PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: PIDA2902 Public Disclosure Copy Project Name Social Safety Net Project (P124015) Region AFRICA Country Burkina Faso Sector(s) Public administration- Other social services (30%), Other social services (70%) Theme(s) Social safety nets (80%), Other social protection and risk management (10%), Nutrition and food security (10%) Lending Instrument Specific Investment Loan Project ID P124015 Borrower(s) Burkina Faso Implementing Agency Ministry of Social Action and National Solidarity Environmental Category C-Not Required Date PID Prepared/Updated 27-Jan-2014 Date PID Approved/Disclosed 04-Feb-2014 Estimated Date of Appraisal 31-Jan-2014 Completion Estimated Date of Board 23-Apr-2014 Approval Public Disclosure Copy Decision I. Project Context Country Context Burkina Faso has experienced strong economic growth due to prudent economic management and beneficial commodity prices. Burkina has maintained economic stability in the face of economic shocks, including recurring droughts. In recent years much progress has been achieved in terms of structural reforms, sound economic policies, steady investments and a stable macroeconomic environment. Consequently the economy experienced an average growth rate of 5 percent in the last decade and about 8 percent in 2012 (projected 7 percent in 2014/15). Nevertheless, Burkina faced difficulties in 2012 as large inflows of Malian refugees as well as continuing food shocks put fiscal pressure for food and schools (for the refugees) on the budget. However, the growth has not benefited all people. The main reason is the very high fertility and population growth rate which consumes much of the growth benefits and narrowly based in gold and cotton exports. Overall poverty reduction has been stagnant since the 1990s and inequality is rising. The poverty gap is actually growing and the share of the poorest quintile in national consumption is decreasing. Around 46.7 percent of the population lived below the monetary poverty line in 2009, a small decline of 4.3 percentage points from 51 percent in 2003. Food Page 1 of 7 poverty is especially high as 58.1 percent of the population cannot meet basic caloric needs. Four regions (Est, Nord, Sud-Ouest, and Centre-Est) are considerably poorer than the rest of the country with poverty rates around 60 percent (Figure 1) and chronic poverty of over 40 percent . Burkina’s Public Disclosure Copy economy is predominantly rural but agricultural productivity is low and below the country’s potential. Fifty-three percent of the population lived below the national poverty line in rural areas in 2009 and 88 percent of all poor live in rural areas. Burkina also needs to address high fertility rates (total fertility rate of 6.00 children per woman, the 8th highest in the world) and rapid growth of its population of 15.3 million (with a rate of 3.4 percent per year, it is set to double in 20 years). Households’ livelihoods are vulnerable to food insecurity and shocks linked to the narrow resource base of the Sahel environment. Household exposure to risks ranging from natural hazards (droughts, floods, etc.) to exogenous shocks (price hikes, regional instability), exacerbates the poor’s vulnerability to shortfalls in consumption. This results in seasonal hikes in the incidence of poverty and food insecurity. Over 20 percent of the population (more than 3.5 million) is food insecure and 30.6 percent lives in chronic poverty. In addition, childhood malnutrition is very high. In 2012, 32.9 percent of children under 5 were stunted (low height-for-age). In the poorest income quintile the share of stunted children is even higher, at 43 percent. The prevalence of acute malnutrition (wasting as measured by low weight-for-height) was 10.2 percent nationally (ENN, 2011). Other human development indicators related to hunger, child and maternal mortality are also amongst the lowest in the world. Poor access to education, agricultural inputs, and the young dependency ratio are significant correlates with poverty. Figure 1. Poverty headcount rate in the different regions of Burkina Faso 2009 The causes of malnutrition in Burkina are both food and non-food related including inappropriate (quality and quantity) feeding, difficulties in accessing health care, socio-cultural factors, and lack of hygiene and sanitation, all linked with poverty. Caring practices, notably related to breastfeeding, are also a significant challenge in Burkina (only 25 percent of children were exclusively breastfed until 6 months) and a key correlate with childhood malnutrition. Food insecurity and undernutrition Public Disclosure Copy in adults (more than 1/5 of women have Body Mass Index (weight/height squared) less than 18.5) are prevalent and reflect low production due to climatic conditions and inability of the poor to obtain sufficient monetary incomes. The incidence of malnutrition requires a multi-faceted response to expand direct nutrition and nutrition sensitive interventions such as improved sanitation conditions and hygiene practices, increased access to safe water, basic health services, and social safety nets. Lack of income is one of the main barriers facing the poor to access services such as health care. In Burkina, financial capacity largely drives health seeking behavior and provider choice. Health insurance is more or less non-existent. Self-medication through traditional medicine is quite prevalent and many use this due to financial barriers to formal care, others do out of preference. As a result, the rate of prenatal consultations is only 18 percent in Burkina compared to 44 percent on average in sub-Sahara Africa. Sectoral and institutional Context The government places significant emphasis on poverty reduction, food security, and promoting access by the poor to services and social assistance. The objective is to reduce monetary poverty to 35 percent by 2015. Given the high levels of poverty and food insecurity and the limited fiscal space, poverty-targeted efforts such as safety nets are needed. Burkina’s development strategy Page 2 of 7 2011-15 Stratégie de Croissance Accélérée et de Développement Durable (SCADD) recognizes social protection as a key pillar. The priority actions in this pillar include: a) improving strategic and institutional frameworks for social protection and; b) improving access to basic social services Public Disclosure Copy by the population, c) providing a social protection floor using cash transfers, and d) better targeting resources to the poor. Until recently however the main focus of social assistance was on humanitarian aid and food distribution such as direct food handouts in areas of high food insecurity. During the most recent food crisis (dry season 2012) the government spent more than US$130 million to help feed affected people. In 2013, close to 50,000 tons of food have been sold or distributed to the rural population by the two key agencies SONAGESS and CONASUR, together with the World Food Program (WFP), European Union, and USAID. The government has facilitated access to strategic grain reserves, strengthened early warning systems to identify vulnerable segments of the population, and embarked on an ambitious program of subsidized sales of food. Major famine has been averted although at high costs and with severe execution bottlenecks. The use of targeted direct non- contributory transfers was very limited and ad-hoc. The government is ready to use safety nets as a tool for reducing poverty. The new social protection strategy, Politique Nationale de la Protection Sociale (PNPS), adopted in 2012 outlines the government’s vision for a national safety net system capable of responding effectively to the needs of vulnerable groups both during periods of crisis/shocks and in normal times by promoting a way towards better livelihoods and access to services. The strategy core program is targeted cash transfers to the poor focusing on the food insecure. Voucher programs are also envisioned especially in urban areas. To oversee the strategy implementation a National Council for Social Protection was established by decree in July 2013. In parallel the government has prepared a national policy for food security and an action plan for accelerated progress towards reducing extreme poverty, hunger and food insecurity which mainly prioritizes actions related to agriculture, food supply and rural infrastructure. In 2011 the government joined the Scaling-up Nutrition (SUN) Public Disclosure Copy effort led by UNICEF. Targeted safety nets can help increase household consumption and investments in both human capital and productive activities. Safety nets can hence be seen as strategic investments for reducing poverty and household risk on a large scale and breaking the cycle of inter-generational transmission of poverty. Simulations undertaken for the 2011 safety net assessment pointed out that in Burkina between 1.4-1.6 percent of GDP would have been needed in 2007-08 to completely eliminate all chronic poverty through cash transfers. Consequently, the government has decided to target resources more effectively to the poor, to allocate more budgetary resources to protect poor and vulnerable groups, and to increase the scope and coverage of the existing but limited safety net system. The existing programs in Burkina Faso do not provide an adequate safety net and need to be brought within a coordinated system. According to the safety net assessment the current safety net system is weak and does not address the needs of the country. No systematic approach exists for reaching the poor and vulnerable. Between 2005 and 2009, spending on safety nets was only about 0.6 percent of GDP (excluding fuel subsidies). Food transfers accounted for 69 percent of the spending and over 80 percent of beneficiaries in 2009. The main challenges for strengthening safety nets in Burkina include: defining priority target groups; choosing adequate instruments; and establishing solid M&E systems to inform policy decisions. Also, the strategic and institutional Page 3 of 7 framework needs strengthening. The assessment concludes that an effective safety net system in Burkina should include a targeted transfer program to boost consumption of the poorest and help them invest in human capital; labor intensive public works for providing additional income during Public Disclosure Copy times of revenue shortfalls and engaging youth in productive activities; school feeding programs for encouraging participation of disadvantaged children; and free health services for indigents. Pilot cash transfers and voucher programs have shown promising results in improved access to services, children’s nutritional status and other human capital outcomes for the poorest in Burkina. Since 2008 the government and donor agencies have experimented with different pilot transfer programs including cash transfers and food vouchers. The WFP urban food voucher program benefited over 30,000 households during six months in 2010 and 2012. Burkina has also had experiences with conditional cash transfers (CCTs) which were evaluated using rigorous impact evaluation methods. The evaluation indicates that cash transfers, with and without conditions, had a positive and significant impact on nutrition in young children (anthropometric indicators) during 2009 when weather related events were particularly bad. Routine health clinic visits also increased as did school attendance, especially when conditions were imposed. Several other impact evaluations of cash transfers in Africa have found positive impacts on food consumption, food diversity and short and long run measures of child malnutrition. II. Proposed Development Objectives The project development objective (PDO) is to provide income support to poor households and to lay the foundations for a basic safety net system in Burkina Faso. III. Project Description Component Name Cash transfers and awareness programs for poor households Comments (optional) Public Disclosure Copy Component Name Laying the foundations for a basic national safety net system Comments (optional) Component Name Project management Comments (optional) IV. Financing (in USD Million) Total Project Cost: 50.00 Total Bank Financing: 50.00 Financing Gap: 0.00 For Loans/Credits/Others Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 50.00 Page 4 of 7 Total 50.00 Public Disclosure Copy V. Implementation A. Institutional and implementation arrangements Recently, by a set of decrees the government put in place the overall institutional arrangements for coordinating social protection programs including a National Council for the Social Protection (CNPS) as the body for policy orientation (chaired by the Prime Minister). Coordinating bodies are composed of: (a) a secretariat (chaired by a Permanent Secretary) whose role is to assist the CNPS; (b) an inter-ministerial unit responsible for safety nets under the authority of the MASSN whose role is to implement safety net programs; (c) an inter-ministerial unit responsible for social insurance under the authority of the Minister of Public Service, Labour and Social Security whose role is to implement social insurance programs, and (d) regional social protection units responsible for implementation and monitoring of social protection activities at the regional levels. These proposed institutional arrangements constitute the first steps towards the creation of a sustainable safety net system in Burkina Faso. As part of the objective of setting up a permanent safety net system, the institutional framework for social protection in Burkina serves as the institutional anchorage for the project. Consistent with the national level coordination of social protection and safety nets the institution chosen for the implementation of the project is the MASSN. Moreover, in order to integrate and institutionalize social protection and the project activities more into the long term objectives and mandate of the ministry, the government has decided to build it into a program called “Programme de Renforcement de la Protection Sociale” (PRPS). In December 2013 the ministry decided, due to the importance they place on the project and the capacity required for implementation, to make the project a category “B” project indicating that it would benefit from a semi-autonomous implementing unit Unité de Gestion (UG) under the authority of the MASSN. Most other successful government projects supported by development partners in Burkina Faso use the category “B” classification even in cases where they are managed by more influential ministries. The project team Public Disclosure Copy will be recruited, paid by the project, and will work exclusively on this project. The UG will include at a minimum a coordinator, a procurement specialist, and a financial management specialist. A multisectoral Steering Committee, presided by the Secrétaire Général of the MASSN, with a vice- president from the MEF, including representatives from other relevant ministries (such as the Ministries of Health, Education, and Agriculture and Food Security) and civil society will oversee project implementation. B. Results Monitoring and Evaluation The results monitoring framework will assess progress towards the PDO by means of key indicators that focus on setting up an efficient safety net system and provide income support to the poor. In addition, intermediate indicators will be used to monitor the progress of each component over the life of the project (see Annexes 1 and 3). The MIS and a rigorous monitoring and evaluation (M&E) system will enable the government and all partners to monitor progress on all indicators. The overall M&E system will be the responsibility of the M&E specialist working in the Unité de Gestion and will also benefit from technical support from the Institut National de la Statistique et de la Démographie (INSD). Monitoring will occur at each stage of the project’s implementation in order to provide a framework to learn lessons, to identify any potential problems and issues, and to promptly consider and adopt corrective measures and improve the design of the programs accordingly. Page 5 of 7 The project will conduct a midterm and an end-of-project evaluation. The evaluation activities will consist of: (i) a process evaluation to assess the effectiveness of the procedures involved in the Public Disclosure Copy implementation including the identification, targeting, registration, and payment of beneficiaries; (ii) a targeting evaluation to assess the extent of exclusion and inclusion errors; and (iii) a front-loaded evaluation of the impact of the program on changes in recipients’ behavior, levels of consumption, nutritional status, and poverty and vulnerability. The mid-term review (MTR) will be conducted (by an independently recruited firm) to ensure that the lessons learned in the implementation of the first cycle are taken into account for the second cycle. Small beneficiary surveys and spot checks will also be conducted at regular intervals to gather information on the performance, targeting, and payment procedures of the cash transfer program. C. Sustainability The proposed project is considered by the government and the Bank as the start of a larger and longer-term joint social protection initiative in Burkina Faso. In the discussions between the Bank, the government, and other donors, a consensus has emerged that this project can be a useful vehicle for longer-term government and donor collaboration on social protection. In addition, there is strong support for the project and the joint social protection program within the government of Burkina Faso, particularly in the Ministry of Economy and Finance (MEF) and MASSN. The government has committed to scaling-up the cash transfer program and using the administrative systems as part of their on-going reforms of the safety net system. Given that safety nets are a new undertaking in Burkina, the project will monitor the government’s continuing commitment, especially at the MTR, to the application of the administrative systems created to harmonize and improve the national safety net system. The project and resulting safety net program are financially sustainable within the scope of the government’s safety net budget. Cost calculations shows that the cost of a national cash transfer program that covers half of the chronically poor in Burkina Faso (15.3 percent of all households, 2.3 Public Disclosure Copy million people) would amount to around FCFA 44 billion or US$ 88 million or 0.78 percent of GDP per year including administrative costs (see Annex 6 for details). This amount is entirely feasible within the government’s safety net budget which currently amounts to about 1.3 percent of GDP including general subsidies (average between 2005 and 2009). As a comparator the estimated costs related to the 2012 food shortage issue (combined with the Malian crisis) was about over 2 percent of GDP (excluding subsidies for utilities). The total project costs are estimated to be FCFA 1.5 billion (US$50 million) over five years which includes some of the fixed costs related to setting up the program and tools. The fixed costs are an investment in the safety net systems of the country which are intended to contribute to breaking of the vicious cycle of intergenerational poverty, poor human capital outcomes, and low productivity of rural households. VI. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✖ Natural Habitats OP/BP 4.04 ✖ Forests OP/BP 4.36 ✖ Pest Management OP 4.09 ✖ Physical Cultural Resources OP/BP 4.11 ✖ Indigenous Peoples OP/BP 4.10 ✖ Page 6 of 7 Involuntary Resettlement OP/BP 4.12 ✖ Safety of Dams OP/BP 4.37 ✖ Public Disclosure Copy Projects on International Waterways OP/BP 7.50 ✖ Projects in Disputed Areas OP/BP 7.60 ✖ Comments (optional) VII. Contact point World Bank Contact: Azedine Ouerghi Title: Sector Leader Tel: 5331+3483 / Email: aouerghi@worldbank.org Borrower/Client/Recipient Name: Burkina Faso Contact: Title: Tel: Email: Implementing Agencies Name: Ministry of Social Action and National Solidarity Contact: Cyrille Ganou Title: Coordinator Tel: 226-50386331 Email: ganoucyrille@yahoo.fr Public Disclosure Copy VIII. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop Page 7 of 7