Report No. 21402 THE lNTERNATIONAL DEVELOPMENT ASSOCIATION AND THE INTERNATIONAL MONETARY FUND GUINEA Joint Staff Assessment of the Interim Poverty Reduction Strategy Paper Prepared by the Staffs of the International Development Association and the International Monetary Fund Approved by Callisto E. Madavo and Kemal Dervis (IDA) and Michael T. Hadjimichael and Masood Ahmed (IMF) November 29, 2000 Introduction 1. The interim PRSP (I-PRSP) prepared by the Guinean authorities consists of a description of poverty in Guinea; a presentation of Guinea's current strategic framework for changing the country's economic and social environment; a statement of the government's commitment to poverty reduction and the objectives and strategies of the poverty reduction effort; a three-year macroeconomic framework; and a detailed description of the participatory process and timetable for the formulation of the full PRSP. 2. Between 1992 and 1994, Guinea was considered to be the poorest country in the world, based on the Human Development Index published by the United Nations Development Program (UNDP). Today, Guinea ranks 162nd out of 174 countries covered by the UNDP's Human Development Report'. The groundwork for Guinea's poverty reduction policies was established in December 1996 with the formulation of the "Guinea-Vision 2010" document. The development objectives set out in this document were discussed with Guinea's external partners during the meeting of the Consultative Group on Guinea held in Paris in June 1998. The approach to poverty reduction set out in the I-PRSP builds on this, as well as on other specific steps taken to make operational the Vision 2010 (see below). This paper assesses the government's I-PRSP, and the process and time frame envisaged for completing the full PRSP. Government Commitment to Poverty Reduction 3. The I-PRSP provides a clear statement of the government's commitment to poverty reduction, setting this commitment within the framework of the Guinea-Vision l Nonetheless, despite its poverty, Guinea has taken in hundreds of thousands of refugees fleeing the civil strife in Sierra Leone and Liberia over the last few years. 2 2010 document. Specific poverty reduction initiatives have been taken to make this document operational, including, in particular, the formulation of a National Human Development Program (NHDP) in 1995-97, and the government's active contribution to the definition of a strategic approach to poverty alleviation that is reflected in the World Bank's Country Assistance Strategy (CAS, 1998-2000) for Guinea. Both of these initiatives were the result of an in-depth consultation process with key Guinean stakeholders, in which strategic priorities have been ranked. Since then, work has focused on translating these goals into short-and medium-term poverty reduction policies, whereby the medium-term expenditure framework (NEF) has played an integral part in the government's allocation of resources toward the priority areas and enhancing the efficiency of government spending. As a result, there has been a marked increase in the relative share of budgetary resources allocated to the priority areas (health, education, rural development, road maintenance, and justice). 4. Structural reforms-aimed at fostering a favorable environment for economic growth and poverty reductio.-also demonstrate the government's commitment to poverty reduction. These refo.ms include (i) an enhanced service delivery at the decentralized level; (ii) a more proactive program to privatize major public enterprises; and (iii) improved public expenditure management. In terms of specific actions, poverty alleviation measures have taken the form of increased efforts to fully fund agreed progrmns in the priority sectors. 5. The government has assumed full ownership of the PRSP process, which builds on the tradition of consultation and participation mentioned above. The government sees the PRSP as providing an integrating framework for its approach to fostering growth and reducing poverty, and will seek the same understanding from its development partners. 6. The I-PRSP presents a candid analysis of the obstacles to recent poverty reduction policies. This is a promising approach that seems to underline the government's commitment to address these obstacles. However, as the Interim PRSP notes, the strategy by which to overcome these obstacles in the future should be strengthened, including through decentralized service delivery, a more proactive privatization program, improved public expenditure management, and improved governance, transparency and accountability. Poverty Analysis 7. Guinea lacks up-to-date data on income and expenditure that would permit reliable measurement of the incidence and depth of poverty, as well as trends over time. National survey data are available only for 1994. However, good use has been made of the 1996 population census, two population and health surveys (1992 and 1999), and other more specialized surveys. This information has been supplemented by a recent agricultural survey (2000). 8. The poverty analysis presented in the I-PRSP is limited by the availability of data, but it does provide useful information about the overall scale of poverty and some poverty profiles across prefectu:es, income level, health, education, occupancy, and 3 gender. The I-PRSP also presents a brief discussion of the interdependencies among the different dimensions of poverty in Guinea, as well as a description of some of the factors contributing to poverty. The yovernment recognizes the weaknesses of its poverty- monitoring tools, and a new comprehensive household consumption survey is scheduled for 2001/02. This will strengthen the poverty database. Although the government intends to complete the full PRSP before the results of the 2001/02 survey will be available, the staffs recommend that the poverty profile and benchmarks be updated in the full PRSP by using the qualitative data that would be generated from the ongoing baseline survey and participatory surveys undertaken as part of the preparation of the CAS and the NHDP. 9. The full PRSP should expand on the analysis of the interdependencies of the determinants of poverty, and establish more clearly the link between these and the policy priorities of the poverty reduction strategy. Based on this analysis, the full PRSP should also prioritize actions (both acrois and within sectors/themes) and sharpen its focus on issues of strategic importance that can offer synergies. The full PRSP should also present the objectives of the national poverty reduction strategy in the context of the international development goals for 2015-namely, to indicate to what extent progress has been made thus far, and to assess the feasibility of achieving these goals. The government should be prepared to update its poverty reduction strategy when the results of the 2001/02 survey become available, thus making the PRSP a living document. 10. There are some indications that the quantification of the objectives for poverty reduction will need to be reviev ed by the authorities, especially those listed in Table 4. For example, (i) though increases in future growth rates are feasible, a GDP growth rate of 10 percent for 2010 may be too optimistic, (ii) the GDP growth rates should be consistent with the percentage reduction in poverty, and (iii) the suggested reduction of poverty by only 10 percent between 1995 (40 percent) and 2010 (30 percent) would imply that the absolute number of poor people in Guinea would increase (due to population growth) even though the percentage of poor people would decrease. Framework for Poverty Reduction 11. Guinea's poverty reduction strategy has three main pillars: (i) to increase economic growth and create income-earning and employment opportunities, particularly for the rural poor; (ii) to develop equal access to basic services; and (iii) to improve governance and to strengthen institutional and human capacity. This implies fully integrating macroeconomic goals with structural policy reforms and poverty reduction policies. 12. The attempt at integration is to be commended, but stronger linkages among these three pillars and an analysis of the impact on poverty of each component will need to be more fully developed in the full 'RSP. The government's existing strategy appropriately emphasies the creation of income-earning opportunities for the poor as the central element of the poverty reduction strategy. However, the full PRSP should articulate more clearly how employment opportunities for the poor would be generated. Depending on this impact analysis, the poverty reduction strategy could consider placing greater emphasis on important areas like rural poverty reduction, gender equity, and the fight 4 against AIDS. For instance, the fact that the incidence of poverty in Guinea is twice as high in rural areas as in urban areas and eight times higher in rural areas than in Conakry seems to call for an even stronger rural development strategy. Macroeconomic Framework 13. The three-year macroeconomic policy framework and the policy matrix for the Poverty Reduction and Growth Facility (PRGF) were updated with the negotiation of the third annual arrangement under the PRGF in the last quarter of 1999. The policy framework provides an appropriate basis for the formulation of the poverty reduction strategy, as it integrates the foreseen poverty reduction into an overall framework and thus facilitates its implementation. The authorities are prepared to adjust the objectives and targets of the macroeconomic framework in light of the results of the PRSP process and to accommodate specific poverty reduction measures, while ensuring macroeconomic stability. 14. The authorities recognize the central importance of increasing government revenue as a means of enhancing their ability to pursue poverty-reducing policies effectively. On the expenditure side, the MTEF will be extended to all areas of government expenditure in the context of the ongoing efforts to enhance the efficiency and transparency of government spending. The government has also implemented a series of measures to improve budget preparation and implementation in the areas of budget classification, government procurement, a computerized expenditure tracking system, and dissemination of budget information. 15. Since mid-1996, changes in economic management have been introduced and have inspired more optimism in the country's future. While the fragility and riskiness of the situation are recognized, given Guinea's past history of economic management failures and frequent policy reversal, the results achieved are encouraging: the achievements in the area of participation, the commitment to decentralization of service delivery, and performance in the social sectors, especially education, are a few illustrations of this turnaround, which was commended by donors at the Paris Consultative Group meeting. 16. However, the I-PRSP does not directly address the issues surrounding Guinea's inconsistent past track record of policy implementation, or some of the bottlenecks that have lessened the efficacy of policy. One such structural bottleneck is the weak capacity for policy formulation and implementation, which has contributed to policy slippages in the past; another is the large and inefficient public enterprise sector. In dealing with capacity building and private sector development, therefore, the full PRSP should address the issue of building capacity within the government and at all levels, including through civil service reform. In particular, it is important to build up budgetary management and service delivery capacities of the local administrations to prepare for their central role in implementing the poverty reduction strategy. It should also spell out more clearly the government's intentions with regard to the public enterprise sector, particularly in the area of the major public utilities. Similarly, given its importance for rural development and the promotion of women, the development of microfinance institutions would benefit from a more comprehensive treatment in the full PRSP. 5 Access to Basic Services 17. The government's existing strategy emphasizes the importance of greater efficiency in the provision of basic social services. Progress has already been made in improving service delivery in the education and health sectors, and the intention to bring the delivery of services closer to the beneficiaries through decentralization is commendable. The full PRSP will need to deal with this aspect of the poverty reduction process in more detail. Governance 18. The I-PRSP devotes an entire section to governance issues and rightly stresses the importance of improving public resource allocation, improving the effectiveness of government spending, and strengthening judicial capacity. However, the full PRSP would benefit from a more explicit treatment of the issue of strengthening personal and institutional accountability within the government, so as to lend credence to the anticorruption effort. In the interim period, the authorities should concentrate on assuring the effectiveness of the anti-corruption committee, and should further take steps to improve government procurement procedures as a complement to the expenditure management measures already taken. The full PRSP would also benefit from a fuller treatment of the question of access to justice by the poor, especially on how the government plans to achieve the availability of "free legal advice." Poverty Monitoring 19. Guinea's poverty reduction policies are based on decentralized service delivery whereby monitorable benchmarks are set to keep track of service delivery outcomes. A small monitoring and evaluation team established under the Ministry of Economy and Finance has direct responsibility for monitoring overall service delivery. The evaluation component is carried out mostly as an independent activity to be contracted out to a qualified organization, including universities and non-governmental organizations (NGOs). 20. To assist the recently launched Village Communities Support Program (VCSP, 1999) and the Capacity Building for Service Delivery Program (CBSD, 2000), a baseline service delivery survey (BSDS) is being carried out. In addition to building measurement and analytical capacities, a budget/expenditure tracking exercise is being introduced, which would help measure the actual spending that reached the intended facilities and to proxy public sector efficacy by a simple indicator-the ability of the public sector to translate budgetary allocations into actual spending for the intended purpose. The staffs believe that the implementation of these programs, with the active support of IDA, will considerably enhance the government's capacity to monitor progress made in reducing poverty. 21. The Guinea DNS (Direction Nationale des Statistiques) - with the assistance of donors - proposes the strengthening of its capacities within the framework of an Integrated System of Statistical Information on Poverty Reduction (SISIRP). In addition, 6 the DNS plans to create a Poverty Observatory responsible for monitoring the indicators mentioned in the PRSP. It is alsc important that the government spell out in the full PRSP the scope and content of the master plan for statistics that would improve the process of decision making by policy makers. The full PRSP should furthermore spell out the key elements of the debt management strategy that Guinea intends to implement. Consultation and Participation 22. Guinea has a well-established participatory tradition with a range of different forms of participation. As indicated above, the NHDP and the CAS were both based on in-depth consultations with beneficiaries. The results of these consultations, and the beneficiary ranking of priorities, have also informed the choice of policy priorities. The authorities are committed to the principle and practice of active participation, as demonstrated in their approach to putting together the I-PRSP, including a first round of consultations with civil society through a series of five seminars in different parts of the country. As pointed out in the I-PRSP, the government plans on continuous, more in- depth, and more systematic participation by civil society, as well as the introduction of a permanent consultation mechanism. However, the I-PRSP provides limited detail on the participatory processes envisaged for the full PRSP. Participation in the poverty reduction strategy should be structured in a meaningful and sustainable way, drawing on recent participatory experiences to ens; .-e broad ownership of the strategy. 23. The authorities also regularly consulted donors and sought their views on key areas of policy in the course of preparing the I-PRSP. It is expected that donors will be closely associated with the consultative process of preparing the full PRSP and will provide needed technical and analytic support. Timeframe 24. As indicated in the I-PRSP, the full PRSP should be completed by end-2001. This schedule may be ambitious, particularly given the need to integrate the qualitative results of participative exercises, as well as any newly available quantitative poverty data, into the existing strategy and to translate these revisions fully into the MTEF. Moreover, although some donors have indicated their willingness to provide financial assistance for the consultative process, financing has not yet been identified for all aspects of the process. Maintaining the origina! schedule will thus require considerable coordination and efforts to ensure that the necessary financial resources are available as needed. Risks 25. The I-PRSP discusses the risks attached to the proposed approach, which include the possible difficulty in ensuring the availability of appropriate additional financial resources for implementing the poverty reduction strategy, and attaining the ownership of the strategy and policies in the country. Other risks inherent in the process, which have not been explicitly dealt with in the I-PRSP, include: (i) the possible difficulty of fully overcoming the underlying causes of slippages in implementing policies that characterized economic performance in the past; (ii) the possible difficulties of 7 significantly enhancing revenue mobilization and thus increasing the resources available for the poverty reduction strategy; (iii) the difficulty of ensuring that administrative decentralization is successful, and that the local governments have the human and financial resources necessary to assume their intended role in the poverty reduction strategy, while maintaining fiscal discipline at all levels of government; and (iv) the possibility of strong resistance from vested interests. 26. Moreover, the past politic,al system has left a legacy of deep mistrust of the State. Failure on the part of the government to build up the confidence of the population in the role of the State and in its commitment to the effective implementation of the poverty reduction strategy may undermine efforts to fight corruption, and thus reduce the credibility of the government's entire program. Further exogenous risks that negatively affect growth, macroeconomic stability, fiscal targets, and related benchmarks include the possibility of terms of trade shocks, and the threat of a major deterioration related to the civil disturbances and rebel incursions arising from the conflict situation in neighboring countries. The authorities will need to be prepared to adjust their policies to exogenous shocks, as appropriate. It would be desirable if the authorities could outline how they intend to reduce the poor's vulnerability to such exogenous shocks and how they intend to help them cope with adverse shocks when they occur. 27. The I-PRSP stresses the importance of taking steps to build human and institutional capacity at all levels of government. Successful execution of these programs, which are actively supported by the World Bank and other donors, should help mitigate the risks of policy slippages and contribute to success in transferring responsibility for service delivery to decentralized institutions. Conclusion 28. The staffs of the World Bank and IMF consider that this I-PRSP provides a sound basis for the development of a fully participatory PRSP, for reaching the decision point under the Initiative for Heavily Indebted Poor Countries (HIPC Initiative), and for Bank and Fund concessional assistance. The staffs recommend that the respective Executive Directors of the World Bank and the IMF reach the same conclusion. 8 Key Bank/Fund events, December 2000 - December 2001 Event Tentative Board Date Structural Adjustment Credit (SAC) IV March 2001 New three-year PRGF arrangement March 2001 CAS progress report March 2001 Education for All Project April 2001 Presentation of the full PRSP December 2001 REPUBLIC OF GUINEA Labor - Justice - Solidarity INTERIM POVERTY REDUCrION STRATEGY PAPER October 2000 Interim Poverty Reduction Strategy Paper: Republic of Guinea Page 7 1. Introduction 8 II. Poverty in Guinea A. The concept of poverty and people 's perceptions of poverty 8 B. The poverty profile 8 C. The determining factors in poverty 12 III. The current strategic framework 21 A. The macroeconomic framework 21 B. Bolstering the private sector 22 C. Medium-term expenditure framework (CDMT) 23 D. Rural development 23 E. Decentralization 25 F. Specific poverty reduction initiatives 26 IV. Poverty reduction objectives and strategies 28 A. Macroeconomic stabilization and growth 30 1. Macroeconomic policies 30 a) Fiscalpolicy 31 b) Monetary, financial, and exchange policy 32 c) External debt management 33 d) Subregional integration 33 2. Support for the main growth-oriented sectors 34 a) Support for the rural sector 34 b) Mining sector 36 c) SMEs/SMIs and employment promotion 36 d) Basic infrastructure development 38 B. Development and access to basic services 39 1. Education 40 2. Health, nutrition, and HIV/AIDS 40 3. Water, sanitation, and housing 42 4. Electricity 42 5. Transportation infrastructure 43 6. Gender and equity 43 C. Improving governance and capacity-building 46 1. Better allocation and transparency in resource management 46 a) CDMT and priority sectors 46 2 b) Decentralization for better-quality expenditure 47 c) Transparency and action to combat corruption 48 2. Participatory process and institutional and human capacity-building 48 a) Participatory process, decentralization, and beneficiary involvement 49 b) Strengthening ofjudicial capacities 50 V. Debt relief, resource allocation for the social sectors and medium-term indicators 51 1. Debt relief and resource allocation for the social sectors 51 2. Medium-term indicators 53 a) Basic education sector 53 b) Health sector 54 c) Village water supply 54 d) Rural roads 55 V Risks 55 VII Plan for preparation of the Poverty Reduction Strategy Paper 56 3 Annexes: Annex 1: Government poverty reduction policy statement Annex 2: Matrix of poverty reduction strategies and policies Annex 3: Poverty reduction strategy preparation plan: Period June 2000-March 2002 Annex 4: Sampling and results of consultations for the Country Assistance Strategy (CAS) Annex 5 Cost of priority actions for the education and health sectors Annex 6: Evolution of spending in priority sectors, 1995-2000 Annex 7: Village water supply 4 Acronyms and Abbreviations AIDS Acquired immune deficiency syndrome APEAE Association des Parents et Amis de l'Ecole BCRG Central Bank of the Republic of Guinea CDMT Cadre des Depenses a Moyen Terme [Medium-Term Expenditure Framework] CRD Communaute Rurale de Developpement [Rural Development Community] DNB Direction Nationale du Budget [National Budget Directorate] DND Direction Nationale de la Douane [National Customs Directorate] DNI Direction Nationale des Imp6ts [National Tax Directorate] DNP Direction Nationale du Plan [National Planning Directorate] DNS Direction Nationale de la Statistique [National Statistics Directorate] EDS Enquete Demographique et de Sante [Population and Health Survey] EIBC Enquete Integrale Budget-Consommation [Comprehensive Consumption Budget Survey] (1994/95) GDP Gross domestic product GF Guinean franc GNP Gross national product HIV Human immunodeficiency virus IDA International Development Association IMF International Monetary Fund LADP Letter ofAgriculture Development Policy MEF Ministry of Economy and Finance MEPU/EC Ministry of Pre-University and Civic Education MHE Ministry of Water Resources and Energy MPC Ministry of Planning and Cooperation NAFA Second-chance schools NGO Nongovernmental organization O1HADA Organisation pour I 'Harmonisation du droit des Affaires [Organization for the Harmonization of Business Law in Africa] PACV Programme d'Appui aux Communautes Villageoises [Village Community Support Program] PAIB Programme d'Appui aux Initiatives de Base [Grass Roots Initiatives Support Program] PNDH Programme National de Developpement Humain [National Human Development Program] PPP Purchasing power parity PRCI Projet de Renforcement des Capacites Institutionnelles [Capacity-building for Service Delivery Program] PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper RGPH Recensement General de la Population et de l'Habitat [General Population and Housing Census] SAG Strategie d'Assistance a la Guine'e Country Assistance Strategy] SFD Systeme Financier Djcentralis6 [Decentralized Financial System] SISIRP Systeme d'Informations Statistiques Integrepour la Reduction de la Pauvrete [Integrated Statistical Information System for Poverty Reduction] SMEs Small and medium-sized enterprises SPTD Service Public de Transfert des Dechets [Public trash removal service] STD Sexually transmitted disease UNDP United Nations Development Program VAT Value-added tax WB World Bank 6 I. Introduction 1. The need to improve the overall framework for its economic development prompted the Guinean government, at the start of the Second Republic in 1985, to implement a comprehensive program of economic and financial reforms. This program was aimed at promoting rational development of the country's potential by reducing macroeconomic imbalances within the context of a liberalized economic system. 2. Implementation of the stabilization package over the first ten years made it possible to control inflation, make significant progress in the area of public finances, and achieve average rates of economic growth that exceeded the population growth rate. Between 1995 and 1999, for example, the economic growth rate was 4.4 percent on average, while the population grew at a 2.8 percent rate, resulting in a per capita growth rate of 1.6 percent. 3. In addition, the implementation of programs and projects in the social sectors made it possible to increase the gross school enrollment ratio from 29 percent in 1989 to 53.5 percent in 1999, and to reduce the infant mortality rate from 136.3 per thousand in 1992 to 98 per thousand in 1999. Access to safe water improved from less than 30 percent in 1989 to 49 percent in 1999 (Table 2). 4. Despite these gains in social areas, Guinea remains ranked toward the bottom of countries in the Human Development Index published by the United Nations Development Program (UNDP). Between 1992 and 1994, Guinea was ranked 174th out of 174, and in 1999 and 2000, 161st and 162nd out of the 174 countries covered by the Human Development Report. In the health and education areas, the following comparison is telling: in Guinea, the infant mortality rate was 98 per thousand and the net primary school enrollment ratio 41.5 percent in 1999, as against averages of 106 per thousand (1998) and 56.2 percent (1997), respectively, for sub-Saharan Africa as a whole. For all developing countries taken together, these indicators were 104 per thousand (1998) and 60.4 percent (1997), respectively (see Table 1). To this must be added the challenge represented by the stealthy advance of AIDS in Guinea: in 1998, HIV prevalence in the adult population was estimated at 2-4 percent. This epidemic threatens to reach proportions that will undermine the country's entire economic and social equilibrium. 5. Furthermore, the poverty profile prepared in 1994/95 revealed that 40.3 percent of the population was still living below the poverty line, defined at the time as approximately US$300 per person per year. This situation would appear not to have improved. Indeed, in recent years the overall performance of the economy has been uneven, characterized by phases of progress followed by sizable slippages. Such a situation is a serious impediment in the fight against poverty, and falls well short of the country's natural and human potential and of the expectations of the Guinean people. 6. For these reasons, between 1996 and 1998 the government formulated an overall vision of development, set forth in the document entitled "Guinea, Vision 2010" and based on the principles of justice, accountability, solidarity, and participation. Its ultimate objective was to improve the living conditions of the population. 7 7. To make this vision operational, the government has, on the basis of broad-based consultation with the people and civil society, formulated a National Human Development Program (PNDH) and participated in the definition of the World Bank's country Assistance Strategy (CAS). 8. It is in this spirit that various programs and projects have been initiated and implemented in the sectors of education, health, water supply, agriculture, and transportation. However, the limited effectiveness of these programs rapidly became clear, owing to the absence of a coherent strategy garnering the support of all players. In these circumstances, it has become imperative to develop a cohesive framework for economic and social development policies and programs. 9. The government's objective is to devise and implement an integrated approach to the problem of combating poverty by developing a strategy that will serve as the framework for all development policies and programs. 10. This new approach will be based on (1) objectivity in decision making (need for reliable information); (2) a global approach to examining and prioritizing actions; (3) participation and accountability; (4) efficiency and effectiveness in the provision of public services; and (5) transparency in administering public affairs. 11. This paper sets forth the broad outlines of that strategy and centers on the following lines of approach: analysis of poverty in Guinea; review of the existing strategic framework; poverty reduction objectives and strategies (macroeconomic stabilization and growth, development and equitable access to basic services, good governance, and capacity-building); the risks associated with implementing the Poverty Reduction Strategy Paper (PRSP), and the plan for drawing up the final PRSP. II. Poverty in Guinea A. The concept of poverty and people's perceptions of poverty 12. The concept of poverty encompasses vast life issues; some are quantitative in nature (income levels, for example), while others are essentially qualitative (access to basic services). Consultations held early this fiscal year revealed that the people perceive poverty in terms of lack of jobs and low income levels, limited access to basic social services (education, health, etc.), poor quality of public services, exclusion of the handicapped, inadequate basic infrastructure, scant participation in decision making, etc. These perceptions of poverty have an impact on the approaches adopted for consideration and preparation of the PRSP. B. The poverty profile 13. Poverty in Guinea is a multidimensional phenomenon unevenly spread among the various socioeconomic groups and the various regions of the country. Despite some progress in recent 8 years, the various indicators of the different dimensions of poverty remain sources of concern. The tables that follow allow for international comparison (Table 1), a trend analysis (Table 2), and analysis of the differences between geographical areas in Guinea (Table 3). 1. Poverty by area of residence 14. Map 1 shows the level of poverty in the various prefectures of Guinea on the basis of a composite index reflecting 15 socioeconomic variables (number of water points per 100 km2, percentage of dirt roads repaired or built, percentage of passable roads, electrification rates, number of private telephones, surface area of improved bottomlands, surface area of improved plains, total cultivated land per labor force participant, proportion of farmers covered by projects, number of inhabitants per health center, number of inhabitants per doctor or nurse, gross school enrollment ratio, number of inhabitants per civil servant, amount of wages, retirement payments, and pension paid per person, and amount of investments planned by rural development communities (CRDs). This map shows that the prefectures in the northwest and northeast of the country (Haute Guinee and Moyenne Guinee) are poorer than those on the Atlantic coast and in the southern part of the country. This band of poverty is generally characterized by a low degree of urbanization, undeveloped infrastructure and scant production and communications equipment, and a lower concentration of health, education, and agricultural services. 15. The incidence of poverty is twice as high in rural areas as in urban areas, and 7.8 times higher than the poverty level in Conakry. In urban areas, despite a lower incidence of poverty, a number of problems continue to be acute. In particular, some urban zones are overpopulated and poorly served by urban infrastructure (transportation, schools, health centers, municipal services, etc.). These urban problems are compounded in particular by urban drift and the rapid expansion of population centers. 2. Poverty by income level 16. In income terms, in 1994/95, 40.3 percent of the population had a consumption level below the national poverty threshold, estimated at about US$300 per person per year. The consumption of the poorest 20 percent of individuals represented scarcely 7 percent of total consumption, and that of the next 20 percent represented 10 percent of the total, while the wealthiest 20 percent consumed 47 percent of the total (Gini coefficient of 0.33). 17. Some regions are more affected by poverty than others. On the basis of 1994/95 consumption expenditure, the incidence of absolute poverty in Haute Guinee and Moyenne Guinee was estimated at 62 percent and 51 percent, respectively. The incidence was 42 percent in Basse Guinee, 33 percent in Guinee Forestiere, and 7 percent in Conakry (Table 3). It would thus appear that poverty is markedly more pronounced in these regions than in Conakry. 18. However, the income gap between the wealthiest and the poorest is considerably greater in Conakry than in the four regions. Moreover, within each region, the gap is more pronounced in the urban centers than in rural areas. 9 3. Poverty by access to health care 19. Life expectancy at birth was 54 years in 1999, up from the 45 years recorded in 1983. The infant mortality rate, child mortality rate (children under the age of 5), and maternal mortality rate all declined significantly between 1992 and 1999, from 136 to 98 per thousand, from 229 to 177 per thousand, and from 666 to 528 per 100,000, respectively (Table 2). There are relatively sizable swings in these health indicators from one region or socioeconomic category to another. 20. As Table 3 shows, health conditions are a significantly greater concern in rural areas than in urban areas (for example, the rate of child mortality is 148.7 per thousand in urban areas, as against 210.6 per thousand in rural areas). The proportion of children who have been fully vaccinated is 51.1 percent in Conakry, while in Moyenne Guinee it is only 22.4 percent. 21. Child mortality, for the most part associated with infectious diseases (malaria, respiratory infections, and diarrhea) and with nutritional deficiencies, remains higher in Haute Guinee and in Guinee Forestiere than in other regions. This difference in mortality rates may be explained in large measure by shortcomings in the care for the sick, given that the prevalence of infectious diseases is relatively homogeneous across all regions. Iodine deficiency and anemia are also widespread among women (60 percent of pregnant women are anemic). 4. Poverty by AIDS * In Guinea, the cost of treating AIDS is US$480 in public hospitals and US$1,190 in semipublic hospitals, for an average hospitalization of 21 days. This corresponds to an average cost of US$560, some 20 percent of which represents direct costs (consultation, hospitalization, laboratory, X-rays, and medicines) and 80 percent indirect costs (electricity, telephone, water, food, and funerals). * On the basis of this average cost, estimated in 1995, hospital treatment for all AIDS victims will cost US$12 million in 2000 and US$21 million in 2005. * The most productive segment of the population, spanning all socioprofessional categories, will be hardest hit. All activity sectors (industrial, agricultural, government, etc.) will be affected by a significant reduction in qualified labor, an increase in spending, and a decline in incomes. 5. Poverty by access to education 22. Despite the significant progress made over the past ten years, the level of school enrollment remains low. In 1999, the gross primary enrollment ratio was 53.5 percent, as compared to 29 percent in 1989. According to data from the 1996 population census, only 25 percent of the population over age 15 is literate. The Moyenne Guinee and Haute Guinee regions have the lowest literacy rates, at only about 13 percent in Haute Guinee and 19 percent in 10 Moyenne Guinee, as against 23 percent and 26 percent, respectively, for Guinee Forestiere and Basse Guinee. In urban areas, male and female literacy rates were 60 percent and 36 percent, respectively, while these rates were 25 percent and 6 percent, respectively, in rural areas. 23. While the education of children is strongly associated with parental income level, there is also a strong correlation between the level of poverty and the head of household's education level. In 1994/95, 62 percent of families headed by an illiterate were situated below the poverty line, as compared to 42 percent for households headed by an individual with primary education and only 5 percent of those headed by someone with a university education (according to the Comprehensive Consumption Budget Survey (EIBC)). 6. Poverty by socioprofessional category 24. Farmers in the subsistence food crop subsector appear to be the least well-off. This group alone accounts for 68 percent of the poor. The next-largest group is made up of export crop farmers, while wage earners and those working in informal trade are less affected by poverty (Figure 1). Overall, farmers represent 61 percent of the population but over 80 percent of the poor. These results underscore the need to focus on development of the agricultural sector and rural areas in general in any undertaking intended to reduce poverty. 25. The poor earn most of their income from agricultural work (almost 67 percent) and jobs in the informal sector. They devote nearly 62 percent of their household budget to food, and a marginal share to medical care and educating their children. 7. Poverty by gender 26. A gender analysis of poverty also shows sizable disparities, to the disadvantage of women. In the field of education, the gross primary school enrollment rate in 1999 was estimated at 67.6 percent for boys as compared to only 39.9 percent for girls. Adult literacy (age 15 or over) was measured at 15 percent for women and 37 percent for men (data from the 1996 population census). 27. In addition to the unfavorable situation of women as regards education noted above, women also suffer from a disadvantage in terms of hours worked, owing to the combined total of family and professional activities. Women in agriculture have a workload ranging from 15 to 17 hours a day. In addition, women's work is made more onerous by the lack of tools, the low degree of processing of food products, and the distances to water points and sources of firewood. In addition, although they account for nearly 80 percent of the country's food crop production, women have only limited access to credit and to land tenure. 28. In urban areas, women are penalized in terms of wage-earning jobs. They hold 22 percent of the jobs in the public sector and 11 percent of jobs in the formal private sector. They are underrepresented in political life, and account for less than 10 percent of the members of parliament and members of government. 11 29. Moreover, because of the influence of sociocultural values, the opportunities for social advancement available to women are limited in a number of ways, both within the family and at the community level, as their access to land ownership (boys are frequently the sole heirs of family property), housing, education, categories of professional activity, the decision making process, etc., is restricted. These constraints impede the advancement of women, on the individual and collective levels, and are determining factors in the particular type of poverty lived by a sizable majority of Guinean women. 30. In the final analysis, poverty is considerably more pronounced among women, whether one speaks of access to education, formal employment, or income, or of working conditions or the distribution of responsibilities (the social responsibilities associated with procreation and maintaining the family make considerable demands on women that are not evaluated in the creation of wealth, and consequently are not compensated in any way). 31. As regards the living conditions of women (80 percent of the poor live in rural areas, and 53.3 percent are women) and their representation in the population (51 percent of the population is female), the poverty of Guinean women would appear to be a societal phenomenon and not simply a gender phenomenon. The problem therefore requires a new approach, both in terms of perceptions and in terms of the solutions sought. 8. Interdependencies between different dimensions of poverty 32. The gross primary school enrollment ratio is only 28 percent for the poor as against 64 percent for the nonpoor. Children of farmers are at the greatest disadvantage, with only 19 percent of children in school (EIBC, 1994/95). This kind of inequality may also be observed in access to health services. It would appear that poor households have less access to health care: only 12 percent of the poorest 20 percent turn to the public health services when they are ill, as compared to over 50 percent for the wealthiest 20 percent. The low degree of access to health care on the part of the poorest appears to result from their low incomes, on the one hand, as well as from the scarcity of nearby health services in rural areas, on the other (Table 3). Similarly, there is a significant interconnection between the education level of mothers and their childrens' health, with an.infant mortality ratio twice as high among uneducated mothers (112 per thousand) as among mothers with secondary education (61 per thousand, Population and Health Survey (EDS), 1999). C. The determining factors in poverty 33. Poverty depends upon the structure of the economy, the focus of public action, and its implementation through an institutional framework encompassing the family, the community, the government, and markets. 34. One of the determining factors in poverty appears to be associated with the centralized administration that prevailed in Guinea for many years. The culture developed in those years favored a wait-and-see attitude on the part of the people and stood in the way of changes in behavior compatible with the implementation of policies aimed at reducing poverty. Moreover, 12 there was a paucity of tools and incentives aimed at promoting an increased productive effort by the population, and weaknesses in the institutional framework for fornulating and implementing development strategies. 35. Poverty may be traced in part to the scarcity and distribution of the resources (both financial and human) available for the development of infrastructures and the supply of basic social services. In 1991, for example, schools were an average of 16 kilometers from residences in the Haute Guinee region, 12 kilometers in Basse Guinee, 11 in Moyenne Guinee, and 8 in Guinee Forestiere. Moreover, only 56 percent of the population outside Conakry lived less than 5 kilometers from a health post or health center, and 19 percent lived more than 10 kilometers away. Access to safe water was also lower in rural areas (45 percent of households had access to it in 1994/95, Table 3) than in the cities (49 percent for the same period). 36. The same inequalities may be observed in the allocation of human resources. Thus Conakry, with less than 20 percent of Guinea's population, employs 48 percent of the country's doctors, 51 percent of its midwives, and 39 percent of its nurses. 37. There is also a quite pronounced difference between urban and rural areas in terms of access to production factors. For example, in 1996, fewer than 1 percent of rural households used electricity as the principal source of lighting, as compared to 87 percent in Conakry and 30 percent in the other towns (Table 3). In addition, the proportion of households with access to mechanized agricultural equipment is insignificant, and only 10 percent of households have animal traction tools (EIBC, 1994/95). The same is true as regards transportation equipment in rural areas, where only 0.4 percent of households have an automobile and 3 percent a motorcycle (compared to 11 percent and 4 percent in Conakry, and 6 percent and 16 percent in the other urban centers, respectively, EIBC, 1994/95). The processing of agricultural products for sale is also a very limited activity, engaged in by only 5 percent of households (EIBC, 1994/95). 38. The isolation of some areas and the high cost of transportation thus also appear to be important factors in poverty. Indeed, they limit access to the markets needed for selling produce, reduce the competitiveness of products, and increase the cost of inputs required for production. 39. Improved access to such areas, public investment in the areas that have shortages of equipment and infrastructure, a redeployment of basic services, and an effort to improve agricultural techniques would thus appear to be key to reducing poverty in the rural areas that are home to the poorest groups of people in the country. 40. Access to credit seems to be a major obstacle to the creation of enterprises and activities. The shortage of capital or credit was cited by 37 percent of respondents active in the nonagricultural informal sectors as a major obstacle to the creation of enterprises (EIBC, 1994/95). Thus the major source of funding for developing businesses is still individual or family savings (74 percent); private banks, credit institutions and tontines are used by only 3 percent of those surveyed. By comparison, the lack of market outlets is cited by only 7 percent. 41. In sum, the major obstacles to the development of economic activities cited so far relate to the following factors: 13 * Inadequate infrastructure: - Paved roads, dirt roads, and bridges - Communications - Energy * Inadequate basic social services: - Education - Health - Water supply points * Low access to physical capital and to the techniques necessary for production: * Access to land, and secure land tenure * Access to credit * Access to production tools (farm machinery, etc.) * Access to improved agricultural techniques (farm extension services) * Human resource training poorly adapted to the labor market * Administrative weaknesses: - Limited services offered, sometimes of poor quality - Lack of support for the development of private sector economic activities (absence of secure land tenure, complicated formalities, lack of readily accessible public services, etc. ) 42. The poor performance of the economy and the persistence of institutional, legal, economic, social, and financial obstacles have also lessened the impact of public efforts aimed at reducing poverty. An analysis of these policies in hindsight reveals a number of obstacles to their implementation: * Insufficient budgetary resources, the poor allocation thereof, and the inadequate management of public expenditure. Guinea continues to be characterized by poor mobilization of budgetary resources and deficiencies in the system for managing public expenditure. Moreover, the revenue level and slippages in the management of public expenditure have prevented the substantial allocation of resources required to combat poverty effectively. Despite the introduction of a medium-term framnework for expenditure, the impact of improved management of public expenditure has not yet been reflected in a significant reduction in poverty. * The lack of transparency in resource management and the " culture of impunity," which have worked in favor of misappropriations of public funds and corruption. * The low institutional capacity of public agencies and the fragility of basic public services. * The low degree of ownership of development programs felt by Guineans and the poor coordination of development initiatives. * The lack of equitable access to the resources available (geographical or financial exclusion). * The scant involvement of recipients in political, economic and social decision making at the national and local levels, and policy implementation and monitoring. The level 14 of involvement of the people has heretofore been limited to simple consultation for purposes of determining priorities. The largely centralized management of public expenditure has done nothing to increase the accountability of local governments and the people in economic and social development. It should also be noted that civil society does not yet have all the skills it needs to engage in a true partnership with the central government and the other players in development. 43. This poverty profile is limited by the absence of recent data that would have made it possible to monitor the evolution of poverty and its characteristics. Moreover, detailed studies on individual subjects (in particular on employment), a modeling of household behavior in respect of health, education, and housing, and an analysis of the recipients of basic services would allow for greater understanding of the phenomenon of poverty and its determining factors. Such steps are provided for in the plans set forth in Section VI and Annex III of this document, and will make it possible to enrich the analysis in the final Poverty Reduction Strategy Paper. The participation of many users of data in this effort (in particular, departments and the university) will help improve the structure and quality of the information and analysis. 44. Guinea thus has two population and health surveys (1992 and 1999), one comprehensive household survey (1994/95-a new survey is scheduled for 2001/02), one recent agricultural survey (2000), and other more specialized surveys. Furthermore, it will be advisable for future investments and programs to be monitored systematically and evaluated in order to clearly identify their impact. Such analyses will be used to reorient certain activities, in particular to favor the poorest population groups and ensure that new activities have a maximum impact in terms of reducing poverty. Monitoring and evaluation activities should therefore be an integral part of all the activities called for under the strategy. Explanatory note: Poverty level in the prefectures (composite index) Map I presents the incidence ofpoverty as reflected by a composite index of the socioeconomic constraints to development. Fifteen indicators are used, each with a threshold corresponding to a poverty criterion. The indicators and their respective values are as follows: number of water points per 100 km2 fewer than 5; percentage of dirt roads repaired or newly built less than 40 percent; percentage ofpassable roads lower than 30 percent; electrification rate of less than 3 percent; number ofprivate telephones equal to 0; surface area of developed bottomlands less than 100 hectares; total area under cultivation per member of the labor force less than 1.8 hectares; proportion offarmers covered by projects less than 10 percent; number of inhabitants per health center in excess of 22, 000; number of inhabitants per doctor or nurse in excess of 7, 000; gross school enrollment ratio less than 42 percent; number of inhabitants per government worker in excess of 293; amount of wages, retirement payments, and pensions paid by the government less than GF 13,800 per person; and amount of investments planned by CRDs less than GF S0 million. A zone is ranked as Priority I ifat least 10 of these criteria are met (6 prefectures), Priority 2 if8 or 9 criteria are met (9 prefectures), Priority 3 if 7 criteria are met (5 prefectures), and Priority 4 iffewer than 7 criteria apply (14 prefectures). Source: Republic of Guinea, Ministry of Planning and Cooperation, "Establishment of a poverty map of the Republic of Guinea, " March 1999. 15 Table 1: Economic and Social Development Indicators: International Comparison (1) Guine Countries in subregion Develop- Less Sub- Indicator Year Gume Cote ing developed Saharan a dd'Ivoire Senegal Mali Ghana countries countries Africa Real per capita GDP ($, PPP) 1998 1782 1598 1307 660 1735 3270 1064 1607 ........... ... ......... .... ..... . .......... ...... ......................................... ........ ....... ....... ................ ....................... . ................................. ............ ... ............ ... .......... ............................................... .................................- -......... ............ ........... ...... . .............. ........ .. ... ....... . Per capita GNP ($) 1998 530 700 520 250 390 1250 270 530 ...... ............................. ....................I - .-..... ............... .............. -.... ............. .... ........... .... .... ... ................... . ........ -.... ................................. .......................... ..... ........ ..................... I........ .................. ... .... ...... .......I...........1 ...... ..... ... . .. Life expectancy at birth (years) 1998 54 () 46,9 52,7 53,73 60,4 64,7 51,9 48,9 Infant mortality rate (per thousand) 1998 98 (4) 90 70 144 67 64 104 106 -........................ . . . . I................ ............. . .... . ... I ......... ............. ..........- ..1 .................... .............. ....... ........... ........... .... -- 1..... ............... .... ............ ... ...... ...... ... ... ................. ...... ......... ................. ............... . ..........I................ ...... . Child mortality rate (per thousand) 1998 177 (4) 150 121 237 105 93 161 172 ,... ............ .........................-...--................ -............................. ... ........I ........ .................................... .......-.-.I.-..-I........................................ ... ......... Maternal mortality rate (/100,000 live 1990-98 525 (4) 600 560 580 210 births) Population without access to health 1981-93 (2) 55 40 60 80 75 services (°/) Population without access to safe water (lo) 1990-98 (2) 52(6) 58 19 34 35 28 36 46 II ......... ........ ..... .......... ..... .. ....- -........................ ..... ..... ................. .... ... ... .. .................................. ....................... ................. .. .... ............ ...... ... ...... .. 1 -............... . - ...... ...... ............. ....... .................. ................ Net primary enrollment ratio (%) 1997 41_5(5) 58,3 59,5 38,1 43,4 85,7 60,4 56,2 ........... ...... - . ........................................................ - -........................ ... ....... ...... ........... .... ............................ ....... ... ............. ...... .... .1 1-......... ..... I..................... ..... .......... ..... .... . .................. .. ....... ............I .1 1I ......... ..............- - . Adult literacy rate (%) 1996 2.55) 44,5 35,5 38,2 69,1 72,3 50,7 58,5 (1) Unless otherwise indicated, data are drawn from the Human Development Report 2000 of the UNDP. See acronyms and abbreviations for definition of sources. (2) Latest year available during the period indicated (3) RGPH, 1996. (4) EDS, 1999. (5) RGPH, 1996. (6) EIBC, 1994/95. 16 Table 2: Evolution of Development Indicators in Guinea 1985-1995 F1 9-99 ior latest F ~~~~year available Economy and public expenditure Per capita GDP (PPP $) 1446 (1985- 1785 (1997) 95,) Growth rate ofper capita GDP ('lo) .(9890 16(9599 ----.--------.------.--.---.......--..-~~~~~~~~~~~~~ ~ ~~~~~~~~~~ ~ ~~.-. ... ... --. ...-..... ........ . .. ................ ......994....-.. .... . . 1 4.0---- (1998)... ....... Public expenditure rlo GDP,)174194140(98 95) Current expenditure on health (%o GDP) 1.6 (i994-95) 1.6 (1998) Current expenditure on education (lo GDP,) 0.3 (1994-95,) 0.4 ('1998,) Health Annualpopulation growth rate (%l) 2.8 (1995-98) Composite index offertility (children per woman, A) -5.7 (1992) 5.5 (1999) Life expectancy at birth (years, B) 45.1 (1983) 54 (1999) - 136,3(1992) 98 (1999,)~~~~~~~~~~~~~~~...... ............ ......... . ... .... ...........- ... ... . .. ....................... Infant mortality rate (per thousand, A) 163(92 8(99 Child mortality rate (per thousand, A) 229 (1992) 177 ('1999,) . - - ----......I. .. . .... ... ... - . . .... .'- , '.... -5 2 (' 1 9 9 9).......... ... .......... . Maternal mortality rate (per 1 00, 000 live births, A) 666 (1992) 58(99 Children underweight for their height (9/%, C and A) 12 ('1994/95,) 9 ('1999,) Children wo are short for their age (0/%, C and A) 2 1915 6(99 Children with no immunizations (lo, children 12-23 mos., A) 36 (1992) 21 ('1999,) Pysiia-or midwife-assisted births (lo, A)305(92348(99 Sexually active women using contraception (lo, A)48 92)62(99 Education Gross primary enrollment ratio of girls ('I, D) 20 (1991/92) - 40 (1998/99) Gross primary enrollment ratio of boys (lo, D,) 45 ('1991/92,) 68 (1998/9 9) Female literacy rate (lo, B) 15 (1996) Male literacy rate (%l, B)37(96 Access to basic services Access to safe water (%/, B and E,) 29 (1989) 49 (1999) Access to electricity (lo, A and B,) 12.5(1996) 16.4 (1999) Sources: A: EDS 1992 and 1999, B: RGPH 1983 and 1996, C: EIBC 1 994/95, D: MEPU/EC, E: MHE. See acronyms and abbreviations for definition of sources. 1 7 Table 3: Poverty Indicators in Guinea: Regional Variations____________ ___ UrbanGuh Ttl areas Rural Cnky Basse Moyenne Haute Guones *excl. areas Guinie Guinie Guinde e _ _ _ _ C onalry _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ jtl r Incomeslspending Incidence (%o with less than $300 per person per year, B) 40 24* 52 7 42 SI 62 33 Depth (gap between spending and $300 per person per year, %o, B) 1 3 7 * 1 8 1 1 4 1 7 239 Share of nationwide poverty (%o, B) 100 9* 88 3 22 28 32 1 5 Share offood in total spending (lo, B) 5Q 43* 61 36 Si 61 55 57 Health Infant mortality rate (%o, A) 98 79 116 74 92 100 129 126 Physician- or midwife-assisted birth (lo, A) 35 76 22 85 33 18 21 37 Children with no immunizations (lo, 12-23 mos., A) 21 6 26 4 15 28 36 16 Children suffering from chronic malnutrition (lo, 3-59 mos., B) 29 22* 33 19 31 30 29 33 Sexually active women using contraception ('I, A) 62 13.9 3.4 13.1 4.8 2.6 68 6.5 Composite index offertility (children per woman, C) S 6 4.1 6 0 3.6 5.0 5.9 6 4 5.2 Education Female literacy rate ("l, C) 15 36 6 43 13 8 6 12 Male literacy rate (lo, C) 37 60 25 63 39 30 20 34 Gross primary enrollment ratio of girls ('I, C) 38 68 24 74 36 25 24 41 Gross primary enrollment ratio of boys (%l, C) 52 83 40 88 5 1 39 38 58 Access to services Access to safe water (%/, B) 52 f 49* 45801 3 45 47 48 .-- . .-.. . -. . ............--......-- ..... ... ... ... .. .... ........ ... I- ...I.....11 . ..... Electricity as main source of lighting (l%, B) j 9[ 30*L 0 87 14 J3-J 4 2 Other indicators Urban population (lo, C) 30 r 100 0 100 231 916 22 Population density (inhabitants per square kilometer, C) 29 - 2429 31 3 1 14 3 Gross birth rate (per_thousand,_C) 40_30_4 28___ 41 _ 4248_3 Sources and dates: A: EDS 1999, B. EIBC 1994/95, C. RGPH 1996. See acronyms and abbreviations for definitions of sources. 1 8 Figure 1: Contribution to Total Population and Total Poverty by Socioprofessional Category (EIBC, 1994/95, Category of Head of Household) * Contnbuion a ia populabion totale (%) g Contribution A la pauvret6 totale (%) Subsistence farmer/cattle farmer _0 68 Export crop farmer 13 Not Working/unemployed/ apprentice Independent in informal sector Informal sectorlnonfood retail 6 Informal sectortfood retail r 5 Formai sectorlwage earner 65 Civil Servant 6 0 10 20 30 40 50 60 70 19 Figure 2: Regional Differences in 5 Dimensions of Poverty Measures: Value of regional indicators in relation to the value in the highest ranking region. Definitions: Incomes (revenus): individuals with more than $300 per person per year; Water (eau): households with access to safe water; Education: primary school enrollment of girls; Childbirth (accouchement): childbirth assisted by a physician or midwife; Vaccination: children who have received particular vaccinations. taucation 1> \ Conakry /80 X Guin6e Forestibre Basse Guinee / 60 / X Moyenne Guin6e Haute Guin6e Vaccination V _ Incomes Childbirth au Source: Table 3. Note: For reasons pertaining to the methodological approaches used by the different sources (EIBC 94/95, RGPH 96, EDS99 and appropriate ministries-see acronyms and abbreviations), there are discrepancies between some of the data in Tables 2 and 3. These concern the level of access to safe water and electricity. In the case of access to services, the most recent data have been used (those from Table 2); Table 3 serves to highlight regional disparities. The discrepancies with respect to enrollment levels are attributable mostly to the dates on which observations for the indicators were made. 20 III. The current strategic framework 45. The current development strategy reflects the policies launched in 1985, as well as the changing economic and social environment in Guinea. The strategy is designed to reduce poverty through sustained, sustainable, and diversified growth, predicated on private sector performance in a broader context of decentralization. The main aims of this strategy are as follows: (1) maintaining macroeconomic stability; (2) bolstering the private sector by enhancing the institutional and regulatory framework for business and further developing basic infrastructure; (3) upgrading basic social services (education, health, and water supply in particular); (4) promoting rural development; (5) achieving decentralization and delegation of authority in the management of public services; and (6) protecting vulnerable and disadvantaged population groups. 46. This framework bears witness to the nation's commitment to fight poverty. It reflects the policies initiated in the late 1980s with the aim of reconciling economic development and social progress. Furthermore, it incorporates the experience acquired in recent years (at the procedural and substantive levels) in the areas of policy implementation and assessment. A. The macroeconomic framework 47. During the period 1996-99, the government pursued a restrictive budgetary policy with a view to achieving fiscal consolidation, while monetary policy was aimed at maintaining low inflation and unifying the exchange rates. 48. These policies have helped to reduce macroeconomic imbalances while ushering in a more stable economic environment. On average, GDP growth in real terms exceeded 4 percent per year during the period 1996-99, while inflation averaged approximately 3 percent during that period (inflation was 4.7 percent in 1999). The primary budget surplus increased from 1.3 ercent of GDP in 1996 to 2.4 percent of GDP in 1998 through the application of rigorous expenditure control. 49. Average investment, as a percentage of GDP, stood at 18.9 percent in 1998 as against 17.5 percent in 1996. This increase was primarily attributable to the upturn in private investment, which rose from 12.5 percent of GDP in 1996 to 15.1 percent of GDP in 1998. The net foreign assets of the central bank were equivalent to 3.1 onths of imports as at end-1999. 50. In spite of these achievements, major challenges remain in store for the Guinean authorities, particularly in the area of budget management, in light of the ambitious poverty reduction agenda. In spite of many reforms implemented in recent years, including the introduction of the value-added tax and the signing of a contract with the SGS to strengthen 21 customs revenue, fiscal revenue performance is quite poor in Guinea (the tax ratio is I 1 percent, compared to an average of 16 percent for all countries in the subregion). This problem of revenue performance is compounded by the issue of tax burden sharing (a sizable proportion of the economy escapes the tax net). 51. The constraints on revenue performance are numerous: lack of a taxpaying culture among Guinean citizens, and deficient tax administration, not to mention the tactics employed by some tax collection officials. 52. In the area of expenditure management, the resource constraints continue to make for difficult trade-offs in the allocation of resources. This has resulted, inter alia, in limited transfers of funds to the decentralized entities and entities with delegated authority. This problem has been compounded by the insufficient allocations and disbursement difficulties experienced in the various sectors. B. Bolstering the private sector 53. Since 1985, Guinea has been engaged in a program of market-oriented economic reforms, aiming to entrust the private sector with responsibility for growth and job creation. In embarking upon a wide-ranging privatization program, the government has thus steadily withdrawn from production and marketing activities. 54. To facilitate this process, accompanying measures have been implemented, including efforts to strengthen the economic infrastructure (transportation, energy, and telecom- munications) and to enhance the legal and regulatory framework governing business, chiefly through the promulgation of laws to promote entrepreneurship, safeguard private property, and ensure a level playing field for domestic and foreign players in the eyes of the law. The establishment of an arbitration board to deal with economic and financial disputes, and the ongoing reorganization of the courts of first instance, with the creation of two financial divisions within the Conakry court of first instance, should also help improve the business climate in Guinea. 55. These arrangements are being supplemented by efforts to rehabilitate the financial and macroeconomic framework and by the introduction of numerous incentives, particularly in the areas of customs and taxation. 56. However, these reforms have had but limited effect: the long-term investments needed to expand and modernize production capacity (particularly in agriculture and processing industries) and to enhance the potential for national development have not had the expected results. Thus, Guinea continues to face persistent problems in achieving growth and alleviating poverty. This is partly attributable to the difficulties associated with (1) the restoration of an ethic of public service conducive to private sector development; (2) the administrative and legal environment, which is a prerequisite for a flourishing private sector; (3) the effectiveness of the institutional support structure (chambers of commerce, industry, and agriculture; employer organizations; the private investment promotion office; and the financial system); 22 and (4) access to information, and the transparency required to facilitate a productive dialogue between the government and the private sector. C. Medium-term expenditure framework (CDMT) 57. The participatory process, involving grassroots consultations in connection with the National Human Development Program (PNDH) and the Country Assistance Strategy (CAS), served to identify the priority sectors for government intervention from the perspective of the general public. To ensure that public expenditure allocation reflected these strategic priorities and to enhance its efficiency, the government in 1997 adopted a medium-term expenditure framework (CDMT). The aim of this expenditure rationalization mechanism was to prioritize resource allocations across sectors and within sectors; and to implement a public service delivery system based on accountability (with ex post evaluation to be provided through the use of objective, measurable performance indicators). 58. The government decided to begin implementation of the medium-term expenditure framework (CDMT) by using it for four priority sectors in 1998 (education, health, rural development, and road infrastructure). In 1999, this application of the CDMT approach was expanded to include three additional sectors (justice, urban development and housing, and social affairs). 59. The proportion of the nonwage operating budget (titles III and IV) accounted for by the first four priority sectors taken together increased from 25.5 percent in 1997 to 29.2 percent in 1998, and 32 percent in 1999. However, partly as a result of the delays involved in mastering the CDMT approach, budget execution levels were less satisfactory in 1998. The rate of execution was 82 percent in 1998 compared to 80 percent in 1997 for education, and 56 percent in 1998 as against 59 percent in 1997 for the health sector. In 1999, the execution rate of the nonwage operating budget for health rose to 65 percent. 60. In tandem with the restructuring of expenditure according to the CDMT approach, the government implemented a package of measures designed to strengthen budget tracking and supervision, to enhance the regulatory framework governing the treatment of public expenditure, and to standardize and simplify budget procedures. D. Rural development 61. The rural sector has been a consistent priority of government policy for the last 15 years. This reflects the importance of diversifying the economy (traditionally dominated by the mining sector) and of reducing poverty in rural areas. The main features of the sectoral policy were identified in 1991 in the Letter of Agriculture Development Policy (LADP 1), and further updated in LADP 2 in 1997. These primarily focus on: * ensuring food security by expanding the volumes of food production and improving distribution channels; * contributing to economic growth and boosting export revenue; 23 * giving people better income-earning opportunities by diversifying production and boosting farm productivity; * promoting private investment in the rural sector through further efforts to withdraw the government from commercial activities and enhance the legal and regulatory framework; * strengthening the efficiency of agricultural projects and services and further developing basic infrastructure; and * protecting the environment and ensuring the rational and sustainable use of natural resources. 62. The implementation of this policy has led to significant progress on a number of fronts. Real growth in GDP in the rural sector averaged 4.1 percent between 1992 and 1997, 5.2 percent in 1998, and 5.5 percent in 1999. With its growth outpacing overall GDP, the rural sector has been especially buoyant in recent years. Food and livestock production has benefited greatly from this dynamic performance (between 1991 and 1997, rice production increased by 26 percent, while the production of corn, cassava, and meat grew by 74 percent, 170 percent, and 48 percent, respectively). 63. In the efforts to boost agricultural exports, coffee, cotton, fruits (pineapple and mango in particular) and hevea rubber are the main products targeted. While the results are encouraging and may point to a more favorable outlook for exports of cotton (30,000 metric tons exported in 1998, compared to 12,547 metric tons in 1995) and hevea rubber, coffee and fruit exports have made limited progress. 64. These results notwithstanding, the challenges involved in developing and modernizing the rural sector remain considerable. The gains in food production primarily reflect the expansion of surface areas under cultivation. The improvement in yields has been negligible: between 1991 and 1995, average yields increased from 1.38 to 1.43 metric tons per hectare for rice, from 0.96 to 1.03 metric tons per hectare for corn, and from 0.87 to 0.91 metric tons per hectare for groundnuts, and decreased from 7 to 6.1 metric tons per hectare for cassava. The low level of private investment and the persistence of traditional practices-partly reflecting low skill levels within the sector-have not been conducive to a reform of the sector leading to a significant reduction in rural poverty and ensuring the rational use of natural resources. The modernization of the production structure is an essential step in reforming rural sector production and productivity. 65. The constraints impeding the rural sector's development are numerous and include the severe decline in production potential (soil, water, and forests), a legacy of farming methods that have remained at a virtual standstill for decades; insufficient rural infrastructure (dirt roads, irrigation facilities, etc.); and deficiencies in the framework governing private sector development (access to land and secure land tenure, access to and cost of financial services, scant support services, etc.). The outlook for the rural sector's development will be largely contingent upon the reforms implemented to overcome these constraints. 24 E. Decentralization 66. The reform of territorial government was initiated in 1986, characterized at first by territorial delegation of government authority to the regional, prefectural, and subprefectoral levels. The subprefectoral level is the basic territorial unit for the state's territorial activities. 67. In the area of decentralization, the reform process led to the adoption of a legal framework and the establishment of decentralized local governments in rural and urban areas. The financial and administrative organization of these entities is governed by laws and regulations as follows: * Ordonnance No. 079/PRG/SGG/86 of March 25, 1986 on the territorial reorganization of the Republic of Guinea and the establishment of the decentralized local governments [collectivites ddcentralisees]; * Ordonnance No. 019/PRG/SGG/90 of April 21, 1960 on the organization and operation of the communal governments [communes] in Guinea; and * Ordonnance No. 092/PRG/SGG/90 of October 22, 1990 on the organization and operation of the rural development communities (CRDs) in Guinea. The current configuration of the decentralized entities is as follows: * 38 urban communes, including 5 communes in the city of Conakry, encompassing 330 neighborhoods; and * 303 rural development communities (CRD's), encompassing 2,300 rural districts. 68. These local government entities are all financially autonomous and have one deliberative body (a communal council in the case of the urban communes, and a community council in the case of the CRDs) and one executive body (a Mayor's Office for the communes, and a President's Office for the CRDs). This decentralization process has been strengthened by the mobilization of civil society in a variety of grassroots organizations (Nongovernmental Organizations NGOs, professional associations and cooperatives, etc.). At this writing, Guinea has 690 domestic NGOs, 78 foreign NGOs, and 3,800 cooperatives and associations. Thus, at the institutional level significant progress has been achieved in decentralizing the development management process. 69. In practice, the process has encountered a variety of constraints, including resistance to change, at the central government and decentralized government levels; limited capacity of the grassroots organizations to design, prepare, manage, or evaluate development projects; and the limited financial resources available. 70. Confronted with this situation, the government in recent years has initiated a variety of grassroots consultations and discussions. This dialogue has highlighted the commitment at the grassroots level to play a role in managing the development process. The Village Communities Support Program (VCSP) and Capacity-Building for Service Delivery Program (CBSDP) for improved delivery of public services are designed to build on this process and to lay the groundwork for sustained and sustainable development aimed at achieving significant reductions in poverty. While strengthening local capacity to design, implement, and manage 25 development programs, these mechanisms have helped to mobilize resources in support of local communities. In addition, the government this year decided to pass the entire amount of the minimum tax for local development on to local governments. F. Specific poverty reduction initiatives 71. It is helpful to review past efforts in the poverty reduction process, in order to analyze their scope and draw the right conclusions, with a view to designing and implementing the new poverty reduction strategy. 72. The need for specific measures to reconcile economic progress and social development emerged from the earliest years of the economic and financial program (PREF). The various social programs initiated at that time (PASE I for education, PEV/SSP/ME for health, and PNIR I for rural infrastructure) reflected this concern. This was also the focus of the pilot community development program for the project to support social and economic development (PADSE), which helped assess the extent of poverty and identified a number of its characteristics (incidence and profile), in particular through the findings of the 1994/95 EIBC. 1. The Human Development Initiative (IDH) 73. Poverty once again became a focus of discussion when Guinea ranked at the bottom of the UNDP Human Development Index in successive years (1992, 1993, and 1994). In 1995, this state of affairs prompted the government to engage in a series of discussions and consultations culminating in the preparation of the National Human Development Program (PNDH), with the assistance of the country's external partners, primarily the UNDP and the Canadian International Development Agency CIDA. The challenge was to place human beings at the center of the development process by considering improvement in prosperity and the quality of life as the ultimate aims of this new approach. 74. Emphasis was consequently placed on securing the large-scale participation of grassroots stakeholders in the development process (local communities, NGOs, etc.), as well as external partners, from the diagnostic assessment phase through to the validation of the PNDH in March 1997. The PNDH has two main focuses, namely, governance and the fight against poverty and marginalization. The PNDH was designed to be implemented through the five framework programs as indicated below: * gender and development framework programn (PCGD); * framework program to support grassroots initiatives (PCAIB); * framework program to support private sector development (PCSDSP); * framework program to support decentralization and strengthen civil society; and * framework program to support macroeconomic management. 2. The SAG initiative 75. In the same vein as the IDH, the Guinean government and the World Bank in 1997 decided to join forces to implement a strategic approach to poverty alleviation based on 26 grassroots ownership of the process. The exercise launched during that period would enable the World Bank to prepare a new Country Assistance Strategy (CAS). Using this new approach, the consultations with the general public were performed on a broader basis: 25 prefectures were covered, out of the 33 prefectures in Guinea; and 66 subprefectures and 21 urban communes (CU) were visited out of a total of 303 subprefectures and 38 CU. All in all, the consultations directly reached 3,380 individuals (including 1,015 women) and communities encompassing 2,732,476 inhabitants. 76. These consultations enabled the communities in question to identify their development priorities and to set up programs and projects for achieving village-level development and institutional capacitybuilding for local communities. Specifically, the communities were free to assess their problems as they saw them in their day-to-day lives, and they themselves proposed program areas capable of bringing about a brighter future. By order of priority, the chosen sectors were the social sector (with 29 percent of the votes), infrastructure (25 percent), rural development (24 percent), smal and medium-sizes enterprises SME/SMI (13 percent), and governance (9 percent). The 9 priority subsectors identified by the local populations out of the 22 proposed are (1) dirt roads, paved roads, and bridges; (2) health; (3) agriculture; (4) education; (5) village water management; (6) employment; (7) electricity; (8) stock raising; and (9) justice and security. The structure of the sample and detailed results of the consultations are shown in the annex (Annex 4). 77. These results largely bore out the grassroots concerns expressed at the time of the consultations in connection with the preparation of the PNDH (1995). Together with the conclusions of the public expenditure review conducted in 1995, the results provided input for the preparation of the public expenditure management reforms initiated between 1997 and 1999, with expenditure redirected toward those sectors identified as priority sectors by the general public. 78. These same findings were used to design a new generation of projects and programs with the primary aim of reducing poverty in Guinea. These included the Village Communities Support Program (VCSP), the institutional capacity-building program (PRCI) for improved delivery of public services, and the reproductive health project (PSG). These programs and projects are being implemented; the passage of time will determine their effectiveness in terms of their impact on the living conditions of the general public. 79. At the macroeconomic level, a medium-term expenditure framework (CDMT) was implemented in 1998 to support efforts to improve the quality of services through centralized management of the available resources with a focus on measurable results. 27 IV. Poverty reduction objectives and strategies 80. The objective of all of the government's actions is to reduce poverty in Guinea and improve living conditions within a time horizon of 2010. By that date, the government hopes to have reduced the poverty rate to 30 percent, from the 40.3 percent recorded in 1995. 81. Specific objectives are mainly the following: faster growth; better income-earning opportunities for the poor (through the sustained and lasting development of the rural sector); mobilization of more substantial resources for the development of infrastructure and basic social services; improved governance; continuation of the struggle against AIDS; and the inclusion of the concerns of women in all development policies and strategies. To achieve these objectives requires an overall, coherent, relevant, and realistic strategy that takes into consideration all the problems that account for the state of poverty in Guinea. The scope of these problems, and those already identified, will be defined through surveys and consultations that will be held during the stage of fine-tuning the PRSP. 82. The approach to poverty reduction strategy has three main facets: * increased economic growth and income earning opportunities for the poor; * development of and equal access to basic services; and * improved governance and strengthening of institutional and human capacity. 83. In light of the disparities observed in the poverty analysis (regional disparities, disparities between urban and rural areas, gender disparities, etc.), the principle of equity will guide all government action. 84. This strategic platform is based on a knowledge of poverty and the concerns of the population, expressed during consultations within the framework of the National Human Development Program (PNDH) and the Country Assistance Strategy (CAS) and largely borne out by the workshops organized in March 2000. At each stage of the process, the strategy will be enhanced by the assessment of new data and the impact of action already taken. 85. It will be reinforced by institutionalizing the participation of all the players and beneficiaries in the choice and management of steps to be taken and by establishing a tracking and assessment system for a better appreciation of the progress achieved and the timely identification of any necessary corrective measures. 28 Table 4: Quantified objectives for poverty reduction in Guinea Current Status Objectives Indicators Date ~~~~~Vaueof the DaeValue of the ~~~~~~~~~~~~~~~~~~~~IndicatorsDt Idtae Indicator Poverty reduction Percentage of poor 1995 40.3 % 2010 30 Economic growth GDPgrowth(in %per year) 1999 3.2 2010 10 Per capita GDP growth (% 959 .6 21 . Investment rate (% of GDP I959 8521 25 Macroeconomic stability Inflation rate (in %) 1999 4 P~~~~~ ~ ~~~~~eriod-- 4 Budget balance (%/of GDP) 199.6 __ Extemnal balance (% of GDP)1969 -.0 ______ Rural development Arclual growth rate (% 19e,97,--9-9 ---------- 5.3- 2010 10 Annual consumption of fish pkg) ya) - 1997 _1 3 2007 1 7 Quantity of meat produced per capita_ Education (*) Grssprimiary enrollment- O. .... rate....o...... .... /99.53.5 2007 100 Gross enrollmnent rate for girls ()19/94207100 Adul litracyrate 1998/99 36 2007 45 Improvement in health conditions Life expectancy at birth (yea) i~1995 Child mortality rate- o)1999 98 2010 65 Mortality rate for mothers (pe- 100,000)- - 1999" 52S8- 2010 260-- HIV srpeaeerae()1998 2-4 200 < 5 Transportation Road network densit (ki 0k2 972720 6 Percentage of the road n-et'woi-6 ingo 925 2007 40 condition__ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ Increase access to electricity______ Electrification rate (in %/) 1999 7 2020 65 Price per kWh 1999 GF 176 _____ Increase access to safe water Pop. having access tsaewer()19492010 90 Allow every Guinean to exercise their rights______ Av~e-ra-ge cost (per case) breby those seeking justice ___ __ Average duration" o'f -ac ca-se Rate of execution of judicial decisions _______ ______ (*) Objectives of the "education for all" program. The incomplete indicators will be assessed to complete the table during the second stage of drafting of the final PRSP. 29 86. In order to take into account the objectives pursued by the sectors and to provide an overview of strategies and policies, a matrix of objectives, strategies, and indicators was constructed. This makes it possible to concisely and precisely establish the elements of the poverty reduction strategy. It will also be useful for intersectoral trade-offs. Furthermore, the matrix will underscore the possible synergies arising from interventions in the various sectors. It will also make it possible to take into account some issues that span all the sectors, such as gender, governance, follow-up, and assessment. 87. The matrix attached as Annex 2 is divided into four columns: (1) general objectives in the context of combating poverty; (2) more detailed objectives; (3) strategy developed, and measures envisaged or in place to attain these aims and objectives; and (4) indicators chosen to assess progress relative to the aims and objectives set for policies and programs. A. Macroeconomic stabilization and growth 88. Basic principles must guide the conceptualization of a viable strategy for poverty reduction: (1) without a strong and sustainable economic growth strategy, there can be no significant improvement in the income levels of the poor; and (2) low income levels actually compromise any prospect of access to proper nutrition, safe water, quality education and health services, and decent housing, which are all essential to the well-being and development of the individual and the community. 89. To accelerate growth, diversify the economy, and increase income-earning opportunities for the poor, structural measures and support policies for sectors that propel growth are needed, in addition to a viable macroeconomic framework. Of course, in accordance with the liberalizing approach adopted since 1985, the private sector will play a decisive role in wealth creation and income distribution. In exercising its functions in support of the private sector, the government will give priority to those choices that favor the poor. 1. Macroeconomic policies 90. In the medium term, the main specific objectives targeted are the following: * Achieve economic growth in real terms of 5 percent, 5.5 percent, and 5.6 percent, respectively, in 2001, 2002, and 2003. For better targeting of the poor, this growth will be largely based on the agricultural sector (with an annual agricultural GDP growth target of 10 percent in 2010). The mining sector, in which Guinea has strong potential and clear comparative advantages, will also constitute one of the pillars of growth and will contribute to the stability of the macroeconomic and financial framework, owing to the export revenue and budgetary resources generated. * Maintain inflation at an annual rate of around 4 percent, * Reduce the external current account deficit, excluding official transfers, to about 6 percent per year by 2003, to bring official reserves to the level of close to six months of imports in that year. 30 91. There has been an upturn in investment that should continue and reach 21 percent of GDP by 2003, with a private sector contribution that should exceed 13 percent of GDP as a result of a policy to encourage domestic saving and foreign investment. The target for saving is 18 percent of GDP by 2003. a. Fiscal policy 92. In the context of preparation and implementation of a strategy for poverty reduction, the budget remains one of the instruments of redistribution of national wealth and protection of the vulnerable segments of society. Fiscal management in Guinea faces a twofold challenge: increasing revenue and strengthening the effectiveness of government expenditure. 93. In terms of objectives, the authorities aim to increase the primary surplus to more than 3 percent of GDP by 2002. Given the precarious nature of government revenue from bauxite and alumina, as these commodity prices fluctuate, the authorities will enhance their efforts to raise nonmining revenue, which should move from 7.8 percent of GDP in 1999 to about 10 percent in 2002. 94. Revenue mobilization efforts will initially involve the implementation of existing provisions, including: (1) the elimination of a large number of exemptions by imposing the VAT on mining companies; and (2) the extension of SGS intervention to mining company imports. In addition, the following measures will be taken: (1) the setting of revenue quotas for customs surveillance units, requiring results on penalty of sanctions; and (2) application of tax- inclusive purchasing procedures to all beneficiaries of petroleum product tax exemptions, with subsequent reimbursement. 95. In the interest of increasing nontax revenue, efforts will be made to mobilize the royalties collected by the government and the revenue generated by administrative services. 96. In the area of expenditure management, the approach introduced with the medium-term expenditure framework (CDMT) will be extended to all sectors, and its implementation mechanisms will be consolidated. This approach targets the intersectoral reallocation of profits to key sectors in combating poverty, while seeking an intrasectoral allocation of resources compatible with equal access to public services, emphasizing the need to maximize the resources available to the decentralized entities. 97. To improve the budgetary process, the government has undertaken a set of reforms, including (1) simplification and strict observance of budget execution procedures; (2) greater transparency and circulation of information; and (3) reform of the budget nomenclature for a better breakdown of expenditure between the central and decentralized units. Other measures aimed at improving the government contracting regime and capacity-building for the decentralized entities, in terms of budget drafting and execution, will also be pursued. Lastly, the drafting of budget review laws at regular intervals should figure among the actions to be taken. 31 b. Monetary, financial, and exchange policy 98. Monetary policy has two basic objectives: to keep the level of inflation low (under 4 percent per year), and to adequately finance economic activity. Inflation control will have the double advantage of helping to stabilize the framework for economic activity and preserving the population's purchasing power. 99. To achieve these objectives, the central bank will implement policies based on controlling base money expansion by using indirect instruments (particularly required reserves and treasury bill auctions) and by tailoring the growth of the money supply and credit to the financing needed for sustained, sound, and balanced economic growth. 100. To ensure the financial soundness of the Guinean banking system, the government is committed to strengthening banking supervision on the basis of the Basel Committee principles, through the Central Bank of Guinea-Bissau (BCRG), which will seek to exercise strict control of banks and observance of prudential regulations by financial institutions. This policy will be associated with (1) strengthening the role of the market in determining interest rates, as well as defining the terms and conditions of bank lending; (2) redefining the role assigned to treasury bills, with a view to making them more competitive and a true monetary policy instrument; and (3) limiting budget deficit financing to increase the availability of financing for the private sector (by 2003, bank financing of the budget deficit should not exceed 10 percent of the tax revenue of the preceding fiscal year, as opposed to the current ceiling, which is set at 20 percent). 101. Furthermore, the monetary authorities will continue their efforts to restructure and institutionalize the main decentralized financial systems, with a view to doubling their customer base and the level of lending and saving by 2008, as well as to promoting growth. In this regard, particular attention will be paid to supporting poor areas and vulnerable groups, especially women. 102. Finally, this measure will be backed by the creation of conditions for the introduction of insurance products covering the agricultural sector in particular, and, in order to boost domestic saving, the removal of taxes on life insurance products. 103. In terms of exchange policy, the objective remains the promotion of the competitiveness of the national economy and the elimination of the distortions created by the exchange rate differentials between the formal and informal exchange markets. To that end, the BCRG will implement a flexible exchange rate policy resulting in greater efficiency in the functioning of the foreign exchange auction market and will continue to liberalize the exchange market. Finally, and this is intimately linked to the exchange rate unification policy, the mobilization of foreign exchange by the formal system will be a real challenge to the monetary authorities. 32 c. External debt management 104. In pursuit of the socioeconomic objectives of recent years, the Guinean government has made sizable investments, largely financed by concessional loans from external partners. The development of basic infrastructure (water, electricity, roads, communications, and development of agricultural areas) has gone hand in hand with a considerable increase in the stock of debt. At December 31, 1999, the country's debt was assessed at US$3.366 billion-a present value of US$2.414 billion. 105. Despite the concessional terms of the debt and the reschedulings negotiated with the Paris Club (five in all), the country faces serious debt-management problems. A large portion of its budgetary resources and foreign exchange revenue is devoted to debt service. As a result of this situation, Guinea was declared eligible for the HIPC (Heavily Indebted Poor Countries) Initiative. 106. To ease the burden of the debt weighing on its economy and to provide financing for the poverty reduction strategy, Guinea hopes that the HIPC Initiative will be quickly implemented. In this regard, bilateral and multilateral creditors should coordinate and tailor their assistance to the requirements of the poverty reduction strategy. For its part, the government will ensure transparent management of debt-relief revenues in a framework that involves the development partners. 107. In respect of the additional financing that would be necessary to implement all the strategies set out in the PRSP, the government will implement a borrowing policy based on two main principles: highly concessional financing (with a grant element of at least 35 percent) and the matching of financing to national development priorities. 108. Lastly, the strengthening of institutional capacity of the entities responsible for debt management will allow for better mastery of the mechanisms and procedures as well as for the definition and follow-up of a better borrowing policy for the country. d. Subregional integration 109. Subregional integration is now an important dimension of the national development policy. It is no longer a matter of political will but obeys an essentially economic and financial rationale. 110. The ongoing integration process should contribute to poverty reduction through the following three channels: (1) faster growth, propelled by trade in goods and services and the creation of community infrastructure; (2) reduced military and diplomatic expenditure, which would allow for more substantial financing of poverty reduction objectives; and (3) establish- ment of subregional stability and an end to refugee movements, which would halt environmental degradation and the deterioration of physical infrastructure. 33 111. In this integration process, considerable progress has already been made toward freedom of circulation of goods and persons within the Economic Community of West African States (ECOWAS) zone (15 member countries). With an observation post for surveillance of interstate road transportation in place, the incidence of racketeering along the major roadways could be reduced. 112. The monetary stability policies envisaged are designed to create a second West African monetary area in 2003 and a single monetary area in 2004. They will translate into stricter macroeconomic and financial management and an improvement in the system for reporting and tracking the economic and financial performance of member countries. This new economic space will be larger and more integrated, thus offering the countries real prospects for economic stability, trade promotion, and support for economic growth. 113. Guinea's ratification of the Organization for the Harmonization of Business Law in Africa (OHADA) treaty also has the same objectives: it aims to contribute to economic growth through the harmonization of policies and institutional and legal frameworks at the subregional level. It will have the advantage of contributing to the authority of the judicial system in Guinea and, in a broader sense, to the improvement of the business environment. 2. Support for the main growth-oriented sectors 114. An analysis of the structure of the Guinean economy shows that three sectors are key to GDP formation: agriculture, mining, and commerce (including restaurants and hotels), accounting for 16 percent, 19 percent, and 28 percent of GDP, respectively. a. Support for the rural sector 115. The challenge of reducing poverty in Guinea is largely a question of accelerating the development of the rural sector. By 2010, the main objective will be to reduce the incidence of absolute poverty from 52.5 percent to 40 percent, and extreme poverty from 18 percent to 12 percent. 116. In terms of specific objectives, the government intends to attain a GDP growth rate of 10 percent in 2010; to ensure the food security of the Guinean population (in that connection, assisted by all the subsectors, to increase fish consumption from 13 to 17 kg annually, per capita, between 1997 and 2007); to maximize the economic and social benefits of the use of agricultural, livestock, and fishing resources; and to preserve the productive base by sustainable natural resource management. 117. To attain these objectives, the government's strategy should alleviate the major constraints to the development of the rural sector. This action should revolve around the following areas: * quantitative and qualitative improvement of basic infrastructure, particularly for transportation and irrigation; 34 * development of community financial services, taking into account the specific needs of rural activities; * strengthening of the sector's productivity by means of a policy that encourages the use of better inputs (improved varieties, fertilizers, or phytosanitary treatments), and the adaptation of production techniques; * pursuit of a policy to develop the livestock subsector, with a view to increasing the quantity and quality of animal-based foods; * support for organizing professional groups of farmers, ranchers, and fishermen, in order to promote participation, ownership, and sustainability in development efforts; * support for the activities of rural women, with a view to developing their economic and social potential; * assessment of the impact of macroeconomic and financial policies, particularly tax and customs policies, on the development of rural activities and the tailoring of these policies to the needs of the poverty reduction strategy; and * rehabilitation and continued development of the sales channels for inputs and outputs of the sector, with a view to improving its competitiveness and incorporating it into the world market of industries with strong growth potential. 118. To ensure that the various segments of the population have the same income-earning and social development opportunities, specific measures will target vulnerable groups, particularly women (including preferential access to land, credit, and agricultural inputs; support for training and organization; and increase in the value of the products offered). 119. Lastly, in terms of security of land tenure in rural areas, a government policy declaration is being drawn up. The declaration has two main objectives: to improve the security of land tenure, with a view to establishing the conditions for investment in rural areas; and to give more responsibility to rural communities in land management. A pilot operation to improve security of land tenure was launched within the framework of the second national rural infrastructure program. This operation hinges on the implementation of institutional, technical, and legal systems for secure land tenure and the development of rural land plans. 120. In the long term, the government's divestment of the rural sector will extend to producer support services and will help strengthen the takeover of upstream and downstream production services by well-qualified and motivated operators. Also, as a result of the promotion of private investment and incentives to increase the share of assets created for this purpose, development of the rural sector should be sustained and its production system modernized. This will result in major changes in production, preservation, and marketing techniques and will at the same time entail significant improvements in the sector's production and productivity. 121. In addition, the rural development policy will serve as an effective channel for combating HIV/AIDS. Almost three-fourths of the Guinean population lives in rural areas, and AIDS prevention education, information, and communications are the responsibility of all 35 players in these areas. Officials in the national rural promotion and extension department have already been trained and are now heavily involved in the fight against AIDS. To expand these efforts and improve the quality of outreach, the government will increase its efforts by involving the 15,000 livestock sector workers currently in the field. b. Mining sector 122. Source of a substantial share of national wealth, government revenue, and the bulk of the country's export revenue for several decades now, the mining sector will remain at the core of the national poverty reduction strategy. It must bear a considerable share of economic development, job creation, and income distribution. 123. Development of the sector will be two pronged: intensification of mining activity in Guinea, and enhancement of the value of mining output. These goals will require major investments, in terms of both mining activity and development of the energy and transportation infrastructure. The policy envisaged by the government will have to provide the best incentives for private investment. 124. At the regulatory and institutional level, the new mining code adopted in 1995 and the Center for Mining Promotion and Development (CPDM) reflect the great strides made in the private investment promotion policy. They ratify the liberalization of mining activity (by allowing for the establishment of wholly privately owned and managed companies) and create a simplified and investment-friendly host environment. These provisions are reinforced by the progress made in restructuring the large mining companies (CBG, FRIGUIA, and SBK) and the action taken by the government in researching and establishing a reliable database on the country's geological potential. 125. Enhancement of the value of Guinean mining output will be derived mainly from the aluminum/bauxite subsector. The strategy envisaged for that purpose involves development of the energy potential essential for bauxite-alumina-aluminum processing. The government, along with private investors, intends to develop a project for an integrated aluminum smelter in Konkoure, which will include an aluminum plant with an annual capacity of some 250,000 metric tons (entirely funded by private investment) and a hydroelectric plant capable of producing 3,496 GH/year, with the bulk of this energy production going to the aluminum industry. The policy for developing the energy sector is defined to ensure the best possible synergy between the two sectors. c. SMEs/SMIs and employment promotion 126. In Guinea, unemployment and income insecurity are the main characteristics of poverty. Poor access to basic services (education, health, transportation, and communications) is partly linked to low incomes. Creating wealth and distributing income to as wide a cross- section of the Guinean population as possible, especially the youth, are therefore the primary challeng for the poverty reduction strategy. 36 127. In addressing the problem, the government has consulted the groups most affected by unemployment: young, unemployed graduates, labor unions, the handicapped, and the NGOs. Essentially, the strategy envisaged will revolve around technical and professional training, development of entrepreneurial skills and managerial capacity, and access to production assets as well as the opportunities provided by the domestic and external markets. 128. In light of the current state of the labor market, support for self-development and innovation must be at the center of the employment and income distribution policy. To that end, access to technical and vocational training will be provided in response to the demands of the labor market and to the technological change required for better development of potential in a market largely open to competition. This training will be carried out in-house at companies and through conventional programs in vocational schools. It will also be a question of designing and implementing a strategy for promoting entrepreneurship and the managerial capacity of small and medium sized enterprises SMEs/SMIs. 129. To take full advantage of the knowledge acquired and to develop private initiative, a support system will be required to provide funding and other production assets, such as land. To that end, there is an urgent need to develop a financial system capable of mobilizing savings to finance investment for sustainable development. This system will be enhanced by the creation of an appropriate institutional and legal environment that is development oriented, as well as of sound and competitive infrastructures. 130. The choice of growth-oriented and income-generating sectors includes manufacturing SMIs and agricultural and tourism activities. The country's major tourism potential has long remained undervalued. Aware of the contribution that the sector can make to economic and social progress (direct jobs and induced employment in other sectors, such as transportation, agriculture, forestry, crafts, etc.), the government has implemented a tourism policy and craft industry code. The development of integrated rural tourism can shore up poverty reduction efforts, with such specific objectives as the involvement of local populations in a system of decentralization with effective responsibility for choices, a definition of tourism products of which the local populations would be the primary beneficiaries, and the promotion of vulnerable population groups (women and youth in rural areas). 131. The policies to be implemented to that end would involve alleviating the constraints on tourism development in Guinea. Accordingly, the policies will aim to rectify the failure to develop tourist sites; eliminate the shortage of trained human resources; promote Guinea's image as a tourist destination; ensure security for tourists and their property; promote the hitherto insufficient development of supervisory and support structures for the private sector; simplify the procedures for land acquisition; etc. 132. Lastly, in the context of implementation of public investment programs, employment will also be created by using labor-intensive techniques. This approach will be grounded in the optimal use of local Small and medium sized enterprises SMEs and SMIs for the development of basic infrastructure. Such an approach has the advantage of tapping local expertise, boosting employment, and encouraging community participation. 37 133. As a result of a particularly difficult employment environment for young people, the government will examine the best way to ensure their economic and social development by reviewing the following: * conditions for implementing an institutional framework conducive to the development of initiatives for young people, using technical and financial support for youth association movements, NGOs, and volunteer organizations; * ways and means to construct, renovate, and equip socioeducational facilities; and * support for incorporating youth into the labor market and the economy by setting up a national youth integration fund. This review will be carried out in collaboration with youth organizations, development partners, and local governments. d. Basic infrastructure development 134. It is clear that Guinea lags behind in the development of basic infrastructure. Efforts over the last 15 years have considerably upgraded the available infrastructure and the quality of services provided, resulting, in particular, in the expansion of production capacity (water, energy, and telecommunications) and improved accessibility of a large part of the country. However, in many ways, the development framework requires more substantial advances for the economy to become viable and competitive. Similarly, some sectors, particularly the energy sector, are faced with a debt burden and financial needs that could seriously jeopardize their development in the short and medium terms. 135. With a view to reducing poverty, infrastructure development faces two major challenges: (1) to provide adequate services for private sector development; and (2) to ensure that a larger number of Guineans enjoy good basic services (this question will be discussed in the chapter on access to basic services). Energy subsector 136. The strategy seeks to increase the supply in order to cover the needs of the national economy, including those linked to the development of the mining industry. Given Guinea's enormous hydroelectric potential, the ultimate goal will be for the country to become an exporter of electrical energy. 137. To address the need for investment, the government has already implemented institutional mechanisms and systems to allow private sector investment in infrastructure. These mechanisms are governed in particular by the BOT (Build, Operate and Transfer) law. In the context of implementing these provisions and linking them to the development of the mining industry, major projects (e.g., the Tiopo project on the Cogon River) have already been identified, technical studies undertaken, and discussions initiated with private sector partners. In the same vein, with the support of the World Bank, the government has just initiated a 38 review of the regulatory framework aimed at more sustained private sector participation in the financing and management of basic infrastructure. The review covers all the main infrastructure sectors (water, energy, telecommunications, and transportation). It will contribute to the implementation of institutional reforms currently under way, to the adaptation of the regulatory framework, and, thus, to improvement in the technical and financial efficiency of the sectors. Transportation subsector 138. Owing to their impact on economic development and on the living conditions of the entire Guinean population, appropriate policies are required for all road and port subsectors. 139. The road infrastructure development policy will be based on extension of the network by opening up 40,000 km of dirt roads by 2007, within the context of implementation of the second national rural infrastructure program, and by upgrading the existing infrastructure by implementing an appropriate system of road maintenance. A second-generation road maintenance fund will be established with user contributions, and the government's efforts in terms of budgetary appropriations for the sector will be used to finance maintenance activities. However, in order to maintain the entire network of roads that will be laid, more substantial resources will be needed. To that end, the government will reassess its objectives for mobilizing resources for dirt roads and will request support from its development partners for their completion. 140. The national strategy will also ensure better linkages between the national road network and dirt roads, partly with a view to making production zones more accessible and improving the distribution of agricultural products to urban areas. By facilitating access to production zones, this policy will revitalize rural activity and raise the value of production of the rural population (narrowing the margin between the producer price and the consumer price), thereby helping to reduce poverty. 141. For the ports subsector, the challenge will be to ensure the competitiveness of the national economy and protect the purchasing power of the population by offering quality services at competitive prices. At present, the general level of prices is largely related to the cost of port transactions. Transportation policy in the subsector, especially as it relates to the institutional and regulatory framework and to competitiveness, is being reviewed in the broader context of rethinking the regulatory framework for infrastructure, with a view to establishing greater private sector participation in infrastructure funding. This exercise is being carried out with the support of the World Bank. Its findings could lead to concrete measures that would allow for improvement of the framework for economic activity in Guinea. B. Development and access to basic services 142. It is useful to bear in mind the inequalities revealed in the poverty analysis (inequalities among regions, between urban and rural communities, between men and women, and among socioprofessional groups). Reducing these inequalities and ensuring equitable distribution of the national wealth will be among the major challenges addressed by the new government 39 strategy. Hence, in all policies to be adopted, particularly those related to the priority social sectors, special attention will be paid to those areas identified as pockets of poverty and to vulnerable segments of the population (women in rural communities, young people seeking their first jobs, retrenched workers, the handicapped, etc.). 1. Education 143. The government's objective in this area will be to establish a general education system that will facilitate the development of human resources and the scientific potential required to meet the country's economic and social needs. While the objective of primary education for all is being pursued, national education policy will therefore be aimed at * increasing enrollment ratios (raising first-year entry rates to 70 percent) and ensuring equity between the genders and among geographical areas; * improving the quality and internal and external cost-effectiveness of education (through the use of better-qualified teachers, the provision of ample teaching aids, and adequate systems management); * improving systems management so as to make better use of available resources (capacity-building for school management, inspections, and oversight of the entire system); * improving educational programs, with account taken of the STDs/AIDS dimension, to encourage better hygiene and health practices, especially among young people; and * promoting and expanding private education at the various levels. 144. Also, sectoral policy will be aimed at improving the links between the various levels of education (preuniversity, technical and vocational, and higher) and establishing open, flexible relations betw&en technical and vocational education and higher education, on the one hand, and the economic and labor environment, on the other hand (matching training with employment needs). This policy will facilitate the integration of all actions within a systemic, dynamic view of the education system, using the sectoral simulation model under construction. 145. Lastly, special attention will be paid to promoting nonformal education and to holding families responsible for the training of children, as well as to promoting the school enrollment of young girls, especially in rural areas. 2. Health, nutrition, and HIV/AIDS 146. Public action will hinge upon four lines of approach, as follows: (1) the improvement of access by the poor to essential health services; (2) the improvement of social checks and balances and of the capacities of decentralized institutions, based on the principle of community participation; (3) the strengthening of action to combat HIV/AIDS and consideration of the nonmedical aspects of HIV/AIDS; and (4) the reduction of nutritional deficiencies. 40 147. The development of health infrastructure will primarily involve basic health units, in particular health posts, based on the health map. This will be accompanied by a human resources management policy that can ensure the availability of qualified, motivated personnel in rural areas. To this end, contracting will be based largely on performance, which will have the advantage of improving the quality of services and lowering staff turnover in rural areas. Also, the availability and quality of services will be increased through consolidation of the minimum package of services (with an adequate supply of consumables, generic essential medicines, and vaccinations); improvement in access to financial support through phased subsidies for services, depending on the socioeconomic situation in the various regions; and the establishment of locally mobilized and managed social safety net funds. This will all be supported by a larger allocation of resources to the sector (the target being 10 percent of the budget in 2010, compared with the current allocation of 4-5 percent). 148. In keeping with the decentralization process launched at the national level and with the principle of community participation, there will be greater involvement of the entities with delegated authority (regions, prefectures, and subprefectures) and the decentralized entities (CRDs, urban communes, and districts/neighborhoods) in health development. Over time, they will be granted management autonomy, which will also ensure that they assume responsibility for factual analysis, planning, management, and performance assessment. The participation of user committees in these entities will be expanded and institutionalized. 149. At the subprefecture level, the social welfare of the poor and social checks and balances will be enhanced through the establishment of structures and appropriate mechanisms for dialogue, such as health councils for monitoring, microplanning, and budgeting; solidarity funds to cover the needs of the poor; and health cooperatives for risk sharing. 150. Health policy will also take up the challenge of dealing with emerging and reemerging diseases, in particular STDs/AIDS. Two basic objectives will be to stabilize or reduce the incidence of HIV/AIDS and to control the socioeconomic impact of AIDS. With this in mind, action against STDs/AIDS will be incorporated into all development programs, and particularly into the 2000-10 national health development plan currently under preparation. The specific cases of persons living with HIV and groups most at risk (truckers, itinerant merchants, inhabitants of areas with a large refugee population, members of the armed forces, and prostitutes) will have to be considered. Also, an intersectoral approach will be taken in the development of communications and information programs, especially the targeting of young people, with a view to considering aspects other than the purely medical in the fight against AIDS and encouraging behavioral changes in light of AIDS-related risks. 151. Moreover, initiatives against malnutrition will be aimed at eliminating the deficiencies in micronutrients (iodine, iron, and vitamin A) found primarily in rural areas and at promoting breastfeeding as the sole source of nutrients for infants aged up to 6 months. Community-based activities will be supported to improve food security and reduce protein-calorie malnutrition. 152. Lastly, with a view to improving health conditions for women and young girls, efforts will be pursued to combat the practice of female genital mutilation. The specific objectives in this regard are to ab-andon this practice and integrate women currently practicing this procedure 41 into other professions. To this end, the measures under consideration will relate to raising public awareness, identifying projects, and providing support for training and for the implementation of small projects to retrain women practicing this procedure. 3. Water, sanitation, and housing 153. Significant efforts have been made to develop water supply infrastructures in both urban and rural areas. In urban areas, these efforts have involved increasing production capacities (production and transportation capacities serving Conakry have increased from 45,000 m3 in 1989 to 100,000 m3 in 2000) and increasing the number of towns (27 urban centers) covered by a water supply network. Work (drilling, repairing wells, and installing water supply points) has been largely stepped up in rural areas (in all, about 9,400 water points had been installed in March 2000, compared with only 10,000 up to 1985). No specific report exists on the operational status of these installations, but the rate of access to safe water was estimated at 49 percent in 1999. 154. Within the framework of the poverty reduction strategy, the objective will be to raise the rate of access to safe water to 90 percent in 201 0, with an average of 150 liters of water per inhabitant daily in urban areas and 50 liters of water in rural areas. To provide access to safe water and improve health conditions for the people, the government will pursue its efforts to install water supply infrastructures in urban areas and water points in rural areas. It will also rely on private participation in the financing of infrastructures, as envisaged by the ongoing review of the regulatory framework related to infrastructures. This policy will be carried out in collaboration with NGOs in recipient communities. The contribution of rural communities to the initial investment and their involvement in the operation and maintenance of water points will ensure the durability of the equipment and a higher quality of services. 155. For greater improvement of living conditions, previous measures will be supplemented by sustained efforts to achieve the harmonious development of urban centers. To this end, the measures under consideration will hinge primarily on preparing blueprints for developing the various towns around the country, improving the accessibility of poor neighborhoods by repairing or opening up the roads leading to them and developing the major roadways leading to poor suburbs, providing sanitation services (beefing up the collection and elimination of trash, and supporting SMEs engaged in trash collection), and improving the security of land tenure. 4. Electricity 156. The efforts of these past few years have led to an appreciable increase in the electricity supply and thus helped improve the quality of life of a large portion of the people, in Conakry and in a number of inland urban centers. Notwithstanding, the rural population, which makes up the vast majority of Guineans, as well as people in several urban centers, do not as yet have access to electricity. 42 157. The government plans to pursue its program of supplying electricity to inland towns, in particular with the support of its partners, and to improve management of the sector. This will facilitate private participation in the financing of infrastructures. 158. As regards supplying electricity to rural areas, the government, with World Bank support, has launched a pilot program to bring electricity to villages. This initiative consists of developing and supplying services on the basis of private financing. In this context, the government will ensure as much legal and regulatory consistency as possible with the institutional approach adopted in the conventional electricity sector. 5. Transportation infrastructure 159. From the standpoint of social development, the main objective is to provide equitable access to transportation services for the majority of Guineans. The required measures are to be taken as part of a procedure consistent with pursuit of the objective of improving the framework of economic activity. 160. In rural areas, the expansion and maintenance of dirt roads are helping to improve living conditions, access to better-quality urban services at less cost, and employment opportunities. To sustain previous gains and exert a greater influence on living conditions, the general public will be involved in all phases of the process. In addition, preference will constantly be given to the use of local labor and to a labor-intensive approach. This will help reduce construction and maintenance costs, promote employment, and revitalize local Small and medium-sized enterprises SMEs/SMIs. 161. Along with improvement of the road infrastructure, the strategy to be introduced will include a component for the promotion of intermediate means of transportation. 162. In urban areas, the government policy will be to develop road infrastructure and regulate the sector. In addition to the liberalization, already in effect, of transportation services, priority will be given to increasing road safety and strengthening the current regulations. 6. Gender and equity 163. Despite the affirmation of equality between men and women before the law and the policies adopted in favor of the emancipation of women, only very limited progress has been made in this area, particularly as a result of the superimposition of positive law the and discriminatory customary law, as well as sociocultural barriers. Differences are evident in all areas (economic, social, and political) between the conditions faced by men and those experienced by women. 164. But the scope of the problem can also be measured by the number of people directly affected by it (women make up 51.3 percent of the total population) and by its impact on the overall process of economic and social development. Thus, beyond mere discrimination 43 against women, the gender problem represents a major dimension that should be taken into account when economic and social strategies are being devised. 165. In recent years, several actions have been taken by the government to achieve the objective of reducing poverty among women. They include, in particular, the following: * the establishment of a legal framework providing for the equality of men and women before the law; * the gender and development framework program, which has a component aimed at strengthening institutional arrangements for the promotion of women and dissemination of information about the gender concept and approach; * the project to remove legal constraints on reproductive health and the promotion of women, including the mission of passing and disseminating information about laws to strengthen the promotion and protection of the legal status of women; * the project to increase school enrollment among girls, which is part of a campaign in this area; 3 the project in support of women engaged in economic activity, consisting of promoting the economic activities of women by providing them with access to training; small technologies; microcredit; and information, education, and communications activities, in order to bring about a positive change in behavior toward women; and - the establishment of a fund in support of income-generating activities for women in urban and peri-urban areas. 166. The challenge is to foster the economic and social emergence of women by establishing a strategic framework that can guarantee equity among the various groups making up the nation, in particular between men and women. Specifically, the primary objectives are access to education, training, employment, production assets, protection, and decision-making. The logical approach envisaged for this purpose is based on an objective analysis of the status of women (poverty analysis using a gender approach) and research on the best conditions for the participation of women, especially the poorest of them, in the development process. Well beyond establishing access to resources and to essential social services, the real challenge of women's participation remains that of ensuring that they have decision-making powers and influence on the policies underpinning development strategies. 167. For greater impact, the gender dimension aspect will be addressed in an across-the-board approach. In other words, all sectoral strategies to be instituted will take account of the status of the underprivileged segments of the population in general, and of women in particular. Also, as regards strategic policies for the promotion of women, the education of girls will remain among the government's major priorities. To this end, various measures will be taken, including public awareness and information campaigns, as well as steps to promote the access of girls to the various educational levels. 44 168. In the health sector, policies to be adopted relate to the expansion and development of basic health services, with a view to addressing effectively the needs of women (minimum care packages, prenatal care, childbirth assistance, and family planning) and children (vaccinations, and integrated management of childhood illness). The recently established reproductive health project will help in this effort. Steps will also be taken to introduce the measures necessary for protecting women and children from AIDS. 169. On the economic front, strategic policies will be aimed primarily at developing job- and income-generating initiatives, building up the technical and organizational capacities of women, supporting the mobilization of production factors (credit and other production assets), and ensuring access to opportunities on the local and international markets. 170. In addition, specific actions are under consideration to increase awareness and provide incentives. They will be pursued with a view to encouraging positive changes in those socio- cultural practices that hinder the development of women. 171. To fine-tune these policies in the final PRSP, the gender dimension will be taken into account throughout the process. This will involve including a gender analysis in all the studies and surveys planned for the final PRSP and ensuring the active participation of women in the identification, formulation, and management of actions to be taken, as well as in the assessment of their impact. The studies to be carried out will be enriched with the new data collected and will take account of all the economic, social, and cultural handicaps that characterize poverty as experienced by women. 172. Along with the economic liberalization and the progressive disengagement of the state from the productive sectors, the most vulnerable groups of society, particularly the handicapped, drugs addicts, AIDS patients, the aged, and youths and children in difficult situations have experienced a clear deterioration of their living conditions. In part, this is due to: the inadequacy of public action in this area (there are few structures adapted to the specific needs of handicapped persons, or, where they do exist, their state of functionality if unsatisfactory); the continued rise in unemployment (reducing the possibilities of family assistance); and the selectivity of the formal economy in matters of hiring. 173. Faced with this situation, numerous associations and NGOs have been created to contribute to the training and professional and social development of these persons in difficulty. To this day, however, there is no systematic study evaluation of the dynamics of these organizations. 174. Moreover, the shortcomings of social coverage are evident. Less than 2 percent of the country's population benefits from social security coverage-essentially, only a part of salaried workers, their dependents, and civil servants. In a context of very low incomes, this absence of social security increases the vulnerability of large segments of the population. 175. In the framework of the poverty reduction strategy, important efforts will be directed toward social action. In this context, there are two facets: support for persons in difficulty, and the development of social security in Guinea. With regard to the first aspect, the government's 45 policy will aim to improve and make operational the structures responsible for social action in Guinea. A number of specific measures are foreseen, including: studies on the living conditions of the vulnerable groups; and improvement of the institutional capacity to formulate a better social policy in Guinea; the development of infrastructures properly adapted to the targeted groups; and the mobilization of all partners for the cause of the most vulnerable. 176. With regard to social security, a concerted reflection involving all partners (the state, civil society, professional organizations, etc.) will be necessary to define the orientation of policies to improve social security in Guinea. Initiatives taken in the area of public health (to protect the poor) and social checks and balances on the local level (putting in place a solidarity fund for taking care of indigents; health cooperatives for sharing risks, etc.) could prove to be instructive in this context. C. Improving governance and capacity-building 177. The government is aware of the direct links between the quality of governance and the performance of economic and social programs and, therefore, has for several years been engaging in discussions and operations designed to improve public management. Government action in this regard has included initiating the decentralization process, ceding its central role to the private sector and local governments, and improving the legislative, regulatory, and judicial systems by means of the participatory process adopted during the identification of the major strategic policies for national development. 178. This policy will be pursued through two main lines of approach: improving public management through better allocation of resources and greater transparency in budget execution; and strengthening institutional and human capacities, with a view to providing better public services. 1. Better allocation and transparency in resource management a. CDMT and priority sectors 179. The medium-term expenditure framework (CDMT) continues to be targeted primarily to making better use of the available resources, with a view to achieving basic poverty reduction objectives. This approach has been adopted by the priority sectors (education, health, rural development, and road maintenance) since 1998 and by three new sectors (justice; urban development and housing; and social affairs, promotion of women, and childhood) since 1999. It facilitates the establishment of better links between the objectives set (main poverty reduction objectives) and the allocation of resources. It also seeks to assess the impact of measures taken (measurement of the extent to which objectives have been attained). However, the CDMT has admittedly had limited success because of the tardy mastery of the process by the various participants and the worsening of the government finance position, the latter of which is related especially to the lack of external assistance and to the financial burden generated by the lack of security in the subregion. 46 180. With the aim of improving the effectiveness of public spending, the CDMT approach will be consolidated and extended to include all sectors. On the basis of the strategic priorities defined for poverty reduction, this approach will foster better collaboration among the professionals and officials in charge in the central and technical ministries through participation in the entire process and shared analysis of the principles and constraints that must guide public expenditure management. 181. Efforts in coming years will be aimed at mastering the institutional and technical procedures associated with implementation of the CDMT approach (adoption of a strategic basis for budget preparation, and assessment of the strategies adopted for attaining agreed targets, indicators, and performance appraisal procedures, etc.). This approach will also facilitate better coordination of assistance and harmonization of the participation of the various partners. 182. As a basic PRSP principle, the prioritization of objectives will govern expenditure allocation. Over the past three years, the adoption of the CDMT approach has been accompanied by expenditure restructuring in favor of those sectors defined by the people as of priority. The participatory process that has been initiated will make it possible to establish priorities on a consensual basis, with the involvement of all partners (government, population groups, and development partners). b. Decentralization for better-quality expenditure 183. The govermment's strategy centers on the objective of establishing a development administration to serve the people. From this standpoint, the government has set up decentralized entities and administrative units that are closer to the people (communes, rural development communities, neighborhoods, and districts), in addition to the entities with delegated authority (regions, prefectures, and subprefectures). 184. As these entities are already operational, the challenge today is that of providing the human, financial, and material resources necessary for designing and implementing basic development plans. The reluctance observed at the central level to transfer resources to the grassroots level, the weak capacity of local govermnents in development planning and management, the absence of supporting financial institutions, and the inadequacy of performance-enhancing mechanisms represent a real drag on the forward thrust toward decentralization. 185. To address the resource deficit issue, the government has already taken important measures: introduction of the Village Communities Support Program (VCSP), and the passing on to local governments of all funds collected for the minimum tax for local development (IMDL), with effect from fiscal 2000. The PACV initiative will generate support for consolidation of the basic entities (improvement of the institutional and regulatory framework of decentralization), the establishment of operational frameworks for dialogue, development of the technical and institutional capacities of rural communities, and the provision of a local investment fund to be managed by community-based groups. 47 186. Moreover, reforms are under way with a view to providing larger allocations of budgetary resources to entities with delegated authority. Accordingly, a new budgetary nomenclature has been prepared to allow for a breakdown of expenditure between the central services and those with delegated authority, and it will be strengthened by a delegation of authority for fiscal management (transfer of competencies and responsibilities to the delegated authority level). c. Transparency and action to combat corruption 187. Within the framework of the government finance management reform introduced in 1998, several important measures were initiated, with the aim of achieving transparency and compliance with the regulations on expenditure management. These measures include the simplification and strict observance of budget execution procedures; increased coordination among administrations for the collection and consistency of fiscal data, including on financing; computerization of expenditure procedures, from commitment to payment; and the routine production of consolidated balance sheets of the treasury. To these must be added the positive effects of the involvement of population groups in the formulation, implementation, management, and assessment of development actions. 188. To complete these arrangements and improve expenditure effectiveness, regulations on public procurement and a series of measures aimed at improving procurement procedures were introduced and will be pursued. 189. In addition, the government established a National Committee to Combat Corruption and uphold ethics in economic activities, by Decree D/2000/01 7/PRG/SGG of February 4, 2000. This committee is made up of representatives of all political persuasions, civil society, and professional organizations. With the support of development partners, the activities of this committee will facilitate a grasp of the magnitude, forms, and mechanisms of corruption, as well as the preparation of a strategy and an action plan for more vigorous action against corrupt practices. 2. Participatory process and institutional and human capacity-building 190. As noted above, the weak institutional and technical capacity of local bodies is one of the factors hampering the decentralization policy initiated by the government. This factor is also a constraint on the functioning and efficiency of services, both those provided to the public and those designed promote private business. This will be one of the areas of remedial action to be taken within the framework of Guinea's poverty reduction strategy. 191. With this in mind, the government has created two structures responsible for forrnulating and implementing the strategies established for capacity-building at the national and local levels. At the national level, the National Secretariat for Capacity-building (SENAREC) is responsible for formulating and implementing a national program to strengthen the capacities of government employees, to rationalize and revitalize entities, to promote the private sector and civil society, and to coordinate capacity-building actions. At the local level, the Capacity-Building for Service Delivery Program (CBSDP) will address the basic needs of 48 the structures in terms of their capacity to assume responsibility for development and poverty reduction programs. a. Participatory process, decentralization, and beneficiary involvement 192. All the wide-ranging discussions held in recent years with a view to reducing poverty in Guinea have required the involvement of community-based groups. However, local population groups and governments have not really assumed their responsibilities in connection with this policy implementation. 193. For preparation of the interim PRSP, grassroots participation was broad. Despite the very short period set by the government for preparation of the interim PRSP, the government organized consultations last March in the four natural regions of the country and in Conakry. Target groups were chosen primarily from within the vulnerable segments of the population (in particular, the handicapped, the unemployed, street children, and women in rural areas), and the consultations addressed the perceptions of poverty held by the various population groups and their proposed remedies. The results of the various regional workshops were validated at a national workshop held in Conakry on March 22, 2000. 194. To build on these successes and ensure that population groups assume responsibilities in the effective management of development actions, the government undertook to establish a permanent participatory mechanism. To this end, efforts will focus on the following: * strengthening community councils within the CRDs (rural development communities), setting up prefectural development councils as deliberative bodies, and promoting partnerships between local associations and local governments; * improving the degree of participation and involvement of population groups, NGOs, villager and/or community-based associations, and associations of citizens, especially for program fornulation and the management and tracking of community and local affairs, with the PACV playing a role in the attainment of this objective; * establishing and strengthening bodies for consultations among population groups, levels of government with delegated authority, and elected representatives, with a view to promoting the dissemination of laws and documents, identifying impact indicators, and monitoring programs; * making communities responsible for the creation and management of poverty monitoring agencies at the local and national levels; and * preparing simplified planning and programming tools, using a participatory approach (drawing up community development plans, and monitoring and assessing investment programs), and programming investments on the basis of the plans drawn up. 195. The new approach involves creating favorable, lasting conditions for broadening the participation of population groups, the private sector, and civil society in the poverty reduction strategy. For this to be successful, population groups will also have to share the responsibilities involved by playing a role in development actions. 49 196. The approach will be govemed by two principles: distribution of responsibilities, and rate of implementation of the reforms. Indeed, the assumption of responsibilities will be productive and effective only if shared by all the parties concerned. Hence, the government plans to involve as many participants as possible in the process, so that the objectives can be shared by all Guineans because they were defined by them. 197. Moreover, given the concern to have all population groups play a role, a gradual approach to implementation is recommended. Accordingly, the responsibilities delegated to population groups and local governments will depend on their capacities to assume them effectively. b. Strengthening of judicial capacities 198. Despite past efforts to ensure effective, equitable justice in Guinea, serious problems continue to limit the efficiency of the judiciary a situation that and this is truly detrimental to economic activity and to living conditions. These problems relate, in particular, to the organization of the judiciary, labor conditions and work equipment, the quality and moral fiber of justice personnel, and the procedures and conditions under which court decisions are applied. 199. To address this issue, in 1995 the government launched a wide-ranging program of reforms aimed at encouraging a better match between the authority, organization, and functioning of the judicial system, on the one hand, and its mission of economic and social promotion, on the other hand. In this context, several laws were passed in recent years, including the law on the organization ofjustice, providing for the creation, within courts of first instance and courts of appeal, of special chambers to deal with economic disputes, and a new code on civil, economic, and administrative procedures. 200. In addition, steps were taken to develop human resources (by creating at by the Ministry of Justice a legal training and documentation center and by instituting refresher courses for several magistrates, court clerks, and criminal investigation officers) and revise arbitration procedures (by clarifying of the relationship between the criminal investigation department and the public prosecutor's office, and by allowing attorneys to be present with their clients at criminal investigation department hearings. 201. To make Guinea's justice system as efficient as necessary and thus help improve the context of economic activity and ensure easy, equitable access for all persons subject to legal proceedings, reforms will be pursued especially to improve the functioning of the judiciary: the speed and cost of legal proceedings, and the quality and implementation of court decisions. Important discussions have to be held on the actual functioning of the judiciary and on the steps necessary for adapting it to current economic and social needs. 202. In the meantime, major reforms are planned by the government, including revision of the rules and regulations applicable to judicial personnel; implementation of a program for the specialized training of magistrates, particularly with respect to business-related economic and financial issues; training of paralegals; wide dissemination of the law and information on legal 50 and administrative remedies (a foundation for the promotion of the law in Guinea was created for this purpose); and introduction of a policy of access to justice through the institution of legal aid to enable the poorest segments of the population to have access to the courts and to receive free legal advice. V. Debt relief, resource allocation for the social sectors and medium-term indicators 1. Debt relief and resource allocation for the social sectors 203. At this stage of preparation of the PRSP, poverty reduction strategies are being elaborated. They will be finalized and quantified and the financing needs assessed during the drafting of the final PRSP. At the same time, the level of debt relief and the methods used for to provide it will be specified. 204. Meanwhile, the Guinean Government is committed to deploying all the resources released as a result of debt relief, as well as any domestic resources it raises for the country's development, in pursuit of these strategies. It will request additional resources from its partners to cover the financing needs related to poverty reduction strategies. 205. In respect of the constraints on poverty reduction and the priority objectives set, the government is committed to the following strategy for resource use: 1. resources from debt relief and all other resources will be incorporated into the budget; 2. budgetary allocation will be based on priorities set by the communities (education, health, water supply, rural development, road construction, and other sectors); 3. within these sectors, priority will be given to basic services, those targeting the poorest segments of the population (basic education, primary health care, etc.); 4. more substantial resources will be transferred to the decentralized and localized structures with a view to providing better basic services. To that end, a portion of locally collected revenue will revert to the local governments (single professional tax-TPU, tax on vehicles-TUV, unified real estate tax-CFU). The terms and conditions of implementation of this policy will be set out in the final PRSP. In addition, based on their commitment to combating poverty and their performance in raising local revenue, the local governments could benefit from government incentives; 5. the budget will be managed by efficiently dividing resources between operating and investment expenditure, to maximize the impact on economic development and poverty reduction; 6. activities targeting women and the vulnerable segments (the handicapped, street children, the elderly, etc.) will be given high priority owing to the high incidence of poverty in that population segment. Also, equity will be the guiding principle in resource allocation between Conakry and the interior of the country, between different regions, between rural and urban areas, and between pockets of poverty and areas that are not as poor; 51 7. the resulting resources will be tapped for combating STD/AIDS, which have a negative impact on development. 206. To follow up the implementation of strategies, a quarterly evaluation will be conducted to examine the level of disbursements in relation to projections. In addition, an inspection mission will be sent out into the field biannually to take stock of the actual transfer of resources to the grassroots level and to assess the quality of expenditure. 207. To ensure transparency in resource management and thus contribute to the quality of expenditure and the effectiveness of poverty reduction, the permanent framework for dialogue between the government, civil society, and the development partners will analyze, orient, and disseminate information on poverty reduction. Among other tasks, this framework should monitor progress in the implementation of the PRSP and its impact on the living conditions of the population and should examine the level and structure of needs and support for national development. Lastly, this permanent framework will ensure that the population is consulted throughout the entire process. Main indicators for monitoring resource allocation I. Indicators (*) Average Average 2001-2003 (In percent) 1995- Basic Accelerated 2000 Expenditure on education sector/total expenditure 15.34 16.0 17 Expenditure on basic education/total expenditure on 66.18 67 70 Education Expenditure on basic education/total expenditure 10.15 10.7 11.9 Expenditure on health/total expenditure 3.74 5 6 Expenditure on basic health care/total expenditure on health 46.16 47.5 48.5 Expenditure on basic health care/total expenditure 1.73 2.37 2.9 Expenditure on rural development/total expenditure 5.10 6.5 7.5 Expenditure on road infrastructure/total expenditure 1.45 1.6 1.8 Social expenditure/total expenditure 19.36 22 24 Expenditure on poverty reduction/social expenditure 58.36 60 65 Share of expenditure on poverty reduction/total expenditure 13.7 15 17 (*) - Expenditure on basic health care is estimatedfor the period 1996-2000. - Social expenditure here is taken to be expenditure on education and health. - In the case of health, the expenditure taken into account for poverty reduction is that of the prefectures/districts. - In the case of education, the expenditure taken into account for poverty reduction is expenditure on pre-university schooling - Expenditure on road infrastructure is allocations to the highway fund. 52 2. Medium-term indicators 208. The government's policy for the next three years is consonant with the poverty reduction strategy being prepared. It targets the medium-term objectives of the PRSP within the same horizon. 209. In accordance with the general focus of the poverty reduction and growth strategy, education and health are among the government's priority sectors. These priorities will be reflected in the government budget. So, in addition to the financing efforts accomplished in recent years, resource allocations will favor these sectors in absolute and relative terms. The implementation of the HIPC Initiative will contribute to this additional financing. 210. For a better impact on the living conditions of the poor, the proceeds from debt relief will be applied to investment. The resources needed to cover operating costs will be financed with own resources, based on planned revenue collection efforts. The table below presents the plans for reallocation of the investment budget, including the debt relief projected for 2001, 2002, and 2002. The medium-term objectives and corresponding costs are as follows: a. Basic education sector 1999 2000 2001 2002 2003 Gross enrollment rate (percent) 53.5 56 62 71 81 Gross enrollment rate for girls (percent) 39.9 43 51 60 70 Teachers required I/ 1,817 2,402 3,088 3,782 Number of classrooms to be built 245 560 985 1,537 Number of classrooms to be refurbished _ 703 703 703 822 1/ The stated number of teachers required is related to the increase in the number of students, taking into account the school infrastructure put in place by grassroots communities and integrated development projects (PAIB, PDR, PACV, etc.). Investment expenditure on classrooms (in thousands of Guinean francs-GF) 2001 2002 2003 Total cost of construction 10,708,687 19,580,355 31,786,156 Cost of refurbishing classrooms 9,880,055 10,275,258 12,496,546 Cost of classroom equipment _ 4,790,849 6,928,156 9,684,590 II. Total 25,379,601 36,783,767 53,967,292 III. Extensions IRE/DPE Expenditure on renovations and extensions 20,364,699 21,201,848 22,060,872 IV. Total investment 45,744,290 57,985,615 76,028,164 V. Operating expenses (in thousands of GF) 2002 2003 2004 Personnel expenditure 32,931,452 35,306,542 38,171,171 Operating expenditure/supplies 6,026,686 6,615,901 7,366,827 Expenditure on books and manuals 3,434,606 3,537,644 3,643,773 VI. Total expenditure 88,137,033 103,445,703 125,209,935 53 These costs are estimated on the basis of a financial simulation model. They may be adjusted when the strategies are refined and costs are assessed in detail. b. Health sector 211. An important segment of the health program concerns health care for women and children. To that end, the government has begun implementation of an ambitious vaccination program for children under I year old and women of child-bearing age. This program will run from 2000 to 2004. The vaccination coverage targets are as follows: Vaccines (*) Vaccination coverage targets 2000 2001 2002 2003 2004 BCG 80 85 90 95 95 DTC 70 75 80 85 90 VHB 20 30 40 45 50 VAR 80 85 90 90 90 VAA 20 30 40 45 50 VPO 70 75 80 85 90 VAT-2+ 60 65 75 85 90 212. The BCG, DTC, VHB, VAR, VAA and VPO vaccines are designed for children, whereas the VAT-2+ vaccine is designed for women of child-bearing age. Implementation of this program requires financing in the amount of US$12,669,848 to cover the following budget: 2000 2001 2002 2003 2004 Total Vaccines 879,685 1,106,314 1,360,720 1,539,242 1,706,448 6,592,409 Injection supplies 520,229 581,432 612,034 657,937 688,538 3,060,170 Other 512,936 573,281 603,454 648,712 678,886 3,017,269 Total 1,912,850 2,261,027 2,576,208 2,845,891 3,073,872 12,669,848 The detailed breakdown of costs is shown in Annex 5. As in the case of education, these data may undergo some adjustment on the basis of the ongoing review. c. Village water supply 213. Over the past 15 years, substantial efforts have been made to develop water supply infrastructure in rural areas. From 1985 to end-1999, some 8,500 water points (including more than 6,600 wells) were set up. Performance statistics for 1980-1999 are given in Annex 7. 214. The program currently being implemented by the national water point development service (SNAPE) aims to increase the number of water points in service to 15,000 by 2005. It should be noted that the total number of water points had reached 9,402 at December 31, 1999. The program targets the installation of 800 water points per year between 2001 and 2003, at an annual cost of US$16.2 million. 54 2001 2002 2003 2000-2005 Number of water points to be 800 800 800 5,598 installed Corresponding cost 16.25 16.25 16.25 113.7 (in US$ millions) This program also has a sanitation component for the installation of household and community latrines. However, the beneficiary population is expected to defray the cost of maintenance and repair of the facilities installed, the aim being to ensure more effective management of the equipment. d. Rural roads 215. Rural development policy is composed of several elements, one of which is the development of rural roads. The program for the period 2001-05 aims at rehabilitating 5,000 km and maintaining 13,500 km of rural roads, with an average of 1,000 km rehabilitated and 2,700 km maintained each year. Annual costs of this effort are US$30 million for rehabilitation and US$4.6 million for maintenance. 2001 2002 2001-05 Indicators Length Cost Length Cost Length Cost Km US$ millions Kmfr US$ millions km US$ millions Rehabilitation 1.000 30 1.000 30 5.000 150 Maintenance 2.700 4,6 2.700 4,6 13.500 23 Total 34,6 34,6 173 VI. Risks 216. Implementing the poverty reduction strategy is not without risk. Success will depend in part on the availability and rigorous management of resources. The experience gained since 1999, with no external support and financial costs generated by the lack of security in countries of the subregion, has revealed budget execution difficulties, especially for the management of a long-term strategy. To reduce this risk as far as possible, the principle of prioritization of objectives and underlying activities will be constantly applied, with a view to achieving greater efficiency in spending. The implementation of poverty reduction strategies will be accompanied by debt relief for Guinea. Additional financing could be sought from Guinea's partners to cover all financing requirements. Discussions will be held for the introduction of resource management procedures, with a view to ensuring that available resources are used exclusively for poverty reduction within a transparent, shared framework. 217. A second significant risk relates to ownership of the strategy and policies by the beneficiaries. This is one of the essential factors for ensuring the sustainability of the actions to be taken. Acceptance of ownership it will depend partly on the institutional and human 55 capacities of the entities responsible for strategy implementation at the central and decentralized levels. Considerable efforts are necessary for addressing these issues, for which real, sustained government commitment is required. To this end, the decentralization process initiated by the government, the participation of the responsible parties preparing and implementing the PRSP, and the actions to be carried out by the PRCI will be decisive. VII. Plan for preparation of the Poverty Reduction Strategy Paper 218. The discussions under way on the means of reducing poverty in Guinea are part of a continuous, sustained process. The strategy to be implemented will be enriched by all the information systems and analytical tools to be introduced. To gain a better grasp of the disparities between the genders and take appropriate account of them in the strategic policies to be adopted, surveys to be carried out for the final PRSP will embrace the gender approach. A set of activities will be undertaken on the basis of the final PRSP, with a view to achieving the following: 1. a better understanding of poverty and its determinants; 2. more in-depth, systematic, continuous participation by civil society and the introduction of a permanent consultation mechanism; 3. the updating of macroeconomic, sectoral, and intersectoral strategies; 4. a better knowledge of the impact of public spending; 5. trade-offs among the objectives within each sector and among the objectives of the various sectors, and consistency with the macroeconomic framework and budgetary resources; 6. the establishment of a system for monitoring poverty and assessing the impact of all policies, programs, and strategies; and 7. coordination of the activities of drafting the PRSP. 219. The matrix in Annex 3 summarizes this action plan and lists all the participants in the reduction of poverty and in the updating and further development of the poverty reduction strategy. It is set out in seven columns, as follows: objective, activities to be carried out, responsible parties, partners, expected results and outputs, cost, and preparation and implementation timetable. 220. This action plan will be further developed and discussed with all parties concerned, including Guinea's development partners, with a view to finalizing the financing of these activities. 56 Annex 1: Government poverty reduction policy statement I. Context and justification 1. Prompted by the need to improve the economic and social development climate, the government began implementing an ambitious program of economic and financial reforms in 1985. This program was designed to facilitate rational development of Guinea's economic potential, while minimizing macroeconomic imbalances within the framework of a market- oriented economy. 2. The implementation of these reforms has yielded substantial progress in recent years, particularly the creation of a more favorable development climate responsive of the international economic environment. 3. Useful though these reforms have been, the Guinean government has observed not so much a significant deterioration as a stagnation of the living conditions of a large part of the population, in spite of the progress obtained at the macroeconomic and financial levels. The comprehensive consumption/budget survey (EIBC 1994/95) estimated the proportion of the population living below the poverty line at 40.3 percent. 4. In view of these trends, the government has since 1995 been engaging in discussions and pursuing a variety of efforts designed to reconcile economic growth with social progress. This approach culminated in the preparation in 1997 of the document entitled "Guinea, Vision 2010," which reflects the concerns of economic growth and poverty alleviation. These goals were outlined and discussed with Guinea's partners during the meeting of the Consultative Group on Guinea held in Paris in June 1998. 5. Nonetheless, poverty remains severe, and the responses attempted thus far have failed to take account of all aspects of the problem, in terms of both how poverty emerges and how it gets worse. The persistence of poverty is reflected in low income levels and in disparities in access to available resources, low levels of education and training among the general public, persistence of disease and undernutrition, etc. 6. This, then, is the context in which the government is resolutely and solemnly committed to pursuing, amplifying, and systematically organizing its measures and efforts to combat poverty. II. Objectives 7. The government proposes to implement a consistent package of measures encompassing all sectors in a holistic fashion. In this context, the government's policy will focus on building an environment conducive to sustainable social and economic progress geared toward poverty eradication. 57 8. To achieve its objectives in the area of poverty reduction, the government is committed to strengthening its macroeconomic policy framework, to achieve effective management of public resources, to improve the climate for the private sector and to enhance the efficiency of the government sector. Thus, the government is intending to pursue and build upon measures geared toward decentralization and delegation of authority. The poverty reduction strategy paper 9. An interim poverty reduction strategy paper has been prepared on the basis of nationwide consultations conducted with the general public using a participatory approach. This paper focuses on strengthening growth and ensuring the equitable distribution of resources across the various population groups. For its implementation, the operational strategies are designed at the sectoral and intersectoral levels, with overall consistency being assured by means of the strategy preparation and execution process. 10. Because the general public has played a role in the design, implementation, and evaluation of this strategy, the resulting measures will be based on an objective analysis of social and economic realities at ground level. Thus, in light of the multiplicity of needs and requirements, it will be essential to set priorities. Pursuant to this interim paper, a final poverty reduction strategy paper will be prepared. 11. The following principles will guide the design and preparation of the poverty reduction strategy paper: * a holistic approach; * participation and accountability; * prioritization; * transparency in the management of public resources; D efficient and effective delivery of quality services to the public at large. 12. In addition, a monitoring and evaluation system, based on suitable indicators, will be implemented to assess the appropriateness and rigorously measure the impact of the chosen policies. 13. Finally, the government is committed to ensuring that the poverty reduction strategy paper (PRSP) is the sole frame of reference for its development activities; and the government will seek the same undertaking from its partners. 58 Annex 2: Matrix of poverty reduction strategies and policies Contents I. Budget policy II. Monetary, financial, and exchange rate policy III. Rural development IV. Mining sector V. Energy VI. Transport VII. Education VIII. Health IX. Water X. Housing and urban development XI. Gender and equity XII. Environment XIII. Medium-termn expenditure framework (CDMT) and priority sectors XIV. Decentralization XV. Judicial capacity-building XVI. Poverty monitoring and analysis system 59 A- Macroeconomic stabilization and growth GENERAL | DETAILED OBJECTIVES STRATEGIES/ACTIVITIES |NDICATORS/GOALS OBJECTIVE I. Budget policy: Improve fiscal Improve revenue levels, - Improve tax administration by restructuring the Generate a gross domestic management particularly nonmining revenues tax departments in Conakry and the regions / surplus of 3% of GDP in 2002 Strengthen VAT management, particularly through the systematic transfer of infornation Raise nonmining receipts from from the DND to the DNI. the equivalent of 7.8% in 1999 - Ensure more effective control over tax to 10% in 2002 collection through the implementation of indicators and incentives for tax collection officials. - Improve the collection of customs revenue through: (i) improved coordination between the customs services and the SGS; (ii) redeployment and training of staff; and (iii) fewer exemptions and increased monitoring of the remaining exemptions. Enhance the efficiency of - Strengthen the medium-term expenditure allocation of public resources framework (CDMT) focusing on: (i) regular updating of sectoral objectives and strategies; (ii) enhanced capacity to execute and monitor the CDMT; (iii) decentralization of budget resource management; (iv) application to all sectors. - Generate detailed data on the impact of new projects on recurrent expenditures. Ensure budget discipline - Improve medium-term forecasting of intersectoral expenditures and allocations, ensuring compatibility with the macroeconomic framework. Strengthen the expenditure control - Produce audited final budget accounts for each 60 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE framework fiscal year (budget review law) no later than 6 months after the end of the fiscal year. Improve the efficiency and - Set up a database containing information on competitiveness of the unit costs for current categories of equipment procurement process and projects. - Strengthen project preparation, execution, and monitoring. - Adopt a new system to manage local contributions for IDA-funded projects / Prepare independent audits of government contracts awarded by each sectoral ministry. - Monitor missed deadlines for the signing of government contracts and late payments. - Apply budgetary and regulatory procedures and harmonize the related texts; - Reorganize the National Directorate of the _______________ _ _ __ _ Treasury. II. Monetary, financial, and exchange rate policies Ensure economic - Stabilize inflation - Promote prudential use of domestic liquidity Lower inflation to an annual and financial through reliance on indirect management rate of less than 4 percent stability and instruments while ensuring strict compliance improve financing with required reserve ratios. conditions within - Pursue a policy of nonintervention by the the economy - Stabilize the exchange rate government authorities in the setting of the Raise the level of official exchange rate, and forego all discriminatory exchange reserves to the currency practices and exchange restrictions. equivalent of 6 months of imports in 2003. - Authorize the exchange bureaus to operate on the foreign currency auction market. - Encourage the informal private sector to Narrow the differential between surrender all its export receipts to the formal the parallel and official system exchange rates to below 4% in 61 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE system 2002. - Promote the sustainable - Design and implement the principles of mutual development of microfinance; financing in microfinance institutions. Provide all CRDs with at least - Prepare a regulatory framework for one savings and loan fund. microfinance and train personnel to implement these regulations. Limit the rate of arrears on - Enhance supervision over - Involve grassroots communities in managing loans to 5% in 2003. financial institutions; local savings and loan funds and in designing Conduct twice-yearly safeguards. inspections of financial - Harmonize prudential rules with the regulations institutions. prescribed by the Basle Committee. - Implement a new banking chart of accounts and strengthen the role of the auditors. - Standardize the tax regime applicable to banks. Limit the budget deficit - Exercise week-by-week monitoring over base excluding grants (commitment money expansion and enhance the effectiveness basis) to a maximum of 4% of of monetary policy instruments. GDP. - Prohibit any overshooting of this threshold, Limit monetary financing of the - Create a second monetary zone even in exceptional cases. Treasury to 10% of the previous in 2003 - Encourage the public to hold public debt year's tax revenue. - Facilitate efforts to harmonize securities. the microfinance entities in - Pursue a flexible and realistic exchange rate operation within the subregion. policy. - Standardize the prudential rules and regulations applicable to microfinance entities in operation in the subregion. 62 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE III. Rural development 1. Improve food Agriculture - Promote improved techniques for production - Rate of growth of and food security. Raise agricultural productivity and and storage. agricultural GDP of 10% production and facilitate product - Develop basic infrastructures: transportation, per year in 2010. 2. Raise the processing and marketing water, etc. - Rate of increase in the incomes of the yields and harvests of inhabitants of - Reform the legal and regulatory institutional rural areas framework: code governing property and public various crops. lands, in particular; improve access to land for - Quantity of calories less-favored or marginalized groups. available per inhabitant. - Enhance access to microcredit. - Volume of rice imports. - Protect the environment and ensure the rational - Surface area where grazing and sustainable management of natural is prohibited. resources: regulations, enhancement of know- - Number of associations how (e.g., improved fireplaces). created and trained. - Enhance rural organization in order to strengthen the capacities of farmers. Fisheries - Promote community involvement (establish - Rate of growth of subsector 1. Maximize the economic benefits and support committees for the development of GDP. of the rational use of fishery and landing areas); - Annual per capita fish aquaculture resources, and increase - Upgrade facilities (landing areas and dirt consumption from 13 kg in fish-farming production; roads); 1997 to 17 kg en 2007. - Procure equipment (engines, nets, spare parts) - Catch sizes. by reducing taxes on imports of fishery - Export revenues generated equipment and providing tax advantages; by fishery products. - Product processing and development; - Facilitate access to credit; - Protect fishery resources and ensure the rational and sustainable use of resources. 63 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE 2. Raise the incomes of fishermen - Support artisanal fishing; - Number of jobs created and and enhance job creation - Ensue the rational management of the industrial income distributed. fleet; - Management of inland fisheries; - Promote shrimp farming; - Management of human resources. Stock raising - Intensify stock raising through the development - Livestock count, by species; Provide a secure environment for of higher-potential sectors (poultry, hog, small - Quantity meat produced. the general public, ensure them an ruminant, and dairy farming, etc.); - Number of animals acceptable standard of living, with - Support the formation and development of vaccinated. the generation of marketable professional associations and groups; surpluses to raise the incomes of - Integrate stock raising into agriculture through livestock farmers. the development of animal traction, the use of animal fertilizer in agriculture, and the collection and use of agricultural byproducts in - Surface area of forage banks animal feed; / number of developed - Ensure environmental protection through the pastureland watering places. use of forest- and pastureland-dwelling species and the management of pastureland watering places. For the three subsectors - Support applied research; - Proportion of farmers Improve the information on the - Upgrade the information system. farniliar with the code framework of activities, tracking, governing pasturelands. and problem-solving. 64 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE IV. Mining sector Accelerate - Reduce the mining sector's - Pursue plans to reduce costs for CBG, Friguia, Growth rate for the sector economic growth expenses and enhance its and SBK; (in % per year) by harnessing competitiveness; Guinea's mining - Adopt new restructuring measures for SBK; potential - Reduce the State's equity stake in Friguia and/or enter into a new private concession arrangement. - Promote private investment - Promulgate implementing decrees to harrnonize and upgrade the sector's the provisions of the mining code with the products; provisions of other legislation. - Reform the institutional framework and set up an integrated development policy focusing on the processing of bauxite into aluminum. - Restructure the geological services and involve the private sector in their management. 65 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE V. Energy Improve the 1. Develop local resources to - Strengthen the financial autonomy of - Rate of access of at least economic reduce the cost of imports of enterprises; 65% by 2020 (starting from development petroleum products and [.] - Enhance the role of the private sector; a rate of 7% in 1999); climate and living - Establish a regulatory agency; - Price of one kWh reduced conditions of the - [...I by 30 percent in 2000 (based general public - Seek to achieve performance gains on the average price of through the (productivity, profitability, consistency, GF 176 in 1999;) provision of an quality); - Billing rate of 53% in 2000, adequate, - Support the Energy Development Fund; 70% in 2001, 75% in 2002, consistent, - Control the management of the distribution 80% in 2003 and 85% in competitive and network by reducing commercial and technical 2004 (compared to a rate of accessible supply losses; 43% in 1999) of energy - Restructure management, rationalize and - Rate of bill collection reduce expenditure - clean up costs exceeding 85% as of 2000 (compared to a rate of 83% in 1999). 2. Promote hydroelectricity and - Design and implement incentive policies, in renewable sources of energy (solar, terms of improving the investment framework biomass); and through the implementation of complementary measures and tax advantages. 3. Promote decentralized rural - Increase the density of the network by boosting electrification the number of subscribers and reducing access costs. 66 GENERAL | DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS/GOALS OBJECTIVE VI. Transport Improve the 1. Improve transportation - Plan and manage road maintenance; - New infrastructure built or mobility of conditions for the most - Develop road transportation intermediaries. improved: citizens disadvantaged members of . Km of dirt roads society. . Km of paved roads 2. Expand, improve, and - Ensure the sustainability of financing for the - Budget allocated by the maintain the road system. extension and maintenance of paved roads and State dirt roads; - % of the network in good condition - Ensure the construction and paving of the - Number of vehicles per km North highway corridor. and per day 3. Improve access to regional - Revitalize railroad transportation services; - % commercial traffic economic centers. - Implement a policy of achieving - Number of centers complementarity among the various modes of transport. 4. Enhance national institutional - Strengthen and redeploy national capacities - Number of financially capacities, and pursue - Promote SMEs and NGOs. viable SMEs capacity-building for SMEs. - SME turnover - Volume of work performed 67 B- Development of and equitable access to basic services GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE VII. Education Raise the level of 1. Broaden access to education by - Build classrooms, recruit, train, and provide - Rate of admission to the 151 education of the enhancing internal efficiency further training for teachers, supervisors, and year of school general public through the adoption of administrators; - Number of classrooms built regulatory measures to - Provide special education for the physically - Number of classrooms significantly reduce repeater handicapped; renovated rates at the primary and - Promote the development of private - Teacher/pupil ratio secondary school levels, With a education; - Supplementary teaching view to attaining educational - In urban areas, assess the possibility of positions objectives. expanding the double shift system to - Contractual teaching classrooms; positions - Offer opportunities to uneducated and - Number of NAFA centers, undereducated young people through the vocational literacy centers, development of NAFA Centers ("second and community-based 2. Raise the literacy rate. chance" schools), vocational literacy centers, literacy centers built and and community-based literacy centers. operational 3. Improve the quality of - Supply school textbooks; - Average number of education. - Raise the caliber of teaching through initial textbooks per pupil; and continuing training for teaching staff. - Number of professional - Develop the capacity to systematically check competitions; the knowledge acquired by schoolchildren; - Percentage of trained - Improve the training and motivation of teachers (continuing teachers; training) - Pass rates for graduation 4. Enhance the effectiveness of - Review syllabuses, and launch specially exams training and education. designed curricula; - Repeater rate - % of teachers inspected - Number of programs revised and operational; 68 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE - Number of curricula established 5. Pursue the policy of achieving - Educate parents through the use of APEAEs, - Enrollment rates for girls equity between the sexes and NGOs, and other associations. and boys in urban and rural among regions in the enrollment areas rate, and enhance the role played - Average age of entry to by communities in identifying school for girls and boys the aims of school and school management (construction, renovation, and maintenance). 6. Ease the constraints impeding - Reduce expenditure on private education - Average expenditure for access to education for poor tuition, particularly for lower-income groups; entry to school people. -I[.] 7. Enhance the information and - Generate statistical yearbooks within - Number of statistical research system at the sector timeframes that facilitate decision making; documents generated level - Generate yearbook annexes focusing on - Number of research / specific topics (personnel, examinations, assessment documents repeater rates, etc.); produced - Research the internal efficiency of the system - Periodicity (particularly at the secondary school level) - Number of people affected - Research the external efficiency of the system (training-employment issues); - Publish separate yearbooks for public and private education; - Ensure that statistical yearbooks incorporate financial data; - Establish regulations to govern the dissemination of statistical yearbooks. 69 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 8. Institution building through the - Create a strategy office in response to the - Consolidated legislation creation of an education policy recommendations of the report on the prepared, tasks and strategy and coordination office. economic and financial analysis of the responsibilities identified education sector; - Install the strategy office and appoint its management personnel; - Identify the tasks and research to be performed with regard to the education sector. VIII. Health Improve the health 1. Improve the access of poor - Improve the regional access of poor people to - Infant mortality rate from of the general people to quality essential services. the minimum health care package, expand 98%o to 70%o public coverage and develop community-based - Fertility rate in rural areas services; from 6.6 to 5 - Improve the availability and promotion of - Share of the national budget affordable, high-quality generic essential devoted to health from 5% consumables and drugs; to 10% - Enhance financial access by increasing equity - Rate of those excluded by in the allocation of resources and pricing of geographical factors from services; 40% to 20% - Improve the quality of essential care by - Rate of those lacking the implementing standards of technical quality ability to pay from 25% to and receptiveness. 10% - Rate of service utilization from 30% to 60% - Rate of disruption of medical supplies from 20% ___ __ _ __ _ __ _ __ _ _ _ to 5% 70 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 2. Improve the social checks and - Promote mutual aid organizations to provide - Rate of maternal mortality balances and the capacity of emergency obstetrical care; from 660 to 350 per decentralized institutions. - Establish health care councils, under the aegis 100,000, of the rural development communities; - Use of childbirth assistance - Create user advisory committees in services from 35% to 50%. prefectural, regional, and national hospitals; - Conduct a pilot experiment to subsidize comnmunity-based social funds. 3. Take more forceful action - Expedite nationwide implementation of - Rate of HIV prevalence against HIV/AIDS. activities geared toward the most exposed under 5% at the national groups (prostitutes, truckers, travelers, army, level etc.), through the distribution of condoms, - 40% rate of systematic treatment of STDs, and provision of advice; condom use in extramarital - Set up a youth outreach campaign sexual relations communicating key messages on behaviors to - 100% availability of AIDS- be adopted in order to avoid sexual fighting drugs contamination; - Percentage of people using - Open a voluntary screening center in the most STD/AIDS preventative important urban center within each region. measures 4. Modify unhealthy behaviors and - Educate the general public; - Rate of early marriage and curb harmful traditional practices. - Information/Education/Communication (IEC) sexual relations from 30% program; to 10% - Assess requirements and help (training, - Rate of contraceptive use. financing, etc.) integrate female practitioners - Number of practitioners of of genital mutilation into other professions; genital mutilation moved to other professions - % of girls subjected to genital mutilation 71 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 5. Take action to address nutritional - Boost the use of iodized salt: marketing - Rate of low birth weight in deficiencies. campaign, multisector system of quality newborns from 25% to 15% control and monitoring; - Rate of chronic malnutrition - Establish nutritional rehabilitation services in from 26% to 15% the hospital environment; - Rate of anemia among - Community-based nutritional promotion pregnant women from 60% activities; to 40%. - Promote the exclusive use of breast-feeding - Consumption of iodized salt up to the age of 6 months. > 90% - Iron consumption for pregnant women from 50% to 80%. IX. Water and sanitation Improve living 1. Protect water sources and - Ensure optimal use of natural resources; - Morbidity linked to poor conditions and reserves, watersheds, soil, forests, - Set up an integrated water supply information water quality reduced by economic and vegetation system; more than 50% competitiveness by - Develop the Water Fund; - Rate of access to safe water ensuring a - Launch and support programs for the (from 10% in 1985 and 50% consistent, protection of natural resources and in 1998) to over 90% by adequate, and ecosystems through regional and international 2010 affordable water cooperation; - 150 liters and 50 liters of supply, including - Strengthen continuous sanitation operations water provided per safe drinking (ensure functional drainage for towns, make inhabitant per day in urban water. adequate capital investment for the collection, and rural areas, respectively, treatment, and disposal of wastewater). by 2020 - 15,000 modern water points built in 2005, with a standard of 100 liters per day per inhabitant for all villages with more than 100 inhabitants 72 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 2. Facilitate the supply of water to agriculture and industry. X. Housing and urban development Improve housing 1. Equip 22 towns and their CRDs - Prepare urban development master plans for - Availability of resource conditions for the with resource handbooks 22 towns and CRDs. handbooks general public (documents guides). 2. Improve the physical environment - Ensure delivery of sanitation services; - Improved collective and of urban and rural populations. - Restructure old neighborhoods. independent sanitation systems 3. Mobilize local resources. - Ensure delivery of sanitation services; - Improved individual and - Restructure old neighborhoods. collective sanitation systems 4. Facilitate access to land title. - Construct commercial infrastructure for - Enhanced revenue communes and CRDs. 5. Develop residential areas. - Increase the density of geodetic points. - Access to a larger number of potential customers 6. Ensure the rational development - Development of 900 hectares of urban land. - Availability of developed of the housing and urban land development sector. Other programs Develop residential areas and - Improve the land tenure situation by provide priority basic services conducting a review of land legislation as set (waste management, etc.); out in the code on property and public lands; - Improve the supply of urban services through Develop and maintain road network; the gradual decentralization of urban management and the implementation of Promote employment in urban areas. independent financing mechanisms. - Support SMEs in operation in the trash - Number ofjobs created. collection sector. - Restructure the SPTD (public trash removal service). - Perform environmental impact assessments - Availability of studies, and and construct a new landfill. new landfill. - Execute the neighborhood rehabilitation 73 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE program with a focus on labor-intensive projects. - Undertake the preparation of feasibility studies and bidding documents for invitations to tender for the primary road network. - Launch an urban and financial audit for ten communes. - Execute priority investment programs and commune development programs in these ten communes. XI. Gender and equity Improve the living 1. Improve the quality of services - Improve the supply and quality of basic - Rate of women's access to conditions of rendered by public entities. services for women (education, health, etc.). basic services women by raising their economic and 2. Raise women's incomes. - Boost the technical and technological skills of - Prevalence of poverty social status women and enhance their entrepreneurship. among women - Boost access to production factors and facilitate the integration and advancement of distressed populations. Promote de jure 3. Improve the legal status of - Strengthen the legal framework governing the - Number of legal texts and de facto women. protection of women and children; drafted, or revised and equality between adopted the sexes in the - Produce and disseminate a legal guide on various legal women's rights - Availability of the guide and instruments number of persons and partners affected by its publication 74 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE XII. Environment Protect Guinea's 1. Protect water sources and - Adopt laws and regulations, inter alia with - Availability of laws and natural potential reserves, watersheds, soil, forests, respect to environmental impact assessment, regulations and vegetation. in order to establish benchmarks for safeguarding the environment. - Establish monitoring systems to oversee mining activities, protect coastal regions, and ensure sustainable use of forestry resources. - Adopt and implement a plan for the community-based protection and management of Fouta Djallon. - Availability of protection plan B- Governance and Capacity-Building GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE XIII. Medium-term expenditure framework (CDMT) and priority sectors Enhance the 1. Enhance efficiency in the - Strengthen the medium-term expenditure - Proportion of budget impact of public allocation of public resources. framework (CDMT) with a focus on constant allocated to priority sectors expenditure on updating; - Share of budget accounted poverty reduction for by poverty reduction through more - Review sector objectives and strategies, expenditure / total effective resource improve medium-term expenditure expenditure allocation forecasting and priority allocation of - Proportion of expenditure expenditure, and enhance the capacity to allocated to the entities with execute and monitor the CDMT; delegated authority 75 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE - Ensure the adoption of the CDMT by all sectors. 2. Improve the quality of services - Strengthen the human resources and the rendered by public entities. institutional framework to enhance the delivery of public services. - Enhance communication between those who provide services and those who receive them. - Implement appropriate performance-based incentive systems and institute penalties. 3. Enhance transparency in - Adopt a system for auditing government expenditure management. contracts and investment projects; - Prepare and disseminate performance indicators; - Prepare budget review laws on an annual basis for submission to Parliament. XIV. Decentralization Improve the 1. Strengthen the resource base of - Itemize sector allocations to the level of - Share of the budget quality of public local governments. decentralized entities, and monitor execution; allocated to the services through - Study other measures for mobilizing decentralized entities, by decentralization resources in favor of local governments; sector 76 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 2. Build institutional and human - Strengthen the institutional framework for capacities. grassroots entities and empower them to design, implement, and evaluate development projects; - Enhance communication between those who provide and those who receive services; - Establish and reinforce fora for dialogue between the general public, levels of government with delegated-authority, and elected officials; - Prepare simplified planning and programming tools using a participatory approach; - Make communities accountable for the creation and management of local poverty monitoring centers; - Implement appropriate, perfornance-based incentive systems. 3. Reduce the impact of corruption - Assess the nature and extent of corruption; on the country's economic and - Devise a strategy to take action against social development. corruption; - Set up an action plan to step up the fight against corruption. 77 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE XV. Strengthening the capacity of the judiciary Enable each 1. Guarantee the independence, - Strengthen the Judicial Service Commission Guinean to integrity, and professionalism of the (Conseil Superieur de la Magistrature); exercise his or her justice system. - Ensure that judges' careers are managed more rights effectively; - Put an end to interference with the judiciary; - Eliminate corruption (assets disclosure mechanism, establishment of a monitoring center, capacities); - Enhancing the ethical outlook within the sector (education); - Establish a pool of judges and auxiliary personnel, prepare documentation for the professions in the judiciary, as well as a career stream for judges. 2. Ensure that petitioners have - Ensure that Guineans have access to access to the courts. information (simplification, outreach, translation); - Ensure that poor people have access to the judicial system (legal aid offices, reduce court filing costs); - Expedite the administration of justice - Average processing time for (logistics, equipment, penalties); cases. - Adapt the justice system to reflect needs and realities; - Monitor enforcement (see goal of improving information). 78 GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE 3. Promote greater efficiency in the - Strengthen structures and rehabilitate the - Trends in recourse to the organization and administration of public service; courts (number of cases). justice. - Reform the financial management of the - Average cost borne by the justice system; petitioner. - Rate of enforcement of court decisions. 4. Foster accountability and - Reduce lawlessness, and curb legal abuses by transparency. judicial professionals by effectively punishing misdeeds and publicizing them (inspection reports, court decisions) 5. Help to bring about a legal system - Harmonize laws and regulations currently in that is more in tune with local force, and adapt them to the goals of African realities. integration (OHADA) 6. Enhance information, monitoring, - Create a center to monitor the justice system and analysis. for the purpose of measuring performance indicators (judicial personnel, civil society, government, religious, and traditional authorities, women) - Conduct a series of studies prior to finalizing - Availability of quality data on the strategy (focusing on its various aspects of poverty. objectives) to allow for fine-tuning. 79 C- Poverty Monitoring and Analysis System GENERAL DETAILED OBJECTIVES STRATEGIES/ACTIVITIES INDICATORS AND GOALS OBJECTIVE Monitor and Produce a poverty profile. - Conduct an integrated household - Publication and report on poverty consumption/budget survey; dissemination of poverty trends and the - Prepare and update a poverty map; profile impact of poverty - Perform an employment survey; - Publication and alleviation policies - Carry out participatory surveys; dissemination of poverty and programs - Create and operate an integrated statistical map information system (SISIRP); - Establish a poverty monitoring center and keep track of performance indicators for projects and programs; Improve the decision making - Establish a master plan for statistics; - Publication of the master process. - Produce final accounts for 1995-96; plan for the nation's - Generate provisional national accounts for accounts. 1997-98; - Prepare a single consolidated balance of payments after consultations between the Ministry of Planning and the BCRG; - Model household demand; - Prepare a social accounting matrix; - Prepare public expenditure reviews; Improve the AIDS information base. - Sero-surveillance and voluntary testing for Publication of statistical data on HIV; HIV/AIDS. 80 Annex 3: Poverty reduction strategy preparation plan: Period June 2000 - March 2002 OBJECTIVE ACTIVITIES RESPONSI- PARTNERS RESULTS/OUTPUTS COST TIMETABLE AND BILITY COMMENTS 1- A more precise . Conduct EIBC II DNS Users EIBC II report US$2,000,000 Preparation: June-Dec. understanding of Civil society Poverty profile US$50,000 2000 poverty and its Donors and lenders Execution: January root causes 2001 Results: March 2002 . Prepare and update a DNS Statistics Poverty map US$50,000 October 2000 - January poverty map with 15 to DNP producers 2002 20 indicators Donors and lenders . Create and operate an DNS All producers of Master plan for US80,000 June 2000 - January integrated core documents statistics 2002 statistical information . CD-ROMs of system (SISIRP) available publications . Model household DNS Social sectors . Results of models US$80,000 June - December 2001 behaviors (health, Donors and lenders and proposed education, housing, actions employment) Diagnostic study of DNPF World Bank Research report US$50,000 women in the informal FAO sector; Users Study on the working DNEPPE ILO, UNICEF, Research report US$60,000 conditions of children WB, HCR, NGOs and on street children . Various analyses on University Social sectors, Reports US$120,000 October 2000 - January poverty and equity Donors and lenders 2002 81 OBJECTIVE ACTIVITIES IZESPONSI- PARTNERS RESULTS/OUTPUTS COST TIMETABLE AND BILITY COMMENTS 2- Ensure a more Identify field DND Donors and lenders . Better training and US$30,000 September 2000 - June thorough, counterparts and assess DNP NGOs organization of 2001 systematic, and their skills and training Local government civil society ongoing role for and logistical needs civil society and . Implement an DND Donors and lenders . Permanent US$50,000 June - December 2000 implement a ongoing process of DNP NGOs mechanism for permanent dialogue Local government dialogue with the dialogue general public . Annual field DNS Civil society Ensure that the US$80,000 2 consultations during consultations (all DNP Other ministries general public has a the period regions) Donors and lenders meaningful role to play in choosing development projects . Surveys of DNS Entities providing Beneficiaries' US$120,000 6 surveys during the beneficiaries (by services views regarding period specific zones) services rendered through programs or projects 3- Update Macroeconomic MPC IMF Projections of US$50,000 May - June 2000 macroeconomic, strategies focusing on MEF WB macroeconomic sectoral (see poverty reduction BCRG Other donors and and financial below), and lenders indicators intersectoral Education Sector Other sector Updating of goals, US$40,000 Financing through the strategies partners, donors strategy, costs, etc. sectors and lenders, civil society Gender MASPFE Idem Research reports US$150,000 September 2000 - June 2001 Health Sector Idem Idem US$25,000 Idem Infrastructure Sector Idem Idem US$25,000 Idem 82 OBJECTIVE ACTIVITIES RESPONSI- PARTNERS RESULTS/OUTPUTS COST TIMETABLE AND BILITY COMMENTS Water Sector Idem Idem US$25,000 Idem Other sectors Sector Idem Idem US$75,000 Idem 4- More precise Review public Sectors, Other sector Review of US$120,000 2001 data on the impact expenditure on health, DNB, partners, donors expenditures, and of public education, and DNS and lenders, civil recommendations expenditure agriculture; society Analyze impact of Sectors, Other sector Impact analysis US$35,000 2001 public expenditure DNB, partners, donors report DNS and lenders, civil society 5- Tradeoffs Evaluate and prioritize Sectoral Donors and lenders Realistic and US$30,000 Mid-2001 among goals objectives across departmen relevant within individual sectors and within ts, MPC programming basis sectors and across specific sectors; MEF sectors, and their BCRG consistency with Analyze their the consistency with the macroeconomic macroeconomic framework and the framework and available budget available resources resources 6- Implement a Select indicators and DNS DNP Tools for the US$40,000 3rd quarter 2000 system to monitor implement Sectoral monitoring of poverty and assess mechanisms to monitor departments actions by the collective and evaluate actions by beneficiaries impact of policy, beneficiaries 83 OBJECTIVE ACTIVITIES RESPONSI- PARTNERS RESULTS/OUTPUTS COST TIMETABLE AND BILITY COMMENTS programs, and Establish a poverty DNS Sectoral statistical Social indicators; US$200,000 Design: Oct. - Nov. strategies monitoring center and DNP departments Monitoring of 2000 track performance University performance Collection: ongoing indicators for projects Donors and lenders indicators and programs Update the DNP World Bank, IMF, Model US$50,000 2001 macroeconomic and other donors and financial model lenders (incorporate a social component) 7- Coordinate the Produce the poverty Intermin- All sectors, donors DRSP US$350,000 Period activities involved reduction strategy isterial and lenders, civil in preparing the paper; hold meetings, committee society poverty reduction workshops, etc.; and strategy monitor work; produce technical reports units Total US$3,875,000 84 Annex 4: Sampling and results of consultations for the Country Assistance Strategy (CAS) Table 1: Representativeness of women Natural region Number of women Total participants Basse Guinee 160 661 24.2 Moyenne Guinee 218 755 28.9 Haute Guinee 161 666 24.2 Guinee Forestiere 52 580 9.0 Conakry metropolitan 424 718 59.1 area Total 1015 3380 30.0 Table 2: Summary of votes by sector, at the national level Regions Basse Guinee Moyenne Haute Guinee Guinee Conakry Total Rank % Guinee Forestiere Sectors Votes Rank Votes Rank Votes Rank Votes Rank Votes Rank Social 479 2 645 1 513 2 506 3 830 1 2973 1 29 lnfrastructure 756 1 591 3 565 1 340 2 267 4 2519 2 25 Rural 338 3 634 2 359 3 616 1 487 2 2434 3 24 development SMEs 318 4 244 4 210 4 215 4 384 3 1371 4 13 Governance 92 5 151 5 351 5 63 5 206 5 863 5 9 Total votes 1983 2265 1998 1740 2174 10160 100 Total voters 661 755 666 580 718 3380 85 Table 3: Summary of votes by subsector at the national level Regions Basse Guinee Moyenne Haute Guinee Guinde Conakry All regions National Total Guinee Forestiere Subsectors Votes % Votes % Votes % Votes % Votes % Votes % Votes % Paved/dirt roads 1095 33 599 16 840 25 482 17 95 3 3016 23 3111 18 Health 380 11 556 15 310 9 346 12 580 16 1592 12 2172 13 Agriculture 363 11 568 15 513 15 349 12 334 9 1793 13 2127 13 Education 295 9 558 15 372 11 343 12 362 10 1568 12 1930 11 Village-level water supply 363 11 347 9 179 5 81 3 0 0 970 7 970 6 Employment 73 2 64 2 69 2 49 2 445 12 255 2 700 4 Electricity 83 3 111 3 79 2 243 8 138 4 516 4 654 4 SME 188 6 178 5 97 3 75 3 109 3 538 4 647 4 Stock raising 28 1 155 4 13 0 96 3 173 5 292 2 465 3 Justice/Security 95 3 146 4 129 4 15 1 70 2 385 3 455 3 Youth 0 0 76 2 15 0 109 4 248 7 200 2 448 3 Promotion of women 0 0 33 1 0 0 88 3 316 9 121 1 437 3 Commune infrastructure 45 1 122 3 50 2 145 5 80 2 362 3 442 3 Tax decentralization 61 2 29 1 101 3 160 6 61 2 351 3 412 2 Environmental protection 91 3 30 1 30 1 132 5 93 3 283 2 376 2 Good governance 45 1 0 0 256 8 0 0 0 0 301 2 301 2 Telephone/telecom. 56 2 46 1 66 2 0 0 73 2 168 1 241 1 Fisheries 0 0 0 0 0 0 0 0 216 6 0 0 216 1 Urban public health 0 0 48 1 0 0 0 0 127 4 48 0 175 1 Water, forestry, 24 1 82 2 22 1 29 1 0 0 157 1 157 1 environment Rail transportation 0 0 27 1 24 1 2 0 72 2 53 0 125 1 Other (religions) 20 1 0 0 165 5 150 5 0 0 335 3 335 2 Total votes 3305 100 3775 100 3330 100 2894 100 3592 100 13304 100 16896 100 86 Table 4: Result of the vote validating the priority sectors Sectors Groups Total % 99 votes I II III IV V Infrastructure 22 19 6 34 16 97 33 Social 19 10 18 14 20 81 27 Rural development 12 10 25 17 17 81 27 Governance 6 4 2 5 5 22 7 SMEs 1 2 6 5 2 16 5 Total 60 45 57 75 60 297 100 Table 5: Results of the vote validating the priority subsectors Subsectors Groups Total % I II III IV V Paved/ dirt roads 26 27 25 39 19 136 30 Agriculture 17 7 14 17 12 67 15 Health 17 8 10 1 3 19 67 15 Education 14 8 12 13 19 66 15 Village-level water 1 0 3 5 4 13 3 supply Environment 5 1 2 0 2 10 2 Stock raising 0 0 4 0 2 6 1 Fisheries 0 5 2 1 0 8 2 Jobs 2 3 1 1 3 10 2 Youth 4 2 0 0 0 6 1 Promotion of women 4 6 0 0 3 13 3 SME/SMI 1 5 0 0 9 15 3 Security 0 0 8 2 10 20 4 Electricity 0 2 5 4 3 14 3 Total 91 74 86 95 105 451 100 Annex 5: Cost of priority actions for the education and health sectors 87 Primary Education (costs in thousands of Guineanfrancs) Years 1998 1999 2000 2001 2002 2003 2004 Timeframe of the model 7 Total population 7,625,367 7,871,7371 8,126,4041 8,389,6591 8,661,8031 8,943,1481 9 234 017 Annual growth rate (*) 3,1% Percentage of population aged 7-12 years 16,8% School-age population aged 7-12 years 1,279,900 1,321,2541 1,364,0011 1,408,1901 1,453,8701 1,501,0951 1 549 920 Percentage of girls in the school-age population 48% School-age population: girls 614,352 634,202 654,720 675,931 697,858 720,526 743 961 School-age population: boys 665,548 687,052 709,281 732,259 756,013 780,570 805 958 Population moving into CPI 719,794 751,974 785,625 820,815 857,616 896,104 936 356 Progression rate of population moving into CPI 5% Population acceptable into CP I public 642,761 671,576 701,710 733,227 766,189 800,666 836 727 population acceptable into CP I public: girls 309,285 323,142 337,634 352,791 368,642 385,221 402 562 population acceptable into CP I public: boys 333,477 348,434 364,076 380,436 397,547 415,445 434 165 Total of public primary school pupils in GuineaT 619,925| 668,5231 756,9981 874,1741 1,025,4361 1,212,1311 1 428 286 Years 1999 2000 2001 2002 2003 2004 Gross primary enrollment rate 54% 56% 62% 71% 81% 92% Boys 65% 69% 74% 82% 92% 104% Girls 40% 43% 51% 60% 70% 82% Annual growth rate at primary level 7,8% 13,2% 15,5% 17,3% 18,2% 17,8% Boys 7,8% 13,2% 15,5% 17,3% 18,2% 17,8% Girls 12,4% 18,8% 20,8% 21,4% 21,5% 20,0% (*) The population growth rate takes into account the presence of the refugees. Years 1998 1999 2000 2001 2 2003 20 Projections of teaching personnel 88 ~Requirement of classroom teachers 12,299 13,285 15,101 17,503 20,592 24,380 28,726 ~Annual teacher requirement (with increase in 986 1,817 2,402 3,088 3,788 4,347 number of pupils) [ Yea j 998 ~ 1999 2000 ~ 2001 2002 2003 2004 Investment spending Number of classrooms to construct, starting in 2000 245 560 985 1,537 2,061 Total cost of classroom construction 4 ,01,753 10,708,687 19,580,353 31,786,156 44,341,089 Number of classrooms to rehabilitate starting in 2000 703 703 703 822 822 Cost of rehabilitation of classrooms in bad condition 9,500,053 9,880,055 10,275,258 12,496,546 12,996,408 Number of classrooms to be equipped starting in 2000 . 1,419 2,213 3,138 4,300 5,369 Cost of equipment 3,011,541 4,790,849 6,928,156 9,684,590 12,334,881 Number of classrooms to equip with common use funiture starting in 2000 1,419 2,213 3,138 4,300 5,369 Cost of equipment for common use in classrooms 613,882 995,731 1,468,183 2,092,555 2,717,464 Investment in classrooms (millions) _ _17,627,229 26,375,322 38,251,950 56,059,847 72,389,842 Cost of administrative investment l7 Number of administrative units to be renovated or extended 2,000 2,012 2,014 2,015 2,016 Spending on renovations and extensions IRE /DPE 19,468,800 20,364,699 21,201,848 22,060,872 22,954,695 Total investment spending | 37,096,029 46,740,021 59,453,798 78,120,719 95,344,536 89 Years I 1998 I 1999 2000 2001 2002 2003 2004 Summary of spending on personnel, operations, and investment ___ A. Personnel costs 29,350,223 29,942,097 31,104,384 32,931,452 35,306,542 38,171,171 41,330,737 B. Operation costs - Material and supplies 3,393,696 4,119,947 4,923,337 5,030,955 5,147,718 5,274,272 5,396,704 C. Investment, construction, and equipment costs - 37,096,029 46,740,021 59,453,798 78,120,719 95,344,536 Total spending 32,743,919 34,062,044 76,458,319 88,137,033 103,445,703 125,209,935 145,825,064 Spending used to calculate unit costs 32,743,919 34,062,044 36,027,721 37,962,406 40,454,260 43,445,442 46,727,441 National unit cost per pupil 55,748 54,968 53,489 50,496 47,986 45,695 44,077 90 Health sector Vaccinations Target population and vaccination rate 2000 2001 2002 2003 2004 BCG Target population 320,068 329,030 338,243 347,714 357,450 _Rate. 0.80 0.85 0.90 0.95 0.95 DTC Target population 320,068 329,030 338,243 347,714 357,450 ._Rate 0.70 0._75 0.80 0.85 0.90 VHB Target population 320,068 329,030 338,243 347,714 357,450 Rate. 0_20_0_30 0.40 0.45 0.50 VAR Target population 320,068 329,030 338,243 347,714 357,450 Rate 0.80 0.8s 0.90 0.90 0.90 VAA Target population 320,068 329,030 338,243 347,714 357,450 Rate -_0.20 0.30 0.40 0.45 0.50 VPO Target population 320,068 329,030 338,243 347,714 357,450 Rate 0.70_ 0.75_ 0.80 0.85 0.90 VAT Target population 2,000,424 2,056,436 2,114,016 2,173,209 2,234,058 _Rate 0.601 0.651 0.75 0.85 0,90 91 Anual Cost (in $ US) Cumulative Vaccinations Unit cost unitaire 2000 2001 2002 2003 2004 BCG 0.080 51,211 55,935 60,84 66,066 67,915 302,011 DTC 0.090 112,860 124,307 136,307 148,881 162, 053 684,407 VHB 0.650 232,885 359,109 492,219 569,251 650,211 2,303,676 VAR 0.160 76,434 83,485 90,871 93,416 96,031 440, 237 VAA 0.214 76,673 118,230 162,054 187,415 214,070 758,441 VPO 0.090 150,480 165,743 181,742 198,508 216,70 912,543 VAT 0.040 179,142 199,505 236,644 275,706 300,097 1,191,094 Sub total vaccinations 879,685 1,106,314 1,360,720 1,539,242 1,706,448 6,592,409 Refrigeration equipment 79,833 89,225 93,921 100,965 105,661 469,603 Injection equipment 520,229 581,432 612,034 657,937 688,538 3 060,170 Transport 293,251 327,751 345,001 370,876 388,126 1 725,005 Fuelfor preservation 16,263 18,176 19,133 20,568 21,525 95,665 Maintenance (1) 15,000 16,765 17,647 18,971 19,853 88,235 Training 31,810 35,553 37,424 40,231 42,102 187,120 Social mobilization campaigns 35,263 39,411 41,486 44,597 46,671 207,428 Monitoring and 38,250 42,750 45,000 48,375 50,625 225,000 evaluation Implementation and management (2) 3,266 3,650 3,843 4,131 4,323 19,213 TOTAL VACCINATION 1,912,850 2,~261,27 2,576,208 2,845,891 3,073,872 12,669,848 NB: (1) Refrigeration equipment, motorcycles, vehicles, and bicycles. (2) Supervision, advance activities, reports and other management tools.. 92 Annex 6: Evolution of spending in priority sectors, 1995-2000 (in thousands of Guinean francs) 1995 1996 1997 1998 1999 2000 Proj. Higher education and 13,456,099 19,226,498 21,206,695 24,042,336 22,041,021 26,320,372 scientific research Personnel 2,265,971 5,176,495 6,432,314 7,900,696 8,047,824 7,688,372 Operating costs 619,727 5,289,685 4,586,849 781,436 1,097,914 2,220,000 Transfers/Subsidies 8,114,152 6,736,318 7,719,847 11,616,320 11,804,117 13,479,100 Investment 2,456,249 2,024,000 2,467,684 3,743,884 1,091,166 2,932,900 Pre-university and _ _ __ _ __ civic education 49,996,692 51,344,242 42,889,856 50,619,321 55,150,679 64,291,960 Personnel 43,457,029 47,320,954 41,370,439 44,432,755 47,802,210 51,848,160 Operating costs 6,489,663 4,023,287 1,519,417 4,811,566 6,240,705 10,205,000 Investment 1,375,000 1,107,764 2,238,800 Technical education 11,409,195 5,687,236 7,456,038 9,770,578 and professional training Personnel 7,919,415 3,110,534 3,848,497 4,246,878 Operating costs 3,489,780 2,451,702 3,454,821 4,985,000 Transfers/Subsidies 200,000 Investment 125,000 152,720 338,700 Total -Education 63,402,79 70,570,739 75,50S,746 80,348,893 84,647,738 100,382,910 Sector Personnel 45,723,000 52,497,449 55,722,168 55,443,985 59,698,531 63,783,410 Operating costs 7,109,390 9,312,972 9,596,046 8,044,704 10,793,440 17,410,000 Transfers/Subsidies 8,114,152 6,736,318 7,719,847 11,616,320 11,804,117 13,679,100 Investment 2,456,249 2,024,000 2,467,684 5,243,884 2,351,650 5,510,400 93 Public Health 16,405,916 17,127,774 20,392,017 18,023,700 18,965,531 24,764,820 Personnel 8,822,093 10,925,315 12,204,274 12,377,631 12,729,090 13,992,170 Operating costs 343,074 1,119,825 2,185,657 995,496 1,850,672 3,850,000 Transfers/Subsidies 2,000,000 1,270,000 2,000,000 1,500,000 2,434,531 3,542,750 Investment 5,240,749 3,812,634 4,002,086 3,150,573 1,950,976 3,379,900 Agriculture and 23,442,385 21,052,708 23,762,520 23,203,415 27,911,280 25,055,070 Animal Husbandry Personnel 16,110,317 17,216,000 17,791,186 18,254,566 17,961,916 18,603,520 Operating costs 224,655 158,017 159,384 777,668 502,238 795,150 Transfers/Subsidies 50,000 - 50,000 Investment 7,107,412 3678,691 5,811,950 4,121,181 9,447,126 5,606,400 1995 1996 1997 1998 1999 2000 Proj, Fishery and 614,420 1,353,142 2,210,001 2,558,811 2,931,558 2,728,300 aquaculture Personnel 25,789 882,0000 1,130,921 1,496,857 1,276,509 1,511,900 Operating costs 122,340 121,142 234,153 360,464 155,049 480,500 Transfers/Subsidies 65,000 - 185,500 Investment 466,291 1,350,000 844,927 636,490 1,500,000 550,000 Transport and 10,068,464 16,170,577 15,163,931 19,571,499 20,381,570 25,853,740 public works _________ Personnel ND 1,056,694 960,243 3,488,120 3,253,091 3,302,790 Operating costs 4,301,654 5,512,500 7,206,183 7,231,201 10,413,949 13,616,350 of which: Road Fund 4,100,000 4, 625,000 7,000,000 6,450,000 9,975,000 12,800,000 Transfers/Subsidies 32,250 - 80,000 Investment 5,766,810. 9,601,383 6,997,505 8,819,928 6,714,530 8,854,600 94 Total budgetary expenditure (in thousands of Guinean francs) 449,844,000 376,582,000 469,888,000 503,540,000 566,584,000 728,205,000 Public debt 122,623,000 112,483,000 163,209,000 152,014,000 216,485,000 243,050,000 27.26%o 29.9% 34.7% 30.19% 38.2% 33.38% Personnel wages 168,673,000 172,282,000 169,106,000 180,900,000 190,778,000 203,250,000 Operating costs 87,562,000 52,922,000 80,804,000 87,097,000 79,087,000 120,650,000 Transfers/Subsidies 21,116,000 15,322,000 18,419,000 33,285,000 38,912,000 76,907,000 Investment 48,840,000 22,880,000 32,077,000 43,928,000 41,322,000 70,005,000 Financial investment 1,030,000 693,000 6,273,000 6,316,000 - 14,343,000 95 Share ofpriority sectors in the national budget 1995 1996 1997 1998 1999 2000 Proj, Education sector 14.09 18.74 16.07 15.96 14.94 13.78 Pre-university education 11.10 13.63 11.56 10.05 9.73 8.83 Health 3.65 4.55 4.34 2.91 3.35 3.40 Rural development 5.1______ Rurad55.21 5.59 5.06 4.61 4.93 3.44 Road Fund 0.9 1.2 1.45 1.28 1.76 1.76 Share ofpriority sectors in the current operations budget (Titles III and IV) 1995 1996 1997 1998 1999 2000 __________________ ~~~~~~~~~~~Proj, Education sector 14.0 23.5 17.45 18.77 19.15 15.7 Pre-university education 5.97 5.89 1.53 4.0 5.29 5.17 Health Health_____________ 2.16 3.5 4.21 2.1 3.63 3.74 Rural development 0.32 0.4 0.4 1.04 0.56 0.76 Source : National Budget Directorate (Ministry of Economy and Finance), 96 Annex 7: Village Water Supply Annual Outcomes Summary of outcomes 9 Years Wells Fruits Springs Total Tota7 1979 0 19 1 1 30 30 1980 0 36 98 134 164 50 1981 4 53 47 104 268 40 1982 5 47 77 129 397 1983 93 45 49 187 584 1984 71 47 67 185 769 2 1985 58 36 73 1E9 938 0 1986 264 37 114 415 1,353 0100- .,|... 19871 2581 351 1171 4101 1,7631 1979 198 1981 1 983 1984 1985 1986 1987 19 989 1990 1991 1992 193M 19 1951S 1997 19 19887 3581 41 124 523 2,286 1988 358 41 124 523 2,286 0 ~~~~-4 Wells --*-Fruits --t--Springs --*4-Totall 1989 667 57 143 867 3,153 1990 657 56 121 834 3,987 1991 670 76 139 885 4,872 1992 582 79 192 853 5,725 1 000 Cumulative total at December31, 1999 (9,402 water points) 1993 559 65 104 728 6,453 1994 374 56 30 460 6,913 1995 312 56 60 628 7,541 1996 392 91 13 496 8,037 7,000 1997 346 1I1 4 461 8,498 6,000 1998 314 13 28 355 8,853 5,000 1999 524 ol 25 549 9,402 4,000 6,708 1,0561 1,6381 9,402j 3,000 2,000 1,000 v<9 F° 8 9°) N NO Nq06 N,+ , N0 N9 ,+ ,+ ab , N9 , -4--Wells --Fruits -t6-Springs 4Total Wi Cumul. Total- 97 Guinea: Selected Economic and Financial Indicators, 1997-2003 1/ 1997 1998 1999 2000 2001 2002 2003 Est. Est. Proj. Proj. Proj. Proj. (Annual changes in percent, unless otherwise indicated) Income GDP at constant prices 4.8 4.5 3.3 4.5 4.5 5.1 5.4 Consumer prices Average 1.9 5.1 4.6 7.7 9.5 3.5 3.0 Extemal sector Exports, f.o.b. (in U.S. dollar terms) 8.2 8.6 -9.3 -10.1 -8.5 8.2 8.1 Imports, f.o.b. (in U.S. dollar terms) -1.9 0.7 3.5 -7.2 -3.8 9.0 8.3 Terms of trade Percentage change 13.1 4.9 -17.4 -7.4 -1.1 6.9 1.0 Average effective exchange rates (depreciation -) Nominal index -0.6 -6.8 -17.1 ... ... ... ... Money and credit Net foreign assets 2/ 20.4 5.6 -6.9 -3.1 20.2 ... Interest rate 3/ 9.0 9.0 7.5 7.5 7.5 ... ... (In percent of GDP) Central government finances Total revenue and grants 14.6 14.1 13.0 14.0 15.6 15.7 15.8 Current expenditure 9.1 8.7 8.9 9.6 9.9 9.2 8.8 Capital expenditure and net lending 8.4 6.0 7.1 7.4 5.8 5.3 4.8 Gross investment 23.6 21.0 22.0 22.2 21.8 22.5 22.4 Extemal public debt 4/ 82.8 95.7 93.9 104.9 115.9 111.3 105.8 (In percent of export earnings) External debt-service ratio 5/ 25.6 19.3 17.2 16.8 16.4 14.9 13.8 Extemal public debt 406.2 416.0 441.0 366.6 351.6 338.4 323.9 (In millions of U.S. dollars, unless otherwise indicated) Exports 6/ 660.0 716.5 649.7 740.4 814.3 881.4 953.0 Imports 6/ 572.4 576.6 596.8 588.5 634.7 691.6 748.8 Gross official reserves (in months of imports) 3.0 3.2 2.7 2.3 2.6 3.5 3.5 Nominal GDP 4,266 4,434 4,831 5,356 5,917 6,508 7,147 Sources: Guinean authorities; and staff estimates and projections. I/ This table reflects the results of the discussions with the authorities in October-November 2000. The projections for 2001-03 will be adjusted following the negotiations of a new three-year PRGF arrangement in the first quarter of 2001. 2/ In percent of broad money stock at beginning of period. 3/ Minimum annual rate on bank savings deposits, at end of period. 4/ Including debt owed to the Fund and to the Baltic countries, Russia, and other countries of the former Soviet Union. 5/ Scheduled public debt service, including IMF charges and repurchases. 6/ Merchandise trade figures only. 98 Map l. Degree of Poverty by Prefecture, Based on 15 indicators Ministry at the Presidency responsible for Foreign Affairs Secretary of State for Cooperation (SSC) N National Directorale of Cooperation (NDC) 15 indicators and threshold values {Ksiogu 1 1 - number of water points per 100 km2 < 5 - prefectural percentage of rehabilitated or reconstniected roads < 40% \t. im -percentage of viable roads c<30% u4c; ,o Macenita X XX - nuf ber of private telephone lines 0 O w : - area of improved marshlands C 100 ha -areaofimprovedplains l00ha - total cultivated area for farmer c 1,8 haK _ : ; s - share of active population covered by projects < t10% zl >:;---. - number of inhabitants per medical center> 22,000 - number of inhabitants per doctor or nurse> 7,000 - gross enrollment rate c<42% - number of inhabitants per civil servant>293 - amount of salarics and pensions paid by the State c GF 13,800 per person - amount of investment planned by the rural development centers < GF 50 billion. -0 0 6 62 _ 2o tr 99