Building Africa’s capacity in managing public finance

Public finance management plays a critical role in the development of nations, and this sentiment was reiterated by Kevin Urama, the Chief Economist at the African Development Bank. Speaking to CNBC Africa's David Alabi during the graduation ceremony for the cohort of the Public Finance Management Academy, Urama emphasized the importance of effective management in driving productivity and GDP growth. The academy, established in 2022 in collaboration with prominent organizations such as the IMF, the World Bank, and the OECD, aims to enhance the capacity of African countries in managing their public finances. With a focus on providing technical assistance and structured training to public officials from various government agencies, including ministries of finance and central banks, the academy seeks to equip them with the necessary skills to ensure transparency, accountability, and efficiency in financial management. The 18-month training program commenced with 145 trainees from 45 African countries, with 52 individuals successfully meeting the graduation requirements. This initiative represents a significant milestone in building expertise in public financial management on the continent. Urama highlighted the uniqueness of the academy's approach, which leverages the expertise of development partners and global financial experts to deliver comprehensive training sessions. The inclusion of a policy lab unit facilitates knowledge sharing and peer-to-peer learning among participants, fostering a collaborative environment for addressing common challenges and identifying best practices in financial management. One key area of focus within the academy's curriculum is the mitigation of illicit financial flows, which pose a significant threat to Africa's economic stability. By addressing leakages in the public financial system and strengthening accountability mechanisms, the academy aims to curb the losses associated with illicit financial activities. Urama pointed out that Africa loses nearly $90 billion annually to illicit financial flows, underscoring the urgency of tackling this issue to preserve fiscal resources for essential sectors like education, infrastructure, and healthcare. In addition to combating illicit financial flows, the African Development Bank has embarked on initiatives to enhance economic governance and optimize revenue streams in African countries. The development of a strategy for economic governance and the dissemination of benchmark macroeconomic models for effective policy management are part of these efforts. The establishment of the African Debt Management Initiative Network further underscores the commitment to strengthening financial governance practices across the continent. Through collaborative partnerships with government stakeholders and international organizations, the African Development Bank is driving capacity-building efforts to empower African nations in managing their public finances more effectively. By equipping public officials with the requisite knowledge and tools, the Public Finance Management Academy is paving the way for sustainable development and economic growth in Africa.