## The Strategy for Accelerated Growth and Sustained Development (SCADD) — Joint Staff Advisory Note (excerpt)

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### SCADD purpose, framework, and main pillars
- Adopted by the government in December 2010 to provide a framework for 2011—15.
- Builds on the Poverty Reduction and Growth Strategy (PRSP) implemented in 2000—2010 and Burkina Faso Vision 2020.
- Objectives: support broad-based growth, sustained poverty reduction, and progress towards the Millennium Development Goals (MDGs).
- Macroeconomic policies and structural reform priorities aligned with the IMF Extended Credit Facility Arrangement and consistent with the recent World Bank Africa strategy.
- Four pillars:
  - (i) promotion of growth poles and reduction of economic vulnerability;
  - (ii) development of economic infrastructure;
  - (iii) investment in human development;
  - (iv) promotion of sustainable development.

### Consultation, governance, and social context
- SCADD preparation involved extensive consultations at national and regional levels, thematic studies, and a website for public contributions.
- Prepared before the social unrest of 2011; staffs emphasize increased priority on good governance, accountability, and inclusive growth during implementation.
- Social unrest 2011: broad protests (soldiers, farmers, students, shopkeepers) highlighted demands for impartial justice, transparent procurement, open political debate, and stronger anti-corruption measures.
- Development partners view increased need for broader legitimate avenues for citizen voice.

### Poverty analysis and key statistics
- Staffs agree with SCADD’s assessment of poverty and find poverty characteristics well-documented.
- Recommendations:
  - Continue refining statistical methodologies to ensure comparability across surveys.
  - Conduct additional empirical work on underlying causes of poverty and on poverty dynamics to better guide public investment priorities.
  - Strengthen links between public investment and the rural economy; deepen cotton sector reforms to support rural growth and poverty reduction.
- Key statistics:
  - Preliminary results of the 2009 household survey show a 2.5 percentage points decline in poverty to 43.9 percent.
  - Gini coefficient has stayed at 0.46 since the mid—90s.
  - Poverty was reduced in rural areas but increased in urban areas over 2003—2009 (noting potential measurement errors due to survey incomparability).
  - Use of improved cotton seeds: from 20 percent of cultivated area in 2009 to more than 60 percent by 2011 (sector reform target).

### Macroeconomic performance, targets, and financing
- Recent performance:
  - Economic growth averaged 6 percent in 2000—10, driven by agriculture, cotton, mining, and services.
  - Inflation moderate, particularly in the last two years prior to the report.
  - External position fragile due to narrow export base and vulnerability to terms-of-trade shocks.
  - Authorities maintained prudent borrowing policies.
- Staff assessment and advice:
  - Efficient implementation could accelerate growth and enhance poverty reduction.
  - SCADD target of averaging 10 percent growth in 2011—15 considered too optimistic given implementation lags and impediments.
  - Authorities should be selective, define key priorities compatible with implementation capacity, private sector participation, and available financing.
  - Revise macroeconomic framework at the time of the first APR to reflect 2011 developments and align growth objectives with projected public investment and expected impact of reforms.
  - Staffs urge actions to launch the pilot growth pole of Bagré in collaboration with the World Bank.
- Fiscal framework and costing:
  - Strategy estimated cost: about US$15 billion for 2011−15.
  - SCADD lacks a comprehensive medium-term macroeconomic framework and supporting fiscal strategy beyond the fiscal framework Table; staffs urge addressing this in the first APR.
  - Financing aligned with the government budget framework; SCADD implementation programs and investment projects presented as part of the government budget (allowing scalability in case of financing shortfalls).
  - Staffs encourage updating the costing in the first APR to reflect investment prioritization and to identify financing sources for any remaining gap.

### Structural reforms, sectoral priorities, and infrastructure
- Priority reform areas: public financial management, financial sector development, cotton sector reforms, and the business environment.
- Financial intermediation constraints:
  - inadequate supply of financial services and lack of expertise in SME lending;
  - poor regulatory environment;
  - weaknesses in financial information infrastructure;
  - weak SME management capacity (accounting, project development).
- Cotton sector:
  - Efforts to increase productivity, scale up improved cotton seeds (20 percent in 2009 to more than 60 percent by 2011), reduce producers’ debts, and recapitalize SOFITEX.
  - Staffs see opportunity to press ahead with reforms for medium-term financial viability.
- Investment climate:
  - Authorities ranked among the top ten reformers globally and first in the WAEMU in the last three years.
  - Doing Business ranking: 152 out of 183 countries in 2011.
  - Key improvements: rigidity index for employment, business registration, strengthening land property, establishing commercial courts.
  - Remaining constraint: judiciary weaknesses; staffs encourage a judicial sector reform program under SCADD aligned with WAEMU initiatives.
- Infrastructure and PPPs:
  - SCADD focuses on roads, airports, and electricity; World Bank-supported Bagré Growth Pole Program intended to be piloted and evaluated before replication.
  - Staffs encourage preparing a PPP law consistent with the March 2011 PPP strategy and establishing an appropriate institutional framework.
  - Concern about high transport transaction costs; preparatory studies on trucking liberalization are welcome but need careful implementation.
- Electricity and energy:
  - Bobo-Dioulasso-Ouagadougou transmission line commissioned at end—2009.
  - Burkina Faso experienced load shedding during early 2010 and again during 2011, partly due to shortages from Côte d’Ivoire.
  - Participation in the West African Power Pool would improve access to regional supplies and reduce costs.
  - Staffs suggest articulating a sustainable national energy strategy addressing pricing rationalization and renewable energy exploitation.

### Rural development and agriculture
- Priority on rural development given prevalence of rural poverty; prepare and implement a rural development strategy as part of SCADD to slow rural exodus and reduce rural poverty.
- Need to improve farmer access to quality inputs and credit; use the first APR to discuss measures to raise productivity and strengthen agricultural robustness.
- Focus on increasing productivity in food value chains (maize, rice, sorghum, millet) and adopting post-harvest technologies and management practices.
- Support measures to address vulnerability to climate change and land degradation.

### Human development: education, health, HIV/AIDS, social inclusion
- Education:
  - Ten-Year Basic Education Development Plan (PDDEDB, 2001−2010) achievements:
    - number of schools rose from 8,182 in the 2006/07 school year to 10,198 in 2009/10, an increase of 25 percent;
    - number of classrooms grew from 28,925 to 38,269 during the same period;
    - gross enrollment rate in primary education increased by more than 10 percentage points between 2005 and 2010.
  - Adult literacy estimate: 28.7 percent in 2007.
  - Staffs recommend continued implementation of education strategy, scaling-up sectoral investment and reforms, close monitoring of drop-out rates, and measures to improve teacher quality.
- Health:
  - A new ten-year health sector program (PNDS II) 2011−2020 adopted in 2010.
  - Public health expenditure increased from 7.4 percent of GDP in 2004 to about 10 percent in 2010.
  - Percentage of births assisted by trained health personnel increased to reach 70 percent in 2010.
  - Despite progress, MDGs in health sector are unlikely to be met by 2015; staffs encourage increased financing, improved equity of resource allocation, and strengthened linkages between investments and outcomes.
- HIV/AIDS:
  - Third-phase HIV/AIDS strategy (2010−2015) prepared to improve targeting.
  - HIV prevalence: 2008 prevalence rate was 1.8 percent compared with 2.03 percent in 2006.
  - Staffs propose deeper analysis of HIV trends through APRs and welcome multi-sectoral focus.
- Social inclusion and safety nets:
  - Total budget for poverty-reducing spending increased from 5.3 percent of GDP in 2006 to 6.8 percent in 2010.
  - Scope and coverage of existing social safety net system remains limited:
    - On average, excluding fuel subsidies, spending on social safety net programs was about 0.6 percent of GDP in 2005-09.
  - Universal fuel subsidies are expensive and have had limited impact on the poorest deciles.
  - Staffs recommend improving focus on social safety nets and preparing a medium-term youth employment action plan.

### Governance, decentralization, and public financial management
- Economic governance:
  - SCADD identifies economic governance as strategically important; staffs welcome frank discussion of constraints.
  - Priorities: strengthening the rule of law; consolidating fiscal decentralization; strengthening accountability within the civil service.
  - Staffs emphasize accelerating and prioritizing justice sector reforms and enhancing access to information.
  - Progress noted on Extractive Industry Transparency Initiative (EITI) conformity measures in 2011.
- Decentralization:
  - Effective decentralization can streamline expenditure, reduce regional inequalities, and better address local needs.
  - Staffs recommend developing an equitable revenue collection base for local governments and strengthening citizen engagement in local development.
  - SCADD recognizes weak local government capacity and limited transfer of resources; reforms should address financial transfers and rationalization of administrative structures.
- Public financial management:
  - Authorities commit to improve PFM and coherence with WAEMU guidelines; intend to pursue program budgeting.
  - Relevant WAEMU reforms: decentralization of budget management; accrual accounting; risk-based approach for internal control bodies; certification of the state financial statement by the Supreme Audit institution.
  - Audit Court publishes a Yearly Audit Report; quality improved per 2010 PEFA results.
  - Staffs advise timely publication of reports, follow-up on recommendations, revise the Organic Law for the Supreme Audit Institution, and increase support to external oversight bodies.

### Implementation, monitoring, evaluation, and risks
- Implementation arrangements in place, including sectoral and thematic commissions and a National Steering Committee (NSC).
- Remaining needs:
  - address administrative capacity constraints;
  - strengthen performance matrix and monitoring with annualized benchmarks;
  - ensure NSC is equipped with human, financial, and technical resources and coordinate with thematic groups;
  - improve quality and timeliness of data, communication between ministries, analytical capacity, accountability, and statistical capacity.
- Key risks to implementation:
  - continued or worsening social unrest;
  - securing financing for strategy implementation;
  - vulnerability to natural disasters, terms of trade shocks, and adverse regional/global developments;
  - stakeholders’ consensus.
- Staffs urge using the first APR to prepare contingency measures should key risks materialize.

### Staff recommendations (paragraph 29)
- Give higher priority to the issues of governance and accountability and provide more details on the types of reforms to be adopted.
- Refine poverty dynamics analysis through additional empirical and analytical work.
- Define clear priorities in development policies and planned investment projects, focusing on:
  - improving the business environment further;
  - closing the infrastructure gap;
  - addressing administrative capacity constraints.
- Revise the macroeconomic framework underlying the SCADD to ensure growth projections take into account developments in 2011; ensure consistency with projected public investment and related financing constraints; identify financing sources for residual financing gaps, particularly for the next year.
- Prepare a medium-term macroeconomic framework and supporting fiscal strategy for the SCADD, with particular emphasis on revenue-enhancing measures.
- Prepare a medium-term strategy to accelerate structural reforms in priority areas identified in the SCADD.
- Press ahead with preparation of a PPP law consistent with the new strategy adopted in early 2011, and establish an appropriate institutional framework.

*Joint Staff Advisory Note (World Bank and IMF staffs) on the SCADD (excerpt).*

### 1.      The Strategy for Accelerated Growth and Sustained Development (SCADD),

### 1.      The Strategy for Accelerated Growth and Sustained Development (SCADD)

### SCADD purpose and framework
- Adopted by the government in December 2010 to provide a framework for 2011—15.
- Builds on the Poverty Reduction and Growth Strategy (PRSP) implemented in 2000—2010 and Burkina Faso Vision 2020.
- Objectives: support broad-based growth, sustained poverty reduction, and progress towards the Millennium Development Goals (MDGs).
- Macroeconomic policies and structural reform priorities aligned with the IMF Extended Credit Facility Arrangement and consistent with the recent World Bank Africa strategy.
- The Joint Staff Advisory Note (JSAN) provides World Bank and IMF staff comments and advice to strengthen implementation, notably through annual progress reports (APRs).

### Main pillars and MDG-related priorities
- Four pillars:
  - (i) promotion of growth poles and reduction of economic vulnerability;
  - (ii) development of economic infrastructure;
  - (iii) investment in human development;
  - (iv) promotion of sustainable development.
- MDG- and poverty-reduction emphases:
  - Eradication of extreme poverty and hunger.
  - Achievement of universal primary education.
  - Promotion of gender equality and empowerment of women.
  - Improvement in general health, notably lower mortality for children under-five years of age.
  - Improvement in maternal health, and fight against HIV/AIDS, malaria, and other diseases.
  - Environmental sustainability.

### Consultation, timing, and governance concerns
- SCADD preparation: extensive consultations at national and regional levels, thematic studies, and a website for public contributions.
- Prepared before the social unrest of 2011; staffs emphasize the need to increase priority on good governance, accountability, and inclusive growth during implementation.
- Social unrest 2011: broad protests (soldiers, farmers, students, shopkeepers) highlighted demands for impartial justice, transparent procurement, open political debate, and stronger anti-corruption measures.
- Staffs note development partners’ view of increased need for broader legitimate avenues for citizen voice.

### Poverty analysis (staff assessment and data)
- Staffs agree with the broad assessment of poverty in the SCADD and find poverty characteristics well-documented.
- Recommendations:
  - Continue refining statistical methodologies to ensure comparability across surveys.
  - Conduct additional empirical work on underlying causes of poverty and on poverty dynamics to better guide public investment priorities.
  - Strengthen links between public investment and the rural economy; deepen cotton sector reforms to support rural growth and poverty reduction.
- Key statistics from SCADD and associated analyses:
  - Preliminary results of the 2009 household survey show a 2.5 percentage points decline in poverty to 43.9 percent.
  - Gini coefficient has stayed at 0.46 since the mid—90s.
  - Poverty was reduced in rural areas but increased in urban areas over 2003—2009 (noting potential measurement errors due to survey incomparability).
  - Use of improved cotton seeds: from 20 percent of cultivated area in 2009 to more than 60 percent by 2011 (sector reform target).

### Macroeconomic policies and financing
- Recent macroeconomic context and performance:
  - Economic growth averaged 6 percent in 2000—10, driven by agriculture, cotton, mining, and services.
  - Inflation moderate, particularly in the last two years prior to the report, helped by increased agricultural production.
  - External position fragile due to narrow export base and vulnerability to terms-of-trade shocks.
  - Authorities maintained prudent borrowing policies.
- Staffs’ assessment and advice:
  - Efficient implementation of SCADD policies could accelerate growth and enhance poverty reduction.
  - Staffs consider the SCADD target of averaging 10 percent growth in 2011—15 too optimistic and possibly unrealistic given time needed to implement policies and address impediments.
  - Authorities should be selective, define key priorities compatible with implementation capacity, private sector participation, and available financing.
  - Define clear development policy priorities focused on improving the business environment and closing the infrastructure gap.
  - Revise the macroeconomic framework at the time of the first APR to reflect 2011 developments and make growth objectives consistent with projected public investment and expected impact of reforms.
  - Staffs urge actions to launch the pilot growth pole of Bagré in collaboration with the World Bank.
- Fiscal framework and costing:
  - Staffs welcome emphasis on macroeconomic stability, fiscal sustainability, and prudent borrowing policies.
  - SCADD lacks a comprehensive medium-term macroeconomic framework and supporting fiscal strategy beyond the fiscal framework Table; staffs urge addressing this in the first APR.
  - Strategy estimated cost: about US$15 billion for 2011−15.
  - Financing aligned with the government budget framework; SCADD implementation programs and investment projects presented as part of the government budget (allowing scalability in case of financing shortfalls).
  - Staffs encourage updating the costing in the first APR to reflect investment prioritization and to identify financing sources for any remaining gap; also encourage elaboration on the costing method.

### Equity and poverty reduction — structural reforms and sectoral policies
- Priority structural reform areas: public financial management, financial sector development, cotton sector reforms, and the business environment.
- Financial intermediation:
  - Limited access to financial services is a major obstacle to private-sector development, particularly for SMEs.
  - Constraints: (i) inadequate supply of financial services and lack of expertise in SME lending; (ii) poor regulatory environment; (iii) weaknesses in financial information infrastructure; (iv) weak SME management capacity (accounting, project development).
  - Staffs welcome commitment to improve access and encourage accelerated implementation of the financial sector strategy.
- Cotton sector:
  - Efforts to improve viability through increased productivity, scaling up improved cotton seeds (20 percent in 2009 to more than 60 percent by 2011), reducing producers’ debts, and recapitalization of SOFITEX.
  - Staffs believe prospects provide an opportunity to press ahead with reforms for medium-term financial viability.
- Investment climate and business environment:
  - Authorities made important progress: ranked among the top ten reformers globally and first in the West African Economic and Monetary Union (WAEMU) in the last three years.
  - Doing Business ranking: 152 out of 183 countries in 2011.
  - Key improvements: rigidity index for employment, business registration, strengthening land property, establishing commercial courts.
  - Remaining constraint: judiciary weaknesses deter financial and private sector development; staffs encourage preparation of a judicial sector reform program under the SCADD, aligned with WAEMU initiatives.
- Infrastructure development and PPPs:
  - SCADD focuses on roads, airports, and electricity; World Bank-supported Bagré Growth Pole Program intended to promote agribusiness and water-resource control, to be piloted and evaluated before replication.
  - Staffs encourage preparing a PPP law consistent with the March 2011 PPP strategy and establishing an appropriate institutional framework.
  - Concern about high transport transaction costs; preparatory studies on trucking liberalization (elimination of quota and queuing systems) are welcome but need careful implementation.
- Electricity and energy strategy:
  - Bobo-Dioulasso-Ouagadougou transmission line commissioned at end—2009.
  - Burkina Faso experienced load shedding during early 2010 and again during 2011, partly due to shortages from Côte d’Ivoire.
  - Participation in the West African Power Pool would improve access to regional supplies, reduce costs, and offer ICT connectivity opportunities.
  - Staffs suggest articulating a sustainable national energy strategy addressing pricing rationalization and renewable energy exploitation.
- Rural development and agriculture:
  - Priority on rural development given prevalence of rural poverty; recommendation to prepare and implement a rural development strategy as part of SCADD implementation to slow rural exodus and reduce rural poverty.
  - Need to improve farmer access to quality inputs and credit; use the first APR to discuss measures to raise productivity and strengthen agricultural robustness.
  - Focus on increasing productivity in food value chains (maize, rice, sorghum, millet) and adopting post-harvest technologies and management practices.
  - Support for measures to address vulnerability to climate change and land degradation.

### Key short-term risks and 2011 developments
- Social unrest in the first half of 2011 and adverse exogenous shocks (higher fuel and food prices, crisis in Côte d’Ivoire) likely to adversely affect the first year of SCADD implementation and led to additional expenditures.
- Government responses: dialogue with socio-political groups, steps to foster transparency and accountability, social measures including price reductions for some basic staples and reduced tax rate on salaries.
- Staffs encourage revising macroeconomic framework in the first APR and aligning growth objectives with fiscal and implementation realities.

*Joint Staff Advisory Note (World Bank and IMF staffs) on the SCADD (excerpt).*

### 17.      The SCADD appropriately identifies economic governance as strategically

### 17.      The SCADD appropriately identifies economic governance as strategically

### Economic governance and rule of law
- SCADD identifies economic governance as strategically important for Burkina Faso’s development.
- Staffs welcome the SCADD’s frank discussion of constraints in enhancing governance and highlight importance of:
  - strengthening the rule of law;
  - consolidating fiscal decentralization;
  - strengthening accountability within the civil service to promote governance.
- Recent unrest has highlighted the importance of further governance reforms.
- SCADD emphasizes continuing development of robust internal and external controls to curb corruption and ensure accountability of public institutions.
- Staffs consider an independent, efficient and responsive judiciary vital to ensure internal and external controls lead to accountability, sanctioning of misconduct and prevention of future abuses by public institutions.
- Challenge: accelerate and prioritize justice sector reforms, especially relevant in the wake of the recent unrest, by providing appropriate resources and monitoring performance.
- Transparency recommendation: clearer emphasis on enhancing access to information by the population.
- Staffs recognize progress in implementing conformity measures for the Extractive Industry Transparency Initiative (EITI) principles in 2011.

### Decentralization and service delivery
- An effective decentralized program of service delivery can:
  - streamline the expenditure process;
  - reduce regional inequalities;
  - better address needs of the local population, particularly the most vulnerable groups.
- Staffs recommend:
  - focus on developing an equitable revenue collection base for local governments to fulfill their mandate;
  - explore opportunities for strengthening citizen engagement in local development, beyond elaboration of local development plans.
- Authorities’ commitment to decentralization is welcomed for potential to enhance efficiency gains, improve service delivery, stimulate localized economic growth, and promote equitable redistribution of growth.
- SCADD recognizes decentralization challenges: weak local government capacity and limited transfer of resources.
- Decentralization reforms in SCADD can address adequate financial transfers to local level and rationalization of administrative structures, together with improvements in civil service administration.
- Complementary reform: manage urbanization needs via better urban planning and improvement in city quality to build stronger rural-urban linkages.
- Staffs recommend continued focus on decentralization, with emphasis on building local government capacity and transfer of competence and resources from national to local levels.

### Public financial management
- Staffs welcome authorities’ commitment to improve public financial management and ensure greater coherence with WAEMU guidelines.
- Budget process: authorities intend to pursue program budgeting approach.
- This reform should be implemented in coherence with PFM Directives recently issued by WAEMU commission, including reforms in:
  - decentralization of budget management;
  - accrual accounting;
  - adoption of the risk-based approach for internal control bodies;
  - certification of the state financial statement by the Supreme Audit institution.
- Audit Court (Cour des Comptes) now publishes on a regular basis a Yearly Audit Report; quality improved according to the 2010 PEFA results.
- Staffs advise:
  - ensure timely publication of these reports and follow up on recommendations;
  - address remaining challenges for revision of the Organic Law for the Supreme Audit Institution;
  - increase financial and technical support to external financial oversight bodies.

### Human development — Education
- Progress noted in access to education, though quality remains a concern.
- Ten-Year Basic Education Development Plan (PDDEDB, 2001−2010) achievements:
  - number of schools rose from 8,182 in the 2006/07 school year to 10,198 in 2009/10, an increase of 25 percent;
  - number of classrooms grew from 28,925 to 38,269 during the same period;
  - gross enrollment rate in primary education increased by more than 10 percentage points between 2005 and 2010.
- Reform helped reduce school fees in lower secondary school; access to secondary and higher education increased.
- Remaining issues: important disparities among regions; difficulties in attracting and retaining skilled personnel.
- Adult literacy estimate: 28.7 percent in 2007.
- Staffs recommend:
  - continued implementation of education strategy and scaling-up of sectoral investment and reforms;
  - close monitoring of drop-out rates in primary education;
  - measures to improve access to schools and teacher quality.

### Human development — Health
- Staffs welcome focus on health sector; note good progress in 2009−2010.
- A new ten-year health sector program (PNDS II) 2011−2020 adopted in 2010.
- Public health expenditure increased from 7.4 percent of GDP in 2004 to about 10 percent in 2010.
- Percentage of births assisted by trained health personnel increased to reach 70 percent in 2010.
- Despite progress, MDGs in health sector are unlikely to be met by 2015.
- Staffs encourage decisive actions to:
  - increase health sector financing;
  - improve equity of resource allocation;
  - improve coverage and efficiency of health expenditures;
  - strengthen linkages between investments and outcomes in the health sector.

### HIV/AIDS
- Authorities prepared a third-phase HIV/AIDS strategy (2010−2015) to improve targeting, including for high-risk groups.
- HIV prevalence trends:
  - 2008 prevalence rate was 1.8 percent compared with 2.03 percent in 2006.
- SCADD envisages scaling up interventions to reduce HIV incidence.
- Staffs propose deeper analysis of HIV trends through APRs and encourage continuation of reforms; welcome multi-sectoral focus and orientation towards prevention and surveillance.

### Social inclusion, safety nets, and gender
- Total budget for poverty-reducing spending increased from 5.3 percent of GDP in 2006 to 6.8 percent in 2010.
- Staffs stress importance of greater allocation of budgetary resources to protect vulnerable groups and call for deeper analysis of vulnerable groups’ needs beyond current SCADD coverage.
- Scope and coverage of existing social safety net system remains limited.
  - On average, excluding fuel subsidies, spending on social safety net programs was about 0.6 percent of GDP in 2005-09.
  - Universal fuel subsidies are expensive and have had limited impact on the poorest deciles.
- Staffs recommend improving focus on social safety net systems and preparing a medium-term youth employment action plan to smooth employment policy.
- Gender inequality: SCADD recognizes obstacles faced by women and disparities in school enrolment.
  - Authorities adopted a new National Policy for Gender Promotion in 2009 and an implementation plan in 2010.
  - Permanent Secretariats for gender promotion were created in 2010 at central and regional levels.
- Staffs believe SCADD could provide a platform for addressing gender inequality.

### Implementation, monitoring, and evaluation
- SCADD’s implementation strategy comprises institutional arrangements, review processes, and annual consultations between government and development partners.
- Institutional setup for monitoring and evaluation has been put in place, though challenges remain.
  - Sectoral and thematic commissions monitor programs and report progress; provide a forum for policy dialogue and results monitoring.
  - Strategy is comprehensive with clearly defined responsibilities.
- Remaining needs:
  - address administrative capacity constraints to ensure efficient functioning of monitoring and assessment mechanisms;
  - strengthen performance matrix and monitoring system with annualized benchmarks to measure progress.
- National Steering Committee (NSC) should be entrusted with overall oversight of implementation.
  - Staffs urge ensuring NSC is adequately equipped with human, financial, and technical resources;
  - NSC needs proper coordination with thematic groups.
- Staffs underscore need to improve:
  - quality and timeliness of data to assess impact of macroeconomic and social policies;
  - communication and information flows between ministries;
  - analytical capacity and accountability for all stakeholders;
  - statistical capacity and data quality to properly track progress and create accountability.

### Risks to implementation
- Key risks to SCADD implementation include:
  - continued or worsening social unrest;
  - securing financing for strategy implementation;
  - economy’s vulnerability to natural disasters, terms of trade shocks, and potential adverse regional and global developments;
  - stakeholders’ consensus.
- Achieving SCADD objectives depends on authorities’ ability to address these risks while removing impediments to growth.
- Recent social unrest points to need to secure social cohesion and enhance credibility of economic and social policies.
- Staffs urge using the first APR to prepare contingency measures should key risks materialize.

### Conclusion and priorities
- Authorities set ambitious developmental goals under the SCADD for the next five years.
- To safeguard successful implementation, authorities need to address shortcomings in:
  - investment execution;
  - procurement processes;
  - absorptive capacity;
  - public investment financing constraints.
- As authorities plan to rely mostly on domestic resources, they will need to prepare a medium-term fiscal strategy with specific measures to enhance revenue collection and advance expenditure management reforms.
- To address human development challenges: maintain momentum of social sector reforms, improve access to social services, and develop effective social protection systems.
- Advancing structural reforms is critical to enhance growth prospects and fight poverty, with particular emphasis on:
  - restoring viability of the cotton sector;
  - improving overall investment climate;
  - strengthening diversification;
  - enhancing governance;
  - improving service delivery in health and education.

### Staff recommendations (from paragraph 29)
- Give higher priority to the issues of governance and accountability and provide more details on the types of reforms to be adopted.
- Refine poverty dynamics analysis through additional empirical and analytical work to assess causes of poverty and better grasp link between poverty outcomes and policy measures.
- Define clear priorities in development policies and planned investment projects, focusing on:
  - improving the business environment further;
  - closing the infrastructure gap;
  - addressing administrative capacity constraints.
  - This would also help update costing for the strategy.
- Revise the macroeconomic framework underlying the SCADD to ensure that growth projections take into account developments in 2011; ensure consistency with projected public investment and related financing constraints; identify financing sources for residual financing gaps, particularly for the next year.
- Prepare a medium-term macroeconomic framework and supporting fiscal strategy for the SCADD, with particular emphasis on revenue-enhancing measures.
- Prepare a medium-term strategy to accelerate structural reforms in priority areas identified in the SCADD.
- Press ahead with preparation of a PPP law consistent with the new strategy adopted in early 2011, and establish an appropriate institutional framework.

### Questions for Executive Directors (paragraph 30)
- Do Directors agree with staffs’ view that the SCADD provides an adequate framework to accelerate growth and poverty reduction?
- Do Directors concur with the areas identified by staffs as priorities for strengthening the SCADD and its implementation?

*IMF staff summary of "The SCADD appropriately identifies economic governance as strategically important for Burkina Faso’s development."*

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