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A Comparative Budget Reform Experience Liberia and Uganda By Florence N. Kuteesa IMF/Fiscal Affairs Department

A Comparative Budget Reform Experience Liberia and Uganda By Florence N. Kuteesa IMF/Fiscal Affairs Department. Liberia : Public Financial Management Course Offered by Duke University, North Carolina, USA February 24 – March 4, 2011. Content.

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A Comparative Budget Reform Experience Liberia and Uganda By Florence N. Kuteesa IMF/Fiscal Affairs Department

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  1. A Comparative Budget Reform Experience Liberia and Uganda By Florence N. Kuteesa IMF/Fiscal Affairs Department • Liberia : Public Financial Management Course • Offered by Duke University, North Carolina, USA February 24 – March 4, 2011

  2. Content • Focuses on post-conflict budget reform experiences for both countries. • A glance at select socio-economic indicators • Post-conflict PSR and PFM Reforms • Evolution of budget reforms • Have the budget reforms been effective? a comparative analysis of PEFA scores. • What are the emerging lessons?

  3. A glance at select socio-economic indicators…….

  4. Post Conflict: Select Public Service and PFM Reforms

  5. Post Conflict: Select Budget Reforms

  6. Post Conflict: Select Budget Reforms

  7. Evolution of PFM Reform in Uganda: Major Milestones Investment & Infrastructure Macroeconomic Stabilization Poverty Reduction Enhanced accountability Automation Poverty/results focused Budgeting Enhancing fiscal discipline 1986 1996 2005 2010

  8. Have the budget reforms been effective? - Budget Credibility

  9. Have the budget reforms been effective? – • Policy-based budgeting

  10. Have the budget reforms been effective? Comprehensiveness &Transparency of the budget

  11. Lesson 1: Inadequate coordination of external resources undermines credibility of the budget…... • A wide range of donor interests & expectations are difficult to harmonize at national level: • Confusing and conflicting: MDGs versus poverty goals • Costly and not sustainable ( project implementation units) • Numerous conditionalities & obligations prevent compliance with legitimate rules, processes, accountability • Fragment budget decision making(dual budgeting) • Ultimately undermining optimal allocation of resources within the MTEF.  • Policy framework, including guidelines, to mainstreaming aid management into the budget process is an urgent priority

  12. Lesson 2: Enhancing the credibility of the Budget requires a holistic approach ………. Ownership Agreement on Priorities: Translation of political aspirations and developments needs into policies, actions & budgetary policies Assurance Link policy making and budgeting MTEF and Budget reflect agreed priorities. Confidence: Ouputs and Impacts: Conversion of expenditure into public goods. Demonstrated impact as desired. Effective monitoring, reporting and oversight Trust Enhanced predictability of resources. Minimise deviation between appropriation and expenditures Better use of available cash.

  13. Lesson 2: What are the common challenges to a holistic approach ?(ctd) • Political ownership/consensus of priorities is undermined by the: • Multiple national development plans( PRSP, Visions, MDGs) • Numerous institutional mechanisms without effective coordination. • Inadequate engagement of policy makers. • Translation of policies into resource allocation is challenged by the: • Multiple strategic plans driven by different stakeholders • Lack of or poor costing of on-going or new policies • Ambitious targets not guided by realistic resource ceilings • Budget classification hinders meaningful analysis of resource allocation. 

  14. Lesson 2: what are the common challenges to a holistic approach……..? (ctd) • Enhanced predictability constrained by: • Poor commitment control • Poor cash management • Emergencies and political directives.  • Monitoring, reporting and accountability is undermined by • Too many mechanisms/systems by different stakeholders • Hardly influence decisions • Overload the spending agencies. • Reports neither consistent nor provide strategic direction.

  15. Lesson 3: Reforming the functionality of a Budget Directorate • Ownership, commitment and technical competence • Understanding of the reform agenda: • Clarity on reform concept and principles, institutional roles etc • Intensive sensitization program (medium-term). • Simplified guidelines and instruments, training materials. • Training strategy should be mainstreamed within budget process. • Coordination with relevant departments in MoF and MPEA. • Technical support and mentoring sectors/LMs. • Strengthen the “challenge function”: strategic allocation and use of public funds, economy, efficiency & effectiveness (impact) • Capacity enhancement in policy analysis (budget and sector specific), program design, appraisal and evaluation etc • Streamline the institutional set-up of the Directorate, including execution of duties.

  16. In conclusion, a reform is a long drive that requires….. • Steady and focused driver: strong and competent leadership • A map: a shared vision including SMART deliverables for a credible reform • Keep to the road: A mutual commitment to work consistently within a coherent framework (guidelines and incentives). • New passengers: will be motivated and board at various stages.

  17. Thank you

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