SOUTHERN AFRICA: Fresh hopes for investment as SADC adopts public finance management law

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The SADC Model Law on Public Finance Management is the first of its kind globally and, if implemented by the 15 member states, is expected to create an improved investment climate in the SADC region in general. Once domesticated, the provisions of the ...

, raising hopes in a region in which lack of accountability in the use of public funds has perennially jinxed socioeconomic development.

She added: “There is a multiplicity of legal and regulatory gaps across SADC member states which impede sound public financial management. Most SADC countries have such lacunae in their public financial management systems in one form or another.” “Closely related to the challenge of inadequate parliamentary control on public debt is the fact that in many SADC countries, there is no cap on the value of public contracts that can be entered into by the executive without parliamentary approval,” she said, adding that while it is legitimate for the executive to contract debt, the issue is how debt binds successive governments, often for 20 to 30 years ahead.

On the contrary, a weak or non-functional PFM system opens doors for fraud and corruption and other forms of transnational or cross-border organised crime and ultimately discourages investment, she reasoned. She said as legislation and annual budgets were adopted by the legislative arm of government, in that context, parliamentarians were gatekeepers in the attainment of these aspirations.

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The 'lacuna' in SA's public finance management system is obvious: the PFMA is simply ignored. How does the SADC Model Law intend to address non-compliance?

Who is funding?

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