PFM improvement in developing countries “must adjust to local circumstances”

14 Jul 16

It may not always be possible to implement best public financial management practice in some of the most fragile states in the world, an overseas development expert has told CIPFA’s annual conference.

Simon Gill, from the UK’s Overseas Development Institute told delegates about the challenges of strengthening PFM, accountability and institutions in fragile states at the event in Manchester.

“Don’t impose best practice,” Gill stressed. “Overloading a whole raft of legislation or best practice on a country that is struggling with the basics may not be the right way.”

He highlighted accruals accounting as a good example of something that is often pushed on countries before they are ready.

It was important to “address the problems as they are at the moment” in each particular country, he said.

Instead of trying to discuss medium term planning and budgeting in a place like South Sudan, where those issues might not be relevant for another 10 years, he stressed to start at a level in line with reality in the country and the specific problems it faces today.

Gill said that often donors’ actions can unintentionally make things worse, and sometimes it is donors who need to change.

“We as the international community are generally trying to help but some of the things we impose on countries aren’t always helpful,” he stated, using the example of onerous reporting requirements to demonstrate this.

He also stressed that development was not linear. Shocks can set progress back, he explained, as in South Sudan, where a peace agreement implemented just last month appears to be falling apart after fighting erupted in the capital last week.

In the same way, he urged the importance of considering the additional strain officials in fragile countries work under.

“The people we work with have huge pressures on them, and all sorts of things are going on around them as well as managing the state’s finances,” he said.

He urged development practioners to try not to burden individuals further, for example by pressuring them to attend workshops.

They should work to build trust, demonstrate their usefulness, provide consistency over the long term, and ensure they understand the context, he recommended.

An “incremental approach” where development practioners can keep their longer term vision but measure progress in small steps and iterate and adapt to challenges along the way, he added.

Bryn Welham, the ODI’s country programme manager for Sierra Leone, added a number of other contributors to success.

He said staff should know the country well or have relevant experience in a similar environment, and must be willing to get their hands dirty and do the leg work, and be willing to try different approaches when one fails.

It is also important to build relationships, make yourself useful to people that matter, and demonstrate independence from donors as much as possible, he said.

Also speaking during the session was Sidwell Mofokeng, president of the Institute of Municipal Finance Officers South Africa and CFO of the country’s Gauteng Province.

He described how South Africa had successfully strengthened its budget process through a comprehensive legislative framework.

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