We define Public Financial Management (PFM) comprehensively or broadly to include tax and non-tax revenue, expenditure, financing, and debt management. Hence, it defines PFM practically to mean the set of policies, laws, rules, procedures and processes used by central and sub-national governments (SNGs) to mobilize revenues; estimate and allocate public funds; undertake public spending; finance budget gaps; and manage public debts – as authorized – as well as account for funds, with audit results or outcomes.

Fiscal Policy Framework

Our policies relate to inter-dependent agencies, systems and processes that form fiscal structures. The difference lies in MIC and Tier 2 Africa sharpening the policy objectives of tax and expenditure management as well as shifting from cash-based to IPSAS-based semi-accrual accounting rules to control unplanned MDA/SNG budget overruns and deficits.

Medium-Term or Strategic Plans for MIC-Africa must embrace structural change and focus on automated integrated systems for revenue, expense, cash, treasury, and debt management. The Budgets and audited Public Accounts outcomes must be based on sound professional standards (e.g., IPSAS) and classification or coding methods. TA needs must be targeted to strengthen debt management which is weak in many states—where budget constraints mean tax or total revenues may cover only recurrent expenditure and debt service. Therefore, most borrowing is to meet capital expenditures.

Capacity-building: Importance of Training

We reinforce training in macro-fiscal policies to create awareness about the importance of creating a stable and sustainable macro-economic environment through revenue mobilization, expenditure management, financing, and debt management. Consultancy and TA to MIC and Tier 2 Africa must focus, almost exclusively, on building internal or institutional capacity in PFM policy and operations.