Guinea-Bissau has launched a blockchain platform to enhance fiscal transparency and improve the management of its public wage bill. The platform allows for real-time tracking of salary expenditures and aims to reduce corruption and increase accountability in government finances. This initiative, launched in May 2024 with IMF support, marks a significant step towards better governance in the country.
Guinea-Bissau has undertaken a significant step towards enhancing fiscal governance by implementing a blockchain technology platform aimed at improving the management of its public wage bill. In collaboration with the International Monetary Fund (IMF) and technological advisor Ernst & Young, the country launched this innovative platform in May 2024 as part of its Extended Credit Facility Program. This new system is designed to provide a secure and transparent mechanism for monitoring civil servant payroll expenditures, thereby ensuring better fiscal accountability. The blockchain platform enables nearly real-time oversight of salary and pension eligibility, budgeting processes, payment approvals, and actual disbursements. By storing transaction data on a tamper-evident digital ledger, the system significantly enhances data integrity and facilitates the generation of timely fiscal reports for both policymakers and the general populace. As one of the first blockchain initiatives in sub-Saharan Africa aimed at government operations, it marks a milestone in addressing governance challenges within the nation. According to Jose Gijon, the IMF mission chief for Guinea-Bissau, this technological advancement is essential for stabilizing the country’s fiscal and economic landscape, especially given that the wage bill previously consumed a staggering 84 percent of tax revenues. The integration of blockchain has already improved this figure to 50 percent, although it remains higher than the regional standards of the West Africa Economic and Monetary Union (WAEMU). The platform is instrumental not only in automating salary management but also in increasing transparency, thereby reducing the perception of public corruption. Furthermore, it has the potential to alert officials to inconsistencies in salary distribution—an important feature that could help to deter fraudulent activities. In anticipation of future developments, Concha Verdugo Yepes, the blockchain project lead, revealed that the initiative is set to be expanded to include additional ministries and agencies within Guinea-Bissau, ultimately aiming to track the payroll information of all public officials and pensioners by November 2024. This expansion signifies the ongoing commitment by the IMF and its partners to foster governance improvements and promote sustainable economic growth in the region. Guinea-Bissau’s journey exemplifies the transformative potential of technology in governance, underpinned by collaboration, resilience, and an aspirational vision for public service reform.
The background of Guinea-Bissau’s initiative is rooted in its effort to enhance public sector efficiency and accountability through innovative technology. The government identified serious challenges in managing its wage bill, which had reached an unsustainable level in relation to tax revenues. As part of a larger strategy supported by the IMF, the introduction of blockchain technology aims to provide a robust system for monitoring and reporting on wage expenditures, thereby improving fiscal transparency and governance.
In conclusion, Guinea-Bissau’s implementation of a blockchain technology platform reflects a transformative approach to public wage management. This innovative step is expected to enhance fiscal accountability, promote economic stability, and reduce corruption perceptions, contributing to the establishment of a more effective governance structure. As the initiative expands, it will not only bolster the integrity of salary management but also serve as a model for similar efforts across the region.
Original Source: www.imf.org
