GIZ Facilitates International Fact-Finding Mission on Public Finances for Vietnamese delegation

Written by Friedmut Abel and Helga Wenhold, December 2015.

Political and economic improvements have transformed Vietnam from one of the poorest countries in the world to a lower middle income country. The Vietnamese public finance management (PFM) system has gone through reforms for nearly two decades and impressive changes have taken place. However, further support in strengthening the institutional and technical capacities to manage public finances remains important.

The GIZ programme “Macroeconomic Reforms: Green Growth” provides technical assistance to the Ministry of Finance (MoF) of Vietnam on behalf of the European Union (EU) Delegation to Vietnam, as part of the capacity building component of the “EU Public Financial Modernization Project (EU-PFMO)”. Capacity building is the key to sustainable development. It increases the knowledge and skills of individuals and institutions through measures like trainings, peer-to-peer learning and study tours.

South Africa has been identified as a preferred destination for an international fact-finding mission due to its current international good practice in public financial management. The regional Good Financial Governance in Africa programme, implemented by GIZ on behalf of the German government and EU, and promoting transparency and accountability in PFM, was approached by the GIZ EU-PFMO programme in Vietnam to assist in organising meetings with relevant South African institutions and accompanying the delegation throughout. The objective of the mission was to learn about revenue forecasting, medium-term financial planning, output-based-budgeting as well as budget disclosure and transparency. The group consisted of 12 budget experts from various Vietnam government institutions such as the MoF.

The delegation met with various South African public finance stakeholders ranging from official agencies at national level, to municipal governments, non-governmental organisations and international networks over ten days in December 2015.

The first stop was the National Treasury in Pretoria. The Treasury shared its knowledge regarding the budget framework, planning and preparation in South Africa, as well as revenue management and market operations. The design and data collection for medium-term expenditure framework was of special interest to the delegation.

The International Budget Partnership (IBP), publishing the Open Budget Index (OBI), which has become a respected international reference for budget openness, presented the significance as well as methods for greater budget transparency and participation.

In terms of participatory budgeting, the non-governmental Johannesburg-based organisation, Planact added a new approach to budgeting by presenting a case study of citizens budgeting that the organisation had successfully carried out with the assistance of GIZ. Citizens-budgeting is a form of democratic participation in public finances, enabling citizens to allocate a certain amount of the annual budget according to their needs.

The South African Revenue Service (SARS), mandated by the National Treasury to collect all taxes and customs due, portrayed methods for revenue planning, modelling and scenarios. Discussions on data collection and policy making were of high interest to the Vietnamese guests. The visit to the Financial and Fiscal Commission (FFC), an independent constitutional advisory institution to Parliament, provincial legislatures, organised local governments and other organs of state on financial and fiscal matters, gave valuable insights on ways of dealing with fiscal imbalances to allow an equitable division of revenues between the three spheres of government.

Since Vietnam aims to implement improved budgetary and planning processes on the de-central level in several Vietnamese provinces, the visit to the City of Cape Town was also of high importance. It completed the overview of the South African public finance system by presenting medium-term expenditure planning on the municipal level.

Finally, close partner organisations to the “Good Financial Governance in Africa” programme, including the Pan-African networks, the Collaborative African Budget Reform Initiative (CABRI) and the English-speaking subgroup of the African Organisation of Supreme Audit Institutions (AFROSAI-E), presented their work and shared experiences about the benefits of regional networking.

The fact-finding mission to South Africa, supported by GIZ, was considered by delegate members as an important part of Vietnam’s public financial management reform. Valuable information on implementing revenue and expenditure planning methods, output-based budgeting and budget disclosure from a peer-country will assist in laying the foundation of improved public finances and good governance.

Contacts:

  • Dr. Matthias Witt   matthias.witt@giz.de
  • Friedmut Abel       friedmut.abel@giz.de
                                                        
Tshepiso Moahloli, Chief Director of Liability Management (first left bottom) welcomes the delegation to the Treasury in Pretor
                                                        
The Group Executive of Revenue Analysis at SARS, Dr Randall Carolissen (second from right) discusses revenue analysis.