Government Cash Management: Good Practice & Capacity-Building Framework
41 Pages Posted: 20 Jul 2006
Date Written: May 2006
In many developing countries, government cash management is misperceived as synonymous to budget execution, accounting control, or debt management, instead of as a practice that aims to cost-effectively manage government cash positions, including their risks.
They often neglect the significant adverse impact of inadequate government cash management and the advantages associated with effective government cash management. While there is much literature on debt management, little is specifically about government cash management.
This paper aims to provide some research and analysis on government cash management practice in selected developed countries and recommend a capacity-building framework for developing countries.
It starts with a discussion of the definition and objectives of government cash management. It then presents the common features of an effective government cash management system by analyzing the practice in countries with effective government cash management.
Following the benchmarking, the paper discusses the importance of cash management, analyzes the common government cash management issues in developing countries, and offers some solutions to those common problems.
It also recommends a government cash management capacity-building framework for developing countries.
Keywords: cash management
JEL Classification: E50, H30, H50, H60
Suggested Citation: Suggested Citation