The World Bank (WB) has approved a US$100 million credit for improving fiscal forecasting, and public budget preparation and execution in Bangladesh.

The Strengthening Public Financial Management (PFM) Program to Enable Service Delivery program will support the government’s PFM Action Plan 2016-2021 and will help improve fiscal discipline, financial reporting and greater transparency and accountability in selected government agencies, said a WB press release yesterday.

“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, World Bank Acting Country Director for Bangladesh and Bhutan.

“This project will further help public agencies to strengthen oversight and improve availability of public resources, which are essential to public service delivery,” he added.

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.

For example, it takes an average of 15 to 18 months for drugs to reach the Upazila Health Complex and below, while it should not take more than nine months in procuring and distributing these. Inadequate audit follow-up and delayed resolution of audit queries affect aid disbursement and civil servants’ terminal benefits.

“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 Strengthening Public Financial Management Program to Enable Service Delivery Program.

“These reforms will contribute toward achieving the Sustainable Development Goals and upper middle-income status by 2030,” he added.

The credit from the World Bank’s International Development Association (IDA), which provides concessional financing, 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.

The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed more than $30 billion in grants and interest-free credits to Bangladesh.

In recent years, Bangladesh has been among the largest recipients of the World Bank’s interest-free credits.