Treasury consolidation facilitates the pooling of all cash flows available to the Treasury, which helps to optimise the use thereof when budgetary pressures intensify. In order to reach this treasury management objective, several countries have implemented the reform on the single treasury account (CUT). This reform, which is still only recent in most of the UEMOA and CEMAC countries, theoretically enables the governments who implement them to better manage their commitment by having a better view of their cash flows and to have more readily-available public resources. However, in implementation, the reform fails to reach the hoped-for objectives for both political and technical reasons. This is a challenge faced by the Central African Republic

As a low-income and politically unstable country, the Central African Republic deals with significant cash flow pressures related to the lack of availability of domestic resources to meet expenditure. In fact, the CAR’s domestic income remains among the lowest in Sub-Saharan Africa (8.2% of the GPB[i]), reflecting a deep structural weakness of the tax system. For example, over the past 5 years, the budgetary objectives, in particular for those concerning tax revenues, were not reached[ii]. This below-average performance is the result, in part, of not meeting a significant number of quantitative performance criteria, in particular the lack of availability of tax revenue as well as consolidation in the CUT of revenues formerly collected by public institutions[iii].

This below-average performance by public institutions remains a great concern for the Ministry of Finances and the Budget (MFB). In order to become efficient in treasury management, the MFB has put in place a reform via Article 10 of the initial Finances Act of 2019. The reform, which entrusts financial guardianship of the public institutions to the MFB, should also allow the Public Treasury to consolidate all the cash flows held by the public institutions in the CUT (Article 26). Even though early on in the reform it allowed actions such as the closing of certain accounts opened by the public institutions at commercial banks, it should be noted that to date the Treasury has still not managed to harness all the resources collected by the public institutions. For example, the implementation of revenues from public institutions has gone down from 78% in 2016 to 45% in 2019. In late January 2020, the monthly budget forecast of public institutions was 814 million, compared to an implementation of 337 million, in other words an implementation rate of 41%, while during the same period in 2019, before this reform became operational, the targeted structures mobilised 907 million for their account, in other words three times the amount collected in January 2020. In late March 2020, after the reform that implements financial guardianship, the revenue implementation rate of public institutions stood at only 20%. In terms of impact, there is a risk of increased cash flow pressure and failing to make disbursement to the Ministries, Agencies, CAS and Funds could slow down the operation of the structures.

In order to further investigate this public finance problem and to find sustainable solutions, an official team from the MFB undertook a 12-month journey to apply an interactive adaptation approach to solve their problem. The initial step of the team’s commitment consisted of breaking down the problem and identifying its potential causes.

The diversity of the team contributed to understanding the problem holistically, in particular thanks to the presence in the team of accounting officers and officers from public institutions affected by the reform. This process was also accompanied by the collection of evidence and data to help the team identify entry points on which they could start to work.

The team understood that strict work organisation was necessary to start with the action process. Thus, the team implemented rules of engagement that consisted of identifying a meeting frequency and location, distributing the roles and responsibilities and identifying a regular monitoring system with the CABRI coach. Against the background of the pandemic and social distancing, it was of the utmost importance to hold monitoring meetings using virtual communication software with a specific agenda.

One of the key success factors in the problem-solving process was to obtain and maintain the “blessing” of the political and technical authorisation bodies, but also the affected stakeholders or those which could influence the problem. The team understood this very early on by conducting commitment actions through meetings and by communicating regular reports to the authorisation bodies on the state of progress of the actions and challenges expected. The construction of the problem proved to be very important to the process because it allowed the team to draw attention to the need for change and to create stakeholder coalitions in particular with the Agence Comptable Centrale du Trésor [Central Accounting Agency of the Treasury] (ACCT) and the Direction Centrale des Collectivités et des Organismes Publics [Central Directorate of Communities and Public Institutions] (DCCOP).

Also, the adoption of a monitoring mechanism with short retroaction cycles allowed new knowledge to emerge on the root causes of the problem and a continuous commitment from the team. Through physical visits and surveys to public institutions, the team was exposed to the feelings of the role players about the problem and collected their recommendations. The visits in particular revealed a lack of knowledge of the reform texts which led to a lack of appropriation of the reform by the role players. Also, the institutions identified failing to receive subsidies in a timely manner as one reason for the low level of resources recovered in the CUT. Considering that the success of a PFM reform depends more on non-technical aspects and on change management, this commitment exercise by the stakeholders proved to be very useful because it increased the degree of acceptance of the works and inspired the commitment required from stakeholder to support this reform.

Even though the process of implementing public finance reforms has been a long-time coming, the experience of the BPFMC programme has helped to make some considerable progress. The team managed to influence the national reform implementation agenda by insisting on the need to involve and educate role players in the operational changes caused by the new texts. This is demonstrated by the organisation of an awareness-raising and capacity-building workshop for accounting officials from public institutions. The workshop was an opportunity for the team and the PFM experts to revisit the major changes resulting from the reform and to share the experiences of certain Public Institutions who stand out in matters of budget preparation and resource consolidation, in particular the Fonds d’Entretien Routier (FER).