(A)

Public financial management connotes how a government manages the financial resources of the state in the pursuance of effective public service delivery. It is a vehicle through which government and its agencies mobilise resources, allocate the resources, spend the resources on activities and programmes and account for the resources so deployed subject to external scrutiny and audit.

Public Financial Management is a central element of a functioning administration, underlying all government activities. It encompasses the mechanisms through which public resources are collected, allocated, spent and accounted for. PFM processes comprise planning and budgeting, budget execution, accounting and reporting, audit and scrutiny of Parliament. The overall goal of public financial management is to link public resources to an economic, effective and efficient delivery of public services to meet the service expectation of the citizens.                                                                                                                                                                                                                                                                                                                                                                                                             (B)

The public financial management (PFM) cycle consists of several interrelated phases, each playing a crucial role in managing public funds effectively and ensuring accountability. The elements of the public financial management cycle include:

• Planning: Planning is concerned with setting long-term and short-term priorities for public spending based on national development goals, strategies, and fiscal sustainability. It results in the development of the medium-term expenditure frameworks (MTEFs) and sector plans that outline spending priorities over a multi-year horizon. Planning involves identifying the government’s economic and social objectives. Ministries, departments, and agencies (MDAs) develop plans for the delivery of public services, considering available resources and sectoral goals. The plans are typically aligned with national development frameworks and sectoral strategies. Key activities may include economic forecasting, revenue estimation and setting budgetary targets for the medium to long term. The planning processes and activities are guided by the provisions of the Public Financial Management Act 2018 (Act 750) and the Public Financial Management Regulations 2020 L.I 2450.
• Budget preparation: It is the means to translate the government’s plans and priorities into an actionable financial framework, defining how resources will be allocated. MDAs prepare detailed budget proposals based on their plans, which are then reviewed and consolidated into a national budget by the Ministry of Finance. The budget is presented to the legislature for approval. It mainly relates projected government spending to the available revenue and attainment of service delivery objectives of the public sector. The outcome of the process is the economic and budget statement document of the nation.
• Budget execution: At this phase, the focus is to implement the approved budget by allocating resources and carrying out expenditures in line with the budget plan. The key processes involved at this phase include revenue mobilisation, disbursement of funds to MDAs according to the budget allocations, procurement of goods, services and works in accordance with laws. There is continuous tracking of the financial management systems and managing cash flows to ensure efficient resource use. The overall outcome is the delivery of public services and infrastructure projects.
• Recording, accounting and reporting: The objective of this stage is to ensure that all financial transactions are accurately captured and reported for accountability and transparency. Each transaction (revenues and expenditures) is recorded in a government financial management system, and budget allocations, disbursements and actual spending are accounted for and tracked in real time. Financial reports are produced on a regular basis (e.g., monthly, quarterly, annually) and may include budget performance reports to track how funds were utilised compared to the approved budget. These reports are prepared in accordance with public financial legislation and acceptable accounting standards, such as the International Public Sector Accounting Standards (IPSAS).
• Audit and review: This phase ensures the integrity and accuracy of financial reports, assesses compliance with legal and regulatory frameworks, and identifies any areas of inefficiency or misuse of public funds. Independent auditors (the Auditor-General) review financial statements and reports. Auditors assess whether funds were used appropriately and whether the government achieved value for money. Recommendations for improving financial management and accountability are made to government agencies. Internal audit also plays a crucial role in the scrutiny process to ensure that public resources are safeguarded by advising management on the effectiveness of internal control and risk management.                                                                                                                                                                                                                                                                                                                                                                                                                                           (C)

  Public Financial Management in Zamara faces several challenges, among which are:

  (i) Revenue mobilisation challenges: Government struggles with generating sufficient domestic revenue to fund government programs and development projects. This results from tax evasion, inefficiencies in tax administration, and a large informal sector make it difficult to broaden the tax base.

  (ii) High public debt and debt management: Government faces a growing public debt, which strains public finances and reduces the government’s ability to fund essential services. This is caused by excessive borrowing to finance budget deficits, coupled with inefficient debt management, results in high interest payments and risks of debt distress.

  (iii) Weak budget credibility: There is often a significant gap between the approved budget and actual expenditures, leading to poor budget execution. This is usually caused by unrealistic revenue projections, external shocks, and inefficient expenditure management contribute to deviations from the planned budget.

  (iv) Inefficiencies in public procurement: Public procurement processes are often marred by inefficiency, corruption, and delays. The challenge is increasing non-adherence to procurement laws, political interference, and weak monitoring mechanisms.

  (v) Weak audit and oversight mechanisms: Audits and reviews by the Auditor-General and other oversight bodies are often not fully implemented or enforced. Lack of capacity in audit institutions, political interference, and limited follow-up on audit recommendations are the major causes of weak audit and oversight scrutiny.