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AFRICAN DEVELOPMENT FUND
Reference N°: Language: English
Distribution: Original: French
POVERTY REDUCTION STRATEGY SUPPORT PROGRAMME
(PASRP V)
Country: BURKINA FASO
APPRAISAL REPORT
JUNE 2010
OSGE
Appraisal
Team
Programme
Officer
Team Members
Abdoulaye COULIBALY, Principal Governance Specialist, OSGE.1
Maimouna DIOP, Principal Health Specialist, OSHD
Tankien DAYO, Macroeconomist, BFFO
Pierre Chrysologue OUEDRAGO, Procurement Specialist, BFFO
Jean Marie Vianney DABIRE, Macroeconomist Consultant, BFFO
Mohamed Souradjou IBRAHIM, Consultant, OSGE
Sector Director
Sector Manager
Country Director
Country Manager
Gabriel NEGATU, OSGE
Carlos SANTISO, OSGE
Janvier K. LITSE, ORWA
Antoinette DINGA-DZONDO, BFFO
Peer Review
Internal Peer
Reviewers
External Peer
Reviewers
Samba BA, ORWA
Michel MALLBERG, OSGE.2
Serge N’GUESSAN, OSGE.1
Christian LIM, OSGE.2
Dramane SEBRE, EU Representative’s Office, Ouagadougou
Mariam DIOP KOMPAORE, Embassy of Denmark, Ouagadougou
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TABLE OF CONTENTS
1. PROPOSAL ......................................................................................................................... 1
2. COUNTRY CONTEXT AND PROGRAMME .................................................................. 2
2.1 Government Development Strategy and Action Plans for 2010 ......................................... 2 2.2 Recent Socio-economic Trends, Constraints, Challenges and Prospects ............................ 2 2.3 Status of Bank Portfolio ..................................................................................................... 6
3. RATIONALE, KEY ELEMENTS OF PROGRAMME DESIGN AND
SUSTAINABILITY ............................................................................................................ 6
3.1 Linkages with the CSP and Analytical Bases ..................................................................... 6
3.2 Collaboration and Coordination with Other Donors ........................................................... 7 3.3 Results and Lessons From Similar Programmes ................................................................ 7 3.4 Linkages with Other Ongoing Bank Operations ................................................................. 8
3.5 Comparative Advantages of the Bank ................................................................................. 9 3.6 Good Practice Principles for the Application of Conditionalities ...................................... 9
3.7 Application of the Bank Group Policy in Non-Concessional Loans. .................................. 9
4. THE PROPOSED PROGRAMME ..................................................................................... 9
4.1 Programme Objectives ........................................................................................................ 9
4.2 Programme Components and Expected Outcomes ........................................................... 10 4.3 Programme Implementation Status ................................................................................... 14
4.4 Financing Needs and Sources 2010 ................................................................................... 14 4.5 Programme Beneficiaries .................................................................................................. 15
4.6 Impact on Gender .............................................................................................................. 15 4.7 Impact on Environment ..................................................................................................... 16
4.8 Other Programme Impacts ................................................................................................. 16
5. IMPLEMENTATION, MONITORING AND EVALUATION ....................................... 16
5.1 Programme Implementation .............................................................................................. 16
5.2 Monitoring and Evaluation ................................................................................................ 17
6. LEGAL INSTRUMENTS AND AUTHORITY .............................................................. 17
6.1 Legal Instruments .............................................................................................................. 17 6.2 Resources Derived From Restructured Projects ................................................................ 17
6.3 Actions Precedent .............................................................................................................. 17 6.4 Effectiveness ..................................................................................................................... 18
6.5 Disbursement ..................................................................................................................... 18 6.6 Compliance with Bank Group Policies ............................................................................. 18
7. RISK MANAGEMENT .................................................................................................... 18
7.1 Risks and Mitigative Measures ......................................................................................... 18
8. RECOMMENDATION ..................................................................................................... 19
iii
Tables
Table 1: 2010 Financing Needs
Table 2: Programme Financing
Annexes
Annex 1 Letter of Development Policy
Annex 2 Programme Matrix of Measures
Annex 3 Relationship with IMF
Annex 4 Macro-economic and Financial Indicators
Annex 5 Comparative Socio-economic Indicators
Annex 6 Comparative Competitiveness Profiles of Five WAEMU Countries in 2009
Annex 7 Burkina Faso CPIA 2007-2009 Rating
Annex 8 Resources Derived From Restructured Projects
Annex 9 List of Reference Documents
Annex 10 Map of Burkina Faso
Boxes
Box 1 Impact of the International Financial Crisis
Box 2 Impact of Flooding of 1 September 2009 in Ouagadougou
Box 3 Public Procurement Audit for 2008 and 2009
Box 4 Measures Precedent to Board Presentation of PASRP V
Currency Equivalents
June 2010
UA 1 = CFAF 780.923
UA 1 = EUR 1.191
UA 1 = USD 1.474
Financial Year
1 January to 31 December
iv
ACRONYM AND ABBREVIATIONS
ADF African Development Fund
ARMP Public Procurement Regulatory Authority
BFFO Burkina Faso Country Office
BTP Building and Public Works (Batiments et Travaux Publics)
CCAG Cahier des Clauses d’Administration Générale (General Administrative
Clauses)
CEFAC Centre for Facilitation of Building Deeds
CFAA Country Financial Accountability Assessment
CGAB-PRSP PRSP General Budgetary Support Framework
CPAR Country Procurement Assessment Review
DBSL Development Budget Support Loan
DGMP General Directorate of Public Procurement
FTI- Education Fast Track Initiative for Education
GDP Gross Domestic Product
ICT Information and Communication Technologies
IMF International Monetary Fund
MAHRH Ministry of Agriculture, Water Resources and Fisheries
MCPEA Ministry of Trade, Business Promotion and Cottage Industry
MDG Millennium Development Goals
MEF Ministry of Economy and Finance
MESSRS Ministry of Secondary, Higher Education and Scientific Research
MFRPE Ministry of Civil Service and Public Reform
MID Ministry of Infrastructure and Hinterland Access
MTEF Medium-Term Expenditure Framework
PAP-PRSP PRSP Priority Action Programme
PAST Three-Year Sectoral Development Plan
PEFA Public Expenditure and Financial Accountability
PN- WSS National Water Supply and Sanitation Programme
PNF National Land Policy
PRGF Poverty Reduction and Growth Facility
PRSP Poverty Reduction Strategy Paper
PASRP Poverty Reduction Strategy Support Programme
RBCSP Result-Based Country Strategy Paper
RGMP General Public Procurement Regulations
RMC Regional Member Country
SCADD Strategy for Faster Growth and Sustainable Development
SIMP Public Procurement Information System
SP-PPF Permanent Secretariat for the Monitoring of Financial Policies and Programmes
SRFP Public Finance Strengthening Strategy
TFP Technical and Financial Partners
WAEMU West African Economic and Monetary Union
v
INFORMATION SHEET
Information on the Beneficiary
RECIPIENT : BURKINA FASO
SECTOR : Economic and Financial Governance
EXECUTING AGENCY : Permanent Secretariat for Monitoring Financial Policies
and Programmes (SP-PPF) in the Ministry of Economy
and Finance
AMOUNT : UA 26,685,075
TERMS : Grant of UA 10,000,000; loan of UA 16,685,075 resulting
from resources derived from the portfolio restructuring.
NUMBER OF TRANCHES : One
Programme Financing
Source Amount in UA Million
- ADF 26,68
(10 + 16,68)
- IMF 7,45
- IDA 40
- European Union 47
- Denmark 6
- France 6
- Netherlands 18
- Switzerland 4
- Sweden 11
- Germany 8
- FTI - Education 30
- PN-WSS 2
Total 206.13
Source: IMF Report No. 10/7 of January 2010
Programme Schedule – Key Dates
Identification Mission : September 2009
Review of Concept Note by Country Team : 08 February 2010
Review of Concept Note by OPSCOM : 24 February 2010
Appraisal Mission : from 24/02 to 10/03 2010
Programme Approval : July 2010
Effectiveness : August 2010
Disbursement of single tranche : August 2010
Mid-term review : November 2010
Annual financial flow audit by TFPs : March 2011
Government Completion Report : April 2011
Bank Completion Report : April 2011
vi
BURKINA FASO
POVERTY REDUCTION STRATEGY SUPPORT PROGRAMME (PASRP V)
PASRP V MATRIX
HIERARCHY OF OBJECTIVES
EXPECTED OUTCOMES IMPACT (Beneficiaries)
PERFORMANCE INDICATORS
OBJECTIVE INDICATORS AND SCHEDULE
ASSUMPTIONS / RISKS
Overall Objective
1. Support
implementation of the
Government’s 2010
action programme to cope
with the effects of the
flooding and the
international financial and
economic crisis
Long-Term Results
Improve the living conditions of the
population
Population of Burkina
Faso (13.6 million)
1.1 Real GDP rate
1.2 Incidence of poverty;
1.3 Health coverage rate,
1.4 Overall enrolment rate and girls’
enrolment rate
1.1 GDP growth increases from 3.1% in
2009 to a minimum of 4.4% in 2010 and
5.3% in 2011
1.2 The poverty rate rises from 42.8% in
2008 to 36.1% in 2015
1.3 Health coverage: from 43% (2008) to
47% (2010)
1.4 Overall enrolment rate: from 72.4% (of
which 67.7% for girls in 2008) to 78.2%
(71.1% in 2010)
Risks
Socio-political destabilization at
regional and country level
Macro-economic destabilization
due to external and climatic shocks.
Fiduciary risks
Mitigative Measures
(i) Pursuit of mediation efforts in the
sub-region. Dialogue to ensure
socio-political stability in the sub-
region.
(ii) Government’s clear commitment
to implement reforms with good
results in recent years.
(iii) Efforts made for better
transparency in public finance
management. Putting in place of a
transparent public procurement
system and several positive
evaluations of reliability of the
fiduciary framework.
2. Programme
Objective
2.1 Support to economic
recovery
Medium-Term Outcomes
2.1.1 Macro-economic framework
is stabilized
2.1.2 Conditions precedent to
diversification of the economy
- Population
- Government
-Private sector
2.1.1 (a) Cotton production
2.1.1 (b) Level of exports
2.1.2 (a) Sector policy
- Increased cotton production (in volume)
by at least 40% in 2010 compared to 2009.
- Increased export earnings by a minimum
of 5% en 2010 compared to 2009.
- The MCPEA sector policy paper and its action plan are adopted.
vii
HIERARCHY OF OBJECTIVES
EXPECTED OUTCOMES IMPACT (Beneficiaries)
PERFORMANCE INDICATORS
OBJECTIVE INDICATORS AND SCHEDULE
ASSUMPTIONS / RISKS
created.
2.2 Improve public
finance management
2.2.1 Budget programming is
strengthened
Same as above 2.2.1 (a) Multi-year perspective in
fiscal planning (PEFA Indices , PI-12)
2.2.1.b Budgetary allocation to priority sectors, in particular health and education
- PI-12 improves from B ( 2007 score) to
B+ in 2010
- Share of Government budget allocated to
priority sectors increases from 32.3% in
2008 to 33.3 % in 2010 (including health
sector from 11.5% to 12%)
2.2.2 The public procurement
reform is consolidated
2.2.2 (a) Share of open competitive bidding
2.2.2 (b) Competition, value for money
and controls in public procurement
(PEFA- PI-19)
- Percentage of public procurement based
on open competition rises from 75% (2009)
to 85% in 2010
- PI-19 improves from C+ (2007 score) to B
in 2010.
Inputs (UA Million)
ADF 26.68
IMF 7.45
IDA 40
EU 47
Denmark 6
France 6
Netherlands 18
Switzerland 4
Sweden 11
Germany 8
FTI- Education 30
PN-WSS 2
Outputs
- Implementation of measures of
two programme components
- Siging of loan/grant agreement
- Disbursement of the single
tranche
- Monitoring/evaluation
- Auditing of accounts
- Completion report
Beneficiaries
- Burkina Faso
population,
particularly the most
vulnerable groups
- Private sector
- Public financial
departments
- Regions where
structures of Maison
de l’Entreprise
(Business Promotion
Centre) will be
decentralized
Output Indicators
Number of measures achieved
(Source: Quarterly reports of the
Permanent Secretariat for the
Monitoring of Economic and Financial
Policies and Programmes– SP-PPF)
Anticipated Trend
- 60% of measues achieved by mid-term
- 100% of measures achieved by end 2010.
Operational Assumption
Maintaining the country’s
institutional capacity to implement
the reforms
viii
Executive Summary
Programme Overview
Programme Name Fifth Poverty Reduction Strategy Support Programme (PASRP-V)
Geographic coverage Countrywide
Expected outcomes Economic growth increases from 3.2% in 2009 to 4.4% in 2010
Improvement of transparency and effectiveness of public expenditures.
Total duration 1 year, January to December 2010.
Programme cost UA 26.68 million (UA 10,000,000 Grant and UA 16,685,075 Loan)
Programme Overview: The Fifth Poverty Reduction Strategy Support Programme (PASRP
V) is a general budgetary support operation. The overall objective is to support the
implementation of the Government’s Action Programme to mitigate the effects of the
flooding and the international financial crisis, and to pursue structural reforms, notably
through the Public Finance Enhancement Strategy. The specific objective is to contribute to:
(i) the recovery of the economy and the stability of the macro-economic framework; and (ii)
improve public finance management.
Programme Outcome: The expected outcomes are: (i) stimulated economic growth from
3.2% in 2009 to 4.4% in 2010 with a controlled inflation rate at below 3% and a budget
deficit (including grants) contained at below 5% of GDP; and (ii) improvement of the
transparency and effectiveness of public expenditure.
Programme Rationale: The Programme is based on the Framework Note of the Strategy for
Accelerated Growth and Sustainable Development adopted in March 2009 and the priorities
of the Government’s 2010 Action Programme to mitigate the impact of the flooding and the
international financial crisis, adopted in June 2009. It is a follow up to PASRP IV whose
achievements it is designed to strengthen. The main measures for economic recovery and
mitigation of the effects of the economic crisis and the flooding are contained in the unified
matrix of performance and disbursement criteria under the 2010 General Budgetary Support
Framework (CGAB) jointly validated by the Government and the technical and financial
partners. PASRP V is in keeping with the Bank’s strategy as defined in the RBCSP 2005-
2009 which has been extended to 2010 – 2011. The interventions retained in 2010 comprise a
budget support with resources from the balance on ADF XI resource allocation (UA
10,000,000 grant) and resources from the restructuring of five projects (UA 16,685,075 loan).
Needs Assessment: The 2010 budget was prepared in a difficult context, characterized by the
global financial and economic crisis. The country’s GDP growth fell to 3.2% in 2009, from
5.2% in 2008 as a result of a 17% and 10.4% decline in cotton and cereal production,
respectively. Burkina Faso is facing a major budget deficit in 2010 amounting to CFAF 218.3
billion, equivalent to 5.4% of GDP. The total cost of the Government’s Priority Action
Programme (2009-2010) is estimated at CFAF 434.6 billion. In 2010, the needs were
estimated at CFAF 303.6 billion to cover the international financial and economic crisis, and
about CFAF 18 billion for the flooding. The Government requires additional resources over
the 2010 period to support the execution of the Action Programme whose implementation
partly began in 2009.
Bank’s Value-Added: Under this Programme, the Bank will bring its entire experience in
policy dialogue acquired from PASRP I to IV to bear. In particular, the recent reforms
undertaken in standardization, competitiveness and procurement under PASRP IV, as well as
ix
various studies initiated under the Project in Support of Public Expenditure Programming and
Control Institutions (PAI-PDC) have helped to start and maintain dialogue with the
Government and the other TFPs. The opening of BFFO and its active participation in
implementing the Public Finance Strengthening Strategy (SRPF) and in decision-making
within the CGAB-PRSP provides an additional platform to the Bank to bolster its presence in
the country and share its policy dialogue experience with the other partners.
Institutional Development: Based on the measures that it embodies, PASRP V will help to
define capacity building needs at the Ministry of Trade, Business Promotion and Cottage
Industry, as well ministries and institutions involved in implementing the programme budget
and managing public procurement.
Recommendation: Management recommends that the ADF Board of Directors approve the
proposal to award to Burkina Faso a grant from ADF-XI resources not exceeding UA
10,000,000 in the form of general budgetary support, in accordance with the conditions set
out in this report.
Management also recommends that the ADF Board of Directors approve in favour of Burkina
Faso a loan note exceeding UA 16,685,075 accruing from the restructuring of five projects
(PADER-GK, PROGEREF, PADL-CLK, PAFICOT, RURAL ROADS), to finance Burkina
Faso’s Fifth Poverty Reduction Strategy Support Programme, pursuant to the provisions of
the RBCSP 2005-2011 extension paper, approved by the ADF on 22 June 2010, and
Resolution F/BD/2009/05 on Bank Response to the Economic Impact of the Financial Crisis
in Regional Member Countries.
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE AFRICAN
DEVELOPMENT BANK GROUP TO THE BOARD OF DIRECTORS CONCERNING
A GRANT AND LOAN PROPOSAL IN FAVOUR OF BURKINA FASO FOR THE
POVERTY REDUCTION STRATEGY SUPPORT PROGRAMME V
1. PROPOSAL
1.1 This report concerning a proposal to award to Burkina Faso a grant of UA
10,000,000 and extend to it a loan of UA 16,685,075 drawn from resources accruing from the
portfolio restructuring, to finance the Fifth Poverty Reduction Strategy Support Programme
(PASRP V), is hereby submitted to the Board for consideration. It entails general budgetary
support to be implemented in 2010 as part of the general budgetary support arrangement
concluded in January 2005 by the Bank, eight other technical and financial partners (TFPs)
and the Government. It constitutes the Bank’s contribution to Government efforts to cope
with the adverse impact of the global economic recession and the September 2009 flooding,
as well as its response to the requests addressed to it by the Government in September 2009
and May 2010.
1.2 The Programme is a follow up to the previous PASRP IV supported by the Bank
and other bilateral and multilateral donors including, in particular, the World Bank and the
European Union. It is based on the framework note defining the main thrusts of the country’s
future development strategy entitled “Strategy for Accelerated Growth and Sustainable
Development” (“Stratégie de croissance accélérée et de développement durable - SCADD”),
adopted in March 2009, and on the Government’s Action Plan to cope with the effects of the
9 September 2009 flooding and the financial and economic crisis, adopted in June 2009. The
formulation of PASRP V took into account the principles of the Paris Declaration, the Accra
Agenda on Aid Effectiveness and the principles of good practices in conditionalities. It is in
line with the priorities of the Bank’s Country Strategy Paper extended to 2010 – 2011 (cf.
§3.1.1).
1.3 The identification of the Programme in September 2009 and its subsequent
appraisal in March and May 2010 were conducted in close collaboration with other
development partners, also members of the Budgetary Support General Framework (CGAB).
The overall objective is to support the implementation of Government’s action plan to
counteract the effects of the flooding and the international economic and financial crisis, as
well as assist it in pursuing the structural reforms defined in the sectoral action plan under the
Public Finance Strengthening Strategy (SRFP).
1.4 The Government of Burkina Faso requested from the Bank the use in the form of
budgetary support, supplementary resources derived from the balance of resources allocated
under ADF XI (a UA 10,000,000 grant) as well as those from restructured projects (UA
16,685,075, in the form of a loan), as part of its response to the impact of the global economic
crisis.
1.5 On 4 March 2009, the Boards of Directors approved Resolution F/BD/2009/05
concerning the Bank’s response to the economic impact of the financial crisis in its regional
member countries. The related document (ADB/BD/WP/2009/27) empowered the Bank to
provide a rapid and flexible response to cope with the negative impact of the crisis by
increasing or channelling additional resources through rapid disbursement operations.
Furthermore, the resolution authorizes the provision of support to borrowing countries eligible
2
for ADF resources, such as Burkina Faso, through an alternative or accelerated deployment of
available concessional resources, including the possible re-channelling of resources from
ongoing investment operations to budgetary support. To enable the disbursement of
supplementary resources to Burkina Faso by August 2010, the accelerated fourteen-day
circulation period option is proposed for this document in accordance with the above
Resolution.
2. COUNTRY AND PROGRAMME CONTEXT
2.1 Government’s Development Strategy and Action Plan for 2010
2.1.1 The Government initiated the preparation of a new development strategy for the
country (the “Strategy for Accelerated Growth and Sustainable Development – SCADD” to
replace the Poverty Reduction Strategy Paper (PRSP) in 2011. In that regard, a Framework
Note of the future strategy was adopted in March 2009 and is expected to be finalized end
2010. The main thrusts of the new strategy are (i) economic consolidation and accelerated
growth; (ii) private sector promotion; (iii) development of human capital and economic
infrastructure, and (iv) good governance promotion.
2.1.2 Pending the finalization of the SCADD, the Government has defined a Programme
of Action 2009-2010 to cope with the effects of the September 2009 flooding and the
international financial and economic crisis. The programme of action essentially aims at: (i)
monitoring economic conditions, (ii) boosting and supporting economic activities; (iii)
strengthening social protection programmes; (iv) safeguarding the viability of the financial
system; and (v) emergency actions following the 1 September 2009 floods.
2.1.3 The PASRP V will be based on SCADD orientations and priorities of the 2010
Action Programme to help offset the effects of the flooding and the international financial and
economic crisis, while simultaneously drawing on the SRFP. The main measures are
contained in the unified matrix of the performance and disbursement criteria under the
General Budget Support Framework (CGAB) 2010, jointly validated by the Government and
the technical and financial partners (TFPs) in May 2010.
2.2 Recent Socio-economic Trends, Constraints, Challenges and Prospects
(a) Recent Macro-economic and Social Trend
2.2.1 At the macro-economic level: Despite the difficult international economic context
marked by the escalation of food and energy prices and, more recently, by the global financial
crisis, Burkina Faso enjoyed relative macro-economic stability during the 2008-2009 period
with an average economic growth rate of 4.2%. This good performance resulted from sound
macro-economic management and implementation of structural measures under programmes
concluded with the development partners. In 2009, however, a slowdown in economic activity
due to combined impact of the cotton, energy, food, financial and economic crises as well as
the flooding that occurred in Ouagadougou following exceptional torrential rains on 1
September, led to a decline in growth (3.2% compared to 5.2% in 2008). In 2009, growth was
essentially driven by the extractive industry, the production of which increased by 12.2%, and
telecommunications (+9.4%). Inflation which stood at 10.7% in 2008 fell sharply to 2.6% in
2009 as a result of the decrease in the prices of petroleum and imported food products as well
as the good 2008/2009 farming season that helped to replenish stocks.
3
Box 1: Impact of the 2008 – 2009 Financial and Economic Crises and Government’s Mitigative
Measures
1. Impact of the crisis: (i) A decline in export earnings due the poor performance of the cotton sub-
sector; in 2008, cotton export earnings fell by 37.3% compared to 2007; (ii) high inflationary pressures
observed in 2008 (10.7%) and a decline in the competitiveness of businesses stemming from increased
operating costs; (iii); deterioration of internal balances, deficit of the overall balance (commitment basis)
excluding grants to GDP (13.8% in 2009), representing a decline of 5.4 percentage points in relation to
2008; (iv) a slowdown of economic growth in 2009 (growth rate stood at 3.2% as against 5.2% in 2008);
(v) deterioration of household living conditions and erosion of gains made in poverty reduction, based
on estimates, the proportion of the population living below the poverty line rose from 42.6% in 2007 to
43.2% in 2009.
2. Mitigative measures: (i) setting up of a ministerial committee to monitor economic conditions and
submit quarterly reports to the Council of Ministers on economic conditions and the necessary measures
to be taken; (ii) formulation and adoption of an action plan with the following thrusts: recovery and
support of economic activity, social protection and safeguarding of the viability of Burkina Faso’s
financial system; (ii) the cost of various measures envisaged for 2009 and 2010 (increased agricultural
output excluding cotton, restructuring of distressed businesses and promotion of SMEs, infrastructure
development, establishment of a social safety net and innovative mechanisms to lighten the burden of
households, a study and supervision of the structure of prices of major goods, and services and a special
programme for youth employment) is estimated at CFAF 434.6 billion, including CFAF 303.6 billion for
2010 alone.
Source: Burkina Faso Authorities
2.2.2 Public finance: Measures taken by the authorities to strengthen the control of the
transit of goods, organize collection by unit, as well various tax reforms helped to boost
Government’s revenue by 11.6% in 2009 compared to 2008. However, the intended tax ratio
target of 17% of the GDP (minimum) fixed by WAEMU, is far from being achieved, given
that it was only 12.6% of the GDP in 2009. Total expenditure increased by over 20% in 2009
compared to 2008, notably in view of expenditure committed by the Government to cushion
the effects of the financial crisis on household purchasing power, pay domestic arrears and
expenditures related to the 1 September flooding, the single cost of which represented 2% of
GDP. Thus, the budget deficit including grants (commitment basis) stood at 5.4% of GDP
compared to 4.4% in 2008.
2.2.3 At the monetary and credit level: Money supply rose by 8.3% at end 2009 in
relation to 2008, thanks to the 3.6% increase in net external assets and 4.7% in net domestic
credit. However, the financial health of the banking system has remained satisfactory despite
the vulnerability factors related to the developments observed in the cotton sector.
2.2.4 At the external accounts level: Already in 2008, the external position had
deteriorated with a deficit current account of 11.9% of GDP as a result of the decline in cotton
export volume and prices. In 2009, the current account deficit improved significantly to 9.1%
of GDP. Factors accounting for this are: (i) the fall in the price of oil during most of the year;
(ii) the recovery of world cotton price; (iii) increase in gold exports (CFAF 161.2 billion in
2009 compared to CFAF 70.2 billion in 2008) driven by a rising world market price.
However, the deficit remains high relative to the pre-crisis situation when it averaged 8% of
GDP.
4
2.2.5 The public debt: the public debt stock stood at CFAF 1,087.5 billion at end
December 2009, compared to CFAF 925.99 billion in 2008, representing a 17.5% increase. It
consists of the external debt involving CFAF 918.7 billion (84.48% of total outstanding debt)
and the domestic debt amounting to CFAF 168.80 billion (15.52% of total outstanding debt).
The debt service, which amounted to CFAF 88.86 billion at end December 2009, comprised
external and internal debts of CFAF 23.8 billion and CFAF 65.06 billion, respectively. The
domestic debt service includes payment of arrears. The last debt sustainability analysis carried
out jointly by the IMF and the World Bank projects an increase in the net present value of the
debt to exports ratio from 113.9% in 2009 to 120.6% in 2010, reaching 184% by 2018. Thus,
the risk of a debt overhang is high and the debt management capacity low.
Source: IMF Report No. 10/7 of January 2010
2.2.6 With regard to social indicators, notable progress has been made. Gross enrolment
rate rose from 60.7% in 2005 (55% for girls) to 72.4% in 2009 (67.7% for girls). Health
facility attendance rate increased from 32% in 2005 to 51% in 2009. Child mortality fell from
89 per thousand in 2001 to 79.8 per thousand in 2008. Lastly, in 2008, access to drinking
water reached 72% in urban areas compared to 56% in rural areasii. In spite of these
encouraging results, poverty has been aggravated by the international financial crisis, the
impact on the economy and household purchasing power of which is undeniable. Government
estimates indicate that the incidence of poverty rose from 46.4% of the population in 2003 to
43.2% in 2009. The results of the ongoing comprehensive household living conditions will
provide up-to-date data on poverty in the country. With the current trend, the probability of
reducing the incidence of poverty to 35% by 2015 is low.
(b) Governance Situation
2.2.7 The state of governance in the country has been improving. Transparency
International corruption perception index ranks the country among the 10 least corrupt
countries in sub-Saharan Africa and the WAEMU zone. Furthermore, the Country Policy and
ii The 2005 data on access to water was not reliable enough to be used as reference.
Box 2: Impact of the Ouagadougou 1 September 2009 Flooding.
1. Physical impact: (i) twelve bridges were damaged and several roads destroyed; (ii) the main
hospital was flooded, destroying expensive and critical bio-medical equipment; (iii) Government
buildings were damaged and office equipment lost; (iv) an important storage facility for agricultural
seeds was destroyed; (v) some 24,000 private homes were destroyed; and (vi) about 1,360 small
agricultural producers lost their crops and reserves.
2. Macro-economic impact: The impact on growth is limited because agricultural production and the
road network outside Ouagadougou were unaffected. However, fiscal impact is substantial because of
higher expenditure to cover the cost of temporary housing and basic necessities, and the rapid
restoration of key infrastructure
3. Costing and financing: The impact of the flooding is estimated at around CFAF 82 billion (2% of
GDP). The authorities allocated CFAF 26 billion in 2009 and CFAF 18 billion will be allocated in
the 2010 budget, i.e. a total CFAF 44 billion, to address the humanitarian, relocation and
reconstruction needs. A thorough costing will be carried out in the next few weeks, with assistance
from the World Bank. The authorities hope to mobilize financing from donors, which has been
limited so far.
5
Institutional Assessment (CPIA) conducted by the Bank classifies Burkina Faso amount the
most performing countries in the area of governance. In the 2009 assessment, on a scale of 1
(low) to 6 (high), the country obtained a score of 4.22 for Public Sector Management and
Institutions, in the Bank’s CPIA report (see Annex 7- ranking of Burkina Faso CPIA 2007-
2009). These improvements have resulted from recent efforts by the authorities to strengthen
control institutions, notably the creation of the Autorité Supérieure de Contrôle de l’Etat
(ASCE) (High State Oversight Authority) and the publication of the Court of Accounts’
annual reports.
(c) Medium-Term Constraints, Challenges and Prospects
2.2.8 Despite the sound macro-economic performance, progress in the area of human
development has been limited. The major challenges may be summarized as follows:
Enhancing the economic competitiveness: Despite recent progress in
competitiveness, Burkina Faso was ranked 127 out of 134 countries with a
score of 3.4 on a scale of 1 to 7iii
. The major constraints facing the country
include the high costs of factors of production, internal and external isolation
compounded by inadequate infrastructure and public utilities, a cumbersome
tax system, a weak judicial system as well as poor access to financing. The
table in Annex 5 shows a comparative competitiveness profile of five
WAEMU countries including Burkina Faso in 2009. The three other countries
(Guinea-Bissau, Niger and Togo) were not covered in the 2009 Report. The
table indicates that Burkina was ranked last among the WAEMU countries.
More effort is required to improve the country’s ranking on the economic
competitiveness indicator. Details of the country’s scores with regard to basic
requirements, efficiency factors and innovation that contribute to improved
competitiveness performance are given in Annex 5.
Diversifying the economy: The country’s economy remains relatively
undiversified with cotton, gold and livestock products as the main export
commodities. This has made Burkina Faso highly vulnerable to external
shocks (fall in cotton prices, poor rainfall, etc.) while limiting its borrowing
capacity. The drastic reduction of the ADF-11 allocation in 2010iv
resulted
from this situation.
Improving the effectiveness and efficiency of public expenditure: The recent
public expenditure reviewv conducted jointly in 2009 by the Government, the
Bank, IMF, World Bank and UNICEF highlighted the “Burkina paradox”.
Indeed, there was a relatively strong economic growth over the 2000 – 2009
period accompanied by a double-pronged effort in public financial reform and
increased public spending in the social sector (health and education).
However, this performance, which was hailed by the international
community, did not translate into significant human development. This is
attributable to: (i) a judicial framework that is not conducive to the
implementation of modern public finance management tools; (ii) a budget
preparation process that has witnessed notable improvements but remains
iii The 2009-2010 report on Africa’s competitiveness (prepared in collaboration with the African Development Bank, the World Economic Forum and the World Bank). iv The 2010 review classified Burkina-Faso among the list of countries with a high debt overhang. v The Report was validated through a workshop that the Government and partners organized on 11 and 12 February 2010.
6
cumbersome and inefficient; (iii) an unwieldy expenditure chain that is
incompatible with the flexibility and speed required for programme budgets
and result-based management; and (iv) lastly, the poor performance of
supervisory and control structures that are not adequately resourced.
Developing human capital: Despite efforts made by the authorities in recent
years, human capital development remains a major challenge, as indicated by
the last UNDP Human Development Report ranking. The poor quality of
educational and health systems, the relatively low life expectancy at birth (57
years), the general mortality rate of 15.2%, and the high population pressure
are some of the challenges that must be addressed. Notwithstanding the
notable achievements made in reducing the prevalence of HIV/AIDS (1.6% in
2007 compared to 7% in 1998), the pandemic remains a major concern in
view of the fact that it affects the 15-49 age group the most.
2.2.9 With regard to prospects, estimates over the medium and long term by Burkina
Faso authorities project the following: (i) an average economic growth of 6% thanks to the
recovery of the mining, agricultural, food and industrial sectors, albeit at a slightly lower level
(4.4%) in 2010; (ii) an average 2% inflation rate due the increase in food supply; (iii) a
projected worsening of the external account deficit (-10.5% of GDP in 2010 but expected to
improve from 2011 onwards); (iv) the budget deficit, excluding grants, (commitment basis)
will remain high at -11.7% of GDP in 2010, pending a significant improvement in the public
finances situation resulting from the reform that is expected to trigger a decline in the deficit
to -8.6% of GDP up to 2014.
2.3 Status of the Bank Portfolio
2.3.1 The active portfolio of the Bank comprises twenty (20) operations amounting to a
total UA 279.6 million. The portfolio review conducted in May 2009 indicated an overall
satisfactory performance, with a 2.2 rating. Indeed, the Bank’s reaction time is now shorter
and the average time taken for the analysis of tenders has decreased sharply from one year to
less than two months. Furthermore, the average lead time for the effectiveness of operations
which was 15 months, has been halved. In 2009, 14% of projects were at risk (an
improvement from 33% in 2006), mainly attributable to delays in entry into force of project
agreements approved prior to 2007. The average age of the portfolio has also improved from
5.3 years in 2006 to 3.7 years in 2009. However, problems persist, notably: (i) slowness in
procurement; (ii) weak project monitoring/evaluation mechanisms; and (iii) poor performance
of contactors. Recommendations to the Government and the Bank are being implemented.
3. RATIONALE, KEY ELEMENTS OF PROGRAMME DESIGN AND
SUSTAINABILITY
3.1 Linkages with CSP and Analytical Bases
3.1.1 Linkages with CSP: The PASRP V is in keeping with the Bank’s intervention
strategy defined in the RBCSP 2005-2009 which was extended to 2010-2011. The extension
was based on the SCADD Framework Note and the 2009-2010 Action Programme designed
to cope with the effects of the September 2009 flooding and the international financial and
economic crisis. To that end, a budgetary support of UA 26,685,075 is recommended. This
will be taken from the balance on the ADF XI allocation (UA 10,000,000 as grant) and
resources stemming from the project restructuring operation (UA 16,685,075 as loan). The
7
two pillars of the Bank strategy remain unchanged: (i) promoting diversification of the
economy; and (ii) improving the living conditions of the population, notably vulnerable
groups.
3.1.2 Conditions precedent: Burkina Faso has met the conditions precedent outlined in
the budgetary support guidelines, namely (i) economic and political stability; (ii) the
Government’s commitment to adopt the Development Budget Support Loan (DBSL); (iii) the
existence of a country development strategy supported by the entire civil society; and (iv) the
existence of an acceptable fiduciary framework backed by relevant reviews (PEFA and CPAR
in 2007, RDP in 2009) involving the Bank’s participation and culminating in a Strategy and
Action Plan for enhanced public finance management. PASRP V will be implemented within
a budgetary support harmonization framework, namely the CGAB-PRSP designed to facilitate
regular dialogue between the Government and the major TFPs, especially on the fight against
corruption, capacity building, transparency and accountability.
3.1.3 Analytical work: A number of analytical and consultative studies back the
budgetary support operation proposed. The annual consultations under the PRSP, dialogue
with the Government and other development partners during the CGAB/PRSP biannual
review (last review in April 2010) and the Public Finance Strengthening Strategy (SRFP, last
review in February 2010), as well as discussions on the preparation of the action programme
to address the impact of the financial crisis and flooding led to a consensus on the priorities
retained in the PASRP V. On financial governance, the recent analytical studies conducted
comprise: (i) a Public Expenditure and Financial Accountability (PEFA 2007, the one for
2010 is being finalized); (ii) the 2007 Country Procurement Assessment Review (CPAR); and
(iii) the 2009 Public Expenditure Review (PER), finalized in February 2010. Moreover, the
IMF undertakes regular macro-economic and financial performance assessments under the bi-
annual PRGF programme which ends in June 2010. The conclusions of the sixth review are
given in Annex 3. A new programme called “Extended Credit Facility” will take over.
Finally, the recent surveys of Doing Business (World Bank, 2010) and Africa Competitiveness
Report have identified obstacles to private sector development and areas that need urgent
attention.
3.2 Collaboration and Coordination with Other Donors
3.2.1 The Government and nine (9) Technical and Financial Partners (TFPs), members of
the PRSP General Budget Organizational Framework (PRSP-CGAB), signed an MOU aimed
at improving the predictability of budget supports. To implement the MOU, the Government
and the partners defined a rolling performance and disbursement matrix. Two joint annual
sessions for reviewing the latter and the implementation of the PRSF (in April for the annual
review and in September/October for the mid-term review), are organized by the Government
with the participation of partners. The satisfactory assessment of the implementation of the
matrix of measures for the previous year (year n-1) enables the disbursement of budgetary
support for the current year (year n). The implementation of PASRP V falls under the CGAB-
PRSP. The disbursement conditions of the single disbursement of PASRP V stem from the
2010 matrix of performance and disbursement criteria.
3.3 Results and Lessons from Similar Programmes
3.3.1 The Bank has already implemented four budgetary support programmes in Burkina
Faso. Overall, the programmes have been satisfactorily implemented and have contributed to
maintaining about 5.4% annual growth since 2001, together with a significant improvement in
8
enrolment rate, access to drinking water and health. For 2008 and 2009 (period covered by the
Bank’s latest programme - PASRP IV), growth stood at 5.5 % and 3.2%, respectively, despite
the 2009 global crisis.
3.3.2 The lessons from previous programmesvi
, particularly PASRP IV, are as follows: (i)
the relevance of pursuing the implementation of the PRSP through a general budgetary
support mechanism to enhance ownership in defining and implementing development
policies; (ii) the need to develop the capacity of the administration to ensure greater
ownership and better monitoring of reform programmes; (iii) the need to pursue efforts to
improve the business climate for private sector development and diversify the economy not
only to enhance the contribution of private businesses to GDP, but also to reduce the
vulnerability of the economy to external shock and vagaries of the weather; and (iv) the need
to pursue the reforms aimed at enhanced transparency in public finance management in order
to raise the internal resource mobilization level and improve the effectiveness of public
spending.
3.3.3 For the Bank, the aim is mainly to: (i) pursue general budgetary support, (ii) take
into account the short timeframe for implementing budgetary support programmes to target
reforms to be supported, their schedules as well as monitoring indicators; (iii) define the
conditionalities in such a manner as to adapt them to the trend of indicators/measures of the
performance and disbursement criteria.
3.4 Linkages with Other Ongoing Bank Operations
3.4.1 Similar to other TFPs and in implementing the Paris and Accra Declaration, the
Bank provided regular support to Burkina Faso during the ADF XI three-year period. In that
regard, PASRP V constitutes the second budgetary support under ADF XI whose
disbursement, in a single tranche, will cover the year 2010. The last operation (PASRP IV)
amounting to UA 45 million was disbursed in two tranches (a UA 25 million grant in 2008
and a UA 20 million loan in 2009).
3.4.2 PASRP-V has high complementarity and linkages with other Bank interventions in
Burkina Faso. In particular, it supports the public finance management reforms of which the
aspects related to capacity building are covered by the Project in Support of Public
Expenditure Programming and Control Institutions (PAI-PDC) with an ADF grant of UA 2.4
million, approved on 27 October 2006. By improving public finance governance and
contributing to economic recovery, the programme also supports the objectives of other
projects in the Bank’s portfolio, notably those in the transport sector (34.23% of net
commitments), agriculture and rural development (29.82%), water and sanitation (18.26%)
and the social sector (16.81%).
3.4.3 Lastly, the programme contributes to regional integration efforts by fostering the
application of regional standards and guidelinesvii
, especially in the area of public finances
and public procurement. In this context, the Bank supports the WAEMU initiatives
particularly through the Public Procurement Reform Support Project (UA 4.5 million grant)
and the Harmonized Public Finance Framework Reform Support Programmeviii
(at the
vi See the PASRP-IV Completion Report: ADF/BD/IF/2009/305 vii Transposition of new WAEMU guidelines on public finance adopted in June 2009. The WAEMU Guidelines on Procurement adopted in 2006. viii The Bank, World Bank, IMF, AFRITAC and UNDP have undertaken to mobilize the necessary resources and support the
implementation of this regional programme following the November 2009 Roundtable.
9
identification phase). PASRP V will provide support to Burkina Faso in the transposition of
new community guidelines in the area of public finance, notably through the introduction of a
programme budget and consolidation of public procurement reforms.
3.5 Comparative Advantages of the Bank
3.5.1 The experience acquired, the positive results achieved by the Bank in implementing
previous budgetary support operations (PASRP-I to IV) and its large portfolio of projects in
Burkina Faso provide it with major assets to support private sector and financial governance
reforms. In particular, recent reforms aimed at establishing a sound national policy and
improving public procurement under PASRP IV, as well as various studies initiated under
PAI-PDC helped to establish and maintain rich dialogue with the Government and other
TFPs. Consequently, the opening of a field office (BFFO) has helped the Bank to take part in
decision-making processes within the CGAB-PRSP. It has fulfilled the role of the CGAB-
PRSP and SRFP Lead Donor in 2008. With this presence on the ground, the Bank is actively
participating in dialogue on aid effectiveness.
3.6 Good Practice Principles for the Application of Conditionalities
3.6.1 In designing PASRP V, the five (5) principles of good practices for the application
of conditionalities were observed. Indeed: (i) the strengthening of ownership stems from the
fact that the Programme has been designed with the active collaboration of the authorities and
is based on the SCADD Framework Note and the Government’s Action Plan to offset the
effects of the economic and financial crisis and the flooding; (ii) the Government and
technical and financial partners have agreed to adopt the CGAB-PRSP as the framework for
coordinating budgetary support operations; (iii) the modalities of the Bank’s support are in
keeping with national priorities; (iv) the disbursement conditions are few in number and
derive from the joint (Government-Partners) matrix; lastly (v) the Bank’s support is aligned
with the budget cycle.
3.7 Application of the Bank Group Policy in Non-Concessional Loans.
3.7.1 As part of the implementation of the Poverty Reduction and Growth Facility
(PRGF) concluded in 2007 with the International Monetary Fund, no non-concessional loan
can be contracted by the Government during the period of implementing PASRP V.
4. THE PROPOSED PROGRAMME
4.1 Programme Objectives
4.1.1 The Fifth Poverty Reduction Strategy Support Programme (PASRP V, 2010) aims
to support the implementation of Government’s 2009-2010 Action Programme to counteract
the effects of the September 2009 flooding and the international financial and economic crisis,
and support its pursuit of structural reform of financial governance. The specific objective is
to contribute to: (i) economic recovery and stability of the macro-economic framework; and
(ii) improving public finance management and public procurement.
10
4.1.2 The expected outcomes of the Programme are: (i) contribution to safeguarding
economic growth which is expected to increase from 3.2% in 2009 to 4.4% in 2010, with the
inflation rate maintained below 3% and a budget deficit (including grants) below 5% of GDP;
(ii) the continued improvement of transparency and effectiveness of public expenditure with
better allocation and efficient execution of the budgets of the priority sectors in the short term,
an increase in the proportion of public tenders based on competition and reduction of the
duration of the procurement process.
4.2 Programme Components and Expected Outcomes
4.2.1 The programme consists of two main components: (i) support to economic
recovery; and (ii) enhanced management of public finances.
Component A: Support to Economic Recovery
4.2.2 This first component of PASRP V is based on the Government’s action programme
to cope with the impact of the flooding and the international financial and economic crisis.
Through this component, PASRP V will support recovery measures in the following two
areas: (i) support to stabilization of the macro-economic framework; and (ii) creation of
conditions conducive for economic diversification.
Sub-component A1: Support to stabilization of the macro-economic framework
4.2.3 Context and challenges: in recent years, the country has witnessed a series of
crises (cotton, energy, food, economic and financial) and flooding in September 2009, which
weighed heavily on the short term economic prospects. Thus, the growth rate stagnated at
3.2% compared to an initial estimate of 6%, as a result of a 10.4% reduction in cereal
production and 17% in cotton production. The cotton sub-sector which was the mainstay of
the economy is facing difficulties particularly due to the volatility of international market
prices that resulted in a fall in production and exports. This precarious situation of the
industry, which was further worsened by the financial crisis, had a negative impact on the
present value of the debt to exports ratio. Government’s action plan to overcome the effects of
the crisis was estimated to cost CFAF 309.08 billion, of which CFAF 303.6 billion earmarked
for 2010. TThhee ffllooooddiinngg rreessuulltteedd iinn aa hhiigghh nnuummbbeerr ooff vviiccttiimmss,, ddeessttrrooyyeedd sseevveerraall uurrbbaann
iinnffrraassttrruuccttuurree aanndd lleedd ttoo tthhee lloossss ooff ppaarrtt ooff aaggrriiccuullttuurraall pprroodduuccttiioonn.. TThhee bbuuddggeettaarryy iimmppaacctt ooff
tthhee ffllooooddss hhaass bbeeeenn eessttiimmaatteedd aatt CCFFAAFF 82 billion (2% of GDP).
4.2.4 Recent actions: To ensure that the action programme is effectively implemented,
the Government put in place a surveillance, early warning and follow up system through an
economic monitoring inter-ministerial committee that held its initial meeting in March 2010.
Concerning the cotton sub-sector, the Government took the following emergency steps: (i)
reduction of the price of fertilizers to the previous season level; (ii) clearance by Government
of the entire outstanding domestic arrears to cotton producers to the tune of CFAF 4.355
billion; and (iii) recapitalization of the main ginning company (SOFITEX) in view of the
sizable losses accumulated by the company (the Government’s share in SOFITEX rose from
35% to 65% after the operation). Similarly, fixing of the minimum price for the 2010/2011
season at CFAF 182/kg (1st choice) as against CFAF 160 for the 2009/2010 season, as well as
the payment of CFAF 8/kg cotton seed bonus will serve as an incentive to producers. These
measures backed by improved productivity resulting from the expected widespread use of
11
cotton BTix
and the start of a recovery of world cotton price should encourage the return of
several farmers to cotton cultivation. Thus, the last consultations between the Government
and sector stakeholders indicated that production could increase to at least 40% compared to
the 2009/2010 season. At the social and humanitarian level, the authorities allocated CFAF 26
billion in 2009 and CFAF 18 billion to cover the resettlement and reconstruction needs of the
victims of the 1 September 2009 flooding.
4.2.5 Programme Measures: The PASRP will support Government financing of the
balance, as at 31 December 2009, of the consolidated debt of SOFITEX (estimated at CFAF
17.6 billion, excluding interests) intended to facilitate the financial and banking sector
financing of the 2010/2011 season. The buyback of the consolidated debt will constitute proof
of the achievement of this measure. In addition, the World Bank through its 11th
Poverty
Reduction Support Credit (PRSC) supports the following measures scheduled to be completed
at the end of the first quarter of 2011: (i) launching of the rehabilitation of cotton companies,
notably by readjusting the cotton zones; and (ii) putting viable mechanisms in place to finance
cotton sector inputs.
4.2.6 Expected outcomes: The implementation of these measures, combined with those
already taken, should lead to the following results by the end 2010: (i) increase in cotton
production (in volume) by at least 40% compared to the previous season which will induce a
real GDP growth of at least 4.4% and an increase in export revenue.
Sub-component A2: Creation of conditions conducive for economic diversification.
4.2.7 Context and challenges: According to the 2009 Africa Competitiveness Report,
Burkina Faso performed poorly. It ranked 127th
compared to neighbouring countries: 96th
for
Senegal, 106th
for Benin, 110th
for Cote d’Ivoire and 117th
for Mali. The absence of a sector
policy paper for the Ministry of Trade, Business Promotion and Cottage Industry (MCPEA)
and a result-based management tool constitute a major impediment for actions aimed at
improving economic competitiveness and diversification of the productive base. The absence
of such a sector policy paper limits the choice of appropriate policies for sub-sectors to be
promoted and does not provide a clear guideline for reducing factor costs (energy, transport,
credit, etc.) which constitute the main bottlenecks impeding private sector development in
Burkina Faso.
4.2.8 Recent actions: To meet the challenges of economic diversification, the
Government formulated an export promotion strategy backed by an action plan that was
validated in February 2010. With the support of the Bank through PASRP IV, the
Government initiated the formulation of a national quality policy and a sector policy for the
MPCEA, which will be supported by an action plan and a results framework. An
organizational audit of the MCPEA is underway. With regard to the sector policy, the interim
report is expected by end September 2010.
4.2.9 Programme measures: The PASRP supports the above measures aimed at creating
enabling conditions for the diversification of the economy. The availability of the following
documents will constitute evidence of the implementation of measures supported by the
programme: (i) interim report of the MCPEA sector policy paper backed by an action plan;
(ii) provisional report of the organizational auditing of MCPEA; and (iii) the draft action plan
of the quality national policy paper.
ix « Bacillus Thuringiensis »
12
4.2.10 Expected outcomes: The implementation of measures contained in the programme
should help achieve, by end 2010, the following results: (i) a consistent and comprehensive
framework in the country for the reforms required to reduce factor costs and diversify the
economy; and (ii) the identification of capacity building needs and institutional measures to
enable the MCPEA acquire the necessary tools to carry out the reforms.
Component B: Enhancing Public Finance Management
4.2.11 This second component will support the Government’s efforts to enhance
effectiveness in public finance management. Specifically, it will contribute to the
implementation of the Public Finance Strengthening Strategy (2007-2015), and its Three-Year
Sectoral Action Plan (PAST). Two components were identified under the programme based
on the 2010 priorities of the PAST of the SRFP: budget programming and public procurement
reform.
Sub-component B1: Strengthening budget programming
4.2.12 Context and challenges: The budget programming approach has been tested since
1998 by some pilot ministries prior to its generalization in all ministries and institutions.
However, the setting up of this approach proved to be more challenging than expected.
Indeed, in view of the absence of a clear and global vision on its establishment, the experience
has been limited to the preparation of sector programme budgets of varying quality which
have never been formally adopted or effectively applied. The introduction of a programme
budget is a heavy and exacting reform which implies profound changes in tools and
adaptation of the legal and regulatory framework. The current challenge is the formulation of
an introductory strategy and implementation of the programme budget.
4.2.13 Recent actions: In view of the complexity of deploying the programme budget
approach, the Government has put in place the following structures to implement the process:
(i) the Steering Committee for Deployment of the Government Programme Budget (CP/BPE)
by Decision 2009-477/MEF/CAB of 29 December 2009 on the establishment, functions,
composition and operation; (ii) the Unit for Deployment of the Government Programme
Budget (CIBPE) by Decision 484/MEF/CAB of 29 December 2009 on the creation, functions,
composition and operation. Chaired by the Vice-Minister in charge of the Budget, the
Steering Committee is the monitoring and supervisory body for implementing the Programme
Budget, while the Unit placed under the responsibility of a Coordinator caters for its
deployment. The recruitment of a consulting firm for the formulation of the strategy is
ongoing.
4.2.14 Programme measure: The PASRP supports the setting up of a new public
management system initiated by the Government through the adoption of a result-based
approach. This support aims to strengthen the modernization of budget management through
the consolidation and widespread adoption of the programme budget approach. Proof of the
measure being retained in the PASRP V is the start of the study on the budget programme
deployment strategy as indicated by an instruction for services to begin.
13
4.2.15 Expected outcome: At the end of 2010, the country has a clear strategy to establish
and implement the programme budget.
Sub-component B2: Consolidation of the public procurement system
4.2.16 Context and challenges: The Government has made significant strides in
establishing a new legal and regulatory framework in accordance with international standards.
The major challenge relates to the effective application of the new public procurement
regulations in force since 1 July 2008.
4.2.17 Recent actions: Following the adoption of the legal framework, the following
actions were undertaken: (i) putting in place of an integrated public procurement system
(SIMP); (ii) decentralization of the DGMP in three ministries (Ministry of Infrastructure and
Hinterland Access (MID), Ministry of Agriculture and Fisheries (MAHRH) and Ministry of
Secondary, Higher Education and Research (MESSRS)) and in three regions (Sahel, Boucle
du Mouhoun and East) in 2008 and 2009; (iii) formulation of a capacity-building strategy for
procurement stakeholders in 2009; (iv) adoption of General Administrative Clauses (“Cahiers
des Clauses Administratives Générales”) as well as standard dossiers applicable to works,
supplies and equipment tenders as well as other services in 2009.
4.2.18 Programme measures: The Bank supports the public procurement consolidation
system. For 2010, the main measure aims to assess the functionality of the new system and
the effective enforcement of the regulation in order to enhance the transparency and
effectiveness of the public procurement system. To this end, the transmission to the Bank of
the instruction to begin the independent auditing of public procurement for the 2008 and 2009
financial years will constitute a programme measure.
4.2.19 Expected outcome: The deepening of the decentralization process, combined with
the implementation of recommendations from the audit should contribute to the achievement
of the following results: on the basis of data produced from the SIMP, the percentage of
contracts based on open competition is expected to increase from 69.97% at end 2009 to at
least 85% in 2010, and the percentage of public contracts signed within the validity period of
bids should rise from 18.52% in 2009 to 30% in 2010.
Box 3: Public Procurement Audit for 2008 and 2009
The auditing of procurement is set within the context of a constant search for rationalization and
improvement of public expenditure, and forms part of measures relating to the reform of
management of public procurement taken by the Government of Burkina Faso with the support of
the Technical and Financial Partners. Indeed, the new procurement code that entered into force in
July 2008 provides for conducting an independent audit to supervise and monitor the
implementation of regulations pertaining to procurement, execution and monitoring of contracts
and agreements.
The ex-post auditing of procurement is designed to assess compliance with the fundamental
principles of public procurement, namely: economy and effectiveness of the procurement process,
free access to public tender, equal treatment of bidders and transparency of procedures. This initial
audit, which will focus on contracts signed in 2008 and 2009, should help assess: (i) the quality of
procurement and execution of contracts at the national level for 2008-2009; (ii) the degree of
compliance with principles and procedures in force; and (iii) the relevance of the latter and
existing internal control mechanisms to manage public procurement.
14
4.3 Status of Programme Implementation
4.3.1 Following dialogue with the Bank, the Government undertook to put in place the
following measures prior to the presentation of PASRP V to the Bank’s Board of Directors in
July 2010:
Box 4: Measures Precedent to Board Presentation of PASRP V
Measure 1: Maintaining macro-economic stability in 2009 based on the conclusions of the IMF analyses and
studies of April 2010
Proof: IMF Communiqué
Measure 2: Satisfactory assessment of progress in public procurement management reforms (joint review by
SRFP partners of February 2010).
Proof: Government/TFPs Aide mémoire of the February 2010 review
Measure 3: Satisfactory assessment of progress in implementing the matrix of performance and
disbursement criteria of the CGAB-PRSP (April 2010 review).
Proof: Government/TFPs Aide mémoire of the April 2010 review
4.4 Financing Needs and Sources in 2010
4.4.1 The financing needs and sources of financing are as follows:
Table 1
Financing needs in 2010 (in CFAF Billion)
Source of expenditure 2010
Total revenue and grants
of which: tax revenue
812.7
509.7
1 031.0
529.1
15.4
503.9
-2.0
Total expenditure
of which: recurrent expenditure,
including interest payments
Capital expenditure
Net lending
Budget deficit (including grant) -218.3
Source: IMF Report No. 10/7 of January 2010
15
Table 2
Programme Financing 2010 (in CFAF Billions)
Source of financing 2010
Total financing 180.08
Internal 20.90
External 159.180
Financing gap (+ = surplus) - 37.92
Budgetary support
: - ADF 20.80
- IMF 5.82
- IDA 30.00
- European Union 35.00
- Denmark 4.47
- France 4.27
- Netherlands 13.45
- Switzerland 3.31
- Sweden 7.99
- Germany 5.90
- FTI - Education 22.50
- PN-WSS 5.67
Total Budgetary Support 159.18
Source: IMF Report No. 10/7 of January 2010
4.4.2 As Tables I and II above show, the deficit (including grants) of the national budget
in 2010 amounts to CFAF 218.3 billion. Internal and external financing already secured
amount to CFAF 180.08 billion. Table II shows a financing gap of CFAF 37. 92 billion which
will be covered by additional contribution from the EU under the “flex vulnerability”
mechanism, for which negotiations are ongoing.
4.5 Programme Beneficiaries
4.5.1 Overall, the main beneficiary of the Programme will be the Burkina Faso population,
especially disadvantaged groups that are victims of the effects of flooding and cotton cutters.
The direct beneficiaries are Government financial departments whose operational capacity
will be boosted through the implementation of public finance management rationalization
reforms, and the private sector which will enjoy a more appropriate framework for its
development.
16
4.6 Impact on Gender
4.6.1 Burkina Faso has made progress in the areas of political representation as well as
legal and institutional reforms aimed at achieving equal opportunities for women and
broadening their access to education and other social services. In this regard, the country
adopted in 2009 a National Gender Policy and passed a law on quotas on legislative and
municipal elections. The measures supported by the programme under consideration (for
instance improvement of the medium-term budget framework and resource allocation as well
as laying the foundation for economic diversification) are expected to foster the improvement
of the living conditions of women, particularly in rural areas. Similarly, efforts aimed at
minimizing the effects of the flooding will benefit all vulnerable population groups, including
women and children.
4.7 Impact on the Environment
4.7.1 PASRP V is classified under Category III in accordance with the Bank’s
environmental and social assessment procedures. Since PASRP V is a general budget support
operation, the policy changes and institutional reforms it will finance are likely to have major
direct effects on the environment and natural resources.
4.8 Other Programme Impacts
4.8.1 Impact on governance: The two components of the Programme are devoted to
economic governance and public finance management, as defined in the Bank’s Strategic
Orientations on Governance for the 2008-2012 period. The programme will have an impact
on governance with regard firstly to the strengthening of result-based management and,
secondly, in terms of the enhancement of transparency and effectiveness in public
procurement.
4.8.2 Impact on poverty reduction: The programme will contribute to cushioning the
effects that the crisis and the flooding have had on the most vulnerable population groups. In
particular, it will support Government’s effort to resettle victims on new developed sites and
rehabilitate destroyed social infrastructure (hospitals, bridges, schools, etc.). Besides, support
to the recovery of cotton production will help to increase the income of producers and thereby
improve their living conditions.
5. IMPLEMENTATION, MONITORING AND EVALUATION
5.1 Programme Implementation
5.1.1 Executing agency: The Ministry of Economy and Finance will assume the main
responsibility for implementing PASRP V. To this end, it will ensure that ministries and
relevant structures of the country’s Administration fully play their respective role in
implementing reforms and measures that fall within their area of competency. In practical
terms, the technical executing entity will be the Permanent Secretariat for the Monitoring of
Financial Policies and Programmes (SP-PPF) in the Ministry of Economy and Finance which
oversees all budgetary support programmes under the arrangement agreed to in January 2005
by the Bank, eight other Technical and Financial Partners (TFPs) and the Government. Under
the supervision of the Ministry of Economy and Finance, the SP-PPF will produce the reports
indicated under the CGAB-PRSP (mid-term review and performance report). The Bank will
closely monitor the implementation of the programme through BFFO. To achieve this, the
17
Bank will participate in all the joint sessions of the matrix of performance and disbursement
criteria defined by the CGAB-PRSP rules of procedure.
5.1.2 Procurement of goods and services: The grant and loan will be in the form of non-
targeted budgetary support. Consequently, the procurement of goods and services will be in
accordance with national procurement rules. The reformed national public procurement
system is of satisfactory quality.
5.1.3 Disbursements: Subject to the fulfilment by the Borrower/Recipient of the relevant
general and specific conditions mentioned in § 6.3 to 6.5 below, the ADF grant of UA
10,000,000 will be disbursed in a single tranche and the loan amounting to UA 16,685,075
will be released in five (5) disbursements, tied to the five restructured projects. In line with
the CGAB-PRSP protocol of agreement, disbursements will paid into a special account of the
Public Treasury opened at the BCEAO Agency in Ouagadougou. The references of this
account will be communicated to the ADF.
5.1.4 Audits: PASRP V will be audited pursuant to the relevant provisions of the CGAB-
PRSP. To this end, an audit of financial flows and an independent evaluation will be
conducted at the end of each financial period.
5.2 Monitoring and Evaluation
5.2.1 The Bank will monitor the programme at two levels. The first level will entail
coordination with the other budgetary support partners under the CGAB PRSP. Dialogue with
the Government will essentially be based on the organization of a biannual PRSP joint review
and the CGAB matrix (see paragraph 3.2.1). Thus, the programme will draw on and use the
national system of monitoring and evaluation in a coordinated and harmonized manner,
together with the other TFPs.
5.2.2 The second level of monitoring and evaluation of the Programme will occur as part
of the Bank’s supervision missions (twice annually) and based on the CGAG matrix The
Bank Field Office in Ouagadougou (BFFO), which participates in the dialogue with the
Government and other Technical and Financial Partners, will play a key role in monitoring the
programme. It has the necessary expertise to undertake this task successfully. The new PEFA
2010 review is ongoing and will once more assess the quality of the public finance
management and progress made.
6. LEGAL INSTRUMENTS AND AUTHORITY
6.1 Legal Instruments:
6.1.1 For the financing of the grant with ADF resources, a Grant Agreement will be
signed between the ADF and Burkina Faso.
6.1.2 A Letter of Agreement, which will indicate the resources released as well as
modalities of their disbursement, will be signed between the ADF and the Government with
regard to the restructured projects.
6.2 Resources derived from restructured projects: The resources derived from
restructured projects (see details in Annex 8), will consist of the balances from the following
18
six ADF loans: PADER-GK, PROGEREF, PAFICOT, PADL-CLK and RURAL ROADS.
All the relevant loan agreements will remain in force.
6.3 Actions precedent: Prior to the presentation of the programme proposal to the
ADF Board for approval, the Government of Burkina Faso shall provide the Bank with
evidence that the measures highlighted in Paragraph 4.3 as pre-requisites have been
implemented.
Conditions precedent to grant effectiveness
6.4 Effectiveness: The effectiveness of the Grant Protocol of Agreement will be
subject to its signing by the Recipient and ADF.
Conditions precedent to the disbursement of UA 26,685,075
6.5 Disbursement: The disbursement of the single tranche of the ADF Grant (UA
10,000,000) and those of resources from the portfolio restructuring (UA 16,685,075) will be
subject to the fulfilment of the following specific conditions:
(i) Start of the study on the strategy for deploying the programme budget
(paragraph 4.2.14)
Required evidence: the instruction to the service provider to start the study.
(ii) Launch of the independent public procurement audit of 2008 and 2009,
(paragraph 4.2.18).
Required evidence: the instruction to the service provider to start the audit.
6.6 Compliance with Bank Group Policies
6.6.1 The Bank’s Guidelines on Development Budget Support Lending in Regional
Member Countries set out in Document ADF/BD/WP/2003/182/Rev.2 of 28 April 2004, are
applicable to this Programme. Therefore, the Programme is in line with these Guidelines as
well as the Bank Group “Policy on Portfolio Review and Restructuring” and its “Response to
the Economic Impact of the Financial Crisis".
7. RISK MANAGEMENT
7.1 Risks and Mitigative Measures
7.1.1 Four kinds of risks could affect the implementation of the Programme: (i) socio-
political destabilization at both national and sub-regional levels; (ii) macro-economic
instability; (iii) fiduciary risks; and (iv) weak capacity to undertake the reforms.
7.1.2 Socio-political destabilization at the regional and national levels
a) At the sub-regional level: The impact on Burkina Faso of political instability
in neighbouring countries, notably Cote d’Ivoire, especially with the approach
of general elections in that country, must not be overlooked in view of the
19
interdependence of the economies of the two countries. The unrelenting
mediation efforts by the Government between the political factions in
neighbouring countries, have yielded results and preserved peace in the West
African sub-region. These efforts, which will certainly be pursued, will
mitigate the risk identified in that regard.
b) At the national level: The possible outbreak of social disturbances similar to
those of 2008, as a result of the persistent negative effects of the global
financial crisis on household purchasing power is not to be discarded. The
possibility of revising Article 37 (limiting the number of presidential terms of
office) of the Constitution has generated much discussion among the political
class and the civil society. Such revision could constitute a threat to social
peace. The current mobilization of the civil society and opposition parties
could contribute to the withdrawal of the proposed revision.
7.1.3 Macro-economic instability: The main macro-economic risk is the high
vulnerability of the country in the face of exogenous shocks (fall in world cotton and gold
prices, inadequate rainfall etc.), which could affect the medium- and long-term sustainability
of debt. To reduce this risk, the Government is determined to pursue the implementation of
the cotton sector and public finance reforms, including the improvement of the debt
management capacity, the financial sector and hopes to conclude a new programme with the
IMF.
7.1.4 Financial risks: The authorities of Burkina Faso have made considerable efforts in
recent years to strengthen public finance management and contain the effects of fiduciary
risks. To date, the procurement system has been completely overhauled and new management
and regulatory bodies have been put in place. Prior to this, the Government assessed the
reliability of the fiduciary reviews (CFAA, CPAR, PER and PEFA). Furthermore, PASRP V
will be implemented within the framework of the CGAB-PRSP which would enable regular
dialogue between the Government and the major TFPs, notably on issues of much concern
such as the fight against corruption, capacity building, transparency and accountability.
7.1.5 Inadequate capacity to undertake the reforms: Despite recent progress, the
country continues to suffer from lack of institutional and technical capacity at the public
administration level, which could result in delays in implementing the economic reform
programme. The Government’s willingness to pursue the reforms helps to mitigate the risks
related to institutional and management capacity for the reform programmes. Similarly, with
the support of the Bank and other development partners, the Government has implemented
various programmes aimed at building its medium- and long-term capacity.
8. RECOMMENDATION
8.1 From the foregoing, it is recommended that the Board of Directors approve an ADF
grant not exceeding UA 10,000,000 to the Government of Burkina Faso for implementing the
Programme, subject to the fulfilment of conditions set out in this Report, based on a 14-day
circulation period of the document as provided for by Resolution F/BD/2009/05 on the Bank’s
Response to the Economic Impact of the Financial Crisis in Regional Member Countries.
20
8.2 Management also recommends that the Board of Directors authorize the use of
resources from the restructuring of five projects (PADER-GK, PROGEREF, PADL-CLK,
PAFICOT, RURAL ROADS) in the form of a loan not exceeding UA 16,685,075 to finance
the Fifth Poverty Reduction Strategy Support Programme of Burkina Faso, pursuant to the
provisions of the RBCSP 2005-2011 extension paper, approved by the ADF on 22 June 2010,
and Resolution F/BD/2009/05 on Bank Response to the Economic Impact of the Financial
Crisis in Regional Member Countries.
I
Annex 1
BURKINA FASO
MINISTRY OF ECONOMY
AND FINANCE
No.2010 1516/MPB/CAB/SP-PPF
Ouagadougou, 11 June 2010
From: The Minister
To: Mr. Donald Kaberuka
President of BAD Group
Tunis (TUNISIA)
Subject: Letter of Development Policy
Mr. President,
The present letter of development policy (LDP) outlines developments in the socio-economic
situation of Burkina Faso in 2009 and its prospects for the next 2 years. It mainly draws on the
guidelines of the Strategy for Accelerated Growth and Sustainable Development (Stratégie de
Croissance Accélérée et de Développement Durable -SCADD) and the priorities of the 2010
action programme of the Government to offset the effects of flooding and the international
financial and economic crisis. The main measures for economic recovery and mitigation of the
effects of the economic crisis and flooding are contained in the unified matrix of performance and
disbursement criteria of the General Budgetary Support Framework (CGAB) 2010 jointly
validated by the Government and the technical and financial partners on 2nd
June 2010. The letter
mainly focuses on the implementation of the Government’s priority reforms supported by the
African Development Bank (ADB) through the Poverty Reduction Strategy Support Programme
(PASRP, Phase 5).
1. STATUS OF IMPLEMENTATION OF THE POVERTY REDUCTION STRATEGY
PAPER
1.1 The Government budget remains the reference framework for financing the priority
actions of the PRSP, which includes the Millennium Development Goals. The orientations
of the 2009 budget hinge on the PAP-PRSP 2009-2011 and the matrix of performance and
disbursement criteria of the same period. The presentation of the status of implementation
of the PRSP in 2009 is focuses on the four strategic thrusts: i) accelerating equity-based
economic growth; ii) guaranteeing access by the poor to basic social services and to social
protection; iii) widening equity-based employment opportunities and income-generating
activities for the poor; iv) promoting good governance.
II
A. ACCELERATING EQUITY BASED ECONOMIC GROWTH
1.2 The 2008-2009 period was marked by 3 major shocks: the energy and food crisis, the
international financial and economic crisis and a natural disaster on 1 September 2009
entailing heavy flooding. These shocks affected the external balance and the situation of
public finance of the country as well as household living conditions. These various factors
were underpinned by: i) the fall in cotton prices; ii) increase in the oil bill and cost of
agricultural inputs; iii) a slowdown of economic activity; iv) destruction of economic,
social and administrative infrastructure and v) a humanitarian crisis with nearly one
hundred and eighty thousand (180,000) victims.
1.3 In this crisis context, the Government took steps that resulted in additional spending in the
following areas: i) Recapitalization of SOFITEX to avert its collapse; ii) granting of
higher subsidies to cotton production to facilitate the purchase of fertilizers and pesticides
to safeguard production and protect the incomes of cotton producers; iii) granting of funds
for the repayment of internal arrears of associations of cotton producers to prevent cash
flow depletion which would have hampered cotton production; iv) implementation of
social protection programmes for vulnerable population groups; v) acceleration of the
repayment of domestic arrears to support economic activity; and vi) acceleration of the
payment of water and electricity bills to support the cashflow of the company’s
concerned.
1.4 The impact of these crises in 2009 translated into a slowdown in GDP growth which fell
from 5.2% in 2008 to 3.2%. This moderate growth was essentially driven by the
telecommunications and mining sectors. The inflationary pressures eased, chiefly as a
result of the decline in the international food and oil prices (second half of 2009). Indeed,
the average rate of inflation which was 10.7% in 2008 declined to 2.6% at end 2009. At
the level of balance of payments, the current balance (excluding grants) improved from a
deficit of 15.1% in 2008 to 10.8% in 2009. The factors that account for this improvement
are: i) a decrease in oil prices during a greater part of the year; ii) recovery of world cotton
prices; iii) increase in quantities of gold exported (CFAF 161.2 billion in 2009 compared
to only CFAF 70.2 billion in 2008) together with an increasingly high prices on the
world market. With regard to fiscal deficit including grants - (commitment basis), this
deteriorated from 4.4% of GDP in 2008 to 5.4% of GDP in 2009 mainly as a result of the
expenditures committed by the Government to mitigate the effects of the financial crisis
on household purchasing power, payment of internal arrears and expenditures related to
the flooding of 1 September whose costs alone represented 2% of GDP.
1.5 Regarding reforms relating to the improvement of the business climate, the National
Business Promotion Centre (“Maison de l’Entreprise du Burkina Faso” - MEBF) pursued
its consolidation process through decentralization designed to serve business start ups
throughout the country. Cities such as Ouahigouya, Tenkotogo, Kaya, Gaoua had their
CEFORE in 2009. This achievement boosted the ranking of the country in the Doing
Business 2010 report, from 155th
in 2009 to 147th
out of 183 countries. Thus, Burkina
Faso became the best reforming country within the WAEMU zone. Despite this progress,
other constraints persist and hamper the country’s economic competitiveness: high cost of
factors of production, internal and external isolation, aggravated by the inadequate public
utilities (electricity and water) weaknesses in contract execution, protection of investors,
formalities for cross-border trade, taxation and access to credit.
III
1.6 With regards to reforms aimed at creating conditions conducive to economic
diversification, the export promotion strategy as well as its action plan were validated in
November 2009 thus providing the country with a clear vision on growth sub-sectors that
need support in order to increase exports. Furthermore, the country has embarked on the
formulation of the National Quality Policy that will lead to the establishment of quality
infrastructure and the definition of a Burkinabe brand. However, the implementation of
the sectoral policy of the Ministry of Trade, Business Promotion and Cottage Industry was
delayed as a result of the protracted delays in the recruitment of a consultant.
B. GUARANTEEING ACCESS BY THE POOR TO BASIC SOCIAL
SERVICES AND SOCIAL PROTECTION
1.7 Access to basic education: During 2009 the Government’s decided to step up the
qualitative and quantitative development of basic education and literacy through the
consolidation of achievements of PDEBB, the only intervention framework in the basic
education sector for the 2001-2010 period. To achieve the MDGs, the qualitative
objectives in the sector were updated under the second phase of PDEBB (2008-2010),
whose main challenge was the updating of the educational policy of the Government
based on the diagnostic analysis conducted by the RESN in 2007 and specify the
commitments of Burkina Faso for the attainment of the MDGs. Thus, the main indicators
improved with the gross primary enrolment rate that increased from 72.4% in 2008
(including 67.7% for girls) to 76% in 2009 (including 72.4% for girls).
1.8 Access to primary services: To increase the health coverage of the population, the
Government, with the support of its technical and financial partners during 2009 stepped
up efforts to ensure better attendance of health facilities by improving the quality of
services and availability of quality essential medicines, as well as the strengthening of
support activities and health promotion. The aim would be to adopt and put in place a
system of operationalization and monitoring/evaluation of the contracting strategy
between the Ministry of Health and all the entities involved in the health sector. The
monitoring-evaluation system has been defined and is in keeping with the national health
information system. Furthermore, a guide on contracting was developed in 2009 and
NGOs selected on the basis of an invitation for proposals. They subsequently received
training to enable them supervise community-based executing organizations. In terms of
the sector indicators, the actions undertaken resulted in: i) an improvement of the
attendance of health structured form 49% in 2008 to 56% in 2009; ii) increase in the rate
of deliveries attended by health professionals from 61.5% in 2008 to 70.7% in 2009 and
standardization of CSPS in terms of quality human resources, which has now reached
83.2% compared to 76.26% in 2008, is a reflection of better quality service delivery for
the communities.
1.9 Impacts of crises and flooding on the living conditions of the communities: The various
crises (cotton and food in particular) contributed to a degradation of the living conditions
of the populations both in urban and rural areas. According to estimates, the overall
incidence of poverty rose slightly from 42.8% in 2008 to 43.2% in 2009. Specifically with
regard to the September 2009 flooding, it mainly affected the city of Ouagadougou
resulting in many victims estimated at 180,000 homeless persons. Also, several bridges,
roads and public buildings (schools, SCPS) were damaged, the country’s main hospital
lost its expensive and indispensible biomedical equipment, and 24,000 private homes
were destroyed. The estimated cost of the impact of the flooding is CFAF 82 billion (2%
IV
of GDP). Thus the Government allocated CFAF 26 billion from its 2009 budget and
CFAF 18 billion from the 2010 budget amounting to a total of CFAF 44 billion to cover
the humanitarian, relocation and reconstruction needs.
C. WIDENING EQUITY-BASED EMPLOYMENT AND INCOME-
GENERATING OPPORTUNITIES FOR THE POOR
1.10 This third thrust of the PRSP and its priority reform programme relates to the building of
the capacities of the poor to generate incomes by promoting their participation in the
production process. In the area of reform, a law on security of land tenure in rural areas
was passed in 2009 after a long participatory process following the adoption of the rural
land tenure policy in 2007. This law aims to promote productive investments in the
agricultural sector and lay the grounds for the modernization of agriculture and its
integration into the market economy. However, the implementing instruments are
undergoing formulation.
D. PROMOTING GOOD GOVERNANCE
1.11 This fourth thrust mainly relates to financial good governance. Thus, the main actions
undertaken in 2009 as part of the implementation of the Three-Year Sectoral Action Plan
(PAST) of the Public Finance Enhancement Strategy (SRFP) aimed at consolidating the
achievements.
1.12 Concerning public procurement management, the major reforms pursued are: i)
decentralization of the DGMP, in three ministries (Ministry of Infrastructure and
Hinterland Access (Ministère d’Infrastructure et de Désenclavement- MID), Ministry of
Agriculture, Water Resources and Fisheries (MAHRH) and Ministry of Secondary and
Higher Education and Scientific Research (MESSRS) and three regions (Sahel, Boucle du
Mouhoun and the East); ii) Formulation of a capacity building strategy of the stakeholders
involved in the public procurement; iii) adoption of the general administrative clauses
guidelines as well as the standard files for the procurement of works, supplies and
equipment as well as other procurement services. Furthermore, access by the private
sectors to information on public tenders has been strengthened with the renovation of the
DGMP website, notably the creation of suppliers’ columns and online subscription to the
public procurement review. In terms of results, 18.5% of public contracts were signed
within the period of validity of the tenders in 2009. With regard to transparency, the share
of public procurement based on open competition was 70% in 2009 as against 75% in
2008.
1.13 In the control and fight against corruption, accountability is being enhanced through
the production within the timeframe stipulated by the budget review act and the regular
publication of the annual reports of the Court of Accounts, publication of the initial public
report of the High Authority for State Oversight (Autorité Supérieure de Contrôle de
l’Etat - ASCE). The actions undertaken translated into an improvement in the corruption
perception index of Transparency International that awarded a 3.6 rating in 2009
compared to 3.5 in 2008 by classifying Burkina Faso among the leading countries in the
area of economic governance in Africa.
V
2 OUTLOOK FOR THE YEAR 2010
2.1 To offset the effects of the various crises namely, cotton, energy, food, finance and
flooding of 2009, the Government has formulated an action plan entailing the following:
i) monitoring of economic conditions ii) emergency actions following the 1 September
2009 flooding iii) boosting and support to economic activity iv) strengthening of social
protection programmes v) preservation of the viability of the Burkina Faso and WAEMU
financial system. The total cost of the programme is estimated at CFAF 434.6 billion,
comprising CFAF 309 billion for the crisis, representing 71.1% and CFAF 125.5 billion
for the flooding, namely 28.9%. Of this, CFAF 126.9 billion will be financed from the
national budget with a financing gap of CFAF 307.7 billion.
A. Support to economic recovery
2.2 Support to the stabilization of macro-economic framework: To ensure the effective
implementation of the action programme designed to mitigate the effects of the flooding
and the international financial and economic crisis, the Government has put in place a
system of surveillance, early warning and monitoring through the creation of an inter-
ministerial committee for the monitoring of economic conditions which held its fourth
meeting in March 2010. The main expected outputs are safeguarding of economic growth
which is expected to rise from 3.2% in 2009 to 4.4% in 2010 with an inflation rate
maintained at 3% and a fiscal deficit (including grants) of below 5% of GDP.
2.3 Concerning the cotton industry, the following emergency measures were taking to boost
cotton production in 2010/2011: i) Subsidies for fertilizers sold to producers, i) fixing of
the minimum per kg price at CFAF 182 (1st choice) as against CFAF 160 for the
2009/2010 season; iii) payment of a bonus of CFAF 8/kg of cotton seed. In addition to
these measures, the Government hopes to undertake the following actions; i) financing by
the Government of the consolidating debt of SOFITEX (estimated at 17.6 billion
excluding interests), in order to facilitate the funding of the coming season by the banking
and financial sector; ii) launch of the improvement of the efficiency of all the cotton
companies, notably through a rezoning of cotton areas; iii) putting in place of a viable
mechanism to finance the cotton sector inputs. These measures, together with improved
productivity resulting from the expected generalization of cotton BT and the beginning of
a recovery of the world price, should contribute to boosting the sub-sector and increasing
production by at least 40% compared to the 2009/2010 season
2.4 Support to the establishment of the bases of economic diversification: To meet the
challenges of diversification of the economy, the Government has formulated an export
promotion strategy backed by an action plan. With the support of the African
Development Bank group through the PASRP 4, the Government undertook to formulate
a quality national policy and a sectoral policy for the NPCEA that will be supported by an
action plan and a results framework. An organizational audit of NAPCA is also ongoing.
The interim sectoral policy report is expected for end September 2010.
B. Improved public finance management
2.5 Concerning the improvement of budget programming, in recent years the Government
has embarked on a reform of the budgetary framework, which is expected to lead to the
relinquishing of the “medium budget” approach for a “programme budget” one. To this
VI
end, the Government has put in place a unit and a steering committee for the
establishment of the programme budget. The main activity planned for 2010 is the
preparation of a strategy paper for the establishment of the programme budget, which
should be available by end 2010. Once completed, this reform is expected to improve
consistency in resource allocation with the sectoral priorities and effectiveness in the
implementation of development programmes.
2.6 Regarding the consolidation of the public procurement reform, the Government will
pursue the decentralization of the DGMP in 3 new ministries and 3 new regions.
Furthermore, within the context of the control and monitoring of the implementation of
regulations pertaining to the procurement, execution and control of contracts and
agreements, the Government hopes to undertake an independent auditing of 2008 and
2009 procurement under the supervision of the Public Procurement Regulatory Authority
(ARNP). These measures aim to strengthen and ascertain the enforcement of the
regulations on public procurement. Thus, in terms of result, it is expected that the share of
public contracts awarded through competition will increase and the time-frame for public
procurement will decrease.
2.7 The Government is convinced that with the support of the ADF through the 5th
Poverty
Reduction Support Programme (PRSP 5), the satisfactory implementation of the priority
actions will contribute to consolidating the macro-economic framework and stronger,
sound and sustainable economic growth required for a significant reduction of poverty.
2.8 Please accept the assurance of my high esteem.
Lucien-Marie Noel Bemba
Officer of the National Order
VII
Annex 2
UNIFIED MATRIX OF PAP-PRSP AND CGAB-PRSP 2010 MEASURES
(27/05/2010 version)
N° Measure Definition of Measure Responsible
Structure(s)
PILLAR I: ACCELERATING EQUITY-BASED GROWTH
Improving business climate to promote private sector
1
Adopt the MCPEA sector
policy document and
formulate its action plan
.
Adopt the MCPEA sector policy document and formulate its action
plan
This measure aims to address the challenges of economic
diversification and meet the need to have a strategic vision and a
comprehensive framework of the entire MCPEA policies and
strategies of the (legal reforms on the business climate, exports,
standards and the Burkinabe brand, financing instruments,
institutional capacities, private sector with emphasis on SMEs/SMIs,
communication strategy). The adoption in Council of Ministers of
the sector policy document and the availability of the action plan
will serve as evidence of the achievement of the measure.
MCPEA
2
The Government has
submitted to parliament a bill
for the setting up of a legal
framework on public - private
partnerships (PPP)
This measure aims to promote public–private partnership and clarify
the sharing of risks between participants. The Government will put
in place a unit for the effective management of PPP contracts, with
the provision of buildings, human resources, equipment and budgets
required for the running of the new administrative structure. Since
the council of minister’s minutes indicates that the bill has been
adopted, this constitutes proof of the implementation of this
measure.
MEF+MCP
EA
3
The Ministry of Economy
and Finance signed a decision
that clarifies the modalities
for the refund of the VAT to
businesses.
This measure aims to improve the cash flow of beneficiary
businesses that have been refunded the VAT credit including
exporting companies. The signed decision constitutes proof of the
achievement of the measure.
MEF
Enhancing competitiveness and reducing factor costs
4
Formulate two sectoral cyber
strategies to foster the
mainstreaming of ICTs in
sectoral development
policies.
The Government will formulate two sectoral cyber-strategies in
2010: e-government and e-commerce. The availability of the two
cyber-strategies will constitute proof of the achievement of this
measure.
MPTIC
5
The council of ministers
adopted an action plan to
liberalize road transport.
This measure aims to liberalize road transport. The plan will
include: i) the conducting of a study identifying road transport
operators and documenting their incomes derived from this
economic activity; ii) a deadline for concluding negotiations with
transport owners unions; iii) a time-bound objective for the
complete abolition of the system of turn-taking together with other
land-locked countries with the establishment of a monitoring-
evaluation system based on multi-year sampling; iv) the objective of
abolishing regional quotas based on agreement with coastal
countries; v) putting in place of a more stringent control system to
combat axle overload. Since the council of ministers adopted the
plan, it constitutes proof of the implementation of this measure.
MT
6 Adopt the transport sector
strategy and its action plan.
Since the report of the council of ministers adopted the strategy it
will constitute proof of the achievement of the measure. MID+MT
Support to productive sectors
VIII
7
Finalize the studies on –
enhancing the backwashing
mechanism; - set up a fund
for cotton inputs.
The availability of the studies will constitute proof of the
achievement of this measure. MCPEA+ME
F+AICB
8
Formulate a plan for the
readjustment of cotton areas
to make them more viable.
In order to improve the viability of the cotton sector, the
Government has finalized a plan for the rezoning of cotton areas in
coordination with the inter-professional cotton association of
Burkina (AICB) and, to kick start its implementation, has put up a
bid for the transfer of cotton areas from SOFITEX to the private
sector. The rezoning scheme and the transfer bid constitute proofs
of the achievement of the measure.
.
MCPEA
9
The Government has
published the notice for the
recruitment of a reference
technical partner for the
management of a refrigerated
abattoir of Ouagadougou
following significant
promotional efforts
.
This measure forms part of the framework for the improvement of
the operational conditions of the abattoir aimed at increasing its use
for slaughter and meat export to the detriment of livestock and its
attraction for the private sector. Publication of the recruitment
notice constitutes proof of the achievement of the measure.
MCPEA,
MRA,
PAFASP
10
The Government has
submitted a bill to parliament
on the revised mining code
which is an improvement on
good governance and the
socio-environmental impact
of the sector and has
published an initial EITI
report
.
This measure aims to promote the mining sector while preserving
the environment of the sector. The EITI report and the minutes of
the council of ministers passing the bill constitute proof of the
implementation of this measure.
MMCE
PILLAR II: IMPROVING ACCESS BY POOR TO BASIC SOCIAL SERVICES AND SOCIAL PROTECTION
Education
11 Formulate secondary
educational mapping.
Educational mapping is an effective micro planning tool in an
educational system. It fosters a rational management of human,
material and financial resources. Consequently, it indicates the
geographic apportionment of a department or a city into educational
sectors. The latter adjust the geographic apportionment of teaching
posts and pupils in public establishments. Lastly, it enables the
ministry to plan the opening and closing of schools in accordance
with the estimated number of pupils. The formulation of the
educational standards document involves the formulation of the
school mapping document. The draft educational standards
document will serve as proof of the achievement of this measure.
MESSRS
12
Establish a multi-year system
of agreements in conjunction
with the project manager with
the aim of strengthening the
strategy for the construction
of educational infrastructure
and facilities.
The rate of construction of infrastructure is not in keeping with
educational demand. Thus the application of the project
management principle has been recognized for NGOs since 2007.
This salutary strategy has however been encountering difficulties
partly due to the signing of the agreements. This situation has
resulted in the delayed provision of educational infrastructure. The
multi-year agreements signed will constitute proofs of the
implementation of the measure.
MEBA
13
Finalize and adopt the
operational capacity building
plan of the MEBA
The implementation of Phase 1 of the PDDEB has been inadequate
as a result of the weak capacity of the entities in charge of its
implementation. The formulation and adoption of the enhancement
plan in 2010 will be proof of this measure.
MEBA
Health
IX
14
Release the first emergency
kit for the management of
severe malaria among under 5
year olds and pregnant
women.
The aim will be to ensure the constant availability in all public
health facilities of the complete kits of medicines and consumables
needed for the management of severe malaria in accordance with
the relevant official protocol. To achieve this in 2010, 150 000 and
20 000 kits will be procured for under 5-year olds and pregnant
women respectively. The delivery notes of the kits will constitute
proofs of the effective implementation of this measure.
M Health
(DLM)
15 Conduct sectoral review.
This will entail sharing the results of the various actions previously
undertaken among all the actors, partners and decision makers and
outlining the prospects for and creating a new impetus for the
development of the sector. The objective is to enhance sectoral
policy dialogue. The report on the sector review will constitute a
proof of the achievement of the measure.
M Health
(DEP)
16
Adopt the health sector
response plan for HIV/AIDS
and STIs.
This will entail the preparation of a document based on the health
policy guidelines, notably the fight against HIV/AIDS. The
specificity of the contribution of the health sector will be
highlighted. Proof of the achievement of this measure will be the
adoption of the document at the CASEN of the Ministry of Health.
Mo Health
(CMLS) +
SP/CNLS-
IST
17 Adopt the PNDS 2011-2020.
Following the PNDS 2001-2010, the aim will be to provide the
sector with a 10-year strategic plan for the 2011-2020 period
(PNDS 2). As an effective reference document of planning, it will
serve as the basis for the operational planning at the sector level.
Proof of this measure will be the adoption of the document by the
PNDS monitoring committee.
M Santé
(DEP)
18 Conduct the human resource
situation analysis
This will entail a review of health human resources. The situation
analyst is a key stage for the formulation of a health human resource
development plan. Proof of this measure will be the report of the
analysis.
M Health
(DRH)
19
Assess emergency obstetric
and neonatal care (EONC)
needs
This will entail the provision of basic data to guide policy, planning
and the establishment of priorities for reproductive health in order
to strengthen the health system with EONC as the entry point.
Specifically it will aim at: 1) ascertaining the availability of
infrastructure; 2) determining the availability of medical equipment,
essential medicines and supplies for EONC; 3) Assessing various
practices concerning the payment of obstetrical services ;
4)Determining the availability of human resources that carry out the
seven lead functions of EONC and the availability of services 24/7;
5) measuring the level of knowledge and skills of human resources
with regard to obstetrical and neonatal care; 6) undertaking the
review of partogram, cases of caesarean deliveries and maternal
deaths. The proof of the achievement of this measure will be the
report of this evaluation.
M Santé
(DSF)
Water and Sanitation
20
Establish the baseline case in
waste water and excreta
sanitation in rural areas
This measure, which is strategic for monitoring access to rural
sanitation, is in line with the MDGs; the technical note establishing
the reference situation and the method of updating of the rate of
access to family sanitation will serve as proof of the achievement of
this measure
DGRE/DGA
EUE/ INSD
21
Validate Programme Budget
2010-2012 of the water and
sanitation sector and take into
account its financing in the
priorities of the MAHRH.
The report of the PN-WSS steering committee session at which the
programme budget by objectives will be approved will serve as
proof of the achievement of this measure.
MAHRH
(DGRE)
X
Social Protection for the Poor
22
Conduct feasibility studies
for the establishment of
universal health insurance
system.
The studies to be conducted concern:
- definition of a basket of care;
- relationship between insurance and care delivery;
- financial strategy and governance;
– management system;
– legal and regulatory framework;
-communication strategy.
The validated reports of these studies will constitute proofs of the
achievement of this measure.
MTSS
PILLAR III : BROADENING EQUITY-BASED EMPLOYMENT AND INCOME-GENERATING ACTIVITIES
23
Put in place structures and
develop guides and tools for
rural land security.
The national rural land security policy was adopted on 4th
October
2007 and the act on the rural land tenure system on 16th
June 2009.
For their effective implementation on the ground, instruments that
should help in the production of deeds and facts relating to rural
land tenure are necessary. Moreover, management structures will
help with the effective enforcement of the regulations. Adoption of
eight priority instruments will constitute proof of the achievement
of this measure.
MAHRH
24
Adopt the national livestock
sustainable development
policy of Burkina Faso.
The adoption of this policy reflects the importance the Government
attaches to the development of the livestock sub-sector to combat
poverty and ensure national economic growth. The report of the
council of ministers on the adoption of the policy will serve as proof
of the implementation of the measure.
25
Implement a programme of
institutional and legal reforms
for decentralization in the
forestry sector.
This measure falls within the framework of implementation of the
decentralization and transfer of skills for the management of
forestry resources to the local communities. This will entail the
adoption of policy documents for building the capacities of local
communities and the creation and management of conservation
areas. The adoption of policy documents and communal forestry
management regulations constitute a proof of the achievement of
the measure.
MECV
26
Organize a joint sectoral
review for the rural
development sector.
As part of the creation of enabling conditions for the formulation
and implementation of a productive rural development sector
program (PROSDRP), a rural sector review will be organized aimed
at enhancing dialogue between the various stakeholders for a shared
vision on rural development. The availability of the aide-memoire
of the review will constitute proof of the achievement of the
measure.
MAHRH+M
ECV+MRA
27
Ensuring the regular
operation of the food security
information system (SISAN)
and the management of food
security and intervention
stocks by making sufficient
allocations of at least CFAF
385 million for the SISAN
and CFAF 1 billion for the
security stock in the 2010
budget law and CFAF 425
million and CFAF 1 billion in
2011.
The regular running of the SISAN is contributing to the effective
management of food security. The allocation of these amounts in
the 2011 budget for and the 2010 budget execution report will serve
as evidence of the achievement of this measure.
MAHRH
XI
28
Formulate the national rural
development sector
programme.
This programme aims to ensure the consistency of investments in
the productive rural sector (agriculture, animal resources and
environment) and promoting the sub-sector approach in the rural
sector. This measure will be assessed on the basis of the availability
of at least an initial version of the original document in 2010.
MAHRH+M
ECV+ MRA
PILLAR IV : PROMOTING GOOD GOVERNANCE
Administrative Governance
29 Formulate the charter of quality
public service.
The charter of quality public service defines the principles and
general rules governing the administration in terms of transparency,
professionalism and ethics. The holding of the meetings on the
charter of quality public service will be the proof of fulfilment of
this measure. MFPRE
30
Adopt the ten year
modernization strategic plan of
the Government
.
This programme aims to promote the modernization of public
administration and local Government. The correspondents of
consultants transmitting their interim reports will constitute the
proof of the measure in 2010.
Political Governance
31 Adopt the national gender policy
support plan.
This measure aims at the equitable development and equality of
rights in access to public services. The report of the council of
ministers on the adoption of the PNG support plan will constitute a
proof of its achievements.
MPF
32 Revise the criminal code.
The revision of the criminal code aims at the constant search for a
balance between the protection of individual liberties and the
effectiveness of law enforcement. Thus, provisions applicable to
minors will be formulated and some offences will be sent before a
court of summary jurisdiction. This is the case of some qualified
theft, notably the most common crimes will be downgraded into
offences and judged by magistrate courts with heavy sentencing.
Furthermore, appearing at a hearing will be optional in order to
enable decisions based on evidence. This reform will help minimize
transfers of cases for no appearance of parties and, consequently,
the diligent trial of cases. Also, alternative sentencing to
imprisonment (work of general interest, semi liberty, conditional
liberty, etc) will be intensified. Lastly, the revision of the criminal
code will help introduce other alternative measures such as repeal of
the law, conditional classification, in order to decongest the prisons.
The interim report of the consultant constitutes proof of the
achievement of this measure.
MJ
Local Governance
33
Adopt the three-year action
2010-2012 plan of CSMOD
and prepare the annual report
2009.
This measure aims to ensure the implementation of the CSMOD.
Adoption by the CONAD of these 2 documents is proof of the
achievement of this measure. MATD
Economic Governance
34
Develop a risk mapping for
the control structures, ensure
its ownership notably by
conducting an audit in three
pilot ministries.
In its role as the technical coordinator of the entire administrative
control bodies and in order to indentify and quantify the risks of
each ministerial department according to the common analytical
grid, the ASCE will take ownership of this audit by risks approach.
Audit by risks is a means of promoting the performance and
coherence of Burkina Faso ministerial inspection services. When
the approach by risks is correctly implemented, it helps to enhance
the effectiveness of control services and direct their resources,
which are necessary limited, towards the most significant risk
zones. The availability of the report on this study will constitute
proof of the achievement of this measure.
ASCE
XII
35 Issue approvals to project
management agencies (MOD)
The rate of construction of infrastructure is not in line with that of
the demand for education. Thus, it was recommended that the
delegated ownership system be applied to NGOs since 2007.
However, this salutary strategy is encountering challenges partly
due to the issuance of approvals. This situation has resulted in the
delayed availability of educational infrastructure. The approvals
issues will constitute proofs of the achievement of the measure.
MEF
36
Adopt the sectoral strategy
and the institutional strategic
plan of the MEF and putting
in place the system of
monitoring-evaluation of the
strategy.
This measure aims to provide the MEF with a unique sectoral policy
that will enable it effectively accomplish its mission of
implementation of the Government’s policy with regard to the
economy, finance and strategic planning. The element of proof for
the achievement of the measure will be based on the production of
the sectoral policy document adopted by the council of ministers.
MEF (SP-
PPF/DEP/TS
)
37
Conduct the second
evaluation of the public
finance management system
using the PEFA
methodology.
This would aim at assessing the impact of the reforms on the
effectiveness and the transparency of public finance management
based on the PEFA methodology by identifying the major strengths
and weaknesses as well as their potential impact on budgetary
outcomes that would help establish comprehensive strategies for
improving overall fiscal discipline, strategic allocation of resources
in line with the objectives of the public policy and operational
efficiency of the organization of public services. The PEFA report
will constitute the proof of the achievement of this measure.
MEF/TFPs/S
RFP
38
Pass the 2011 budget bill
based on the sectoral ceilings
of the general MTEF 2011-
2013 in keeping with the
priorities of the PRSP
(SCADD).
This measure will test the will of the Government to translate its
commitment into deeds by implementing its poverty reduction
programme in accordance with the priorities defined in the PRSP.
Its implementation will be assessed on the basis of a report by the
Ministry of Economy and Finance (DGB) presenting a comparative
analysis of MTEF sectoral envelopes and the 2011 budget bill based
on the priorities (education, health, rural development, etc) of the
PRSF.
MEF (DGB)
39
Formulate and adopt the
strategy for the establishment
of the programme budget.
This will aim at providing the MEF a document that describes the
modalities for improving consistency between the public
expenditures and the objectives of sectoral policies and the missions
of ministerial departments. Its implementation in 2010 will be based
on the availability of a draft strategy document, a manual of
procedures and a guide for the preparation of programme budgets.
MEF
(CP/CIBPE)
40
Pursue the implementation of
the overall fiscal policy
strategy.
This will aim at disseminating the 5 laws passed in January 2010,
formulating implementing instruments, updating the SINTAX
software, preparing training modules, training tax personnel,
undertaking information and awareness activities and undertaking
the monitoring-evaluation of the strategy. Once the instruments are
passed and stabilized, they will be the object of the formulation of a
general tax code. The DGI will produce a review report of its annual
activities that will highlight the status of implementation of these
various activities. The annual activity review report of the DGI will
serve as the element of proof.
MEF (DGI)
41
Adopt a general anti-fraud
strategy paper backed by an
action plan
This measure falls part of efforts to strengthening the control and
fight against fraud aimed at sanitizing the public finances. It seeks
to define a framework for combating fraud in order to effectively
organize the actions of the CNF. The availability of the general
antifraud strategy document backed by an action plan will serve as
proof of the implementation of the measure.
CNLF
XIII
42
Formulate, adopt and
implement the procurement
plans of the ministries and
institutions on the SIMP.
.
The aim would be to undertake the comprehensive processing of all
the phases of the public procurement of ministries and institutions
through the SIMP to ensure transparency, speed and better tracking
of operations. The PPM implementation report on the SIMP will
serve as evidence of the fulfilment of the measure
MEF
(DGMP)
43
Operationalize the capacity
building strategy for public
procurement: Training on the
standard documents and the
general administrative clauses
(CCAG).
This involves the implementation of the training programme on new
standard documents and the CGAGs in order to enhance the
capacities of stakeholders in preparing the various procurement
documents. Modules on the new regulatory framework will be
taught during these training sessions. The training report including
the dates of implementation, profiles and number of participants
will serve as proof of the achievement of the measure.
MEF
(ARMP/DG
MP)
44
Adopt and implement the
MEF action plan to accelerate
decentralization.
This measure aims to assess the commitment of the MEF to provide
substantial support to the implementation of the decentralization
implementation strategic framework (CSMOD); the action plan
adopted by the MEF in 2010 will serve as proof of the fulfilment of
the measure.
MEF
(DGB+DGT
CP+ DGEP
+DGAT)
45
Execute the sanctions by the
court of accounts for
management offences
detected from the previous
audit to 2010
Sanctions against management offences will constitute the proof of
the implementation of this measure Court of
Accounts
46
Update the national
anticorruption policy paper,
adopt and implement the
action plan.
This revision aims to take into account the inadequacies noted in the
initial version of the document and the new institutional context
marked by the creation of the ASCE to replace the HACLC and the
IGE. The availability of the revised policy document and the action
plan will constitute proof of the implementation of the measure.
ASCE
47
Undertake public
procurement audit for 2008
and 2009.
The ex-post procurement audit, in view of the fundamental
principles of public procurement management, aims to enable the
authorities have an opinion on the quality of procurement and
implementation of tenders at national level (for 2008-2009) and on
the degree of adherence to the current principles and procedures
since the setting up of the new system. The submission of the audit
report will constitute proof of the execution of this measure.
MEF
(ARMP)
48
Over 50% of DCIM credits of
the 2010 finance act
effectively executed are
indicated in the statistical
data of 2010 according to
administrative and functional
classifications in order to
improve the effectiveness of
their management, enhance
transparency and prepare
their transmission to
programme budgets.
The aim would be to change the budget information system to a
refined reporting on the allocation of resources to ministries and
institutions as part of the transition towards programme budgets by
2015. – For the recovery and flooding plan measures: allocation of
credits to sectoral ministries concerned for execution (adjustment
decree). – For expenditures relating to water, electricity, telephone,
fuel, purchase of vehicles and tax and customs exemptions, project
counterpart funds and cotton inputs, the putting in place a statistical
system for the allocation to each ministry and functional category of
expenditures corresponding to their actual use. The coverage of
water, electricity and telephone expenditures will concern
subscriptions in the Ouagadougou region
MEF(DGB+
DGPE)
MONITORING EVALUATION
XIV
49
Complete the studies and
release the results of the
comprehensive survey on
household living conditions
(EICVM).
This survey will help make more comprehensive information on
households available in order to gain better knowledge of their
living conditions, the health of children and mothers, HIV/AIDS,
reasons that account for population movements, employment and
education. The choice of this survey is in response to the
multidimensional nature of poverty. It will include variables
generated by the QUIBB, EBCVM and EDS module. The statistical
programme entails the continuation of the comprehensive survey on
household living conditions (EICVM) whose results are expected in
2010. The availability of the EICVM will constitute proof of the
fulfilment of the measure.
MEF (INSD)
50
Prepare the strategy for the
speedy growth and sustainable
development (SCADD)
The availability of the SCADD will serve as proof of the
achievement of the measure.
All the sector
ministries
(lead
ministry:
MEF)
XV
UNIFIED MATRIX OF PAP-PRSF AND CGAB-PRSP 2010
N° Indicator
2009
Achieveme
nt
2010
Objective Sources
PILLAR I : ACCELERATING EQUITY-BASED GROWTH
Poverty
1 Overall poverty incidence 43.20% 41.60% MEF
(DGEP/DPAM_IAP/
PAMS)
2 Urban poverty incidence 20.60% 21.40%
3 Rural poverty incidence 48.80% 47.50%
Macroeconomy
4 Real GDP growth 3.20% 4.40%
MEF (DGEP/DPAM) 5 Average annual inflation 2.60% 3.00%
6 Basic fiscal balance in % of GDP -5.50% -4.70%
Private Sector and Economic Competitiveness
7 Annual number of foreign investors attracted 172 200 MCPEA
(DGPSP/MEBF)
8 Annual number of business start-ups by women 621 700 CEFORE/MEBF
9 Annual number of processing units created 59 70 MCPEA (DGPSP,
DGDI,MEBF)
10 Time required to complete business registration
procedures (working days) 14/5 12/3
Doing Business
Report + CST
Report/private sector
and competitiveness
11 Trend of salaries declared to CNSS 224 208 241 438 MTSS (CNSS)
PILLAR II: IMPROVING ACCESS BY POOR TO BASIC SOCIAL SERVICES AND SOCIAL
PROTECTION
Education
Preschool
12 Gross pre-school enrolment rate 2.80% 5.73% MASSN (DEP)
Primary
13
Gross intake rate
MEBA (DEP):
Statistical Directories
National 85.80% 87.70%
Boys 87.60% 89.10%
Girls 83.80% 86.10%
14
Gross enrolment rate
National 74.8% 77.10%
Boys 78.30% 79.70%
Girls 71.20% 74.40%
15
Primary completion rate
National 45.70% 51.40%
Boys 47.20% 54.60%
Girls 42.50% 48.20%
Effectiveness of system
XVI
16 Pupil/teacher ratio 54 55
MEBA (DEP) 17 Numeracy book/pupil ratio 1.19 1
18 Literacy book/pupil ratio 1.17 1
Literacy
19 Number of newly declared literates 130 849 153 036
MEBA (DGAENF) Of which women 76 524 109 764
Secondary
20
Gross secondary enrolment (1st cycle)
MESSRS (DEP)
National 20.10% 22.10%
Boys 23.60% 25.60%
Girls 16.60% 18.60%
21
1st cycle intake rate
National 25.10% 27.15%
Boys 29.50% 31.50%
Girls 20.80% 22.80%
22
1st cycle completion rate
National 15.80% 17.85%
Boys 18.40% 20.40%
Girls 13.30% 15.30%
Health
23
Immunization rate by antigen
DGISS/DPV
(Statistical
Directories)
BCG 106.18 100
DPT-Hep-Hb3 103.04 100
Measles 99.57 100
Yellow fever 99.54 100
24 Number of new contacts / year in first cycle
structures (CSPS et CMA) 0.56 0.59 DGISS (Statistical
Directories) 25 Percentage of CSPS meeting staffing standards (%) 83.2 85
26 Percentage of GEDs at CSPSs without shortage of 20
“tracer drugs”. 91.54% ≥ 95 %
DEP/HEALTH
(Synthesis of
progress reports)
27 Proportion of AIDS patients with ARV justifiable
treatment and who are under ARVs 52% 65.20%
SP-
CNLS/CMLS/HEAL
TH (Annual report)
28 Rate of delivery attended by a qualified health
worker 70.70% 72%
DGISS/DEP Santé
(Statistical
Directories)
29 CPN 2 coverage rate 73.82% 76%
MOH / DGISS
(Statistical
Directories)
30 Rate of contraceptive use (contraceptive prevalence rate) 26.10% 28.00%
31 Lethality of severe malaria among under 5-yer olds 2.9% 2%
32 HIV infection seroprevalence rate 1.60% 1.47% UNAIDS (Annual
Report)
Improving Access to Drinking Water*
33
Access to drinking water
National N/A N/A
Urban (ONEA) 72% 76% ONEA
XVII
Rural 56.63% 62% MAHRH (DGRE)
34
Rate of access to sanitation
National N/A N/A
Urban (ONEA) 19% 28% ONEA
PILLAR III : BROADENING EQUITY-BASED EMPLOYMENT AND INCOME GENERATING
ACTIVITIES
Plant Production
35 Apparent cereal coverage rate 117% 119%
MAHRH (DEP)
36 Poverty cereal coverage rate 47% 42%
37
Developed acreage for irrigated agriculture per annum
Large and medium schemes 1645 2952
Small irrigated schemes 396.2 860
Bottom lands 1700 4072
38 Cereal acreage with improved seeds (ha) 584 401 761 780
Animal Production
39 Newcastle disease immunization coverage rate 16.97% 50% MRA (DEP)
Fish Production
40 Annual fish production (in tonnes) 12 000 13 000 MAHRH (DEP)
Forestry Production
41 Quantities of wood production in developed areas 150 000 150 000
Opening up
Road Infrastructure
42 . Cotton tracks 580 350
MID (DGPR)
. Other (rural and departmental roads) 989 500
43
Kms of feeder roads maintained
. Cotton tracks 1 050 750
. Other (rural and departmental roads) 3 431 2 250
44
Rate of electrification
MMCE (DGE) Total 19.9%** 26%
Rural 3.62%** 3.93%
PILLAR IV: PROMOTING GOOD GOVERNANCE
Local Governance
45
Share of budget transferred to local governments:
Regions and communes (excluding debts, externally-
funded project, in % and on the basis of budget act
appropriations)
2.90% 3% MEF+MATD
Political Governance
46 Number of rural communes without security service 156 141 M Security
47 Rate of increase of number of prisoners under OMD
(ordre de mise à disposition) 48% 30%
MJ (DEP)
48 Average duration taken to treat commercial cases 7 months 6 months
Economic Governance
49
Rate of collection of tax revenue (%) MEF (DGI, DGD,
DGTCP, SP-PPF) Budget act 92.2 ≥ 93
ECF (Extended Credit Facility) Programme 106.8 ≥ 95
XVIII
50
Budgetary allocations of priority sectors (excluding
debt, externally-funded projects and counterpart
funds) (%)
33.20 33.20
MEF (DGB) Health 11.79 12.00
Basic education 15.97 15.60
Economy and finance 5.44 5.60
51
Budget execution rate (liquidation basis) (%)
MEF (DGCF) Health 99.1 ≥ 90
Basic education 99.33 ≥ 90
MEF 98.94 ≥ 90
52 Share of public contracts awarded within tender
validity period (%) 18.52 30%
MEF (DGMP)
53
Distribution of public contracts by procurement
process (%) :
Open competition 69.97 > 85
Limited competition 13.62 < 10
Direct negotiation 16.41 < 5
54 Time taken to produce and transmit :i) management
accounts; ii) budget review bills Compliant Compliant MEF
55 Court of accounts public report Compliant R 2009 Court of Accounts
56 Annual general activity report of the Higher
Authority of Government Oversight (available) Compliant R 2009
ASCE
57 Annual perception of corruption by Transparency
International 3.6 3.8
* Provisional data, final data expected for end June 2010
* *In the absence of data for 2009 achievements, the 2008 data was considered.
The pre-school and water and sanitation indicators do not include the GSHHP 2006.
XIX
Annex 3
RELATIONSHIP WITH THE INTERNATIONAL MONETARY FUND
Press Release N° 10/241 of 14 June, 2010
The Executive Board of the International Monetary Fund (IMF) today approved a new three-year
arrangement under the Extended Credit Facility (ECF) for a total amount equivalent to SDR 46.154
million (about USD67.7 million) for Burkina Faso. The approval will enable the first disbursement of
an amount equivalent to SDR7.454 million (about USD10.9 million).
The new arrangement is designed to support the authorities’ program to consolidate recent progress
and enhance growth prospects and poverty reduction efforts. The program will focus on fiscal
consolidation to sustain macro-economic stability, and on a reform agenda geared to supporting
private sector development.
At the conclusion of the Executive Board discussion on Burkina Faso, Mr. Murilo Portugal, Deputy
Managing Director and Acting Chair, stated:
“The Burkina Faso authorities are to be commended for maintaining sound economic policies and the
momentum of structural reforms in the last three years, despite a challenging environment marked by
several exogenous shocks. Good policy performance contributed to macro-economic stability,
supported poverty reduction efforts, and helped mobilize needed budget support. The authorities’
timely response mitigated the impact of the global economic downturn and unfavourable weather
conditions in 2009 on the cotton sector and the poorest segments of the population.
“The authorities’ medium-term policy and reform framework, which is supported by a new three-year
arrangement under the Extended Credit Facility, seeks to enhance growth prospects and further reduce
poverty. A stronger budget position will be essential to support macro-economic stability and debt
sustainability. Priority will be given to further improving revenue performance, including by
implementing the tax reform strategy adopted in early 2010. Steps will also be taken to restrain non-
priority spending, to create fiscal space for pro-poor outlays and investment. Prudent borrowing
policies and economic diversification will also be critical for long-term debt sustainability.
“The structural reform agenda gives priority to promoting private sector development through
financial sector reforms, rehabilitation of the cotton sector, and further improvements in the business
environment. Continued support from Burkina Faso’s development partners remains important for the
program’s success in accelerating growth and achieving a sustained reduction in poverty,” Mr.
Portugal added.
ANNEX
Recent Economic Developments
In 2009, economic activity was negatively affected by the impact of adverse shocks. The global
economic crisis affected the cotton sector; and unfavourable weather conditions weighed heavily on
economic activity and domestic demand. Real GDP growth slowed to 3.2 percent compared with 5.2
percent in 2008. The CPI stood at 2.6 percent, down from 10.7 percent in 2008, mostly reflecting the
decline in global food and fuel prices. Meanwhile, the external position strengthened in 2009 thanks
to higher exports and improved terms of trade. The increase in exports reflects a strong performance
in cotton volume and a surge in gold volume and prices. Imports stagnated because of the low
XX
economic activity and the decline in global oil prices. With the large increase in official transfers, the
external current account deficit narrowed from 11.7 percent of GDP in 2008 to 6.3 percent of GDP in
2009.
Fiscal performance was consistent with countercyclical policies in response to adverse shocks.
Expenditure increased to 24.2 percent of GDP, from 21.6 percent of GDP in 2008, partly reflecting
one-off outlays to cope with the impact of the global economic downturn on the cotton sector, and
emergency spending generated by the September floods in Ouagadougou. Revenue rose by 0.5
percent of GDP to 13.6 percent of GDP, mostly because of measures introduced to strengthen tax
administration and combat tax evasion. The basic primary budget deficit widened only moderately to
5.2 percent of GDP compared with 4.6 percent of GDP in 2008.
The medium-term outlook remains favourable. Economic growth is expected to pick up gradually. It
will be driven mostly by the anticipated expansion in agriculture and gold production, and higher and
more effective public investment. The expected global economic recovery, and new investment in the
mining sector will also support growth.
Program Summary
Under the new ECF-supported program, the government aims to (i) consolidate the fiscal position and
preserve macro-economic stability; (ii) safeguard debt sustainability, and (iii) support private sector
development. The macro-economic objectives of the government’s program are:
Raise the real GDP growth above 6 percent by 2013;
Contain inflation below 3 percent;
Reduce the external current account deficit to 8.7 percent of GDP by 2013 from 10 percent in
2011;
Reduce the overall budget deficit from 5 percent of GDP in 2010 to 3.4 percent of GDP in
2013.
The structural reforms will focus on:
Intensifying measures linked to revenue collection and expenditure management and the
implementation of fiscal reforms.
Restructuring of the state-owned cotton ginning company SOFITEX (Société des Fibres
Textiles), through the implementation of new cost-cutting measures; the adoption of a new
internal audit structure; the preparation of a new risk management system, and a business plan;
and the adoption of a procedures manual.
Advancing reforms in the financial sector.
Continuing to work toward creating a business-friendly environment, notably through the
harmonization of business law with the regional regulations by the Organization for the
Harmonization of Business Law in Africa (OHADA).
XXI
Annex 4
Macro-economic and Financial Indicators
2007 2008 2009 2010 2011
Annual percentage change, unless otherwise indicated
GDP and Prices
GDP at constant prices
Consumer prices (annual average)
Consumer prices (end of period)
Money and Credit
Net domestic assets (banking system)
Credit to Government
Credit to economy
Broad money
Velocity
External Sector
Exports (FOB in CFAF)
Imports (FOB in CFAF)
Terms of trade
Real effective exchange rate (- = depreciation)
World cotton prices (USD cent per pound)
Average petroleum spot price (USD cent/barrel)
3.6
3.6
2.3
-5.5
-9.6
0.6
22.9
4.0
-2.9
4.1
1.2
-0.6
63.3
71.1
5.2
10.7
11.6
16.5
4.2
14.0
12.2
4.0
3.9
21.8
-3.2
7.0
71.4
97.0
3.1
3.4
2.0
4.7
1.5
3.2
8.3
3.9
27.4
4.7
12.1
…
57.5
61.5
4.2
2.3
2.0
5.3
0.1
5.1
6.2
3.9
12.6
13.1
-6.6
…
58.0
76.5
5.3
2.0
2.0
11.0
4.7
6.3
10.7
3.8
35.6
8.5
0.3
…
61.0
79.5
Percentage of GDP, unless otherwise indicated
Central Government Finance
Current revenue
Of which: Tax revenue
Total expenditure
Of which: current expenditure
Fiscal balance excluding grants (commitment basis)
Fiscal balance including grants (commitment basis)
Fiscal balance including grants (cash basis)
Domestic financing
Saving and Investments
Gross fixed capital formation
Public
Private
Gross domestic saving
Public
Private
External Sector and Debt Indicators
Exports of goods and services
Imports of goods and services
Current account deficit (including transfers
Current account deficit (excluding transfers)
External debt
NPV of external debt
NPV of external debt (in % of exports)
NPV of external debt (in % of revenues)
Memorandum Item:
Nominal GDP (CFAF billions)
13.6
12.5
25.8
13.9
-12.2
-5.7
-5.2
2.1
19.5
9.0
10.5
5.3
0.8
4.5
10.6
24.8
-8.3
-12.6
19.8
12.0
13.8
88.5
3 239
13.3
12.2
21.7
12.5
-8.4
-4.4
-4.0
1.1
21.0
6.4
14.6
4.1
2.4
1.8
10.0
26.8
-11.9
-15.3
19.8
11.6
116.7
87.7
3 648
13.2
12.1
27.0
13.4
-13.8
-6.7
-7.3
3.1
21.1
10.1
11.0
5.9
-0.2
6.1
11.7
27.0
-9.1
-13.8
20.6
13.4
113.9
101.2
3 836
13.6
12.5
25.3
13.0
-11.7
-5.4
-5.4
0.5
21.6
8.8
12.7
5.3
1.1
4.3
12.3
28.5
-10.5
-14.9
22.2
14.9
120.6
109.4
4 075
14.5
13.3
24.7
12.5
-10.2
-3.9
-4.0
-0.7
22.6
12.5
10.2
9.0
2.3
6.7
15.2
28.8
-9.7
-12.4
24.4
16.8
111.0
116.3
4 380
Source: Burkina Faso and IMF estimates (Report N°10/7 of January 2010
XXII
Annex 5
XXIII
Annex 6
COMPARATIVE COMPETITIVENESS PROFILE OF FIVE WAEMU COUNTRIES IN 2009
WAEMU
COUNTRIES
RANK
ING
OVER
134
COUN
TRIES
BASIC REQUIREMENTS (Score on a scale of 1-7) EFFICIENCY ENHANCERS (Score on a scale of 1-7) INNOVATION FACTORS
(Score on a scale of 1-7))
Institutions Infrastructure Macro-
economic
stability
Primary
and health
education
Secondary
and higher
education
Goods
market
efficiency
Labour
market
efficiency
Financial
market
sophistication
Technological
readiness
Market
size
Business
sophistication
Innovation
BENIN
BURKINA CI
MALI
SENEGAL
106
127 110
117
96
3.7
3.8 2.8
3.7
3.7
2.6
2.6 3.3
2.6
3.0
4.6
3.9 4.9
4.6
4.4
4.4
3.4 3.5
3.4
4.4
3.0
2.7 3.1
2.8
3.4
3.8
4.0 3.7
3.9
4.3
3.9
4.3 3.9
4.1
3.8
3.7
3.7 3.6
3.3
3.6
2.5
2.5 2.8
2.6
3.1
2.3
2.4 3.0
2.4
2.7
3.5
3.6 3.8
3.4
4.2
2.9
3.0 2.8
3.0
3.3
Source: 2009 Report on Africa’s Competitiveness
XXIV
Annex 7 Burkina Faso Rating 2007-2009 CPIA
Year
A. Economic management B. Political structures C. Policies for social inclusion / Equity
1 2 3 4 5 6 7 8 9 10 11
Macro-economic
management
Fiscal policy Debt management
Regional integration
and trade
Financial sector Business regulatory
framework
Gender equality
Equity of public
resource use
Human resources
Social protection
Environmental regulation
2009 4.5 4.5 4.0 4.5 4.0 4.5 4.0 4.0 4.0 4.0 4.0
2008 4.5 4.5 4.0 4.5 4.0 4.5 4.0 4.0 4.0 3.5 4.0
2007 4.5 5.0 5.0 4.0 4.0 3.5 3.5 3.5 4.0 3.0 3.5
Year
D. Public Sector Management and Institutions
Overall
Rating
12 13 14 15 16
Property rights
and rule-based
governance
Quality of
budgetary
and financial management
Efficiency of
revenue
mobilization
Quality of
public
administration
Transparency,
accountability
& corruption
2009 4.5 4.5 4.0 3.5 4.5 4.22
2008 4.0 4.5 4.0 3.5 4.5 4.19
2007 3.5 4.5 3.0 3.0 3.5 3.92
Source: ADB/W B. 2009, CPIA
XXV
Annex 8
Resources Derived from Restructured Projects
Project Approval Date Amount
Approved Disbursement
Rate
Deadline for
Last
Disbursement
Undisbursed
Amount
Amount
Derived
PAFICOT
29/11/2006 10,000,000.00 3.96% 31/12/2013 9,603,791.79 5 500 000.00
PADER-GK 21/07/2006 12.500,000.00 10.14% 31/12/2012 11,231,913.41 5,500,000.00
PROGEREF 21/05/2003 12,000,000.00 46.16% 31/12/ 2010
Date revised 6,460,356.95 3,500,000.00
PADL-CLK 27/11/2002 15,000,000.00 67.49% 30 April 2011
Date revised 4,876,753.85 500,000.00
RURAL
ROADS 29/09/2004 15,710,000 88.27% 30/06/201 2,641,358.66 1,695,075.00
Total 65,210,000.00
34,814,174.66 16,685,075.00
XXVI
Annex 9
LIST OF DOCUMENTS
1. IMF Report N° 10/7 January 2010
2. Country Strategy Paper 2005-2009 and Extension 2010-2011
3. Concept Note of PASRP V
4. PRSF Priority Action Programme: 2009-2011 Outlook (PAP/PRSP)
5. SRFP Working Document Review (25 February 2010)
6. Report at 31 December 2009 of Implementation of PAP/PRSP and 2010/11Outlook
7. 2010 Activity Programme of the Burkina Faso Business Promotion Centre (Maison de
l’Entreprise du Burkina Faso- MEBF)
8. Strategic Pillars of the Burkina Faso Business Promotion Centre
9. Budget Act for Government Budget Execution 2010
10. PAP Synthesis Report at 31 December 2009 “Promoting Private Sector”
11. Multi-Year Converge Programme 2010-2014 of Burkina Faso
XXVII
Annex 10
Map of Burkina Faso
This map has been prepared by the African Development Bank Group for the convenience of the readers of the report to which it is attached. The denominations used and the boundaries shown on this
map do not imply on the part of the Group and its affiliates, any judgment on the legal status of any territory or any endorsement or acceptance of such boundaries.
