The World Bank yesterday approved $100 million to improve Bangladesh's fiscal discipline and budget preparation.
The credit has been given under Public Financial Management (PFM) programme to make the financial reporting better and bring greater transparency and accountability in selected government agencies, said a WB statement.
“Bangladesh has improved its PFM systems over the past two decades with effective fiscal measures and by maintaining public debts at sustainable levels,” said Dandan Chen, WB's acting country director for Bangladesh and Bhutan.
“This project will further help public agencies strengthen oversight and improve availability of public resources, which are essential for public service delivery.”
The Washington-based lender said currently key bottlenecks exist in public resource allocation, availability and use for social service delivery.
Delay in budget releases is often cited as one of the biggest obstacles to smooth and efficient service delivery, and slow procurement processes delay the provision of necessary goods and services, according to the statement.
Citing an example, the WB said it takes an average of 15–18 months for drugs to reach upazila health complexes, while it should not take more than nine months for procuring and distributing these.
Inadequate audit follow-up and delayed resolution of audit queries affect aid disbursement and civil servants' terminal benefits, it added.
“The current context provides a unique window of opportunity to strengthen Bangladesh's PFM institutions and systems. This is a critical time to strengthen PFM, given the heightened need for prudent use of resources,” said Furqan Ahmad Saleem, World Bank Team Leader for the PFM.
"These reforms will contribute to achieving the Sustainable Development Goals and upper middle-income country status by 2030.”
The credit from the WB has a 30-year term, including a five-year grace period, and an interest rate of 1.25 percent with a service charge of 0.75 percent.