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Open Budget Survey P.B.O Analysis 1

PARLIAMENTARY BUDGET OFFICE

 

 

Analysis of the Open Budget Index with emphasis on Zimbabwe

 

 

 

 

 

       
    Rounded Rectangle: Disclaimer
The Parliamentary Budget Office (PBO) is a non-partisan professional office of the Parliament of the Republic of Zimbabwe. The primary function of the Office is to provide professional advice and objective in-depth analysis of fiscal and other economic policies.
 
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1.0       Introduction

The Open Budget Initiative (Initiative) is a global research and advocacy program to promote public access to budget information and the adoption of accountable budget systems.  The International Budget Partnership (IBP) launched the Initiative with the Open Budget Survey (OBS). OBS is a comprehensive analysis and survey that evaluates whether governments give the public access to budget information and opportunities to participate in the budget process at the national level. The IBP works with civil society partners in 100 countries to collect the data for the survey. The first Open Budget Survey was released in 2006 and since then has been conducted biennially.

In a bid to assess the commitment of the countries surveyed to transparency and to allow for comparisons among countries, IBP created the Open Budget Index (OBI) from the Survey. The OBI assigns a score to each country based on the information it makes available to the public throughout the budget process.

 

1.1       Budget Transparency and Accountability

The budget is a government’s plan for how it is going to use the public’s resources to meet the public’s needs. Transparency enables the country’s citizens to access information on:

§  How much is allocated to different types of spending

§  What revenues are collected

§  How international donor assistance and other public resources are used.

The IBP believes that open budgets can be used as an empowerment tool. People are able to judge whether or not their government officials are good stewards of public funds.

While providing the public with comprehensive and timely information on the government’s budget and financial activities and opportunities to participate in decision making can strengthen oversight and improve policy choices, keeping the process closed can have the opposite effect. Restricting access to information creates opportunities for governments to hide unpopular, wasteful, and corrupt spending, ultimately reducing the resources available to fight poverty. Since a significant amount of poverty-reducing expenditures take place at the sub-national level, the initiative also has begun a major new effort to support work on budget transparency and accountability at this level.

The most effective way of managing a national budget is through a system that is transparent, open to public engagement, and overseen by robust govern­ment institutions. High-quality and timely budget data helps government officials to plan and implement policies to improve the lives of citizens. Ensuring that budget data are in the public domain means that parliaments, supreme audit bodies and civil society can provide feedback and help translate policies into practice.

Budget transparency is a core component of good budget­ing. This is recognized by various public financial manage­ment (PFM) tools and standards, including the Public Expenditure and Financial Accountability Frameworks and the General Comment of the UN Committee on the Rights of the Child concerning Public Budgeting for the Realization of Children’s Rights (General Comment No. 19). Sound govern­ment budgeting is also crucial to achieve the Addis Ababa Action Agenda, the Sustainable Development Goals and the Paris Agreement, all of which require significant financial resources. These resources need to be monitored to ensure that they achieve maximum impact.

Accountable budgets rest on three pillars:

ü  Transparency

ü  Public participation

ü  Formal oversight.

Each of these pillars is essential to effective and accountable budgeting. The absence of (or weakness in) one pillar can undermine the entire open budget system. This can have an impact on the delivery of public services.

The three pillars should be in evidence throughout the budget cycle. The cycle typically consists of four stages:

§  Formulation by the Executive

§  Approval by the Legislature

§  Execution by the Government

§  Oversight by the Supreme Audit Institution (SAI) and the Legislature.

The 2015 survey showed that South Africa, Uganda, and Malawi provide substantial or extensive budget information. However, of these, only South Africa was solid on all three pillars. Uganda scored well for its supreme audit institution and Malawi for its legislature – yet both countries experi­enced gaps in the other accountability pillars. At the other end of the scale, 18 countries failed to meet the survey’s standard of adequacy on any one pillar, characterized by lack of budget transparency, weak legislatures, weak auditors and little or no opportunity for the public to participate in budget decisions.

 

1.2       The State of Budget Transparency in Africa

The Open Budget Survey 2015 highlights gaps in the amount of budget information that African governments make avail­able to the public (Figure 1). While recognizing that Malawi, South Africa and Uganda all published substantial amounts of budget information, the report also indicates limited budget transparency in the remaining 28 countries.

 

The survey measures budget transparency by capturing the budget information that is made publicly available in a timely manner. Countries are scored between 0 and 100 to deter­mine their ranking on the Open Budget Index (OBI).

Budget transparency partly rests on ensuring public access to eight key budget documents:

§  Pre-Budget Statement

§  Executive Budget Proposal and supporting documents

§  Enacted Budget

§  Citizens Budget

§  In-Year Reports

§  Mid-Year Review

§  Year-End Report

§  Audit Report

Rwanda and South Africa already make all eight documents publicly available. However, most governments in Africa (like many others worldwide) produce many budget documents that are either published too late to be useful for civil society engage­ment or are kept for internal use only. The survey established that countries could significantly improve budget transpar­ency and their OBS rating at little or no cost, through timely publication of existing documents.

The survey also revealed that even when budget documents are published, they often lack sufficient detail. The Executive Budget Proposal, for example, a core document prepared by all the African governments surveyed, on average included less than half of the expected information. Some govern­ments do not even publish this basic document. Publication of more detailed and comprehensive budget documents may be an issue of political will or a matter of government capacity which could be addressed by development or civil society partners.

 

 

 

 

 

 

 

 

 

 

Figure 1: Budget Transparency Score in Africa in 2015 (Open Budget Index)

Source: 2015 0pen Budget Survey

 

1.3       Trends in budget transparency in Africa

The Open Budget Survey was undertaken on five occasions in the last ten years (previous rounds were completed in 2006, 2008, 2010 and 2012). A sixth round has been carried out in 2016 for publication in 2017. Between 2012 and 2015, the average OBI score for the 30 African countries for which comparable data are available increased from 29 to 39 (Figure 2). The least transparent countries made the greatest gains – the OBI scores of the 19 African countries considered weak performers in 2012 had more than doubled by 2015.

 

Figure 2: Changes in Open Budget Index Scores from the Open Budget Survey 2012 to 2015

Source: 2012 and 2015 Open Budget Surveys

 

A key driver behind the transparency gains made between 2012 and 2015 is the increase in the number of documents made available to the public in a timely fashion. Among them 30 countries with comparable data, there was a net increase of 25 in the number of budget documents made publicly available between 2012 and 2015.

Since first being included in the survey, the number of African survey countries publishing Executive Budget Proposals has increased by 11, while nine more countries publish Pre-Budget Statements. Also of note is the fact that 15 more countries now publish Citizens Budgets.

The progress that African countries have made is important although many challenges remain, notably in maintaining consistency. OBI scores in seven countries have been volatile, going up one year, only to fall back later. Elsewhere, the pace of reform has often been slow and some countries have regressed, becoming less open.

Governments that have made progress have often done so by identifying the budget documents and information they are already producing for internal use and making these available to the public. In these countries, political will, in conjunction with other factors, such as donor support, international standards and civil society pressure, has yielded significant and rapid improvements in budget transparency.

 

1.4       Role and effectiveness of budget oversight institutions in Africa

The formal oversight provided by legislatures and supreme audit institutions plays a fundamental role in the budget process. While civil society can act as an independent watchdog, it cannot take the place of formal oversight bodies. Accordingly, the Open Budget Survey also provides separate scores for the strength of oversight that legislatures and supreme audit bodies are able to provide.

In 2015, the average score for legislative strength among those African countries surveyed was 42 out of 100. This is slightly below the global average of 48. Only seven of the 31 countries scored above 60, a threshold indicating that the legislature has adequate strength to execute its responsibilities. Legislatures in the remaining 24 countries were found to have weak or limited powers to engage in the budget process and fulfil their oversight responsibilities. Legislatures in about a third of the countries have less than six weeks in which to assess and debate the Executive’s Budget Proposal. In several African countries, the legislature either has no access to budget research capacity or else has to rely on external researchers.

 

Table 1: Legislative Strength in Africa from Open Budget Survey 2015

Legislative Strength

Countries

Adequate (61 or above)

Botswana, Malawi, Mali, Niger, Nigeria, Senegal, South Africa.

 

Limited (between 41 and 60)

Chad, Ghana, Kenya, Rwanda, Uganda.

 

Weak (40 or less)

Algeria, Angola, Benin, Burkina Faso, Cameroon, DRC, Egypt, Equatorial Guinea, Liberia, Morocco, Mozambique, Namibia, Sierra Leone, Sudan, São Tomé e Príncipe, Tanzania, Tunisia, Zambia, Zimbabwe.

 

 

Sources: UNICEF New York based on the Organisation for Economic Co-operation and Development (OECD) (for ODA) and the IMF (for government expenditure and GDP).

Notes: The sample includes 52 countries in continental Africa for which data are available.

 

The average score for supreme audit institution strength among the 31 countries surveyed was 49 out of 100 – well below the global average of 65. In a little over a third of the African countries, supreme audit bodies have established monitoring systems that are able to provide ongoing, independent evaluations of the audit processes. In many cases, supreme audit institutions do have some discretion in law to undertake audits as they see fit. However, in 13 of the African countries surveyed, the head of the supreme audit institution can be removed without the consent of the legislature or the judiciary. This undermines the independence of the institution.

 

2.0       Open Budget Survey 2015: The Case of Zimbabwe

In terms of transparency (Open Budget Survey) Zimbabwe was ranked 35 out of 100 meaning that the Government of Zimbabwe provides the public with minimal budget information. The ranking for public participation was 15 out of 100. The Government is weak in providing the public with opportunities to engage in the budget process. The budget oversight by the legislature (Parliament of Zimbabwe) is weak and ranked 21 out of 100. To make matters worse, budget oversight by the supreme audit institution (Auditor General’s Office) is also weak with a ranking of 33 out of 100.

 

Figure 2: Regional Comparison

Source: 2015 Open Budget Surveys

 

Zimbabwe’s score of 35 out of 100 is lower than the global average score of 45.

 

 

 

 

 

 

 

 

Figure 3: Change in Transparency over Time

Source: 2015 Open Budget Survey

 

Zimbabwe’s score of 35 on the 2015 Open Budget Index is higher than its score in 2012.

 

 

 

 

 

 

 

 

 

 

 

 

Figure 4: The Availability of Budget Documents Over Time

Source: 2015 Open Budget Survey

 

Since 2012, the Government of Zimbabwe has increased the availability of budget information by:

v  Publishing the Mid-Year Review.

v  Improving the comprehensiveness of the Executive’s Budget Proposal, although it still provides only limited information.

However, the Government of Zimbabwe has failed to make progress in the following ways:

v  Not making available to the public the Enacted Budget or the Audit Report, even though they are produced for internal use.

v  Not producing a Citizens Budget and a Year-End Report.

v  Publishing a Pre-Budget Statement that contains only minimal budget information.

 

The Survey is compiled from a questionnaire completed for each country by independent budget experts who are not associated with the national government. Each country’s questionnaire is then independently reviewed by an anonymous expert who also has no association to government. In addition, IBP invites national governments to comment on the draft results from the Survey and considers these comments before finalizing the Survey results. Research to complete the Open Budget Survey for Zimbabwe was undertaken by the National Association of Non-Governmental Organisations (NANGO). It is, however, worth noting that Government officials from the Ministry of Finance and Economic Development (MOFED), Parliament of Zimbabwe and Auditor General’s Office expressed their concerns on the lack of wider and thorough consultations in the research process. This was done during an Open Budget Survey workshop which was conducted by NANGO, UNICEF and IBP from 15 to 17 May 2017.

 

3.0          Recommendations

§  The Government of Zimbabwe should make sure that public financial management systems generate and utilize relevant knowledge and data throughout the budget process. Where possible, government actions to implement classification and monitoring systems, such as programme or performance-based budgeting, can enable the tracking of spending and results.

 

§  The Government should urgently increase the number and timeliness of budget documents published. The currently limited budget information should be improved by enhancing the level and variety of detail. All data utilized by the Government to make decisions should be made public. Moreover, civil society organizations and accountability actors, including legislators and auditors should cooperate to strategically advocate for greater transparency and to support Government efforts.

 

§  Good transparency practices should be institutionalized – for example, by embedding transparency practices in laws, rules and procedures. Civil society and oversight institutions (Auditor General’s Office and Parliament of Zimbabwe) should remain vigilant in efforts to ensure the Government does not waver in its commitment to transparent and accountable budget systems.

 

§  Civil society has a responsibility to analyze available budget data and seize on any opportunity for dialogue, as a basis for sustained advocacy for increasingly open budgets. It is highly recommended that the capacity of CSOs should be strengthened where possible.

 

§  All stakeholders in Zimbabwe should encourage the establishment of formal mechanisms for the public to participate in budget processes, and create ways to integrate these inputs into budget decisions. While any mechanism will need to be adapted to the country context, the innovative approaches documented by the Global Initiative for Fiscal Transparency (www.fiscaltransparency.net) provide governments with concrete examples of how budget participation can work.

 

§  All stakeholders should seek to improve legislative capacity to engage with the budget in a meaningful way, by supporting increased access to research and improved analytical capacity, as well as by establishing specialized budget offices. Zimbabwe has a newly- established Parliament Budget Office (PBO) so its capacity needs to be enhanced.

 

§  Securing the independence of and sufficient funding for the supreme audit institution (Auditor General’s Office) should be a top priority. In addition, supreme audit institutions should be given support to define procedures to monitor auditing processes and evaluate individual audits, with the goal of increasing the quality and reliability of the reports produced.

 

§  The key oversight institutions, Parliament of Zimbabwe and Auditor General’s Office, should increase the number of published reports on their websites for wider and enhanced public consumption.

 

4.0          Conclusion

The rankings for Zimbabwe in the 2012 and 2015 Open Budget Index are unimpressive and can determine the level of funding from non-governmental organization and world bodies such as the International Monetary Fund (IMF) and the World Bank (WB). However, the establishment of the Budget Office in Parliament as well as other recent initiatives such as sector specific pre- budget consultations by Parliament, should go some way towards improving the country’s ranking. It is hoped that the recommendations in this analysis will be adopted by the Parliament of Zimbabwe, the Auditor General’s Office, Ministry of Finance and Economic Development and other stakeholders for the benefit of our beloved nation. We all need to work towards the success of our nation through enhanced transparency and accountability.

 

 

 

 

 

 

 

 

Annexure 1: An African Picture of Transparency in 2015

 

Source: International Budget Partnership (IBP) and the United Nations Children’s Fund (UNICEF)

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