## The government of the Democratic Republic of the Congo (DRC) completed its first full Poverty Reduction Strategy Paper (PRSP) in July 2006

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### Overview and context
- Full PRSP builds upon the Interim PRSP (I-PRSP) adopted in 2002 and targets restoration of political stability, consolidation of peace, and poverty reduction through accelerated growth.
- New government elected in November 2006 and taking office in February 2007 confirmed commitment to the PRSP.
- Post-conflict environment: prolonged armed conflicts ended in 2003, with continuing violence in eastern provinces; short but intense violence in Kinshasa in March 2007.
- Long-term income decline: per capita income collapsed from approximately US$380 in 1960 to a little over US$100 in 2004 (in 2000 constant US dollars).

### Participatory process and diagnostics
- Surveys and consultations:
  - Quantitative and qualitative surveys undertaken in all eleven provinces, including Multiple Indicators Cluster Survey (MICS), household and labor survey (1-2-3 survey), and participatory poverty analysis.
  - Grassroots consultations supported by National Institute of Statistics and ten partner non-governmental organizations, funded by development partners.
  - Participants: civil society, private sector, local communities, women and youth associations, churches, and labor unions.
  - Geographic coverage included Ituri, North and South Kivu, and Katanga.
  - Provincial and sectoral summaries prepared to capture geographic and social diversity and prepare for eventual decentralization.
- Poverty diagnosis — key findings:
  - Poverty affects more than 70 percent of the overall population and over 90 percent in the province of Equateur.
  - Rural development: over 70 percent of the population lives in rural areas; the sector produces 63 percent of overall output.
  - Conflict-affected areas identify lack of security as the most important cause of poverty; isolated provinces emphasize scarce food and means of transportation.
  - Institutional weaknesses cited: poor governance and lack of transparency and accountability.
  - Recommended further analytical work: surveys on household livelihoods and economy structure; poverty and social impact analysis (PSIA) on gender aspects of poverty.

### PRSP pillars, priority sectors, and key policy measures
- Five PRSP pillars:
  - (i) promoting good governance and consolidating peace;
  - (ii) maintaining macroeconomic stability and growth;
  - (iii) improving access to social services and reducing vulnerability;
  - (iv) combating HIV/AIDS;
  - (v) improving community dynamics.
- Priority sectors and actions:
  - Infrastructure: rehabilitation of road and energy infrastructure, electrification of urban and rural areas, rehabilitation of Inga dam; promulgation of an Energy Code; inviting private participation in the energy sector.
  - High shares of poverty reduction budget allocated to road and energy sectors, comparable to primary and secondary education.
  - Mining: attract private capital to kick-start private sector-led growth; government role to provide conducive environment, macroeconomic and political stability, and improved governance.
  - Forestry: focus on inclusive management and access to benefits for indigenous and marginalized groups; develop models to reward global environmental services such as biodiversity conservation and carbon sequestration.
  - Private sector measures: improve investment climate, finalize labor and commerce codes, settle internal enterprise debt, divest state-owned enterprises (SOEs), increase transparency of SOE partnerships and management contracts, reduce commercial debt through buyback with the London Club while observing comparability of treatment among creditors.
- Social services:
  - Proposed increase in budgetary allocations to education and health (including HIV/AIDS) from a combined 15 percent of the State budget in 2006 to 40 percent in 2008.
  - Education: need for a credible financing plan, improved budget allocation aligned with sector priorities, measures to ensure funds reach intended recipients, and improved efficiency to reduce dependency on external assistance over time.
  - Health: PRSP proposes expansion via new infrastructure and increased number of “health zones”; staff recommendation is to prioritize rehabilitating, reequipping, and rationalizing existing health facilities network, particularly in rural areas.
  - Need to form strategy to improve financial accessibility of health and education services and weigh affordability objectives against available funds.

### Macroeconomic framework — projections, assessment, and vulnerabilities
- PRSP macro estimates:
  - Public capital and pro-poor spending estimated at US$3.4 billion for 2006-08.
  - Public investment projected to increase from US$236 million (3 percent of GDP) in 2005 to US$1.3 billion (13 percent of GDP) in 2008.
  - Total public investment projected to increase by 10 percentage points of GDP between 2005 and 2008.
  - Target average real GDP growth of 7.7 percent for 2006-08.
- Actuals and revised projections:
  - Real GDP grew by an estimated 5 percent in 2006 and is projected to grow by 6.5 percent in 2007.
  - As a result, the average growth rate for 2006-08 is unlikely to be more than 6.5 percent.
- Short-term macro vulnerabilities:
  - Inflation rose to more than 20 percent (year over year) in early 2007.
  - International reserves fell to only 1½ weeks of imports at end-February 2007.
  - PRSP target to reduce inflation to 6 percent in 2007-2008 from 21 percent in 2005 is considered difficult given investment levels and reserve rebuilding needs.
- Issues requiring further analysis:
  - Better definition of sources of growth and accompanying sectoral policies.
  - In-depth discussion of capacity constraints to manage large increase in public investment.
  - Assessment of ability to mobilize substantial external financial support.
  - In-depth analysis of trade sector reforms to promote growth and reduce poverty.
  - Understanding consequences of large capital inflows on import demand, real effective exchange rate and competitiveness, overall balance of payments, and debt sustainability.

### Fiscal policy, public financial management, and devolution
- Fiscal strategy and revenue measures:
  - Strategy designed to avoid recourse to domestic bank financing and relies largely on external assistance.
  - Tax/revenue administration reforms proposed: broaden tax base; strengthen tax and customs administration.
  - Specific tax measures: (i) increase excises and limit customs exemptions on oil products; (ii) introduce a VAT in the medium term (contingent on tax administration improvements); (iii) reduce tax exemptions.
  - Greater emphasis needed on increasing non-tax revenues by improving contribution of natural resources to the budget, requiring a stronger fight against corruption.
- Expenditure management:
  - Improve efficiency of current spending in favor of pro-poor outlays without jeopardizing macroeconomic stability.
  - Implement public financial management plan prepared with Fund assistance to strengthen governance and improve quality of pro-poor spending.
  - Wage bill increases must be compatible with preserving macroeconomic stability and approved within an overall civil service reform strategy, including application of census results to payroll and removal of ghost workers.
  - Recommendation for the new government to undertake a public expenditure review to improve efficiency of public spending.
- Devolution and fiscal transfers:
  - Constitutionally, 40 percent of government revenue collected in a province is to be retained at the province and an additional 10 percent transferred to finance an equalization fund for investment purposes.
  - Essential to ensure sufficient capacity at all levels of government to preserve macroeconomic stability under devolution.
- Debt management:
  - Working plan should include an external debt management strategy in anticipation of potential additional space for borrowing post-HIPC/MDRI.

### Monetary policy, financial sector, and private sector development
- Financial sector reforms:
  - Proposed reforms to give greater role to banking system in private sector development, including micro-finance improvements.
  - Emphasis on banking system reform to improve financial intermediation.
  - Strategy elements could include: improving central bank operations, completing its restructuring and recapitalization; strengthening central bank banking sector supervision; completing restructuring of commercial banks.
- Private sector environment:
  - DRC ranked last in the world according to “Doing Business indicators.”
  - Transitional government measures include allowing entry of private competitive mobile telephone service providers.
  - Further reforms needed in railroads, airports, and port management.
  - Transition to a private sector-led economy should be orderly and transparent; regulatory framework must be strengthened, particularly for mining and power.
  - Financial sector development is important for long-term private sector growth.

### Progress indicators, monitoring, and implementation
- Indicators and monitoring:
  - PRSP provides a list of indicators in the annex (Table 8): target expenditures and two to four measurable progress indicators for five priority sectors: health, primary education, transport, energy, and environment.
  - Indicators partially overlap with quantitative objectives for reducing poverty (Table 4).
  - Staffs recommend providing additional details on: why indicators were chosen; how they contribute to goals; precise definitions; and evaluation frequency.
- Implementation arrangements and capacity:
  - PRSP presents an organizational chart of multi-layered implementation, monitoring, and evaluation apparatus involving five ministers, an inter-ministerial commission, and a national coordination unit.
  - Government intends participatory implementation, monitoring and evaluation mechanisms, but modalities and role of non-governmental entities remain to be determined.
  - JSA of the I-PRSP recommended establishing implementation mechanisms and detailing participatory monitoring in the full PRSP.
  - Staffs advise against creating new entities unless existing ones are dismantled to avoid parallel structures.
  - Capacity reinforcement should proceed in parallel: local officials, communities, media, and non-governmental organizations require training; development partners should assist in shaping capacity plans, provide technical assistance and financing, and coordinate to avoid overstraining capacities.
- Working plan (2007-11) requirements:
  - Government’s program for 2007-11 selects five priority sectors consistent with PRSP pillars: (i) infrastructure; (ii) employment; (iii) education; (iv) water and electricity; and (v) health.
  - Working plan should contain specific actions, costing, timing, and entity in charge at least for the first year; integrate poverty reduction into national and local planning and budgeting systems.
  - Working plan should: (i) account for realistic financial and human resources implying prioritization and sequencing; (ii) assign priorities to allow cutting/postponing less urgent programs if financing falls short; (iii) clarify links among goals, programs, macro framework, and progress indicators; (iv) develop a matrix of goals, programs, progress indicators, and responsible entities; (v) include an external debt management strategy.
- Monitoring and reporting improvements:
  - No systematic mechanism exists to track spending after funds are disbursed by the Ministry of Finance.
  - Execution rate of expenditures in targeted areas is a progress indicator; staffs suggest using the arrival rate of funds to end service providers rather than the departure rate from the Ministry of Finance.
  - PRSP does not reflect transfers in the macroeconomic framework, devolution of responsibilities, or function of the equalization fund; staff urge settling intergovernmental architecture before initiating decentralization.

### Alternative scenario and priority actions
- Alternative scenario:
  - PRSP sketches a less ambitious alternative scenario requiring very large external assistance with slightly lower external financing and government capital spending.
  - Staffs note it is unclear how consistent this scenario is with poverty reduction objectives, which sectors would be affected, and what reform priorities would be; deeper elaboration recommended.
- Priority areas for strengthening PRSP and implementation:
  - (i) improve poverty reduction programs and design surveys to better identify the poor;
  - (ii) prioritize measures identified by the PRSP to improve governance;
  - (iii) develop plans to attain forestry sector objectives;
  - (iv) develop a strategy to improve financial accessibility to health and education services;
  - (v) improve budgetary reporting and strengthen budgetary controls;
  - (vi) analyze issues relating to growth and sustainability;
  - (vii) choose adequate progress indicators and establish monitoring mechanisms.
  - With donor assistance, identify areas where donor resources are or could be available.

### Risks, conclusions, and recommendations
- PRSP achievements and remaining needs:
  - PRSP provided a framework for national dialogue on poverty reduction and a basis for coordinating the reform agenda.
  - Surveys produced valuable information in a country lacking systematic and reliable data.
  - Identification of comprehensive outcome indicators will require additional work; interim intermediate outcome indicators will need to be defined.
  - Operationalizing PRSP principles will be challenging but essential.
- Main implementation risks:
  - (i) insufficient improvements in security and governance to create an environment conducive to private sector investments;
  - (ii) difficulties in mobilizing the external financing required to achieve the social and poverty reduction targets;
  - (iii) inadequate coordination of donor assistance—to avoid duplication of efforts and inconsistent programs;
  - (iv) inability to develop local capacity in line with desired implementation and available financing.
- Staffs urge authorities to address the wide-ranging issues summarized above.

*Staffs of the International Development Association (IDA) and the International Monetary Fund (IMF).*

### 1.      The government of the Democratic Republic of the Congo (DRC) completed its

### The government of the Democratic Republic of the Congo (DRC) completed its first full Poverty Reduction Strategy Paper (PRSP) in July 2006

### Overview
- The full PRSP builds upon the Interim PRSP (I-PRSP), adopted in 2002, and targets restoration of political stability, consolidation of peace, and poverty reduction through accelerated growth.
- The new government, elected in November 2006 and taking office in February 2007, has confirmed commitment to the PRSP.
- The note provides comments and advice from the staffs of the International Development Association (IDA) and the International Monetary Fund (IMF) on the PRSP and plans for its implementation.

### Context and recent history
- Prolonged armed conflicts ended in 2003, with continuing violence in the eastern provinces; short but intense violence erupted in Kinshasa in March 2007.
- Per capita income collapsed from approximately US$380 in 1960 to a little over US$100 in 2004 (in 2000 constant US dollars).

### Participatory process
- Quantitative and qualitative surveys were undertaken in all eleven provinces.
- Grassroots consultations were held with support from the National Institute of Statistics and ten partner non-governmental organizations, funded by development partners.
- Participants included civil society, private sector, local communities, women and youth associations, churches, and labor unions.
- Geographic coverage included Ituri, North and South Kivu, and Katanga.
- Provincial and sectoral summaries of survey results were prepared as inputs to the national PRSP to capture geographic and social diversity and to prepare for eventual decentralization.

### Poverty diagnosis — key findings
- Surveys included Multiple Indicators Cluster Survey (MICS), household and labor survey (1-2-3 survey), and participatory poverty analysis.
- Poverty affects more than 70 percent of the overall population and over 90 percent in the province of Equateur.
- Rural development: over 70 percent of the population lives in rural areas, and the sector produces 63 percent of overall output.
- Conflict-affected areas identify lack of security as the most important cause of poverty; isolated provinces emphasize scarce food and means of transportation.
- Institutional weaknesses identified include poor governance and lack of transparency and accountability as contributors to poverty.
- Recommended further analytical work: surveys on household livelihoods and economy structure; poverty and social impact analysis (PSIA) on gender aspects of poverty.

### PRSP pillars and key aspects of the strategy
- Five pillars:
  - (i) promoting good governance and consolidating peace;
  - (ii) maintaining macroeconomic stability and growth;
  - (iii) improving access to social services and reducing vulnerability;
  - (iv) combating HIV/AIDS;
  - (v) improving community dynamics.
- Priority sectors and actions highlighted:
  - Rehabilitation of road and energy infrastructure, including electrification of urban and rural areas and rehabilitation of Inga dam; promulgation of an Energy Code; inviting private participation in the energy sector.
  - High shares of poverty reduction budget allocated to road and energy sectors, comparable to primary and secondary education.
  - Mining sector: potential to attract private capital and kick-start private sector-led growth; government role to provide conducive environment for private investment, macroeconomic and political stability, and improved governance.
  - Forestry recognized as critical for poverty, governance, and sustainable growth objectives; focus on inclusive management and access to benefits for indigenous and marginalized groups, and developing models to reward global environmental services such as biodiversity conservation and carbon sequestration.
  - Private sector development measures: improving investment climate, finalizing labor and commerce codes, settling internal debt due to enterprises, divesting state-owned enterprises (SOEs), increasing transparency of SOE partnerships and management contracts, reducing commercial debt through buyback with the London Club, and observing comparability of treatment among creditors.
- Social services:
  - Proposed increase in budgetary allocations to education and health sectors (including HIV/AIDS) from a combined 15 percent of the State budget in 2006 to 40 percent in 2008.
  - Education: need for credible financing plan, improved budget allocation aligned with sector priorities, measures to ensure funds reach intended recipients, and improved efficiency to reduce dependency on external assistance over time.
  - Health: proposed expansion by creating new infrastructure and increasing number of “health zones”; staff recommendation to prioritize rehabilitating, reequipping, and rationalizing existing health facilities network, particularly in rural areas.
  - Need to form strategy to improve financial accessibility of health and education services and weigh affordability objectives against available funds.

### Macroeconomic framework — projections and assessment
- PRSP estimates:
  - Public capital and pro-poor spending estimated at US$3.4 billion for 2006-08.
  - Public investment projected to increase from US$236 million (3 percent of GDP) in 2005 to US$1.3 billion (13 percent of GDP) in 2008.
  - Total public investment projected to increase by 10 percentage points of GDP between 2005 and 2008.
  - Target average real GDP growth of 7.7 percent for 2006-08.
- Actuals and revised projections:
  - Real GDP grew by an estimated 5 percent in 2006 and is projected to grow by 6.5 percent in 2007.
  - As a result, the average growth rate for 2006-08 is unlikely to be more than 6.5 percent.
- Short-term macroeconomic vulnerabilities:
  - Inflation rose to more than 20 percent (year over year) in early 2007.
  - International reserves fell to only 1½ weeks of imports at end-February 2007.
  - PRSP target to reduce inflation to 6 percent in 2007-2008 from 21 percent in 2005 is considered difficult given investment levels and reserve rebuilding needs.
- Issues requiring further analysis:
  - Better definition of sources of growth and accompanying sectoral policies.
  - In-depth discussion of capacity constraints to manage large increase in public investment.
  - Assessment of ability to mobilize substantial external financial support.
  - In-depth analysis of trade sector reforms to promote growth and reduce poverty.
  - Understanding consequences of large capital inflows on import demand, real effective exchange rate and competitiveness, overall balance of payments, and debt sustainability.

### Fiscal policy and public financial management
- Fiscal strategy is designed to avoid recourse to domestic bank financing and relies largely on external assistance.
- Tax and revenue administration reforms proposed:
  - Increase tax revenues by broadening the tax base and strengthening tax and customs administration.
  - Specific measures include: (i) increase excises and limit customs exemptions on oil products; (ii) introduce a VAT in the medium term (contingent on tax administration improvements); (iii) reduce tax exemptions.
  - Greater emphasis needed on increasing non-tax revenues by improving contribution of natural resources to the budget, requiring a stronger fight against corruption.
- Expenditure management:
  - Improve efficiency of current spending in favor of pro-poor outlays without jeopardizing macroeconomic stability.
  - Implement public financial management plan prepared with Fund assistance as a priority to strengthen governance and improve quality of pro-poor spending.
  - Wage bill increases must be compatible with preserving macroeconomic stability and approved within an overall civil service reform strategy, including application of census results to payroll and removal of ghost workers.
  - Recommendation for the new government to undertake a public expenditure review to improve efficiency of public spending.
- Devolution impacts:
  - Constitutionally, 40 percent of government revenue collected in a province is to be retained at the province and an additional 10 percent transferred to finance an equalization fund for investment purposes.
  - Essential to ensure sufficient capacity at all levels of government to preserve macroeconomic stability under devolution.

### Monetary policy and financial sector reforms
- Proposed reforms to give greater role to banking system in private sector development, including micro-finance improvements.
- Emphasis needed on banking system reform to improve financial intermediation.
- Strategy could include plans for:
  - Improving central bank operations, completing its restructuring and recapitalization;
  - Strengthening central bank banking sector supervision; and
  - Completing restructuring of commercial banks.

### Alternative scenario
- PRSP sketches a less ambitious alternative scenario requiring very large external assistance with slightly lower external financing and government capital spending.
- Unclear how consistent this scenario is with poverty reduction objectives, which sectors would be affected, and what reform priorities would be; deeper elaboration recommended.

### Implementation, monitoring, and evaluation
- Implementation, monitoring and evaluation plans have yet to be defined.
- PRSP presents an organizational chart of multi-layered implementation, monitoring, and evaluation apparatus describing roles of five ministers, an inter-ministerial commission, and a national coordination unit performing supervisory and coordinating functions.
- Government intends participatory implementation, monitoring and evaluation mechanisms, but modalities and role of non-governmental entities have yet to be determined.
- JSA of the I-PRSP recommended establishing implementation mechanisms and spelling out participatory monitoring details in the full PRSP.

*Staffs of the International Development Association (IDA) and the International Monetary Fund (IMF).*

### 24.      The choice of adequate progress indicators will be essential to evaluate

### 24.      The choice of adequate progress indicators will be essential to evaluate

### Progress indicators and monitoring
- The PRSP provides a list of indicators in the annex (Table 8).
- Indicators consist of:
  - target expenditures; and
  - two to four measurable progress indicators for five priority sectors: health, primary education, transport, energy, and environment.
- These indicators partially overlap with the quantitative objectives for reducing poverty (Table 4).
- The main text states that wide consultations were held to select these indicators.
- The staffs recommend providing additional details on:
  - why these indicators were chosen;
  - how they contribute to achieving the goals;
  - precise definitions of the indicators; and
  - how often they will be evaluated.

### Priority areas for strengthening the poverty reduction strategy and its implementation
- Key areas for authorities to concentrate efforts:
  - (i) improve the poverty reduction programs and undertake and design surveys to better identify the poor;
  - (ii) prioritize measures identified by the PRSP to improve governance;
  - (iii) develop plans to attain the objectives for the forestry sector;
  - (iv) develop a strategy to improve financial accessibility to health and education services;
  - (v) improve budgetary reporting and strengthen budgetary controls;
  - (vi) analyze issues relating to growth and sustainability;
  - (vii) choose adequate progress indicators and mechanisms to monitor implementation.
- With donor assistance, identify areas in which donor resources are or could be available.

### Government program and working plan (2007-11)
- The new government presented its program for 2007-11, selecting five priority sectors consistent with PRSP pillars:
  - (i) infrastructure;
  - (ii) employment;
  - (iii) education;
  - (iv) water and electricity; and
  - (v) health.
- The government needs a working plan with:
  - specific actions, costing, timing, and definition of the entity in charge at least for the first year, and preferably for the first few years;
  - development by existing planning and budgeting entities to integrate poverty reduction into national and local systems.
- The working plan should:
  - (i) take into account the realistic amount of financial and human resources available, implying prioritization and sequencing of the PRSP reform agenda;
  - (ii) assign priorities among actions so less urgent programs can be cut or postponed if financing falls short;
  - (iii) clarify links among overall goals, proposed programs, the macroeconomic framework, and progress indicators;
  - (iv) develop a matrix of goals, programs, progress indicators, and the entity in charge (which the PRSP currently lacks);
  - (v) include an external debt management strategy in anticipation of potential additional space for borrowing post-HIPC/MDRI.
- Preparing the working plan will help prioritize the needed capacity reinforcement program.

### Governance, decentralization, and public finance management
- Improving governance is identified as a population priority and should feature in the initial working plan.
- The government’s program includes a “Governance Compact” between the Government and the population, consistent with international partners’ governance priorities.
- Early focus should be on measures aimed at securing peace and increasing transparency.
- Public finance management issues:
  - No systematic mechanism exists to track spending after funds are disbursed by the Ministry of Finance.
  - Execution rate of expenditures in targeted areas is a progress indicator; staffs suggest using the arrival rate of funds to end service providers rather than the departure rate from the Ministry of Finance.
- Decentralization:
  - The PRSP does not reflect transfers in the macroeconomic framework, devolution of responsibilities, or function of the equalization fund.
  - Staffs urge settling the broad architecture of intergovernmental relations before initiating decentralization, including clear revenue and expenditure assignments, fiscal transfers, timing and pace of devolution, and administrative and institutional capacity at subnational levels.
  - Authorities are encouraged to first concentrate on improving implementation and monitoring capacity of local governments.
  - Broad principles and plans to improve local capacity mentioned in the PRSP and survey results from the provinces could serve as a starting point.

### Private sector development and regulatory framework
- Providing an environment conducive to private sector development is an important challenge.
- DRC ranked last in the world according to “Doing Business indicators.”
- Transitional government measures include allowing entry of private competitive mobile telephone service providers.
- Further reforms needed in sectors such as railroads, airports, and port management.
- Transition to a private sector-led economy should be orderly and transparent; the regulatory framework must be strengthened, particularly for mining and power.
- Financial sector development will be important for long-term private sector growth.

### Monitoring, capacity reinforcement, and donor coordination
- Arrangements for monitoring and evaluating PRSP implementation must be made as soon as possible.
- Efforts should integrate poverty reduction into existing national and local systems while addressing capacity weaknesses.
- Creation of new entities is not recommended unless existing ones are dismantled, to avoid parallel structures that replicate problems.
- Capacity reinforcement should proceed in parallel:
  - Decades of poor management and conflict have likely deprived government officials of adequate experience for implementing programs and collecting/analyzing reliable statistics.
  - Local communities, media, and non-governmental organizations need training to fulfill roles in implementation, monitoring, and evaluation.
  - Staffs urge development partners to assist in shaping a capacity reinforcement plan, provide technical assistance and financing, and coordinate activities to avoid overstraining local capacities.

### Conclusion and implementation risks
- The PRSP provided a framework for national dialogue on poverty reduction and coordinating the reform agenda.
- Surveys during preparation produced valuable information in a country lacking systematic and reliable data.
- Identification of comprehensive outcome indicators will require additional work; interim intermediate outcome indicators will need to be defined.
- The PRSP is a good starting point to continue dialogue and implement reforms to improve social welfare in DRC; operationalizing its broad principles will be challenging but essential.
- Staffs urge authorities to address the wide-ranging issues summarized above.
- Implementation of the PRSP faces serious risks, including:
  - (i) insufficient improvements in security and governance to create an environment conducive to private sector investments;
  - (ii) difficulties in mobilizing the external financing required to achieve the social and poverty reduction targets;
  - (iii) inadequate coordination of donor assistance—to avoid duplication of efforts and inconsistent programs; and
  - (iv) inability to develop local capacity in line with desired implementation and available financing.

*https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07331.pdf*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07331.pdf_