Government adopts strategy aimed at clearing and preventing the accumulation of arrears

Minister of Finance Dr. Amin Adam, has stated that the government has created and approved for implementation, a comprehensive strategy targeted at clearing and preventing the accumulation of arrears.

The policy, which is known as the Spending Arrears Clearance and Prevention Strategy, is in direct response to the constant accumulation of arrears under the Public Financial Management (PFM) Act, 2016 and five-year Public Financial Management Strategy: 2022-2026.

Speaking at a sensitization workshop held for heads of covered entities to ensure compliance and effective public service delivery, the finance minister highlighted some challenges associated with the effective execution of planned budget operations occasioned by the rigidity of the budget.

He cited examples where some revenue lines are earmarked for Statutory and Other Earmarked Funds, unbudgeted expenditures, weak commitment control and poor expenditure management including issues of MDAs committing government without recourse to the Ministry of Finance and the Medium-Term Expenditure Framework.

He also stated instances of the non-application of PFM sanctions to serve as a deterrent to culpable officials as part of the reasons for adopting the Spending Arrears Clearance and Prevention Strategy.

“Without doubt, the socio-economic implications of accumulating unsustainable arrears are enormous and far-reaching.

It impacts the operations of businesses and enterprises whether small or big sized, undermines financial sector performance, raises the cost of doing business for government and reinforces the view that more is required to level-up with the expectations of sound public finance management,” the finance minister said.

He continued, “Ultimately, it challenges the effectiveness of fiscal policy and results in poor public service delivery to our citizens.”

Dr. Amin Adam pointed that measures contained in the approved Strategy Document to prevent the accumulation of arrears include;

• The enforcement of sanctions under the PFM Act and its Regulations;

• Publication of league tables for compliance with commitment control measures enshrined in the PFM Act;

• Incorporation of clauses of GIFMIS purchase orders in national tender documents;

• Full roll-out of GIFMIS to all Covered Entities outside the system, among others.

The finance minister emphasised increased sensitization to all covered entities to ensure they are abreast with the current policy directions on the accumulation of arrears and the Strategy as a whole.

“It is therefore important to sensitise Principal Spending Officers (Chief Directors and Heads of the Covered Entities) and Directors who are responsible for the day-to-day implementation of the National Budget on the contents of the Strategy Document especially the measures to prevent the accumulation of further arrears,” he concluded.

MA/NOQ