The World Bank Report No: ISR10014 Implementation Status & Results Africa Economic & Monetary Community of Central Africa Financial Institutions (P099833) Public Disclosure Copy Operation Name: Economic & Monetary Community of Central Africa Financial Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Archive Date: 20-Jun-2013 Institutions (P099833) Country: Africa Approval FY: 2009 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 04-Dec-2008 Original Closing Date 30-Jun-2014 Planned Mid Term Review Date 11-Feb-2013 Last Archived ISR Date 27-Jan-2013 Effectiveness Date 27-Apr-2009 Revised Closing Date 30-Jun-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The project aims to strengthen Central African regional institutions so that they can fulfill their mandates to encourage an expanded, better governed regional market, and a more transparent, better regulated and more competitive financial system. This will facilitate the re-utilization of oil revenues for investment in Central Africa. The project supports programs approved by the member governments designed to improve the efficiency of regional institutions. This will be accomplished by strengthening regional institutions. Project outcome indicators are given in Annex 3 and include increases in the percentage of foreign reserves managed regionally byBEAC, growth of investment in regional projects (primarily infrastructure investments), and increases in the percentage of banks meeting key prudential norms. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Strengthening the BEAC 14.50 Encouraging Regional Investment Financing 15.00 Improving Regional Economic Policy Coordination, Financial Sector Supervision and Financial 14.00 Public Disclosure Copy Integrity Support for Project Implementation 3.00 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Page 1 of 7 The World Bank Report No: ISR10014 Implementation Status Overview This ISR was prepared following the implementation support mission that was undertaken by the task team from 18 February to 1 March 2013, in Yaoundé, Cameroon and from March 16 to 22 in Brazaville, as well as a meetings in Libreville, Gabon held with COSUMAF in early March 2013. The mission's objective was to review the Project's implementation progress over the year 2012 with the Project Implementation Unit and the project’s beneficiaries. Public Disclosure Copy Additionally, the task team focused on helping the project team maintain the faster implementation pace which has characterized the project in recent months through an improvement of the quality of the packages submitted for procurement review. To that end, the task team worked with the project Unit and beneficiaries on a number of procurement processes that are being prepared so that their review and approval is done in an efficient manner. Over the last year, the progress towards meeting the Project Development Objective has remained at moderately satisfactory in light of the satisfactory implementation progress, which contributes towards achieving the PDO. It is worth recalling that the project experienced a very slow implementation following effectiveness in April 2009 due to the late establishment of the PIU core staff in May 2010, thus resulting in more than a 12-month disbursement lag. This disbursement lag increased between May 2010 to August 2011, since up until March 2011, there had not been any approved work program and budget for the project, and the PAD had not been translated into French, making it difficult for Project's beneficiaries to understand this operation. By August 2011, the Project had accumulated an 18-month disbursement lag. The project has since improved the implementation pace significantly. This has resulted in the implementation of over 35 activities in 2012 and the launching of the procurement of additional activities, which will come into implementation during the next few months. The disbursement lag has now been partially reduced to 14 months, but there is still need to reduce it further. The disbursement has picked up to 41%; and is expected to pass 60% by December 2013 before passing 80% by June 30, 2013. The idea of undertaking a project restructuring was dropped. While the restructuring would have some gains, the Borrower does not feel that its gains are sufficient to invest the time and energy into it at this stage. The Task Team - in consultation with the Sector Manager - agreed that it would have been great to have done the restructuring that the task team proposed in earlier ISRs, but the Project's resources and time are better used ensuring excellent implementation support. The time and resources are better spent in accelerating the project implementation pace. For now, the task team notes that the implementation of the ongoing activities is starting to strengthen the capacity of the project beneficiaries in fulfilling their mandates. In fact, two out of three of the key performance indicators have been met. For the next six months, the Task team expects that the number of activities implemented will further increase, which, in turn, will broaden the foundations for the project to have an impact and meet its development objective. Provided the faster implementation pace is maintained over the next 6 months, and it translates into a reduced disbursement lag, there may be a basis for upgrading the progress towards achieving the PDO as satisfactory. This will be reviewed during the next supervision. Locations Country First Administrative Division Location Planned Actual Public Disclosure Copy Central Afr.Rep Not Entered Central African Republic Cameroon Not Entered Republic of Cameroon Congo Not Entered Republic of the Congo Chad Not Entered Republic of Chad Results Project Development Objective Indicators Page 2 of 7 The World Bank Report No: ISR10014 Indicator Name Core Unit of Measure Baseline Current End Target Increase in percentage of foreign reserves Percentage Value 35.00 50.00 50.00 managed regionally by BEAC Date 11-Nov-2007 01-Apr-2013 30-Jun-2014 Public Disclosure Copy Comments BEAC manages 50% of its foreign reserves. However, this achievement cannot be attributed to the project since the percentage of reserve managed by BEAC was determine in an agreement between BEAC and the French authorities. Banks accounting for percentage increase of Percentage Value 80.00 sector assets complying with agreed prudential Date 01-Apr-2013 30-Jun-2014 norms by end of project. Comments The indicator was originally Not updated. This percentage Banks representing 80% of entered incorrectly in the is not tracked by the banking sector assets complying with system. Based on the PAD, it commission (COBAC). As agreed prudential norms by should read "Banks such, it is not available. The end of project. accounting for 80% of sector task team feels that it is not assets complying with agreed the most suitable indicator to prudential norms by end of measure the impact of the project. project's assistance to COBAC. Growth of BDEAC financing of regional Number Value 8.20 15.70 15.00 projects. Date 31-Dec-2007 01-Apr-2013 30-Jun-2014 Comments CFA 8.2 billion for CY 2007 The level of BDEAC's investment has surpassed the target of CFA 15 billion. The task team does not feel that this indicator is suitable to measure the project's assistance to BEAC. A new Public Disclosure Copy performance target is being discussed with the beneficiary BDEAC. Intermediate Results Indicators Page 3 of 7 The World Bank Report No: ISR10014 Indicator Name Core Unit of Measure Baseline Current End Target Monetary programming conducted at regional Text Value At national level At regional (CEMAC) level level by Y4 Date 30-Jun-2008 01-Apr-2013 30-Jun-2014 Public Disclosure Copy Comments Monetary programming only Progress is being made by at national level harmonizing the type of date collecting and establishing a system which allows the relevant institution to have access to the data. Consulting firm has started its work. Central Bank/Government paper issued by Y3 Text Value None issued now Central Bank/Government (none issued now) paper issued by Y3 Date 31-Dec-2007 01-Apr-2013 30-Jun-2014 Comments The Government of Cameroon issued bonds which were over subscribed. Cameron may issue more. Gabon issued successfully new bills onMay 8. CFAF 10 billion were issued by tender on the regional CEMAC market. The issue carries a 1.5 percent interest and has a three-month maturity. The issuance has been done in the context of the implementation of the CEMAC regulations replacing statutory advances from the regional central bank (BEAC) with the issuance of Government securities to finance treasury needs. Public Disclosure Copy Cross-border electronic payments transactions Text Value (SYGMA and SYSTAC) (SYGMA and SYSTAC) in wholesale and retail systems (SYGMA and cumulative increase of 33% cumulative increase of 61% SYSTAC) cumulative increase of 33% by Y3 by Y3 by Y5. and 61% by Y5. Date 31-Dec-2011 30-Sep-2009 30-Jun-2014 Comments Not updated. The wholesale and retail system is being updated. However, it is unclear whether cross border electronic payment is the Page 4 of 7 The World Bank Report No: ISR10014 most relevant indicator to measure activities financed under the project and which have limited bearing on the Public Disclosure Copy increase of electronic payments. Revised and applied BDEAC's policies, Text Value Outdated policies and Not yet in place. Revised and applied by Y3 procedures and internal controls by Y3 procedures Date 30-Sep-2008 01-Apr-2013 31-Dec-2011 Comments A new MIS is being purchased. At the same time, a new Human Resources strategy has been developed, but has yet to be adopted or implemented. All projects evaluated by BDEAC according to Text Value Non-standard policies No standard policies yet in All projects evaluated new policies by Y3. place. Date 30-Jun-2008 01-Apr-2013 31-Dec-2011 Comments BDEAC does not have a standard policy and set of procedures to evaluate its projects in a uniform manner. The project is helping address this gap with a technical assistance. Improved portfolio performance of BDEAC, as Text Value 43% in 2007 55% 70% by Y3 measured by increased ratio of annual Date 31-Dec-2007 01-Apr-2013 31-Dec-2011 disbursements/commitments in the preceding Comments While improving from the year from 43% in 2007 to 70% by Y3 43%, the ration is currently at 55% and falls short of the 70%target. New BDEAC's MIS, including accounting Text Value Lack of MIS The MIS is being procured In place by mid-term and Public Disclosure Copy system, substantially in place by mid-term and and is not in place. generating financial reports in generating financial reports in line with line with international international standards by Y5 standards by Y5 Date 30-Jun-2008 22-Mar-2013 31-Dec-2013 Comments The mission was at BDEAC headquarters and saw first hand that the new MIS was not in place. The mission is also concerned about internal discontent which could Page 5 of 7 The World Bank Report No: ISR10014 hamper the setting up of the MIS Updated accounting plan for banks in place Text Value Outdated accounting plan update accounting plans for In place and used by banks and used by banks by Y3 banks not yet in place. by Y3 Public Disclosure Copy Date 30-Jun-2008 01-Apr-2013 30-Oct-2012 Comments Plan for application of microfinance regulatory Text Value Not applied The application is in place but In place and applied by mid- framework and supervision system in place the regulatory framework term review and applied by mid-term review needs to be improved to hanlde a more sophisticated micro finance sector, which is now managing relatively high level of deposits. Date 30-Jun-2008 01-Apr-2013 31-Oct-2012 Comments Data on Financial Performance (as of 07-Mar-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P099833 IDA-45290 Effective 04-Dec-2008 27-Jan-2009 27-Apr-2009 30-Jun-2014 30-Jun-2014 P099833 IDA-H4340 Effective 04-Dec-2008 27-Jan-2009 27-Apr-2009 30-Jun-2014 30-Jun-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P099833 IDA-45290 Effective XDR 20.40 20.40 0.00 6.00 14.40 29.00 P099833 IDA-H4340 Effective XDR 11.50 11.50 0.00 4.26 7.24 37.00 Disbursement Graph Public Disclosure Copy Page 6 of 7 The World Bank Report No: ISR10014 Public Disclosure Copy Key Decisions Regarding Implementation There are no key decisions for disclosure. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. 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