Development process

Formulation can also be seen as the process of drawing something up carefully and in detail (Ibid; pap: 2004). Implementation can be defined as the putting of something or action into effect (pop. Cit; 2004). A national budget is an annual plan which shows how much money the government thinks it will receive in the next year and what it will spend that money on. This shows that the budget has two sides, namely the expenditure and revenue side. The revenue side show where the government will get the money to spend of which among other sources include; taxes, customs, duties overseas loans, grants and donations.

The expenditure side on the other hand shows where the money will be spent on, for instance on health, education and infrastructure development (Numskull; PAP: 2005). The national budget is a vital economic policy instrument; it is used as an economic policy tool to allocate public financial resources in accordance with policy priorities and to use financial resources effectively to achieve government policy goals. The budget process is characterized by relative transparency and openness and broad participation.

This is to reflect the Sino of economic and social development of governments and more generally the values of society. It also reflects the choices that the government has to make in order to realize their social and agenda. Underlying these choices is also the balance of power relations among different social groups (Ibid; P 13: 2005). The Zambia budget process broadly has four stages namely; Drafting also known as formulation, Legislative, Implementation and Auditing. In Zambia the budget runs from the 1 statuary to 31 SST December of the same year.

Around May and June the minister of finance and National Planning issues a edged circular to spending ministries and ask them for budget proposals based on the medium term expenditure framework(METE) as a guiding principle. The METE determines the overall direction of the annual budget. The spending ministries and agencies submit budget proposals to the ministry of Finance and National Planning between June and November. In November the (MOP) submits a draft to cabinet for review (Means; pap:201 1). The Drafting stage is the first stage of the budget process and it is mainly the domain of the executive.

Generally, the ministry of finance and national landing initiates the budget formulation process. This is done through the issuance of a ‘call circular to controlling officers. The call circular gives the general economic policy guideline and expenditure ceilings on which the budget for the following year is to be based. The minister of finance then considers possible levels of revenue and the way of financing this magnitude of the budget based on this guideline. Once this is determined the total expenditure level is worked out depending on the medium term expenditure framework (Ibid; pap: 2011).

Upon receipt of the call circular, controlling officers prepare draft estimates for the budget in the form in which they are to be submitted. The estimates are then debated by the controlling officers (permanent secretaries) from various ministries chaired by the minister of finance. At this stage the adjustments are made in order to adhere to the general policy agreed upon earlier. Thereafter, the proposed draft budget measures are sent to cabinet for debate and approval before compiling the estimates of revenues and expenditure (Peter; pap:2001). Another important stage in the budget process is the legislative stage.

The legislative stage is a stage when the official budget is presented to the general public through the National Assembly. The constitution of Zambia mandates that the ministry of finance and national planning to present the proposed budget to National Assembly. Article 1 1 ) of the constitution of the republic of Zambia stipulates that “the minister responsible for finance shall cause to be prepared and shall lay before the National Assembly within three month after the commencement of each financial year estimates of revenues and expenditures of the republic for the financial year”.

After the budget presentation also known as the budget address, parliamentarians are given a chance to deliberate upon the proposed budget. Each allocation is discussed through three stages of the house and once all allocations are discussed and agreed upon, the budget is then approved and an appropriate Act is enacted (Mathews; pap: 2009). After the parliament enacts the appropriate Act, the president the signs a General warrant which is passed to the minister finance and the other copy is sent to the Auditor General’s office for information.

The general warrant empowers controlling officers in various budget units to start spending their allocations. At this stage budget implementation commences (Among; pap: (2011 Although the budget formulation and implementation may seem to be a straight forward process in Zambia, the minister finance would likely encounter a number of problems in the budget formulation and implementation. These include; information difficulties, donor funds, and lack of transparency about fiscal discipline.

Budget information is generally incomplete, unreliable, difficult to understand, inconsistent, with poor classification and often outdated to be useful. This would posses as a difficult to the minister of finance because the formulation and the implementation of the budget would be based on past incomplete, poorly classified and often outdated information, resulting in a poorly formulated budget.

Another difficult that the minister of finance would encounter in the formulation and implementation of the budget, is the information on the conditions and outcomes of donor funding, extra-budgetary activities, procurement, debt and in year actual expenditure is either inadequate or entirely absent, this would be due to lack of transparency in the disbursement f funds. Also mechanisms for the co-ordination of donor funding remain inadequate, this results in difficulties especially in the implementation phase as the minister of finance is never sure of how much funding is coming from donors.

This results in the allocation of an-accounted donor funds to unnecessary activities. This would bring about misinterpretation in the implementation phase. Last but not the least, while Zambia has adequate human resource and institutional capacity, the systems supporting budget transparency and participation do not currently function as they should. The lack of transparency about fiscal discipline or providing a budget forecast, makes citizens unaware of the fiscal constraints that the government is facing through the minister of finance and can demand services and goods than the government is not able to deliver.

In many cases the minister of finance would not be able to implement a well balanced budget due to cash constraints resulting from poor financial management. In conclusion, budget formulation and implementation is a very important process to any country, but more particularly to Zambia, this is because it ensures that some systematic manner is followed in the allocation and disbursement of funds to all important institutions in the country for use in development process.