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Implementation Completion Report (ICR) Review - SIMPLIFIED - Second Poverty Reduction Support Credit


  
1. Project Data:   
ICR Review Date Posted:
03/20/2006   
PROJ ID:
P074073
Appraisal
Actual
Project Name:
SIMPLIFIED - Second Poverty Reduction Support Credit
Project Costs(US $M)
 150  150
Country:
Tanzania
Loan/Credit (US $M)
 60  60 (see sec. 2c. below)
Sector, Major Sect.:
General agriculture fishing and forestry sector, Central government administration, General public administration sector, Agricultural marketing and trade, Other domestic and international trade,
Agriculture fishing and forestry; Law and justice and public administration; Law and justice and public administration; Industry and trade; Industry and trade
Cofinancing (US $M)
   
L/C Number:
C3965; CH118      
   
Board Approval (FY)
  5
Partners involved
 
Closing Date
06/30/2005 06/30/2005
         
Evaluator: Panel Reviewer: Division Manager: Division:  
Elliott Hurwitz
Kris Hallberg Kyle Peters IEGCR

2. Project Objectives and Components:

a. Objectives
This second Poverty Reduction Support Credit, or PRSC (of a projected series of three) supports implementation of Tanzania's Poverty Reduction Strategy (PRS) as summarized in the Poverty Reduction Strategy Paper (PRSP) and focuses on the following cross-cutting institutional actions which are expected to facilitate progress toward PRS objectives: 1. Sustain and accelerate economic growth and broaden its impact; 2. Support results orientation of public service delivery; 3. Enhance public sector performance; 4. Strengthen environmental management.

While the objectives of PRSC2 are identical to those of PRSC3, the objectives of PRSC1 were formulated somewhat differently, with a more explicit emphasis on alignment of public investment with the Poverty Reduction Strategy. Also, PRSC2 and 3 more directly address strengthening environmental management than does PRSC1.

b. Components (or Key Conditions in the case of Adjustment Loans):
Private Sector Development
1. Draft Land Act amendments and present to Parliament.
2. Phase I labor legislation (Employment relations, Collective Labor Relations, Dispute Resolutions and Labor Market Institutions) presented to Parliament.
3. Reviewed business licensing system after consultations with stakeholders, prepared a position paper on business licensing reforms and submitted to Parliament amendments to the Business Licensing Act, 1972, introducing reforms of the business licensing system.
Macroeconomic Stability
4. Prepare annual borrowing and repayment plan (both concessional and non-concessional loans), inclusive of borrowing limits and present it to Parliament as part of the annual budget.
5. Rationalize local government taxes and levies.
Improved Governance and Effectiveness of Public Service Delivery.
6. Approve 2003/04 budget in line with PRS objectives, delineating budget codes for priority sectors and items.
7. Budget execution for 2002/03 and 2003/04 (FQ 1 and FQ 2), to be in line with approved budget and with PRS priorities, consistently reported as per identified expenditure budget codes for priority sectors, and in 2003/04 also by identified codes for priority items.
Improve Governance including performance of the public sector and the overall incentive environment.
8. Enhance civil servant pay in line with the approved FY04 budget.
Public Financial Management:
9. Joint Public Financial Management Reform Program (PFMRP) Steering Committee to review (1) establishment of management structure and (2) detailed annual workplan and budget for the first phase of PFMRP implementation.
10. Local Government Authority Tender Boards to be constituted and established under new Regulations.
Procurement:
11. Prepare draft bill amending Public Procurement Act of 2001 reflecting the CPAR recommendations, and submit letter from the Attorney General confirming that bill will be presented for Parliamentary approval during 2004 budget session.
Poverty Monitoring and Evaluation:
12. Progress in strengthening and sustaining capacity of the Vice President's Office (VPO) secretariat to support and monitor implementation of the PRS according to an updated action plan to be approved by Government.
13. Progress in strengthening and sustaining capacity of the President's Office-Regional Administration and Local Government (PO-RALG) for collecting, collating and analyzing administrative data according to an updated action plan to be approved by government.

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project cost was US$150 million, financed by an IDA credit for US$60 million and an IDA grant for US$90 million, both disbursed in one tranche upon effectiveness. The project was approved by the Board in July, 2004, and closed on schedule in July, 2005. The first PRSC in the series was approved in May, 2003, and closed in June, 2004, while the third PRSC was approved in September, 2005, and is scheduled to close in June, 2006.


3. Relevance of Objectives & Design:

Relevance was substantial The objectives reflect significant development barriers and are central to the country's poverty reduction strategy. The single tranche design assures that the actions cited are achieved prior to effectiveness.

4. Achievement of Objectives (Efficacy) :

Efficacy was substantial: However, it should be emphasized that many of the actions cited in the PD are output or process-oriented, and so there will be a considerable burden on the final ICR in this Program to demonstrate that satisfactory outcomes have resulted from actions taken under these credits. These outcomes would be principally defined in terms of the indicators listed in Schedule 3 of the PD.
Progress toward meeting PDOs
Progress toward meeting project DOs was as follows:
1. Sustain and accelerate economic growth and broaden its impact: The ICR presents data showing that growth has accelerated but does not present evidence of broad-based growth or poverty alleviation.
2. Support results orientation of public service delivery: The ICR presents evidence of achievement in several areas of public service delivery, including road maintenance, primary school enrollment, and health clinic visits. However, for many indicators identified in Schedule 3 of the PD, data are missing or inconclusive.
3. Enhance public sector performance: Evidence is presented in only a few areas of enhanced government performance--greater success in passing school examinations, decreased food insecurity. However, for most indicators identified in Schedule 3 of the PD, data are missing or inconclusive.
4. Strengthen environmental management: Evidence is presented of the establishment of a framework within which environmental management may be strengthened, but not of any actual strengthening thus far. Draft legislation and an action plan have been completed, a consultant engaged, and monitoring indicators developed.

Fulfillment of conditions
Private Sector Development
1. Draft Land Act amendments and present to Parliament.
Amendment approved by Parliament in February 2004. Individuals and businesses can now use land as collateral.
2. Phase I labor legislation (Employment relations, Collective Labor Relations, Dispute Resolutions and Labor Market Institutions) presented to Parliament.
Legislation approved in April 2004. Preparation of Phase II of the reform now underway, including Occupational Safety and Health, Worker's Compensation/Social Security and Employment Promotion.
3. Review business licensing system after consultation with stakeholders, prepare position paper on business licensing reforms, and submit to Parliament amendments to 1972 Business Licensing Act, 1972, introducing business licensing reform.
Business licensing reform has been carried out with the aim of reducing business costs.
Macroeconomic Stability
4. Prepare annual borrowing and repayment plan (both concessional and non-concessional loans), inclusive of borrowing limits and present it to Parliament as part of the annual budget.
In light of large stock of parastatal debt, government has prepared inventory of parastatal debt contingent liabilities and developed agreed strategy for monitoring their migration to actual debt. Audit of parastatal liabilities has been completed and shared with donors.
5. Rationalize local government taxes and levies.
In 2003/04 budget, government limited sources of revenue for local governments to specified taxes and levies, and abolished the development levy.
Improved Governance and Effectiveness of Public Service Delivery.
6. Approve 2003/04 budget in line with PRS objectives, delineating budget codes for priority sectors and items.
The government increased resources for PRS-related activities.
7. Budget execution for 2002/03 and 2003/04 (FQ 1 and FQ 2), to be in line with approved budget and with PRS priorities, reported as per identified expenditure budget codes for priority sectors, and (in 2003/04) by identified codes for priority items.
Budget execution in 2002/03 and the first half of 2003/04 was in line with estimates. Quarterly Budget Execution Reports are published on the national website to ensure transparency of government operations.
Improve Governance including performance of the public sector and the overall incentive environment.
8. Enhanced civil servant pay in line with the approved FY04 budget.
Civil Service salaries were increased 6-10 percent, in line with the approved budget.
Public Financial Management:
9. Joint Public Financial Management Reform Program (PFMRP) Steering Committee to review (1) establishment of management structure and (2) detailed annual workplan and budget for first phase of PFMRP implementation.
To minimize resource leakage and strengthen accountability of public funds, government has continued to secure sustainable financial management arrangements that support equitable public service delivery.
10. Local Government Authority Tender Boards constituted and established under new Regulations.
Local government level reforms includes issuance of Local Government Regulations in 2003, after which Local Government Authority Tender Boards were established in compliance with the Regulations.
Procurement:
11. Prepare draft bill amending Public Procurement Act of 2001 reflecting CPAR recommendations, and submit letter from Attorney General confirming that bill will be presented to Parliament during 2004 budget session.
Bill was submitted, but later than envisioned. Central Tender Board was established as an executive agency, the Executive Secretary was appointed to the Board and the Procurement Appeals Authority was established.
Poverty Monitoring and Evaluation:
12. Progress in strengthening and sustaining capacity of the Vice President's Office (VPO) secretariat to support and monitor implementation of the PRS according to an updated action plan to be approved by Government.
Action Plan for Building Capacity was presented to PRS technical Committee in August 2003. Medium Term Strategic Plan 2004-2007 for VPO was approved in February 2004.
13. Progress in strengthening and sustaining capacity of the President's Office-Regional Administration and Local Government (PO-RALG) for collecting, collating and analyzing administrative data according to an updated action plan to be approved by government.
Achievements in this area include recruitment of senior program officer to lead the MIS unit; assignment of 2 senior staff to RDS technical working group; completion of report on MIS strategy for PO-RALG which is now operational; development of database on the Local Government Authorities (LGAs); Social Economic Profile; installation of a LAN and registration of the domain to facilitate e-communication with Regional Secretariats and LGAs.

5. Efficiency:

Not applicable to policy-based lending.
6. M&E Design, Implementation, & Utilization:

M&E is adequate. At the process and outputs level, it is possible to monitor progress according to PD Schedule 2. At the outcome level, Schedule 3 provides indicators, but many of these may be subject to exogenous or cyclical variation and thus may not be reliable measures of achievement. In these cases, proxy measures may need to be developed. As noted above, the final ICR in this Program will require reliable indicators to demonstrate that satisfactory outcomes have resulted from actions taken under these credits.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

None

8. Ratings:
ICR
ICR Review
Reason for Disagreement/Comments
Outcome: 
SatisfactorySatisfactory
Institutional Dev.: 
SubstantialSubstantial
Sustainability: 
LikelyLikely
Bank Perf.: 
SatisfactorySatisfactory
Borrower Perf.: 
SatisfactorySatisfactory
Quality of ICR: 
Satisfactory

NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness.

9. Lessons:

It is not yet possible to draw lessons from this operation.

10. Assessment Recommended?  No

          Why?  

11. Comments on Quality of ICR:

The ICR is satisfactory, but could have made a stronger effort to demonstrate project achievement. The status of many indicators in the conditionality matrix and Schedule 3 call for achievement by 2005, and some achievements presented as "current status" were completed in mid-2004. It would have been desirable to have more recent data in these areas.

(ES-Rev4B-Dec/05)
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