Burkina Faso Establishes a Second Generation Road Fund

June 27, 2007

The Council of Ministers of Burkina Faso adopted the decree for the establishment of a second generation Road Fund on June 27th. SSATP is ready to provide further support to firm up the implementation plan leading to an operational road fund by the current calendar year.

Over the past 40 years, Burkina Faso implemented three financing mechanisms for road maintenance.

• The first financing mechanism was a first generation road fund which was established during 1968-1992 period. This fund was not a separated entity as such but a national budget line item managed by the sector ministry concerned. This budget line was intended to be dedicated to the funding of road maintenance (Special Treasury Account). The performance of this fund was quite poor. Some of the common problems were: the total budget was never transferred into the special account; poor financial management; absence of independent audits; extensive use of funds for unauthorised expenditures; diversion of funds; and weak oversight.
  
• The second financing mechanism was established during the Transport Sector Adjustment Program. This mechanism was built around the concept of a revolving fund (Cash account mechanism) or Regie d’Avance. The money is made available in the account twice a year in January and June. This mechanism has considerably improved road maintenance in Burkina Faso. To comply with the budgetary discipline of fiscal flexibility, the government decided to dismantle the mechanism in 2001.
  
• Road maintenance is currently financed through the national budget using the executing procedures (Circuit Informatisé de la Dépense).This mechanism has experienced the same shortfalls as the first generation road funds. The time gap between the budget and the maintenance cycles is 9 months and the delays in paying contractors bills have reached 12 months. 

Support to the establishment of a second generation road fund

SSATP has engaged in a policy dialogue with the Government of Burkina Faso for the establishment of a second generation road fund since 2005. Over the last two years, SSATP has undertaken joint missions with the World Bank to sensitise the key stakeholders on the need and the benefits of establishing a sustainable financing mechanism for road maintenance works. SSATP held various meetings with the Ministers of Finance and of Infrastructure, the donors community (AfDB, EU, MCA and BOAD) and the Regional Economic Community (UMEOA). The SSATP team has also made a critical presentation to the Director of Budget to discuss in details the criteria of second generation road funds. SSATP has also reviewed the study on the establishment of a road fund and provided valuable comments and suggestions on the draft legislation.

Stakeholder’s workshop on the road fund

In June 2007, the SSATP team was invited to participate to a stakeholder’s workshop to discuss the draft bill establishing the road fund. The workshop attracted around 100 participants representing transport sector institutions and organizations; Ministries of Finance and Commerce, Civil Society, representatives of municipalities. The transport sector program coordinator who is also the SSATP National Coordinator participated in the workshop. The Minister of Budget opened the workshop and invited participants to discuss the decree before its final submission for approval by the Government. SSATP contributed to the workshop by sharing a presentation based on the experience gained in monitoring the establishment and performance of 26 road funds in SSA. A member of the Committee for the establishment of the road fund presented the draft bill and its status. The draft documents generated an intense debate on the composition of the road fund board, the designation of its chairperson, the eligibility of the expenditure and the collection mechanism of road tolls, the organization structure and the opportunity of having the technical department. Following the discussions, the following was agreed:

• Five out of a total of nine board members will represent the civil society, the private sector and the road users;
• The Chairperson will be designated by his/her pairs and appointed by the Parent Ministry;
• The organization structure of the road fund will include a technical department;
• To maintain the current collection mechanism of road tolls on a temporary basis and to provide legal ground for the private sector to manage road tolls in the legislation.

SSATP met with the committee for the establishment of the road fund and revised the draft legislation in line with the recommendations of the workshop. Further support could also be provided by the African Road Maintenance Funds Association, ARMFA ( www.armfa.org).