US$50 Million Loan from ADB to Deepen Cambodia’s Public Financial Management Reforms
Phnom Penh, November 24, 2023 --
The Asian Development Bank (ADB) approved a US$50 million policy-based loan to support the Government of Cambodia improve its public financial management (PFM) systems to deliver effective and efficient public services for inclusive growth.
According to an ADB’s press release AKP received this morning, the second subprogramme of the Strengthening Public Financial Management Programme builds on the first subprogramme’s achievements to enhance policy and regulatory frameworks for expenditure and revenue management; improve the absorptive capacity of selected government ministries to implement PFM reforms; and strengthen the oversight responsibilities of the National Audit Authority.
Reform measures supported under the second subprogramme to modernise PFM systems in Cambodia have been fully implemented prior to approval. These include improvements in strategic planning and budgeting to improve alignment with policy objectives, boosting revenue mobilisation to further expand fiscal space for public expenditure priorities, enhanced public investment management for effective public expenditure management, and strengthened public debt management.
Greater efforts to boost digitalisation of PFM systems and strengthening of internal and external audits were among the reform measures to improve operational efficiency, foster financial accountability, and enhance oversight of public expenditure.
“The reforms under ADB’s financing respond to the development constraints identified by the government in Cambodia’s expenditure and revenue management processes. They will enhance the implementation capacity of line ministries and strengthen external audit functions,” said ADB Country Director for Cambodia Jyotsana Varma. “Interventions under the programme will provide extra fiscal space, enabling the government to improve the availability and quality of public services and support inclusive growth.”
ADB has a long-standing partnership in supporting Cambodia's PFM reforms both at the national and subnational levels since 2008. This second subprogramme builds on these foundations and includes capacity development for government officials on gender-responsive budgeting and integrates gender mainstreaming in governments budgets to improve gender equality. It also includes the integration of climate adaptation and mitigation considerations in public investment projects to boost resilience to natural hazards and ensured focused budget allocations to build climate resilience.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
Deputy Prime Minister and Minister of Economy and Finance H.E. Aun Pornmoniroth (4th L), who is also the Chair of the Public Financial Management (PFM) Reform Steering Committee, and ADB Country Director for Cambodia Ms. Jyotsana Varma (5th R) pressing a symbolic button in an event to officially launch the rollout of the Financial Management Information System. (Photo: ADB)