Liberia: World Bank Approves U.S.$19 Million to Improve DRM

... And strengthening of public finance accountability

The World Bank Board on Tuesday, July 16, approved an International Development Association (IDA) grant of US$19 million equivalent to improve domestic revenue mobilization (DRM) systems, and strengthen financial control and accountability in public finances. According to a World Bank release, this grant financing will be executed under the Public Financial Management Reforms for Institutional Strengthening (PFMRIS) Project.

The PFMRIS project will address financial management and governance issues, as well as deepen and institutionalize PFM reforms achieved to date to ensure sustainability, through a human capital (HC) lens. It will also address the importance of broadening the revenue base in an equitable manner to revert the worsening HC indices through the provision of public services in education and health.

"Transparency and accountability in the public sector are critical for the Liberian Government to assist in mobilizing additional revenue to deliver needed services, particularly in education and health. Boost in the country's human capital development will put Liberia on the path to prosperity and sustainable development," said Larisa Leshchenko, World Bank Country Manager for Liberia.

This project will lay the foundation for beginning to rebuild a social contract with citizens on their ability and willingness to demand accountability from the Government and the political elite. This new social contract and creation of greater fiscal space require more efficient spending through strengthening the ability of PFM systems to provide relevant information on expenditure and establishing reasonable controls and requisite oversight on overall government finances. The strengthened systems will enable the Liberian government ensure resources are being effectively used for enhanced HC development and improved service delivery.

Aligned with the Liberia's medium-term development strategy, Pro-Poor Agenda for Prosperity and development (PAPD), the project places emphasis on legal and regulatory framework, budget credibility, revenue mobilization, robust and linked IT systems, comprehensive and transparent financial reporting, and external scrutiny.

"The outcomes of an effective and efficient PFM systems are (i) fiscal responsibility, (ii) strategic resource allocation, (III) service delivery, and (iv) eradication or minimizing corruption. The project will ensure that the Bank does not only build PFM systems, but also that rules and regulations are followed or enforced," said Co-Task Team Leaders Donald Herrings Mphande and MacDonald Nyazvigo.

Through the enhancement of domestic revenue mobilization sources and systems, the PFMRIS project will support the Government of Liberia's efforts in improving its tax policy capacity to enhance the tax base through preparations to implement a broader based consumption Value Added Tax (VAT), replacing the General Sales Tax (GST). It will also stabilize and strengthen performance of financial controls and systems designed to facilitate the introduction of the Integrated Financial Management Information System (IFMIS) including the Civil Service Module (CSM) in approximately 35 of the remaining 57 ministries and agencies, as well as stabilize and strengthen IFMIS implementation across ministries, agencies, and commissions.

The PFMRIS will improve public-sector capacity for enhanced oversight and accountability to boost internal and external oversight by strengthening core accountability and integrity institutions, as well as providing support for the ability of civil society to participate in evidence-based policy discussions; it will also upgrade upstream and downstream PFM systems in selected sectors towards reducing existing core PFM-related bottlenecks within the chosen sectors that significantly impede the goal of improved service delivery systems; and it will enhance project management for effective, proper management, and results-driven implementation of the project.

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