WASHINGTON, April 14, 2014 – A new project will enhance the efficiency of financial management systems and promote effective use of public resources in Lebanon. The US$ 5.2 million loan approved today will strengthen the capacity of the Ministry of Finance in fiscal policy analysis and debt management.
The Second Financial Management Reform Project builds on the results of a previous Bank supported operation that contributed to developing a comprehensive reform strategy by the Ministry of Finance over a five-year period, 2013-2017.
“High levels of debt, large fiscal deficits, and lack of fiscal space for public investments are major constraints to Lebanon’s economic growth,” said Ferid Belhaj, World Bank Director of the Mashreq Department. “The Ministry of Finance has embarked on many notable structural reforms including public financial management. The reform agenda is supported by several donors and activities are being coordinated to optimize synergies and to take full advantage of all partners’ added values and areas of specific expertise.”
The project will primarily benefit the Directorate General of Finance at the Ministry of Finance. Other beneficiaries include the Central Bank that works on debt and cash management and the Courts of Accounts that focus on the control environment. Reforms will be introduced to select line ministries in the areas of budget preparation, commitment controls and liquidation procedures. The Central Tender Board will lead on procurement related reforms and the Institute of Finance will manage training implementation.
“The project adopts a bottom-up approach by empowering civil servants to provide sound technical input to decision makers thus improving policy making,” said Joey Ghaleb, World Bank Senior Public Sector Specialist. “A strong emphasis will be placed on building the capacity of relevant staff to lay the groundwork for much needed structural reforms in public financial management which will materialize when the legislative and executive gridlocks are removed.”
Capacity building and implementation support for public finance management and fiscal consolidation is a key element under the Lebanon Country Partnership Strategy (FY11-FY14) and is aligned with the regional framework for engagement supporting governance. The project is also complementary to other instruments of assistance, planned and underway, notably in the energy and the social protection sectors where the objective is to reduce fiscal costs, decrease reliance on subsidies, and improve on governance and services.
