Stakeholders who attended a two-day validation conference on Liberia’s new Public Financial Management (PFM) strategy have endorsed the new system that seeks to improve the country’s economic and budgetary performance and is expected to kick off in 2017 and end in 2020.
The new strategy, which comes as a result of the current strategy that ended in June this year, will have an internal audit agency, unlike its predecessor.
The conference was held from December 16-17, and was organized by the Ministry of Finance and Development Planning.
Tanneh Geraldine Brunson, Deputy Minister for Budget at the Ministry of Finance, said improving budget credibility and comprehensiveness by strengthening the institutional capacities for preparing medium-term revenue and expenditure will bring all donor financing into the budget without hindrance.
“Today, as we validate this new strategy that covers the next four years, it is very important that we re-emphasize these areas, some in which significant improvements have been made, but still needs to be addressed,” said Minister Brunson, who spoke on behalf of MFDP Minister Boima Kamara.
According to her, there continues to be clear challenges to sustaining domestic resource generation in the country; however, she was quick to clarify that these challenges are not unique to Liberia. She named narrow tax base and a huge informal sector, lack of transparency which inhibits citizens’ willingness to comply with tax laws, as some of the challenges. Others are Illicit flows, tax havens, and transfer prices which circumvent the normal taxation process, as some of the obstacles in the sector.
“We therefore need to build capacities of relevant stakeholder institutions, not only to mobilize domestic resources but also using them effectively and efficiently by enforcing tax payment compliance, reviewing tax relief policies, enhancing revenue collection through provision of proper tax information and education,” she suggested.
Deputy Minister Brunson called on stakeholders to expand their tax base instead of raising tax rates.
Minister Brunson also called for the enhancement of public investment management by integrating externally financed projects with the domestically financed public sector investment projects on a common platform.
Emmanuel Togba, head of Public Financial Management Unit at MFDP, said the new law will also have county treasuries that would handle every financial matter in their respective localities.
According to him, most of the PFM institutions collapsed, their systems failed, and human capacity deteriorated, culminating at a situation in which there was near complete absence of procedures in the application of public resources. “With assistance from our development partners,” he said, “the government enacted the PFM Act in 2009 to strengthen greater transparency and accountability around public resources.”
The new strategy, he added, will guide the country for the next four years and, during the period, treasuries in the various counties, for example, will have their own procurement offices.
Meanwhile, the conference was attended by representatives from the Ministry of Justice, General Auditing Commission, Governance Commission, Civil Service Agency, as well as development partners, namely the World Bank, IMF, USAID, EU, SIDA, and AFDB, among others.