Africa has made some progress on its public financial management reforms, but there is still a long way to go. There are a number of 'missing links' in PFM programmes across the continent
There has been, and still is today, no shortage of attempts at administrative and governance reforms in Africa, dating back to the early days of independence and democratisation. Some of these have improved systems and been embraced wholeheartedly, while others have not resulted in any positive change.
Public financial management reform efforts across Africa have focused on three broad themes: fostering market-friendly governments through privatisation, deregulation and trade liberalisation; emphasising greater discipline in civil service and budgetary regimes; and modernising and formalising government processes through fiscal rules, Medium-Term Expenditure Frameworks, internal audit regimes and decentralisation.
Where reforms have not brought about an improvement to the budget system, it could be that the move was intended merely to make the government look good to the donor community.
Public Expenditure and Financial Accountability scores appear to indicate that, despite the myriad reform programmes across the continent, several challenges remain. These reveal that about 90% of African countries have de facto gaps, meaning they score lower in implementing laws than they do in passing them.
Countries such as The Gambia, Seychelles and Ethiopia do not have de facto gaps; meaning their implementation of laws is stronger than the laws themselves.
The Pefa data also reveals that 93% of African countries have gaps when it comes to decentralising regulation, meaning those who have to implement the rules score lower than those who pass laws and introduce processes.
However, Botswana, The Gambia and Niger do not have these gaps. Their concentrated agencies (such as central government departments) appear to be less effective than their implementing agencies (including local government).
Furthermore, 78% of African countries have ‘downstream’ gaps, meaning budgets are formulated better than they are executed.
The countries whose budget formulation processes are not as strong as their budget execution processes are: Chad, Seychelles, Mauritius, Tanzania, Cote d’Ivoire, Niger, Ethiopia and Congo.
Similarly, the Open Budget Index – a measure of budget transparency, participation and oversight – reveals comparable gaps. About two-thirds of countries have a transparency gap, especially in the sense that budgets are more transparent at a central level than where they are being implemented.
These issues were discussed recently at the ninth annual seminar of the Collaborative Africa Budget Reform Initiative. Senior budget officials from 26 African countries met over three days in Nairobi to examine critical challenges in public financial management reforms. Delegates unpacked the reasons many African countries have moved from one budget reform to another without making the system more functional.
The seminar aimed to explore the ways senior budget officials can promote change and embed the reforms in a way that improves budget systems, and to do so in the context of: leadership challenges; scarce capacity; poor pay; inefficient bureaucratic processes; donor pressure; and weak incentives.
The underpinning analysis for the seminar was based on work undertaken by Matt Andrews, associate professor at Harvard Kennedy School of Government. Andrews’ premise is that reforms fail because: the contextual realities are often overlooked; ‘best practice’ interventions are often beyond the reach of developing countries; and reforms often focus on narrow groups of champions, which results in implementation problems later on.
Officials present at the seminar identified a number of ‘missing links’ in their reform programmes, including:
• insufficient reflection on fundamental problem and priorities;
• reform content driven by international ‘best practice’ and not aligned with local constraints;
• inadequate communication with stakeholders and political leadership on reform needs and objectives; and
• persistent capacity constraints at different stages of the process.
But they did offer some potential remedies, such as:
• using clear strategies, adequate feedback and strong coordination;
• introducing parallel public sector reforms, since PFM reforms are not likely to work without these; and
• inclusion of the implementing institutions, which are often located at a decentralised government level.
Clearly, while progress has been made on public financial management reforms in Africa, there is still a long way to go. We hope to see some positive strides by the time we meet next year for the tenth annual seminar.
Neil Cole is executive secretary of the Collaborative Africa Budget Reform Initiative
This opinion piece was first published in the October edition of Public Finance magazine
