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Implementation Completion Report (ICR) Review - Benin - Poverty Reduction Support Grant - PRSG7


  
1. Project Data:   
ICR Review Date Posted:
04/17/2013   
Country:
Benin
Is this review for a Programmatic Series?
 No
First Project ID:
P122803
Appraisal
Actual
Project Name:
Benin - Poverty Reduction Support Grant - PRSG7
Project Costs(US $M)
 30.0  30.0
L/C Number:
Loan/Credit (US $M)
 30.0  30.0
Sector Board:
Economic Policy
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  12/19/2011
 
 
Closing Date
06/30/2012 06/30/2012
Sector(s):
Central government administration (60%), General agriculture fishing and forestry sector (15%), Power (15%), Roads and highways (10%)
Theme(s):
Rural services and infrastructure (25%) Tax policy and administration (25%) Public expenditure financial management and procurement (25%) Regulation and competition policy (13%) State-owned enterprise restructuring and privatization (12%)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Robert Keyfitz
Rene I. Vandendries Ismail Arslan IEGPS2

2. Project Objectives and Components:

a. Objectives:


    According to the Program Document (PD p. 22), "The overall objective is to support implementation of Benin’s Strategy for Growth and Poverty Reduction (SCRP 2011-2015) adopted in March 2011."
      Specific objectives are stated as follows:

      The Tier 1 development objective of PRSG7, in line with Benin's SCRP, is to accelerate real economic growth and reduce the incidence of poverty in Benin through focusing on the following two Tier 2 development objectives or pillars:

      (i) Strengthened public sector management, administration and policymaking through meaningful public financial management, civil service, customs, decentralization and structural reforms; in order to,

      (ii) Deliver more effective public services in the pursuit of enhanced private sector competitiveness and greater economic diversification.

      The version in the Grant and Program Summary is less detailed though materially the same:

      The Tier 1 development objective of this PRSG, in line with Benin’s SCRP, the CAS and the Africa Regional Strategy is to accelerate real economic growth and reduce the incidence of poverty in Benin through focusing on the following two Tier 2 development objectives or pillars:

      (i) Strengthened public sector management, administration and policy making; in order to:

      (ii) Deliver more effective public service in the pursuit of enhanced private sector competitiveness and greater economic diversification.

      The PD version will be used for this review.

    b. If this is a single DPL operation (not part of a series), were the project objectives/key associated outcome targets revised during implementation?
    No

    c. Policy Areas:

    PRSG7 incorporated one public sector and one private sector pillar, both of which followed on from the previous PRSC series, to a large extent representing unfinished business:

    Public Financial Management And Public Administration Budget Planning and Execution: The public sector pillar addressed the issues listed in the objectives, ranging from budget management and PFM, to decentralization and civil service reform. Prior actions included submission of a new organic budget law to the Supreme Court, improving ICT infrastructure for processing budget data, implementation of new procurement procedures, adoption of a civil service code of values and ethics, strengthening accountability in decentralized expenditure by auditing the communal development fund, and adoption and promulgation of an anticorruption law.

    Private sector competitiveness and economic diversification: The PSD component focused on investment in port infrastructure, streamlining judicial processes and agricultural sector reform. Prior actions called for implementing an electronic truck traffic management system in the port and installing container scanners for import verification; adoption and promulgation of a code of civil, commercial and administrative judicial processes; and adoption of the Government’s strategic reform program for the agricultural sector.

    d. Comments on Project Cost, Financing, Borrower Contribution, and Dates

    The program was approved on Dec. 19, 2011. It closed on schedule on June 30, 2012. There was no cofinancing. Approval and effectiveness in December, 2011 occurred nearly a year after the preceding operation (PRSC4-6) closed – the delay resulting from the election of a new government in March 2011, and a fundamental redesign during preparation (from a new programmatic series to a stand-alone operation). Prior to appraisal and negotiation the grant was increased from US$20 million to US$30 million.


    3. Relevance of Objectives & Design:

    a. Relevance of Objectives:

    PRSG7 picked up on strategic objectives from the CAS at closing (dated January 2009, covering the period 2009-12) in particular:

      • Promoting better governance and strengthening institutional capacities: including strengthening budget management and procurement, and decentralization.
      • Strengthening competitiveness and accelerating private sector led growth: including improving port efficiency, and promoting agricultural development and diversification.

    However, though other policy areas – civil service, and administrative and judicial reform – had appeared in the preceding CAS (2004-06), they were dropped from the current CAS, likely after being taken up by other donors.

    PRSG7 complemented other elements of the Bank’s portfolio, including trade and transport facilitation, and promoting food crop production. The operation conformed well to the Government’s poverty reduction strategy and coordinated with other donor activities.

    Relevance of objectives: substantial

    b. Relevance of Design:
    With extensive diagnostic work and the experience of six earlier PRSCs to draw on, policy areas and prior actions were for the most part strategic and relevant. Nevertheless, some elements were problematic:
    First, PRSG7 was initially planned to be the first of a new programmatic series, but during preparation (at the ROC stage) was changed to a stand-alone operation, with the intent of affirming the new Government's commitment to reform and allowing more time for dialog to bridge to a subsequent series. This may have made sense in the larger context of the CAS, but the specific result was a somewhat awkward compromise between short and longer term objectives and indicators. The operation basically retained its longer term programmatic outlook, but with only six months between effectiveness and closing could not achieve much in terms of specific results.

    Second, despite acknowledging the lesson learned from earlier budget support on the need for a, "more narrowly focused…and…mutually reinforcing" design (PAD par. 5.3), nevertheless PRSG7 perpetuated the mistake of an overly broad focus. The operation comprised twelve prior actions and thirty results indicators.Paring the list would have better emphasized strategic priorities while giving up little in terms of results. The public sector pillar in particular comprised unrelated actions in areas of budgeting, procurement, civil service reform, decentralization and corruption.

    Third, while many prior actions had a clear strategic rationale, others seemed narrow and technical and even beside the point. For instance:

      • Budget management: Many problems of budgeting could be traced to a stalled transition from traditional to program budgeting, hence a prior action calling for adoption of a new organic budget law. But a second prior action to establish real-time satellite connections for transmission of fiscal and accounting data seemed almost an afterthought to the PAD's extensive discussion of the weak institutional framework.
      • Civil service reform: The government had approached the Bank for help in controlling a runaway public sector wage bill and the PAD outlined a case for developing remuneration and staffing policies and strengthening HR management. However, PRSG7's prior action called for adoption of a public service Code of Values and Ethics -- perhaps useful in its own right, but with no bearing on the wage bill or the Government's willingness to tackle the difficult issues.
      • Port development: Strengthening customs procedures has important economic and fiscal implications. Yet the prior action to install container scanning technology failed to address the central institutional problem of resistance from within the customs administration. Subsequently, a protracted legal dispute erupted between the Government and the private sector owner/operator of the scanners, and as a result they are not currently in use.
    Results framework: The results framework comprised over 60 indicators covering poverty, health, education, macroeconomics, agricultural production, procurement, budget execution, corruption, and port performance. The list is divided into tier 1 and tier 2 indicators, with only the latter reported in the ICR. The overly broad and indiscriminate list could usefully have been pruned, especially in light of a few concerns:
      • Some tier 1 indicators are not relevant to the tier 1 objectives, for instance those detailing health and education outcomes. Detailed poverty measures (including male/female and urban/rural head count ratios reported for 2009 and 2010) should be treated with care since they are not published in the World Development Indicators.
      • Budget performance targets consisted of execution rates in priority (social) sectors. Yet these were not directly pertinent to the objectives which focused on improving public sector performance in order to improve service delivery for private sector growth.
      • In a few cases, baseline data were already better than the target values. E.g., the baseline (2010) value for average payment delay was 17.6 days compared to the target of < 24 days; the budget execution rate for public investment in the Ministry of Water and Energy was 86.7%, compared to the target of > 60%.
      • The relevance to the objectives of some indicators was not clearly demonstrated, for instance cost of importing or exporting a container, or the percentage of total credit to the agriculture sector.
    Relevance of design: modest


    4. Achievement of Objectives (Efficacy) :


    While all prior actions were satisfied, the results were mixed. Of the 30 tier 2 indicators reported in the ICR, only 21 had data available and of these 11 (52%) met their targets. Even where the targets were met, there is reason for doubt about how much the operation operation contributed. Expectations were over ambitious given the time frame, and the ICR frequently noted the need for complementary further action (with support planned for future PRSCs). In more detail:

    Strengthened public sector management, administration and policy making. In none of the areas covered by PRSG7 does the ICR demonstrate a strong linkage to results. The new organic budget law was submitted to the Supreme Court as required, and subsequently passed by the National Assembly in December 2012 as PRSG7 closed. Even at that, the ICR notes that full implementation "would require significant effort and time" for which the government had developed an action plan covering "the next few years," with support expected from the next PRSC series. (ICR, pp. 6-7)

    There was limited progress in budget execution rates, with especially disappointing outcomes in priority sectors, "due largely to failures in the monitoring system to ensure adequate attention to these expenditures and to lower than expected revenues." (ICR, p. 7)

    Procurement reform was impeded by capacity constraints and resistance by vested interests. Only two of four outcome indicators met their targets. Notably, the ICR concedes that the creation, staffing and resourcing of the agencies responsible for procurement had yet to be finalized, but would be supported under PRSC8. (ICR, p. 8)

    In civil service reform, the ICR notes that in response to the President's request for Bank TA to consolidate and integrate human resource systems with payroll systems the wage bill was being brought under control. However, this would not have been in response to PRSG7's support for the adoption of a code of ethics and values.

    With regard to corruption, the ICR explains that decrees implementing the legislation and establishment of a monitoring system had yet to be finalized. That is, addressing corruption is in its early stages. Meanwhile, the monitoring system was intended to provide more detailed data, without which it was not possible to assess how much progress had been realized. (ICR, p. 9)

    Efficacy rating for the first objective is modest.

    Private sector competitiveness and economic diversification: Here, as well, the ICR casts doubt on efficacy. With regard to the port, the ICR attributes an improvement in efficiency to the guichet unique and the authorities’ firm resolve in dealing with labor issues, neither of which was related to PRSG7. (ICR, p. 10) Of the two prior actions supported by PRSG7, the ICR does not discuss the truck management scheme, though apparently it is up and running and has contributed to the port's operational efficiency. However, the import verification scheme has been suspended at this time and the plan is to re-tender it at some future date. The scanners were installed but never operated as intended, and are not currently being used.

    A new judicial code adopted in early 2012 improved the timeliness and duration of proceedings. Unfortunately, there was no change in Benin's Doing Business ranking for enforcing contracts (it remained at 178 out of 183 countries in 2013), though the ICR attributes this to a communications failure (ICR, p. 16). Elsewhere in the Doing Business indicators showed minor increases in some areas and decreases in others, with a net improvement in the ranking by one position from 176 to 175. Notably, the cost of exporting and importing -- which would also reflect PRSG7's achievements -- actually rose.

    Approval of the new agricultural strategy, the PSRA, took longer than expected, partly as a result of a new Minister, and it was adopted only in October 2012, and so far has had little impact on outcomes.

    Efficacy rating for the second objective is modest.


    5. Efficiency (not applicable to DPLs):

    6. Outcome:


    PRSG7’s objectives substantially reflected the CAS and the Government’s priorities, and were well targeted on Benin’s developmental constraints. The operation contributed to a fruitful dialog with the new Government, successfully elicited a commitment to reform and laid the groundwork for future Bank operations. Nevertheless, missteps in the design – especially objectives and expectations that were too ambitious for the time available – impaired the operation’s effectiveness. The efficacy of both objectives is rated modest. If the Government remains committed and subsequent PRSCs deliver the necessary support, the operation will undoubtedly deserve some of the credit. However, consistent with actual achievements to date, an overall rating of Moderately Unsatisfactory is appropriate.

    a. Outcome Rating: Moderately Unsatisfactory

    7. Rationale for Risk to Development Outcome Rating:

    Realizing PRSG7’s objectives will require sustained follow up, including TA in difficult areas such as civil service and budget reform, and port modernization. Thus, eventual results will depend on the Government maintaining its commitment and an ongoing support from the Bank and other development partners.

    a. Risk to Development Outcome Rating: Significant

    8. Assessment of Bank Performance:

    a. Quality at entry:

    The operation was well conceived, targeting important developmental constraints, eliciting a credible commitment to reform and maintaining a fruitful dialog with a new, reform-minded Government. Nevertheless, its achievements were impaired by design flaws, especially setting unrealistic targets for a single tranche operation, failing to keep a narrow and sharp focus, and in some cases selecting prior actions and results indicators that were poorly aligned with objectives. Changing from a programmatic series to a standalone operation at a relatively advanced stage of preparation was likely in part responsible. PRSG7 may prove to be a useful platform if future operations continue to build on it and manage the risks. Nevertheless, it would have been preferable to give a clearer sense of the Bank’s strategic thinking at this stage.

    Quality-at-Entry Rating: Moderately Unsatisfactory

    b. Quality of supervision:

    Supervision comprised regular meetings by country office staff, as well as periodic missions covering macroeconomics and joint reviews with other donors.

    Quality of Supervision Rating: Satisfactory

    Overall Bank Performance Rating: Moderately Unsatisfactory

    9. Assessment of Borrower Performance:

    a. Government Performance:

    The Government delivered on all prior actions, engaged actively with the Bank on its reform agenda, and demonstrated considerable resolve, including in areas not directly related to the operation. Nevertheless, its performance with regard to the operation itself was mixed, especially in the import verification program where it demonstrated some ambivalence. The ICR also notes a lack of coordination in the implementation of various reforms, and a persistence of weak procurement and financial management practices that will take more time to address. (ICR, p. 11)

    Government Performance Rating: Moderately Satisfactory

    b. Implementing Agency Performance:

    Implementing Agency Performance Rating: Moderately Satisfactory

    Overall Borrower Performance Rating: Moderately Satisfactory

    10. M&E Design, Implementation, & Utilization:

    a. M&E Design:

    Data were not available on a timely basis for M&E. Only 21 of 30 indicators in the results framework had data available in time for the ICR. In some cases, indicators were not clearly linked to prior actions, for instance in the case of civil service reform, or budget execution where spending on priority sectors was only indirectly linked to service delivery for private sector development and diversification.

    b. M&E Implementation:

    The elapsed time of only 6 months from effectiveness to closing limited the extent of M&E. Nevertheless, the operation served as a platform for dialog between the Government, and the Bank and other development partners.

    a. M&E Utilization:

    The dialog on during preparation and effectiveness supported the Government's poverty reduction strategy and contributed directly to PRSG8.

    M&E Quality Rating: Substantial

    11. Other Issues:

    a. Safeguards:
    No issues raised

    b. Fiduciary Compliance:
    No issues raised

    c. Unintended Impacts (positive or negative):
    None

    d. Other:



    12. Ratings:

    ICR
    IEG Review
    Reason for Disagreement/Comments
    Outcome:
    Moderately Satisfactory
    Moderately Unsatisfactory
    Actual outcomes dictate a rating of MU, though this may well understate the overall contribution toward CAS objectives. 
    Risk to Development Outcome:
    Significant
    Significant
     
    Bank Performance:
    Satisfactory
    Moderately Unsatisfactory
    The transition from programmatic to stand-alone operation was less than fully successful; flaws in the the design and results framework have been noted above. 
    Borrower Performance:
    Moderately Satisfactory
    Moderately Satisfactory
     
    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.
    - The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

    13. Lessons:

    The ICR draws important and valid lessons about anticipating resistance to change and capacity constraints when designing reform programs. It recommends an opportunistic approach, pressing harder when the environment is conducive, as was the case after the election of March 2011. It also credits switching from a programmatic series to a stand-alone operation with generating the necessary commitment to reform.

    Nevertheless, the benefits of a stand-alone operation are unclear. For one thing, it may have shortened the focus of the Bank's engagement with the new Government at a pivotal moment, whereas a programmatic series could have been instrumental in mapping out a longer term action plan. For another, it was detrimental to the performance of the operation itself. At the very least, it would have been preferable to reach a decision earlier on during preparation and/or to monitor more closely the results of the reformulation.


    14. Assessment Recommended?

    No

    15. Comments on Quality of ICR:

    The ICR is informative, but it lacks a sharp focus and obscures the specific achievements of the operation behind a more general discussion of progress in PFM and civil service reform, port management and business facilitation.


    a. Quality of ICR Rating: Satisfactory

    (ICRR-Rev6DPL-Jun-2011)
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