The International Budget Partnership (IBP) released the 2012 results of the Open Budget Index (OBI) in January 2013. The Open Budget Survey measures the state of budget transparency, participation and oversight in countries. The OBI is a list of multi-stakeholder choice questions that are completed through a consultative and verified process. Once completed, a composite score is calculated for each country, with 100 being the highest score possible. The OBI undertakes the survey every two years; the first took place in 2006.

How well did Africa perform?

On average, Sub-Sahara Africa scored 31 on the 2012 OBI, which is below the average score of 43 for all regions. The Middle East and North Africa grouping has an average score of 18. These performances mask varied scores within the continent.

Out of the 30 surveyed African countries (both North Africa & Sub-Saharan Africa):

• 14 countries provided scant or no information to the public in its budget documents during the year (Algeria, Benin, Cameroon, Chad, DRC, Egypt, Equatorial Guinea, Niger, Nigeria, Rwanda, Senegal, Tunisia, Zimbabwe and Zambia) and 5 countries provided minimal information (Angola, Burkina Faso, Morocco, Sao Tome and Principe, Sierra Leone). In other words, over half of the countries surveyed on the continent are in the bottom two categories of the OBI index.
  
  
• 9 African countries provide some information. This group includes Botswana, Ghana, Mozambique, Namibia, Kenya, Liberia, Mali, Malawi and Tanzania.
  
  
• South Africa is in the top performing category, in which countries provide extensive information to the public in its budget documents. Despite South Africa’s score falling by 2 points since 2010, it remains the second highest ranked country in the OBI after New Zealand, and ahead of the UK, France, Sweden and Norway.
  
  
• Uganda follows South Africa as the second best performing country in Africa. With a score of 65, it is in the category of countries that provide significant information, along the likes of Germany, Spain and the US.

Which countries in Africa improved the most?

Encouragingly, on average, the scores from the surveyed countries from Francophone West Africa doubled since 2010 from 8 to 16.

Amongst this group, Burkina Faso is one of the two greatest improvers in Africa over the period. Burkina Faso’s score jumped by 19 points, as it started publishing the pre-budget statement and the in-year reports in a timely way and increased the comprehensiveness of the executive’s budget proposal.

In Mozambique, the score of which jumped by an impressive 18 points, the progress was led by the executive’s budget proposal and the pre-budget statement being published for the first time. As highlighted in the recent CABRI Report “Fiscal Transparency and Participation in Africa: A Status Report” (October 2012), quick gains are possible in many countries, for example by making already produced key budget documents publicly available.

Some worrying trends

Some countries however registered dramatic declines in scores between 2010 and 2012. The scores of Egypt and Zambia fell by 36 and 32 points respectively over the period (see the table below, which plots OBI scores for those countries which have been surveyed since 2006).

This decline in the OBI score is mainly the result of the non-publication of the executive’s budget proposal or the fact that it is available only at a high price. In Egypt’s case, the mid-year review was also not publicly available and in Zambia’s case the year-end report was available but only at a high fee. This demonstrates that transparency gains are not always sustained but can indeed be reversed, due to various factors such as political instability or transparency practices not being enshrined in law.

In several African countries, the transparency score has remained flat or near flat over many years, such as Ghana, Kenya, Nigeria and Cameroon.

Developments with Public Participation

The 2012 survey included a new section on public engagement in the budget process to assess the extent to which the three main institutions surveyed provide spaces for public participation in budget processes. The section includes six principles, including that public engagement should occur throughout the budget process, with all parts of government and should have a legal basis. This part of the survey identified interesting developments for participation in Africa. For instance, the OBI report mentions the Botswana “budget pitso” initiative, a consultation forum system for the public. In Kenya, the constitution stipulates that a parliamentary committee should seek participation from the public.

The report also underlines the fact that countries in which legislatures and SAIs are weak, are also countries where there is little budget transparency and few opportunities for public participation, implying that the overall system of budget governance is deficient. In Africa, Angola, Cameroon, Tunisia, Zimbabwe, Morocco and Equatorial Guinea are characterised by this combination of factors.

The Open Budget Survey 2012 report draws further recommendations on how to improve budget transparency and participation. For more information, please access the website of the International Budget Partnership. CABRI, the IBP and the World Bank Institute will be jointly working with up to four African countries to undertake peer reviews of budget transparency and participation in the next three years. For more information, see the section on Budget Transparency Promotion and click CABRI's blog.  

Emilie Gay

On the 22^nd and 23^rd November 2012, CABRI and the International Budget Partnership (IBP) held a workshop in Ghana on fiscal transparency and participation. The workshop served to launch a three-year programme, which will aim to work with up to four participating CABRI countries to undertake joint reviews of transparency and participation.

The discussion on how to improve fiscal transparency was taken up by participants from Ministries of Finance as well as civil society representatives from Liberia, Kenya, Ghana, Central African Republic, Mali and South Africa. The workshop served to present and discuss the findings of the recent CABRI publication, entitled Fiscal Transparency and Participation in Africa. Guidelines and standards for budget and fiscal transparency and participation were also discussed and timelines and teams for the peer supported country reviews were identified.

The joint review of country transparency programmes will take place in a phased approach. The first two countries will be reviewed in 2013. The Central African Republic, Mali and the Democratic Republic of Congo will participate in the francophone review and South Africa and Liberia will be reviewing the Kenyan participation reforms and transparency systems. The results of the reviews will be discussed and shared within the broader CABRI network.

Where does Africa stand in terms of fiscal transparency?

The report analyses the status and progress made with respect to fiscal transparency and participation in Africa, primarily based on the Open Budget Index (OBI) and Public Expenditure and Financial Accountability (PEFA) scores since 2005. The report found that while on average, African countries are less open about their fiscal activities than their counterparts in other regions of the world (see chart, which plots OBI scores for 2006-2010), there is a wide disparity in country performance within the continent.

Note: EAP: East Asia and Pacific, ECA: Europe and Central Asia, LAC: Latin America and Caribbean, ME: Middle East, SA: South Asia.

Despite the fact that countries in Africa provide no or meagre information, in many cases, information is already available internally, and significant progress can be made relatively quickly by focusing on transparency reforms that produce standard external documents. Some countries, such as Egypt, Uganda and Angola, made significant improvements in transparency over the six years covered by the OBI survey. In many countries, improvements are however often not stable over time.

The report also found that the administrative heritage of a given country is a better predictor of fiscal transparency performance than income group. The status of the country with respect to whether it exports natural resources and its ‘fragile state’ status are also significant factors.

African countries fare poorly in respect of transparency on three types of non-core fiscal data, namely donor funds, extra-budgetary activities and contingent liabilities. Africa trails other regions with regard to the provision of non-financial information, but has made progress over the last six years in the provision and quality of performance information.

Average country performance in Africa has deteriorated with regard to the provision of medium-term estimates and in-year actual expenditure, and improved with regard to the provision of past years’ information and budget year estimates. And while there have been improvements in the usefulness and comprehensiveness of data, on average, the provision of information has been less timely from 2006 to 2010.

Fiscal Participation in Africa

Audit systems in Francophone and Lusophone countries lag behind systems in Anglophone countries. In some countries, audit systems are in fact functioning well but the public does not have access to audit reports.

African countries assessed in all three rounds of the PEFA have made progress in terms of legislature engagement strength between 2006 and 2010. Anglophone countries appear to have more effective legislative budgetary institutions.

Between 2006 and 2010, while Anglophone countries have made progress in terms of opportunities for citizens to engage in the budget process, on average, these opportunities diminished in Francophone countries.

The discussions enabled to delve deeper into identified issues in the report, including that of capacity, both technical and financial, and that of the lack of communication of legal avenues for transparency. The importance to promote standards and the culture of transparency was identified, as well as the need to prioritise reforms depending on the country context.

The need to further institutionalise the role of civil society in the budget process and empower civil society to participate more actively in the budget process was also discussed. Avenues to engage civil society were identified, such as organising forums for civil society or publishing citizen’s guide to the budget.

To access the report, Fiscal Transparency and Participation in Africa, please follow the link.

Emilie Gay

From the 5th to the 9th November 2012, CABRI undertook a Joint Country Case Study (JCCS) on Programme Based Budgeting (PBB) in Namibia. The JCCS is one of CABRI's innovative tools, which provides participating CABRI members an opportunity to investigate and document the experiences, successes and lessons learnt of reforms to a particular aspect of a country’s budgeting system.

A team of senior budget officials from Botswana (Ms. Maphorisa & Ms. Keorapetse), Kenya (Mr. Kimemia) and Sierra Leone (Mr. Conteh) along with members from the CABRI Secretariat supported this study. During the week-long exercise, the review team met with representatives from the Ministry of Finance, as well as representatives from line ministries, the office of the prime minister, civil society, parliament and the national planning commission.

The exercise enabled participants to learn more about the implementation strategy and conceptual design of the PBB reform in Namibia. Namibian representatives also shared some of the challenges they face in implementing PBB. The team shared their own experiences with respect to, amongst other things, costing of programmes, establishing a clear harmonised programme structure, revising the State Finance Act, the need for capacity building and consultation in implementing the reform and the links between the organisational and programme structures.

The exercise drew to a close with an out-briefing meeting with the Namibian Permanent Secretary and Deputy Minister of Finance. The team will produce a review report, which can be used by Namibia, and CABRI member countries, as a guiding document to strengthen its reforms. This report will be presented at CABRI’s forthcoming annual seminar.

The beginnings of PBB in Namibia

Namibia has experienced an extended programme budgeting reform journey, which began as far back as 1996, with a Cabinet Decision that formed the basis for the move towards PBB. In 1999, the Performance and Effectiveness Management Programme (PEMP) was piloted and implemented which, along with the other reforms such as the introduction of a Medium-Term Expenditure Framework (MTEF) and National Development Plan, aimed to enhance the development impact and efficiency of the National Budget.

Since 2004, Namibia has been implementing a partial system of programme budgeting with the first Medium-Term Plans (MTP) prepared and published in that year as part of the MTEF document. The MTP set-out for each Office, Ministry or Agency the priorities for the three years, objectives programmes and activities, and allocation of funds by programmes and sources of funding.

A new momentum

Another milestone in the journey was achieved in 2005 when the Minister of Finance tabled the MTEF document in Parliament as the official document supporting the Appropriation Bill. While this did not change the basis of appropriation control which to this day remains on the legacy method of main divisions (i.e., administrative unit) and sub-divisions (i.e., input-based line-items), it sent an important message that scrutiny of the budget by Parliament should be informed by outcomes and outputs.

In 2008, a system of Accountability Reports for Ministries underpinned by a selected set of Ministerial Targets was also first published as part of the Budget documentation. So, by 2008, Namibia had completed the developmental steps of its programme budgeting system.

The road ahead

Since 2009, the Ministry of Finance has taken further steps to consolidate the reform. Principally, this involved modifying the expenditure management and accounting system so that each ministry could start to account and report budget expenditures fully on a programme basis. While a new segment was added to the integrated financial management system (IFMS) general ledger in 2012, it is not yet in use by all ministries.

In addition, a “new approach” to programme budgeting was announced in 2012, requiring ministries to make an explicit, indivisible linkage between administrative units and programme activities. While this may eliminate the need for cost allocation and therefore may simplify
programme costing, it may reinforce the tendency to design programmes that conform to organisational structures instead of policy-based outcomes.

There have been stop-go aspects to the reform, including incomplete initiatives, such as the PEMP framework, which, in 2011, stopped being published. Despite these disruptions, the basic building blocks are now in place and the reform process so far has vastly improved availability and access to information on government spending as well as macro-fiscal planning. There is willingness in Namibia to push this reform further to reach a point where the full benefits of programme budgeting can be reaped.

CABRI first undertook a JCCS in Mauritius in 2008. To see a copy of this report, please follow this link. CABRI is currently producing a status report on Performance and Programme Based Budgeting in Africa, which will be published in early 2013. This report will be shared with the network and will prove to be a useful source of material in CABRI’s future work on PBB, including planned JCCS
in 2013 and 2014.

Emilie Gay

The Collaborative Africa Budget Reform Initiative (CABRI) held its 8^th 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 achieve.[1] 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 here.

Nana Boateng
Technical Advisor, CABRI Secretariat

[1] See paper by Ian Lienert on the 17 preconditions for PBB Reform.

31/1/2012

In the follow-up of CABRI’s participation at the 4^th High Level Forum on Aid Effectiveness, which took place in Busan last year, CABRI has pursued its work on budget and aid transparency. On the 24^th and 25^th January, CABRI took part in a conference organised by the International Budget Partnership (IBP) on fiscal transparency and public participation. The meeting, which took place in Dakar, brought together representatives from civil society and representatives from Ministries of Finance and Economics from Niger, Cameroon, Mali, Senegal, and DRC, as well as representatives from international organisations.

The focus on these particular countries was motivated by the IBP’s observation that this region had performed relatively disappointingly in the 2010 Open Budget Index (OBI). The OBI ranks countries with respect to their practices in terms of budgetary transparency and public participation based on international best practice. Best practice in this field has emerged as the production and publication of eight key budget documents: 

1. The pre-budget statement, which should be published at least a month before the budget proposal;
2. The executive’s budget proposal, which should be published three months before the start of the fiscal year;
3. The citizen’s budget, which should be published at the same time as the budget proposal;
4. The enacted budget, which should be published no later than three months after the parliament has voted;
5. In-year reports, which should be published a month after the reporting period;
6. The mid-year review, which should be published during the six weeks after the reporting period;
7. The year-end report, which should be published six months after the end of the exercise;
8. And the audit report, which should be published no later than two years after the exercise.

In terms of these publications, the OBI gives importance to the comprehensiveness, reliability and completeness of the content of these documents, as well as the timeliness under which they are published. The survey also takes into account the extent to which these documents are made accessible to the public and the extent of public participation in the various phases (planning, approval, execution and evaluation) of the budgetary process.

Within the given region, Mali was the best performer in 2010, scoring 33% on the OBI, while the rest of the pack scored poorly, between 2% and 6%. Based on this observation, the dialogue between civil society and government representatives sought to establish an assessment and ensuing recommendations to improve fiscal transparency and public participation in their respective countries.

The dialogue was also an opportunity for these countries to recall why fiscal transparency and public participation are important and the benefits which they generate. The senior budget official from DRC identified that the main goal of fiscal transparency and public participation was to serve the population. The representative from Niger made the essential point that fiscal transparency and public participation contribute to a democratization process, which leads to citizens becoming more equal faced with the budget. Fiscal transparency and public participation also create a virtuous circle, which can participate to a more optimal use of public resources and hence better service delivery, greater economic efficiency and more growth. Meanwhile, the Malian delegate indicated that having involved, engaged and active citizens could help the government to improve its methods, documents and practices, establishing a culture of learning.

Other benefits which were identified were that fiscal transparency and public participation can:

- Limit the extent of corruption and misuse of funds;
- Generate a better coordination between donors;
- Enable a better acceptability of fiscal measures by the public;
- Develop an image of good governance in the country;
- And strengthen overall public financial governance.

By bringing these actors together and through country break-out sessions, observations emerged with respect to the status and scope for progress regarding fiscal transparency and public participation in the region.

Improvements since 2010

Participants shared their experiences with respect to the progress made in the planning phase of the budgetary process since the last OBI results. For example, Mali established an internal control system and started publishing quarterly budget reviews. DRC has made many of its publications available on its website and government procurement laws have been reformed. Senegal has added many annexes to the budget proposal, such as those relating to risk assessment, information systems have been established and a good governance programme has been put in place. Meanwhile, although progress has been made in the execution and approval phases of the budgetary process, progress has been less wide-ranging than that in the first phases of the cycle.

Easy wins

Encouragingly, it came to light that the OBI scores in the region could easily be improved. As such, many budget documents are already produced by the Ministries of Finance and Economics, but not published. Most importantly, one of the key documents, the budget proposal, represents a vital step in improving fiscal transparency and is not being published in many countries of the region. In the OBI questionnaire, the budget proposal represents more than 55 questions out of a total of 92 questions, reflecting the importance of this document. Other in-year reports are also already being produced and could easily be made accessible through internet. The discussion did raise the issue though that internet may not be sufficient to increase transparency and public participation, as in most countries, internet access remains limited. Furthermore, OBI scores were brought down by documents being published outside of the delays recommended by best practice. Correcting this may mean clarifying the budget calendar, which may not require such an additional effort as changing the format and content of a document.

 Few frameworks for public participation

While civil society representatives acknowledged that there is scope in the current state for some sort of participation in the budget process, the latter is not collaborative, due to asymmetry of information, for example, which biases the dialogue between civil society and ministries. The civil society representative from Cameroon indicated that the budget calendar was not always published. In Mali, while civil society was able to make recommendations and observations to the pre-budget statement, these were not always sufficiently taken into account in the final budget proposal. It was also noted that division of civil society weakened its power to participate and hence civil society needed to organise itself more efficiently in its lobbying and participative efforts. This challenge was due to the fact that, unlike with respect to fiscal transparency, there is no such thing, as yet, as a best practice in terms of public participation. This is because public participation in the budget process is more complex and country-specific, than the production and publication of key budget documentation.

 Weakness of the legislature and media

In many of these countries, the media remains weak and not sufficiently empowered to spread information and raise the debate within the population. The civil society representative from Niger went so far to say that, in his country, disinformation was taking place by the media. What’s more, it was noted that the legislative power was not sufficiently strong. Meanwhile, some representatives of civil society noted that even if appropriate involvement of the legislative branch was achieved, the parliament in certain countries sometimes failed to represent the interests of the people. In this context, it was also raised that political opposition should play an important role in the budget process and should effectively participate in the budget debate.

 Institutional and capacity constraints

Another key point of discussion was the extent to which institutional and capacity constraints mean that progress is difficult to achieve in certain sectors. For example, in Mali there are constitutional constraints, which mean that the audit institution is part of the Supreme Court, which means that the government is finding it challenging to make the audit institution independent. This, in turn, means that the audit institution remains understaffed to fulfill its duties and produce the audit report.  This is also causing delays in the external audits report, the last one having been published in 2008. A system of internal audit is still absent, partly due to the lack of an audit culture and capacity constraints in terms of human resources. What’s more, internal controllers in Mali are appointed by the President, which limits the independence of the control system. Meanwhile, another element which creates a so-called “transparency leak” is the inefficient control and accountability of agencies and para-public institutions.

Aid Transparency and Management

Finally, another key element, which arose from the discussion, was the fact that aid flows are not sufficiently transparent, raising the importance of aid transparency to achieve fiscal transparency. This brings us to CABRI’s participation, from the 24^th to the 26^th January, in the Aid Management Platform Workshop, organised by Development Gateway, also in Dakar. CABRI brought a budget perspective for aid coordinators present at the conference, by emphasizing the need for them to bring the aid information that they hold on budget. The session served as a reminder that having aid off-budget causes the following problems:

-          A duplication of funding for the same services;
-          A disruption of services;
-          Funding for activities is rejected by the budget system;
-          Funding of activities is not aligned with country priorities;
-          Forward cost of aid activities;
-          A transparency cost;
-          A fungibility of resources, double dipping and internal accountability;
-          A weak external accountability of the executive to parliament and public.

The lack of aid transparency is created by several factors, such as donor systems not being set up to provide information, information by donors being incomplete and provided too late, international information being incompatible, and line ministries not willing to share information. Notwithstanding these factors, it is vital to create an interface between the aid management process and the budget management process, in order to report and import aid information in the budget process and cycle.

Emilie Gay ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

15/12/2011

Regional public goods (RPGs) can be summarised as goods or resources that can be shared by people across countries in a more or less non-rival, non-excludable way. RPGs can support developing countries to achieve higher economies of scale in market size and thereby contribute to the development of a region, but also to regional peace and stability. Yet, due to political issues and market failures, such as the dilemmas that RPGs create due to presence of positive or negative externalities[1], the provision of RPGs tends to be sub-optimal.

The Collaborative Africa Budget Reform Initiative (CABRI) has an interest in RPGs because of their impact on the public finances of countries in Africa. 

This is why CABRI (with the support of the African Development Bank) has conducted research on a number of RPGs in Africa in order to examine the benefits and challenges which result in their provision from a financing perspective. At CABRI’s 3^rd Africa Policy Seminar in Cape Town senior officials from 14 African countries and representatives from various international organisations met to examine Regional Public Goods in the African context, the incentives to enter into such projects, the institutional arrangements thatenable their provisioning as well as the available financing frameworks.                                                             

Collaboration on RPGs is not an easy task. An example of the challenges is a railway line between Malawi and Mozambique which needs maintenance work in a swamp area on the Mozambique side. This railway connects Malawi to a Port and is therefore of more importance to Malawi than to Mozambique. Yet, due to the lower importance of this railway link to Mozambique, the repair work on the railway line is not undertaken and Malawi struggles with the resulting negative externalities.   

Key lessons

Regarding the implementation of Regional Public Goods Projects, the key points raised during the discussions on project design include the following:

(1)   Commitment: A shared purpose as well as a long term commitment of participating countries are the basis for any regional public cooperation;

(2)   Institutional foundation: In order to have a sustainable collaboration, the necessary institutional arrangements need to be created in a robust and flexible manner. It is also important to reassess the circumstances in the course of the project in order to explore whether contributions need to be weighted differently, or partnerships possibly redefined;

(3)   Capacity: Sound project design includes ensuring that financial mechanisms are carefully scrutinised beforehand in terms of the capacities of the involved parties in order to ensure regulation and also enforce the implementation of regional projects.

(4)   Coordination of projects: While the different nature of infrastructure needs to be taken into account, the coordination of projects can result in higher cost efficiency (e.g. jointly coordinating the construction of a cross-boundary road and an underground cable running next to it).

(5)   Strong leadership: Most times RPGs are not of equal importance to all countries involved. It can, however, still be useful for a strong country or institution to take a leading role and support a weaker country (even if this country can draw a greater benefit from the provision of a public good), as the entire regional collaboration on an RPG might otherwise be undermined.

Partnership solutions for regional projects

The question that remains is how to begin operationalising collaboration on regional public goods and how to tip the scale from national solutions to more regional ones? Some countries have the mindset of “1 dollar buying more domestically” and remain reluctant to enter into collaborations on RPGs. This is why institutions like CABRI are considered important for sensitising decision-makers towards seeing the benefits and potential of RPGs in the broader context. Some of the following financing options were discussed:

Public Private Partnerships (PPPs): When public and private sector aims are aligned, the benefits of collaborating become obvious: strong private sector participation can improve the execution of regional public projects. The Maputo Development Corridor that links South Africa and Mozambique is a good example for this. The private sector can also be instrumental in providing risk capital, as project financing from debt alone does not provide equity and is not sustainable. What is important to bear in mind is that while the vision of providing a public good in the public sector mostly represents a long-term goal, the private sector interest may be limited in time and provisions need to be made for an eventual end of such a partnership. PPPs can, indeed, go well, but the enforcement of agreements on the international level needs to be carefully thought through.

One suggestion is to introduce a database of bankable projects which are freely accessible in order to stimulate more involvement from the private sector (and other donors).

Regional Banks: In order for regional initiatives to take off, regional banks need to be brought to the floor as main actors for the financing of RPGs. Regional banks are especially important when it comes to the initial project phases (feasibility studies etc.), when return on investments might be unclear and therefore still unattractive for private sector investors. This also means that the capacity of regional banks needs to be strengthened, both in terms of financial means to support regional initiatives and capacitating staff through training regarding questions such as: what kind of financing structures to develop, which of the partner in the RPG project will receive the funds etc.

 Creative regional solutions

One example for creative financing options that can be learned from is the Africa Risk Capacity (ARC), a new mechanism that has been created from collaboration between the African Union and the World Food Programme. The ARC is not a pure regional public good, but it is an example of a club good aiming towards reducing the risk of negative externalities that arise from natural disasters. It is a risk financing facility that provides the possibility for member gouvernments to access contingency funds as a potential disaster response with the objective to avoid gouvernments‘redirecting resources originally planned for other activities.

Though co-operation on Regional Public Goods is a challenging endeavour, cross border-collaboration has clear success stories. One of these is the river blindness control work in sub-Saharan Africa: the African Programme for Onchocerciasis Control (APOC). The APOC is generally considered as a good practice example, where, despite internal and cross-border political conflicts, the programme continued to work and has substantially contributed towards combating Onchocerciasis in Africa.

The publication Regional Public Goods. Incentives, Financial Frameworks and Institutional Arrangements and the CABRI Briefing Paper on Regional Public Goods served as the basis for discussions at CABRI’s 3^rd Africa Policy Seminar

Anke Braumann ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

[1] Externalities can occur whenever an action of an individual (or a group of individuals) or a natural event  positively or negatively influence the well-being of any other another individual(s).

10/11/2011

CABRI partnered with the South African National Treasury and the IMF to host the first Africa Fiscal Forum, which was attended by 14 of the participating members of CABRI. The forum took place on the 9th and 10th of November 2011 in Cape Town and followed the publication in October of the IMF’s Regional Economic Outlook for Sub-Saharan Africa, entitled “Sustaining the Expansion”.  Given the forum was such a success, we hope it will be the first of many.

The forum provided an opportunity for country delegates, the IMF and representatives from other international organisations to share views on Africa’s current and future fiscal policy challenges. The discussions focused strongly on how Africa can prepare itself to face the next economic shock. Experiences were shared by senior budget officials, from West Africa (Mali, Guinea, Sierra Leone, Liberia, Ghana, Benin); East Africa (Ethiopia, Malawi); Central Africa (Gabon); and Southern Africa (Mauritius, Seychelles, Zimbabwe, Mozambique, South Africa). This, combined with panel discussions and presentations from the OECD, the African Development Bank, the University of Oxford and the IMF, resulted in a lively platform for discussions.

9/12/2010

The International Budget Partnership (IBP) released the 2010 Open Budget Survey results at the end of October 2010. The survey considers the public availability and/or accessibility of eight key budget documents, in addition to asking a series of questions on the breadth and depth of information in these documents and the openness of key budget processes. The Open Budget Index (OBI) comprises selected questions from the survey for which a composite score is calculated for each country, with 100 being the highest score possible.

18/11/2010

Over the last decade, Africa achieved demonstrable progress towards improved political and economic governance and consistent economic growth. Deep challenges, however, remain for the continent to grow out of aid and bring about progressive and sustainable improvements in its citizens’ quality of life. Unless Africa focuses on strengthening the good governance foundations of its progress, in the context of globalisation, the balance between progress and the remaining challenges could tilt in the wrong direction.

Moreover, the 2008 financial crisis again brought the world’s attention to the cost of weak governance arrangements for nations’ development, prosperity and growth. It is against this backdrop that the Collaborative Africa Budget Reform Initiative (CABRI) and its sister networks, the African Tax Administration Forum (ATAF) and the African Organisation of Supreme Audit Institutions (AFROSAI) perceived in 2009 that the time was right to raise an African voice on sound public finance management principles, auditing practices and credible tax systems that are appropriate for the African context.

Effective states, economic growth and sustainable development is associated with states’ ability to raise taxes, borrow prudently and manage other revenue flows effectively; to plan and manage the spending of public money effectively and efficiently; and to account for the use of funds and the results achieved. The management of public funds in states that achieve these outcomes commonly are characterised by elements of transparency, participation, responsiveness, oversight, accountability and predictability and by the rule of law. Together these features are constituent elements of good financial governance, the subject of a key work stream for CABRI in 2010/11.

Programme budgeting is always a topical issue within the CABRI fora. Many countries are currently grappling with how to design and implement programme-based budgets. The Ministry of Finance and Economic Empowerment in Mauritius (MoFEE) has taken important steps, by learning from their neighbours in order to navigate through the complex terrain of programme budgeting. CABRI has seized the opportunity to gain an understanding of Mauritius’ successes, challenges and lessons learned by conducting a Joint Country Case Study.

A CABRI expert group consisting of senior budget officials from Ethiopia (Mr Melaku), Kenya (Mr Kiiru), Rwanda (Mr Baingana and Mr Karakye) and South Africa (Dr Brown) spent a week in February 2010 reviewing the implementation of programme-based budgeting in Mauritius. The review involved an intense schedule of meetings, interviews with Mauritian officials and late night discussions amongst the team. The team was supported by the CABRI secretariat and a short-term consultant.

This is an excerpt of the press release.

"Africa's Infrastructure: A Time for Transformation", a study recently conducted in 24 African countries, shows that the poor state of infrastructure in Sub Saharan Africa – its electricity, water, roads, and information and communications technology (ICT) – cuts national economic growth by 2 percentage points every year and reduces business productivity by as much as 40 percent. This study argues that well functioning infrastructure is essential to Africa’s economic performance and that improving inefficiencies and reducing waste could result in major improvements in African’s lives.

The 2008 Open Budget Index (OBI) has been released by the International Budget Partnership on 1 February 2008. The OBI has been constructed in 2006 and “evaluates the quantity and type of information available to the public in a country’s budget documents” according to generally accepted good practice criteria for public sector management.

The 2008 Index was constructed by averaging countries’ answers to a 91-question Questionnaire (the Open Budget Survey) that covered the information contained in a country’s national budget documents that should be publicly available in countries. 85 countries were surveyed, compared to 59 in 2006. The questionnaire comprises three sections: (i) the dissemination of budget information, (ii) the executive’s annual budget proposal to the legislature and the availability of other information that would contribute to analysis of budget policies and practices and (iii) the four phases of the budget process.