Tunis, November 25th, 2008 – The Board of Directors of the African Development Bank approved a US $ 24.3 million loan to Equatorial Guinea to finance the Public Finance Management Support Project (PFMSP). The PFMSP of US $ 48.6 million, 50% of which is financed by the government, is designed to cover four years and it aims at improving the country’s economic and financial management system through the planning, budgeting and control functions.
The projects falls within the government's new National Economic and Social Development Programme, known as 2020 "NESDP" Vision which is aimed at promoting sustainable economic growth. It will contribute to the implementation of reforms proposed in the NESDP on transparency, accountability and the fight against corruption.
The project aims at establishing an innovative mechanism centred on the following two components:
- Reinforcing budget programming, execution and control which will: (i) establish a new programming framework for results-based budgeting, (ii) produce budget execution guides and manuals, (iii) computerize the expenditure system, (iv) modernize customs and tax services, and (v) reinforce budget control.
- Improving the efficiency of economic and financial services which will: (i) update the organic and institutional frameworks, (ii) adapt the legal and regulatory framework, and introduce a system of allowances, and (iii) put in place an appropriate mechanism for staff training and retraining.
The direct project beneficiaries are the Ministries of Finance and Budget, Plan, Economic Development and Public Investments, and the Economy, as well as planning services of the sector pilot ministries (Education, Health and Infrastructure) and the Audit Court.
The project will help to build government capacity regarding budget and programme consistency with NESDP objectives, improve budget execution monitoring and evaluation in the ministries, and fight poverty more effectively. The project will also contribute to increased transparency and accountability in the management of oil revenues, especially by improving the award and execution of public contracts, and reinforcing budget control structures.
The PFMSP falls within the Bank's strategic orientations with regard to governance for the 2008-2012 period, which establishes financial governance as a priority area. It should also be mentioned that the Bank has, in the past few years, gained much experience in financial governance in its regional member countries.