REGIONAL INSTITUTIONAL SUPPORT PROJECT ON PUBLIC FINANCIAL GOVERNANCE (RISPFG) ATAF
- Reference: P-Z1-K00-059
- Approval date: 13/05/2016
- Start date: 23/08/2016
- Appraisal Date: 23/11/2015
- Status: OngoingOnGo
- Implementing Agency: African Tax Administration Forum ATAF
- Location: South Africa
Project Components: The proposed project has two mutually reinforcing components:
(i) Support for strengthened budget reform and
(ii) Enhanced Capacity for Domestic Resource Mobilization. The project will support CABRI Secretariat to train senior officials of budget offices on establishing IFMIS and its use, national planning and budgeting, as well as fiscal management. It will also support ATAF on providing training to RMCs on tax administration and revenue collection.
Project description and budget Component 1: Support for strengthened budget reform (UA 2.5 million) Objective: Strengthen the institutional capacity for budget credibility, transparency and accountability. Key activities will include: "Development of an aide management framework for Senegal "Twining two countries to learn from one another on transparency and accountability; "Creation of PFM knowledge Hub (Centres of excellence); "Institutional Capability building on budget credibility. Component 2: Enhanced Capacity for Domestic Resource Mobilization (UA2.5 million) Objective: Improve domestic resource mobilization capacity. Key activities will include: "Improving Extractive Industry Taxation and regulatory framework; "Improving revenue collection by reducing miss-Invoicing or miss-pricing; "Supporting countries on setting up incentives for investors; "Setting up a Tax Unit to provide Strategic Partnership with African Institutions to provide advice on Tax; Component 3: Project Management Support (UA 500,000)This will finance monitoring and evaluation activities, audit, hiring a procurement officer, and M&E specialist, staff training and operating costs.
PRSP and CSP/RISP's priorities, key development issue(s) project is aiming to address
Alignment with the Bank's strategy: The proposed RISPPFG Project is well aligned with the Bank's Regional Integration Policy and Strategy. Specifically this operation will support governance as well as enhanced human and institutional capacity of relevant PFM and DRM institutions. RISPPPFG is aligned with the Governance and Accountability dimensions outlined in the Bank's Ten Year Strategy (2013-2022), and Pillar 1 (Public Sector and economic Management) of the Bank's Governance Stra tegic Framework and Action Plan (2014-2018) that focuses on enhancing PFM and DRM capacity at the country and regional level. This operation is also aligned with the Bank's Framework for Enhanced Engagement with Civil Society Organizations (2014-2018).
Alignment with the strategic plan of the project partners: The project is consistent with the objectives and priorities of CABRI and ATAF as laid out in strategic plan of each organizations (Annex IV). CABRI set out four programmes in its comprehensive three-year strategic plan for the period 2015/16-2017/18, namely:
(i) Fiscal and budget policy;
(ii) Transparency and accountability;
(iii) Institutional capabilities; and Network governance. ATAF business plan (2016-2020) set out three priority objections: (a) Informing and influencing the regional and global dialogue as the African voice in the field of taxation; (b) Driving the knowledge hub on African tax matters, and (c) Fostering efficient and effective African tax administrations. The proposed operation will help to delivery these priorities which are also consistent with the Bank's strengthening governance and accountability in RMCs.
Complementary and synergy with the ongoing operations: The proposed project also complements the previous support to these organizations including: support to CABRI and ATAF flagship report on "Status Report on Good Financial Governance 2011". The Bank also supported their initiative on budget reform and transparency, and tax administration reform and domestic resource mobilization for development finance in RMCs. The proposed operation will build on these activities and scale up Bank's support to take forward good public financial governance and accountable governance agenda.
Social Impact and Poverty Reduction. The strengthened ability to empower citizens and mobilize domestic revenues from taxable sources (salaried income, corporations, VAT, import and export duty, royalties, etc.) will increase countries' domestic revenues, which would, in turn, provide financing for priority public expenditures. The strengthened linkage between the tax revenue forecasting, budget formulation, and public expenditure management processes will also enhance the credibility and predictability of the budget management processes and service delivery. More RMCs will have better mechanisms for public sector planning, and expenditure management systems, which will, in turn, result in allocative efficiency, accelerate development processes, and consequently reduce poverty. The strengthened capacity of non-state actors to engage governments will promote transparency, integrity and accountability in the delivery of public services resulting in improved governance and socioeconomic outcomes.
Impact on Regional Integration. This project will contribute to the harmonization of PFM rules, processes and practices and simultaneously facilitate knowledge transfer on citizen's empowerment among the beneficiary RMCs.
Impact on Private Sector Development. Better control of the PFM policy space will create predictability of the private sector and business environment, which will in turn attract investment. Through better management of the budget management process and public expenditures, and enhanced transparency and accountability in public resource management and delivery of public services, a healthier private sector investment environment would be nurtured and this will, in turn, foster private sector investments in economic activity.
Impact on the Environment. The project will not have a negative impact on the environment. The proposed project is environmentally classified as Category 3.
Impact on Governance. This project will significantly contribute to strengthening citizens' voice to demand more accountable governments through the planned activities on the empowerment of citizens. The Project will also contribute to strengthening core PFM reforms related to better budgeting predictability, credibility and tax management. The implementation of PFM and tax reforms at both the national and regional levels will also be enhanced.
MATILA Mothobi P.S. - RDGS4