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  • Writer's pictureMarie S.

Public Expenditure Management Analysis



Efficient public expenditure management is critical to promoting economic growth and development. It is essential to analyze the effectiveness of Liberia's public expenditure management policies and strategies.


The government of Liberia has made significant progress in improving its public expenditure management system in recent years. In 2016, the government adopted a new Public Financial Management (PFM) Act, which has helped to improve the transparency and accountability of public spending. The government has also taken steps to strengthen its PFM institutions, such as the Ministry of Finance and Development Planning (MFDP) and the General Auditing Commission (GAC).[1]


Despite these improvements, there are still a number of challenges that need to be addressed. These challenges include:

  • Weak budget formulation and execution processes. The government's budget formulation and execution processes are still weak. This is due to a number of factors, including a lack of capacity, poor planning, and corruption.

  • Inadequate monitoring and evaluation of public spending. The government's monitoring and evaluation of public spending is inadequate. This makes it difficult to ensure that public resources are being used efficiently and effectively.

  • Limited public participation in the PFM process. The public is not adequately involved in the PFM process. This means that there is a lack of transparency and accountability in public spending.

The government of Liberia needs to address these challenges in order to improve the effectiveness of its public expenditure management system. This could be done by:

  • Strengthening the capacity of the MFDP and the GAC.

  • Improving the budget formulation and execution processes.

  • Strengthening the monitoring and evaluation of public spending.

  • Increasing public participation in the PFM process.

Effective public expenditure management (PEM) is a cornerstone of sound fiscal governance and plays a vital role in driving economic growth and development. The Government of Liberia has recognized the importance of PEM and has taken proactive steps to improve its public financial management (PFM) systems and processes.


In September 2012, the Liberian government launched the multi-donor funded Integration Public Financial Management Reforms Project (IPFMRP), aimed at enhancing the efficiency and transparency of public financial management. The IPFMRP officially closed on June 30, 2016, and an implementation complementation report was produced, recommending the establishment of a separate project management outfit to manage the affairs of the project [1]


To strengthen its PEM capabilities, the Liberian government has established the Liberia Reform Coordinating Unit (RCU), which is responsible for championing the reform agenda. However, the RCU is constrained by staffing limitations, being staffed with a Coordinator, a Deputy Coordinator, and a PFM Specialist. To overcome these challenges and ensure effective implementation, the government aims to develop its PFM Reform Strategy after the Public Expenditure and Financial Accountability (PEFA) assessment, slated for December 2020​[2]


The government has also engaged in knowledge sharing and collaboration with international counterparts, such as Sierra Leone, to learn from best practices and experiences in PEM. Key objectives of these engagements include the development of a comprehensive donor intervention matrix, avoiding duplication of funding, and adopting an internationally acceptable reporting format for the execution of reforms. It was noted that Liberia's PFM governance structure lacks the Thematic Technical Working Group level, which would allow for closer monitoring and reporting of the objectives, activities, and outputs of the Public Expenditure Management Reform Strategy (PEMRS)​[3]


In conclusion, Liberia's efforts to improve public expenditure management are an essential step towards achieving sustainable economic growth and development. By leveraging international best practices, strengthening institutional capacities, and enhancing transparency and accountability, Liberia can ensure that public resources are efficiently utilized to deliver maximum benefits to its citizens. The ongoing reforms and collaborations signal the government's commitment to achieving sound public financial management and creating an enabling environment for economic prosperity.


Sources

[1]International Monetary Fund (2018). Liberia: Staff Report for the 2018 Article IV Consultation and Request for a Three-Year Extended Credit Facility Arrangement. Washington, D.C.: International Monetary Fund.


[2]World Bank (2018). Liberia Economic Update: From Post-Conflict Recovery to Sustainable Growth. Washington, D.C.: World Bank.


[3]Liberia Counterpart Studies Finance Ministry on PFM Reforms – Ministry of Finance


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