World Bank has approved $90 million Structural Adjustment Credit-II (SAC) for North West Frontier Province (NWFP) to undertake wider provincial reforms.
This credit would focus on fiscal and financial management, service delivery improvement, governance and civil service, private sector development and growth oriented reforms
The Structural Adjustment Credit is the second of a series of credits that will support the next phase of the provincial government's medium-term reforms programme.
This credit is in sync with the country's Poverty Reduction Strategy and the World Bank's Country Assistance Strategy.
The credit will support reforms along four main pillars:
Fiscal and Financial Management Reforms: The key areas of fiscal reforms will be to enhance revenues, prioritise expenditures and improve expenditure management, improving budget preparation, execution, and oversight, and strengthening fiscal devolution.
Service Delivery Improvement Reforms: The major thrust is to improve the delivery of basic public services to reduce poverty. The government's medium-term objectives in education are to improve primary education in both enrolment and quality of instruction; to reduce gender and rural-urban disparities; and expand the capacity at the secondary school level. The objective in the health sector is to significantly improve health indicators over the medium-term through improvement in the management structure; reorganising health facilities, with a multi-level referral system; focus on preventive and primary health care; and increase in budgetary allocations.
Governance and Civil Service Reforms: The objectives of these reforms are to increase the efficiency and effectiveness of government operations, including the delivery of public services, raise the level of competence and integrity of government officials, and make them more accountable. The government's strategy to achieve these objectives is to fully implement the devolution of power, decentralise the functions and operations and contain the size of the civil service.
Private Sector Development and Growth Oriented Reforms: The Provincial Reforms Programme recognises that the incidence of poverty and vulnerability of the poor can only be reduced with sustained, broad-based economic growth, generated and sustained by the private sector. The province has therefore developed strategies to improve the business environment; enhance productivity of agriculture; reduce the role of the public sector in commercial and industrial activities, and promote public-private partnerships. Reforms to improve the efficiency of the province's infrastructure, including irrigation facilities, road and urban infrastructure and services; and environmental protection would also support the growth process.
"The Government of NWFP embarked upon a comprehensive fiscal and economic reform programme, and the approval of this credit bears witness to the fact that the province has built a credible track record on reforms implementation," said John Wall, World Bank's Country Director for Pakistan. "The improvement in the delivery of basic services like education and health will surely help reduce poverty in this province, which has so much potential to improve its human and social indicators."
The $90 million interest-free credit, from the International Development Association (IDA), the World Bank's concessionary lending arm, has a 35-year maturity, a 10-year grace period, and a 0.75 percent service charge.