Washington D.C. March 10, 2011- The World Bank Board of Directors approved last week a US$55 million loan to enhance the efficiency of Panama’s public sector. The project, anchored in the Panamanian Government’s pursuit of more efficient public expenditures will lead to more open, performance-based and accountable day-to-day operations.
A key component of this assistance will consolidate and integrate all current financial management processes into a new model that would significantly improve the government’s formulation of public policies and programs as well as their efficiency and effectiveness. Among this new model’s goals will be to cover 100 percent of all government agencies, and 90 percent of the Central Government’s resources, a significant improvement from the current fragmented system.
“Our government’s ambitious investment plan has benefitted from economic growth and increased tax revenues. But to ensure public accountability and support toward this plan, we recognize the need to improve the quality and efficiency of such public expenditures,” said Félix Adames, director of investment programming at the Ministry of Economy and Finance (MEF).
As a result of this assistance, the Government expects to improve its budget presentation to the Panamanian Congress, including program classifications and performance benchmarks. Also, the MEF and the Comptroller’s Office (CGR) will seek to disseminate quality financial reports in accordance with modern accounting and auditing standards. Finally, to improve public and private sector perceptions related to government procurement, the Government also aims to increase its ratings in the OECD’s procurement benchmark index.
“The objective of the Bank’s support is to assist Panama’s public agencies in producing, using and disseminating timely, performance-based information,” says Felipe Jaramillo, Country Director for Central America at the World Bank. “These efforts should allow for more efficient, transparent and accountable use of public funds.”
The Project includes four major components:
- Strengthen performance-based budget management and evaluation: To support the MEF in improving institutional and technical capacity for performance-based planning and budgeting; to assist in the development of monitoring and evaluation functions.
- Improve execution, accounting and control through a new financial management model: To assist MEF in integrating all core public financial management processes; to help CGR modernize its control systems and the Government enhance its statistical capacity.
- Strengthen public procurement: To increase the efficiency and effectiveness of the goods and services delivered by the Government to the citizens, supporting the General Directorate of Public Procurement (DGCP) with educating public procurement officials; and improving legal and regulatory reforms that modernize procurement processes. Such modernization will include support for the e-procurement platform PanamaCompra, which will increase transparency and efficiency.
- Create and Support Project Management Capacities: To Provide assistance to MEF, CGR and DGCP in carrying out adequate management, monitoring, reporting, auditing and evaluation of Project implementation activities, as well as to boost Panama’s public sector efficiency reform agenda.
The Project will be financed by a US$55 million loan with a 25-year maturity period, including a 4-year grace period.
