Presentation by: PFEM Secretariat Ministry of Finance MALAWI

Outline
Introduction

PFEM Reform Roadmap

Drivers of the Reform Process Good Practices

Achievements
Challenges Success

Road ahead

Introductions
PFEM Reforms aim to improve, strengthen, or change

the PFM system;

The objectives of the reforms are to achieve: fiscal discipline; efficient allocation of resources towards national strategies; and ensuring value for money The ultimate goal is to ensure effective and efficient

public service delivery. PFEM Reform process is complicated as it involves a wide range of stakeholders

PFEM REFORM ROADMAP IN MALAWI

In 2001 the Country Financial Accountability Assessment

(CFAA) was with the assistance of the World Bank to identify accountability issues and risks The recommendations of the assessment formed the basis for the development of the Malawi Financial Accountability Action Plan (MFAAP) in 2003 MFAAP had a purpose of coordinating initiatives aimed at strengthening financial accountability. The MFAAP had 52 initiatives covering Central Government, Local Governments, Parastatal.

PFEM REFORM ROADMAP IN MALAWI Contnd

The action plan was organized in 5 themes:
budget preparation; implementation and expenditure control; accounting and reporting; procurement; external oversight ; and private sector

For effective progress monitoring of the AP, the

MFAAP Technical Committee was established

PFEM REFORM ROADMAP IN MALAWI Cntnd

The first PFEM Action Plan 2006-08 on the MFAAP, was

developed to coordinate activities across the PFEM cycle MFAAP TC was changed to be PFEM TC Progress in PFM was made especially regarding the implementation of the IFMIS and enactment of the: public procurement, Audit and Financial Management Acts in 2003 Second PFEM Action Plan aligned to the Malawi Growth and Development Strategy (MGDS ) developed in 2008 The Action Plan had 130 actions points and difficult to monitor

PFEM REFORM ROADMAP IN MALAWI Cntnd

It was hence revised in 2009 and had 39 actions for

implementation between 2010-11 In 2010 the Ministry of Finance through functional review established a PFEM Unit responsible for

coordinating, Facilitating; and monitoring implementation of PFEM reforms

In June 2011 Government developed a comprehensive

reform programme covering all key PFEM Institutions

PFEM REFORM ROADMAP IN MALAWI Contnd It covers issues of;

Planning and Policy Analysis,
Resource Mobilisation, Budgeting, Procurement, Accounting and Financial Management, Cash and Debt Management, Parastatal Financing, Monitoring and Reporting, External Audit and Programme Management

Government priority identifies projects to be funded

under the programme

Drivers of the Reform Process in Malawi

Government with Development Partners established a

multi-donor trust fund Development partners have worked with Government in PFM reforms through;
Undertaking Studies and Assessments to inform areas

which need reform provision of Financial support

Government has driven the reform process by Undertaking relevant PFEM analyses implementing the recommendations Putting in place relevant structures providing other resources for PFEM projects

 Government Leadership in the PFEM reform process for

Good Practices

ownership and ease of institutionalisation of the reforms

Government chairs all PFEM committees in Malawi

Use of PFEM AP indicators for conditionality PFEM Reforms are complicated hence require a

comprehensive programme like the PFEM RP PFEM Reform is on-going and requires well established implementation structures Relevant stakeholders are highly involved through regular meetings

Achievements
Improvements had been observed in some areas of

PFEM as evident by movements in PEFA scores in areas of;

Budget classification and comprehensiveness where

Malawi mover from B in 2008 to A in 2011 Effectiveness of payroll controls from C+ to B+

Challenges
Complicated PFM systems which requires advanced

coordination skills
relevant capacity being built in the PFEM Unit

Lack of commitment by PFM Institutions Requires an understanding of change management Poor Coordination in the early stages PFEM Unit is now in place and this has been solved Resource constraints as PFEM reforms dont achieve quick wins so funding gaps are usual

Success Stories
Comprehensive PFEM RP developed with Government

Leadership Multi Donor Trust Fund established as a funding vehicle to ensure complete funding of all the components Relevant structures institutionalised to ensure smooth implementation of PFEM programmes
(including; PFEM SC, PFEM TC, TWGs and the PFEM

Unit)

Moving Forward
PFEM Secretariat to function beyond coordinating To be involved in initiating and spearheading reforms

Thank You