P-ZM-IZ0-002

Project Details
ID: P-ZM-IZ0-002 Name: FOURTH POVERTY REDUCTION BUDGET SUPPORT PROGRAM (PRBS IV) Status: Closed Country: Zambia
Sector: Social Approval date: 28-sep-2011 Task Manager: KUNENE Benedict Vusi Boy, RDGS4
Total cost: 15000000
Currency: UAC
Source(s) of financing
ADF: 15000000
Implementing Agency: GOVERNMENT OF ZAMBIA Location: TROUGHOUT ZAMBIA

Objectives

The purpose is to create fiscal space for pro-poor development policies and step up access to social services like water and health to a larger share of the population.

Description

The programme has two components, namely: (i) Improving the efficiency and transparency of Public Financial Management and increase Revenue Mobilisation, and (ii) Enhancing access to Social Services. In view of the weak public financial management and the need to improve transparency and accountability, the first component will support actions aimed at enhancing efficiency of the oversight institutions in addition to other PFM activities. The operation will also support efforts aimed at increasing the revenue base for pro-poor expenditures.In this regard, support will go towards review of the tax system. The second component will support activities aimed at improving access to key social services like water and health in rural areas. These components have been carefully selected based on the targets jointly identified by the GRZ and the cooperating partners and included in the PAF matrix (see Annex II). They also take into account the implementation capacity of the GRZ and the relationship to other Bank operations, as substantiated in paragraph 3.4. Further, the identification of components of this operation helps deepen reforms supported by past budget support operations and complements reforms supported by other development partners.

Benefits

Expected programme outcomes are: (i) Improved public financial management; (ii) Increased revenue base to predictably finance social services base; (iii) Increased share of population with access to social services (health and water). Beneficiaries are the Zambian population, especially in poor rural areas, and women and children. Beneficiaries will include the entire population of Zambia, due to the broad reform agenda and emphasis on public financial management and on social services. Efficient and transparent public financial management will translate into better use of available budget resources and over time provide the fiscal space needed to increase the share of budget appropriation which goes to priority sectors like health, education and water/sanitation. The targets for access to social services set in the second component of the programme will benefit specific segments of the population, like those in poor rural areas and mothers / children. The programme will thus make a significant contribution towards achieving several of the Millennium Development Goals. While the proposed operation benefits the Zambian population as a whole, and poorer districts in particular, two among the five prior actions do have a specific impact on women. The action to provide safe water supply to 36 districts will mostly benefit women, as they are the ones usually burdened with the daily chore of walking long distances to fetch water for the household, and will also contribute to improved school enrolment / retention for adolescent girls by relieving them from this task. The prior action consisting in full immunisation of children under one year of age in 20 of the worst performing districts of Zambia obviously benefits the concerned children, but also their mothers under an integrated maternal and child health approach. Given that PRBS IV is a budget support operation, it is expected that the policies it supports are not likely to have direct effects on the environment and natural resources.

Rational

The programme is consistent with the Bank's Medium Term Strategy 2008-12 and the Results Based Country Strategy Paper (RB-CSP) 2011-2015. The RB CSP is based on two pillars: (i) Support to Economic Diversification through Infrastructure Development; and (ii) Support to Economic and Financial Governance. More specifically, the CSP aims at strengthening critical capacities in both the public and private sectors, thereby enhancing the ability of the public sector to provide effective social services delivery. The proposed programme will support mainly the second CSP pillar, through its strategic emphasis on accountability and transparency in management of public resources and on revenue collection, and through directly addressing the issue of access to social services in critical areas like water and health. Its reforms are designed to assist the Government of the Republic of Zambia (GRZ) in its efforts to move beyond satisfactory overall economic growth rates. The country recorded an average growth rate of 6% over the 2006-2010 period, including 7.6% in 2010. The programme will address issues of inclusive growth through increased public sector efficiency and transparency, as well as effective access to social services. To achieve these objectives, the PRBS-IV is articulated around two components, namely: (i) Improve the efficiency and transparency of public financial management (PFM) and increase revenue mobilisation; and (ii) Enhancing access to social services. The first component consolidates and deepens the public sector governance reforms supported by the Bank's previous PRBS interventions. This is intended to make PFM more transparent and accountable. The second component focuses on providing access to key social services in the areas of health (immunization and operational grants at the district level) and water.Expected programme outcomes include more efficient use of public fiscal resources together with a sustainable increase of the revenue base, and improved access to social services for the poor, in the areas of water and health. The Bank has built knowledge and gained the trust of authorities on public finance reform which allows it to bring the best practices to Zambia. The synergy of the budget support targeted at social services with on-going operations in related areas (water projects) helps create a critical mass and reinforces the policy dialogue.