Public Financial Management forum launched


…change management, results to be prioritised

In order to maximise the current Public Financial Management strategy’s (2022 – 2026 PFM Strategy) potential, it is crucial for all relevant stakeholders to promptly implement change management strategies. These strategies should focus on fostering a positive attitude and prioritising results.

This view is from a pair of key experts who spoke at the National PFM Forum launch co-organised by the Institute of Chartered Accountants of Ghana (ICAG) and PricewaterhouseCoopers (PwC), where they emphasised that the success of this strategy is pivotal to Ghana’s development.

The event, which brought together key stakeholders and had as its theme ‘Strengthening PFM for accelerated national development’, is aimed to shed light on the importance of utilising legislation and systems to their full potential.

World Bank Lead Public Sector Specialist, Furqan Ahmad Saleem, while lauding strides the nation has made in reforming its PFM and citing Ghana’s framework as an example for other nations, stressed that a lot must be done to improve on outcomes of the 2015 to 2020 Strategy.

“I want to draw your attention to the significance of change management in this process. Implementing new legislation and systems is just the beginning. Here we have had the PFM Law, Audit Law, etc., and other systems like the Ghana Integrated Financial Management Information System (GIFMIS), electronic government procurement, etc. But then comes the most difficult stage; we have to make good use of these systems, and I can get into details about how we have the best systems but are not using them in the best way possible,” he explained.

“This is difficult, because formulating the policy is within a controlled space… 

“Ghana has a state-of-the-art PFM, but when it comes to functionality – that is, outcomes – it is about changing variables, changing behaviours, attitude, and how to use the system, not only the mandatory fields but the optional ones. How do we analyse the data before issuing a contract, etc…,” he added.

Mr. Saleem contended that modern PFM implementation now revolves around data science, seeking outliers and identifying the best performers who can serve as role-models. The World Bank official noted that this aspect was not sufficiently addressed in previous strategies, which predominantly focused on technology and systems. However, the new strategy offers an opportunity to work on behaviour and attitudes, thereby aligning outcomes with desired goals.

The urgency for change management became apparent when Mr. Saleem shared his concern about the prospect of waiting for another 20 to 25 years for reforms to be fully implemented in Ghana.

“When I came to Ghana, we were hearing of reforms for another 20 to 25 years and I asked: do you want to wait for another quarter of a century for the reforms to be complete? The answer was clearly, no,” he noted.

He expressed confidence that achieving the set targets within five years will propel Ghana toward upper-middle-income country status on a sustainable development trajectory.

“If we can achieve our targets, I am confident that in five years’ time Ghana will be recognised as an upper-middle-income country on a sustainable development path. This accomplishment will be a testament to our collective efforts and commitment to the betterment of our nation,” he added.

On her part, Deputy Minister for Finance, Abena Osei Asare, stated that robust public financial management (PFM) reforms were highlighted as a crucial factor in building a resilient national economy.

With the nation’s Tax-to-Gross Domestic Product (GDP) trailing its sub-regional peers at 13 percent versus 18 percent, she stressed that the current Strategy is placing particular focus on domestic revenue mobilisation (DRM) as a vital aspect of Ghana’s economic development. This disparity highlighted the need for concerted efforts to improve this metric and raise sufficient finances to support Ghana’s economic growth and stability.

The deputy minister added that ongoing reforms are primarily centred on the transparent and accountable management of public funds, encompassing their generation, expenditure, accounting, reporting and scrutiny-  adding that an improved PFM system is an essential ‘public good’ that benefits all citizens.

“It is a commodity whose benefits or costs are non-exclusionary to all citizens. We must therefore together simply harness and deploy its strength to benefit us all… realising an opportunity for doing this, and to fast-track the implementation, government successfully negotiated for the inclusion of key components of this new strategy in the planned reforms needed under the IMF programme,” she explained.

Prioritising the collection and effective utilisation of domestic revenue, she added, was not a choice but the only viable option to support Ghana’s economy and ensure its long-term sustainability.

The journey of public financial management reforms in the country began two-plus decades ago with the PFM Reform Programme (PUFMARP) in 1997-98. This was followed by implementation of the Short-Term/Medium-Term Action Plan (ST/MTAP) from 2006 to 2009. Subsequently, the Ghana Integrated Financial Management System (GIFMIS) was introduced and implemented from 2010 to 2014. The most recent phase of reform was the Public Financial Management Reform Project (PFMRP), which took place from 2015 to 2020.

Despite the Finance Ministry touting the previous Strategy’s success – stating “The implementation progress of the 2015- 2018 Strategy showed that 86 percent of all its agreed interventions have either been completed or at various stages of completion” upon launching the current run, there has not been a shortage of criticism.

A Fiscal Recklessness Index report published by Imani Africa last year faulted the effectiveness of reforms under the last PFM Strategy, as the nation lost GH¢13.9billion to financial irregularities by Ministries, Departments and Agencies (MDAs) between 2015 and 2020.

Concerns were heightened when the last Auditor-General’s report revealed that more than 70 percent of public funds continued to exchange hands outside the centralised accounting framework – GIFMIS.

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