4.15 5.00pm pfm reform in benin (houssou and mehou) french

REPUBLIC OF BENIN

Édouard HOUSSOU Inspector General of Finances Gabin MEHOU

Deputy Executive Director of Budget

MINISTRY OF ECONOMY AND FINANCE

BUDGET REFORM IN BENIN

Present: ICGFM 2009 Winter Conference, 2-4 December 2009Washington, D.C.

BENINBenin, small West African country. Area: 112,622 km2 Borders: Bound to the South by the Atlantic Ocean, to the North by Niger and Burkina Faso, to the East by Nigeria and to the West by Togo. Population: Approximately 8 million, with an average annual rate of increase of 2.8%. PMA:Real GDP / capita (in US$; 1$ = 500 FCFA) = 273.1 (in 2007)Current GDP / capita (in US$; 1$ = 500 FCFA) = 663.8 (in 2007)Growth rate in 2008: 5%

Origins of the budget reform….

Origins of the budget reform…

Options had then been taken that were likely to improve the system...

But with prerequisites….

Funding the implementation of reform…

And about MfR…

As part of the PRSC an Engagement Protocol was signed between the Government of Benin and the World Bank. The Protocol outlines the measures to undertake in order to continue developing and improving the tools of Managing for Results (MfR), and ensure the eventual implementation of results-based management .

In compliance with the Protocol, the Reform Framework of Results-Based Budget Management as well as a Development Policy Paper were both developed. Five main projects were identified:

Implementing new methods of internal management for administrations, including wide use of management control, internal audit reform and

decentralization of human resource management

Operationalizing the program budgets development system for Ministries, including the definition of programs, objectives and results indicators for each

Ministry, with the use of modern instruments

Developing new standards and new regulations for financial procedures

Fiscal transition, including plans to implement a single tax identification number and the strengthening of customs and tax departments’

capacities.

The three pillars of reform...

MTEF (Medium-Term Expenditure Framework) = multi-annual expenditure approach = makes it possible to determine the amounts of revenues and expenditures that are in line with growth objectives, inflation, the tax burden, deficit, etc.An ideal vehicle to integrate PRSP (Poverty Reduction Strategy Paper) in public expenditure programs, provided such integration takes place with continuous or consistent macroeconomic supervision.

Program budgets = tools appropriate for the method of performance-based public management.Make it possible to allocate budget resources based on clear political choices.Focus on the ends, taking into account available resources and not the needs of technical Ministries .

Innovations…

First, continued growth of the national budget

Effects of implementation…

Profile of poverty...

Yes, but poverty is not just about money

Progress in terms of education, health, standard of living, life expectancy, etc. should also be taken into account; in short, we should think in terms of well-being.Development Strategy = Poverty Reduction (MDG)

Human Development Index (HDI)

HDI

Unexpected results…

Can other countries benefit from Benin’s experience?

Despite these unexpected results the Benin experience has proven satisfactory at domestic level, and has sparked interest with the West African Economic and Monetary Union (WAEMU), whose recent guidelines have drawn extensively upon Benin's orientations in this matter.

And control…

Reform of control: a prerequisite for achieving performance and results.

Overview of controls in Benin…

National Assembly

Chamber of Accounts

General Inspectorate of Finances

State’s General Inspectorate

General Inspectorate of Public Services and Employment

General Inspectorates of Ministries

Domestic jurisdiction inspectorates

Ex-post internal control

External control

Financial control

Government Contracting Committees

Ex-ante internal control

Monitoring/Evaluation Committees

Operational, but take part in control

Yet there are still shortcomings…

Thank you