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External Evaluations and Research

External Evaluations and Research. Ministry of Finance and National Planning – Zambia. Introduction. Experiences in preparing for and undertaking the assessment Findings in relation to policy based budgeting Lessons learnt and best practices. Purpose and Scope of the Annual Evaluation.

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External Evaluations and Research

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  1. External Evaluations and Research Ministry of Finance and National Planning – Zambia

  2. Introduction • Experiences in preparing for and undertaking the assessment • Findings in relation to policy based budgeting • Lessons learnt and best practices

  3. Purpose and Scope of the Annual Evaluation • The purpose of the evaluation undertaken in 2005 was to assess the current status of the Zambia PFM system based on the PEFA indicators in order to set a baseline for the continued use and assessment of these indicators Note: The Evaluation Team consisted of four members appointed by GRZ and two independent consultants

  4. Purpose and Scope of the Annual Evaluation • The evaluation was conducted in three phases: 1) inception phase; 2) field phases (2 weeks) and 3) final report phase • The evaluation involved: • Collecting and analysing existing documentation on the Zambia PFM • Roundtable discussions with stakeholders on scoring of the PEFA indicators • Collecting data and information from interviews with key stakeholders and individuals with key responsibilities within the PFM system

  5. Role of Stakeholders • The evaluation team consulted relevant stakeholders as necessary inputs in the evaluations. The included among others; • Members of Parliament (key to policy based budgeting) • Cooperating Partners (key to indicators related to donor practices) • Government Institutions such as the Zambia Revenue Authority, Office of the Auditor General, Zambia National Tender Board e.t.c

  6. Budgetary Process • Article 117 (1) of the Constitution of Zambia, being Act No. 18 of 1996 mandates the Minister responsible for Finance to present the budget for approval by the National Assembly within three months (90 days) from the beginning of a financial year that it relates to. • To this effect, the budget is presented in January and approved by the end of March. Therefore, between January and March, government operates on a provisional warrant signed by the President pending approval of the budget

  7. (i) Existence of, and adherence to, a fixed budget calendar (ii) Guidance on the preparation of budget submissions The Budget Circular includes timetable for budget preparation by all stakeholders Cabinet meets more than once to chart the course of the Budget Findings in Relation to Policy Based BudgetingPI-11 Orderliness and participation in the annual budget process B B A

  8. (iii) Timely budget approval by the Legislature The budget is usually approved in March, 3 months after the beginning of the fiscal year. This in line with the Constitution but contravenes good PFM principles Findings in Relation to Policy Based BudgetingPI-11 Orderliness and participation in the annual budget process D

  9. (i) Multi-year fiscal forecasts and functional allocations The Green Paper (MTEF) covers forwards estimates for the fiscal aggregates ,including macro/fiscal indicators and the economic classification, and included ceilings for budget heads Findings in Relation to Policy Based BudgetingPI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting C+ c

  10. (ii) Scope and frequency of debt sustainability analysis Debt sustainability analyses, covering both domestic and external debt, have been carried out annually for the past three years Findings in Relation to Policy Based BudgetingPI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting A

  11. (iii) Existence of costed sector strategies (iv) Linkages between investment budgets and forward expenditure planning Sector strategies have been prepared as part of the national planning process Links exist with further strengthening required Findings in Relation to Policy Based BudgetingPI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting C c

  12. Lessons Learned • The introduction of the Medium Term Expenditure Framework (MTEF) budgeting and planning allows for the budget preparation process to commence early;. • All spending agencies have used Activity Based Budgeting (ABB) procedures to explicitly link their budget allocations to service delivery and other targets • It makes the budgeting process more transparent and the Executive wing of Government more accountable.

  13. Lessons Learned • Zambia has set off on a process of substantially reforming the Public Finance Management system. • A comprehensive Public Expenditure Management and Financial Accountability (PEMFA) reform programme has been designed in co-operation between GRZ and the donors • The PEFA assessment allowed GRZ to focus on identified weak areas with resources to drawn from the PEMFA programme

  14. Conclusion • To further improve budget preparation, several options avenues are available which are: • Legislative : comments were submitted to the Constitutional Review Commission (CRC) to improve on areas that contravene good PFM principles • Consultations: the MOFNP is widening the stakeholder base to improve “ownership” of the Budget

  15. Thank You

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