2024 Fiscal Transparency Report: Mozambique ‘made significant progress’ toward meeting minimum requirements of fiscal transparency – U.S. Department of State

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2024 Fiscal Transparency Report: Mozambique ‘made significant progress’ toward meeting minimum requirements of fiscal transparency – U.S. Department of State

3:52 CAT | 20 Sep 2024

in file CoM

On Thursday, September 19, the United States Department of State released the 2024 Fiscal Transparency Report. Annual reviews of the fiscal transparency of governments that are eligible to receive U.S. assistance help ensure appropriate use of U.S. taxpayer funds.

The US State Department concluded that, of the 139 countries (and the Palestinian Authority) evaluated, 72 governments met minimum requirements of fiscal transparency and 68 did not meet the minimum requirements of fiscal transparency. Of these 68, however, 23 made significant progress toward meeting the minimum requirements of fiscal transparency.

Here is what the 2024 Fiscal Transparency Repor says about Mozambique:

The US State Department assessed Mozambique “as not meeting the minimum requirements of fiscal transparency for 2024”, although having made “significant progress toward meeting those requirements”.

Mozambique, “Assessed as not Meeting Minimum Requirements of Fiscal Transparency”, has its “Significant Progress” detailed in the “Specific Assessments” section of the Report, as well as some of the “Steps Mozambique could take to improve fiscal transparency”

The “Specific Assessments” section explains which governments and authorities did not meet the Department of State’s minimum requirements of fiscal transparency during the review period and includes specific recommendations of short- and long-term steps they can take to improve fiscal transparency. For those determined to have made significant progress toward meeting the minimum requirements [as is the case with Mozambique], the section also includes a brief description of such progress.

Mozambique

During the review period, the government made significant progress by eliminating off-budget accounts and subjecting them to adequate audit and oversight, and by providing a sound legal framework for the country’s new sovereign wealth fund. It published its executive budget proposal, enacted budget, and end-of-year report online within a reasonable period. Publicly available budget documents provided a complete picture of the government’s planned expenditures and revenues, but it did not include all allocations to and earnings from state-owned enterprises. Budget documents were not prepared according to internationally accepted principles, and it did not break down expenditures to support executive offices. Information on debt obligations, including major state-owned enterprise debt, was publicly available. For portions of the budget that were relatively complete, information was generally considered reliable. The supreme audit institution met international standards of independence. It audited the entire annual executed budget and audit reports contained substantive findings. The government specified in law or regulation, and appeared to follow in practice, the criteria and procedures for awarding natural resource extraction contracts and licenses. The government made basic information on natural resource extraction awards publicly available.

Steps Mozambique could take to improve fiscal transparency include:

Ensuring budget documents include detailed information on allocations to and earnings from state-owned enterprises;

Publishing expenditures to support executive offices;

Ensuring actual revenues and expenditures reasonably correspond to those in the enacted budget;

Subjecting military and/or intelligence budgets to parliamentary or civilian public oversight; and

Preparing budget documents according to internationally accepted principles.

Our Economic Officers around the world work with local governments to ensure fiscal transparency, a key measure to promote sound governance and counter corruption, can be achieved. We all benefit when public actions are open to the public. @anticorruption @OpenBudgets https://t.co/6MIRqGccJh

— EconDiplomacy@State (@EconAtState) September 19, 2024

The other countries assessed as not meeting the minimum requirements of fiscal transparency for 2024 are: Afghanistan, Algeria, Angola, Azerbaijan, Bahrain, Bangladesh, Belize, Benin, Burma, Burundi, Cambodia, Cameroon, Central African Republic, Chad, China, Comoros, Congo, Democratic Republic of the Congo, Republic of the Djibouti, Dominican Republic, Ecuador, Egypt, El Salvador, Eswatini, Ethiopia, Gabon, Gambia, The Guinea, Guinea-Bissau, Haiti, Iraq, Laos, Lebanon, Lesotho, Liberia, Libya, Madagascar, Malawi, Maldives, Mali, Marshall Islands, Mauritania, Mongolia, Nicaragua, Niger, Oman, Pakistan, Palestinian Authority, Papua New Guinea, Rwanda, Sao Tome and Principe, Saudi Arabia, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Suriname, Tajikistan, Tanzania, Turkmenistan, Ukraine, Uzbekistan, Vietnam, Yemen, Zambia and Zimbabwe,

The Department assessed the following governments as meeting the minimum requirements of fiscal transparency for 2024: Albania, Argentina, Armenia, The Bahamas, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Burkina Faso, Cabo Verde, Chile, Colombia, Costa Rica, Côte d’Ivoire, Croatia, Czech Republic, Estonia, Fiji, Georgia, Ghana, Greece, Guatemala, Guyana, Honduras, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Kenya, Kosovo, Kyrgyz Republic, Latvia, Lithuania, Malaysia, Malta, Mauritius, Mexico, Micronesia (Federated States of), Moldova, Montenegro, Morocco, Namibia, Nepal, Nigeria, North Macedonia, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Samoa, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Uganda, and Uruguay.

Determinations

Meets Minimum Requirements:

A determination of meeting the requirements indicates a government satisfactorily met all minimum requirements for fiscal transparency.

Does not Meet Minimum Requirements:

A determination of not meeting the minimum requirements for fiscal transparency indicates that a government did not meet one or more of the minimum requirements for fiscal transparency.

Significant Progress or No Significant Progress:

A determination of “significant progress” indicates a government satisfactorily addressed a key deficiency in meeting the minimum requirements of fiscal transparency during the review period. A key deficiency is some material condition or fact that causes a government not to meet the minimum requirements of fiscal transparency.

Assessment Criteria

The Department applied the following criteria in assessing whether governments met the minimum requirements of fiscal transparency.

Budget information should be:

Publicly Available: Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, should be widely and easily accessible to the public. Complete documents may be available from government offices or libraries, widely available government publications, or via mass media channels. Budget documents should be disseminated within a reasonable period. A “reasonable period” generally corresponds to:

At least one month before the start of the fiscal year and before budget approval by the legislature for the executive budget proposal,

Within three months of enactment for the enacted budget, and

Within 12 months of the end of the fiscal year for the end-of-year report.

Information on government debt obligations, including from state-owned enterprises, should also be publicly available on a public-facing website and updated at least annually, including aggregate, government-backed debt for major state-owned enterprises. The enacted budget and end-of-year report should be available online. If a government had a sovereign wealth fund, it should disclose its source of funding and general approach to withdrawals. If a government had a sovereign wealth fund, it should be established in a sound legal framework.

Substantially Complete: Publicly available budget documents should provide a substantially full picture of a government’s planned expenditures and revenue, including natural resource revenues. Budgets should include expenditures broken down by ministry and revenues broken down by source and type. Budget documents should detail allocations to and earnings from state-owned enterprises. If not, such information should be available in other public documents. Major state-owned enterprises should have publicly available audited financial statements. A published budget that does not include significant cash or non-cash resources, including foreign aid, would not be considered substantially complete. Budget documents should incorporate all special accounts or funds. If there are off-budget accounts that have a legitimate purpose, they should be audited, the results made public, and the accounts subject to oversight. Budget documents should also include expenditures to support executive offices or royal families where such expenditures represent a significant budgetary outlay. The review process recognizes military and intelligence budgets are often not publicly available for national security reasons. However, military and intelligence budgets should be subject to either parliamentary review and approval or civilian public oversight.

Reliable: Budget documents and related data are considered reliable if the information contained therein is credible, meaning actual government revenues and expenditures correspond to the enacted budget. The government should review budget execution through the course of the year, such as by producing monthly or quarterly budget execution reports. Significant departures from planned receipts and expenditures should be explained in supplementary budget documents and publicly disclosed in a timely manner. Financial statements should be prepared according to internationally accepted principles that yield consistent and comparable statements. The supreme audit institution should meet international standards of independence, audit the executed budget, and verify the annual financial statements. The results of such audits, to include an executive summary with findings or recommendations by the supreme audit institution, should be published within a reasonable period (generally within 12 months of the dissemination of the end-of-year report). The supreme audit institution should be established in an appropriate and effective legal framework that spells out in detail its independence, and beginning this review period, has direct access to the executed budget.

Natural resource extraction contracting and licensing procedures should be:

Transparent: Criteria and procedures for the contracting and licensing of natural resource extraction should be publicly available and codified in law or regulation. The basic parameters of concessions and contracts should be made publicly available after the decision. Such information should include the geographic area covered by the contract or license, the resource being developed, the duration of the contract, and the company to which the contract or license is awarded.

Department of State Releases 2024 Fiscal Transparency Report

On September 19, 2024, the United States Department of State released the 2024 Fiscal Transparency Report. Fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins global economic sustainability. It fosters greater government accountability by providing a window into government budgets and spending. Fiscal transparency helps citizens hold their elected leaders and public officials accountable and facilitates better-informed public debate. Annual reviews of the fiscal transparency of governments that are eligible to receive U.S. assistance help ensure appropriate use of U.S. taxpayer funds.

In this year’s report, Department officials found that 72 of 139 governments (and the Palestinian Authority) assessed met the minimum fiscal transparency requirements. Sixty-eight did not meet the minimum fiscal transparency requirements. Of these, however, 23 made significant progress toward meeting the minimum fiscal transparency requirements. Consistent with the requirement in the FY 2024 Department of State, Foreign Operations, and Related Programs Appropriations Act, the 2024 report describes the minimum fiscal transparency requirements, reviews governments, most of which were identified as recipients of U.S. assistance in the 2014 Fiscal Transparency Report, and further assesses those that did not meet the minimum fiscal transparency requirements during the review period of January 1 to December 31, 2023. The report also indicates whether governments that did not meet those requirements made significant progress to publicly disclose national budget documentation, contracts, and licenses during the review period. The Department of State evaluated the public availability, substantial completeness, and reliability of budget documents, as well as the transparency of processes for awarding government contracts and licenses. The Department also gathered data on how government budgets allocate resources to marginalized communities. The 2024 review included an additional requirement for the supreme audit institution to have direct access to the entire executed budget.

The report can be found on the Department’s website at https://www.state.gov/reports/2024-fiscal-transparency-report/ and information on the Fiscal Transparency Innovation Fund can be found on the Department’s website at https://www.state.gov/fiscal-transparency-innovation-fund/. For further information, please contact the Bureau of Economic and Business Affairs’ Fiscal Transparency team at [email protected].

Source: United States Department of State