Burkina Faso - Public expenditure review

Report No. 11901-BUR Burkina Faso Public Expenditure Review May 26, 1993 Africa Region Sahelian Department Country Operations Division FOR OFFICIAL USE ONLY øm-of the WordBn 4, - ;. document has a restricted distribution and may be used by recipients f in the performance of their official duties. Its contents may not otherwise scbsed without World Bank authorizatlon. CFAF/S$ Year Annual Avemge End PeOd 1985 449.3 378.1 1986 346.3 322.1 1987 300.5 267.0 1988 297.9 303.0 1989 319.0 289.4 1990 272.3 256.5 1991 282.1 259.0 1992 264.7 275.4 Fiscal Ywarfor the Government of Burkina Faso January 1 - December 31 Acronyms BCEAO -Banque centrale des Etats de l'Afrique de l'Ouest (West African Central Bank) CBC -Conseil Burkinabb des chargenrs CENOU -Centre national des oenvres universitaires CFA -Communautd Financibre Africaine (African Financial Community) CGP -Caisse gdndrale de pdr6quation (price stabilization fund) EPA -Etablissement public & caractbre administratif (Administrative Public Enterprise) GDP -Gross Domestic Product GNP -Gross National Product IDA -International Development Association IMF -International Monetary Fund ODA -Official Development Assistance OECD -Organization for Economic Co-operation and Development ONAC -Office National do Commerce Extdrieur PFP -Policy Framework Paper PIP -Public Investment Program SAF -Structural Adjustment Facility SAL -Structural Adjustment Loan (Credit) SONAPHARM -Socidtd nationale do pharmacie TA -Technical Assistance TOFE -Tableau des op6rations financibres do l'Etat (rable of Consolidated Government Financial Operations) UMOA -Union Mondtaire ouest-africaine (West African Monetary Union) FOR OFFICIAL USE ONLY TABLE OF CONTENTS BURKINA FASO PUBLIC EXPENDITURE REVIEW SUMMARY AND CONCLUSIONS .................................. i POSTSCRIPT .............................................. iv INTRODUCTION ............................................ 1 I. THE MACROECONOMIC CONTEXT .......................... 2 A. National Account ................................... 2 B. Government Revenue .................................... 5 C. Public Expenditure .. .................................. 6 II. REVIEW BY SECTOR .................................... 13 A . D efense ......................................... 13 B . H ealth .......................................... 13 C. Education ........................................... 15 IHI. PROJECTIONS ......................................... 23 ANNEXES A. Observations on Burkina's TOFE .............................. 32 B. Statistical Annex . ........................................ 35 (i) Data sources (ii) ]Abil Bl. Consolidated Government financial operations, 1985-91, in billions of CFAF B2. Consolidated Government financial operations, 1985-91, as a percentage of GDP B3. Public expenditure, 1985-91, in billions of CFAF B4. Public expenditure, 1985-91, in billions of at 1985 prices B5. Expenditure by economic category in percent B6. Expenditure by major sector in billions of CFAF B7. Expenditure by major sector in billions of CFAF at 1985 prices B8. Breakdown of expenditure by major sector, average 1986-88 and 1991 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 1. This first review of public expenditure in Burkina Faso is based on the results of a mission which visited Ouagadougou in May/June 1992. This mission consisted of Ms. Olga Jonas (mission leader), Messrs. Jean-Louis Lacube (EEC, Brussels), Justin Barro (economist, AF5BU), Gerard Boulch (public sector specialist), Andrew Hamilton (consultant, wage bill), Albert Djigma (Netherlands Fund consultant, agriculture), Filiberto Sebregondi (EEC consultant, agriculture), Louis Goreux (UNDP consultant), Mohsen Thabet (IMF consultant); and Mmes. Sandrine Mesple-Somps (EEC consultant, DIAL economist), Sarah Keener (social dimensions), Ellen Goldstein (consultant, health), Laurence Telson (consultant, transfers). 2. A mission in July 1992 led by Mr. Etienne Baranshamaje (Sr. Economist, AF5PH) and including Ms. Telson and Mr. Alassane Diawara (AF5SE), examined education expenditure and presented its preliminary report to the national symposium on education at the end of August 1992 at Bobo Dioulasso. Ms. Goldstein's report on health sector expenditure was sent to the authorities in January 1993 and formed a basis for discussion of a proposed IDA health project during a mission led by Mr. Bruce Benton. The report by Messrs. Sebregondi and Djigma on agriculture sector expenditure will be discussed in the context of the Agricultural Sector Adjustment Program during the missions led by Mr. Cadman Mills. 3. The mission worked in close collaboration with the Budget Task Force in the Ministry of Finance and Planning, which consisted of Messrs. Frdddric Traord (head of the Budget Task Force, DBI), Christophe Dabir6 (DG-COOP), Paul-Marie Compaor6 (DSO), Moussa Boro (DSO), Jacques Zida (DCF), Siguian Compaord (BIP), Joseph J. M. Compaor6 (DEP), Fr6ddric Yogo Pamon (DEP), Bamory Ouattara (DBI), Pulchdrie Zongo (DBI), and with responsible officials in the DEP and DAAF of the sectoral ministries involved. The present report also takes into account written comments received in December 1992 from the Minister of State and of Finance and Planning. 4. Ms. Katherine Marshall is the Director of the Sahelian Department, Mr. Frangois Laporte the Lead Economist and Mr. Jean-Louis Sarbib the Division Chief. The preparatory work for the mission also benefited from the advice of Messrs. Lacey and Todd. I BURKINA FASO PUBLIC EXPENDITURE REVIEW SUMMARY AND CONCLUSIONS 1. The developments in public expenditure in Burkina Faso since 1985 have been linked to the profound changes that have occurred in the country's political life. Despite these upheavals, the performance of Burkina's economy over the past 10 years has been better than that of most other countries in the region. The gross domestic product (GDP), agricultural production, and exports have all increased faster than the population. The rate of growth has slackened in recent years, however; between 1986 and 1991, which are comparable years since rainfall in both was plentiful, GDP increased only 3.2% a year on average. 2. There are three reasons for this slowdown. First, agricultural production initially benefited from the development of a region with relatively high rainfall, thanks to the progress achieved in the campaign against onchocerciasis; but the additional land now being brought into cultivation is often marginal. In addition, transfers by Burkina Faso nationals working in neighboring countries - C6te d'Ivoire, in particular - have fallen off sharply since 1986; in that year they exceeded Burkina's entire merchandise export earnings, while now they amount to only half. Finally, the slowdown in growth was temporarily checked by an increase in public expenditure, but this produced an accumulated deficit that became unsustainable, leading the authorities to introduce a structural adjustment program with the support of the IMF and the World Bank at the beginning of 1991. 3. The most important public finance issue is the level of civil service salaries. After falling 2% a year between 1982 and 1985 at the beginning of the revolutionary period, the wage bill, measured at 1985 prices, increased 9% a year from 1985 to 1990. In 1990 it absorbed 70% of operating expenditure and 60% of government tax revenues. This very heavy burden on the public finances does not result from the number of civil servants but rather from their exceptionally high remuneration as compared to average per capita income. The average cost of a civil servant is 15 times per capita GDP in Burkina compared to only 10 in other UMOA (West African Monetary Union) countries and less than 5 in sub-Saharan countries outside the CFA zone. 4. The expenditure on materials and supplies shown in the budget accounts for less than 15% of total operating expenditure, but is very unevenly allocated among sectors. The ministries managing very few projects financed from external resources, such as Defense, Security and General Services, spent 20% of their total budget on materials and supplies in 1986-87. By contrast, the Ministries of Water Supply, Agriculture and Transportation, which manage the largest external project funds, spent only 0.1 % of their budget under this heading. However, they were no less well endowed in this area than the first three departments because almost all of their materials and supplies were financed from the external resources allocated to the projects they managed. Financing the bulk of operating expenditure, other than salaries, of a good part of the public administration from investment projects is not a sound practice. First, it makes it impossible to optimize the allocation of resources among sectors, since the real allocations may be considerably different from those appearing in the budget. Second, the recurrent cost burden on the Government is grossly underestimated. It is therefore necessary to transfer current expenditure now appearing in the investment budget to the operating budget. 5. The Public Investment Program (PIP) is not very useful in its present form. It includes not only a significant portion of current expenditure but also technical assistance financed by donors in the form of ii projects; yet it excludes the same kind of expenditure when presented by donors in a different form. The authorities intend to remedy this situation by establishing two separate data banks: one for expenditure contributing directly to fixed capital formation, and the other containing technical assistance expenditure. The authorities also recognize that the headings "joint interministerial expenditure" on materials and supplies and/or personnel and "non-classified expenditure" hamper planning by objectives and should be gradually eliminated. 6. It was only in 1991 that Burkina Faso prepared its first Government Financial Operations Table (Tableau des Opgrations Financieres de l'Etat - TOFE); furthermore, the field covered by the TOFE is still very limited. It should be extended to the operations of the Administrative Public Establishments and the social security and price stabilization systems. Despite the shortcomings of the statistical apparatus, it is apparent that previous trends have been reversed since the first year of the structural adjustment program. The wage bill, which had increased sharply up to 1990, fell in 1991, while capital expenditure, which had declined since 1987, began to recover in 1991, reflecting an increase in external assistance. 7. Defense, health .'id education personnel accounted in 1991 for two thirds of the wage bill and absorbed 60% of the operating budget. Consequently, these three sectors were the subject of special attention in this report. The operating budget of the Ministry of Defense was higher in 1985-87 than those of Health and Education combined, but was only 57% of theirs in 1991. 8. It is clear that accelerated development of human resources is necessary to establish conditions for higher economic growth and social development in Burkina. Although Burkina's budgetary allocations for health and education are comparable to those of other developing countries, it is nevertheless one of the worst-off countries in the world in terms of health and education indicators. The projections made in this report show that increased allocations to health and education are feasible by effecting a further reduction in defense expenditure. In addition, however, simultaneous reforms are needed within the health and education sectors (i) to increase the efficiency of use of budgetary resources, and (ii) to reduce unit costs considerably. Because education and health require significant numbers of staff in relation to the population served, the average wage of this personnel constitutes the most important constraint on the Government's ability to provide wider access to these basic services. 9. The rate of infant mortality is much higher in Burkina Faso than in most countries with a similar level of income. Not only are there insufficient medical and paramedical personnel to meet the needs of the population as a whole, but the available resources are concentrated in the urban centers which contain only 16% of the total population. In the rural areas, almost half of the primary and secondary health centers are not functioning, since they lack both qualified personnel and medicines. The share of resources going to curative care in the hospital centers is excessive in relation to that allocated to preventive care in the primary and secondary centers. In addition to a better allocation of resources to meet the needs of the population and to strengthen preventive care, one policy area is critical to improved performance of the health sector: promotion of the use of essential generic drugs. The current system penalizes the use of generic essential drugs, although the cost of brand-name medicines is prohibitive to most of the population. The SONAPHARM distribution monopoly should be abolished, and imports of generic medicines and their sale by the primary and secondary health centers should be deregulated. 10. The primary education enrollment rate in Burkina Faso is only half the average in sub-Saharan Africa, and only a quarter of the corresponding rates for Asia and Latin America. The enrollment rate in secondary education in Burkina is only one tenth of what it is in Asia and in higher education, only one twentieth. Despite a very high unit cost, the quality of education in Burkina is poor. For the primary sector this is illustrated by the results of some 5,000 tests administered in 1991 to determine the knowledge acquired by students and by a survey carried out simultaneously among 500 parents, 86 teachers and 300 iii students. In secondary education repetition rates are high. In higher education, repetition and dropout rates are particularly high in the scientific disciplines. Fifteen study-years are required for Burkina's education system to convert a baccalaureate holder into a bachelor's, although three years would suffice for students who pass their exams each year. Since costs vary directly with the number of study-years, the cost of transforming one baccalaureate holder into a bachelor's degree graduate in science is five times higher than it would be if repetition and dropout rates were negligible. 11. Although the student/teacher ratio is almost twice as high in Burkina as in Asian countries, the unit cost in terms of gross national product (GNP) per capita is three times greater in Burkina. Hence, the cost of a teacher in Burkina (also expressed in terms of GNP per capita) is six times greater than in Asian countries. In secondary and higher education the unit cost disparities are even more marked, for two reasons. First, unlike in primary education, the student/teacher ratio is not particularly high in Burkina. Second, and above all, the assistance given to students is extremely generous, particularly in higher education. At the University of Ouagadougou, the cost of this assistance per student is equivalent to eight times GNP per capita, while the average cost of a civil servant was less than five times GNP per capita in the African countries not belonging to the CFA zone. 12. In this report, the projections of the intersectoral distribution of public operating expenditure over the next 20 years point out the expenditure shifts needed for an expansion of the different levels of education. This reallocation would allow the Government to begin to close the vast education gap between Burkina and the rest of the world. First, the education sector would benefit directly from a reduction in defense expenditure. Second, a dramatic reduction in subsidies of higher-education students would provide the resources needed for higher-quality university instruction. The projections reveal, however, that no appreciable improvement in the primary education enrollment rate is possible without a considerable reduction in unit costs. 13. Certain government functions, such as the formulation of economic and monetary policies, can be carried out satisfactorily by a small number of motivated and competent officials who are competitive on the world market and can receive salaries equivalent to a high multiple of GNP per capita. But other tasks, in primary education and health, in particular, require a high ratio of personnel in relation to the population served, and, consequently, large - and growing - numbers of staff. Whether they are village teachers or medical assistants in the primary health centers, it is not possible to pay them salaries equivalent to a very high multiple of GNP per capita and at the same time provide these services to the population as a whole. Since wide access to the service provided is the basic consideration in primary education in particular, a significant reduction in the average real wage paid to teachers is necessary. Such a reduction -- and the associated increased employment of teachers -- would also be feasible in view of considerable unemployment among secondary school and university graduates. 14. The principal challenge in public expenditure management in the medium-term is to effect a sufficient reallocation to the priority sectors (primary education and health) within the constraints of the adjustment program. While early policy decisions on measures to reduce unit costs in primary education are necessary and non-development related expenditure needs to be further reduced, a fully satisfactory implementation of the recommendations in this public expenditure review is only possible through institutional development. To this end, a strengthening of the capacity to budget and to monitor the execution of budgets in the ministries responsible for primary education and health needs to be implemented as a priority under the recently-launched Public Institutional Development program. The parallel reforms in civil service management are also critical. As a pre-condition to a full public expenditure review in other sectors, the public investment program should be fully integrated into the Government's budget, yield information that is susceptible to analysis, and be better monitored. iv POSTSCRIPT This report contains a discussion of public finance performance and an analysis of expenditure patterns only through the end of 1991. This is the last year for which detailed expenditure data are available. In 1992, which was a year of intense political activity, the democratization process resulted in some slippage of the adjustment program and of public finance management. From mid-1992 onward, the Government tried to offset at least some of the slippage that had occurred during the first half of the year. Thus, in a revised budget, it sharply cut wages relative to the draft budget. It also stepped up tax revenue collection. However, weak economic activity, aggravated by a further drop in the world market price of cotton, undercut the effect of these measures. Tax revenue performance is estimated to have dropped to 12.5% of GDP, compared to 14.0% of GDP attained in 1991, largely because of lagging import duty collections. A considerable part of the intended reduction in domestic and external payments arrears had to be postponed to 1993, and the overall fiscal deficit widened. At the same time, monitoring of both revenue and expenditure worsened. At the end of 1992, agreement was reached with the IMF and the World Bank on measures needed to improve the public finance situation. This program, reflected in the Government's second Policy Framework Paper, 1993-95, is fully in line with the projections used in the present report. BURKINA FASO PUBLIC EXPENDITURE REVIEW INTRODUCTION 1. The fluctuations in public expenditure in Burkina Faso have been linked to the major changes that have occurred in the country's political life. Burkina has moved from a military regime, under which one- third of operating expenditure went to the Ministry of Defense between 1985 and 1987, to a constitutional regime with democratic institutions in 1992. This transition greatly modified the role of the government: some of its former tasks, such as price controls, have virtually disappeared, while new ones have emerged, such as the establishment of a coherent legal framework for conducting business in a market economy. The periodic preparation of a rigid five-year investment plan has been replaced by the continuous development of a three-year rolling public investment program. To perform its new mission, the administrative system has to be restructured; this process is under way, with the support of donors, but is still in its early stages. 2. Despite the political upheavals, over the last decade Burkina's economy performed better than most others in the region. The gross domestic product (GDP), agricultural production and exports, measured in constant prices, increased faster than the population. However, the rate of growth of GDP has declined slightly in recent years, for three main reasons: (i) The increase in agricultural production was essentially the result of an expansion in the cultivated area which has slowed down in recent years. The progress made some 10 years ago in the fight against onchocerciasis made it possible to develop a subregion with relatively high rainfall. Once this new land was brought into production, any expansion of the cultivated area has depended on developing land that is often marginal, which in some cases has contributed to environmental degradation. Any increase in agricultural production must now basically be the result of higher yields, which requires a sustained improvement in crop practices. (ii) Transfers by Burkina Faso nationals working in neighboring countries, especially C6te d'Ivoire, increased rapidly through 1986, to the point where, at CFAF 66 billion, they represented 128% of all merchandise export earnings in that year. The economic crisis that subsequently hit COte d'Ivoire reduced these transfers to CFAF 45 billion in 1990, or only 54% of merchandise export earnings. Since 1990, the situation has deteriorated further, and no significant improvement can be expected for several years. (iii) The decline in the GDP growth rate was partially checked for a time by an increase in public expenditure, but this led to a cumulative deficit that threatened to stifle all economic activity. 3. In late 1990 the authorities have finalized their first Policy Framework Paper, 1991-93, outlining a three-year structural adjustment program which gained the support from the IMF, the World Bank, the European Community, and the African Development Bank as well as from France, Germany, Japan, the Netherlands, and Canada. In addition to restoring a sustainable public finance position and establishing a stable macroeconomic framework, the adjustment program has three broad objectives: (i) to restructure public expenditure in order to deal more effectively with human resource development and increase the efficiency of public investments by concentrating on projects that are economically viable and support private sector investment and production; (ii) to promote private sector activities through a substantial liberalization of internal trade, reforms of the investment and labor codes, streamlining of import and 2 export procedures, adoption of a simplified import tariff schedule, implementation of a tax reform, public enterprise divestiture, and banking sector privatization and restructuring; and (iii) to effect reforms in support of private sector growth and to improve the efficiency of public resource use in the agriculture and transport sectors. Because of Burkina's membership in the West African Monetary Union (UMOA), which maintains a fixed parity vis-d-vis the French franc, restoration of competitiveness of domestic production is being pursued through "internal adjustment", implying a need to contain domestic demand and to implement direct cost-reduction measures. 4. This report is divided into three parts. The first part sets out the macroeconomic context and the main developments between 1985 and 1991. The second part discusses the three sectors that absorb 60% of operating expenditure: defense, health, and education. The third part looks to the future and identifies, in particular, the key constraints to an expansion of priority services in education and health. I. THE MACROECONOMIC CONTEXT, 1985-91 5. This section aims to outline the progress of the real economy by referring to changes in the principal aggregates of the national accounts measured at 1985 prices.' This will be followed by a discussion of government receipts and then an analysis of the allocation of public expenditure. A. Nationd Accounts - Domestic Resources 6. In a country in which nearly 90% of the population Peal growth rate lives in rural areas, any increase in GDP essentially depends on the progress of agricultural production, which itself is strongly influenced by rainfall conditions. A 10% decline in agricultural production is generally reflected in a 3% fall in GDP (Figure 1). The - average rate of growth of -4 GDP between 1985 (a bad agricultural year) and 1991 (a good year) is 4.4% per -I=' annum, but it is only 3.2% if 1986 (a good year) is used as + wfuy the base instead of 1985. The latter figure is more Figure 1 representative than the former, since it compares two good years for agriculture. Values at current prices were divided by the GDP deflator taking 1985 as the base year. This index was used to calculate the values at constant prices appearing in this study. 3 7. The secondary sector lacks dynamism: it contributes less than 18% of GDP calculated at factor cost. After increasing by 19% between 1985 and 1987, value added by the sector rose only 5% between 1987 and 1991. The initial increase was mainly due to growth in textiles, construction and public works, and gold production. However, gold exports, which almost tripled between 1985 and 1988, fell sharply in 1989 as a result of technical problems encountered in gold mining operations. The textile industry also ran into difficulty and, once the major ongoing projects were completed, the construction and public works sectors could not maintain activity at their previous level. The small size of the domestic market and lack of competitiveness vis-I-vis the outside world are the basic problems of Burkina's industry. 8. The tertiary sector accounts for around 45% of GDP. It consists of three sub-sectors each making a more or less equal contribution to GDP (public administration, the private formal tertiary sector, and the informal sector). As value added by the public administration is calculated at factor cost, an increase in government expenditure is reflected in GDP, which has a spillover effect on the rest of the economy to the extent that the increase in public expenditure does not hurt the private sector. The private formal tertiary sector and the informal sector are dominated by commerce, with the level of activity largely determined by what is going on in the rest of the economy, and particularly by changes in agricultural production. - Structure of Deman 9. Despite the shortcomings of national accounts statistics, certain trends in aggregate demand can be identified. Changes in the overall pattern of public expenditure can be detected from the TOFE.1 But a significant part of the capital expenditure shown in the TOFE is in fact for goods and Net external assistance services, and should therefore be reclassified as 2M - consumption expenditure. After this adjustment, consumption by the public administration would . currently be equivalent to around 17% of GDP. 4 - This consumption increased more rapidly than that of households M between 1985 and 1990, and total consumption fluctuated around 100% of . GDP.' 4ee1 on 4ee7 loss 19 en Selo tmrtsnAu ODA I TA M TA 10. Given the low level of domestic savings, Figure 2 2 See Annex A. * In 1991, during the first year of the adjustment program, total consumption fell to 96% of GDP. 4 investment has basically been financed from transfers by Burkina nationals working abroad and from net flows of external assistance. Most of the latter takes the form of official development assistance (ODA), of which more than a third was allocated to technical assistance.' The sum of wage remittances and net assistance (excluding technical assistance) was more than 20% of GDP in 1986, but it declined continuously between 1986 and 1990, to only 14% of GDP (Figure 2). This led to a decline in fixed capital formation which was only halted in 1991. External assistance, public savings 12% 111% - c 4% 2% 7% 1% * -2% 1995 1995 1997 1998 1999 1990 1991 remittances ODA less TA M public savings Figure 3 11. Public investment expenditure included in the TOFE fell from about 11% of GDP in 1986 and 1987 to less than 6% in 1990. This decline reflects the concomitant declines of net external assistance" and of public savings (Figure 3). For the reasons already referred to, fixed capital formation is greatly overestimated in the TOFE. 4 OECD definition; see Table B. 2 in Annet B. s Net ODA less technical assistance constitutes the bulk of the external fnancing of central government investment included in the TOFE. However, ODA also helps tofinance investment by public enterprises and imports of merchandise grants which do not appear in the TOFE. 5 B. Government Revenue 12. Between 1985 and 1989 central government revenue fluctuated around 11.5% of GDP. This percentage is very low because a number of compulsory levies were not paid to the central government and therefore did not appear in the TOFE. For example, in 1988 the General Price Stabilization Fund (Caisse G6ndrale de Pdrdquation - CGP) took in an amount equivalent to 1.5% of GDP from "profits" on the sales of petroleum products, although it engaged in no commercial transactions involving these products. During the first year of the adjustment program, the CGP made an unrequited payment of CFAF 11 billion to the government; in addition, the schedule for petroleum product levies was altered, leading to the payment to the Treasury of almost half of the amounts formerly received by the CGP. These two measures were reflected in an increase in government revenue equivalent to 2% of GDP in 1991, explaining much of the improvement in fiscal performance during the first year of the adjustment program; government revenue rose from 11.5% of GDP in 1989 to 13.9% in 1991. If other compulsory charges currently paid to public enterprises, such as the Conse,l Burkinabd des Chargeurs (CBC) and the National Foreign Trade Office (Office National de Commerce Extdrieur - ONAC) were transferred to the Treasury, the ratio of fiscal receipts to GDP would be close to the norm for the other countries in the region, without any change in the actual tax burden. 13. During the period from 1986 to 1989 receipts from income taxes and taxes on goods and services each contributed around 20% of total revenue. Revenues from taxes on international trade (of which 95% derived from import taxes) accounted for around 45% of total revenue, and a substantial part of the remainder came from levies on petroleum products. The Government has taken steps to improve the tax yield, but, apart from the accounting changes referred to above, the progress made so far is limited. It should, however, be recognized that Burkina has avoided a decline in its tax revenue/GDP ratio, unlike most of the countries in the region. 14. Since taxes on imported goods constitute the main source of its revenue, the government has taken a series of measures to strengthen the fight against fraud. Customs statistics are in the process of being computerized via the introduction of the Sydonia system; customs duty exemptions have been sharply curtailed and prohibitive tariffs have been slashed in order to reduce the incentives for fraud; a system of prior verification of the prices, quantities, and quality of imported goods was introduced in January 1993. As regards taxes on goods and services, the authorities have decided to introduce a value added tax. 15. Half of the income tax revenue comes from withholding at source on the wages of civil servants and formal sector employees. Efforts must therefore also be made in relation to the other half of these receipts, for which collections are only half of assessments and the "balance for collection" in 1990 was equivalent to almost three years of assessments. The quality of assessments must be improved by focusing on Ouagadougou and Bobo Dioulasso, where the collection potential is highest; in each of these centers priority efforts should be directed at the approximately 1,500 corporations that account for almost 90% of assessments for the profit tax. Coordination between the departments responsible for assessments and collection should be strengthened, particularly between the Directorate General of Taxation (DGI) and the Directorate of Public Accounting (DCP). 6 C. Public Eenditur 16. The interest cost of the public debt is relatively small; interest due has fluctuated between 1.1 % and 1.4% of GDP over the last six years. Capital expenditure, which is basically financed from external resources, has varied markedly: after increasing 91 % between 1985 and 1987, it fell 43% between 1987 and 1990, but then Structure of expenditures regained its 1987 level in 1991 (Figure 4). Operating expenditure increased very rapidly in the five years after - 1985, rising from 8% of GDP in that year to almost 14% in 1990. It then declined to 10% of GDP "* in 1991 for two reasonm: first, I expenditure was reduced as a result of implementation of the adjustment program, and second, GDP was particularly high in 2 1991 as a result of favorable O. rainfall conditions. 17. Operating expenditure can be broken down into three Figure 4 categories: salaries, goods and services, and transfers." Since the last two categories have been almost stable as a percentage of Structure of operating expenditures GDP over the period 1985-91, changes in the share of operating expenditure in GDP reflect changes in the share of salaries (Figure 5). - The Wagrill 18. The wage bill measured I at 1985 prices increased 4.5% a 3S year on average between 1975 a and 1990, but the rate of growth is was far from uniform during this a period (Figure 6). It rose from - 2% annually during the leim RMMt&&m"- fM revolutionary period (1982-85) to over 9% per annum from Figure 5 ' The operating expenditures that could not be allocated to one or another of these three categories appear in the item 'Non-allocated.' 7 1985 to 1990 when most of those who had been fired during the revolutionary period were reintegrated into the civil service. This growth rate should have had to become negative again from 1990 to 1993 if the initial objectives of the adjustment program were to be achieved. Real wage bill and nLcber of staff 54 52 40 49 * 46 * 0 0 3 44a 42 40 3a 39 32 30 28 26 24 22 U 20 I I I I I I I I I I I I 75 76 77 78 79 90 91 92 93 94 95 86 97 8 99 90 91 0 nurber C000) + wage bt II Figure 6 19. The growth of the wage bill has outstripped that of GDP over the last 15 years. Specifically, its share of GDP increased from 6.1% in 1985 to 8.2% in 1990. The share of the wage bill in operating expenditure, which had remained around 65% between 1975 and 1982, reached 73% in 1989. The prominence of wages in the budget and the domestic product is not due to a proliferation of civil servants, but to their exceptionally high remuneration as compared to average national income. The ratio of average civil service remuneration to GDP per capita is higher in Burkina than in the other UMOA countries (15, compared to an average of 10), while this ratio is less than 5 in the African countries outside the CFA zone.' 20. When many African countries became independent 30 years ago, civil service remuneration was established at a high multiple of income per capita, because it was influenced by the salary structure that had prevailed under the colonial regimes. However, most of the African countries outside the CFA zone have experienced high inflation which has not been offset by a proportional increase in nominal wages; 7 See, for erample, "Burkina Faso: Economic Memorandum,' report No. 7594-BUR, December 1989, Volume II, Table 7.3. 8 consequently the level of real wages has steadily declined. In addition, a number of countries in the region have, in the late 1980s, effected substantial real exchange rate depreciation, producing a further reduction in real wages. In the CFA zone countries, however, the rate of inflation has been more or less limited to that prevailing in France, and the labor unions have worked to avoid any decline in real civil service remuneration. In the case of Burkina Faso, the real salaries of civil servants do not seem to have declined over the past 10 years. 21. The fact that inflation has been much lower in the CFA countries than in other countries explains why civil service remuneration is much higher in the former group than in the latter, while the mobility of labor between Burkina Faso and CMte d'Ivoire seems to explain why the ratio between salaries and GDP per capita is higher in Burkina than in the other CFA countries. As GDP per capita was four to five times higher in Cte d'Ivoire than in Burkina around 1980, salaries in absolute terms were much higher in C8te d'Ivoire, even if they were relatively lower in terms of GDP per capita. To encourage replacement of French teachers by Ivoirians, the CMte d'Ivoire Government offered particularly generous terms to Ivorian teachers, who were paid more than teachers in Spain.! Since CMte d'Ivoire sought to provide attractive opportunities for teachers from Burkina Faso, the negotiating position of the Burkina teachers' union was strengthened by the level of salaries in C6te d'Ivoire. There was probably also a chain reaction linking salaries of teachers in France to those in C8te d'Ivoire and then to salaries of teachers in Burkina, and hence of the entire civil service in Burkina. 22. The civil servants' remuneration consists of a basic salary plus allowances which amount to 20% of this salary on average. Salaries and allowances are calculated from a grid constructed on the basis of the grade to which the employee belongs and the step attained in this grade. Advancement from one step to the next is virtually automatic and lower-level staff (grades D and E) can be promoted into the professional grades relatively easily by passing an Age distrIbution, 1991 internal examination. In addition, the number of professionals (categories A, B and C) exceeds the number of support-level staff by about 80%, leading, over time to an increase in 2 the average salary. The civil servants g are relatively young; the average age .. is under 33-34, and almost two-thirds 0.. of them are aged between 21 and 40 (Figure 7). Employees with more - than 20 years of service account for , - less than 10% of total staff, while 0.- those with less than 10 years of ",ill?\/' 414 4 service account for almost two thirds. Figure 7 * Compared to the salaries of teachers in Spain, the median salaries of Ivorian teachers were 38 % higher for tenured teachers; 32 % and 13 % higher, respectively, for teachers in the first and second cycles of secondary education; and 17%, 21 % and 16% higher, respectively, for assistant professors, associate professors and full professors in higher education. World Bank, 1990, *Public Expenditure Review,' Report 8748-IVC, p. 43, Table 4.4. 9 23. Given the age and grade structure of the staff, the effect of the advancement system is to increase the average salary by about 5% a year, which is higher than the growth rate of national income per capita. The larger portion of the annual 5% increase was due to the almost automatic advance from one step to the next. The remainder reflected an increase in the proportion of employees in the higher grades as compared to those in lower grades, due in particular to the higher percentage of university graduates among the newer recruits. To reduce the budget deficit the Government decided to cut the housing allowance in half in 1991 and to postpone payment of step increases in 1991 and again in 1992. The resulting savings in 1991 were around CFAF 3 billion from the elimination of the state's contribution to the housing fund and almost 2 billion from the suspension of the financial consequences of step increases;9 since the additional expenditure due to an increase in the number of staff was around CFAF 1 billion, the wage bill in 1991 was CFAF 4 billion lower than in 1990. Resuming the payment of step increases in 1993 would have increased the budget deficit"o by some CFAF 5 billion if no provision was made for retroactive payments for the two previous years, and about twice that amount if such provision were made. These increases would not have been be compatible with the adjustment program constraints. The Government is planning to introduce a new system of remuneration and advancement in the context of a restructuring of the civil service as a whole. STRUCTURE OF PERSONNEL EXPENDITURE 40X 35% - 25% - 0 * 1985 1986 1987 1988 1989 1990 1991 iEALTH EDUCATION DEFENCE Figure 8 ' Employees moving from one step to another did not receive any salary increase, but it seems that those promoted to a higher grade did receive an increase. o Salary costs less income taxes withheld at the source. 10 24. The Ministry of Defense accounted for 37% of the wage bill in 1986, when Burkina Faso was in conflict with Mali; this proportion steadily declined to 28%L in 1991 (Figure 8). During the same period the share of primary education rose from 13% to 18%, while the share of secondary and higher education was unchanged, as was that of health. The total wage bill shares of agriculture and transportation and of general services increased by 1.5% and 1.7% respectively. - Materials. Supplies and Transfers 25. Expenditure on materials and supplies and transfers accounts for about 30% of all operating expenditure. The share of transfers was slightly higher than that of materials and supplies in the last three years (1989-91), having been about half of that for materials and supplies in the three previous years (1986-88). Year on year variations should be interpreted very cautiously, given the existence of non- classified expenditure; the latter was low for four out of the six years for which statistics are available, but reached 16% of total operating expenditure in 1990. - Capital Expenditure and Technical Assistance 26. The portion of the Public Investment Program (PIP) incorporated in the TOFE is based on data from the Integrated Project Bank (BIP) covering all projects financed from domestic and external resources. When the UNDP finances an expert to prepare a report or to assist the staff of a ministry, this assistance is presented in the form of a project which, as such, is included in the BIP and is therefore a part of the PIP. However, if the same expert were financed through a bilateral assistance program to perform the same tasks in the same department, these services would generally not be presented as a project; consequently, they would not go into the BIP and would not appear in the PIP. To avoid such inconsistencies, the Government has decided to establish two separate data banks: the first would include projects contributing directly to fixed capital formation and would assist preparation of the new PIP, while the second will cover all technical assistance programs not directly linked to physical investments. This latter data bank will provide useful information for enhancing the effectiveness of technical assistance, which seems rather low. The task is clearly important, since technical assistance accounted for 36% of the ODA received by Burkina Faso between 1985 and 1990.11 27. Another source of confusion in interpreting the PIP is the distinction between capital and operating expenditure. A study of some 50 projects managed by the Ministry of Agriculture suggests that only half of the expenditure involved was going to fixed capital formation. The bulk of the materials and supplies used by the ministry staff - fuel, especially - was being financed from project budgets. This practice was generally encouraged by donors, who wanted to ensure smooth operation of their projects rather than depend on unpredictable budgetary allocations. 28. The three ministries managing large investment programs financed from external resources (Water, Agriculture and Transport) have benefited considerably from this practice. Over the last three years, expenditure on materials and supplies by these three ministries was only 0.5% of their salary costs and less than 0.1 % of their capital expenditure. The conclusion must be not that these three ministries lacked even the most basic materials and supplies, but that almost all of their non-personnel operating expenditure was financed from project budgets. " OECD statistics. 11 29. The ministries not managing projects STRUCTURE OF EXPENDITURE financed from foreign AVEIIA low 07 resources, or managing very few of them, were obliged to allocate a much larger portion of their budget to materials and supplies. In 1986-87 the 7 Ministries of Defense, o Security and General Services allocated 20% of their operating budgets to materials and supplies, while the corresponding figure for the social ministries (Education,IG SOCIAL SECTORS IV% SCTORS Health, Leisure and Culture) was 6% and for the three ministries managing the largest Figure 9 external resources (Water, Agriculture, Transport) STRUCTURE OF EXPENDITURE only 0.1% (Figure 9). The contrast was hardly less marked in 1991 (Figure 10). 30. Financing the bulk- of operating expenditure, other than salaries, of a good part of the public administration from investment projects is not a sound practice. First, it makes it impossible to optimize the allocation of resources among sectors, since the real allocations WSALMRIEn MMT&SUPOPLIES M CU. TRANSF. [ 1IEST. may be considerably ______________________________ different from those Figure 10 appearing in the budget. Second, recurrent costs are grossly underestimated and existing infrastructure can only be maintained through an exponential increase in new "investment". Donors are aware of the scale of the problem in the transport sector, and consequently the recently-launched Transport Sector Adjustment Program stipulates that two-thirds of total expenditure over the next five years will be allocated to the maintenance of existing infrastructure. 12 31. In sum, the authorities do not currently have a reliable statistical basis for formulating economic and financial policies. To remedy this situation the following measures should be implemented: (i) the PIP should include all capital expenditure by the Government and public enterprises, so as to improve public investment discipline (thereby ruling out any "projects outside the PIP"); (ii) the PIP should be limited to expenditure that contributes directly to fixed capital formation and to the technical assistance expenditure required for constituting this capital; (iii) current expenditure appearing in the PIP should be transferred to the operating budget; (iv) all technical assistance expenditure other than that directly linked to fixed capital formation should be brought together under a special heading; (v) the items "joint interministerial expenditure" and "non-classified expenditure" should be eliminated through the use of appropriate allocation criteria, and the number of special Treasury accounts should be considerably reduced; (vi) the coverage of the TOFE should be expanded by including the administrative public enterprises (Etablissements Publiques Administratifs - EPA) and the social security and price stabilization systems; (vii) the procedures for identifying external arrears and, in particular, domestic arrears should be considerably improved; (viii) the time-lag in the production of financial statistics should be reduced and a TOFE for the current year and the three following years should be prepared each quarter. 32. It is not surprising that the TOFE is not yet a fully satisfactory tool, since Burkina's first TOFE was prepared only in 1991. Following a meeting of the Council of Ministers of the UMOA held on February 28 and 29, 1992 at Cotonou, "it was recommended that an instrument be introduced for the consistent analysis of public finances on a uniform basis for all the countries in the zone, to permit preparation of common and converging economic and financial policies based on comparable indicators such as the overall government deficit and savings, for all the countries of the UMOA."12 An IMF mission visited the various countries of the UMOA to present its recommendations on harmonizing public finance statistics. The observations of this mission on Burkina's TOFE are presented in Annex A. ' IMF, 'Proposals for Harnonization of Public Finance Statistics in the UMOA,' July, 1992. [Unoffcial translation - no English version of this document has yet been produced.] 13 II. REVIEW BY SECTOR 33. This section deals with defense, health, and education. These three sectors together accounted in 1991 for two-thirds of the wage bill and absorbed 60% of the operating budget. The share of defense in the operating budget was larger than health and education together in 1985-87, but it has declined sharply and should fall even further, while the shares of health and education, the two priority social sectors, should increase. A. Dfense 34. Under the military regime, Defense was the most important ministry, receiving almost 30% of the operating budget. This ministry was not only responsible for national defense but also performed certain tasks that are normally the responsibility of the civil ministries. Thus, it was in charge of the People's National Service (Service National Populaire - SNP) and in this capacity supervised several hundred SNP instructors who were teaching in primary schools. The ministry made some of its surgeons available to non-military hospitals and sometimes provided transportation services to other government departments. 35. Now that a constitutional government has replaced the military regime, the Burkina authorities have begun to consider what functions should be performed by the Ministry of Defense. Savings could also be made if Ministry of Defense expenditure were subject to normal commitment and control procedures. As a reduction of the size of the army has started in 1990, some of the demobilized personnel has already been incorporated into the police force; the reinsertion of others into civilian occupations could be facilitated by a system of demobilization bonuses. This initial expenditure would be justified by significant longer-term savings, and it could also be financed from external sources. Reinsertion problems ought not to be insurmountable given that the number of officers is relatively low in relation to the number of other ranks. B. HealL 36. Personnel expenditure of the Ministry of Health and Social Action (Ministere de la Santd et de l'Action Sociale - MSAS) has remained at around 11% of the total wage bill over the past five years. As expenditure on materials and supplies and on transfers rose more rapidly than personnel expenditure, the share of health in total operating expenditure increased to around 11 % in 1991. External assistance has fluctuated considerably from one year to another; according to the available statistics it more than tripled from 1990 to 1991. Taking an average of these two years, 42% of external resources went to investment (equipment, construction and rehabilitation); 35% to technical assistance, training and studies; 20% to non-personnel operating expenditure (including 5% for drugs and medical supplies); and 3% to personnel. In 1991 health expenditure accounted for 10% of all public expenditure financed from domestic and external resources. 37. On the basis of these data, Burkina spends more of its budget on health than most other sub- Saharan countries, and far more than the average low-income Asian country. Unfortunately, Burkina seems to be one of the worst-off countries in the world in terms of health if its position is assessed using the traditional indicators (life expectancy, infant mortality, vaccination, etc.).3 " The rate of infant mortality was 135 per thousand live births in Burkina in 1990, compared to a weighted average of 69 per thousand for the 42 lowest-income countries, including China and India, and 92 per thousand excluding these two countries. Per capita income in Burkina 14 38. There are three main reasons for the inefficiency of the system. First, the personnel managed by the MSAS is not distributed across the country according to the population's needs. Almost half of medical personnel is concentrated in the two urban provinces which have only 16% of the total population. These two provinces contain two-thirds of the midwives, 60% of the doctors and 40% of the nurses in the country. Second, in rural zones, in particular, a significant number (almost half) of the primary and secondary health centers are not operational because they lack both qualified personnel and medicines. Third, the share of resources allocated to curative care in the hospitals is excessive in relation to that earmarked for preventive care in the primary and secondary centers. 39. The solution recommended by the Second Five-Year Plan is to double the number of Health and Social Promotion Centers (Centres de Santd et de Promotion Sociale - CSPS) at the village-group level and to increase tenfold the number of Improved Medical Centers (Centres Mddicaux Amdliords - CMA) at the district level. But the Government has neither the financial nor the human resources to implement such an ambitious program. 40. A realistic program could be limited to the following objectives: (i) in rural areas, a certain number of existing dispensaries would be improved and converted into CSPS, while the existing CSPS would be rehabilitated to make them fully operational; (ii) in urban areas, the existing medical centers (Centres Mdicaux - CM) would be upgraded to become CMA and some CSPS would be created to alleviate overcrowding of the hospital centers; (iii) better health coverage in rural areas would be partially achieved by a geographical redistribution of health personnel. Nonetheless, neither the construction of new centers nor the upgrading of existing ones will solve the problem if medicines are not available. Here two measures are essential: first, abolishing SONAPHARM's distribution monopoly and liberalizing imports of generic medicines, and second, allowing primary and secondary centers to charge modest fees for the care provided, sell medicines to patients at cost, and use these receipts to replenish their stocks of medicines. 41. The current system encourages the importing of brand-name items providing a high unit profit to the various agents involved in their distribution, but on average these items cost more than five times as much as generic medicines. According to the results of a pilot survey carried out in Boulgou province, three-quarters of the medicines prescribed were brand name items whose average cost was CFAF 1,500 per prescription, or the equivalent of a week's income for the average wage earner." Clearly, this is far beyond the means of the rural population. Nor can prescription expenses be met from the state budget or the Sickness Fund; payments by the hospital centers to this fund fell to CFAF 40 million in 1991, which would finance one prescription costing CFAF 1,500 for 1 Burkina citizen in 30 every 10 years. For the great majority of the population the choice generally comes down to purchased generic medicines or no medicines at all. Faso, however, was at the median level for the group since it is in the 20th position among the 42 countries for which this indicator is shown in Table 28 of the "World Development Report, 1992. f " Evaluation report of the study on cost-recovery for of health services in the Garango health zone. Meeus, Wilma and others, USAID, June 1991. 15 C. Education 42. The shares of education in the wage bill and in total operating expenditure are almost the same; both rose from 21% in 1986 to over 26% in 1991. This considerable increase essentially benefited primary education, whose operating expenditure increased from 0.83% of GDP in 1986 to 1.29% in 1991. Donor assistance has increased sharply in recent years. Adding domestic and external financing together, the share of total public expenditure going to education rose from 11 % in 1986 to more than 17% in 1991. As an average of the years 1990 and 1991, this expenditure was equivalent to 3.5% of GDP. Hence Burkina is now allocating to education a share of its budget and GDP that is comparable to that of other developing countries, but it nevertheless belongs to the group of countries with the lowest education attainment in the world. This apparent paradox is due to a very high level of unit costs, which in secondary education and particularly in primary education basically reflect the relationship between teacher remuneration and GDP per capita. 43. This section will begin with a comparative study of enrollment rates, which are the simplest and therefore currently the most widely used method of assessing the level of education. The internal efficiency of each cycle will be examined, since the effect of repetitions and dropouts is to raise the number of study-years, and therefore the enrollment rate, without any increase in the number of graduates. An attempt will then be made to consider the quality of the knowledge acquired by the graduate, since education must be regarded as a means of acquiring knowledge that contributes to the development both of the individual and of the national economy. Finally, the education system as a whole will be discussed. - Enrollment Rates and Unit Costs 44. Reference will be made here to three studies carried out, respectively, by Zymelman for 33 sub- Saharan countries, Jee-Peng Tan and Alain Mingat for 10 Asian countries, and UNESCO for the main regions of the world. The results of these studies are not strictly comparable, since the definitions and methods of calculation used by the various authors are not identical; but they provide sufficiently accurate orders of magnitude for our purpose." According to these sources, the share of GNP" allocated to education in Burkina Faso was the same as the average for Africa (3.7%); this was somewhat higher than the average for Latin America, which in turn was slightly higher than the average in Asia (3%). Thus, Burkina's expenditure on education is comparable to that of other developing countries, but its enrollment " Zymelman takes unit operating costs in public schools and applies them to private schools to calculate the total cost in relation to GNP. Tan and Mingat include capital expenditure but exclude the portion of the cost of private schools that is not covered by a government subsidy. To the extent that these two components offset each other, the difference between the costs of education in fica and in Asia is equal to 0.7% of GNP. The UNESCO study of the cost of education worldwide in 1985 put this dfference at I % of GNP. According to this study, public expenditure on education was 3.1% of GNP in Asia, 3.5% in Latin America and 4.1% in Africa. In the sample of countries used by UNESCO, average GNP per capita in the Latin American countries was 140% higher than in the Asian countries, which themselves were 13% ahead of the African countries. While fiscal performance is generally measured in terms of GDP, teacher remuneration and the cost of education are generally related to GNP. In the case of Burkina Faso GNP and GDP differ by less than 1 %; therefore the ratio is not affected by the choice of denominator. 16 rates are far below the averages recorded for Africa, Asia and Latin America. While spending a smaller proportion of GNP on education than Burkina Faso, the Asian countries achieved enrollment rates 3.8 times higher for primary education, 10.5 times higher for secondary education and 19 times higher for higher education (Table 1). Table 1: Comparative Costs of Education in Burkina Faso and the Rest of the World Total Cost Unit Cost Demographic Enrollment Rate Weight (1) (2) (3) (4) in percent of: in percent GNP GNP per capita Burkina Faso' 1987 3.74 Primary 1.30 29.2 17.8 25.0 Secondary 1.36 202.1 16.8 4.01 Higher 0.87 1670.9 9.9 0.52 Others 0.21 Affia' 1987 3.69 Primary 1.74 16.3 18.9 56.4 Secondary 1.11 47.0 16.1 14.6 Higher 0.57 546.8 10.3 1.0 Others 0.27 Asia2 1985 3.0 Primary 1.4 9.9 94.0 Secondary 0.9 18.5 42.0 Higher 0.6 148.9 10.1 Others 0.1 Latin America' 1985 3.5 Primary 101.8 Secondary 48.5 Higher 16.5 Industrialized countrice 1985 5.17 Primary 102.7 Secondary 85.9 Higher 29.6 (1) = (2) * 0.01 (3) * 0.01 (4) = total cost as a percentage of GNP. (2) Cost of education per student-year as a percentage of GNP per capita. (3) School-age population as a percentage of total population. (4) Number of students as a percentage of the school-age population. Sources. I./ M. Zymelman, "Patterns of Educational Expenditures in Sub-Saharan Africa," internal document, World Bank, 1989. The 33 African countries are: Benin, CAR, Cameroon, Guinea, RCI, Togo, Ethiopia, Mauritius, Sudan, Uganda, Burundi, Djibouti, Madagascar, Rwanda, Zaire, Ghana, Guinea-Bissau, Burkina, Cape Verde, Chad, Gambia, Mali, Mauritania, Niger, Senegal, Botswana, Lesotho, Malawi, Swaziland, Tanzania, Zambia, Zimbabwe. /i Jee-Peng Tan and Alain Mingat, "Education in Asia; a comparative study of cost and financing," World Bank, 1992. The 10 countries are: Bangladesh, China, India, Indonesia, Malaysia, Korea, Nepal, Philippines, Sri Lanka and Thailand. 2/ UNESCO, 1987. 17 45. The cost of education measured as a percentage of GNP (column 1) is the product of three components: the cost of a student-year expressed as a percentage of GNP per capita (column 2); the school-age population as a percentage of total population (column 3); and the enrollment rate (column 4).17 Burkina's school-age population as a proportion of total population (column 3) is almost the same as the average for the African countries, but is somewhat higher than the average for Asia." If the demographic weights (column 3) and the costs as a proportion of GNP (column 1) were the same, the enrollment rate (column 4) and unit costs (column 2) would be inversely proportional. The problem in Burkina is the abnormally high level of unit costs, which are 3 times as high as in Asian countries for primary education and 11 as times as high for secondary and higher education. 46. Burkina's unit-cost disadvantage is aggravated by its economic and demographic dynamics. In the Asian countries, real GNP is increasing 5% a year while the school-age population is only growing by 1.4% annually; this leaves a margin of 3.6% a year for the combined increase in enrollment rates and quality, assuming that the percentage of GNP allocated to education remains unchanged. In Burkina, there is no such margin: the school-age population is increasing 3.4% per annum while real GNP only grew at 3.2% per annum from 1986 to 1991. - Primary Education 47. As teacher salaries account for more than 95% of operating costs in primary education in Burkina, an approximation of unit costs can be obtained by dividing the cost of teachers (expressed as a multiple of GNP per capita) by the number of students per teacher. Although the shares of GNP going to teachers' salaries were very similar in Burkina and the Asian countries, the primary education enrollment rate was 32% in 1991 in Burkina while it was no less than 94% in the Asian countries in 1985 (Table 2). In terms of GNP per capita, the average teacher's salary was six times higher in Burkina, a fact only partially offset by the larger number of students per teacher (57 in Burkina compared to 33 in Asia). As already noted, high teacher salaries in Burkina can be explained by the advantageous negotiating position enjoyed by its teachers as the result of the existence of very remunerative opportunities in CMte d'Ivoire, where teacher salaries were higher than in Spain. " Since each of these three parameters is expressed as a percentage, the product of the three parameters must be divided by 10,000 to obtain the total cost as a percentage of GNP. '8 Birth-rates began to decline more than 10 years ago in Asia but a similar reduction has yet to be observed in Africa. 18 48. In 1991, primary education operating expenditure in Burkina was equivalent to 1.37% of GNP, 9.8% of government receipts and 13.4% of government operating expenditure (lines 8, 10, and 12 in Table 2); 91% of students attend public schools. Since the proportion of the school-age population to the total population (line 3) is a given, the cost of teachers would rise from 1.43% of GNP (line 5) to 6.1% of GNP if (i) the enrollment rate rose from 32% to 100%, (ii) the number of students per class were reduced from 57 to 40 (lines 4 and 2), and (iii) the cost of a teacher (line 1) remained unchanged. Assuming that the other parameters (lines 6, 9 and 11) also remained unchanged, primary education would then absorb 60% of total government operating expenditure (line 13), which is clearly impossible. 49. The Country Economic Memorandum published by the World Bank in 1983 " presented three scenarios for the development of primary education. In the base-case scenario, operating expenditure in primary education increased 5% a year in real terms, while teachers' real salaries and the student/teacher ratio remained unchanged. The enrollment rate then rose from 19% in 1981 to 28% in 1990. However, the enrollment rate increased to 42% by 1990 under two other scenarios: in one case, the expenditure growth rate rose from 5% to 10% a year; in the other, the teacher cost per student declined. In reality, the enrollment rate rose to 30%, much closer to the low hypothesis (28%) than the high hypothesis (42%), although operating expenditure increased 15% a year in real terms between 1985 and 1991, at a much higher rate than that projected in the high hypothesis. The various scenarios assumed that real teacher costs per student would either stabilize or decline, but in practice they rose 4.9% a year from 1985 to 1991, of which 2.5% was attributable to a reduction in the student/teacher ratio and 2.3% to an increase in average teacher remuneration. 50. Considering the amount of budgetary resources spent on primary education, the increase in the enrollment rate has been modest. Furthermore, enrollment rates have remained very uneven as across various segments of the population, varying from 7% in Sdno province to 80% in Kadiogo province. Only 38% of students enrolled are girls, and this proportion falls to 28% in certain rural areas. The extremely low level of female enrollment in rural areas is a basic obstacle to developing the productivity of women. It also hampers the adoption of family planning methods, the adoption of better health practices, and the prevention of sexually transmissible diseases, AIDS in particular. In addition, the external efficiency of primary school attendance is probably higher for girls than for boys. t World Bank, Investment in Human Resources, Counry Economic Memorandum, Report No. 4040-UV, September 1983. 19 Table 2: Cost of primary education in Burkina Faso and the Asian countries Burkina Asian countries 1991 1985 (1) Cost of a teacher as a multiple of GNP per capita 15 2.5 (2) Number of students per teacher 57 33 (3) School-age population as a percentage of total population 17 16 (4) Enrollment rate (enrolled students as a percentage of school-age population) 32 94 (5) = 0.01 (3) (4) [(1)/(2)] (5) Cost of teachers as a percentage of GNP 1.43 1.14 (6) Portion borne by the State 0.91 0.96 (7) Operating expenditure divided by wage bill 1.05 1.2 (8) = (5) (6) (7) (8) Primary education operating expenditure as a percentage of GNP 1.37 1.31 (9) Government receipts as a percentage of GNP 14 (10) = 100 (8)/(9) (10) Primary education operating expenditure as a percentage of government 9.8 receipts (11) Total operating expenditure as a percentage of government receipts 73 (12) = 100 (10)/(11) (12) Primary education operating expenditure as a percentage of total operating 13.4 expenditure (13) = (12) [(2)/40] [100/(4)] (13) Share of primary education in total operating expenditure assuming 60 universal primary enrollment with 40 students per teacher and all other parameters unchanged N.B. The percentages shown in lines 9 and 10 are taken from Tables BI ard B2 in Annex IU. The figure of 13.4 in line 12 is slightly less than the 13.7% shown in Table 5 because the latter includes an imputed amount for non-classified expenditure. The 1.31% for the Asian countries on line 8 is less than the 1.4% shown in Table I because the latter includes a provision for capital expenditure. 20 51. The internal efficiency of the primary education system is not very high, but is comparable to that of the other countries in the region. During the 1989/90 school year, dropout rates fluctuated between 8% and 19% according to the year of study, while repetition rates varied between I1% and 15%, except in the final year (CM2) where they reached 38%; many students repeated the CM2 in an attempt to obtain their Primary Studies Certificate (Certificat d'Etudes Primaires - CEP) and pass the entrance examination into the seventh grade (Table 3)." Table 3: Advancement, repetition and dropout rates (percentages) 1989/90 Classes CP1 CP2 CE1 CE2 CMI CM2 Advancement 79.9 70.2 73.6 68.7 72.1 Repetition 11.9 11.2 15.0 13.6 15.2 38.1 Dropout 8.2 18.6 11.4 17.7 12.7 Source: MEBAM 52. To assess the quality of education provided, a survey was carried out in the first half of 1991 of 500 parents, 86 teachers and 300 students who had left primary school; in addition, more than 5,000 tests were administered to evaluate the knowledge acquired by students. The results indicate that the quality of primary education is poor, and that this education is often perceived as not meeting the needs of those concerned. Among the 500 parents surveyed, 15% indicated that they had never sent their children to school because they thought the education provided there was deficient; 81 % of the parents said that they had withdrawn their children from school because of the poor quality of education. A lack of pedagogic materials (exercise books, text books, etc.) and overcrowded classes (sometimes exceeding 100 students in urban areas) were often cited as hindering the students' progress. The tests revealed difficulties with reading, poor understanding of the texts read, and very limited mathematical knowledge (particularly the use of fractions and calculation of areas: for example, the area of a rectangle). The authors of the report therefore conclude: "the results of the tests clearly show that the great majority of students have not absorbed the knowledge they were supposed to have acquired after six years of study."" - Secondary Education 53. The unit cost of secondary education is especially high in Burkina for three reasons. First, the high level of teacher salaries is not offset, as it is in primary education, by a high student/teacher ratio in the public schools. Second, the generous grants paid to students, 38% of whom received scholarships, must be added to teacher costs. Third, the unit cost of technical education is prohibitive: in 1985/86 it was 180% higher than in general secondary education and was equivalent to six times GDP per capita. The unit cost for secondary education as a whole, expressed in terms of GDP per capita, was 2.8 times higher in Burkina than in Senegal and four times higher than in Togo. A World Bank internal document, Sector Study of the Quality of Primary Education', Yellow Cover, June 1992, p.2, Table 1. 21 Ibid, p. 9, para 33. 21 54. Some measures taken during the revolutionary period (e.g. the imposition of tuition ceilings) had the effect of reducing the role of the private schools in secondary education and therefore of increasing the state's costs. The measures penalizing private education have recently been abolished, but the private sector has not yet regained the share that it held before 1985; private schools currently account for less than half of the students in secondary education. 55. Although unit costs are very high in the first and particularly the second cycle, the internal efficiency of secondary education is low. Because of the high repetition rate, the average number of study-years is 9.6 instead of four in the first cycle and 8.5 instead of three in the second cycle. -WHigher Educaion 56. In higher education the cost of scholarships and subsidies for university facilities (CENOU) is four times as high as the cost of instruction. State assistance per student is equivalent to about eight times GDP per capita, this assistance can therefore be regarded as an advance-salary.2 57. The dropout and repetition rates vary greatly by discipline; they are particularly high in the sciences. In the faculty of sciences it takes 15 student-years for a baccalaureate holder to obtain a degree, although three years would suffice for students who pass their exams each year. Since costs vary directly with the number of study-years, the cost of transforming one baccalaureate holder into a bachelor's degree in science is five times higher than it would be if repetition and dropout rates were negligible. Out of every 1,000 new first-year students, only 169 managed to obtain their degree in mathematics and physics and 142 a degree in the natural sciences. Consequently, it cost the state CFAF 14 million (excluding capital expenditure) to produce a math or physics graduate during the 1980s, or 190 times GDP per capita.' These exorbitant costs could be cut by introducing rigorous selection criteria to limit entry to these faculties, thereby making it possible to reduce repetition rates, which are very high in the first year. - Education Considered as a Whole 58. The entrance examination for the seventh grade is an essential selection tool, since only 30% of the students who have reached the final grade of primary education (CM2) enter secondary education. What happens to the 70% who leave primary school around the age of 12, given that many of them, if the conclusions of the survey cited above are reliable, have acquired only limited knowledge? If children who are living in an environment where adult illiteracy exceeds 90% do not receive any kind of educational follow-up, they are very likely to become illiterate themselves before becoming adults. This already serious problem will become even worse if the rapid expansion of primary education is not accompanied by at least a matching expansion of post-primary education. 59. As regards the 30% of students from CM2 who do go on to the seventh grade: according to the study carried out five years ago by Mingat and Jarousse, for every 100 such students, 85 finished the first cycle, 56 entered the second cycle, 48 reached the final year and 24 obtained their baccalaureate. Most n In the African countries outside the CFA zone, the average cost of a civil servant is less than five times GDP per capita. * Jarousse and Rapiau, 'Costs, output and dfficulties of higher education in Burkina Faso,* April 1988, p.43, Table 25. 22 of these graduates entered the university and received a generous scholarship. The humanities accounted for 80% of the university degrees awarded, and the majority of these graduates found employment in the civil service or in public enterprises. 60. The equilibrium of the system was broken downstream when the flow of university graduates exceeded the absorptive capacity of the public sector, and this breakdown became definitive with the adoption of the adjustment program. The Government has decided to limit civil service recruitment to teachers and medical assistants, jobs for which university training is not required, and to a few hundred graduates in very specific areas. Furthermore, the necessary restructuring of public enterprises reduced new employment opportunities in that sector, while the needs of the formal private sector remained very limited. The blockage downstream, however, did not reduce the flow upstream but the exact opposite has occurred. The number of high school graduates almost doubled in 1991, when it exceeded 3,000. Moreover, the proportion of high school graduates going to the university increased, along with the difficulties of finding a job. Paradoxically, under the current system, the university is the surest means open to a high school graduate of meeting his or her needs. In addition, further upstream, the growth of primary enrollments has had the effect of increasing the number of students seeking to enter the seventh grade. 61. In over-simplified terms, secondary education was a preparation for the baccalaureate. The latter provided a passport to higher education, which provided the state with a pool of trained personnel for public administration. Under such a system it was conceivably justifiable that the Government should pay an advance-salary to students. But this system has already lost all its validity; under present conditions, the great majority of university graduates has to find employment outside the public sector, and consequently the raison d'etre of an advance-salary has disappeared. 62. Awards of scholarships to university students at Ouagadougou and subsidies to the CENOU should probably not exceed the university's pedagogic budget. But even if such a reduction in student assistance seems reasonable, it is not easy to implement. In practice, the amount allocated to scholarships increased significantly during the 1991/92 academic year while it should have declined. However, in 1992 the Government initiated a process of consultation with the students, leading to a reduction as from the academic year 1992/93. 63. The Government has rightly emphasized primary education, and a program is now being implemented to achieve a primary school enrollment rate of 40% by 1996/97. This gain in enrollments must be accompanied by quality improvements at this level and the proportion of girls enrolled must also increase. 64. Secondary education should no longer be regarded as a preparation for higher education. It should consist of a post-primary core supporting a number of branches. One of the latter would ensure that students completing their formal education with the CM2 do not relapse into illiteracy a few years later; the follow-up formulas must be adapted to the specific needs of rural and urban areas. A second branch would consist of a one- or two-year cycle designed to provide practical training to children still too young to enter the labor market. A third branch could provide more advanced practical training in a three- or four-year cycle. The final branch would be a preparation for the baccalaureate. Since the introduction of such a system presents a number of difficulties, it must be preceded by in-depth consultations. 65. Formal technical education has been a failure in most francophone countries in Africa. The unit costs have generally been much higher than those in traditional education, while the training acquired has often been poorly regarded by employers. Furthermore, the technical courses have often been avoided 23 by students and parents who had their sights fixed on entrance to the university, whose prestige was reinforced by the over-generous assistance given by the State to university students. It is paradoxical for the State to be paying an advance-salary to students anxious to obtain a training for which there are no employment opportunities, while more than two-thirds of the population does not have access to primary education. 66. It seems essential to rethink the purposes of the education system as a whole and to find formulas that not only meet the needs of Burkina's economy but are feasible with the available public resources. Universal primary education is unquestionably a desirable objective but, given that the school-age population is increasing at the same rate as GDP, achieving it is incompatible with maintaining the average teacher's salary at a level equivalent to 15 times per capita GDP. III. PROJECTIONS 67. In this section an analysis of the interdependence between primary education and the other kinds of education will be followed by a discussion of the allocation of operating expenditures between education and the other sectors. These projections show that a major shift from defense to the priority sectors (education and health) is feasible. Within education, a restructuring of expenditure is needed away from transfers to higher-education students toward operating expenditure. Finally, an appreciable improvement in primary school enrollment is clearly not possible without a reduction in unit costs. 68. The rate at which the central government's operating expenditure can increase is determined by the prevailing macroeconomic constraints. As part of the work on the second Policy Framework Paper, studies were carried out on possible changes in the major economic and financial aggregates between 1991 and 1995. This work was used as the basis for projections covering the period 1991-1996, and the horizon was then extended to 2001 and 2011, since almost 20 years will elapse between the time when a child begins primary school and his/her graduation from the university. These projections do not claim to predict the future, but are only intended to illustrate certain problems that Burkina will encounter. 69. 1991 is taken as the base year since it is the most recent year for which reliable statistics are available; for simplicity's sake, the projections are expressed in values measured at 1991 prices. Between 1991, a year with an excellent harvest, and 2001, for which an average harvest is assumed, the average annual growth rates adopted in the base scenario are 3.4% for GDP, 3.5% for capital expenditure, 3.9% for government receipts and 2% for operating expenditure (Table 4). It is during the first five years that financial constraints are most severe, since in this period the Government must reduce its arrears and at the same time contribute to the restructuring of public enterprises and of the banking system. Consequently, operating expenditure increases only 1% a year between 1991 and 1996. 70. Assuming that the structural adjustment phase is well-managed during the first 10 years and that the private sector is able to play a sufficiently dynamic role, growth will accelerate during the second decade. The State does not intervene directly in productive activities, but ensures the maintenance of an adequate physical infrastructure and provides the necessary resources to enhance basic education and health services, which helps to increase labor productivity. Under this scenario, which includes a modest increase in external assistance (1.4% annually in real terms), government receipts and public expenditure increase 3.7% a year between 2001 and 2011, while operating expenditure rises 3.5% per year in real terms. 24 71. Using this macroeconomic framework, operating expenditure can be broken down between defense, health, education and the other sectors as a whole (Tables 5 and 6). It is assumed that the mission of the Ministry of Defense is redefined in line with the principles set out earlier and that a reduction in the military payroll is attained with the help of demobilization grants financed from external funds.' Under these assumptions the share of operating expenditures allocated to the Ministry of Defense declines rapidly over the first five years and more slowly during the following 15 years, from 22.8% in 1991 to 17.7% in 1996 and 13.5% in 2011. The 9.3% reduction in the share of defense constitutes the bulk of the increase going to primary education and health. The share of health increases less quickly than that of primary education, but a certain complementarity is maintained between changes in expenditure allocated to these two priority sectors. 72. The share of the "other sectors" declines marginally from 37.3% in 1991 to 36.3% in 2011. In practice, the increase in the share of certain priority services, especially in the area of finance, is more than offset by the reduction in the share of other services that are not performing essential tasks. This entails an increase in the operating budget of "other sectors" as a whole of 1 % per annum on average in real terms from 1991 to 1996 and consequently no increase in the wage bill, given that the share of expenditure on materials and supplies must increase in comparison with the share of salaries. In other words, it is assumed that the civil service is restructured effectively. 73. Expenditures for the different levels of education evolve at very different rates. The share of higher education falls from 7.7% of total operating expenditure in 1991 to 5.4% in 2011, although the university's share increases from 3.2% to 4% over the same period. This is the result of a sharp reduction in scholarships, whose total cost declines 6% a year in real terms over the first decade and remains unchanged during the next 10 years. Assuming that the number of students, which has increased more than 10% annually in recent years, does not rise more than 5% annually over the next 20 years, expenditure on scholarships in relation to the number of students would in 2001 be only one third of what it was in 1991, and only one fifth in 2011. This would certainly be a radical change from the present situation. 74. As mentioned above, it is assumed that secondary education is divided into two streams serving different purposes? One of these, called "post-primary", is designed to complement primary education by preparing students better for the tasks that they will be called upon to perform in active life. The other, called "secondary", is a preparation for the baccalaureate. Post-primary allocations increase almost as fast as those for primary education, while secondary education allocations increase less rapidly. 75. On the basis of all these assumptions, operating expenditure on primary education rises 5.4% a year at constant prices between 1991 and 1996, which approximately corresponds to the increase of 8.5% at current prices mentioned in the Education IV project financed by the World Bank.' Without any reduction in unit costs, the enrollment rate would increase from 32% in 1991 to 35.2% in 1996, 37.7% in 2001 and 42.4% in 2011. Progress would therefore be very slow, although allocations to primary education increase from 13.7% of operating expenditure in 1991 to 20.2% in 2011. Since it would not be sensible to advise Burkina to allocate much more than 20% of its operating budget to primary 2 See paras. 34 and 35. 75 See para. 64. The World Bank, 'Staff Appraisal Report, Burkina Faso, Fourth Education Project, April 24, 1991, p. 20, para. 3.31 (a). 25 education, the conclusion must be that a satisfactory enrollment rate cannot be achieved without a significant reduction in unit costs. Under the assumptions adopted, the unit cost must decline by 12% from its 1991 level if the target 40% enrollment rate is to be attained in 1996. Unit cost must decline by 25% between now and 2001 and by 40% between now and 2011 to provide an enrollment rate of 50% in 10 years and 70% in 20 years. These are not particularly ambitious enrollment goals as for 20 years the number of children without access to primary education - about I million - will remain practically unchanged. Impact of unit cost reduction on primary school enrollment in 2001 and 2011 With reduction Without reduction in unit costs in unit costs 1991 2001 2011 2001 2011 unit costs (1991 = 100) 100 75 60 100 100 enrollment rate (%) 32 50 70 38 42 number of children aged 6-11 not enrolled (million) 1.1 1.1 0.9 1.4 1.7 rho entries ins table am rom Table 5. The numbr of children not enrolled is underestimated by up to 10% because the effect of repetition is not taken into account. 76. Unit costs must not be reduced to the detriment of the quality of primary education, however, since this already leaves much to be desired." The Education IV project contains a number of measures designed to improve the quality of education; specifically, it is proposed to make more textbooks available to students by reducing publication costs and organizing a textbook leasing system. It was not possible for the mission to confirm the introduction of these measures or to test their effectiveness. It is nonetheless clear that the share of expenditure on materials and supplies must rise as compared to the share of teacher salaries. Since teacher salaries currently account for 96% of the unit costs in primary education, these costs can only be cut by reducing the teacher cost per student. Achieving a 12% reduction between now and 1996 does not appear impossible but it would entail a reversal of recent trends." 77. Teacher costs per student can be cut without reducing teachers' salaries; it would be sufficient to increase the number of course hours per teacher and/or reduce the number of in-school hours per student. In a number of countries, timetables have been rearranged so as to enable the same teacher to teach one class in the morning and another in the afternoon, without raising this teacher's salary in proportion to the number of hours taught. In sparsely populated rural areas with a small number of students in each grade, teachers' productivity can be doubled by combining two classes in one or by 2 See para. 52. 7' The available statistics show a significant increase in unit costs between 1986 and 1991; see para. 49. 26 teaching one class out of two each year." Savings of this kind are possible in Burkina but their scope is limited. The average of 57 students per teacher is already very high, while the annual average of 660 hours of instruction per student is already very low?' 78. The cost to the state of primary education could be reduced without altering the level of civil service salaries by avoiding any penalizing of private schools and adopting policies to promote their expansion. In practice, the cost of subsidy per student that could be given to these schools would remain below the cost per student in the public schools. 79. The final method consists of reducing the average real salary of teachers in the public schools. However, as it is in practice impossible to reduce the nominal salaries of civil servants, it is necessary to proceed by less direct routes. A first possible solution is to reduce the allowances that are added to the basic salary." The second option is to steadily reduce real salaries by freezing nominal salaries." A third possibility is to recruit a higher proportion of assistant teachers, who are paid considerably less than those already employed." The final option consists of recruiting teachers who are not civil servants but are nonetheless competent;' this would not seem impossible given that secondary and higher education graduates are currently having great difficulty in finding jobs. 80. This lengthy list of options and means shows that there is no miracle solution to the problem of reducing unit costs in primary education. Nonetheless, if the authorities are convinced of the need to increase the enrollment rate, they must find ways of reducing unit costs. Here the experience of CMte d'Ivoire is instructive. CMte d'Ivoire made education its top priority, which was a wise choice, but paid so little attention to unit costs that the consequences for the public finances have been disastrous. According to a recent report from the World Bank," the quality of education has been deteriorating for * Primary education consists of six years going from the first to the sixth grade. Under the system recommended here, instruction would be confined in one year to the first, third and fifth grades, and in the following year to the second, fourth and sixth grades. In developed and developing countries, the number of hours of instruction per year varies from 544 to 1,200, with a worldwide average of 866, and an average for sub-Saharan Africa of 846. World Bank internal document, June 1992, *Sector Study of the Quality of Primary Education', p.3, Para. 9. n It has been possible to apply this method in C6te d'ivoire. 2 Advancement without financial gain was applied in 1991 and 1992 but cannot be maintained indefinitely. When the inflation rate is low, as is the case in Burkina, the erosion of real salaries resulting from monetary illusion is by definition limited, in the absence of an external adjustment. This practice was recommended in the context of the Education IV Project. " The use of the SND (Service national de ddveloppement) as teachers is an example of this practice, but the quality of the instruction provided seems to be poor. " 'The primary education gross enrollment rate has stabilized at approximately 73% and may decrease.... There are many indications that the quality of education is low and decreasing. At primary levels, high repetition rates are found for all grades.... Throughout the education system, the annual dropout rate is also high.... President's Report, Republic of C6te d'ivoire, Human Resources Development Program, Nov. 22, 1991, para. 50. 27 some years, although CMte d'Ivoire is among those countries which for the past 20 years have allocated a very generous share of resources to education. 81. Primary education has been emphasized in this report because it illustrates the nature of the public expenditure constraints encountered by a country opting for a democratic regime when the great majority of the population has a very low income. Such a country is by definition poor in capital and rich in labor. Consequently, raising the productivity of this labor plays an essential role in economic growth. It is obviously easier for a worker who knows how to read and count to adopt new technologies than it is for one who is illiterate. Furthermore, female literacy plays an essential role in the adoption of family planning methods, and near-universal primary school attendance is clearly a prerequisite for sustained economic development. 82. Primary education is essentially based on teachers. In the industrialized countries, teachers are regarded as a plentiful and cheap resource; they do not generally cost more than the equivalent of 1.5 times GNP per capita. In the low-income Asian countries, the teacher cost did not exceed 3 times GNP per capita in the mid-1980s; in the three countries - China, Philippines and Sri Lanka - where this cost was only 1.6 times GNP per capita, the enrollment rate was over 100% (Figure 11). In Burkina the teacher cost is 15 times GNP per capita; in other words, teachers are still treated as a scarce and expensive resource, although unemployment among graduates is becoming an increasingly worrying problem. 83. This situation could appear paradoxical. The explanation lies in the fact that teachers are civil servants and that the civil service accounts for only 1 % of the active population; as such, it constitutes an elite group. One segment of these civil servants are graduates that frequently come into contact with foreign technical assistants and representatives of international institutions with qualifications comparable to their own, but earning much higher salaries. These civil servants therefore regard themselves as poorly paid in relation to their foreign counterparts, rather than well paid in comparison to their rural fellow citizens. In a country like China, this "contamination" effect resulting from contacts with the nationals of rich countries is virtually insignificant, but in a country like Burkina, in which the volume of external assistance is high in proportion to the number of civil servants, it is far from negligible. This might be regarded as a counter-productive effect of external assistance. The way in which this assistance is administered could certainly be improved, but it is clear that Burkina will need significant external assistance for many years to come. How can these various contradictions be resolved while respecting basic public finance constraints? 84. When government receipts represent a low percentage of GNP while the average cost of a civil servant is a high multiple of GNP per capita, the public finances can only be balanced if the number of civil servants is low in relation to the total population. This model, which corresponds in a number of respects to that adopted by Burkina, is applicable to some of the tasks performed by the state because certain functions - for example, the formulation of monetary and economic policies - can be better carried out by a small number of competent, motivated, and well-paid employees than by a large number of less competent, unmotivated, and poorly paid agents. 28 Teachers ' remunerat I on and enrollment rates 130% 120% - 0 3Oln6ndon*e(a 110% - 0 Philippines 10096-i * 90% - India 90% 0 Nepa I 70% - 50% - 0 Bangladesh so% 40% 30% 0 Burkina 20a ob a o I o' 14 1'I 1bs 1 $ 7 11 13 15 17 Remuneration as multiple of GNP/Caplta Figure 11 85. Other services, however, require a high ratio of personnel in relation to the population being served. This is true of teachers in primary education, medical assistants for the primary health centers and extension agents in agriculture. The universality of the service provided accords with democratic principles and widespread provision of these services is necessary for economic growth. But universal provision of these services is not compatible with remuneration equal to a high multiple of GNP per capita for those performing the service. Since wide access to the service provided is the basic consideration in primary education in particular, a significant reduction in the average wage paid to teachers is necessary. Such a reduction in the average wage - and the associated increased employment of teachers - would also be feasible under current and prospective labor market conditions in view of considerable unemployment among secondary school and university graduates. 29 Table 4: Nacroeconomic Framework, 1991, 1996, 2001, 2011 1991 1996 2001 2011 1991-96 1991-2001 2001-11 (in CFAF billion at 1991 prices) (% per year) Current expenditure less interest 73.4 77.1 89.5 126.2 1.0 2.0 3.5 Interest 10.1 15.7 18.1 26.0 Current expenditure 83.5 92.8 107.6 152.2 Capital expenditure 46.9 55.7 66.1 95.1 3.5 3.5 3.7 Bank restructuring 17.6 6.3 0.0 0.0 Net tending 0.3 -0.9 0.0 0.0 Total expenditure 148.2 153.9 173.7 247.3 Revenue 99.8 120.0 146.3 210.8 3.7 3.9 3.7 Grants 33.5 24.0 25.3 25.3 Revenue and grants 133.3 144.0 171.5 236.0 Deficit, commitments basis -14.9 -9.9 -2.2 -11.2 Arrears -18.6 0.0 0.0 0.0 Deficit, disbursements basis -33.5 -9.9 -2.2 -11.2 External financing -17.1 8.7 11.1 12.8 1.4 Damestic financing 9.5 -5.1 0.0 0.0 Borrowing for bank restructuring 41.2 6.3 -8.9 -1.6 N.B. The projections were obtained by combining the TOFE (Table BI in Amex B) with the World Bank RMSM model. The values shown above have been limited to the principal aggregates. 30 Table 5: Possible Changes in Public Operating Expenditure by Sector, 1991, 1996, 2001, 2011 (expenditure measured at constant prices) 1996 2001 2011 2011 1991-96 1991-2001 2001-2011 1991 1996 2001 2011 Sector or Subsector Indices Growth rate Share of operating expenditure 100 X 1991 100 = 2001 (% per year) (percent) Total 105.1 121.9 172.0 141.1 1.0 2.0 3.5 100.0 100.0 100.0 100.0 1.0 Education 118.8 141.8 210.3 148.3 3.5 3.6 4.0 27.8 31.4 32.3 34.0 1.1 Primary 129.9 163.6 253.6 155.0 5.4 5.0 4.5 13.7 16.9 18.4 20.2 1.2 Post-primary 128.4 160.5 24.3 152.2 5.1 4.8 4.3 3.8 4.6 5.0 5.4 1.3 Secondary 120.9 141.4 199.7 141.2 3.9 3.5 3.5 2.6 3.0 3.0 3.0 1.4 Higher 93.8 92.9 119.9 129.1 -1.3 -0.7 2.6 7.7 6.9 5.9 5.4 1.4.1 Scholarships 73.4 53.9 53.9 100.0 -6.0 -6.0 0.0 4.5 3.1 2.0 1.4 1.4.2 University 122.4 147.7 212.7 144.0 -4.1 4.0 3.7 3.2 3.7 3.9 4.0 2.0 Health 118.8 148.0 229.9 155.3 3.5 4.0 4.5 12.1 13.7 14.7 16.2 3.0 Defense 81.5 85.7 101.9 118.9 -4.0 -1.5 1.8 22.8 17.7 16.0 13.5 4.0 Other 104.8 120.7 167.4 138.7 1.0 1.9 3.3 37.3 37.2 36.9 36.3 Population aged from 6 to 11 118.2 139.0 191.4 137.7 3.4 3.35 3.3 Enrollment rate I without reduction in unit 35.2% 37.7% 42.41 costs With reduction 40.0% 50.0% 70.0% Reduction of unit costs in 12.1 24.7 39.6 percent The primary school enrollment rate in 1991 is estimated at 32%. Source and hypotheses: see Table 6. 31 Table 6: Assumptions adopted in Table 5 - The average annual growth rates of total operating expenditure in period "t" (= f) are taken from Table 4. - The shares of expenditure by sector in 1991 are based on Annex Table B5 assuming that "non-classified expenditure" is allocated in proportion to classified expenditure. - Health expenditure increases 3.5%, 4% and 4.5% a year, respectively, from 1991 to 1996, from 1991 to 2001 and from 2001 to 2011. - Allocations for defense decline 4% a year from 1991 to 1996 and increase at an annual rate of 0.5 * t after 1996. - Other expenditure increases at an annual rate equal to 0.95 * - Expenditure on education is calculated by difference and allocations among subsectors are calculated according to the following criteria: (i) scholarships decline 6% a year from 1991 to 2001 and then remain unchanged; (ii) the increase in post-primary expenditure is 95% of primary education expenditure; (iii) the increase in secondary education expenditure is 70% of that for primary education from 1991 to 2001 and 75% from 2001 to 2011; (iv) the increase in university expenditure is 75% of that for primary education from 1991 to 2001 and 80% for 2001 to 2011. 32 Annex A Observations on Burkina's TOFE (Tableau des Opirations FinanciRres de l'Etat)' I. Scope of the TOFE 1. The TOFE covers all Government operations shown in the Treasury accounts and capital expenditure financed from external funds, which up to 1992 did not appear in the budget. However, Burkina Faso's public finances are characterized by a significant number of off-budget accounts, specifically 39 special Treasury accounts (according to a study made in 1989), which does not allow a clear view of expenditure operations. The same is true as regards operations linked to parafiscal taxes. 2. It should be pointed out that up till now debt management has been handled directly by the Ministry of Finance, which also records data regarding loan guarantees given by the Government. 3. The data for the public administrative establishments, including the social security system, the agricultural products price stabilization fund, the general price stabilization fund, and the local authorities, are not in the TOFE. Furthermore, information regarding the operations of the social security system is not available. II. Review of the data 4. Periodicity of the TOFE: The TOFE was only introduced in 1991 and its production is still irregular. However, when a monthly TOFE is prepared, it incorporates data that are as detailed as in the annual TOFE. Consequently, quarterly TOFEs could be prepared from the monthly TOFEs. 5. Evaluation of arrears: The arrears are calculated by the Treasury on the basis of overdue payments, and by the Materials and Supplies Expenditure Directorate on the basis of payments still to be authorized. It should, however, be noted that there is a particular problem regarding the calculation of arrears in Burkina Faso, involving the system of firm contracts not subject to amendment between the state and certain public enterprises such as ONEA, SONABEL and ONATEL, and giving rise to significant differences between what is really owed by the state and what is recorded under this heading. 6. Knowledge of resources: The resources shown in the TOFE are those provided for in the budget. Their execution is recorded in the accounts on a disbursements basis. External grants, both in-kind and budgetary, are included in resources. 7. Other information: Expenditure is calculated on the basis of authorizations made. The classification is based on the nature of the expenditure, but can also be made according to the objective of the expenditure. This classification does not appear in the budget but is made at the time of execution when operations are centralized for review purposes. Data regarding transfers are available, as are those J Extract from "Proposals for Harmonization of Public Finance Statistics in the UMOA," IMF, July 1992. See para. 32. 33 on operations concerning the internal debt. For internal financing the classification is based on groups of creditors only. The available figures for the internal debt are underestimated and do not include all the debt, such as, for example, BCEAO advances. However, the data used appear in the TOFE. III. Cliein of data 1. There is currently no VAT; tax reimbursements are deducted from gross tax proceeds; 2. Payments by the state to the social security system are included in remuneration and salaries; 3. The proceeds of sales associated with privatization are included in capital receipts; 4. Transfers by public enterprises are included in nonfiscal receipts; 5. Grants are included above the line; 6. Cancellation of debt and its counterparts are regarded as a reduction of arrears or, according to the situation, as payment of current debt service, and appear on their own line in external financing; 7. Compensation operations are included in receipts or net loans and as repayment of arrears; 8. Current expenditures are not identifiable in the capital expenditure budget. IV. Balances and indicatorr Balances used 1. The total deficit on a cash basis and a commitment basis, including and excluding grants. Performance indicators 1. Reduction of domestic arrears 2. Reduction of external arrears. Government's own savings 8. No meaningful calculation of the Government's own savings, that is, resources excluding current grants, could be made insofar as some current expenditures are included in capital expenditure, thereby raising the amount of savings accordingly. 34 V. Recommendations 9. The studies of the UMOA zone as a whole show that Burkina Faso's indicators, given the limited scope of government finance statistics, reveal a more unfavorable situation than in the other countries of the zone. To permit more thorough data analysis and to provide an efficient management tool, this scope should be expanded as soon as possible to the various EPAs and the social security system. 10. Assembling the TOFE is still a difficult exercise for the departments responsible for its preparation. Considerable time is needed to obtain the data, which are, moreover, fragmented. Information regarding the size of arrears is limited and a methodology should be put in place for their systematic evaluation. Efforts should be made to improve the data on the debt, and the same holds for information regarding investment operations, including detailed information on the nature of the expenditure and its execution. 35 AnnexB 1. The economic and functional breakdown of public expenditure was based on the data supplied by the following entities: - the Budget Task Force; - the General Treasury, expenditure department: total payment orders issued in respect of expenditure on personnel, materials and supplies and current transfers; - the DEPSI: capital expenditure and technical assistance expenditures included in the PIP (early August 1992 version) and corresponding to the definition of the state in the TOFE; - the Treasury: the balances in special-purpose accounts. 2. A functional classification was prepared using the nomenclature in the IMF Public Finance Statistics manual (1987). Existing ministries and agencies were grouped into 10 sectors, as follows: Table A: Sectoral classification of expenditure Sector Ministries included 1. General public administration Office of the President, SGN, Minister in the Office of the President, General Government Secretariat, Economic and Social Council, Finance, Planning and Budget, Labor and Civil Service, Foreign Affairs 2. Defense Defense (excluding security and police forces) 3. Order and public safety Police and Fire Department. Home Affairs and Security, Justice 4. Education Higher Education, National Education (MEBAM) 5. Health Health and family development and national solidarity 6. Water Water (47%) 7. Agriculture Agriculture and small farmer affairs and 53% of the budget of the Ministry of Water Supply, since on average 53% of investment projects are agricultural projects 8. Transportation, Communications and Infrastructure Infrastructure, Transportation and Communications 9. Other Economic Departments Economic Promotion, Trade, Industry and Mining 10. Leisure and Culture Information and Culture, Sport, Environment and Tourism 36 3. The classification in three categories shown in Figures 9 and 10 and Tables B6, B7 and B8 is made on the following basis: SOVEREIGNTY: sectors 1, 2 and 3 SOCIAL SECTORS: sectors 4, 5 and 10 PRODUCTIVE SECTORS: sectors 6, 7 and 8. Sector 9 was excluded from this classification because the functions of the ministries concerned were greatly changed during the period under consideration. 4. A number of adjustments had to be made to ensure the comparability of the statistics: - Joint interministerial expenditure. The joint expenditure on materials and supplies was allocated on the basis of listings provided by CENATRIN. Expenditure on items that could not be broken down in this way was allocated in proportion to the expenditure on materials and supplies of the departments concerned. Joint interministerial expenditure on personnel could not be broken down, but is low. - Transfers. The education scholarships, allowances and subsidies provided by the various ministries were brought together in the "education" sector. The amounts in question were deducted from expenditure on transfers by ministries other than the Ministry of Education. Likewise, contributions to international organizations were consolidated under the heading "Ministry of Foreign Affairs". - Capital expenditure and technical assistance. The expenditure identified on the basis of the listings provided by the DEPSI on the basis of data in the BIP was classified by sector in line with the nomenclature given in Table A. 5. A key to corresponding terms in English and French appears on Page 3 of table B.5. 15-0ec-92 Page 1 Tableau B.1: Operations financieres consoLides de t'Etat, 1985-91 (miliards de FCFA) Consolidated Governaent financial operations, 1985-91 (CFAF biLtion) ---------------------------------------------------------------------------------------------------------------------- Revue des depenses pubLiques 1985 1966 1967 1988 1989 1990 1991 Public expenditure review Recettes et dons 79.06 91.79 118.95 103.92 155.03 111.10 147.29 Revenue and grants Recettes 62.75 68.58 79.21 78.30 79.85 92.93 108.50 Total revenue Recettes courantes 62.69 68.50 79.17 78.27 79.84 92.91 107.87 Current revenue Recettes fiscales 51.28 60.85 65.10 69.71 66.88 76.42 83.17 Tax revenue Impots sur Le revew 9.03 12.37 15.67 15.44 16.30 19.96 21.57 Incom and profits taxes Impots sur La min-d'oeuvre 0.73 0.91 1.03 1.11 1.10 1.85 1.03 Labor taxes Impots sur La propriete 0.26 0.31 0.57 0.29 0.14 0.33 0.42 Property taxes Taxes sur biens at services 12.63 12.74 15.13 15.25 16.99 18.01 17.29 Indirect taxes Taxes sur comerce internet. 28.09 33.81 32.22 37.04 32.02 35.60 41.77 Taxes on international trade Autres recettes fiscales 0.54 0.71 0.48 0.58 0.33 0.68 1.08 Other tax revenue Recettes non fiscales 12.86 3.75 6.47 8.18 8.36 7.00 24.70 Nontax revenue dont:rec.except. CGP 11.00 of which: exc. pot. from CGP Autres recattes courantes -1.45 3.90 7.60 0.38 4.60 8.03 0.00 Other current revenue Recettes en capital 0.06 0.08 0.04 0.03 0.01 0.02 0.63 Capital revenue Dons 16.31 23.21 39.74 25.62 75.18 18.17 38.79 Grants Tresor 0.46 0.25 0.10 0.02 0.02 1.46 8.01 Treasury Dons-projets 15.85 22.96 39.64 25.60 15.01 16.71 30.78 Project-related Initiative de Dakar 60.15 Dakar initiative Depenses et prets nets 91.86 132.30 145.78 140.60 130.02 143.99 163.48 Expenditure and net Lending Depenses courantes 51.96 68.94 71.96 30.76 84.37 106.57 90.74 Current expenditure Depenses de fonctionnemnt 42.08 58.49 59.76 71.18 74.77 99.39 79.43 operating expenditure SaLaires 33.78 37.24 42.20 51.29 55.03 57.46 54.54 Wages and salaries Biens et services 5.27 9.42 7.12 9.20 9.42 10.55 11.62 Goods and services Interet du 7.06 7.23 8.67 9.06 7.90 8.45 10.99 Interest payments due dont: restruct.bancaire 1.67 of wh/: bank. sect. restr'ing Transferts 10.25 12.13 12.45 11.83 10.83 12.14 13.60 Current transfers dont: restruct.bancaire 2.00 of wh/: bank. sect. restr'ing Autres depenses cour./non classe -4.40 2.92 1.52 -0.62 1.19 17.96 0.00 Change in arrears Depenses en capital 37.08 60.14 70.29 59.34 43.94 38.69 72.42 Capital expenditure Budget 5.67 5.38 9.88 6.84 9.52 7.16 5.24 Financed from budget Cptes spec.& hors budget 6.37 1.77 1.21 1.37 Spec.accounts A extrabudgetary Financees sur dons 15.85 27.13 39.64 25.60 15.01 16.71 30.78 Financed by grants Financees sur prets 15.56 27.63 20.77 20.53 17.64 13.61 15.93 Financed by loans Prets nets 2.82 3.22 3.53 0.51 1.70 -1.27 0.32 Net Lending dont: restruct.bancaire 0.55 of wh/: bank. sect. restr'ing Transf.en cap. pour restruc.bnc. 19.10 Cap.transf.: bank.sect.restr'ing Epergne pubLique 10.79 -0.36 7.25 -2.45 -4.52 -13.64 17.76 Public savings Excedent/deficit gLobaL(-)Cengag.) -12.80 -40.51 -26.83 -36.68 25.01 -32.89 -16.19 Overall def./surpLus (-) (comitmant) Hors dons -29.11 -63.72 -66.57 -62.30 -50.17 -51.06 -54.98 Excluding grants Hors dons, reduct.mase sat.& rest -29.11 -63.72 -66.57 -62.30 -50.17 -51.06 -31.66 Excl.grants & restr'ing operation Variation des arrferes de paiemnt -0.95 2.55 6.32 5.23 1.51 11.85 -20.18 Change in payment arrears Interieurs -1.85 0.73 5.56 3.18 3.33 9.86 -17.68 Domestic Exterieurs 0.90 1.82 0.76 2.05 -1.82 1.99 -2.50 External Excedent/deficit global(-)(caisse) -13.75 -37.96 -20.51 -31.45 26.52 -21.03 -36.37 Overall deficit/surplus (-) (cash) Hors dons -30.06 -61.17 -60.25 -57.07 -48.66 -39.20 -75.16 Excluding grants Hors dons, reduct.msse sal.A restruct.banc. -39.20 -51.84 ExcL.grants & restr'ing operation Financement 13.75 37.96 20.51 31.45 -26.52 21.03 36.37 Financing Exterieur 6.57 28.18 18.86 15.55 -39.94 14.48 -20.13 Foreign Decaissement de prets projets 15.56 27.63 20.77 20.53 17.64 13.61 15.93 Drawings - project loans Decaisant de prets proj.retroc. 0.50 0.89 0.92 0.00 0.60 0.73 1.51 Drawings - on-tent loans Decaissement d1autres prets 1.98 0.25 0.00 Drawings - other loans Amortissement du -9.29 -7.04 -6.93 -6.15 -90.76 -8.07 -4.67 Amortization due Arrieres d'amortissemnt 1.80 6.70 4.10 1.17 25.31 7.96 *36.78 Change in amortization arrears AnnuLation de dettes 5.30 3.88 Debt forgiveness Interieur 5.18 9.78 1.65 15.90 13.41 6.55 10.27 Domestic dont:Var.d'arrier./dette inter. -6.89 of wh/:chg.in arrears/Int.debt 15-Oec-92 Page 2 TabLeau 1.1: Operations financieres conhoLides de L'Etat, 1985-91 (miLttiards de FCFA) ConsoLidated Government financial operations, 1985-91 (CFAF bitLion) Revue des depenses pubLiques 1985 1986 1987 1988 1989 1990 1991 PubLic expenditure review BCEAC -2.65 0.92 4.04 0.59 0.44 1.15 -0.94 Central bank Banques coerciaLes 5.18 1.47 0.57 -1.18 1.21 0.09 -4.75 Coercial banks Secteur non bancaire 2.65 7.39 -2.96 16.49 11.76 5.31 15.96 Non-bank sector Besoin de financement 46.22 Fimncing gap Reechetonement 37.10 RescheduLing FUI 2.43 INF Banque mondiaLe CAS 6.70 WorLd Bank SML Besoin de financement residuel -0.00 Residu&L financing gap Pour »muire: Nemo item: Aide pubtlique au deveLoppement (APO) 84.69 90.42 80.51 88.19 86.45 84.70 118.66 Off.DeveLopMent Assistance (OA) dont cooperation technique 31.31 33.28 30.02 29.81 30.18 31.72 44.44 of which technicaL assistance autre aide pubtique 53.37 57.14 50.49 58.38 56.27 52.98 74.23 other assistance Depenses nettes ies a La restructuration bancaire 23.32 Net expenditures on banking sector et a La reduct.de La masse saLariaLe restructuring & wage biLL reduction Depenses d'assistance technique 4.95 4.80 12.48 9.00 9.96 10.89 9.54 Externat technical assistance etrengere (source: PIP) financees: inctuded in PIP, finced by: sur dons 3.85 3.38 3.15 6.81 7.% 9.01 5.54 grants sur prote 1.10 1.42 9.33 2.19 2.00 1.88 4.00 toins Remises de saLaires 56.6 66.4 52.1 52.0 47.0 45.0 45.0 Workers' remittnces 15-Dec-92 Page 1 Tableau 8.2: Operations financieres consoLidees de L'Etat, 1985-91 (en pourcent du PIB) Consolidated Governaent financiaL operations, 1985-91 Cas percenta a of GDP) 1985 1986 1987 1988 1989 1990 1991 MOYENNE/AVERAGE 85-87 88-90 Recettes et dons 14.2% 15.3% 19.6% 15.6% 22.3% 15.8% 19.0% 16.3% 17.9% Recettes 11.2% 11.4% 13.0% 11.7% 11.5% 13.2% 14.0% 11.9% 12.2% Recettes courantes 11.2% 11.4% 13.0% 11.7% 11.5% 13.2% 13.9% 11.9% 12.2% Recettes fiscales 9.2% 10.1% 10.7% 10.5% 9.6% 10.9% 10.7% 10.0% 10.3% tapots sur Le revenu 1.6% 2.1% 2.6% 2.3% 2.4% 2.8% 2.8% 2.1% 2.5% Impots sur ta main-d'oeuvre 0.1% 0.2% 0.2% 0.2% 0.2% 0.3% 0.1% 0.2% 0.2% Impots sur La propriete 0.0% 0.1% 0.1% 0.0% 0.0% 0.0% 0.1% 0.1% 0.0% Taxes sur biens et services 2.3% 2.1% 2.5% 2.3% 2.4% 2.6% 2.2% 2.3% 2.4% Taxes sur commerce Internet. 5.0% 5.6% 5.3% 5.6% 4.6% 5.1% 5.4% 5.3% 5.1% Autres recettes fiscales 0.1% 0.1% 0.1% 0.1% 0.0% 0.1% 0.1% 0.1% 0.1% Recettes non fiscaLes 2.3% 0.6% 1.1% 1.2% 1.2% 1.0% 3.2% 1.3% 1.1% dont:rec.except. CGP 1.4% Autres recettes courantes -0.3% 0.7% 1.3% 0.1% 0.7% 1.1% 0.0% 0.5% 0.6% Recettes en capital 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% Dons 2.9% 3.9% 6.5% 3.8% 10.8% 2.6% 5.0% 4.4% 5.8% Tresor 0.1% 0.0% 0.0% 0.0% 0.0% 0.2% 1.0% 0.0% 0.1% Don-projets 2.8% 3.8% 6.5% 3.8% 2.2% 2.4% 4.0% 4.4% 2.8% Initiative de Dakar 8.7% 2.9% Depenses et prets nets 16.5% 22.1% 24.0% 21.1% 18.7% 20.5% 21.1% 20.8% 20.1% Depenses courantes 9.3% 11.5% 11.8% 12.1% 12.2% 15.2% 11.7% 10.9% 13.1% depenses de fonctionnement 7.5% 9.7% 9.8% 10.7% 10.8% 14.1% 10.2% 9.0% 11.9% SaLaires 6.1% 6.2% 6.9% 7.7% 7.9% 8.2% 7.0% 6.4% 7.9% Biens et services 0.9% 1.6% 1.2% 1.4% 1.4% 1.5% 1.5% 1.2% 1.4% Interet du 1.3% 1.2% 1.4% 1.4% 1.1% 1.2% 1.4% 1.3% 1.2% dont: restruct.bencaire 0.2% Transferts 1.8% 2.0% 2.0% 1.8% 1.6% 1.7% 1.8% 2.0% 1.7% dont: restruct.bancaire 0.3% 0.0% 0.0% Vr.d'arrieres -0.8% 0.5% 0.3% -0.1% 0.2% 2.6% 0.0% -0.0% 0.9% Depenses en capital 6.6% 10.0% 11.6% 8.9% 6.3% 5.5% 9.3% 9.4% 6.9% Budget 1.0% 0.9% 1.6% 1.0% 1.4% 1.0% 0.7% 1.2% 1.1% Cptes spec.& hors budget 1.0% 0.3% 0.2% 0.2% 0.0% 0.5% Financees sur dons 2.8% 4.5% 6.5% 3.8% 2.2% 2.4% 4.0% 4.6% 2.8% Finances sur prets 2.8% 4.6% 3.4% 3.1% 2.5% 1.9% 2.1% 3.6% 2.5% Prets nets 0.5% 0.5% 0.6% 0.1% 0.2% -0.2% 0.0% 0.5% 0.0% dont: restruct.bancaire 0.1% Transf.en cap. pour restruc.ben. 2.5% Epargne pubLique 1.9% -0.1% 1.2% -0.4% -0.7% -1.9% 2.3% 1.0% -1.0% Excedent/deficit gLobat(-)(engag.) -2.3% -6.8% -4.4% -5.5% 3.6% -4.7% -2.1% -4.5% -2.2% Hors dons -5.2% -10.6% -11.0% -9.3% -7.2% -7.3% -7.1% -8.9% -7.9% Hors dons, reduct.masse sal.& rest -5.2% -10.6% -11.0% -9.3% -7.2% -7.3% -4.1% -8.9% -7.9% Variation des arrieres de paiement -0.2% 0.4% 1.0% 0.8% 0.2% 1.7% -2.6% 0.4% 0.9% Interieurs -0.3% 0.1% 0.9% 0.5% 0.5% 1.4% -2.3% 0.2% 0.8% Exterieurs 0.2% 0.3% 0.1% 0.3% -0.3% 0.3% -0.3% 0.2% 0.1% Excedent/deficit gLobaL(-)(caisse) -2.5% -6.3% -3.4% -4.7% 3.8% -3.0% -4.7% -4.1% -1.3% Hors dons -5.4% -10.2% -9.9% -8.6% -7.0% -5.6% -9.7% -8.5% -7.1% Hors dons, reduct.masse saL.& restruct.banc. -5.6% -6.7% 0.0% -1.9% Financement 2.5% 6.3% 3.4% 4.7% -3.8% 3.0% 4.7% 4.1% 1.3% Exterieur 1.5% 4.7% 3.1% 2.3% -5.8% 2.1% -2.6% 3.1% -0.5% Decaissement de prets projets 2.8% 4.6% 3.4% 3.1% 2.5% 1.9% 2.1% 3.6% 2.5% Decaismt de prets proj.retroc. 0.1% 0.1% 0.2% 0.0% 0.1% 0.1% 0.2% 0.1% 0.1% Decaissement d'autres prets 0.3% 0.0% 0.0% 0.0% 0.1% Amortissement du -1.7% -1.2% -1.1% -0.9% -13.1% -1.1% -0.6% -1.3% -5.1% Arrieres d'amortissement 0.3% 1.1% 0.7% 0.2% 3.6% 1.1% -4.7% 0.7% 1.7% AnnuLation de dettes 0.8% 0.5% Interieur 0.9% 1.6% 0.3% 2.4% 1.9% 0.9% 1.3% 0.9% 1.8% dont:Vor.d'arrier./dette Inter. -0.9% 15-Dec-92 Page 2 Tableau B.2: Operations financieres consolides de l'Etat, 1985-91 (on pourcent du PIB) Consolidated Goverment financial operations, 1985-91 (as percentae of GDP) 1985 1986 1987 1988 1989 1990 1991 NOYENNE/AVERAGE 85-87 88-90 BCEAO -0.5% 0.2% 0.7% 0.1% 0.1% 0.2% -0.1% 0.1% 0.1% Banques coamerciales 0.9% 0.2% 0.1% -0.2% 0.2% 0.0% -0.6% 0.4% 0.0% Secteur non bancaire 0.5% 1.2% -0.5% 2.5% 1.7% 0.8% 2.1% 0.4% 1.6% Besoin de financement 6.0% Reechelonwment 4.8% FMI 0.3% Banque mondiate CAS 0.9% Besoin de financement residuel -0.0% Pour memotre: Aide pubLique au developpement 15.2% 15.1% 13.2% 13.2% 12.5% 12.1% 15.3% 14.5% 12.6% dont cooperation technique 5.6% 5.5% 4.9% 4.5% 4.4% 4.5% 5.7% 5.4% 4.4% autre aide publique 9.6% 9.5% 8.3% 8.8% 8.1% 7.5% 9.6% 9.1% 8.1% Depenses nettes liees a la restructuration bancaire 3.0% et a la reduct.de la masse salariate Depenses financees par l'assistance 0.9% 0.8% 2.1% 1.4% 1.4% 1.5% 1.2% 1.2% 1.4% technique etrangere sur dons 0.7% 0.6% 0.5% 1.0% 1.1% 1.3% 0.7% 0.6% 1.2% sur prets 0.2% 0.2% 1.5% 0.3% 0.3% 0.3% 0.5% 0.7% 0.3% Remises des salaires 10.1% 11.1% 8.6% 7.8% 6.8% 6.4% 5.8% 9.9% 7.0% en milliards de FCFA in billion CFA francs Produit interieur brut (PIB) 557.8 600.0 607.9 666.5 693.7 702.6 776.5 Gros& dom. product (GDP) Produit national brut (PNB) 557.4 595.8 603.6 662.6 688.8 700.5 773.5 Gros& net. product (GNP) Deflateur du PIS (1985u100) 100.00 101.86 101.88 105.68 106.99 107.83 112.53 GDP deflator (1985-100) Taux de change (FCFA/SUS) 449.3 346.3 300.5 298.0 319.0 272.2 282.1 Exchange rate (CFAF/USS) Dec-15-92 PaBe 1 TABLE 8.3: PUBLIC EXPENDITURE, 1985-91, IN CFAF BILLION Public expenditure review 1985 1986 1987 1988 1989 1990 1991 1 SERV. GENERAUX ADN. PUB. personnet 3.04 2.42 3.43 4.27 4.75 4.81 4.46 nateriel 0.99 1.81 2.14 2.31 6.59 3.44 3.16 tranef. cour. 1.11 1.12 1.90 1.33 1.52 1.88 2.05 dont contr. aux organismes Inter. 0.77 0.78 0.53 0.94 0.98 0.82 0.82 TOTAL FONCTIONNEMENT 5.14 5.36 7.47 7.91 12.87 10.14 9.66 ASSIST. TECN .. 1.04 0.66 0.69 0.75 1.32 1.66 INVEST. .. 0.97 1.94 0.52 0.97 1.50 3.79 total .. 2.01 2.60 1.21 1.72 2.82 5.46 TOTAL .. 7.37 10.07 9.12 14.58 12.96 15.12 2 DEFENSE personnel 11.43 13.66 14.39 15.46 16.69 18.00 15.39 materteL 1.57 6.04 2.47 2.77 1.03 5.57 1.90 tranef. cour. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL FONCTIONNEMENT 13.00 19.69 16.86 18.24 17.72 23.57 17.29 ASSIST. TECH INVEST. .. 0.01 0.04 0.17 0.10 0.49 0.14 total .. 0.01 0.04 0.17 0.10 0.49 0.14 TOTAL .. 19.70 16.90 18.41 17.82 24.06 17.44 3 ORDRE 8 SECURITE PUBLIQUE personnel 3.40 3.60 3.88 4.60 5.20 5.22 4.86 materiel 0.16 0.11 0.10 0.12 0.16 0.29 1.88 tranef. cour. 0.60 0.79 0.78 0.63 0.60 0.61 0.60 TOTAL FONCTIONNEMENT 4.16 4.50 4.76 5.35 5.96 6.12 7.33 ASSIST. TECN .. 0.00 0.00 0.02 0.02 0.00 INVEST. .. 0.12 0.23 0.24 0.28 0.15 0.11 total .. 0.12 0.24 0.26 0.29 0.15 0.11 TOTAL .. 4.62 5.00 5.61 6.26 6.27 7.44 4 EDUCATION personnel 7.25 7.87 8.97 12.63 13.05 13.59 14.25 materiet 0.62 0.42 0.57 0.56 0.29 0.31 0.76 transf. cour. 2.67 4.81 5.31 5.41 3.55 6.56 6.03 TOTAL FONCTIONNEMENT 10.53 13.10 14.85 18.60 16.89 20.47 21.05 ASSIST. TECN .. 0.10 0.12 0.10 0.07 0.05 0.88 INVEST. .. 0.63 1.01 2.50 3.19 5.63 2.75 total .. 0.73 1.13 2.60 3.25 5.68 3.64 TOTAL .. 13.83 15.98 21.19 20.15 26.15 24.68 5 SANTE personnel 3.93 4.08 4.64 5.78 6.04 6.18 6.11 materiat 1.23 0.76 1.07 1.55 1.29 2.04 2.37 transf. cour. 0.09 0.25 0.20 0.23 0.34 0.40 0.67 TOTAL FONCTIONNEMENT 5.24 5.09 5.91 7.57 7.67 8.62 9.15 ASSIST. TECH .. 0.77 0.61 0.90 1.08 0.62 1.43 INVEST. .. 2.69 4.19 2.17 2.34 0.85 3.56 total .. 3.46 4.80 3.07 3.42 1.48 4.99 TOTAL .. 8.55 10.71 10.63 11.09 10.10 14.15 6 EAU personnel 0.04 0.06 0.09 0.09 0.12 0.13 0.13 materfet 0.00 0.00 0.00 0.00 0.00 0.00 0.00 transf. cour. 0.13 0.03 0.02 0.05 0.03 0.06 0.06 TOTAL FONCTIONNEMENT 0.17 0.10 0.11 0.14 0.15 0.19 0.19 ASSIST. TECH .. 0.00 0.18 1.05 0.20 0.69 0.25 INVEST. .. 6.93 10.74 12.39 7.80 2.09 7.22 total .. 6.93 10.92 13.44 8.00 2.77 7.47 TOTAL .. 7.02 11.03 13.58 8.15 2.96 7.66 Doc-15-92 Page 2 TABLE 8.3: PUBLIC EXPENDITURE, 1985-91, IN CFAF BILLION Pubic expenditure review 1985 1986 1987 1988 1989 1990 1991 7 AGRICULTURE personnel 2.72 3.06 3.93 4.51 4.90 5.02 5.06 mteriel 0.15 0.05 0.02 0.02 0.01 0.02 0.01 tranaf. cour. 0.26 0.11 0.05 0.30 0.07 0.18 0.12 TOTAL FONCTIONNEMENT 3.13 3.21 4.00 4.82 4.98 5.22 5.19 ASSIST. TECH .. 1.91 9.51 4.77 5.15 6.16 3.30 INVEST. .. 22.56 26.75 25.27 19.82 15.28 20.46 total .. 24.47 36.26 30.05 24.97 21.44 23.76 TOTAL .. 27.68 40.27 34.87 29.95 26.66 28.95 8 TRANSPORT ET COeUJNICATION ET EQUIPEMENT personnel 0.48 0.81 0.95 1.49 1.57 1.52 1.42 materfel 0.06 0.06 0.07 0.04 0.02 0.03 0.02 transf. cour. 1.34 1.21 2.46 2.69 2.21 1.42 0.78 TOTAL FONCTIONNEMENT 1.88 2.08 3.48 4.22 3.79 2.96 2.22 ASSIST. TECH .. 0.03 1.13 0.44 0.34 0.08 0.72 INVEST. .. 21.99 20.61 9.64 3.85 7.25 11.72 total .. 22.02 21.74 10.07 4.19 7.33 12.44 TOTAL .. 24.10 25.21 14.30 7.98 10.29 14.66 9 AUTRES SERVICES ECOMONIJES personnel 0.27 0.28 0.35 0.40 0.47 0.54 0.46 materiel 0.09 0.05 0.08 0.08 0.33 0.18 0.38 tranwf. cour. 0.13 0.09 1.07 0.05 0.03 0.04 0.03 TOTAL FONCTIONNEMENT 0.48 0.42 1.50 0.53 0.84 0.76 0.87 dont Ofnacer 0.00 0.00 1.00 0.00 0.00 0.00 0.00 ASSIST. TECH .. 0.88 0.23 0.94 2.25 1.87 0.65 INVEST. .. 2.43 3.79 5.54 4.55 3.97 2.49 total .. 3.31 4.02 6.48 6.80 5.84 3.14 TOTAL .. 3.73 5.52 7.00 7.64 6.61 4.01 10 LOISIR ET CULTURE personnel 1.26 1.30 1.40 1.89 2.02 2.14 2.04 materiet 0.40 0.26 0.33 0.46 0.31 0.73 0.61 tranf. cour. 0.04 0.16 0.09 0.26 0.32 0.72 0.29 TOTAL FONCTIONNEMENT 1.70 1.73 1.83 2.61 2.65 3.58 2.93 ASSIST. TECH .. 0.07 0.05 0.10 0.12 0.08 0.65 INVEST. .. 0.70 0.99 0.90 1.04 1.48 1.08 total .. 0.78 1.04 1.00 1.16 1.57 1.72 TOTAL .. 2.50 2.87 3.60 3.81 5.15 4.66 TOTAL PERSONNEL 33.78 37.24 42.20 51.29 55.03 57.46 54.54 dont non reparti 0.00 0.10 0.18 0.17 0.21 0.31 0.37 TOTAL MATERIEL 5.27 9.57 7.15 8.38 10.46 13.30 11.62 dont non reparti 0.00 0.00 0.28 0.47 0.43 0.70 0.52 TOTAL TRANSFERTS COUR. 10.25 12.13 12.45 11.83 10.83 12.14 13.60 dont non reparti 3.90 3.56 0.56 0.88 2.15 0.26 2.97 AUTRES DEP. DE FONCT./NON-CLASSE -4.40 2.77 1.52 0.20 0.15 15.21 0.00 TOTAL FONCTIONNEMENT 44.90 61.71 63.32 71.70 76.47 98.11 79.76 TOTAL ASSISTANCE TECNNI. 4.95 4.80 12.48 9.00 9.96 10.89 9.54 TOTAL INVESTISSEMENT 37.08 59.04 70.29 59.34 43.94 38.69 53.32 TOTAL DEP. DEVELOPPEMENT 42.03 63.84 82.77 68.34 53.90 49.57 62.86 TOTAL GLOBAL 86.93 125.55 146.09 140.04 130.37 147.68 142.63 Dec-15-92 Page 1 TABLE 8.4: PUBLIC EXPENDITURE, CFAF BILLION AT 1985 PRICES AVERAGE ANNUAL .............................................................** GROWTH RATE Public expenditure review 1985 1986 1987 1988 1989 1990 1991 1986-8 TO 1989-91 1 SERV. GENERAUX ADM. PUB. personnel 3.04 2.38 3.37 4.04 4.44 4.46 3.96 9.5% mteriet 0.99 1.78 2.10 2.19 6.16 3.19 2.81 26.0% transf. cour. 1.11 1.10 1.86 1.26 1.42 1.75 1.82 5.8% dont contr. aux organismes inter. 0.77 0.76 0.52 0.89 0.92 0.76 0.73 3.6% TOTAL FONCTIONNEMENT 5.14 5.26 7.33 7.49 12.03 9.40 8.58 14.3% ASSIST. TECH .. 1.02 0.65 0.65 0.70 1.23 1.48 13.6% INVEST. .. 0.95 1.90 0.49 0.90 1.39 3.37 19.2% totat .. 1.98 2.55 1.14 1.61 2.62 4.85 17.0% TOTAL .. 7.24 9.88 8.63 13.63 12.02 13.44 14.9% 2 DEFENSE personnet 11.43 13.41 14.12 14.63 15.60 16.69 13.68 2.9% mterieL 1.57 5.92 2.43 2.62 0.96 5.17 1.69 -10.7% transf. cour. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ... TOTAL FONCTIONNEMENT 13.00 19.33 16.55 17.26 16.56 21.86 15.37 0.4% ASSIST. TECH .. 0.00 0.00 0.00 0.00 0.00 0.00 ... INVEST. .. 0.01 0.04 0.16 0.09 0.46 0.13 47.1% total .. 0.01 0.04 0.16 0.09 0.46 0.13 47.1% TOTAL .. 19.34 16.59 17.42 16.65 22.32 15.50 0.7% 3 ORDRE & SECURITE PUBLIQUE personnel 3.40 3.53 3.81 4.35 4.86 4.84 4.31 6.2% materieL 0.16 0.11 0.10 0.12 0.15 0.27 1.67 85.5% transf. cour. 0.60 0.78 0.77 0.59 0.56 0.57 0.54 -7.9% TOTAL FONCTIONNEMENT 4.16 4.42 4.67 5.06 5.57 5.67 6.52 7.9% ASSIST. TECH .. 0.00 0.00 0.02 0.01 0.00 0.00 -18.7% INVEST. .. 0.12 0.23 0.23 0.26 0.14 0.10 -4.7% total .. 0.12 0.23 0.25 0.28 0.14 0.10 -5.3% TOTAL .. 4.54 4.90 5.31 5.85 5.81 6.61 7.4% 4 EDUCATION personnel 7.25 7.73 8.80 11.95 12.20 12.61 12.67 9.6% mteriel 0.62 0.41 0.56 0.53 0.27 0.29 0.68 -6.3% transf. cour. 2.67 4.72 5.21 5.12 3.32 6.09 5.36 -0.6% TOTAL FONCTIONNEMENT 10.53 12.86 14.58 17.60 15.79 18.98 18.70 5.9% ASSIST. TECH .. 0.09 0.12 0.09 0.06 0.05 0.79 43.6% INVEST. .. 0.62 0.99 2.36 2.98 5.22 2.45 38.9% total .. 0.71 1.11 2.46 3.04 5.27 3.23 39.2% TOTAL .. 13.58 15.68 20.05 18.83 24.25 21.93 9.6% 5 SANTE personnel 3.93 4.00 4.55 5.47 5.64 5.73 5.43 6.2% mteriel 1.23 0.75 1.05 1.47 1.21 1.89 2.11 16.8% transf. cour. 0.09 0.24 0.19 0.22 0.32 0.37 0.60 25.2% TOTAL FONCTIONNEMENT 5.24 4.99 5.80 7.16 7.17 7.99 8.14 9.1% ASSIST. TECH .. 0.76 0.60 0.85 1.01 0.58 1.27 9.0% INVEST. .. 2.64 4.11 2.06 2.19 0.79 3.17 -11.3% total .. 3.40 4.71 2.90 3.19 1.37 4.43 -6.5% TOTAL .. 8.39 10.51 10.06 10.36 9.36 12.57 3.7% 6 EAU personnel 0.04 0.06 0.09 0.09 0.11 0.12 0.12 14.3% mterie 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -18.9% transf. cour. 0.13 0.03 0.02 0.04 0.03 0.05 0.05 10.81 TOTAL FONCTIONNEMENT 0.17 0.09 0.11 0.13 0.14 0.18 0.17 12.81 ASSIST. TECH .. 0.00 0.17 1.00 0.19 0.64 0.22 -3.8% INVEST. .. 6.80 10.54 11.73 7.29 1.94 6.42 -18.7% total .. 6.80 10.72 12.72 7.47 2.57 6.64 -18.0% TOTAL .. 6.90 10.83 12.85 7.61 2.75 6.80 -17.5% Dec-15-92 Page 2 TABLE B.4: PUBLIC EXPENDITURE, CFAF BILLION AT 1985 PRICES AVERAGE ANNUAL GROUTH RATE Public expenditure review 1985 1986 1987 1968 1989 1990 1991 1966-8 TO 1969-91 7 AGRICULTURE personnel 2.72 3.00 3.86 4.26 4.58 4.65 4.50 7.3% mitertel 0.15 0.05 0.02 0.02 0.01 0.02 0.01 -28.2% transf. cour. 0.26 0.10 0.05 0.28 0.07 0.17 0.11 -7.2% TOTAL FONCTIONNENENT 3.13 3.15 3.93 4.56 4.66 4.84 4.62 6.6% ASSIST. TECH .. 1.87 9.33 4.52 4.81 5.71 2.93 -5.0% INVEST. .. 22.15 26.26 23.92 18.53 14.17 18.18 -11.1% total .. 24.02 35.59 28.43 23.34 19.88 21.11 -9.9% TOTAL .. 27.18 39.52 33.00 28.00 24.72 25.73 -7.7% 8 TRANSPORT ET COMMJNICATION ET EQUIPENENT personneL 0.48 0.80 0.93 1.41 1.47 1.41 1.26 9.7% matertel 0.06 0.06 0.07 0.03 0.01 0.03 0.02 -27.9% transf. cour. 1.34 1.19 2.42 2.55 2.06 1.32 0.69 -12.9% TOTAL FONCTIONNENENT 1.88 2.04 3.41 4.00 3.54 2.75 1.97 -4.4% ASSIST. TECH .. 0.03 1.10 0.41 0.32 0.08 0.64 -12.51 INVEST. .. 21.59 20.23 9.12 3.60 6.72 10.41 -25.9% total .. 21.62 21.33 9.53 3.92 6.80 11.05 -25.4% TOTAL .. 23.66 24.75 13.53 7.46 9.55 13.03 -21.4% 9 AUTRES SERVICES ECONONIQUES personnel 0.27 0.28 0.34 0.37 0.44 0.51 0.41 11.0% moterieL 0.09 0.05 0.08 0.08 0.31 0.16 0.34 58.2% transf. cour. 0.13 0.09 1.05 0.05 0.03 0.04 0.03 -56.3% TOTAL FONCTIONNEMENT 0.48 0.41 1.47 0.50 0.79 0.71 0.77 -1.7% dont Ofnacer 0.00 0.00 0.98 0.00 0.00 0.00 0.00 ... ASSIST. TECH .. 0.86 0.22 0.89 2.10 1.74 0.58 30.8% INVEST. .. 2.38 3.72 5.24 4.26 3.68 2.21 -3.6% total .. 3.25 3.94 6.13 6.36 5.42 2.79 3.0% TOTAL .. 3.66 5.41 6.63 7.14 6.13 3.56 2.3% 10 LOISIR ET CULTURE personneL 1.26 1.28 1.37 1.78 1.89 1.98 1.81 8.6% materiel 0.40 0.26 0.33 0.43 0.29 0.67 0.54 14.1% transf. cour. 0.04 0.16 0.09 0.25 0.30 0.66 0.25 34.3% TOTAL FONCTIONNEMENT 1.70 1.70 1.79 2.47 2.47 3.32 2.61 12.1% ASSIST. TECH .. 0.07 0.04 0.09 0.11 0.08 0.57 53.8% INVEST. .. 0.69 0.98 0.85 0.97 1.38 0.96 9.5% total .. 0.76 1.02 0.94 1.08 1.45 1.53 14.3% TOTAL .. 2.46 2.81 3.41 3.56 4.77 4.14 12.8% TOTAL PERSONNEL 33.78 36.56 41.42 48.53 51.44 53.29 48.47 6.6% growth rate ... 8.21 13.3% 17.2% 6.01 3.6% -9.0% TOTAL MATERIEL 5.27 9.40 7.02 7.93 9.77 12.33 10.33 10.0% growth rate ... 78.2% -25.3% 12.9% 23.3% 26.2% -16.3% TOTAL TRANSFERTS COUR. 10.25 11.91 12.22 11.19 10.12 11.26 12.09 -1.8% growth rate ... 16.2% 2.61 -8.4% -9.6% 11.2% 7.3% AUTRES DEP. DE FONCT./NON-CLASSE -4.40 2.72 1.49 0.19 0.14 14.11 0.00 47.9% TOTAL FONCTIONNEMENT 44.90 60.58 62.15 67.85 71.47 90.99 70.88 7.0% growth rate ... 34.9% 2.6% 9.2% 5.3% 27.31 -22.1% TOTAL ASSISTANCE TECHNI. 4.95 4.71 12.25 8.52 9.31 10.09 8.48 3.1% growth rate ... -4.81 160.0% -30.5% 9.4% 8.4% -16.0% TOTAL INVESTISSEMENT 37.08 57.96 69.00 56.15 41.07 35.88 47.39 -12.1% growth rate ... 56.3% 19.0% -18.6% -26.9% *12.6% 32.1% TOTAL DEP. DEVELOPPEMENT 42.03 62.67 81.24 64.67 50.38 45.97 55.86 -10.0% growth rate ... 49.1% 29.61 -20.4% -22.1% -8.7% 21.5% TOTAL GLOBAL 86.93 123.25 143.39 132.52 121.85 136.96 126.74 -1.1% growth rate ... 41.8% 16.3% -7.61 -8.01 12.4% -7.5% mo: GDP deflator, annual percent change ... 1.9% 0.0% 3.7% 1.2% 0.8% 4.4% 1.9% Dec-15-92 Page 1 TALE 3.5: EXPENDITURE SY ECONMIC CATEGORY IN PERCENT Public expenditure review 1985 1986 1987 1988 1989 1990 1991 1 SERV. GENERAUX ADN. PUS. personnel 9.0% 6.5% 8.1% 8.3% 8.6% 8.4% 8.2% mteriet 18.7% 19.0% 30.0% 27.6% 63.0% 25.9% 27.2% transf. cour. 10.8% 9.2% 15.2% 11.2% 14.1% 15.5% 15.0% dont contr. mu organimes Inter. TOTAL FONCTIONNEMENT 11.4% 8.7% 11.8% 11.0% 16.8% 10.3% 12.1% ASSIST. TECH .. 21.8% 5.3% 7.6% 7.5% 12.1% 17.4% INVEST. .. 1.6% 2.8% 0.9% 2.2% 3.9% 7.1% total .. 3.2% 3.1% 1.8% 3.2% 5.7% 8.7% TOTAL .. 5.9% 6.9% 6.5% 11.2% 8.8% 10.6% 2 DEFENSE personnet 33.8% 36.7% 34.1% 30.1% 30.3% 31.3% 28.2% mterieL 29.9% 63.1% 34.6% 33.1% 9.8% 41.9% 16.4% transf. cour. 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% TOTAL FONCTIONNEMENT 29.0% 31.9% 26.6% 25.4% 23.2% 24.0% 21.7% ASSIST. TECN .. 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% INVEST. .. 0.0% 0.1% 0.3% 0.2% 1.3% 0.3% totat .. 0.0% 0.1% 0.2% 0.2% 1.02 0.2% TOTAL .. 15.7% 11.6% 13.1% 13.7% 16.3% 12.2% 3 ORDRE A SECURITE PIRLIUE personnet 10.1% 9.7% 9.2% 9.0% 9.5% 9.1% 8.9% mterieL 3.0% 1.2% 1.4% 1.5% 1.5% 2.2% 16.1% trnsf. cour. 5.9% 6.5% 6.3% 5.3% 5.6% 5.1% 4.4% TOTAL FONCTIONNENENT 9.3% 7.3% 7.5% 7.5% 7.8% 6.2% 9.2% ASSIST. TECN .. 0.0% 0.0% 0.3% 0.2% 0.0% 0.0% INVEST. .. 0.2% 0.3% 0.4% 0.6% 0.4% 0.2% totil .. 0.2% 0.3% 0.4% 0.5% 0.3% 0.2% TOTAL .. 3.7% 3.4% 4.0% 4.8% 4.2% 5.2% 4 EDUCATION personnet 21.5% 21.1% 21.3% 24.6% 23.7% 23.7% 26.1% materfel 11.8% 4.4% 8.0% 6.6% 2.7% 2.3% 6.6% transf. cour. 26.0% 39.7% 42.7% 45.7% 32.8% 54.1% 44.3% TOTAL FONCTIONNEMENT 23.5% 21.2% 23.5% 25.9% 22.1% 20.9% 26.4% ASSIST. TECN .. 2.0% 1.0% 1.1% 0.7% 0.5% 9.3% INVEST. .. 1.1% 1.4% 4.2% 7.2% 14.5% 5.2% total .. 1.1% 1.4% 3.8% 6.0% 11.5% 5.8% TOTAL .. 11.0% 10.9% 15.1% 15.5% 17.7% 17.3% 5 SANTE personnel 11.6% 10.9% 11.0% 11.3% 11.0% 10.8% 11.2% materlet 23.3% 7.9% 15.0% 18.5% 12.3% 15.3% 20.4% trmnmf. cour. 0.8% 2.1% 1.6% 2.0% 3.1% 3.3% 4.9% TOTAL FONCTIONNEMENT 11.7% 8.2% 9.3% 10.6% 10.0% 8.8% 11.5% ASSIST. TECN .. 16.1% 4.9% 10.0% 10.8% 5.7% 15.0% INVEST. .. 4.6X 6.0% 3.7% 5.3% 2.2% 6.7% total .. 5.4% 5.8% 4.5% 6.3% 3.0% 7.9% TOTAL .. 6.8% 7.3% 7.6% 8.5% 6.8% 9.9% 6 EAU personnel 0.1% 0.2% 0.22 0.2% 0.2% 0.2% 0.2% mterieL 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% transf. cour. 1.3% 0.3% 0.2% 0.4% 0.3% 0.5% 0.4% TOTAL FONCTIONNEMENT 0.4% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% ASSIST. TECH .. 0.0% 1.4% 11.7% 2.0% 6.3% 2.6X INVEST. .. 11.7% 15.3% 20.9% 17.7% 5.4% 13.5% total .. 10.9% 13.2% 19.7% 14.8X 5.6% 11.9% TOTAL .. 5.6X 7.6% 9.7% 6.2% 2.0% 5.4% Dec-15-92 Page 2 TABLE B.5: EXPENDITURE BY ECONOMIC CATEGORY IN PERCENT Public expenditure review 1985 1986 1987 1988 1989 1990 1991 7 AGRICULTURE personnel 8.1% 8.2% 9.3% 8.8% 8.9% 8.7% 9.3% materiel 2.8% 0.5% 0.3% 0.2% 0.1% 0.1% 0.1% transf. cour. 2.5% 0.9% 0.4% 2.5% 0.7% 1.5% 0.9% TOTAL FONCTIONNEMENT 7.0% 5.2% 6.3% 6.7% 6.5% 5.3% 6.5% ASSIST. TECH .. 39.7% 74.2% 53.0% 51.7% 56.6% 34.6% INVEST. .. 38.2% 38.1% 42.6% 45.1% 39.5% 38.4% totaL .. 38.3% 43.8% 44.0% 46.3% 43.3% 37.8% TOTAL .. 22.0% 27.6% 24.9% 23.0% 18.1% 20.3% 8 TRANSPORT ET COMMUNICATION ET EQUIPEMENT personnel 1.4% 2.2% 2.2% 2.9% 2.9% 2.6% 2.6% materieL 1.2% 0.7% 0.9% 0.4% 0.1% 0.2% 0.2% transf. cour. 13.1% 10.0% 19.8% 22.8% 20.4% 11.7% 5.7% TOTAL FONCTIONNEMENT 4.2% 3.4% 5.5% 5.9% 5.0% 3.0% 2.8% ASSIST. TECH .. 0.6% 9.0% 4.8% 3.4% 0.8% 7.5% INVEST. .. 37.2% 29.3% 16.2% 8.8% 18.7% 22.0% total .. 34.5% 26.3% 14.7% 7.8% 14.8% 19.8% TOTAL .. 19.2% 17.3% 10.2% 6.1% 7.0% 10.3% 9 AUTRES SERVICES ECONOMIQUES personnel 0.8% 0.8% 0.8% 0.8% 0.9% 0.9% 0.8% materiel 1.7% 0.5% 1.1% 1.0% 3.2% 1.3% 3.2% transf. cour. 1.2% 0.7% 8.6% 0.4% 0.3% 0.4% 0.2% TOTAL FONCTIONNEMENT 1.1% 0.7% 2.4% 0.7% 1.1% 0.8% 1.1% dont Ofnacer 0.0% 0.0% 1.6% 0.0% 0.0% 0.0% 0.0% ASSIST. TECH .. 18.3% 1.8% 10.4% 22.6% 17.2% 6.8% INVEST. .. 4.1% 5.4% 9.3% 10.4% 10.3% 4.7% total .. 5.2% 4.9% 9.5% 12.6% 11.8% 5.0% TOTAL .. 3.0% 3.8% 5.0% 5.9% 4.5% 2.8% 10 LOISIR ET CULTURE personnel 3.7% 3.5% 3.3% 3.7% 3.7% 3.7% 3.7% materiel 7.5% 2.7% 4.7% 5.5% 3.0% 5.5% 5.3% transf. cour. 0.4% 1.3% 0.8% 2.2% 2.9% 5.9% 2.1% TOTAL FONCTIONNEMENT 3.8% 2.8% 2.9% 3.6% 3.5% 3.6% 3.7% ASSIST. TECH .. 1.5% 0.4% 1.1% 1.2% 0.8% 6.8% INVEST. .. 1.2% 1.4% 1.5% 2.4% 3.8% 2.0% totaL .. 1.2% 1.3% 1.5% 2.1% 3.2% 2.7% TOTAL .. 2.0% 2.0% 2.6% 2.9% 3.5% 3.3% TOTAL PERSONNEL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% dont non reparti 0.0% 0.3% 0.4% 0.3% 0.4% 0.5% 0.7% TOTAL MATERIEL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% dont non reparti 0.0% 0.0% 3.9% 5.6% 4.1% 5.3% 4.5% TOTAL TRANSFERTS COUR. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% dont non reparti 38.0% 29.4% 4.5% 7.4% 19.9% 2.1% 21.8% AUTRES DEP. DE FONCT./NON-CLASSE -9.8% 4.5% 2.4% 0.3% 0.2% 15.5% 0.0% TOTAL FONCTIONNEMENT 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% BREAXDOWN OF OPERATING EXPENDITURE TOTAL PERSONNEL 75.2% 60.4% 66.6% 71.5% 72.0% 58.6% 68.4% dont non reparti 0.0% 0.2% 0.3% 0.2% 0.3% 0.3% 0.5% TOTAL MATERIEL 11.7% 15.5% 11.3% 11.7% 13.7% 13.6% 14.6% dont non reparti 0.0% 0.0% 0.4% 0.7% 0.6% 0.7% 0.7% TOTAL TRANSFERTS COUR. 22.8% 19.7% 19.7% 16.5% 14.2% 12.4% 17.1% dont non reparti 8.7% 5.8% 0.9% 1.2% 2.8% 0.3% 3.7% AUTRES DEP. DE FONCT./NON-CLASSE -9.8% 4.5% 2.4% 0.3% 0.2% 15.5% 0.0% TOTAL FONCTIONNEMENT 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Dec-15-92 Page 3 TABLE B.5: EXPENDITURE BY ECONOMIC CATEGORY IN PERCENT Public expenditure review 1985 1986 1987 1988 1989 1990 1991 ---------------------------------------------------------------------------------------------------- REPARTITION DES DEPENSES DE DEVELOPPEMENT TOTAL ASSISTANCE TECHNI. 11.8% 7.5% 15.1% 13.2% 18.5% 22.0% 15.2% TOTAL INVESTISSEMENT 88.2% 92.5% 84.9% 86.8% 81.5% 78.0% 84.8% DEPENSES DE DEVELOPPEMENT 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% REPARTITION DES DEPENSES GLOBALES TOTAL FONCTIONNEMENT 51.7% 49.2% 43.3% 51.2% 58.7% 66.4% 55.9% DEPENSES DE DEVELOPPEMENT 48.3% 50.8% 56.7% 48.8% 41.3% 33.6% 4.1% TOTAL GLOBAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Translation key for tables B.3 - B.8: personnel = wages and salaries materiel = materials and supplies transf. cour. = current transfers TOTAL FONCTIONNEMENT = TOTAL OPERATING EXPENDITURE dont Ofnacer = of which Ofnacer ASSIST. TECH = TECHNICAL ASSISTANCE INVEST. z INVESTMENT total = total TOTAL PERSONNEL = TOTAL WAGES AND SALARIES dont non reparti = of which unallocated TOTAL MATERIEL = TOTAL MATERIALS AND SUPPLIES dont non reparti = of which unallocated TOTAL TRANSFERTS COUR. = TOTAL CURRENT TRANSFERS dont non reparti z of which unaLLocated AUTRES DEP. DE FONCT./NON-CLASSE = OTHER EXPENDITURE/UNCLASSIFIED TOTAL FONCTIONNEMENT = TOTAL OPERATING EXPENDITURE REPARTITION DES DEPENSES DE DEVELOPPEMENT=BREAKDOWN OF DEVELOPMENT EXPENDITURE TOTAL ASSISTANCE TECHNI. = TOTAL TECHNICAL ASSISTANCE TOTAL INVESTISSEMENT - TOTAL INVESTMENT DEPENSES DE DEVELOPPEMENT = DEVELOPMENT EXPENDITURE REPARTITION DES DEPENSES GLOBALES z DISTRIBUTION OF TOTAL EXPENDITURE TOTAL FONCTIONNEMENT = TOTAL OPERATING EXPENDITURE DEPENSES DE DEVELOPPEMENT = DEVELOPMENT EXPENDITURE TOTAL GLOBAL = GRAND TOTAL  Dec-15-92 Pae 1 TABLE 8.6: EXPENDITURE BY MAJOR SECTOR (BILLIONS OF CFAF) ------------------------------------------------------------------------------------------ ..... 1985 1986 1987 1988 1989 1990 1991 ----------------------------------------------------------------------------------------------- SOUVERAINTE (sect. 1, 2, 3) personnel 17.86 19.68 21.70 24.33 26.64 28.03 24.70 materiel 2.72 7.96 4.72 5.21 7.78 9.30 6.94 tranf. cour. 1.71 1.91 2.68 1.96 2.13 2.50 2.65 TOTAL FONCTIONNEMENT 22.30 29.55 29.09 31.50 36.55 39.83 34.29 ASSIST. TECH ... 1.04 0.66 0.71 0.77 1.32 1.66 INVEST. ... 1.10 2.21 0.93 1.35 2.14 4.05 total ... 2.14 2.87 1.64 2.11 3.46 5.71 TOTAL ... 31.70 31.97 33.14 38.66 43.29 40.00 SECTEURS SOCIAUX (sect. 4, 5, 10) personnel 12.44 13.25 15.01 20.30 21.11 21.91 22.40 mterfet 2.25 1.44 1.98 2.56 1.89 3.07 3.75 transf. cour. 2.79 5.22 5.60 5.90 4.21 7.68 6.99 TOTAL FONCTIONNEMENT 17.47 19.92 22.59 28.77 27.21 32.67 33.13 ASSIST. TECN ... 0.94 0.77 1.09 1.26 0.76 2.96 INVEST. ... 4.02 6.19 5.57 6.57 7.97 7.39 total ... 4.97 6.96 6.66 7.83 8.72 10.35 TOTAL ... 24.88 29.55 35.43 35.04 41.39 43.48 SECTEURS PRODUCTIFS (sect. 6, 7, 8) personnel 3.24 3.93 4.97 6.09 6.59 6.67 6.61 materiel 0.21 0.11 0.09 0.05 0.02 0.05 0.03 trmaf. cour. 1.73 1.35 2.53 3.04 2.31 1.66 0.96 TOTAL FONCTIONNEMENT 5.18 5.39 7.59 9.19 8.92 8.37 7.61 ASSIST. TECN ... 1.93 10.81 6.26 5.69 6.93 4.27 INVEST. ... 51.49 58.11 47.30 31.47 24.61 39.40 total ... 53.42 68.92 53.56 37.16 31.54 43.66 TOTAL ... 58.81 76.51 62.75 46.08 39.92 51.27 Dec-15-92 Page 1 TABLE B.7: EXPENDITURE BY MAJOR SECTOR IN BILLIONS OF CFAF AT 1985 PRICES AVERAGE ANNUAL GR OWTH RATE 1985 1986 1987 1988 1989 1990 1991 1986-88 TO 1989-91 SCUVERAINTE (sect. 1, 2, 3) personnei 17.86 19.32 21.29 23.03 24.90 25.99 21.95 4.6% materiel 2.72 7.82 4.63 4.93 7.27 8.63 6.17 8.3% transf. cour. 1.71 1.87 2.63 1.85 1.99 2.32 2.35 1.6% TOTAL FONCTIONNEMENT 22.30 29.01 28.56 29.80 34.16 36.93 30.47 5.1% ASSIST. TECH ... 1.02 0.65 0.67 0.72 1.23 1.48 13.3% INVEST. ... 1.08 2.17 0.88 1.26 1.99 3.60 18.3% totaL ... 2.10 2.82 1.56 1.97 3.21 5.07 16.6% TOTAL ... 31.12 31.38 31.36 36.13 40.15 35.54 6.0% SECTEURS SOCIAUX (sect. 4, 5, 10) personnei 12.44 13.01 14.73 19.21 19.73 20.32 19.91 8.5% materiaL 2.25 1.41 1.94 2.43 1.77 2.85 3.33 11.2% transf. cour. 2.79 5.13 5.50 5.59 3.93 7.12 6.21 2.1% TOTAL FONCTIONNEMENT 17.47 19.55 22.17 27.22 25.43 30.29 29.44 7.3% ASSIST. TECH ... 0.92 0.76 1.03 1.18 0.70 2.63 18.5% INVEST. ... 3.95 6.08 5.27 6.14 7.39 6.57 9.5% totaL ... 4.87 6.83 6.30 7.32 8.09 9.20 11.0% TOTAL ... 24.43 29.01 33.53 32.75 38.39 38.64 8.1% SECTEURS PRODUCTIFS (sect. 6, 7, 8) personnet 3.24 3.86 4.88 5.77 6.16 6.18 5.87 7.9% materieL 0.21 0.11 0.09 0.05 0.02 0.04 0.03 -27.7% transf. cour. 1.73 1.32 2.49 2.88 2.16 1.54 0.85 -12.0% TOTAL FONCTIONNEMENT 5.18 5.29 7.45 8.69 8.34 7.77 6.76 2.2% ASSIST. TECH ... 1.90 10.61 5.92 5.32 6.43 3.79 -5.5% INVEST. ... 50.55 57.03 44.76 29.41 22.83 35.01 -17.0% totaL ... 52.44 67.65 50.68 34.73 29.25 38.80 -15.6% TOTAL ... 57.73 75.10 59.38 43.07 37.02 45.56 -13.2% TABLE B.8: BREAKDOUN OF EXPENDITURE BY MAJOR SECTOR, AVERAGE 1986-88 AND 1991 AVERAGE 1986-88 1991 SOUVERAINTE personneL 65.0% 61.8% materiet 19.9% 17.4% transf. cour. 7.2% 6.6% TOTAL FONCTIONNEMENT 92.1% 85.7% ASSIST. TECH 2.7% 4.2% INVEST. 5.2% 10.1% totaL 7.9% 14.3% TOTAL 100.01 100.0% SECTEURS personnet 51.9% 51.5% SOCIAUX materieL 6.3% 8.6% transf. cour. 19.9% 16.1% TOTAL FONCTIONNEMENT 78.1% 76.2% ASSIST. TECH 3.1% 6.8% INVEST. 18.8% 17.0% total 21.9% 23.8% TOTAL 100.0% 100.0% SECTEURS personnet 7.5% 12.9% PROUCTIFS materieL 0.1% 0.1% transf. cour. 3.5% 1.9% TOTAL FONCTIONNEMENT 11.2% 14.8% ASSIST. TECH 9.6% 8.3% INVEST. 79.3% 76.8% total 88.8% 85.22 TOTAL 100.0% 100.0%