Bangladesh’s governance and macrofiscal framework faces wide-ranging structural weaknesses across revenue mobilisation, debt management, public financial management, state-owned enterprises (SOEs), oversight systems and civil society engagement, according to a new assessment by the Asian Development Bank (ADB).
The report, “Bangladesh at a Crossroads of Reforms: Results of the 2025 Governance and Macrofiscal Pillars Assessment”, assesses governance risks across policy, legal and institutional frameworks as of December 2024 and maps reform priorities for the upcoming country partnership strategy.
It situates the findings within a period of political transition, including the 2024 student-led protests, formation of an interim government, suspension of the 8th Five-Year Plan and return to elected government in February 2026 following the 13th parliamentary elections and a national referendum approving constitutional, electoral and institutional reforms.
The assessment highlights persistent fiscal pressures, including low revenue yields, widening external imbalances and constrained policy space ahead of Bangladesh’s graduation from least developed country status in 2026.
On domestic resource mobilisation, it cites consolidation of tax policy and administration within a single agency, weak administrative systems, a complex multi-rate tax structure and limited international tax cooperation frameworks.
In debt management, it notes the Medium-Term Debt Management Strategy but flags concerns over data accuracy, transparency and reporting reliability, calling for stronger systems and alignment with international standards.
On public financial and expenditure management, the report cites progress in iBAS++ integration with the treasury single account and movement toward International Public Sector Accounting Standards (IPSAS) Cash Basis adoption, alongside improved annual reporting timelines.
However, it highlights weak links between national planning and agency-level budgeting, budget-expenditure gaps, procurement delays and persistent underspending, indicating weak public investment management.
It also notes end-year expenditure bunching and mid-year project additions as signs of weak fiscal discipline and allocative inefficiency.
While acknowledging the treasury single account framework, it says full cash consolidation is constrained by numerous accounts outside its coverage, including those of SOEs. It adds that iBAS++ does not track arrears and excludes self-accounting entities, extra-budgetary operations and subnational governments.
It further notes that although IPSAS Cash Basis adoption is positive, implementation capacity remains limited, while internal audit functions are largely absent across most agencies, weakening internal controls and procurement oversight.
On procurement, the assessment recognises a strong legal framework and institutional oversight led by the Bangladesh Public Procurement Authority, alongside an electronic government procurement system that improves transparency and efficiency.
SOEs are identified as a major fiscal risk, with total assets of $61.4 billion in FY2022. The report says SOE performance declined between 2018 and 2022, while liabilities and government guarantees increased, and return on equity and assets fell by 88 per cent and 78 per cent respectively, with further declines projected for 2023–2024.
It cites weak monitoring systems, absence of an ownership policy and legal framework, and poor planning and budgeting as key constraints increasing fiscal risk exposure.
In oversight and accountability, it notes that although the Office of the Comptroller and Auditor General conducts regular audits, capacity constraints, restricted digital access and institutional resistance limit effectiveness.
It adds that anti-corruption laws exist but enforcement remains weak and subject to political influence, while the Anti-Corruption Commission has recorded increased convictions but continues to face concerns over independence and objectivity.
On civil society engagement, it highlights complex registration procedures, limited access to government data and restricted collaboration on governance, human rights and anti-corruption issues, reflecting constrained civic space despite cautious optimism after regime change.
The report concludes that these challenges require a holistic reform pathway to strengthen country systems and institutions.
It outlines key reform priorities: restructuring the National Board of Revenue, accelerating tax digitalisation, strengthening compliance and audit functions, and improving data integration under revenue administration reforms.
For debt management, it recommends institutionalising the Medium-Term Debt Management Strategy, establishing a dedicated public debt management office with front-, middle- and back-office functions, integrating debt databases and improving disclosure of debt and contingent liabilities.
In planning and budgeting, it calls for operationalisation of a medium-term fiscal framework, improved revenue forecasting, stronger planning-budget links, integrated capital and recurrent budgeting and centralised arrears monitoring.
For internal control and audit, it recommends institutionalising internal audit units, risk-based audit systems and professionalisation of audit staff.
On public investment management and procurement, it calls for stronger alignment between planning, budgeting and procurement, improved multi-year project planning, better appraisal and costing, procurement reforms and wider expansion of e-government procurement.
On SOEs, it recommends a clear ownership policy, stronger monitoring mechanisms, mandatory financial disclosures and improved performance evaluation systems.
For oversight and accountability, it calls for stronger independence of oversight bodies, improved fiscal reporting, expanded audit coverage and faster publication of audit findings.
On civil society engagement, it recommends improved access to fiscal data, simplified NGO registration and structured engagement mechanisms between government and civil society organisations.
