Systemic Weaknesses of Budget Management in anglophone Africa

Abstract

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. WP/01l211This paper examines the merits of the British budget management system that was inherited in Anglophone African countries and which has changed substantially in the United Kingdom since the 1960s. It considers whether the disappointing budgetary performance in Africa is due to weaknesses in the inherited British system, other external influences, or domestic developments. It finds that all three factors have played a role in the widespread problems with budget management systems. Reforms in institutional arrangements are needed, especially in budget execution. Technical reforms will be ineffective unless there are concomitant changes to enhance accountability, improve governance, and increase compliance.

Government accounting reform in an ex-French African colony: The political economy of neocolonialism

“…Following over a decade of successive civil service reform programmes, particularly within SAPs, downsizing the civil service often reduced its quality in areas such as: capacity-building to improve efficiency and productivity, effective recruitment and promotion procedures, explicit performance standards, and proper application of administrative sanctions (Adamolekun, 1993;Lienert, 1998;Lienert and Modi, 1997). This has weakened service delivery, government institutions and economic performance Associated government accounting reforms across Africa have been disappointing (Andrews, 2010;de Renzio and Dorotinsky, 2007;Leonard, 1987;Lienert and Sarraf, 2001;Wehner and de Renzio, 2013). There is virtually no evidence of improved macroeconomic balance, greater budgetary predictability, more efficient spending; and limited evidence of resource reallocation to priority subsectors (Brumby, 2008 IMF schemes requiring African countries to adopt cash rationing "were not transparent, and arbitrary cuts in expenditure were made to the detriment of efficient resource allocation", and benefits of government accounting reforms "have been overemphasized, especially when the institutional capacity to introduce, let alone sustain, such all-encompassing reforms, has been limited in many of these countries" (ibid, p.9).…”

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The Impact of Budget Reforms on the Quality of Budget Management in Nigeria

“…It is the budget process that is characterised by fiscal discipline and efficiencies in both operational and allocative dimensions (Olomola, 2006, Olomola, 2009). The lack of these basic ingredients of sound budgeting in most African countries, including Nigeria, has justified the description of their budgetary performances as disappointing, and underscores the need for reforms in public financial management in general and budget management in particular (Lienert & Sarraf, 2001). …”

Government Accounting in the Global South: The Design, Implementation and Use of Global Solutions for Local Needs

“…As an IMF working paper noted, 'MTEFs have sometimes been introduced prematurely, in the sense that annual budget outcomes and monitoring mechanisms were still quite primitive, resulting in outer-year scenarios that were inconsistent with actual budget outcomes and/or the macroeconomic framework' (Lienert and Feridoun, 2001).…”