Mauritius Implements 3-Year Budget Strategy to Prevent Misuse of Public Funds

In an important step towards being open and responsible about spending public money, a new change to the Finance and Audit Act has been introduced in Mauritius. This change aims to stop the misuse of public funds by making ministers and civil servants accountable for how state money is spent on projects. It sets up a stricter budget system that focuses on performance and transparency.

This reform is a key moment for public finance.

The new system called Performance-Based Budgeting (PBB), which was previously called Programme-Based Budgeting, will now be the main approach used.

PBB directly ties the money allocated to clear outcomes, something that was not enforceable before because there were no legal requirements.

The goals are straightforward:

• To make public administration more efficient by ensuring that every rupee spent leads to real results.
• To increase accountability and transparency in managing public resources.

With PBB, government departments and public agencies will have to prove how their budget requests will help achieve specific goals.

This approach aims to reduce waste and ensure that funded projects genuinely meet the needs of the people.

Economist Takesh Luckho stated, “Both civil servants and ministers will be held financially responsible for projects that were planned and budgeted but not carried out, or that needed extra funds. They will need to provide solid explanations. We won’t keep hearing about the Rivière-des-Anguilles Dam project in every budget.”

Additionally, the amendment includes planning budgets over three years, allowing for better estimates of spending and income.

This means that funding will be allocated based on expected results, making it easier to anticipate financial needs.

The three-year revenue forecasts are supposed to improve how state resources are managed and allow for a more accurate assessment of funding needs for public projects.

With this change, Parliament is expected to play a more active role in overseeing public spending. They will approve the budget for the first year of the three-year period to ensure more control and transparency in how public funds are spent.

This system aims to make sure that budget decisions are made responsibly.

Experts have noted that with this reform, Mauritius is aligning with top international standards in public financial management.

Many countries, especially those in the OECD (Organisation for Economic Co-operation and Development), use Performance-Based Budgeting to improve spending and increase budget transparency.

This approach helps create more effective public policies because funding is based on programme results. It also builds trust among citizens and investors since they can see how public money is spent and the outcomes achieved. This can help reduce deficits by keeping tighter control over unnecessary spending.

However, experts warn that the success of this reform depends on several key factors. The goals must be measurable and realistic to avoid manipulation; there must be strong enough institutions in place within ministries to adapt to new methods of performance monitoring; and there needs to be strong political commitment to make it work.

Implementing PBB will require a genuine commitment from leaders to ensure it is applied effectively, rather than just becoming a bureaucratic process.

Source: l’Express