Timing is Everything: Why Delays in Budget Approval are Undermining Fiscal Policy in Africa…And What Can Be Done About It
Posted by Camille Karamaga
A number of serious public financial management (PFM) problems in Africa can be traced back to a single, simple issue – late submission to and approval of the budget by the legislature. Limited legislative scrutiny of fiscal and budgetary policies undermines transparency and accountability in resource allocation and utilization which form the cornerstone of a good PFM system. Failure to provide the legislature with adequate time to scrutinize the budget reduces their ability to undertake critical analysis of fiscal policies and service delivery objectives. Late approval of the budget also prevents government entities from initiating procurement processes at the start of the financial year based on the approved budget, especially where special warrants or pro forma rules rather than systematic cash plans prepared by spending agencies are used to release funds.
The need to provide adequate time for parliament to scrutinize the budget and for line ministries to plan for the year ahead is recognized in both international standards and national laws. International experience recommends that the annual budget estimates be tabled in the legislature at least three months before the beginning of the new financial year in order to allow meaningful scrutiny. Guidelines on good practice in this area are provided in documents such as the IMF’s Code of Fiscal Transparency, the OECD’s Guidelines on Transparency, and the PEFA Performance Measurement Framework.