Speech by President Edgar Chagwa Lungu at Ministers&Controlling Officers Seminar: Promoting Ethical Conduct, MICC Wednesday, 7th February, 2018

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Speech by His Excellency Mr. Edgar Chagwa Lungu President of the republic of Zambia,
At the official opening of the seminar for ministers and controlling officers
Under the theme: promoting ethical conduct, integrity and accountability in the public sector for enhanced public service delivery promoting prudent financial management practices
At Mulungushi International Conference Centre
Wednesday, 7th February, 2018

Honourable Cabinet Ministers; The Chairperson of the Public Accounts Committee: Secretary to the Cabinet; The Acting Secretary to the Treasury; The Auditor General, The Director General, Anti Corruption Commission; The Director General, Zambia Public Procurement Authority; Members of the Press; Distinguished Ladies and Gentlemen:

I welcome you all to this very important seminar, where we are meeting as a government system to take stock of the progress the country has made so far and address some challenges.

Since taking office, my government has made substantial progress in implementing a number of reforms and development programmes.

These measures have started to pay off as the economy has now largely stabilised with a single digit inflation, returned to higher positive economic growth rates, normalisation of liquidity conditions at the back of low inflation, and the containing of the 2017 fiscal deficit below budget projections. These are clear signs that fiscal consolidation has indeed taken effect.
International investors have returned with strong participation in the financial sector while, investors in the real sector have either effected their investment decisions or have made firm pledges to implement their investments. As a result, rating agencies have recognised our efforts and upgraded our ratings to a stable outlook. We will in 2018 consolidate this performance.

Distinguished ladies and gentlemen:
This said, a number of challenges remain to be addressed. This is particularly in the area of prudent financial management where action is needed to strengthen our performance. This calls for us to avoid instances of wastage through theft and corruption so that we get value for money in the implementation of different government programmes.

Arising from this, I therefore directed the minister of finance to organise this seminar primarily to provide a platform where we can, in a coordinated manner, discuss and put in place measures to address imprudent financial management practices perpetrated by some selfish elements in the public sector. These bad practices, no matter how isolated they maybe, have the potential to derail and erode public confidence in the government and so must be addressed decisively.

Distinguished ladies and gentlemen:
I have a duty and responsibility which was conferred upon me by the people of Zambia to protect the nation’s resources. With this heavy responsibility, I have appointed you to assist me deliver on this very important mandate.

Therefore, I call upon all of us here to take your appointments as a rare privilege and deliver to the nation in accordance with the mandate I was given by the people.
The theme of this seminar, is “promoting ethical conduct, integrity and accountability in the public sector for enhanced public service delivery.”
This theme is meant to provide us with a blueprint to guide public financial management in the entire public sector.

Therefore, my promise to those that will decide to depart from this blueprint is that they will not find refuge in me as head of state, regardless of who they are. Equally, for those that are charged with enforcing the law to punish such acts, but choose not to do their work, I will ensure all administrative and legal provisions available are applied to bring you to account for your actions or inaction.

My government will always respect your independence, but certainly not to protect your inactivity or any wrong doing.

Let me now address some specific issues of interest.

Distinguished ladies and gentlemen:

Wastage on incomplete projects and continued financial irregularities:
My government has continued to roll out an ambitious infrastructure development programme across the whole country. We are constructing roads, schools hospitals, houses and other critical infrastructure in order to provide goods and services to our people as well as provide an enabling environment for business to flourish.

Despite these positive developments, the government continues to experience mismanagement of public resources in some of our critical sectors of government as reflected in the Auditor General’s reports.
Similarly, failure to complete projects has resulted in wastage of the already invested funds and huge penalties charged by contractors in the name of stand time. These charges could easily be channeled towards completion of projects rather than payment of contractors’ rental for their equipment that remains idle.

I am deeply concerned about these recurring financial irregularities and the wastage of public resources through inactivity by those charged with superintending over the nation’s resources.

These acts are retarding government’s efforts at alleviating poverty and are impeding economic growth. This behaviour is depriving our people of the much-needed social services such as access to quality education, health and water, and sanitation, resulting in diseases such as the current cholera outbreak.

Public financial management reforms:

I am aware that there are complaints from stakeholders regarding the weak regulatory and legal framework on financial management.

My government has taken note of these complaints and has embarked on implementing public financial management reforms in planning and budgeting, revenue administration, accounting and reporting, internal audit and control and public procurement to ensure and enshrine in law the prudent use of public resources.

In this regard, my government has prepared and submitted the public financial management bill (2017) to parliament to stiffen regulatory and sanction regime that will see fines and jail sentences of up to 5 years for offenders. I am hopeful that once this bill is enacted into law, it will compel accountability and transparency in the public sector.

Other reforms include:

To address the pricing of services procured by government; we are revising the Zambia Public Procurement Act by amending the law to enhance efficiency.

We are going to shorten the lengthy tendering procedures and introduce measures to reduce wastage such as benchmarking of prices and works. This was one of the biggest irregularity pointed out by the auditor-general and I am therefore directing that work on this bill be expedited so that the next sitting of parliament this month can enact it into law.

To strengthen commitment controls, a lot of work to migrate all ministries onto the integrated financial management information system (IFMIS) and Treasury Single Account (TSA) is going on. In this regard, I direct the minister of finance to migrate all remaining ministries and agencies onto these systems this year. There should be no resistance.

Distinguished ladies and gentlemen:
For tax and non-tax revenue collection government is automating collection to reduce pilferage that is inherent in resource mobilisation. In this regard, ministries which are involved particularly in non-tax revenue collection should commence automation of revenues including the ministry of home affairs particularly the Zambia police service.

With regard to project implementation, the committee of ministers set up to enhance project implementation should draw up a plan for completion of all advanced projects.

In this regard, no new projects should commence until the current backlog is substantially reduced.

In order to strengthen Public Financial Management in Government, I upgraded the Offices of the Accountant-General and Controller of Internal Audit to Permanent Secretary level. This is meant to enhance internal controls and financial accounting and reporting.

I now direct the minister of finance to use these offices to put in place workable strategies to ensure that the reforms come to fruition.
In addition, as part of the broader reforms, the auditor-general has been capacitated to undertake a wide range of audits that enables the office to bring out these findings which my government is addressing. Auditor-general we will give you the space and whatever power you require.

Distinguished ladies and gentlemen
I have noted with concern the lack of clarity on the roles of ministers and that of permanent secretaries as controlling officers. My expectation is that ministers will provide policy direction in ministries and ensure that such policy objectives are attained.

On the other hand, controlling officers are expected to implement government policies and programmes through prudent use of public resources for enhanced service delivery and social economic development and it is important therefore that these roles are well defined to be understood by permanent secretaries and the general public. The secretary to the cabinet will during this meeting give more guidance on this issue.

This said however and going through the auditor- general’s reports and other reports, it is apparent that in most cases there has been failure by some of controlling officers to manage staff under their charge as well as public resources.

I therefore direct the public service commission to ensure that erring officers are dealt with in accordance with the public service regulation and not allow disciplinary cases to be resolved through transfers. Controlling officers shielding officers should also be reported immediately to secretary to the treasury and secretary to cabinet for action. There is no such thing as some people cannot be transferred.

Further, in order for me to monitor your performance as controlling officers, I am directing the secretary to the cabinet to include prudent management of public resources as one of your performance assessment criteria.

To law enforcement agencies, I regret to note that a number of cases raised by the Auditor-General and other agencies are not acted upon, I don’t know why. All the time, I am being accused that the president is involved but the president is not involved. If you are a law breaker, you will be dealt with. If you are under my charge and I dismiss you, don’t think that I hate you, do your part.

Distinguished ladies and gentlemen:
I am thus directing the anti-corruption commission, the police, the drug enforcement commission and other security wings to investigate and prosecute expeditiously public officers involved in financial misconduct by acting on the reports of the auditor- general. I wish also to appeal to the courts of law to expedite the cases relating to financial misconduct once these cases are brought before you.

Let me conclude by emphasising that we owe it to our people to work hard to develop this country by using public resources in the most prudent way.

I wish to urge the minister of finance and his team to expedite the implementation of all public financial management reforms we are currently working on to curtail misuse and misappropriation of public resources.

It is my expectation that the audit report for 2018 will not have glaring financial irregularities which will represent clear cases of misappropriation, mismanagement, or corruption.
Any minister or controlling officer or any other public servant implicated in any financial irregularities should face the full wrath of the law.

It is now my honour and privilege indeed to officially open this important workshop.

Thank you and may the almighty god bless the republic of Zambia.
President Edgar Lungu (right) talks to Minister of Finance Felix Mutati (centre) and Eastern Province Permanent Secretary Chanda Kasolo Seminar for Ministers and Controlling Officers at MICC in Lusaka on Wednesday, February 7,2018 PICTURE BY SALIM HENRY STATE HOUSE