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Building Public Finance Capabilities in Africa : A synopsis of areas identified by country-teams, relevance to current or long-festering PFM challenges on the continent

26 June 2023
BPFC A synopsis of areas identified by country teams
(Photo by CABRI)

In April 2023, CABRI officially kicked off the Building Public Finance Capabilities Programme in Africa, with the participation of country teams from Benin, Guinea, Lesotho, and Nigeria.

The BPFC is a 12-month action-learning programme that aims to build capabilities to solve local public finance problems using the Problem Driven Iterative Adaption Approach (PDIA). It takes the view that PFM reforms require a careful understanding of the local context within an adaptive and iterative approach to change. As such, the BPFC puts teams of government practitioners - who have a deep understanding of their local context - at the center of PFM reforms.

After the official launch in April, participants followed a 5-week online course, which provided reflections on institutional reforms over the past 20 years and insights into the PDIA approach for PFM reforms. Following the online course, teams met in South Africa for a 4-day framing workshop where they unpacked the public finance problem locally identified and find viable entry points in which they can action in the upcoming months.

This year, the teams identified salient problems relating to two PFM areas.

  • The first on cash and liquidity management. Effective cash and liquidity management is critical to ensure governments are able to meet their extended debt obligations and spending commitments. The war in Ukraine, rising interest rates, and supply chain disruptions are all weighing on global growth, which resulted in heightened volatility in revenue and expenditure. Building local capabilities to adopt more reactive cash management approaches will therefore be important in dealing with greater complexity in the current macro-fiscal context.
  • The second area is on the challenges in the execution of capital spending. Capital spending is a key means for governments to fulfil social and economic development objectives. Yet, across Africa, countries often experience weak integration of capital spending in the budget and systemically low execution rates. As a result, there are significant delays in the completion of projects, which comes at an increased cost to the fiscus. The capabilities of ministries of finance to execute capital spending effectively and efficiently will be key to achieving sustainable economic growth in the long run.[JB1] [JB2]
  • Solving these highly complex problems will require careful navigation of the political economy constraints and an understanding of the enabling space for reform. Participants will now embark on the action-learning phase with the support of a CABRI coach, where they will further their understanding of these issues by engaging and consulting key stakeholders and gathering different perspectives on the problem. 

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