16 June 2004

Zambia: IFMIS to Start Operations By December, Says Mutati

Lusaka — FINANCE deputy minister Felix Mutati yesterday said the Integrated Financial Management and Information System (IFMIS) will be operational by December this year.

And the Japanese government has reiterated that it has no immediate intentions to resume the balance of payments (BoP) support to Zambia.

Speaking at the signing ceremony for the memorandum of understanding (MoU) on Harmonisation in Practice (HIP) with Japan at the Taj Pamodzi Hotel yesterday, Mutati said IFMIS would assist the government in halting the unnecessary accumulation of liabilities.

"We are at a stage where we are carrying out reviews of the preferred bidder," he said.

Mutati said co-operating partners had agreed to finance the project expected to gobble US $25 million.

He said IFMIS, which will be based on an online mechanism, would initially be implemented in the Ministries of finance, works and supply, health as well as in the North-Western Province before being extended to other government departments and provinces.

Mutati said the government was through IFMIS aiming at enhancing transparency in the usage of donor funds by reducing corruption cases in the use of public funds.

"We are going towards having one central bank account. The automated system will only execute instructions on available monies and will refuse the spending of money outside government allocations," he explained.

"We shall be having instant reports which manually take about three months to finalise. Under manual operations, it's difficult for any corrective measures to be effected."

Mutati added that IFMIS would assist the government save up to one per cent of the gross domestic product (GDP) by minimising on slippages.

He said other countries in the region that have implemented similar systems such as Tanzania have successfully halted the borrowing of money from banks.

And Japanese acting ambassador to Zambia Naoto Hisajima said in a separate interview that there were no immediate plans to resume BoP support to Zambia.

"We don't have immediate plans at this moment. We will discuss with the Zambian government in the future," he said.

Naoto added that what was important in resuming BoP support to the country was transparency in the usage of the allocated funds.

He said the Japanese government was hoping that Zambia would get back on the Poverty Reduction and Growth Facility (PRGF) without much difficulty, following an International Monetary Fund (IMF) board decision on Monday.

"We have been rescheduling debts Zambia is owing Japan and we would like to follow the decision of the IMF," he said.

Naoto said the Harmonisation in Practice MoU would enable donors to share information on the funding of priority areas in Zambia.

"Japan has been taking part in the harmonisation process but decided to officially join," he said.

The signing of the MoU on Harmonisation in Practice by Japan effectively brings the total number of donors that have appended their signatures to 15.

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