By Marvin Chanda Mberi
In the last two consecutive years, the Financial Intelligence Centre has been subject to ridicule by the political players owing to the politicization of the work.
In their quest to paint those in the corridors of power darker than the colour black, reliance has been placed on the perceived ill in the management of national resources to make the exposure a source of despondency especially as we head to the politically charged year.
Without any taint of doubt, some subjective minds expected that “Politically Exposed Persons” (PEPS) will again be the basis of political talking points.
Likely, the litany of allegations of wrongdoing that have previously flooded the Executive and the PEP have since been subdued by the indiscriminate institutional reforms that have been implemented in the aftermath of the 2016 General elections.
We had the liberty to invest time to intently read the latest Trends Report and we are delighted that in an unprecedented move, the PEPs have technically been cleared from the malpractices of yesteryears and they will make no more headlines.
This development has not taken place in isolation but dependent on the various factors which we will highlight in this write up in a fair detail. Herein is our analysis in numerical order.
In its quest to promote efficiency in the prudent utilization of national resources, the PF Government has promoted the independence of the institutions charged with the responsibility to fight against corruption. For example, for the first time, the PF Government under President Lungu’s tenure assented to the Constitution of Zambia in 2016 which enhanced security of tenure for the office of Auditor General among others. For the first time since independence, despite the abuse of the criminal justice system, ACC has arrested but unsuccessfully prosecuting cabinet Ministers.
In its report, FIC acknowledges the institutional framework to the effect that the Inspectorate Department has been introduced to complement its work. In this regard, we do appreciate the enormous role the institution plays to promote financial crime prevention as well as promoting financial crimes literacy among stakeholders.
In its report, we understand that in its quest to consolidate its rigorous efforts, FIC has enhanced inter-institutional collaboration with the relevant regulatory and investigatory wings. This is the sharp contrast with the previous works were it worked to the exclusion of other institutions. It is this previous lonely effort which made the entree to produce uncoordinated and half-baked reports which largely brought the Government into disrepute. The relevant institutions include but not limited to banks, the Central Bank, Zambia Revenue Authority (ZRA), Drug Enforcement Commission (DEC), regulatory bodies among others. We are on record of arguing that had the institution collaborated with other institutions in the past, it would not have produced the previous reports which were clothed with the political overtone.
As regards the lamentation by the institution that it was unable to do a satisfactory work owing to the human resource constraint is with all due respect unconvincing. We say so on our understanding based on the institution’s own admission that it works in collaboration with other institutions. Since FIC and the sister institutions are working to achieve the same objectives, the Centre can take advantage of the goodwill of the sister institutions to exchange information as an alternative to cushion the human rescore constraint.
We are glad about the significant reduction of suspicious transactions from ZMW 1.6 Billion (from the previous Trends Report) to ZMW 984 Million (in the year under review). This is a result of the various internal controls implemented by the Central Government with the operationalizing of the Public Finance Act of 2018 as most financial malpractices originated in the public sector. We have also noted that the financial malpractices have the Accounting Departments and the commercial banks as the weakest link. Lessons have been learnt and let the right thing be done. Never is the less owing to the observation of specific laws which were violated by perpetrators, the onus on the institutions charged with administration and enforcement of necessary laws to put their houses in order and take a preventive approach.
On the exposed fraud allergy committed by the Mining Companies, the revelation by the Centre has exonerated ZRA Commissioner General Mr. Kinsley Chanda who had brushed shoulders with the Mining Companies on matters of taxation. ZRA must therefore take a firm stance and defend our sovereignty on taxation. Looking at the complexity of Tax fraud, the Taxman must ensure that as per the recommendation espoused in the Trends Report, take practical measures within the law to strengthen its capacity to counter future tax cheating and ensure that correct taxes are paid. The Trends Report at page 20 (although did not expressly say so) seems to prefer the introduction of Sales Tax to substitute the frequently abused Value Added Tax (VAT). It is our hope that this will bring the stakeholders to the negotiating table and ensure that the best interest of the nation is secured in the administration of taxation.
As regards corruption in the award of tenders, our submission is that the ills lie in the incoherent in the implementation and administration of the procurement system. In this regard, there is need to confer Zambia Public Procurement Authority (ZPPA) institutional independence (preferably it should report only to the President) as this will safeguard its oversight and supervising authority in the quasi-Government institutions who are one of the busiest procuring entities. This is one of the ways to endorse the recent proposal by Zambia Institute of Purchasing and Supply (ZIPS) to introduce the position of Procurement General when the leaders met with President Edgar Chagwa Lungu. The State-Owned Enterprises (SOEs) cannot be therefore be explosively excluded in the noble cause of implementing a highly transparent procurement system devoid stains of corruption. This requires a heightened supervisory system by the respective Boards of Directors to whom residue authority to supervise SOEs is irrevocably delegated into. With sound Corporate Governance, the Boards can easily hold the Management of the erring parastatals accountable.
With regards to crimes allegedly committed with the aid of Financial Service consumers, perhaps it is one of the gaps that are in place that promotes illicit financial transactions. It is high time some provisions of the Banking and Financial Services Act no. 7 of 2017 were amended to integrate Mobile Money Services as part of the definition of the bank.
In conclusion, after careful scrutiny of the report, our observation is that the report presented no mention of wrongdoings by the Presidency, his cabinet, PF or its structures or indeed PEPs. Indeed, this must be commended as the previous reports are now bearing fruits and we hope there will be a corrupt-free public service delivery. The pilferage of financial resources has been linked to the procuring entities and this has necessitated the institutional and legal reforms of procurement laws. We expect in future that the Centre will be useful in thwarting the financial scammers who have now invaded the Mobile Money services as there is a need for assured consumer protection in the financial market.
Wholesome analysis. As Edgar Lungu said, the fight against corruption has to be institutional not on media platforms.
Zambia has reached the lowest in almost all parameters, like the economy, carder polarization (specifically PF), corruption, lack of leadership that inspires, collapse of all institutions of governance etc, the only hope for Zambia now is to bring in people who can redirect this trajectory and not those who will perpetrate it and the answer is clear, REMOVE PF. ONLY A THOUGHTLESS PERSON WOULD THINK OTHERWISE.
@Samalindo: You sound quite stup!d when you say Zambia has hit rock bottom in terms of corruption fight and all institutions. Just last week, the Chief Justice issued an SI which will change guidelines on case management, you are equally aware that ECL is the first president since independence who can’t set up tribunals for judges/directly fire them. It is ECL, not Levy who put the FIC into reality and is doing his best to make it functional, non-political and independent. So I really wonder where you are getting your FACTS from!!!!!
The problem with Pf is that it awaits for people ‘ response….When people know the kind of persons in , they are careful in respondin6…. it like a man come to a group of people and darts loudly expecting their response. Alas the group of people are careful because the motive is unknown…… Everyone deserves a decent life
Silent but wise hardworking president unlike the one who is noisy on social media and yet when questioned about his role in privatisation he tries to silence people such courts. I know the diasporans are gnashing their teeth to this great development while wiping old people’s backsides
Antonio mwanza AKA Zambian citizen
“….It is ECL, not Levy who put the FIC into reality and is doing his best to make it functional, non-political and independent…”
FIC is not by lungus choice but international banking laws to help combat terror financing……
Lungu has tried every way to cripple and silence FIC…..
The reduction is simply because the nation is broke,and as the FIC noted the PEP’s are now targeting gold and other resources
THIS FIC REPORT WAS TAILORED
For the first time in Zambian history, the Chosen one broke the record by keeping a minister in office who was facing grievous allegations of rampant corruption and who was being investigated by the government’s own Law Enforcement Agencies. Has the PF government been more than complacent in the fight against corruption? Or is it that we the Zambian citizenry, have become used to seeing a person who is being investigated step down in order to pave way for smooth investigations, as orchestrated by the previous regimes? Is there a law somewhere which openly stipulates that a person who is under criminal investigations should leave office to facilitate the expedition of the investigative exercise? Has the fight against corruption been the PF’s Achilles heel? Only time shall answer these…
The problem with the PF is that they dont want to account for their actions and failures and learn from them .Right now they are moving with sacks of money bribing people .Comedians like Dubai Lusambo even sneaks unannounced into Luanshya carrying bus loads of tax payers money to bribe people . Tayali and Nawakwi their vuvzela decides to look away because Tabalyemo when he opens their mouth.
The vetting process for FIC team should be tightened further. This is a breath of fresh air. The previous team was full of political animals lead by one John Kasanga, who should never have been allowed anywhere near that organization.
If properly investigated, it would have been dead clear that John Kasanga is unashamedly a UPND cadre. John Kasanga worked with the young Economist HH at coopers and leabrand, which later came to be known as Grant Thornton. By the time Kasanga left to set up his own independent consulting company, he left HH at the helm of Grant Thornton. These are life long friends. So when Kasanga decided to release information which was unprocessed, raw and uninvestigated to the media before handing it to the appointing authority and the police, it was a political favour…
Antonio Mwanza AKA Zambian Citizen
“….It is ECL, not Levy who put the FIC into reality and is doing his best to make it functional, non-political and independent. …”
Lungu had no choice but to accommodate FIC for Zambia to allowed into the world banking system ……..this is a requirement to combat global terror financing.
Lungu has tried everything to suppress and cripple FIC
-First of all , the FIC was underfunded for the first time since its creation.
-While the number of reported suspicious transactions reduced , the value doubled from 2018.
-Massive tax evasion by PF connected individuals
-The illegal trade in Mukula tree by connected people continues through the DRC instead of South Africa.
-The case example given in the report is very to the Chitalu Chiluyfa case.
I am on record on this platform in 2018 as having advised PEPs to agree to postpone stealing until after the 2021 elections.Isn’t too late to reach consensus now?
Here is what I got from the report:
‘ During the period under review, Suspicious Transactions Reports received related to procurement corruption reduced. As a result,
the number and value of intelligence reports associated with this predicate offence also reduced. Further, the reduction in the number and value of
intelligence reports analysed is attributed to UNPREDICTABLE FUNDING. This adversely affected the Centre’s ability to verify STRs and SDRs.’
Starve the dog and it will not catch criminals. This does not mean that crime has fallen.
Redacted, doctored, edited report. That would be expected, PF admonished FIC last time for releasing the report to the public before releasing it to them, and one wonders why they would want the report first if the content has to remain the same. Redacted, doctored, edited
$tyopet !diot with short memoriy!
Have you already forgotten that PF conveniently released the FIC report amid the hyped malicious Privatization lies to frame an innocent citizen whose only crime is to aspire to the office of Republican President?
Now that PF has been caught in their schemes again, you want to come up with another $tyopet issue? The right people you should be asking are the accused persons. What is PF doing about their FIC filth? The answer is mfwiti mfwiti nothing!
Spaka-unasheko amalyashi yamu chibuku. Ukubweshapo fimo na fimo ifyabupuba is tiring. Have you nothing better to do???