KATHMANDU: The Open Budget Survey (OBS) 2023, conducted by Freedom Forum on behalf of the International Budget Partnership (IBP), has revealed that Nepal improved its budget transparency score to 50, surpassing the global average of 45 out of 100.

Nepal also scored 31 in public participation in the budgetary process, higher than the global average of 15 out of 100. The survey, first launched in 2006 by the IBP, a non-governmental organization (NGO) dedicated to promoting transparent, inclusive, and accountable government budget processes, measures essential aspects of governance and accountability such as participation, oversight, and transparency. Founded in 1997, IBP aims to enhance governance and reduce global poverty by ensuring that government budgets are managed effectively and equitably.

However, the survey showed that Nepal scored 36 in legislative oversight, below the global average, while its Supreme Audit Institution (SAI) oversight score was 67, exceeding the global average.

Despite the improvements, Nepal's budget transparency score falls short of the minimum threshold score of 61, which is considered necessary to foster informed public debate on fiscal policies and practices. According to the IBP’s latest survey, Nepal ranked 59th out of 125 countries surveyed in 2023, up from 77th in 2021.

The overall results indicate an improvement in public access to budget information in Nepal. Key budget documents, such as the year-end report, were published on time, unlike in the previous survey cycle in 2021, according to a press statement issued by Freedom Forum, an organization that has been conducting OBS in Nepal since 2009.

However, despite advocacy efforts from civil society organizations (CSOs) and the media, Nepal has not produced or made publicly available the pre-budget statement (PBS) and Citizen Budget, noted Taranath Dahal, Freedom Forum's Executive Chief and budget researcher.

The OBS 2023 survey provides an overview of Nepal’s current practices related to budget disclosure, opportunities for public engagement in the budget cycle, and effective checks and balances. Public participation is assessed based on formal opportunities for civic organizations and individuals to engage and provide input throughout the budget process. The strength of oversight institutions is measured based on the roles played by legislatures and supreme audit institutions (SAIs).

Recommendations for Budget Openness Reforms

The OBS has recommended several reforms to improve budget openness in Nepal. It has suggested including data on the government's financial position, macroeconomic forecasts, and estimates of expenditure arrears. Publish a glossary of budget terms to improve budget literacy and to improve the comprehensiveness of the enacted budget and other budget documents by publishing disaggregated and machine-readable data.

It also suggests to include the actual expenditures for administrative and functional classifications, and individual programs as well as to provide information on budget execution at the sub-national level (provinces and municipalities).

The survey recommends comparing planned revenues and actual outcomes, nonfinancial outcomes, and original macroeconomic forecasts with actual outcomes.

According to the survey, Nepal needs to work on improving public participation in various budget processes by continuing and sustaining pre-budget consultations with stakeholders, including at the provincial level, and submitting reports to the Parliament.

It also says that the Ministry of Finance and the Revenue Advisory Committee should inform citizens about which recommendations and inputs were used to improve budget policies.

It also suggests actively engaging with vulnerable and underrepresented communities, directly or through civil society organizations representing them.

Strengthening Legislative Oversight

Even though the Supreme Audit Institution of Nepal provides sufficient oversight, Nepal’s Federal Parliament offers weak oversight during the budget planning and implementation stages, the survey noted.

To improve oversight mechanism, the survey suggests submitting the executive’s budget proposal to legislators at least two months before the budget year starts.

It added that legislative committees should examine the executive’s budget proposal and publish reports with their analysis online.

A legislative committee should examine in-year budget implementation and publish findings online, added the survey report.

Other recommendations include ensuring the legislature is consulted before the executive shifts funds specified in the enacted budget or reducing spending due to revenue shortfalls during the budget year.

A legislative committee should examine the Audit Report and publish findings online, added the report.

Global Budget Transparency

Global budget transparency has increased by 24% since 2008 but remains below the sufficient level (a score of 61 out of 100) to allow meaningful public engagement. Legislative oversight is also below sufficient levels, and public participation is rare, the survey report added. Average audit oversight scores are sufficient, but challenges remain to ensure governments follow up on audit reports. The COVID-19 pandemic provided an excuse for many governments to sidestep legislative oversight, which has not fully recovered since.

“In these turbulent times, governments can restore public trust by opening up the budget process to meaningful engagement. Engaging the public is a winning proposition,” said Ana Patricia Muñoz, Executive Director of IBP. She added that an open budget process is critical to supporting democratic governments in delivering tangible gains to their people.

According to Freedom Forum, the Open Budget Survey 2023 assessed 125 countries, representing 95% of the world’s population and including budgets totaling more than $33.5 trillion in Fiscal Year 2022. This locally-led process involved in-country researchers, peer reviewers, and government reviewers who completed 30,000 indicators across all surveyed countries, assessing 672 publicly available budget documents and 299 participation mechanisms.

This latest round comes at a turbulent time of unprecedented challenges. Rising debt, inflation, conflicts, closing civic space, and climate change have led to serious setbacks for many.  (With inputs from RSS)