UNDAF - United Nations Development Group

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UNDAF - United Nations Development Group


    Republic of

    the Congo

    “a new deal that brings security, jobs and services to the Congolese people”




    8 Country Context

    A. Political Background 8 B. Economic Background 10 C. Social Background 12

    14 Key Challenges and Medium-Term Prospects

    A. Country Vision and Poverty Reduction Strategy Paper 14 B. Review of the PRSP Pillars 15 C. Medium-Term Macro-Economic Outlook 22

    23 Managing Risks

    A. Overall Approach 23 B. Seven Key Risks and the Corresponding Risk Management Strategies 23 C. Conclusion 27

     ANNEX I:


    28 I. Overview

    A. Background 28 B. Cross-Cutting Concerns 28

    29 II. Objectives

    A. Security Sector Reform 29 B. Enhancing Transparency 32 C. Strengthening Public Financial Management 33 D. Management of Natural Resources 34 E. Public Administration and Civil Service Reform 34 F. Local Governance and Decentralization 35 G. Investment Climate and Public Enterprise Reform 36

     ANNEX II:


    38 I. Overview

    A. Background 38 B. Strategic Objective 38 C. Overall Approach 39 D. Macroeconomic Framework and Assistance Needs 40

    41 II. Key Transversal Constraints and Priorities

    A. Transport 41 B. Business Environment 41

    42 III. Sources of Growth and Specific Priorities for External Support

    A. Agriculture 42 B. Mining 44 C. Industry and Services 48





    52 I. Overview

    A. Background 52

    B. Strategic Objective 53

    C. Overall Approach 53

    54 II. Specific Social Services and Priorities For External Support

    A. Education 55

    B. Health Sector 60

    C. Water and Sanitation 67

    71 III. A Key Transversal Priority Social Protection

     ANNEX IV:


    73 I. Overview

    A. Background 73

    B. Strategic Objective 73

    C. Overall Approach 74

     ANNEX V:



    78 I. Overview

    A. Background 78

    B. Strategic Objective 79

    C. Overall Approach 79

     ANNEX VI:







Publication Note: Two additional sections will be added to the CAFConsultations with Stakeholders and

    Management and Operational Modalities. The results of consultations with the private sector and civil society,

    which will be held in August 2007, will be added to the CAF as an annex. During the preparations for the

    Consultative Group, which is tentatively scheduled for October/November 2007, CAF donors, including the

    UN agencies, will be working with sectoral ministries to agree on management and operational modalities.

    Once decided, these will be added to the CAF an annex.



ABR Area Based Recovery

    ADB African Development Bank

    ART Anti Retro-Viral Treatment

    CAP Complementary Activity Package

    CDR Centrales de Distribution Régionales

    CEEC Centre d‘Evaluation, d‘Expertise et de Certification

    CENI La Commission Electorale Nationale Indépendante CFAA Country Financial Accountability Assessment CIDA Canadian International Development Agency CMFK Chemin de Fer du Katanga

    CNAEA Comité National d‘Action de l‘Eau et de l‘Assainissement

    COPIREP Comité de Pilotage de la Réforme des Entreprises Publiques

    CPRCD Commission Permanente de Reformes du Droit Congolais DDR Disarmament, Demobilization and Reintegration DfID Department for International Development DGI Direction Générale des Impôts

    DGRAD Direction Générale des Recettes Administratives et Domaniales

    EC European Commission

    EFA Education For All

    EITI Initiative pour la Transparence dans les Industries d‘Extraction

    EMIS Education Management Information System EPI Equipement de Protection Individuelle EPSP Enseignement Primaire, Secondaire et Professionnel FARDC Forces Armées Congolaises

    FDI Foreign Direct Investment

    FEC Fédération des Entreprises des Congo

    FEDECAME Fédération des Centrales de Distribution des Médicaments Essentiels

    GDP Gross National Product

    GER Gross Enrolment Rates

    GIBS Groupe Inter Bailleurs Santé

    HIMO Haute Intensité de Main-d'Oeuvre

    HIPC Heavily Indebted Poor Countries

    HMIS Health Management Information System HSSS Health Systems Strengthening Strategy IASC Inter-Agency Standing Committee

    ICAO International Civil Aviation Authority IGF Inspection Générale de Finances

    IMCI Integrated Management of Childhood Illness IMF International Monetary Fund

    INERA Institut de l'Environnement et de Recherches Agricoles ITM Institut Technique Médical

    LDF Local Development Fund

    LLIN Long Lasting Insecticide-Treated Mosquito Nets LNME Liste Nationale de Médicaments Essentiels MAP Minimum Activity Package

    MDG Millennium Development Goal

    MDRI Multilateral Debt Relief Initiative MDRP Multi-Country Demobilization and Reintegration Program MEG Médicaments Essentiels Génériques

    MIBA Minière de Bakwanga


    MTEF Medium Term Expenditure Framework NGO Non-Governmental Organization OCC Office Congolais de Control

    ODA Official Development Aid

    OFIDA Office des Douanes et Accises OHADA L'Organisation pour l'Harmonisation en Afrique du Droit des Affaires

    OMIKO Office des Mines d‘Or de Kilo-Moto

    ONATRA Office National de Transport PFM Public Financial Management

    PEP Post Exposure Prophylaxis

    PER Public Expenditure Reviews

    PETS Public Expenditure Tracking Surveys PHC Primary Health Care

    PLWHA People Living with HIV/AIDS

    PMTCT Prevention Mother to Child Transmission PNA Programme National Assainissement PNC Police Nationale Congolaise

    PPA Participatory Poverty Assessment PPP Public Private Partnership

    PRGF Poverty Reduction Growth Facility PRSP Poverty Reduction Strategy Paper REGIDESO Water Distribution Authority RVA Régie des Voies Aériennes

    RVF Régie des Voies Fluviales

    RVM Régie des Voies Maritimes

    SALW Small Arms and Light Weapons SEA Supervisuer de L‘Eau et d‘Assanissement

    SENASEM Service National des Semences SIDA Swedish International Development Agency SISA Système d‘Information Sécurité Alimentaire

    SMI Structure Militaire Intègre SMIG Salaire Minimum Garanti

    SMP Staff Monitored Programme

    SNCC Société National de Control de Congo SNEL Société National d'Electricitie SNHR Société National d'Hydraulique Rurale SRSS Système du Réseau de Soins de Santé STI Sexually Transmitted Infection SWAp Sector Wide Approach

    TVET Technical and Vocational Education Training UN United Nations

    UNDAF United Nations Development Assistance Framework

    USAID United States Agency for International Development

    VCT Voluntary Counseling and Testing WBG World Bank Group



    1 The Country Assistance Framework (CAF) is a process by which a number of donors have developed a common strategic approach for economic assistance to Democratic Republic of the Congo (DRC) in the post-elections period. The CAF is derived from the priorities articulated in the Poverty Reduction Strategy Paper (PRSP) and covers the period 2007 to 2010. It is expected that it will provide a solid basis for harmonizing approaches and programmes.

    2 The CAF is born from the recognition that the issue of aid harmonization is at the core of the recovery challenge in a country like DRC. Assistance to DRC is characterized by the paradoxical combination of a relatively large number of donors (with more than 20 agencies providing assistance, through a broad variety of operational partners, both governmental and non-governmental) and a relatively limited total amount of assistance (about US$800 million in annual disbursements). Aid is, however, inadequate given the scale of challenges that DRC faces (about US$15 per capita per year). This situation carries significant risks with regard to the actual capacity of aid agencies to effectively contribute to stability and recovery: (i) by absorbing limited Government capacities in the dialogue with a large number of partners; (ii) by making the achievement of synergies difficult, in a context where individual projects, even if each one is successful, may not be enough to yield an impact at the countrywide level; and (iii) by disconnecting economic assistance from other international efforts (political, security, humanitarian) and hence limiting its potential impact on the overall stabilization agenda.

    3 The CAF has generated intense interest among donors as an effort to coordinate and harmonize approaches. Starting from a small core group, participation has rapidly expanded to 17 members, including both multilateral organizations the World Bank Group (WBG), the European Commission (EC), the

    International Monetary Fund (IMF), the African Development Bank (ADB), and the United Nations (UN) system and key bilaterals: Belgium (Belgian Cooperation), Canada (Canadian International Development Agency, CIDA), France (French Cooperation), Germany, Japan, China, the Netherlands, Italy, Spain, Sweden (Swedish International Development Agency, SIDA), the United Kingdom (Department for International Development, DFID), and the United States (US Agency for International Development, USAID).

4 The CAF process aims to harmonize donor approaches and instruments at a minimum transaction cost.

    As in many harmonization efforts, the CAF challenge is to overcome bureaucratic complexities and differences of institutional cultures to reach a consensus around key priorities. Potential bureaucratic issues stem from the multiplicity of review and approval mechanisms across institutions, which can easily result in adding layers upon layers of complexity to any joint decision-making. Differences of institutional cultures are sometimes as basic as different meanings for what an assistance strategy is (e.g., for the World Bank Group it is essentially a set of decisions guiding the allocation of existing resources, while for the United Nations it is an effort aimed at mobilizing new financing which calls for different approaches). The CAF

    hence consists of a light and pragmatic process aimed at ensuring a consensus on the substance of the strategy, while leaving ample flexibility to each participant on process issues.

    5 The CAF has focused to date on building consensus around three key elements of any strategy: a joint diagnosis, coordinated programming, and a common results matrix. In practical terms, this has translated

    in the production of a series of ―joint chapters‖ that will be incorporated into each donor strategy. CAF donors have committed to incorporate these chapters verbatim in their respective strategies, although it is

    agreed that some participating agencies may add to these chapters complementary material (to meet their institutional requirements). The ―joint chapters‖ are: (i) country context; (ii) key challenges and medium-

    term prospects; (iii) risks; (iv) thematic annexes for each of the five PRSP pillars (Governance, Growth, Basic Social Services, HIV/AIDS, and Community Dynamics); and (v) a results matrix.


6 The CAF is an ongoing and complex process. To date, the work has proceeded through a series of several-

    day long meetings, interspaced with regular and intense consultations among donors in Kinshasa. Working groups have been put in place and have developed background papers. Discussions have been held to sort out differences of approaches. While challenging to manage, the process has been quite successful to date, in that participants have remained enthusiastic (with new participants joining in) despite the number of actors, institutional needs, and differences in operating modes, and in that a strong consensus has been forged on key pieces of the common diagnosis. The election of the new government has spurred consultations between the government and the donors and donor coordination has been added to the docket of the Ministry of Plan.

7 Looking forward, next steps in the donor harmonization process include:

; The finalization of “common chapters” and “common annexes” after in-depth consultations with the


; The organization of a joint consultation process with the new authorities and other stakeholders, through

    the annual Consultative Group Meeting. This meeting is planned for October/November 2007 and is

    scheduled to be held in Paris, France. This will be a complex process (in particular due to the number of

    donors involved), which has to be carefully coordinated and creatively planned if it is to be successful.

; Discussions regarding joint mechanisms for managing project implementation (a joint monitoring and

    evaluation matrix) and discussions on the most effective way for further harmonization of donors in

    DRC and the strengthening of the Government‘s own coordination capacities.



    in March between Senator Bemba‘s guards and government forces. While a major reversal of the achievements of recent years seems unlikely, major challenges remain ahead. Efforts will be needed to prevent the disenfranchisement of key constituencies and political leaders. Regional differences may have been crystallized by the elections process, including between the Western and Eastern parts of the country. Violence that still affects several districts along the Eastern borders, including widespread human rights abuses, will need to be contained to avoid its spreading to neighboring countries, and eventually reduced. The demobilization and reintegration of former combatants, the unification of all armed forces, through the integration of the Government‘s and rebel armed forces into a restructured national military will be key to restoring stability throughout the country.

    6. Overall, the political context is fluid, and external partners will need to monitor the situation closely, to best adjust their programmes to the evolving circumstances. The elections have transformed the

    environment in which assistance will be provided in many ways, but the new political landscape is only starting to take shape. For donors, the key issue is whether the new political context will be one where ambitious reforms can be implemented or not. In this context, donors will pay particular attention to

    monitoring developments in the following four areas:

; First, the Government’s commitment to reforms. Both the President and the Prime Minister have

    emphasized the importance of good governance since the elections. In February 2007, the Prime Minister

    prepared and presented a government programme to Parliament which included a Governance Contract

    between the authorities and the people of DRC. This contract, which covers MarchDecember 2007, is

    an important first step in outlining much-needed reforms in a broad range of areas: security sector reform,

    transparency, public finance management, the management of natural resources, public administration

    reform, local government, and the investment climate and public enterprise reform. The key challenge

    will be to implement this ambitious programme a task for which a substantial amount of external

    support will be necessary. In its first few months in office, the Government took important steps towards

    the implementation of the Contract, in particular in the area of decentralization, but much remains to be


; Second, the effectiveness of the decision-making structure. The years of transition have been marked by

    complex decision-making arrangements. While this has facilitated consensus around key decisions, it has

    also translated into delays and second-best compromises. The challenge will be to find ways to

    strengthen the decision-making process, without losing the ability to reach broad support on key


; Third, the Government’s actual authority over specific constituencies. The issue is whether the

    Government will be in a position to break with the constant need for compromises that has characterized

    the last years and to take on powerful constituencies which may have vested interests in the status quo.

; And fourth, the role of the opposition. As the political environment develops, the constitution of

    political alliances (or the permanence of divisions) between opposition groups, and their commitment to

    due process (e.g., challenging the Government in Parliament rather than in the streets), will be key

    factors to watch. The March 2007 clashes in Kinshasa are evidence that the social situation remains tense

    in many parts of the country and the need for the Government to deliver ―peace dividends‖ is critical.

    Particular attention will also be needed to ensure the stability of those areas which voted massively for

    the opposition. In addition, it will be important to watch the ways in which the necessary political

    environment created by the Government fosters engagement with the opposition in the nascent

    democracy. In both the short and medium-terms, it will be necessary to review the way in which the

    opposition functions, the space they have to operate, and the relationship they have with government.


B. Economic Background

    7. DRC is one of the poorest countries in the world, with a Gross Domestic Product (GDP) per capita at about US$120 in 2005. Despite its rich endowments in natural resources and the dynamism and

    entrepreneurship of its population, DRC has been affected by a series of economic crises since independence, which were exasperated during the years of conflict. GDP per capita dropped from US$380 in 1960 to US$224 in 1990 to the current US$120 (in constant dollars).

    8 The decade of conflict, compounded by the legacy of sustained mismanagement, has had devastating effects. Prior to the conflict, the Congolese economy was dominated by extractive and export activities (mining, agriculture, forestry, energy), which fueled a system of poor governance and large-scale corruption. The vast majority of the population remained poor, and derived its income from traditional agriculture and informal activities. In this context, war and civil disturbance have taken a high toll on the country. Infrastructure has suffered from lack of maintenance and considerable physical damage. Many institutions are in shambles. Millions of people have lost their assets whether buildings, livestock, or tools. Many

    enterprises have lost assets, staff, and commercial networks. Overall, the economy has been transformed, and is now centered on subsistence agriculture and informal activities, with a collapse of export and value-adding activities.

    9 Since April 2001, the Government has implemented a solid programme of economic reforms, supported by the Bretton Woods Institutions. This programme aims both to spur private-led economic growth and to

    tackle some of the deep-rooted structural issues which have hampered DRC‘s economic development in the past. International Monetary Fund (IMF) support was provided through a Staff Monitored Programme (SMP), between June 2001 and April 2002, access to the Poverty Reduction and Growth Facility (PRGF) for the period July 2002 to June 2006, and a new SMP between June and December 2006; Bank support was provided through a series of budget support and investment operations, as well as substantial analytical work and policy advice.

    10 Overall, implementation was satisfactory until about mid-2005, but gradually deteriorated as elections neared. Four periods can be distinguished:

; Throughout 2001, vigorous measures were taken to break hyper-inflation, stabilize the exchange rate

    (following the decision to float the Congolese Franc in April 2001), restart collecting revenues and

    launch key structural reforms.

; From early 2002 to mid-2005, efforts succeeded in further stabilizing the macro-economic situation

    with 12-month inflation at about 12 percent, a relatively stable exchange (although with substantial

    short-term fluctuations, in a largely dollarized economy, where the monetary basis is very small), and a

    gradual increase of fiscal revenues from about 5.9 percent of GDP in 2001 to about 11.4 percent of GDP

    in 2005. Parallel efforts were made on the structural side, with significant achievements in a broad range

    of areas including the strengthening of the chain of expenditure, the adoption of new investment, mining,

    and forestry codes, the completion of audits of public enterprises, etc.

; From mid-2005 to end-2006, performance deteriorated, largely as a result of political uncertainties and

    the absence of a functioning executive during the election period. End of year inflation reached 21.3

    percent at the end of 2005, and declined slightly to 18.2 percent at the end of 2006. The Congolese Franc

    registered a 17 percent depreciation during 2006. Still, significant efforts were made by the authorities to

    manage this difficult period, including enforcing a moratorium on key transactions by public companies.

; The new Government is in discussions to agree on new targets for the Staff Monitored Programme after

    the March 2007 review found that most quantitative and structural benchmarks for April-December 2006

    were not met. The new SMP offers the Government an opportunity to demonstrate its determination to


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