Helping Countries Develop

19 A Comparison Between Two Public Expenditure Management Systems in Africa

Benedict Clements, Sanjeev Gupta, and Gabriela Inchauste
Published Date:
September 2004
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Ian Lienert

One important objective of the enhanced HIPC (Heavily Indebted Poor Country) debt reduction initiative is to redirect the budgetary resources released from servicing external debt toward poverty-reducing expenditures. Several questions arise in this context. First, are African countries’ public expenditure management systems robust enough to allow specific poverty-reducing expenditures to be identified in annual budgets and tracked in countries’ accounting systems? Second, does the expenditure control system allow poverty-reducing expenditures to be protected from cuts should there be unforeseen shortfalls in revenues? Third, are internal and external audit mechanisms effective, so as to ensure the integrity of expenditure reports, both in-year and annually? To answer these, and other questions, an assessment of the entire public expenditure management system is required in each country.

Such a study was published in 2002.1 The public expenditure management systems of 24 low-income countries were assessed on the basis of a common set of 15 questions in the three areas of budget preparation, budget execution, and fiscal reporting. Figure 1 shows the overall results—both regions attained only about 35 percent of the required benchmarks—well below that required to meet the objectives of effective public expenditure management systems (see the subsection on potential strengths of the individual public expenditure management systems for details). Information on the progress in implementing action plans built on the initial assessment has also been published.2

Figure 1.Relative Performance of Public Expenditure Management Systems in Africa

Percentage of countries meeting benchmarks

Source: IMF and World Bank (2002).

Note: 15 benchmarks were established: 7 for budget formulation and 4 each for budget execution and fiscal reporting. The francophone countries in the sample are Benin, Burkina Faso, Cameroon, Chad, Guinea, Madagascar, Mali, Mauritania, Niger, and Senegal. The anglophone countries in the sample are The Gambia, Ghana, Malawi, Tanzania, Uganda, and Zambia.

This chapter focuses on one question: “Is there a specific public expenditure management system in Africa that consistently performs better than other systems?” Since most countries in Africa have inherited either a French-based or a British-based management system, the comparison is limited to these two systems.3 Other studies have documented the common weaknesses of the anglophone and francophone systems, respectively.4 This chapter complements this research by conducting a comparative analysis.

A study of this nature necessarily includes generalizations: countries in the two areas have experienced different developments of their public expenditure management systems since independence. The study focuses on the countries that have benefited from IMF technical assistance over the past decade.5 The emphasis is therefore on describing or evaluating how public expenditure management systems actually operate, rather than how they ought to operate on the basis of each system’s regulatory framework.

Budget Preparation

This section first examines the legislative framework for budget making, as it provides the foundation of the budget preparation system. It then reviews common features of budget preparation in the two regions.

Legislative Basis for Budget Preparation

Constitutions in francophone countries typically include a statement that the annual budget law (loi de finances) determines the resources and expenses of the state. They also include provisions on the timing of the presentation of the law to parliament (often in October for a budget year that begins on January 1) and permissable actions by the executive branch when the annual budget is not adopted on time by parliament. Typically, governments begin executing the new budget on the basis of monthly authorizations equal to 1/12th of the previous year’s budget.

Constitutions of anglophone countries vary considerably in their provisions for the budget process. Some countries have very few, if any, articles on budgeting in their constitutions (e.g., Uganda). Others have considerably more detail than francophone countries (e.g., Nigeria). A typical constitutional requirement is that money may not be withdrawn from the consolidated fund unless provided for by another law.

In the French-based system, organic budget laws spell out five well-known principles for budget preparation: annual basis, unity, universality, specificity, and equilibrium (balance).6 In francophone Africa, organic budget laws are based largely on that adopted in France in 1959.7 They typically define or specify (1) current and capital expenditures, and loans/advances; (2) the broad categories of the economic classification of expenditures;8 (3) the nature of documents to be submitted to parliament; and (4) procedures for preparing and adopting the annual budget law.

Budget laws in anglophone countries differ from those of the francophone countries. The closest equivalent to an “organic budget law” in anglophone countries are “finance and audit acts.” Although these may include a chapter on budget preparation, there is strong emphasis on budget execution and ex post audit. In both regions, ministries of finance provide guidance to budget preparation, through budget circulars or other administrative notices.

Common Features of Budget Preparation in the Two Regions

The processes involved in budget preparation are similar in the two regions (see Box 1).

Since the abandonment of national planning,9 budgets have traditionally only been annual, at least for current expenditures. In recent years, initiatives have been made to develop medium-term budget frameworks, especially in the anglophone countries (e.g., Ghana, Tanzania, and Uganda). In the case of Uganda, a Budget Act was adopted in 2000, which, among other things, provides legal underpinning for medium-term budget frameworks.

In francophone countries, multiyear budget provisioning for capital expenditures is provided for in organic budget laws. Multiyear budget appropriations (autorisations de programme) allow ministries to commit expenditures for capital projects for periods exceeding one year. Accompanying these appropriations are limits on annual payments (crédits de paiements), which are included in the annual budget law. At year-end, any unspent payments within the annual limit can be carried over to the new fiscal year. In contrast, in anglophone countries, unspent appropriations are generally cancelled at year-end and reappropriated in the following year’s budget.

Donors dominate the financing of public investment programs.10 In both sets of countries, donors finance most investment budget spending. Although projects in the public investment programs should be prioritized according to objective criteria, in practice, donor preferences have heavily influenced the composition of projects included in public investment programs. However, there is an increasing tendency for some donors to provide nontargeted budgetary assistance.

Box 1.Common Features of Budget Preparation Systems in Francophone and Anglophone Africa

  • Annual basis for the budget, but no medium-term expenditure framework.
  • One budget for current expenditures and another budget for investments.
  • Detailed line-item budgeting.
  • Budget generally limited to central government, plus a few autonomous funds. Local governments and extrabudgetary funds are excluded.
  • Decentralization of budgeting to lower levels of government is under way.
  • Unrealistic costings of expenditures; some line items are underprovisioned.
  • Timing—budget preparation allows little time for parliamentary discussion.
  • Absence of focus on results or effectiveness of government programs.

Dual budgeting has been widespread. Separate budgets are often prepared for current expenditures and “investment” expenditures. The latter—sometimes called “development budgets”—often contain considerable recurrent expenditures. The absence of medium-term budget frameworks and the existence of nonintegrated budgets also result in the failure to appreciate the recurrent expenditure implications of investment projects. It is now recognized that, in both sets of countries, “dual budgeting may well be the most important culprit in the failure ‘to link planning, policy, and budgeting” (see Box 3.11 of World Bank, 1998).

The budget has traditionally been prepared mainly on a detailed line-item basis. In both regions, the main budget document may run into hundreds of pages. Such detail complicates budgetary management. Budget classification is generally similar: the budget is adopted by organizational classification (e.g., ministry, administrative unit, and province) and by economic classification (e.g., salaries, current goods and services, transfers, and capital spending). It is rare in both regions to classify expenditures by program or by function. In both regions the rules for reallocation between budget lines are well defined, although in practice, they are not always respected.

In both sets of countries, the budget adopted is generally limited to central government. In the annual budget, parliament approves central government transfers to lower levels of government. Estimates of the revenues of subnational governments are usually not provided as background information. Revenues collected and retained by autonomous agencies (e.g., hospitals) dependent upon budget transfers for their main source of income are often not shown in the budget.

In both regions, semiautonomous budgets, extrabudgetary funds, and off-budget activities are important. In the francophone countries, although organic budget laws refer to the principle of unity of spending from one common fund and universality (all spending should be in the budget), in practice there are several exceptions. In particular, there are budget annexes and special treasury accounts of various types.11 Although these are presented to parliament for adoption and subject to public accounting rules, in practice accounting records are poorly maintained. In anglophone countries, extrabudgetary activity appears to be a more important problem than in francophone countries:12 off-budget “below-the-line” funds have caused problems in budget execution in several countries (e.g., The Gambia and Zimbabwe). Road funds are usually integrated with the budget preparation process, but they are managed autonomously. Social security or pension funds are generally outside the budget preparation process in both regions.13

Revenue projections have often been unrealistic. In both regions, there has been a tendency for revenues to fall short of projections (e.g., the impact of the reduction in external tariffs in WAEMU countries has been underestimated). However, in some countries, there has been improvement in recent years, especially for tax revenue projections, which are generally projected more conservatively (e.g., in Tanzania). However, there is a persistent problem of shortfalls in revenues (relative to projections) for donors’ grants, resulting in an underexecution of the development budget.

Some specific current expenditures are underestimated in the budget, particularly those on electricity, telephone, water, and other expenditures whose commitment cannot be postponed (e.g., food for the army and for prisoners). This is partly because budget departments of ministries of finance lack qualified staff who can critically examine the expenditure estimates on the basis of well-maintained databases of ministry-specific unit costs and consumption volumes of these items. Also, there is often a very tight timetable for bilateral budget discussions at the technical level.

Following agreement of the budget at the technical level, important political decisions affecting spending are sometimes made late in the budget cycle. Also, after the budget is adopted by parliament, political authorities—not necessarily the minister of finance—may make decisions that weaken the capacity of the ministry of finance to finance all budgeted expenditures.

One specific feature of francophone countries is the distinction between existing and new policies. As early as the 1960s, the annual budgets of several francophone countries showed, for each line item, a split between policies already in place (services votés) and new measures (mesures nouvelles). However, the quality of the estimates for the new measures was often not high, as these were largely based on extrapolations of previous-year budget projections. Nonetheless, a formal distinction between existing and new policies was not part of the system adopted in anglophone Africa.

Budgets are often adopted late in both groups of countries. Although in francophone countries constitutions and/or organic budget laws lay out the key dates for budget presentation and adoption by parliament, these are not always respected. For example, in Côte d’Ivoire, the budget for 2001, covering January-December, was adopted in July 2001. Similarly, in anglophone countries, where budget preparation calendars are also clearly spelled out, the budget may be presented to parliament just before the beginning of a new fiscal year (e.g., Kenya, Tanzania, and Uganda), and not adopted until the second or third month of the new fiscal year (see Fölscher, 2002, for a five-country survey).

The budget is usually not discussed extensively by parliament. In the United Kingdom and France, parliamentary budget commissions have traditionally played an active role in examining the budget prior to its formal adoption by parliament. This has not been the case in Africa, reflecting lack of capacity and inadequate attention to the role of parliament in the budget process. However, parliamentary budget subcommittees are becoming active in a few francophone countries and several anglophone countries (e.g., Mali, Tanzania, and Uganda), in line with greater democratization.

Performance-oriented budgeting is beginning in both regions (e.g., Mali and Uganda). This is necessitated by the challenge of implementing country-owned poverty-reduction strategies that link specific objectives—especially in education and health—with budgeted expenditures needed to achieve the desired changes. However, the capacity to administer the additional data and analytical requirements of output/outcome budgeting is often lacking. Moreover, where they exist, “programs” are not well conceived; they are often simply a provisioning of present organizational structures within ministries.

Budget Execution

In contrast to the considerable similarities of the two public expenditure management systems for budget preparation, when it comes to budget execution there are some important differences. The key contrasts between the two systems revolve around the degree of (de)centralization of responsibility for budget management to spending ministries. These differences are elaborated below and in successive subsections.

Key Actors in the Expenditure Process and Their Respective Roles

The British approach can be characterized as one of decentralized management—spending ministries are mainly responsible for budget execution. In contrast, the French-based system is one in which the central ministry of finance plays an important role at each step of the spending process. The balance of powers and key players are illustrated in Figure 2.

In anglophone countries, officials in spending ministries are charged with initiating and authorizing expenditures at each stage, from commitment to payment. Following adoption of the budget, the minister of finance14 issues quarterly or annual warrants to “accounting officers,” who are generally the heads (“permanent secretaries”) of spending ministries and have extensive responsibilities (Box 2). The warrants convey the legal authority to vote holders to authorize expenditure from public funds. Accounting officers, in turn, may delegate disbursement authority to officers in their ministry.

In the francophone system, such wide-ranging responsibilities are not provided to spending ministries. On the contrary, the closest equivalent to accounting officers (gestionnaires de crédit) have a rather limited role—mainly that of initiating expenditures at the commitment stage, within the budget provision. They do not have authority to issue payment orders (ordonnancement); this is the role of the payment authorizing officer (ordonnateur). However, in most African francophone countries, the minister of finance is the sole authorizing officer (ordonnateur unique).15

Figure 2.Relative Influence of Ministry of Finance and Spending Ministries in Budget Execution

1 Accountants report to the accounting officer of the ministry or agency, but are usually posted to the unit by the accountant general of the ministry of finance, who sets professional standards.

Box 2.Responsibilities of Accounting Officers in Spending Ministries of Anglophone Countries

  • Preparing budget projections for their ministry.
  • Ensuring that no head of expenditure is exceeded and that no subhead or item is exceeded without proper authority.1
  • Delegating authority to spend to authorized officers in his/her ministry—subwarrant holders—and ensuring that delegated officers do not overspend.
  • Endorsing the Annual Accounts of the ministry and defending the ministry’s budget outcome before the Public Accounts Committee of parliament.
1 Accounting officers can generally reallocate funds from one subhead to another within current budgets (but not capital budgets). However, they are not authorized to transfer budget allocations for salaries to nonsalary current expenditures or vice versa.

Various departments of the ministry of finance of francophone countries play all the important roles in budget execution. The key players are financial controllers (contrôleurs financiers), who are generally under the budget department of the ministry of finance, and approve expenditure commitments on advance basis and, often, the issuance of payment orders to the treasury;16 and public accountants (comptables publics) in the treasury.

A key principle of the francophone public expenditure management system is the separation of the payment authorizing officer and the treasury officer responsible for payment. Since both of these functions are centralized in the ministry of finance, financial management in spending ministries is diluted: the minister of finance is both the sole authorizing officer and the overseer of the functioning of the treasury and the countrywide body of public accountants. Thus, despite the principle of the separation of the payment authorizing officer and the public accountant, the minister of finance performs both roles.

As a consequence, the minister of finance has unique powers in expenditure management, without parallel in the anglophone system. The system in Africa is even more centralized than in France, where both cabinet ministers and central government representatives at the local level (préfets) are payment authorizing officers. The system in francophone Africa therefore confers virtually no responsibility for effective financial management on government ministers or the heads of spending ministries.

Expenditure Control

In the anglophone system, expenditure control is largely exercised by the warrant system. In principle, the ministry of finance can control the issuance of warrants for nonstatutory expenditures.17 Annual warrants are usually provided for salaries, and quarterly or monthly warrants for other current expenditures. Warrant control is a major instrument of expenditure control in some countries (e.g., Kenya and Lesotho). In principle, accounting officers record expenditure commitments in their “vote books” and should report these to the ministry of finance. However, in several countries (e.g., Malawi and Zambia), ministries’ reports on commitments are incomplete and received late by the ministry of finance; as a consequence, the ministry of finance has been unable to exercise control over expenditure commitments.

“Cash budgeting” arrangements were introduced in a number of anglophone countries, especially during the 1990s (e.g., Kenya, Tanzania, and Zambia), mainly because expenditure control was not being exercised.18 Under this system, cash allocations to ministries are limited to that dictated by cash availability—that is, the amount that ministries are authorized to spend is subject to cash limits. Since cash limits were often below the warrant limits—and the latter are consistent with the annual budget appropriations—accounting officers often did not ensure that expenditure commitments were contained within the cash limits. As a result, expenditure arrears—overdue unpaid invoices—became a pervasive problems in many anglophone African countries.

The expenditure control system in francophone countries is quite different, with formal controls at the commitment, payment order issuance, and payment stages of expenditure approval (see Figure 3). However, the formal duties exercised by the ministry of finance are limited largely to compliance with budget appropriations.

In the francophone countries, controls overlap, and at no stage in the expenditure process is it questioned whether or not the expenditure should take place. The treasury’s “control” of expenditures is limited to checks of the conformity of expenditure payment requests with existing financial regulations. Such checks have already been done twice by the financial controller. Also, they seldom take into consideration the amount of cash available for expenditure. Thus, although the treasury may provide a visa “good for payment” on payment vouchers, the treasury’s coffers may be empty and payment arrears arise. This is largely because, in most francophone countries, monthly cash management systems, if developed, are poorly integrated with treasury procedures.

Figure 3.Key Differences in Budget Execution and Expenditure Control

Some expenditures in francophone countries do not require formal controls at every stage. Payments for salaries and debt servicing are examples. For such payments, there are special expenditure control arrangements, usually executed by special centralized agencies. For example, control over salary payments is conferred mainly to a special division of the ministry of finance, which, in collaboration with the civil service ministry and the treasury, should make salary payments only to civil servants whose existence is verified. In practice, owing mainly to the lack of integration with personnel records, salary control is often weak. As a result, salaries have been paid to nonexistent or “ghost” workers. A similar problem has arisen in anglophone African countries (Lienert and Modi, 1997).

Special debt agencies, responsible for orderly debt payments, have been established in some francophone countries.19 These agencies—caisses autonomes d’amortissement—were set up (and later abandoned in some countries), largely to ensure that external debt was serviced, as the treasury was not always able to perform this function effectively. Despite the establishment of these debt agencies, payment arrears on debt, especially external, occurred in several francophone countries—a reflection of poor internal control and management, and/or lack of coordination within the ministry of finance (notably with the treasury).


In anglophone countries, payment is either centralized or decentralized. The basic model at independence was a centralized payment system, with subtreasuries for regional payments. However, in some countries, both payment authorization and actual payment was devolved to spending ministries. Such is the case in Malawi and Zambia. In others, payment remains centralized (e.g., The Gambia, Lesotho, and Tanzania). In the case of Tanzania, the re-centralization of the payment function in 1996 facilitated the installation of an integrated computerized accounting and payment system.

In francophone countries, it would be inconceivable for payment to be made outside the treasury. Consistent with its inheritance of the strong centralized role played by the treasury in France, all payments are effected by the treasury.

Internal Control and Internal Audit20

In anglophone countries, internal control is semi-decentralized. In several countries, the officers who perform the internal control function in spending ministries are employees of the internal audit department of the ministry of finance (e.g., in The Gambia, Kenya, Uganda, and Malawi). These officers are outposted to spending ministries to ensure compliance with financial regulations issued by the ministry of finance and are viewed by accounting officers as agents of the ministry of finance, as they report principally to the ministry of finance, with copies of reports addressed to the accounting officers. In a few countries (e.g., Ghana until recently), spending ministries recruit and manage their own internal auditors to assist the accounting officer in financial management. In such countries, internal auditors’ reports are prepared principally for the accounting officers, with copies for the internal audit department of the ministry of finance.

Francophone countries’ ministries of finance have a strong system of centralized internal control. At the expenditure commitment stage, the financial controller, who may be outposted to the spending ministry, checks the regularity and conformity of the commitment against budget appropriations. The payment authorizing officer issues a payment order to the treasury, for which a second visa (approval) is required from the financial controller. A third control is made by the treasury accountant, who makes the payment. Internal control is therefore highly centralized, as all of the above are ministry of finance staff.

In addition to an elaborate system of internal control, most francophone countries have established an internal audit unit (l’inspection des finances). These units are also located in the ministry of finance: generally they are attached to the minister of finance’s office. The inspectorates have broad responsibilities for internal audit, as opposed to the internal control activities of financial controllers, who perform routine checking. The inspectorates audit not only the financial management units located in the ministry of finance (tax/customs administrations, budget department, treasury), but any public sector entity. These inspectorates generally report directly to the minister of finance. Some anglophone countries (e.g., Uganda) also have an inspectorate division in the ministry of finance, with functions similar to those of these inspectorates.

In some francophone countries, an even higher-level agency (contrôle générale d’état), with investigative powers and responsibilities broader than the high-level inspectorate, has been established. These high-level units, under the presidency, perform audits internal to the executive branch. The closest equivalent agencies in anglophone countries are the anti-corruption offices/commissions that have been established in several countries (e.g., Nigeria, Uganda: see

Government Accounting, Fiscal Reporting, and Banking Arrangements

This section examines the similarities and differences in the accounting systems, as summarized in Box 3. It then discusses the common problem of not producing timely accounts in both regions. Banking arrangements are also reviewed.

Accounting Framework

The francophone countries’ accounting system is typically specified formally by decree, or even law.21 These decrees/laws are modeled largely on the Public Accounting Decree adopted in France in 1962 (which is under revision given the intention of France to move to accrual accounting). Accounting regulations in anglophone countries are prepared by the ministry of finance and hence can be modified easily.

The French-based accounting system is more complete, incorporating some accrual information. Although the accounts are cash based in both public expenditure management systems, in the anglophone countries, the accounting system is single-entry and does not require regular reporting of financial assets and liabilities within the year (although external and domestic debt is usually recorded, with varying degrees of quality). In francophone countries, from the payment order stage for expenditures, the accounting system becomes a double-entry one. Both revenues and expenditures, as well as financial assets and liabilities, are recorded according to a well-specified chart of accounts.22 This allows identification of bills that have been sent to the treasury for payment but have not been paid. Such information is not obtainable from the accounting system of the anglophone countries, although special recording arrangements have been put in place (e.g., in Malawi, Uganda, and Zambia) to capture this missing information.

Box 3.Similarities and Differences in Accounting and Banking Arrangements


  • cash basis for accounting;
  • poorly maintained accounting records that often lack reconciliation with bank records; and
  • annual accounts not available within statutory deadlines.

Differences francophone countries have:

  • a more formal and complex accounting framework; treasury balances are an integral part of the system;
  • accounting centralized in the ministry of finance;
  • a complementary accounting period for accounts closure; and
  • a single treasury account (with some exceptions).

Differences anglophone countries have:

  • spending ministries responsible for preparing annual accounts and providing in-year accounting reports to the ministry of finance; and
  • a multiplicity of government bank accounts (particularly in countries where payment is decentralized to spending ministries).

Spending ministries in francophone countries are not responsible for preparing accounts, which are centralized in the ministry of finance. Nonetheless, line ministries should maintain accounting records of expenditures at the commitment and verification stages; their records for commitments should be cross-checked with the “master” records held in the ministry of finance, usually the budget department. In practice, the quality of accounting information at the prepayment stage is variable in francophone African countries, although it is often better than treasury information.

Annual Accounts

In the anglophone countries, accounting officers prepare and submit annual accounts to the accountant general. The main account is the “appropriation account,” which shows actual expenditures against expenditures appropriated by parliament. The accounting officers also have to prepare statements on (1) the annual revenues collected by his/her ministry; (2) the amounts outstanding for loans for which the accounting officer is responsible; and (3) other statements, as specified by the accountant general. The accountant general consolidates all departmental accounts into the annual accounts of government. These are forwarded to the auditor general for external audit (see the next section). The ministry of finance’s financial regulations contain the deadlines for submission by the accountant general of the annual accounts to the auditor general. Although the prescribed period for completing the accounts is usually six months,23 in practice, long delays are experienced in some countries.

Spending ministries in francophone countries are absolved of the responsibility of preparing annual accounts. The preparation of annual accounts by the ministry of finance is a more complex process: a double set of accounts is prepared. First, the administrative accounts (comptes administratifs), providing details of revenues and expenditures up until, and including, the issuance of payment orders is prepared. This task is generally performed by the budget department. Second, the treasury accounts (comptes de gestion) show the account balances and transactions at the encashment stage for revenues and at the cash payment stage for expenditures. In the treasury accounts, there should be a reconciliation of stocks and flows: opening treasury balances for a new fiscal year should equal the opening treasury balances of the previous fiscal year plus all flows during the previous fiscal year. Any discrepancies between closing balances from one year and opening balances of the new year should be fully explained. However, such reconciliations are seldom performed, as the administrative capacity and/or willingness to operate the accounting system is often lacking.

There are important differences concerning the delays for the closing of annual accounts. In the anglophone countries, accounts are generally closed on the final day of the fiscal year; in practice, a few days may be allowed for processing transactions that have occurred at the end of the year. In contrast, for the francophone countries, there is a relatively long complementary period for closing the accounts. Payment orders may be issued up until the final day of the fiscal year.24 To allow payment to be made after the end of the fiscal year, a complementary period of two to three months is authorized (payments for the preceding year can be made after December 31 but recorded as if they had taken place before January 1 of the new year). Long complementary periods have the inconvenience of keeping two books of accounts open for the early months of a new fiscal year. In some countries (e.g., Togo), extensions to the mandated complementary period are made. As a result, the processing of transactions relating to the previous fiscal year continue for several months after the end of the fiscal year.

Both regions have suffered from a common problem of nonavailability of annual accounts. The IMF’s Code of Good Practices in Fiscal Transparency prescribes that final accounts should be presented to parliament within 12 months of the end of the fiscal year. This implies that accounts must be presented to the external audit agency 6—9 months after the end of a fiscal year. There are very few African countries that meet this deadline: in a sample of 17 francophone and anglophone countries, only two countries (Chad and Uganda) presented their annual accounts to parliament within this deadline.25 In some anglophone countries (e.g., The Gambia and Lesotho) the delay has been 5-10 years, whereas some francophone countries have not produced a coherent set of annual accounts for many years, if at all (e.g., Madagascar and Mauritania). However, since the late 1990s, a number of francophone countries have begun to prepare annual accounts (e.g., Benin, Burkina Faso, Côte d’Ivoire, Cameroon, Guinea, Niger, and Senegal), after years of neglect in some cases.

In-Year Reporting

In anglophone Africa, regular reporting by the spending ministries to the ministry of finance is critical for preparing in-year fiscal reports. The managers of spending agencies are required to ensure that vote books are kept up-to-date and sent regularly to the accountant general’s office for recording in the government general ledger. Spending ministries’ vote books should be reconciled with the data maintained in the accountant general’s office. In countries with manual recording systems, expenditure commitments are often poorly recorded and monthly expenditure reports are either not received in a timely fashion or are of poor quality. Only in a few countries have recording systems been computerized; these provide online data simultaneously in spending ministries and the ministry of finance (e.g., Tanzania).

In francophone countries, in-year reporting is centralized in the ministry of finance. Accounting for expenditure commitments and payment order issuance is the responsibility of the budget department.26 Full accounting records for revenues received and expenditure payments are maintained by the treasury. However, for payments, transactions are not necessarily posted to final accounts with the same nomenclature as the budget—the treasury’s accounting nomenclature is not necessarily identical to the budgetary nomenclature of the budget department. As a result, it is often difficult to track payments of specific budgetary expenditures.

Comprehensive reconciliation of accounting ledger data with bank account records is not always undertaken systematically in either region, thereby undermining the reliability of monthly fiscal reports. Nonreconciliation of data appears to be more acute in anglophone countries, especially those with a multiplicity of bank accounts (see the subsection below). This is despite the provisions of financial regulations, which lay down the need for regular reconciliation.

Government Banking Arrangements

In principle, a treasury single account, held at the central bank, is an integral component of both systems. In practice, there are a number of “special” accounts outside the treasury single account. In both regions, donors—who finance much of the capital expenditure—typically require that a separate bank account be opened, usually in a commercial bank, as they are distrustful of payments being effected by local treasuries.

In the anglophone countries that have decentralized the payment function, the number of government bank accounts may exceed 1,000 (e.g., Zambia). In such countries, each ministry has a separate account for each type of spending. Accounts have been opened in a multiple number of commercial banks, in addition to those opened at the central bank. Commercial banks are not used this way in francophone countries. The treasuries of francophone countries ensure that funds are pooled—not only those of central government, but also those of local governments, semi-autonomous public agencies, and public enterprises. In principle, this helps to manage cash balances more effectively.

Dedicated funds, each with a separate bank account, are commonplace in both regions. Autonomous agencies, set up by specific laws, receive earmarked government revenues for dedicated spending. For example, road funds managed by boards independent of the ministry of finance have been set up (Potter, 1997). Off-budget funds for receiving oil revenues were, in the past, a source of nontransparency in oil-producing countries in both regions, notably in Cameroon and Nigeria. In francophone countries (e.g., Senegal), the existence of many special accounts whose balances are not pooled results in ineffective cash management: unremunerated deposit balances build up and at the same time the government borrows domestically at high interest rates. This is especially the case in anglophone countries, where treasury bill markets are relatively well developed.

External Audit and Parliamentary Control

The external audit agencies reflect the historical inheritance from the corresponding institutions in the United Kingdom and France. In the anglophone African countries, offices of the auditor general have been set up. A major task of the auditor general is to prepare an annual report on the government’s accounts, for review by the public accounts committee (commission des finances) of parliament. The auditor general is usually appointed by the country’s president, conjointly with parliament. In most francophone countries, chambers of accounts (chambres des comptes) have been set up (e.g., in Benin, Chad, Guinea, Madagascar, and Mali); in a few countries there is no external audit agency.27 The external audit institution in francophone countries is seen as part of a triple set of controls: administrative, jurisdictional, and parliamentary.

Unlike the British-based system, the francophone countries’ chambers of accounts are legally independent of both the executive and the legislative. They are under the judiciary branch of government, being presided over by a magistrate. As in France, the president of the chamber of accounts is appointed solely by the executive branch. If available, the chamber of accounts’ annual report is normally transmitted to parliament, as well as to the president of the country. In some countries, parliament does not receive the entire external audit report.28

Auditors general have financial independence, whereas chambers of accounts are dependent on the supreme court for their annual budgets. In anglophone countries, the auditor general’s salary is a statutory expenditure. As the accounting officer for his or her office, the auditor general oversees the preparation of the annual budget for his or her office and submits it to the ministry of finance (which may cut it). After end-year, the auditor general defends his/her budget outcome in parliament. A different situation prevails in most francophone countries: since the chamber of accounts is only one of several chambers of the supreme court, its annual budget is not determined exclusively by its president. For this reason, some countries (e.g., Burkina Faso and Senegal) have set up financially independent courts of accounts and the WAEMU Commission is encouraging the other six member countries to transform chambers of accounts into independent courts of accounts. However, the case of Burkina Faso illustrates that this is not an easy process: the constitution needed to be changed in 2001 to establish an independent court. Mali, for instance, decided in 2001 to postpone the required constitutional change needed to transform its audit department (section des comptes) (of the Supreme Court) into an independent court of accounts.

In the francophone system, the chamber of accounts is required to issue a certificate of conformity that indicates that the annual accounts are internally consistent. The usefulness of this requirement is questionable, since each transaction of the two sets of accounts (the treasury’s accounts and the administrative accounts) should already have been checked by the treasury for consistency.

In francophone countries, parliaments verify—or should verify—the annual accounts by a formal law. The budget execution law (loi de règlement) records the outturns for revenues and expenditures, and compares these with the budget estimates, inclusive of any modifications to the original budget—either via reallocation between budget lines or by supplementary estimates. In principle, the budget execution law can only be presented to parliament once the chamber of accounts has certified that the treasury’s accounts and administrative accounts are fully compatible. In several countries, budget execution laws have either not been adopted at all (because annual accounts are unavailable), or have been adopted without verification by the chamber of accounts (because it has inadequate capacity).

In both regions, the follow-up mechanisms for implementing the recommendations of annual reports of the external audit agencies are inadequate. This is not a result of system design, but rather due to the lack of material and human resources devoted to the external audit function. In anglophone countries, when (if) the auditor general’s report is presented to the legislative branch, it may be reported in the media, but then quickly forgotten. Although accounting officers are required to follow up on the recommendations of the auditor general, by presenting written reports to the public accounts committee of parliament on the actions taken to address concerns raised, enforcement of such provisions is weak. The ministry of finance is also supposed to report action taken to implement the auditor general’s recommendations, but this is seldom done.

In francophone countries, the focus is on the accuracy of the accounts and approval by parliament of any difference between the original budget and the actual outturn. Although the chamber of accounts has authority to hold public accountants personally responsible for any misreporting, there is seldom any prosecution. If misdemeanors are made by payment authorizing officers—those who commit government to pay—the chamber of accounts has no authority to initiate actions against them. In France, there is a second body, a court of budget and financial discipline, to deal with non-treasury officials who inappropriately manipulate funds. In Africa, such courts have not been set up.29

Is One Public Expenditure Management System Superior?

The previous sections have shown that the main differences between the two public expenditure management systems are in budget execution, fiscal reporting, and audit. For budget preparation, similarities dominate, although it could be argued that, with respect to investment spending, the francophone system has a favorable feature—it allows carryovers of unspent commitments, thereby facilitating better forward planning of investment expenditures.

This section examines more closely the distinctive features of the “British-” and “French-based” public expenditure management systems, and discusses whether they contribute to better financial management. It then compares the common weaknesses of the two public expenditure management systems and suggests that there are additional factors causing the mediocre performance of public expenditure management systems in both regions.

Potential Strengths of the Individual Public Expenditure Management Systems

The key distinctive features of the two systems are summarized in Table 1. In the discussion below, it is argued that the French-based public expenditure management system should, in principle, give better results for achieving macroeconomic stability, an important objective for any public expenditure management system. Neither management system is geared toward obtaining efficiency objectives. Discussion of results-oriented budgeting is beyond the scope of this paper, as performance-oriented budgeting is yet to be introduced in most African countries.

Expenditure Control and Payment Arrears

It could be argued that the centralized French-based system, with controls by the ministry of finance at each stage of the expenditure process, results in better expenditure control. In the French-based system, the ministry of finance takes a lead role in controlling expenditures at the prepayment stage, and in theory, it is able to integrate information on expenditure commitments into the cash planning process. Such strong central surveillance could be considered necessary to counteract weak administrative capacity and limited accountability of line ministries’ budget managers.

Table 1.Potential Relative Strengths of Public Expenditure Management Systems
Area of Public Expenditure ManagementAnglophone CountriesFrancophone Countries
Expenditure controlSpending ministries are primarily responsible for expenditure control.Ministry of finance exercises expenditure control prior to payment.
Internal auditInternal audit partly decentralized to spending ministries.Centralized internal control and internal audit.
Accounting system and fiscal reportingSimpler accounting; no split between responsibilities of the payment authorizing officer and the accountant (ordonnateur and comptable); spending ministries are responsible for preparing the primary records of expenditure commitments and payments.Accounting framework is logical: changes in treasury balances should equal flows of transactions. Expenditure is recorded and reported at each stage; accounts payable can be identified. Centralized accounting should facilitate accurate fiscal reporting.
Banking arrangementsGreater centralization of bank accounts in central bank (no payment by spending ministries).
Fiscal rulesTo support the fixed exchange rate regime of the CFA franc, borrowing from the central bank has always been limited (it is now proscribed).
External audit and parliamentary controlHeads of spending agencies and/or ministers must defend budget outcomes in parliament.External audit agency is independent of both the executive and legislative branches.

In view of this, expenditure commitment control systems are being put in place in various anglophone African countries (e.g., Malawi, Tanzania,30 Uganda, and Zambia). However, there has been mixed success in controlling expenditure commitments and, especially, in preventing expenditure payment arrears, which is a pervasive problem in several anglophone countries. This reflects the generalized lack of financial discipline. Although expenditures could in principle be controlled by warrant withdrawal, in practice, this instrument is not used sufficiently.31

In some francophone countries, when revenues fall short of projections, expenditure commitments can be closed earlier than usual. Should it become transparent during the year that there is insufficient cash for meeting all payments, the budget department of the ministry of finance can instruct ministries to no longer commit expenditures after a certain date (e.g., mid-November instead of end-November). Similarly, the ministry of finance can stop payment order issuance before the close of the fiscal year (e.g., mid-December). Although these tools have been used in several francophone countries, their effectiveness has been limited, because only a small proportion of discretionary expenditures is postponable, important exceptions are accorded, and the instructions are not always fully enforced. Worse, in several countries, there is not an awareness of the need to freeze commitments, owing to defective cash management procedures, poor accounting information, or a lack of willingness to control expenditures.

The problem of expenditure payment arrears is also pervasive in several francophone countries. Whereas in a few countries nearly all government invoices are paid on time (e.g., Benin, Mali, and Mauritania), in other countries, the size of expenditure arrears has surpassed the worst-case anglophone countries, even exceeding 10 percent of GDP in Djibouti and Togo. This suggests that there are other important factors at play in francophone countries that are preventing effective control of expenditure commitments.

Box 4.Exceptional Expenditure Procedures in Francophone Countries

Francophone countries adhere to the following exceptional expenditure procedures.

  • Direct payment by the treasury (ordres de paiement), under which the treasury is directed to make payment without the usual a priori controls on commitments and payment order issuance.
  • Imprest accounts (caisse d’avances), which are usually reserved for small or specific expenditures, under tightly defined rules. In some countries, ministries use this procedure for many expenditures of a particular type (e.g., all defense expenditures in Madagascar).
  • Special accounts/funds, used for payments that do not require prior approval at the payment order stage.

The main objective of these procedures is to accelerate payment. For transactions conducted by these “exceptional” procedures, regularization of accounting is supposed to be rapid. In practice, such expenditures may never be recorded with clarity. In some countries, the “exceptional” procedures have become the standard way of executing nonsalary expenditure. Moreover, when arrears arise, the treasury director has discretion as to which bills should be paid first, which is an open door to corruption in the payment process.

In several francophone countries, expenditure arrears are partly caused by the bypassing of the normal expenditure control procedures. Because the system of a priori expenditure control by the ministry of finance at both the commitment and payment order stages is complex, contains redundancies, and is slow to permit payment for goods or services, francophone countries have introduced, or overexploited, “simplified” expenditure procedures that bypass the central controls (Box 4).

The lack of feedback from the treasury to the budget department and spending ministries is a particularly acute problem in francophone countries. The split between the payment authorizing officer and the accountant has an unfortunate consequence. The budget department considers that its work is complete when it sends documents to the treasury for payment. The “lack of resources” problem is perceived by the budget department to be the treasury’s problem alone. There is no feedback from the treasury to the budget department. When there are shortfalls in cash revenues, instead of examining ways in which the rate of approval of expenditures at the commitment stage could be slowed, the budget department disavows responsibility for unpaid bills. In these circumstances, unpaid suppliers approach the treasury directly to hasten payment, perhaps with some added incentives to ensure prompt transfer of funds. The lack of feedback between the accountant general’s department and budget department is also a problem in anglophone countries. In both regions, budget departments fail to provide good guidance to the treasury concerning payments that are in the pipeline.

Ineffective cash management also contributes to the arrears problem. Even in the relatively well-managed francophone countries, expenditure commitment “control” is simply a check against budget appropriations. With the possible exception of closing commitments earlier than usual at end-year, budgeted expenditure commitments are not adjusted downward during the year should cash not be available. This is partly due to inadequate coordination between the budget department and the treasury.

Internal Audit

It could be argued that the centralized internal control and audit systems of the francophone countries result in better financial management than the decentralized systems in anglophone countries. First, the internal control mechanisms associated with expenditure control are well established in the francophone countries: a body of financial controllers, under the budget department of the ministry of finance, is an essential part of the expenditure control system in all countries. In contrast, internal audit divisions of ministries of finance of anglophone countries—which provide internal auditors to spending ministries—are usually a less prominent part of the public expenditure management system. Second, in the francophone countries that have established inspectorate units, there is potential for investigating and reporting on malpractices in the public expenditure management system as a whole. Few anglophone countries have such inspectorates. Third, when human capacity is weak in spending ministries, and the rule of law/regulations is not respected, strong central control is needed—decentralization of the internal audit function requires well-trained teams of auditors, with effective oversight from the management of spending ministries. This is usually lacking in anglophone countries.

However, there is little evidence to suggest that francophone countries have more effective internal audits. According to surveys conducted in 10 francophone countries, only one was deemed to have effective internal audits.32 This finding for francophone countries is partly because financial controllers lack the necessary independence and/or willingness to enforce financial regulations. For example, it is well known that not all goods or services are delivered according to contractual conditions, suggesting that financial controllers may collude with accounting officers, suppliers, and/or receiving officers (comptables matières) who certify that goods or services have been delivered when in fact full delivery has not taken place. There may also be little effective control over overinvoicing. Concerning the internal audit unit, these bodies may not have been provided with sufficient financial, material, or human resources, or may often lack the necessary dynamism, to carry out their functions fully.

Accounting System and Fiscal Reporting

It could be argued that the francophone countries’ accounting system contributes to better financial management. In principle, the French-based accounting system is capable of providing budget managers with richer and more consistent information for financial management. First, the accounting framework is laid out comprehensively in accounting regulations and a formal chart of accounts (very similar to that used in France). The accounting system includes some accruals-basis information, with financial assets and liabilities identified in accounts. Cash flow statements are, in principle, reconciled with treasury balances. In turn, treasury accounts and bank records of revenues and expenditures are reconciled.33 In anglophone countries, accounting instructions and charts of accounts also exist, but the partial accrual information is missing. Second, in the francophone system, expenditure is recorded and reported in at least three stages: commitment, issuance of payment orders, and payment. In addition, spending ministries hold records at the accrual (liquidation) stage—when economic transfer takes place. In the anglophone countries, at best, commitments and payments are recorded. Third, the francophone accounting system is double-entry for treasury transactions, enabling accounts payable at the treasury to be identified. It is impossible to obtain data on expenditure arrears from traditional anglophone accounting systems. Fourth, since accounting is centralized, timely fiscal reporting should be easier.

The potential advantages of the francophone countries’ accounting systems are not exploited, mainly because it has proven difficult to operate and maintain solid accounts. The complexity of the accounting system, operated in most countries on a manual basis (until recently), has resulted in very poor accounting records being kept in most francophone countries. A particular problem is the artificial split between the payment authorizing officer and the accountant, which has resulted in fragmentation, and even inconsistencies, in accounting information. In most countries, budget departments maintain the expenditure records for commitments and issuance of payment orders, although some countries have institutional fragmentation even at this level.34 While treasuries maintain—or should maintain the “downstream” accounting records, including the general ledger from which fiscal reports should be generated—in many countries, timely and consistent treasury balance information is unavailable. Additionally, because several francophone countries have maintained different classification systems for the “upstream” and “downstream” expenditure records,35 it is extremely difficult to track expenditure at each stage. It is mainly for these reasons that, in the survey of francophone and anglophone countries’ accounting systems conducted in 2002, the anglophone countries performed relatively better, although the performance of these countries was also completely unsatisfactory.36

Besides the fragmentation of responsibilities within the ministry of finance, the noninvolvement of spending ministries in maintaining the primary records deprives the ministry of finance of maintaining expenditure records at the crucial accrual (liquidation) stage. If francophone countries begin to move toward implementing full accrual accounting, it will be a challenge to change institutional arrangements so that accounting is devolved to spending ministries, as is presently the case in anglophone countries.

The francophone sanction system has a flaw. More importantly, sanctions are rarely applied in both regions. In the francophone countries, the entire responsibility for preventing abuse in financial management rests on the shoulders of the public accountants, whose accounts are judged by an independent agency—the chamber (court) of accounts—to detect any malpractice. Since public accountants are responsible for checking the validity of prepayment documents received in the treasury, they alone bear “pecuniary and personal responsibility.” In contrast, the regulations usually impose no sanctions on the upstream players—especially the payment authorizing officers of the ministry of finance’s budget department or of spending ministries (in the few cases where issuance of payment orders has been decentralized). In contrast, the accounting officers in anglophone countries are, in principle, responsible for preventing overspending (see Box 2). Although there may be some sanctions in financial regulations, such as the preparation of a written report to the minister of finance when overspending occurs, such provisions are often not enforced. In many anglophone countries, the president of the country appoints the accounting officers and, should abuses occur, accounting officers are understandably reluctant to report.

Banking Arrangements

The centralization of all bank accounts at the central bank, with no payments being made directly by spending ministries, appears to be another potential advantage of the public expenditure management system in francophone countries. Some anglophone countries, too, have reinstituted a central payment system from a treasury single account, as this contributes to more effective cash management and reduces the scope for maintaining unutilized balances in multiple bank accounts. Despite this advantage, both anglophone and francophone countries abandon this principle for donor-financed expenditures, for which commercial bank accounts controlled by donors, not treasuries, are used. Also, in francophone countries, public enterprises are often obliged to deposit any surplus funds at the treasury; to the extent that the treasury allows enterprise deposit accounts to go into overdraft, the government is lending to these enterprises in a nontransparent manner.37

Fiscal Rules

A unique feature of the francophone countries is the very strict limit on government borrowing from the central bank. Such a limit aims at supporting the fixed exchange rate vis-á-vis the euro. Until 2000, the total government borrowing limit from the two regional central banks of the CFA franc zone was fixed at 20 percent of tax revenues; since then, government borrowing from the central banks has been prohibited. In fact, WAEMU countries are now obliged to repay outstanding government credits. Whereas this fiscal rule has kept inflation rates low in francophone countries, it has also resulted in cash shortages and banking crises, as formal rules were bypassed in an indirect way.38 In contrast, some anglophone countries experienced bouts of high inflation in the early 1990s, owing to central bank financing of unplanned fiscal deficits; at that time, it was relatively easy to exceed any limits on “ways and means” advances from central banks.

External Audit and Parliamentary Control

It could be argued that the system of external audit and parliamentary control in anglophone countries results in more effective public expenditure management. First, the auditor general’s offices have had a long tradition of preparing annual reports. In contrast, the chambers of accounts in francophone countries are more recent creations. Second, the chambers of accounts concentrate very heavily on the legality of expenditures and compliance with financial rules, and review of the draft budget execution law, whereas anglophone countries have a wider mandate and are moving toward efficiency and effectiveness audits. Third, parliamentary public accounts committees—which are essential for the follow-up of external auditors’ recommendations—have been more active in the democratic anglophone countries than have their counterparts in francophone countries.

In practice, in both regions, the external audit function has not been accorded the priority it deserves. In both regions, external audit offices are often deprived of the necessary financial, human, and material resources for carrying out their mandates. Very few African countries are able to present audited annual accounts to parliament within 12 months (see IMF and World Bank, 2002). Finally, when reports become available, they are not acted upon with the seriousness they deserve.

Common Weaknesses of Public Expenditure Management Under Both Systems

The francophone countries’ public expenditure management systems appear to have performed slightly better than those in anglophone countries in attaining benchmarks for budget preparation, about the same for budget execution, and considerably worse for fiscal reporting. However, the differences are not significant: statistical tests indicate that one cannot confirm (at standard confidence levels) the hypothesis that the francophone and anglophone countries’ averages shown in each panel of Figure 1 are dissimilar.

Thus, any unique and favorable features of the francophone countries’ public expenditure management system have not necessarily contributed to a consistently better performance. The main area in which the francophone countries were slightly better than anglophone countries was budget preparation. There are potentially two areas where the francophone countries’ public expenditure management systems are effectively advantageous. First, there is a distinction between existing and new policies, and second, there is a requirement for medium-term investment projections. However, the “better” results for budget preparation shown in Figure 1 are largely due to the francophone countries having relatively lesser recourse to extrabudgetary funds, fuller integration of donor-financed expenditures into the budget, and more complete budget (but not accounting) classification systems (see the various footnotes above). These differences, however, pale compared with the generalized weaknesses of budget preparation: both regions share the common problems of budgets not being comprehensive; inadequate classification systems; poor costing of specific expenditures; and an absence of medium-term budget frameworks (until very recently).

For budget execution, the two regions have broadly similar weaknesses, which are widespread. The francophone countries show more regular reconciliation of accounting and banking information. Both regions share common problems of poor expenditure control (with considerable variation in each region), weak internal auditing systems, and incomplete reconciliation of accounting and banking data.

At first sight, it appears paradoxical that the francophone countries perform worse for fiscal reporting than do the anglophone countries. It is argued above that, in principle, the French-based accounting and reporting system has several advantages over the British-based one. However, there appears to be a large gap between theory and practice. The poor overall performance of the francophone countries suggests that the accounting system is either too complex and archaic to operate and/or the rules are flouted. Francophone countries have had a particularly severe problem producing comprehensive and timely monthly and annual accounts. As a consequence, external audit institutions are unable to perform financial audits of annual accounts, let alone implement more modern techniques, such as value-for-money audits.


This study analyzes the differences between the public expenditure management systems of anglophone and francophone Africa. Concerning the budget process, the following conclusions can be drawn.

  • Budget preparation in the two regions is broadly similar, although the francophone countries’ system has two features that arguably are advantageous relative to that of the anglophone countries.
  • There are significant differences in budget execution procedures between the two systems, centering particularly around the role and powers of the ministry of finance and the degree of delegation of financial management to spending agencies.
  • The francophone countries have the advantage of possessing a formal system of recording and controlling expenditures at the prepayment stages.
  • Greater centralization of fiscal management in francophone countries should, in principle, produce better results for macroeconomic control since, throughout Africa, institutional capacity for operating budget execution and accounting arrangements in spending ministries is even more limited than at the central (ministry of finance) level. On the other hand, for efficiency in budget management—resource allocation and obtaining results from budgetary programs—it could be argued that the anglophone countries’ decentralized systems are conducive to better performance.
  • The accounting system in the francophone countries also has some potential advantages, as it should produce more comprehensive information for fiscal management.
  • The anglophone countries have inherited external audit arrangements that play a relatively more important role in the budget process than they do in francophone countries. In principle, supreme audit agencies in anglophone countries provide parliament and the public with timely information on budget execution and the integrity of annual accounts.

Although the francophone countries’ budget execution and government accounting systems have a number of potential advantages, these have not produced better results. On the contrary, the desirable distinctive features of the francophone public expenditure management system are not accompanied by better aggregate expenditure control, as expenditure arrears in some francophone countries are higher than in worst-case anglophone countries. Nor have the desirable features of the francophone accounting system—its greater centralization in the ministry of finance and production of partial accrual accounting information (treasury balances)—resulted in better fiscal reporting. Concerning the production of quality and timely in-year fiscal reports and annual accounts, the francophone African countries have had particularly severe problems.

Thus, any distinctive strengths of the individual public expenditure management systems do not appear to have influenced the performance of the system as a whole. In both regions, common weaknesses dominate—these being widespread at every phase of the budget cycle. At the preparation stage, budgets need to be made more comprehensive, by incorporating all foreign-financed projects and extrabudgetary activities into an integrated national budget that has been formulated with firm expenditure ceilings derived from a medium-term budget framework. Expenditure control needs improving in nearly all countries, to prevent arrears.

Improvement in data quality is a top priority. Full reconciliation of accounting and banking data, and more effective internal audit arrangements, are crucial. In both regions, the production of in-year fiscal reports and annual accounts is particularly weak. Although external audit bodies exist in nearly all countries, they have had a limited impact on improving public expenditure management systems.

To counter the various weaknesses of their public expenditure management systems, in 2002, the country authorities of all countries benefiting from the HIPC debt relief initiative identified specific short- and medium-term measures to implement. These action plans were drawn up in collaboration with the Bretton Woods institutions. By 2003, progress was being made in implementing these plans, with action initiated for over 80 percent of the identified measures. However, for short-term actions—those that should have been completed within 12 months—only 35 percent of identified measures had been completed in francophone countries, and 26 percent, in anglophone countries. So, one should not overestimate the speed at which desirable reforms can be implemented, especially given the generalized weak institutional capacity to introduce and sustain far-reaching changes in public financial management. Also, there is a need to impose budget discipline at each stage of the budget process; otherwise, expenditure overruns, the nonproduction of timely and comprehensive accounts, and ineffective internal and external audit activities will continue.

Since there are big variations within the francophone or anglophone groupings, it can be concluded that the disappointing features observed are due not to the public expenditure management systems themselves, but in the way they operate. Thus, even if budget legislation and implementation instructions are clarified, in the absence of changes in the attitudes of all players in the budget process—in the executive, legislative, and judicial branches of government—it is unlikely that significant improvements will occur. Critical actions will be those directed toward enhancing budget discipline and improving the accountability of all those responsible for budget preparation, execution, reporting, and evaluation.

Strong political willingness to ensure that the existing rules are enforced with rigor and that sanctions are applied where necessary will be required to bring about lasting improvements in the public expenditure management systems in both anglophone and francophone Africa. Although this is largely a domestic issue, the international community can contribute to durable solutions by not only more fully understanding the actual operation of public expenditure management systems, but also withholding assistance to those countries that persistently fail to provide their taxpayers with adequate accountability mechanisms.


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The author wishes to thank colleagues of the IMF’s Fiscal Affairs Department, particularly Dominique Bouley, Jack Diamond, Pokar Khemani, Annalisa Fedelino, and Davina Jacobs, as well as Mike Stevens of the World Bank for helpful comments.
3Lusophone countries inherited a Portuguese-based system and the Democratic Republic of the Congo, Rwanda, and Burundi inherited a Belgian system, which differs somewhat from the French-based system.
4For example, see Lienert and Sarraf (2001) for weaknesses in anglophone African countries, and Bouley, Fournel, and Leruth (2002) and Moussa (2004) for weaknesses in francophone African countries.
5These are the 15 countries listed in Figure 1, plus Côte d’Ivoire, Djibouti, Kenya, Lesotho, Nigeria, Togo, and Zimbabwe. South Africa is excluded since it is more advanced in budget management than a typical African country.
6Attiogbe (1999) recalls these principles for the case of Togo. These principles were developed during the 3rd and 4th French Republics, 1871-1958; see Chapter 1 of Lord (1973).
7See Ordonnance du 2 janvier, 1959 portant Loi Organique relative aux Lois de finances.
8See, for example, Directive No. 05/97/CM/WAEMU concerning budget laws. Available via the Internet:
9In the initial years after independence, many countries prepared national development plans. However, these were poorly linked with annual budgets and policy debates.
10Central government investment budgets are usually a subset of public investment programs, as the latter cover all public investment projects, including those executed by local governments and public enterprises.
11In most francophone countries, the revenues and expenditures of the Post and Telecommunications Offices are presented as a budget annex to the annual budget law. The budgets for the national pension funds, the debt management agency, and the social security office are not systematically included in the budget.
12Of the 10 francophone countries listed in Figure 1, 90 percent reported that “government activities are not funded through extrabudgetary resources to a significant degree” whereas in the 6 anglophone countries only one-third met this benchmark—see IMF and World Bank (2002).
13One exception is the pension funds for retired civil servants and military.
14Traditionally, this was done via the “paymaster-general,” a high-ranking official of the ministry of finance appointed by the minister for controlling the issue of public moneys to accounting officers.
15The directives by the West African Economic and Monetary Union (WAEMU) to the eight West African francophone countries contain such a provision. This system dates from the time from when there was a single governor of France in the colony. Upon independence, the governors’ powers were transferred to the ministers of finance. Similarly, in Mauritania, with the exception of the minister of defense, the minister of finance is the sole authorizing officer; in practice, this function is delegated to the budget director.
16In some countries sous-ordonnateurs exist for authorizing payment orders at the regional level (e.g., Madagascar) or in specific ministries (e.g.. Ministry of Defense, Mauritania). However, such delegated officers are still under the authority of the ordonnateur principal, usually the minister of finance.
17Statutory expenditures are those that must be paid irrespective of budget projections, because another law requires it. Included are debt servicing, salaries of certain high officials (e.g., auditor general), etc. A similar category of budget appropriations (crédits évaluatifs) exists in francophone countries.
18There were both revenue shortfalls and expenditure overruns. To deal with the former, warrant authority can be withdrawn under the British system. However, in Africa, warrant withdrawal was extremely rare.
20For fuller details on the operation of internal control and audit in Africa, see Diamond (2002). For a distinction between internal control and internal audit, see Chapter 10 of OECD (2001).
21In Mali, in addition to a decree, an Accounting Law has been adopted.
22There are usually nine standard “classes” of accounts, based on the system used in France.
23A further three months is generally prescribed for their auditing.
24In some cases, issuance of payment order may be closed earlier, e.g., December 15, rather than December 31.
26Practices vary in the countries where the financial control function is not under the ministry of finance. For example, in Madagascar, the most reliable source of information on commitments is the financial control unit under the presidency, although the data are not fully reconciled with the records of the budget ministry (there is also a ministry of finance in Madagascar). In contrast, in Mauritania, the financial control entity, under the presidency, relies on the computerized records of the budget department of the ministry of finance.
27For example, Cameroon, although an external audit agency is now envisaged.
28For example, in Mauritania, only parts of the annual report are required to be sent to parliament.
29Senegal is an exception—such a court has been established under the independent court of accounts.
30In Tanzania, expenditure commitment control is computerized. In the other three countries, manual systems have been, or are being, put in place to control expenditure commitments.
31Financial regulations of anglophone countries usually provide that the unspent balance of any warrant may, at any time, be withdrawn by the minister of finance. Once a withdrawal warrant has been issued, the accounting officer may not permit expenditure to exceed the remaining balance.
32In the same survey, only one out of six anglophone countries had effective internal audit. Internal audit was found to be one of the areas of the public expenditure management system of HIPC countries that needed the most upgrading. See item 9 of Figure 2 in IMF and World Bank (2002).
33Seventy percent of the francophone countries assessed in 2002 (see IMF and World Bank, 2002) reported that “fiscal and banking data reconciliation is undertaken regularly.” This is considerably higher than the 33 percent of anglophone countries.
34In some countries (e.g., Togo), an ordonnancement (or “finance”) department has been established, separate from the budget department. Also, financial controllers in some countries are outside the ministry of finance (e.g., under the presidency), and may keep independent accounting records.
35The lack of consistency between the budget and the accounting nomenclatures can be traced to the system used in France until recently.
36No francophone country closed accounts within two months of the fiscal year, whereas one-third of anglophone countries do so. No francophone country was capable of producing final accounts on a functional classification basis, whereas one-third of anglophone countries were doing so in 2001. In contrast, the francophone countries performed relatively better in terms of presenting the budget on a functional classification basis. This apparent paradox reflects the fact that the francophone countries’ budgeted expenditures cannot necessarily be traced through to final accounts.
37See Bouley, Fournel, and Leruth (2002) for a fuller discussion of the treasury circuit.
38Masson and Pattillo (2002) describe the indirect deficit financing in CFA franc zone countries: “Much activity was initially kept off the fiscal accounts, as governments pushed state-owned banks to make loans to public enterprises.” These banks were able to obtain refinancing from the BCEAO at concessional rates.

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