How Zambia used PEFA Assessment Reports for public financial management reforms

Can developing countries create strong Public Financial Management (PFM) systems, without a way to measure progress and make corrections? This would be like a ship sailing unchartered seas without a compass. The Public Expenditure and Financial Accountability (PEFA) Framework, a global gold standard for assessing a country’s PFM systems, can be a powerful guiding tool to help governments raise financial resources and spend them efficiently for service delivery.

Zambia is an example of a country that has been successfully leveraging the results of its PEFA Assessments which involve evidence based measurements of country’s PFM systems to provide a score card of performance against various indicators to embark on an ambitious and promising reform path.

Here are some ways the Zambian Government has used PEFA assessments so far:

• Early adoption advantage: Zambia is one of the early adopters of PEFA framework, the first assessment done as early as 2005, when the framework became available. Since they were early adopters, they are now better aware of the progress they’ve made since 2005 and what work needs to be done.
• Conducting regular assessments: Assessments were conducted regularly – in 2005, 2018, 2012, and 2017. From these assessments, they know what works and what did not.
• Getting priorities right: Successive PEFA assessments with detailed narratives helped Zambia better set and understand their priorities going beyond performance scores. The panoramic perspectives provided in the PEFA Reports were used to help develop Zambia’s National Development Plans.
• Monitoring and Evaluation: PFM reform projects, supported by the World Bank and other partners, used PEFA scores to monitor progress – an objective way to assess.
• Timely actions: The assessment report in 2012 flagged risks to reform sustainability. When the government saw that some of the gains made earlier were lost, they were able to respond immediately.
• Drill down where needed: More specific assessments and tools are used to complement the PEFA results for specific reform areas.  The TADAT – Tax Administration Diagnostic Assessment Tool – is used for revenue administration reforms; PIMA - Public Investment Management Assessment – is used to improve capital investment decision making; SAI PMF – Supreme Auditing Institutions Performance Management Framework – for Auditor General; ROSC AA - Report on observance of standards and codes Accounting and Auditing – which helps strengthen the accounting profession.
• PEFA results are credible among stakeholders: Government teams and all stakeholders now better understand the PFM reform process. In the case of the 2017 Report, the credibility of the results for stakeholders were enhanced due to:
  • The joint nature of assessment exercise done jointly with the Government and Donors (represented by the World Bank).
  • An award for the PEFA Check quality assurance credentials for the 2017 report for satisfactorily following the PEFA quality processes.

The most recent 2017 Zambia PEFA Report was launched by the Finance Minister in a public event and prompted the preparatory steps for the next generation of reforms with the Government working on its new PFM Reform Strategy based on the findings of PEFA Report. The report elevated the policy dialogue and inspired a high level of political will for reform.  Mr Edgar Lungu, President of the Republic of Zambia, gave a speech at a high-level workshop emphasizing the urgency of PFM reforms.
 
This report provided some key conclusions drawn from the 2017 results which show both progress and promise:

1. Zambia’s PFM systems significantly strengthened over the period;
2. implementation gaps still exist (laws, manuals and processes are well established, but not fully implemented);
3. reforms can be better prioritized;
4. political will is key for successful implementation of reforms;
5. reforms need to be configured to local conditions to be successful;
6. sustainability of reforms needs to be continuously monitored.

While there is a long way to go, Zambia is on the right track with strong fundamentals for a transparent PFM system in place because of how Zambia has leveraged PEFA assessments over the years. An open and orderly PFM system contributes to fiscal disciple, effective allocation of resources and efficient service delivery. It puts money to better use for citizens and brings a smile on the face of every Zambian.
The 2017 Zambia PEFA Report can be downloaded here.
 
Watch this video to learn more about the impact that PEFA Assessments have had on Zambia: