Joint Staff Assessment of Progress in Implementation: Focus on planning, budgets and execution in Southern Sudan - PowerPoint PPT Presentation


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Joint Staff Assessment of Progress in Implementation: Focus on planning, budgets and execution in Southern Sudan


Joint Staff Assessment of Progress in Implementation: Focus on planning, budgets and execution in Southern Sudan International Monetary Fund and World Bank – PowerPoint PPT presentation

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Title: Joint Staff Assessment of Progress in Implementation: Focus on planning, budgets and execution in Southern Sudan

Joint Staff Assessment of Progress in
Implementation Focus on planning, budgets and
execution in Southern Sudan
  • International Monetary Fund and World Bank
  • Sudan Consortium
  • Juba, March 21 2007

  • 1. Context The MDG challenge
  • 2. Key achievements
  • 3. Systemic governance constraints and priority
  • Public Financial Management
  • Public Sector Management
  • Decentralisation
  • 4. 2007 budget highlights and new emerging

Southern Sudan Scale of the Challenge
  • Major challenges include the low starting point,
    sharp regional inequalities in outcomes and
    extremely limited access to services
  • Primary school attendance rate ranging from 45
    in Western Equatoria to 4.3 in Unity, but with
    half the Southern States below 10
  • Births delivered by skilled personnel ranging
    from 59 in Western Equatoria to less than 20 in
    North Bahr El Gazal

Primary Attendance Rates, Southern Sudan, 2006
Rapid Progress Needed to Reach the MDGs
Overview of Key Messages
  • GOSS has made significant progress including in
    terms of
  • Establishment of institutions at all levels since
    July 2006
  • More active accountability (eg. Parliamentary
    engagement in review during 2007 budget process)
  • Capacity building efforts (eg. State Parliaments)
  • Sectoral programs launched, representing major
    partnerships with international community through
  • Increased and renewed commitments in 200 Day
    Action Plan
  • However, delays in some key decisions created
    lags, and progress insufficient relative to the
    scale of the goals and challenges ? priorities
  • Building institutions for good governance
  • Establishing basic infrastructure links, enabling
    productive activities and delivery of basic
  • .

3.Systemic Governance Constraints
  • 1. Lack of capacity, including at lower levels of
    government, remains an overriding constraint
  • 2. Weak public financial management systems and
    controls pose a risk to the whole development
    program ? adverse effects on implementation of
    plans, accountability and transparency.
  • 3. Civil service effectiveness undermined by the
    lack of a functioning payroll, shortages of
    qualified staff and the absence of proper
    procedures for recruitment and incentives, and
    difficult working conditions
  • 4. Fiscal decentralization not operationalized
    given lack of clarity on functions and finances
    at different levels of government and low
    capacity in states and counties

Progress on Paris Commitments Public Financial
  • Appointment of accounting and procurement agents
  • Single Treasury System operational since late
  • Capacity building in PFM initiated training
    facilities in accounting, budget and procurement
    being provided in GATC, Juba
  • Several major sector programs follow
    international (WB) procedures for procurement and
    financial management
  • Autonomous commissions in place with enhanced
    budgetary allocations and improved facilities.
  • Significant step up in inclusiveness, impact and
    level of the budget debate

Priorities Public Financial Management
  • Enact legal framework for PFM (Public Finance and
    Accountability Act under preparation) including
    for states
  • Step up efforts on budget implementation
  • Fully operationalise cash management arrangements
  • Align cash release with budget priorities and
  • Establish effective payroll control
  • Establish commitment control for capital
  • Cease extra-budgetary spending ? require ex ante
    approval or supplementary appropriation measures
  • Capacity building in PFM and procurement at all

Priorities Public Financial Management
  • Reporting
  • More timely and accurate accounting and reporting
    mechanisms need to be in place
  • Quarterly reports to the SSLA on budget
    implementation (nothing now, planned from April)
  • Regularise public expenditure reviews of plans
    and actual spending for scrutiny by parliament,
    media and civil society
  • More generally, better dissemination of
    information, and support to accountability roles
    of parliament, media and civil society

Public sector management
  • GoSS ministries and state governments established
    and operational with budget allocations, and
    staff in place under interim regulations
  • An estimated 65,000 persons being on GoSS
    payroll, and estimated equal number in the
    states. But actual number unknown, and no formal
    verification of the payroll and large numbers of
    unclassified staff
  • In adequate information and reporting systems
  • Plus very large personnel costs possibly
    unsustainable, including future pension

Priorities Public sector management
  • Compile formal and comprehensive payroll of
    regular and appointed staff, and verify numbers,
    at all levels of government
  • Results should inform measures to rationalise
    current payments
  • Streamlining of personnel numbers, at all levels,
    in light of needs and revealed numbers ? develop
    appropriate redundancy rules and packages
  • Establish legislative and regulatory framework
    for the public service
  • Implement standardized administrative and
    personnel management processes
  • Operationalize autonomous commissions by
    formulation of regulations, adequate staffing and
    technical support
  • Extension of support to states
  • assist states in establishing legal framework for
    public sector management
  • formulate policy for integration and
    rationalization of state workforce
  • build capacity of GoSS staff for effective
    service delivery

Decentralisation -- status
  • Constitutional framework established, but
  • No clear strategy or policy, and no legislative
    framework for operationalisation eg no
    assignment of functional expenditure
    responsibilities across levels of government
  • In 2006 and 2007, fiscal transfers to states made
    on very crude basis equal absolute amounts
    (10m) without regard to population, needs or
    local revenue and other criteria thus, for
    example, in 2006 block transfers below payroll
    needs to enable payment of teachers.
  • Southern FFAMC mandate is limited..
    Responsibility for developing transfer formula
    etc not yet taken up
  • No budgets at state level, no fiscal calender and
    no reporting or accounting by states for monies
    received general paucity of data.
  • Risk of over-centralisation of resources (in
    2006, bias of public investments toward the
    centre (Juba)) and planning decisions (lack of
    state involvement)
  • Core capacity (for planning, implementation and
    reporting) at state and county levels is weak

Priorities Decentralisation
  • Strategy for transition to the ICSS vision of
  • Determine functional and administrative roles for
    all three levels of government consistent with
    available financial, human resources and physical
  • Clarify framework for fiscal decentralization
  • Criteria for transfers need for debate on
    options (needs- versus incentive-based)
  • accountability mechanisms,
  • role of S-FFAMC, MOFEP, etc
  • Support states in designing legal and
    administrative frameworks consistent with the
    phased decentralization ? roll-out capacity

4. Budget allocations
  • Discussions should be informed by analysis of
    2006 performance relative to plans and goals
  • 2006 budget plan broadly consistent with JAM,
    but evidence at mid-year suggested significant
    deviations in execution, with large
    extra-budgetary expenditures, misalignment
    relative to approved allocations, etc Final year
    accounts, when available, require full analysis
    and scrutiny.
  • 2007 plans should be considered in this context

2007 Budget Highlights
2007 Budget highlights
  • Large wage bill amounting to at least half of
    total budget
  • Capital spending of 450 million, of which about
    10 m. is transfers to the states
  • Complemented on-budget by MDTF (additional 88
  • No reserves rolled over from 2006 (cf at
    beginning of 2006, amounted to 460m), planned
    level for 2007 minimal (48m)
  • Real risks of running into aggregate deficit

Emerging challenges
  • Revenue -- shortfall relative to needs, plus need
    to diversify the base ?
  • Develop non-oil revenue base
  • Legislative framework and collection capacity
    needs to avoid disincentives to the nascent
    private sector
  • Significant challenges in meeting ambitious
    non-oil revenue targets
  • ? Risk of aggregate imbalances budget
    anticipates rise in non-oil revenue from less
    than 4 m. in 2006 to 235 m. in 2007

Emerging challenges Debt strategy
  • Short term borrowing for liquidity purposes is
    not justified -- it is expensive, and would not
    be needed if the public financial management
    system was operating effectively.
  • Potentially justified for projects with high
    enough economic and social rates of return,
    especially for large or lumpy investments
    expected to have high returns, but exceed current
    liquidity. However
  • only at concessional rates (grant element gt 35)
    and long maturity
  • systems need to be developed to govern and
    discipline borrowing decisions at the cabinet
    level, and subject to scrutiny by SSLA
  • every proposal should be subject to independent
    and professional scrutiny to ascertain the legal
    and financial soundness of the loan and
  • decisions need to be guided by, inter alia,
    repayment capacity.

Emerging challenges Management of the defence
  • Large budget allocation for defence, but SPLA
    currently operates without modern accounts, no
    payroll, and no system of procurement, or a fully
    functioning finance department that can provide
    oversight and ensure proper accounting and
  • ? Need to set up and design of a transparent
    public financial management system including cash
    management, payroll, payment system, procurement
    system, auditing and pension systems.
  • Elements
  • Establishing the financial management rules and
    procurement regulations to govern the defence
    sector, linked to the overall regulations
    developed for the GOSS
  • Organizational structure, including a personnel
    management database, an electronic payroll
  • Rules and regulations to operationalize the
    system (manuals and procedures).
  • Capacity building

  • Southern Sudan has massive needs and faces
    enormous start-up costs in enabling the basic
    infrastructure and services required to get the
    economy going. Needs exceed available revenue ?
    critical role of sound planning, implementation
    and reporting to ensure best possible use of
    relatively scarce public resources.
  • 2007 an especially challenging year in making
    strategic choices, and implementing commitments
    on public financial and public sector management,
    and effectively putting recent innovations like
    procurement agent and single treasury system
    smoothly into effect.