South Africa’s National Treasury second-best in the world

South Africa’s National Treasury, which manages the country’s finances, is among the most transparent fiscal authorities in the world, ranking second in the world in the Open Budget Index. 

This was revealed by the International Monetary Fund’s (IMF) Fiscal Transparency Evaluation Report. 

At the request of South Africa’s National Treasury, a team from the IMF’s Fiscal Affairs Department undertook a Fiscal Transparency Evaluation from 11 to 25 July 2023.

The IMF had extensive meetings with senior staff of the National Treasury, including deputy director generals Edgar Sishi and Duncan Pieterse.

Its report said that despite the serious governance issues relating to state capture and widespread corruption, the National Treasury has consistently been transparent in its reporting and maintains rigorous oversight of public finances. 

In particular, the IMF praised Treasury for its comprehensive, relevant, timely, and reliable overview of the government’s financial position and performance. 

Coupled with the South African Reserve Bank, there is a broad coverage of financial statistics and the government’s debt levels. 

The report also found that the Auditor General has remained independent and ensures that the government and its entities produce financial statements in accordance with international standards. 

However, the IMF said there is still room to improve fiscal reporting and transparency. 

The main issues include financial statistics not extending to the broader public sector, differences in reports not being explained publicly, and gaps in the coverage of assets and liabilities.

Furthermore, the IMF said the National Treasury does have a tendency to produce “overly optimistic GDP forecasts”, which limit its ability to tackle the country’s rising debt burden. 

It also suggested that the government’s fiscal plans should be scrutinised by independent institutions prior to release. 

The finances of state-owned enterprises also remain a concern for the IMF, with the high numbers of irregularities and qualified audit reports needing to be addressed. 

National Treasury noted the release of the IMF report and acknowledged the need to improve in these areas. It said work is underway to address these concerns. 

It said that predictable and transparent financial reporting underpins macroeconomic stability and enables the government to manage its finances properly.