22 September 2014
* Fragile and conflict-affected states, like Sierra Leone, can maintain a strong public financial management structure if they are able to find foreign support for administrative capacity and sufficient domestic political and executive support.
*PFM legal framework, budget planning and scrutiny, still require reform attention in Sierra Leone.
Successful public financial management (PFM) is one of Sierra Leone's main achievements since the end of the civil war which plagued the country during the 1990s. The ground was set before the end of the conflict when the country's Ministry of Finance and Economic Development showed a commitment to develop the necessary administrative and technical capacity to develop and maintain a relatively strong PFM system. Improvements are still needed, but the country's successful performance in the midst of extremely precarious conditions is a case study of how timing, commitment, and capacity are fundamental to PFM reform.
Capacity, commitment, international aid
The strength of Sierra Leone's PFM system is based on a number of factors. First, the country already possessed strong administrative and technical capacity by the end of civil war. This was due to the centralized management system that was operated by a staff of foreign-funded experts, including the Accountant General, who designed and administrated the financial management and accounting system. This led to the creation of a 'parallel civil service' staffed with highly-motivated, influential, educated, better-paid Local Technical Advisors (LTAs) with a significant interest in maintaining good relations with international partners.
This initial capacity was matched by enthusiasm by certain political actors, such as the current Minister for Foreign Affairs who has been able to use his background as an economist and his knowledge of the national political landscape to push the cause for PFM reform inside the cabinet.
Foreign donors--such as the UN, IMF, World Bank, UK Department for International Development, the EU--also contribute through technical and financial support. Technically, their role is present both through the LTAs and strategic support--such as the intermediation by the UK--s DFID following the forced exile of Sierra Leone's People's Party in 1997. Financing from foreign donors account for between 25-30 per cent of government total expenditure, and as such are the main source of funding for PFM reform. This...