Kano and need for adopting PEFA for sustainable development

Feature Issue

Any state that is ready to embrace some reforms around its fiscal policy, it stands the chance of winning some substantial grants from world donor bodies, especially the World Bank, which is prepared to support development initiatives from across the globe.

cross-section of participant at the sustainable development

To achieve this success, a state must show commitment or preparedness in carrying out such reforms. And provided that such a state has a political will, a lot more incentives or assistance will definitely come its way, and the gesture will be an added advantage towards enabling it to execute more projects that will have direct bearing on the lives of its teeming citizens.

Such policies should be tailored, by a state, towards achieving fiscal transparency, accountability and sustainability in the management of its public finances through the use of what is known as Public Expenditure Framework Accountability (PEFA), an international instrument used to assess financial management system of a country or state.

Due to the realisation of the need to adopt the above framework, Kano State Government, in collaboration with UKaid DFID-PERL (Department for International Development – Partnership to Engage, Reform and Learn) recently organized a three-day focal group discussion all the way in Kaduna, the capital of Kaduna State, on ‘Public Financial Management (PFM), Rapid Annual Assessment (RAA) and State Fiscal Transparency, Accountability and Sustainability (SFTAS) Assessment.’

DFID-PERL Consultant, Mr. Timothy Effiong made a lead presentation on the PFM, RAA Framework, which he said DFID uses it to know the state of a state’s financial system through 28 indicators from PEFA, using the international World Bank tools.

Mr. Effiong said PEFA framework has a link with Fiscal Sustainability Plan (FSP), being adopted at both federal and state levels of governance and assessment methodology, which deals with timing and environment for the assessment among other things, adding that in carrying out the assessment, scoring of clusters should be done objectively and not personally, stating further that it should be based on technical finding, stressing that cluster owners should monitor activities and implementation of the budget.

He said the general principle in PFM is to mention specific things targeted in the action plan.

The workshop was a rigorous exercise, where participants debated appropriately and objectively before scoring an indicator and it involved reforms or review in nine sectors of the state, namely; education; health; agriculture; environment; water; transport; commerce; women, youth and people with special need; and infrastructure respectively.

Reviewing day one on day two of the event, the Director of Planning in the state Ministry of Planning and Budget, Malam Mukhtari Ado Yakasai, said through the PFM framework, cluster owners were identified and a review of indicators used to assess the state’s financial management was carried out.

He gave the clusters as nine, with 72 indicators to include: fiscal performance, which has 20 indicators; budget preparation, 10 indicators; budget execution, eight indicators; internal revenue, four indicators; accounting and reporting, eight indicators; audit, three indicators; debt management, six indicators; institutional and legal framework, six indicators; and openness and transparency with seven indicators respectively.

On day two, the focus was on assessment of clusters five, accounting and reporting; six, audit; seven, debt management; eight, legislative and institutional framework; and nine, openness and transparency. This is in addition to assessing cluster one, fiscal performance as well as doing another exercise of reviewing the scoring and validation of the clusters.

Mr. Effiong also led the exercise on the day with strong emphasis on the need for consistent audit in the state with a view to meeting with the international best practices, adding that governments all over the world have been mandated to develop citizens’ budget in a very simple language for its better understanding or even using local language to translate it to the citizens such as using Hausa to achieve the purpose, stressing that in every quarter of the year, there is need to produce budget performance report regardless of whether releases or no were made as it is a new practice with SFTAS, explaining that each report should be a separate one.

According to him, the state did very well during the review period in revenue with 62.1 per cent proportion of recurrent revenue funded by Internally Generated Revenue (IGR), showing that the state can survive on its own through the success it recorded from the IGR even without federal allocation.

In the area that needs improvement, he suggested for a deliberate engagement between the state Ministry of Planning and Budget and the state House of Assembly towards achieving the set objective of making the budget reasonable or realistic.

He said the state requires only 2.7 per cent to hit donor target in the 2019 budget as it already scored 67.3 per cent in 2018 fiscal year performance.

That is to say that its expenditure out-turn compared to original approved budget stood at 67.3 per cent, meaning that it remains only 2.7 per cent to earn SFTAS grant – even though it is associated with a lot of challenges, as all stakeholders, such as the state ministry of finance, that of budget, the state assembly, the Office of the Accountant General and that of the Auditor General must synergise to make the gain happen.

On day three, the presentation centered on status of SFTAS preparation, its overview, assessment, and review of its scoring and action plan.

However, a lot of deviations between the state actual budget and its result performance were noted and that a lot of emphasis was made on the need for the state not to under estimate projects or over estimate them while projecting revenue in the budget, a trend understood to be inimical to the budget. That is, over budgeting of capital expenditure is a serious issue which makes the budget not realistic and the state was urged to always do a budget that can be implemented so that it can stand the chance of accessing money from donor organizations.

Malam Ibrahim Abbas is the officer in charge of Sub Treasury at the state Ministry of Finance, who made a presentation on ‘SFTAS Assessment’ where he highlighted that for any state to assess performance-based grants, it must among other things do the following:

That is, it must achieve the eligibility criteria; provide data and evidence of achievement to the Independent Verification Agent (IVA); increase openness and citizens’ engagement in the budget process; improve cash management and reduce revenue leakages through implementation of Treasury Single Account (TSA); strengthen IGR collection; embark on biometric registration and bank verification number (BVN) to be used to reduce payroll fraud; improve procurement practices for increased transparency and value for money; strengthen public debt management and fiscal responsibility framework; improve clearance/reduction of stock of domestic expenditure arrears; and improve debt sustainability.

In an overview of the assessment, Mr. Effiong had to use the opportunity to advise that officers below the levels of directors or deputy directors should be trained or allowed to be participating in such workshop for better reform sustainability, noting that officers trained in similar areas previously have since retired and gone away with the idea, thus leaving a vacuum in the service.

He hoped that in the next four years, the state can develop a culture of realistic budget, urging the state to take the eligibility criteria and see what can be done to achieve the goal of getting grants from the World Bank, as a donor agency.

 

On his part, another PERL Consultant, Malam Abbas Muhammad, who earlier told the gathering, in a welcome remark, on why they were there, said the purpose of the event was to carry out an assessment of financial management system of the state, describing management as very fundamental to the state development, “because it is about budget and planning, including the execution of the budget,” he added.

He said the event looked at how the state’s financial resources could be managed in such a way that its citizens enjoy maximum benefits, adding that it would also help the state to adhere to good practices in budgeting in terms of preparation and execution.

“If the budget is prepared very well in such a manner that it takes into account the priorities of government as well as a realistic estimate of revenue, then it will be considered as a good budget.

“The emphasis is that a budget has to be as realistic as possible; that is, government should plan a budget that is realistic as in cutting its clothe according to its size. It has to be very realistic in estimating the resources of revenue, including the loans – they should flow in the budget. Realistic estimate of revenue is the foundation of a realistic budget.

“In terms of execution of the budget, good practices should be in orderly manner so that spending agencies can predict when money would be made available to execute their budget. It has to be predictable and in orderly manner so that agencies can predict funds to execute projects,” Malam Muhammad disclosed.

He said after the event, participants would leave its venue with a position of the state as far as financial management is concerned.

Responding to some issues raised at the event, the state Acting Auditor General, Alhaji Sale Sa’ad, promised to do the needful towards ensuring that the state benefits from the World Bank grants.

Earlier in their separate welcome addresses, the state Commissioner of Finance, Alhaji Aminu Mukhtar Dan Amu, represented by the Permanent Secretary, Special Duties at the Office of the Secretary to the State Government, Alhaji Baballe Ammani and the Chairman of the state House of Assembly’s Committee on Appropriation, Hon. Tasiu Rabiu Panisau, declared the workshop open and urged the participants to listen to the various presentations attentively for them to garner experience from it, thanking the development partners for their support.

Speaking to The Triumph, the state Commissioner of Finance, Alhaji Aminu Mukhtar Dan Amu, who later joined the participants at the workshop on day two, lamented that lackadaisical attitudes on the part of civil servants have affected the state, thus making it to be left behind even though it was ahead of many in the past, reiterating that the administration in the state was doing everything possible to bring about changes to these attitudes or on the way things are done for its betterment.

The commissioner said the Ganduje administration in the state was ready to support them on the reforms needed in the public financial management, adding that it was keen in supporting them to get the grants from the World Bank, stating that they have already identified key institutions and focal persons to do the job.

He said as a member of the state Executive Council, he would do everything possible to make sure that the state benefits from the World Bank’s grants.

In a related development, the member representing Ungogo Constituency in the state House of Assembly, who doubles as the Chairman, House Committee on Appropriation, Hon. Tasiu Rabiu Panisau, similarly told The Triumph that he was happy and grateful with the conduct of the workshop, stressing that he would extend a very good relationship with his colleagues towards ensuring that the budget is made realistic, explaining that the next year’s budget would be passed before the end of this year, pledging to do their best, as lawmakers, not to overshoot the budget in its review process.

In a similar vein, the Special Adviser to the State Governor on Revenue, Hon. Habibu Sale Muhammad Mai-Lemo, the immediate past chairman of Fagge Local Government Area of the state, thanked the organizers for their dedication and foresight towards the conduct of the event, noting that the workshop was intended to ensure that the state has financial discipline.

“The forum allows the state to move towards having financial discipline and achieving all the requirement of World Bank’s grants.

“It is also to give advice on how to improve revenue service in the state. We realize the importance of sharing information together in order to have a synergy between relevant agencies, like finance and budget, including the state House of Assembly in order to be able to sit together to discuss issues of interest in terms of economic prosperity of the state,” he told The Triumph.

According to him, the workshop will propel his performance towards giving advices for better revenue services in the state.

A traditional title holder in the state, Alhaji Garba Muhammad, the village head of Rogo Ruma, said generally the workshop was satisfactory in the sense of the attendance, noting that all participants kept rapt attention, stating that at its later stage, the presence of commissioners of finance and planning and budget as well as the chairman, appropriation committee of the state assembly and other top government functionaries added weight to the event as progress was made to filing necessary reforms in the state fiscal activities right from budget circular to improvement of payment of contractors and local debt.

He said the meeting recalled that a debt office should be created in the state to go in line with what is being practiced at national level and other states of the federation.

He thanked DFID-PERL for taking significant part in making the workshop a reality.

Also, a member of Civil Society Organisations in the state, Malam Aqibu Hamisu Garko, who if the Programme Coordinator, Kano Budget Partners, which is a platform advocating for citizens’ participation in budgetary process, said the workshop was useful to them in understanding the best practices to manage the state resources along its transparency, accountability and sustainability framework.

Malam Garko added that the workshop would help them to measure the performance of the budget based on the SFTAS indicators.

He said it also enabled them to know the current status of financial management from all the financial institutions like the finance ministry and the Kano Internal Revenue Service (KIRS), adding that it again served them with the necessary tools/materials to improve on their tracking and monitoring exercises.

In their closing remarks, Malam Auwalu Hamza, the State Reform Manager with PERL in Kano and the state Commissioner of Planning and Budget, Hajiya Aisha Jaafar Yusuf, expressed delight with the event.

Malam Hamza used the opportunity to advise civil servants in the state to take advantage of the workshop to add value to their day-to-day services, adding that they should take it as a responsibility to share the knowledge they learnt with their colleagues for better efficiency of the service, urging the participants to take advantage of the various reforms at the workshop towards moving the state forward.

He urged government officials to see PERL as a mirror to help the state develop, advising political appointees to make themselves accessible and online, thanking stakeholders for their cooperation to them.

Appreciating the key stakeholders of the session, especially PERL, for their support to anything around budget and planning, the commissioner in the ministry, Hajiya Aisha Jaafar Yusuf, said she learnt a lot from them.

The commissioner assured of going to use all the advices given at the workshop to tackle the challenges raised there.

She specifically thanked the Consultant, in the person of Mr. Timothy Effiong for a job well done, thanking members of the state Assembly for their cooperation and synergy with her ministry.

“If not for the support of PERL and technical officers, the success recorded by the ministry wouldn’t have been possible,” she said, urging PERL to continue to advise the ministry more for better reforms.

She urged senior civil servants in the state to be drawing junior officers closer to them for continuity and sustainability of the service.

Participants were drawn from the state Ministries of Planning and Budget, Finance, Local Government, and Office of the Auditor General, SSG’s Office, the state House of Assembly, Internal Revenue Service, Due Process Bureau, and Computer Center, as well as development partners, civil society organizations, traditional institution and the media.

By Muhammad Hamisu Hamisu

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