World Bank has decided to grant a USD 12 million financial package to the Maldives, in order to strengthen the island nation's public sector financial management systems.
According to a press release, World Bank's Board of Directors approved the package last Thursday, which would build on the existing Public Financial Management Systems Strengthening Project. The additional financing will focus on improving planning and budgeting, debt and cash management, financial reporting, procurement, and State‐Owned Enterprise monitoring and oversight.
The bank stated that this project will be funded by an International Development Association (IDA) grant and credit, to be implemented over a period of four years.
The World Bank highlighted that the Ministry of Finance and Treasury of the Maldives reduced the fiscal deficit from 10.6 percent of Gross Domestic Product (GDP) in 2016 to 2.5 percent in 2017. The bank went on to note that the ministry also improved its revenue collection and shifted from recurrent to capital expenditure to support public investments.
"The Ministry has also brought more transparency to its budget and financial information through an integrated financial management information system. Further to that, the Auditor General has taken steps to disclose audit reports on public debt and guarantees," read the statement.
According to the World Bank, the additional financing is expected to result in stronger preparation and prioritization of high impact and affordable public investments, optimized cost and risks of public debt, and improved public procurement. The modernization of these core public financial management functions aims to ultimately improve the effectiveness and efficiency of public services.