Draft Public Financial Management Model Law: SADC Parliamentary Forum
Rationale
Preparing a Southern African Development Community (SADC) Model Law on Public Financial Management was necessary due to the existing legal and regulatory gaps in the current systems.
The overarching objective of the SADC Model Law on Public Financial Management is to ensure that SADC national Parliaments are enabled to conduct their legislative, budgetary and oversight functions for public financial management in a transparent, efficient way responsive to the needs of SADC citizens.
Public financial management refers to the administration and supervision exercised over the finances of the State. It is a continual and ongoing activity. However, despite a general increase in economic growth perceived in 11 out of 15 SADC Member States over the period 2015-2018, there are major symptoms of economic frailty, excessive budget deficits, loss of purchasing power for citizens, and poor debt servicing across the SADC region. In 2018, Government debt in SADC as a percentage of GDP was the highest in the last 10 years.
Additionally, in the period 2015-2018, reports of the Public Accounts Committees of more than 6 SADC countries indicated situations where public funds appropriated by Parliament may have been misused due to administrative lapses. This is reflective of root causes whereby Parliament as an institution is often unable to achieve its functions in public financial management efficiently, leading to: a lack of prudential financial planning, lack of oversight in the procurement processes of the State, and possible wastages of public funds through corruptive practices. There are several legal and regulatory gaps across the SADC region which undermine the functions of Parliament and therefore impede on sound public financial management.
The SADC Model Law on Public Financial Management will be adopted by the SADC Parliamentary Forum’s Plenary Assembly and will serve as a benchmark and guiding legal instrument for national Parliaments to reinforce their domestic legal framework on public financial management. The Model Law will be incorporated by SADC Member States through amendments conducted to the Constitution, finance laws, regulations or the Standing Orders and Rules of the National Assembly, as may be necessary.
Extracts from the Draft SADC Parliamentary Forum Model Law on Public Financial Management.