Summary: The legal framework for PFM in Zambia is fragmented, and much of it is outdated—falling short of capturing both recently introduced reforms and internationally accepted practices. The government has prioritized a revision of the existing legal framework for PFM and national development planning. This revision will permit a range of important PFM reforms that are ongoing or planned to be incorporated within the legal framework. These reforms include medium-term planning and budgeting, a performance-oriented approach to budget management, the introduction of comprehensive commitment controls, adoption of international accounting and reporting standards (International Public Sector Accounting Standards (IPSAS) and Government Finance Statistics Manual (GFSM) 2001), implementation of a treasury single account (TSA), and recognition of electronic transaction processing arrangements. In addition, an updated legal framework would permit other important improvements in current practices to be incorporated. These amendments include: (i) extending the coverage of the law from the budgetary central government to general government and financial oversight of the wider public sector; (ii) harmonizing definitions and terminology; (iii) provisions on the management and monitoring of fiscal risks, and the approval for borrowing and guarantees issued by the government; (iv) clarification of the roles of the MoF and the BoZ on cash and debt management; (v) clear rules and procedural arrangements for supplementary budgets, excess expenditure, and the end-year carry-over of unspent appropriations; and (vi) broadening the sanctions regime for breaches of financial regulations to the controlling offices of organizations as well as individuals. Furthermore, a revision of the legal framework would facilitate the strengthening of existing institutions, in particular the powers of the NA to scrutinize the government’s medium-term fiscal and budget strategy and to oversee the execution of the budget, and the independence of the Auditor General (AG). Consideration could also be given to elevating the position of the Accountant General to PS level, in line with several other African countries.

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