Mauritius PEFA update

Mauritius appears to have done an update of its PEFA;

Mauritius continues to perform well against the PEFA benchmarks. The scores show progress compared to the 2007 PEFA assessment, with 27 out of the 31 reported ratings higher or equal to those obtained in 2007...

Comprehensiveness and transparency have improved since the last PEFA
assessment. The budget classification system adopted for the 2008-09 budget, which incorporates a program budget approach for the first time, is based on the IMF Government Finance Statistics Manual (GFSM) 2001. Budget documentation is relatively comprehensive, meeting seven out of nine of the required benchmarks. However, the analysis and discussion of macro-fiscal projections and fiscal outputs are limited, and transactions between the central government and extra-budgetary units are not fully reported

The monitoring of fiscal risks has been progressively strengthened over the
reporting period, though gaps still remain. Monitoring and reporting of fiscal risks is not always systematic and coverage remains incomplete―financial institutions and extra-budgetary units are not monitored. Budget integrity is in general sound, with some remaining issues in the monitoring and publication of contract awards and the tracking of flows of funds to primary service delivery units.

A clear annual budget calendar exists and is largely adhered to. The budget
circular provides the guidance necessary for line ministries to prepare a complete and detailed budget submission. However, strategic planning capacity in government remains limited and the links between macroeconomic projections, fiscal strategy, ministry-level strategic plans, and the budget process require strengthening. In particular, insufficient time is available at the early stages of the budget process for discussions between line ministries and the Ministry of Finance and Economic Development (MoFED) to determine strategic priorities within the fiscal framework. This is particularly apparent on the capital side of the budget, where significant capacity constraints result in substantial underspending.

How to Praise a Finance Minister

"The observed resilience of the Mauritian economy is a testimony to the positive impact of the reforms carried out since 2006, which favoured economic diversification and adaptation at the same time that it created fiscal space for expansionary macroeconomic policies and other innovative, timely, temporary and targeted responses to cushion the crisis impact".

-World Bank, Mr Fabiano Bastos, quoted in the Budget Speech

Random thoughts on Improving PFM Technical Assistance

'The best solutions are those where international experience is judiciously mixed with local genius'-Suhas Joshi

Some more comments on Richard Allen's post about improving effectiveness of PFM TAs';

- I don't see any problems in moving towards what locals and advisers see as best practice; as long we consider that there are many recipes of 'best practice'

-TA reports should always start the dialogue, but how does one institutionalise discussion and follow up of TA reports on PFM? Which committees should be responsible, and at which level?

- Mr. Joshi also makes importance points in the comments-'countries therefore do not need large prescriptive reports but help is resolving the constraints they have'. I fully agree, 'it is more useful to have as a TA someone who understands the country and has spent some time there'

- One of the biggest problems I've seen are consultants who want to take you for a ride- this is a problem for assistance provided by some international donors who have weak internal expertise, exceptions include World Bank and IMF. Countries need to seriously think the donor they approach for reform PFM areas and whether they have a comparative advantage in them.

Putting Foreign Aid in Macro-Fiscal Frameworks

I found the following from the Mauritius budget call circular to be useful- putting aid into overall sectoral ceiling is really a feature of mature MTEF. Mauritius budget process is certainly very advanced.

Financial resources expected from development partners (grant or loan funding) have already been factored in the macro-fiscal framework used for working out spending limits and do not therefore constitute an additional source of funds available for spending.

For Discussion: How's foreign aid incorporated in MTEF's in other countries like Albania, which have mature MTEF's?

Related:
Albania- Albania Public Expenditure and Institutional Review 2001


REPIM