Posted by Davina Jacobs
The IMF’s regional technical assistance center in East Africa () conducted a workshop on fiscal transparency and budget comprehensiveness, at the Bank of Tanzania Conference Center in Zanzibar during October 20-22, 2009. It was attended by 25 participants from seven countries (Ethiopia, Kenya, Malawi, Rwanda, Tanzania, Eritrea, and Zanzibar). The workshop was coordinated by AFRITAC East’s public financial management advisors (based in Dar-es-Salaam) and staff from the IMF’s Fiscal Affairs Department in Washington, DC. The workshop was opened by the Permanent Secretary of the Ministry of Finance of Zanzibar.
The workshop consisted of presentations by the organizers and by the country representatives themselves (highlighting their latest reforms) and by group discussions and exercises. Staff from FAD delivered two presentations: (i) an overview of fiscal transparency and comprehensiveness (including the main objectives and benefits, sources of demand for transparency, and the role of the IMF’s fiscal transparency manual and country assessment (the so-called fiscal ROSC) and (ii) characteristics of transparent and comprehensive budget documentation, and public access. Both presentations were well received and led to lively discussions among the participants. They are attached below.
In summary, the country participants concluded that, although good progress has been made in the region on improving budget transparency overall, some areas of concern remain.
On the budget preparation side, positives mentioned were that information processes in preparing the budget are generally transparent and open. In Tanzania, Rwanda, and Uganda participation of NGOs is quite good.
In quite a few countries, there are problems of aligning the budget calendar with other activities in the budget process, and in some countries the budget calendar is very compressed. On budget documentation, participants were less positive. The budget was seen as too complex, there is a continued emphasis on inputs rather than on outputs, the split between recurrent and capital expenditure planning remains, and fiscal risk and contingent liabilities are inadequately covered in the budget documents. Some countries have now introduced budget digests/guides, which is real progress for transparency.
Parliament is seen as active in the budget process in most countries. Institutional structures, such as parliamentary committees, are generally in place. It was noted that in some countries, such as Rwanda, parliaments are more involved in supervising the Executive than in others. Tanzania and Uganda take somewhat of a middle position, while Kenya has recently set up a Parliamentary Budget Office to improve parliament’s oversight roles. In general, technical capacities of parliamentarians and there support staff need further improvement.
On fiscal reporting there is quite a bit of differentiation between countries. Reporting on budget execution is seen as reasonably adequate and timely, the publication of fiscal reports on government websites on a quarterly basis being the norm. Reporting of program and output performance is still lacking in most countries.
The conference also discussed the extent that transparency had enhanced the credibility of medium-term expenditure frameworks (MTEFs). It was noted that converting from annual to rolling (medium-term) framework remains a problem for most countries. There is an absence of “baseline” versus “new” spending proposals in the budget which makes projecting out years more difficult. MTEFs are not yet fully linked to program based systems, making costing methodologies problematic.
Overall, the workshop was successful, and provided a good opportunity for country participants to exchange their experiences in designing public financial management reform plans. AFRITAC East plans to have another workshop focusing on integrated financial management information systems (IFMIS) in March 2010.
