The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) REPORT NO.: RES27893 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ECONOMIC GOVERNANCE TECHNICAL ASSISTANCE AND CAPACITY BUILDING APPROVED ON MARCH 20, 2012 TO MINISTRY OF PLANNING AND ECONOMIC DEVELOPMENT (MPDE) GOVERNANCE AFRICA Regional Vice President: Ousmane Diagana Country Director: Coralie Gevers Acting Regional Director: Francisco Galrao Carneiro Practice Manager/Manager: Alexandre Arrobbio Task Team Leader(s): Saidou Diop, Murielle Laurette Irina Edon Babatounde The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) ABBREVIATIONS AND ACRONYMS AE Commitment Authorization (Autorisation d’engagement) AF Additional Financing Public Procurement Regulatory Authority (Autorité de Régulation des Marches ARMP publics) COVID-19 Corona Virus Disease 2019 National directorate of Information Technology (Direction Nationale des Systèmes DNSI Informatiques) EGTACB Economic Governance Technical Assistance and Capacity Building EHCVM Harmonized survey on household living conditions ENSEA National School of Statistics and Applied Economics Civil servant information system (Fichier Unique de Gestion Administrative et FUGAS Salariale) GAR Gestion Axée Résultats IDA International Development Association IFR Interim Financial Reports INS National Statistical Institute (Institut National des Statistiques) IRI Intermediate Results Indicators ISR Implementation Status & Results Report IT Information Technology LORLF Organic Law on Finance Laws (Loi Organique Relative aux Lois de Finance) Ministry of Civil Service and Modernization of Public Administration (Ministère de MEPS la Fonction Publique et de la Modernisation de l’Administration) MFPREMA Minister of Public Service and State Modernization MPDE Ministry of Planning and Economic Development PDO Project Development Objectives PFM Public Financial Management PIM Public Investment Management PIP Public Investment Plan PNDES National Economic Development Plan RGE General Census of Enterprises SIGPIP System and Management of the Public Investment Program SIGMAP Système Intégré de Gestion des Marchés Publics SNLC Ani COVID 19 national Strategy (Stratégie Nationale de Lutte contre le COVID 19) Government ‘s Financial transactions table (Tableau des Operations Financières TOFE de l’Etat) US$ United States Dollar The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) BASIC DATA Product Information Project ID Financing Instrument P125890 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 20-Mar-2012 30-Jun-2021 Organizations Borrower Responsible Agency Ministry of Economy and Finance,Ministry of Planning and Project Coordination Unit (PCU) - UCEP,Project Economic Development (MPDE) Coordination Unit (PCU) - UCEP Project Development Objective (PDO) Original PDO To re-establish and strengthen basic systems and practices to improve the management of public financial and human resources in Guinea. Current PDO The project development objective (PDO) is to modernize public financial and human resource management and enhance statistical capacity in Guinea. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D2000 09-Jun-2017 26-Jul-2017 12-Dec-2017 30-Jun-2021 22.00 7.20 15.39 IDA-V0860 25-May-2017 30-Jun-2017 30-Jun-2017 12-Dec-2017 0 0 0 IDA-H7650 20-Mar-2012 23-Apr-2012 17-Oct-2012 31-Dec-2017 9.87 9.37 0 TF-12640 23-Apr-2012 23-Apr-2012 17-Oct-2012 31-Dec-2014 .14 .14 0 The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The Economic Governance Technical Assistance and Capacity Building (EGTACB) Project was approved in the amount of US$9.87 million by the International Development Association (IDA) Board on March 20, 2012. An Additional Financing of US$22 million was approved by the IDA Board on June 9, 2017 and became effective on December 12, 2017. The project has made important implementation progress since its original effectiveness on October 17, 2012. The original financing allocation was almost fully disbursed (95 percent) and overall project disbursement has reached 52 percent. The project’s performance was rated Moderately Satisfactory (MS) for both Project Development Objectives (PDO) and Implementation Progress (IP) in the latest Implementation Status and Results (ISR) report (archived on March 31, 2020). Implementation Progress across each of EGTAB's components is summarized below. a. Component 1: Strengthening basic public expenditures management. Through this component, audit of Public Financial Management (PFM) systems has been completed, including budget preparation and execution; public accounting system; production of financial statements; and Government ‘s Financial transactions table (Tableau des Operations Financières de l’Etat) (TOFE). A project-financed consultant is currently developing a strategy to integrate the various systems. A Public accounting system has been agreed to be urgently carried out by the project within the limits of existing financing and subject to the implementation of the activity within the current implementation period. The procurement package for the system will be based on the technical specifications prepared by European Union consultants. A budget execution manual has been developed and an action plan for incorporating the innovations in this manual into the budget execution software (LEB) is planned to be developed by a firm to be financed through the project. Progress secured to date is reflected in achievement of PDO indicators with the share of public contracts procured through open competition reaching 86 percent, exceeding the end of project target of 80 percent. The proportion of the Public Investment Plan (PIP) 2019 -2021 included in the investment budget has increased from 0 percent (at baseline) to 36 percent (against an end-project target of 40 percent). Important progress has also been secured across relevant Intermediate Results Indicators (IRIs) for this component. The average rate of execution of public procurement commitment plans in the targeted three sectoral ministries has reached 81.5 percent (against a target of 85 percent), while 35 percent of public investment proposals were prepared according to agreed procedures (against a target of 90 percent). Meanwhile, activities are underway to support achievement of remaining IRIs. b. Component 2: Improving Human Resource Management. Through this component, the Ministry of Public Service and State Modernization (MFPREMA) has advanced Government Human Resource Management as demonstrated by achievement of PDO indicators and IRIs relevant to this component. The discrepancy between the civil service database and the payroll has decreased to 3.6 percent, close to the end of project target of 2 The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) percent. Meanwhile, 17,985 additional public agents have been registered in biometric census against a target of 30,000. While a consultancy firm has carried out a feasibility study and proposed three options to MFPREMA for development of the civil servant information system (FUGAS), the system will no longer be supported by the project due to COVID-19 re-prioritization. c. Component 3: Statistical capacity development. Data collection for the Harmonized Survey on Household Living Conditions (EHCVM) was completed in July 2019 while preparation for the General Census of Enterprises (RGE) is underway. These developments anchor achievement of the PDO indicator relevant to this component. The National Statistical Institute (Institut National des Statistiques) (INS) is in the final phase of publishing the results of the EHCVM and the RGE; upon which two out of the three statistical products targeted by the PDO indicator on statistical products (household survey, national accounts) completed and published in line with international standards would be met. The third statistical product, enterprise census has been interrupted by the COVID-19 pandemic. Development initiatives for young Guinean statisticians is progressing well; as a result, scholarships were awarded to 14 Guineans in African Schools of Statistics, and the recruitment of young professional statisticians was completed. This has exceeded the IRI target of training of 5 Statisticians or equivalent from regional statistics or demography schools. Outstanding activities under this component include the publication of the results of the Harmonized Survey on Household Living Conditions. To increase HR statistical capacity, there is also a need to train middle level managers in statistics. This is planned through the National School of Statistics and Applied Economics (ENSEA) in Abidjan, as a follow up to a technical assistance program financed by the European Union. Finally, new poverty indices (poverty incidence, poverty gap, poverty severity) through the household survey have been developed. d. Component 4: Project management. The project management team is in place and is fully operational. The outgoing project coordinator has been satisfactorily replaced by a new coordinator who assumed duties on April 1, 2020. Interim Financial Reports (IFR), and Annual audited financial statements are submitted on time and are of acceptable quality for the World Bank. 2. Project fiduciary (financial maangement and procurement) is adequate to support project implementation. The project has been submitting acceptable interim financial reports (IFR) and annual audited financial statements on time and there are no outstanding IFRs or audit reports. There are no unsettled ineligible expenditures with respect to the project. In terms of procurement, the project is implementing the Systematic Tracking of Exchanges in Procurement (STEP): A World Bank planning and tracking system which provides data on procurement activities and establishes benchmarks. The project has been timely submitting updates to the procurement plan through STEP and updates have been duly approved by the World Bank. B. Rationale for restructuring 3. Project restructuring is proposed in line with Government’s request, to support Guinea’s response to the Corona Virus Disease 2019 (COVID-19) crisis. Project restructuring is intended to support Government’s coordination and management of the COVID-19 response. The proposed restructuring aims at reinforcing results achieved by the project to date and ensuring their sustainability while adapting interventions to address challenges arising from the COVID- 19 crisis. To that end, the restructured project aims to: (i) support intergovernmental coordination of the economic and social response to the COVID-19 crisis; (ii) strengthen public resources mobilization; and (iii) support public administration continuity for improved management of the COVID-19 crisis. Moreover, the Government has requested an extension of the closing date from June 30, 2021 to June 30, 2022. This comes in response to implementation delays, including postponement of capacity building activities and implementation support missions, The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) resultant from social distancing and lockdown measures taken by authorities to address challenges raised by COVID- 19. II. DESCRIPTION OF PROPOSED CHANGES 4. This Restructuring Paper (RP) seeks the approval of the Country Director for the proposed restructuring of the EGTCAB project. This restructuring proposal is in response to the request from the Government of Guinea through a letter dated June 23, 2020 (n°0441/MPDE/SG/CAB/DNID/DSE/20). The following changes to the project were requested by the Government: (a) Change to the financing plan (change to cost of original project components) by reallocating resources across project components to support improved coordination and management of the COVID- 19 crisis; (b) Change to scope of original project components to reflect the proposed financing reallocation; (c) Change to Results Framework to reflect revised scope of original project components; and (d) No-cost extension of the project closing date by one year, from June 30, 2021 to June 30, 2022. 5. The restructuring proposes to finance new and scale-up several existing activities supportive to improved management of the COVID-19 crisis. New and scaled-up activities are aligned with original project components and will be integrated within these components. Under Component 1 (Strengthening basic public expenditures management), new activities shall include development of a Treasury department information system, acquisition of an electronic declaration and payment system (e-tax portal), young professional capacity development on tax in the mining sector, a PIM Information System, a COVID-19 impact evaluation on the economy, and development of tools and systems to facilitate teleworking. Under Component 2 (Improving Human Resource Management), activities will be scaled-up in support of improved intergovernmental coordination of the economic and social response to the COVID-19 crisis. New capacity building activities shall be availed to support the scientific committee and to the COVID- 19 National Response Strategy Committee (SNLC). Under Component 3 (Statistical capacity development), a COVID- 19 impact survey will be carried out by INS, and several existing activities will be scaled-up, including around strengthened statistical capacity and development of a public accounting system. While the impact evaluation aims to assess pandemic consequences on different aspects of the economy, the impact survey will target citizens to be aware of how they are dealing with the pandemic (e.g. do they have access to telephone to pay expenses, did lack of electricity prevent children from attending distant schooling, is it more difficult to have access to food etc.). Under Component 4 (Project management), the project coordination unit’s capacity has shall be further strengthened and additional financing allocation shall be provided to support the unit’s office space rental costs across the extended project duration. 6. To finance new and scaled-up activities in support of Government’s emerging needs, several initially planned activities are proposed to be cancelled. These activities have been assessed by Government and the World Bank as being of lower priority within the evolving COVID-19 context. Activities proposed to be cancelled include development of SIGMAP(Système Intégré de Gestion des Marchés Publics) and FUGAS (Fichier Unique de Gestion Administrative et Salariale), training on leadership and Gestion Axée Résultats (GAR), monitoring and evaluation software for the Prime Minister’s Office, intranet for the Prime Minister’s Office, and capacity building in procurement and the National Directorate of Information Technology (Direction Nationale des Systèmes Informatiques) (DNSI). Based on a detailed review of implementation progress of activities and disbursements, it is proposed to reallocate the project proceeds as presented in Table 1 below. An additional US$0.5 million and US$0.7 million will be allocated to Component 3 (Statistical capacity development) and Component 4 (project management) respectively. These resources will be mobilized through an equivalent reduction (US$1.2 million) of the financing envelope for Component 1 (Strengthening basic public expenditures management). The financing allocation for Component 2 (Improving Human Resource Management) will remain unchanged. Importantly, reallocation has also been proposed within each of the four project The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) components to re-orient activities to more closely support Government’s COVID-19 response and public administration continuity i.e. while the financing allocation for Component 1 is overall reduced, reallocation of remaining amounts will facilitate financing of newly proposed component activities. 7. No-cost extension of the project closing date by one year, from June 30, 2021 to June 30, 2022, is also proposed. This comes in response to implementation delays, including postponement of capacity building activities and implementation support missions, resultant from social distancing and lockdown measures taken by authorities to address challenges raised by COVID-19. One year no-cost extension will facilitate re-planning of implementation timelines with due consideration for COVID-19 related delays and implications, whilst also helping to re-organize the project around restructured project activities. 8. These proposed changes are not expected to negatively impact upon achievement of the PDO. The PDO continues to remain relevant and is proposed to be maintained; new proposed activities are in line with the initial project scope and the restructured project will continue to support critical reforms related to modernizing public financial and human resource management and enhancing statistical capacity in Guinea. Implementation of new activities proposed as part of the restructuring will contribute to PDO achievement, including through support to intergovernmental coordination of the economic and social response to the COVID-19 crisis and public administration continuity during the crisis and strengthening public resources mobilization. However, some changes to the Results Framework are proposed to reflect the revised scope of origninal project components. Given the decision to no longer proceed with development of the civil servant information system (FUGAS), the PDO indicator on Discrepancy between MEPS civil service database and the payroll is proposed to be dropped. This will be replaced by a new PDO indicator on Number of Ministries equipped with remote work tools for Component 2, alongside a new IRI measuring Number of Ministries holding virtual meetings. Registration of public agents in biometric census will continue to be tracked. The IRI on Number of sector implementing Aggregate Citizen Report Card scores which does not correspond to any existing or new project activities is also proposed to be dropped. . These proposed changes to the results framework are detailed in Table 2 below. The complete revised results framework is included in Annex 1. The proposed financing reallocation (across and within components) ensures that there is requisite financing to implement maintained and newly proposed activities, and consequently that achievement of the revised Results Framework. Table 1: Summary of resources allocations by Component (US$) Restructuring Initial Amount Undisbursed Revised Project Components Allocation Disbursed Amount Reallocation Covid-19 Continuity allocation Strengthening basic public expenditures management 12,500,000 1,126,231 11,373,769 (1,200,000) 6,800,000 3,373,769 11,300,000 Improving Human Resource Management 4,000,000 672,314 3,327,686 2,700,000 627,686 4,000,000 Statistical capacity development 4,000,000 2,826,226 1,173,774 500,000 500,000 673,774 4,500,000 Project management 1,500,000 985,532 514,468 700,000 514,468 2,200,000 22,000,000 5,610,303 16,389,697 0 10,000,000 5,189,697 22,000,000 Table 2: Summary of Changes to PDO INDICATOR (Component 2) and intermediate results indicator for Component 1 The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) Baseline End-Target Original Indicator Unit Rationale (2021) Dropped: Discrepancy Budget for Component 2 between MEPS civil service Percentage 8.00 2.00 has been reallocated. database and the payroll. Dropped: Number of sector implementing Aggregate Budget for Component 1 Percentage 0 3 Citizen Report Card scores has been reallocated. (Percentage) (Percentage) Development of tools and New: Number of Ministries systems to facilitate equipped with remote work Number 10 30 teleworking under tools Component 2. Development of tools and New (IRI): Number of systems to facilitate Ministries holding virtual Number 0 10 teleworking under meetings Component 2. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Strengthening basic public Strengthening basic public 12.50 Revised 11.30 expenditure management expenditure management Improving Human Resource Improving Human Resource 4.00 Revised 4.00 Management Management Project Management 1.50 Revised Project Management 2.20 Strengthening Statistics Strengthening Statistics Capacity 4.00 Revised 4.50 Capacity TOTAL 22.00 22.00 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-D2000 Effective 30-Jun-2021 30-Jun-2022 30-Oct-2022 30-Jun-2017, 31- IDA-H7650 Closed 31-Dec-2016 Dec-2017, 17-May- 29-Dec-2017 29-Apr-2018 2018 IDA-V0860 Closed 12-Dec-2017 21-Feb-2018 The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) 31-Dec-2014, 07- TF-12640 Closed 31-Dec-2013 May-2015 . The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) . Results framework COUNTRY: Guinea Economic Governance Technical Assistance and Capacity Building Project Development Objectives(s) The project development objective (PDO) is to modernize public financial and human resource management and enhance statistical capacity in Guinea. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 Basic expenditure management strenghthened Public contracts procured through 15.00 25.00 35.00 45.00 55.00 65.00 75.00 85.00 90.00 80.00 open competition (Percentage) Proportion of the PIP compliant with PIM 0.00 40.00 manual investment budget (Percentage) Human Resource Management improved Discrepancy between MEPS civil service 8.00 8.00 6.00 4.00 2.00 database and the payroll. (Percentage) Action: This indicator has been Marked for Deletion Number of Ministries 10.00 30.00 equipped with The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 remote work tools (Number) Action: This indicator is New National Statistical Capacity developed Number of statistical products (household survey, enterprise census, national accounts) completed 0.00 3.00 and published by INS following international standards (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target 1. strenghtening basic expenditure management Upgrade of the Expenditure Chain in compliance with LORLF No Yes (Yes/No) Public investment proposals prepared according to agreed 0.00 90.00 procedures (Percentage) Average rate of execution of public procurement commitment 30.00 85.00 plans in the targeted three sectoral ministries (Percentage) The World Bank Economic Governance Technical Assistance and Capacity Building (P125890) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Number of sector implementing Aggregate Citizen Report Card 0.00 3.00 scores (Percentage) (Percentage) Action: This indicator has been Marked for Deletion 2. Improving Human Resource management Additional public agents registered in biometric census (Number) 0.00 30,000.00 Number of Ministries holding virtual meetings (Number) 0.00 10.00 Action: This indicator is New 3. Statistical capacity development New poverty indices (poverty incidence, poverty gap, poverty No Yes severity) (Yes/No) Statisticians or equivalent trained from regional statistics or 0.00 5.00 demography schools (Number) IO Table SPACE The World Bank Economic Governance Technical Assistance and Capacity Building (P125890)