AFRICAN DEVELOPMENT BANK GROUP

SIERRA LEONE

COUNTRY STRATEGY PAPER 2013-2017

Preparation Team

Mr. F. PERRAULT Director, ORWB

Mr. Y. BALDEH Resident Representative , SLFO

Mr. J. WAHOME Officer-in-Charge, OSFU

Mr. J. ZAYID Principal Country Economist, ORWB

ORWB/SLFO/OSFU/DEPARTMENT

August 2013

ACRONYMS AND ABBREVIATIONS i

CURRENCY EQUIVALENTS, WTS/MEASURES AND FY ii

EXECUTIVE SUMMARY iii

I INTRODUCTION 1

II COUNTRY CONTEXT AND PROSPECTS 1

2.1 Political, Economic and Social Context 1

2.1.1 Political Context 1

2.1.2 Economic Context 2

2.1.3 Social Context 6

2.2 Environment and Climate Change 7

2.3 Strategic Options 8

2.3.1 Country Strategic Framework 8

2.3.2 Strengths and Opportunities 8

2.3.3 Weaknesses and Challenges 9

2.4 Aid Coordination and Bank Group Positioning in Sierra Leone 10

2.4.1 Aid Coordination: Harmonization and Alignment of DPs 10

2.4.2 Bank Group Positioning in Sierra Leone 11

2.5 Lessons Learned from the Implementation of the Previous CSP (JAS) 12

III BANK GROUP STRATEGY FOR SIERRA LEONE 12

3.1 Rationale for Bank Group Intervention 12

3.2 Deliverables and Targets 14

3.3 Monitoring and Evaluation 17

3.4 Country Dialogue Issues 18

3.5 Potential Risks and Mitigation Measures 18

IV CONCLUSION AND RECOMMENDATION 19

4.1 Conclusion 19

4.2 Recommendation 19

List of Graphs

Graph 1 Political Context (2011) 1

Graph 2 Real GDP Growth (%) 3

Graph 3 GDP by Sector (%), 2011 3

Graph 4 Consumer Price Index, Inflation (Average %) 4

List of Boxes

Box 1 Transitioning Towards Green Growth 7

Box 2 Evolution of Role of SLFO 10

Box 3 Guiding Principles for Selectivity and Prioritization in the CSP 12

List of Tables

Table 1 Doing Business Indicators 5

Table 2 Potential Risks and Mitigation Measures 18

ANNEXES

Annex 1 Selected Macro Indicators: Charts and Figures

Annex 2 Comparative Development Indicators

Annex 3 Progress towards achieving the MDGs

Annex 4 Summary of 2012 Fragility Assessment

Annex 5 2013 Fiduciary Risk Assessment

Annex 6 Portfolio Status (as of end-May 2013)

Annex 7 2013 Country Portfolio Improvement Plan

Annex 8 Indicative Donor Division of Labor in support of Agenda for Prosperity

(2013 – 2018)

Annex 9 CSP Results Framework (2013 – 2017)

Annex 10 Indicative Resource Allocation (2013 – 2017)

Annex 11 Indicative Non-Lending Program (2013 – 2017)

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ACRONYMS AND ABBREVIATIONS

A4P Agenda For Prosperity (2013 – 2017)

AAA Accra Agenda for Action

ACC Anti-corruption Commission

ADF African Development Fund

AfC Agenda for Change (2008 – 2012)

AfDB African Development Bank

AWF Africa Water Facility

CCVI Climate Change Vulnerability index

CEDAW Convention on the Elimination of all forms of Discrimination Against Women

CLSG Ivory Coast –Liberia - Sierra Leone – Guinea

CPI Corruption Perception Index

CPIA Country Policy Institutional Assessment

CPIP Country Portfolio Improvement Plan

CPPR Country Portfolio Performance Review

CSO Civil Society Organisation

CSP Country Strategy Paper

DACO Development Assistance Coordination Office

DFID Department for International Development

DP Development Partners

DSA Debt Sustainability Analysis

ECOWAS Economic Community of West African States

EIB European Investment Bank

EITI Extractive Industry Transparency International

EPA Environmental Protection Agency

ESW Economic Sector Work

ESW Economic Sector Work

EU European Union

FDI Foreign Direct Investment

FHI Free Health Care Initiative

FSF Fragile State Facility

FY Financial Year

GDP Gross Domestic Product

GG Green Growth

GIZ German International Cooperation

GST Goods and Services Tax

GTF Governance Trust Fund

HDI Human Development Index

HIPC Heavily Indebted poor Countries Initiatives

IDA International Development Association

IFC International Finance Cooperation

IFMIS Integrated Financial Management Information systems

IIAG Mo Ibrahim Index of African Governance

IMF International Monetary Fund

JAS Joint Assistance Strategy

KfW Kreditanstalt für Wiederaufbau (German Development Bank)

MAF Mutual Accountability Framework

MCC Millennium Challenge Corporation

MDAs Ministries, Departments and Agencies

MDBS Multi Donor Budget Support

MDG Millennium Development Goals

ii

MIC Middle Income Country

MRU Mano River Union

MW Mega Watts

NRS National Recovery Strategy

OECD Organization of Economic Cooperation and Development

PAD Project Appraisal Document

PAF Performance Assessment Framework

PBA Performance Based Allocation

PEFA Public Expenditure and Fiduciary Assessment

PFM Public Financial Management

PIP Public Investment Program

PPP Public Private Partnerships

PRSP Poverty Reduction strategy Paper

PSG Peace-and State-Building Goal

RISP Regional Integrated Strategy Paper

RMC Regional Member Country

RWSSI Rural Water Supply and Sanitation Initiative

SL Sierra Leone

SLFO Sierra Leone Field Office

SLIHS Sierra Leone Integrated Household Survey

SME Small and Medium Enterprises

SSA Sub-Saharan Africa

TA Technical Assistance

TDF Transformation Development Fund

TI Transparency International

UA Units of Accounts

UN United Nations

UNIPSIL United Nations Integrated Peace – Sierra Leone

USAID United States Agency for International Development

WAPP West Africa Power Pool

WB World Bank

CURRENCY EQUIVALENTS

(As at end May 2013)

Currency Unit Leone (SLL)

1 UA = 1 SDR

1 UA = 6481.82 SLL

1 UA = 1.49877 USD

1 USD = 4324.8 SLL

WEIGHTS AND MEASURES

Metric System

1metric ton = 2204 pounds (lbs)

1 kilogram (kg) = 2.200 lbs

1 meter (m) = 3.28 feet (ft)

1 millimeter (mm) = 0.03937 inch

1 kilometer (km) = 0.62 mile

1 hectare (ha) = 2.471 acres

GOVERNMENT FISCAL YEAR

January 1 - December 31

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EXECUTIVE SUMMARY

1. This Country Strategy Paper (CSP) outlines the African Development Bank Group’s (AfDB)

programmatic support in pursuance of Sierra Leone’s (SL) development efforts over the 2013 – 2017

Period. The strategy was formulated in a participatory manner, guided by selectivity, and alignment

with Government’s Agenda for Prosperity (A4P) for the period 2013 – 2018 and key policies and

strategies of the Bank Group, as well as the evolving New Deal for Engagement in Fragile States for

which SL is a pilot country. In this context, the CSP reflects on the Bank’s mandate and comparative

advantage, and potential to leverage regional operations, co-financing and public private partnerships.

2. Since the end of the internal conflict in 2002, Sierra Leone has made significant progress in

consolidating peace and security country-wide and in rebuilding its economy that was nearly destroyed

by the decade long conflict. The country has successfully implemented two medium term development

strategies that invested in peace and state-building mainly through consolidation and infrastructure

enhancement and strengthening macroeconomic foundations by qualifying for debt relief under Highly

Indebt Poor Countries Initiative. The country is now classified as one of the world’s top ten business

reformers and is a net recipient of millions of dollars in foreign direct investment. Sierra Leone has

exhibited high robust economic growth rates, ranging from 6% to 15% annually per year. However, the

growth is significantly driven by the extractive industry and is largely non-inclusive and undiversified.

As a result, poverty rates are still high despite reducing between 2003 (66%) and 2011 (53%).

3. Despite this notable progress, the underlying drivers of fragility continue to pose significant

downside risks for the country’s development. High rates of youth unemployment, at 70%, gender

inequality, high levels of perceived and real corruption, weak human and institutional capacities and

poor economic governance systems, especially public financial management (PFM) and revenue

management systems, constrain the Government’s capacity to implement its development agenda.

Limited physical infrastructure, especially in energy, water supply and roads, inhibit inclusive and

sustainable growth and limits the country’s ability to implement its transformation agenda.

4. In responding to these critical challenges, the Bank proposes a CSP that supports key elements

of the A4P, based on broad consultations and selectivity principles. For these reasons, the proposed

strategy will focus on two pillars that are designed to deepen Sierra Leone’s transformation and

transitioning towards a more resilient development path. Pillar 1: Enhancing Economic Governance

and Transparent Management of Natural Resources Revenue will build on existing public

financial management (PFM) reforms and promote the transparent management of natural resource

revenues; and Pillar 2: Supporting Transformational and Sustainable Infrastructure Development

in energy, roads and water will facilitate inclusive green growth, foster regional integration and

enhance private sector development and competitiveness. Support to these critical areas would also

seek to diversify the economy into areas that are employment driven and inclusive in nature across

demographic, gender and geographic groupings. The regional dimension of fragility is also considered

in the formulation of the strategy as this would contribute to addressing the spillover effects of conflict.

5. The CSP places special emphasis on the following strategic themes: (1) private sector

development; (2) public sector capacity development; (3) gender equality and women’s empowerment;

(4) sensitivity to regional and social fragility through inclusion of vulnerable groups, especially youth;

(5) green growth and enhanced resilience to climate change; and (6) regional integration and trade. The

role of SLFO in policy dialogue and advisory support, portfolio management and resource

mobilization will be critical for the successful implementation of this strategy.

6. The Boards of Directors are invited to consider and approve the proposed CSP for Sierra

Leone covering 2013 – 2017.

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I. INTRODUCTION:

1. Following the decade long civil conflict which destroyed the social and physical fabric of the

country, Sierra Leone is making remarkable progress in recovery and transitioning into a stable

democratic and resilient state. The country however continues to experience some challenges stemming

from the root causes of fragility over the decade-long conflict that need to be persistently addressed

over the long-term. Some of these challenges are well captured in the Government’s medium term

development plan – “The Agenda for Prosperity, 2013-2018” (A4P) that builds on the achievements

of the Agenda for Change (AfC), and supports the country’s long-term vision of becoming a middle-

income country by 2035. The proposed new Country Strategy Paper (CSP) for Sierra Leone covers the

period 2013-2017 and selectively supports the country’s A4P objectives. The CSP is fully aligned with

the Bank Group’s Strategy (2013-2022) and the Regional Integration Strategy Paper (RISP) for West

Africa.1 The CSP is also underpinned by the relevant results of extensive economic and sector work

(ESW) carried out by the Government, Bank and other DPs2, while taking a participatory approach in

seeking inputs from diverse stakeholders.

II. COUNTRY CONTEXT AND PROSPECTS

2.1 Political, Economic, and Social Context

2.1.1 Political Context

Since the cessation of hostilities in

2002, Sierra Leone has registered

remarkable progress in its peace- and

state-building process, with an enduring

peace, shared political power and

constitutional rule manifested by three

national peaceful elections and

democratic transitions.3 This relatively

smooth transition continues to deliver peace dividends to citizens in the form of economic growth,

restoration of the rule of law, improved service delivery, and citizen participation in governance

through enhanced voice and accountability (see Graph 1). Sierra Leone has made good progress in

consolidating peace and strengthening security country-wide. The country once hosted the largest

peacekeeping mission in the world4 (18,000 UN troops), and is now a net contributor of security

personnel (Police and Armed Forces) to UN peacekeeping missions in other conflict-affected countries.

However, critical challenges in the security sector remain. These include very slow response time, the

perceived increase in crime rates and porous borders that facilitate transnational crime. Additional

challenges in the judicial system include limited access to representation and weak support to

vulnerable victims. Support for justice and security sector reforms is therefore critical. 1 For example, the CSP aims to: promote the twin objectives of inclusive and green growth; greater emphasis on selectivity; enhanced

innovative approaches to getting results, supported by a strengthened operational results framework; highlighting the regional

dimension of fragility and promoting regional integration. 2 Some of the key studies underpinning the CSP include:: (i) AfDB: Sierra Leone Infrastructure and Growth Flagship report; Green

Growth Stocktaking report; Gender Profile; (ii) DFID: Growth Diagnostics study; Fragility Assessment; (iii) WB: TA support to

Sierra Leone Integrated Household Survey; Growth Poles Diagnostics study. 3 This includes three successful presidential elections meeting international credibility standards with relatively peaceful post-election

transitions. The recently concluded 2012 elections were multitier – Presidential, Parliamentary and Local Councils. 4 Year 2000-2001

2

3. Fragility Status and Evolution: Sierra Leone continues to be classified as a ‘fragile state’

based on several assessments, including the Multilateral Development Bank’s framework for assessing

fragility as well as the country-led fragility assessment (see Annex 4) undertaken in 2012 as part of

implementing the New Deal for Engagement in Fragile States that was endorsed by partner countries

and donors at the Fourth High Level Forum on Aid Effectiveness held in Busan in 2011. Sierra Leone

has also been active in the International Dialogue for Peace and State-building, is one of the g7+

countries, and a signatory to the New Deal. As a pilot country for the New Deal, Sierra Leone was one

of the first countries to conduct a fragility assessment, which confirmed that the country has made

considerable progress in moving out of fragility though critical challenges remain going forward. The

country is also developing country systems and procedures and strengthening skills to enable the

structures to function. Two key indicators that point to the country’s positive transition from fragility

are: i) the expected winding down of UNIPSIL in March 2014, and ii) the steady rise in Country Policy

Institutional Assessment (CPIA) scores over the last few years. Given this context, there is emerging

consensus among the international development community that Sierra Leone has turned the corner and

is now in a positive trajectory towards transforming into a resilient stable country. However, there is

also evidence showing the persistence of some of the underlying drivers of fragility, suggesting the

need to carefully assess and manage Sierra Leone’s transition in order to comprehensively address the

root causes of fragility. For example, one of the fundamental socio-economic challenges is ensuring

that the country’s growth dividend is inclusive and spreads across different segments of society,

irrespective of age, sex or region. The Gini coefficient is still high5 with 50% of income attributable to

the top 20% of the population. Rapid economic growth has had limited impact on poverty reduction

and employment generation, creating resentment and limited trust in the Government.

2.1.2 Economic Context

4. Structure of the Economy and Growth Drivers: The economy is driven by primary

commodities, mainly agriculture and mineral production. The economy is presently undergoing a shift

in the size of its major components as informed by movements in the sizes of their contributions to

gross domestic product (GDP) – see Graphs 2 and 3. The mining sector contribution to GDP is projected

to substantially increase from 4% in 2011 to 22% in 2013 and is anticipated to reach 30% in 2017 due

largely to the expansion in existing large scale iron ore operations. Agriculture including forestry and

fisheries still accounts for the largest GDP share but that share is declining - reducing from 52% in

2011 to an estimated 42% in 2013. Despite this declining trend, the agriculture sector is still the largest

employer, and accounts for over 70% of the current labor force. The mining sector, the current driver of

growth in the economy, accounts for less than 3% of total formal labor force, due mainly to the capital-

intensive and enclave nature of mining operations and reliance on highly skilled labor. The service

sector, which is led by banking, retail, transport and tourism, has a 28% share of GDP in 2013, having

slipped downwards from 35% in 2011. The manufacturing sector, mainly driven by cement and light

scale consumer products is still relatively incipient and weak, and accounts for only 2% of GDP due to

limitations in energy supply, weak infrastructure and poorly developed markets. Off shore oil and gas

exploration is ongoing with additional block concessions contracted to renowned oil companies in

October 2012. While the prospects of oil discoveries are imminent, commercial viability is expected to

be achieved after 2017.

5 The Gini coefficient was at .37 in 2003.

3

5. Macroeconomic Performance: Sierra Leone’s economic growth performance has been robust

during the past ten years, with growth rates consistently higher than the Sub-Saharan Africa (SSA)

average. After successful post conflict economic recovery with growth rates averaging 6% between

2002 and 2007, the post 2008 financial crises saw growth rates slumping to 3.2% in 2009 and

rebounding to 5.5% in 2010/2011. In 2012 however, there was a one-off phenomenal growth rate of

16.7 %, driven mainly by first-time iron ore exports6 from two large-scale operations. The non-iron ore

growth driven by agriculture, construction and

services was around 6%. Implementation of the

International Monetary Fund’s (IMF) program with

the Government7 (ECF 2010-2013) came to an end

during the fourth and final review in May 2013.

Program implementation was challenging but

satisfactory as the Government met most of the

program’s critical structural benchmarks and

quantitative performance criteria. Assessment of the

current macro-economic framework pointed to

improved stability with some risks that need to be

consistently addressed. A successor program is

currently being developed for the next three-year

cycle and will be presented to the IMF Board in

September 2013.

6. Fiscal policy has been largely restrictive

during the past two years preceded by post recovery

expansionary fiscal policy. Expenditure tightening was supported with tax policy reforms to enhance

revenue performance. One key structural tax reform was to broaden the tax base by introducing the

Goods and Services Tax (GST) in early 2009. This was partly responsible for the increased revenue-to-

GDP ratio moving from 10% to 13% of GDP between 2009 and 2011. However, despite these modest

gains form ongoing tax policy reforms there is significant backlog of tax reforms required to improve

revenue performance, which is currently assessed as sub-optimal and far below its actual potential. The

revenue-to-GDP ratio is below the SSA average and even below fragile state comparator countries.

Expenditure performance on the other hand has been pro-cyclical during the past ten years, expanding

from US$ 133 million in 2002 to US$ 530 million in 2012. The rate of expenditure expansion in the

past two years has declined due to fiscal consolidation measures. However, capital expenditure has

been on the increase due to the Government’s extensive roads rehabilitation and reconstruction

programs. Total expenditure, including lending, has gradually declined, moving from 21% (of GDP) in

2011 to 19.4 % in 2012. The estimate for 2013 indicates a further modest decline to 18.8%. The

restrictive fiscal policy has improved the fiscal deficit position, moving from 4.6% percent of GDP in

2011 to 1.2% of GDP in 2012.

7. Debt: The joint WB-IMF staff debt sustainability analysis (DSA) for low-income countries

indicates that the risk of debt distress continues to be moderate with an external debt to GDP ratio of

29% in 2012 having declined from 142% in 2005 just before achieving HIPC status in October 2006.

Domestic debt to GDP ratio declined from 18.4% in 2007 to 11.1% in 2012 due mainly to reforms in

capping domestic debt and declining domestic interest rates. The structural initiatives to consolidate

6 African Minerals Ltd and London Mining Ltd commenced industrial production and Exports 7 Extended Credit Facility 2010 -2013

4

and sustain long term debt include passing a comprehensive national debt law, capping Central Bank

borrowing to 5% of previous year’s revenue, adopting a procedures manual in 2010, and a debt

reduction program for external commercial creditors. Based on the DSA, the country is at a low risk of

future debt distress but remains vulnerable to adverse external shocks. This is important for achieving

sustainable debt consistent with macro-economic growth and stability. Government, in collaboration

with the WB and the IMF, will develop a medium term debt strategy that will help guide Government

borrowing and overall debt management.

8. Monetary policy has been focused on a clear objective of targeting single digit inflation which

is achieved by mopping up excess liquidity and maintaining price stability that is consistent with the

country’s macro-economic fundamentals. Inflation reached a peak of 18.4% in 2010 due largely to food

and fuel price hikes during the 2008 financial crises, one-off GST effects and pro-cyclical fiscal

policies. The Government targeted end-year inflation rate of 11% in pursuit of the single digit inflation

objective (13.7% year-on-year) for 2012 was largely achieved. The exchange rate has also been very

stable during the past three years supported strongly by

sizable capital inflows into mining and agriculture.

9. The current account deficit including grants

increased in 2011 to 52.3% of GDP due to importation

of machinery for mining and construction, and

declined to 44.0% in 2012 due to the commencement

of iron ore exports. The current account deficit is

projected to shrink to 11.6% in 2013 as mining firms

transition from mobilization to production thereby

reducing imports and increasing exports (exports

creased by 110% in 2012 over 2011).

10. Medium Term Economic Outlook: Economic prospects for the period of 2014-2016 remain

promising, with growth rate forecast at 12% to 14%, doubling the average growth rates for SSA,

mainly driven by mining production8, with non-mining growth (driven by agriculture and construction)

remaining buoyant at around 6%. Downside risks to the outlook are expected to be exogenous shocks

on iron-ore prices and demand and to a lesser extent diamonds. The period is also expected to witness

investments in large-scale agriculture that would maintain the sector’s status as the main employer and

a key driver of economic activity.

11. Governance: In the past decade, the country has made significant progress in Good

Governance. According to the Mo Ibrahim Index of African Governance, Sierra Leone improved in

ranking from 48th

(2011) to 30th

(2012) out of 52 countries. The 2011 Worldwide Governance

Indicators also reflect Sierra Leone performing well on the six dimensions of governance. While it has

maintained performance in terms of voice and accountability and political stability in recent years,

major challenges continue in the areas of government effectiveness (9.95 on a scale of 0 to 100), rule of

law (22.54), and control of corruption (26.54).

12. On the PFM front, based on the 2010 Public Expenditure and Financial Accountability

(PEFA) assessment and the CSP team’s 2013 field review, most of the PFM indicators recorded a

positive trajectory (see Annex 5 for detailed Fiduciary Risk Assessment). The major improvements

were recorded in external scrutiny, and aspects of financial reporting. Financial reporting has especially

8 Iron-Ore production and exports is expected to increase from 5,500 mt to 12,500 mt between 2012 and 2015.

5

benefitted from the implementation of the Integrated Financial

Management Information System (IFMIS) which currently

covers about 60% of the budget, with ongoing roll out to

ensure eventual full accounting through IFMIS. The Auditor

General’s Office (Audit Services Sierra Leone) has been

strengthened and has been able to complete the statutory audit

within the stipulated time.

13. While the country has made some progress in

structural and regulatory governance reform, there continues

to be significant gaps between PFM policies, and procedures

and their actual implementation in practice in MDAs and at

local level. Sierra Leone’s temporary suspension from the Extractive Industry Transparency International

(EITI) Board in February 2013 due to failure in meeting 4 of the 21 EITI benchmarks manifests

systemic governance challenges in managing revenues from the extractives sector. Moreover,

corruption continues to be a serious challenge for country’s public and private sectors. In 2012, Sierra

Leone scored 31 on a scale of 0 (highly corrupt) to 100 (highly clean) in the Corruption Perception

Index, ranking 123 out of 176 countries. Anti-corruption institutions lack adequate resources, staff and

expertise to effectively combat corruption despite the extension of power for the Anti-Corruption

Commission to prosecute cases.9 The fight against corruption will remain critical in the medium term,

especially in the wake of anticipated revenues from its minerals sector and weak PFM capacities at

central and local council levels.

14. Business Environment: Sierra Leone’s formal business sector is relatively small and gradually

evolving but the country is rated as one of the world’s top ten business reformers, moving from

176/185 countries to 140/185 within a five-year period. Notable business reforms include starting a

business (ranking 76/185); it takes 12 days (improved from 300 days) to start a business. The country

has witnessed significant private sector inflows as foreign direct investment (FDI) has increased three-

fold during the past five (5) years. However, despite these gains, the MCC growth diagnostics study

concludes that the most binding constraints for Sierra Leone’s growth are linked to the critical

infrastructure gaps in energy and roads transport, which if not addressed adequately, will severely limit

private sector growth. This assessment was supported by the Bank’s flagship Infrastructure study on

Sierra Leone (2011) and is consistent with its position in the Africa Infrastructure Index, where the

country remains constant at 49/52 countries (between 2006 and 2009). Even though substantial

infrastructure investments have occurred between 2009 and now, the gaps are still huge. .

15. Financial Sector: The financial sector has seen significant expansion during the past five years

with strong growth in the number of banking and financial institutions in response to the significant

increases in FDI. There has also been a corresponding increase in the number financial services and

products. The depth of the financial sector is also quite shallow with the absence of a viable stock

market and the lack of a sovereign credit rating. Much progress has been made in bringing prudential

guidelines in line with the Banking Act of 2011, with supervision and oversight by the Bank of Sierra

Leone. Access to credit is low, especially for the rural poor including small holder farmers and SMEs

due to high interest rates. Commercial banks have a limited capacity to assess credit risk. Property

rights are weak with few legal means to enforce debt repayment, and there is limited collateral

information on creditors. Interest rates for commercial loans have however been steadily declining

from 22% in 2010 to 15% in 2013 as a result of Government’s recent policy to limit borrowing in the

9 Out of 273 cases investigated in 2012, only 22 led to convictions.

6

financial market. The limitations on long term financing are severe and this sets barriers to domestic

business growth and regional FDI.

16. Regional Integration and Trade: Sierra Leone is an active member of the Economic

Community of West African States (ECOWAS). The Government’s regional integration objective is to

increase trade volumes across borders with neighboring countries especially the Mano River Union

(MRU) and ECOWAS region. Intra-regional trade is weak across the MRU region and accounts for

less than 1% of total trade volumes. Regional integration would be enhanced by connecting borders and

towns across neighboring countries within the MRU region and creating free economic zones and trade

hubs in strategic border towns. Such support is expected to enhance intra-Africa trade and provide

gainful and productive employment opportunities to the youth and women. Strengthening regional

integration would pay off in terms of reducing the risks of spillover of conflict and improving cross-

border trade.

2.1.3 Social Context

17. Poverty and Inequality: Sierra Leone has made substantial progress in its socio-economic

indicators since the end of the war, moving 10 places upwards from the unenviable human

development position it held a few years ago. Despite these improvements, there are significant

challenges in socio-economic development characterized by its continued fragile status. Results from

the 2011 Sierra Leone Integrated Household Survey (SLIHS) indicate a decrease in the poverty rates,

from 66% in 2003 to 52.9% in 2011, with the decline being more in urban relative to rural areas.

Underlying this poverty reduction was an annualized 1.6% per capita increase in real household

expenditure from 2003 to 2011. Urban poverty declined from 46.9% in 2003 to 31.2% in 2011. District

level poverty analysis showed that by 2011 most districts had converged to poverty levels between 50

and 60%, with the exceptions being Freetown at 20.7%; and 64% percent of households in the top two

quintiles were found in the western urban areas.

18. Progress on MDGs and Other Social Indicators: On a comparative basis, Sierra Leone ranks

below most African countries for many social well-being indicators. As is the case with other fragile

states, progress towards meeting the MDGs remains a critical challenge (see Annex 3). The country

has, however, improved its position in the Human Development Index (HDI), moving from 0.252 in

2000 (ranking 187/187 countries, reflecting the war torn status) to 0.359 in 2012 (ranking 177 out of

187 countries). Despite the achievement of moving 30% upward in the index during the twelve-year

period, the country lags behind the Sub-Saharan Africa HDI average of 0.475. The country ranks

poorly with its neighbors, even at the MRU level: only 40% of the rural population has access to an

improved water source; Guinea has 59% of its rural population accessing water; while in Ivory Coast

the figure is 66%. For sanitation, Sierra Leone has only 13% of its population having access to

improved sanitation compared to Guinea, which has 19%, Liberia 32%, and Ivory Coast 24%. The Sub

Saharan Africa’s average for sanitation access is 39%. The figures are similar for urban water supply.

19. Youth Challenges: Sierra Leone has a youthful population, with 63% of the population below

the age of 25 years. Due to the civil war, a large proportion of this population has limited education or

vocational skill levels, thereby adding further challenges to their absorption into the small formal labor

market in Sierra Leone. With youth unemployment projected to reach over 70%, during the next five

years there is a need to create over 300,000 jobs to engage different categories of unskilled and skilled

youths. Creating such jobs shall certainly require a more robust economic growth rates than the current

rate that is sustained over the long-time. The A4P outlines multi-sectoral strategies for generating the

required employment opportunities, with a strong youth orientation, and driven by inclusive private

sector development.

7

20. Gender Equality: The Government of Sierra Leone has enacted various laws to ensure the

protection and promotion of the rights of women and children. The National Policy on the

Advancement of Women and the National Policy on Gender Mainstreaming – were adopted in 2009 to

guide the government’s gender-equality aspirations.

21. In spite of the efforts made to close the gender gaps, considerable disparities still exist. Sierra

Leone ranked 139 out of 148 countries in the 2013 Human Development Report’s gender inequality

index. In Sierra Leone, only 9.5% of adult women have reached a secondary or higher level of

education compared to 20.4% of their male counterparts. For every 100,000 live births, 890 women die

from pregnancy related causes; and the infant mortality rate is 104.2 per 1000 live births. Women

continue to suffer from significant inequalities in terms of literacy rates, access to land, and legal

protection. According to a CEDAW survey in 2009, 63% of women in urban areas and 84% in rural

areas are engaged in the informal sector, hampered from reaching their potential by poor and unequal

access to land (based on customary practices), skills training, appropriate technology, functional

literacy and information on markets and finance. Female participation in the labor market is 66.3%

compared to 69.1% for males. Women have made strides to attain gender equality in key decision-

making positions; they currently occupy 12.9% of parliamentary seats. An affirmative action bill

allocating 30% of leadership positions to women is pending a constitutional review. The Government

(through Bank support) has prioritized gender issues in its A4P, by having a dedicated pillar for gender

and women’s empowerment, as well as mainstreaming these themes in the other pillars.

2.2 Environment and Climate Change

22. Sierra Leone has serious

environmental challenges. The 2010

Environmental Performance Index ranks

Sierra Leone at the bottom (163rd out of 163

countries), and registers some significant

regressions since the end of the civil war.

Therefore, managing natural resources more

sustainably is critical in Sierra Leone, both

from environmental and economic

perspectives, since key development sectors

(mining and agriculture) rely on sound

natural resources management. Sierra

Leone’s environmental challenges will be

compounded with the effects of climate

change. Recent projections indicate that the

mean annual temperature may increase by 1.0

to 2.6°C by the 2060s. Considering its low

level of development and capacity to cope

with extreme events, the country is

considered as very vulnerable to the adverse

effects of climate variability.

23. The Government has realized that

strong economic growth will require that

environmental and sustainable management of natural resources policies be effectively formulated and

implemented to avoid the risk of irreversible damage. The Government, with support from the Bank, is

Box 1: Transitioning Towards Green Growth

As part of its broader effort to support RMCs in transitioning

towards a greener economy in line with the Bank’s Strategy

2013 – 2022, the Bank provided technical assistance to the

Government of Sierra Leone to mainstream Green Growth in

the A4P. In the A4P, Sierra Leone has articulated a pathway

for inclusive green growth and has taken a leadership role

among African countries in its commitment to this pathway.

The work done in Sierra Leone has been showcased in global

and regional fora on Green Growth organized by OECD and

the Bank.

The Government of Sierra Leone and the Bank share the belief

that green growth can bring high-quality growth to all Sierra

Leoneans, with more jobs, greater resilience and better

infrastructure. Sierra Leone recognizes that natural resources

are the foundation of growth and economic diversification for

the country. As the revenues generated by extractive industries

are expected to increase substantially, it becomes critical to

further improve governance, revenue management and

equitable sharing of the benefits for all Sierra Leoneans. A4P

also emphasizes that improved infrastructure - transport and

energy are especially vital to inclusive green growth and

enhanced competiveness.

This is essential for Sierra Leone as it transitions from fragility

to a more resilient and stable development track.

8

committed to pursuing a Green Growth path, as already reflected in its A4P (see Box 1). The

establishment of the Environmental Protection Agency has strengthened the national capability to

monitor and reinforce policies for addressing environmental issues appropriately.

2.3 Strategic Options

2.3.1 Country Strategic Framework

24. Government’s Development Strategy: The Government has built on the relevant lessons from

the AfC10

to finalize the A4P. Its goal is to reduce poverty through promoting sustainable inclusive

green growth to achieve middle-income country (MIC) status by 2035. This ambitious long-term vision

requires a sustained average economic growth rate of 7% annually and a structural transformation from

dependency on primary products to a value addition (agriculture and mining) oriented economy that is

economically diversified and sustainable. This also requires Sierra Leone consolidating its peace- and

state-building gains and effectively managing its transition towards a resilient stable country.

25. The A4P has eight complementary pillars, comprised of 33 strategic sectors and themes, key

outcomes and targets, and prioritized interventions. These are intended to reflect the aspirations and

priorities arising from extensive multi-stakeholder consultations in all regions of the country. The

pillars are: 1) Economic Diversification; 2) Managing Natural Resources; 3) Human Development; 4)

International Competitiveness; 5) Employment and Labor; 6) Social Protection; 7) Governance and

Public Sector Capacity; and 8) Gender and Women’s Empowerment.

2.3.2 Strengths and Opportunities

26. Peaceful and Stable Political and Economic Environment: Sierra Leone has made good

progress in consolidating peace and enhancing security country-wide. This positive trend, coupled with

sound management has enabled macro-economic performance to be sound and robust, creating a solid

foundation for resilience as it transitions out of fragility.

27. Extensive Natural Resource Endowment: Sierra Leone is well endowed with both renewable

and non-renewable resources. These include: i) for renewables: marine resources, forestry, fertile land

and water resources; and ii) for non-renewables: rutile, diamond, bauxite, iron ore, gold, and potentials

in oil and gas. Managing these resources sustainably and transparently will not only generate

significant revenues for the country but could also potentially stimulate rapid expansion of a diversified

economy creating more jobs, especially for the youth. This would be critical in addressing the drivers

of fragility and maintaining inclusive green growth during the A4P period and beyond.

10 The A4P highlights and takes into account the following key lessons from the AfC: (i) the urgent need to strengthen effective inter-

ministerial collaboration and coordination; (ii) importance of managing effectively external shocks; (iii) need for flexibility to enable

new strategic and unforeseen initiatives; (iv) importance of strengthening monitoring and implementation arrangements and

functionality; (v) importance of predictability and timely disbursement of funds; and (vi) greater attention to effective capacity

building.

9

28. Strong Reform Environment and Momentum: Over the years, Sierra Leone has pursued a

strong reform agenda whose emerging outcomes are enabling the country to transition progressively

out of fragility, to a sustainable development and resilient state. Continued strong leadership will be

critical to consolidate and deepen the compendium of governance related reforms.

2.3.3 Weaknesses and Challenges

29. Weak Human and Institutional Public Sector Capacity and Governance: One of Sierra

Leone’s binding constraints to rapid and sustainable development is the weak human capacity (as

reflected by low education indicators) and limited public sector institutional capacity, at all levels and

regions. The public sector is facing major effectiveness and efficiency challenges, especially in PFM,

human resources, strategic institutional coordination, management of natural resource contracts, and

monitoring and evaluation systems. Despite improvements in CPIA scores, relatively good PEFA

assessments, and other governance indices, the challenges in economic governance and achieving

adequate levels of transparency and accountability remain high. For example, the failure to meet EITI

compliance status after two successive attempts reflects the depth of these public sector challenges.

30. Limited Physical Infrastructure: Recent diagnostic studies demonstrate that Sierra Leone’s

poor infrastructure, especially of roads, water supply, and energy11

, pose serious development

challenges and are the key binding constraints to the productive sector (e.g. agricultural value chain

development, fisheries, tourism, small scale manufacturing, etc.) for growth and employment. During

the period of the Bank’s CSP, there is need to ensure that the implementation of the A4P addresses

adequately the most relevant policy, institutional, regulatory and investment constraints, including

public private partnership (PPP) opportunities to close the significant infrastructure financing gap.

31. High Youth Unemployment: Youth unemployment (over 70%), coupled with limited levels of

education and vocational skills, poses serious challenges. This key driver of fragility has the potential

to undermine stability and reverse peace gains. Despite the adoption of a Local Content Policy and an

appropriate strategy in the A4P, there are challenges, including limited access to finance, which need to

be addressed effectively in order to stimulate small and medium-sized enterprises (SMEs) development

that could potentially bolster economic growth and diversification, thereby creating much needed

employment opportunities. Also, appropriate vocational/skill training opportunities need to target

young men and women.

32. Low Domestic Resource Mobilization Efforts: There has been significant improvement in

domestic revenue collection during the past 10 years, however, domestic revenue to GDP ratio is still

far below its potential and still low compared to the SSA average and even for post conflict countries.

For instance, Liberia’s Revenue to GDP ratio is 18% compared to Sierra Leone’s 12.6%. This has

resulted in budget overruns financed largely from borrowing in domestic banking system which tend to

crowd out the domestic private sector as a result of high interest rates. Effective collection and

efficient management of domestic revenues generated by the extractives sector would increase

domestic revenues to SSA levels and limit financing of the budget from domestic debt.

33. Weak Regional Integration: The MRU is endowed with resources that stretch across borders

but its member countries continue to be fragile and face challenges of integration and trade, particularly

in the areas of hard infrastructure (road transport, ports, energy) as well as soft infrastructure (financial

11 For example, (i) only 9% of the country’s population has access to grid-based power supply; (ii) only 8% of the total road network is

paved and only 21% of the rural population resides within 2km of all-weather road; and (iii) only 57% has access to improved water

supply, and only 13% has access to non-shared sanitation.

10

markets, investment and business regulation and procedures, border management, and policy

harmonization). Given the region’s history of conflict spillovers across borders, this regional fragility

continues to pose security threats to all 4 member countries including Sierra Leone. To this effect, it is

imperative to adopt a regional perspective in addressing the drivers of fragility and the binding

constraints of the respective MRU member states. The Bank’s proposed Mano River Union

Initiative12

seeks to achieve this.

34. Commodity Price Shocks: As the undiversified and non-competitive economy is largely

driven by mining revenues, at least in the medium term, its fundamentals would be exposed to global

commodity price fluctuations and possible shocks. Accordingly, the economy and Government’s

purchasing power and potential revenues for funding its A4P would be vulnerable to volatile

movements of mineral prices. This scenario could adversely affect economic stability and

Government’s ability to fund A4P priority interventions. The proposed setting up of a Transformation

Development Fund (TDF)13

will help in mitigating the effects of these shocks to some extent.

2.4 Aid Coordination and Bank Group Positioning in Sierra Leone

2.4.1 Aid Coordination: Harmonization and

Alignment of Development Partners

35. Aid Coordination: Sierra Leone has a

high dependency on donor assistance (ODA

received/disbursed as a percentage of GNI

amounted to 14.6%, 2011). Major Development

Partners (DPs) include: DFID, the EU, WB, the

UN family, and the Bank. DFID is the major

bilateral donor and Germany, USAID, China,

Japan and Ireland also have a strong presence.

Within the context of the Busan New Deal,

Government and DPs have made a firm

commitment to establish a Mutual

Accountability Framework (MAF) between the

Government and the donor community. The

proposed MAF is expected to set the terms of

the partnership required for the successful

implementation of the A4P, including steps

towards enhanced alignment and harmonization,

and increased use of country systems, which will

be strengthened with support from the Bank and other DPs. Indicators for the MAF will be composite,

and derived from existing frameworks such as the New Deal Peace- and State-Building Goals, CPIA,

PAF, MCC Compact, and aligned with the Results Framework of the A4P. The Government has

several instruments to manage aid coordination, including a Development Partners Group, which meets

quarterly. The Government through its Development Assistance Coordination Office (DACO) oversees

12 This initiative proposes a major effort to address the region’s infrastructure gap in road transportation and energy, which would

connect people within and between these countries, promote trade and private sector development, with a view to assisting the region

transition out of fragility and instability. 13

The A4P proposes the establishment of a Transformation Development Fund, through which receipts from natural resources would

initially be placed and earmarked for transformative public investments. The Fund would also be used for stabilization purposes to

help cushion the effects of volatility of global market prices and slow-down on demand.

Box 2: Evolving Role of SLFO

The opening of the Sierra Leone office in 2007 and its

progressive technical staffing (both international and national

staff), has enabled deepened and continuous country dialogue

on substantive issues, improved monitoring and portfolio

management and resulting better performance, provision of

timely implementation assistance to Bank supported project

teams, and more effective coordination with DPs.

The Bank is an active member of the Development Partners

Group (DPG), Multi Donor Budget Support (MDBS) Group,

and the United Nations Country Team. The Bank, through

SLFO, will continue to play leadership roles in the thematic

areas of Gender and Green Growth. With the recent transfer of

an international water sector specialist from Tunis to SLFO,

the Bank is expected to play a lead role in the Water Sector

Working Group. The Bank will also assume joint leadership

of the Roads Working Group, together with the EU.

The Bank through SLFO has also proactively used Trust

Funds and the Bank’s Fragile State Facility Pillar III to

respond to urgent TA requests from the Government (e.g.

MCC Compact Development and setting up the PPP unit)

11

donor coordination and promotes a division of labor amongst DPs which reflects comparative

advantages and which guides the closing of strategic funding gaps. See Annex 8 for a preliminary

indicative division of labor, which appears to be emerging to support the A4P funding requirements.

Box 2 highlights ways by which SLFO has enabled the Bank to play a more active role in supporting

Government’s leadership role in strengthening donor coordination and effectiveness, while also

enabling the Bank to forge stronger partnerships with a wider range of DPs.

2.4.2 Bank Group Positioning in Sierra Leone

36. Bank Group Portfolio and Assessment: As of 31 May 2013, the Bank Group’s active portfolio

for Sierra Leone comprised ten (10) on-going operations at different stages of implementation; with a

total commitment of UA 116.1 million (see Annex 6 for details). The Bank Group’s assistance spans

across different sectors. Infrastructure, private and Governance sectors are among the Bank’s priority

sectors and constitute 88.5% of the Bank’s total commitments. The other sectors in the Bank’s portfolio

include agriculture, social and financial sectors. The Bank’s portfolio also includes two multinational

operations - the West Africa Monetary Zone Payments System Project and the Capacity Building and

Technical Assistance to the Mano River Union Secretariat. The average portfolio age is 2.2 years,

including one ageing project which is closing at the end of 2013.

37. Portfolio Performance: The overall performance of the Bank’s portfolio is satisfactory, with a

rating of 2.4 (scale of 0 - 3). The projects at risk (PAR) has declined from 50% in 2011 to 14.3% in

2012 and has been maintained at that level in 2013, while the commitment-at-risk increased from 8.4%

to 18% between 2012 and 2013 due to the current rating of the Addax Bioenergy Project (which

accounts for 18.7% of the portfolio) as a problematic project (PP). However, the cost overrun issue

which threatened the project’s implementation in recent months has been addressed and the project is

now on course. Typical portfolio challenges include delays experienced in project start-up activities, in

fulfilling loan/grant conditions for disbursement effectiveness and capacity constraints of contractors

and consultants/supervising engineers to complete projects in a timely manner. Bank’s training in

contract management planned for implementation units, is aimed at addressing these challenges going

forward. The cumulative disbursement amounted to UA 46 million, representing a cumulative

disbursement rate of 40%. The disbursement rate is projected to significantly increase as some projects

within the portfolio are expected to start disbursing by September 2013.

38. Country Portfolio Improvement Plan and Continued Key Challenges: The CSP preparation

mission included a full day Country Portfolio Performance Review (CPPR) workshop to review

implementation progress and update the action plan of the Country Portfolio Improvement Plan (CPIP)

developed in 2012 (see Annex 7). The CPIP highlights challenges in three broad areas: (i) Project

Design/Appraisal (including M&E aspects), (ii) Civil Works (including contract management); and (iii)

Fiduciary Issues (Procurement, Disbursement, Financial Management and Audits). Overall progress in

addressing the specific issues has been positive. Special attention was paid to updating key actions

which will address: delays in execution of civil works that generally result in cost overruns; ways to

continue strengthening and adopting country systems especially for procurement and financial

management and the need to enhance the operational functionality of the M&E systems and results

frameworks for each of the projects/operations. The steady improvement of the portfolio is partially

attributed to the proactive role of the SLFO team in working closely with the Government and

providing timely support to the project teams.

12

2.5 Lessons Learned from the implementation of the Previous CSP (JAS)

39. The design of the new CSP is informed by lessons drawn from the implementation of the JAS

(2008-2012), as reflected by the JAS Completion Report (2012). These lessons include: i) although the

JAS provided the WB and the Bank an opportunity to work together in a more coordinated manner, for

the benefits of such collaboration to be optimized, there is a strong need for Government to take the

lead role in donor coordination activities especially at the sector levels; ii) maintaining selectivity has

helped the Bank to be more focused in its interventions during the JAS period and also increased the

average size of the operations leading to increased efficiency in project implementation; iii) as a fragile

state, Bank support to Sierra Leone would require a combination of instruments geared towards project

financing, technical assistance and advisory services through focused knowledge products; iv) fiduciary

risks both in terms of procurement and financial management continue to be an area of concern in the

portfolio; and v) maintaining a pro-active approach to portfolio management both on the side of the

Bank and the Government would yield positive results on portfolio performance. These lessons have

informed the preparation of the proposed CSP by ensuring the use of “fragility lens” in the analysis and

design of the strategy, maintaining selectivity in the prioritization of focus areas, putting emphasis on

capacity development and donor coordination, especially at the delivery levels. The Bank and WB are

preparing separate CSPs in close collaboration and with a renewed focus and emphasis on joint

programming at the sector/delivery level.

III. BANK GROUP STRATEGY FOR SIERRA LEONE

3.1 Rationale for Bank Group Intervention

40. Sierra Leone has registered remarkable progress in its peace-and state-building, with an

enduring peace, shared political power and constitutional rule manifested by peaceful elections and

democratic transitions. The country’s emerging and relatively strengthened institutional environment is

beginning to deliver peace dividends to its citizens in the form of economic growth, improved services

and citizen participation in governance. Significant inflows of FDI have improved confidence of

private sector participation in the economy, especially in the mining and agricultural sectors.

41. Nonetheless, the 2012 Fragility Assessment,

recent growth diagnostics studies and consultations

during the CSP mission, revealed important information

and evidence that Sierra Leone’s underlying drivers of

fragility have not been fully eradicated and efforts

should be intensified in the coming CSP period to

support the Government in comprehensively addressing

the root causes of fragility so that the gains achieved are

adequately consolidated and deepened.

42. The New Deal proposes five key Peace- and

Sate-Building Goals (PSGs) which seek to identify

where countries are within the fragility continuum as

they transition out of fragility. These are: i) Legitimate

Politics; ii) Security; iii) Justice; iv) Economic

Foundations; and v) Revenue and Services. The

Government has led in the country’s fragility

assessment, which concluded that SL is at the

‘Transition’ stage in all the five PSGs (see Annex 4) and identified the main development gaps. Taking

Box 3: Guiding Principles for Selectivity and

Prioritization in the CSP

Alignment with the A4P (2013 – 2018)

Alignment with the Bank Group’s Strategy (2013

– 2022)

Regional Integration Strategy Paper (RISP) for

West Africa

Bank Group Framework for Engagement in

Fragile States Lessons from the Bank’s past and

on-going strategies and portfolio performance;

Relevant findings from key Economic and Sector

Work;

Bank’s comparative advantages and scope for

leveraging regional operations and co-financing,

and synergies;

Division of labor between DPs, coordinated/led

by GoSL;

Multi-stakeholder/client feedback and

consultative dialogues.

13

into account the Bank’s comparative advantages, Bank interventions will focus on PSGs 4 and 5 –

Economic Foundations; and Revenue and Services, respectively and these interventions are tightly

linked to the development gaps identified in the country-led fragility assessment (see Table 2 of Annex

4). Furthermore, in recognition of the regional implications of fragility, and the history of conflict

spillovers in the MRU, Bank support will adopt a regional dimension, where appropriate, in addressing

the drivers of fragility. The Bank and the Government will work with the DPs to ensure that the other

PSGs (Legitimate Politics, Security, and Justice) are addressed by the relevant partners whose mandate

and expertise match the required interventions (see Annex 8: Indicative Donor Division of Labor in

Support of A4P).

43. Consequently, the proposed CSP seeks to promote and emphasize a private-sector led

inclusive and green growth; enhanced economic diversification; expanded regional integration; and

stronger economic governance, especially with regards to building robust and resilient institutional and

PFM systems, focusing on transparent and efficient management of revenue from natural resources.

The Bank strategy (2013-2017), which is more selective than the previous JAS, is guided by the

principles of selectivity and prioritization outlined under Box 3, and extensive consultations14

held

during the CSP preparation mission. Accordingly, the CSP is focused on two core pillars.

44. Pillar 1: Enhancing Economic Governance and Transparent Management of Natural

Resources Revenue: The pillar will enhance economic governance by supporting targeted capacity

building and institutional development. It will deepen on-going Bank support to accelerate PFM

reforms for transparency, accountability, and efficiency in managing the country’s abundant natural

resources and revenues. This in turn will enable the economy to generate the resources needed for

expanded public expenditures toward inclusive growth while minimizing aid-dependency, especially

with the likelihood of Sierra Leone being phased out of FSF support after ADF 13. The Bank will also

promote broad-based private sector development by improving the business environment through

structural and regulatory reforms, and SME development, which will be the engine for generating

sustainable jobs, thereby addressing some of the drivers of fragility.

45. Pillar 2: Supporting Transformational and Sustainable Infrastructure Development: This

pillar is aligned with the overarching objective of the A4P on promoting an inclusive, diversified and

competitive economic growth by helping to remove the most binding development constraints of Sierra

Leone involving key infrastructure – energy, roads and water – to which the vast majority of the

population, especially the poor, irrespective of age, gender and geographic location lacks access. Bank

support to such strategic socio-economic infrastructure will therefore generate widespread benefits with

a strong poverty focus. Emphasis will be on inclusive employment creating opportunities, increasing

regional and national integration, promoting cross-border trade, and ensuring green growth and climate

resilience in all of the Bank’s interventions.

46. The two pillars are complementary and mutually reinforcing. In this regard, Pillar 1

(Economic Governance) will help ensure efficient, transparent and accountable expenditures for the

proposed Pillar 2 interventions. There will be special focus on building capacity to strengthen the

institutional and regulatory environment for enhanced infrastructure services in energy, roads and

water, which is critical in ensuring sustainable and cost-effective delivery of core services benefiting all

population groups. In addition, special emphasis will be placed on the following strategic themes, in

14

There were three stakeholder consultative events: with all ongoing project implementing teams to update the CPIP; diverse

stakeholders including government, private sector and civil society based in Freetown and the provinces/regions. In addition, there

were separate consultations with each of the major DPs, which were very helpful in gauging comparative niches and possible areas of

collaboration.

14

both pillars: 1) private sector development; 2) capacity development; 3) gender and women’s

empowerment; 4) sensitivity to social fragility through inclusion of vulnerable groups, especially

youth; 5) climate change, green and sustainable growth; and 6) regional integration and trade

(especially within the MRU).

47. Accordingly, the proposed CSP strategic pillars selectively support the following core A4P

pillars: Pillar 1: Economic Diversification; Pillar 2: Managing Natural Resources; Pillar 4: International

Competiveness; Pillar 5: Employment and Labor; Pillar 7: Governance and Public Sector Reform; and

Pillar 8 – Gender and Women’s Empowerment.

3.2 Deliverables and Targets

48. The prioritized interventions and envisaged results for the two focus pillars are described

below. Annex 9 shows the CSP Results Framework which underpins the results chain; and Annexes 10

and 11 highlight the proposed lending and non-lending activities to achieve the envisaged results.

Pillar 1: Enhancing Economic Governance and Transparent Management of Natural Resources

Revenue

49. Pillar 1: Sub-Pillar 1: Public Financial Management & Transparency: The objective is to

increase efficiency, transparency and accountability of public institutions by strengthening capacity

systems and processes in order to ensure that public budgets, revenues, expenditures and government

resources are effectively and efficiently managed. Bank Group priority interventions would contribute

to the following three expected key outcomes: (i) increased transparency and predictability in the

budgeting, revenues, and expenditure outturns, through enhanced financial reporting; (ii) enhanced

legislative scrutiny and follow up on audit reports; and (iii) improved value for money in procurement

through compliance with procurement procedures. Priority Bank interventions would include: (i)

continued multi-sectoral budget support program (in partnership with other key DPs); (ii) capacity

building projects to enhance budget support reforms; and (iii) enhanced technical advisory support and

dialogue on PFM issues through SLFO in close coordination with other DPs who are also active in

supporting PFM reforms.

50. Pillar 1: Sub-Pillar 2: Natural Resource Governance: The objective is to enhance natural

resource governance, and thereby contribute to sustainable resource development and increased public

revenues. Bank Group priority interventions would contribute to the following expected key outcomes:

i) enhanced domestic revenue mobilization in the mining and non-mining sectors; and ii) strengthened

participation of civil society in policy dialogue and monitoring of Government revenues. Potential

priority Bank interventions would include: i) a targeted capacity building support to the NRA in

collaboration with other DPs; ii) coordinated support with other DPs to the newly established National

Minerals Agency to effectively carry out its mandate in monitoring compliance of mining contracts and

optimizing Government’s share of mining revenue; iii) supporting the setting up of the governance

framework for the TDF; and iv) providing support to the EITI process.

51. Pillar 1: Sub-Pillar 3: Improving Business Enabling Environment: The objective is to

improve business enabling environment for inclusive and green private-sector development. Bank

Group priority interventions would contribute to the following expected key outcomes: i) improved

business environment; and ii) increased number of viable and diversified enterprises, especially SMEs.

The priority interventions include the completion of the ongoing PFM and Business Enabling Support

Project (which will run through to 2014) and which will seek to develop an SME policy for the

Government and provide targeted capacity building support to selected SMEs and private sector

15

support agencies such as the Chamber of Commerce, Sierra Leone Investment Promotion Agency and

the Sierra Leone Business Forum. The multi-sector budget support will also seek to promote sustained

business reforms.

Pillar 2: Supporting Transformational and Sustainable Infrastructure Development

52. Pillar 2: Sub-Pillar 1: Expanded and Lower Cost Energy Supply and Access: Investments in

energy would seek to address critical energy challenges that limit barriers to private sector investments

and inclusive growth. High and uncompetitive tariff rates (32c Kw/h) coupled with weak transmission

and distribution capacity (40% electricity losses due to poor network) make energy provision a priority

in the A4P. The country has one of the lowest per capita electricity consumption of 30.5 Kw/h, far

below the ECOWAS benchmark of 88 Kw/h. Priority interventions would seek to contribute to the

following outcomes: i) increased reliability of energy supply (reduced time of power outage); ii)

increased electricity access rate (by households and enterprises – including on grid and off grid); iii)

increased supply of electricity, with at least 10% sourced from renewable sources; iv) reduced

production cost of electricity; and v) improved capacity of the Ministry for negotiating contracts, and

building a pipeline of investments.

53. The West Africa Power Pool (WAPP) project, co-financed with the World Bank, EIB, and

KfW, will lay foundation for energy trade across the MRU region and develop the energy transmission

mechanism that enhances the sub-region’s future energy supply. This project would promote the

regional energy market, and increase energy access in rural areas (through the integrated rural

electrification component) for local economic development and improved delivery of social services

reliant on access to energy (e.g. health facilities; ICT in schools).

54. The Bank would further fund feasibility studies for other hydro potentials with national and

regional benefits. These are expected to be designed and implemented in line with the Bank’s Green

Growth agenda, including opportunities in defining the optimal and sustainable energy mix for the

country. The focus would be on producing clean energy with more hydro, bio-mass energy and solar

and less of thermal production. For example, the Bank will provide a Partial Risk Guarantee facility to

the Government for ADDAX Bioenergy Ltd to supply 15 MW of its excess biomass energy to the

National grid line. The Bank, through the private sector window, will also seek to invest in the panned

Bumbuna Hydro Phase II project that would more than triple the country’s present generation capacity.

55. Pillar 2: Sub-Pillar 2: Expanded Transport/ Roads Infrastructure and Enhanced O&M: The

objective is to support improved road accessibility and connectivity that will contribute to inclusive

green growth, promote national and regional integration and trade facilitation. Inclusive growth will be

harnessed through project designs that ensure that improvements in transport infrastructure incorporate

i) rehabilitation/construction of other social infrastructure, for example, selected markets in the project

area of influence to benefit farmers and traders (predominantly women); and ii) enhanced accessibility

with the main corridor improvements, augmented with improvement of connecting feeder roads. Bank

interventions would contribute to the following key outcomes: i) improved core road network

conditions (primary and secondary class roads); ii) increased share of paved road network; and iii)

enhanced national and regional integration and interconnectivity between Sierra Leone, Guinea and

Liberia for increased trade.

56. Priority interventions would include completion of the ongoing Matotoka–Yiye Road and

Lungi–Port Loko Road projects. Proposed interventions include upgrading of the Bandajuma-Zimmi

Road project in collaboration with the EU, which will link Freetown to Monrovia. The proposed

Medium Case Scenario, assuming increased funding levels, would create financing space for an

16

additional road project (Kenema–Zimmi) to be undertaken with similar regional integration

opportunities with its link to the Trans-West African Coastal Highway. All road transport projects

would ensure sustainability from a Green Growth perspective (looking at maintenance and road safety

aspects) and designed to be climate resilient.

57. Pillar 2: Sub-Pillar 3: Expanded Access to and Sustainability of Water Supply and Sanitation

Infrastructure and Services: The objective is to support sustainable and equitable access to water

supply and sanitation for all uses. Bank Group priority interventions would contribute to two expected

core outcomes: i) improved access to sustainable water supply and sanitation services (with targets for

rural and urban areas); and ii) reduced incidence of water borne diseases (e.g. cholera and diarrhea).

58. Priority interventions would include completion of the Three Towns Water Supply and

Sanitation Project (Bo, Makeni and Kenema cities) and the proposed Rural Water Supply and

Sanitation Project to be funded by ADF-12 (PBA and FSF) resources with co-financing from DFID,

GEF and RWSSI. Both projects will also contribute towards improved governance of the water sector

with embedded targeted technical assistance and capacity building support.

59. Non-Lending Interventions: will develop the knowledge base to strategically support

operations and provide an input to Government policy making. For example, the ongoing flagship

Skills Gap Analysis will inform decision making and policy direction in the area of TVET and labor

and employment and also guide both Government and private sector actors on the role each should play

to promote skills development for employment. This analytical work will also complement and inform

other donors with direct skills development investments in the country. Similarly, the Green Growth

(GG) study has already informed the mainstreaming of GG in the A4P and is expected to also guide the

Government in pursuing its Green Growth path during the implementation of the A4P. A regional study

on Minerals Fiscal and Licensing Regime Harmonization for MRU countries is also planned with a

view to increasing the mining contracts negotiating powers of member countries and also decreasing

the incentives for smuggling across borders. Other studies proposed include: i) Domestic Resource

Mobilization study to inform Government of better revenue mobilization, especially in the Mining, Oil

& Gas sectors; and ii) a Port Master Plan study with a view to improving port operations and

performance in the country. Other areas of study will be determined during the MTR of the CSP in

2015. Annex 11 provides an indicative list of the envisaged ESWs under the CSP period.

60. Strategy Implementation Instruments: The Bank Group will use the most appropriate

instruments to support the proposed strategy, including budget and institutional support, project loans

and grants, trust funds, economic and sector work and policy/country dialogue. These instruments will

be used in a complementary manner to maximize synergies and in close partnership with other

development partners, also encouraging the active engagement of the private sector and civil society.

The proposed multi-sectoral programmatic budget support will enable the Bank to i) support a

comprehensive approach to broad-based policy dialogue on strategic macro and sectoral issues

involving both pillars, while supporting the country’s transition from a state of fragility to a more

resilient development path; and ii) provide predictable medium term financing, while working with

other DPs (especially IMF, WB, DFID and the EU) to strengthen enhanced tools such as the medium

term expenditure framework and the Public Investment Program (PIP). Given the country’s low

Sustainable Lending Limit and high risk status, indirect investments through equity funds and/or

regional initiatives such as the Africa Guarantee Fund and Africa SME Program could be used as

channels for private sector investment. In addition, Partial Risk Guarantees in priority sectors such as

energy will be supported to facilitate public-private partnerships.

17

61. Resource Mobilization Strategy: Given the huge financing needs of the country and the

relatively small size of its ADF allocation and variability of PBA and FSF funds, the Bank’s financing

strategy will be to use its available resources in a catalytic manner to leverage and prioritize regional

funding, co-financing, and public-private partnerships. Emphasis will also be on supporting the

country’s broader domestic resource mobilization efforts, coupled with enhanced economic

governance, especially from its huge mineral endowment and oil and gas potentials. The Bank will also

support Sierra Leone in accessing some of the climate change funds, AWF, and RWSSI resources that

would be available to co-finance targeted investments, in addition to tapping the private sector window.

Efforts would be made to access Trust Funds and the Africa Legal Support Facility which could

support strategic TA and non-lending interventions, in support of the proposed priority activities.

62. Bank’s Indicative Resources and Work Program: The CSP period will cover three ADF

cycles: the final year of ADF-12 (2013), the full ADF-13 cycle covering 2014-2016, and the first year

of ADF-14 (2017). This strategy will complete remaining tasks in ADF-12 and provide a roadmap for

ADF-13. The Mid-Term Review to assess progress would be conducted in 2015 where the ADF-13

pipeline would be firmed up and to prepare the ground work for ADF-14. A significant level of

funding was leveraged from the FSF supplemental support window (Pillar I) during the ADF-

11(UA42.8 million) and to some extent ADF-12 (UA28.7 million) funding cycles and this financing

window potentially could be available for ADF-13 but phased out in ADF-14.

63. Due to the level of funding available in the midst of many competing priority needs, ADF-13

projects will be identified and prioritized in close consultation with Government and stakeholders.

Given the uncertainty on the level of funds to be available under ADF-13 and 14 (first year), three

different scenarios are proposed for Bank Group support:

(1) Base-Case Scenario assumes that Sierra Leone receives UA36 million from ADF-13

PBA and First Year of ADF-14 with no FSF allocation in ADF-13.

(2) Medium-Case Scenario assumes that Sierra Leone will receive an ADF-13 FSF

allocation of UA15 million in addition to the UA36 million PBA allocation. This would

provide an additional financing space for another critical road project, the Kenema –

Zimmi road.

(3) High-Case Scenario assumes that Sierra Leone will receive a significant ADF-13 FSF

allocation of UA30 million (almost the same as the FSF allocation they received under

ADF-12) in addition to the UA36 million PBA allocation. This scenario would allow

increasing the amount allocated towards the Kenema – Zimmi Road Project, especially

if the regional envelope resources or co-financing are not secured.

64. The Bank will hold consultations with the Government of Sierra Leone and prepare an

addendum to this CSP after the resource envelope for the country in ADF 13 is determined and

approved by the Boards of Directors in early 2014.

3.3 Monitoring and Evaluation

65. The Bank, in collaboration with the Government, will conduct monitoring and evaluation of

the CSP results framework (see Annex 9), which is aligned with the results framework for the A4P.

The Bank will endeavor to carry out the M&E in the context of Government’s proposed enhanced

national M&E system expected to track activities and results of the A4P. A CSP Mid-Term Review

will be conducted in 2015 to assess the progress made and the emerging outputs and outcomes, using

the RF as the main tool for assessment. In addition, SLFO will carry out annual portfolio performance

18

reviews geared towards strengthening alignment with the A4P outcome indicators. SLFO would also

take an active role in participating with other DPs and civil society in joint monitoring of the Bank’s

contribution towards the objectives of the A4P.

3.4 Country Dialogue Issues

66. The Bank, especially through SLFO, will focus its country dialogue on the following strategic

issues which would enhance the effectiveness of implementing the CSP for 2013 – 2017, while being

responsive to other key issues which may arise: i) portfolio quality and performance; ii) natural

resource governance, especially in pursuing EITI Compliant status and the adoption of international

best practice in natural resource management; iii) gender equality, especially with regards to access to

finance and property rights for women; iv) ongoing institutional and regulatory reforms under the

energy, transport, water supply sectors; and v) regional integration and private sector development

issues, particularly to ensure that required supporting policies and complementary investments are in

place, including the proposed MRU Initiative and public-private partnerships.

3.5 Potential Risks and Mitigation Measures

67. Table 2 below shows the mitigating measures for each of the risks envisaged under the

implementation of the proposed CSP.

Table 2

Potential Risks and Mitigating Measures

Continued Drivers of Fragility

Probability of Risk: Moderate Mitigation Measures and Impact: Moderate

While SL is making good progress in its transition from its war and

fragility, there is evidence that the underlying drivers of fragility

persist (e.g. economic exclusion, delays in meeting the MDGs,

limited trust of Government, high unemployment, especially of

youth, high perceived and real corruption levels). A prolonged

delay in reversing and stabilizing these drivers can jeopardize

achieving the development objectives of A4P.

Increased and coordinated dialogue will help ensure emerging

security needs are managed and an UNIPSIL withdrawal is not

disorderly. The proposed Mutual Accountability Framework will

promote a results-driven dialogue with Government on all

dimensions critical for its transition to a resilient state. Addressing

physical infrastructure constraints and increased emphasis on

strengthening the role of an inclusive private sector, especially

SMEs, to diversify the economy and generate increased jobs will

be critical.

Public Sector Capacity and Coordination and Implementation Risks

Probability of Risk: Moderate to High Mitigation Measures and Impact: Moderate

Public institutional capacity, coordination and design and

implementation weaknesses at central and local council levels, and

hence risks, are relatively high. The limited human and

institutional capacity of implementing agencies, the inadequate

coordination effectiveness of central entities will be stretched

Capacity building will be an integral part of Bank-funded projects.

FSF-Pillar III resources will also be instrumental in providing

targeted technical and capacity building support. Pro-active

management of the portfolio will be adopted (regular portfolio

reviews and tracking of the CPIP; sector dialogue, joint

programming and action with other DPs, etc.).

Economic Governance in the light of Substantial Extractive Industry Resource Revenues

Probability of Risk: Moderate Mitigation Measures and Impact: Moderate

PFM systems and processes are in the early stages of being

strengthened, at both central and local council levels. Expected

substantial inflows of revenues from mineral and other resources,

and weak CSOs for third party monitoring, will add challenges to

ensuring adequate PFM transparency and accountability, and to

minimize perceived and/or actual corruption levels.

There will be systematic and well-targeted measures to further

strengthen the PFM systems and processes at both central and local

council levels. Civil society engagement in the monitoring of

increased revenues from the extractive industry will foster

transparency and accountability. These efforts will be closely

coordinated with other DPs.

Vulnerability to Shocks: International and Natural Disaster/Climate Change

Probability of Risk: Moderate Mitigation Measures and Impact: Moderate

International shocks, including lower commodity demand and

prices, could affect the implementation and funding of A4P,

especially with the economy largely undiversified. In addition,

climate change could affect the implementation of the A4P and

increase the vulnerability of the infrastructure and other aspects of

the economy.

There will be strengthened: capacities and systems for better

monitoring of relevant macro-economic variables to better forecast

external price and market fluctuations which could impact the SL

economy; regular dialogue on possible scenarios which can impact

public revenues and expenditures, to ensure timely adjustments.

Setting up of the TDF will be helpful. Projects will be designed to

be climate resilient.

19

IV. CONCLUSION AND RECOMMENDATION

4.1 Conclusion

68. Since the end of its conflict, Sierra Leone has exhibited robust economic growth. However,

the economy will need to be diversified and growth made more inclusive and sustainable. The

Government has prepared its A4P to address considerable socioeconomic challenges for the period

2013 to 2018. Accordingly, the Bank proposes a selective CSP strategy to support key elements of the

A4P, based on an explicit selection and prioritization criteria. This strategy and supporting

interventions would focus on helping Sierra Leone transition to a more resilient and inclusive

sustainable development path. The strategy also highlights the role of SLFO in policy dialogue and

advisory support, portfolio management, donor coordination and resource mobilization.

4.2 Recommendation

69. The Boards of Directors are invited to consider and endorse the proposed Results-Based

Country Strategy Paper for Sierra Leone for the period of 2013-2017.

I

ANNEX 1

SELECTED MACRO INDICATORS: CHARTS AND FIGURES

Source: IMF, ADB and GOSL

0

5

10

15

20

25

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Growth, Inflation and Revenue Performance

Growth

Inflation

Rev/GDP

0

5

10

15

20

25

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

SL - Growth and Inflation 09-14

Growth

Inflation

0

5

10

15

20

25Growth Rates (%)

SLGrowthRates

SubSaharanAfr

The mining-led growth is gradually changing the

structure of the economy as the sector’s share to GDP is

gradually increasing, moving from 4% in 2011 to an

estimated 22% in 2013, while agricultural GDP share is

declining moving from 52% in 2011 to a projected 42%

in 2013. There is great scope for improving productivity,

reducing losses and enhancing value chains in

agriculture.

II

ANNEX 2

COMPARATIVE DEVELOPMENT INDICATORS

YearSierra

LeoneAfrica

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2011 72 30,323 98,458 35,811Total Population (millions) 2012 6.1 1,070.1 5,807.6 1,244.6Urban Population (% of Total) 2012 39.1 40.8 46.0 75.7Population Density (per Km²) 2012 83.6 34.5 70.0 23.4GNI per Capita (US $) 2011 340 1 609 3 304 38 657Labor Force Participation - Total (%) 2012 38.0 37.8 68.7 71.7Labor Force Participation - Female (%) 2012 50.9 42.5 39.1 43.9Gender -Related Dev elopment Index Value 2007-2011 0.354 0.502 0.694 0.911Human Dev elop. Index (Rank among 186 countries) 2012 177 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2003-2011 53.4 40.0 22.4 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2012 2.1 2.3 1.3 0.3Population Grow th Rate - Urban (%) 2012 3.1 3.4 2.3 0.7Population < 15 y ears (%) 2012 42.8 40.0 28.5 16.6Population >= 65 y ears (%) 2012 1.9 3.6 6.0 16.5Dependency Ratio (%) 2012 80.8 77.3 52.5 49.3Sex Ratio (per 100 female) 2012 95.7 100.0 103.4 94.7Female Population 15-49 y ears (% of total population) 2012 24.8 49.8 53.2 45.5Life Ex pectancy at Birth - Total (y ears) 2012 48.1 58.1 67.3 77.9Life Ex pectancy at Birth - Female (y ears) 2012 48.8 59.1 69.2 81.2Crude Birth Rate (per 1,000) 2012 37.0 33.3 20.9 11.4Crude Death Rate (per 1,000) 2012 15.0 10.9 7.8 10.1Infant Mortality Rate (per 1,000) 2012 104.0 71.4 46.4 6.0Child Mortality Rate (per 1,000) 2012 157.9 111.3 66.7 7.8Total Fertility Rate (per w oman) 2012 4.8 4.2 2.6 1.7Maternal Mortality Rate (per 100,000) 2010 890.0 417.8 230.0 13.7Women Using Contraception (%) 2012 21.5 31.6 62.4 71.4

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2004-2010 1.6 49.2 112.2 276.2Nurses (per 100,000 people)* 2004-2009 16.8 134.7 187.6 730.7Births attended by Trained Health Personnel (%) 2008-2010 42.4 53.7 65.4 ...Access to Safe Water (% of Population) 2010 55.0 67.3 86.4 99.5Access to Health Serv ices (% of Population) 2000 38.0 65.2 80.0 100.0Access to Sanitation (% of Population) 2010 13.0 39.8 56.2 99.9Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2011 1.6 4.6 0.9 0.4Incidence of Tuberculosis (per 100,000) 2011 723.0 234.6 146.0 14.0Child Immunization Against Tuberculosis (%) 2011 96.0 81.6 83.9 95.4Child Immunization Against Measles (%) 2011 80.0 76.5 83.7 93.0Underw eight Children (% of children under 5 y ears) 2008-2011 21.3 19.8 17.4 1.7Daily Calorie Supply per Capita 2009 2 162 2 481 2 675 3 285Public Ex penditure on Health (as % of GDP) 2010 13.1 5.9 2.9 8.2

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2010-2012 124.7 101.9 103.1 106.6 Primary School - Female 2010-2012 120.1 98.4 105.1 102.8 Secondary School - Total 2001-2012 27.6 42.3 66.3 101.5 Secondary School - Female 2001-2012 22.5 38.5 65.0 101.4Primary School Female Teaching Staff (% of Total) 2011 25.1 43.2 58.6 80.0Adult literacy Rate - Total (%) 2010 42.1 67.0 80.8 98.3Adult literacy Rate - Male (%) 2010 53.6 75.8 86.4 98.7Adult literacy Rate - Female (%) 2010 31.4 58.4 75.5 97.9Percentage of GDP Spent on Education 2008-2011 3.6 5.3 3.9 5.2

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2011 15.4 7.6 10.7 10.8Annual Rate of Deforestation (%) 2000-2009 2.9 0.6 0.4 -0.2Forest (As % of Land Area) 2011 37.8 23.0 28.7 40.4Per Capita CO2 Emissions (metric tons) 2009 0.2 1.2 3.1 11.4

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available.

May 2013

0

20

40

60

80

100

120

140

2004

2005

2006

2007

2008

2009

2010

2011

2012

Infant Mortality Rate( Per 1000 )

Sierra Leone Africa

0

200

400

600

800

1000

1200

1400

1600

1800

2003

2004

2005

2006

2007

2008

2009

2010

2011

GNI Per Capita US $

Sierra Leone Africa

0.00.51.01.52.02.53.03.54.04.55.0

2004

2005

2006

2007

2008

2009

2010

2011

2012

Population Growth Rate (%)

Sierra Leone Africa

1

11

21

31

41

51

61

71

2004

2005

2006

2007

2008

2009

2010

2011

2012

Life Expectancy at Birth (years)

Sierra Leone

Africa

III

ANNEX 3

PROGRESS TOWARDS ACHIEVING THE MDGS

Goal 1: Eradicate extreme poverty and hunger 19901 20002 20123

Employment to population ratio, 15+, total (%) 63.5 64.7 65.3

Malnutrition prevalence, weight for age (% of children under 5) 25.4 24.7 21.3

Poverty headcount ratio at $1,25 a day (PPP) (% of population) 62.8 53.4 ...

Prevalence of undernourishment (% of population) 36.2 37.3 28.8

Goal 2: Achieve universal primary education

Literacy rate, youth female (% of females ages 15-24) ... 37.4 50.1

Literacy rate, adult total (% of people ages 15 and above) ... 34.8 42.1

Primary completion rate, total (% of relevant age group) ... ... 74.4

Total enrollment, primary (% net) ... ... ...

Goal 3: Promote gender equality and empower women

Proportion of seats held by women in national parliaments (%) ... 14.5 12.9

Ratio of female to male primary enrollment 67.2 67.5 92.8

Ratio of female to male secondary enrollment 54.3 68.2 ...

Goal 4: Reduce child mortality

Immunization, measles (% of children ages 12-23 months) ... 76.0 80.0

Mortality rate, infant (per 1,000 live births) 163.9 126.7 104.0

Mortality rate, under-5 (per 1,000) 279.8 200.7 157.9

Goal 5: Improve maternal health

Births attended by skilled health staff (% of total) ... 41.7 42.4

Contraceptive prevalence (% of women ages 15-49) 6.5 12.3 21.5

Maternal mortality ratio (modeled estimate, per 100,000 live births) 1300.0 1300.0 890.0

Goal 6: Combat HIV/AIDS, malaria, and other diseases

Incidence of tuberculosis (per 100,000 people) 279.0 479.0 723.0

Prevalence of HIV, female (% ages 15-24) ... ... 1.3

Prevalence of HIV, male (% ages 15-24) ... ... 0.5

Prevalence of HIV, total (% of population ages 15-49) 0.2 1.4 1.6

Goal 7: Ensure environmental sustainability

CO2 emissions (kg per PPP $ of GDP) 0.6 0.8 0.7

Improved sanitation facilities (% of population with access) 11.0 12.0 13.0

Improved water source (% of population with access) 42.0 50.0 55.0

Goal 8: Develop a global partnership for development

Net total ODA/OA per capita (current US$) 54.5 76.0 71.5

Internet users (per 1000 people) ... 2.0 2.6

Mobile cellular subscriptions (per 1000 people) ... 22.9 340.9

Telephone lines (per 1000 people) 4.3 5.4 2.4

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update : May , 2013

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports,

Note : n,a, : Not Applicable ; … : Data Not Available, 1 Latest year available in the period 1990-1995; 2 Latest year available in the period 2000-2004; 3 Latest year available in the period

2005-2012

ANNEX 4

Page IV/5

IV

SUMMARY OF 2012 FRAGILITY ASSESSMENT

Fragility Assessment Framework – The Sierra Leone Case

Background and Objectives

The New Deal is an enhanced development framework for engaging with fragile states and forms part of the fourth high

level forum on Aid Effectiveness held in Busan in November 2011.The New Deal created global awareness on the need for

new ways of working in fragile states and established consensus on a core set of priorities and governance reforms. The

New Deal focuses on a set of Peace and State Building Goals (PSGs) that identify where countries are within the fragility

continuum as they transition out of fragility. As a founding member of the g7+ Group of Fragile States, Sierra Leone was

chosen as one of seven countries to pilot the New Deal by conducting a comprehensive country led fragility assessment

based on the five PSGs. The PSGs focus on areas were simple reforms can greatly improve development outcomes. The

fragility assessment identifies drivers of fragility and priority actions for overcoming the fragility sources. The five PSGs

assessed were: (i) Legitimate Politics; (ii) Security; (iii) Justice; (iv) Economic Foundations; and (v) Revenue and Services.

The objectives of this fragility assessment were:

1. Develop a clear understanding of how Sierra Leoneans view fragility and resilience; and

2. Generate consensus regarding Sierra Leone’s fragility trajectory and for its citizens to identify country led

milestones for transitioning out of fragility.

Table 1: Summary of 2012 Fragility Assessment Results Matrix

Goal/Dimension Crises Rebuild and

Reform Transition Transformation Resilience

PSG 1: Legitimate Politics

Political Settlement

X

Political Processes and

Institutions

X

Societal Relations

X

PSG 2: Security

Security Conditions

X

Security Sector Capacity

X

Security Sector Performance

X

PSG 3: Justice

Justice conditions

X

Justice sector capacity

X

Justice sector performance

X

PSG 4: Economic Foundation

Economic conditions

X

Jobs, Livelihoods and Private

Sector

X

Exploitation of Natural

Resources

X

PSG 5: Revenue and Services

Revenue Generation

X

Public Administration

X

ANNEX 4

Page V/5

V

Table 1: Summary of 2012 Fragility Assessment Results Matrix

Service Delivery

X

Outcome of Fragility Assessment

Sierra Leone’s current position in the fragility spectrum indicates that the country has made considerable progress from its

lowest point of crisis toward greater resilience. Even though the country is well situated in the ‘transition’ trajectory there

are still challenges in some socio-economic fragility indicators. Since the crisis, key achievements have been made in

relation to institutional reform, and the appropriate structures, laws, policies and processes to enable development results.

Sierra Leonean’s feel that the necessary foundation for transformation and resilience has now been built. However, the

critical challenge going forward is for the development of critical infrastructure, systems and skills to enable these

structures to function effectively. There is need to enhance the implementation and coordination of policies, enforcement

of laws and compliance with processes to ensure that the structures that have been built are effective. The table above

provides a summary of the assessment results for each of the dimensions under each PSG.

Highlights of Assessment Results for each PSG

1. Legitimate Politics

A stable and resilient Sierra Leone requires the development of legitimate political systems for resolving and managing

conflict, inclusive political settlements, and a committed and able leadership. The country has made substantial progress in

managing political stability which includes: leaders democratically elected and accountable to the electorate; multi-party

state and political pluralism established with constructive dialogue between political parties and precedence of peaceful

transfer of power. However, despite these accomplishments, the assessment identified critical socio-political challenges that

would affect the country’s successful transition out of fragility. These include regional and ethic polarization of political

appointments, failure to pass constitutional amendment to address gender imbalances, weak parliamentary oversight

capacity, perceptions of high level of corruption, delays in reconciliation and dispute resolution.

2. Security

Human and physical security is critical to the transition away from fragility, and the assessment manifest that significant

progress has been made since the cessation of hostilities in 2002. The challenge for Sierra Leone is to build on the

achievements made so far and improve the behavior, effectiveness and accountability of a broad range of security actors.

The accomplishments range from well-disciplined armed forces (that participate in peace keeping missions) to greater

control of arms trafficking. The key challenges include slow response time, porous borders, poor accountability apparatus

for the security sector and relatively weak performance of sector institutions.

3. Justice

Justice is fundamental for peace building and state building. Grievances mechanisms and addressing injustice is essential to

building resilient societies and nations. Formal justice mechanisms should be accessible, affordable and seen to be fair by

citizens. While progress made during the peace consolidation period has been satisfactory, there are fundamental challenges

to ensure a smooth transition out of fragility. Highlights of progress made include: passing of the Local Court Act (2011)

which made access to informal justice more timely and affordable; efforts made to decentralize formal system with circuit

court sittings and increased accessibility to paralegals and increasing confidence in formal and informal justice systems

with rights of individuals being increasingly protected. Challenges include very limited access to representation, especially

for vulnerable groups such as women.

ANNEX 4

Page VI/5

VI

4. Economic Foundation

In the assessment, economic foundation is defined as a function of investments that create economic opportunities that

increase well-being, confidence in government, and can help reduce violence and conflict in the future. Strong economic

foundations require economic diversification, an educated workforce and strong regulatory frameworks. The fragility

assessment indicates that progress has been made in several areas including: key institutions have been rebuilt to enable

good economic management and steady growth; transparency and accountability systems are in place and are operational

albeit with some weaknesses; and passing of several Acts to better regulate the extractive industry. Critical challenges

include: poor distribution of natural resource benefits; basic infrastructure modestly available in urban areas and absent in

the rural areas; limited economic diversification; low value addition; porous borders (high incidence of illegal smuggling);

high unemployment particularly among the youth and lack of appropriate skills; and weak property rights for women.

5. Revenue and Services:

This goal assesses the extent to which the Government is successfully managing revenue and building capacity for effective

and efficient service delivery. Increasingly, the Government of Sierra Leone is managing its revenue base despite teething

challenges and using it to deliver services to the population. For instance, the Government’s investment in road

infrastructure is largely driven by increased domestic revenue inflows. On the expenditure side, a sound public financial

management system is essential in instilling confidence in citizens to pay taxes, donors to contribute aid, and businesses to

invest. The assessment identified the following as key accomplishments under this PSG: National Revenue Authority

established and working to diversify and consolidate domestic revenue generation; improved tax administration,

enforcement, accountability and audit capacity; Goods and Services Tax introduced; and increased tax awareness among

the population. However despite these accomplishments, there are deep seated challenges that serve as threats to the gains

made. These include: narrow tax base and large informal sector; too many concessional duty waivers and tax exemptions

for mining companies; limited enforcement of border taxes that facilitate smuggling; low capacity of tax workers and high

corruption rates. On the expenditure side, challenges include weak procurement challenges that are complex and inefficient;

significant inequality and regional imbalances in core service delivery. As could be deduced from the matrix, the Service

Delivery dimension remains a big challenge and is still at a recovery stage.

Bank’s CSP response to Downside Risks/Challenges identified in the Fragility Assessment

Table 2 below shows how the Bank’s CSP seeks to address some of the downside risks/challenges identified in the fragility

assessment:

Table 2: Core areas of the Bank’s CSP linked to addressing the remaining downside risks stemming from the root causes

of fragility as identified in Sierra Leone’s country-led fragility assessment

Peace &

State-

Building

Goal (PSG)

Dimension Downside risks stemming from

the root causes of fragility

Proposed Bank Group interventions during

the CSP period, 2013-2017

PSG 4:

Economic

Foundations

Economic

conditions

a) Limited economic

diversification

b) Low value addition

c) Porous borders (high

incidence of illegal

smuggling)

d) Weak property rights for

women

e) Basic infrastructure modestly

a) Enhanced economic diversification, e.g., SME

policy for the Government, support to selected

SMEs and private sector support agencies such

as Chamber of Commerce, Investment

Promotion Agency and the Business Forum;

b) Infrastructure (e.g. roads) geared towards

facilitating market linkages and trade. SME

capacity building.

c) Regional study on Minerals Fiscal and

ANNEX 4

Page VII/5

VII

Table 2: Core areas of the Bank’s CSP linked to addressing the remaining downside risks stemming from the root causes

of fragility as identified in Sierra Leone’s country-led fragility assessment

Peace &

State-

Building

Goal (PSG)

Dimension Downside risks stemming from

the root causes of fragility

Proposed Bank Group interventions during

the CSP period, 2013-2017

available in urban areas and

absent in the rural areas

Licensing Regime Harmonization for MRU

countries with a view to decreasing incentives

for smuggling across borders

d) Gender & women’s empowerment

mainstreamed in the investments and also part

of the dialogue issues with Government.

e) Key infrastructure – energy, roads and water –

of which the vast majority of the population

lacks access. E.G., Pillar 2, sub-pillar 1:

Investments in energy to address energy

challenges that limit barriers to private sector

investments & inclusive growth – rural

electrification component included

Jobs,

Livelihoods

and Private

Sector

a) High unemployment

particularly among the youth

b) Lack of appropriate skills

a) Creating enabling business environment,

structural & regulatory reforms, SME

development as engine for generating

sustainable jobs

b) Flagship Skills Gap Analysis to inform

decision making and policy direction on

TVET, labor and employment; guide

Government & private sector roles in skills

development

Exploitation of

Natural

Resources

a) Poor distribution of natural

resource benefits

a) Transparent, efficient management of revenue

from the natural resources, e.g., support to

National Mineral Agency, EITI, etc.

b) Pragmatic inclusive green growth investments

in both pillars

PSG 5:

Revenue

and

Services

Revenue

Generation

a) Narrow tax base;

b) Large informal sector;

c) Too many concessional duty

waivers and tax exemptions for

mining companies;

d) Limited enforcement of border

taxes that facilitate smuggling

a) Enhanced domestic revenue mobilization in

the mining & non-mining sectors; Domestic

Resource Mobilization study to inform

Government of better revenue mobilization,

especially in the Mining, Oil & Gas sectors

(Non-lending ac; and a Port Master Plan

study with a view to improving port

operations and performance in the country

b) Rural electrification component of WAPP

and the capacity building of SMEs

c) Support to the National Minerals Agency and

setting up of a Mining Tax Unit under the

NRA

d) Regional study on Minerals Fiscal and

Licensing Regime Harmonization for MRU

countries with a view to decreasing

incentives for smuggling across borders

ANNEX 4

Page VIII/5

VIII

Table 2: Core areas of the Bank’s CSP linked to addressing the remaining downside risks stemming from the root causes

of fragility as identified in Sierra Leone’s country-led fragility assessment

Peace &

State-

Building

Goal (PSG)

Dimension Downside risks stemming from

the root causes of fragility

Proposed Bank Group interventions during

the CSP period, 2013-2017

Public

Administration

a) Low capacity of tax workers

and high corruption rates

b) Weak procurement challenges

that are complex and inefficient

a) Stronger economic governance, especially

building robust & resilient institutional &

PFM systems. Also strengthened participation

of civil society in policy dialogue and

monitoring of Government revenues)

b) Efficient, transparent & accountable

expenditures

Service

Delivery

a) Service Delivery (which areas?)

remains a big challenge and is

still at a recovery stage

b) Significant inequality and

regional imbalances in core

service delivery

a) Strengthen institutional & regulatory

environment for enhanced infrastructure

services in energy, roads and water, critical for

sustainable & cost-effective delivery of core

services benefiting all population groups

across all regions

b) Rural water supply project and rural

electrification project seek to address regional

imbalances in service delivery in these sectors

Note: The Bank and the Government of Sierra Leone will work with the other development partners to address the other PSGs

(Legitimate Politics, Security and Justice) based on their core expertise and mandate.

ANNEX 5

Page IX/5

IX

2013 FIDUCIARY RISK ASSESSMENT 1. Executive Summary

1.1. A fiduciary risk assessment for Sierra Leone was carried out as part of the Country Strategy Paper (2013-17)

preparations. The assessment was a combination of a review of documents (the 2010 central level PEFA), interviews with

key public financial management (PFM) officials in the country, discussions with development partners and other field

work as deemed appropriate by Bank staff. The objective is to provide a coherent assessment of the key potential risks

associated with the country PFM system, and recommend suitable mitigating measures to minimize the impact of any risks

identified. The consultations also served to update the status of the PFM reform process subsequent to the 2010 PEFA. In

general, most indicators showed a positive trajectory, with major improvements recorded in external scrutiny and aspects of

financial reporting as a result of the implementation the new IFMIS. The assessment concluded that the fiduciary risk of

Sierra Leone is still substantial, but in light of the positive trajectory relating to the overall PFM performance, and the

series of mitigation measures proposed herein, the assessment rated the residual fiduciary risk as “moderate”, and the

country could thus be a candidate for budget support if required.

2. Overall level of risk

Table 1 below summarizes the overall risk in The Sierra Leone.

Table 1. - Summary of Overall Risk

Elements

Average

Development

Capacity Rating

(based on 2010

PEFA Indicators)

Average

Development

Capacity

Rating (based

on 2013 Field

Review)

Risk

Assessment Trajectory

1. Budget

1.1 The Budget sub-system capacity is adequate to plan

(formulate) budgets for the programs and projects

1.2 The Budget sub-system capacity is adequate to execute

budgetary control of programs or projects

1.5

1.5

2.0

1.8

Moderate

Moderate

↑

↑

2. Treasury

2.1 The Treasury sub-system capacity is adequate to manage

the inflow of resources and disbursements of aid funds.

2.2 The Single Account is an appropriate and reliable way to

administer aid funds

1.5

1.0

1.8

1.0

Moderate

Substantial

↑

-

3. Accounting Recording and Reporting

3.1 The Financial Accounting sub-system is sound and

capacity is adequate to record programme and/or project

transactions and account for their progress and financial

status.

3.2 Financial Management information systems have

flexibility to accommodate specific reporting requirements

of programmes and projects and have procedures in place

to ensure timeliness and quality of information produced.

3.3 The Financial Accounting sub-system has an integrated

Fixed Assets module for the proper recording and control

of assets purchased with programme / project funds.

3.4 The Accounting sub-system maintains up to date records

of the country’s borrowings.

3.5 The Accounting systems are secure against deliberate

manipulation of data and/or accidental loss of or

corruption of data.

1.5

2.3

0.0

1.5

1.2

1.8

2.5

0.0

1.8

1.5

Moderate

Moderate

High

Moderate

Substantial

↑

↑

-

↑

↑

4. Internal Control

4.1 The Internal Control sub-system capacity is adequate to

control the financial operations of programs and projects.

4.2 Competition, value for money and controls in procurement

are adequate

0.8

1.3

0.6

1.2

1.5

0.9

Substantial

Substantial

Substantial

↑

↑

↑

ANNEX 5

Page X/5

X

3. Performance of PFM Systems and Risk Rating

3.1. Budgeting Sub-System: Fiduciary Risk Rating: Moderate

3.1.1. Budgeting is governed by the Sierra Leone’s Government Budgeting and Accountability Act (GBAA) of 2005

(under review). The Act strengthened the institutional and legislative framework for budgeting at central government level,

as well as specifying practices for planning, execution and in-year monitoring and control. The budget classifications are

the same as expenditure codes, which facilitates easy tracking of government expenditure against budget. There have been

significant improvements to the budget classification/chart of accounts over the years, and the current 27 digit chart of

accounts used for financial reporting has 8 segments which are aligned to the IMF’s Government Financial Statistics (GFS)

2001 standards.

3.1.2. Current Risk – The main risk relates to the non-inclusion of donor funded projects in IFMIS reporting as well as

the supplementary budget processing not ratified by parliament. The non-inclusion of donor financing in IFMIS is not in

line with the dictates of the Paris Declaration. Failure to submit supplementary budgets for legislative scrutiny and approval

means that parliament’s carefully determined appropriations can be subverted using the supplementary allocation system,

which affects the integrity of the whole process.

3.1.3. Mitigation – The GBAA 2005 is currently being revised to address areas of weaknesses in PFM and budget

executions. The guidelines of MTEF budgeting have been revised to improve the robustness of the budgeting process, and

ensure all government resources, including donor financing, will be captured in the budget and onto IFMIS. Efforts will

also be made to tighten and follow the legislative supplementary budgeting process. Although more still needs to done in

this area, the proposed revision of the GBAA is expected to address the key existing PFM weaknesses identified. The

assessment in May 2013 rated the sub-system risk as Moderate.

3.2. The Treasury Sub-System : Fiduciary Risk Rating: Substantial

3.2.1. The GBAA 2005 also governs the treasury sub-component. Majority of MDAs and Sub-vented Institutions (SIs)

maintain their bank accounts with the Central Bank of Sierra Leone (CBSL). However, they are also allowed to operate

accounts, including project accounts with the Commercial Banks approved by the minister, MoFED and Accountant

General. The Debt Management Department of MoFED manages both domestic and external debts and reconciles with

Debt Services Department of the CBSL on daily and weekly basis.

3.2.2. Current Risk – The main risk currently relates to non-inclusion of a large number of bank accounts (including

donor financing) from the CRF. This poses inherent challenges to overall treasury management, as well as the timeliness of

cash/bank reconciliations.

3.2.3. Mitigation – The Bank funded WAMZ payment systems project is at an advance stage and will facilitate

additional banks linkages and connectivity between SL banks and with CBSL. The CBSL and commercial banks in Sierra

Leone are expected to go live with real time banking by July 2013. There is also a program for the eventual deployment of

IFIMIS to all MDAs and SIs to improve the efficiency and accuracy in financial reporting. MoFED has taken stock of all

bank accounts being operated by MDAs and SIs (outside the CRF), including donor funded projects, for periodic

monitoring with a view to the establishment of a functional STA in the future. The mitigating strategies are expected to

bring about significant improvements to both treasury management and control, including in the near term. However, the

overall risk associated with the treasury sub-system as assessed in May 2013 continues to be Substantial.

4.3 The Internal Audit function capacity is adequate

5. External Scrutiny and Audit

5.1 The SAI has the level of “independence” needed to enable

it to effectively fulfill its functions.

5.2 The SAI has the capacity to meet its audit mandate

1.0

1.0

1.5

2.0

Substantial

Moderate

↑

↑

Risk assessment key:

Below 0.75 = High Risk, Between 0.76-1.50 = Substantial Risk, Between 1.51-2.50 = Moderate Risk, Between 0.76-1.50 =

Substantial Risk

ANNEX 5

Page XI/5

XI

3.3. Accounting Sub-System: Fiduciary Risk Rating: Moderate

3.3.1. The GBAA 2005 Act forms the basis of all government accounting. According to Section 10(1) & (2) the

Accountant-General is responsible for keeping, rendering and publishing statements of the public accounts. The

government has indicated its intentions to adopt IPSAS, and AG’s accounting policies and procedures manual will be

revised in line with the IPSAS and take into account the newly installed IFMIS facility. However, the Auditor General’s

report on the financial statements notes that IPSAS accrual was not consistently complied within the preparation of the

latest financial statements.

3.3.2. Current Risk – The current main risk relates to approximately 40% of the government budget that is still accounted

for manually (outside IFMIS). This leads to issues of data integrity that are associated with such transitions to a

computerized environment. In addition, both the internal and external audit functions are not connected to IFMIS, which

has implications on their ability to audit IFMIS generated data effectively and in a timely manner.

3.3.3. Mitigation Measures – The reform unit and AG are committed to extending the deployment of IFMIS to the bigger

spending MDAs which constitute about 90% of government expenditure within the shortest possible time, although this is

currently on hold due to suspension of the vendor (Freebalance). The financial reporting requirements of the smaller units

constituting the remaining 10% will be handled directly by the AG’s department to ensure all expenditure goes through the

IFMIS. In addition, an Internal Audit Act is in the process of being enacted to guide and strengthen the operations of the

IA. The IA will be connected to IFMIS and adequately resourced to help strengthen the internal control environment. Due

to the fact that 60% of the budget is already accounted for using a safe a reliable IFMIS, with positive steps for bringing the

remaining 40% online in the shortest possible time, the residual risk associated with the accounting sub-system was rated

Moderate as at May 2013.

3.4. Internal Control Sub-System: Fiduciary Risk Rating: Substantial

3.4.1. The introduction of the IFMIS has enhanced the accuracy and timelines of financial reporting and some key

aspects of the internal control system, including the automation of bank reconciliation statements where possible, and more

timely public debt reconciliation and verification. However, as noted earlier, a number of MDAs accounting systems are

still manual; the internal audit function is inadequately resourced, not backed by a substantive Act, and lacks the required

independence.

3.4.2. Current Risk – The Internal Audit unit is not regulated by an Act as dictated by good practice, is under staffed and

lacks qualified and experienced. The unit is not autonomous and lacks appropriate independence.

3.4.3. Mitigation measure – A draft IA act has been prepared for consideration and to be passed into an Act to govern its

operations and also give it the necessary independence to operate. The unit through the support of GoSL is in the process of

developing an Internal Audit Charter, which will further govern its operations and provides professional development

support for staff. However, both the IA Act and Charter are still too far from completion to positively impact the risk rating

for the sub-system. Consequently, the assessment concluded that the sub-system risk is still Substantial at May 2013.

3.5. The External Scrutiny Sub-System: Fiduciary Risk Rating: Moderate

3.5.1. The establishment of the office and functions of the Auditor General (AuG) are governed by section 119 of the

constitution, GBAA 2005 and the Audit Service Act 1998. The President appoints and removes the Auditor General.

Section 119 (6), states that the autonomy of the AuG in the exercise of duties and shall not be subject to the direction or

control of any person or authority. However, in terms of good practice, the provision relating to the unconditional powers of

the President to terminate the Auditor General’s appointment is generally considered as a limitation of the independence

and powers of the AuG. Financially, both the constitution and the Audit Service Act give adequate autonomy to the AuG’s

Office. In practice however the budget allocations of the Audit Service are usually constrained by limited government

resources and the AuG’s office is thus subject to strict budget ceilings of MoFED, which again acts against the unit’s

independence. AuG’s audit reports and recommendations submitted to Parliament are now given the attention they deserve.

The reports are given wide press coverage and include discussions involving civil society, Ant-Corruption Commission and

other interest groups.

3.5.2. Current Risk- the key risk relates to impediments to the AuG’s independence occasioned by MoFED’s control of

the budget, as well as the risk of arbitrary termination of office.

3.5.3. Mitigation measure - This will require some modifications to the enabling legislation as part of the on-going PFM

reforms so that the AuG’s independence can be expressed in terms of both the law and the practice. As a result, the current

residual risk for the sub-system has been rated Moderate as at May 2013.

ANNEX 5

Page XII/5

XII

4. Procurement: Fiduciary Risk Rating: Substantial

4.1. The public procurement system in Sierra Leone comprises of a 2004 Public Procurement Act, the Regulation,

Manual and Standard Bidding Documents for goods, works and services all adopted in 2006 and developed in line with

internationally recognized best practices. In 2005, the Act allowed for the creation of the National Public Procurement

Authority, Procurement Committees, Procurement Units, Bid Evaluation Committees and the Independent Procurement

Review Panel. The 2010 PFM performance assessment report, the 2012 country procurement performance review report

and the Bank’s 2011 assessment of the national competitive bidding procedures report noted some inconsistencies,

contradictions and ambiguities in language, procurement methods and thresholds amongst the PPA, its Regulations,

procurement manual and standard bidding documents. The NPPA is currently addressing these shortcomings.

4.2. Current Risk – There is inadequate capacity at both NPPA and MDAs and this impedes the efficient and effective

functioning of the procurement system. The low capacity of procurement practitioners and weak functioning of the

procurement structures across the board results in a residual risk of the procurement sub-system of Substantial as at May

2013.

4.3. Risk Mitigation - The procurement Act is being revised which will take into account the inconsistencies,

contradictions and ambiguities identified by various fiduciary assessment reports amongst procurement instruments.

Furthermore, once the revised Act is approved, World Bank has expressed willingness to support the recruitment of a

consultant to revise the regulation, manual and standard bidding documents. As part of the measures to also mitigate the

inadequate human and logistical capacity of NPPA, MDA and procurement practitioners, the World Bank in support of

government’s efforts has a pipeline project aimed at improving the procurement system significantly

5. Governance: Fiduciary Risk Rating: High

5.1. In the past decade, the country has made the third largest improvement in governance of any African country.

According to the Mo Ibrahim Index of African Governance Sierra Leone has increased in ranking from 48th

(2011) to 30th

(2012) out of 52 countries. In 2010, the DBI ranked Sierra Leone in the top 25 in the world for overall improvement in

ease of doing business over the last five years, and was praised for its investor protection reforms and administrative tax

compliance reforms. In 2013 improvements were made in the areas of registering property and getting credit. Since 2007,

there are some indications of political will to more effectively tackle corruption. This is reflected in the 2011 Global

Corruption Barometer, with an increase of respondents assessing the government’s actions in the fight against corruption as

effective, from 63% in 2009 to 73% in 2011. While anti-corruption institutions lack resources, staff and expertise to

effectively prevent and combat corruption, recent reforms of the Anti-Corruption Commission have extended its powers

and contributed to significantly improve its capacity to investigate and prosecute corruption cases. Emerging civil society

activism, an outspoken media and the support of the international community to the government’s anti-corruption efforts

are promising factors accompanying this positive trend.

5.2. However, corruption permeates almost every sector of Sierra Leone’s public life. In 2012, Sierra Leone scored 31

on a scale of 0 (highly corrupt) to 100 (highly clean) in Transparency International’s (TI) Corruption Perceptions Index,

ranking 123 out of 176 countries. The 2011 Worldwide Governance Indicators also reflects Sierra Leone performing well

below average on the six dimensions of governance. While it has maintained performances in terms of voice and

accountability and political stability in recent years, major challenges continue in the areas of government effectiveness

(9.95 on a scale of 0 to 100), rule of law (22.54), and control of corruption (26.54).

5.3. More needs to be done to improve and consolidate these achievements as the country now faces significant new

PFM opportunities and challenges, particularly those arising from expected streams of revenue from natural resource assets,

which has not yet translated into sustainable, inclusive economic growth, and governments renewed determination to close

its infrastructure deficit. More generally, there is a significant gap between PFM policies, rules and procedures and their

actual implementation in practice in MDAs and at local level. The Government recognizes the need to address corruption

issues and promote good governance as part of its current development strategy which identifies governance and

management of natural resources as two key pillars in its strategy. The A4P supports the country’s long-term vision of

becoming an inclusive and green middle-income country by 2035. This will require effective governance with set

guidelines and rules supported and executed by responsible institutions.

ANNEX 5

Page XIII/5

XIII

6. Bank’s Fiduciary Strategy during the CSP period

6.1. Financial Management

Efforts to include aid on budget will continue in sync with the progress of the IFMIS roll out. All MDAs and ISs that are

connected to the IFMIS will hence forth use the IFMIS for accounting and reporting for all new projects coming on stream.

On-going projects that are able to migrate without causing undue disruption will be encouraged to do so, otherwise they

will see out their remaining project lives using existing arrangements. Subject to a satisfactory Supreme Audit Institution

(SAI) Assessment, the audit of Bank financed projects will be moved from the present private audit firms to the ASSL

during the CSP period. Special Accounts, where required, will be opened through the CBSL.

6.2. Procurement

The Bank should complement the existing capacity building initiatives in the country and an updated FRA should be

undertaken during the appraisal of the budget support operation to determine whether the Bank could gradually adopt

country procurement systems in the management of projects. As an interim measure, the Bank should use the country’s

NCB procedures with exceptions on the gaps identified until the revised PPA is approved by parliament

ANNEX 6

Page XIV/1

XIV

PORTFOLIO STATUS (AS AT MAY 31, 2013)

No. Project Name Project ID

Approval

Date

1st Disb.

Effective

Completion

Date

Net

Loan/Grant

(UA) Disb.Ratio

Financing

Source Sector Name Age (yrs) IP** DO**

Implementation

Status

1 PORT LOKO LUNGI ROAD P-SL-D00-004 17.06.2009 03.03.2011 31.12.2013 26,260,000 62.06 FSF Transport 3.88 1.9 2.7 NON PP/NON PPP

05.04.2012 30.06.2016 3,180,000 - ADF

05.05.2012 30.06.2016 6,820,000 - ADF

05.06.2012 30.06.2016 12,000,000 - FSF

26.10.2010 23.11.2011 31.12.2015 6,100,000 - ADF

26.10.2010 23.11.2011 31.12.2015 14,700,000 16.17 ADF

26.10.2010 23.11.2011 31.12.2015 6,500,000 - FSF

26.10.2010 08.09.2012 31.12.2015 1,200,000 7.54 FSF

4 ADDAX BIOENERGY PROJECT P-SL-AAG-002 08.04.2011 05.03.2012 31.12.2023 21,694,421 85.15 ADB Private 2.07 1.5 1.8 PP

02.02.2005 21.02.2006 31.12.2013 10,000,000 56.14 ADF

02.02.2005 09.11.2006 31.12.2013 2,000,000 68.30 ADF

6

PFM AND BUSINESS ENABLING

SUPPORT PROJECT P-SL-K00-006 30.09.2011 31.01.2012 31.12.2014 4,000,000 25.57 FSF Multi-Sector 1.59 3.0 3.0 NON PP/NON PPP

7 CENTRAL BANK OF SIERRA LEONE P-SL-HA0-004 30.11.2011 12.09.2012 31.12.2013 807,018 28.64 FSF Finance 1.42 2.6 3.0 NON PP/NON PPP

8 EMERGENCY ASSISTANCE CHOLERA P-SL-IBE-001 11.10.2012 21.11.2012 31.10.2013 496,939 100.00 ADF Social 0.56 - - NO SUPERVISION

9

TECH ASSISTANCE FOR MCC CA

DEVELOPMENT P-SL-KF0-006 31.03.2013 08.05.2013 31.12.2013 137,467 - FSF Multi-Sector 0.09 - - NO SUPERVISION

10

SUPPORT TO THE PPP UNIT - OFFICE

OF PRESIDENT (SL) G-SL-KF0-SUP-001 07.09.2012 24.10.2012 31.12.2013 213,447 - TF Multi-Sector 0.65 - - NO SUPERVISION

116,109,292 40% 2.2 2.4** 3--> Highly Satisfactory; 2--> Satisfactory; 1--> Unsatisfactory; (-) -->No supervision

2

3

P-SL-DB0-005

P-SL-EA0-001

27.03.2013

P-SL-AA0-0075

MATOTOKA SEFADU ROAD

REHABILITATION PROJECT

THREE TOWNS WATER SUPPLY AND

SANITATION

AGRICULTURE SECTOR

REHABILITATION

Transport

Water Supply

& Sanitation

Agriculture

NON PP/NON PPP

NON PP/NON PPP

NON PP/NON PPP

1.07 2.2 3.0

2.52 2.3 2.3

8.25 2.2 2.5

ANNEX 6

Page XV/1

XV

66,1% 18,7%

10,3%

3,7% 0,7%

0,4%

Sectorial Distribution

InfrastructurePrivateAgricultureMulti-sectorFinancialSocial

81%

19%

Type of Instrument

NationalInvestm.Projectsand Inst.Support

Private

0 20 40 60

2007

2008

2009

2010

2011

2012

Amount Disbursed (UA million)

Ye

ar

Annual Disbursement

ANNEX 7

Page XVI/1

XVI

2013 COUNTRY PORTFOLIO IMPROVEMENT PLAN (CPIP) Major Issues Action Required Responsibility Timeline

(1) Project Design/Appraisal

(1.1) Ill-defined roles of PIU staff (1.1) Develop and agree on a set of policy measures to clearly define the responsibilities and appropriate

future role of PIUs and sustainability arrangements (including transitional roles of current PIUs). MoFED/PIUs Immediate

(1.2) Inadequate design and implementation

readiness (1.2) Simplify loan conditions whilst ensuring project readiness through sound preparation work GoSL/AfDB On-going

(1.3) Lack of funding for M&E training (1.3) Involve M&E Experts in project design and provide them with training during the early stages of

project implementation

GoSL/PIUs/AfD

B Immediate

(1.4) Non-operational M&E systems making it

impossible to generate requisite project data (1.4) Estimate cost of M&E systems during appraisal and provide for corresponding budget PIUs/AfDB On-going

(2) Civil Works

(2.1) Lack of budget allocation to cater for cost

overruns

(2.1) Ensure the accuracy of project cost estimates at appraisal realistic, while ensuring inclusion of

contingencies.

GoSL/

AfDB/PIUs On-going

(2.2) Lack of adequate funds to maintain

completed civil works facilities (2.2) Explore alternative funding options for maintenance of civil works. GoSL Immediate

(2.3) Local private sector contractors often too

young and inexperienced (2.3) Provide training for local service providers, especially civil works contractors GoSL/AfDB

December

15,2013

(2.4) Bureaucracy (delays in approvals at various

levels of Government) (2.4) Reduce the number of signatories required on payment certificates GoSL Immediate

(2.5) Low capacity and performance of national

civil works contractors (2.5) Foster policy on commercial loan acquisition for national contractors. GosL On-going

(3) Fiduciary

(3.1) Procurement

(3.1.1) Inadequate funds allocated by PIUs for

procurement t training. (3.1.1) Provide continuous capacity building on procurement for all levels AfDB

December

15,2013

(3.1.2) Poor contract management leading to

delays in project implementation.

(3.1.2) Provide training in contract management. Include the participation of commercial banks and

contractors AfDB/MoFED

March

31,2014

(3.2) Disbursement

(3.2.1) Long timeframe at each disbursement

authorizing/processing stage

(3.2.1) Reduce disbursement timeline by allowing the use of special accounts for works contracts rather

than direct payments AfDB On-going

(3.2.2) Loss to contractors due to exchange rate

volatility (3.2.2) Align payment terms with funding requirement PIUs/AfDB On-going

(3.3) Financial Management and Audit

(3.3.1) Bureaucracies in recruitment of auditors (3.3.1) Reduce the bureaucracies in recruiting auditors. AfDB On-going

(3.3.2) Inadequate follow-up on project audit

recommendations (3.3.2) Capacitate Internal audit to oversee the implementation of external auditors recommendations PIUs/GoSL Immediate

(3.3.3) Lack of computerized accounting systems

in PIUs (3.3.3) Maintain computerized accounting systems at PIUs and train Project Accountants accordingly PIUs On-going

ANNEX 8

Page XVII/1

XVII

INDICATIVE DONOR DIVISION OF LABOR IN SUPPORT OF AGENDA FOR PROSPERITY

ANNEX 9

Page XVIII/5

XVIII

ANNEX 9: CSP RESULTS FRAMEWORK

Pillar and

Sub-Pillar

Goals

Key

Constraints/Issues

Impeding

Achievement of

Goals

Final Outcomes

(expected by end of

CSP, 2017)

Final Outputs

(expected by end of

CSP, 2017)

Mid-Term

Outcomes

(expected by 2015)

Mid-Term Outputs

(expected by 2015)

ADB

Interventions

Expected During

CSP c/

PILLAR 1: ENHANCING ECONOMIC GOVERNANCE AND TRANSPARENT MANAGEMENT OF NATURAL RESOURCES

REVENUE

Sub-pillar 1:

Public Financial

Management &

Transparency:

Goal: Strengthen

capacity systems

and processes to

increase efficiency,

transparency and

accountability of

public institutions to

ensure that public

resources are

effectively and

efficiently

managed,

monitored, and

accounted, free from

corruption.

- Weak capacities of

public entities (at central

and local council levels) to

accurately plan, manage

and monitor government

budgets, ensuring

transparency and

accountability for

government revenues,

expenditures and other

resources;

- Weak PFM systems,

processes, policies &

procedures and

procurement practices, at

all levels, combined with

ineffective implementation

of policies for control of

corruption.

- Increased

transparency and

predictability in the

budgeting, revenues,

and expenditure

outturns, through

enhanced financial

reporting

PEFA PI 1

Baseline (2010): B

Target (2017): B+

PEFA PI 24

Baseline (2010): B+

Target (2017): A

PEFA PI 25

Baseline (2010): C+

Target (2017): B+

- End-year budget

executions, with

detailed fiscal outturns

produced quarterly and

published outturns and

budget reports on the

MOFED website and

outreach areas.

- In-year Budget

execution reports and

year-end financial

statements posted to

MoFED on a timely

basis increasing

transparency

- In-year budget

executions, with

detailed fiscal outturns

produced quarterly and

year-end financial

statements produced

(no more than 14days

after the quarter and not

more than 3 months

after year end)

Ongoing:

EGRP II 2011-2012

PFMBESP 2012-

2014

New:

FSF Support via

Budget Support

2014-2017

ISP 2014/2015-2017

Partners: WB, EU,

IMF, DFID

- Enhanced legislative

scrutiny and follow up

on audit reports

Baseline (2010):

PEFA PI 27-C+ and

PI-28-D+ ;

Target: (2017) of at B

for both PI- 27 and

28.

- Timely public

hearing of external

audit reports involving

TV and radio coverage

by inviting ministers of

state, heads of MDAs

and other officers

linked to audit findings

as per legislation.

- Increased legislative

scrutiny in the budget

process, enforcement of

audit recommendation

and improved control

environment through

effective internal audit

function.

- Audit implementation

plan prepared outlining

recommendations and

follow-up action by

GoSL.

- Internal audit Act

enacted and operative to

make IA effective.

- Improved

competition, value for

money and controls in

procurement through

compliance of

procurement

procedures

- % of MDAs

compliant with

procurement

procedures

Baseline: 67%

Target: 100%

- Increased use of the

country procurement

system by external

stakeholders

- NPPA fully

established in the

regions to increase

coverage, Procurement

directorate created and

operational

ANNEX 9

Page XIX/5

XIX

Baseline (2010):

PEFA PI 20-C+

Target (2017): B+

Sub-pillar 2:

Natural Resource

Governance

Goal: To enhance

natural resource

governance, and

thereby contribute to

sustainable resource

development and

increased public

revenues

- Weak revenue

transparency and

accountability, especially

in the mining and energy

sectors; and challenges to

optimize revenue

generation and collection

resulting from large scale

mineral investment

- Weak capacity of public

and CSO stakeholders in

terms of understanding the

value chain of extractive

industries

- Enhanced domestic

revenue mobilization

in the mining and

non-mining sectors.

Baseline: 12.6%

(2012)

Target: 23%

- NRA capacity

enhanced (e.g.

Minerals tax unit

within NRA

established; taxation of

large tax payers

enhanced e.g.

telecommunication

companies; NRA able

to report annually on

mining revenues in a

transparent way).

- Improved

administration of taxes

in the extractive sector

- Minerals tax unit

established

New Lending:

ISP

Budget Support

New Non-Lending:

- Domestic Revenue

Mobilization Study

- Minerals Fiscal

Regime

Harmonization Study

(MRU)

- Mapping of Natural

Assets

Partners: DFID,

UNDP, GIZ, IMF

- Strengthened

participation of civil

society in policy

dialogue and

monitoring of

Government revenues

- Number of policy

reforms/recommendati

ons from Civil Society

approved by

Government

- Strengthened

participation of civil

society in policy

dialogue and

monitoring of

Government revenues

- Development of

accountability forums

in the councils and

chiefdoms

Sub-pillar 3:

Improved business

enabling

environment Goal: To improve

business enabling

environment and

drivers for

promoting inclusive

and green private

sector development

Challenges, include: (i)

poor infrastructure (i.e.

electricity, roads, & ICT);

(ii) lack of access to

finance especially among

women; (iii) administrative

barriers (legal and

regulatory) such as absence

of an SME policy and

other regulatory

frameworks for business;

(iv) Weak SME linkages;

(v) significant lack of

entrepreneurial and

vocational skills; and (vi)

weak private sector

capacity to forge effective

business associations for

enhanced advocacy of

- Improved business

environment

Baseline (2013): 140

Target (2017): 110

(Based on Doing

Business Rankings)

- Implementation of

Doing Business

reforms (at least 3 per

year)

- Improved Access to

Finance for the private

sector

- Increased number of

regulatory frameworks

formulated and

functional

Ongoing:

PFM and Business

Enabling Support

Project

Partners: DFID, EU,

IFC, WB - Increased # of

viable and diversified

enterprises

(disaggregated to

highlight green

businesses like

renewable energy or

eco-tourism)

- Support to policy

framework for the

development of SMEs

- Increased number of

small and medium-

scale enterprises.

- Increased number of

female owned SMEs

- A gender responsive

SME Policy approved

and implemented

ANNEX 9

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XX

business environment.

PILLAR 2: SUPPORTING TRANSFORMATIONAL AND SUSTAINABLE INFRASTRUCTURE DEVELOPMENT

Result 1: Energy

Goal: To increase

access to sustainable

energy services and

affordable/reliable

power for

communities and

economic prosperity

- Electricity access is

weak.

- Power generation

capacity is inadequate to

meet demand

- Inadequate transmission

and distribution capacity

- Weak institutional

capacity of the Ministry of

Energy.

- Access rate has

improved from 2%

currently to 6%

- 26 additional

communities

connected to the

electricity network

- Generation capacity

increases from 90 MW

currently to 105 MW

- Construction of 550

km 225 kV

transmission line and 5

substations

- Improved capacity

of the Ministry of

Energy for negotiating

contracts and building

a pipeline of

investments : 2 PPA

contracts concluded; 4

feasibility studies

completed

- Access rate has

improved from 2%

currently to 4%

Capacity of the

Ministry of Energy

built

New Lending:

Partial Risk

Guarantee to secure

the 15 MW off-take

from the Addax

Biofuel Energy

CLSG Project:

Interconnection and

electrification of 26

communities along

the CLSG line

(additional

560GWh/year

available for the grid

by 2016)

Partners: WB, JICA,

DFID, KfW, EIB

Result 2:

Transport/ Roads

Sub-sector

Goal: To improve

road accessibility

and connectivity,

which will

contribute to

inclusive and green

growth, promote

national and

regional integration,

improved urban

transport, and the

- Poor road condition

resulting in hindered

accessibility and

connectivity nationally

and regionally.

Suppressed economic

diversification and trade

opportunities due to

inadequate transport

infrastructure and services -

- Lack of axle load

control regulatory

framework, inadequate

provisions for road

- Improved core road

network

(CRN=primary &

secondary class roads)

conditions in at least

“good” condition.

Baseline: 36.9 % of

CRN (2011)

Target: 50 % of CRN

(2017)

- Increased share of

paved road network

Baseline: 8.9% (1031

km) (2012)

- 70 km of road

rehabilitated (between

Matotoka and Yiye)

- 65 km of road

upgraded (between

Bandajuma and

Zimmi), with climate

change resilience

integrated

- 88 km of road

upgraded between

Kenema and

Zimmi.[Medium

Scenario]

- Reduced travel time

and enhanced road

safety in completed

sections.

- Improved road

condition and

sustainability in the

completed road

sections

- Reduced VOC in the

completed road

sections

- Enhanced access to

markets and trading

- Road upgrading

contracts awarded, and

related services

contracts.

- 20% of the expected

Employment generation

(at least 30% for

women).

- Axle load control

Enforcement Strategy

completed.

- Completed Ports

Lending

Ongoing:

- Matotoka – Sefadu

Road, Section I:

Matotoka – Yiye (70

km)

- Lungi – Port Loko

Road (62 km)

New:

- Bandajuma - Zimmi

road (61 km);

Kenema – Zimmi

road (88 km)

Non-Lending

ANNEX 9

Page XXI/5

XXI

socio-economic

development of

Sierra Leone

maintenance; and poor

road safety.

- Institutional capacity for

effective coordination of

the sector

Target: 10.2% (1184

km) (2017)

- Enhanced national

and regional

integration

interconnectivity along

specific trade routes

Baseline (2012): VOC:

0.75 USD/km – light

trucks; Travel Time :

Bandajuma – Zimmi:

5.25 hrs; Kenema –

Zimmi: 3.75 hrs

Target: VOC: 0.50

USD/km – 30%

reduction (light

truck);Travel Time:

Bandajuma – Zimmi:

1 hr ;Kenema –

Zimmi: 1.5 hrs

- Reduced road

maintenance needs

through

implementation of

network wide axle

load control.

Baseline: No axle load

control (Aug 2013)

Target: Axle load

control measures fully

rolled-out in paved

Core Road Network

(2017); at least 95%

compliance level

established.

- Employment

generated during

construction [100,000

person-days]. (at least

30% of jobs created

for women)

- Axle load control

measures instituted

and enforced

- Gender Responsive

Ports Development

Master Plan

opportunities within

and between Sierra

Leone and neighboring

countries.

- All legal and

statutory requirements

for implementation of

network wide axle

load control

completed.

- Axle load control

measures rolled-out in

at least 50 % of paved

Core Road Network

(2015); at least 95%

compliance level

established in rolled

out areas.

Development Gender

Responsive Master

Plan

- Development of

Ports Master Plan

Partners: EU, China,

WB, OFID, IsDB

Result 3: Water

Supply and

- Inconsistent water and

sanitation sector policies

- Limited Capacity to

- Increased Water

Supply Coverage from

57 - 70% & Sanitation

- National Sector

Agencies restructured

and 100% staffed with

- Increased Water

Supply Coverage from

57 - 62% & Sanitation

- National Rural water

Supply and Sanitation

Program developed by

On-going

-Three towns Water

Supply and

ANNEX 9

Page XXII/5

XXII

Sanitation

Goal:

Improve sustainable

and equitable access

to water supply and

sanitation for all

uses including the

sustainable

management of

water resources to

ensure prosperity.

deliver water and

sanitation services

-

- Limited stakeholder

coordination among

national stakeholders

- Limited Coverage and

low functionality rate of

existing water supply

and sanitation systems,

exacerbating water borne

disease prevalence,

including frequent

cholera epidemics

- Weak sector monitoring

system

Coverage from 13 -

45%. - Reduced Non-

Revenue Water in

Urban areas for

SALWACO from 95 -

25%. - Improved Water

Point Functionality

from 65 – 85% - Reduced Water

Borne Disease

prevalence: Cholera

from 4 – 2% &

Diarrhea from 14-7%

- Structured and regular

CSO & CBO activity in

the sector.

trained and equipped

personnel, 30% female

- Local Council

Sector Specific staff

positions are filled

with appropriately

trained and equipped

personnel

- Annual Sector

Monitoring Reports

published and Joint

Govt/Donor Sector

Reviews held annually

- Flagship studies

carried and at least one

Best Practices Report

produced &

disseminated every

year

(5) - Increase in sector

financing from 0.35%

GDP to 1% GDP

Coverage from 13 -

25%. - Reduced Non-

Revenue Water in

Urban areas for

SALWACO from 95 -

50%.

- Improved Water Point

Functionality from 65 –

75% - Structured and regular

CSO & CBO activity in

the sector.

2015

- National Groundwater

Map produced by 2014

- 75% of the required

Sector agencies staff at

national and local levels

are trained and in post

- Financing for sector

increased to 0.7% of

GDP

- 3rd Annual Sector

Monitoring Report

produced and 3rd

joint

Sector Review held

Sanitation Project

(Bo, Makeni and

Kenema cities)

ADF 12 Lending

(New)

Rural Water Supply

and Sanitation

Project

Partners: DFID,

JICA, WB, UNICEF,

WFP, WHO

ANNEX 10

Page XXIII/1

XXIII

INDICATIVE RESOURCE ALLOCATION (2013 – 2017)

Project Approval

Year

ADF &

FSF UA

million

Other

UA

million

Total

Allocation

ADF &

FSF UA

million

Other

UA

million

Total

Allocation

ADF &

FSF UA

million

Other

UA

million

Total

Allocation Sources of Funding

Low Scenario Medium Scenario High Scenario

Rural Water and Sanitation

Project 2013 20.4** 4.6 25.0 20.4** 4.6 25.0 20.4** 4.6 25.0

ADF 12 - UA 9.065 m

(Loan), UA 2.854 m

(Grant); FSF UA 8.468 m;

RWSSI-TF UA 4.61m

WAPP Interconnection

Project (multinational) 2013 9.2 18.5 27.7 9.2 18.5 27.7 9.2 18.5 27.7

ADF 12 UA 9.2 ; Regional

12 UA ml; NTF USD 10

m (UA 6.5m)

FSF Pillar III Targeted

Technical Assistance 2013 1.8 1.8 1.8 1.8 1.8 1.8 FSF UA 1.8 m

Trans-boundary Water

Resources Management of

the Manor River Basin 2013 1.0 1.0 1.0 1.0 1.0 1.0 AWF - UA 1.0 m

Budget Support Program 2014 - 16 15.0 15.0 15.0 15.0 15.0 15.0 ADF 13 - UA 15.0 m

Institutional Support Project 2014 - 17 5.0 5.0 5.0 5.0 5.0 5.0 ADF 13 -UA 5.0 m

Upgrading of Zimmi –

Bandajuma Road 2014 - 16 13.0 26.0 39.0 13.0 28.0 41.0 13.0 28.0 41.0

ADF 13 – UA 13.0m;

Regional - UA 26- 28 m

ADDAX Bioenergy Partial

Risk Guarantee 2014 - 16 3.0 3.0 3.0 3.0 3.0 3.0 ADF 13- (15 MW to NPA)

Bumbuna Hydroelectric

Power Project II 2015 - 17 100.0 100.0 100.0 100.0 100.0 100.0 Private Sector

Upgrading of the Kenema -

Zimmi Road - 88 km linking

up to Trans-West African

Coastal Highway) 2015 - 17 15.0 28.0 43.0 30.0 58.0 88.0

ADF 13 – UA 15 - 30 m;

Regional - UA 28-58 m

Total ADF-12 Period (2013) 31.4 24.1 55.5 31.4 24.1 55.5 31.4 24.1 55.5

Total ADF-13 Period + 1st

year of ADF 14 (2014-2017) 36.0 126.0 162.0 51.0 156.0 207.0 66.0 186.0 252.0

TOTAL 67.4 150.1 217.5 82.4 180.1 262.5 97.4 210.1 307.5

** Includes DFID’s co-financing of UA6.03 million to be channeled through FSF

ANNEX 11

Page XXIV/1

XXIV

INDICATIVE NON- LENDING PROGRAM FOR 2013-2017

2013 o Stock Taking Report on Green Growth

o African Economic Outlook: Sierra Leone Chapter

o Skills Gap Analysis for Private Sector Development

2014 o African Economic Outlook: Sierra Leone Chapter

o Domestic Resource Mobilization Study

o Country Portfolio Performance Review

o Minerals Fiscal and Licensing Regimes Harmonization Study (at MRU level)

o Port Master Plan Study

2015 –

2017

o African Economic Outlook: Sierra Leone Chapter

o PEFA/ PFM Review

o Other ESWs TBD during the CSP period