Building Bridges: Borrowing for Public Investment

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.

Assessing and Managing Sovereign Guarantees in South Africa

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.

Updated Fiscal Transparency Code Integrating Resource Revenue Issues

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).

PFM Reforms in the East African Community

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.

Better Fiscal Reporting in East and Southern Africa

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.

The Politics of Revenue Forecasting

Posted by John Grinyer[1]

Realistic budgeting is vital to good public financial management. Get the numbers wrong and a plethora of problems can emerge - cash shortages, a buildup in arrears, cutbacks on capital investment spending, delays in paying salaries, and so on. Consequently much technical assistance over the years has focused on strengthening forecasting skills, in particular on revenue, which is of crucial importance given that the projected resource envelope is often the starting point for preparing the coming year’s budget.

Integrating PFM and Anti-Corruption Strategies

Posted by Concepcion Verdugo-Yepes[1]

Transparency International (TI) recently published its global Corruption Perceptions Index for 2018. The index, which ranks 180 countries by their “perceived levels of public corruption” (0 is highly corrupt,100 very clean), describes a largely gloomy picture of reality in most of the world’s regions. More than two-thirds of countries score below 50 out of 100. Most countries have seen no progress on corruption in the past seven years. While 20 countries have significantly improved their scores (including Estonia, Senegal, Guyana and Côte D’Ivoire), 16 countries have fallen back, including some advanced countries and emerging markets such as Australia, Chile, Malta, Hungary and Turkey.