Senegal - Social Investment Fund/Women in Development Project

Report No. PID8566 Project Name Senegal-Social Development Fund Program Region Africa Regional Office Sector Other Social Sector Project ID SNPE41566 Borrower(s) GOVERNMENT OF SENEGAL Implementing Agency Address MINISTRY OF PLANNING 8, Avenue Guillet Contact Person: Aboubakry Demba Lom Tel: 221 823 8891 Fax: 221 823 1437 Email: diarona@Yahoo.fr Environment Category B (Partial Assessment) Date PID Prepared September 21, 2000 Projected Appraisal Date June 26, 2000 Projected Board Date December 14, 2000 1. Country and Sector Background According to the 1991-92 Priority Survey, about 33t of Senegalese households lived below the poverty line. In most countries, poverty is a rural phenomenon with over 80t of poor households found in rural areas. Dakar, however, houses 21t of the total Senegalese population. Thus, the capital city has a significant proportion of poor households (12%-), most of them living in peri-urban areas (See Senegal: An Assessment of Living Conditions, 1995 World Bank). Results from the 1994-95 Poverty Survey indicated a rise of the overall poverty rate. Despite some recent improvement in macroeconomic performance, poverty measures (level of household expenditure) remain high, and there is no clear indication of a trickle-down effect of recent growth on the poor. Senegal's social and economic indicators have started to improve, reflecting the increased attention and resources of the Government in social development. However, progress remains fragile and social and economic indicators are still poor by the standards of countries with similar levels of income (Senegal's estimated GNP per capita for 1998 was US$550). Despite the implementation of Government programs to improve the condition of women since the early 1960s, women remain a particularly vulnerable group. The illiteracy rate is 66 percent for women (compared to 47 percent for men), and the female drop-out rate is high due to household task requirements, early marriage, and pregnancies (median marriage age for women is 16.6 and median age at birth of first child is 19.4). The under-nutrition rate for women is high, and 429- of women between ages 15-49 are considered anemic. Women do not have easy access to land and agricultural services, and their access to credit is predominantly limited to credit clubs (tontines) which permit them only very small loans. A second highly vulnerable group is the insufficiently trained or untrained youth. The estimated unemployment rate among people of ages 20-34 in urban centers has reached 40%-, compared to 29%- for the total population. Primary  school enrollment is only 68%, of which the drop-out rate is 75%-. Twenty- three percent of children under five suffer from malnutrition. Adolescents and young adults are particularly vulnerable to HIV-AIDS and other sexually transmitted diseases. Finally, the increases in urban youth criminality and child mendacity are rising concerns for Senegalese authorities. The Government's overall development strategy is articulated in the Ninth Socio-economic Development Plan (1998-2001), adopted by the National Assembly in February 1997 after extensive consultations. The Plan's objective is highly focused on poverty reduction and human development (out of its 10 strategic axes, at least 7 involve human development activities). In addition, the Government formulated a Five-Year Action Plan for Women and Development. The Action Plan highlighted the following areas to improve the status of women in Senegal: (i) access to financing, income generation, and poverty alleviation; (ii) capacity building of women's organizations; (iii) reproductive health and family planning; and (iv) women's rights and empowerment. In December 1997, the Government of Senegal developed a comprehensive Poverty Reduction Program with the input of several donors (including UNDP, Canada, and Germany). The objectives of the Program are to: (1) improve the resource base of poor groups through economic and community development activities; (2) improve the quality and quantity of social infrastructure and social services in poverty areas and groups; (3) build monitoring capacity of institutions in charge of poverty reduction policy as well as the capacity of organizations of the poor themselves. The basis of the strategy to be implemented will be a participatory approach and partnership. Thus, the proposed project will seek to contribute in implementing the three main axes of this poverty reduction strategy. 2. Objectives The project development objective is to achieve the effective use of social funds in priority development areas by the poorest tested communities in the poorest regions of Senegal with participation of vulnerable groups with gender inclusion. The Government of Senegal has developed a framework for poverty reduction in the form of the Programme de Lutte Contre la Pauvret (PLP). The Social Development Fund (SDF) Program has been conceived of within this framework to ensure that its efforts to reduce poverty in Senegal are part of the country's long-term poverty strategy, and it will complement several other World Bank and other donor projects aiming at poverty alleviation, with a view to preventing duplication and risks of contradiction. The project will build upon the positive experiences gained through: (i) long-term past experience of Community Based Organizations' (CBOs) development through NGO support; (ii) extensive experience of Micro- finance Institutions (MFIs) and Saving and Credit Associations (SCAs) in providing finances and services to less socio-economic status groups. 3. Rationale for Bank's Involvement The Bank has always spearheaded living condition assessments in Senegal. No full assessment has been done since the Bank's assessment of 1994. An update of the poverty profile was done in 1995, based on survey results and studies conducted under previous Bank projects such as the Development Management Project and the Human Resources Development 1 Project. The Bank has capitalized on its experience of social funds in other countries as well as on country-specific knowledge gained through the implementation of AGETIP I and II projects (for public works and employment), the Female Literacy Project, and the Community Nutrition Project. The Bank is in a strategic position to help the Government mobilize resources and federate initiatives -2 -  for sustainable poverty alleviation. 4. Description The project would comprise the following four components, with their respective sub-components: 1. Basic Social Services and Community Infrastructure 2. Access to Microfinance: -- Financing Income Generating Activities -- Support of Micro-credit intermediaries 3. Vulnerable Groups and CBOs Capacity Building -- Institutional Development -- Capacity Building 4. Social Fund Management (including poverty monitoring) -- Poverty Strategy and Monitoring -- Project Implementation Unit 5. Financing Total (US$m) GOVERNMENT 0 IBRD IDA 25 Total Project Cost 25 6. Implementation A Social Fund Management Unit (SFMU) will be established. The SFMU will be made up of two distinct functioning sub-units: a Social Development Grant (SDG) body and a Social development Credit (SDC) body. Components 1 and 3 will be implemented through the SDG body, while Component 2 will be implemented through the SDC body. Both will be staffed with out-sourced professionals with relevant skills in each area of expertise. The Central SFMU (CSFMU) will be responsible for the Regional antennas (RSFMU) and accountable to the Managing Board. The RSFMU will act as a technical arm of the Regional Development Agency (RDA) for poverty alleviation under a Memorandum of Agreement between the SFMU and each RDA. The SFMU will operate on the basis of the following principles: (a) transparency, simplicity, and flexibility; (b) execution by CBOs with assistance of NGOs, private sector and local public structures if needed, to ensure the decentralized and target-specific nature of the activities; (c) stakeholder/beneficiary participation which must be gender inclusive; (d) supervision and monitoring the SFMU to enable the implementation of corrective measures; and (e) replicability. The three main components that will be managed by the SFMU are: (i) improving access to social services and basic infrastructures, (ii) improving ability to access credit, and (iii) building CBO management capacity. 7. Sustainability Key factors critical to the sustainability issue are: (a) capacity building at all levels; (b) identification and participation of beneficiaries; (c) partnership and collaboration of stakeholders; and (d) quality of sub- projects. Furthermore, enabling the beneficiary organizations to sub-contract with service providers--with the aim of empowering the poor themselves to -3 -  identify, plan and implement their own project--is crucial for sustainability. The Adaptable Program Lending (APL) option should promote long-term sustainability, as the second phase will build on the first for expanding and consolidating achievements. By Phase 2 of the project, the SDF will have started mobilizing funding for poverty alleviation from other donors and the private sector, including its operating costs. It is anticipated that the SDF will become an autonomous foundation-like institution, addressing poverty issues at the community level and seeking long-term funding to build permanent endowments. It will address locally defined problems, thereby facilitating local participation and ownership, eventually leading to sustainability. 8. Lessons learned from past operations in the country/sector The project design reflects lessons learned from donor and national experience with social funds, as well as from the Bank's experience with other social investment funds. The following are among the most relevant lessons learned: Lesson 1: Clear objectives and consistency with national development strategies. The SDF needs to maintain clear and limited objectives. Efficiency of operational policies and procedures, as well as overall program effectiveness, depend upon clear understanding of SDF's role in an overall development strategy framework. It is important for Government to clarify SDF's role in the context of national policies for social development, poverty reduction, and decentralization. Furthermore, it is important to remember that SDF is designed to finance and oversee implementation of sub- projects, and not to make policies; and that while SDF managers and staff may bring important perspectives to policy discussions, participation and coordination of all actors relevant to such discussions (including the public, private, NGO/CBO sectors) should be assured. Overall, this has been achieved. Lesson 2 (cf. Implementation Completion Report of the Human Resources Development 1 Project - HRDP1): A well-tailored role for NGOs under government contract can prove very effective and may be both less expensive and more participatory than direct government implementation at the community level. This is especially relevant in the context of the decentralization and deconcentration of service delivery and state disengagement from service provision and infrastructure management. Lesson 3 (cf. Implementation Completion Report of HRDP1): Central coordination units in central ministries may be sources of delay and rivalry rather than facilitative of collaboration and increased implementation and disbursement efficiency. Further, when the project ends, Project Coordination Unit (PCU) management or technical capacity is dispersed, leading to little gain in institutional capacity or sustainability. Such units are not sustainable and decrease institutionalization of aid management capacity. Lessons learned from the implementation of AGETIP I and II and the ongoing female literacy project are being considered. Lesson 4: Experience from similar projects financed by the Bank and other donors show that the success of such projects derive from (i) the design and - 4 -  implementation scheme based on community-felt needs; (ii) building and investing in local organizations for operation and maintenance; and (iii) ensuring community ownership, transparency, and accountability. Government commitment and sustainable funding mechanisms, and attention to cost recovery are also key elements for designing a sustainable intervention. Lesson 5: Social fund interventions have not worked where policies are biased against the poor. The interventions have to be an integral part of the government's willingness and commitment to genuinely help the poor. The commitment described above in the sector background suggests that this willingness and commitment are present in this case. Lesson 6: Lessons learned from other Bank Social Funds show that sustainability is a critical issue. Sub-project sustainability requires a participatory process that seeks open consultation with communities on their needs and priorities and an involvement of communities throughout the project cycle to secure their commitment to sub-project operation and maintenance To achieve success, sub-project sustainability requires the coordinated support from both the central and local governments, with clearly defined roles and responsibilities for each. Lesson 7: Other Social Funds in the Bank show that the development of key institutional characteristics are necessary conditions for the success of any project. The proposed project would place emphasis on the institutional characteristics that are considered most critical for the success of SDF: operational efficiency; transparency and accountability, which are bolstered by clear resource allocation criteria and operational guidelines, reliable independent audits and evaluations, an effective management information system, and vigilant supervision by external financial agencies; clear and simple procurement and disbursement procedures; proper targeting mechanism; integration of the environmental viewpoints into operations; and improved attention to monitoring and evaluation activities, including beneficiary assessments. Lessons drawn from Bank's global experience are incorporated in Phase 1 of the Social Fund; such as: emphasis on community-based development; independence of the Social Fund; no direct lending by the Social Fund; and conformity to "Best Practice" in micro-finance in order to ensure long-term financial and institutional sustainability. 9. Program of Targeted Intervention (PTI) Y 10. Environment Aspects (including any public consultation) A separate Environmental Assessment summary report, entitled "Senegal Social Development Fund Project: Environment Assessment", will be available at the World Bank's InfoShop. Issues An environmental assessment (EA) was done from January to March 2000. A first draft EA report was submitted for review and comments to the Bank. Comments were received and the report was revisited and resubmitted in June 2000. The report was based on comprehensive documentation on the National Poverty Alleviation Program, on extensive field visits in three different locations, and various meetings in Dakar with agencies and resource persons involved in the design and implementation of the national program. - 5 -  During the EA process, wide public consultation was performed in three districts of the project area: Pikine, Bambey and Kolda. Meetings and individual and group interviews were arranged with target groups (youth, women, professional associations and NGOs to discuss environmental issues and potential social and health issues including AIDS and STDs. Necessary mitigation measures (including institutional capacity building) were therefore recommended in the Environment Management Plan (EMP) on the basis of the public consultation findings. Environmental issues raised by the report are related to the fact that the SDF comes under financial intermediary lending (in view of the Bank policy) and, as such, sub-projects will operate as stand-alone operations. Therefore, the sub-projects, which will generate environmental impacts on natural resources, health and hygiene, should be properly assessed. Furthermore, the SDF's EA revealed an institutional weakness in environmental management that should be dealt with by incorporating an environmental sub-project (capacity building, management, communication and training). 11. Contact Point: Task Manager Alassane Diawara The World Bank, Dakar Country Office 3, Place de l'Independance Dakar, Republic of Senegal Telephone: (221) 849 50 00 Fax: (221) 823 62 77 12. For information on other project related documents contact: The InfoShop The World Bank Jl-060 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Telephone: (1-202) 458-5454 Fax: (1-202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information is on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending October 13, 2000. - 6 -