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© 2022 International Monetary Fund
WP/22/148
IMF Working Paper
Fiscal Affairs Department
Unorthodox Expenditure Procedures in CEMAC and WAEMU Countries Prepared by Bruno Imbert, Hoda Selim, Gwénaëlle Suc, and Qing Zhao*
Authorized for distribution by Manal Fouad
July 2022
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
ABSTRACT: This paper takes stock of unorthodox expenditure procedures in CEMAC and WAEMU countries and assesses their potential fiscal impact. “Unorthodox procedures” are defined as spending practices that bypass legal provisions governing public expenditure processes and circumvent regular controls or other budgetary rules, including those related to budget time limits, approved ceilings, or approved appropriations. The paper shows that despite PFM reforms, recourse to such procedures has persisted—resulting in the accumulation of arrears; inadequate fiscal reporting, including large stock-flow adjustments; and corruption vulnerabilities.
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| JEL Classification Numbers: | E62, H11, H50, H61, N47 |
| Keywords: | Budget institutions; budget execution; expenditure controls; fiscal reporting; public financial management; Francophone Africa |
| Author’s E-Mail Address: | bimbert@imf.org; hselim@imf.org; gwenaelle.suc@gmail.com; and qingzhao93@gmail.com |
| JEL Classification Numbers: | E62, H11, H50, H61, N47 |
| Keywords: | Budget institutions; budget execution; expenditure controls; fiscal reporting; public financial management; Francophone Africa |
| Author’s E-Mail Address: | bimbert@imf.org; hselim@imf.org; gwenaelle.suc@gmail.com; and qingzhao93@gmail.com |
Title Page
WORKING PAPERS
Unorthodox Expenditure Procedures in CEMAC and WAEMU Countries
Prepared by Bruno Imbert, Hoda Selim, Gwénaëlle Suc, and Qing Zhao
Contents
Introduction
Expenditure Controls and Unorthodox Budgetary Procedures
Unorthodox Procedures in CEMAC and WAEMU Countries
Exceptional Procedures in CEMAC and WAEMU Countries
Unorthodox Procedures in CEMAC and WAEMU Countries
Potential Fiscal Impact of Unorthodox Procedures
Policy Recommendations
References
Annex I. Monitoring Indicators to Control Unorthodox Procedures in IMF-Supported Programs of CEMAC and WAEMU Countries
BOXES
1. Expenditure Controls During the Different Stages of the Expenditure Chain
2. The PFM Principles Set by the CEMAC and WAEMU Directives
3. Emergency Spending during the COVID-19 Crisis an Associated PFM Risks
4. Examples of Unregularized Cash Advances in Burkina Faso, Central African Republic (CAR) and Mali
5. Examples Irregular Multiyear Expenditure in Cameroon and Senegal
6. Examples of Extrabudgetary Procedures in Guinea Bissau and Gabon
7. Moving Towards Regular Spending Procedures in Gabon
8. Improving Cash Management in Niger
FIGURES
1. Controls Applied at the Various Stages of the Expenditure Chain
2. Dependence on Unorthodox Procedures and Arrears
3. Correlation Between Unorthodox Procedures and Fiscal Reporting Integrity
4. Public Debt and Below-the-line Operations in CEMAC and WAEMU Countries
5. Correlation Between Unorthodox Procedures and Control of Corruption
TABLES
1. List of Reported UPs in CEMAC and WAEMU Countries,2006–2018
The authors are grateful for comments received from Alissa Ashcroft, James Daniel, Alain Féler, Stephanie Forte, Manal Fouad, Aurelie Martin, Arz Murr, and other colleagues from the Fiscal Affairs Department’s Public Financial Management II Division. An earlier version of the paper was presented as part of the FAD Seminar Series in November 2021.