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Democratic Republic of Congo Public Expenditure Review (PER) Public Disclosure Authorizedpublic Disclosure Authorized Report No42167-ZR Report No 42167-ZR (PER) Review RepublicofCongoPublicExpenditure Democratic Democratic Republic of Congo Public Expenditure Review (PER) Public Disclosure AuthorizedPublic Disclosure Authorized March 2008 Poverty Reduction and Economic Management 3 Africa Region Public Disclosure AuthorizedPublic Disclosure Authorized Public Disclosure AuthorizedPublic Disclosure Authorized Document of the World Bank Public Disclosure AuthorizedPublic Disclosure Authorized Co-produced with the Government of the Democratic Republic of Congo Department for International Development MICS2 Multiple Indicator Cluster Survey, 2nd Series MinBud Ministry of Budget MinEPSP Ministry of Primary, Secondary, and Professional Education MinFin Ministry of Finance MinSect Line Ministries MinWA Ministry of Women’s Affaires MSF Médecins sans Frontières MTEF Medium-Term Expenditure Framework NGO Non-governmental organization NPV Net present value ODA Official Development Aid OECD Organization for Economic Cooperation and Development OFIDA Customs Agency (Office des Douanes et Accises) OGEDEP Debt management agency (Office de Gestion de la Dette Publique) PER Public Expenditure Review PETS Public Expenditure Tracking Survey PFM Public Financial Management PHC Primary health care PPG Public and publicly guaranteed PRSP Poverty Reduction Strategy Paper PSF Pharmaciens sans Frontières SANRU Santé Rural Project SP Deconcentrated provincial offices (Services Provinciaux) SWAP Sector Wide Approach TENAFEP The exam required to pass 6th grade/primary level TOFE Treasury Operations Report (Tableau des Operations Financières et Économiques) UN United Nations UNAIDS United Nations Programme on HIV/AIDS UNICEF United Nations Children’s Fund UNCTAD United Nations Conference for Trade and Development USAID United States Agency for International Development US$ United States Dollar WHO World Health Organization Vice President: Obiageli K. Ezekwesili Country Director: Marie-Francoise Marie-Nelly Sector Director: Sudhir Shetty Sector Manager: Jan Walliser Lead Economist: Hinh T. Dinh Task Team Leader: Keiko Kubota iii TABLE OF CONTENTS Executive Summary....................................................................................................................................1 Introduction ..............................................................................................................................................1 Chapter 2: Analyses of public expenditure trends and fiscal sustainability .............................................3 Chapter 3: Public financial management..................................................................................................5 Chapter 4: Education sector......................................................................................................................7 Chapter 5: Health sector ...........................................................................................................................9 Chapter 6: Gender...................................................................................................................................11 Chapter 1. Introduction And Country Overview............................................................................19 Chapter 2. Analyses Of Public Expenditure Trends And Fiscal Sustainability...........................26 2.1. Trends in public expenditure and revenues...........................................................................26 2.2. Fiscal Sustainability Analysis ...............................................................................................39 2.3. Conclusion and recommendations ........................................................................................45 Chapter 3. Current Situation Of Public financial management....................................................47 3.1. Main findings of the 2002 public expenditure review ..........................................................47 3.2. The basic principles of the Congolese budget management system .....................................48 3.3. Budgeting and accounting practices – Main weaknesses......................................................55 3.4. Traceability of public spending at the central and provincial levels. Roles of line ministries and governors. ....................................................................................................................................62 3.5. Deviations between executed and voted budgets..................................................................63 3.6. Main recommendations for public financial management ....................................................64 Chapter 4. Education Sector.............................................................................................................71 4.1. Introduction...........................................................................................................................71 4.2. Education sector baseline review ..........................................................................................72 4.3. Institutional and contractual structure...................................................................................74 4.4. Budget Process......................................................................................................................77 4.5. Observations on expenditure execution ................................................................................83 4.6. Decentralization ....................................................................................................................92 4.7. Recommendations.................................................................................................................93 Chapter 5. Health Sector...................................................................................................................97 5.1. Health Situation and System .................................................................................................97 5.2. Sector Strategy and Decentralization ..................................................................................100 5.3. Domestic Public Sector Health Spending ...........................................................................101 5.4. Government Budget and Disbursement Process .................................................................106 5.5. Health Financing in Selected Provinces..............................................................................107 5.3. International Public Sector Health Spending ......................................................................112 5.4 Health Sector Financing Requirements...............................................................................120 5.6. Conclusions and recommendations.....................................................................................124 Chapter 6. Gender ...........................................................................................................................128 6.1. Introduction.........................................................................................................................128 6.2. Institutional Framework......................................................................................................130 6.3. Budgetary Framework.........................................................................................................131 6.4. Sectoral Issues-Education, Health, and Security.................................................................132 6.5 Recommendations...............................................................................................................138 iv LIST OF TABLES Table 1.1: Incidents of poverty ...................................................................................................................19 Table 1.2: DRC Selected economic indicators (% GDP unless otherwise indicated) ................................21 Table 2.1 : Executed Programmed Expenditures........................................................................................35 Table 2.2: Budget Execution Reports versus Treasury Operations Report.................................................37 Table 2.3: Definitions of Scenario ..............................................................................................................42 Table 3.1: Rates of execution by category of expenditure..........................................................................63 Table 3.2:Rates of execution by function ...................................................................................................64 Table 4.1: Summary of education indicators for primary education ..........................................................74 Table 4.2: Regularized and non-regularized personnel (2007)...................................................................77 Table 4.3: MEPSP and total budget execution ...........................................................................................77 Table 4.4: Analysis of teacher payroll leakage ...........................................................................................85 Table 4.5: School block grant program.......................................................................................................88 Table 5.1: Government health budget and expenditures, 2001-07 ...........................................................102 Table 5.2: Government health budget and expenditures by category, 2006.............................................103
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