Sierra Leone

Statement by the World Bank Country Director, Mr. Matts Karlsson at the Consultative Group Meeting held at the Lagoonda Conference Hall

29-11-2006

Your Excellency the President of the Republic of Sierra Leone,
The Honorable Vice President,
Ministers and Members of Parliament,
Distinguish Delegates,
Colleagues,
Ladies and Gentlemen:

It is my pleasure to join my co-chairs in according all participants here the World Bank’s warmest regards and welcome to this fifth Consultative Group (CG) meeting for Sierra Leone held for the first time in Freetown. I thank the Honorable Vice President for his inspiring opening speech which we need note very clearly.

This year’s CG is not all about raising money; but more importantly, it is about taking stock of the progress we have made so far. We therefore need frank and candid discussions in order to fulfill this aim. As you are all aware, the first Annual Progress Report (APR) which reviews the implementation of the Poverty Reduction Strategy (PRS) for Sierra Leone from June 2005 through June 2006 is out. This report discusses actions taken in support of the objectives in the PRSP Results Framework Matrix that was presented during the 2005 Consultative Group meetings.

The World Bank acknowledges that since last year’s CG there has been significant progress in terms of putting the systems and structures in place to facilitate the achievement of targets in the PRSP results framework. We were particularly pleased with the signing on July 18 2006 of the Improved Governance and Accountability Pact (IGAP) between the government and donor community, which we consider as an important catalyst in achieving PRSP targets.

We commend the progress made in public financial management. We, however, think that there is still much to be done on the anti-corruption efforts. We welcome Government’s commitment to tackling corruption and note the considerable emphasis placed on anti-corruption measures in the Poverty Reduction Strategy. We are pleased that the decentralization of Government services has continued to advance and that there has been progress in promoting private sector development. We think that the approach to youth development may need revisiting. It is our candid view that the government’s support to agriculture and mining has started on a good footing, but the process needs to be strengthened. We consider the provision of infrastructure services as key to boosting food security initiatives in the country and private-sector led growth. The strong rise in primary school enrollment is also a good sign but more efforts are necessary to maintain the basic operational levels and quality learning environment of the increasing populated schools. We commend the government for the provision a variety of health services but recognize the challenges to bring health outcomes up to acceptable standards.

We congratulated the Government on its impressive record of macro-economic management which has fostered consistently strong economic growth and low inflation. Participants encouraged Government to continue its focus on improving public financial management and fighting corruption, as good economic governance is a key underpinning to poverty-reducing growth.

Focusing on the three key pillars of the PRSP, we acknowledge progress made in the followings areas:

Pillar One: Substantial progress has been made in public financial management. Improvements cover the full range of PFM issues including the regulatory framework, budget execution, procurement, the Office of the Accountant General, internal audit and external audit. The decentralization of Government services has continued to advance. As of early 2006, six ministries have devolved at least some of their functions covering services for agricultural crops, livestock, education, health, water supply, sanitation, gender, youth and sports.

Pillar Two: Progress was made in promoting private sector development and international trade through regulatory reform. Several diagnostic studies have been completed in recent years. They are now being translated into concrete policies, programs and projects. We see a much brighter future for business and job creation if the planned reforms are completed and implemented well.

Government has provided support for agriculture and food security, in conformance with the PRS. The government is encouraged to research the efficacy of these programs: the 2003/04 household survey shows that rice farmers are among the poorest of the poor. The 2006 Service Delivery Perception Survey (SDPS) suggests a need for improvements in the delivery of public services to agricultural producers. Only 12 percent of farm households reported any use of extension services provided by the government. In fact, 71 percent of all agricultural households reported that they had not been visited even once in the last year. This suggests the need for better coordination between the government and non-government extension service providers. We also believe more needs to be done particularly to improve farmer access to markets in Sierra Leone and abroad.

Progress was made in mining sector outcomes and the provision of mining services. According to the APR, the re-start of the rutile and bauxite mines in 2006 has directly created an estimated 1,400 new jobs in the mining areas. The government of Sierra Leone has also committed itself to ensure full implementation of the EITI during the October 2006 EITI Conference in Oslo, Norway. Government is encouraged to now build capacity at the Ministry of Mineral Resources to provide a competitive legal framework, establish a robust geological database and provide basic administrative, geological, and engineering services.

Pillar Three: The strong growth in primary school enrollment seen in previous years was maintained. The improvements in the sector are reflected in the 2006 SDP Survey in which about 85 percent of the survey respondents was satisfied with teacher performance. At the same time, 50 percent felt the system was getting better, 40 percent felt it had not changed (or had no opinion) and only 10 percent felt it was getting worse.

Government provided a variety of health services but much more will be needed in order to bring health sector indicators up to acceptable standards. The SDPS found that only 44 percent of those surveyed believed the quality of service was improving with rural respondents less satisfied than those in urban areas. The SDPS observed that 87 percent of the respondents had no knowledge of the essential drugs and other resources that were supposed to be delivered to their health units. The survey also found that many vulnerable groups (children, the elderly, pregnant and nursing women) were being asked to pay for services that are meant to be free to them. The sector’s issues are made worse by weak national infrastructure and inadequate staffing within the health system. In 2004, there were 0.45 medical personnel per 1,000 people, well below the World Health Organization standard of 2.5 per 1,000.

In spite of the outlined progress above, substantial challenges still persist:

First, the PRSP review does not address key fiscal management issues related to a needed widening of the fiscal envelope. The fiscal requirements of the Poverty Reduction Strategy continue to exceed available resources while Government remains heavily dependent upon external budget support which is often delayed or less than programmed. The solution is a bigger revenue effort, focusing, in the short-run, on phasing out ad-hoc waivers and exemptions and ensuring the uniform application of mineral fees and taxes within categories to all mining operations.

Second, limited progress was made in anti-corruption efforts. While a National Anti-Corruption Strategy (NACS) was published in February 2005 and the intelligence and investigative capacity of the ACC has been improved by the recruitment of additional staff and intensive training leading to many cases having been prosecuted, few of those involving high profile civil servants has been resolved.

Third, the strategy for youth development may need to be reconsidered. The APR documents more than a few efforts by Government, especially the Ministry of Youth and Sports, and its partners to create jobs and training opportunities for youth but these programs have limited coverage. It is also noteworthy that recent editions of “Doing Business” consistently report that Sierra Leone’s labor laws are among the most onerous in the world. Therefore, given the financial constraints faced by the government, a more effective strategy may be to empower the private sector to create more jobs through minimal but appropriate regulation and the provision of adequate infrastructure. The staffs also encourage the government to strengthen its role in improving the quality of labor supply through its health and education policies.

Fourth, building an effective civil service is a priority that will require continued attention from Government and its partners because weak institutional capacity remains a major constraint on PRS implementation. A recent study conducted for the Ministry of Finance found that the majority of the civil service (roughly 14 thousand out of 16 thousand) was in the lowest grades, constituting a workforce of clerks and messengers. Skilled professionals such as accountants, agronomists, chemists, doctors, geologists, and lawyers are in very short supply.

Finally, the outcome of the annual review points to the need for strengthening the monitoring and evaluation framework for the PRS. The APR documents good progress in the design of a reporting structure comprising all key sectors and all levels of Government. But it also observes that the capacity of the line ministries, local governments and other implementing units are generally lacking the capacity to provide the primary data required by the M&E framework.

In conclusion, we resolve that the Annual Progress Report provides an adequate assessment of PRS implementation through June 2006.