INTEGRATED PUBLIC FINANCIAL MANAGEMENT REFORM PROJECT : PHASE II
- Reference: P-LR-K00-014
- Approval date: 30/01/2017
- Start date: 21/06/2017
- Appraisal Date: 15/03/2016
- Status: OngoingOnGo
- Implementing Agency: MINISTRY OF FINANCE
- Location: REPUBLIC OF LIBERIA
The overarching objective of the project is to strengthen transparency and accountability in public financial management; and enhance revenue mobilization from the natural resource sector. The project objectives are to be achieved through:
(i) Upgrade of IFMIS infrastructure to better track budget implementation, revenue collection and government expenditures;
(ii) Strengthening the capacity of institutions in PFM;
(iii) Capacity building for Debt Management, Macroeconomic Forecasting and Fiscal reporting;
(iv) Support to revenue mobilization and Administration; and
(v) Support to Liberia's integrity and anti-corruption agencies and CSOs involved in promoting accountability through monitoring of PFM processes and Governance in general for more efficient use of national resources.
The project has three components:
(i) Strengthening efficiency, transparency, and accountability in public financial management;
(ii) Enhancing domestic revenue mobilization from the natural resource sector; and
(iii) Project management.
Rationale for the Bank's involvement
With lower economic growth in Liberia following the EVD crisis and the drop in international commodity prices, continued progress on public financial management (PFM) reforms and particularly in domestic revenue mobilization is needed to ensure that limited resources are used efficiently. Although Liberia has made notable progress in PFM reforms and capacity in recent years, particularly with donor support including through the Integrated Public Financial Management Reform Program (IPFMRP), there is a need to consolidate progress made and continue to address challenges to improve transparency and accountability in the PFM system. Strengthened capacity and institutions will be necessary to manage efficiently and transparently government resources in line with its development strategies, to ensure the society benefits from the country's resources, and to increase stability. Improving transparency and accountability is further needed to address perceptions of corruption. Although civil service capacity has improved and numerous sector and reform strategies have been developed, capacity is still weak, and the strategies need to be effectively implemented.
The GoL has made significant progress across a range of PFM reforms in recent years with the support of development partners including the AfDB through the IPFMRP. These reforms have sought to restore and embed the PFM systems to enable GoL to better implement its development agendas. As presented in Technical Appendix XI, some of the reforms include: the introduction of the Free Balance integrated financial information management system (IFMIS) at the Ministry of Finance and Development Planning (MFDP), with a roll- out to 36 line Ministries and Agencies (M &As); the introduction of elements of a Medium-Term Expenditure Framework (MTEF); enhanced budget transparency through on-line access to budget documents and quarterly fiscal reports; the establishment of the semi-autonomous Liberia Revenue Authority (LRA); the automation of the collection and administration of taxes; the transitioning from an Internal Audit Secretariat into a full Internal Audit Agency that is active in 43 M&As; the establishment of a State-Owned Enterprise (SOE) reporting unit within MFDP; the launch of Treasury Bill auctions; the adoption of a decentralized Treasury Management Framework and county treasuries; and the passage of the GAC Act in 2014, increasing its stability and independence.
Despite this progress, Liberia still faces serious capacity challenges in PFM.
There are two direct beneficiary institutions for this project:
(i) the Ministry of Finance and Development Planning's (MFDP) PFM Reform Coordination Unit (RCU); and
(ii) the Liberian Revenue Authority (LRA). The RCU will coordinate the activities of all the other targeted entities. Within MFDP, the targeted units include the Aid Management Unit and the State-Owned Enterprise Financial Reporting and Coordination Unit. Outside MFDP, entities to benefit from this ISP include the Internal Audit Agency, Legislative Budget Office, Public Accounts Committee, Comptroller and Accountant General's Office, Public Procurement and Concessions Commission, Liberian Anti-Corruption Commission, and the General Audit Commission. Three professional PFM institutions will also be supported: the Liberian Institute of Public Administration, Liberia Institute of Certified Public Accountants, and the Financial Management Training Program. This project will also promote gender balance in its activities and ensure that women's participation in the training sessions reach at least 50% of eligible female staff (i.e., 50% of women professionals in PFM).
LAVERLEY Patricia - RDGW5