Inside the multipronged fight to boost implementation

Mbongeni Mguni | Tuesday March 7, 2023 14:58

Finance Ministry Peggy Serame wants to be clear that she is not “naming or shaming,” but “indicating performance,” as she shares a summary of how the various ministries have thus far spent their development budget allocations for the 2022/23 financial year.

Of the P16.4 billion allocated under the development budget, just 65.4% had been spent as at January 31, two months ahead of the end of the financial year on March 31.

Within these figures, the Ministry of Youth, Gender, Sports and Culture stands out as the worst performer having spent just 5.9% of its P47.6 million development budget for 2022-23.

The top performer, meanwhile, is the Ministry of Lands and Water Affairs, followed by the Ministry of Minerals and Energy, with 86.7% and 82.3% respectively. For the Lands ministry, the expenditure up to January 31 represents about P4.4 billion, while for Minerals and Energy, the spending represents approximately P736 million.

“If we do well, we may have 80% of the development budget spent by the end of the financial year,” Serame said in a briefing this week, perhaps her first since she took over the Ministry in April 2021.

“The recurrent budget is generally always spent, but we are still concerned whether we are spending it most effectively or efficiently because there are rumours that come February or March, ministries want to rush to spend and does this benefit the nation?”

Weak implementation, as reflected in the perennial poor spending of the development budget, has been the millstone around the neck of government’s best laid plans for decades. While Serame’s predecessors as far back as Festus Mogae have each detailed the challenge of implementation, the new Transitional National Development Plan (TNDP) provides the most recent and possibly the best summary of the challenge.

“Significant government resources have been allocated each year to development projects covering economic infrastructure, social development and human capital development, with the aim of creating prosperity for all citizens,” reads the TNDP, which was passed by Parliament late last year.

“However, poor project implementation and delivery have undermined these good intentions.

“It has further caused underspending of the development budget on average by 15-20 percent in past years.”

With approved spending P64 billion in various projects over two years starting from April 1, implementation is the stiffest challenge facing the TNDP’s lofty goals.

The transitional NDP says main the challenges in implementation include poor scoping, weak monitoring, capacity constraints and inaccurate costing of projects, ineffective appraisal of projects, weak monitoring and evaluation, lack of coordination and fragmentation amongst authorities.

Serame and her lieutenants add litigation to the list of challenge, alluding to the increasingly common phenomenon where large chunks of planned development spending are tied up in contractor disputes.

More than any other government entity, the burden of boosting implementation lies with the new National Planning Commission (NPC) established earlier last year with functions from the then National Strategy Office, the Government Implementation Coordination Office, the Vision 2036 Coordinating Agency and the Planning function from the then Ministry of Finance and Economic Development.

Its mandate includes providing leadership in national strategy development, coordinated sectoral and national planning, implementation coordination and performance monitoring and evaluation.

The NPC, as the main oversight body for implementation, will produce an Annual Performance Report to indicate progress of the transitional NDP.

The Commission has been allocated P71.5 million to get its activities underway from April and these are focussed on guiding implementation of the TNDP. The NPC is expected to spearhead the institutionalisation of government’s Performance Monitoring and Evaluation as well as enhance data gathering across the ministries.

All eyes are on the development manager model government intends to introduce from April 1 and house in the Office of the Vice President. The development manager approach is a concept where major public projects are packaged and their implementation outsourced to a private company.

In her February budget speech, Serame revealed that the development manager model would be used for P15.2 billion worth of projects in the TNDP involving implementation of road projects, office buildings and staff houses, hospital facilities, schools, storm water drainage, as well as the Kasane-Kazungula redevelopment projects.

The model will be used for the development of the Leather Industry Park, a key project that has moved at a snail’s pace since 2014, and also eaten up nearly P400 million in taxpayer funds.

Other interventions to enhance implementation include moving some projects into the Public Private Partnership model, ensuring that only projects that are ready for implementation are included in the budget and upgrading the Development Project Monitoring System, which enables ministries and others to track the physical and financial performance of their projects.

According to Serame, another element in the poor implementation conundrum is weak human resources.

“As the budget has been growing over the years, some ministries have become challenged in implementation and we have started discussions with the Directorate on Public Service Management to review these ministries’ structures to improve their implementation,” she said on Wednesday.

“Some of these ministries you find junior officers in charge of implementation and we have to augment that capacity.

“Even as the Ministry of Finance, we have to help ministries budget better because our job is not just allocating funds, but also monitoring and we have been finding ways to improve on that.”

While the big ticket items have been government’s primary headache in implementation, the smaller projects have equally been a thorn in the side for the state and citizens.

The latest Auditor General’s report, covering the year to March 2021, contains a litany of instances where contractors abandoned projects or delayed delivery without any explanation, mainly because they had already pocketed the lion’s share of the contract sum.

At the Werda – Makopong resealing and road marking project, a contractor was engaged for P20.8 million and scheduled to work between March 10, 2018 and October 10, 2019. Instead, a public finance disaster ensued.

“It was noted that the contractor progressed to 80% and showed no further commitment to complete the remaining works, even after a notice was given in May 2021 to do remedial works,” the Auditor General noted in the report tabled in Parliament last week.

“The actual expenditure for the project stood at P19.9 million leaving a paltry sum of P913,714, which could be a contributing factor for the reluctance to proceed with the remaining works. “Correspondence revealed that a notice to terminate the contract was to be effected, but at the time of the audit it was not yet done.”

The Auditor General, Pulane Letebele found that in many instances, the smaller road projects were prone to implementation challenges.

“Most projects were not completed on time due to various reasons such as change of scope, breakdown of machinery, falsified performance bonds, disputes, delayed approval of application for Environmental Impact Assessment, contractor’s refusal to commence the works citing low rates, failure to perform, unfavourable weather conditions and contractor’s cash flow challenges. “This was despite the fact that the majority of these contractors had been paid considerable sums of money but failed to deliver,” she said.

Going forward, the TNDP wants to adopt a turnkey approach for smaller projects, where a contractor is appointed to handle the entirety of design, management, and construction and is only paid on handover to government.

Government’s performance in effectively and efficiently spending each Pula allocated for development will be tracked via an Annual Performance Report (APR). Already, an APR for 2020-21 has been produced and used to develop the TNDP.

Its results, however, are not public and what citizens are more concerned with is the performance in real time, where development spending answers the aspirations for a better standard of living.