March 18, 2019

A Look Behind the Curtain: Coverage and Use of an FMIS

Fwlloz
Posted by Moritz Piatti- Fünfkirchen[1]

At their core, FMIS systems enable the efficient processing of financial transactions and embed a set of controls to ensure that the budget is implemented as planned and effectively controlled. They also support the implementation of fiscal rules and provides the basis for holding the executive accountable for its budgetary and fiscal decisions. Yet, effective utilization of FMIS systems is rarely assessed. This leaves important questions such as ‘can we trust FMIS expenditure reporting?’ and ‘how effective is the FMIS system in controlling expenditures?’ unanswered.

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March 11, 2019

Understanding Revenue Administration

R2
Posted by Elizabeth Gavin[1]

The IMF has recently published an analysis of aggregated data collected in the first International Survey on Revenue Administration (ISORA) from 135 tax administrations worldwide. This is the largest survey of tax administration to date. The IMF works with partners -  CIAT, IOTA, and the OECD - to collect data through an on-line tool that participating countries use to report data.

ISORA accommodates the largest and smallest tax administrations in the world, to facilitate reasonable cross-country comparisons. These 135 tax administrations collectively represent economies making up 92 percent of world GDP, engage with more than a tenth of the world’s population as personal income tax payers, have an operating budget of over US $100 billion and conduct 50 million audits in a year.

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March 07, 2019

PFM for the SDGs

Sdg
Posted by Vitor Gaspar, David Amaglobeli, Mercedes Garcia-Escribano, Delphine Prady and Mauricio Soto[1]

A recent IMF study finds that delivering on the Sustainable Development Goals (SDGs) requires substantial spending in most countries. The study focuses on health, education and physical capital (roads, electricity, water and sanitation). These are priority investments in people and infrastructure. Low-income developing countries (LIDCs) will need to increase annual additional spending by US$0.5 trillion, by 2030. The annual additional spending being required in emerging market economies (EMEs) adds up to US$2.1 trillion. Relative to the size of their economies, the financing challenge is much larger for LIDCs. For these countries, additional spending is about 15 percent of GDP. In contrast, for EMEs, additional spending corresponds to comparatively modest 4 percent of GDP.

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March 04, 2019

Digital Government in Developing Countries

Diggov
Posted by David Fellows and Glyn Evans[1]

With the aid of development partners, developing countries are making commitments to maximise the use of digital technology. The ICT industry is right behind them. In these reforms, digital technology is being represented as the principal transformative medium of government. But to think of “Digital Government” as necessarily transformative, almost an end in itself, is misguided. Governments should be primarily concerned to provide their services and engage with electorates in the most cost-effective way. Digital technology may or may not have a role in that process.

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March 01, 2019

PFM Reforms Improve Fiscal Performance in Brazil

Brazil
Posted by Felipe Bardella[1]

Brazil released its 2018 fiscal outturn on January 31st. The federal government’s primary fiscal deficit declined to 1.6 percent of GDP, representing the second annual drop since the peak of 2.5 percent recorded in 2016. The overall deficit has also steadily declined in the last three years, from 8.6 percent of GDP in 2015 to 6.2 percent in 2018.

Although the overall fiscal position is still challenging, these positive recent outcomes reflect important PFM reforms undertaken in the country. Taking advantage of continuous technical support from the IMF[2], Brazil has introduced several new initiatives.

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February 25, 2019

Building Bridges: Borrowing for Public Investment

Bridge
Posted by Taz Chaponda[1]

Building megaprojects often requires such a vast capital investment that the country may have to borrow from development finance institutions, export credit agencies or other sources. For large countries like China and the USA, there are likely to be adequate sources of domestic financing. But for low-income and emerging market economies, foreign sources of financing will be required. If so, should countries incur further debt for new infrastructure? And how should they weigh up competing calls to finance it. Cheap loans from large Chinese banks have so far attracted many countries.

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February 22, 2019

Assessing and Managing Sovereign Guarantees in South Africa

Nuclea
Posted by Fritz Bachmair, Cigdem Aslan, and Mkhulu Maseko[1]

Recent experience has shown that the realization of contingent liabilities can have significant fiscal costs (The Fiscal Costs of Contingent Liabilities: A New Dataset). It is, therefore, essential for governments to understand and monitor contingent liabilities, including from  guarantees, to guard against risks and manage their potential impact.

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February 19, 2019

Updated Fiscal Transparency Code Integrating Resource Revenue Issues

Fte2
Posted by Alpa Shah, Sailendra Pattanayak and Thomas Baunsgaard[1]

The IMF has recently published an updated Fiscal Transparency Code (FTC) that includes a new fourth pillar (Pillar IV) covering specific transparency issues related to natural resource revenue management. The FTC is the most widely recognized international standard for disclosure of information about public finances, and forms part of IMF efforts to strengthen the institutional framework for fiscal governance, support policymaking, and improve fiscal accountability among its member countries. In this context, the FTC also forms the basis for IMF Fiscal Transparency Evaluations (FTEs).

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February 14, 2019

PFM Reforms in the East African Community

Eac
Posted by Fazeer Rahim, Amitabh Tripathi and Paul Seeds[1]

The regional integration process in the East African Community (EAC)[2] has provided an opportunity for furthering PFM reforms amongst the partner states. The East African Monetary Union (EAMU) Protocol signed in November 2013 requires the partner states to harmonize their PFM laws and practices. It also requires the development of a regional surveillance framework to oversee macro-fiscal convergence ahead of the proposed monetary union in 2024. The EAC Secretariat plays a coordinating role to ensure that the key PFM directives are implemented and the monetary and financial cooperation requirements in the protocol are complied with.

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February 11, 2019

Better Fiscal Reporting in East and Southern Africa

Afs blog
Posted by Jean-Luc Helis, Robert Clifton, Paul Seeds, and Amitabh Tripathi[1]

 Strengthening fiscal reporting is a priority reform in the countries covered by IMF’s AFRITAC South (AFS) and East AFRITAC (AFE). Improvements in this area have benefitted from other PFM reforms including the modernization of legal frameworks, enhancements of FMISs, improved fiscal transparency, and adoption of International Public Sector Accounting Standards (IPSAS). Progress, however, has been slow and uneven across the region. While Tanzania, South Africa, Seychelles, and Mauritius have achieved notable improvements, a lot more needs to be done in other countries.

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