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Document of
The World Bank
Report No: ICR00002552
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IDA-47380; IDA-49900)
ON
PROGRAMMATIC CREDITS
IN THE AMOUNT OF SDR 54.9 MILLION
(US$ 85 MILLION EQUIVALENT)
TO THE
REPUBLIC OF SENEGAL
FOR THE
FOURTH POVERTY REDUCTION SUPPORT CREDIT (PRSC-IV), AND
FIFTH POVERTY REDUCTION SUPPORT CREDIT (PRSC-V)
September 30, 2012
Poverty Reduction and Economic Management 4
Country Department AFCF1
Africa Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective as of 09/15/2012)
Currency Unit = CFAF
US$ 1.00 = 500
FISCAL YEAR
(January 1 – December 31)
ABBREVIATIONS AND ACRONYMS
ACAB Framework Agreement for Budget Support (Accord Cadre relatif aux Appuis
Budgétaires )
ANSD National Agency for Statistics and Demography
APR Annual Progress Report
ARMP
ASTER
Public Procurement Regulatory Authority (Autorité de Régulation des
Marchés Publics)
Treasury Service Database (Application des Services du Trésor en Réseaux)
BCEAO Central Bank of West African States (Banque Centrale des Etats de l’Afrique
de l’Ouest)
CAS Country Assistance Strategy
CLM Committee for Reduction of Malnutrition(Comité de Lutte contre la
Malnutrition )
CPAR Country Procurement Assessment Review
CPS Country Partnership Strategy
CY Calendar Year
DCMP National Public Procurement Department (Direction Centrale des Marchés
Publics)
DPES
DPO
Economic and Social Policy Document (Document des Politiques
Economiques et Sociales)
Development Policy Operation
EC European Community
ECOWAS
FAD
FCFA
Economic Community of West African States
Fiscal Affairs Department of the IMF
Franc CFA
FERA Autonomous Road Maintenance Fund (Fonds d’Entretien Routier Autonome)
FTI Education for All Fast Track Initiative
GCC Government Contractors Certificate
GDP Gross Domestic Product
HIPC Heavily Indebted Poor Countries Initiative
ICRR
IDA
Implementation Completion and Results Report
International Development Association
IFC International Finance Corporation
IMF International Monetary Fund
MDG Millennium Development Goals
MDRI Multilateral Debt Relief Initiative
MEF Ministry of Economy and Finance
MoH Ministry of Health
MTDS Medium-Term Debt Management Strategy
MOU Memorandum of Understanding
NCB National Competitive Bidding
NSBD National Standard Bidding Documents
OHADA Organization for the Harmonization of Business Laws in Africa
PEFA Public Expenditure and Financial Accountability
PFM Public Finance Management
PRSC Poverty Reduction Support Credit
PRSP Poverty Reduction Strategy Paper
PSI IMF Policy Support Instrument
SAI Supreme Audit Institution (Cour des Comptes)
SENELEC National Power Utility of Senegal (Société Nationale d’Electricité)
SIGFIP Integrated public finance management system (Système Intégré de Gestion
des Finances Publiques)
SIGMAP Integrated public procurement management system (Système Intégré de
Gestion des Marches Publiques)
SME
TA
Small and Medium Enterprise
Technical Assistance
WAEMU West African Economic and Monetary Union
WBG
World Bank Group
Vice President : Makhtar Diop
Country Director : Vera Songwe
Sector Director : Marcelo Giugale
Sector Manager : Miria Pigato
Project Team Leaders
ICR Primary Authors
:
:
Alain D’Hoore and Mamadou Ndione
Cheikh Ahmed Diop and Philip English
ICR Team Leader : Philip English
i
REPUBLIC OF SENEGAL
FOURTH AND FIFTH POVERTY REDUCTION SUPPORT CREDITS
CONTENTS
A. Data Sheet
B. Basic Information
C. Key Dates
D. Ratings Summary
E. Sector and Theme Codes
F. Bank Staff
G. Results Framework Analysis
H. Ratings of Program Performance in ISRs
I. Restructuring
1. PROGRAM CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN .......................................................... 1
2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES ........................................................... 6
3. ASSESSMENT OF OUTCOMES ............................................................................................................. 11
4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME ......................................................................... 16
6. LESSONS LEARNED ............................................................................................................................. 17
ANNEX 1: BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES ....................... 19
ANNEX2: BENEFICIARY SURVEY RESULTS N/A ........................................................................................ 21
ANNEX 3: STAKEHOLDER WORKSHOP REPORT AND RESULTS N/A ......................................................... 21
ANNEX 4: SUMMARY OF BORROWER'S ICR AND/OR COMMENTS ON DRAFT ICR .................................. 22
ANNEX 5: COMMENTS OF CO-FINANCIERS AND OTHER PARTNERS/STAKEHOLDERS ............................. 22
ANNEX 6: LIST OF SUPPORTING DOCUMENTS ........................................................................................ 23
ii
A. Basic Information
Program 1
Country Senegal Program Name
Senegal: Fourth
Poverty Reduction
Support Credit
Program ID P117273 L/C/TF Number(s) IDA-47380
ICR Date 09/15/2012 ICR Type Core ICR
Lending Instrument DPL Borrower GOVERNMENT OF
SENEGAL
Original Total
Commitment SDR 28.40M Disbursed Amount SDR 28.40M
Implementing Agencies
Ministry of Economy and Finance
Cofinanciers and Other External Partners
N.A.
Program 2
Country Senegal Program Name
Senegal: Fifth Poverty
Reduction Support
Credit
Program ID P121178 L/C/TF Number(s) IDA-49900
ICR Date 09/15/2012 ICR Type Core ICR
Lending Instrument DPL Borrower GOVERNMENT OF
SENEGAL
Original Total
Commitment SDR 26.50M Disbursed Amount SDR 25.30M
Implementing Agencies
Ministry of Economy and Finance
Cofinanciers and Other External Partners
N.A.
B. Key Dates
Senegal: Poverty Reduction Support Credit 4 - P117273
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 01/27/2010 Effectiveness: 06/24/2010 06/24/2010
Appraisal: 04/20/2010 Restructuring(s):
iii
Approval: 06/01/2010 Mid-term Review:
Closing: 03/31/2011 03/31/2011
Senegal: Poverty Reduction Support Credit 5 – P121178
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 12/07/2010 Effectiveness: 06/29/2011 06/29/2011
Appraisal: 04/18/2011 Restructuring(s):
Approval: 05/26/2011 Mid-term Review:
Closing: 03/31/2012 03/31/2012
C. Ratings Summary
C.1 Performance Rating by ICR
Overall Program Rating
Outcomes Moderately Satisfactory
Risk to Development Outcome Substantial
Bank Performance Moderately Satisfactory
Borrower Performance Moderately Satisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Overall Program Rating
Bank Ratings Borrower Ratings
Quality at Entry Moderately Satisfactory Government: Moderately Satisfactory
Quality of Supervision: Moderately Satisfactory Implementing
Agency/Agencies: N.A.
Overall Bank
Performance Moderately Satisfactory
Overall Borrower
Performance Moderately Satisfactory
iv
C.3 Quality at Entry and Implementation Performance Indicators
Senegal: Poverty Reduction Support Credit 4 - P117273
Implementation
Performance Indicators
QAG Assessments
(if any) Rating:
Potential Problem
Program at any time
(Yes/No):
No Quality at Entry
(QEA) None
Problem Program at any
time (Yes/No): No
Quality of
Supervision (QSA) None
DO rating before
Closing/Inactive status
Senegal: Poverty Reduction Support Credit 5 – P121178
Implementation
Performance Indicators
QAG Assessments
(if any) Rating:
Potential Problem
Program at any time
(Yes/No):
No Quality at Entry
(QEA) None
Problem Program at any
time (Yes/No): No
Quality of
Supervision (QSA) None
DO rating before
Closing/Inactive status Satisfactory
D. Sector and Theme Codes
Senegal: Poverty Reduction Support Credit 4 - P117273
Original Actual
Sector Code (as % of total Bank financing)
Central government administration 50 50
General Education Sector 20 20
Health 10 10
Other social services 10 10
General industry and trade sector 10 10
Theme Code (as % of total Bank financing)
Public expenditure, financial management and
procurement 50 50
Education for all 20 20
Micro, Small and Medium Enterprise support 10 10
Vulnerability assessment and monitoring 10 10
Health system performance 10 10
v
Senegal: Poverty Reduction Support Credit 5 – P121178
Original Actual
Sector Code (as % of total Bank financing)
Central government administration 30 30
General Education Sector 20 20
Health 20 20
Other social services 15 15
Rural and Inter-Urban Roads and Highways 15 15
Theme Code (as % of total Bank financing)
Public expenditure, financial management and
procurement 30 30
Education for all 20 20
Health system performance 20 20
Infrastructure services for private sector development 15 15
Environmental policies and institutions 15 15
E. Bank Staff
Senegal: Poverty Reduction Support Credit 4 - P117273
Positions At ICR At Approval
Vice President: Makhtar Diop Obiageli Katryn Ezekwesili
Country Director: Vera Songwe Habib M. Fetini
Sector Manager: Miria Pigato Philip English (acting)
Task Team Leader: Mamadou Ndione Alain D’Hoore and Mamadou
Ndione
ICR Team Leader: Philip English
ICR Primary Author: Cheikh Ahmed Diop and Philip
English
Senegal: Poverty Reduction Support Credit 5 – P121178
Positions At ICR At Approval
Vice President: Makhtar Diop Obiageli Katryn Ezekwesili
Country Director: Vera Songwe Madani M. Tall (acting)
Sector Manager: Miria Pigato Miria Pigato
Task Team Leader: Mamadou Ndione Alain D’Hoore and Mamadou
Ndione
ICR Team Leader: Philip English
ICR Primary Author: Cheikh Ahmed Diop and Philip
English
vi
F. Results Framework Analysis
Program Development Objectives (from Program Document) The overall objective of the second series of PRSCs (PRSC IV-V) was to contribute to
strengthening the Government of Senegal’s policy making and institutional capabilities to
accelerate broad-based growth, to improve access to social services, to mitigate
vulnerabilities, and to foster good governance. Specifically, the development objectives
to which the PRSC-5 contributes are to:
(1) improve the environment for private investment;
(2) improve access to basic services and ensure greater efficiency of public expenditure
on human capital formation;
(3) mitigate social and environmental vulnerabilities; and
(4) promote better governance through public financial management, procurement, debt
management and statistical systems reforms.
Revised Program Development Objectives (as approved by original approving authority)
n.a.
(a) PDO Indicator(s)
Senegal: Poverty Reduction Support Credit IV and V – - P117273 and P121178
Indicator Baseline
Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target
Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 : Time to obtain a construction permit
Value
(quantitative or
qualitative)
220 150 210
Date achieved 12/31/2009 2011 2011
Comments
(incl. %
achievement)
There was a small reduction in the number of procedures from 16 to 13, but
the process continued to be very slow and the private sector continued to
complain about it. (14% achieved)
Indicator 2 :
Sum of budget block transfer and expected annual user charge proceeds to
FERA
Value
(quantitative or
qualitative)
CFAF 19.5 bn
CFAF 47 bn, of
which CFAF24.5
bn from user
charges
CFAF 47 bn was
budgeted of which
CFAF33.5 bn from
user charges
Date achieved 2008 09/30/2011 12/31/2011
Comments
(incl. %
achievement)
The target was 100% achieved. However, actual revenue received is probably
a better indicator than the budget. The amount received in 2011 was
CFAF39.8bn of which CFAF 23.5bn came from user fees. By this measure the
target was 74% achieved.
vii
Indicator 3 : Percentage of education teaching staff in integrated HR/Payroll system
Value
(quantitative or
qualitative)
0% 100% 100%
Date achieved 2009 2011 12/31/2011
Comments
(incl. %
achievement)
An integrated education HR/payroll system was implemented (100%
achieved), with the suppression of the Voluntary project and its integration into
the Education HR Directorate.
Indicator 4 :
Number of mutual schemes covering individuals living in rural area or doing
informal work
Value
(quantitative or
qualitative)
Not known exactly but
small 50 over baseline 199
Date achieved 2008 2012 2012
Comments
(incl. %
achievement)
The baseline data for 2009 are lacking, but the number in 2010 was 164. It
would appear that significant progress was made on this outcome, and the
target may have been achieved.
Indicator 5 : Hospital efficiency index
Value
(quantitative or
qualitative)
73% 80% 85% 74%
Date achieved 2008 2011 2011 2011
Comments
(incl. %
achievement)
The original target was revised to 85% in PRSC V, because it appeared that the
index had already improved to 83% in 2009. However, this proved short-lived
(staffing levels fell by 17.6% but inpatient cases fell by a similar amount).
Indicator 6 : Percentage of nutrition expenditure funded by the national budget
Value
(quantitative or
Qualitative)
15% 27% 35.3%
Date achieved 12/31/2008 2012 2012
Comments
(incl. %
achievement)
Target exceeded.
viii
Indicator 7 :
Publicly available information on fishing agreements, registry and evolution of
both industrial and artisanal fishing capacities
Value
(quantitative or
qualitative)
Agreements not public
Agreements
accessible to the
public
Bilateral fishing
agreements,
industrial fishing
licenses and data on
artisanal fishing
capacity are
available on a
website
Date achieved 12/31/2008 2012 2012
Comments
(incl. %
achievement)
Numerous industrial fishing licenses were signed in late 2011 without the
proper consultation or public disclosure, but the new government cancelled
them shortly after taking office.
Indicator 8 : Number of agencies among the top ten whose budget is accessible to public
Value
(quantitative or
qualitative)
0 5 5
Date achieved 12/31/2008 2012 2012
Comments
(incl. %
achievement)
Summaries of the budgets for the top 5 agencies were included as an annex to
the 2012 budget. Ideally a more complete budget would be available.
Indicator 9 : Publicly available information on budget execution
Value
(quantitative or
qualitative)
Limited to monthly
execution tables
12 monthly budget
execution tables
and 4 quarterly
budget reports.
Spatial budget data
available for 4
ministries
12 monthly budget
execution tables,
and 12 government
fiscal tables
published.
Spatial budget data
available for 4
ministries
Date achieved 12/31/2008 2012 12/31/2011
Comments
(incl. %
achievement)
100% achieved.
Indicator 10 : Publicly available information on state land property
Value
(quantitative or
qualitative)
none
Information
available on all
transactions
none
Date achieved 12/31/2008 2012 2012
Comments
(incl. %
achievement)
This topic was a very sensitive issue under the previous regime; therefore, this
indicator was too ambitious.
ix
Indicator 11 :
Delay between the adoption of the law of finance and submission of the budget
execution law to the Parliament
Value
(quantitative or
qualitative)
12 years 2 years 2 years
Date achieved 12/31/2010 2012 2012
Comments
(incl. %
achievement)
The budget execution law for 2010 was submitted to Parliament in 2012.
(100% achieved)
Indicator 12 : Percentage of procurement cases handled in a timely manner by Justice in line
with the applicable regulations
Value
(quantitative or
qualitative)
0% 75% 100%
Date achieved 12/31/2008 12/31/2011
Comments
(incl. %
achievement)
All 11 cases contested in 2011 were handled by the justice system within the 2
month time period allowed. In 8 cases, the decision of the ARMP was upheld.
Indicator 13 : DeMPA Indicator for Debt Management Strategy DPI-3
Value
(quantitative or
qualitative)
D C n.a.
Date achieved 12/31/2008 2012
Comments
(incl. %
achievement)
A new DeMPA has not been conducted so this rating cannot be updated,
though the progress made suggests that an improved rating may be justified.
Indicator 14 : Public availability of poverty statistics
Value
(quantitative or
qualitative)
Limited primary
poverty data is
available
Primary data is
publicly available
Primary data is
available on
demand but access
is not easy.
Date achieved 12/31/2008 2012 2012
Comments
(incl. %
achievement)
It remains fairly difficult to have access to primary data from ANSD. However,
the agency will be encouraged to publish the data from the latest poverty
survey once it has been properly cleaned and organized.
x
(b) Intermediate Outcome Indicator(s)
Senegal: Poverty Reduction Support Credit IV - P117273
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 : Delay between adoption of budget and submission of budget
execution law to Parliament
Value
(quantitative or
Qualitative)
12 years 8 years 4 years
Date achieved 2008 2010 2010
Comments
(incl. % achievement)
G. Ratings of Program Performance in ISRs
Senegal: Poverty Reduction Support Credit 4 - P117273
No. Date ISR
Archived DO IP
Actual
Disbursements
(USD millions)
43.00
ML-Fourth Poverty Reduction Support Credit - P117270
No. Date ISR
Archived DO IP
Actual
Disbursements
(USD millions)
1 01/03/2012 Satisfactory Satisfactory 40.00
H. Restructuring (if any)
N.A.
1
1. Program Context, Development Objectives and Design
1.1 Context at Appraisal
1. Though Senegal continued to enjoy a broadly stable political climate, the
context became more complex as the country moved towards the 2012 presidential
elections. In March 2009, local elections led to a victory of the opposition parties in the
majority of main municipalities, including Dakar and Saint Louis. The new political
balance resulting from the outcome of the local elections implied that policies and reforms
on which a broad consensus had not been forged could be significantly more difficult to
advance. The political economy of reforms was likely to become markedly more complex
as the campaign for 2012 presidential elections started prematurely in September 2009, when
President Wade announced his intention to run for a third term in 20121. In that pre-electoral
context, commitment to difficult reforms was becoming more hesitant at a time when a
new momentum for reforms was more needed than ever to tackle Senegal's challenges of
dealing with shocks, boosting growth, improving public sector governance and addressing
regional disparities. There was also a sense that some aspects of governance were
deteriorating. Senegal’s ranking on the Transparency International Corruption Perception
Index fell from 78 in 2005 to 99 in 2009.
2. On the economic front, successive external and internal shocks since 2006
slowed the growth process to a near halt. From the mid-1990’s until 2005, Senegal had
one of the best economic performances in Sub-Saharan Africa. Though there were brief
episodes of slow growth, real GDP grew on average by about 5 percent annually, over 2
percent a year on a per capita basis, contributing to a significant drop in poverty incidence
and marking the first sustained increase in average per capita incomes since independence
in 1960. However, roughly half the population remained below the poverty line in 2005.
Unfavorable rains prompted a sharp decline in agriculture output during 2006-07. The
international food and oil price shocks during 2007-08 slowed the economy down and
resulted in a significant deterioration of Senegal’s external and fiscal positions. The overall
fiscal deficit rose to 4.9 percent in 2009. The onset of the global financial crisis in 2008
and its deepening in 2009, together with domestic shocks, including floods in the Dakar
region and continued electricity shortages, further contributed to the general economic
slowdown. Real GDP growth was 3.2 percent in 2008 and only 2.2 percent in 2009,
resulting in zero growth in per capita incomes over these two years.
3. The cumulative impact of repeated shocks on a population with only limited
coping mechanisms, dampened some of the gains in poverty reduction of the early
decade. A Poverty Assessment prepared by World Bank team2 estimated that the declining
trend in poverty incidence may have reversed, with a possible increase in poverty
1 President Wade won his first term, for a seven year mandate, in 2000. A subsequent amendment to the Constitution
allows two five-year terms for the Presidency, effective from the 2007 elections, in which President Wade won his second term.
2 Senegal Poverty Assessment, Report No. 4455-SN, June 25, 2008. The report and simulations are based on the last
household survey (ESPS 2005).
2
incidence by 2½ points from 2005 to 2007. In addition, the main structural feature of
poverty in Senegal—the deepening of entrenched disparities between rural and urban
areas—remained, even though the successive shocks had disproportionately impacted the
urban population, which is overall less poor than rural populations.
4. Despite a 10-year period of strong performance, growth had remained
concentrated on the modern, largely urban, services sector and construction, fueled
by public works spending and growing remittances. The economy exhibited little
diversification, a continued dependence of economic growth on public investment, no
export drive and almost no formal job creation. Even Senegal's notable macro-fiscal
success, a doubling of public finances in real terms over the decade 2000-10 on a broadly
sustainable track, was turning out to constitute a critical challenge on the efficiency, equity
and governance fronts, confronting the authorities with the urgent need to strengthen
further their public financial management institutions and procedures.
5. Over the medium term, Senegal was expected to regain economic momentum
and return to its historical growth trajectory. The IMF approved the third and fourth
reviews of the PSI program in June and December 2009, respectively. Performance under
the PSI program was broadly satisfactory, with all quantitative assessment criteria met, and
most structural benchmarks - mainly in public financial management - met or partially met.
The authorities intended to provide a modest stimulus in 2010 to support the recovery, and
had committed to maintain a prudent stance beyond. Overall, Senegal’s macroeconomic
framework provided an adequate basis for the proposed programmatic credits, helping the
authorities to sustain their fiscal stance, and pursue structural reforms in a challenging
context.
6. PRSC IV-V supported the implementation of the final year of the
Government's Second Poverty Reduction Strategy Paper (PRSPII). The operations
were also designed to assist in the development and early implementation of the third
PRSP, referred to as the Document of Economic and Social Policies (DPES). The PRSP-II
(2006-2010) had four strategic pillars: (i) wealth creation; (ii) capacity building and the
provision of basic social services; (iii) the protection of vulnerable groups; and (iv) the
promotion of good governance and participation. The DPES (2011-2015), which was only
finalized in late 2011, was expected to exhibit policy continuity, with many of its
components reflecting a range of sector strategies already adopted or being updated by the
authorities.
7. The PRSC series has been an integral part of the Bank’s Country Assistance
Strategy (CAS) for Senegal discussed by the Board of Executive Directors on June
2007. The FY07-10 CAS for Senegal was structured around a “governance” filter and three
main pillars: (a) accelerated growth/wealth creation; (b) human development/shared
growth; and (c) rural and urban synergy. The 2009 Progress Report confirmed that, despite
mixed results, the strategic objectives remained consistent with national priorities. It also
presented adjustments to assist the Government in mitigating the impact of the fuel and
food price crisis, and the recent global economic downturn. As a result, the PRSC IV was
supplemented with additional resources from the Crisis Response Window, equivalent to
US$9.4 million.
1.2 Original Program Development Objectives (PDO) and Key Indicators
3
8. The objective of this second PRSC series was to contribute to strengthening the
Government of Senegal’s policy making and institutional capabilities to accelerate
broad-based growth, to improve access to social services, to mitigate vulnerabilities,
and to foster good governance. Specifically, the development objectives to which the
PRSCs intended to contribute were to: (1) improve the environment for private
investment; (2) improve access to basic services and ensure greater efficiency of public
expenditure on human capital formation; (3) mitigate social and environmental
vulnerabilities; and (4) promote better governance through public financial
management, procurement, debt management and statistical systems reform.
1.3 Revised PDO (as approved by original approving authority) and Key Indicators,
and Reasons/Justification
N/A
1.4 Original Policy Areas Supported by the Program
Policy Area 1: Private Sector Development
In this area the PRSC series focused on three domains of the authorities' wealth
creation PRSP-II Pillar: investment climate reforms, small business taxation, and road
maintenance. The medium-term objectives of the selected reforms were to reduce costs
of doing business, reduce tax-related costs of formalization of informal firms and
improve funding to maintain the country's road infrastructure.
9. Investment climate reforms aimed at supporting the Senegalese authorities’
efforts to improve the business environment. Despite substantial progress in trade
facilitation and business registration, the reform momentum stalled in 2008-09 while
Senegal’s investment climate continued to need significant improvement. Senegal’s Doing
Business ranking in 2009 was 149. In this respect, meetings of the Presidential Investment
Council (Conseil Présidentiel de l’Investissement, CPI) had underscored the importance of
continued investment climate reforms in the areas of issuance of building permits, judicial
contract enforcement, and investor protection. Accordingly, the Ministry of Urbanism
intended to adopt new procedures for issuance of building permits to reduce the time and
cost involved in the process. This policy action was supported through PRSC IV.
10. The small business taxation reform aimed at reducing the cost of formalization
for the informal sector. First generation reforms, aiming at strengthening revenue
mobilization and modernizing the tax administration of the largest taxpayers, had been
largely successful in Senegal. The Government intended to implement second-generation
reforms geared to creating incentives—or removing marginal disincentives—for
businesses operating in the informal sector to graduate into the formal sector, and for new
entrepreneurs to launch start-up businesses. The immediate focus of the policy action
supported by PRSC V was on adopting and starting implementation of an action plan
aimed at establishing the Medium Enterprise Center (Centre des Moyennes Enterprises).
11. The road maintenance program aimed at supporting the authorities’ ambition
to maintain the growing road infrastructure. Road maintenance was seriously under-
funded leading to deteriorating infrastructure and less cost-effective road rehabilitation.
The new road maintenance funding scheme, FERA (Fonds d’Entretien Routier Autonome),
4
had become operational in 2009.3
The medium term (3 to 5 years) target was for funding
through this mechanism to reach a base of 2008 equivalent US$100 million from which it
would then grow in line with user consumption. The implementation of the new financing
arrangements was phased over a three-year period; in the interim, the FERA was supposed
to be funded through a mix of budget appropriations, declining over time, and the user
charge, increasing over time. This strategy was supported through both PRSC IV and
PRSC V.
Policy Area 2: Human Development
In this area the PRSC series supported reforms judged critical to improving the
authorities’ education, health and nutrition policies, and management objectives. The
medium-term objectives of the selected reforms were to improve human resource (HR)
management in education, to expand the coverage of the population by health mutuals
and improve public hospital efficiency, and to improve coverage and financial
sustainability of the community-based nutrition program through adequate budget
allocations.
12. In the education sector, the PRSC supported Government measures to
strengthen HR management. Despite a significant commitment of public resources, the
view was widely held that progress on grounds of effectiveness, efficiency and equity of
spending had fallen short of the government's objectives. With respect to the management
of the single largest input in the system (teachers), recruitment and allocation practices
lacked transparency and posed numerous risks of misuse of funds. The plan was to
eliminate the recruitment of teachers through the “safety quota”, or quota sécuritaire
system. This system permitted various Ministers to nominate candidates for teaching
positions with neither entrance exams nor training. Selected measures to strengthen HR
management were related to the confirmation of a competitive recruitment system for all
contractual teachers, and the adoption of an identification system using an ID number for
all contractual teachers consistent with civil service IDs, and the effective integration of the
Volunteers Project unit into the HR directorate.
13. In the health sector, reforms supported by the PRSC operations aimed at
implementing the strategy for expanding health risk coverage (PRSC IV), and rolling
out the new hospital policy (PRSC V). The government was committed to creating
appropriate (budget-funded) financing and support mechanisms for extending benefit
packages covered through participation in, and strengthening management capacities of,
Mutual Health Organizations (MHO) targeted at populations employed in the rural and
informal sectors. Moreover, the government engaged in a new hospital policy to address
the issues of hospital corporate and financial governance. In Senegal, hospitals account for
a significant proportion of the public health budget (about 50% of public health
expenditures over the period 2003-2008). Yet, major concerns had been raised about the
efficiency and efficacy of these expenditures. The main objective of the new hospital
3 The implementation of this reform was initiated at end-2007 but it was sidetracked by the authorities’ 2008 financial
difficulties and challenged further by the difficult economic context of 2009. The Fund itself was created by decree in
October 2007; the road user charge was instituted, again by decree, in early 2008; the chief executive was selected during
the year and formally appointed in December 2008; and financial arrangements were finalized in early 2009, supported by the FY09 Public Finance Support Credit.
5
policy was to restore sound control (at central or regional levels) of hospital management
and financing.
14. The PRSC V also supported the Government’s Nutrition Reinforcement
Program. The fight against malnutrition in Senegal remains a major national priority and
investing in the nutrition of young children had already proven to be a highly cost-effective
means to promote long-lasting skills and cognitive developments. Survey data showed that
the nutritional status of children under five years of age had improved in recent years.
These results were achieved thanks to the successive nutrition programs implemented with
support from development partners, particularly the Community Nutrition Project (PNC,
1995-2000) and the Nutrition Reinforcement Program (PRN, 2002-2006), implemented by
the Government. The Government was encouraged to scale up the PRN towards full
national coverage by adequately budgeting resources for the program to accelerate and
consolidate recent gains.
Policy Area 3: Mitigating vulnerabilities
The focus was on the fisheries sub-sector, where the PRSC series supported the
introduction of critical measures and regulations needed to help implement a
transparent policy of access restriction to the resource.
15. Policy actions supported by PRSC series were concerned with the disclosure to
the public of information related to existing fishing agreements, an industrial fishing
vessel registry and artisanal vessel registration database. Fishing and related activities
represent an important economic activity, accounting for some 20 percent of exports, but
one at serious risk in Senegal. One of the key issues affecting the fisheries sector in
Senegal is the dwindling size of fish stocks due to overexploitation. In 2008, the
Government completed a Letter of Sector Policy for the fisheries, prioritizing the
sustainable management and restoration of fish resources and their habitats as the sector's
top objective. In particular, the Letter of Sector Policy focused on dissemination of fishing
permits to all small-scale fishers, and the establishment of an access rights concession
system for the resource.
Policy Area 4: Public Sector Governance
In this area, the PRSC series intended to support critical reforms to improve economic
governance in Senegal, with a focus on public financial management, procurement, debt
management and statistics.
16. In public financial management, the selected reforms aimed at improving the
transparency of budget execution, fostering demand for reporting and transparency.
Recent diagnoses performed by or at the request of authorities had identified a range of
weaknesses in Senegal's Public Financial Management (PFM) system. The policy response,
in addition to improving budget preparation, included among others (i) to move to a more
forceful delegation of the responsibility for budget execution to sector ministries; and (ii)
to undertake a full roll-out of the two public financial management systems, SIGFIP and
ASTER, both horizontally, across Ministries and regional departments, and vertically, by
interfacing the budget and treasury systems. On the external control side, the authorities
committed to speed up the transmission of budget execution laws and public accounts to
the Audit Office and improve their quality. PFM reforms aimed also at improving
6
management of State land property through the adoption of a new Law on Land Ownership
(Loi sur le Régime Foncier) that modernizes and clarifies the overall legal framework for
land ownership. The non-transparent allocation of public lands by senior members of
government had become a recurring source of controversy.
17. In procurement, the series of PRSCs intended to support actions to ensure the
sustainability of the legal and institutional framework and uphold the integrity of the
system. In recent years, the Government had made substantial progress towards the
modernization of the national procurement system. Nonetheless, the procurement, legal,
and regulatory framework still provided for provisions that did not promote transparency,
limiting competition and the efficiency of operations. Some of these issues started to be
addressed under PRSC IV through the adoption by the Board of the regulatory agency
(ARMP) of various texts covering the Procurement code, NSBDs and GCCs, and
Procurement Units. These issues remained on the agenda, following the revisions by the
government of the basic decrees mentioned above.
18. In public debt management, the selected reforms aimed at strengthening the
quality and policy relevance of the public debt management strategy and to reinforce
the capacity of the debt management entities. Debt management in Senegal had shown
strengths relating to the legal framework, macro-policy coordination and cash management.
However further progress needed to be achieved in order to ensure sustainability. Debt
service levels were starting to rise with the signing of a non-concessional loan with France
in 2008, and there was the temptation to take on more loans now that debt levels had been
drastically reduced post-HIPC/MDRI. It was therefore necessary to strengthen the debt
management strategy and other ancillary debt management functions.
19. Finally, the PRSC series aimed at supporting continued progress in statistical
development and a policy of national dissemination of poverty measurement. Senegal
has been at the forefront of a longstanding program of strengthening national statistical
systems in francophone Africa. Recent institutional reforms, including the creation of an
autonomous National Agency for Statistics and Demography (Agence Nationale pour les
Statistiques et la Démographie, ANSD), had gone a long way towards creating a favorable
context for the development of a modern public statistical system. Some challenges
remained, among which data archiving and a systematic and open dissemination of poverty
and other data.
1.5 Revised Policy Areas: N/A
1.6 Other significant changes: N/A
2. Key Factors Affecting Implementation and Outcomes
2.1 Program Performance
20. The program was supported by two PRSCs. PRSC IV was approved on June 1,
2010. The credit became effective on June 24, 2010 and was closed on March, 31, 2011.
PRSC V was approved on May 26, 2011. The credit became effective on June 29, 2011
and was closed on March 31, 2012. The prior actions for the two operations are listed in
Table 1 below.
7
Table 1: Prior actions
Private Sector Development
PRSC IV PRSC V Comments 1. Adoption by the Ministry of
Urbanism of new procedures for
issuing a building permit, so as to
reduce the time and cost involved in
securing a building permit.
Completed. Decree signed
2. Inclusion of a CFAF45 billion
appropriation for road maintenance
in the 2010 Finance Law.
1. Satisfactory execution of the 2010
Finance Law appropriation for road
maintenance, and the inclusion of an
adequate appropriation for road
maintenance in the 2011 Finance Law,
including an increase in the share of
FERA funding from the road user
charge.
Prior action for PRSC IV was
completed.
Trigger for PRSC V was modified
as: Issuance of a decree doubling the
road user charge transferred to the
FERA. The new trigger was
completed.
2. Adoption by the Ministry of Economy
and Finance and start of implementation
of an action plan based on the key
recommendations of a Small and
Medium Business tax policy and
administration reform study.
Trigger was dropped. Building on
IMF FAD and AFRITAC TA on
policy and administration of taxation
of SME, the authorities decided to
postpone the reform study and
prioritize implementation of a key
recommendation of the IMF advice to
establish a Medium Enterprise
Center. This center is now
operational.
Human Development
PRSC IV PRSC V Comments 3. Reconfirmation through issuance
of a Ministry of Education Circular of
a competitive recruitment system for
all contractual teachers, including
quantitative benchmarks for the
phase-out over three years of the
“quotas sécuritaire” recruitment
3. Satisfactory progress made in
strengthening human resource
management in the education sector, as
evidenced by the adoption by the HR
department of the Ministry of
Education of an identification system
using an ID number for all contractual
teachers consistent with civil service
IDs and the effective integration of the
Volunteers Project unit into the HR
directorate
Policy action for PRSC IV
Completed. Text calling for a phase-
out in three years of the “quota
securitaire” signed.
Trigger for PRSC V Completed. The identification of the
contractual teachers by an ID is
implemented and the Volunteers
Project Unit has been officially
integrated into the HR directorate. 4. Adoption of the National Strategy
for Extending Health Risk Coverage
by an Arrêté inteministériel co-signed
by the Ministry of Health, Ministry of
Economy and Finance and Ministry
of Labor
Completed. Text was signed by the
MoH and submitted to the MEF and
the MoL.
4. Satisfactory progress made in the
implementation of the government’s
hospital policy, as evidenced by the
preparation and signing by the Ministry
of Health of performance contracts
with at least 5 Public Hospitals
(Etablissements Publics Hospitaliers,
EPH)
Completed. Performance contracts
have been signed by the Ministry of
Health and the General Managers of
EPH for 5 performance contracts.
5. Adoption and initiation of
implementation of a medium-term plan
for sustainable financing of the
Nutrition Reinforcement Program
Completed. A medium term strategic
plan for 2012-2017 has been
approved.
8
Mitigating vulnerabilities
PRSC IV PRSC V Comments 5. Disclosure by the Ministry of
Fisheries of existing fishing
agreements (or assimilated contracts)
on a government website
6. Establishment by the Ministry of
Fisheries of an industrial fishing vessel
registry and artisanal vessel
immatriculation database accessible to
the public on-line.
Policy action for PRSC IV
Completed. Information on existing
fishing agreements (or assimilated
contracts) is compiled and available
on the website of the MoF.
Trigger for PRSC V
Completed The register for the
industrial fishing vessel has been
created as well as the artisanal vessel
database (with access available on
request).
Governance
PRSC IV PRSC V Comments 6. Issuance by the Prime Minister of
implementing regulations allowing
the examination of the approved
budgets and of the previous year's
financial reports of public entities
Completed. Implementing
regulations were signed by the Prime
Minister.
7. Instruction by the Ministry of
Economy and Finance mandating the
publication on its website of budget
execution tables on a monthly basis
and a budget execution report on a
quarterly basis within 30 days of the
end of the relevant period, so as to
enhance transparency in budget
execution.
7. Introduction by the respective
Financial Affairs Directorates (DAF)
of the Ministries in charge of
Education, Health, Justice and
Decentralization of the spatial code at,
at least, the departmental level in the
government’s budget classification
system (nomenclature) for Education,
Health, Justice and Decentralization as
evidenced by detailed published
SIGFIP reports.
Policy action for PRSC IV
Completed. Instruction has been
issued calling for monthly execution
tables and a quarterly budget
execution report to be published on
MEF website.
Trigger for PRSC V Modified as:
Improve budget reporting to the
public by presenting and publishing
the 2011 budget envelopes for
Education, Health, Justice and
Decentralization using the spatial
code at, at least, the departmental
level as evidenced by detailed
SIGFIP reports.
Completed. SIGFIP reports available
on the MOF‘s DPEE website.
8. Adoption through an Arrêté of the
Minister of Economy and Finance of
a new organigram for the Tax
Directorate, including the Cadastre
and Domaines departments.
Completed. The Arrêté and an
issuance by the Director of the
Cadastre and Domaines departments
are adopted.
9. Submission to the Audit Office
(Cour des Comptes) of the execution
laws up to 2008 and submission to
the Parliament of the execution laws
reviewed by the Audit office from
1999 to 2002
Completed. The budget execution
laws are submitted to the Audit
Office (Cour des Comptes) and the
Parliament approved the reviewed
execution laws from 1999 to 2002.
10. Adoption by the ARMP Council
of the revised procurement regulatory
framework (Procurement Code,
NSBDs and GCCs, Procurement
Units) to address the remaining issues
identified in the UCS-stage 1 report
Completed. Final texts approved by
ARMP council
9
8. Submission to Parliament of a
Land Property Code ("Code
Foncier") that includes transparent
provisions allowing the optimization of
public revenue from sales of lands
owned by the State.
Modified as: Adoption of a new Law
of Land Ownership that modernizes
and clarifies the overall legal
framework for land ownership.
Completed. The Law has been
approved by the National
Assembly and the Senate.
9. Initiation of the implementation of a
debt management policy and
institutional strengthening reform plan,
as evidenced by the submission to
Parliament and publication of a
Cabinet-approved MTDS produced
following international standards.
Dropped. The sequencing of the debt
Management reform plan has been
revised, based on the
recommendations of a joint Bank-
Fund TA mission. That mission has
identified a range of actions for the
authorities. A first step will be the
creation of a new debt management
office which will be in charge of
preparing a MTDS for Cabinet
approval.
10. Adoption by the Council of
Ministers of amendments to the
Statistics Law that mandate a more
open access by users to primary data.
Completed. Law drafted and adopted
by the Statistical Technical
Committee (CTPS) and the National
Committee and approved by the
Council of Ministers.
21. There were 10 prior actions for PRSC IV, and 10 triggers for PRSC V. Two
triggers for PRSC V were dropped, in both cases in order to reflect the conclusions of IMF
technical assistance completed in the period between the two operations, but also the desire
of the authorities to adopt a longer time frame for implementation. All remaining prior
actions were met. Three triggers were reformulated to improve clarity or ensure feasibility.
2.2 Major Factors Affecting Implementation:
22. Adequacy of government’s commitment. The program was implemented in a
particularly challenging context where the country was entering a period of political flux,
ahead of the 2012 elections, while coping with a series of shocks. There were also signs of
deterioration in governance, not uncommon in regimes which have been in power for
almost 10 years. In this respect, the fairly successful reform program suggests that the
commitment of some senior government officials combined with budgetary constraints and
pressure from development partners may have created sufficient incentives to move ahead
with a selective reform agenda. However, implementation remained a key issue, and
slippage occurred on several fronts. The arrival of a new government provided an
important boost to put some of the reforms back on track.
23. Soundness of background analysis. Background analysis underpinning the design
of PRSC series appear to have been accurate, relevant and comprehensive. The preparation
of the proposed PRSC relied on extensive core diagnostic assessments by the World Bank
and other donors in collaboration with the government. In particular, there was core
analytical work on public financial management by the EU (2007 PEFA), the IMF (FAD
technical assistance), as well as a DeMPA and CPAR. Fisheries sector work had been done
for two projects funded by IDA and GEF. The social sector knowledge base had been built
through health reform technical assistance and the preparation of an Education For All FTI
project.
10
24. Synergies between investment projects and budget support. On-going policy
dialogue, capacity-building and analytical work in investment projects in the education,
transport and fisheries sectors were instrumental in preparing reforms in these sectors,
while budget support brought appropriate pressure from the Ministry of Economy and
Finance to ensure their implementation. On the other hand, weak support from the IDA
private sector project hampered progress on construction permits.
25. Assessment of the operation’s design. The design of the second series of PRSC
drew from lessons learned in implementing the previous series. In particular, the previous
ICRR highlighted the need to focus on limited number of objectives and to reduce the
number of non-binding measures additional to the prior actions and triggers, and to use
realistic quantitative targets. However some of the outcome indicators have still turned out
to be too ambitious or inappropriate. The target for publication of information on public
land transactions was not consistent with political realities, while the hospital efficiency
index was influenced by factors beyond the control of the hospitals or the state.
26. Risk analysis. Three broad risks were identified: external risks, such as the impact
of the global slowdown; political opposition, including from vested interests; and weak
administrative capacity. The external and political risks were considered significant; the
risk related to administrative capacity was considered low. Key risk mitigating factors
integrated in the design of the operation included a focused agenda, high donor
involvement, and a built-in process of collaborative analysis, dialogue and stakeholder
consultations. Bank engagement by a core team almost entirely field-based was also
deemed to enhance the Bank’s monitoring of reforms and its ability to take steps to ensure
that reform objectives were being followed through. Moreover, Senegal’s strong track
record in macroeconomic management also would mitigate external risks.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:
27. M&E design. The design of the M&E system reflects the team option to support
government ownership of the structural reform program. The preparation of the second
PRSC series was coordinated, on the government's side, by a newly created Technical
Committee for Budget Support, with active participation from line ministry representatives.
The entity responsible for the program supported by this PRSC series within the
Government was the Ministry of Economy and Finance, in close association with the
Ministries of Education, Health, Environment, Justice, Family, and Fisheries. Within the
Bank, the series of PRSCs was designed, developed and monitored by a core team that was
almost entirely field-based. The team maintained frequent contact with technical
counterparts in the Government and development partners. In this context, monitoring of
implementation and adjustments to the policy framework were facilitated within the forum
for information exchange and dialogue provided by the committee.
28. M&E implementation and utilization. The monitoring of outcomes was expected
to be carried out within the M&E framework of the PRSP. The team acknowledged the
need to give closer attention to the monitoring of all actions/outcomes included in the
policy matrix to mitigate the tendency for ministries and agencies participating in budget
support operations to focus on the realization of prior actions, while moving more slowly
on implementation, and sometimes overlooking the final outcomes envisaged. This bias
11
remained. While monitoring took place on a regular basis, notably by field-based staff,
only one implementation status and results report (ISR) was issued (December 2011).
2.4 Expected Next Phase/Follow-up Operation (if any):
29. The preparation of the First Governance and Growth Support Credit for the
Republic of Senegal is ongoing. This operation is the first of a new series of three
GGSCs, following the completion of PRSCs IV and V. The proposed operation supports
the new government’s efforts to improve economic governance by strengthening its
accountability system, and the efficiency and effectiveness of public expenditure, and to
promote growth through energy reforms and private sector development. Policies and
reforms supported by this new operation build on the achievements of previous series
while shifting the focus to support the new government’s priorities including difficult
reforms in the governance and energy sectors. The proposed new series is also aligned
with Senegal’s Document of Economic and Social Policies (DPES) and the new
government’s General Declaration of Policies.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation
30. The objectives of this second PRSC series were relevant to the country’s needs
and priorities as reflected in the PRSP-II. The operations were fully aligned with the
government reform agenda and the FY07-FY10 CAS for Senegal. It addressed key
elements of the growth agenda, improving the investment climate, protecting the critical
fisheries sector, and preserving road infrastructure. It tackled the need to improve the
efficiency of public expenditures in the health and education sectors. The PRSC series was
designed to build on, complement and/or leverage existing or planned Bank development
policy, capacity building, and investment operations and a broad program of analytical
work. The implementation framework supported government ownership, while ensuring
continued close Bank engagement by a core team, almost entirely field based.
3.2 Achievement of Program Development Objectives
31. Overall, PRSC series assisted the Government’s efforts to achieve results in
the four main areas supported by the program. Senegal was able to make progress in
wealth creation, access to basic social services, mitigating vulnerabilities and governance,
despite several internal and external shocks.
Wealth creation
32. The authorities implemented actions that improve the investment climate and
foster private sector development. Some progress has been achieved toward the
reduction of the time and cost involved in securing a building permit, and new procedures
were formally adopted by the Government. Furthermore, the Government launched the
computerization of the procedures to obtain a building permit in order to simplify the
procedures, increase transparency and reduce the time passed in obtaining building permits.
However, according to the Doing Business Report, the time required only fell from 220
days to 210 and the private sector continued to complain about this issue at the Presidential
Investment Council of 2011.
12
33. More progress has been made in ensuring adequate maintenance of Senegal‘s
road capital. The budget of the Road Maintenance Fund (FERA) more than doubled
between 2008 and 2011. Actual revenues received in 2011 were somewhat lower, but still
twice the level of the 2008 budget. As a result, a total of 662 kilometers (km) of classified
non-paved road were recovered in 2010 against 106 km in 2009, exceeding the annual
target set at 400 km. Similarly, the maintenance of classified paved roads increased from
689 km in 2009 to 698 km in 2010, for a similar target of 400 km.
34. The authorities eventually made progress in the area of small and medium
enterprise (SME) policy. A PRSC V trigger had been identified for the adoption and start
of implementation of an action plan based on a study of SME tax reform. The trigger was
dropped when the authorities decided to rely on the recommendations of IMF technical
assistance and agreed to establish a Medium Enterprise Center (Centre des Moyennes
Enterprises) in the General Directorate of Taxation. This unit is now operational.
Access to Basic Social Services
35. Concerning education, the government made encouraging progress on human
resource management. They moved more quickly than expected to eliminate the
recruitment of teachers through the “safety quota”, or quota sécuritaire, system. Whereas
the PRSC IV prior action envisaged a 3-year phase-out, the government eliminated the
system in one year. The recruitment of all contractual teachers in 2010 was conducted on a
competitive basis at the national level. This method of recruitment led to the recruitment of
2045 teachers in 2010, against roughly 4000 teachers in 2009, and all of these received
training. Furthermore, the HR department of the Ministry of Education has adopted an
identification system using an ID number for all contractual teachers. Also, the Volunteers
Project unit has been suppressed and integrated into the HR directorate. An integrated
human resource and payroll system was established and all teachers are now covered by it.
36. In the health sector, the government is implementing the Public Hospital
financial recovery plans. First generation performance contracts were signed with five
hospitals, which served to bring the Ministry of Health back into the business of
controlling the hospitals. Significant reductions in staffing were achieved (17.6%);
however, this was offset by declining demand for services. The powers of the MoH
hospital directorate have been slightly strengthened but supervision of the hospitals needs
to be further improved. As regards the extension of health risk coverage, the National
Strategy for Extending Health Risk Coverage has been adopted, and the number of health
mutuals grew substantially. In the nutrition sector as well, a medium term plan for a
sustainable financing of the nutrition reinforcement program has been drafted for the
period 2012-2017. The nutrition improvement program (Programme de Renforcement de
la Nutrition) has become a model for Africa, reducing the level of underweight children to
15%, which is one of the lowest rates in Africa. In these two areas, progress has been made
in setting the institutional framework. But implementation remains the key challenge.
Mitigating Vulnerabilities
37. The government continues to implement its strategy for the transparent
restriction of access to fisheries resources. The Ministry of Fisheries has disclosed the
existing fishing agreements on a government web site and is committed to continue this
13
practice for all new fishing agreements or similar contracts. The government started the
registration of the industrial fishing vessels and prepared a database for the identification
of the artisanal fishing fleet. A database has been set up and is available online.4 The
registration of the artisanal fleet was critical as it proved that the number of vessels had
been seriously under-estimated (17,000 instead of the assumed 12,000). This revelation
then led to a freeze on the registration of new pirogues, except in the event of replacement,
in 2012 – an important first step in reducing the pressure on the fishery resource. Two
implementation issues have emerged. The first is the need to keep the online data base up-
to-date.5 The second, and more serious one, is the award of numerous industrial fishing
licenses in a non-transparent manner in early 2012, shortly before the presidential elections.
However, the new government cancelled these as soon as they took office.
Public Finance and Governance
38. With regards to budget management and reporting, the authorities have taken
significant steps. In 2011, the Senegalese Parliament approved five of the six new PFM
regulations adopted two years before by WAEMU Commission. These new regulations set
objectives, including performance budgeting, decentralization of commitment authority to
line ministries, reinforcement and modernization of internal and external control,
modernization of expenditures management, implementation of accrual accounting and
new budget classifications aligned with international standards. The important, sixth
WAEMU regulation concerning a code of transparency was adopted by the Council of
Ministers in July 2012. Information on budget execution, including fiscal tables, is
available to the public on a monthly basis, and spatial data for four key ministries is also
available. Summaries of the budgets for the four largest public agencies were attached to
the 2012 budget law for the first time.
39. Concerning the external audit system, significant effort has been made to clear
the backlog in the review of the Budget Review Acts (Lois de Réglements). By mid
February 2012, the Audit Office (Cour des Comptes) completed the audit of the Budget
Review Acts for 2008, 2009 and 2010, and submitted them to the National Assembly, thus
clearing the backlog that has hampered its effectiveness since the creation of the Court in
1999. The arrival of a new government in April 2012 provided fresh momentum to this
reform program, as it quickly approved a new law to strengthen the independence of the
Audit Office.
40. The PRSC also supported reforms in the area of debt management, public
land management and access to statistics. Concerning debt management, the Ministry of
Finance consolidated the separate entities in charge of internal and external debt
management into a single entity. In addition, the government decided to expand the
coverage of the Medium Term Debt Strategy (MTDS) to three years, instead of one. The
MTDS was not finalized as quickly as hoped, and so the relevant trigger was dropped, but
it is now ready for submission to the National Assembly with the 2013 budget. As for the
statistical system, the government prepared a revised statistical law to allow more access to
4 http://www.dpm.sn/index.php/documentation/statistiques-des-peches
5 A request to this effect was made in September 2012.
14
primary data by the users, and fostered dialogue between providers and users within the
national statistical commission. The National Assembly approved the new law in 2012.
However, access to primary data from the Statistics Agency (ANSD) remains limited as
old habits are slow to change. Once the data from the 2011 household survey are cleaned
and ready for dissemination, the World Bank will work with ANSD to find an appropriate
way to make them widely available. On the management of public lands, small changes
were made in the Tax Directorate, but the publication of all transactions proved too
politically sensitive.
41. In the area of public procurement, recent developments have raised the need
to maintain policy dialogue to ensure the sustainability of reforms. Following several
years of procurement system reforms that placed Senegal at the forefront in the region,
PRSC IV supported the adoption of a revised regulatory framework by the Authority for
the Regulation of Public Procurement (ARMP) after extensive stakeholder consultation.
However, the government then decided to revisit several provisions of the original texts, in
particular with respect to operations that impinged on national security or were considered
urgent. Discussions with the donor community led to the adoption of a new decree that
provided a balance between transparency and efficiency, and preserved the integrity of the
system. New changes were introduced in January 2012, exempting some activities, notably
in the energy sector, from the requirements of the procurement code. These did not follow
the agreed participatory process involving central government agencies, local authorities,
private sector, civil society and donors, nor the approval of the ARMP. However, the new
government is committed to undoing these latest changes.
3.3 Justification of Overall Outcome Rating
Rating: Moderately Satisfactory.
42. The outcome in the first component of the program, wealth creation, was
moderately satisfactory. Performance on the outcome indicator fell well short of the
target for construction permits. Significant progress was made on road maintenance
funding, although the revenues finally received were somewhat less than expected. The
trigger on SME taxes was dropped, but the action was eventually completed.
43. The outcome of the second component, access to basic social services, was
satisfactory. There was good progress in the implementation of reforms of the education
sector. In the health and nutrition sectors, prior actions laying the institutional ground for
reform implementation were completed. Performance on most outcome indicators was met.
The one indicator missed (on hospital efficiency) was probably inappropriately defined.
44. The outcome in the third component, mitigating vulnerabilities, was
satisfactory. The outcome of a more transparent framework in fisheries resources was
achieved. There were slippages but the arrival of the new government provided new
resolve to maintain the reform program.
45. The outcome of the fourth component, public finance and governance, was
moderately satisfactory. There was good progress in improving budget preparation,
execution and reporting, and external control. Progress in debt management was slower
than envisaged, but achievement of the expected results was finally expected in late 2012.
Progress in transparency of public agencies and access to statistics was more limited. The
15
situation with regards to public land transactions did not change. The area of public
procurement was probably the most sensitive, and most important, one in terms of
improving governance. The two episodes of slippage are of concern but do not appear to be
significant beyond the short-term. In fact, the outcome indicator was exceeded.
3.4 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
46. This PRSC series is expected to have a positive impact on the medium-term
poverty reduction trend. This impact would be through an expected strengthening of the
government‘s policy making and institutional capabilities to ensure an enabling
environment for the private sector (component 1), improve the State‘s ability to provide
basic services efficiently and equitably (component 2), preserve the viability of fishing as a
livelihood (component 3), and improve governance in the management of public resources
(component 4). However, an intermediate outcome should materialize with growth
returning to its long term performance of around 5 percent per year.
47. As of now, poverty incidence is not declining significantly. The last poverty
estimates, based on a household survey conducted in 2011, showed the incidence of
poverty at 46.7 percent of the population—more than 6 million Senegalese people living
on a household income below the national poverty line. At the same time, inequality
appears to have risen, with the ratio of consumption in the top quintile relative to the
bottom quintile doubling from 5 to 10 between 2006 and 2011. Also, geographical
disparities remain broadly unchanged with two thirds of the poor households living in rural
areas.
48. Policies supported by PRSC operations in the area of fish resources
management may have the most significant positive impact. The objective is to prevent
additional artisanal fishermen from entering the sector and further reducing the catches and
incomes of those already there. In addition, the plan is to reduce the industrial fishing fleet
over time, which should gradually lead to higher catches for the artisanal sub-sector.
Stabilizing and eventually expanding the artisanal fishery will also have beneficial impacts
for the many women who tend to dominate the processing and distribution of fish.
(b) Institutional change/Strengthening
49. The program has supported relevant institutional change in the four areas
that were covered. The largest impact was probably on the road maintenance fund
(FERA) which obtained a doubling of its budget, over half of which derived directly from
user fees. This placed the fund on a much more solid and sustainable financial footing. In
addition, the series has supported a continued reform program on PFM. To move more
forcefully on PFM reforms, the MEF has developed an overall action plan that was
adopted in October 2009. The PFM action plan is a comprehensive attempt by the
authorities to address the weaknesses of their PFM system. Overall, the Bank has judged
implementation performance of the PFM reform program to date and Government‘s
commitment to its improvement as satisfactory.
(c) Other Unintended Outcomes and Impacts:
N/A
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3.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
N/A
4. Assessment of Risk to Development Outcome
Rating: Substantial
50. Major risks threatening development outcomes are related to Senegal’s
vulnerability with respect to external crises, both regional and international, and to
climatic conditions. Senegal’s short-term prospects continue to depend on developments
in the global economy. A slower normalization and/or longer macroeconomic downturn in
the current global context than anticipated still represent a significant risk, contingent on
developments in partner country economies, mainly in Europe. The political crises in Mali
and Guinea Bissau will also have a negative effect on the economy. Mali is the largest
single export destination for Senegal, while instability in Guinea Bissau will make it more
difficult to end the violence in the Casamance. While the poor rainfall of 2011 caused a
serious setback for the rural economy, flooding in 2012 is causing major damages in urban
areas, especially in the main city, Dakar. Increases in global food and fuel prices would
put further pressure on macroeconomic management. Political opposition, including from
vested interests such as protected industries and labor unions, represents another potential
obstacle to pursuing difficult but necessary reforms ensuring sustainability of fiscal policy
and improvement of governance.
51. On the other hand, the change in government has brought a new commitment
to reform. The appetite for reform was clearly diminishing under the previous regime,
while governance problems were rising. The new government was elected on the basis of
their promise to improve transparency and accountability in the management of public
resources, and to address the needs of the rural poor. Earlier indications are that some
difficult reforms are now moving forward.
5. Assessment of Bank and Borrower Performance
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
Rating: Moderately Satisfactory
52. The quality at entry is assessed as moderately satisfactory. The design of the
second PRSC series has drawn on the PRSP-II which benefited from broad stakeholders
consultations. Additional consultative inputs were drawn from budget support policy
matrix reviews and the recent PRSP II implementation completion and diagnosis
assessment. The program has also benefited from lessons learned through the preparation
of the ICRR on the first series of PRSCs. However, some indicators were probably over-
ambitious, notably in the area of transparency in public land transactions (for political
economy reasons) and hospital efficiency (due to the importance of exogenous factors).
53. A decision was made to incorporate the difficult energy reform dialogue into
this series for the second operation. An energy sector investment project had proven
unable to promote some key reforms, resulting in the cancellation of part of that loan. It
was agreed with the government that this amount could be added to the PRSC series if
17
similar reforms could be implemented on a somewhat different time line. In the end, this
too proved impossible and the idea was dropped. However, this issue dominated the ROC
meeting for PRSC V and distracted attention from the rest of the reform program.
(b) Quality of Supervision
Rating: Moderately Satisfactory
54. The supervision of PRSC IV and V is rated moderately satisfactory. Although
no ISR was issued for PRSC IV, the results framework was updated through the PRSC V
Program Document. Further updating was achieved through the ISR issued for PRSC V.
However, emphasis was put on the completion of prior actions while the results indicators
deserved closer attention. The Bank’s private sector project could have provided stronger
support on the construction permit reforms. Staff could have followed up more closely
with the statistics agency to ensure better public access after the law was amended.
(c) Justification of Rating for Overall Bank Performance
Rating: Moderately Satisfactory
55. The overall Bank performance was satisfactory. As a result of the good
preparation of the series, and a strong team in the field.
5.2 Borrower Performance
(a) Government Performance
Rating: Moderately satisfactory
(b) Implementing Agency or Agencies Performance
Rating: n.a.
(c) Justification of Rating for Overall Borrower Performance
Rating: Moderately satisfactory
56. The performance of the borrower is rated moderately satisfactory. While most
triggers for PRSC V were completed, two were dropped, and there was some back-sliding
on one of the PRSC IV prior actions (related to procurement). Seven out of fourteen results
indicators met the targets set for 2012. Substantial progress was made on another three
(road maintenance, health mutuals and debt management), while little or nothing was
achieved on the remaining four (construction permits, hospital efficiency, land transactions,
access to data). Some of this reflects over-ambitious targets, and some reflects insufficient
commitment to follow-up. More attention should be devoted to the results framework.
6. Lessons Learned
57. Budget support can be an effective tool to mobilize the ministry of finance on
sectoral reform, under the right circumstances. This finding is supported by the case of
the road maintenance fund (FERA), the sustainable management of fisheries, teacher
recruitment, and public hospitals, which demonstrated increased mobilization and greater
involvement of the line ministries and smoother relations between the ministry of finance
18
and line ministries. In each case, sector investment projects and/or technical assistance
complemented budget support, and the combination served to promote reform.
58. Policy-based lending under a harmonized approach among donors can be an
effective tool to strengthen the country-based development model. The
implementation of an enhanced harmonization framework for budgetary support, with the
Bank having a particular focus on the design of policy reforms, can provide a mechanism
for effectively coordinating expanded donor budgetary support, unifying donor assistance
around a coherent set of policy actions, lowering government transaction costs from
dealing with multiple donors, and generating reform momentum. This was particularly true
in the case of PFM reform, where a common action plan was adopted, and in the case of
the procurement code, where donor coordination helped to correct slippage. However, the
approach based on government ownership, a focused and coherent policy action matrix,
and flexibility in implementation should not undermine the objective of targeting critical
reforms and effectively monitoring results and outcomes. In this respect, some other
lessons need more emphasis.
59. Ministries and agencies participating in budget support operations have a
tendency to focus on the realization of prior actions, so systematic follow-up actions
are needed. Other measures and the final outcomes receive less attention. This emphasis
has to be expected in view of the nature of the Bank‘s instrument. Yet, it can be
detrimental to progress over time. In this respect, attention should be paid to the quality of
outcome indicators at the outset, making sure that these indicators are relevant to the
objectives, that they can be measured at every step of implementation, and that the
authorities fully own them. It is crucial to align closely performance indicators for the
PRSCs with those for the PRSP and the CAS.
60. More attention to political economy considerations may be needed to better
understand opposition to reform, particularly in sensitive areas. Adequacy of
government’s commitment is essential for introducing major reforms. Implemented
reforms are not immune to the risk of reversal. Some influential interest groups may resist
any reform that would reduce their privileges, even if it would benefit a large part of the
population. Thus,
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners
(a) Borrower/Implementing agencies
We thank the authorities for their detailed response (see Annex 4) and we appreciate the
continued commitment of the new government to the reform agenda supported by this
series.
(b) Cofinanciers
(c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)
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Annex 1: Bank Lending and Implementation Support/Supervision Processes
(a) Task Team Members
Names Title Unit
Lending/Supervision
PRSC 4
Coste, Charles Consultant AFTFM
D' Hoore, Alain W. Lead Economist AFTP4
Durand, Philippe J-P. Program Coordinator AFTG2
Gonzalez, Alvaro S. Lead Economist ECSF1
Ndione, Mamadou Senior Economist AFTP4
Seck, Atou Sr Education Econ. AFTEW
Simonpietri, Antoine Senior Statistician AFRCE
Subran, Ludovic Social Protection
Economist
LCSHS
Wodon, Quentin T. Adviser, Poverty HDNED
Maimouna Mbow Fam Senior Financial
Management Specialist
AFTMW
Wolfgang M. T.
Chadab
Senior Finance Officer CTRLA
Louis Jean De
Marigny
Finance Analyst CTRLA
Lydie Madjou Finance Assistant CTRLA
Valerie Asfour Portfolio Officer CTRNF
Khady Fall Lo Team Assistant AFCF1
PRSC 5
Lending/Supervision
Mamadou Ndione Senior Economist AFTP4
Alain D' Hoore Lead Economist AFTP4
Maimouna Mbow Fam Senior Financial
Management Specialist
AFTMW
Eric Jean Yoboue Senior Procurement
Specialist
AFTPW
Wolfgang M. T.
Chadab
Senior Finance Officer CTRLA
Louis Jean De
Marigny
Finance Analyst CTRLA
Lydie Madjou Finance Assistant CTRLA
Valerie Asfour Portfolio Officer CTRNF
Boubker Abisourour Research Analyst AFTP4
Seck, Atou Senior Education Econ. AFTEW
Durand, Philippe J-P. Program Coordinator,
Energy
AFTG2
Fernandes, Judite Language Program
Assistant
AFTP4
20
Garnier, Stephan
Claude Frederic
Senior Energy
Specialist
AFTG2
Giles, John T. Senior Labor
Economist
DECHD
Iacovone, Leonardo Economist AFTFP
Sissoko, Fily Lead Financial
Management Specialist
AFTMW
Subran, Ludovic Social Protection
Economist
LCSHS
Khady Fall Lo Team Assistant AFCF1
Van Der Linde, Gert
Johannes Alwyn
Lead Financial
Management Specialist
AFTME
(b) Staff Time and Cost
Stage
Staff Time and Cost (Bank
Budget Only)
No. of staff weeks
USD Thousands
(including travel and
consultant costs)
Lending/Supervision
FY10 - P117273 - PRSC 4 42.91 345,624.20
FY11 – P121178 - PRSC 5 28.66 174,001.66
Total for FY10-11 71.57 519,625.86
FY12 5.36 14,651.86
Total for FY12 5.36 14,651.86
Total: 76.93 534,277.72
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Annex2: Beneficiary Survey Results N/A
Annex 3: Stakeholder Workshop Report and Results N/A
22
Annex 4: Summary of Borrower's ICR and/or Comments on Draft ICR
Madame Director,
I would like to indicate that we share the principal conclusions of the evaluation. This
support enabled us to achieve fairly substantial progress in different areas and we are
working to consolidate these and to accelerate reforms in other areas where the results
were less successful.
In particular I would like to recall the notable progress in human resource management in
the education sector, where the recruitment of teachers became more transparent, and an
audit of personnel will be completed in October 2012. In the area of infrastructure, the
implementation of a better system for road maintenance became effective with the creation
of FERA and the important evolution in the resources allocated to it.
Concerning SME taxes, a medium enterprise center was created in the Tax Department and
it is now operational.
The policy of performance contracts begun in the health sector will be pursued in order to
improve the performance of hospitals. In the fisheries sector, which employs a significant
share of the coastal population, the registration of pirogues should lead to more rational
management and reduce pressure on fish resources. Concerning construction permits, the
legal and regulatory texts have been prepared and the government is working to implement
them, albeit with a certain delay.
Turning to public finance, the delays observed in the production of budget execution laws
have been removed. Thus, this year, the budget execution law for 2011 has already been
sent to the Auditor’s Office. A monthly statement of budget execution is now available on
the Ministry’s website. This demonstrates the importance placed on external control,
reporting and public information.
Also we are going to rationalize agencies and improve their governance. A special
commission set up for this purpose will soon submit its conclusions. I should also recall
that the government has begun to implement gradually the WAEMU directives. It has
adopted the code of transparency in public finance and the draft organic law on the
Auditor’s Office.
Budget support is for us a key instrument to accompany reforms aiming to reinforce our
institutions. In addition, it is perfectly aligned with our national procedures. The support
of the World Bank through this modality has been critical to the progress achieved. This is
why I would like to transmit the thanks of the government and at the same time request the
reinforcement of this instrument in the Bank’s portfolio for an even better alignment with
national priorities.
Please accept, Madame Director, my best regards.
Minister of Economy and Finance
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Annex 5: Comments of Co-financiers and Other Partners/Stakeholders N/A
Annex 6: List of Supporting Documents N/A
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