Vietnam makes significant progress in public financial management: PEFA report

Vietnam gains high scores in Public Expenditure and Financial Accountability (PEFA) compared to other countries in the region, according to the latest PEFA report.

The report was released by the Ministry of Finance and the World Bank in Hanoi on June 24.

The PEFA program provides a framework for assessing and reporting on the strengths and weaknesses of public financial management (PFM) using quantitative indicators to measure performance. It identifies 94 characteristics (dimensions) across 31 key components of public financial management (indicators) in seven broad areas of activity (pillars).

Among the 31 indicators, Vietnam scores four As, eight B and B + , eight C , and 11 D and D +.

Compared to other countries in the region participating in the assessment in accordance with the PEFA 2016 Framework, Vietnam gains a high number of A and B , for 11 out of the 31 indicators, following Mongolia, Indonesia, and the Philippines, and ahead of Myanmar, Cambodia, Timor-Leste, and Laos.

This report was conducted in February 2021, and completed and reported to the Vietnamese Prime Minister in January 2024, based on the PEFA 2016 Framework.

Addressing the launching ceremony, Deputy Minister of Finance Bui Van Khang said the results demonstrate Vietnam’s efforts in public financial management over the past decade and the country has made good and relatively comprehensive progress.

Ms. Alma Kanani, Practice Manager in the East Asia and Pacific Region of the World Bank, said that the report shows that significant progress has been made in PFM institutions and systems that help the Vietnamese Government achieve sound fiscal discipline and its budget implementation be strictly controlled with most expenditures committed and verified before payment.

In addition, the internal control system on salaries and non-salary expenditures is also very strong, helping Vietnam reduce outstanding spending debt and carefully manage public debt with a very low debt-to-GDP ratio.

Vietnam conducted its first national PEFA assessment in 2011 and announced the report in July 2013.