Promoting Good Financial Governance

Context

Since 2005, the German Federal Government has been supporting reforms to promote good governance in the South Caucasus – including with regard to public finances. These efforts are taking place within the framework of the following strategic documents:

• An Association Agreement with the European Union, which fosters close economic cooperation
• The Decentralisation Strategy 2020–2025, which is seeking to expand decentralised governance in Georgia
• The reform strategy that has been devised for the country's public financial management
• National and local action plans for implementing the United Nations’ 2030 Agenda for Sustainable Development

While Georgia has improved its ability to administer its public finances, it still faces a number of challenges. For example, the country’s municipalities are not yet adequately planning and implementing their budgets in a results-oriented and gender-sensitive manner, involving their citizens in the process. In addition, municipal budgets are not adequately linked to the Sustainable Development Goals (SDGs) of the 2030 Agenda.

Objective

The eight pilot municipalities – Rustavi, Telavi, Keda, Akhaltsikhe, Khashuri, Kharagauli, Dusheti and Ozurgeti – plan and implement their financial budgets in a more results-oriented, gender-sensitive and democratic manner.

Approach

The project supports Georgia in optimising the legal and institutional framework conditions for good financial governance. In addition, it supports the country in improving public financial management in cities and municipalities and in enhancing competencies of public entities.

At the municipal level, the project is promoting a culture of decision-making that is more results-oriented, participatory, gender-sensitive and democratic. Moreover, the project supports municipalities in gearing their budgets towards the SDGs, and hence, in implementing the latter.  Experiences and good practices from the pilot municipalities are shared with Georgia's central government through regular meetings, consultations and studies so that good practices can be scaled up. This in turn is promoting the process of financial decentralisation, as part of the current decentralisation reform, and .additionally the localisation of the 2030 Agenda.

Last update: December 2023