In its role to ensure good financial governance, the Ministry of Finance promotes effective management of sectors’ own revenues. The mobilization of revenues in sectors plays, inter alia, a role in line ministries budget negotiations with the Ministry of Finance. Based on a request that had been posed by public officials from South East Europe (SEE) to address revenue management in line ministries, especially the challenges faced with respect to mobilizing domestic resources, the RMMS project investigated the complex list of regulations on how to levy charges and generate forms of revenues. Our discussion addressed the results of the findings, covering the fees and charges and their contribution to the provision of quality services, as well as other existing challenges related to sector revenue mobilization.

Background

Sound Public Financial Management (PFM) is an important element of good governance. It is reflected in maintaining a sustainable fiscal position, allocating resources efficiently, and delivering public goods and services effectively and transparently. To enhance their growth potential, countries in SEE agreed to strengthen their governance by 2020. Whereas PFM reforms are an essential element of good governance, the conceptual guidance on how to strengthen line ministries’ role has remained limited to only few initiatives, though. 

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) developed a guidance note “Good Financial Governance in Sector Ministries”. The guidance note offers insights into the national budget system and the role sector ministries can play. It includes an analytical tool that helps advisors and government officials to identify strengths and weaknesses in the management of public funds in respective sector ministries. The Guidance Note thus far puts an emphasis on the management of public funds throughout the budget cycle.

Ministries of finance are in charge of assuring sound PFM, yet their success significantly depends on line ministries, whose capacity development has been less supported by regional and international efforts. Effective institutions and the sound management of public resources will be vital for the implementation of the Strategic Development Goals. Upon the request of SEE representatives and with the support of GIZ, the CEF is implementing a project to strengthen the conceptual understanding of revenue mobilization and management in sector ministries, and to study in more detail the cases of selected SEE countries and Germany.

Topics addressed

The following topics were discussed:

• Introduction to the Revenue Mobilization and Management in Sectors
• Managing fees and charges across the sectors in the following countries:
  • ALBANIA - the Water Sector
  • MOLDOVA - the Health Care Sector
  • SERBIA - the Environment Protection Sector
  • GERMANY - the Transport Sector

How the audience benefited

After this seminar, the audience better:

• Understood main theoretical and practical challenges in managing fees and charges levied at sector level
• Estimated the strengths and weaknesses of their countries in comparison with the peer countries in terms of revenue mobilization and management on a sector level
• Identified recommendations for better guiding RMM in line ministries

Target audience

The RMMS Seminar was designed primarily for public officials of ministries of finance, line ministries, tax authorities, and other government entities involved in collecting and managing public revenues. In addition, officials generally interested in better understanding of the topic were also kindly invited.

No fee was charged for the seminar. Participants had to arrange their flights, airport transfers in Slovenia, and accommodation during their stay. Meals and coffee breaks during the seminar were provided.

[The RMMS seminar took place back-to-back to a workshop on Strengthening Line Ministries’ Budget Preparation, which was held in Ljubljana on June 13-15, 2016. More information on this event is available here.]​

Contributions from participants

Participants had the opportunity to hear about sector-specific revenues and how and why they should be managed properly. They also learned about the challenges and best practices in revenue mobilization and management on a sector level, in particular relating to the fees and charges and their contribution to the provision of quality services; and were actively engaged in discussion of the topic by sharing their country experiences and challenges they face. Participants identified differences and similarities among the countries and came up with a general list of recommendations on how to mobilize and manage revenues better.

FACULTY

LENA DE STIGTER, Advisor Good Financial Governance (Focus on GFG in Sectors and Inequality), Sector Program Good Financial Governance, GIZ, Germany

Lena De Stigter is an advisor at the German Development Cooperation (Gesellschaft für Internationale Zusammenarbeit – GIZ). She holds two Master Degrees in International Development from the University of Utrecht and the University of Nijmegen in the Netherlands. Prior to joining GIZ, she has worked for Oxfam Novib, focusing on budget transparency and accountability in West Africa.

Ms. De Stigter has held several positions at GIZ. She was seconded to the Collaborative Africa Budget Reform Initiative (CABRI) in South Africa, where she worked as PFM advisor. She also coordinated the German support to the IMF Regional Technical Assistance Centers. Currently, she is working in the Good Financial Governance (GFG) team in the department Good Governance and Human Rights. Her focus topics are GFG in sector ministries, inequality and financial accountability. On the seminar Ms. De Stigter presented the German Case Study.

 

THORBEN KUNDT works as an advisor for the GIZ Sector Program on Good Financial Governance (GFG) with a specific focus on taxes and domestic resource mobilization. In his PhD thesis he focused on the empirical and experimental analysis of tax evasion. On the seminar Mr. Kundt presented the German Case Study.

 

MARJAN NIKOLOV, President, Center for Economic Analyses, Macedonia

Marjan Nikolov is the president and a co-founder of the Center for economic analyses (CEA). He holds PhD from the University of Ljubljana in Economics and a MSc in International Economics and Finance from the University of Iceland. As a docent, Mr. Nikolov used to teach at different universities courses like Econometric, Statistics, Public Finance at local self-government level, and Global Business.  

Mr. Nikolov has work experience with EU IPA, USAID, UNDP, DFID on cost benefit analyses, fiscal reforms, macroeconomic modelling, fiscal decentralization and local government creditworthiness and borrowing. He was engaged as a local expert for the World Bank for evaluation of municipal service improvement projects, municipal finance self-assessment and urban audit. He was also engaged by the Open Budget Partnership to work on a fiscal transparency project and Open Budget Survey since 2008.

Mr. Nikolov has experience as a project coordinator for the EIDHR project and numerous times was engaged by the central and local governments to participate in legislation preparation, policy design, training, PPP feasibility studies preparation. He was appointed as the president of the Supervisory Board of the government-owned electricity generation company AD ELEM.

Mr. Nikolov’s focus topics are public finance management, fiscal transparency, fiscal decentralization and PPP.

Mr. Nikolov is a Lead Expert who prepared the Background for the RMMS project.

 

MAJDA SEDEJ, Expert in Public Financial Management and Economic Policy, USAID Business Enabling Project, Cardno Emerging Markets, Serbia

Majda Sedej, an expert in PFM and economic policy, has been advising the Serbian Ministry of Finance on various aspects of the budget process reform, and has led a team of consultants that has helped the Ministry develop a program and performance budget framework and implement it throughout the Serbian Government. As part of this process, she has served as technical advisor to the Ministry of Agriculture and Environmental Protection, Ministry of Science and Education, and Ministry of Culture and Information for application of the new budgeting model. Ms. Sedej has also supported the Serbian Public Policy Secretariat in designing an integrated planning system and methodology for medium-term institutional planning. She was previously engaged on USAID and UNDP-funded projects in Serbia and Tanzania that have supported private sector competitiveness, introduced new financial instruments, and engaged in public expenditure review.

Ms. Sedej holds an MA in Economics and an MA in International Political Economy and Development from Fordham University, New York, and a BSc in Mathematics and Computer Science from the University of Novi Sad, Serbia.

On the seminar Ms. Sedej presented the Serbian Case Study.

 

ARJANA DYRMISHI, Country Expert for Albania, the RMMS project, Albania

Arjana Dyrmishi has worked for 16 years at the public administration in Albania, holding several positions. She started as a Specialist with WTO issues at the Ministry of Economy; later on became the Head of Unit for Negotiations of the SAA agreement EU-Albania at the Ministry of Integration. For the last 9 years she has worked as the Director of Fiscal Policy at the Ministry of Finance, with main focus on drafting and implementing fiscal policy for tax and customs’ matters, establishing tax and customs procedures that create a competitive business environment, as well as analyzing tax revenues.

Ms. Dyrmishi holds a PhD in Economics from the University of Tirana and a Master’s Degree from the University of Studies of Bologna on Sustainable Development.

On the seminar Ms. Dyrmishi presented the Albanian Case Study.

 

VIORICA NECLEA, Lead consultant, Ministry of Finance, Moldova

Viorica Neclea has rich work experience in budgeting, as well as in formulation and implementation of different Public Finance Management (PFM) reform strategies in Moldova. After graduation from the Academy of Economic Studies in Moldova she started to work for the Ministry of Finance. Ms. Neclea has been involved in several external technical assistance projects as a national consultant, assisting the Ministry of Finance and line ministries in the implementation of medium-term budgeting, program budgeting and other PFM reforms in the country. 

Collaboration with different development partners (WB, DFID, UNDP) and participation at different training events (PEMPAL, CEF, JVI) helped her further develop and strengthen capacities on budgeting and public expenditure management. 

Currently, Ms. Neclea is a Lead Consultant within the Budgetary Syntheses General Division at the Ministry of Finance of Moldova. She is responsible for the legal and methodological framework for budget planning, for the organization and preparation of the medium-term budget framework, as well as for the coordination of Ministry of Finance training activities for central and local public authorities on the new legal framework and budget formulation methodology, putting a special focus on medium-term planning and program-based budgeting. 

On the seminar Ms. Neclea presented the Moldovan Case Study.

See the Livestream Recordings

Partners

This CEF learning initiative is delivered with financial support provided by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and complementary funding provided by the CEF.