WASHINGTON, December 20, 2010 - The World Bank’s Board of Executive Directors approved the Public Finance Modernization Project in the amount of US $12 million to improve the efficiency and transparency of public finance management with capacity building and monitoring and decision-making systems.
Yemen is the poorest country in the Middle East and North Africa region and faces daunting challenges in an uncertain global and regional environment. The government is facing growing fiscal problems. While approximately 75 percent of government revenues were derived from oil over the last decade, the country’s oil resources are on the decline. Combined with the world oil price decline since 2008, this will adversely affect future revenue flows, further emphasizing the need to strengthen public finance management and efficiency of public resources.
The Public Finance Modernization Project is designed to provide support to the Ministry of Finance and other key finance institutions to improve the efficiency and transparency of public finance management by modernizing Yemen’s systems and enhancing the capacity of public finance management institutions. This includes the introduction of public finance management tools for strengthening accountability and decision making. The project will also support the expansion of the roll-out of a computerized integrated financial management system. The project is also designed to improve transparency in budget preparation and execution through involving civil society organizations and building social accountability mechanisms.
The project is aligned with Yemen’s national objectives and reform agenda especially in relation to three stated goals of transparency, public finance management, and administrative capacity. It is anticipated that the upcoming new 5 year Development Plan for 2011-2015 will again highlight the importance of steadily improving the public financial management system.
The project will be implemented over a five year period by the Ministry of Finance in partnership with the Ministry of Planning and International Cooperation, the Ministry of Civil Service and Insurance, the High Tender Board, the High Authority on Tender Control and the Central Organization for Controls and Audit.
At the close of project, the efficiency and transparency of the country’s public finance management systems should be measurably improved and the capacity of the government staff enhanced.
“This project will support government efforts in improving public finance management performance which in turn would contribute to improved aggregate fiscal discipline, better alignment of budgetary resources to the country’s strategic priorities, more efficient service delivery at the local level, and improved reliability and transparency of financial information”, said Arun Arya, World Bank Senior Public Sector Management Specialist.