Economic Governance Reform Grant - DPG 2

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This program document the second of a programmatic series of two Economic Governance Reform Grants (EGRGs) for the Republic of Guinea-Bissau. The operation supports the continuation of the selective reform agenda initiated by the Government in 2009 with the support of the EGRG I. The reform momentum under both the Public Financial Management (PFM) and the Private Sector Development (PSD) planks has been sustained. The PFM plank aims at consolidating the setting up of a modern legal framework for public financial management that is consistent with the West African Economic and Monetary Union (WAEMU) standards, and promoting compliance with this legal framework through systems, controls and operational reforms. The PSD plank aims at consolidating the setting up of a modern legal framework for private investment and improving the administrative environment for business. Both PFM and PSD reforms are needed jointly to restore confidence in public policy and institutions and support macroeconomic stability. The design of the reform program builds on analytical work in these two areas and leverages activities supported by other International Development Association (IDA)-funded instruments, including Low Income Countries Under Stress (LICUS) and State and Peace-building Fund (SPF) grant funded operations and the IDA Private Sector Rehabilitation and Development Project (PSRDP). The operation also complements support provided by the African Development Bank (AfDB), Portugal, the European Union (EU), the International Monetary Fund (IMF), and other donors in related critical areas.