Publication: Guinea Public Expenditure Review: Investing in Human Capital to Protect the Future
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2021
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2023-01-08
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Despite a recent track record of sustained growth, large natural resource endowments, and macroeconomic stability, Guinea remains one of the poorest countries in the world. Mining production has boomed in recent years, but the economy remains undiversified and investment to close the country’s human capital gaps will be critical to unleashing growth and reducing poverty sustainably. Although Guinea’s response to Coronavirus (COVID-19) has been strong, based on lessons learned from the recent Ebola outbreak, the pandemic has exposed the lack of a social safety net and has had a negative impact on tax collection and fiscal buffers. The government now faces the challenge of addressing the pressing need for human capital investment while also preserving fiscal and debt sustainability. Making spending more efficient could help address Guinea’s human capital challenges. Guinea’s Human Capital Index (HCI) is below what would be expected for its income level, while rapid population growth is putting pressure on the provision of education and health services. The lack of fiscal space has narrowed its scope to increase education and health spending to reach regional and international norms. Without reforms, tax revenues are unlikely to increase enough to finance the country’s large social and infrastructure needs. In the current context of weak tax revenues, increasing the efficiency (allocative and technical) of spending will therefore be key to improving health and education outcomes. This Public Expenditure Review (PER) therefore aims to examine the efficiency and effectiveness of Guinea’s public expenditure on health and education, as well as its domestic revenue mobilization
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“World Bank. 2021. Guinea Public Expenditure Review: Investing in Human Capital to Protect the Future. © World Bank. http://hdl.handle.net/10986/38385 License: CC BY 3.0 IGO.”
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The drafts of the Discussion Papers were sent to the Government for review and for formulation of an action plan for implementation in July 2003. This summary overview paper provides a synopsis of the Discussion papers.Publication Guinea-Bissau Public Expenditure Review(Washington, DC: World Bank, 2019-01-17)Guinea-Bissau is a small state in West Africa with a population of around 1.8 million. It is rich in natural resources (fisheries, forestry and agriculture) and biodiversity. Economic activity is, however, dominated by the production and sale of unprocessed cashew, which is also the main source of income for more than two thirds of households. Guinea-Bissau is host to a large variety of ethnic groups, languages and religions, with communal and ethnic-based violence remaining low. The country has a history of political and institutional fragility dating back to its independence from Portugal in 1973. Since independence, four successful coups have been recorded, with another 16 coups attempted, plotted, or alleged. Political fragility has been manifesting itself in frequent government turnover. Political instability has been responsible for large drops in output and government expenditure. After almost three years of political gridlock, a new consensus government came to power in April 2018. In sum, Guinea-Bissau has been caught in a vicious cycle of poor governance, fragmented elites, weak public sector capacity, and a poorly diversified economy. The objective of the Guinea-Bissau Public Expenditure Review (PER) is to analyze government expenditure, fiscal revenue, and public financial management in selected sectors (education, health, and security). The PER is a follow-up to the World Bank’s (2017) Public Expenditure Analysis that provided an overall review of public finances in Guinea-Bissau (see Annex I). 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The three sectors under consideration together account for over thirty percent of government expenditure; thus, any efficiency improvements and/or expenditure savings in those sectors are likely to be substantial.Publication Guinea Bissau - The Challenge of Restoring Budgetary Discipline : A Public Expenditure Review(Washington, DC, 2004-02-05)This Public Expenditure Review (PER) presents a critical view of Guinea-Bissau's nascent democratic structure, one that does not ensure a clear separation of powers, which results in the need for the judiciary to exercise its lacking independence. Restoring budgetary discipline requires a series of actions in the area of fiscal policy at the macroeconomic level, as well as measures geared towards better prioritization, and allocation of public resources. At the same time, the government needs to resume efforts initiated before the conflict of 1998/99, and take steps to reform the current public finance management system. The renewed reform agenda should focus on the budget cycle encompassing the legal framework regulating it, the way the budget is formulated, executed, controlled and accounted for, so that it can be possible to improve efficiency, transparency, and accountability in the use of public resources. The main findings include institutional weaknesses and recurrent macroeconomic imbalances; an economy heavily dependent on exports, vulnerable to seasonal supply shocks; thus, to circumvent a situation of growing financial difficulties, and institutional fragility, the public finance management system has become largely informal, with grave, undesired consequences in terms of transparency and accountability. The report focuses on institutional reforms, aimed at improving the government's revenue mobilization capacity, and strengthening budgetary discipline. Recommendations for the social sectors suggest seeking additional sources of public sector financing; strengthening regulation of the private sector in Health; reviewing the structure of the education budget; and, negotiating a more flexible use of donor funding, integrating the Poverty Reduction Strategy Paper (PRSP) process with the sectors' planning efforts. To this end, the coverage of the budget should be increased, coordination of information improved, the budget preparation process strengthened, enhancing expenditure control, through greater legislative and civil society involvement in the budget process.
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