The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) Program Information Documents (PID) Appraisal Stage | Date Prepared/Updated: 19-Oct-2021 | Report No: PIDA238655 Jun 10, 2021 Page 1 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Program Data Country Project ID Program Name Parent Project ID (if any) Morocco P169330 Morocco Public Sector Performance (ENNAJAA) Program Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) MIDDLE EAST AND NORTH 21-Oct-2021 15-Dec-2021 Governance AFRICA Financing Instrument Borrower(s) Implementing Agency Program-for-Results Financing Kingdom of Morocco Ministry of Finance Proposed Program Development Objective(s) The Program Development Objective is to improve performance and transparency of government operations and service delivery COST & FINANCING SUMMARY (USD Millions) Government program Cost 675.00 Total Operation Cost 450.00 Total Program Cost 450.00 Total Financing 450.00 Financing Gap 0.00 FINANCING (USD Millions) Total World Bank Group Financing 450.00 World Bank Lending 450.00 Decision The review did authorize the team to appraise and negotiate Jun 10, 2021 Page 2 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) B. Introduction and Context Country Context 1. Over the last decade, Morocco has engaged in an overarching institutional and economic reform agenda, achieving considerable results in reducing poverty. The political and institutional reforms set forth by the 2011 Constitution, along with large public investments in key sectors and a stabilized macroeconomy, helped Morocco significantly reduce poverty. Despite these improvements, Morocco continues to face significant development challenges. Social disparities and economic inequalities persist. The Kingdom is among the countries with the highest levels of income inequality in North Africa.1 According to the 2018 Systematic Country Diagnostic,2 citizens’ aspirations for improved well-being and accountable administration remain unmet. This is particularly true for people living in rural areas, youth, and women. Shared prosperity for low-income and marginalized populations is further impeded by climate change. Poor households suffer the highest economic losses from extreme weather events.3 The Covid-19 crisis has exacerbated existing challenges and negatively impacted the Kingdom’s economy and fiscal space. 2. In 2019, the challenges facing Morocco’s economy led His Majesty King Mohammed VI to appoint a Special Commission to develop a New Development Model. Published in May 2021, this new model is an ambitious vision for 2035 to overcome the persistent development challenges. It spans a wide array of themes and identifies the digital transformation and the modernization of the administration as two key levers for change. Sectoral and Institutional Context 3. With the adoption of the 2011 Constitution Morocco put in motion an ambitious effort of public sector reform. This new generation of reforms built on the achievements of earlier public sector strategies. A key reform was the introduction of performance-based budgeting by the 2015 Organic Budget Law to foster public policy evaluation and sound financial oversight. The ambition notwithstanding, public sector reform has not yielded its full potential, in large parts due to structural constraints. As evidenced by both international and national assessments, the Moroccan public administration has yet to fully implement adopted reforms. Core government functions, such as public financial management, public investment management, domestic revenue mobilization, and public procurement, are at the first stage of implementation. 4. Moving forward, the New Development Model will provide additional momentum for public sector reform, including GovTech. The new model has identified digital transformation and the modernization of the administration as two key levers for change.4 Open data appears as a strong priority and digitalization of public administration is identified as one of the main tools to improve the performance of public administration. A new national digital strategy will be prepared, to be implemented by the ADD, and a unique digital platform for all digital services will be established. Public administration will need to be well-performing in order to live up to its role under the new model as “the bearer and linchpin of the implementation of a significant part of the projects.�5 The new model specifically recommends the adoption of an “agile� budgetary policy, increasing domestic resource mobilization, and optimizing public expenditure, in 1 Un Maroc égalitaire, une taxation juste, Oxfam, 2019. 2 World Bank. 2018. Morocco - Systematic Country Diagnostic. Washington, D.C.: World Bank Group. Available at https://hubs.worldbank.org/docs/imagebank/pages/docprofile.aspx?nodeid=30199820. 3 Wooden, et al. 2014. “Impact of Weather Shocks on MENA Households .� World Bank Group. 4 The other three levers are: securing the funding for transformational projects, contribution of Moroccans abroad, and mobilization of cooperation with development partners. 5 The New Development Model, 2021. Jun 10, 2021 Page 3 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) order to widen the fiscal space, thus putting the budget and tax administration reforms key and center. The new model also stresses the need for change management to ensure consistency of public policies. PforR Program Scope 5. The ENNAJAA Program for Results supports three critical areas of the government’s public sector reform program under the New Development Model. Notwithstanding strong momentum and ambition in recent years, structural constraints have resulted in an important implementation gap. The ENNAJAA Program will address this implementation gap and support the government in translating its ambition into practical achievements and incentivizing the roll out of its public sector reform program. The results areas of the Program are anchored in the government program themes of i) improved efficiency of public expenditure, ii) improved public revenue management, and iii) Improved foundations of digital transformation through interoperability and open data. The choice to focus on these specific areas stems from the need to narrow down the large scope of the government program to specific activities to be supported by the ENNAJAA Program for Results that are key for bridging the public sector reform implementation gap in Morocco. 6. Results Area 1: Improving the efficiency of public expenditure. In furtherance of the 2021 budget law priorities and the July 2019 King’s Speech calling for the rationalization of public spending, ENNAJAA will support the implementation of the 2015 Organic Budget Law and strengthen value for money in public procurement. The Program also aims to increase the uptake of the performance approach within public agencies and at subnational level by supporting measures to foster better allocation of resources. Examples of such measures are the promotion of management control and dialogue within ministries, both at the central and local level but also improving the quality of performance indicators of selected ministries and promoting a climate-sensitive budget approach. The inclusion of Climate and Gender budget tagging will foster budget allocation to those topics and - combined with access to the budget document - strengthen accountability on policy commitment. The Program will further incentivize the implementation of a State Region Partnership Contract (Contrat de Partenariat Etat-Région) in the pilot region of Fes-Meknes. 7. Results Area 2: Improving public revenue management. At the national level, the Program aims to improve taxpayer compliance and revenue collection through support to more effective compliance risk management. The Program focuses on: (i) the effectuation of an integrated Tax Compliance Improvement Plan; (ii) strengthened data quality as regards the taxpayer file; and (iii) improved usage of third-party data. When it comes to local taxation, the Program will address institutional and tax policy complexities, mainly a scattered distribution of roles with respect to the management of the local tax system. It will also support the General Tax Directorate’s Data Management Action Plan and the roll out of the new local tax governance framework as described in the law 07-20 on local taxes. 8. Results Area 3: Improving the foundations of digital transformation through interoperability and open data. ENNAJAA will focus on the implementation of the national interoperability agenda, which is the key priority of the ADD’s NOG 2025, and foster the Open Data agenda to support implementation of the government’s commitments under the Open Government Partnership. In addition, it will seek to address findings and recommendations of the Open Data Readiness Assessment and Action Plan conducted in 2020. 9. The population of the Kingdom as a whole is the ultimate beneficiary of the Program. While central and deconcentrated structures of the administration will benefit directly, program benefits over the long-term include more efficient and transparent public procurement, an increase in domestic resource mobilization, better access to priority, safeguarded, up to date and quality datasets that correspond to user needs, and reduced transaction costs overall within the public administration and ultimately for service users through extensive digitalization of processes. ENNAJAA also Jun 10, 2021 Page 4 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) offers opportunities for citizen engagement. The Program supports a multi-stakeholder approach to the development of technical data management standards, the prioritization of datasets for publication and the solicitation of feedback from end users. ENNAJAA also includes activities aimed at promoting gender equality within a broader program that seeks to fundamentally shift government practices to enhance the effectiveness of core government functions and improve access to and usage of public sector data for policy-making and to raise awareness of existing gender inequalities in Morocco. C. Proposed Program Development Objective(s) 10. The Program Development Objective is to improve performance and transparency of government operations and service delivery. Improved Performance and Transparency mean that these core government operations will achieve higher levels of efficiency, quality, accessibility, and overall effectiveness through the Program. Public expenditure management will become more efficient, public procurement will achieve better value for money, and tax administration will become more effective and increase tax revenues, particularly at municipal level. At the same time, the digital transformation will result in higher efficiency and better quality of selected public services. Improved transparency in particular means an increased access to priority, safeguarded, up to date and quality datasets in an open and reusable format to support (re)use of data that responds to user needs. Ultimately, this is expected to translate into a culture of proactive disclosure of data that is currently mandated by the recently ratified Access to Information Law but is unevenly enforced in practice. 11. The achievement of the Program Development Objective will be measured through a series of indicators . They include the percentage of performance indicators whose objectives have been achieved; the percentage of service indicators whose objectives have been achieved; the increase in additional revenue collected by the General Tax Directorate; the increase in tax revenue of targeted municipalities; and the increase in the number of fully digitized transactional public services. D. Environmental and Social Effects 12. The ENNAJAA Program is expected to generate environmental benefits. Through the activities it aims to fund, the Program, will allow supporting the government's digital transformation and its evolution to an efficient, equitable, and transparent data-driven public sector. The increased adoption of technologies should lead to a decrease in paper use and therefore a decrease in the related carbon footprint. It will also reduce travel between administrations as well as travel to these administrations. The avoided energy consumption will contribute to the national effort to reduce greenhouse gases and improve air quality in urban centers. 13. This Program will also have social benefits. In the medium term, the Program will have beneficial social impacts for the entire population of the Kingdom. Indeed, by supporting the government's efforts to improve the efficiency of public spending, the Program will improve budgetary performance and the efficiency of the use of public funds, which will have an impact on public investments. Improved efficiency of local tax collection and increased revenues for municipalities will result in more equitable and balanced investments for all segments of the urban and rural population. By supporting the digitization of public administration and data-driven government, the Program will contribute to improving administrative services for users of the administration in the long-term. ENNAJAA will also strengthen the openness and transparency of government, and improve access to data for citizens and economic and social actors. 14. At the same time, the risk of negative impacts associated with the Program will be substantial. The activities financed under this Program, which present a potential for generating significant environmental risks, relate to the Jun 10, 2021 Page 5 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) activities that will be supervised by the DGCT and implemented by AREP Fès-Meknes. They revolve around (i) improvement of the economic attractiveness of the region's territorial spaces (construction of an exhibition park), (ii) support for productive sectors, promotion of employment and scientific research (creation of an annual trade fair for crafts, construction of 2 local hospitals, construction of 2 engineering schools, construction of a multidisciplinary faculty, construction of 6 technology institutes, construction of a training institute in the water and 'sanitation and the environment, upgrading of 19 social centers dedicated to young people with disabilities), and (iii) promotion of culture, tourism and protection of natural resources (construction ion of a convention center, construction of 5 local centers, construction of the cultural center of Fez, construction of the Ain-Chegag cultural center, rehabilitation of 2 cultural centers). All these constructions will take place inside urban space. The risks may materialize during the preparation, construction, and operating phases. The Program will therefore support specific measures aimed at strengthening the environmental and social management system and building the capacities of actors in environmental and social management. 15. Grievance redress. Communities and individuals who believe that they are adversely affected as a result of this Program, as defined by the applicable policy and procedures, may submit complaints to the existing program grievance redress mechanism or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address pertinent concerns. Affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non- compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. E. Financing Sources Amount % of Total (USD Million) International Bank for Reconstruction and Development 450.00 100.00 (IBRD) Total Program Financing 450.00 100.00 . CONTACT POINT World Bank Name : Klaus Decker Designation : Senior Public Sector Specialist Role : Team Leader(ADM Responsible) Telephone No : 5220+84431 / Email : kdecker@worldbank.org Name : Arthur Denis Pascal Foch Designation : Senior Digital Development Specialist Role : Team Leader Jun 10, 2021 Page 6 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) Telephone No : 5352+4159 / Email : afoch@worldbank.org Name : Walid Dhouibi Designation : Senior Procurement Specialist Role : Team Leader Telephone No : 5360+4248 Email : wdhouibi@worldbank.org Borrower/Client/Recipient Borrower : Kingdom of Morocco Deputy Director, Treasury Contact : Abdelmajid Mellouki Title : Department Telephone No : 212537677385 Email : m.mellouki@tresor.finances.gov.ma Implementing Agencies Implementing Ministry of Finance Agency : Contact : Madame Zaaboul Title : Secretary General Telephone No : 212537762570 Email : internet@finances.gov.ma Implementing Agency : Contact : Abdelmajid Mellouki Title : Director, Treasury Department m.mellouki@tresor.finances.gouv. Telephone No : 212662652820 Email : ma FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects ANNEX 1: Monitoring & Evaluation Plan Monitoring & Evaluation Plan: Program Development Indicators Indicator name Definition/ Frequency Data source Methodolog Responsibilit Description y for Data y for Data Collection Collection Jun 10, 2021 Page 7 of 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program (P169330) Percentage of efficiency Performance Annual IGF, Court of The IGF IGF – evaluation and quality of service indicators include Accounts or other (evaluation unit) unit indicators whose targets indicators of independent agency will certify the have been achieved efficiency, quality of and MEFRA existence of the (Percentage) service, and socio- websites evaluation - Of which efficiency economic indicators. reports, for indicators achieved This PDO indicator those not (Percentage) will track the available online - Of which quality of achievement of service indicators annual targets of (Percentage) performance - Of which gender- indicators in the PPs related socio- of pilot ministries economic achieved indicators achieved (Percentage) Increase in revenue from Increase in operating Annual, TGR and DGI The IGF verifies IGF – evaluation local taxes in the targeted resources of the starting in Statistics the percentage unit municipalities municipalities 2024 department data increase based compared to 2019. on the TGR and Operating resources DGI’s data are revenues from local taxes, and therefore excluding loans and sales of assets as well as transfer revenues (CAS VAT). Targeted municipalities are Casablanca, Fez, Tangier, Marrakech, Salé, Rabat, Meknes, Oujda, Kenitra and Agadir. Increase in additional Percentage of Annual The DGI Statistics The IGF verifies IGF – evaluation revenue collected by the increase in additional department data the percentage unit DGI revenue compared to increase based (Percentage) 2020 on the DGI’s data Increase in the proportion Percentage of public Biennial MEF’s Biennial E- The IGF verifies IGF – evaluation of fully digitized and services fully readiness the level of unit transactional public digitized and assessment of digitization of services transactional meets public services public services the biennial target based on the e- readiness assessment Jun 10, 2021 Page 8 of 8