The unit’s core works planned for the year 2019 included the following activities:
a) Towards 2022: Refinancing Zambia’s debt
Zambia’s public debt continues to be topical. As the country gets closer to repaying its first Eurobond principal in 2022, a redemption strategy is in the pipeline. Therefore, there is scope for ZIPAR to input into the Eurobond Redemption Strategy centred on refinancing the debt that the Government is putting in place. What exactly should the strategy look like? What types of debts should be obtained to minimise the risks? Should the interest rate be refinanced? If yes, what kind of compounding effects would be faced? These are the some of the critical questions that beg answers that ZIPAR will endeavour to provide. Moreover, it will be imperative to understand the legal and regulatory gaps amongst other, that led to Zambia current debt levels as well as to take a forward looking position by analysing what debt position Zambia would find itself in if it continued on the current debt trajectory.
b) Mid-year Budget Reviews and analysis of the 2020 National Budget
In order to improve and track fiscal policy formulation, management and the general fiscal health of the economy, the Public Finance Unit commenced the undertaking of quarterly budget performance reviews. In 2019, this will be streamlined in the routine work but it is proposed that instead of quarterly reviews, the unit will undertake half-yearly reviews (second half 2018 – first quarter, first half-2019 –third quarter), as well as the analysis of the 2020 Budget Speech in the fourth quarter of 2019.
The unit’s commissioned works planned for the year 2019 will include the following activities:
c) State of Fiscal Decentralisation – Part II: to be commissioned by UNICEF
UNICEF wishes to support a follow up study on fiscal decentralisation in 2019. This is based on the preliminary outcome of the 2018 fiscal decentralisation study which identifies a major weakness on the part of Central Government in implementing the decentralisation programme. This study will be undertaken in the last half of the year.
d) MicroZAMOD for 2019: to be commissioned by UNUWIDER
The new Director of UNUWIDER Kunal Sen indicated that he wishes to continue the tax-benefit microsimulation project started by his predecessor Finn Tarp. As a result, the MicroZAMOD model will be updated to 2019. Additionally, stakeholder engagements including trainings will be undertaken. UNUWIDER will thus be in touch at the beginning of 2019 regarding a follow-up contract and will keep ZIPAR abreast of further developments regarding the project overall.
e) Fiscal Transparency in Zambia: to be commissioned by US Embassy, Lusaka
The US Embassy is researching potential fiscal transparency projects for future possible funding opportunities. Part of this exercise includes assessing if there are an adequate number of organizations that are interested in and capable of implementing and managing a programme to support fiscal transparency in Zambia. This encompasses the area of public budget reporting and analysis as well as public expenditure reporting. There are presently no firm commitments on this study.
Public Finance Research Team:
Dr. Sylvia Mwamba