A draft bill aimed at introducing enhanced reporting, transparency and efficiency in public financial management has made provision for the government to develop a Debt Strategy to spell out the roadmap and guidelines on debt contracting, management and repayments.
The draft bill has also made provision for a Debt Office, which will be responsible for public debt management to ensure sustainability.
The Group Head of the Public Financial Management (PFM) Reforms, Ms. Eva Esselba Mends, who disclosed this to the Graphic Business in Accra, said extensive consultations had already been concluded paving the way for the team to put together a good draft.
The steering committee working to refresh the legal framework to govern public finance management says it is hopeful the bill will come before Parliament early next year. It will go before Cabinet at the end of this year. The bill is part of the larger public financial management reforms.
“We have had extensive discussions with all the PFM agencies, chief directors of ministries, departments and agencies. We think we have a really good draft after engaging a number of our key stakeholders,” Ms. Mends, who is also a Chief Economic Planning Officer at the Ministry of Finance, stated.
She added that the consultative process was still ongoing, with meetings with development partners and another set of civil society organisations (CSOs) scheduled to take place from the week starting December 21.
Key provisions in it
The main feature of the bill is the introduction of a more transparent and robust accountability mechanism.
“We are opening up fiscal policy formulation and management, budget formulation and management and this is on the supply side. We are making the executive more accountable to the public and legislature,” she explained.
The new framework is being touted by some public financial management experts as a very significant development, perhaps next only to the Constitution in terms of importance.
The framework will oblige MDAs and state-owned enterprises (SOEs) to prove performance based on outcomes of projects and not just by their sheer numbers.
According to Ms Mends, there would be templates for clear performance targets at both the MDA and institutional levels.
With this new trend, therefore, it would not be sufficient for a health facility, for instance, to report that it carried out a certain number of surgeries. But the performance targets would be interested in how fast they were and how many of the patients survived.
It would not be sufficient to report how many graduates a university churns out but how many obtained skills had been engaged to work and how many are working at a certain level of the job market.
It would also impose on the MDAs and SOEs the obligation to file regular reports to certain bodies such as Parliament to constantly track progress and measure results to determine performance.
“The public and Parliament will be seeing more publications of fiscal data and assumptions underlying government fiscal policy, reports and how SOEs are performing as part of the budget, statutory funds reports as part of the budget. This is a major milestone as a nation as to how we are going to manage public resources,” she stated.
Background
Since the 1992 Constitution, there has been almost 14 legislations which have created funds that draw on the consolidated funds. Each has its own different accountability arrangements.
The draft, when it becomes law, will therefore repeal the Financial Administration Act, 2003 (Act 654) and the Loans Act of 1970, (Act 335).
Unlike that legislation where sanctions are more administrative, the new framework comes with clearly defined sanctions, spelt out under a complete section of the law to punish non-compliance.
“In the current laws, sanctions are discretionary and range from queries to repayments, refunds, reimbursements. But this one actually criminalises non-compliance and some grievous non-compliance issues,” she explained.
Source: Graphic