Guinea-Bissau is Using Blockchain to Boost Fiscal Transparency

IMF News, October 2, 2024

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Launched in May 2024 as part of Guinea-Bissau’s program with the IMF under the Extended Credit Facility (ECF).
Developed after four years of collaboration with the Fund and technological advisor Ernst & Young, with financial support from selected partners.
Uses blockchain as a virtual ledger that securely stores and exchanges information in a tamper-evident register; each transaction is recorded in near real-time.
Identifies discrepancies, raises alerts when there is inconsistent salary information, and reduces the burden of audit reporting and reconciliation.
Provides reliable, timely, and high-quality data suitable for training Artificial Intelligence (AI) models; not currently integrated with AI models but contains the necessary data to train predictive AI models (for example, to forecast wrongful or misdirected payments).
One of the first platforms in sub-Saharan Africa to apply blockchain technology to government operations, particularly salaries and pensions management.

When project design started in 2020, the total wage bill was equivalent to 84 percent of tax revenues.
That ratio has declined to 50 percent.
The West Africa Economic and Monetary Union (WAEMU) regional fiscal convergence criteria specify wages not exceeding 35 percent of tax revenues.
The blockchain solution aligns with country policy priorities of improving fiscal transparency and governance under the IMF-supported program.
Expected governance benefits:
- Increase accountability and reduce perception of public corruption.
- Build trust in fiscal institutions.
- Improve and automate salary management to make government operations more efficient.
- Raise alerts for potential fraud by identifying inconsistencies in salary information.

The blockchain team has begun scaling the project to include other ministries and agencies.
By November 2024, the digital platform could potentially track information for all 26,600 public officials and 8,100 pensioners.
Main future goals:
- Improve transparency of wage bill management.
- Ensure public officials are hired only if eligible under Guinea-Bissau’s regulatory framework.
- Ensure wage bill payments are properly budgeted and approved.
- Track payments to public officials.

Project is implemented under IMF program support (ECF) with ongoing support from the Fund and partners.
Described as a significant leap toward better governance, transparency in government finances, and improved public service delivery.
Framed as a testament to collaboration, resilience, and vision for sustainable economic development in the region.

Source: IMF News article "Guinea-Bissau is Using Blockchain to Boost Fiscal Transparency", October 2, 2024.