What Problems Would the Minister of Finance Encounter in the Process of Budget Formulation and Implementation in Zambia?

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What problems would the minister of finance encounter in the process of budget formulation and implementation in Zambia?

The national annual budget is a document containing various government activities or work programmes expressed in monetary form. Thus, the budget is an important economic policy tool for macroeconomic management and resource allocation. It provides a comprehensive statement of the nation’s economic priorities.

Accordingly, the budget formulation process has four major dimensions namely (i)Setting up the fiscal targets and the level of expenditures compatible with these targets. This is the objective of preparing the macro-economic framework. (ii)Formulating expenditure policies.

(iii)Allocating resources in conformity with both policies and fiscal targets. This is the main objective of the core processes of budget preparation. (iv)Addressing operational efficiency and performance issues.

In Zambia the Minister of Finance spearheads the process of budget formulation and implementation. There are a number of problems which the Minister of Finance encounters in the process of budget formulation and implementation. To understand these problems better, the process of budget formulation as well as implementation is hereby briefly explained followed by highlights of the problems the budget process undergoes.

i.Budget formulation (Drafting) Stage
The initial stage in the budget process is the drafting of the budget. Through this process, the Ministry of Finance (MoF) develops a national budget every year. Normally, the drafting of the budget goes through the stages set out hereunder.

(a) Preparation of a Consultation (Concept) Paper for Cabinet (b) Update of the Macro-Fiscal Framework for the Forthcoming three years and Draft Green Paper (c) Cabinet Approval of the Green Paper and Dissemination of Budget Guidelines (Call Circular) (d) Budget Hearings on the Draft Budget Estimates of MPSAs

(e) Cabinet Approval of the Draft Budget and Budget Speech

ii. Enactment or Authorisation Stage
The second stage of the budget process is the enactment of the national budget. This starts from the point when the Minister responsible for finance presents the budget statement to Parliament. The Constitution of the Republic of Zambia mandates the Minister of Finance to present the budget to Parliament.

iii. Execution or Implementation stage
After the enactment of the budget, the President signs a General Warrant authorising controlling officers in the budget units to start implementing the budget. In order to provide for activities that are unforeseen, the Constitution of Zambia provides for supplementary expenditure

iv. Accountability (Audit stage)
The Audit is the last stage of the budget process. Section 10 (2) of the Public Finance Act of 2004 empowers the Controller of Internal Audits to be responsible for the internal audit of every Ministry, department and statutory corporation. In addition, the Government accounts and financial statements were audited by an independent audit institution namely, the Auditor General. This process is normally followed by the presentation of the audit report to Parliament and its consideration by the Public Accounts Committee (PAC).

PROBLEMS THAT WOULD BE ENCOUNTERED IN THE PROCESS OF BUDGET FORMULATION AND IMPLEMENTATION

(a) Enactment of the Budget and Planning Law
The Minister of Finance would face increasing pressure from opposition parties and civil society organisations in advocating for the enactment of budget Act. The Budget Act is an important piece of legislation needed to guide the budget process in Zambia. This piece of legislation will enhance the consultative process among the various stakeholders involved in the budget process. Wide consultations will enhance ownership, participation and accountability of budget implementation.

(b) Review of the Legal Framework Governing the Budget Process in Zambia Some...
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