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Key Text Design and Implementation of Financial Management Systems: An African Perspective

Author: G Heidenhof, H Grandvoinnet, D Kianpour and B Rezaian
Date: 2002
Size: 25 pages (103 KB)

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Summary

In the early 1990s developing countries in Africa began to place more emphasis on public expenditure management reform, leading to the implementation of integrated Financial Management Systems. This paper written for the World Bank considers Financial Management Systems (FMS) and their key components and what can be learnt from the FMS experience of five African countries.

It is now possible to draw out lessons from the African FMS experience:

Many African countries struggle with the right approach to reforming public financial management.
African countries can draw upon the experience of Latin America and Eastern Europe. Nevertheless the uniqueness of the African context should clearly be taken into account in shaping its reform agenda.
In all five countries, the starting point which triggered the reforms was similar: an analysis to identify the weaknesses of public expenditure systems. However, a difference in scope was noted. For example, in Ghana and Tanzania, the reform agenda was comparably much further-reaching.
Sequencing of the reforms was also different. In Ghana, sequencing of reforms was ambitious. Tanzania and Burkina Faso chose to pursue a more incremental approach focusing on priority areas such as accounting.

Implications are:

Political will and commitment is perhaps the determining factor. It is important to ask who is requesting the FMS reform and why? If it is a purely donor-driven agenda, then the will to reform may be less apparent.
For donors and governments alike, however, a key recommendation is not to place too much emphasis on Information Technology. To implement effective reform, it is critical to focus on the systemic and institutional weaknesses of the existing system.
Thinking ‘small’ is the way forward: a well focused, small-step approach to reform is likely to be more successful.

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Source: Heidenhof, G., Grandvoinnet, H., Kianpour, D. and Rezaian, B., 2002, 'Design and Implementation of Financial Management Systems: An African Perspective', World Bank, Washington D.C.