Public Financial Management (PFM) Reforms

This installment is actuated by eventsduring Public Accounts Committee(PAC) examinations (20 May to14 June 2013) and ongoing examinationsby the Parliamentary Committee on StatutoryBodies. Even though the latter is yetto complete the examination of accounts ofstatutory bodies, there are signs that publicfi nancial management is problematic despitethe inauguration of public fi nancialmanagement reforms in 2010. Thus, howcan we ensure the fruit of reforms?It stands to common reason that thereexists a principal-client relationship betweenthe citizens and government. Thus,the citizens and government are principaland client respectively. Given this relationship,it is a given that the client mustaccount to the principal for all things thatit does on behalf of the latter.


One of theprimary tasks that the client does on behalfof the principal is the expenditure of publicfunds. Thus, given the fact that resourcesare scarce and limited, it is imperative thatthere be good husbandry of public fundsby the government (particularly, the executivearm). In this regard, the need forgood fi scal governance cannot be over-emphasisedin days characterised by chronicfi scal stresses, largely, a result of the globaleconomic meltdown. To ensure good husbandryof public funds, public fi nancialmanagement is key. Public Financial Management[PFM] ‘… includes all componentsof a country’s budget process – bothupstream (including strategic planning,medium term expenditure framework, annualbudgeting) and downstream [includingrevenue management, procurement,control, accounting, reporting, monitoringand evaluation, audit and oversight] (JointVenture on Public Finance Management,2008; Report on the Use of Country Systems,p. i).’Five principles constitute good practicesin PFM: PFM work should facilitate andencourage country leadership in setting/managing the PFM reform strategy and actionplan; PFM diagnostic work should beconducted in an integrated and coordinatedmanner; PFM work should be weighted towardsupporting PFM reform implementationreforms and capacity building ratherthan detailed diagnostic analysis; PFMreform work should be framed within amulti-year horizon, sequenced aroundagreed priorities, and built upon a coordinateddonor approach; and PFM workshould be linked to a robust monitoringand evaluation framework, that clearly articulatesthe gains in PFM system performancethat are sought or achieved (WorldBank Group, 2003; Strengthened Approachto Public Financial ManagementReform, para 2).



Given the numerous and variegated benefits of good PFM, Botswana introducedPFM reforms in 2010. The adoption ofreforms was consequent to the Public Expenditureand Financial Accountability(PEFA) Performance assessment that wasconducted in 2009. Some of the reformsthat have been introduced are the GovernmentAccounting and Budgeting System(GABS) and the repealing of the Financeand Audit Act (this was replaced by thePublic Finance Management and AuditActs in 2012).Ending, it is legitimately expected thatPFM reforms beget numerous and variegatedbenefi ts. In the same vein, regardmust be had to the fact that a lot of resources,being time and fi nancial, have been expendedon the project. On the whole, thereforms do not seem to have borne fruit,hence, the urgent need to be challenged toensure the fruit of the intervention.