What are the similarities and differences between French and French-inspired Public Expenditure Management (PEM) systems? How do Francophone country systems differ and does the French PEM system suit Francophone Africa? This International Monetary Fund (IMF) working paper undertakes a cross-country study to answer these questions as well as highlighting which PEM areas are priorities for technical assistance (TA). Among the African countries themselves, there are many common features but also marked differences in audit and external control.
There are strong similarities between French and French-inspired African PEM systems in terms of the legal setting, rules and procedures. Although historically they borrowed heavily from French budgeting systems, francophone African countries have departed from the original model in practice. However, African countries still refer to their French legacy, whereas France itself is moving toward a new budgeting system.
There is a need to strengthen two areas where differences between PEM systems in francophone countries and the reference are most pronounced; firstly, accounting and reporting which would benefit from computerised systems, treasury balances and monthly fiscal tables. Secondly, auditing and external control which can be achieved through a more critical involvement of parliament and the creation of truly independent audit offices. Other findings show:
- African countries in the sample share roughly 57 to 74 per cent of the PEM features with France. Benin is the closest to France, followed by Cote d’Ivoire. The Congo and Togo are the most different.
- Except for Togo, West African Economic and Monetary Union (WAEMU) countries are closer to the reference model, France, than other countries.
- PEM weakness is not just a francophone problem, but a more general African one.
- TA should consolidate noticeable progress in countries such as Benin, Mali, and Niger due to the degree of similarity to the reference model.
- The Republic of Congo, Togo, Guinea and Chad show pronounced weaknesses in PEM. Therefore TA delivery should have a national focus, as improvement of PEM remains a fundamental problem.
There are many common weaknesses of African PEM systems, in particular the lack of human and technical capacities. However solutions do not always lie within the public finance sphere and additional policy factors to be addressed include:
- The lack of institutional continuity. Institutional memory is often flimsy, whole accounting systems can depend on a few individuals, reforms die out as people are replaced.
- Civil war is the biggest driver of instability, for instance in the Republic of Congo which had to rebuild its budget memory since files had been destroyed or lost.
- The lack of public scrutiny. Information is not made available to the public, governments display little accountability and there is an absence of external audit. Hence, transparency remains problematic.
- The privatisation of public finance. Budget choices do not necessarily reflect national priorities, but personal preferences of the ruling class.
- The lack of political commitment and ownership. Government building or reform is a pre-requisite for sound budgeting and PEM systems.
