Summing up the budgetary debates, the PM counter argued that “Notre performance impressione Moody’s…et le FMI.” That’s a weak argument. Moody’s bases its analysis on the official figures and if they have any queries they liaise directly with the Ministry of Finance.
As for the IMF they are usually here during the Art IV mission for mostly one or two weeks at the maximum and they gather their data mainly from official sources through their various meetings with governmental institutions. They do meet the press and the leader of the opposition but it is very rarely that they interact with other people who have been questioning the official figures. It is only when we carry out the Public Expenditure and Financial Accountability (PEFA) (a tool for assessing the status of public financial management. A PEFA assessment provides a thorough, consistent and evidence-based analysis of PFM performance at a specific point in time.) that the PEFA team delve deeper in our public finance figures. Though the Special Funds had existed since the 2007/08 and 2008/09 budgets , it was only in 2011, through the PEFA assessment, that the IMF became aware of the off-budget funds and recommended that we fully integrate the special funds into the budget for this would reduce budgetary fragmentation and facilitate more effective expenditure management. As for Statistics Mauritius,which falls under authority of MOFED or for any other governmental institution, “independent” in our local parlance means toeing the line.
In 2009 , Hon Pravind Jugnauth , member of the opposition, in his intervention in the NA on the 2010 budget, raised the issue of the off-budget special funds : “Au début de mon intervention j’avais parlé de fonds mirobolants, portant des noms ronflants, mis sur pied depuis 2008 …..Ces fonds, je l’ai souvent dit, M. le président, avaient été créés avec deux objectifs. Premièrement, pour masquer l’échec sur le capital investment et deuxièmement manipuler le déficit budgétaire.” As compared to the official figure of -4.5 % , he quoted a figure of -6.6 % as the real budget deficit ,inclusive of the off-budget funds and exclusive of the one-off items. And as Minister of finance he announced in Budget 2011 that he was ensuring greater transparency in fiscal management by closing the various off budget funds and transferring them to the Consolidated Fund. At that time it seems that there has been manipulation of figures , by the same “officiers du ministère des finances (qui) sont de haute fonctionaires de confiance.”
It is equally important to remind our readers that such budgetary tricks have been tried in the past. Following the issuance of the Floating Rate Notes (FRN) in October 1995, Manraj/Sithanen created the off-budget National Infrastructure Development Fund (NIDF) and Statistics Mauritius , which was then under MEPD, started publishing two budget deficit figures, with and without the off-budget NIDF.
Our friends at MOFED have matured over the years and now they have more tricks in their bag ,like Special Purpose Vehicles (SPVs). Besides recreating funds off the budget and SPVs, their doubtful accounting extend to off-budget expenditures and loans taken by State-Owned Enterprises (guaranteed by Government) which are not included in the calculation of the Budget Deficit and Public sector Debt respectively.
And now more people are becoming aware of this dubious accounting in the budget. Many local accounting firms have highlighted this lack of transparency in the Budget. Transparency is not mere listing of the source of funding for the capital projects (Appendix H) , these off-budget funds need to be integrated with the budget. Even the usually conservative MCB focus is referring to the IMF cautions on contingent liabilities and fiscal risks.
And now more people are becoming aware of this dubious accounting in the budget. Many local accounting firms have highlighted this lack of transparency in the Budget. Transparency is not mere listing of the source of funding for the capital projects (Appendix H) , these off-budget funds need to be integrated with the budget. Even the usually conservative MCB focus is referring to the IMF cautions on contingent liabilities and fiscal risks.
The official Budget deficit figure as a % of GDP is - 3.2
Inclusive of special funds it is -3.8
Inclusive of off-budget expenditures, it is -5.0
(Given the low capital spending, our own estimates)
Exclusive of one-off items as grants it is -5.7
The above calculation is more or less similar to the exercise carried out by Hon Pravind Jugnauth in December 2009.
