Deal signed for $245m WB fund for safety net programmes

The government of Bangladesh today signed an agreement with the World Bank under which the lending agency will provide $245 million additional financing to improve equity, efficiency and transparency of the country's major safety net programmes.

The $245 million additional financing to the Safety Net Systems for the Poorest Project will help improving beneficiary targeting, information management and benefit payment of the country's five large safety net programmes.

These are: the Employment Generation Program for the Poorest, Work for Money, Test Relief, Vulnerable Group Feeding, and Gratuitous Relief. Implemented by the Department of Disaster Management, these programmes collectively reach over nine million poor and vulnerable households.

Economic Relations Division (ERD) Secretary Kazi Shofiqul Azam and World Bank Country Director Qimiao Fan signed the agreement on behalf of the government of Bangladesh and the World Bank, respectively, at the ERD in the city's Sher-e-Bangla Nagar area.

With this additional financing, the World Bank support to the project now stands at $745 million. The credit is from the International Development Association (IDA), the World Bank's concessional lending arm. The credits are interest-free and repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent.

In FY 2017, Bangladesh spent around $3.5 billion on social protection, which was about 1.4 percent of its Gross Domestic Product. To ensure effective use of public resources, the World Bank is supporting the country to build a common digital platform for better administered safety net programs.

There are three components of the project. The Component-1 [support to the Ministry of Disaster Management and Relief (MoDMR) safety net program] and Component-2 (strengthening of MoDMR program administration) will be implemented by the Ministry of Disaster Management and Relief and Component-3 (development of the national household database) will be implemented by the Statistics and Informatics Division.

ERD Secretary Kazi Shofiqul Azam said the government of Bangladesh is committed to strengthen its safety net management and oversight capabilities by developing an integrated social protection service delivery system, in line with recommendations of the National Social Security Strategy 2015,"

"The additional financing is a critical milestone in this process." he noted.

World Bank Country Director Qimiao Fan said, "An integrated social protection service delivery system will help ensuring equity, build resilience and create opportunities for the poorest population. At the same time, it will reduce administrative efforts, costs and errors,"

"Efficient and transparent delivery of social assistance to the right households at the right time will help Bangladesh reduce poverty and boost shared prosperity" he added.

Currently, only the Employment Generation Program for the Poorest is administered with a management information system. The programme also pilots digital payment of benefits to the target beneficiaries. The financing will help digitisation of the other safety net programs as well as scale up digital payments using various technologies.

The financing will also help the Bangladesh Bureau of Statistics (BBS) to complete the country's first universal poverty registry - the National Household Database. The database will be integrated with information systems of various ministries and agencies to use for beneficiary selection purposes.

For this, BBS has already completed data collection in Barisal, Rangpur and part of Mymensingh divisions. This month, BBS will start data collection in Dhaka and Chittagong divisions.