Soon after the Budget Speech, when some Patriotic Front parliamentarians pointed out that the numbers in the 2022 Budget Speech were not balancing, I thought they were merely politicking. This is because the format of the Budget Speech presented by the Minister of Finance and National Planning was no different from that presented by his predecessors, including during the time that the Patriotic Front was in power. To therefore suggest that the numbers did not add up was downright mischievous.
But with the latest comments coming from the learned MP for Lunte and former Minister of Communications and Transport, Hon. Mutotwe Kafwaya, it has dawned on me that it is not mere politicking, but genuine limited knowledge (I almost said ignorance) of how the budget is presented, even by people who previously served in senior government portfolios who should know better.
It is important to distinguish between what is presented in the Yellow Book and the numbers presented in the Budget Speech. First, unlike the Budget Speech, which is essentially a summary of the Budget, the Yellow Book provides the detailed estimates of revenue and expenditure presented based on conventional government accounts, and the two documents are consistent. Perhaps the confusion is because the Ministry of Finance and National Planning executes some expenditures centrally on behalf of the ministries or sectors. The recruitment of 30,000 teachers is accounted for under the Centralised Holding Vote programme of Head 99 (Statutory and Constitutional Expenditure), not under the Ministry of Education. Additionally, the dismantling of arrears to local suppliers of goods and services, fuel arrears, and some sector capital projects are also examples of other centralised expenditures that fall under Head 21 (Loans and Investments) which is also under the Ministry of Finance and National Planning.
Second, while the Yellow Book reflects the organisational structures of government, the Budget Speech numbers are based on the Classification of Functions of Government (COFOG), or simply functional classification. The COFOG is an international classification that shows the purpose for which outlays are undertaken. So, regardless of which ministry it falls under, a medical facility, for example, will be classified under the health function. This entails that the reported health function in the Budget Speech will not only include expenditure pertaining to the Ministry of Health but health facilities such as Maina Soko and Northern Command Military Hospitals which fall under the Ministry of Defence. The Zambia Colleges of Agriculture in Monze and Mpika and the Natural Resources Development College are functionally classified as education even though they fall under the Ministry of Agriculture; so is Chalimbana University which falls under the Ministry of Local Government and Rural Development.
The beauty of this is that COFOG permits trends in government expenditure on particular functions or policy purposes to be examined over time. With the changes made to ministries and departments since the UPND came to power, it will not usually be possible to use conventional government accounts to compare expenditure on these purposes over time. But with functional classification, we can compare education expenditure during the reign of the Patriotic Front to that of the UPND and gauge the policy direction.
To minimise unfounded speculation and misinformation, it is important that the Ministry of Finance and National Planning, as well as the Parliamentary Budget Office, conduct capacity development workshops for our lawmakers as well as those serving in government on how to interpret the budget numbers.
