December 21, 2006

Sao Tome and Principe

Ownership

  1. Partners have operational national development strategies
  1. Coherent long-term vision with medium-term strategy derived from vision
  1. Sao Tome and Principe has a long-term vision, the National Long-Term Perspective Study (NLTPS), which was finalized in 1998 with assistance from UNDP and the World Bank. The Government has yet to fully endorse this vision, although there is some support for it within the country as a roadmap for development. With the prospect of incoming oil revenues, there is renewed interest in establishinga long-term vision that accounts for the country’s potential source of wealth. In January 2005, the Oil Revenue Management Lawcame into effect, reservinga large percentage of any potential future oil revenues forpoverty reduction programs and ongoing national development plans.
  2. The medium-term strategy is the Estratégia nacional de redução da pobreza,National Poverty Reduction Strategy (NPRS),Sao Tome and Principe’s PRS, which initially covered the period 2002-05 and was updated to cover the period 2005-07.[1]In 2005, the Government finalizeda NPRS Priority Action Program for 2006-08. The NPRS is not explicitly derived from the long-term vision, but it embeds a long-term vision insofar as it includes targets for the year 2015.
  3. While the NPRS and its Priority Action Program are largely recognized by policymakers as the national development strategy, they have not fully influenced the implementation of sectoral policies.Line ministries’ action plans are loosely tied to the NPRS Action Plan through the Priority Action Program for 2006-08. The Government prepared health, education and infrastructure strategies, which it has updated based on the revised NPRS. It had also developed a National Environment Plan for Durable Development covering 1996-2000.
  1. Country specific development targets with holistic, balanced, and well sequenced strategy
  1. The Government set the goals of the NPRS in reference to the MDGs, but tailored to country circumstances. Some goals are more ambitious than the MDGs, such as the objective to halve poverty by 2010 instead of 2015. However, progress onNPRS goalsis slow, and most of them are not likely to be reached within the planned timeframe.
  2. The NPRS presents a balanced approach to development based on five pillars: (i) reform of public institutions, capacity building and good governance,(ii) accelerated and redistributive growth, (iii) increased employment opportunities for the poor and diversification of the economy, (iv) universal access to social services, and (v) adoption of mechanisms for monitoring and evaluation with feedback mechanisms to update the strategy. It also considers cross-cutting issues like governance, gender and the environment.
  1. Capacity and resources for implementation
  1. The Governmentstarted to partially implement the NPRS throughits 2003-04 budget.Pro-poor spending increased from 22.2 percent of GDP in 2004 to 25.2 percent of GDP in 2005. Overall, the link between the budget and sector priorities is still weak, and ministries have not fully aligned their expenditures with the NPRS. The Ministry of Planning and Finance leads a Public Investment Program (PIP) whichis project-based and is partiallyaligned to the NPRS in the health, education and infrastructure sectors.The Government is making efforts to modernize its budget nomenclature, including a functional classification of expenditures, to take NPRS programming and goals into account.
  1. Participation of national stakeholders in strategy formulation and implementation
  1. The Ministry of Planning and Finance (MoPF), under the supervision of the Prime Minister, has made some efforts to take leadership of policy development. Although the final version of the NPRS was approved by the Council of Ministers, coordination at the ministerial level remains weak. To improvealignment of PIP allocations with NPRS priorities, the Government-stakeholder Steering Committee responsible for PIP preparation, chaired by the Prime Minister,has also been responsible for NPRS formulation. An Elaboration Committee inthe MoPF was responsible for drafting the NPRS, assisted by six Government-stakeholder thematic groups. In addition, in September 2005,the Government organized a national workshop with the participation of central, regional and local authorities to update theNPRS priorities. It also organized several stakeholder consultations during the formulation of the NPRS and the NPRS Priority Action Program. Responsibility for coordinating NPRS implementation across all line ministries falls under a central NPRS unit within the Ministry of Planning and Finance, called the Poverty Observatory. However, this unit is still not fully functional due to lack of resources and capacity. A Government-stakeholder Consultative Council, chaired by the Minister of Planning and Finance, is responsible for assessing actions taken to implement the NPRS, the use of resources and the impact obtained.
  2. Civil society participatedactively in the development of the original NPRS in 2002through the Steering Committee,thematic groups,and the Consultative Council. In addition, regional consultations took place at the district level in both Sao Tome and in the autonomous region of Principe, with participation ofdifferent stakeholder groups including NGOs, religious groups, labor unions and political parties. Both civil society and private sector representatives took part in the September 2005 national workshop and consultations to draft the NPRSPriority Action Program.
  3. The National Assembly’s involvement in NPRS formulationwas limited. Some parliamentarians participated in national level consultations during NPRS formulation, but many members of the National Assembly are unaware of NPRS content. Parliamentary approval of development planning isnot required under the constitution, and the NPRS was not submitted to the National Assembly.However, under the oil revenue legislation, the National Assembly mustapprove all oil revenue accountexpenditures, including those for development plans. Representatives of the National Assembly have played a stronger role during NPRS implementation through their participation in the September 2005 national workshop and consultations to draft the NPRS Priority Action Program.Sector ministries submit reviews on progress in implementing policies and programs only in occasional reviews during the budget approval process.

Alignment

  1. Reliable country systems
  1. Public financial management is weak, but the Government has taken a number of measures aimed at strengthening its systems. In 2005, it launched a major public finance reform and appointed a steering committee in charge of implementing reform activities.It prepared a legal framework for public financial management, and it began preparations to adopt a fully electronic integrated budgetary system, called SAFE, which is expected to be operational in early 2008. The Government has made substantial efforts to implement a new budget classificationsystem, and it has plans to strengthen the accounting system with a double entry accounting planin 2008. An Integrated Financial Assessment, which includes a Public Expenditure Review, a Country Procurement Assessment Review and a Country Financial Accountability Assessment,is expected to inform an action plan for further strengthening public financial management. The Government created a Tribunal de Contas (Court of Auditors), which reports to the National Assembly and is responsible for conducting performance audits of government programs.The 2005 World Bank Country Policy and Institutional Assessment (CPIA) performance criterion that assesses the quality of budgetary and financial management places Sao Tome and Principe at 3.0 on a scale of 1 (very weak) to 6 (very strong).
  2. Procurement procedures and practices are weak.The Government is preparinga prioritized action plan and timetable with benchmarks to improve national procurement systems within the context of the Integrated Financial Assessment and the on-going public finance management reform.
  3. In the World Bank’s 2004 Governance Indicators, Sao Tome and Principe is in the thirty-second percentile of countries in its efforts to control corruption. The adoption of the Oil Revenue Management Law in late December 2004constituteda major step towards ensuring the transparent management of future oil revenue and preventing the misappropriation of funds.
  1. Aid flows are aligned on national priorities
  2. Government leadership of coordination
  1. The Government's leadership of development assistance coordination is developing. In an effort to strengthen government leadership of coordination, the unit in charge of development assistance coordination was moved from the Ministry of Foreign Affairs to the MoPF, although it will work in close cooperation with the Direction of Cooperation of the Ministry of Foreign Affairs.While the Government has not yet established a clear policy on international assistance with well-structured objectives and institutional mechanisms ensuring its coordination, external partners, including UNDP, are supporting the Government in implementing a mechanism for aid management and coordination.
  2. The World Bank worked closely with UNDP in supporting a first Round Table meeting in October 2000 and the UNDPchaired a Round Tablemeeting in Brussels in December 2005.The December 2006 sectoralround tables were held in Sao Tome city andfocused on education, infrastructure and governance.
  3. Partners’ assistance strategy alignment
  4. External partner programs are broadly aligned with the NPRS, and most recognize it as the framework for development assistance. The six major external partners are Taiwan, Portugal, France, AfDB, World Bank and the EC. Net ODA accounted for 56.5 percent of GNI in 2004.[2] The World Bank Country Assistance Strategy covering the 2006-09period supports the Government in the implementation of the NPRS. The EC’s Cooperation Strategy and National Indicative Program 2002-07, which is being updated in line with NPRS priorities,supports the principles for poverty reduction set forth in the Interim NPRS. France also supports NPRS objectives, and UNDP’s Country Co-operation Framework 2007-11 is also in line with the NPRS.In 2004,Sao Tome and Principe was selected to apply for a Threshold Program, managed by the MCC and USAID, to help countries work toward MCA eligibility.
  5. Partnership organization
  6. External partners have not decentralized decision-making to country offices with few exceptions, such asUNDP.Most other partners, includingthe World Bank, have country representativesbased in their headquarters or nearby countries. UN agencies, France and Portugal have a strong presence in country, but decentralization of decision-making is limited.
  1. Strengthen capacity by coordinated support

Coherent and coordinated capacity support

  1. Capacity building efforts are fragmented, although some partners are moving toward the provision of joint capacity building support. For example, UNDP, AFRISTAT and the World Bank are coordinating support to strengthen statistical capacity.The World Bank and UNDP have been providing joint technical assistance in the petroleum sector.External partners are working toward coordinated capacity support through their participation inthe sectoral roundtables in education, infrastructure and governance.
  1. Use of country systems

Donor financing relying on country systems

  1. Most external assistance is provided in the form of projects or technical assistance. The AfDB and Taiwan have provided budget support to help the Government fill its budget gap, although the overall proportion of aid disbursed as budget support is very small. On-going public finance management reforms are expected to modernize and improve the fiduciary practices of the central budget. In addition, it is expected that the ongoingIntegrated Financial Assessment will provide elements of policy dialogue for the elaboration of aWorld Bank budget support operation. The EC and AfDB arealso considering providingbudget support.External partners havenot taken steps toward use of national procurement or financial management systems for project implementation.
  1. Strengthen capacity by avoiding parallel implementation structures

PIUs progressively phased out

  1. There has not yet been a move by any external partners to phase out parallel PIUs or to consolidate multiple PIUs into a single one in each sector. The Government would like PIUs to be phased out.
  1. Aid is more predictable

Disbursements aligned with annual budgetary framework

  1. Disbursements are generally not aligned with the annual budgetary framework, and there is little discussion among external partners on increasing the predictability of aid.
  1. Aid is untied
  1. Since some bilaterals are considering increasing the share of official development assistance they provide through budget support, untied aid mayincrease.

Harmonization

  1. Use of common arrangements or procedures
  1. External partners have not discussed supporting the Government in thedevelopment of SWAps, and there is little discussion on the use of common arrangements or procedures. Preliminary work, led by UNDP, is underway to help the Government in harmonizing external partner procedures.
  1. Encouraging shared analysis

Joint missions

  1. There are some examples of external partners undertaking missions jointly. The IMF and the World Bank routinely undertake joint missions. Twojoint missions were undertaken by the World Bank and the AfDB in February 2006 and May-June 2006 to launch theIntegrated Financial Assessment. The Government does not have a mechanism to track the number of missions, and it has not requested that more missions beconducted jointly.

Analytical partnership

  1. TheIntegrated Financial Assessment, expected to be completed May 2007,is being supported jointly by the World Bank, AfDB and France. It incorporates a Public Expenditure Review, a Country Financial Accountability Assessment and a Country Procurement Assessment Report. External partners have posted 4 documents on the Country Analytic Work website.[3]

Managing for results

  1. Results oriented frameworks
  2. Quality of development information
  1. The Government is undertaking initiatives to strengthen statistical capacity and data. For example, it has initiated work towardsdeveloping a national statistical development strategy. The National Statistics Institute is undertaking two surveys.In March 2006, it completed data collection for a Core Welfare Indicator Questionnaire. A poverty survey and a General Population and Housing Census were completed in 2001 with technical support from the ILO, UNDP, the World Bank and AfDB. Another Household Survey is to be launched in 2007.
  2. Stakeholder access to development information
  3. The Government has made some efforts to distribute NPRS content, mostly during NPRS consultations. The NPRS includes a general plan for disseminating information on development programs. The Government conducted an information campaign aimed at building awareness among the population of the challenges and objectives of the 2005 Round Tablemeeting.It has posted the NPRS Priority Action Plan for 2006-08 on the website of the Observatory of Poverty Reduction within the Ministry of Planning and Finance.[4]
  4. Coordinated country-level monitoring and evaluation
  5. Preliminary steps have been taken to establish a country-level M&E system. In February 2005, the Government established a Poverty Reduction Observatory in the MoPF, with the support of UNDP, to monitor these indicators. However, frequent changes in political leadership and unclear distribution of responsibilities among the Observatory of Poverty Reduction, the Directorate of Planning and the National Statistics Institute have slowed progress. Most M&E takes place at the project level. There is no pre-established M&E system within line ministries, and delays in the preparation of Annual Plans and Annual Audit Reports areslowing down the establishment of the NPRS M&E Unit. The Government has not yet established sectoral Focal Points to coordinate sectoral M&E.A set of indicators, with a strong focus on education, health and infrastructure, is included in the NPRS, and efforts are underway to update and improve them.

Mutual accountability

Development effectiveness assessment frameworks

  1. Sao Tome and Principe has signed the Paris Declaration on Aid Effectiveness. However, a joint monitoring framework, with performance indicators to assess Government and external partner progress toward increased aid effectiveness, is not in place.

Bibliography

Constitution of the Democratic Republic of Sao Tome and Principe, 1975 (as amended to 1990).

EC (2002), Stratégie de coopération et Programme Indicatif National 2002-2007.Brussels.

EIU (2006), Sao Tome and Principe Country Profile.London.

______(2006), Sao Tome and Principe Country Report. April.London.

Government of Sao Tomé e Príncipe (2000), Interim Poverty Reduction Strategy Paper, 2000-02. Sao Tomé.

______(2002), Estratégia nacional de redução da pobreza. Sao Tomé.

______(2005), National Poverty Reduction Strategy (with updated annexes).Sao Tomé.

______(2005), National Poverty Reduction Strategy Priority Action Programme 2006-2008.Sao Tomé.

IMF and World Bank (2005), Sao Tome and Principe Joint IDA-IMF Joint Staff Advisory Note on the Poverty Reduction Strategy Paper.Washington DC.

Portuguese Co-operation Institute (2002), Programa Indicativo da Cooperaçao Portugal - São Tomé e Príncipe 2002-2004. Lisbon.

UNDP (2002), Deuxième cadre de coopération avec le Sao Tomé et Principe 2002-06. New York.

VENRO (2003), PRSP-Watch. Länderprofile: São Tomé & Príncipes (September).Berlin.

World Bank (2000), Country Assistance Strategy for the Democratic Republic of Sao Tome and Principe 2000-05. WashingtonDC.

______(2005), Country Assistance Strategy for SaoTome e Principe.WashingtonDC.

Related Websites

World Bank Country Policy and Institutional Assessment (CPIA):

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[1] The NPRS was completed in December 2002, and its update was completed in January 2005.

[2] See OECD/DAC Aid Statistics at

[3]

[4]