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Moving towards performance-based budgeting in Africa: opportunity or curse?

24 June 2012
Images Blog Moving Towards Performance Based Budgeting In Africa Opportunity Or Curse

The Collaborative Africa Budget Reform Initiative (CABRI) held its 8th Annual Seminar in Pretoria, South Africa on 9-11 May, 2012. Senior budget officials from 28 African countries and CABRI’s partners attended a highly interactive event structured around panel discussions, peer learning working groups and roundtable discussions. The theme of the seminar was: Budgeting for results: moving towards performance-based budgeting (PBB).

The theme of the seminar took into consideration that many African countries are progressively moving away from line-item budgeting towards a system that is more focused on outcomes and places emphasis on results. At the same time, the shift towards this new budgeting framework has not been a source of debate. Critics have stressed the importance of a prudent approach and placed emphasis on “getting the basics right” for instance, producing credible annual budgets, exercising effective budget execution controls and adhering to sound cash management practices – practices that many African countries struggle to achieve1. Critics also perceive programme-based budgeting (PBB) as externally imposed and a form of conditionality for funding from international financial institutions.

Some have even called it a passing “fad”. The seminar acknowledged that moving to programme and especially performance-based budgeting is a lengthy and complex process. As one expert panellist noted, “PBB is a relatively simple concept but incredibly difficult to implement”. The fact that European countries are still “experimenting” with PBB is revealing of the daunting process involved.

Despite these challenges, it is telling that the delegates at the Annual Seminar viewed PBB as instrumental in improving service delivery, achieving greater efficiency and could be a useful tool for meeting national development goals. Some delegates referred to it as “a vehicle to poverty reduction”. For example, Rwanda attributed the 12 percent reduction in poverty levels to the introduction of PBB and a strict enforcement of performance contracts among public servants. Experience from the WAEMU Directives has also shown improvements in budget transparency and an introduction to multi-year budgeting, among other PFM reforms.

There was a general feeling among the participants that PBB is important for the efficient, transparent and accountable management of public resources. However, there needs to be political will as well as technical capacity. Much of the success in Mauritius, South Africa and Rwanda is attributed to high level champions of the reform (Ministers and Prime Ministers) and administrative capacity and commitment. For instance, an environment of hyper-inflation such as in Zimbabwe, may not be conducive for PBB reform.

Inclusiveness and broad-based participation are also critical – this requires a dialogue with citizens and a meaningful engagement of the legislature, civil society and line ministries. Another key message that came across is that PBB reforms need to extend beyond the Ministry of Finance – capacity is equally required (if not more required) in the line ministries and also in parliament and among the civil society.

The seminar also discussed the variations in programme-based budgets across the continent and globally. In some countries, the budgets are activity-based; some are output-based and others are framed around objectives. Differences are also noticeable between Anglophone and Francophone countries. The seminar discussed the advantages and disadvantages of the various models, while using actual programme budgets from Mauritius, Mali and South Africa as case-studies. There was a sense that a trade-off needed to be drawn between the complexity and the detail included in the document and the accessibility of the document. Another point of discussion was the importance of linking financial and non-financial data in the document.

Senior budget officials further discussed the organisation and change management implications of PBB reform, particularly, how to manage change, what approaches are available to changing the behaviour of key actors and how to motivate politicians, budget officials and line managers to use performance information. Issues on sequencing and incorporation of performance measures were also discussed.

A full set of the seminar’s documentation is available on our website.

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