Poverty Reduction

The Bank’s Vision and the Strategic Plan prepared to implement it state clearly that poverty reduction is its overarching objective.

The policy takes into account experiences in poverty reduction in the last decade at the Bank, in its regional member countries (RMCs) and its development partners. Accordingly, poverty reduction is at the center of recent Country Strategy Papers (CSPs). Bank support for the preparation and implementation of Poverty Reduction Strategy Papers (PRSPs); the achievement of Millennium Development Goals (MDGs); the Bank’s own Water Initiative; the New Partnership for Africa’s Development (NEPAD) and the international efforts to enhance development effectiveness through increased harmonization of policies, programs and procedures is also gaining momentum.

In addition, improvements in quality-at-entry of Bank interventions, the assessment of the development effectiveness of government policies in poverty reduction as well as reduced income inequality are important components of the Bank’s Country Performance and Institutional Assessment (CPIA) framework.

This framework is being used to allocate resources in favor of poor African countries with policies that focus on macro-economic stability, poverty reduction, good governance, and gender equity. Efforts are also underway to ensure that the impact on poverty reduction of programs and projects in sectors such as agriculture, education, health and infrastructure are specific, monitorable and significant. In this regard, as indicated below, the implementation of the Policy on Poverty Reduction is expected to enhance the effectiveness of Bank interventions on the welfare of the poor and the achievement of MDGs in its RMCs.

In order to maximize the impact of its interventions, the Bank has prepared a policy on poverty reduction, which was approved by the Boards in February 2004.

Bank Group Policy on Poverty Reduction, February 2004

An important element of the policy is that it elaborates on the poverty dimensions of the major themes articulated in the Vision, the Strategic Plan and the other Bank policy papers. It also takes into account lessons learnt in national poverty reduction efforts and the experience with international aid for social and economic development.

The main objective of the policy is to provide a framework for action by putting poverty reduction at the center of Bank support for its RMCs. This is especially the case with their efforts to prepare, implement, and evaluate their PRSPs as well as the achievement of MDGs.

Operationally, the policy underscores the importance of linking country programs with the PRSP process. As a result, new CSPs draw on the poverty diagnostics, sectoral priorities, cost estimates and outcome indicators specified in the PRSPs. Moreover, the preparation and implementation of CSPs entails greater reliance on national institutions, lending instruments such as Sector Wide Approaches (SWAPs) and as much as possible budgetary support.

The policy also ensures consistency of project cycle activities with the participation dimensions of PRSPs. This aspect is being implemented through the promotion of greater participation of CSOs in project identification, design, implementation and evaluation as well as support for PRSP-related poverty.