Yemen secures World Bank cash for more public finance reforms

20 May 13
The World Bank has agreed to provide another $5m in funding to improve the efficiency, transparency and accountability of public finance management systems and institutions in Yemen.

By | 20 May 2013

The World Bank has agreed to provide another $5m in funding to improve the efficiency, transparency and accountability of public finance management systems and institutions in Yemen.

The grant, which was approved by the Bank on Friday, will support the Otsubo7 Modernisation Project that began in January 2011 with $12m of World Bank support.

Funding for the initiative was suspended in July 2011 as a result of the worsening political situation in the Middle Eastern country, but began again in January 2012. However, due to continuing security concerns, ‘fully fledged’ World Bank missions are currently unable to operate on the ground in Yemen to implement the project.

Despite this, the country’s government has financed its own pilot of an Accounting and Financial Management Information System to demonstrate its commitment to the World Bank programme.

This system is now established in 17 ministries and three government departments and is contributing to improved budget execution, accounting and controls by ensuring spending does not exceed budgeted limits.

Wael Zakout, World Bank Yemen country manager, said: ‘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

‘The Ministry of Finance has showed real commitment to reforming the public financial management systems and this is especially important given the $7.5bn that international donors have pledged to the country.’

The additional money will provide an ‘accountability upgrade’ by bringing the country’s outdated system of national accounts up to international standards.

It will also to establish an internal audit system. ‘Yemen does not have an effective internal audit system at present,’ World Bank notes on the programme explain. ‘The additional financing would in establishing an appropriate system and procedures for internal audit, thus reducing the potential fiduciary risks and leakages of public finance.’

Money will also be allocated to building the capacity of the Ministry of Finance and the staff tasked with implementing the modernisation project. The piloted accounting system will be web-enabled and installed in the Treasury offices run by the Ministry in each of Yemen’s 21 regions, or governorates.

Arun Arya, World Bank task team leader for the project, added: ‘We can expect improved budget preparation, strengthened budget execution, enhanced procurement controls, and improved external and internal audit.

‘This is a real ‘accountability upgrade’ which should also reduce transaction time in the Ministry of Finance and minimise chances of resource leakages.’

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