Poverty Reduction Support Credit I

closed

A series of three single tranche Poverty Reduction Support Credits (PRSCs), that will be provided in the form of budget support, is envisaged to support implementation of the Poverty Reduction Strategy Paper (PRSP). PRSC 1 will support the strategic axes of good governance (public expenditure management and anti-corruption), and promoting human development through improved service delivery in education and nutrition. In addition, strengthening monitoring and evaluation will lead to an enhanced accountability and results focus. PRSC 's support includes assistance to the Government in implementing its 2004 Priority Action Plan for public expenditure management reforms. This includes the preparation and submission to Parliament of the public finance framework law; improved alignment of the 2004 budget to the priorities of the PRSP, the reform of the Treasury, simplification of expenditure management process, the development and submission to Parliament of a new Procurement Code, and strengthening internal controls through the establishment of a General Inspectorate for Finances. PRSC 1 also supports the Government's anti-corruption agenda, including establishment of an operational Anti- Corruption Commission and the development of a national anti-corruption strategy. PRSC 1 also supports Axis 3 on providing human and material security, by supporting the development and implementation of the Government's Education for All Agenda and service delivery in nutrition. Key policy reforms have included an increase in the education budget, measures to decrease education costs for poor households (suppression of school fees, provision of learning materials to all primary students), actions to increase access for poor students (through school construction, salary compensation for teachers paid by parents, teacher recruitment) and reinforcement of management capacity at central and decentralized levels. PRSC 1 also supports policy and institutional reform in the nutrition sector. The Country Financial Accountability Assessment (2003) and the Country Procurement Assessment Report (CPAR, 2003), and the draft Public Expenditure Review (PER) provide the analytical underpinnings for the public sector reform agenda supported by this PRSC, and background work for the Education for All underpins reforms in this area. A supporting Technical Assistance Credit (Good Governance and Institutional Development) approved in November 2003 will assist the government in putting in place the systems to strengthen budget management, and finance technical assistance and capacity building needs. The credit would be disbursed in one tranche at effectiveness following effectiveness.