Position Papers

Across much of Africa, governments still make long-term fiscal decisions using short-horizon financial information. Cash and modified-cash systems help monitor liquidity and budget execution, but they do not provide a complete picture of the assets controlled by governments, the liabilities already incurred, or the fiscal risks accumulating outside the purview of cash accounting. The result is partial visibility, incomplete accountability, and weaker decision-making.

Africa’s journey towards accrual-based financial reporting is well underway, but progress is uneven and hampered by a critical gap: the absence of context-sensitive application guidelines. At the 2025 IPSASB Standard Setters Forum in Lisbon, African and Middle East delegations raised concerns about the lack of IPSAS implementation support. Unlike IFRS, where entities benefit from extensive implementation resources, IPSAS practitioners often face ambiguity in applying complex standards to real-world situations. IPSASB acknowledged this gap but highlighted its resource limitations.

The publication of IPSASB SRS 1 on Climate-related Disclosures represents an important milestone for public sector sustainability reporting. The standard requires public sector entities to disclose decision-useful information on climate-related risks and opportunities for accountability and resource allocation purposes, with application for annual reporting periods beginning on or after 1 January 2028, and with earlier adoption permitted

Artificial intelligence is increasingly presented as a solution, but the real policy challenge is not simply whether governments should adopt AI. It is whether they can adopt it responsibly, in ways that strengthen public financial management without deepening opacity, bias, weak accountability, or digital exclusion. Fragmented experimentation without governance can create new risks even as it solves old ones.

Africa is rich in natural wealth, but it still captures too little long-term fiscal value from it. Minerals, forests, land, water systems, biodiversity, and other ecosystem assets underpin livelihoods, exports, energy transition opportunities, and future resilience. Yet these assets remain weakly measured in fiscal systems, poorly integrated into public accounts, and too often governed through opaque contracts, fragmented data, and short-term extraction models.

Africa’s development ambitions continue to outpace available domestic resources, making sovereign borrowing an unavoidable instrument of fiscal policy. The policy problem is not borrowing per se; it is weak debt governance. Across many African countries, rising debt-service costs, fragmented debt management operations and records, limited public disclosure, and weak links between borrowing and measurable development results have combined to shrink fiscal space and erode trust in public institutions.

Africa loses close to USD 100 billion annually to fraud, corruption, and illicit financial flows. These leakages divert scarce resources meant for classrooms, clinics, roads, and other essential services, thereby undermining fiscal accountability and eroding public trust.

Effective government cash management is fundamental to fiscal governance. In many African countries, fragmented systems of multiple bank accounts have led to idle balances, leakages, inefficient resource allocation, and weak fiscal discipline. This undermines accountability and erodes public trust.

Accrual-based International Public Sector Accounting Standards (IPSAS) are critical to enhancing fiscal transparency, accountability, and comparability in Africa. They enhance governments’ ability to accurately measure public debt, pension liabilities, and arrears, while also reflecting the value in infrastructure installation in schools, hospitals, roads, airports, etc. By capturing the true cost of public service delivery, it strengthens fiscal discipline and enables evidence-based budgeting. Moreover, it builds credibility with lenders, donors, and citizens through the production of internationally comparable financial statements.

The Office of the Accountant General (OAG) plays a critical role in managing public finances and ensuring the credibility, transparency, and efficiency of government financial operations. As Public Financial Management (PFM) practices continue to evolve globally, the need to strategically reposition the OAG as the Government’s Chief Financial Advisor has become increasingly important. Aligning this repositioning with the internationally recognized Public Expenditure and Financial Accountability (PEFA) framework will enhance the effectiveness of fiscal governance and strengthen accountability systems.

As climate change, resource scarcity, and socioeconomic inequalities reshape global development priorities, African governments must integrate climate and sustainability targets into public financial management (PFM). This paper explores how sustainability initiatives can transform national budgeting, procurement, and reporting systems into engines of resilience and inclusive, sustainable growth. Drawing on country case studies, evidence from international frameworks, and insights from African public finance leaders, the paper argues for a bold shift toward green budgeting, climate-responsive fiscal policies, and digital innovation. It concludes with actionable recommendations for Accountants General, Ministries of Finance, and oversight bodies to embed environmental stewardship and social equity into the core of financial practices across the continent.

Digitalisation presents a huge opportunity to transform Public Financial Management (PFM), particularly in Africa, and offers safe pathways to improved efficiency, transparency, and quality service delivery. This position paper outlines a purpose-driven approach to digital transformation grounded in human-cantered design, enhanced cybersecurity, and data governance. Drawing from insights, case studies and experiences gathered through a recent webinar hosted by the African Association of Accountants General (AAAG) on the topic, this paper recommends secure, paperless workflows, interoperability, and capacity development as central to Africa’s PFM reform agenda. It also addresses legal, institutional, and political barriers while proposing pragmatic, strategic, and evidence-based policy interventions.

This Policy Paper calls on African governments to face this hidden burden head-on: We must move from reactive crisis management to a more strategic, proactive approach. By embedding risk assessment into public finance systems, we can expose these silent costs, reduce inefficiencies, mitigate the risk of non-delivery, and deliver greater public value. The paper draws from and is based on real-life examples and cases, international best practices, and input from PFM leaders to advocate for a pragmatic, practical, and. people-centred approach to managing the cost of risk in complex public projects.