June 21, 2022

The Other Hidden Debt - How power contract transparency can help prevent future debt risk

June 21




Posted by Todd Moss and Rushaiya Ibrahim-Tanko[1]

Soon after the reformist businessman Hakainde Hichilema won Zambia's presidency in August 2021, he learned that his country’s finances were far worse than he feared. Though Zambia had once been highly indebted, it had received a fresh start from comprehensive debt relief in 2005. Now, sixteen years later, Hichilema discovered the treasury was “literally empty” and an urgent audit found a total of more than $16 billion in external debt, including billions in underreported obligations. Attention from both the media and Zambia’s creditors has largely focused on the more than $6 billion owed to Chinese lenders, about double the amount reported by the previous government. But there’s another source of concern beyond opaque loans or deceptive bookkeeping: undisclosed electricity contracts. Buried in the new accounting of Zambia’s debt is more than $1 billion in unpaid arrears owed to power companies.

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June 15, 2022

How Budgeting Systems can Prepare Better for National Emergencies - Six Lessons from the COVID-19 Crisis

June 15



Posted by Richard Allen[1]

A recently published paper in the OECD Journal on Budgeting (https://doi.org/10.1787/bdfca328-en) discusses how budgeting systems can be better prepared for national (and global) emergencies such as COVID-19, with special reference to the health sector.[2] What spending modalities and flexibilities were introduced during the pandemic to provide emergency funding for health services? What are the emerging lessons? Which of these mechanisms should be sustained or refined in the future to enhance preparedness and responsiveness in health spending or other areas of budgeting?

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June 13, 2022

Unexpected Help in Fiscal Distress

June 13



Posted by Ian Ball, John Crompton, and Dag Detter[1]

Many governments are facing fiscal distress and in the more extreme cases a crisis requiring debt restructuring. Their situation is similar to that of a ship out of fuel and adrift on the high seas. Even if it is lucky enough to be offered a rescue, it will not help just to get the ship refuelled if the holes in the hull and fuel tank are not also repaired.

It is not uncommon for companies and individuals to have difficulty meeting their payments.  If the difficulties are serious enough to pose a high risk of default, it may be possible to negotiate with creditors to reduce the debt servicing burden and avoid default. A company or individual in these circumstances is, however, first expected to account for all their assets as a quid pro quo for accessing debt relief. A corporate restructuring would also involve not only optimizing the capital structure and questioning the entire structure of the business, but also a review of operational efficiency, to stop the leakage and improve the cash flow. A key component of this review process would be determining whether better value could be extracted from the firm’s assets.

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June 06, 2022

How Digital Technology will Transform Public Financial Management


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Posted by Khaled Eltokhy[1]


The additional investment needed through 2030 to reach the SDGs for roads, electricity, water, and sanitation has been estimated at 2.7 percent of GDP per year (for emerging markets) and 9.8 percent of GDP per year (for low-income countries). These huge demands present both challenges and opportunities for government policymakers, finance officials, and PFM practitioners. On the one hand, there is a need to ensure that adequate resources are available to finance infrastructure development. On the other hand, there is an opportunity to use data and new technology to improve the efficiency and quality of infrastructure projects, as well as many other areas of PFM.

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June 02, 2022

Expenditure Baselines: A Powerful Tool for Budget Practitioners

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Posted by Fazeer Rahim and Claude Wendling[1]


Budget practitioners do not always see eye to eye. But they nevertheless can agree on several things. Here are some of them: the budget is the prime instrument for implementing fiscal policy; it is always good to keep a medium term and strategic perspective to budgeting (as opposed to day-to-day, incremental budgeting); incentives for ministries of finance and line ministries should be aligned as much as possible; and knowing more about future trends is always better than knowing less.

Projecting expenditure baselines over the medium-term is a key analytical exercise in budget preparation that can support many of these objectives.  A recent How-To-Note published by the Fiscal Affairs Department (FAD) provides specific guidance on calculating and using baselines. The tool is found in many budget systems even if it is known under different names: spending baselines of course, but also forward estimates, no policy change estimates, or trend scenarios.

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May 31, 2022

Relaunch of IMF’s Popular Public Financial Management Online Course


Posted by Sureni Weerathunga and Fabien Gonguet[1]


With the support of the IMF Institute for Capacity Development (ICD), the Fiscal Affairs Department has relaunched its online course on Public Financial Management (PFMx) on May 1, 2022, it will remain open year-round. In its five previous offerings, this free online course has been taken by more than 8,700 participants from virtually every country, with very high satisfaction rates. Developed with the financial support of USAID and taught by more than 15 experts of the Fiscal Affairs Department, the course is open for government officials and staff of bilateral and multilateral development agencies, but also to civil society organizations, parliamentarians, academics and the general public, which in previous offerings represented almost half of all active participants.

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May 23, 2022

Disclosing Fiscal Information during COVID-19 - Country Experiences

May 23



Posted by Aura Martinez and Juan Pablo Guerrero[1]


COVID-19 has triggered extraordinary fiscal-policy crisis response measures. Throughout the world, established public finance regulations were often by-passed, at the expense of transparency and reporting timeliness. This hampered efforts to track the design and implementation of response measures and analyze policy trade-offs. Evidence indicates that fiscal transparency can enable better intra-agency coordination and informed public participation, improving response efficiency and effectiveness. But such mutually reinforcing conditions have been in short supply during the pandemic.

Building on its Fiscal Data in Emergency Response: Guide for COVID-19, and experiences from the international cooperation community, the GIFT network joined forces with the World Bank and the Europe Foundation to identify fiscal transparency responses that have helped governments move towards a more open, accountable, and inclusive recovery. Some of these good country examples are summarized below.

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May 16, 2022

Fighting Corruption in Sub-Saharan Africa

May 16 baona



Posted by Racheeda Boukezia[1]


In the footsteps of the successful first anti-corruption training course delivered in November 2020, FAD offered a second edition of its “Fighting Corruption in Sub Saharan Africa” course from March 2-28th 2022.

Since 2018 the IMF has placed greater emphasis on governance and corruption issues both in policy dialogue and in financial program design with increased support to member countries to strengthen their capacities. The IMF’s 2019 Fiscal Monitor stressed the importance of building strong fiscal institutions to address corruption. With a myriad of opportunities for funds to leak in the public sector, understanding the vulnerabilities in the fiscal environment is crucial to design proper reforms and reduce the fiscal impact of mismanagement.

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May 09, 2022

Rethinking Public Financial Management

May 9

Posted by Gary Bandy, Mark Johnson, Tia Raappana, and Srinivas Gurazada[1]


What do governments need to be effective in a crisis? Among many other things, they need to be good at risk management, at securing the necessary resources and spending them where they matter the most, as quickly and effectively as possible, whilst balancing many policy priorities and demands. To do all this, a government needs good PFM systems. Often, governments with weak PFM systems will find those weaknesses exposed and magnified during times of crisis or extreme fiscal pressure.

Over the past two decades, the focus of many countries has been to build robust, efficient, and accountable PFM systems. The Global Report on Public Financial Management by the Public Expenditure and Financial Accountability (PEFA) program[2] highlights that whilst PFM systems have seen improvements, significant weaknesses remain. Countries, on average, perform better preparing their budgets than getting them implemented.

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May 02, 2022

Budgetary Practices of the Spanish Regional Governments

May 2


Posted by Jordi Baños, Daniel Montolio and Clara Picanyol[1]

Spain is considered a highly decentralized country, where Regional Governments (called “Autonomous Communities”) manage around 31% of total public sector expenditure (Euro 224 billion in 2021 (19% of GDP)), providing healthcare, education, long-term care, and social services, among other services. The debt levels of Regional Governments have increased, especially after the 2008/09 global financial crisis, reaching 25.9% of GDP in 2021.

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