Language: English Original: French
AFRICAN DEVELOPMENT BANK
PROGRAMME : GREEN MOROCCO PLAN SUPPORT PROGRAMME
COUNTRY : KINGDOM OF MOROCCO
APPRAISAL REPORT
June 2012
Team Leader : Rafâa MAROUKI, Principal Agro-economist, OSAN.1 Team Members : Williams DAKPO, Regional Coordinator, ORPF.1 Laurette DADE, Regional Coordinator , ORPF.2 Laouali GARBA, Environmentalist, OSAN.4 Appraisal Team Driss KHIATI, Agricultural Expert, MAFO Mohamed EL ARKOUBI, Procurement Specialist, MAFO Sector Director: Abdirahman BEILEH, Acting Director, OSAN Region Director: Nono MATONDO, ORNB Sector Division Manager: Abdoulaye DAGAMAISSA OSAN.1
Mohamed OULD TOLBA, Chief Agro-economist, OSAN.1 Mohamed Aly OULD CHEICKH AHMED, Irrigation Specialist, OSAN.2 Peer Reviewers Achraf TARSIM, Macro-economist, OSGE.1 Emanuel DIARRA, Principal Economist, MAFO Boubacar-Sid BARRY, Operations Officer, MAFO
TABLE OF CONTENTS
Currency Equivalents/Fiscal Year/Weights and Measures ...... i Acronyms and Abbreviations ...... ii Loan Information ...... iii Executive Summary ...... iv Programme Logical Framework ...... vi Programme Implementation Schedule ...... viii
I The Proposal ...... 1
II Country and Programme Context ...... 1 2.1 Government’s Development Strategy and Medium-Term Reform Priorities ...... 1 2.2 Recent Socio-economic Developments, Prospects, Constraints and Challenges ...... 2 2.3 The Sector and Related National Development Programme ...... 3 2.4 Status of Bank Group Portfolio ...... 5
III Rationale, Main Elements of Programme Design and Sustainability ...... 6 3.1 Linkages with the CSP, Assessment of Country Preparedness and Underlying Analytical Elements ... 6 3.2 Collaboration and Cooperation with Other Donors ...... 9 3.3 Results of Similar Completed or Ongoing Operations and lessons learnt ...... 10 3.4 Linkages with other Bank Operations ...... 11 3.5 Bank’s Comparative Advantages...... 12 3.6 Application of Good Practices Principles as regards Conditionalities ...... 12
IV Proposed Programme ...... 12 4.1 Programme Objectives...... 12 4.2 Programme Components and Expected Outcomes ...... 13 4.3 Financing Requirements and Arrangements ...... 17 4.4 Programme Beneficiaries ...... 17 4.5 Impact on Gender ...... 18 4.6 Environmental Impact ...... 18 4.7 Impact on Capacity and Institution Building ...... 19
V Programme Implementation, Monitoring and Evaluation ...... 19 5.1 Implementation Arrangements ...... 19 5.2 Monitoring and Evaluation Arrangements...... 20
VI Legal Instruments and Authority ...... 20 6.1 Legal Instruments ...... 20 6.2 Conditions Associated with Bank’s Involvement ...... 20 6.3 Compliance with Bank Policies ...... 21
VII Sustainability and Risk Management ...... 21 7.1 Sustainability ...... 21 7.2 Potential Risk Management ...... 21
VIII Recommendation ...... 22
______This report was prepared by Mr. R. MAROUKI, Principal Agro-economist OSAN.1 following an appraisal mission to Morocco from 13 to 25 February 2012. It also received inputs from sector experts, namely: William DAKPO [ORPF.1], Laurette DADE [ORPF.2], Laouali GARBA [OSAN.4], Driss KHIATI [MAFO], Mohammed EL ARKOUBI [MAFO], as well as close discussions with the Programme Preparation and Appraisal Committee and various Government entities involved.
This document is for official use only. Its content shall not be disclosed without the authorization of the African Development Bank. i
ANNEXES Appendices
Appendix 1: Government’s Sector Development Policy Letter 9 Appendix 2: Matrix of Programme Measures 7 Appendix 3: Conditions Precedent to Budget Support 3 Appndix 4: Key Macro-economic Indicators 1 Appendix 5: Status of Donor Support for the Green Morocco Plan 1 Appendix 6: Bank’s Ongoing Operations Portfolio in Morocco 1
Technical Annexes: Volume 2
Annex 1: Analysis of Proposed Reforms by Component Annex 2: Environmental and Social Assessment (ESA and ESMP) Annex 3: Fiduciary Risk Assessment Annex 4: Procurement Annex 5: List of Legal Instruments and PAPMV Planned Studies Annex 6: PAPMV Performance Measurement Framework Annex 7: Changes in MAPM Budget from 2001 to 2011 Annex 8: Ministry of Agriculture’s Medium-Term Expenditure Framework
List of Boxes and Illustrations Box 1: Brief Presentation of PMV Status and Expected Impacts Figure 1: Sector Breakdown of Bank Operations
List of Tables
Table 1: Main Linkages between PAPMV and other Bank Operations Table 2: Budget Balance and Financing Requirements 2012-2014 Table 3: External Financing of Green Morocco Plan (PMV)
Currency Equivalents May 2012
UA 1 = MDH 13.0697 EUR 1= MDH 11.1382 UA 1 = EUR 1.17341 USD 1 = MDH 8.4300
Fiscal Year 1 January – 31 December
Weights and Measures
1 kilometre (km) = 1000 m 1 km2 = 1000 m2 1 hectare (ha) = 10 000 m2 1 ton = 2204 pounds (lbs) 1 kilogram (kg) = 2.200 lbs 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = 0.03937 inch (“) 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.47 acres
ii
Acronyms and Abbreviations
ADA : Agency for Agricultural Development ADEREE : Agency for Renewal Energy Development and Energy Efficiency ADB : African Development Bank AFD : French Development Agency APMV : Support for Green Morocco Plan AUEA : Agricultural Water Users’ Association BAM : Bank Al-Maghrib (Central Bank of Morocco) WTC : Water Table Contract CSP : Country Strategy Paper DPA : Provincial Directorate of Agriculture DRA : Regional Directorate of Agriculture DSS : Directorate of Strategy and Statistics ESMMP : Environmental and Social Management Master Plan EU : European Union FAO : Food and Agriculture Organization of the United Nations FDA : Agricultural Development Fund RM : Road Map FTA : Free Trade Agreement GM : Government of Morocco IBRD : International Bank for Reconstruction and Development IGA : General Inspectorate of Agriculture IGF : General Inspectorate of Finance IL : Localized Irrigation INRA : National Institute of Agricultural Research MAFO : Morocco Country Office MAPM : Ministry of Agriculture and Sea Fishery MDG : Millennium Development Goal MDH : Moroccan Dirham ME : Monitoring and Evaluation MEF : Ministry of Economy and Finance MEMEEE : Ministry of Energy, Mines, Water Resources and Environment MTEF : Medium-Term Expenditure Framework NAMA : Nationally Appropriate Mitigation Actions PSO : Programme Support Operation ONSSA : National Food Safety Authority OPA : Agricultural Professional Organization ORMVA : Regional Agricultural Development Authority PAPMV : Green Morocco Plan Support Programme PAR : Regional Agricultural Plan PMV : Green Morocco Plan PNEEI : National Irrigation Water Conservation Programme PPP : Public-Private Partnership SESA : Strategic Environmental and Social Assessment SGG : Secretary General of the Government TFP : Technical and Financial Partners UA : Unit of Account VAT : Value Added Tax iii
LOAN INFORMATION
Client Information
BORROWER: KINGDOM OF MOROCCO
EXECUTING AGENCY: Ministry of Agriculture and Sea Fishery (Directorate of Strategy and Statistics)
Financing Plan
Source of Financing Amount (EUR) Instrument
ADB EUR 105 Million ADB Loan
Key Information on ADB Financing (to be confirmed during negotiations)
Loan Currency Euro (EUR) Type of Interest Rate : Floating base rate with a free fixing option Base Rate (Floating) 6-month Euribor Contractual Margin 60 base points (bps) Lending Margin : Bank lending margin in relation to the 6- month Euribor. This margin is revised every year on 1 January and 1 July. Commitment Charge In the event of disbursement delays with reference to the initial schedule (specified in the loan agreement) a commission of 25 bps per annum will be applied to the undisbursed amounts. This charge will be increased by 25 bps every six months up to a maximum of 75 bps per annum. Other Charges None Tenor 20 years maximum Grace Period 5 years maximum
Schedule – Main Programme Milestones
Activities Date 1. Concept Note Approval 8 February 2012 2. Loan Agreement Negotiations 3-4 July 2012 3. Board Presentation 18 July 2012 4. Effectiveness September 2012 5. Disbursement of First Tranche October 2012 6. Supervision December 2012 7. Mid-Term Review June 2013 8. Disbursement of Second Tranche October 2013 9. Supervision September 2013 10. Completion Report June 2014
iv
EXECUTIVE SUMMARY OF THE PROGRAMME
1. Programme Overview 1.1 This programme document proposes a reform support loan for the agricultural sector in support of the Green Morocco Plan (PMV) targeting particularly agricultural water. The programme’s main characteristics are as follows: Programme Name : Green Morocco Plan Support Programme (PAPMV) Geographic Coverage : Nationwide Overall Duration : 24 months Financing : ADB loan : EUR 105 million (equivalent to UA 90 million) in two tranches Programme Type : Sector Budget Support 1.2 The idea of this Green Morocco Plan Support Programme (PAPMV) was initiated during the CSP 2007-2011 completion report preparation mission to Morocco in March 2011 when the Government of Morocco (GM) and the Bank showed common interest in promoting green growth1 by providing support to the PMV. The programme design took into consideration the lessons learned and good practices of completed and on-going budget support programmes (PASEAU, PARCOUM, PARAP, PADESFI, PUEN, etc.), particularly concerning design, targeting of measures and conditionalities. The programme design was based on a concerted approach actively involving stakeholders right from programme identification (various administrative and professional entities, private sector, etc.) and an integrated framework to enhance synergies and possible complementarities between agricultural, water, environmental and energy strategies to better support the PMV. The Bank’s loan will be disbursed in two tranches over the 2012-2013 period. The two tranches are justified by the type of reforms to be undertaken, the reduction of transaction costs, the enhancement of efficiency and the country’s strategic attachment to the reforms of the second tranche. The first tranche of EUR 60 million will be disbursed in October 2012 following fulfilment of the related conditions. The second tranche of EUR 45 million will be disbursed in October 2013 after a mid-term review of the programme and fulfilment of conditions relating to this tranche. 1.3 With respect to the Bank’s strategies, the programme is consistent with: (i) the Bank’s Long-Term Strategy and Medium-Term Strategy (2008-2012) ; (ii) the CSP (2012-2016); (iii) the Agricultural Sector Strategy (2010-2014); and (iv) the integrated water resources management policy. In terms of the country, it is in line with the new Government’s strategy (2012-2015), and particularly falls within the strategic framework of: (i) the Green Morocco Plan (2008-2020) ; (ii) the National Water Strategy (2009-2030) ; (iii) the Environmental and Sustainable Development Charter (2010-2030); (iv) the New National Energy Strategy (2008-2020); and (v) the Industrial Emergence Plan (2009-2015). 2. Expected Programme Outcomes 2.1 This Programme seeks to support the implementation of the Green Morocco Plan – PMV [2008-2020] by providing targeted assistance for the sustainable management, development and conservation of agricultural water within a context of growing scarcity of this resource. The strategic objective of the programme is to contribute to strengthening the competitiveness of the agricultural sector for inclusive economic growth. The specific objective is to improve the business climate and ensure sustainable agricultural water management. The expected programme outcomes concern the improvement of the institutional framework for agricultural water management and development in line with the guidelines of the Green Morocco Plan. It will focus on reform measures targeting the following four complementary components: (i) support for the modernization of irrigation infrastructure; (ii) improvement of agricultural water governance and sustainable management; (iii) promotion of the business climate and agricultural water development; and (iv) promotion of gender, water resources protection, and energy conservation.
1 Growth ensuring complementarity and synergy between the economic, social, environmental and institutional components of sustainable development v
3. Needs Assessment 3.1 The Bank has a special interest in the cross-cutting issue of agricultural water for the PMV and the strategic guidelines outlined by the New National Water Strategy and other strategies (industrial emergence, environment charter, energy strategy, etc.). This interest is justified by the fragility of this resource and its importance for the economy. In fact, Morocco, which is considered as a water stress country, is facing high pressure on its water resources which may worsen under the effect of climate change. Agricultural water is a vital resource to be preserved and managed efficiently and sustainably because: (i) irrigation is water intensive (consumes 80% to 85% of mobilized water resources); (ii) losses related to conventional irrigation systems are significant; and (iii) mobilized water resources are under-utilized. 3.2 The programme, which takes the Bank’s comparative advantages, the need for continuity and consolidation of achievements, as well as complementarity with other donors into consideration, is needed to: (i) support the GM in the agricultural water reforms undertaken; (ii) support strategic agricultural water planning efforts; (iii) improve water governance through increased involvement of the stakeholders and promotion of public-private partnership in irrigation; (iv) make the agricultural sector play a decisive role by improving the business climate through the promotion of value chains for the development of agricultural water; and (v) promote gender, protect water resources and develop combined energy and water conservation initiatives so as to enhance the impact of the PMV on inclusive growth and environmental protection, and make it “doubly green”. 4. Bank’s Value Added In view of the Bank’s great experience in budget support in various sectors in Morocco, and the experience acquired in the area of Water, Environment and Energy, it is capable of supporting this inter-sector operation geared towards improved integration and coherence of measures. This operation will be an opportunity to foster complementarity and synergy between: (i) the various national departments concerned; (ii) the various instruments developed by the Bank (budget support to initiate reforms targeting agricultural water, investment loan to support infrastructure related to irrigation water conservation provided under PAPNEEI, and technical support to back up investments and reforms); and (iii) the operations of other development partners, particularly the World Bank, the European Union, and the French Development Agency, supporting the PMV. Indeed, the proposed reforms will help to support investments in on-going and planned operations, as well as consolidate their impacts in terms of agricultural water management, development and protection. 5. Institution and Knowledge Building PAPMV will contribute to institution building of the public administration, grass-roots associations, professional organizations and the private sector. In particular, the preparation and implementation of planning (Road Map, Irrigation Map, studies, etc.), management (demand management, integrated water resources management, etc.), development (agropolis, etc.), protection (Regional Observatories for the Environment, NAMA, etc.) and business climate promotion (agricultural insurance, FDA incentive mechanism, etc.) tools, as well as the various draft statutory instruments provided for by PAPMV contribute to knowledge and capacity building. vi
EXPECTED RESULTS-BASED LOGICAL FRAMEWORK
Country and Programme Name : Morocco – Green Morocco Plan Support Programme– (PAPMV) Programme Goal: Contribute to strengthening agricultural sector competitiveness for inclusive economic growth by improving the business climate and sustainable agricultural water management.
PERFORMANCE INDICATORS RISKS MEANS OF RESULTS CHAIN Baseline /MITIGATION Indicators Target VERIFICATION Situation MEASURES
Agricultural sector Increase in agricultural MDH 10 MDH 18 billion in Reports of the Ministry of productivity and export value billion in 2011 2014 and 44 billion in Trade and Ministry of the competitiveness are 2020 Economy and Finance
improved (MEF) IMPACT 1. Planning and Availability of planning Not available SIG Irrigation SIG Irrigation Risks implementation of tools (NA) established before June DIAEA/MAPM Reports Agricultural Water 0 2014 - Inadequate inter-sector and (AW) infrastructure are Equivalent additional DIAEA/MAPM Reports inter-TFP coordination capacity improved volume of water saved At least 360 Mm3 saved - Socio-political context (PEEI & PEI) in 2014 - Vagaries of the weather and 2. Agricultural water Public-private partnership PPP Road RM and Feasibility RM and Feasibility study of extreme events governance is (PPP) options in PI Dar Map (RM) not Study of a PPP a PPP in irrigation enhanced Khroufa irrigation available available before June Mitigation Measures validated 2014 AUEA Capacity Building Plan/ AUEA performance - Establishment of a Steering
Increase in the number of 0 At least 15% of status Committee at MEF and
efficient AUEA AUEA are efficient in strengthening of the 2014 Agriculture/PMV Thematic 3. Investment Additional private 0 At least MDH 5 billion PMO/ programme contracts Group, environment and water investments in Sub-Sector in 2014 DDFP - Government’s reform productivity are Programme Contracts measures
OUTCOMES improved - PMV measures: insurance, Additional value added 0 At least MDH 400 Study on DIAEA value water management, and generated by water million in 2014 added localized irrigation development conservation investments (MDH) 4. The social, Additional work positions 0 5 000 additional work GE and Youth Action Plans environmental and for women and youths positions created by PMO of DDFP energy dimensions of 2014 the PMV are reinforced Number of Regional Observatories for the - At least 12 OREDD OREDD Progress Reports Environment and DD functional in 2014 functional
COMPONENT 1 : SUPPORT FOR THE MODERNIZATION OF IRRIGATION INFRASTRUCTURE Risks 1.1 Irrigation Road Map (RM) and NA RM and CNI available RM and CNI infrastructure planning National Irrigation Map in 2014 - Overexploitation of water instruments are (CNI) resources available - Marginalization of some PNEEI and PEI NA Monitoring-evaluation Monitoring-evaluation groups of players monitoring-evaluation system established system system before June 2014 Mitigation Measures
1.2 PNEEI, PEI and PNEEI, PEI and PMH NA Studies on the Feasibility studies of - Inter-sector consultations on PMH programme programme development development of development projects water development studies studies 196,750 ha prepared - Specific inclusion mechanisms are available before June 2014 1.3 Integrated planning Integrated agricultural Non-existent Integrated Planning Integrated Planning coordination water planning Committee functional Committee Minutes and mechanism is coordination mechanism in 2013 Report established established
COMPONENT 2 : IMPROVEMENT OF AGRICULTURAL WATER GOVERNANCE AND SUSTAINBLE MANAGEMENT Risks 2.1 Water service Reform impact study NA Study prepared in 2013 Study Report reforms are - Differing interests of NA stakeholders consolidated Road Map of ORMVA Road Map of Reforms Road Map of ORMVA - Lack of support from users OUTPUTS Reforms prepared in 2013 Reforms
2.2 AUEAs are AUEA capacity building NA Programme AUEA Capacity Building Mitigation Measures strengthened programme implemented before Programme -Sensitization and
June 2014 communication Good Localized Irrigation NA Guide / DIAEA statements Practices Guide prepared Guide prepared in 2012 on the dissemination of the - Study on the political impact and disseminated and disseminated in Guide of reforms (PPP, AUEA) 2013 2.3 Integrated Water Water Table Contract 1 2 studies conducted and Studies finalized and Resources 2 contracts signed in contracts signed Management (IWRM) Road Map for artificial NA 2013 Road map for artificial water is strengthened water table recharge Road Map for artificial table recharge
recharge prepared in Master plan on TWW use NA 2013 Master Plan for TWW use in irrigation in irrigation available Master Plan prepared in 2013 vii
COMPONENT 3 : PROMOTION OF THE BUSINESS CLIMATE AND DEVELOPMENT OF AGRICULTURAL WATER 3.1 Investment climate Number of aggregation 46 226 before June 2014 ADA aggregation status improved projects subsidized DFDP & Contract Status Average rate of marketing 10% 40% before June 2014 Developer/Enterprises of Meknès and Berkane agropolis lots
Number of sub-sectors DF status & Insurer’s Risks insured 1 At least 5 sub-sectors Portfolio (MAMDA) Differing interests of insured in June 2014 stakeholders DF status & Insurer’s Low support from the private Number of risks covered 1 5 risks covered by Portfolio (MAMDA) sector and inter-trade by Agricultural Insurance Agricultural Insurance organizations in June 2014 3.2 Value added of a Number of certified 11 20 products carry a seal DDFP status Mitigation Measures cubic metre of water products of approval before June Sensitization and increased 2014 Status of DDFP/ PMO communication Organic Product Programme Consultation framework and Additional surface areas 0 3 000 ha in June 2014 Contract arbitration mechanisms converted into organic products Status of DDFP/ PMO Organic Product Programme Quality of organic 8, 000 16 000 in June 2014 Contract products exported (T) MAPM/DEFR Number of private advisors 0 200 in June 2014 accredited COMPONENT 4 : PROMOTION OF GENDER, WATER PROTECTION AND ENERGY CONSERVATION Risks : 4.1 Gender Equality Study and Action Plan for NA Study and Action Plan DEFR Study and Action (GE) mainstreamed mainstreaming gender into prepared in 2013 Plan Socio-cultural resistance into MAPM the PMV NA Disaggregated ME Availability of a system established in ADA and MAPM statistics disaggregated (men, 2013 and surveys Mitigation Measures women and youths) : 0 At least 100 trained and monitoring –evaluation 50 settled in 2014 ADA and DEFR Progress system Sensitization/training about 40% of them Reports Political support Trained and settled young girls graduates 4.2 Energy Regional Biomass Master 0 4 Master Plans ADEREE Report conservation options in Plans prepared prepared at end-2012 agriculture identified Energy audits conducted 0 10 audits of agro- ADEREE Report industrial units and 5 audits of farms Energy Performance Plan conducted in 2012 (EPP) implemented 0 At least 10 EPPs for ADEREE Report agro-industrial units and 5 for AW in 2013 4.3 Water resources Framework Law on the NA Framework Law and Reports of the Environment protection strengthened National Environment and implementing Department and effects of climate DD Charter in force instruments adopted change mitigated before end-2013 PMV Strategic NA ADA/ESMMP Environmental and Social An Environmental and Assessment finalized Social Management Master Plan A NAMA on agriculture implemented in 2013 Department of available NA Environment/ NAMA A NAMA developed Reports and finalized in 2013
Financing : ADB Loan : UA 90 million (Equivalent to EUR 105 million)
viii
PAPMV IMPLEMENTATION SCHEDULE
Description of Activities 2012 2013 2014 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 1. Loan Review 1.1 Appraisal 1.2 Loan Negotiations 1.3 Loan Approval 1.4 Loan Signature 1.5 Loan Effectiveness 1.6 Authorization of 1st Disbursement 2. Programme Implementation
2.1 Implementation of First Tranche Measures T1 Reforms T1 Reform Impacts
2.2 Implementation of Second Tranche Measures T2 Reforms T2 Reform Impacts 3. Programme Supervision and Monitoring 3.1 Bank Supervision 3.2 Auditing 3.3 Mid-Term Review 4. Programme Completion 4.1 Preparation of Programme Completion Report by the Moroccan Government 4.2 Preparation of Programme Completion Report by the Bank
REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL FOR A LOAN TO THE KINGDOM OF MOROCCO TO FINANCE THE GREEN MOROCCO PLAN SUPPORT PROGRAMME (PAPMV) I THE PROPOSAL 1.1 Management hereby submits the following proposal concerning the grant of a EUR 105 million loan (equivalent to UA 90 million) to the Kingdom of Morocco to finance the Green Morocco Plan Support Programme (PAPMV). It is a sector budget support to be implemented over a 24-month period (July 2012- July 2014). The idea of the Green Morocco Plan Support Programme (PAPMV) was initiated during the Bank’s CSP 2007-2011 completion report preparation mission to Morocco in March 2011. During this mission, the Moroccan Government (GM) and the Bank showed common interest in promoting green growth by providing support to the Green Morocco Plan (PMV) considering its strategic importance for the country. Based on the Bank’s comparative advantages, the need for continuity and consolidation of achievements, as well as complementarity with other partners1, a decision was taken to refocus the programme on agricultural water. In this regard, a preparation mission was fielded from 19 to 30 September 2011, followed by an appraisal mission from 13 to 25 February 2012. The programme design was based on a participatory and integrated process2 which included the establishment of an Interdepartmental Committee and a stimulating innovative ideological debate proposing a combination of water conservation and energy conservation, as well as consideration of socio- economic, environmental and institutional dimensions so as to enhance the impact of the PMV and make it “doubly green”. It also took into account lessons learned and good practice principles of completed and on-going budget support programmes (PASFI, PASEAU, PARCOUM, PARAP I to IV, PADESFI I and II, PUEN, etc.), particularly concerning design, targeting of measures and conditionalities. 1.2 The PAPMV seeks to support the implementation of the Green Morocco Plan - PMV [2008-2020] by providing targeted support for the sustainable management, development and conservation of agricultural water within a context of growing scarcity of this resource. Its strategic objective is to contribute to strengthening the competitiveness of the agricultural sector for inclusive economic growth. Its specific objective is to improve the business climate and ensure sustainable agricultural water management. Following a “logical chain” of events, the PAPMV will target four series of reforms for agricultural water : (i) Reforms aimed at modernizing agricultural water infrastructure and strategic management; (ii) Reforms aimed at improving agricultural water governance and sustainable management; (iii) Reforms aimed at improving agricultural water productivity and development, as well as the business climate; and (iv) Reforms aimed at promoting gender, water resources protection and energy conservation. II COUNTRY AND PROGRAMME CONTEXT 2.1 Government’s Development Strategy and Medium-Term Reform Priorities 2.1.1 The Moroccan authorities have, for many years now, embarked on a far-reaching reform programme aimed at laying the foundation for rapid and balanced growth that can absorb economic and social deficits. The new Government formed after the legislative elections of November 2011 has, following the “Arab Spring” events, laid emphasis on inclusive development. The Government’s Agenda (2012-2016) presented to Parliament in January 2012
1 The Bank’s budget support targeted the PMV’s cross-cutting issue (agricultural water), while the World Bank support targeted Pillars 1 and 2 and that of the EU and AFD Pillar 2 of the PMV.
2 As soon as the PAPMV was identified, an Interdepartmental Committee was set up to jointly conduct its preparation and appraisal. This Committee will be consolidated to pursue the programme implementation and monitoring. 2 focused on commitments structured around five major pillars: (i) strengthening of the unified national identity; (ii) consolidation of the rule of law, advanced regionalization, and good governance; (iii) establishment of a competitive and diversified economy; (iv) development and implementation of social programmes; and (v) strengthening of Morocco’s position in the international community. 2.1.2 It is within this context that Morocco has initiated far-reaching structural and sector reforms, including in agriculture1. The Green Morocco Plan was prepared and validated in April 2008 by the Moroccan authorities to implement these reforms and promote investments so as to: (i) give the agricultural sector a fresh impetus; (ii) address new challenges (food crisis, job opportunities, fragility of resources, etc.) and develop potential as much as possible; and (iii) integrate the production system and support the profound changes in the agro-industrial system. 2.2 Recent Socio-economic Developments, Prospects, Constraints and Challenges 2.2.1 Recent Economic Developments: Morocco has embarked on far-reaching structural reforms to boost growth2 which stood at 4.8% in 2011. Per capita income almost doubled over the past decade to USD 2 939 in 2010. Medium-term growth prospects are good, and are based on the commitment of the authorities to consolidate the economy’s resilience by pursuing reforms and implementing sector strategies to boost domestic demand. However, Morocco is confronted with two major challenges, namely uncertainties associated with the present political context of North Africa and the debt crisis in the Euro zone, Morocco’s main trading and financial partner. The budget deficit (including grants) is expected to remain high in 2012, at 5% of GDP, before declining to the target of 4% of GDP set by the Government. The main reason for this trend is the increase in the wage bill that accounts for more than 11% of GDP; the increase is the Government’s response to the 2011 labour demands3. Inflation has been contained, standing at 0.9% in 2010 and 2011, after the 3.7 % recorded in 2008 due to the rise in food prices. Morocco’s external position is also in the red, with a current account deficit representing 6.5% of GDP and declining official reserves representing 5.2 months of imports in 2011. Nevertheless, the quality of debt management earned Morocco an improvement of its rating by Standard & Poor’s4, maintained after the legislative elections in December 2011. 2.2.2 The effort to integrate the Moroccan economy into the global economy was pursued with the signing of many free trade agreements (FTA) which resulted in the recent “advanced status” granted by the EU. Concerning the business climate and competitiveness, recent assessments show that the country is increasingly in line with international best practices. According to the “Doing Business” 2012 Report, Morocco gained 20 places, climbing up from the 115th to the 94th place out of 183 countries, and according to the Global Competitiveness Report 2011-2012, Morocco gained two places, from 75th place to 73rd out of 142 countries, with a score of 4.16 on 7, compared to 4.08 in 2010.
1 Other reforms concerned the environment, energy, the private sector, the financial sector, social sectors, privatization of public enterprises, the new law on public procurement, the law on competition, the liberalization of the financial and transport sectors, launching of judicial reform, administrative reform, etc. 2 The average annual growth rate reached 4.9% during the 2004-2011 period, that is double the average rate of the preceding decade, despite an unfavourable environment (drought in 2007 and economic and financial crisis in 2008). 3 In particular, purchasing power support notably by increasing subsidies on staple products; increasing salaries and pensions; and passing a law aimed at facilitating the school-to-work transition of young graduates. 4 The sovereign credit rating of long-term debt in foreign exchange dropped from BB+ to BBB- and that of long-term debt in local currency rose from BBB to BBB+, with stable prospects. 3
2.2.3 Poverty Situation: Concerning the fight against poverty, Morocco recorded good performance, with the reduction of the national poverty rate from 15.3% in 2000 to 9% in 2010. However, the poverty rate remains high in rural areas (14.5%) compared to only 4.8% in urban areas in 2010. Indeed, although the rural population represents only 46% of the total population, the rural areas have two-thirds (2/3) of the poor. The income of 80% of the rural poor is derived from agriculture. The national literacy rate is low (59.5% in 2008). It is very low in rural areas (43.3%), among women (48.1%) and people aged over 50 years (28.2%). Women’s involvement in economic activity is still limited, with a national activity rate of 27.9% against 76.9% for men. The youth unemployment rate is high (31.6%). In 2010, the net primary enrolment ratio was 96.4%, while the girl/boy primary enrolment ratio stood at 97.9%. The secondary school completion rate also improved, rising to 64.6% as against 48% in 2008/2009. Concerning health, the infant and child mortality rate (30.5 deaths per 1000 live births in 2011) and the maternal mortality rate (112 deaths per 100 000 live births in 2011) are still high, despite the progress made as a result of the implementation of the basic health coverage reform programme for the most disadvantaged people. The second phase (2011-2016) of the National Human Development Initiative (INDH), which was launched in May 2005 and has recorded positive results, particularly significant progress towards the achievement of MDGs, will pursue efforts to reduce social disparities. 2.2.4 Prospects, Constraints and Challenges: The GM intends to pursue the reforms initiated in recent years, in order to consolidate economic growth and implement the ambitious public investment programmes that it formulated. It will also continue to implement the main sector strategies launched to boost economic diversification and growth potential. In this connection, the PMV is a key instrument of the GM’s strategy as agriculture is a sector with high productivity and job creation potential. It contributes to the GM’s effort to address major challenges, namely: (i) regional disparity, persistent vulnerability and high level of unemployment, particularly among youths; (ii) fragility of resources (especially water). Morocco is confronted with sustainable natural resources management problems related particularly to pressure on water resources, overexploitation of groundwater and arable land, atmospheric pollution and overgrazing and deforestation. The scarcity of water resources is a major constraint in view of the combined effects of the country’s increasing needs due to population pressure and the requirements of competing sectors (drinking water, agriculture, tourism, industry, etc.), as well as effects that could be generated by climate change. Farming and management methods expose these resources to increasing fragility; (iii) inadequate diversification of exports and their high concentration on European markets; (iv) a business climate that is not so attractive; (v) the effects of climate change. Over the past thirty years, Morocco has had to grapple with 20 dry years, with 3 episodes of drought each of which lasted four consecutive years. This situation has weakened the country, and put it in the group of water stress countries. Consequently, Morocco has to address the challenges posed by the scarcity of water resources. 2.3 The Sector and Related National Development Programme 2.3.1 The agricultural sector’s importance is reflected in its remarkable contribution to the country’s GDP formation (15 % to 20 %) and job creation (40 %), especially in rural areas where agriculture remains the leading provider of jobs (80 %) and the main source of income (1.5 million farmers). Over the past ten years, the average annual agricultural GDP growth rate has been +3.98 %. Food exports account for 19% of the country’s total exports. Irrigated areas contribute significantly to agricultural value added. 2.3.2 Morocco’s climatic conditions have always made irrigation a technical and economic requirement which, over the years, has acquired very important socio-economic dimensions. Irrigation has stood out as the sure way of developing agriculture and, consequently, received special attention from the Government. Irrigated agriculture contributes significantly to meeting the increasing food needs of the population and generating local employment. Although irrigated areas represent only 15.7% of the country’s crop area, they account for 45% of agricultural value 4 added (and even 75% in the event of a bad crop year) and 75% of total agricultural exports. They also help to provide about half the employment in the agricultural sector. Consequently, irrigated agriculture is a real catalyst of local development through increased incomes and improvement of the living conditions of the rural population, construction of infrastructure and development of services related to agriculture and agro-industry. 2.3.3 Irrigated areas cover a total surface area of 1.46 million hectares, 70% (1.02 million ha) of which are developed with public funds (State) and 30% (0.44 million ha) with private funds (farmers, private companies, etc.). In Morocco, there are three types of irrigation areas: (i) Large- Scale Waterworks Area (GH): covers 880 000 hectares of perennial irrigable potential. At present, the total GH surface area developed is 682 600 ha. It covers nine major irrigation areas whose irrigable surface area ranges from 30 000 to 25 000 ha per area. Irrigation facilities are developed and managed by the State through nine Regional Agricultural Development Authorities (ORMVA)1. Flow irrigation2 is the dominant method of irrigation in these areas and represents 78% of the irrigated surface area, while spray irrigation covers 16% and localized irrigation only 6% of the irrigated surface area ; (ii) Small-and-Medium-Scale Waterworks Area (PMH): currently covers a total surface area estimated at 340 000 hectares of perennial irrigation and 300 000 hectares of seasonal and flood irrigation (areas whose surface area varies from a few dozen and a few thousand hectares) ; (iii) Private Irrigation (IP) : covers surface areas developed for irrigation by the private sector (farmers, companies, etc.), and increasingly contributes to the extension of irrigated areas. It covers nearly 441 400 hectares. 2.3.4 The development of irrigated agriculture in Morocco is confronted with a two-fold challenge : (i) improving the performance of irrigated agriculture to ensure the conservation and enhanced development of water and the sustainability of irrigation systems ; (ii) extending irrigation, particularly to areas dominated by certain dams, as part of a countrywide harmonious water policy and within a context of scarce water resources compounded by climate change and competition with other sectors. 2.3.5 The Green Morocco Plan -PMV (2008-2020), approved by the Moroccan Government in April 2008, is a comprehensive development strategy aimed at transforming the agricultural sector into a stable source of growth and employment, improving competitiveness, and promoting more diversified economic development. It is the Road Map (RM) for implementing a series of reforms and structuring investments in the agricultural sector. The PMV comprises two pillars : (i) Pillar 1 concerns the development of modern, efficient and high value-added agriculture in line with marketplace rules and based on private investments [financing of 700 to 900 projects/export- oriented productivist model] ; (ii) Pillar 2 concerns support for smallholder agriculture of a social nature in areas with fragile ecosystems (oasis, mountainous , etc. areas) by improving the incomes of the most vulnerable farmers [300 to 400 social projects under a regional plan aimed at converting vulnerable farmers to viable activities backed by training and supervision]. Concurrently with these two pillars, the PMV lays emphasis on crucial cross-cutting issues such as agricultural water, the occupation, land tenure, etc. Concerning agricultural water, the PMV adopts targeted reforms and proposes the implementation of two strategic programmes: (i) the first, which is as urgent and known as the National Irrigation Water Conservation Programme (PNEEI), seeks to convert conventional irrigation to localized irrigation, as well as improve the irrigation water service and promote conservation techniques and farming systems that ensure better use of water on an overall surface area of 555 000 hectares ; (ii) the second, known as the Irrigation Extension Programme (PEI), seeks to bridge the gap created by surface areas dominated by dams covering an overall surface area of 190 000 ha. Special attention is also paid to the Small-Medium-Scale Waterworks Area (PMH).
1 Public Establishments: Moulouya, Loukkos, Gharb, Doukkala, Haouz, Tadla, Souss-Massa, Tafilalet and Ouarzazate. 2 Conventional irrigation method characterized by low network efficiency and enormous water losses. 5
2.3.6 The Green Moroccan Plan (PMV) is an ambitious strategy aimed at ensuring inclusive and sustainable development. Its objective is to make the agricultural sector a real lever of socio- economic development, particularly for job creation, poverty reduction and environmental protection. The PMV advocates an innovative approach based mainly on: a systemic perspective that integrates the production process and all the stakeholders (transition from production based completely on farms to irrigated and high value-added agriculture that promotes key sub-sectors and the agro-industrial value chain); (ii) good central and regional governance; (iii) promotion of strategic alliances with the private sector; (iv) promotion of partnership with the agricultural occupation. To give the agricultural sector fresh impetus for investment, the PMV proposes a series of reforms and institutional instruments (overhauling of the sector framework, reorganization of public services, reform of professional entities, reform of agricultural credit, reform of agricultural water services, adoption of the programme contract approach, etc.). Box 1: Brief Presentation of PMV Status and Expected Impacts 1.1 Since the PMV was launched, the Moroccan Government has initiated important institutional reforms and taken appropriate measures to finance structuring programmes. Thus, the MAPM set up 16 Regional Directorates of Agriculture (DRA) to decentralize services, restructured the Chambers of Agriculture (reduction of their number from 37 to 16) and inter-trade organizations, established the Agency for Agricultural Development (ADA) to manage PMV implementation and the National Food Safety Authority (ONSSA) to monitor sanitary standards, developed 16 Regional Agricultural Plans, restructured MAPM services, signed the Medium-Term Expenditure Framework (MTEF) 2009-2015 in April 2009 with the Ministry of the Economy and Finance (MEF) for financing requirements estimated at USD 17 billion, signed 14 Programme Contracts with the Joint Strategic Agro-Food Sub-sector Organization, launched the aggregation model (conclusion of trilateral contractual arrangements between aggregators (public and private economic operators), the aggregated (producers) and the GM, launched the reform of agricultural credit and the incentive scheme (Agricultural Development Fund-FDA), etc. The MAPM also steered the approval of the Agricultural Free Trade Agreement (AFTA) by the European Parliament, thus helping to provide bright prospects. 1.2 The major expected impacts of the PMV by 2020 are : (i) Target 1.4 million farmers; (ii) Agricultural value-added multiplied by 2.5; (iii) Creation of 1.5 million jobs: (iv) Increase in exports from 1.35 million to 4.6 million tonnes (that is +254%); (v) 1500 projects implemented under 16 Regional Agricultural Plans (PAR); and (vi) Overall investment of MDH 147 billion, including MDH 66.3 billion (about EUR 6.2 billion) of public funds.
2.4 Status of Bank Group Portfolio The Bank’s active portfolio in Morocco, the Fig.1 : Breakdown of Operations by Sector details of which are presented in Appendix 5, comprises 25 operations, with 15 loans and 10 grants for net commitments of about EUR 1.7 billion. The infrastructure sector (transport, energy and mining, water and sanitation, irrigation, etc.) continues to be predominant in the portfolio (17 operations and 86.5% of commitments), followed by governance or multi-sector (4 operations and 13.5% of commitments) and the social sector (1 operation and 0.1% of commitments) [see Fig. 1]. The two private sector operations represent 11.4% of the active portfolio and concern: (i) USD 250 million loan to Office Chérifien des
Phosphates (OCP) approved in June 2011; and (ii) EUR 15 million equity participation, approved in February 2010, in a regional investment fund devoted to the financing of infrastructure (Argan Fund for Infrastructure Development). As regards portfolio performance, the March 2011 review confirmed improvement in overall portfolio performance, with an average aggregate score of 2.7 over 3 as against 2.6 in 6
2009. On the whole, the performance of 91% of the operations is very satisfactory, while the remaining 9% with an average performance are closely monitored by the Bank. This progress reflects the efforts made by the Government and the Bank to reduce effectiveness timeframes, accelerate the pace of implementation of operations and improve the disbursement rate. Hence, the average effectiveness timeframe of operations (6 months) is shorter than that for the entire Bank (10.6 months) and is comparable with that of the World Bank in Morocco (6.3 months). To date, the portfolio does not comprise any project at risk, compared to an overall 17% of projects at risk for the entire Bank Group and 5% for the World Bank’s portfolio in Morocco. This performance stems from the improvement of quality at entry and the implementation of operations, in particular the close and regular monitoring of the implementation of operations. MAFO is playing an important role in strengthening dialogue with the Government and other development partners.
III RATIONALE, MAIN ELEMENTS OF PROGRAMME DESIGN AND SUSTAINABILITY 3.1 Linkages with the CSP, Assessment of Country Preparedness and Underlying Analytical Elements 3.1.1 The proposed programme is fully consistent with the Bank’s intervention strategy defined in the CSP (2012-2016), whose two pillars are: (i) Strengthening of Governance and Social Inclusion; and; (ii) Support for the Development of “Green” Infrastructure. By focusing on institutional reforms, improvement of the business climate, support for the development of irrigation infrastructure, improvement of agricultural water governance1, management and protection, support for the advanced regionalization and decentralization process, and better articulation and synergy between various strategies2, PAPMV is in keeping with the above- mentioned pillars (i) and (ii). It is also consistent with the Agricultural Sector Strategy (2010- 2014), particularly Pillars 1 and 2 relating to the promotion of agriculture infrastructure and judicious natural resources3 management and the integrated water resources management policy respectively. 3.1.2 The national strategies developed, the numerous studies conducted at the request of the Government of Morocco and technical and financial partners (TFP) and discussions with stakeholders and TFPs provided the analytical bases for the programme design. This programme is consistent with the New Government’s strategy (2012-2015) approved by Parliament in January 2012. It is also fully consistent with the following sector strategies: (i) the Green Morocco Plan (2008-2020); (ii) the National Water Strategy (2009-2030); (iii) the Environment and Sustainable Development Charter (2010-2030); (iv) the New National Energy Strategy (2008-2020); and (v) the Industrial Emergence Pact (2009-2015). Assessment of Preconditions for Budget Support 3.1.3 Key Guiding Principles: In accordance with the new policy guidelines for programme support operations (PSO), the design of this operation was guided by the following basic principles : . Ownership by the country: The design was geared towards better ownership by the stakeholders of the reforms and measures supported by the Bank. Special importance was given to the adoption of a participatory approach that encourages,
1 Notably the promotion of PPP initiatives in irrigation, institutional leverage through ORMVA reforms, promotion of Agricultural Water Users’ Associations (AUEA), etc. 2 Notably the Agriculture, Water, Environment and Energy strategies and the Industrial Emergence Pact. 3 The agricultural strategy also pays special attention to the following thrusts (i) Institution and capacity building; (ii) Cross-cutting issues: gender equality, environrnent, climate change and knowledge management. 7
upon programme identification, consultation and active involvement of stakeholders (administration, professional entities, private sector, etc.). The establishment, upon programme identification, of a Joint Interdepartmental Steering Committee also reinforced the quest for the ownership. The Bank will continue to support such ownership during programme implementation with other development partners. . Focusing on results: This operation is based on the results-based logical framework and a performance measurement framework (PMF) presented in Annex 6 of Volume 2. They will serve as basis for impact-oriented monitoring. . Alignment and predictability: The principle of alignment with the Country Budget has been taken into account to enhance predictability and planning and harmonize the processing of this operation with the country budget schedule. . Harmonization and coordination: In order to strengthen harmonization and coordination, discussions were held particularly with the representatives of the World Bank, EU and AFD, which are supporting the PMV. The Agriculture Thematic Group will therefore be further supported to strengthen coordination and complementarity. . Mutual accountability: The GM was sensitized on the promotion of participatory mechanisms (consolidation of the Interdepartmental Steering Committee, the Agricultural Thematic Group, etc. which are basic elements). . Flexibility: There was flexibility in programme design in order to address the GM’s priorities and take its expectations into consideration. In view of the set objectives, the principle of flexibility will be adopted during implementation of this operation. 3.1.4 Conditions Precedent – Eligibility Criteria : In light of the new policy guidelines for PSOs (section 6.2.1), Morocco fulfils the following criteria : (i) Government’s Commitment to Poverty Reduction ; (ii) Economic Stability ; (iii) Satisfactory Fiduciary Risk Assessment ; (iv) Political Stability; and (v) Harmonization (see details in Appendix 3). 3.1.5 Government’s Commitment to Poverty Reduction: Morocco has implemented social policies, particularly under the National Human Development Initiative (INDH). These reforms helped to improve the social indicators and roll back the poverty rate from 15.3% to 9% between 2000 and 2010. In 2012, the Government initiated the reform of regionalization, the second phase of the INDH and the extension of health coverage to disadvantaged people across the country. These reforms are expected to help improve the quality and efficiency of public services responsible for poverty reduction and vulnerability. 3.1.6 Economic Stability: On the economic front, as indicated earlier on (section 2.2), the evaluation conducted by the Bank shows that Morocco continues to record encouraging results marked by the consolidation of the macro-economic framework and gradual diversification of the production base of the national economy over the past ten years. The performance has been achieved despite the difficult international economic situation, thanks to the implementation of coherent macro-economic policies, sustained structural reforms and sector strategies centred on structuring projects. In accordance with the new policy guidelines for PSOs, consultations with the International Monetary Fund (IMF) have been initiated, although the IMF has no office in Morocco. In addition, because Morocco has no programme with the IMF, the only consultations between the Kingdom and the Fund take place within the framework of consultations under Article IV. The conclusions of the last consultations (November 2011) indicate that Morocco’s economic performance is very good. 8
3.1.7 Satisfactory Fiduciary Risk Assessment: As regards public finance management, the risk assessment conducted by the Bank’s fiduciary services (detailed in Annex 3) is consistent with the March 2011 Approach Paper on the “fiduciary risk management framework for ADB reform support operations” and the March 2012 new policy on the Bank’s PSOs. It will help the Bank to plan the PAPMV implementation. Indeed, (i) the country’s initial fiduciary risk is moderate, in light of the most recent diagnoses of public finance management, procurement and the level of corruption. This risk has been reduced to a low and appropriate residual level to handle a budget support operation, considering the reforms initiated in recent years, as well as the favourable prospects of pursuing them, backed particularly by the fifth Public Service and Public Finance Reform Support Programme (ADB, WB and EU) being prepared; (ii) the sector fiduciary risk assessed at the level of the Ministry of Agriculture is also favourable for the implementation of a sector support, provided that account is taken of mitigation measures (action plan and loan commitment) aimed at strengthening the coverage, quality and efficiency of the internal auditing of MAPM-DA and entities under its supervisory authority, and that the arrangement concerning specific performance audits in the implementation of PAPMV measures is effectively implemented by the IGF; (iii) regarding inclusion of the support in the national budget, the authorities have confirmed that the resources have been included in the budget with a consolidation on the basis of the partnership programme with various technical and financial partners and that this programme included PAPMV. The MTEF 2009-2015 of the Green Morocco Plan and the investment budget of the Department of Agriculture of the MAPM provide for the required sector allocations. 3.1.8 The regulatory framework for public procurement is governed by Decree No. 2.06.388 of 5 February 2007. The Bank evaluated the framework in 2011 and concluded that procurement roles are balanced and, on the whole, acceptable, except for a few discrepancies, with a relative fiduciary risk deemed moderate. Indeed, despite a regulatory framework largely consistent with international standards and an effective and efficient control mechanism, the quality of the redress and complaint mechanism, its independence, representativeness and risk of exposure to political influence are areas of concern. This view is shared by many previous studies1. Morocco took note of these concerns, and drafted a revised decree as well as specific orders to establish a complaints management organ that is more in line with international standards. The new decree on public procurement and the orders clarifying the institutional framework should be approved in 2012. The entry into force of the new decree and other instruments will contribute to mitigating the procurement risk deemed moderate. Apart from the regulatory framework, the entire Moroccan system was assessed using the OECD/DAC methodology by the World Bank in 2008. Its conclusions are virtually similar because they establish that 78% of the sub-indicators used by the OECD/DAC methodology are achieved (even though most of the sub-indicators not achieved are essential). This level of compliance of the current Moroccan procurement system is reassuring because the resources of this sector budget support will be used in an effective, transparent and efficient manner. Details of the characteristics of the Moroccan procurement system are presented in Annex 4 (Volume 2). 3.1.9 Institutional Capacity: The GM demonstrated its capacity in previous operations to steer reform programmes and investment projects, as well as mobilize development partners around development operations. It thus showed proof of good programme ownership and coordination capacity. As regards steering and management, the Moroccan administration has skilled human capacities and a satisfactory level of supervision to ensure efficient management of investment projects and reform programmes. The administrative machinery is well structured with a relevant and clear task assignment system that enables officials to perform their duties.
1 Maghrebian Conference on Procurement; World Bank: CFAA 2003 and 2006; OECD/DAC Assessment 2008. 9
However, it is necessary to specify that voluntary retirements from the administration have created a vacuum that is currently filled by using local technical assistance and/or new recruitments. During the design of this programme, the involvement and participation of the various entities concerned were appreciated and considered very active. 3.1.10 The Ministry of the Economy and Finance (MEF), Ministry of Agriculture and Sea Fishery (MAPM), Ministry of Energy, Mines, Water Resources and Environment (MEMEE) with its three Departments (Energy, Water Resources and Environment) and the Agency for Renewable Energy Development and Energy Efficiency (ADEREE) are the government departments involved in PAPMV management. These departments have high-level technical skills and have shown proof of their commitment to satisfactory conduct of the reforms initiated under the PMV. 3.1.11 Political Stability: At the political level, Morocco enjoys good stability in spite of security problems stemming from terrorist threats (last attacks in Marrakech in May 2011) and the socio-political uprising which affected the entire sub-region. Thus, the political achievements and the responsiveness of Moroccan authorities allowed the country to reduce the scale of the uprisings. The approval, by referendum, of the new constitution in July 2011 led to the organization of legislative elections on 25 November 2011, which confirmed the liberalization and democratization of political life. 3.1.12 Harmonization: In accordance with the principles of the Paris Declaration, donors consult with each other regularly in Morocco in thematic meetings and sector working groups1. Such consultations help to ensure synergy and complementarity between various operations. The Bank, through the Country Office, plays an active role in consultation, particularly in the agriculture, water and sanitation sectors. Coordination between the Bank and other donors also takes the form of project co-financing, especially in rural road infrastructure, renewable energy, governance, education and health sectors. 3.2 Collaboration and Cooperation with Other Donors 3.2.1 Aid is coordinated through periodic meetings between technical and financial partners (TFPs) present in Morocco and representatives of the Government in the form of thematic meetings and sector working groups (cf. 3.1.12). In 2010, a thematic group was instituted in the agricultural sector bringing together the key TFPs involved in providing support to the Green Morocco Plan (ADB, IBRD, EU, KfW, AFD, etc.) and steered by the Directorate of Strategy and Statistics (DSS). The objective of this Agriculture Thematic Group (GTA) is to coordinate efforts to address the requirements and needs of the Green Morocco Plan. The Bank is playing a vital role through MAFO. The GTA meets twice a year for the TFPs to exchange views on strategic and operational issues relating to their PMV support programmes. PAPMV intends to enhance consultation between the partners in the agricultural sector and the Government by strengthening the GTA/PMV. 3.2.2 The Bank’s PMV Support Programme was designed in consultation with other PMV partners in Morocco during various preparation and appraisal missions, which facilitated the sharing of experiences and ensured synergy and harmonization of operations. The World Bank and the European Union are providing a budget support of USD 300 million and EUR 70 million respectively. The AFD has just approved a EUR 50 million budget support. The table in Appendix 5 summarizes donors’ support for the PMV. To strengthen aid coordination between the TFPs, the Government has established a Geographic Information System (GIS) to ensure real time monitoring of various operations by geographic area, sector and amount. It is managed by a Steering Committee composed of MEF and TFP focal points. The latter have direct access to the GIS database to check and validate information on their operations.
1 In the areas of water and sanitation, energy, agriculture, environment, education, health and migration. 10
3.2.3 Morocco subscribed to the Paris Declaration on Aid Efficiency and the Accra Declaration. Lessons learned from monitoring indicators relating to the principles of this declaration1 show that aid granted to Morocco is relatively well aligned with country priorities. Discussions on the use of country procurement procedures are ongoing, particularly with the Bank and World Bank. Regarding the harmonization of procedures, projects funded by the Bank and other key TFPs in Morocco are essentially implemented by Ministries and public establishments, thus helping to ensure institutional sustainability and limit the establishment of parallel entities. 3.3 Results of Similar Completed or On-going Operations and Lessons Learned 3.3.1 To date, the Bank has funded fourteen (14) budget support programmes and a balance of payments support in Morocco for a total amount of UA 1 421 million; the operations are as follows: the Structural Adjustment Programme (1989-1990) ; Consolidation of the Structural Adjustment Programme (1993-1994) ; the Economic and Social Reform Programme (PRES) ; PARAP I, II III and IV from 2002 to 2011 ; PARCOUM I and II (2002-2006) ; SAP Water (2004- 2008) ; PUEN (2009-2011) ; PADESFI I and II, and Balance of Payments Support. The completion reports of most of these programmes underscored the country’s good performance in programme implementation and coordination. 3.3.2 At present, the Bank’s agricultural portfolio in Morocco comprises four ongoing operations of a total loan and grant amount of UA 48.86 million (equivalent to EUR 55.31 million); the operations are as follows: (i) the National Irrigation Water Conservation Programme Support Project (PAPNEEI) with EUR 53.59 million loan; (ii) three technical support operations of a total grant amount of EUR 1.72 million (Technical Support for the Development of Southern Oases, Technical Support for Irrigation Infrastructure Development, and Technical Support for the Promotion of Young Agricultural Entrepreneurs). Many lessons are learned concerning particularly assessment of quality at entry for operations, adoption of a concerted design and implementation approach that ensures the active involvement of stakeholders, good scheduling and management of procurement and disbursements, and quality of supervision. Lessons learned by the Bank in the implementation of reform support operations can be summarized in terms of the need to: (a) Limit the triggers and avoid measures that are difficult to implement during the programme implementation period and that can “block’’ or delay loan disbursement; (b) Formulate the reform programme on a selective and concerted basis with the stakeholders and technical and financial partners (TFPs) to ensure ownership of reforms by the Government, and develop the bases for performance-based monitoring and evaluation to assess the progress of reforms. 3.3.3 The PAPMV is a continuation of the Water Sector Adjustment Programme (PASEAU) completed in 2008, and which had started reforms in the agricultural water sector (particularly the application of cost accounting within ORMVAs, increasing the recovery rate of levies, catch-up irrigation water tariff increase, implementation of the integrated and transparent billing model, preparation of a study on the externalization of agricultural water service management in ORMVAs). The completion reports of these programmes concluded that the country’s reform implementation performance was good and that the authorities’ ownership of the agreed measures was strong. However, these operations also revealed that: (i) there are difficulties associated with the multiplicity of conditionalities; (ii) the Bank and the Government should select feasible measures and have the same understanding of each measure; and (iii) efforts should be made to monitor project and programme performance, as well as the implementation of measures.
1 First survey on the monitoring of indicators of the Paris Declaration prepared in 2008. 11
3.3.4 The PAPMV design took into consideration the key lessons learned from previous operations, in particular targeting and selectivity of adopted reforms and measures, as well as their ownership by stakeholders. Furthermore, in this spirit of ownership, the PAPMV was designed using a participatory approach based on consultation with stakeholders (workshops, discussions, etc.) and the institution, upon PAPMV identification, of an Interdepartmental Committee that steered the design of the programme in conjunction with the Bank (Committee supporting the MEF and bringing together the representatives of various departments involved in the programme, particularly Agriculture, Water, Environment and Energy). 3.3.5 The PAPMV design is consistent with the review conducted by OPEV on the application of the Bank’s integrated water resources management (IWRM) policy. The review, prepared in May 2012, concluded that Morocco is a good example in IWRM design and implementation. In accordance with the conclusions and recommendations of the review (cf. Para. 5.1), the PAPMV adopted an inter-sector approach based on institutional regulation, enhancement of strategic support and capacity building. A consultation was also held during the design phase with the various departments (ORQR, OWAS, ONEC, OSGE, OPSM, AWF, etc.) and a Task Force will be set up to support PAPMV implementation. 3.4 Linkages with Other Bank Operations 3.4.1 Linkages between the PAPMV and other operations financed by the Bank are summarized in the table below: Table 1 Linkages between the PAPMV and Other Bank Operations Other Bank Status Objectives and Content PAPMV Components Linkages of Other Operations Operations with the PAPMV Water Sector Com Objectives : Sustainable water Component II : Reform of Agricultural Water Support Programme plete management Management [PASEAU] d in Content : Six thrusts: Integrated Water Support for 2008 Resources Management ; Water Rates Improvement of Regulation ; Reallocation of Investment Governance and Budgets ; Reform of Agricultural Water Sustainable Management ; Public-Private Agricultural Water Partnerships ; and Control of Impacts of Management Effluents on the Environment National Irrigation On- Objectives: Sustainable water resources Component I : - Improvement of Agricultural Water Conservation going management and improvement of the Modernization of Water Management and Promotion Programme Support productivity of irrigated areas. Irrigation Infrastructure of Water Conservation Measures ; Project-Phase 1 - Support for Water Development [PAPNEEI-1] Content : Building of localized irrigation Component III : and Provision of Irrigation infrastructure on about 20,000 ha and Irrigation Water Technical and Agricultural implementation of water development Development Support Advisory Services; actions - Support for the Marketing of Produce and Promotion of the Aggregation Process (producers and agro-industrialists contract) Irrigation On- Objectives : Development of water Component I, - Preparation and implementation of Infrastructure going resources by promoting irrigation Development of a road map for Irrigation Water Technical Support- infrastructure within a context of scarcity Strategic Tools for the Conservation; a national irrigation PRI Grant and climate change Irrigation Sector map; irrigation infrastructure Component II : investment programme, and a Content: Design and preparation of Development of MAPM and AUEA senior staff strategic and operational tools for Operational Water capacity building programme. monitoring and consistency of water sector Management and policies and the PMV. Capacity Building tools
3.4.2 It should be noted that the Bank’s operations in Morocco pay special attention to the cross-cutting issue of agricultural water under the PMV and to the strategic guidelines of the new water strategy. The PAPMV has linkages with the following operations: the PAPNEEI which supports the irrigation sector, technical support for irrigation infrastructure, technical support for water table recharge, as well as support for JEA promotion and the future operation to provide support to the National Irrigation Water Conservation Programme. 12
3.5 Bank’s Comparative Advantages 3.5.1 The Bank has sound experience in budget support in various sectors in Morocco. It is one of the country’s leading donors in terms of volume of financing. It has initiated more than a dozen (general and sector) budget support programmes, and has the required experience. As such, it can initiate a more constructive dialogue on macro-economic and sector issues. In addition, by placing more emphasis on a “results-based integrated and participatory approach”, the Bank is offering additional possibilities of support and synergy (water, energy, environment, adaptation to climate change, support for vulnerable groups [youths and women], etc.). 3.5.2 The experience gained by the Bank in the areas of irrigation (PAPNEEI), energy and water enables it to envisage inter-sector operations that promote the coherence and efficiency of sector operations. The programme directly puts into synergy initiatives (PRI grant) for the promotion of Young Agricultural Entrepreneurs (JEA), the modernization of irrigation infrastructure (PRI grant), and provision of technical assistance for artificial water table recharge in Haouz (AWF grant). This programme offers opportunities to put into synergy the Bank’s expertise in the areas of water, energy, climate change, environmental and social assessment, private sectors and gender. Such expertise can support the reforms identified in the PMV, and give the Bank a comparative advantage. The proposed reforms will help to support the investments of operations conducted by the Bank, and consolidate their impacts in terms of agricultural water management, development and protection. 3.6 Application of Good Practices Principles as regards Conditionalities 3.6.1 The Bank and Morocco have a lot of experience in the design and implementation of reform programmes. The experience gained in Morocco, through more than a dozen budget support operations, highlights particularly two major lessons : (i) slow process of approval of legal and regulatory instruments, especially legislative enactments ; (ii) multiplicity of conditions is an impediment to the implementation of budget support programmes. Consequently, the design of the programme took into account the following good practices: (i) adoption of a realistic schedule for the approval of legislative enactments and the need to avoid making such approval one of the disbursement conditions; (ii) adoption of good practices in conditionalities/targeting of conditions, political commitment to conduct reforms within a participatory framework, and ownership of the conditions by the Customer. 3.6.2 Furthermore, the analysis of documents and discussions were shared between the various TFPs operating in the sector (mainly the World Bank, EU, AFD, KFW and IFC), which pledged their support for the programme. The discussions provided better visibility for coherence, targeting, synergy and complementarity of measures proposed by the PAMPV. Indeed, a complete conceptual framework, in this case a comprehensive matrix including potential measures, was designed as a benchmark for comprehensive measures, and used as basis for consultation, integration, harmonization and complementarity of interdepartmental operations and with development partners, particularly the WB, EU and AFD. These consultations are in line with the principles of the Paris and Accra Declarations and the enhancement of mechanisms aimed at ensuring better aid coordination. IV PROPOSED PROGRAMME 4.1 Programme Objectives This operation intends to support the implementation of the Green Morocco Plan – PMV [2008- 2020] by providing targeted support for the sustainable management, development and conservation of agricultural water within a context of growing scarcity of this resource. Its goal is to help strengthen the competitiveness of the agricultural sector for inclusive economic growth, and its specific objective is to improve the business climate and ensure sustainable management of agricultural water.
13
4.2 Programme Components and Expected Outcomes 4.2.1 The PAPMV is structured around four closely related components summarized as follows: Component 1: Support for the Modernization of Irrigation Infrastructure 4.2.2 Issues and Challenges: Morocco has embarked on extensive modernization of irrigation infrastructure through three major structuring programmes. The availability of strategic steering instruments, visibility on the scope of investments, and an information and monitoring-evaluation system are useful for improved planning and implementation. 4.2.3 Objectives and Proposed Reforms: This component seeks to develop and modernize agricultural water core infrastructure, particularly upstream, so as to help improve management and utilization of these mobilized water resources downstream. The programme will support three strategic programmes for the country: (i) the National Irrigation Water Conservation Programme (PNEEI), which will cover a surface area of 555 000 ha; (ii) the Irrigation Extension Programme (PEI) [former Catch-up Programme-PRD] (180 000 ha); (iii) the Small- and Medium-Scale Waterworks Development-PMH (340 000 ha). This component focuses on two important phases in the development of irrigation infrastructure: (i) preparation of programme (PNEEI and PEI) planning and monitoring tools; and (ii) conduct of studies on irrigation facilities in Small and Medium-Scale Waterworks (PMH), and Large-Scale Waterworks (GH) areas and studies on conversion to localized irrigation (PNEEI). The proposed reforms are indicated in the matrix in Appendix 2; they focus on the following actions : (i) improve visibility in programming and planning the building of infrastructure on new irrigated and converted areas; (ii) prepare and finalize feasibility studies on infrastructure for the extension of irrigation over an area of 156 750 ha for GH and PMH conversion of 40 000 ha to localized irrigation; (iii) develop planning tools and instruments (road map, national irrigation map, etc.) and a PNEEI and PEI monitoring- evaluation system to monitor their performance; and (iv) develop a mechanism for consultation between stakeholders in programming and building irrigation facilities (details in Annex 1, Volume 2). 4.2.4 Major Expected Outcomes : The expected outcomes are summarized as follows : (i) preparation of a Road Map for water conservation ; (ii) preparation of a national irrigation map [a measure deemed vital for enhancing visibility and decision making : adopted as a condition for disbursement of the second tranche of the loan], (iii) establishment of a PAPNEEI and PEI monitoring-evaluation system ; (iv) conduct of studies on the conversion of about 40 000 ha of irrigated areas and feasibility of infrastructure for the extension of irrigation over an area of 156 750 ha ; (v) formulation of water conservation and irrigation extension investment programmes; and (vi) establishment of a consultation committee for the integrated planning of irrigation areas and associated dams. 4.2.5 Key Performance Indicators: The key monitoring indicators are: (i) number of hectares studied for PMH; (ii) number of hectares studied for GH; (iii) number of hectares studied for irrigation conversion; (iv) a national irrigation map available; (v) an Irrigation Investment Programme available; and (vi) an operational (PNEEI and PEI) monitoring-evaluation system. The impact monitoring indicators are: (i) additional surface area developed annually for localized irrigation; (ii) additional surface area developed annually for extension of irrigation; and (iii) additional volume of water saved (as a result of PNEEI and PEI). Component II: Improvement of Governance and Sustainable Management of Agricultural Water 4.2.6 Issues and Challenges: Morocco faces a situation of strong pressure on its water resources (water stress country), particularly agricultural water which consumes between 80% to 85% of mobilized resources, as well as keen competition from other sectors (drinking water, tourism and industry). Irrigated agriculture is plagued by constraints related to the scarcity of 14 water resources exacerbated by the impacts of climate change. The challenges include improvement of the irrigation water service, management of demand for water, integrated water resources management, and building of the institutional capacity of AUEAs. 4.2.7 Objectives and Proposed Reforms: The objective of this component is to promote measures that will strengthen governance and judicious management of agricultural water, as well as synergetic linkages between the PMV and the water strategy for more sustainable irrigated agriculture. To that end, the Programme provides for concrete measures through two important levers: (i) promotion of Water Demand Management (WDM); and (ii) Promotion of Integrated Water Resources Management (IWRM). The potential measures for this component concern particularly : (i) institutional reform of water service for large-scale waterworks by implementing a PPP in a new irrigated area; (ii) reflection on ORMVA institutional reform prospects as well as the role of Agricultural Water Users’ Associations (AUEAs) ; (iii) development of modern tools for irrigation management and good practices; (iv) development of groundwater management and conservation tools; (v) conduct of studies on the re-use of treated wastewater in irrigation and artificial recharge of water tables. 4.2.8 Major Expected Outcomes: The major expected outcomes of this component could be summarized as follows: (i) conduct of a study on the impact of reforms on the irrigation sector1 as well as its action plan to mitigate the impact of reforms; (ii) launching of the study on the restructuring of a PPP in Dar Khroufa sector (21 000 ha) in Loukkos ORMVA ,as well as its feasibility study; (iii) initiation of reflection on ORMVA institutional reform prospects and preparation of a Road Map [as continuation of SAP Water and deemed vital for the reorganization of ORMVs in light of the changes brought about by the PMV (DRA, ONCA, ONSA, PPP, enactments, etc.) and advanced regionalization: adopted as a condition for disbursement of the second tranche of the loan] ; (iv) initiation of reflection on the role of AUEAs in GH and the implementation of a programme to build their capacity; (v) development of modern tools for managing irrigated areas; (vi) conduct of a study on two water table contracts, signature of two water table contracts (Bhira and Haouz) and establishment of a system for monitoring groundwater tapping; and (vii) identification of new water resources (re-use of treated wastewater in irrigation and artificial water table recharge). 4.2.9 Key Performance Indicators: The key monitoring indicators of this component are : (i) the study on the political economy of irrigation reforms is available and the mitigation plan is implemented ; (ii) the Dar Khroufa PPP study contract is signed and the feasibility study prepared and available; (iii) a road map for reform of ORMVAs available; (iv) the AUEA capacity building programme is formulated and launched; (v) the guide on localized irrigation good practices is prepared and available; (vi) the study on two water table contracts is conducted and available; (vii) two water table contracts are signed; (viii) the road map for monitoring groundwater tapping and a system for monitoring and controlling groundwater are prepared and available; (ix) the Treated Wastewater Re-use Master Plan (REUT) is prepared, and the REUT and good practices promotion tools are developed; and (x) the road map for artificial water table recharge is prepared and available. The monitoring indicators for the impact of the measures mentioned above are: (i) the structuring and feasibility of the Dar Khroufa PPP studied; (ii) ORMVA reforms are underway; (iii) the number of AUEAs formed; (iv) the irrigation good practices guide disseminated; (v) groundwater management arrangements included in the Green Morocco Plan; (vi) the surface area developed under the REUT; (vii) REUT potential identified; and (viii) the number of water table recharge projects operational.
1 The study is entitled « Study on the analysis of the political economy of irrigation sector reform ». 15
Component III: Development of Agricultural Water and Promotion of the Business Climate 4.2.10 Issues and Challenges: Agricultural water development is one of the major issues of the PMV, which was designed with special focus on this dimension in order to address challenges posed by profound transformation of Moroccan agriculture. The challenges include: (i) low productivity resulting mainly from the predominance of very low value added sub-sectors; (ii) limited integration of the production process; (iii) production downstream and agricultural produce processing inadequately developed (low agro-industry/agriculture value added ratio); (iv) suboptimal participation in global trade in agricultural products (low average growth rate of food exports). These challenges highlight the role of the private sector and importance of Public- Private Partnership initiatives operating in a “win-win situation”. This helps to improve competitiveness which entails promoting the investment environment and business climate. 4.2.11 Objectives and Proposed Reforms: The objective of this component is to link the development of agricultural water to promotion of the business climate so as to develop synergy that would generate high value-added agriculture. It covers downstream activities and is geared towards the creation of value for agricultural water. It seeks to improve water productivity and increase the value per cubic metre of water by developing downstream agricultural activities. The programme provides for a series of reforms around the following thrusts : (i) Development of the Agricultural Council (CA) ; (ii) Development of Agricultural Training and Capacity Building ; (iii) Development of Agricultural Research ; (iv) Development of Strategic Sub-sectors, Local Products, Agro-business and Agropolis; (v) Promotion of the Aggregation Mechanism and PPP Initiatives; (vi) Consolidation of the FDA Incentive Mechanism; and (vii) Promotion of Agricultural Insurance to Support Value Added Chains. 4.2.12 Major Expected Outcomes : The expected outcomes of this component could be summarized as follows : (i) introduction into the approval circuit and preparation of the implementing instruments of the law on agricultural aggregation and the law on inter-trade organizations [These two laws, the drafts of which have already been prepared, are deemed crucial for the promotion of aggregation models and inter-trade organizations: initially adopted as conditions for disbursement of the first tranche of the loan. The Bank was informed and it duly noted that the two bills have already been transmitted to the SGG. The Bank will monitor the enactment of these laws under dialogue with the country]; (ii) launching of a study on the establishment of regional competitiveness poles of the agro-food sub-sector around Meknès and Berkane agropolis [the marketing of agropolis is considered important and evidence of implementing an action plan is adopted as a condition for disbursement of the second tranche of the loan]; (iii) consolidation of the financial resources of the Agricultural Development Fund (FDA) ; (iv) finalization of the study on agricultural insurance, improvement of the agricultural insurance penetration rate, and launching of new agricultural insurance products covering many sub-sectors and risks ; (v) introduction into the approval circuit and finalization of the implementing instruments of the law on the biological production of agricultural and aquatic products; (vi) conduct of the study on the National Agricultural Training and Research Strategy (SNFRA); (vii) introduction into the approval circuit and preparation of the implementing instruments of the law on the National Agricultural Council Board and the law on the organization of the profession of Private Agricultural Extension Officer (CP) [These two laws, the drafts of which have already been prepared, are considered vital for the promotion of the Agricultural Council and private initiatives: initially adopted as conditions for disbursement of the first tranche of the loan. The Bank was informed and it duly noted that both bills have already been transmitted to the SGG. The Bank will monitor the enactment of these laws under dialogue with the country]. 4.2.13 Key Performance Indicators : The key monitoring indicators of this component are : (i) evidence of the transmission of the bills to the General Secretariat of the Government and 16 preparation of implementing instruments of the laws on aggregation, inter-trade organizations, biological production of agricultural and aquatic products, the National Agricultural Council and organization of the profession of Private Agricultural Extension Officer; (ii) the action plan for promoting agropolis is prepared and implemented; (iii) the study on the establishment of regional competitiveness poles of the agro-food sub-sector around Meknès and Berkane agropolis is launched; (iv) the amount allocated for FDA subsidies; (v) the agricultural insurance study and Road Map are available; (vi) the agricultural insurance penetration rate has improved; (vii) the specifications of products that can bear a distinctive origin and quality mark are prepared and available; (viii) the study on the National Agricultural Training and Research Strategy (SNFRA) is conducted and available. The key impact monitoring indicators are: (i) the number of aggregation contracts signed; (ii) the marketing rate of agropolis; (iii) the amount of FDA subsidies has increased; (iv) the number of local products recommended; (v) the number of risks covered by agricultural insurance; (vi) the number of local products marketed by GMS; (vii) the number of specifications of products that can bear a distinctive origin and quality mark deposited; (viii) the surface area farmed by producers converted to Biological Production and quantities of organic products exported; (ix) the ONCA established; and (x) the number of private agricultural extension officers commissioned. Component IV: Promotion of Gender, Energy Conservation and Protection of Agricultural Water 4.2.14 Issues and Challenges : The main issues and challenges concern: (i) low visibility within the PMV for gender mainstreaming ; (ii) limited attempts in the agricultural sector to tap potential energy sources (biomass, renewable energy and energy efficiency); (iii) still limited efforts by the PMV to adapt to climate change (CC) and mitigate greenhouse gas emissions by taking advantage of negotiations on post-Kyoto mechanisms, particularly the Green Fund; and (iv) the need to strengthen resource tracking mechanisms. 4.2.15 Objectives and Proposed Reforms: This component focuses on four main thrusts: gender, energy conservation and efficiency, legal and organizational framework for environmental protection, and climate change which will support PMV social and environmental dimensions. It seeks to implement reform measures to : (i) improve gender mainstreaming within the PMV and MAPM, and especially youth integration; (ii) promote energy conservation in the agricultural sector (industry and farming); (iii) develop legal instruments for environmental protection and monitoring mechanisms; and (iv) boost PMV efforts to adapt to and mitigate climate change in the agricultural sector. 4.2.16 Major Expected Outcomes : They could be summarized as follows: (i) launching of a diagnostic study and an action plan to consolidate gender mainstreaming into the PMV ; (ii) initiation of the study on support for young agricultural entrepreneurs ; (iii) training and support for the settlement of young graduates; (iv) finalization of Regional Biomass Master Plans in four regions and identification of investment project portfolios in two regions ; (v) conduct of energy audits of agro-industrial units (UAIs) and farms (EA), and initiation of implementation of the Energy Performance Plan (PPE) of UAIs and EAs; (vi) introduction, into the approval circuit, of the draft Framework Law on the National Environment and Sustainable Development Charter; (vii) support for the establishment of Regional Observatories for the Environment (ORE; and (viii) development of NAMA for the agricultural sector. 4.2.17 Key Performance Indicators : The key output monitoring indicators are: (i) the GE diagnostic study and action plan prepared; (ii) the JEA diagnostic study conducted; (iii) the youth settlement projects prepared; (iv) the Regional Biomass Master Plans of four regions prepared; (v) two biomass projects and 10 feasibility studies available; (vi) at least 10 UAI energy audits and 5 EA energy audits available; (vii) at least 10 PPEs in UAIs and at least 5 PPEs in EAs available; (viii) a guide on EE good practices in EAs developed and disseminated; (ix) at least 6 OREs operational in 2013 and 6 in 2014; and (x) the NAMA Agricultural Document prepared and 17 available. The monitoring indicators for the impact of the measures mentioned above are: (i) measures for gender mainstreaming into the PMV initiated; (ii) opportunities of settling young agricultural entrepreneurs studied and PMV measures targeting youths are more visible; (iii) the number of biomass projects funded under the PMV; (iv) EE measures integrated into PMV projects; (v) EE measures internalized in UAIs and farms; (vi) Framework Law on the National Environment and Sustainable Development Charter approved and environmental protection tools developed; and (vii) steps to develop the agricultural sector NAMA taken. 4.3 Financing Requirements and Arrangements 4.3.1 The financing requirements of the Treasury of the Kingdom of Morocco are presented in Table 2 below. According to estimates, these needs amount to about MDH 156 billion, equivalent to EUR 14 billion. They will be covered by the country’s own resources and external resources. External resource requirements amount to about MDH 16.8 billion, or nearly EUR 1.5 billion. These external resource requirements will be covered by external drawings on investment project and reform programme loans. The current Bank loan, amounting to EUR 105 million, represents 7% of the external financing requirement for 2012-2014.
Table 2 Budget Balance and Financing Requirements for 2012-2014 (in MDH billion)
Description 2012 2013 2014 Total (2012-2014) Total Revenue (excluding Hassan II Funds) 190.3 199.5 215.1 604.9 Of which: Tax revenue 170.7 183.8 198.5 553.1 Non-tax revenue (excluding privatization and Hassan II Funds) 19.6 15.7 16.6 51.8
Expenditure and Net Lending (excluding Hassan II Funds) 240.1 251.3 265.1 756.5 comprising : Current expenditure 194.1 201.0 176.7 483.4 Capital expenditure 46.0 50.3 53.3 149.6
Special Treasury accounts balance (surplus) 3.0 2.0 2.0 7.0
Overall balance (commitment basis, excluding Hassan II Funds) -46.8 -49.8 -48.0 -144.6 Change in arrears -17.0 0.0 0.0 -17.0 Grants and other revenue 3.2 1.2 1.2 5,6
Financing Gap 60.6 48.6 46.8 156.0 Domestic financing 48.5 46.2 44.5 139.2 External financing 12.1 2.4 2.3 16.8
Source: Ministry of the Economy and Finance - MEF 4.3.2 Major contributions by donors to the Green Morocco Plan during the 2011-2015 are presented, on a tentative basis, in Table 3 below.
Table 3 Parallel External Financing of the PMV
Source of Financing Amount Remarks African Development Bank/Loan EUR 105 Million Ongoing World Bank (IBRD) USD 300 Million Approved European Union (EU) EUR 70 Million Approved French Development Agency (AFD) EUR 50 Million Approved Global Environment Facility (GEF) USD 4.35 Million Approved African Development Bank/ MIC Grant EUR 1.8 Million Approved Other partners (Belgian Cooperation, etc.) EUR 8.0 Million Approved
4.4 Programme Beneficiaries The direct beneficiaries of this programme are socio-professional organizations, farmers/irrigators, youths and women, private enterprises, agro-industrial units and administrative entities concerned. The programme will also benefit MAPM and MEMEE central and decentralized entities (Departments of Water Resources, Environment and Energy). These entities will be strengthened in terms of regulations and managerial capacity. It will help to strengthen the decentralization process, as well as knowledge building, skills transfer and the clear definition of 18 duties and responsibilities by underscoring a performance-and results-based management culture and promotion of a contractual approach based on mutual obligations. 4.5 Impacts on Gender 4.5.1 Uneducated women account for 79.2% of Morocco’s rural labour force, a rate which can exceed 90% in mountainous areas. Rural women are vulnerable, and their role in society does not allow for Equity and Equality in opportunities for access to resources, services, property, income and decision making. Very few women are literate (28.2%), and are hardly involved in the management of AUEAs and in the private sector. The various mechanisms provided under the PMV are intended for men, women and youths without distinction, depending on their dynamism and skills which enable them to qualify as project beneficiaries (Pillars 1 and 2). This presupposes equal opportunities at this level. Furthermore, the FDA and the Agricultural Council’s new strategy do not take gender disparities into account. The challenge is to support MAPM to adopt a strategic vision that will help to better tap the huge human resource potential that women and youths constitute. This is what PAPMV intends to achieve by formulating and implementing a gender action plan aimed at improving access by women and youths to the programme’s resources, and an ADA gender-and age-disaggregated monitoring system to support the gender dimension.
4.5.2 The programme will promote equal opportunities for women and men, and strengthen the empowerment of women (inclusion of these aspects in the private agricultural council; settlement of Young Agricultural Entrepreneurs-JEA, capacity building, support for the aggregation process and marketing activities, etc.). 4.6 Environmental Impact 4.6.1 Environmental Safeguards: The Green Morocco Plan Support Programme (PAPMV) has been classified under Environmental Category 2, and was the subject of a strategic environmental and social assessment (SESA) which was presented by the Government on 20 February 2012 during a validation workshop. The PAPMV could be a source of negative environmental and social challenges stemming from the risk of intensification related to crop production, development of new surface areas, development of agropolis and access by vulnerable groups to programme resources. These include pressure on water resources, deterioration of water and soil quality, potential conflicts between stakeholders in the reform process, limitation of access by women and youths to programme benefits, and management of social impacts of agropolis projects. The proposed Environmental and Social Management Master Plan (ESMMP), detailed in Technical Annex 2 (Volume 2), seeks to improve PAPMV environmental governance by including and addressing environmental conservation issues in PAPMV implementation activities. It includes the development of environmental assessment tools, tools for environmental impact management on parcels of land, environmental and social measures, as well as capacity building measures. The ESMMP will be partly implemented through measures already provided in the PAPMV with Bank support. Some measures will thus be included in the Kingdom of Morocco’s strategic programme for managing the environmental and social impacts of the Green Morocco Plan1. 4.6.2 Climate Change: The PAPMV is a grassroots environmental programme by virtue of its actions for collective conversion to localized irrigation, promotion of integrated groundwater management, development of water and local products, promotion of energy conservation and renewable energy in irrigation, promotion of gender and capacity building for players. The PAPMV is expected to increase the resilience of agricultural activities and the population to climate change. The PAPMV also intends to use a powerful tool, that is NAMA, to identify all the necessary GHG emission mitigation actions of the agricultural sector, and will boost these efforts
1 The summaries of the Strategic Environmental and Social Assessment and the ESMMP were posted on the Bank’s website. 19 so as to be eligible for financing mechanisms that will be established at the international level under the United Nations Framework Convention on Climate Change (UNFCCC). This challenge involves the collaboration of the Departments of Environment and the Department of Agriculture and Energy. 4.6.3 Social Considerations: The PAPMV will have major positive impacts on Morocco’s agricultural sector, particularly on incomes, employment, organization of stakeholders, instrumentation and consultation of various stakeholders, as well as on the conservation and development of agricultural water. The PAPMV will lay the foundation for sustainable adaptation of the agricultural sector to climate change. The PAPMV will therefore increase the resilience of the rural population to climate change, and thereby substantially contribute to poverty reduction. The negative social impacts will be conflicts of interest related to changes in the role of stakeholders, the spread of waterborne diseases, and the risk of poisoning by pesticides. The measures proposed in the ESMMP will reduce these negative impacts to acceptable levels. The PAPMV will not entail any forced resettlement. 4.7 Impact on Capacity and Institution Building In view of the programme focus on agricultural water strategic planning, governance, management, development and protection measures, it is expected that the programme will have a positive impact on capacity and institution building of the stakeholders. However, to ensure sustainability of the expected gains, it is necessary to make efforts to coordinate the replication of achievements. The instruments to be established (Road Map, Task Force, Information and Monitoring-Evaluation System, etc.) will certainly help to build institutional capacity.
V PROGRAMME IMPLEMENTATION, MONITORING AND EVALUATION
5.1 Implementation Arrangements
5.1.1 Institutional Arrangements: Then PAPMV will, in particular, mobilize the following departments: (i) the MAPM (DSS, DF, DIAEA, DDFP, DERF, etc.); (ii) the MEMEE (Departments of Water Resources, Environment and Energy -ADEREE). The Department of Strategy and Statistics (DSS) will assume technical responsibility on the basis of agreements to be signed with the departments concerned (Water Resources, Environment and Energy) and the Department of the Budget of the Ministry of the Economy and Finance (MEF) will be responsible for strategic coordination. 5.1.2 Financial Management: Due to the nature of the operation, resources will be used in compliance with country finance regulations. The Ministry of the Economy and Finance (MEF) will be responsible for managing the said resources, and will ensure that the Department of Agriculture (MAPM-DA) or other sector entities concerned by the programmes benefit from the budget lines provided in the finance law and any other allocation needed for programme implementation. The internal auditing of the programme will be based on the country a posteriori internal auditing system, carried out in accordance with their respective mandates, by the General Inspectorate of Agriculture (IGA) and the General Inspectorate of Finance (IGF). The entire public expenditure circuit will be used, subject to Government’s commitment to pursue the ongoing strategic reform of the public service and public finance management, and the specific strengthening of the internal auditing of the sector department by implementing an action plan aimed at building IGA capacity and the efficiency of MAPMA-DA internal auditing. The plan will include three basic actions: (i) build the capacity of IGA of MAPM-DA by signing a partnership contract between IGF and IGA covering training and support; (ii) strengthen the efficiency of PAPM-DA internal auditing by preparing a risk map of the Department of Agriculture; (iii) Prepare, and then by IGA, a target internal audit programme 2013-2015 based on risk mapping. 20
5.1.3 Disbursements and Funds Flow: The loan will be disbursed in two successive tranches following its approval by the Board of Directors and its effectiveness, subject to fulfillment, by the Borrower, of the related general and specific conditions mentioned in section 6.2. At the Borrower’s request, the Bank will disburse the funds into a designated foreign exchange bank account opened by the Government at the Central Bank of Morocco (Bank Al-Maghrib). The Borrower will ensure that once the deposit is made into that account, equivalent funds in local currency are transferred to the Treasury’s current account, which is the State budget account. Within 30 days following each disbursement, the Ministry of the Economy and Finance (MEF) will submit to the Bank a transfer confirmation letter indicating that the total loan amount has been received, converted and paid into the Single Treasury Account. The Bank has undertaken to disburse its support for the 2012 and 2013 budgets. 5.1.4 External Auditing: Given that the funds are fungible in the State Budget, the general audit of their use will be conducted by Morocco’s Audit Bench (auditing of the 2012 and 2013 audited budgets) and published within the timeframes stipulated in the Organic Law. In addition, the IGF will, throughout the duration of PAPMV (2012-2014), conduct specific annual audits of the financial flows of ADB support and the performance of PAPMV measures implementation for each fiscal year concerned. This audit will cover: (i) the accuracy of the designated account transactions related to disbursements of ADB support in the year concerned, including the accuracy of currency conversions, the exchange rate and confirmation of effective payment into the State budget account; and (ii) progress in the implementation of measures and achievement of PAPMV objectives and performance indicators. The deadline for submission of the specific financial flows performance audit report by the IGF to the Bank will be six months following the close of the fiscal year concerned. 5.2 Monitoring and Evaluation Arrangements 5.2.1 The programme implementation will be monitored and coordinated on the basis of the matrix of measures, as well as the outcomes and performance monitoring framework presented in the Annex in Volume 2, and also during joint missions composed of representatives of the MAPM, the MEMEE (Water Resources, Environment and Energy-ADEREE) and the MEF. These missions will be undertaken twice a year, in line with the budget schedule. 5.2.2 The Bank’s Morocco Country Office will play a key role and participate in supervisions and monitoring meetings organized by the Government. The Bank will also monitor the implementation of programme activities through half-yearly progress reports to be submitted regularly by DB/MEF. At the end of the programme, a completion report will be prepared jointly with the Government. VI LEGAL INSTRUMENTS AND AUTHORITY 6.1 Legal Instruments The legal instrument to be used for the programme is the Loan Agreement signed between the Borrower and the Bank. 6.2 Conditions Associated with Bank’s Involvement 6.2.1 The loan, in the form of a sector budget support, shall be disbursed in two tranches (first tranche: EUR 60 million and second tranche: EUR 45 million). Disbursement shall be subject to effectiveness of the Loan Agreement and fulfilment of the following conditions precedent (targeted conditions that can be fulfilled considering the lessons learned from other budget support operations): 21
Condition Precedent to Disbursement of the First Tranche of the Loan: (i) Provide the Bank with evidence of the opening of a special account to receive the loan resources. Conditions Precedent to Disbursement of the Second Tranche of the Loan: Provide the Bank with evidence of: (ii) drawing a National Irrigation Map (CNI) of Morocco (cf. para. 4.2.4) ; (iii) preparing a Road Map for ORMVA institutional reform (cf. para. 4.2.8) ;
(iv) implementing the action plan for promoting the marketing of agropolis (cf. para. 4.2.12). 6.2.2 Commitments: The Government undertakes to: (i) strengthen the sustainability of reliable public finance management and control mechanisms that ensure steady progress in the implementation of ongoing or scheduled public finance management system reforms; and (ii) implement an action plan aimed at strengthening IGA capacity and the efficiency of internal auditing within MAPM-DA. 6.3 Compliance with Bank Policies The programme is consistent with the guidelines of: (i) the Country Strategy Paper (CSP 2012- 2016), (ii) the Bank’s Medium-Term Strategy (2008-2012), (iii) the Bank’s Agricultural Sector Strategy (2010-2014), and (iv) the Poverty Reduction Strategy. It is also in keeping with the new OAP policy approved in March 2012 (cf. 3.1.3 and 3.1.4). VII. SUSTAINABILITY AND RISK MANAGEMENT 7.1 Sustainability 7.1.1 The key factor of PAPMV outcomes sustainability lies in the political will of Moroccan authorities to continue the reforms. The second sustainability factor is the support of professional entities and the capacity to mobilize investments. The third factor lies in enhanced private sector involvement and performance to generate the desired impetus, particularly for the agricultural aggregation process and agropolis, and respond to public offers (private agricultural council, public-private partnership, etc.). 7.2 Potential Risk Management 7.2.1 Major Risks: The major risks could come from external shocks caused by the unfavourable global economic situation and socio-political demands, as well as the vagaries of the weather and overall weak inter-sector coordination capacity. Concerning the programme components, the risks will stem from overexploitation of water resources, marginalization of some groups of players, differing interests of stakeholders, weak support from private sector or corporate players, and socio-cultural resistance to gender issues. Another major challenge of the programme is intra-and inter-institutional consultation. 7.2.2 Mitigation Measures: Risk mitigation depends on Government’s capacity to propose reforms to mitigate the climate risk, the strengthening of inter-sector coordination through high- level support of the authorities, and strengthening of the TFP Agricultural/PMV Thematic Group. Consultation committees will be set up in the programme components to facilitate the search for solutions to integrated planning, the issue of groundwater tapping and legal measures to give a feeling of security to the various stakeholders (aggregation, private agricultural council, etc.). Each reform will also be accompanied by sensitization and communication, especially for gender issues. The principle of consultation and participation will be reinforced through enhanced involvement of beneficiaries, who will be represented in coordination and consultation committees through socio-professional entities. 22
VIII. RECOMMENDATION It is recommended that the Board of Directors should approve an ADB loan not exceeding EUR 105 million (equivalent to UA 90 million) to the Government of Morocco for the purposes and subject to the conditions stipulated in this report. Appendix 1 Page 1/9
Government’s Sector Development Policy Letter
No. 1265/DSS Rabat, 27 June 2012
Mr. Donald KABERUKA President of the African Development Bank Tunis, TUNISIA
Subject: Agricultural Sector Development Policy Letter
Mr. President,
Agriculture is at the core of national concerns and constitutes a key development pillar in Morocco. Its economic and social importance, its core association in the rural areas and the multiplicity of its functions concerning especially the food, economic, social and environmental components, make it a strong engine of development for our country.
The importance of the agricultural sector is reflected in its significant contribution to the country’s GDP formation (15% to 20% and job creation (40%), particularly in rural areas where agriculture remains the leading employer (80%) and the main source of income (1.5 million farmers).
The agricultural sector’s performance shows significant but differing results. This performance has been further mitigated by the high population growth rate in our country and inadequate diversification of economic activities in rural areas. This trend has led to a chronic growth deficit of the sector in relation to high rural household and market demand. The need to significantly increase agricultural incomes by investment and upgrade the sector’s capacity to contribute to food security within a new promising context requires a new agricultural policy. The response was provided by the Green Morocco Plan being implemented since 2008 and which seeks to make Morocco’s agriculture an engine of economic growth and poverty reduction over the next 15 years.
I- PRESENTATION OF THE AGRICULTURAL SECTOR
Over the past ten years, the average annual agricultural GDP growth rate has been +3.98%. Growth has varied widely because of drought years (1 year on 2).
Our country’s agriculture partially or completely covers domestic market needs in food products. The coverage rates of domestic needs by domestic production have been consolidated at 55% for cereals, 100% for fruits and vegetables, 43% for sugar, 20% for oils, 90% for milk, and up to 100% for meats. Indeed, cereals, vegetable oils and oilseeds, sugar and dairy products account for 66% of the average value of agricultural imports.
Food exports represent 19% of the country’s total exports, or MDH 22 billion. These comprise essentially fresh citrus fruits, fresh vegetables and canned vegetables, which account for 20%, 20% and 16% of average agricultural export value respectively.
Irrigated areas, which cover 1.4 million hectares or 15% of the farm area, account for 45% of agricultural value added. These areas, though unevenly distributed across the national territory, constitute growth poles that contribute significantly to strengthening and stabilizing the country’s food security and improving living conditions in rural areas.
Furthermore, our agriculture is cereal-dominated (70% of agricultural area in use for 10% of jobs) and therefore extremely vulnerable to unstable weather conditions. As such, it is important to adapt agricultural policies to the country’s agro-ecological diversity and the effects of climate change.
Appendix 1 Page 2/9 For a significant part of the sector and in the various regions, the existing stakeholders are divided, weak, disorganized and incapable of addressing the challenges of modern agriculture with their own resources. Indeed, the weak links between the stakeholders, coupled with a deficiency in the organization of sub-sectors around aggregators with a high investment and managerial capacity, is the main cause of the deficit in productivity, investment and development of Moroccan agriculture. It is also the main reason for the insufficient financing of the sector by the domestic banking system, which hardly covers 16% of financing requirements. Marketing is an essential link in the development of agricultural products whose competitiveness at the production stage is unchallenged. It is necessary to develop sales on the domestic and export markets to achieve the set objectives. The domestic market can, as the case may be, benefit from such dynamism and/or be its catalyst. However, the domestic marketing channels have structural weaknesses related to the lack of liberalization and competition, dysfunctions in reference price determination and sharing of related information at the national level, and limitations regarding the development of modern distribution.
Transaction costs of agricultural products are high. Efforts are underway to modernize distribution channels in the domestic market (reform of wholesale trade, modernization of infrastructure, promotion of quality: labelling, traceability, geographical indication, etc.).
As regards strategy, efficient operation of the domestic market around structured and organized stakeholders to supply quality products to Moroccan consumers, at a competitive and/or affordable price, should be based on the following guidelines:
Improvement of market access by gradually liberalizing domestic markets; Upgrading standards in terms of quality and hygiene; Fostering the modernization of marketing channels.
Furthermore, the country’s agriculture is resolutely being opened up to the global market, either through unilateral trade liberalization initiatives or through bilateral or multilateral free trade agreements.
Such overtures have enabled the sector to externalize part of its productive potential, and thus help to capitalize on achievements in domestic and external markets. Efforts are being made to adapt the system of subsidizing and protecting domestic agricultural production sub-sectors based on the sector’s objectives, taking into consideration commitments made by the country at the international level.
Given the global market situation and long-term trends in global markets for agricultural products (upturn in demand, recovery of the prices of food products, increase in demand for biofuels, significant agricultural commodity price fluctuations, etc.), adjustment of tariff protection measures should be accompanied by the establishment of a conducive and incentive framework for better allocation of the sector’s resources and improvement of the competitiveness of domestic sub-sectors, which guarantee growth in the sector and the country’s food security.
Efforts should also be made to improve long-term visibility for investors and operators and foster sustained stakeholder commitment.
To consolidate our achievements and take advantage of the strategic role that Morocco can play as a trade, business and investment platform, it is also necessary to develop an aggressive strategy to promote our exports, especially through the harmonization of regulations and procedures, sustained support for established the sub-sector, promotion of Morocco’s quality label for products of high commercial value, development and promotion of certain niches and local products, prospecting of markets, etc.
Appendix 1 Page 3/9 To address the various constraints, Morocco three years ago embarked on its new national road map for the agricultural sector, namely ‘Green Morocco Plan”, whose objective is to modernize agriculture and integrate it harmoniously into the domestic and global economy. The Plan seeks to make the agricultural sector the main engine of the country’s economic development over the next fifteen years. To this end, well defined and quantified production targets have been set and included in Regional Agricultural Plans throughout the country.
II- GOVERNMENT’S AGRICULTURAL STRATEGY
II.1 PRESENTATION
Launched in 2008, the Green Morocco Plan (PMV) is an ambitious strategy whose goal is to raise the agricultural sector to a veritable lever of socio-economic development in Morocco, in line with our country’s major priorities, namely job creation, poverty reduction, and environmental and biodiversity protection.
This strategy is centred on a comprehensive approach involving all stakeholders operating in the agricultural sector, and built around two pillars: Pillar I focused on accelerated development of high value added agriculture, and Pillar II focused on upgrading vulnerable farmers in disadvantaged areas through significant State contribution.
In terms of objectives, the Green Moroccan Plan seeks to implement, by 2020:
- 961 Pillar I projects by investing a total amount of MDH 75 billion; - 545 Pillar II projects for 855 000 farmers for MDH 20 billion in investment; - more than one hundred cross-cutting projects for MDH 53 billion in investment.
Pillar I Projects:
Pillar I projects are agricultural projects based on private investment undertaken in high potential areas. They are aimed at developing productivist and modern agriculture, and fostering its integration into the global economy. This type of projects are essentially built around the aggregation concept, which helps to overcome constraints related to fragmentation of land tenure entities, while ensuring access of aggregated farms to modern production techniques, financing and markets. Pillar I projects receive special attention from the State under private investment promotion through the Agricultural Development Fund.
Pillar II Projects:
Pillar II projects are economically viable agricultural projects based essentially on direct State intervention in some marginal areas (disadvantaged dry, mountainous or oasis areas), taking into account the need to protect natural resources.
To reinforce this strategy, supervise the sector and provide it with human and material resources to achieve the set objectives, major structuring reforms and actions were implemented, focused on the organization of the Department of Agriculture, organization of professionals, construction of infrastructure, formulation of water policy, and improvement of the agricultural business climate.
II.2. MAJOR ACHIEVEMENTS More than three years after the launching of the PMV, Moroccan agriculture is resolutely on the path of promising development, as shown by the volumes of investment, growth in the output of major sub-sectors, as well as the mobilization of international partners and donors who are confident in the sector’s future. Appendix 1 Page 4/9
This momentum has been backed especially by:
the launching of a series of major agricultural projects in all regions of the Kingdom; the implementation of numerous structuring reforms and actions focused on the restructuring of the Department of Agriculture, organization of professionals, development of infrastructure, revision of the water policy, improvement of the “agricultural business climate” and lifting of impediments to investment, formulation of a new vision of the Agricultural Council, as well as review of the sector’s legal and regulatory framework (inter-trade organizations, aggregation, organic farming, etc.)
To enhance their impact, these reforms are backed by a substantial renewal of the legal and regulatory framework, with, in particular, the preparation of a legal framework for inter-trade organizations, a law on aggregation, and a law on organic farming that will enable our country to position itself in this buoyant market segment.
Lastly, to support farmers who are the primary agricultural development stakeholders, the outcomes for agricultural insurance to cover risks associated with agricultural activities have been the Support Programme of the European Union for the development of Morocco’s Agricultural Sector Policy, as well as a new vision of the Agricultural Council to better guide farmers and sustainably improve their farming practices and incomes.
Institutional Reforms: Reorganization of the Department of Agriculture and Establishment of New Entities to Support the Implementation of the Green Morocco Plan
The Green Morocco Plan has initiated extensive and comprehensive institutional reform in the agricultural sector, leading to further reorganization of the Ministry of Agriculture and redefinition of the missions and powers of its entities.
Thus, regarding the organization of the Ministry, the reform led to:
the restructuring of the Department of Agriculture in 2009 around a new organization chart to better distribute its missions and strengthen its capacity in terms of sector management and oversight; the establishment of 16 Regional Directorates of Agriculture to support regionalization and decentralization; the overhaul of Chambers of Agriculture (Law No. 27-08) to strengthen the credibility and influence of these institutions and make them key players in the development of the agricultural and rural world.
Furthermore, three new entities have been established to support the Green Morocco Plan, namely:
The Agency for Agricultural Development (ADA), which is mainly responsible for promoting the domestic supply of agricultural investments and organizing communication and information actions for investors and various stakeholders in the agricultural sector. The National Food Safety Authority (ONSSA), which is in charge of ensuring increased State policy integration and efficiency in terms of the quality control of animal and plant products. The National Agency for the Development of Oasis and Arganier Areas (ANDZOA) which is mainly responsible for promoting the management and sustainable development of oasis and arganier ecosystems. Appendix 1 Page 5/9
Overhaul of the Agricultural Development Fund, a Major Investment Incentive Tool
The overhaul of the Agricultural Development Fund focused on:
- the introduction of new subsidies upstream and downstream all plant and animal production sub-sectors and concerning essentially agricultural equipment, plantations, intensification of animal production, development units, and export promotion; - Increasing assistance granted to some categories of farmers, particularly equipping localized irrigation farms, which henceforth benefit from 100% subsidy rate for farmers with farms of a surface area of less than 5 ha and farmers who are members of an aggregation project, and a 80% rate for other categories of farmers ; - Encouraging aggregation projects through an incentives plan for aggregators who are aggregation project developers and aggregated farmers.
Irrigation Infrastructure and Agropolis for Improved Agricultural Production Development
National Irrigation Water Conservation Programme
To meet the requirements in developing more competitive and sustainable agriculture advocated by the Green Morocco Plan, the National Irrigation Water Conservation Programme (PNEEI) was adopted as one of the cross-cutting measures aimed at mitigating water stress considered as the main factor limiting improvement of agricultural productivity.
This programme seeks to convert surface and spray irrigation to localized irrigation on a surface area of nearly 550 000 ha over a 10-year period. The total programme cost is MDH 37 billion.
Its major expected impacts are the conservation of 1.4 billion cubic metres of water annually, doubling of the average value added per cubic metre of water and increase in farmers’ incomes.
Programme to Reduce the Gap between Dams and Irrigation Schemes
The programme to reduce the gap between areas dominated by dams and equipped areas is aimed at creating new irrigation areas and reinforcing the irrigation of existing areas dominated by dams that have been constructed, are under construction or are scheduled for the 2008-2012 period by the Secretariat of State in Charge of Water Resources and the Environment.
This equipment gap concerns 140 000 ha and 68% of it is attributed to Al Wahda dam (Gharb area). The overall programme cost is MDH 18.2 billion, and it will be implemented over a period of 9 years from 2010 to 2018.
Appendix 1 Page 6/9
The main programme objectives are:
Utilization of water resources mobilized by dams for irrigation ; Enhancement of irrigation water distribution efficiency through the development and integration of more efficient localized irrigation techniques; Improvement of the profitability and impact of major irrigation infrastructure built by the State; Intensification and development of agricultural production.
Agropolis Projects
To provide an appropriate framework for integration of the entire value chain of the agro- industrial sector, the Green Morocco Plan provided for the establishment, over the 2009-2015 period, of 6 agropolis in Meknès, Oriental, Tadla, Souss, Haouz and Gharb regions.
The main objectives of agropolis are:
Enable the region to benefit from significant value added of the agricultural sector; Organize the agro-industrial sector in specified areas; Create synergy between enterprises and agropolis players; Integrate the entire value chain of the agro-food sector.
New Agricultural Council Strategy
A new Agricultural Council strategy has been designed. Its objective is to strengthen support for farmers and increase the transfer of agricultural know-how on the ground. This strategy will help to ensure outreach public service for all farmers and achieve a coverage rate of one extension officer for 1 350 farmers by 2015, compared to one for 3 800 farmers at present.
The said strategy focuses on three main areas:
- Development of the private agricultural council, with an appropriate legal framework, and degressive subsidizing of agricultural council services under certain conditions; - Revitalization of State services through the modernization of State outreach entities and development of new modern communication and knowledge management tools; - Empowerment of bodies representing farmers (Chambers and Agriculture and inter-trade organizations) with a contractual commitment in a participatory road map.
This strategy seeks to sustainably and efficiently support projects and production sub-sectors included in Regional Agricultural Plans. It includes multi-year action plans defining new governance mechanisms, tools and methods of disseminating agricultural knowledge. The strategy’s goal is to establish a plural and efficient agricultural council system in order to be in line with changes in the agricultural sector.
Development of Local Products
One of the priorities of the Green Morocco Plan is the development of local products in light of Morocco’s actual potential in terms of a conducive ecosystems, varied biodiversity and know-how in this area, the cultural dimension of these products which are part of the Moroccan heritage and the strong social dimension of production of local products which is often carried out in remote and disadvantaged areas. Appendix 1 Page 7/9
To date and since the entry into force of Law No. 25-06 on distinctive origin and quality marks (SDOQ) of foodstuffs and agricultural and fishery products, the Ministry of Agriculture and Sea Fishery has recognized many SDOQ (“Argane” Geographical Indications, “Clémentine de Berkane”, “Dattes Majhoul de Tafilalet”, “Grenade Sefri Oulad Abdellah”, “Agneau Béni Guil”, “Figue de Barbarie d’Aït Baârmane” and “Fromage de Chève Chefchaouen”, Appellations of Origin of Olive Oil “Tyout – Chiadma”, “Safran de Taliouine” as “Rose de Kélâat M'Gouna- Dadès”, Controlled-Origin Brand “Agneau Laiton”, etc.).
Improvement of the Legal and Regulatory Framework
An important component of support for the implementation of the Green Morocco Plan was the overhaul of legal and regulatory instruments governing the agricultural sector. Since 2008, many draft legal instruments have been initiated; these include 113 draft instruments (8 bills, 32 draft decrees, 73 draft orders, and 21 draft agreements and programme contracts).
Many instruments have already entered into force or are being validated. The instruments have been designed to reflect the vision of the Green Morocco Plan into terms of sector supervision, improvement of its standards and support to farmers.
III- AFRICAN DEVELOPMENT BANK’S SUPPORT FOR THE GREEN MOROCCO PLAN
The Green Morocco Plan is pursuing its major reform projects. The Development Policy Loan, which is the subject of this letter, is aimed at supporting the implementation of this Programme which focuses on the following components:
1. Support for irrigation infrastructure development; 2. Strengthening of the governance system and improvement of agricultural water management; 3. Development of agricultural water and promotion of the business climate; 4. Promotion of gender, energy conservation and agricultural water protection.
1. SUPPORT FOR IRRIGATION INFRASTRUCTURE DEVELOPMENT The conservation and development of water resources is at the core of priorities to be promoted in order to ensure the country’s sustainable economic and social development. The PNEEI, PRD and PMH areas are strategic programmes for irrigation water conservation and extension of irrigation facilities.
The main objective of this component, which is to improve irrigation infrastructure planning, will help to enhance visibility in the programming and execution of new facilities (dam and related areas), as well as the conversion of irrigation systems and programming of the necessary support for water development.
To achieve this objective, the Government will implement actions aimed at: - Improving instruments for irrigation infrastructure planning; - Conducting development studies under the National Irrigation Water Conservation Programme (PNEEI), the Irrigation Extension Programme (PEI) and Small-and Medium- Scale Waterworks (PMH) areas. Appendix 1 Page 8/9
2. STRENGTHENING OF THE GOVERNANCE SYSTEM AND IMPROVEMENT OF AGRICULTURAL WATER MANAGEMENT The objectives of this component are to: 2.1 Consolidate the agricultural water governance system; 2.2 Strengthen the management of demand for water resources; 2.3 Strengthen integrated water resources management.
To achieve these objectives, the Government will implement actions aimed at: - Consolidating water service reform and launching public-private partnership ; - Initiating institutional reforms of ORMVAs in order to adapt them to the PMV-driven context ; - Enhancing AUEA performance and developing good practice tools; - Developing integrated water resources management tools; - Enhancing the use of treated wastewater for irrigation ; and - Identifying new water resources.
3. DEVELOPMENT OF AGRICULTURAL WATER AND PROMOTION OF THE BUSINESS CLIMATE The objectives of this component are to: 3.1. Improve the business climate and private agricultural investment; 3.2. Upgrade value chains; 3.3. Initiate reform of agricultural research and the public and private agricultural council system.
To achieve this objective, the Government will implement the following measures: - Strengthening of the aggregation mechanism and inter-trade organizations; - Strengthening of agropolis operationalization ; - Strengthening of the incentives system: Agricultural Development Fund (FDA) ; - Development of agricultural insurance ; - Reinforcement of the promotion of high value added and local products : - Development of outreach agricultural services by introducing an incentives system for agricultural service corporations (mechanization) ; - Introduction of innovative approaches for agricultural research and training by conducting the study on the National Agricultural Training and Research Strategy (SNFRA) ; - Reinforcement of framework conditions for the establishment of the private agricultural council.
4. PROMOTION GENDER, ENERGY CONSERVATION AND AGRICULTURAL WATER PROTECTION The objectives of this component are to: 4.1 Improve gender mainstreaming; 4.2 Promote energy conservation in the agricultural sector; 4. 3 Strengthen water resources monitoring and protection; 4.4 Intensify efforts to mitigate the effects of climate change in Morocco.
These objectives will be achieved by implementing the following measures: - Developing energy conservation options for the agricultural sector ; - Strengthening water optimization, monitoring and protection tools ; - Developing a NAMA for the agricultural sector.
Appendix 1 Page 9/9
IV- Reform Programme Monitoring and Implementation Conditions
In addition to programme operational monitoring-evaluation which will be conducted jointly by the Strategy and Statistics Department and the Department of Irrigation and Agricultural Area Development of the Ministry of Agriculture and Sea Fishery, a steering committee comprising the representatives of ministries and bodies involved in the programme (Ministry of Agriculture and Sea Fishery, Ministry of the Economy and Finance, Secretariat of State in Charge of Water Resources and Environment, Ministry of Energy and Mines, Agency for Agricultural Development and Agency for Renewable Energy Development and Energy Efficiency) will be set up in the Ministry of the Economy and Finance. This committee will be responsible for ensuring inter-ministerial coordination and strategic monitoring of the implementation of this programme.
Considering the scope of this reform programme, which is a continuation of efforts already undertaken, the Government of Morocco is counting on the support of your institution in the form of a sector budget support.
As we thank you for the African Development Bank’s interest in the development of the agricultural sector,
Please accept, Mr. President, the assurances of my highest consideration. Appendix 2 Page 1/6
MOROCCO- GREEN MOROCCO PLAN SUPPORT PROGRAMME-PAPMV MATRIX OF PROGRAMME MEASURES
Data Sources: DS; Responsible Institutions: RI (1) Condition for the disbursement of the first tranche of the loan; (2) Condition for the disbursement of the second tranche of the loan PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) COMPONENT 1: SUPPORTING IRRIGATION INFRASTRUCTURE DEVELOPMENT 1. 1 – IMPROVE Irrigation Prepare a road map for EEI Road map is prepared Additional areas DS: Road map note IRRIGATION infrastructure by 2020 converted to localized RI: DIAEA/DE INFRASTRUCTUR planning irrigation E PLANNING instruments are Design a national EEI The PNIEEI is designed Additional areas DS: Note on PNIEEI available Investment Programme by converted to localized RI: DIAEA 2020 (PNIEEI) irrigation Prepare a National Irrigation The National Irrigation Additional areas DS: Note on CNI Map (CNI) for Morocco(2) Map is prepared converted to localize RI: DIAEA irrigation Establish a monitoring- The monitoring- Areas studied DS: Note on SSE evaluation system for PNEEI evaluation system is RI: DIAEA and PEI designed Areas developed Develop a road map to reduce Road map is prepared Additional areas DS: Road map note gap noted till the end of 2011 developed annually RI: DIAEA between areas dominated by dams and those developed for irrigation PNEEI, PEI and Finalize studies under tranche Studies on collective Areas studied for DS: Study briefing note PMH programmes 2 on collective conversion (20 conversion projects are conversion RI: DIAEA development 000 ha), feasibility of projects available studies are for the development of 4 GH Feasibility studies of Areas studied for available areas (108 800 ha), and AHA projects are extension planned development of 4 available PMH areas (11 300 ha) IP PMH development studies are available Finalize studies under tranche Studies on collective Areas studied for DS: Study briefing note 3 on collective conversion to conversion to localized conversion RI: DIAEA localized irrigation (20 000 irrigation projects are ha), HA feasibility studies of available Areas studied for PMH areas associated with the extension Appendix 2 Page 2/6 PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) 12 existing dams and those Feasibility studies on under construction (36 650 ha) AHA projects are available An integrated Establish an inter-ministerial Number of meetings Reducing of gap DS: Meeting minutes planning committee (MEF, PMMA, between dams and RI:MEF coordination MEMEE, etc.) to promote the associated areas mechanism has integrated planning of dams been established and associated areas COMPONENT 2: STRENGTHENING OF THE GOVERNANCE SYSTEM AND IMPROVEMENT OF AGRICULTURAL WATER MANAGEMENT 2. 1 – STRENGTHEN The water service Launch the economic policy The framework The second generation DS: Framework THE reform is analysis of the irrigation memorandum is of reforms in the memorandum AGRICULTURAL strengthened and sector reform prepared irrigation sector is WATER public-private launched RI: DIAEA GOVERNANCE partnership is Study on PPP SYSTEM Launch the study on the Competitive bidding DS: Publication of launched structuring of PPP in Dar launched structuring conducted competitive bidding Khroufa irrigation RI: DIAEA Design a feasibility study on The feasibility study is PPP feasibility study SD: Note on feasibility PPP in Dar Khroufa irrigation designed is conducted RI: DIAEA The institutional Initiate reflection on prospects ToR are prepared A Task Force is set DS: Task Force road map reforms of for the institutional reform of up ORMVAs are ORMVAs RI: DIAEA initiated to adapt Prepare a road map for the ORMVA institutional Reforms are initiated DS: Note on roadmap them to the institutional reform of reform road map is context driven by ORMVAs in view of prepared RI: DIAEA PMV developments in PMV (DRA, ONCA, NAHO, PPP, laws, etc.) and Advanced Regionalization (2) 2.2 – STRENGTHEN The performance Initiate reflection on the role TOR are prepared A Task Force is DS: TOR MANAGEMENT OF of AUEAs is of agricultural water users established DEMAND FOR enhanced and best associations (AUEAs) in RI: DIAEA WATER practice tools modernized irrigation systems RESOURCES developed Launch a programme to build Programme is designed Number of AUEA DS: Training Programme AUEA capacity and launched trained RI: DIAEA Prepare a localized irrigation Guide is available Dissemination of DS: Good Practices Guide good practice guide guide RI: DIAEA Appendix 2 Page 3/6 PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) 2.3 – STRENGTHEN Integrated water Conduct studies on water Water table contracts Concerted and DS: Summary of studies INTEGRATED resources table contracts for the two are examined sustainable WATER management tools water tables management of RI: MEMEE-D. Water RESOURCES are developed groundwater MANAGEMENT The water table contracts for Water table contracts Concerted and DS: Water table contract two water tables are being are being considered for sustainable considered for approval approval management of RI: MEME-DE/ABH groundwater Initiate establishment of a System for the Integration of DS: Note on SSC system for the monitoring and monitoring and control protection measures control of groundwater tapping (SMC) of groundwater in PMV RI: MEMEE-D. Water tapping is established The use of non- Launch the study on the Competitive bidding is Areas developed DS: Publication of conventional Master Plan for the Reuse of launched competitive biding water for Treated Wastewater (TWW) irrigation is in irrigation RI: DIAEA enhanced Develop tools to promote the The project bank and The potential for the DS: Project bank, Good reuse of treated wastewater in Good Practices Guide reuse of treated Practices Guide irrigation are available wastewater is identified RI: DIAEA New water Prepare a roadmap for the Roadmap is available Groundwater DS: Road map resources are artificial recharge of water recharge projects are identified tables being implemented RI: MEMEE-D. Water COMPONENT 3: DEVELOPING AGRICULTURAL WATER AND PROMOTING THE BUSINESS CLIMATE 3. 1 – IMPROVE THE The aggregation Transmit the Bill on Bill is tabled before Number of projects DS: Transmittal letter BUSINESS CLIMATE mechanism is agricultural aggregation to Parliament subsidized RI: DAAJ, ADA AND PRIVATE strengthened the SGG AGRICULTURAL Draft implementing Implementing DS: Implementing INVESTMENT instruments of the law on instruments are drafted instrument agricultural aggregation IR : DAAJ, ADA Transmit the Bill on inter- Bill is tabled before Number of inter- DS: Transmittal letter trade organizations to the Parliament trade organizations RI: DAAJ, DF, DDFP SGG formally set up Draft the implementing Implementing DS: Implementing instruments of the law on inter- instruments are drafted instrument trade organizations RI: DAAJ, DF, DDFP The Formulate an action plan for Action plan is Rate of marketing of DS: Action plan operationalization agropolis promotion and formulated Meknes and Berkane RI: DDFP Appendix 2 Page 4/6 PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) of agropolis is marketing agropolis lots reinforced Implement the action plan for Action plan is DS: Agreements and promoting agropolis operational contracts concluded marketing (2) RI: DDFP Initiate studies on the Contract to carry out The Meknes and DS: Contract to carry out establishment of regional study on the Meknes Berkane regional study on the Meknes and agro-food sub-sector and Berkane competitiveness Berkane competiveness competitiveness centres around competiveness centres centres are centres the Meknes and Berkane established RI: DDFP agropolis The incentives Reinforce the resources Amount of resources Amount of FDA DS: Finance Law system (FDA) is allocated to the FDA allocated to FDA subsidies disbursed RI: DF/MEF strengthened Agricultural Finalize the study on The study on Number of products DS: Road map note insurance is agricultural insurance and agricultural insurance recommended RI: DF developed draw up a road map and road map are available Improve the agricultural Number of Penetration rate of DS: Follow-up Note insurance penetration rate farmers/hectares agricultural RI: DF (AI) in the cereal sector insured insurance Launch new AI products Number of products Number of sub- DS: Contracts covering several sub-sectors actually launched sectors insured, RI: DF and risks Number of risks insured 3.2 - UPGRADE THE Promotion of Launch a communication plan The communication Number of targeted DS: Note on PC VALUE CHAINS high value added to promote local products plan (CP) is formulated sub-sectors RI: ADA and DDFP and local (LP) products Implement an action plan to The action plan is SD: Note on Action Plan enhanced promote local products operational IR: ADA and DDFP Prepare specifications for Formulate the specifications Specifications are Number of DS: Note on specifications products eligible for a for Doukkali grapes available Specifications and files submitted distinctive origin and quality submitted RI: DDFP mark (SDOQ) (Midelt apples, Tafraout almonds and Ouazanne olive oil) Implementation of the Number of training Number of DS: Note on training days geographical indication of days; beneficiaries and number of beneficiaries three products (Granada, Sefri, RI: DDFP Midelt apples, Tafraout Appendix 2 Page 5/6 PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) almonds) Transmit the Bill on the Bill submitted to the DS: Transmittal Letter biological production of SGG Area/Number of RI: DAAJ, DDFP agricultural and aquatic producers converted products to the SGG to biological Finalize the implementing Implementing production DS: Implementing instruments of this law instruments drafted instruments (biological production) RI: DAAJ, DDFP Outreach Establishment of an Specifications are SSAs are established DS: Specifications agricultural incentives scheme for drawn up and signed or benefit the SSA RI: DF, DAAJ services are agricultural service regime for youths developed companies (mechanization) 3.3 - INITIATE Innovative Design a road map to involve The road map is Research and DS: Road map REFORM OF approaches for professionals and the private designed development is RI: DEFR AGRICULTURAL agricultural sector in the competitive adapted to needs RESEARCH AND research and research and development THE PUBLIC AND training are mechanism PRIVATE introduced AGRICULTURAL Conduct a study on the Strategy is available Action plan DS: SNFRA COUNCIL National Agricultural Training RI: DEFR MECHANISM and Research Strategy (SNFRA) Framework Transmit to the SGG the Bill Bill is forwarded to the ONCA organization DS: Transmittal letter conditions for the on the establishment of the SGG RI: DEFR, DAAJ establishment of National Agricultural Council ONCA action plan the public and Board (ONCA) Partnership private framework agricultural Transmit to the SGG the Bill Bill transmitted to the Number of private DS: Transmittal Letter council are on the organization of the SGG extension officers RI: DEFR, DAAJ strengthened profession of private approved agricultural extension officer Draft the implementing Implementing Number of private DS: Implementing instruments of the law on the instruments available extension officers instruments organization of the profession commissioned RI: DEFR, DAAJ of private agricultural extension officer COMPONENT 4. PROMOTING GENDER, ENERGY CONSERVATION AND AGRICULTURAL WATER PROTECTION 4.1 - IMPROVE The GE is Launch a diagnostic study and The diagnostic study and Gender measures are DS: Study; Action plan GENDER institutionalized an action plan for gender action plan are prepared adopted RI: DEFR, MAINSTREAMING Appendix 2 Page 6/6 PAPMV Measures PAPMV Measures Target Output Target Outcome Data Sources and Objectives Outputs 1st Tranche 2nd Tranche Indicators Indicators Responsible Institutions (October 2012) (October 2013) in MAPM and the mainstreaming in the PMV integration youths in PMV is improved Conduct a study on support Diagnostic study is Opportunities for DS: Terms of Reference for young agricultural initiated youth settlement are RI: ADA entrepreneurs (young considered graduates) Initiate training and support Youth settlement PMV measures DS: Settlement projects the settlement of young projects are designed targeting youths are RI: ADA, DEFR graduates more visible 4.2 - PROMOTE Options for water Finalize the Regional Biomass Four biomass plans are Biomass project DS: Master Plan ENERGY and energy Master Plan in four regions formulated under the PMV RI: ADEREE CONSERVATION IN conservation for THE the agricultural Identify investment project Two portfolios and 10 Biomass projects are DS: Portfolio and Studies AGRICULTURAL sector are portfolios in two regions feasibility studies are financed under the RI: MEMEE-ADEREE SECTOR available available PMV Conduct energy audits of At least 10 energy audits Energy saving DS: Energy audits agro-industrial units (UAIs) of UAIs and 5 audits of measures are RI: ADEREE and farms farms are available integrated in the PMV Initiate the implementation of At least 10 PPEs in UAIs Energy saving DS: Performance Plan the Energy Performance Plan and at least 5 PPEs in measures are RI: ADEREE (PPE) on agro-industrial units farms; EE PPEs integrated in UIAs and farms Good Practices Guides in and farms farms 4. 3 - STRENGTHEN Tools for Transmit the Framework Bill The Framework Bill on Legal and DS: Transmittal Letter THE MONITORING optimization, on the National Environment the National environmental RI: MEMEE/D. Env. AND PROTECTION monitoring and and Sustainable Development Environment and framework OF WATER protection of Charter to the SGG Sustainable Development strengthened RESOURCES water are Charter transmitted to the reinforced SGG Support the establishment of At least 6 OREs are Reinforced DS: Establishment decision Regional Observatories for the available in 2013 and 6 environmental RI: MEMEE/D. Env. Environment (ORE) in 2014 monitoring 4.4 - ENHANCE An agricultural Develop an agricultural sector Agricultural NAMA Development of DS: NAMA EFFORTS TO NAMA is NAMA Document available NAMA RI MEMEE/D.Env. MITIGATE THE available EFFECTS OF CC IN MOROCCO Appendix 3 Page 1/3
Conditions Precedent to Budget Support Specific PSO Eligibility Criteria/Sector Budget Support (SBS) (Section 6.2 of the New Bank Group's Policy on Programme-Support Operations (PSOs) - Approved on 14 March 2012)
Criteria Key Points Government's Morocco has implemented social policies, particularly under the National commitment to Human Development Initiative (INDH). These reforms contributed to poverty reduction improving social indicators and reducing the poverty rate from 15.3% to 9% between 2000 and 2010. In 2012, the Government initiated regionalization
reform, the second phase of the INDH, and the extension of medical coverage to disadvantaged populations throughout the country. These reforms are expected to help improve the quality and efficiency of public services so as to reduce poverty and vulnerability.
The new Moroccan Government presented its Policy Statement to the Moroccan Parliament in January 2012. Commitments focus on five major
pillars: (i) strengthening of the unified national identity; (ii) consolidation of the
rule of law, advanced regionalization and good governance; (iii) establishment
of a competitive and diversified economy; (iv) development and
implementation of social programmes to reduce poverty; and (v) strengthening
of Morocco's position worldwide. This programme, which seeks to deepen
macro-economic and sector reforms so as to stimulate economic growth and
strengthen the capacity of the economy to withstand external shocks, is
accompanied by a series of detailed medium- and long-term sector strategies,
including the Green Morocco Plan which, through the second pillar, lays
particular emphasis on the development of smallholder agriculture and poverty reduction in areas with fragile ecosystems (oasis, mountain, etc. areas). Macro-economic This stability is illustrated by the macro-economic and financial performance stability recorded in recent years. At the economic level, even with the prevailing global
financial crisis, the economic fundamentals have been preserved through the
adoption of appropriate fiscal measures (taxation, staple product price subsidy,
etc.).
In the past, the Government demonstrated its commitment to initiate structural reforms by successfully implementing Public Administration Reform Support Programmes (PARAP I to III), Financial Sector Adjustment Programmes Appendix 3 Page 2/3
(PASFI I to IV), the Financial Sector Development Support Programme (PADESFI), and the Medical Cost Recovery Support Programme (PARCOUM I and II).
In keeping with the new PSO policy guidelines, consultations with the International Monetary Fund (IMF) have been initiated, although the IMF has no office in Morocco. Also, Morocco does not have a programme with the IMF. The only consultations between Morocco and the IMF take place within the framework of those under Article IV, of which the latest date back to November 2011. The conclusions of these consultations indicate that Morocco’s economic performance is very good. However, the country still faces challenges, in particular youth unemployment. Unemployment among young graduates is still high (13.8%). In this context, it is necessary to accelerate structural reforms to: (i) create fiscal space, particularly through reform of the remuneration system, and (ii) improve productivity and the business climate so as to strengthen the role of the private sector as an engine of
inclusive and sustainable growth, generating jobs for the youths. Satisfactory The Bank's fiduciary services (ORPF.1 and 2) carried out a fiduciary risk assessment of the assessment in Morocco in August 2011 and updated it during the preparation of fiduciary risk PAPMV, in accordance with guidelines on the fiduciary risk management
framework for ADB Reform Support Operations (approved in May 2011). This
assessment concludes that the residual fiduciary risk in Morocco is generally
low. This is based on the latest diagnoses of public finance management,
procurement and the level of corruption, including reforms initiated under
PARAP I to IV and the new Organic Finance Law being drafted, as well as
favourable prospects for their continuation. It also concludes that budget
support operations fully using the public expenditure channel may be
continued, subject to the implementation in the medium term of some
mitigation measures recommended. Thus, the next support programme on public administration (planned for 2012) will be an opportunity to incorporate measures to rapidly finalize strategic reforms initiated and establish a unified and effective framework for the planning and coordination of public finance
Appendix 3 Page 3/3
management reforms.
The Moroccan regime is a constitutional monarchy and the Kingdom's Political stability institutions are strong and stable. Political changes occur through free and fair
elections, and civil society is very active. In response to the events and
uprisings of 20 February, the King proposed major constitutional reforms that
were voted by referendum and adopted, and also authorized the organization of
early elections.
Harmonization In accordance with the principles of the Paris Declaration, donors consult each other regularly in Morocco through consultations in the form of thematic meetings and sector working groups. The partnership between donors operating in Morocco is illustrated by operations implemented jointly by the ADB, the World Bank and the European Commission (PARAP, PASFI, PADESFI, and PAPNEI). Partnership in the agricultural sector will be strengthened within the framework of this programme involving other donors (World Bank, EU, AFD, Belgian Cooperation, GEF, etc.). Support from multilateral and bilateral donors for the implementation of the Government's agenda has been constant and massive. For the PMV, a Thematic Group has been set up to coordinate operations.
Appendix 4 Morocco COMPARATIVE SOCIO-ECONOMIC INDICATORS
Developing Developed Year Morocco Africa Countries Countries
Basic indicators GNI per capita $ EUR Area (1000 Km²) 711 30 323 80 976 54 658 Total Population (millions) 2011 32, 3 1 044 5 734 1 240 4000 Urban Population (% Total) 2011 58.8 40.4 45.5 75.4 3000 Population Density (per Km²) 2011 45.4 34.0 69.1 23.3 2000 GNI per capita (USD) 2010 2 850 1 492 3 726 38 746 1000 Labour Force Participation -Total (%) 2011 34.5 60.7 65.4 67.3 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Labour Force Participation -Women (%) 2011 26.6 50.1 49.2 50.2 Gender-related Development Index Value 2007 0,625 0,433 0,694 0,911 Human Development Index (rang among 187 countries) 2011 130 n.a n.a n.a Morocco Africa Population Living below USD 1 a day 2007 2.5 n.a 22.4 …
Demographic Indicators Population Growth Rate – Total (%) 2011 1.0 2.3 1.3 0.4 Population Growth Rate - Urban (%) 2011 2.0 3.4 2.3 1.0 Population < 15 years (%) 2011 27.7 40.2 28.7 16.5 Population Growth Rate % Population >= 65 years (%) 2011 5.6 3.6 5.9 16.2 2.5 Dependency Rate (%) 2011 49.8 77.6 53.0 48.6 Sex ratio (per 100 female) 2011 96.1 100.0 103.4 94.6 2.0 Female Population 15 - 49 years (%) 2011 28.4 22.3 26.2 23.6 1.5 Life expectancy at Birth – Total (years) 2011 72.2 57.7 67.0 77.7 Life expectancy at Birth – Female (years) 2011 74.5 58.9 68.9 81.1 1.0 Crude Birth Rate (per 1000)) 2011 19.2 33.6 21.1 11.4 0.5 Crude Mortality Rate (per 1000) 2011 5.8 11.1 7.8 10.1 0.0 Infant Mortality Rate (per 1000) 2011 30.0 72.7 47.1 6.1 2003 2004 2005 2006 2007 2008 2009 2010 2011 Under-5 Mortality Rate (per 1000) 2011 33.1 113.8 67.8 7.8 Total Fertility Rate (per woman) 2011 2.2 4.3 2.6 1.7 Maroc Afrique Maternal Mortality Rate (per 100 000) 2008 110.0 530.7 290.0 15.2 Women Using Contraceptives (%) 2006-09 63.0 28.6 61.2 72.4
Health and Nutrition Indicators Physicians (per 100 000 people)) 2009 68.0 58.3 109.5 286.0 Nurses (per 100 000 people) 2009 97.0 113.3 204.0 786.5 Life Expectancy Births Attended by Trained Personnel (%) 2009 63.0 51.1 65.3 … (years) Access to Safe Water (% of Population) 2010 83.0 64.5 86.3 99.5 71 Access to Health Services (% of Population) … 65.4 0.0 0.0 61 2007-09 51 Access to Sanitation (% of Population) 2010 70.0 39.0 56.1 99.9 41 Percent. Of Adults (aged 15-49) Living With HIV/AIDS 2009-10 0.1 4.7 0.9 0.3 31 21 Incidence of Tuberculosis (per 100 000) 2010 91.0 239.2 150.0 14.0 11 1 Child Immunization Against Tuberculosis (%) 2010 99.0 79.9 83.9 95.4 2003 2004 2005 2006 2007 2008 2009 2010 2011 Child Immunization Against Measles (%) 2010 98.0 71.1 84.3 93.5 Underweight Children (% of children under 5 years) 2000-10 9.9 25.6 17.9 … Daily Calorie Supply per Capita 2007 3 236 2 462 2 675 3 285 Morocco Africa Public expenditure on Health (as % of GDP) 2009 5.3 5.7 2.9 7.4
Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2010 113.7 100.8 107.8 101.4 Primary School - Female 2010 110.3 97.3 105.6 101.3 Infant Mortality Rate Secondary School -Total 2010 56.1 46.7 64.0 100.2 (per 1000) Secondary School - Female 2010 51.8 41.6 62.6 99.8 100 Primary School Female Teaching Staff (% of Total) 2006-11 51.0 45.3 60.8 81.7 90 80 Adult Illiteracy Rate -Total (%) 2009 56.1 67.0 80.3 98.4 70 Adult Illiteracy Rate -Male (%) 2009 68.9 75.8 86.0 98.7 60 Adult Illiteracy Rate -Female (%) 50 2009 43.9 58.4 74.9 98.1 40 Percentage of GDP Spending on Education 2009 5.4 4.6 4.1 5.2 30 20 10 Environmental Indicators 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Land Use (Arable Land as % of Total Land Area) 2009 18.0 7.6 10.7 10.8 Annual rate of Deforestation (%) 2007-09 … 0.7 0.4 -0.2 Annual Rate of Reforestation (%) 2007-09 … 10.9 … … Morocco Africa Per capita CO2 Emissions (metric tons) 2009 1.1 1.1 3.0 11.9
Source: ADB Statistics Department database Last updated in: May 2012 World Bank WDI ; UNAIDS; UNSD; OMS, UNICEF, WRI, UNDP, Country Reports Notes: n.a. Not Applicable; …: Data not available.
Appendix 5
Status of Donor Support for the Green Morocco Plan (PMV)
Total Project Donor Project Duration Donor Projects Nature of Financing Cost (in Contribution Beneficiary (in years) Dh million (in Dh million)
Agricultural Sector Policy Support Programme State Budget (PAPSA) in the Oriental, Fès Boulemane, Grant 3 - 770.00 Meknès Tafilalet and Souss-Massa Draa regions (Budget support) Budget European Union - 770.00 Morocco Avian Influenza Preparedness Project: Union Technical assistance (studies, training, purchase of Project grant 2 - 7.60 MAPM Budget equipment)
grant 0 Budget Modernization of irrigated agriculture in the Oum Rbia Watershed (Doukkala, Haouz and Project loan 5 983.00 567.60 MAPM Budget Tadla) World Bank loan 983.00 567.60 Budget Developme nt Policy Loan (PPD1): Support for PMV reforms (Procurement, Pillar II, Agricultural water State Budget Bank Loan (Budget 1 - 1 650.00 and agricultural services) support) Budget National Irrigation Water Conservation 650.00 Project loan 5 781.86 589.60 MAPM Budget Programme Support (Tadla, Moulouya Loukkos Doukkala) Operation for Technical Support to the Development of loan 781.86 589.60 Budget ADB Irrigation Infrastructure in Morocco financed with Project grant 2 7.00 6.20 MAPM Budget Middle -Income Countries Trust Fund (MICTF) resources B grant 7.00 6.20 Budget Technical Support for the Promotion of Young Project grant 3 7.54 6.33 MAPM Budget )Agricultural Entrepreneurs (JEA) Programme for the Development of grantProject loan 7.54 6.33 191.10 Budget Agricultural Sectors in the Mountainous 7 305.00 MAPM Budget Areas of Taza Province 4.20 loan 191.10 FIDA Project for the Development of Agricultural Sector Project loan 305.00 55.42 Budget Production in the Mountainous Areas of Al Haouz 4.20 5 80.00 MAPM Budget A Province loanGrant 55.42 1.19
0 Budget Project loan 550.00 Programme for the Support of PMV Pillar II in the t 1.19 French regions of Tangier-Tetouan, Fès-Bouleman and 5 842.00 MAPM Budget Dev. Agency Taza Taounate-Al Hoceima loanGrant 550.00 3.30 h . 0 Budget Agency Integration of the Effects of Climate Change in t 3.30 the PMV (PICCPMV) Project grant 4 272 45.00 MAPM Budget GEF grant "Solidarity-based Integrated Agriculture in 2 45.00 Budget Morocco" (ASIMA) Project Project grant 238 53.55 MAPM Budget F grant Project loan 92.40 KFW PMH 3 9 8141.68 5 3.55 MAPMBudget Budget loan 4.18 92.40 W 3Integrated Programme for the 141.68 Budget 4.18 Development of Fruit Trees in the Northern Provinces (Larache, Tetouan, Project grant 5 234 200.00 MAPM Budget Chefchaouen and Al Hoceima Taounate) grant HASSAN II FUND 4 200.00 Budget Support Programme for Solidarity-based Agriculture FUND Agriculture within the framework of PMV in 23 Project grant 5 2231 600.00 MAPM Budget Provinces in ten regions of the Kingdom grant 1 600.00 BudgetProject USAID Economic Competitiveness Programme Project grant 5 216.00 216.00 developeProjects grant Project for the Improvement of the Irrigation Beneficiaryrs DJICA Project grant 5 216.00 55.80 216.00 55.80 System in the Doukkala Irrigated Area farmers y A TOTAL grant 55.80 55.80 5 669.47 s Exchange rate applied: EUR 1 = MDH 11; USD 1: MDH 8.5 L 669.47
Appendix 6 BANK OPERATIONS PORTFOLIO IN MOROCCO (Status, May 2012)
DécaissementAccrued MontantUndisb. amount non Taux décaissements PartShare inin AverageAge delaiEffect. MontantApproved approuvé amount disb.cumulé en AnnulatioCancel. EffectivenessDate de décaisséin en cumulésCumulated (en %) dansinIn NumberNom ApprovalDate SignatureDate de DateClosure de moyenProjec miseDeadline en MonnaieLoan inmonnaie loan cur. du prêt nin en ProjectNom du Name Projet Datemise en lomonnaiean cur du prêt lethe bre Dated'approbation signatureDate clôtureDate projetAge vigeur ducur. prêt parby project projet /in / en loanmonnaie vigueur parby project projet /in /en Disbursement tt portefPortf (an)(Year) (Month(mois) euroEUR bypar currencydu prêt Rate EUR bypar sector secteur euille enin loan monnaie currency du secteursector enin UA Unités de Project. prêt(Total (total by par Actuel compte 2012 sect.Sect. inen EUR) EUR) AGRICULTURALSECTEUR AGRICOLE SECTOR 2.1 3.5 48,641,851 55,310,809 2,254,112 111,846,755 4.1% 17.3% 3.3% 1 Tech.Projet Support d'ap. tech. to the prom. Young jeunes Entre.P entrepreneursrom. Project - MICDON GRANT PRI 1212-janv.-12-Jan.-12 44-May-12-May-12 44-May-12-May-12 3030-juin-14- June -14 0.3 UC 497,000 497,000 497,000 2 Irrig.Projet Water d'ap. Saving au Prog. Supp. nat. Prog. d' eco. (PNEEI) d'eau d'Irrig. (PNEEI) 14-déc.-0914- Dec.-09 04-mars-1004- Mar - 2-Jul-102-Jul-10 3131-Dec-15-Dec-15 2.4 6.7 EUR 47,651,651 53,590,000 1,609,400 51,980,600 3.0% 17.0% Tech.Ass. Tech. Ass. to progr. South Protec.Morocco sauvegarde Oasis Protec. des and oasis Con. duProg. Sud du Maroc 3 2828-avr.-09-Apr.-09 31-juil.-0931-Jul.-09 31-juil.-0931-Jul.-09 3030-juin-13- June -13 3.1 3.1 UC 496,000 496,000 386,338 109,662 77.9% 60.0% (POS) - - MICDON GRANT PRI 4 Tech.Appui Support tech. dév. to Infras. Infrastr. Dev d’irrigation - - MICDON GRANT PRI 2121-févr.-11- Feb.-11 17-mars-1117- Mar - 1717-mars-11-mars-11 31-déc.-1231- Dec.-12 1.2 0.8 UC 494,200 494,200 158,834 335,366 32.1% 32.1%
TRANSPORTSECTEUR TRANSPORTS SECTOR 2.7 7.7 510,263,406 585,678,000 51,733,548 533,944,452 8.8% 17.4% 34.2% 5 2nd2è phase phase Progr.of Nat. RuralNation. Roads de routes Programme rurales (PNRR (PNRR 2) 2) 55-sept.-07-Sept.-07 23-nov.-0723-Nov.-07 88-mars-08-Mar-08 31-déc.-1331- Dec.-13 4.7 6.2 EUR 41,754,428 45,000,000 45,000,000 0 100.0% 100.0% 6 Third3ème Airport Projet Project aéroportuaire 1616-avr.-09-Apr.-09 8-mai-098-May-09 2222-oct.-09-Oct.-09 31-déc.-1331- Dec.-13 3.1 6.3 EUR 214,456,130 240,000,000 5,940,008 234,059,992 2.5% 11.0% 7 DistributionRéparation of ouvrages Struct. 7 ports7 ports - - DONMIC GRANT PRI * * 0101-avr.-10-Apr.-10 17-mars-1117-Mar-11 1717-Mar-11-Mar-11 3131-août-12-Aug-12 2.1 11.7 UC 600,000 600,000 12,675 587,325 2.1% 100.0% 8 TangerProjet -d'augm.Marrakech de Rail. capa. Cap Ferrov. Dev. Project Tanger-Marrakech 17-déc.-1017- Dec.-10 17-mars-1117- May -11 3030-Jun-11-Jun-11 31-déc.-1631- Dec.-16 1.4 6.5 EUR 253,452,8253,452,84747 300,000,000 778528.02 299,221,472 0.3% 10.0% ENERGYSECTEUR SECTOR ENERGIE 3.3 7.5 251,830,388 277,820,000 11,623,998 98,196,002 4.2% 11.5% 16.9% 9 OuarzazateProjet d' energie Solar Energysolaire Project de Ouarzazate 1616-mai-12- May -12 EUR 150,000,000 168,000,000 10 ElectricityProgr. déve. Transmissio réseau ntransp. and Distr. et réparti. Development élect. Project 02-déc.-0902-Dec.-09 11-déc.-0911-Dec.-09 2929-Apr-10-Apr-10 31-déc.-1431- Dec.-14 2.5 4.9 EUR 101,830,388 109,820,000 11,623,998 98,196,002 10.6% 29.0% SOCIALSECTEUR SECTOR SOCIAL 2.2 0.3 970,406 1,139,937 544,942 594,995 47.8% 20.6% 0.1% 11 Ass. tectech.h. establishment mise en place SIG SIG & health & carte map sanité - - MICDON GRANT PRI 12-déc.-0812- Dec.-08 23-déc.-0823- Dec.-08 2323-déc.-08- Dec.-08 AnnulationCancellation 3.4 0.4 UC 500,000 500,000 0 500,000 0.0% 0.0% 12 Appui strat.strat. de dével.vel. enseig. enseig. Privés Privés - - MICDON GRANT PRI 11-mars-1111-Mar-11 17-mars-1117- Mar - 1717-mars-11-Mar-11 31-déc.-1231- Dec.-12 1.2 0.2 UC 470,406 470,406 470,406 0 100.0% 50.0% WATERSECTEUR AND EAU SANITATION ET ASSAINISSEMENT SECTOR 3.2 7.7 309,565,848 365,074,246 88,694,996 276,379,250 24.3% 42.0% 20.7% 13 NinthNeuvième DWSP Projet d'AEPA 21-juil.-0621-July.-06 18-déc.-0618- Dec.-06 16-mai-0716- May -07 3030-juin-13-June-13 5.8 10.0 EUREUR 70,666,446 81,000,000 63,900,423 17,099,577 78.9% 90.0% 14 SecondDixième DWSP Projet d'AEP 16-nov.-0816- Nov.-08 26-déc.-0826- Dec.-08 17-juil.-0917-Jul.-09 31-déc.-1331- Dec.-13 3.5 8.1 EUR 30,702,510 33,840,000 11,247,016 22,592,984 33.2% 60.0% 15 SecondDixième DWSP Projet d'AEP 16-nov.-0816- Nov.-08 26-déc.-0826- Dec.-08 17-juil.-0917-Jul.-09 31-déc.-1331- Dec.-13 3.5 8.1 USD 34,540,816 53,340,000 12,918,748 40,421,252 24.2% 60.0% 16 EleventhOnzième Rabat Projet-Casa d'AEPA DWSP Rabat-Casa 1212-mai-10- May -10 1919-août-10-Aug-10 13-janv.-1113-Jan.-11 31-déc.-1431- Dec.-14 2.0 8.2 EUR 135,258,333 162,310,000 0 162,310,000 0.0% 12.0% 17 ElOnzièmeeventh Rabat Projet-Casa d'AEPA DWSP Rabat-Casa 1212-mai-10- May -10 1919-août-10-Aug-10 13-janv.-1113-Jan.-11 31-déc.-1431- Dec.-14 2.0 8.2 USD 36,706,667 55,060,000 3,123,581 51,936,419 5.7% 12.0% 18 HaouzProjet Artificialrecharge Groundwater artificiel. nappe Recharge du Haouz Project - AWFDON GRANTFAE ** ** 1212-janv.-09-Jan.-09 88-mai-09- May -09 8-mai-098- May -09 30-nov.-1230-Nov.-12 3.3 3.9 EUR 1,691,076 1,892,500 815,550 1,076,950 43.1% 100.0% MULTISECTORSECTEUR MULTISECTEUR 1.4 1.6 201,445,338 225,734,406 134,529,840 91,204,566 59.6% 99.6% 13.5% 19 GuaranteeProjet d'améliorat. Syst. Improv. du syst. Project de garantie - DONMIC GRANT PRI 1919-janv.-11-Jan.-11 17-mars-1117- Mar - 1717-mars-11-Mar-11 31-déc.-1331- Dec.-13 1.3 1.9 UC 464,988 464,988 159,388 305,600 34.3% 26.3% 20 Fin.Projet Market de renf. Dev. du Reinforcement contr. marché. Project fin. - DONMIC GRANT PRI 13-déc.-1013- Dec.-10 17-mars-1117- Mar - 1717-mars-11-Mar-11 31-déc.-1231- Dec.-12 1.4 3.1 UC 480,350 480,350 171,410 308,940 35.7% 30.0% 21 FiProjetnancial de Sector dévelop. Development du Secteur Project Financier II (PADESFI II (PADESFI-II)-II) 23-nov.-1123- Nov.-11 23-Nov-1123-Nov-11 66-déc.-11- Dec.-11 31-déc.-1231- Dec.-12 0.5 0.4 EUR 200,000,000 224,000,000 134,000,000 90,000,000 59.8% 100.0% 22 Instit.Appui supp inst. SG SG UMA UMA ( Multinational) - MIC- DON GRANT PRI 3030-avr.-09-Apr.-09 2828-mai-09-May-09 28-mai-0928- May -09 30-déc.-1230- Dec.-12 3.0 0.9 UC 500,000 500,000 110,735 389,265 22.1% 100.0% 23 Statistical Capacity Capacity Building Building II II 15-mars-1115-Mar-11 UC 490,000 PRIVATESECTEUR SECTOR PRIVE 1.4 5.1 170,250,000 188,611,111 609,000 14,391,000 4.1% 3.0% 11.4% 24 ArFondgan Arganinfrastruc. pour Development le développement Fund. des infrast. 1717-févr.-10-Feb.-10 21-juil.-1021-Jul.-10 2121-juil.-10-Jul.-10 31-déc.-1831- Dec.-18 2.2 5.1 EUR 14,000,000 15,000,000 609,000 14,391,000 4.1% 3.0% 25 LoanPrêt àto l'Office Cherifian Chérifien Phosphate des Authority Phosphates /ψ 2929-juin-11- June -11 1010-mai-12- May -12 1010-mai-15-May-15 0.9 USD 156,2156,250,00050,000 250,000,000 /? Summary:Récapitulatif: DistributionRépartition sectorielleof operations des by opérations sector ApprobationsApprovals (EUR (millions million EUR) SituationStatus of disbursementsdes décaissements Portfolio amount Montant Total du portefeuille Agric 1,492,967,237 904 TxEst. déc. dis. prév.rate at fin end 2012-2012 TxDis. de rate décais. in mid mi-mai-May 2012 2012 InEn UA Unités de compte 1,492,967,237 PrivéPrivate 3.3% LoansPrêts (15 projects)projets) 1,487,770,217 11.4% 100% GrantsDons (10 (10 projets) projects) 5,197,020 Multis 643 634 InEn EU EurosR 1,699,368,508 ect. 13.5% Transp 476 60% Actuel Proj. 2012 48% TotalMontant amount Total of des disbursements décaissements in EUR en Euros 289,990,436 521,550,838 34.2% 42% DisbursementTaux de décaissement rate 21.4% 30.7% 31% Water/San.Eau/as 158 21% 24% 21% AverageMontant amountmoyen parper prêtloan (en(in UA)UC) 99,184,681 17% 17% 20.7% 9% 11% AverageDelai moyen effectiveness de mise en time vigeur frame (mois) (month) 5.0 4% 4% 3% 4% LoansPrêts 6.1 GrantsDons 3.1 Energ 2008 2009 2010 2011 proj. Agric Transp. Energ. Social Eau/ass. Multisect. Sect.Priv. MoyenneAverage AverageAge moyen portfolio du portefeuille age (year )(an) 2.3 Social 16.9% 2012 privéSect. LoansPrêts 2.6 0.1% GrantsDons 2.1 Note: LesGrey zones areas gisée correspond correspondent to operations à des that opérations are not yetnon in encore force en vigueur ( ?):ψ): ProjectProjet nonnot yetencore operational en vigueur and ettherefore par conséquent not included non ininclus the calculation dans la détermination of the overall du portfolio taux de disburse décaissementment rate global du portefeuille. * MIC:PRI: PaysMiddle à- Incomerevenu intermédiaireCountries ** AWFFAE :: FacilitéAfrican Waterafricaine Facility de l'eau