Financial governance consultant Elias Ngalande has warned that the review of the Public Finance Management (PFM) Act could be in vain if it does not accompany related reforms to change systems, mindset and capacity building.
His warning follows the review of the Act of 2003 to ensure that it is watertight to curb abuse of taxpayers’ money.
Ngalande, a former Reserve Bank of Malawi governor, said this last week in his presentation at a Public Finance Management Research Dissemination Symposium in Lilongwe organised by a consortium of Oxfam in Malawi in collaboration with Lilongwe University of Agriculture and Natural Resources and Economics Association of Malawi (Ecama).
He said one of the challenges facing PFM is lack of credibility and capacity for those entrusted with public resources as such a watertight law without people with integrity will be in vain.
Ngalande said: “You can tell me that Ifmis [Integrated Management Information System] has now been sanitised and so on, but let me tell you that you can sanitise it as you want, but the brains behind it if they are corrupt, you don’t have the Ifmis.
“This brings me to a conclusion that PFM Act will only work when in Malawi we have people with integrity that are honest enough and can say I cannot do corruption because it is not in the best of public interest.”
He said most of the times reforms do not work because people do not have a candid discussion to interrogate the budget in a manner that tears it apart without appearing to be tearing somebody down.
Ministry of Finance Principal Secretary for administration Heatherwick Njati said it has become increasingly clear that a good PFM system is important for the effectiveness of the State.
He said: “A good PFM system supports good governance and transparency and it is also crucial for the government to effectively deliver services on which human and economic development depends.
“Therefore, government is continuously working on PFM reforms to ensure that the country’s PFM system is transparent, accountable, efficient and effective so that there is an improved use and management of public resources.”
Njati said government is committed to enhancing transparency and accountability in the collection and use of public resources.
Oxfam Malawi country director Lingalireni Mihowa said PFM is key to the implementation of the Malawi 2063, the country’s long-term development blueprint.
She said managing public money effectively in Malawi can help all areas of government activities, including effective resource allocation, decision and policymaking, the fight against fraud and corruption, better services and outcomes to improve the lives and well-being of people.
Ecama executive director Frank Chikuta said their contribution to the PFM Act review as a consortium falls under a project Enhanced Evidence-based Research to Inform Policy Decision Making in PFM being implemented with support from the Delegation of the European Union to Malawi. The current PFM Act was passed in 2003 and was amended in 2006, 2010 and 2018.