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Senegal: Selected Issues

Author(s):
International Monetary Fund. African Dept.
Published Date:
January 2015
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Social Safety Nets in Senegal1

While Senegal has been successful in decreasing poverty rates, the share of the population living below the poverty line and its exposure to shock remains high, emphasizing the need for safety nets. Such nets should be scalable to respond to transient needs while ensuring a minimum social protection for chronic poor and vulnerable populations. Strengthening social protection is high on the authorities’ reform agenda, including within the second pillar of the Plan Sénégal Emergent. This section reviews Senegal’s current state of social protection and reforms in progress, and outlines main strategies for the design of social security nets going forward.

1. Senegal has made progress in poverty alleviation, but the poverty incidence remains high, and households are vulnerable to shocks (Panel 1). In 2001-11 poverty rates declined by 8.5 percentage point, with the largest decreases observed in Dakar, but almost half of the population continues living below the poverty line. The poorest households are particularly vulnerable to idiosyncratic shocks, such as the loss of livestock or harvest, or exogenous shocks, e.g. to the prices of main imports, such as oil, rice and wheat. The majority of households do not have mechanisms to mitigate the impact of such shocks, resulting in households often tapping into savings and selling assets in response to shocks, with the risk of being locked into long-term poverty.

A. Government Response to Shocks and Existing Safety Nets in Senegal

2. Government’s response to exogenous shocks has included financial support to farmers, general assistance to the rural population, and subsidies(Figure 1). In response to droughts, the government has historically offered food and agricultural inputs, interest rate subsidies and debt forgiveness, while fuel and food price hikes have been countered by a series of fiscal measures, including subsidies on basic foodstuffs and energy such as gasoline, butane and electricity. Most of these measures are poorly targeted: Interest rate subsidies tend to benefit larger rural producers and those able to participate in the formal credit system. Subsidies in response to price hikes may be very expensive and may not reach the intended part of the population. For instance, such subsidies absorbed 2 ½ percent of GDP in 2008, while only 7 or 9 percent of water or electricity subsidies went to the poorest quintile, and urban dwellers accounted for the majority of beneficiaries.

Figure 1.Expenditures on Subsidies

Source: IMF staff and country authorities.

Figure 2.Senegal: Poverty, Shocks and Consumption

Source: ANSD (2013).

3. A review of social safety net programs identified a dozen programs in place in Senegal in 2011, often with national coverage. Box 1 summarizes the dozen social safety nets which were in place in 2011, covering, for instance, school lunches, food assistance, and support to the elderly and disabled, and two pilot cash transfer programs. Expenditures on these programs have averaged about 0.3 percent of GDP over 2008-2011, with school lunch programs accounting for over 70 percent of this spending, reflecting their large coverage. Between 64 and 99 percent of expenditures were dedicated to the cost of the transfers themselves, with the remainder covering administration, monitoring and evaluation. Eight programs had national or quasi-national coverage, but three of the newer programs intervened in more restricted areas: NETs in selected poor rural districts, WFP CV in selected urban areas, IPSEV in rural and semi-urban areas, and the PRP in the rural areas of only three regions.

4. However, the programs in place in 2011 were not sufficient to protect the poor or in adequately responding to shocks (Figure 3). In particular, at that time, programs suffered from the following problems:

Figure 3.Senegal: Spending on Social Security Nets in 2011

(in Percent of GDP, excl. subsidies)

Source: Word Bank 2014.

  • Coverage. Annually, almost one quarter of the population received some type of assistance. However, this number likely overestimated effective coverage of the poor, as recipients of food distribution and school lunches accounted for about 97 percent of beneficiaries, and neither of these two programs screened beneficiaries based on need.

  • Targeting. Predominantly categorical targeting was often reinforced by geographical prioritization or confirmed through community-based mechanisms. The performance of these targeting systems was mixed: Some programs were effective concentrating on the poorest households (PRN and agricultural support programs), others exhibited significant leakage. For example, the elderly health care program benefited mainly the better off 40 percent of households concentrated in urban households.

  • Impact. Actual spending per beneficiary showed wide variations between programs. The transfer programs NETS and PAM CV sought a meaningful impact within the tension of an affordable program able to scale-up, while the smallest costs per beneficiary were the school lunch program and the food distribution through the CSA. While coverage of CSA was large, its impact was likely to be limited, at a cost per beneficiary of 353 FCFA per year (Figure 4).

  • Coordination. Overall, safety net programs tended to be fragmented, lacking coordination, and not adapted to respond rapidly to shocks. Institutional anchorage of the programs was linked mainly to the individual program objectives and its target groups combined with institutional mandates instead of a coordinated strategy of interventions.

  • Monitoring. There was no standardized monitoring of program implementation across safety net interventions. With each program establishing its monitoring and evaluation plan and information often collected via program-specific information systems, a national perspective on coverage and impact of safety net programs was missing.

  • Funding. Safety net funding remained largely dependent on development partner financing.

Figure 4.Senegal: Cost per Beneficiary per Program

(In Thousands of CFAF)

Source: Word Bank 2014a.

Box 1.Senegal: Social Safety Programs in Senegal in 2011

In 2011, main benefits are carried out by way of monetary transfers, food aid and fee waivers for health services through programs in the following areas:

Food programs

  • Food Security Commissariat (Commissariat à la Securité Alimentaire, CSA): food aid for vulnerable populations in response to catastrophes or through rice distribution at public rallies and religious festivals.

  • National School Lunch Program (Programme d’alimentation scolaire - DCaS) provides school lunches funded through the national budget.

  • WFP School Lunch Program (PAM Cantines Scolaires) supports the national school lunch program by providing hot meals in pre- and primary schools located in rural and peri-urban vulnerable areas.

  • WFP Vouchers for Food Pilot Program (Bons d’Achat – PAM CV): addresses food insecurity among vulnerable households due to rising food prices.

Emergency fund

  • National Solidarity Fund (Fonds de Solidarité Nationale – FSN): provides immediate responses to crisis and emergency situations, including financial, medical and material support.

Support targeted at children

  • Pilot Cash Transfers for Child Nutrition Program (Nutrition ciblée sur l’enfant et transferts sociaux-NETS): cash grants to mothers of vulnerable children under 5 years old to mitigate the negative impacts of food price increases.

  • Educational Support for Vulnerable Children (Bourses d’étude pour les orphelins et autres enfants vulnérables – OEV): a program through the National HIV-AIDS Council to provide for schooling or professional training to children orphaned or affected by HIV-AIDS and other vulnerable children.

  • The Social Protection Initiative for Vulnerable Children (Initiative de protection sociale des enfants vulnérables – IPSEV): Cash grants to households to help them maintain vulnerable children and ensure access to health and education services.

Support targeted to other categorical groups

  • Community-based Re-adaptation Program (Programme de réadaptation à base communautaire – PRBC) provides social, economic and cultural integration for disabled persons via material support and funding of income generation activities.

  • Old Age Support Program (Projet d’appui à la promotion des aînés – PAPA) aims to address the vulnerable elderly via capacity strengthening, grants and subsidized loans for income generating activities to groups of elderly.

  • Sesame Plan (Plan Sésame) waives health service fees for all persons over 60 years.

  • Poverty Reduction Program (Programme d’appui à la mise en oeuvre de la Stratégie de Réduction de la Pauvreté – PRP) supports grants for income generating activities for vulnerable groups, primarily women, the disabled and HIV-AIDS affected populations.

B. Renewed Efforts to Establish an Effective National Social Protection System

5. Over recent years, the Government has taken important steps to set up new institutional arrangements and programs to strengthen Senegal’s social protection system:

  • Délégation Générale à la Protection Sociale et à la Solidarité Nationale (DGPSN). In 2012, the DGPSN was established to help define social protection policy, implement social protection programs, coordinate the National Social Protection Strategy, and participate in monitoring its implementation. To help it play its role of overall leadership and coordination of the social protection sector, an Inter-ministerial Steering Committee on Social Protection was established, which includes both civil society and development partners.

  • Inter-ministerial committee. The recently established framework includes an inter-ministerial committee responsible for overall decisions on the formulation of implementation of the country’s social protection strategy. In addition, a technical steering committee is being established to lead the efforts in terms of social safety nets implementation at a technical level.

  • Programme National de Bourses de Sécurité Familiale (PNBSF). The Government has launched the PNBSF, a Conditional Cash Transfer program which aims at providing support to the most vulnerable households and promoting investments in human capital on a national scale. The implementation of this program provides the basis for the definition of tools and instruments (for targeting, registry, payment and monitoring and evaluation) that can be used by other social safety nets in the country. Started in October 2013, the program is expected to reach 250,000 households by 2017.

  • Caisse Autonome de Protection Sociale Universelle, CAPSU. Work in progress also includes the setup of an Autonomous Social Protection Fund which would be responsible for organizing the financing of social protection activities, such as universal health coverage, the national conditional cash transfer program, and pensions for the elderly. The CAPSU, which is still in its conceptual phase, would be responsible for mobilizing resources from a variety of sources, such as individual premiums or contributions, government general resources, private sector resources, special taxes, and contributions from development partners.

C. Recommendations to Further Consolidate the National Social Protection System

The overall goal of the recommendations is to strengthen coordination between currently isolated programs, improve their targeting, increase their coverage, and more generally improve the ability of the national social protection system to effectively protect the most vulnerable and respond to shocks.

6. Build synergies between existing individual programs to progress towards a unified national safety net system. To move to a national safety net system would require building explicit synergies between currently isolated programs. This can be achieved by building links between programs that deliver different safety net functions. For example, households enrolled in cash transfer programs could be automatically eligible for health or education fee waivers or households participating in public works could be linked with income generating projects, microfinance or other asset building programs. Inter-operable management information systems across programs, as well as a central registry of vulnerable households, can provide an important platform to promote connections between programs.

7. Strengthen collaboration between agencies and other key players. Currently programs develop their own local coordination mechanisms, with multiple committees and consultation mechanisms—a common institutional platform would thus create synergies. Collaboration could also expand to other relevant sectors, such as health and education services, and natural disaster management. Harmonization with external partners, including international agencies and NGOs can be improved through central level coordination. The newly formed Délégation Générale à la Protection Sociale et à la Solidarité Nationale (DGPSN) and the Inter-Ministerial Committee for the National Social Protection Strategy have an important role to play to continue strengthening such collaboration.

8. Design a medium-term expenditure framework and integrate it into the budget process. Moving from an individual program approach to a national safety system will require developing an overall financial framework for the sector that prioritizes expenditures and builds a sustainable funding basis for safety nets. Such a framework would help translate a national safety strategy into public spending priorities within a multi-year macroeconomic and fiscal framework, which is integrated into the budget process. Central level coordination will help underpin the sustainability of the system. Furthermore, this effort can help rationalize existing programs – redesigning (better targeting, more efficient management, etc.) or eliminating the least effective ones.

9. Develop central monitoring and evaluation mechanisms that informs strategic decision-making and allows program evaluation. A key function of the DGPSN and Inter-Ministerial Committee is to promote the use of rigorous data on various programs to inform the design and implementation of programs and make it possible to demonstrate their impact to political decision-makers, development partners, and civil society, thus enhancing global knowledge of the social safety nets. To this end, it is important that each program develop its own management information system to monitor and evaluate its implementation. It is also critical that these program-specific MIS be inter-operable across programs, so that the coordinating agency can draw from these sources for its sector-wide analysis and facilitate targeting and coordination through a central registry of beneficiaries.

10. Improve targeting to reach the most vulnerable parts of the population. The targeting methodology adopted for the national Conditional Cash Transfer program relies on a combination of community-based targeting and the application of an objective proxy means test that combines information on household characteristics correlated with poverty and vulnerability to confirm their eligibility. In the coming years, it will be important to keep improving on the methodology as new data becomes available, and to ensure that all programs improve on their own targeting of households. The development of a unique registry with ample information on the most vulnerable households is an important step to help each program efficiently apply its own selection criteria without having to replicate the data collection effort.

11. Further strengthen the institutional framework. In the coming years, it is important for the DGPSN to develop its capacity to provide the leadership required for the coordination of the sector and the implementation of the national strategy. In the future, as cross-country evidence suggests that coordination and implementation of specific programs are often separated with maturing systems, the DGPSN could focus its efforts on the overall leadership of the sector and the implementation of the National Social Protection Strategy. It could thus oversee the management of the sector and monitor implementation and results; while the implementation of programs would remain the responsibility of sectoral institutions.

References

Prepared by Aline Coudouel and Monique Newiak, drawing on World Bank (2014a) and World Bank (2014b).

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