Pakistan: World Bank Supports Improvements To Public Financial Management

Contacts:

In Islamabad: Shahzad Sharjeel (051) 2279641

Email: ssharjeel@worldbank.org

In Washington: Benjamin Crow (202) 473-5105

Email: bcrow@worldbank.org

WASHINGTON, September 6, 2005—The World Bank today approved a credit of US$84 million to assist the Government of Pakistan with the continued reforms of its public financial management system. The objective of the Second Improvement to Financial Reporting and Auditing Project is to improve the efficiency and effectiveness of public expenditure and increase the potential for economic growth and poverty reduction.

The primary focus of Pakistan’s poverty reduction strategy is economic growth, supported by improved governance, social indicators, and programs that focus on the poor and vulnerable.  The Government has recognized that weak governance is at the heart of Pakistan’s poverty and development challenges, and that public financial management reform is essential. In addition to supporting the implementation of the systems developed in PIFRA I, the project will work with different tiers of government to introduce an automated system-wide implementation of medium term budgetary frameworks, assist in improving business processes and changes to government financial management, and will result in setting up enhanced accountability systems for devolved levels of local government.

“The public deserve crystal clear accountability for the use of public funds.” said John Wall, World Bank Country Director for Pakistan. “This project will strengthen the chain of public accountability from financial budgeting, to accurate reporting of expenditure through the auditing of that expenditure in ways that best serve the Public Accounts Committees of the assemblies.  The result will be faster, more reliable and more credible public financial statements”    

The project, which is to be implemented over a five-year period, consists of the following four core components:

i)          Financial accounting and budgeting system

ii)          Capacity building and upgrading of the Office of the Auditor General of Pakistan

iii)         Capacity building and upgrading of the Office of the Controller General of Accounts

iv)         Project Management. 

  “The project will also facilitate Pakistan’s transition to adoption of full international public sector accounting, reporting and auditing standards”, said Ismaila B. Ceesay, World Bank Senior Financial Management Specialist and Co-Task Leader for the Project.

The US$84 million interest-free credit, from the International Development Association (IDA), the World Bank's concessionary lending arm, has a 35-year maturity, a 10-year grace period, and a 0.75 percent service charge.