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October 05, 2007

Good Financial Governance in Africa - Insights into G-8 GTZ Effort

The G-8 Action Plan for Good Financial Governance in Africa was adopted by the G-8 earlier this year in Potsdam (Germany), and was one of the signature German efforts during their G-8 presidency.  GTZ, one of the German Development Agencies, in their latest Newsletter (September 2007, No. 9), focuses on the origins of the Action Plan concept.

The G 8 Action Plan outlines ten areas for action, drawing on the principles of the Paris Declaration on Aid Effectiveness and ongoing initiatives to support the reform of public finance systems in Africa. It defines good financial governance in a broad sense, ranging from "strengthening African tax systems" to "establishing transparent and comprehensive budgeting procedures" and "supporting fiscal decentralization."

The GTZ Newsletter contains three contributions on the Action Plan.

  • The first item describes the motives and developments that led to the adoption of the Action Plan during the German G-8 presidency. It then points to the challenges that aid agencies and the African countries will be facing with regard to its implementation. The article rightly states that responsibility for improving governance in public finances must be in the hands of national governments and that donors can only play a supporting role. What role exactly they can play is one of the topics of the Public Finances Workshop that GTZ organized in Berlin on September 26 and 27.
  • The second newsletter entry is an interview with one of the driving forces behind the G-8 Action Plan, J. Asmussen from the German Ministry of Finance. Interestingly, he suggests to taking advantage of the annual IMF Art.IV consultations with African countries to assess progress in terms of strengthening financial governance.
  • Third, as an example of how donors can contribute to the implementation of the Action Plan, a GTZ technical assistance project with the EAC (East African Community) is described.

The G 8 Action Plan can be found on the website of the German Ministry of Finance: www.bundesfinanzministerium.de.

Those interested in the GTZ Newsletter should send an e-mail to Dr. Matthias Witt of GTZ (public-finance@gtz.de). The newsletter is available in English and German.

Posted by Christian Schiller

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