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June 08, 2011

Developing Program Budgeting AND Getting the Basics Right: Lessons from Mali

Posted by Guilhem Blondy  

Program budgeting is considered an important tool for developing countries to target more efficiently their resources towards the achievement of their development goals. However, limited public financial management (PFM) capacities are usually described as a strong constraint for the development of program budgeting in low-income countries. According to Allen (2009), the development of performance budgeting systems has resulted in many developing countries in “the accumulation by the finance ministry of vast databases of unused information”. The Fiscal Affairs Department (FAD) of the IMF has advocated for a long time a prudent approach, giving priority to basic requirements of PFM, like a realistic annual budget presented according a sound economic classification, effective budget execution controls, reliable fiscal reports, and strong cash management. The case of Mali tends to confirm the importance of “the basics first” (Schick, 1998) in the successful implementation of PFM reforms.

Since 1997, Mali, one of the poorest countries in the world, presents results-oriented programs alongside the central government input-oriented budget. However, a seminar organized in Bamako by FAD in 2009 noted that several weaknesses had undermined the effects of the reform: (1) budget preparation, allocation, execution and reporting continued to be on a line item budget basis; (2) the structure of programs was largely copied from the administrative organization, and the program directors were neither accountable for the achievement of program objectives nor sufficiently involved in their preparation; (3) program data was occasionally not fully consistent with line item data and are generally not well integrated with the line ministries’ medium-term strategic planning; (4) performance indicators were not always relevant; (5) program performance information was barely used in budget decisions; and (6) other key areas of the PFM system (e.g., public accounting and cash management) needed to be strengthened, as was noted by a 2006 PEFA report.

To help benefit more fully from the advantages of program budgeting, four successive missions FAD have provided guidance to the authorities in Mali since 2008. They strongly advised the government to improve PFM basics, such as fiscal reporting and cash management. A comprehensive technical assistance (TA) program was developed with the authorities, in coordination with the IMF’s regional technical assistance center in West Africa, AFRITAC-West, and other donors. The program included:

  • The assignment of a long-term expert financed by Belgium to assist the Treasury in the development and roll-out of a new accounting information system, AICE (application intégrée de comptabilité de l’Etat);
  • Short-term visits by FAD experts financed by Japan to prepare the consolidation of government liquidity in a Treasury Single Account;
  • Short-term expert visits to review the structure of the programs of the various ministries, undertaken in coordination with AFRITAC-West and UNDP.

The outcomes of these activities have really been quite positive so far:

  • The new accounting information system (AICE) effectively started in the capital city, Bamako, in January 2011, and is currently being rolled out in the rest of the country;
  • Mali will organize its first pre-budget orientation debate in Parliament this year to discuss the strategic direction and fiscal parameters of the budget. It has also improved significantly the presentation of its budget documents.

Overall the reforms will help improve the strategic allocation of government resources, but also the effectiveness of budget implementation. Mali scored 35 out of a 100 in the 2010 Open Budget Survey. It now ranks first in the West-African Economic and Monetary Union (WAEMU), and even above a significant number of middle-income countries. A new PEFA report in 2010 noted progress made by the country, not only for the indicators assessing budget credibility and policy-based budgeting, but also for those rating predictability and control in budget execution.

Mali offers therefore an interesting example of a low-income country whose advanced reforms started at an early stage finally made good progress, but only when the country implemented more basic PFM instruments.

Allen, R., 2009, The Challenge of Reforming Budgetary Institutions in Developing Countries, Washington, D.C, IMF Working Paper 09/96.

Schick, A., 1998, A Contemporary Approach to Public Expenditure Management, Washington, D.C, World Bank

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.


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Will this very interesting piece also appear in French? I'm working in DRC and the Malian experience is "spot on"... i'd also be very grateful for examples of reviewed programme structures, especially in education sector.

Thanks in advance

Catherine Dom
Overseas Development Institute
Budget Strengthening Initiative
(BSI is working in Liberia, South Sudan and DRC, Marcus Manuel is the Director)

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