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Government of Sierra Leone European Union Government of Sierra Leone European Union European Commission - Sierra Leone Cooperation JOINT ANNUAL REPORT 2005 Final Freetown, July 2007 EC - Sierra Leone Cooperation – JAR 2005 TABLE OF CONTENTS 1 Executive Summary _____________________________________________________ 1 2 Update of political, economic and social situation _____________________________ 2 2.1 Update of the political situation__________________________________________ 2 2.2 Update of the economic situation ________________________________________ 4 2.3 Update of the social situation____________________________________________ 9 2.3.1 Health _________________________________________________________________ 9 2.3.2 Education _____________________________________________________________ 11 2.4 Update of the environmental situation ______________________________________ 12 3. Overview of past and ongoing cooperation __________________________________ 12 3.1 Focal sectors and macroeconomic support __________________________________ 14 3.1.1 Focal Sector 1 - Rehabilitation of Priority Infrastructure _______________________ 14 3.1.2. Focal Sector 2 - Good Governance and Institutional Support ____________________ 16 3.1.3 Macro-economic support _________________________________________________ 17 3.2 Projects and programmes outside focal sectors ______________________________ 18 3.3 Utilisation of resources for Non-State Actors ________________________________ 19 3.4 Utilisation of B envelope _________________________________________________ 19 3.5 Other instruments ______________________________________________________ 20 3.5.1 STABEX ______________________________________________________________ 20 3.5.2 SYSMIN_______________________________________________________________ 20 3.5.3 Regional Cooperation ____________________________________________________ 20 3.5.4 Intra-ACP Cooperation: __________________________________________________ 21 3.5.5 Community Budget Lines _________________________________________________ 21 3.5.6 ECHO ________________________________________________________________ 22 3.5.7 European Investment Bank (EIB) __________________________________________ 22 4. Programming Perspectives for the Following Years ________________________ 23 4.1 Pipeline and absorption capacity __________________________________________ 23 4.2 Proposed revision of strategy _____________________________________________ 23 4.3 Preparation of the next programming exercise_______________________________ 26 5. Conclusions __________________________________________________________ 27 Annexes___________________________________________________________________ 3 2 EC - Sierra Leone Cooperation – JAR 2005 1 Executive Summary Sierra Leone is in a phase of consolidation of peace but still in a difficult situation marked by fragile security, depleted infrastructure and imbalanced economy. Over the past four years, with the assistance of international partners, Sierra Leone has made significant steps forward securing peace. Progress has been made in the consolidation of state authority throughout the country as Police, Army and civil authorities establish their presence at provincial and district level. Former combatants have participated in a DDR programme and significant strides have been made in curbing illicit diamond mining. The overall political and security situation has further enhanced by positive developments in neighbouring Liberia. Sierra Leone can now begin to take systematic steps towards confronting its longer-term development challenges, and to address the root causes of conflict. The transitional period from post-conflict recovery to development has begun with the first PRSP for the years 2005-2007. This ambitious document underlines the enormous task ahead and the risks and challenges to be addressed on the way to sustainable growth and stability. The PRSP – the National Programme for Food Security, Job Creation and Good Governance - has three pillars: Good Governance, Peace and Security; Pro-poor Sustainable Growth, and Human Development. The decentralisation exercise is progressing but more slowly than expected. Following the May 2004 elections, GoSL, donors and civil society have embarked on a process of building capacity for decentralisation and local governance. On the central level, efforts are being made to reform government institutions and build their policy making and implementation capacities. The most important pending structural reform is the strengthening of the justice system. Transitional justice institutions continued their efforts in 2005. The TRC report was published in May 2005 but the GoSL has still to implement its recommendations. Economically, the country has remained broadly on track with IMF and World Bank benchmarks and, the first PRGF was successfully concluded during the year 2005. As Sierra Leone moves “from post-conflict to development”, the country continues to benefit from and depend on ongoing large scale international support. Within the high level Development Partnership Committee (DEPAC), all relevant issues are being discussed, including benchmarks agreed under the Consultative Group meeting (CG, Paris 2002). Cooperation between the EC and GoSL remains largely on good terms, and the Delegation continues to be involved in most of the major processes in governance, infrastructure and social sectors, in advisory and project related functions. With ongoing programs under previous EDFs and planned interventions under the 9th EDF (CSP signed July 2003), the EC support continues to address a number of critical issues. The Poverty Reduction Budget Support Programme became effective in 2005 providing much needed assistance to the GoSL. In 2005 the Mid-Term Review of the CSP & NIP concluded that the overall country performance was “very good” with EDF global commitments amounting to 72.5m€, thus achieving a 104% of targeted figures. The amount of individual commitments was impressive: 123.3 m€, equivalent to 110% of the target set. It was the highest figure in the history of EC-Sierra Leone cooperation and more than double than in 2004. Payments also moved very well during this year reaching 100% (67.5m€) of targeted figures. * [Further to the M-T Review the ETR was finalised by December 2006 and appraises the country's financial performance at the highest rank, good, the sectoral and governance performances average, agreeing to no revision of the country allocation (Envelope-A) and transfer of balance of funds from Envelope B (M€ 5.7) to the reserve. The Addendum to the * Words inserted into brackets indicate additions to the initial JAR 2005 report (April 2006), which were considered necessary during the final editing following the in-country review meeting of 5 July 2007. 1 EC - Sierra Leone Cooperation – JAR 2005 Country Strategy Paper and National Indicative Programme was signed the by the President of Sierra Leone, and the Head of European Commission Delegation on 25 May 2007]. 2 Update of political, economic and social situation 2.1 Update of the political situation Security and stability: While peace has been secured in Sierra Leone, it has yet to be consolidated. Approximately 68 % of the population are living below the national poverty line and, although not yet perceived as a major security risk, there is a growing discontent over the slow improvement of living conditions. The adoption in March 2005 of PRSP linked to the budget exercise and an effective monitoring system should facilitate further economic developments. In order to implement this strategy, however, Sierra Leone must confront a number of immediate phenomena linked to its longer-term challenges: Endemic poverty and corruption, and massive unemployment among its primarily young population. Massive unemployment (particularly of youths) is a potentially destabilising factor for the country and the region. The development process in Sierra Leone must accelerate to ensure food security and to create long term employment which can only materialise in an environment of good governance, economic growth and continued and determined efforts by the Government. If left unaddressed, these phenomena heighten the prospects for insecurity and violence, and thus severely obstruct implementation of longer-term development plans. Improved governance remains the foremost challenge to the effective performance of state institutions, with weak governance increasingly alienating the public from the political process. The existence of out-dated and improperly implemented regulatory frameworks for business has kept away investment that could generate economic growth, and hence reduce popular frustration. With the return of peace the majority of Sierra Leonean refugees have since returned home from neighbouring countries. However, very few returnees have been recorded from the Diasporas in Europe and the USA resulting in a serious post conflict brain drain. The movement of refugees is limited to returning Liberians, currently numbering approximately 39,000. The majority of remaining IDPs is in Freetown or provincial towns choosing not to return. During 2005 further steps were taken to move Sierra Leone from a post-conflict society to a stable democratic order. This was highlighted by the developments in the areas of security, reconstruction, public services, governance, institutional development and economic recovery, as detailed below. The sub-regional environment that helped precipitate that conflict has changed considerably, but considerable regional challenges remain a risk.
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