Open Budget Survey (OBS) 2010

1. Open Budget Survey (OBS) 2010 Presented By Alexander Chileshe Economics Association of Zambia Open Budgets Transform Lives

2. Outline • What is the Open Budget Survey? • Some Global & Regional Impressions • How is Zambia Doing? • Zambia & the 8 Key Budget Documents • What Zambia Needs to do • Conclusion & Final Messages

3. What is the Open Budget Survey 2010? • A comprehensive survey and analysis that evaluates: • access to national budget information and opportunities to participate in the budget process, and • the strength of formal oversight institutions – national legislatures and auditors. • The quality of the survey is guaranteed by: • An independent and non-partisan country researcher; • Two independent anonymous peer reviewers per country; • Government review (in 45 of the 94 countries surveyed); and • IBP oversight and management

4. OBS Background • The International Budget Partnership created the Open Budget Survey to fill the global need an independent and comparative measure of government budget practices • The OB Survey (2010) is the third round since inception • In Southern Africa it examined 7 countries • These are - Angola, Botswana, Malawi, Mozambique, Namibia, South Africa and Zambia

5. General Impressions • Globally, growing emphasis on open budgets in past decade • Growing public interest on public resource utilization… • Expert conviction that budget transparency + effective checks & balances spur better and stronger social accountability systems • enhance credibility & prioritization of policy decisions, • limit corrupt & wasteful spending, • facilitate access to international financial markets,… • Budget transparency becoming quite central to a number of international development discourses… • financing of climate change mitigation, • to accounting for the revenues from the sale of natural resources, and • to examining the amount of international aid and how it is spent.

6. Key Finding 1: Major Gaps in Budget Transparency Worldwide • Overall score of 94 countries is 42 percent, i.e., less than half of the required budget data is public; • Only 21 of 94 countries surveyed provide significant information on budgets to the public; • In 41 countries surveyed, minimal and in some cases no information on budgets is published; • Public Availability of Certain Budget Reports Particularly Poor (Pre-Budget and Mid-Year Reports); • Some Published Reports Typically Lack Comprehensiveness (Year-End and Audit Report);

7. Key Finding 2: Average level in Southern Africa ‘still’ poor, while somewhat better than rest of the world … South Africaprovides extensiveinformation, with the highest score not only within the region but also among all the countries in the world. Botswana, Malawi, and Namibiaprovide some information, though this information is far less than what is required to obtain a clear understanding of the budget and to provide a check on the executive. In Angola, the DRC, Mozambique, and Zambiaonly minimal information is provided, severely hampering understanding of the budget and budget debate.

8. Key Finding 3: Countries in Southern Africa ‘typically’ fail to publish several important budget documents… • OBS 2010 examines the adequacy of 8 key budget documents that countries should publish. • Only 2 of the 7 countries publish Pre-Budget Statements, Citizens Budgets, and Mid-Year Reviews respectively • Some of those (not published) are produced, but are used for internal purposes only. • For instance, Angola and Malawi both have audit reports that are used for internal purposes but are not made public.

9. Analysis of Key Budget Documents Note: IU: document prepared for internal use only. NP: document not prepared. P: document made available to the public.

10. Key Finding 4: Amount of information provided in the EBP is not comprehensive • The majority of a country’s OBI score is determined by questions related to the Executive’s Budget Proposal… • This is a country’s most important policy and planning document. • Information contained in the EBP needs to be ‘more comprehensive’… • Angola, Mozambique and Zambiaprovides less than half of the information in the EBP, that is called for by the OB Survey • while Botswana and Malawiprovide about 60% of the information called for by the OB Survey.

11. Key Finding 5: General trend toward open budgets is quite favorable in the Region… • Budget transparency improved significantly in Southern Africa over the past few years, • with the extent of these gains mirroring gains in the rest of the world • Worldwide the series of Surveys (2006, 2008, and 2010) record substantial, and sometimes dramatic improvementsin budget transparency practices over the past four years. • For the 40 countries with comparable data for 2006, 2008, and 2010, the average OBI score goes from 47 in the 2006 Survey to 48 in the 2010 Survey.

12. Southern Africa Regional trends Progress has also been notable in Southern Africa. Three countries – Angola, Namibia, and South Africa -- have comparable data from 2006 to 2010. All of these countries increased their OBI scores over this period, with their average score rising from 47 to 48. Angola had one of the largest increases in transparency worldwide during this period, with itsscore rising by 21 points, from 5 to 26

13. Key Finding 6: Govt’s SHOULD commit to Principles of Oversight & Engagement in budget process… • In Southern Africa,budget engagement by Audit Institutions and Legislature is insufficient. • Further, the voice of the public is unnecessarily constrained. • Imperative that Govt’s should recognize that opening up public budgets means strengthening role of oversight institutions, and role of the public.... • However beyond information access, the absence of meaningful checks & balances is a recipe for waste, misplaced priorities, and, sometimes, outright corruption. • On average, legislature play too small a role in the budget process in Southern Africa, a finding that corresponds to the worldwide results. • Overall (94 countries) the 2010 OB Survey average score for legislatures’ strength in the budget process was 44%; • The 7 countries for Southern Africa, also averaged a score of 44%.

14. The Role of Legislature varies sharply By Country in the Region… • South Africais the only countrywhose legislature scores stronglywith Botswana coming close • in terms of its role in the budget process. • The budget roles of the legislatures of Angola, Malawi and Namibia are particularly weak.

15. The role of Supreme Audit Institutions also tends to be limited in budget process • Overall (94 countries) in 2010 OB Survey, the average scorefor assessing the strength of SAIs in the process was 49%; • among the seven countries of Southern Africa, the score averaged 45%. • SAI strength again varies sharply by country. • Botswana & South Africaare only countries whose SAIs play a strong role in the budget process, with excellent SAI scores of 73%. • With Zambia & Namibia coming close above and at 50% mark.

16. Summing Up - Legislature & Audit Institutional trends… • Angola, Malawi, and Mozambiquestand out as the countries whose legislature and SAI both play weak roles in the budget process… •  Only South Africa and Zambia have a score above 50on questions related to public hearings

17. Scores on Public Hearings (cont’d) In Angola, Botswana & Namibia, the budget discussion is ‘closed’. - As No public hearings are held.

18. Public SHOULD be given opportunities to engage directly with SAIs in budget process evaluation There are many mechanisms to provide this essential feedback loop, such as “fraud hotlines”. In South Africa, Angola and Malawiare the only countries in which the SAI has not established such communication, Nonetheless, the mechanisms established in other countries are typically insufficient., with Zambia scoring highest

19. How is Zambia doing? Overall Score • Zambia’s OBI 2010 Score is 36 out of 100: • The Zambian Government provides minimal information to the public in its budget documents during the year.

20. How is Zambia doing? • This score is significantly less than the average score for Southern Africa • Zambia’s score indicates that the Government provides the public with minimal information on the Central Government’s budget and financial activities during the year • Makes it difficult for citizens to participate in Economic Management & hold Government accountable

21. Zambia & The 8 Key Documents (1)Executive Budget Proposal (Yellow Book): score 39 Published but not comprehensive, available only on payment, copies also in short supply & sometimes not even available for purchase by those who can afford to buy: Major gaps in yellow book are: • Lacks data on expenditures & revenues for multi year periods • It lacks information on certain fiscal activities i.e. Contingent & future liabilities , extra budgetary funds etc (2) Pre Budget Statement: score 89 - Publishes a comprehensive pre budget statement (3)Enacted Budget: score 100 - Comprehensive

22. Zambia & The 8 Key Documents (4) Citizen’s Budget: score 0 - Does not produce (5) In-Year Reports: score 0 - Produced but not available to the public (6) Mid- Year Report: score 33 - published but lacks updated revenue estimates for the budget year under way (7) Year-End Report: score 33 - Published but not comprehensive (8) Audit Report: score 29 - published but not comprehensive. Does not include an executive summary or information on extra budgetary funds. Recommendations from the OAG also not included.

23. What Zambia Needs to do • Produce and/or Make widely available key documents • Executive Budget Proposal (Yellow Book) .e.g. PDF copy • Citizens’ Budgets – • Provide comprehensive budget information in Executive Budget Proposal

24. What Zambia Needs to do • Commit to principles of oversight & engagementin the budget process for effective checks and balances • National Assembly of Zambia should partner with CSOs & Universities to improve access to analytical power; • National Assembly of Zambia should provide the public with greater opportunities to attend and testify during budget discussions; • Auditor Generals Office should hold public consultations during the development, execution, and publication of audits. • Push for a Global Norm on Budget Transparencyby involving key champions of budget transparency • NAZ, OAG, GRZ, Development Partners, Professional Associations on Public Finance Mgt and CSOs…

25. Conclusion & Final Messages • Global Budget Transparency is Poor . . . • However, There Are Positive Signs of Improvement • Governments Can Improve Quickly and Easily • Transparency Enables Governments to Better Serve Their People, Especially Poor People who Rely Most on Public Services • International Action Can Spur Change in Countries

26. Thank you! For More information go to www.openbudgetindex.org