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Business News of Tuesday, 31 August 2010

Source: GNA

Government embarks on public financial management reforms

Accra, Aug. 31, GNA - Government has embarked on rigorous public financial management reforms to address weaknesses in the sector for better transparency and accountability regarding the use of public funds.

In addition, government is to set up a functioning unit within the Ministry of Finance and Economic Planning (MOFEP) as part of fiscal decentralisation efforts, to deal with intergovernmental fiscal relations and to ensure that actions of local government, especially in terms of borrowing, do not impact negatively on the national budget.

Mr. Seth Terkper, a Deputy Finance Minister, announced this on Tuesday, at a stakeholders' validation seminar on the review of Metropolitan, Municipal and District Assemblies' (MMDAs) budgeting processes in Accra.

The seminar was to discuss a draft report by a group of consultants on MMDA's development planning and budgeting processes for better harmonised and co-ordinated national budgeting processes towards decentralisation.

It was organised by MOFEP and supported by the German Technical Co-operation (GTZ).

Mr Terkper said a good public financial management system, driven by efficient planning and budgeting system, had direct bearing on effective public service delivery.

He said that there was the need to ensure planning and budgeting at both national and sub-national level, guided by the nation's development process.

Mr Terkper underscored the critical role reporting and accounting of financial resources played in ensuring that public funds were managed judiciously stressing it enhanced the confidence of the citizenry.

He gave the assurance that government would continue to attach importance to prudent measures of managing the country's resources especially with the discovery of oil and gas in commercial quantities.

Mr Terkper said government was committed to ensuring that utilisation of national resources was consistent with fiscal prudence and sound financial spending.

"If the resources are not used well, it would be difficult to manage the inflows that come from the oil industry," he added.

Mr. Terkper said government was committed towards cementing poor linkages existing between national budgeting and sub-national budgeting processes and personnel gaps in some MMDAs.

He expressed dissatisfaction at the manner public resources were managed at all levels of government, adding that there was a huge disconnection between management of funds at the local level and national level.

"There are different streams of funds going to the assemblies and the ministry has very little information as to the utilisation of these resources and how they impact on the macro economy," Mr Terkper said.

Mrs Effie Simpson Ekuban, Chief Director, MOFEP, disclosed that the Ministry had started the 2011 budget preparation process and urged participants from the MMDAs to take interest in both the process and government priorities identified for next year.

Participants at the workshop included representatives from Ministries of Local Government, Education and Health.

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