SA has most transparent budget process

Published Feb 22, 2011

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South Africa comes top in at least one global ranking. According to Kevin Lings, the economist at Stanlib, a survey of 94 countries which takes place once every two years has ranked the country’s national budgeting process first in terms of transparency and accountability.

The countries included the UK, US, Sweden, Norway, Germany and the Bric countries – Brazil, Russia, India and China.

South Africa’s ranking is in contrast to its performance on the World Economic Forum’s global competitiveness index, where it was placed 54th out of 139 economies in the 2010/11 survey; and the World Bank’s ease of doing business survey benchmarked to June last year, which placed it 34th out of 183.

“The international open budget survey is the world’s only independent and comparative measure of budget transparency,” Lings said.

The criteria used have been developed by the International Monetary Fund, the Organisation for Economic Co-operation and Development and the International Organisation of Supreme Audit Institutions.

“The average open budget index score for the countries surveyed last year is 42 out of 100. South Africa received a score of 92,” Lings said.

An open budgeting process provides citizens with enough information to understand their national budgets and, according to the report, only 20 of the 94 governments achieved this objective, scoring above 60. About a third of the countries provided some information but less than required. And 41 countries provided “acutely inadequate” information.

Lings said South Africa’s budget process “has improved dramatically over the years, especially after Trevor Manuel became finance minister”. Manuel became finance minister in 1996.

His successor, Pravin Gordhan, had improved the process further, said Lings.

“The documentation has become consistent, transparent and rich in detail, something that was completely lacking prior to 1994,” Lings said.

But he pointed out: “Unfortunately a transparent budgeting process is a necessary but not sufficient condition for effective government.

“Once National Treasury has allocated the funds and set the key expenditure priorities, it is up to each department to deliver an acceptable outcome using the funds available. That is clearly not happening, especially in key areas such as education and health care, but also within many provinces and municipalities.” - Business Report

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