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June 2018

June 15, 2018

Budgeting for Gender and Children’s Rights in Burkina Faso

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Posted by Vieux Soulama and Ksenija Maver[1]

In Burkina Faso, since 2014, gender equality and children’s rights has become an important element in the country’s policies of economic and social development, and in the budget process. This initiative is linked closely to Burkina’s recent development of program budgeting, since a focus on results offers a good opportunity for mainstreaming gender and children's rights in development programs.

Payoffs from coherent social and fiscal policies can be substantial. This is particular true in a country where only one of 100 women and only four in 100 men complete secondary school, where only 26 percent of women and 44 percent of men over 15 can write, and where over 40 percent of children are exposed to trafficking, hazardous work, and violence. Five of the six countries with the highest prevalence of child marriage in the world, including Burkina, are in West and Central Africa. In Burkina, this ratio exceeds 50 percent.

A recent study by the IMF[2] showed that per capita income growth in low-income countries of Sub-Saharan Africa could increase by as much as 0.75 percentage points if gender inequality were reduced to the levels observed in the fast-growing Asian countries. In Burkina, whose GDP per capita is about US $700, this translates to an opportunity cost of around US $90 million per year. These numbers alone call for a rapid and comprehensive response from the government.

Policy measures

An increasing number of countries around the world are introducing gender-responsive budgeting. In Africa, Morocco, Uganda and Rwanda are among the champions. Child-sensitive budgeting is relatively new compared to gender budgeting, and is being introduced in a handful of countries, including South Africa, the UK, India, and Brazil. In Burkina, a good start has also been made, with the Ministry of Economy, Finance and Development, and the Ministry for Women, National Solidarity and Family in the forefront.

Pro-gender and pro-children policies are an important element in the Sustainable Development Goals (SDGs), Burkina’s 2030 Agenda, and the National Plan for Economic and Social Development (PNDES) for 2016-2020. Their implementation in Burkina involves four key steps.

First, strengthening the existing institutional framework and promoting extensive consultations.

This framework incorporates national strategies on gender and children's rights, the focal points for gender in each line ministry and at the Court of Audit, as well as the women’s caucus at the National Assembly. It has enabled an open dialogue—involving line ministries, the Parliament, the Court of Audit, civil society, and the development partners—on pro-gender and pro-children policies.

Second, reinforcing program-based budgeting, which looks at how to deliver public services in an effective and efficient way (e.g., increasing the participation of girls in secondary education from 0.65 in 2016 to 0.80 in 2020) rather than on inputs (e.g., teachers’ salaries), and shows why social policies should focus on people and promote inclusion.

Third, launching an extensive capacity development program, which has included:

  • The development of learning materials (a training manual, eleven case studies, a didactic guide for the trainers) and a fact-sheet as well as a strategy brochure to present the objectives of the strategy and raise awareness;
  • Creation of a pool of 25 trainers from ten line ministries; and
  • Organization of training and awareness-raising events, which covered, from early 2017 until end-April 2018, more than 550 representatives from 24 line ministries, the Court of Audit, and civil society, together with 75 parliamentarians. The participants will use these skills in presenting their budget programs, devising mechanisms for tracking performance, and discussing specific actionable targets with the development partners. Most of the training has been conducted through Burkina’s National School for Public Finance (ENAREF). A study visit to Morocco in March 2017 provided an opportunity to learn from Burkina’s peers.

Fourth, preparing technical instruments to smooth the implementation, involving:

  • Clear instructions in the budget circular for 2019, with six ministries selected to pilot the initiative by formulating gender- and children’s rights-sensitive programs, actions and activities, together with quantifiable objectives and indicators, and the inclusion of these programs in the ministries’ annual performance reviews;
  • Disaggregated data as well as gender and children’s rights specific indicators; and
  • A new budget code to evaluate the performance and impact of gender and children’s rights programs, and use this feedback to inform future actions.

A group of development partners supported these reforms.[3]  

Going forward

The framework for gender and children’s rights responsive budgeting will be rolled out gradually to the remaining ministries. Supported by extensive outreach activities, and an updated set of learning materials, it will later be extended to the local level.

The development is as much about transforming the informal institutions and mindsets as about changing rules and procedures. An open dialogue and a wide consultation process are critical, as is the development of relevant skills and competencies in public administration. Strengthening collaboration at the national and local level will be essential. As one African proverb puts it, “If you want to go quickly, go alone. If you want to go far, go together.”

 

[1] Vieux Soulama is General Director for the Budget at the Ministry for Economy, Finance and Development of Burkina Faso. Ksenija Maver is Project Leader of the “Strengthening Good Financial Governance in Burkina Faso” at GIZ (German International Cooperation - Deutsche Gesellschaft für Internationale Zusammenarbeit).

[2] International Monetary Fund, 2016. IMF Working Paper WP/16/111. Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa.

[3] In particular, the UNICEF, the Swiss Agency for Development and Cooperation, USAID/National Democratic Institute, the Delegation of the European Union, a multi-donor trust fund (FCC, Le Fonds Commun Genre), Canada, the Austrian Development Agency (ADA), and GIZ

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.

June 12, 2018

PFM Reform in the Caribbean

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Posted by Suhas Joshi, Richard Allen, and Bruno Imbert[1]

A regional workshop on “Financial Processes—Transparency in Budget Practices and Execution in the Caribbean”, under the auspices of the Fiscal Management in the Caribbean Program (FMCP), took place in Belize City from May 28 to June 1, 2018. The workshop, which was the second of its kind in the region, gathered together senior staff from eight countries in the region—Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, St. Vincent and the Grenadines, St. Kitts and Nevis, and St. Lucia. One participant from Budget Department and one from the Accountant General’s Office of each country participated in the workshop. This mix of roles promoted a lively interaction among the participants, and facilitated understanding of the linkages between these two critical areas of PFM.

The workshop covered a series of interconnected topics. These included fiscal policies, laws and rules, transparency in budget formulation and execution, the management of state-owned enterprises (SOEs), public investment management, and gender budgeting. There was much discussion of the close inter-relationships between these topics, and how an appreciation of these linkages could contribute to the more efficient and effective management of public finances. The training focused on peer-to-peer learning, and included lectures by the facilitators, hands-on exercises, and the sharing of country experiences, with a special focus on state enterprises.

Some of the main messages of the workshop were as follows.

Two Caribbean countries (Jamaica and Grenada) have developed a fiscal responsibility law or included similar provisions in their budget legislation. St. Lucia is in the process of incorporating them into its new PFM Law. Only a few countries in the region have developed quantitative fiscal rules, and only one country (Antigua) has prepared a fiscal risk statement, which is not published. The development of oversight bodies, such as fiscal councils, has so far been limited.

Some progress has been made in developing medium-term fiscal frameworks in the region—including the application of sensitivity tests and scenario analysis to macro-fiscal forecasting in a few countries—but medium-term budget frameworks are still work in progress. Annual budgets lack credibility. Cash is subject to rationing, and cash forecasts are unreliable, making budget execution prone to uncertainty and the creation of arrears. This is particularly the case for the implementation of investment projects for which neither reliable cash forecasts nor procurement plans are prepared and regularly up-dated. Some countries have established cash management units and cash management committees, and are working to make effective use of them. Progress on establishing single treasury accounts across the region, however, has been relatively good.

The fiscal governance of SOEs is quite weak across the region. Public corporations and non-commercial public entities are combined within the same classification, which in some countries weakens oversight of the larger, more risky corporations, such as electricity and water supply. Ministries of Finance have relatively limited powers to exercise oversight of these corporations, or to obtain regular fiscal information from them. Some SOEs do not prepare annual financial statements on a regular basis, or submit these statements for audit, though required to do so by law. Political patronage plays a leading role in the election of the boards of management of these companies.

A high proportion of public investment (over 90 percent in many of the countries) is externally-financed, which ensures that some key elements of infrastructure governance, including cost-benefit analysis and procurement, are conducted according to the high-level international practices adopted by the donors. There are few public-private partnerships (PPPs). In relation to domestically-financed investment projects, however, there are considerable weaknesses in infrastructure governance, especially in areas such as project appraisal and selection, and public tendering, though some countries are in the process of modernizing their procurement laws. As a result, the eight FMCP countries face challenges in improving the efficiency of public investment. Data on investment projects are very scarce and fragmented.

In small countries such as these, political economy factors and state patronage tend to dominate the budget process, public investment, and the management of SOEs. The economies are prone to the creation of white elephants, inefficient spending, and waste. Moreover, the governments lack the human and technical capacities that would be required to counter-balance politically-dominated decision making, and to upgrade their PFM systems. Reforms such as modernizing the governance of state enterprises, have proved intractable because of political resistance, including in Ministries of Finance. A staged approach to reform, in which low-hanging fruit such as the proper classification of state enterprises, and improved reporting, might offer a way forward, though falling short of a complete solution.

Finally, the workshop included a lively discussion of gender budgeting initiatives around the world. Little progress has been made so far in the region with such initiatives, but the existence of program-based budgets in many of the countries creates an opportunity for developing a gender-sensitive approach to budgeting.

[1] Suhas Joshi is the IMF’s Regional PFM Advisor for the Fiscal Management in the Caribbean Program (FMCP), which is financed by Canada. Richard Allen is a Visiting Scholar with the IMF’s Fiscal Affairs Department (FAD), and Bruno Imbert is an Economist in the same department. The workshop was facilitated by Mr. Joshi, Mr. Allen, and Mr. Imbert, together with Courtney Williams (Advisor, Executive Director’s Office, IMF).

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.

June 05, 2018

Strengthening Infrastructure Governance: IMF Updates PIMA Framework

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Posted by Staff of the IMF’s Fiscal Affairs Department

Large infrastructure bottlenecks  in many countries, as well as gaps in the quality of and access to areas of infrastructure (e.g., education, health, energy, water and transportation) are critical to countries’ economic and social development, and to spur economic growth. Low-income countries need infrastructure to achieve the sustainable development goals (SDGs), emerging markets need to address infrastructure bottlenecks, and advanced economies need more infrastructure to maintain economic growth.

Continue reading " Strengthening Infrastructure Governance: IMF Updates PIMA Framework " »

June 04, 2018

Government at a Glance 2017

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Posted by Santiago González[1]

Since 2009, the OECD has produced a biennial Government at a Glance (G@G) publication which contains a set of public governance indicators covering OECD members and partner countries. The fifth edition of G@G, released in July 2017, provides the latest available evidence on governments’ performance from an international comparative perspective. It includes two new chapters dedicated to public sector innovation and governance risk and features several new composite indicators in recurrent areas such as regulatory governance, human resources management, open government data and performance budgeting.

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