The Presentation of the Budget in Parliament
The Presentation of the Budget in Parliament

By Isaac Mwanza

Introduction

Many of us Zambians, including some Members of Parliament responsible for making laws, may not have taken sufficient time to interrogate and therefore understand the extent to which the National Assembly is involved in approving the contraction of public debt, or government loans. This article is meant to help us begin to think through whether Zambia really needs the proposed legislation that would compel government to get parliamentary approval on matters of contraction of public debt beyond the existing arrangement.

Legislation on debt contraction

Despite provisions of the Constitution of Zambia, Chapter 1 of the Laws of Zambia, requiring the National Assembly to approve contractual of public debts and loans by Government, not every loan would require parliamentary approval – with or without the much anticipated legislation. Article 207(1)(a) of the Constitution of Zambia reads:

The Government may, as prescribed raise a loan or grant on behalf of itself, a State organ, State institution or other institution

However, the catch is in Article 202 Clause (2)(a) which reads:

Legislation enacted under clause (1) shall provide for the CATEGORY, NATURE AND OTHER TERMS AND CONDITIONS OF A LOAN, GRANT OR GUARANTEE, WHICH WILL REQUIRE APPROVAL BY THE NATIONAL ASSEMBLY before the loan, grant or guarantee is executed (words in bold highlighted for emphasis).

While Article 114(1)(e) also require Cabinet to “recommend, for approval of the National Assembly, loans to be contracted by the State; and guarantees on loans contracted by State institutions or other institutions”, this provision must be read together with Article 202(2)(a) as referring only to those “categories of loans which must be prescribed” by an Act of Parliament and not to every loan Government intends to contract. If that was the intention of Parliament, which I doubt it was, it would show a profound lack of understanding of how government works and a mistaken assumption that all elected governments will generally be careless.

The question then is, why shouldn’t every loan contraction require approval by the National Assembly? First, let’s acknowledge that there is a serious push by some quarters in our society, largely driven by some cooperating partners, for Government to quickly table legislation in Parliament to compel government to obtain Parliamentary approval for any loan to be contracted by Government.

However, if this legislation is not well thought out by the Zambian peoples and leaders themselves, it will be used as a tool for constant shut down of government or for bringing regime change, now and in future. Our politics in Zambia are polarised and our honourable members of parliament debate based on partisan lines and not necessarily in the interest of the nation.

With this kind of legislation, any government – whether the PF administration now under President Lungu or any future administration – will become haunted and incapacitated in carrying out its mandate to the people who elected them, no matter how sweet this legislation may sound now.

The people elect a party to govern the country and it is the function of the Executive to make a good bargain and, consequently, make decisions over the loans they wish to contract. If every loan the Executive wishes to bargain for is subjected to parliamentary approval, it would make the duty of the Executive extremely difficult and would in some way compromise the separation of power between the Executive, which is mandated to run the country, and the Legislature which is mandated to make laws. Such legislation as proposed, would in effect, transfer one of the key functions of fiscal management from the Executive to the Legislature, a situation which does not exist in any modern state.

Let us examine the current arrangements to determine how our Parliament gets involved in approving debt which the Executive acquires on behalf of the Republic.

The Constitution and the Loans Guarantees (Authorisation) Act, Chapter 366 of the Laws of Zambia designate the Minister of Finance as keeper of the public purse and require her to submit a comprehensive statement to the National Assembly explaining any loan being sought if Parliament considers it necessary.

However, during presentation of the National Budget, Article 202(2) makes it mandatory for the Minister of Finance to present the estimates of revenue and expenditure, and “to specify the maximum limits that the Government intends to borrow or lend in that financial year,” which is then approved as an integral part of the financial estimates of revenue and expenditure for the next financial year by a resolution of the Members of Parliament.

Parliament is therefore involved in approval of the debt that Government contracts by approving the ceiling, or maximum amount of debt to be contracted, which is included in the national budget. It should only concern Parliament when and if Executive exceeded the limit it approved, but it is certainly not the function of Parliament to approve the individual loans which the Executive wants to contract. Such an arrangement would be tantamount to making the Executive subject and inferior to Parliament.

It would be advisable that Government must tread very carefully when deciding to introduce legislation on debt contraction because it may be a recipe for constant shutting down of government. Today, you may have numbers in Parliament to make it easier for Parliament to approve these loans but we must look into the future. Let’s suppose in 2021 either the PF or UPND win polls but the winner has a minority representation in Parliament for the next 5 years. Do you surely expect that such a composition of Parliament would make it easy for the governing minority party to deliver on a developmental agenda which the people would have been promised, if Parliament decided to frustrate its plans to borrow for purposes of development?

There is no need to pretend that the Executive is somehow unaccountable to the people when the mechanism exist for such reporting. Government is not a business and was never intended to run like one, it does not invest for profit and generally, social goods cannot be accounted for in the same way that merchandise is accounted for.

What is required is to make the civil service accountable, not the politicians. It is the civil servants who draw up propose items for which loans are to be contracted; they draw up the budget, carry out the procurement, make the payments and do the accounting, not the politicians. If, for instance, Permanent Secretaries know that a failure to report expenditure will result in some form of sanctions, they will not allow the politicians to manipulate even expenditure.

It is because society has failed to hold civil servants accountable that we now use politicians as a cover. We are looking at the wrong set of people: no minister, not even the president, can get one ngwee out of the public purse without the civil servant. Impossible. But we have fallen for cheap trick of politicians outside government pointing to fellow politicians within government as the villains.

Conclusion

We should only pass legislation which we are convinced will work out well within the context and dynamics of our politics. We can’t be experimenting on such kind of legislation or doing copy-paste to think it may work out in Zambia because it has worked out in some developed nations. In those nations, once leaders are elected to the House, they do not get whipped to follow a partisan line of debate and decision making even were they don’t agree with it. If we hurriedly enacted this legislation without us sitting down to interrogate it, then we should not be surprised when this legislation is used against any sitting government at any particular period of time – now or in future. If we want to proceed with this legislation, to subject debt contraction to Parliament, let us spell out the exact details of which loans will need that approval and establish the mechanisms to ensure Parliament does not hold the Executive to ransom.

Disclaimer: Views expressed in this article do not necessarily represent any institution or associations to which I may be affiliated nor do they represent the views of this media but represent the views of the author.

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46 COMMENTS

  1. I find these articles more focused and opinion balanced. Govt should open its eyes on these copy paste type of legislation. Parliament will frustrate all developmental agenda borrowing if every loans will always need approval by Parliament. I ask how many of our MPs are able to scrutinise these proposed legislation way its been debated here

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    • Well said CALEB. Zambia has enough laws to deal with debt contraction and the current arrangement is okay. AG must think through this legislation they want to bring

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    • Where is Bonehead Mushota this morning. Maybe she can consider giving us a PHD analysis of this!!!

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    • It’s the case of ”Closing the stable door after the horse has bolted” (which translates to trying to prevent something happening when it’s too late to prevent damage being done).

      PF has borrowed to the maximum & debt levels are now unsustainable & now we need solutions on how to repay Euro-Bonds & Chinese loans. PF00Ls need to be in the front with providing suggestions & solutions to their vision-less leader since they urged him on, sung for him, danced for him & congratulated him when he was busy indebting our country.

      Defaulting or refinancing loans to Vulture Lenders will reduce our country to Zimbabwe status. We’ve been down this road in the 80’s.

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  2. Just stop these debt shhit , too much of it.
    It’s national day of prayers and reconciliation.
    Let’s talk about National House of Prayers. What happened to my contribution, you need reconciliation.

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    • I have bad news for you. You don’t need national prayers for anything other than distraction. Religious faith should be a personal thing. Common sense though, now that should be universal. For example, it should be common sense that you cannot reconcile a difference while showing indifference to your immoral acts if they caused the rift between you and fellow citizens, especially when they entail stealing from your fellow citizens. You can’t even reconcile the PF’s daily thievery with the Bible yet you take a day off from generating much needed revenue to force a reconciliation from those that speak against your thieving? In what world?

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  3. Zambia does not need these multitudes of laws but needs accountable civil servants. I fully agree to this. Problems ain’t politicians really but civil servants. Thanks for warning us about this legislation

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    • Civil servants have always been accountable. The problem is they have been accountable only to the politicians in whom the power to hire and fire civil servants is vested in. Very corrupt politician so Let’s not now, all of a sudden be amnesic to this reality that plays out in Zambia every day.

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    • Civil servants are responsible for securing every coin from our national purse and they have adequate protection of the law. So why do they allow politicians to tell them how to spend the money? We blamed politicians for too long. Even if UPND came, this blame will be there. So wake up our civil servants. You failing us

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    • Caleb, he/she who can fire/suspend/demote you is the person you are answerable to. That’s been in the way of development in Zambia for years. It is no wonder a Lusambo can show up to government offices and have supposed to be dignified employees trembling in their shoes. Again, let’s not read one article and dismiss why we know to be true just because the article states otherwise. That would be ilogical.

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  4. To borrow and not to borrow is the function of the Executive worldover. Don’t complicate our governance systems with legislation meant to make this or future govts fail to operate

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  5. Walasa mwaiche Mwanza. The devil is in the detail. We must slow down with this law. Hope Mwanakatwe is reading

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  6. Just where did our Govt borrow this Constitution from which require executive to ask permission to borrow money. This is a trap laid for oneself. Problem is dictation from donors. This is bad legislation

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  7. For the first time Mr. Mwanza makes a little bit of sense in his submission except I don’t like his partisan leanings seen even in this article.

    However, I can give him some positive score on this article for bringing us to attention on this important topic.

    The question is : – are we going to continue electing MPs who can’t reason on what is good and bad for the country? Are we always going to have MPs who only party interest and not national interest?

    1) I think this legislation will bring about accountability not dependent on morality of those in cabinet. It will bring about accountability enforced by the system whether cabinet is morally upright or not will not matter.
    2) We need to side by side with legislation, the clause for cabinet to be selected outside parliament to…

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  8. Its like in a home, wife wanting to approve every loan hubby wants to get. Nonsense. Trash that document before u take it to Parley

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  9. ……2).We need to side by side with legislation, the clause for cabinet to be selected outside parliament to widen the choices of the president on appointments. This will help bring technocrats in contract negotiation which is currently lacking.

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  10. Maybe if we introduce this legislation on borrowing it could place some limits on this government’s insatiable appetite for borrowing. The MMD under Mwanawasa cleared all the debts. Rupiah Banda came to borrow also but it was very minimal. The PF took us backwards in very big strides. We are back to square one, in the worst financial situation ever.

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  11. Bottom line, they should just stop borrowing and in the long term our kids will suffer for these debts.

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  12. 1 “…Let’s suppose in 2021 either the PF or UPND win polls but the winner has a minority representation in Parliament for the next 5 years…” sounds like imagining how you would get out of a room with no exits.

    We wanted our executive appointed outside parliament but as things stand parliament and the executive are basically one and the same. Bear in mind that we currently have a 50% + 1 requirement for the office of president and that we wanted the president stripped of powers to appoint heads of of critical governance institutions. A president with poor support in parliament can only be a product of too many independents being elected to parliament (which is very unlikely). Icintu chintu umwene. The Airport in Sakania and the highway coming with hotels and filling stations have…

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  13. (continued)…….The Airport in Sakania and the highway coming with hotels and filling stations have left a bitter taste in our mouth. The high amount of debt acquired in the short PF reign is a lesson to learn from as opposed to fears of hypothetical shutdowns.I feel transparency is the main thing and not mere parliamentary approval in the proposal. I also think regime change must not always be viewed negatively if in doubt ask the Zimbabweans!!

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  14. But not regime change for the sake of it. You cannot put in power someone who stole from Zambians during privitisation. Its like putting a lion which hasnt eaten for weeks and a impala in the same cage and you tell the lion not to eat the impala because you will bring food tomorrow

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    • If “someone stole from Zambians during privatization”, ask your MP to raise issue in the Parliament and force disclosure from all Cabinet members since then.
      Otherwise, some arse l!cking !mbecile going by the name of “Mambwe” will carry with his 5tupid comments for next twenty years.

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    • when u see donors pushing for certain legislation which they don’t have in their countries, u must smell something.

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  15. This article is an eye opener to some of these legislation Govt seeks to introduce. Well written and arguments well balanced

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  16. Management if our country’s meagre resources should be a responsibilty of everyone and not just civil servants or politicians. Zambia does not need that law compelling Executive to get Parliament approval to borrow. Most MPs in Parliament debate senseless, they are illiterate as can be seen from level of debate. There is nothing wrong with current arrangement.

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  17. Zambia is not in a hurry to enact this legislation. I think Lungu must hold on until we scrutinise this legislation

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  18. You will need the ACTS and its not for one political party alone but for the country focus and discipline in matters of fiscal and budgetary planning You will need to enshrine prudent and credible budgetary and fiscal plans that every will agree to

    You will need the acts in the planning and budgeting as well as the Fiscal to guide all who may come so that you clearly defined the path of the Zambian economy The dangers of fiscal brinkmanship or shutting down the gov are clearly provided for in the acts

    Remember to distinguish here also between the Two types of acts necessary to deal with ere , the debt ceiling “cliff” and the Fiscal “cliff” in national…

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  19. in national planning and budgetary environments Every credible political party should support this discipline in Gov Budgetary and Fiscal Planning

    The minister is on Course and should be supported to table the Acts

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  20. There is such a rule also as the “Gephardt Rule” to be applied appropriately within the Perspective of the 1974 Act

    The Members of parliament must have a share of increased responsibility and ownership of national fiscal plans and Budget processes Its only desirable that they reflect some measure of Independence and analysis Fiscal Plans and Budgets typical of Fiscal Institutions like the Zambian parliament not as within individual political parties as observed currently happening
    There must be no expenditure or money drawn or spent under the Ministry of Finance without the e consequence of appropriations made necessary by law as assented to by President
    The…

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  21. The Constitution places the power of the purse with the parliament and in this case the government’s legislative branch. It passes legislation and this include decisions on taxes and expenditure often supported by the president the head of Gov who often annually is required to submit the budget to be approved either by parliament Once the budget is voted the President implements it The acts of parliament and the budget is what is needed to complete the process not the budget only passes by parliament in isolation of supporting legislative
    This approach must be pure and be bipartisan in application and support at enactment of acts and application of the Budget and Appropriations
    Parliament…

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  22. Parliament must have the legislative power to orderly decide on Gov spending and in case of debt supported expenditure how the term sheets looks like to Fiscal Plans
    There must be some form of parliamentary authority over the budget and shared ownership by all members of parliament and parties ,with the support and engagement of the executive including the presidential support
    This will remove and reduce suspicions of “backdoor spending” and enhance Fiscal planning and carefully navigating the economy towards fiscal sustainability In-fact the Act supports fiscal Planning more than it does fiscal deficit management
    Gov shutdowns only come up if political parties fail to…

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  23. fail to work towards a bipartisan goal and will reflect often in the true nature and quality of members in approval of plans and budgets for their electorates given the foreseen forecasts and economic outlook at any particular time This can be avoided by establishing clear long-term goals for the level of discretionary

    This will automatically call for 20 to 40 years of national fiscal planning and acts that removes the effect of locking Gov into a shut down and effectively removing fiscal brickmanship

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  24. This is one the most brilliantly written article on issue of parliamentary approval and why we must not be tempted to enact the law without carefully thinking through it. Well done. My worry is how many of our MPs and leaders in govt take time to understand these issues?

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  25. am here to read comments. just like the writer, I think Zambians are so knowledgeable. am impressed. you guys deserve to lead this country and help your government and people.

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  26. Zambian govt must up its game to engage people who can easily explain matters like these at a time when political propaganda has been high. Problem is its always reactive instead of being a leader in expkaning these issue

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  27. Zambia’s biggest problem is poverty. Because of poverty of the mind, we make laws based on what donor countries think about us. Western donors want Parliament to be approving debt contraction in Africa so they track how China funds Africa. Because of poverty, civil society in Zambia is patriotic to their paymasters and not to discussing ideas like these. Indeed sad part is govt has done little to help bring out correct positions

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  28. Hakainde Hichilema will fall for anything that will see this govt fail to govern so he can gain mileage. This is one legislation the guy will love but will repeal when he takes over power

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  29. The requirement for the act or fiscal acts should not be because of China but simply to enshrine budgetary and fiscal credibility in budgets and Plans aligning responsibilities between the executive and legislature accordingly making them severely accountable

    This initiative is a view also in the OECD as seen by the “Network of Parliamentary Budget Officials and Independent Fiscal Institutions” Initiative

    Twapyamo Its like the temptation of new news on LT to comment is an never ending affair There is more people need to learn as i have observed here and the news that comes with it

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    • But explain how many countries have legislation that require every loan to be contracted to be subjected to Parliamentary approval. The legislature is for law making and not approvals of loans. that is duty of Executive. both members of executive and legislature are elected by people and given different mandate

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  30. All Global fiscally Stable Countries have some credible Fiscal and Budget Planning Process have these acts that support the GOLDEN RULE IN FISCAL PLANNING AND EXPENDITURE FORMATION Sweden has it in the form of Fiscal Budget Act and the forms of debt brake’ rules,the UK have it in the form of Codes for Fiscal Stability,The US have it in form of Budget Enforcement Act plus others Norway has the form of Fiscal Stability Guidelines Poland has the Act on Public Finance similarly Canada also including our near neighbor South Africa and Nigeria among st others infact Simply put Almost all well performing and most crisis countries trying to return to safety and those well sustained have…

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  31. from OECD to China all have these acts to support firm fiscal plans Most of these well performing countries have enshrined a form of fiscal rule or act Its clearly seen and evidenced that fiscal rules can provide a useful framework for fiscal policy and can ultimately contribute to macroeconomic stability and economic growth and not necessarily constrain the same

    They may call it a rule or code or acts or something but most have moved to make it an act of parliament to ensure focus for long-term

    left//

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