Liberia: House Amends PFM Law to Push Decentralization
... When concurred by the Senate, it will show the nation's commitment as a government and people to implementing the Local Government act of 2018 in accordance with the Revenue Sharing Bill.
The House of Representatives has amended the Public Financial Management (PFM) Act of 2019 as part of an effort to enhance the country’s decentralization program that aims to share revenues with local governments for the development of the country.
The PFM law is one of the financial instruments of the Local Government Act (LGA) of 2018. The amendment of the PFM law is intended to ensure that fiscal resources, functions, powers and responsibilities are transferred from the Central Government to the county governments to encourage greater participation of citizens.
When concurred by the Senate, it will show the nation's commitment as a government and people to implementing the Local Government act of 2018 in accordance with the Revenue Sharing Bill.
The Revenue-sharing bill which has been passed by the legislature provides equity in revenues annually transferred by the central government to local governments for undertaking development activities as well as for implementing devolved and delegated functions in furtherance of decentralization.
The Bill further provides equitable sharing of natural resource revenues between the Central Government and Local Governments, as well as between Local Governments and sub-local government units; and creates incentives that encourage Local Governments to be effective and efficient in tapping their own revenue mobilization potential.
On September 8, during the 10th Day Special Sitting of the House 23 lawmakers voted to amend Sections 2,4,5,6,8A, 8B, 10, 14, 35, 36, and 45 to enable fiscal decentralization as contemplated by the LGA.
What’s in the amended 2019 PFM LAW
The amendment of the PFM law is also intends to resolve the inconsistent provisions that necessitate amendments to ensure harmonization with the decentralization policy. The amendments to the PFM Law will enable the central government to support its goal of sustainable fiscal decentralization at the local government level.
It is further meant to ensure effective and efficient management, accounting, and control of public financial transactions and operations of the Republic of Liberia.
Besides the establishment of a consolidated fund; a development fund will also be established and money in the development fund shall provide for an annual transfer to local governments for the purposes of capital investment and development support.
"There are established earmarked transfers for devolved and delegated functions for local governments to finance functions and responsibilities devolved and delegated from central government," the amended PFM law said. "There is established a general fund from which the central government shall provide an annual transfer to local governments for the purposes of ensuring general administration and operations; money appropriated for the purpose of the general fund by the Legislature in the National Budget."
Meanwhile, the amended PFM law has been transmitted to the Senate for concurrence by the House's Chief Clerk as mandated by Presiding Officer, Deputy Speaker, Cllr. J. Fonati Koffa following the withdrawal of the motion of reconsideration by Montserrado County District #9 Representative, Frank Saah Foko, Jr.
Foko won the right to the motion after it was contested by Nimba County District #5 Representative, Samuel Kogar, that any member who voted doesn't have the right to a motion of reconsideration.