The new approach adopted by the European Commission in 2012 to allow its policy of direct support to the budgets of the governments of the developing countries to generate public revenue in the beneficiary countries is not delivering on its promises, according to a report published by the Court of Auditors on Tuesday 28 February.
However, generating public revenue from national sources, fiscal or otherwise, is vital for sustainable development, as it reduces dependence on development aid and therefore constitutes a priority of the development policy of the EU and the international development community.
This report on 'The use of budget support to improve domestic revenue mobilisation in sub-Saharan Africa' shows that despite the recent improvement in the needs assessment requirements, the Commission has not yet fully exploited the potential of the budgetary support contract in nine countries examined (Cape Verde, Central African Republic, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal and Sierra Leone).
The Court of Auditors notes that the Commission did not in all cases take account of certain fundamental aspects of tax and administration policy in the design of its budgetary support operations. Additionally, the number and quality of mobilisation conditions were lacking: the Commission made the mobilisation of funding conditional on the implementation of specific reforms in just five of the 15 budgetary support contracts audited, to say nothing of the shortcomings identified in communicating information on the proper use of the budgetary support.
In order to improve, the Court advises the Commission to tighten up its evaluations of domestic revenue mobilised and its risk analysis. It also suggests that it take greater account of the mobilisation of national revenue when defining the specific conditions for mobilisation and report more fully on the use of budgetary support. The Commission should also better evaluate how the budgetary support has helped to improve the mobilisation of domestic resources. (Original version in French by Aminata Niang)