ACRONYMS AND ABBREVIATIONS
Transcription
ACRONYMS AND ABBREVIATIONS
Public Disclosure Authorized Document of The World Bank Public Disclosure Authorized Report No: 34447-BF SIMPLIFIED IMPLEMENTATION COMPLETION REPORT (IDA-3900) ON A CREDIT IN THE AMOUNT OF SDR 40.9 MILLION (EQUIVALENT US$ 60 MILLION) Public Disclosure Authorized Public Disclosure Authorized TO BURKINA FASO FOR A POVERTY REDUCTION SUPPORT CREDIT (4) December 28, 2005 Poverty Reduction and Economic Management 4 AFC15 Africa Region Currency Equivalents (as November 30, 2005) Currency Unit = CFA franc (CFAF) US$1 = CFAF XXX Fiscal Year January 1- December 31 ACRONYMS AND ABBREVIATIONS AAP AFD AfDB ARTEL BCEAO CAS CAS-PR CEM CFAA CFAF CID CIE COGES CONAGESE CPAR CSPS CRA DAAF DCMP DEP DGB DGE DGCOOP DGTCP DHS DSA EMP EU GDP GNP GTZ HIPC IDA IFC IGE IGF HIPC Accountability Assessment and Action Plan French Development Agency African Development Bank Telecommunication Regulatory Agency Central Bank of West African States Country Assistance Strategy Country Assistance Strategy Progress Report Country Economic Memorandum Country Financial Accountability Assessment Franc of the African Financial Community Computerized Expenditure Circuit Government Integrated Accounting Software Health Management Committee National Council for Environmental Management Country Procurement Assessment Report Community Health Centers Regional Agricultural Chambers Directorate of Administrative and Financial Affairs Central Directorate for Public Procurement Directorate for Planning and Studies Directorate General for the Budget Directorate General for the Environment Directorate General for International Cooperation Directorate General of the Treasury and Public Accounts Demographic and Health Survey Debt Sustainability Analysis Environmental Management Plan European Union Gross Domestic Product Gross National Product German Corporation for Technical Cooperation Heavily Indebted Poor Countries International Development Association International Finance Corporation General State Inspectorate General Finance Inspectorate -2- IMF INSD JSA LDP MDG MEBA MEDEV MFB MTEF ONAPAD ONATEL OPA PAMS PAP PER PDDEB PNDS PNDSA PNGT PRGB PRGF PRSC PRSP PRSP-PR ROSC SAC SECAC SDR SIGASPE SONABEL SONABHY SP-PPF STC-PDES TOD TOFE UNDP WAEMU WHO International Monetary Fund National Institute of Statistics and Demography Joint Staff Assessment Letter of Development Policy Millennium Development Goal Ministry of Basic Education Ministry of Economy and Development Ministry of Finance and Budget Medium-Term Expenditure Framework National Poverty and Development Observatory National Telecommunication Company Producer Organization Poverty Analysis Macroeconomic Simulator Priority Action Plan Public Expenditure Review Ten-year Basic Education Development Plan National Health Care Development Plan National Program for the Development of Agricultural Services National Program for the Management of Territory Budget Management Reform Plan Poverty Reduction and Growth Facility Poverty Reduction Support Credit Poverty Reduction Strategy Paper Poverty Reduction Strategy Paper Progress Report Report on the Observance of Standards and Codes Structural Adjustment Credit Sectoral Adjustment Credit Special Drawing Rights Budget Payroll Management System National Electric Power Company National Petroleum Product Distribution Company Permanent Secretariat for the Supervision of Financial Policies and Programs Technical Secretariat for the Coordination of Social and Economic Development Programs Decentralization Laws Government Financial Operation Table United Nations Development Program West African Economic and Monetary Union World Health Organization -3- Table of Contents 1 Program Data ............................................................................................................................................................... 5 2. Principal Performance Ratings................................................................................................................................... 6 3. Program Description.................................................................................................................................................... 6 4. Achievement of Objectives and Outputs .................................................................................................................... 7 5. Major Factors Affecting Implementation and Outcome ........................................................................................ 10 6. Bank and Borrower Performance ............................................................................................................................ 11 7. Findings and Implications for Subsequent Operation(s) in Series ........................................................................ 12 Appendix 1 : Government contribution............................................................................................................................. 13 Appendix 2: Measures taken before PRSC-4 and progress to date ................................................................................ 19 Appendix 3: Burkina Faso: Selected Economic Indicators.............................................................................................. 27 Appendix 4 : PRSC-4, 5 and 6 results indicators.............................................................................................................. 28 -4- Simplified Implementation Completion Report Poverty Reduction Support Credit (4) Project ID: P078994 Project Name: Poverty Reduction Support Credit (4) Team Leader: Siaka Coulibaly TL Unit: AFTP4 ICR Type: Simplified Report Date: December 28, 2005 1 Program Data Name: Country/Department: Poverty Reduction Support Credit 4 Burkina Faso Sector/subsector: Health (20%); Telecommunications (15%); Gen. Energy Sector (15%); Primary Education (15%). Health system performance (p); State Enterprise/bank restructuring and privatization (s); Education for all and (s); Administrative and civil service for all (s). Theme: L/C Number: Region: IDA 3900 Africa KEY DATES PCD/PR: Appraisal: Approval: 01/12/2004 03/30/2004 05/11/2004 Borrower/Implementing Agency: Other Partners: STAFF Vice President: Country Director: Sector Manager: Team Leader at ICR: ICR Primary Author: Effective: MTR: Closing: Original 07/21/2004 06/30/2005 Burkina Faso Ministry of Finance and Budget Current Gobind T. Nankani Diarietou Gaye (acting) Robert Blake Siaka Coulibaly Siaka Coulibaly -5- At Appraisal Callisto Madavo A. David Craig Robert Blake Jan Walliser Revised/Actual 2. Principal Performance Ratings (focused on this operation’s contribution toward overall program objectives) (HS=Highly Satisfactory, S=Satisfactory, MS= Moderately Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: Risk to Development Outcome Institutional Development Impact: Bank Performance: Borrower Performance: S M M S MS QAG (if available) Quality at Entry: Operation at Risk at Any Time: 3. ICR S N Program Description Overall Program 1. PRSC-4 is the fourth in a series of operations supporting the implementation of the PRSP of Burkina Faso since 2001.1 PRSC-4 builds on the reform agenda supported by its three predecessors in the areas of public sector reform, governance and pro-poor sectoral policies, but was also designed as an interim operation at the juncture between the original PRSP and the revised PRSP. The latter was presented at a donor round table on March 4-5, 2004 and was subsequently discussed by the Executive Board in May 2005. As with the original PRSP, the revised PRSP has four strategic pillars: (i) accelerating broad-based growth; (ii) promoting access to social services; (iii) increasing employment and income-generating activities for the poor; and (iv) promoting good governance. In addition, the revised PRSP introduces a Priority Action Program, including a results framework based on selected outcome indicators. PRSC-4 description 2. PRSC-4 in the amount of SDR 40.9 million, equivalent to US$60 million, was approved in May 2004. It is an integral part of the Bank’s assistance strategy for 2003-04 presented in the Country Assistance Strategy progress report (CAS-PR).2 PRSC-4 and its two successors (PRSC-5 and PRSC-6) were designed to support the implementation of the revised PRSP in 2004-2006. PRSC-4 has three components consistent with the PRSP pillars. The first component is related to growth, and income creation, and includes reforms in the cotton, telecommunication, and energy sectors, and labor market reforms. The objectives are to lower factor costs, increase productivity and favor new investments. The second component of the credit includes policies in the education, health, and water sectors to build infrastructure, lower the cost of services, improve service quality, and reinforce monitoring and evaluation. The third component encompasses policy measures to strengthen budget execution, procurement, budget control, public sector performance, decentralization, and environmental management. 1 Burkina Faso: Poverty Reduction Support Credit–Report No. P7477-BUR (July 2001); Burkina Faso: Second Poverty Reduction Support Credit–Report No. 24310-BUR (June 2002); and Burkina Faso: Third Poverty Reduction Support Operation–Report No. 25782-BUR (June 2003). 2 Burkina Faso: Country Assistance Strategy Progress Report–Report No. 25458-BUR (March 2003). -6- 4. Achievement of Objectives and Outputs Outcome 3. Overall, satisfactory progress has been made under PRSC-4. However, given the structural and institutional nature of the reforms, their impact on key program indicators will only be realized in the long term once the reforms are completed and stabilized. The ICR for PRSC-6, the last in this series of three operations, will provide a more thorough review and documentation of results in terms of medium-term indicators and Poverty Reduction Strategy Paper (PRSP) objectives. In addition, the results presented below cannot be attributed only to the PRSCs. Other policy actions not covered by the PRSCs are also contributing factors. Nevertheless, one of the innovations introduced with the second series of PRSCs in Burkina Faso is the adoption of a more detailed results framework for the monitoring and evaluation of PRSCs impact. The monitoring indicators were derived from the government’s PRSP Priority Action Plan. With these reservations in mind, key results achieved under PRSC-4 included: (i) contribution to macroeconomic stability, (ii) progress in implementation of structural reforms, (iii) progress in social sector. A more detailed account of achievements by component is presented below. Appendices [2] and [4] provides a comprehensive view of PRSC-4 achievements. Macroeconomic stability 4. Macroeconomic stability is a key objective clearly announced in Burkina Faso’s PRSP. Macroeconomic stability not only contributes to growth promotion, but it is also a strong conditionality on macroeconomic tranches for quite a few of budget support donors. The assessment by the IMF in the framework of the PRGF is therefore a pre-requisite for the disbursement of a large amount of budget support. In contributing to the financing of the public deficit and aligning the disbursement with the budget cycle, PRSC-4 contributed to macroeconomic stability in Burkina in 2004. 5. The IMF approved a new three-year program supported under the PRGF in June 2003. The fourth review of the program has been conducted in June 2005 and was considered by the IMF’s Executive Board on September 7, 2005, indicating that economic performance in 2004 was relatively strong, despite the adverse external shocks that emerged in the second half of the year, notably the sharp decline in world cotton prices and the increase in world oil prices. Economic growth remained robust at 4.6%, inflation was low (-0.4 %). External and fiscal deficits were kept at levels consistent with available concessional financing (see Appendix [3] on selected macroeconomic indicators). However, these results are still fragile, and Burkina remains vulnerable to exogenous shocks. The sharp decline in Burkina Faso's terms of trade has reduced economic growth prospects for 2005, and presents the authorities with substantial challenges. The authorities' program strikes an appropriate balance between the need for fiscal restraint in the face of this shock and the need to push ahead with priority expenditures in support of the poverty reduction strategy. Revenues have been in line with the authorities' target and expenditures have remained oriented toward key social services, notably health and education, as well as growth and productivity-enhancing capital investments. The fifth review of the current PRGF arrangement took place on November 30th to December 15th 2005. Growth and income creation 6. Overall, progress in this area was satisfactory as evidenced by continuous strong economic growth in 2003-2005. Two of the triggers pertaining to cotton and energy sectors that were not fully met at the time of appraisal were later completed without further consequences. Regarding cotton sector liberalization, the privatization of the central and eastern zones was successfully completed. The two new ginning companies (FASO COTON in the Centre and SOCOMA in the East) account for about 20% of cotton seed production. Since they have started operations in late 2004, the two companies are performing well. SOCOMA has built a new ginning plant with a capacity of 35,000 tons and is planning a second one in 2006. FASO COTON is -7- planning to move its plant from OUAGADOUGOU, the capital city of the country to a new area, KOMBISSIRI for environmental reasons. FASO COTON has improved productivity thanks to better provision of agricultural services to cotton growers. In the areas covered by FASO COTON, cotton yield is 1.25 tons compared with 1.00 tons in SOFITEX’s zone and less than 1 ton in SOCOMA’s zone. To face the competition brought into the sector by the new companies, SOFITEX is also improving its management. It has planned to build three new ginning plants in 2006 to cope with increased cotton production. Key reforms were also sought in other sectors, including telecommunication and energy sectors, as well as labor markets to complement or strengthen the existing projects. Regarding telecommunications, PRSC-4 has included the privatization of ONATEL, a stateown company as a trigger in order to speed up the reform which was already on the Competitiveness project agenda. Unfortunately the privatization process of ONATEL was delayed because of unfavorable terms for the privatization. No bid was received at the deadline of the biding period and the whole process was undermined. The Government has now decided to provide an outright majority to the new operator. A successful completion of the privatization is now expected as part of the next PRSC series. It would help extend the fixed network and improve the quality of services. Regarding energy sector reform, PRSC-4 tried to accelerate the existing reform in the energy project agenda by including the liberalization of energy sector as a trigger. The objective of this reform is to improve access to electricity and to reduce its price for improving the competitiveness of domestic firms and diversifying the economy. The government showed a strong commitment to move forward in the process by adopting a law which includes a reference to a regulatory agency for energy sector. But it had to face donors’ disapproval of the modifications made in the law. Donors blamed the government for having not been consulted during the revision of the law. As a consequence, the government had to start the whole process again. Regarding labor market reform, a new labor law was adopted in September 2004, but limited progress has been made in the preparation of implementation decrees because of resistance from unions. The government has planned a comparative study to find evidences for convincing the unions of the need for some changes. Access to basic services 7. Progress in social sectors is satisfactory. A rapid growth in basic education and an improvement in health indicators trend were observed. But, because of its initial conditions, Burkina Faso still faces challenges for achieving access of a large number of its population to basic services. Education 8. In the education sector, the PRSC-4 pursued reforms initiated under the previous operations through increasing budget share and deconcentration of budget execution. These measures have increased resources available for schooling at decentralized levels, which in turn has likely contributed to increases in primary enrolment, with annual gains of more than 4 percentage points. Two new measures have been introduced under the new series of PRSC: (i) to improve the quality of education, and (ii) to improve budget allocation between primary and secondary levels of education. Specifically, the PRSC-4 sought to improve the quality of education through: (i) increases in learning times, and (ii) the introduction of sub-grades. A survey on actual “time on task” which should have started under PRSC-4 has been delayed because of difficulties in mobilizing resource for the implementation of this operation. On the other hand, the introduction of sub-cycle system is effective. With regard to the preparation of a MTEF to ensure a better balance in the allocation of resources between primary and secondary levels, progress has been modest. A draft MTEF has been prepared but has covered only the primary level. The absence of sector strategy for Ministry of Secondary Education (MESSRS) and staff instability were the main constraints to the completion of this work. But, since June 2005, the government started the preparation a MTEF for the whole sector that will be delivered in February 2006. -8- Health 9. In the health sector, overall progress is satisfactory. The major constraints that limit the effectiveness of Burkina Faso’s health system include inadequate financial accessibility and quality of care. PRSCs have been the Bank’s main instruments to resolve these issues. Thus, the measures adopted within the framework of the PRSCs emphasized three reform measures. First, the PRSC encouraged the adoption of subsidized or free care for preventive services (including vaccination and prenatal care) and the reduction of the price of essential generic drugs. Progress at this level has been satisfactory. The verification of the price reduction measures determined under the previous PRSCs has been carried under PRSC-4 and their application is in effect although there is continued need for monitoring by Ministry of Health. Although, the impact of these measures on health center attendance will be felt in the long term, an improvement in health center attendance is already noticeable. Child vaccination coverage and prenatal care coverage have increased markedly since 2001, and the number of new contacts at health centers has increased from 0.27 contacts per capita to 0.32. Second, PRSC also encouraged the strengthening of primary health care centers with staff and increase to the operational budget at health district level. With regard to staffing, the PRSCs called for carrying out a study on human resources in the health sector, to address the current shortcomings in the distribution and motivation of health personnel, followed by the development of a specific Action Plan. A study on health worker motivation was completed in November 2003 (with support from WHO). The preparation of the action plan initially encountered delays, but was completed in early 2005. 10. Efforts have been made in the allocation of sufficient budgetary resources to the regions and improvements in their management. The ministry of health has increased the amount of delegated budget credits to regions and health districts by 10% annually, and the PRSCs support the introduction of new cash advance replenishment mechanism for health districts, which has encountered various administrative difficulties, but has helped improved liquidity at the district level. The preparation of a sector Medium Term Expenditure Framework (MTEF) for the health sector, in order to strengthen planning and rationalize sector resource allocation, was initiated under the PRSC-4. The process has been participative, but slow, and the first MTEF/health was only completed in mid-2005. The third and last reform measure is about strengthening the PNDS monitoring mechanism in effect. A monitoring committee has been established and a list of performance indicators has been adopted. The commission conducted its first review in August 2005. Water infrastructure 11. This is a new area introduced under the new series of PRSC to complement the health issues. Access to safe water is an important objective of the PRSP. The provision of safe water in Burkina Faso is made through two modalities. For urban and semi urban areas, there are networks for water distribution. For rural areas, the provision of water is made through drillings. The new series of PRSC has been supporting the provision of safe water in two ways. First, through the preparation of an action plan for achieving the MDGs in the water sector. The action plan was adopted but it has to be updated based on the results of the survey on water availability completed in November 2005. Second, through public-private partnerships promotion. Seven pilot publicprivate partnerships in water sector are underway. The lessons learnt from these experiences would allow the extension of the approach to other secondary water centers. Good governance Public Finance: 12. The government adopted the PRGB (plan de renforcement de la gestion budgétaire) action plan in 2002 to improve public finance management. The PRGB action plan covers eight objectives of which the most important include: (i) enhance the capacity of institutions in charge of budget management; (ii) improve the regulatory framework of budget management; (iii) improve the quality and transparence of the budget; -9- (iv) enhance budget monitoring and control; (v) deepen budget execution deconcentration; (vi) improve the sustainability of budget management softwares. The Bank has been supporting PRGB action plan implementation through the PRSCs. The first series of PRSCs helped to empower the Ministry of Finance for conducting PERs and preparing MTEFs. Now the PER process in Burkina is driven by the government and the preparation of a global MTEF is well established as well. An important outcome of the MTEF is the fact that the MTEF helped to better align the allocations of the budget with the PRSP priorities. Regarding the specific measures supported by PRSC-4, progress has been satisfactory. PRSC-4 focused on budget execution including procurement issues. Notable progress has been achieved in budget execution, specifically in the deconcentration of budget execution, as well as in procurement reforms. Now the budget can be spent in 8 regions without resorting to the center. A new procurement code and several texts for its implementation were adopted and enforced. A CPAR assessment was conducted in 2005 to update the reforms. An action plan is being adopted. 13. Decentralization is a new area of interest included in the new series of PRSC. Progress was slow in this area because of intense inter-ministerial discussions as regards the financial and human resource implications of the decentralization. New elections are scheduled for February 2006 and all the texts for operationalizing the decentralization have been drafted and a workshop held on December 6-7, 2005 adopted the final versions to be approved. The new series of PRSCs will place emphasis on decentralization. Environment 14. The implementation of the capacity building action plan launched at the beginning of the PRSC process continued with PRSC-4. Guidelines for Environmental Assessment were made available to 5 line ministries where environment cells were already established. Environmental evaluation was conducted for 4 IDA projects. 5. Major Factors Affecting Implementation and Outcome Design issues 15. PRSC-4 was anticipated in PRSC-3 with the understanding that the government would build a new PRSP framework; PRSC-4 then launched a new series of three operations for 2004-06. However, the challenge to the Bank team was that the operationalization of the PRSP remained an area of weakness given the split of MEDEV and MFB. The PRSP action plan was the basis for PRSC 4-6 but additional work by government was needed to make it operational and ultimately the Bank and the SP-PPF with some sector consultations had to put it into a PRSC frame to proceed in a consistent logical frame. In addition donor harmonization finally took off but the subsequent government’s decision to manage the process – although positive - ultimately delayed the development of a joint performance assessment framework until mid-2005. These developments imply that the programmatic series and the results framework for it had to be adjusted somewhat in PRSC-5 to provide clearer indicators and baseline for indicators that will allow to better measure progress made under the PRSP/PRSC/CGAB. Implementation issues: 16. There are three types of implementation issues: coordination issues, weak capacities of institutions and vested interests action. With respect to coordination issues, the Permanent secretary for policies and financial programs (SP-PPF) at the Ministry of Finance- generally provided excellent support for the implementation of PRSC agreed measures. Prior to supervision missions, the policy matrix was sent to line ministries to call for meetings with the PRSC team. The announcement of PRSC missions and invitations sent to implementation agencies helped to better prepare the evaluation of progress. Line ministries gathered relevant information for the mission to evidence progress, which make them feel more comfortable in the discussion with the PRSC team. But the coordination unit was not quite successful to preparing for the PRSC missions for three reasons. First, it was often overwhelmed by requests from several donors at the same time, which did not leave it with - 10 - enough room to focus on PRSC measures. Hopefully, the adoption of a unified framework for budget support – CGAB- in 2005 will cut down transaction costs for SP-PPF. Second, the split of ex-Ministry of Economy and Finance into two ministries, a Ministry of Finance and Budget on the one hand and a Ministry of Economy and Development on the other hand, resulted in coordination issues and lesser PRSP/PRSC experience with the newly established SP-PPF. This difficulty is now solved. Third, with respect to institutions capacities, several important reforms were delayed because of lack or weak capacity. For instance, weak capacity of Ministry of Finance, Ministry of Public Administration and Ministry of Decentralization in the design of resource (personnel and infrastructures) transfer mechanisms to local authorities delayed the decentralization agenda. Another example is the weak capacity of the Ministry of Energy and the Privatization Commission to conduct the process of energy sector liberalization even if Bank procedures (non objection) contributed later on to the delay. A third example is the weak capacity in most of line ministries regarding planning and budgeting which often resulted in lack of resources for the implementation of key reforms. Fortunately, SP-PPF came up with a provisional solution to solve this issue with a fungible budget line for all the ministries in such a position. The last example is related to the mobility of staff in line ministries. For instance, after being trained on MTEF, the director of financial administration and the director for studies and planning in the Ministry of Secondary Education were moved away. The new staffs appointed were not very familiar with MTEF. 17. Finally, reforms in telecommunication and energy sectors were delayed because of vested interests. Some government officials were not very keen for the privatization the telecom and electricity companies. Trade unions resistance has also impeded progress in labor code reforms as well. 6. Bank and Borrower Performance Bank Performance 18. Overall, Bank performance was satisfactory. First of all, despite the context of the revision of the PRSP the Bank managed to design the new series of PRSC which broadened the coverage of priority areas by including growth and employment generation and decentralization in the reform agenda. Second, the Bank succeeded to harmonize PRSC disbursements with the budget cycle which helped the government to better plan and manage expenditures commitments. Third, the Bank also organized supervision missions in time to help the implementation agencies meet the deadline for most of the triggers. Nevertheless, there are still shortcomings in the functioning of Bank teams for many reasons. First, because of their responsibilities for many other tasks, sector TTLs were not often available in due time to fully participate in PRSC preparation missions. Second, the implications of the new approach (budget support versus investment operation) should have brought in some improvements in the way Bank’s teams should work with the client. Bank sector teams should have assisted the government through a thorough policy dialogue on sector issues and strategies and program budgets preparation. They should have made sure that the priority programs in the sector are well funded and well managed. But, most of them remain focused on project implementation and are either not very familiar with budget issues or sufficiently engaged in dialogue during budget preparation. Burkina PRSC team envisioned to organize a workshop for TTLs on public finance issues. Government Performance 19. Although Burkina Faso has established a strong track record in implementing reforms, the government’s performance for this specific operation is moderately satisfactory. Positive developments can be reported in the implementation of the PRSCs. First, the role of PRSCs is increasingly understood by central and sectoral ministries. Second, the Ministry of Finance has established a good monitoring system of PRSC measures, and effectively conducted the negotiations of the credit. Third, several line ministries are now more familiar with the PRCSs and made relevant proposals for measures to be taken into account in the reform program for next operations. They also made efforts to meet the deadlines for the triggers. Nevertheless, there is - 11 - room for improving government performance in several areas. First, line ministries still need to understand that the resources provided through the PRSC are fungible and not earmarked. Consequently, they need to better plan activities and get them funded through the national budget. Second, PRSC-4 implementation encountered delays or setbacks in critical reforms. The failure to privatize the Telecommunication Company, ONATEL and delays in the liberalization of the energy sector are attributable to the government. Regarding ONATEL, had the government followed the advice provided by the Privatization Adviser (Banque d’affaires) and adopted an attractive strategy, the privatization of ONATEL would have been completed by now. Regarding the energy sector reform, a more consultative approach with key stakeholders, including donors could have prevented the government from revising repeatedly the law on energy sector reform. Other important areas where reforms were delayed included decentralization, the preparation of an MTEF for the education sector, the implementation of action plan for health personnel motivation. 7. Findings and Implications for Subsequent Operation(s) in Series 20 In assessing overall progress in the implementation of reforms sought under PRSCs, one should take into account the track-record established by a country. While three PRSC-4 triggers were not fully met at appraisal, the team proposed to approve the credit on the basis of the Government’s reform record and initial steps that were taken at that time. The decision proved correct as all measures were subsequently fully implemented, and the delays did not have adverse consequences. 21. One continuous lesson from PRSCs’ implementation in Burkina is the need for strengthening the PRSC-related sectoral dialogue by involving more actively line ministries as well as Bank sector teams. Currently, the latter are often overwhelmed by the preparation and supervision of several projects, and the transition from project to programmatic support has proved difficult. But if the PRSCs are to be successful operations, such transition should be made. In that respect, it is worth thinking of how to change the incentives structure to encourage the transition. A solution is to split and allocate upfront the PRSC administrative budget to sector teams which will be then hold accountable for the outcome in their respective sectors. This approach has been adopted with the preparation of PRSC-6. 22. An important issue is how Bank’s teams could get better involved in budget preparation whether formally or informally. The government has already expressed its concerns of the risk of undermining its ownership on budget preparation if it has to adopt a formal consultation with donors on the budget. The draft budget is always sent to all the donors at the same time the budget is submitted to the Parliament. But, this time is too late for Bank’s teams to have dialogue on sector budget. Bank’s teams should get involved in budget preparation when the line ministries are preparing their draft budget. In that respect, the initiative is left so far with each sector team to have consultation with his counterparts in the government on sector program budget. But so far, Bank’s teams did not fully engaged in budget preparation. A country team retreat may help to come up with practical solutions in that area. 23. An emerging lesson is the need to pay more attention to the effectiveness of parallel support projects. The Bank has sought to prepare capacity building projects and other development projects to accompany the implementation of reforms sought under the PRSCs. However, issues with these projects (ranging from poor coordination and procurement delays) have sometimes delayed the implementation of PRSC measures. Bringing the necessary changes will probably require revisions in assessing Bank’s performance under the PRSC, by including performance under associated projects as well. - 12 - Appendix 1 : Government contribution Ministère des Finances Et du Budget --------Cabinet Burkina Faso --------Unité – Progrès – Justice Rapport d’achèvement du quatrième Crédit d’Appui à la Stratégie de Réduction de la Pauvreté de la Banque Mondiale Novembre 2005 - 13 - Introduction Le CASRP 4 est la première opération d’une nouvelle série de trois opérations pour appuyer, à travers des aides budgétaires, la mise en œuvre de la stratégie de réduction de la pauvreté adoptée par le gouvernement du Burkina Faso en 2000 et révisée en 2004. Il soutient les objectifs du gouvernement de maintenir un environnement macro-économique sain et d’accélérer la croissance économique. En particulier, le CASRP 4 a visé à renforcer la gestion macroéconomique à court terme et la création d’un environnement économique et institutionnel favorable à la réduction de la pauvreté. Le CASRP a reposé de ce fait sur l’exécution d’un ensemble de mesures de politiques en vue d’atteindre les objectifs de réduction de la pauvreté. Les mesures de réformes retenues dans le programme sont tirées du programme d’action prioritaire du Gouvernement pour l’opérationnalisation du CSLP. Celles-ci ont été convenues de manière consensuelle entre la Banque Mondiale et la partie nationale et, dans le cadre du suivi régulier du programme, le CASRP 4 a fait l’objet de revues conjointes par les deux parties au cours de la période 2003-2004. Le CASRP 4 a été évalué au cours du premier trimestre 2004 et négocié au début du second trimestre, ce qui a permis d’organiser le processus de son approbation par les instances de la banque, sa mise en œuvre et la mobilisation des ressources en phase avec le cycle budgétaire. Ce quatrième financement, d'un montant de soixante millions (60.000.000) de dollars EU a été consenti essentiellement sous forme de dons. Ce rapport d’achèvement du CASRP 4 va s’articuler autour de trois principaux points. Il s’agira dans un premier temps de donner notre appréciation sur ce quatrième crédit, ensuite de faire une analyse de l’exécution des mesures du CASRP 4 et enfin de faire des propositions pour une meilleure gestion des CASRP futurs. I - Appréciation par la partie nationale du quatrième CASRP L’expérience des trois premiers CASRP a permis une nette amélioration de la mise en œuvre du quatrième CASRP 4. Le CASRP, cadre excellent pour le dialogue entre la Banque et le gouvernement, permet aussi d’assurer un programme macro économique en cohérence avec les politiques sectorielles. Il comporte un niveau de flexibilité satisfaisant dans la mesure où il permet : (i) sur la base d’actions « déclencheurs » un soutien continu sur le long terme ; (ii) au gouvernement de faire avancer les réformes à des rythmes variables selon les secteurs ; (iii) son évaluation se fait selon un cadre et un calendrier convenus à l’avance, son décaissement est rapide, en tranche unique et aligne avec le cycle budgétaire; (iv) le décaissement modulable du crédit par la Banque en cas de non réalisation à bonne date de certaines mesures « déclencheurs ». Le CASRP 4 a appuyé la mise en œuvre du CSLP, à travers les réformes visant une réduction continue de la pauvreté, confortant ainsi le gouvernement dans une meilleure appropriation des politiques et programmes. La participation effective des sectoriels leur permet de s’impliquer davantage dans le processus et leur assure une meilleure compréhension des enjeux du CASRP. Le CASRP 4 a néanmoins été confronté à des difficultés au cours de sa mise en œuvre. La difficulté principale réside dans le fait que l’instrument reste insuffisamment compris par certains acteurs impliqués dans sa mise en œuvre au niveau des ministères sectoriels, qui le perçoivent comme un projet ce qui traduit la non intégration des coûts de mise en oeuvre des mesures par les sectoriels au niveau de leur budget. Pour les ministères, le gouvernement doit mettre à leur disposition des ressources additionnelles au moment de l’exécution des mesures. La faiblesse des capacités (humaines et matérielles) et la non maîtrise des budgets programmes au niveau des ministères sectoriels constituent également des contraintes à la bonne mise en œuvre du CASRP. La faiblesse de l’appareil statistique national est restée un problème majeur, qui rend difficile l’accès aux statistiques et indicateurs requis pour l’appréciation des résultats. L’on note cependant une amélioration progressive de la production d’informations statistiques aussi bien en provenance de l’Institut National des Statistiques et de la Démographie (INSD) que des Directions des Etudes et de la Planification (DEP) et des Directions des Affaires Financières (DAF), mais des efforts restent toujours à faire dans ce domaine. - 14 - Le CASRP 4, approuvé en mai 2004 pour 60 millions de dollars EU, a permis d’enregistrer des avancées significatives dans de nombreux domaines. Les principales réalisations sont retracées dans la partie suivante. II - Réalisations du quatrième crédit d’appui à la réduction de la pauvreté Les crédits d’appui à la stratégie de réduction de la pauvreté étant des appuis budgétaires non ciblés, ils sont pris en compte dans le processus d’allocations budgétaires à travers les enveloppes sectorielles du CDMT. Ils contribuent donc à toutes les réalisations assurées par le budget. Les opérations du quatrième CASRP ont appuyé en grande partie une gestion budgétaire saine, une amélioration de la fourniture de services de base, notamment en matière d’éducation et de santé. Par ailleurs, elles ont contribué à stimuler les sources de croissance à travers des réformes structurelles pour la promotion du secteur privé et l’accroissement des investissements dans le secteur du développement rural. En vue d’approfondir les liens entre le CSLP et la matrice du CASRP, les mesures du CASRP 4, contrairement à celles des trois précédents, ont été regroupées sous trois grandes composantes, à savoir : (i) la croissance et la création d’emploi pour les axes 1 et 3 du CSLP ; (ii) le développement des ressources humaines pour l’axe 2 du CSLP et (iii) la bonne gouvernance pour l’axe 4 du CSLP. L’exécution du CASRP 4 a été satisfaisante dans l’ensemble et les progrès réalisés ont justifié la mise en œuvre de la suite de la série (CASRPs 5 et 6). La plupart des mesures programmées ont été mises en œuvre, et cela a permis d’obtenir des résultats significatifs dans tous les domaines du CSLP. Axe 1 : accélérer la croissance et la fonder sur l’équité La contribution du CASRP 4 à la réalisation des objectifs visés par cet axe du CSLP a consisté en la mise œuvre de mesures visant le renforcement du cadre macroéconomique en soutien au programme convenu avec le FMI d’une part, et d’autre part à l’amélioration du processus de formulation et d’exécution du budget avec notamment l’utilisation des Cades de Dépenses à Moyen Terme (CDMT) et des Revues des Dépenses Publiques (RDP) pour une plus grande cohérence entre le budget et les priorités du CSLP. Le CASRP 4 a soutenu l’Etat dans la poursuite de l’exécution de son programme de désengagement des secteurs de production, traduisant ainsi sa volonté à faire du secteur privé le moteur de la croissance économique. Ainsi, la privatisation du portefeuille résiduel de l’Etat a été poursuivie et de nouvelles actions visant la promotion du secteur privé ont été développées, contribuant ainsi à l’amélioration du cadre d’exercice des affaires. La concertation instaurée avec les partenaires du secteur privé a été renforcée pour rechercher de manière concertée les voies et moyens d’assouplir les formalités de création d’entreprises et d’améliorer l’environnement des affaires au Burkina Faso. Concernant particulièrement le secteur des télécommunications, après les phases de mise en place de l’organe de régulation et de l’ouverture du segment de la téléphonie mobile à deux opérateurs privés, le processus de privatisation de l’opérateur historique en occurrence l’ONATEL a été entamé. De même, la reforme du secteur de l’énergie a connu des avancées avec l’adoption par le gouvernement des options de structuration des sous secteurs de l’électricité et des hydrocarbures, ouvrant la voie pour le démarrage des travaux de renforcement des capacités de production thermique de la SONABEL (acquisition d’une centrale de 14 MGW) et du projet de l’interconnexion Bobo Dioulasso/ Ouagadougou. La libéralisation du secteur coton a également franchi une étape majeure avec l’installation de deux nouvelles sociétés cotonnières dans les zones du Centre et de l’Est. Axe 2 : promouvoir l’accès des pauvres aux services sociaux de base Les réformes entreprises dans le cadre du CASRP 4 ont contribué significativement au développement des ressources humaines, élément indispensable pour soutenir un développement économique durable. Ces réformes se sont surtout focalisées sur l’éducation et la santé dont les politiques sont bâties autour du Plan Décennal de Développement de l’Education de Base (PDDEB) et du Plan National de Développement Sanitaire (PNDS), qui sont deux éléments clés du CSLP. - 15 - Dans le domaine de l’éducation de base, le gouvernement a continué à allouer des ressources substantielles au secteur en vue d’accroître l’offre d’infrastructures et de recruter davantage d’enseignants pour rendre fonctionnelles les nouvelles salles de classes. Ces efforts ont rehaussé le niveau des différents indicateurs de l’éducation de base. Ainsi, le taux d’admission en première année a connu un bond de 13,7 points s’établissant à 66,6% en 2003. Le taux brut de scolarisation s’est inscrit à 52,3% en 2004-2005 contre 45,1% en 2002-2003. Le CASRP 4 a permis également de mettre en place les premiers éléments pour l’élaboration d’un CDMT sectoriel avec le MEBA et le MESSRS. De même, il a favorisé le lancement des réflexions sur l’augmentation du nombre d’heures d’enseignement. Concernant particulièrement l’orientation de la lettre de politique éducative du gouvernement, le CASRP 4 a soutenu: (i) la conduite de campagne de sensibilisation et de mobilisation sociale et la prise de mesures incitatives telles que l’obligation d’acceptation en première année de tout enfant remplissant les conditions d’accès, (ii) la distribution gratuite des manuels et fournitures dans les 20 provinces prioritaires, (iii) la dispense de frais de scolarité en première année pour les filles et la promotion des cantines assistées ou endogènes et, (iv) l’opérationnalisation du Fonds National d’appui à l’Alphabétisation et à l’Education Non Formelle (FONAENF). Dans le domaine de la santé de base, le mauvais état sanitaire et nutritionnel accentue le phénomène de la pauvreté au Burkina Faso dont il constitue à la fois une cause et une conséquence. Il en résulte une diminution de la productivité et des revenus des ménages. Parmi les autres facteurs associés à la pauvreté et contribuant à un mauvais état de santé des populations figurent l’analphabétisme des femmes et l’accès réduit à l’eau potable et à l’assainissement. Le souci d’améliorer l’état sanitaire et le bien-être des populations a conduit le gouvernement à organiser en juin 2003 une table ronde des bailleurs de fonds pour réunir les ressources nécessaires au financement du Plan National de Développement Sanitaire, élaboré sur une base décennale (PNDS). Par ailleurs, le CASRP 4 a soutenu la poursuite des actions entreprises au cours de l’exécution du premier cycle de CASRP, notamment : (i) la normalisation des structures sanitaires et la dotation de celles-ci en personnel minimum pour assurer leur fonctionnalité, (ii) la réduction des marges bénéficiaires du centre national d’approvisionnement en médicaments génériques, ce qui a permis de réduire les prix et d’accroître l’accès à ces médicaments (iii) la gratuité des soins prénataux et les services de vaccination (iv) la motivation pour maintenir le personnel dans les zones rurales sous - desservies, et le transfert des responsabilités de l’attribution et de la gestion du personnel aux niveaux régional et provincial. Toutes ces opérations ont aussi contribué à encourager la prévention continue à travers les programmes de vaccination et la distribution concomitante de vitamine A aux enfants de 0 à 5 ans. Pour améliorer l’exécution des crédits accordés aux districts sanitaires dans le cadre de la déconcentration budgétaire, un suivi plus régulier des régies d’avance a été entamé après l’accroissement de 10% des moyens alloués aux structures déconcentrées du secteur. Cette augmentation des crédits délégués a contribué à assurer un meilleur fonctionnement des districts sanitaires. Le gouvernement a par ailleurs renforcé les Comités de Gestion des Centres de Santé (COGES) par la formation de leur personnel en micro planification, et des dispositions ont été prises par le gouvernement pour l’élaboration d’un CDMT sectoriel en vue de favoriser le pilotage du PNDS. Axe 3 : accroître les opportunités d’emploi et d’activités génératrices de revenus pour les pauvres Le CASRP 4 a intégré des mesures visant à soutenir une véritable stratégie de développement rural. Les actions prioritaires ont concerné le développement de l’économie de marché en milieu rural, l’accroissement continu des revenus ruraux à travers la diversification des filières et la poursuite de la réforme de la filière coton par son ouverture à de nouveaux investisseurs. Le gouvernement a également intensifié les actions de soutien aux initiatives visant la diversification des sources de revenus du monde paysan et le renforcement de la sécurité alimentaire et nutritionnelle grâce à la petite irrigation villageoise, développées pour des cultures de contre saison. - 16 - Dans le domaine des productions agro-pastorales, le CASRP 4 a soutenu l’élaboration des plans d’actions oléagineux (septembre 2003), porcine (octobre 203) et fruits et légumes (étude démarrée en novembre 2003 et achevée en septembre 2004). Par ailleurs des actions ont été aussi développées dans le domaine de l’hydraulique rurale et de l’approvisionnement en eau potable. Après l’adoption de la loi d’orientation relative à la gestion de l’eau, le gouvernement a préparé et adopté dans le cadre du programme de plan d’action pour l’atteinte des objectifs du millénaire dans les domaines de l’eau et de l’assainissement, aussi bien en milieu rural que urbain sur la période 2003-2005. De même dans le domaine du désenclavement des zones rurales, l’effort de construction de pistes rurales a été poursuivi en vue de créer des pôles de développement capables de stimuler une diversification des opportunités d’activités économiques. Axe 4 : promouvoir la bonne gouvernance Le CASRP 4 a soutenu de manière continue les efforts du gouvernement dans le domaine de la gouvernance en vue de maintenir un cadre macro-économique stable et d’aligner son cadre de dépenses à moyen terme (CDMT) avec les priorités de CSLP. Ces objectifs ont été poursuivis à travers les mesures de réformes suivantes : (i)- l’utilisation de règles de formulation, d’exécution et de contrôle de la gestion budgétaire favorisant les piliers du CSLP, notamment la santé, l’éducation et le développement rural sur la base de solides revues des dépenses publiques ; (ii)- le respect des procédures de base en matière de passation de marché et de gestion financière. A cet effet, en vue de la renforcer le dispositif réglementaire des marchés publics, un projet de décret a été élaboré pour réglementer les concessions et l’affermage ; (iii)- la réforme de la fonction publique et de la décentralisation a continué à être appuyé à travers la mise en œuvre du processus de la décentralisation et de la déconcentration des services publics, afin d’améliorer l’efficacité des prestations de services sociaux tout en assurant leur qualité. Ainsi, la déconcentration de l’ordonnancement a été engagée pour accroître l’efficacité du mécanisme de délégation des crédits aux régions et aux provinces. Démarré à Bobo–Dioulasso en avril 2003, la déconcentration de l’ordonnancement des dépenses budgétaires a été étendue en 2004 à quatre autres chefs lieux de régions, en l’occurrence Ouahigouya, Kaya, Koudougou et Tenkodogo. L’élaboration des Cadres de Dépenses à Moyen Terme (CDMT) 2004-2006 a permis de disposer d’enveloppes financières sectorielles traduisant les priorités sectorielles et leur adéquation avec la stratégie nationale de réduction de la pauvreté. Le budget étant l’instrument de mise en œuvre du CSLP, celui 2004 a été élaboré selon la nomenclature UEMOA de 2003. Le CASRP-4 a soutenu la mise en œuvre du processus de la décentralisation et de la déconcentration du service public, comme le moyen d’améliorer l’efficacité et la qualité des prestations de services sociaux de base. Il comporte aussi la délégation de crédits budgétaires aux régions et aux provinces, l’émission d’ordre de paiement aux niveaux régional et provincial. Le volet environnemental introduit au cours du CASRP 3 a été poursuivi dans CASRP 4, permettant au gouvernement d’accroître sa capacité d’étudier l’impact environnemental et la protection de l’environnement. III - Propositions pour les prochains CASRP Les prochains CASRP devront continuer de prendre en compte les insuffisances relevées au cours de l’exécution des CASRP antérieurs et, dans le processus, le gouvernement entend assurer son leadership dans la définition et la coordination des actions à entreprendre, conformément à l’orientation affichée clairement dans le CSLP. Par ailleurs, dans le domaine du renforcement de la programmation budgétaire, le gouvernement entend promouvoir la mise en place d’instruments appropriés tels que le CDMT et le budget - programme dans les - 17 - ministères sectoriels, avec l’appui de la banque. Un meilleur suivi - évaluation des indicateurs du CASRP et par conséquent, du CSLP, nécessite non seulement le renforcement des services nationaux de statistique (INSD, services des ministères sectoriels) en ressources humaines, mais aussi le développement des capacités d’analyse. Par ailleurs, il importe que les revues et les évaluations du CASRP s’inscrivent dans le nouveau cadre d’organisation des appuis budgétaires en soutien à la mise en œuvre du CSLP adopté le 11 janvier 2005. En vue de permettre une plus grande appropriation des actions par la partie nationale, une meilleure implication de la mission résidente est nécessaire, mais avec une coordination des services en charge du suivi des appuis budgétaires au sein du ministère des finances et du budget. L’efficacité du CASRP repose sur l’engagement de la banque et du gouvernement à travailler de concert pour une meilleure compréhension de l’instrument. - 18 - Appendix 2: Measures taken before PRSC-4 and progress to date (Triggers in Boldface) Policy Area Macroeconomic Framework Original Measures PRSC-4 Maintain a stable macroeconomic framework during the program period. Measures Implemented before PRSC-4 Trigger fulfilled as specified. Progress as of end October, 2005 The IMF approved a new three-year program supported under the PRGF in June 2003. The fourth review of the program has been conducted in June 2005 and was considered by the IMF’s Executive Board on September 7, 2005, indicating that economic performance in 2004 was relatively strong, despite the adverse external shocks that emerged in the second half of the year, notably the sharp decline in world cotton prices and the increase in world oil prices. Economic growth remained robust at 4.6%, inflation was low (-0.4%), and all fiscal targets were met. The sharp decline in Burkina Faso's terms of trade has reduced economic growth prospects for 2005, and presents the authorities with substantial challenges. The authorities' program strikes an appropriate balance between the need for fiscal restraint in the face of this shock and the need to push ahead with priority expenditures in support of the poverty reduction strategy. Revenues have been in line with the authorities' target and expenditures have remained oriented toward key social services, notably health and education, as well as growth and productivity-enhancing capital investments. The fifth, review of the current PRGF arrangement is scheduled for December 2005. FIRST COMPONENT : GROWTH AND EMPLOYMENT CREATION A. Rural sector Open the cotton sector for private investors Continue with the implementation of the action plan for opening the cotton sector to private investors as signified by bringing the assets in two zones to the point of sale. Preparation of the terms of reference and begin the elaboration of a study on options for the evolution of the cotton sector after the transition period. Trigger mostly fulfilled. The technical bids for the two zones were evaluated in August 2003. The council of ministers validated the process in January 2004, retaining two bidders for the central zone and three bidders for the eastern zone. The government issued the invitation for financial bids in February 2004 and financial bids were received and opened on April 6, 2004. While the assets of the two zones were not brought to the point of sale prior to PRSC-4 negotiations, the government was expected to invite winning bidders for negotiation in May 2004 and to transfer the assets on time for the new cotton campaign. Delays were encountered because one bidder unsuccessfully his disqualification on technical ground The privatization of the two zones has been successful. Two new companies FASO COTON and SOCOMA took over the control of the two zones in September 2004. SOCOMA’s share is 20% of total cotton production and FASO COTTON’s is 10%. Despite a gloomy cotton world market, the two new companies have been doing well so far. SOCOMA has already built a new ginning unit to face an expected rise in cotton production. FASO COTTON is planning to move its plant to a new location outside the capital city of Ouagadougou to address environmental concerns and is also planning the increase its ginning capacity. Overall, Burkina is now the largest cotton producer in West and Central Africa. A Bank-financed consultant carried out a mission in January 2005 to advance the preparation of the new regulatory framework. The study on options for future evolution of the cotton sector was under preparation at the time of the negotiations. Diversification of rural incomes Dissemination of the results of the different studies on agricultural diversification and definition of diversification policies resulting from these studies under the forthcoming global development strategy. Results of finalized studies were disseminated. Following the adoption of action plans for the promotion of several products, the government adopted the global rural development strategy in December 2003. - 19 - All the action plans (cereals, rice, beans, fruit and vegetable) are now completed. However, implementation is slow because of lack of funding. Policy Area B. Telecommunic ation sector Privatization of ONATEL Original Measures PRSC-4 Measures Implemented before PRSC-4 Progress as of end October, 2005 Trigger fulfilled as specified. The privatization strategy was adopted in early 2003, and the pre-qualification process was launched in May 2003. Pre-qualified candidates were notified in July 2003. The bidding document were prepared in Fall 2003 and sent to pre-qualified bidders in December 2003. The privatization of ONATEL was not completed in 2004 because private investors did not find attractive the three-stages strategy proposed by the Government: • Selling of 34% of the share to the new investor. • After 3 year selling of an additional 10% • After 8 years, selling of a further 7% to provide a majority share to the private investor. None of the pre-qualified bidders submitted a financial offer. The government adopted a new strategy in March 2005, providing an outright majority of 51 percent to the private investor. However progress has been limited so far. Trigger partially fulfilled. On the basis of studies on the restructuring of the electricity sector, the Council of Ministers adopted the reform strategy on March 24, 2004. The petroleum sector strategy was reviewed by the Council of Ministers on March 31, 2004, and instructions were issued to finalize the report for adoption. A new regulatory framework was approved by Parliament in May 2005. However, implementation decreed should further clarify the role of the different institutions in the energy sector. Preparation of a comparative study on labor market laws and regulation. The study has not started before PSRC-4. The study is now planned to start in December 2005. A draft report is expected in February 2006. Begin of tripartite discussions on the reform of the labor code. The discussions have taken place and the labor code revision was finalized in 2004. The revised Labor Code was adopted in September 2004. The implementation texts are not taken yet. PREPARE SECTOR FOR PRIVATIZATION AND LAUNCH BIDS FOR ONATEL AS SIGNIFIED BY: (I) ADOPTION OF THE PRIVATIZATION STRATEGY BY THE COUNCIL OF MINISTERS. (II) LAUNCH THE PRE-QUALIFICATION PROCESS. (iii) Launch the bidding process on the basis of draft bidding documents. (iv) Finalize evaluation of technical bids. C. Energy sector Private sector involvement in management of SONABEL and SONABHY Prepare sector for private sector participation as signified by: (i) Adoption by the council of ministers of the revisions to the 1998 law to adapt the legal and regulatory framework of the electricity sector. The Government has carried out several audits of the accounts of SONABEL and SONABHY in the context of the preparation of their privatizations. (ii) Adoption of the development strategies for the electricity and petroleum sectors by the council of ministers. Private sector development - 20 - Policy Area A. Original Measures PRSC-4 Measures Implemented before PRSC-4 SECOND COMPONENT : HUMAN RESOURCE DEVELOPMENT Progress as of end October, 2005 Education Make sufficient budgetary allocations for the implementation of the PDDEB FINALIZATION OF THE TRANSFER OF RESPONSIBILITIES FOR THE RECRUITMENT AND ASSIGNMENT OF TEACHERS TO THE DREBA AND PREPARATION OF AN ACTION PLAN FOR THE IMPLEMENTATION OF THE TRANSFER OF RESPONSIBILITIES FOR The 2004 budget included allocations consistent with the PDDEB. Allocations exceeded initial provisions in the 2004-06 MTEF. In addition, PDDEB implementation benefited from additional resources under the HIPC Initiative. The DREBA are now responsible for recruitment and assignment of teachers and all recruitments are for a prespecified regional post. However, the salaries continue to be paid through the central budget until the decentralization process has progressed further with the nomination of governors, extension of budget management systems to regional capitals, and deconcentration of the payroll management system. The implementation of the study was delayed. THE MANAGEMENT OF TEACHERS AND RELATED BUDGETARY RESOURCES TO DPEBA IN 2004. The system of sub-cycles was implemented by decree with the 2003-04 school year. Verification was under way during the preparation of PRSC-4. The study was carried out and the Ministry of basic education is preparing an action to address issues identified. The orientations for the action plan are: (i) strengthen the control, (ii) adopt a more flexible schedule for schools depending on local specificity; (iii) strengthen parents’ participation in the management of schools. The action plan is slated for adoption in December 2005. INCREASE THE EFFECTIVE HOURS OF TEACHING TIME. A draft sectoral MTEF for MEBA was prepared. Verify the implementation of the system of sub-cycles. Preparation of a draft sectoral MTEF (MEBA et MESSRS). - 21 - A joint committee composed of staff from MEBA, MESSRS and Ministry of finance was established in October 2005 and is finalizing a draft MTEF for the entire sector. The draft MTEF is expected in the first quarter 2006. B. Policy Area Health Original Measures PRSC-4 Ensure the provision of essential medication and care by: - Continuing the distribution of free vitamin A supplements after the discontinuation of the polio vaccination days; Verifying randomly the application of the new price structure for generic drugs and essential medical services and taking of corrective measures in cases of non-application; - Providing sufficient budgetary resources in 2004 for the provision of subsidized health services. Measures Implemented before PRSC-4 Trigger fulfilled as specified. The distribution of vitamin A supplements continues during the polio vaccination days. The general health inspectorate has verified the application of the price structure and prepared an internal audit report in March 2004. The 2004 budget provided resources for the provision of health services at the prices specified in the February 2003 circular. - 22 - Progress as of end October, 2005 Polio vaccination was not discontinued and the distribution of free vitamin A is being continued. Policy Area Original Measures PRSC-4 Health (continued) Pursue the deconcentration of health ministry personnel by transferring the newly educated health staff of the national health school to the regional and district level. New health workers are now directly assigned to regions. Prepare an action plan on the basis of the results of the WHO and Nouna studies on incentives for health personnel and begin its implementation, assuring the financing of measures in the 2005-07 MTEF. The studies on incentives for health worker staff have been finalized and validated. However, an action plan for their implementation was expected in June 2004, after the approval of PRSC-4. Increase the share of deconcentrated credits in the health budget by 10 percent in 2004 and put in place a mechanism for regular monitoring of the régies d’avance. The deconcentrated credits increased by 10 percent. Informal monitoring by the health ministry and the treasury began; a formal monitoring mechanism for the regies d’avance was proposed for adoption by the ministries in charge of finance and health. Prepare a draft sectoral MTEF. The MTEF was under preparation. Preliminary studies and some training took place with the support of Bank staff and other donors. The MTEF for 2005-2007 was completed in February 2005. Triggers fulfilled as specified. The PNDS monitoring committee was named and met. Monitoring indicators were adopted in November 2003. A first bi-annual review with field visits took place in March 2004. The monitoring of health development program is satisfactory. A supervision missions composed of health ministry staff and representatives of donors visited health centres in late 2004 and made recommendations. Establish a framework for annual monitoring and evaluation of the PNDS on the basis of its indicators and key objectives, jointly with national partners and donors by: - naming a committee for the PNDS implementation; - organizing through the committee bi-annual reviews showing the achievements of objectives, status of disbursements, absorption rates, and supporting and constraining factors; and - joint evaluation of the PNDS implementation by way of indicators. Measures Implemented before PRSC-4 - 23 - Progress as of end October, 2005 A comprehensive strategy to better motivate and manage health workers including the recruitment of staff by regions was adopted and the associated action plan is being implemented under the supervision of the commission for human resource management created within the Committee in charge of the follow up of the PNDS. Policy Area C. Water Infrastructure A. Budget: Formulation B. Budget: Execution Original Measures PRSC-4 Measures Implemented before PRSC-4 Progress as of end October, 2005 Prepare and adopt an action plan for achieving the MDGs in the water sector in the rural and urban areas in general and for the period 2003-05 in particular. The plan was finalized in early 2004 and integrated in the revised PRSP and its action plan. The action plan is being implemented and will be updated thanks to the inputs provided by the survey of water points Prepare a timetable and action plan for the implementation of a public-private partnership in the water sector in urban areas and a regulatory framework by 2006. The preparation of the action was delayed. 5 pilot cases of PPP are underway. An assessment will draw from these experiences and propose a generalisation of the approach to the rest of secondary water centres. Prepare an action plan to reduce government water bills. An action plan has been prepared to review the list of all users belonging to the public administration and all water connections in public buildings. A list of water connection points billed to the government was prepared by the water companied and transmitted for verification to the Ministry of Finance. THIRD COMPONENT : GOOD GOVERNANCE The review of all water connections in public building to reduce water leakages is under way. Adopt the draft budget and program budgets for 2004 on the basis of sectoral ceilings of the 200406 MTEF and in line with the priorities of the PRSP. Trigger fulfilled as specified.. The 2004 budget respects baseline sectoral MTEF ceilings for ministries reflecting PRSP priorities. The preparation of a global MTEF introduced in Burkina with the help of the Bank in 2000 is now well established. A global MTEF is prepared each year to allocate budget ceilings to line .ministries. The intersectoral allocations take into account the PRSP priorities. Based on the ceilings each line ministry prepares program budgets in line with the PRSP objectives. Prepare a draft PER for the ministries of higher education and justice. A PER for higher education was finalized and a PER for the justice ministry was under preparation. The two studies were completed and the government is currently implementing key recommendations from these PER. For instance, budget execution is now deconcentrated in these two ministries. Effective integration of foreignfinanced investments into the budget execution monitored by the CID. No notable advance has been made in this respect. An AFRITAC mission has given technical assistance and recommended the improvement of data collection and disbursement procedures and eventually the development of a new foreign-financing module for integration of data into the CID. The integration of data of foreign financed investments into the budget appeared to be more complex and difficult than expected. The government eventually decided to build a new information management system based on SYGADE, a debt management software initially designed by CNUCED for debt management. The revision of the software is now planned to be completed by September 2006. Finalize the technical concept for the integrated revenue circuit (CIR). A consultant has been identified and hired for the preparation of the CIR concept. The study of the existing equipment was finalized and work on the concept for the computerization was under way. The Software for budget execution –CID- now covers 9 out of 13 regions and activities are underway to connect the remaining 4 regions in 2006. Operationalize the extension of the CID to a total of 5 regional capitals with a connection to the government accounting system (CIE). Trigger fulfilled as specified. In addition to the existing connection to Bobo-Dioulasso, 4 regional capitals (Koudougou, Ouahigouya, Kaya, and Tenkodogo) were identified, material was purchased and the extension of the CID was made effective in the first quarter of 2004. - 24 - Policy Area C. Budget: Procurement D. Budget management and ex post control Original Measures PRSC-4 Measures Implemented before PRSC-4 Progress as of end October, 2005 Verification of application of the new procurement decree, the manual of procedures and the standard documents for a sample of public procurement during 2003 by the IGF. Trigger fulfilled as specified. The audit report was finalized in March 2004. Preparation of a draft decree for leasing and concession contracts meeting best international practice. A first draft decree was finalized in March 2004. Given the considerable time necessary to validate the manual or procedures and the standard documents, the verification by IGF concentrated essentially on the new procurement decree. Future audits will verify the application of these texts. A large external audit of 2004 procurement contracts was carried out in 2005 with the financing of EU. A CPPR was also conducted in 2005 and these two assessments are serving as the basis for a consolidated and comprehensive action plan for procurement reform in Burkina for the upcoming years. Issue a ministerial arrêté determining the conditions for the issuance and withdrawal of accreditation for public works corresponding to norms of transparency and equity Two arrêtés were under preparation. A first round of discussions with the private sector took place in on the arrêté concerning road works, adoption of which was planned for endJune 2004. Conceive a computer application to set up a database and a software application to follow the procurement process consistent with the existing expenditure framework (CID). The central directorate for procurement has been connected to the computerized expenditure management system. Technical staff has been hired to begin with the conception of the computer application. Satisfactory implementation of PRGB measures in this area, in particular: Trigger fulfilled. (i) application of the WAEMU budget classification; (ii) preparation of treasury account balances on a monthly basis and preparation of the account balances for 2002; (i) The new WAEMU budget classification has been incorporated in the CID and is being applied since the 2004 budget. (ii) Treasury account balances are being prepared monthly since March 2003. Account balances for 2002 were finalized in December 2003. (iii) strict application of the timetable for budget operations to reduce the level of expenditure committed and not yet paid; (iv) elaborate and begin implementation of an action plan for the creation of an accounting system for government property; and (v) continue the capacity reinforcement at the IGE and IGF and adopt a coherent status for staff in all control services The government eventually decided to transform PRGB into a sector strategy document. Significant progress was made in that direction. Meantime, PRGB measures are being implemented under several financing from budget support donors (Switzerland, Netherlands, France, Germany, Afdb and the Bank. (iii) The timetable for closing of budget operations was applied strictly in 2003 and the government begun to remove unpaid commitments from the payment circuit toward the end of the year. Excluding HIPC spending, the stock of unpaid expenditure commitments fell by 2.3 CFAF billion in 2003 despite lower-than anticipated foreign disbursements. (iv) An action plan was prepared. Implementation has begun in 2004. (v) Staff of IGE was increased in 2004. The Council of Ministers instructed the relevant ministries on March 31, 2004 to finalize a new decree on the status of control services. - 25 - The treasury has now catched up with the time requirements for the submission of government accounts (compte de gestion) to the Supreme Audit Court in 2005. 2004 Accounts were transmitted to the national Assembly with the draft budget. Policy Area E. Public sector reform and decentraliza-tion Original Measures PRSC-4 Measures Implemented before PRSC-4 Progress as of end October, 2005 Finalization of the work to build a consistent personnel database and maintenance of the personnel management system (SIGASPE). The consistency check of the database was largely completed. Only 116 inconsistent cases remained to be resolved. Maintenance of the system remained hampered by weak resource allocation and difficulties to find skilled computer personnel. The software for personnel management was successfully implemented. A workshop to draw lessons of 5 years experience was held in 2004 and an action plan to develop the software and extend it to line ministries and regions was adopted. Several line ministries have been already using the SIGASPE. Preparation of an action plan for the extension of SIGASPE to line ministries and deconcentration of personnel management. An action plan was prepared. It focused on deconcentration of personnel management to line ministries but did not include the deconcentration to the regional level. Implementation of the region as deconcentrated entity and adoption of the application texts for the TODs. F. Environ-ment Satisfactory implementation of the measures specified in the Environmental Assessment for PRSC3, notably: (i) sufficient budget funding in 2004 for the implementation of key measures of the capacity building plan; (ii) development of sectoral guidelines for EAs; (iii) replacement of EA focal points with cells; and (iv) enhanced supervision of EMP implementation of IDA credits. Trigger not yet fulfilled. Texts for the regions have been adopted in March-April 2003 defining the role and resources of governors. Resources for regions and their staff have been inscribed in the 2004 budget. The national assembly adapted the decentralization law in August 2003 to define the role of villages, departments, provinces and regions in the deconcentration and decentralization process. A variety of draft application texts have been prepared to regulate resource and personnel transfers and define the role of the different players (village elder, high commissioner, governor, regional council etc). (i) Budget resources were increased but not sufficiently for capacity building measures. The Ministry of Finance was to provide additional resources. (ii) 6 sectoral guidelines were developed. (iii) 3 large ministries (transport, finance, energy) replaced their focal points with cells; a fourth (decentralization) was preparing the texts for implementing a cell. (iv) Implementation of environmental management plans in 3 IDA projects was evaluated. - 26 - The draft texts prepared by commissions headed by the Ministry in charge of Decentralization were subject to intense interministerial discussions as regards the financial and human resource implications and took substantially longer than expected. The governors for the 13 regions were nominated eventually in late 2004. The finalization of the texts for the transfer of infrastructures, personnel and financial resources is underway. The texts should be adopted before the upcoming local elections scheduled in February 2006. The office responsible for EAs (DGACV) in the Ministry of environment has held in 2004 and 2005 several training sessions to sensitize the other ministries staff of the importance of integrating environment issues in their activities. It has also carried out supervision of IDA projects. Appendix 3: Burkina Faso: Selected Economic Indicators Table 3. Burkina Faso: Selected Economic and Financial Indicators, 2002–06 2002 Est. 2003 Est. 2004 Est. 2005 Prog. 1/ Est. 2006 Prog. 1/ Proj. '(Annual percentage change; unless otherwise specified) GDP and prices GDP at constant prices GDP deflator 5.2 3.3 8.0 1.5 4.6 3.3 3.5 1.7 3.5 3.2 4.8 2.2 4.8 2.6 2.3 3.9 2.0 3.2 -0.4 0.7 4.0 2.0 5.7 2.6 2.0 2.0 2.0 2.0 0.0 -9.7 11.9 2.9 5.2 10.4 2.4 9.4 16.3 4.9 0.8 -4.9 8.1 22.9 4.3 8.2 4.8 3.4 5.3 5.3 11.9 4.0 7.9 6.8 4.3 7.4 5.1 2.3 7.1 5.3 8.3 4.2 4.1 7.5 4.3 4.3 2.5 -17.0 2.1 46.3 25.0 9.1 -0.7 -0.8 3.8 63.4 28.9 23.3 4.9 1.8 -1.1 62.0 37.8 1.4 13.1 -26.4 ... 53.0 50.7 1.9 16.7 -29.3 ... 54.0 54.2 8.5 10.6 0.3 ... 55.0 53.0 19.7 12.9 -1.0 ... 59.5 61.8 Gross investment Government Nongovernment sector Gross domestic savings Government savings Nongovernment savings Gross national savings 17.5 7.1 10.4 4.2 2.6 1.6 2.5 17.0 6.3 10.7 4.1 4.1 0.0 4.8 18.6 7.7 10.8 7.4 4.8 2.6 10.7 19.5 7.8 11.7 6.6 4.5 2.1 10.4 20.1 7.7 12.4 6.8 4.5 2.4 10.5 20.8 9.5 11.2 7.2 5.0 2.4 9.0 20.1 8.6 11.6 6.7 4.9 1.8 8.5 Central government finances Current revenue Of which: Tax revenue Total expenditure 11.4 10.6 21.4 12.1 10.8 20.3 12.8 11.8 21.4 13.3 12.3 22.9 13.1 12.2 22.6 14.0 13.0 24.7 13.8 12.8 24.3 11.4 -10.0 -4.8 10.4 -8.2 -2.9 10.6 -8.6 -4.3 12.1 -9.6 -4.3 11.9 -9.5 -4.2 12.5 -10.7 -7.3 12.3 -10.5 -7.2 External sector Exports of goods and services Imports of goods and services Current account balance (excluding current official transfers) Current account balance (including current official transfers) 9.0 22.3 -12.6 -10.0 8.9 21.7 -12.7 -8.6 9.9 21.0 -10.7 -7.8 9.6 22.4 -12.3 -9.1 9.5 22.7 -12.8 -9.6 9.6 23.1 -12.8 -11.8 10.4 23.8 -12.7 -11.6 Nominal GDP (in billions of CFA francs) 2,277 2,494 2,696 2,838 2,872 3,039 3,089 Consumer prices (annual average) Consumer prices (end of period) Money and credit Net domestic assets (banking system) 2/ Credit to the government 2/ Credit to the private sector 2/ Broad money (M2) Velocity (GDP/M2) External sector Exports (f.o.b.; valued in CFA francs) Imports (f.o.b.; valued in CFA francs) Terms of trade Real effective exchange rate (– = depreciation) World cotton price (US$ cents per pound) 3/ Average petroleum spot price (US$ per barrel) 3/ (In percent of GDP; unless otherwise indicated) Of which: Current expenditure Overall fiscal balance, excluding grants Overall fiscal balance, including grants Sources: Burkinabè authorities; and Fund staff estimates and projections. 1/ EBS/05/130, August 24, 2005. 2/ In percent of beginning-of-period broad money. 3/ Source: WEO. - 27 - Appendix 4 : PRSC-4, 5 and 6 results indicators Policy Area Macroeconomic Framework Expected Outcome Accelerate real growth and reduce the incidence of poverty. PRSP/PRSC Indicators Poverty headcount 2001 actual -urban poverty headcount -rural poverty Real GDP growth rate 6.8% 2002 actual 54.60% (1998) 2003 actual 46.40% 22.40% 61.10% 5.2% 19.20% 52.40% 8% 2004 actual 2005 est. 2006 target 41% 15% 48% 4.6% 7.7% 24% COMPONENT I: GROWTH AND EMPLOYMENT A. Rural sector : Reinforce the competitiveness of agricultural and agro-food sectors Improvement of the competitiveness and economic performance of the cotton sector Improvement of the coordination in the interprofession Limit the state to supervisory functions and transfer other functions to professionals in the sector or to the private sector Growth rate of cotton seed production 37% 7% 18% 17% Growth rate of cotton fiber exports 6.7% 36.1% 18% 17% Evolution of the number of professional agricultural organizations with economic vocation Clarification of the roles and responsibilities for agricultural development Producers and their organizations take a larger role - 28 - 30,515 24% 40,000 comments Policy Area Expected Outcome PRSP/PRSC Indicators 2001 actual 2002 actual 2003 actual 2004 actual 2005 est. -18.8% 16.0% 2006 target Improvements in the economic performance of the sector Facilitate private investment and export of agricultural products Rural development (Diversification) B. Telecommunication sector Diversification of agricultural production Private sector participation in order to increase the density of the fixed net and reduce the cost of fixed and mobile telephone services, in particular the connection costs between fixed line and mobile phones. Growth of cereal production growth of livestock exports Evolution of average costs of telecommunication between mobile and fix 36% 0.6% 16.5% -16% 11% -27% 10.1% 5% 170 170 170 number of users for fix Privatization of ONATEL C. Energy sector Private sector participation in the electricity and petroleum sectors to improve the management of the electricity and petroleum distribution companies, reduce electricity production costs and tariffs, and reduce cost of petroleum products number of users for mobile Evolution of costs of a KwH (in the long run, until 2015) Private sector participation in the energy and petroleum sectors - 29 - 80,000 100,00 0 450,00 0 400,000 110 110 110 150 110 comments Policy Area D. Private sector development Expected Outcome Identify strength and weaknesses of the existing labor market laws and regulations PRSP/PRSC Indicators Number of days needed to accomplish the formalities to create a new business 2001 actual 13. Number of businesses created 2002 actual 2003 actual 2004 actual 14 2005 est. 7 2006 target 7 56.8% 58.1% 60.2% n.a. Reduce cost to start new firms Facilitate trade Improve performance of the justice system growth of gold exports E. Mining A. Education 77.2% 31.7% 36.4% Improve the public service in particular in rural areas COMPONENT II: ACCESS TO BASIC SERVICES Gross School enrollment 47.75% rate of 60.2 percent (51.9 percent for girls) 41.00% 46.0% 51.0% 52.9% 51.9% 32.90% 36.8% 42.2% 44.9% 46.0% Improve the school enrollment rate in rural zones gross school enrollement for girl 15. School enrollment rate of 46 percent in the 20 most disadvantaged provinces 16. Admission rate for first grade of 89.7 percent (83.7 percent for girls) 52.90% 67.6% 77.7% 72.1% 89.7% 45.40% 43.20% 37% 36.80% 64.1% 56.30% 66.7% 48.80 % 83.7% 46% Achieve higher literacy rates for the poor Admission rate for girls 17. Admission rate in the 20 most disadvantaged provinces 18. Primary completion rate of 33.8 percent 26.70% 32.76% 33.80 % 33.80 % 19. Literacy rate of 36 percent (22 percent for women) Literacy rate for women B. -64.5% Health - 30 - 32% 36% 17% 22% comments Policy Area Expected Outcome PRSP/PRSC Indicators 2001 actual 2002 actual 2003 actual 2004 actual 2005 est. 2006 target Increase efficiency in use of resources Increase the availability of resources on the regional and provincial level Increase the protection of children against diseases Improvement of access to health services Reinforce the implementation of the PNDS 20. Maternal mortality rate of 313 per 100,000 births 21. Child mortality rate of 87 per 1000 live births 484 484 313 313 105 105 83 83 28. Rate of assisted births: 55 percent 36% 33.49% 22. CPN2 coverage rate: 80 percent 54.10% 23. 70% 162.7 40% 50% 75% 80% Vaccination rates: 24. DTC3: 87.5 percent 25. VAR: 87.5 percent 26. VAA: 87.5 percent 27. BCG: 93 percent 29. Percentage of health centers satisfying personnel standards: 85 percent 30. Children with insufficient weight: less than 30 percent 64.3% 84.4% 69.2% 9.9% 78.3% 71.2 71.6 86.3% 42.2% 87.7% 78.34 85 109.7% 75.8 85% 87.5% 85 87.5 93 90% 38% 35% 30% 20% 20% 20% 2,285 2,732 3,532 Staff development Nutrition C. Social protection Increase the number of staff in the remote areas % of health primary care centers with minimum staff Better protection vulnerable groups 31. Number of children covered of 32. Number of reinserted children 74.4% 76.2% 76.8% 1,432 - 31 - comments Policy Area D. Expected Outcome Budget: Formulation safe water Improve budget formulation and the link between program budgets, MTEF, and budget. Reinforce the link between public expenditure and growth and the link between objectives, resource allocation, and results Improve the transparency of public expenditure management Increase the responsibility of budget managers B. 2001 actual 2002 actual 19 20 2003 actual 2004 actual 2005 est. 2006 target Water Infrastructure Increase coverage A. PRSP/PRSC Indicators 33. Number of provinces with a safe drinking water coverage over 75 percent: 37 34. Share of houses with access to safe drinking water: 92 percent in rural and semi-urban areas, 34 bis. Share of houses with access to safe drinking water: 80 percent in urban areas 35. Household share with hygienic latrines in urban areas: 43 percent 37 64.2% 92% 88.5% 33.30% 35% 39% 43% 9.40% 10.20% 10.95 % 11% education 12.40% 14.38% 14.30 % 14.50 % social protection All together 0.80% 22.60% 0.81% 25.39% 0.90% 26.15 % 1% 26.50 % 37. Budget execution rate in priority sectors 69% 70% 72% 77% 38. Absorption rate of external resources exceeds 66% 70% 72% 77% COMPONENT III: GOVERNANCE 36. Share of the budget allocated to social sectors (excluding foreign financed and HIPC) health Budget: Execution Improve budget execution - 32 - comments Policy Area C. Budget: Procurement Expected Outcome Improve the transparency of public resource management. PRSP/PRSC Indicators 77 percent 2001 actual 39. Number of audited procurement contracts: 5 percent 2002 actual 2003 actual 2004 actual 2005 est. 2006 target 10% 12% 15% 3 4 5 Efficient and simplified procurement system. D. Budget management and ex post control Improve budget reporting and public accounting Dispose of a functional classification of expenditure Follow more closely the use and location of government property Reinforce the ex post control E. Public sector reform and decentraliza-tion Improve personnel management and data on wage bill number of ministries where SIGASPE was installed number of region where the software was installed Personnel Management Public sector reform and decentraliza-tion More effective management of human resources Improve local service delivery and empowerment of local communities. (continued) Decentralization Management of rural development ministries Improve efficiency and quality if basic services of the rural development ministries. - 33 - 13 comments Policy Area F. Environment Expected Outcome Larger and improved supply of initial and professional training in agriculture Improve capacity to assess environmental impact of government activities and protect environment. PRSP/PRSC Indicators 2001 actual 50 percent of the selected ministries have an environmental cell - 34 - 2002 actual 2003 actual 2004 actual 2005 est. 4 2006 target 15 comments