ZICA criticize proposed new currency rule
… As Mwenye Raises Concerns Over Rising Financial Mismanagement in FIC Report
By Francis Maingaila ♥️
Lusaka, Zambia24 – (13-08-2024) – *
The Zambia Institute of Chartered Accountants (ZICA) has raised significant concerns regarding the Bank of Zambia’s proposal to regulate foreign currency transactions.
At a media briefing this morning, ZICA President Yande Siame Mwenye criticized the proposal, arguing that such regulations could disrupt the local economy and deter foreign investment.
“Such regulations have the potential to severely impact our local economy and discourage much-needed foreign investment,” Mwenye stated.
She also expressed disappointment at ZICA’s exclusion from the consultation process, stressing the importance of involving relevant stakeholders in discussions about crucial financial regulations.
“It is crucial for relevant stakeholders, like ZICA, to be included in these discussions,” she added.
In addition to critiquing the foreign currency regulations, ZICA highlighted an alarming increase in illicit financial flows and tax evasion.
According to the Financial Intelligence Centre (FIC), Mwenya observed, Zambia has experienced a rise in these activities, with losses totaling K61 billion. Mwenye emphasized that financial misappropriation, whether public or private, should carry significant consequences to act as a deterrent.
“Financial misappropriation must be met with severe consequences to deter future violations,” Mwenye noted.
She also pointed out that a lack of accountability and transparency remains a major obstacle, creating a gap between expected and actual outcomes in financial management.
“The persistent lack of accountability and transparency continues to hinder our financial management efforts,” she remarked.
She said ZICA has identified several challenges in strengthening financial institutions, particularly inadequate resources and funding.
To address these issues, the organization has recommended reforms to enhance financial accountability. These recommendations include targeted capacity-building, improved accountability mechanisms, and ensuring that qualified accountants are involved in local authorities to promote transparency and adherence to ethical standards.
“We advocate for targeted capacity-building and better accountability mechanisms to strengthen our financial institutions,” Mwenye said.
In response to growing concerns over financial mismanagement, the Zambia Revenue Authority (ZRA) has introduced the Smart Invoicing System.
Launched on April 1, 2024, this system aims to improve financial management by enhancing tax invoice monitoring, reducing tax evasion, and ensuring accurate recording of sales transactions.
With 12,000 taxpayers already registered, the system is expected to increase compliance, boost transparency, and streamline financial processes.
The deadline for full implementation has been extended to September 30, 2024.
“The Smart Invoicing System will significantly enhance our financial management practices and improve tax compliance,” a ZRA spokesperson stated.
Another significant development is the Ministry of Green Economy and Environment’s National Green Growth Strategy, launched in April 2024.
This strategy aims to achieve sustainable economic growth, reduce poverty, and promote environmental sustainability.
It aligns with Vision 2030, Agenda 2063, and the UN Sustainable Development Goals (SDGs).
She said ZICA supports the strategy’s goal of reducing greenhouse gas emissions by 25% by 2030 and increasing renewable energy resources to 50% of the total energy mix. “We fully support the strategy’s ambitious goals, including reducing greenhouse gas emissions and increasing renewable energy resources,” Mwenye affirmed.
Despite these advancements, Zambia faces ongoing challenges in debt management, economic growth, and energy shortages.
The government has recently restructured the country’s debt, which is expected to stabilize the financial landscape and restore access to international capital markets.
Recent upgrades in Zambia’s sovereign ratings by Moody’s and Fitch Ratings reflect progress in debt restructuring, which is crucial for attracting investment and funding future infrastructure projects.
“The restructuring of our debt is a critical step towards stabilizing our financial landscape and attracting international investment,” a government official commented.
Additionally, the Zambian government plans to increase the Constituency Development Fund (CDF) allocation in the 2025 budget to ensure that development projects benefit all regions.
However, recent allegations of CDF mismanagement have prompted audits and investigations into the potential misuse of these funds.
“We are committed to investigating any allegations of CDF mismanagement to ensure that funds are used appropriately,” a spokesperson from the Ministry of Finance stated.
ZICA’s critique of the foreign currency regulations, along with its focus on improving financial management, underscores broader concerns within Zambia’s financial and economic sectors.
The ongoing call for greater accountability and transparency remains central to addressing the country’s financial challenges and promoting sustainable economic growth.