The current geopolitical landscape presents African governments with increasing economic and social development challenges, driven by inflationary pressures, climate change, health crises, and significant political shifts, amongst others. In this context, it is crucial for governments to take greater ownership of their reform agendas, reduce reliance on unpredictable forms of assistance and adopt more flexible and agile public financial management (PFM) processes that can respond to these complex challenges.
However, public institutions often prioritise certainty, conformity, and established rules within public sector processes. These rules facilitate the efficient repetition of tasks and help ensure fairness in critical public finance and policy functions. However, they can also hinder innovation and the adoption of experimental approaches in complex environments. Mr Bah’s statement highlights the inherent tension between the need for stability and accountability in public sector practices and the necessity for flexibility and adaptability in an ever-evolving world. Recognizing this dynamic is crucial for fostering an environment that encourages innovation while maintaining the core values of public service.
This echoed the takeaways that country-teams from Côte d'Ivoire, Guinea, Kenya and Mauritius shared during the Progress Review Workshop (PRW) of the Building Public Finance Capabilities (BPFC) 2024/25 programme. The PRW, represents the culmination of an action-learning journey over 12 months that sees teams build local coalitions and capabilities as they tackle locally identified public finance problems, applying the problem driven iterative adaption (PDIA) approach. The workshop provided an opportunity for teams to share the progress achieved in tackling these problems and also their reflections on applying a locally-led, problem-driven and adaptive approach to reform in ways that take into account their complex local environments. The table below provides some of the main achievements by the teams during the programme.
Whilst the formal programme has come to a conclusion, the teams will now continue driving these locally-led initiatives and disseminate the approach to broader departments and agencies.
Côte d'Ivoire
"Weaknesses in tax revenue mobilisation issue and increasing debt servicing could reduce the fiscal space to fund much needed investments" |
- The team identified the need to improve oversight over compliance of companies that have previously benefited from tax exemptions/expenditures as a key driver of low revenue mobilisation. The team proposed a classification feature in the national tax system to distinguish between legal and conventional exemptions to better understand and distinguish between various compliance obligations by those companies - this was done in consultation with the tax administration.
- Recognised gaps in capacity around managing and monitoring tax exemptions and began co-designing targeted training and monitoring mechanisms in collaboration with tax officials.
- Finally, within debt management practices, the team identified the limited use of an existing government fund to undertake feasibility studies for projects financed through public debt and began promoting it to potentially uncover alternative sources of funding for specific projects.
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Guinea
"The level of internal payment of arrears to suppliers for the 2024 financial year is twice the amount of investment expenditure of the departments of Health, Education, Environment and the Advancement of Women and Children" |
- The team identified one of the biggest challenges for non-payment of arrears relates to MDA not budgeting for these items in the annual budget – out of fear that this will impact allocations to new or ongoing programmes. This is further compounded by the lack of engagement between the Ministry of Budget and Finance and Planning with sector ministries during the budget formulation stage – relying almost entirely on a top down approach to budgeting. In March 2025, budget conferences were held for the first time in many years, during which the team conducted a session to highlight the severity of the issue and illustrate how a lack of budgeting for payment arrears negatively impacts allocation decisions and MDA implementation during the year.
- The team aims to continue supporting the line ministries throughout the budget calendar to reduce the accumulation of arrears.
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Kenya
"Inefficient cash management practices leading to unsustainable domestic debt service costs” |
- The team identified the need for strengthened internal communications within the National Treasury and the MDAs, i.e., the key departments/units involved in cash management to improve coordination between departments handling work plans, cash flow plans, and procurement plans – developed a recommendation for a circular to guide cashflow plans, procurement plans and workplans revisions with revisions in the budget.
- Through engagements with the cash management unit, the team sensitised the cash management committee to more actively monitor cash management disbursements and review of debt and other cash plans and budgets on a regular basis.
- Identified inefficiencies stemming from SOE revising their budgets to use the surplus to invest in government bonds (and therefore remitting less of their revenue to the central fund). The team issued a circular directing that no state corporation should reallocate capital expenditure towards operating surplus without a written approval from National Treasury. They also put forward a proposal to consider SOE intra year remittances, on a case-by-case basis.
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Mauritius
"Under-expenditure and low Implementation rate of capital projects with half of major capital projects delayed” |
- To address the lack of corrective measures being taken during monitoring of the expenditure and increase budget transparency and accountability, the team consulted with the Public Sector Investment Programme team to publish the financial performance of capital projects on a quarterly basis as from FY 2025-2026, focusing initially on large ministries having major capital projects. This is expected to engage the accounting officers to take proactive actions do address issues at the level of their ministries.
- Proposed to involve broader participation from the Public Sector Investment Programme (PSIP) Unit, engineers of Public Investment Management Unit (PIMU), Sector Ministry Support Teams (SMSTs) and the Central Team in the forthcoming budget for the estimates committees held during the budget preparation, to ensure more realistic budget allocations based on project readiness, maturity and monitoring data to reduce overprovisioning for projects not yet ready for implementation.
- The team has fostered a more collaborative approach to problem solving, strengthening relationships and improving communication and integration within the Ministry of Finance, Economic Development and Planning and across units working with capital projects including with the PSIP, PIMU & Project Contract and Administration Agency (PMCA). Following discussions with the PMCA, the PMCA team plans to adopt a similar approach as PDIA in their unit setup and operations.
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