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February 27, 2024 3:17

Latest update:January 3, 2023

Budget transparency is an opportunity not a threat

The economist leads a group of international experts supported by USAID who are in Angola to train parliamentarians and senior technicians from various ministries and public institutions in good international practices, in the areas of budgetary control and audits. To Expansão, Baly says he hopes that the next State Budget will already see results from these training courses.

He is part of the Financial Services Volunteer Corps (FSVC) that was in Luanda recently, as part of a technical assistance program to support public finance management and fiscal transparency in Angola, an initiative financed by the State Agency. States for International Development (USAID). What does this program focus on?
The Financial Services Volunteer Corps is a non-governmental organization (NGO) and our mission is to promote financial stability and help strengthen financial sectors in emerging and developing economies. We have been in operation since 1990 and operate all over the world. We specialize in public financial management, anti-money laundering, central banks and commercial banks and access to finance for small and medium-sized companies.


How do you assess the capacity of the Angolan public sector in this area of finance?
From the public servant’s point of view, in terms of human resources, they have the capacity, it’s there. They do their job. Our job is to help complement or enhance your skill set and we are bringing an international perspective, what we call international best practice. How can they do their job better in an efficient way and in a way that they meet international standards, because there are standards that all countries follow. If it’s accounting, we’re talking about IPSAS [International Public Sector Accounting Standards] for Public Accounting, or IFRS [International Financial Reporting Standards]. All these are norms that need to be followed and this is the perspective that we try to bring to Angola about how it is done abroad. You don’t have to use everything we tell you, but if you use two or three or four good ideas that can be implemented here, that’s great.


In Africa, and especially in Angola, public institutions often miss deadlines for delivering financial reports. Is this a reality that the volunteer group is trying to help improve?

Yes. We’ve been working with the Court of Auditors since the beginning of the year, as I said, to help them strengthen their audit capacity, and yes, the focus was on how to publish better reports. The last annual report of the Court of Auditors was published in 2014, but I think that a few weeks ago it published the 2015 and 2016 reports, which is a very positive sign. So we are seeing very good developments in Angola. Again, our job is really about working with public servants and showing them how to do their jobs better.


But delays in publishing financial reports are extremely negative…
Yes, if we look at investors. And also if we look at the Budget Transparency Index where everyone looks, even investors. They look at legislative issues, they look at supreme audit institutions and they look at civil society involvement in everything the government is working on. This index reviews the country every two years and everyone looks at the result. Believe it or not, the fact that a government fails to publish documents online or on time makes people wonder why. I think a government doesn’t do it for many reasons, it could be a lack of technical skills, or it could be a lack of political will, and we see that in many African countries. But these countries are starting to understand the importance of publishing on time and the importance of the Budget Transparency Index and different indices such as the Mo Ibrahim Index. It is very important for a country to position itself, and well, in the rankings. I’m not a big believer in rankings, but people pay attention to them.


Mainly foreign investors…
Yes. If you’re an investor and can’t really take the time to do research to understand Angola better, the first reaction you’ll have is to say, “okay, let me look at the Budget Transparency Index, let me look at the World Bank [Doing Business], for some indicators, for simple graphs”, which will give you an idea or at least a very broad overview of the situation in the country.


In these types of indices and reports, the business environment of several African countries is usually at the bottom of the rankings. When will we see better results in Africa?

How should I say, I don’t want to be excessively critical of African countries. Yes, it takes some time for these concepts to reach developing countries, because they are done in developed countries, where the data is already available, where there is full transparency and there is a lot of public oversight or at least there is citizen involvement in the process. political process and in economic life in general. It happens less in Africa, but that is definitely changing.


What about fiscal transparency on the continent?
It is definitely behind other countries, but it is changing. If we look at the demography in Africa, this is a very young continent, there is much to be done and it is not too late. I am very optimistic that all these concepts will start to gain ground in Africa and I think they will help accelerate the continent’s economic development.


But how can the negative picture of fiscal transparency in Africa be changed?
I think data access is very important. Data open and available, not just in print but also online, so everyone has access to it. This is very important and will open up governments to new ideas. This openness should not be seen as a threat, but as an opportunity to engage citizens, because at the end of the day, it’s money the government is managing and it needs to do a better job. I think that open data, access to information and fiscal transparency do, but I would say that financial management in general is very important. We all want more. Governments manage citizens’ money, so we all want more infrastructure and better public service in general.


The General State Budget for 2019 is already being prepared. Will there be any contribution from you in any way?

Yes, let’s help. We will be here, before the start of the new budget procedure, I believe in mid-October, to prepare. We like to train both the parliamentarians and the permanent staff of the Parliament, because they are not affected by elections. These officials are in Parliament their entire lives, so it’s good to improve their capacity as well.


What are the techniques that these permanent employees of the National Assembly will learn?

We’re going to retrain them in budget indicators, but also in budget consulting techniques on how, for example, the Ministry of Finance prepares the budget. We really improved Parliament’s ability to work better with the Ministry of Finance and how to advise it on how the budget should be allocated.


In the next budget, we will have your techniques…
(Laughter) I hope so, that’s the point. As I’ve said before, you don’t need to hear everything we say or teach, but if you can take some ideas and apply them to your daily work, that’s a win for me.


“Between 200 to 300 civil servants a year receive training”

In practical terms, what kind of assistance are you providing at the Court of Auditors?
With the Tribunal de Contas, we are helping to better prepare audit reports and how they can better conduct audits with ministries, applying international best practices on how to prepare reports and how they should be presented.


What about the National Assembly?
We are working with Parliament on the budget cycle, on budget control, on how to develop budget indicators to better track public spending. We hope to do more with Parliament, especially when it comes to doing more analysis work, in preparing reports to better inform the decision-making process.


How many civil servants are being trained?
On average, we have 30 participants for a week-long activity. In Angola, this year, we did four and we will have three more activities, which is about seven activities per year. We’re talking about 200 to 300 civil servants a year that we’re training, all civil servants at senior levels.


How many volunteers have been in Luanda for this task?
On average, we bring in two specialists per project. For the project with the National Assembly, we brought in an expert who was a Portuguese parliamentarian, Pedro Rodrigues, and we are supporting the Parliament to develop budget indicators.


What is the next step in the assistance program for Angola?
The next program will be at the beginning of October and we will train [workers of the] Court of Auditors on how to audit the Ministries of Education and Health. Two specialists from the Brazilian Court of Auditors will come here.


PROFILE: From Wall Street to Africa
After earning a BA in Economics at Columbia University in New York, United States, Mourad Baly spent eight years on Wall Street as a trader in index investment funds (ETF). He later led the institutional sales department at Axis Capital, a leading brokerage firm in Tunisia. In 2012, he assumed coordination functions in the Financial Services Volunteer Corps (FSVC) program in that country and later was assigned to the same function in the Kenya office, where he currently serves as national director and responsible for the East Africa region.


Source: Jornal Expansão

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