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Overview of MDTF
Public Financial Management (PFM) is a key element of Nepal’s Government’s strategy for strengthening governance, optimizing outputs from public resources and ensuring inclusive and broad-based development form central part of the PFM process. The PFM Agenda has also been the top priority for the development partners to promote efficient and effective public service delivery. As part of this effort, the Multi Donor Trust Fund (MDTF) was established in December 2010. The MDTF is administered by the World Bank and jointly funded by following donors: UK Department for International Development (DFID), The Governments of Norway, Australian Embassy, USAID (United States Agency for International Development), European Union and Government of the Swiss Confederation.
The program development objective of the MDTF is "to strengthen the performance, transparency and accountability in public financial management in Nepal.”
The MDTF supports activities that will: (a) strengthen the PFM systems and processes (the supply side); (b) strengthen institutions of accountability and civil society to enhance their oversight of PFM processes and performance (the demand side); and (c) deepen knowledge about current PFM practices and options for improvements.
The key results expected from the projects to be funded through the MDTF are:
- Improved resource management as a result of strengthened PFM systems and processes
- Increased awareness and oversight of government PFM processes by diverse constituencies
- Better knowledge of value for money challenges and PFM governance gaps, contributing to improved design of PFM interventions at the country and sector level
The Development Partners’ involvement in PFM
The World Bank as well as other development partners committed to increased use of country systems and strengthening PFM, in various international forums such as, Paris Declaration on Aid Effectiveness (2005), Accra Agenda for Action (2008), Busan Declaration (2011). The establishment of MDTF has been an important step in harmonizing donor support for the government’s PFM reform program, including demand-led initiatives and oversight of use of public resources.
Strengthening institutions of governance is a key priority of the World Bank‘s engagement in Nepal. The World Bank is managing the donor fund for PFM agenda because of its leverage on the ground and its experience in designing and supporting implementation of Public Expenditure and Financial Accountability (PEFA) reforms, working with key institutions of accountability, such as Parliamentary Committees and engaging Civil Society Organizations (CSOs) to strengthen oversight by citizens.
The Bank is not alone in its interest and support for strengthening financial management, public expenditure, and accountability systems. A number of donors are working in this field with a common objective of improving country capacity, improving PFM performance as measured by PEFA indicators with an aim to achieve results on the ground through effective use of resources.
