The novel coronavirus pandemic has put government systems across the world under stress. Governments have had to quickly and urgently respond with emergency response packages to support the economy and strengthen essential public services in key sectors, such as health care. In several countries worldwide, governments have already introduced broad and costly measures, making use of budget reallocations, and taking up new debts and pledges from multilateral agencies including the International Monetary Fund and the World Bank.
On 2 June, AFROSAI-E and the GIZ hosted a webinar to focus on the role Public Finance Management (PFM) systems and tax regimes, in enabling African governments’ responses to the Covid-19 pandemic and the resulting economic fallout. The online panel included members of the pan-African public finance networks on revenue mobilisation, budgeting, and legislative oversight, respectively. The webinar was attended by over 125 global participants. These were the key points from the discussion:
- In times of crisis, there may be deviations from normal procurement procedures which need to be transparently tracked. However, misuse of Covid-19 funds is not a given, as governments and institutions that commit to transparency and engagement at the outset of the crisis, sets themselves up for stronger accountability throughout their response and recovery.
- The coordination between Ministries of Finance and Ministries of Health is essential. The decision making between both ministries needs to be streamlined. The speed and transparency of procurement is key in ensuring that essential equipment gets to frontline workers in time, or for social security systems to be set up swiftly.
- The economic crisis we are witnessing now, results in significant decreases in revenues for governments. Easing up revenue collection to stimulate the economy, further reduces government income. The digital economy is one of the sectors least affected and most ineffectively taxed right now. There is a growing need to look at the behavior of multinational companies hiding taxes and how double taxation agreements affect African countries negatively.
- Towards ensuring that government stimulus packages for the economy are not wasteful, parliaments need to continue finding ways to convene during Covid-19. This should include furthering the cause for digital parliaments and enabling of digital meeting spaces.
- It is important to not only strengthen institutions individually, but strengthen the interlinkages, cooperation, and collaboration between different actors of public financial management. SAIs can contribute meaningfully by going beyond their usual mandate of ‘ex-post’ audits through the provision of ‘real time’ audits, which provide a meaningful opportunity in providing assurance and control in real time.
Our gratitude goes out to our panel members: Maurice Ochieng (GIZ Good Financial Governance in Africa Programme), Logan Wort (ATAF), Neil Cole (CABRI), Honourable Nathan Nandala (AFROPAC), Hassan Idi (AFROSAI) and David Robbins (IBP).
For more information and analysis of the webinar discussions, please contact the session moderator, Edmond B Shoko (AFROSAI-E) at firstname.lastname@example.org.