GOVT OUTLINES PUBLIC SECTOR REFORM HURDLES
The Ministry of Finance’s Public Finance and Economic Management (PFEM) unit is financially constrained to undertake reforms in the public sector to improve or change the entire public finance management system.
The reforms aim to achieve fiscal discipline, efficient allocation of public resources towards the country’s national strategies and priorities, and ensuring value for money for effective public service delivery.
The reform programme, largely being financed by the Multi Donor Trust Fund (MDTF), is on the premise that a sound public finance management (PFM) system is a necessary, though not sufficient requirement for economic development, but impacts on economic stability, market functioning, transparency and accountability by curbing opportunities for corruption.
PFEM unit director Twaibu Ali said they require about $18.5 million (K7.8 billion, at the current exchange rate) to implement all the 10 components of the reform programme, but only have $8 million (K3.3 billion) which will enable the unit to only focus on four components.
The nice components, he said, cover issues to do with planning and policy analysis, resource mobilisation, budgeting, procurement, accounting and financial management, cash and debt management, parastatal financing, monitoring and reporting, external audit and programme management.
“There are resource constraints as the PFEM reforms don’t achieve quick wins so funding gaps are usual. It also takes time to see results and enjoy the benefits [of the reforms],” said Ali on Saturday in Mangochi during a training workshop for journalists on public finance management.
The public sector is the largest provider of business to the private sector and small-scale business; hence, effective and efficient delivery of service is critical.
He noted that the PFM systems is complicated and requires advanced coordination skills and that there is lack of commitment to embrace PFM reforms, particularly through resistance to end corruption.
“There is advancement of personal gains at the expense of national gains substantiated by fraudulent activities,” said Ali.
The genesis of the PFEM reform dates back to 2001 when the Country Financial Accountability Assessment (CFAA) was undertaken by the World Bank to identify accountability risks in Malawi and the recommendation of the assessment formed the basis for the development of the Malawi Financial Accountability Action Plan (MFAAP) in 2003.
The reforms went on up until 2009 when the Ministry of Finance functional review established the PFEM Unit to be coordinating, facilitating and monitoring the implementation of PFEM reforms and the facilitated the development of a comprehensive reform programme which covers all the key PFEM issues.
Ali said the PFEM reform programmes has been a success, resulting in the enactment the Public Finance Management Act, Public Audit Act and Public Procurement Act.
It also resulted in the procurement of hardware and software for managing public finances such as the Integrated Financial Management Information System (Ifmis) and the Human Resource Management Information System (HRMIS).
But he said for the reforms to be effective, there is need for political will, government leading the process, institutional structures for coordinating reform implementation have to be in place and the public has to be properly updated on PFEM issues.
