World Bank (WB) will provide $100 million to Bangladesh to improve public service delivery through an effective, efficient and transparent public financial management (PFM) system.
To this end, the government and the WB signed a financing agreement on Thursday, said a WB release on Saturday.Monowar Ahmed, Secretary of Economic Relations Division (ERD) and Dandan Chen, World Bank Acting Country Director for Bangladesh and Bhutan put pen on the agreement paper at ERD.
The credit, coming from the World Bank’s International Development Association (IDA), has a 30-year term, including a five-year grace period, and carries a service charge of 0.75 percent and an interest of 1.25 percent.
The Strengthening PFM Program to Enable Service Delivery program will support the government’s PFM Action Plan 2016-2021.
The program will help improve fiscal forecasting, public budget preparation and execution as well as enhance financial reporting and transparency in the ministry of education, ministry of health, finance division, local government division, roads, public works, and local government.
“An efficient PFM system is essential for sound macroeconomic management,” said Dandan Chen.
“The program will build on the successes of the government’s ongoing efforts to help public agencies strengthen oversight and improve availability of public resources for effective and efficient public service delivery,” added Chen.In the last two decades, Bangladesh has improved its PFM systems with prudent fiscal management. The program will help Bangladesh address these bottlenecks using the country’s own systems. It will help strengthen the capacity of the Budget Management Committees in the line ministries, including the timely release of budgetary allocations.
It aims to reduce the time taken to release funds from departments to frontline service delivery units by more than half.
The program will also help improve fiscal planning, pension and debt management and SOE, for example by supporting modernizing payment processes, including electronic fund transfer for pension processing and payment.
“The Government of Bangladesh is committed to further strengthen the PFM System and ensure transparency and accountability,” said Monowar Ahmed.
He said Bangladesh is a pioneer in having a PFM with built-in disintegration ability in terms of climate, gender, poverty and other development priorities.
For example, the government has rolled out climate budgeting across 20 ministries with climate-relevant expenditure. Such PFM sensitiveness ultimately aims that the citizens receive social services effectively and on time, added Monowar.