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Four civil society responses to South Africa’s 2012 budget

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The Centre for Economic Governance and AIDS in Africa (CEGAA) points out that the overall share of health spending allocated to fighting HIV/AIDS is growing steadily. They ask therefore that the government should assess whether HIV and AIDS is crowding out other health expenditures, as this may affect the overall mobilisation and utilisation of funding for health in general. Click here to read their analysis of this issue.

In its response to budget 2012, Idasa argues that the government is banking on a global recovery and stronger growth in the medium term. They suggest that should South Africa not get the growth which this budget assumes, and if tax revenue recovery remains poor,South Africa will face a set of difficult choices in the next few years. Click here to read their response to the budget.

The Civil Society call for Budget Justice makes a case for a more progressive tax regime and greater government spending on public services, basic needs, public sector jobs, and climate change. Click here to read the rest of the call.

The International Budget Partnership comments on recent trends in government budget transparency. They argue that government could be rewarded with improved credit ratings, greater electoral support and improved service delivery  if it supplemented its macro level budget transparency with a greater responsiveness to specific requests for information. Click here to read more.

Postscript: After publishing this post, Derek Luyt at the Public Service Accountability Monitor pointed out to me that Sangonet actually published budget comments from 22 CSOs! Click here to see them all.

The world post-Busan: what’s in it for CSOs working on aid, transparency and accountability?

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prepared by Paolo de Renzio, Senior Research Fellow at the International Budget Partnership

After a gruelling 35-hour flight, it took me a few days to recover and digest all that had happened in Busan last week, where more than 2,000 delegates gathered for the 4th High-Level Forum on Aid Effectiveness. Overall, I thought that the outcome was fairly disappointing. The outcome document, called the Busan Partnership for Effective Development Cooperation, is long on principles and short of commitments. It was endorsed by the emerging donors like Brazil, Russia, India, China on condition that it is not binding. Specific and time-bound targets for improving donor performance, such as those agreed in Paris in 2005, are absent. And all details about the new and more inclusive body expected to oversee the implementation of the document’s commitments are lacking, though a deadline of June 2012 for its establishment was set.

But not all is bleak. The document contains strong language on the need to promote democratic ownership of development policies and processes, and recognizes the vital role played by Civil Society Organizations (CSOs) in “enabling people to claim their rights, in promoting rights-based approaches, in shaping development policies and partnerships, and in overseeing their implementation”. It also retained the commitments related to improving aid transparency, including a deadline of December 2015 for implementing a common open standard for the publication of comprehensive information on aid flows. In fact, the International Aid Transparency Initiative, which was undermined by reluctant donors in the run-up to Busan, got a strong boost with the US Government joining it, alongside other large donors such as the Asian and Inter-American Development Banks. This means that more than  75% of information of total aid flows will soon be compliant with strong transparency standards. This will allow CSOs in both donor and recipient countries to track more closely how aid money is spent.

Donors also committed to using country systems as a default approach for development cooperation, something that could strongly enhance the link between aid and budget transparency, and to further untie their aid. Finally, the document talks about the importance of fiscal transparency in combating corruption, and about the need to “establish transparent public financial management and aid information management systems, and strengthen the capacities of all relevant stakeholders to make better use of this information in decision-making and to promote accountability”.

The results of the Busan HLF4 therefore create a reasonable framework to push forward issues that are of core interest to CSOs working on transparency and accountability. Yet, much remains to be done. In order to fully exploit the opportunities opened at Busan, the International Budget Partnership will work with others to:

  1. Monitor and influence negotiations on the establishment of the Global Partnership for Effective Development Cooperation, ensuring that it adequately includes and addresses transparency and accountability issues (focusing particularly on aid and budget transparency, and use of country systems), with monitorable indicators and time-bound commitments.
  2. Work with the IATI Secretariat to ensure that aid information is increasingly compatible with recipient country budget systems and processes.
  3. Continue discussions on enhancing the linkages between aid and fiscal transparency with the smaller set of actors who were part of the Transparency Building Block at Busan, and who are committed to further and faster progress in this area.

If you are interested in joining, let us know!

Make budgets public! The first global assembly for Budget Transparency, Accountability and Participation

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International Budget Partnership, Greenpeace, the ONE Campaign, Oxfam Novib, ActionAid, Global Witness, Publish What You Pay, the Revenue Watch Institute, Transparency International and nearly 100 civil society organizations from 100 countries and are heading for  Dar es Salaam, Tanzania to launch a global campaign to make government budgets transparent, participatory, and accountable. Click here to see who will all be there.

The global Civil Society Movement for Budget Transparency, Accountability, and Participation wants government finance systems that make all budget information easily accessible, provide meaningful opportunities for citizens to participate in budget decisions and oversight.

The demands of the Civil Society Movement for Budget Transparency, Accountability, and Participation (BTAP) are contained in a Declaration of Principles that will be signed at the meeting.

The core demands of the Declaration is that all governments at the national and subnational levels should:

  1.  Recognize, legislate, enact and operationalize the right to information generally and to public budget information specifically;
  2. Actively engage citizens and all other stakeholders in setting public budget priorities– including para-statal and para-fiscal funds– as early and inclusively as possible,
  3. Produce, and publicly discuss, in a timely fashion, at least eight key budget documents: pre-budget statement, executive’s budget proposal, enacted budget, citizens budget, in-year report, mid-year review, end-year report, audit report;
  4. Comprehensively report on all public financial flows and institutions, including those that are managed outside of the formal budget process;
  5. Include all resources used for the implementation of public, fiscal and economic policies, regardless of their origin, in their public budget documents and processes;
  6. Ensure that legislatures and auditors are independent of government and have sufficient resources to increase their capacity and thus fulfill their oversight mandates effectively.
  7. Publish and disseminate budget information in easy and accessible formats through all possible means, including digital open data formats through the internet, public libraries, information centers, etc.

Draft #5: Still more work to be done on Kenya’s budget law

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Kenya’s new PFM draft is out

Kenya’s draft PFM law is now, according to the version available on the Constitutional Implementation Commission’s website, in its fifth iteration.  The numerological significance of the draft editions is a bit opaque: there is a previous draft on the Ministry of Finance website, which is titled the “zero draft.”  The public has not, as far as I am aware, been shown any versions in between this and Draft #5.  But, there is no reason to panic: the differences between them are not large.  I highlight a few areas of improvement, as well as some of continuing concern.

Improvements in this version

The new draft eliminates a suspect clause in the old version which placed limits on the public release of documents produced by the Parliamentary Budget Office.  That clause read: the PBO shall ensure that “all outputs are published in a timely way on the internet unless publication is not in the public interest.”  The new version states simply that all outputs will be put on the internet.

The new draft also pushes up by one month the date when the Treasury will release its circular to government agencies.  The old draft required this by September 30th; the new draft requires it by August 30th.  This will give government agencies more time to prepare their budgets.  Unfortunately, the earlier start to the process does not translate into earlier access to information by Parliament or the public.

There are a number of minor changes which are positive on balance: the government was previously required to “publicize” any deviations from the budget within one day of making these known to the Parliament.  This has been changed to give the government a week, but they are now required not only to “publicize” but to “publish” this information, meaning it must be made available in full in the newspaper or online.  I am not sure a week is needed for this, but ensuring full publication is an improvement over the old language.

Areas of continued concern

Most of the lacunae I identified in the first draft of the bill persist in Draft #5.  Many of these have to do with the limited attempt to spell out how the public will have opportunities to engage directly with the budget process.  The public is supposed to be given an “opportunity to make representations” into the Budget Policy Statement (Kenya’s Pre-Budget Statement) before it is tabled in Parliament.  No guidelines are provided for this: how will it happen? How much time will be given to the public for comment?  The public will then have only one week to review the actual document after it is provided to Parliament, and before Parliament must comment (deadline: March 15).

No opportunities are explicitly provided for public input at other stages of the budget process.  The constitution stipulates that the budget committee in Parliament will “seek representations from the public and the representations shall be taken into account” (221:5) when the committee considers the government’s budget estimates.  However, neither the constitution nor Draft #5 mentions anything about the estimates being published, nor about the time that must be given to the public to read and respond, nor the way in which “representations” will be made.  The public is also not provided any formal opportunity to comment on budget implementation or evaluation.

There are also areas where the draft continues to be vague in ways that could prove fateful.  For example, there are no limits on the amount of the Contingencies Fund which can be used at any one time without the approval of Parliament, which provides too much discretion to the executive.  There is no explicit mandate that the Auditor General or the executive publish a report on actions taken to deal with issues raised by the Auditor’s reports.  (Reports do have to be made public of officials committed of wrong-doing and sanctioned, but not how problems identified by the Auditor are being addressed).   Counties are only allowed to accumulate debt up to a “prescribed percentage” of annual revenue, but this can vary by county and it is unclear who will set this percentage to avoid political manipulation.

More to be done

Kenya’s constitution and draft PFM law move the country in a very positive direction, away from an overly dominant Treasury to a system with greater transparency and participation by both Parliament and the public.  But as these comments, and those made previously suggest, there is still more work to be done.  It is to be hoped that citizens will push the bill toward still greater transparency and participation before it is finally approved by the Parliament.

Kenya Cracks Open Its Budget

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This month, Kenya released its first ever Citizens Budget.  The Citizens Budget is a summary of the budget using non-technical language.  According to international good practice, it is considered to be one of the eight key budget documents that governments should release throughout the fiscal year.  Kenya’s version, Budget Highlights 2011-2012: Citizen’s Guide, is a 6-page document that is easy to read and filled with data, charts and short summaries of spending priorities.

The government is to be congratulated for taking this important step in making the budget accessible to a wider audience.  The standards for what a Citizens Budget should include are evolving rapidly, and Kenya’s efforts will contribute to global debate about what a Citizens Budget is, and what it should be.  In this first effort, the Kenyan government gets a number of things right.  There are, however, also places where a subsequent version could be improved.

On the positive side of the ledger, the document contains useful pie charts breaking down revenue sources, a simple table on macroeconomic indicators projected through 2013-14, and an extremely helpful bubble diagram (p. 5) that provides both visual and raw numerical information about spending priorities.  The document also focuses directly on some of the key concerns of citizens, and the ways in which government is trying to address these issues: food insecurity, youth unemployment, social protection, and infrastructure investment for faster economic growth.

Where could the document be strengthened?  The Citizen’s Guide is full of numbers, but they are not well contextualized.  For example, when confronted with a bullet point indicating that, say, “KSh 13.3 bn for social safety net” is going to be spent, we will immediately ask the following questions: how does this compare to last year, how many people is it intended to serve, and what exactly is the social safety net?  But we will not find answers to these questions here, nor any direction about where to look for them.  There are of course limits to what can appear in a short document, but there may be value in having fewer numbers with more context, and a few more pages of text.

It is also the case that the numbers are sometimes more confusing than revealing: according to page 4, KSh 23.1 bn is being spent on labour-intensive public works programmes targeted at youth and defined as “pro-poor spending”; but on page 1, only KSh 1.6 billion in total is going for “labour intensive public works programmes,” plus skills development and internships, with no explicit youth or pro-poor focus.  How is it possible that the pro-poor, pro-youth component of 1.6 billion is equal to 23.1 billion?  There may be a good explanation for this, but it is not in the document.

A Citizen’s Guide need not answer every question a citizen has about the budget; it should provide enough information to help citizens ask good questions and find what they need in the actual budget or budget-related documentation.  To this end, the document could also be clearer in other ways.  For example, the first page reports on spending by sectors, but these sectors are not necessarily recognizable to ordinary citizens.  A person looking for health or education spending has to know to look at page 5 and follow the connecting lines in the bubble map to find out that these things fall under Human Resources Development.  The document should instead invite citizens who are looking for information about health or education to easily determine in which sector they fall.

Finally, one of the hardest things for governments to do is to convey the fact that they have limited resources, and therefore have to make hard choices about what to fund this year, and what will have to wait.  The Citizen’s Guide would be one place to make the case that government has deliberated these trade-offs carefully, and to present its justifications for its decisions.  To this end, the next version of Kenya’s Citizen’s Guide could start with a narrative explaining the government’s key priorities –given the macroeconomic context– and highlight changes over time.  This would ease the layperson into a document that currently starts with no narrative and a barrage of figures.

Much of what should be in a Citizens Budget is in Kenya’s maiden attempt.  The Ministry of Finance must also be recognized for its efforts to put out more information in this transitional year, as the government struggles to adapt to a shifting budget process prescribed by the new constitution.  Next year’s Citizen’s Guide will be even stronger if it contains more narrative, more context, and a better explanation of government plans to ensure full implementation of the budget.