“DRIVE FOR IMPROVED SERVICE DELIVERY” LAUNCH OF THE PFM REFORM STRATEGY on 28TH AUGUST 2014 Speech by Mr. Udo Weber, Head of Development Co-operation, Embassy of Germany Right Honourable Prime Minister Amama Mbabazi Honourable Minister of Finance Maria Kiwanuka Members of Parliament Ambassador of the European Union, Mr. Schmidt Representatives of the Government of Uganda My Colleagues from the development community, Ladies and Gentlemen, Germany has been the co-chair of the PFM Development Partners Group since 2011. In the past years we have been continuously involved through the advisors and experts of KfW and GIZ in the discussions on how to improve public financial management in Uganda. Today’s official launch of the new PFM Reform Strategy constitutes a milestone in this process. I am therefore happy to address you today as the outgoing chair of the development partners group and on behalf of German development co-operation in Uganda. First, I would like to thank Ambassador Schmidt for his friendly words and for the willingness of the European Union to take over the role of chairing the DP Group in the future. The launch of the PFM strategy which GoU has developed mainly with in-house capacity is the right moment for us to hand over to the EU, as it marks a clear turning point in the approach of the GoU. I am very confident, that under the EUs leadership, the DP group will remain a strong pillar of support for the governments PFM reform agenda. As the outgoing chair, I wish to thank our fellow development partners and the relevant government institutions – first and foremost the ministry of finance – for their trust, support and good cooperation in the past three years. The German contribution to FINMAP started as a supporting measure addressing fiduciary risks of general budget support. The current strategic interest of Germany in strengthening national systems is to enhance the capacities for public investments which we also are co-financing e.g. in the energy and water sector. Leaving the chair of the DP Group does not mean, that Germany will withdraw from its support to the PFM sector. The opposite is the case. Just last week KfW signed the financing agreement for the second Phase of FINMAP with a volume of 11 Mio. EUR. This brings Germany’s commitment to 14 Mio. EUR. Today’s occasion, Ladies and Gentlemen, is about Uganda’s achievement in developing a new PFM strategy that is now about to be launched. This new strategy is sufficiently broad and is meant to lead all Government initiatives, programs and projects which aim to ensure efficient, effective and accountable use of public funds. Congratulations for reaching this mile stone. The way to this point was not always smooth and without challenges. Many of my colleagues still remember the last weeks of 2012 and the so called “OPM Scandal” and its aftermath. Well before that it was the expenditure around the commonwealth summit and more recently the loss of funds through NAADS. Many cases are pending or still not brought to a court of law. I can speak for all development partners, when I express my hope for seeing more progress in the resolution of these outstanding cases. Development partners have always been critical in the past – and will continue to be so in the future, when the mismanagement of public funds becomes known. Still, like everywhere else, also in Uganda each scandal brings an opportunity for improvements and for dialogue. As chair of the PFM working group our focus in the dialogue between DPs and GoU was to assure that the PFM reform programme FINMAP is setting a good example and spearheads the implementation of the PFM reform agenda, by applying national systems and innovations like • integrating the work plans into OBT and the national budget • using IFMS in its full capacity for financial management and reporting • developing procurement plans in line and in due time with the work plans Just to mention some of the aspects we have been following up with GoU to improve the implementation and management of the FINMAP programme. During that time FINMAP was also crucial for supporting the implementation of the HLAM which GoU initiated to address, among others, weaknesses in the PFM systems that were revealed by the OAG in the cases of OPM and MoPS. Only the EU and KfW at that time were able to disburse to FINMAP during the suspension of budget support and therefore to contributed to the implementation of the measures to close some of the existing gaps. When we took over the coordination of the PFM working group, the main focus was steering the implementation of FINMAP. By opening up the membership to TA programmes and other interested institutions we reached a broader discussion on PFM issues. The step we have not taken so far and which I was encouraged to hear about in the speech of Ambassador Schmidt, is the involvement of Civil Society Organisations and the private sector. Here we should follow the example of MoFPED who actively involved CSO for example at the last Sector Performance Review of the Accountability Sector. Just this month, the Sector Performance Review made us aware of the considerable improvements that can be seen in the accountability sector: 1. Having a comprehensive and open budget (now – and I find that particularly helpful - even available online); 2. Public access to key fiscal information; 3. Transparency of tax payers obligations and liabilities; 4. Maintaining a good accounting, recording and reporting system; 5. The high quality and scope of external audit Development partners are very much aware of these improvements and would like to encourage the government of Uganda to keep up the momentum. We recognise the importance of a strong PFM system in reducing the opportunities for fraud and corruption. Ladies and Gentlemen, where as mentioned previously, accountability reforms have been highly credible with improvements in the coverage, quality and timeliness of reporting, there remains the challenge in completing the accountability cycle. Debating of the Auditor General’s reports in Parliament still has a huge backlog, meaning that the proper steps are not being taken towards instructing Government to take action to resolve identified risks and weaknesses that involve the management of public finances. Furthermore, annual PAC reports are not published, making it difficult to identify and follow up on the issues raised by committee members. There has not been a Treasury Memorandum since 2005 and the administrative follow up of the recommendations of the Auditor General is still wanting, leading to the same issues being raised every year. Agreed actions to resolve this, plus new ones, such as the Public Finance Management Bill, Treasury Single Account, payroll decentralization and other IT based systems can only be delivered with strong political commitment. Equally, ensuring that administrative and criminal sanctions are applied to those involved in corruption or mismanagement requires strong political support. Ladies and gentlemen, I wish to reiterate that DPs appreciate the many achievements realized over the long PFM reform journey. The reforms have reached a critical stage and a lot of work has been undertaken in the design of the new FINMAP III programme, which is expected to spearhead PFM reforms across Government. In committing itself to taking these actions forward, I – once again – wish to congratulate Governments efforts in finalizing the update of the PFM Reform Strategy as a driver for improved service delivery. For the implementation of the strategy, I wish all possible success. Thank you!
Posted on: Thu, 28 Aug 2014 13:45:57 +0000
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