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Launch of PFM Capabilities Assessment Report - Key takeaways

7 October 2021
Feature Image Pfm Capa

On the 4th of August, CABRI launched the PFM Capabilities Assessment (PFMCA) reports – in Central African Republic (CAR), Nigeria and Ethiopia. This work was a culmination of extensive in-country research initiated in 2019, aiming to create a collaborative platform where ministries of finance, budget and planning get an opportunity to probe the capabilities in their PFM system that are key to improve fiscal performance.

While there are overlaps with other commonly used assessment frameworks such as the Public Expenditure and Financial Accountability (PEFA) assessment, the CABRI PFMCA is unique in that it focuses on a specific PFM priority identified by country officials, using a capabilities lens to examine performance. It combines assessment of organizational and system-level performance with in-depth analysis of personnel capabilities – a dimension of PFM performance and reform that is often neglected. This allows the PFM assessments to be more targeted and less prone to assessment fatigue as the process is largely driven by the priorities of country officials.

These have been closely tied to our Building Public Finance Capabilities (BPFC) programme: an action-learning programme where CABRI supports teams of officials to tackle complex public finance problems. The PFMCA provides the teams with further tools to assess capability gaps in key PFM dimensions to support functional PFM reforms.

The launch event focused on three capability assessments:

  • The first pilot assessment in CAR, focused on the challenges of budget credibility the country had been facing for several years, particularly in the context of a post-conflict and fragile environment. The assessment highlighted that public finance institutions in the CAR are constrained by low personnel motivation and high levels of skills mismatch, particularly in the planning and statistics functions, in addition to systemic and organisational capability gaps. Further, mentoring opportunities for newly recruited officials are limited and institutions rely heavily on technical assistance and external consultants to bridge the skills gap in PFM functions.
  • The second assessment in Benin, focused on capabilities for fiscal decentralization and intergovernmental fiscal relations, through fieldwork in 17 municipalities. The main findings of the review point to weaknesses in delivery capabilities at the local level that may have been caused by a combination of personnel problems and coordination failures within the intergovernmental fiscal relations system. However, the central government plays a critical role in bridging those capacity gaps, which was made difficult given the disparities in analytical and regulatory capabilities at the municipality level.
  • The third assessment was conducted in Ethiopia and focused on planning and monitoring and evaluation capabilities, in the context of ongoing reforms such as the roll out of programmed-based budgeting at the subnational level. The assessment highlighted that capital project planning in MDAs is largely subject to the ability of government to account for macroeconomic factors (inflation and foreign currency supply) in the planning processes. On the monitoring front, one of the biggest handicaps appears to be the inability of MDAs to develop reliable performance and collecting data consistently to manage performance. Overall, high turnover and skills mismatch undermine personnel capabilities, particularly for for skill-intensive functions.

Discussants from the three countries were invited to provide inputs to the presentations. The discussants elaborated further on the ongoing reforms to tackle the various capability gaps and highlighted the importance of sharing the lessons from these assessments, particularly as their regional neighbors embark on similar PFM reforms.

The event provided an opportunity to showcase the add-value of these assessments but also for CABRI to gather feedback on the PFMCA and adapt the assessment frameworks to include the lessons from the first pilot countries. You can find all the material from the PFMCA on a dedicated section of our PFM Knowledge Hub.

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