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Second Economic Rehabilitation and Recovery Programme (ERRL II)

PN10072 | Project Completion Report Review Note | 19-Mar-2006

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1) Countries emerging from conflict situations may not have requisite capacities to undertake recommended reforms within given time horizons, which may be unrealistic or overly ambitious timeframes within which to implement reforms. Based on this experience, the emerging lesson is that civil service reforms and privatization are of secondary importance in post-conflict countries, where the utmost priority is placed on consolidating peace, resettling people, revitalizing the economy, rehabilitating infrastructure and restoring basic services

2) The second lesson stresses the need to set a few critical conditions precedent to tranche releases in order to ensure effective program implementation; the program under review had 11 conditions, 7 of which were linked to the first tranche and 4 to the second tranche

3) Another lesson learned is that due attention should be accorded to the likely conflict between macroeconomic stabilization (with its implicit need to control inflationary pressures) and the need for accelerated public expenditure on priority areas related to peace consolidation and resettlement programs. Macroeconomic stabilization in most cases has severe implications on poverty-related expenditures and rural development; this was evident in ERRL II in the Government’s failure to attain the budgetary expenditure targets on primary education and health

4) The ERRL II involved 7 conditions precedent to the release of the first tranche, and four conditions precedent to the release of the second tranche. The conditions covered various areas related to management and monitoring of the ADF special account, reforms related to privatization and divestiture policy, undertaking audit of specific ministries, undertaking of Public Expenditure Tracking Survey (PETS), control and management of public financing, public revenue management, budgetary reforms, debt management. The lesson learnt here is that it is necessary to avoid setting too many conditions, and to limit the number of conditions to a few critically important strategic conditions that are supportive of the Bank Group strategy in the country


Sierra Leone

Summary Report PN10072_SR_EN PN10072_SR_EN.pdf