- Guinea-Bissau has implemented blockchain technology to improve fiscal transparency, focusing on its public wage bill
- The platform tracks salary and pension disbursements in real-time, enhancing data accuracy and reducing audit burdens
- This initiative is part of a broader collaboration with the IMF under the Extended Credit Facility program
Guinea-Bissau has taken a significant step toward modernizing its financial management by launching a blockchain platform aimed at improving the management of public sector wages. This initiative, launched in May 2024, allows for real-time tracking of salary disbursements and provides secure, transparent oversight of public finances. The new platform is designed to reduce errors, identify discrepancies in salary data, and minimize corruption, aligning with the country’s ongoing efforts to improve governance with the support of the International Monetary Fund (IMF).
Wage and Pension Data on Blockchain
Guinea-Bissau’s blockchain initiative represents a major leap forward for the West African nation, which has been grappling with fiscal instability. By securely storing wage and pension data, the system helps ensure payments are accurate and transparent. As the IMF reported, this technology is expected to increase fiscal discipline, reduce fraud, and improve trust in the government’s financial management.
According to Concha Verdugo Yepes, the lead economist on the project, the platform is already reaping dividends:
The platform offers a secure, transparent digital ledger for managing the public service’s wage bill data, enabling almost real-time monitoring of salary and pensions eligibility, budgeting, payment approvals, and salary and pensions disbursements. It significantly improves data integrity and supports the production of timely and accurate fiscal reports for use by policymakers and the public.
IMF Seeks Expansion
This technological advancement is a product of four years of collaboration between Guinea-Bissau and key international partners like Ernst & Young. The project, initially covering about 26,600 public servants, is expected to scale up to cover other sectors and agencies in the country by late 2024.
IMF officials have hailed the program as a model for other African countries looking to leverage blockchain to improve governance and fiscal accountability. By reducing the public wage bill to 50% of tax revenues from a high of 84%, Guinea-Bissau’s use of blockchain has made a tangible impact on its economic stability.
African countries are already using blockchain bonds to raise funds when traditional financial options are unavailable, showcasing the technology’s benefit to developing countries.
