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Strengthening the Capacity of the Ministry of Finance of Azerbaijan in the area of Public Financial Management

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Countries
Azerbaijan

Categories
Good Governance and Public Administration, Public Financial Management, Training Programmes

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The project was anchored in the EU-Azerbaijan Partnership Priorities of 2018. Cooperation of the EU with Azerbaijan aims at supporting the country's reform agenda in several domains which include good governance, with focus on Public Financial Management (PFM) and more particularly on improving efficiency of public expenditures and revenue collection. The Project was aligned to this goal with its global objective “to contribute to the implementation of measures included in the action plan for the improvement of PFM in Azerbaijan through actions aiming at improvements in public expenditures and revenue management”.

 

It had two specific objectives:

  • To strengthen the capacity of the Ministry of Finance (MoF) to steer, coordinate and implement the Medium-Term Expenditure Framework (MTEF) reform
  • To reinforce the capacities of the MoF in the area of tax policy and revenue forecasting.

 

The Project aimed to achieve six results:

1. The strengthening of the capacity of the MoF to coordinate and implement the MTEF reforms

2. The strengthening of the capacity of the MoF to develop macro-fiscal framework

3. The strengthening of the capacity of the MoF to conduct forecasting and monitoring of the budget implementation and KPIs, as well as sensitivity analysis

4. The MoF, the Ministry of Ecology and Natural Resources (MENR) and the Ministry of Agriculture (MoA) were supported to pilot MTEF in two sectors, Environmental Protection and Agriculture

5. The MoF was supported to forecast state budget revenues using econometric models

6. The MoF was supported in the preparation of a methodology for assessing the effectiveness of concessions and exemptions granted in the field of taxation and customs.

 

Component 1 of the project aimed at reinforcing the capacities of the MoF on MTEF. In line with beneficiaries’ preferences, focus was set on presenting best practice of EU member states: 

  • A benchmark analysis of design features and implementation of the MTEF process
  • Development of the macro-fiscal framework
  • General features, objectives and process of MTEF with special focus on the two pilot ministries
  • Strategic planning, programme budgeting, performance monitoring and gender-based budgeting
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