WINDHOEK, FEB 3– The Southern African Development Community Parliamentary Forum (SADC-PF) will soon kick off consultative meetings aimed at putting together a draft SADC Model Law on Public Financial Management (PFM) to heighten parliamentary oversight and boost transparency, openness as well as efficiency in the use of public funds in the region.
The SADC PF, through its Standing Committees, has identified various legal and regulatory gaps in PFM that weaken the public financial management system and impedes the State’s ability to address its national objectives as well as fulfill international commitments such as the Sustainable Development Goals (SDGs) and Universal Health Coverage (UHC).
“There are several legal and regulatory gaps across the SADC region that undermine the legislative, budgetary and oversight functions of Parliaments, therefore putting at risk the notion of sound public financial management and thus threatening the very existence of democratic institutions. It is trite that good governance, sound PFM, the absence of corruption and the rule of law are concepts that are inextricably linked and indissociable in the contemporary context. Around the world, it is well established that poor PFM can swiftly become the symptom of a failing democracy,” said SADC PF Secretary General Boemo Sekgoma.
These gaps include, amongst others, the narrow ambit reports under the scrutiny of Public Accounts Committees, the lack of enforcement powers by these Committees, the lack of enforcement of regulations on public sector debt, lack of performance-based budgets with clear key performance indicators, misuse of supplementary budgets and the lack of oversight by Parliament on the limitless quantum of public contracts that can be entered into by the Executive. Furthermore, there is a notable lack of alignment between the budget objectives and regional or international commitments ratified by the State.
For example, in all SADC countries, Public Accounts Committees do not have sufficient enforcement powers and in most cases, there is no follow-up action on their reports once tabled in Parliament. Also, in at least four SADC countries there are laws or administrative guidelines on the management of public debt, with ceilings such as 50-60% of the gross domestic product, but without any enforceable penalty if the ceiling is exceeded.
Furthermore, in at least five SADC countries the Public Accounts Committees are empowered to examine only the report of the Auditor General and not the audit reports of statutory bodies or public authorities. “This means that in case of mismanagement of public funds by statutory bodies, it is the board of that statutory body which is required to take action after receiving the audit report, and this audit report is not tabled in Parliament although Parliament may be allocating funds to that statutory body through the yearly budget,” said Secretary General Sekgoma.
Another issue of critical importance is the lack of information that accompanies the yearly State budgets. There is usually no requirement to report on the ways in which the budget is supportive of gender equality, the SDGs, UHC and how the budget integrates into other regional agendas such as Africa Agenda 2063. There is a need for budget documents to depart from a “purely accounting version” to a dynamic and living document, that is comprehensive and illustrative of developmental advancements made by the State.
The SADC Model Law on PFM thus seeks to revitalise and modernise the PFM frameworks of SADC Member Parliaments at a time when accountability by the Executive in the management of public funds has become an issue of central public significance. The Model Law will pave the way for a SADC region that is financially transparent, accountable and efficient, with Parliament exercising adequate and timely oversight over financial affairs of the State whilst remaining respectful of the sacrosanct principle of separation of powers. The Model Law will also address the need for legislation on cryptocurrencies which are likely to influence SADC economies and financial markets in the decades to come.
The drafting of the Model Law has been initiated by a legal drafter with expertise in legislative affairs who works under the close supervision of a Technical Working Group of Experts in PFM. Pursuant to successive meetings of the Technical Working Group, a working draft of the Model Law has been prepared. In order to make headway to finalise the draft of the Model Law, the SADC PF is scheduled to hold about 15 consultations with representatives of various stakeholders involved in the public financial management value chain including SADC ministries responsible for finance, Auditors General, Revenue Authorities, Attorneys General, financial intelligence units, police, prosecutors and civil society organisations, to name a few.
The first consultation session is on Tuesday, 08 February at 10 am with the Auditors General of the 15 SADC Member States that are affiliated to the SADC PF. Stakeholders are encouraged to respond to invitations and engage as actively as possible in view of ensuring that the Model Law is as inclusive as possible and reflects the expectations of the SADC citizenry. – SADC PF
