Finance reforms in full swing
Finance reforms in full swing
Cambodia’s private sector is taking on a larger role in managing public finances, and companies involved in the transition say that they are well-placed to accept the added responsibility.
The government began transferring close to 400,000 civil-servant salaries over to Acleda Bank, Wing and Canadia Bank in January in an effort to rid the public sector of cash payments. The three financial institutions have since been meeting with the dozens of ministries to get their business as well.
Mobile payment and money transfer company Wing, which is the smallest of the three firms competing for the payroll business, has been able to gain tens of thousands of accounts thanks to its rural reach, CEO Anthony Perkins said yesterday.
“We have picked up several different government departments. We are processing quite a lot,” he said.
While generally welcomed, the move from cash to electronic payments has drawn scepticism. The opposition Cambodia National Rescue Party’s chief whip, Son Chhay, said in January that the electronic system could give rise to “ghost staff” – nonexistent government workers receiving salary payments.
Perkins said yesterday that face-to-face account openings ensured that double counting was avoided.
“We have had no concerns on obtaining their IDs and ensuring that they are the legitimate person for the payroll,” he said.
At Cambodia’s largest bank, Acleda, three of the largest-employing ministries – the Ministry of Economy and Finance, the Ministry of Education and the Ministry of Health – are all now actively on the electronic payroll, president and CEO In Channy said yesterday.
Two more ministries are near completion and the Acleda CEO expressed hope that the remaining would be added by year-end. The bank has recorded nearly 147,000 civil service accounts since the process began, Channy said.
“Other ministries are yet to complete their account opening for all their officials.”
Acleda’s role in government finances does not end with payroll. The Post reported earlier this month that the bank was taking charge of tax revenue collection.
Channy said yesterday that government revenues and expenditures were also now handled by the his bank.
This means that government payments made to suppliers on projects countrywide are now tracked through Acleda’s systems, he said.
“It is a big responsibility but we have the systems in place, we have the largest network and coverage across the whole country,” Channy said, referring to the financial responsibilities outsourced to the private sector.
Channy declined to put a figure on government revenues and expenditure expectations this year, but said transparency in the banking system was part of the public reforms.
World Bank senior public sector management specialist Leah April, who is helping support the public financial management reforms, said that up to 80 per cent of government employees are now paid through the banking system. This government is aiming for all its employees to be paid into an account by the end of 2014.
“The benefits of using of the banking system are likely to be substantial as it facilitates timely payments to creditors and government staff as well as receipt of revenues,” she said in an email last week.
The Ministry of Economy and Finance declined to comment on the progress of the reforms yesterday.
phnompenh post
