Do you want to know the character and attitude of the rulers and bureaucrats who control the public’s financial resources and assets? public assets? Do you want to know if the Minister of Finance is mocking and abusing taxpayers? Do you want to understand if the authorities that oversee the execution of the budget and in particular the judges of the Administrative Court behave like real judges? Administrative Court behave as real judges or mere auditors? Do you doubt who aspires to power because they have sensible and realistic policies to offer society, in contrast to those who only want to take personal advantage? personal gain? It’s simple.
Instead of following the famous popular saying – “tell me who you walk with and I will tell you who you are” – worry about knowing how the janitors of public resources control the State Budget (OE) and other State Accounts. Consult the records of the public accounts, namely: the report of the General State Account (CGE); and the Report of the Administrative Court on the CGE, resulting from the mandate given to it by the Constitution of the Republic: to issue the report and opinion on the General State Account. These documents are available for public consultation, in the internet portals of the Ministry of Economy and Finance (MEF) and the Administrative Court (T.A).
In March, the Assembly of the Republic (AR) will have to go through the usual ritual of examining and approving the CGE for the last year available. CGE of the last available year; that is, the 2019 State General Account. A ritual generally reduced to a parliamentary theatrics, in which the deputies of the different parties intervene with a serious air, similar to the seriousness of the comedian in a Portuguese television program entitled: “This is making fun of those who work”.
It is possible to have power without having policy, just as it is possible to make policy without having the power to implement it. Knowing that the 2019 CGE concerns the last year of the legislature that began in 2015, its discussion in the so-called “House of the People” should represent a mobilizing opportunity for a serious debate about the troubled, problematic, and challenging governance of Filipe Nyusi.
Part of the governing difficulties, between 2015 and 2019, were inherited from the previous governance. The same governance that integrated the current President of the Republic, together with the hapless Minister of Finance I referred to in a recent article: Stumbling on Optimism: Misfortune of a Friend of Others. But other problems are new, mainly the armed conflict in Cabo Delgado, which began in 2017.
To know the character and intentions of the janitors of public resources, it is best to pay attention to how they articulate the macro-economic aspects with the accounting specificities
Mozambican society needed its political representatives to analyze the successes and failures of the State, regarding the Government’s commitment in the previous legislature: “…implement a fiscal policy oriented towards fiscal consolidation, ensuring fiscal sustainability, control and reduction of fiscal risks.” In September 2020, I reflected on this issue by analyzing the 2019 Budget Execution Report (REO). An analysis focused on budgetary performance from the perspective of the Agriculture and Rural Development sectors Rural. Those interested in this specificity, can access the document on the Portal of the Observatory of the Rural Environment (OMR) (Francisco, 2021). However, to know the character and intentions of the janitors of public resources, it is best to best is to pay attention to how they articulate the macro-economic aspects with the accounting specificities.
From my critical analysis of the 2019 REO, I concluded that this year’s economic year was both a success and a failure, a conclusion corroborated by the latest T.A. Report on the CGE, recently made public (Table 1). Success, for the Frelimo party, which ended the cycle of governance started in 2015 with unprecedented control of the Public Administration, except for the first decade of independence (Figure 1). It is no accident that President Nyusi loves the buzzword of the day, “resilience” and declared, in his investiture for the current legislature: “we were able not only to resist, but to keep a steady hand on the rudder of the boat in which we all travel”.
Failure because, as in the previous four years, in 2019 the government was more committed to saving the state from the financial and military crises it has caused and faced, rather than seeking to reform institutions and replace the prevailing state-centered culture with one that promotes individual security and economic freedom for citizens.
The latest report of the Supreme Court on the CGE points out several deficiencies in terms of legality and implementation of budget principles and rules. Deficiencies which are not limited to discrepancies of information, by registration errors and insufficient accounting and control systems (Table 1 and Figure 1). The T.A has witnessed and pointed out, recurrently, financial infractions and violations “…of the rules on the preparation and execution of budgets”; and of the “statute” in various Laws and Decrees (e.g. Laws 9/2002, 1/2008, 14/2014, 3/2018).
Some of the deficiencies identified configure what is known in international literature as “creative accounting”, when it disguises, deceives and makes up negative budget results. For example, what about the placement of the charges for the 2019 General Elections under the heading of Domestic Investment (Figure 3)? Another part of the deficiencies involve intricate budget management processes that subvert budgetary norms and rules, via so-called (debudgetization), or in Brazilian jargon, fiscal pedalada. The reports of the Central Bank bear witness to these processes in a politically correct and convenient way, so as not to spoil the accounting makeup.
I will not elaborate on the merits and demerits of the T.A’s audits and analyses of the public accounts, as it is a subject I have addressed, in recent reflections (see, for example, Analysis of the Administrative Court’s Report and Opinion on the General State Account 2018). Further below, I share a brief summary of some relevant elements in the A.T.’s Report and Opinion, including some of its 37 findings and 30 recommendations. Those interested in the full documents I suggest you consult them at the addresses indicated.
What I think is pertinent to highlight in this note concerns an issue that has captured public attention at present, regarding the creation of the Sovereign Wealth Fund. As I have recently defended (Francisco, 2021), both the resources that will end up being channeled into the Sovereign Fund, which the Government intends to create, and the resources that will reinforce the State Budget, will require a more empowered and assertive Administrative Court, capable of acting as a true COURT, and not as a fearful and shortsighted auditor.
As long as the Administrative Court does not acquire the capacity to act (evaluate, judge and if necessary punish) the top officials, with the same authority and agility with which it deals with the public executors at intermediate or base levels, it can hardly be taken seriously in terms of oversight and monitoring of public accounts. It is enough to see the amorphous and irrelevant role of the CA in relation to the notorious case of the “Hidden Debts”.
However, it would be unfair to circumscribe the obstacles to the auditing of public accounts to the constraints faced by the CA. In the prevailing political context, what else can the T.A. be expected to do, knowing that despite the documented evidence it presents of vices and violations of budgetary legislation, the State Accounts are always approved by the majority bench of the AR?
Unlike several competitive areas, especially soccer, in the Mozambican parliamentary domain, the teams go into the game knowing the result in advance. The anticipated victory is assured by a team of backstage agents, specialized in mobilizing resources (taxes, fees, donations, and financing), which sustain and strengthen the administrative machine instead of fostering a dynamic and productive national economy. Regrettably, the contrast between the shareholders of private companies and the representatives of the main shareholder of the state, the taxpayers, continues to be enormous, as if public resources did not deserve a reliable, credible, competent and responsible demonstration of results.
A society that accepts lightly that its representatives make fun of those who work and produce should not be surprised to be successively surprised by misfortunes and adversities that have nothing to do with the unpredictability and uncertainties of nature. And if it wants to reduce the risk te such misfortunes, it has no choice but to face and learn to deal with the fundamental Popperian challenge: “How can we get rid of bad rulers without violence?”
