The World Bank today announced the approval of $500 million in financing for Bangladesh. This funding aims to bolster public trust in institutions through increased accountability and transparency, and to enhance corporate governance and stability within the financial sector.
The financing, extended under the Strengthening Governance and Institutional Resilience Development Policy Credit, is designed to support crucial public and financial sector reforms. These reforms are deemed vital for sustained economic growth and are expected to lay the groundwork for improved services benefiting vulnerable households.
“Improvements in how public finances are managed are important for Bangladesh’s economy to grow sustainably. The government is taking ambitious steps to make its institutions more open and answerable, so they can serve the people better,” said Gayle Martin, World Bank Interim Country Director for Bangladesh. Martin added that this financing will support the government’s efforts to strengthen its policies and regulatory framework, fostering a stronger, more inclusive economy. She also noted that a separate project approved last week is already supporting the implementation of these reforms.
Bangladesh currently faces one of the lowest revenue-to-GDP ratios among middle-income countries, which significantly limits the government’s capacity to deliver quality public services. This program directly addresses this challenge by supporting reforms focused on improving domestic revenue mobilization. These reforms aim to make tax administration and policy-making more transparent and efficient, aligning them with international best practices.
Furthermore, the program will facilitate a shift towards a more strategic, systematic, and transparent approach to managing tax exemptions. This will notably require parliamentary approval for all exemptions, a significant departure from current ad hoc practices.
The financing will also strengthen corporate governance and risk management frameworks by bringing financial reporting in line with international standards and increasing transparency. It will contribute to improved financial sector stability by granting the Bangladesh Bank a complete range of resolution powers to effectively address vulnerabilities within the banking sector.
A third major component of the reforms targets enhanced transparency, accountability, and efficiency across the broader public sector. By 2027, all government project appraisal documents will be mandated for public disclosure. The public procurement system will be required to utilize electronic government procurement (e-GP), disclose beneficial ownership, and eliminate price caps to foster competition and mitigate corruption risks. To further improve financial accountability and transparency, the auditing capacity of the Office of the Comptroller and Auditor General will be strengthened.
The independence of the Bangladesh Bureau of Statistics is also set to improve, leading to greater data transparency and, consequently, better service delivery for citizens. Finally, cash transfer programs for the poor and vulnerable will be made more effective through the operationalization of a dynamic social registry.
Dhruv Sharma, World Bank Senior Economist and Task Team Leader for the project, emphasized the alignment of this financing with citizen aspirations. “This Financing is closely aligned with the citizen’s desire for transparency and accountability and will support Bangladesh’s ambitious reform agenda for improving domestic revenue mobilization, financial sector stability and governance, and public sector performance,” Sharma stated. He added, “Improving data systems and moving towards improved selection of beneficiaries will ensure that government resources effectively reach poor and vulnerable households, especially during economic shocks and natural disasters.”
With this new financing, the World Bank’s total new commitments to Bangladesh in Fiscal Year 2025 (FY25) now stand at $3.07 billion. The World Bank has been a long-standing development partner for Bangladesh, committing over $46 billion in grants, interest-free, and concessional credits to the country since its independence.
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