## _cr0976 - Section 1

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---

### I. OVERVIEW
- The Gambian authorities completed the 2007 PRSP Annual Progress Report (APR) in October 2008. This is the first APR for the country’s second Poverty Reduction Strategy Paper (PRSP), which covers the years 2007 to 2011.
- Overall strategic priorities of the PRSP:
  - (i) macroeconomic stability and effective public resource management;
  - (ii) promotion of pro-poor growth and employment through private sector development;
  - (iii) improved basic social services;
  - (iv) strengthened local communities and civil society organizations (CSOs);
  - (v) mainstreamed multisectoral programs on gender, environment, nutrition, and population.
- The PRSP incorporates programs focused on the Millenium Development Goals (MDGs).
- The APR is complemented by a 2008 report on progress towards the MDGs and a report which analyzes poverty related public expenditures in 2007.
- The APR analyzes macroeconomic performance, public sector reform, real sector performance (agriculture and tourism), the social sectors and cross-cutting issues such as HIV/AIDS and gender.
- The APR was prepared in a participatory and consultative manner; the National Planning Commission (NPC) coordinated the preparation of the APR and assumed overall responsibility for the PRSP process.
- NPC capacity: NPC is a relatively new organization and would benefit from further strengthening of its capacity; staffs recommend continued institutionalization of multisectoral and participatory monitoring arrangements.
- Poverty statistics and vulnerability:
  - Fifty eight percent of the households are poor, according to the 2003 household expenditure survey (the latest information available).
  - Authorities are preparing to conduct a small scale survey to update the poverty profile.
  - The poor are often rural households with larger families, headed by females and working in the agriculture and fishing industries.
- Recent growth has been robust but may have been concentrated in sectors such as telecommunication and tourism which could have had limited impact on the poor; an ongoing Poverty Assessment exercise will further analyze this issue.

### II. STRATEGIC PRIORITIES, RISKS AND CHALLENGES — Findings and short-term macroeconomic outlook
- Macroeconomic performance has been strong in the recent past: robust growth and relatively low inflation.
- External shock risk:
  - The current global economic slowdown is likely to adversely affect growth in The Gambia and widen the external current account deficit by slowing down tourism and remittances.
  - Re-export trade appears to be contracting as the country’s regional comparative advantages deteriorate and foreign direct investment is projected to level off after rising sharply in recent years.
- Growth projection:
  - Real GDP growth is projected to decline to 4.6 percent in 2009 from 5.9 percent in 2008.
- Fiscal and debt stance:
  - Given the expected slowdown and indications of weakening government revenues, staffs encourage the government to continue prudent macroeconomic policies and provide a growth-friendly environment.
  - Staffs support the government’s policy of limiting domestic borrowing in order to reduce the large domestic public debt.

### External debt, diversification and budgetary resources
- External debt:
  - Staffs recommend that future APRs pay more attention to external debt sustainability issues.
  - Recent Debt Sustainability Analysis (DSA) indicates continued high risk of debt distress.
- Diversification:
  - Export diversification and finding new sources of growth are critical given the decline of the country’s traditional strengths as a regional trading hub.
- PRSP expenditures and budgetary resources:
  - Staffs support government efforts to increase budgetary resources to poverty reducing expenditures.
  - Preliminary budget outturn data indicate that PRSP related expenditures as a share of total Government Local Funds (excluding interest payments) declined from 2002 to 2005, in particular due to sharply increasing debt service payments.
  - The authorities reduced domestic borrowing and received substantial external debt relief when the country reached HIPC completion point in December 2007.
  - Preliminary data indicate that the share of PRSP related expenditures in the budget outturn have been gradually increasing.
  - The share of PRSP expenditures in budget allocations have increased in 2009 compared to 2008; it will be critical that the budget outturns reflect the increased budgetary allocations.

### Public expenditure management, IFMIS and civil service
- Public expenditure management:
  - Steady improvements in the budgeting process include revised budget classification, integrating recurrent and development expenditures, developing sectoral policies and expenditure reviews, and reducing backlog in public accounts.
  - The APR notes the impact of the Integrated Financial Management Information System (IFMIS) on improving public expenditure management and monitoring of PRSP related expenditures.
  - IFMIS currently processes all central government transactions and produces public accounts and fiscal reports in a relatively timely manner.
  - Staffs recommend adequately funding the recurrent costs of IFMIS as identified in the government’s IFMIS Sustainability Plan, and building local capacity through recruitment and training of Treasury staffs within a government-wide manpower plan.
- Civil service and human resource management:
  - Strengthening human resource management is critical to the success of ongoing civil service reforms.
  - The APR highlights the need to increase civil service compensation to improve recruitment and retention of qualified personnel.
  - Staffs recommend complementary reforms: strengthen staff assessment, performance management and overall manpower planning.
  - Evidence indicates the civil service significantly expanded in recent years and expansion rate was not immediately apparent due to shortcomings in centralized management and monitoring.
  - Sustained political commitment for implementation of the civil service reform program is essential.

### Agriculture and groundnut sector
- Agriculture performance and constraints:
  - The agriculture sector, where most of the poor are engaged, has performed relatively poorly in recent years although crop productions rebounded in 2008 due to comparatively good rainfalls.
  - A major constraint has been lack of policy clarity, continuity and predictability.
  - Staffs recommend developing a comprehensive and cohesive agriculture sector strategy identifying priority interventions, emphasizing export diversification and private sector development.
  - Staffs recommend comprehensive assessment of the impact of existing investment projects to determine priority interventions and stabilizing the sector’s institutional environment.
  - Improved performance will likely require greater allocation of resources for recurrent expenditures.
- Groundnut sector specifics:
  - Groundnut sector traditionally accounted for over 70 percent of domestically produced exports.
  - Groundnut farmers are the largest group among the poor.
  - The sector has been undermined by a dysfunctional marketing arrangement.
  - The Roadmap prepared in 2007 emphasizes open competition based on a minimum producer price, divesting the Government-owned Gambia Groundnut Corporation (GGC), improving access to agricultural production inputs and establishing a quality control system.
  - Timely implementation of the Roadmap is expected to significantly contribute to alleviating poverty among groundnut farmers.
  - It will be critical to promote private investments by providing a level playing field with no preferential treatment.
  - Staffs recommend accelerating Roadmap implementation and further developing it with respect to improving access to inputs and extension services and strengthening institutional capacity of key public and private stakeholders, including producer associations.
  - Any adverse social distributional impact of the reforms should be monitored and adequately addressed.

### Economic governance and private sector
- Governance priorities for competitiveness and investment climate:
  - (i) greater protection of contractual rights and respect for legal due process;
  - (ii) use of open and competitive bidding process for divestiture of public enterprises and sale of major licenses, such as for telecommunication;
  - (iii) strengthening of the Public Utilities Regulatory Authority (PURA) through provision of adequate resources and enhancement of its independence and mandate.
- Other constraints to private sector-led growth include poor availability and high cost of finance, lack of access to land and the multiplicity of taxes and government fees which aggregate to a significant burden.
- Staffs recommend consolidating the investment laws and overhauling the discretionary duty exemption system.

### Social sectors, MDGs, health and education
- MDGs and education:
  - The MDG goal of halving poverty is unlikely to be met, but the APR notes relatively good progress on universal primary education and gender parity.
  - Major government initiatives benefited from donor support and the EFA-FTI.
  - With relative improvements in access, the next key challenges are improving quality of school instruction and educational outcomes given high failure rates in standardized tests.
- Health sector:
  - Staffs recommend focusing public resources on primary services and preventive care.
  - Improving health outcomes depends on the ability of government to provide adequate recurrent resources to health facilities, particularly health professionals and drugs.
  - For both health and education sectors, consider mandatory rotations as well as current incentive programs for rural placement of staffs.
  - Staffs recommend that expansion of school and health facilities be on a sustainable basis by taking into account government capacity to provide recurrent costs.

### HIV/AIDS, malaria and tuberculosis
- Malaria remains the leading cause of morbidity and mortality and is particularly a problem for pregnant women and children under five years.
- Staffs recommend a comprehensive assessment of malaria as well as tuberculosis and strengthening of disease surveillance and response capacity at all levels.
- HIV prevalence and treatment coverage:
  - Latest sero-surveillance data indicate HIV-1 prevalence doubled from 1.4 percent in 2002 to 2.8 percent in 2006.
  - Prevalence of HIV among young women and men aged 15-24 tripled from 0.8 percent to 2.4 percent during the same period.
  - Only 8.8 percent of people with advanced HIV infection and 14.1 percent of HIV positive pregnant women receive antiretroviral therapy.
- Staffs emphasize use of the recently approved Global Fund to expand availability of HIV/AIDS programs, including educational outreach to reduce further infections.
- Government could consider reestablishing posts of divisional coordinators of the National HIV/AIDS Secretariat (NAS) to strengthen regional presence.

### Principal risks to PRSP objectives and recommended mitigation
- Main risks include impact of external shocks, insufficient prioritization and weak capacity.
- Global economic slowdown expected to reduce economic growth and government revenues, which could put pressure on resources allocated to PRSP related expenditures.
- Recommended actions given reduced resources:
  - Reallocation of funds to PRSP priority activities.
  - Prioritizing within PRSP priorities as necessary.
  - Ensuring efficient and effective use of funds.
  - Comprehensive assessment of impact of existing and planned projects.
  - Continued public sector capacity building reforms, particularly civil service reforms.
  - Establishing a credible, transparent and predictable policy environment to support private investments.

### III. KEY IMPLEMENTATION ISSUES — Monitoring, data and MTEF
- Monitoring and evaluation:
  - Improving monitoring and evaluation of the PRSP program remains an important challenge.
  - Relatively little information is provided in the APR’s results matrix on achievement of the 2007 targets apart from macroeconomic indicators.
  - The 2007 MDG Status Report and the 2007 Poverty Reducing Expenditure Report provided complementary information for PRSP monitoring.
  - Staffs recommend these reports be prepared annually and that their main findings be reflected in the APR.
  - Staffs recommend refining PRSP policies and target output and outcome indicators to make them more specific and concrete, especially for agriculture, governance and cross-cutting issues (gender and environment).
  - Refinement of policies would provide an opportunity to review government priorities, critical given the sizable funding gap identified in the PRSP.
  - Prioritizing will be even more critical in light of projected decline in government revenues due to the global economic slowdown.
- Data quality and timeliness:
  - Improving quality and timeliness of data, particularly economic statistics, is needed to improve program monitoring.
  - After survey field works are conducted, there are often significant lags until the data become available.
  - Archiving and dissemination of data remain relatively weak.
  - Authorities have enacted the Statistics Act (2005) and established the Statistic Council and the Gambia Bureau of Statistics (GBOS).
  - Staffs recommend prioritizing implementation of the government’s “Strategic Plan for the Development of Statistics in The Gambia: 2008-11,” focusing on structural reforms and capacity building of GBOS.
  - Staffs support the Strategic Plan’s proposal for a “performance contract” for GBOS to hold it accountable for improved data quality and availability.
- Medium Term Expenditure Framework (MTEF) and budget linking:
  - The PRSP highlights the MTEF as a means to deepen integration of PRSP priorities with the budget.
  - Adoption of MTEF would be feasible only if there is credible commitment to future sectoral budgetary allocations.
  - As initial steps towards eventual MTEF adoption, staffs recommend major sectors improve annual budget submissions by incorporating target output and outcome indicators linked to proposed expenditures.
  - Departments of State with sectoral policies and public expenditure reviews should use them to derive PRSP performance indicators.
  - Sectoral policies and expenditure reviews could be gradually expanded to remaining Departments.
  - As sectoral policies are refined, budget codes identifying PRSP related expenditures can be revised to reflect new policies.
- Governance:
  - Strengthened governance remains a priority for PRSP implementation.
  - International observers generally agree that the country’s oversight institutions and the opposition media are weak.
  - Strengthened governance would enhance transparency and accountability of the public sector and reduce risk of policy slippages.
  - The PRSP has been prepared in an open, transparent and participatory manner to promote country ownership and a government responsive to the needs of the poor.

*Prepared by the Staffs of the International Monetary Fund and the International Development Association; Approved by Emilio Sacerdoti and Dominique Desruelle (IMF) and Obiageli K. Ezekwesili (IDA); February 3, 2009.*

### _cr0976 - Section 2

### Implementation of Previous JSAN Recommendations (paragraph 19)
- Implementation of the recommendations of the previous JSAN has been mixed.
- Implemented or ongoing recommendations:
  - maintained prudent macroeconomic policies,
  - achieved the completion point triggers for the HIPC program,
  - prepared a groundnut sector reform strategy,
  - strengthened the governance of the Central Bank,
  - developed a civil service reform strategy focused on pay and human management reforms.
- Ongoing implementation for social sectors: some recommendations are being implemented on an ongoing basis, including for education and health.
- Investment climate:
  - Authorities are collaborating with IDA on an ongoing Investment Climate Assessment (ICA).
  - Authorities are preparing a new Growth and Competitiveness Project for addressing some of the identified shortcomings.
- Areas with less success:
  - developing an agriculture sector strategy beyond the groundnut sector,
  - preparing an implementation and sensitization program for decentralization,
  - improving the management of the electricity utility and PURA,
  - further prioritizing the PRSP and refining the performance indicators.

### Conclusion on PRSP Implementation for 2007 (paragraph 20)
- Staffs' overall view: the progress report provides an adequate assessment of PRSP implementation for 2007.
- Progress noted:
  - Macroeconomic stability and real growth was maintained,
  - Public financial management was strengthened,
  - Progress was made in the key social sectors.
- Relative weaknesses:
  - Progress has been relatively slow with regards to agricultural reforms and decentralization,
  - There could be a greater emphasis on governance, including economic governance, and the groundnuts sector reforms.
- PRSP monitoring:
  - Improved with the complementary reports on MDGs and poverty related public expenditures,
  - The PRSP target outcome and output indicators would benefit from further refinement.
- External challenges since 2007:
  - The country has had to deal with sharply increasing import prices and the impact of the ongoing global economic slowdown.
- Staffs' assessment:
  - It is critical that the country maintains its commitment to the PRSP program in the midst of these new challenges.

### Priority Areas for Strengthening PRSP Implementation (paragraph 21)
- Priority areas identified by staffs:
  - (i) developing a comprehensive agricultural sector strategy;
  - (ii) prioritizing improvement of governance; and
  - (iii) refining PRSP performance indicators.

*Source: _cr0976 - Section 2*

### Section 1

### _cr0976 - Section 1

### I. OVERVIEW
- The Gambian authorities completed the 2007 PRSP Annual Progress Report (APR) in October 2008. This is the first APR for the country’s second Poverty Reduction Strategy Paper (PRSP), which covers the years 2007 to 2011.
- The overall strategic priorities of the PRSP are:
  - (i) macroeconomic stability and effective public resource management;
  - (ii) promotion of pro-poor growth and employment through private sector development;
  - (iii) improved basic social services;
  - (iv) strengthened local communities and civil society organizations (CSOs);
  - (v) mainstreamed multisectoral programs on gender, environment, nutrition, and population.
- The PRSP incorporates programs focused on the Millenium Development Goals (MDGs).
- The APR is complemented by a 2008 report on progress towards the MDGs and a report which analyzes poverty related public expenditures in 2007.
- The APR analyzes key elements of the PRSP including macroeconomic performance, public sector reform, real sector performance (agriculture and tourism), the social sectors and cross-cutting issues such as HIV/AIDS and gender.
- The APR was prepared in a participatory and consultative manner; the National Planning Commission (NPC) coordinated the preparation of the APR and assumed overall responsibility for the PRSP process.
- The NPC is a relatively new organization and would benefit from further strengthening of its capacity. Staffs recommend continued institutionalization of multisectoral and participatory monitoring arrangements.
- Poverty statistics and vulnerability:
  - Fifty eight percent of the households are poor, according to the 2003 household expenditure survey (the latest information available).
  - Authorities are preparing to conduct a small scale survey to update the poverty profile.
  - The poor are often rural households with larger families, headed by females and working in the agriculture and fishing industries.
- Recent growth has been robust but may have been concentrated in sectors such as telecommunication and tourism which could have had limited impact on the poor; an ongoing Poverty Assessment exercise will further analyze this issue.

### II. STRATEGIC PRIORITIES, RISKS AND CHALLENGES
Findings and short-term macroeconomic outlook:
- Macroeconomic performance has been strong in the recent past: robust growth and relatively low inflation.
- The current global economic slowdown is likely to adversely affect growth in The Gambia and widen the external current account deficit by slowing down tourism and remittances.
- Re-export trade appears to be contracting as the country’s regional comparative advantages deteriorate and foreign direct investment is projected to level off after rising sharply in recent years.
- Real GDP growth is projected to decline to 4.6 percent in 2009 from 5.9 percent in 2008.
- Given the expected slowdown and indications of weakening government revenues, staffs encourage the government to continue prudent macroeconomic policies and provide a growth-friendly environment.
- Staffs support the government’s policy of limiting domestic borrowing in order to reduce the large domestic public debt.

External debt and diversification:
- Staffs recommend that future APRs pay more attention to external debt sustainability issues.
- Recent Debt Sustainability Analysis (DSA) indicates continued high risk of debt distress.
- Export diversification and finding new sources of growth are critical given the decline of the country’s traditional strengths as a regional trading hub.

Budgetary resources and PRSP expenditures:
- Staffs support government efforts to increase budgetary resources to poverty reducing expenditures.
- Preliminary budget outturn data indicate that PRSP related expenditures as a share of total Government Local Funds (excluding interest payments) declined from 2002 to 2005, in particular due to sharply increasing debt service payments.
- The authorities reduced domestic borrowing and received substantial external debt relief when the country reached HIPC completion point in December 2007.
- Preliminary data indicate that the share of PRSP related expenditures in the budget outturn have been gradually increasing.
- The share of PRSP expenditures in budget allocations have increased in 2009 compared to 2008; it will be critical that the budget outturns reflect the increased budgetary allocations.

Public expenditure management and IFMIS:
- There have been steady improvements in the budgeting process: revised budget classification, integrating recurrent and development expenditures, developing sectoral policies and expenditure reviews, reducing backlog in public accounts.
- The APR notes the impact of the Integrated Financial Management Information System (IFMIS) on improving public expenditure management and monitoring of PRSP related expenditures.
- IFMIS currently processes all central government transactions and produces public accounts and fiscal reports in a relatively timely manner.
- Staffs recommend adequately funding the recurrent costs of IFMIS as identified in the government’s IFMIS Sustainability Plan, and building local capacity through recruitment and training of Treasury staffs within a government-wide manpower plan.

Civil service and human resource management:
- Strengthening human resource management is critical to the success of ongoing civil service reforms.
- The APR highlights the need to increase civil service compensation to improve recruitment and retention of qualified personnel.
- Staffs recommend complementary reforms: strengthen staff assessment, performance management and overall manpower planning.
- Evidence indicates the civil service significantly expanded in recent years and expansion rate was not immediately apparent due to shortcomings in centralized management and monitoring.
- Sustained political commitment for implementation of the civil service reform program is essential.

Agriculture and groundnut sector:
- The agriculture sector, where most of the poor are engaged, has performed relatively poorly in recent years although crop productions rebounded in 2008 due to comparatively good rainfalls.
- A major constraint has been lack of policy clarity, continuity and predictability.
- Staffs recommend developing a comprehensive and cohesive agriculture sector strategy identifying priority interventions, emphasizing export diversification and private sector development.
- Staffs recommend comprehensive assessment of the impact of existing investment projects to determine priority interventions and stabilizing the sector’s institutional environment.
- Improved performance will likely require greater allocation of resources for recurrent expenditures.
- Groundnut sector specifics:
  - Groundnut sector traditionally accounted for over 70 percent of domestically produced exports.
  - Groundnut farmers are the largest group among the poor.
  - The sector has been undermined by a dysfunctional marketing arrangement.
  - The Roadmap prepared in 2007 emphasizes open competition based on a minimum producer price, divesting the Government-owned Gambia Groundnut Corporation (GGC), improving access to agricultural production inputs and establishing a quality control system.
  - Timely implementation of the Roadmap is expected to significantly contribute to alleviating poverty among groundnut farmers.
  - It will be critical to promote private investments by providing a level playing field with no preferential treatment.
  - Staffs recommend accelerating Roadmap implementation and further developing it with respect to improving access to inputs and extension services and strengthening institutional capacity of key public and private stakeholders, including producer associations.
  - Any adverse social distributional impact of the reforms should be monitored and adequately addressed.

Economic governance and private sector:
- Stronger efforts are needed to ensure a greater focus on improving economic governance to promote private sector-led growth.
- Key governance priorities for competitiveness and investment climate:
  - (i) greater protection of contractual rights and respect for legal due process;
  - (ii) use of open and competitive bidding process for divestiture of public enterprises and sale of major licenses, such as for telecommunication;
  - (iii) strengthening of the Public Utilities Regulatory Authority (PURA) through provision of adequate resources and enhancement of its independence and mandate.
- Building on improved economic governance, the authorities could address poor availability and high cost of finance, lack of access to land and the multiplicity of taxes and government fees which aggregate to a significant burden.
- Staffs recommend consolidating the investment laws and overhauling the discretionary duty exemption system.

Social sectors, MDGs, health and education:
- The MDG goal of halving poverty is unlikely to be met, but the APR notes relatively good progress on universal primary education and gender parity.
- Major government initiatives benefited from donor support and the EFA-FTI.
- With relative improvements in access, the next key challenges are improving quality of school instruction and educational outcomes given high failure rates in standardized tests.
- For the health sector, staffs recommend focusing public resources on primary services and preventive care.
- Improving health outcomes depends on ability of government to provide adequate recurrent resources to health facilities, particularly health professionals and drugs.
- For both health and education sectors, consider mandatory rotations as well as current incentive programs for rural placement of staffs.
- Staffs recommend that expansion of school and health facilities be on a sustainable basis by taking into account government capacity to provide recurrent costs.

HIV/AIDS, malaria and tuberculosis:
- Malaria remains the leading cause of morbidity and mortality and is particularly a problem for pregnant women and children under five years.
- Staffs recommend a comprehensive assessment of malaria as well as tuberculosis and strengthening of disease surveillance and response capacity at all levels.
- Latest sero-surveillance data indicate HIV-1 prevalence doubled from 1.4 percent in 2002 to 2.8 percent in 2006.
- Prevalence of HIV among young women and men aged 15-24 tripled from 0.8 percent to 2.4 percent during the same period.
- Only 8.8 percent of people with advanced HIV infection and 14.1 percent of HIV positive pregnant women receive antiretroviral therapy.
- It is critical to use the recently approved Global Fund to expand availability of HIV/AIDS programs, including educational outreach to reduce further infections.
- Government could consider reestablishing posts of divisional coordinators of the National HIV/AIDS Secretariat (NAS) to strengthen regional presence.

Principal risks to PRSP objectives:
- Main risks include impact of external shocks, insufficient prioritization and weak capacity.
- Global economic slowdown expected to reduce economic growth and government revenues, which could put pressure on resources allocated to PRSP related expenditures.
- Given reduced overall resources, critical actions include reallocation of funds to PRSP priority activities, prioritizing within PRSP priorities as necessary, and ensuring efficient and effective use of funds.
- Recommend comprehensive assessment of impact of existing and planned projects.
- Continued public sector capacity building reforms, particularly civil service reforms, are critical to mitigate low capacity risks.
- A credible, transparent and predictable policy environment supporting private investments is critical to building resilience to external shocks.

### III. KEY IMPLEMENTATION ISSUES
Monitoring and evaluation:
- Improving monitoring and evaluation of the PRSP program remains an important challenge.
- Relatively little information is provided in the APR’s results matrix on achievement of the 2007 targets apart from macroeconomic indicators.
- The 2007 MDG Status Report and the 2007 Poverty Reducing Expenditure Report provided complementary information for PRSP monitoring.
- Staffs recommend these reports be prepared annually and that their main findings be reflected in the APR.
- Staffs recommend refining PRSP policies and target output and outcome indicators to make them more specific and concrete, especially for agriculture, governance and cross-cutting issues (gender and environment).
- Refinement of policies would provide an opportunity to review government priorities, critical given the sizable funding gap identified in the PRSP.
- Prioritizing will be even more critical in light of projected decline in government revenues due to the global economic slowdown.

Data quality and timeliness:
- Improving quality and timeliness of data, particularly economic statistics, is needed to improve program monitoring.
- After survey field works are conducted, there are often significant lags until the data become available.
- Archiving and dissemination of data remain relatively weak.
- Authorities have enacted the Statistics Act (2005) and established the Statistic Council and the Gambia Bureau of Statistics (GBOS).
- Staffs recommend prioritizing implementation of the government’s “Strategic Plan for the Development of Statistics in The Gambia: 2008-11,” focusing on structural reforms and capacity building of GBOS.
- Staffs support the Strategic Plan’s proposal for a “performance contract” for GBOS to hold it accountable for improved data quality and availability.

Medium Term Expenditure Framework (MTEF) and budget linking:
- The PRSP highlights the MTEF as a means to deepen integration of PRSP priorities with the budget.
- Adoption of MTEF would be feasible only if there is credible commitment to future sectoral budgetary allocations.
- As initial steps towards eventual MTEF adoption, staffs recommend major sectors improve annual budget submissions by incorporating target output and outcome indicators linked to proposed expenditures.
- Departments of State with sectoral policies and public expenditure reviews should use them to derive PRSP performance indicators.
- Sectoral policies and expenditure reviews could be gradually expanded to remaining Departments.
- As sectoral policies are refined, budget codes identifying PRSP related expenditures can be revised to reflect new policies.

Governance:
- Strengthened governance remains a priority for PRSP implementation.
- International observers generally agree that the country’s oversight institutions and the opposition media are weak.
- Strengthened governance would enhance transparency and accountability of the public sector and reduce risk of policy slippages.
- The PRSP has been prepared in an open, transparent and participatory manner to promote country ownership and a government responsive to the needs of the poor.

*Prepared by the Staffs of the International Monetary Fund and the International Development Association; Approved by Emilio Sacerdoti and Dominique Desruelle (IMF) and Obiageli K. Ezekwesili (IDA); February 3, 2009.*

### Section 2

### _cr0976 - Section 2

### Implementation of Previous JSAN Recommendations (paragraph 19)
- Implementation of the recommendations of the previous JSAN has been mixed.
- As recommended, the authorities:
  - maintained prudent macroeconomic policies,
  - achieved the completion point triggers for the HIPC program,
  - prepared a groundnut sector reform strategy,
  - strengthened the governance of the Central Bank,
  - developed a civil service reform strategy focused on pay and human management reforms.
- Some recommendations are being implemented on an ongoing basis, including for education and health.
- Regarding the recommendation on the investment climate:
  - the authorities currently are collaborating with IDA on an ongoing Investment Climate Assessment (ICA),
  - the authorities are preparing a new Growth and Competitiveness Project for addressing some of the identified shortcomings.
- Areas with less success include:
  - developing an agriculture sector strategy beyond the groundnut sector,
  - preparing an implementation and sensitization program for decentralization,
  - improving the management of the electricity utility and PURA,
  - further prioritizing the PRSP and refining the performance indicators.

### Conclusion on PRSP Implementation for 2007 (paragraph 20)
- The staffs believe that the progress report provides an adequate assessment of PRSP implementation for 2007.
- Progress noted:
  - Macroeconomic stability and real growth was maintained,
  - Public financial management was strengthened,
  - Progress was made in the key social sectors.
- Areas of relative weakness:
  - Progress has been relatively slow with regards to agricultural reforms and decentralization,
  - There could be a greater emphasis on governance, including economic governance, and the groundnuts sector reforms.
- PRSP monitoring:
  - Improved with the complementary reports on MDGs and poverty related public expenditures,
  - The PRSP target outcome and output indicators would benefit from further refinement.
- External challenges since 2007:
  - The country has had to deal with sharply increasing import prices and the impact of the ongoing global economic slowdown.
- Staffs' assessment:
  - It is critical that the country maintains its commitment to the PRSP program in the midst of these new challenges.

### Priority Areas for Strengthening PRSP Implementation (paragraph 21)
- Priority areas identified by staffs:
  - (i) developing a comprehensive agricultural sector strategy;
  - (ii) prioritizing improvement of governance; and
  - (iii) refining PRSP performance indicators.

*Source: _cr0976 - Section 2*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr0976.pdf_