ISLAMABAD: The World Bank has approved a soft loan of $50 million to strengthen public sector performance in Sindh through improved revenue generation and expenditure management.

The Sindh Public Sector Management Reform project will contribute to improved collection of sales tax on services, improved credibility of budget execution and increased timeliness of contract execution, the World Bank resident mission in Islamabad announced on Thursday.

The project consists of public sector management reforms component, with result-based financing linked to incentives to meet disbursement linked indicators ($40m), and technical assistance to support activities for achieving these indicators ($10m).

World Bank’s Country Director for Pakistan Rachid Benmessaoud said that the project would support institutional development of the Sindh Revenue Board with enhanced staffing, increased automation, and improved auditing practices; and improved management for monitoring, evaluation and increased transparency.”

Result-based financing will be given against agreed eligible expenditure programmes in four reform areas: increasing tax revenue mobilisation; enhancing performance of public financial management systems; strengthening public procurement performance, and improving management of the development portfolio.

Zubair Khurshid Bhatti, Senior Public Sector Management Specialist of the World Bank, said that the project would enhance effectiveness of government departments, particularly the officials of the departments of Finance and Planning and Development and the Sindh Revenue Board.

In addition to the World Bank support, the European Union has committed about 9 million euros of technical assistance to public finance management reform in Sindh over a five-year period.

The EU assistance, with specific interventions to be finalised in close collaboration with the World Bank is likely to provide technical assistance related to achievement of three key public financial management objectives.

The objectives are: establishing strategic budgeting in Sindh; enhancing the credibility of budget execution and reporting; and improving accountability.

The Bank and EU teams are working together to harmonise the dialogue and ensure that their respective initiatives are complementary.

Published in Dawn, January 30th, 2015

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