Programatic Structural Adjustment Credit

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The Programmatic Structural Adjustment Credit (PSAC) Project will support implementation of the country's Poverty Reduction Strategy Paper (PRSP), by addressing key structural obstacles to poverty reduction, and assist Nicaragua with the urgent need to strengthen its depleted international reserves position, meet the agreed macroeconomic targets, and help reduce the country's vulnerability to a possible balance of payments crisis. This PSAC gives particular attention to the first, second, and fourth pillars of the PRSP, responding to the government's emphasis on the urgent need to accelerate economic growth, build the country's human resource base and improve governance. Within the first pillar, the PSAC emphasizes measures and policies to improve the private investment climate, especially to attract foreign direct investment and on strengthening the financial system, including the regulatory environment for micro-finance institutions. The project will support the second pillar of the PRSP by focusing on measures to raise the coverage and quality of primary education, increase the coverage and quality of basic health services, especially in rural areas, improve child nutrition indicators, increase the coverage of water and sanitation services, and strengthen reproductive health programs. Within the fourth pillar, the project emphasizes measures to improve transparency and strengthen public expenditure management.