Learning from Senegal’s experience in implementing the World Bank’s Program for Results

The World Bank’s Program for Results (PforR) instrument is helping governments strengthen public finance management (PFM) systems. This blog looks at the three lessons learned from implementing PforR in the West African nation.

In 2012, the World Bank launched its Program-for-Results (PforR) financing instrument in response to governments across the world demanding programs that could help deliver sustainable results and build institutions. PforR is focused on results and helps governments to use their countries’ institutions and processes, linking the disbursement of funds directly to the achievement of specific program results. PforR’s unique approach helps build capacity within the country, enhances effectiveness and efficiency, and leads to the achievement of tangible, sustainable program results.

PforR is also unique because it supports government programs and helps leverage World Bank development assistance by fostering partnerships and aligning development partner goals  and results that can lead to greater development effectiveness.

Since its design, there has been a steady increase in the use of PforR. Senegal is one of the early adopters of the PforR instrument among West African countries. The country's first PforR operation, the Municipal and Agglomerations Support Program (PACASEN) became effective in 2018 and supports the country's fiscal decentralization program. In 2020, PACASEN was followed by a second PforR operation in the agriculture sector, the Agriculture and Livestock Competitiveness Program for Results.

Interestingly, Senegal’s adopted the PforR instrument at just the right time. During the period, the country’s PFM institutional framework was going through a series of reforms to align with the West African Economic and Monetary Union (WAEMU) PFM Directives. Thus, the implementation of the PforR helped the country align with these directives, which strengthen the program-budget approach as opposed to the traditional budget-costing approach.

Now with two PforR programs running in parallel, one since 2018 and the other since 2020, it’s time to take a look at three early lessons we are learning from Senegal on the actual functioning of the PFM system:  

1. The policy alignment of the budget program could be improved through proactive dialogue with the government during the annual budget preparation process. Senegal’s two PforRs are grounded in well-designed national and sectoral policies or strategies. These policies are implemented through multi-year planning and budgeting documents prepared through a consultative process within each ministry and between sectoral ministries and the Ministry of Finance. Nonetheless, given competing priorities and overall fiscal constraints, the budget allocation to the program usually falls short of the initial estimate agreed in the program expenditure framework. Budgeting is at the junction of technical consideration and political arbitration. Proactive dialogue with the sectoral ministry and, importantly, the Ministry of Finance is critical to address the budget allocation inadequacies that could impede the program implementation and the delivery of the program outcomes. In most cases, proactive dialogue helps address the budget gap during the budget preparation or revision process via an amendment to the Initial PFM law. The use of the PforR instrument to support programs of the highest priority on government agenda also facilitates a strong alignment of the allocated budget to policy. 

2. From the onset, mainstreaming the PforR result framework into the government’s budget planning framework is critical to fostering ownership and achieving results. While the government’s strategic objectives and results areas are consistent with PforR’s development objective and results, a gap exists between some of the result indicators tracked in the government’s strategic plan and policies and the PforR result framework and Disbursement Linked Indicators (DLI), which usually include additional result indicators. These discrepancies in result indicators create inefficiencies and reduce accountability over intended results. An ad hoc system to track and report these result indicators is then established, but these indicators are not included and monitored in the sectoral annual performance plan and annual performance report, which form part of budget documentation submitted to the National Assembly and Supreme Audit Institution for scrutiny. Addressing the above gaps requires a better sequencing between the government's strategic planning documents preparation, the PforR preparation timeline, and early discussions and commitment from the government to amend strategic documents to include missing result indicators.

3. Boosting domestic revenue mobilization matters for an effective program cash-flow planning and management. The PforR assumes that the government mobilizes its own resources to pay for expenditures incurred. Only after the achievement of agreed-on results, which are independently verified, does the government receive financial incentives from the World Bank. This assumption has proven to be challenging in the context of lower domestic revenue mobilization caused by the COVID-19 pandemic and the resulting higher spending needs for social and economic resilience and recovery. Due to this, financial transfers to beneficiaries under PforR are being delayed. While an advance of up to 25 percent of the total financing is possible, this measure could fall short of sustainably addressing the cash-flow challenges. Thus, engaging early with the government officials in charge of cash prioritization decision-making helps influence decision-making in favor of the program priorities. It also has opened opportunities for technical assistance to support the country's domestic revenue-mobilization agenda.

As of September 30, 2021, there were 121 active PforR operations totaling $38.15 billion of World Bank financing.  As more countries adopt PforR, the lessons learned from one of the early adopters like Senegal can inform the successful design and implementation of PforR in other countries.