The Zambian Public Budget system has under gone significant transformations

The Zambian Public Budget system has under gone significant transformations. Most notable, from the period 1991 to 2000s, Zambia was implementing an ‘Incremental’ Line Budgeting system which focused mainly on inputs from ministries, Provinces and Spending agencies. In the year 2004, the country implemented what was being referred to as first generation budget reforms ( ). The focus was to shift the budgetary process from a mere incremental activity to a more meaningful process. It had been observed that there seemed to exist a disintegration of the budget process from the national development such that the allocation of resources did not entirely reflect the vision of the nation in terms of development programmes.
In view of this, independent Sector Investment Programmes were created together with Development Committees at National, Provincial and District Level. The mandate of the committees was to spearhead the formulation of development plans at each level and ensure a coordinated approach towards the implementation of development programmes at national and sub-national levels. In addition to these developments, the Activity Based Budgeting (ABB) process was adopted. This focused on activities and programmes in government departments. With these developments, the budgeting process took on a more strategic approach by incorporating the Medium Expenditure Framework (MTEF). In addition, there was a shift to integrate national development and public budgeting to ensure that budgeting was in tandem with national development programmes. In recent times as outlined in the National Planning and Budgeting Policy, the budgeting process has shifted from the ABB to the Output Based Budgeting (OBB) which is more result oriented. The National Planning and Budgeting Policy provides for the integration and harmonization of planning and budgeting.
The national budget should not be viewed as a mere plan for income and expenditure estimates, it is a national policy document that aims to guide the implementation of government programmes. It is basically a policy tool that works together with other policy documents; such as National Development Plans and Strategic Plans (Vision 2030) in ensuring that resources are allocated in line with development programmes.
In Zambia, national development planning takes place at three levels; the National, Provincial and District levels. At the national level, there are four different plans that are developed, National Vision – 25 years (Vision 2030), National Development Plan – 5 years, Sector Investment Plans – 5 years and Sector Plans – 5 years. The Provincial level develops the Provincial Development Plan – 5 years and lastly the District level which develops the Integrated Development Plan – 10 years and District Development Plan for 5 years also (p.18). From these 5 year plans, MPSAs are supposed to prepare three (3) year rolling MTEFs (budgets) as well as annual work plans which basically are a reflection of the Output Based Budget. (p.17). It is clear that the various plans are supposed to feed into the national budgetary process, however, what is not clear is how effectively these plans are integrated to ensure that there is no duplication. The main focus here is to outline and illustrate the various policy instruments that interact with the national budget to ensure implementation of the nation’s development agenda.
The Public Budgeting process is a complex undertaking involving various players and actors such as Cabinet (Executive), Legislature (Parliament/National Assembly), ministries and spending agencies (MPSAs), civil society and cooperating partners/donor community. All the various actors perform different functions at different levels to ensure the successful formulation and enactment of the national budget.
As indicated earlier, this paper will outline the process of budget formulation with a focus on the Ministry of Health. It was selected because of its institutional presence at national, provincial and district levels. In order to illustrate this a four phased budget cycle process will be highlighted with particular reference to the Ministry of Health.
Firstly, the annual budgeting cycle starts with the National Development Coordinating Committee’s review of the execution of plans and budgets at the provincial, district and sector levels. Thereafter, proposals are made to Ministry of Finance and MPSA on desired policy and development priorities. Based on this, the Ministry of Finance develops a conceptual note of the proposed policy direction for consideration by the Cabinet. Once Cabinet endorses the concept note from the Ministry, is developed into a Medium Term Expenditure Framework whose contents are consolidated into a Green Paper which is basically the basis on which the Ministry of Finance issues the ‘Call Circular’ (budget guidelines) and budget ceilings flagging off the budget cycle. The budget cycle has four main stages encompassing formulation, enactment, execution and evaluation.
a. Budget Formulation
The formulation basically starts from the development of the Green Paper and issuance of the call circular. However, a closer lens is set on the input from MPSAs and particularly Ministry of Health. In relation to Ministry of Health, once the call circular and budget ceilings are received, the Ministry holds a planning launch at which previous performance is reviewed, and targets are reconstructed setting new priorities for the Ministry in line with its strategic plan. The launch is attended by the ministry’s departmental heads, Provincial Heads and cooperating partners. During this meeting, the Minister highlights the ministry’s fiscal position and gives policy direction which is the center of the planning process.
The Planning launch is further held at the Provincial and District levels respectively. The purpose is for the Districts to buy into the Ministry’s priority areas when reviewing their past performance and formulation of the action plans. As was stated earlier, the budgeting process in Zambia aimed to harmonize planning and budgeting. Hence, the emphasis under the Ministry of Health to develop strategic action plans at national, Provincial and District level. The provincial level extracts priorities from the national level and formulates provincial targets and the district level further extracts provincial targets to formulate district targets and develop their action plans accordingly.
It must be highlighted that the district level is composed of health facilities at community level which are the main players in the provision of primary health care. They develop health facility level action plans which are further consolidated into district action plans containing reviews of previous performance and projections of future priorities and estimates. Once the Districts merge the health facility action plans, the Provincial Health Office consolidates a Provincial action plan which is further forwarded to the Ministry of Health, Headquarters. Action Plans from various provinces are analyzed and then fused into a ministerial action plan. The ministry then prepares its proposals and budget estimates in line with the ceilings and submits to Ministry of Finance for consideration. During this process the ministry of Health works closely with cooperating partners who support most of its activities. Therefore their role is cardinal as they provide financial assistance and expertise in ensuring that the ministry generates a credible strategic action plan at all levels.
b. Enactment of the Budget
The Ministry of Finance receives proposals and estimates from various MPSAs which it reviews, revises and consolidates into a draft ‘Yellow Book’. This is a high volume book containing all the estimates and proposed allocations to all the MPSAs. It can seemingly be referred to as a draft budget. The Yellow Book is then referred to Cabinet for consideration and approval before it is passed to the National Assembly for enactment. In the National Assembly, the Minister of Finance as constitutionally mandated, presents the budget estimates and proposals for the members of the house to debate, amendment and finally approval.
c. Budget Implementation