Cambodia secures ADB help to improve PFM in rural local governments

23 Sep 20

Cambodia will work to improve public financial management among its local governments, after obtaining a loan from the Asian Development Bank.

 

The government began decentralisation reforms in 2001 and has been supported by the ADB since 2002.

But by 2014, spending by subnational administrations accounted for only 7% of total government spending, which received just 3.6% of national revenues.

Since then, an additional 2% of the national budget has started to be transferred to districts, municipalities and communes – Cambodia’s three levels of local government.

ADB’s newest loan, which totals just over $29m, will be used to continue this work, particularly in rural areas, where most of the country’s poor live.

“The project aims to help local governments across Cambodia provide sustainable, effective and efficient delivery of basic public services, while also bridging the urban-rural divide,” said ADB senior public management specialist Jhelum Thomas.

It will focus on improving aspects of public financial management, including strengthening strategic budget plans, audit and ombudsmen functions, as well as looking at revenue and expenditure management, aiming to better meet local needs.

The programme will also include the construction and operation of the National School of Local Administration, seeking to address skills shortages among local government staff.

Thomas said Covid-19 has led many people to move from urban to rural areas, putting pressure on local government functions, such as providing social assistance, maintaining roads and water supplies and improving sanitation.

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