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Achieving accountability and trust in public finance management, By Innocent Okwuosa

Achieving accountability and trust in public finance management, By Innocent Okwuosa

It is…recommended that both the federal and state governments, including their Ministries, Departments and Agencies (MDAs) embrace accountability leveraging on both PEFA and ICAN Accountability Index. States should endeavour to implement accrual-based IPSAS and employ chartered accountants to help drive proper implementation.

During a recent annual accountants’ conference organised by the Institute of Chartered Accountants of Nigeria (ICAN) in November, 2021, the guest speaker, Mr Adesina of the African Development Bank (AfDB) captured the notion of “trust” correctly when he stated that:

Leadership is an investiture of trust… Trust is a powerful, evocative, and multifaceted word. At the level of federal, state, and local governance, trust implies confidence and faith in, and reliance on government, by the people. It is an assurance that what leaders and government officials promise, they will, of a certainty, deliver. When leaders waiver, or do not deliver on promises and legitimate expectations, trust is broken.

It is through accountability that leadership can demonstrate to citizens and business partners that they do what they promise and can therefore be trusted. Citizens and businesses partners repose trust and confidence in any government that subjects itself to accountability.

The concept of accountability is therefore about how leaders show that they have delivered on their promises and the legitimate expectations of citizens. In layman’s language, Joannides (2012) tells us that accountability can be understood as a requirement to give an account of oneself and of one’s activities.

Accountability aids public finance management (PFM) and begets trust in it. The centrality of good PFM for global development has been acknowledged. In accord with widespread international agreement on the importance of PFM, the Public Expenditure and Financial Accountability (PEFA) programme was initiated in 2001 by seven international development partners.

Lack of accountability and transparency in public finance management has stunted the growth and development in every sector of the economy of Nigeria. Multilateral agencies look up to accountability and transparency as yardsticks for dealing with government. To address this problem, the Institute of Chartered Accountants of Nigeria (ICAN) introduced the ICAN Accountability Index (AI).

Since 2001, the PEFA has become the most widely acknowledged standard for PFM assessments. PEFA 2016 is the latest framework and has seven pillars, which are as follows: (a) budget reliability, (b) transparency of public finance, (c) management of assets and liabilities, (d) policy based fiscal strategy and budgeting, (e) predictability and control in budget execution, (f) accounting and reporting, and (g) external scrutiny and audit. The seven pillars have 31 indicators used in scoring and assessments.

The poor performance of Nigeria in the PFM is evidenced by the assessment…

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