DT Global has a long history of supporting governments around the world on Public Financial Management (PFM). In the last three decades, a number of African countries have introduced reforms to improve the management of public monies, despite scarce resources and enormous social and economic needs. These reforms have aimed to ensure better efficiency and effectiveness in the allocation of resources as a reflection of the governments’ priorities. The approach of many of those reforms was to replicate frameworks —such as Medium-Term Budget Frameworks (MTBFs) or Multiannual Financial Frameworks (MTFFs) — too often without considering the political, economic, and administrative context of the countries in which they were enacted. It has become increasingly clear that governments and international organizations must continually change their approach to implement the reforms more effectively.
PFM is an interdisciplinary practice. Underpinned by economics, accounting, and law, it also has aspects of political economy, management, and information systems. A more holistic approach to PFM, taken in the last few years, has involved putting the focus not only on the technical areas, such as budgeting and spending, but also on building capacity, engaging with civil society, and focusing on services delivered to citizens. PFM is seen as necessary to improve development outcomes around poverty reduction, infrastructure development, public investments, gender equality, and/or health.
Economic development simply cannot exist without a strong PFM system.
In the last decade, the IMF and
the World Bank, together with other development partners such as the European
Union, have developed and strengthened tools to measure PFM. These tools provide
objective information to governments on areas where improvements are required.
Some of those tools include the Public Expenditure Financial Accountability
(PEFA) assessment, the Tax Administration Assessment Tool (TADAT), and the
Public Investment Management Assessment (PIMA). These assessments are often followed
by capacity building measures intended to support a more targeted
implementation of the reforms.
DT Global has acted as a key partner to the European Union in implementing these measures. We have supported governments throughout Africa by carrying out assessments and implementing capacity building programs to improve PFM and service delivery across a variety of sectors, including health, education, infrastructure management, and supply of basic services, such as water and electricity.
Through this work, DT Global’s PFM team has learned to value an iterative process and to prioritize continuous learning from our experience. Our approach focuses on an in-depth analysis and understanding of the political, economic, social, and administrative context of the country in question. Armed with this knowledge, we have contributed to the implementation of structured processes that address challenges and develop solutions towards the improvement of PFM and service delivery to citizens.
Over the past 10 years, DT Global has carried out PEFA assessments at the regional, district, and municipal level in a number of African countries. In South Africa, where we have provided technical assistance to the National Treasury for almost eight years, DT Global is currently implementing the Technical Assistance for the Public Financial Management Capacity Development Programme for Improved Service Delivery (FMISD), which was designed based on the outcomes of a round of PEFAs done at the provincial level. FMISD strengthens the coordination between the three layers of public administration by implementing innovative knowledge management platforms and developing and implementing capacity building programs with a special focus on the sub-national level. In other countries, such as Tanzania, we have supported the government in implementing PFM reforms, ultimately contributing to strengthening the regional governments and their subsequent ability to better support the municipalities.
In today’s world, in order to be successful, we must be adaptive in a constantly changing environment. COVID-19 is accelerating these changes, and the pandemic is going to significantly affect public finances all over the world, particularly in developing countries. The reallocation of funds to health budgets to fight COVID and to social budgets to soften its economic effects on the population, coupled with a significant decrease in revenue, reinforces the need for a strong and resilient PFM system in African countries. In the meantime, investments in education, infrastructure, and other basic services are still needed. Improving public investment management, developing new models of development finance promoting collaborations between public and private sectors, and using new technologies to improve service delivery will be critical areas to enable African countries—with the support of international development firms like DT Global—to improve service delivery and the lives of their citizens.