Sudanese National Assembly Standing Committee on Public Accounts & Economic Affairs Delegation

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Finance Standing Committee

28 October 2009
Chairperson: Mr T Mufamadi (ANC)
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Meeting Summary

A delegation from the Sudanese National Assembly Standing Committee on Public Accounts and Economic Affairs Delegation met with the Standing Committee on Finance. The purpose was for the different committees to exchange information on how their respective committees operated and to raise questions on topics of interest. The Sudanese showed much interest in the South African budget and all related matters. Members of the Committee briefed that delegation on the different aspects relating to budgetary processes. Much emphasis was also put on the South African fiscal year. The delegation said that they admired South Africa and learned a lot from their system. South Africa could be seen as a role model for the rest of Africa and for the rest of the world.

Meeting report

Meeting with Sudanese delegation
A delegation from the Sudanese National Assembly Standing Committee on Public Accounts and Economic Affairs Delegation met with the Standing Committee on Finance. The Sudanese delegation asked to be informed of what this Committee was doing.

The Chairperson briefed the Sudanese Delegation on certain aspects of South Africa's governmental system. South Africa had three spheres of government which were equally important, and independent but also interrelated. In the National Assembly,  before the Fourth Parliament, there had been a Portfolio Committee and a Select Committee on Finance which would have dealt with almost every aspect of macro-economic policy matters and the appropriations of finances or budgets. Towards the end of the third term a new Bill was processed through Parliament concerning the ability of Parliament to amend the Money Bills, to address the situation that for the previous fifteen years, the Executive had agreed to priorities of resources but Parliament could not amend them.

South Africa had a very interesting history which included a history of broad public participation. Over the years organised labour, civil society and Non Government Organisations (NGOs) had been calling for a people's budget. Society wanted to know at what point it views would be taken into consideration and then factored into the processes of the budget and its outcomes. The Money Bills Amendment Procedure and Related Matters Act was then promulgated and passed in Parliament. Through that Act, two committees were then established, being the Standing Committee on Finance and the Standing Committee on Appropriations.

Parliament had established an internal committee which was led by the (National Assembly) House Chairperson, the Chairpersons of the Finance Committees and the two Chairpersons of the NCOP. National Treasury also had a say in the discussions. Matters such as how to fit within different aspects of the law were discussed, so that different government bodies could work in such a manner that they could complement and assist the work of the Executive, rather that purely being a watch dog, in terms of their responsibilities. Parliament was not only about representing the people who elected it but it was also about facilitating people-to- people relationships within the country and on a continental level.

Mr Babiker Mohamed Tom, Committee Deputy Chairperson, Sudan National Assembly Economic Affairs Committee, said that the delegation was proud to be in South Africa. South Africa was a country that came from much suffering and could now be an example of a democracy in Africa and for Africa. Other countries should learn from South Africa's accomplishments. The delegation was also proud of the fact that South Africa was becoming one of the G20, a group which would be shaping the economic order within the economic crisis. The delegation was learning a lot from the experiences of this Parliament and its Standing Committees and would like to learn more about how the Finance Committee handled the discussion of the Budget and the follow up of the budget.

Dr Jimmy Wongo, Committee Chairperson, Southern Sudan Legislative Assembly Public Accounts Committee, explained that Sudan was one country but was governed by two systems. He wanted to know more about the fiscal year, when it started and when it ended. He would also like to know more about the mid-term policy statement.

Mr Gog Makuag Mayol Marchinkegam, MP, Sudan National Assembly Economic Affairs Committee, said that he would like to know more about the budgetary process.

Mr Daniel Wuor Joak, MP, Southern Sudan Legislative Assembly Public Accounts Committee, said that he would like to know how the budget was being handled by the Minister of Finance.

The Chairperson replied to all questions on budgets concurrently. He said that over the next three years South Africa used what was called a medium term expenditure framework. South Africa saw there was a need to have a medium-term budget policy framework over five years, instead of over three years and therefore, in terms of the intention of their budget and transparency, each sphere of the budget would be based on what the budget issues would be in the next five years. That would then assist the country to determine what resources were going to be allocated to different spheres of government. In the next three years South Africa would be seeing a growing portion of the National Fiscus being put towards Local Government. The shift in allocations would see a decrease in National Government allocations, while Provincial Government would stay constant for the next three years.

The Chairperson noted that although the fiscus controlled the budget allocations, it was the responsibility of the provinces and the ministers to make sure that that which had been budgeted for was actually being utilised for that particular purpose. There were also what were referred to as “in year monitoring systems”. He explained that although there was an annual budget, the in year monitoring allowed a check in Parliament in terms of statements received from the National Treasury, which would assist the committees to check whether and how the different spheres of government were spending their resources.

The Medium Term Budget Policy Statement (MTBPS) was, in a way, an evaluation of how government had performed in the past six months. Budgeting, however, was never accurate. When the budget was tabled in Parliament, for example, at the end of the Third Parliament, there had not been any anticipation that there would be new committees formed.

During the fiscal year, it was the responsibility of Parliament and the government to come together to decide whether and how they were going to shift resources from the one programme to another in terms of the priorities of the government. The MTBPS was primarily intended to deal with unforeseen circumstances but also to reprioritise the budget. What made the mid-term budget policy more critical than the other budget policies was that it was the first budgetary statement under the leadership of the new Parliament and President Jacob Zuma. It was the first direction given on a macro-level.

Ms N Sibhidla (ANC) elaborated on what the Chairperson had to say. She said that prior to 1994, the government had used to have an annual budgeting process. However, from 1994 it was decided that this kind of budgeting limited the State in terms of investing in infrastructure and other related matters. The ANC had then decided that it would be better to budget for a three-year period, which would give confidence to investors and to the public in terms of how their money was going to be spent by the State. That allowed the government to engage in private partnerships over a long term nature.

A crucial component of the budgeting process was public participation. The public participated in identifying the issues which needed to be prioritised by the government. They participated through the various committees which the Constitution provided for, and this ensured that public views were taken into consideration.

Ms Sibhidla outlined that for transparency and other issues relating to budget spending, the Public Finance Management Act (PFMA) applied. This outlined the role of provinces, National Treasury and what was expected of the spheres of government in terms of how the money was utilised. It dealt with issues of transparency, reporting and accounting.

Mr Hassan Abdelgadir Hilal, MP, Sudan National Assembly Economic Affairs Committee, said that his question was on fiscal federalism. He requested the Finance Committee to elaborate on that topic.

The Chairperson said that fiscal federalism covered most aspects relating to Parliament's role. The fact that South Africa was considered a “rainbow nation” was precisely because of the struggles it went through to liberate itself, and the way in which South Africans had agreed that the solutions to their country’s issues would be sorted out by South Africans themselves. It was during that process that they also learnt the ability to negotiate outcomes, that reflected their determination to deal fully with issues until there was consensus.

South Africa had lived through a form of colonialism where both the colonisers and the colonised were living within the same borders. The colonised people, having been excluded from access to prime resources in the past, had to decide what kind of South Africa they wanted to create. The negotiations were a give-and-take process. There were parties who strongly believed that there should have provinces that were autonomous, because politically a particular political party would get stronger support in one part of the country, and therefore would like to feel that although this may not be the ruling party at national level, there would be the opportunity for that party to rule at a provincial level.

The compromise was that South Africa had a unitary state, which had a strong element of federalism. It was agreed that there should be three different spheres of government - National, Provincial and Local. The most important sphere to the majority of people was local government. It was agreed, and enshrined in the Constitution, which responsibility should be allocated to which government department. Some national imperatives could not be devolved or executed at a provincial or local level, such as issues of national security and defence, which were then referred to as national imperatives. The issue of wealth creation and wealth distribution was a national competence. That would then explain why minerals and energy resources were not within the competence of provinces but of National Government.

Mr Cirrillio Elias Unango Bacalla, MP, Sudan National Assembly Economic Affairs Committee, wanted to know more about the financial policy of South Africa.

The Chairperson said that the policy implementers were tasked to deal with education, wealth, and welfare. 85% of the budget went to these areas of wealth, education and welfare. The provinces were tasked for delivery of these, whereas the local government was tasked with service delivery.

Ms Zeynab Ahmed, MP, Sudan National Assembly Economic Affairs Committee, asked what the role of the Finance Committee was. She also wanted to know how Parliament divided up its budget.

The Chairperson said that the government was mindful of the fact that not all provinces had comparable economic advantages. It had been decided not to divide the country up in such a way that because a province was rich in mineral resources, this must then raise taxes and funds for its own operations.

Mr Fadl Musa Gadeen Elnaiem, MP, Sudan National Assembly Economic Affairs Committee, wanted to know more about the taxation policies and arrangements between the different spheres of Governments.

The Chairperson said that, in terms of the broad framework, taxation policy was a central government responsibility. National government collected revenue and taxes from individuals and companies. It created legislation around issues of taxes, such as who must be taxed, how much they must be taxed, and where the money went. Provinces had limited area in which they could collect tax. Some of these areas were gambling, traffic fines and licensing. The Chairperson said that there was merit in this system because it allowed the country to share from a common pool of resources.
He noted that Parliament had serious challenges in terms of budgeting matters, particularly in executing its oversight mandate. The Committees on Finance were required to be well resourced in terms of research capacity, for oversight visits, and for interaction with the electorate from time to time.

As much as the Committees played an oversight role, it did not do this in an adversarial manner. He noted that the State comprised Parliament (the Legislators), the Executive and the Judiciary, each of which must remain independent. In fact Parliament was the only elected body out of the three. Over the years, given South Africa's background, there were many pieces of legislation which were not about legislative policy-making, but rather had to do with turning around the South African situation so that it could reflect what the new South Africa should look like. South Africa's Parliament was an activist one, and was not purely dealing with policy making, but more with policy implementation.

The meeting was adjourned.



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