2004年-世界发展银行全球_Guinea_Bissau_-_The_Challenge_of_Restoring_Budgetary_Discipline___A_Public_Expenditure_Review_122页_7mb

Summary of the Public Expenditure Review for Guinea-Bissau

Core Content

This report, titled Guinea-Bissau: The Challenge of Restoring Budgetary Discipline – A Public Expenditure Review, was prepared by the World Bank in February 2004. It analyzes the fiscal and institutional challenges faced by Guinea-Bissau and provides recommendations for restoring budgetary discipline and improving public expenditure management.

Main Findings

• Guinea-Bissau is a Low Income Country Under Stress (LICUS) with institutional weaknesses and recurring macroeconomic imbalances.
• The country's transition from post-war to a functioning government remains a structural challenge due to the lack of clear separation of powers in its nascent democratic structure, which affects accountability and transparency.
• The government's fiscal performance has deteriorated continuously, with the PRGF-supported program going off track after its implementation.
• The economy is heavily dependent on exports of primary goods, especially cashew nuts, and is very vulnerable to seasonal supply shocks.
• Inflation has been stabilized at around 4% since 1999 due to the adoption of the WAEMU (West African Economic and Monetary Union) and the use of fixed interest rates and credit controls by the BCEAO (Central Bank of West African States).
• The government has not been able to reduce the primary deficit or the size of domestic and external debts, which are over 400% of GDP.
• Informality is growing in the management of public resources and economic transactions, leading to a lack of transparency and accountability.
• The current tax system is archaic, complex, and mismanaged, with revenue sources heavily concentrated on fishing licenses and international trade taxes.
• Public sector revenue is insufficient to cover current expenditures, and donor funding is not entirely under government control.

Key Recommendations

For the Social Sectors

• Seek additional sources of public sector financing to support essential social spending. The government should conduct a census of public servants to eliminate "ghost" workers and redirect savings to increase salaries for teachers and other public sector workers.
• Explore alternative revenue sources such as taxes on vehicles, alcohol, and tobacco, which can have a positive impact on health outcomes and increase government revenue.
• Strengthen regulation of the private sector in health to ensure service quality and prevent excessive subsidies to private entities at the expense of public funds and the poor.
• Review the structure of the education budget to include a breakdown between primary and secondary education, enabling more transparent and effective planning.
• Negotiate more flexibility in donor funding to ensure that the funds are used effectively and meet specific targets. Donors should be involved in discussions to ensure realistic integration of the PIP (Multi-Year Investment Plan) into the annual budget.
• Integrate the PRSP (Poverty Reduction Strategy Paper) with sector-specific planning to ensure government ownership and coherence in the strategy.

For the Budget Process

• Improve the coverage of the budget by finalizing the budget nomenclature in line with COFOG guidelines and adopting the WAEMU directives transparently.
• Enhance coordination of information among government agencies and with donors, and ensure a clear division of responsibilities.
• Strengthen the budget preparation process by integrating the Directorate of Conjuncture and the National Statistics and Census Institute (NSCI) into the process. This will help in aligning the budget with macroeconomic realities.
• Communicate budget ceilings early to sector ministries and regularly update projections based on changing macroeconomic conditions.
• Seek donor assistance in implementing these reforms to ensure the necessary technical capacity and support.

Proposed Reform Strategy

• Short-Term Strategy for improved budget preparation and execution includes:

  • Increasing the coverage of the budget.
  • Improving coordination and communication.
  • Strengthening the budget preparation process through integration and early communication.

• Medium-Term Strategy to improve performance and accountability involves:

  • Developing a Medium-Term Fiscal Framework.
  • Restoring transparency and good practices in budget preparation.
  • Implementing a Medium-Term Expenditure Framework.

• The optimal sequencing of reform should start with:

  • Restoring and reforming the legal framework.
  • Adopting WAEMU directives in a transparent manner.
  • Strengthening expenditure control and budgetary discipline.

Conclusion

Restoring budgetary discipline in Guinea-Bissau requires a comprehensive approach that includes institutional reform, organizational development, and improved coordination with donors. The government must demonstrate renewed political commitment to the reform agenda and enhance the credibility of its public finance management system. This will create the conditions for donor reengagement and a return to effective governance.