Senegal - Development Management Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 17247 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF SENEGAL Development Management Project (1910-SE) December 8, 1997 Country Department 14 Africa Region i i This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency unit CFA Franc (CFAF) US$1.00 CFAF 577.96 (October, 1997) WEIGHTS AND MEASURES: METRIC FISCAL YEAR: January 1 - December 31 ABBREVIATIONS AND ACRONYMS CICS Interministerial Committee of Coordination and Monitoring CIDA Canadian International Development Agency DDI Public Debt and Investment Department DGD Customs Department DGID Department of Land and Internal Revenue DFP Civil Service Department DP Planning Department DPFC Department of Programming, Financing & Monitoring of Public Investment DS/DPS Department of Planning & Statistics ESAM Integrated household survey MEF Ministry of Economy and Finance MFPT Ministry of Civil Service and Labor MPC Ministry of Planning and Cooperation PPF Project Preparation Facility SCS Central Payroll Agency SDA Social Dimension of Adjustment UNDP United Nations Development Program USAID United States Agency for International Development Vice President: Jean-Louis Sarbib Country Director: Mahmood A. Ayub Sector Manager: Roger Sullivan Staff Member: Ellen Cohen  FOR OFFICIAL USE ONLY TABLE OF CONTENTS Preface EVALUATION SUMMARY .................... i-iii PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Statement and Assessment of Objectives .1 B. Achievement of Objectives .1 C. Major :Factors Affecting the Project .3 D. Project Sustainability .5 E. Bank P'erformance .5 F. Borrower Performance .7 G. Assessment of Outcome .9 H. Future Operations .9 I. Key Lessons Learned .9 PART II: STATISTICAL ANNEXES Map This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  IMPLEMENTATION COMPLETION REPORT Republic of Senegal Development Management Project (Credit 1910-SE) Preface 1. This is the Implementation Completion Report (ICR) for the Development Management Project in the Republic of Senegal, for which Credit 1910-SE in the amount of SDR 12.5 million was approved on May 24, 1988 and made effective on March 6, 1989. The credit was closed on June 30, 1997, 36 months after the original closing date of June 30, 1994. Final disbursement will take place on December 22, 1997, at which time a balance of SDR 793,159 will be cancelled. Of $2.0 million in co-financing provided by C'IDA, $1.67 million was disbursed and $326,000 was cancelled. 2. The ICR was prepared by Ellen Cohen from the Institutional Development and Social Policy Division of the Africa Region and reviewed by Mahmood Ayub, Country Director, AFC14. Neither the Borrower nor co-financier CIDA provided comments. 3. The completion mission took place in April 1996. On June 30, 1996, project activities closed, except for procurement and training under the civil service component. For their completion, the Bank agreed to extend the closing date a third time to June 30, 1997. Preparation of the ICR was done at HQ and is based on material in the project file. The Borrower did not prepare a contribution to the ICR.  EVALUATION SUMMARY Introduction 1. The Development Management Project (PAGD) was designed in response to a request by the Government of Senegal: (a) to extend to a second phase the Technical Assistance Project for Economic and Financial Planning (Cr. 1061-SE), approved in 1980, which had laid the base and initiated reforms in several key areas; (b) to help implement recommendations arising from the Administrative Assessment carried out in 1985; and (c) to incorporate the social dimension in the design and implementation of its structural adjustment program. Project Objectives 2. The primary objective of the project was to assist the Government to build up the internal capabilities for strategic planning, financial management and personnel management in the relevant agencies within the Ministries of Plan and Cooperation, Economy and Finance, and Civil Service and Labor. In particular, the project was to support action programs prepared by these agencies to carry out the tasks related to the implementation of the on-going structural adjustment program (para 1). 3. The project's primary objective was not met. The objective was over-ambitious and based neither upon a long-term Government strategy nor a constituency for reform in the administration. The objective was also unrealistic given the institutional environment, in particular the flight of qualified staff with difficulty to recruit new ones, due to low salaries and lack of incentives. A condition of effectiveness was that a system of administering performance incentives to project staff, acceptable to IDA, be adopted by Government. But it was never implemented (paras 2, 5). Implementation Experience and Results 4. Institutional development under the PAGD was negligible. Lack of an incentive system was raised several times by concerned Senegalese staff involved in the PAGD, but IDA supervision missions did not follow-up adequately. In a weak effort to address the issue, 15 months before the original closing date, the Bank proposed that staff working on PAGD-financed activities receive salary supplements "according to the same norms as other projects". Revision of Government's training policy, envisaged under the project, did not take place. About 450 staff were trained in human resource management and others received computerized instruction (customs, tax collection, debt, civil service, data processing and survey methods). Yet training was ad hoc, taking place without a link to job effectiveness. PAGD components were revised often, usually upon change in Bank task manager or Government minister, and not carried out within a strategic framework (paras 5-9). 5. Given the Government's absorptive capacity, the credit amount was too high. While the SAR estimated six years from signature to project completion, actual supervision time was nine years. Of the original IDA amount of SDR 12.5 million, SDR i  11.7 million was disbursed and SDR 793,159 cancelled. Of the $2.0 million Canadian grant, $1.67 million was disbursed and $326,000 was cancelled (para 14). 6. Borrower performance. Factors not subject to Government control which affected implementation included a weak macroeconomic environment and Bank performance. Supervision was characterized by turnover in task managers (six), each with his/her own vision of how the project should be implemented. Four factors subject to Government control that affected achievement of objectives were commitment, macroeconomic policies, appointment of key staff and administrative procedures (paras 10-14). 7. Government commitment to the project was absent from the very beginning. The interministerial committee set up to oversee project implementation met only once, and other decision-making groups were either dysfunctional or not operational. The PAGD- financed activities in support of economic policies were implemented partially or not at all, which led to cancellation of the third tranche of SAL IV. In addition, the attention of Senegalese authorities was diverted from medium-term development progress under the PAGD to the availability of quick-disbursing budgetary assistance. Lack of motivation and performance of key staff affected implementation. Factors which adversely affected implementation were: (a) frequent turnover of ministers and staff in the beneficiary executing departments; and (b) weak project management, which was unable to effectively monitor and supervise project implementation. Slow and cumbersome administrative procedures often produced long delays in procurement of goods and services and in disbursements (paras 13, 28-34). 8. Bank performance was deficient, from identification through supervision. The project was supply-driven and did not reflect Government's macroeconomic strategy because there was none. During identification, the stated project objective was "to install a commitment and develop a capacity to propose a reform strategy and carry it out." At preparation, the Bank had recognized the Government's institutional weaknesses, insufficient political will, reticence to seek Bank advice on politically sensitive economic reform issues and lack of demand for policy analysis. Yet it designed an operation that was too ambitious, a project to formulate a strategy to address issues each of which was sufficiently complex to warrant a TA project of its own. There is no evidence that lessons were learned from previous TA operations, where a pervasive issue was the role and responsibilities of TA. The SDA component was added at the end of appraisal, without explanation for its sudden inclusion. Lack of Government commitment was signaled by Bank staff, from identification through appraisal (paras 20-23). 9. Supervision was mostly deficient. There were lack of continuity in task management and insufficient supervision of this labor-intensive operation, with an average of a single macroeconomic and SDA mission per year. As administrator for the CIDA funds, the Bank was at fault for not resolving more quickly the obstacle to using them. Supervision missions identified implementation problems, but Forms 590 consistently rated Satisfactory the DO and IP. Complementary donor collaboration was hardly mentioned, although SDA Bank staff usually undertook joint missions with CIDA, the co-financier of this component. During turnover in task managers and Bank management, no manager queried the disconnect between Form 590 ratings and aide- .i.  memoires or took responsibility to close the project that was clearly not meeting objectives (paras 24-7). Summary of Findings 10. Assessment of the project outcome is highly unsatisfactory. After nine years, it failed to achieve its major objectives. There is no centralized personnel roster to link personnel and payroll management. There is no system to report on household standards of living to monitor the most vulnerable population. On-the-job training took place and some technical skills were upgraded. But there were no performance indicators by which to judge skills transfer so one cannot judge the outcome of this objective. With the benefit of hindsight, it would have been preferable to close the PAGD credit earlier, by not extending the closing date three times (paras 35-6). 11. Project sustainability is unlikely. Borrower commitment, political will and broad- based support did not exist during PAGD preparation and implementation. And the Borrower did not prepare an operational plan. A performance-based incentive system was never put in place to motivate administration personnel responsible for PAGD-financed activities, and it is highly unlikely that any project activity would continue. Nevertheless, authorities have demonstrated growing interest in the area of capacity-building and public adminstration reform, as confirmed by several recent Government actions, supported by UJNDP, the Bank and other donors (paras 17-19). 12. There is still an unfinished reform agenda. Should the Bank design a future institutional development operation, it should do so when there exists an environment conducive to change, switching from "business as usual" to earnest capacity-building, with clear political will on the side of the Borrower. A future operation needs to address up-front the unresolved issue of staff motivation, which severely affects performance in the Senegalese administration (para 37). 13. Lessons Leaned. An important lesson learned for the Bank is that ownership is a sine qua non for project success. A second lesson for the Bank is to recognize that lack of motivation cannot be addressed with an agreement that has not benefited from open debate and wide support, involving the civil service and its clients. A third lesson for the Bank and the Government is that institutional stability and continuity are essential to ensure responsibility for project outcome. A fourth lesson learned is for the Bank to adjust to realities. The Senegalese institutional reality was staff turnover and lack of incentives. The political reality was lack of Government ownership and commitment. When these realities became clear, Bank management should have closed the PAGD. Instead, by encouraging a disinterested government to request three extensions of the closing date, the Bank demonstrated indecisiveness and undermined its own credibility with the Borrower (paras 38-41). . .  A. STATEMENT AND ASSESSMENT OF OBJECTIVES Credit Objectives 1. The primary objective of the project was to assist Government to build up the internal capabilities for strategic planning, financial management and personnel management in the relevant agencies within the Ministries of Plan and Cooperation, Economy and Finance, and Civil Service and Labor. In particular, the project was to support action programs prepared by these agencies to carry out the tasks related to the implementation of the on-going structural adjustment program. Assessment of Objectives 2. The project's primary objective was not met. The objective was over-ambitious, formulated unilaterally by the Bank team and based neither upon a long-term Government strategy nor a constituency for reform in the administration. At the project brief stage, several reviewers expressed skepticism about the lack of political will, which was manifested throughout the lengthy preparation-appraisal process and during implementation. The objective was also unrealistic given the institutional environment. Lessons learned indicate that early reforms did not address behavioral aspects, even though key problems with the Senegalese administration lie less with formal structures than with well-entrenched habits and attitudes of people within the structures: centralized, fragmented decision-making; compartmentalization, with overlapping responsibilities and little coordination among ministries; and flight of qualified staff with difficulty to recruit new ones, due to low salaries and lack of incentives. B. ACHIEVEMENT OF OBJECTIVES 3. The degree to which the project may be judged concerning achievement of objectives is evaluated in two categories: macroeconomic policies and institutional development. Macroeconomic Policies 4. The PAGD had no impact on implementation of the Third Structural Adjustment Loan (SAL III, Cr. 1802-SE), which closed in June, 1989, three months after the PAGD was declared effective. The PAGD had no favorable effect on implementation of the Fourth Structural Adjustment Loan (SAL IV, Credit 2090-SE), w}ich was approved by IDA on February 8, 1990. The first two tranches of SAL IV were fully disbursed by January 1992 and the third tranche was cancelled. Overall, the achievements of SAL IV fell short of the required objectives: the PCR noted that some progress was made in public enterprise reform, but in the area of civil service reform and wage bill restraint, the Government's performance was most disappointing. An upward trend continued in the size of the civil service and wage bill, with the Government unable to restrain new recruitment, and by 1994 civil service size was larger than before the program began. 1  Furthermore, the macroeconomic environment deteriorated significantly in 1992-93 and the repeated slippage on tranche release conditions and the failure to tackle the more difficult reform components of the program indicated the almost non-existent commitment of the Government to the adjustment program. OED rated the SAL IV outcome as unsatisfactory and sustainability as unlikely. Institutional Development 5. In the above context, it is not surprising that institutional development achieved in the PAGD was negligible. Moreover, project design was too complex for the weak administrative and coordination capacity of the Borrower, which was to implement four main components in 3 ministries (MPC, MEF, MFPT) covering eight beneficiary departments (DP, DPFC, DGD, DGID, DDI, DS, SCS, DFP). In addition, the adoption of a system for administering performance incentives, a condition of effectiveness, was not implemented. A proposed performance system was approved by IDA but never implemented. Although lack of an incentive system was raised several times by concerned Senegalese staff involved in the PAGD, IDA supervision missions did not follow-up adequately with Government. Consequently, staff responsible for implementing PAGD activities were less than committed to their work. In a weak effort to address the issue, fifteen months before the original closing date, the Bank proposed that staff working on PAGD-financed activities receive salary supplements "according to the same norms as other projects". 6. Revision of Government's training policy, envisaged under the project, did not take place. Under the civil service component, about 450 staff were trained in human resource management. Many staff received computerized instruction to monitor customs clearance procedures, tax collection, debt and the civil service data base. Under the SDA component, about 15 staff were trained in data processing and analysis and survey methods. Yet training took place in an ad hoc manner, in the absence of a needs assessment and a coherent policy to link training to job effectiveness. 7. Results were uneven. On the one hand, it is unknown if the 450 trained persons in the MFPT are managing staff. It is not known whether the 6-7 MFPT staff who benefited from training abroad in human resources management have trained other staff, which was part of their mandate. And while MPC staff were trained to use the debt data base to monitor transactions, file reports indicate a limited capacity to use computers in the Debt Department (DDI). 8. During preparation, it was pointed out that experience with TA in Senegal had not been entirely favorable, but the SAR did not mention any lessons learned. Yet the PAGD funded several years of consultant services and training, for national and international consultants, in three of four components. For the fourth component, Social Dimensions of Adjustment (SDA), CIDA co-financing provided a long-term statistics advisor. A separate UNDP project was to finance TA to support the Ministry of Plan in long-term perspectives, forecasting and simulation tools; on-going French TA worked in statistics, 2  project evaluation and monitoring; and USAID provided TA in tax administration. However, project files contain no performance evaluation or knowledge transfer to nationals of the IDA or CIDA-financed TA. And it is not clear if the UNDP project ever materialized or what was the outcome of the complementary French or USAID TA. 9. The specific objective of the SDA component was to incorporate the social dimension into the adjustment process through introduction of a system for regular production of standard of living and household budget data. Achievement was negligible. A standard of living (priority) survey was carried out and production of its statistics on living conditions were used for several reports, inter alia, the World Bank study on living conditions in Senegal (1995) and a UNICEF report on the situation of women and children in Senegal (1994). An integrated household survey was carried out, with extreme delays, and data were never analyzed and published. No socio-economic studies were finalized. As a result, there is no permanent system for monitoring household living standards or for reporting on socio-economic conditions of the most vulnerable groups. C. MAJOR FACTORS AFFECTING THE PROJECT 10. Affecting achievement of project objectives were: (a) factors not generally subject to government control; and (b) factors generally subject to government control. Factors Not Subject to Government Control 11. Two factors fall under this category: economic environment and Bank performance. As stated above, the macroeconomic environment had progressively worsened, with the real economy experiencing a serious decline in key sectors since 1990. Senegal's competitive position weakened during the SAL IV adjustment period, due to deterioration of its terms of trade and the appreciation of its currency, the CFA Franc, against Senegal's trading partners and competitors outside the Franc Zone. Real GDP growth during 1988-93 averaged 1.7 percent annually, against the population growth rate of 2.9 percent p.a. Investment levels were low in 1991 and the budget deficit deteriorated further during the election year of 1993. The country's fiscal situation was precarious as arrears had reached record levels and production costs were extremely high. 12. Regarding Bank performance, the turnover in Bank task managers (six), each with his/her own vision of how the project should be implemented, adversely affected achievement of objectives. This complaint was registered in correspondence by PAGD management. On the management side, IDA sent the wrong message by extending the PAGD closing date three times when it was clear that project objectives were not being met and Government was not making a serious effort to attain them. 3  Factors Subject to Government Control 13. Government commitment, macroeconomic policies, appointment of key staff and administrative procedures were four factors subject to Government control that affected achievement of objectives. Government ownership of the project was absent from the very beginning. This was aggravated by lack of commitment to project objectives and to the reform agenda. Macroeconomic policies, designed to restore Senegal's competitive position and achieve growth, were implemented partially or not at all. Failure to implement the intended reforms led to the third tranche of SAL IV being postponed and then cancelled. Key staff appointments were made, but their lack of motivation and performance affected implementation. Among the factors which adversely affected implementation were: (a) frequent turnover of ministers and staff in the beneficiary executing departments; (b) weak project management, which was unable to effectively monitor and supervise project implementation, lacked expertise to adequately manage administrative aspects or to judge usefulness of outputs contracted for by participating departments. Finally, slow and cumbersome administrative procedures often produced long delays in procurement of goods and services and in disbursements. 14. All of the above factors contributed substantially to implementation delays in project execution. While the SAR estimated six years from signature to project completion, actual supervision time was nine years. Of the original SDR 12.5 million, SDR 11.7 million was disbursed and SDR 793,159 cancelled. Of the $2.0 million Canadian grant, $1.67 million was disbursed and $326,000 was cancelled. Other 15. Although PAGD objectives were never amended, project components were revised often. Each time, changes focused on fewer activities in hopes that a reduced program would produce results. Revisions were usually made upon change in Bank task manager or Government minister but were not carried out within a strategic framework. Although no formal mid-term evaluation took place, in 1990 project scope was first reduced to target four areas: civil service reform, expenditure analysis and control, the treasury function and SDA. Some components did not seem to require project support, since they benefitted from prior or overlapping support from donor agencies (investment programming, modernization of statistics system, computerization of customs procedures). Other components (income tax department and customs) no longer required funds but policy decisions: to revise the tax code, to reorganize the income tax department, to operate agreed-upon customs reforms in a consistent and transparent fashion. 16. A second revision of project scope occurred in 1991, when the Bank narrowed the focus of the civil service component, and a third was in 1992, when the Government reoriented the same component. Again in 1994 and 1995, limited work programs formed the basis of requests by Government for two one-year extensions of the closing date which the Bank granted. And finally, in 1996, the Bank agreed to a third one-year 4  extension of the closing date to carry out only procurement and training under the civil service component. AGETIP was contracted to do this procurement, since PAGD management had proven incapable of doing so. It was unfortunate that during appraisal, the Bank agreed to drop a proposed procurement component, since no preparatory work had been undertaken and since the national commission for contract administration lacked the capacity to design and execute the component. Procurement proved to be very problematic during PAGD implementation, suffering from long delays and non-respect of IDA procedures. D. PROJECT SUSTAINABILITY 17. Project sustainability is unlikely. Strong Borrower commitment, political will and broad-based support did not exist during PAGD preparation and implementation, yet these are essential to attaining and maintaining achievements. Moreover, the Borrower did not prepare an operational plan. A performance-based incentive system was never put in place to motivate administration personnel responsible for PAGD-fmanced activities, and it is highly unlikely that any project activity would continue. 18. On the positive side, there are some elements of institution-building which could be sustained if proper incentives were put in place: (a) More than 450 persons benefited from short-term training in human resource management and others in computer use, statistical analysis and methods. Even if transferred elsewhere in the administration, they should be productive. (b) National consultants, recruited to carry out several studies and provide facilitation for seminars and training, have acquired experience that should earn them future contracts and help develop the local consulting profession. 19. While there is no follow-on project that continues or expands activities of the PAGD, the Bank may consider an IDF grant to support a consultative process to address administrative reform issues. In fact, there is a growing interest by the Senegalese authorities in the area of capacity-building and administrative reform, as confirmed by several recent Government actions, supported by UNDP, the Bank and other donors. A focal point for capacity-building has been established in the Ministry of Finance, in the context of the Partnership for Capacity-building in Africa initiative. E. BANK PERFORMANCE 20. The Bank's performance was deficient, from identification through supervision. At the outset, the project was a supply-driven vehicle, lacked Government ownership and did not reflect Government's strategy because there was none. Identification was based on the 1985 administrative assessment report, which reviewed the Senegalese administration's organization and activities and found much centralization and compartmentalization. The Bank decided the assessment could serve as an agenda for determining efficiency issues that could be supported by a project. The Initial Project Brief (IPB) stated that the project objective was "to install a commitment and develop a capacity to propose a reform strategy and carry it out." The IPB also noted 5  "Government's limited receptivity to discussing needed but politically sensitive and far- reaching changes in its institutional framework." It was naive of the Bank team to assume that a project could indeed install commitment and that the project as designed could succeed in an unreceptive environment. 21. Although the Bank team skill mix for the components was appropriate, preparation was deficient. The Bank had recognized the Government's institutional weaknesses, insufficient political will, reticence to seek Bank advice on politically sensitive [economic reform] issues and lack of demand for policy analysis. Yet it designed an operation that was too ambitious, a project to formulate a strategy to address issues each of which was sufficiently complex to warrant a TA project of its own. Other than the civil service component, which was prepared in a timely manner, Government authorities showed little interest in preparation of the economic and financial management component, which was finalized with a delay of nine months. 22. Bank performance in appraisal was mostly deficient. On the one hand, there is no evidence that lessons were learned from previous TA operations, especially the First TA credit to the parapublic sector, where a pervasive issue was the role and responsibilities of TA. The Borrower's implementing capacity was weak: PPF experience underscored problems in setting up procedures for each component, budgeting counterpart funds and establishing a mechanism to monitor disbursements. Because the MPC, which had the overall coordination mandate, tended to favor its own requests, a project administration unit was set up outside regular Government structures. The SDA component was added at the end of appraisal, without explanation for its sudden inclusion. Lack of Government commitment was signaled by several Bank staff, from identification through appraisal. 23. On the other hand, the appraisal team noted project risks, took into account on- going and proposed donor contributions and prepared a matrix with indicators of project success, although they were not quantifiable. The Bank had only a partial plan to offset project risks. Given the Government's absorptive capacity, the credit amount was too high. 24. Supervision was mostly deficient. There was lack of continuity in task management, with each of six task managers interpreting differently the project objectives. There was insufficient supervision of this labor-intensive operation, with an average of a single macroeconomic and SDA mission per year. As administrator for the CIDA funds, the Bank was at fault for not resolving more quickly the obstacle to using them. Several progress reports, from both the SDA and macroeconomic missions, were missing from files. In fact, there are many gaps in the regional files, the two worst being no documentation at all (1988-89) and only SDA correspondence in files (1993-95). 25. Supervision missions continued to identify implementation problems; nevertheless, Forms 590 consistently rated Satisfactory the DO and IP, with only one occurrence, in June 1994, of an Unsatisfactory IP rating. There appeared to be lack of collaboration among staff responsible for the macroeconomic components and the SDA component, 6  moreover their missions were rarely timed to coincide. Collaboration with donors other than CIDA was hardly mentioned. However, SDA Bank staff worked well with CIDA, the co-financier of this component, and usually joint missions took place. Field office staff always participated in macroeconomic supervision. In fact, a field staff became task manager for one year. 26. In 1993, the Bank expressed concern with the level of project expenditures on non- essential items and project management's internal controls over costs to ensure that procurement was done in a cost-efficient manner. But no IDA mission was sent to investigate and the situation worsened. In 1996 and 1997, the Bark criticized both the laxism in project financial management (unreimbursed personal loans, missing procurement documents, etc.) and the auditor's unqualified opinion on the PAGD accounts (despite lack of reconciliation between project records and commercial bank statements, lack of physical inventory, etc.). 27. Cognizant of all the above problems, Bank management did nlot close the project. In fact, the Bank seemed more interested than the Government in keeping the project open. The credit closing date was extended three times for a total of 36 months. With the turnover in task managers and Bank management, no manager wanted to query the disconnect between Form 590 ratings and aide-memoires or to take responsibility to close a project that was clearly not meeting objectives. F. BORROWER PERFORMANCE 28. Overall Borrower performance was mostly deficient. Implementation of the PAGD was characterized on the Government side by lack of ownership and political will, little coordination among government structures and frequent turnover of ministers and demotivated staff. While the Minister of Civil Service showed commitment during preparation, his successors and the other two ministers concerned indicated lack of ownership or interest in project objectives during most of the implementation period, which took place in a climate of economic distress, elections and stalled decision-making. 29. Project orientation was vulnerable to each ministerial reshuffle, which often resulted in interference in project autonomy. There was lack of coordination between the Statistics Department (DPS), which does statistical work and analysis, and the Planning Department (DP), which is responsible for carrying out socio-economic studies and defining an anti-poverty strategy. The project management team was weak, resulting in lack of leadership and coordination of project activities, non-compliance with IDA procurement procedures regarding consultant contracts, long delays in the procurement process, confusion in use of the Canadian grant funds and insufficient internal control mechanisms in the accounting function. Some PAGD component directors thought the project was supposed to fund office renovation and purchase of equipment and vehicles. Unfortunately, the PAGD management was never able to change this perception. 7  30. The interministerial committee (CICS), set up to oversee project implementation, met only once. Other decision-making groups were either dysfunctional or not operational: (a) the technical committee to coordinate and monitor the PAGD; (b) the consultative group for civil service reform; (c) the committee of users of SDA surveys; and (d) the committee to study computerization policy for the administration. The Government was constantly prodded by the Bank to transmit overdue work programs, finalize decrees, approve TORs and prepare requests for credit reallocation and closing date extensions. An incentive system for staff working under the PAGD was a condition of credit effectiveness but was never implemented. 31. The short-term priorities not envisaged in the PAGD but imposed by the SAL IV agenda (e.g., organizational audit and voluntary departure program) had a detrimental effect on the medium-term development progress under the project. PAGD work programs were not followed and most of their activities were rolled over, from one year to the next. The attention of Senegalese authorities was diverted to the availability of quick-disbursing budgetary assistance. Furthermore, the voluntary departure program resulted in loss of employees, which affected particularly the SDA component, when seven trained statisticians left the DPS. 32. Under the SDA component, the priority survey to collect staendard of living data was carried out and its findings were published and used. But the integrated household survey (ESAM) was launched several years late, and data analysis was not completed. DPS staff thought the proposed ESAM questionnaire was lengthy and the methodology too complex to administer. In addition, lack of Government interest in this component, lack of sound and solid technical leadership of the survey team and fledgling experience of the local survey team managers exacerbated difficulties to prepare the survey. 33. Of the original seven studies identified in the SAR, few were actually completed, and there was little follow-up by Government (see Table 7). In 1993, the Bank wrote to express concern about the amount of financing spent on studies whose recommendations were not implemented. Follow-up would have given credibility to Government's wish to pursue more studies. 34. Files indicate that lack of coordination between the Ministries of Civil Service and of Finance had been a problem for more than 12 years, with parallel systems in place and little sharing of infornation. Even after three extensions of the credit closing date to complete work on a centralized personnel roster to be shared between the two ministries for personnel and payroll management, the situation has not improved. At June 30, 1997, computer equipment had been procured and delivered and staff trained, but software compatibility is a problem and there is no central computerized roster of staff for personnel and payroll management. 8  G. ASSESSMENT OF OUTCOME 35. Assessment of the project outcome is highly unsatisfactory. After nine years, it failed to achieve its major objectives and has not yielded and is not expected to yield worthwhile development results. Regarding civil service reform, the law on merit-based promotion for the civil service was only voted by Parliament in June 1997, so it is too early to note any changes in efficiency or culture in the administration. And there is no centralized personnel roster to link personnel and payroll management. Regarding social dimensions of adjustment, the data from the integrated household survey has not been analyzed and there is no system to report on household standards of living to monitor the most vulnerable population. However, concerning strengthening of economic and financial management, the outcome on the ground is not as pessimistic, but not necessarily due to this project. Between 1994 and 1996, there has been a clear improvement in government tax revenue collection, most noticeably recovery in customs tax revenue. In addition, Senegal has implemented a prudent debt management policy, with recourse only to concessional financing. 36. On-the-job training took place and some technical skills were upgraded. But there were no performance indicators by which to judge skills transfer so one cannot judge the outcome of this objective. With the benefit of hindsight, it would have been preferable to close the PAGD credit earlier, by not extending the closing date three times. H. FUTURE OPERATIONS 37. There is still an unfinished reform agenda. Should the Bank design a future institutional development operation, it should do so when there exists an environment conducive to change, switching from "business as usual" to earnest capacity-building, with clear political will on the side of the Borrower. A future operation needs to address up-front the unresolved issue of staff motivation, which severely affects performance in the Senegalese administration. I. KEY LESSONS LEARNED 38. The most important lesson learned for the Bank is that ownership is a sine qua non for project success. When the PAGD was prepared, it was expected that "the project would help install a commitment to change", in spite of a non-receptive government. Commitment never materialized, and the Bank should realize that it cannot be put in place with a project. 39. The Bank team acknowledged that lack of motivation was a severe problem in the Senegalese administration and attempted to address it. As a condition of effectiveness, the Borrower was required to adopt a system for granting performance incentives for PAGD-beneficiary personnel. Although IDA approved a proposed system, it was never implemented. A lesson for the Bank is to recognize that such a sensitive problem cannot be solved with an agreement which has not benefited from open debate and wide support, 9  involving the civil service and its clients. Only when a proposed incentive system receives broad support by users and providers will it have a chance to be successfully implemented. 40. A third lesson for both the Bank and the Government is that institutional stability and continuity are essential to ensure responsibility for project outcome. In Senegal, there were several ministerial shuffles and merging of some ministries, plus turnover of administration personnel. Bank supervision was characterized by change in task managers (six) and management. Bank personnel changes resulted in successive managers avoiding to take a decision to close the credit. 41. A fourth lesson learned is for the Bank to adjust to realities. The Senegalese institutional reality was staff turnover and lack of incentives, which discouraged execution of work programs. The political reality was lack of Government ownership and commitment to implement the PAGD-financed program. When these realities became clear, Bank management should have closed the PAGD, or at the very least, not extended the closing date three times. Instead, by encouraging a disinterested government to request three extensions, the Bank demonstrated indecisiveness and undermined its own credibility with the Borrower. 10  PART II: STATISTICAL ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Credits Table 3: Project Timetable Table 4: Credit Disbursements: Cumulative Estimated and Actual Table 5: Key Indicators for Project Implementation Table 6: Key Indicators for Project Operation Table 7: Studies Included in Project Table 8A: Project Costs Table 8B: Project Financing Table 9: Economic Costs and Benefits Table 10: Status of Legal Covenants Table 11: Compliance with Operational Manual Statements Table 12: Bank Resources: Staff Inputs Table 13: Bank Resources: Missions 11  PART II -- STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macro Policies _ Sector Policies Financial Objectives .. Institutional Development Physical Objectives Poverty Reduction / Gender Issues / Other Social Objectives V Environmental Objectives _ Public Sector Management v Private Sector Management _ _ Other B. Project Sustainability r Likely Unlikely | Uncerta Development Management Project | |______ C. Bank Performance Highly Satisfactory Satisfactory Deficient Identification I/ Preparation Assistance J__ Appraisal Supervision J D. Borrower Performance Highly Satisfactory Satisfactory Deficient Preparation / Implementation I Covenant Compliance _ Operation NA E. Assessment of Outcome Highly Satisfactory Satisfactory Unsatisfactory Highly | l l | ~~~~~~~~~~~Unsatisfactory Development Management Project _ _ 7 12  Table 2: Related Bank Credits Credit Title Purpose Year Status of Approval Preceding operations 1. TA for Ec. & Fin. Planning, Technical 1980 closed Cr. 1061-SE Assistance 2. TA for Urban Mgt & Rehab., Cr. Technical 1984 closed 1458-SE Assistance 3. SAL III, Cr. 1802-SE and Structural 1987 closed Cr. A027-SE Adjustment Following operations 1. SAL IV, Cr. 2090-SE Structural 1990 closed Adjustment 13  Table 3: Project Timetable Steps in Date planned Date actual/ project cycle latest estimate Identification Initial Project Brief - EPS - May 29, 1987 (Executive Project April 1986 Summary) Preparation July 1986 February 1987 Appraisal November 1986 September 1987 Negotiations March 1987 February 1988 Letter of development N.A. policy (if applicable) Board presentation May 1987 May 24, 1988 Signing June 9, 1988 Effectiveness March 6, 1989 First tranche release (if N.A. applicable) Midterm review (if applicable) Second (and third) N.A. tranche release (if applicable) Project Completion December 31, 1993 June 30, 1996 Credit Closing June 30, 1994 June 30, 1997 Table 4: Credit Disbursements: Cumulative Estimated & Actual (US$ millions) FY88 FY89 FY90 FY91 FY92 (FY93 FY94 FY95 FY96 FY97 FY98 App Estimate 1.0 3.4 6.8 9.8 13.2 16.2 17.0 17.0 17.0 17.0 17.0 Actual 0 2.2 3.6 5.6 8.0 9.3 10.4 11.5 13.3 15.0 16.3 Actual % of Est. 65% 53% 57% 61% 57% 61% 68% 78% 88% 96% Date of final disbursement: December 1997 (see Preface) 14  Table 5: Key Indicators for Project Implementation I Key Implementation Estimated Actual Indicators in SAR A. National Planning System 1. Central Planning Structures -Review MPC organization and staffing -Achieved -Analyze plan. capacity sectoral ministries -Not achieved 2. Investment Planning -Define medium-term devt. framework -Not achieved -[Develop] methodologies + procedures project -Not achieved preparation and selection -[Develop] methodology ex-post evaluation -Not achieved 3. Long-term Devt. Alternatives -Develop methodologies + devt. scenarios -Not achieved B. Economic & Financial Management. 1. Mobilizing Fiscal Resources -Improve monitoring of exemptions -Partially achieved -Improve info on imported goods' values -Partially achieved -Improve information on tax base -Partially achieved -Strengthen audit of tax returns -Not achieved 2. Management of Public Debt -Inventory debts, monitor transactions -Partially achieved -Establish reporting system -Partially achieved -Analyze debt service -Not achieved -Prepare financing plan for debt account -Not achieved 3. Rehab. Statistical System -Produce provisional national accounts -Partially achieved 4. Policy Formulation & -Constitute study unit -Not achieved Monitoring -Develop methodologies -Not achieved C. Social Dimensions of Adjustment 1. Household Budget Survey + -Carry out integ. household survey (ESAM) -Partially achieved; Standard of Living incomplete analysis -Carry out standard of living survey (EP) -Achieved, published 2. Socio-economic Studies -Identify issues + conduct socio-econ. studies -Not achieved D. Modernizing Civil Service system 1. Rehab. Personnel Agencies -Inventory personnel, analyze existing organz -Achieved -Set up new structure, procedures, informnation -Partially achieved, not system computerized -Establish internal control system -Not achieved -Establish computerized personnel data base -Not achieved -Train staff -Partially achieved -Apply new system -Not achieved 2. Improve Personnel Policies -Staff study unit -Not achieved -Review current salary + contract practices -Not achieved -Define measures to improve current practices -Not achieved -Update existing laws and regulations -Not achieved 15  Table 6: "Selected Indicators of Project Success" Key Operating Indicators in SAR Estimated Actual A. National Planning System 1. Clear definition of responsibilities of central, Not achieved sectoral and regional planning units 2. Actual transfer of activities to sectoral Not achieved ministries and PE for project identification, preparation and analysis 3. Sector reports on potential and constraints of Partially achieved; Senegalese economy and on its long-term growth Senegal 2015 prospects report published 4. Three-year rolling Public Investment Program Achieved updated yearly; consolidated investment budget produced annually B. Economic & Financial 1. Increased tax revenues due to improved tax Achieved from Management administration through modernized data 1994-96 processing techniques and better trained and motivated staff 2. Monthly reports on public debt and actual Partially achieved managing of the debt monitoring system by national staff 3. Production of a budgetary and expenditures Not achieved i __________________________ _ |policy framework 4. Production of provisional national accounts Partially achieved (1987).and final national accounts a year later C. Social Dimensions of 1. Quarterly reports on household standards of Not achieved Adjustment living 2. Reports on socio-economic conditions of Not achieved under-privileged groups 3. Preparation of social adjustment projects Not achieved D. Modernizing Civil Service 1. Improved data on personnel situation reported Partially achieved, System on a quarterly basis through a modernized improved data but Central Roster System no central roster 2. Accurate reporting on public payroll situation Not achieved; no through improved data processing equipment link between civ. and better trained, motivated staff. serv. and payroll 3. Improved day-to-day personnel Not achieved administration through rehabilitation of Civil Service Department, recruitment of high level contractuals and better trained, motivated staff 4. Adoption and implementation of Not achieved recommendations to improve civil service rules and regulations 16  Table 7: Studies Included in Project Study Purpose as defined at Status Impact of study appraisal/redefined Permanent survey of To assess changing -Priority survey -Results used as standards of living conditions of various carried out in 1991 input to Poverty social groups, with Assessment particular focus on poor -Data not analyzed -Integrated -No mechanism to household survey monitor standards of carried out in 1995 living Program of in-depth To identify problems -Not done socio-economic associated with studies adjustment measures, to prepare programs to alleviate adverse effects Review of staff To define responsibility -Recommendations capacity, structures between MPC and of study given to and procedures of sectoral ministries, Minister in 1991; Ministry of Planning improve coordination reorganization did & Cooperation between them not take place Studies to assess the To help Government -Senegal 2015 was potential and formulate a long-term, produced constraints of the global development economy strategy Review proposed To support expansion of -Not done delegation of decision- tax base and improvement making tax authority in revenue collection to field offices, tax filing procedures + forms Surveys of the To gather data for -Not done informal sector national accounts Review current civil To adapt to short-term -Guichet unique of service policy needs for redeployment existing civil service framework (salary and and retirement and to laws; but no changes contracts) long-term needs for in legislation or in I training and recruitment civil service policy | 17  Table 8A: Project Costs Appraisal estimate (US$M) Actual/latest estimate (US$M) Local costs Foreign Total Local Foreign Total costs costs costs Item _ NA NA NA National Planning 2.24 1.54 3.78 Ec. & Fin. Mgt 2.24 3.07 5.31 Social Dimensions of 1.97 2.48 4.45 Adjustment Modernizing Civil 2.32 3.39 5.71 Service Proj. Administration .63 .40 1.03 Contingencies 1.93 2.49 4.42 Total 11.33 13.37 24.70 NA NA NA N.B. Details of actual costs are available only by Credit category, not by components as listed in the SAR Table 8B: Project Financing Source Appraisal estimate (US$M) Actual/latest estimate (US$M) Local Foreign Total Local Foreign Total costs costs costs costs IDA 5.0 12.0 17.0 16.30 Government 2.0 - 2.0 2.00 CIDA - 2.0 2.0 1.67 TOTAL 7.0 1 14.0 21.0 19.97 Table 9: Economic Costs and Benefits NOT APPLICABLE 18  Table 10: Status of Legal Covenants Agreement Section Covenant Present Original Revised Description of Covenant Comments Type Status Fulfillment Fulfillment Date Date Credit 3.03 (a) 5 C 1988 Borrower to maintain Since MPC was dismantled in 1990, project PAU in MPC headed by administrator reported to Minister of State project administrator with Modernization. ______ __________ __________ ___________ ___________ well-qualified staff Credit 3.03(b) 9 PC 1989 Borrower to maintain Interministerial Council was legally constituted interministerial council to but met only once. coordinate and monitor project implementation and work programs Credit 3.04 9 CD 1990 later than Borrower to submit for Work programs submitted several months late October 31 IDA approval, by October into following calendar year. each year 31 each year, draft work programs for following calendar year Credit 3.05 10 NC Borrower to establish and Unit was not established. In 1994, a Policy maintain econ. and fin. Analysis Unit was established with financial policy study unit in Part support of African Capacity Building B.5 of project with Foundation. required staff Credit 3.06 10 PC 1989 For Part C, Borrower to An interministerial committee for SDA was establish and maintain constituted in 1989, but never fulfilled its technical committee of mandate. users of SDA studies and surveys, reporting to interministerial council Credit 4.01 1 PC yearly Maintain adequate records Problems in using CIDA funds. Yearly audits of project accts; annual prepared; some audits noted lack of physical audit by independent inventory, non-reconciliation bank statements, auditors. lack of procurement documents C = covenant complied with CD = complied with after delay PC = complied with partially NC = not complied with 19  Table 11: Compliance with Operational Manual Statements Statement number and title Describe and comment on lack of compliance 1. N/A 2. N/A 3. N/A Table 12: Bank Resources: Staff Inputs Stage of Planned Revised Actual Project Cycle Weeks US$ Weeks US$ Weeks US$ '000 Preparation to N.A. N.A. N.A. N.A. 118.3 190,100 Preappraisal Appraisal 49.5 84,360 Negotiations through 8.2 14,760 Board Supervision . 232.5 330,370 Completion _ 6.5 17,500 TOTAL N.A. N.A. N.A. N.A. 415.0 637,090 20  Table 13: Bank Resources: Staff Missions Stage of Month/ No. of Days in Specialized Performance Rating Types of Project Cycle Year Persons Field Staff Skills Implemen Dev. Problems tation Objectives To Appraisal N.A. Appraisal through Board 6/87 7 18 PSM, EC, OP, ST 10/87 2 21 PSM 12/87 1 15 PSM Supervision 6/88 2 8 PSM Effectiveness 10/88 1 7 PSM 1 1 Effectiveness 6/90 2 13 EC,OP 1 2 proj mgt, ineffective policy- making body to guide project implementation 10/90 1 12 PSM 4/91 2 22 PSM, OP 2 2 Proj mgt, TA, studies 5/91 2 NA ST _______To prepare priority survey 8/91 1 9 ST To prepare priority survey 2/92 2 4 PSM, OP 2 2 Proj. mgt., TA, studies, fm cov. 3/93 2 10 PSM, OP 2 2 Legal cov, proj mgt 6/94 1 20 OP U S Proj. mgt., fin. cov. no progress reform agenda for 3 years 5/95 2 15 OP, ST S S Proj. mgt., fin. & leg cov., procure. Completion 4/96 3 11 EC, ST, PSM S S Proj. mgt., fin. & leg cov., procure. Progress in civ. serv. + SDA only 6/97 2 4 EC, CON S S- Rating civ serv only Specialized Staff: EC = economist Performance ratings: I = No problems ST = statistician 2 = Moderate problems PSM public sector management specialist 3 = Major problems; solution in view OP = operations officer 4 = Major problems; no solution in view CON = consultant S = Satisfactory U = Unsatisfactory 21  MAP SECTION  Fe ,nnr r.-!N. i~~~~~~~~~~~16a 1'5' 1M4 i3~ 12 ieaaaia ~ ~ ALGERIA La $~~naeI MAURTANIASENEGAL MARTNIA P dr > MALI I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~ Z~~~~~~I~~~~ ~0 SELECTED CITIES AND TOWNS ~~~<S.NEGAL< Rich~~~~~~~~~~~~~~ ard DHganaeH 60 REGION CAPITALS 7-TEA NGER Lao ~ Dgna ~NATIONAL CAPITAL GAMBlLT~ . I ~s~;ai BURKlREGION BOUNDARIES FSSA GUINEA C~~~~ assr SAINT - '~" - INTERNATIONAL BOUNDARIES Li) MPalo/ hlne Gandiol 0~~~~~~~~~~~~~~Lagbar. L I Lugae 0Niar Mbeuleukh e Mat,m 'a' -x ~ ~ ~ ~ ~ ~~-~~" ~Sogui 1> 0 K6bAm6r L O Darah '6g2gnu6re Ran6rouo / ? 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