Zambia: Technical Assistance Report-Diagnostic Report on Governance and Corruption

IMF Staff Country Reports, January 10, 2023

Source details

Canonical URL: Zambia: Technical Assistance Report-Diagnostic Report on Governance and Corruption

This technical assistance report on Zambia discusses the governance and anti-corruption assessment.
The President and authorities of Zambia have announced a series of important initiatives to address corruption, strengthen governance and the rule of law.
Consistently high fiscal deficits, inefficient public investment and weak controls on spending led to Zambia accumulating large fiscal and external imbalances.
In this challenging environment, the authorities sought the IMF’s assistance to:
- analyse governance weaknesses and corruption vulnerabilities, and
- make specific, country-tailored and feasible recommendations to address governance and corruption risks in wide-ranging areas.
The report identifies near-term reform steps and structural policy measures that require more time and resources but are necessary for sustainable change.
All recommendations coming out of the diagnostic shall contribute to:
- the formulation of governance and anticorruption policies and programs,
- improvement of the legal and institutional frameworks, and
- governance and anti-corruption reform measures agreed to in the Extended Credit Facility Arrangement for Zambia.

Governance weaknesses and corruption vulnerabilities are material contributors to Zambia’s:
- large fiscal imbalances,
- external imbalances, and
- inefficiencies in public investment and spending controls.
The assessment covers wide-ranging areas including:
- Anti-money laundering and combating the financing of terrorism (AML/CFT),
- Budget planning and preparation,
- Corporate governance,
- Public financial management (PFM),
- Revenue administration and transparency and accountability,
- Monetary policy and prudential frameworks,
- Legal and institutional frameworks related to governance and corruption.

Near-term reform steps:
- Specific, country-tailored, and feasible recommendations to address governance and corruption risks.
Structural policy measures:
- Reforms that require more time and resources but are necessary for sustainable change.
Expected contributions of the recommendations:
- Inform governance and anticorruption policies and programs.
- Improve legal and institutional frameworks.
- Support governance and anti-corruption reform measures under the Extended Credit Facility Arrangement for Zambia.

Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT); Budget planning and preparation; Corporate governance; Corruption; Crime; Economic sectors; International organization; Monetary policy; Public financial management (PFM); Revenue administration; Revenue administration transparency and accountability.
Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT); Budget planning and preparation; Corporate governance; Corruption; East Africa; frameworks of Zambia's Revenue Administration; governance arrangement; governance inefficiency; governance Rating; governance weakness; IMF recommendation; IMF resident representative; information framework; prudential framework; Revenue administration transparency and accountability; risk assessment; Southern Africa; terms and conditions.