The financial and sovereign debt crises emphasized the need to strengthen the quality of financial management in public sector organisations worldwide. The continuing aftermath of these crises has reinforced these needs and has increased the pressure on Governments and public sector organizations to better manage public resources.
In Africa, many Governments and public sector organisations have made significant progress in the continuous improvement of public financial management and these reforms are expected to continue. Many African countries have been through several rounds of public financial management reforms, including reforms to implement medium-term budgeting, programme-based budgeting and integrated financial management information systems. From accounting perspective, IPSAS is fundamental reform that can improve public financial management. IPSASB is therefore committed to developing high-quality public sector accounting standards to ensure transparency and quality of the financial reporting.
In spite of promising results, major challenges still remain. Progress made has been very uneven and a number of countries in Africa still suffer from poor management of financial resources. In many jurisdictions, the lack of cooperation, complete and accurate information about Government finances continue to be a major cause of concern as it impacts accountability and informed decision making by policy makers.
International organizations have been at the forefront of the move towards IPSAS, but the trend is also clear for Governments, with an increasing number of them adopting accrual accounting practices. Strong and transparent financial reporting has the potential to improve public sector decision making and make governments more accountable to their constituents. Indeed, good PFM practices have powered nations, whereas poor standards have led to financial chaos and civil unrest. And as the economies of African countries continue to strengthen, it is important that Association of Accountant Generals is established to promote professional and technical understanding and cooperation among member countries through exchange of ideas and experiences to ensure strong public financial management (PFM) in Africa.