public finance and economic management reforms in malawi

7/30/2019 Public Finance and Economic Management Reforms in Malawi

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Presentation by:

PFEM Secretariat

Ministry of Finance

MALAWI


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Outline Introduction

PFEM Reform Roadmap

Drivers of the Reform Process

Good Practices Achievements

Challenges

Success Road ahead


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Introductions

PFEM Reforms aim to improve, strengthen, or changethe PFM system;

The objectives of the reforms are to achieve:

fiscal discipline;

efficient allocation of resources towards nationalstrategies; and

ensuring value for money

The ultimate goal is to ensure effective and efficientpublic service delivery.

PFEM Reform process is complicated as it involves a

wide range of stakeholders


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PFEM REFORM ROADMAP IN

MALAWI In 2001 the Country Financial Accountability Assessment

(CFAA) was with the assistance of the World Bank toidentify accountability issues and risks

The recommendations of the assessment formed the basisfor the development of the Malawi Financial

Accountability Action Plan (MFAAP) in 2003

MFAAP had a purpose of coordinating initiatives aimed at

strengthening financial accountability. The MFAAP had 52 initiatives covering Central

Government, Local Governments, Parastatal.


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MALAWI Contnd The action plan was organized in 5 themes:

budget preparation;

implementation and expenditure control;accounting and reporting;

procurement;

external oversight ; and

private sector

For effective progress monitoring of the AP, theMFAAP Technical Committee was established


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MALAWI Cntnd The first PFEM Action Plan 2006-08 on the MFAAP, was

developed to coordinate activities across the PFEM cycle

MFAAP TC was changed to be PFEM TC

Progress in PFM was made especially regarding theimplementation of the IFMIS and enactment of the:public procurement, Audit and Financial ManagementActs in 2003

Second PFEM Action Plan aligned to the Malawi Growthand Development Strategy (MGDS ) developed in 2008

The Action Plan had 130 actions points and difficult tomonitor


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MALAWI Cntnd It was hence revised in 2009 and had 39 actions for

implementation between 2010-11

In 2010 the Ministry of Finance through functional review

established a PFEM Unit responsible for coordinating,

Facilitating; and

monitoring implementation of PFEM reforms

In June 2011 Government developed a comprehensivereform programme covering all key PFEM Institutions


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MALAWI Contnd It covers issues of;Planning and Policy Analysis,

Resource Mobilisation,

Budgeting,Procurement,

Accounting and Financial Management,

Cash and Debt Management,

Parastatal Financing,

Monitoring and Reporting,

External Audit and Programme Management

Government priority identifies projects to be fundedunder the programme


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Drivers of the Reform Process in

Malawi Government with Development Partners established a

multi-donor trust fund

Development partners have worked with Governmentin PFM reforms through;

Undertaking Studies and Assessments to inform areaswhich need reform

provision of Financial support

Government has driven the reform process by

Undertaking relevant PFEM analyses

implementing the recommendations

Putting in place relevant structures

providing other resources for PFEM projects


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Good Practices Government Leadership in the PFEM reform process for

ownership and ease of institutionalisation of the reformsGovernment chairs all PFEM committees in Malawi

Use of PFEM AP indicators for conditionality

PFEM Reforms are complicated hence require a

comprehensive programme like the PFEM RP

PFEM Reform is on-going and requires well establishedimplementation structures

Relevant stakeholders are highly involved through regularmeetings


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Achievements Improvements had been observed in some areas of

PFEM as evident by movements in PEFA scores inareas of;

Budget classification and comprehensiveness whereMalawi mover from B in 2008 to A in 2011

Effectiveness of payroll controls from C+ to B+


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Challenges Complicated PFM systems which requires advanced

coordination skills

relevant capacity being built in the PFEM Unit

Lack of commitment by PFM Institutions

Requires an understanding of change management

Poor Coordination in the early stages

PFEM Unit is now in place and this has been solved

Resource constraints as PFEM reforms dont achieve quick wins so funding gaps

are usual


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Success Stories Comprehensive PFEM RP developed with GovernmentLeadership

Multi Donor Trust Fund established as a funding

vehicle to ensure complete funding of all thecomponents

Relevant structures institutionalised to ensure smoothimplementation of PFEM programmes

(including; PFEM SC, PFEM TC, TWGs and the PFEMUnit)


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Moving Forward PFEM Secretariat to function beyond coordinating

To be involved in initiating and spearheading reforms


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Thank You

public finance and economic management reforms in malawi

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