Public financial management implies the elements of budget cycles built around auditing, accounting and reporting, budget formulation, execution and performance.
Its main focus is economic and governance reform programs for developing economies emphasizing transparency, accountability, fiscal discipline, predictability with the purpose of strengthening public finances.
Experts say that for a continent grappling with poor infrastructure and low budget performance corruption, Africa needs increasing number of experts in public finance management.
To advance this course, African Development Institute (ADI) of the African Development Bank (AfDB) Group recently graduated the first cohort of trainees of its Public Finance Management Academy for Africa (PFMA).
The ADI is the AfDB’s focal point for capacity development support to member countries and it contributes to efforts to build sustainable capacity for institutional development effectiveness in the institution’s regional member countries.
The PFMA is an AfDB initiative aimed at providing comprehensive and structured capacity development in Public Financial Management to African countries.
The final phase of the executive training course on “Enhancing Accountability, Transparency, and Curbing Corruption and Illicit Financial Flows in Africa” took place from Dec. 11 to Dec. 13, 2023, which culminated in the graduation ceremony.
The program brought together 145 public officials from 45 African countries and commenced in July 2022. 52 participants from 26 countries completed the program and earned certification as Public Finance Management (PFM) experts in their respective nations.
According to the Public Finance Management Academy of the AfDB, it ran the course in collaboration with experts from the International Monetary Fund, the World Bank, and other related institutions.
The AfDB said in response to the challenges of Illicit Financial Flows (IFFs) money laundering, and terrorist financing, it developed several policy and strategic instruments.
These include its Policy on the Prevention of IFFs (2017) and the Action Plan for the Prevention of IFFS in Africa (2017-2021).
These policy and strategic instruments prioritize capacity building for African countries and regional economic communities (RECs) to effectively combat IFFs. Hence the establishment of the PFMA.
“Lack of accountability and transparency, corruption, and illicit financial flows (IFFs) create a vicious cycle of fiscal sinking holes in Africa’s public resources.
“As governments lose revenue to IFFs and corruption, they are forced to borrow, and the borrowed funds are in turn stolen because there are no measures to stop the outflow of public resources,” the bank said.
It believes that these challenges are primarily the result of fundamental public governance and structural weaknesses in African economies.
It also pointed out that part of the problems is a weak program and project implementation capacity due to a critical skills gap and inadequate tools, as well as weak international cooperation efforts to curb corruption and IFFs.
The AfDB has also developed the Strategy for Economic Governance in Africa (SEGA), which highlights the importance of supporting countries in combating IFFs and money laundering.
The bank’s Chief Economist and Vice-President, Economic Governance and Knowledge, Kevin Urama, told the PFMA cohorts of trainees that the bank was committed to boosting fiscal discipline on the continent.
He said the strategic importance of PFM lies in enhancing economic governance and knowledge management to promote wealth creation and prudent management of public finances.
“Africa, despite its natural resource richness, often faces financial challenges due to mismanagement.
“Currently, African countries lose almost $90 billion in illicit financial flows annually, and much more in illicit resource flows and resource theft, poorly implemented fiscal policy incentives, and excessive dependence on commodity exports for foreign exchange earnings.
“This exposes countries to highly volatile global market prices and highly vulnerable supply chains. This situation is not acceptable,” he said.
Special Adviser to the President on Economic Affairs in the Office of the Vice President, Tope Fasua, said at the event that the AfDB’s efforts in responding to the public finance management needs must be sustained.
He also said the ADI has provided enhanced knowledge and capabilities among public officials working in critical sectors across the continent, which is hoped would improve financial responsibility.
In his valedictory speech, one of the PFMA graduates, Isaac Kurasha, reflected on the 18-month journey that began on March 2, 2022, and highlighted the rich experience and knowledge gained throughout the program.
“The training enriched my understanding of the public financial management cycle, providing insights into various components,” he said.
