Bissau: A capacity development mission led by Concha Verdugo -Yepes, Senior Economist in the IMF African Department and project manager, is visiting Bissau from May 27 to May 31, to participate in the official launch of the "blockchain solution to strengthen the transparency of the wage bill management at the Ministries of Finance and Public Administration" on May 29.
At the end of the launch event, organized in collaboration with the Court of Auditors and presided by Prime Minister Rui Duarte de Barros, and Minister of Finance Ilídio Vieira Té, Ms. Verdugo-Yepes highlighted the importance of this remarkable achievement by a fragile state:
"Guinea-Bissau stands up as one of the first countries in sub-Saharan Africa to use blockchain digital technology to enhance government operations in wage bill management, strengthen fiscal transparency, and tackle governance vulnerabilities. This innovation could help build trust in fiscal institutions, increase accountability and reduce any perception of public corruption.
"The blockchain solution detects discrepancies and raises red flags when salaries' information is inconsistent. It reduces audit reporting and reconciliation burden; and provides reliable, timely and high-quality data to Artificial Intelligence models.
"This solution could help address a macro critical problem and supports the successful implementation of the IMF supported program. When we started the project in 2020, the wage bill represented 84 percent of the tax revenues, the highest ratio in the region. This means that for one hundred dollars collected in taxes, eighty-four dollars were spent on salaries. There was little room left for health, education, infrastructure, or debt payments. This ratio has now improved to 53 percent, but it is still high compared to the convergence ratio in the region at 35 percent.
"We thank the authorities for their collaboration throughout this process, including in the design of a blockchain platform tailored to Guinea-Bissau's with our technological partner Ernst and Young, and the participation in the trainings to ensure the technology adoption. We are also grateful for the support of other key development partners such as UNDP, the African Development Bank, the Governments of France and Japan, and the donor partners of the IMF regional technical assistance center for West Africa (AFRITAC West), consisting of: Belgium, China, the European Union, France, Germany, Luxembourg, Netherlands, Norway, Switzerland, and the European Investment Bank.
"The ball is now in the court of the Guinea Bissau's authorities. But the IMF stands ready to continuously support the conclusion of the scaling up to the rest of the Ministries in the coming months, in collaboration with AFRITAC West.
Background: The solution is a digital platform that ensures there is one reliable set of wage bill data. It includes features to protect the integrity of the data, monitor in real time the eligibility of public employees, wage bill budget execution, approved salaries and pensions payments, and final disbursements of public wages and pensions by commercial banks. It also detects data inconsistencies and produces almost real time reports to inform policymakers."
