Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized
Report No. 32625-SN
INTERNATIONAL DEVELOPMENT ASSOCIATION
PROGRAM DOCUMENT
Public Disclosure Authorized FOR A
PROPOSED SECOND POVERTY REDUCTION SUPPORT CREDIT
IN THE AMOUNT OF SDR 20.8 MILLION
(US$30 MILLION EQUIVALENT)
TO THE
REPUBLIC OF SENEGAL Public Disclosure Authorized
February 28,2006
Poverty Reduction and Economic Management 4 Country Department 14 Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties, Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents (As of January 3 1,2006)
Currency Unit = CFA Franc (CFAF) US$1 = CFAF 540
Fiscal Year January 1 - December 3 1
ABBREVIATION AND ACRONYMS
BCEAO Banque Centrale des Etats de 1 'Afrique de 1 'Ouest (Central Bank of West African States) BCI Budget Consolide' d 'Investissement (Consolidated Investissement Budget) CAS Country Assistance Strategy CDD Community Driven Development CEM Country Economic Memorandum CFAA Country Financial Accountability Assessment CFAF Franc ofthe African Financial Community CNCA Caisse Nationale du Cre'dit Agricole (National Agricultural Credit Fund) CNP Comite' National de Pilotage (National Steering Committee) CPAR Country Procurement Assessment Report CSLP Monitoring Unit for Poverty Reduction DCMP Direction ofMarche's Publics within the Ministry of Finance and Economy DPT3 Diphtheria Polio Tetanus 3 EIA Environmental Impact Assessment ESAM Enquite Se'ne'galaise auprBs des Me'nages (Household Survey and Core Welfare Questionnaire) FDD (Decentralization Funds) FECL Fund for Local Governments' Equipment (Fonds de Dotation u la De'centralisation) FIAS Foreign Investment Advisory Service FONDEP Professional Development Fund (Fonds de Formation Professionnelle) FSP Financial Sustainability Plan GDP Gross Domestic Product GNP Gross National Product HIPC Heavily Indebted Poor Country HIViAIDS Human Immuno-deficiency Virus/Acquired Immune Deficiency Syndrome IBRD International Bank for Reconstruction and Development ICC Interagency Coordinating Committee IDA International Development Association IFC International Finance Corporation
i IMCI Integrated Management of Childhood Illness IMF International Monetary Fund JSAN Joint Staff Advisory Note LDP Letter ofDevelopment Policy MDGs Millennium Development Goals MFFDS Ministere de la Famille et du Ddveloppement Social (Ministry of Family and Social Development) MOE Ministry of Education MOF Ministry of Finance MOH Ministry of Health MTEF Medium-term Expenditure Framework NEAP National Environmental Action Plan OHADA Organization for Harmonization ofAfrican Commercial Law ONEQP Obsewatoire National de 1 'Emploi et des Qualijkations Professionnelles (National Office of Professional Qualifications and Employment) PER Public Expenditure Review PHC Primary Health Care PNDS National Health Developement Plan (Plan National de Ddveloppement Sanitaire) PRGF Poverty Reduction and Growth Facility PRS Poverty Reduction Strategy PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Strategy Paper PRSP PR Poverty Reduction Strategy Paper Progress Report REER Real Effective Exchange Rate ROSC Report on the Observance of Standards and Codes RPED Regional Program on Enterprise Development SAC Structural Adjustment Credit SDR Special Drawing Rights SIG Systeme lintegrd de Gestion (Integrated Accounting System) SIGFIP Systeme de Gestion des Finances Publiques (Public Finance Management System) SNPS National Social Protection Strategy (Stratkgie National de Protection Sociale) UNDP United Nations Development Programme WAEMU West African Economic and Monetary Union
Vice President: Gobind T. Nankani (AFRVP) Country Director: Madani M. Tall (AFC14) Sector Manager: Robert R. Blake (AFTP4) Task Team Leader: Jacques Morisset (AFTP4)
i
THE REPUBLIC OF SENEGAL
SECOND POVERTY REDUCTION SUPPORT CREDIT (PRSC-11)
TABLE OF CONTENTS
CREDIT AND PROGRAM SUMMARY...... V 1. INTRODUCTION ...... 1 2. COUNTRY CONTEXT ...... 2 A. RECENTECONOMIC DEVELOPMENTSIN SENEGAL ...... 2 B. MACROECONOMICOUTLOOK AND DEBTSUSTAINABILITY ...... 5 3. THE GOVERNMENT’S PROGRAM...... 6 A. FIRST AND SECOND PRSP PROGRESS REPORTS...... 7 B. TOWARDTHE NEW PRSP (2006-08) ...... 9 4. BANK SUPPORT TO THE GOVERNMENT’S STRATEGY ...... 10 A. LINK TO THE COUNTRYASSISTANCE STRATEGY (CAS) ...... 10 B. PRSC AGENDAAND RELATIONSHIP TO OTHERBANK OPERATIONS ...... 10 C. ANALYTICAL UNDERPINNINGS...... D. COLLABORATION WITH THE IMF AND OTHERDONORS ...... E. PRSC-I ACHIEVEMENTSAND LESSONSLEARNED ...... 16 5. THE PROPOSED PRSC-11...... 19 A. OPERATIONOVERALL DESCRIPTION ...... B. POLICY AREAS...... 20 B1. Budgetary and Civil Reforms of the State ...... 21 B2. Strengthening the Decentralization Process...... 24 B3. Improving Health Services ...... 26 B4. Promoting Wealth Creation...... 29 B5. Increasing the Protection of Vulnerable Groups ...... 33 6. OPERATION IMPLEMENTATION ...... 35 A. POVERTYAND SOCIAL IMPACTS...... B. IMPLEMENTATION, MONITORINGAND EVALUATION...... C. FIDUCIARY ASPECTS...... 38 D. DISBURSEMENTAND AUDITING ...... 38 E. ENVIRONMENTALASPECTS...... 40 F. RISKS AND RISK MITIGATION...... 40
List of Schedules
Schedule 1: Letter ofDevelopment Policy ...... 43 Schedule 2: Evaluation of prior actions under PRSC-I1 ...... 65 Schedule 3: Matrix ofPolicy Actions and Results ...... 67 Schedule 4: List ofMonitoring Indicators ...... 83
... 111 List of Annexes
Annex 1: Key Economic Indicators...... 86 Annex 2: Key Social Indicators ...... 88 Annex 3 : Key Exposure Indicators ...... 89 Annex 4: Balance ofPayments ...... 90 Annex 5: Operations Portfolio (IDA and Grants) ...... 91 Annex 6: Statement ofIFC’s Disbursed Portfolio ...... 92 Annex 7: IMF Relations Note ...... 93 Annex 8: Country at a Glance (includes country map # IBRD 33475) ...... 95
List of Tables
Table 2.1 : Selected Economic Indicators...... 4 Table 4.1 : Summary of Main Lending Operations and Key Analytical Underpinnings ...... 13 Table 4.2: Sequencing Agenda ofthe PRSC ...... 12 Table 4.3: Main Reform Measures Implemented under PRSC-I ...... 17
List of Figures
Figure 6.1: Institutional Framework ...... ’...... 38
List of Boxes
Box 5.1: Prior actions for PRSC-I1 ...... 21 Box 5.2: Toward using outcome indicators for the health sector ...... 28 Box 5.3: World Bank’s Assistance to Wealth Creation...... 30 Box 6.1 : Indicative triggers for PRSC-I11 ...... 37
The Credit was prepared by an IDA team led by Jacques Morisset. (AFTP4) . The core team consisted of Julie Van Domelen. Moukim Temourov (AFTH2). Fily Sissoko. Emile Finateu (AFTFM). Bourama Diaite (AFTPC). Aissatou Diack. Eric De Roodenbeke (AFTH2). and Julien Bandiaky (AFTP4) . Other members also included Maryse Pierre Louis. Catherine Farvacque. Frangoise Perrot. Sidi M. Boubacar. Agnes Albert.Loth. and Iradj Alikhani. Peer reviewers are: Gaiv Tata and Carlos Calvancanti. Judite Fernandes (AFTP4) provided logistical support .
iv THE REPUBLIC OF SENEGAL
SECOND POVERTY REDUCTION SUPPORT CREDIT (PRSC-11)
CREDIT AND PROGRAM SUMMARY
Borrower: Government of Senegal
Implementing Agency: Ministry of Economy and Finance
Amount: SDR 20.8 million (US$30 million equivalent)
Terms: IDA terms with a forty year maturity, including a grace period often years.
Tranching: One tranche released at the Effectiveness ofthe Credit
Description: The Second Poverty Reduction Support Credit (PRSC-11) will support the implementation of Senegal’s Poverty Reduction Strategy (PRS) by narrowing the gap between the cost of implementing its key elements and resources available from the Government’s own domestic revenues and other donor support. This one-tranche operation would be the second of a planned series of three PRSCs (US$30 million each) and will aim at strengthening the three cross- cutting and institutional issues that were emphasized in PRSC-I:
Fiduciary reforms of the State, by strengthening budgetary and financial procedures (including those linked to remuneration of the public sector), and procurement; Decentralization process, by securing financial transfers to local governments as well as disseminating and implementing the PSR agenda at the local level; and Health services, with a focus on improving information, financial and human resources management in the sector, as well as enhancing the access to improved quality basic health services identified as important factors for determining the performance ofthis sector.
Concurrently, in view of the progress achieved under PRSC-I, PRSC-I1 would also expand its coverage to two additional areas that are perceived as crucial for PRS implementation in the country: (i) promoting wealth creation through the support of ongoing reforms in the labor market and of improvements in the judiciary system; and (ii)improving the living conditions of the most vulnerable groups. In so doing, the PRSC agenda will gradually strengthen the basic elements of the investment climate and reinforce a social protection strategy and poverty alleviation of the poorest segments ofthe population, which are long-term objectives for Senegal.
V Benefits: By focusing on economy-wide policy and institutional issues, the proposed PRSC-I1 is expected to help Senegal to implement its PRS in three ways: First, the reforms supported by the operation will help maintain economic growth and improve living conditions for the population. Second, the program associated with the Credit will enhance Government’s ownership and functionality in policy planning and budget management and, so; help it make progress towards achieving the Millennium Development Goals. Third, the reforms associated with the Credit would promote coordination and collaboration within the Government and among donors, and lead to a comprehensive approach in the delivery ofbasic social services.
Risks: There are several risks associated with PRSC-11: (i)some of the reforms supported by the Credit might encounter resistance from vested interests, especially in the context of the forthcoming elections in 2007, but Government has in the past shown determination in overcoming such special interests; (ii)Government efforts to build broad consensus for reforms through consultative processes may sometimes slow down the pace of reforms; however, the benefit of this approach clearly outweighs the risk; (iii)the utilization of PRSC funds is determined by the budget process and there is a risk that resource allocation may not be fully consistent with the PRS; nonetheless, the Government has adopted an open and participative budget process, including an annual PER which helps to align and monitor resource allocation and its consistency with the PRS; (iv) the CFAA and the CPAR identified significant fiduciary risks, which the proposed reform agenda is meant to address; (v) capacity for program implementation and service delivery at the central and district levels is weak; however, programs are in place to strengthen capacity in key areas; (vi) although Senegal is in its first phase of implementing strategies in the labor and justice areas as well as in the protection of vulnerable groups, the sequencing approach proposed in the PRSC program should help to mitigate the risk of policy indecision; and (vii) Senegal may face exogenous shocks such as climatic changes or locusts invasions.
Operation ID Number: PO91051
vi INTERNATIONAL DEVELOPMENT ASSOCIATION PROGRAM DOCUMENT FOR A PROPOSED SECOND POVERTY REDUCTION SUPPORT CREDIT TO THE REPUBLIC OF SENEGAL
1. INTRODUCTION
1.1 The Second Poverty Reduction Support Credit (PRSC-11) for Senegal is the second of a planned series ofthree PRSCs in the amount ofUS$30 million each. The general thrust of this first series of PRSCs is to: (a) improve the effectiveness and transparency of the national budget process and expenditure management, including at the decentralization levels, as the main instrument to achieve national development goals and reduce poverty; and (b) support attainment of PRS outcomes for improved living conditions of the poor within the PRS time horizon. To the extent feasible, depending on country performance, these credits would be aligned with the budget cycle.
1.2 PRSC-I1 will aim at strengthening the three cross-cutting and institutional issues that were emphasized in PRSC-I:
0 Fiduciary reforms of the State, by strengthening budgetary and financial procedures (including those linked to remuneration ofthe public sector), and procurement; 0 Decentralization process, by securing financial transfers to local governments, as well as disseminating and implementing the PSR agenda at the local level; and 0 Health services, with a focus on improving information, financial and human resources management in the sector, as well as enhancing access to improved quality basic health services identified as important factors for determining the performance ofthe sector.
1.3 Concurrently, in view of the progress achieved under PRSC-I, PRSC-I1 will also expand its coverage to two additional areas that are perceived as crucial for PRS implementation in the country. These two areas are the following: (i)promoting wealth creation through the support ofongoing ,reforms in the labor market and ofimprovements in the judiciary system; and (ii)increasing the living conditions ofthe most vulnerable groups. In so doing, the PRSC agenda will gradually strengthen the basic elements of the investment climate and reinforce a social protection strategy and poverty alleviation of the poorest segments of the population, which are long-term objectives for Senegal.
1.4 The proposed operation will offer critical financial support to the implementation of the PRS in 2006. It is also an integral part ofthe Bank's Country Assistance Strategy (CAS).'
' A new CAS (FY07-10) is under preparation and will be finalized following completion of the Government's new PRSP 2006-10.
1 2. COUNTRY CONTEXT
2.1 Senegal continues to benefit from political stability and strong macroeconomic performance over the past decade. The economy is expected to continue to grow at 5-6 percent in the next few years, pushed by higher public investment and gains in productivity in a few key sectors (electricity, groundnut, water) derived from on-going reforms. The main risks consist of the political cycle, with important elections in the next two years, which may slow down the reform process, and external shocks such as locust invasion or drought. In spite of a marked reduction in the level of poverty over the past decade, Senegal remains a dual economy, with about half of its population living in absolute poverty and an average income per capita of US$6402, underlying the need to continue with structural reforms and the promotion of private sector activities that have not expanded as much as expected over the past five years.
A. RECENT ECONOMICDEVELOPMENTS IN SENEGAL
2.2 Senegal is located on the West Coast of Africa and is part of the West African Economic and Monetary Union (WAEMU). With a population estimated at about 10 million, its economy is dominated by a few strategic sectors, including groundnut, fisheries, and services. The informal sector accounts for about 60 percent of its economy. Its rural economy frequently suffers from drought, and lacks access to basic services and infrastructure, leading to low productivity, high emigration and higher poverty rates in rural areas. About half of the population lives in cities, including 30 percent in Dakar.
2.3 Over the past years, Senegal has enjoyed a stable political climate, and has remained largely unaffected by regional instability. A peace agreement was signed in the Casamance at the end of 2004, generating the donor support for the construction effort, including from the World Bank. In April 2000, Mr. Abdoulaye Wade, third President of the Republic of Senegal, and a new Government assumed office, representing the first transition to another political party since independence. A new Constitution, approved in January 2001, reduced the length of the presidential term from seven to five years and the unlimited number of terms to two. Legislative elections were concluded in April 2001, saw a majority of seats in Parliament won by the President’s Party (Senegalese Democratic Party). The next 18 months will see an increase in political activities since legislative and presidential elections are scheduled to take place in 2007.
2.4 Over the past decade, real GDP grew on average by about 5 percent annually, marking the first sustained increase in average per capita growth in Senegal since independence. The authorities continued to implement appropriate macroeconomic policies in 2004, consistent with Senegal’s three-year arrangement under the IMF’s Poverty Reduction and Growth Facility (PRGF). The Government maintained its focus on enhancing revenue mobilization and a tight control on current expenditure, while allowing for further increases in capital and pro-poor spending. Supported by a well targeted fiscal stimulus and a moderate easing of monetary
Atlas methodology, 2004.
2 conditions by the Central Bank of West African States the economy remained on a solid growth and low inflation trajectory.
2.5 Economic performance was strong in 2004 and 2005. Despite rising petroleum prices and the adverse consequences of the locust invasion, real GDP growth is estimated to have exceeded 5 percent, supported by the dynamism of the telecommunication and construction sectors. While industrial activity slowed down as oil prices rose, the impact on the overall economy was limited. Inflation remained subdued, with the annual average CPI rising by about 0.5 percent in 2004 and 1.8 percent in 2005, reflecting the low weight of energy in the CPI basket and limited rise in some food prices owing to abundant supply.
2.6 Although the overall fiscal deficit increased to 3.3 and 3.5 percent ofGDP in 2004 and 2005, the fiscal stance remained consistent with the authorities’ goal of preserving debt sustainability. Public sector external debt declined by about 12 percentage points, to 42.8 percent of GDP at end-2005. This good performance reflected larger-than expected revenues and grants, an accumulation of deposits of public entities at the treasury, and a decline in current expenditures.’ It was also the result of a series of tax reforms aimed at reducing tax rates and broadening the tax base, especially on direct taxation, paving the way to further tax reforms in 2005 and 2006. These developments offset a sharp increase in capital expenditures caused by a faster than expected rate of project implementation, notably in projects funded by external resources, Spending irregularities of about 1 percent ofGDP occurred in mid-2003 (but came to light in June 2004), requiring the authorities, in consultation with the World Bank and the IMF, to adopt a series of measures aimed at improving procurement practices, including curtailing the use ofemergency procedures (without competitive tender).4
2.7 The recent economic growth has been associated with a widening of the current account deficit from 6.0 percent of GDP in 2002 to 7.6 percent of GDP in 2005. This deterioration was driven by strong domestic demand, mainly from the public sector, and lackluster export performance. However, substantial private capital inflows, combined with debt relief, led to an increase of 23 percent in the net international reserves ofthe Central Bank. The gross official reserves reached about 4.7 months ofimports at the end of2005.
The latest evolution of Senegal’s public finances is analyzed in the recent Public Expenditure Review Update, Report No. 32479-SN, June 2005. For more details, see PRSC-I Program Document (December 2004) or IMF Third and Fourth Review PRGF, January 2006. Table 2.1: Selected Economic Indicators
2000 2001 2002 2003 2004 2005 2006 2007 2008
-9 11 10 Annual average inflation (“A) 0.7 3.0 L.3 0.0 0.5 1.8 2.6 1.1 I.o
National Accounts (growth rates, YO) Agriculture 3.9 3.4 -20.4 19.4 4.3 7.4 6.0 3.6 3.6 Industry 4.3 4.3 9.8 5.0 7.5 4.6 4.1 5.2 6.0 Services 2.3 5.3 5.7 3.7 6.3 4.7 5.2 5.6 5.2 GDP at market prices 3.0 4.7 1.1 6.5 6.2 5.1 5.1 5.1 5.1 Real per capita GDP 0.4 2.1 -1.3 4.1 4.0 3.3 3.2 3.3 3.2 National Accounts (YOof GDP at current market prices) Gross domestic investment 20.9 19.2 16.7 20.7 23.4 23.4 23.7 23.9 24.0 Public investment 5.8 6.9 7.9 9.1 10.2 9.8 10.1 10.3 10.4 Private investment 15.1 12.2 8.8 11.6 13.2 13.6 13.6 13.6 13.6 Gross domestic savings 10.9 9.5 5.6 7.7 10.7 10.3 11.2 13.5 14.4 Balance of Payments (% of GDP at current market prices) Current account balance (including current official transfers) -6.3 -4.7 -6.0 -6.6 -6.7 -7.6 -7.6 -7.1 -6.5 Current account balance (excluding current official transfers) -8.5 -6.3 -8.0 -8.6 -8.7 -9.2 -9.1 -8.4 -7.8 External Indicators External Public Debt ServiceiExport of Good and Non Factor Services 12.0 9.0 9.2 8.0 6.8 6.2 6.9 7.9 7.7 Gross Official Reserves in months of imports 3.4 3.0 3.3 3.3 3.7 4.1 4.0 3.9 3.8 Government finance (% of GDP at current market prices) Current revenues 18.5 18.0 19.2 19.8 19.7 20.5 20.3 20.2 20.1 Current expenditures 13.2 15.5 13.8 14.2 13.7 15.1 15.0 14.8 14.6 Overall fiscal balance excluding grants (commitment basis) -2.0 -4.4 -1.8 -3.5 -5.5 -5.3 -5.8 -5.4 -5.4 Overall fiscal balance including grants (commitment basis) 0.1 -2.6 0.0 -1.4 -3.3 -3.5 -4.0 -3.4 -3.4 External borrowing (net) 0.5 1.6 2.0 1.8 3.5 3.9 3.1 2.9 2.9 Domestic borrowing (net) -0.7 -0.2 -2.4 -1.1 0.0 -0.3 0.8 0.5 0.5 Monetary indicators Broad money (M2) (% annual growth) 10.7 14.5 7.6 31.5 12.9 16.0 11.0 10.8 9.0 Velocity (GDPiM2; end of period) 3.9 3.7 3.6 2.9 2.8 2.6 2.5 2.4 2.4
HIPC Initiative expenditure (YOof GDP at current market prices) 0.1 0.5 0.1 0.8 0.7 1.6 1.1 1.1 1.o
Current social expenditure (% of GDP at current market prices) Education 2.8 3.2 3.8 3.8 4.1 5.1 4.7 4.4 4.1 Health 0.7 0.9 0.9 1.o 1.o 1.3 1.2 1.1 1.o Current military spending (YOof GDP at current market prices) 1.5 1.4 1.6 1.5 1.4 1.3 1.2 1.1 1.1
Memo: GDP at current market prices (billions of CFA F) 3113.7 3342.7 3472.7 3725.4 4029.2 4345.5 4672.7 5012.5 5372.6 Nominal average exchange rate (CFA F per US$) 710.1 732.4 694.8 520.0 518.2 525.0 525.0 525.0 525.0 Source: World Bank and IMF database
4 2.8 The macroeconomic objectives for 2006 include real GDP growth of about 5.1 percent and consumer price inflation of about 2.6 percent, a slight deterioration due to two external shocks (international oil price increase and flood during August 2005).5 The overall fiscal deficit (including grants) is expected to increase to about 4.0 percent of GDP, partly because of compensating measures required to absorb external shocks (oil price and flood) and higher infrastructure spending6, but it should be almost entirely financed by higher tax revenues and external resources. The external current account deficit (including official transfers) is projected to remain around 7.6 percent of GDP in 2006, as the result of the larger than expected energy imports and the lack of impetus in exports. As discussed in the next section, given the favorable initial macro-economic conditions, low debt levels, absence of central bank financing, and little risk of crowding out the private sector from the credit market, such a level of fiscal and external deficits should be accommodated without undermining macroeconomic stability.
B. MACROECONOMICOUTLOOK AND DEBTSUSTAINABILITY
2.9 The medium-tern scenario is based on real GDP annual growth of about 5 percent and continued low inflation during 2007-2010. This growth rate is about at the same level as the average growth rate since the devaluation of the CFAF in 1994. Its attainment would require the continuous implementation of sound macroeconomic policies, market-oriented structural reforms, and an efficient government investment program. Private savings should increase moderately, facilitated by rising real per capita income and financial sector development. Reflecting these trends, the external current account deficit (including official transfers) would decline marginally from the projected 7.6 percent of GDP in 2006 to around 6.3 percent by 2010. While globally positive, the medium-term outlook is subject to a number of downside risks. Senegal’s economy remains vulnerable to exogenous shocks, including higher oil prices, severe droughts, and locust invasion, and severe political strife in the WAEMU region. The relative fragility of the external balance also emphasizes the need to promote private sector development, especially export-oriented activities. At this stage, the Senegalese export sector lacks dynamism, as it needs to diversify beyond traditional resources such as vegetable oil and phosphoric acid.7
2.10 With monetary and exchange rate policies determined at the regional level, fiscal policy will remain the main instrument of macroeconomic policy in Senegal, supported by structural reforms. Over the recent years, fiscal policy has been conducted in a prudent manner, leading to low primary deficits. This fiscal stance has been buttressed by the cautious monetary policy of the BCEAO, which is aimed at underpinning the exchange rate anchor, and delivering low inflation. The authorities have rightly put increasing attention on the need to improve the
While it is difficult to quantify these risks, the Government estimates indicate that a US$5 per barrel increase in oil prices above the current World Economic Outlook projections would cut average annual GDP growth rate by about 0.6 percentage points during 2005-2010, and would worsen the external current account deficit by about 0.6% of GDP per year during the same period. The recent locust invasion may have lowered economic growth by about 0.8% in 2004. For a discussion on public investment spending and its effectiveness, see recent Public Expenditure Review Update, Report No. 32479-SN, June 2005. ’ A clear indication of the concentration of Senegal’s exports is that in 2002, the top five exports at the 8-digit Harmonized System level represented over 40% of total exports (petroleum, crude vegetable oil, phosphoric acid, lobster and shrimps).
5 allocative and operational efficiencies of public spending as a way to maximize the impact of their fiscal policy on growth and equity. On the structural front, reforms have been implemented in the groundnut and electricity sectors, sometimes with delays and occasional backtracking on initial plans, hindering the realization ofthe country’s growth potential and its poverty reduction goals. Nevertheless, the Government has privatized many public enterprises, enhanced the environment for private sector activities, and made some improvements in the country’s infrastructure. Looking forward, the authorities should continue prudent fiscal policies, and give priority to addressing the structural bottlenecks in order to enhance the efficiency of the economy, particularly in the export sector.
2.1 1 Senegal has exited from the enhanced HIPC Initiative with a good basis for maintaining sustainable external debt levels over the medium term, especially if borrowing remains at concessional terms. The recent Debt-Sustainability Analysis (DSA) conducted by the IMF, revealed low levels of public domestic and external debts, 7 percent and 43 percent of GDP, respectively, at the end of 2005.* These low ratios indicate that Senegal’s public debt should be sustainable over the medium term, even in the case of negative shocks such as a decline in economic growth and/or a deterioration in the terms oftrade. This positive assessment will be reinforced by the latest initiative of G-8 countries, to cancel the Senegalese debt from multilateral institutions (equivalent to a savings of about US$80-100 million in debt-service per year).
3. THE GOVERNMENT’S PROGRAM
3.1 The Government’s strategy PRSP covers the period 2003-2005. The finalization ofthe PRSP, through an intensive participatory process in June 2002, was an important step forward in launching a comprehensive development strategy focused on poverty reduction in Senegal.’ The PRSP was built on four pillars: (i)wealth creation through economic reform and private sector development; (ii)capacity building and development ofsocial services; (iii)improvements in the living conditions of the poor; and (iv) implementation of the strategy and monitoring of its outcomes. Within this context, the authorities provided a sound macroeconomic framework, a detailed analysis ofthe link between this framework and poverty alleviation, and a clear vision of their strategy over the medium to long term. The PRSP suffered from some shortcomings, which the authorities intended to address during the first years ofimplementation. Among them, it was found that the Government’s plans to implement the PRS were not spelled out in sufficient details, notably with regard to a fiscal decentralization strategy that would foster better public services. The poverty diagnostic did not benefit from a complete analysis ofthe new household survey data, and the impact ofspecific measures on the well-being of the poor, was not analyzed in detail. Successful implementation was to require mastering the organizational challenges of monitoring and maintaining progress in structural reforms, especially cross-cutting reforms such as governance and public financial management. The strategy was also subject to substantial
* See IMF, Second Review of the PRGF, February 2005. For additional information, the recent PER update also provides an updated of the Debt Sustainability Analysis, Report No. 32479-SN, June 2005. iwv-w.imf.or~, -: Senegal-Poverty Reduction Strategy Paper and Joint Staff Assessment, December 2,2002.
6 risks outside of Government’s control, especially external shocks affecting the rate of economic growth.
A. FIRSTAND SECOND PRSP PROGRESS REPORTS
3.2 The Government finalized its first PSRP Progress Report in March 2004, following a consultation process with the donor community and participants from the civil society”. The progress report: (i)covered progress realized in the implementation of the PRSP since December 2002, focusing on its main pillars and cross-sectoral themes; (ii)provided an update of the analysis of poverty in Senegal, based on recent data from the household survey of 2001/02; and (iii)discussed perspectives for the period 2004-05. It failed, however, to provide a complete list of indicators necessary to monitor the PRSP implementation over time and a detailed explanation ofthe relationships between the PRSP priorities and actual budgetary processes. The authorities recognized that progress was unequal in 2003, with an encouraging performance in the first and second pillars and a mixed performance in the third and fourth pillars.
3.3 The Government finalized its second PRSP Progress Report in May 2005.’’ The report was prepared through a broad participatory process and covered: (i)progress made in the implementation of the PRSP during 2004 focusing on its main pillars and cross sectoral themes; and (ii)perspectives for 2005. The authorities addressed some of the major shortcomings identified: (i)they developed a detailed analysis of the linkages between the allocation of resources within the budget and the PRSP priority sectors; (ii)they identified and used a series of quantitative indicators to monitor progress over time; and (iii)they strengthened the participatory process with donors, civil society, local governments, and the private sector, most notably during the evaluation and preparation ofthe Report.
3.4 In the second PRSP Progress Report, the Government’s assessment was principally derived from a detailed analysis of the allocation of the 2004 budget compared to the objectives initially set in the PRSP.12 While the overall coverage of the PRSP objectives in the Consolidated Investment Budget (CB) appears adequate, significant variations exist across pillars and sectors. For example, the wealth creation pillar was covered at around 80 percent by the CIB, but the protection of vulnerable groups only marginally. The second pillar on the capacity to deliver social services was relatively well covered by the budget, but the weak implementation of projects contributed to the mixed performance observed in the health and education sectors.
3.5 The Report also provided an evaluation of the PRSP monitoring indicators that were selected through a participatory approach involving all partners operating in Senegal, including donors. That evaluation confirmed the main results derived from the analysis of the budget. It
loSee v.wir..inif.o~.~,nir?~7.n.orldban~.orr:: Senegal-Poverty Reduction Strategy Paper Annual Progress Report and Joint Staff Advisory Note, December 6, 2004. 11 See See www.iiilf.org, w~~l.w.h.orldbank.org:Senegal-Poverty Reduction Strategy Paper Annual Progress Report and Joint Staff Advisory Note, November 11, 2005. ’’ Many ofthese results were obtained through the methodology developed between the Senegalese authorities and the Bank staff during the preparation ofthe recent PER update, June 2005.
7 showed that progress occurred in the education sector with an increase in gross enrollment in primary schools from 76.9 percent in 2003 to 80 percent in 2004 and the construction of 1,103 new classrooms. Similarly, in the health sector, positive results were achieved such as an increase in the DPT3 immunization coverage from 59 percent in 2003 to 85 percent in 2004, higher primary care consultations (up by 8.7 percent between 2003 and 2004), and a larger number of births assisted by trained personnel (from 39 percent in 2001 to 45 percent in 2004). These improvements reflect the larger amount of public resources allocated to these sectors (allocative efficiency) but not necessarily higher operational efficiency. The indicators in terms of decentralization were mixed, with a decline in the amount of financial transfers to local governments from FCFA 17.1 billion in 2003 to about FCFA 14 billion in 2004, even though these transfers were made available three months earlier.
3.6 The mixed performance ofthe PRSP was explained in the second Progress Report by: the following factors: (i)the unequal alignment ofthe budget with PRSP objectives; and (ii)the uneven implementation ofproj ects in some strategic sectors. Beyond this explanation, the mixed performance in the first pillar devoted to wealth creation was also the result ofa lack ofresponse of the private sector. A few sectors such as construction (up by 12.4 percent in 2002 and 10.5 percent in 2003) and telecommunication have expanded faster than the overall economy through the access to new financing (e. g., remittances) and the arrival ofa few new foreign investors, but others such as fisheries and transports have declined over the past few years. This absence of dynamism is partly due to the uneven implementation of key reforms aimed at improving the business environment, including transparency, labor and capital markets, and infra~tructure.'~ The recent Bank's Investment Climate Assessment concluded that, if Senegal labor productivity is one of the highest in the region, it also declined over the last two decades, emphasizing the need to reverse this trend ifSenegal wants to be in a position to achieve stronger and more equitable growth.
3.7 The authorities are aware of existing deficiencies and have started to address them in the course of 2005, paving the way to a new PRSP to be ready in early 2006. These efforts include measures to: (i)improve fiscal transparency and procurement practices, especially through the new adoption ofthe new Procurement Code; (ii)strengthen the links between policy implementation and PRSP objectives, notably through more and efficient decentralization; (iii) finalize and adopt a new National Social Protection to help target and coordinate actions aimed at improving the protection of vulnerable groups; (iv) identify factors constraining the absorptive capacity in both public and private sectors, and thereby facilitate the execution of poverty reducing programs; and (v) strengthen private sector activities through the finalization of a new Accelerated Growth Strategy (AGS) that should help improve the investment climate and infrastructure in five selected sectors and address transversal issues such as administrative barriers, corruption and justice.
l3The indicators listed in the Bank's Doing Business Reports have not improved markedly between 2003 and 2005 in the case of Senegal.
8 B. TOWARDTHE NEW PRSP (2006-10)
3.8 A new PRSP is expected to be finalized in mid 2006, and the Government has shared its preliminary outline. The new PRSP will feature the same first three pillars as in the original PRSP, but it will add a fourth one on transparency and governance. The focus on transparency is justified on the need to strengthen the effectiveness of public spending (through efficient budgetary procedures and controls) as well as to promote private sector development (through better access to justice and less distortions). The authorities have also decided to push forward the decentralization agenda through a series of concerted actions, including (i)increasing the financial autonomy of local governments; (ii)strengthening technical and human capacities at the local level; and (iii)enhancing empowerment of local communities.
3.9 The new PRSP will also include a broadening of priorities, notably in the area of wealth creation, and the development of a more detailed strategy to better protect vulnerable groups. Within this context, the first shift will be to strengthen the role of the private sector as the engine of growth by integrating the new concept of accelerated growth, which will stress three key objectives: (i)a strong potential for growth through satisfactory expansion of private activities and investment over the medium and long-term; (ii)strong job creation; and (iii) competitiveness at the international level so as to increase the country’s exports. The GS will address transversal issues on the investment climate (tax, justice, labor, administrative barriers) and focus on five sectors that are perceived as the ones with the highest comparative advantage for Senegal: (i)agribusiness; (ii)tourism; (iii)telecommunication and new technologies; (iv) textile; and (v) fisheries.
3.10 The second shift will be to consolidate and develop urban mobility both in Dakar and in the main secondary cities. This new emphasis has already been initiated. In 2005, budget capital outlays rose by 0.5 percent of GDP and an ambitious list of projects was proposed to improve the country’s physical urban infrastructure. This shift is justified by the deterioration in living conditions and infrastructures in the agglomeration of Dakar over the past few years as a result of heavy population concentration. Conditions worsened following the flood in the Dakar region in August 2005). The Government will initiate a development program aimed at modernizing the city of Dakar and relocating a number of activities to other cities. A vast development program for secondary cities is under preparation in support of this initiative (e.g. an industrial platform outside ofDakar). It is supported by donors, including the Bank.
3.11 Lastly, in view ofthe limited success in improving the protection ofvulnerable groups, the authorities aim at giving a new impetus to that third pillar of the PRSP by adopting a new National Social Protection Strategy that will reinforce the institutional basis and improve coordination among ministries and between the Government and other partners. The authorities also expect to better define priorities and objectives, notably through a more precise budgetary allocation and clearer results indicators.
9 4. BANK SUPPORT TO THE GOVERNMENT’S STRATEGY
A. LINKTO THE COUNTRY ASSISTANCESTRATEGY (CAS)
4.1 The FY03-05 Country Assistance Strategy for Senegal was approved on April 17, 2003 (Report No. 25498-SN). It supported the Government’s efforts to achieve sustained growth rates, reduce the incidence ofpoverty and improve access to basic social services, as described in the PRSP. The CAS proposed two PRSCs totaling US$50 million. This amount has been increased to US$60 million, in line with resources available under IDA14 and after due consideration ofother priorities.
4.2 The new PRSP is expected to be finalized by the Government in mid-2006. It will form the basis for the next CAS covering the period FY07-10. The new CAS will describe how other parts of the Bank Group, notably IFC, will contribute to the Bank’s program around four proposed main axes: (i)accelerated growth; (ii)urban and rural synergies and infrastructure upgrading; (iii)human resource development; and (iv) governance. To maximize aid effectiveness, the CAS program is being designed to help achieve effective donor harmonization around common Government’s objectives.
4.3 In the Bank’s program, the PRSCs are seen as critical instruments in support of the PRSP agenda, notably in the pillars of budgetary reforms, wealth creation, and the delivery of basic social services to the poorest segments of the population over the medium term. The PRSC provides a more coordinated approach compared to discrete investment projects; it improves project implementation over time by promoting ownership and a better functioning of client’s institutions, and it helps focus internal and external resources and attention on meeting key PRSP objectives and MDGs. It is therefore expected that the FY07-10 lending program will include a third PRSC to conclude the ongoing series, and the launch of a new series of PRSCs to cover additional social sector issues and areas ofthe growth agenda. The share of development policy lending in total lending is expected to remain steady at around US$30 million per annum, about one-quarter ofnew IDA lending.
B. PRSC AGENDAAND RELATIONSHIP TO OTHER BANKOPERATIONS
4.4 The proposed PRSC-I1 allows IDA to consolidate its lending operations and to continue its support to the Government in five key areas: (i)strengthening budgetary and financial reforms ofthe State; (ii)enhancing financial decentralization toward local governments; (iii)improving health services delivery; (iv) promoting wealth creation; and (v) improving the living conditions ofthe most ofvulnerable groups.
4.5 The Bank currently supports the Government in the above five areas through a portfolio ofinvestment projects (see Table 4. l),which reflects the Bank’s comparative advantage and coordination with other donors (see Section D below). It also reflects a sequencing approach through which coverage was gradually broadened to include the last two areas, based on progress
10 realized over time. The grounds for this sequencing approach were discussed in the PRSC-I program document and, thus, is only summarized in Table 4.2.
4.6 The first two areas, budgetary reforms and decentralization, are central to the PRSC instrument, as they support the use of the national budget and fiduciary system as the main vehicle for channeling resources to PRSP priorities. These two areas address crosscutting issues that are expected to have an impact on multiple sectors. They will complement multi-sectoral CDD operations that support wealth creation, provision of social services and reduction of vulnerabilities among the poorest rural communities. l4
4.7 The third area, health, was previously covered in various investment projects. The PRSC approach will support transversal reforms to address the need for major improvements in the quality and supply of essential health care services. Reforms will include a rationalization of budgetary procedures, a new remuneration and recruiting strategies, as well as the decentralization toward local communities. It is worth underscoring that these transversal reforms will also have an impact on the education sector, which is not covered under the PRSC program, as it will continue to receive substantial financial support through alternative lending instruments from the Bank and it will benefit from budgetary support from other donors.15
4.8 The fourth area, wealth creation, benefited from a relative marginal attention under PRSC-I, as it already received the full support of the Bank through a series of programs and lending operations, notably in the areas ofinvestment climate, agriculture, and infrastructure (see Table 4.2 and Box 5.2 in the next chapter for fuller details). Emphasis is now given in the PRSC program to justice and labor-- that have been relatively underfunded by donors and are expected to have significant externalities in the promotion of wealth creation and equity in Senegal. This area is expected to receive more attention in the next PRSCs, notably through coverage of infrastructure and other initiatives in support ofthe Government’s accelerated growth Strategy.
4.9 The fifth and last area improving the living conditions of vulnerable groups is being funded under Bank’s projects through nutrition programs, support to AIDS-affected people, and support to the Casamance reconstruction effort. More support to vulnerable groups comes through domestically-financed investment and transfers, making the PRSC an effective instrument for engaging the Government in a policy and technical dialogue in this area. A recent review of these programs has led to the conclusion that their rationalization is both desirable and feasible, which will be one of the key objectives of the PRSC program, as described in fuller details in the next chapter.
l4The Bank is in the process of consolidating its CDD operations in Senegal, which should result in one new lending operation during FY06 (Participatory Local Development Program). l5The Bank has one lending operation (APL) in the education sector: Quality Education for All. The second phase of the APL will be approved in FY06. The Canadian Cooperation is preparing a budget support operation with an emphasis on the education sector.
11 Table 4.1: Summary of Main Lending Operations and Key Analytical Underpinnings
tical Wo Wealth Creation 1. Private Investment Promotion Credit Country Economic Memorandum (FY04) (FY03) Administrative Barriers Reforms Study 2. Electricity Sector Efficiency (FY02) enhancement (FY05) Integrated Trade Framework (FY03) 3. Private Sector Adjustment Credit Pension Reform Study (FY03) (FY04) FisheryiLivestocWSafety Standards 4. Agriculture Services and Producer (FY04) Organizations (FY99) CFR (FY02) 5. PSAOP, Phase I1(FY06) Investment Climate Assessment Study 6. Agriculture Factor Markets (FY06) (FY05) 7. Long Term Water Sector (FYO1) PER update (FY05) 8. National Rural Infrastructure (FYOO) FSAP (FY05) 9. Social Development Fund Program (FYO1) 10. Transport I1 (FY99) Improving living 1. Rural Electrification (FY05) Poverty Assessment (FY03) zonditions of 2. Casamance Emergency Reconstruction Rural Social Protection Strategy (FY05) vulnerable groups (FY05) Social Impact Assessment -Groundnut 3. Quality Education for All I1(FY06) sector (FY06) 4. Local Authorities Development Program (FY06) 5. Nutrition Enhancement (FY02) 6. HIViAIDS Prevention and Control (FY02) 7. Long-term Water Sector (FYO1) 8. Quality Education for all (FYOO) 9. Social Development Fund Program (FYO1) 10. Participatory Local Communities (FY06) Capacity building 1. Private Sector Adjustment Credit Country Economic Memorandum (FY04) and promotion of (FY04) CFAA (FY03) the basic social 2. Local Authorities Development Project CPAR (FY03) services (FY06) Public Expenditure Review (FY04) 3. National Rural Infrastructure (FYOO) Public Expenditure Review Update 4. Social Development Fund Program (FY05) (FYO1) Public expenditures Tracking survey 5. Long Term Water Sector (FYO1) Decentralization and Decentralization and 6. Urban Mobility Program (FYOO) Civic Engagement (FY04) 7. Quality Education for All I1(FY06) 8. HIViAIDS Prevention and Control CFR (FY02) (FY02) Health Workforce Development Study 9. Participatory Local Communities (FY04) (FY06) Implementation 1. Social Development Fund Program Poverty Assessment (FY03) and Monitoring- (FYO1) Rural Social Protection Strategy (FY05) Evaluation 2. Participatory Local Communities PER Update (FY05) (FY06)
12 Table 4.2: Sequencing Agenda of the PRSC
PRSC-I PRSC-I I PRSC-I11 PRSP ObjectivesMT Results Pillars Labor Labor Ensure better labor market creation management by strengthening the efficiency and transparency ofthe job market, promoting independent employment in rural and urban areas, and encouraging vocational and I professional training.
Justice Justice Improve the legal and judicial framework and reduce time required to ===) process court cases.
Capacity Fiduciary Fiduciary Fiduciary Promote transparency in the building Reforms (CFM Reforms (CFAAI Reforms (CFAAI management ofpublic affairs by and CPAR) CPAR) CPAR) combating corruption and improving promotion the management ofpublic finances. ofthe basic Decentralization Decentralization Decentralization Clarify responsibilities between the social central administration and local services communities, especially regarding their assignment in terms ofrevenue and spending responsibilities. Civil service Civil service Implement civil service reforms that reforms will be consistent with the objectives 3- stated in the PRSP, notably in the education and health sectors. Health Health Health Improve the quality and supply of essential health care services (improvement ofprevention efforts against infectious diseases, and combat maternal and infanuchild mortality) and support capacity building both at central and local level. Decentralization Decentralization Decentralization Secure financial transfers from the central Government to the local Governments and strengthen the institutional framework supporting the implementation ofthe PRSP in the regions. Improving Vulnerable Vulnerable Improve the ability ofvulnerable groups living Groups Groups to access social and economic condition opportunities and prevent, mitigate or of cope with the risks to their well-being. vulnerable Igroups
13 C. ANALYTICALUNDERPINNINGS
4.10 The PRSC benefits from analytical and fiduciary work undertaken by the Bank in support of the four pillars identified by the Government in its PRS, with an emphasis on the State’s capacity building and the promotion of basic social services. A summary of the major analytical pieces conducted by the Bank and their links to the PRSP pillars is contained in Table 4.1 (third column).
4.11 Improving capacity building has retained the attention ofpolicy makers and donors in Senegal. Over the past few years, a considerable analytical effort has been conducted in assessing the effectiveness of public spending in Senegal, including a CFAA, a CPAR, two PERs, an IMF ROSC, and a study on the decentralization process in the country. These pieces have identified the main shortcomings ofthe fiduciary system, as well as helped the authorities to prepare two action plans for reforms in the short and medium terms. Over the past fiscal year, a new PER update was produced on the effectiveness ofpublic investment spending, showing that major improvements need to take place in the management of these resources in Senegal. The proposed PRSC program is based on these action plans and studies.
4.12 Over the past few years, a number of sectoral pieces have been undertaken with the objectives to improve the access and quality of social services. In the health sector (health services coverage and utilization, health workforce analysis, PER including a benefit incidence analysis, private sector delivery assessment), this work has allowed the identification of major constraints. Two Public Expenditure Reviews were recently conducted for the agricultural sector and social expenditures, which should help address current issues and improve the effectiveness ofpublic spending in these two areas.
4.13 In order to improve the diagnostic of poverty, a poverty assessment study was conducted in FY03. In January 2004, a report on poverty in Senegal was produced jointly by the Ministry of Economy and Finance and the Bank, using the data from the 2001/2002 household survey. Over the past year, a series ofcomplementary studies were finalized to better understand the factors behind poverty levels and variations in Senegal, including an analysis of the main determinants of poverty since the devaluation of December 1994. A recent report provided a detailed analysis of risks and vulnerabilities in the rural areas.16 The poverty and social impact assessment ofthe groundnut sector is ongoing.
4.14 The investment climate and the promotion of private sector development have also received considerable attention, including the CEM, and two recent FIAS studies on taxation and administrative barriers. An investment climate assessment was conducted in FY05, confirming that the main constraints faced by the private sector are the lack of access to credit, severe administrative obstacles, corruption and the poor functioning ofjustice, labor regulations, as well as the lack of qualification of the labor force. As a result, the Government has initiated a substantial effort to improve the investment climate, notably through tax reforms and the rationalization of administrative barriers faced by private investors. National programs have been developed in the areas ofvocational training and justice.
l6 Word Bank, Rural Protection Strategy, July 2005.
14 D. COLLABORATION WITH THE IMF AND OTHER DONORS
4.15 Coordination with other donors has played a pivotal role in the PRSC process. The design ofPRSC-I was the outcome of an intensive participatory process between the Bank’s team and the PRSP Secretariat, and subsequently all development partners, notably among those that have also opted to deliver assistance through budgetary support: EU, France, Dutch, and Canada. For example, policy matrices were exchanged on a regular basis and satisfactory implementation of the CFMCPAP action plans was viewed by all donors as the basis for their financial support.
4.16 Donor coordination has continued to receive full attention during the preparation of PRSC-11, notably around the following four major activities:
0 CFMCPAR action plans: Since budgetary support relies on the existence of transparent and efficient fiduciary procedures, all the donors have continued to focus on the implementation of these two action plans, notably through the coordination of a working group. The Bank is also managing a Multi-Donor Trust Fund aimed at enhancing technical capacity in this area.
0 Selectivity: Beyond the common support to fiduciary reforms, donors have opted to select a few priority sectors for each of their planned budgetary operations, so as to avoid duplication and take into account the relatively limited size of their respective operations. For example, the budgetary support provided by the Dutch has focused on the environmental sector, while the Canadian Cooperation will encourage reforms in the education sector.
0 Monitoring indicators: A close collaboration has emerged in the definition of monitoring indicators used to evaluate the overall PRSP implementation. When possible, these indicators have been retained for the monitoring of the PRSC program over time so that duplication can be avoided, thereby reducing pressures on limited government human and financial resources.
0 Working groups: The five working groups created around the areas covered by the PRCS-I1 have counted on the participation of government officials, private sector representatives and other donors. Not only have these groups been increasingly active, but they also have played a catalyst role in the areas of decentralization and vulnerable groups.
4.17 The IMF supports the proposed PRSC-I1 agenda and is expected to continue to play a crucial role in two areas. First, the reform program supported under PRSC-I1 is based on the implementation of the PRGF arrangement. The PRSC program is closely coordinated with the PRGF according to agreed institutional division of labor, with the IMF taking the lead on macroeconomic sector issues and the Bank on structural and social issues. In a number of areas where the mandate of the two institutions overlap, there is close coordination and collaboration to ensure that consistent advice is provided to the authorities (e.g., financial reforms derived from the FSAP or pensions). Maintaining macro-economic and fiscal stability is part of the PRGF reviews and will be an important input into the assessment ofthe macroeconomic situation by the
15 Bank. Second, the implementation offiduciary and human resources reforms in the public sector enhances the successful implementation ofthe PRGF. The Government has indicated that it will explore the possibility of exiting the PRGF arrangement upon its expiration in April 2006. The Government would like to explore options for other types of arrangements with the Fund. These will be based on the outcome of upcoming Board discussions on the financial instruments for Fund support to low-income countries.
4.18 Over time, the scope and the content of donor coordination will focus more on developing joint evaluation and monitoring mechanisms. Joint financing could also be envisaged, as some donors have expressed their willingness to join the Bank’s program. The team strongly expects coordination to improve further under PRSC-I11 and PRSC-IV.
E. PRSC-I ACHIEVEMENTSAND LESSONSLEARNED
4.19 Overall, PRSC-I was successful in supporting the Government’s effort to achieve results in the three main areas supported by the program.” Senegal was able to achieve noteworthy progress in budgetary reforms, decentralization, and health services as reported in Table 4.3 below. While many actions focused on strategic and institutional reforms, a series of concrete results were obtained by the authorities, as noted by the positive evolution of a series of monitoring indicators. For example, in the health sector, the commitment to improve the implementation of immunization programs led to an increase in DPT3 coverage from 59 percent in 2003 to over 85 percent in 2004. More efficient budgetary procedures allowed the authorities to significantly improve the execution rate of the investment budget, up from 67 percent in 2003 to 83 percent in 2004. Progress was also achieved in the area of wealth creation and the protection of vulnerable groups. Strategies were finalized in the areas ofjustice and vocational training, while an Interministerial Committee was created with the mandate to harmonize the National Social Protection Strategy and monitor its implementation over time.
4.20 The implementation of the PRSC-I has led to multiple lessons, four of which are emphasized below. The first key lesson is that the budgetary approach is an effective tool to mobilize the entire Government on cross-cutting issues. This was apparent in the health sector where pending measures related to the reorganization of the Ministry were achieved through the involvement of the Ministry of Economy and Finance. The PRSC approach helped to reinforce the needed institutional anchor on issues that involved several Ministries and agencies, such as decentralization and the protection ofvulnerable groups.
4.21 The second lesson is that the PRSC approach needs to rely not only on the PRS but also on sectoral strategies approved by the Government and the multiple partners operating in Senegal. This sequencing has proved to be very effective in the areas of budgetary reforms where PRSC-I was developed on the basis of the existing CFMCPAR action plans. It has allowed better coordination and commitment toward a core set ofreforms. For this reason, under the PRSC-I, special emphasis was given to the development of clear sectoral strategies in the other areas supported by the PRSC program, such as health and justice. Under PRSC-11, it is
” For more details, see ICR, November 2005.
16 planned that the authorities will finalize their strategies in social protection and vocational training.
4.22 The third lesson is to align the preparation ofthe PRSC with the national budget. The PRSC program captures a number of policy reforms and outcomes that will depend on actions funded through the national budget. Unfortunately, due to unexpected delays in the PRGF and in the effectiveness ofthe Bank’s Private Sector Adjustment Credit, the PRSC-I was not included in the 2005 budget. Such a precautionary measure -since it is more difficult to cut than to add budgetary resources, generated a great deal of uncertainty around the allocation of PRSC funds over time. The Senegalese authorities have committed to include PRSC-I1 funds in the preparation ofthe 2006 Budget.
4.23 The fourth lesson relates to the need to clearly define actions and outcomes. If possible, monitoring indicators should be taken from existing programs and those defined in the PRSP. Such an effort will avoid subsequent difficulties in interpreting targets and outcomes over time and will minimize duplications in monitoring progress. For example in the health sector, efforts have been made under PRSC-I1 to rely on indicators monitored through the regular information system, rather through new surveys.
Table 4.3: Main Reform Measures Implemented under PRSC-I
Policy Area Budgetary and financi .eforms Budget Execution and Initiation of the decentralization of Increase in the execution rate ofthe treasury financial execution procedures. Investment budget from 67% in 2003 to 83% (diconcentration de I ’ordonnancement) in 2004. from the Ministry of Finance to four line Exceptional expenses in total public spending Ministries (Education, Health, Justice and were limited to less than 5% of total Environment). expenditures. Initiation of the implementation of software (SIGFIP) integrating public expenses of the four selected ministries. Begin of the audit of the wage bill in the public sector. Adoption of new rule for the “Contrdles des Operations Financidres” by Decree signed in July 2004. Production of quarterly reports on the cash flow situation of the treasury. Procurement Initiation of the study that should lead to The percentage of contracts approved by the the creation of the unit of coordination and CNCA on a sole basis was limited to 17% in advice to purchasers. 2004. Initiation of the study devoted to the The draft of the new Procurement Code is reforms of the legal and institutional under preparation. procurement system. Audit and external Submission of budget execution report The Cour des comptes has begun the revision control “comptes de gestion” from 1999 to 2002 to of the comptes de gestion of the year 1999 the Independent Supreme Audit Court and 2000. Tourdes comptes”. Human resources n Implementation of the first phase of the The number of staff increased by4,494 in management recruiting strategy agreed with the IMF; 2004. Finalization of the study on the Public wages increased by 37.1 % from end
17 Strengthening Decentralization PRSP institutional Harmonization of regional and sectoral Creation of 11 regional PRSP Committees. jtructure in the regions investment plans. Implementation of the institutional framework supporting the PRSP at the decentralized level by creating regional committees in all 11 regions. Revenue for local Acceleration of the transfers FECL and Financial transfers made available to local governments FDD to local Governments in less than 5 governments in May 2004 (against July in months. 2003) and they increased from 12 billion of FCFA in 2002 to 14.1 billion of FCFA in 2004. Budgetary Finalization of the strategy of Strategy finalized in November 2004. responsibilities of local decentralizing the execution of the governments and their consolidated investment budget (BCI) to management capacities the local governments, which need to be approved by the Interministerial council. - Update of the second Finalization of the national health policy Strategy finalized in October 2004. phase of the national document (2004-2008), which was health policy (PNDS) presented to the main partners operating in focusing on achieving this sector. the MDGs and PRSP targets Improve access to Revision of the norms of allocation of DPT3 coverage rate increased from 59% in health services and health personnel, and launch of the design 2003 to 85% in 2004. utilization of quality of a medium-term recruitment plan. Share of assisted delivery from 39% in 2001 essential services by the Conduction of a diagnostic study to assess to 45% in 2004. poor and vulnerable the strengths of the current market CPNl coverage rate increased from 52% in groups elaborating on the size of institutions, 2002 to 65% in 2004. ownerships, projected growth rates, Primary health consultation rate increased financial status, as well as to identify areas from 46% in 2003 to 50% in 2004. for development of more effective publici private partnership Adoption of the three-year action plan for immunization and technical evaluation of the Immunization financial sustainability plan (FSP) by the Interagency Coordinating Committee (ICC). Strengthen the Establishment of the new institutional The execution rate of the investment budget management of the structure of the Ministry of Health by allocated to the Ministry of Health increased health sector Decree in October 2004. from 79.3% in 2003 to 83% in 2004. Start of the operation of the human resource management directorate and the health information management system, both at central and regional levels. Wealth Creation Labor market I Development of new strategies for the 1 The new strategy for vocational training was promotion of labor in rural areas as well as adopted at the end of 2004. the reform of professional training. The Government has signed 10 legal texts Creation of a new agency in charge of supporting the implementation of the Labor vocational training (FONDEF) that started Code and 6 have been approved by the State to operate in early 2005 and is committed Advisory Council (Conseil d’Etat) as of to increase public funding of labor training January 2005. activities. Preparation of the job directory (ripertoire 1
18 Policy Area Actions taken des nzktiers et des emplois) in collaboration with the private sector Preparation of the legal texts required for the establishment of the “Observatozre National de I ‘Emploi” Justice Validation of the national development The new strategy fop the justice sector was strategy for this sector which was translated adopted in December 2004. into a concrete actions plan for the short to The number of staff increased by 579 in 2004. medium terms Creation of the anti-corruption national committee Commission Nationale de lutte contre [a non-transparence, la corruption et la concussion H in May 2004 Launch of the new communication strategy Implementation of the sectoral recruiting strategy agreed with IMF Protection of vulnerabl ;roups National strategy for Finalization of the preparatory work The inter-ministerial committee was created social protection required to create the inter ministerial in April 2004. (NSPS) committee responsible for designing the national strategy for social protection Initiation of studies on specific groups and development of action plan which will facilitate access to basic social services Development of Letter of Sectoral Policy on Social Development as key input to NSPS Identification of Organization of a workshop jointly with the List of potential social protection indicators vulnerable groups and Internal Labor office to define quantitative developed, to be finalized in NSPS. monitoring of indicators for monitoring vulnerable groups actionsireforms in the PRSP process Improve access of Evaluation of existing programs and legal Proposed changes to legal framework vulnerable groups to framework to improve access to disabled to identified, as well as consensus on specific basic social services social and economic opportunities carried items to include in Consolidated Investment and improve legal out Budget 2006. framework Regional and national information Information activities in 5 regions. campaignidissemination events held Increase allocation of Initiation of the multi-sectoral review of The rural social protection review was public resources to efforts to manage rural risks to help finalized in June 2005, including overall vulnerable groups identify programs directed to vulnerable review of expenditures on vulnerable groups groups (rural focus). Government assessed the amount of Total Vulnerable Group PRSP investments in resources allocated to the support of BCI 2003 = CFA 24.9 million. vulnerable groups in the Consolidated Execution rate = 62%. Investment Budget.
5. THE PROPOSED PRSC-I1
A. OPERATIONOVERALL DESCRIPTION
5.1 Overall, PRSC-I was successful in supporting the Government’s effort to achieve reforms and results in its strategy to alleviate poverty in Senegal. Within this context, the proposed PRSC-I1 has three main objectives. First, it seeks to consolidate reforms in the three priority areas of PRSC-I by: (i)strengthening budgetary and financial reforms of the State; (ii)
19 enhancing financial decentralization toward local governments; and (iii)improving health services delivery. These three areas constitute the backbone ofthe PRS and their implementation is already well advanced.
5.2 Second, PRSC-I1 aims at expanding its coverage in the areas of wealth creation and protection of vulnerable groups, which are two pillars ofthe PRS. These two areas were already identified in PRSC-I, but were not subject to prior actions so as to give the authorities sufficient time to prepare their strategies. In so doing, the PRSC agenda will gradually strengthen the basic elements of a social protection strategy and poverty alleviation of the poorest segments of the population, which is a long-term objective for Senegal. ,
5.3 Third, PRSC-I1 offers directions for potential future policy actions, which are expected to be developed under PRSC-I11 and PRSC-IV. While continuity in the reform process is expected, it has to be recognized that preserving flexibility will be important in view of the upcoming PRSP. In short, PRSC-I1 should be viewed as a transition between the current and future PRS.
B. POLICYAREAS
5.4 For each of the five areas identified under PRSC-11, the list of prior actions is summarized in Box 5.1 below. This list is consistent with the triggers defined under PRSC-I. However, the list has been shortened from 21 to 12 to: (i)align the requirements with the Bank’s guidelines; and (ii)make the triggers more precise so that possible difficulties of interpretation are minimized at the time ofnegotiations. The compliance ofthese prior actions has formed the basis of the Bank’s decision to proceed with the proposed operation (see Schedule 2 for fuller details).
5.5 For each priority area selected in PRSC-11, the remainder of this section will outline the main thrust of the approach in terms of sector issues and expected results. In doing so, the document will: (i)identify prior actions toward PRSC-11; (ii)discuss possible actions and triggers under PRSC-I11 and PRSC-IV; and (iii)review the indicators defined to monitor the PRSC program over time. Fuller details can be found in Schedule 3 (Matrix of Policy Actions and Results) and Schedule 4 (Monitoring Indicators).
20 Box 5.1: Prior Actions for PRSC-I1
Fiduciary Reforms pared, ona programmatic basis (Medium Term Expenditure Framework), a 2006 budget proposal for at least r ministry departments including the ministry ofhealth has been prepared; the recommendations derived from the financial and technical audit ofthe wage bill in the public sector, hich was completed in October 2005; nalized a draft revised procurement code prepared on the basis ofthe recommendations derived from the recent evaluation study, and circulated the draft within the Government; out a study on the rationalization ofits internal and external control systems; ented a new civil service remuneration strategy, including the adoption of a pilot pro tralization ofhealth sector staff.
Decentralization 6. Prepared a draft 2006 consolidated investment budget for the education and health sectors ta into account the decentralization ofthe budget execution.
Health 7. Increased the Diphtheria, Pertussis and Cholera (DPT3) immunization coverage to at least 80% in 2005; 8. Produced statistical reports for years 2003 and 2004, as well as for the first semester of2005, on the basis ofthe ta collected from the health information management system (SIG).
tivities of the fund for vocational training (FONDEF) as evidenced by the
n the Ministry of Justice for the coordination of the i
Commission Nutionale contre la Corruption, provided budget allocations for its operations in 05 and 2006, appointed its secretary general, and provided adequate facilities.
ocial protection strategy toward the most vulnerable groups i including monitoring indicators and a public expenditure review).
B.l. Budgetary and Civil Reforms of the State
5.6 The PRSP emphasizes weaknesses in the Government’s fiscal and budgetary procedures as one of the constraints to achieving its poverty reduction objectives. The Government has also increasingly recognized severe limitations in its recruiting and remuneration policies, preventing public administration to deliver core basic services, especially outside ofDakar. The Senegalese Government has given increasing priority to improvements in these areas, because if budgets are misallocated, the services that people need (and presumably desire) may not get adequate levels of funding. If funds are misappropriated, both the quality and quantity of services that are offered will suffer.
5.7 Ideally, Senegal should promote the attainment of three broad outcomes, namely, aggregate fiscal discipline, allocative efficiency, and operational efficiency. Aggregate fiscal discipline refers to the systematic alignment ofpublic expenditures with total revenues (domestic revenues plus a sustainable level of foreign borrowing). Allocative efficiency on the other hand refers to the consonance of budgetary allocations with the strategic priorities of the country.
21 Operational efficiency refers to the provision ofpublic services at a reasonable quality and cost. It appears that Senegal has been able to meet all but the last of these outcomes. Over the past few years, Senegal has been well on track with the PRGF program -meeting its fiscal targets since 2000, and has been allocating an increasing share of spending toward PSRP priority targets even tough progress still needs to materialize at the sub-sectoral level. For example, the share of education and health in total public expenditures has both increased significantly over the past few years, up by 0.9 and 0.5 percentage points of GDP respectively between 2000 and 2004.'' The lack of efficiency in public spending appears principally rooted in cumbersome and complex administrative procedures, as well as weak financial and human resources management. Weaknesses in financial management also explain the lack of information and planning on the allocation of resources within sectors, leading to inefficiencies and corruption, and ultimately to higher costs.
5.8 The authorities have approved two action plans supporting public expenditure management reforms (following recommendations of the Country Financial Accountability Assessment-CFAA and the Country Procurement Assessment Review-CPAR) and initiated implementation, with the support ofdonors, including the Bank and the IMF. As a result, Senegal has made significant progress in public expenditure management as reflected in the 2004 joint IMF and Bank's HIPC Assessment and Action Plan (AAP) that concluded that Senegal met seven of 16 benchmark indicators, against four in 2001. The most important improvements have occurred in the areas of public expenditure tracking - notably in the priority areas defined in the PRSP, internal controls and budget preparation. However, significant upgrading is still needed in internal and external control of budget execution and state-owned enterprises. The authorities will continue their efforts in these crucial areas as they should lead to higher transparency, more financial resources and a better allocation of spending, both at the central and local government levels. Also, serious weaknesses in fiscal transparency and procurement were revealed by spending irregularities of about 1 percent of GDP that came to light in June 2004. In order to address these shortcomings, the authorities have implemented a series of remedial actions that were endorsed by both the IMF and the Bank.
5.9 As part of their objective to improve the quality of public financial management, the authorities have initiated a civil service reform. Through a new recruitment strategy of 15,000 civil servants during 2003-05, the Government plans to enhance capacity in the main sectors of the PRSP, including education, health, justice, tax collection, and security. Concurrently, the Government has been carrying out a study of its remuneration policy that should lead to a series ofconcrete actions in 2005.
Expected Results of PRSC Program
5.10 By the end ofthe PRSC Program (PRSC-I, PRSC-I1 and PRSC-111) Senegal expects to achieve the following:
l8For fuller details, see Senegal's Public Expenditure Review, 2004 and Public Expenditure Review Update, op. cit. June 2005.
22 0 A comprehensive 3-year MTEF, indicating budgetary allocations through PRS programs and objectives; 0 Budget execution closer to the approved appropriation; 0 Increased decentralization ofexecution in line Ministries;
0 Operational modern procurement rules; 0 External audits and independent controls ofbudgets; 0 Implemented recruiting strategy agreed with the IMF; and 0 Better control ofthe wage bill and new set of financial incentives for civil servants.
Progress and prior actions toward PRSC-11
5.1 1 PRSC-I1 aims at strengthening the reform process initiated during the first round of reforms under PRSC-I. Several actions have been implemented during 2005, including the preparation of the 2006 draft Budget Law on a programmatic basis for four key Ministries, the further decentralization ofexecution procedures to line ministries, the modernization ofthe wage management system, and the on-time transfer ofthe public accounts to the Cour des Comptes for the years 2002 and 2003. l9 A special attention was also given to the improvement ofprocurement procedures, especially through the development of a new legal and institutional framework. These changes will promote the use of competitive tenders and reduce the number of derogations. The recruitment policy agreed with the IMF has continued to be implemented, notably in the priority sectors defined in the PRSP. The Government has pursued the implementation of the reform of its remuneration policy, based on the implementation ofa set of three simultaneous actions: (i)increase public wages to be more competitive with the private sector; (ii)simplification ofprocedures; and (iii)introduction ofincentive mechanisms.
5.12 The following prior actions for PRSC-I1 were met by Senegal: (i)elaboration of the budget law for 2006 on a programmatic basis (MTEF) covering four key ministries; (ii)Adopted the recommendations derived from the financial and technical audit ofthe wage bill in the public sector, (iii)finalization of the draft Procurement Code and its circularization throughout the Government and interested parties; (iv) Carried out a study on the rationalization of its internal and external control systems; and (v) initiation of the implementation of the remuneration strategy (including the adoption of a pilot project aimed at decentralizing health personnel in underserved areas). These prior actions demonstrated the Government’s commitment to pursue with fiduciary reforms and improve the transparency and effectiveness ofpublic spending.
Possible monitorable actions and triggers under PRSC-111 and PRSC-IV
5.13 The reforms outlined under PRSC-I and PRSC-I1 will be pursued under PRSC-I11 and PRSC-N with two main objectives. The first objective will be to provide continuity to the reform process, as most actions will take time to be fully implemented and will require sustained efforts from the authorities. A special emphasis will be given to the need to strengthen internal and external budgetary controls. The second objective is to evaluate the first series of actions so
In parallel to the transmission of public accounts from the Treasury to the Cour des comptes, financial assistance was provided to the latter through a multi-donor Trust Fund managed by the Bank. This Trust Fund aims at increasing the absorptive capacity of the Cour des comptes.
23 that the authorities can learn from their experience before extending their approach to other sectors and activities. In addition, it is proposed to accompany the authorities in their effort to make more automatic budgetary procedures, with the implementation of the new software ASTER. With regards to procurement procedures, it is expected that the new legal and institutional frameworks will be adopted and implemented so that the use of competitive and transparent tenders will be generalize throughout the public administration.
5.14 Within this vision, the following triggers could be considered for PRSC-111:
0 Elaborate the 2007 Law ofFinance on a programmatic basis in six ministries; 0 Submit state accounts for the year 2004 to the Cow de comptes; 0 Adopt and implement the new Procurement Code and institutional framework; 0 Prepare the audit for the year 2004 ofprocurement contracts; and 0 Implement recommendations derived from the study on the rationalization ofinternal and external controls.
Monitoring indicators
5.15 Progress has continued to be monitored by the list ofspecific indicators that had been identified under the PRSC-I, which is summarized in Schedule 4. Among others, the following targets were met by the Senegalese authorities:
0 The percentage of budgetary execution increased from 91 percent in 2003 to up 93 percent in 2004 and is expected to reach 95 percent in 2005; 0 The percentage ofpublic contracts approved on a sole source basis did not exceed 25 percent in the first months of2005; and 0 Share of BCI allocated toward PRSP objectives is expected to increase from 38 percent in 2004 to 43 percent in 2005.
B2. Strengthening the Decentralization Process
5.16 In the past few years, the Government has initiated the decentralization of decision- making over the management of human and financial resources, including the strengthening of local governments’ capacities and the gradual transfer of a number of responsibilities to local communities, especially in the education and health sectors. Such a process is viewed as one of the key PRSP instruments for targeting vulnerable and poor groups in rural regions, and improving the delivery of public services. Although Senegal’s PRSP clearly identifies decentralization as one of the top priorities, it has to be recognized that Senegal still remains a very centralized country. It is estimated that the budget ofall local governments is equivalent to about 5 percent ofthat of the Central Government. Clearly, the decentralization process needs to be pushed ahead.
5.17 The Government’s commitment to push the decentralization process is based on the need to: (i)reinforce capacity of local governments; and (ii)improve the relations between the central and local governments. As described in the PRSC-I Program Document, the first
24 objective is supported by several Bank-financed operations2' and other donors, justifying the emphasis of the PRSC program on the second objective. The main actions supported by the PRSC are to help disseminate and harmonize the PRS agenda within the region, rationalize financial transfers from the central to local governments, and implement the decentralization of the execution ofthe Consolidated Investment Budget at the local level.
Expected Results of the PRSC Program
5.18 By the end ofthe PRSC Program (PRSC-I, PRSC-I1 and PRSC-111), Senegal expects to achieve the following:
0 Clear and efficient mechanism of financial transfers from the central to the local governments and within local governments; 0 Operating regional committees to help implement and monitor the PRS through regional action plans (Plans d 'opivations vigionaux, POR); 0 Improved coordination and harmonization of development activities in the regions, including the decentralization of the execution ofthe consolidated investment budget; and 0 Better use of resources and financial transfers through improved budgetary control procedures, including audits and procurement.
Progress and prior actions toward PRSC-11
5.19 To attain these results, the Government has strengthened the round ofreforms initiated under PRSC-I. The central authorities continued to accelerate the transfers offinancial resources (FDD and FECL) to local governments (realized in less than four months in 2005 against nine months in 2002). These transfers reached US$35 million, up by 40 percent since 2002. Concurrently, the decentralization of the consolidated investment program (BCI) has been initiated in the education and health sectors. The institutional framework surrounding the PRSP has operated in the regions through their involvement in the design and elaboration of the new PRSP agenda and the launch of communication campaigns in two pilot regions. Lastly, a significant effort has been carried forward so that budgetary controls procedures will be more effective at the regional level, including through the adoption ofnew and simplified procurement procedures.
5.20 The following activity was considered as prior actions for PRSC-11:
0 Prepare a draft 2006 consolidated investment budget for the education and health sectors taking into account the decentralization ofthe budget execution.
2o The Bank, in coordination with the Senegalese authorities and other donors, is consolidating its CDD operations so that it should help reinforce the capacity of local governments and communities to implement the decentralization agenda. This consolidation is viewed as a complement to the actions supported by the PRSC program in this area,
25 Possible monitorable actions and triggers under PRSC-111 and IV
5.21 PRSC-I11 and PRSC-IV will continue to support the reforms initiated during the first two years of the program, with a focus on implementing the rationalization of transfers from the central to local governments, as well as on the further decentralization of the consolidated investment programs. Therefore, at the end of 2007, it is expected that local governments will receive more and more predictable financial transfers from the central government and that they will be responsible for the implementation of an increasing share of the consolidated investment budget. The achievement of these two objectives should make them more likely to respond to the growing demands from their communities, as well as to increase their capacity to deliver social goods and investment projects, especially in the education and health sectors.
5.22 The following trigger is proposed for PRSC-111: (i)adopt texts aimed at rationalizing FDD and FECL transfers to local governments.
Monitoring Indicators
5.23 Progress in the decentralized process has been monitored through the positive evolution of a number of indicators (see Schedule 4 for more details): (i)the FECL and FDD transfers increased from FCFA 12 billion in 2002 to FCFA 14.1 billion in 2004 and FCFA 18.7 billion in 2005; (ii)these transfers were made available to local governments in April 2005 against June in 2004 and September in 2002; and (iii) the volume of investment projects of which the implementation has been transferred from the central to local governments reached FCFA4.6 billion in the draft 2006 Budget Law (against none in 2005).
B3. Improving Health Services
5.24 The health sector policy was initially outlined in the Plan National de De'veloppement Sanitaive 1998-2007-PNDS7 which was endorsed by the donor community, including the Bank. Yet, the recent evaluation of its first phase has led to mixed results. On the positive side, substantial progress was reported in the areas of health services delivery (with the increased availability of cost effective interventions and essential drugs at the health posts) and of health systems administration particularly with respect to hospital management. The Government also demonstrated its financial commitment to the health sector, by increasing its share of budget and by raising the non-wage portion of the recurrent budget. At the same time efforts have been made to recruit health workers (1500 in the last 5 years) and to post them in the regions where the lack of health force was the important, undercutting efforts to increase access to basic health services.
5.25 Despite this progress, there remain significant sectoral issues and constraints that can be summarized as follows: (i)insufficient access to effective health services; (ii)poor quality and low efficiency ofhealth services; (iii)insufficient emphasis on prevention and behavior changes; (iv) weak institutional capacity; (v) insufficient coordination with communities and private sector; (vi) inadequate sector financing and budgetary procedures; and (vii) high financial barriers to access and utilization ofhealth services. As a result, the authorities revised the second phase of the PNDS that was endorsed by an inter-agency committee in the Fall 2004. It should help to address the above issues by considering both supply and demand sides as well as
26 improving accessibility, effectiveness, efficiency, quality and sustainability of health services, including in remote areas. These objectives are in line with the proposed budgetary support by the Bank and EU and will complement other investment projects in this sector by donors, including the Bark2'
Expected Results of the PRSC Program
5.26 By the end of the PRSC program (PRSC-I to PRSC-111) Senegal expects to pave the way towards the achievement of PRSP and MDGs targets through increased utilization of a package ofbasic health services including the following:
0 Better coverage of immunization, infectious diseases control and nutrition activities, notably ofchildren and women; 0 Increased utilization ofreproductive health services; 0 Increased PHC services utilization rate;
0 Reallocation of expenditures to pro-poor and cost effective interventions and underserved areas; and 0 Increased number ofhealth districts fully functioning in a decentralized manner;
Progress and prior actions toward PRSC-11
5.27 To attain these results, Senegal already implemented a first round of reforms in 2004 that was supported by PRSC-I (see Table 4.3). It included several key steps forward such as the finalization of the second phase of its sectoral strategy and the implementation of the new institutional framework within the Ministry of Health. Such actions were viewed as essential in paving the way for fuller reforms in PRSC-I1 and PRSC-111.
5.28 During the course of 2005, the Government has continued to improve access and utilization of basic health services through the strengthening of outreach activities, the implementation of its infrastructure development plan and the implementation of the regulatory and legal framework for private health service provision and funding in the sector. Continuous actions were undertaken to ensure additional progress in the prevention of infectious diseases and in the utilization of reproductive health services. On the institutional front, a pilot project was designed to re-deploy staff in regions where the needs are the most severe, and health committees, as well as health management committees, were created or strengthened in accordance with the regulations governing their mandates and composition. The authorities have continued their efforts to improve the quality of monitoring of the health sector performance, including collecting data as well as measuring the quality of health services throughout the country. Lastly, the Ministry of Health designed new regulations to favor the development of voluntary insurance (mutuelles) and alternative financing schemes.
2' Although the Integrated Health Development Project will end in June 2005, the Bank will continue to be active through its HIViAIDS project as well as its Nutrition Enhancement Project.
27 5.29 The following two prior actions were to be attained prior to presentation ofPRSC-I1 to the Board:
0 Increase in the DPT3 immunization coverage from 70 percent in 2003 to 80 percent in 2005 (first semester); and 0 Production of statistical reports for years 2003 and 2004, as well as for the first semester of 2005, on the basis of the data collected from the health information management system (SIG) .
Possible monitorable actions and triggers under PRSC-111 and PRSC-IV
5.30 PRSC-I11 and PRSC-IV are expected to strengthen the Government’s efforts in the priority areas identified in the PRSC-I and PRSC-11. A special attention will be given to three specific actions. First, the authorities should have completed the study on the health map by June 2005 and align the BCI accordingly. The new health map should help rationalize the allocation of human and financial resources in the health sector as well as provide the basis for the development ofnew infrastructures. Second, PRSC-I11 and PRSC-IV will seek to consolidate the recent advancements in terms of immunizations coverage and access to health services by pregnant women and children, so that Senegal can continue its drive toward meeting MDGs in the health sector. Finally, PRSC-I11 will gradually focus on outcomes rather than on inputs since the strategic, legal, and institutional frameworks should have been adopted by mid-2006 (see Box 5.2).
Box 5.2: Toward Using Outcome Indicators for the Health Sector
The objective ofthe health system is to improve health status, as well as to promote prevention and to deliver care to relief from suffering. The strong drive for results in the health sector advocates for an increase use of outcome indicators related to the objectives of the health system and the commitment of the national government to improve its performance.
Within this vision, the authorities, in agreement with the Bank and other partners have proposed to number of such indicators as triggers for PRSC-111. Since it is not possible to assess the performance of the health sector with one indicator, we retained four monitoring indicators that should help to assess progress in the most important areas identified in the national health policy (PNDS) and the PRSP (see main text). These indicators are also closely linked to MDGs, as they serve as leading indicators for: (i)infant mortality; (ii)maternal (iii)Aids epidemics. In order to provide flexibility, it was agreed that Senegal should meet targets for indicators, taking into account that the authorities might face unexpected events over time such as flood and cholera enidemics.
5.31 Possible triggers for PRSC-I11 could include:
0 Implement retail prices ofbasic health services and essential drugs in accordance to regulations; 0 Sign performance contract for resource allocation between MOH, medical regions, districts and hospitals; and 0 Meet the two immunization indicators: DPT3=80% and measles =70 percent as well as two out of the four following indicators: CPN1=7O percent, CPC = 54 percent,
28 attended birth = 50 percent, and screening in voluntary counseling and testing (VCT) centers up by 20 percent.
Monit0 ring Indicators
5.32 Progress in this area has been monitored by a set of quantitative indicators that were presented in the PRSC-I Program Document. They principally focus on processes and outputs, rather than outcomes, because of the short-term horizon of the proposed PRSC program. However, they should be viewed as leading indicators for outcome indicators, including those defined in the MDGs. For example, an increase in the immunization coverage of children (output) should be closely correlated to subsequent improvements in the child mortality rate (outcome). The following results can be reported (see Schedule 4 for more details):
0 Increase the DPT3 immunization coverage from 70 percent in 2003 to 85 percent in 2004 and over 85 percent in 2005 and 2006 when measles coverage is also expected to reach 70 percent; e Increase the proportion ofbirths assisted delivery by skilled health personnel from 39 percent in 2001 to 45 percent in 2004; and 0 Increase the execution rate ofbudget allocated to the health sector from 83 percent in 2003 to 87 percent in 2004 and (projected) 90 percent in 2005.
B4. Promoting Wealth Creation
5.33 Promoting wealth creation is the first pillar of the PRSP prepared by the Senegalese Government. For this reason, it has already received considerable attention from both the Government and donors, including the Bank (see Box 5.3). Yet, most stakeholders, including the Government, felt that it was important not to preempt PRSC support in favor of this pillar because it could be used as a catalyst to deepen and coordinate current and future efforts, especially in the context of the new accelerated growth strategy proposed by the Government. Since this strategy is not expected to be finalized, together with the new PRSP, before 2006, it was agreed to adopt a sequential approach through which the PRSC program will focus on specific areas that have not yet been adequately covered by the Bank and other donors, but have appeared as critical in promoting wealth creation. On this basis, two areas were identified for PRSC support, which are described below.
29 Box 5.3: World Bank’s Assistance to Wealth Creation
Wealth promotion is the first pillar ofthe PRS defined by the Government. The main areas for actions are the following: (a) promoting specific activities in agricultural development activities, energy, mining, and services; (b) establishing a sound macr framework; (c) building private sector capacity; (d) support policy for velopment; and (e) employment policy in support of wealth creation. Major donors are committe st the Government in these areas, including the Bank. The FY03-05 CAS has given a privileged weight to this support as summarized by the following list of activities and reforms support under ongoing or planned projects. It is envisaged that the new FY07-10 CAS will continue in this direction.
Private sector development projects (Private Sector Adjustment Credit, Private Investment Credit) 1. Improving the enabling environment for the private sector and SMEs through investment climate reform, covering simplification oftaxes, trade facilitation and reduction ofadministrative barriers). 2. Private sector capacity building through funding of skills and know-how acquisition and strengthening ofassociations and support organizations. 3. Promotion reform in key sub-sectors, including edible oil, telecoms, music industry, tourism etc. 4. Reducing macroeconomic risks through removal of contingent liabilities, enhancing the social safety net and services to the poor, and resource mobilization through postal and pension reform. Infiastructure Development Projects (Energy Sector Investment Credit; Long Term Water Sector) 1. Introduce private participation in the water, energy and transport sector so as to reduce burden on the budget, improve service delivery, and enhance the competitiveness ofthe private sector and SMEs. I 2. Improve rural access. Agricultural development (Agriculture Services and Producer Organizations, and Agricultural Markets and Agribusiness Development) 1. Support the development ofagribusiness, sustainable fisheries and exports. 2. Improve factor markets through land titling, to strengthen property rights, and s development of micro-finance.
5.34 Improving the justice system. As emphasized in the PRSP, a better environment for justice will not only promote economic growth but also favor the development of a more equitable distribution of wealth within the country. Aware of the deficiencies in the current system,22 the Government has finalized a sectoral strategy that calls for a long-term capacity building program and higher financial resources, notably through the national budget. The objectives of this program include: improved performance of commercial courts, accelerated processing of cases and availing judgments to the general public to enhance consistency and transparency. This program would also expand access to courts by most vulnerable groups and, thus, generate greater empowerment ofthe poor.
5.35 Strengthening the functioning of the labor market. Employment creation is an essential trait of the Senegalese growth strategy. The poor functioning of the labor market is a source of concern for policy makers because it contributes to hinder private sector growth as well
*’The firm survey used in the recent Investment Climate Assessment indicated that only a marginal fraction of private firms trust the Senegalese judicial system.
30 as to maintain unemployment and under-employment at relatively high levels. Also, as emphasized in the recent Poverty Assessment, poverty is associated with unemployment and low quality employment, hence the high priority that the population puts on creating employment opportunities. The issue ofcompetitive labor costs was also raised prominently in the Integrated Trade framework23 and in the recent Investment Climate Assessment studies. It emerged from these studies that average labor earnings in Senegal are among the highest in Sub-Saharan Africa, about 2-3 times higher than in Uganda, Zambia and Eritrea for low skilled labor.
5.36 The Government has initiated a strategy with the objective to improve the functioning of the labor market. The PRSC can support this strategy by focusing on three aspects:
0 Promote changes in the legal environment, which remains problematic for many firms operating in Senegal, especially lay off procedures and the costs of retren~hment.~~ The Government has prepared a series of Decrees that should help make the labor market more flexible in specific activities, such as tourism and call centers. Concurrently, a new draft Labor Code is being prepared under the auspice of the OHADA.
0 Enhance labor skills in Senegal, as comparatively to other African countries, the share of employees with no education is high and the share of workers with technical training is The recent Investment Climate Survey reveals that vocational training is systematically underused in Senegal, principally by employees ofsmall and medium firms. The Government has been moving toward addressing these issues by producing a sectoral strategy for professional training in Senegal.
0 Facilitate access to labor opportunities, especially in rural areas, through better information and partnerships with the private sector. Informational deficiencies in the working ofthe labor market in Senegal is mostly apparent through the relatively high number of days that a private firm has to spend to find a production worker, on average up to eight weeks. As a result, most firms have to rely on informal networks such as friends and relatives, which are not always the most transparent channels and are sources of asymmetries between firms -foreign firms being clearly disadvantaged.26 The lack of efficacy of public and private placement offices has been raised by a majority ofemployers and employees operating in the country.
23 See in particular, Senegal: Investment Climate Assessment, 2005. 24 In firms’ survey conducted by FIAS in 2002, issues related to the labor legislation appear to be an issue for about 50% of firms, which about the same level than for the financial sector legislation, less than for the land legal framework but more than for import/export rules. 25 For example, the share of employees with no education equals to 8% in Senegal. Workers with technical training represent about 14% of the total workforce in Senegal against more than 25% in Uganda and Kenya (Source: WED surveys). 26 According to the latest investment climate survey, more than 60% of employees report to find their job through friends and relatives.
31 Expected Results of the PRSC Program
5.37 Through the sequencing approach described above, the PRSC program can be expected to achieve the following:
0 Consolidate consensus around labor reforms; 0 Increase funding and coverage of labor training, notably through public-private partnerships, leading to higher skilled workers; 0 Provide more flexibility to labor markets in a few strategic areas; 0 Speed up processing of cases in the judicial system; and 0 Increase access and the quality of the judicial system by strengthening the capacity of the Ministry of Justice and tribunals by recruiting additional staff.
Progress and prior actions toward PSRC 11
5.38 On the labor side, the authorities have taken a series of concrete actions aimed at improving the legal framework and promoting vocational training during 2005. These actions include: (i)the reinforcement of vocational training, by promoting coordination and cooperation with the private sector and by securing additional funding; (ii)the adoption of several decrees surrounding the Labor Code with the objective to render the labor markets more flexible in specific activities; and (iii)the development of the institutional framework with the aim to provide more and better information on the job market to both employees and employers. On justice, the main actions undertaken in the course of 2005 have included the creation of the committee in charge of implementing the new sectoral strategy, the development of the new communication strategy, and the adoption of an action plan to provide legal assistance to most vulnerable and begin its implementation. In order to achieve all these objectives, PRSC-I1 has also supported the Government’s commitment to increase both financial and human resources in this sector.
5.39 A subset of the above actions were considered as prior actions to be attained prior to Board presentation of PRSC-11: (i)start the activities of the Fund for vocational training (FONDEF) by funding training programs in at least 10 enterprises; (ii)create by Decree the unit responsible for coordinating policies within the Ministry of Justice; and (iii)Establish the Commission Nationale contre la Corruption, provide budget allocations for its operations in 2005 and 2006, appoint its secretary general, and provide adequate facilities.
Possible monitorable actions and triggers under PRSC-111 and PRSC- IV
5.40 PRSC-I11 and PRSC-IV will consolidate the actions/reforms initiated under PRSC-11, notably in the areas of vocational training, labor regulations and information. A special effort will also be given to improve the prevention ofprofessional risks and accidents. On justice, the authorities should have agreed and implemented an action plan that will aim at reducing delays in courts, as well as providing legal assistance to most vulnerable groups. It is also expected that specific monitoring mechanisms will be in place to evaluate the pace of progress and measures outcomes. Within this vision, the following triggers could be considered for PRSC-111:
32 0 Continue adoption of complementary legal texts for the application ofthe Labor Code and prepare manual summarizing all adopted texts; 0 Instruct cases by the Commission nationale contre la Corruption; and 0 Implement the sectoral strategy of Justice with an emphasis on actions aimed at reducing delays associated with legal procedures in courts.
Monitoring indicators
5.41 A number of indicators have been used to monitor progress over time in the areas of labor and justice (see Schedule 4 for fuller details):
0 The number of enterprises benefiting from vocational training programs exceeded 10 in the first nine months of2005; 0 The share of Government resources allocated to the Ministry of Justice increased from 0.9 percent in 2004 to over 1.0 percent in 2005 and is expected to reach 1.5 percent in 2006; and 0 The number of new recruitment in the Ministry of Justice reached 579 in 2004 and is expected to exceed 550 in 2005.
B5. Increasing the Protection of Vulnerable Groups
5.42 The PRSP emphasizes the need to improve the lives of vulnerable groups and it prescribes actions to ensure that these groups are effectively able to benefit from wealth creation and access to social services. The broad PRSP strategy in this area is to: (i)improve the social status of vulnerable and marginalized groups; (ii)facilitate the access of indigent populations to basic services, infrastructure and facilities; (iii)implement wealth-creating programs adapted to
I the situation ofthese target groups; and (iv) promote community development.
5.43 The PRSC aims at assisting the Government in its effort to increase the protection of vulnerable groups. It focuses on the biggest gaps in the support provided to vulnerable groups: (i)developing a coherent and integrated social protection strategy targeting, including targeting methodology and monitoring and evaluation; (ii)defining demand-side programs and policies to ensure access and utilization of basic social services by the poorest; (iii)implementing mechanisms to plan and evaluate the transfer ofGovernment resources to vulnerable groups and to rationalize public expenditure in these areas; (iv) designing and applying risk management measures; and (v) defining an adequate legal framework to protect vulnerable groups. However, under PRSC-I, this support was viewed to be sequential and selective over time. The rationale for such a gradual approach is that the Government is still in the process ofmaking its strategy toward vulnerable groups operational, by defining coherent national strategies, developing structures and capacities at the local levels, and piloting new approaches.
Expected Results of the PRSC Program
5.44 Through the sequencing approach described above, the PRSC program can be expected to achieve the following:
33 0 Increase access to risk management instruments and social protection measures; 0 Improve the identification, targeting and monitoring and evaluation of actions to improve the lives ofvulnerable groups, both in rural and urban areas; 0 Facilitate access of vulnerable groups to basic services (in complement to broad sectoral strategies); e Ensure equitable access and adequate legal framework for vulnerable groups; and 0 Reinforce efficient mechanisms to provide resources to vulnerable groups.
Progress and prior actions toward PRSC-II
5.45 During the course of 2005, the Government created the Interministerial committee responsible for designing the national strategy for social protection. It also initiated studies on specific groups (e.g. handicapped) and developed action plan to facilitate access to basic social services. Concurrently, several programs were piloted or reinforced, with the aim to provide assistance to specific vulnerable groups, notably children and handicapped. The Government developed a clear methodology to identify vulnerable groups in its budgetary process, and priority programs have been included in the draft 2006 Budget. Proposals for changes in the legal framework have been drafted and dissemination events to better inform vulnerable groups were designed. To ensure better social protection for workers in precarious employment in the informal sector and agriculture, programs to extend health insurance and other risk management mechanisms have been initiated in a few pilot projects, and the application law on health mutuals is expected to be approved in the near future.
5.46 Senegal has realized the prior action by adopting its National Social Protection Strategy, which includes an action plan with clear priorities for short and medium-terms and a set ofmonitoring indicators that will be included in the new PRSP.
Possible monitorable actions and triggers under PRSC-III and PRSC-IV
5.47 Under PRSC-I11 and PRSC-IV, the focus would be on the implementation of the integrated social protection strategy and the translation ofits priorities in the budget, as well as in the development of pilot projects involving the civil society. A special attention will also be given to direct financial transfers to the most vulnerable groups. Strengthening the Government’s capacity to evaluate and monitor its strategy will be reinforced, notably through its integration in the PRSP process. The following triggers could be considered for PRSC-111:
0 Implement the program of Community-Based Rehabilitation for the disabled in at least four regions; 0 Implement pilot programs that will provide a social security net to non-insured workers; and 0 Implement priority actions that have identified in the national platform aimed at increasing the protection ofvulnerable groups against major risks and catastrophes.
34 Monitoring Indicators
5.48 The definition of monitoring indicators has been part of the new national social protection strategy (a prior action under PRSC-11), and will be used to follow up the PRSC program in the future. During the interim, the following indicators have been used on a preliminary basis:
0 Increase in the composite index measuring access to basic social services by poorest deciles households (as defined in the PSRP) from 0.54 in 2000 to 0.6 in 2004 and to a projected level of 0.62 in 2005; 0 Decline in the percentage of working children between 6-14 years from 36 percent in 2000 to less than 30 percent in 2004/2005; and 0 Decline in the severe underweight among children fiom 19.1 percent in 2001 to 18 percent in 2004 (and expected to be as low as 17 percent in 2005, and 15 percent in 2006).
6. OPERATION IMPLEMENTATION
6.1 PRSC-I1 is scheduled to be synchronized with the Government’s budget cycle. It will be put in place and disbursed on the basis of the up-front completion of the set of prior actions proposed in the preceding chapter, demonstrating satisfactory progress of Senegal social and structural reforms agenda in support of its poverty reduction strategy. Within this framework, this section highlights first the poverty and social impact expected to be generated under the PRSC program. Second, it reviews the possible triggers that could be used against PRCS-111. Third, it describes the institutional system as well as the disbursement mechanisms to be used during the operation, which are basically the same than the ones used for PRSC-I. Fourth, it examines the environmental aspects linked to the PRSC program. Lastly, it discusses the main risks and the ways proposed to mitigate them.
A. POVERTY AND SOCIAL IMPACTS
6.2 There has been no recent update in Senegal’s poverty figures. The Government continues to rely on the results derived from the Household Survey and Core Welfare Indicators Questionnaire completed in 2001/2002. On this basis, it was shown that growth had a significant impact on poverty since the share of the population living in poverty decreased from 67.9 percent in 1994 (61.4 percent of households) to 57.1 percent in 2001 (48.5 percent ofhouseholds). The decrease was larger in Dakar and other urban centers than in rural areas, and resulted in more job creation than in the past.*’ Despite these positive trends, about two-thirds ofhouseholds continue to identify themselves as poor and one-third of poor and non-poor alike feel that poverty has substantially increased in their community over the last five years. On the positive side, half of the Senegalese population is hopeful that poverty will decrease in the next five years.
*’For more details, see Senegal Poverty Assessment, 2004. A recent analysis can also be found in the following document “Lapauvreti au S&igal: de la devaluation de 1994 Ci 2001-02”, Ministry of Economy and Finance,
35 6.3 The delivery ofpublic services in the social sectors has also improved, most notably in the education sector. The gross primary enrollment rate reached 79.9 percent in 2004 compared to only 71.6 percent in 2002. Girls’ education has also shown improvement, with the female gross school enrollment rate rising from 67.6 percent in 2002 to 72.3 percent in 2003 and 77.3 percent in 2004. In the health sector, the primary health care (PHC) utilization rate grew from 38 percent in 2001 to 46 in 2003 and 50 percent in 2004. The DPT3 immunization rate improved from 59 percent in 2003 to 85 percent in 2004 and the number of births assisted by trained personnel was 45 percent in 2004, compared to 39 percent in 2001. Yet, these trends, albeit positive, are not rapid enough to ensure that Senegal will reach all its MDGs in 2015. These averages also mask significant regional differences, revealing large inequalities in the access and the quality of education and health services in Senegal.
6.4 The proposed PRSC program is expected to support Senegal in its effort to alleviate poverty through at least four channels. First, it aims at promoting wealth creation through specific actions in the labor and justice sectors, which are viewed as two of the most important obstacles to private sector development. The better functioning of justice and the increased availability of skilled labor, with more appropriate regulations, should help improve the investment climate and mobilize further private investment. The expansion ofprivate activities will then fuel economy growth, which in turn is expected to reduce the poverty level in Senegal.28
6.5 The second channel seeks to improve the effectiveness of public spending. By supporting budgetary and fiduciary reforms, the PRSC program will help to increase the allocative and operational efficiencies ofpublic expenditures in sectors such as infrastructure and social services, which are directly linked to the growth and poverty alleviation agenda. The emphasis on decentralization also responds to the need to strengthen the delivery of public services in the regions and local communities, where can be found the highest percentage ofpoor households.
6.6 The third channel supported by the PRSC program consists of improving the stock of human capital, notably through a set of actions that should yield to better access and quality of health services. Over time, a healthier work force will also increase labor productivity and, thus, enhance economic growth. The focus on pregnant women and young children should also reduce poverty levels and inequalities.
6.7 The fourth channel aims at improving directly the living conditions of the most vulnerable groups: orphans, single pregnant women, handicapped, and beggars. These groups, in reason of their low income levels, are often set aside from national and sectoral programs, justifying a targeted action to include them. The link between equity and economic development has been advocated in the 2006 Bank’s World Development Report.
28 Recent analytical work reported by the Government in the PRSP First Progress Report indicates that an increase of 1% in the income per capita is likely to induce a reduction ofhouseholds living below the level ofpoverty of 1%.
36 B. IMPLEMENTATION, MONITORINGAND EVALUATION
6.8 The implementation of the PRSC-I1 was subject to the achievement of a set of prior actions (see Box 5.1). Such achievements, together with other reforms and improvement in monitoring indicators, indicate that several key program benchmarks have been met in the areas of fiduciary reforms, decentralization, delivery of health services, wealth creation, and the protection ofvulnerable groups.
6.9 The decision as to whether IDA will proceed with PRSC-I11 will be contingent on satisfactory progress in the implementation of the PRS, as documented by a review by stakeholders ofthe PRS progress report in 2005 and the finalization of the new PRSP in the first semester of 2006. In addition, it is proposed that actions satisfactory to IDA in the five priority areas will serve as triggers for proceeding with PRSC-111. The triggers presented in Box 6.2 below are indicative and their compliance will form the basis of whether the Bank will proceed with the subsequent operation. In the case that these actions are not met, the Bank could either delay the operation, or reduce the amount or modify the program, where justified.
Box 6.1: Indicative Triggers for PRSC-I11
Fiduciary Reforms Elaborate the 2007 Law ofFinance on a programmatic basis in 6 Ministries; Submit state accounts for the year 2004 to the Cour des comptes; lement the new Procurement Code and institutional framework; r the year 2004 ofprocurement contracts; and ; ndations derived from the study on the rationalization of internal and external controls.
Adopt necessary texts for the rationalization ofFDD and FECL transfers to local governments.
lement retail prices ofbasic health services and essential drugs in accordance to regul erformance contract for resource allocation between MOH, medical regions, districts and hospitals; an two immunization indicators: DPT3=80% and measles =70 percent as well as two out ofthe four following monitoring indicators: CPN1=70 percent, CPC = 54 percent, attended birth = 50 percent, and g in voluntary counseling and testing (VCT) centers up by 20%.
Wealth Creation 0 Continue adoption ofcomplementary legal texts for the application of summarizing all adopted texts; Instruct cases by the Ccommission nationale contre la corruption; and
37 C. FIDUCIARYASPECTS
6.10 The implementation of PRSC-I1 will rely on the institutional framework that was designed to support PRSC-I (see Figure 6.1). A special role will continue to be given to the five working groups that were created along the main areas defined in the PRSC program: (i) budgetary and human reforms; (ii)health services; (iii)decentralization; (iv) vulnerable groups; and (v) wealth creation (with two sub-groups articulated around the labor reforms and the justice). For each ofthese working groups, three representatives were designed: one for the main technical Ministry or agency, one for the Ministry ofEconomy and Finance, and one for the Bank team. Each group has been responsible, under the supervision of the Unit in charge of the design and implementation of the PRSP (CSPLP), for the finalization of the action plan in terms of objectives/measures/indicators included in each respective PRSC. Each group is also in charge of monitoring and supervising implementation over time.
Figure 6.1: Institutional Framework
Interministerial Committee I Prime Minister
Steering Committee Minister of Finance
,Secretariat CSPLP
1 Working Group I Fiduciary Reforms
D. DISBURSEMENTAND AUDITING
6.1 1 Credit Administration. The borrower is the Republic of Senegal. A single tranche lending of SDR 20.8 million (US$30 million equivalent) would be made available upon credit effectiveness, anticipated for January 2006. The closing date of the operation would be December 3 1,2006. It is envisaged that PRSC-I11 will continue to support the implementation of the PRS agenda in FY07.
6.12 The credit will follow the Bank’s disbursement procedures for development policy credit. The untied balance of paymentshudget support will be disbursed against satisfactory implementation ofthe development policy program and not tied to any specific purchases and no procurement requirements will be needed. Once the credit is approved by the Board and becomes effective, the proceeds ofthe credit will be deposited by IDA in an account designated by the Borrower and acceptable to the Bank at the Regional Central Bank BCEAO at the request of the Borrower. The Borrower shall ensure that upon the deposit ofthe credit into said account,
38 an equivalent amount is credited in the Borrower’s budget management system, in a manner acceptable to the Bank. The Borrower will report to the Bank on the amounts deposited in the foreign currency account and credited to the budget management system. If the proceeds of the credit are used for ineligible purposes as defined in the Development Credit Agreement, IDA will require the Borrower to promptly upon notice from IDA, refund an amount equal to the amount of said payment to IDA. Amounts refunded to the Bank upon such request shall be cancelled.
6.13 The administration of this credit will be the responsibility ofthe Ministry of Economy and Finance. The following summarizes the external audits:
0 Deposit account: At IDA’S request and within six months of credit and grant disbursement, the deposit account will be independently audited on terms ofreference acceptable to IDA; 0 Public (Government) accounts: The General Audit Office (Cow des comptes) is required by law to produce its annual report on the public accounts to Parliament with the loi des r2glements by the end ofthe year following the execution ofthe budget. A copy ofthis report and the public accounts attached should be submitted to IDA; and 0 BCEAO: The annual entity financial statements of the BCEAO, audited in accordance with International Auditing Standards promulgated by the International Federation ofAccountants, are publicly available.
6.14 These controls are intended to provide assurance that IDA funds have arrived at their intended destination and are being used for their intended purpose of funding budgeted public expenditures, subject to the borrower’s rules and regulations.
6.15 Monitoring and Evaluation. The quality of Senegal’s monitoring and evaluation system in the Ministry ofEconomy and Finance is relatively good even though line Ministries are handicapped by outdated information systems and weak management structures. Improving the monitoring ofpublic spending is one ofthe key Government’s objectives and has been placed at the center ofthe CFAA action plan and the PRS agenda (the fourth pillar). At the end of 2004, the Government identified a list ofmonitoring indicators for its PRS, which was endorsed by all partners operating in Senegal. For this reason, and to avoid duplication, many ofthese indicators have and will be used to monitor the PRSC program. When additional indicators were needed, we relied on those defined by the authorities in their sectoral strategies such as the CFMCPAR action plans or the second phase of the strategic plan for the health sector. Another source of information consists of the recent household survey. It will be used to establish a baseline for key outcome indicators for the PRSP progress report and the PRSC. It will be updated by smaller surveys every two years. The institutional responsibility for monitoring and evaluation activities under the proposed PRSC will be in the Ministry ofEconomy and Finance (especially the unit in charge of designing and monitoring the PRS agenda), with the support of the five working groups that will help strengthen the links with the sectors and other partners.
39 E. ENVIRONMENTALASPECTS
6.16 The Bank has determined that the specific actions supported under the proposed PRSC-I1 are not expected to have a significant effect on Senegal’s environment and natural resources, Although PRSC-I1 provides some support to measures aiming at strengthening the Government’s capacity for environmental and natural resource management such as the development of MTEF for the Ministry of Environment, most of the Bank’s support has been directed through other projects. The Bank has a long history ofsupporting the Government in its effort to protect the environment. Senegal is confronted with two main environmental issues: (i) degradation of its natural capital (soil, forest cover, fisheries, biodiversity); and (ii)pollution from poorly regulated industries, mainly around Dakar. Both these issues have direct linkages with poverty since the degradation of natural reduces undermines rural livelihoods, while pollution from unregulated industries affects the health ofneighboring communities, and in some instances directly degrades the resource base. To address these issues, the Government prepared a National Environmental Action Plan (NEAP) in 1993- 1997, which provided a conceptual framework for environmental management and the creation of an inter-ministerial council for environmental issues (CONSERE).29 Senegal also passed a new Environmental Act on January 15, 2001, including provisions for the use of Environmental Impact Assessments (EIA).30 The PRS has given significant attention to environmental issues, especially by requiring additional support to: (i)the protection and development of forests and watersheds; and (ii)implementation ofdevelopment and agro-forestry programs.
F. RISKS AND RISK MITIGATION
6.17 There are several risks associated with PRSC-11, which can be grouped into three main categories: (i)vested interests, (ii)vulnerability to external shocks, and (iii)weak capacity. All of these risks could lead to a smaller-than-estimated poverty impact ofthe policies supported by PRSCs. Yet, the design ofthe PRSC program with a relatively focused agenda and a sequencing approach should help mitigate these risks.
6.18 Vested interests can represent important reform obstacles, notably in view of the forthcoming (Presidential and legislatives) elections in the country scheduled for 2007 Policymakers may become more interested in their political survival than in implementing the longer-term economic agenda. Influential groups may challenge PRSC-supported policies, notably in the decentralization process and labor reforms, resulting in a slow-down ofthe reform process, and policies may be subject to reversal after their implementation. Under the PRSC, these different risks arising from vested interests are mitigated by the fact that all policy measures are implemented before credit approval and that each operation is embedded in a medium-tern policy framework. Owing to the close link between subsequent PRSCs, the likelihood that
29 The Bank had prepared a Country Environment Strategy Paper in 1994. An IDF grant from the Bank supported the preparation of the NEAP. However, preparation of a follow-up project was hampered by a perceived lack of commitment by the Government to provide counterpart resources required to implement the NEAP. 30 The Bank supported the dissemination of the new Environmental Act through a consultant Trust Fund in 2001- 2002.
40 reforms are being followed through and policies are sustained is being enhanced. The commitment of the Government to programmatic support through PRSCs combined with the financial importance of the Bank’s assistance enhances the likelihood that interests of narrow groups can be overcome.
6.19 While the risk of macroeconomic collapse, through unsustainable inflation or through sustained negative growth, is minimal, there is the more insidious risk of stalled growth and/or vulnerability to natural disasters , such as the 2002 drought when GDP growth declined to 1.1 percent, the locust invasion in 2004, or the recent flood in the Dakar region (August 2005). Furthermore, the recent increase in oil prices has and will negatively affect the Senegalese economy as evidenced by recent estimates provided by the Government (see footnote 5). Not only is Senegal largely dependent on oil imports, but also important sectors of activity, such as the electricity sector and the chemical industry, are highly energy intensive. The lack of the dynamism ofthe private sector, notably the low expansion of exports, is also a source of concern. Yet, the Government has proved its capacity to manage such shocks by mitigating their impact on the economy and poverty in 2002 and 2004. The favorable macroeconomic outlook and the positive fiscal position (with low debt ratios) should help Senegal to absorb unexpected economic shocks.
6.20 Achieving the credit objectives could become more difficult as a result of weak administrative capacity in Senegal and slow program implementation. This risk is the highest at the sectoral level and in local governments, even though the authorities have been allocating more resources to this objective, especially in their PRS. To mitigate this risk, the Bank with other donors is giving technical and financial support to enhance capacity at the local level and will consolidate its strategy toward local communities in a new CDD approach that is expected to begin in FY06.
41
SCHEDULES
42
Schedule 1: Letter of Development Policy (Original is on file)
Republic of Senegal No. 00922/MEF/CSPLP One People - One Goal - One Faith _____------MINISTRY OF ECONOMY October 1,2005 AND FINANCE
To: Mr. Paul WOLFOWITZ President, World Bank 1818, H Street, WASHINGTON, D.C. 20433 Fax No. 001 202 522 15 85
LETTER OF DEVELOPMENT POLICY
Dear Mr. Wolfowitz:
The purpose ofthis letter is to request, on behalf ofthe Government ofthe Republic of Senegal, a Poverty Reduction Support Credit (PRSC) in an amount equivalent to US$30 million for the purpose of supporting our poverty reduction strategy adopted by the World Bank Executive Directors in December 2002. The progress reports for 2003 and 2004 highlight the progress made in implementing the strategy, which is also receiving support from all of Senegal’s development partners. This Strategic Orientation Paper (NOS), the second of its kind, describes the policies and actions planned in support of Political, Economic, and Social Good Governance, with a view to achieving the objectives defined in the Poverty Reduction Strategy Paper (PRSP) and in the Millennium Development Goals (MDGs). Accordingly, it first provides an introduction to recent economic and social conditions in Senegal and then briefly describes the progress made with implementing the PRSP in the 2003-2004 period. It then examines the strategic outlook for the end of the 2003-2005 program which will enhance the government’s ability to prepare its next PRSP, which should be ready in the next few months. Finally, it passes in review a matrix of socioeconomic policy actions, known as the
43 PRSP matrix, developed by the government in cooperation with the staff of the World Bank, other donors, and civil society, and which constitutes the linchpin ofthe actions supported by the second PRSP.
I.Progress with PRSP implementation 1.1. Recent developments in the economic and financial situation 1. There are four thrusts to the PRSP prepared by the government: (i)wealth creation; (ii) capacity-building and the promotion of basic services; (iii)improving the living conditions of vulnerable groups; and (iv) implementation monitoring and evaluation. This section retraces the progress made in respect of each of these thrusts in 2004, indicates the efforts made to support the main activities, and presents the main findings obtained by monitoring changes in socioeconomic indicators. The interconnection between the Priority Action Program (PAP) and the PRSP is also evaluated throughout this implementation period in order to improve the consolidation ofgains with a view to enhancing the efficiency ofprogram execution.
2. In accordance with the PRSP, macroeconomic stability constitutes an essential component of any strategy aimed at promoting strong and sustainable economic growth. In order ensure the efficiency of state intervention, the government’s actions are focused on the following areas: (a) the legal and judicial framework; (b) financing; (c) the simplification of administrative procedures and enhanced transparency; (d) trade and price liberalization and the promotion of competition; (e) continued privatization; (0 labor legislation; (g) the reform of public administration; and (h) tax policy and the efficient management ofpublic resources. 3. Senegal’s economic performance was satisfactory in 2003. Economic activity was sustained throughout that year following the rainfall shortage noted in 2002, which had led to a decline in growth. The trend which began in 2003 was continued in 2004. The revision of the macroeconomic framework is focused on the hope of significantly reducing poverty with a faster pace of wealth creation. Measures that would improve income distribution will have to be taken. Thus, the macroeconomic performance recorded since the implementation of the PRSP is encouraging in a number ofrespects. 4. The government has taken stock of developments in the first two years (2003-2004) in annual progress reports on PRSP implementation. These reports review developments in respect of the various basic thrusts ofthe PRSP which are monitored by observing the guiding principles set out in that paper. It has begun work on revision of the PRSP in order to have a new version of the PRSP for the second phase (PRSP 11) covering the period 2006-2008. 5. At the outset, it is important to stress that the government acknowledged the importance of the PRSP by devoting particular attention to establishing the institutional mechanism required for its implementation. Accordingly, since 2003 the 11 regions of the country have established their Regional Steering Committees and now have Regional Operations Programs (PORs). This effort continued at the sectoral level, as the 24 ministries responsible for oversight ofthe sectors directly and indirectly associated with implementation of the poverty reduction strategy (PRS) prepared Sector Operations Programs (POSs) in June 2003.
44 6. The review of the actions taken in 2003 had already shown that most of the transitional measures called for in the PRSP have been taken and the various commitments entered into by the government vis-a-vis its development partners have been met, and the technical and institutional instruments required for proper implementation of the PRS have been established. The state has gone to considerable lengths to observe the ratios for the allocation of public expenditure contained in the PRSP so as to promote sustainable development in favor of the poorest population groups. Such efforts in 2003 led to a clear improvement in 2004, as described below. 7. Real GDP growth amounted to 6.2 percent in 2004 as compared to 6.5 percent in 2003, and fiscal and external equilibria were maintained. Overall, the 2004 budget was executed prudentially and satisfactorily in a context of sectoral and structural reforms to meet the needs of PRSP implementation. These favorable developments as regards the macroeconomic indicators were recognized by reaching the HIPC Initiative completion point in April 2004 and by Senegal’s successful approach to the Paris Club, as well as by Senegal’s eligibility for the Millennium Challenge Account (MCA) initiative. While growth in 2004 is attributable to the sound performance of the secondary and tertiary sectors, its dip from the 2003 level is associated with the declining performance observed in the primary sector. 8. Growth in the primary sector is estimated at 4.3 percent in 2004 as compared to 19.8 percent in 2003, owing to the slowdown in the agricultural subsector, which experienced growth of 4.2 percent owing to the sharp decline in cereal grain production following the grasshopper infestation in the northern part of the country. The livestock subsector grew by 5 percent in 2004 thanks to improved yields resulting from continuation of the policy to promote local meat production. For fisheries, production is estimated to have increased by 2.4 percent in 2004, a slowdown from 2003 (4.9 percent) owing to the decline in traditional fishing following application of the biological pause decided upon by the government in keeping with the sustainable development objectives set forth in the PRSP as a priority for the fisheries sector in order to ensure the “sustainable management and restoration offishery resources.” Similarly, the policy of maintaining ecological equilibrium permitted growth in the forestry subsector estimated at 4.0 percent in 2004. 9. Growth in the secondary sector is estimated at 5.6 percent in 2004 thanks to the satisfactory performance of all subsectors other than mining and the oilseed plants; this constitutes a downturn from 2003 (6.4 percent). Indeed, despite the availability ofphosphate for a full year from the Tobene quarry, the mining and quarrying subsector showed a decline of 11.4 percent in 2004 owing to reduced extraction activity at other mines and quarries, in particular salt, and to a lesser extent the decline in phosphate production. Thanks to the investments made with a view to increasing the production capacity and improving the management ofthe primary enterprise, as well as the performance achieved in respect of rural electrification, the energy subsector continued to maintain a satisfactory level ofperformance with growth of 1.1 percent in 2004. In the construction and public works subsector, growth continued to be sustained owing to public investment in basic infrastructure and the dynamism of household housing construction. The subsector showed growth of 13 percent in 2004 as compared to 10.5 percent in 2003. Notwithstanding the persistence of the unfavorable environment for phosphoric acid in 2004, other industries regained their buoyancy with an increase of 7.0 percent, thanks to growth in the construction materials, oil refining, and other food industry subsectors.
45 10. In the tertiary sector, growth registered 7.7 percent in 2004, led for the most part by the transport and telecommunications subsectors. Indeed, the telecommunications subsector expanded by 10.6 percent thanks to the growth ofmobile telephony and the increased activity in teleservices following the deregulation ofthe sector. Commercial activities maintained their rate of growth at 6.1 percent as against 4.2 percent in 2003, owing to improved supply to the markets resulting from the sound performance ofall sectors. The supply of health and education services expanded by 4.0 percent and 7.0 percent, respectively, owing to the efforts made in these priority sectors, in particular through the increased staffing under the civil service recruitment policy included in the PRSP in order to support the thrust relating to “capacity-building and access to basic social services.’’ 11. As regards prices, the increase in the GDP deflator is estimated at 1.9 percent in 2004 as compared to 0.9 percent in 2003. This rise is partly the result of the sharp increase in the price per barrel of petroleum, which reached historic levels, attenuated by the depreciation ofthe U.S. dollar vis-a-vis the euro. However, its impact on consumer prices remains moderate, thanks to the continued downward trend in the prices of local products. Overall, the inflation rate as measured by the Harmonized Consumer Price Index was 0.5 percent in 2004, as compared to the community norm of3 percent for the WAEMU member countries. 12. On the demand side, end consumption grew in real terms less quickly than GDP in 2004 (5.0 percent). This is the outgrowth ofthe slowdown in the pace of private consumption, which grew by 5 percent as against 7 percent in 2003. However, public consumption showed renewed dynamism in 2004, with an increase of 5.3 percent. As a result, the level of domestic savings improved to 10 percent, as compared to 7.7 percent in 2003. However, this rate is slightly below the one forecast in the trend-based scenario for the PRSP framework, set at 10.3 percent in 2004. This said, the national savings ratio was 16.3 percent, or 2 percentage points above the rate used for the high case scenario in the PRSP, owing to the dynamic nature of resource flows from abroad. 13. The trade balance deteriorated, as the value of goods imports increased by more than that of exports. Overall merchandise exports (adjusted for general trade) were up by 6.1 percent from the 2003 level, and closely approached the rate forecast in the trend-based scenario (6.1 percent). 14. Investment grew by 5.9 percent in real terms, owing both to public investment and to private investment, which is becoming more and more dynamic. The investment ratio thus reached 23 percent, compared with 20.7 percent in 2003, thereby exceeding the PRSP target of 21.2 percent. Regarding net external demand, exports of goods and services increased by 3.6 percent in real terms, while the volume ofimports ofgoods and services rose by 4.2 percent. The net present value ofthe overall public debt represents 133.9 percent ofexport receipts in 2004, as compared to 141.7 percent in 2003. 15. Capital expenditure increased by 21.2 percent over the level for the preceding year to CFAF 410.3 billion, of which CFAF 198.8 billon was financed domestically (excluding HIPC funds). This hike in capital expenditure is attributable mostly to the government’s interest in the basic social sectors identified in the PRSP. The ratio ofdomestically financed capital expenditure to tax receipts exceeds the 20 percent threshold set as part ofthe WAEMU convergence criteria. 16. Current expenditure is estimated at CFAF 553.9 billion, an increase ofCFAF 24.4 billion over the preceding year. This increase is largely attributable to the wage bill, which amounted to
46 CFAF 217.6 billion as against the CFAF 203.7 billion for 2003, owing to the special civil service recruitment campaign covering 5,000 staff per year as part of the strategy implementation. This said, the ratio ofthe wage bill to tax receipts remains well below the 35 percent ceiling included among the WAEMU convergence criteria. Other current expenditure came to CFAF 289.6 billion as compared to CFAF 281.2 billion in 2003, a slight increase of 3.5 percent. 17. Regarding the financing of the fiscal deficit in 2004, the net use of domestic resources was a negative CFAF 20.1 billion, while drawings on external financing were estimated at CFAF 156.5 billion, basically consisting ofproject lending. Overall, fiscal management was satisfactory and the tax ratio target was attained, as was the target for capital expenditure as a proportion of domestic resources as compared to tax receipts and the overall fiscal deficit.
1.2. Performance with PRSP implementation in 2004 1.2.1. Budget execution 18. While 2003 was characterized by continuing and consolidating the rehabilitation ofpublic finances, as reflected in the satisfactory collection of tax receipts and a solid level of public expenditure execution, fiscal 2004 was, in overall terms, consistent with the three-year economic and financial policy program for the period 2003-2005. Thus, as regards budget execution in 2004, the basic budget balance (excluding HIPC expenditure and the cost of structural reforms) was in surplus, while the overall public deficit (excluding grants) was within the parameters agreed with the International Monetary Fund (4.8 percent of GDP). This fiscal performance was achieved in a context of increased tax receipts and an improved allocation of public expenditure toward the PRSP priority sectors, such as health and education, each of which increased by 4.0 percent over the 2003 levels. The government also continued its civil service recruitment policy initiated in 2003. 19. The stocktaking on execution ofthe matrix of measures initially planned under the PRSP showed that the projected actions were almost all implemented in 2004. Macroeconomic performance made it possible, in the case of most of the objectives set in the basic PRSP framework, to achieve the results of the high case scenario, while in others the trend-based scenario was approximated. Despite everything, it must be acknowledged that the 6.2 percent growth level in 2004 is below the target of 8 percent necessary to create sufficient jobs on the labor market and reduce poverty by half by 20 15. 20. Major efforts were made to improve the absorption ofresources, both as regards domestic resources (including HIPC funding) and as regards external resources. Implementation ratios against domestic financing resources provided under the budget by strategic thrust are relatively high for the “wealth creation” thrust (80.65 percent) and the “improved living conditions for vulnerable groups” thrust (98 percent), in contrast with the poorer performance for the thrust on “capacity-building and access to basic social services,” for which the average implementation ratio is 45.6 percent. Furthermore, as regards the PRSP guiding principles, the measures advocated, in particular as regards budget reforms, are contributing to improving fiscal transparency. Implementation in 2004 made it possible to highlight the performance relating to reducing processing lags for the files from the spending ministries (education, health, environment, justice, etc.). The government undertakes to continue its efforts while consolidating the gains made.
47 21. PRSP implementation in 2004 made it possible to strengthen the implementation and monitoring mechanism in some respects by building capacities of the focal points and regional committees for formulating the project files submitted in the budget trade-off process. This made it possible to ease the constraints associated with incompletion of materials for the projects described in POSs, PORs, and the PRSP for budget programming purposes. The optimal functioning of the steering and monitoring bodies remains limited, however, by the lack of sufficient resources to enable them to play their respective roles to the fullest. 22. Activities in 2004 were also used to good advantage by the civil society organizations (CSOs) to structure themselves into four major poles, namely the trade unions, women’s organizations, NGOs, and Grassroots Community Organizations (GCOs). These poles consolidated their presence in the 11 regions of the country and are now involved and consulted in the various public policy formulation processes. Based on these gains, the CSOs will be able to build the civil society observatory contemplated in the PRSP.
1.2.2. Evaluation of the PRSP indicators in 2004 23. In order to ensure the monitoring of PRS implementation, the government, in agreement with the development partners, has defined a list ofindicators for use in PRSP monitoring. In this context, the second Senegalese Household Survey (ESAM II),conducted in 2001/2002 and published in 2004, showed that the poverty rate declined significantly in Senegal between 1994/1995 and 2001, dropping from 67.9 percent to 57.1 percent, although poverty still affects more than half of Senegal’s population. According to estimates, the poverty incidence was 55.8 percent, 54.0 percent, and 52.5 percent for 2003, 2004, and 2005, respectively. 24. The strategy adopted in the PRSP is clearly focused, as regards its “wealth creation” thrust, around the agricultural sector. In terms of implementation, the share of this sector in GDP increased to 8.5 percent in 2004 as compared to 8.1 percent in 2003. However, performance still falls below expectations, among other reasons owing to the rainfall shortage and the grasshopper infestation, The government has taken steps to make adequate resources available so that the contribution of this sector to GDP will constantly exceed 10 percent in order to combat rural poverty. 25. In the education sector, the PRSP opted for a number of measures aimed at strengthening the allocation ofdomestic and external resources. The objectives were largely met, as operating expenditure in the education sector represented 40 percent of the total operating budget in 2004. This same favorable development was reflected in an increase in total expenditure in favor of education (operating budget plus investment budget) of 10.6 percent between 2003 and 2004 to 18.1 percent of the overall central government budget, reflecting the government’s clear desire to bolster the budget resources allocated to the education system. The resources mobilized made it possible to build classrooms for all levels of education. In addition, significant progress was made in private education, with the establishment in 2004 of 27 middle schools and 3,108 elementary school classrooms. 26. The indicators pertaining to educational statistics also showed clear improvements. The gross enrollment ratio in elementary school has been on a steady rise since 2000. It rose to 79.9 percent in 2004 from 75.8 percent in 2003. This reflects a year-on-year increase of over 5 percent. The attendance rate at the CI level increased from 85.1 percent in 2003 to 91.1 percent in
48 2004, or an increase of 6 percentage points, making it possible to slightly exceed the target set by the PRSP for 2005 (90 percent). As regards the education of girls, the government made a major effort in respect of gender equity. The attendance rate at the CI level was 93.9 percent in 2004, and the enrollment ratio for girls was 77.3 percent, exceeding the objective of 76 percent set by the PRSP. Comparable performance was not achieved for boys, for which the attendance rate at the CI level is 90.4 percent, while the enrollment ratio is only 82.5 percent in 2004, falling short of the initial objective of 84 percent sought by the PRSP. If these trends continue, universal enrollment could be achieved by 2010 in keeping with the MDGs. The completion rate in primary school increased from 44 percent to 48.3 percent over the period 2003-2004. While these levels are still low, the improvements in this indicator are rather significant, as the levels attained could exceed 50 percent in 2005, should the trends continue. 27. In the health sector, the government clearly evidenced its ambitions as regards the infrastructure and personnel coverage ofthe sector. Indeed, as in the education sector, the share of budgetary expenditure allocated to the health sector has steadily increased. Thus, the share of the health budget (operating budget plus investment budget) in the total budget increased from 7.7 percent in 2003 to 7.8 percent in 2004, although it remains below the objective of 10 percent set in the PRSP. These resources made it possible among other things, under the operating budget in 2004, to recruit 5 11 health personnel in 2005. 28. As regards the Performance indicators, the rate of DPT3 vaccination coverage among children aged 0-11 months increased by 5 percentage points between 2003 and 2004, from 70 percent to 75 percent. This result already exceeds the objective set in the PRSP, which was for 70 percent by 2005. The rate ofprimary curative care consultations rose to 50 percent in 2004. It grew by 8.7 percentage points between 2003 and 2004, which should make it possible to increase it to over 52 percent in 2005, the level set as the objective to be attained under the PRSP. The percentage ofchildbirths assisted by trained personnel was 59 percent in 2004, as against a PRSP target .of 60 percent. As compared to the reference level, which was 54 percent in 2002, performance was relatively significant, even though efforts still need to be made to achieve the MDGs in this area. HIV/AIDS prevalence among the population was 1.5 percent in 2003. According to the EDS-IV survey conducted the same year among a larger sample, however, this rate was found to be considerably lower at 0.7 percent. The objective set in the PRSP was to hold the rate below 3 percent. 29. The incidence of underweight children under age 3 has remained virtually stable. It dropped from 19.1 percent in 200 1, the reference year for the PRSP, to 19 percent in 2004. The preliminary results of the EDS-IV survey conducted that year situate this rate at 16 percent, already exceeding the PRSP target of 17 percent set for 2005. This result would place Senegal among the countries with the lowest child malnutrition rates in Africa. The promising results attained by the Nutrition Improvement Program (PRN) as regards reducing the weight insufficiency among children covered by its interventions have shown that Senegal will be able to achieve the Millennium Development Goals if it doubles its investment in this area, 30. Access to safe drinking water has improved significantly. In urban areas, the rate of access to safe drinking water increased to 90 percent in 2004 (for the most part thanks to the subsidized connection programs). In addition, the rate of access to sanitation systems was 57 percent. In contrast, improvements were less pronounced in rural areas: the rate ofaccess to safe drinking water increased from 61 percent to 64 percent over the 2001-2004 period, while the
49 access rate to sanitation systems stagnated at about 17 percent. The government is firmly committed to rural development by means of a programmatic approach focused on NGOs for the water and sanitation sectors, this taking the form of its adoption of a Millennium Program for Drinking Water and Sanitation (PEPAM 2015) covering the period 2005-2015. To this end, it intends to make access to safe drinking water universal in urban areas and achieve at least a coverage rate of 82 percent in rural areas. With respect to access to sanitation, the objective is to increase such access to 78 percent for urban areas and 59 percent for rural areas. 3 1. In the infrastructure sector, notwithstanding the attention devoted to improving urban mobility in order to reduce its excess costs to the economy, the various actions undertaken have focused on strengthening the support infrastructures in rural areas, facilitating access to telecommunications services by expanding the telephone network, and improving access to rural areas, In keeping with the objectives set for each year under the PRSP, the percentage of the unpaved road system classified as being in good or average condition improved from 19 percent in 2003 to 25 percent in 2004; the comparably rated percentage of the paved road system improved from 66 percent in 2003 to 72 percent in 2004. 32. In terms of rural infrastructure, in particular as regards improvements in the work on hydroagricultural projects, the resources mobilized have made it possible to conduct a series of general and feasibility studies and to carry out improvement works on irrigated perimeters. The share of the agricultural sector’s investment budget excluding debt in relation to domestic resources that is used in this way is 10 percent on average over the implementation period. Efforts remain to be carried out, and the government undertakes to do so. To this end, mention may be made of the Senegal River Delta Development Agency (SAED), the completion and acceptance of the Medina-Pete works (1,700 hectares) and Kobilo works (750 hectares), completion of 20 percent to 30 percent of the works to improve the village-level irrigated perimeters ofGababe, the Matam and Dolol-Odobere catchments, and the initiation of the works for Matam-Bake1 access roads. The cross-cutting nature of energy makes the issue of electrification one of the government’s priorities in rural areas, as a result of which the rural electrification rate rose from 8 percent in 2003 to almost 12 percent in 2004. The government will continue its efforts with a view to achieving a rate ofover 20 percent, in accordance with the objective set for 2010. To do so, the state has undertaken, with support from ASER and SENELEC, to electrify all 114 ofthe district seats. 33. The decentralization process is also included among the government’s priorities, In terms of application, the decentralization endowment funds (FDDs) increased from CFAF 6.6 billion in 2000 to CFAF 10.1 billion in 2004. The aim sought is to increase these funds to CFAF 15 billion by 2010. Along the same lines, the local government procurement fund (FECL) increased from CFAF 3.5 billion in 2000 to CFAF 4 billion in 2004, although the latter figure represents somewhat of a drop from the CFAF 6 billion achieved in 2003. However, the “relative share of state financial transfers to local governments as a percentage of the state budget excluding debt” declined slightly between 2003 and 2004, from 2.2 percent to 1.9 percent. The government has undertaken to continue its efforts in favor of a gradual decentralization of financial resources so as to provide local governments with adequate resources, in line in particular with their responsibilities for the delivery of social services in both education and health. Beginning in 2006, the effective start of the decentralization of the management and execution of the capital expenditure programmed by the state and financed by domestic resources (decentralization ofthe
50 BCI) should be able to reverse the decline in these decentralization funds. This firm commitment on the part ofthe state could encourage its development partners to shift more toward financing modalities taking the form ofbudgetary support. 34. Good governance is assessable by the review by the General Audit Office of the operating accounts ofthe state, the local governments, and public institutions. The central government has been able to transfer all of its operating accounts up to 2003, thereby making up for delays which had accumulated in recent years. These accounts are now in the process ofbeing audited by the General Audit Office, the staff of which has been augmented by assistants. A similar effort has been initiated at the level of the regions and the public institutions, which are lagging considerably behind as regards transferring their operating accounts to the General Audit Office. Consequently, the percentage of accounts received by the Office out of all those to be received has risen very slowly from 2000 to 2004, increasing from 8.7 percent to 14.1 percent. Major efforts are planned to increase this rate to 37.3 percent in 2005, 75 percent in 2010, and 85 percent in 2015. As regards the state’s operating accounts, the delays observed are expected to be totally eliminated during 2006. 35. In the environment sector, the challenges to be met relate to reducing the degradation of natural resources and the environment, contributing to poverty reduction and improving living standards, improving the quality of services rendered, and preserving the global environment. Thus, efforts continue to be focused on rehabilitating the plant cover and habitat for fauna, the promotion of attitudes and behaviors that favor a rational management of the environment and natural resources, preservation of the marine and coastal environment, promoting the participation of the people and involvement of the private sector in the management ofnatural resources and the environment, building the capacities of the state and local governments, and the implementation ofaction plans relating to international agreements.
1.3. Evaluation of the PRSP’s cross-cutting actions in 2004 36. Implementation of the PRS is dependent on cohesive sectoral policies and strategies which make it possible better to interconnect the measures contemplated (as well as their financing) over time. Accordingly, various sectoral and cross-cutting policies have been initiated in various sectors in accordance with the orientations and guiding principles inscribed in the PRSP. As regards the first thrust of the PRSP (wealth creation), the Private Sector Development Strategy (SDSP) has been broadly addressed by the PRSP matrix of measures, but the actions identified are experiencing implementation delays. Although the approval procedures and time delays have been eased considerably, the government noted the persistence of delays in investment in many areas and the lack of aggressiveness on the part of the private sector, particularly the domestic private sector. For this reason, the government has stressed the development of an Accelerated Growth Strategy (SCA) which has made it possible to identify a list of five (5) high-potential sectors which could provide key activities to serve as hubs: agriculture and agroindustry, seafood, tourism and cultural and crafts industries, textiles and clothing manufacture, and ICT and teleservices. Among the criteria adopted to guide the selections are the impact on job creation, a factor which can contribute substantially to reducing poverty in Senegal.
51 37. As regards the priority areas covered by the PRSP, agriculture plays a preponderant role owing to its importance in terms of both production and jobs. The law providing agro-silvo- pastoral guidelines adopted in 2004 will serve as the basis for developing the National Agricultural Development Plan (PNDA), the National Livestock Development Plan (PNDE), and the National Forestry Action Plan of Senegal (PAFS). It is based on the following guiding principles: economic efficiency, social equity, sustainability, economic liberalization, decentralization, solidarity and subsidiarity, subregional competition, and an agricultural common market within the WAEMU and ECOWAS. These principles are derived from the government’s political, economic, and social objectives contained in the PRSP. The implementing provisions, which have not yet been completed, should make it possible to reflect the aforementioned sectoral planning tools in investment programs, especially in special agricultural programs whose implementation calls for consistency between sector-level planning and the PRSP. 38. Implemented since January 2000, the PDEF is oriented toward a “program” approach that can bring about considerable improvement in the performance of the educational system in the course of implementing the second phase (2005-2007). The other education subsectors, such as training and enhancing public awareness of sustainable development, have special prominence in the preparation ofthe national strategy on sustainable development. 39. The National Health Development Program (PNDS), of which the first five-year phase has come to a close, was revised in 2004 in order better to reflect the poverty reduction strategy. The resulting paper on the second phase of the PNDS has been adopted by the Council of Ministers. The paper is characterized by the emphasis placed on the performance of the healthcare system and the priority according to improving access to quality care on the part of vulnerable population groups. 40. In the area of sports, the development policy letter for this sector proposes a short- and medium-term strategic framework and establishes the intervention framework. Public efforts continue to be concentrated on the construction and refurbishing of sports infrastructures and targeted and mass training. This policy is conducted with the support of local governments and development partners in a broadly participatory framework. 41. As regards decentralization, the 2003-2005 plan developed by the government has been satisfactorily carried out, in particular through the increase in state financial transfers and the enhancement of the human resources assigned to the Regional Development Agencies (ARDs). For the decentralization of the BCI, a study has been conducted and the results are currently being shared among the various stakeholders. An action plan will be submitted to the government at an interministerial council. Before the implementation phase for the decentralized BCI scheduled for 2006, a number of prior actions are now being taken. This includes in particular the identification of investment projects in the education and health sectors, the modification of the budget and accounting nomenclatures of the local governments, including a broader range ofinvestment receipts.
52 42. Although energy is regarded as a strategic sector for supporting wealth creation, its cross- cutting nature makes it an important instrument for combating poverty in all areas of socioeconomic life. To show this contribution even more clearly, initiatives are being taken within a multisectoral committee responsible for developing the strategy of synergy between energy and the other strategic sectors for combating poverty. 43. The development of the state’s capacities is based on a twofold strategy. The first emphasizes improved governance and transparency. As part of its continuing quest to improve its financial management and create the solutions necessary for the more efficient utilization of its resources, particularly those allocated to poverty reduction, the government has engaged in appraisals of fiscal management, the accounting practices of the private sector, and government procurement, in accordance with CFAA-CPAR plans. Furthermore, as regards the PRSP guidelines, the measures advocated, in particular as regards budget reforms, are contributing to improving fiscal transparency. The actions taken in 2003 in the context of deconcentrating payment authorization and decentralizing the budget with a view to simplifying procedures and speeding up expenditure execution were broadly consolidated in 2004. 44. In this spirit, the objectives sought are improvement in budget and government procurement procedures, effective utilization of resources, and transparent fiscal management and dissemination ofbudget and financial information. Efforts will be focused on preparation of the budget, which is gradually moving more toward performance-based management (MTEFs and Sectoral MTEFs), the decentralization of payment authorization, computerization of the public expenditure sequence, the regular production of operating accounts and draft supplementary budget laws, and internal and external audits of public finances. As regards procurement procedures, the reforms initiated should make it possible to have a more functional legal, regulatory, and institutional framework which protects ethics, transparency in procurement practices, and the integrity of the procurement system. The new legal framework for government contracts as well as the institutional mechanism for managing the procurement system should become operational in 2006. 45. The protection of vulnerable groups, the main component ofthe third thrust of the PRSP, suffers from the lack of an overall harmonized strategy. While a number of individual initiatives are currently under way, it is difficult to assess their impact on the most vulnerable groups. For this reason, the authorities have devoted their full attention to development of a strategy, With World Bank support, this strategy is expected to be finalized by end-2005. 1.4. Constraints associated with PRSP implementation 46. Implementation of the PRSP has run up against a number ofstructural constraints relating to the social and economic situation. The main recommendations formulated in order to improve PRSP implementation have related to the interconnection between the budget and the PRS, the programming and budgeting process in general, the monitoring and evaluation of policies, projects, and programs, information and communications, the priority sectoral and cross-cutting measures, and the orientations that are to guide the revision of the PRSP. Adoption of these measures constitutes a priority for the authorities, as they should make it possible to achieve better results, in particular a better match between budget revenue and the PRSP objectives, improved coordination with the major development partners, and a reduction in poverty. In short, they should help Senegal achieve the Millennium Development Goals.
53 47. Moreover, the Civil Society Organizations (CSOs) are an important asset to the extent that they are engaged in poverty reduction efforts and their projects are consistent with the Poverty Reduction Strategy. However, the lack of predictable resources, the absence of a monitoring mechanism operational at all levels, the absence of coordination and concertation, and the lack of synergy among stakeholders have a negative impact on the quality of results. In this regard, an important role is filled by all the stakeholders in local development, the new Automated Monitoring System, and the possibility of accessing more consistent amounts of public funding for combating poverty in all regions. 48. Finally, the constraints associated with capacity-building in the technical ministries, local governments, and deconcentrated agencies as regards project and program formulation and monitoring will need to be addressed in order to enable the various stakeholders to play their role in the implementation and monitoring of Senegal’s Poverty Reduction Strategy. 49. The performance and impact indicators are also showing signs of positive developments that will make it possible to achieve the MDGs if trends are maintained. However, in the social sectors, efforts will have to be made to further improve the level of education, the quality of interventions, and the maintenance of infrastructures. The impact that investments in cross- cutting areas has both on the performance of the social sectors and on wealth creation demonstrates the need to devote more sustained attention to these areas, in particular the support and transport infrastructures (for urban and rural mobility), social protection, and access to electricity, all ofthem aspects that have long been regarded as major constraints.
11. Development goals and strategy of 2006 11.1. Economic development objectives 50. To reach the objectives for economic growth and equity, inflation control, and internal and external financial viability over the period 2006-2008, the macroeconomic policies will be backed up and strengthened by appropriate sector policies, all of which will contribute to implementation ofthe poverty reduction strategy. 5 1. The medium- and long-term financial and economic development objectives will continue to be guided by the orientations set forth in the PRSP including, in particular, the need to satisfy the growing social demand, which has become more pronounced as democracy has taken hold. In addition, the government is attempting to accelerate growth of the economy within a context of inflation control and adherence to good practices in the area of financial and money management in order to address the priorities of poverty reduction in a meaningful way. Adherence to these principles is already producing results in the projected performance for 2005, with real GDP growth projected at 6.1 percent due to the favorable behavior of all sectors. As for general price levels, inflation as measured by the GDP deflator should remain below the threshold of 2 percent in 2005, despite the impact of the oil shock, with the implementation of prudent monetary and budget policies and good market supply. In terms of fiscal policy, one of the main objectives should be to increase the contribution of income taxes while reducing the weight ofconsumer taxes. 52. With respect to the pillar of wealth creation, the government of Senegal, having made the decision to support the private sector as an engine of growth and job creation, intends to
54 strengthen its efforts to promote the private sector. In this regard, the Accelerated Growth Strategy presents itself as a way to raise the real GDP growth rate to the levels required for the PRS and the MDGs. Thus, in essence, this strategy will help address on a broader scale the PRSP goal of promoting wealth-creating opportunities, specifically in five key sectors. It will also rely on a favorable macroeconomic environment marked by success in reaching the HIPC completion point in April 2004, Senegal’s eligibility for the Millennium Challenge Account (MCA), implementation of the National Good Governance Program (PNBG), and implementation ofthe government finance and procurement system reforms (CFAA-CPAR). 53. In line with the efforts to promote private sector activities, the government’s investment policy will be strengthened. Increased mobilization of internal resources and more effective government spending, reflecting the recommendations of the World Bank public expenditure review, will be instituted. After an increase in public savings, actions will increasingly focus on the infrastructure underlying production (roads, telecommunications, productive sectors, etc.), human resources development, private sector development, and efforts to improve the living conditions of populations. Special emphasis will be placed on the effort to improve urban mobility in Dakar. New procedures will be set in place to expand the capacity to absorb resources and improve the quality of public works, specifically through program budgets instituted in the education and health sectors. 54. These reforms, combined with intersectoral policies aimed at creating an environment conducive to private sector development, making the judicial system more effective, fighting corruption, and improving local governance and government services, should further solidify the attractiveness of the Senegalese economy, which is already much greater as a result of the very positive evaluations conducted by the international rating agency Standard & Poor’s in April 2004. Aware ofthe fact that economic growth policy must create jobs in order to play a decisive role in poverty reduction, the Senegalese government has resolved to pursue the following specific objectives: (i)improve work force management and employability; (ii)increase the efficiency and transparency of the job market; (iii)promote self-employment in rural and urban areas; (iv) promote labor-intensive activities; (v) improve the economic and social status of individuals in a difficult situation with respect to the job market; and (vi) improve the health and living conditions ofworkers.
11.2. Sector policies 55. To strengthen implementation ofthe PRS, the government will carry on with its efforts in the various priority sectors. Thus, the primary sector will continue to receive special attention. The objective will be to raise growth in the agricultural subsector to roughly 10 percent as a result ofnational policies focusing on sustainable agricultural development, food security, greater income for rural populations, and environmental protection. These policies and strategies should be consistent with the broad orientations established by the government in its sector programs, Thus, the law providing agro-silvo-pastoral guidelines (LOASP) constitutes the basis for developing and implementing operational programs such as the National Agricultural Development Program (PNDA), the National Forestry Action Plan of Senegal (PAFS), and the National Livestock Development Plan (PNDE). The principles of economic effectiveness and equity espoused by this law are based on the PRSP objectives.
55 56. Because stockraising in Senegal is extensive in nature, the margin for improvement is quite significant. The various projects to be implemented should improve food security through a significant increase in local production and thereby increase the consumption of meat and milk beyond their current level. Efforts will also be made to develop traditional poultry farming through vaccinations, undertaken by a number of initiatives under projects such as PAPEL in the forest/pastoral and groundnut producing areas, and the genetic improvement of local breeds by introducing pedigree sires. The ultimate impact of these efforts will be to improve sustainably the income level of rural populations and diversify the sources of development of purchasing power. 57. An increase in meat production will also result from the development of short-cycle species. To that end, initiatives are currently underway with a number of species, including: (i) improvement of the swine subsector, especially in the Ziguinchor region with its large swine population and the Petite CBte region; and (ii)systematic vaccination of small ruminants inasmuch as small ruminant improvement and production play a leading role in the growth of income in rural areas. These initiatives will be consolidated and continued over the coming years. 58. With respect to milk production, the targeted approach is to promote artificial insemination through the livestock component ofthe agricultural program to be implemented as part of PAPEL, especially in the groundnut producing area. The objectives are to: (i)raise average annual consumption from 27 liters to roughly 40 liters per person in the coming years; and (ii)refocus milk demand on local production so as to reduce the foreign exchange costs incurred by the national economy. 59. In terms of the epidemiological situation, the priority is now placed on efforts to control rinderpest, contagious bovine pleuropneumonia, small ruminant plague, Newcastle’s disease, African swine fever, foot-and-mouth disease, African horse sickness, Rift valley fever, and contagious bovine lumpy skin disease. Accordingly, the Pan-African Epizootic Control Program (PACE), which receives financial support from the European Union, will step up its efforts to help in: (i)the establishment of epidemiological surveillance networks focusing on the principal animal diseases; (ii)acquisition of the necessary capacities for organizing the epidemiological control of these diseases; and (iii)development of efficient and sustainable distribution of veterinary products and services. 60. With respect to rural water supply, the strategies strive to liberate the agricultural subsector from weather contingencies in the medium term and safeguard crop production through greater availability and better accessibility of water resources. To that end, the various projects aim to: (i)build the capacities of tubewell management committees; (ii)promote and develop new and renewable energy sources; (iii)strengthen and expand the policy of collective service connections; (iv) construct motorized tubewells; (v) rehabilitate and pumice modem wells in rural areas; and (vi) rehabilitate tubewells and construct storage capacity. Rainwater storage, which has already been successfully attempted in the Thies region, specifically by constructing catch basins, will be expanded to other regions. To address the chronic shortage of rainfall, the government has put considerable effort into the development of artificial rain and intends to continue its work in this area to minimize the inherent risks of the growth and livestock feeding cycle in rural areas.
56 61. With respect to rural water supply for agricultural purposes, the government plans to liberate agriculture from weather contingencies in the medium term and safeguard crop production through greater availability and better accessibility of water resources. This will involve a number of steps, including the following: (i)implement the action plan for integrated water resources management (GIRE) beginning in 2006; (ii)expand rainwater storage systems, as in the case of the catch basins of the Thibs region; and (iii)assist in the development of agricultural activities downstream from motorized rural tubewells so as to help improve the income ofunderprivileged social groups. 62. With respect to the management ofmaritime resources, the strategy will continue to focus on satisfying national demand, sustainable management, the restoration and development of fishery resources, and promoting the qualifications of sector professionals. In this regard, the actions undertaken will strive to: (i)develop continental fisheries and aquaculture; (ii)promote the unloading of fishery resources throughout the country; (iii)upgrade fishing piers and build awareness about the rational and responsible use of fishery resources, specifically through the acquisition of monitoring and surveillance equipment and the involvement of collaborating and co-management bodies; (iv) ensure prudential and sustainable management of fishery resources by introducing fishing licenses; (v) promote safety measures for fishermen through market supply of life jackets; (vi) fight pollution of ocean and continental waters; (vii) reduce post-catch losses at unloading by upgrading the preserving, transport, and marketing infrastructure; (viii) support small-scale processing; and (ix) train the professionals ofthe artisanal fisheries subsector. 63. With respect to the secondary sector, efforts to restructure the industrial apparatus should lead to greater productivity, specifically by reducing production costs, and should serve to promote exports and improve industrial capacity, thus generating many more jobs. The sector should grow by roughly 4.8 percent in 2005. 64. The government aims to develop industry by improving the productivity and competitiveness of enterprises and by reducing factor costs. Accordingly, special attention is given to the energy subsector, which plays an important role in achieving the growth objectives. The development of energy infrastructure and services through an increase in the level of investment and the establishment of a sufficiently attractive institutional framework should raise the rural electrification rate to the world average (60 percent) with stronger initiatives in rural areas. The government will thus rely on the Senegalese Rural Electrification Agency (ASER), regular budget allocations, and the imminent creation of a Rural Electrification Fund (FER) to reach the objective of a 15 percent rural electrification rate by 2005. 65. With respect to the industrial sector in particular, the government aims to develop the sector, promote endogenous industrial development, and bring enterprises up to standard. Accordingly, public investment will be redirected toward the goal of increasing the productivity of enterprises. The dialogue between the government and the private sector will be strengthened, especially through the Presidential Councils for Investment (CPIs), in order to establish strategic partnerships with foreign enterprises active in key sectors and to identify and eliminate distortions and obstacles to the development of direct investment. Consequently, the mechanism for monitoring the performance ofenterprises will also be strengthened. 66. As for the artisanal sector, the policy objectives center on improving the quality of the products and services provided, ensuring ongoing training and outreach for artisans, and
57 upgrading relevant infrastructure in rural areas. The main lines of action focus on: (i)the construction and outfitting of decentralized distribution centers, resulting in better access to the markets for artisanal products and services; (ii)the establishment of interconnected, village- based distribution channels; (iii)the rehabilitation and modernization of training centers; (iv) the development ofawareness-raising, information, education, and communication programs in areas of artisanal activity; and (v) central village facilities. 67. For SME/SMIs, the main goals are to: (i)institutionalize loan windows for investment and support the setting up of enterprises through a stronger, decentralized system of financing; (ii)establish a system of financing appropriate to the needs of enterprises by creating a support fund, developing new products, coordinating existing nonbank sources of financing, and continuing to build the financing capacities of savings and loan mutuals; (iii)gradually bring the informal sector into the modem economy and thereby increase the density ofthe SME fabric with micro and small enterprises (MSEs); and (iv) establish a safety net for enterprises in difficulty. 68. With respect to the mining subsector, the goals are to: (i)promote the emergence of artisanal and semi-industrial mining activities by better harnessing the subsector’s potential; (ii) design sufficiently attractive mining legislation and promote a mining policy conducive to sustainable development; and (iii)contribute to a diversification of the income sources of populations by identifying new applications for substances with limited outlets. 69. As for the tertiary sector, growth is expected to reach 5.8 percent in 2005 due in particular to the expansion of Transport and Telecommunications with complete liberalization of the subsector. Despite continuous efforts to keep up with periodic and routine maintenance, the transport sector needs attention, particularly as a result of the existing inadequacies in terms of urban mobility and road infrastructure. The government anticipates an increase in the construction ofnew road infrastructure (interchanges and roads) and the rehabilitation of existing infrastructure, particularly in Dakar. The government is aware of the driving force of the urban transport subsector and will continue to implement its Urban Mobility Improvement Program (PAMU), which aims to facilitate on a permanent basis the travel conditions faced by populations in the urban area of Dakar and the cities of Thies and Kaolack by building on the experience of the reform and capacity building project. 70. PAMU gives special attention to the goal of improving mobility in disadvantaged urban areas through efforts to promote public transport services and improve traffic safety for users of the road (both pedestrians and vehicles). It also has the objective of lending greater support to institutional and regulatory reform, in addition to urban transport improvement policies, During the initial four-year phase, special attention was given to: (i)rehabilitation of urban roads and infrastructure involving public transport and pedestrians, along with an action plan for urban safety and traffic control measures; (ii)rehabilitation of basic peri-urban railroad infrastructure; (iii)financial support to promote the creation and operation of a commercial credit system to help small urban transport operators (micro-enterprises) partially renew their fleet; (iv) study and implementation of a strategy of air quality control in urban areas, including a vehicle inspection center and the development and implementation of measures designed to reduce atmospheric pollution; and (v) urban safety, the transport plan, studies on alternate routes, and support for policy implementation and institutional reform.
58 71. In regard to the telecommunications subsector, the government is aware that information and communication remain key factors of economic and social development. Thus, the government has decided to make New Information and Communication Technologies (NICTs) a strategic priority and intends to pursue the development of telecommunications services by promoting telephone and Internet access so as to improve Senegal’s position in the world market of telecommunications services. Extra efforts are currently being made to improve communication aids. A Development Gateway, which is an appropriate information tool in line with the NICTs that is supposed to be an extension of the participatory and community-based approach adopted in the SRP implementation process, is currently being developed. The principal objectives to be addressed by setting this gateway in place are to: (i)gather all resources, information, and tools available for Senegal in the areas of development and poverty reduction; and (ii)promote cooperation and exchanges of experience and knowledge between representatives of civil society, the private sector, and government in these same areas. Finally, the liberalization of telecommunications, effective since July 2004, will help maintain expertise, place Senegal among the ranks ofemerging countries in the sector, and improve the conditions of competition. Rural telephone service, a weak link in the system, will need to undergo major development. The goal will be to bring telephone facilities closer to all communities by expanding telephone service to central villages that house administrative entities and villages with more than 2,000 inhabitants. 72. The trade subsector objectives are to: (i)further develop international trade through efforts to improve trade policies and develop and promote exports; and (ii)develop domestic trade through efforts to improve domestic market supply conditions. 73. For the tourism subsector, the central objective, consistent with the strategic goals ofthe PRSP and the letter of sector policy, is to safeguard and develop the country’s tourism potential. The associated strategies pertain to: (i)a better understanding of the potential and implementation of formative investments; (ii)greater accountability for local initiatives; (iii) establishment of an investment-friendly framework; (iv) intensification of activities promoting luxury tourism; (v) development of mass tourism; and (vi) sanitary improvements in the tourist environment. 74. Within the quaternary sector, the employment subsector plays a decisive role in poverty reduction. The specific objectives are to: (i)improve work force management and employability; (ii)increase the efficiency and transparency of the job market; (iii)promote self-employment in rural and urban areas; (iv) promote labor-intensive activities; (v) improve the economic and social status of individuals in a difficult situation with respect to the job market; and (vi) improve the health and living conditions ofworkers. 75. In terms of capacity building, Senegal’s education policy for the coming years will be to continue implementing the Ten-Year Education and Training Program (PDEF). The guiding principles of the program are based on a global approach to education and a long-term vision of the sector development strategy. The 2000-2010 PDEF encompasses three main orientations: (i) expand access to education, particularly elementary education and training; (ii)improve the quality and effectiveness of the educational system at all levels; and (iii)improve management of the educational system. The goal is to: (i)achieve universal education and eradicate illiteracy; (ii)open up secondary education within an improved educational environment; (iii)thoroughly reform vocational training so as to increase its relevance and quality; (iv) continue to reform
59 higher education so as to improve its quality and facilitate access to information and communication technologies; (v) improve the effectiveness of the educational system management framework and instruments; and (vi) increase private sector involvement in all types of education. The government allocates 40 percent of its budget to this strategic sector and intends to continue its efforts in this high priority area. 76. With respect to health, the government will pursue a policy ofpreventing health risks and stepping up programs to control transmittable diseases. The goal will thus be to establish a health care system in line with the country’s needs and to ensure necessary support for the sustainable development of effective health care. To that end, the strategies laid out for the second phase of the PNDS are as follows: (i)improve the access ofvulnerable groups to quality health services, particularly in the areas of reproductive health, HNIAIDS, and tuberculosis; (ii) strengthen prevention and communication for behavioral change with an emphasis on individual and collective hygiene, child immunization, and all other means of prevention of endemic diseases; (iii)improve the availability, quality, and performance ofhuman resources in the health sector; (iv) improve the sector’s institutional capacities; (v) promote entrepreneurship; (vi) strengthen performance monitoring and evaluation; and (vii) improve health financing mechanisms. 77. With respect to water supply and sanitation in urban areas, the strategies set forth in the letter of sector policy aim to strengthen the organizational and institutional framework, upgrade and consolidate the technical infrastructure, improve the quality of service, expand service, and implement targeted poverty reduction actions, particularly for improving the effectiveness of collective service connection programs. In urban areas, the access rate is expected to reach 93 percent by 2008 (63 percent for sanitation). As for the countryside, sector policy regarding access to drinking water and sanitation in rural areas is set forth in the PEPAM and aims to: (i) construct new water conveyances and modern wells and expand existing infrastructure; (ii) construct individual sanitary facilities and public rest rooms; and (iii)build the capacities of relevant actors, especially local municipalities and community-based organizations, by implementing local water supply and sanitation plans (PLHAs) beginning in 2006. This policy envisions a rural access rate of 68 percent for drinking water and 23 percent for sanitation by 2008. 78. In the culture subsector, the government will attempt to: (i)protect and develop the country’s cultural heritage; (ii)establish a legal and economic environment conducive to the development and creation of cultural enterprises; (iii)build the institutional capacities of the Ministry of Culture; and (iv) support institutions involved in cultural development and create mutuals to promote the culture.
60 79. In the sports subsector, the objectives are to: (i)develop appropriate sports infrastructure in rural areas; (ii)support sport fishing activities that ensure sustainable management of fishery resources; (iii)promote private initiatives for setting up businesses to make sporting goods; (iv) promote trade in sports equipment and related products; (v) promote sports in the tourism sector; (vi) promote girls’ and women’s sports; (vii) introduce professionalism in sports-related disciplines and trades; (viii) set up qualifying programs for sports-minded youth and adolescents and develop sports-and-studies systems; (ix) create health services for sports; (x) support the activities of sports organizations for the disabled and the retraining of sportsmen and women at the end of their career; and (xi) promote exchanges between national and international sports organizations through the New Information and Communication Technologies. 80. In regard to city planning and housing, the objectives primarily involve improving the conditions of access to developed plots and adequate housing by producing decent housing for the greatest number of people. The different lines of action aim to: (i)improve housing in poor urban and peri-urban areas; (ii)establish a site development and land restructuring fund for vulnerable groups; and (iii)adopt and implement the new building code. 8 1. With respect to environmental management, government policy is to maintain the balance of ecosystems in order to improve the living environment in both urban and rural areas. To that end, the different lines of action aim to: (i)ease population pressure on the environment; (ii) improve sanitation and waste collection and treatment systems; (iii)raise the awareness of local populations and involve them in the sustainable management of natural resources; (iv) promote entities that harvest and process forest products; and (v) control noxious and industrial pollution, particularly by promoting actions to treat and recycle industrial waste. 82. The government places an absolute priority on the security of property and persons. This requires better equipment and greater coverage of the entire country by security forces (police, gendarmes, army) and an improvement in their working conditions. In this regard, security force personnel will gradually be recruited to achieve a satisfactory ratio (security agents/population). To develop the local police force, the government will undertake the construction of a police station in each department and set up increasing numbers of police substations based on the mobility and concentration of populations. A policy of capacity building and providing police officers with appropriate logistical resources will be pursued. In addition, the system of civil protection will be improved by developing a policy ofpreparedness and building the capacity to manage disasters and accidents, as well as by intensifying drug prevention measures, including efforts to build awareness about the ill effects ofdrugs. 83. The government will strengthen the independence of the judicial system and its accessibility by recruiting judges and ensuring their training in commercial matters, by improving their working conditions, by recruiting clerks of the court and modernizing the clerks’ offices through computerization, and by building and rehabilitating courts. The fight against corruption will be intensified in order to reduce extra costs and guarantee the most favorable prospects for economic and social development. 84. All these sector strategies will be implemented with an eye on the specific circumstances ofvulnerable groups, particularly women, children, the disabled, and the elderly. The objectives and strategies to be implemented were set forth in the PRSP and operating plans have already been developed.
61 111. Progress in implementing the Poverty Reduction Support Credit (PRSC) matrix 85. To accelerate poverty reduction, the government, in close collaboration with the World Bank and with the participation of other development and civil society partners, has established an action matrix to strengthen the PRSC implementation mechanisms. The logic of this participatory process revolves around five themes: (i) institute financial, budget, and administrative reforms within the government; (ii)strengthen the decentralization process; (iii) improve health sector performance; (iv) encourage wealth creation (particularly through employment and justice); and (v) protect the most vulnerable groups. 86. World Bank assistance began in 2004 with the PRSC-I disbursement and should continue with this second appropriation. Bank assistance brings a number of advantages, starting with technical support in defining and achieving certain objectives. It also helps in mobilizing the entire government around the poverty reduction strategy, particularly with respect to the intersectoral aspects of social welfare and decentralization. Finally, it serves to better coordinate donor interventions and expand donor participation. We propose to briefly describe below the principal actions supported by the PRSC matrix, as well as the initial results obtained, so as to better situate them within the context ofpoverty reduction strategy implementation. 87. The commitment to financial, budget, and administrative reforms within the government led the government to deconcentrate orders to pay in four ministries (Education, Health, Justice, and Environment). The government also developed the draft 2006 appropriation law on a programmatic basis (2006-2008 MTEF), at least for four pilot ministries (Education, Health, Justice, and Environment), and has undertaken implementation of the action plan derived from the technical and financial audit of pay, and finalization of the revised draft procurement code (CMP). Measures will be taken to enable spending ministries to develop their procurement plans, previously presented to CNCA. In addition, the accounting statements for 2002 and 2003 will be sent to the Audit Office. To streamline the administrative controls, a study will be conducted on streamlining administrative and legal control entities. The new strategy for public sector remuneration will be implemented. 88. In terms of good economic and financial governance, the government intends to continue the effort to streamline its budget procedures over the next year. It expects to develop the draft 2007 appropriation law on a programmatic basis (2007-2009 MTEF) in at least six ministries. The ASTER software package will be tested on three target account items (Dakar and two other regions). Procurement code regulations will be adopted and implemented pursuant to the recommendations of the studies that have been commissioned. In addition, the accounting statements for 2004 and 2005 will be sent to the Audit Office. 89. With respect to strengthening the decentralization process, the efforts will continue along with the development of monitoring activities in the regions and ongoing support to local communities. Institutionalization of the PRSP is at a very advanced stage. The regional committees are operational with their participation in the PRSP implementation process, a contribution to the 2004 progress report, and the launching of a PRSP awareness-raising campaign in the test regions of Kaolack and Fatick. Through an interministerial council or by direct questioning, the services of the health and education ministries will present the investment projects to be decentralized and the local communities where the pilot projects will be tested. In addition, the plan is to prepare and adopt by next year regulations aimed at streamlining FDD and
62 FECL transfers. The BCI strategy of decentralizing the management of execution from internal resources will be incorporated into the 2006 appropriation law and gradually instituted over the coming years. Also, the reform of local taxation, initiated in 2004 with the introduction of a single comprehensive tax (CGU), will continue in 2006 in line with the results of the feasibility study on taxation in rural areas. 90. In regard to improving health sector performance, the document of the second phase of the PNDS aimed at achieving the MDGs and PRSP goals has been finalized. In addition, the interagency coordinating committee has validated the three-year action plan for increasing immunization coverage with a favorable technical assessment of the study on the cost, effectiveness, and financial viability of the Expanded Program on Immunization (EPI) so as to continue to increase immunization coverage. Building institutional capacities in the area of health has been a major concern of the Senegalese government, and a decree has been signed to organize the Ministry of Health in a way that streamlines the internal operations of health agencies. Lastly, the government has finished setting up the health sector management information system (MIS) to permit close-up monitoring of the sector. The MTEF will be adopted and implemented in satisfactory fashion by taking into account the improvement of coverage for essential health services in the areas served. The reports on health statistics for 2003-2004 and the first quarter of 2005 will be prepared on the basis of the data collected by the health sector management information system (MIS). 91. To improve health sector performance, the plan is to continue to implement a series of priority actions, including, most particularly, oversight of adherence to the fees for activities and profit margins on essential generic drugs. Efforts will also be made to improve EPI performance. In addition, performance contracts will be established with central directorates, medical regions, health districts, and public health institutions, including a list of indicators for resource allocation. The government is committed to reaching the objectives set for at least two of the four following indicators: CPN1, CPC, assisted births, and the number of detected cases in CDVA over the last 12 months. Finally, the government intends to continue to increase DPT3 immunization coverage rates to more than 80 percent. 92. With respect to encouraging wealth creation, the government has undertaken major efforts in the area of the labor market, improvement of the judicial sector, and stronger management ofhuman and financial resources. The government will make FONDEF operational by introducing training plans for 15 enterprises and financing 10 of them. A decree will be signed regarding the establishment of a coordinating and evaluation committee and an administrative and financial execution unit under the Judicial Sector Program (PSJ). Cases received by the National Commission to Fight Non-Transparency, Corruption, and Misappropriation of Public Funds will be investigated. Finally, a communication unit will be established in the Ministry ofJustice and a communication plan will be implemented. 93. To encourage wealth creation, the government will continue to gradually adopt the additional regulations of the Labor Code and prepare and publish a compendium of all the regulations adopted. The operations ofthe PSJ coordinating committee will be strengthened with publication of its progress report. The action plans derived from the assessment of the length of judicial proceedings will be validated and implemented, including indicators ofresults.
63 94. All these measures in support of implementation should contribute to an overall improvement in the capacities of vulnerable groups. The National Social Protection Strategy (SNPS), to be integrated as a major component of the revised PRSP, is an essential tool for achieving the MDGs and improving the living conditions of the poorest populations. It encompasses four subcomponents: (i)expansion of social welfare; (ii)reform of formal social security systems; (iii)improvement of the risk and shock response capacity for vulnerable groups; and (iv) management ofmajor disasters and risks. As a priority, the government intends to: (a) expand and diversify social welfare instruments in order for the health coverage rate to reach at least 75 percent in 2015; (b) improve the risk and shock response capacity for vulnerable groups; (c) improve the access of vulnerable groups to basic social services; (d) increase access to risk management instruments and social welfare systems for uncovered groups; (e) improve the targeting, monitoring, and evaluation of actions aimed at vulnerable groups; (f) ensure equity for vulnerable groups; (g) strengthen mechanisms for the direct transfer of resources to vulnerable groups; and (h) guarantee income for individuals in difficulty and vulnerable groups, while enabling them to fit into the formal social welfare systems. 95. With respect to improving the living conditions of vulnerable groups, a joint review of SNPS implementation will be prepared by the SNPS Commission. Implementation of the Community-Based Rehabilitation Program will take effect in four regions, along with the pilot programs identified in the SNPS 2006-2008 action plan. The budgets for at least two of the three key ministries of the social welfare system (Ministry of Women, Family, and Social Development, Ministry of National Solidarity, and Ministry of Civil Service, Labor, Employment, and Professional Organizations) will be developed on a programmatic basis with a view to implementation ofthe MTSEF in 2008. 96. Furthermore, other actions in these priority areas have been undertaken in connection with MTSEF preparation, including, among other matters, program budget preparation (MTSEFs for the Ministries of Health, Justice, Education, and Environment), SIGFIP implementation, finalization ofPORs in line with POSs, preparation of BCIdecentralization at the regional level, improvement ofthe supply ofhealth services, etc. 97. Mr. President, the Senegalese government is convinced of the progress made, as noted above, and confirms its will and commitment to implement the PRSP Priority Action Programs matrix. But it remains true that sustained efforts will be required in both financial and technical terms to achieve the ambitious yet realistic objectives which the government has set for itself. The actions supported by the projected poverty reduction strategy credit, developed with World Bank officials, fall within this context. 98. The government of Senegal would like to take this opportunity to thank the World Bank for its help and support in reducing poverty and achieving the MDGs.
64 Rbpublique du SdnCgal Un Peuple - Un But - Une Foi ------MIN TERE DE L'ECONOMIE Dakar, le OCT. 2005 #'I'DES FINANCES
Le Ministre d'Etat
A Monsieur Paul WOLFOWITZ President de la Banque Mondiale S/C Monsieur Madani TALL, Directeur des Operations de la Banque Mondiale pour le Senegal a Dakar.
OBJET : Orientations Strategiques de 2006.
Monsieur le President, Je vous ecris pour vous demander, au nom du Gouvernement de la Republique du Senegal, un Credit d'appui a la Strategie de Reduction de la Pauvrete (CSRP) d'un montant equivalent a 30 millions de dollars US dont I'objectif est de soutenir notre strategie de reduction de la pauvrete qui a ete adoptee par le Conseil d'Administration de la Banque mondiale en decembre 2002. Les rapports d'avancement de 2003 et de 2004, soulignent les progres realises dans la mise en oeuvre de la strategie, qui beneficie en outre de I'appui de I'ensemble des partenaires au developpement du Senegal, La presente Note d'orientations Strategiques (NOS), la deuxieme du genre, decrit les politiques et actions prevues au sens de la Bonne Gouvernance Politique, Economique et Sociale, en vue de la realisation des objectifs definis dans le Document de tegie de Reduction de la Pauvrete (DSRP) et les Objectifs du Millhaire pour le Developpement (& Ainsi, elle presente dans un premier temps la situation konomique et sociale recente du Senegal pour ensuite dkrire brievement I'etat d'avancement de la mise en Oeuvre du DSRP sur la periode 2003-2004. Puis, il sera expose les perspectives strategiques de fin de programme 2003-2005 qui permettront au gouvernement de mieux elaborer son prochain DSRP, qui devrait Qtre pret dans les prochains mois. Enfin, il sera fait une revue de la matrice d'actions de politiques socio-economiques, denommee matrice CSRP, qui a ete developpee par le gouvernement en collaboration avec les services de la Banque mondiale, les autres bailleurs de fonds et la societe civile, et qui constitue le pilier des actions supportees par le deuxieme CSRP. I. Avancement de la mise en ceuvre du DSRP. 1.1, Evolutions recentes de la situation economique et financiere 1. Le DSRP elabore par le Gouvernement repose sur quatre (4) piliers : (i) creation de richesses ; (ii) renforcement des capacites et promotion des services de base ; (iii) amelioration des conditions de vie des groupes vulnerables ; et (iv) suivi de la mise en ceuvre et evaluation. Cette section rappelle les progres dans chacun de ces piliers en 2004, indique les efforts fournis pour soutenir les principales activites et presente les principaux resultats obtenus a travers I'evolution d'indicateurs socio-economiques. L'articulation entre le Programme d'actions prioritaires (PAP) et le DSRP est egalement evaluee au cours de cette periode de mise en Oeuvre pour mieux consolider les acquis en vue d'une plus grande efficacite dans son execution. 2. Conformement au DSRP, la stabilite macroeconomique constitue un element essentiel pour toute strategie visant a favoriser une croissance economique forte et durable. Pour rendre efficace I'intervention de I'Etat, les actions du gouvernement se concentrent sur les domaines suivants : (a) le cadre juridique et judiciaire ; (b) le financement ; (c) la simplification des procedures administratives et I'augmentation de la transparence ; (d) la liberalisation du commerce et des prix et la promotion de la concurrence ; (e) la poursuite des privatisations ; (9 la legislation du travail ; (9) la reforme de I'administration publique ; (h) la politique fiscale et la gestion efficiente des ressources publiques. 3. L'economie senegalaise a connu des resultats satisfaisants en 2003. L'activite economique a ete soutenue durant cette annee apres le deficit pluviometrique observe en 2002 ayant traduit un flechissement de la croissance. La tendance annoncee en 2003 s'est confirmee en 2004. La revue du cadrage macroeconomique affiche I'espoir de reduire significativement la pauvrete avec une acceleration du rythme de creation de richesses. Des mesures qui amelioreraient la repartition des revenus devront &e prises. Ainsi, les performances macroeconomiques enregistrees depuis la mise en aeuvre du DSRP sont encourageantes a plusieurs egards. 4. Le Gouvernement a fait le bilan des deux annees (2003-2004) dans les rapports annuels de I'etat d'avancement de la mise en oeuvre du DSRP, Ceux-ci retracent les evolutions dans les differents piliers fondamentaux du DSRP suivis a travers le respect des principes directeurs qui y sont declines. I1 a entrepris des travaux de revision du DSRP pour disposer d'une nouvelle version du DSRP pour la seconde phase (DSRP II) couvrant la periode 2006-2008. 5. D'emblee, il est important de souligner que le Gouvernement a reconnu I'importance du DSRP en portant une attention particuliere a la mise en place du dispositif institutionnel qui doit entourer sa mise en oeuvre. C'est ainsi que, des 2003, les 11 regions du pays ont mis en place leurs Comites regionaux de pilotage et disposent de Plan d'operations Regionaux (POR). Cet effort s'est poursuivi au niveau sectoriel puisque les vingt quatre Ministeres assurant la tutelle des secteurs directement ou indirectement lies a la mise en ceuvre de la SRP, ont elabore des Plans d'operation Sectoriels (POS) en juin 2003. 6. La revue des actions menees en 2003 avait deja montre que lessentiel des mesures transitoires prevues dans le DSRP et les differents engagements pris par le Gouvernement aupres des partenaires au Developpement ont Bte executes et les instruments techniques et institutionnels ont ete mis en place pour assurer une execution convenable de la SRP. L'Etat a fait des efforts importants pour respecter les ratios de repartition des depenses publiques retenues dans le DSRP, en vue de promouvoir un developpement durable et favorable aux couches les plus demunies. Ces efforts consentis en 2003 ont connu une nette amelioration en 2004 comme cela est decrit ci-dessous. 7, La croissance du PIB reel a atteint 6,2% en 2004 contre 6,580 en 2003 avec un maintien des equilibres budgetaires et exterieurs. Le budget 2004 a ete execute dans I'ensemble de manikre prudentielle et satisfaisante dans un contexte de reformes sectorielles et structurelles pour les besoins de la mise en ceuvre du DSRP. Cette evolution favorable des indicateurs macro-economiques a ete reconnue avec I'atteinte du point d'achevement de I'initiative PPTE en avril 2004 et par le passage du dossier du Senegal au Club de Paris, ainsi que de I'eligibilite du Senegal a I'initiative du Millenium Challenge Account (MCA). Si la croissance en 2004 est imputee au bon comportement des secteurs secondaire et tertiaire, son inflechissement par rapport a 2003 serait lie aux contre performances notees dans le primaire. 8. La croissance du secteur primaire est estimee a 4'3% en 2004 contre 19'8% en 2003 en raison du ralentissement du sous-secteur agricole qui a connu une croissance de 4,2% suite a la forte baisse de la production cerealiere consecutive au peril acridien dans la partie nord du pays. Le sous-secteur de I'elevage a progresse de 5% en 2004 en raison de I'amelioration des rendements consecutive a la poursuite de la politique de promotion de la production locale de viande. Concernant la pQche, la production est estimee a 2,4% en 2004, qui manifeste une deceleration par rapport a 2003 (4,9%) du fait du recul du rythme de I'activite de la peche artisanale consecutif a I'application de la pause biologique decidee par le gouvernement conformement aux objectifs du developpement durable repris dans le DSRP comme priorite dans le secteur de la peche pour (( assurer la gestion durable et la restauration des ressources halieutiques Dans la mQme optique, la politique de maintien de I'equilibre icologique, a permis une croissance du sous-secteur de la forit evaluee a 4,0% en 2004. 9. S'agissant du secteur secondaire, sa croissance est estimee a 5,6% en 2004 grice a la bonne tenue de I'ensemble des sous-secteurs, exceptees les mines et les huileries, qui reste une contre-performance par rapport a 2003 (6,4%). En effet, malgre la disponibilite, en annee pleine du phosphate de la carriere de Tobene, le sous-secteur des mines et carrieres enregistrerait une baisse de 11,4% en 2004, en raison de la diminution de I'activite d'extraction d'autres mines et carrieres, notamment le sel et quelque peu de la baisse de la production de phosphate. Grice aux investissements realises, visant a augmenter la capacite de production et a ameliorer la gestion de la principale entreprise, auxquels s'ajoutent les performances enregistrees dans I'electrification rurale, le sous-secteur de I'energie a maintenu un niveau d'activite satisfaisant avec une croissance de 1,1% en 2004, S'agissant du sous-secteur du BBtiment et Travaux Publics, sa croissance reste tres soutenue en raison des investissements publics en infrastructures de base et du dynamisme de la construction de logements des menages. Le sous-secteur enregistre une hausse de 13% en 2004 contre 10,5% en 2003. Nonobstant la persistance de I'environnement peu favorable pour I'acide phosphorique en 2004, les autres industries ont retrouve un regain de dynamisme avec une hausse de 7'0%' grice a la progression des sous-secteurs des materiaux de construction, du raffinage de petrole et des autres industries alimentaires. 10. Au niveau du secteur tertiaire, la croissance s'est etablie a 7'7% en 2004, essentiellement tiree par les sous-secteurs des Transports et Telecommunications. En effet, le sous-secteur de telecommunication afflche une progression de 10'6% grice au developpement de la telephonie mobile et a la hausse de I'activite des teles- services, consecutive a la liberalisation du secteur. Les activites commerciales ont maintenu leur rythme de progression avec une croissance de 6'1% contre 4,2% en 2003, du fait d'un meilleur approvisionnement des marches resultant du bon comportement de I'ensemble des secteurs, Les offres de services de sante et d'education ont progresse respectivement de 4'0% et 7,0% en raison des efforts consentis dans ces secteurs prioritaires, notamment, par le renforcement des effectifs a travers la politique de recrutement dans la fonction publique, inscrite dans le DSRP pour soutenir (( I'axe acces aux services sociaux de base et renforcement des capacites 11. S'agissant du niveau des prix, I'augmentation du deflateur du PI6 est estimee a 1,9% en 2004 contre 0'9% en 2003. Cette hausse resulte en partie de la flambee du prix du baril de petrole qui a atteint des niveaux historiques attenuee par la depreciation du dollar face a I'Euro. Cependant, son impact sur les prix a la consommation reste modere, grace au maintien de la tendance baissiere des prix des produits locaux. Au total, le taux d’inflation mesure par I’lndice Harmonise des Prix a la Consommation se situe a 0,5% en 2004 compare a la norme communautaire de 3% dans les pays de I’UEMOA. 12. Pour ce qui concerne la demande, la consommation finale, en termes reels a crQ moins vite que le PI6 en 2004 (5,0%). Cette situation resulte du ralentissement du rythme de la consommation privee qui enregistre une croissance de 5% contre 7% en 2003. Toutefois la consommation publique a connu un regain de dynamisme en 2004 avec une hausse de 53%. En consequence, le niveau de I’epargne interieure s’est ameliore en affichant un taux de 10% contre 7’7% en 2003. Cependant, ce taux reste legerement inferieur a celui prevu dans le scenario tendanciel du cadrage du DSRP etabli a 10,3% en 2004. Toutefois, le taux d’epargne nationale s’est Btablit a 16,3%, soit plus de.2 points au dessus du taux retenu dans le scenario optimiste du DSRP, en raison du dynamisme des ressources reyes de I’exterieur. 13. Le solde de la balance commerciale s’est traduit par une degradation avec un accroissement en valeur des importations de biens plus important que celui des exportations. Les exportations globales de biens (commerce general ajuste) sont en progression de 6’1% par rapport a leur niveau de 2003, et se trouve a peu pres egale au taux prevu dans le scenario tendanciel (6,l%). 14. L’investissement a progresse de 5,9% en termes reels, du fait aussi bien de I’investissement public que prive qui devient de plus en plus dynamique. Ainsi, le taux d’investissement a atteint 23% contre 20,7% en 2003 depassant I’objectif fixe dans le DSRP qui prevoit un taux de 21,2%. Pour ce qui est de la demande exterieure nette, les exportations de biens et services ont augmente de 3,6% en termes reels contre une progression du volume des importations de biens et services de 4,2%. Pour ce qui est de la dette publique totale, sa valeur actuelle nette represente 133,9% des recettes d’exportation en 2004 contre 141,7% en 2003. 15. Les depenses en capital enregistrent une progression de 21,2% par rapport a I’annee precedente pour se situer a 410’3 milliards dont 198,8 milliards sur financement interne (hors PPTE). Cette hausse des depenses en capital est essentiellement due a I’interQt porte par le gouvernement sur les secteurs sociaux de base identifies dans le DSRP. Le ratio des depenses en capital financees sur ressources internes rapportees aux recettes fiscales est au-del8 du seuil de 20% fixe dans le cadre des criteres de convergence de I’UEMOA, 16. Les depenses ordinaires sont estimees a 553,9 milliards enregistrant ainsi une hausse de 24,4 milliards par rapport a I’annee precedente. Cette hausse est essentiellement le fait de la masse salariale qui s’etablit a 217’6 milliards contre 203’7 milliards en 2003, en raison du programme special de recrutement dans la fonction publique, de 5000 agents par annee pour accompagner la mise en ceuvre de la strategie. Toutefois, le ratio de la masse salariale rapportee aux recettes fiscales demeure bien en de@ du plafond de 35% retenu parmi les criteres de convergence de I’UEMOA. Les autres depenses courantes s’elevent a 289’6 milliards contre 281,2 milliards en 2003 soit une legere hausse d’environ 33%. 17. S’agissant du financement du deficit budgetaire en 2004, le recours aux ressources interieures nettes est de -20,l milliards, tandis que sur le financement exterieur, les tirages sont estimes a 156,5 milliards, constitues essentiellement de prQts projets. Au total, la gestion des finances publiques a ete satisfaisante, I’objectif de pression fiscale a ete atteint, de mQme que celui portant sur les depenses en capitale sur ressources internes rapportees aux recettes fiscales et sur le deficit budgetaire global. 1.2. Performance dans la mise en euvre du DSRP en 2004 1.2.1, Execution budgetaire 18. Si I’annee 2003 a ete marquee par la poursuite et la consolidation de I’assainissement des finances publiques qui est reflete par un bon recouvrement des recettes fiscales et un bon niveau d’execution des depenses publiques, I’exercice budgetaire de 2004 a ete globalement coherent avec le programme triennal de politiques economiques et financieres de la periode 2003-2005. Ainsi, au terme de I’execution budgetaire de 2004, le solde budgetaire de base (hors depenses PPTE et coOts des reformes structurelles) reportait un excedent, alors que le deficit public global (hors dons) restait dans les normes accordees avec le Fonds Monetaire lnternationale (4,8% du PIB). Cette performance budgetaire s’est realisee dans un contexte de hausse des recettes fiscales et d’une meilleure allocation des depenses publiques vers les secteurs prioritaires du DSRP comme les services de sante et d’education qui ont progresse chacun de 4,0% par rapport a 2003. Le Gouvernernent a egalement poursuivi sa politique de recrutement des agents de I’Etat, commencee en 2003. 19. Le point sur I’etat d’execution de la matrice des mesures initialernent prevues dans le DSRP a montre que les actions prevues ont ete dans leur quasi-totalite mises en Oeuvre en 2004. Les performances macroeconomiques ont permis, pour la plupart des objectifs prevus dans le cadrage de base du DSRP, d’atteindre les resultats du scenario optimiste et dans les autres cas de se rapprocher du scenario tendanciel. Malgre tout, il faut reconnaitre que le niveau de croissance de 6,2% en 2004 reste en deqa de I’objectif de 8% necessaire pour creer suffisamment d’emplois sur le marche du travail et reduire la pauvrete de moitie en 2015. 20. II a ete constate des efforts irnportants dans I’absorption des ressources, et ce, aussi bien pour ce qui concerne les ressources internes (y compris PPTE), que pour les ressources externes. Les taux d’execution sur ressources internes des financements prevus dans le budget par axe strategique, sont relativement eleves pour I’axe (( creation de richesses )) (80,65%) et I’axe (( amelioration des conditions de vie des groupes vulnerables )) (98%), ce qui contraste avec les contre-performances de I’axe ccrenforcement des capacites et acces aux services sociaux de base )) qui obtient un taux moyen d’execution de 45’6%. Par ailleurs, en ce qui concerne les principes directeurs du DSRP, il faut signaler que les mesures preconisees, notamment, dans les reformes budgetaires, contribuent a ameliorer la transparence dans les finances publiques. L’entree en vigueur en 2004 a permis de mettre en relief les performances obtenues dans la reduction des delais de traitement des dossiers des ministeres depensiers (education, sante, environnement, justice, etc.). Le gouvernement s’engage a poursuivre ses efforts tout en consolidant les acquis. 21, La mise en Oeuvre du DSRP en 2004 a permis de renforcer en partie le dispositif de mise en Oeuvre et de suivi notamment par le renforcernent des capacites des points focaux et des comites regionaux dans la formulation des dossiers de projets soumis dans le processus d’arbitrage budgetaire. Cela a permis de lever la contrainte de I’indisponibilite des projets articules aux PO$ aux POR et au DSRP pour la programmation budgetaire. Le fonctionnement optimal des organes de pilotage et de suivi reste cependant limit6 par I’insuffisance de moyens necessaires pour leur permettre de jouer pleinement leurs rbles respectifs. 22. L’annee 2004 a egalement ete mise a profit par les organisations de la societe civile (OSC) pour se constituer en quatre principaux pbles regroupant, les centrales syndicales, les organisations de femmes, les ONG et les Organisations Communautaires de Base (OCB). Ces pbles ont consolide leur presence dans les 11 regions du pays et sont desormais impliques et consultes dans les divers processus de formulation des politiques publiques. Sur la base de ces acquis, les OSC pourront batir I’observatoire de la societe civile prevue dans le DSRP. 1.2.2. Evaluation des indicateurs du DSRP en 2004. 23. Pour assurer le suivi de la mise en ceuvre de la SRP le gouvernement, en accord avec les partenaires au developpement, a defini une liste d'indicateurs de suivi du DSRP. Dans ce contexte, la deuxierne EnquQte Senegalaise Aupres des Menages (ESAM ll), realisee en 200112002 et publiee en 2004, a montre que le taux de pauvrete s'est sensiblement reduit au Senegal entre I99411995 et 2001 passant de 67,9% a 57,1%, mbme si la pauvrete concerne toujours plus de la moitie de la population senegalaise. Selon les estimations, I'incidence de la pauvrete devrait s'etablir a 55,8%, 54,0% et 52,5% respectivement pour 2003, 2004 et 2005. 24. La strategie retenue dans le DSRP est bien articule, pour ce qui est de son pilier ((creation de richesses autour du secteur agricole, Dans le cadre de la mise en ceuvre, la part de ce secteur dans le PIB est passee de 8,5% en 2004, contre 8,1% en 2003. Toutefois, les performances restent encore en dessous des attentes pour des raisons, entre autres, du deficit pluviometrique et du peril acridien, Le gouvernement a entrepris des mesures afin de mettre assez de moyens pour que la contribution de ce secteur au PIB soit constamment au dessus de 10% afin de lutter contre la pauvrete rurale. 25. Dans le secteur de I'education, le DSRP a opte pour un certain nombre de mesures qui doivent renforcer I'allocation des ressources tant internes qu'externes. Les objectifs ont ete globalement atteints puisque les depenses de fonctionnement du secteur de I'education ont represente 40% du budget de fonctionnement total en 2004. Dans la mQme evolution favorable, les depenses totales en faveur de I'education (fonctionnement + investissernent) ont progresse de 10,6% entre 2003 et 2004 pour representer 18,1% du budget global de I'Etat, ce qui traduit la volonte manifeste du Gouvernement de renforcer les moyens budgetaires du systeme educatif. Les ressources mobilisees ont permis la construction de salles de classes tous les niveaux d'enseignement. Aussi, d'irnportants progres ont et6 enregistres dans I'enseignement prive avec la mise sur pied, en 2004, de 27 colleges et de 3108 salles de classes dans I'elementaire. 26. Sur le plan des statistiques scolaires, les indicateurs ont egalement connu de nettes ameliorations. Le taux brut de scolarisation elementaire est en progression constante depuis 2000. II a atteint 79,9% en 2004, contre 75,8% en 2003. Ce qui donne une augmentation de plus de 5% d'une annee sur I'autre. Le taux d'admission au CI est passe de 85,1°/0 en 2003 a 91,1% en 2004, soit une augmentation de 6% qui a permis de depasser legerement I'objectif fixe par le DSRP pour 2005 (90 %). En ce qui concerne la scolarisation des filles, un grand effort a ete fait par le gouvernement pour I'equite de genre. Le taux d'admission au CI est de 93,9%, en 2004, et le taux de scolarisation des filles atteint 77,3%, ce qui est superieur a I'objectif fixe par le DSRP, soit 76%. Cette performance n'est pas la mQme chez les garqons dont le taux d'admission au CI est de 90'4%' tandis que le taux de scolarisation n'est que de 82'5% en 2004, ce qui est en deGa de I'objectif initial de 84% vise par le DSRP. Si la tendance se maintient, la scolarisation universelle pourrait &re atteinte en 2010, conformement aux OMD. Le taux d'achevement du primaire est passe de 44% a 48,3% sur la periode 2003-2004. Bien que ces niveaux soient encore faibles, les progressions de cet indicateur sont assez appreciables, puisque led niveaux atteints pourront depasser les 50% en 2005, selon les tendances. 27. Concernant le secteur de la sante, le gouvernement a affiche tres clairement ses ambitions en matiere de couverture du secteur en infrastructures et en personnel. En effet, comme dans le cas du secteur de I'Education, la part des depenses budgetaires allouee au secteur de la Sante n'a cesse de progresser. Ainsi, la part du budget de la Sante (fonctionnement + investissement) dans le Budget total est passee de 7'7% en 2003 a 7,8% en 2004, bien qu'elle soit encore inferieure a I'objectif de 10% fixe dans le DSRP. Ces ressources ont permis entre autres, en ce qui concerne le budget de fonctionnement en 2004, le recrutement de 51 1 agents de sante en 2005. 28, En ce qui concerne les indicateurs de performance, le taux de couverture vaccinale DTC3 chez les enfants de 0 a 11 mois a connu une progression de 5 points entre 2003 et 2004, passant de 70% 75%. Ce resultat est deja au dessus de I'objectif fixe dans le DSRP, qui etait de 70% en 2005, Le taux de consultation primaire curative a atteint 50% en 2004. Sa progression entre 2003 et 2004 a 6te de 8,7%., ce qui devrait permettre de le porter a plus de 52% en 2005, niveau retenu comme objectif a atteindre dans le cadre du DSRP. Quant au pourcentage d'accouchements assistes par du personnel forme, il a atteint 59% en 2004, pour un objectif DSRP de 60%. Par rapport a son niveau de reference qui etait de 54% en 2002, les performances sont relativement significatives, mkme s'il reste encore des efforts a faire pour I'atteinte des OMD dans ce domaine. Le taux de prevalence du VlHlSlDA dans la population, a ete de 1,5% en 2003, mais a connu une forte baisse selon I'enquete EDS-IV menee cette annee sur un echantillon plus large et ayant permis de constater que ce taux connait une nette baisse, avec un niveau de 0'7%. L'objectif inscrit dans le DSRP etait de le maintenir en dessous de 3%. 29, Le taux de prevalence de l'insuffisance ponderale chez les enfants de moins de trois ans est demeure quasiment stable. II est passe de 19,1% en 2001, annee de reference du DSRP, a 19% en 2004. Les resultats preliminaires de I'EDS-IV realisee au cours de cette annee situent ce taux a 16%, ce qui depasse deja I'objectif fixe dans le DSRP qui est de 17% en 2005. Ce resultat classerait le Senegal parmi les pays de moindre taux de malnutrition chez les enfants en Afrique. Les resultats prometteurs atteints par le Programme de Renforcement de la Nutrition (PRN) dans la reduction de I'insuffisance ponderale chez les enfants beneficiaires de ses interventions ont montre que le Senegal peut atteindre les objectifs de developpement du millenaire s'il double son investissement dans ce domaine. 30. L'acces a I'eau potable a connu un net progres. En effet, en milieu urbain, le taux d'acces a l'eau potable a connu des progres sensibles en atteignant 90% en 2004 (notamment grice aux programmes de branchements sociaux). De meme, le taux d'accds a I'assainissement a ete de 57%. Par contre, en milieu rural, les progressions ont ete faibles : le taux d'acces a I'eau potable est passe de 61% a 64% sur la periode 2001-2004, pendant que le taux d'acces a I'assainissement stagnait autour de 17%. Le gouvernement affiche son engagement en faveur du developpement du milieu rural a travers une approche programrnatique ciblee sur les OMD pour les secteurs de I'eau et de I'assainissement, en adoptant un Programme d'eau potable et d'assainissement du millenaire (PEPAM 2015) sur la periode 2005-2015. A cet effet, il envisage rendre universe1 I'acces a I'eau potable en milieu urbain et atteindre au moins un taux de 82% en milieu rural. Pour le taux d'acces a I'assainissement, I'objectif est de le faire passer de 78% et 59% respectivement en milieu urbain et en milieu rural, 31. Pour ce qui est du secteur des infrastructures, nonobstant toute I'attention accordee a I'amelioration de la mobilite urbaine pour reduire les surcoirts a I'economie,les differentes actions ont porte sur le renforcement des infrastructures de soutien en milieu rural, la facilitation de I'acces aux services de telecommunication par une extension du reseau telephonique et le desenclavement des zones rurales, En accord avec les objectifs retenus pour chaque annee dans le cadre du DSRP, le pourcentage du reseau routier en terre classe en bon et moyen etat est passe de 19% en 2003 a 25% en 2004 ; et celui du reseau routier revQtuclasse en bon et moyen etat de 66% en 2003 a 72% en 2004. 32. En ce qui concerne les infrastructures rurales notamment la realisation des amenagements hydro agricoles, les ressources mobilisees ont permis de realiser une serie d'etudes generales de faisabilite et d'executer les travaux d'amenagements de perimetres irrigues. La part du budget d'investissement hors dette du secteur agricole sur ressources internes qui y est consacree est en moyenne de 10% sur la periode de mise en oeuvre. Des efforts restent a faire et le Gouvernement s'engage a les poursuivre. A cet effet, on peut citer, I'appui de la Societe d'amenagement et d'exploitation des terres du delta du fleuve Senegal (SAED), I'achevement et la reception des travaux de Medina-Pete (1700 ha) et de Kobilo (750 ha), I'avancement de 20 a 30% des travaux d'amenagement des Perimetre lrrigues villageois de Gababe, des casiers de Matam et de Dolol-Odobere; et le demarrage des travaux des pistes de desenclavement Matam-Bakel. Le caractere transversale de I'energie place la question de I'blectrification comme une des priorites du gouvernement en milieu rural si bien que le taux d'electrification rurale passerait de 8% en 2003 a pres de 12% en 2004. Le gouvernement continuera ses efforts en vue d'atteindre un taux superieur a 20 %, conformement a I'objectif fixe pour 2010, Pour se faire, I'Etat s'engage avec I'appui de I'ASER et de la SENELEC a electrifier les 114 chefs-lieux d'arrondissement. 33. Le processus de decentralisation est inscrit parmi les priorites du Gouvemement. En termes d'application, les fonds de dotation a la dkentralisation (FDD) sont passes de 6,6 milliards en 2000 a 10,l milliards en 2004. L'objectif vise est de faire evoluer ce fonds a plus de 15 milliards a partir de 2010. Dans le mQrne sens, le fonds de d'equipement des collectivites locales (FECL) a connu une progression entre 2000 a 2004, en passant de 3'5 milliards $I 4 milliards mQme si cela represente une legere baisse par rapport au pic de 6 milliards atteint en 2003. Cependant, la N part relative des transferts financiers de I'Etat aux collectivites locales en pourcentage du budget de I'Etat hors dette )) a connu une legere baisse entre 2003 et 2004, en passant de 2,2 % 21 1,9 %. Le Gouvernement s'est engage a poursuivre ses efforts vers une decentralisation graduelle des ressources financieres de maniere a doter les collectivites locales des moyens suffisants, en ligne notamrnent avec leurs responsabilites en matiere de delivrance des services sociaux tant en education qu'en sante. Des 2006, I'entree en vigueur de la decentralisation de la gestion et de I'execution des depenses en capital programmee par I'Etat et financees sur ressources internes (decentralisation du BCI) devrait pouvoir relever le flechissement de ces fonds de decentralisation. Cet engagement ferme de I'Etat pourrait encourager les partenaires a evoluer davantage vers des modalites de financement sous forme d'appui budgetaire. 34. La bonne gouvernance est appreciee a travers I'examen des comptes de gestion de I'Etat, des collectivites locales et des etablissements publics par la Cour des comptes. L'Etat central est parvenu a transferer I'ensemble de ses comptes de gestion jusqu'a I'annee 2003, resorbant ainsi les retards qui s'etaient accumules au cours de ces dernieres annees. Ces comptes sont en cours de verification a la Cour des comptes, qui a ete renforcee en effectifs par des assistants. Un effort similaire a ete entrepris au niveau des regions et des etablissements publics qui sont tres en retards en ce qui concerne le transfert de leurs comptes de gestion a la Cour des comptes. A cet effet, le pourcentage de comptes reGus par la Cour par rapport aux comptes a recevoir a evolue tres lentement de 2000 a 2004 passant de 8,7% A 14'1%. Des efforts importants sont prevus pour porter le taux a 37, 3 % en 2005, a 75 % en 2010 et 85 % en 2015. Pour ce qui concerne les comptes de gestion de I'Etat, les retards accuses devraient Qtre totalement resorbes courant I'annee 2006. 35, Dans le secteur de I'environnement, les defis a relever portent sur la reduction de la degradation des ressources naturelles et de I'environnement, la contribution a la reduction de la pauvrete et a I'amelioration du cadre de vie, I'amelioration de la qualite du service rendu, la preservation de I'environnement global. C'est ainsi que des efforts restent concentres dans la rehabilitation du couvert vegetal et I'habitat faunique, la promotion des attitudes et comportement favorables A une gestion Tationnelle de I'environnement et des ressources naturelles, la preservation de I'environnement marin et cbtier, la promotion de la participation des populations et I'implication du secteur prive dans la gestion des ressources naturelles et de I'environnement, le renforcement des capacites de I'Etat et des collectivites locales, et la mise en ceuvre des plans d'action relatifs aux conventions internationales. 1.3, Evaluation des actions transversales du DSRP en 2004 36 La mise en cmvre de la SRP s'appuie sur des politiques et strategies sectorielies coherentes qui perrnettent de mieux artrculer les mesures envisagees (et leur financement) au cours dii temps C'est ainsi que diverses politiques sectorielles et transversales ont ete initiees dans diffkrents secteurs coniorinement 3ux orientations et aux principes directeurs inscrits dans le DSRP En ce qui concerne le premier piiier tiu DSRP (creation de richesse) la Strategie de developpement du secteiir prive (SDSP) a ete largement prise en charge par la matnce des mesures du DSRP mais les aclioas retenues connaissent des retards dans feur mise en ceuvre Bien que les procedures et delais d'agrkment soien! fortement alleges, le gouverment avart constate la persistance des retards d investrssement dans bien des dorcarnes et /e manque d'aggessivite du secteiir prive particulierernent domestique Pour ceite raison le Gouvernernent a mis I'accent sur I elaboration d uiie Stratkgie de Croissance kcceleree (SCA) qui a deja perniis d identifier une liste de cinq (5) secteurs 4 haut potentiel susceptible de fournir des activites cles pour servir de iiite de grappes . agriculture et agro-industrie, produits de la mer tonnsme-indiist:ies cultirrellcs et artisanat d'art textile confection et enfin des TIC-tele-services Parmi les criteres retenus et ayant guide les ctiaix operes on peut souligner I impact sur la creation demplois un facteur qui peut cantribuer a r6dui.e substantiellement la pauvrete au Senegal 37 Au regard des domaines prioritaires couverts par le DSRP, l'agricultirre occupe une place prepondbrante en raison de son importance tant en ternies de production que d erriplois La Lo; d orientation agro-silvo-pastorale adoptee en 2004, constitrlrera la base de I Blahoration du Plan national de developpement agricole (PNDA), du Plan national de dbveloppement de I'elevage (PNDE) et du Pian d action forestier du Senegal JPAFS) Elle repose sur les prtricipes directeurs suivarits efficacite kconornique, &quite sociale, durabilite, liberalisation economique decent! aiisatiion, solidarite et subsidiarite competition sous regionale, rnarche commun agricole au sein de I UEMQA et de la CEDEAO Ces principes dkoulent des objectifs politiques, econamiques et sociaux du Gouvernement, contenus dans le DSRP Les textes d application non encore pris devraient permettre de traduire les oiitiis de planificatian sectorielk susvises en programmes cl investissement notamrnent les programmes spmwx agricoies dont la meen cwvre necessite la coherence entre la planification du secteur et le DSRP
38 Executii dupuis lanvier 2000 le PDEF est oriente vers une apprazhe programme i) susce~tible d apporter cine amelioration significative des perfortilances du sysleme educatif daris la mise en ceuvre de la deuxieme phase (2005-20071 Les autres sous-secteurs de I education tels que la formation et la sensrbilisation des populations en matiere de developpement durable occupent me place de choix daw i elaboration de la strategie nationaie de develappement durable 39 Le Programme National de Deveioppement de la Santb (PNDS) doni la prerniere phase quinquermak est boiiciee a fait l'objet d une revision en 2004 pour mieux tenir compte de la stratkgre de reduction da la pauvrete Le docurnent de la deuxteme phase du PNDS qui en est tssu a ete adopte en conseii des ministres Ce document se caractense par l'accent mis sur la ?~~formancedu systerne de sant6 et ia piiorite accordee a I amelioration de I'acces des populations vulnkr~~l~~a des soins de qualitks 40 Dans le domainc des sports, tout en proposant un cadre strategique a court et a moyen terrnes, la letkc de politique de developnement de ce secteur fixe le cadre d in~~rventi~~Les efforts publics resient cowenires dans la conslrciction et la rehabil~~a~iondes infrastructures sportives el de I encadremeit cible el de masse CetZe politique est conduite avec l'apput des collectivites locales et des partenaires au developpement dams un cadre largement paiticipatif 41 En ce qui concerne la decentraiisation, le plan (2003-2005) elabore par le ~ouvernemen~connait une execution satisfaisante surtout avec l'aug~en~ati~ndes transferts financiers de 1 €tat et le renforcernent des ressources hiirnaines des Agences regionales de d~~~eloppe~i~~t(ARD) S agissant de la decentraiisation (hi BCI. une etude a Btb menee e! les rbsultats ont fait l'objet de partage entre les differentes parties prenantes. Un plan d'actions sera soumis au gouvernenien! lors d'un coriseil iiiterminist6cel Avant la phase de niise en ceuvre dii BCI decentralise prevue en 2006 des actions prkolables soiit entrain d'etre prises C'es! le cas riotarnment pour l'identification des projets d'investissertieiit 3ans les secteurs de I edocatiot: e! de la saiite, pour la modification de la nomencialure budgktaire et comptables des Collectivires locales doni l'elargissemenl de la ganirrie des recettes d'investissement
42. MEme si l'energie est consideree coinrne un secieur strategique d'appui la creation de richesse, il n'en demeure pas iiioiris que soii caractere traiisversal en fait un instrument iiiiportaii! de luiie contre la paiivrete dans tous les domaines de la vie socioeconomique. Pour iiiietix nietire en evidence cet apport. des initiatives sont en cours au sein d'uii comite muilisecloriel en charge de I'elaboratiori de la siratboie de Synergie entre l'hnergie et les aiitres sectexs strategiques de Mecontrc la pauv:e!k 43. Le developpenient des capacites dc Etat est ba ur line double strategie La premiere inel i'accent sur l'amblioration de la gouvernance et de la transparence, Oans le cadre de sa quete pernianenie d'ameliorer sa gestion financiere et de crker les solutions necessaires a tine utilisation piiis cVic,ace de sei ressources partictilieremerit celles affect8es a la reduction de la pauvwie. le goiivernenieiit a mer18 les exercices d'evalttation de la gestion des finances nubliqties e! des pratiques cornptables du sec!eur prive el de la passaliori des marches publics conformerent aux plans (CFAA-CPAR) Par nilleiirs. en concerne les principes directeurs du DSRP I/ hut signalo: les mestires precorisees cotaimen!, d refornies budgbtaires, coritribociit a ameliorer la transparence dans la gestioii des finances publiqites Lcs actions rnenees en 2003 dam le cadre de la deconceritration de I ordonnaricement el de la deceiitralisalion budgetaire visarit a simplifier les procedures et a accblbrer I'exkcuiion de la d&pense. ont &le iargc?ment consolidkes en 2004. 44, Dans cet $an, les objec!ifs visi.s sori! l'amelioratiori des procedures budgktaires et de passatior des mari:hks publics, I'efficacite dans l'utilisation des ressouroes et la transparerice daw la ges!ron des finances publiqiies el la diffusion de l'iniormation biidgetaire et financiere Les effor!s seront centrks dans la prbparatiori dii budget qui oriente progressivemen! vers la gestion axee sur les restliials (CDFdT el CsDhlT) la decentralisation de l'ordoniiancement, I'iiiformatisation de la chaine des deperses publiqijes, la productiorl r6guliere des comptes de gestion et des pi'ojcts de lois dc reglenient. le con:rble irilerne e! exterrie des finances piibliqiies S agissant des procedures de marcl%s les rcfcrnies enyagees devraieiit pertnoitre de disposcr d un cadre juridique. regleventairn e! insliiutionncl piits l't.thii;iie. la transparence dans les pratiques el l'ini&grite du systenie de passalior! Le 110uvc.a~cadre juridique des marches ainsi qtie le dispositif institutioiinel de gestlan dii s.js!kms de passation devraien: etre operationiiels A partir de 2006. 45 La protection des groiipes vulnerabies. principale composarite du troisieme pilier du DSRP, soiiffre de l'absence d'uiie strategie globale et harmonisee Si, a present de nonibreuses iri!iaiives iridividuelles preiinent place. ii est difficile de juger de leur impact sur les groupes les plus vulnh-abies Pow cette raison. l'elabaration d'uiie stratkgie a retenu tout0 l'attention des aiitorit
46 Erifiri, les contraintes !lees aii renforcernent des capaciles des niinislkrcs tcchniqucs col'ectivittis locales e! services decorrcentres dam la formiila!ion et le suivi des projets e! :~rcxpnii!os deviant &!re levecs afiri ile ?errnetire aux differents acteurs de per pleiiiernenl lex rble daiis la st? en cmvre et le siiivi de la Stra!egie de Rkduction de la Pauvrele a!~SBiiiigal 49 Les indicateurs de perforniances et d'impact niontrerit egaleniert des signes d 6voiulion positive pennettant l'atteinte des OMD si les tenclances son! niaiiiteiiiics Cepcndant, daris Ies secteurs sociaux. des efforts devront etre faits pour ameliorer davantage le niveaii d exkcuiion, la qualit8 des interventions e! la n:airilanancc: des infrastructures. L'impact des invesiisseriients dans les dornaines traiisversaux aussi bieii sur la periormarice des secteurs saciatix que sii: la crbatioii dc richesse niontre la II d'accortler iiiif? attention plus sotitenue a ces domaines notamriienl am infras!rur,tiiri?s dc soiiticii et de transport (pour la mobili!& urbairie e! riiralc), a la protection sociale et a l'acces ;I ! (1111 su son! lorigleirips poses cornme contraintes maleiires
I/. Objectifs et Strategie de developpement de 2006, 11.1. Objectifs de developpement Cconomique 50 Pour rMser les objectifs de croissaiice et d kqiiit noriiiqiies de maitiise d'inflatior: e! de financiire interne e! exterieur sur la periode 200 8. ies poii!ic;iies macro-i.cononiicaes seroril complbtkes et renfcrcces par des ncilitiques sectorielles ndeqiiates Ce!lc!s-ci micctiircn! tuu:es la me en Euvre de la stratkyie de reduction de la pauvrete 51 Les objectifs de dkvcioppaiiicnt Bconomiqtie et financier a moyui et lorig tcrme cantiniieront de s'insprer des orientations declinees daris IC DSRP avec notaniiivni la necess:!& de satisfarre la demande scciale croissante devenue plus exigeante avrc I ancrage de !a de:nocratie. entiepreiid-il d'accelkrei la crcissance de I econoniie dans ur mrilexto de iiiailrise (!e l'iriilation et de maintien des bonnes praliques en niatiere de gestion financiere et mor76taire afiri de repondre significativenieiit aux prio:ilL's de reduction de la pauvrete. Le respect de ces priricipes trans;iaraii deja dans la pedormar!ce pr6viie pour 2005 avec une croissance rkelle du PIB projL'!be a ijl%.grBce a un bori coinportemen1 de l'ensernhie des sccteurs Pour ce qui est dii riiveau g&nkral des prir ! inflairon mestme par le deflateur dir PI8 devrait rester en dessous du seiiil de 2% en 20K. malgrb !'impact i!u choc pe!rolier avec la conduite de politiques monetaire et biidgetaire :irudentes el 2 tin lion approvisionrwiien! des marches. En ierrnes de politique fiscale tin des principaiix objectifs doit dtre !e reniorceiiicnt de la par! des iriipbts sur le reivenii e! en contrepartie une diminii!ion de la part des imp6:s sur la ccnsommation 52 Concerixml le pilier de creation de richesses, le $xmncrnei-d dii Si!ii&gal. oyan! fait l'opliori O'appiiyer le secteiir prive. moteiir de la crcissance et de la creation d'eiiiC;iois, entend renforcer la promotion de celui-ci. C'est dans ce sens que la Strategie de Croissaiice acckleree (SCA! se presente comiiie uiie voie pour porter le taux de croissance du PIE3 reel aux niveaux requis pour !a SRP et les CMD. Ainsi, par essence ceiie slrategie coritribuera a Line plus large prise en charOe de i.axe de promotion des opportiiniles de crkation de richesses du DSRP. notailment dans 5 filieres priwlegiees Elk reposera egalernent sur un environnemen! macrokcoriomiqiie iavorable marque par l'atteirlte du point d'achevernerit de l'iniliative PPTE intervenue en avril 2004. l'eligibilit8 du Stinegal au (( P\i\il!bniiiniCi.!alle!ige Accounl ), (MCA),la mise en ceuvre du Programme National de Bonne Gouvernance (PNEGj et la mise en awedes refornies du systeme de gestion des finances publiqiies et des marchcis publics (CFAA-GQAR) 53 L'effor! consacre d la promotion des activites du secteiir prive sera complete par le reniorcernenl de la politiqiie d'iiivestissemenl (lii Goiivernerrient La rnobilisation accrue de ressotirces internes et l'amiilioration de l'efficacitti de la depense publique. lenan: compte des reconirnandations du rapport de la Banque niondiale sur la revue de l'efficacite des depenses piibliques sercni nnises en p!ace Apres I'accroissenierit de l'epargne publique, les actions seront de plus en plus orleiitees vers les irifras!riic!ures d'appui a la production (routes, tel6coinrnunications, secteurs productifs etc 1 la mise en valeur des ressoiirces tiiimaines, la promotion du secteur privk et l'amilioration des conditions tie !iic dos popiilalioiis. Un accent paiiiciilier sera accorde a l'am&lioration de la rnobilile iirbaine a Dakar De noiivelles procedures seront mises en place pour accroitre la capacite d'absorpticn des rcssourccs c?t la qualitc dcs travailx piiblics notaiiiment par le hais des budyesprogrammes iniiies dans it's scciours cic i'tidi.tca!ioil et de ;a sarite 54 Ces reforrnes, conpguee aux politiques transversales visarit la creatior! d uil eriviioniiernen: fa\iorable au developpement dii secteiir privb, I'cfficaciti! dii sysibme piciaire. la lii!te coiitre la corruption. I amelioration de la gouvernance locale et des services de l'adininbirntiori piihliq,,e. devraiei;t davantage renforcer l'attractivite de I'economie senegalaise, beaucoup phis marquee (lti fail des evaluations appriciables cotiduites par l'iigence de iiotation internationale Standard 8 Poor's en avril 2004 Conscient que la politique de croissance econornique se doit d'ktre creatrice d'en.iplots potir jouer un role determinant dans la reduction de la pauvrete. le$ autorites stinBgalaises se sont enyag spticifiqiies siiivants ' (I) une meilleure gestiori et l'employabilit~de la main d' l'efficacite e! de la transparence du marche de l'emploi , (iii) la proriiotion de riiral et iirbain ' (iv) la promotion des activites HIM0 , (v, l ariielioration de la situatior! bcononiique et soclale des persoiiiies en situation difficile sur le marcbe de l'eriiploi (vi) ! amelioraiicx dc la santb et des condiliws de vie des travailieurs
11.2. Politiques sectorielles. 55 Pcur reiiforccr la mise err miivre do !a SRP. le Goiivernerneat powwivra ses efforts a travers ies diffkrents secteiirs prioritaires kiiisi uiie attention sp&ciaIe contindera ri e donntic? ai secteur primaire. L objectif sera de tirer la croissance dii sous-secteur agricole autour de 10% d la favetir de politiqiies inatioiiales visarii le developpeiiierit agricoie durable, la s6cii:ite alimeiitai~e,I'amelimt~ori des :evenus des populations rurales et la protection (le l'environnement Ges polOyucs et siraikgics devraieii! s'aligiier stir les graiides arientations dbfinies par le Gouvernement dans ses programmes sectoriels kiwi, la Loi d'0rieiitatioin Agro-Sylvo"Pastora1e (LOASP) constitue la base d'elaboratiori et de mise eii ce?ivre dt? programmes op6rationnels tels que le Programme natiorial de d8veloppement ayricoie (PNDAI, le Plan d action foresiier riu Senegal (PAFS) et le Plan national de deveioppement de l'elevage (PPJDE), Les priiicipes d'efflcacite Bcoriomiqiie et d'eqiiite de cette loi decoulent des cbjectifs do DSRP. 56 Du fait de son caractkre extensif, l'elevage senegalais possede iine rwge significative Les differenis projets qui serorit mis en mivre deiiraieni r-in:b!:orer la se tine augmentation significative de la production locale et ainsi relever la consonmation de viande et de lait ati-dela de leur niveau acttiel Des efforts seront egalernent consentis pour le developpement de I awciilture traditionrielle gracc a la vaccination a travers diverses actions menees dans Ie cadre des prqets inities comme le PAPEL dans la Zone Sylvopastorale et dans le Bassiii Araci'iidier. et 3 l'amtdioration g~iiiitique des races locales par l'introduciion de coqs raceurs La finalite de ces efforts sera d'arnelioier durablement le niveati des revenus des populations rurales et de diversifier les sources de creation de pouvoir d achai. 57 L'augmentatiori de !a production de viande se fera aussi par !e developpement des esp&ces a cycle court A cet effe1, des actions son! en train d elre rnenees stir diveiscs esp dent !I] i'arnkliovtion de la filiere porcirie. notamrnent dam la region de Ziguinchor qui dispose d'iiri mnt chepiel pur-cin airisi que dans la Petite CBte ; (ii) la vaccination systematiqtie des petits rurniriarits dont I amblior joueii! un rdle preponderant dans I'augmentation du reveiiii en milieu rural Elles vont poursuivies au cours des prochaines annees 58. Poiir ce qui est de la prodtictior laitiere la voie ciblee est l'inseminatlon artificielle. par le vole! Lilevagc du Prograiiime Agricole et qiii sera poursuivie dans le cadre du PAPEL, notamment dans le Bassin
Arachidier. Les objectifs viseiit a ' (i) iairc passer la coiisomniatioii anriuelle nioyeiirie de 27 litres 2 pres de 40 litres par habitant dans les annees a venir . (ii) reorienter la deniande Mere vers la production locale ahde rt'dtiire les milts en devises siipportees par l'economie nationale 59 S'agissant de la situation kpideiniologique la priorite est aujoiird hiii accord& B la li,itte contie la pesie bovine la peripiieunioiiie contagieuse bovine. la peste des petits ruminants. la maladie de Newcastlo, la pest(? porcine africaine la fievie aphteuse. la peste equine, la fi6v:c de la va;!ee ti0 Rift et la derna:ose riodulaire contagieuse boviiie Airw il? Prograrninc panafricain de CoriirAle des Epimties (P, beneficiaiit du soutien financier de I'Linion europeenne accmiiera ses cfforts Cans !'appui 1't.tabIisseiiierit de reseaux de sutwllarice epidernioiogique des priiicipales maladies an I'acqtiisition des capacitis necessaires l'organisation de contrble eoid&miolugic;iie de ces ati developpernent de la distribiilion efficace et durable des produits el serviccs vkteriiiaires.
aine de I'liydraiilique rurale, les strategies ambilionnciit de libere., a moyen iernir;, ie SOIJS- dcs aleas climatiqiies et de securiser les productions par line plus grande rlisponibiiit& et cccssibilite des ressources en eau A cet effet Ies differerits projets viserit (I) le renlorcernent des capacites des coiiiites de gestion des forages : (iii la promolion et la vaior'sation des energies notivelles et renouvelab!es ~ (iii) le renforceiiient et la g&i~r;iIisatiori de la politique de branchemcnts sociaux , (ivj la construction de forages motorisbs : (4) la r&abiIitation e\ le ponpge des piits modems en niilicli rural et (vi) la rehabilitatiori de forages et la ri.a,isation ri'otivrage de sinckage Le stockage des eaux de pluie dont I'experierice est deja reus% dans la rkgioii (!e Tlii&s, avec nctainli construction de bassms dc reterition. sera etendii aiix aulres regions Pxr faire pluviornbtrique chroiiique. le gouvernement qui s investit dam It) d&vi!lopperr:e:il des t.! en!end poursuivre ses efforts dans ce domaiiie pour mininiiser les risques iiii~8rentsair pertiirbations dii cycle vkgetatif et d'aliiiieritaliori dii cheptel dans les zoiies riirales. ique rurale poiir les usages agricoles le goiiverrieinenl envisage de liberer, B matiques et de securiser Ies productions par une pliis qrande dispon.bi!ite et tine ressomes en eati Ceci passcra entre autres par: (i) I applicamn da plan d'action de gestiori iiitegriie des resseurces en eaii (GIRE) 3 partir de Xi06 , (11: i'extension des systenies de stockage des eaux de pluies. comine c'est le cas des bassins de rerentions driris la regiori de lhi& , (iiij la poursuite des appuis au developpement d'acliviles agricoles en aval des forages ruraux rixsiorisks perriiettant d'aiiiBIiore: les revenus des groupes sociaux les plus d8muiiis 62 S'agissant de la gestior, des ressources maritimes, la strategie corilinuera de viser la .atisfaction de la deniande riationale, la gestion durable. la restauration el la valorisation des ressources halieu!iques ainsi que !a promotion de !a qualification des professionnels du secteiir A cet egard, les diffhreiites actioris entreprises poursuivront: (i] le developpement de la peche conlineritale et de l'aqiiaculture : (ii) la promotion du debarquement el de la de produils halieutiques sur toiite %tendue dii territoire nati3ila! (iiij l'amenagement des quais de peche et la sensibilisation poiir iine utilisation rationnelie et rcsponsab!e des ressoiir'ces halieutiques A travers notamment I'acquisition de materiel de contrijle e! de siirveillance I implication des organes de concedation et de cogeslion : (ivj la giisiion prudenticlk et durable des resscurces halieutiques par ~ntroducbond'urie licence de peche , (v) la promotion des meSurc?s de s6ciiri!b pour !es pecheurs avec I'approvisionriemerit du march6 en gilets de saiivelage , (vi) la Iutte conlre la pollution des eaiix iiiariries et continciitaies , (vii) la rt.duction des pertes post-captiire au :lebarouemei:t par le renforcement des infrastruclures de conservation. de transport et de cornmercialisatioi (viii) i appui a la transformation artisanale el (ix) la formation des professionnels de la peche ar!
63. Concernant le secteur secandaire. la poursuite de la restrJcturation de ! appareil indtistriel devra'i permeltre de rcnforcer davantage la productivite avec notarnment la reduction des coiits dc aroduclioii, de developper les exportations et d arrieliorer la capacile industrielle atin de pouvocr generer heaucoup plus d'einplois. Le secteur devrait croitre de pres de 4.8% en 2005 64 Le Goiiverncment a pour ambition de developper I'inciiistrie eri am4liorarii ia p:oductiviib et la cornpetitivite des entreprises et en reduisant les coiits des facteurs. Ainsi ~iiieat port&?au sous-secteur de l'energie qui coristitiie iin maillon importanr tlans la roaii croissance. Le developpement des infraslructures et services energt ties a travers une augmentahn du iiivew des iiivestissernents et la creation d'un cadre insiitutioniiel assez a!tiayaiit devra poiter le taux d'&?ctrificaiionriiralc au niveau de !a rnoyenrie monthale (60%)avec i!es actions rc:iforcC.cs iiarx ie milieti rural. Ainsi, le Gouvernenierit s'appuieia siir I'Agence Sbn6gaIaise d'Elect lion Ruralis (ASER). sur ics dotatioiis reguliti.res du budget et sur la creation prochaiix d'un Fonds d tr:fication wale (FER: Four atteiiidre un objectif de 15% de taux d'eiectrificatiori rurale a partir de 2005 65 S'agissarit pariiciilic'reiiieril dii secteur industriel, les onentatioiis dii Goiiveriiemeiit visorlt a dcveiopper le secleiir a favoriser le developpemenl industriel ei;dogene et a poiirsuivre la mise a niveau des entreprises Ainsi, Ics irivestissements publics seront reorientks vers IC relBvemeiit be la pr~dr~ciivikdes entreprises Le dialogue entre I'Etat el le secteur prive sera renforce, B travers no!amn Presidentiels pour l'investissernent (CPI), pour etablir des relaims de partenanat stra enireprises etrarigeres euoluaiit dans des secteiirs cles afin d ideiitiiier et de lever Ies obslacles at1 developpement de I'investssenierit direct Par ronskqireiit le dispos performances des entreorises sera egaleiiieiit reiiforce 66 Pour ce qui est du secleui de I'artisaiiai, les oti!ectifs tie poiitlqiie concerneiit I amBlioratinr; de la qiialiti des produils el services offerts, la perennisation des actions de formatian des artisails e! dc iew encadreinent et le renforcement des infrastructures de soutien aii rnoride rural Les pri!icioales iignes (j'aclioii portei:t sur (i) la ronstiuctioii el l'equipement tic cwtre 3 dlsrr billion dkcentralises iivec resultat de mlleures conditions d'acces aiix marches des produits et sewces i'e !'ai de circiiits de d:slribul;ori rarriifi
67 Pour les PMEIPIAI. I/ s'agira surtoiil de: (I) institutionnaliser des guichets d aide B ;'in\ appiiycr I'impianiation par le biais d'uii systhe de financemerit dkcentraiisb et rcnfme place iin systeme de finariceinent adapte aux besoins de l'eritieprise par la creation d iir1 fonds d ap2ui ii! dkveloppement de noiiveaux prodtiits, la coordination des sources de financement ?on baiicaire exislanles effective depuis juillet 2004, contribuera A maintenir les acquis et piacer le Senegal parmi les pays emergerits dans le secteur et a ambliorer les conditions de concurrence La telbphonie rurale, maillon faible du systeme, devra connaitre un deveioppemerit imporianl ll s'agira de poursuivre !e rapprochement de toutes les Iocaiites d'uri centre t816phoniqiie en elendan! le leleptinne dam les viliages centres abritmt des structures adrninistraiives et ceux de plus de 2 000 habitants 72. Les objeclifs dii sous-secleur cornrnerce visent B (I) developper davantage ie coimerce ir:terriatmaI yrke a I'arnblioration des politiques commerciales, au developpenient ei B la promotion des c!xporta!iclris: (ii) dhvelopper le ccommerce ini6rietir en anikliorant les conditions internes d'api3rovisionil,eriienl des marcties. 73 Pour !e sous-secleur da tourisme, l'obpctif centrai paiirsuivi canioriiibiiierit aux axes strategiqiies du DSRP et a la lettre de politique sectorieile est la saiivegarde et la valorisatiot! du potentie: touristiqiie national Les strateg es y afierentes sont relatives a (1) mc meilicrire connaissance dii po!ei:tiel et la realisation d'investissernenis strticturanis , (ii) une inellleure prisii e*icilaige t!cs initiatives locaies , (iii) ilne mise en piace d un cadre iricitatif aux invesiissemcnts , (iv) une intensificatior des activites likes A la prornotiori ciu tourism de luxe ; (v) UI? developpenient dun tourisiiie de inasse , (vi) iii: assaiiiiwineni de 1'eriviro:inerneiit toiiristique.
74 Coricernanl !e secteur quaternaire, doni le soirs-secieur de i'ernploi p~t?iiri rOle dtjterininant dans la rhduciion de la paiivreti, Les objectifs spbciiiques poursuivis siJnt ti) une rneiileure gestioi et l'employabilili! de !a iiiain d'wvre , (ii) le renforcement de I'effic et de ia irarisparerice du niarche de l'empioi , (iii) la promotion de l'emploi independant en niilieu rura urbain , (iv) !a prornotioii de HllvlO , (v) ! arrielioraiioii de lii siliiatiori bconornique el sociale des personnes 6i.i sitiiatiori Mficilt: sur IC: marche de l'emploi ~ (vi) I amelioraiioo de la sariit. et des conditions de vie des tra>m!ieiirs 75 Dans le cadre tfu renforcernent des capacites la politique educative du Seiiegal pour 1;'s proctiaines annhes sera de poursuivre la inise eii ceiivre du Progi'amnie 96cenwi tie i'Edticarioi? et de la Formation (PDEF) Les principes directeurs du programme renusen! sur Ime approctie globaie de l't\ducatioii et tine vision a long tcrriie de la sirategie de develop;?emeni d:i sectew Les orientations du PDEF (c 2000 - 2010 D son1 au nombre de trois: (I) !'blargissernent de l'acr a I educ.aiioii en particukr B I enseigneinerit eltirneritaire et a la formation, (11) I'amkiioration de la qual e! de l'effcacite dii systeiiie
Bdulcatif a tous les niveaux (iii) l'am8lioration de la gestion du sysierne tiducatif I/ s agira d'arriver A ' (I] une scolarisation tini~ierselleet 8 I 8radicahon de I'analphabktisme, iii) une ;)Ius graiide ouverture de l'enseigriement secondaire dans uii eiivironnernent pbdagogique ameliore , (iii) uw rCbrine en piofondeur de la formation professionnelle en vue de renforcer sa pertinence et sa quaiit6 jiv) la poursuite de la reforme de I'eriseignement superieur pour en ameliorer la qualite et fac.i!iter l'acces aux teclinologies de I'information e! de la cornmunicatiori : (v) une amelioration de I'efficacite du cadre et des instrurnen!s de gestion ilu sysf6riie Mucatif : (vi) une ptus grantle implication du secleiir prive rlans tom ies ordies t Le gouvernemeiit coilsacre 40% de sori budgel B ce sedear strategiqoe et entend efforts daiis ce doniame haii!efll~fltpiiorilairc? 76 [Jour la sante, le Gouvernemeiit poursiiivra la politiqiie :!e ;?r itioii des risaiicis saniiairel; et dd renforcenient des prograriimes de luk contrc les maladies lransm,ssibles /I i; agira amde dispser d uri systenie de soins de sante repondant aux besoins a assurer l'appui i1Ccessaii.e ai1 ti8veloppen'ienI c!urab!e de soiiis de sante efficaces. A cet effel, les strategies reteniis dans la deilsihrne phase du PNDS sor,: le$ suivantes (I) I'arn8lioration de I'acces des groupes vuliiBrah!es a des services de sante de qiiaiiie notanimeni en matiere de saiitB de la reproduction. de 'AH'SIDA paluchsrne e! Iubercuiose , $1) le renforcement de la prkveritioii et de la communication pour !e c'iiingemeni dk !:ornporteiier% ep meitanl l'accenl sur !'hygiene individuelie et collective la vaccination des enfaots et tow IPS autres nioyens de prophylaxie contx des maladies endeii-riques , (iii) I'anielioratioii de !a dispo I ia qdalde e! de la performance des ressources huiiiaines daw le secteur de la sante (ivi ion des car;acites institutionnelles dti secteur , (v) la proniotioii (le l'eiitreprenaiiat (VI: !e i l'8valuation de la performance ; et [vii) i'aiiieiioration des iiiecaiiistnes de financeinent de ia sante. 77 S'agissant de I'hydraulique et I'assainissement en milieu urbain les siraQjies definies dans la ietlre de politique sectorielle. viseni le renforcenient du cadre organisationiiel et institutionnel, IC renforcenient et la consolidatioii des infrastructures teChfliqueS. l'aiii4lioration de la quaiit6 l'exterision de la desserie e! la mise en mtivrc? d mons c es do liltte contre la ;)atiiirct8. no tine meilleure efficacite des programrnes de braiicheiiic sociaux Le iaiix d'acci.s ewa 2008 en milieu urhain serait de 93% el 63% pour /'assainissr!ni(:iit Pox ce qui est d,i iiiilieu ruriii en mattiire d'acces a I'eau potable et a I'assainissement en milieu rural. la poiitique secioiielle sont fxes dans le PEPAM travers (I) la construction de noiuvelles adductions d eau i?ipis moderries et ! cxlensiori des infrastructures exis!aiites (ill la constriictioi: d'ouvrage d'assairiissen?en! iridividuels et d'edicules piiblict; et , ('11) le rcinforceinent de capacitcs des acteurs :io! par des Plans locam d'hydrauliqiie ti d'assaioissement (W ' iaux d'acces ei: milieu ru!ai de 68h et 23% a l'!mizon I as~airiissernent
78 Concernant le sous.secteur de la culture, le Gouverrienieni poursuia (I) la conservabnn e! la m.se en valeur du patrimoirie ciilturel. (ii) la nlise erl place d'un erivironrienl(?litpridiqtie et ecoiioniiqtie favo aii dhveloppeinent el B ia crkation d'enlreprises cultiirelles : [ivj 'e reiiforceiiient des capa institiilionnelles du Ministere de la Culture ~ (v) l'apptii aux iristitutioi,s de de:ielopcemcrit ciii!ure/ crkalinii de mu!uelles pour la pronintiori de la c:ilttire
79 Au niveaii du sous secteitr des sports, les objectifs suivants semi pourwvis (I) IC deve'appeii!etit d infrastrtictiires sportives de soutien adaptees aitx zones rurales , (:!\ !e scii.i!,en auk actiiiites dc p4che sportive qui asstirent la gesiion durable des ressourceS ha privkes pour l'installation d'iiidustries de corttcctioc rl'articles spor!iis ; t equipements de sport el prodtiits d accompagnemen! rv) :a p: (vi) la piornotion du sport f vi) I'iiistauration du profess sport : (viii) l'iniplantatio @res qualiiiantes ctiez ies deve1oppe:nent des systemes Sports-Etiides . (1x1 la creation de services de sai\te Dour spnrl , I Code de ia ccinslruction iim~)liqiie: les populations local~ssur la geslioii diiiable des ressouices iizi!wcics , ($4) pronloiivoii des uiiiies d'erploitation et de trarisforrnalion des produits iorestiers ivi) ltiiie: contre la poilutioil nuisante et ir!dus!rielle ;i travers notarr:ment ia promotion des actions de Irait(meiit e! cfe recyclage des ddcbels !iidiistriels 82 Le Soiiverncrncnt accorde a la Securite des biens et des personnes uiie piiorite abusliie. Cela passe par un meitleur equipenlent et une plus grande couverture da :err,te:re par les s~rvicesde sewrite iPolice. Gendarmerie, Armee) et uiie am6lioraiion de ieiirs cotidiiions de travail. C. ::et 6gard. ii sera procede graduellemerit a uii recriilement de personnels pour les services de s6curit6 afin ri'atteindre ut'! ratio (agents de securiteipopulatton) satisfaisan! kfir! de developper !a police de proximi!&. le Gouvernement s'attellera a la corislruction d'iin commissariat dans cnaque tl&par!eiiier,! ainsi qu'i l'impiantation el la multiplication des postes de police en fonction de la mobiliti? et de la concentr31ion des popiiiations. 1.0 politiqiie de renforcement des capacites el de dotatien C!ES policicrs eri imoyeiis 1oyisti:~iics adaptes sera poursirivie Par ailleiirs ie dispositif de protectior! civile sera amI:ore par ic developpernerit d une politiqiie de prBvciition et le renforcenieri! des capacites de ges?ion ainsi que i'intensificalion des mesiircs de prevention et de 83 Le Gouvernernent renforcera i'independance de la justice e! son ibiiite par !e recruteineni de viagistrats et leur formation en rnatibre cornrnerciale, ; amelioratior is ::ondi:icns de !ravail, le recriitement de greHiers e! la irioderiiisation par I inforin reiiabilitation des tribiinatia. La liilie contre la corruption garanlir de rneiiieures pcrspectives de develoDpernent ec 84 'routes ces strat6gies sectorielles seront mises en vuliierakles, notamment les fenlines. les enfants. les harldicapks e! !es ainBs Los iA)ject:fs e! ies strategies qui seront iiiis en awrc orit ete declines dans le DSRP el des fiiaris d'operations oril Btk d& eiabores Ill. Etat d'avancement de la mise en Oeuvre de la matrice CSRP 85 Poiir ac&?rer la rechicti inondiale et avec la participaii pied line matncr? d ac!ions a!iii de renforccrr les m6canisrnes de imise arocessus participatif s'articu administratives aii seiri de i'E de la pedorrnaiicc dii secteur I'empioi et ia justice) , et (v) la protection des groupes ies $us viiin6rai.ios 85. L'efforl ti'accoiripagnenie CSRP-I el devrait se prolong ceriaiii nombre d'avanlages realisation de plusieuc; object gouverrieiiient aiitour de la s!ralegie de rbduction de la pauvrete. notamiiiciii dam ies aspects transversaux que son! la protection sociale e! !a decentralisation, /I perinet de rnieiix cocrdonner ies interventions des bailleiirs de fonds et ti accroitre leur pariicipatior? Ci-dessous rioiis nws proposcsns de decrire tirieveiwi3t IBS aciions principales supportees par Id matricc du CSRP. ai^ qire les pwnieis :naiiiBre a mieiir les situer dans ia mise ell mvre de !a St%egie dc Lutle coii?ieia F 87. \.'engagement LIU riiveaii des reformes financieres, budgetaires et administratives au sein de I'Etat. poussa le gouvwncnien! a procede une deconcentraiion de I orclo1iri;;iicemen ministere (Education. santk. justice et eiivironnemari:,~ L l'klaboration du oiojel de la Loi de finances de 2996 sur une t: nioins pour qiratre ministere test ihdiicalion, sante. justice et d'actions issu de l'audit techntque et financier de la solde. la finalisa!iori dti pio'iet de Code des iiiareties publics [CblP) r6vis8 Des niesiircs seroiit prises afin clt; perniettiai aiix iiiinist leur plan de passation de marches prealablernen! present& a la CNCA. Pa gestion de 2002 et 2003 seront transmis a la Cour des comptes Poiir rationaiiser 'es contr6les administratifs. I/ sera realise une etude SUI la rationalisation des structures de coritrcle admivistratif et juridictionnel La nouvelle strategie de reriiurleratiori du secteur piibiic sera mise c'i ceuvre 88. Au sens de la bonne gouvernance economique et financiere. le Gouvernenieilt entend poimivre cet effort de iationalisation dc! ses procediires budgbtaires au cours de I annee prochaine /I coniDte Blaborer le projet de Loi de finances 2007 sur une base progranirnatique (CDMT 20(i7-2000) ail moilis rlans 6 ministeres. /I sera teste le progiciel ASTER sur trois postes comptables cihies (Cxar tit deux autres rkgions) Les textes sur le CMP seront adopt& et mis en application Li la suite dvs recornn:anda!ons iss;ies des etudes comr1widit8es Aussi, les comptes de gestiori de 20c14 et 2005 seioN s a !a Cnur des comptes 89. Dans le cadre du renforcement du processus de la dicentraiisation les efforts vont SE poiirswre avec le developpcineni des activites de sijivi dans les rkcjions et iii: soutie:! coiltinu aiix callectivites locales L'institutionnalisatiori tlu DSRP est Ires avaiic8e. Les Comites :tgioria:ix soii! operationriels ijvec uiie participation au processus dc rime en ceuvre du DSRP. une contribiitior.1 aa rap?ort d'a.mcenient de 2064 et le lancemeiit d'une canipagne de sensibilisation autottr du DSRP dans les regions-tests de Kaolack el de Fatick A travers un conseil iciterministeriel oii par interpellation directe, les services des niinisteres de la sante et de I'kducatiori presenteront les projets d'investissernents a decen!raliser et les collectivites locales ou les projets pilotes seront testes De meme. 11 est prevu des I'anriee pro iiie de preparer el d'adopter des textes want la rationalisation des transferts FDD et FECL, La strategie de d sation de 'a gestion de l'exkctrtion tlti EC; sur ressources internes sera irittigree clans la Lo di: Finances 2006 et sera graduellement poiirsuivie au cours des prochaines ann& De m6me. la refowe de la fiscalite locale, entarnee depuis 2004 avec l'inlroduction de la Coritiibutior globale unique fCGLI; sera poursmie en 2006 grace aux orientations de l'etude de faisabilite sur la fiscalite en milieu rural 90 En ce qiJi conctirne I amelioration de la performance du secteur de la sante, !e dXti'iE[>t de la deuxieiiie phase dii PNOS visanl l'atleirite des OAlD et des objectifs du DSRP ?> et? finails5 i;:issi bait-il rioter la validation par le Coriiilk de coordination iriler-agcnccs (111 plari tiacticjiis t la couvcrture vaccinale avec i'avis technique favorable de I'etucie sur fiiiaiiciere du Piogranime elargi de vaccination (PEL') en vue de perenix kaccinale Le rcniorcenient des capacites i!isbtutioniielles dc la sank! a pour les autorites senegalaises, avec la signature d'tiii dkrel portapt CJig pour uiie ratioria1isat:on dti fonctionnenieiit interne de ces orgares Enf urie iiiise en place finale du Systeme d'inforniation saiiitaire a des fins de gestion (SQ poiir UI stii'ii de proximite de ce secteiir Le CDMT sera adopt6 et exhit6 do manibr I'arnelioratiori de la couverture des services de santk essentiels dans des statistiques saiiitaires de 2003-2004 et du premier seniestre de 2005 seront elabores ci partti des donri6es collectdes par le Systeiiie d infortirations sariilaires des (ins dc gas!ioii (SIG) (31. Pour l'ani6lioration de la performance du secteur de la sante, il est prevu de pourstiivre la mise en etivre d'tine serie d actions prioritaires qui incluent notamment le coiitrble du respecl des tarifs des activiks et marges beiieficiaires sLir les iiledicaments essentiels g6iiBriques (MEC) 11 sera aussi ::TxP~C B une augn?entatioii des peiformances du PEL' De meme. des curitrats de performance scront e!ab'i-b avec les directions centrales, regions medicales les districts sanitaires et Iks etablissenwits publics de saiite iricluant line liste d'indicateurs pour l'allocation de iiioyens Le Gouveri:enieni s'engage A atteiridre les oblectifs fixes poiir au rnoins 2 ties 4 indicaleurs suivarts CPNI. CPC. liccowe:renI assistk et ie nonibre de depistbs en CDVA au cours des 12 derniers mois Enfin le Gotivernemei?t eniend de coniinm a aiigrneiiter les taux de couveriure vacciriale DTC3 a pius de 80%. 92 S'agissant de l'encouragement a la creation de richesse, d'importants !ravaiix on! fait l atten!ion des autorites dans le dornairie du rnarche de travail, de l'arneliora!ioii du secieur de la jusiice, /e reniorccment de la gestioii des ressources humaines ei financieres Le Goiivernement rendra operatiomel ie FONDEF en inslrtiisant des plaiis de formation pour 15 enlreprises ct financer 10 d mtre elks Uti d6cret sera signe pour signifier de la creation cl'un comite de coordination et d'evaliiatioti et d iirie cellule 3'execation adrniriistraiive et firianci6re du Programme Sectoriel Justice. Des cas reps par la Commission natiaiiale de lutte contre la non transparence, la corruption et la coiicussion seront iristrtiits Enfin il sera cr&i une ceiliile de comniiinication ail ministere de !a Justice et un plan de communication sera mis eri c13uvre 13 Pour encourager la creation de rictiesse. le Gotivernenient poiirstiivre l ai?op!ion yradueile des icxtes complhentaires ciu Code du Travail preparer c't publier iiri reciieil de ;'ensemble des !extes adoptes. Le foiiciiorinemeni du coiiiite de cooidination dii PSJ sera renforce av i.iric guhlicaiior de sori rapport d'activites. Les plans d'aciions issus du diagiiosk des delais des pro iires jiidiciaircs seron! vaiidbs et niis en ceuvre en iricluant les indicateurs de restiitats 93 Toutes ces mestires d'accompagnement de !a iiiise en ceuvre poui~ontde Ti?a'lti?re giahsie contrikiucr a uiie amelioration des capacites des groupes vulnerables La strategic nat~o::al {SNPS) qui sera iniegree coiTrne tine composante impor:an!e dti DSRP rPvisc, con pour atteiridre les OIPD et meliorer les conditions de vie des sur quatre sous coniposantes I) extension de la proteetioil so 1 refome tles systeines formeis de sectiritii sociale , iii) am6lioration de la capacit6 cle reponso ~IJXcliocs e! risqiies pour lcs grcjti:m vulnerables e! ~ iv) gestior> des catastrophes et risaiies nia!eiirs En prlorilf? ie gourerileniei:! entend (ai etendre et diversifier ies instrumen de protection sociale aiiri que le 1:xix dc ctwerture nialadies altcigne au moins 75% eii 2015, (bj am iorer la capacite de reponse aiiv chocs et risqiic pour les groupes vulnerables , (e) ariieiiorer l'accbs ux services sociaux de base des groups vulnerabies , (d) augrneiiier I'acces aux instruiricnts de gestioii des risques ct aux sysforncs de protection s~cial~pour Ids groupcs non couverts ; (e) amkliorer le ciblage. ie suivi et i'evaluation des actions dirigkes vers les yrcupes vulnerables (0 assurer I'B~i~ilkpour les groupes vult-hrables , (9) renforcer Ins mkcanisrnes de transfer! dim! fJes ressources aux groupes vulnei-abies , et (h) garantir des reveiiiis aiix pcrsonws en difiicultf? et growes viilntirables, lout en led permcttant de s'insiirer dnns les sys:enes formeis de 94 En ce qiii concerne I'arnelioration des conditioris de vie des ~XIJ, iil.ibraSles ir; 'evw co:ywte ck la mise en oeuvre de ia SNPS sera pieparee par la Coriirnissioc de !a S L'execiilioi dii Progiarnice de Readaptation a Base Cominu!iatitaii'e tians quaire regions sera effectivi! iiirisi wedcs piograr retenus dans le plan d'action 2006-2008 de la SNPS Les budgeis d au moins 2 stir 3 miiiisterrs des du Syst&ie de protection seciale (le P;liiiistBre de la femme, de la ?miillc et clu dt'veloppciw\t scxial, le Ministere de la solidari!e fiationale et le h4inisiere de la bnctiori puk~licue du travail. de I eirpioi e! des organisaiioii professioniielles) seront blabores sur one base programmaticiic? cti vtie de la niise i?r place dii CDSMT en 2008. 95 Par ailieurs, d'aiitres actions dans ces domaines imritaires on1 fait i 3hjer d'une arise i.ii charge daris le cadre de la preparation des CDSMT. I/ s'agit entre autres de la preparation de bi.!dget-?rogramme (CDSMT du niiriistere de !a santi:, de la justice. de \'bdiJCation et de l'environnement), la meen @uvre d:i SIGFlP la finalisation des POR liarmonises avec les POS la prepaiation de la d6centralisatioii du F3C! vcrs les regions l'amelioration de l'offre de service de sank etc 96 Monsieur le President. le Goiiiierncment dii Senegal est coriviiirxu dcs p ses !el$ (ill lis ressortent ci-dessus el confirrne sa mlonte et son angagement eii taveur de la rVii- des Programmes et d Actions Prioritaires dii DSRP I/ n en reste pas moins cae i diteiiite des objectifs ambilieux rnais reaiistes que sesi fixe le Gouvernernent requiert des efforts souter?us i3nl ati riiveau financier que tecliniqiio C est dans ce contexte que s inscrvent IF? actioix so,itei?ues par le projct 3~ cicdil d appui a la strategie de reduction de la pauvrete developpe avec les services de la Bariqiie ivx!iale 97 Le Gouvernernent du Senegal saisit cetie occasion pour rernerciei la Banqiie tmondiae pour son appui a I accompagner dam la reductioii de la pauvrete et I atteinte des OMD Je votis prie d agreer Monsieur le President I assurance dc ma ties haute cr:nsderation Schedule 2: Evaluation of prior actions under PRSC-I1 Trigger identified in PRSC-I Prior Actions under PRSC-I1 Comments for PRSC-I1 Fiducialy Reforms 1. Elaborate the budget law for 2006 on a 1. Prepare, on a programmatic basis MTEF finalized for four Ministries programmatic basis (MTEF) in at least 4 (Medium Term Expenditure Framework), (Health, Justice, Environment, and Ministries. a 2006 budget proposal for at least four Education) and draft budget laws ministry departments including the prepared on a programmatic basis for ministry of health. these four Ministries 2. Implement the recommendations derived 2. Adopt the recommendations derived The study as well as the Government’s from the financial and technical audit of the from the financial and technical audit of commitment to implement the derived wage bill in the public sector. the wage bill in the public sector. action plan were transmitted to the Bank on November 10,2005. 3. Revise legal texts on procurement on the 3. Finalize Draft Procurement Code on Final draft reviewed by the Bank and- basis of the recommendations derived from the basis of the recommendations derived submitted to General Secretary of recent evaluation study. from recent evaluation study, circulate it Government (dated of October 7, 2005). throughout the Government, and submit it to the General Secretary of the Government. 4. Prepare and implement procurement Instruction from the Prime Minister plans approved by the Conmission dated of April 26, 2005 but only 4 Nationale des Contrats de 1 ‘Administration ministerial plans were received by the in six Ministries. Bank in October 2005. New plans are under preparation for the year 2006 5. Submit the 2002 and 2003 comptes de Done as confirmed by the General gestion to the Cour des comptes. Accounting Office (letter dated of March 1, 2005) 4. Carried out a study on the Added as prior action as result of rationalization of its internal and external persistent weaknesses in internal and control systems. external controls. Contract signed with the consultant on October 4, 2005 and the first phase of the study was completed on November 10,2005. Final draft is expected at the end of the first quarter of 2006. 6. Initiate civil reforms based on the 5. Implemented a new civil service Report of activity indicating the recommendation derived from the diagnostic remuneration strategy, including the implementation of the strategy, including a general increase in public study. adoption of a pilot program for the wages (13% in October 2004) and the decentralization of health sector staff. gradual introduction of financial incentives. The pilot project to decentralize personnel in the health sector started on November 1, 2005 in 25 regional health posts for a total budget of FCFA 45 million. Decentralization 7. Agree and start the implementation of the 6. Prepared a draft 2006 consolidated Done. Letter from the Minister of decentralization strategy ofthe consolidated investment budget for the education and Economy and Finance indicating the investment budget (BCI) in pilot health sectors taking into account the Government’s commitment to regions/sectors. decentralize BCI in the 2006 budget. decentralization of the budget execution. The total amount of projects to be decentralized in the education and health sectors is equal to FCFA4.6 billion. 8. Strengthen the activities of the PRS Close participation of regional committees in the eleven regions. committees in the preparation of the new PRSP and launch communication 65 Trigger identified in PRSC-I Prior Actions under PRSC-I1 Comments for PRSC-I1 :ampaigns in two pilot regions 9. Integrate standard measures to facilitate Vot selected as prior action since it was the implementation of procurement rules by ncluded in the new draft Procurement local governments in the Procurement Code. Zode (prior action # 3) Health 10. Initiate the implementation of an Not selected as prior action since it was incentive package to attract health personnel included in the implementation of the in underserved and isolated areas. remuneration policy (prior action # 5) 11. Increase the DPT3 immunization 7. Increase the DPT3 immunization Done. The national average was close to coverage to at least 80 percent in 2005. coverage to at least 80% in 2005; 55% for the first 9 months of 2005. 12. Adopt and implement the MTEF aiming Not selected because it was merged into at improving coverage of underserved areas the first prior action of budgetary with essential health services. reforms (prior action #1) 13. Produce statistical reports for years 8. Produce statistical reports for years Done. Reports received by the Bank in 2003 and 2004 as well as for the first 2003 and 2004, as well as for the first :arly October 2005 semester of 2005 on the basis of the data semester of 2005, on the basis of the data collected from the health information collected from the health information management system (SIG). management system (SIG). Wealth Creation 14. Initiate imulementation of the sectoral Not retained as prior action because it strategy for vocational training (LPDFP). was too vague. 15. Start the activities of the Fund for 9. Start the activities of the Fund for Done. Activity reports indicating that vocational training (FONDES). vocational training (FONDEF) by 33 training projects have been funded in funding training programs in at least 10 13 enterprises over the first semester of enterprises; 2005. 16. Initiate the implementation of the Not retained because too vague sectoral strategy for Justice. 17 Create the unit responsible for 10. Establish a unit responsible within Decree signed on October 18 2005 coordinating policies within the Ministry of the Ministry of Justice for the Justice. coordination of the implementation of the Borrower’s justice sector program 18. Strengthen the activities of the 11. Establish the Commission Nationale Letter from the Minister of Justice Commission Nationale contre la Corruption. contre la Corruption, provide budget indicating the following measures (i) allocations for its operations in 2005 and the Commission has received budgetary 2006, appoint its secretary general, and resources for 2005 and 2006, (ii) provide adequate facilities. General Permanent Secretary was nominated on July 22, 2005; and (iii) buildings were attributed to the Commission in July 2005; ) Vulnerable Groups 19. Adopt a coherent and integrated social 12. Adopt a coherent and integrated Approved on October 7,2005 by the protection strategy toward the most social protection strategy toward the most Interministerial committee. The strategy vulnerable groups identified in the PRSP. vulnerable groups identified in the PRSP included an action plan, a review of (including monitoring indicators and public expenditure and the selection of actions plan derived from the public a few monitoring indicators to be expenditure review) included in the new PRSP. 20. Develop a list of monitoring indicators Not selected as prior action because to be included in the annual evaluation of included in the first prior action of the the PRSP. vulnerable groups (prior action # 12) 2 1. Finalize the public expenditure review Not selected as prior action n because with an emphasis on vulnerable groups and included in the first prior action of the agree on a set of priority actions designed to vulnerable groups (prior action # 12) improve the efficiency of public spending on vulnerable groups. 66 d E: Fn 5 0 e, 5 5 .-G 5 se, WE 7s OD 2 5 I9 E in g u F s P e .-C ':E 51g E2 .-L k .-*E u g sh e, 9 - E 3 5 -0 x 0 5 e, L E 2 I z0 % W 5 e, Y eE .-E 2 .-I m vi 0 S .-4 u8 .E/ L P 0 co 3 00 W f -m d mn e Ei mu 3 n B C C Schedule 4: List of Monitoring Indicators I I ------:ategories Indicators (PRSP indicators in Starting bold) point Tar ets PRSPlMDG Responsi ble 274 Unit/ Source 1, Number of Ministries with 0 MEF decentralization of budgetary execution 2. Number of projects of Lois de 0 DGFIMEF Reglement received by the Cour des comptes 3. % of contracts approved by CNCA on 17% I 23.7% 1 <20% 1 MEFD sole basis 4. Budgetary execution rate 91% 91% 295% 295% DGFIMEF (2003) 5. Share of BCI allocated toward PRSP 38% 240% I 245% I DGFI DPSICSPLP objectives G. Number of civil servants recruited by 5000 4494 5000 MEF the Government (2003) 7. % of exceptional expenses in total 4% To be determined with MEFIPRGF public expenses 8. VolumeofFECL I FDD 9.1 (2003: MDCL and FDD (in billion FECL 8 (2003) MDCL of FCFA) : 9. Availability of FECL and FDD transfers 9 months months 4 months <3 months MEF to local governments (2002) : 10. Number of PRSP regional committees 0 (2002) CSPLP reports in operation 11. Number of POR harmonized with POS 0 (2003) CSPLP reports 12. Volume of investment projects included 0 MEF in the Consolidated Investment Budget decentralized to local governments (in billions of FCFA) 13. Number of population per health posts 11830 11260 11000 I 10500 I 95% Ministry of Health (2002) 14. DPT3 coverage rate (children between 59% 285% 85% 85% 285% Ministry of Health 0 and 11 months) (2003) 15. Share of assisted delivery by skilled 39% 45% 1 45% 1 50% 1 90% Ministry of Health health staff (2001) 1G. Use rate of Pregnant women GO% Ministry of Health impregnated mosquito nets Children under 5 years 60% Ministry of Health old 17. CPNlCoverage rate 52% 65% 65% 70% Ministry of Health (2002) 18. Primary health consultation rate 46% 50% >SO% >50% 65% Ministry of Health (2003) 19. Increase in VIH/Aids screening in Ministry of Health CDVA I 20% I 20. IMCI strategy implementation in health 40% 50% GO% 75% posts 2 1. Number of contractual arrangements for 0 15 Ministry of Health private sector to deliver PHC __I 23. subsidies for essential drugs and Ministry of Health C 1 services 83 37. Composite indicators measuring the (izo)1 na 1 0.6 ~ 0.63 1 0.65 1 0.75 I CSPLPiDPS () access to basic social services in rural ;2 areas 1 38. Share of working children between 6- 36.7% na <30% <7.5% DPS (QU1D)l 8 14 years old (2000) Q) 39. % of HIPC resources allocated toward To be determined by mid-2006 CSPLPiMEF z rural areas E 40. Coverage rate of the public program To be determined by mid-2006 1 1 MEFiCSPL 1 reaching vulnerable groups L2 ~ 41. Number of information campaigns in 0 0 6 11 11 CSPLPiMFDSSN 5 the regions (number of regions) 42. Underweight children (under 3 years 19.10% 19% 17% 15% 11% DRSP nld\ 84 ANNEXES 85 Annex 1: Key Economic Indicators Indicator 1999 2000 2001 2002 2003 2004 2005 2006 National accounts (as YOGDP at current market prices) Gross domestic product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Agriculture a/ 18.6 19.4 21.7 15.7 17.6 17.0 17.8 17.6 17.0 16.4 Industry ai 20.5 20.6 19.3 20.1 19.8 19.7 18.9 18.3 18.0 17.7 Services ai 60.9 60.1 59.0 64.2 62.6 63.4 63.2 64.1 65.1 65.8 Total Consumption 88.7 89.1 90.5 94.4 92.3 89.3 89.7 88.8 86.5 85.6 Gross domestic fixed investment 19.4 17.0 18.8 16.4 20.4 23.1 23.1 23.4 23.6 23.7 Government investment 8.1 5.8 6.9 7.9 9.1 10.2 9.8 10.1 10.3 10.4 Private investment (includes increase in stocks) 10.4 15.1 12.2 8.8 11.6 13.2 13.6 13.6 13.6 13.6 Exports (GNFS)b 30.8 29.9 30.7 30.6 28.5 27.8 27.2 26.3 27.3 25.9 Imports (GNFS) 38.0 39.8 40.4 41.7 41.5 40.5 40.3 38.8 37.7 35.4 Gross domestic savings 11.3 10.9 9.5 5.6 7.7 10.7 10.3 11.2 13.5 14.4 Gross national savings ci 11.3 11.0 9.6 5.6 7.8 10.7 10.4 11.2 13.5 14.5 Memorandum items Gross domestic product 4757 4385 4564 4998 7164 7775 8277 8900 9548 10234 (US$ million at current prices) Gross national product per 502.2 450.6 459.6 488.2 686.0 722.1 755.6 796.2 828.6 871.8 capita (US$, Atlas method) Real annual growth rates (YO,calculated from 1987 prices) Gross domestic product at market prices 6.2% 3.0% 4.7% 1.1% 6.5% 6.2% 5.1% 5.1% 5.1% 5.1% Gross Domestic Income 4.5% 3.2% 5.2% 1.8% 5.7% 6.6% 4.5% 5.3% 6.9% 5.6% Real annual per capita growth rates (YO,calculated from 1987 prices) Gross domestic product at market prices 3.3% 0.4% 2.1% -1.3% 4.1% 4.0% 3.3% 3.2% 3.3% 3.2% Total consumption -0.2% -1.7% 5.4% 4.0% -0.1% 0.3% 2.2% 1.7% 2.5% 2.7% Private consumption -1.5% -4.4% 5.1% 5.3% -0.8% -0.5% 1.8% 2.8% 2.1% 2.5% 86 Annex 1: Key Economic Indicators (Cont'd) Indicator 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Balance of Payments (US$m) Exports (GNFS)b 1465.5 1309.7 1402.4 1527.4 2040.7 2158.7 225 1.6 2340.4 2608.7 2647.1 Merchandise FOB 1048.7 921.7 1004.0 1069.8 1404.8 1495.2 1602.0 1706.8 1774.1 1844.2 Imports (GNFS)b 1805.7 1746.1 1843.6 2084.8 2969.6 3 147.5 3333.0 3454.7 3603.2 3621.5 Merchandise FOB 1374.7 1339.9 1429.7 1608.9 2308.5 2524.3 2727.9 2910.0 2994.7 3078.1 Resource balance -340.2 -436.4 -44 1.2 -557.4 -929.0 -988.8 -1081.3 -1 114.3 -994.6 -974.4 Net current transfers 159.3 252.2 304.7 374.2 600.8 698.1 688.4 712.3 728.5 752.7 (including official current transfers) Current account balance -178.6 -200.8 -127.5 -209.0 -352.4 -383.1 -500.7 -537.4 -516.1 -494.9 (after official capital grants) Net private foreign direct 142.5 62.4 39.0 44.2 55.8 111.0 113.1 143.6 152.4 159.7 investment Long-term loans (net) 128.3 153.1 122.7 241.3 305.7 250.5 259.6 258.8 308.7 199.2 Official -41.4 12.0 85.2 115.8 121.0 184.4 171.8 144.4 69.1 11.0 Private 169.7 141.1 37.5 125.5 184.7 66.1 87.8 114.4 239.6 188.2 Other capital (net, including -94.0 -85.9 -13.6 19.0 315.4 -32.6 -58.5 -39.4 -41.2 -24.7 errors and omissions) Change in reservesd 1.8 71.2 -20.6 -95.5 -324.4 54.2 186.6 174.4 96.1 160.8 Memorandum items Resource balance (% of -7.2% -10.0% -9.7% -1 1.2% -13.0% -12.7% -13.1% -12.5% -10.4% -9.5% GDP at current market prices) Real annual growth rates (YR87 prices) Merchandise exports (FOB) 4.9% -13.0% 10.2% 6.4% 31.0% 6.4% 7.4% 6.5% 3.9% 4.0% Primary -4.4% -15.9% 14.7% 10.2% 8.4% 1.1% 6.6% 3.2% 3.6% 3.8% Manufactures -7.0% -1.8% 5.2% -0.1% 35.0% 1.3% -2.1% 0.3% 0.1% -0.2% Merchandise imports (CIF) 1.4% -6.4% 12.3% 11.5% 44.4% 13.2% 8.9% -10.1% 4.3% 4.4% a. If GDP components are estimated at factor cost, a footnoote indicating t'Data-YR fact should be added. b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use of IMF resources. e. Should indicate the level of the government to which the data refer. f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation. 87 Annex 2: Key Social Indicators Latest sinale Year Same reaionlincome grow ~ Sub-Saharan 1975-80 1985-90 1998-04 Africa Low- income POPULATION Total population, mid-year (millions) 5.5 7.3 10.5 719.0 2,338.1 Growth rate (% annual average for period) 2.8 2.8 2.4 2.2 1.8 Urban population (Yo of population) 35.7 40.0 49.6 36.7 30.7 Total fertility rate (births per woman) 6.8 6.2 4.9 5.2 3.6 POVERTY (% of population) National headcount index 57.1 Urban headcount index Rural headcount index 65.2 INCOME GNI per capita (US$) 530 720 680 600 51 0 Consumer price index (1 995=100) 41 72 114 Food price index (1995=100) INCOMElCONSUMPTlON DISTRIBUTION Share of income or consumption Gini index Lowest quintile (% of income or consumption) Highest quintile (Yo of income or consumption) SOCIAL INDICATORS Public expenditure Health (YOof GDP) 0.7 2.0 2.6 1.5 Education (YOof GNI) 3.4 3.2 Social security and welfare (% of GDP) 1.4 Net primary school enrollment rate (% of age group) Total 37 48 58 64 78 Male 44 57 66 68 82 Female 30 39 60 60 76 Access to an improved water source (% of population) Total 72 72 58 75 Urban 90 90 82 89 Rural 50 54 45 69 Immunization rate (% of children ages 12-23 months) Measles 51 60 61 66 DPT 51 54 59 67 Child malnutrition (% under 5 years) 22 23 44 Life expectancy at birth (years) Total 44 50 52 46 58 Male 43 48 51 45 57 Female 48 52 54 46 59 Mortality Infant (per 1,000 live births) 128 90 78 101 79 Under 5 (per 1,000) 21 a 148 137 171 122 Adult (15-59) Male (per 1,000 population) 586 488 355 51 9 317 Female (per 1,000 population) 51 6 399 303 461 266 Maternal (Der 100.000 live births) 690 24 538 Births attended by skilled health staff (%) AI.. 41 .. 39 38 CAS Annex 85. This table was produced from the CMU LDB system Note: 0 or 0.0 means zero or less than half the unit shown. Net enrollment rate: break in series between 1997 and 1998 due to change from ISCED76 to ISCED97. Immunization: refers to children ages 12-23 months who received vaccinations before one year of age, 88 Annex 3: Key Exposure Indicators Estimate 2001 2002 2003 2004 Total debt outstanding and disbursed (TDO) (US$m)" 3665 4121 Net disbursements (USSm)" 196 198 Total debt service (TDS) 213 219 244 (US$m)" Debt and debt service indicators (%) TDO~XGS~ 205.3 209.8 TDOiGDP 80.3 82.5 TDSIXGS 12.0 11.2 8.3 ConcessionaliTDO 75.0 75.5 IBRD exposure indicators (%) IBRD DSipublic DS 0.8 0.0 0.0 Preferred creditor DS/public 47.1 47.7 45.2 DS (%)' IBRD DSiXGS 0.1 0.0 0.0 IBRD TDO (US$rnld n n Of which present value of guarantees (USSm) Share of IBRD portfolio (%) 0 0 0 0 IDA TDO (US$mId 1384 1578 1806 2040 IFC (US$m) Loans Equity and quasi-equity ic MIGA a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net short- term capital. b. "XGS" denotes exports of goods and services, including workers' remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the Bank for International Settlements. d. Includes present value of guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments. 89 Annex 4: Balance of Payments (In billion of CFA francs) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Current account -168.3 -195.3 -156.1 -206.6 -244.8 -269.7 -331.4 -356.4 -354.8 -350.8 Balance on goods -200.4 -297.0 -311.7 -374.6 -469.9 -533.3 -591.1 -631.7 -640.8 -647.8 Exports, f.0.b. 644.8 654.5 735.3 743.3 730.5 774.8 841.1 896.1 931.4 968.2 Imports, f.0.b. 845.3 951.5 1047.1 1117.9 1200.5 1308.1 1432.1 1527.8 1572.2 1616.0 Services and income (net) -65.8 -77.4 -67.4 -92.0 -87.2 -98.2 -101.8 -98.7 -96.5 -98.1 Credits 307.6 336.3 341.0 364.9 400.1 400.8 416.6 433.6 451.2 469.5 Debits 373.4 413.7 408.4 457.0 487.3 499.0 5 18.4 532.4 547.8 567.6 Current transfers (net) 97.9 179.1 223.1 260.0 312.4 361.7 361.4 374.0 382.5 395.1 Private (net) 21 50.7 115.1 172.8 192.2 241.0 287.2 297.2 308.9 321.1 333.8 Public (net) 47.2 64.0 50.3 67.8 71.4 74.6 64.2 65.1 61.3 61.3 of which budgetary grants 4.1 14.1 0.0 1.9 18.9 18.5 11.5 16.0 16.3 16.3 Capital and financial account 207.3 176.7 217.8 315.8 458.9 293.8 281.9 306.1 341.6 294.4 Capital account 61.0 55.2 85.3 66.4 66.9 76.6 74.1 79.8 89.9 96.9 Private capital transfers 2.5 2.5 2.1 5.9 6.8 7.1 7.5 7.8 8.2 8.7 Project grants 58.5 52.7 61.7 60.2 60.1 69.5 66.6 71.9 81.7 88.2 Debt cancellation 0.0 0.0 21.5 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Financial account (incl errors and omissions) 146.3 121.5 132.6 249.4 392.0 217.1 207.9 226.3 251.7 197.5 Direct investment 87.6 44.3 28.6 30.7 29.0 57.5 59.4 75.4 80.0 83.8 Portfolio investment -10.2 9.8 10.2 2.1 12.8 10.5 18.7 22.0 16.9 16.9 Other investment 76.3 106.3 96.1 170.8 153.3 126.6 129.8 129.0 154.8 96.9 Public sector (net) 28.5 26.0 54.9 42.7 20.1 36.7 46.5 33.0 55.3 62.0 Of which: disbursements 82.1 88.0 108.2 112.6 91.3 158.6 174.7 164.1 186.0 199.7 Program loans 0.0 37.1 60.6 42.2 0.0 13.1 41.5 31.9 34.2 36.5 Project loans 80.2 41 .O 42.7 70.5 90.8 143.5 132.2 132.2 151.9 163.1 Other 1.9 9.9 4.9 -0.1 0.5 2.0 1.o 0.0 0.0 0.0 amortization -53.5 -62.1 -61.6 -79.0 -72.3 -125.8 -129.1 -132.0 -131.7 -138.6 Private sector (net) 47.8 80.3 41.1 128.1 133.2 89.9 83.2 95.9 99.5 34.9 Errors and omissions -7.4 -38.9 -2.3 45.8 196.9 22.5 0.0 0.0 0.0 0.0 Overall balance 39.0 -18.6 61.8 109.2 214.1 24.0 -49.5 -50.4 -13.2 -56.4 Financing -39.0 18.6 -61.8 -109.2 -214.1 -24.0 49.5 50.4 13.2 56.4 Net foreign assets (BCEAO) -20.1 19.2 -72.3 -71.0 -213.9 -125.5 -53.0 -33.5 -57.3 -16.2 Net use of Fund resources -8.1 -2.6 -1.7 -13.3 -19.9 -23.3 -21.5 -9.7 -18.7 -14.0 Purchases 12.0 13.4 21.7 8.1 2.8 2.7 2.7 10.9 0.0 0.0 Repurchases -20.1 -16.0 -23.3 -21.4 -22.7 -26.0 -24.2 -20.6 -18.7 -14.0 Operations account and other -12.0 21.8 -70.6 -57.7 -194.0 -102.2 -3 1.4 -23.8 -38.6 -2.2 Deposit money banks -32.5 -3.9 -8.6 -56.2 -40.1 0.0 -10.0 -10.5 -11.0 -11.5 Payments arrears (reduction -) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Exceptional financing 13.6 3.3 19.1 18.0 39.9 101.5 112.4 94.4 81.4 84.1 Residual financing gap 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 90 Annex 5: Operations Portfolio (IDA and Grants) Last PSR Supervision Rating Project ID Project Name Development Implementation Fiscal IDA GRANT Cancel. Undisb. Obiectives Progress Year PO69207 Casamance Emerg Reconstr Supt MS MU 2005 20 17.5 PO73477 Elec Sec Eff. Enhamphase 1 S S 2005 15.7 14.1 PO8 5708 Elec. Serv. for Rural Areas S S 2005 29.9 26.4 PO58367 GEF Intg Marine Cstl Res Mgmt S S 2005 5.3 0.3 4.6 PO70530 GEF Rural Areas Elec Srvc S S 2005 5.0 4.8 PO86480 GIRMAC SIL S S 2005 10 8.1 PO74059 HIV/AIDS Prevent & Control MS MS 2002 30 15.1 APL PO41528 Long Term Water Sec SIL S S 200 1 125 62.9 PO7054 1 Nurition Enhancement Prgm S S 2002 14.7 1.8 PO5 1609 Priv Inv Promotion SIL S S 2003 46 37.9 pogo013 Priv Sec Adj Crdt U U 2004 45 28.1 PO41566 SOCDev Fund APL S S 2001 30 2.4 PO02366 Transp SIL 2 S S 1999 90 19.7 Po j 5472 Urb Mobility Improvement APL MS S 2000 70 41.6 Overall 526.3 10.3 0.3 284.9 91 Annex 6: Statement of IFC’s Disbursed Portfolio As of 12/31/2005 (In US Dollars Million) Held Disbursed FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1996 AEF SERT 0 0.15 0 0 0 0.15 0 0 1997 AEF SERT 0 0.02 0 0 0 0.02 0 0 1980 BHS 0 0.46 0 0 0 0.46 0 0 1999 Ciments du Sahel 10.73 2.26 2.92 0 10.73 2.26 2.92 0 1997 GTI Dakar 10.12 1.67 0 8.93 7.4 1.51 0 8.93 1998 GTI Dakar 1.51 0 0 0 1.48 0 0 0 2005 Kounoune 20.26 0 0 0 0 0 0 0 2001 SEF Royal Saly 1.32 0 0 0 1.32 0 0 0 Total Portfolio: 43.94 4.56 2.92 8.93 20.93 4.4 2.92 8.93 92 Annex 7: IMF Relations Note IMF Executive Board Completes Third and Fourth Reviews Under Senegal's PRGF Arrangement and Approves US$20.0 Million Disbursement Press Release No. 06/06 January 10,2006 The Executive Board of the International Monetary Fund (IMF) has completed the third and fourth reviews of Senegal's economic performance under an SDR 24.3 million (about US$35.1 million) Poverty Reduction and Growth Facility (PRGF) arrangement. The three-year PRGF arrangement was approved on April 28, 2003 (E Press Release No. 03/62).The completion of the reviews enables a further release of an amount equivalent to SDR 13.9 million (about US$20.0 million) The disbursement brings Senegal to the maximum amount available under the arrangement. In completing the reviews, the Board also granted a waiver for the nonobservance ofperformance criteria. Senegal was one of 19 countries recently granted 100 percent relief on all obligations to the IMF incurred before January 1, 2005 (see Press Release No. OY302). Total debt relief granted to Senegal amounts to approximately US$144.9 million, including relief under the Heavily Indebted Poor Countries Initiative. Excluding HIPC relief, the relief amounts to US$136.9 million and will be effective in early January 2006. Following the Board discussion of Senegal, on January 9, 2006, Mr. Agustin Carstens, Deputy Managing Director and Acting Chair, stated: "The Senegalese authorities are to be commended for maintaining robust economic growth and low inflation in 2005 despite higher world oil prices. The fiscal deficit and government indebtedness remain at sustainable levels, and progress in structural reforms has continued. Going forward, full implementation of the reform agenda will be critical to sustaining donor support and achieving the Millennium Development Goals. "The authorities are strongly committed to implementing their program of economic and financial policies geared toward growth and poverty reduction. The fiscal program for 2006 allows for a modest increase in expenditure, keeps the investment outlays in line with the absorptive capacity of the economy and foreign financing, and aims at a realistic revenue target. The authorities should allocate more resources to the health and social service sectors in the2006 supplementary budget, taking advantage ofthe resources made available through the Multilateral Debt Relief Initiative. "Progress in strengthening public expenditure management and enhancing fiscal transparency and governance is crucial to raise the efficiency of public outlays and the economyk growth potential. In particular, more needs to be done to improve investment planning, evaluation, and monitoring further; fully implement transparent procedures introduced for the construction ofthe new airport; and strictly enforce the new procurement code. "Sustained economic growth and poverty reduction will also require further progress in structural reforms, particularly in the public enterprise sector. To rehabilitate the chemical company, ICs, the government should press for cost cutting, management improvements, and capital injection by private partners. The financial situation ofthe state electricity company, SENELEC, should be strengthened, 93 by adhering to the market-oriented electricity formula for setting electricity prices, with safeguards to protect poor households. The authorities should consider rescinding the new regressive tax aimed at protecting the recently privatized groundnut processing company, SONACOS, from foreign competition. "Efforts should continue to enhance the soundness ofthe banking sector, and priority actions identified in the action plan should be taken expeditiously. This will also require strengthened coordination at the regional level," Mr. Carstens said. The PRGF is the IMF's concessional facility for low-income countries. PRGF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a Poverty Reduction Strategy Paper, or PRSP. This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies, to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5%- year grace period on principal payments. 94 Annex 8: Country at Glance (includes country map) Sub- POVERTY and SOCIAL Saharan Low- Development diamond' Senegal Africa Income 2004 Population. mid-year (millions) 10.5 719 2,338 Life expectancy GNi per capita (Atlas method, US$) 670 600 510 GNi (Atlas method, US$ billions) 7.0 432 1,184 Average annual growth, 1998-04 TI Population (%) 2.4 2.2 1.a GNi Gross Labor force (%J 2.6 1.o 2.1 per t- primar) Most recent estimate (latest year available, 1998-04) capita enrollmenl Poverty (% of population below national povefty line) Urban population (% of total population) 50 37 31 Life expectancy at birth (years) 52 46 58 I Infant mortality (per 1,000 live births) 78 101 79 Child malnutrition (% ofchildren under 5) 23 44 Access to improved water source Access to an improved water source (% ofpopulation) 72 58 75 Literacy (% ofpopulation age 15+) 39 65 61 m- Gross primary enrollment (% of school-age population) 80 95 94 Senegal Male 83 102 101 Low-income group Female 77 88 88 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1984 1994 2004 2003 Economic ratios' GDP (US$ billions) 2.3 3.6 6.5 7.7 Gross capital formationlGDP 12.8 18.5 20.1 21.0 Trade Exports of goods and sewices/GDP 36.6 34.9 28.4 27.8 Gross domestic savings/GDP 0.7 11.8 8.0 10.0 Gross national savingsiGDP -5.0 13.5 16.3 16.8 Current account balance/GDP -1 7.9 -5.0 -8.0 -6.5 Domestic Capital Interest payments/GDP 2.5 1.7 1.1 savings formation Total UebWGDP 94.3 100.8 68.1 Total debt serviceiexports 16.6 16.7 8.3 Present value of debWGDP 29.5 Present value of debWexports 65.5 Indebtedness 1984-94 1994-04 2003 2004 2004-08 (average annual growth) GDP 2.1 5.0 6.5 6.0 5.9 -Senegal GDP per capita -0.6 2.3 4.0 3.8 3.9 Low-Income group EX~OI~Sof goods and services 2.2 6.1 0.5 3.7 5.4 Growth of capital and GDP (X) (% of GDP) 45 Agriculture 16.9 18.8 16.8 17.0 Industry 17.0 21.0 21.2 21.2 3o Manufacturing 12.1 14.4 12.8 12.6 15 Services 66.0 60.2 62.0 61.8 Household final consumption expenditure 80.8 75.4 77.4 75.7 -15 General gov't final consumption expenditure 18.5 12.8 14.6 14.3 -GCF -GDP Imports of goods and services 48.7 41.6 40.5 38.8 1984-94 1994-04 2003 2004 Growth of exports and imports (Oh) (average annual growth) Agriculture 1.7 2.4 19.2 8.4 2o T industry 3.0 6.9 4.6 6.9 Manufacturing 2.7 6.0 0.3 5.9 Services 1.9 5.2 4.1 5.0 General gov't final consumption expenditure 0.9 8.3 8.3 4.3 -101 - Gross capital formation 4.2 10.4 16.4 12.4 -Exports *Imports Note: 2004 data are preliminary estimates. This table was produced from the Development Economics LDB database. * The diamonds show four key indicators in the Country (in bold) compared with its income-group average. if data are missing, the diamond will be incomplete. 95 Annex 8: Country at a Glance (Cont'd) PRICES and GOVERNMENT FINANCE 1984 1994 2003 2004 Domestic prices (% change) Consumer prices 12.3 32.0 0.0 0.8 Implicit GDP deflator 12.6 27.8 0.9 1.4 Government finance (% of GDP, includes current grants) Current revenue 19.1 18.3 19.6 19.4 Current budget balance -1 .o 2.6 5.5 5.6 Overall surplus/deficit -5.0 -2.7 -3.0 -4.4 TRADE 1994 2003 1984 2004 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) 598 791 1,332 1,580 Groundnut products 125 89 61 72 3'000 T Phosphates 56 117 168 205 Manufactures 181 201 304 343 Total imports (cif) 931 1,161 2,247 2,574 Food 252 293 410 473 Fuel and energy 258 142 387 421 Capital goods 108 154 325 378 98 99 00 01 02 03 Export price index (2000=100) 73 107 99 99 Exports Imports Import price index (2000=100) 58 100 93 89 rn O4 Terms of trade (2000=100) 125 107 107 112 I BALANCE of PAYMENTS 1984 1994 2003 2004 Current account balance to GDP (%) (US$ millions) I Exports of goods and services 908 1,272 2,137 2,159 Imports of goods and services 1,193 1,515 3,110 3,147 Resource balance -285 -243 -973 -989 Net income -127 -142 -174 -139 Net current transfers -7 204 629 628 Current account balance -41 8 -181 -517 -500 Financing items (net) 416 256 526 321 Changes in net reserves 2 -75 -9 179 Memo: Reserves including gold (US$ millions) 13 190 832 855 Conversion rate (DEC, local/US$) 437.0 555.2 581.2 528.3 EXTERNAL DEBTand RESOURCE FLOWS 1984 1994 2003 2004 :omposition of 2003 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 2,203 3,673 4,419 IBRD 76 44 0 G. 156 IDA 199 1,005 1,806 F' 84 Total debt service 162 234 244 IBRD 10 15 0 IDA 3 13 24 Composition of net resource flows Official grants 126 476 156 Official creditors 167 17 104 Private creditors -6 -9 1 Foreign direct investment (net inflows) 29 67 78 Portfolio equity (net inflows) 0 1 0 World Bank program Commitments 34 32 46 4 - IBRD E. Bilateral Disbursements 29 54 107 B - IDA D - Other multilateral F . Private Principal repayments 6 16 13 2 - IMF G .Short-term Net flows 23 38 95 Interest payments 8 12 12 Net transfers 16 26 83 Note This table was produced from the Development Economics LDB database. 96 MAP SECTION IBRD 33475 N N ° ° 14 12 MALI Saraya Saraya o T To Balake Balake o W SELECTED CITIES AND TOWNS REGION CAPITALS CAPITAL NATIONAL RIVERS MAIN ROADS RAILROADS REGION BOUNDARIES BOUNDARIES INTERNATIONAL T To ° dougou Kayes Kayes é SENEGAL Kédougou K é Falém é This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, the part of The World Bank Group, any judgment on the legal status of territory, or endorsement or acceptance of such boundaries. 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