Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
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<strong>Public</strong> <strong>Financial</strong> <strong>Management</strong> <strong>for</strong> <strong>PRSP</strong> Implementation in Malawi<br />
to adhere to its budget. This is a noteworthy turnaround from experience in<br />
previous years” (IMF 2005).<br />
Shortly after the new government was elected, a number of measures were<br />
taken as symbolic steps to indicate commitment to budgetary discipline and<br />
sound debt management. One such step was moving government offices from<br />
Blantyre to Lilongwe. In addition, to limit travelling expenditures, approval<br />
procedures <strong>for</strong> travels made by ministers and PSs were transferred from line<br />
ministries to the Office of the President.<br />
In an attempt to improve cash planning in line ministries, the treasury gave<br />
back the responsibility of utility costs to line ministries, from which it had<br />
originally been taken away to avoid accumulation of arrears. This measure<br />
includes sanctioning mechanism, withholding cash transfers in case of new<br />
arrears.<br />
The new government also introduced a sanctioning mechanism in order to<br />
achieve better budget control at local level. The new <strong>Financial</strong> Reporting<br />
Guidelines <strong>for</strong> Local Authorities state that funds <strong>for</strong> local authorities may be<br />
withheld in case financial reports are not submitted to the NLGFC on time.<br />
Finally, funding was increased <strong>for</strong> the National Audit Office (NAO) and Anti<br />
Corruption Bureau (ACB). The initial anti-corruption drive saw a number of<br />
senior officials, including some <strong>for</strong>mer ministers, arrested. Yet, the most<br />
prominent case was the one of Minister of Education Yusuf Mwawa, who in<br />
May 2005 was dismissed and later convicted <strong>for</strong> using government funds <strong>for</strong><br />
a private wedding celebration.<br />
However, most elements of the old system of inappropriate power distribution<br />
and perverse incentives remain in place. In addition, during the field<br />
research most observers agreed that the current political commitment depended<br />
heavily on very few people at the top, above all the new President and<br />
the Minister of Finance. This created a certain degree of uncertainty about the<br />
sustainability of the apparent commitment to sound PFM of the new administration.<br />
Even a genuinely well-intentioned President, within such a system,<br />
may lack support and may be threatened by a coalition of those who previously<br />
profited from the old system (IDD and Associates 2005, 28).<br />
The role weak political commitment might still play in creating a parallel<br />
PFM system of in<strong>for</strong>mal rules and procedures in Malawi should thus not be<br />
underestimated. Nonetheless, the evidence collected and observations made<br />
during the field study suggest that at this time, the absence of political will to<br />
German Development <strong>Institut</strong>e 123