Public finance management systems
Sustainable progress towards development objectives can only be achieved where sound public financial management systems are in place. The EU supports African, Caribbean and Pacific (ACP) countries in their efforts to put public finances on a firm footing.
Sound public finances are considered essential for a successful implementation of EU development policies and effective use of funding.
Many ACP countries however struggle with a huge external debt burden. The performances of their public financial management systems are assessed by the EU on a country-by-country basis and used within budget support programmes. A number of activities have been launched to help them stabilise their public finances, namely to reduce their debt to sustainable levels. This takes on even greater importance in the context of the economic crisis.
Programmes and projects
- Heavily-Indebted Poor Countries Initiative
- Vulnerability FLEX mechanism (V-FLEX)
- African Economic Outlook
- Public Expenditure and Financial Accountability (PEFA) programme
Most Heavily-Indebted Poor Countries (HIPC) are in sub-Saharan Africa. The EU participates in an initiative which provides debt relief to these countries, both as a donor and as a creditor.
Expected results include a reduction in debt and interest payments, increased spending on poverty reduction and better management of public finances.
To help ACP countries cope with the consequences of the financial crisis, the EU put in place a short-term instrument which provided for €500 million over two years (2009-2010). It supported their efforts to maintain public spending in priority areas, thereby mitigating the social impact of the economic downturn.
This report is published to provide donors, private investors and local policymakers with consistent, reliable and timely information on economic, political and social developments in Africa. It is produced by the African Development Bank with support from the EU and international organisations.
The programme aims to improve Public Finance Management systems in ACP countries. To achieve this objective, it supports measures targeting enhanced country ownership, improved alignment and coordination of donor support and a common credible information pool on performance.
Actions are based on an assessment determining the extent to which reforms are yielding improved performance and increasing the ability to identify and learn from reform success.