Document of The World Bank Report No: 27651-GH IMPLEMENTATION COMPLETION REPORT (IDA-31990 PPFI-Q1270 TF-27006 PPFI-P9840) ON A CREDIT IN THE AMOUNT OF US$12.20 MILLION TO THE REPUBLIC OF GHANA FOR A PUBLIC SECTOR MANAGEMENT REFORM PROJECT February 27, 2004 Public Sector Reform & Capacity Building (AFTPR) Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective August 31,2003) Currency Unit = Cedis Cedis 1.00 = US$ 0.000115 US$ 1.00 = 8730 Cedis FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AEP Alternative Employment Program APL Adaptable Program Lending BPEMS Budget and Public Expenditure Management System CAGD Controller and Accountant General's Department CAS Country Assistance Strategy CMA Central Management Agencies DLC Development Learning Center DFID Department for International Development (UK) GDLN Global Development Learning Network GNCC Ghana National Commission on Children GOG Government of Ghana GIMPA Ghana Institute of Management and Public Administration GPRS Ghana Poverty Reduction Strategy GRATIS Ghana Res. Appr. Tech. Ind. Sch GTZ German Technical Cooperation HRM Human Resources Management IPPD Integrated Personnel and Payroll Database KPI Key Performance Indicators MDA Ministries, Departments, and Agencies M&E Monitoring & Evaluation MEPRC Ministry of Economic Planning and Regional Coorperation MLGRD Ministry of Local Government and Rural Development MOF Ministry of Finance MOFEP Ministry of Finance and Economic Planning MOWAC Ministry of Women and Children MTEF Medium Term Expenditure Framework NCWD National Commission on Women and Development NDPC National Development Planning Commission NIRP National Institutional Renewal Programme NOC National Overview Committee OHCS Office of the Head of Civil Service PHRD Policy and Human Resources Development Fund (Japan) PSC Public Services Commission PUFMARP Public Financial Management Reform Programme PUSERMOS Public Sector Re-invention and Modernization Strategy for Ghana PSR Project Status Reports QAG Quality Assurance Group QER Quality Enhancement Review ROC Regional Operations Committee SA Subvented Agency SEC State Enterprises Commission SOE Statement of Expenditure SMO Senior Minister's Office Vice President: Callisto E. Madavo Country Director Mats Karlsson Sector Manager Jit Bahadur S. Gill Task Team Leader/Task Manager: Vivek Srivastava GHANA Public Sector Management Reform Project CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 7 5. Major Factors Affecting Implementation and Outcome 11 6. Sustainability 13 7. Bank and Borrower Performance 13 8. Lessons Learned 16 9. Partner Comments 17 10. Additional Information 18 Annex 1. Key Performance Indicators/Log Frame Matrix 19 Annex 2. Project Costs and Financing 20 Annex 3. Economic Costs and Benefits 22 Annex 4. Bank Inputs 23 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 24 Annex 6. Ratings of Bank and Borrower Performance 25 Annex 7. List of Supporting Documents 26 Project ID: P050615 Project Name: PUB.SECTOR MNGT.PROG Team Leader: Guenter Heidenhof TL Unit: AFTPR ICR Type: Core ICR Report Date: May 24, 2004 1. Project Data Name: PUB.SECTOR MNGT.PROG L/C/TF Number: IDA-31990; PPFI-Q1270; TF-27006; PPFI-P9840 Country/Department: GHANA Region: Africa Regional Office Sector/subsector: Central government administration (100%) Theme: Other public sector governance (P); Administrative and civil service reform (P) KEY DATES Original Revised/Actual PCD: 06/08/1998 Effective: 09/06/1999 Appraisal: 02/18/1999 MTR: 03/09/2001 Approval: 05/04/1999 Closing: 07/31/2002 08/31/2003 Borrower/Implementing Agency: Government of Ghana/NIRP Other Partners: STAFF Current At Appraisal Vice President: Callisto E. Madavo Jean Louis Sarbib Country Director: Mats Karlsson Peter C. Harrold Sector Manager: Jit Bahadur S. Gill Brian David Levy Team Leader at ICR: Vivek Srivastava David Steedman ICR Primary Author: Vivek Srivastava; Smile Kwawukme; Sati Achath 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: U Sustainability: UN Institutional Development Impact: M Bank Performance: U Borrower Performance: U QAG (if available) ICR Quality at Entry: U Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objectives and design of the Public Sector Management Reform Program (PSMRP) need to be evaluated in the context of the Government of Ghana's (GOG) own initiatives on public sector reform and the Bank's country assistance strategy (CAS). In 1994 the Government of Ghana (GOG) had created the National Institutional Reform Program Secretariat (NIRP) as a focal point for public sector reform. In its "Ghana: Vision 2020" (1995) document the GOG had recognized the need for an efficient public sector as a pre-requisite for sustained growth. In 1997 the Government came out with its "Public Sector Re-invention and Modernization Strategy for Ghana: Transforming Vision into Reality" (PUSERMOS) where it committed to a review of the mandate, approach and scope of activities of public sector institutions. Although the history of GOG's efforts at public sector reform up to the time was limited, PUSERMOS and the subsequent appointment of the Vice-President (VC) as the Chairman of the National Oversight Committee (NOC) to oversee all public sector reform were seen as credible signals of GOG commitment to reform. The program was consistent with the Bank's CAS for Ghana (17002-GH, August 13, 1997) in that it aimed to improve overall fiscal performance through comprehensive reform of structures, organizations, systems and processes in Ghana's public sector. The CAS had noted that the Government's development agenda identified public service reform (better capacity, efficiency, and a sustainable wage bill) as essential for fiscal stability, higher private investment and better service delivery. Although the Bank was providing technical assistance for the implementation of the 3-year Medium Term Expenditure Framework (MTEF) and the Budget and Public Expenditure Management System (BPEMS), at the time there was no credit-based support for public sector reform. It is in this context that the PSMRP (No.19004-GH) was processed as a 3-Phase 11 year Adaptable Program Lending (APL) project. The development objective of the program was to improve efficiency, effectiveness and quality of public services in Ghana. It was expected to improve Ghana's overall fiscal performance in the medium term. The objectives of the PSMRP were identified as: (i) Redefining the role and functions of the state; (ii) Designing appropriate institutions and systems to implement this role; and (iii) Rationalizing the existing structure and systems to meet the new design. The development objective of Phase I of the APL was: "Setting the stage for full scale implementation, first implementation steps in priority areas". The following expected benefits (identified in the PAD) justified the project: (i) An efficient public sector providing more and better services to its customers; (ii) Significantly reduced public sector expenditures focusing on core government functions; (iii) Improved financial management; (iv) Enhanced private and public sector collaboration, with increased private sector input to government decision-making and operations; (v) Motivated public servants who receive remuneration and incentives according to their performance; (vi) Better coordination of the different donor activities targeting the public sector; and (vii) Significantly reduced corruption in Ghana's public service by improving the accountability of public servants. As noted, the objectives were consistent with the Bank's CAS and the government's stated development agenda. Reforming the public sector was (and remains) a key ingredient for sustained development, poverty alleviation and growth. Thus the project objectives were relevant and consistent with the borrower's needs and priorities. However, the very wide scope of the project objectives made it a complex, ambitious and challenging project to implement and supervise. This raises the question of the borrower's capacity to implement such a program and, more generally, whether there existed in government an agency that could have the authority and coordinating ability to implement a project of this nature. The 11-year time frame required sustained commitment over an extended period. Although the complexity was recognized, the comprehensive nature of the project was justified on the ground that narrowly focused public sector reforms were not sustainable. The long time frame was de riguer for comprehensive public - 2 - sector projects and a signal of the Bank's commitment. The project also involved potentially hard decisions (largely related to redundancies and lay-offs) to be taken by the government during implementation. Thus the key risks to achieving the project objectives were implementation capacity and the need for strong and sustained political commitment. To put this in perspective, two other points are worth noting: (i) it is understood that at the time Ghana was seen as a strong client and one of the better performers in the region; and (ii) comprehensive, cross-cutting public sector reforms such as this were accepted as a "best practice" approach. In addition, elections one year into the project led to a regime change that had implications for the future of the project. 3.2 Revised Objective: The project objectives were not revised. 3.3 Original Components: The project consisted of the following four components. The following provides a summary of the objectives/targets and project costs for each component during Phase I of the project. Component 1: Reform of the Subvented Agencies (SAs): (US$8.5 million; 44.2% of the total project cost) Under this Component, at least five subvented agencies which did not have a viable mandate according to GOG priorities were to be closed or taken off subvention. The project provided funding for the development of specific action plans and assistance to GOG to implement these action plans and to close down the selected agencies. IDA funds were to be made available for technical assistance. Complementary funds were made available for termination and redundancy payments which were necessary as consequence of the closure (estimate: 100 public servants). At least twelve agencies which had a viable mandate were to be restructured. Of these, at least seven agencies were to be partially commercialized (enabled to generate 30-70% of expenditures) and at least five agencies were expected to be fully commercialized. The project provided funding for the development of specific action plans for the restructuring as well as assistance to the subvented agencies to restructure their operations. This included the development of a modernization plan for the targeted institution with a medium-term financing plan identifying capital investment needs to further streamline the operations of the agency. Project funds were to be made available for technical assistance, and retraining costs for approximately 1200 public servants. Other elements to be developed during phase I included: (i) A comprehensive program to reform the entire SA-sector including an implementation plan. This program was aimed to provide the basis for the subsequent phases. (ii) The necessary regulatory/legal framework for the transformation of SAs, and for the establishment of effective monitoring guidelines for the sector ministries which oversee SA-operations. The monitoring guidelines would specify the relationship between the sector ministries and the SAs. The legal framework would provide the regulatory basis for the closure and the restructuring of the SAs. (iii) A strategy for outplacement and alternative employment. The reform program was expected to result in a reduction of the staff of the SAs. To make the reforms socially acceptable and practicable, it was - 3 - important that restructuring activities were embedded in a program for dealing with redundant employees. Key elements of the program were termination and redundancy payments as well as early retirement schemes. Component II: Adjustment of Structures and Organizations at the Central Government Level (US$3.6 million; 18.7% of the total project cost) This component concentrated on the CMAs and included: A definition/functional analysis of the mandates of all CMAs, a re-alignment of their functions and structures to reduce overlaps and inconsistencies, to improve efficiency and to ensure greater transparency, and an action plan to transform the existing environment. Based on the action plan for the re-alignment of the CMA-environment which was to be approved by Cabinet, the program provided funding for the change management process in each CMA. This included: (i) Development of a mission statement for each CMA which specifies role, responsibilities, and deliverables; (ii) Identification of functions which should be decentralized, abolished and commercialized in light of the newly defined mandate and mission of the CMA; (iii) Organizational design for each CMA; (iv) Assignment of responsibilities and performance targets for each organizational level based on the new organizational design; (v) Identification of logistical needs; (vi) Modernization plan for each CMA; (vii) Preparation of a medium-term financing plan for modernization; (viii) Inventory of assets, logistics, and equipment; (ix) Identification of staffing needs at the different levels; (x) Inventory of existing staff; (xi) Identification of redundant employees; and (xii) Identification of training needs and development of a training plan for the institution. Component III: Improvement of Systems and Processes in Ghana's Public Sector : (US$0.6 million; 3.1% of the total project cost) Activities under this component included: Development of a Human Resources Management (HRM) system. This system was meant to provide guidelines for human resource management in the entire public sector and aimed at integrating all personnel management functions: (i) the core elements of human resources management such as recruitment, promotion, staff mix, and training needs; (ii) a focus on career planning to systematically enhance skills and expertise in the public sector; (iii) the development of rules on conditions of service, benefits, discipline, penalties for corruption and non-performance; and (iv) the automation of human the resources functions. Through the development of a comprehensive human resource management system organizational planning was also expected to be facilitated and improved. Development of Public-Private Partnership Program. The development of a comprehensive strategy for enhanced public-private cooperation was seen as a first step to operationalize this strategic objectives of the GOG. Activities included analyzing the existing cooperation framework and identifying areas where private sector participation would be useful. During Phase I, project funds were provided for consultancy services to develop the systems/strategy as well as for workshops and focus group discussion to discuss the scope and focus. Funds were also allotted for piloting the systems in a few selected agencies of the central government. Component 1V: Project Management for Change Process (US$1.7 million; 8.8% of the total project cost) - 4 - This component included: Project management support for the NIRP Secretariat. Project management support to enable the Secretariat to implement a major reform program. Funding was provided for the recruitment of four long-term local consultants (National Coordinator and three additional staff for project management, procurement & financial management). Twenty weeks of additional short-term international consultancy services per year would support the development of an effective project management system to monitor and evaluate the implementation of a reform program as well as regularly evaluate the work of the Secretariat. In addition, some minor logistical support and purchase of equipment for project management purposes were built into the program to ensure trouble-free functioning of the Secretariat. Social assessment. Given the failures of previous reform efforts as well as the high social and political risks of the program, a critical part of the work of the NIRP Secretariat was to ensure a broad participatory and systematic stakeholder analysis and consultation process (social assessment), beyond the managerial level. The main objectives were: (i) to identify gaps between formal rules in the public sector (i.e. procedures, salary scales, sanctions; conflict of interest rules) and informal ones (i.e. incentives to pursue corruption, patronage system, political pressures) in order to propose necessary adjustments; (ii) to clearly identify internal stakeholders (i.e. different levels of public servants by gender, age) and external stakeholder (i.e. public service users, trade unions, private sector) soliciting their views on the change management process and the retrenchment program; (iii) to establish baseline data for future updates during project implementation, provide qualitative and quantitative inputs for the social impact monitoring, and define the modalities and frequency of continuous stakeholder consultation (participation plan); and (iv) based on the above findings, to design a strategy to mobilize support and gain consensus on the pace and scope of the reform efforts. These elements were expected to contribute to a design of a public information campaign directed to both internal stakeholders and the general public. Communication strategy. An important element of the work of the NIRP Secretariat was to build support for the reforms. This included a newsletter to be published on a regular basis as well as other activities aimed at informing the general public about focus and intention of the reform program. Project funds were to made available for quarterly production of the newsletter and other communication activities (public information campaign, workshops, other publications, etc.). Summary The first three components were directed at meeting the main objectives of the project and were reasonably well aligned with the objectives. The fourth component was introduced recognizing the complexity of the project and the limited capacity of NIRP. Although the three central components addressed a wide-ranging set of issues across government, were consistent and largely had a unifying underlying logic, the wide scope and the involvement of numerous government agencies in the reform made the task of the implementing agency quite formidable and challenging. 3.4 Revised Components: The construction and operation of a Development Learning Center (DLC) was added through a MOU as a fifth component after the Development Credit Agreement was signed. The estimated cost of this component was US$1.5 million. The DLC as part of the Global Development Learning Network (GDLN) was to facilitate training and enhance the skills and performance of decision-makers from the public and private sectors and civil society. Indicators of successful implementation and links with the original project objectives are not documented. - 5 - 3.5 Quality at Entry: Unsatisfactory . Although there was a Quality Enhancement Review(QER), there was no official assessment of the quality at entry by the Quality Assurance Group (QAG). The ICR deems the quality at entry to be unsatisfactory. The rating is based on an evaluation of the project objectives, consistency with Bank policies, the quality of the design, reasonableness of assumptions and assessment of risks. These are discussed next. Project objectives. The Bank had identified the need for supporting capacity building and reform of public services through lending and non-lending services as an element of its CAS. The project objectives were also consistent with government's development agenda. In view of the lack of previous success on the part of the government in the area of public sector reforms and the urgent need for reforms, the intervention was timely and relevant. The objectives were not in conflict with safeguard or other policies of the Bank. In view of the possible redundancies that might result from it, the project design included a social assessment and included mitigating measures. Although the DO of improving fiscal performance in the medium term as a result of the project might appear unrealistic in the medium term, it was an attainable outcome at the end of 11 years of successful implementation. The Phase I DO was appropriately identified as setting the stage for full scale implementation and making a start in priority areas. The ICR views this aspect as satisfactory . Project Design. The project design was comprehensive in its scope and approach. It included realignment and restructuring (and closure where required) of all agencies of the government ­ the core CMAs, the line ministries and departments (MDAs) and the executive/subvented agencies. The strategy involved a detailed diagnosis and functional analysis of each agency followed by the preparation of an action plan and its implementation. The third component of the project focused on cross-cutting systemic reforms in HR Management, performance management, a coherent salary and incentive system and a management information system and the gradual phasing in of the public-private partnerships. The project design was thus consistent with the prevailing best practice. The implementation arrangements were, arguably, somewhat less robust. A central weakness of the design was to use the NIRP as the implementing agency. The fact that the NIRP Secretariat did not have adequate resources and capacity was recognized and Component IV of the project attempted to address this. What is more important is that NIRP in itself did not have the position and status within government to effectively lead and implement such a complex and comprehensive project. For example, the PSC and the OHCS which were targeted by the reforms, in fact saw themselves as potential implementing agencies. For influence and coordination within the government, the project design relied heavily on the NOC and the leadership of the incumbent Vice President. The design thus relied more on political drivers than on a combination of political and deeper government/civil service ownership. This was a risky approach in view of the fact that elections were due within a year of the project start date. Although, as noted earlier, the government had declared its commitment to comprehensive reform, wider stakeholder ownership (in particular within the concerned agencies) of the more detailed elements of the design during the project preparation stage and during implementation could have made the design more robust. Instead, the design relied consciously on a relatively top-down approach. The detailing of this aspect of the project was largely left to be determined by individual consultants and the NIRP. In this respect the design was mechanistic in that it did not recognize the reasons for which Ghana's public sector was stuck in the low level equilibrium in which it found itself. Wide stakeholder involvement of the relevant government agencies in the design of the reform agenda would have helped in defining a clear overarching vision and getting ownership within the government. This would have been particularly useful in view of - 6 - the fact that there was no previous experience of such projects in Ghana and no ESW work had preceded the project. It also appears that the stakeholder consultations that were made during project preparation did not elicit the honest opinion of the participants. Since the Bank could not finance most retrenchment payments, the project relied on the GOG for financing the bulk of severance benefits (about 87%), a central and politically sensitive component of the project. In theory, the financing was linked to the Economic Reform and Support Operation (ERSO) credit. In practice the link was informal and tenuous. As a minimum safeguard a "side letter" could have been requested from the Ministry of Finance confirming the agreement. Similarly, modernization/restructuring costs were not fully provided for. Originally, the project was significantly larger. The project size was subsequently scaled down when it was learnt that IDA could not finance the bulk of the retrenchments envisaged under the project. This could have led to reduced government interest and commitment to the project. With the exception of Component I, the monitoring indicators were not easily measurable and not clearly defined for the earlier stages of the project. This is borne out by the fact that the Key Performance Indicators tables in the PSRs were generally not filled out and evaluation during supervision relied largely on achievement of triggers for APL II used as surrogate indicators. Although the choice of the APL was justified in the context of the 11-year project and the risks, an alternative would have been to test the waters with a smaller pilot project. The case can be made that the APL, with the heavily front-loaded conditionalities and back-loaded financing, mitigated the highly risky nature of the project and that the choice was vindicated by the closure of the project at the end of Phase I. However, this raises the question whether the APL is a good choice when the balance of probability is biased towards failure. The ICR takes the view that this it is not, and that a small pilot would have better served the purpose of the pilot phase. For these reasons, the design is rated as unsatisfactory. Risk assessment and assumptions. The project design recognized the critical importance of government ownership - all the output to objective assumptions relate to government ownership. Although the risk posed by the impending elections was recognized it was not given not given a "high" rating. As it turned out, the project was stalled as a result of the change in government following the election. The project was identified as a high risk project and, as discussed above, the APL instrument was used for mitigating this risk. This aspect of the quality of the project is rated as unsatisfactory. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Overall, the achievement of objectives and outcomes at the end of Phase I was unsatisfactory. This conclusion is based on an evaluation of the relevance of the project objectives, and the efficacy and efficiency of the project in delivering these. It has already been noted that the project was relevant and that the intervention was timely. The overall project objective of improving efficiency, effectiveness, quality of public service delivery and increasing customer orientation, transparency and accountability is a long term objective expected to be achieved at the end of 11 years of successful implementation and it is not appropriate to evaluate achievement of this objective at this stage. The evaluation of the achievement of objectives at the end of Phase I is rendered somewhat difficult by this and the fact that Phase I indicators are not well defined and because the relative importance of the various components and sub-components was not indicated. Clearly, the relative cost shares cannot be treated as a surrogate for this. This - 7 - assessment is based, therefore, on a somewhat subjective evaluation of the achievements of Phase I outputs, the achievement of triggers for the launch of Phase II, and ratings of the various components in the PSRs. Based on this analysis, the project is rated unsatisfactory on the grounds that the achievement of Phase I outputs was sketchy and incomplete and many of the triggers were not met. More important, the pilot phase had not created the momentum for reform. When the project was closed, it had been virtually stalled for at least six months and the new government was undertaking an independent evaluation of the project. The fact that the APL did not progress beyond the pilot phase indicates that the expected project objectives of that stage were not achieved. A detailed description of the outputs by component is provided in the next sub-section. The main findings are summarized here. The best achievement of the program was under Component I­ Reform of SAs - arguably the most important element of the project. Without doubt, some success was achieved on the closure and commercialization of a few SAs. Limited progress was recorded on other aspects of SA reform including the SA Reform Bill and effective monitoring of SAs by ministries. Achievements on this sub-component were partially satisfactory. Under Component II of the program ­ Adjustment of central government structures and organizations (the core of the reform program) ­ the achievements were more limited. For the output "Organization and Management of CMAs made more efficient and with the staff size adequately curtailed to new mission and output targets", the KPI table identifies two outcome/monitoring indicators (triggers) ­ "CMAs realigned" and "Reorganization of CMAs completed". Against the former, the merger of Ministries of Finance and Planning into one (largely a result of a cabinet reshuffle) is noted as the solitary achievement. Against the latter it is noted that restructuring plans were prepared and implementation at closure was at various stages and that "concrete improvement in performance of the CMAs is hard to document". Based on this evidence, achievements under this component are rated as unsatisfactory. Under Component III ­ Improvement of Systems and Processes ­ the output "Development and introduction of a human resource management (HRM) system, a public private partnership (PPP) program, and a coherent public sector pay policy" translates in three outcome/monitoring indicators (triggers) ­ "HRM introduced in pilot government agencies"; "Adequate remuneration policy introduced" and "PPP Program implemented in key public sector agencies". Under the first, a new HR framework was developed but had not received government (cabinet) approval and was not implemented. With respect to the second, no pay reform strategy had been developed. With respect to the third, a PPP strategy had been developed and handed over to the (new) Ministry of Public Sector Development for implementation but not implemented. Overall, the achievement under this component is rated as unsatisfactory. 4.2 Outputs by components: 4.2.1 Reform of Subvented Agencies Under this component: (i) The NIRP Secretariat commissioned studies which resulted in restructuring proposals for forty eight (48) agencies. (ii) Subvention was withdrawn from four subvented agencies (Institute of Chartered Accountants, Ghana Institute of Management and Public Administration, GRATIS, Ghana University Press). Subvention was also withdrawn from the Ghana Science Association but was later reinstated on the national budget. (iii) Four agencies were closed down - International Students Hostel, National Revenue Secretariat, Armed Forces Sports Council Board, and the Confiscated Assets Committee. (iv) Four agencies (The National Theatre, Abibigroma, Ghana Dance Ensemble and National Symphony Orchestra) have now been merged into one institution ­ National Theatre Group (NTG) - 8 - - thereby reducing the administrative cost and enhancing operational efficiency. The NTG received support to become self-sustaining in 2005. (v) Kwame Nkrumah Memorial Park and W.E.B Du Bois Memorial Center are being transformed into foundations. The transformation process is expected to be completed by the end of 2004. (vi) Implementation of restructuring proposals for HOTTCAT and the Ghana News Agency were at various stages at the time of the ICR mission. (vii) The legal framework for the transformation of the subvented agencies was finalized and approved by Cabinet. (viii) A strategy for outplacement and alternative employment was developed and made operational. A total of 152 redundant staff were taken through the alternative employment program. (ix) A fully costed program for the reform of the entire subvented agencies sector was developed. Achievement of outputs under this sub-component is rated as partially satisfactory. 4.2.2 Adjustment of Structures and Organizations at the Central Government level This output is rated unsatisfactory because of the non-/slow implementation and, more importantly, lack of ownership of the restructuring efforts. Functional and institutional reviews and restructuring plans have been completed for all 11 central management agencies : Ministry of Finance (MoF), Office of Head of Civil Service (OHCS), National Development Planning Commission (NDPC), Controller and Accountant General's Department (CAGD), Public Service Commission (PSC), State Enterprises Commission (SEC), Ghana National Commission on Children (GNCC), National Commission on Women Development (NCWD), Ministry of Local Government and Rural Development (MLGRD), Ministry of Women and Children (MoWAC) and Ministry of Economic Planning and Regional Cooperation (MEPRC). MoF and MEPRC were later merged into Ministry of Finance and Economic Planning (MoFEP). Out of the total of eleven institutions, implementation has been completed in PSC, MLGRD and OHCS. Although all the eleven agencies have adopted new visions and mission statements this has not necessarily translated into a measurable positive outcome. Similarly, where all project tasks have been completed, this has not necessarily always translated into the desired outcomes largely because of limited ownership within the agency. The implementation status in the various agencies is as follows: (i) MoFEP: Final details of restructuring plans have not yet been accepted, and are with the MoFEP. Performance contract drafted but not yet signed. Meanwhile, the MoFEP has implemented some organizational and HR changes. (ii) CADG: No implementation to date (iii) OHCS: Implementation is reported to be on schedule. (iv) PSC: A new organizational structure has been adopted. Training of staff has been undertaken. The institution has been equipped with basic office equipment - computers and accessories, photocopiers, PABX system. All tasks were accomplished (v) SEC: Implementation was slow and unsatisfactory due to failure to pass SEC Bill which is hindering the operationalization of the new structure. (vi) MLGRD: Implementation was satisfactory. (vii) MOWAC (with GNCC & NCWD): Implementation was slow and unsatisfactory. (viii) MEPRC: Following the merger of MEPRC with MoF, this assignment was dropped. (ix) NDPC: No implementation to date. Achievement of outputs under this sub-component is rated as unsatisfactory 4.2.3 Improvement of Systems and Processes - 9 - (i) Regulatory Framework. A new regulatory framework for the public sector was developed. The regulatory framework covers the following areas ­ human resource management, performance management, development management. A committee made up Chief Directors and Regional Coordinating Directors discussed the framework and recommended it for approval by Cabinet in November 2002. However, the new framework is yet to be discussed and approved by Cabinet. This output is rated unsatisfactory. (ii) Public-Private Partnership (PPP) Strategy. A PPP strategy was developed. With the creation of a new Ministry for Private Sector Development, the strategy was given to the new ministry for implementation. The strategy is yet to be piloted in any of the ministries or government departments. This output is rated unsatisfactory. (ii) Policy Management. A Policy Coordinating, Monitoring and Evaluation Unit (PCME) was established by the project in the Office of the President (a later addition to the project) as an apex structure to work with the Policy Planning, Monitoring and Evaluation Divisions at NDPC and the Civil Service Ministries. The PCME also serves as a support unit to the Cabinet. Policy Management especially policy analysis and monitoring capacity has improved at Cabinet level and policy coordination among sectors has also improved. This sub-component is rated satisfactory. (iii) Public Sector Pay Policy Reform. This initiative was started in 2002 as an important part of the reforms but which until then had received inadequate attention. Project funds were used to support the development of a pay policy framework which has been approved by the Government. The process is on-going and currently being supported under a PHRD Grant. As a result of this the Public Services Commission and the Ministry of Manpower Development and Employment have initiated a national debate on public service pay to gather stakeholder inputs to build a performance-based salary structure and administration. The pay policy has not been developed but all the studies including a comparative analysis of pay structures of analogous positions in the private sector has been carried. All the studies are the necessary building blocks for the development of the pay policy. This sub-component is rated partially satisfactory. Achievement of outputs under this sub-component is rated as unsatisfactory. 4.2.4. Construction and operation of a Development Learning Center. The DLC was commissioned in June 2000 with the objective to provide training through video conferencing and the internet to senior public servants as well as people from the private sector and civil society. Since its inception, the DLC has provided training to over 10,000 people. Training has been provided in a wide variety of areas such as public administration, policy formulation, information technology, engineering, business management and several development management courses. The DLC is used by senior government officials to interact with counterparts in the African region to share experiences and learn from each other. The DLC facilities have been used by a wide range of organizations (for example, USAID, Ghana Armed Forces, DANIDA, Internal Revenue Service, Ghana Police Service, Ghana Health Service and the Ghana Aids Commission) to train their officials. Although links with the original project objectives are not very clear, the DLC performance is highly satisfactory. 4.3 Net Present Value/Economic rate of return: The economic benefits were expected to accrue from reduction in the number of public servants and - 10 - reduction in subventions to agencies closed down or commercialized. The employees of the four agencies that were shut down were provided employment else where so there was no net saving on this account. However, there would be savings on the other recurrent expenditures of the agencies that were shut down, taken off subvention or commercialized. No public servants were laid off from any of the MDAs/CMAs. 4.4 Financial rate of return: Not applicable. 4.5 Institutional development impact: Modest. The institutional development impact of the project is modest. The entire focus of the project ­ Reform of SAs, Restructuring of CMAs and Improvement of Government Systems and Processes - was on institutional development. Therefore, to the extent that the project did not deliver as planned, its institutional development impact was also limited. There are, however, a few exceptions. Within the SA component of the program GIMPA has been transformed into a commercially viable and apparently sustainable institution and the DLC is learnt to be functioning well. The NIRP assessment notes that there has been a positive impact on staff skills in GRATIS, GUP (SAs) and the Office of the Head of Civil Service (OHCS). Other than these modest gains, there does not appear to be any lasting impact on the institutions of government and the regulatory and enabling environment under which they function. In fact, the Head of Civil Service stated that the project had made no substantive contribution to the functioning of the OHCS. At the end of the project the capacity of NIRP (human resources and equipment) was considerably enhanced and of good quality. However, with no clear status for NIRP after the project concluded, project staff have been laid off and the institutional capacity has been lost. Similarly, if at all any capacity was built in the NOC to oversee programs of this kind, this has been lost as the NOC is no longer responsible for public sector reform. This is the risk associated with using institutions that do not have a formal position or a government mandate for a particular activity. Since the redundancy program has come to a halt, the Alternative Employment Program (AEP) that was set up under the project has no business, and its staff are being laid off. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: (i) Instability in terms of trade: In 1999 and 2000, the country's terms of trade worsened. With gold and cocoa (major foreign exchange earners for Ghana) prices being very low, and high prices for crude oil, the country experienced macroeconomic and fiscal instability. The macro economic situation deteriorated to such an extent that in 2000 the currency depreciated by 98% with inflation ending the year at about 60% percent. In addition, receipts from donors were lower than anticipated in 2000. This adversely affected the counterpart funding for the project. (ii) The change in administration following the 2000 general elections. In 2001, a new government was sworn into office. The new government reconstituted the NOC in May 2001. However, implementation of project activities slowed down as the new leadership of the agencies spent time reviewing the restructuring proposals. Subsequently the government took a decision to review the entire project and project implementation was stalled. 5.2 Factors generally subject to government control: - 11 - (i) Lack of Coordination and leadership. o Lack of coordination in the implementation of the various reform programs both within the government and between different development partners affected project implementation. o There was a lack of political sponsorship or commitment for the success of the reform. Though the VP chaired the NOC, the ability to effectively drive the reform agenda was limited. This was particularly evident after the elections. o From its inception, the project was affected by interagency politics between the OHCS and the NIRP Secretariat. This rivalry manifested itself in unhealthy competition between DFID sponsored Civil Service Performance Improvement Program (CSPIP), which was run by the OHCS and the PSMRP project being run by the NIRP. The PSMRP was perceived by the civil service as being imposed on the CMAs from above (NOC). NIRP thus assumed an enclave status as an external Project Implementation Unit (PIU), and the resistance to the PSMRP initiative can be partly attributed to this fact. (ii) Lack of ownership and commitment of CMAs to the reforms. o Because of the low level of involvement and limited capacity within the agencies, reform initiatives were being driven by external consultants. As a result, there was a lack of ownership to reforms. This was aggravated by the status of the implementing agency as the. The NIRP secretariat was outside the domain of the civil service and was resisted by the CMAs. Often the CMAs did not agree with the recommendations of the NIRP-appointed consultants and their suggestions, making the exercise worthless. o A number of the management teams did not fully accept the restructuring plans that were presented, and as a result, their commitment to the implementation of these plans was weak and resistance to change by the management of some of the institutions. (iii) Lack of counterpart funding. o Inability of the government to fund redundancies contributed to the difficulties experienced by the program. As a result, CMAs were unable to access the Alternative Employment Program (AEP). (iv) Poor service conditions The terms of employment offered by the government often made it difficult to fill some critical skill gaps and this impeded the CMAs' efforts to improve their performance. For example, on two occasions the PSC advertised to recruit a human resource manager and other senior staff but applicants who attended the interview were unwilling to accept the job offers because of the poor service conditions attached to the positions. 5.3 Factors generally subject to implementing agency control: (i) Weak communication between NIRP and the agencies. NIRP was responsible for appointing consultants for diagnostic studies of the targeted agencies. The concerned organizations were generally not consulted in the formulation of the terms of reference for the consultants, and often consultants were recruited without the knowledge of the agencies. In certain instances, the consultants did not engage the agency during the preparation of the reform proposal/strategies leading to resistance to the proposals. NIRP seemed not to be aware of this situation, thus allowing the resistance to grow. (ii) Poor standard of consultants. Some of the consultants who were provided by the consulting firms produced reports that were not of acceptable quality. For example, MDPI and ICA disagreed with the plans - 12 - prepared by the consultants since the work of the two groups of consultants were below the required standard. 5.4 Costs and financing: The total cost of the project was US$12.90 million compared with the PAD estimate of US$19.2 million. The lower project cost was because the government's counterpart funding was inadequate and implementation was not carried out in some agencies. The government did not provide funds for the retrenchment of staff from the CMAs. The Bank financed $12.20 million, and the government contributed US$ 0.70 million equivalent in local costs. 6. Sustainability 6.1 Rationale for sustainability rating: Unlikely. The project sustainability is rated as unlikely. This project was not a typical investment project and sustainability has to be understood and rated in this context. The project was mainly an institutional reform project and it sustainability is assessed on the basis of: (i) the sustainability of outcomes that were achieved at the end of the project; and (ii) by any momentum for further reform that might have been created as a result of the pilot phase. Although project outcomes were modest, a few might be sustained. For example, the closure or removal from subvention of SAs is likely to be irreversible (although one did get back on to the budget). Similarly, commercial viability of GIMPA is likely to be sustained. However, the more important outcome, a sustained and ongoing reform of SAs, has not resulted from the project as is evident from the fact that this does not now appear to be part of the Government's reform agenda. Based on available evidence, the sustainability of the reforms of the CMAs seems less likely. Without an enduring commitment to restructuring and a well defined vision for a redefined government, it is unlikely that any reform momentum in this area will be maintained. On systems and processes, project outputs were mostly not implemented and, as such, there is not much to sustain. However, there are indications that system improvements, particularly in civil service management, and pay reform are part of the government's public service reform agenda. Thus the key determinant of unlikely sustainability is the lack of ownership of key reform components on the part of the government. A final judgment can only be made when the present government unfolds its new public sector reform strategy. 6.2 Transition arrangement to regular operations: This is not strictly relevant in the context of this project as the project has been closed prematurely. The project was managed by the NIRP under the guidance of the NOC. Since the project has been closed, the contracts for the staff of the NIRP Secretariat have not been renewed and the Secretariat has been shut down. The focal point for public sector reform has now been shifted by the government to the Senior Minister's Office (SMO). 7. Bank and Borrower Performance Bank 7.1 Lending: - 13 - Unsatisfactory. This assessment is based largely on the same criteria used for assessing the quality at entry ­ objectives, design, assessment of risks and assumptions. In addition, Bank performance during preparation and at appraisal is also evaluated as a consideration for this rating. It is reiterated that although the objectives were relevant, there were some weaknesses in the design and that critical risks were underestimated though this was partially mitigated by the choice of the APL instrument. Although this is not formally reflected, there were frequent changes of Task Managers during the process of dialogues with government and project preparation. This affected continuity and put pressure on succeeding Task Managers to deliver quickly. The pre-appraisal Regional Operations Committee (ROC) meeting had specifically directed the team to: (i) to concentrate on implementation arrangements for the first 18 months of the project to ensure initial success points; (ii) articulate and specify the commitment of the GOG; (iii) simplify the operation; and (iv) lay down the following conditions for effectiveness ­ an action plan for the introduction of a uniform salary structure, a legal framework for the reform of SAs and the roles and responsibilities to be fulfilled at the central government level. On these the PAD made the following assessment: (i) that training, hiring of new staff and support from foreign consultants (during, not before project implementation) was sufficient for creating the appropriate implementation capacity in the NIRP secretariat; (ii) the appointment of the VP as chair of the NOC, and the issuance of PUSERMOS were sufficient signals of strong government commitment and, further, that there is also a broad consensus about the need for public sector reform, "that goes beyond the current government, and will keep successive governments committed to reform". No significant change was made to simplify the project design. More attention should have been paid to the capacity and ability of the NIRP and firmer signals of government commitment sought. In a complex and politically difficult project such as this, a few cases of SA reform and CMA restructuring could have been piloted during preparation as test cases. With hindsight, the balance of evidence suggests that the conditions at appraisal did not indicate complete readiness for implementation of such a challenging and politically difficult program. In the circumstances, and particularly in view of the impending elections, a viable option might have been to test the waters with a 2-3 year pilot. The project risks were recognized and the choice of the APL instrument sought to address these by placing stiff conditions for moving to the next phase and by reducing Bank exposure in the earlier. The choice of the instrument indicated more optimism than was reasonably justified. It is possible to take the view that the design and preparation were sound and that the unsatisfactory outcome was entirely due to lack of political commitment and the change in government following the elections. The ICR does not agree with this and is of the view that potential pitfalls were not adequately addressed in the design stage. 7.2 Supervision: Satisfactory. The complexity of the design, the inadequate preparedness for implementation and the change in government resulting from the elections made this a challenging and difficult project to supervise. In the circumstances, the Bank's performance during the implementation of the project is rated satisfactory. Sufficient budget and staff resources were allocated, and the project was regularly supervised and monitored. Project Status Reports (PSRs) were updated regularly and during the (approximately) four years of project implementation 16 PSRs were filed. As the TTL was based in Ghana till August 2000 and in regular touch with project implementation, formal supervision missions were fielded only after that ­ a - 14 - total of nine missions in the remaining three years of the project. The review teams included specialists in public sector, financial management, and procurement as required. A joint mid-term review was conducted with DFID in April 2001. Following supervision missions, aide-memoires flagging outstanding issues and underscoring benchmarks for actions were regularly prepared and transmitted. These alerted the government and the implementing agencies to problems with project execution and suggested appropriate remedies, in conformity with Bank procedures. Delays in implementation were noted and the Bank task team provided suggestions for taking steps for putting the project back on track and pace. The TTL made effective use of the triggers and the APL to send a strong message to the government, to expose the lack of commitment of the government and to close the project at the end of the first phase. With a few notable exceptions, the PSRs provide a realistic and consistent rating of performance of the project both in terms of achievement of development objectives (DO) and implementation progress (IP). Some of the changes in the ratings during 2002 are not well explained and apparently not supported by the evidence. The sequence of events during this period suggests that though in 2002 the Bank had seen the writing on the wall, it continued to accommodate the government promises and remained optimistic for longer than the circumstances seemed to justify. There appears to have been a blind spot on government commitment to the project and the NIRP's ability to continue to steer the project in a situation where it did not have the confidence of the government. Although the Bank's client relationship appears to have been generally cordial and productive, there are some indications of difficulty in dealing with the new government following the election. The PSR (#6) of 8/20/2001 notes " The mission expressed concern about some negative statements about goals and objectives of the PSMRP from a member of the Government. It is also troubling that the draft Ghana Poverty Reduction Strategy (GPRS), which was communicated to the World Bank some weeks ago, ignored much of the work that has been done under the PSMRP and the NIRP." This could have been interpreted as a signal of impending problems that surfaced in 2002. As there was no formal Monitoring & Evaluation (M&E) system, the Bank team used the PSRs and the aide-memoires for this purpose. Probably for this reason, the KPI tables in the PSRs were not filled out till the last two PSRs. As a substitute, the assessment of triggers for Phase II (available from December 2001) provides a systematic assessment of progress/achievements. 7.3 Overall Bank performance: Unsatisfactory. In view of the unsatisfactory rating in lending activities and the qualified satisfactory rating during supervision, the overall performance of the Bank in the project is rated unsatisfactory. The design of the project was complex, there was insufficient preparedness on the part of the client at the time the project became effective, insufficient evidence of sustained government commitment (specially in view of the elections) to the politically difficult aspects of the reforms, insufficient buy-in from the various agencies that fell within the ambit of the project and an implementation agency (NIRP) that did not have sufficient authority within the system to successfully implement such a program. These initial conditions made supervision difficult. In the circumstances, supervision was largely satisfactory with the exception of the short period in 2002 described in the previous section. Borrower 7.4 Preparation: - 15 - Unsatisfactory. Borrower performance in lending is assessed as unsatisfactory. Unlike typical investment projects, the project was a comprehensive government reform project that required complete government ownership and commitment for success. It appears that the Borrower had not recognized the significance of this and the need for buy-in not only at the higher levels of government but within the various CMAs, MDAs and SAs that were the subject of reform. Involvement of these various agencies during the preparation phase and, more important, in the development of the detailed reform agenda would have much better prepared the government for implementation. More specifically, the NIRP was an insufficiently empowered institution (within the government system) to lead this project and clearly not equipped for the task at hand. 7.5 Government implementation performance: Unsatisfactory. The government implementation performance was unsatisfactory. It did not maintain its commitment throughout the implementation period. It was not very responsive to take corrective implementation measures, and was not effective in dealing with outstanding operational issues. There was a lack of ownership and commitment of CMAs to the reforms. There was a lack of political sponsorship or commitment for the success of the reform from the NOC even though the Vice President chaired the NOC. The project suffered from counterpart funding problems. By the end of the project, the government had provided only US$ 700,000. The change of government in January 2001 (just 16 months after effectiveness), and the new government's decision to take another look at the PSR reform agenda significantly slowed down implementation and eventually stalled the project. 7.6 Implementing Agency: Unsatisfactory. The NIRP Secretariat was competent in dealing with technical aspects of project management - procurement, disbursement, reporting, etc. Records relating to the IDA disbursements were kept properly, and easily accessible; expenditures documented under the Statement of Expenditure were all found to be eligible for financing under the credit; plans provided information on the type of procurement planned under the project, details of the processing steps, as well as the time required for each processing step till completion. On the other hand, the performance of NIRP in the substantive aspects of project implementation and coordination was unsatisfactory. It did not provide proactive follow-up to mitigate implementation bottlenecks, especially when agencies were complaining about the top-down attitude of some of the consultants. In some cases, the NIRP secretariat continued to award contracts to consultants without consulting the agencies concerned even though some of the agencies suggested that they should be part of the recruitment process. Some of the consulting firms produced reports that were of low quality, but NIRP did not take any corrective measure and even continued to make payments to the consultants. 7.7 Overall Borrower performance: Unsatisfactory. Based on the above, the overall performance of the Borrower was unsatisfactory. 8. Lessons Learned o High level of ownership and commitment is critical for public sector reform. In most investment projects, reforms are typically complementary to the project. Public sector projects are different as reform/change is the heart of the project. It is not possible to successfully implement a public sector reform project without complete ownership of and commitment to the program within government. The program must originate from within the Government and development and implementation of reform plans should be - 16 - in active consultation with the targeted agency and its leadership. Where there are fiscal implications, the formal commitment of the Ministry of Finance should be a requirement. o Need for strong evidence of political commitment and stakeholder support. Credible evidence of political commitment to the difficult aspects of the reform should be available at the time of appraisal. In the case of a change in government, continuation of the project (in this case, extension) should be subject to similar indications of commitment. Signals of credible commitment to such cross-cutting public sector reform can potentially come from three sources: (i) top level politicians and politically appointed bureaucrats; (ii) career (senior/middle level) civil servants; and (iii) citizens and civil society. This project relied on (i), whereas it might have been more prudent to have the support of at least two of these three sets of stakeholders. Finally, actions rather than statements of intent, provide reliable evidence of commitment. o Need to recognize the importance of political cycles. For difficult public sector reform projects, it might be a good idea to keep the project life within the life of the government. In any event, starting implementation such a short time before elections (about a year in this case) is not prudent. o Choice of instrument. It most cases it might be too much to expect sustained commitment to reform over an eleven year period. Although, in the circumstances, the choice of the APL instrument mitigated this risk it might have been more prudent to test commitment with a 2-3 year pilot. o The implementing and coordinating agency needs to have suitable authority. In a project such as this, the implementing agency should have sufficient authority and respect within the system to carry the project. The wider the scope of the project, the harder it will be to find such an agency within government. o Keep the project focused. The scope of the project should be limited to components that are inter-related and within which there is a synergy. Widening the scope of the project in the absence of such synergies increases the implementation and supervision challenges with few compensating benefits. o Linkages between components of a reform and the sequencing of those reforms need to be recognized at design and implementation stage. For example, the cross cutting (horizontal) reforms should ideally precede the institutional realignment and restructuring (vertical) reforms providing a framework for the latter. o Appropriate monitoring and evaluation mechanisms are required to monitor the impact of the reforms. Confusion appears to have arisen in Phase I concerning the difference between monitoring and managing the implementation of reforms (monitoring inputs) and monitoring the impact of those reforms. M&E needs to cover the: (i) implementation of the individual restructuring plans; (ii) performance of the restructured entities; and (iii) overall impact of the reforms. o For consultancy-intensive projects the supply side is of critical importance. The appraisal should have taken a more careful look at the availability of high-quality consultancy services as this was a critical input into the project, and the one that turned out to be a constraint. 9. Partner Comments (a) Borrower/implementing agency: The Borrower did not provide any assessment of the project. No comments were received. - 17 - (b) Cofinanciers: (c) Other partners (NGOs/private sector): N/A 10. Additional Information A. The Bank's ICR Team consisted of the following members: Vivek Srivastava (Sr. Public Sector Specialist and Task Team Leader) Smile Kwawukme (Public Sector Specialist ) Sati Achath (Consultant) Mavo Ranaivoarivelo (Program Assistant) B. List of Task Team Leaders of the project in chronological order: (i) David Steedman (ii) Guenter Heidenhof (iii) Yongmei Zhou (iv) Vivek Srivastava - 18 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate - 15 Subvented Agencies closed down or GIMPA commercialized and has become restructured. more efficient. Subvention withdrawn from the following: Institute of Chartered Accountants, GRATIS, Ghana University Press. Four agencies (International Students Hostel, National Revenue Secretariat, Armed Forces Sports Council Board, and the Confiscated Assets Committee) have been closed down. Four agencies (The National Theatre, Abibigroma, Ghana Dance Ensemble and National Symphony Orchestra ) were merged into one agency to improve operational efficiency. Other agencies (such as GUP, Kwame Nkrumah Memorial Mausoleum, W.E.B. Du Bois Center, Ghana News Agency) are yet to complete their restructuring plans - Program to reform the entire subvented Draft Subvented Agencies Bill does not agency-sector approved. address critical issues regarding the governance framework for the subvented agencies. Monitoring of establishment, wage bill, performance remains extremely weak. - Central Management Agencies realigned. The Ministry of Finance and the Ministry of Economic Planning and Regional Cooperation were merged in March 2003 to become Ministry Finance and Economic Planning. - Reorganization of Central Management Restructuring reports for all CMAs were Agencies completed. completed in 2001 and early 2002. Implementation taking place in CMAs. However, concrete improvement in performance of the CMAs is hard to document. - Human resource management system New HR framework developed. This introduced in pilot government agencies. framework is yet to be approved by Cabinet. - Adequate remuneration policy introduced. Pay reform strategy not yet developed. Data are being collected through ongoing public sector census, gov-wide functional reviews, public-private sector pay comparison study. - Public Private Partnership Program PPP strategy and program was developed. implemented in key public sector agencies. However, the implementation of the program was transferred to new the Ministry of Private Sector Development in 2001. Output Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate N/A 1End of project - 19 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million Component 1: Reform of the Subvented Agencies 8.50 5.90 69.4 Component II: Adjustment of Structures and Organizations 3.60 3.50 97.2 at the Central Government Level Component II1: Improvement of Systems and Processes in 0.60 2.10 350 Ghana's Public Sector Component 1V: Project Management for Change Process 1.70 1.40 82.3 Unallocated Funds 3.00 0.00 PPF-Refinancing 1.00 0.00 Total Baseline Cost 18.40 12.90 Physical Contingencies 0.80 0.00 Total Project Costs 19.20 12.90 Total Financing Required 19.20 12.90 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB NCB 2 N.B.F. Total Cost Other 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.20 0.30 0.00 0.50 (0.00) (0.20) (0.20) (0.00) (0.40) 3. Services 0.00 0.00 10.20 0.00 10.20 (0.00) (0.00) (9.50) (0.00) (9.50) 4. Operating Costs 0.00 0.00 4.50 0.00 4.50 (0.00) (0.00) (0.80) (0.00) (0.80) 5. PPF Refinancing 0.00 0.00 1.00 0.00 1.00 (0.00) (0.00) (1.00) (0.00) (1.00) 6. Unallocated funds 0.00 0.00 3.00 0.00 3.00 (0.00) (0.00) (2.60) (0.00) (2.60) Total 0.00 0.20 19.00 0.00 19.20 (0.00) (0.20) (14.10) (0.00) (14.30) Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB NCB 2 N.B.F. Total Cost Other 1. Works 0.00 0.00 0.33 0.00 0.33 (0.00) (0.00) (0.30) (0.00) (0.30) 2. Goods 0.68 0.51 0.98 0.00 2.17 - 20 - (0.61) (0.46) (0.88) (0.00) (1.95) 3. Services 6.74 1.41 1.55 0.09 9.79 (6.74) (1.41) (1.25) (0.00) (9.40) 4. Operating Costs 0.00 0.00 0.49 0.00 0.49 (0.00) (0.00) (0.43) (0.00) (0.43) 5. PPF Refinancing 0.00 0.00 0.15 0.00 0.15 (0.00) (0.00) (0.15) (0.00) (0.15) 6. Unallocated funds 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 7.42 1.92 3.50 0.09 12.93 (7.35) (1.87) (3.01) (0.00) (12.23) 1/Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2/Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. Component 1: Reform of 6.90 1.60 5.40 0.50 78.3 31.3 the Subvented Agencies Component II: Adjustment 1.80 1.80 3.40 0.10 188.9 5.6 of Structures and Organizations at the Central Government Level 0.60 0.00 2.10 0.00 350.0 0.0 Component II1: Improvement of Systems and Processes in Ghana's Public Sector Component 1V: Project 1.70 0.00 1.30 0.10 76.5 0.0 Management for Change Process Miscellaneous (Price 3.30 1.50 0.00 0.00 0.0 0.0 Contingency, Unallocated, PPF-Refinancing) - 21 - Annex 3. Economic Costs and Benefits Not Applicable - 22 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Supervision 12/13/2000 1 TTL (1) S S 08/15/2001 2 TEAM LEADER (1); S S GOVERNANCE SPECIALIST (1) 10/05/2001 3 TEAM (2); TL (1) S S 02/01/2002 3 TTL (1); PSM SPECIALIST (2) U U 04/26/2002 3 TEAM LEADER (1); TEAM U S MEMBER (2) 06/14/2002 2 GOVERNANCE SPECIALIST S S (1); TTL (1) 10/18/2002 3 TTL (1); CO-TTL (1); U S TEAMMEMBER (1) 01/27/2003 2 TTL (1); IMPLEMENTATION U U SPEC (1) 03/20/2003 1 PUBLIC SECTOR (1) U U ICR (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Supervision 122.7 207.1 ICR 9.5 21.5 Total 132.2 228.6 - 23 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies H SU M N NA Sector Policies H SU M N NA Physical H SU M N NA Financial H SU M N NA Institutional Development H SU M N NA Environmental H SU M N NA Social Poverty Reduction H SU M N NA Gender H SU M N NA Other (Please specify) H SU M N NA Private sector development H SU M N NA Public sector management H SU M N NA Other (Please specify) H SU M N NA - 24 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating Lending HS S U HU Supervision HS S U HU Overall HS S U HU 6.2 Borrower performance Rating Preparation HS S U HU Government implementation performance HS S U HU Implementation agency performance HS S U HU Overall HS S U HU - 25 - Annex 7. List of Supporting Documents 1. Aide Memoires, Back-to-Office Reports, and Project Status Reports. 2. Project Progress Reports. 3. Consultant Study Reports financed under the Project. 4. Project Appraisal Document for Ghana: Public Sector Management Reform Project, dated April 6, 1999 (Report No. 19004-GH). 5. Development Credit Agreement for Ghana Public Sector Management Reform Project 6. Ghana Public Sector Reinvention and Modernization Strategy: Transforming Vision into Realty 7. Republic of Ghana: Public Sector Reform - Towards A Future Strategic Framework, Price Waterhouse, April 2003 8. Last Letter to Government of Ghana requesting for Borrower's assessment - 26 - - 27 -