A $33m fund to help the Ethiopian government modernise management of its public finance and procurement has been approved by the World Bank.
The group said that the fund, in the form of an International Development Association (IDA) credit, would allow Ethiopia to strengthen the effectiveness of internal control systems and ensure proper expenditure management to reduce extreme poverty and promote shared prosperity.
The credit will allow a Public Financial Management Project to be implemented by Ministry of Finance and Economic Cooperation. It will streamline and automate financial management systems, improve budget planning and execution, payroll processing and financial reporting.
It will also help improve the regulatory and institutional framework for procurement. A certification programme will be introduced for procurement staff, and the money will help the government increase the capacity of federal and regional procurement regulatory bodies in market research, data collection and performance monitoring.
Carolyn Turk, country director for Ethiopia, said the government recognised the necessity for an efficient public expenditure management system when it comes to a country’s development and had already introduced a reform programme to improve its ability to manage and control its large-scale public expenditures.
“The Public Financial Management Project would help improve the efficacy of the country’s existing expenditure management systems at all levels of government,” she added.
The project is expected to increase the capacity of audit and oversight institutions, which have been identified as one of the weakest links in the Public Financial Management chain in Ethiopia. It will also help introduce international accounting, auditing and bookkeeping standards, and support the new professional body for accountants and auditors.
Eric Brintet, World Bank Task Team Leader for the project, said: “Supporting these important reforms of financial management and procurement will result in significant cost savings for the country by standardising procedures and reducing processing time.”
The World Bank’s IDA provide grants and low- to zero-interest loans for projects and programmes to boost economic growth and reduce poverty in the world’s poorest countries.