Strengthening PFM in the Central African Republic

CAR-PFM
 

Posted by Olivier Benon, Abdoulaye Touré and Marie-Christine Uguen[1]

From November 24—28, 2014, AFRITAC Central (AFC) organized a seminar in Douala, Cameroon, on rebuilding the budgetary and accounting  functions of the Central African Republic (CAR). The workshop was attended by 28 finance officials from CAR’s Ministry of Finance and Budget, the Ministry of Economy and Development, several line ministries (Health, Education, Public Service, and Defense) and the central bank (BEAC).

Background and objectives

Because of the tense security situation in Bangui since 2014, AFC has been unable to deliver technical assistance (TA) in CAR, and have instead used safe havens in neighboring countries such as Cameroon. The November workshop was the first of a series of similar events dedicated exclusively to CAR officials during FY2015.

The agenda focused on budget execution and cash management and was tailored to the specific TA needs of fragile states facing poor revenue mobilization and a high demand for public spending in priority areas. One of the workshop’s objectives was to share PFM experiences in a post-crisis environment.

The workshop’s main outcomes included: (i) the identification of issues faced by officials in the preparation and implementation of the state budget, and in strengthening accounting and cash management functions; and (ii) the endorsement of an action plan of short-term measures to address these challenges.

National experience in PFM management during the crisis

The main topics discussed included: macroeconomic frameworks and economic perspectives; budget preparation and execution frameworks; tax and customs administration; control/auditing; accounting and cash management; and the implementation of a treasury single account (TSA). In each of these areas, participants from the relevant departments and line ministries presented an assessment of the current situation, the challenges being faced in moving forward, and measures proposed to address these challenges.

The presentations were followed by extensive discussions on priorities and possible approaches to address the issues identified. The AFC Resident Advisors and regional expert provided technical advice on how to maintain and operate the PFM system in a post-crisis situation, focusing mainly on the areas of budget preparation and execution, accounting, cash management, and IT system security.

How to strengthen PFM systems in the post-crisis phase

The main message delivered was that officials, to the extent possible, should implement the requirements of the legal and regulatory framework in all circumstances. Specifically, the Resident Advisors emphasized that no exceptional PFM procedures should be established during the post-crisis period, as the legal framework already offers a wide range of possibilities to manage specific issues. For example, a petty cash procedure can be used for urgent expenditures, with the appointment of a responsible manager to issue expense vouchers, or the urgent public procurement procedure applied to cover budget needs that have a high priority. 

Three thematic subgroups discussed the following topics: (i) mobilization of customs and tax revenue; (ii) processing expenditures; and (iii) accounting, cash management and implementing a TSA. Participants identified a range of short-term measures that would enhance PFM management in these areas.

 Recommendations and next steps 

 The main recommendations arising from the workshop were the following:

 Improving revenue mobilization

 Managing and controlling expenditures

 Enhancing public accounting and cash management

Next steps

During FY2016, AFC will review the implementation of the action plan and provide follow-up advice, either in Bangui or through the organization of similar workshops devoted to CAR officials.

 


[1] Olivier Benon is the AFC Coordinator; Abdoulaye Touré and Marie-Christine Uguen are the AFC PFM Resident Advisors.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

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