The Auditor General’s report on the accounts of parastatal bodies has revealed that government institutions failed to settle statutory obligations to NAPSA, ZRA and other authorities in amounts exceeding K1.7 billion during the 2017 financial year.
“Failure to settle Statutory Obligations ranks highest at K1.7 billion. The implication for this irregularity is that government is deprived of the much needed revenue in the case of non-remittances; and for NAPSA and LASF contributions this may disadvantage employees of their benefits at the time of termination of service,” warned the Auditor General.
These irregularities that the Auditor General has revealed are the exact same things that we have been highlighting – governance problems in parastatals, where the top leaderships don’t follow their own documents and guidelines. What the Auditor General is simply saying is that there is free will of financial abuse in these institutions and nobody is there to stop the rot.
Take the Industrial Development Corporation for example; according to the Auditor General, IDC awarded unsupported leave pay to selected employees exceeding K1.4 million in 2017 alone, while irregular salary increments to some selected staff hit over K154,000. Among the companies owned by IDC, Times of Zambia failed to remit over K670 million, the Zambia Daily Mail over K109 million, among others.
If IDC can’t follow the guidelines of the employment terms and conditions of service, how can it be expected to follow the investment guidelines? How can they be expected to act in the interest of Zambians if they can’t act in the interest of the company itself?
If IDC, the parent company of State owned enterprises, charged with the responsibility of providing oversight on the subsidiary company operations, is committing such irregularities, what do you expect to see at Times of Zambia or Zesco? How can IDC enforce accountability of resources at Zambia Daily Mail or any other company that is managed by this government portfolio?
IDC already has inflated salaries – according to what we heard in a court matter involving one of its former employees, a director at IDC gets over K130, 000 per month. How annoying can it be for the starving members of the public to hear that this is the institution that is awarding employees illegal salary increments and paying them illegal leave benefits?
We have said it before, the Auditor General is now only providing us proof of resource mismanagement. This is no longer us talking, it’s not a member of an opposition party trying to gain political mileage, this is their own government employee raising the red flag on abuse of public resources by parastatals. These people don’t mind about good governance and that is the beginning of the long chain of problems.
What is happening to the economy is what will happen to the parastatals. This debt crisis, loss of productivity and human resource uprising will soon hit individual State owned institutions and there will be no viable recovery plan, because everyone involved is minding their own pockets. Look at the figures in the Auditor General’s report, and that’s just for one year – 2017. It’s only a matter of time before parastatals blow up.
How embarrassing is it to claim that you are making profits and purport to declare dividends to us citizens, the real Zambian shareholders of IDC and its parastatals, only to be told by the Auditor General that actually, you have not been remitting statutory obligations amounting to hundreds of millions? What profit are you talking about then? How can you make profit if you owe this kind of money? How can you have the luxury of buying loss-making companies when you owe this kind of money?
Actually, excuse us Mr Kaluba. Yes, you may be incompetent, but these questions must be directed to the board chairman of IDC, not you. Mr Edgar Lungu, sir! It’s you we are talking to now. The Auditor General is saying the companies which you supervise under IDC have broken the law by failing to remit close to a billion kwacha to ZRA, NAPSA and other authorities. Remember we warned that you should step away from that responsibility at IDC in order to provide independent oversight, but you thought we were being malicious. Who are you going to question for these irregularities now?
Mr Lungu and your ZRA, you shut down The Post Newspapers on claims that the company owed K52 million in taxes between 2009 and 2016. The Auditor General is telling us that under IDC just one company alone is owing over K670 million which it failed to remit in taxes in one year only. How does this reflect on you Chairman President? Will you send ZRA to move in on those institutions to recover the much needed revenue?
We are asking these questions because if you say failure to remit statutory fees is criminal, then it’s nothing less than satanic to target the week institutions with law enforcement, leaving those that are enriching you.
We submit: IDC management is incompetent and must be removed. The board of IDC has failed to provide oversight and needs to be dissolved. The chairman of this entity cannot be Head of State, unless it’s a deliberate ploy to plunder resources under the protection of Presidential immunity. But even stealing must have some rules!