05/10/2023
CENTRAL GOVERNOR OPENS IGFAR 021023
PRESS RELEASE
The annual Intergovernmental Financing Arrangement Review (IGFAR) Consultative Workshop for Southern Region hosted by the National Economic Fiscal Commission (NEFC) was officially opened today (Monday 2nd October) by keynote speaker and Governor for Central Province Honorable Rufina Peter.
The West New Britain and the Eastern Highlands Provinces are also participants having missed their respective Regional Consultative Workshops.
IGFAR’s have been an annual event until COVID hit in 2019, after which no reviews where held until this year. The review of the current intergovernmental financing arrangements is part of the National Government's priority and agenda to support the
decentralization reforms.
The IGFA Review will focus on the financing arrangements, mechanisms and systems to identify key issues and impediments and make policy recommendations to the National Government for an appropriate fiscal decentralization system. The Provincial & Local Level Service Monitoring Authority (PLLSMA) at its meeting in
Lae on 23rd & 24th September 2020 had established a PLLSMA subcommittee on IGFARb and endorsed the National Economic & Fiscal Commission (NEFC) and the Department
of Treasury to Chair and co-chair respectively.
The PLLSMA sub-committee has been established and this team is comprised of very senior officers from Central Agencies
and key National Departments and Agencies.
In his speech on the workshop overview, CEO of NEFC and Chairman of PLLSA Sub-Committee on IGFAR, Mr. Patrick Painap expressed his gratitude to all the participants who came from all over the Southern Region including EHP and WNB Provinces. He
made special mention of the Central Governor’s attendance and that of the founding Chairman and former CEO of NEFC, Dr. Nao Badu.
“I would like to extend my appreciation to the Governor of Central Province Hon. Rufina Peter and her officers and the Central
Provincial Administration staff, whose presence highlights the significance of this important occasion, I also wish to take the opportunity to acknowledge the founding Chairman/CEO of NEFC, Dr. Nao Badu whom I have engaged in this review process to
assist us in our deliberations."
The CEO of NEFC also emphasized that the IGFA system is based on a set of principles that almost every country in the world today has some form of decentralized system of Government.
“For the system to work effectively, certain principles and
practices must be in place. In PNG, this is no different when it comes to decentralization and Intergovernmental Financing. The principles that must guide our funding arrangements include; (i) Funding Follows Functions- recurrent activities that are
delegated by sectors to be performed at the sub-national governments, (ii) Equalization- Functional Grants (FG) is allocated according to fiscal capacity, (iii) Cost- how much does it cost to deliver priority services in each province?, Capacity- Does the
Government have the capacity to provide the funds?, and Performance- Does Provincial spending support service delivery?”
NEFC CEO Mr. Painap then highlighted the Commission’s mandatory responsibilities which is performed by four main activities that are essential to address IGFA:
• Determining annual Function Grants, allocated to Provincial and LLGs
• Costing of bare minimum service delivery obligations, - Costs of services
• Monitoring Annual Provincial Expenditures through expenditure review
• Yearly regional Consultative workshops for monitoring and reporting.
He went on to disclose that in a comparative analysis, in 2009 when IGFA was first introduced, a total of K135 Million was distributed as Functional Grants to the sectors at the sub-national level within a span of 14 years, this amount has increased to K770
Million, an increase at the rate of 10% each year on average. Additionally, there has been an increase of about K7 Billion in GST revenue to Provinces since 2009. Core Sectors given priority since 2009 include; Health-K1.2 Billion, Infrastructure-K1.7 Billion
and Education-K1.3 Billion
In introducing the Keynote Speaker, Dr. Badu informed the participants of Governor Peter’s knowledge and experience of systems of Government given her background in the Public Service.
Upon addressing the workshop participants, Governor Peter said,
“This important occasion marks a very significant strike, towards a stronger a more equitable future for Papua New Guinea”.
She asked the participants to reflect on the broader development context; taking into account the Vision 2050 and DSP 2030 and the respective timeframes of 25 years and 5 years from 2025 which is only 2 years away, the year when the country
commemorates 50 years (Golden Jubilee) anniversary as an independent nation. As such, “time is of essence, thus review of the financial mechanisms and systems and improved performance of the roles and responsibilities is needed in order to contribute
to the realization of the desired development outcomes encapsulated in these overarching development plans.
In addition, Governor Peter asked the participants to increase the timeframe of focus
from annual reviews to include the next 50 years in preparation to lay the foundations now for the next 50 years from 2025, in the context of this significant milestone for the country in 2025 which is only two years away.
“The reviews that we are having now is timely, but I don’t think the review should be limited to an annual review, I believe, we should have a longer term focus with the objective of establishing strong foundations in the broader development architecture as
we focus on the area of intergovernmental financial arrangements. The questions we should include; what has broken down since 1975, what have we done in between 1975 and 2023? and what lessons have we learned what are the foundations do we need to lay now in leading up to our 50 years so that our systems mechanism, structures are conducive to producing the development outcomes that our people deserve going
forward.”
Governor Peter also spoke and challenged the workshop participants about reforms such as the 1995 reforms that transferred functions without the funding derailing the
Provincial Governments ability to effectively perform its service delivery mandate. She also mentioned the misaligned in planning and budgets brought about by the introduction of District Development Authorities.
“So while we have the intention to improve service delivery, we must take time now to look at the structures, mechanisms
and systems and be informed by the lessons of the past and the prevalent and project environment to make recommendation going forward.”
“So for you coming here to look at the specific area where this review captures which is strengthening the financial system for greater empowerment, sustainable development and economic growth, realize that this is a component of a broader development
architecture, so view strengthening the financial system as an integral part of the broader review process.”
Following her speech Governor Peter officially opened the five day workshop which will conclude tomorrow Friday 06th of October 2023.
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Pic 1: CEO for NEFC Patrick Kennedy Painap and Hon. Rufina Peter MP Governor of Central Province converse as they head to opening of NEFC Southern Region Intergovernmental Workshop
Pic 2: NEFC CEO Patrick Kennedy Painap welcoming workshop participants
Pic 3: The founding Chairman and former CEO of NEFC, Dr. Nao Badu. (Blue Toaman)
Pic 4; Hon. Rufina Peter MP Governor of Central Province addressing workshop participants
Pic 5: Participants registering
Pic 6 and others: Randoms