By Francis Chipalo
The Civil Society Organisation Debt Alliance (CSODA) has expressesy concern over the significant setbacks faced by Zambia’s Eighth National Development Plan (8NDP) (2022-2026) in 2023, which the alliance says reveals critical financial challenges.
CSO Debt Alliance Coordinator Peter Mumba says issues such as incomplete debt restructuring, illicit financial flows, and inadequate domestic resource mobilization have worsened the financing gap, hampering the nation’s progress towards its development objectives.
Mumba says the 2023 Annual Progress Report on the 8NDP implementation indicated that only 46 percent of the targets for 2023 were met.
Out of 1,053 targets, 485 were achieved, 109 were partially met, and 459 were unmet.
He states that the economic transformation and job creation strategic development area experienced the highest financing gap at 76.9 percent.
“Despite planning to spend K107 billion on 8NDP programmes, only K48.3 billion was allocated, resulting in a financing gap of K58.7 billion,” he said.
And Mumba has told Lusaka Radio news that significant revenue leakages through illicit financial flows (IFFs), including tax evasion and trade mis-invoicing, have fostered the situation.
“The Financial Intelligence Centre (FIC) reported K56.5 billion in suspected IFFs in the third quarter of 2023 alone, which could close 96 percent of the 2023 8NDP financing gap,” he stated.
Meanwhile, Mumba noted that tax audits conducted between 2014 and 2020 suggest that Zambia could increase tax revenues without raising tax rates, addressing a total tax gap of 47 to 56 percent (United Nations).
“The incomplete debt restructuring process poses additional risks to Zambia’s debt sustainability, affecting credit ratings, access to capital markets, investor confidence, exchange rates, and fiscal policy flexibility”.
To combat illicit financial flows, Mumba says government must develop a robust policy and legal framework that enables effective tracking and prosecution of illicit financial activities.
Lusaka Radio
