World Bank Documentdocuments.worldbank.org/curated/en/...An integrated education HR/payroll system...

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


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


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


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


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


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


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


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.


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.


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


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


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


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


AFTMW

Subran, Ludovic Social Protection

Economist

LCSHS

Khady Fall Lo Team Assistant AFCF1

Van Der Linde, Gert

Johannes Alwyn

Lead Financial


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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