Economic experts are divided in opinion over the government’s decision to change the fiscal year from one that starts on July 1 and ends on June 30, to one that will start on April 1 and end on March 31.
A statement published and signed by Secretary for Economic Planning and Development and Public Sector Reforms Winford Masanjala on Tuesday says the development would help the government fund public institutions involved in the agriculture production cycle.
It further says that the government has observed that budgets appropriated in June and implemented from July are late for timely provision of resources, citing the importation of farm inputs and equipment, hence the need to fund and commence import logistics processes much earlier.
“An April-March fiscal year will facilitate early funding for Admarc [Agricultural Development and Marketing Corporation] and the National Food Reserve Agency and capacitate these institutions to compete better in purchasing smallholder agricultural produce,” the statement reads.
It adds that implementation of the change in the fiscal year would occur in phases over a period of two years in that the 2020/21 fiscal year would be maintained to run from July – June but that the 2021/22 fiscal year would be shortened to nine months, commencing on July 1 2021 and ending on March 31 2022.
Reacting to the development, professor of economics at Chancellor college Ben Kalua said the move would bring confusion to the country and set in motion unnecessary inefficiencies.
“Banks and other businesses have their own calendar when they have their end-of-year audits. So, they will not be in synch with what the Ministry of Economic Planning is doing. We already have problems with the current fiscal year, so you are creating another system that will just cause confusion,” Kalua said.
The Polytechnic-based economist Betchani Tchereni said, on one hand, it was good that the country was coming up with a fiscal calendar that responded to the economy but was quick to say that the move would be costly.
“We, as an economy, do not have money and to change the fiscal year requires money because that taskforce will need money to move things. Even changing the laws in Parliament will require money.
“However, it is good that we are moving away from the British system of running the fiscal year to one that respond to local issues,” Tchereni said.
The development is expected to set in motion the review of all affected laws and regulations, re-configuration of the Central Government’s information management systems and synchronisation of systems across the public sector.