SECOND POVERTY REDUCTION STRATEGY CREDIT

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This Second Poverty Reduction Support Credit (PRSC2) builds on the first operation - PRSC-1 - and will support: a) key policy measures aimed at bolstering the medium-term macroeconomic framework; b) the cross-cutting public expenditure management reform, civil service reform, and decentralization programs; c) improved service delivery, good governance, and institutional capacity in the new sectors (i.e., Rural Transport, Agriculture, and Justice); and, d) continued implementation of the Health, the Education, the Rural, the Environment and Urban Sanitation, and the Forest Management programs, which includes an appropriate funding, execution, and monitoring. The PRSC2 project will help improve poverty reduction efforts, by strengthening public expenditure management and the effectiveness of service delivery. The line ministries are expected to become more responsible and efficient in budget formulation and execution. However, many risks exist, but the main risk is the economy's vulnerability to a further drop in cotton prices and/or cotton production; but, ongoing discussions with the Government and the other donors to accelerate reform of the cotton sector, should reduce this risk and make the sector more sustainable.