Proejct Case Study
Implementing a cash management support programme in Yemen
Working with stakeholders across 9 ministries to help predict future cash flows
Yemen is one of the poorest countries in the Middle East and North Africa region, with high rates of unemployment, estimated at around 35%, and frequent recurrences of violent civil unrest. Its financial position is highly volatile, leading to uncertainty over revenue flows and expenditure commitments. In such circumstances, governments need to have a high level of control over their cash position to avoid high borrowing costs or, worse, an inability to fulfil their financial obligations. The former can exacerbate their economic outlook while the latter can lead to a political crisis.
Furthermore, without an effective cash management system to consolidate all cash holdings within a Treasury Single Account, it is difficult for the IMF and other international partners to support the country, particularly when it comes to public financial management reforms. We helped with a computerised cash forecast system.
In 2010, the World Bank supported the design of a Cash Management System that was piloted across nine ministries, with the aim of eventually rolling this scheme out across all 27. We are providing the World Bank with an adviser to assist this progress, by creating a computerised cash forecast system to help predict future cash flows. The system will initially be used in the nine pilot ministries, but again with the aim of eventually rolling it out across the entire government.
This involves reviewing and evaluating the cash management system and working directly with the Ministry of Finance, providing technical assistance on how to reform the current system, including the closure of unnecessary agency accounts, the supervision and guiding of data management and review of existing laws, regulations and functional structures.
We are also carrying out an inclusive stakeholder analysis and developing a comprehensive work plan. Information-sharing and awareness-raising is another important part of our activities, which ultimately aim, by stabilising government cash flows, to allow the government of Yemen to help its own people, many of whom are living below the poverty line.