer provisions of the revised Act in line with the provisions in the revised Public Finance Management Act 2018.
“The 2019 national budget commits that government will maintain the target of 700,000 beneficiaries on the Social Cash Transfer (SCT) scheme next year, and will scale-up the number in subsequent years. We have been closely monitoring the impact of the SCT and several positive impacts have been demonstrated to date, including reduced poverty in beneficiary areas; increased food security; improved child wellbeing; improved living conditions and asset ownership, among others. In view of the current administration lapses, abuse and mismanagement under the SCT, we expect that in accordance with the provisions in the revised Public Finance Management Act 2018, would-be offenders will be dealt with, according to the stiffer provisions of the revised Act,” Deka added.
“In view of the challenges faced during the implementation of SCT in Zambia, PMRC recommended that government invests in increased capacity-building for integrated management systems.
“Improved electronic management systems would provide for reduced duplication and effective targeting of beneficiaries, thus, prompting efficiency in the administration of the programme, increase incentives to community members. This will motivate individuals to volunteer and play an active role in the implementation and monitoring of the SCT programme. Additionally, adequate resource allocation towards the sector will provide for increased capacity, incentives to community members and increased target areas of beneficiaries.”
PMRC further called for the enactment of critical policies under the Medium Term Debt Strategy (MTDS) to provide for enhanced oversight over government’s borrowing activities, which would also compel government to seek the National Assembly’s approval before loans are contracted.
“PMRC calls for the enactment of critical policies under the Medium Term Debt Strategy, such as, the Loans and Guarantees Act cap 366 of the laws of Zambia, which would be the mandate, used for the administration of the strategy. The Bill would further provide for enhanced oversight over the borrowing activities of the government by having the National Assembly approve loans before they are contracted. Other critical legislation that needs to be enacted is: the Public Procurement Bill, as well as the National Planning and Budgeting Act,” stated Deka.
About Mirriam Chabala
Mirriam covers current affairs and writes in-depth feature articles on social issues.
Email: mirriam [at] diggers [dot] news
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