The Southern African Development Community Parliamentary Forum (SADC PF) has embarked on a consultative process to enact the Model Law on Public Finance Management (PFM) in the region. This to improve the efficiencies of state entities charged with the task of collecting, managing and spending tax revenues, and to combat fraud, corruption and mismanagement of public resources.

The Secretary General of the SADC PF, Ms Boemo Sekgoma, gave an overview of the aims of the undertaking, which will set legislative benchmarks for entities that have an authority to collect, spend and managing public finance in the region. The collections and management of revenues is linked to how the state is managed and its capability to execute its mandate, Ms Sekgoma said.

The law will ensure that those entities charged with public finance management are “not only reduced to collecting and managing revenues, but also will also play an advisory role on policy to prevent money laundering, funding of terrorism, and to prevent illicit financial flows.” They will become investigating units with the power to combat any suspicious transaction that can cause harm to public finance.

This intervention is important because taxes remain the main source from which the states derive their revenue, Ms Sekgoma emphasised. Without effective tax collection, member state governments will not be able to perform as they should. We have this process in place to ensure that “there are reforms to collecting and accounting to meet government service delivery mandate,” she said.

The Executive Secretary of Southern African Customs Union, Ms Paulina Mbala Elago, also addressed the session. Good public financial management has the power to reduce poverty and therefore, “available scarce resources must be deployed prudentially for robust service delivery in the region”, Ms Elago said.

The model law will prevent corruption and facilitate compliance to trade laws. It will also be “a key driver in planning, allocation, adoption of right budgeting approaches to ensure that the citizens of member states of SADC PF get value for money out of their tax revenues,” she commented.

Well administered public financial management will also contribute to an “ideal investment climate and close the door for fraud, corruption because they are disincentives to investment,” Ms Elago said.

The model law is an opportunity for SADC member states to identify and close any policy, legal and regulatory gaps allowing best practices to emerge to tighten resources mobilisation, set standards and harmonise regulations across the region.

A United Kingdom-based lawyer specialising in legislation, Mr Daniel Greenberg, impressed upon participants that the drafting of this law sought to balance simplicity and certainty, without losing its fundamental object of enacting legislation that will reshape public financial management in the SADC PF region. “We want a law that everyone will understand. And there should be no excuses that those in charge of it or who transgress to say they did so because they did not understand it.”

Mr Greenberg said the law should have clear parameters that will make it clear when abuse of public finance occurs and eliminate uncertainty in the courts when dealing with such crimes. To reinforce simplicity and certainty, “we need to have a series of new overarching offences based on the principles that people understand.”

The primary goals of the model law, Mr Greenberg pointed out, are to foster accountability, transparency, independence and modernity. Accountability, he said, “should apply in the collection of tax revenue, in the prevention of unauthorised expenditure, and in promoting ethical accounting procedures.”

To achieve this, he said, public financial management must be professionalised to ensure that professional personnel are hired, accounting and tax procedures are followed, and financial leakages are stopped. To achieve independence, the draft proposes that revenue collection and management is kept independent from the state. As for modernity, the law makes provisions for the management of crypto currency to avert the illicit financial flows that bedevil Africa’s economy, Mr Greenberg stated.

The model law also advises member states to give legal protection to whistle-blowers and suggests new offences of misconduct. At the centre of the law is parliamentary oversight. “Public accounts committees of SADC PF must play an active role in conducting robust oversight in pursuant of its principles,” Mr Greenberg concluded.

Abel Mputing
22 February 2022