Document of The World Bank FOR OFFICIAL USE ONLY Report No. 69913-SL INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION AND MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT FOR THE REPUBLIC OF SIERRA LEONE FOR THE PERIOD FY10-FY13 July 12, 2012 World Bank West Africa Department 1 IFC MIGA Sub-Saharan Africa Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the World Bank‘s authorization. REPUBLIC OF SIERRA LEONE – FISCAL YEAR January 1 - December 31 CURRENCY EQUIVALENTS (as of May31, 2012) Currency Unit = Leone US$1.00 = Le 4,340 WEIGHTS AND MEASURES Metric System ACRONYMS AND ABBREVIATIONS AAA Analytical and Advisory Activities ACC Anti-Corruption Commission ACGF Africa Catalytic Growth Fund AfDB African Development Bank AML/CFT Anti-Money Laundering and Combating the Financing of Terrorism APC All People‘s Congress APEIE Africa Program for Education Impact Evaluation ASREP Agriculture Sector Rehabilitation Project BB Bank Budget BECE Basic Education Certificate Examination BHP Bumbuna Hydroelectric Project BSL Bank of Sierra Leone CAADP Comprehensive Africa Agriculture Development Program CAP Scan Management for Development Results Capacity Scan CAR Commitment at Risk CAS Country Assistance Strategy CASA Conflict-Affected States in Africa CASPR Country Assistance Strategy Progress Report CDTI Community-Directed Ivermectin Distribution CET Common External Tariff CG Consultative Group CHYAO Child and Youth in Africa Trust Fund CPAR Country Procurement Assessment Review CPIA Country Policy and Institutional Assessment CPR Country Portfolio Performance Review CSO Civil Society Organization CSP Country Strategy Paper CSR Country Status Report CWIQ Core Welfare Indicators Questionnaire DfID Department for International Development DFGG Demand for Good Governance DP Development partner DPO Development Policy Operation DOTS Directly Observed Treatment Short Course DTIS Diagnostic Trade Integration Study EFA FTI Education for All Fast Track Initiative EGRP Economic Governance Reform Program EITI Extractive Industries Transparency Initiative EMS Education Management System ENCISS Enhancing Interaction and Interface between Civil Society and the State to Improve Poor People‘s Lives EPA Economic Partnership Agreement ESMAP Energy Sector Management Assistance Program ESW Economic Sector Work EU European Union FCS Fragile and Conflict affected Situations FDI Foreign direct investment FIAS Foreign Investment Advisory Services FIRST Financial Sector Reform and Strengthening FIU Financial intelligence unit FM Financial management FMCG Fast Moving Consumer Goods FSAP Financial Sector Assessment Program FSF Fragile States Facility FY Fiscal Year GDP Gross domestic product GEF Global Environment Facility GER Gross Enrollment Ratio GoSL Government of Sierra Leone GRGC Governance Reform and Growth Credit GRGG Governance Reform and Growth Grant GVWC Guma Valley Water Company HIPC Heavily Indebted Poor Countries HRMO Human Resources Management Office IBRD International Bank for Reconstruction and Development ICA Investment Climate Assessment ICAO International Civil Aviation Organization IDA International Development Association IDP Infrastructure Development Project IDF Institutional Development Fund IFC International Finance Corporation IFMIS Integrated Financial Management Information System IMF International Monetary Fund IPFMRP Integrated Public Financial Management Reform Project IRCBP Institutional Reform and Capacity Building Project JAS Joint Assistance Strategy JICA Japan International Cooperation Agency JSANS Joint Staff Advisory Notes JSS Junior Secondary School JSDF Japan Social Development Fund KFW Kreditanstalt fur Wiederaufbau LC Local Council LG Local Government LGA Local Government Act MDAs Ministries, departments and agencies MDBS Multi-donor Budget Support MDG Millennium Development Goal MDRI Multilateral Debt Relief Initiative MDTF Multi-Donor Trust Fund MICS Multiple Indicator Cluster Survey MIGA Multilateral Investment Guarantee Agency MMMR Ministry of Mines and Mineral Resources (MMR) MMR Ministry of Mineral Resources MOA Memorandum of Agreement MoFED Ministry of Finance and Economic Development MOU Memorandum of Understanding MT Metric ton MTEF Medium-Term Expenditure Framework NaCSA National Commission for Social Action NASSIT National Social Security and Insurance Trust NCP National Commission for Privatization NER Net Enrollment Ratio NERICA New Rice for Africa NPA National Power Authority NPPA National Public Procurement Authority NPSE National Primary School Examination NSA Non State Actor NPV Net present value NSAP National Social Action Project O&M Operation and maintenance PAD Project Appraisal Document PAF Progress Assessment Framework PAR Portfolio at Risk PCR Primary Completion Rate PEFA Public Expenditure and Financial Accountability PEP Private Enterprise Partnership for Africa PER Public Expenditure Review PETS Public Expenditure Tracking Survey PFM Public financial management PHU Public health unit PIU Project implementation unit PPIAF Public-Private Infrastructure Advisory Facility PPP Public-Private Partnership PRGF Poverty Reduction and Growth Facility PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper PSC Public Services Commission PSD Private sector development RABI Removing Administrative Barriers to Investment Project RCHP Reproductive and Child Health Project RIMsys Results integration and management system ROSC Report on the Observance of Standards and Codes SA Social Accountability SHARP Sierra Leone HIV/AIDS Response Project SIL Specific Investment Loan SL Sierra Leone SLIEPA Sierra Leone Investment and Export Promotion Agency SLIHS Sierra Leone Integrated Household Survey SLPRSP Sierra Leone Poverty Reduction Strategy Paper SLRA Sierra Leone Roads Authority SMC School Management Committee SSA Sub Saharan Africa SWAp Sector-wide approach TA Technical assistance TB Tuberculosis bacillus TEU Twenty-foot Equivalent Unit TURFS Territorial Use Rights Fisheries UNMIL United Nations Mission in Liberia WAPP West African Power Pool UK United Kingdom UN United Nations UNDP United Nations Development Programme UNFPA United Nations Population Fund UNHCR United Nations High Commission for Refugees UNICEF United Nations Children‘s Fund UNIPSIL United Nations Integrated Peacebuilding Office in Sierra Leone USAID United States Agency for International Development VSAT Very Small Aperture Terminal WAPP West Africa Power Pool WBG World Bank Group WBI World Bank Institute WFP World Food Program WHO World Health Organization WORLD BANK Vice President: Makhtar Diop Country Director: Yusupha Crookes Country Manager: Vijay Pillai Task Team Leader (s): Vijay Pillai and Renée Desclaux Task Team Members Sergiy Kulyk, Cyrus Talati, Anders Jensen, Thomas Losse-Mueller, Mamadou Barry, Christopher Gabelle, Mohamed Sidie Sheriff, Margaux Hall INTERNATIONAL FINANCE CORPORATION Vice President: Thierry Tanoh Country Director: Yolande Duhem Resident Representative : Mary Agboli Strategy Unit: Frank Douamba Core CAS Team: Mary Agboli MULTILATERAL INVESTMENT GUARANTEE AGENCY Vice President and Chief Operation Officer Michel Wormser Finance and Risk Management: Conor Healy, Moritz Zander ACKNOWLEDGEMENTS The World Bank Group greatly appreciates the close and fruitful collaboration with the Government of Sierra Leone in the preparation of this Country Assistance Strategy, Progress Report (CASPR). This CASPR was prepared by members of the World Bank Group‘s Sierra Leone Country Team, including Vijay Pillai, Sergiy Kulyk, Renée Desclaux, Cyrus Talati, Roberto Panzardi, Susan Hirshberg, John Van Dyck, Vivek Srivastava, Chris Gabelle, Jens Kristensen, Serdar Yilmaz, Qaiser Khan, Waqar Haider, Yusuf Foday, Evelyn Awittor, Margaux Hall, Sidie Sheriff, Nikolay Nikolov, Gibril Jalloh, Chris Atim, Christophe Lemière, Alan Moody, Hardwick Tchale, Bidemi Abioseh Carrol, Charles Annor-Frempong, John Virdin, Thomas Losse-Mueller, Cari Votava, Michael Jarvis, Moritz Zader, Frank Armand Douamba, Mary Agboli, Maria Miller, Anders Jensen, Conor Healy under the overall leadership of Yusupha Crookes. COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT TABLE OF CONTENTS I. Introduction…………………………………………………………………………………………...1 II. Country Context and Recent Developments………………………………………………..............2 III. Progress towards CAS Outcomes and Portfolio Performance ……………. ……….……7 A. Progress against CAS Pillars: Human Development and Inclusive Growth………..………….7 B. Portfolio Performance ……………………………………………………………………….... 9 C. Lessons Learned……………………………………………………………………………….11 IV. Adjustments to the CAS moving forward…………………………………… ……………………11 V. Key Constraints and Risks……………………………………………………….…………….........15 Annex1a : CAS Results Matrix – FY09-12 Progress to date Annex1b: CAS Results Matrix – FY12-13 Annex 2 : Managing the Extractives Boom Annex 3 : Promoting Social Accountability for Development Impact Annex 4: Progress on Millennium Development Goals Annex 5: CAS (FY10-FY13): Main Funding Sources Annex 6: Changes in the Indicative Lending Program for the FY10-13 CAS Annex 7: Status of Non-Lending Activities Annex 8: Selected Indicators of Bank Portfolio Performance and Management Annex 9: IDA Base Case lending Program Annex 10: Sierra Leone‘s Key Economic and Program Indicators Annex 11: IFC Investment Operations for Sierra Leone Annex 12: IFC‘s Committed and Outstanding Portfolio Annex 13: IDA Operations Portfolio and Grants Annex 14: Donor Partnership Annex 15: Sierra Leone at-a-glance MAP of Sierra Leone No. 33478 I. INTRODUCTION 1. This Progress Report assesses the implementation to date and the adjustments to the Joint Country Assistance Strategy (CAS) of the World Bank Group (WBG) and the African Development Bank (AfDB) for FY 2010-2013. 1 The CAS discussed by the Bank‘s Board on April 6, 2010 was based on the priorities identified in the second Poverty Reduction Strategy, Agenda for Change, and focused on two pillars: (i) human development; and (ii) promoting inclusive growth. At midterm, satisfactory progress has been achieved towards meeting the original CAS outcomes and milestones, and this report proposes adjustments to the CAS in order to align WBG support with significant changes to the country context. 2. Two Annual Progress Reports of the Poverty Reduction Strategy (PRS) were prepared by the Government of Sierra Leone (GoSL) in 2010 and 2011. These Progress Reports were prepared following a joint government/CSO/development partner consultative process, and both reports conclude that satisfactory progress is being made in addressing priorities under the Agenda for Change. These and other recent reports have informed this CAS Progress Report. The 2011 Integrated Household Survey data analysis is currently underway, and the results are expected to be available over the coming months. The latest available data indicates that during the CAS implementation period progress has been made, albeit at different levels, on most indicators of growth, poverty, MDGs, fragility, investment climate, and governance. However, there remain significant challenges and Sierra Leone is still one of the poorest countries in the world with some of the worst human development indicators. 3. This CAS Progress Report is being prepared at a significant stage in the country‟s development. Sierra Leone has enjoyed remarkable peace and stability since the end of the brutal civil war, ten years ago. The country is now preparing for the third national elections to be held in late 2012, and if it goes smoothly, Sierra Leone would have achieved the distinction of having run three successful elections since the end of the conflict. This would be an important milestone in Sierra Leone‘s recovery from ‗post-conflict‘ status. National stakeholders appreciate the importance of smooth and peaceful elections, thus ensuring that no reversals take place in the progress that has been made during the past decade. Another sign of the country‘s recovery is the steady improvement in the CPIA scores – in 2011 with a score of 3.3, Sierra Leone has moved beyond the threshold of Fragile and Conflict Affected States (FCS)2. At the same time, the country is undergoing a major economic transformation underpinned by the extractives sector – perhaps the most significant transformation the country is likely to see in a generation. According to the latest projections, Sierra Leone is likely to record a 36 percent GDP growth in 20123 – a one-time shift on account of the initiation of iron-ore exports. The extractives-driven boom comes with its sets of opportunities and challenges, and making the transformation as smooth as possible will be a priority for the country. 4. The Progress Report has been prepared as a good segway into the next CAS, which is likely to be ready by FY14. Sierra Leone is currently initiating the preparation of its third PRS: the ―Agenda for Prosperity‖, which is expected to be finalized in early 2013. The initial concept note prepared by the Government of Sierra Leone (GoSL) and circulated as a basis for consultations has informed this Progress Report. The next CAS will be developed once the third PRS has been completed and will follow the Joint Staff Assessment Note (JSAN). 1 Due to slightly different timeframes of the WBG and AfDB for the CAS, this report is only for the WBG. AfDB is doing a CAS Completion Report as its CAS is valid only until September 2012. However, the two teams have carried out joint assessments and have shared the drafts of each other’s reports. 2 Due to the presence of a UN political mission, it is still in the FCS list. The CPIA scores were 3.1 (2008), 3.2 (2009) and 3.3 (2010). 3 Regional Economic Outlook, Sub-Saharan Africa, IMF, April 2012 1 II. COUNTRY CONTEXT AND RECENT DEVELOPMENTS 5. At the start of the CAS period, Sierra Leone was recovering from the impact of the global financial crisis, and has since had mixed macroeconomic performance. Real GDP expanded by 5 percent in 2010 and 6 percent in 2011. The rebound in growth since 2010 has been broad-based, and was led by the manufacturing, mining, construction and agriculture sectors. The increase in global fuel prices in 2011 led to an increase in gas prices at the pump, which along with heavy government borrowing from the Central Bank resulted in inflation, which peaked at 20 percent in early-2011 and then, declined slightly to 17 percent in late 2011. Fiscal performance has been uneven in 2010 and 2011, and both years ended with higher than anticipated deficits, borrowing and arrears. The first quarter of 2012 has seen a clearance of 2011 arrears. While revenue performance has been better than projected, expenditures mainly driven by capital spending on infrastructure have outstripped revenue collections. Fiscal consolidation is likely to remain a challenge, not least with looming national elections. The Government continues to maintain a flexible exchange rate policy to facilitate the adjustment of the economy to external shocks. Despite the widening trade deficit in 2011, the Leone remained relatively stable, depreciating by 4.8 percent against the US dollar. The reason was that the higher imports were largely financed by capital inflows from mining and construction companies. The spurt in imports of machinery and equipment by the mining companies resulted in a spike in the overall level of imports and an increase in the current account deficit to 48 percent of GDP in 2011, as compared to 19 percent in 2010. 6. Mineral exports and prospective discovery of oil and gas are likely to transform the economic landscape in the short to medium-term although they carry significant downside risks. Sierra Leone signed two significant mining concession agreements during the CAS period – with London Mining Plc and African Minerals Limited, and both have started iron-ore exports. The production and export plans under these concessions show rapid growth between now and 2015-16. Some estimates indicate that Sierra Leone‘s iron-ore reserves measured at current prices are likely to be worth 40 times its GDP in 2011. Based on available production plans of mining projects, the acceleration in mineral depletion is likely to be quite pronounced, rising from 0.6 percent of GDP in 2011 to 14 percent in 2012 and possibly 21 percent in 2015. The uncertainty surrounding these prospective numbers is undoubtedly high, as it depends on the highly volatile global commodity prices, which impact rents and the volume of operations. In the oil and gas sector, recent public announcements of discoveries at the Mercury and Jupiter off-shore wells continue to raise expectations, although the extent of commercial viability still needs to be confirmed by further testing. The government is also currently evaluating bids received on the nine new exploration blocks offered in a recent round of bids. These developments in the extractives sector are very significant, and potentially transformative, and it is important to note that at the time of preparation of the PRS2 and CAS, the full extent and potential of the extractive reserves were neither fully realized, nor understood (as a result the CAS has little mention of the extractives sector) and the sheer rapidity of these developments is noteworthy. These developments also come with significant downside risks, which are examined later on in the report. Sierra Leone‘s candidacy under the Extractive Industry Transparency Initiative (EITI) has been extended until December 2012. Toward achieving this goal, the government has completed the staffing and housing of the EITI Secretariat, drafted an EITI Bill, begun the reconciliation process to produce the Second Report that will cover 2008, 2009, and 2010, and is in the process of recruiting a validator. A new online Mining Cadastre is expected to improve transparency regarding mining licences. 7. Economic diversification takes on added significance in light of the likely extractives boom. The agriculture sector has shown potential for being the driver of an ‗inclusive growth‘ strategy, with the government‘s Smallholder Commercialization Program now being implemented across the country. The prospects of increasing agriculture productivity starting from the current low base e.g. rice average yields are low at 1 ton/ha, are enormous. Studies show that post-harvest losses in the sector amount to about 40 percent, due to lack of value addition and transportation. The ongoing risks associated with uncertain 2 land tenure systems, always a source of potential conflict, have been recently highlighted in connection with recent large-scale private investments. This needs to be addressed in order to ensure that the agriculture sector grows and benefits a large number of the population. The fisheries sector could be another driver of growth, and the government has started to address the huge challenges of governance and illegal fishing. During the CAS period, work on the policy, regulatory and institutional environment in the fisheries sector has been taken forward. With strong government facilitation, other drivers of growth may emerge, which could also benefit as a result of the extractives boom, if funds are not spent on the recurrent side. The diversification of economic activities will be key in creating jobs and improving livelihoods, as mining is unlikely to generate sustainable large-scale employment. 8. Progress is being made on most Millenium Development Goals (MDGs), but Sierra Leone is unlikely to meet most of the MDGs by the target date of 2015. The ongoing analysis of the 2011 Integrated Household Survey data will provide the latest poverty data. While it is expected to show a decline in poverty levels, it is unlikely that the country will meet the MDG target of 40 percent of the population living below the poverty line by 2015. The latest comparable data is for 2003, i.e. soon after the conflict, which showed poverty rates of 67 percent. Likewise, as per the latest available data, the education and health MDGs are unlikely to be achieved. The country appears to be on-track for meeting the gender equality MDG for primary education and the HIV prevalence rate. Considerable progress is being made with other MDGs, but as noted earlier, the civil conflict through the 1990s has had a significant impact on Sierra Leone. Making faster progress towards the MDGs takes on added importance in order for the extractives boom to result in broad-based growth. 9. Nonetheless, Sierra Leone has made concerted efforts to address off-track MDGs, especially on mortality. Further strengthening of delivery systems and citizen accountability will be crucial in making rapid progress. Strikingly, the country‘s mortality numbers have only recently declined to the levels, which existed before the onset of the civil war. The maternal mortality rates in 2010 are about the same as in 1990, as they had spiked by 2000 due to the civil war. Sierra Leone has in fact lost two decades in making improvements in maternal mortality, as a result of the conflict. Since the start of the CAS, the country introduced the Free Health Care Initiative (FHCI) for pregnant and lactating mothers and children under five. While the initial period of FHCI proved to be a ‗shock‘ to the health system, its implementation seems to have stabilized but is facing capacity and implementation challenges. The financial sustainability of FHCI, beyond the current support by development partners, needs to be urgently examined. More recent efforts by GoSL to engage citizens and give them greater authority to hold health service providers accountable is promising, and could well be critical in achieving significant progress towards reducing maternal and infant mortality rates in the country. Existing partnerships are underway on assisting governments to better harness the private sector in order to improve the quality of health care for the poor. 10. Decentralized service delivery continues to be a key element in improving basic services in education, health and water and sanitation, and the time may be ripe for further deepening of the decentralization process. In many ways, Sierra Leone‘s progress on decentralization could hold useful lessons for other post-conflict countries, especially in terms of deconcentrating powers by devolving responsibilities to local authorities, improving service delivery, and strengthening accountability. A majority of the functions envisaged for devolution under the 2004 Local Government Act (LGA) have been devolved to Local Councils. The third round of elections of Local Councils, since the LGA are planned for late-2012, as part of the national elections. Satisfaction levels with quality services provided by elected councilors are likely to be a key determinant in voter preferences. Recent discussions amongst stakeholders have highlighted that the aftermath of elections could be a good time to revisit the LGA and reflect upon lessons from experience, in order to deepen the devolution process. Such a review should look at devolving authority over line agency staff to Local Councils, and further refine the inter- governmental fiscal transfer arrangements on the basis of a full understanding of local revenue collection 3 and management. The opportunities provided through the decentralization process to actively engage with citizens and promote social accountability are being taken forward and are expected to continue. 11. There is a strong recognition in the country of the need to address the challenges of jobs, especially for youth. According to demographic data, about one-third of Sierra Leone‘s population is in the 15-35 year age group, of which an estimated 40 to 50 percent are considered unemployed and underemployed. With prospects of rising national wealth from the extractives sector, youth expectations are only going to rise, with a risk of social and political alienation if such expectations are not met. However, the extractives sector is likely to employ only a few thousand people, as the iron-ore projects currently employ only about 5,000 workers. This generation suffered from the civil war and did not have education opportunities, so they may not possess the necessary skills needed for the job market. During the CAS period, the government has prepared a new Employment Policy, set up a dedicated Youth Ministry and a National Youth Commission, and taken forward targeted youth employment programs. Nonetheless, the challenge of youth unemployment remains enormous. 12. Gender equality continues to be a challenge, as well as reducing the unacceptably high rates of maternal mortality in the country. The FHCI is targeting the latter challenge, although there is a continuing need for citizen engagement in order to increase accountability and service delivery around the FHCI. During the CAS period, the government has prepared a National Gender Strategic Plan, but implementing it requires resources and capacity. The Sexual Offenses Bill has been submitted to Parliament to address the issue of gender-based violence. In the political sphere, an active lobby is urging a 30 percent representation of women4 in the upcoming national elections – whether Parliament will enact the necessary legislation in time for the elections remains uncertain. A recent assessment on the barriers to economic inclusion of women shows that Sierra Leone compares favorably with many African countries in ensuring that the laws do not differentiate between men and women in terms of their ability to work and run a business5. However, customs and traditional practices do not always allow equal opportunities for women. Further, studies to date on decentralization have found that citizens, and women in particular, lack the confidence in engaging authorities and demanding better governance. Yet, gender equity has progressed well with 49 percent of pupils in primary education being girls and 45 percent in secondary education, but this ratio drops at the tertiary level. There remains a critical need to ensure that Sierra Leone‘s development progress accrues to women as well as men. 13. Private sector activity has increased significantly with continuing improvements in the investment climate. The country‘s Doing Business scores have improved significantly during the CAS period, and in the 2012 Doing Business report, Sierra Leone was ranked among the top ten global reformers. These improvements would need to be sustained for at least the next five years in order for the country to become one of the investment destinations in Africa. In recent years, besides the extractives sector, there have been large private investments in the agriculture and hospitality sectors. Feasibility studies are also currently underway for private investments in energy, including hydropower, infrastructure, including a new airport for Freetown, and manufacturing projects, including a possible steel plant. At this stage, an important priority for the country is to increase its ability to attract quality investors, and ensure sufficient transparency and competitiveness in selecting them, as well as actively manage and enforce contractual obligations. If regulatory reforms and infrastructure deficits are addressed, then the private sector could be a big driver of growth, diversification and job creation. 14. The infrastructure destroyed during the civil war is currently being rebuilt, while at the same time infrastructure needs for the likely economic transformation require urgent attention. Infrastructure remains a binding constraint for growth and transformation – simulation studies indicate that if the country‘s infrastructure could be improved to the level of the African leader – Mauritius – 4 About 19 percent of elected local councilors are currently women (AfDB: Country Gender Profile, 2011) 5 http://wbl.worldbank.org/data/exploreeconomies/sierra-leone/ 4 annual per capita growth rates could be 3.3 percentage points higher than those recorded in recent years. The total installed energy generation capacity in the country has increased to 90MW since the commissioning of the Bumbuna dam in late-2009. At the same time, the national distribution network suffers from high technical and non-technical losses caused by lack of maintenance, overloading and inadequate metering, billing and revenue collection. Access to electricity is extremely low, at an estimated 6 percent of the population, while tariffs remains high even by regional standards. The National Power Agency (NPA) faces endemic structural and operational issues. Improving its technical and operational performance is a critical step to raising fiscal viability and overall performance of Sierra Leone‘s power sector. The transport infrastructure has been upgraded during the CAS period, with most of the district headquarters being connected, and a number of urban roads being constructed and upgraded. The network of feeder roads has expanded and is starting to show a positive impact on agricultural production and marketing. 15. The recent track record on structural reforms has been mixed, and requires renewed government commitment in implementing the reforms. Strengthening sector-level policy, regulatory and institutional structures in agriculture, fisheries, energy and water utilities, will be key to improving the efficiency and performance of different sectors, and thus further improving the prospects of economic diversification. Such reforms can help deliver improvements in efficiency in order to maintain high growth rates. Sierra Leone rightly aspires to become a Middle Income Country (MIC), but structural and regulatory reforms would need to be undertaken for the country to become a MIC. During the CAS period there have been some important developments in this regard, like the implementation of the concession agreement for the container terminal at the port which is now being run by a private company. There has also been progress in the liberalization of the telecommunications gateway, which could unlock the full potential of this key growth sector. The Parliament has also passed new legislation to unbundle the electricity sector. The law setting up an independent National Minerals Agency (NMA) has also been passed, which would now act as a regulator in the mineral sector. Seeing through these and other reforms should put the economy in a better position to deliver on the ambitious vision of the government. Independent regulatory oversight is being strengthened in some sectors, which is key in ensuring that costs and inefficiencies are not passed on to consumers. 16. Sierra Leone needs significant financial resources for meeting its development needs, and must look for innovative ways for raising such resources, even before the mining revenues start materializing. Over the next three to four years, the country would need significant resources for rehabilitating and upgrading the infrastructure in the country, e.g. upgrading electricity distribution in the capital of Freetown would require slightly less than $170m. Electricity generation for meeting the needs of the urban population alone would require another $300m. Additionally, the energy and transportation needs of the mining sector are substantial, requiring billions of dollars in investment. One way to respond to this challenge would be to develop infrastructure for multiple users, e.g. shared transportation arrangement for mineral resources and possibly for multiple uses e.g. ports, which can be used for mineral exports and other potential economic activities. The government recognizes these challenges, and has recently embarked on a process of holding a series of ‗Public – Private Sector Roundtables‘ for finding solutions to some of the binding constraints in achieving the economic transformation. 17. The end-2012 national elections are critical in ensuring that the country continues on the path to development and economic transformation. For the first time, Sierra Leone will be holding four elections, simultaneously at the end of 2012 – Presidential, Parliamentary, Local Council Chairpersons and Council representatives. The first-ever biometric voter registration process has been completed and around 2.7 million registered voters are expected to be issued voter registration cards. These cards should enhance the likelihood of fair and smooth elections. However, sporadic political violence among supporters of the political parties in recent months has underscored the risks of possible violence and voter intimidation during the elections, and all stakeholders have a responsibility in ensuring 5 violence-free elections. The political landscape is dominated by two political parties largely drawing support along regional and ethnic lines. In recent months new legislation has confirmed the exact role of the National Election Commission. An election basket fund of around $38m with contributions from the government and development partners is being used to finance the elections. 18. The governance and anti-corruption agenda continues to experience serious challenges. On the positive side, according to some of the international benchmarks, there have been some improvements in the fight against corruption and the overall governance trajectory. In the Transparency International‘s Corruption Perception Index (CPI), Sierra Leone has moved from a score of 2.2 in 2009 (global rank of 146) to 2.5 in 2011 (global rank of 134). In the latest CPI assessment, it ranks 26 th among 48 African countries. The 2011 Mo Ibrahim Index ranks Sierra Leone 30th out of 53 countries with a score of 48.2/100. Yet, there remains significant frustration within the population at the slow pace of institutional, legislative and systemic improvements to tackle corruption. Recent setbacks with some high profile prosecution cases reinforce the perceptions that some of the elite are not impacted. Although the asset and income declaration system has undergone some improvements, a comprehensive Politically Exposed Persons (PEP‘s) list still does not exist, as required by international law. The passage of the Anti Money Laundering/Combatting the Financing of Terrorism Act was delayed and was only enacted in early 2012. The need for transparency and accountability, as well as more effective tools and safeguards to fight corruption is only likely to increase exponentially with the extractives boom, and improvements in systems and enforcement capacity needs sustained action. The Government will need to put in place a strong framework for public procurement to ensure value for money and give confidence to investors and citizens alike. On the positive side, space continues to exist for civil society and non state actors to openly engage on issues that are of public concern - the World Governance Indicators 2010 (Figure 1) give Sierra Leone a percentile ranking of 41.7 for Voice and Accountability, which is better than the average of 33 percentile ranking for SSA – this should be an important element in strengthening the accountability agenda going forward. Figure 1: Benchmarking Sierra Leone on Governance Indicators 19. The CAS period has seen renewed momentum in addressing public sector capacity and performance challenges. Prior to the conflict, technical and administrative capacity was severely depleted within government and outside, and the war further exacerbated this situation. Subsequent government and development partner efforts have not systematically addressed the need for building a public sector that is meeting present day needs of the country. During the CAS period, there has been a renewed emphasis and a more coherent approach between key stakeholders to start addressing systematically the issue of efficiency, capacity, and effectiveness of the public sector, and its ability to 6 attract and retain quality professionals. The Cabinet approved a ‗Multi-Year Pay Reform Strategy‘ in 2011, and a ‗Program for Improving Public Sector Productivity through Management and Pay Reforms‘ in 2012. These are important developments in taking forward the public sector reform agenda, but implementation will be crucial and will require continued commitment at all levels of government and the ability to address some difficult reforms. 20. The sub-region has enjoyed relative peace and stability during the CAS period, raising hopes of enhanced regional cooperation6. Neighboring Guinea and Liberia have had recent elections, and are also experiencing varying degrees of extractive sector booms. Sierra Leone enjoys peaceful relations with its neighbors, and has been an active member of sub-regional groups such as the Economic Community of West African States (ECOWAS) and the Mano River Union. Opportunities for regional cooperation are enormous, and are only starting to be realized, for example through new power pool agreements. Road connectivity with neighboring countries has also been upgraded. There is unexploited potential for economic diversification and developing regional transportation infrastructure, i.e. railways and ports, around the mining growth corridors among these neighboring countries. III. PROGRESS TOWARDS CAS OUTCOMES AND PORTFOLIO PERFORMANCE A. Progress against CAS Pillars: Human Development and Inclusive Growth 21. Progress against CAS objectives is satisfactory at this stage, with approximately 85 percent of indicators achieved or on track to be achieved, and only 5 percent of indicators unlikely to be achieved until the end of June 2013. Progress is equally promising for the two pillars of human development and inclusive growth. Lack of data is an issue as 10 percent of the indicators do not have updated progress values, especially for Pillar 2. This is due to weak sectoral monitoring and evaluation (M&E) systems as identified by the « Managing for Development Results Cpacity Scan » (CAP Scan) fielded in Oct 2010 and facilitated by the Bank. Constraints persist in project-related monitoring arrangements and implementation. The achievement of CAS milestones lags behind, as slightly over 50 percent have been achieved, which could be attributed to a lack of alignment between indicators and milestones7 during the design of the CAS. Of the cross-cutting indicators on gender and governance, which are a sub-set of the overall set of indicators, more than 80 percent have been achieved or are on track to be achieved, which is noteworthy. World Bank TA support to Statistics Sierra Leone (SSL) has been targeted at specific areas, including in the analysis of the Integrated Household Living Conditions Survey. Going forward, discussions would be carried out on providing more coordinated support for SSL. 6 During the CAS period, Cote d’Ivoire and Mali have witnessed conflict, but the impact on Sierra Leone seems to have been limited so far. 7 The milestones are to be reviewed at CAS mid-point, and are not included in the forward-looking Results Matrix (Annex 1b). 7 Table1: Summary of achievements on CAS indicators and milestones (excluding AfDB) INDICATORS – TOTAL 39 MILESTONES – TOTAL 38 PILLAR 1 Achieved On track Not on track No data Achieved Not achieved No data Education 2 2 4 Health 4 2 1 Water 2 1 2 1 Social risk 2 2 Decentralization 2 3 1 5 2 PILLAR 2 Agriculture 1 4 1 3 1 Private sector 3 3 6 Energy 2 1 1 2 1 Transport 2 2 1 2 3 16 (41%) 17 (44%) 2 (5%) 4 (10%) 20 (53%) 16 (41%) 2(5%) 22. The WBG country program has strengthened the focus on the delivery of results. The introduction of Performance Based Financing in the health sector has enhanced incentives for service providers, and has started showing improvements in the level and quality of services provided by clinics (Reproductive and Child Health Project Phase 2). Addressing the value chain in the agriculture sector is demonstrating a positive impact on the livelihoods of farmers being supported all along the value chain (Rural & Private Sector Development Project). There is also greater attention to selectivity in the Bank‘s program with recent exits from urban and water sectors. There has also been a strategic use of Technical Assistance (TA) in helping with the production of vital statistical data from the household living conditions survey, and for it to inform the preparation of the PRS3. The Bank will also help strengthen the results focus in the PRS3, specifically through the preparation of the Results Framework for PRS3. 23. IFC, together with the Department for International Development (DfID) completed the implementation of the “Removing Administrative Barriers to Investment� (RABI) program during the CAS period. The three year investment climate program focused on improving the business climate as measured by ―Doing Business‖, enhancing the image of Sierra Leone as a destination for productive investment and developing institutions that support private sector development. Furthermore, building on its partnership with other partners, IFC, DfID, the Soros Economic Development Fund and Germany‘s Gesellshaft für Internationale Zusammenheit have supported the annual Business Plan Competition (Business Bomba). In addition IFC continues to coordinate the PSD Donor Coordination Group. The group meets regularly to ensure alignment among partners, as well as with GoSL priorities. The funding for most of IFC‘s advisory activities in Sierra Leone is from the Conflict Affected States Initiative (CASA) which is a multi-donor facility with funding from The Netherlands, Norway, Sweden, Ireland and the United Kingdom. IFC and the Bank are currently coordinating efforts to address the needs of the energy sector. 24. During the first two years of the CAS period, other parts of the World Bank Group have contributed significantly to the CAS outcomes. MIGA issued guarantees to four projects with a total investment volume of US$7.8 million. MIGA covered investors from Switzerland, Denmark and Mauritius and investments were made to a mobile payment and banking services provider, a transport and logistics firm, a vehicle importer, and a liquefied petroleum gas distributor. All guarantees were underwritten under MIGA‘s Small Investment Program. Going forward, MIGA will continue to maintain an active pipeline and will seek to support further and catalyze foreign investment that promotes 8 employment and growth. The World Bank Institute (WBI) has undertaken innovative work in the areas of access to information by supporting the Access to Information Bill, which has just been resubmitted to Parliament after it had lapsed, strengthening Parliamentary engagement, especially capacity of the Public Accounts Committee, and supporting reforms in procurement and contract monitoring by CSOs, especially in the roads sector. WBI will launch a Leadership for Results Program in support of the new Pay and Performance Project. 25. The World Bank Group has deepened its partnership with other development partners, and has become the largest donor in Sierra Leone. As per MoFED figures, during the CAS period the World Bank has been the single largest development partner in Sierra Leone, with a share of 22 percent of total aid disbursements (see Annex 14). The World Bank, AfDB, DFID and the European Union carry out joint assessments for budget support and coordinate the dialogue with GoSL under the Multi-Donor Budget Support (MDBS) framework. The Bank, as the lead partner in the energy sector, has initiated a sector coordination group with the Ministry of Energy and Water Resources. The Bank actively facilitated the formation of a Development Partner Governance and Accountability Working Group to discuss strategic and technical issues in governance among partners and then, directly with GoSL counterpart institutions. The Bank manages co-financed activities in the areas of PFM, decentralization and extractive industries. Partnership with the UN has deepened and joint analytical work is being considered, as well as using UN systems for implementing some elements of Bank-supported programs. The Bank and the UN also co-chair the Development Partners Coordination Committee and quarterly meetings are chaired by the Minister of Finance and Economic Development. The dialogue with non state actors has been enhanced through a specific focus on the extractives sector, governance and transparency. B. Portfolio Performance 26. The Sierra Leone portfolio is performing well and has achieved consistently above-average disbursement rates. During the CAS period, it has made striking progress in addressing „problem projects‟. The Sierra Leone Portfolio is currently comprised of 17 large active investment operations with net commitments reaching US$350 million. In addition, IDA has provided US$51 million as budget support during FY10-12. The World Bank extends its support through various instruments ranging from budget support, investment lending, technical assistance and knowledge products. As of the end of March 2012, the undisbursed balance under the portfolio was US$99.4 million. The portfolio is currently sound with no overage project and low commitments at risk. Four projects including the Bumbuna Environment and Social Sector Investment Loan, GEF Biodiversity, Wetlands Conservation and the Education Fast Track Initiative (EFA/FTI) Projects show marginally satisfactory ratings. In terms of Development Objectives (DO) and Implementation Performance (IP), about 76 percent of the projects are rated satisfactory including one operation being highly satisfactory and 24 percent of the projects are currently rated as marginally satisfactory, with only one operation rated unsatisfactory. Going into the CAS, about 50 percent of the projects in the country portfolio were ‗problem projects‘ (60 percent of the amount was under ‗problem project‘ category), and this figure has been sharply reduced to 0 percent in FY12 (Annex 8). Sierra Leone‘s better than average performance in the Africa Region can be attributed to several factors including sound project design and Monitoring and Evaluation /Results Frameworks, satisfactory PMU performance, effective and efficient supervision and implementation support by task teams, and effective working relationships with Government counterparts. The Bank‘s Country Office now includes a team of staff covering most sectors, who can help the country program move to true ‗implementation support‘. 27. Most of the projects in the portfolio face risks related to the Country Environment. Long term risks have been identified under the Rural and Private Sector Development Project due to outstanding issues in clarifying implementation arrangements. These are expected nonetheless to be 9 resolved soon. Other risks under the portfolio include effectiveness delays, as under the Extractive Industries Technical Assistance Project and the Youth Employment Support Project. Issues related to legal covenants are being addressed under the Bumbuna Environment and Social Sector Project, as well as under the Financial Sector Support Technical Assistance Operation. Project management and fiduciary issues are currently being tackled under the EFA/FTI Education Program. Finally, the Financial Sector Support Project was declared effective on July 20, 2011 and disbursements are expected to start, soon. A recent review of financial management arrangements under Community Driven Development type projects did not raise any significant fiduciary concerns. 28. The Trust Fund Portfolio in Sierra Leone is relatively large with 36 active Recipient Executed Trust Funds (TFs), 27 of which are Multi-Donor Trust Funds (TfS). Several recent TFs have helped leverage the small IDA national allocation and promote CAS objectives. In FY11, the Bank was able to leverage the national IDA allocation by three times through Regional IDA allocations and Trust Funds. More recent TFs have been selected strategically to fit into country program priorities, and a continued close scrutiny of new TFs has helped limit supply-driven initiatives. Total commitments under the Trust Fund Portfolio currently stand at approximately US$96 million with about US$37million disbursed to date. While a number of these Trust Funds are associated with an active IDA operation, others have been approved as stand-alone Trust Funds in support of Technical Assistance and Institutional Reforms, Governance, as well as development activities in the Social Sectors, including provision of Safety Nets and Reproductive Health, the Extractive Industries, Education, Energy and Infrastructure. 29. During the CAS period major adjustments have been made to implementation arrangements following a Country Portfolio Performance Review (CPPR) in 2011 and a mini- CPPR in early 2012. Significant actions have been taken following the CPPR to strengthen the effectiveness and impact of the Bank‘s program. Among the noteworthy actions already taken: (i) Bank budget support was moved as of 2012 to the first quarter of the GoSL financial year to enhance predictability (budget support during the past five years had been disbursed at the end of GoSL fiscal year); (ii) the IPFMRP project implementation was mainstreamed at the Ministry of Finance and Economic Development to limit stand alone Project Implementation Units; (iii) a sharper focus was placed on results and accountability through initiatives such as Result-Based Financing in health and review of social accountability in the country program; (iv) the focus on innovation was strengthened such as through the ongoing mapping of facilities providing basic services to strengthen planning and accountability; and (v) regular training sessions by Bank staff of procurement staff in project implementation agencies. These actions have substantially enhanced the results-focus of the Bank‘s work in Sierra Leone. The next CPPR is planned for early 2013, and it is expected to inform the preparation of the next CAS. 30. IFC continues to support Sierra Leone‟s efforts to improve the business environment and the country was named as one of the global top reformers in Doing Business 2012. IFC supported the Credit Reference Act and the development of a private credit bureau in Sierra Leone. During the CAS period, IFC in collaboration with the Bank of Sierra Leone (BSL) developed the leasing framework, which enables BSL to supervise leasing companies. Business Edge (―BE‖) and the SME Toolkit were launched on March 03, 2010 and implementation of Business Edge is in full gear. Four consulting firms have been chosen as Business Edge franchisees and IFC supported ―Business Bomba‖, a countrywide Business Plan Competition. In addition, IFC has provided lines of up to US$1 million each to the Sierra Leone Commercial Bank and Rokel Commercial Bank under the Global Trade Finance Program (GTFP), both of which are state-owned banks. Nonetheless, both banks have been repeatedly noncompliant with IFC‘s financial covenants and the trade lines to both SLCB and RCB were frozen in November 2009. EcoBank SL also received approval for an IFC GTFP trade line of up to US$2 million in available trade support, which will help foster external trade. IFC is also considering a US$5 million line of credit to Union Trust Bank to enhance support to Small and Medium Enterprises (SMEs) in Sierra Leone. 10 31. In recognition of the capital constraints of SMEs, IFC developed an initiative (IFC Ventures) to provide risk capital and advisory services to small businesses in challenging countries. Sierra Leone is one of the four beneficiaries of IFC ventures with an initial investment of US$13.5 million. The long-term goal of the SME Ventures Program is to help revive the private sector, which was seriously destroyed by more than 10 years of civil war. In the manufacturing sector, IFC committed a US$110 million equity investment in Heidelberg Cement to modernize and increase the capacity of the company's operations in 7 countries in Sub-Saharan Africa, including Sierra Leone. IFC‘s Asset Management Company (AMC) also supported this transaction with a US$35 million equity investment. In 2011, IFC concluded a $2.8 million loan to Vitafoam Nigeria to expand its operations to Sierra Leone. The Vitafoam Sierra Leone Limited project involves US$6.3 million new foam production and a related products plant in Freetown for local sales in Sierra Leone and for exports to Liberia and Guinea. C. Lessons Learned 32. A number of lessons have emerged from the CAS implementation, some of which may have wider resonance for other post-conflict countries. First, during the CAS period, Sierra Leone would be making a transition out of the FCS category – it has moved out of the category of countries receiving exceptional allocations but still has low CPIA score. Experiences in successfully moving countries out of the FCS group are still limited, so for the international community Sierra Leone could be an interesting case study to focus attention and learn lessons. Second, this is the first Joint Country Assistance Strategy for the WBG and AfDB in Sierra Leone. It has provided opportunities for the two institutions to work together and develop synergies – but deriving optimal benefits of such joint strategies requires governments to effectively lead donor coordination processes at the sector level, and also requires sufficient forward planning in order to allow joint missions (the MDBS and education sectors are undertaking joint assessments). Third, Sierra Leone will continue to require the full menu of support instruments available to the Bank – financing quality knowledge products and convening power. In sectors, like health, where the Bank is increasingly combining them, the nature of the dialogue with the government has changed qualitatively. Fourth, low institutional capacity in government and fiduciary risks are continuing concerns with portfolio management. This can often shape the full nature of our dialogue, unless efforts are made at several ends to move the agenda forward e.g. ongoing work with the Auditor General‘s Office and with the National Public Procurement Agency (NPPA) to address some of the underlying systemic issues is now a key area of Bank attention, and the ACC is supported through an IDF Capacity Building Grant to improve the quality of system and process reviews and the monitoring and compliance responsibilities of both the ACC and the respective MDAs. Finally, the challenge of collective action (i.e. different agencies pulling together in delivering on an agenda) both within government and within sector teams in donor institutions does require continuing facilitation and use of ‗soft skills‘ – e.g. as WBI‘s Leadership for Results‘ efforts in order to facilitate collective action in the area of public sector reforms could hold useful lessons. Sierra Leone will require such ‗soft‘ initiatives in order for a smooth economic transformation. IV. ADJUSTMENTS TO THE CAS MOVING FORWARD 33. The CAS objectives and priorities remain fully relevant, but two important adjustments are being proposed in light of the significant changes in the country context and key lessons learned, so far. The CAS priorities were fully aligned to the Agenda for Change (PRS2) priorities, and both pillars – human development and promoting inclusive growth remain priority development challenges for the country. So the Bank would continue to support these pillars during the remaining CAS period. The Agenda for Change is for the period 2007–2012, and the government has currently initiated work on the successor PRS3, which is expected to be finalized in early 2013. An initial concept note for PRS3 recognizes that PRS3 does not just represent an incremental change in light of the changes in the country context, principally the new developments in the extractives sector. The outline of PRS3 places emphasis on: managing the resource boom; economic diversification and jobs; improving competitiveness; human 11 development; social protection; and governance and transparency. In light of the changes in the country context and as a segway into the next CAS, the Progress Report proposes to make some important adjustments for the remainder of the CAS period. 34. The first adjustment is about adding a third pillar to the CAS on “Managing the extractives boom�. This would align the CAS more fundamentally to the opportunities and risks of the extractives boom and also to the early vision set out in the draft PRS3 – the Bank would thus be ‗ahead of the curve‘ in making an important contribution towards smooth transformation, and this would enhance the overall Bank impact in Sierra Leone. Some of these changes have already started happening in the Bank program. The growth in the extractives sector described more fully in Annex 2 provides a once-in-a- generation opportunity for Sierra Leone to aspire to Middle Income Country status, but at the same time it comes with significant downside risks relating to the ‗resource curse‘ given that the country‘s recent tragic history of conflict has had some links with the minerals sector. The Progress Report proposes that smooth economic transformation and managing the risks will require addressing five priority areas. Figure 2 provides a framework for looking at the economic transformation. The specific activities being supported by the Bank during the remainder of the CAS period are described below. This support would be provided through targeted instruments: IDA and Trust Fund resources, restructuring of ongoing projects to address emerging challenges, provision of high-impact knowledge products, and enhanced policy engagement between stakeholders. Selectivity in the program is being strengthened by using this framework to understand the relevance and strategic importance of existing and new Bank operations. i. Strengthening the regulatory and institutional capacity in the extractives sector: in recognition of changes taking place in the extractives sector, the Bank program has scaled-up its engagement with the extractives sector. An IDA Additional Financing and a co-financing with DFID were undertaken in FY12 which are now helping GoSL to strengthen the regulatory and institutional capacity within government to manage the sector effectively. In addition, the Bank is providing experts to strengthen the capacity in government to negotiate mining licenses. The budget support program is also starting to focus on the policy areas in the extractives sector. Together, these constitute important elements of the Bank support during the remainder of the CAS period. ii. Economic diversification through private sector development and establishment of ‗growth poles‘: The appreciation of the real exchange rate which could result from the impending extractives sector boom would render many tradeable sectors uncompetitive unless special efforts are made to strengthen productivity, promote economic diversification especially in sectors less vulnerable to trade competition and to strengthen significantly and expand the pool of skilled labor. The significant resources which this will require could well be sourced from the windfall revenues associated with the extractives boom. Sectors like agriculture, tourism and fisheries may offer some possibilities for economic diversification and therefore broader based growth, but this will be critically dependent on maintaining and deepening competitiveness and increasing productivity. During the remainder of the CAS period, the Bank will support the government with knowledge products which could help identify opportunities for economic diversification and making full use of ‗corridor development‘ and ‗growth poles‘ (see Figure 3). Through updating the Diagnostic Trade Integration Study (DTIS), another analytical product will be to look at specific issues of competitiveness in some of the potential growth sectors. This could inform future government plans and also identify private sector opportunities. iii. Infrastructure for the extractives sector: The growth and expansion plans of the iron-ore companies require timely provision of reliable energy and transportation infrastructure (to get the ore to the port and adequate port facilities to export). The practice of balkanizing infrastructure planning and provisions may not be in the best long-term interest of the country, particularly given the potentially large number of mining licenses and operators. Through Bank support the government has started a process of ‗Public-Private Sector Roundtables‘ to address some binding constraints for private sector development with the first focusing on infrastructure. There would also be an opportunity to strengthen regional 12 infrastructure linkages with Guinea and Liberia for iron-ore production. The Bank will also be providing ‗just in time‘ advice to the government to look at options for having multiple-use and multiple-user infrastructure and innovative options for financing such infrastructure. The government would need to continue to lead the process of infrastructure development from the perspective of the broader needs of the country. Figure 2: What is involved in successful economic transformation iv. Revenue management and governance: Transparency will be key for Sierra Leone to avoid the risks of the ‗resource curse‘. The Bank will continue to support the EITI process with enhanced provision for CSO engagement, and support through measures like disseminating the Citizens Budget, and contract monitoring initiatives. The Bank will be providing TA on strengthening the Public Investment Management capacity, and to help the government generate options for managing the fiscal space. v. Effective use of revenues to deliver results: Especially in the human development sector, 13 the Bank will be providing TA and undertaking knowledge work to help the government prepare strong credible sector plans and expenditure frameworks in anticipation of rising domestic revenues. Specifically, this would be focused on health financing issues and opportunities for scaling-up safety nets, including addressing youth employment from prospective revenues. In addition, knowledge work in the education sector would help the government prepare skilled workers for the emerging job market. . Figure 3: A „Growth Pole‟ Development Strategy for Sierra Leone New iron ore & bauxite projects Oil Exploration Diamond Mining (mostly artisanal) Gold Mining (mostly artisanal) New agribusiness projects NOTES:  A ‘growth pole’ is a geographic location where productive economic activities are rapidly expanding fueled by a combination of economies of scale, economies of agglomeration, and backward/forward linkages.  Potential ‘growth poles’ could be around the north / west where the iron ore and agricultural projects are located, and in the south around commercial mining, agribusiness and potential hydrocarbon resources. 35. The second adjustment is about putting emphasis on building capacity for improved governance and service delivery within government and within civil society – in other words emphasizing both the „supply‟ and „demand‟ side of good governance. Ten years after the end of conflict, it is important to address the severe deficits in public sector capacity and performance. Rising revenues will further stretch the already limited capacity of the public sector. Following a recent request from GoSL, the Bank has started engaging in the area of public sector reforms – an area not identified as a priority for the Bank under the CAS. But given the pressing needs in this sector, the Bank has prepared an innovative results-based operation, the ―Pay and Performance Project‖ (see text box). This operation is likely to be central in helping the government deliver on its reform agenda. This project would work in close synergy with other sector operations of the Bank so that the reforms being taken forward at the central level start demonstrating impact at the level of individual Ministries and Agencies of the government. At another level, a recent review of social accountability / Demand for Good Governance (DFGG) work in the Bank‘s program in Sierra Leone has identified opportunities for the Bank to support the government‘s growing commitment to engage citizens as partners in monitoring development. Annex 14 3 spells out these opportunities in detail, but Bank support in strengthening social accountability will now focus on promoting accountability in the ‗policy space‘, reinforcing citizens accountability to improve health sector outcomes, and improving coherence and knowledge-sharing on DFGG across Bank operations. For example, in the health sector, Sierra Leone still lags behind in meeting the MDGs, accountability gaps with the FHCI have been documented, and the government has shown a keen interest in engaging citizens to improve service delivery. This sector may present a key opportunity for strengthened DFGG engagement. Box: The Pay and Performance Project: The Bank Responding Strategically and Innovatively IDA has initiated its involvement in public service reform in Sierra Leone with the US$17 million Pay and Performance Project. The Project supports and is fully aligned with the Government‘s flagship program ―Improving Productivity through Management and Pay Reforms‖ and it focuses on the three reform areas in the government‘s program: (i) Pay Reform; (ii) Recruitment and Staffing; and (iii) Performance Management and Accountability. The Project uses a results-based approach that rewards the achievement of an agreed set of key milestones and results through the use of Disbursement Linked Indicators (DLIs). The objective of the pay reform sub-component is to improve external competitiveness and internal equity to enable the public service to attract and retain qualified professionals. The objective of the recruitment and staffing sub-component is to increase the very low numbers in middle and senior level positions. Between 800-1000 critical positions in the ―missing middle‖ will be filled via open, competitive and merit-based procedures. The objective of the performance management and accountability sub-component is to improve government productivity, increase citizens‘ trust in government and institutionalize transparency and accountability. A flexible Technical Assistance component complements the results-based approach by financing selected interventions (strategic communications program and social accountability measures). This operation is an excellent example of how the Bank has strategically and innovatively responded to government request for support. A strong public sector is key to smooth economic transformation, and the Bank has built upon global experiences with public sector operations in preparing this project. 36. These adjustments would bring the CAS in closer alignment with the Bank‟s new Africa Strategy. The proposed adjustments to the CAS lay emphasis on three priorities in the Africa Strategy ‗Africa‘s Future and World Bank‘s Role in It‘ – competitiveness and employment; vulnerability and resilience; and governance and public sector capacity. The forward-looking results matrix in Annex 1A covers FY13 and includes only indicators for the WBG, that is the World Bank and IFC. AfDB is not included. To the results matrix, the following changes have been made: Primary Gross Enrollment Rate (PGER) has been replaced with Primary Completion Rate (PCR) as PGER data are unreliable and with significant overestimation of enrolment numbers. PCR is a better measure of efficiency and quality. Spot checks for teacher attendance twice a term for each school in all districts by 2013 has been dropped as it is not related to the WBG program. Since there is no law in place on the free health care initiative enforcement, the related indicator has been replaced by an indicator on social accountability monitoring. The indicator from the energy sector has been dropped due to unavailability of data and so has the indicator for the transport sector related trunk roads in good and fair condition. In the cash-for-work programs, targets have been increased substantially. The indicator on procurement contracts under decentralization has been dropped given the concerns over reliability of the data and the indicators on Local Councils and service output targets have been slightly reworded. Under decentralization, an indicator on social accountability has been added to strengthen that aspect in the results matrix. An indicator on public disclosure of fishing licenses and revenues has been added to fisheries, and an indicator on collection rates to energy. Further, a third pillar has been added to the forward-looking matrix 15 regarding the new direction of the CAS to align to and support the sustainable management of natural resources, especially in mining. Four indicators have been added in this regard. V. KEY CONSTRAINTS AND RISKS 37. The risks identified in the CAS remain relevant, but there has been some improvement in some of the risks and Bank-supported mitigation measures are being implemented. The six risks included in the CAS were: (i) weak governance and accountability structures; (ii) limited capacity to deliver services and manage public resources; (iii) youth employment and social instability; (iv) economic shocks; (v) regional volatility, including international drug trafficking; and (vi) climate change and disaster risks. As noted earlier, during the CAS period the renewed emphasis on social accountability and promoting transparency would continue to be key in managing the weak governance and accountability structures, enforcement of systems, rules and procedures. The Bank is now helping GoSL address more frontally the capacity and effectiveness of the public sector, through strategic responses under various projects e.g. in fisheries, decentralization, and public sector reforms. The Youth Employment Support Project was prepared and delivered during the CAS period as a response to the challenge of youth unemployment, and the ongoing analytical work on review of safety net systems will be informing the government‘s plans in the PRS3. The Bank increased the size of its budget support in response to the exogenous fuel and food price shock, and mobilized advice for government on short-term coping systems for the country. The sub-region is now more peaceful and scope for cooperation has widened, although recent developments in the Liberia – Cote d‘Ivoire border underscore the fragility of peace in the sub- region. Nonetheless, these risks still remain valid for the remainder of the CAS period, and the Bank along with other partners would be helping the government manage them. 38. An additional risk which is being identified at this stage of CAS implementation is about avoiding the „resource curse‟ as a result of the extractives boom. This is likely to be the most significant development challenge for the country in the foreseeable future. Economic development in Sierra Leone could be affected by the dynamics of mineral sector growth. Political lobbying and rivalries as well as social exclusion around extractives may also increase the risk of conflict. While infrastructure remains a binding constraint for growth, the mineral sector is likely to divert human capital, entrepreneurial and investment resources from other sectors and lead to spatial disparities and regional tensions. Effective collection of all revenues due to the state and allocation and distribution of government spending will need to be optimal across sectors to achieve economic efficiency and inclusive growth. Before the receipt of large windfall revenues, monitoring of licenses and contracts, projects and operations will be necessary elements of a broader governance strategy to deal with the new challenges. The proposed adjustments to the CAS by adding a third pillar on ‗managing the extractives boom‘ should help the country manage this risk, especially anticipatory spending and pressures on the wage bill. The Bank and partners will undertake further ‗fragility risk‘ assessments as a result of the resources boom, and this is expected to inform the preparation of the next CAS. 16 CAS Progress Report - Annexes 17 Annex 1(a) : CAS Progress Report Results Matrix - July, 1 2009 to May 31, 2012 JAS Objective 1: Human Development Selected PRSP II Key Issues from PRSP JAS Outcomes & JAS World Bank objectives & Indicators Milestones Group/AfDB indicators25 Instruments 1. Increased access to Lack of sufficient and 1. Improved capacity to Construction On-going Projects/TFs: and completion of adequate inputs at school effectively and efficiently of 318 primary schooling level; poor internal deliver education classrooms in FY09 EFA-FTI Catalytic especially for girls and efficiency of the system primary and Fund. (TF) (WB) out of school children and weak management of 1.1 Primary gross enrollment secondary information and delivery rate increased from 104 % in schools by FY02 Rehabilitation of basic systems. 2007 to 106 % in 2013. (WB) 2011. (WB) and non-formal education Achieved. 1068 Not achieved. and vocational training Low human resource 285 project (education III) capacity at all levels, Governance/Gender classrooms (AfDB) shortage of teaching and 1.4 Enrollment for girls at JSS under learning material, high increased from 40.9% in 2008 construction. AAA: pupil ratios in schools, to 43.9% in 2013. (WB) Public Expenditure Review poor accountability, low Achieved. 45% 850,000 sets of (WB) primary school learning completion rates and high 1.5 Spot checks for teacher materials Partners: repetition and drop-out attendance twice a term for distributed to AfDB, DfID, EU, UNDP, rates. each school in all districts by primary UNICEF, Irish Aid 2013 (WB) No data9 schools by 2011. (WB) Not achieved. TLM not 100 % distributed. Fee free campaigns conducted by all LCs by 2011. (WB) Not achieved. 14 LCs10 Teacher payroll and salary verification exercise completed and maintained by 2011. (WB) Not achieved. Verification exercise on- going. 8 GER is likely to be overestimated and in the forward-looking matrix replaced by Primary Completion Rate (PCR). 9 Spot checks not part of the WB program and MoE program. 10 Indicator dropped from WB program and now funded by UNICEF. 18 2. Improve the health Limited financial and 2. Improved access to basic Ongoing Projects/TFs: status of population geographical access to health services FY06 Strengthening District and quality of health health facilities. Health Services (AfDB) services Inadequate access to free 2.1 Children receiving Penta-3 Clinics having FY 08 Reproductive and health care for vulnerable vaccination before 12 months all essential Child Health TF (IDA) population, limited of age increased from 54.8 % drugs available availability of high impact in 2008 to 85 % in 2013. (10 drugs) Pipeline Projects: interventions and shortage (WB) On track. 82.9% increase from FY 10 Phase II of of drugs, equipment and 32 % to 90 % Reproductive and Child supplies 2.2 Children under 5 who slept in 2011. (WB) Health TF (WB) Shortage of critical health the previous night under an Achieved. Support to Manu River professionals, inadequate insecticide treated net Restocking in HIV/Aids Project (regional) support/ supervision at all increased from 26% in 2008 to Jan 2012. (AfDB) levels and weak personnel 80% by 2013. (WB) On management track. 73% Number of AAA: Weak coordination among health Health Sector Review, programs and donors Governance/Gender facilities Public Expenditure Review providing (WB) 2.4 Deliveries conducted in basic Partners: health facility increased from emergency 42% in 2008 to 70% in 2013. obstetric care DfID, EU, Irish Aid, (AfDB/WB) On track. 54 % increase from UNFPA, UNICEF, USAID, 0 to 45 in WHO 2.5 Enforcement of law for 2011. (WB) free access to health care for Not achieved. lactating mothers and children 42 PHUs. by 2013. (WB/AfDB) On track. Information campaign on free access to health care by 2011. (WB/AfDB) Achieved. Nationwide campaign conducted in April 2010. 3. Developed Lack of water policy as 3. Increased household Volume of Ongoing Projects/TFs: framework for well as organized legal, access to safe drinking water water supplied FY07 Freetown water management and regulatory & institutional and sanitation to Freetown, supply rehab. (TF) (WB) supply of safe water frameworks increased from FY10 Water Supply and and sanitation Deficiency in both urban 3.1 People with access to 95,340 m3/day Sanitation (AfDB) and rural water supply water increased from 64,000 to 120,000 Limited functional water in 2009 to 115,000 in 2013 in m3/day by Pipeline Projects: supply infrastructure. targeted areas. (AfDB/WB) 2011. (WB) FY11 Rural Water Supply Achieved. 192,000 No data and Sanitation (AfDB) 3.2 People with access to 630 improved AAA: improved sanitation increased community Public Expenditure Review from 25,000 in 2009 to 35,000 water points (WB) by 2013. (AfDB/WB) constructed or Achieved. 110,000 rehabilitated Partners: China, DfID, by 2011. (WB) UNICEF Governance/Gender Not achieved. 400 3.3 Commercial and technical 19 losses reduced from 60% in House 2007 to 38% in 2013 connections (Freetown). (WB) On track. with metering 50 % in Freetown and Guma Valley by increase from 4,800 in 2007 to 11,100 in 2011. (WB) Not achieved. 7,500 4. To reduce the High unemployment and 4. Improved capacity to NaCSA to Ongoing projects/TFs: incidence and underemployment, manage social risks conduct FY03 National Social consequences of particularly among the 4.1 Cash for work programs sensitization Action Project. (WB) extreme poverty young. create 2.5 million person days program in Acute skill deficiency of employment in target areas targeted areas Pipeline: among the ―lost by 2013 with increased to ensure 75 Youth Employment and generation‖ who grew up sustainability (of which 1 percent of Skills (with CRW) without education during million women) from 0 in households are the war. 2008 (AfDB/WB) Achieved. aware of AAA: 2,707,000 person-days program by PER; cash for work 2011. evaluation; gender Governance/Gender (AfDB/WB) assessment (WB) Achieved. 90 4.2 Number of women days % Partners: employment created through UNICEF, WFP cash for work program NaCSA to increased from 0 in 2008 to establish 250,000 in 2013 in target program to areas. (WB) Achieved. monitor 645,000 women-days participation of women in cash for work scheme by 2011. (WB) Achieved. NaCSA has a system for monitoring the participation of women in place. 5. Ensure sustainable Local Councils 5. Improve predictability, Training to all On-going Projects/TFs: human development empowered with expenditure control and LC s and FY03 National Social through the responsibilities, revenue transparency in relevant Action Project Additional decentralized authority and financial decentralization and public MDAs in core Financing (WB) provision of improved support and encouraged to resource management functions by FY04 Social Action Support social services. become transparent, 2011 (WB) Project (AfDB) Improve and expand accountable and capable 5.1 Number of councils with Not achieved. FY09 Integrated Public sound public financial institutions demonstrating integrated development plans Capacity- Financial Management management inclusive leadership at the and budgets increased from 0 development Project. (WB, co-financed local level. in 2009 to 19 by 2013. (WB) fund under- by DfID, EC)) Budget resources are now Achieved. 19 LCs utilized FY11 Economic Governance concentrated in central Reform Program (EGRP I) government agencies and 5.2 Number of councils Domestic (AfDB) allocated to localities on receiving timely transfers from revenues FY07 Institutional Support an ad-hoc basis not crisis response facility transferred to Project (AfDB) reflecting relative service increased from 0 in 2009 to 19 local councils 20 needs with widespread by 2013. Achieved. 19 – annually Pipeline Projects: social exclusion at the from the Consolidated increased from FY10 Decentralized community level. Revenue Fund. 22% in 2008 Services Delivery I and II Resources must be to 25% in (WB) allocated consistent with 6.1 Variance in expenditure 2011.(WB) FY10, FY11 & FY12 PRSP priorities, with for the 20 largest budget heads Achieved. 41 Development policy lending fiscal discipline and declines from 13.5% in 2008 % (WB) probity in the use of to <7% in 2013. (WB) Not on Economic Governance public resources. This track. 29.9 % Percentage of Reform Program (EGRP II) requires: budgeted (AfDB) 6.2 Percentage of procurement expenditures  A robust contract in compliance with executed AAA: MTEF/MEFF and GoSL procurement legislation online through FY10 Public Expenditure better revenue and regulations increased from IFMS rolled Review (WB) forecasting for a 49% in 2008 to 95% in 2013. out ministries FY11 Country Procurement credible budget; (AfDB/WB) On track. 91.3 increased from Assessment Review (WB) % 62% in 2008  Improved and to 80% in Partners: effective expenditure Governance/Gender 2011. (WB) DfID, EU, IMF, UNDP, controls; 5.3 Number of councils Not achieved. UNHCR meeting at least 75% of the 65 %  Suitable amendment service output targets specified to the legal and in local council policy MOUs 85% of MDAs regulatory by 2013 (WB) On track. 7 have dedicated framework; LCs. procurement officers by 6.3 Process for the public 2011. oversight of PFM to be in (AfDB/WB) place by 2013. (WB) On Achieved. track. Under 97.4 % implementation. Decentralizatio n Secretariat and MDAs to perform spot- checks on LCs meeting service-output targets for all LC by 2011. (WB) Achieved. 19 LCs. Forum for oversight of PFM by civil society to be established by 2011. (WB) Achieved. Joint Forum MOFED, NSA All 6 documents required under PEFA 10 published 21 through the SL Gazette and on the MoFED website by 2011. (AfDB/WB) Achieved. All six documents published and on website JAS Objective 2: Promoting Inclusive Growth Selected PRSP Key Issues from PRSP JAS Outcomes & JAS Milestones World Bank II Indicators Group/AfDB objectives & Instruments indicators27 6. Enhanced Inadequate rural financial 6. Improved efficiency and 10% increase cultivated On-going productivity in services, limited irrigation transparency of land for cassava, palm Projects/TFs: agriculture and facilities, weak rural agriculture and fisheries. oil, rice, cocoa & maize FY07 Rural & Priv. fisheries infrastructure, weak value chains by 2013 Sector Dev. Project extension services, and heavy 6.1 50% of target (WB) No data (WB) sufficiency in reliance on rain-fed beneficiaries for selected FY05 Agriculture rice from 70 % in agriculture. value chains increase Development of seed, Sector Rehabilitation 2007 to 90% by production by 20% fertilizer and pesticide Project (AfDB) 2013 (AfDB/WB) On track. laws, and regulations by FY05 NERICA Rice Cassava 10 mt/ha (2008) to 2011. (WB) Not Dissemination Project export sales of 16.1 mt/ha. Rice 0.81 achieved. Procurement (AfDB) cocoa, coffee and mt/ha (2008) to 0.88 mt/ha. of consultants in ginger from progress Pipeline Projects: US$7.2.mil in FY10 GEF Biodiversity 2008 to US$9.5 Conservation Project mil in 2013 Governance/Gender Harmonization of (IDA) 6.3 FBOs registered with policies and regulations FY 12 Regional the Ministry of Agriculture governing formulation Agriculture Project established in all districts by and regularization of (IDA) 2013. (WB) On track. 73 farmer based groups by FBOs established. 2011. (WB) Not AAA: achieved. Procurement Country Economic of consultants in Memorandum progress Partners: EU, FAO, GTZ, IFAD, JICA, KfW, WFP Framework Inadequate surveillance Fisheries: Small scale fishing Ongoing Projects/TFs: established for system in fisheries to ensure 6.5 Territorial Use Rights vessels that are FY01 Artisanal maintaining revenue generation and lack Fisheries (TURFS) legally registered increase from Fisheries Development sustainable fish of land-based fisheries established for coastal 0% in 2009 to 50% in Project (AfDB) stocks. infrastructure fisheries increased from 2011. (WB) Not FY10 Regional none in 2008 to 4 by 2013. achieved. Database Fisheries Project (WB) On track. One under construction. TURF established. Partners: USAID DfID EU AfDB UNDP FAO 6.7 Meet EU phyto-sanitary A satellite-based fishing standard for fish exports by vessel monitoring system 2013 (AfDB/WB) On is in place and track. functioning by 2011. (WB) Achieved. 22 Governance 6.8 Fishing vessels observed committing a serious infraction reduced from 88% in 2009 to 66% by 2013. (WB) Achieved. 8%. 7. Improve High cost of bank credit, 7. Improved investment Establish one-stop shop On-going Standing of limited rural financial climate for business registration Projects/TFs: Sierra Leone as intermediation, by 2011. FY09 Removing the Investment underdeveloped capital 7.1 Reduction in time taken (IFC/WB ) Achieved. Administrative Barriers Destination + market, and constraints in to register a business from Established in 2009 to Investment (Phase 2) job creation investment climate 26 days in 2007 to 10 days TF (WB) Limited capacity of private by 2013 (IFC/WB). On Implement automated sector to provide employment track. 12 days (Jan2011) system for customs data FY09 TA to identify facilities for youth, especially by 2011. (IFC/WB) investor/operator for in urban areas Achieved. ASYCUDA Cape Sierra Hotel. 7.2 Reduction in time of implemented in 2010 (IFC) export transactions from 31 days in 2007 to 22 days by Credit Reference Bureau FY10 Financial Sector 2013. On track. 24 days Legislation presented to TA (WB) (Sept 2011) Parliament by 2011. (WB) FY10 Youth GoSL to develop leasing Employment and Skills 7.3 Number of bank regulation by 2011 (IFC, (WB) accounts increased to WB) Achieved. Credit 300,000 in 2013 from Reference Bureau FY09 Support to EITI 160,000 in 2005 (WB) Legislation was Implementation. (TF) Achieved. 513,000 presented to WB) accounts Parliament on 7th March 2011, and FY10 Mining Sector signed by the President TA Project. (WB) 7.4 Volume and market on 20th April 2011. penetration of leasing FY12 Regional Mining equipment financed Government of Sierra Governance (EITI++) increased from US$6.8 mil Leone introduces a (WB) in 2009 to US$35 million in revised SME tax regime 2013 (IFC). On track based on a review of FY11 Capacity building (based on projections – no taxation policy. for the Bank of Sierra data for 2011). (WB/IFC) Achieved. Leone on monitoring The Regulations were compliance of trade Governance/Gender developed and finance facility (IFC) 7.5 Achieve EITI validation consequently issued by standards by 2013. the BOSL AAA: (AfDB/WB) Achieved. EITI++ scoping First EITI report issued in Reconciliation 2010 conducted & first EITI Partners: report published by 2011 GTZ DfID UNDP 7.6 AML/CFT regime (AfDB/WB). Achieved. UNCDF strengthened by amendment of AML law and Draft AML/CFT law to establishment of FIU at BSL be prepared by 2011. by 2013. (WB) Achieved. (WB) Achieved. 23 8. Broaden Low energy supplies 8. Improved access to Emergency Power On-going electricity Low capacity of transmission sustainable electricity Generation at 10.8 GW/h Projects/TFs: supply and distribution of electricity infrastructure services per month until FY05 Power and Water throughout the infrastructure Energy: Bumbuna hydropower Project (WB) country High cost of power comes on line by 2011. generation relative to 8.1 Households in Freetown (WB) Achieved. FY05 Bumbuna generation and available budgetary resources with access to electricity Hydroelectric Project distribution increased from 20,000 in (WB) capacity from 2009 to 40,000 by 2013. Electricity collection rate 21MW in 2008 (AfDB/WB) Achieved. increased from 50% in FY08 Bumbuna to 56 MW in 40,000 2009 to 85% by 2011. Hydroelectric Project 2013 (WB) Not achieved. Add Fin (AfDB) 8.2 Average annual Collection rate at 76%. interruption frequency in FY09 Bumbuna Freetown from 1,200 in Supplementary Loan 2009 to 600 in 2013. (WB) Installed generating and (AfDB) No data transmission capacity increased by 50MW by FY07 Institutional 8.3 Number of towns with 2010 (AfDB). Achieved. Support Project (AfDB) reliable electricity supply Installed generation increased from 0 to 12 by capacity at 82.5 MW. Pipeline: 2013 (AfDB) Not on track. FY10 Addax bio- Only Freetown and Bo- Draft laws for Public energy project (AfDB) Kenema. Private Partnership and FY11 Infrastructure regulators presented to (Energy) (WB/MDTF) Governance/Gender Parliament by 2011. 8.4 Regulatory framework (WB) Achieved. AAA: for independent power FY10 Public Private production established by Partnership Framework 2013 Achieved. Electricity for energy and other Act approved by sectors Parliament in 2011. FY10 Political Economy Study with focus on Transport and Energy. (WB) FY12 Country Economic Memorandum. (WB) Partners: China, DfID, EU, JICA 9. Develop the Development of road 9. Maintain and extend Contracts entered into by On-going national network. key transport 2011 for rehabilitation of Projects/TFs: transportation Inadequate and poorly infrastructure 100km (WB) + 200 km FY06 IDP Transport network maintained rural and feeder (AfDB) of all weather Project (WB) roads 9.1 All weather trunk roads trunk roads. Achieved FY07 Rural & Private 2000km of feeder Inefficient port and airport in good and fair condition WB 100 km. Sector Development roads by 2013 increased from 50% in 2009 Project to 60 % in 2013. 900 km (WB) & 500km Freetown ports (AfDB/WB) No data. (AfDB) of rural roads Pipeline: and airport rehabilitated by 2011. FY12 Mototoka-Sefadu 9.3 1,400km of feeder roads Not achieved. WB 462 Road (AfDB) rehabilitated by 2013 km FY10 Lungi-Port Loko (AfDB/WB) On track. 712 Upgrading (AfDB) km completed. Freetown port rehabilitated and AAA: 9.4 Port container handling container stacking area FY10 Political performance is improved extended by 2011. (WB) Economy Study with from 8 TEUs/hr in 2007 to Not achieved. Late focus on Transport and 24 12 TEUs/hr by 2013. (WB) commencement of Energy. (WB) On track. 8-10 TEUs/hour. work. FY10 Freetown Ring Road Study (AfDB) 9.5 Lungi Airport to remain Resurface of runway and FY12 Country as international airport installation of new Economic according to ICAO safety navigation facilities Memorandum. (WB) regulations (WB) Achieved. completed at Lungi Airport by 2011. (WB) Partners: Governance/Gender Not achieved. EU, GTZ, Islamic 9.6 Independent road fund Activities (runway, Development Bank, established by 2013. (WB) NAVAIDS) under way Kuwait Fund Achieved. Road fund established Independent road fund bill passed to Parliament by 2011. (WB) Achieved. Road fund bill passed. 25 Annex 1(b) : CAS Progress Report Results Matrix – June 1, 2012 to June 30, 2013 JAS Objective 1: Human Development Selected PRSP II Key Issues from PRSP JAS Outcomes & World Bank Group objectives & indicators25 Indicators 1. Increased access to and Lack of sufficient and 1. Improved capacity to On-going Projects/TFs: completion of primary adequate inputs at school level; effectively and efficiently schooling especially for girls poor internal efficiency of the deliver education FY09 EFA-FTI Catalytic and out of school children system and weak management Fund. (TF) of information and delivery 1.1 Primary Completion Rate systems. from 67% in 2010/2011 to FY08 Chyao-Africa-Support to 70% Education of war affected Low human resource capacity children in the Northern at all levels, shortage of Province teaching and learning material, high pupil ratios in schools, Governance/Gender AAA: poor accountability, low 1.2 Enrollment for girls at JSS FY12 Higher and Tertiary primary school completion increased from 40.9% in 2008 Education Note rates and high repetition and to 43.9% in 2013. (WB) Updating the Education Sector drop-out rates. Plan Constraints to Service Delivery Partners: AfDB, DfID, EU, UNDP, UNICEF, Irish Aid 2. Improve the health status Limited financial and 2. Improved access to basic Ongoing Projects/TFs: of population and quality of geographical access to health health services health services facilities. FY 10 Reproductive and Child Inadequate access to free 2.1 Children receiving Penta-3 Health phase II health care for vulnerable vaccination before 12 months population, limited availability of age increased from 54.8 % of high impact interventions in 2008 to 85 % in 2013. (WB) and shortage of drugs, AAA: equipment and supplies 2.2 Children under 5 who slept FY11 Public Expenditure Shortage of critical health the previous night under an Review professionals, inadequate insecticide treated net FY12 Constraints to Service support/ supervision at all increased from 26% in 2008 to Delivery levels and weak personnel 80% by 2013. (WB) management Partners: Weak coordination among Governance/Gender programs and donors DfID, EU, Irish Aid, UNFPA, 2.3 Deliveries conducted in UNICEF, USAID, WHO health facility increased from 42% in 2008 to 70% in 2013. (AfDB/WB) 2.4 Framework for community-based accountability committees for each public health clinic established (WB) 26 3. Developed framework for Lack of water policy as well as 3. Increased household Ongoing Projects/TFs: management and supply of organized legal, regulatory & access to safe drinking water FY12 Decentralized Service safe water and sanitation institutional frameworks and sanitation Delivery Project phase II Deficiency in both urban and rural water supply 3.1 People with access to water FY10 GRGC-3 Limited functional water increased from 64,000 in 2009 supply infrastructure. to 115,000 in 2013 in targeted areas. (AfDB/WB) AAA: FY12 Public Expenditure 3.2 People with access to Review for Water and improved sanitation increased Sanitation from 25,000 in 2009 to 35,000 FY12 Public Expenditure by 2013. (AfDB/WB) Review Governance/Gender Partners: China, DfID, UNICEF 3.3 Commercial and technical losses reduced from 60% in 2007 to 38% in 2013 (Freetown). (WB) 4. To reduce the incidence High unemployment and 4. Improved capacity to Ongoing projects/TFs: and consequences of extreme underemployment, particularly manage social risks FY10Youth Employment and poverty among the young. 4.1 Cash for work programs Skills Acute skill deficiency among create 4 million person days of the ―lost generation‖ who employment in target areas by FY12 Development policy grew up without education 2013 with increased lending during the war. sustainability (of which 1 million women) from 0 in FY09 Integrated Public 2008 (AfDB/WB) Financial Management Project Governance/Gender FY 10 Rapid Response Growth Poles : Community-Based 4.2 Number of women days Livelihood and Food Support employment created through Program cash for work program increased from 0 in 2008 to 1.2 FY10 Empowering Vulnerable million in target areas. (WB) Youth for Self-Reliance in Kono District and Western Area AAA: FY12 Public Expenditure Review FY12 Social Protection Assessment Partners: UNICEF, WFP 5. Ensure sustainable human Local Councils empowered 5. Improve predictability, On-going Projects/TFs: development through the with responsibilities, revenue expenditure control and FY09 Integrated Public decentralized provision of authority and financial support transparency in Financial Management Project. improved social services. and encouraged to become decentralization and public (WB) Improve and expand sound transparent, accountable and resource management public financial management capable institutions FY10 Decentralized Services demonstrating inclusive 5.1 Number of councils with Delivery I leadership at the local level. integrated development plans Budget resources are now and budgets increased from 0 FY12 Decentralized Services concentrated in central in 2009 to 19 by 2013. (WB) Delivery phase II government agencies and FY12 Development policy 27 allocated to localities on an ad- 5.2 Number of councils lending hoc basis not reflecting relative receiving timely transfers from service needs with widespread crisis response facility FY11 Strengthening Internal social exclusion at the increased from 0 in 2009 to 19 Audit at the Bank of Sierra community level. by 2013. (WB) Leone Resources must be allocated consistent with PRSP 5.3 Variance in expenditure for FY10 Institutional Capacity priorities, with fiscal discipline the 20 largest budget heads Building for Combating and probity in the use of public declines from 13.5% in 2008 Corruption in Sierra Leone resources. This requires: to <7% in 2013. (WB) AAA:  A robust MTEF/MEFF Governance/Gender FY12Public Expenditure and better revenue 5.4 Number of councils Review forecasting for a credible meeting at least 75% of the budget; service output targets specified Partners: in local council policy MOUs DfID, EU, IMF, UNDP,  Improved and effective by 2013 (WB) UNHCR expenditure controls; 5.5 Process for the public  Suitable amendment to the oversight of PFM to be in legal and regulatory place by 2013. (WB) framework; 5.6 Ward Committees holding public meetings and reporting to Local Councils as part of annual development planning and execution cycle increases to 80% JAS Objective 2: Promoting Inclusive Growth Selected PRSP II Key Issues from PRSP JAS Outcomes & World Bank Group objectives & indicators27 Indicators Instruments 6. Enhanced productivity in Inadequate rural financial 6. Improved efficiency and On-going Projects/TFs: agriculture and fisheries services, limited irrigation transparency of agriculture facilities, weak rural and fisheries. FY07 Rural & Priv. Sector in rice from 70 % in 2007 to infrastructure, weak extension Dev. Project 90% by 2013 services, and heavy reliance on Agriculture: rain-fed agriculture. 6.1 50% of target beneficiaries FY10 GEF Biodiversity cocoa, coffee and ginger from for selected value chains (list) Conservation Project US$7.2.mil in 2008 to US$9.5 increase production by 20% mil in 2013 (AfDB/WB) FY11 GEF Wetlands Conservation Project Governance/Gender 6.2 FBOs registered with the FY 12 West Africa Agriculture Ministry of Agriculture Productivity Project established in all districts by 2013. (WB) AAA: Partners: EU, FAO, GTZ, IFAD, JICA, KfW, WFP Framework established for Inadequate surveillance system Fisheries: Ongoing Projects/TFs: maintaining sustainable fish in fisheries to ensure revenue 6.3 Territorial Use Rights FY10 West Africa Regional stocks. generation and lack of land- Fisheries (TURFS) legally Fisheries Project 28 based fisheries infrastructure established for coastal fisheries increased from none in 2008 to Partners: 4 by 2013. (WB) USAID DfID EU AfDB UNDP FAO 6.4 Meet EU phyto-sanitary standard for fish exports by 2013 (AfDB/WB) Governance 6.5 Fishing vessels observed committing a serious infraction reduced from 88% in 2009 to 66% by 2013. (WB) 6.6 Public disclosure of all fishing licenses and revenues by Ministry of Fisheries and Marine Resources (WB) 7. Improve Standing of High cost of bank credit, 7. Improved investment On-going Projects/TFs: Sierra Leone as Investment limited rural financial climate Destination + job creation intermediation, underdeveloped capital market, 7.1 Reduction in time taken to and constraints in investment register a business from 26 FY11 Financial Sector Support climate days in 2007 to 10 days by Project Limited capacity of private 2013 (IFC/WB). sector to provide employment FY10 Youth Employment and facilities for youth, especially 7.2 Reduction in time of export Skills in urban areas transactions from 31 days in 2007 to 22 days by 2013. FY10 Mineral Sector TA 7.3 Number of bank accounts increased to 300,000 in 2013 FY12 Extractive Industries from 160,000 in 2005 (WB) Technical Advisory Project 7.4 Volume and market FY11 Capacity building for the penetration of leasing Bank of Sierra Leone on equipment financed increased monitoring compliance of from US$6.8 mil in 2009 to trade finance facility (IFC) US$35 million in 2013 (IFC). FY09 Integrated Financial Governance/Gender Public Financial Management 7.5 Achieve EITI validation Project standards by 2013. (AfDB/WB) FY11 West Africa Regional Communications Infrastructure 7.6 AML/CFT regime Project strengthened by amendment of AML law and establishment of AAA: FIU at BSL by 2013. (WB) FY12 Policy Note : Revenue AdministrationFY12 Policy Note : Road Map to Prepare for Petroleum Partners: GTZ DfID UNDP UNCDF 29 8. Broaden electricity supply Low energy supplies 8. Improved access to On-going Projects/TFs: throughout the country Low capacity of transmission sustainable electricity and distribution of electricity infrastructure services distribution capacity from infrastructure Energy: FY05 Bumbuna Hydroelectric 21MW in 2008 to 56 MW in High cost of power generation Project 2013 relative to available budgetary 8.1 Households in Freetown resources with access to electricity FY11 Infrastructure (Energy) increased from 20,000 in 2009 to 40,000 by 2013. AAA: (AfDB/WB) FY12 Policy Note ; Revenue Administration 8.2 Average collection rates FY11 Public Expenditure increased from 76% to 80% Review (WB) FY12 Country Economic Memorandum Governance/Gender Partners: 8.3 Regulatory framework for China, DfID, EU, JICA independent power production established by 2013 (WB) 9. Develop the national Development of road network. 9. Maintain and extend key On-going Projects/TFs: transportation network Inadequate and poorly transport infrastructure maintained rural and feeder FY06 IDP Transport Project feeder roads by 2013 roads 9.1 1,400km of feeder roads Inefficient port and airport rehabilitated by 2013 FY07 Rural & Private Sector and airport (AfDB/WB) Development Project 9.2 Port container handling performance is improved from 8 TEUs/hr in 2007 to 12 AAA: TEUs/hr by 2013. (WB) FY12 Pro-poor Transport 9.3 Lungi Airport to remain as Sector Strategy international airport according FY12 Country Economic to ICAO safety regulations Memorandum. (WB) Partners: Governance/Gender EU, GTZ, Islamic 9.4 Independent road fund Development Bank, Kuwait established by 2013. (WB) Fund JAS Objective 3: Extractive Boom Selected PRSP II Key Issues from PRSP JAS Outcomes & World Bank Group objectives & indicators 11 Indicators Instruments Economic Development, Trade Making greater use of natural 10.1 Key regulations related to On-going Projects/TFs: and Finance - macroeconomic resource potential – minerals, mining submitted to Cabinet management agriculture, oil and gas. As a after extensive consultations: FY10 Mineral Sector Technical E&S regulations, Precious Assistance country, Sierra Leone has a Minerals Trading Act, track record of misusing Resettlement Regulations, FY12 Artisinal Mining mineral resources; Anxious to Health and Safety Regulations Community Development and avoid the ‗curse‘ past; the rife (WB) Sustainable Livelihoods 11 PRSP objectives and constraints are taken from October 2011 Concept Note on ‗AGENDA FOR PROSPERITY/ENHANCED AGENDA FOR CHANGE, 2013-2017‘ 30 and corruption that minerals, oil and gas has had in other 10.2 Establishment of FY12 Extractive Industries countries. Given prospects and National Minerals Agency Technical Assistance Project (WB) volumes, Sierra Leone will be FY11 Artisinal Mining assuming a very serious Community Development and responsibility. Wide ranging Governance/Gender : Sustainable Livelihoods advisory services would be Project compelling on how to better 10.3 Prioritized vacancies for manage the different critical staffing requirements Good Governance Partnership subsectors – technical, legal, identified within the Ministry Facility of Mines and Minerals fiscal, governance frameworks. Resources (MMR) completed AAA: and job descriptions and recruitment plans approved by FY12 Public Expenditure HRMO/PSC and recruitment Reviews underway (WB) FY12 Policy Note: Road Map to prepare for Petroleum 1.4 DFGG Strategy for Sierra FY12 Good Governance Leone completed, with priority Initiative social accountability instruments and approaches Partners: laid out (WB) 31 Annex 2: Post-Conflict Meets Resource-Rich: Strategic Priorities for Economic Management in the Era of “Iron Ore Economics� 1. A rapidly changing economic environment requires a new strategic focus for economic development in Sierra Leone, particularly as it applies to financial and private sector development, extractive sector management and the economic policy and institutional agenda. The impending boom in the mineral sector has far-reaching implications for the country‘s development trajectory. Since the end of the civil war Sierra Leone has followed a gradual post-conflict recovery with two successive peaceful election cycles and averaged GDP growth of 6 percent. Now the economy is poised to experience a major transformation: The development of two large iron ore mining projects will lead to large one-off surge in real GDP and a significant surge in exports in 2012 and beyond12. Due to generous tax concessions, government revenue will increase only moderately in 2012 but more substantially from 2013 onwards. While mining activity alone will be a game-changer for Sierra Leone, oil reserves in commercial quantities may be verified in the course of the year. 2. These developments in the mineral sector confront Sierra Leone with significant opportunities and risks:  On the upside, mining can become a growth motor, spur private investment and provide the government with the resources it needs to implement its ambitious development agenda. It provides opportunities for scaling-up public-private partnerships for infrastructure development as well as small and medium enterprise development linked to mining operations and targeted spatial economic development strategies around new growth poles.  On the downside, Sierra Leone has to confront the ‗resource curse‘ that has challenged many resource rich African countries. In the past, Sierra Leone has failed to address these issues and the results have been poor development outcomes, high inequality and devastating conflict. The impact of the unprecedented growth shock puts significant demands on the Government to maintain macro economic stability, ensure good value for money in government expenditures, strengthen transparency and promote good governance. Beyond the significant governance issues associated with managing resource revenues, the dynamics of mineral sector growth could throw economic development off balance. The mineral sector is likely to divert human capital, entrepreneurial and investment resources from other sectors and could thereby undermine development strategies in other potential growth sectors such as agriculture, light manufacturing, tourism as well as commerce and services. Commodity price volatility, foreign currency inflows and a changing structure of the balance-of-payments will challenge macro economic management and financial sector capacity. Social exclusion around extractives could increase the risk of instability, conflict and a disruption of revenue flows. Strengthening institutions and governance 3. Institutional capacity needs to be built to ensure that benefits of the mineral sector are put to use to develop the rest of the economy and achieve inclusive growth in line with agreed priorities. The institutional development agenda is necessarily exhaustive and encompasses traditional public sector priorities like public financial management and governance as well as specific institutional capacity required to manage resource revenues and increase economic management capacity. Four key areas can be identified: Firstly, building and improving public financial management capacity remains a key priority as does public sector reform more broadly. Further efforts in strengthening public financial management are required to strengthen the ability to manage public finances on a consistent basis and in-line with budgets approved by the legislature. Apart from deepening financial discipline this requires developing the skills and systems to ensure that the allocation and distribution of government spending is optimal across sectors, in order to achieve economic efficiency as well as effective collection of all revenues due to the state – openness and dialogue with citizens is essential in this regard. It also requires establishing a strong framework for public procurement to ensure value for money, and give confidence to investors and citizens alike. The public sector reform process to strengthen public sector effectiveness and improve its ability to deliver services must 12 IMF projects a surge in GDP by 35% in 2012 and a fourfold increase in exports. Standard Chartered Bank is projecting 30% GDP growth in 2012. Estimates are driven by assumptions on iron prices and, more importantly, mining output in the initial phase of operation which is introducing some uncertainty around actual figures. 32 be broadened and deepened. A more effective public service will also mean more effective revenue collection, more effective monitoring of operations for health, safety and other regulatory requirements. As initiatives in these areas are already in place, Government needs to maintain the drive and pressure to develop the broad institutional agenda to ensure a strong and consistent measure of governance is embodied in them that will serve the public interest and stand the test of time. Secondly, governance issues are pertinent and have proven to be even more challenging for countries to address in these situations. Pressures to increase government spending, including public sector wages, will rise as will competition within society for access to resources. Licensing and contract award would attract undue attention and may become politicized due to the rent-seeking opportunities they present, and conflicts of interest would abound. Groups on whose land the resources being exploited were discovered will demand that their rights under law be respected, the environmental and social costs of mining be minimized and benefits shared equitably within impacted populations. All this leads to intense political lobbying and competition and could increase the risks of conflict. Increasing conflict stresses are already evident in combustible mining communities and will require careful management. Citizens and communities will be most concerned about the environmental impacts and social disruption, distribution of revenues and in the outcomes through policies, programs and local level projects/development. Drawing on the experience of other countries a strong governance regime underpinned by a practice of accountability and transparency at all stages, an absolute avoidance of conflicts of interest and the direct involvement of all stakeholders, especially community groups in every aspect — especially monitoring of licenses and contracts; monitoring of the projects and operations; collection and distribution of revenues; and the selection and implementation of projects — are necessary elements of a broader governance strategy to deal with new challenges. The key strategic priorities in this area are:  Licensing and contract negotiations. Strengthen the process for awarding licenses and contracts by providing a strategic framework for integrating extractive industry development projects in the context of national planning initiatives. Establish an open and transparent process that utilizes international expertise in negotiations, which includes respected CSOs and development partners. Ensure that the integrity of the process is beyond reproach and that local communities have a say in it and are informed about developments that affect and change their lives.  Revenue Management and associated accountability mechanisms. Extensive public consultations with the population at large and political parties regarding the process of revenue management and the associated accountability mechanisms are needed to provide a robust accountability framework. This should also include independent and regular public reporting on the accountability mechanisms and results. Progress in revenue collection needs to be consolidated by reinforcing the monitoring function, particularly with respect to financial and technical audit of mining operations establishing mechanisms to undertake audits of mining firms by external auditors with respect to profit declarations and legal compensation and community development obligations. EITI validation and passing of the Sierra Leone EITI Bill will be important steps in improving extractive industry governance.  Control Corruption. The impending extractives boom increases the risks of more corruption, since important systems are not yet in place to prevent, detect or deter it or the related money laundering. Tools and mechanisms for prevention and detection need to be embedded in a variety of laws, including the financial sector regulatory system. Also, licensing procedures in existing sectors (not only natural resources) are very poor, and these create risks that critical licenses may be conferred on those involved in criminal activities. Importantly, the impending extractives boom requires the Anti Corruption Commission to become more effective in its work in detecting and prosecuting instances of corruption, but firstly leading (with the Audit Service of Sierra Leone) the installation of sound transparent processes and accountable systems. If integrity issues do not become a very high priority very soon, the existing levels of corruption could increase at a rate commensurate with the extractives boom. Thirdly, an institutional framework for macroeconomic management needs to be put in place ideally before receipt of large windfall revenues in the coming years. Such a framework might include mechanisms like a sovereign wealth fund to absorb excess mineral revenues, other hedging mechanisms to reduce revenue volatility, front-loaded borrowing to smooth government spending, utilities reforms, and specific strategies for currency reserves management. Taken together, the objective should be to establish a strong foundation for macro stabilization. A key strategic question for financial sector management is how foreign currency deposits can be leveraged more to facilitate local currency funding 33 for the private sector, while balancing the risks of currency mismatches on bank balance sheets and dollarization of the economy. 4. The timely establishment of a professionally managed sovereign wealth fund that would absorb large funding inflows from extractive industries and could compensate for the limited absorptive capacity of the Sierra Leone economy would be a key instrument to enhance economic management capacity. Especially, it could help mitigate some of the potential Dutch Disease effects of extractive industry based development. This will require: (a) definition of the funding strategy (for example, state equity returns, advance payments or excess mining revenues); (b) the investment profile and allocation priority (taking the form, for example, of a national infrastructure development fund, future generation fund, and stabilization fund); (c) the fiduciary arrangements, governance structure, and bylaws of the sovereign wealth fund; and (d) the respective legal and regulatory framework. 5. In addition, the authorities should develop a robust pipeline of public investment plans and social interventions to be financed on the basis of stable and consistent transfers of mining revenues to the budget. This will require establishing an improved institutional framework for public investment management and revenue management in order to avoid some of the problems which occurred in 2010 and 2011. It will also need to take account of institutional capacity and the ability for oversight and management of public investment projects. Fourthly, gaps in the regulatory and monitoring frameworks for the extractive sector need to be addressed. Establishing and operationalizing the National Minerals Authority and upgrading the Petroleum Directorate's capacity to manage the extractives sector will both assist. Work will also be required to ensure that the recently enacted Mines and Minerals Act and its regulations are faithfully implemented and monitored to prevent these important reforms from existing only ―on paper‖. Particular emphasis also needs to be placed on monitoring the implementation of extractive industry agreements. Sierra Leone is making progress with respect to improving and strengthening the award of licenses and contracts, regulation and monitoring of operations and revenue collection. Yet this progress needs to be accelerated as the pace of mining development is guided by the vagaries of the market and the private sector. Private and financial sector development The emerging mining industry and its ancillary infrastructure offer the opportunity to be leveraged as ‗growth poles‘ for private sector development. The impact of these developments is substantial and includes local economic development opportunities in non-mining economic activities around the mine catchment areas and transport hubs, SME forward and backward linkages with mine operations as well as the provision of infrastructure leveraging the mining developments (see Figure 3 in main body of this report). Government should develop specific, spatially focused strategies around the new growth poles, especially in the Bumbuna – Makeni – Freetown corridor which combines key power, mining and agro-business assets, and perhaps in the south around the large-scale mining and hydrocarbon reserves, once confirmed. 6. In this context, public-private partnerships (PPPs) for infrastructure development will be a key policy instrument for deepening private sector investment. A key priority will be to strengthen the institutional framework and capacity in the Government to identify, close and manage PPP infrastructure projects. Sierra Leone has a huge infrastructure deficit even by African standards. Recognizing the severe constraints of poorly developed infrastructure for the economy, Government has made the issue a policy priority. An ambitious acceleration in infrastructure investments has, however, stretched public finances considerably in recent years. There is scope for leveraging private sector investment into infrastructure PPPs and close the funding gap. In particular, mining-related investments in infrastructure provide significant potential to be leveraged into shared public infrastructure and improve the operating environment for other industries. 7. While mining developments offer significant potential, current private sector development strategies need to be developed further to actively address the need to invest in economic diversification and balance the structural pressures from the mining industry in terms of demands on skills, entrepreneurship, infrastructure and financing. A key lesson from countries that have experienced similar resource booms is that economic diversification strategies need to be made an early priority. Sierra Leone has significant growth potentials in non-mining sectors, especially agriculture, fisheries, tourism, light manufacturing, commerce and services that need to remain in the focus of policy and private sector strategies. 34 8. Financial sector development priorities will evolve around the ability of the domestic financial sector to intermediate capital inflows, manage the associated risks and foster private sector growth. The ability of the domestic banking sector to meet the demand for funding from new entrepreneurs or existing businesses that seek to expand their operations as part of the supply chain of the new mining operations will be crucial in ensuring broad based growth. Demand for financial services will increase as domestic SMEs leverage the opportunities resulting from mining developments and income levels of households increase. Banks need to invest in their ability to structure loan transactions and identify viable borrowers in the new value chains. Demand for transaction and payment services will increase and development of the national payment system is crucial. 9. The focus on strengthening the regulatory framework and building capacity for banking supervision needs to be maintained and complemented through investments in the risk management capacity of the commercial banks and other financial institutions. Rapid credit growth as a result of a growth shock is prone to result in a build-up of credit risks. Furthermore, the high concentration of economic activity related to mining will introduce considerable systemic risk that needs to be monitored as part of the financial stability oversight functions of the Bank of Sierra Leone. 10. Sierra Leone has the opportunity to learn from the mistakes of other countries that have experienced a similar natural resource-driven boom and invest in governance, institutional development and economic diversification strategies from the start. Sierra Leone needs to invest both in the country‘s ability to reap the opportunities as well as the capacity to mitigate the challenges and risks. 35 ANNEX 3: PROMOTING SOCIAL ACCOUNTABILITY FOR DEVELOPMENT IMPACT I. Introduction 1. Sierra Leone has made significant progress in consolidating peace and promoting human and economic development in the decade since the end of its civil war. Yet according to global indicators, governance and corruption remain notable challenges in securing lasting development.13 Traditionally, efforts to improve governance and minimize corruption have focused primarily on the ―supply-side‖ – including supporting the modernization of the state with capacity building programs in decentralization and public financial management. Yet, there is growing recognition that in order to achieve lasting development in Sierra Leone, citizens must be involved in the process, forging a ―new social contract for development.‖14 In a speech commemorating 50 years of Sierra Leone‘s independence, President Ernest Bai Koroma challenged all Sierra Leoneans to be monitors and contributors to government‘s work under a newly envisioned citizen-state partnership.15 This partnership places civic participation and demand for good governance (DFGG) at the center of development and governance planning and is especially important for Sierra Leone in light of the natural resources-fuelled growth that is expected in the coming years. Social Accountability (SA) and Demand for Good Governance (DFGG) refer to the extent and capability of citizens to hold the state accountable and make it responsive to their needs.16 DFGG identifies the aspirations and involvement of citizens as paramount to the governance agenda, empowering them in order to increase accountability and improve essential service delivery.17 II. DFGG and the Joint Country Assistance Strategy (CAS) 2. The Joint Country Assistance Strategy (CAS) identifies good governance as a cross-cutting theme in promoting Sierra Leone‘s development, pointing to the role of poor governance in fueling the country‘s 11-year civil war.18 The CAS frames governance broadly, but doesn‘t distinguish in detail between supply-side and demand-side approaches. The CAS states that ―all operations will, where possible and relevant, help to build the demand for good governance by promoting transparency, participation, and accountability and supporting capacity development of civil society and the media.‖19 Notably, the CAS offers no conceptual framework or recommendations to guide the design and implementation of robust demand-side measures in Sierra Leone. Since adopting the CAS, experience in Sierra Leone has highlighted the increasing relevance of DFGG to the country‘s development agenda. This Annex provides a framework for greater investment in DFGG in Sierra Leone and lays the ground for using experiences with DFGG to inform the preparation of the next CAS starting in FY14. Significantly, the Annex responds to the need for a country-specific DFGG strategy to further guide operational and analytical activities and policy engagement for the Bank in Sierra Leone. III. DFGG in Sierra Leone: The Experience to Date 13 See WBI Worldwide Governance Indicators, Sierra Leone (2010); Mo-Ibrahim Foundation Governance Indicators, Sierra Leone (2010). 14 See World Bank President Robert Zoellick, Peterson Institute Speech, April 2011. See also World Bank Working Group on DFGG in Africa, Empowering Citizens to Hold their Governments Accountable: An AFR Strategy to Support Demand for Good Governance (Final Version, April 2011) [hereinafter AFR Strategy] (outlining a regional DFGG strategy which, together with the GAC-2 DFGG strategy, forms the foundation of this Annex). 15 See Sierra Leone Government State House, Statement by His Excellency the President, Dr Ernest Bai Koroma at the Launch of Transparency Sierra Leone Portal (Jan. 26, 2012), available at http://news.sl/drwebsite/publish/printer_200519577.shtml. 16 GAC-2 Companion Piece: Strengthening the World Bank‘s Engagement on Demand for Good Governance [hereinafter GAC-2 DFGG], at 27. 17 See id. 18 See Joint Assistance Strategy for Sierra Leone (2010), at 1, 24-28. 19 See id. at 37. The JCAS notes civil society‘s critical role in drafting the Freedom of Information Bill, and the need to publish development project information. See id. at 26. It also stresses improving service delivery and conducting a political economy analysis of the DFGG environment. See id. at 37, 52. 36 3. In developing a country-specific DFGG strategy, it is important to consider the political economy and broader environment for citizen-state interactions. The 2004 World Development Report identified three key aspects of the accountability relationship between citizens, policy makers and service providers: citizen voice with respect to influence over policy makers, citizen power with respect to influence over service providers, and the compact between policy makers and service providers.20 4. There remains a need to better understand how Sierra Leone fares in promoting citizen voice, citizen power, and in having an effective compact. There is also an ongoing need to map the context for DFGG, understand how powerful groups promote or restrict citizens‘ efforts in this space, and assemble evidence showing how development partners can facilitate the citizen-state accountability relationship.21 Based on available global governance data, Sierra Leone performs relatively well in the areas of citizens‘ voice and empowerment, although the country has significant room for improvement in government effectiveness, rule of law, and anti-corruption, all of which may undermine the viability of relationships between citizens, policy makers, and service providers.22 A growing body of empirical data has also suggested that the decentralization process in Sierra Leone has emboldened citizens‘ voice vis-à-vis local government authorities, especially where communities are disconnected from transport, telecommunications, markets, or contact with the state.23 Yet it is important to assess why Sierra Leone performs well in some areas such as citizen voice and empowerment and not in others, as well as to consider how best to boost civil society‘s and government‘s capacity to prompt and respond to, respectively, citizens‘ demands for improved governance. 5. Notably, from the supply-side, the Government of Sierra Leone has increasingly emphasized and created space for DFGG, making the time ripe for strengthened development partner engagement in this space. In 2009, Government and Non State Actors (NSA) agreed on a NSA Component in the Integrated Public Financial Management Project, thereby laying the groundwork for NSAs and Civil Society to become informed and engage directly on PFM issues. This supported the creation of the CSO-led Budget Advocacy network, and in turn provided a forum for civil society to comment and engage in the budget debate process. The latest effort in this regard was the launch in May 2012 of the country‘s first citizen-version of the public budget, drafted by a formative coalition of civil society organizations interested in promoting public financial management. Among other significant opportunities, the Freedom of Information Bill has been resubmitted to Parliament in May 2012, and Sierra Leone is currently undertaking the reconciliation process under the Extractives Industry Transparency Initiative (EITI), with a validation deadline scheduled for December 2012. The country is also preparing its PRS3, which provides another opportunity for strengthening the SA / DFGG agenda at the policy / strategy level. Yet another issue to ponder over is how can Sierra Leone make quick and dramatic improvements in human development, including meeting key MDGs, and does SA / DFGG offer an opportunity in this regard. 20 See AFR Strategy, at 8-9. 21 See id. at 14. 22 See WBI Worldwide Governance Indicators, Sierra Leone (2010); Mo-Ibrahim Foundation Governance Indicators, Sierra Leone (2010). 23 See The World Bank, Decentralization, Democracy, and Development: Recent Experience from Sierra Leone (Yongmei Zhou ed. 2009), at 25. 37 6. Outside the portfolio of Bank financed projects, the Bank has also engaged with other DFGG initiatives in Sierra Leone such as the capacity enhancement of youth organizations on Right to Information (RTI), the Global Youth Anti- Corruption (GYAC) initiative, supporting the Parliamentary Network on the World Bank (PNoWB), the Contract Watch initiative, among others. 7. Against this promising backdrop, in 2011 the Bank conducted an internal assessment of the Bank‘s current social accountability engagement in Sierra Leone. The review analyzed the Bank‘s portfolio across a range of DFGG measures, including: information-sharing, citizen consultation and participation, third-party monitoring by CSOs, and grievance mechanisms.24 A broad outline of these measures follows:  Information-sharing: Citizens‘ and civil society‘s ability to demand better governance depends on their access to actionable information. The effectiveness of DFGG requires disclosure of information, explanation of the information, and dissemination of the information. Information and communications technology can facilitate effective aggregation and dissemination of actionable information.  Consultation and participation: While information-sharing is a critical component of DFGG, citizens and civil society need mechanisms through which to provide feedback to the state. Consultation and participation allow citizens to influence public decisions and service delivery, although it remains challenging to identify which mechanisms – whether citizen scorecards, community oversight committees, or otherwise – best channel this ―feedback‖ or its ―uptake‖ into Government decisions and policy making.  Third-party monitoring: DFGG also calls for the media and other civil society actors to monitor and oversee government activities. Such monitoring can help detect and manage risks. These civil society actors aggregate and disseminate relevant information to enable citizens to discuss government performance and opportunities for strengthened action.  Grievance mechanisms: In some instances, citizen consultation/participation and third-party monitoring create pressure, but government fails to respond in the desired manner. Effective grievance mechanisms channel concerns and provide citizens a voice in development. They can mitigate risks and conflict before they become serious or costly.25 8. The review revealed that the Bank is supporting some innovative work on DFGG, but the overall effort is largely focused on project-level approaches to DFGG, with a focus on information-sharing and community consultation/participation, but with limited grievance mechanisms, third-party monitoring, and sustainable policy uptake mechanisms. More importantly, there is scope for tightening the link between use of SA / DFGG and development results. The review recommended that: During the preparation process, projects undertake better prior analysis of accountability constraints and the demand- side measures to alleviate them; Projects better engage and avoid duplication with other accountability structures that already exist in Sierra Leone – especially during implementation;  Relatedly, the Bank consider facilitating citizen participation and DFGG beyond a project‘s life cycle;  The Bank sharpen the coherence in its overall approach to DFGG in the Sierra Leone program, and engage with government further on how DFGG can help accelerate achievement of development results.  The Bank gather stronger evidence to demonstrate the effectiveness of DFGG work, including mixed-methods approaches that can help explain why certain DFGG interventions are effective (or ineffective) in a particular context.26 IV. Towards a Country-Specific DFGG Strategy 9. Framed by the priorities and limitations outlined in the Africa Regional DFGG Strategy, as well as the findings from the 2011 portfolio review, there is a need to develop a country-specific DFGG strategy for Sierra Leone. The Africa 24 See GAC-2 DFGG, at 36 (outlining these four categories). The review categories loosely tracked these four categories. 25 Notably, in order to be effectual and credible, grievance mechanisms must have a supply-side response from the government and those who act on its behalf. 26 See GAC-2 DFGG, at 13. 38 DFGG Strategy recommends five areas of strategic influence for the region: (i) understanding the socio-political context for DFGG; (ii) accountability for service delivery; (iii) enabling environment for DFGG; (iv) strengthening natural resource management; and (v) supporting media in promoting good governance.27 10. The Sierra Leone DFGG strategy framework proposed here builds upon existing successes, focuses on select and promising entry points for engagement, and leverages the Bank‘s comparative advantages as a convener, financier, and knowledge institution to deliver development impact.28 In implementing a country-level DFGG strategy, the Bank should engage in more internal dialogue and robust discussions with the government, civil society and other development partners to ensure that its work complements and enhances the needs identified and efforts underway. In this regard, the Bank will work to forge relevant partnerships. The Bank should also consider how to boost the capacity of civil society to place demands on government, and of government to respond to those demands, encouraging partnerships between the two where possible. 11. With these principles in mind, three potential key priority areas for DFGG work in Sierra Leone during the remainder of the CAS period are: (i) promoting a strong policy and enabling environment for DFGG, (ii) reinforcing accountability to improve health care delivery and health outcomes, and (iii) promoting the synergy and cross-learning on DFGG issues across the country portfolio. i. Promoting a strong policy and enabling environment for DFGG. 12. The Bank would play a stronger role in working with government and other stakeholders in promoting an enabling environment for citizen engagement and accountability of service providers to citizens. This would help focus the Bank efforts much more on using the ‗policy and planning space‘ to strengthen SA / DFGG as a way of promoting transparency and governance in Sierra Leone. In supporting the broader enabling environment, the Bank would work to identify and then address context-specific constraints to effective DFGG, such as lack of awareness of entitlements, restricted social capital and group mobilization, and citizen concerns about the efficacy or impartiality of feedback or grievance systems. Specifically, the Bank‘s would have different dimensions: (i) engaging with the PRS3 and sector strategy / policy discussions in order to also ensure that SA / DFGG issues get sufficient attention in these documents; (ii) working with stakeholders to create opportunities for using open information exchange and communication between citizens, policy makers, and service providers in Sierra Leone. This could involve looking at ways to facilitate implementation of the Right to Information Bill, once it is approved by Parliament and ratified into law, and using ICT and mapping to provide the same quality information to both local level decision-makers and citizens (and thus addressing the problem of potential ‗information asymmetry‘ in making planning decisions at the local level). It could also entail strengthened engagement with and capacity-building within media sources; (iii) continue to strengthen the use of the budget as an important tool for promoting accountability, e.g. through quality use of Citizens Budget and supporting the government to continue disclosing revenues from the extractives sector; and (iv) make the Bank itself more accountable by use of initiatives like External Implementation Status Report (EISR), which aim to complement the Bank‘s Access to Information policy, and to get third party / beneficiary feedback on implementation of Bank-supported projects. ii. Reinforcing Citizen Accountability to Improve Health Care Delivery and Health Outcomes. 13. Although Sierra Leone has made progress in promoting human development since the end of the civil war, the country still lags far behind in achieving certain Millennium Development Goals (MDGs), particularly in the health sector. The country remains near the bottom of the Human Development Index with very high maternal and under-five mortality rates. As Sierra Leone undergoes a rapid economic transformation driven by the extractives sector, the socio- political and economic imperative to ensure that there is faster progress on the MDGs is only likely to increase. The government‘s bold Free Health Care Initiative (FHCI) aims to improve the country‘s health statistics, and health care delivery more broadly. However, the government and civil society have observed gaps in monitoring and accountability (improper use fees, absent nurses, missing drugs, etc.) that undermine service delivery. As this Annex has suggested, the Bank needs to focus on select, promising points of engagement with DFGG, and the health sector poses one such 27 See id. at 14-16. 28 See AFR Strategy. 39 promising entry point. There are identified gaps in monitoring and accountability in the health sector, and citizens (who are closest to the point of service delivery) may be best equipped to document these and press for change. Further, the Government has indicated a keen interest in both advancing health outcomes (via the FHCI, among other efforts) and, notably, in using DFGG to improve health service delivery. Hence, it is recommended that the Bank support the Government and civil society in their endeavors by focusing its efforts around using DFGG to improve health care delivery. This emphasis is consistent with the Africa Regional DFGG Strategy and the CAS, both of which emphasize the importance of SA / DFGG for strengthening service delivery. Experience elsewhere has shown that parallel efforts to strengthen the delivery systems (‗supply-side‘) and the accountability systems (‗demand-side‘) are likely to improve the prospects of achieving more sustainable development impact. Yet, the true benefits of SA / DFGG in helping achieve development results in the health sector in Sierra Leone must still be validated, and, hence, rigorous and mixed-methods evaluation will be an important component of the Bank‘s activities in this space. The revised CAS Results Framework captures the intended outcomes of this consolidated DFGG effort in the health sector in the country. iii. Promoting Cross-learning and Synergy on DFGG across country portfolio. 14. As noted above, the review of ongoing of DFGG efforts in Bank-supported programs in Sierra Leone has confirmed that SA / DFGG is being actively pursued in many projects in the portfolio. Going forward, the cross-learning and synergy between these efforts would be promoted in a number of ways. Firstly, the following framework would be used as a guide to help identify opportunities for DFGG to contribute to specific sector / project outcomes or address binding constraints to good governance and enhanced service delivery in ongoing and new projects. Secondly, the Bank will maintain the focus on high-impact DFGG initiatives and avoid undue proliferation of efforts and ensure optimal use of limited government capacity. Thirdly, put greater attention on ‗closing the feedback loop‘ i.e. stronger grievance redressal systems and helping ensure that citizens can use the ‗empowerment‘ provided through DFGG initiatives in helping improve service delivery and accountability of providers. Next, continue and strengthen the use of established tools to support DFGG in improving service delivery, such as surveys carried out for several years, including CLoPAS, PETS and INPSS. And finally, consider opportunities to enhance synergies on a regional basis with other countries confronting similar development challenges and opportunities for DFGG engagement in areas including increased access to information, budget transparency, and extractives. Strategic country-level approach to DFGG Identify binding constraints in a particular sector or development area. Consider whether empowering citizens/civil society may help alleviate that binding constraint. Is there evidence that citizens‘ involvement makes a difference? Do citizens/civil society have the capacity and willingness to work in this space, and, if not, is support available to assist them in so doing? Does government have the capacity and willingness to respond, and, if not, is support available to assist it in so doing? If empowering citizens/civil society may make a difference, consider which DFGG measures in particular are best targeted to the local context and to the particular need. Are grievances or discord foreseeable? Are there existing accountability structures that can be bolstered? 15. The next opportunity to review the state of play with the overall DFGG effort of the Bank in Sierra Leone would be during the preparation of the next CAS. At that time, the Bank should identify key sectors for future Bank DFGG 40 engagement in order to enhance project performance and/or minimize risks, using a strategic approach such as the one outlined above. In addition, the Bank should execute further adjustments and refinements to the country DFGG strategy. Developing an integrated approach to DFGG in the health sector DFGG Binding Constraint and Potential DFGG Solution Measure Promoting Since the government of Sierra Leone passed a free health care initiative (FHCI) in 2010, information- civil society organizations (CSOs) have scrutinized the accountability of service delivery sharing and providers and pointed to gaps in monitoring that lead, inter alia, to leakage of drugs, community improper fees for health services, and missing health staff.29 consultation and participation Government and CSOs have pointed to DFGG as a potentially powerful tool to empower citizens to aggregate information about gaps in services and monitor and participate in improving health service delivery. The government Decentralization Secretariat, with World Bank DSDP financing, is implementing two DFGG interventions around health clinics in four districts, beginning in May 2012: 1. Seeking to improve accountability in health delivery by convening discussions in communities around a clinic scorecard and drafting a compact between communities and clinic staff wherein both commit to improving health delivery. 2. Linking bottom-up feedback from users with top-down, formal state recognition through a non-financial award to the top improving clinics and their staff. The interventions will be implemented over approximately 8 months using a randomized- controlled trial. Qualitative research by the World Bank Justice for the Poor program will also seek to understand why and how these measures work. Grievance Government and CSOs have noted certain accountability gaps, such as drug leakage or mechanisms poor management, that reflect breakdowns in state structures. Information-sharing or community consultation/ participation may not suffice in these cases; to obtain a remedy, communities may need help navigating administrative or other accountability channels. Legal empowerment practitioners are exploring their role in addressing such systemic breakdowns that create problems felt by an entire community. Small-scale pilot activities are taking place in two districts to investigate role of legal empowerment (paralegals) and DFGG (community-based health oversight committees) in improving paths for citizen grievances around health delivery. The findings will inform the broader portfolio of Bank-financed approaches to accountability for service delivery in Sierra Leone. 29 See Amnesty International, At a Crossroads: Sierra Leone‘s Free Health Care Policy (2011). 41 Annex 4 – Progress on Millennium Development Goals Millennium Development Goals 1990 1995 2000 2005 2010 Goal 1: Eradicate extreme poverty and hunger Employment to population ratio, 15+, total (%) 64 64 63 65 65 Employment to population ratio, ages 15-24, total (%) 39 38 39 42 42 GDP per person employed (constant 1990 PPP $) .. .. .. .. .. Income share held by lowest 20% .. .. .. 6 .. Malnutrition prevalence, weight for age (% of children under 5) 25 .. 25 28 21 Poverty gap at $1.25 a day (PPP) (%) 45 .. .. 20 .. Poverty headcount ratio at $1.25 a day (PPP) (% of population) 63 .. .. 53 .. Vulnerable employment, total (% of total employment) .. .. .. 92 .. Goal 2: Achieve universal primary education Literacy rate, youth female (% of females ages 15-24) .. .. .. 37 48 Literacy rate, youth male (% of males ages 15-24) .. .. .. 60 68 Persistence to last grade of primary, total (% of cohort) .. .. .. .. .. Primary completion rate, total (% of relevant age group) .. .. .. .. 74 Total enrollment, primary (% net) .. .. .. .. .. Goal 3: Promote gender equality and empower women Proportion of seats held by women in national parliaments (%) .. 6 9 15 13 Ratio of female to male primary enrollment (%) 66 .. 67 .. 93 Ratio of female to male secondary enrollment (%) 49 .. 68 .. .. Ratio of female to male tertiary enrollment (%) .. .. 78 .. .. Share of women employed in the nonagricultural sector (% of total nonagricultural .. .. .. 23.2 .. employment) Goal 4: Reduce child mortality Immunization, measles (% of children ages 12-23 months) .. .. 37 71 82 Mortality rate, infant (per 1,000 live births) 162 159 142 128 114 Mortality rate, under-5 (per 1,000 live births) 276 271 233 202 174 Goal 5: Improve maternal health 42 Adolescent fertility rate (births per 1,000 women ages 15-19) .. 151 146 144 120 Births attended by skilled health staff (% of total) .. .. 42 43 42 Contraceptive prevalence (% of women ages 15-49) 3 .. 4 5 8 Maternal mortality ratio (modeled estimate, per 100,000 live births) 1,300 1,400 1,300 1,100 970 Pregnant women receiving prenatal care (%) .. .. 68 81 87 Unmet need for contraception (% of married women ages 15-49) .. .. .. .. 28 Goal 6: Combat HIV/AIDS, malaria, and other diseases Children with fever receiving antimalarial drugs (% of children under age 5 with fever) .. .. 61 52 30 Condom use, population ages 15-24, female (% of females ages 15-24) .. .. .. .. 5 Condom use, population ages 15-24, male (% of males ages 15-24) .. .. .. .. 18 Incidence of tuberculosis (per 100,000 people) 207 279 377 509 682 Prevalence of HIV, female (% ages 15-24) .. .. .. .. 1.5 Prevalence of HIV, male (% ages 15-24) .. .. .. .. 0.6 Prevalence of HIV, total (% of population ages 15-49) 0.1 0.2 0.9 1.5 1.6 Tuberculosis case detection rate (%, all forms) 8 18 24 26 32 Goal 7: Ensure environmental sustainability CO2 emissions (kg per PPP $ of GDP) 0 0 0 0 0 CO2 emissions (metric tons per capita) 0 0 0 0 0 Forest area (% of land area) 43.5 .. 40.8 39.4 38.1 Improved sanitation facilities (% of population with access) 11 11 11 12 13 Improved water source (% of population with access) 38 42 46 51 55 Marine protected areas (% of territorial waters) 0 0 0 0 0 Net ODA received per capita (current US$) 15 54 44 66 81 Goal 8: Develop a global partnership for development Debt service (PPG and IMF only, % of exports, excluding workers' remittances) 10 62 46 9 4 Internet users (per 100 people) 0.0 0.0 0.1 0.2 0.3 Mobile cellular subscriptions (per 100 people) 0 0 0 14 34 Telephone lines (per 100 people) 0 0 0 1 0 Fertility rate, total (births per woman) 6 6 6 5 5 Other GNI per capita, Atlas method (current US$) 200 200 150 230 340 43 GNI, Atlas method (current US$) (billions) 0.8 0.8 0.6 1.2 2.0 Gross capital formation (% of GDP) 10.0 5.6 6.9 17.0 15.8 Life expectancy at birth, total (years) 39 37 40 44 47 Literacy rate, adult total (% of people ages 15 and above) .. .. .. 35 41 Population, total (billions) 0.0 0.0 0.0 0.0 0.0 Trade (% of GDP) 46.2 45.1 57.4 60.1 46.6 Source: World Development Indicators 44 Annex 5: Planned Lending and Actual Deliveries FY10 – FY13 FY CAS Plans Planned Current Status Approval Approved Amount amount (US$m) Date (US$m) FY10  GRG3 Development policy lending 10 Closed 11/24/2009 10  Decentralized Service Delivery Program I 20 Active 10/15/2009 20  Mining TA 4 Active 12/3/2009 4  Financial Sector TA: Capacity Building 2 Active 4/7/2011 4 and Regulatory Reform  Youth Employment and Skills (including 20 Active 6/30/2010 20 IDA Crisis Response Window)  GRG3 supplemental financing (IDA Crisis Response Window) 4 Active 6/11/2010 7 Regional  Fisheries 5 Active 6/28/2011 8 (national IDA) + 20m in regional IDA & TF 65 FY11  DPO1 – Development Policy Operation 7 Closed ?? 10  Infrastructure I (Energy/Transport) 15 - -  Mining Additional Financing ?? 4 (IDA) + 4 (TF)  Rural & Private Sector Development ?? 20 Regional  West Africa Communications 25  West Africa Agriculture 4 22 (IDA + TF) 45 26 FY12  DPO2 – Development Policy Operation 7 - - 24  Decentralized Service Delivery Program II 13 Active 12/20/2011 26 (IDA) + 5 (TF)  Pay & Performance Project 17 Regional 2  Regional Mining Sector TA Initiative 4 - - (incl. EITI++) -  Regional Agriculture 26 FY13  DPO3 Development Policy Operation 7 - -  Infrastructure II (TBD) 15 - - -  Energy Access Program (Phase 1, MDTF- 20 Under Preparation funded)  Energy Access Program (Phase II, IDA 25 Under Preparation funded) 67 Total FY10 -13 184 46 Annex 6 - Sierra Leone - Active Trust Funds ( Figures in thousands of USD ) Grant Progra Net Grant Funds Disb. Avail. Grant Sign End Disb. Trust Fund # Trust Fund Name m Closing Donor Name Exec. By Amount to Date Balance Date Date Source Date Sierra Leone - Safety Net Multiple TF010099 Support 300.00 170.53 86.31 RSR 9/30/2012 Donors 7/1/2011 1/30/2013 Bank Sierra Leone Reproductive and Child Health Project Phase II (RCHP2) (FY12 SPN Multiple TF010224 Budget) 112.00 84.76 27.24 ACGF 6/29/2012 Donors 7/14/2011 10/29/2012 Bank Sierra Leone Reproductive and Child Health Project Phase II (RCHP2) (FY12 Multiple TF010349 Supervision Staff Time) 50.00 49.99 0.01 ACGF 6/29/2012 Donors 8/1/2011 10/29/2012 Bank Additional Financing for the West Africa Regional Fisheries Program (Phase I) - Multiple TF010655 Sierra Leone Project 8,000.00 0.00 8,000.00 ACGF 10/30/2013 Donors 10/17/2011 4/30/2014 Recipient Technical Assistance for Tariff Analysis and Integrated Multiple TF010710 Resource Planning Project 750.00 0.00 750.00 SLIN 5/15/2013 Donors 11/15/2011 11/15/2013 Recipient Norway - Sierra Leone Higher and Ministry of Tertiary Education Sector Foreign TF010801 Note 100.56 62.70 37.31 NPEF 10/31/2012 Affairs 10/5/2011 2/28/2013 Bank Evaluating Social Accountability and Legal Empowerment for Health Services in Nigeria and Sierra TFESS Multiple TF011013 Leone 250.00 15.49 80.61 D 8/1/2014 Donors 10/28/2011 12/1/2014 Bank TF011070 193.00 44.57 111.76 FTIE 8/31/2012 11/7/2011 12/31/2012 Bank Sierra Leone - Updating the Multiple 47 Education Sector Plan Donors Sierra Leone - Pro-growth pro-poor Transport Sector Multiple TF011615 Strategy (PGPTS) 113.00 0.00 0.00 SSATP 10/31/2012 Donors 1/18/2012 2/28/2013 Bank United Kingdom - Department for Sierra Leone Extractive International Industries Technical AFRS Development TF011786 Assistance Project 1,682.20 116.52 1,568.51 D 6/30/2016 (DFID) 2/14/2012 12/30/2016 Recipient Sierra Leone: Financial Assessments for the Districts of Tonkolili, Koinadugu, and Multiple TF012220 Bombali 75.00 0.00 58.10 PPIAF 12/31/2012 Donors 4/12/2012 4/30/2013 Bank Beyond Broadband Access: Opportunities in Innovation Korea- and Content Development Ministry of using ICT for Improving Basic Finance & TF012393 Services 250.00 0.00 250.00 INFOD 6/30/2013 Economy 4/2/2012 10/30/2013 Bank IBRD 1818 H TF050485 HIPC - IDA - Sierra Leone 229,859.98 31,008.08 0.00 HIPC 12/31/2030 Street, NW 7/9/2008 12/31/2030 Recipient Multiple TF050687 HIPC - AFDB - Sierra Leone 57,094.93 57,094.93 116.05 HIPC 12/31/2030 Donors 7/9/2008 12/31/2030 Recipient Netherlands - Ministry of Infrastructure Sierra Leone Bum Buna CARB and the TF056937 Hydro 0.00 0.00 0.00 ON 6/30/2014 Environment 4/11/2011 12/30/2014 Recipient Chyao-Africa - Support to Education of War affected Italy - Ministry Children in the Northern ICHYA of Foreign TF091155 Province of Sierra Leone 469.92 469.92 0.00 O 6/30/2012 Affairs 3/4/2008 12/31/2012 Recipient Sierra Leone Education for all EFAFT Multiple TF092755 Fast Track Catalytic Giant 13,900.00 11,397.30 2,502.70 I 9/30/2012 Donors 9/15/2008 3/31/2013 Recipient 48 Strengthening Capacity of Directorate Office of Diaspora Affairs for developing Capacity Development in IBRD 1818 H TF093688 Public Sector 453.26 278.85 174.41 IDF 2/28/2012 Street, NW 3/25/2009 8/31/2012 Recipient DRF Sierra Leone - IBRD 1818 H TF093966 Preparation 950.00 0.00 950.00 DRF 12/31/2011 Street, NW 4/24/2009 6/30/2012 Recipient Sierra Leone Integrated Public AFRQ Multiple TF095389 Financial Management Project 12,882.47 7,745.81 1,017.23 K 7/31/2013 Donors 10/19/2009 1/31/2014 Recipient SL-Empowering Vulnerable Youth for Self-Reliance in Italy - Ministry Kono District and Western ICHYA of Foreign TF095497 Area 17.76 17.45 0.32 O 6/30/2012 Affairs 11/1/2009 10/30/2012 Bank SL-Empowering Vulnerable Youth for Self-Reliance in Italy - Ministry Kono District and Western ICHYA of Foreign TF095498 Area 382.24 141.89 240.34 O 6/30/2012 Affairs 11/27/2009 12/31/2012 Recipient Sierra Leone Integrated Public Financial Management AFRQ Multiple TF095748 Reform Program (IPFMRP) 1,038.93 599.00 439.93 K 7/31/2013 Donors 11/20/2009 11/30/2013 Bank IDF : Institutional Capacity Building for Combating IBRD 1818 H TF096085 Corruption in Sierra Leone 499.83 191.67 308.16 IDF 3/16/2013 Street, NW 3/16/2010 9/16/2013 Recipient Sierra Leone Biodiversity Multiple TF096537 Conservation Project 5,000.00 1,066.08 3,933.92 GEFIA 12/1/2014 Donors 5/27/2010 6/1/2015 Recipient Financing of the 2nd Phase of the Reproductive and Child Multiple TF096812 Health Project in Sierra Leone 20,000.00 11,265.40 8,734.60 ACGF 10/31/2013 Donors 8/12/2010 4/30/2014 Recipient W1 - Sierra Leone Good Governance Initiative - Integrating Governance Principles into New Joint Country Assistance Str ategy Multiple TF097505 (JAS) for FY10-13 1,400.00 397.80 67.24 GPF 4/30/2013 Donors 7/1/2010 8/31/2013 Bank 49 Round 1: Sierra Leone Rapid Response Growth Poles: Community-Based Livelihood Japan - and Food Support - Bank Ministry of TF097566 Supervision 171.00 143.39 27.61 JSDF 12/1/2014 Finance 12/1/2010 4/1/2015 Bank Round 1: Sierra Leone - Rapid Response Growth Poles: Japan - Community-Based Livelihood Ministry of TF097914 and Food Support Program 2,813.32 917.03 1,896.28 JSDF 12/1/2014 Finance 12/1/2010 6/1/2015 Recipient Round 28: Sierra Leone Artisinal Mining Community Japan - Development and Sustainable Ministry of TF097943 Livelihoods (Bank Executed) 137.50 77.03 60.47 JSDF 9/14/2012 Finance 8/26/2010 1/14/2013 Bank Sierra Leone - EFA FTI Catalytic Fund Supervision EFAFT Multiple TF098212 Grant 230.46 166.60 63.86 I 9/30/2012 Donors 10/28/2010 1/31/2013 Bank Sierra Leone HRBF K&L TF098734 Grant 124.70 119.90 1.06 HRBF 12/31/2011 Donors 1/14/2011 4/30/2012 Bank Wetlands Conservation TF098957 Project 1,800.00 300.00 1,500.00 GEFIA 6/30/2015 Donors 6/1/2011 12/31/2015 Recipient Sierra Leone Infrastructure Development Fund: Bank Staff and Consultant Costs for Program Management and TF Multiple TF099032 Administration 38.95 34.80 4.15 SLIN 12/31/2015 Donors 2/7/2011 4/30/2016 Bank Round 28: Sierra Leone Artisinal Mining Community Japan - Development and Sustainable Ministry of TF099111 Livelihoods 2,750.09 387.79 2,362.30 JSDF 7/28/2015 Finance 7/28/2011 1/28/2016 Recipient Sierra Leone: #10067 Strengthening Internal Audit Multiple TF099118 at the Bank of Sierra Leone 115.70 69.86 15.90 FIRST 9/1/2012 Donors 2/22/2011 1/1/2013 Bank 50 AFTEG- DFID Multi-Donor Trust Fund for Sierra Leone Infrastructure Development Fund: Energy/Infrastructure Specialist (Based in Sierra Multiple TF099425 Leone) 400.00 309.81 90.19 SLIN 12/31/2015 Donors 2/10/2011 4/30/2016 Bank Sierra Leone Project under the First Phase of the West Africa Japan - Agricultural Productivity Ministry of TF099510 Program ( WAAPP) 10,000.00 0.00 10,000.00 PHRD 6/30/2016 Finance 6/1/2011 12/31/2016 Recipient Sierra Leone: Supervision of TF099536 Grant 50.00 46.39 3.61 ETAF 8/30/2012 Donors 4/6/2011 12/30/2012 Bank Sierra Leone Extractive Industries Technical Advisory Multiple TF099537 Facility Project 750.00 200.00 550.00 ETAF 6/30/2012 Donors 7/6/2011 12/30/2012 Recipient Sierra Leone - Pro-growth Islamic Pro-poor Transport Sector Development TF099629 Strategy (PGPTS) 187.53 32.69 0.00 SSATP 3/31/2013 Bank (IDB) 4/27/2011 4/30/2013 Bank AFTEG-MDTF for Sierra Leone Infrastructure Dvpt Fund: Funds for Identification and Preparation of the First Project Su pported by the Multiple TF099676 Fund 250.00 157.23 48.90 SLIN 12/31/2015 Donors 5/2/2011 4/30/2016 Bank Total 376,925.64 125,937.47 46,530.87 51 Annex 7 - Summary of Non-lending Services - Sierra Leone Completion Cost Product FY (US$000) Audiencea Objectiveb Recent completions Public Expenditure Review FY11 304 Government, donors, Bank Knowledge generation, problem-solving Public Expenditure Review for Water and Sanitation FY12 Government, donors, Bank Knowledge generation, problem-solving Underway TA & Policy Note: Revenue Administration FY12 50 Government, Bank Knowledge generation, problem-solving TA & Policy Note: Road Map to Prepare for Petroleum FY12 45 Government, Bank Knowledge generation, problem-solving Social Protection Assessment FY13 154 Government, Donor, Bank and Knowledge generation, public debate public dissemination Higher and Tertiary Education FY13 120 Government, donors, Bank Knowledge generation, problem-solving Good Governance Initiative FY13 1400 Government, Bank and Knowledge generation, public debate public dissemination Constraints to Service Delivery FY13 100 Government, Bank and Knowledge generation, public debate Transport Strategy Update FY13 240 Government, Bank Knowledge generation, public debate Planned Diagnostic Trade Integration Study Update FY13 235 Government, donors, Bank, and Knowledge generation, problem-solving, and public dissemination public debate TA & Policy Note: Public Investment Management FY13 60 Government, Bank Knowledge generation, problem-solving. TA & Policy Note: Poverty Profile, 2011 FY13 60 Government, donors, Bank and Knowledge generation, public debate 52 public dissemination Government, donors, Bank and Education Sector Plan Update FY13 443 public dissemination Knowledge generation, public debate Government, donors, Bank and Improve Governance through ICT FY13 250 public dissemination Knowledge generation, public debate Government, donors, Bank and Education Sector Plan Development FY13 250 public dissemination Knowledge generation, public debate 53 Annex 8 - Selected Indicators* of Bank Portfolio Performance and Management As Of Date 5/10/2012 Indicator 2009 2010 2011 2012 Portfolio Assessment Number of Projects Under Implementation a 8 9 10 12 Average Implementation Period (years) b 4.2 2.4 2.4 2.9 Percent of Problem Projects by Number a, c 50.0 0.0 0.0 0.0 Percent of Problem Projects by Amount a, c 60.4 0.0 0.0 0.0 Percent of Projects at Risk by Number a, d 50.0 22.2 10.0 0.0 Percent of Projects at Risk by Amount a, d 60.4 25.6 11.6 0.0 Disbursement Ratio (%) e 20.9 34.4 44.0 22.5 Portfolio Management CPPR during the year (yes/no) Supervision Resources (total US$) Average Supervision (US$/project) Memorandum Item Since FY 80 Last Five FYs Proj Eval by OED by Number 30 4 Proj Eval by OED by Amt (US$ millions) 617.0 69.7 % of OED Projects Rated U or HU by Number 43.3 25.0 % of OED Projects Rated U or HU by Amt 40.0 24.9 a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP). d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 54 Annex 9 - IDA Program Summary 5/10/2012 Proposed IDA Base-Case Lending Program a Strategic Implementation Fiscal Proj ID US$(M) Rewards b b Risks year (H/M/L) (H/M/L) SL-Public Sector Pay & 2012 17.0 H Performance (FY12) M Result 17.0 Sierra Leone:Energy 2013 25.0 H Access Project - IDA M Result 25.0 Overall Result 42.0 55 Annex 10 - Sierra Leone Key Economic & Program Indicators - Changes from Last CAS Forecast in Last CAS Actual Current CAS Forecast Economy (CY) 2009 2010 2011 2012 2010 2011 2009 2010 2011 2012 Growth rates (%) GDP 4.0 4.7 5.5 6.0 5.3 6.0 3.2 5.3 6.0 32.5 Exports (US$) 33.8 2.3 -1.0 33.8 2.3 348.4 Imports (US$) 60.7 105.3 -2.6 60.7 105.3 -9.3 Inflation (%) 1 9.5 8.8 7.5 6.5 17.8 18.5 9.2 17.8 18.5 11.5 National accounts (% GDP) Current account balance -9.4 -8.7 -7.5 -7.2 -19.4 -48.2 -6.5 -19.4 -48.2 -13.6 Gross investment Public finance (% GDP) Fiscal balance -4.4 -4.2 -5.0 -4.4 -5.2 -4.6 -2.5 -5.2 -4.6 -1.5 Foreign financing 1.6 2.4 1.9 1.6 2.4 2.3 a/ 56 International reserves 2.1 2.4 4.1 2.1 2.4 2.6 (as months of imports) Program (Bank’s FY) FY__a FY__b FY__b FY__b FY__c FY__c FY__d FY__b FY__b FY__b Lending ($ million) Gross disbursements ($ million) 1 Period average. a/ Percent of non-iron ore GDP. The fiscal balance on the same basis would be -1.9 percent. 57 Annex 11 - IFC Investment Operations for Sierra Leone 2009 2010 2011 2012* Original Commitments (US$m) IFC and Participants 7.16 1.05 2.85 IFC's Own Accounts only 7.16 1.05 2.85 Original Commitments by Sector (%)- IFC Accounts only FINANCE & INSURANCE 100 100 PLASTICS & RUBBER 100 Total 100 100 0 100 Original Commitments by Investment Instrument (%) - IFC Accounts only Guarantee 100 100 Loan 100 Total 100 100 0 100 * Data as of May 01,2012 58 Annex 12 – IFC‟s Committed and Oustanding Portfolio Committed Disbursed Outstanding **Quasi *GT/ Partici **Quasi *GT/R Partici FY Approval Company Loan Equity Equity RM pant Loan Equity Equity M pant 2012 Vitafoam 2.85 0 0 0 0 0 0 0 0 0 Total Portfolio: 2.85 0 0 0 0 0 0 0 0 0 * Denotes Guarantee and Risk Management Products. ** Quasi Equity includes both loan and equity types. 59 Annex 13 Operations Portfolio (IBRD/IDA and Grants) As of 5/23/2012 Closed Projects 43 IBRD/IDA * Total Disbursed (Active) 116.99 of w hich has been repaid 0.00 Total Disbursed (Closed) 331.74 of w hich has been repaid 32.03 Total Disbursed (Active + Closed) 448.73 of w hich has been repaid 32.03 Total Undisbursed (Active) 96.76 Total Undisbursed (Closed) 0.00 Total Undisbursed (Active + Closed) 96.76 Active Projects Difference Between Last PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements a/ Development Implementation Project ID Project Name Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Rev'd Objectives Progress P121514 S Financial Sector Support TA Project S 2011 4 3.561594 0.2923077 P086801 MS SL-Bumbuna Env. and Social SIL (FY05) MS 2005 22 7.522187 -2.628939 -2.62894 P113757 S SL-Decentr. Serv. Del. Program (FY10) S 2010 20 0.348689 0.2286256 P094307 MS SL-GEF Biodiversity Conservation Project MS 2010 5 3.933918 2.3089179 P115836 S SL-GEF Wetlands Conservation (FY11) MS 2011 1.8 1.5 P078389 SL-IDP Transp (FY06) S S 2006 55 13.51465 -0.606357 9.380485 P099357 S SL-Mineral Sector Technical Assistance S 2010 8 5.339579 0.5183787 P108069 S SL-Public Financial Management TAL (FY09 S 2009 4 2.674543 1.5982537 P096105 S SL-Rural Dev & Priv Sec Dev SIL S 2007 50 23.73583 2.554173 2.444173 P121052 S SL-Youth Employment Support (FY10) S 2010 20 14.27326 1.6607959 P119355 # SL:Decentralized Service Delivery Prog 2 # 2012 26 25.79198 P121056 # SL:GRGC-3 Suppl.Credit (Crisis Window) # 2010 7 West Africa Agric. Prod. P122065 Program (WAAPP-1C) S 2012 83.8 3A-West Africa Fisheries P106063 Phase 1 MS 2010 97.3 3A-West Africa Fisheries P108941 GEF (FISH) MS 2010 10 31: West Africa Reg. P116273 Ccomm Infrast. Prog. S 2011 56.6 Overall Result 7 456.7 6.8 102.1962 5.6261567 9.195719 60 Annex 13 (cont.) - Regional Projects Total Project Countries / Comm Total Project Name TTL CMUs Effective Closing Undisb ID Institutions Amt Disb Bal West Africa TOURE Benin, Niger, AFCW1, 8/1/2011 6/30/2016 83.8 2.5 81.7 Agric Prod Gambia, Sierra AFCW3, Progrm Leone, Togo, Liberia AFCF1, P122065 (WAAPP-1C) AFCF2 3A-West VIRDIN Cape Verde, Liberia, AFCW1, 4/19/2010 12/31/2017 97.3 7.3 89.7 Africa Senegal, Sierra AFCF1 Fisheries - Leone P106063 Phase 1 3A-West VIRDIN Cape Verde, Liberia, AFCRI, 4/19/2010 12/15/2014 10 0.8 9.2 Africa Sierra Leone, Sub- AFCW1, Fisheries GEF Regional Fisheries AFCF1 P108941 (FISH) Commission 31:West Africa AMPAH Liberia, Sierra Leone AFCW1 4/29/2011 09/30/2015 56.6 35.4 21.6 Reg. Comm. P116273 Infrast. Progr 61 Annex 14 – Donor Partnership in Sierra Leone 1. According to the latest figures from the Ministry of Finance & Economic Development (MoFED), Sierra Leone received about $351.87 million in development partner (DP) support in 2011. About 76% percent of this came from five development partners – the World Bank, DFID, the EC, the UN system and the United States. There do seem to be fluctuations in the aid flows from various DPs. World Bank support represented about 22% of the total aid volume in 2011. Budget support, project support and Technical Assistance remain the main channels of support from DPs. There is a significant amount of aid resources flowing through off-budget channels, an area, which will require further attention. It is difficult to estimate future aid flows into Sierra Leone, but major increases are unlikely to happen given the current global economic context. The nature and levels of bilateral support from the BRIC countries, especially China, have increased in recent years. During the IDA16 period, there has been an increase in World Bank support based on continued improvements in the CPIA scores. Nonetheless, as stated in the main text of the report, the increase in private flows is likely to be an increasingly important source of financing towards the growth and development needs of the country. Development Assistance to Sierra Leone 2010-2011 Disbursed (million US$) Donor Agency 2010 2011 African Development Bank (AfDB) 24.22 Department for International Development (DFID) 85.18 67.54 European Commission (EC) 80.40 60.16 United States 21.62 World Bank (WB) 91.73 77.31 United Nations (UN) 54.91 39.66 Aid flows (Top five Aid Agencies) 336.44 266.29 Total Aid flows (All Aid Agencies) 394.01 351.87 Source: Development Assistance Database, GoSL 2. Aid coordination efforts present a mixed picture. The Multi Donor Budget Support (MDBS) group is working quite coherently and holds a joint and structured dialogue with the government. The Group conducts a joint annual Performance Assessment Framework (PAF) under its Agreement, which provides the basis for agreed fiscal, policy and institutional actions underpinning budget support. The MDBS process is now increasingly being led by MoFED, although there is scope for strengthening coordination within government on budget support issues, principally between MoFED and other parts of government, which have a role to play in meeting the PAF indicators. As stated in the CAS Progress Report, the likely economic transformation in the country would require the MDBS and IMF programs to be increasingly aligned to the new policy and reflect the institutional challenges faced by Sierra Leone. Beyond budget support, the UN system is well-coordinated with a joint UN Vision supporting government efforts. The coordination between the UN and IFIs is also a strong point of DP coordination efforts in the country. Given the relatively small number of DPs in the country, 62 harmonization and alignment efforts have been relatively less demanding to date, in terms of process, but there is considerable scope for strengthening DP coordination efforts in order to strengthen the delivery of development results. Coordination efforts at the sector level present a mixed picture, with health and education being relatively good examples of sector-level coordination. In the health sector, a Compact was signed recently between the government and DPs, which is the first such sector-level effort in Sierra Leone. In the education sector, there is an ongoing dialogue between the government and DPs and an annual joint review of progress and priorities in the sector. These practices in the health and education sectors might hold some interesting lessons for other sectors, and going forward MoFED may wish to consider replicating them in other sectors. 3. The Development Partners Committee (DEPAC) has held meetings on a quarterly basis, including an annual meeting chaired by His Excellency, the President of Sierra Leone. These meetings provide a valuable opportunity to discuss high-level development priorities and agree on priority actions to be taken jointly by the government and donors. The DEPAC also provides a good opportunity for non-traditional DPs to participate in wider aid coordination efforts. Going forward, there will be scope to strengthen linkages between DEPAC and sector-level groups, so that DEPAC provides sector groups with an opportunity to share best practices. Government and DP efforts are currently being coordinated for the preparation of PRS3. Experiences from other countries suggest that there may be scope for PRS3 preparation to be less demanding in terms of process and coordination, while rebalancing efforts to focus on substantive policy choices and options facing the country. 4. Sierra Leone is committed to the implementation of the Principles of the Paris Declaration on Aid Effectiveness. This commitment has led to the country‘s participation in a number of OECD DAC surveys including the 2011 joint Paris Declaration and Fragile States Principles Survey. The 2011 joint survey revealed that Government ownership of the Agenda for Change is strong and that there is a rising level of donor confidence as Sierra Leone develops. The country is one of only a few developing countries to have a set of coherent and well thought-out policy documents addressing the complex inter-relationships between political, security and development imperatives. Alignment has increased significantly especially by the MDBS partners and the UN agencies. A more strategic and sustained approach is needed to strengthen parliament‘s capacities to assume its constitutional role and fulfill civil society‘s desire to engage in more sustained political dialogue with government. Harmonization is slowly improving but coordination at decentralized levels needs to improve. Sustaining decentralization and devolution in Sierra Leone will be important peace building and state building activities, in the years ahead. Fully empowering the GoSL to manage its revenue and to account for it to both donors and to the citizens of Sierra Leone is an essential step that must be taken. Aside from the formal mechanisms, well-established informal networks have emerged which continue to facilitate coordination and information-sharing. Management for results is slowly improving but remains weak at project level and the gap between planning and implementation remains wide. Procurement systems still remain a challenge and disparities created by salary top-ups and parallel implementation units (PIUs) complicate civil service reform. Preventing conflict in Sierra 63 Leone will require dealing with traditional regional rivalries and focusing on youth unemployment. 5. Sierra Leone is a pilot country for the G7+ Group on Fragile States and Situations. Initial discussions are taking place between government and partners about what being a pilot country will really involve. This presents another opportunity for Sierra Leone to strengthen its efforts on aid coordination and aid effectiveness. One opportunity for implementing the G7+ New Deal may be for the government and partners to consider signing a Compact, after the preparation of PRS3 in 2013, which could form the basis for strengthening further aid effectiveness and delivery of results. This may also be an opportunity to consider a better division of labor between DPs, as a way of strengthening selectivity and avoiding the problem of some sectors having a large number of DPs, while others have too few. The government may wish to consider useful lessons that may be learned from other African countries regarding a sharper division of labor amongst DPs. 64 65 66 IBRD 33478 SIERRA LEONE SELECTED CITIES AND TOWNS MAIN ROADS DISTRICT CAPITALS RAILROADS NATIONAL CAPITAL DISTRICT BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 13°W 12°W 11°W GUINEA To Ouré-Kaba 10°N 10°N To To Faranah Kindia Falaba s. Yana Yana Mon go a Mt ar ies W Kabala arc a ra Bendugu t Sc W KOINADUGU GUINEA Grea Kamakwie i S el Fadugu To Bagbe Kamaron Forecariah Madina Junction BOMBALI Bintimani ts. KAMBIA (1948 m) M Kurubonla cies Pendembu a Kambia m car Lo le S Batkanu Alikalia Bumbuna Litt 9°N 9°N Mange Gbinti Makeni Binkolo Kayima ana Pamp Port Port Loko Tefeya Tefeya Lunsar Magburaka KONO Matotoka Lungi PORT LOKO Yengema Yengema ills l Pepel R oke Sefadu T O N K O L I L I Masingbi ri H FREETOWN Masiaka Njaiama- Sewafe Go Gandorhun Koindu Yonibana Yonibana Yele Yele Songo oa WESTERN M To Mongeri Kolahun Waterloo Waterloo Buedu AREA F.R. F.R. Kailahun Panguma Rotifunk Moyamba Dambara KAILAHUN Banana Islands Yawri BO KENEMA Pendembu Bay M O YA M B A YA Mano Lago 8°N Bo 8°N Daru g Sembehun Jon Shenge Blama Kenema wa Se Kribundu LIB E R I A a Sherbro Mo Joru Momaligi Sumbuya Turtle Sherbro Matru Islands Island Bonthe Potoru B O N TKH E ittam Pujehun PUJEHUN Zimmi o ATLANTIC OCEAN Lake Mabesi M an Lake Fairo Mape SIERRA 7°N LEONE Sulima To Monrovia 0 20 40 60 Kilometers 0 20 40 50 Miles This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 12°W 11°W NOVEMBER 2004