MINISTRY OF FINANCE STRATEGIC PLAN (2012-2016)

April, 2012

MINISTRY OF FINANCE STRATEGIC PLAN (2012-2016)

 2012 Ministry of Finance Ministry of Finance Tel: 211 257007/251843/250657/251078/254995/254335 Chimanga Road P.O. Box 50062 Lusaka, Zambia Email: ALL_MOFNP_USERS@mofnp.gov.zm Internet: www.mofnp.gov.zm

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TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS ----------------------------------------------------------------------- III FOREWORD ------------------------------------------------------------------------------------------------------- VI ACKNOWLEDGEMENT -------------------------------------------------------------------------------------- VIII EXECUTIVE SUMMARY------------------------------------------------------------------------------------------X 1.0 INTRODUCTION ---------------------------------------------------------------------------------------------- 1 1.1 BACKGROUND ---------------------------------------------------------------------------------------------------------- 1 1.2 THE STRUCTURE OF THE MINISTRY OF FINANCE ---------------------------------------------------------------- 1 1.3 RATIONALE ------------------------------------------------------------------------------------------------------------- 2 2.0 ENVIRONMENTAL ANALYSIS ---------------------------------------------------------------------------- 3 2.1 EXTERNAL ANALYSIS-------------------------------------------------------------------------------------------------- 3 2.2 INTERNAL (INSTITUTIONAL) ANALYSIS ---------------------------------------------------------------------------- 4 2.3 STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ANALYSIS-------------------------- 5 2.4 PRODUCTS AND SERVICES, AND CLIENTS ------------------------------------------------------------------------- 5 2.5 STRATEGIC/ CORE ISSUES -------------------------------------------------------------------------------------------- 5 3.0 STRATEGIC DIRECTION ----------------------------------------------------------------------------------- 7 3.1 VISION STATEMENT --------------------------------------------------------------------------------------------------- 7 3.2 MISSION STATEMENT ------------------------------------------------------------------------------------------------- 7 3.3 VALUE STATEMENT---------------------------------------------------------------------------------------------------- 8 3.4 GOAL STATEMENT ----------------------------------------------------------------------------------------------------- 8 4.0 OBJECTIVES, STRATEGIES AND PERFORMANCE INDICATORS ----------------------------- 9 4.1 OBJECTIVE 1 ------------------------------------------------------------------------------------------------------------ 9 4.2 OBJECTIVE 2 -----------------------------------------------------------------------------------------------------------10 4.3 OBJECTIVE 3 -----------------------------------------------------------------------------------------------------------10 4.4 OBJECTIVE 4 -----------------------------------------------------------------------------------------------------------11 4.5 OBJECTIVE 5 -----------------------------------------------------------------------------------------------------------12 4.6 OBJECTIVE 6 -----------------------------------------------------------------------------------------------------------13 4.7 OBJECTIVE 7 -----------------------------------------------------------------------------------------------------------13 4.8 OBJECTIVE 8 -----------------------------------------------------------------------------------------------------------14 4.9 OBJECTIVE 9 -----------------------------------------------------------------------------------------------------------14 4.10 OBJECTIVE 10 --------------------------------------------------------------------------------------------------------15 4.11 OBJECTIVE 11 --------------------------------------------------------------------------------------------------------16 4.12 OBJECTIVE 12 --------------------------------------------------------------------------------------------------------16 4.13 OBJECTIVE 13 --------------------------------------------------------------------------------------------------------17 4.14 OBJECTIVE 14 --------------------------------------------------------------------------------------------------------18 4.15 OBJECTIVE15 ---------------------------------------------------------------------------------------------------------18 5.0 PRECONDITIONS -------------------------------------------------------------------------------------------- 21 5.1 GENERAL ASSUMPTIONS---------------------------------------------------------------------------------------------21 5.2 LINKING THE STRATEGIC PLAN TO THE BUDGETING PROCESS ---------------------------------------------22 5.3 IMPLEMENTATION, MONITORING AND EVALUATION OF THE STRATEGIC PLAN ------------------------22 5.4 STRUCTURAL IMPLICATIONS OF THE PLAN-----------------------------------------------------------------------22

ANNEX 1: MOFNP ORGANOGRAM-------------------------------------------------------------------------- 25 ANNEX 2: STATE OWNED ENTERPRISES---------------------------------------------------------------- 27 ANNEX 3: LEGISLATIVE FRAMEWORK FOR MOFNP ------------------------------------------------ 29 ANNEX 4: STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSIS --- 31 ANNEX 5: PRODUCTS AND SERVICES, AND CLIENTS ---------------------------------------------- 35 ANNEX 6: PLANNING LINKAGES --------------------------------------------------------------------------- 37

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ABBREVIATIONS AND ACRONYMS

ABB ACC AG AIDS APAS APR APRM ARV BO CCSD CIA CPs CSO CT DDCCs DIP DMFAS EFQM ESAAG FIs FNDP FMS FSDP GDP GNI GRZ HBS HIV IAD IAT ICT IFMIS JASZ KPIs LAs LCMS M&E MDGs MIS MoF MPSAs MSME MTEF MTR NDPs NGOs NPBF

Activity Based Budgeting Anti-Corruption Commission Accountant General Acquired Immune-Deficiency Syndrome Annual Performance Appraisal System Annual Progress Report African Peer Review Mechanism Anti-Retro Viral Budget Office Centralised Computer Services Department Controller of Internal Audit Cooperating Partners Central Statistical Office Counselling and Testing District Development Coordinating Committees Decentralisation Implementation Plan Debt Management Financial Analysis System European Foundation for Quality Management East and Southern African Association of Accountants General Financial Institutions Fifth National Development Plan Financial Management System Financial Sector Development Programme Gross Domestic Product Gross National Income Government of the Republic of Zambia Household Budget Survey Human Immune-Deficiency Virus Internal Audit Department Integrated Tax Administration Information and Communications Technology Integrated Financial Management Information System Joint Assistance Strategy for Zambia Key Performance Indicators Local Authorities Living Conditions Monitoring Survey Monitoring and Evaluation Millennium Development Goals Management Information Systems Ministry of Finance Ministries, Provinces and other Spending Agencies Micro Small and Medium-scale Enterprises Medium-Term Expenditure Framework Mid-Term Review National Development Plans Non-Governmental Organisations National Planning Budgeting Framework

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PDCCs PEMFA PFM PMEC PPPs PRSP PSMD PSRP RBA SNDP SADC SAP ST SMEs SWAPs SWOT VAT VCT ZDHS ZRA

Provincial Development Coordinating Committees Public Expenditure Management and Financial Accountability Public Financial Management Payroll Management and Establishment Control Public Private Partnerships Poverty Reduction Strategy Paper Public Service Management Division Public Service Reform Programme Risk Based Auditing Sixth National Development Plan Southern Africa Development Community System Application Product Secretary to the Treasury Small and Medium Scale Enterprises Sector Wide Approach Programmes Strengths, Weaknesses, Opportunities and Threats Value Added Tax Voluntary Counselling and Testing Zambia Demographic and Health Survey Zambia Revenue Authority

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FOREWORD

The Strategic Plan for the Ministry of Finance, which covers the period 2012-2016, articulates the Vision, Mission, Goal statement, Values and Objectives with their associated strategies and performance indicators. This is informed by the draft 2003-2007 Strategic Plan, which was implemented following the wider reforms instituted by the Government under the Public Service Reform Programme (PSRP). The major focus of the Strategic Plan is to ensure attainment and sustainability of macroeconomic growth and stability which the country has recorded over the years. This will be done by ensuring efficient and effective coordination of national development planning and economic management, and the mobilisation and management of public resources in a transparent and accountable manner for sustainable national development. The Plan has taken into account the various changes that have taken place in the external and internal environments as well as the challenges and failures encountered during the implementation of the draft 20032007 Strategic Plan. The country has reached a critical stage in its development path and made strides toward attaining the Vision 2030, the set targets of the national development plans and other important national documents. The Ministry therefore, sets out to strengthen macroeconomic fundamentals, enhance transparency and accountability, strengthen the national statistical system, develop legislative framework for planning and budgeting and undertake a comprehensive tax reform to broaden the tax/revenue base. I am convinced that through our collective effort during the next five years, we will be able to achieve the objectives of the 2012-2016 Strategic Plan. The ultimate objective of our economic and social endeavours is to translate this positive macroeconomic performance into significant reduction in poverty and improve the wellbeing of the Zambian people. I have every confidence in the ability of management and staff of the Ministry to implement this Plan successfully.

Alexander B. Chikwanda, MP MINISTER MINISTRY OF FINANCE

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ACKNOWLEDGEMENT

The development of the 2012-2016 Strategic Plan has been accomplished with the involvement and participation of various stakeholders. Let me acknowledge the guidance and technical support from a number of stakeholders such as the Permanent Secretary for Management Development Division, Cabinet Office and the team of facilitators. I also wish to thank Cooperating Partners for their valuable input into the process. Lastly, I wish to thank management and staff in the Ministry who in many and varied ways contributed to the formulation of this Plan.

Fredson K. Yamba SECRETARY TO THE TREASURY MINISTRY OF FINANCE

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EXECUTIVE SUMMARY

The Ministry of Finance (MoF) has the mandate to prepare and present the national budget to parliament as stipulated by the constitution. It also performs statutory functions including economic management, national development planning and budgeting, and financial management responsibilities. In the execution of its functions, the Ministry is also guided by the National Vision of becoming a prosperous middle income nation by 2030and the National Development Plan. In preparing the 2012-2016 Strategic Plan consideration of the constitutional and legal mandates has been taken into account. The Plan outlines the strategic direction and priorities to strengthen the coordination and efficient functioning of the Ministry as core facilitator of national development. The Vision, Mission, Value Statement and Goals have been developed to guide the Ministry during the next five years. The Ministrys Vision Statement is: To be a world class institution in the mobilization and management of public resources for sustainable national development In pursuing this Vision, the Ministry will be guided by the following Mission Statement: To efficiently and effectively coordinate national planning and economic management, mobilise and manage public resources in a transparent and accountable manner for sustainable national development. The Value Statement is: The Ministry of Finance will uphold excellence, professionalism, team work, integrity, commitment, transparency, accountability and value for money The Goals that the Ministry seeks to achieve in the short to medium term are as follows: I. II. III. IV. To attain and sustain macroeconomic growth and stability; To achieve enhanced, well-coordinated, and sustained socio-economic development; To attain transparency and accountability in the mobilisation and management of public resources for sustainable national development and To ensure availability of reliable and timely socio economic data for national planning and effective decision making.

The Strategic Plan outlines the portfolio functions of the Ministry as provided in the constitution and other pieces of legislation. Outlined in the environmental analysis are the findings from the review of the institutions performance during the 2003-2007 Strategic Plan period. The analyses of the Political, Economic, Social, Technological, Environmental and Legal developments (PESTEL) and the Strengthens, Weaknesses, Opportunities and Threats (SWOT) revealed a number of factors that affected the performance of the Ministry and informed the development of the 2012-2016 Strategic Plan. In line with the findings of the review, the Plan has identified three strategic areas of focus during the 2012-2016 period, namely, economic management, national development planning and financial management. For the Ministry to achieve its new Vision and Mission (strategic direction), it is imperative that efforts are made to foster and sustain macroeconomic stability; enhance domestic resource mobilization; strengthen the

planning and budgeting systems; strengthen debt management; strengthen the national statistical system; and strengthen financial management and control systems. These constitute some of the major strategies for attaining the goals and objectives stipulated in this Plan.

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1.0 INTRODUCTION

1.1 Background The Ministry of Finance (MoF) derives its mandate from Part X of the Constitution of Zambia. It is also guided by statutory and portfolio functions as stipulated in the Government Gazette Notice No. 183 of 23rd March, 2012. The Ministry is charged with economic, national development planning and budgeting, and financial management responsibilities. The Countrys vision of becoming a prosperous middle income nation outlined in the Vision 2030 sets a tone for all developmental initiatives. The Ministry recognises that improving the standards of living of the Zambian people is at the core of its coordinating role. On the economic front, Zambia has recorded stable economic growth rates, single digit inflation rates, reduced interest rates and the general improvement of the macroeconomic variables. However, this improvement in macroeconomic performance has not significantly translated into tangible benefits for the Zambian people. The 2012-2016 Strategic Plan will, therefore, ensure that the Ministry positions itself and the country to attaining set goals and objectives outlined in the Sixth National Development Plan (SNDP) and other important national development documents at national and regional levels. This document outlines key initiatives aimed at improving the Ministrys position in discharging its functions and delivering meaningful development in a transparent and accountable manner. 1.2 The Structure of the Ministry of Finance The Ministry of Finance is headed by a Minister assisted by two Deputy Ministers. The administrative and technical team is headed by the Secretary to the Treasury assisted by three Permanent Secretaries (The structure indicated in this document is based on the Restructuring Report of 2003 and 2008). The Ministry has 12 Directorates responsible for various portfolios (see Annex1).These are: I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. Human Resource and Administration Department; Budget Office Department; Government Stores; Centralised Computer Services Department; Office of the Accountant General; Investments and Debt Management Department; Central Statistical Office; Office of the Controller of Internal Audit; Economic Management Department; National Planning Department; Monitoring and Evaluation Department; and National Policy and Programme Implementation Department.

As stipulated in the Portfolio Functions Gazette Notice No. 183 of 23rd March, 2012 the policies housed under the Ministry are: National Population Policy; Insurance Policy; Banking Policy; Revenue Policy (Customs and Excise, income and other taxes, fees, levies and other charges); and, Stores Policy. The Gazette Notice also stipulates several statutory functions of the Ministry which are Aid Agreements; Budget; Census and Statistics; Central Computer Data Processing; Financial and Economic Policies and Plans;
Financial and Fiscal Matters; Foreign Aid; Government Accounts; Internal Audit; Investment Planning and Project

Appraisal; Loans and Investments; Miscellaneous and Credit Guarantees; National Planning; Pension Schemes; Public Expenditure; Public Private Partnerships; Public Procurement; Stock Exchange; Stock Verification and Disposal of Government Property, Custody and Distribution of Accounting Forms; and, Safes and Boxes - Strong Rooms. Several statutory bodies and grant aided institutions report to the Ministry, these are: Bank of Zambia; Development Bank of Zambia, Indo-Zambia Bank; Betting Control and Licensing Board; Financial Intelligence Centre; National Savings and Credit Bank; Standing Accidents Board and Provincial Standing Accidents Committee; National Road Fund Agency; Lotteries Control Board; Pension and Insurance Authority; Zambia National Insurance Brokers Limited; Zambia National Commercial Bank; State Lotteries Board; War Pension Board/Fund; Zambia National Building Society; Zambia Public Procurement Authority; Zambia Revenue Authority; Directorate of State Enterprises; Stock Exchange; Securities Exchange Commission; Zambia State Insurance Corporation; Zambia Finance and Leasing Company; Zambia Institute of Chartered Accountants and Zambia Institution of Purchasing and Supply. Other institutions include: National Economic Advisory Council; Revenue Appeals Tribunal; Zambia Centre for Accountancy Studies; and, Zambia Institute for Policy Analysis and Research. In addition, the Ministry is also responsible for a number of State Owned Enterprises (see Annex 2). 1.3 Rationale The Ministry of Finance has since the previous Strategic Plan been charged with additional responsibilities such as national development planning and coordination of Public Private Partnerships. This coupled with policies by the new Government has necessitated the repositioning of the Ministry to achieve pro-poor growth by, among others: Streamlining the development planning and finance portfolios; Ensuring that all set bench-marks in sector ministries are achieved within the prescribed time frame; and Streamlining the tax regime in order to enhance domestic resource mobilization, promote compliance and reduce the burden of tax on the poor.

It is against this background that the Ministry reviewed its Strategic Plan in order to provide a current operational framework that takes into account the various developments that have occurred in the past years. The Ministry also undertook benchmarking study tours to Ghana and Malaysia to learn best practices and incorporate these experiences in the Strategic Plan. This Plan is intended to invigorate the operations of the Ministry, meet new challenges, enhance performance and will help in: Clarifying the organisations future direction, common vision and purpose; Establishing the organisations priorities; Improving decision making by focusing attention on crucial issues and challenges; and Promoting rational utilization of resources.

This Plan therefore, defines the Ministrys Vision, Mission, Values, Goals (specific targets), objectives and strategies to be achieved in the next five years.

2.0 ENVIRONMENTAL ANALYSIS

As the Ministry sets out to position itself for the period 2012-2016, an extensive external and internal environmental analysis was undertaken. The major findings from these assessments include the following: 2.1 External Analysis
I. Political and Policy Developments

Zambia is a multi-party democracy where different political parties compete to form Government. The developments in the political sphere have significant implications for the operations of the Ministry. The policies of the political party in Government inform the social and economic policies to be formulated and prioritization of programmes to be implemented. The recent peaceful change of power following the 2011 presidential and general elections further strengthens the countrys credentials and standing in the international community. It also presents a strong basis for the successful implementation of the Ministrys Strategic Plan, 2012-2016.
II. International Developments

As a member of the international community, Zambia is party to a number of protocols and signatory to various international agreements. The country is also responsive to various international developments that hinge on the delivery of national strategic goals and objectives. As a Ministry therefore, the political, economical and social developments on the international scene have a bearing on the performance of the set national goals and targets.
III. Economic Developments

Over the past decades, the focus was on transforming the country into a market driven and private sector lead economy able to sustain growth, generate employment and reduce poverty. During the previous plan period, the macroeconomic environment was stabilised with fiscal deficits and the heavy external debt reduced, inflation lowered to single digit, a market driven exchange rate system established and high levels of growth attained. With these achievements, Zambia now has strong basis to deal with critical issues of human capital and infrastructure development in order to attain inclusive growth. To continue with the economic development path, emphasis will be placed on enhancing domestic resource mobilisation and increasing productivity. In addition, innovative options for financing human capital and infrastructure development will be pursued. Further, there will be need to continue strengthening the public financial management system to ensure that the resources are effectively utilised and accounted for.
IV. Legal Developments

The Ministry derives its mandate from Part X of the Constitution of Zambia as amended by Constitution of Zambia (Amendment) Act No.20 of 2009.This amendment allowed for the presentation and approval of the budget prior to the year to which it relates, thereby making it possible to implement the budget over a 12 months period and provided for the enactment of the budget and planning legislation.

The operations of the Ministry are also guided by several statutes (see Annex 3), which include: Public Finance Act No.15 of 2004; Tax legislation such as the Income Tax Act, CAP.323, Value Added Tax Act CAP.331 and the Customs and Excise Act CAP.322; The Census and Statistics Act CAP.127; Minister of Finance (Incorporation) Act CAP.349; The Loans and Guarantees (Authorisation) Act CAP.366; and The Public Procurement Act No.12 of 2008.

However, despite having a clear legal framework, some legislation is outdated and require revision. To streamline and strengthen the legislative framework under which the Ministry operates, there is need to revise some of the legislation or enact new ones. Some of the legislation thatmay require revision and enactment include: Census and Statistics Act of 1964, CAP.127; Loans and Guarantees (Authorization) Act of 1969, CAP.366; and Planning and Budgeting Bill.

2.2 Internal (Institutional) Analysis

I. Human Resource

The Ministry has a pool of qualified and committed staff able to facilitate delivery of the set mandates. All the technical staff hold a minimum of Bachelor of Arts /Science degree while all support staff have relevant qualifications for their respective jobs. There is need for the Ministry to continue to invest in developing its human resources and develop staff retention schemes to curb the exodus of staff to the private sector. However, the operations of the Ministry are affected by the following: Inadequate staffing - for some departments existing positions have remained unfilled while for others the existing establishment is not adequate to facilitate delivery of mandates; Poor Salaries and Conditions of Service - this makes it difficult for the Ministry to retain qualified staff; Impact of HIV/AIDS pandemic - this leads to loss of valuable man hours due to illness, bereavements and funerals; Weak coordination and information sharing between and among departments; and Inadequate utilisation of ICT developments for the efficient functioning of the Ministry.

Other factors affecting the operations of the Ministry include:

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Lack of office space; Poor transport management; Inadequate equipment; and Gender imbalance.

Absence of Internal Planning and Monitoring Mechanisms within the Ministry

The Ministry does not have adequate mechanisms for planning, monitoring and evaluating institutional programmes. This has led to departments working without adequate collaboration and coordination amongst themselves. This has also resulted in apparent conflict and duplication of roles.

There is need, therefore, to put in place appropriate frameworks for institutional planning and monitoring of programmes.
III. Technology

The Ministry has institutionalised several information systems such as the IFMIS, PMEC, DMFAS, FMS, and the ABB, which are currently not integrated. This has posed a challenge to information sharing, analysis, retrieval and decision making. This problem is compounded by incompatibility of the IFMIS with existing Government systems. Non-ownership of ICT products such as SAP software infrastructure, high cost of system maintenance and software licence requirements may lead to inadequate functioning of information management systems. There is need to enhance the use and application of ICT to various aspects of operations of the Ministry to enhance efficiency. Increased utilisation of ICT, however, will require investment in ICT security to mitigate against the risk of loss of information.
IV. Statistical Information Management

As the country continues to make progress towards becoming a prosperous middle income nation, there is need to strengthen the national statistical system. This will in part, require timely availability of adequate and quality statistics and information to facilitate informed decision making. The rating of the country and the intention to raise funds on the international capital markets further underscores the need to strengthen the statistical system. During the plan period, therefore, there is need to prioritise strengthening of data and statistical management. 2.3 Strengths, Weaknesses, Opportunities and Threats(SWOT)Analysis Further assessments were undertaken using the SWOT analysis to appreciate the current state of the Ministry (see Annex4). The SWOT analysis profiles the Ministrys institutional capabilities. 2.4 Products and Services, and Clients The Ministry having analysed its external and internal environments identified its clients for which it intends to exert its attention and resources on (see Annex5). 2.5 Strategic/ Core Issues Following the various analysis on the functioning and operations of the Ministry, a number of policy and legal challenges were identified which if not addressed will adversely affect the implementation of the Strategic Plan. These include the following:
I. Economic Management: unemployment, poverty and poor standard of living

During the previous Strategic Plan period, the economy recorded favourable macroeconomic performance as evidenced by the high economic growth rates, attainment of single digit inflation and strong external sector performance. Despite the strong performance, the country is yet to register meaningful generation of employment opportunities, marked reduction in poverty especially in rural areas and improved standards of living.

In line with the Vision 2030, it is imperative that economic policies being implemented ensure high economic growth creates employment opportunities, results in reduction of poverty, and translates into improved standards of living.
II. National Development Planning: inadequate policy and legal framework for planning, budgeting, Monitoring and evaluation

During the period under review, National Development Planning was reintroduced. The Ministry has since developed the National Long Term Vision that expresses the aspirations of the Zambian people to be a prosperous middle-income country by the year 2030. The vision guides development of the National Development Plans. Further, the period witnessed the introduction of the Activity Based Budgeting (ABB) and Medium Term Expenditure Framework (MTEF). However, the coordination of planning, budgeting and monitoring has been weak due to lack of supportive policy and legal frameworks. To strengthen coordination of the planning, budgeting and monitoring systems, it will be important to develop legislation to support these processes.
III. Financial Management: inadequate enforcement of existing legislation pertaining to public finance management

During the period under review, Public Financial Management reforms were implemented that resulted in the amendment of the Public Finance Act of 2004, Public Procurement Reforms, implementation of the Integrated Financial Management Information System (IFMIS) and Treasury Single Account (TSA).However, as evidenced by various Auditor Generals reports, adherence to, and enforcement of, existing legislation remains a challenge. In order to enhance accountability in the utilization of public resources, there is need to further review existing legislation and systems.

3.0 STRATEGIC DIRECTION

Arising from the various analyses, the new strategic direction for the Ministry has been charted. This is anchored on the three pillars namely: economic management, national development planning and financial management. Under economic management, emphasis will be on fostering and sustaining macroeconomic stability; enhancing domestic resource mobilization, strengthening the national statistical system and strengthening debt management. Measures will also be taken to ensure that these programmes translate into employment creation, poverty reduction and improved standard of living. With regard to national development planning, efforts will be directed towards designing and implementing appropriate institutional, policy and legal frameworks for effective planning, budgeting and programme implementation. This will ensure that national programmes are well coordinated and executed. Financial management will focus on putting in place appropriate measures to enforce provisions in the Public Finance Act and other pieces of legislation pertaining to asset management, public procurement and public audit. This is intended at enhancing public financial management, accountability and transparency in the management of public resources. In this regard, the new strategic direction for the Ministry is as follows: 3.1 Vision Statement The Vision Statement for the Ministry is:
To be a world class institution in the mobilization and management of public resources for sustainable national development

The vision statement will serve as a guiding image of the success for management and staff of MoF and a driving force for attaining the set objectives, and ultimately the goal and mission. 3.2 Mission Statement In pursuing this Vision, the Ministry will be guided by the following Mission Statement:
To efficiently and effectively coordinate national planning and economic management, mobilise and manage public resources in a transparent and accountable manner for sustainable national development

This mission statement will serve as a constant reminder to the MoF of the main reason for its continued existence. To this end, the Ministry will ensure that there is a strategic fit between its mission and all ministerial programmes and budgets. This is critical if the Ministry is to deliver on its mandate, achieve its goals and realise its vision.

3.3 Value Statement The Value Statement for the Ministry is:
The Ministry of Finance will uphold excellence, professionalism, team work, integrity, commitment, transparency, accountability and value for money

The MoF will strive to ensure that the organisational character and culture as reflected in this value statement is demonstrated in the attitude and behaviour of management and staff as they relate to customers. 3.4 Goal Statement The Goals for the Strategic Plan are:
I. II. III. To attain and sustain macroeconomic growth and stability; To achieve enhanced, well-coordinated, and sustained socio-economic development; To attain transparency and accountability in the mobilisation and management of public resources for sustainable national development; and To ensure availability of reliable and timely socio economic data for national planning and effective decision making.

IV.

Through these Goal Statements, the MoF will ensure an improved standard of living and well-being of the Zambian people.

4.0OBJECTIVES, STRATEGIES AND PERFORMANCE INDICATORS

To achieve the Ministrys Vision, Mission and Goals,the following are the objectives, strategies and indicators: 4.1 Objective 1 To review, develop and manage economic and financial policies in order to facilitate the creation of a stable macroeconomic environment for enhanced economic development and poverty reduction Strategies: I. II. III. IV. V. VI. VII. VIII. IX. Review, formulate and implement macroeconomic policies that facilitate macroeconomic stability, growth and poverty reduction; Formulate guidelines for economic management; Formulate policies that promote price and exchange rate stability; Formulate policies that promote economic diversification; Promote rural development; Promote pro-poor growth; Develop economic models to facilitate informed and evidence based economic planning; Undertake economic forecasting in order to generate information for decision making; and Produce economic performance reports.

Performance Indicators:
Output Indicators

I. II. III.

Medium-Term Macroeconomic framework produced annually; Macroeconomic model for economic analysis and policy guidance and decision making updated quarterly; and Forecasts for different economic variables produced quarterly.

Outcome Indicators

I. II. III. IV.

Percentage change in real GDP growth; Percentage in the annual consumer price index; Percentage change in the volumes of non-traditional exports; and Months of import cover.

Impact Indicators

I. II.

Percentage change in rural poverty; and Percentage change in urban poverty.

4.2 Objective 2 To effectively manage public debt in order to meet in a timely manner Governments financing needs at minimum cost Strategies: I. II. III. IV. V. VI. VII. VIII. IX. X. Develop monitoring mechanisms to maintain debt at sustainable levels; Develop and implement a debt policy; Develop procedures manual for public debt management; Limit Government borrowing; Review and harmonise all debt laws; Develop a framework for dismantling domestic debt; Maintain refinancing risk at low levels; Contraction of concessional loans to minimise costs of borrowing; Direct non-concessional borrowing to projects with a high rate of return; and Shifting the domestic debt structure by lengthening the maturities for Government securities by issuing more long term debt and less short term debt.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII.

Conduct debt sustainability analysis annually; Debt status reports produced and disseminated quarterly, semi-annually and annually; A mechanism for monitoring and maintaining debt at sustainable levels developed by December 2013; Debt policy developed by December 2013; Procedures manual for public debt management developed by December 2012; All debt laws reviewed and harmonised by December 2014; A framework for dismantling domestic debt developed by December 2013; and Evaluate the rate of return of projects financed through non-concessional loans.

Outcome Indicators

I. II. III. IV. V. VI. VII.

Public debt stock as percentage of GDP; Public debt service as percentage of domestic revenue; External debt service as percentage of exports; Domestic borrowing as a percentage of GDP; Proportion of external loans with longer maturity to loans with shorter maturity periods; Proportion of concessional loans with a grant element of 35 percent or better to non-concessional loans contracted; and Proportion of long term debt to short term debt.

4.3 Objective 3 To improve resource mobilization in order to provide sufficient resources to finance national development programmes Strategies: I. Review tax policy;

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II. III. IV. V. VI. VII. VIII.

Strengthen tax and non-tax administration; Promote alternative sources of financing; Strengthen the framework for awarding of fiscal incentives; Devise an appropriate mechanism for sharing revenue collected between the central and local Government; Automate the non-tax revenue collection in revenue collecting MPSAs; Strengthen capacities for non-tax revenue collectors in all MPSAs; and Effectively mobilise external financial resources and technical assistance.

Performance Indicators:
Output Indicators

I. II. III.

Comprehensive tax1 reform undertaken by 2013; Mechanism for revenue sharing devised by December 2013; and All revenue collection centres automated by 2016;

Outcome Indicators

I. II. III. IV. V. VI.

Revenue as a percentage of GDP; Percentage of capital projects financed from alternative sources (PPP); Percentage of revenue contribution from PPPs and MSMEs; Dividends from SOEs and Government Investments as percentage of domestic revenue; External resources by type as a proportion of GDP; and Grants released as proportion of total pledges.

4.4 Objective 4 To effectively manage public investments in order to maximise returns on investments Strategies: I. II. III. IV. V. Develop mechanisms to enforce the PPP Act; Develop SOEs policy and legislation; Design and implement PPP projects that maximise public benefits; Develop a monitoring and evaluation mechanism for PPPs; and Develop a comprehensive database on SOEs and Grant Aided Institutions.

Performance Indicators:
Output Indicators

I. II. III. IV. V.

SOEs policy developed by December 2012; SOEs Act developed by December 2012; Mechanisms to enforce the PPP Act developed by 2013; A monitoring and evaluation mechanism for PPPs developed by December 2012; and Database on SOEs and Grant Aided Institutions developed by December 2013.

Outcome Indicators

I.
1

Percentage of operational PPP projects recorded per annum;

Comprehensive reform: change in the tax system that alters the entire structure of the system or replaces it entirely

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II. III. IV.

Percentage of SOEs declaring dividends per annum; Percentage change in value of dividends declared by SOEs per annum; and Rate of return over the concession period per project.

4.5 Objective 5 To initiate and coordinate the development and implementation of medium and long term national plans in order to achieve sustainable development Strategies: I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Review, formulate and monitor the National Development Plan; Strengthen consultation with SAGs, PDCCs, DDCCs and other key stakeholders; Strengthen the role of ITCP at both national and provincial levels; Provide technical back-stopping to SAGs on National Planning and Budget; Develop medium and long term planning guidelines/manuals; Develop the planning and budgeting legislation; Develop a framework for the review of the Vision 2030 and SNDP; Coordinate the development of the rural development strategy; Develop the National Development Planning and Budgeting Framework; Develop a baseline for provinces; and Develop the National Population Policy Implementation plan.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

National Development Plan formulated by 2016; Number of SAG/PDCC reports produced annually; Number of National SAG/NDCC conference report produced bi-annually; Annual ITCP Report produced; Number of SAG Capacity building programmes undertaken against planned annually; NDPBF Formulated developed by December 2012; Planning and Budgeting Act Formulated by 2012; Vision 2030 review framework formulated by December 2013; Rural Development strategy formulated by 2013; Common strategy for infrastructure development formulated by 2014; NPPIP formulated by 2012; and Baseline for provinces created by 2014.

Outcome Indicators

I. II.

Number and value of investments in infrastructure development per annum; and Number of capacity building programmes undertaken for in institutions involved in infrastructure development per annum.

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4.6 Objective 6 To provide timely and quality statistical products and services for planning, research and decision making Strategies: I. II. III. IV. V. Build capacity to efficiently collect, process, analyse and disseminate statistical data; Finalise and implement the National Strategy for the Development of Statistics; Enhance statistical advocacy programs and promote usage of statistics; Review of the Statistics Act and Standards; and Promote the establishment of management of information systems in MPSAs.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII.

Geometrically computed Consumer Price Index (CPI) in place by 2012; Producer Price Index (PPI) generated by 2013; Crop forecast and post harvest survey reports produced annually; LCMS undertaken and preliminary report produced every two years; LCMS with HBS component undertaken and final report produced every five years; 2012 ZDHS undertaken and preliminary report produced by 2013; Economic Census reports produced by December 2014; Restricting of the CSO by 2014; 2012 Labour Force survey undertaken and preliminary report produced every two years; 2010 Census final analytical reports produced by 2013; Census and Statistics Act repealed and replaced by 2013; National Statistical System developed by 2015; and Management information systems developed in all MPSAs by 2016.

4.7 Objective 7 To facilitate preparation and implementation of the national budget in order to ensure allocation and timely releases of financial resources for national development Strategies: I. II. III. IV. V. VI. VII. Strengthen budget preparation, execution and monitoring among MPSAs; Develop and mainstream result based budgeting in the public service; Roll out MTEF/ABB to local authorities; Enhance mechanisms for disseminating budget information to various stakeholders; Develop and implement mechanism for strengthening the linkages between planning and budgeting; Devise an appropriate mechanism for transfers to local authorities; and Enhance budgetary releases to NDP priority sectors.

Performance Indicators:
Output Indicators

I. II.

Fiscal report and quarterly budget performance report; Planning and Budgeting bill enacted by December, 2013; and

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III.

Formula for revenue sharing devised by December 2013.

Outcome Indicators

I. II. III.

Proportion of budget allocation of key rural development programmes to the national budget; Budget releases to key rural development programmes2 as a ratio of their budget allocation; Percentage of heads whose total releases is between 95 percent and 105 percent;

4.8 Objective 8 To coordinate the establishment and implementation of robust monitoring and evaluation systems in order to provide evidence-based development planning, budgeting and programme implementation Strategies: I. II. III. IV. V. VI. Develop and implement M&E framework; Strengthen and promote institutionalisation of M&E systems and tools; Coordinate periodical monitoring and evaluation of socio-economic policies and programmes; Promote undertaking of demand driven evaluations of NDP projects/programmes to feed into evidence-based decision making; Alignment PAF indicators to NDP indicators; and Support research on socio-economic affairs.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII. IX.

M&E framework developed by December 2013; Government national wide M&E system operationalised by 2016; NDP APRs produced; FNDP final review report produced by December 2012; Mid-Term review SNDP report produced by 2014; Percentage of evaluations undertaken of total planned evaluations annually; Annual PAF report produced; Budget execution monitoring reports prepared quarterly; and Annual and bi-annual economic performance review reports produced.

4.9 Objective 9 To enhance financial management systems and standards in order to promote good corporate governance practices in the public service Strategies: I. II. III. IV. V. VI.
2

Develop and implement the PFM strategy; Enhance adherence to financial regulation and procedures; Strengthen mechanism for follow up on all queries of financial mismanagement; Review and disseminate the financial management manuals; Produce and timely submit annual financial report; Enhance weekly monitoring of GRZ bank account balances;

Rural water and sanitation programme, rural electrification and feeder roads

14

VII. VIII. IX. X. XI. XII. XIII. XIV.

Strengthen continuous professional development programmes for accounting and audit staff; Develop and implement asset policy and guidelines; Enhance mechanisms for monitoring and managing domestic arrears; Implement a programme for conducting periodical payroll audits; Strengthen systems for managing imprest; Implement a programme for single Treasury Account/Management; Strengthen policy and legislative framework on statutory contributions; and Enhance capacity to comply with national and international Accounting standards.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII.

PFM strategy developed by December 2012; Number of institutions on IFMIS; Financial report submitted to Parliament by 30th September annually; Asset policy developed, asset guidelines developed, dissemination of asset policy and guidelines; Treasury single account fully functional by December 2012. Amendment of Public Finance Act; and Compliance with corporate governance principles and best practices enhanced by 2013;

Outcome Indicators

I. II. III. IV. V.

Percentage change of audit queries; Percentage change in domestic arrears; Percentage change in compliance to financial management principles; Adoption of the international accounting standards; and Ratio of qualified accountants.

4.10 Objective 10 To strengthen internal control systems in order to provide assurance to clients and stakeholders on the efficient and effective utilization of public resources Strategies: I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. Develop and implement risk management framework; Develop and implement programme for undertaking specialised audits; Adopt and implement standards for the professional practice of internal auditing; Review the Stores Regulations; Develop quality control manual and conduct peer reviews with other Internal Audit Departments; Strengthen Audit Committees in all MPSAs; Strengthen adherence to financial and procurement regulations and procedures; Develop and implement a program for follow-up on all audit reports; Develop and maintain a database on audit services; Ensure transparency and accountability in awarding contracts; Enhance the capacity of regulatory and supervisory institutions charged with the responsibility of monitoring compliance with national and international standards; and Strengthen value for money procurement through production of price benchmarks for common users items in the ministry.

15

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII.

Number of staff trained in specialized audits; Number of MPSAs applying specialized audits; Adoption of IIA standards by December 2014; Stores regulation reviewed by December 2013; Quality control manuals developed by December 2013; Price benchmarks for common user items established (Government Stores) by December 2013; and Risk management framework developed by December 2013.

Outcome Indicators

I. II.

Percentage change in the detection of fraud reported annually; and Percentage change of management responses to internal audit queries;

4.11 Objective 11 To develop and implement an efficient integrated information communication technology system in order to facilitate effective planning, decision making and business continuity in the Ministry Strategies: I. II. III. Develop and implement a ministerial ICT Policy; Develop and implement an integrated ICT platform and system; and Establishment of the ICT Centre of Excellence for the Government.

Performance Indicators:
Output Indicators

I. II. III. IV. V.

Ministerial ICT Policy in place by December 2012; Website updated quarterly; Upgrade internet bandwidth to 5GB by December 2013; Outsourcing IT services on IFMIS eliminated by 2016; and Disaster recovery and business continuity system established by 2014.

Outcome Indicators

I.

Percentage change in the number of IT personnel trained over total number IT staff.

4.12 Objective 12 To review and develop legislation and related policies in order to provide a legal framework for effective programme implementation Strategies: I. II. Develop and implement mechanisms to facilitate the review, amendment, or repeal of legislation and ministerial policies; Develop and maintain a comprehensive ministerial database on agreements and legislation; and

16

III.

Expand and strengthen the Treasury Counsel portfolio.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI.

Mechanisms to facilitate the review, amendment, repeal of legislation and ministerial policies developed and implemented by December 2013; Number of legislation developed annually; Number of legislation, rules and regulations reviewed, amended or repealed annually; Comprehensive3 database on agreements and legislation developed by December 2012; Database on agreements and legislation updated bi-annually; and Office of the Treasury Counsel restructured by December 2013.

4.13 Objective 13 To effectively manage and develop human resources in order to enhance institutional and individual performance Strategies: I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Undertake an institutional assessment in line with the strategic direction of the Ministry; Develop and implement staff orientation programmes; Enhance and strengthen staff welfare programmes; Develop and implement occupational health and safety programmes; Implement and enforce human resource policies and guidelines; Institutionalise and implement the performance management system; Review and implement training and development plan annually; Strengthen collaboration with training institutions and professional bodies on continuous professional develop programmes for staff; Development and implementation of a service charter; Implement change management programme; and Strengthen cross-cutting issues in the ministry.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

3

Optimal establishment of the ministry developed and submitted for approval by June 2013; Number of filled posts against the approved establishment annually (vacancy rate); Ministerial HIV/AIDS workplace policy developed by August, 2012; Incidences of occupational hazards reported per annum; Proportion of officers accessing staff loans by source per annum; Number of human resource management cases by type processed annually; Human resources information system developed by December 2012; Guidelines for contraction and management of interns and attachments developed by June, 2012; Performance management system institutionalised by December 2012; Departmental work plans for the subsequent year developed by 31 August of each year; Proportion of staff appraised annually; and Proportion of staff trained in relevant fields annually.

Provide information on agreements, legislation, by subject, by signatory, by date (signed and expiry), by duration etc

17

Outcome Indicators

I. II. III.

Percentage of positive responses to service delivery; Percentage of women in decision making positions against SADC set target; and Percentage of women in the ministry.

4.14 Objective 14 To provide administrative and other logistical support services in order to facilitate implementation and attainment of Ministerial strategic objectives Strategies: I. II. III. IV. V. VI. VII. VIII. IX. X. Streamline library management system; Computerise the records management system; Develop and implement a transport management system; Strengthening the existing preventive maintenance plan; Ensure constant supply of stock items at competitive prices; Develop and implement a procurement plan; Enhance supply systems; Enhance adherence to public stores regulation in the ministry; Strengthen the Standing Accidents Board and Committees on GRZ vehicles and equipment; and Enhance seamless communication with both internal and external stakeholders.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI. VII. VIII. IX.

Library services upgraded by December, 2013; Number of IEC programme undertaken per annum; Records management system computerised by December, 2016; Number of preventive maintenance activities undertaken per annum; Assets tracking register updated annually; Annual procurement plans finalised by December every year; Information management for administrative and logistical services established by December 2014; Number of cases handled by the Standing Accidents Board per annum; and Number of management and staff meeting held annually.

Outcome Indicators

I.

Percentage change in maintenance costs and fuel expenditure per annum.

4.15 Objective15 To effectively plan, direct, coordinate, monitor and evaluate the implementation of Ministerial programmes in order to ensure attainment of set targets Strategies: I. II. Establish a unit responsible for planning and budgeting portfolios for the ministry; Develop guidelines for establishment of an institutional framework for planning, coordination, monitoring and evaluation of ministerial programmes;

18

III. IV. V. VI.

Develop and implement effective monitoring and evaluation mechanisms for the Strategic Plan; Establish a committee to coordinate, monitor and evaluate ministerial programmes; Strengthen the mainstreaming of cross-cutting issues4 in the ministry; and Develop a mechanism for inter-departmental interfacing and dialogue in line with the ministerial Mission/Vision statement.

Performance Indicators:
Output Indicators

I. II. III. IV. V. VI.

Committee to coordinate, monitor and evaluate ministerial programmes established by 2012; Ministerial planning unit established by 2013; Guidelines for planning, coordination, monitoring and evaluation of ministerial programmes developed by December 2014; Mid-term review of Strategic Plan conducted by June 2014; Quarterly and annual departmental performance reviews conducted; and Proportion of high level (Administrative and Policy) meetings conducted and chaired by the Permanent Secretary per annum.

Interpreting the various policies relating to Gender, HIV/AIDS, Environment and Disability in the workplace

19

20

5.0PRECONDITIONS

For the Strategic Plan to be implemented successfully certain conditions must be in place. These include: Timely and adequate funding from the treasury; Linking the Strategic Plan to the budgeting process; Staff commitment and positive attitude towards work; Availability of qualified and competent personnel; Availability of transport and office equipment; Improved conditions of service for the public workers; Appropriate policy and legal framework in place; Introduction of the planning unit for the Ministry; Stable political and economic environment; Good political will and support from Cooperating Partners; and Ability to timely implement programmes and monitor and evaluate the Strategic Plan.

5.1General Assumptions The successful implementation of this Strategic Plan is, therefore, premised on the following set of general assumptions:
I. Continued Implementation of the Public Sector Reforms

The implementation of the Public Sector Reform presents an opportunity to the Ministry of Finance to improve its organisational performance. In this regard, it is imperative that the Ministry collaborates with Cabinet Office and other line Ministries in the implementation of the reforms such as the Public Finance Management Strategy, Decentralisation Policy and other reform initiatives for enhanced and sustainable development.
II. Broadened Revenue Base

The success of the Strategic Plan will largely depend on the generation of sufficient revenues to finance priority programmes. In this regard, the Government will need to undertake a comprehensive review of the tax system aimed at broadening the tax base.
III. Development of Legislative Framework for Planning and Budgeting

The implementation of the Strategic Plan will be enhanced by strengthening the linkage between the planning and the budgeting processes. In this regard, the Government will need to enact the Planning and Budgeting Bill.
IV. Enhance Implementation of Transparency and Accountability Initiatives

The success of the Strategic Plan will depend on the continued implementation of the initiatives that promote transparency and accountability in financial management. In this regard, there is need for the Government to speed up the roll out of the IFMIS programme.

21

5.2Linking the Strategic Plan to the Budgeting Process In its execution of the strategies set out, there is need to ensure systematic allocation of resources consistent with the Strategic Plan. It is imperative, that resources are released timely and utilised efficiently to the prioritised programmes. The Plan, therefore, will be aligned to the National Long Term Vision, National Development Plan, Medium Term Expenditure Framework (MTEF) and annual budgeting process. Accordingly, the Ministry shall develop annual departmental work plans (see Annex 6). 5.3Implementation, Monitoring and Evaluation of the Strategic Plan The implementation of the strategic plan will need to be monitored annually. This will be based on the annual work plans and output performance indicators as outlined in this plan. Evaluation of the implementation of the Strategic Plan will be done through both internal and external evaluation processes. A mid-term review of the Strategic Plan will be undertaken in 2014 and a final review at the end of the implementation period.The Ministry will be evaluated based on the identified output indicators. 5.4Structural Implications of the Plan The strategic planning process culminated into the development of an indicative core functional structure aimed at creating a proactive and responsive Ministry. The indicative core functional structure reflects the core business of the Ministry where attention shall be focused and results expected to be seen. This was derived by grouping various objectives into specialized functional areas using the following criteria: Similarity of objectives; Uniqueness of objectives; Accountability for the objectives; and Coordinating of the objectives.

Through the grouping of the objectives, the core functions of the Ministry are as follows: I. II. III. IV. Objectives No. 1,3,4, 6 and 7 form the Economic Management core function; Objectives No. 2, 5, 8and 15 form the National Development Planning and Budgeting core function; Objective No. 9 and 10 form the Financial Management core function; and Objective No. 11, 12, 13 and 14 form the Human Resource and Administration core function.

The above core functional structure will guide in the determination of an appropriate and optimal organisational structure and staffing levels for the Ministry for it to implement the 2012-2016 Strategic Plan. For a pictorial presentation of the core functions of the structure refer to Figure 1 on the next page.

22

Figure 1: Functional Structure for the Ministry of Finance and National Planning

ECONOMIC MANAGEMENT Objective No. 1,3,4, 6 & 7

NATIONAL DEVELOPMENT PLANNING & BUDGETING Objective No. 2,5 & 8

FINANCIAL MANA Objective No.

MINISTRY OF FINANCE NATIONAL AND PLANNING

MANAGEMENT AND ADMINISTRATION Objective No. 11,12,13,14 &15

23

24

ANNEX 1: MOFNPORGANOGRAM
Minister

Deputy Minister

Deputy Minister

Secretary to the Treasury

PS Budget and Economic Affairs

PS Planning and Economic Management

PS Financial and Management Administration

Budget Office

National Planning

Human Resource and Administration

Investment and Debt Management

Economic Management

Accountant General

National Policy and Programme Implementation Monitoring & Evaluation

Internal Audit

Centralised Computer Services Department Government Stores

Census and Statistics

25

26

ANNEX 2: STATE OWNED ENTERPRISES

State Owned Enterprises

African Reinsurance Corporation Afrox Zambia Limited Contact Haulage Limited Development Bank of Zambia Engineering Services Corporation Indeni Petroleum Products Limited Indo-Zambia Bank Limited Kagem Mining Limited Kariba Mineral Limited Lusaka Trust Hospital Medical Stores Limited MOFED (London) Limited MOFED (Tanzania) Limited Mpulungu Harbour Corporation Mukuba Hotel Mulungushi Village Complex Limited Mupepetwe Engineering Company Nanga Farms PLC National Airports Corporation National Housing Authority National Savings and Credit Bank Nitrogen Chemicals of Zambia Limited Tazama Pipeline Limited Tanzania Zambia Railways (TAZARA) Times of Zambia Zambia Forestry and Forests Industries Corporation (ZAFFICO) Zambia China Mulungushi Textiles of Zambia Zambia Daily Mail Zambia Education and Publishing House Zambia Electricity Supply Corporation Limited Zambia National Broadcasting Corporation Zambia National Building Society Zambia National Commercial Bank Zambia Printing Company Zambia Railways Limited Zambia State Lotteries Board Zambia Telecommunication Corporation Zamcapitol Enterprises Zambia Postal Services (ZAMPOST) Zambia Consolidated Copper Mines (ZCCM) Investment Holdings (IH) Zambia State Insurance Corporation (ZSIC) Group

State Owned Enterprises in Liquidation

E.C. Milling Exim Bank

27

Lima Bank Lint Company (Lintco) Livingstone Motor Assemblers Mansa Batteries Mulungsuhi Investments Limited National Home Stores Limited Reserve Minerals Corporation United Buses of Zambia (UBZ) Zambezi Sawmills Zambia Airways Corporation Limited Zambia Emerald Industries Limited Zambia Steel and Building Supplies Zambia Mining and Industrial Corporation (ZIMCO) Limited Zambia National Oil Company (ZNOC)

28

ANNEX 3: LEGISLATIVE FRAMEWORK FOR MOFNP

Accountants Cap. 390 Baking and Financial Services Cap. 387 Bank of Zambia Act No. 43 of 1996 Betting Control Cap. 166 Bills of Sale (Registration) Cap. 191 Bretton Woods Agreement Cap. 367 Building Societies Cap. 412 Calculation of Taxes (Consequential) Provisions Cap. 339 Capital African Power Cap. 374 Census and Statistics Cap. 127 Cheques Cap. 424 Customs and Excise Cap. 322 Debtors Cap. 77 Decimal Currency System (Arrangements) Cap. 362 Development (United Kingdom Government) Loan Cap. 373 Development Bank of Zambia Cap. 395 Development Bond Cap. 379 Equity Levy Cap. 338 Fees and Fines Cap. 45 Financial Institution (Validation of Acts) Cap. 420 General (Royalty) Tax Cap. 215 General Loan and Stock Cap. 350 General Loans (International Bank) Cap. 365 General Loans (Mediobanca) Cap. 376 General Loans Guarantee Cap. 358 Government Securities Cap. 357 Income Tax Cap. 323 Insurance Levy Cap. 341 International Bank Loan (Approval) Cap. 372 International Bank Loan Cap. 375 International Development Association Cap. 361 International Finance Corporation Cap. 368 Limitation of Liability (Passenger in Government Aircraft) Cap. 488 Loans and Guarantees Cap. 366 Medical Levy Act No. 6 of 2003 Minister of Finance (Incorporation) Cap. 349 Money Lenders Cap. 398 National Road Fund Act No. 13 of 2003 National Savings and Credit Bank (Dissolution) Cap. 423 Pension Scheme Regulation Act No. 28 of 1996 Property Transfer Tax Cap. 340 Public Audit Cap. 378 Public Finance Act of 2004 Revenue Appeals Tribunal Act. No 11 of 1998 Securities Cap. 354 State Lotteries Cap. 328 Tax Reserve Certificates Cap. 356 Taxation (Provisional Charging) Cap. 364

29

Taxes Cap. 323 Treasury Bills Cap. 348 Value Added Tax Cap. 331 Zambia Centre for Accountancy Studies Cap. 391 Zambia Institute of Purchasing and Supply Act No. 15 of 2003 Zambia National Tender Board Cap. 394 Zambia Revenue Authority Cap. 321

30

ANNEX 4: STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSIS

INTERNAL ENVIRONMENT STRENGTHS No. 1 Economic Management
Existence of a model

EXTERNAL ENVIRONMENT WEAKNESSES Lack of a comprehensive database on major economic indicators

INTERNAL ENVIRONMENT OPPORTUNITIES

Cordial relationship

EXTERNAL ENVIRONMENT

THREATS

Poor understanding of macroeconomic issues by stakeholders

(ZAMMOD)
Appropriate legal

Bilateral and multilateral cooperation

Favourable

framework - mandate provided for in the Constitution

Sound

Non-compliance to set national and international targets

Lack of integration of ICTs Growing domestic debt levels

international credit rating

Favourable

Unpredictability of donor inflows

macroeconomic policies and programmes

Availability of ICTs

Inadequate resources Lack of harmonized framework for debt management

Investments climate
Reduction of external

Global, economic and political instability

debt through Highly Indebted Poor Countries Initiative/Multilateral Debt Relief Initiative (HIPC/MDRI)
Large informal sector

Existence of projects without feasibility studies

such as Debt Management and Financial Analysis System (DMFAS )

Approved debt

Narrow tax base resulting in the decline of domestic revenue

Litigation from creditors both external and internal

strategy

Accumulation of penalties due to delays in release of funds for debt service

Existence of a modern tax policy and enhanced tax administration

Attainment of middle

income status

Unsustainable debt levels

Volatility in the nature of risk portfolio for debt management

Non-declaration of dividends by SOEs

Dual supervision of SOEs

Non availability of banking services for timely remittance of non tax revenue

Loss of credibility due to non-delivery of products and services

31

INTERNAL ENVIRONMENT STRENGTHS No. 2 National Development Planning

Existence of the

EXTERNAL ENVIRONMENT WEAKNESSES Inadequate baseline data

INTERNAL ENVIRONMENT OPPORTUNITIES

Availability of

EXTERNAL ENVIRONMENT

THREATS

Limited resource envelope for national development programmes

National Vision 2030

Existence of National

information at CSO
Stakeholder

Contents of the vision not clearly understood and linked to development initiatives

Development Plans
Mid-Term and Annual

acceptance and participation in the National Vision and NDPs

High demand of

Political change Limited understanding and appreciation of national development planning

Progress Reviews
Established statistical

infrastructure
Production of various

Absence of Planning and Budgeting Legislation

statistical information and growing demand for statistical data

Statistical Reports
Introduction of the

Weak statistical base Non cooperation by data suppliers

Activity Based Budgeting and Medium Term Expenditure Framework

Change in the budget

Weak monitoring and Evaluation Instruments/ mechanism

data collection challenges - difficult to get information from the public

Delays in timely release of statistic data

Low levels of appreciation and understanding of statistics

cycle as provided for by Act No. 20 of 2009 of Part X of 1991 Constitution of Zambia
Improved allocations

Delays in production of statistical reports Limited budgetary allocation leading/ inadequate funding

High cost of carrying out census and surveys Delayed or non disbursement of funds

and prioritization of resources in line with National Development Plan

Non output based budget to enable resource monitoring

lack of performance/result based budgeting to determine funding in MPSAs

32

INTERNAL ENVIRONMENT STRENGTHS No. 3 Financial Management

Availability of

EXTERNAL ENVIRONMENT WEAKNESSES Frequent ICT breakdown

INTERNAL ENVIRONMENT OPPORTUNITIES

Existence of public

EXTERNAL ENVIRONMENT

THREATS External ownership of ICT Systems

equipment and ICT Infrastructure

Introduction of Single

and stakeholders demand for prudent management and accountability of public resources
Anti-Corruption Policy

In-adequate capacity to technically backstop and manage systems

Unsustainable hidden costs e.g. license fee

Treasury Account and DDAC

Existence of audit

Poor adherence to internal audit advise

manuals

enhances corporate governance

Too much concentration on pre-audits at the expense of post audit and system audits

Lack of a risk management framework

Non-adoption of international standards for the profession practice of internal auditors

33

INTERNAL ENVIRONMENT STRENGTHS No. 4 Human Resource and Administration

Highly qualified staff

EXTERNAL ENVIRONMENT WEAKNESSES

Inadequate office

INTERNAL ENVIRONMENT OPPORTUNITIES

Introduction of PMEC

EXTERNAL ENVIRONMENT

THREATS
Poor conditions of service

and team work

Compliance with

space
Inadequate

( to monitor and control number of officers on the establishment)

as compared to the private sector

High market demand for

professional and international standards

Existence of

orientation and coordination of staff

Poor follow up on

skilled man power

Cybercrime and terrorist

staff matters
Poor system to

activities
Corruption Cartels of suppliers Poor salary structure as

enterprise agreement with Microsoft

Availability of

measure productivity
Poor records

strategic infrastructure such as warehouses, bulk fuel storage facilities, railroads and off loading bay
establishment of the

management
Inadequate

compared to private sector

Impact of HIV/ AIDS

maintenance of ICT infrastructure.

Lack of a Ministerial

pandemic

ICT guideline
Lack of

resource information centre

comprehensive Disaster Recovery Centre

Failure to adhere to

procurement guidelines
Lack of updated asset

register
Poor maintenance of

strategic infrastructure and low utilization

34

ANNEX 5: PRODUCTS AND SERVICES, AND CLIENTS

The Ministry produces a number of documents that relates to its functions, these include: Annual Progress Reports; Annual Provincial Reports; Assets Register; Debt Sustainability Reports; Donor Coordination Reports; Economic Reports; Financial Reports; Mid-Term Review Reports; Millennium Development Goals Reports; MTEF and National Budgets; National Development Plans; Policy documents; Statistical Bulletins and Reports; and Vision 2030.

The Ministry provides service to various clients as follows:

(i) Government Ministries, Provinces and Institutions

(ii)

Provide socio-economic information; Mobilise resources and allocate to priority programmes; Provide accounting, auditing and information technology services; Provide stores and storage facilities; Provide financial regulations and guidelines; and Provide budgeting and national planning guidelines.

Quasi-Government Institutions

(iii)

Provide financial and socio-economic information; Provide funding; Provide policy direction supervision and guidelines on their operations; and Provide socio-economic information.

Parliament

(iv)

Provide Financial Reports; Provide annual performance reports for NDP, budget, State Owned Enterprises and Statutory Bodies; Provide annual reports for international bodies where Zambia is affiliated; Provide socio-economic information and other information; Submit the National Budget, Treasury Minutes and Legislative Bills; and Account for public financial resources.

General Public

Provide socio-economic information and statistics; Provide resources to sector ministries for public works and budgeted programmes;

35

Strengthen internal controls; and Account for public resources.

36

ANNEX 6: PLANNING LINKAGES

National Long Term Vision

P r o v Economic Management National Development Plans

S ec to

Financial Management

National Development Planning and Budgeting

Macroecon

P l a n

Au dit in g

37