Tuesday, May 28, 2024

Structural weakness a hinder to Zambia’s fight against corruption – IMF


The International Monetary Fund – IMF Diagnostic Report on Governance and Corruption conducted on Zambia has revealed that weak transparency and accountability mechanisms allowed the mismanagement of extensive resources.

The report focused on the effectiveness of anti-corruption and anti-money laundering frameworks, fiscal governance, central bank governance, fiscal sector oversight, contract enforcement and protection of property rights.

The report identifies short-term reforms and longer-term policy measures that are necessary for sustainable and inclusive change.

The report accessed by Lusaka Times highlight that significant legal and structural weaknesses and deficient implementation practices hinder Zambia’s ability to fight corruption and money laundering effectively, and these significant governance weaknesses in anti-corruption and AML/CFT include limited transparency and accountability in the public sector, lack of public access to information, compromised independence and operational autonomy, limited technical, operational and financial capacities of anti-corruption and AML/CFT institutions, inadequate anti-corruption and AML/CFT policy formulation.

According to the report, it is stated that public procurement remains one of the key areas of government inefficiency and vulnerability to corruption, especially in sectors where public spending is particularly high corruption vulnerabilities in Revenue Administration are high in the Value-Added Tax (VAT) refund process. Here too, corruption is facilitated by a lack of transparency for legal persons and other arrangements that enable the concealment of ill-gotten proceeds.

The IMF report cited that Corruption became particularly entrenched and institutionalized during 2016-2021, which further eroded public trust in institutions.

The report noted that weak transparency and accountability allowed political and economic elites to bend rules regarding public resources, adding that large public investment projects were often transformed into vehicles for political patronage and rent seeking opportunities, and corruption is believed to have inflated the costs of numerous high-profile tenders and construction projects.

Huge financial resources invested in infrastructure projects such as road construction have been identified to have provided avenues for corruption, the report indicates that political connections allowed members of the elite to bend the rules and access to lucrative contracts during tender procedure as the government often interfered in the selection process.

Meanwhile, the Farmer Input Support Programme – FISP which was introduced in 2002 and soon perceived as ineffective due to corruption, poor targeting and leakage to non-beneficiaries, among others is said to have been used to funnel political supporters.

The IMF in its report recently presented to President Hakainde Hichilema revealed that the FISP favoured a few input suppliers who appeared to be politically connected and selected in the programme by bending the tender procedures.

The Report notes that a steady decline in anti-corruption efforts and the downward trend is shown in different governance and corruption indicators as most citizens perceived senior government officials, civil leaders, Members of Parliament, tax collectors and judges as corrupt.

And the report highlights that the Bank of Zambia (BoZ) faced governance weaknesses, derived primarily from the Bank of Zambia Act (BoZ Act). Subsequent to the Governance Diagnostic Assessment mission, the BoZ Act was amended, and important legal reforms were enacted in August 2022.

The amended BoZ Act is substantially in line with IMF recommendations and significantly strengthens the Bank of Zambia’s autonomy and governance arrangements.

In the Financial sector oversight, while there is a good progress in aligning legal and regulatory framework with international standards, there are remaining constraints in performing the

oversight function effectively.

The governance weaknesses related to supervisor’s operational independence, accountability, transparency, decision-making, enforcement of prudential requirements as well as insufficient human resources limit oversight function and increase opportunities for corruption.

The weaknesses in governance-related prudential framework cannot ensure adequate safeguard for the integrity of the banking sector.

Additionally, the contract enforcement legal framework is well developed but access to dispute resolution mechanisms is limited due to insufficient number of courts and adjudicators, as well as ineffective alternative dispute resolution (ADR) mechanisms constituting major governance weaknesses in the system.

The IMF mission undertook a governance diagnostic from January 14 to May 6, 2022 in response to a request from President Hakainde Hichilema.


  1. Here we go again…the con artists themselves telling their apprentices what to do. 2H is getting us into serious trouble. Notice how they coordinate their announcements. They are pouncing from all angles.

  2. I always tell my wife lets work hard and manage with the little we have…if we build a house it has to be from our own pockets…no Banks no Kaloba…i love my freedom and my creativity….i don’t deal with Shylocks like Kalusha Bwalya who is now homeless because of Kaloba despite playing Professional soccer in Europe for more than 20 years….i don’t want to end up like Ghana who has been destroyed by IMF kaloba or Greece or Lebanon or SriLanka and Zambia is next…Thank you very bwana HH

    • My question is how dose kalusha bwalya came in? the IMF are talking about zambia not an individual, we know you have alot of infor about people but dont mix personal and national issues, the IMF the friends to our Government have given a report on zambia so let us brian storm on the IMF report not on great kalu

  3. Once again the ills of Zambia have its roots in the PF administration.
    And these people are going round bad mouthing HH.
    They got no shame.

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