Public finances

© GIZ/Lucas Wahl

GIZ supports ministries, administrative bodies and non-state actors in shaping public finance reforms. The objective is the more effective use of public resources.

Ideally, a country’s revenue system reflects a consensus of the whole of its society, and adequate fiscal and customs revenues should finance development goals and provide incentives for economic growth. GIZ advises its partners on creating a fair, transparent, effective and efficient revenue system.

A transparent budget and contract award system with functioning internal monitoring ensures that public resources are used effectively and benefit the population. External monitoring by a country’s public audit body, independently of the state, also plays a key part. Bodies of this kind audit the uses of state funds, making an important contribution to the fight against corruption.

However, in many countries, the public finance system is not fulfilling its role. The state loses revenue to illegal finance flows, tax evasion, inadequate legislation and weak fiscal bodies. Only wide-ranging reform can help in such cases. Through its Good Financial Governance (GFG) concept, GIZ offers these countries advice on reforming their public finances. It takes a comprehensive approach, involving not only technical but also normative aspects, and addressing the political-economic framework in reform measures. In decentralised countries, advice on reforms also takes local authorities into consideration: good financial management lets them boost their revenues, while effective management of those resources enables them to improve their services and invest in sustainable development.

GIZ has provided advice on public finance reform to countries around the world, for over 30 years. Its support is aimed at ministries of finance, fiscal authorities, government audit bodies, parliamentary finance and audit committees, procurement bodies, local authorities and development funds. Public finance advice combines technical expertise with methodological expertise in the areas of change management and know-how for organisational development and policy advice.

Additional information