FINANCE minister Margaret Mwanakatwe says no public funds, whether donor or government funds, will be allowed to be misused in the wake of scarce resources for developmental programmes. And Mwanakatwe says the government is in full control of its debt and is addressing vulnerabilities of its debt profile.

According to a statement on the hosting of the IDA-18 high-level mid-term review meetings and cooperation with multilateral and bilateral partners, Mwanakatwe reiterated that with the strengthened Public Finance Management Act, officers found guilty of financial misconduct would be suspended, dismissed and/or prosecuted.

Cabinet on October 1 granted approval for Zambia to host the IDA-18 High-Level Mid-Term Review Meetings to be held from November 12 to 15 in Livingstone. Mwanakatwe stated that action had already commenced on the maladministration of the Social Cash Transfer Programme and the reported mismanagement of funds in the education sector.

“Government will progress the forensic audit in both ministries that will be the basis for final action. Similar action is being taken in ministries where mismanagement has been unearthed by auditors,” she stated. “No public funds, whether donor or government, will be allowed to be misused in the wake of scarce resources for developmental programmes. Those that misuse resources will be pursued through court processes and attachment of their personal property as provided for in the new Public Finance Management Act.”

Mwanakatwe stated that as part of the action to address misuse of funds, the government had already reimbursed the contributions of the United Kingdom to the social cash transfer programme as forensic investigations continue and better systems are put in place.

Mwanakatwe stated that cabinet’s approval to host the IDA-18 High-Level Mid-Term Review Meetings comes as an expression of the government’s continued efforts to maintain the cordial bilateral and multilateral relations with cooperating partners.

“As Zambia, we are proud to be hosts of this meeting that seeks to rid the world of poverty and developmental inequalities. As a beneficiary country, we will be privileged to offer our developmental experiences and the strides we are making in the different reforms in the development of the country, supported by our cooperating partners,” she stated.

She stated that as the country prepares for the meetings, President Edgar Lungu had assured the World Bank and other development partners, through its vice-president Hafez Ghanem, who visited Zambia from October 9 to 12, of Zambia’s commitment to transparent cooperation with all development partners, strengthening public financial management across the public service and increasing oversight over the debt of the country.

Mwanakatwe stated that the government was committed to enhancing economic governance through prudent financial management.

“Unlike in the past, government has prioritised institutionalisation of reforms. This is aimed at having sustainable reforms beyond the will of individuals in the office. This is an undertaking that the government has made in the economic stabilisation and growth programme pillar on improving financial governance. To this effect, the government enacted a new public financial management law which is more punitive than the old law,” she stated.

She further stated that the government had undertaken work to strengthen the Procurement Law and enact a new Planning and Budgeting Law.

Mwanakatwe stated that the government had also strengthened control systems in the IFMIS and rolled it out to all government ministries, provinces and spending agencies.

“We have also instituted measures to ensure strict control and use of imprest across government and upgraded the audit function under the office of the Controller of Internal Audit. On the basis of these measures, a number of cases of misuse of funds have been unearthed and government is proactively taking measures to deal with these cases. The findings under the Ministries of Community Development and Social Welfare and Education are part of the findings of the improved audit function. Cases in other ministries have also been unearthed,” she stated.

Mwanakatwe stated that the government remained resolved to work with multilateral organisations.

She stated that the government had continued taking measures that would form a basis for facilitating discussions with the International Monetary Fund (IMF) on the possibility of a supported programme.

“In the meantime, engagement has continued through staff visits, with one upcoming in the 1st week of November 2018, and an Article 4 mission to follow through next year,” she stated.

She stated that the government continues its engagement with other multilateral organisations such as the African Development Bank and World Bank.

Mwanakatwe stated that their support in areas such as private sector development, energy, agriculture, infrastructure, water and sanitation and public financial management was progressing well.

She stated that cooperation with donors would continue based on the principles of transparency, accountability, prudence and cost-effectiveness in the use of their resources.

Mwanakatwe stated that the government would continue to strengthen its financial governance systems to ensure that cooperating partners continue to have confidence and any fraud was detected before it happens.

She stated that the government had undertaken to meet cooperating partners and other stakeholders on a quarterly basis to brief them on the economy, public financial management measures and address other areas of possible concern, including those related to economic governance.

On debt management, Mwanakatwe stated that the government was in full control of its debt and was addressing vulnerabilities of its debt profile.

“In response, the government is undertaking a number of measures that include the reduction of non-concessional financing and renegotiating of some loans on its portfolio. The increase of Zambia’s funding envelope under IDA-18 will be instrumental in this respect as the country will have increased concessional financing. As indicated, the results of this exercise will be to have a reduced debt accumulation path, reduced deficit into the medium term and increased ability to meet debt obligations including the Euro Bonds,” stated Mwanakatwe. “To enhance the quality of projects being undertaken by the government, a new Public Investment Board is being set up to guarantee value for money by putting in place technical, economic and social standards to the selection of projects to be financed by the government. This will maximise benefits government financing, particularly for loan financed projects.”