| Grant Profile: |
| Project Title: |
Economic Governance Support |
| PCF/LICUS/SPF: |
SPF |
Status: |
Open |
| File Number: |
| Region: |
AFR |
| Sector: |
Law and justice and public administration |
Country: |
Guinea-Bissau |
| FY approved: |
2009 |
Grant Theme : |
Public sector governance |
| Keyword(s): |
Public expenditure, financial management and procurement |
Approved Amount: |
$1,740,000.00 |
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Grant Recipient:
Ministry of Finances of Guinea-Bissau |
Grant Purpose:
The main objective of the grant is to strengthen the capacity of the Ministry of Finance (MoF) in critical areas of public financial management where consensus for reform has already been built and political support is considered strong, but where technical assistance and capacity building needs are acute.
Specifically, the grant would finance a combination of technical assistance and capacity building activities in the following areas: (i) budget preparation, execution, and reporting; (ii) customs, treasury and tax management; (iii) budget internal control; and (iv) public procurement reform. This will involve technical assistance provided through training, consultants (regional and international), and equipments. The intended beneficiaries are the various directions at the MoF: Budget, Customs, Treasury, Tax, Finance Inspection, Financial Control, and Direction of Public Procurement.
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Grant Activities:
Component 1: Budget preparation, Execution and Reporting
This first component will help to:
(i) maintain a dynamic Public Finance Management Team (PFMT) at the Ministry of Finance (MoF),
(ii) support the communication strategy around the public finances reforms program;
(iii) support the continued upgrading of the information system of the MoF (notably Intranet, Internet, and a secured communication system, cabling, acquisition of a VSAT);
(iv) provide training for staffs working with the integrated public financial management system;
(v) finance the acquisition of materials and operating costs to support the above actions.
Component 2: Customs, Treasury and Tax Management
This component supports technical assistance, training , purchase of office equipment, and upgrading of existing information systems for the customs, the treasury and the tax department.
Component 3: Budget internal control
The component complements European Union support by helping to establish the Finance Control Directorate as a functional body, through the acquisition of equipment (desktops, printers), and the funding of additional training for its staff. The component also supports financing the acquisition of equipments (desktops, printers) and training for staff of the General Inspection of Finance.
Component 4: Public Procurement System
The proposed grant will financ:
(i) small rehabilitation works for facility improvements (for the creation of procurement departments in the targeted line ministries);
(ii) training materials for extending the program to four additional ministries (Commerce and Industry; Economy; Fisheries; Transports and Telecommunication);
(iii) equipment and office materials for the procurement departments (computers and printers);
(iv) recruitment of a regional public procurement expert.
Component 5: Independent evaluation and external audit
This component will finance an independent evaluation and an external audit after completion of the grant-financed activities.
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News:
Following several successful projects and a vast array of lessons learned during their implementation, the World Bank and the Government of Guinea-Bissau scaled up their mutual effort aimed at supporting economic governance in the country. The Bank’s State- and Peace-Building Fund granted Guinea-Bissau USD 1.74 million to strengthen the capacity of the Ministry of Finance in the fragile country. The program will provide support to the Ministry in the critical area of public financial management. Consensus for reform in this area has been already achieved and backed up by strong political support, but the need for effective technical assistance and capacity building in this field remains high.
The agreement on scaling up support for economic governance in the country was signed in June 2009. The event is a response to the need of the Bissau Government to continue support for public financial management (PFM) reforms following the closing of the preceding Low Income Countries Under Stress Trust Fund grant in December 2008. The first Support to Economic Governance project provided the Government of Guinea-Bissau with assistance in improving public financial management in the country, in addition to enhancing aid effectiveness and civil society capacity for peacebuilding. With the help of the grant, the country made notable progress in advancing reforms in the areas of expenditure control and revenue collection, and improving administrative capacity in these areas.
The project also helped the Government develop its 2007 emergency program, and contributed to the issuance of treasury bonds that helped reduce the budget’s financing gap in that year. 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 that were subsequently approved by the Parliament.
Although the first Economic Governance project helped the government significantly in implementing public financial management reforms, contributed to enhancing public procurement procedures, and trained personnel in different ministries, it outlined the need for ongoing technical assistance. Such assistance will ensure efficiency and further facilitate the implementation of reforms.
The objective of the new project is to strengthen the capacity of the Ministry of Finance to continue its efforts in improving public financial management in the country. It finances a combination of technical assistance and capacity building activities in budget preparation, execution and reporting, customs, treasury and tax management, budget internal control, and public procurement reform.
Julien Bandiaky, Task Manager of the project, recalled that ”public financial management reform is a key component of Guinea-Bissau’s 2006 National Poverty Reduction Strategy Paper (PRSP) that, among others, aims at fostering institutional development and good governance”. The strategy highlights the critical need to improve efficiency in the public administration, notably by improving mechanisms for economic and financial management of public resources.
To better engage stakeholders to support public financial management, the task manager emphasized that the new State- and Peace-Building Fund grant will help the country to implement a communication strategy around the PFM reforms program that was developed in 2007 and never found financing. The goal will be mainly to inform stakeholders about the PFM reforms and the importance of paying taxes.
As reminder, a day before the signing of the agreement for the new grant, the World Bank’s Board of Executive Directors discussed the Interim strategy note that sets out the Bank Group’s support to the Guinea-Bissau Government’s reform program until July of next year and approved a US$8 million grant to Guinea-Bissau to better implement its poverty reduction strategy.
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