V. POVERTY ALLEVIATION STRATEGY

Mr. Speaker, Sir, Let me turn to the subject of Poverty Reduction, and the PRSP

i. Highly Indebted Poor Countries Initiative (HIPC)

59. When The Gambia reached HIPC decision point in December 2000, following an external debt sustainability analysis (DSA), the Country became eligible to seek debt relief under the HIPC initiative, and had since been receiving interim debt relief in support of its poverty reducing efforts. The Gambia was supposed to reach completion point in the context of a PRGF programme with the IMF, before it enjoys Paris Club debt relief. The Government now plans to reach HIPC Completion Point under an envisaged PRGF programme with the IMF in early 2005.

ii. Implementation of PRSP

60. The Gambia’s Poverty Reduction Strategy Paper (PRSP) was officially endorsed in April 2002, and also at the Sixth Donors’ Round Table Conference on The Gambia in September 2002, which concluded with pledges of up to US $115 million to fund the PRSP implementation for the years, 2003-2005. education.

61. Nearly two years of implementation of the PRSP have now elapsed. It is, therefore, important to review implementation so far. Some achievements have been made in the two years of PRSP implementation, especially in terms of aligning, to some degree, the national budget to poverty reducing expenditures. The establishment of the linkage between the budget and SPA II (Strategy for Poverty Alleviation II) was initiated in the 2003 budget, when the poverty related coding was applied to the line items in the budget. This poverty coding of the budget has been further developed in 2004, and also during the 2005 budget formulation process, when officials of SPACO were invited to attend the bilateral consultations to ensure that the budget allocations made are in line with the poverty reducing objectives of the PRSP.

62. Significant progress has also been made in the priority sectors of Health and Education under Pillar 3 – Improving the coverage of the basic social services, in terms of access to basic education, with specific reference to girls, and also access to basic health care, especially in the remote rural areas with high poverty incidence. It is for this reason that the constraints and bottlenecks that hindered the implementation of the PRSP should be showcased to guide key stakeholders in the implementation process.

63. PRSP implementation has also been slow over the past two years for a number of reasons. The macroeconomic instability that hit The Gambia, and reaching a peak during 2002 meant that the basic economic indicators that governed the PRSP targets suddenly became more difficult to achieve. For instance, the SPA II targets an annual real GDP growth rate of at least 6% if poverty is to be substantially reduced. In 2002, the economy recorded a negative rate of GDP growth, which improved remarkably in 2003. The PRSP, however, presumes a sustained rate of positive GDP growth, which we have not been able to achieve, especially in 2002.

64. The slow pace of government reforms, both financial and structural, has also constrained the PRSP implementation. In terms of financial reform, the bottlenecks encountered in the introduction of the Integrated Financial Management Information System (IFMIS), have further impeded the plan to link recurrent and development expenditure allocations to poverty reducing activities across the budgetary allocations made within a sector. The slippages in the financial reform has meant that persistent difficulties are being encountered in the current system when trying to identify actual PRSP-related expenditures. Government will further work on a swift implementation of IFMIS, and also on a more comprehensive classification of PRSP expenditures.

65. The problems and constraints identified as hindering the PRSP implementation are due to the dual effect of the lack of proper monitoring mechanism of the programmes in the PRSP, coupled with other difficulties encountered with the sectors.

66. Also, a significant factor in the slow PRSP implementation is the minimal donor assistance received, compared to the pledges made. Consequently, key programmes in the social sectors could not be initiated, or those programmes that were started could not be completed for lack of funds. PRSP implementation was also affected by lack of adequate institutional capacity in the civil service, stemming from the high attrition rate, and inadequacies in programme budgeting and financial management.

iii. Poverty Reducing Expenditures

67. In the 2002 and 2003 financial years, actual expenditure on poverty reduction reached D346.22milion and D296.2 million respectively. Inclusive of expenditure of HIPC funds of D36. 58 million and D73.09 million, actual total poverty reducing expenditures amounted to D382.8 million and D369.3 million respectively. Of this amount, D194.3 million (50 percent) was allocated to Education, D134.3 million (34 percent) to Health and Social Welfare, D44.3 million (11 percent) to Agriculture and D17.6 (5 percent) million to Natural Resources and Environment in the year 2002. Similarly in the year 2003, D208.6 million (45 percent) was allocated to Education, D172.9 million (37 percent) to Health and Social Welfare, D63.9 million (14 percent) to Agriculture, and D17.2 million (4 percent) to Natural Resources and Environment.

68. This spending pattern has continued in 2004 to consolidate the gains recorded over the past few years that Government has implemented the PRSP. The focus in 2005 will not be any different, but to continue augmenting poverty reducing expenditures. This is inline with Government’s resolve that the Millennium Development Goal to halve the number of Gambians living in poverty by 2015 should be achieved.

iv. Microfinance

Mr. Speaker Sir,

69. The PRSP identified microfinance as a key strategy for poverty reduction. There are currently over 140 Savings and Credit Associations (VISACAs), offering services to the poor and vulnerable groups in The Gambia. The 67 credit unions have built up a combined loan portfolio of D42.7 million, and have mobilized savings of D53.4 million. The VISACAs have mobilized savings of D10 million, and extended loans of D11 million. In addition, The Gambia Women’s Finance Association has mobilized savings of D11.4 million, and extended loans of D15.6 million in 2004.

70. A substantial number of microfinance institutions were able to meet the prudential requirements of the Central Bank during 2004, as a result of institutional and capacity building initiatives. Twenty-nine VISACAs are now fully registered, while a further 32 are provisionally registered. In the last ranking exercise in June 2004, 88% of VISACAs were rated as satisfactory. Twelve VISACAs have maintained capital at levels in excess of the minimum prudential requirement, and can be considered for upgrading to the level of Micro-savings and Credit Institutions, pending improvements in other areas where weaknesses have been identified.

71. The development of VISACAs is also affected by a number of constraints, including managerial weaknesses, restricted outreach and poor linkages with the formal financial sector. To tackle some of these constraints, the Rural Finance and Community Initiatives Project is providing support in the form of capacity building programmes and the provision of wholesale funds to microfinance institutions for on lending. The Microfinance Unit of the Social Development Fund is also supporting microfinance institutions, and has disbursed loans of D17.9 million.

v. Public Expenditure Reviews (PERs)

Mr. Speaker,

I would like to dwell a bit on Public Expenditure Reviews.

72. The essence of conducting Public Expenditure Reviews is to assess the alignment of Government expenditure pattern to sector policies, and the use of such information in the design and implementation of current and future policies and programmes. PERs are also meant to assist sectors in budget formulation, linking allocations to programmes to make them more amenable to multi-year budgeting as envisaged in the Medium Term Expenditure Framework.

73. Since the experience with the Department of State for Education, Public Expenditure Reviews have been completed in the Departments of State for Agriculture, Health, Works, Construction and Infrastructure, and the Education PERs have been updated annually for the past few years. The Departments of State for Local Government and Lands, and Tourism are currently being reviewed. Government plans to finalize these PERs during the course of 2005, and hopefully, extend PERs to all sectors of the Government.

74. While the Government has concerned itself with sectoral PERs, a World Bank Team conducted a general PER of the economy that analyses the economic reform agenda of the Government, with a view to establishing the level of performance with regards to both PRSP targets, and the Millennium Development Goals. This Public Expenditure Review raised some issues, including the need to increase the share of PRSP expenditures that are domestically financed to its PRSP target of about 35% of total expenditure; raise the share of expenditure of the social sectors by reducing expenditure on general administration; restore the balance between current expenditures and capital expenditures, and pay particular attention to a continued decline of wages and salaries in total expenditure; further integrate the recurrent budget with the development budget to ensure that recurrent cost implications of new development related projects are adequately captured, and improve upon the preparation of the development budget.

75. So far, progress in conducting Public Expenditure Reviews as well as implementing Public Expenditure Review findings have been rather slow, mainly due to inadequate capacities at sectoral levels, especially the lack of Planning Units in some sectors, or the very high attrition rate in other Planning Units. Also, some of the activities that had to be carried out to provide timely and quality data have also constrained the Public Expenditure Review process. Government is, however, committed to addressing these constraints, with a view to broadening Public Expenditure Reviews to all sectors.

vi. The Millennium Development Goals (MDGs) and The Country’s Performance

Mr Speaker, Sir,

76. The National Assembly may recall that, in September 2000, 147 Heads of States and Governments and 191 Nations, in total, convened at the United Nations in New York to examine the steps required to achieve a more equitable and rapid path to sustainable development for all the world’s people. The Conference set-out the Millennium Development Goals (MDGs) to be achieved by all countries in the year 2015.

77. The performance of The Gambia in achieving the Millennium Development Goals is uneven. Whilst we are on track for some indicators, we lag behind in others. The Education and Health indicators are largely on track, but the target for reducing poverty head count ratio is off track.

Half the Proportion of People in Extreme Poverty and Hunger

78. For The Gambia, in 1998, 59 per cent of the population were living below the poverty line. It is extremely difficult that this would be lowered to 38 per cent in 2005, and to 27 per cent in 2015. Although the 2003 Household Survey Report is not yet finalised, preliminary indications are that poverty has risen since 1998. Admittedly, The Gambia is somewhat off track in achieving this goal. For this goal to be achieved, The Gambia needs an annual reduction of 2 per cent in overall poverty, and 1.1 per cent in the proportion of food poor between 2000 and 2015. Nonetheless, The Government remains determined in the fight against poverty, and will direct appropriate policies, programmes and resources to achieving the goal of Poverty Reduction by 2015. But, Government alone cannot successfully achieve this, without substantial donor assistance to the Country.

Achieve Universal Primary Education

79. This goal seeks to ensure both male and female school children complete Basic Primary Education. The Gross Enrolment Ratio (GER) in The Gambia in 2000 stood at 60 per cent, which is slightly below the 66 per cent target. The improvement in the GER, particularly, of female children, is attributable to expansion in access to basic primary education i.e. bringing schools closer to the people, and incentive packages for girls education. Expenditure on basic education has increased by 11 per cent per annum in real terms. It is estimated that the GER would improve to a level of 78 and 100 per cent in 2005 and 2015 respectively. With the current trend, The Gambia is well on course to meeting the target of universal primary education by 2015.

Empower Women and Promote Equality between Women and Men

80. This goal tries to eliminate gender disparity in primary and secondary education, preferably by 2005, and at all levels by 2015. Although considerable progress has been made towards increasing girls’ enrolment between 1990 and 2000, the current rate of increase will not lead to gender parity in either primary and secondary education by 2015. With accelerated enrolment programme, there is great likelihood that the goal will be achieved by 2015.

Reduce under-Five Mortality by two-Thirds

81. Infant and child mortality levels in The Gambia are estimated at 85 and 135 per 1000 respectively in 1993. The infant mortality rate has significantly declined from levels estimated at 167 deaths per 1000 in 1983. The decline in under-five mortality has only been marginal. However, there are promising signs that mortality will be reduced through the current drive to expand immunisation coverage, especially through the Expanded Programme on Immunisation (EPI).

Reduce Maternal Mortality by Three-Quarters

82. The maternal mortality in The Gambia currently stands at 730 deaths per 100,000 live births. This is projected to drop to 577 in 2005 and further down to 262 in 2015. The Gambia is on track to reduce maternal mortality, consistent with the International Conference on Population and Development (ICPD) goal. Recognising the importance of reducing maternal mortality, the Department of State for Health and Social Welfare, through the Participatory Health, Population and Nutrition Project, and the National Aids Secretariat in 2004, constructed reproductive health clinics in major Health Facilities countrywide during the current fiscal year, 2004.

Reverse the Spread of Diseases, especially HIV/AIDS and Malaria

83. The prevalence rate in The Gambia for HIV-1 has almost doubled from 0.7 per cent in 1995 to 1.2 per cent in 2001. One of the main strategies used to contain and reduce the spread of HIV/AIDS infections is through the promotion of accurate knowledge of how HIV/AIDS is transmitted, and how to prevent transmission. Moreover, Malaria accounts for nearly 25 per cent of deaths in children aged 1 to 4 years. The Gambia Roll Back Malaria Initiative is currently being implemented. An innovative and cost effective technique, such as impregnated bed net, has made significant inroads in cutting down malaria cases. Despite the efforts being made by Government, substantial additional donor resources are needed in order to meet this target.

Ensure Environmental Sustainability

84. The proportion of land area covered by forest stood at 40.7 percent and 41.5 per cent in 1990 and 2000 respectively. Land area protected to maintain biological diversity is 3.7 per cent against the target of 5 per cent in 2015. Access to improved water supply has increased rapidly over the past two decades, and national coverage is estimated to be 84 per cent of the total population. This indicates that the Gambia has already reached the target ahead of schedule.

Develop a Global Partnership for Development

85. The Gambia spends over forty per cent of its annual domestic revenue on servicing its debt. Since 2000, The Gambia has been enjoying interim debt relief up to the current financial year 2004, but has not yet reached HIPC completion point in order to benefit from Paris Club Debt Relief. Under the envisaged new PRGF programme in 2005, the country is expected to reach completion point before the end of 2005. Increased International Donor support will enhance The Gambia’s ability to achieve the Millennium Development Goals. The Department of State for Finance and Economic Affairs has set-up an Aid Coordination Unit to enhance the monitoring and tracking of aid flows into the country.

-end.