Sri Lanka signs $75 m social safety nets project

Sri Lanka signed a $75 million worth social safety nets project with World Bank to support the country’s welfare programmes. The project includes an integrated system to better manage the selection, administration, and payments to beneficiaries. It will help improve the equity, efficiency and transparency of the social safety net system.

The project will allow the government to develop a single registry of citizens with information on family structure and economic characteristics. The Welfare Benefits Board, set up to manage the selection and payment of beneficiaries, will develop new selection criteria based on data in the registry. This will make identification fairer and more transparent, and ensure that benefits reach the intended households. The project will also strengthen the government’s capacity to monitor and improve welfare programmes.

World Bank Country Director for Sri Lanka and the Maldives Idah Pswarayi-Riddihough, and Secretary to the Treasury, Finance Ministry R.H.S. Samarathunga signed the project on behalf of the World Bank and the government.

The project will be implemented by the Finance Ministry with the National Policies and Economic Affairs Ministry, Social Empowerment and Welfare Ministry, and the Information and Communication Technology Agency.

Today, Sri Lanka has more than 30 welfare programmes operated by 11 different ministries. A lack of digital record-keeping limits their capacity to coordinate, monitor and evaluate, and prevent fraud and mismanagement. While programmes costs have risen gradually over time, coverage of the poorest households has fallen. Analysis by the World Bank shows that the programmes have had a decreasing impact on poverty over the past decade. This poses a challenge when the population is ageing, a shift that is likely to increase demand for social assistance in coming years.

The credit is from the International Development Association (IDA) – the World Bank’s concessionary lending arm – through the IDA Scale Up Facility. It has a final maturity of 24 years, including a grace period of five years.

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