The Government of Ghana has for several years pursued public financial management reforms as part of wider efforts for enhancing efficiency, transparency and accountability so as to improve the well-being of the citizenry.
In view of this, series of review workshops have been conducted on the efficiency and effectiveness of the Activity Based Budgeting (ABB) System since its inception in 1998 by MOFEP and other stakeholders including World Bank and IMF. It has been realised that the ABB does not focus on service delivery, rather on expending of the Budgets by MDAs.
Again, it does not show any clear link between Strategic Objectives of the country and what MDAs set out to do as per their mandate. Furthermore, ABB does not provide the enabling environment to hold managers accountable for the scarce resources they expend. Additionally, it does not allow for performance measurement.
It is in this light that, the Government of Ghana and the Ministry of Finance and Economic Planning in the year 2010 introduced Program Based Budgeting on pilot basis which promises to address the above mentioned deficiencies of the ABB.
Seven MDAs namely, Ministry of Education, Ministry of Health, Ministry of Communication, Ministry of Tourism, Ministry of Roads and Highways, Ministry of Food and Agriculture and CHRAJ were first piloted to facilitate the preparation of their PBB. With the remaining MDAs being added.Training sessions are being earmarked for this purpose.
This is being applied at a more aggregated level which will closely aligned with the way MDAs manage their resources and activities. The new approach will simplify the process of budget preparation and allow MDAs to be more strategic in their approach to budget management. The MDAs are working with PBB and the traditional ABB concurrently for 2012 budget with a full rollout in 2014.
The PBB specifications will be fully integrated into the Ghana Integrated Financial Management Information System (GIFMIS). This will enable MDA expenditures to be monitored and accounted for against the PBB Structure.