Public Financial Management and Administration

Speeches Shim

Public Financial Management and Administration
Public Financial Management and Administration

BACKGROUND 

USAID has continued to play a critical role in helping the Government of Jordan implement fiscal structural reforms and to meet the International Monetary Fund’s Extended Fund Facility conditionalities. These reforms aim to increase growth, stimulate job creation, foster fiscal stability, increase transparency, and improve budget discipline. With support from USAID, Jordan has made considerable progress in improving its public financial management. The Government Financial Management System has been rolled out to all ministries, measures to improve tax compliance and combat tax evasion are being implemented, the income tax base has been expanded, a new Public Private Partnership law has been enacted, and budget planning and execution processes have been improved. These reforms are helping Jordan achieve fiscal stability and meet IMF requirements. However, Jordan’s fiscal policy formulation needs further strengthening to reduce budget deficit and public debt. These changes can only occur when government spending is more in line with domestic revenues, and government expenditures better support economic growth. 

PROJECT OVERVIEWS 

The USAID Public Financial Management and Administration activity is a five-year project focused on strengthening public financial management in Jordan. This effort further develops 15 years of USAID support through three previous projects. The activity seeks to strengthen the governance, accountability, and transparency of Jordan’s public finances and improve fiscal policy formulation and execution. This builds on the goals of previous USAID-funded projects to improve revenue performance through effective tax policy and administration, enhance budget efficiency and transparency, increase fiscal sustainability through structural reforms, and develop human and institutional accountability to sustain fiscal reforms.  

The activity assists the Ministry of Finance to improve performance and efficiency of the revenue system and enhance the budget management process. The activity will build the capacity of the Ministry of Finance and other government institutions to modernize revenue collection systems and encourage compliance by easing taxpayers’ ability to comply with tax obligations, improve budget planning, preparation, and execution, and improve public procurement and inventory management. 

ACHIEVEMENTS 

  • Supports ongoing efforts to increase the efficiency and quality of the Ministry of Finance and other government agencies’ forecasting methodologies to enable them to meet challenges during periods of economic uncertainty. 
  • Working to strengthen the government’s newly created Macro-Fiscal Unit, which plays a central role in designing and guiding macro-fiscal policy and providing fiscal and economic forecasts. The activity will provide the unit with a revenue forecasting model and train the unit’s staff to deliver improved quantitative analysis, tax policy analysis, and revenue forecasting. The activity supported the process of establishing the unit and will continue to bolster Ministry of Finance-led commitments under the International Monetary Fund’s Extended Fund Facility agreement and the implementation of the Five-Year Reform Matrix. 
  • Works through local systems with the Ministry of Finance, Ministry of Health, Ministry of Education, Income and Sales Tax Department, the Government Budget Department, and the Government Procurement Department. These collaborations have culminated in the establishment of a shared vision for the types of activities and interventions needed to achieve the Government’s objectives. 
  • Developed detailed assessments, strategies, conceptual models, implementation roadmaps, and counterpart capacity building to facilitate reform sustainability.  

Last updated: June 15, 2022

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