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 Exchange rate |    17 December, 2017

 

News

 
   
Ministy of Finance Enhence its Capacity By using SWIFT and in Coordination with CBY
The Ministry of Finance recently approved an electronic disbursement system that will be dedicated to disburse funds from loans and grants allocated by international donors. The new system, fully developed by a Yemeni team, is called Loans and Grants Management Information System (LGMIS).

Yemen suffers the lack of capacity to absorb donors’ fund allocated for development projects in London donor conference in 2006 and other commitments in the following years. Donors always complain about this issue and the USAID’s Enhancing Government Effectiveness (EGE) Project in Yemen, carries the solution represented by LGMIS, which is introduced by Management Systems International (MSI), a Washington-based consultancy firm.

Minister of Finance, Noman Taher al-Sohaibi issued a decree approving the new electronic system and inviting all stakeholders in the payment process of the pilot phase of the EGE project to suspend all manual transactions.

The electronic disbursement system links the externally funded Project Implementation Units (PIUs) in three pilot sectors: Education, Agriculture and Health; the Ministry of Planning and International Cooperation (MOPIC), Ministry of Finance. Between the M.o.F. and Central Bank of Yemen, the ministry introduced SWIFT, an internationally secure financial transaction system.

The Ministry of Finance SWIFT code is to be established as an integral part of the electronic disbursement system which links the Ministry of Finance and the Central Bank of Yemen as a safe and effective system to transfer the funds to the beneficiaries through the CBY. The CBY governor positively reacted last week and publicized the MoF SWIFT code to all commercial banks.

“Yemen Ministry of Finance is the third public sector institution in the MENA region to take steps towards electronic transfer. This is a quantum leap forward that adds to the ongoing reforms within the MOF and will facilitate towards increased transparency and accountability,” said Hani Enan, DG of External Grants at the Ministry of Finance and the government counterpart for the EGE project.

The lead time of manual transactions or the lifecycle of a withdrawal requests was averaged at 35 days, but now with LGMIS it will be reduced to 5-8 days, which will enhance the absorptive capacity, and maximize the impact of the development projects on ground and ultimately achieving stakeholders statisfaction.

The electronic disbursement system is to be operated according to the following procedures:

- The PIU define levels of document flow of the withdrawal request stating names, positions and authorities and submit the same to the Ministry of Finance in order for the latter to be able to process the requests in a manner that avoids duplication, errors and misuse of the system.

- The PIU create, through its professional and authorized staff, a database for contracts and contractors and attach the necessary documents in an electronic PDF format into the LGMIS.

- The PIU staff initiate the withdrawal request and shall keep the original documents related to the request into the LGMIS for auditing purpose.

- Withdrawal request along with the supporting documents is sent electronically to the concerned institution included in the system according depending on the type of the withdrawal request and document flow.

The ministry is scheduled to officially launch the LGMIS system in the second half of April in a big event 

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