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DAKAR, July 13, 2009 – The world Bank’s State-and-Peace Building Fund (SPF) granted Guinea-Bissau USD 1.74 million to strengthen the capacity of the Ministry of Finance of this fragile country in critical areas of public financial management (PFM) where consensus for reform has already been built and political support is considered strong, but where technical assistance and capacity building needs are acute.
The agreement was signed in June 17, 2009 by Jose Mário Vaz, Minister of Finance of Guinea-Bissau, and Habib Fetini, World Bank Country Director. This signature is a response to the request of the Bissau Government to continue support for PFM reforms following the closing of the Low Income Countries Under Stress Trust Fund (LICUS) grant in December 2008.
According to Julien Bandiaky, Task Manager, “the grant will finance a combination of technical assistance and capacity building activities in budget preparation, execution, and reporting as well as in customs, treasury and tax management”. Part of the grant will be devoted to enhance budget internal control and for public procurement reforms.
To better engage stakeholders to support the PFM, the Task manager emphasized that the new SPF grant will help the country to implement a communication strategy around the PFM reforms program 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.
Julien Bandiaky recalled that ”PFM 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.
As reminder, on June 16, the World Bank’s Board of Executive Directors discussed the Interim strategy note (ISN) that sets out the Bank Group’s support to the Guinea-Bissau government’s reform program for the period FY09-10 and approved a US$8 million grant to Guinea-Bissau to better implement its PRSP.