## _cr13226 ## Source details **Canonical URL:** [_cr13226](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf.json) --- ### PREFACE, VISION, AND STRATEGIC PURPOSE - Adoption context and purpose - DRC adopted the Millennium Initiative in September 2000; MDGs guide anti-poverty and sustainable development objectives. - GPRSP 2 presented as the sole unifying framework for macroeconomic and sectoral policies for 2011-2015; intended to move DRC from emergency-phase policy toward sustainable development. - Preparation involved CSOs, TFPs, Provinces; produced the Priority Action Program (PAP) and Programming and Budgeting Report. - Overarching ambitions and declarations - Rural transformation: voluntary village consolidation, improved access to drinking water and electricity (boreholes, renewable energy). - Industrialization objective: transform the country "into an economic and industrial pool". - Welfare and security: "The welfare of the Congolese people is the ultimate goal"; aim for a peaceful, secure, normalized life. - Governance emphasis: long-term planning, policy consistency, clarity of destination. - Strategic target set for the five-year period (GPRSP 2 objectives) - Annual average economic growth: 7.2 percent. - Poverty incidence reduced by about 11 points to stabilize at 60 percent by 2015. - Creation of 1 000 000 decent jobs per year. - AIDS-free generation ambition; annual average inflation target: 9 percent. - Cross-cutting threats: environmental degradation, malaria and HIV/AIDS, high population growth, international volatility. - Four pillars: (1) Strengthening governance and peace; (2) Diversifying economy, accelerating growth and promoting employment; (3) Improving access to basic social services and strengthening human capital; (4) Protecting environment and fighting climate change. ### POVERTY PROFILE, MOBILITY, AND MDG PROSPECTS - Monetary poverty and household dynamics - National poverty incidence: about 70 percent (seven out of ten households). - Rural: about eight out of ten households are poor; Urban: fewer than seven out of ten. - Food accounts for 62.3 percent of total household expenditure. - Poverty increases with household size; households headed by uneducated persons are generally the poorest. - Mobility out of poverty under spending growth scenarios (typical poor household, all else equal) - 20 percent annual increase in spending: at least 3.5 years to move out of poverty. - 3 percent annual increase in spending: 23 years. - 1 percent annual increase in spending: 70 years. - Policy implication: require economic growth at least twice as high as population growth (population growth cited at 3.1 percent) plus redistribution to halve poverty by 2020. - MDG outlook and resource requirement - 2008 advocacy plan concluded inability to meet MDG targets by 2015 in stable macroeconomic setting; targets postponed to 2020 unless a genuine scaling-up occurs. - Scaling-up footnote: "a veritable qualitative and quantitative leapfrog, comprising a per capita investment of 648 US dollars per annum over the next five years..." - 2010 MICS: real chances for Goal 6 Target 6A (HIV/AIDS) and Goal 3 Target 3A (women empowerment); poor/no progress on multiple other MDG targets cited. - Selected MDG indicator snapshots (as presented) - Poverty: 80 (1990), 70 (2007), 40 (2010) — 2015 target — Unlikely. - Net primary attendance: 56 (1990), 61 (2007), 75 (2010), 100 (2015 target) — Potentially. - Child underweight (children <5): 28 (1990), 31.4 (2007), 24 (2010), 14 (2015 target) — Unlikely. - HIV prevalence: 5 (1990), 3.7 (2007), 3.1 (2010) — Potentially. ### MACROECONOMIC FRAMEWORK, SCENARIOS, AND KEY FISCAL PARAMETERS - GPRSP Scenario (strategy baseline) - Average growth rate over 2011-2015: 7.2 percent (versus 5.6 percent in 2006–2010; net gain ~2.0 points). - Budget deficit financing envisaged from: (i) concessional loans, (ii) grants (budget support and project grants), (iii) privatization proceeds; domestic/sub-regional borrowing conditional on debt sustainability and improved business climate. - PEG Scenario (program close to IMF ECF) - Projected average economic growth: 6.5 percent over 2011-2015; single-digit inflation. - Overall deficit (scheduling basis) average: 3.3 percent of GDP over 2011-2015. - PEG projections and fiscal parameters (selected Table 11 entries): - Real growth rate: 6.5 (average 2011-2015). - Total revenue (average 2011-2015): 21.3 (percent of GDP). - Total expenses (average 2011-2015): 33.2 (percent of GDP). - Overall deficit (payment order basis) average: 3.3 (percent of GDP). - Current account balance average: -0.6 (percent of GDP). - GPRSP fiscal aggregates and financing (selected averages / projections) - GPRSP macro (scenario) averages: - Revenues and grants: 30.2 (percent of GDP) — Table 8. - Total expenditure: 34.7 (percent of GDP) — Table 8. - Fiscal balance, payment order basis: -4.5 (percent of GDP) — Table 8. - Budget deficit financing (Table 9 sample year values): - Total financing: 7.5 (2011), 6.0 (2012), 4.3 (2013), 3.8 (2014), 2.0 (2015). - Foreign financing examples: 6.6 (2011), 4.7 (2012), 3.0 (2013), 2.7 (2014), 2.4 (2015). - Grants: 8.6 (2011), 8.4 (2012), 9.9 (2013), 9.2 (2014), 9.1 (2015). - Monetary and inflation policy - Objective: inflation below 10 percent. - Base rate policy: base rate below 15 percent with a positive margin ~5 percentage points above inflation. ### PILLAR 1 — GOVERNANCE, PEACE, PUBLIC FINANCE, AND DECENTRALIZATION - Governance and political stability - Progress: constitutional institutions established; security improved though eastern provinces remain critical. - Corruption, capacity deficits and administrative weaknesses persist; public administration reform progressing slowly. - Public finance reform (PSRFP) measures and pillars - Major measures adopted: New Public Finances Act (LOFIP), Public Procurement Code, Customs Code, VAT ordinance, payroll streamlining, acquisition of software and equipment. - PSRFP five pillars: (i) budgetary reform; (ii) income tax system and tax policy reform; (iii) rationalization of expenditure management; (iv) improvement of bookkeeping and cash management; (v) strengthening control device. - Performance indicators (Box 8): budget credibility, coverage and transparency, policy-based budgeting, predictability, accounting and external auditing. - Decentralization vision and implementation (CSMOD) - Action Plan approved 24 March 2011; seven strategic areas include progressive transfer of powers and resources, capacity building, planning/management tools, financing of decentralization. - Government intends to organize local elections, establish new provinces, and define progressive transfer calendar. - Strengthening democratic institutions and security forces - Priorities: strengthen Parliament capacity, citizen participation, media and civil society, electoral processes (CENI), and regional cooperation. - Security sector priorities: army restructuring (Organic Law No. 11/012), retirement/recruitment programs, infrastructure rehabilitation, modernization of police with a 15-year strategic framework and three-year action plan. ### PILLAR 2 — ECONOMIC DIVERSIFICATION, INFRASTRUCTURE, INDUSTRY, AGRICULTURE, MINING - Growth composition and constraints - 2010: extractive industries constituted 45 percent of GDP with 38.91 percent for mining. - Main constraints: infrastructure deficits (roads, energy), low human capital, weak business climate, low investment (noted as "only 4 percent" in one summary). - Agriculture and rural development - Historical decline: agricultural productivity fell 60 percent between 1960 and 2006; agricultural exports dropped from 40 percent of GDP (1960) to 10 percent. - Food imports: 400,000 tons cereals; 120,000 tons frozen fish; >50,000 tons frozen chicken and meats per year. - Strategic actions: PNIA development, CAADP adoption; priorities include access roads, storage/conservation, seeds, mechanization, training centers, rural finance (FNDAR), cooperatives and microfinance. - Infrastructure and transport priorities - National road network: 152,400 km with only 2 percent paved. - Priority roads total: 30,786 km — 25 percent in good condition, 16 percent average, 59 percent poor. - Roads, rail (5,033 km), inland waterways (16,238 km) require rehabilitation; priority corridors listed (Kinshasa-Lubumbashi-Bukavu-Goma-Kisangani). - Electricity: installed power equals 2.5 percent of hydropower potential (>100,000MW); SNEL in financial distress; targets include restructuring SNEL, electricity code, Regulatory Authority, rural electrification, and mega-projects (Inga III, Grand Inga). - Industry, mining, hydrocarbons, forestry - Mining 2010 outputs: >460,000 tons copper; >90,000 tons cobalt; only 14 percent of territory geologically mapped; 421 operating permits vs 3,439 exploration permits. - Mining objectives: strengthen legal/regulatory framework, intensify exploration, publish contracts and permits, fight smuggling, establish traceability. - Hydrocarbons: oil production stagnant <30,000 b/d; one refinery idle since 1999; priorities: exploration, gas, transport/storage, update policy letter and publish maps/agreements. - Forestry: forest area reported ~145–155 million hectares in different passages; goals include sustainable management, SIGEF, community concessions, FLEGT, local processing and afforestation. - Trade, business climate, private sector - Trade accounted for almost 80 percent of GDP in 2010; exports concentrated in minerals. - Doing Business rank: 175 (2011) vs 179 (2010). - Business climate reform priorities: simplify procedures, one-stop shops, tax/incidental tax reform, access to finance, PPP law. ### EMPLOYMENT, JOB CREATION PROJECTIONS, AND INFORMAL SECTOR - Employment challenges and labor market statistics - Population growth rate: 3.1 percent; doubling every 25 years if trend continues. - Labor force participation: ~61 percent national (60.8 percent men; 59.99 percent women); rural 68 percent; urban 51 percent. - Formal employment: <10 percent overall (two thirds public sector). - Unemployment: national average 6.5 percent; urban 2005: 17.8 percent; youth 15-24 unemployment: 32.2 percent. - Informal sector: may constitute >80 percent of the economy. - Job creation simulations (Box 12) - GPRSP implementation projected to create ~4 482 459 jobs over 2011-2015 (average ~900 000 jobs/year). - Yearly totals: 2011: 719 079; 2012: 706 207; 2013: 1 153 502; 2014: 923 928; 2015: 979 743. - Sectoral totals (2011-2015): Primary: 1 531 894; Secondary: 372 787; Tertiary: 2 577 778; Administration: 771 360. - Persons brought out of poverty (2011-2015 totals): Yearly totals and cumulative: - 2011: 680 916 - 2012: 2 514 063 - 2013: 2 496 178 - 2014: 2 838 209 - 2015: 2 711 469 - Total (2011-2015): 11 240 836. - MDG-related direct job creation (2011-2015): total 780 578 (Health 330 508; Nursery & Primary Education 436 038; Agriculture 14 031). - Employability and vocational training priorities - Mechanisms to match supply and demand of skills, adaptive measures for workers/companies, reformed learning and vocational courses, strengthen National Employment Office (NEO), create labor courts and job application management systems. ### PILLAR 3 — SOCIAL SECTORS: EDUCATION, HEALTH, WATER, SANITATION, SOCIAL PROTECTION - Education targets and measures - Target: totally free primary education by 2015, net enrolment rate 93.2 percent, retention rate 66 percent. - Adult illiteracy reduction: from 30 percent to 8.4 percent by 2015. - Measures: progressive abolition of school fees, mechanizing teacher payrolls, capacity building, SIGE, infrastructure rehabilitation; timeline: suppression of direct fees for years 1–3 from 2011 school opening (except Kinshasa and Lubumbashi), generalization by 2015/2016. - Key indicators and constraints: - 7.6 million children aged 5-17 excluded from education. - Primary completion: 56.7 percent participation but only 56.7 percent complete primary; many teachers under-qualified. - Health, nutrition, and HIV/AIDS - Health sector financing: State budget often <5 percent of total budget; users cover up to 70 percent of running costs. - Child mortality and nutrition: - Life expectancy ~54 years in 2009. - Malaria: ~40 percent of child deaths; estimated annual malaria deaths among children under 5: between 150,000 and 250,000. - Moderately underweight children under five: 31.1 percent (2001); 25.1 percent (2007); 24 percent (2010). - Malnutrition affects over 5 million children. - Maternal mortality estimates vary: inter-agency 670 per 100,000; WHO 2010: 1,100 per 100,000; EDS 2007: 549 per 100,000; MICS2 (2001): 1,289 per 100,000. - Health service coverage and quality constraints: limited emergency obstetric care (7 percent of centers), shortages in skilled personnel, infrastructure and supply shortfalls. - HIV/AIDS figures and constraints - PLWHA 2009: 1,431,800; new infections 2009: 168,250; deaths 2009: 104,200. - HIV prevalence: 3.25 percent general population; 4.3 percent among pregnant women. - 2010 indicators: new infections 127,135 (70,574 women); ARV coverage: 12.4 percent; percent infants infected from HIV+ mothers: 23.3 percent; percent HIV+ pregnant women receiving ARV prophylaxis: 2.2 percent. - 2010 spending data (PNMLS): overall spending $18 6945 819 with 54 percent from households; of institutional spending 98.9 percent from external partners; resources cover ~30 percent of requirements. - GPRSP financing strategy: allocate national budget line for AIDS; consider taxes (pollution, tobacco, communications), alternative financing (micro-credit, mutual insurance), private sector role, and advocacy for external resources. - Water, sanitation, housing - Access to drinking water rose from 22 percent to 26 percent between 2005 and 2010. - Urban coverage: 39 percent in 2010; target to increase urban coverage from 39 to 52 percent and overall potable water access from 26 percent in 2010 to 40 percent in 2016. - Rural access target: increase from 20 to 30 percent by 2016. - Improved sanitation: 14 percent overall (36 percent urban; 4 percent rural); open defecation 12 percent; MDG targets (water 71 percent, sanitation 55 percent) considered unlikely. - Urban potable water operational targets: REGIDESO business operation centers from 71 (2010) to 94 (2016); network yield improvement from 58 percent (2010) to 75 percent (2016). - Social protection and vulnerabilities - SOPPOC subjective poverty measures: 73.5 percent of households feel poor; priority household demands: job creation, road tarring, education access. - Recommendation: establish vigorous social protection policy and better NGO cooperation; focus on vulnerable groups (children in difficult circumstances, women in difficulty, PLWHA, persons with disabilities, elderly persons living alone, displaced persons). ### PILLAR 4 — ENVIRONMENT, CLIMATE CHANGE, REDD+ AND ADAPTATION - Environment and forestry context - Forest area figures cited: 145 million ha (World Bank REDD report) and about 155 million ha (later passage); forest coverage reported 55 percent in 1990 and 45 percent "as of now" (Ministry of Environment). - Deforestation rates: 0.7 percent per year (1990–1995 ADB); net deforestation 0.4 points per year; reforestation 0.3 percent per year (1990–1995). - REDD+ strategy and poverty link - Double goal: reduce deforestation/forest degradation and poverty. - Priority approaches: increase productivity in subsistence farming; community forest management; alternative livelihoods (ecotourism, processing); increase access to electricity, improved stoves, renewable energies; afforestation/reforestation using HIMO approaches. - REDD+ potential: exploratory study suggests REDD+ and sequestration could help generate $900 million per annum between 2010 and 2030. - Climate change adaptation and mitigation priorities - Projected temperature increase ~3°C by end of 21st century; regional rainfall disparities and more extreme weather events expected. - Adaptation priorities: land degradation control, biodiversity protection, integrated water resource management, decentralized renewable energy access, early warning systems, strengthen meteorological services, fight vector-borne diseases. - Legal/operational priorities 2011-2015: complete environmental legal framework, adopt Law on Nature Conservation, bill on biodiversity, develop MRV systems (SSTS, NFI, national GHG inventory), strengthen GEEC capacities, deploy eco-guards, promote afforestation/reforestation and community management. ### IMPLEMENTATION, MONITORING-EVALUATION, INSTITUTIONAL ARCHITECTURE, RISKS - Implementation and M&E framework - Reporting system to be operational by 2015 with infra-annual, quarterly, annual and supra-annual reporting tools (monthly thematic group reports; six-monthly syntheses; quarterly sectoral and provincial dashboards; annual consolidated GPRSP and MDG reports; mid-term and final evaluations). - Indicator system: mix of impact/outcome (MDGs), PAP/MTEF indicators, and international benchmark indicators. Selection focused on easily measurable indicators with reasonable costs. - Institutional responsibilities (political and technical levels) - Political: Prime Minister (CI-SNLCP chair), Minister of Planning (technical coordination), Minister of Budget (budgetary programming), Minister of Finance (resource mobilization), Minister of Decentralization, CISPI, CTR, COREF, thematic groups. - Technical: UPPE-SRP (coordination and secretariat), OCPI (poverty and MDG monitoring), INS (statistics), DPSB (budget monitoring), DEPs and DAF within ministries, provincial committees and local committees. - Key risks identified - Domestic: weak institutional and human capacities; low ownership of strategy by political/administrative authorities; fragility of peace and security (particularly in eastern provinces). - External: excessive dependence on foreign financing (over 40 percent of State budget), global economic and financial crises (2008-2009 example; growth dropped to 2.8 percent), energy and commodity price volatility, hunger risk and food price volatility. - Priorities to mitigate risks - Capacity building (PRONAREC), strengthen ownership (Prime Minister-led actions), consolidate peace and security reforms, diversify economy, increase domestic revenue mobilization, prioritize planning and M&E, maintain fiscal and monetary discipline. ### SELECTED KEY STATISTICS AND TABLED TARGETS (excerpts) - Poverty and growth targets - Annual average economic growth (GPRSP 2): 7.2 percent. - Poverty incidence target by 2015: 60 percent. - Jobs creation target: at least 1 000 000 decent jobs per year by 2015. - Inflation target: stabilize average annual inflation at about 9 percent. - Education and health targets (Table 6 excerpts) - Primary net enrolment target by 2015: 93.2 percent. - Adult illiteracy rate target by 2015: reduce to 8.4 percent. - Under-5 underweight target by 2015: 16.3 percent. - Infant mortality target by 2015: 60 per 1,000 live births (from 158 in 2010). - Maternal mortality target by 2015: 348 per 100,000 live births (from 549 currently). - Immunization coverage target: increase to 80 percent. - Assisted childbirth target: increase to 93.6 percent. - Water, electricity and environment targets - Drinking water coverage target: increase to 38 percent (from 26 percent currently); urban 50 percent, rural 30 percent. - Electricity access: increase from 9 percent (2010) to 19 percent (2015). - HIV/AIDS seroprevalence target: reduce to below 3.23 percent. - Protected areas: increase to 17 percent of national territory. - Macro-fiscal scenario highlights (selected Annex 4 values) - GDP per capita (USD) sample series: 193.12; 215.22; 230.22; 258.6; 288.2; 317.2. - Poverty incidence projections: 69.6; 69.6; 67.3; 65.1; 62.7; 60.6 (selected years). - Consumer price index annual averages listed: 23.5; 12.0; 11.0; 9.0; 8.8; 8.3. - Exchange rate (CDF/USD average): 913.90; 961.64; 1 032.88; 1 105.05; 1 179.57; 1 253.22. *Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts from content unit _cr13226).* ### PREFACE ..................................................................................... ### PREFACE ### Rural transformation: focus and measures - "The entire rural sector, the epicenter of poverty, will therefore undergo profound transformation." - Villages with "absolutely nothing" will be "encouraged to come together voluntarily on the basis of affinity, to promote their modernization through the construction of infrastructure and basic services." - Explicit measures cited: - Improved access to drinking water and electricity in villages through boreholes and renewable energy. ### Industrialization and economic ambition - "The ambition to make Congo an emerging nation will also inevitably have to be achieved through industrialization." - Strategic objective: transform the country "into an economic and industrial pool" to secure the DRC's future place among influential nations. ### Welfare, security, and social normalcy - Ultimate goal: "The welfare of the Congolese people is the ultimate goal of all our actions." - Desired outcomes: - A Congo that is "not only peaceful, but also symbolizes a life that has returned to normal." - A country "where the security [...] of citizens is assured; a country where inhabitants enjoy peace of heart and mind." ### Governance, long-term planning, and policy consistency - Emphasis on long-term relevance of policies: decisions "of a day often entail negative consequences that may last forever." - Call for clarity of destination: "our people can no longer be contented with policies whose long-term relevance cannot be verified, in the same way as one may easily take the wrong road if the destination is not known." - Extract attribution: speech by "His Excellency the President of the DRC in Kingakati (Kinshasa), September 14, 2011." *Source: _cr13226 - PREFACE* ### PREFACE ### _cr13226 - PREFACE ### PREFACE: purpose and preparation - The Democratic Republic of the Congo adopted the Millennium Declaration known as the "Millennium Initiative" in September 2000 to define a consensual vision of development to be achieved by 2015 and to step up international commitment to peace, justice and equality for all. - The Millennium Development Goals (MDGs) are the set of goals derived from this vision, aimed at combating poverty, other causes of human deprivation, and promoting sustainable development. - The Government adopted the first generation Growth and Poverty Reduction Strategy Paper (GPRSP 1) in July 2006; GPRSP 1 was implemented from 2006 to 2010 and resulted in the triggering of the first HIPC Initiative. - GPRSP 2 is presented as the sole unifying framework for all macroeconomic and sectoral policies for the five-year period 2011-2015. - Preparation of GPRSP 2: - Conducted in a redefined participatory framework involving all development actors including Civil Society Organizations (CSOs), Technical and Financial Partners (TFP), and Provinces. - Aimed to move the DRC out of the emergency phase that characterized GPRSP 1 toward sustainable development. - Resulted in the publication of supporting documents: the Priority Action Program (PAP) and the Programming and Budgeting Report to improve budgetary programming focus on priority actions. - The Priority Action Program is intended to align interests of various development actors and enhance synergy between sector-specific and multi-sector interventions. - Implementation, monitoring and evaluation of GPRSP 2 over the next five years is identified as the major challenge. *Adolphe MUZITO — Prime Minister* ### FOREWORD: context, rationale, and vision - The DRC reached the decision point under the HIPC initiative in July 2003 through implementation of the Interim Poverty Reduction Strategy Paper and the Government’s medium-term Economic Program (PEG). - GPRSP 1: - Adopted in July 2006; described macroeconomic and sectoral policies to be implemented from 2006 to 2008 to promote growth, reduce poverty and achieve the MDGs. - Although adopted in July 2006, it was not implemented until the government elected in 2006 adopted it in March 2007; forwarded to the World Bank and IMF and approved in March and April 2007 respectively. - Extended to 2010 to avoid a programming vacuum and to allow preparation of GPRSP 2. - In March 2010, Government conducted a review of GPRSP 1; conclusions recommended intensification and acceleration of efforts toward poverty alleviation and achieving the MDGs, prompting preparation of GPRSP 2. - GPRSP 2 differs from GPRSP 1 by being embedded in an advancing national planning, programming and budgeting framework based on a Development Results-Based Management Approach including: - Sectoral strategies, central and provincial Priority Action Programs, Medium-term Expenditure Framework (MTEF), and Mid-Term Sectoral Expenditure Frameworks (CDSMT). - GPRSP 2 pillars aim to advance the DRC toward the development vision of becoming a middle-income country converging towards the MDGs and completing five key sectors. - The vision asserts the DRC as: - a united country valuing peace, justice and freedom in a consolidated democracy; - a peaceful country living in order and discipline within secure borders; - a country with institutions built on democratic values, competence and gender equality; - a stable rural and urban economy with high inclusive, sustainable and competitive growth, integrated into international trade and creating decent and productive jobs; - a vast, fully integrated territory with modern communication infrastructure for increased movement of goods and people; - a healthy and well-educated AIDS-free generation with access to decent jobs able to support development; - a country adopting appropriate demographic policy and engaged in global partnership to conserve and restore terrestrial ecosystems. - Interventions implied by the pillars require huge investments over the period (2011-2015); a financing gap exists relative to expected available resources, necessitating intensified mobilization of financial and technical resources. - The Government thanks the international community and calls for substantially increased official development assistance, honoring commitments from global and national summits (G8 Gleneagles, Doha, the Kinshasa Agenda, etc...). - Government commitments to effective implementation of GPRSP 2 include continued measures with private sector support to: - (i) secure the entire national territory; - (ii) continue civil service reform to transform it into a development administration; - (iii) promote economic governance; - (iv) develop the private sector and improve the business climate; - (v) strengthen the national statistics monitoring-evaluation system. *Olivier KAMITATU ETSU — Minister of Planning* ### EXECUTIVE SUMMARY: objectives and approach - Objective of GPRSP 2: - Consolidate achievements of GPRSP 1 and emphasize growth, job creation and the fight against climate change as key levers for significant poverty reduction. - Propose strategies to involve the entire DRC in the fight against poverty and integrate gender issues across development areas to address injustices and inequalities suffered by women. ### Development context - Contextual challenges considered in designing GPRSP 2: - Efforts to consolidate peace via strengthening State authority and territorial unification after fragmentation caused by political and military movements. - Persistently high number of internally displaced persons and refugees; isolation and poor accessibility of towns and villages; dilapidated economic fabric; continuing insecurity in some areas; demobilization of former combatants; and rehabilitation needs for socio-economic infrastructure. - Macroeconomic progress: - Efforts to consolidate the macroeconomic framework led to reaching the completion point of the HIPC initiative in July 2010, creating a new favorable environment for pro-poor policy implementation. - Design process: - Conducted in a participatory framework involving civil society, Government, national and international NGOs, and technical and financial partners to ensure national ownership. ### MAIN ACHIEVEMENTS OF GPRSP 1 — Governance - Political and institutional progress (2007–2010): - Government worked to consolidate the political and security situation; overall political climate has been stable in recent years. - Virtually all constitutional institutions at central and provincial levels have been established and made functional but retain serious capacity deficits. - Security: - Considerable improvement in security with pacification of much of the national territory thanks to military operations against rebel groups, dialogue and diplomacy toward neighboring countries. - Armed groups continue to threaten stability in certain areas in the north and east. - Administrative and institutional reforms: - Restructuring and capacity building measures within the armed forces and police. - In 2009 a new legal framework governing the Congolese Public Administration was drafted and submitted to Parliament, including the Organic Bill of the national, provincial and local Public Services, and the draft Statute of State Agents and Civil Servants. - Institutional audits and restructuring measures implemented in many ministries. - Measures to reduce the workforce: census and management of civil servants and the departure of 3,741 eligible Civil Servants and State Agents, most of whom are still awaiting the payment of their retirement benefits. - Ongoing systemic shortcomings in the State administrative mechanism: - Inadequate and anachronistic laws and regulations governing State personnel and the social protection regime; - Inadequacy of missions, structures, jobs and workforce; - Inadequate management of the payroll; - Aging and insufficient expertise of State employees; - Non-compliance with professional ethics; - Obsolescence of the monitoring system of the careers of State employees; - Absence of a consistent and attractive remuneration policy as well as fringe benefits. - Legal and judicial reforms: - Action plan for judicial reform approved in 2007. - Institutional and organizational analysis of the judiciary (2008/2009) led to a new organizational framework for the ministry and restructuring of the Supreme Council of the Judiciary. - A law on the organization and jurisdiction of courts was adopted in 2010. - Legal framework evolved in many domains including signing up to the OHADA treaty in 2010, the Constitutional Court, and the Child Protection Act. - Persistent problems: outdated legal framework, insufficient judicial coverage and lack of local justice, poor capacity of administrative, judicial and prison staff, corruption, impunity, delays in delivery of judgments and inaccessibility of justice services for the majority of the population. - Decentralization: - Initiated in institutional and legal components with establishment of provincial assemblies and governments and adoption of many basic texts. - Step-by-step implementation chosen for certain 2006 Constitution provisions (revised in January 2011) including transfer of resources (40 percent of national revenue allotted to Provinces and Decentralized Territorial Entities) and creation of new provinces (planned creation of 15 new provinces). - Transfers of responsibilities defined but implementation details remain to be determined; capacity challenges at Province and Decentralized Territorial Entities (DTE) levels are enormous and require specific operational programming for visibility of reform efforts. - Economic governance and public finance reforms: - Reforms initiated to improve government revenues and to better contain, allocate and implement spending. - Signing of a new IMF program in December 2009 supported by an Extended Credit Facility (ECF) to achieve more balanced accounts and more efficient and transparent spending. - Reaching the HIPC completion point enabled substantial reduction of the debt burden. - Major 2010 public finance measures adopted almost simultaneously: - Strategic Plan for Public Finance Reform - PSRFP (March 2010); - New Public Finances Act - LOFIP (March 2010); - New Public Procurement Code (April 2010). - A Steering Committee for Public Finance Reform (COREF), established in 2009, has strengthened monitoring and guidance. - Private sector: - Dominated by small and medium-sized enterprises (SME) and suffers from significant funding pressures from enterprises, the banking system, and the government. ### POVERTY IN THE DRC — key statistics and dynamics - Prevalence: - Seven out of ten households are poor with disparities: - Rural areas: about eight out of ten households are poor; - Urban areas: fewer than seven out of ten households are poor. - Household expenditure: - Food accounts for 62.3 percent of the total expenditure of Congolese households. - Implication: any inflation affecting food products reduces real incomes and increases the number of the poor and vulnerable, all other things being equal. - Mobility out of poverty (based on household spending growth scenarios): - A typical poor Congolese household will take an average of at least 3.5 years to move out of poverty if it records an average annual increase of 20 percent in spending, all other things remaining equal. - The same household will take 70 years to move out of poverty if its annual increase in spending is only 1 percent. - The same household will take 23 years to move out of poverty if its annual increase in spending is only 3 percent. - Correlates of poverty: - Poverty level of Congolese households increases proportionately to household size (in both rural and urban areas). - Educational level of the household head influences vulnerability to poverty: households whose head has no education are generally the poorest. *PREFACE — _cr13226* ### 20. It should be noted that the analysis of the poverty profile made in this document is ### _cr13226 - 20. It should be noted that the analysis of the poverty profile made in this document is ### 2015 or 2020 MDGs - In 2008 the Government of the DRC developed and validated a national plan entitled "Advocacy document for the mobilization of resources to attain the MDGs". - The advocacy tool revealed: - inability of the DRC to meet the MDG targets in a stable and reorganized macroeconomic setting by 2015; - need to postpone achievement of the MDG targets to 2020, but with a strong commitment to achieve them by 2015 if the socio-economic context is favorable. - 2010 Multiple Indicator Cluster Survey (MICS) results: - real chance of achieving certain targets by 2015 for Goal 6, target 6A (combat HIV/AIDS) and Goal 3, target 3A (empowerment of women); - no real progress observed for Goal 1, Target 1C (fight against poverty); Goal 2, Target 2A (Education For All by 2015); Goal 4, Target 4A (child health); Goal 6, Target C (fight against malaria); and Goal 7, target 7C (sanitation); - mixed progress for Goal 5, Target 5A (maternal health) and Goal 7, Target 7C (access to drinking water). ### Key challenges to be addressed in the next five years - Government ability to achieve poverty reduction goals depends on addressing: - population control; - recovery of double-digit growth through reconstruction and rehabilitation of basic socio-economic infrastructure, particularly in rural areas, and revitalization of agriculture; accompanied by a genuine policy of redistribution; - improvement of measures to ensure territorial integrity security and consolidation of peace and democracy; - improvement of financial and economic governance for greater effectiveness of public policies; - building capacity of institutions and human resources of the Republic and the Public Administration; - mobilization of resources necessary for implementation of national strategies that are prerequisites for achievement of MDGs; - environmental protection through systematic consideration of climate change issues; - acceleration and implementation of the decentralization process. ### Major options and pillars of the strategy - Ambition: achieve the MDGs by 2020. - Objective of GPRSP 2: significantly improve living conditions by 2015, targeting: - environmentally friendly annual average economic growth of 7.2 percent; - reduction of the incidence of poverty by about 11 points to stabilize at 60 percent by 2015; - creation of one million decent jobs a year; - an AIDS-free generation; - context of low inflation with an annual average of 9 percent. - Cross-cutting threats likely to undermine achievements: - environmental degradation; - disabling diseases (malaria and HIV/AIDS); - high population growth; - volatility of the international environment. - Gender approach: National Gender Policy to adopt a holistic and cross-cutting approach across all activities of the four pillars. - Four pillars of GPRSP 2: - Pillar 1: Strengthening governance and peace; - Pillar 2: Diversifying the economy, accelerating growth and promoting employment; - Pillar 3: Improving access to basic social services and strengthening human capital; - Pillar 4: Protecting the environment and fighting against climate change. ### Pillar 1: Strengthening governance and peace - Aim: consolidate political stability, security, State authority and satisfactory public governance to enable effective development activities. - Six main priorities: - strengthening the authority of the State; - accelerating the decentralization process; - continuing reform of public finances; - improving the business climate and promoting the private sector; - building institutional and human capacity; - supporting implementation of the National Statistics Development Strategy. ### Pillar 2: Diversifying the economy, accelerating growth and promoting employment - Focus: development of support infrastructures for production activities and revitalization of these activities. - Proposes employment promotion policies. - Implementation based on strengthened governance within a context of environmental protection and fight against climate change. ### Pillar 3: Improving access to basic social services and strengthening human capital - Goal: enable everybody to have access to quality basic social services. - Expected outcome: well-educated and healthy human resources for the DRC. - Four main priorities include: - strengthening of human capital; - combating HIV/AIDS; - reducing inequalities; - improving living conditions of both women and men. ### Pillar 4: Protecting the environment and fighting against climate change - Emphasis on: - environmental management and protection; - fight against climate change; - integration of environment and climate change in sector-based strategies. - Aim: enhance the DRC's natural capital and reduce pressure on forests. - REDD+ preliminary strategy: - country intends to become a carbon sink by 2030; - REDD+ objectives to be defined ambitiously and realistically in keeping with socio-economic development objectives of the GPRSP; - process to be national and participatory with strong focus on civil society and local communities. - Two main strategy options proposed: - manage and protect the environment; - fight against climate change. ### Macroeconomic framework of the strategy - Framework developed to maintain macroeconomic stability and incorporate sectoral policies and costs for achieving the MDGs by 2020. - Allows realistic programming of public spending and highlights main budgetary choices proposed by the Government. ### Scenario of the macroeconomic framework of the strategy (GPRSP Scenario) - Medium-term results indicate strong and steady growth during GPRSP 2 implementation in an environment of low inflation and consolidation of public finances. - Average growth rate over the period would be 7.2 percent as against 5.6 percent in the period from 2006 to 2010. - This represents a net gain of about 2.0 points compared to GPRSP 1. - Budget deficit financing sources: - (i) concessional loans to ensure sustainability of external debt given recent MDRI and HIPC benefits; - (ii) grants, especially budget support and project grants, seeking financing for MDGs; - (iii) resources from privatization of public enterprises. - Additional mobilization: public borrowing on domestic and sub-regional financial markets provided prior debt sustainability analysis, improved business climate and budgetary discipline. ### Government Economic Program (PEG) scenario - PEG scenario may be influenced by international uncertainties and low mobilization of resources needed to achieve the MDGs. - Alternative scenario close to macroeconomic framework of the new economic and financial program concluded with the IMF in 2009. - Projections and fiscal parameters: - Economic growth projected at an average of 6.5 percent over the period 2011 to 2015, with single-digit inflation. - Overall deficit constituting the scheduling basis would be 3.3 percent of GDP on average over the period 2011-2015. - Budgetary stringency expected to contain increases in public spending, especially investments; spending on governance, defense and security will take a dominant share of the budget. - One funding avenue: mobilizing concessional resources that do not impede sustainability of public debt. ### Implementation and monitoring of the strategy - Review of GPRSP 1 recommended revising monitoring and evaluation mechanism for GPRSP 2 and identified six major challenges: - (i) review and formulation of the monitoring and evaluation framework; - (ii) producing statistical data disaggregated by sex; - (iii) renewal of operational and budgetary programming to be more gender-sensitive; - (iv) introduction of pro-gender reporting tools; - (v) development of a minimum framework for evaluating public policies; - (vi) improving participation and communication. - An information system identified components for monitoring and evaluation: - key components and activities of the monitoring and evaluation system; - data collection tools; - reporting tools; - monitoring and evaluation indicators; - key priorities to ensure proper functioning of the system. - Institutional architecture locates responsibilities at two levels: political and technical. ### From the first to the second generation of GPRSP (Introduction) - GPRSP 1 adoption in 2006 provided a medium-term development framework targeting acceleration of growth and poverty alleviation. - GPRSP 1: - first integrated strategic framework based on political consensus linking public policies to strong growth and rapid poverty decline; - based on five strategic pillars and referred to targets beyond the document horizon aiming at the MDGs. - promoted Dialogue and Consensus-building Forums among government, civil society, private sector and Technical and Financial Partners. - Implementation constraints of GPRSP 1: - limited ownership of the document and process; - dysfunctional institutional machinery at national, provincial and local levels and thematic groups; - shortcomings in statistical information, analysis and reporting undermining monitoring-evaluation effectiveness; - structural problems in public administration and difficulty aligning budget allocations and actual expenditures; - insufficient consideration of gender inequalities and disparities. - Timeline highlights: - GPRSP 1 operationalization began mid-2007; first Priority Action Program (PAP) July 2007 to December 2008; - low implementation rate led Government to wait until 2010 to develop second-generation strategy; PAP2 implemented for 2009 and 2010. - In 2009 Government confirmed preparation of GPRSP 2 as the reference strategic framework for 2012-16 for coherent macroeconomic and sector-based policies, results-based management, public expenditure rationalization, advocacy and resource mobilization. *Italic: Source — Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts as provided).* ### 6. The establishment of the GPRSP 2 appears to be an urgent need in many respects. ### 6. The establishment of the GPRSP 2 appears to be an urgent need in many respects ### Rationale for GPRSP 2 - Responds to a consensual decision taken in 2009 to avoid a "strategic vacuum". - Essential to provide a new medium-term planning framework to: - shed light on fundamental orientations requiring consensus among development actors; and - provide necessary supervision of implementation of sector-based public policies. - Need to reframe public policies given a changed environment since GPRSP 1: - security context changed; democracy "is now a solid achievement"; - major reforms undertaken in the military and the police, justice, public finances, public administration, decentralization. - Emergence of new public policy management tools enabling better operationalization of GPRSP 2 and addressing weaknesses of GPRSP 1: - sectors (agriculture, mining, education, health, HIV/AIDS, gender, etc.), ministries and many provinces developed new strategy and programming documents. - Opportunity to boost advocacy toward attainment of the MDGs and update targets set in the early 2000s despite absence of updated income-poverty data; several surveys and studies established a new socio-economic profile guiding revision of priorities and targets for the period 2006-2010. - International dynamics and financing prospects: - Ongoing international negotiations on the fight against climate change can open new financing prospects. - Attainment of the completion point of HIPC / MDRI initiative and subsequent cancellation of debts worth 12.3 billion dollars in July 2010. ### The place of GPRSP 2 in the new planning framework - GPRSP 2 is part of an evolved planning, programming and budgeting framework emerging alongside public finance reform and new tools at national, sectoral and provincial levels. - A law on the planning system will determine general procedures and responsibilities. - Main features of the new system: - Long-term vision: - Present long-term Vision is the 25/26 Vision; it will soon be replaced by the 2035 Vision under preparation. - Medium-term strategic planning documents: - The Growth and Poverty Reduction Strategy Paper: A five year strategic planning framework; consensual national guidelines for accelerated and sustainable development to reduce poverty and inequalities. - Sector-specific and thematic strategy documents: policy letters or detailed sectoral/thematic strategic plans for at least five years. - Development strategies of provinces: define key strategic orientations and objectives for each Province; provincial priorities take into account local context and national targets in the GPRSP. - Operationalization documents: - Overall Priority Action Program (PAP) of the GPRSP: operational programming of actions to achieve GPRSP goals; five-year horizon; rolling programming tool reviewed annually. - Ministerial Medium Term Expenditure Frameworks (MTEF): budget programming of each ministry over five years; rolling tool presenting (i) needs of institutional sector (without financial constraint) and (ii) programming revised to match budgetary constraints (ministerial budget allocation). - Provincial PAPs and MTEFs: three-year rolling programming instruments including all actions planned within the provinces regardless of source of financing; actions to be financed from the State Budget are clearly identified. ### Development and operationalization of GPRSP 2 (methodological and participatory process) - Methodological note validated in July and revised in October 2009. - Stages of development: - Analysis of the poverty situation and update of MDG prospects based on results of survey 1-2-3 and other household surveys; latest MICS 4 survey conducted in 2010; citizen evaluation of public services conducted February-March 2010 in Bandundu, Katanga and South Kivu; 2010 MDG Report and comparative analysis of MICS indicators between 2001 and 2010. - Sectoral and general review of GPRSP 1: review meetings in February / March 2010 and a consolidated general review in March 2010. - Development of a rolling multi-year macroeconomic and budgetary framework and sector-specific PAP / MTEFs after a two-month training program for executive officers of Departments of Studies and Planning; PAPs developed from sectoral strategies or available sector-based policy elements. - Additional analyses of the monitoring-evaluation (M & E) system to propose a reformed facility for GPRSP 2. - Preparation of the draft paper by the Coordination Unit for the design and implementation of the Growth and Poverty Reduction Strategy (UPPE – PRS) in close collaboration with ministries; submission to development actors for observations and discussion in breakout groups. - Development of provincial documents: provincial strategies and provincial PAP/MTEF produced by most provinces. - Presentation and validation: final draft debated in provincial workshops, presented to cabinet for adoption, then sent to the National Assembly for information. - Revision plan during implementation after first mid-term review to take into account: - (i) new long-term vision from ongoing national prospective study; - (ii) ongoing new REDD+ national strategy; - (iii) results of the new survey 1-2-3 (especially the new monetary poverty profile); - (iv) conclusions of the progress report for the first year of implementation of GPRSP 2. ### Presentation of the paper (structure) - Paper structured into three chapters: - Chapter 1: recent socio-economic situation — profile and main causes of poverty, situation of the MDGs, and challenges over the next five years. - Chapter 2: vision and policy options of the strategy — details for each pillar, strategic objectives and priorities of each sector or theme. - Chapter 3: implementation framework — macro-fiscal framework and financing of the strategy; monitoring-evaluation system and risks. ### Poverty profile — monetary poverty (findings and simulations) - Lack of a new household budget-consumption-employment survey of the 1-2-3 type made it impossible to obtain a new poverty profile comparable to 2004-2005; a statistical tool produced simulations to update incidence of monetary poverty. - Simulated change in headcount poverty: - Poverty fell slightly from 71 percent to 70 percent between 2005 and 2007. - Change in inequality was "very slight." - Spatial and socio-professional disparities: - Seven out of ten households are poor nationally. - Rural areas: about eight out of ten households are poor. - Urban areas: less than seven out of ten households are poor. - Households headed by women are less affected by poverty overall but in urban areas such households are more affected. - Severe poverty by socio-professional category: - Households headed by apprentices: 80.25 percent. - Households headed by own-account informal agricultural workers: 75.52 percent. - Households headed by semi-skilled employees or workers: 71.47 percent. - Poverty is lower among family aid workers, unskilled laborers, front-line supervisors and managers. - Poor households tend to be larger and have more dependents than affluent households. - Education is a key determinant: returns of education (in terms of consumption) begin to materialize from a threshold of level 4 in primary school. ### Household expenditure pattern and implications for poverty reduction - Household expenditure dominated by food: - Food represents 62.3 percent of total expenditures. - Implications of expenditure pattern: - Any inflation affecting food reduces real incomes and increases number of poor and vulnerable. - Typical poor household mobility out of poverty under different annual expenditure growth scenarios (all things being equal): - If average annual increase of expenditure is 20 percent: at least 3.5 years to move out of poverty. - If annual increase is 1 percent: 70 years to move out of poverty. - If annual increase is 3 percent: 23 years to move out of poverty. - Policy implication: poverty alleviation requires economic policy supporting high growth (economic growth at least twice as high as the population growth of 3.1 percent) coupled with proper redistribution policy to have a chance of halving poverty by 2020. - In 2005, three priority actions identified to curb poverty: - "creation of jobs", - "tarring of roads", - "facilitating access to education". - General observations: - Poverty increases proportionately to household size (rural and urban). - Households whose heads have no education are generally the poorest. - Except for households headed by senior staff members or managers, all other socio-professional categories display poverty levels above 47 percent. - Households would spend a minimum of 3.5 years in poverty if economic policies implemented are not a source of inflation and allow a 20 percent annual increase in expenditure; more time in poverty if priority is not given to job creation, road maintenance and access to education. *Source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts).* ### 22. If these simulations are proven correct and realistic, then the country will only achieve ### _cr13226 - 22. If these simulations are proven correct and realistic, then the country will only achieve ### Non monetary poverty: overview - Non-monetary factors affecting household well-being include: population size, health and nutrition, HIV / AIDS, the education sector, living environment and access to utilities (water, sanitation and housing...), and the social position of the woman within the family. - The data show an improvement in relation to 2001, when the conflict ended. - If the simulations are proven correct and realistic, then the country will only achieve the Millennium Development Goals by 2015 (reduction of poverty by 2/3) if it receives a genuine scaling-up. - Footnote on required scaling-up: "That is, a veritable qualitative and quantitative leapfrog, comprising a per capita investment of 648 US dollars per annum over the next five years, assuming an improved absorption capacity of the economy and that all the reforms are implemented and bear fruits." ### A. A rapidly growing population - Average household size: 6 members. - Estimated population in 2010: about 67.8 million inhabitants. - Annual population increase: 1.9 million inhabitants. - Estimated population growth rate: 3.1 percent. - Total Fertility Rate (TFR): fell from 7.1 children per woman (MICS 2, 2001) to 6 in 2010 (MICS 4). - Policy implication: high population growth places strong social demand on education, employment, housing, health and transport; civil birth registrations are among the lowest in the continent. ### B. Health and nutrition: status and trends - Child mortality - GPRSP 1 target: reduce infant mortality rate from 126 to 104 per thousand live births by 2007 — considered achieved. - Under-5 deaths: results in over 500,000 deaths; increase observed since 2007 is alarming. - Concentration index indicates mortality affects the poor more than proportionately. - Table highlights (One year / Five years mortality by socio-economic group) - The poorest: One year 147 113 104 ; Five years 248 184 172 - Second: One year 138 105 101 ; Five years 233 177 166 - Average: One year 129 95 116 ; Five years 219 155 194 - Fourth: One year 124 93 93 ; Five years 209 151 151 - The richest: One year 75 58 58 ; Five years 119 97 88 - Concentration index (One year): -0.1 -0.09 -0.08 ; (Five years): -0.11 -0.1 -0.1 - Life expectancy at birth: around 54 years in 2009. - HDI ranking: 168th out of 169. - Disease burden and nutrition - Malaria: about 40 percent of child deaths; nearly 10 episodes per year per child; endemicity 3 episodes per year per person. Estimated annual malaria deaths among children under 5: between 150,000 and 250,000. - Percentage of children under 5 sleeping under treated mosquito bed nets: 38 percent in 2010. - Malnutrition: affects over 5 million children. - Moderately underweight children under five: 31.1 percent in 2001; 25.1 percent in 2007; 24 percent in 2010 (target trajectory expected 16.8 percent for MDGs). - Regional disparity in underweight: 27 percent in rural areas and 17 percent in urban areas. - Maternal mortality - Inter-agency estimate: 670 maternal deaths per 100,000 live births (with significant error margin). - WHO 2010 annual report: maternal mortality level of 1,100 maternal deaths per 100,000 live births. - American NGOs (websites): 1,837 maternal deaths per 100,000 live births. - EDS 2007 estimate: 549 deaths per 100,000 live births. - MICS 2 (2001) estimate: 1,289 deaths per 100,000 live births. - Maternal and prenatal care indicators - Prenatal consultations: increased from 61 percent to 85 percent between 2001 and 2007; 87 percent in 2010 (MICS 4). - Proportion of pregnant women with at least four prenatal visits: slight drop from 47 percent to 44 percent between 2007 and 2010. - Only 46 percent of women who underwent prenatal consultations received iron folate tablets. - Births assisted by trained medical personnel: increased from 61 percent to 74 percent; unchanged at 74 percent in MICS 4. - Only 7 percent of health centers offer a full technical support center for maternal and neonatal emergency care. - Quality constraints: shortage of training institutions for midwives, gynecologists and obstetricians; dilapidated infrastructure; lack of basic equipment and medicines. - Vaccination and related indicators (Table: Assistance during childbirth / Prenatal care / Vaccination across wealth quintiles, MICS 2002, EDS 2007, MICS 2010) - Example values (selected): - The poorest: Assistance during childbirth 45.2 59.2 59.8 ; Prenatal care 58.7 78.0 82.6 ; Vaccination 10.2 19.6 38.2 - The richest: Assistance during childbirth 90.9 97.7 96.2 ; Prenatal care 87.8 95.7 93.7 ; Vaccination 44.0 50.1 57.9 - Concentration index examples: Assistance during childbirth 0.2 0.1 0.1 ; Prenatal care 0.1 0.0 0.0 ; Vaccination 0.3 0.2 0.1 - Health sector financing features - Financing tripod: State budget, external contributions (bilateral and multilateral), and user cost recovery (users cover up to 70 percent of running costs). - State budget allocation to health: often less than 5 percent of the overall budget; average disbursement rate 70 percent (2008 and 2009); far below Abuja commitment of 15 percent. - Technical Assistance cost: close to 39 percent in some projects. - In 1989, para-statals spent 142 million USD on their health services. - Private (profit and non-profit) providers deliver 40 percent of hospital services at health zone level. - Direct out-of-pocket payments exclude almost three-quarters of users from formal health care services because of poverty. - Systemic weaknesses listed as causes of poor health performance: - i) poor governance of the system - ii) weaknesses in quality and quantity of human resources - iii) financing of health systems - iv) situation of drugs and specific inputs - v) problems related to infrastructure, equipment/materials, laboratories and new technologies - vi) problems of health information - vii) quality of delivery of health services and care ### C. HIV/AIDS: prevalence and socio-economic impact - Estimated people living with HIV (PLWHA) in 2009: 1,431,800. - New infections in 2009: 168,250. - Deaths in 2009: 104,200. - HIV prevalence: 3.25 percent in the general population; 4.3 percent among pregnant women attending prenatal consultation services. - Wealth and geographic patterns - 2007 EDS suggests poorer classes are less affected than the rich (2 percent as against 0.6 percent for the poor). - Prevalence higher in Kinshasa and the eastern provinces (1.9 percent each) and in the Centre-South (1.2 percent). - Poor provinces of the Centre and North: 0.7 percent. - Socio-economic consequences - HIV infection is the leading cause of morbidity and mortality within the productive age group of 20 to 49 years. - AIDS-related household expense: 360 US$ compared to average annual income 298 US$. - Main household expenditure is food: households devote 85 percent of their income to food. - Impacts include decreased income due to job loss or inability to work, increased household and community vulnerability, and pressure on public spending for case management. - HIV/AIDS increases household vulnerability to food insecurity, which in turn raises infection risk and prompts risky coping strategies. *Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf* ### 39. At the policy and institutional level, the scope of the national response is limited ### _cr13226 - 39. At the policy and institutional level, the scope of the national response is limited ### HIV/AIDS: scope, drivers, and socioeconomic impacts - National response is limited by "insufficient national commitment and ownership" and a tendency to "leave the fight against AIDS in the hands of external partners." - HIV/AIDS should be considered within the economic context characterized by high poverty, unemployment, difficulties integrating youths, and survival strategies that drive the epidemic. - AIDS reduces national productivity by affecting productive age groups and threatens the country's future by exposing youths to risks. - Demographics and risk: - Nearly 50 percent under 15 years of age (EDS 2007). - Percentage of infected youths aged 15-24 years: 3.6 percent. - 2010 epidemiological and service delivery indicators: - Number of new infections in 2010: 127,135, including 70,574 women. - Percent of people infected with HIV who receive antiretroviral drugs: 12.4 percent. - Percent of infants born to HIV positive mothers who are infected with HIV: 23.3 percent. - Percent of HIV+ pregnant women who received ARV prophylaxis: 2.2 percent. - Number of AIDS-related orphans: 984,879. - Group-specific prevalence: - Professional sex workers: 16.9 percent. - Female victims of rape: 20 percent. - Displaced women: 7.6 percent. - Pregnant women: 4.3 percent. - Youths aged 15-24: 3.6 percent. - Only 15 percent of health zones (80 out of 515 health zones) handle cases of co-infection (2010-2014 National Health Plan). - Blood donor HIV testing in 2010: 54.6 percent of blood units donors were tested for HIV. - Knowledge and utilization indicators: - Percent of adults with knowledge of their HIV status: 4 percent. - Percent who use condoms with a casual sexual partner: 13.5 percent. - Percent of the 15-24 age group with knowledge of HIV prevention: 15 percent. - Contextual vulnerability drivers: - Country shares borders with nine countries, some with high HIV prevalence. - Refugee and displacement figures: - DRC received nearly 436,259 refugees from neighboring countries, of whom 276,259 have been repatriated. - 500,000 Congolese sought refuge in neighboring countries and 187,777 of them have already been repatriated. - Estimated internally displaced Congolese: more than 1.35 million, mainly in the eastern provinces. - Key constraints limiting the fight against AIDS (enumerated): - (i) limited access, low utilization and quality of HIV/AIDS services; - (ii) fragmentation and verticality of interventions and poor synergy between AIDS interventions and other programs; - (iii) limited availability and quality of services; - (iv) underutilization of existing services and low geographical and financial accessibility; - (v) shortcomings in the collection and use of strategic information; - (vi) problems of availability, data quality and functionality of information systems; - (vii) weaknesses of health systems and institutional and technical capacity for implementation, particularly of community health systems; - (viii) socio-cultural barriers and perceptions, including stigmatization and the social status of women; - (ix) management of procurements and stocks with problems of estimation of needs and quantification, the unreliability of data, the multiplication of products under protocols (ARV) and guides as well as the fragmentation of distribution channels; - (x) insufficient involvement of communities and the private sector. ### Education: improvements, remaining gaps, and financing - General progress over the last decade due to funding from the State, households and Technical and Financial Partners; performance weighed down by poor infrastructure quality. - Primary and secondary indicators: - Gross enrollment rate in primary education in 2007: nearly 91 percent. - Net attendance rate: 51.7 percent in 2000 and 75.0 percent in 2010 (increase of 23.3 points in ten years). - Net enrollment rate improvement among poorer classes: from 39 percent to 65 percent. - Transition rate between primary and first cycle of secondary school in 2008: 68 percent. - Progress between first and second cycle specialization in secondary education: about 80 percent. - Net attendance rate of secondary schools in 2010: 32 percent. - Repetition rate in secondary: 18 percent. - Survival rate in secondary: 59.7 percent. - Completion rate of high school: 26 percent. - Equality in primary education index in 2010: 0.93 (targeting MDG parity by 2015). - Nursery school: attendance of girls is more than that of boys. - Secondary school gender disparities: - Gross enrollment rates: 30.3 percent (girls) and 53.6 percent (boys), parity index: 0.6. - Intake rates in 2008: 38.7 percent (girls) and 61.2 percent (boys). - Completion rates: 17.4 percent (girls) and 35 percent (boys). - Literacy and vocational/technical education: - Proportion of literate youths aged 15-24: 71.1 percent in 2001 and 72.1 percent in 2007. - Men: 78.3 percent to 83.1 percent. - Women: 64.3 percent to 62.3 percent (decline). - Vocational supply: 57 percent of schools built as from 1991; vocational branches total 37 with "commercial and administrative" and "sewing and tailoring” receiving 30 percent and 21 percent of learners respectively. - Higher education pressures (2006–2008): - Number of students increased from 240,000 in 2006 to 300,000 in 2008, approximately 80 percent in public schools. - Geographical concentration: 44.4 percent of students concentrated in Kinshasa. - Gender in higher education: girls represented 26 percent of students in 2008. - Financing of the education sector: - Public financing dropped from 24 percent of public spending in 1980 to 7 percent in 2002 and 4 percent in 2009. - National incidence of poverty: 70 percent. - For 100 USD spent on primary, secondary, and vocational education: - State contributes an average of 48 percent. - Households contribute 37 percent. - Partners contribute 15 percent. - Consequences: dilapidated infrastructure, inadequate teaching facilities, and transfer of public burden to households causing declines in school enrolment. - Major remaining constraints: - (i) household poverty limiting ability to afford education costs; - (ii) insufficient supply of quality education (infrastructure, school materials, teacher motivation and preparation, long distances); - (iii) maladjustment to lifestyles of specific groups (pygmies, forest dwellers, nomads); - (iv) mismatch between education and job market reducing perceived social utility of schooling; - (v) low public financing and limited support from Technical and Financial Partners. ### Living environment, water, sanitation, and housing - Water and sanitation access: - Access to drinking water rose from 22 percent to 26 percent between 2005 and 2010. - Coverage rate in rural areas remains far behind urban areas. - Sanitation: - Households with flushing toilet systems connected to a sewer: 1.3 percent in 2001 and 2.5 percent in 2007. - Percent of Congolese households using improved sanitation facilities: 14 percent overall, 36 percent in urban areas and 4 percent in rural areas. - Sub-Saharan Africa averages: 44 percent overall and 24 percent rural. - Percent of households defecating in the open: 12 percent. - Target from GPRSP 1 for sanitation services: 11.5 percent (not reached). - Public investment context: stagnating overall public investment (19 percent over 2006-2007 with a drop to 13 percent in 2008) contributed to low increases in sanitation access. - Constraints in water and sanitation: - (i) weaknesses of economic operators in the water sub-sector (REGIDESO in urban areas and SNHR in rural areas); - (ii) maladjustment of institutional frameworks with competences shared/diluted across several ministries; - (iii) insufficient financial resources; - (iv) poor involvement and ownership of communities and households in management and self-management, especially in rural areas; - (v) low purchasing power of the population. - Housing and urban planning: - Home ownership: survey 1-2-3 reports 75.5 percent owners; MICS reports 74 percent. - Rural: about 85 percent owners. - Urban: about 50 percent owners. - Housing materials: 81 percent of homes made of mud or straw; roof materials: 60 percent straw, 33 percent metal roofing sheets. - Urban concentration: most urban homes in suburbs; unplanned construction causing erosion, soil weakening, environmental degradation, land-use planning problems. - Government recommendation: implement swift action for better urban planning (restructuring housing fabric, provision of public services) and overall land use to prevent uncontrolled housing hindering future development. ### Environment: degradation, drivers, and consequences - Forest and land figures: - Estimated forest area: 145 million hectares (World Bank REDD report). - Deforestation rate: 0.7 percent per year between 1990 and 1995 (ADB study). - Reforestation rate: 0.3 percent per year between 1990 and 1995 (ADB study). - Net deforestation rate: 0.4 points per year (0.25 percent on average between 1990 and 2000 according to REDD). - Forest coverage rate: 55 percent in 1990 and 45 percent "as of now" (Ministry of Environment). - Population distribution: nearly 47 percent of the population concentrated on only 10 percent of the territory. - Main causes of environmental degradation: - Deforestation, extension of infrastructure and agriculture, logging, soil degradation due to erosion, urban pollution, poor management of solid waste, increasing loss of biodiversity, wars, and other factors. - Consequences: - Direct impacts on health, nutrition, employment. - Government intends to take measures to fight environmental degradation (reference to Pillar 4, chapter 2). ### Gender equality: status and disparities - Gender equality remains unaccomplished despite legal advances and constitutional provisions. - Overall status: - Women face discrimination across power, governance, political participation, socio-economic status, sexuality, health and education. - Inequalities affect perception, distribution, control and management of resources and are reflected in program design, implementation and evaluation. - Inequalities constitute obstacles to human rights promotion, poverty alleviation, economic growth and sustainable social development. - Representation and education: - Proportion of women in Parliament: 8 percent (2010 progress report on the MDGs). - Proportion of women in the Senate: 5 percent. - Parity target in the Constitution: 50 percent. - Gender index in higher education in 2005: 0.46. - Skilled job dominance: women are dominated by men in skilled positions. - Assessment: - Effective and equal involvement of women and men at all levels of wealth creation and distribution is required to achieve sustainable development goals. *Italic source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts from the provided content unit).* ### 61. The literacy parity index for women/men is very disadvantageous for women and ### 61. The literacy parity index for women/men is very disadvantageous for women and ### Gender disparities and related outcomes - Literacy parity index for women/men remained constant at 0.69 between 2001 and 2007. - Percentage of women employed in the non-agricultural sector increased from 21 percent to 34 percent between 2001 and 2007. - High proportions of violence against women: - 64 percent reported to have experienced violence since the age of 15. - 49 percent reported violence within the past 12 months. - Additional gender-related vulnerabilities and outcomes noted: - Women are more exposed to the risk of prostitution, diseases and AIDS. - Women have a higher mortality than men. - Identified root causes: - High discrimination results primarily from the religious and traditional institutions. ### Subjective poverty, vulnerability, and household well-being - Impact of conflict on perceptions and morale: - SOPPOC (2004) indicated 73.5 percent of households feel that they are poor (close to objective poverty level of 70 percent). - 33 percent of households believed that poverty would rise over the next 5 years (SOPPOC). - 63 percent of household heads declared that they have nightmares. - 70 percent are constantly sad. - 92 percent of households feel that they are useful to the country. - 88 percent had plans for the future. - Perceived causes of poverty (Survey 1-2-3): - Lack of jobs: 63 percent. - Lack of infrastructure: 12 percent. - Apparent national self-assessment: - Even though all households consider that they are poor, 60 percent of them do not consider the DRC as a poor country. - Vulnerable groups identified by SOPPOC: - (a) children in difficult circumstances (including street children, child soldiers and those accused of witchcraft), - (b) women in difficult circumstances (teenage mothers, young women who are family heads, women victims of sexual violence), - (c) people living with HIV/AIDS, - (d) persons with disabilities, - (e) elderly persons living alone, - (f) displaced persons (due to conflicts or natural disasters). - Assessed needs and recommendation: - Government's priority should be the establishment of a vigorous social protection policy alongside better cooperation with NGOs. - Groups most exposed to HIV and vulnerability: - Women, orphans and vulnerable children, unskilled and unemployed youths, people living with HIV/AIDS and professional sex workers. ### Household satisfaction with public services and risk mitigation - Perceptions of service delivery (BERCI survey 2010, three provinces): - General satisfaction with education, health, agriculture, water and electricity supply; satisfaction higher for health and education than for agriculture, water and electricity. - Health sector satisfaction metrics: - 80 percent of households satisfied with the availability of health personnel. - 74 percent of respondents satisfied with the average duration of medical consultations. - 44 percent satisfied with the availability of equipment. - 60 percent satisfied with the general condition of the buildings. - Education sector satisfaction metrics: - More than 69 percent of the parents are satisfied; 24 percent not satisfied; 4 percent more than satisfied. - 74 percent of parents satisfied with academic achievements or the quality of education. - Areas with less than 60 percent satisfaction: availability of equipment, books, school supplies, publishing of financial reports, general condition of toilets, school fees. - Parents expressed dissatisfaction with infrastructure (walls, classrooms, roofs, furniture) and sanitary conditions. - Water, electricity and agriculture satisfaction: - 55 percent of households think water supply situation has not changed compared to 2003. - 36 percent of households say they are generally very satisfied with electricity; 32 percent are satisfied. - Agriculture: households more or less satisfied with ability to have something to eat and earn some income; public services in agriculture have not improved and are unsatisfactory both quantitatively and qualitatively. - Governance and corruption perceptions: - Households almost unanimously agree that corruption contributes to increased poverty. - More than half of the households believe the State can do nothing to remedy the situation. - Household risk mitigation strategies (SOPPOC): - Working more: 90 percent of the population. - Diversifying sources of income: 77 percent. - Obtaining a loan from a friend or a bank: 72 percent. - Community solidarity: 90 percent of households reported to have worked for the good of the community. - Household priorities for the State: - First priority is to create jobs especially for youths, revitalize education, improve health infrastructure and enhance security. - Survey differences over time: in 2004 education (35 percent) before employment (15 percent); in 2005 employment top priority for 62 percent (Survey 1-2-3). ### Millennium Development Goals (MDGs) progress assessment - Government actions: - Since 2008 developed and validated (December 2008) a national action plan: "Advocacy paper to mobilize resources for the financing of the MDGs". - The advocacy paper revealed inability of the DRC to meet MDG targets in a stable macroeconomic framework by 2015 and recommended postponement to 2020 unless socio-economic context becomes favorable. - Box 4 summary of 2010 MICS survey findings: - Real chances for achievement by 2015 in: fight against HIV/AIDS (Goal 6, Target 6A) and women empowerment (Goal 3, target 3A). - No real progress observed for: fight against poverty (Goal 1, Target 1C), education for all by 2015 (Goal 2, Target 2A), child health (Goal 4, Target 4A), fight against malaria (Goal 6, Target C) and sanitation (Goal 7, Target 7C). - Mixed progress in maternal health (Goal 5, Target 5A) and access to drinking water (Goal 7, Target 7C). - Selected MDG indicator table highlights (as presented): - GOAL 1: - Proportion of the population living on less than one dollar per day expressed in purchasing power parity terms: 80 (1990), 70 (2007), 40 (2010), 2015 (target) — Unlikely. - Rate of unemployment age 15 to 24 in urban areas: 32.23 (2005) ; 2015 target 10 — Unlikely. - Percentage of children <5 years moderate underweight: 28 (1990), 31.4 (2007), 24 (2010), 14 (2015 target) — Unlikely. - GOAL 2: - Net rate of primary school attendance (6 - 11 years): 56 (1990), 61 (2007), 75 (2010), 100 (2015 target) — Potentially. - Primary school completion rate: 51 (1990), 44.3 (2007), 2015 target 100 — Unlikely. - Literacy rate of men 15 years and above: 85.8 (1990) ; 2015 target 100 — Potentially. - Literacy rate of women 15 years and above: 58.9 (2007) ; 2015 target 100 — Unlikely. - GOAL 3: - Girl/boy ratio in primary education: 0.93 (2007) ; 2015 target 1 — Potentially. - Girl/boy ratio in secondary education: 0.81 (2007) ; 2015 target 1 — Potentially. - Girl/boy ratio in higher education: 0.62 (2005) ; 2015 target 1 — Unlikely. - Proportion of seats and duty posts occupied by women at the National Assembly: 6 (1990), 7.7 (2007), 2015 target 50 — Unlikely. - GOAL 4: - Death rate of children below 5 years of age: 165 (1990), 158 (2007), 60 (2015 target) — Unlikely. - Infant mortality rate (below 1 year): 92 (1990), 98 (2007), 97 (2010), 30 (2015 target) — Unlikely. - Proportion of children 12–23 months who have received all vaccines: 30.6 (1990), 48 (2007), 90 (2015 target) — Unlikely. - GOAL 5: - Maternal mortality rate: 549 (1990), 322 (2007) — Unlikely to reach 2015 target. - Prenatal consultation: 85 (1990), 2015 target 100 — Potentially. - Proportion of childbirths assisted by qualified health personnel: 74 (2007), 2015 target 100 — Potentially. - Prevalence of contraceptives: 4.6 (1990), 6 (2007), 15 (2015 target) — Unlikely. - GOAL 6: - Prevalence rate of HIV/AIDS: 5 (1990), 3.7 (2007), 3.1 (2010) — Potentially. - Percentage of children <5 years that sleep under treated mosquito bed nets: 3.4 (1990), 2015 target 15 — Unlikely. - GOAL 7: - Proportion of forest land: 54.6 (1990), 62 (2007) — Unlikely. - Surface area of protected zones: 9 (1990), 10.4 (2007), 15 (2015 target) — Unlikely. - Proportion of the population with access to better and sustainable water sources: 46.2 (1990), 47 (2007), 71 (2015 target) — Unlikely. - Proportion of the population with access to a better sanitation system: 10 (1990), 17.6 (2007), 55 (2015 target) — Unlikely. - GOAL 8: - Official Development Assistance as a percentage of GDP: 5.49 (1990), 15.5 (2007), 10.7 (2010), 5 (2015 target) — Potentially. - Public debt stock as A percentage of GDP: 120 (1990), 102 (2007), 104.1 (2010), 94.4 (2015 target) — Potentially. - Debt service as a percentage of exports: 13.5 (1990), 1.97 (2007), 4.1 (2010), 13.3 (2015 target) — Unlikely. ### Main causes of poverty and policy priorities - Key manifestations and drivers of poverty: - Prevailing mortality of women and children still high due to poor nutrition and high morbidity. - Limited access to social services and unequal access despite slight improvement. - Low level of education and lack of modern employment. - Exposure to an unsafe environment, inadequate housing. - Structural deficiencies in education, health, water, electricity, infrastructure. - Lack of employment aggravates the situation. - Households’ priority actions in 2005: - "creation of jobs,” "tarring of roads" and "facilitating access to education". - Suggested state actions: - Improve basic services and infrastructure. - Increase funding to meet international requirements in terms of ratios. - Reduce vulnerability and eliminate sources of inefficiency. - Improve governance. - Promote growth sectors that create jobs, coupled with a policy of redistribution of the fruits of growth. - Particular attention recommended to: - (i) the promotion of economic growth, - (ii) control of population growth due to the strong correlation between poverty and large household sizes; - (iii) reduction of inequalities, - (iv) strengthening of basic infrastructure. ### Governance - Poor governance identified as a major cause of poverty: - Creates inefficiencies, loss in productivity, discourages enterprise creation and jobs, drains household resources, encourages capital flight, reduces government revenue and public investment. - Long-term effects on poverty even when masked. - Government commitment: - Strongly committed to fight corruption and promote good governance. - Business environment indicators: - In 2011 the DRC was ranked 175th out of 183 countries in the “Doing Business” report (improvement from 179th in 2010). - Constraints include complex and unstable administrative and regulatory framework, legal insecurity, and high and heavy taxation with a myriad of small taxes and license fees. - Doing Business (2010–2011) rankings table highlights: - Total: 2011 DB RANKING 175 ; 2010 DB RANKING 179 ; VARIATION IN RANKING + 4 - Business development: 146 ; 155 ; + 9 - Granting of building permits: 81 ; 139 ; + 58 - Transfer of ownership: 118 ; 125 ; + 7 - Granting of loans: 168 ; 167 ; -1 - Protection of investors: 154 ; 153 ; -1 - Payment of taxes: 163 ; 158 ; -5 - Cross-border trade: 172 ; 165 ; -7 - Execution of contracts: 172 ; 173 ; + 1 - Closure of business: 155 ; 152 ; -3 *Source: _cr13226 - 61. The literacy parity index for women/men is very disadvantageous for women and* ### 77. Corruption and poor governance result from particular contexts. Conscious of the ### Corruption and poor governance result from particular contexts. Conscious of the problem, the State has initiated substantive actions to promote its image and restore confidence. ### Political and security governance - Progress achieved after a long transitional period interrupted by two wars: establishment of transitional institutions, adoption of the new Constitution (December 2005), and first free and democratic parliamentary and presidential elections in the country in forty years. - Security situation improved between 2007 and 2010 through military pressure on rebel groups and dialogue with countries of the Great Lakes region. - Virtually all institutions under the Constitution at central and provincial levels have been established and made functional, but: - Institutions have serious capacity problems that make it difficult to carry out their functions. - The electoral process was strengthened by the promulgation and implementation of the Law on the National Independent Electoral Commission (CENI). - Situation remained particularly critical in the east during part of GPRSP I implementation; predominance of security issues and additional military spending led to fiscal imbalances observed until the end of 2008. ### Administrative and institutional governance - Legal framework for Public Administration prepared in 2009 with stakeholder support (including provinces) is pending adoption by Parliament. - Measures implemented to master civil servant numbers: census operations and retirement of agents and civil servants; institutional audits of ministries conducted. - Persisting, deeply rooted deficiencies in Public Administration: - Inappropriate and anachronistic laws and regulations governing State personnel. - Aging and non qualification of State employees. - Lack of a social security safety net, a wage and fringe benefits policy, and a career follow-up system for State Agents. - Implementation of Public Administration reform progressing slowly due to operational difficulties in steering structures and inadequate coordination of partner interventions. - In the area of human rights, beyond the prescriptive framework, promotion and protection actions are very limited. ### Decentralization - Legal basis established: - 2006 Constitution; laws of 2008 enshrine free administration of provinces, the Conference of Provincial Governors and the Decentralized Territorial Entities (ETD). - Organic law laying down territorial subdivisions within provinces (May 2010). - Public Finance Law (LOFIP) clarifies aspects related to transfer of financial resources and implementation of provincial and ETD budgets. - Several important bills pending Parliament examination, including: - Law on the national, provincial and local public service. - Law on the nomenclature of provincial and local taxes, royalties, duties and rights (awaiting opinion of next Conference of Governors before forwarding to the National Assembly). - Law on the national fiscal equalization fund should be submitted to the Government for adoption. ### Insufficient economic growth - GPRSP I required robust redistributive economic growth situated between 8 and 12% to reduce poverty; actual growth between 2006 and 2010 was below 8 percent. - Impact of global financial crisis: - Growth slowed to 2.8 percent in 2009. - Average inflation rate over the 2006–2010 period was 46.2 percent. - 2010 outcomes: - Inflation fell below 10 percent. - Growth rose to 7.2 percent, supported by prudent fiscal policy and dynamism in mining, public works and civil engineering (BTP), and tertiary sectors. - First half of 2011: rigorous management of public finances maintained despite soaring world prices for food and energy. - Program projection: growth rate expected to reach 6.8 percent, implying an increase of per capita income by 3.8 percent — still below the 8 percent threshold. - Between 2006 and 2010 the macroeconomic situation marked by: - Effects of international economic and financial crisis. - Debt relief. - Control of inflation. - Budgetary discipline. - Growth path: - 2006: 5.6 percent. - 2008: 6.2 percent. - 2009: 2.8 percent. - 2010: 7.2 percent. Box — Main obstacles to economic growth in the DRC (summary from cited study) - Growth slowed by: - Failures of past governments: governance, lack of regulations and laws, breach of contracts, administrative leadership. - Lack of funding. - Lack of infrastructure (especially energy and transport). - Low human capital, macro-economic risks, lack of diversification and market failures. - Low investment, “which is only 4 percent thus, very far below the 27 percent threshold required to achieve a double digit growth”. - Report recommendation: establishment of solid institutions, removal of restrictions by pro-active policies, and diversification of the economy. ### Macroeconomic outcomes and public finance - Inflation control 2006–2010 partly due to stringent fiscal and monetary measures; average annual inflation rate reached 46 percent in 2009 because of rising food prices. - Debt relief: recipient of Multilateral Debt Relief Initiative (MDRI) and HIPC initiative in 2010. - Tax revenue mobilization and public expenditure: - Tax burden rose from 13 percent in 2006 to 19 percent in 2010 (an improvement of 6 points). - Public expenditure accounted for 31 percent of GDP in 2010 versus 20 percent in 2006 (increase of 11 points), reflecting sharp increase in public investments in 2009 and 2010 and, to a lesser extent, payroll increases. - Fiscal balance: -0.6 percent of GDP in 2006; -3.3 percent of GDP in 2009. - External accounts: - Current account deficit deteriorated 2006–2010 due to accelerated investments since 2008. - External current account excluding grants: 10 percent of GDP in 2007; 8 percent in 2008; 9 percent in 2009. - Deterioration caused mainly by decline in net services and public and private transfers and deterioration of trade balance (notably cotton and textile exports). - Money supply: average annual increase of 49.4% over 2006–2010, reflecting the inflation profile; driven by accumulation of net foreign assets at commercial banks, increased credit to private sector, and deterioration of net government position. - Overall economic performance 2006–2010: - Average economic growth rate: 5.6% (below GPRSP 1 target of 8 percent). - Government priorities to accelerate growth and create decent jobs: - Strengthen macro-economic stability. - Diversify the economy: revitalize agriculture, improve mining sector management, continue public works policy that generates employment. - Improve business climate to favor business development. - Sectoral sources of growth: - 1996–2005 growth mainly supported by mining and construction. - Late decade: strong growth in agriculture and services (especially wholesaling and retailing). - Government to rely on five priority sectors: trade, agriculture, mining, transport and telecommunications, and construction. ### Provincial growth composition - Provincial strategy: State should rely on most competitive sectors with highest added value (e.g., services in Kinshasa, mining in Katanga). - 2010: agriculture contributed significantly to GDP in most provinces, hence its leadership position. ### Employment gap - Demographics and labor force: - Population growth: 3.1 percent (explained by decreasing infant mortality and constant fertility averaging 6 children per woman). - Population will double every 25 years if trend continues; 50 percent of active population aged 15 to 64 years will be young. - Poverty and employment linkage: - 2005 survey 1-2-3: about 70 percent of the poor are unemployed or underemployed. - Wage inequalities: 65.3 percent. - High number of working children (4 to 14 percent according to surveys), most out of school. - Youth employment: - 15-35 age bracket represents over 25 percent of population and records an unemployment rate of 28 percent versus national average estimated at 6 percent. - Need for active policy providing Income Generating Activities (AGR) for this age bracket. - Girls in this young population are more vulnerable due to under education and socio-cultural barriers. - Labor force participation rates: - National: about 61 percent (60.8 percent for men; 59.99 percent for women). - Rural: 68 percent. - Urban: 51 percent. - Age 39 to 49 bracket: 91.7 percent (95.7 percent for men; 87.6 percent for women). - Unemployment and underemployment: - Average national unemployment rate: 6.5 percent. - Urban unemployment rate in 2005: 17.8 percent. - Formal employment: less than 10 percent overall (two thirds in public sector). - Informal sector: underemployment or disguised unemployment around 75 percent in urban areas and 95 percent in rural areas. - Unemployment rate for 15-24 age bracket: 32.2 percent (about twice national urban average of 17.8 percent). - Growth–employment relationship: - Recent study indicates causal link between high growth and employment in DRC: growth rate of job creation 3.2 percent. - Growth alone cannot fully absorb additional labor market demand. - Job creation growth (~3 percent) is far below average economic activity growth (~6 percent) over 2006–2010. - Constraints to job creation: rigid labor legislation, adverse effects of global financial crisis, need to promote decent and productive work by simplifying and effectively applying the labor code, improving business climate and promoting the private sector. ### Redistribution - Loopholes in resource allocation mainly caused by absence of genuine redistribution policy of State resources; low impact of economic growth on poverty results from absence of real redistribution policy. - Internal resource mobilization improved: maintained upward trend from 17 percent to 19 percent of GDP between 2009 and 2010 within prudent fiscal management. - Some studies suggest optimal average tax rate in the DRC is around 45 percent of GDP. - Despite improvement, resources remain insufficient and are allocated non-optimally to contribute to poverty alleviation; current taxation policy is unfavorable for the poor. *Source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpt)._cr13226* ### 101. Spending on social sectors remains weak due to the low mobilization of domestic ### _cr13226 - 101. Spending on social sectors remains weak due to the low mobilization of domestic ### Weak social sector spending: findings and data - Spending on social sectors remains weak due to the low mobilization of domestic resources; this has an effect on the level of poverty. - Table 5. Evolution of social expenditures (as a % of total expenditure) - Health - Functioning: 2006: 5.1; 2007: 5.7; 2008: 5.6; 2009: 5.6; 2010: 5.8 - Investment: 2006: 9.9; 2007: 6.6; 2008: 5.1; 2009: 11.4; 2010: 10.6 - Education - Functioning: 2006: 29.4; 2007: 21.9; 2008: 26.1; 2009: 24.5; 2010: 21.1 - Investment: 2006: 2.9; 2007: 8.7; 2008: 6.5; 2009: 4.2; 2010: 4.9 - Other social sectors - Functioning: 2006: 2.2; 2007: 4.1; 2008: 3.6; 2009: 3.6; 2010: 3.9 - Investment: 2006: 1.3; 2007: 0.7; 2008: 2.9; 2009: 0.1; 2010: 1.3 - Total - Functioning: 2006: 36.6; 2007: 31.6; 2008: 35.3; 2009: 33.8; 2010: 30.8 - Investment: 2006: 14.1; 2007: 16.0; 2008: 14.6; 2009: 15.7; 2010: 16.9 - Source: Medium term expenditure framework committee. ### Distributional effects of trade policy - A recent study indicates the commercial tariff structure of the State is biased in favor of the rich. - The average rate of customs duties borne by poor households is 15 percent as against an average of 5 percent for the rich. - Figure 10 description: each point represents a weighted average of the custom duty in the DRC where each good is weighted by its share in the average expenses of households within a particular income bracket (100 centiles). If the regression curve is declining, the tariff is regressive (anti-poor); if it is rising, the tariff is progressive (pro-poor). - Source for figure: EDIC/RDC Report (2010), World Bank, based on the Survey 1-2-3 (2004/5). ### Contextual constraints and governance implications - The Congolese economy is characterized by structural inflexibility and difficulty of keeping public finances under control in a difficult security environment. - Expenses related to the maintenance of peace and security have had a crowding out effect on social spending. - Key challenge: maintain the upward trend in revenues and improve allocations to ensure their pro-poor nature. - Strengthening governance in all its aspects is decisive for GPRSP implementation. ### Challenges to overcome within the next five years (listed in source) - (i) control of population growth and revitalization of civil status services - (ii) recovery of a double-digit growth that creates decent jobs through the strengthening of the dynamics of reconstruction and rehabilitation of basic socio-economic infrastructure, particularly in rural areas and the boosting of agriculture - (iii) improvement of the security of the national territory and the consolidation of peace and democracy - (iv) improvement of financial and economic governance for more effective public policies - (v) the building of institutional and human resource capacities - (vi) mobilization of resources needed for the implementation of national strategies essential for the achievement of MDGs - (vii) environmental protection through a systematic consideration of issues related to climate change - (viii) acceleration of the implementation of the decentralization process - (ix) the strengthening of the national statistics system - (x) the reduction of gender inequalities ### Strategic goals and targets (GPRSP 2) - Overall objective: improve the living conditions of the Congolese people by 2015 with special attention to vulnerable groups including women and children. - Macroeconomic and development targets - Annual average economic growth: 7.2 percent - Reduction in the poverty incidence by about 11 points to be 60 percent in 2015 - Creation of nearly a million decent jobs per year - Stabilization of inflation at an average annual rate of 9 percent - Table 6. Global and sector objectives (excerpts and exact targets) - Poverty and employment - To bring back the incidence of poverty by 2015 to 60 percent - To create at least 1 000 000 decent jobs per year by 2015 - Growth - To assure a real average growth rate of GDP of 7.2 percent per year during the period - To increase the level of public investments in order to reach an annual average investment rate of 19 percent - Stabilization - To stabilize the average annual inflation rate at about 9 percent - To reach an average annual domestic fiscal balance of -1.5 percent - To adjust the average annual current account deficit to 6.7 percent - Education - To ensure primary education for all, resulting by 2015 in totally free primary education, a net enrolment rate of 93.2 percent and a retention rate of 66 percent - To reduce the illiteracy rate among adults above 15 years from 30 percent to 8.4 percent by 2015 - To step up the current girl - boy ratio in higher education from 0.3 to 0.5 in 2015 - Health - To reduce the proportion of children less than 5 years of age suffering from underweight: 16.3 percent - To reduce infant mortality rate to 60 per 1.000 live births in 2015 as against 158 in 2010 - To increase the immunization coverage ratio of children to 80 percent - To reduce maternal mortality rate to 348 per 100,000 live births as against 549 currently - To increase the rate of assisted childbirth to 93.6 percent - Access to drinking water - To increase the coverage in drinking water supply: urban 50 percent, rural 30 percent - To increase the coverage ratio of drinking water to 38 percent as against 26 percent currently - Access to electricity - To step up the rate of electricity supply from 9 percent in 2010 to 19 percent in 2015 - HIV/AIDS - To reduce the rate of seroprevalence to a level below 3.23 percent - Environment & climate change - To increase the ratio of protected areas in the country to 17 percent ### Strategic pillars (implementation framework) - Government commits to implement a strategy based on four major pillars: - Pillar 1: Strengthening governance and peace - Pillar 2: Diversifying the economy, accelerating growth and creating jobs - Pillar 3: Improving access to basic social services and strengthening human capital - Pillar 4: Protecting the environment and fighting against climate change - Pillar 1 priorities include: (i) strengthening State authority, (ii) accelerating the decentralization process, (iii) pursuing the reform of public finances, (iv) improving the business climate and promoting the private sector, (v) building institutional and human capacity, (vi) supporting the national statistics system, and (vii) restructuring the Central Bank of Congo. *Source: _cr13226 - 101. Spending on social sectors remains weak due to the low mobilization of domestic* ### 120. To strengthen democratic institutions and policies, priorities for this strategy include: (i) ### _cr13226 - 120. To strengthen democratic institutions and policies, priorities for this strategy include: (i) ### Strengthening democratic institutions and political actors - Priorities include: - (i) strengthening the capacity of Parliament and political parties to fulfill their missions within the political system, - (ii) promoting the participation of citizens, both women and men, by targeting the action of the media and key civil society organizations, - (iii) consolidating the framework for the organization of elections and ensuring that the election calendar is respected in compliance with the necessary rules of fairness and transparency; and - (iv) strengthening cooperation with neighboring countries through greater involvement in regional organizations. - Parliamentary and political party actions: - Continue and complement initiatives undertaken especially since 2008. - Extend capacity building activities at the National Assembly and the Provincial Assemblies. - Emphasis on training of members of parliament on the budget because of the new powers given to Parliament by the public finance act. - Implement the data processing plan of the National Assembly. - Target political parties on issues relating to terms of approval, the system of grants and the production of financial reports. ### Citizen participation, media, and civil society - Continue development of citizen participation in line with two governance program priorities: - building the capacity and independence of the media and civil society organizations, children and youths; and - extension of forums of dialogue and consensus-building between non-governmental actors and public authorities. - Develop civil society monitoring of public policies within the reactivation of the monitoring-evaluation system of the GPRSP and the revival of breakout groups. - The participatory approach is an operational choice of the GPRSP; involve grassroot communities, target groups, especially women and youths, in formulation and implementation of field actions. - Represent basic associative structures and trade unions in all institutional arrangements of the GPRSP. - For the Congolese diaspora: a reflection on the principle of exclusive nationality is required for its best involvement in the economic growth and/or development of the country. ### Electoral process and institutions - Short-run actions to strengthen the electoral process: - Full functionality of the office of the National Independent Electoral Commission (CENI), - Finalization of the revision of electoral registers in the provinces, - Rounding up of the financing of the electoral process, - Dissemination of electoral laws, - Organization of security throughout the elections. - Over the whole period, measures will be taken to: - (i) to ensure compliance with the agreed electoral calendar, including local elections, already postponed due to lack of resources and which will constitute an essential step in the consolidation of the political decentralization of the country, - (ii) to ensure impartiality and proper functioning of the National Independent Electoral Commission alongside the necessary update of voter registers, and - (iii) to enable the Constitutional Court to be fully operational. ### International and regional cooperation; development diplomacy - Government vision: set up development diplomacy to search, negotiate and mobilize external resources through cooperation agreements with technical and financial partners. - International cooperation actions: - Encourage DRC participation in main Committees and Joint Committees, meetings of United Nations system organizations and other international organizations to arrive at signing agreements for external resource mobilization. - Regional cooperation actions: - Encourage consolidation of bilateral cooperation between the DRC and African countries to mobilize external resources from partners, member or non-member States of Regional Economic Communities. - Focus bilateral development cooperation with Africa on technology transfer through training of Congolese senior executive staff in African Universities and Institutions with an international reputation and capacity building through experience sharing. - Regional economic integration focus: - Promote regional economic integration within the COMESA-EAC-SADC tripartite free trade area and through memberships to other communities such as the Economic Community of Central African States (ECCAS), the Economic Community of the Great Lakes Countries (CEPGL), the Gulf of Guinea Commission. - National Forum: - Organize a National Forum on regional integration to raise awareness among national stakeholders and identify key actions. - Military cooperation and diplomacy: - Deepen cooperation with neighboring countries and take part in peacekeeping activities on behalf of sub-regional organizations. - Restructure diplomatic missions and consular posts; renew diplomatic corps by gradual settlement of arrears of salaries and rents of diplomats and strengthening of their capacities. - Refocus diplomatic missions in the short-run on information and seeking foreign investors. - Promote the diaspora by greater involvement of Congolese living abroad in the process of nation rebuilding. ### Strengthening army and police intervention capacity to ensure national security - Context and objectives: - Address advanced dilapidation of military infrastructure, poor logistics, poor social conditions of military and police, inadequate basic and specialized professional training. - Vision: enable the DRC to live in peace within itself enjoying national unity and consolidated territorial integrity. - Strategy: modernize the army and national police to step up presence throughout the national territory and strengthen State authority. - Focus areas: (i) improve overall institutional framework of defense and security forces and build military intervention capacity to defend the nation, (ii) establish domestic public security services based on a new professional national police, close to citizens, accountable and transparent, and (iii) fight against gender-based violence including sexual violence. - Army reorganization priorities (three key priorities described, plus an explicit fourth): - Firstly: restructuring, reorganizing and equipping different defense forces, specialized corps and specialized services in compliance with the Organic Law No. 11/012 of 11 August 2011 on the organization and functioning of the Armed Forces; - Secondly: reorganizing and properly controlling the number of soldiers, organizing retirement for military officers who have reached retirement age and recruiting new elements, providing quality military education and training, and setting up literacy and vocational training programs for military personnel and their dependents; - Thirdly: construction and rehabilitation of infrastructure (training centers, camps, military bases, etc...) as well as acquisition of new military equipment; these Programs will help to reduce poverty, develop and improve the living conditions of soldiers and their families and the population in general. - Fourthly: improving intervention capabilities will require new investments in infrastructure (constructions or rehabilitations) and in military equipment. - Improve living environment of military and families; improve social conditions in military camps and precarious conditions affecting military dependents, women and children. ### Police reform and implementation projects - Police reform characteristics: - Long-term endeavor; additional resources committed. - Guided by an organic law adopted by government; implementation phase to materialize activities under the 15 year strategic framework and in the three-year action plan. - Objective: significantly improve working conditions of the police in organization, functioning and governance; create a modern, apolitical, unified, and professional police force at the service of the public. - Ongoing implementation projects: - (i) initiation of police data collection, - (ii) implementation of a proximity police through construction and equipment of reference police stations, - (iii) training of police elements, - (iv) acquisition of transportation and transmission equipment in pilot provinces of South Kivu, Western Kasai, Lower-Congo and Kinshasa. - Other reform actions: - (i) implementation of a computerized human resources management system, - (ii) revitalization of the Departments of Finance, budget, inspection and audit of the Congolese National Police, - (iii) redefinition of responsibilities and procedures of budget management, - (iv) reorganization of general intelligence services, the border police and school inspections. - Governance and coordination: - The Police Reform Monitoring Committee (CSRP), a joint inter-ministerial consultative body with international partnership, chaired by the Minister of Interior and Security who coordinates all activities conducted within the purview of the reform. - Responsibility for implementing identified actions falls within the remit of the General Commissioner’s Office of the Congolese National Police (PNC), supported by international partners. - Gender-based violence: - Intensify fight against gender-based violence including sexual violence, building on earlier achievements: validation of the strategy of communication and prevention of sexual violence; advocacy activities; establishment of a Green Line; popularization of the law on sexual violence; holistic care of victims of sexual violence. - Extend awareness-raising actions to target security forces, local authorities, students and representatives of NGOs from the civil society. ### Accelerating judicial reform and promoting human rights - Key deficiencies in justice system: - Outdated legal framework in several areas, incomplete judiciary coverage and lack of local justice, low capacity of administrative, judiciary and penitentiary staff, less functional training schools for judiciary personnel, malfunctions in the administration of justice, flaws in criminal and administrative statistics. - Human rights actions of promotion, protection, monitoring and communication of information (periodic reports to different committees in charge of human rights) are still very limited. - Government policy objectives: - Provide impartial justice accessible to all (men, women, boys and girls) and allow Congolese to fully exercise their economic, social and human rights. - Strive to: (i) modernize the legal framework, (ii) improve access to justice, (iii) build human and institutional capacity, (iv) fight against corruption, impunity and money laundering, and (v) promote human rights and their enforcement. - Legal and organizational framework actions: - Ensure full operationalization of the new organizational framework of the Ministry and implement recommendations of the institutional audit. - Put into effect measures taken in respect of high judicial institutions. - Continue modernization of national legal framework to be consistent with new requirements of justice and international standards, including giving priority to the implementation of the OHADA system. - Restructure the Congolese Standing Commission on Law Reform (CPRDC) and extend support to sub-committees revising legislation in different sectors. - Note: two bills on the establishment of the Human Rights link entity, which were presented on 13 June 2011, are being studied by Parliament. - Infrastructure and access to justice: - Gradually introduce strengthening of infrastructure to improve judiciary coverage. - Accelerate construction, rehabilitation and equipment of new courthouses and other provincial judicial infrastructure and give higher budgetary priority to the sector. - Improve access to justice through increased mobile court hearings, setting up Peace Courts, Juvenile Courts and adoption of the Law on free legal assistance. - Prioritized rehabilitations in detention facilities and children detention centers; special effort to stabilize the main prisons in the DRC to better fight against impunity and improve protection of persons and property. - Support to improve prison environments. - Staff training and institutions: - Training targets: (i) judges and other legal officials, (ii) managers of financial and human resources, (iii) officials involved in planning, programming, monitoring/evaluation and statistics as well as management of archives. - Support to schools charged with training and recycling of judicial staff; implement proposed construction of a National School of Magistracy. - Fight against impunity, corruption, and money laundering: - Actions focused on (i) capacity building of control structures of the Ministry of Justice and the judiciary (General Inspectorate of Judicial Services and Disciplinary Chambers of CSM), (ii) implementing codes of conduct, and (iii) improving the financial security of judges and their specialized training in the fight against gender-based sexual violence. - National strategy to fight against corruption, money laundering and organized crime adopted since November 2002. - Establishment of a national Financial Intelligence Unit (CENAREF) to collect and process financial information on money laundering channels and the financing of terrorism. - Strategy based on prevention, awareness raising and moralization, reform of public institutions, terms of repression and strengthening partnership between public sector, private sector, civil society and the international community. - Implementation approach: educative (sensitization of different stakeholders in the fight on principles of prevention), fiscal (development of appropriate fiscal measures) and repressive (sanctions in proven cases). - Protection and promotion of human rights: - Mobilize support to strengthen the institutional setting following establishment of the Human Rights link entity. - Focus on outreach campaigns on human rights conventions and targeted themes (sacredness of life, gender balance, protection of individual freedom, equality of citizens, abolition of death penalty, and protection of children). - Sensitization and guidance actions to improve detention conditions of prisoners. ### Accelerating the decentralization process - Legal basis established, but process hindered by multiple constraints: - Weak political and social ownership of the process, - Delays in establishing the delivery framework, - Difficulties in finding consensus on carving out of the national territory or operationalization of transfers (powers, human and financial resources, assets), - Gaps between financial resources and projects to be implemented, - Instability of provincial executive officers. *Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf* ### 147. Government's vision in the decentralization process is to bring administration closer to ### Government's vision in the decentralization process is to bring administration closer to ### Decentralization vision and implementation framework - Government's vision: "to bring administration closer to the people, promote national development through the revitalization of local and provincial economies and the establishment of democratic values following participatory mechanisms." (paragraph 147) - Implementation vehicle: Strategic Framework for the Implementation of Decentralization (CSMOD) with an Action Plan approved by Government on 24 March 2011. (paragraph 148) - CSMOD built on seven strategic areas: - (i) effective ownership of the decentralization process - (ii) transfer of powers and resources following a progressive approach - (iii) capacity building - (iv) development of planning and management tools - (v) harmonization of the decentralization and devolvement process - (vi) effective coordination between the central government and provinces - (vii) financing of decentralization - Additional intended actions: - strengthen legal and regulatory framework and finalize institutional architecture under the Constitution - organize local elections and establish new provinces - determine terms and calendar of effective transfer of powers, resources and responsibilities to the provinces and Decentralized Territorial Entities according to a progressive approach. (paragraph 149) ### Public finance reform — weaknesses identified - Evaluations (post-resumption of structural cooperation) reveal weaknesses including: - (i) the outdated nature of the legal framework - (ii) lack of credibility of the budget - (iii) inefficiency of government auditing - (iv) weaknesses in the accounting and cash-flow management system - (v) poor budget preparation and execution procedures - (vi) ineffectiveness of the tax system. (paragraph 150) ### Public finance reform — measures implemented - Implemented reform measures include: - (i) the promulgation of the law on public finances - (ii) the promulgation of the public procurement code and the setting up of the organs provided in the code - (iii) the promulgation of the customs code - (iv) the promulgation of the ordinance instituting the VAT - (v) streamlining the payroll procedures through the designing and implementation of the Simplified Transitory Procedure - (vi) strengthening the expenditure chain by acquiring a new software and computer equipment - (vii) adoption of a new manual of procedures. (paragraph 151) - Revenue and accounting reforms: - modernization of tax instruments and tax administrations through structural and legislative reforms - establishment of the double-entry accounting system applicable to the treasury enabling real-time production of trial balances to know balances to be recovered and what remains to be paid. (paragraph 152) ### Strategic Plan for Public Finance Reform (PSRFP) - Adoption: Government adopted a strategic plan to reform public finances in March 2010; the plan is part of the development strategy for the country and is built around five pillars: (paragraph 153) - (i) budgetary reform - (ii) income tax system and tax policy reform - (iii) rationalization of expenditure management - (iv) improvement of bookkeeping and cash management - (v) strengthening the control device - Purpose: PSRFP presents Government's vision and objectives for public finances and offers a reference system for national actors and development partners. (paragraph 154) - Box 7 — Key actions of the Strategic Plan for Public Finance Reform: - (i) the introduction of a new budgetary framework - (ii) the modernization of public accounting - (iii) reform of cash-flow management - (iv) the establishment of an integrated information system of public finance management (GESIFIP) - (v) reform of the execution of budgetary expenditures and revenues - (vi) improvement of debt management - (vii) modernizing the tax system and revenue management - (viii) improvement of the public procurement system - Other major reforms listed: - Establishment of a minimum platform for GFP in the area decentralization (PMFP) - Strengthening the external audit of the management of public funds - Support to the work of parliamentary committees, ECOFIN and development of dialogue between Parliament and the Court of Auditors - Building the capacity of the Audit Office (powers, conditions and means of work, etc...) - Adoption of an organic law and other legislations relating to powers, organization and functioning of the Audit Office (Box 7) ### Public finance vision, medium-term goals and operationalization - Vision: provide the country a modern public finance system that meets national and international standards and is based on good practices; place public finances at the service of growth and poverty reduction by seeking efficiency of government action whose performance is measured and monitored. (paragraph 155) - Medium-term goals: - (i) provide public finances with a modern legal framework - (ii) restore the central place of the budget in the implementation of government’s economic and social policy and particularly in the management of public funds. (paragraph 156) - Operationalization: - PSRFP will be operationalized through a three-year rolling action plan and specific action plans per pillar. (paragraph 157) - Fiscal reform pillar actions include: - construction of a comprehensive and multi-annual fiscal framework consistent with national priorities - strengthen coherence between the State budget and the development strategy - production of good quality macro-economic and macro-budgetary justifications - reorganization of the management of budget process - promotion of transparency and comprehensiveness of budget information - Tax system and tax policy pillar: - continue mobilization of fiscal revenues, non fiscal revenue and customs receipts - particular emphasis on mobilization of revenue from the natural resource sectors - introduce new legislation for the collection of non-fiscal revenue via law fixing the nomenclature of taxes, dues and royalties’ revenue that contribute to national income - legislation fixing the nomenclature of taxes, fees, duties and royalties in the provinces - Expenditure management priorities: - strengthening the expenditure chain - reliability and extension of computerized payroll procedure to provinces and all payment elements before establishing an integrated administrative and financial management system - improving the procurement system and management of public debt - Bookkeeping and cash-flow management actions: - build capacity of the Department of the treasury - set up an accounting system for the keeping of public accounts - organize the network of public accountants and bye-laws of accountants - introduce a new general regulation for government accounting (paragraphs 157) - Box 8 — Performance indicators: - Budget credibility - The budget is realistic and implemented as intended. - Coverage and transparency - The budget and tax risk analysis are complete and fiscal and budget information are made available to the public. - Budgeting based on public policy - The budget is prepared taking into account government policy. - Predictability and monitoring of budget execution - The budget is implemented in an organized and predictable manner, and arrangements are made for monitoring the exercise. - Accounting, recording of financial information and financial reporting - Archives and adequate information are produced, maintained and disseminated to meet the requirements of monitoring, decision-making, management and financial reporting. - External supervision and auditing - Systems for rigorous examination of public finances and monitoring of implementation are set up. (Box 8) ### Strengthening control and fiscal decentralization - Strengthening controls: - institutional and technical support to traditional structures of control - strengthen prior and post administrative control, judicial and policy control within a results-based management approach - ongoing revision of the organization of the Audit Office expected to result in adoption of an organic law defining composition, organization and functioning of the Audit Office - revise regulations on prior control to strengthen prior administrative control of fiscal operations. (paragraph 158) - Fiscal decentralization minimum platform adopted for provinces covering four pillars: - (i) construction of provincial taxation - (ii) improvement of expenditure management through establishment of provincial spending chain, computerized payroll procedure and improvement of public procurement system - (iii) establishment of the planning, programming and budgeting system - (iv) modernization of the legal and regulatory framework on public finances. (paragraph 159) - Institutional measures: setting up of the Steering Committee for Public Finance Reform (COREF) in 2009 to promote, facilitate, coordinate and monitor reform implementation while ministries and agencies prepare and implement reform actions in their areas. (paragraph 160) ### Financial sector objectives and planned reforms - Objective: enable the financial sector to play its role of financing the economy and support community dynamics; priorities include strengthening banking intermediation, development of payment systems and regulations to promote banking intermediation, reform of micro-finance regulatory framework, and restructuring and recapitalization of the Central Bank of Congo. (paragraph 161) ### Business climate improvement and private sector promotion - Business climate vision: make the business climate attractive to private investors to support economic growth and promote employment. (paragraph 162) - Four strategic areas for business climate reforms: - (i) harmonizing the legal framework by eliminating administrative bottlenecks and simplifying and computerizing procedures - (ii) promoting trade by establishing an integral one-stop financial centre, harmonizing legislation with international treaties or agreements, and simplifying and harmonizing cross-border trade procedures with sub-regional bodies and international standards - (iii) implementing taxation and incidental taxation reforms by reducing the tax burden, simplifying and rendering transparent the taxation and incidental taxation system - (iv) promoting access to finance through implementation of security system reforms and modernization of the banking risks office - Additional priorities: - enhancement of the business climate, implementation of the OHADA legislation, strengthening of four market courts recently established, preparation of a Law on Public-Private Partnership (PPP) to be tabled before Parliament, and training of administrations on regulatory, institutional and legal changes for businesses. (paragraph 162) ### Private sector constraints and government strategy - Private sector profile and constraints: - dominated by SMEs constituted as small or medium-sized private limited companies with local or foreign capital - SMEs face difficulties accessing finance due to: low equity capital of SMEs; low human resource capacity and lack of future vision of SMEs; absence of coherent policy on SME financing; absence of a financial institution specialized in financing medium and long-term investments; low equity capital of credit institutions; flaws in functioning of financial intermediation - Congolese government enterprises have not accomplished assigned economic and social goals. (paragraph 163) - Government's major objective: enable the private sector to become the driving force behind economic growth via: - improving the business climate (simplifying administrative procedures, reducing costs and delays, ensuring legal security) - improving financial intermediation including development of the micro-finance sector in line with the National microfinance strategy (finalized and adopted) - reform of government enterprises by gradual withdrawal of the State and strengthening public/private partnership. (paragraph 164) ### Improving financial intermediation — Central Bank and supervision reforms - Rationale: a sound, strong and credible financial system promotes growth; credibility depends on good regulations and proper supervision. (paragraph 165) - Central Bank of Congo actions: - supervises the financial system via Directorate in charge of the supervision of Financial Intermediaries - conducted a self-assessment against 25 core principles for effective banking supervision and developed an Action Plan approved by IMF Technical Support Services (Department MCM and AFRITAC Center). (paragraph 166) - Two major objectives of the action plan: - (i) complete reform of the legal and regulatory framework for banking supervision - (ii) strengthen the operational capacity of the Central Bank to conduct its business. (paragraph 167) - Specific reforms/actions (listed in source): - Development of detailed and operational procedure manuals for the supervision of Financial Intermediaries - Establishment of a system of rating banks based on the CAMELS model for banking supervision - Development of an Instruction to Banks on the preservation or business continuity plan within credit institutions - Adoption of a strategy to strengthen the health of banks against exogenous shocks - Implementation of authoritative accounting pronouncements of Credit Institutions and Institutions of Decentralized Financial System in accordance with International Financial Reporting Standards, abbreviated IFRS - Integration into the prudential arrangement of an instruction to Banks on shareholding, investments and non-banking operations - Development of regulations governing institutions operating on electronic money and the implementation of Mobile Banking in the Democratic Republic of the Congo for the purpose of financial inclusion - Reflection on the implementation of a solidarity mechanism in the financial center - Simplification of procedures for the recovery of disputed financial claims of credit institutions - Reflection for the beginning of the implementation of the Bâle II prudential framework - Defining a general framework of liquidation transactions of credit institutions and institutions of the Decentralized Financial System - Formalizing the procedure and methodology of analysis of the business plan, financial statements and the quality of management staff as part of the procedure of issuing approvals - Publication on an annual basis of reports on the activities of supervision of financial intermediaries - Conducting a study on the establishment of a deposit insurance in the DRC - Conducting a reflection on how to control the activities of Congolese banks abroad and on the formalization of a prudential framework for consolidated supervision - Reflection on financial education particularly with the launching of the International Day of Savings in the DRC - Creation and organization of a reliable and updatable data base on the institutions of Decentralized Financial System - The construction of an inclusive financial sector particularly by weaving links between banks and other credit institutions - Publishing a special report on microfinance activities - Reflection on the development strategy of institutions of the Decentralized Financial System, notably by introducing the networking of Savings and Credit Cooperative societies that are increasing in number. (paragraphs 168 and following) _italic: Growth and Poverty Reduction Strategy Paper – GPRSP 2_ ### 169. Government's strategic objective is to streamline the management of State enterprises in ### _cr13226 - 169. Government's strategic objective is to streamline the management of State enterprises in ### Streamlining State enterprises - Government strategic objective: streamline management of State enterprises to improve their contribution to the creation of national wealth. - Planned actions: - finalize ongoing withdrawal process, particularly assessment of the situation of assets of enterprises transformed into commercial companies, consolidate their accounts, and manage liquidations to completion. - upgrade some companies through a minimum investment plan. - liberalize sectors of State monopoly. - reform the Ministry of Portfolio to adapt to a post-reform environment. ### Promoting a Congolese middle class and mobilizing the diaspora - Rationale: - Emergence of a middle class is essential for economic growth, job creation, competitiveness, and consumption-led dynamics. - The DRC diaspora contributes significantly through transfers, investments, and promotion of social activities. - Government goals: - promote development of a strong national middle class as a development actor and exploit diaspora potential. - Instruments to achieve goals: - (i) major institutional, economic and financial reforms and governance; - (ii) development of a strategy for promoting and strengthening the capacity of agricultural small and medium-sized enterprises; - (iii) promotion of banks and financial credit institutions; - (iv) establishment of tax, incidental tax and administrative incentives to encourage creation of small and medium-sized enterprises and industries by nationals. - Alignment: these measures align with the strategic objective of improving the business climate and promoting foreign direct investment (FDI). - Diaspora incentives for investment: - (i) organize forums to inform diaspora about investment opportunities and provide administrative facilities in their favor; - (ii) strengthen the role of embassies in mobilizing the diaspora. ### Building institutional and human capacities; modernizing public administration - Diagnostic: - Public Administration shows significant shortcomings; Public Administration reform progressing slowly due to operational difficulties and inadequate coordination of partner interventions. - Government aim: promote a modern public administration sized to priority sovereign and development supervisory missions, accessible to citizens and responsive to their needs. - Specific objectives: - (i) reform legal framework for civil servants; - (ii) secure Management of the workforce of the Public Service; - (iii) human capacity building; - (iv) reorganization of services and development of results-based management tools; - (v) modernization of the public administration. - Legal framework actions: - promulgation of new Public Service personnel code and adoption of implementation measures; - creation of a Health Insurance Fund; - updating other legal elements and adoption of the Pension Code. (Note: draft pension Code was finalized in 2010.) - Workforce management actions: - strengthen consistency between files, ensure lasting reliability of updating procedures, control personnel flows (retirements/recruitments); - establish basis of a computerized system for management planning of human resources. - Human capacity building focus: - (i) consolidate existing needs identification exercises and update ongoing evaluation of Programs and local supply capacity; - (ii) implement in a coherent overall program framework (PRONAREC) based on coordinated fundraising and a training program tied to strategic priorities of the GPRSP 2; - (iii) strengthen human resource management services (HRM) of Ministries to link with technical Departments and monitor training. - Reorganization and results-based management: - (i) fully use findings of organizational audits and clarify missions and organisation of different ministries; - (ii) progressively develop activity plans per Program based on ministerial MTEF structure and monitor them. - Upstream measures to usher in a culture of results include strengthening motivation conditions (regular payment of wages, revision of bonuses, etc.). - Additional modernization components (subject to available resources): - (i) strengthen communication by promoting Information and Communication Technology (ICT) in ministries; - (ii) promote ethics, integrity and rules of professional conduct; - (iii) promote control of quality of services rendered between departments and to users. ### Supporting planning setup and the national statistics system - 2007 diagnosis (being updated for National Statistics Development Strategy (SNDS)) identified four problem groups for the National Statistics System (SSN): - (i) insufficient human (quantity and quality wise), material and financial resources for production, analysis and dissemination of statistics; - (ii) absence of a classical and ongoing staff training plan; - (iii) limited territorial coverage: National Statistics institute (INS) represented in only 8 out of 11 provinces at headquarters while decentralization requires implementation in all the 26 future constitutional provinces; - (iv) absence of laws and regulations defining collaboration between the INS (central organ of the SSN) and other producers of statistics. - Government undertakings to meet needs for steering the economy and monitoring the GPRS and the MDGs: - establish and operationalize a National Statistics Development Strategy (SNDS) to develop an integrated information system. - SNDS development actions: - (i) conduct a population census and wide household surveys; - (ii) develop statistical tools for steering the economy (national accounts, Outlooks of the economic situation, etc.); - (iii) reactivate administrative statistics in several key sectors; - (iv) establish the IMIS Base (Integrated Information Management System) to consolidate results of major surveys and facilitate access to data (web interface). - Box 10 — DRC Statistics: problems of data comparability (summary of key points) - Last census was in 1984; list of administrative bodies with population sizes (sampling frame) has never been updated since then. - Sampling for household surveys relies on growth assumptions and projections, affecting quality and accuracy of data. - Surveys and routine data sources differ in methodology and quality (example: MICS and EDS differ), creating comparability problems. ### Restructuring the Central Bank of Congo - Background: - Since 2004 the Central Bank of Congo began an internal restructuring and reform plan; it designed a five year strategic plan (2004 to 2009) "Strategic Development Plan for the Central Bank of Congo and the National Financial System." - Organizational changes: - General organizational chart amended on 12 June 2009 to increase service efficiency, improve decision making, delegate powers, decentralize management, strengthen outreach monitoring, and promote horizontal collaboration. - Advantages from restructuring: - (i) reduced workload of Senior Management by establishing two Directorates: one for Monetary Policy and Bank Operations (reporting to the Governor) and one for Administration and Technical Services (attached to the Vice-Governor); - (ii) development and implementation of the Strategic Plan by a dedicated Department of Change; - (iii) establishment of a Division solely responsible for compiling statistics; - (iv) merged three former Operational Departments (Department of Foreign Services; Department of Credit and Financial Markets; Department of Current Accounts in National Currency and Public Funds) into a single Department of Banking Operations and Markets to ensure consistency of transactions in national and foreign currencies; - (v) autonomy of the legal function by upgrading the Legal Sub-Department to a Department. - Governance structures established or reorganized: Audit Committee and Governance Committee, Monetary Policy Committee, and the Management and Strategy Committee. - Other considerations: refocusing Bank activities on core missions required reflection on appropriate withdrawal assumptions for the Mint and the Hospital Centre. - New Strategic Plan 2010-2013 objectives: - (i) strengthen governance of the Bank to ensure transparency and accountability; - (ii) strengthen institutional capacity of the Bank to provide quality services to stakeholders; - (iv) promote development of the national financial system. ### Pillar 2: Diversifying the economy, accelerating growth and promoting employment (overview) - Pillar focus: wealth creation and infrastructural development to support production activities and revitalize them; includes trade and employment promotion policies. - Strategy: define potential of production sub-sectors, facilitate access to markets and production channels, conduct feasibility studies for creation and localization of new poles. - Successful implementation depends on strengthening governance (pillar 1), environmental protection and fight against climate change (pillar 4), and equal access for women and men to resources, benefits, management and control of growth areas. ### Boosting agriculture; food security and rural well-being - Historical decline and current dependence: - agricultural productivity dropped by 60 percent between 1960 and 2006. - agricultural exports currently account only for 10 percent of GDP as against 40 percent in 1960. - the country depends on importation of food products: 400,000 tons of cereals, 120,000 tons of frozen fish and more than 50,000 tons of frozen chicken and variety meats a year. - Government vision: revitalize rural productive structure via modern agro-industrial production, strengthen small-holders, and protect natural resources. - Implementing framework: - harmonized strategy of the agricultural and rural sector adopted in April 2010. - strategic areas include: - (i) improving access to markets and rural infrastructure and marketing capacity building; - (ii) developing crop, livestock, fisheries and handicraft production; - (iii) strengthening governance, institutional capacity and human resources; - (iv) organizing the rural sector into self-administered structures and providing funding for the sector. - Government adopted the Comprehensive African Agricultural Development Program (CAADP) in March 2011 to cope with the food crisis. - A National Agricultural Investment Plan (PNIA) will be developed as the sector's priority intervention framework. - Key actions by strategic area: - Improving access to markets and rural infrastructure: - build access roads to consumption areas, storage and conservation facilities, treatment and product processing infrastructure, water and electricity supply, housing and socio-cultural infrastructure, and rural markets. - develop and strengthen market and price information systems. - Developing crop, livestock, fishery and handicraft production: - promote access to improved seeds and high performance breeding lines; - promote artificial insemination; - restructure agricultural organizations and research institutions; - set up agricultural training centers; - intensify agricultural mechanization; - facilitate access to inputs and land; - develop fisheries and aquaculture, cash and industrial crops, and progressively build up agricultural channels. - Strengthening governance and capacities: - in-depth institutional reorganization of ministries of Agriculture and Rural Development and other institutions through institutional reforms and material and human capacity building; - separate State and private sector roles, resize public sector, and reconvert streamlined staff from ministry restructuring; - strengthen coordination of interventions and revitalize the sector thematic group. - Organizing rural world and financing the sector: - promote participatory assessment of community organizations to support decentralization and local development; - relaunch rural outreach and access to information, promote feminine community organizations and rural youths. - recommended financing mechanisms: - (i) credit unions, mutual insurance companies, cooperatives of micro-credits, micro-finance institutions; - (ii) National and Provincial Agricultural and Rural Development Funds (FNDAR) and CCAs; - (iii) basic financing mechanisms from foreign resources under the guarantee of the FNDAR. *Growth and Poverty Reduction Strategy Paper – GPRSP 2* ### 195. Congolese territory remains partially locked; only the airline helps to reach all provincial ### 195. Congolese territory remains partially locked; only the airline helps to reach all provincial capitals ### Transport infrastructure: current state and government strategy - National road network: 152,400 km long with only 2 percent of paved sections; advanced state of dilapidation. - Priority roads of general interest: 30,786 km with 25 percent of roads in good condition, 16 percent in average condition and 59 percent in poor condition. - Agricultural road network: 86,821 km with only 11 percent in good condition. - Road transport exploitation dominated by small informal businesses results in generally very high costs to users. - National railroad network: 5,033 km long, of which 858 km are electrified; network in very bad state due to lack of routine maintenance and rehabilitation. - Inland waterways: 16,238 km facing navigability problems caused by absence of dredging and inadequate investment in infrastructure, particularly beacons; exploitation dominated by private operators. - Rural settlement pattern: population scattered in micro villages of 10 – 20 – 30 houses, impeding cost-effective provision of basic services. Government vision and sectoral strategy - Vision: ensure national mobility to support economic growth and national security through transport economic policy reform to achieve a modern transport system. - Strategy components: - Modernize institutional and regulatory framework of transport and sub-sectors. - Transform public transport companies into commercial companies to make them competitive, reliable and capable of providing regular and quality services. - Implement public-private partnerships to mobilize significant financings for infrastructure and equipment. - Upgrade technical staff of companies and the administration. Road sector intervention strategy and priorities - Intervention actions: - Rehabilitate old asphalt roads and construct new roads, particularly the Kinshasa-Lubumbashi-Bukavu-Goma-Kisangani major roads and Batshamba in Kananga to open Center and East provinces. - Reopen ground networks that remained closed to restore traffic. - Protect and maintain roads in good condition, instituting manual road mending in rural areas. - Capacity building of organizations managing road networks. - Three priorities: - Maintain roads by consolidating the National Road Maintenance Funds (FONER) and mobilizing manual road mending. - Continue investment plans by rehabilitating major road corridors and rural roads necessary to access agricultural markets. - Reform public operators of the sub-sector. - Urban roads: emphasis on Kinshasa and rehabilitation/upgrading of roads in all administrative centers and other major cities. Rail, air, and water transport priorities - Railway: financial and operational restructuring of the SNCC is the great priority; a comprehensive recovery plan is committed. - Air transport: priority on improving airport infrastructure and equipment and improving and disseminating regulatory framework on civil aviation and air safety. - Water transport priorities: - Development of inland waterways. - Rehabilitation of river banks. - Realization of major port investments, with construction of deep seaport in Banana at the top of priorities. Sector governance and company restructuring - Pursue reform of other public transport companies using new organizational provisions; develop a governance plan applicable to the entire sector. - Specific restructuring and emergency equipment acquisitions planned for Inland Maritime Company (CVM), Air route Company (RVA), Commercial Company of Transports and Ports (SCTP), and Board of Inland Waterways (RVF). - Regulatory measures to establish an enabling environment for public-private partnerships and improve compliance with international and regional standards. - Promote consideration of the environment in the sector. ### Increasing electricity production and improving population’s access to electricity - Installed power: constitutes only 2.5 percent of hydropower potential estimated at over 100,000MW; nearly half of potential is down due to lack of maintenance and renovation. - Transportation and distribution systems: capacity insufficient; electricity production does not meet national demand and supply is subject to several power cuts. - SNEL: National Electricity Company experiencing very serious financial difficulties due particularly to non-payment of State arrears and parastatal services. Government policy and objectives - Aim: meet national energy needs by developing electricity production, improving population access to electricity, increasing electricity exports to the sub-region and developing renewable energy (green energy). - Means: reform and liberalization of the sector (production et/or distribution) and increased public and private investment. - Planned measures: - Complete restructuring of SNEL. - Enact electricity code and set up a Regulatory Authority. - Strengthen electricity interconnection with neighboring countries, particularly with the SAPP. - Rehabilitate hydroelectric plants and existing transmission and distribution infrastructure. - Construct new energy infrastructure and extend distribution network to new cities. Rural electrification and projects - Create a National Electrification Agency and a National Electrification Fund to increase access in rural areas and secondary cities. - Planned hydroelectric projects: Kakobola, Grand Katende, Zongo II and Ivugha. - Mega projects planned: Inga III and Grand Inga and other development projects among the 213 other hydroelectric sites already identified. - Promotion of renewable energies: set up legal framework and develop projects in solar (towns of the territory), wind and biomass energies and energy generation from gas (e.g. methane gas from Lake Kivu). ### Developing the Post, Telecommunications and Information and Communication Technologies sector - Postal networks and fixed telephony (mainly public companies) could not resist mobile telephone development due to lack of infrastructure, financial resources and strategic vision. - Coverage: estimated at 50 percent of the territory and 20 percent of the population. - Internet access: very limited; DRC not yet connected to the global network of submarine optical fiber cables. - Regulatory framework: model for mobile telephony was never established; private operators developed their own networks. Government vision and strategic themes - Vision: significantly improve contribution of Post and ICT to economic and social development per the Development Strategy of Telecommunications and ICT (July 2009) and the Comprehensive Plan of Postal Reform and Development (PIDEP). - Strategic themes: - Strengthen regulatory and institutional framework. - Develop networks and services of post and telecommunications. - Develop information and communication technologies. Planned regulatory and infrastructure actions - Regulatory and institutional actions: adapt legal/regulatory framework, distribute institutional roles, adapt licensing systems, increase regulation, plan and manage radio frequencies, assess sector and implement universal access. - Network and services development: restructure SCPT (e.g. OCPT) and RENATELSAT, implement a national broadband network and secure international broadband access. - ICT development: set up institutional framework for ICTs, computerize State services, build capacities of companies and the population. ### Promoting tourism - Biodiversity: DRC among 16 countries qualified as haven of mega biodiversity. - Example: Virunga National Park tourism generated more than 150,000 dollars in visiting rights of gorilla families for the month of August 2010. - Constraints limiting tourism: - International “image” of the country. - Cost of visas and various harassments, particularly in airports. - Insufficiency of hotel infrastructure despite increase from 936 in 1998 to 1,774 in 2010. - Dilapidation of reception infrastructure and lack of maintenance of touristic sites. - Difficult access to touristic sites. Strategic goal and planned actions - Goal: promote all forms of quality tourism (ecotourism, social, cultural, scientific, sports, business). - Planned actions: - Implement institutional reform and capacity building for stakeholders (National General Secretariat, National Tourism Office, Provincial Administrations). - Develop and implement Integrated National Master Plan for tourism development. - Establish integrated database on tourism information with adequate computer equipment. - Promulgate and extend framework law organizing tourism. - Improve and implement regulatory framework. - Rehabilitate hotel infrastructure, touristic sites and natural reserves. - Secure touristic sites. ### Promoting other areas of the tertiary sector - Government will promote tertiary activities supporting industries and administration (security, cleaning, gardening, mail delivery, etc.) to encourage private company creation and contribute to reducing unemployment. ### Revitalizing productive capacity — Forestry sector - Forest area: about 155 million hectares or 66 percent of the national area. - Moist dense forests: 101 million ha. - Mountainous forests: 1 million ha. - Dry forests: 24 million ha. - Savannah mosaics: 29 million ha. - Forest services contribute formally and informally to national development: industrial and traditional wood products, non-timber forest products (game, traditional medicines, fruits and vegetables), and regulatory services (water resources, soil and land protection, ecosystem regulation). Current exploitation and comparative position - Only 12.4 million hectares of land effectively granted for exploitation to date, that is, less than 10 percent of the total forest area. Strategic goals and priority actions - Goals: - Increase forestry contribution to economic growth through sustainable forest and land development. - Ensure economic and social benefits for local populations and indigenous people. - Priority actions: - Sign forest concession contracts including specifications signed with local communities and indigenous peoples. - Install and operationalize National and Provincial Advisory Councils of forests. - Establish the Information System of Forest Management (SIGEF) to improve production, processing and dissemination of forest information. - Promote local processing activities, biomass energy production generally and wood energy in particular. - Clarify mechanisms of distribution of resources and competences among central and provincial administration levels per Article 122 of the Forest Code. - Strengthen cooperation mechanisms among sectoral ministries, forest concessionaires, local communities, indigenous people and Civil Society. - Support development of permanent production forests. - Strengthen forest control with support of the SGS and the Independent Observer of the Sector and invest in capacity building, equipment, technology and infrastructure. - Formalize and supervise operators of artisanal timber exploitation. - Publish legislative framework relating to community forest for granting forest concessions to local communities and/or indigenous people. - Launch the FLEGT process. - Support research organizations/institutions of the forestry sector. Box: Forestry Code - DRC Forestry Code: Law No. 011/2002 of 29 August 2002 classifies forests into three categories: - Classified forests: conservation vocation; managed by State through ICCN; management can be delegated. - Protected forests: vocation of socio-economic development; local community forests by custom; can be converted or obtain community concessions. - Permanent production forests: vocation of sustainable timber production; removed in the domain of forests protected at the end of a public inquiry. *195. Congolese territory remains partially locked; only the airline helps to reach all provincial capitals* ### 220. The Democratic Republic of the Congo (DRC) is among the world’s mining giants today. ### The Democratic Republic of the Congo (DRC) is among the world’s mining giants today. ### Mining sector — performance, constraints, and objectives - Findings - The DRC’s soil and subsoil contain enormous potentials unevenly distributed across the country. - In 2010, the DRC produced more than 460,000 tons of copper and over 90,000 tons of cobalt. - According to the statistics of the Central Bank of Congo, in 2010 the share of extractive industries constituted 45 percent of the GDP with 38.91 percent for the mining sector. - Only 14 percent of the national territory is geologically mapped. - In 2010, operating permits (421) constituted only 12 percent of exploration permit (3439). - The mining sector experienced a serious drop during the 90s due to mismanagement, political interference in parastatal mining companies, and inappropriate policies that did not encourage private investments. - Government objectives and policy measures - Relaunch mineral production to sustainably support economic growth, increase short term tax revenues and improve social and environmental conditions in mining areas. - Strengthen institutional capacities by: - Strengthening the legal and regulatory framework. - Modernizing the administration and organization of strategic planning. - Intensify geological and mining research to improve knowledge of the soil and subsoil. - Improve management for sustainable development (management of mining and developing social and environmental aspects of mining). - Organize hand-crafted and industrial mining; priorities in the craft sub-sector include: - Creation and supervision of cooperatives. - Continuation of institutionalization of traditional mining areas. - Support to transformation of traditional mining to semi-industrial mining. - Establishment of a system of traceability and certification. - Governance measures: - Provide means to mining administration and specialized services (CAMI, CEEC, SAESCAM, CTCPM). - Continue efforts to improve performance of mining revenue collection and ensure transparency of all samples taken. - Clarify respective interventions of the State and the provinces. - Fight against fraud and smuggling. - Transparency and access: - Commit to publish all mining contracts, the map of mining impacts and lists of mining permits. - Strengthen competitive access to abandoned and cancelled mining perimeters. - Environmental commitments: - Consider environmental issues through greater synergy with the Ministry of Environment and capacity building to enforce important regulations. ### Increasing the production of hydrocarbons - Findings - Hydrocarbon potential is considerable but largely underexploited; oil production remains stagnant since 1975, below 30,000 barrels per day. - Congolese sedimentary basins remain poorly investigated and mapped. - There exists only one refinery in the country which is at a standstill since 1999. - Storage, transportation and distribution operations are under public companies facing financial problems and insufficient infrastructure; the supply rate would be 70 percent today. - Government vision and priorities - Propel the DRC among hydrocarbons producing African countries to favor growth, reduce the country’s energy deficit, improve domestic supply of hydrocarbons, and start production of bio-fuels. - Strengthen the legal and regulatory framework, improve administration of the oil sector, and modernize oil exploitation while focusing on environmental protection. - Specific intentions: - Update the policy letter of the oil sector; clarify and publish the legal and regulatory framework and oil agreements and the map of blocks on the website of the Ministry of Hydrocarbons. - Grant oil exploration and exploitation rights according to the principle of competition and in accordance with good international practices. - Priorities: - (i) strengthening exploration and prospecting; - (ii) starting the production of natural gas; - (iii) improving the transportation, storage and distribution network; - (iv) updating public companies of the sector and improving processing capacities; - (v) establishing a policy and regulation framework of the sector. ### Promoting industries — diagnosis and strategy - Findings - Deindustrialization led to disappearance of several key industries (textiles and clothing, automotive assembly, food processing, batteries) and significant job losses. - The share of industry in GDP dropped from 37 percent in 1970 to less than 4 percent in 2010. - Main constraints: deficiencies and dysfunctions in supply and electrical price setting, transport system shortcomings and market fragmentation, insufficiency of supply and conditions of granting credit, and shortcomings in the business climate. - Priority sectors and government vision - First priority sectors: food processing (cassava, palm oil, processed fruits, fishing), building materials (cement, processed wood), mining and metal recovery (iron, copper, aluminum), and packaging as a support sector. - Vision (DPSI, August 2011 version): contribute to an industrialized, diversified, productive, competitive economy integrated in regional and foreign trade, based on development of resources and potentials, modern and environmentally responsible industries. - Seven policy areas: - (i) building industrial capacities and skills; - (ii) developing standardization and patent rights; - (iii) supporting preservation of existing industrial base; - (iv) developing industrial areas; - (v) promoting environmentally friendly industrial development; - (vi) strengthening institutional capacities of the Ministry of Industry and support structures; - (vii) promoting effective synergy and vertical and horizontal integration between industry and upstream/downstream sectors. - Implementation measures - Promote creation and rehabilitation of agricultural production units, green industry and industrial waste management. - Create productive job opportunities for youth and women. - Strengthen financing mechanisms of the productive sector. - Promote electric power and renewable energies. - Organize distribution channels and markets for manufacturing industries. - Strengthen institutional capacities to deploy effective synergy with other sectors. ### Promoting foreign trade - Findings - The DRC depends heavily on foreign trade; trade constituted almost 80 percent of the national GDP in 2010. - Exports accounted for 45 percent of the GDP in 2010; exports are not sufficiently diversified and are largely mineral products. - Imports are mainly manufactured products and foodstuff. - Barriers to exports include non-tariff measures, particularly quality standards. - The current account still shows a deficit. - DRC is formally compliant with most WTO provisions but faces many actual barriers to trade; absence of an adequate legal framework. - DRC is signatory to regional agreements (SADC, COMESA, ECCAS) without implementing free trade agreements. - Government vision and measures - Create a regulatory, tax, and institutional environment to open national territory and integrate in regional and international trade circuits. - Rationalize participation in regional agreements and study participation in the tripartite free trade zone among COMESA, EAC and SADC. - Four main goals: - (i) promoting trade and diversifying exports of manufactured goods; - (ii) increasing national production of foodstuffs to reduce imports; - (iii) consolidating markets of the DRC; - (iv) strengthening monitoring of trade regulations to better participate in the multilateral trading system. - Specific short-term and medium measures: - Boost growth areas that dominate national exports (EDIC). - Train and sensitize farmers on standards, conservation, packaging and creation of labels. - Support non-traditional export sectors (cattle, fruits and vegetables) with cross-cutting and sectoral measures. - Cross-cutting measures: regulatory, pragmatic, and institutional, including improving business climate. - For trade regulation and standards: - (i) accreditation and upgrading of certification laboratories; - (ii) membership in the international convention for plant protection (CIPV); - (iii) establishment of a new phytosanitary and animal health regulatory framework; - (iv) setting up an SPS national committee and an information focal point on SPS measures; - (v) support for product quality; - (vi) establishment of an information point and notification of existing industrial standards. - Under GATS, commitments made in service sub-sectors: (i) construction and related engineering services; (ii) communication services, services provided to companies; (iii) educational services, tourism and traveling services; (iv) recreational, cultural and sporting services. Extension of commitments should improve credibility, predictability and transparency and attract capital. ### Promoting employment — challenges and strategic areas - Findings - Employment is a major concern; Survey 1-2-3 of 2005 shows most poor people are unemployed or under-employed. - High number of child laborers and high rate of unemployment among the population range of 15-35 years. - Government vision and strategic areas - Ensure full employment and equal opportunities for all, including women and youths, and find decent and productive employment. - Base employment policy on achievement of the Millennium Development Goals (MDG) and promotion of the private sector through improving the business environment and public investments, particularly infrastructure. - Four strategic areas: - (i) placing employment at the center of macro-sectoral concerns; - (ii) increasing the provision of decent jobs and developing the private sector; - (iii) improving the employability of target populations and vocational training; - (iv) organizing the information system and improving the functioning of the labor market. - Key priorities and measures - Place employment at center of macro concerns — four priorities: - (i) increase the level of public investments in Highly Labor Intensive (HIMO) projects and programs; - (ii) facilitate access to benefits of the code of public investments in job-creating private investment projects; - (iii) integrate a significant weight of the “employment” criterion in the award of public contracts; - (iv) strengthen the Employment Promotion Unit in Public Investments (CPEI). - Increase supply of decent jobs and develop private sector — priorities for next five years include: - (i) removing institutional constraints to development of private companies; - (ii) developing an action plan for promotion strategy of highly labor-intensive approaches in public investment programs; - (iii) setting up a conducive framework for decent wage job creation; - (iv) creating incentives necessary for wage job creation; - (v) establishing mechanisms favoring creation of small units that generate jobs and resources; - (vi) developing specific programs for vulnerable populations and establishing legislation on microfinance sensitive to gender equality; - (vii) creating the National Employment Fund (FONEM) decentralized to Provincial Employment Fund (FOPEM); - (viii) promoting long term employment of the unemployed and establishing a first job negotiated convention among stakeholders; - (iv) promoting small and medium size enterprises of youths and strengthening their job-creation capacity; - (x) promoting the spirit of corporate culture for youths. ### Box 12 — Job creation and achievement of MDGs (simulations and projections) - Contextual findings - Relation between growth and employment evidenced by Okun Law (1962); in Sub-Sahara Africa during 1995-2003 elasticities: 0.4 for agriculture, 0.6 for industry and 1.05 for services. - Studies show: (i) enrichment of growth in employment is indispensable to fight poverty; (ii) growth may be job killer if technological progress is not labor intensive; (iii) measures directly affecting growth are less favorable to employment than measures indirectly affecting growth (Yogo, 2010). - Simulation results (impact of implementing GPRSP 2 on employment) - Implementation of projects, programs and reforms contained in the GPRSP and its Priority Action Program will be expressed by creating about 4 500 000 jobs over the 2011-2015 period, or an average of 900 000 jobs per year. - Simulation of the number of jobs created per sector (selected aggregates as presented): - Total jobs created by year: - 2011: 719 079 - 2012: 706 207 - 2013: 1 153 502 - 2014: 923 928 - 2015: 979 743 - Total (2011-2015): 4 482 459 - Sectoral totals (2011-2015): - Primary sector: 1 531 894 - Secondary sector: 372 787 - Tertiary sector: 2 577 778 - Administration: 771 360 - Number of persons brought out of poverty (yearly and total): - 2011: 680 916 - 2012: 2 514 063 - 2013: 2 496 178 - 2014: 2 838 209 - 2015: 2 711 469 - Total (2011-2015): 11 240 836 - Number of persons brought out of poverty by jobs created (displayed per year): 1 4 2 3 3 3 - MDG-related direct job creation projections (2011-2015) - The achievement of the MDGs will enable the Government to create at least 780 000 direct jobs over the 2011-2015 period, primarily in health, primary and nursery education and the agricultural sectors (including fisheries and livestock). - Evolution of direct jobs created through MDG implementation (by sector, yearly and totals): - Health: - 2011: 71 845 - 2012: 68 836 - 2013: 65 926 - 2014: 63 257 - 2015: 60 645 - Total (2011-2015): 330 508 - Nursery and Primary Education: - 2011: 82 435 - 2012: 84 653 - 2013: 88 162 - 2014: 88 959 - 2015: 91 829 - Total (2011-2015): 436 038 - Agriculture: - 2011: 2 189 - 2012: 2 491 - 2013: 2 799 - 2014: 3 115 - 2015: 3 438 - Total (2011-2015): 14 031 - Total direct jobs created (by year and total): - 2011: 156 469 - 2012: 155 979 - 2013: 156 887 - 2014: 155 330 - 2015: 155 912 - Total (2011-2015): 780 578 *Source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts provided).* ### 243. Improving the employability of targeted populations and develop vocational ### 243. Improving the employability of targeted populations and develop vocational training. ### Improving employability and vocational training - Priority actions the Government intends to carry out: - (i) establish mechanisms to ensure the adequacy of supply and demand of competence; - (ii) implement measures that can help workers and companies to adapt to change and improve their competitiveness; - (iii) implement measures to acquire and maintain skills towards satisfying future needs of the labor market; - (iv) develop training courses through a reformed learning. ### Improving the information system and governance of the labor market - Government intends to strengthen the intelligence capabilities of the changing labor market (supply and demand) through: - (i) capacity building of the staff of the National Employment Office (NEO); - (ii) improving social dialogue through its extension to employers, trade union representatives, social organizations of youths, women, the unemployed and all vulnerable groups; - (iii) establishing a system of treatment and management of job applications by private employment agencies; - (iv) creating effective labor courts to improve governance of the labor market. ### Developing the country and cities (paras 245–254) - Urban economy and growth: - The sectors of construction and public works, trade, transport and telecommunications and services increased from 35 percent of the economy in 2003 to 42 percent in 2008. - Agriculture (characterizing the rural world) dropped over this period. - Urbanization projections and challenges: - It is estimated that 40 million people will live in cities by 2025 with 15 million in Kinshasa. - Main characteristics of Congolese cities: uncontrolled population growth, sprawl, recognized isolation; many cities are in decline and more expensive to manage. - Most urban growth occurred without connection to infrastructure or access to basic services; level of infrastructure remains the same as in 1980 for a population three times larger, creating serious urban poverty. - Government responsibilities and actions: - City management should return to councils; the State must bring order to the plethora of services, establish real measures for urban management, ensure security of tenure, work with the private sector and grassroots communities, and develop trading tools (markets, railway stations, etc.). - All urban policies must be done in conjunction with broader territorial planning. - State policy measures: - (i) develop and implement the National Policy on Land Management and the National Scheme on Land Management to reduce provincial and socio-economic disparities and open up the country for balanced development; - (ii) fit into regional development for a more harmonious regional and international market; - (iii) promote business areas related to population concentration areas; - (iv) improve the living environment of the population; - (v) better manage and enhance the natural resources of the DRC and establish industrial fabrics throughout the provinces; - (vi) promote food self-sufficiency and access to social services (water, electricity, etc.); - (vii) improve the environment and the ecosystem. ### Formalizing the informal sector (paras 250–251) - Background and size: - The global economic downturn of the 70s led to a sharp deterioration of terms of trade and, with the collapse of public authorities, the informal sector rescued the population. - Today, the informal sector may constitute more than 80 percent of the economy in diverse sectors like transport (toleka, wewa ...), sewing, hairdressing, trade. - The informal sector is a vector of growth and social cohesion and serves as a host platform for economic agents excluded from the formal sector. - Constraints and government intent: - The informal sector is an obstacle to faster development and reduces the tax base, discouraging private initiative in the SME/SMI formal sector. - The sector suffers from lack of long-term vision and supervision. - Government intends to take advantage of the potentials offered by the informal sector (creativity, entrepreneurship, and a fertile ground for a new form of autonomy). - Government intends to conduct studies to gradually build the transition from informal economy to formal economy through policies and strategies enabling the informal economy to achieve job creation, the fight against poverty and the extension of social security coverage for all. - Review of legal and regulatory provisions in the informal sector is the prerequisite for formalization. ### Promoting spatial development (paras 252–253) - Growth Pole approach: - Spatial development through "Growth Pole" aims to lay foundations for sustainable job creation and food security through an integrated and multisectoral approach. - Implementation of a Growth Pole Program is presented as an opportunity to accelerate reconstruction and economic recovery based on provincial poles, corridors and growth centers to create rapid and sustainable jobs. - Goals of the Growth Pole Program: - (i) accelerating economic, social and geographical integration; - (ii) developing a domestic market and improving food security; - (iii) promoting the dissemination of enhanced and inclusive growth; - (iv) stimulating industrial innovation and competitiveness; - (v) optimizing spatial development throughout the national territory; - (vi) strengthening decentralization and governance. - Implementation approach: - The program will be implemented gradually on the basis of a long term approach with the possibility to depend on fast-result initiatives (Quick wins) to boost stakeholder confidence. ### PILIER 3. IMPROVING ACCESS TO BASIC SOCIAL SERVICES AND STRENGTHENING HUMAN CAPITAL (paras 254–266) - Pillar focus: - Allow access to quality basic social services to all and provide the DRC with well educated and healthy human resources. - Based on five major priorities: strengthening human capital, fighting against HIV/AIDS, reducing inequalities, improving the living environment of populations and promoting community dynamics. - Strengthening human capital is based on education and health (including nutrition); social protection, culture and sports are also concerned. - Government undertakes to: - (i) clarify institutional mechanisms of ministries in charge of education; - (ii) operationalize a framework for planning and evaluation of national education; - (iii) gradually increase the budget share of education to achieve 25 percent of the national budget by 2016. ### Education and vocational training — Key findings and indicators (paras 256–266, 267–270) - Access and exclusion: - An estimated 7.6 million children aged 5-17 years are still excluded from the education system. - Pre-school (PSB): - Pre-school education remains optional, very expensive and is mainly organized by the private sector which has 64.6 percent of schools. - The gross enrollment rate for pre-school is 3.2 percent in 2009/2010, which recorded a drop of 0.6 percent. - Primary education: - Several schools lack minimum equipment, latrines, potable water and electricity. - According to 2009/2010 statistics, 33 percent of classes are in trodden earth, 8.7 percent in straw and 22.4 percent in semi-permanent material. - For entry into primary schools, children of legal age constitute only 50 percent of successful candidates. - Overall participation rate is 90.8 percent, but only 56.7 percent of children complete primary education. - Girls constitute 46.3 percent of enrollments; women constitute 27.4 percent of enrollments of the teaching staff. - School fees paid by parents are a major barrier to schooling for children from poor households. - General secondary education: - Gross enrollment rate is 36.5 percent overall. - Girls are 26.4 percent educated against 46.2 percent for boys. - Only 25.3 percent of students complete secondary school with 15.9 percent for girls. - A little over 65 percent of teachers are under-qualified. - Technical and vocational education: - Technical and vocational education constitute 19.7 percent of students enrolled in the secondary sector. - Challenges include absence of curricula, inadequacy to job market needs, dilapidated facilities and lack/aging of qualified teaching staff; the sub-sector has a bad reputation. - Higher education and research: - Number of students increased from 240,000 in 2006 to over 300,000 in 2009, with about 75 percent in the public sector. - Closure of over 800 institutions at end of sustainability audits carried out in 2009 improved trends. - Parity index stands at 0.45; parity is very low in engineering (0.22). - The City Province of Kinshasa and the Katanga Province constitute close to 55 percent of students in the country; these two entities have 79 percent of official teaching positions. - Scientific research suffers from precarious financing, insufficient critical mass of researchers, brain drain, decay and inadequacy of equipment, and inadequate research and development. - Literacy: - Illiteracy rate estimated at 30.2 percent (17.5 percent for women and 42.8 percent for men). - DRC ranked among the 30 countries at serious risk of not achieving the adult literacy goal by 2015 (2006 global monitoring report on Education For All). - Focus should be on literacy and informal education of youths and adults. ### Government vision and sector strategies - Government’s vision in education: - Train competent men and women, filled with human values and capable of contributing to economic growth, the fight against poverty, the promotion of peace and active democratic citizenship. - Development Strategy of Primary, Secondary and Vocational Education 2010/11-2015/16 (adopted March 2010) targets three strategic goals: - (i) increasing access, affordability, equity and retention in different levels of education, particularly basic education; - (ii) improving the quality and relevance of education; - (iii) strengthening governance of the sector. - Measures to ensure universal access to basic education: - Promote obligatory and free primary education progressively by: - (i) progressively abolishing school fees; - (ii) identifying and integrating children excluded from school; - (iii) reducing geographical disparities and inequalities between sex and social groups; - (iv) increasing capacity; - (v) supporting local communities for pre-school educational development to facilitate transition to primary education. - To improve quality and relevance: - (i) improve internal efficiency through quality standards; - (ii) revise and implement a strategy to upgrade the teaching profession; - (iii) develop a national policy of production and distribution of educational materials; - (iv) update curricula and their take over by the teaching staff. - To strengthen governance: - (i) support and implement decentralization of the education system (decentralized capacity building of planning and programming); - (ii) update the school map by involving provincial executives and improve financial management (development of a management and control mechanism of resources allocated to decentralized entities and schools); - (iii) restructure the Control Service and Payroll of Teachers (SECOPE); - (iv) improve reliability of sectoral data by operationalizing the Information System for Educational Management (SIGE); - (v) improve school management by strengthening stakeholder involvement. ### Literacy and informal education — Accompanying measures to free primary education (Box 13) - Free primary education approach: - Progressive suppression and complete take over by the State of school fees paid by households, including school fee promotion and forms, school insurance premium and TENAFEP participation fees (End-of-Primary School National Test). - The State will assume responsibility for the functioning of schools and management offices. - Measures towards medium-term suppression of motivation costs: - Government embarked on the standardization of wage areas, and will proceed to: - (i) identifying the teaching and administrative staff; - (ii) the complete mechanizing of all teachers. - This provision would enable gradual reduction of motivation costs in rural areas in particular and contribute to reducing geographical disparities and gender inequalities and promote integration and orientation of those excluded from the school system. - Implementation timeline for fee suppression: - Implementation began with the suppression of direct fees paid by households from the first to the third year of primary school from the 2011 school opening (except in Kinshasa and Lumumbashi). - The generalization of the measure can be achieved in 2015/2016. *Growth and Poverty Reduction Strategy Paper – GPRSP 2* ### 271. The DRC Government is finalizing a new policy on literacy and informal education. This ### _cr13226 - 271. The DRC Government is finalizing a new policy on literacy and informal education. This ### Literacy and informal education — strategic areas and priorities - Three strategic areas proposed: - (i) increasing access, affordability and equity - (ii) improving quality, relevance and effectiveness of literacy and informal education programs - (iii) strengthening governance - Priorities to increase access, affordability and equity: - (i) capacity building of host structures in charge of literacy - (ii) involvement of local communities in organization of literacy and informal education activities through capacity building of organizations and community facilitators - (iii) intensification of sensitization campaigns of the population and literacy and informal education actors - Efforts to improve quality, relevance and effectiveness: - (i) harmonization, dissemination of programs and translation into national languages - (ii) training of trainers on planning, management and monitoring-evaluation - (iii) development and provision of training materials, including specific aids in national languages and for women - (iv) capacity building of humans, equipment and financial intervention to meet efficiency requirements both at the central and decentralized levels - (v) intensification of learning and vocational training actions in rural areas, particularly for women - Governance actions (cross-cutting): - (i) improving the information system and managing the literacy sub-sector (producing and disseminating directories) - (ii) developing a particular statute for teachers of informal education - (iii) developing strategy and promoting the literacy of young girls and women and any other vulnerable group - (iv) setting up an integrated institutional framework to better coordinate interventions ### Higher and University Education — strategic orientations and actions - Four guiding themes: - (i) improving governance - (ii) improving quality, effectiveness and adequacy of Training – Employment - (iii) revitalizing research and renewing professorial resources - (iv) promoting equity (gender, provincial disparities, disadvantaged population, moral values) - Governance improvements: - (i) revive the system by pursuing viability audits - (ii) strengthen the information system for strategic planning and result-based management - (iii) simplify the legal and administrative framework - (iv) set up management instruments and external evaluation mechanisms - (v) establish performance contracts with Higher Education Institutions (EES) - Quality, effectiveness and Training–Employment actions: - (i) establish quality insurance cells for self-assessment in EESs - (ii) establish an evaluation agency of quality insurance - (iii) develop and restructure specific institutions for engineering, technical and vocational sectors in growth poles and sectors - (iv) rehabilitate and equip infrastructure to renew courses and programs as part of securing the Bologna process - (v) penetrate ICTs in EESs - Revitalizing research and renewing professorial resources: - (i) granting scholarships to doctoral candidates - (ii) enhancing postgraduate studies and University Press of the Congo - (iii) establishing a competitive research fund - Promoting equity: - (i) granting scholarships to girls who take up engineering, technical and vocational courses - (ii) reduction of university disparities in terms of allocation of official teaching positions and means - (iii) access to higher education for disadvantaged populations ### Scientific research — vision, goals and capacity building - Government's three main goals for scientific and technological research: 1. Building institutional capacities through: - (i) developing the scientific and technical potential - (ii) developing sectoral strategy - (iii) updating legal and regulatory texts - (iv) finalizing the Strategic Development Plan for science, technology and innovation - (v) finalizing the national scientific and technological program - (vi) organizing a round table of donors 2. Building research supply capacities through: - (i) improving research infrastructure (equipment and rehabilitation of buildings hosting central organisms and services) - (ii) developing capacities of researchers - (iii) building new research centers and poles 3. Strengthening the supply of scientific, technical and innovative knowledge through: - (i) carrying out studies in key areas of life - (ii) appreciating research results - Emphasis on creating synergy among research institutions under the Ministry, higher and university education institutions and private organizations - Research must be cross-cutting, affecting education, agriculture and food security, energy, health, environment and natural resources, industry, mines, water, ... ### Improving health condition and nutritional status — assessment and strategic plan - Situation and challenges: - Health indicators in the DRC remain below the average of Sub-Sahara African countries with significant residential and provincial disparities - Contributing factors: low equipment of health institutions, insufficient availability of inputs, irrational management of human and financial resources, and inadequate and fragmented financing - Major challenges: improving maternal health and fighting endemo-epidemic diseases - Sector strategy update: - In March 2010 the Government updated its sectoral strategy (Strengthening Strategy of the Health System) and declined it in a five-year plan, the National Development Plan for Health 2011-2015 - General goal: contribute to the improvement of the health condition of the population within the context of the fight against poverty by focusing on access to quality primary healthcare services and the fight against major diseases like malaria, tuberculosis, onchocerciasis, trypanosomiasis, malnutrition, HIV/AIDS and non-transmissible diseases - Four priority program areas (2011-2015): - (i) progressive development of health areas and the continuity of care - (ii) supporting the provision of quality healthcare - (iii) strengthening leadership and governance - (iv) strengthening intersectoral collaboration - Health Zones (ZS) strategy: - Development of Health Zones is the basic strategy to ensure access to basic health services; ZS is the space in which primary healthcare services (PHC) are offered - Aim: improve population coverage by quality healthcare and streamline functioning of health training at all system levels; promote community participation and financial accessibility - Support to quality healthcare supply includes: - development of human resources for health - support to the drug sector - reforming the financing of health as part of the Kinshasa agenda on the effectiveness of aid - modernizing medico-sanitary infrastructure and equipment - strengthening the national health information system and new information and communication technology - improving health information management - Strengthening leadership and governance focuses on: - (i) developing and updating legislative, regulatory, strategic and normative frameworks through reforming and decentralizing the health sector - (ii) institutional capacity building and adaptation to the mission of the health sector in the context of decentralization - (iii) coordination at all levels of the sector - (iv) effective and efficient management - Inter-sectoral collaboration: - Establish consultation frameworks to promote dialogue with sectors (education, health, water, housing, employment, etc.) so they fully contribute to improving health - Emphasizes the role of the Ministry of Public Health (MOH) in developing and implementing related policies and strategies - Nutrition priorities (Strategic Nutrition Plan 2011 to 2015): - promotion of early and exclusive breastfeeding (0-6 months) and complementary feeding (6-24 months) - fight against micronutrient deficiencies (vitamin A, iron, iodine, etc.) - management of sick and/or malnourished children - integration of these activities in the minimum package of activities performed in the health area - Family planning priorities (post-National Conference, Kinshasa, December 2009): - family planning enables the reduction of one third of maternal mortality - priorities: - (i) increasing the coverage rate of family planning services - (ii) establish an integrated communication plan on family planning - (iii) regularly supply family planning services in inputs - (iv) advocate for the revision of unfavorable legal provisions to family planning - (v) involve the community in revitalization of family planning ### Promoting youth and sports — problems and GPRSP 2 priorities - Key problems: - insufficiency of managerial and youths’ vocational training and sporting infrastructure - mismatch between youths’ training and employment market needs - ignorance of youths on reproductive health and HIV/AIDS - precariousness of youth with various consequences - Government vision: promote youth and sports for a better future - GPRSP 2 priorities: - (i) developing the national policy of sports and recreation and establishing related activities - (ii) constructing infrastructure for informal education of youths meeting specific needs of girls and boys - (iii) establishing a national integration fund for youths - (iv) supporting establishment of coordination and channeling of actions of Technical and Financial Partners for monitoring youth involvement in the GPRSP - (v) constructing and rehabilitating sporting and recreational infrastructure ### Promoting culture and arts — problems, vision and strategic axes - Major problems identified: - (i) no or low perception of the place and importance of culture in national development - (ii) lack of a coherent national cultural charter and program of cultural promotion - (iii) absence of adequate infrastructure and industries - (iv) endangerment of tangible and intangible national cultural heritage - (v) lack of managerial policy and drop in the quality of arts and culture - Government vision: - (i) integrate the cultural dimension at all levels of development programs - (ii) recognize, preserve and enhance cultural values and identities to promote intercultural dialogue - (iii) recognize, preserve, enhance cultural heritage, support capacity building in this area - (iv) develop cultural industries and improve market access opportunities for cultural goods and services - Strategic axes for realization: - (i) strengthening institutional capacity - (ii) promoting cultural and artistic production towards changing mentalities and backward customs on the image of women, young girls and children - (iii) protecting creative works, authors’ rights and neighboring rights - (iv) preserving, promoting and enhancing national cultural heritage - Priority actions: - (i) developing a cultural policy and a national cultural charter - (ii) developing spaces, cultural sites and historical monuments - (iii) promoting cultural diversity and transmitting cultural values - (iv) establishing and/or encouraging creative projects of cultural industries - (v) fighting against anti-values - (vi) aiding creativity - (vii) strengthening capacities of different cultural operators, protecting the status of the artist and other cultural trades through specific laws and regulations, training and efficient supervision of talents ### Fighting against HIV/AIDS — vision, targets and strategic areas - Government commitment renewed under the National Strategic Plan for the fight against HIV/AIDS (PSNLS) 2010-2014 - Assessment: - Current trends indicate difficulty for the country to achieve the Millennium Development Goal of halting the spread of HIV/AIDS (MDG6) - Failure would negatively affect MDG4 and MDG5 (gender equality, infant mortality and maternal health) - Government vision: have men, women and children free of HIV/AIDS and healthy; the President’s wish of an AIDS-free generation by 2035 - Vision foundations: - (i) gender and human rights approach, equity and social justice to ensure equal access of vulnerable groups particularly women and children to treatment and care and community mobilization towards behavior change - (ii) universal access to HIV services consistent with international and regional commitments (MDGs, UNGASS, Zero2015 Strategic Goal of UNAIDS, the Declaration of Abuja, Maputo and Brazzaville) - (iii) consolidation of a national consensus and central priority status for AIDS in national instruments and sectoral policies - (iv) principle that AIDS is a multidimensional development problem requiring integration in national instruments and strengthening of multisectoral and integrated approaches - (v) search for complementarity, synergies and optimization of resources under the GPRSP - Specific targets stated: - eliminate the mother to child transmission by 2 percent - reduce new HIV infections by at least 50 percent - reduce postpartum infant and maternal mortality due to HIV by 90 percent - achieve ARV coverage by 90 percent by 2015 - Five guiding principles for a new national dynamic toward universal access: - (i) maintain AIDS as a development problem and national priority in national development instruments - (ii) national ownership, leadership and commitment in favor of AIDS - (iii) pragmatic and budgetary integration of HIV in the GPRSP and in other national instruments - (iv) strengthening involvement and empowerment of communities, basic community organizations, and Civil Society Organizations - (v) mobilizing and optimizing resources - Four strategic areas of the HIV/AIDS component of the GPRSP: - (i) reducing the transmission of STIs and HIV - (ii) improving universal access to care and treatment - (iii) mitigating the socio-economic impact of HIV and AIDS - (iv) ensuring support to the implementation of the National Strategic Plan *Source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (content unit _cr13226 - 271)* ### 302. Reducing the transmission of STIs and HIV. This first axis refers to four main ### 302. Reducing the transmission of STIs and HIV ### Main priorities for transmission reduction - Four main priorities: - (i) enhancing access to preventive services for high-risk populations; - (ii) reducing risky sexual behavior among vulnerable groups; - (iii) reducing the transmission of HIV through blood transfusion particularly by ensuring the quality of blood transfused and establishing blood banks; - (iv) reducing the transmission from mother to child (PTME). ### Improving universal access to care and treatment (Axis) - Objectives to ensure universal access to nutritional support, care and treatment including antiretroviral drugs to all people living with HIV/AIDS by: - (i) preventing and managing opportunistic infections; - (ii) supporting ARV; and - (iii) supporting psychosocial and community participation in management. ### Mitigating the negative impact of HIV/AIDS - Three identified priorities: - (i) reducing the socio-economic impact of HIV for people living with or affected by HIV (PV)/PAVIH; - (ii) promoting an environment fighting against stigmatization and discrimination; - (iii) caring for orphans and vulnerable children (OVC). - Focus on fighting vulnerability of PLHIV by targeting particularly jobless people and those experiencing risks of exclusion. ### Supporting implementation of the national strategic plan - Implementation requires accompanying measures in six directions: - (i) strengthening core systems for the fight against AIDS; - (ii) strengthening coordination structures; - (iii) sustainable financing of the fight; - (iv) improving resource management; - (v) producing and managing strategic information; - (vi) strengthening partnership; - (vii) enhancing access to viable and reliable information in and out of school. ### Integration and cross-cutting approach - AIDS positioned as a cross-cutting priority of the GPRSP; macroeconomic and social policies in the four pillars contribute to the fight and support convergence toward a generation without AIDS. - Strategic integration aims to: - optimize resources and facilities; - enhance synergies and complementarities; - improve targeting according to needs, priorities and comparative advantages of each sector. - Two levels of integration in national instruments: - improving the process of AIDS sectoral plans of key departments and integrating AIDS during revision or reformulation of their strategy or program; - specific integration of HIV in health services, particularly maternal and child health programs, reproductive health and family planning and immunization and nutrition programs. ### Mainstreaming HIV/AIDS in programming and implementation - Mainstreaming ensured through: - (i) implementing priority actions of strategic axes of the National Strategic Plan for the fight against AIDS at the national and provincial levels; - (ii) implementing and updating sectoral plans for the fight against AIDS at the central and provincial levels; - (iii) including AIDS in the MTEF and sectoral MTEFs; - (iv) assigning an HIV/AIDS budget line in the financing scheme of the GPRSP. - Roles and responsibilities of sectors are defined in the appendix “Institutional framework for implementation”. ### Financing the fight against HIV/AIDS — current situation and lessons - 2009 spending data (PNMLS): - overall spending stood at $18 6945 819 with 54 percent from households. - Out of the 46 percent institutional spending: - 98.9 percent came from foreign partners; - 0.87 percent from the private sector; - 0.19 percent from State budget. - Lessons highlighted: - (i) large deficits and financial deficiency between available resources and actual needs; these resources cover only close to 30 percent of requirements; - (ii) expenditure patterns: nearly 65 percent go to labor and 35 percent to institutional support and strengthening of systems for implementation; - (iii) problem of resource optimization and efficiency of expenditure, possibly linked to distribution criteria and lack of clear targeting of priority groups and areas. ### Financing strategy retained by the GPRSP given constraints - Financing pattern for the HIV component based on: - (i) allocating national financial resources by including a budget line for the fight against AIDS (PSNLS, Sectoral Plans and Provincial Plans); - (ii) allocating the budget line of each institution and each ministry for the response to HIV; - (iii) reflecting on the establishment of the tax system to generate additional resources (possible taxes include: taxes on pollutions, traffic offenses, tobacco and other products, communications, gambling, tourism, etc.); - (iv) establishing alternative financing mechanisms through micro-credit, mutual insurance companies and health insurance systems; - (v) promoting the role of the private sector; - (vi) integrating the component of the fight against HIV, AIDS and STIs during the formulation and evaluation of any development project or program particularly those of the sectors of infrastructure, transports, mines and rural development; - (vi) advocating for the mobilization of additional foreign resources. *Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpt).* ### 328. In the sub-sector of Potable Water in urban areas, increasing access to drinking water ### _cr13226 - 328. In the sub-sector of Potable Water in urban areas, increasing access to drinking water ### Potable water — urban sub-sector: objectives and reforms - Increase access in urban centers through: - vast programs of rehabilitation and extension of infrastructure; and - construction of new systems. - Any program or project to supply drinking water must be accompanied by a sanitation and hygiene component. - Reform measures for the Potable Water sub-sector in urban areas should include: - transformation and recovery of the REGIDESO in accordance with the decentralization and disengagement laws of the State. - Operational targets for the urban potable water sub-sector: - increase percentage of the population having sustainable access to potable water supply from 26 percent in 2010 to 40 percent in 2016. - increase in urban coverage from 39 to 52 percent. - increase number of existing business operation centers for the REGIDESO from 71 in 2010 to 94 in 2016. - improve network yield from 58 percent in 2010 to 75 percent in 2016. ### Potable water — rural sub-sector and hygiene priorities - Priority actions in rural areas: - strengthen territorial brigades of sanitation; - raise “sanitized villages and schools” to national level. - Measures to improve access to potable water in rural areas: - develop water sources and dig wells and boreholes; - use improved latrines; - maintain cleanliness of immediate habitation environment; - adopt correct hand-washing practice with a detergent (savon) at critical moments. - Rural coverage target: - increase rural access from 20 to 30 percent by 2016. ### Sanitation strategy and service delivery - Sanitation priorities: - develop a national strategy focused on capacity building of provinces and ETDs to assume responsibilities and find solutions adapted to each habitat and environment; - reorganize the sub-sector in accordance with decentralization laws; - promote hygienic latrines, waste management systems (liquid, solid and gaseous), and vector control; - emphasize education, information and communication for behavior change. - Infrastructure actions: - set up systems for collecting, transporting and processing solid waste (including landfills) in major cities. - MDG-related coverage targets: - MDGs target coverage of 71 percent and 55 percent respectively in potable water and sanitation. ### Promoting community dynamics — role in water, sanitation and local development - Rationale: - prolonged insecurity and slow decentralization led community organizations to provide basic social services including drinking water. - Identified constraints of community organizations: - (i) weak institutional capacity (lack of legal personality and authorizing administrative documents); - (ii) weak structuring from bottom to top; - (iii) lack of specialization; - (iv) weak human resource capacity for accompaniment and monitoring-evaluation; - (v) insufficient material and financial resources; - (vi) insufficiency of the culture of democratic management and accountability; - (vii) low mobilization of financing from citizens at home or abroad. - Four strategic goals: - (i) strengthen capacity of organizations of community dynamics; - (ii) improve governance in these organizations; - (iii) strengthen citizen control of public actions; - (iv) enhance resource mobilization to finance local development. - Government commitments to strengthen capacities and governance include: - facilitate acquisition of legal personality and business permits; - strengthen human, organizational capacities and consultation frameworks; - grant financial and logistical support for implementation, monitoring and evaluation; - pursue establishment of Local Development Committees and integrate youth in local committees; - promote democracy and accountability and develop administrative and financial management instruments; - strengthen decentralized frameworks for citizen planning and evaluation; - support mobilization of local and Diaspora resources and channel informal-sector financial flows toward savings and sustainable investments. ### Environment and climate change — context and strategic pillars - New pillar added to GPRSP-2 to address environment and climate change as structural elements of sustainable development. - Contextual facts and challenges: - estimated population of 70 million inhabitants with a population growth rate of 3 percent per annum; - 70 percent of the population live in rural areas; - significant decay of basic infrastructure and adverse post-conflict effects. - Pillar components: - (i) managing and protecting the environment and natural resources (sustainable management of the environment and renewable natural resources); - (ii) fighting against climate change (mitigation and adaptation). ### Managing and protecting renewable natural resources — forests, water, biodiversity - Forests: - policy to reap benefits via REDD+ and other mechanisms for payments for ecosystem services; - forests and associated goods/services are necessary for more than 40 million Congolese who depend on them for survival. - actions include participative conservation (reforestation, fight against bush fires), post-conversion of old forest titles with concession contracts and environmental/social specifications, address "wood-energy" and "biomass" problems, extend and enforce the forest code nationally. - Water resources: - DRC has more than 52 percent of fresh water in Africa, making it the second global pool after Brazil; - waters drained by three drainage basins; - government actions include quantitative and qualitative assessment of water resources; developing and regulating multi-purpose use; strengthening capacities of the Department of Water Resources for IWRM and database establishment; strengthening regional cooperation with CICOS and NBI; accelerate enactment of the water code; develop national water resource management policy based on IWRM. - Biodiversity and protected areas: - existing protected areas network covers 11 percent of the land surface; - goal to gradually increase this territory to 17 percent of the national territory to include all natural ecosystems; - actions include mechanisms for management and biodiversity conservation promoting sustainable and economic development of forest and halieutic resources, community conservation initiatives, integration of sustainable environmental resource management in development projects, rehabilitating and extending the network of protected areas. ### Fighting climate change — mitigation and adaptation - Climate change risks: - changes in temperature and rainfall can disrupt terrestrial and marine ecosystems and exacerbate environmental degradation, threatening poverty reduction. - Mitigation priorities: - reduce greenhouse gas (GHG) emissions by reducing deforestation and forest degradation. - current situation: - forests make the DRC a net sink of carbon (sequestration higher than total GHG emissions); - deforestation and forest degradation constitute the main part (about 80 percent) of GHG emissions of the country; - bush fires are responsible for the vast majority of GHG emissions from the agricultural sector, constituting 15 percent of total emissions. - projections and potential: - an exploratory REDD+ study indicates annual net emissions linked to deforestation and forest degradation will increase by more than 100 percent during the next 20 years in a “business as usual” scenario under strong population and economic growth; - DRC has significant mitigation potential mainly through reducing emissions from deforestation and forest degradation via REDD+ and carbon sequestration through afforestation and reforestation; - these two levers could help the country to generate $900 million per annum between 2010 and 2030. *Source: Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts).* ### 362. The REDD+ strategy of the DRC, which is in its initial phase of implementation, will seek ### _cr13226 - 362. The REDD+ strategy of the DRC, which is in its initial phase of implementation, will seek ### REDD+ strategy and link to poverty reduction - Double goal: reducing deforestation and forest degradation, and poverty reduction. - Key levers identified by the exploratory study of the REDD+ potential mostly constitute means of reducing poverty. - Priority approaches: - Promote development of rural communities with low impact on the forest through increasing productivity in subsistence farming. - Promote community management of forests. - Promote alternative income-generating activities that reduce pressure on forests, such as ecotourism and processing of agricultural and/or forest products. - Increase access to electricity, improved stoves, and other sources of renewable energy (biomass, wind, solar, bio-fuel) to improve living conditions and incomes of poor people. - Large scale afforestation and reforestation using highly labor intensive (HIMO) approaches to promote employment. - Achieve institutional reforms to support these measures. ### Adapting to climate change — government policy objectives - Government policy seeks to: 1. Fight against land degradation. 2. Protect biodiversity and promote drought resistant varieties. 3. Ensure integrated management of water resources with adequate development of water infrastructure. 4. Increase access to energy, particularly decentralized systems of renewable energy. 5. Manage natural hazards, particularly through development of early warning systems and strengthening the legal and institutional framework. 6. Fight against erosion and flooding. 7. Strengthen capacities of meteorological services to anticipate changes in climate and meteorology and to manage epidemics. 8. Fight against vector-borne diseases. - Climate change projections and implications: - An increase in temperatures of about 3°C at the end of the XXIst Century. - A slight increase of average precipitations at the national level with regional disparities in rainfall patterns. - Strong growth in occurrence of extreme weather events, particularly heavy rains causing flooding, heat waves and drought crises. - Climate change could seriously damage living conditions through increased water stress, land degradation, vector-borne diseases and natural disasters. - Poor populations are particularly vulnerable due to dependence on the environment and limited adaptive capacity (e.g., access to drought-resistant seeds, drinking water, healthcare, electricity). - Strategic integration and priority sectors for adaptation: - Integrate environmental dimension and climate change in priority operational sectoral strategies, notably: - Agriculture: fight land degradation, protect agro-biodiversity, disseminate drought-resistant varieties. - Water: integrated water resource management and construction of wells and rainwater reservoirs to cope with anticipated water stress in provinces (Bas-Congo, Katanga ...) and neighboring countries. - Energy: develop access to energy, particularly decentralized renewable systems, as a prerequisite for other levers. - Natural hazards: develop early warning systems, strengthen legal/institutional framework, fight erosion (particularly coastal areas) and floods. - Weather: build capacity of meteorological services to supply early warning systems. - Health: institutional capacity building for epidemic management and fight against vector-borne diseases. - Forests: protection to regulate microclimates, reduce erosion and flooding, improve soil fertilization and support populations in crisis. - Forests and water resources as principal national levers for adaptation and mitigation; priority areas include forest, water resources, arable land, good waste management, and improved environmental sanitation. ### Main legal, institutional and operational priorities for 2011-2015 - Main priorities for the 2011-2015 period: 1. Complete the legal framework on environment, with enforcement of the new outline law on general principles of environmental protection. 2. Adoption and promulgation of the Law on Nature Conservation. 3. Development and adoption of the bill on biodiversity. 4. Development and promulgation of texts of application of the above-mentioned laws. 5. Strengthen capacity of analysis, understanding and implementation of environmental issues within mandates and inter-ministerial coordination. 6. Capacity building of the Environmental Study Group of Congo (GEEC) responsible for validation of environmental impact studies. 7. Prepare the country for the REDD+, including establishment of institutional structures, implementation mechanisms, and development of a Measurement, Reporting and Verification (MRV) device particularly the Land Monitoring System by Satellite (SSTS), the National Forest Inventory (NFI), and the National Inventory for Greenhouse Gas emissions (GHG). - Additional priorities: - Fight against hunting and illegal logging by strengthening controls (deployment of corps of eco guards). - Promote sustainable timber harvesting through measures aimed at developing trade concessions. - Transfer management of some protected forests to local communities. - Afforestation/reforestation using labor intensive (HIMO) approaches to maximize job creation. - Coordination and financing: - Strategy is transverse and interventions will be implemented by several sectoral ministries. - A Climate Plan identifies interventions with a coordination role recognized in the Ministry in charge of environment. - Some interventions already planned in ministry strategies and PAP-MTEF; others await establishment of the REDD+ device to qualify for substantial financing. ### Sectoral priorities (selected sectors) - Agriculture priorities: 1. Reduce impact on forest for agricultural development through diversification of rural activities (processing, perennial crops, ecotourism, handicrafts). 2. Promote agro-forestry models for some cash crops (cocoa and banana trees) and orient commercial agriculture towards savannah areas where possible. 3. Reduce bush fires through sensitization, incentives and law enforcement. 4. Promote agro-ecology (formulate a National Strategy for Integrated Management of Soil Fertility and develop certification of organic products). 5. Restore degraded soils using successful experiences (e.g., Village Agro-forest Program and related projects). 6. Adopt the draft Code of agriculture currently being discussed in parliament. 7. Organize and supervise farmers through CARG and CDL. - Energy priorities: 1. Promote improved stoves with greater energy efficiency and extend access to electricity. 2. Promote renewable energy in rural areas and disseminate agro-forestry techniques like the MAMPU project on the BATEKE Plateau. - Objective: ensure more sustainable use of firewood, reduce deforestation, reduce GHG emissions and improve living conditions. - Transport and communications priorities: 1. Mitigate environmental impacts of transport infrastructure construction (e.g., Pro-Roads project). 2. Control growth of GHG emissions from the transport sector by promoting public transport, waterway transport, rail transport, use of bio-fuels, and adoption of more stringent technical standards. - Mines and hydrocarbons priorities: 1. Integrate mitigation measures of environmental impacts drawing inspiration from Pro-Roads. 2. Capacity building on environmental taxation for state services and civil society. 3. Better supervision of artisanal mining. 4. Improve energy efficiency in mining. 5. Promote flaring alternatives in hydrocarbons to reduce GHG emissions and promote these reductions on the carbon market. - Note: Extractive sectors constitute relatively few GHG emissions compared with other sectors. - Land priorities: - Ongoing land reform to revise the Land Code, extend and harmonize various legal texts; modernize land services, revive property registration and conflict resolution. - Health priorities: - Strengthen the medicinal plant sector by integrating traditional medicine into the national health system and research-development on medicinal plants and respiratory diseases caused by solid biomass energy (firewood). - Tourism priorities: - Same priorities as outlined in Pillar II (text reference retained). - Industrial sector priorities: - Industrial waste management and control of air, soil and water pollution. - Environmental risk management priorities: 1. Develop early warning systems (with capacity building for meteorological services). 2. Improve the legal and institutional framework. 3. Fight coastal erosion (particularly Atlantic coast of Moanda) and floods. 4. Integrate environmental protection questions in educational plans and programs at all training levels. 5. Create and establish a multisectoral program to fight against climate change. ### Project-level mitigation example - Pro-Roads project mitigation: - The Pro-Roads project to rehabilitate NR4 and 5 spends about 16 percent of its investments to mitigate negative social and environmental impacts and to accompany positive effects of the project. - This budget targets capacity building of institutions involved in environmental protection, public awareness, reforestation, strengthening of self-monitoring local mechanisms and co-management of natural resources, adaptation of codes and regulations, and research. ### Macro-fiscal framing and GPRSP scenario (2011-2015) - Purpose: - Macroeconomic and fiscal framework designed to account for sectoral policy effects while maintaining macroeconomic stability, to lay foundations for growth and poverty reduction. - Based on public spending profile, cost estimates for achieving the MDGs by 2020, sectoral growth hypotheses, international environment vagaries, and real potentials of the Congolese economy. - Ensures realistic programming of public expenditure and highlights main budgetary choices including gender responsive budgeting. - Scenario highlights and growth projections: - "The results of medium-term macroeconomic framework indicate that during the period of implementation of the GPRSP 2, the Congolese economy is expected to record a strong and sustained growth in an environment marked by low inflation and a consolidation of public finance." - The average growth rate over the period would be 7.2 percent against 5.6 percent over the 2006-10 period. - This is a net gain of about 2.0 points compared to the GPRSP 1. - Growth over the 2011-2015 period may be underpinned primarily by boosting agricultural production and dynamism in extractive industries (mines, hydrocarbons and logging) and BTP. - Government intends to boost agricultural production by enhancing small farmers and improving access to markets to ensure food security, contain inflation and reduce underemployment. - Improvements in governance and transparency in contract management should accelerate extractive industry activity and reduce unemployment. - Strengthening basic infrastructure (roads, schools, health centers) may improve the business climate and total factor productivity, keeping services and BTPs dynamic and job-creating. - Improving governance and business climate via structural reforms and intensified public investments should substantially improve private investment and increase growth to 7 percent in 2015. - The improvement of agricultural supply, continuation of public works policy and job creation would catalyze household and public sector consumption. - Sectoral growth table (as reported): - Primary Sector: 5.5 3.6 5.4 4.4 4.2 4.4 4.6 - Agriculture: 3.5 3.5 3.7 4.7 4.4 3.1 4 - Forestry: 3.5 3.5 3.5 2.5 1.4 3.1 2.9 - Mines: 10.1 3.8 9 4 48.1 6.2 - Secondary Sector: 9.3 9 13.8 14.5 12.5 5.4 11.8 - Tertiary Sector: 6.4 7.9 12.5 8.2 8.6 7.1 8.7 - Marketable services: 6 7 12.6 6.9 7.1 5 7.9 - Non-marketable Services: 3 3 4 3.9 3.9 -1.7 3.6 - GDP (base 2000): 6,5 6 9.1 7.4 7.2 5.6 7.2 - Source of table: CPCM, May 2011 *Growth and Poverty Reduction Strategy Paper – GPRSP 2 (excerpts from the supplied content unit).* ### 387. Improving balance of payments. The current account of balance of payments should ### 387. Improving balance of payments. The current account of balance of payments should ### Balance of payments and external sector - The current account is expected to improve over the medium term due to a strong export performance and control of imports of goods and services. - Exports would increase in relation to the expected dynamics in extractive industries. - Imports would remain controlled through: - improving agricultural production, and - developing the industrial sector to satisfy domestic demand. - However, improving private investments and pursuing the policy of public works would derive rising imports of capital goods. - Projection in PEG scenario: the current account should gradually improve from -2.8 percent of the GDP in 2011 to +1.2 percent in 2014; average over 2011-2015 is -0.6 percent of the GDP. ### Monetary policy and inflation - Final goal: achieve and maintain an inflation rate below 10 percent in the coming years. - Monetary policy principles: flexibility of the base rate and positivity of its margin compared to inflation. - Base rate target and margin: - base rate should be below 15 percent, - a positive margin of around 5 percentage points will be preserved. - Purpose: ensure sufficient liquidity to sustain growth while avoiding excess money supply causing inflation. - Monetary policy should be coordinated with sectoral policies to act on supply and avoid shortages. - Government measures called for: increase domestic supply by removing certain substitute goods to reduce the impact of imported price hikes on domestic prices. ### Fiscal policy and public finances - Fiscal policy focus: strengthening fiscal discipline to maintain macroeconomic stability. - Measures to increase tax burden (tax revenue / GDP): - modernization of tax administrations, - strengthening fight against fraud and tax evasion, - replacement of turn over tax by the VAT, - specific taxing of the telecommunications sector, - direct tax reform. - Government efforts to slow down increase of public expenditure: about 35 percent of the GDP over the whole period. - Strategic Plan of Public Finance Reform expected to: - supervise staff costs through modernizing public administration, recruiting policemen and skilled personnel, controlling the size of the Congolese army; - control operating costs; - improve the delivery rate of investment spending. - Fiscal balance (payment order basis) would be around 4.5 percent of the GDP over the period (statement implies average fiscal balance equals -4.5 percent in Table 8). ### Budget deficit financing - Budget deficit financing sources: - concessionary loans to ensure sustainability of foreign debt, - grants, particularly budget supports and project grants by advocating for MDG financing, - resources from privatizing public companies. - Additional mobilization conditional on: analysis of debt sustainability, improving the business climate, and maintaining fiscal discipline. - PEG scenario financing emphasis: mobilization of foreign resources on concessionary terms. ### Medium Term Expenditure Framework (MTEF) and sectoral allocations - Sectoral MTEFs are made consistent with the macroeconomic framework to manage conflicts between sectoral policies and available budgetary resources and to achieve MDGs. - Global MTEF allocates resources according to priorities; credits to pillar 3 average 31 percent of total budget allocations over 2011-2015: - 14 percent for education, - 12 percent for health. - Pillar 2 budgetary allocation would increase from 30.7 percent in 2010 to 43.3 percent in 2015. - Pillar 4 share remains stable at about 3.5 percent over 2011-2015. - Pillar 1 share would experience a drop in relation to the reform of the administration, the army and strengthening of the police. ### Debt policy - Government intent: create fiscal space to meet development and poverty reduction needs while avoiding contracting or guaranteeing new loans that would jeopardize debt sustainability and relief. - Prevent further accumulation of foreign arrears on non-reschedulable debt during the triennial program concluded with the IMF. - Seek rescheduling agreements on similar terms with non-member creditors of the Paris Club. ### PEG Scenario (Program de l'Etat de la Gouvernement — PEG) and macroeconomic projections - PEG scenario: close to the new economic and financial program concluded with the IMF in 2009; under the Extended Credit Facility (ECF). - Projected average economic growth: 6.5 percent over the 2011-2015 period, with inflation contained to single digit. - Growth drivers: mining and construction. - Domestic revenues expected to represent 21.3 percent of the GDP against 33.2 percent for public spending (PEG scenario averages). - Fiscal tightening should help contain current spending. - Overall budget deficit (payment order basis) average: 3.3 percent of the GDP over 2011-2015. - Financing: mobilization of foreign resources on concessionary terms that do not hinder public debt sustainability. - PEG scenario explicit warning: implementation with relatively low allocation to pillars 2 and 3 in favor of pillar 1 would not create conditions for sustainable, job-creating economic growth favorable to achieving the MDGs by 2020. ### Key statistics and indicators (selected from tables and text) - Inflation target: below 10 percent. - Monetary parameters: - base rate: below 15 percent, - margin over inflation: around 5 percentage points. - Table 8 (Evolution of revenues and expenses, in % GDP) — Average 2011-15: - Revenues and grants: 30.2 - Tax revenues: 15.2 - Non-tax revenues: 6.0 - Grants: 9.0 - Total expenditure: 34.7 - Running costs: 15.1 - Wages: 6.1 - Capital expenses: 18.6 - Miscellaneous expenses: 0.7 - Reserves for calamities and disasters: 0.3 - Fiscal balance, payment order basis: -4.5 - Table 9 (Budget deficit financing, in % GDP) — Total financing and components: - Total financing: 7.5 (2011), 6.0 (2012), 4.3 (2013), 3.8 (2014), 2.0 (2015) - Total financing (average line not provided here as single number in table body) - Foreign financing examples: 6.6 (2011), 4.7 (2012), 3.0 (2013), 2.7 (2014), 2.4 (2015) - Amortization due: -1.3 (2011), -1.4 (2012), -1.8 (2013), -1.6 (2014), -1.5 (2015) - Project loans: 7.9 (2011), 6.0 (2012), 4.9 (2013), 4.3 (2014), 3.8 (2015) - Domestic financing: 0.8 (2011), 0.0 (2012-2015) - Grants (row repeated): 8.6 (2011), 8.4 (2012), 9.9 (2013), 9.2 (2014), 9.1 (2015) - Budgetary grants: 0.3 (2011), 0.0 (2012), 0.9 (2013), 0.6 (2014), 0.3 (2015) - Project grants: 6.0 (2011), 6.2 (2012), 6.5 (2013), 6.5 (2014), 7.1 (2015) - HIPC debt relief: 2.3 (2011), 2.2 (2012), 2.5 (2013), 2.1 (2014), 1.7 (2015) - Table 11 (Major macroeconomic indicators of the PEG scenario) — values: - Real growth rate: 6.5 (2011), 6.0 (2012), 8.0 (2013), 6.1 (2014), 5.9 (2015), Average 2011-2015: 6.5 - Total revenue: 20.6 (2011), 20.3 (2012), 21.1 (2013), 22.0 (2014), 22.6 (2015), Average 2011-2015: 21.3 - Total expenses: 36.4 (2011), 34.9 (2012), 33.2 (2013), 31.5 (2014), 30.0 (2015), Average 2011-2015: 33.2 - Overall deficit (payment order basis): 7.1 (2011), 6.0 (2012), 5.0 (2013), 3.7 (2014), 2.1 (2015), Average 2011-2015: 3.3 - Current account balance: -2.8 (2011), -0.7 (2012), 0.6 (2013), 1.2 (2014), -1.3 (2015), Average 2011-2015: -0.6 - Public investment: 13.1 (2011), 12.2 (2012), 10.7 (2013), 8.9 (2014), 7.0 (2015), Average 2011-2015: 10.4 - Private investment: 16.5 (2011), 22.7 (2012), 23.8 (2013), 24.6 (2014), 25.3 (2015), Average 2011-2015: 22.6 - Table 10 and Table 12 (sectoral distribution of annual budget allocations over 2011-2015) provide detailed percentage allocations by pillar and sub-sector for GPRSP and PEG scenarios (select averages and year-by-year percentages cited above in narrative). *Source: CPCM, May 2011 (as presented in the content unit).* ### Box 16. The implications of the development of national accounts according to the 1993 SNA on the main macroeconomic ### Box 16. The implications of the development of national accounts according to the 1993 SNA on the main macroeconomic indicators ### Main changes introduced by adoption of the 1993 SNA - The National Institute of Statistics (INS) undertook since 2008 to develop a new set of national accounts according to the 1993 System of National Accounts (SNA). - These new national accounts, which will be published during the 3rd quarter of 2011, will replace the current set of national accounts prepared according to the 1968 SNA. - Key methodological changes concern: - the use of new statistical tools; - the inclusion of the informal sector; - the inclusion of household consumption. ### Impacts on GDP level, structure, and growth - Level effects: - The level of GDP obtained with the 1993 SNA is 1.4 times larger than the GDP obtained with the 1968 SNA. - Structural effects (compared in 2005): - The contributions of the “Manufacturing industries” and “Transport and telecommunications” sectors to GDP became more important. - The contribution of agriculture to GDP dropped under the 1993 SNA. - Growth rates: - The impact on growth rates is relatively low because the informal sector experiences the same dynamism as the overall economy. - Example: the growth rate of real GDP estimated for 2006 according to the 1993 SNA is 5.3 percent against 5.6 percent for the 1968 SNA. - Ratios and macroeconomic framework: - Passage from the 1968 SNA to the 1993 SNA will induce changes in the GDP level and ratios in percent of GDP; specific ratio implications are presented in the source table (not reproduced here). ### Policy and institutional implications - Government follow-up and studies: - The structural change observed is an invitation to the Government to carry out studies for better understanding of the informal sector in order to better support its development. - Statistical system and model consistency: - On publication of the new series of national accounts, it is important that the CPCM resumes the updating of the model and the frame to ensure consistency among different figures. ### Key statistics and target figures cited - INS project timeline and outputs: - INS undertook the development since 2008. - Publication of new national accounts: during the 3rd quarter of 2011. - GDP and growth: - GDP level under 1993 SNA = 1.4 times GDP under 1968 SNA. - Real GDP growth for 2006: 5.3 percent (1993 SNA) vs 5.6 percent (1968 SNA). *Source: Box 16, as provided in the Growth and Poverty Reduction Strategy Paper – GPRSP 2 excerpt.* ### 417. The reporting system, which should be developed gradually to fully become operational ### _cr13226 - 417. The reporting system, which should be developed gradually to fully become operational ### Reporting tools and periodicity - The reporting system should be developed gradually to fully become operational by 2015. - Table of Reporting tools (by periodicity): - Monthly - Report of works of sectoral and thematic groups — Thematic Groups - Half-monthly - Six-monthly synthesis on the implementation of the GPRSP — UPPE-SRP - Quarterly - “Sectoral” dashboards (documentation on the implementation of actions indicated in ministerial PAPs) — Ministries - Provincial dashboards (documentation on the implementation of actions indicated in provincial PAPs) — Min. Plan of Provinces - Table of budget monitoring per ministry (state of financial execution per program) — DPSB - Table of monitoring of foreign aid (on PGAI basis) — Min. Plan - Annual - Annual reports of performance of ministerial budget programs — Ministries - Annual report of performance of action plans/Provincial Boxes — Min. Plan of Provinces - Report on the use of foreign aid and partnership monitoring (post-Paris Declaration) — Ministry du Plan - Dashboard for monitoring MDGs; consolidated report of implementation of the GPRSP and provincial GPRSP — OPIC - Consolidated report of implementation of the GPRSP 2 — UPPE-SRP - Supra-annual reports - Report on the evolution of MDGs — OPIC - National and provincial poverty profiles — UPPE-SRP/INS/DP-Provinces - Evaluation of the GPRSP 2; other evaluation reports (PEFA, governance profile, specific policies/programs, EDS, Survey 1-2-3, ...) — Miscellaneous ### (a) Infra-annual periodicity tools — operational details - Reports of the works of thematic groups - Prepared monthly and distributed to: (i) UPPE-SRP; (ii) offices and DEP of ministries; (iii) stakeholders of Thematic groups particularly the civil society. - Used to establish quarterly syntheses and annual reports. - Quarterly dashboards - Follow a standard format developed participatorily by ministries under coordination of UPPE-SRP. - Provide quarterly progress updates on implementation of actions registered under action plans at ministry and provincial levels. - Table of budgetary monitoring - Produced from the ESB. - Production format of performance data will change once budgeting per program becomes the rule. - Six-monthly syntheses - Prepared by UPPE-SRP on the basis of sectoral dashboards and reports of Thematic Groups. ### (b) Annual periodicity tools — operational details - Annual consolidated report of implementation of the GPRSP and the MDGs - Produced by UPPE-SRP in the first half of the year following the year in question. - Based on previous annual performance reports and results of surveys or studies. - Structured according to areas and sectors selected in the GPRSP 2. - Takes stock of the progress of the result framework of the SCRP, including the evolution of the MDGs. - Sectors are responsible for their parts; the NHS must validate the statistics they contain. - Budget data should come from the DPBS of the Budget Ministry. - Annual performance report for each PAP/MTEF (ministerial and provincial) - Produced in March/April of the year following that covered by the report. - Later subjected to competent parliamentary institutions (national and provincial) in the appendix to the law of accountability. - Should be concise and focused on availability and use of budget appropriations and extent of achievement of annual or long-term targets fixed in the PAP/MTEF. - Dashboard for monitoring MDGs - A simple executive summary accompanied by a table updating the value achieved for each indicator according to available data. - Annual report on aid and partnership - Focuses on analysis of global trends of foreign aid, its origin and its sectoral and provincial allocation. - Reports on changing conditions of the partnership between the DRC and its foreign partners. - Ensures monitoring of the Kinshasa Agenda and the Paris Declaration. ### (c) Long-term tools - Mid-term evaluation report of the GPRSP 2 - Developed after the third year of its implementation. - Evaluates results obtained and revisits strategies, programs and projects as appropriate. - Relies on surveys carried out, particularly the survey 1-2-3 and a mild QUIBB survey. - Final evaluation report of the GPRSP 2 - Produced at the end of the fifth year of implementation. - Based particularly on the survey 1-2-3, DHS and MICS to measure impacts of strategies used for the GPRSP 2 in poverty reduction. ### Monitoring-evaluation indicators (system composition) - Monitoring is based on both performance monitoring indicators (inputs, direct outputs) and indicators for monitoring effects and impacts. - The indicator system comprises: - Global GPRSP monitoring indicators (indicators of impact and outcome) consisting mainly of MDG indicators supplemented by a selection of macroeconomic and sectoral indicators. - PAP/MTEF Monitoring indicators: each PAP/MTEF program has one or several monitoring-evaluation indicators (input/resource indicators and operational performance indicators). Their number must be reasonable; only easily measurable indicators with established annual targets should be retained. - Additional indicators within international benchmarks (IDH level and ranking, Doing Business ranking, World Bank governance indices...). - Process to select indicators - With support of UNFPA, UPPE-SRP organized works to identify monitoring-evaluation indicators of the GPRSP 2. - A workshop with INS, producers of sectoral statistics and DEPs and other stakeholders developed a list of indicators and data sources in a participatory and harmonized manner. - Easily measurable indicators with reasonable procurement costs were selected. - The list of selected indicators and their data sources figure in the appendices of the document. ### Priorities to ensure smooth functioning of the information system (by 2015) - Key priorities: - (i) improvement of data quality; - (ii) priority accountability of ministries; - (iii) development of DEPs and coordination with DAF; - (iv) close links among action plans of the SNDS and information needs for the monitoring of the GPRSP 2; - (v) strengthening of provincial structures in the production of monitoring-evaluation information. ### Institutional architecture — responsibilities (political level) - Prime Minister - President of the Inter-ministerial Commission of the National Strategy for the Fight against Poverty, assisted by two Vice-Presidents (Ministers for Planning and Finance). - Convenes and chairs quarterly meetings of the Inter-ministerial Commission to take stock of implementation, remove constraints, and take disciplinary measures if necessary. - Minister of Planning - Provides technical coordination of the GPRSP with technical ministries, Technical and Financial Partners, civil society organizations, NGOs and the private sector. - Guarantor of implementation of sectoral policies, economic recovery programs and projects and poverty reduction in partnership with development actors. - Coordinates national coordination structure attached to him and interventions of Technical and Financial Partners. - Ministry of Budget - Responsible for budgetary programming and implementation of actions and projects identified in the MTEF with sectoral ministries. - Ensures effective allocation to sectors and priorities set by the government under the GPRSP 2. - Minister of Finance - Ensures mobilization of State and foreign resources necessary for implementation of the strategy. - Responsible for monitoring the macroeconomic framework and economic and structural reforms. - Ministry of Decentralization and Regional Planning - Ensures implementation of measures related to decentralization and regional planning. - Inter-ministerial Commission of the National Strategy for the Fight against Poverty (CI-SNLCP) - Chaired by the Prime Minister, assisted by ministers for Planning, Budget, Finance and Decentralization. - Periodically monitors physical and financial execution of the GPRSP, validates and approves programs and action plans related to the budget calendar, prepares semiannual reports, and operates periodic adjustments to the strategy. - UPPE-SRP controls the technical secretariat of the CI-SNLCP. - Inter-ministerial Committee for Monitoring Programs concluded with International Financial Institutions (CISPI) - Presided by the Minister of Finance; includes concerned ministers, Governor of the Central Bank, Senior Advisor to the economic bench of the Head of State and a representative of the Prime Minister’s cabinet in charge of programs. - Pilots monitoring of structural reforms related to the national strategy for poverty reduction. - Supported by the Technical Committee monitoring Economic Reforms (CTR) which coordinates monitoring-evaluation of structural reforms in collaboration with DEPs. - Thematic Groups - Forums for dialogue and consultation among technical/sectoral ministries, non-state actors and technical and financial partners, coordinated by the Secretary General of the Ministry of Planning. - Participate in monitoring-evaluation of sectoral strategy based on sectoral/thematic plans and reports. - Decide on content of policies/programs, results obtained, degree of resource mobilization and use, and implementation constraints. - Hold monthly meetings where possible and at least quarterly. ### Institutional architecture — responsibilities (technical level and key structures) - Key central structures linked to the Ministry of Planning - Steering Unit of the Process of Development and Implementation of the SRP (UPPE-SRP) - Centralizes and summarizes all available information on monitoring-evaluation of programs and projects linked to the GPRSP. - Animates the monitoring device of implementation (particularly the reporting system) of the SRP. - Refreshes the poverty profile at national and provincial levels. - Ensures participatory approach of development and implementation of the SRP. - Supervises the communication strategy of the GPRSP. - Congolese Poverty and Inequality Observatory (OCPI) - Monitors MDGs at national level (updating an annual dashboard and production of a report every 2-3 years). - Monitors international benchmarks (indicators of human development, governance, LIMS, ...) of poverty. - Performs or enables analyses on poverty and in-depth evaluations on impacts of the GPRSP or specific policies/programs. - Participates with INS and other structures in setting surveys linked to poverty. - Encourages joint initiatives on poverty analysis and evaluation of government policies, particularly with civil society organizations. - National Institute of Statistics (INS) - Plans and coordinates statistical activities under guidance of the National Council of Statistics and National Strategy for Development of statistics. - Supports major statistical operations (General Census of Population and Housing, Demographic and health surveys, survey 1-2-3, MICS, QUIBB, etc). - Ensures centralization and documentation of indicators (metadata). - Ensures archiving and dissemination in a secured manner of statistical Databases on the DRC. - Provides methodological and technical support to sectoral producers of statistics. - Directorate of Inspection and Monitoring (DCS) - Monitors, controls and evaluates public investment programs and projects. - Monitors and evaluates private and mixed investment projects approved in the Investment Code. - Directorate of Regional Planning (DPR) - Monitors spatial distribution of public resources and provincial spending. - In collaboration with UPPE-SRP, monitors planning activities in provinces (particularly provincial GPRSPs). - Directorate of Coordination of Foreign Resources (DCRE)/PGAI - Manages the database on foreign aid (platform for managing aid and investments (PGAI)). - Produces quarterly reports on the disbursement of aid. - Key central structures related to the Ministry of Finance - Technical Committee for monitoring Economic Reforms (CTR) - Assists the CISPI in monitoring-evaluation of economic and financial reforms and Government programs. - Serves as focal point to donors for issues relating to the Economic Program of the Government. - Steering Committee for Public Finance Reforms (COREF) - Assists the CISPI in boosting, monitoring and technical coordination of actions linked to implementation of the Strategic Plan for Public Finance Reforms (PSRFP). - Coordinates structures ensuring leadership roles for each reform component/sub-component. - Supplies meetings of the Economic Governance Thematic Group (GTGE). - Directorate of Budgetary Planning and monitoring (DPSB) - Ensures production and dissemination of states of budgetary monitoring (ESB). - Central sectoral structures - Departments of Studies and Planning (DEP) producing sectoral statistics / PAP / MTEF Cells - Interface between technical ministries and the Ministry of Planning. - Centralize and summarize information on monitoring of implementation at sector level. - Collect, process and analyze statistical data necessary for monitoring evaluation of programs and projects of their sectors. - Produce quarterly dashboards reporting on progress of programs and projects within their ministries and linked to the GPRSP. - Disseminate results of sectoral monitoring to technical departments. - Departments of the Administration and Finances (DAF) - Ensure with DEPs a consolidated monitoring of budgetary expenditure and performance of sectoral programs once the LOFIP is implemented and budgets-programs generalized. - Provincial structures - Committees for the Fight against Poverty - Responsible for designing and monitoring-evaluation of the national and provincial strategies for poverty reduction. - Interface between UPPE-SRP and provincial development actors like provincial Governments. - Supervise preparation and updating of operational programming documents at provincial level. - Ensure monitoring of implementation of PAP/MTEF. - Local Committees for the Fight against Poverty - Coordinate designing, implementation and monitoring-evaluation of local strategies and action plans. - Develop monitoring–evaluation reports and transmit them to provincial committees for centralization and consolidation. - Provincial Directorates of the INS - Carry out provincial surveys. - Formulate dashboards of provincial indicators for monitoring-evaluation of provincial GPRSP. - Provincial Division of Planning - Coordinates development, implementation and monitoring-evaluation of provincial GPRSP. *Source: _cr13226 - 417. The reporting system, which should be developed gradually to fully become operational* ### 432. The implementation of the national strategy for growth and poverty reduction and the ### 432. The implementation of the national strategy for growth and poverty reduction and the ### 3.4.1. Domestic risks — A. Weak institutional and human capacities - Finding: Most operational national and provincial structures for implementation and monitoring-evaluation of the SRP have very weak institutional and human capacities. - Manifestations of weak capacity: - Problems of physical framework of labor, infrastructure, equipment, rolling stock, information and communication tools. - Perennial problem of financing the functioning and remuneration of staff. - Human resource deficits: several structures lack staff with technical capacities required for: - analyzing context and problems; - producing statistics; - controlling the chain of results, indicators and techniques of monitoring-evaluation; - preparing reports (reporting system); - information and communication. - Recommendation: Institutional and human capacity building of structures and actors involved is a major requirement for success. - Tools and measures to support capacity building: - development of a monitoring-evaluation plan to clarify procedures and requirements of capacity building; - plans for data collection and capacity building, as well as the PAP and MTEF statistics, to identify priorities and support mobilization of financings for the National Statistical System pending the SNDS. - Ongoing program: Government established a National Program for Capacity Building (PRONAREC) to respond to priority needs. ### 3.4.1. Domestic risks — B. Ownership of the strategy - Finding: A major weakness of the first generation GPRSP was low ownership by political and administrative authorities; many authorities programmed, budgeted, implemented and monitored public interventions without considering the GPRSP. - Imperative for success: The second generation GPRSP depends on ownership by all development actors, particularly high-level decision-makers at national and provincial institutions. - Recommended accompanying actions: - Measures and actions should be taken and followed by the Prime Minister, Head of Government. - National and provincial Parliaments, Civil Society, the private sector and Technical and Financial Partners should be sufficiently sensitized to take ownership. - Institutional role: The UPPE-SRP must strengthen the quality of its network of focal points and improve its ability to analyze sectoral and communication policies. ### 3.4.1. Domestic risks — C. The fragility of peace and security - Context: The DRC is a post-conflict and fragile country in terms of peace, security and economy; efforts since 2001 have aimed at recovery and restoration of peace, but security of people and assets remains a concern in areas emerging from armed conflict. - Risk: Fragility of peace and security can compromise implementation and monitoring-evaluation of the national strategy. - Recommendation: Continue measures and reforms in the armed forces, security services and regional integration to consolidate peace and security. ### 3.4.2. External risks — A. The country’s dependence on foreign financing - Finding: The State budget is made up of over 40 percent of contributions from foreign partners. - Consequence: Excessive dependence on foreign financing is a major risk to implementation and monitoring-evaluation; many investment and planning activities are financed and supported externally and lose priority when financing is lacking. - Recommendation: For more security, the Congolese State must: - diversify its economy; - maximize its revenue; - increase its share in the investment budget; - prioritize the planning and monitoring-evaluation process. ### 3.4.2. External risks — B. Economic and financial crises - Observation: International economic and financial crises threaten African economies. - Example: The 2008-2009 crisis caused growth to drop to 2.8 percent in the DRC and led to destruction of 300,000 jobs only in the mining sector in Katanga. - Recommendation: The macroeconomic stability framework should account for forecasted global changes and the cyclical nature of crises; pay particular attention to the debt crisis in some European countries as a systemic risk. - Preparedness: Government must be prepared to implement cushioning mechanisms similar to those used during the 2008-2009 crisis. ### 3.4.2. External risks — C. The energy crisis and world prices - Risk: Chronic instability of raw material prices, particularly oil, poses a risk to growth. - Reasons: High dependence on raw material exports, weak currency, and high consumption of oil and gas by the population. - Potential impacts: trade, balance of payments, stock of international currencies, etc. - Recommendation: Government should pay particular attention to developments in world prices. ### 3.4.2. External risks — D. Hunger crisis - Finding: The Congolese government is exposed to hunger risk (see Chapter One). - Issues: - Volatility and rising trend of food prices burden households and the budget. - Drinking water will become a major development challenge during the next decade and a potential source of conflicts due to scarcity. - Recommendation: The State must: - monitor prices on the domestic market; - implement a system to protect the poor (food supplies); - implement a rigorous policy of formidable stock management of fresh water (60 percent of reserves in Africa which nature has endowed). ### Annex 1: Key monitoring-evaluation indicators (selected highlights) - I. Macro-economy: Inflation rate; GDP per capita; Economic growth rate; Investment rate; Rate of tax burden; Ratio of debt service compared to exports; Ratio of exports to the GDP; Ratio of current expenditure compared to tax revenues; Ratio of compensation expenses over tax income; Basic fiscal balance compared to the GDP. - II. Poverty and Social Inequalities: Incidence of poverty; Depth of poverty; Severing of poverty; proportion of the population living with less than a dollar PPA perday; Share of poorest quintile in national consumption; Share of the fifth richest quintile in national consumption; Spatial distribution of the poor. - III. Household living environment: Proportion of population with access to an improved drinking water; Proportion of villages having access to an improved drinking water; Proportion of the population having access to electricity; Proportion of electrified villages; Proportion of households having their own home; Proportion of renter households; Proportion of poorly housed households; Proportion of the population having access to improved sanitation. - IV. Employment: Activity rate; Unemployment rate according to ILO; Unemployment rate at large; Level of informality; Employee rate; Rates of visible and invisible underemployment; Proportion of children aged 10 to 14 years economically active; Proportion of youth who are neither in school nor employed. - V. Education: Net enrollment rate (or attendance) at Primary; Gross Enrollment Rate in Primary; Primary completion rate; Transition rates between primary and the first cycle; Gross enrollment in secondary; Secondary school completion rate; Adult literacy rate; Girl / boy ratios at various levels; Proportion of villages having a primary school within one kilometer; Proportion of villages with secondary school less than 5 km. - VI. Health: Infant and child mortality rates; Infant mortality rate; Child Mortality Rate; Proportion of children 12-23 months who received all vaccines; Maternal mortality rate; Prenatal consultation rate (CPN1); Proportion of births attended by skilled health personnel; Contraceptive prevalence; Prevalence of HIV; Percentage of children under 5 sleeping under insecticide-treated nets; Total Fertility Rate (TFR); Life expectancy at birth; Number of physicians per 1000 inhabitants; Number of hospital beds per 1,000 population. - VII. Environment: Total forest area; Forest coverage rate; Protected areas; Deforestation rate; Reforestation rate; Net rate of deforestation; Average annual air pollution; Annual average rate of water pollution; Annual average rate of soil pollution; Proportion of forest area; Annual quantity of wood used industrially; Proportion of households using solid fuels (firewood and charcoal) as energy for cooking. - VIII. Agriculture and Rural Development: Total area of arable land; Proportion of cultivated arable land; Total number of farm households; Number of modern farmers; Index of per capita food production; Self-sufficiency rate per product and per animal species; Agricultural sector's contribution to GDP; Growth rate of agricultural sector; Production of major crops (in quantity and value); Proportion of agricultural households using improved seeds; Proportion of villages electrified. - IX. Infrastructure and Public Works: Linear paved roads; Constructed or rehabilitated linear paved roads; Linear earth roads; Linear bridges; Number of Trays; Number of tanks installed; Share of state budget devoted to ITPR. - X. Mines and hydrocarbons: Production (in quantity and value) of main mining products; Exports (in quantity and value) of main mining products; Number of holders of mining permits per type. - XI. Industry: Industrial production index; Industrial contribution to GDP; Growth rate of the industrial sector; Investment rate of the industrial sector; Access rate to credit. - XII. Communication and information: Proportion of population with a radio; TV; fixed telephone; computer; electronic address. - XIII. Governance and participation: Proportion of women parliamentarians and senators; Proportion of the State budget allocated to provinces; Satisfaction rate of the population for public services; Average length of pretrial detention; Proportion of cases registered compared to cases enlisted; Proportion of land conflicts in registered cases; Proportion of sexual violence in the cases registered; Number and proportion of cases of embezzlement or corruption. - XIV. Trade: Terms of trade; Propensity to Export; Propensity to Import; Coverage rate of imports over exports; Country's dependence in terms of primary commodities; Dependence of the country in terms of minerals; Trade balance; Diversification index of exports. *Growth and Poverty Reduction Strategy Paper – GPRSP 2* ### 179. Degree of openness INS / DEP of Commerce ### _cr13226 - 179. Degree of openness INS / DEP of Commerce ### Degree of openness and export capacity - Itemized indicators (titles only as provided): - 179. Degree of openness INS / DEP of Commerce - 180. Country's ability to export industrial products INS / DEP of Commerce - 181. Country's capacity to finance food requirements by exports INS / DEP of Commerce ### Business climate (XV.Business climate) — indicators listed - Position of the DRC in the ranking of Doing Business Doing Business Report - 183. Average time for obtaining the Commercial Registry Number (CRN) ANAPI - 184. Average time for obtaining the identification number (NId) ANAPI - 185. Average time for obtaining the tax number ANAPI - 186. Average time for obtaining building permits DEP – Ministry of Urban Development and Housing - 187. Number of taxes collected per Financial Authority DEP – Ministry of Finance - 188. Number of services at borders for customs clearance ANAPI / DEP of Economy - 189. Number of new companies created ANAPI - 190. Number of jobs created by new companies ANAPI - 191. Amount of taxes paid by newly created companies ANAPI / Ministry of Finance - 192. Annual rate of business growth ANAPI / DEP of Economy - 193. Coverage rates of incubating companies ANAPI / DEP of Economy - 194. Level of informality INS / Survey 1-2-3 - 195. Number of stop shops located in customs services ANAPI / DEP of Economy - 196. Proportion of customs services with a single window ANAPI / DEP of Economy - 197. Number of public services levying taxes ANAPI / DEP of Economy - 198. Number of single windows located ANAPI / DEP of Economy - 199. Number of incubator centers ANAPI / DEP of Economy - 200. Number of contractors trained in incubation centers ANAPI / DEP of Economy ### Annex 2 — Evolution of some MDGs in the DRC (visual charts referenced) - The annex lists the following MDG trajectories and labelled charts (titles only as provided): - Evolution of the incidence of income poverty compared to the path of MDGs - Evolution of the proportion of underweight children compared to the path of MDGs - Evolution in net enrolment in primary education compared to the path of MDGs - Evolution adult literacy rate (15-24 years) compared to the path of MDGs - Evolution of the proportion of women elected compared to the path of MDGs - Evolution of mortality rate of children under 5 years compared to the path of MDGs - Evolution of maternal mortality rate compared to the path of MDGs - Evolution of the proportion of children under 5 years who slept under a treated mosquito net (MII) compared to the path of MDGs - Evolution of the proportion of the population with access to a source of drinking water in rural areas compared to the path of MDGs - Evolution of the proportion of the population with access to a good health system in rural areas compared to the path of MDGs ### Annex 3 — Trend of some ratios in GDP % according to SNA 1968 and 1993 (selected values) - 1968 SNA — levels (annual series 2006–2015 as provided) - GDP: 4 254; 5 334; 6 744; 9 298; 12 211; 14 752; 17 453; 21 609; 26 475; 31 894 - Real growth rate: 5.6% ; 6.2% ; 6.2% ; 2.8% ; 7.2% ; 6.5% ; 6.0% ; 9.1% ; 7.4% ; 7.2% - Total revenue (in % of the GDP): 12.4% ; 14.3% ; 17.9% ; 16.4% ; 18.5% ; 20.4% ; 19.8% ; 21.5% ; 22.1% ; 22.3% - Total expenditure (in % of the GDP): 19.5% ; 18.3% ; 22.2% ; 26.8% ; 29.9% ; 36.0% ; 33.6% ; 35.6% ; 35.0% ; 33.3% - Public investment (in % of the GDP): 3.2% ; 2.3% ; 3.6% ; 7.6% ; 13.7% ; 16.3% ; 16.3% ; 19.9% ; 20.6% ; 20.1% - Fiscal balance, base fund: -0.6% ; -1.9% ; -2.1% ; -3.0% ; 2.3% ; -7.0% ; -5.4% ; -4.3% ; -3.8% ; -2.0% - Exports (in % of GDP): 32.3% ; 59.4% ; 55.0% ; 38.4% ; 62.5% ; 71.3% ; 67.6% ; 66.2% ; 61.6% ; 58.0% - Imports (in % of GDP): 31.8% ; 50.9% ; 56.0% ; 43.5% ; 58.6% ; 58.8% ; 54.1% ; 51.8% ; 48.5% ; 46.0% - Current balance: -2.0% ; -1.1% ; -15.4% ; -9.2% ; -6.7% ; -2.7% ; -0.6% ; 10.6% ; 10,4% ; 10.8% - 1993 SNA — levels (annual series 2006–2015 as provided) - GDP: 6 695; 8 395; 10 613; 14 631; 19 215; 23 215; 27 465; 34 005; 41 662; 50 190 - Real growth rate: 5.3% ; 6.2% ; 6.2% ; 2.8% ; 7.2% ; 6.5% ; 6.0% ; 9.1% ; 7.4% ; 7.2% - Total revenue (in % of GDP): 7.9% ; 9.1% ; 11.4% ; 10.4% ; 11.7% ; 13.0% ; 12.6% ; 13.6% ; 14.0% ; 14.2% - Total expenditure (in % of GDP): 12.4% ; 11.6% ; 14.1% ; 17.0% ; 19.0% ; 22.9% ; 21.4% ; 22.7% ; 22.3% ; 21.2% - Public investment (in % of GDP): 2.0% ; 1.4% ; 2.3% ; 4.8% ; 8.7% ; 10.4% ; 10,3% ; 12.6% ; 13.1% ; 12.8% - Fiscal balance, base fund: -0.4% ; -1.2% ; -1.4% ; -1,9% ; 1.5% ; -4.5% ; -3.4% ; -2.7% ; -2.4% ; -1.3% - Exports (in % of GDP): 20.5% ; 37.8% ; 34.9% ; 24.4% ; 39.7% ; 45.3% ; 42.9% ; 42.0% ; 39.1% ; 36.9% - Imports (in % of GDP): 20.2% ; 32.3% ; 35.6% ; 27.6% ; 37.2% ; 37.4% ; 34.4% ; 32.9% ; 30.8% ; 29.2% - Current balance: -1.3% ; -0.7% ; -9.8% ; -5.8% ; -4.3% ; -1.7% ; -0.4% ; 6.8% ; 6.6% ; 6.8% - Difference (1993 SNA – 1968 SNA) — selected entries as provided - GDP differences (2006–2015): 2 440; 3 060; 3 869; 5 334; 7 005; 8 463; 10 012; 12 396; 15 187; 18 296 - Total revenue differences (in % of GDP): -4.% ; -5.2% ; -6.5% ; -6.0% ; -6.7% ; -7.4% ; -7.2% ; -7.8% ; -8.0% ; -8.1% - Total expenditure differences (in % of GDP): -7.% ; -6.7% ; -8.1% ; -9.8% ; -10.9% ; -13.1% ; -12.3% ; -13.0% ; -12.8% ; -12.2% - Public investment differences (in % of GDP): -1.1% ; -0.8% ; -1.3% ; -2.8% ; -5.0% ; -5.9% ; -5.9% ; -7.2% ; -7.5% ; -7.3% - Exports differences (in % of GDP): -11.8% ; -21.7% ; -20.0% ; -14.0% ; -22.8% ; -26.0% ; -24.6% ; -24.1% ; -22.4% ; -21.1% - Current balance differences (in % of GDP): 0.7% ; 0.4% ; 5.6% ; 3.3% ; 2.4% ; 1.0% ; 0.2% ; -3.9% ; -3.8% ; -3.9% - Sources: CPCM and INS ### Annex 4 — Four accounts of basic scenario framework (Major indicators: Scenario of the strategy — Estimates/Projections) - GDP and per capita (Est./Projections) - GDP (in nominal value, billions CDF): 6363.0 7568.7 772.0 10406.0 12527.7 14769.8 - GDP per capita (in USD): 193.12 215.22 230.22 258.6 288.2 317.2 - GDP per capita (in CDF): 176444.6 206957.6 237721.0 285753.8 339897.6 397 544.5 - Production and price (annual growth unless otherwise indicated) - Real GDP: 7.2% 6.5% 6.0% 9.1% 7.4% 7.2% - Agricultural grant: 3.0% 3.5% 3.5% 3.7% 4.6% 4.3% - Mining grant: 24.9% 10.1% 3.8% 9.0% 4.0% 4.7% - Consumer price index, annual average: 23.5 12.0 11.0 9.0 8.8 8.3 - Consumer price index, end of period: 9.8 13.0 9.0 9.0 8.5 8.0 - GDP deflator: 22.5% 13.4% 11.6% 13.5% 14.1% 12.4% - Expenditure and savings (in percentage GDP, unless otherwise indicated) - Consumption: 80.6% 69.4% 62.1% 55.9% 52.4% 49.3% - Public consumption: 11.8% 13.8% 10.6% 13.6% 12.0% 10.5% - Private consumption: 68.8% 55.5% 51.6% 42.4% 40.4% 38.8% - Investment: 27.0% 32.8% 34.8% 40.2% 44.5% 48.3% - Public investment: 14.1% 16.8% 16.7% 20.5% 21.5% 21.0% - Private investment: 12.9% 16.0% 18.1% 19.7% 23.0% 27.4% - Savings: 19.4% 30.6% 37.9% 44.1% 47.6% 50.7% - Government (in percentage of GDP) - Total revenue: 32.2% 29.0% 28.2% 31.4% 31.3% 31.4% - Revenue except grants: 18.5% 20.4% 19.8% 21.5% 22.1% 22.3% - Grants: 13.7% 8.6% 8.4% 9.9% 9.2% 9.1% - Total expenditure: 29.9% 36.0% 33.6% 35.6% 35.0% 33.3% - Current expenditure: 14.1% 16.9% 16.2% 15.2% 14.1% 13.0% - Capital expenditure: 13.7% 16.3% 16.3% 19.9% 20.6% 20.1% - Domestic fiscal balance (basic fund): 0.3% -1.8% -1.0% -2.6% -1.8% -1.8% - Consolidated fiscal balance (basic fund): 1.1% -7.5% -6.0% -4.3% -3.7% -1.9% - Foreign sector (in percentage of GDP) - Exports of goods and services: 69.7% 74.8% 75.9% 71.2% 66.3% 62.6% - Mining sector grant: 57.2% 61.0% 62.8% 59.2% 55.2% 52.0% - Imports of goods and services: 77.3% 76.9% 72.9% 67.3% 63.3% 60.2% - Balance of Trade balance: -3.9% 13.3% 14.1% 14.3% 12.8% 11.6% - Current balance: -15.8% -2.9% 3.8% 10.5% 10.1% 10.4% - Money and credit (annual variation) - Money supply (M2): 30.7% 22.5% 16.6% 31.9% 26.6% 24.2% - Net foreign assets: 2116.5% 20.6% 53.6% 5.4% 10.2% 6.9% - Net domestic assets: -30.5% 23.8% -13.2% 63.2% 41.6% 36.5% - Credit to the economy: 19.0% 29.4% 14.9% 80.7% 36.3% 33.2% - Net debt on the State: -328.7% -11.8% 0.0% 0.0% 0.0% 0.0% - MDG indicators (selected projections) - Poverty Incidence: 69.6% 69.6% 67.3% 65.1% 62.7% 60.6% - Literacy rate (% of adults, from 15 years): 83.2% 89.7% 91.8% 95.5% 98.7% 101.0% - Net schooling rate in the primary sector: 75.0% 82.8% 85.3% 89.1% 93.8% 96.5% - Life expectancy at birth: 48.0 49.3 49.8 50.6 51.2 51.9 - Maternal mortality rate (for 100 000 births): 413.2 355.4 344.3 323.6 309.5 294.6 - Infant and youth mortality rate (less than 5 years): 111.1 95.4 93.1 87.8 84.4 80.8 - Exchange rate (CDF/USD) - Average: 913.90 961.64 1 032.88 1 105.05 1 179.57 1 253.22 - End of period: 925.20 973.53 1 045.65 1 118.71 1 194.15 1 268.72 - Source: Macroeconomic Framework Standing Committee (CPCM) ### GDP and its employments; scenario of the strategy (selected growth rates and sectoral contributions) - GDP per capita and nominal series (selected entries as provided) - Nominal GDP (selected historical sequence as listed): 12 210.8 14 752.1 17 453.2 21 609.1 26 474.6 31 893.6 - Nominal GDP (In millions USD) sequence shown: 13 361.2 15 340.5 16 897.7 19 554.9 22 444.4 25 449.3 - Population (in million of inhabitants) series: 69 204.5 71 280.6 73 418.9 75 621.4 77 890.0 80 226.6 (values listed as in source) - GDP per capita (USD per capita) example: 193.12 215.22 230.22 258.6 288.2 317.2 - Real GDP (annual growth) average: 7.2% 6.5% 6.0% 9.1% 7.4% 7.2% (2011-2015 average 7.2%) - Sectoral annual growth (selected) - Primary sector growth: 8.7% 5.5% 3.6% 5.4% 4.4% 4.2% (average 4.6%) - Agriculture: 3.0% 3.5% 3.5% 3.7% 4.7% 4.4% (average 4.0%) - Mines: 24.9% 10.1% 3.8% 9.0% 4.0% 4.0% (average 6.2%) - Secondary sector: 6.6% 9.3% 9.0% 13.8% 14.5% 12.5% (average 11.8%) - Tertiary sector overall and subcomponents listed with annual growth rates in the source (e.g., Marketable services 4.7% 6.4% 7.9% 12.5% 8.2% 8.6%) ### Table of financial operations of the state — scenario (selected nominal flows and % of GDP) - Revenues and grants (in millions of CDF, selected rows) - Total revenues and grants series: 3 929.3 4 274.9 4 919.0 6 780.9 8 270.3 9 998.7 - Tax and non-tax revenues: 2 253.3 3 006.4 3 452.3 4 638.1 5 841.9 7 105.0 - Grants (millions of CDF): 721.4 1 008.8 985.8 1 324.8 1 558.6 1 749.7 - Total expenditure (in millions of CDF, selected) - Total expenditure series: 3 647.3 5 308.6 5 866.2 7 703.1 9 271.3 10 634.4 - Current expenditure: 1 724.2 2 491.1 2 820.6 3 282.9 3 727.0 4 145.6 - Capital spending: 1 677.6 2 406.3 2 840.8 4 295.3 5 459.4 6 414.7 - Ratios (in percentage of the GDP, selected) - Revenues and grants: 32.2% 29.0% 28.2% 31.4% 31.2% 31.4% - Tax revenues: 12.5% 13.5% 14.1% 15.3% 16.2% 16.8% - Grants: 13.7% 8.6% 8.4% 9.9% 9.2% 9.1% - Total expenditure: 29.9% 36.0% 33.6% 35.6% 35.0% 33.3% - Capital spending: 13.7% 16.3% 16.3% 19.9% 20.6% 20.1% - Domestic financing (as % GDP): 2.5% 3.9% 5.2% 10.0% 10.8% 11.9% - Balance and financing (selected) - Overall balance based on scheduling: 2.3% -7.0% -5.4% -4.3% -3.8% -2.0% - Overall balance based on funds: 0.3% -1.8% -1.0% -2.6% -1.9% -1.8% - Total financing (in % of GDP): -1.1% 7.5% 6.0% 4.3% 3.8% 2.0% - Foreign financing (in % of GDP): 3.5% 6.6% 4.7% 3.0% 2.7% 2.4% ### Balance of payments — Scenario of the strategy (selected magnitudes and ratios) - Current account (in millions of USD, selected) - Current account totals: -897.75 -418.93 -108.55 2 079.43 2 324.35 2 738.21 - Exports of goods, fob: 8 349.88 11 093.00 11 420.67 12 937.33 13 817.24 14 760.78 - Mining export products: 8 153.97 10 680.88 11 141.77 11 585.03 12 387.04 13 246.29 - Imports of goods, fob (negative flows in source): -7 829.49 -9 020.59 -9 136.84 -10 121.70 -10 887.72 -11 705.12 - Current account (in percentage of GDP, selected) - Current account: -6.7% -2.7% -0.6% 10.6% 10.4% 10.8% - Exports of goods, fob (in % of GDP): 3.9% 12.5% 13.5% 14.4% 13.1% 12.0% (note: source lists exports and subcomponents with additional percent entries) - Imports of goods, fob (in % of GDP): -58.6% -58.8% -54.1% -51.8% -48.5% -46.0% - Financing requirement and financing (as presented) - Financing requirement before exceptional aid and overall balance items shown in the source (percent-GDP lines as provided) ### Monetary situation — Scenario of the strategy (selected indicators and ratios) - Annual growth rates (Est./Projections, selected) - Net foreign assets: 2116.5% 20.6% 53.6% 5.4% 10.2% 6.9% (average 19.3%) - Net domestic assets: -30.5% 23.8% -13.2% 63.2% 41.6% 36.5% (average 30.4%) - Credit to the economy: 19.0% 29.4% 14.9% 80.7% 36.3% 33.2% (average 38.9%) - Money supply (M2) growth: 30.7% 22.5% 16.6% 31.9% 26.6% 24.2% (average 24.4%) - Ratios (in percentage of GDP and monetary shares) - M2/GDP and related ratios (selected entries): Rate of circulation (GDP/M2) 6.22 6.13 6.22 5.84 5.65 5.48 (average 5.78) - M2/GDP: 0.16 0.16 0.16 0.17 0.18 0.18 (average 0.17) - M1/M2: 0.36 0.37 0.37 0.37 0.37 0.37 (average 0.37) - Fiduciary circulation / Sight deposit / Time deposit (CDF) / Deposit in foreign currency (USD) provided as ratios in the source (e.g., 0.25 0.26 0.26 0.26 0.25 0.25) - Provisions for imports and monetary composition entries listed in the source (values presented in original tables) *Source: content unit _cr13226 - 179. Degree of openness INS / DEP of Commerce (extracted tables and annexes as provided)* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13226.pdf_