SN- First Governance and Growth Support Project

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The development objective of the First Governance and Growth Support Credit Program for Senegal is to improve economic governance by strengthening Government accountability, increasing public sector performance, and promoting growth through private sector development. This program document states a first governance and growth support credit for the Republic of Senegal in the amount of SDR 35.8 million (US$55 million equivalent). This operation is the first of a new series of three Governance and Growth Support Credits (GGSCs), following a series of two Poverty Reduction Support Credits (PRSCs IV and V) completed over 2009-2011. The operation supports the recipient's efforts to improve economic governance by strengthening government accountability, public sector performance, and promoting growth through private sector development. Policies and reforms supported by this operation are well aligned with Senegal's National Strategy for Economic and Social Development (SNDES), which the Bank supports. The operation is also fully consistent with the objectives of the Bank's FY13-17 Country Partnership Strategy (CPS), to be presented to the Board in January 2013. The operation is rooted in the World Bank's Africa strategy. The operation is aligned with the first pillar of the Africa strategy employment and growth and emphasizes the governance foundation of that strategy. By helping create fiscal space, it also aims to improve the government's capacity to cope with external shocks the second pillar of the strategy. Gross Domestic Product (GDP) growth has slowed to levels not much above the rate of population growth and poverty remains high. The economy has shown little structural change, a continued dependence on remittances to fuel domestic demand, a growing reliance on capital-intensive exports while labor-intensive sectors faltered, and thus little job creation. The economy has suffered from the global slowdown, commodity price shocks and instability in neighboring countries, which has been exacerbated by the weakness of the domestic reform agenda.