| Grant Profile: |
| Project Title: |
Support to Economic Governance |
| PCF/LICUS/SPF: |
LICUS |
Status: |
Closed |
| File Number: |
44
| Region: |
AFR |
| Sector: |
Law and justice and public administration |
Country: |
Guinea-Bissau |
| FY approved: |
2007 |
Grant Theme : |
Public sector governance |
| Keyword(s): |
Public expenditure, financial management and procurement |
Approved Amount: |
$1,200,000.00 |
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Grant Recipient:
Ministry of Finance of Guinea-Bissau |
Grant Purpose:
The objective of this proposal is to strengthen Guinea-Bissau’s economic governance and restore a sound and credible public finance management system. The grant will contribute to strengthening the capacity of the Ministry of Finance in the key areas of public finance, budgeting, payroll and public procurement management. These objectives will be pursued through a combination of technical assistance and capacity building activities. The intended beneficiaries are staff persons of key departments at the Ministries of Finance, Commerce and Industry, Defense, Economy, Fisheries, and Transports and Telecommunication.
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Grant Activities:
Component 1: Support to Public Finance Management
Activities under this sub-component will be jointly coordinated with the ongoing IMF/AFRITAC-supported capacity building work at the Ministry of Finance. This component will finance a senior international public finance specialist with expertise in budgetary processes in the West African CFA. The specialist will help authorities establish the Public Finance Management Task Force (PFMTF) team envisioned to be an independent and resilient entity who can replace the treasury committee after the transition period. The expert will also provide training events that will focus on expenditure planning and prioritizing, budget formulation, budget execution, accounting reporting and internal control, and ex-post reporting and evaluation.
Component 2: Technical Assistance and Capacity Building in Payroll Management
This component will finance one or two senior international public finance specialists, with expertise in payroll management in the West African CFA Zone, to support and advise the unit within the Ministry of Finance in charge of managing the payroll system. The overall objective of the assignment is to assist the Government to draw up a realistic road map and action plan for efficient and effective management and control of the public expenditures on personnel.
Component 3: Technical Assistance and Capacity Building in Procurement
This component will assist in consolidating the work already done in procurement by re-training staff in the pilot Ministries and extending the pilot procurement program to five additional Ministries (Commerce and Industry; Defense; Economy; Fisheries; Transports and Telecommunication).
The counterpart resources of the grant will finance a senior international public finance specialist with expertise in public procurements in the West African CFA franc zone. The expert will help in: (i) the preparation and regulation of public contracts and tenders; (ii) the execution, monitoring and evaluation of public contracts and tenders; and (iii) the control of public contracts and tenders.
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Results:
The grant supported the Government of Guinea-Bissau in enhancing aid effectiveness in the country, improving public financial management, and enhancing civil society capacity for peacebuilding. Key outcomes of the project include:
• With the help of the grant, the country is making progress in advancing reforms in the areas of expenditure control, revenue collection, and improving administrative capacity in these areas.
• The action plan for reforms in the public procurement system is being implemented in six ministries (education, health, agriculture, infrastructure, finance, and defense).
• Following a comprehensive audit of all revenue sources, including sectoral ministries and administrative revenues and receipts of public agencies, all public revenues are accounted in the general budget.
• Significant efforts have been made to move towards a single treasury account at the central bank (BCEAO) by closing or transferring all sectoral ministries’ non-project spending accounts at the BCEAO. The project helped the government establish a treasury department and train its staff in banking, accounting, and payments. The Treasury is now in a position to produce a monthly ledger, and the Economic Forecasting department produces a monthly synthetic government financial operations table. All payment operations are now made by the treasury and accounted for in a more timely and transparent manner.
• The Public Finance Management Team established to manage the Public Financial Management component of the project helped the government develop its 2007 emergency program. It also negotiated a debt rescheduling agreement with two commercial banks and the issuance of treasury bonds that helped reduce the 2007 budget’s financing gap.
• Despite political instability and difficulties in identifying sources of finance to reduce the financing gap, the project helped the Ministry of Finance develop its 2007 and 2008 budgets which were approved by the Parliament.
• The project helped develop a communications strategy for the public financial management component in 2007.
• The project helped coordinate development programs between the Prime Minister’s Cabinet and sectoral departments (energy, telecommunications, public infrastructure, transportation, economy, finance). It also enhanced collaboration among the Prime Ministers’s Cabinet, the Ministry of Finance, and donors on issues related to public-private partnerships which have implications for the budget and quality of critical basic services in the country.
• The program supported reforms and capacity building within the customs. An action plan for improving the work of the Customs department was developed in 2007.
• The project helped hire as well as train new and existing procurement personnel in different ministries.
• Preparation and implementation of public contracts is now carried out according to the new procurement procedures developed in the Ministries of Education, Health, Finance, Agriculture, Infrastructure, Commerce and Industry, Defense, Economy, Fisheries, Transports, and Telecommunication.
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Lessons Learned:
Lessons learned during the project include:
• As the peace-building process in Guinea-Bissau is still fragile and remains at risk of reversal, continued international support for the peace process will help mitigate this risk.
• Achieving an increase in aid to Guinea-Bissau requires adequate technical monitoring in order to ensure greater efficiency and facilitate the implementation of reforms.
• Continued government commitment is crucial for implementation of reforms.
• In a post-conflict situation, it is important to select a focused number of reforms that are deemed essential to supporting the government’s broader reform program. Such selectivity increases the likelihood that actions are implemented, and the reform program is moved forward.
• In order to maximize knowledge transfer and capacity building, a key aspect of the project was to provide training to the staff of the Ministry of Finance and assist the Minister of Finance. In addition, training of staff of the customs and treasury in Senegalese premises in Dakar showed strong benefit in harmonization practices with West African Economic and Monetary Union procedures.
• Given the risks and complexity of the reforms in the country’s context, close coordination with other development partners is important for mitigating risks, realizing synergies, and improving the leverage in the policy dialogue.
• Efficient collaboration between a project implementing unit and the ministries it works with is essential for the successful implementation of the project. Despite the high turnover in government officials, the project’s management unit was able to implement the reform program, as it managed to work effectively with new coming staff of the Ministry of Finance.
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