Download PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE

PROGRAM INFORMATION DOCUMENT (PID)
APPRAISAL STAGE
Report No.: AB7090
(The report # is automatically generated by IDU and should not be changed)
Project Name
Region
Country
Sector
Lending Instrument
Project ID
Borrower(s)
Implementing Agency
Date PID Prepared
Estimated Date of Appraisal
Estimated Date of Board
Approval
Corporate Review Decision
Other Decision {Optional}
I.
Economic Reform Grant
AFRICA
Comoros
Public expenditure, financial management and procurement
(20%); Civil service reform (20%); Governance and anticorruption (15%); Fisheries (15%); Energy (15%), Disaster
risk management (15%)
Development Policy Lending
P122941
Union of the Comoros
Vice Presidency in Charge of Finance
September 7, 2012
October 8, 2012
November 29, 2012
Appraise and Negotiate
Introduction and Context
1.
Comoros has experienced protracted political instability since independence in 1975. The
main source of conflict has historically been the sharing of power and resources between the
three islands. Tensions have eased somewhat in recent years. Broadly fair and democratic
elections were held in December 2010, and the new President was sworn in May 2011. No major
election is expected during 4 years, which presents an opportunity to advance policy reforms.
2.
Being one of the smallest African countries, with an estimated 670,000 inhabitants spread
among three islands, the country remains mired in poverty. Gross Domestic Product (GDP) per
capita is estimated at US$785. According to 2004 estimates, about 45 percent of the population
lives below the poverty line and poverty incidence is typically higher in rural areas and on the
island of Anjouan.
3.
In 2009, the Government adopted the country’s Poverty Reduction and Growth Strategy
Paper (PRGSP) 2010-14 which focuses on six clusters, namely, economic stabilization and
growth, institution-building and private sector development, strengthening governance and social
cohesion, improving health, and promoting education and vocational training and finally
promoting environment sustainability and civilian security.
4.
Since 2009, the donor community has increased its support to Comoros in light of
increased political stabilization and the Union government’s commitment to undertake a sound
macroeconomic and structural reform agenda. Given progress achieved on economic reforms,
Comoros reached the HIPC decision point in June 2010, and the government is focused on
implementing the triggers to reach the HIPC completion point by end December 2012.
II.
Proposed Development Objective(s)
5.
The Development Objectives of the proposed Economic Reform Grant is to strengthen
state capacity and accountability, thereby addressing some of the key underlying causes of
fragility in Comoros. The reforms supported by this operation are structured around two broad
policy clusters: (i) fostering public transparency and accountability; (ii) and (ii) Addressing
economic and social vulnerabilities.
III.
Preliminary Description
6.
The proposed Economic Reform Grant, in an amount of US$5 million, supports the
implementation of key reforms in Comoros PRGSP. It is a central element of IDA’s FY10-12
Interim Strategy Note (ISN). The ISN, which will soon come to an end and the country is
expected to reach the HIPC completion point later in 2012. Therefore, this DPO is a stand-alone,
single tranche operation. Going forward, the scope of future reforms and modalities for support
will be developed in the upcoming IDA Country Partnership Strategy, to be prepared after
Comoros has reached the HIPC completion point.
IV.
Institutional and Implementation Arrangements
7.
The Economic and Financial Reforms Unit (CREF) will be responsible for monitoring
reforms supported by the Economic Reform Grant, reporting progress and coordinating actions
with all ministries and entities, including at the Island level. The overall reform effort will be
reviewed by the Government in close coordination with regular Bank supervision to ensure
continued implementation of the program within an adequate macroeconomic policy framework.
V.
Poverty and Social Impacts and Environment Aspects
Poverty and Social Impacts
8.
The policy reforms supported by this Economic Reform Grant are expected to have a
positive poverty and social impact. Improvement of public financial management, strengthening
of public sector efficiency and accountability, better governance and declining corruption,
removing economic governance constraints to fisheries and energy sector’s development, and
addressing disaster management vulnerabilities have been identified as core objectives under the
PRSP. Improved budgetary and expenditure management will benefit the general public and
particularly the poor through (i) a reduction in leakages and (ii) a greater focus on poverty
reducing expenditures. Increased resources for poverty reduction are expected to be made
available through tightened controls over expenditures and stronger Treasury management, as
well as through improved management of the wage bill and by reducing the duplication of
administrative structures and programs across different levels of government. Taken together,
improvements in the reform areas targeted by this Economic Reform Grant should enable the
government move forward with implementation of its PRGSP and focus scarce resources on
priority social sector expenditures and disaster risk management.
Environment Aspects
9.
The proposed Economic Reform Grant focuses primarily on institutional reforms and
there are no direct significant effects on Comoros’s environment, forests, and other natural
resources. However the benefits to the environment stemming from reforms supported under the
proposed operation could ultimately be significant, particularly as they reinforce the
Government‘s PRSP which has environmental sustainability as one of its six core themes.
Through improved disaster risk management, public financial and public sector accountability,
the government is expected to be able to make better use of planning and funding instruments to
design and implement activities that will help the Comoros sustain its fragile island environment.
Through stronger economic governance, especially in the fisheries and energy sectors, the Union
and Island Governments will be able to address critical environmental issues, a process that has
proved difficult before now. In summary, the proposed operation is helping put in place the
institutional fundamentals for disaster risk management that ultimately should yield positive
environmental outcomes.
VI.
Tentative financing
($m.)
Source:
Borrower/Recipient
IDA
Total
VII.
Contact point
World Bank
Contact: Noro Aina Andriamihaja
Title: Economist
Tel: 5339+6045
Fax: +261202233338
Email: [email protected]
Location: Antananarivo, Madagascar (IBRD)
Borrower/Client/Recipient
Contact: MOHAMED ALI SOIHILI
Title: Vice President in charge of the Ministry of Finance
Fax: +2697644101
Email: [email protected]
VIII. For more information contact:
The InfoShop
The World Bank
0
5
5
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500
Web: http://www.worldbank.org/infoshop