The government and the World Bank signed a financing agreement of $15 million to strengthen the country’s Public Financial Management sector, on Friday. According to a press statement issued by the multilateral lender, the funds will be used to finance the integrated Public Financial Management (PFM) Reform Project.

The project is being financed through a World Bank-administered Multi- Donor Trust Fund (MDFT) established in 2010 and currently funded by the European Union, UK Department of International Development, Government of Swiss Confederation, Government of Norway, Australian Government Department of Foreign Affairs and Trade, and United States of Agency for International Development.

The agreements were signed by the Joint Secretary of International Economic Corporation Coordination Division Shreekrishna Nepal and World Bank Country Manager for Nepal Faris H Hadad-Zervos in the presence of senior government officials, World Bank officials and Development Partners of the MDTF.

The project supports the priorities of the government as expressed in the National PFM Reform Plan (2016/17-2025/26) and aims to strengthen the effectiveness of selected PFM and procurement institutions, systems, and, procedures at the federal and subnational levels, according to the press statement. Accordingly, the project expects tangible results such as improved aggregate capital budget out-turns at the federal level, comprehensive accounting and reporting procedures in place in federal and subnational governments, improved audit planning and quality management for audit of federal and subnationals entities and improved timeliness of contract award in selected key sector agencies (KSAs) at federal level and selected subnational governments.

The project is organised around four complementary components with a multitude of linkages like strengthening public expenditure and revenue management in federal and local governments, strengthening the Office of the Auditor General, public procurement improvement and PFM reform management and coordination. Addressing the signing ceremony, Hadad congratulated the government on its thoughtful leadership during the entire preparation period, resulting in an integrated project that views PFM in a holistic and comprehensive manner.

The project has a unique strategic fit that rests at three levels—policy, institutions, and processes wherein technical assistance will be provided to implement the new policy framework, states the press release. It will also build the capacity of key PFM institutions, while maintaining a strong downstream focus and strengthening essential upstream PFM processes.

Joint Secretary Nepal appreciated the cooperation of the World Bank and MDTF Development Partners supporting the government’s PFM agenda to strengthen the public financial management system that would fit to support the federal transition. He added that the government will take the lead to drive the PFM agenda.