World Bank Grant Supports “Accountability Upgrade” in Yemen to Drive Transparency and Efficiency

May 17, 2013

WASHINGTON, May 17, 2013 – A US$5 million grant will improve efficiency, transparency and accountability of public finance management systems and institutions in Yemen and respond to popular demands for government that address the needs of citizens.

Discontent with government unaccountability has been a major theme of popular uprisings in the Arab world, echoed too in Yemen’s “Change Square” and in protests elsewhere in the country. To meet public expectations of greater transparency and stronger accountability, the new Government of Yemen is taking initial steps to put in place systems that reveal the workings of public spending and show where the money goes.

“What Yemeni citizens want to see is their government spending the public’s money on services that deliver health, education, roads, social protection and all the other elements that will make up a better quality of life,” said Wael Zakout, World Bank Yemen Country Manager. “The Ministry of Finance has showed real commitment to reforming the public financial management systems and this is especially important given the $7.5 billion that international donors have pledged to the country.”

The grant approved today supports the ongoing Public Finance Modernization Project which began in January 2011 at the initial project cost of US$12 million. Since then Yemen has faced security challenges and consequent interruption of disbursements and assistance from the Bank. Notwithstanding these difficulties the government financed an Accounting and Financial Management Information System pilot in line ministries from its own budget demonstrating its commitment to the program. As a result, this system is now established in 17 ministries and three governmental departments, contributing to improved budget execution, accounting and controls.

“We can expect improved budget preparation, strengthened budget execution, enhanced procurement controls, and, improved external and internal audit,” said Arun Arya, World Bank Task Team Leader of the Project. “This is a real ‘accountability upgrade’ which should also reduce transaction time in the Ministry of Finance and minimize chances of resource leakages.”

The “accountability upgrade” includes bringing the outdated system of national accounts up to international standards and establishing an appropriate internal audit system while simplifying procedures and building the capacity of Ministry of Finance and project staff. Its piloted accounting system will be web-enabled and installed in the Ministry of Finance controlled treasury offices in 21 Governorates.

This project is financed by the World Bank’s International Development Association (IDA) which was established in 1960 to help the world’s poorest countries by providing interest-free loans (called ‘credits’) and grants that fund projects to boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 82 poorest countries. Resources from IDA bring positive change to 2.5 billion people living on less than $2 a day. Since 1960 IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged around $15 billion over the last 3 years.

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