Document of The World Bank FOR OFFICIAL USE ONLY Report No. 125363-KM INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY PERFORMANCE AND LEARNING REVIEW OF THE COUNTRY PARTNERSHIP STRATEGY FOR THE UNION OF COMOROS FOR THE PERIOD OF FY14-FY19 December 3, 2018 International Development Association Southern Africa Country Department 2 (AFCS2), Africa Region The International Finance Corporation Sub-Saharan Africa Department The Multilateral Investment Guarantee Agency Sub-Saharan Africa Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. The date of the last Country Partnership Strategy was April 16, 2014 FISCAL YEAR July 1 – June 30 CURRENCY EQUIVALENTS (Exchange Rate Effective October 31, 2018) Currency Unit – Comorian Franc (KMF) KMF 434 = US$1 ABBREVIATIONS AND ACRONYMS List of all abbreviations and acronyms used in the text of the document AFD Agence Française de Dévéloppement (French Development Agency) AfDB African Development Bank ASA Advisory Services and Analytics CfWP Cash-for-work Program CPF Country Program Framework CPIA Country Policy and Institutional Assessment CPS Country Partnership Strategy CRC Convention pour le Renouveau des Comores (Convention for the Renewal of the Comoros) DP Development Partner DPO Development Policy Operation DRR Disaster Risk Reduction ECF Extended Credit Facility EESIC Enquête sur l'Emploi, le Secteur Informel et la Consommation (National Survey of Employment and EIM Enquête Intégrale the Informal in thedes auprès Sector Ménages (National Household Survey) Comoros) FDI Forgien Direct Investment FIRST Financial Sector Reform and Strengthening Initiative FPAD Development Partners Forum FY Fiscal Year GDP Gross Domestic Product GEF Global Environment Facility GISE Government Human Resource Management Information System GoC Government of Comoros HCIC Human Capital Index HIPC Heavily-indebted Poor Countries ICTs Information and Communication Technologies IDA International Development Association IFC International Finance Corporation IFMIS Integrated Financial Management Information System IMF International Monetary Fund INSEED National Institute for Statistics, Economic and Demographic Studies IPF Investment Project Financing ISP Internet Service Providers ISR Implementation Status and Results JSDF Japanese Social Development Fund KMF Comorian Franc LDF Budget Law MA-MWE Comorian Water and Power Service MIGA Multilateral Investment Guarantee Agency i NDC Nationally Determined Contribution NLTA Non-lending Technical Assistance PDO Project Development Objectives PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PIU Project Implementation Unit PIQ Five-year Investment Plan PJ Pari Juwa PLR Performance and Learning Review PPP Public-private Partnership PRGSP Poverty Reduction and Growth Strategy Paper PSIA Poverty and Social Impact Analysis PURC Emergency Crises Response Project RCIP-4 Regional Communications Infrastructure Program Phase 4 SCA2D RRA Accelerated Growth Risk and Resilience and Sustainable Development Strategy Analysis SCD SA Systematic Country Société Anonyme Diagnostic (corporation) SCI SARL Statistical Capacity Indicator Société à Sesponsabilité Limitée (limited company) SIDS SDGs Small Islands Sustainable Developing States Development Goals SMP Staff-monitored Program SWIOFish1 Southwest Indian Ocean Fisheries Project 1 TA Technical Assistance TTL Task Team Leader UN United Nations UNFCC United Nations Framework Convention on Climate Change WBG World Bank Group International International Finance Multilateral Investment Development Association Corporation (IFC) Guarantee Agency (IDA) (MIGA) Vice President: Hafez Ghanem Sergio Pimenta Keiko Honda, EVP/CEO Director: Mark R. Lundell Kevin Njiraini Merli Baroudi Task Team Leader: Rasit Pertev Kailash Satyam Ramnauth Moritz Nikolaus Nebe ii TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................................ 1 II. MAIN CHANGES IN COUNTRY CONTEXT ..................................................................................... 2 A. Political and institutional developments.............................................................................................. 2 B. Changes in key macroeconomic and debt developments.................................................................... 2 C. Changes in poverty reduction and shared prosperity .......................................................................... 4 D. Emerging priorities and Government agenda ...................................................................................... 4 III. SUMMARY OF PROGRAM IMPLEMENTATION ........................................................................... 5 A. Program and portfolio performance .................................................................................................... 5 B. Evolution of partnerships and leveraging............................................................................................. 5 C. Overview of progress towards achieving CPS objectives ..................................................................... 6 D. ASA completed ..................................................................................................................................... 7 E. Cross-cutting theme: gender equity ..................................................................................................... 8 IV. EMERGING LESSONS .................................................................................................................. 8 V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY ................................................... 10 VI. RISKS TO THE CPS PROGRAM .................................................................................................. 11 Annex 1: Revised Results Matrix (including additional indicators for FY17-FY20) ....................... 14 Annex 2. Matrix of Key Changes to Original CPS Results Matrix .................................................. 22 Annex 3. Matrix summarizing progress toward FY14-18 CPS Objectives.................................... 24 Annex 4: New IFC commitments and Advisory Services in the CPS period .................................. 32 Annex 5: Planned and Actual IDA Lending under the CPS FY14-19 (US$ millions) ...................... 33 Annex 6: Portfolio Trends ............................................................................................................. 34 TABLES, FIGURES AND BOXES Table 1: Comoros Selected Economic Indicators ............................................................................ 3 Table 2: Selected Completed and Ongoing Analytical and Advisory Services ................................ 8 Table 3: Revised Systematic Operations and Risk-Rating Tool (SORT) ......................................... 13 iii THE UNION OF COMOROS PERFORMANCE AND LEARNING REVIEW OF THE FY14-FY17 COUNTRY PARTNERSHIP STRATEGY (CPS) I. INTRODUCTION 1. This Performance and Learning Review (PLR) summarizes progress under the FY14-FY17 World Bank Group (WBG) Country Partnership Strategy (CPS) for Comoros. Approved in April 2014, the CPS is built around two pillars: (i) Increased Public Sector Capacity and (ii) Shared Growth and Increased Employment. The Strategy sought to build on the successes achieved through the Highly-Indebted Poor Country (HIPC) process and support the Government’s objectives to strengthen governance and promote private sector growth and job creation in line with the Poverty Reduction and Growth Strategy Paper (PRGSP) 2010-2014, and the new poverty reduction strategy “Accelerated Growth and Sustainable Development Strategy” (SCA2D) covering 2018-2021. 2. The priorities of the CPS are still relevant and there has been progress towards CPS outcomes on most fronts. The overall objectives of the CPS are in line with the WBG’s twin goals of poverty reduction and shared prosperity, as well as the PRGSP and the SCA2D. There has been notable progress in government effectiveness and statistical capacity building, as well as in the Information and Communication Technologies (ICT), energy and fisheries sectors. Progress in the areas of social protection and cash-for-work activities has been more mixed. The World Bank’s Advisory Services and Analytics (ASA) program is helping to widen the knowledge base in Comoros and helping to inform the upgrade of the SCA2D. 3. This PLR outlines an increased IDA financing program in line with the increased indicative allocation for Comoros under IDA18, updates and simplifies the CPS results matrix, and proposes an extension of the Country Program Framework (CPF) period by two years – from FY17 to FY19. Comoros is a small island state, which is borrowing from IDA on small economy terms. PLR preparation was initially delayed by the presidential election in May 2016 and subsequently by an extended period of uncertainty, during which political consensus was particularly elusive. During this time the Government undertook a review of its objectives and targets, including those supported by the World Bank and other Development Partners (DPs). Following a series of consultations, the Government has agreed on the program set out in this PLR. The PLR simplifies the results matrix (reducing the number of objectives from 12 to nine), proposes several new indicators, extends target deadlines where appropriate and provides an assessment of results achieved to date as well as a summary of changes to the original CPS matrix (Annexes 1-3). It also proposes an extension of the CPS by two years. This will give time to maximize the results anticipated under the existing set of CPS objectives. However, because of the delays in reaching consensus around the Program, IDA 18 deliveries will commence in FY19 and are not expected to yield results within this CPS (although existing projects will do so). The new Country Partnership Framework (CPF), which is expected to cover the period FY20-FY24, will reflect the emerging development priorities of the Government of Comoros (GoC) as they develop, as well as the findings of the Systematic Country Diagnostic (SCD), which is currently under preparation. 1 II. MAIN CHANGES IN COUNTRY CONTEXT A. Political and institutional developments 4. The political environment has been less stable than envisioned at the time of the CPS. Following hard-fought, but peaceful, elections, Mr. Azali Assoumani became President in mid-May 2016. The President appointed a coalition Government in early June 2016 comprising the President’s own party, the Convention for the Renewal of the Comoros (Convention pour le Renouveau des Comores, CRC), and Juwa, the second-biggest party in the legislature. However, the Coalition ended after only a year, leading to the appointment of a new Government in July 2017. Furthermore, a controversial constitutional referendum held on July 30, 2018 has introduced changes to the Presidential rotation system and has moved Comoros away from a federal structure. It has also paved the way for renewed elections in the first quarter of 2019 under the new constitution. The changes sparked armed riots in October 2018. The Governor of Anjouan was arrested, and a new Acting Administrator was appointed by Presidential decree. Though ultimately contained, these riots have illustrated yet again the high degree of fragility of the country and the high levels of risk involved. 5. With World Bank support, Government effectiveness has improved slightly, but remains highly constrained. Several World Bank operations support the enhancement of accountability systems including the completed Economic Governance Reform Development Policy Operation (DPO). The Electricity Sector Recovery Project, and Economic Governance technical assistance (TA) contributed towards improvements through capacity building including the deployment of an Integrated Financial Management Information System (IFMIS). Programs including the Governance and Anti-Corruption TA supported the enhancement of control of corruption and regulatory quality. The World Bank’s Country Policy and Institutional Assessment (CPIA) Index improved to 2.9 in 2016, up from 2.7 in 2014, but subsequently fell to 2.8 in 2017 and remains below the Sub-Saharan Africa IDA countries average of 3.1. The business environment improved modestly; Comoros’s ranking in the Ease of Doing Business Index rose to 158 in 2018 from 162 in 2010.1 Nevertheless, severe capacity limitations continue to impede effective macroeconomic management and reform implementation. Basic infrastructure provision remains weak. The country was sanctioned by the European Union for failing to take sufficient action to curtail illegal, unreported and unregulated fishing, reducing export revenues and limiting future development of the fisheries sector. Overall, Comoros’s fragility and limited institutional capacity are important considerations in designing and supporting implementation of the World Bank program. B. Changes in key macroeconomic and debt developments 6. Macroeconomic performance during the implementation of the FY14-FY17 CPS fell below expectations. The CPS projected annual gross domestic product (GDP) growth of four percent from 2014 to 2016. However, a crisis in the energy sector and slow progress in reform implementation, including in the telecommunication sector, led to a deceleration of GDP growth in 2014 and 2015. This started to reverse in 2016, supported by an improvement in electricity supply and the initiation of infrastructure projects. GDP growth in 2017 has remained low at 2.7 percent, but is projected to gradually improve, provided that operating conditions for the private sector improve and the fiscal framework remains under control. A six-month Staff-monitored Program (SMP) with the International Monetary Fund (IMF) was 1 The Ease of Doing Business Index assesses objective measures of business regulations and their enforcement, including the regulatory requirements for starting a business, dealing with construction permits, obtaining access to electricity, registering property and obtaining credit. 2 signed in November 2016, but the subsequent reviews of the program were not completed due to lack of progress. 7. Fiscal space has been constrained by low and unpredictable revenues. Slow growth and constant weaknesses in revenue administration have kept tax revenues low (at around 12 percent of GDP in 2014-2016). Poor tax revenue performance has been offset by exceptional financing, including receipts from the Economic Citizenship Program2, the proceeds of the sale of a second telecommunication license, and a grant equivalent to 7.5 percent of GDP from Saudi Arabia in December 2015. On the expenditure side, the management of the wage bill is an ongoing challenge. In 2016, measures were introduced to tackle excessive tax exemptions and consolidate wage bill management. Although total expenditures (as a percentage of GDP) increased by about two percentage points, the fiscal position improved significantly (from -4.9 percent of GDP in 2016 to 0.5 in 2017) mostly due to a sharp increase in grants. On the other hand, tax revenues remained mostly stable. 8. Debt management is a growing concern. Even though the ratio of debt to GDP (estimated at 28.8 percent of GDP in 2017) remains low compared to peer countries, debt sustainability is highly dependent on the evolution of transfers. From 2016, the country started to accumulate external arrears, which reached an estimated 0.6 percent of GDP in September 2017. In addition, debt management has been undermined by the lack of a comprehensive database of public debt. 9. The medium-term growth outlook is projected to improve gradually. Medium term growth is projected to continue to improve, reaching 3.1 percent in 2019. Further growth could be boosted if the resources to finance the projected scaling-up in public investment are secured and management capacity improves. Table 1: Comoros Selected Economic Indicators 2014 2015 2016 2017 2018f 2019f Real GDP growth, at constant market prices 2.0 1.0 2.4 2.7 2.7 3.1 GDP per capita-nominal (US$) 878.7 736 764 788 869 895 Inflation 1.3 2.0 1.8 1.8 1.7 1.7 Current account balance (%GDP) -8.6 -0.4 -7.4 -4.1 -5.9 -7.1 Fiscal balance (% GDP) 1/ -0.5 4.4 -4.9 0.5 -1.9 -4.4 Debt (%GDP) 20.4 22.8 26.4 28.8 27.5 29.5 Poverty rate ($1.9/day PPP terms)2/ 18.8 18.3 18.3 18.1 18.0 18.0 Poverty rate (US$63 per month)3/ 42.4 Source: World Bank, Macroeconomics and Fiscal Management Global Practice, and Poverty Global Practice (2018) Notes: f = forecast. 1/ Disbursement of a budget grant from Saudi Arabia of Euro 40 million (equivalent to 7.5 percent of GDP) in mid-December 2015 dramatically improved the fiscal balance position in 2015. 2/ World Development Indicators and team projections. 3/ National Survey of Employment and the Informal Sector in the Comoros (2014). 2 The Economic Citizenship Program allowed foreign investors from partner countries to receive Comorian citizenship in return for fees and a commitment to invest in the country. 3 C. Changes in poverty reduction and shared prosperity 10. The latest official poverty estimates suggest that poverty decreased between 2004 and 2014. In the 2014 household survey (National Survey of Employment and the Informal Sector in the Comoros (Enquête sur l'Emploi, le Secteur Informel et la Consommation), EESIC), 42.4 percent of the population was reported to be living below the national (basic needs) poverty line of KMF 25,341 (approximately US$63) per person per month. This has fallen from an estimated 53.7 percent in the 2004 National Household Survey (Enquête Intégrale auprès des Ménages, EIM) household survey (56.6 percent under alternative methodologies). This declining poverty trend is primarily driven by improvements in living conditions and multidimensional poverty. The next national surveys are the census report, which is scheduled to be published at the end of 2018, and a poverty analysis, expected to be published in 2019. Using the international threshold of US$1.90, per day poverty is estimated to have decreased slightly from 18.8 to 18.3 percent between 2014 and 2016. This remains well below the Sub-Saharan Africa average of 42.7 per cent. Although remittances remain strong, they did not allow for a more rapid increase in household consumption compared to population growth, leading to almost no change in per capita consumption over the same period. 11. Inequality increased between 2004 and 2014. According to GoC statistics, inequality increased between 2004 and 2014, as measured by an increase in the Gini coefficient from 42 to 45 percent,3 above the average for low-income countries (40 percent). Poverty rates are slightly higher in rural areas (45.5 percent) than in urban areas (42.7 percent). Inequality between higher and lower income groups is also increasing. While average per capita consumption increased by about 30 percent between 2004 and 2014, the average consumption of the poorest 40 percent of the population only grew by 15.5 percent, making the goal of shared prosperity a continuing challenge in Comoros. There are also marked differences in welfare by education levels and sectors of employment. D. Emerging priorities and Government agenda 12. Defining new country priorities since the Presidential elections has taken significant time. The revised National Development Strategy (SCA2D) covers the period 2018-21, accompanied by a five-year investment plan (PIQ), outlining GoC’s new vision of Comoros to become an emerging economy by 2030. The Government aims to transform the country’s economy through the development of infrastructure (e.g. transport, telecom), a better functioning financial sector, and by tackling the long-standing issue of energy supply. The Government also aims at fostering the development of the private sector (e.g. tourism, fisheries and the seafood industry, agro-industry). There is scope to increase the country’s involvement in regional economic integration including through further engagement in the World Bank’s regional projects. Improved fiscal management is also a priority. The President has called for a 50 percent revenue increase and the cutting of the public sector wage bill by 40 percent. 13. The Government’s approach to the coordination of development assistance is still evolving. Although few DPs are active in Comoros, the Government has yet to determine an appropriate interface and coordination mechanism. This in part reflects divisions and rivalries within the Government. The Ministry of Finance, the key WBG interlocutor, is currently reviewing its own capacity, with the objective of strengthening its own role and effectiveness in this area. 3 Union of Comoros: Comoros Poverty Assessment, April 2017. 4 III. SUMMARY OF PROGRAM IMPLEMENTATION A. Program and portfolio performance 14. Actual lending (US$55.3 million) during FY14-FY17 was broadly in line with planned lending (US$60.0 million). A breakdown is shown in Annex 5. Several lending adjustments were made to respond to changing circumstances in the country. For example, the CPS had initially anticipated four DPOs, one each year of the program. The first two DPOs were delivered successfully in FY14 and FY15. A follow-on, stand-alone, DPO was requested by the Government to maintain momentum between the economic governance reform series and the inauguration of a new government in 2016. However, due to a weakening of the macroeconomic environment following the 2016 elections, preparation of planned DPOs in FY16 or FY17 was not possible. The two DPOs that didn’t go ahead were partially offset by increased support for social protection and capacity building in statistics. An additional financing of US$10.0 million for the Regional Communications Infrastructure Project was approved in early FY19. The pipeline for FY19 currently comprises two projects equivalent to a total commitment amount of US$40.0 million, although the pace of commitments under IDA18 may be affected by the political context as well as ongoing rivalries within government. 15. The overall quality of the World Bank’s program and portfolio performance i s moderately satisfactory. The active projects for which results are available have achieved moderately satisfactory progress towards the achievement of their project development objectives (PDO). These comprise the Social Safety Net Project (FY15) and the Comoros Statistics Project (FY17). In addition, four projects have been completed since FY14 for which results are available. The development objective outcome was rated satisfactory for the Emergency Crises Response Project (PURC) (FY10), and moderately satisfactory for the other three projects, namely the Economic Governance Reform Operation (FY14), the Second Economic Governance Reform Operation (FY15), and the Electricity Sector Recovery Project (FY14). Project implementation and performance slowed during the political transition in 2016-2017, resulting in the deterioration of project performance. This is now back on track and there are no problem projects. Portfolio trends are provided in Annex 6. 16. Public opinion regarding WBG performance was broadly unchanged between FY13 and FY18, prior to the establishment of a Country Office. In FY16, the World Bank conducted a stakeholder survey in Comoros, covering the CPS period. The findings demonstrate consistency in the views of opinion leaders since the last survey in FY13. Opinions about the World Bank were more positive among those who collaborate with the WBG than those who do not, with a strong correlation between familiarity and positive views of the WBG’s effectiveness. A third survey was completed in 2018 after the establishment of the country office. The findings suggest that trends have remained constant since FY16. B. Evolution of partnerships and leveraging 17. The WBG has been successful in leveraging private investment in the Comorian Telecom sector, which is encouraging for other sectors in general and for fragile small islands developing states (SIDS) in particular. Like many SIDS, Comoros faces huge challenges in terms of digital connectivity, due to its remote location and the small size of its economy. Lack of competition and weak regulation have further reduced the effectiveness and affordability of Comorian digital connectivity and increased its cost. However, policy and regulatory support provided by the WBG through the Regional Communications Infrastructure Program (RCIP-4) resulted in the licensing of a second operator in 2015 (Telma Comores) and the partial liberalization of the market for internet service providers (ISPs). A commitment of US$22 million from IDA has leveraged over US$90 million in license fees and private-sector led infrastructure 5 investment, thus illustrating the potential for maximizing finance for development even in fragile SIDS such as Comoros. Telma Comores has now requested an investment from IFC in the amount of approximately US$16 million to expand its national network and services. MIGA is exploring the feasibility of political risk insurance support. C. Overview of progress towards achieving CPS objectives 18. The CPS aimed to support the Government’s objectives to strengthen governance and promote private sector growth and job creation. The World Bank-supported program (knowledge, finance, and partnership) has been structured around two pillars: (i) increased public sector capacity; and (ii) shared growth and increased employment. These strategic priorities are aligned with the Government’s PRGSP and contribute directly to the objectives of reducing extreme poverty and increasing shared prosperity in Comoros. 19. Progress towards the twelve objectives has been broadly positive. Six out of 12 objectives have been achieved. One objective, Improved Public Financial Management (PFM), has been mostly achieved. Three out of 12 objectives have been partially achieved and are to be further monitored in the FY17-FY19 period. One objective has not been achieved, namely Objective 2, ‘Enhanced transparency in the fight against corruption’. The GoC dissolved the anti-corruption commission in September 2016 and no credible system or measures have been put in place to pursue the fight against corruption. One objective, Objective 4: ‘Increased capacity to gather and release statistics in accordance with international standards’, is not attributable to World Bank support and hence was impossible to verify. The World Bank therefore proposes a new indicator under the ongoing Comoros Statistics Project (new lending since CPS). 20. CPS Objective 1: ‘Improved public financial management’ is mostly achieved. Two indicators have been achieved as follows. First, regarding the composition of budget expenditure, the (Public Expenditure and Financial Accountability) PEFA PI-2 rating has increased from D (2007) to C+ (2016). Second, cash management plans integrating the union and island treasuries are now operational. One indicator regarding the publication of budget execution reports is partially achieved. Two of the six elements of the PEFA framework PI-10 have been complied with notably; a) publication of the draft Budget Law 2015 (LDF); and b) the intra-annual reports on budget execution. 21. CPS Objective 2: ‘Enhanced transparency in the fight against corruption’ was not achieved. The number of senior officials with completed, publicly available Asset Declaration Forms was 2 out of 60 in 2015, not reaching the 80 percent target. The Anti-Corruption Commission was also dissolved in 2016. 22. CPS Objective 3: ‘Strengthened civil service management’ is partially achieved. One indicator has been achieved with more than 95 percent of civil servants paid through the improved automated payroll system, the Government Human Resource Management Information System (GISE), in March 2017. The indicator on having an inter-island agreement clarifying hiring authority and payment responsibility was not achieved. However, it is also no longer relevant. Hiring authority and payment responsibility will automatically be centralized at the Union level in line with the constitutional referendum. This indicator will therefore be dropped. 23. CPS Objective 4: ‘Increased capacity to gather and release statistics in accordance with international standards’ is not verified. The World Bank Index of Statistical Capacity has not increased from 41.1 in 2012 to the targeted index figure of 50 in 2017 – the figure for 2016 was 34.4. However, the 6 value of this indicator cannot be attributed to the World Bank. A new indicator is therefore proposed for the extension to the CPS under this PLR. 24. CPS Objective 5: ‘Improved effectiveness of social protection programs to enhance the resilience of poor to shocks’ is achieved. Both indicators have been achieved. First, the Social Protection Policy was revised and adopted in 2015. Second, the number of people benefitting from the cash for work program and the community-based infrastructure program has increased from 43,000 to 67,926. 25. CPS Objective 6: ‘Improved regulatory framework for Disaster Risk Reduction (DRR)’ is achieved. A national DRR strategy and action plan were adopted and made available in 2015. 26. CPS Objective 7: ‘Improved knowledge base on natural hazards’ is achieved. A national multi- hazard disaster profile is in place and open risk information data platform is operational and accessible. 27. CPS Objective 8: ‘Improved surveillance, coordination and communication’ is achieved. An early warning system for hydro meteorological and geological risks is now operational. 28. CPS Objective 9: ‘Improvement in the commercial and financial performance of the electricity sector’ is achieved. Two indicators have been achieved. First, the national water and power utility (Comorian Water and Power Service, MA-MWE) achieved a collection rate of 79 percent in 2016, 15 points higher than the end target in 2017. Second, the MA-MWE total losses declined from 45 percent to 35 percent in April 2017. 29. CPS Objective 10: ‘Increased access and voice/internet connectivity’ is partially achieved. Two indicators have been achieved. First, the number of Internet subscribers increased to 176,545 by end 2015 and to 253,200 in end 2017. Second, the number of licensed telecom operators increased to two. One indicator is partially achieved: while there are three licensed Internet Service Providers (Comores Telecom, Comores Cables, & Telma Comores), the target is four. 30. CPS Objective 11: ‘Strengthened capacity of governments and coastal communities to effectively manage selected priority fisheries’ is achieved. Two indicators have been achieved. Firstly, Comoros has entered two bilateral protocols on fisheries. Secondly, five management Plans with measures to control fishing efforts for five priority fisheries have been developed and implemented. 31. CPS Objective 12: ‘Improved policy and regulatory environment in targeted areas’ is partially achieved. One indicator has been achieved. The cost of registering a business has declined by 77 percent for firms classified as limited companies (Société à Responsabilité Limitée (SARL)) and by 67 percent for firms classified as corporations (société anonyme (SA)). One indicator, strengthened legal and regulatory framework for Public-private Partnerships (PPPs) to be adopted is ambiguous and lacks a baseline and target. This indicator will be restructured. D. ASA completed 32. The World Bank has undertaken core diagnostic studies, including on political economy, to help lay the ground for the forthcoming SCD and the new CPF. A significant share of ASA in Comoros has supported CPS Pillar 1, ‘Increased Public Sector Capacity’. For example, a Public Expenditure Review was completed in 2016 and a Poverty Assessment was delivered in 2017. Other ASA activity supporting CPS 7 Objective 1 includes: the Comoros Revenue Management Non-Lending Technical Assistance (NLTA) program (P161732) whose objective is to provide technical assistance for implementing reforms needed to constrain the size of the exemptible tax base in Comoros; and the Governance and Political Economy Filter of Domestic Revenue Mobilization (P164375) whose objective is to strengthen the Comoros customs system. ASA activities in support of CPS objectives under Pillar 2 (Shared Growth and Increased Employment) include technical assistance on Strengthening Payments Systems and Financial Infrastructure that aim to build a stable, more efficient and inclusive financial system. The Agricultural Value Chains and Food Security program (P164195) also commenced in FY17. Analysis drawn from this program is to inform the planned Integrated Business Development Project. Table 2 lists selected completed ASA tasks. Table 2: Selected Completed Analytical and Advisory Services Task Name FY Mainstreaming Disaster Risk Reduction for Sustainable Poverty Reduction in Comoros 2015 Comoros Governance Partnership Support 2015 Private Sector Development Policy Notes 2015 Comoros Public Expenditure and Fiscal Management Review 2016 Comoros Financial Sector Dialogue/TA 2015 Strengthening Social Protection in Comoros 2017 Poverty and Gender Assessment 2017 Comoros Remittances for Development 2016 Comoros Revenue Management NLTA 2018 Comoros - Agricultural Value Chains and Food Security 2018 E. Cross-cutting theme: gender equity 33. The World Bank is supporting the Government to narrow gender gaps in Comoros. The Comorian Constitution enshrines the principles of fundamental rights and equality between men and women. The World Bank is supporting government-led efforts to promote gender equality and female empowerment. Female participation and gender-based activities have been promoted across all programs. For example, in its Social Safety Net Program, 12,492 persons, including 7,718 women, have benefited from the Cash-for-work-Program (CfWP). Women have also benefitted from training on fishing techniques and conservation, as well as the co-management of local resources from fisheries. The World Bank has also promoted gender sensitive interventions through the Electricity Sector Recovery Project (PRSE). As part of this project, an investigation into the energy sector’s gender dimensions was conducted to better understand consumers. A gender-sensitive Poverty and Social Impact Analysis (PSIA) and a gender-sensitive behavioral audit were conducted to investigate structural factors hindering the amelioration of MA-MWE’s (the national water and power utility) commercial performance and identify those behaviors contributing to electricity theft, meter tampering and non-payment of bills. The studies showed that, based on the Comorian matriarchal society, women play a significant role in energy decision- making both at the household and community level. IV. EMERGING LESSONS 34. CPS implementation thus far has yielded several important lessons. • An increased field presence enabling regular dialogue with country counterparts has helped facilitate effective delivery in a fragile context. The establishment of a World Bank Country Office on 8 the ground in Comoros in August 2017 has strengthened supervision and dialogue at the country level. The Country Office has also been able to maximize finance for development, by facilitating the first ever IFC and MIGA project negotiations in Comoros. • It is important to have a better understanding of the social and cultural dynamics of Comoros to better mitigate the risks. To this end, The World Bank has been preparing a Risk and Resilience Analysis (RRA), which gives a better insight into the social, economic and political dynamics within the Comorian Society. This assessment will inform future operations. • An enhanced dialogue on the macroeconomic framework and associated reforms is necessary to ensure successful implementation of the IDA program and preparation of DPOs. Implementation challenges faced during the first two DPOs in FY14 and FY15, and cancellation of DPOs in FY16 and FY17, illustrate the paramount importance of the political context, the necessity of a sustained dialogue, and the need for extra care when preparing future DPOs. The factors that undermined performance in FY14 and FY15 (despite overall successful implementation) as well as FY16-FY17 included: (i) the impact of the elections on the fiscal position; (ii) adoption of an expansionary fiscal policy by the new government; (iii) extensive changes in management and technical personnel in the union and island governments; (iv) low capacity for implementation; and (v) lack of a disbursing program with the IMF partly due to challenges listed above. The appointment of a new country economist, able to allocate most of his time to Comoros, has helped deepen the WBG’s economic analysis. Close monitoring of the political situation through the Country Office will be continued. • While Project Implementation Units (PIUs) have been delivering, external pressures have, on occasion, negatively affected their performance. During FY14-FY17, coordinators from three World Bank PIUs resigned and/or were removed on apparently political grounds with consequences on the pace of delivery. The World Bank will continue to make use of PIUs, alongside accompanying measures to build capacity within the civil service. To mitigate these negative effects, the WBG will focus on those sectors where continued engagement and dialogue is possible, transparency can be achieved and contracts with PIU personnel are respected and enforced. Furthermore, the World Bank is also encouraging the Government to opt for competitive recruitment of heads of PIUs rather than the appointment of civil servants, e.g. Director General of MA-MWE also serving as head of PIU within MA-MWE, as competitively selected consultants are less prone to political interference. • Having a clear structure for dialogue with government as well as for development cooperation is essential for success. Governments must be requested and where possible assisted from the start to establish a clear and transparent structure for regular dialogue and day-to-day working relations with DPs. Lack of coordination within government, including unresolved rivalries between designated, coordinating and other ministries can result in significant pipeline delays, inefficiencies as well as misunderstandings. The World Bank has been working with Government to clarify its own working procedures. Furthermore, the World Bank is working alongside the other DPs to establish a more effective platform for regular dialogue with government. In Comoros, coordination at donor level currently occurs through a Development Partners Forum (FPAD), established in 2017. A proposal by Development Partners to place the FPAD on a more permanent, higher level institutional footing is currently under consideration by the GoC. Key DPs in Comoros include French Development Agency (Agence Française de Dévéloppement, AFD), the European Union and the African Development Bank (AfDB), the Global Environment Facility (GEF), and United Nations agencies as well as Abu Dhabi, China, Japan, Kuwait, Saudi Arabia, South Africa and Turkey. Comoros has a high degree of dependency on external aid and remittances. Official development assistance (ODA) has averaged over 12 percent of Gross National Income in recent years, above the average for low income countries. • Partnerships with other donors and maximizing finance for development are key to reducing Comoros’s dependence on external assistance and the sustainability of its economic reforms. Comoros depends on Official Development Assistance to a significant degree. This places a burden on 9 the country’s fragile management capabilities and could eventually jeopardize the country’s debt sustainability. The World Bank, working through its representative on the ground, will: o continue to collaborate closely with other DPs. This has already resulted in parallel financing, joint missions, and regular consultations on ongoing and pipeline projects. o work towards building a more effective development coordination framework in collaboration with other DPs for achieving the Government’s SCA2D objective of becoming a middle-income economy. o maximize private finance for development, building on the success of the WBG engagement in the Comoros telecom sector, where substantial foreign direct investment (FDI) in Comoros has already been leveraged through WBG support. • The World Bank was able to use its convening power to facilitate certain reforms or elements of reforms. For example, in September 2015, the World Bank organized a Government retreat (led by the President and attended the three Islands Governors) on civil service reform and wage-bill management. Without investing in the participatory process first, it would have been difficult to achieve Indicator 2.1 on the share of civil servants paid through the Human Resource Management Information System (HRMIS). Building on its enhanced field presence the World Bank will look to continue such efforts for the rest of the CPF. However, the feasibility of such activities will be affected by the political context as well as the style of leadership of the Government at any given time. V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY 35. The PLR proposes a two-year extension of the FY14-FY17 CPS to the end of FY19 and selected adjustments to the results matrix to reflect lessons learned and emerging government priorities. This will give time to maximize the results anticipated under the existing set of CPS objectives. The new CPF, which is expected to cover the period FY20-FY24, will reflect the emerging development priorities of the GoC, as articulated in the revised SCA2D covering the period 2018-2021 and five-year investment plan (the PIQ), as well as the findings of the SCD, which is currently under preparation. 36. The PLR proposes an expanded lending envelope and consolidates, streamlines and extends the results matrix and its objectives (Annex 5). The PLR anticipates that IDA commitments during FY19 could reach US$50 million, reflecting the substantial increase in the indicative IDA allocation for Comoros under IDA18. The basic structure and thrust of the current CPS remains broadly fit for purpose even with the increased availability of resources. At the same time, because of the difficulty experienced to date in achieving consensus on key development priorities, the results matrix has been consolidated and focused on a few key priorities. The number of objectives has been reduced from 12 to 9 by merging several inter- related objectives notably: i) two objectives on public financial management and transparency; and ii) three objectives on natural hazards, risk management and climate change. Where possible and appropriate, new indicators have been included to reflect new project activity and obsolete indicators removed. Target dates have been extended where appropriate. 37. The proposed WBG focus for the rest of the CPS period is well aligned with the GoC’s forward plans and complements the support provided by other DPs. The expanded financing envelope will enable the WBG to scale-up ongoing interventions while opening opportunities in new areas that are aligned with CPS objectives. To address needs in the health sector, an investment project financing (IPF) operation in the health sector has been added to the program to increase access and quality of health and nutrition services. Under Pillar 2, the CPS scales up the engagement in telecommunications through additional financing to the RCIP-4 project (approved in FY19). Finally, an integrated competitiveness project aimed at improving the enabling environment for private sector growth and enhancing the competitiveness of 10 selected value chains in agriculture, tourism, and transport services sectors is planned. These measures reflect the new priorities of the SCA2DP, including a focus on the development of infrastructure (telecom) and improving the enabling environment for private sector growth. The balance of IDA18 resources would be programmed and committed in FY20 under the new CPF. Specific changes are summarized in Annex 2. 38. Following approval of the FY14-FY17 Comoros CPS, the Sustainable Development Goals (SDGs) were approved by the UN General Assembly in September 2015 . Minor adjustments through this PLR have sharpened the alignment of the CPF with the SDGs. For example, the extended CPF is particularly well aligned with SDG 8, principally with respect to the promotion of full and productive employment for all, and SDG 14, particularly regarding sustainable use of marine resources. The GoC, in collaboration with One UN and other DPs, is developing a plan to translate the SDGs into its national development strategies. This Plan will be reflected in the next CPF. 39. The WBG will support implementation of the Comoros’s Nationally Determined Contribution (NDC) under the United Nations Framework Convention on Climate Change (UNFCC). The GoC is focused on enhancing the country’s capacity for environmental management and to deal with the effects of climate change. This will require the Comoros to adapt to the challenges of climate change, including temperature increase, shifting precipitation patterns and an increase in hydro-meteorological and geophysical events. It also requires the country to develop its capacity for renewable energy. The WBG will support these efforts. For example, the World Bank’s support for programs to enhance the resilience of communities to shocks, including the extension of basic services and infrastructure, supports the sustainable development of communities and their ability to deal with the challenges of climate change. These efforts are expected to result in climate change adaptation co-benefits. VI. RISKS TO THE CPS PROGRAM 40. The overall risk rating for the Comoros is High (Table 3). Small island States can indeed have highly complex political economies, which was not initially foreseen, presenting certain risks for the scaled-up IDA program. 41. Individual risks together with proposed mitigation measures are summarized below. An in-depth assessment of risk will be undertaken through an RRA. • Political and governance risk is High. Comoros remains exposed to risks stemming from the tense relations between the Government of the Union and governments of the autonomous islands, particularly as the country now undergoes controversial constitutional changes altering the current presidential rotation and governance practices. Beyond current constitutional challenges, recent political instability in Mayotte and Anjouan, and vulnerability, particularly among disadvantaged youth, to potential Islamic radicalization (documented in analysis conducted by some DPs), may exacerbate political and governance risks. Sudden shifts in policy priorities or even political instability could affect delivery of the new operations or disrupt implementation of ongoing operations. The World Bank’s increased presence on the ground, including the World Bank Resident Representative stationed in Moroni, is enabling it to establish a more effective line of dialogue and partnership, helping to evaluate and mitigate these risks and assist better in capacity-building. The increased presence of task team leaders (TTLs) and technical and fiduciary staff in neighboring country offices (e.g. Madagascar, Kenya and Mauritius) able to support the World Bank’s Comoros program also facilitates more regular interaction with Comorian counterparts, through frequent, timely and on-demand missions. The World Bank will also continue to maintain close collaboration, analytical work and concerted action with Development Partners as well as the United Nations, African Union and the European Union, to mitigate 11 these risks. • Macroeconomic risk is Substantial. There are four main sources of macroeconomic risk facing the Comoros: a) its dependency on external financing, both public and private, including possible impacts of other donors on Debt Sustainability (e.g. through either non-concessional credit or erratic grant funding leading to unrealistic expectations); b) a business environment unfavorable to the development of the private sector, depriving the State of tax revenues for public services; c) the quasi- bankrupt state of the energy utility (MA-MWE and EDA), which is unable to provide regular power supply, affecting economic activity nationwide; and, d) its dependence on imports, with an export/import ratio under eight percent. The WBG is mitigating these risks by working closely with the Government as well as other DPs to maximize efficiency, strengthening the regulatory environment required for private investment in sectors such as telecom, improving the commercial and financial performance of the state electricity utility and helping to promote export sectors such as fisheries, as well as inform the Government and DPs on debt sustainability. • Institutional capacity is High. The CPS identified institutional capacity constraints as a critical challenge for implementation. Overall projects have performed well and the disbursement rate in Comoros is high (70 percent in FY18). Yet several risks have materialized in part due to frequent staff changes in counterpart agencies and implementing units, e.g. the Energy Sector and Social Protection projects. The result has been slower than planned project implementation. As competitively selected consultants are less prone to political interference, the World Bank will encourage the Government to opt for competitive recruitment of heads of PIUs rather than the appointment of civil servants, as may have been the case in the past. The World Bank will also explore the use of Hands-On Expanded Implementation Support4 to strengthen implementation support and encourage innovation in the design of instruments. In addition, the increased World Bank presence on the ground will enable identifying and offsetting institutional risks more effectively in the future. • Fiduciary risk is Substantial. Based on continued weaknesses in Comoros financial management and procurement systems as documented in the PEFA and other assessments, fiduciary risks remain substantial. Several cases of ineligible expenditures in projects have been seen. The CPF program will continue to target improvements in public financial management through future DPOs. Continued attention to building fiduciary capacity in implementation units will also help to address this risk. • Environmental and social risks is Substantial. The Comoros are affected by climate change and soil degradation. Natural hazards are expected to intensify and increase in frequency with climate change, include cyclones, floods, landslides, tidal waves and volcanic eruptions. In 2012, floods caused substantial losses, with approximately 65,000 people affected and damages totaling approximately US$20 million. Regarding social risks, the Comoros ranks in the lowest quartile of the Human Capital Index (HCIC, with an HCIC value of 0.411. Repeated political and institutional crises have eroded economic growth and the population's living conditions. While no new activity is planned during the current CPF, the support provided by the World Bank to improve disaster risk management under the SWIO RAFI program is expected to help mitigate climate change related risk. In addition, an enhanced presence on the ground will help the World Bank to maintain dialogue and focus on development priorities in the sometimes unpredictable political environment. 4 Hands-on Expanded Implementation Support allows task teams to assist Borrowers beyond the normal implementation support to help expedite procurement arrangements and speed project implementation. 12 Table 3: Revised Systematic Operations and Risk-Rating Tool (SORT) Risk Rating Rating (H, S, M, L) 1 Political and governance H 2 Macro-economic conditions S 3 Sector strategies and policies M 4 Technical design of project/program M S Institutional capacity for implementation and sustainability H 6 Fiduciary risk S 7 Environmental and social risks S 8 Stakeholders M Overall H 13 Annex 1: Revised Results Matrix (including additional indicators for FY17-FY19FY19) NOTE: Indicators marked with a * are new indicators and/or have had their target deadlines extended. Other indicators are carried over from the previous results matrix but have not been extended either because they have been achieved or there is no further World Bank activity planned during the CPS. CPS Indicators (FY14-FY19) Milestones WBG Engagement Pillar 1: Increased public sector capacity Objective 1: Improved public financial management Country goals: Enhanced PFM in terms of increased efficiency and accountability in the use of public and donor resources. In 2012 the National Assembly adopted the PFM Bill aimed at defining a clear and transparent fiscal relationship between the islands and federal state. Development challenges: PFM information systems are rudimentary and obsolete. Budget preparation is delayed and the process is non-participatory. Indicator 1.1: The composition of budget N/A (no further, relevant World Bank activity) Completed expenditure deviates from the original budget Lending by less than 5 percent. PEFA PI-2 rating increases • Economic Governance TAL (P102376) from D (2007) to D+ (2016) Baseline [2007]: D • Economic Governance TAL (AF) (P144381) Target [2016]: D+ • Economic Governance Reform Grant (P131688) Source: Comoros Economic Governance TAL • Second Economic Governance Reform Grant (FY14) (P150924). Indicator 1.2: Budget execution reports are N/A (no further, relevant World Bank activity) ASA published (on the web or national media) • Public Expenditure and Fiscal Management Review regularly and include social sectors and/or (P15770) priority sectors Baseline [2013]: Reports not published • Public Investment Policy Note (P129422) Target [2017]: Reports published • Governance and Anti-Corruption TA (P143164) Source: Comoros Economic Governance TAL • Comoros Revenue Management NLTA (P161732) (FY14) N/A (no further, relevant World Bank activity) 14 CPS Indicators (FY14-FY19) Milestones WBG Engagement Indicator 1.3: Cash management plans integrating the Union and island treasuries are operational by 2016 Baseline [2013]: cash management plan not operational Target [2017]: cash management plan operational Source: Comoros Economic Governance TAL (FY14) N/A (no further, relevant World Bank activity) Indicator 1.4: Percentage of senior officials with completed, publicly available Asset Declaration Forms increases from 30 percent (2013) to 80 percent (2015). Baseline [2013]: 30 percent Target [2015]: 80 percent Source: Comoros Economic Governance TAL (FY14) Objective 2: Strengthened civil service management Country goals: Undertake civil service reform Development challenges: High wage bill and frequent salary arrears. Weak checks and balances in civil service recruitment. Indicator 2.1: The share of civil servants paid N/A (no further, relevant World Bank activity) Completed through the automated payroll system increases Lending from 50 percent (2010) to 90 percent (2015) • Economic Governance TAL (P102376) Baseline [2010]: 50 percent Target [2015]: 90 percent • Economic Governance TAL (AF) (P144381) Source: Comoros Economic Governance TAL (FY14) 15 CPS Indicators (FY14-FY19) Milestones WBG Engagement Objective 3: Increased capacity to gather and release statistics in accordance with international standards. Country goals: Strengthen statistical capacity Development challenges: Weak capacity to produce statistical data contributes to a lack of transparency and evidence-based planning and policy making. Indicator 3.1*: Fourth population and housing N/A Completed final results are released ASA Baseline [FY17]: Not released • Strengthening the Statistical Development in Target [FY19]: Released Source: Comoros Statistics Project (FY17) Comoros (P131684) Ongoing Indicator 3.2*: Full implementation of the Milestone 3.2 Lending General Population and Housing Census (RGPH) i. Completion of RGPH and implementation of and Household Poverty and Living Standard the Household Poverty and Living Standard • Comoros Statistics Project (P159437) survey survey (FY18) Baseline [FY17]: No Target [FY19]: Census and survey implemented Source: Comoros Statistics Project (FY17) Indicator 3.3*: Proportion of statistical outputs Milestone 3.3 supported by the project that are disseminated i. Proportion at 60 percent (FY18) according to the statistical release calendar (percent) Baseline [FY17]: 0 Target [FY19]: 70 Source: Comoros Statistics Project (FY17) Objective 4: Improve knowledge base and management of natural hazards, disasters and climate risks Country goals: Improve management of disasters and climate risks Development challenges: Poor regulatory and policy framework. Limited knowledge of areas at risk to a variety of natural disasters. Limited capacity of governmental actors to effectively intervene, coordinate and communicate; lack of baseline data to assess impact of floods; limited awareness and preparedness of the affected communities, local and central government institutions. 16 CPS Indicators (FY14-FY19) Milestones WBG Engagement Indicator 4.1: Development and adoption of a N/A (no further, relevant World Bank activity) Completed national DRR policy and a strategy for its ASA implementation. • Mainstreaming Disaster Risk Reduction for Baseline [2013]: no DRR policy Target [2017]: DRR policy and strategy for Sustainable Poverty Reduction in the Union of implementation Comoros (P126857) Source: Comoros SWIO RAFI (FY14) • Regional Project to strengthen DRM capacity and knowledge exchange (P146637) Indicator 4.2: National multi-hazard disaster N/A(no further, relevant World Bank activity) • Regional Disaster Risk Assessment and Financing profile in place and open risk information data Initiative (P149096) platform established, operational and accessible to all. Baseline [2013]: No disaster profile and risk data platform Target [2017]: Disaster profile and risk data platform operational Source: Comoros SWIO RAFI (FY14) Indicator 4.3: Early warning tested and N/A (no further, relevant World Bank activity) operational, for both volcanic and meteorological hazards Baseline [2013]: No early warning Target [2017]: Early warning system Source: Comoros SWIO RAFI (FY14) Pillar 2: Shared growth and increased employment Objective 5: Improved effectiveness of social safety net and active labor market programs. Country goals: Reduce social vulnerability Development challenges: The policy and institutional framework for social protection are unclear and not guided by an overall strategy. Lack of short term employment opportunity for vulnerable. Existing social protection programs have limited scope and coverage. 17 CPS Indicators (FY14-FY19) Milestones WBG Engagement Indicator 5.1: Revised Social Protection Policy N/A (no further, relevant World Bank activity) Completed adopted. • Emergency Crises Response Project (P120631) Baseline [2013]: No revised Social Protection Policy adopted. • Comoros-Emergency Food-Security and Target [2017]: Revised Social Protection Policy Unemployment Support Through Cash-For-Work adopted. (P121550). (Japanese Social Development Fund, JSDF) Source: Comoros Social Safety Net (FY14) Indicator 5.2: Number of people benefitting N/A (no further, relevant World Bank activity) Ongoing from cash for work and basic Lending services/infrastructure increases from 43,000 to • Social Safety Net Project (P150754) 53,000 by 2016. • Promoting Youth Employment in Comoros (P156195) Baseline [2013]: 43,000 people (Japanese Social Development Fund, JSDF) Target [2016]: 53,000 people Source: Comoros Social Safety Net (FY14) ASA Indicator 5.3*: Number of people benefitting Milestone 5.3 • Poverty and Gender Assessment (P156542) from social safety net programs: (a) number of i. Number of people benefitting from social beneficiaries; (b) number of beneficiaries of safety net programs (FY18): (a) 5,000.00, (b) which female. FY18: 2,500.00 (a) Baseline [FY17]: 4,217.00 Target [FY19]: 5,890.00 (b) Baseline [FY17]: 1,758.00 Target [FY19]: 2,945.00 Indicator 5.4*: Number of poor communities Milestone 5.4 that have access to safety net and nutrition i. Number of poor communities that have services access to safety net and nutrition services Baseline [FY16]: 0 (FY18): 60 Target [FY19]: 60.00 Objective 6: Improvement in the commercial and financial performance of the electricity sector Country goals: Enhance reliability of electrical supply 18 CPS Indicators (FY14-FY19) Milestones WBG Engagement Development challenges: Electricity supply is sporadic due to high technical and commercial losses that leave MA-MWE unable to finance fuel and maintenance. Indicator 6.1*: MA-MWE collection rate N/A Completed improves from 55 percent to 70 percent by 2017 Lending Baseline [2013]: 55 percent • Electricity Sector Recovery Project (P131659) Target [2018]: 70 percent Source: Comoros Electricity Recovery Project (FY14) Indicator 6.2*: MA-MWE total losses reduced from 45 percent to 37.5 percent by 2017 N/A Baseline [2013]: 45 percent Target [2018]: 37.5 percent Objective 7: Increased access and voice/internet connectivity Country goals: Improve International Telecom Connectivity Development challenges: Basic communications and Internet services are not affordable due to lack of connectivity to global fiber optic broadband infrastructure and lack of competition in voice and data services. Indicator 7.1: Number of Internet subscribers N/A (no further, relevant World Bank activity) Ongoing (fixed & mobile) increases from 5,400 to 66,000 Lending by 2017 • Regional Communications Infrastructure Program Baseline [2013]: 5,400 (RCIP4) (P118213) Target [2017]: 66,000 Source: • RCIP4 Additional Financing (P166737) ASA Indicator 7.2*: Number of licensed internet N/A service providers increases from one to four. • IFC Transaction Advisory services Baseline [2013]: One Target [June 2018]: Four Source: 19 CPS Indicators (FY14-FY19) Milestones WBG Engagement Indicator 7.3: Number of licensed telecom N/A (no further, relevant World Bank activity) operators increases from one (2013) to two (2015) Baseline [2013]: One Target [2015]: Two Source: Comoros Regional Communications Infrastructure Program Phase 4 (RCIP4) (FY14) Objective 8: Strengthened capacity of governments and coastal communities to effectively manage selected priority fisheries Country goals: Increase Income and Employment from Fisheries Development challenges: Overexploitation, ecosystem degradation, illicit fishing activities, and lack of local participation in value chains. Indicator 8.1: Number of new bilateral and/or N/A (no further, relevant World Bank activity) Completed multilateral protocols on fisheries entered into Lending by Comoros • Coastal Resources Co-Management Baseline [2013]: Zero Target [2017]: Two for Sustainable Livelihood (JSDF) (P125301) Source: Comoros CoReCSUD (FY14) Ongoing Lending Indicator 8.2: Management Plans with measures N/A (no further, relevant World Bank activity) to control fishing efforts for priority fisheries • Southwest Indian Ocean Fisheries Project (SWIOFish1) developed. (P132123) Baseline [2014]: Zero Target [2017]: One Source: Comoros SWIOFish (FY15) Indicator 8.3*: Number of community based Milestone 8.3 management units achieving at least two i. Number of community based management performance targets. units achieving at least two performance Baseline [2017]: 0 targets (FY18): 1 Target [2019]: 2 20 CPS Indicators (FY14-FY19) Milestones WBG Engagement Indicator 8.4*: Number of direct project Milestone 8.4 beneficiaries for SWIOFish1 (of whom percent i. Number of direct project beneficiaries for are female) SWIOFish1 (FY18): 3,000 Baseline [2017]: 1,500 Target [2019]: 5,500 (27 percent) Indicator 8.5*: Rates of inspected vessels, as a Milestone 8.5 percentage of the motorized fleet. i. Rates of inspected vessels, as a percentage Baseline [2017]: 2% of the motorized fleet (FY18): 4% Target [2019]: 6% Objective 9: Improved policy and regulatory environment in targeted areas Country goals: Increase private sector income and employment Development challenges: Regulatory burden is high. Weak regulation of financial sector. Limited financial product offerings and payments infrastructure. Weak capacity for investment project launch and realization. Indicator 9.1: Cost to register a business reduced N/A (no further, relevant World Bank activity) Ongoing by 50 percent by 2017 Lending Baseline [2013]: 100 percent • Promoting Youth Employment in Comoros (P156195) Target [2017]: 50 percent of 2014 value Source: ASA Indicator 9.2: Submission of revised Investment • IFC Investment Climate Advisory services Code to MPs by FY19 • Private Sector Development Policy Notes (P147309) Baseline [2017]: no submitted • Comoros Strengthening Payments Systems and Target [FY19]: submitted Financial Infrastructure (P150744) Source: PPP Preparation and Execution • Comoros Financial Sector Dialogue/TA (P152194) Framework TA • Retail Financial Products for Remittance Capture (P160687) 21 Annex 2. Matrix of Key Changes to Original CPS Results Matrix Original CPS Updated CPS Results Matrix Comments Results Matrix Objective 2 Indicator 2.1 dropped Objective 2 also dropped as single indicator has been dropped. Indicator 2.1 Dropped Not achieved. The target was not realistic and given that there is no further World Bank activity planned this indicator has been dropped. Objective 3 Now Objective 2. Indicator 3.1 Now indicator 2.1. Achieved. No further World Bank activity. Indicator 3.2 Dropped Not achieved. No further World Bank activity. This indicator will be dropped as no longer relevant. Objective 4 Now objective 3. New numbering reflects deletion of old Objective 2 and hence reordering of objectives. Indicator 4.1 Now indicator 3.1. Not verified. Indicator restructured to reflect results attributable to World Bank support. Indicator 3.2 introduced. New milestone New indicator relates to the implementation of the RGPH and Household Poverty and added. Living Standard survey. Introduced to reflect future World Bank activity for objective 3. Indicator 3.3 introduced. New milestone New indicator relates to the proportion of statistical outputs supported by the Statistics added. Project that are disseminated according to the statistical release calendar. Introduced to reflect future World Bank activity for objective 3. Objective 5 Objective now mentions labor market Objective previously only referred to social safety net programs. programs. Indicator 5.3 introduced. New milestone New indicator relates to the number of beneficiaries, and female beneficiaries, of social added. safety net programs. Introduced to reflect future World Bank activity for objective 5. Indicator 5.4 introduced. New milestone New indicator relates to the number of poor communities that have access to safety net added. and nutrition services. Introduced to reflect future World Bank activity for objective 5. Objective 6 Now objective 4. Objectives 6,7 and 8 merged to reflect synergies and commonalities across objectives. Indicator 6.1 Now indicator 4.1. Achieved. No further World Bank activity. Objective 7 Now objective 4. Objectives 6,7 and 8 merged to reflect synergies and commonalities across objectives. Indicator 7.1 Now indicator 4.2. Achieved. No further World Bank activity. Objective 8 Now objective 4. Objectives 6,7 and 8 merged to reflect synergies and commonalities across objectives. Indicator 8.1 Now indicator 4.3. Achieved. No further World Bank activity. 22 Original CPS Updated CPS Results Matrix Comments Results Matrix Objective 9 Now objective 6. New numbering reflects reordering of objectives due to merging of original objectives 1 and 2, and 6,7 and 8. Indicator 9.1 Now indicator 6.1. New FY18 target. Change to reflect extension of CPS. Indicator 9.2 Now indicator 6.2. New FY18 target. Change to reflect extension of CPS. Objective 10 Now objective 7. New numbering reflects reordering of objectives due to merging of original objectives 1 and 2, and 6,7 and 8. Indicator 10.1 Now indicator 7.1. Achieved. No further World Bank activity. Indicator 10.2 Now indicator 7.2. New FY18 target. Change to reflect extension of CPS. Indicator 10.3 Now indicator 7.3. Achieved. No further World Bank activity. Objective 11 Now objective 8. New numbering reflects reordering of objectives due to deletion of objective 2 and merging of objectives 6,7 and 8. Indicator 11.1 Now indicator 8.1. Achieved. No further World Bank activity. Indicator 11.2 Now indicator 8.2. Achieved. No further World Bank activity. Indicator 8.3 introduced. New milestone New indicator relates to community-based management units achieving performance added. targets. Introduced to reflect future World Bank activity for objective 8. Indicator 8.4 introduced. New milestone New indicator relates to direct beneficiaries of SWIOFish1, and the percent of whom are added. female. Introduced to reflect future World Bank activity for objective 8. Indicator 8.5 introduced. New milestone New indicator relates to rates of inspected vessels, as a percentage of the motorized fleet. added. Introduced to reflect future World Bank activity for objective 8. Objective 12 Now objective 9. New numbering reflects reordering of objectives due to merging of original objectives 1 and 2, and 6,7 and 8. Indicator 12.1 Now indicator 9.1. Achieved. No further World Bank activity. Indicator 12.2 Restructured as new indicator 9.2. Previous target poorly specified and not validated. 23 Annex 3. Matrix summarizing progress toward FY14-FY19 CPS Objectives Objectives and indicators Progress WBG Program Status Pillar 1: Increased public sector capacity Objective 1: Improved public Objective 1: Completed financial management Progress: mostly achieved. Two indicators have been achieved (PEFA PI-2 Lending rating increases from D to D+; cash management plans integrating the union • Economic Governance TAL (P102376) and island treasures are operational). One indicator is partially achieved (budget execution reports are published regularly). • Economic Governance TAL (AF) (P144381) Indicator 1.1: The composition of Indicator 1.1: • Economic Governance Reform Grant budget expenditure deviates Progress: achieved. The PEFA PI-2 rating has increased from D (2007) to C+ (P131688) from the original budget by less (2016), exceeding the target. • Second Economic Governance Reform than 5 percent. PEFA PI-2 rating Grant (P150924). increases from D (2007) to D+ (2016) ASA Baseline [2007]: D • Public Expenditure and Fiscal Target [2016]: D+ Management Review (P15770) Indicator 1.2: Budget execution Indicator 1.2: • Public Investment Policy Note reports are published (on the web Progress: partially achieved. In accordance with the 2011 PEFA framework (P129422) or national media) regularly and PI-10, there are six pieces of information for which public access is • Governance and Anti-Corruption TA include social sectors and/or considered essential. Two of these have been made available to the public: (P143164) priority sectors annual budget notably the draft Budget Law 2015 (LDF); and intra-annual • Comoros Revenue Management NLTA Baseline [2013]: Reports not reports on budget execution notably the 2014 budget execution reports. (P161732) published Target [2017]: Reports published Indicator 1.3: Cash management Indicator 1.3: plans integrating the Union and Progress: achieved. Cash management plans integrating the Union and island treasuries are operational Island Treasuries are operational and have been incorporated to the budget by 2016 law. The computerization of public finances is a recent reality (2017) through the Integrated Financial Management System (IFMIIS) rollout with 24 Objectives and indicators Progress WBG Program Status Baseline [2013]: cash the accounting software SIMBA used since mid-2016 for implementation by management plan not the Union and Island Governments of automate budget execution, operational accounting and reporting. Target [2017]: cash management plan operational Objective 2: Enhanced Objective 2: Completed transparency in the fight against Progress: not achieved. One indicator has not been achieved (increase in Lending corruption the percentage of senior officials with completed, publicly available Asset • Economic Governance TAL (P102376) Declaration Forms). • Economic Governance TAL (AF) Indicator 2.1: Percentage of Indicator 2.1: (P144381) senior officials with completed, Progress: not achieved. In 2014, 8 out of 57 senior civil servants completed • Economic Governance Reform Grant publicly available Asset an Asset Declaration Form, and in 2015 2 out of 60 had completed it. (P131688) Declaration Forms increases from • Second Economic Governance Reform 30 percent (2013) to 80 percent Grant (P150924). (2015). Baseline [2013]: 30 percent ASA Target [2015]: 80 percent • Public Expenditure and Fiscal Management Review (P15770) • Public Investment Policy Note (P129422) • Governance and Anti-Corruption TA (P143164) Objective 3: Strengthened civil Objective 3: Completed service management Progress: partially achieved. One indicator has been achieved (increase in Lending the share of civil servants paid through the automated payroll system). One • Economic Governance TAL (P102376) indicator has not been achieved (inter-island arrangement clarifying hiring authority and payment responsibility). • Economic Governance TAL (AF) (P144381) Indicator 3.1: 25 Objectives and indicators Progress WBG Program Status Indicator 3.1 The share of civil Progress: achieved. As of March 2017, more than 95 percent of civil servants • Economic Governance Reform Grant servants paid through the are paid through the improved automated payroll system, Government (P131688) automated payroll system Human Resource Management Information System (GISE). • Second Economic Governance Reform increases from 50 percent (2010) Grant (P150924). to 90 percent (2015) Baseline [2010]: 50 percent ASA Target [2015]: 90 percent Indicator 3.2: • Public Expenditure and Fiscal Indicator 3.2: Inter-islands Progress: not achieved. No agreement has been reached between the Management Review (P15770) arrangement clarifying hiring islands to determine the authority in charge of recruitment and payroll. • Governance and Anti-Corruption TA authority and payment Hiring authority and payment responsibility will automatically be centralized (P143164) responsibility concluded by 2015 at the Union level after the referendums. This indicator will therefore be Baseline [2013]: No inter-island dropped. arrangement. Target [2015]: Inter-island arrangement concluded Objective 4: Increased capacity Objective 4: Completed to gather and release statistics Progress: not verified. The current indicator does not measure results that ASA in accordance with international can be reasonably attributed to the World Bank. A new indicator is • Strengthening the Statistical standards. proposed in Annex 1. Development in Comoros (P131684) Indicator 4.1: World Bank Index of Indicator 4.1: Ongoing Statistical Capacity increases from Progress: not achieved. The World Bank Statistical Capacity Indicator (SCI) Lending 44 (2012) to 50 (2017) has not increased, in 2016 it was 34.4. Baseline [2012]: 44 • Comoros Statistics Project (P159437) Target [2017]: 50 Objective 5: Improved Objective 5: Completed effectiveness of social protection Progress: achieved. Two indicators have been achieved (revised Social • Emergency Crises Response Project programs to enhance the Protection Policy adopted; increased number of people benefitting from (P120631) resilience of poor to shocks. cash for work and basic services/infrastructure). 26 Objectives and indicators Progress WBG Program Status • Comoros-Emergency Food-Security and Indicator 5.1: Revised Social Indicator 5.1: Unemployment Support Through Cash- Protection Policy adopted. Progress: achieved. In 2015, the social protection policy was revised and For-Work (P121550). (Japanese Social Baseline [2013]: No revised Social adopted. Development Fund, JSDF) Protection Policy adopted. Target [2017]: Revised Social Protection Policy adopted. Ongoing Lending Indicator 5.2: Number of people Indicator 5.2: benefitting from cash for work Progress: achieved. A total of 67,926 people have benefitted from the CfWP • Social Safety Net Project (P150754) and basic services/infrastructure and the community based infrastructure program. This has exceeded the • Promoting Youth Employment in increases from 43,000 to 53,000 2016 target. Comoros (P156195) (Japanese Social by 2016. Development Fund, JSDF) Baseline [2013]: 43,000 people Target [2016]: 53,000 people ASA • Poverty and Gender Assessment (P156542) Objective 6: Improved Objective 6: Completed regulatory framework for DRR Progress: achieved. One indicator has been achieved (development and ASA adoption of a national DRR policy and strategy for implementation). • National DRM Project Indicator 6.1: Development and Indicator 6.1: • Regional Project to strengthen DRM adoption of a national DRR policy Progress: achieved. A national DRR strategy and action plan were adopted capacity and knowledge exchange and a strategy for its and made available in 2015. • Regional Disaster Risk assessment and implementation. Financing Initiative Project Baseline [2013]: no DRR policy Target [2017]: DRR policy and strategy for implementation 27 Objectives and indicators Progress WBG Program Status Objective 7: Improved Objective 7: Completed knowledge base on natural Progress: achieved. One indicator has been achieved (national multi-hazard ASA hazards disaster profile in place and open risk information data platform operational • Mainstreaming Disaster Risk Reduction and accessible). for Sustainable Poverty Reduction in Indicator 7.1: National multi- Indicator 7.1: the Union of Comoros (P126857) hazard disaster profile in place Progress: achieved. A natural hazard impact and vulnerability study, the • Regional Project to strengthen DRM and open risk information data SWIO-RAFI study, was carried out in 2017. A mapping of risks is available. capacity and knowledge exchange platform established, operational (P146637) and accessible to all. • Regional Disaster Risk Assessment and Baseline [2013]: No disaster Financing Initiative (P149096) profile and risk data platform Target [2017]: Disaster profile and risk data platform operational Objective 8: Improved Objective 8: Completed surveillance, coordination and Progress: achieved. One indicator has been achieved (early warning for ASA communication volcanic and meteorological hazards. • Mainstreaming Disaster Risk Reduction Indicator 8.1: Early warning Indicator 8.1: for Sustainable Poverty Reduction in tested and operational, for both Progress: achieved. Three risk assessment databases (a national-reference, the Union of Comoros (P126857) volcanic and meteorological a territorial-inventory on Moheli island, and a DesInvantar program • Regional Project to strengthen DRM hazards database) were completed in 2017 and are now available. An early warning capacity and knowledge exchange Baseline [2013]: No early warning system for hydro meteorological and geological risks is operational. (P146637) Target [2017]: Early warning • Regional Disaster Risk Assessment and system Financing Initiative (P149096) Pillar 2: Shared growth and increased employment Objective 9: Improvement in the Objective 9: Completed commercial and financial Progress: achieved. Two indicators have been achieved (improvement in Lending performance of the electricity MA-MWE collection rate; reduction in MA-MWE total losses). sector 28 Objectives and indicators Progress WBG Program Status • Electricity Sector Recovery Project Indicator 9.1: MA-MWE collection Indicator 9.1: (P131659) rate improves from 55 percent to Progress: achieved. As of 31 December 2016, this indicator exceeded the 70 percent by 2017 2017 target, with a rate of 79 percent. Baseline [2013]: 55 percent Target [2017]: 70 percent Indicator 9.2: MA-MWE total Indicator 9.2: losses reduced from 45 percent Progress: achieved. MA-MWE total losses declined from 45 percent to 35 to 37.5 percent by 2017 percent in April 2017. Baseline [2013]: 45 percent Target [2017]: 37.5 percent Objective 10: Increased access Objective 10: Ongoing and voice/internet connectivity Progress: partially achieved. Two indicators have been achieved (increase Lending in number of internet subscribers; increase in number of licensed telecom • Regional Communications operators). One indicator is partially achieved (increase in number of licensed internet service providers). Infrastructure Program (RCIP4) (P118213) Indicator 10.1: Number of Indicator 10.1: • RCIP4 Additional Financing (P166737) Internet subscribers (fixed & Progress: achieved. As of 2017, the number of fixed and mobile Internet mobile) increases from 5,400 to subscribers is estimated at 253,200. ASA 66,000 by 2017 • IFC Transaction Advisory services Baseline [2013]: 5,400 Target [2017]: 66,000 Indicator 10.2: Number of Indicator 10.2: licensed internet service Progress: partially achieved. There are two licensed Internet services providers increases from one to providers (ISPs) at the retail level: Comores Télécom and Telma Mobile. A four. third player, Comores Cables, offers wholesale service. Baseline [2013]: One Target [2017]: Four 29 Objectives and indicators Progress WBG Program Status Indicator 10.3: Number of Indicator 10.3: licensed telecom operators Progress: achieved. In December 2015, a second telephone services increases from one (2013) to two operator, Telma Mobile was licensed, and launched services in December (2015) 2016. Baseline [2013]: One Target [2015]: Two Objective 11: Strengthened Objective 11: Completed capacity of governments and Progress: achieved. Two indicators have been achieved (new bilateral Lending coastal communities to protocols on fisheries; development of management plans to control fishing • Coastal Resources Co-Management effectively manage selected effort). priority fisheries for Sustainable Livelihood (JSDF) (P125301) Indicator 11.1: Number of new Indicator 11.1: Ongoing bilateral and/or multilateral Progress: achieved. Comoros has entered two bilateral protocols on Lending protocols on fisheries entered fisheries. Firstly, a cooperation agreement between the competent health into by Comoros authority of the Comoros and the health and fishing authority of • Southwest Indian Ocean Fisheries Baseline [2013]: Zero Madagascar. Secondly, a cooperation agreement between the competent Project (SWIOFish1) (P132123) Target [2017]: Two health authority of the Comoros and the Pasteur Institute of Madagascar. Indicator 11.2: Management Indicator 11.2: Plans with measures to control Progress: achieved. Five coastal management plans were prepared, fishing efforts for priority fisheries involving 25 villages on the three islands: Mohéli, Grande Comore, developed. Anjouan. These are now operational in each of the five priority fishery Baseline [2014]: Zero communities; Ndrondroni, Kowé, Sadapoini, Mbambani, and Ndroudé to Target [2017]: One Chomoni. Co-management agreements were signed between April and September 2017. Objective 12: Improved policy Objective 12: Ongoing and regulatory environment in Progress: partially achieved. One indicator has been achieved (cost of Lending targeted areas registering a business). One indicator is not SMART and lacks a baseline and • Promoting Youth Employment in target (strengthened legal and regulatory framework for PPPs to be adopted). This indicator will be restructured. Comoros (P156195) 30 Objectives and indicators Progress WBG Program Status Indicator 12.1: Cost to register a Indicator 12.1: Completed business reduced by 50 percent Progress: achieved. In 2016, business registration fees had declined by 77 ASA by 2017 percent for SARLs, from KMF 300,000 to KMF 68,500; and by 67 percent • IFC Investment Climate Advisory Baseline [2013]: 100 percent for SAs, from KMF 500,000 to KMF 165,000. Target [2017]: 50 percent of 2014 services value • Private Sector Development Policy Notes (P147309) Indicator 12.2: Strengthened Indicator 12.2: • Comoros Strengthening Payments Legal and Regulatory Framework Progress: No baseline or target provided and hence not validated. Systems and Financial Infrastructure for PPPs adopted Indicator to be restructured as no baseline or target. The indicator is not (P150744) Baseline [2013]: SMART. • Comoros Financial Sector Dialogue/TA Target [2017]: (P152194) • Strengthening Social Protection in Comoros (P153837) 31 Annex 4: New IFC commitments and Advisory Services in the CPS period The WBG’s Comoros Investment Climate Program has been active in Comoros since 2011. The program focused on two pillars that were identified as among the primary constraints to private sector development in Comoros: weak legal and regulatory framework and access to finance. Since then, substantial progress has been recorded in the country’s business environment: company registration process has been streamlined, simplified and made easier; a new Arbitration and Mediation Center (CACOM) was created; a new Urbanism code simplifying the process to obtain a construction permit was introduced; and the cost to transfer a property was lowered and the process made more transparent. All these changes resulted in the country’s substantial improvement on the Ease of Doing Business index, where it currently ranks at 158th place out of 189 economies. On the distance to frontier metric, Comoros score’s went from 48.05 in Doing Business 20175 to 48.52 in Doing Business 2018, using a comparable methodology. New IFC commitments Privatization of CT was envisioned under the original program of RCIP4, but was postponed ahead of the 2016 elections, due to feared job losses. The new market entrant, Telma Comores (Telco), has requested an investment from the IFC in the amount of approximately US$16 million to expand its national network and services. MIGA is exploring the feasibility of political risk insurance support. However, Telco’s business plan is constrained by CT’s reluctance to interconnect and its refusal to share network infrastructure. IFC intervention will remain selective and focus on sectors where deep reforms are carried out and where the role of State Owned Enterprise (SoE) are revisited to allow a greater private sector participation. 5 Please note that data for DB17 has been revised to take into account data corrections 32 Annex 5: Planned and Actual IDA Lending under the CPS FY14-FY19 (US$ millions) Of which, Board Project ID Project Name Planned Actual Regional Status Approval FY IDA P131659 Electricity Sector Recovery Project 2014 5.00 5.00 delivered P118213 Regional Communications Infrastructure Program – APL 4 (RI) 2014 22.00 22.00 20.90 delivered P102376 Economic Governance TA 2014 3.50 3.50 delivered P131688 Comoros Economic Governance Reform Grant 2014 3.80 3.80 delivered P132123 SWIO Fisheries Project 1 2015 9.50 9.50 8.30 delivered P150754 Social Safety Net Project 2015 3.00 6.00 delivered with increased financing P150924 Second Economic Governance Reform Grant 2015 3.00 3.00 delivered Economic Reform DPO 1 2016 3.00 0.00 dropped 154842 Economic Reform DPO 2 2017 3.00 0.00 dropped P159437 Comoros Statistics Project 2017 new 2.50 delivered Unplanned allocation 4.20 0.00 P166737 Regional Communications Infrastructure Program – APL 4 (AF) 2019 new 10.00 3.00 delivered Total FY14-FY19 60.00 65.30 32.20 Pipeline, FY19 P164584 Integrated Development and Competitiveness 2019 25.0 pipeline P166013 Health and Nutrition Systems Support for UHC 2019 15.0 pipeline Unprogrammed IDA18 Financing 2020 32.5 Total IDA Pipeline 72.5 33 Annex 6: Portfolio Trends 34