Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Report Number : ICRR0020726 1. Project Data Country Practice Area(Lead) Burkina Faso Macro Economics & Fiscal Management Programmatic DPL Planned Operations: 4 Approved Operations: 4 Operation ID Operation Name P126207 First Growth and Competitiveness Credit L/C/TF Number(s) Closing Date (Original) Total Financing (USD) IDA-H6820,IDA-H7850 31-Dec-2012 90,000,000.00 Bank Approval Date Closing Date (Actual) 26-Jun-2012 31-Dec-2012 IBRD/IDA (USD) Co-financing (USD) Original Commitment 90,000,000.00 0.00 Revised Commitment 90,000,000.00 0.00 Actual 89,371,454.54 0.00 Prepared by Reviewed by ICR Review Coordinator Group Mauricio Carrizosa Clay Wescott Malathi S. Jayawickrama IEGEC (Unit 1) PHPROJECTDATATBL Operation ID Operation Name P132210 BFGrowth and Comptitiveness Grant 2 ( P132210 ) Page 1 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) L/C/TF Number(s) Closing Date (Original) Total Financing (USD) IDA-H7850,IDA-H8300 31-Dec-2013 70,000,000.00 Bank Approval Date Closing Date (Actual) 21-Mar-2013 31-Dec-2013 IBRD/IDA (USD) Co-financing (USD) Original Commitment 70,000,000.00 0.00 Revised Commitment 70,000,000.00 0.00 Actual 70,479,885.23 0.00 PHPROJECTDATATBL Operation ID Operation Name P146640 BF - DPO - Growth and Compet. Credit 3 ( P146640 ) L/C/TF Number(s) Closing Date (Original) Total Financing (USD) IDA-53270,IDA-H8300,IDA-H8950 30-Jun-2014 100,000,000.00 Bank Approval Date Closing Date (Actual) 05-Dec-2013 30-Jun-2014 IBRD/IDA (USD) Co-financing (USD) Original Commitment 100,000,000.00 0.00 Revised Commitment 100,000,000.00 0.00 Actual 100,266,325.44 0.00 PHPROJECTDATATBL Operation ID Operation Name P151275 BF - DPO - Growth and Compet. Credit 4 ( P151275 ) Page 2 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) L/C/TF Number(s) Closing Date (Original) Total Financing (USD) IDA-53270,IDA-56090,IDA-D0440,IDA- 31-Dec-2015 100,000,000.00 H8950 Bank Approval Date Closing Date (Actual) 02-Apr-2015 31-Dec-2015 IBRD/IDA (USD) Co-financing (USD) Original Commitment 100,000,000.00 0.00 Revised Commitment 99,999,655.76 0.00 Actual 99,019,090.42 0.00 2. Program Objectives and Policy Areas a. Objectives The program documents (PDs) for the first three development policy operations (DPOs) articulated the program development objective (PDO) as follows (DPO3): “to catalyze private-sector growth and employment creation, improve governance and enhance public-resource management, build economic resilience and reduce vulnerability to shocks.” The fourth and last DPO of the series (DPO4) articulated the PDO as “to enhance the Government’s ability to: (a) reduce costs in the agriculture and transport sectors; (b) improve transparency and accountability in public resource mobilization and management; and (c) reduce vulnerability to shocks. This report assesses the efficacy of DPO4 objectives, as they are more consistent with the outcomes and indicators in the results framework, as follows: Objective 1: enhance the Government’s ability to reduce costs in the agriculture and transport sectors; Objective 2: enhance the Government’s ability to improve transparency and accountability in public resource mobilization and management; and Objective 3: enhance the Government’s ability to reduce vulnerability to shocks. b. Pillars/Policy Areas The Program supported policies under three pillars as follows (Bolded policies were removed from the program before DPO4): Pillar I: Reduce costs in the agriculture and transport sectors a. Agriculture. New price smoothing formula for cotton prices paid to farmers through the Cotton Price Stabilization Fund; creation and capitalization of an input fund to finance cotton farmer purchases of inputs; reduction of government ownership of cotton ginning company (SOFITEX) to minority shareholding; Page 3 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) and piloting of private sector-operated open markets for the sale of fertilizer and other inputs to farmers. b. Transportation. Reforms of customs administration (clearance procedures) and trucking (elimination of caps on cargo loads and truckers’ revenues (tour de role), guarantee fund for credit to truckers, exemption of value-added tax and customs fees on truck imports renewal and licensing truck operators). Pillar II: Improve transparency and accountability in public resource mobilization and management a. Mining. Reporting, publication, and collection of mining revenues, including disclosure of a detailed Extractive Industries Transparency Initiative (EITI) report with information on mining revenues; and draft mining code reforms to create a local development fund for regions and communities where mining companies operate. b. Judicial Reform. Legislation to develop mediation as a dispute resolution mechanism; collection and publication of court performance statistics, and other measures to reduce commercial case backlog and access; stronger penalization of corrupt practices, monitoring of corruption trends and evaluation of anti- corruption efforts; asset declaration by government officials, obligations under the United Nations’ convention against corruption; and reforms of the High Judicial Council (the body responsible for the appointment, assignment, promotion and discipline of justice magistrates and for approving nominations of members of the Court of Accounts, the external audit institution). c. Public Financial Management (PFM). Decentralization of expenditure management to line ministries; compliance with Union Economique et Monétaire Ouest Africaine Public financial management (PFM) directives; procurement (prior review thresholds); and staffing of the external audit institution (Court of Accounts). Pillar III: Reduce Vulnerability to Shocks a. Decentralized social-service provision. Reform of the legal framework for decentralization and increased fiscal transfers to local communities, including allocation of mining revenues to communities where mining companies operate. b. Food Security. Reforms of institutional arrangements for food security and increases in food stocks. c. Microfinance: Development of a 2012-16 strategy and scaling up of the Fund for Women’s Income- Generating Activities. c. Comments on Program Cost, Financing, and Dates DPO1 (IDA grant of $90.0 million equivalent) was approved by the Board on June 26, 2012, declared effective on September 12, 2012, and closed as scheduled on December 31, 2012. DPO2 (IDA grant of $70 million equivalent), was approved on March 21, 2013, declared effective on September 11, 2013, and closed as expected on December 31, 2013. DPO3 (IDA development policy credit of $50 million equivalent and an Page 4 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) IDA grant of $50 million equivalent) was approved on December 5, 2013, declared effective on December 20, 2013, and closed as expected on July 30, 2014. DPO4 (IDA development policy credit of $50 million equivalent and an IDA grant of $50 million equivalent) was approved on April 2, 2015, declared effective on July 31, 2015, and closed as expected on December 31, 2015. 3. Relevance of Objectives & Design a. Relevance of Objectives The PDO addressed relevant country conditions. Burkina Faso had (i) high agricultural input costs due to high input prices on the small quantities that Burkina Faso purchased and weak competition among input suppliers; and high transport costs from ports in Ghana, Togo, and Cote D’Ivoire due to several factors including freight allocation quotas to coastal country fleets, poor service quality and monopoly pricing by trucking companies, and high customs clearance costs at Burkina Faso’s clearance yard. (ii) Public resource mobilization and management issues included the high fiscal costs of subsidies to the cotton sector; revenue constraints due to fiscal exemptions and incentives under the mining code, weak controls of mining revenues due to inadequate technical capacity and coordination between the mining and finance ministries, gaps in transparency of mining revenues, excessive ex-ante controls on execution of investment budgets, weaknesses in judicial processes, and persistent corruption in the public administration. The country also faced (iii) high vulnerability to shocks due to weak local services and low access to credit, which undermine resilience, and weak food security, which raises risks of famine. Objectives were also relevant to Government and WBG strategies. The Government sought to improve agricultural input markets, transparency of mining revenues, the functioning of the justice sector and anticorruption tools, PFM systems, the system of transfers for decentralized service provision, access of women to microfinance and oversight of microfinance institutions; and the response capacity of the food security system in impoverished and vulnerable areas. The WBG focused on growth, social services, and vulnerabilities. The original objectives were appropriately ambitious for a two and a half year program. DPO 4 had less ambitious objectives, given the deterioration in program performance and as the WBG reconsidered what could be achieved in the context of limited capacity and political transition (PD DPO4, para. 4.4). Rating Substantial b. Relevance of Design The results chain was clearer or more convincing on public resource mobilization/management and on vulnerability to shocks than on input costs in agriculture and transport. With regard to input costs, actions in agriculture (for example, on the cotton price stabilization and input funds) did not address the constraints to competition and productivity that may raise costs. An action on transport (lower value-added and import taxes Page 5 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) on trucks) could lower transport costs. However, another action (licensing of truck operators) could increase costs by reducing competition. Easier customs clearance procedures would lower transport costs imposed by the Government. Public resource mobilization would likely benefit from the removal of mining tax incentives under an intended new mining code. However, benefits were unlikely to materialize during the program due to risks of delays in approval and implementation of the code. While public resource management could benefit from the transfer of resources to local communities that improves allocation to local needs, it could also be undermined by the relatively lower capacity and control mechanisms at the local level. Higher thresholds for strong procurement methods and prior reviews could help accelerate execution of investment budgets, with new financial controllers safeguarding against misprocurement risks. Increased external audit capacity could help deter mismanagement. Regarding vulnerability to shocks, the program supported measures to decentralize resources targeted delivery of social services at the local level, without a specific strategy to address vulnerability issues through such decentralization. It is unclear that local resource management reduces vulnerabilities better than central resource management, particularly given local capacity constraints, which the program did not address, and fiscal vulnerabilities (e.g. available funding for food stocks), which higher intergovernmental transfers could accentuate. Measures to raise access to micro credit were more convincing from a vulnerability perspective. Increased credit access could improve resilience by helping capitalize small businesses, raise and diversify local incomes and help during periods of vulnerability (Para 5.1 DPO4). Measures to stock food warehouses would most specifically reduce vulnerability, by improving food security. The 30-month, 4-DPO series was appropriate for a program that sought the welfare objectives it articulated. However, some actions/triggers were programmed too late to ensure impact within the life of the program. Initial submission of a mining code by DPO3 and of anticorruption legislation by DPO4 exposed the series to the risk of controversial legislative initiatives. Furthermore, as the ICR notes (para. 25), it is unclear that design was sufficiently cohesive to generate synergies that helped to implement the program. The Program identified four broad sources of risks: macroeconomic shocks (international commodity prices, exchange rate peg to the Euro, availability of foreign aid, pressures on public expenditure), political economy developments (domestic unrest, conflict in Mali, commitment to difficult reforms), adverse weather (primarily affecting cotton production) and inadequate capacity (particularly at the local level). Furthermore, the program articulated how its reforms could mitigate the risks (e.g., mining reforms that help increase tax revenues and thus address macroeconomic shocks). However, this line of argument is somewhat circular. As program reforms are subject to the risks outlined above, their availability as mitigation measures against shocks appears questionable. For example, as mining code reform faced risks of not being approved, its availability as a mitigation measure against macro shocks would itself be subject to risk. The macroeconomic framework at appraisal was adequate (International Monetary Fund [IMF] Country Report 12/159). The authorities had implemented adjustment measures to accommodate additional expenditures to handle food shortages arising from the 2011 drought and the influx of refugees from Mali. Performance under the Three-Year Arrangement with the IMF was strong, and the Government’s program provided a good platform for sound macroeconomic policy. External financing needs were expected to be covered by donor Page 6 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) inflows and concessional finance. Nevertheless, over the medium term, WBG projections pointed to a high risk of debt distress in relation to exports (PD of DPO1, para. 2.19). Rating Modest 4. Achievement of Objectives (Efficacy) PHEFFICACYTBL Objective 1 Objective Objective 1: Enhance the Government’s ability to reduce costs in the agriculture and transport sectors Rationale The ICR did not provide robust evidence that this objective was achieved. With respect to agriculture, the ICR notes that cotton yields increased from 2011 to 2014 (ICR Box 1, p 17), but does not provide evidence that such an increase was linked to the Program’s reforms. The target to capitalize the Cotton Price Stabilization Fund from CFAF 0 billion to CFAF 6 billion was exceeded (at CFAF 7 billion in 2015), but such a fund smooths prices received by cotton farmers and paid by ginning companies; it has no bearing on cotton input costs. The target to capitalize the input fund (CFAF 10 billion), which only became operational at the end of the program and for the 2015-16 crop season (ICR, p. 43), was also achieved (at CFAF 10 billion in 2015), but such fund guarantees commercial loans to the cotton sector; it does not reduce cotton input costs. The task team indicated that the input fund would help purchase inputs at lower prices, but there is no evidence of this thus far. Both funds provided implicit subsidies to the sector, as both have needed replenishments (IMF Country Report 17/222, p. 31). For example, by 2016, the balance at the Cotton Price Stabilization Fund was down to CFAF 2 billion (IMF Country Report 16/390, p. 74). The target to increase private sector distribution of fertilizer to the private sector from 0 to 30,000 tons was not achieved (at 820 tons) due to inadequate transport logistics and storage facilities. With respect to transport, the program reduced customs clearance times from a 2011 baseline of four days to 1 day (2015), surpassing the target of 2 days, but the ICR did not quantify the cost impact of such a reduction. The truck licensing target (increase of 10 percent in licensed truck drivers) was not achieved (at 0%) as the legal framework for such licensing was not completed. The ICR did not provide evidence on the impact of lower import taxes on the truck fleet or its technical efficiency. The task team indicated that such exemptions had been used primarily to import transport equipment for the mining sector. Rating Modest PHREVDELTBL PHEFFICACYTBL Page 7 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Objective 2 Objective Objective 2: Enhance the Government’s ability to improve transparency and accountability in public resource mobilization and management Rationale There were only limited achievements in the selected areas that the program targeted, which covered mining, the judicial sector, corruption and investment budget execution and procurement. On mining, revenues increased from a 2011 baseline of 1.8 percent of GDP to 2.4 percent (2015), below the target of 4.0 percent. This performance was primarily due to developments in the gold market, and not to program policies, as approval of the mining code reform that abolished a 10 percent tax break on mining company profits (and required firms to pay into a local development fund, see Section 2b) materialized only in 2015 (ICR, para. 22; IMF 1216 p. 50), at the end of the program. Better reporting of mining revenues is reflected in the number of mining companies submitting validated data for EITI reports, which increased from a 2011 baseline of 0 to 18 (2015), well above the target of 6. However, the ICR did not assess the possible impact of this, together with the possible effect of the prior action to achieve better coordination between the Ministries of Mining and Finance (through reporting of consolidated monthly data), on mobilizing mining revenues. Program indicators point to some progress on judicial sector performance, although it is unlikely that such progress can be attributed to the Program. The time required to obtain a court ruling declined from a 2011 baseline of 730 days to 120 days (2015), surpassing the target of 584 days. The percent of judgments written down (i.e., recorded) in commercial courts increased from the 2011 baseline of 64.0 percent to 96.3 percent (2015), well above the target of 75 percent. But the time needed to enforce contracts remained unchanged at 446 days, below the target of 372 days. These indicators were intended to reflect possible improvements in court performance through measures to reduce the backlog of commercial cases and an increased use of mediation as an alternative dispute resolution mechanism. The ICR reports that only 17 mediation cases occurred before DPO4 dropped this indicator (ICR, para 43), for which the Program targeted a 50 percent increase over the 2011 baseline of 28. Other measures to reduce backlogs were not identified or did not materialize. Accordingly, observed improvements in court performance cannot be linked to reforms under the Program. Another action to improve judicial performance was an increase in the number of elected members of the High Judicial Council (the body responsible for the appointment, assignment, promotion and discipline of justice magistrates and for approving nominations for members of the Court of Accounts, the external audit institution). Under the program, the number of elected members per grade increased from the 2011 baseline of 2 to the target of 3 (2015). However, these members will engage only after a transition period to allow the current members to complete their term. Their effectiveness could be constrained by low compensation levels (ICR, para.41). Accordingly, it is unlikely that this measure had an impact during the program. There was little, if any, improvement in resource management from reducing corruption, as progress on the program’s measures to combat corruption was delayed. Burkina Faso’s Transparency International Perceptions Index remained at the 2011 baseline of 38/100. Parliament passed the intended anti-corruption law only in 2015, as the program ended. Page 8 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) The Program achieved an improvement in investment budget execution rates, from the 2011 baseline of 30 percent to 61.2 percent (2015), surpassing the target increase of 50.0 percent. Devolution of expenditure management to line ministries and increased thresholds for procurement methods and prior review may have contributed to this achievement. An increase in the number of physical spot checks of contracts subject to competitive bidding from the 2011 baseline of 200 to the target of 350 may have improved procurement under competitive bidding. Despite the limited progress outlined above, broad governance and public-sector management capacity deteriorated slightly during the program. As the ICR indicates (para. 51), the CPIA score for public sector management and institutions declined from 3.7/6.0 in 2011 to 3.5/6.0 in 2014 and 2015. Rating Modest PHREVDELTBL PHEFFICACYTBL Objective 3 Objective Objective 3: Enhance the Government’s ability to reduce vulnerability to shocks Rationale The program focused on intergovernmental transfers, micro credit, and food stocks as means to reduce vulnerability. Transfers to local governments increased from the 2011 baseline of 3.7 percent of the national budget to 5.6 percent in 2014 (above the target of 5.0 percent), but declined to 4.2 percent in 2015 (below the target) because of the political instability, and of the shortfalls in public revenues following the decline in gold and cotton prices in 2015. The ICR suggests that the higher transfers may have reduced vulnerability through better access to primary education, health, and access to clean water, although attribution remains difficult. Resource transfers however may face greater vulnerabilities linked to the central government (e.g., available funding for disaster relief). The number of microfinance borrowers increased from the 2011 revised baseline of 79,937 to 119.416 in 2014, above the target of 87,931 and lending to women in 2015 (CFAF 8.1 billion) exceeded the target of CFAF 5.0 billion (no baseline available). The program also achieved the target of making Annual Financial Reporting Sheets of microfinance institutions available each year no later than July. Nevertheless, the ICR was unable to provide robust indicators of the possible impact of enhanced microfinance on vulnerability (e.g., the dropped indicator of the increase in the number of women-owned businesses or an indicator on incomes). It did not report on the target that the Support Fund for women's income-generating activities (FAARF) reach more than 80,000 beneficiaries. Furthermore, by focusing on absolute numbers of borrowers (as opposed to the share of populations covered), these indicators did not adequately measure access to credit. Food reserves increased from the 2011 baseline of 35,000 tons to 59,000 tons in 2015 (above the 50,000 target), but declined in 2015 to 31,400 (below the target). The emergency food stock increased from the 2011 baseline of 5,000 to 10,972 (2015), below the target of 25,000 tons. Overall, the program was only partially successful in enhancing protection against shocks. Page 9 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Rating Modest PHREVDELTBL PHREVISEDTBL 5. Outcome Program objectives were relevant to country conditions, the Government's plans and the WBG strategy. However, relevance of design suffered from weak links between some reforms and program objectives. Efficacy toward each of the three objectives was modest. Accordingly, there were significant shortcomings in the Program’s achievement of its objectives. a. Outcome Rating Moderately Unsatisfactory 6. Rationale for Risk to Development Outcome Rating As discussed above, development outcomes were modest. Achievements included only a possible lowering of customs clearance costs, increased public investment execution rates, and modest progress to reduce vulnerabilities. These achievements remain exposed to several risks: macroeconomic; political economy; adverse weather; and inadequate capacity (Section 3.b). On vulnerabilities, for example, adverse weather developments threaten the sustainability of food stocks. Inadequate capacity risks at the local level expose the resilience to shocks that may have been achieved through better access to social and basic services at that level. The risk of gaps in donor support and the fragility of microfinance institutions threaten this other source of the Program’s support for economic resiliency. Financing of food stocks remains exposed to fiscal risks. a. Risk to Development Outcome Rating Substantial 7. Assessment of Bank Performance a. Quality-at-Entry Analytical work on constraints to investment and growth, public expenditure, and transport and mining underpinned the program. The objectives focused on country conditions. Macroeconomic readiness for the operation was also well-identified by conformity with the IMF’s program and WBG’s debt sustainability analyses, although the latter pointed to long-term risks of debt distress. Although previous PFM reforms Page 10 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) improved fiduciary readiness, persisting corruption remained a risk in this regard, an issue that the program intended to address. Implementation arrangements followed standardized processes, including overall coordination by the Ministry of Finance, day-to-day monitoring by the General Unit in Charge of Cooperation, and implementation of sector specific reforms by technical departments in sector ministries. Risks were well identified, but mitigation measures were exposed to those risks (Section 3b). The design exhibited weak links between some of the reforms and program objectives. For example, reforms under the first objective hardly addressed the productivity and competition constraints that may affect costs in agriculture. M&E design (Section 9) reflected this shortcoming. Furthermore, as the ICR notes, the program did not sufficiently consider the country’s institutional and financial capacity issues (e.g., on PFM, transport and mining). Quality-at-Entry Rating Moderately Unsatisfactory b. Quality of supervision The ICR notes that Aide Memoires and back-to-office reports provide evidence of regular supervision and advice given by the World Bank’s experts throughout program implementation. However, although the ICR reports that 208 staff weeks were dedicated to project preparation and supervision of the four DPOs, it did not provide details on how supervision covered or impacted the substance of the program. The ICR further notes that monitoring of the results framework was weak and program ratings overly generous. Overall, there were moderate shortcomings in the proactive identification of opportunities and resolution of threats. Quality of Supervision Rating Moderately Satisfactory Overall Bank Performance Rating Moderately Unsatisfactory 8. Assessment of Borrower Performance a. Government Performance Prior actions in DPO1 suggest strong initial ownership and commitment to program reforms. However, this waned as the political situation deteriorated through the remaining life of the program, particularly with the change to a transitional government and the related significant staff turnover. This is reflected in the many originally expected reforms that did not materialize. Despite the political unrest, Burkina Faso managed to maintain an adequate macroeconomic environment, although this entailed curtailing expenditures and affecting some parts of the program (e.g., transfers to local communities). Government consultations on its strategy (Section 3a) were wide-ranging, including civil society, public and private sector actors, and development partners at national and regional levels. In addition to delays in the program due to the political deterioration, the ICR notes several implementation Page 11 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) shortcomings. These covered, for example, inadequacies in the processing of the draft mining code through parliament, engaging the private sector in fertilizer distribution, and establishing an initially agreed guarantee fund to help renew the country’s trucking fleet. These were significant shortcomings in government performance. Government Performance Rating Moderately Unsatisfactory b. Implementing Agency Performance --- Implementing Agency Performance Rating --- Overall Borrower Performance Rating Moderately Unsatisfactory 9. M&E Design, Implementation, & Utilization a. M&E Design As indicated (Section 3.a) the phrase “enhance the Government’s ability” made program objectives, as restated under DPO4, somewhat vague and difficult to monitor, for there are no obvious direct measures of ability that could be monitored (See Section 12). While indicators were measurable, they did not reflect the clearer part of the objectives (e.g., “reduce costs in the agriculture and transport sectors”) adequately. For example, capitalization of the cotton stabilization and input funds is not an adequate measure or determinant of cotton costs, which the program intended to reduce. Indicators of resource mobilization and management reflected the associated objective more closely than under the other two objectives. b. M&E Implementation The government provided the current and baseline data for indicators covered in the final results matrix, although a few were made available only by the end of the program, thereby limiting monitoring during the program. The measured indicators appear to be of good quality, given that most (e.g., capitalization of the funds) were not complex to produce. Nevertheless, there were difficulties and delays in collecting some indicators (ICR, para. 31). During the program, ten indicators were dropped (three due to unavailable data), and three indicators were added. These changes did not improve the adequacy of the indicators to reflect program objectives. c. M&E Utilization Page 12 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Monitoring played a role in documenting the need to shift the program towards less ambitious objectives in DPO4, as reform indicators pointed to deterioration or delays in program implementation. Monitoring of reform impacts were limited by shortcomings in the adequacy of indicators. The latter, as discussed above, did not adequately reflect objectives. Neither the WBG’s nor the borrower’s ICR provided additional, more robust indications of impact, particularly on agricultural and transport costs and on resiliency gains obtained from decentralization or microcredit. M&E Quality Rating Modest 10. Other Issues a. Environmental and Social Effects Program documents referred to possible impacts on poverty and women, and actions that could help offset the environmental damage of Burkina’s extractive industries or could have mixed impacts (See section 7.a). The ICR did not cover environmental or social effects that the PDs discussed. b. Fiduciary Compliance The ICR notes that fiduciary and safeguards policies were well managed and reported c. Unintended impacts (Positive or Negative) None reported. d. Other None reported. 11. Ratings Ratings ICR IEG Reason for Page 13 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Disagreements/Comment Moderately Moderately Outcome --- Unsatisfactory Unsatisfactory Achievements remain Risk to Development Modest Substantial exposed to significant capacity Outcome and financing risks. Moderately Moderately Bank Performance --- Unsatisfactory Unsatisfactory Moderately Moderately Borrower Performance --- Unsatisfactory Unsatisfactory Quality of ICR Substantial --- Note When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate. 12. Lessons This review draws the following three lessons (with the first two from the ICR): 1. Inadequate consultation with all relevant stakeholders increases the risks that draft legislation submitted as a prior action will not pass opportunely to achieve the expected effects. The draft mining code and anticorruption legislation suffered from inadequate vetting, resulted in late approval, and had no impact during the program. 2. In low capacity environments, objectives to build capacity may be more appropriate than objectives to achieve the long-term welfare goals of added capacity. Capacity building may have been what the less ambitious DPO4 program objectives (to enhance the government’s ability in three areas) aimed for. However, such enhancements need to be measured. For example, enhanced government ability to reduce costs in agriculture requires evidence to link reforms to cost reductions. Implementing reforms (by capitalizing the input fund) alone is not evidence of the expected outcome. 3. Mitigation of risks is unlikely to benefit from mitigation measures with impacts that are dependent of the risks that the measures aim to mitigate. For example, reforms to expand cotton production will hardly qualify as a mitigation measure for the risk of unanticipated production and/or price shocks on cotton production. 13. Assessment Recommended? Yes Page 14 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review First Growth and Competitiveness Credit(P126207) Please explain Yes. As Burkina Faso's third DPO program, this series of four provides an opportunity to learn from the limited progress that DPO programs have made. 14. Comments on Quality of ICR The ICR is informative, concise and well-written. It provides good coverage of the decline in program performance throughout the series and affords unusual attention to the quality of program indicators. The discussion of IDA and Government performance is candid and well considered. The ICR falls short in its focus on the objectives of DPOs 1-3 alone, with no reference to the objectives articulated in DPO4. This is most important for the first DPO4 objective (“cost reductions in agriculture and transport”), on which the ICR’s discussion of efficacy provided little or no coverage. a. Quality of ICR Rating Substantial Page 15 of 15