Supporting public financial management reform with French public expertise

Since 2005, the Royal Government of Cambodia (RGC) has been engaged in a wide-ranging programme to reform its public financial management. Having set the goal of moving from input-based budgeting to results-based budgeting, it identified the overhaul of the legislative and regulatory framework as a priority, and in particular the design of a new framework law on the budget and accounting system. Given France’s experience in this area, notably through the adoption of its Organic Law on Finance Laws (LOLF), Cambodia’s MEF began discussions with the French side in 2019 in order to benefit from French expertise and lessons learned in setting up this new legislative framework.

AFD and the French Treasury (Direction générale du Trésor) were asked to finance three successive phases of technical assistance through the FEXTE instrument (2019–2021, 2023–2025, 2026–2028). This technical assistance, supervised by AFD and implemented by Expertise France, has involved the deployment of technical experts from the French Directorate General of Public Finances (DGFiP) within Cambodia’s MEF, as well as short-term expertise from other relevant administrations such as the Budget Directorate (DB) and the General Inspectorate of Finance (IGF).

• Support for finalising the drafting and implementation of the sub-decrees, ministerial regulations (prakas) and circulars needed to apply the law;
• Support for putting the budget and accounting reform into operation (procedures manual, budget preparation and programming) and for setting up a performance-based system (expenditure reviews, development of performance indicators);
• Experience sharing on integrating climate objectives into public financial management, followed by support for formulating a strategy to introduce green budgeting mechanisms.

Further operationalisation of the law (phase 3):

• Support for updating the regulations implementing the law;
• Deepening of the reform towards programme-based and performance-based budgeting, including the development of principles and tools for multi-year public investment planning, green budgeting, gender-responsive budgeting, and monitoring and evaluation;
• Technical assistance for the application and implementation of the law within subnational administrations.

• A new legal and regulatory framework for public financial management based on the Law on the Public Finance System, a law on finance laws inspired by the French LOLF (the Cambodian law was promulgated on 10 March 2023);
• A more efficient, transparent and accountable budget and accounting system, based on programming and performance, and integrating climate and social considerations;
• Overall strengthening of the capacity of Cambodia’s MEF to plan, execute, monitor and evaluate the national budget.