Announcement of Meeting of the Consultative Group for Senegal and Donors Promise Support for Senegal's Economic Reform Program on April 1, 1987

FOR IMMEOIA TE RELEASE ,World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 87/S Contact: Akin Fatoyinbo (202) 477-3294 MEETING OF THE CONSULTTIVE GROUP FOR SENEGAL DONORS PROMISE SUPPORT FOR SENEGAL"S ECONNOMIC REFORM PROGRAM WASHINGTON, April 1 -- The second meeting of the Consultative Group for Senegal was held in Paris, on March 31 and April 1, 1987, under the chairmanship of Mr. Ismail Serageldin, Director, Country Programs Department, West Africa Region, the World Bank. The Senegalese delegation was led by Mr. Cheikh Hamidou Kane, Minister of Plan and Cooperation, and included the Minister of Economy and Finance, Mr. Mamoudou Toure, the Minister of Rural Development, Mr. Famara Sagna, and the Minister of Industry and Handicraft, Mr. Sereigne Lamine Dipo, as well as several senior Government officials. Reflecting the donor conununities strong endorsement of the programs and policies presented by the Senegalese Governemnt, the meeting was successful in receiving indications of about US$1.8 billion equivalent in support of the second phase (1987/88-1989/90) of Senegal's courageous and far reaching Medium- and Long-Term Economic and Financial Adjustment Program (PAML). The first phase of this program had been reviewed and endorsed by the first meeting of the Consultative Group in December 1984. The meeting discussed (i) Senegal's recent keconomic and financial developments and prospects, (ii) the implementation of the PAML, and (iii) Senegal's 1987/88-1989/90 Public Investment Program (PIP). Delegates noted that Senegal has made substantial progress in carrying about the PAML. They commended the Government's courageous fiscal and financial reform measures, the implementation of the new agricultural and industrial policies required to stimulate production and growth, the pursuit of the public enterprise management reform and the initiationof the process of privatization and its efforts to put in palce, for the first tiem, a three-year rolling public investment program. They expressed appreciation for the Government's total commitment to the PAML as demonstrated on numerous occasions by President Diouf himself. Donors endorsed the development strategy and the sectofal priorities of the PIP, which in their view reflected a proper balance between the longer term objectives and the immediate reuirements of the economyk. The agriculture sector will continue to be a key sector for the generation of growth, employment and foreign exchange. With the putting in place of new industrial policy reforms, Senegalese industry should improve its  - 2 - competitiveness and thus contribute to growth, including increased export earnings, and the creation of new employernnt. It was agreed that investments in the transport sector and other basic infrastructure deserved continued priority attention, with particular emphasis on rehabilitation and maintenance. Donors emphasized the crucial role of technical assistasnce both in teh areas of project implementaton and economic management, noting that the realization of the Government's growth and investment targets depended on a significant improvement in administration capacity. They also stressed that the Government needed to address more explicitly some of the longer term issues facing the country including rapid population growth and the need to find cost effective ways to improve health and education services and to rprotect the environment. The meeting reviewed the financial requirements of Senegal and agreed that sustained financial assistance, is estimated at approximately US$ 600 million per year, with particular emphassis on budgetary support, will be essential over the next few years to support the smooth completion of the on- going adjustment program and to achieve the reasonable growth objectives set by the Senegalese authorities. Focussing on the 1987/88-1989/90 period, the Senegalese representatives informed the meeting of annual financial requriements of about US$ 280 million in non-project assistance and US$ 320 million to carry out the Government's public investment program. Donor reprresentatives present at the meeting outlined their expected financial conrributions, which would substantially meet Senegal's requirements. Finally, the meeting agreed that while aid coordination in Senegal is working well, the Governernnt has established a follow-up mechanism adapted to the further efforts warranted, especially in the contedt of the upcoming sectoral meetings for health, education, transport, urbanism, hydraulics, industry and tourism. (