May 30, 2016 By Jariatu S. Bangura
Members of Parliament have debated the Public Financial Management Bill 2016, which is geared towards improving the legal framework governing public financial management in the country, according to Farid Alghali, Legal Adviser in the Ministry of Finance and Economic Development.
During the pre-legislative discussion on the bill, Mr. Alghali sid the bill, if passed into law, would broaden the scope of budgeting in central government, in line with the International Monetary Fund and Government Finance Statistics Framework 2014.
He said the draft bill includes clear definitions of entities included in central government and the public sector, adding that it would strengthen the macro-fiscal framework by introducing fiscal responsibility principles and a fiscal strategy statement to guide fiscal planning and the medium-term budgetary framework.
According to him, the document would also help strengthen budget discipline by introducing firm limits on the amount of additional spending in excess of the approved budget.
“The bill will Increase the focus on measuring, monitoring, and managing fiscal risks by introducing an annual fiscal risk statement, establishment of a Treasury Single Account (TSA) and the Cash Management Committee and financial reporting, and auditing by aligning public sector accounting with international standards,” he explained.
He noted that the ministry, in collaboration with key stakeholders, including the International Monetary Fund and the World Bank, undertook an extensive review of the Government Budgeting and Accountability Act of 2005 (GBAA 2005) in order to improve on the legal framework governing public financial management in the country.
Consequently, Mr. Alghali said that as part of the process, several missions of the Fiscal Affairs Department (FAD) of the International Monetary Fund (IMF) were fielded into Sierra Leone from April 2013 to May 2014 to undertake a review of progress and to help identify issues in the legal framework along with priorities for reforms to be undertaken.
“If the bill is approved, it will improve Cash Management through the establishment of the Treasury Single Account and strengthened Cash Management Committee. This will reduce accumulation of arrears and short term borrowing costs, strengthen financial controls, accountability and probity in the utilisation of resources across government and a sound financial, economic management and governance of anticipated resources from extractive industries,” he said.
He maintained that the Bill had been developed in collaboration with the Law Officers Department and would be pivotal to the implementation of public financial management reform in ensuring good governance, in accordance with the Agenda for Prosperity (2013-2018).
Mr. Alghali added that other countries in sub-Sahara Africa have enacted or are in the process of preparing comprehensive PFM Acts with similar structure as the draft bill.
Chairman of the Oversight Committee on Finance, Hon. Hassan Sheriff of the ruling All Peoples Congress emphasised the importance of the Bill and urged his colleagues to make meaningful inputs to the draft document.