Document of The World Bank Report No: ICR00004100 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-51910, IDA-53410, IDA-57110) ON A SERIES OF DEVELOPMENT POLICY CREDITS IN THE TOTAL AMOUNT OF SDR 91.4 MILLION (US$135 MILLION EQUIVALENT) TO THE REPUBLIC OF SENEGAL FOR THE FIRST, SECOND AND THIRD GOVERNANCE AND GROWTH SUPPORT CREDITS July 26, 2017 Macroeconomics and Fiscal Management Global Practice AFCF1Country Management Unit Africa Region SENEGAL GOVERNMENT FISCAL YEAR January 1 to December 31 CURRENCY EQUIVALENTS (Exchange Rate Effective March 8, 2017) Currency Unit = CFA Franc 1.00 = US$ 0.00161 US$ 1.00 = 617 ABBREVIATIONS AND ACRONYMS APIX Agence pour la Promotion de l’Investissement et des Grands Travaux (Agency for Investment Promotion and Large Projects) CPS Country Partnership Strategy DPC Development Policy Credit DPEE Direction de la Prévision et des Etudes Economiques (Department of Forecasting and Economic Studies, Ministry of Economy, Finance and Planning) GDP Gross Domestic Product GGSC Governance and Growth Support Credit GWH Gigawatt hours HOGGY Hôpital Général de Grand Yoff (General Hospital of Greater Yoff) HR Human resources ICRR Implementation Completion Report ICT Information and Communication Technology IDA International Development Association LFI Loi des Finances Initiale (initial budget law) LFR Loi des Finances Rectificative (revised budget law) MEFP Ministry of the Economy, Finance and Planning M&E Monitoring and Evaluation OFNAC Office national pour la Lutte contre la Fraude et la Corruption (National Office for the Fight against Fraud and Corruption) PDO Program Development Objective PRSC Poverty Reduction Support Credit PSI Policy Support Instrument SAED Société nationale d’Aménagement et d’Exploitation des Terres du Delta du Fleuve Sénégal (Company for the Development of the Senegal River delta.) SDR Special Drawing Rights SENELEC Société nationale d’Electricité (National Electricity Company) TTL Task Team Leader UEMOA/ Union Economique et Monétaire Ouest Africaine/West African Economic and WAEMU Monetary Union UK United Kingdom WB The World Bank Vice-President: Makhtar Diop Country Director: Louise Cord Senior Global Practice Director: Carlos Felipe Jaramillo Practice Manager: Lars Christian Moller Project Team Leader: Paolo Zacchia ICR Team Leader: Julio Ricardo Loayza ICR Primary Author: Philip English SENEGAL FIRST, SECOND AND THIRD GOVERNANCE AND GROWTH SUPPORT CREDITS P128284, P126470, P150976 CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Program Performance in ISRs H. Restructuring 1. Program Context, Development Objectives and Design ............................................ 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 7 3. Assessment of Outcomes .......................................................................................... 14 4. Assessment of Risk to Development Outcome ......................................................... 19 5. Assessment of Bank and Borrower Performance ..................................................... 19 6. Lessons Learned........................................................................................................ 22 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 24 Annex 1: Bank Lending and Implementation Support/Supervision Processes Annex 2: Beneficiary Survey Results Annex 3: Stakeholder Workshop Report and Results Annex 4: Summary of Borrower's ICR and/or Comments on Draft ICR Annex 5: Comments of Cofinanciers and Other Parners/Stakeholders Annex 6: Prior Actions and their Status Annex 7: List of Supporting Documents MAP A. Basic Information Program 1 SN- First Governance Country Senegal Program Name and Growth Support Project Program ID P128284 L/C/TF Number(s) IDA-51910 ICR Date June 30, 2017 ICR Type Core ICR GOVERNMENT OF Lending Instrument DPL Borrower SENEGAL Original Total XDR 35.80M Disbursed Amount XDR 35.80M Commitment Implementing Agencies n.a. Cofinanciers and Other External Partners n.a. Program 2 SN- Second Country Senegal Program Name Governance and Growth Support Credit Program ID P126470 L/C/TF Number(s) IDA-53410 ICR Date June 30, 2017 ICR Type Core ICR GOVERNMENT OF Lending Instrument DPL Borrower SENEGAL Original Total XDR 19.60M Disbursed Amount XDR 19.60M Commitment Program 3 Senegal-Third Country Senegal Program Name Governance and Growth Support Credit Program ID P150976 L/C/TF Number(s) IDA-57110 ICR Date June 30, 2017 ICR Type Core ICR GOVERNMENT OF Lending Instrument DPL Borrower SENEGAL Original Total XDR 36.00M Disbursed Amount XDR 36.00M Commitment B. Key Dates SN- First Governance and Growth Support Project - P128284 Revised / Actual Process Date Process Original Date Date(s) Concept Review: 07/24/2012 Effectiveness: 12/28/2012 Appraisal: 11/07/2012 Restructuring(s): Approval: 12/20/2012 Mid-term Review: Closing: 03/31/2014 03/31/2014 SN- Second Governance and Growth Support Credit - P126470 Revised / Actual Process Date Process Original Date Date(s) Concept Review: 09/25/2013 Effectiveness: 12/23/2013 Appraisal: 10/31/2013 Restructuring(s): Approval: 12/19/2013 Mid-term Review: Closing: 03/31/2015 03/31/2015 Senegal-Third Governance and Growth Support Credit - P150976 Revised / Actual Process Date Process Original Date Date(s) Concept Review: 07/16/2014 Effectiveness: 08/15/2015 07/31/2016 Appraisal: 06/09/2015 Restructuring(s): Approval: 07/23/2015 Mid-term Review: Closing: 07/31/2016 07/31/2016 C. Ratings Summary C.1 Performance Rating by ICR Overall Program Rating Outcomes Moderately Unsatisfactory Risk to Development Outcome Moderately Satisfactory Bank Performance Moderately Unsatisfactory Borrower Performance Moderately Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Overall Program Rating Bank Ratings Borrower Ratings Moderately Moderately Quality at Entry Government: unsatisfactory unsatisfactory Implementing Quality of Supervision: Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Moderately Overall Borrower Moderately Performance unsatisfactory Performance unsatisfactory C.3 Quality at Entry and Implementation Performance Indicators SN- First Governance and Growth Support Project - P128284 Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at any Quality of No None time (Yes/No): Supervision (QSA) DO rating before Moderately Closing/Inactive status Satisfactory SN- Second Governance and Growth Support Credit - P126470 Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at any Quality of No None time (Yes/No): Supervision (QSA) DO rating before n.a. Closing/Inactive status Senegal-Third Governance and Growth Support Credit - P150976 Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at any Quality of No None time (Yes/No): Supervision (QSA) DO rating before n.a. Closing/Inactive status D. Sector and Theme Codes SN- First Governance and Growth Support Project - P128284 Original Actual Major Sector Public Administration Central Government (Central Agencies) 29 29 Education Other Education 14 14 Tertiary Education 14 14 Health Health 14 14 Energy and Extractives Energy Transmission and Distribution 29 29 Major Theme/Theme/Sub Theme Human Development and Gender Health Systems and Policies 14 14 Health System Strengthening 14 14 Private Sector Development ICT 22 22 ICT Solutions 22 22 Public Sector Management Public Administration 22 22 Administrative and Civil Service Reform 14 14 Transparency, Accountability and Good Governance 22 22 Public Finance Management 22 22 Public Expenditure Management 22 22 Urban and Rural Development Rural Development 7 7 Rural Infrastructure and service delivery 7 7 SN- Second Governance and Growth Support Credit - P126470 Original Actual Major Sector Public Administration Central Government (Central Agencies) 38 38 Education Tertiary Education 12 12 Health Health 13 13 Energy and Extractives Other Energy and Extractives 25 25 Industry, Trade and Services Other Industry, Trade and Services 12 12 Major Theme/Theme/Sub Theme Human Development and Gender Health Systems and Policies 14 14 Health System Strengthening 14 14 Private Sector Development Business Enabling Environment 25 25 Regulation and Competition Policy 25 25 Public Sector Management Public Administration 22 22 Administrative and Civil Service Reform 14 14 Municipal Institution Building 13 13 Transparency, Accountability and Good Governance 22 22 Public Finance Management 22 22 Public Expenditure Management 22 22 Senegal-Third Governance and Growth Support Credit - P150976 Original Actual Major Sector Agriculture, Fishing and Forestry Other Agriculture, Fishing and Forestry 10 10 Public Administration Other Public Administration 30 30 Education Other Education 20 20 Health Health 10 10 Industry, Trade and Services Other Industry, Trade and Services 30 30 Major Theme/Theme/Sub Theme Private Sector Development Business Enabling Environment 25 25 Investment and Business Climate 30 30 ICT 22 22 ICT Solutions 22 22 Public Sector Management Public Administration 22 22 Transparency, Accountability and Good Governance 22 22 Public Finance Management 22 22 Public Expenditure Management 22 22 E. Bank Staff SN- First Governance and Growth Support Project - P128284 Positions At ICR At Approval Vice President: Makhtar Diop Makhtar Diop Country Director: Louise Cord Vera Songwe Practice Lars Christian Moller Miria Pigato Manager/Manager: Mamadou Ndione and Philip Task Team Leader: Paolo Zacchia English ICR Team Leader: Julio Ricardo Loayza ICR Primary Author: Philip English SN- Second Governance and Growth Support Credit - P126470 Positions At ICR At Approval Vice President: Makhtar Diop Makhtar Diop Country Director: Louise Cord Vera Songwe Practice Lars Christian Moller Miria Pigato Manager/Manager: Task Team Leader: Paolo Zacchia Philip English ICR Team Leader: Julio Ricardo Loayza ICR Primary Author: Philip English Senegal-Third Governance and Growth Support Credit - P150976 Positions At ICR At Approval Vice President: Makhtar Diop Makhtar Diop Country Director: Louise Cord Vera Songwe Practice Lars Christian Moller Seynabou Sakho Manager/Manager: Philip English and Jean Michel Task Team Leader: Paolo B. Zacchia Marchat ICR Team Leader: Julio Ricardo Loayza ICR Primary Author: Philip English F. Results Framework Analysis Program Development Objectives (from Program Document) The Program Development Objective is to support the Government’s efforts to improve economic governance, and promote growth through private sector development. Revised Program Development Objectives (as approved by original approving authority) No change. Indicator(s) SN- First, Second and Third Governance and Growth Support Credits – P128284, P126470, P150976 Original Actual Value Target Values Formally Baseline Achieved at Indicator (from Revised Value Completion or approval Target Values Target Years documents) 1. Percentage of holders of public office defined in the asset 52% 3 persons 100% 100% declaration law who have made a as of May 2016 declaration of assets Comment: Target 52% achieved (Source: OFNAC Annual Report). Unlikely to have exceeded 60% by end 2016. 2. Delay in the publication of the Audit Court annual report after 34 months 12 months 12 months 18 months the year of the report Comment: Target 73% achieved (The 2014 report was only published in June 2016). 3. Budget Credibility for Basic Education wage and salaries >110 100 100 108 (Ratio executed to approved budget) Comment: Target only 20% achieved (The revised budget in the 2016 LFR has been used to approximate final spending. The total operating budget has been used since disaggregated data for wages and salaries was not available and in any case wages account for most operating expenditures. Note that the LFR operating budget was only 2.3% above the LFI budget in 2015, so there appears to have been some backsliding. (Source: Ministry of Economy, Finance and Planning website)). 4. Budget Credibility for University Education (Ratio 133 110 <105 107.5 executed to approved budget) Comment: Target 91% achieved (Despite considerable progress. Once again, the 2016 LFR operating budget was compared to the 2016 LFI operating budget. Investment spending is not considered since the objective was to improve management of the operating budget. Note, however, that the 2015 figure was 116.6. Even though the decreasing trend is appropriate, it would be good to have one more year to confirm that the progress has been sustained. (Source: Ministry of Economy, Finance and Planning website)) 5. Share of girls in the total number of students receiving 35% 40% 40% 36.7% scholarships (percent) Comment: Target 34% achieved. (Source: Education TTL and focal point, based on Ministry of Education information) 6. Hospital efficiency index 79.54 85 85 90 (2015) Comment: Target surpassed. (Source : Consultant’s report, Mesure de la Performance des Ressources Humaines dans le Secteur de la Santé, Dec. 2016) 7. Percentage of assisted births 65% 70% 70% 53% (2015) Comment: No progress made. (No progress has been made, but the decline is surprising. No estimate for 2016 was available. (Source: Enquête de la Démographie et la Santé) ) 8. Percentage of subsidized agriculture inputs allocated 0% 90% 90% 0% through new e-platform Comment: No progress made. (No progress on the indicator, but work has proceeded on designing and developing the system, which is ready to be implemented. Minister of Agriculture received the electronic platform and is currently preparing it to upload the data on allocation before transfer of subsidies can begin. (Source: WB Agriculture TTL and focal point)) 9. Percentage of functioning agencies with a performance 0% 50% 90% 70% contract Comment: Target 70% achieved (The action plan for the rationalization of agencies proposed to reduce the number from 44 to 30. While there may now be more agencies than this, we accepted 30 as the appropriate number of agencies needing performance contracts. By end 2015, 13 had such contracts, with another 8 planned for 2016. There should therefore be 21 out of 30 agencies covered by end 2016, or 70%. Note that another 16 organizations were expected to finalize performance contracts by the end of 2016, and 30 more contracts were scheduled for 2017 – which should cover the remaining agencies. (Source: Technical committee for restructuring and Directorate for the Para public Sector, Ministry of Finance) 10. The number of government programs with results framework 0 5 10 10 approved by the M&E Unit Comment: Achieved (Source: Technical committee for restructuring and Directorate for the Para public Sector, Ministry of Finance) 11. Undistributed energy due to 250GWH 10GWH 10GWH 34GWH load shedding Comment: Target 90% achieved (Source: World Bank energy TTL and focal point) 12. Government Subsidies to the CFAF105 CFAF50 CFAF50 electricity sector for tariff CFAF76 bn. billion billion billion compensation Comment: Target 53% achieved. (Actual subsidies were eliminated by 2016 thanks to the fall in oil prices. But in order to assess the progress made in reforms, an estimate has been made of the level of subsidies that would be required if the price of oil had remained at the price of 2012 which was roughly $100/barrel. (Source: World Bank energy team)) 13. SENELEC’s debt to equity 3 <1 <1 0.9 ratio Comment: Achieved. (Source: World Bank energy team) 14. Paying taxes: Number of 59; 37; 37; 58; payments and time required 666 hours 318 hours 318 hours 441 hours Comment: No progress on first indicator. Second target was 65% achieved. (Source: 2017 Doing Business Report) 15. Registering Property: Time 122 days; 65 days; 65 days; 71 days; required and cost as % of 20% 12% 12% 10.2% property value Comment: First target 89% achieved; second target surpassed by 22%. (Source: 2017 Doing Business) 16. Construction permits: Time 210 days 150 days 150 days 202 days required Comment: Target only 13% achieved. (Source: 2017 Doing Business) 17. Number of arrivals by air 868,649 875,000 875,000 948,000 Comment: Achieved. (Source : DPEE, Point mensuel de conjoncture) G. Ratings of Program Performance in ISRs SN- First Governance and Growth Support Project - P128284 Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 10/28/2013 Moderately Satisfactory Satisfactory 55.18 H. Restructuring (if any) Not applicable. 1. Program Context, Development Objectives and Design 1.1 Context at Appraisal 1. In the decade since 1995, Senegal enjoyed robust per capita GDP growth but, starting in 2006, the economy was buffeted by a series of domestic and external shocks. Real annual gross domestic product (GDP) growth stood at only 3.3 percent in 2006-11, down from an average of 4.4 percent in 2000-05. Sharp agriculture decline over 2006-7 was followed by the onset of the global financial crisis in 2008 and its deepening in 2009. Continued electricity shortages further contributed to the general slowdown of the country’s economic activity. Real GDP growth slowed again in 2011 to 2.6 percent, due to energy shortages and a large contraction in agricultural output. Weaknesses in fiscal policy and public financial management were compounded by the fiscal costs of untargeted subsidies for electricity and food. As a result, there was a significant increase in borrowing and the fiscal deficit was projected to rise to 8.1percent of GDP in 2012. 2. After elections judged to be free and fair, a new government under President Macky Sall took power in April 2012 at the head of a multi-party coalition. President Sall faced major challenges. These include restoring trust in the state, after repeated allegations of corruption under the previous regime, as well as urgent popular demand for action on jobs and the high cost of living. However, having run on a platform of restoring macroeconomic balances and reinstating good governance, transparency and accountability, the new president had limited capacity to implement programs due to a large fiscal deficit including huge electricity subsidies. 3. In order to reduce the deficit without affecting public investment, the government needed to rationalize recurrent spending. A number of current expenditure components had increased substantially in past years. For instance, agencies, hospitals and agricultural subsidies were areas in which spending was growing quickly with limited control or accountability, and significant leakages. Similarly, education was among the largest budget expenditure categories, and was consistently overrun during the course of the year. This was particularly true of the university budget, which often led to delays in salaries or scholarships, resulting in social unrest. Consequently, the government was keen to control the growth in current spending and reduce social disturbances. Tackling these issues would also strengthen governance. 4. The new government wished to improve the rate of economic growth and job creation through stronger investment from the private sector. Private investment needed to shift from residential construction and real estate to more productive, job- creating enterprises. To this end, enhancing the investment climate was a high priority for the government as Senegal was lowly ranked on the Doing Business scale, in 166th place. Also, problems in the energy sector were one of the key constraints, as electricity tariffs were among the highest in Africa – despite substantial subsidies –, and frequent power cuts had forced many enterprises to invest in expensive generators. In effect, energy was perceived by most entrepreneurs as one of the major restrictions to investment. 1 5. Finally, there was broad recognition that Senegalese governments have had trouble implementing their various strategies in the past. Technical capacity did not seem to be the problem, even if some ministers of the new government had limited experience in the public sector. In effect, the Senegalese civil service is relatively strong and turnover was relatively low, as senior officials tend to remain in place even under government changes. Non-satisfactory implementation seemed to be related to a lack of accountability which in turn was hampered by the weakness of the monitoring and evaluation system. The new President was well aware of this shortcoming and announced measures to promote performance and social accountability. These included enhancing the linkages between the development strategy and the budget, as well as their transparency1. Previous World Bank support and Rationale for Continued Intervention 6. The proposed program represented a continuation of budget support provided over the previous six years. Most recently, a series of two poverty reduction support credits, PRSC4 (P128284) and PRSC5 (P126470), had supported the government between 2009 and 2011. These had had mixed results but were rated moderately satisfactory in the Implementation Completion and Results Report (ICRR). There was no Country Partnership Strategy in place at the time this new series was designed. However, it became an integral part of the new CPS which was approved in 2013. The new Country Partnership Strategy (CPS) had two pillars – accelerating inclusive growth and creating employment, and improving service delivery – and one foundation – strengthening the governance framework and building resilience. Hence, the Operation was fully aligned with both pillars and with the one foundation. It was felt that the democratic election of a new government offered a crucial opportunity to break with the past and promote more ambitious reforms. In response to the overwhelming demands from civil society for improved governance, the new president had made important commitments. The long-standing mismanagement of the electricity sector, the crisis in higher education and health services, the neglect of rural areas, and the lack of jobs were other prominent themes among voters. The proposed series would launch the adoption of several critical but overdue reforms and support the government in the necessary follow-up over the next two years. These reforms would underpin major projects supported by International Development Association (IDA) in the energy, education, health and agro-business sectors. At the same time, the operation would provide badly-needed financial support at a time when the government has been grappling with unanticipated costs resulting from the 2011 drought. 7. The macroeconomic framework was judged to be adequate at the start of the program and remained so throughout. After steadily rising fiscal deficits under the previous regime, the Macky Sall government committed to reversing this trend and in 2012 the deficit was projected to fall to 5.9 percent from 6.7 percent the previous year – and contrary to the former expectations of a higher deficit. It also continued to implement its 1 In the same sense, President Sall also invited Tony Blair to Senegal to advise him on service delivery. 2 Policy Support Instrument with the International Monetary Fund (IMF), completing the fourth review in October 2012. In 2013, the authorities requested an extension of the IMF program by one year, further demonstrating their commitment to fiscal prudence. The fiscal deficit was projected to decline to 5.4 percent. The authorities maintained this trend, with this deficit falling to 4.9 percent in 2014, 4.7 percent in 2015 and a projected 4.2 percent in 2016. Domestic resource mobilization was the best in the WAEMU region, with taxes exceeding 19 percent of GDP throughout the period. Meanwhile GDP growth responded to the improved macroeconomic management and structural reforms, rising steadily from 2.1 percent in 2011 to 4.7 percent in 2014 and a projected 5.1 percent in 2015. Inflation remained subdued throughout the period. A summary of key economic indicators over the course of the program, as estimated or projected at the time of appraisal of the third operation, is provided in Table 1. Table 1: Senegal: Selected Economic Indicators, 2011-2016 2011 2012 2013 2014 2015 2016 estimated projected projected GDP growth rate (%) 2.1 3.5 3.6 4.7 5.1 5.9 Consumer inflation (%) 2.7 1.3 0.7 -1.1 -0.9 1.5 Fiscal balance/GDP -6.7 -5.9 -5.5 -4.9 -4.7 -4.2 Total revenues/GDP 22.4 23.3 22.7 24.2 24.3 24.2 - Taxes/GDP 18.9 19.2 19.2 19.2 19.3 19.5 Total expenditures/GDP 29.1 29.2 28.2 29.2 29.0 28.4 - Current/GDP 18.1 17.5 17.3 18.1 17.2 16.7 - Capital/GDP 10.5 11.4 11.0 11.1 11.8 11.7 Total public debt/GDP 40.5 43.4 46.6 53.2 55.9 57.6 Source: World Bank Program Documents for GGSC2 and GGSC3. 1.2 Original Program Development Objectives (PDO) and Key Indicators 8. The original overarching objective of the programmatic series was to support implementation of the new government’s reform agenda. The focus of the series was on a set of critical policy actions to support the authorities’ efforts to improve economic governance by strengthening government transparency and accountability, increase public sector efficiency and effectiveness, and promote growth through private sector development. The original PDOs and corresponding indicators were the following: 1a. To improve economic governance by strengthening Government accountability. The key results to be achieved by 2015 were:  The percentage of holders of public office defined in the asset declaration law that make a declaration of assets reaches 100percent. 3  Delay in the publication of the Cour des Comptes annual report after submission to the President decreases to no more than one month. 1b. To increase public sector performance. Key results to be achieved by 2015 were:  Credibility of the budget for wages and salaries in basic education is restored as the ratio of executed to budget spending decreases from 110 percent in 2011 to 100 percent.  The ratio of the executed university recurrent budget to the approved budget decreases from 133 percent to 100±5 percent.  The share of girls in the total number of students receiving scholarships increases from 35 percent in 2011 to 40 percent.  The Hospital efficiency index increases from 74 percent in 2010 to 85 percent.  The percentage of assisted births increases from 65 percent in 2011 to 70 percent.  Percentage of agencies non-compliant (without performance contract) with the 2009 law reduced from 100percent to 50percent.  The number of government programs with results framework approved by the Monitoring and Evaluation (M&E) Unit increased from 0 to 5. 2. To promote growth through private sector development. Key results to be achieved by 2015 were:  The undistributed energy due to load shedding decreases from 250 gigawatt hours (GWH) in 2011 to 10 GWH.  Government subsidies to the energy sector decrease from CFAF99 billion (1.4 percent of GDP) in 2012 to CFAF50 billion (0.6 percent of GDP).  SENELEC’s debt to equity ratio decreases from 3 in 2011 to 1.  Time, cost, and number of procedures in the 3 selected DB indicators reduced: - Paying taxes: Number of payments reduced from 59 to 37 Time required reduced from 666 hours to 318 hours. - Registering Property: Time required reduced from 122 days to 65 days. Cost reduced from 20percent of property value to 12percent. - Getting Electricity: Number of procedures reduced from 8 to 6. Time required reduced from 125 days to 100 days. Cost reduced from 5625percent of per capita income to 4500percent.  Increase in the number of hectares of land classified in the domain privé des collectivités locales, with baseline and target to be determined.  Increase in the number of hectares provided with irrigation and drainage services, with baseline and target to be determined. 1.3 Revised PDO and Key Indicators, and Reasons/Justification 9. The Program Development Objective in the Third Governance and Growth Support Credit (GGSC) was modified to make it more precise and aligned with the pillars of the operation. The PDO of the Development Policy Credit (DPC) series was as follows: (i) to support the Government’s efforts to improve economic governance, and (ii) promote growth through private sector development. The first PDO pillar focused on the management of public resources and has two parts: government accountability and public 4 sector performance. The second PDO pillar concerned growth and private sector development. More specifically, the PDO pillars were: 1a) to improve economic governance by strengthening accountability systems; 1b) to promote better governance and efficiency in the education, health and agriculture sectors, and within agencies, and strengthen monitoring and evaluation; and 2) to enhance private sector development through energy sector reforms, and improvements in the investment climate, including in the tourism sector. 10. Minor changes in the results framework were made as summarized in Table 2. The end year for targets was pushed back to 2016 to reflect the delay in the approval of PRSC3 to 2015. Table 2: Changes in Indicators and Targets Original Indicator and Final Indicator and Target Reasons for Change Target Pillar 1: Government accountability and public sector performance Delay in the publication of the Delay in the publication of the The original indicator did not Cour des Comptes annual report Audit Court annual report after capture potential delays in after submission to the President the year of the report reduced submission to the President. decreases to no more than one from 34 months to 12 months. month The Hospital efficiency index The Hospital efficiency index New data for 2012 baseline increases from 74 percent in 2010 increases from 79.54 percent in became available. to 85 percent 2012 to 85 percent Percentage of agencies non- Percentage of agencies with a Made more ambitious to reflect compliant (without performance performance contract increased the fact that the 2009 law contract) with the 2009 law from 0 to 90percent. already called for all agencies to reduced from 100percent to have a performance contract. 50percent. The number of government The number of government Target raised to better reflect programs with results framework programs with results progress in the reform. approved by the M&E Unit framework approved by the increased from 0 to 5. M&E Unit increased from 0 to 10. Increase in the number of hectares Dropped and replaced by: Focus of the World Bank provided with irrigation and Percentage of subsidized program was more on input drainage services, with baseline agriculture inputs allocated distribution than on irrigation and target to be determined through new e-platform and a new prior action was increased from 0 to 90 percent introduced in this area in GGSC3. Increase in the number of hectares Dropped. It became clear that land reform of land classified in the domain was going to take much longer privé des collectivités locales, than expected. with baseline and target to be determined. Pillar 2: Private sector development Getting Electricity: Number of Construction permits: Time Construction permits became a procedures reduced from 8 to 6. required reduced from 210 days higher priority for the Time required reduced from 125 to 150 days. government and the private days to 100 days. sector. Cost reduced from 5625percent of per capita income to 4500percent. 5 Number of arrivals by air Added to reflect the addition of increased from 868,649 in 2012 tourism sector reforms in to 875,000. GGSC3. The number of arrivals had fallen to 855,602 in 2014 due to Ebola. 1.4 Original Policy Areas Supported by the Program: 11. The original policy areas supported by the DPC series were: a) improving economic governance by strengthening Government accountability; b) increasing public sector performance; and c) promoting growth through private sector development. All three constituted key elements of the National Strategy for Economic and Social Development.  Improving economic governance by strengthening Government accountability: The reforms supported by the first operation focused on a draft transparency law consistent with the WAEMU guidelines, and a draft law strengthening the independence of the general auditor. These were to be followed by approval and implementation of a law on asset declaration, and further measures to improve the effectiveness of the general auditor.  Increasing public sector performance: Reforms focused on improving financial management in education and health, expanding in the second and third operations to include agency reform and monitoring and evaluation. In basic education, the emphasis was on personnel management, while in tertiary education, the focus was on a new financial regime to capture fees being earned through external services. In the health sector, performance contracts were supported across a growing number of hospitals. Agency reform concentrated on a rationalization plan and performance contracts for those not being closed. In M&E, the series supported the creation of a unit in the President’s office to improve implementation of policy priorities. These measures were intended to enhance the efficiency, transparency and performance in key sectors while generating fiscal savings which could be reallocated to more pro-poor programs and public investment.  Promoting growth through private sector development. The initial focus was on improving the efficiency and sustainability of the energy sector, by way of a new Sector Development Policy Letter and Action Plan, and the financial and operational restructuring of SENELEC, the state-owned electricity company. This was to be followed by signature and implementation of a performance contract for SENELEC, and preparation of a new electricity law. Better energy sector management would improve electricity service delivery and support economic growth. Subsequent operations in the series were expected to improve the investment climate by supporting Doing Business reforms in three areas – taxes, property registration and access to electricity. Agriculture was to be supported through land reform and irrigation maintenance. 6 1.5 Revised Policy Areas 12. These policy areas were largely maintained throughout the series. However, land reform was dropped when it was realized that it was going to take much longer than expected. It was replaced in the final operation with a measure to enhance targeting in agricultural subsidies in order to increase efficiency in the use of fiscal resources. In the area of the investment climate, one of the Doing Business reforms was changed from improving access to electricity to reducing delays in obtaining construction permits, which emerged as a higher priority for the private sector and the government. In addition, the third operation added the removal of barriers for tourism, to help the sector cope with the Ebola shock. 1.6 Other significant changes 13. The final operation was increased by US$20 million at the preparation stage. This change was introduced in response to the government’s request for help in coping with the Ebola crisis which had seriously affected the tourism sector. Consequently, reforms were added in the tourism sector. Approval and disbursement of the third operation was delayed by six months to allow the authorities time to complete key reforms in asset declaration and M&E. 2. Key Factors Affecting Implementation and Outcomes 2.1 Program Performance 14. The programmatic series consisted of three single-tranche Development Policy Credits disbursed upon effectiveness, in the total amount of SDR91.4 million or US$135 million. GGSC3 was increased by US$20 million to help the authorities cope with the Ebola crisis. Table 3: Key Dates of the DPC series Operation Approval Effectiveness Disbursed Amount Closing Date Date SDR millions Date GGSC 1 12/20/2012 12/28/2012 35.8 03/31/2014 GGSC 2 12/19/2013 12/23/2013 19.6 03/31/2015 GGSC 3 7/23/2015 08/15/2015 36.0 07/31/2016 15. Macroeconomic management and performance has improved over the time period covered by this budget support series. The fiscal deficit fell to 4.2 percent in 2016 as projected. GDP growth exceeded expectations, rising to 6.5 percent in 2015 and remained above 6 percent in 2016. Debt to GDP continued to rise but the rate of growth slowed and the risk of debt distress remains low, according to the IMF-WB Debt Sustainability Analysis. The authorities are committed to further reductions in the fiscal deficit in order to reach the WAEMU target of 3.0percent of GDP by 2018 and to prevent 7 debt-to-GDP rising above 60 percent. In addition, efforts to control current expenditures allowed the government to increase public investment, despite the falling overall fiscal deficit. Governance indicators have also improved (see section 3.2). 16. The program should help control the fiscal deficit in the long-term though its contribution in the short-term was probably minimal. Improvements in the education human resources data base helped reallocate teachers and reduced the need for additional recruits. However, the failure to link this data base to the payroll system at the Ministry of Finance delayed further gains. Changes in the criteria for scholarships and the financial regime for universities to incorporate external fee-based services helped control the growth in the higher education budget. Agency rationalization did not result in short-term savings due to the limited progress made and the required compensation for laid-off staff. If pursued, it will have longer-term benefits. Similarly, the gains from the e-platform for the distribution of subsidized agricultural inputs depend on its implementation. Reforms in the electricity sector are slowly reducing costs, but the main factor in eliminating subsidies has been the fall in world oil prices. In general, the IMF program played a major role in supporting deficit reduction in the short-term. 17. There has been no slippage in the reforms supported by the three operations so far; however, follow-up implementation has lagged. For example, the system for managing subsidized agricultural inputs was still not being used in 2016, despite the sector’s commitment to its eventual application. Rationalization of agencies has proceeded more slowly than expected. The special accountants deployed in key faculties of the University of Dakar are still not reporting to the chief financial officer of the university. In 2016, coordination between the monitoring and evaluation unit established at the Presidency and the finance ministry was still unsatisfactory; the role of the M&E unit probably needs to be reconsidered. The status of all the prior actions is summarized in Annex 3 while the changes in triggers are explained in the following tables. Table 4: Changes in Triggers for GGSC2 GGSC1 Triggers for GGSC2 GGSC2 Prior Actions Explanation Pilar 1: Government accountability and public sector performance Establish effective payroll and HR Postponed to GGSC3 Reform taking longer than control in education by linking expected. HR databases for contractual agents and civil servants and the Payroll Database. Adopt 2013 budget for Adopt 2013 budget for the two Limited to two largest universities and others higher largest universities which are in universities given delays in education institutions which are in compliance with the revised implementation, but compliance with the revised financial regime of the strengthened to capture financial regime of the universities; and adopt new scholarship reforms originally universities. criteria for scholarships expected in year three. Finalize the evaluation of Finalize the evaluation of Modified to reflect the need 100percent of the autonomous autonomous agencies; and for political endorsement of an agencies; and implement approve an action plan including action plan after the evaluation recommendations the closure and merger of some evaluation. including closing agencies that are agencies not considered relevant. 8 Pillar 2: Private sector development Improve Doing Business Improve business climate by i) Modified to clarify the tax indicators in the area of paying enacting a law simplifying reform, and strengthened to taxes (reduction in number of property registration procedures include property registration payments and time to fill forms). and ii) revising its tax code to reform. reduce property taxes and reduce the time required for other tax payments. Adoption by the Council of Dropped. Land reform was going to take Ministers of a roadmap for land much longer than expected. management reform. Table 5: Changes in Triggers for GGSC3 GGSC2 Triggers for GGSC3 Prior Actions Explanation GGSC3 Pilar 1: Government accountability and public sector performance Implementation of the asset The Recipient has operationalized its asset Elaborated to declaration law. declaration system by: (a) approving the related clarify measures implementation decree; (b) allocating needed for appropriate human and financial resources to implementation. the national office for the fight against fraud and corruption (“Office National pour la Lutte contre la Fraude et la Corruption”/”OFNAC”); and (c) ensuring deposition of asset declarations by ministers holding a portfolio to OFNAC. Develop effective follow-up Dropped. Dropped to make of recommendations from the room for other Annual Report of the Audit reforms. Court. Improve payroll and HR The Recipient has strengthened wage bill Modified to reflect controls in education by a) control and human resources in the education delays in linking linking databases of the sector by: (a) creating a system connecting data database to payroll, ministries of education, civil bases of the ministries in charge of education and consequently service and finance; b) and civil service; and (b) preparing the 2015- also in eliminating preparing the 2014/15 2016 recruitment plan for education in fictitious teachers. recruitment plan for education collaboration with the ministry in charge of in consultation with ministry finance. of finance; and c) eliminating ghost and double-counted teachers. Implement the Presidential The Recipient has implemented presidential Strengthened to directives to improve the directives on external revenues earned by include the new utilization of own resources universities through: (a) adoption and governance law, but generated by universities by a) submission to Parliament for enactment of a weakened to reflect adopting an arrêté defining the draft law reforming universities governance the difficulty of utilization of these resources; system; (b) issuance of an Arrêté specifying assigning secondary b) preparing a manual of resource allocation and use of external accountants. procedures; and c) creating revenues; and (c) appointment of accountants in secondary accounting offices key faculties and schools at the University of in key faculties and schools. Dakar, who report to the chief financial officer. Adopt a decree defining a new The Recipient has adopted a new financial Strengthened to financial regime for hospitals, regime for public agencies and establishments, include additional along with necessary arrêtés. and has entered with five additional public performance health institutions into performance contracts contracts, but whose objectives are to increase service supply, weakened to allow 9 improve billing process and control general more time for the costs. necessary arrêtés. Adopt a new e-platform and The Recipient has adopted a mobile phone- Weakened to allow have 1 million farmers based e-platform to distribute subsidized for delays in registered such that at least agricultural inputs in the 2015 crop season. implementing the e- half of subsidized agriculture platform but inputs are allocated through it strengthened to to reduce leakages and include an improve targeting. irrigation measure as originally envisaged. Preparation of a properly Recipient has obtained approval allowing SAED Simplified to costed, funded and time- to enter into multi-annual maintenance contracts streamline the bound action plan for SAED of hydro-agricultural works with private policy matrix and which clearly defines roles contractors and launched a call for bids. reflect need for and responsibilities; sign 2 approval from the multi-year maintenance finance ministry. contracts. Close and merge some The Recipient has launched implementation of Modified to better agencies; and sign a the action plan to restructure autonomous correspond to the Performance Agreement government-owned agencies, by: (a) merging government’s between all remaining certain selected agencies; (b) appointing officers reform agenda. The agencies with a budget over responsible for the liquidation of certain six agencies CFAF1 billion and the selected agencies; and (c) entering with six of covered represented Oversight Institution. the largest agencies into performance contracts most of those with with the objective of clarifying the financial budgets over commitments of the Recipient’s ministry CFAF1 billion. responsible for finance and the related performance targets of agencies concerned Pillar 2: Private sector development Approval by the Council of The Recipient has amended the performance Modified to focus Ministers of the revised contract entered into between the Recipient and on the full electricity investment plan for SENELEC on June 11, 2013 to include implementation of 2014-18; separation of performance-based bonuses and sanctions, and previous prior SENELEC’s accounts has amended the agreement regularizing cross- actions in the between generation, debt entered into between the Recipient and program. transmission and distribution: SENELEC dated November 16, 2012, to and a publicly-available determine the method for the balance allocation. financial model. Improve business climate The Recipient has: (a) issued (i) a decree Modified and indicators in the two areas: 1) reducing the number of days and costs to obtain strengthened to Trading across borders construction permits through the creation of a reflect the (reduce the number of days single window and online processing; and (ii) a authorities’ for importing and exporting) decree determining a new fee schedule for priorities in Doing and 2) Dealing with warehouse inspection; and (b) eliminated the Business indicators. construction permits (reduce minimum capital requirement for creating a new number of days). company. The Recipient has offset the impact of Ebola’s Added to support on the tourism sector by: a) removing entry the authorities’ visas’ fees; b) reducing selected taxes on air request for help in tickets; and c) suspending recovery acts initiated coping with the against hotels with arrears in payment of Ebola crisis. patented and land taxes in 2015. 10 2.2 Major Factors Affecting Implementation: Capacity 18. The program benefited from a strong World Bank field presence and close linkages to on-going projects and economic and sectoral work. All of the policy areas were supported by Task Team Leaders (TTLs) in the field during most of the program, with relatively few changes in personnel. All of the prior actions were related to and supported by investment projects or technical assistance. 19. On the other hand, capacity limitations within the government constrained the effectiveness of the operation. Coordination and following up of the program at the Ministry of Economy, Finance and Planning (MEFP) did not receive full institutional support2. The MEFP agreed to broaden the support supplying additional human resources dedicated to monitoring different sectors and following-up on their reform agendas, but this change did not become effective. World Bank staff were required to make significant efforts with sector ministries and high-level authorities in order to facilitate completion of prior actions, but last-minute scrambles still occurred for the first two operations to permit disbursement before the end of the government’s fiscal year. This persisted over the life of the operation, despite complaints from several partners whose operations were adversely affected by this situation. Design 20. The broad, ambitious design of the program was a key challenge for implementation. It would have been easier for the MEFP to follow-up on the reform agenda if it had been concentrated on fewer sectors, emphasizing those where ownership was stronger, and avoiding sensitive areas where presidential intervention might be required. Three of the reform areas were especially sensitive: asset declaration for public servants, agency rationalization, and the establishment of a central unit to monitor policy priorities. All three were important objectives of the government’s program. But this still made the coordination effort more difficult for the finance ministry. 21. In at least one case, the reform appears to have design flaws, resulting in delays and reduced impact. Following World Bank advice, the M&E unit was based in a small, relatively independent department within the Presidency, an approach partially inspired by the United Kingdom (UK) example. However, this was implemented with minimal input from key internal counterparts, notably the MEFP. Then, the Presidency created a parallel unit monitoring the implementation of the country’s new growth strategy, with an emphasis on priority projects, which reduced the focus on developing the first unit. Furthermore, in many sectors the proposed M&E system competed with others, overloading the limited 2 The unit responsible for following up the budget support program was severely understaffed as the task was primarily the responsibility of a senior advisor, concurrently with other duties. 11 capacity at the ministerial level. 3 Effective systems for monitoring priorities were implemented in at least five sector ministries, thanks to strong support from the World Bank. However, its sustainability remains in question. In retrospect, ampler participation of the MEFP would have helped to strengthen the program design, given its mandate and human resources. Background analysis 22. The program was generally well-supported by background analysis with one notable exception. The reforms in education and health drew on a recent Public Expenditure Review and considerable sector work. The asset declaration reform was informed by an analysis of international experience commissioned specifically for this program. An evaluation of agencies provided the basis for the action plan of agency rationalization. Electricity sector reforms built on years of experience in Senegal. However, the M&E proposal was not based on an assessment of the current situation and that may have contributed to its weak design. Ownership 23. Reforms could have benefited from stronger ownership in the Ministry of Economy, Finance and Planning. For instance, application of the new finance regime for universities was delayed for half a year until a new budget nomenclature was finalized by the MEFP. The agreement with SENELEC on cross-debts did not come into effect for two years due to the absence of an agreement on how to utilize the remaining balance. The link between the education human resource data base and the payroll at the Treasury had to be dropped from the program objectives at least in part due to delays in the payroll department. The effectiveness of agency performance contracts was sometimes jeopardized by failure to live up to the finance ministry’s commitments in terms of budget allocations. 24. Ownership was also an issue in the agriculture and energy sectors. In spite of strong support from the World Bank, implementation of the new subsidized input platform has been delayed due partly to low ownership coupled with unexpected technical challenges. This required weakening the GGSC3 prior action and failure to make any progress on one of the outcome indicators. The energy sector would have benefited from stronger leadership in SENELEC, which did improve following changes in its management. 25. In two areas, where ownership was strong and complexity of reforms was less demanding, implementation went relatively smoothly. One of these areas was 3 ACT for Performance, Diagnostic des dispositifs de suivi-évaluation des politiques publiques au Sénégal, June 2016. 12 investment climate reform, which was spearheaded by APIX. This agency enjoyed strong staff and a clear mandate to improve the country’s Doing Business ranking. It also benefited from the high profile and rigorous deadlines of the Doing Business exercise which pushed these reforms quite independently of the budget support program. The other area of smooth implementation was the health sector where the sector Ministry had an incentive to complete hospital performance contracts because they received additional investment financing in return. However, it is also true that in both cases the required reforms were less technically complex or politically sensitive as other reforms in the program. 26. Evolving high-level leadership further complicated coordination and monitoring. The initial strong commitment to the reforms included in the operation fluctuated over time due to changes of high-level authorities, including the Prime Minister, the key Ministry of Finance and sector Ministries. Risk identification and mitigation 27. Risks were clearly identified but mitigation options were limited. Risks included global economic shocks, regional instability, the challenges posed by maintaining the political coalition, vested interests and the recent history of poor governance, and insufficient political and administrative capacity aggravated by the change in government. It was hoped that electricity sector reforms would mitigate the impact of a spike in oil prices, while improvements in the investment climate would help diversify the economy and reduce its vulnerability. Vested interests would be mitigated by the government’s commitment to a three-year program of reforms and the intensive field-based supervision by the Bank team. Donor coordination would help maintain political support by providing a common message to government. The M&E reform was expected to increase accountability for reforms by focusing the President’s attention on key issues. 28. Mitigation measures were partially effective but might have been given greater attention. Supervision, both at the technical and strategy level, was indeed intense. Regular, frequent meetings were held with the key Ministries and communication was generally good with the Primature and the Presidency. Donor coordination was also given ample attention, and cooperation with the IMF was particularly useful. A joint donor effort was made to change the modality for budget support supervision in the finance ministry. The M&E unit in the Presidency showed initial signs of success. But ultimately the influence of vested interests was probably underestimated. This might have been better addressed by more focus on policy areas with high ownership, better design of the M&E reform, and a willingness to detach disbursement from end-of-year fiscal deadlines. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: Design Rating: Modest 13 29. Many of the indicators chosen were appropriate, but in some cases it would have been better to identify output rather than outcome indicators, in order to strengthen appropriation. This is the case, for instance, for the indicators on gender, basic education, tourism and some related to the energy sector. In effect, these indicators had somewhat weaker links to the corresponding reforms as they reflected the broader progress of the sector. The two gender indicators have the weakest link. Some targets were overly ambitious given the general pace of reform in Senegal, and the complexity of the task at hand. This is true of the investment climate reforms. It was probably unrealistic to expect full compliance with the asset declaration law within 18 months, considering the important political sensibilities involved. Preparing performance contracts with all agencies was particularly difficult since each agency was different and faced a different set of challenges. In addition, each contract had to be negotiated with the corresponding agency. The authorities appear determined to meet all the targets in these areas but it will take more time than initially programmed. In other areas, such as agricultural input distribution, the degree of ownership was lower than initially estimated. Implementation Rating: Substantial 30. The M&E framework remained fairly stable over the course of the program. Of the 17 original indicators, only 3 were dropped (see Table 2). One of those dropped, a Doing Business indicator, was replaced by a different Doing Business measure to reflect government priorities. Another one, in agriculture, was replaced by a different agriculture indicator more aligned with the priorities of the program. The land reform indicator was dropped when this policy area was eliminated from the program. A tourism indicator was added to capture the addition of this policy area in the final year. The targets also remained stable; none were lowered, and two were raised in keeping with the ambitions of the program. Utilization Rating: Negligible 31. There is no indication that the results framework was used as a decision tool. This is not unusual for a DPC series. 2.4 Expected Next Phase/Follow-up Operation: 32. The World Bank will continue to support the Government of Senegal in some of the areas of the DPC series. A new DPC series is under preparation with a narrower focus on energy and ICT, partially building on the energy components of the previous series. The first operation of the series was approved by the Board in June 2017. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 14 Objectives Rating: Substantial 33. The program was strongly aligned to both the country’s priorities and the Bank strategy. For the new government, it was important to improve the country’s governance, its investment climate, and the performance of the energy sector and higher education. The MEFP was particularly concerned by the high level of energy and agriculture subsidies. It was also concerned by the conflictual relationship with the universities which routinely overspent their budgets and required major supplementary allocations late in the year, with the implicit threat of strikes and social unrest if their demands were not met. The program addressed all these issues. The focus on rationalization and performance of agencies supported the government’s PSI program with the IMF. The addition of the tourism sector in the final year of the program was in direct response to the government’s request for help to deal with the impact of the Ebola threat. The program was closely aligned with the Bank’s investment projects and technical assistance and with the Strategy that has been approved later, which focused on governance, growth and service delivery.4 34. Promoting reform in the energy sector implied high risks, given past experience, but neglecting this sector would have been worse. The Bank had worked on this sector off and on for at least 15 years, with little success. A sector adjustment loan had been cancelled after its first disbursement due to lack of progress. However, it was clear that economic progress would be difficult without improvements in the energy sector, given the importance of the sector for private activity, and the frequency of blackouts. Also, no other donor was willing to tackle the tough reforms required. As it turned out, progress was slow but steady, assisted by a large Bank investment project and coordination with IFC. The eventual change in the leadership of SENELEC also helped. On balance, the decision to support reforms in the sector seems to have been worthwhile, and the World Bank proposes to continue this dialogue in the follow-up budget support operation. Design Rating: Modest 35. The chosen areas of reform corresponded closely to the Bank Group’s country strategy, on-going operations, analytical work and technical assistance. The Bank had projects supporting the energy, agriculture, and basic and higher education sectors, with important components to promote reforms, including performance contracts for SENELEC and all universities, as well as changes in financial management. There was also a public financial management project which included support for agency reform and the creation of an M&E/service delivery unit. Prior to the program, the Bank had conducted a public 4 The new CPS was approved in early 2013. 15 expenditure review, with a focus on education and health, and during the program’s implementation the Bank provided technical assistance on asset declaration, and hospital reform. Both the Bank and IFC assisted with investment climate reform, and the Bank provided analytical support on tourism in preparation for a new project. Thus, all the prior actions in this program were informed by and supported parallel investment operations or technical assistance in the World Bank Group portfolio. 36. An initial choice had to be made between a one-year stand-alone operation and a programmatic series. A decision was taken to support the new government with a programmatic series based on the depth of the reforms outlined in the government’s program. However, the government’s ownership of the program was not strong and seemed to weaken over time, elements that were not fully assessed by the Bank during preparation. The government appeared to understand that it did not need to take a more proactive role in order to secure budget support from its partners. With less than nine months between the inauguration of the new government and the end of the fiscal year, time was short to establish priorities and negotiate a full three-year program. In retrospect, it probably would have been better to start with a stand-alone one-year operation. Waiting one year would have permitted a deeper engagement with the government on program design, based on a more mature development strategy, thereby increasing ownership. 37. The program design did start slowly and pursued a consistent three-year logic in each sector. Almost every sector had a sequence of reforms over the three operations laid out in the initial program document. In some cases, there was no prior action in the first year but rather a first procedural step to lay the foundations for deeper reform. Only in the area of irrigation was this not the case. However, the program eventually covered a large number of sectors and actors. This reflected the initial vision of the Bank to pursue a wide-ranging, ambitious reform agenda. A more focused program would have facilitated government implementation, and allowed the Bank to focus on areas where ownership was greatest. 38. A few reforms appear to have been poorly designed. The basic education reforms did not materialize as anticipated. The link between the education human resource database and the payroll was pushed back from the second operation to the third one, and even then, it was not achieved. The M&E reform has design flaws and its inclusion in the program created additional challenges to the coordination among the Bank and the finance ministry. The decrees produced to satisfy the prior actions did not resolve the underlying disagreements. The agricultural input distribution platform suffered from lack of ownership. Implementation Rating: Substantial 39. The prior actions remained relatively stable over time. Dropping land reform was clearly a good idea given the complexity of the issue as borne out but subsequent delays. This also helped to somewhat reduce the scope of the program. One reform in basic 16 education was pushed back a year to allow more time, while another reform in higher education was moved forward from year three to reflect faster progress by the authorities. The addition of an agriculture prior action in the final year of the program was probably inappropriate and did not prove effective. The changes between triggers and prior actions are summarized in Tables 4 and 5. 40. The programmatic three-year logic of the design was strengthened in the final year in order to ensure effective implementation of earlier reforms. Thus, the third- year governance trigger was adjusted to focus on operationalization of the asset declaration system. Similarly, in the electricity and higher education sectors, and in M&E, the final year looked after pending developments from the first and second year reforms. In other cases, the third-year triggers were adjusted downward to reflect better understanding of the pace of reform (agencies, hospitals, basic education). However, the third-year action related to the Auditor General was dropped to provide room for measures in other sectors. That action would have been useful to encourage implementation of recommendations in the auditor’s report. 41. The addition of the tourism sector in the final year was justified by the need to respond to the Ebola crisis. The government asked for extra assistance to deal with the impact of the Ebola crisis on this sector. The amount of the operation was increased by US$20 million, and in return it was felt that some reforms were needed. The decision to drop the cumbersome visa system was an important one since it demonstrated that the new government was prepared to admit when its policies were not working. 3.2 Achievement of Program Development Objectives 42. Only 5 of the 17 outcome targets were achieved. These were in the areas of hospitals, M&E, energy, property transfer, and tourism. Another two indicators (university budget credibility and energy load shedding) reached 90 percent of their targets. Varying degrees of progress were made on most of the others. Status of Outcome Targets Achieved Not achieved Dropped Total Pillar 1a Government accountability 2 2 Pillar 1b Public sector performance 2 6 8 Pillar 2 Private sector development 3 4 3 10 Total 5 12 3 20 PDO 1a Government accountability Rating: Modest 43. Modest progress was made on improving economic governance by strengthening Government accountability. The number of persons submitting an asset declaration had risen to 52 percent of all those required to comply. As the last available data dates from May 2016, the situation has probably improved somewhat since then. The 17 target to reduce delays in publication of the general auditor’s annual report has been 73 percent achieved. The situation looks better if we focus on the broader objective of improved governance. Looking at the Worldwide Governance Indicators, Senegal’s percentile ranks improved on all six criteria between 2010 and 2015. The largest increase was for control of corruption where Senegal improved from 28 to 59. The next best was on voice and accountability where the rank increased from 36 to 57. On the Corruption Perception Index, Senegal’s score rose from 36 in 2012 to 45 in 2016, and its ranking improved from 94th to 64th. Progress made on asset declaration probably contributed to the improved scores on corruption. But many other factors also explain these improvements. PDO1b Public sector performance Rating: Modest 44. Only 2 of 8 targets were achieved in the area of increasing public sector performance. The most impressive result was achieved in hospital efficiency, though this would have been influenced by much more than the performance contracts which were the focus of the DPC series. The M&E target was also achieved, but the reform remains institutionally weak and may not be sustainable. Progress varied between 20 percent (basic education) and 91 percent (higher education) for four others. The most disappointing one was in subsidized agricultural inputs where a new allocative mechanism was still not being used in 2016 despite intensive support from the World Bank. The fall in assisted births was also disappointing, though its link to the operation and indeed to the Bank’s overall program was not strong. This indicator and the one on girl’s scholarships were added primarily in response to the need for gender content. On the World Governance Indicator for government effectiveness, Senegal has posted modest improvement, rising from 36 in 2010 to 39 in 2015. PDO2 Private sector development Rating: Modest 45. Progress was somewhat better in promoting growth through private sector development. Three of the seven targets were achieved, a fourth was 90 percent achieved, and significant progress was made on two others. All the reforms supported under this PDO appear to be sustainable. Looking at the broader picture, Senegal’s ranking in Doing Business rose from 166 in 2012 to 147 in 2016. GDP growth has improved from 2.6 percent to 6.6 percent over the same time period. Prior actions on the investment climate helped raise the Doing Business ranking and, together with improvements in energy sector management, will have supported the higher GDP growth. 46. However, the link between the operation and the gains in economic growth are tenuous. In effect, growth acceleration is linked with many factors, including a rapid increase of agriculture production and exports (linked to good climate conditions and rising external demand for groundnuts) or increased consumption (linked to lower oil prices and 18 gains in terms of trade). Public investment also increased, though modestly, thanks to slightly higher fiscal space due to the cap on current expenditures and lower oil prices. 3.3 Justification of Overall Outcome Rating Ratings: Moderately unsatisfactory. 47. Although only 30 percent of the targets were met, the operation remains relevant and significant progress has been achieved in several key areas. It was an ambitious, multisector nature of the program, but with modest and varying ownership. In some cases, the choice of indicators was inappropriate choice of indicators, and some targets were unrealistic. It is worth noting that none of the targets were weakened over the course of the three operations, and in fact three were strengthened, reflecting the continued emphasis on ambitious reform. Significant progress was made in some of the most difficult areas – governance, energy and higher education. Improvements were also achieved in the investment climate and the tourism sector. Ultimately, the program aimed high and made some important contributions but fell short. 48. Advances in several areas – even partial – are particularly noteworthy, due to their political sensibility, technical complexity or the existence of vested interests. For instance, Senegal was the first WAEMU country to adopt the transparency law and put in place an asset declaration law and process, despite mixed support from involved civil servants. Reforms in higher education were significant given the political sensitivity of the sector, its high conflict potential and its impact in the overall budget. The government could initiate the process of agency rationalization and performance contracts, but additional efforts would be needed to ensure that the action plan is fully implemented. Reforms faced in the energy sector were highly challenging at the technical level and the involved agencies deserves credit for achieving a number of concrete results. Similarly, reforms concerning the M&E mechanisms require developing non trivial frameworks and coordination mechanisms. Key ministries took the reform seriously and began developing them. Reforms concerning subsidy distribution in agriculture faced both harsh technical challenges and lack of commitment probably linked with vested interests. 3.4 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 49. The DPC series was expected to have a positive impact on medium-term poverty reduction. Strengthened government accountability and institutional capabilities would ensure greater efficiency and effectiveness of public expenditure and improve the quality of basic services. The selected actions were expected to create fiscal space for primary and secondary education and basic health care. The government actions to restructure the universities and improve quality in the higher education sector and strengthen accountability in hospitals would impact student conditions and patient care. The e-platform for agricultural inputs would reduce leakages and help ensure that the intended beneficiaries – poor farmers – receive seeds and fertilizers which can substantially 19 increase their productivity and incomes. Improvements in irrigation maintenance should have similar impacts by ensuring more reliable access to water and facilitating a second harvest during the dry season. ???All this remains true, though the failure to implement the e-platform to date has delayed potential benefits. 50. Policy reforms on energy, higher education, and autonomous agencies might affect selected groups. The performance contract for SENELEC may eventually lead to some reduction in staffing, and the evaluation of agencies will result in the closure of some agencies. However, to the extent this happens, the persons affected will be the non-poor and will be covered by the fairly generous provisions of Senegalese law concerning termination of public employment. The rationalization of scholarships in higher education will focus on re-establishing the link between performance and funding, including the removal of students who enroll simply to obtain the scholarship and never actually come to class. 51. The proposed series was expected to have a positive impact on gender equality. Reforms promoted in basic and higher education as well as in health care were expected to facilitate girls’ and women’s access to social services. The hospital reform promoted by the GGSC series was expected to improve the quality of services and save resources for better financing of primary health clinics (centres de santé, cases de santé), particularly in rural areas, and thus improve access to services by women. Unfortunately, the percentage of women giving birth with professional assistance has dropped for some reason. The improvement of the universities’ financial situation was expected to have a positive impact on the quality of education, reducing the drop-out rate and thus encouraging female completion rates. The application of merit-based criteria for university scholarships may have contributed to the increased share going to women. Gender equality exists already in primary education and improvements in secondary education were expected to reduce girls’ dropout rates at that level. Finally, if the targeted agricultural input delivery system is eventually introduced, this should enhance access by women farmers to essential inputs for productivity improvement. (b) Institutional Change/Strengthening 52. The emphasis on performance contracts, for hospitals, the energy parastatal (SENELEC) and agencies, should have a significant impact on the performance of all these institutions. The introduction of penalties and rewards linked to performance in SENELEC should be particularly helpful in changing the culture of the work place. The performance contracts for hospitals led to new investment allocations which had been unavailable for many years. This reportedly improved morale in these institutions. The new governance law and reforms in the financing of universities should make them more transparent and accountable. This will be further strengthened once the specialized accountants in key faculties begin to report to the chief financial officer as envisaged. The governance reforms have modestly strengthened the mandates of the Cour des Comptes and the new OFNAC institution. 20 (c) Other Unintended Outcomes and Impacts No unintended negative effects have been identified by the team. 3.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops There was no beneficiary survey and/or stakeholder workshop. 4. Assessment of Risk to Development Outcome 53. Ratings: Risks are moderate as the government appears to be committed to most, if not all, of the objectives pursued in this series. Also, the degree of progress has been moderate, so there is less likelihood of reversals. There is a risk that the asset declaration exercise will have limited impact if the organization responsible for receiving and managing them (OFNAC) is weakened. The removal of their independent President in 2016 can be perceived as a move in this direction. The eventual utilization of the e-platform for agricultural subsidies remains in doubt. Further rationalization of agencies is also uncertain. The commitment to performance contracts seems clear, though it remains to be seen if they will be used effectively.5 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Ratings: Moderately unsatisfactory. 54. The Bank supported the design of an ambitious program which tackled many relevant issues, but that was too wide-ranging and paid insufficient attention to ownership. The programmatic, three-year approach was generally well-designed, with a systematic progression of reforms in most areas and stability in triggers. However, the broad and ambitious scope affected monitoring and implementation. Focusing the program on fewer key sectors, with more mature ongoing reforms, would have helped. Also, the program could have benefited from greater attention to country ownership both with the MEFP and sectoral ministries. As mentioned before, the design and location of the proposed M&E unit generated frictions and inefficiencies. This M&E unit, the proposed agricultural input distribution platform, and agency rationalization suffered from weak ownership at the levels of implementing agencies – despite the high relevance for the Presidency. In general, the Bank had high expectations, but it moved too quickly into a three-year program, over-estimated the realistic pace of reform and over-estimated the 5 There was some early evidence that the finance ministry was not always budgeting the amounts indicated in the performance contracts, giving the agencies an excuse for underperforming. 21 strength of the ownership. Starting with a one-year operation before discussing a three-year program and focusing on fewer sectors would have been a more sensible strategy. (b) Quality of Supervision Ratings: Satisfactory. 55. The series benefited from close monitoring as all the relevant sector specialists were based in the local office in Dakar, and the prior actions were integral parts of the overall Bank program for Senegal. The World Bank supported the many reforms with analytical work and technical assistance, and discussed the most difficult issues at the highest level of government when necessary. The basic education reform involving changes to the payroll system may have suffered from inadequate attention as the difficulties seem to have been underestimated, but lack of government commitment may have been the bigger factor. The Bank’s monitoring capacity was affected due to natural rotation in the team leadership half way through the second year (2013), but other members of the team stepped in to continue managing the program, including the support of the team located in the country office. (c) Justification of Rating for Overall Bank Performance Ratings: Moderately unsatisfactory. 56. The Bank was overly ambitious in the variety and depth of reforms pursued, and in the final outcomes sought. The Bank overestimated the implementation and coordination capacity of the new government, and its ownership of the program. Supervision was adequate, with a few exceptions, but results were disappointing. Closer coordination with involved sectors during design and execution would have helped to increase ownership. 5.2 Borrower Performance (a) Government Performance Ratings: Moderately unsatisfactory. 57. Performance was mixed across the government. The ministries of health, basic education and higher education showed relatively good commitment, though the last two were sometimes impeded by weak follow up from the MEFP. For example, the payroll department in the finance ministry delayed interconnection with the basic education human resource data base. Delays in defining a new budget nomenclature held up the preparation of revised university budgets using the new financial regime. The agriculture ministry did not implement the one reform under its responsibility. 58. Insufficient coordination capacity in the finance ministry due to lack of human resources compounded the problem. In effect, the unit responsible for following up the budget support program was severely understaffed. This led to heavy participation by Bank 22 staff; nonetheless, there was often a last-minute crisis atmosphere at the end of the government’s fiscal year, as incomplete reforms threatened timely disbursement. The Bank coordinated with other donors to recommend changes in the government’s arrangements for managing budget support, but these were not implemented. 59. Several of the outcome indicators were missed because of insufficient commitment to tackle the issue. According to the law, all asset declarations should have been submitted within three months of approval of the decree, yet two years later only half of them had been received. A 2009 law stipulated that all agencies should have a performance contract, an objective still not obtained in 2017. The platform for allocating subsidized agricultural inputs was still not used in 2017. 60. Once a prior action was met there was often insufficient attention to ensure proper implementation. The first electricity reform was not implemented until a further condition was introduced in the third-year operation. Special accountants were assigned to key faculties but did not report to the chief financial officer as expected. University budgets were being prepared using a new financial regime, but should have been negotiated before the national budget was approved. There was little rationalization of agencies after the action plan was agreed. (b) Implementing Agency or Agencies Performance Ratings: Moderately satisfactory. 61. Performance was heterogeneous across involved implementing agencies. The main responsibility for coordination among executing agencies and tracking implementation remained at the Ministry of Economy, Finance, and Planning, with overall modest results. APIX, the agency managing investment climate reform, did a very good job, demonstrating strong ownership, pursuing Doing Business reforms in a concerted manner, and generally completing prior actions well ahead of appraisal. SENELEC, the energy parastatal, did moderately well, implementing prior actions in a timely fashion, heavily supported by Bank staff. These agencies were responsible for implementing specific reforms but not the overall program, which remained the responsibility of the finance ministry. (c) Justification of Rating for Overall Borrower Performance Ratings: Moderately unsatisfactory. 62. Government performance was on the whole moderately unsatisfactory, and many outcome targets were missed. While some ministries and agencies demonstrated commitment to reform, others did not. Inadequate coordination and cohesion between the finance ministry and other executing units were particularly problematic both for monitoring the program and ensuring implementation of reforms. 6. Lessons Learned 63. The trade-off between reform and disbursement needs to be acknowledged and addressed. The necessity of disbursing before the end of Senegal’s fiscal year caused 23 considerable stress in the first two years of the program, and led to some hasty reform measures which were not fully owned. These include the agency rationalization action plan and the adoption of the e-platform for agricultural inputs. The program finally broke its link to annual disbursement in the third year. 64. The Bank and the Government need to work more effectively to agree on a set of important reforms, ensuring strong government ownership and reflecting clear priorities. There needs to be an understanding that budget support is not inevitable but depends on significant reforms, that success depends on government ownership, and that ownership depends on the active participation of both parties in defining the policy matrix. 65. The Government of Senegal needs to devote more resources to ensure adequate follow-up and timely completion of prior actions. Full ownership should be demonstrated by a robust monitoring unit, with a clear mandate and strong leverage on implementing ministries and agencies. Complementing this, at the sector level, reforms need to be owned by implementing agencies. This would lead to strong coordination mechanisms between sector and central ministries (particularly the MEFP) thus facilitating the reform implementation. 66. Budget support series should be limited to a smaller number of sectors. This would permit a better focus on areas of strong government ownership and facilitate monitoring. The Senegal program covered a wide range of sectors which taxed the supervisory capacity of the finance ministry as well as Bank staff. Basic education should probably have been dropped as the sequence of reforms was weak and Bank staff were focused on higher education. Agriculture could also have been excluded from this series, as it was added only in the final year, and there was little ownership of the key reform. The program probably provided little valued added to the investment climate reforms as they were being driven effectively by the Doing Business process. Such rationalization would have allowed room for further action in year three related to the Auditor General. Focusing on fewer sectors would have allowed more comprehensive and meaningful reform programs in each sector. 67. Both the Bank and the Government need to follow-up after prior actions are met, to ensure that the reforms are effectively implemented. For example, the cross- debt agreement approved with SENELEC in 2012 did not come into force until 2014 because a critical annex had not been finalized. Similarly, application of the new financial regime for universities was delayed for months for lack of attention to the budget nomenclature. The special accountants assigned to key faculties were still not reporting to the chief financial officer at the university of Dakar two years after their nomination. The commitment to use the e-platform for allocating subsidized agricultural inputs has yet to bear fruit for lack of implementation. And once the Ministers had submitted their asset declarations, the pressure on others appears to have reduced. The focus on implementation in the third operation of the series was an important step in the right direction but not sufficient. 24 68. Targets need to be set more carefully, more tightly linked to prior actions, with greater emphasis on outputs rather than outcomes, and more attention to the timeline for implementation. The gender targets were not well-linked to reforms supported in the program, and the health and tourism outcomes depended on variables beyond the associated prior actions. The targets for asset declarations and agency performance contracts were too ambitious. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing agencies 69. The main comment from the borrower concerned the importance of considering partial achievement of targets. This was accommodated by including the percentage of each target achieved in the revised version. (b) Cofinanciers: NA (c) Other partners and stakeholders : NA 25 Annex 1 Bank Lending and Implementation Support/Supervision Processes (a) Task Team members P128284, P126470, P150976 - SN- First, Second and Third Governance and Growth Support Projects Responsibility/ Names Title Unit Specialty Lending Maya Abi Karam Senior Counsel LEGAM Legal Alexandre Arrobbio Senior Governance Specialist GGO18 Governance Eric Brintet Lead Financial Management Spec GGO25 Governance Wolfgang M. T. Chadab Senior Finance Officer WFALA Disbursement Matthias Cinyabuguma Senior Economist GMFDR Macroeconomics Linda K. English Program Leader, Human Development GEDDR Education Edward Philip English Program Leader, Macroeconomics GMFDR TTL Maimouna Mbow Fam Sr Financial Management Specialist GGO26 Public Finance Fatouma Toure Ibrahima Wane Operations Adviser GEEDR Energy Christophe Lemiere Senior Health Specialist GHNDR Health Khady Fall Lo Program Assistant AFCF1 Program Assistant Jean Michel Noel Marchat Lead Economist GTC07 Private sector Mamadou Ndione Senior Economist GMFDR TTL, GGSC1 Aifa Niane Ndoye Agricultural Economist GAGDR Agriculture Program Leader, Sustainable Demetrios Papathanasiou GEEDR Energy Development Atou Seck Senior Education Specialist GEDDR Education Jean-Philippe Tre Senior Agriculture Economist GFA01 Agriculture (b) Staff Time and Cost P128284, P126470, P150976 – Staff Time & Cost 1. SN- First Governance and Growth Support Project – P128284 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$, Thousands (including Travel Number of staff weeks and Consultant Costs) Lending FY12 40.20 125,494 FY13 49.10 172,861 Total: 89.30 298,355 Supervision/ICR Total: 0 0 Total lending 89.30 298,355 &Supervision 26 2. SN- Second Governance and Growth Support Credit – P126470 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$, Thousands (including Travel Number of staff weeks and Consultant Costs) Lending FY14 11.98 95,167 FY15 1.40 7,074 FY16 0.90 6,673 Total: 14.28 108,914 Supervision/ICR Total: 0 0 Total lending & 14.28 108,914 supervision 3. Senegal-Third Governance and Growth Support Credit – P150976 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$, Thousands (including Travel Number of staff weeks and Consultant Costs) Lending FY15 15.10 112,966 FY16 0 186 Total: 15.10 113,151 Supervision/ICR FY17 1.96 20,870 Total: 1.96 20,870 Total lending & 17.06 134,021 supervision 27 Annex 2. Beneficiary Survey Results Not applicable. 28 Annex 3. Stakeholder Workshop Report and Results Not applicable. 29 Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR Following a meeting to revise the draft ICR prepared by the World Bank, the Borrower proposed only a handful of minor adjustments to text, mostly related to the role of the Government in the design and implementation of the DPO Series. They were all included in the final text. The Borrower also requested to better reflect the partial (and sometimes substantial) progress in the Indicators of the Program. In effect, the ICR version revised with the Borrower considered only two options for the results Indicators: Attained or Not Attained. Hence, some indicators that showed important progress were marked as Not Attained if its value did not fully reach the objective. This issue has also been discussed at the QER meeting and the meeting accepted to reflect the degree of accomplishment of the Indicators to better reflect partial advances. 30 Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders Not applicable. 31 Annex 6: Prior Actions and their Status GGSC 1 Prior Actions Status Pillar 1a: To improve economic governance by strengthening accountability systems Enhance Budget transparency by submitting to Parliament a draft law Done and law was consistent with the WAEMU guidelines for a Code of Transparency passed in 2013. (Directive No1/2009/CM/UEMOA portant Code de Transparence dans la Gestion des Finances Publiques au Sein de l’UEMOA) by the Council of Ministers (Prior Action 1) Strengthen the independence of the Audit Court by submitting to Done and law was Parliament a draft organic law (projet de loi organique abrogeant et passed in 2013. remplacant la loi organique No 99-70 du 17 février 1999 sur la Cour des Comptes) (Prior Action 2) Pillar 1b: To promote service delivery through better governance and efficiency in the education, health and agriculture sectors, rationalization of agencies and strengthening monitoring and evaluation. Improve personnel management of the education ministry by adopting Done. a decree reinforcing the deconcentration process (décret abrogeant et remplaçant le décret n° 93-789 du 25 juin 1993 portant création des inspections d’Académie et des inspections départementales de l’Education nationale, modifié) (Prior Action 3) Strengthen financial management of universities by amending the Done. financial regime (Décret portant régime financier des universités) (Prior Action 4) Sign a performance contract between the HOGGY hospital, the Done. Ministry of Health and the Ministry of Economy and Finance (Prior Action 5) Pillar 2: To enhance private sector development through energy sector reforms, and improvements in the investment climate, including in the tourism sector. Adoption by the Government (signed by the Minister in charge of Done. Finance and the Minister in charge of Energy) of a new Energy Sector Development Policy Letter (ESDPL) and action plan 2012-2016 (Prior Action 6) Adoption by the SENELEC Board of directors of SENELEC’s Done, though an financial and operational restructuring plan including the agreement of annex stipulating cross-debts settlement as of July 31 2012 between SENELEC and State how the balance signed by the Ministry in charge of Finance and SENELEC (Prior would be allocated Action 7) was not finalized at the time, which delayed the agreement taking effect. 32 GGSC II Prior Actions Status Pillar 1a: To improve economic governance by strengthening accountability systems. Establish an Asset Declaration System by submitting to Parliament a draft Done and law law making asset declarations mandatory for all Ministers was passed in (Prior Action 1) 2014. Publish the 2011 Annual Report on the Cour des Comptes website (Prior Done. Action 2) Pillar 1b: To promote service delivery through better governance and efficiency in the education, health and agriculture sectors, rationalization of agencies and strengthening monitoring and evaluation. Done, although Adopt 2013 budget for the two largest universities which are in compliance well after the with the revised financial regime of the universities; and adopt new criteria 2013 national for scholarships (Prior Action 3) budget was approved. Evaluate existing performance contracts and sign performance contracts between 5 new public hospitals, the Ministry of Health and the Ministry of Done. Economy and Finance (Prior Action 4) Done, though the Finalize the evaluation of autonomous agencies; and approve an action plan action plan was including the closure and merger of some agencies somewhat (Prior Action 5) modified thereafter. Done, though it remained fairly Establish an institutional mechanism for regular monitoring of strategic vague on the role priorities linked with the budget cycle (Prior Action 6) of different central actors. Pillar 2: To enhance private sector development through energy sector reforms, and improvements in the investment climate, including in the tourism sector. Signature of a Performance Contract between the State and SENELEC Done. (Prior Action 7) Improve business climate by i) enacting a law simplifying property registration procedures and ii) revising its tax code to reduce property taxes Done. and reduce the time required for other tax payments. (Prior Action 8) 33 GGSC III Prior Actions Status Pillar 1a: To improve economic governance by strengthening accountability systems. The Recipient has operationalized its asset declaration system by: (a) Done, although the approving the related implementation decree; (b) allocating appropriate replacement of the human and financial resources to the national office for the fight President of OFNAC against fraud and corruption (“Office National pour la Lutte contre la may signal a Fraude et la Corruption”/”OFNAC”); and (c) ensuring deposition of weakening of its asset declarations by ministers holding a portfolio to OFNAC. independence. (Prior Action 1) Pillar 1b: To promote better governance and efficiency in the education, health and agriculture sectors, and within agencies, and strengthen monitoring and evaluation. The Recipient has strengthened wage bill control and human resources Done, though the in the education sector by: (a) creating a system connecting data bases original trigger called of the ministries in charge of education and civil service; and (b) for the data base to be preparing the 2015-2016 recruitment plan for education in collaboration linked to the payroll with the ministry in charge of finance. (Prior Action 2) as well. Done. The law was The Recipient has implemented presidential directives on external approved. The revenues earned by universities through: (a) adoption and submission to accountants were Parliament for enactment of a draft law reforming universities appointed but their governance system; (b) issuance of an Arrêté specifying resource reporting to the chief allocation and use of external revenues; and (c) appointment of financial officer accountants in key faculties and schools at the University of Dakar, remains problematic. who report to the chief financial officer. (Prior Action 3) The Recipient has adopted a new financial regime for public agencies Done. This action and establishments, and has entered with five additional public health was strengthened with institutions into performance contracts whose objectives are to increase the addition of a new service supply, improve billing process and control general costs. financial regime. (Prior Action 4) The Minister of Agriculture agreed in The Recipient has adopted a mobile phone-based e-platform to principle to use the distribute subsidized agricultural inputs in the 2015 crop season; and new platform but it obtained approval allowing SAED to enter into multiannual was still not in use maintenance contracts of hydro-agricultural works with private one year later. The contractors and launched a call for bids. (Prior Action 5) first multi-year contract has been issued. The Recipient has launched implementation of the action plan to restructure autonomous government-owned agencies, by: (a) merging Done. Closure of certain selected agencies; (b) appointing officers responsible for the agencies has been liquidation of certain selected agencies; and (c) entering with six of the slow but additional largest agencies into performance contracts with the objective of performance contracts clarifying the financial commitments of the Recipient’s ministry have been prepared in responsible for finance and the related performance targets of agencies the following years. concerned. (Prior Action 6) 34 GGSC III Prior Actions Status Done, though tensions The Recipient has issued a decree establishing a comprehensive between the different monitoring and evaluation system for the government’s policies and actors suggest that the programs, defining the roles and responsibilities of all actors in the system may have to administration. (Prior Action 7) be redesigned. Pillar 2: To enhance private sector development through energy sector reforms, and improvements in the investment climate, including in the tourism sector. The Recipient has amended the performance contract entered into between the Recipient and SENELEC on June 11, 2013 to include Done. The cross debt- performance-based bonuses and sanctions, and has amended the agreement was finally agreement regularizing cross-debt entered into between the Recipient applied. and SENELEC dated November 16, 2012, to determine the method for the balance allocation. (Prior Action 8) The Recipient has: (a) issued (i) a decree reducing the number of days and costs to obtain construction permits through the creation of a single window and online processing; and (ii) a decree determining a new fee Done. schedule for warehouse inspection; and (b) eliminated the minimum capital requirement for creating a new company. (Prior Action 9) The Recipient has offset the impact of Ebola’s on the tourism sector by: a) removing entry visas’ fees; b) reducing selected taxes on air tickets; Done. and c) suspending recovery acts initiated against hotels with arrears in payment of patented and land taxes in 2015. (Prior Action 10) 35 Annex 7. List of Supporting Documents ACT for Performance, Diagnostic des dispositifs de suivi-évaluation des politiques publiques au Sénégal, June 2016. Senegal, Ministry of Economy, Finance and Planning, Direction de la Prévision et des Etudes Economiques (DPEE), various monthly issues of the Point mensuel de Conjoncture for 2016. Senegal, Ministry of Economy, Finance and Planning, Direction du Secteur Parapublic, Rapport 2014-2015 sur le Secteur Parapublic. Senegal, Ministry of Economy, Finance and Planning, Loi des Finances 2016 and Loi des Finances rectificative, 2016. Sur le site web www.finances.gouv.sn. Senegal, Ministry of National Education, Rapport annuel de Performance 2015, April 2016. Senegal, OFNAC, Rapport annuel 2016. Sy, A.B., A.B. Diallo, and N.N. Seck. Mesure de la Performance des Ressources Humaines dans le Secteur de la Santé, Dec. 2016. World Bank, Doing Business 2017 – Equal Opportunity for All, Economy Profile 2017: Senegal. World Bank, Senegal: Program Document for the First Governance and Growth Support Credit, November 2012. World Bank, Senegal: Program Document for a Proposed Second Governance and Growth Support Credit, November 2013. World Bank, Senegal: Program Document for a Proposed Credit for the Third Governance and Growth Support Credit, June 2015. 36 MAP