Transparency, accountability key to growth, says director-general

By Ethel Hazelhurst Time of article published May 10, 2012

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Ethel Hazelhurst

At a time when sound fiscal management is top of the global agenda, accountability and transparency in government are critical, according to Lungisa Fuzile, the director-general of the Treasury. Fuzile was speaking at the opening session of a three-day gathering of senior budget officials from more than 30 African countries in Centurion yesterday.

The event was arranged by the Collaborative Africa Budget Reform Initiative (Cabri), a network set up in 2004 to strengthen the capacity of African countries to manage their public finances. Seminars are held annually to give officials the opportunity to share experiences and information.

In an opening address, Fuzile said many countries across the globe, “developed and developing, rich and poor”, were struggling to achieve growth, provide employment and expand their tax bases to “lay the foundations for fiscal consolidation and prepare to face the future”.

He was referring to the dilemma of countries which had allowed budget deficits to balloon and debt levels to soar to support their economies during the global recession of 2008/09. Governments in many countries have recently resorted to austerity measures to restore their budget deficits to more sustainable levels.

Fuzile noted the latest casualty of the unpopular spending cuts was former French president Nicolas Sarkozy who lost the election to his socialist rival François Hollande.

While Africa’s deficit and debt problems are not of the same order as those in Europe, governments are trying to conserve resources and rebuild buffers against potential future problems.

“At a time like this, Cabri’s vision of promoting efficiency and transparency in the use of public resources has become even more relevant.”

He said, although Africa had proved resilient during the crisis, and was registering strong economic growth, “if you take into account the development deficit, we can’t afford to be complacent”. “In our quest for better service delivery and economic growth and development in Africa, it remains vitally important for public finances to be managed with integrity, transparency and accountability.”

Fuzile argued that crises “present opportunities for tough reform”. “It is at times when governments are facing tight budget constraints that they are open to reforms that seek to ensure every cent spent is accounted for.”

He said, faced with the challenges of limited resources countries (and) governments were turning to programme- and performance-based budgeting. “Over the past decade many African countries have moved away from activity-based or line-item budgeting as a tool for resource allocation in expenditure.”

Line-item budgeting provides little information on policy objectives while programme- and performance-based budgeting link planning to budgeting. Fuzile described the latter as “information intensive” and stressed the need of good financial data and also data on performance.

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