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January 18, 2010

Workshop on Budget Reform and Achievement of MDGs in West and Central Africa

Posted by Jean-Baptiste Gros, Coordinator, The Pole - Development Strategies and Public Finance, United Nations Development Programme’s Regional Center Dakar.

A regional workshop on Budget Reform and Achievement of Millennium Development Goals in West and Central Africa took place from November 18-20, 2009 in Dakar, organized by the Pole - Development Strategies & Public Finance (UNDP Regional Center Dakar – RCD).

The seminar gathered officials from West and Central Africa, as well as Economists from UNDP country offices in the region. Twelve countries from the region were represented at the workshop, including the 8 member states of the West African Economic and Monetary Union (WAEMU).[1]  Several donor representatives took part in this event as well. Experts on budgetary issues, with political and public administration backgrounds, shared their views and experiences regarding the tools to link development policies and national budget.

This seminar took place within a particular context: given the adoption by WAEMU of new public financial management (PFM) directives in June 2009, new budgeting tools such as Mid-Term Expenditure Framework (MTEF), Program-Budgets (PBs), Results-Based Management and Performance Measurement are on everyone's lips.

The opportunities and challenges presented by these budgetary reforms, as well as the problems related to their implementation and the implications for national administrations and for donor support, including specific UNDP support, were also discussed and analyzed. The main issues presented in the seminar were the following:

• The budgetary reform in WAEMU area, including the most important changes introduced by the 2009 directives, meant to address the shortcomings of the previous directives (1997-1998). These changes are: (i) formalizing the principle of sincerity in budgetary forecasts; (ii) new multiyear budgetary and economic programming documents; (iii) program-budgets (Results-based Budgeting); (iv) Delegation of principal authority over issuance of payment orders; (v) strengthening the role and powers of Parliament to monitor budget execution; (vi) extending the role of Supreme Audit Institution to monitoring and control of budget execution; (vii) use of three classifications for budget expenditure (economic, administrative and functional); (viii) use of accruals-based accounting rule for government revenue and expenditure.[2]

• The experiences in West and Central Africa with these new budget programming tools. These tools, particularly MTEF and PB, have developed quickly in Africa since the mid-90s but have met with important obstacles, including instable economic and budgetary environment, unpredictability of external funding, lack of coherence of MTEF with macroeconomic frameworks, non-alignment with national processes, weak national capacities, etc. However, it was stressed that the Results-Based PFM reform has just started and its fruits are yet to be reaped. For WAEMU countries in particular, the new directives offer a good framework to make effective this reform.

• The articulation of budgetary reform with strategic documents, including the experiences with Priority Action Plans, costing of MDGs or the problems of aligning sector strategies with MDGs.

• Evaluation of public policy and performance measurement, which are one of the areas of public financial management where progress has been quite limited, in spite of new tools such as the Yearly Performance Reports and positive experiences such as Morocco’s, presented by a representative of that country. In particular, the weakness of Poverty Reduction Strategies’ (PRS) Monitoring and Evaluation systems was pointed out as quite widespread in the region.

• Finally, the importance of the June 2009 WAEMU directives, which sets up the new Harmonized Framework of Public Financial Management. The adoption of these directives is for WAEMU Member states a major milestone in the modernization of Public Financial Management. Two main lessons are to be drawn from the experience with the previous 1997-1998 directives: (i) a 10-year period was not enough to implement them in all member states and it is recommended to use a gradual approach; (ii) a support program, absent in 1997-1998, is necessary to accompany the implementation of the new directives. The program to support the Reform of the Harmonized Framework of PFM, prepared by the WAEMU Commission and supported by donors (UNDP, World Bank, West AFRITAC) was presented. It includes 6 main elements: (i) communication and dissemination of the new Directives; (ii) training at general at technical levels; (iii) incorporation of Directives into national law; (iv) monitoring the incorporation of Directives into national law; (v) adapting and strengthening information systems; (vi) application of reforms.

Beyond the exchange of experiences and good practices, this workshop allowed participants to better understand the scope of the new WAEMU Directives and analyze the opportunities and challenges they represent, with a view to strengthening links between strategy documents, achievement of MDGs and annual budgets. Thus, the workshop paved the way for the articulation of ongoing initiatives in WAEMU countries with the upcoming reforms enshrined in the new Directives.

All the documents prepared for the workshop, including the presentations, are available on the following website: http://pnud1.web.officelive.com/default.aspx

[1] Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, and Togo.

[2] For more details on the June 2009 WAEMU PFM directives, read the September 25, 2009 PFM blog post of Bacari Koné.

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