Document of The World Bank FOR OFICIAL USE ONLY MICROFICHE COPY Report No. 10332-BUR Type: (SAR) !NGRAM, J./ X34653 / J9 081/ AF5CO STAFF APPRAISAL REPORT BURKINA FASO PUBLIC INSTITUTIONAL DEVELOPMENT PROJECT VOLUME I MAY 12, 1992 Country Operations Division Sahelian Department Africa Region This document has a restricted distribution mnd 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 EOUIVALENTS Currency Unit = CFA franc (CFAF) US$1.00 = CFAF 272.00 CFAF I million = US$3,505 SYSTEM OF WEIGHTS AND MEASURES: METRIC FISCAL YEAR January I - December 31 This report is based on the findings of a World Bank appraisal mission which took place from March 9 to 27, 1992 and which consisted of Messrs. Joseph K. Ingram (Principal Country Officer and Mission Leader), Gerard Boulch (Public Sector Management Specialist), Rajen Soopramanien (Lawyer), Bhajat Achikhache (Social Dimensions of Adjustment Specialist), Gosta Westring, S. Zalinski, J. Gaeremynck and A. M6n6menis (Consultants). Mmes. Olga Jonas (Country Economist), Laurence Telson (Consultant), Messrs. Hiroaki Suzuki (Public Sector Management Speciaiist), Salomon Samen (Trade Economist), Boubacar Traore (Economist), Leo Maraboli (Mining Specialist) also contributed to the preparation. Assistance was also provided by Mr. Justin Baro (Public Finance Specialist in the Resident Mission). Participating jointly in the appraisal on behalf of the UNDP were Messrs. X. L. Nguyen and L. Goreux, on behalf of the French Ministry of Cooperation Mr. C. Colombe, and on behalf of the German Government Mr. R. Meier. Ms. Barbara Nunherg was the lead Advisor, and Mr. Kadir Yurukoglu and Ms. Francoise Bentchikou acted as peer reviewers. Mr. Mustapha Rouis reviewed the operation for the Regional Front Office. Ms. Katherine Marshall is the Department Director, Mr. Emmerich Schebeck, the Department Project Advisor. Mr. Franiois Laporte, the Department Lead Economist and Mr. Jean-Louis Sarbib, the Managing Division Chief. Support in project costing was also provided by Ms. Ilene Photos (Operations Analyst). Secretarial support was provided by Mrs. Rathna Chiniah. FOR OMCIL USE ONLY ABBREVIATIONS AND ACRONYMS AfDB African Development Bank BIP Banque Integree des Projets CARFO Public Service Pension Fund CESAG Centre Africain d'Etudes Superieures en Gestion (Dakar) CNSS National Social Security Fund DAAF Administrative and Finance Department DCF Financial Controller's Office DEF Department of Financial Execution DEP Research and Planning Department DEPSI Programming and Monitoring of Investment DINAME Public Procurement Office DGAR Director General of Administrative Reforms DGD Customs DGI Internal Revenue Department EDI Economic Development Institute ENAM National Public Administration School ENAREF National School for Public Finance Management END National Customs School IGF Inspector General of Finance INSD National Institute of Statistics and Demography ITC International Trade Centre LDD Legislative Drafting Division MCSAR Ministry of Civil Service and Administrative Reform NATCAP National Technical Cooperation Assessment and Program ONMP Office National de Marches Publics PIAF Programme Integrd d'Applications Financibres PMU Project Management Unit QCC Quality Control Circle SISP Systeme d'information et de suivi des projets SOE Statements of Expenditures TPG Controller General TVA Value Added Tax UMOA West African Monetary Union UNDP United Nations Development Program This document has a ratricted 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. BURKINA FASO PUBLIC INSTITUTIONAL DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. Credit and Project Summary .................. i .. BAKGROUND .I Introduction . I Overview of the Economy. 2 II. PUBLIC INSTITUTIONAL DEVELOPMENT-CONSTRAINTS AND REFORMS 3 Lessons Learned from Previous Bank Experience ................ 6 A. Budgetary Management ......... ....................... 6 1. Operational Control ............................. 7 2. Management Control ............................. 9 3. Strategic Planning .............................. 10 B. Public Procurement .......... ....................... 12 C. Civil Service Management ............................. 14 D. The Legal and Judicial Context .......................... 15 E. Communication of Economic Policy ....................... 16 Hi. THE PROJECT .......................................... 17 Objectives ........................................ 17 Summary Project Description ........................... 17 Detailed Project Features .............................. 18 A. Information and Data Management ........................ 18 B. Budget Management ......... ....................... 20 C. Public Procurement Reform ............................ 20 D. Strengthening Civil Service Management .................... 23 E. Legal and Judicial Reforms ............................ 24 F. Strengthening Communication of Economic Policy .... .......... 26 G. Rationale for IDA Involvement .......................... 27 IV. PROJECT COSTS. FINANCING AND PROCUREMENT .... .......... 27 Project Costs ..................................... 27 Financing Plan . ................................... 29 Procurement ...................................... 29 Disbursements . ................................... 31 Accounts and Audits ................................ 32 V. PROJECT IMPLEMENTATION .............................. 32 Project Management ................................ 32 Annual Work Program and Reporting ......... ............. 33 VI. BENEFITS AND RISKS ................................ 34 VII. AGREEMENTS ................................. 35 Agreements Reached ............................... 35 Recommendation ......... ......................... 37 ANNEXES Annex A: Summary Program of Assistance by Major Donors to PID .38 Annex B: Project Cost Tables .40 Table 1: Project Components by Year - Base Costs .40 Table 2: Summary Accounts by Year - Base Costs (CFAF) .41 Table 3: Summary Accounts Cost Summary - Local and Foreign (CFAF/US$) .42 Table 4: Summary Accounts by Year - Including Contingencies (CFAF/US$) .43 Annex C: Consultants by subcomponent ...................... 44 Annex D: Summary Disbursement Schedule ...................... 46 Annex E: Project Supervision Schedule ...................... 47 MAP IBRD 20660 BURKINA FASO PUBLIC INSTITUTIONAL DEVELOPMENT PROJECT Credit and Project Summar y Borrower: Government of Burkina Faso Implementing Agency: Ministry of Civil Service and Administrative Reform Amount: SDR 11 million (US$15 million equivalent) .Terms: Standard IDA terms with a maturity of 40 years Joint Cofinancing: Government of Norway: US$0.30 million equivalent Coordinated Financing: UNDP: US$12 million equivalent Government of France: US$10.7 million equivalent Government of Germany: US$1.5 million equivalent AfDB: US$1 million equivalent Project Desicription: The central objective of the proposed project is to support the development of the major public institutions in Burkina charged with economic and sector management. The project will facilitate the implementation of the medium-term macroeconomic adjustment program introduced in 1990. The project is a four-year time slice of a wider government program of institutional development/technical assistance intended to reinforce the process of economic reform and public sector management which a number of other donors are also supporting. The strategy to sustain institutional development in Burkina includes: (i) ensuring adequate legislative and administrative rules in targeted institutions; (ii) revising existing procedures and adopting new ones for resource/budgetary use in those institutions; and (iii) beginning to build national capacity to plan, manage, and communicate resource management issues, through training Burkinabe, rather than through widespread long-term technical assistance. Specifically, the project will: (i) reinforce information and budgetary management functions in the Administrative and Finance Departments (DAAF) and the Research and Planning Departments (DEP) of four priority ministries (Finance, Health, Education, and Civil Service); (ii) finance a civil service census and introduce new procedures for civil service management and training; (iii) i, support an updating of Burkina's public procurement code, legislation, and procedures; (iv) through legal, procedural reforms, and training, assist Burkina in creating a favourable business climate with appropriate commercial laws, judicial practices and personnel; and (v) finance the training of Burkinabb journalists in economic journalism so as to improve the quality of analysis and reporting of economic policy. Estimated C=ss USS Millions I 6% of Local Foreign Total Forign l__ __ __ __ ___ __ __ __ __ _Exchange A. Infonnation and Budgetary Managernent 2.35 5.41 7.76 70.0 B. Prcurement Reforms 0.02 0.08 0.10 80.0 C. Civil Service Reforms 0.87 2.28 3.15 72.0 D. Lega: and Judicial Refoms 0.88 1.97 2.85 69.0 E. Traiiing of Joumalis 0.045 0.045 0.09 50.0 F. Audits 0.02 0.06 0.08 75.0 0. PPF Refinancing 0.00 0.75 0.75 100.0 Total Base Costs 4.19 10.60 14.78 72.0 Physical Contingencies 0.46 0.92 1.38 67.0 Price Contingencies 0.36 0.43 0.79 54.0 TOTAL PROJECT COSTS 5.01 11.95 16.96 70.0 Financing Sources: Corimancing USS Millions Local J Forign Total Government of Norway 0.03 0.27 0.30 IDA 3.38 11.68 15.06 Government of Burkina Faso 1.60 0.00 1.60 [ T OTALL 5.0 1J 11.95 16.96 ThT i the nuncing plan for e 5 I I.9S part of a concered effort wi other donors for which tmaing ha been coordinatcd. The total contribution of other donors is about USS25.2 milion, of which USS12 milion for the UNDP. US$10.7 mitlion for Franee, USSI.5 million for Gennany, and about US$I million for the African Development Bank. iii IDA Fiscal Year (USS Millions) _ _ ._ = . . -9R2 '993 1994 ( 1995 1996 Annual 0.75 J 5.12 4.67 | 3.65 0.81 Cumuiatiiv 0.75 5.87 10.53 14.18 15.00 W ll'h u disburscment profilo for TA/ID projects in Africa is about 84 uionths. For the ollowing reasons, we expect this credit to disburse in about 48 months: (i) the SUCCCes to date in implementing SAL measures in Burkina; (ii) the already advanced state of a number of project actions; and (iii) the special arrangements for IDA-ftnanced procurement under the project. Project Benefits and Riskg: Project benefits would be: (i) improved mana6 ment of information and of the budgetary proc.ess thereby reinforcing the adjustment program; (ii) more effective management of the civil service including training responsive to financial constraints and personnel requirements and, ultimately, improved working conditions thereby allowing the Government to more easily retain higher quality staff; (iii) a transparent and more efficient system of public procurement; (iv) creation of a legal framework providing confidence to private investors; and (v) increased public understanding of economic policy and reform through building the capacity of local journalists and editors to analyze and report on economic policy and management. In addition to facilitating implementation of Burkina's economic reform program, the project would also serve as a vehicle for better coordination of technical assistance and cooperation from the major donors. The main risks for the project are: (i) that the political reform process to be completed by June 1992 is delayed or produces a result which does not allow the Government to sustain its macroeconomic reform program; and (ii) the Government's capacity to manage institutional development operations proves inadequate. The first risk is mitigated by the fact -that the economic reform program is supported by virtually all of Burkina's major political parties. Similarly, the project components entail such basic improvements that the project would enjoy broad multipartisan support. The Government's strong policy commitment to building up its national manpower and institutional capacity should result in a strengthening of its capacity to manage institutional development operations. The Government's strategy of deconcentratii,g management of each component to the line ministry concerned, with overall administrative coordination to be given to the Ministry of Civil Service and Administrative Reform (MCSAR), should minimize the complexity of managing a multi-component operation. In addition, the project will be implemented in accordance with well-defined work programs, including a mid-term review, which permit flexibility and mid-course amendments where necessary. Because of its link to the SAL, the project will also receive close supervision from the Bank in the course iv of its implementation, and the SAL supervision plan will be amended to ensure proper coordination. Pconomic Rate of Return: Not applicable Mam: IBRD 20660 BURKINA FASO EUJJC INSTITUTIONAL DEVELOPMENT PROJECT STAFF APPRAISAL REPORT L.BACKGROUND Introduction 1. The Government of Burkina Faso is implementing a structural adjustment program for which, in June 1991 IDA approved a first SAL of SDR 60 million. The main objective of the program is to transform the iconomy, which has been dominated by a strongly centralized and all-encompassing public sector, into an economy which gives the primary initiative for economic growth and development to the private sector. Though the SAL provides the policy framework for such a transformation, it is not intended to reform institutions, thuugh it underlines the need to do so. 2. The Government realizes that the procedures and competence of its administration, and the legal context in which economic activity takes place, are not adequate to switch smoothly from a role which has focussed on centralized control and law and order, to a development role responsive to and supportive of a liberalized economy in a more open political environment. In May 1991, the Government presented its structural adjustment program at a Roundtable of donors, and at the same time described initial efforts to strengthen its institutional capacity to manage the program../ The preliminary results of a National Technical Cooperation Assessment and Program (NATCAP) survey launched by UNDP was also presented and concluded that (i) technical cooperation be used in the future to build national human resource capacity rather than just providing technical skills through technical assistance (TA); (ii) TA, where necessary, be limited to the priority sectors (Primary Education, Health, Infrastructure) and; (iii) the use of TA and technical cooperation be better managed and coordinated. Since then, in collaboration with a number of donors, the Government has refined its approach to institutional development, and in October 1991 adopted as Government, policy the recommendations of two institutional development strategy framework papers.2/ The principal objectives set out by Government are summarized as: (i) the reestablishment of a constitutional state with laws guaranteeing civil liberties and private sector activities; (ii) the peaceful and equitable development of the country, ultimately requiring an effective decentralization and deconcentration of government functions; (iii) the progressive integration of Burkina's economy into a harmonized West African economic union, thereby mitigating the effects of Burkina's [j "Reflexion sur la capacite institutionelle de gestion economique" et "Cooperation Technique: Document d'orientation". Premibre conference de Table Ronde, Geneve 23- 24 mai 1991, pp. 61-87. Z/ "Cooperation Technique: Document Cadre de Politique", Ministbre des Finances et du Plan, Secretariat d'Etat au Plan, Nov. 1991. and "Plan d'Action de Modernisation de l'Administration Burkinabb; Programme et Strategie", approved by Council of Ministers, October 1991. -2 - landlocked position and relatively small market; and (iv) successful economic adjustment due in part to more rigorous budget and public expenditure management. 3. On this basis, the Government has formulated a national program for institutional development intended to reinforce those ministries most critical to the success of its structural adjustment program. Though some of its actions have been ongoing with donor support for some time, the Government's program systematically groups these and newly identified activities in a coherent and complementary manner around a common set of objectives. The principal elements in this program include: (i) creation of an institutional framework (includ;ng the legal context) and administrative organizations conducive to more efficient public ad- ration; (ii) better management of the civil service and its evolution in size and in quality; (i'.. :dernizing the tools for managing the public sector wage bill; and (iv) modernizing the means for improving management of central and local government finances through a progressive decentralization and deconcentration of administrative functions. Interested donors have coordinated their support to the overall program, which is fully financed. The activities to be financed by the proposed IDA credit are a four-year time slice of selected components of the larger Government program. 4. During June-August 1991, IDA worked with the Burkinabb authorities in defining the activities to be financed by the proposed credit. Preparation was further refined during a preparation mission in November 1991. A Project Preparation Facility advance (P-704-BUR) was approved in October, 1991 for US$750,000. PPF funding has supported: (i) studies to reorganize and improve information and budgetary management in the departments for research and programming (DEPs), and the administrative and finance departments (DAAFs) of the Ministries of FSinance, Public Service, Education, and Health; (ii) restructuring and computerization of the customs service; (iii) initial studies on indemnities and indexing of civil service remuneration; (iv) initial studies on civil service otganization and the preparation of job descriptions; (v) a civil service census; (vi) harmonization of civil service and payroll updating procedures; (vii) studies on upgrading the computerized payroll system and creation of a compatible civil service information management system; and (viii) with trust fund financing from the French Government, preparation of legal reforms including a review of needs for regular publication of the Official Journal. Project appraisal was completed in March 1992. Overviev of the Economy 5. During most of the 1980s, the economy enjoyed relatively good growth, as real GDP grew by 3.7 percent a year between 1982 and 1990. Much of the growth was, however, derived from two unsustainable sources: (. i -n expansion of public consumption and investment spending; and (ii) a high agricultural growtn t6. 1 percent per annum in 1982-88) due to good weather and to bringing of new land, recently freed of onchocerc3asis, under cultivation. In contrast to a rapid growth of construction (fueled in part by high public investment spending) and an expansion of transport and other services (driven largely by the good performance of agriculture), manufacturing stagnated during the 1980s, even though highly protected by import controls. The reasoi:s were several. Structural factors such as poor technical skills, high energy and transport costs, high wages, worker benefits, and rigid price and trade controls hurt competitiveness. The policy framework was complex and sometimes contradictory while special tax exemptions and protective measures deterred efficiency gains. Real GDP declined by 0.4 percent in 1989 and grew only by 1.3 percent in 1990, largely because agricultural output fell with a reurrence of poor rainfall and because the public spending spree could not be sustained. - 3 - 6. The cumulative overall budget deficits of the Central Government which averaged 12 percent of GDP ir 1986-90 (excluding grants), produced a mounting debt service burden. Administrative inefficiencies, a disappointing tax revenue performance linked to the stagnation of the formal sector, and the priority given to other expenditures, pushed Burkina into arrears on its domestic and external debt service obligations. At the end of 1990, external principal and interest arrears amounted to roughly CFAF 49.4 billion, while domestic arrears were etimated at an additional CFAF 34.0 billion. Combined, these were approximately equivalent to one year's fiscal revenue. A realistic borrowing policy and a Paris Club restructuring effort started in March 1991, have since become indispensable components of the Government's program of adjustment in the public sector. 7. By 1990, the structure of current public expenditures had also become a subject of concern. The wage bill was increasing too fast, crowding out investment and operating expenditures. The amounts allocated for maintenance of basic health services and primary school education were not sufficient to substantially increase coverage and enrollment rates, which remained well below the average for similarly poor countries. Increasingly, recurrent expenditu es of economic or social importance were being financed by external grant or simply being eliminated. The modern sector continued to be dominated by public enterprises, an increasing number of which were in serious financial difficulty, despite generous fiscal exonerations and protection from competing imports. The government-dominated banking system had also fallen into disarray, with disquictingly low levels of liquidity and high levels of non- performing loans in the portfolios of some of the major banks. 8. Burkina's external accounts have developed relatively favorably during the 1980s, thanks to increased cotton and gold export revenues. The current account deficit (excluding official transfers) improved compared with the performance in 1977-82. Net capital inflows sufficed not only to cover the current account deficits during 1982-88, but also to build up gross official reserves to the equivalent of almost 7 months of imports at the end of 1988. In 1989, however, Burkina's BOP position weakened dramatically due to a deterioration in the trade balance, a larger deficit in the service account, lower net private transfers and the Government's iiability for additional arrears following the liquidation of the former Cote d'Ivoire/Burkina owned railway company (RAN). Although the external trade balance improved slightly in 1990, the situation and the outlook for the early 1990s, remained fragile. 9. In 1990, the Government accepted the need to address structural problems both in public resource management and in the unattractive framework for private sector development, so that a major crisis could be averted and economic growth accelerated and sustained. Following a lengthy internal debate intended to mobilize domestic support for reform, in early 1991, the Government adopted a macro-economic policy framework with support from the IMF and a structural adjustment program supported by the first SAL from IDA. In 1990 and 1991, the authorities made progress in addressing key budgetary issues and adopted strong measures to effect a further improvement in 1992. Though some delays in implementation have occurred as a result of the political reform process, so far, program implementation is on track. H. PUBLIC INSTITUTIONAL DEVELOPMENT - CONSTRAINTS AND REFORMS 10. Since the colonial period, Burkina Faso has developed a public administration whose main tasks have been to maintain order and to collect fiscal revenue. Management functions such as -4- financial and economic forecasting, investment planning, and personnel management have been lacking. The Treasury Department has been more important than the Budget Ministry. In a relatively stable internationai =somic environment, the need for change in this basic heritage was not felt. At the time of independence !here were, therefore, very few reasons to question the role of the State and consider reform of the administrative system. Some of the functicns fulfilled by the colonial power (eg. budgeting) were transferred to Burkina at the time of independence, and others (eg. investment planning) were introduced later. It is notable, however, that both these functions had remained peripheral to the functioning of the State. 11. The inherited "administrative culture" has been solidly implanted in Burkina's institutional context. It presents the administration as a neutral instrument, subservient to the political structure, with its own rationale (public service), its own legal system, and distinctive characteristics. Indeed, this bureaucratic philosophy assumes that: (a) the civil servant is politically neutral (the famous "devoir de reserve"), acccptable to changing political leaders ensuring the permanence of the administration, and the fair treatment of all citizens, and (b) the civil servant is propertyless, thereby ensuring the absence of conflicts of interest. Remuneration, career and employment protection are viewed as fundamental pillars of the administration and not simple management variables. 12. In post independence Burkina, as in many other African countries, political and/or economic events led, with various degrees of brutality to (a) a fairly rapid surrendering to the political will of whatever little initiative the administration had or was willing to exert, reinforcing its passive role, and (b) a de fagto abandonment of the two fundamental characteristics of political neutrality and security of tenure. Following the 1983 revolution, political activism (formal ideological tests) was required to remain in or to join the administration; and the scope of State involvement encompassed virtually everything. Nonetheless, the administration kept doing exactly what it was doing before ind-pendence: enforcitr, order, collecting taxes and execxting decisions made elsewhere. 13. Oil shocks, primary product price instability, droughts, international economic recession, an overextended and not very well managed public sector, led the country along the path to external as well as internal financial difficulties. In 1991, these developments resulted in the Government's structural adjustment program. As noted earlier, one of the main objectives of this program is to open up the economy and return economic initiative to the private sector. In the short term, its main stabilization objective is to reduce financial imbalances in external and internal accounts, in which the public wage bill looms the largest. The policy framework agreed upon by the donors and the government explicitly requires: (i) a change in the role of the State, and (ii) short term financial measures, such as a reduction in the public deficit and the wage bIll. The structural adjustment program;n itelf, however, provides only limited ways and means to achieving these objectives. 14. Recent political events, culminating in the promulgation of a new constitution, the restoration of a multi-party democracy and free elections, are now being reflected in the structure of the Government, beginning with the abolition of 'party-State" structures. The consequences of these economic and political choices, however, have yet to be fully felt in the administration, which does not have the national caDacity to reform and transform itself in response to the new demands of a liberalized economic and political system. In particular, emphasis needs to be shifted fron control to management through deconcentration of decision making, delegation of authority within and outside the administration, relinquishing of powers appropriated by the executive (legislative and judicial), and responding to citizens demands for better public services. 15. Because of such deficiencies in its administration, the Burkinabe state has never been able to formulate policy, implement programs and deliver services as effectively as desired. To offset these deficiencies, Burkina received, and still receives, a sizable amount of TA, which according to Government estimates currenty represents about 35 percent of external assistance. Presently, Burkina benefits from some 30 institutionally oriented TA projects financed by three major multinational agencies (UN system, the European Community, the AfDB), and half a dozen countries (USA, France, Germany, Switzerland, Canada, Italy). Other donors such as Norway and Japan are showing a growing interest 3/. For the 1989-1994 period, these projects represent a total of about US$28 million. Most of these TA projects, however, were designed with the former conception of the State's role in mind: they were not designed around a coherent Government strategy with respect to technical assistance and institutional development. Rather, they can be characterized by (a) an emphasis on technical inputs, to resolve narrower technical problems, (b) often supply driven TA, (c) substitution TA, both individually and/or institutionally, and (d) reinforcing a dirigist philosophy of Government. 16. Despite limited benefits to Burkina of past TA, useful lessons have been identified from previous experience, both in Burkina and from elsewhere in Africa. The relative lack of success in building effective national institutions can be largely attributed to three broad factors: (i) the traditional project design approach, characterized by the strong preference for a narrow set of technical objectives which led to components consisting of newly designed institutions with the provision of equipment responding to immediate and more narrowly identified problems; (ii) an ensuing piecemeal and uncoordinated approach to institutional support; and (iii) the proliferation of specialized project management units (PMUs) unrelated to the institutions to be reinforced or reformed, staffed with seconded civil servants often remunerated on a different scale effectively resulting in a disowning of the projects by staff of the institutions themselves. A focus on the performance of critical functions, not necessarily institutionally specific, such as information use and management, budgetary management and accountability, and the role of the State, have largely been overlooked. 17. As for civil service reform in Burkina, donors have been providing support hampered by the absence of a coherent Government reform framework. Some have focussed exclusively on dealing with reform in the short-term through wage bill containment, while others have concentrated on personnel management in the long-term with no concern for the wage bill and the budget constraint. Activities have often been at cross-purposes and may also be complicated in the short-term by Burkina's restoration of democracy. Security of tenure and income protection are now resurfacing as priorities, with former civil servants fired by the previous regime taking advantage of the more liberal political environment by seeking to have their rights restored. Current civil servants, througlh their unions, are strengthening their demands to end the financial freeze on promotions agreed as part of the adjustment effort. / IThe Bank has not yet financed any free-standing TA or institutional development project in Burkina. - 6 - Lhmsons learned from Previous Bank Experience 18. Though TA in Africa in the form of long term expatriates, has been reasonably successful when aimed at flxing specific technical problems (eg. computerization), because it has often been supply driven with a short-term focus, it has been less than effective when seeking to build durable public institutional capacity. Indeed, key lessons learned from free-standing IDA- financed TA/Institutional Development projects in Sub-Saharan Africa (including three Sahelian TA Operations in Mali, Senegal and Niger) include: (i) the importance of a link between the degree of Government commitment to the TA project in question and to a parallel adjustnent operation; (ii) the need to define as early as possible in-country training programs based on borrower needs and resources and a well-defined strategy and eligibility criteria, thereby strengthening national training capacities and limiting overseas training to justifiable exceptions; (iii) the importance of clearly defining the responsibilities of any project management unit established and ensuring it does not take on a life of its own during or after project completion; (iv) providing systematic ano adequate supervision, with appropriate technical expertise, both from headquarters and from the Resident Mission; (v) limiting and close monitoring of unallocated funds to ensure that financing requests are in line with project priorities; and (vi) minimizing the financing of recurrent costs. Identified as equally important on the basis of past experience, is the need to allow for greater flexibility during implementation rather than setting up a rigid "blueprint approach" more suited to capital investment projects. 19. Lessons from experience have led to adopting the following principles in designing the proposed project: (a) taking into account the changing role of the State under the adjustment program and in the context of the political transition and its impact on the function and the form of administration, (b) critically examining the concepts underlying existing or proposed public sector institutions, (c) excluding from the project what cannot be carried out and managed by the administration itself, and finally (d) limiting project activities to a finite time frame, within a clearly defined conceptual framework. Accordingly, the project focuses on five major areas: budgetary and information management, public procurement, civil service management, the legal and judicial framework, and improved communications. A. Budgetary Managenent 20. In the context of today's adjustment programs, the economic functions of the Burkinabe State have been defined by the Government as being to stabilize the economy (including the generation of employment and the control of inflation), promote sustainable economic growth, and to achieve greater equity in income distribution. In performing these functions, the Government intends to intervene largely through regulation and legislation, and through public expenditure, the mix of which has macroeconomic and distributional effects. A functional legal environment is indispensable for the former, while budgets are the principal management tools for the latter. 21. Generally, budgets have three basic functions mirroring the functions of the State described above: (i) operational control (i.e. ensuring execution of the budget), (ii) management control (implementation of programs in accordance with objectives) and (iii) strategic planning (policy formulation). Burkina possesses some elements of the first function, with budgets in an accounting form providing some control at the execution phase. It very much lacks the second function, the purpose of which is to evaluate expenditures in terms of results against stated objectives, and on that basis to mobilize and allocate resources in the most efficient manner, -7- including manpower and organizational resources. In spite of expensive efforts undertaken with external assistance, it also lacks the third function, the purpose of which is to define and clarify objectives and determine policies. The paragraphs below define and detail the current state of these functions in Burkina Faso. 1. Operational Control 22. Operational control of the budget process verifies that budget execution is in accordance with procedures and rules of disbursement ("contrOle de conformite"). Generally, this is achieved through financial control, public accounting and procurement. 23. Financial control verifies the integrity of expenditures from commitment to disbursement. Unfortunately, until now Burkina's separate treatment of investment and recurrent budgets has not permitted effective control of externally financed expenditures (investments, grants and TA). Moreover, a significant part of externally financed activities or projects (especially TA) are not even recorded by the Government, while some external donors modify the destination of funds without prior consultation with budgetary authorities. Thus, bilateral and multilateral agencies often make it difficult to respect the integrity of the budget process for external funds. 24. The structure of Burkina's external credit administration is further complicated by its having to comply with numerous donor disbursement procedures. A Department of Financial Execution (DEF) was established at Independence as a financial office to manage the financial execution of projects. With the merging of the Ministries of Finance and Plan, the DEF's role is to accelerate disbursements. Consisting of some 20 staff, it also participates in the management, supervision anid control of public procurement, overlapping with the Financial Controller's Office in the Ministry of Finance (DCF). It is also to follow-up on external debt, duplicating the work of the Debt Service Department of the Ministry of Finance. Despite the presence of other agencies with similar responsibilities, DEF has often been unable to even certify the execution of particular disbursements creating further uncertainty regarding the level of debt, debt service and arrears. In certain priority ministries, (eg. Agriculture, Basic Education), in addition to the existing Departments of Administre!ive and Financial Affairs (DAAF), new Departments were created to follow the financial execution of externally financed projects, further weakening the role of the DAAF and the DEF. 25. Financial control is ostensibly carried out through two agencies of the Finance Ministry. The DCF comprises five services: (i) commitments, (ii) studies, (iii) procurement and bids, (iv) financial controllers delegated to other ministries, and (v) administration. The Department has 54 staff, of which only 4 are higher level. There are not enough qualified controllers to staff all positions and therefore many double as local and provincial controllers with vast territorial responsibilities and no means of transport or data processing. Controllers assigned to technical ministries were abolished in the late 1980s for lack of staff. For the same reason, payroll control has been reduced to the minimum. The first micro computer was only introduced in the DCF in 1991. Because the DCF does not control the DEF, control of major external financial commitments of the State, including debts charges, has beeni effectively left to external financing agencies. Similarly, the DCF exercises no de facto control over the national procurement agencies, thereby excluding a significant portion of State expenditures from normal financial controls. - 8 - 26. The Inspector General (IGF) is the other controlling service attached to the Ministry of Finance. It is empowered to control even the DCF, though this does not happen as the Inspector General and the DCF Director have the same rank. With only 10 operational inspectors, the IGF has not been able to do much more than review the finances of selected private enterprises doing business with the State. 27. Public Accounting is the responsibility ofa central department in the Ministry of Finance, the Department of Public Accounting (DCP) charged with executing public payments. Payments are made through the Treasury Office (TPG) which supervises II principal treasury offices, and 70 revenue services throughout the country, as well as two accounting services (postes comptables) in the Paris and Abidjan embassies; altogether 84 accounting services, including the central office. Although theoretically a verification unit, the DCP exists to control all accounting services. It does not operate effectively, however, due to a lack of competent staff. 28. To improve the transparency of public accounts, a new accounting system (Plan Comptable) was developed with French technical assistance and introduced in January 1992. Training in Burkina of public accountants was initiated in June 1991. Although introduction of the national accounting system was supposed to be buttressed by the introduction of a computerized monitoring system (TABOR), its performance thus far has been disanpointing, and the Government is considering a better accounting system which requires less computerization. Compatibility problems with the new budget nomenclature, however, remain to be resolved. 29. Revenue management even more than expenditures, has been the focus of most economic management projects supported in Africa by the Bank, the Fund, France and other key donors, and Burkina has been no exception until now. The Internal Revenue Department (DGI) and the Customs (DGD) have benefitted from a steady assistance which on the whole has been helpful. Most of this TA, however, emphasized the upgrading of existing functions, often with the introduction of new management tools (eg. the SYDONIA customs management system). Project objectives were largely technical, however, and narrowly defined with short-term outputs in mind. 30. In Internal Revenue, in addition to helping with the strengthening and eventual reorganization of the Finance Ministry, activities being supported by the French Government include the rewriting of the tax code, which is virtually complete, and the revision of certain taxes. The French Government will also assist in the introduction of a value added tax (TVA) in 1993, in collaboration with the IMF. An attempt to rebuild the land registry (cadastre) has been less successfui to date. An on-going i-ench Government and IDA supported urban project will finance the con- '""tion of 5 decentralized revenue offices which would be the contact points with the public in monilizing additional tax revenues. 31. Several problems, however, remain to be tackled in the revenue area. l'he most important is the reorganization of the revenue services by function, rather than by origin of taxes. To do this would require bringing the personnel of the services physically together. This is prezently not possible due to lack of space. Second, the DGI is vastly understaffed, (60 people, of which 41 higher level), and staffing should increase to about 100, of which 80 higher level, within the next 4 years (as envisaged under the SAL and the IMF program). There is therefore an urgent need for expanded office facilities for the central services. Another serious problem is the lack of a fiscal litigation framework and jurisprudence, which may prove a serious impedirr.ont to the liberalization of the economy (see paras. 60-64 below). Moreover, the -9 - accounting profession, recently organized and reinstated following persecution of the "liberal professions" during the revolutionary period, needs training in fiscal litigation. While the French Government continues to assist Burkina in preparing a comprehensive computerization of the Ministry of Finance (within the framework of a regional project (PIAF) intended to strengthen financial management throughout the franc zone), the DGI would need some modest assistance in setting up computerized tax and fiscal programs. 32. As for the Customs, they too are being assisted by the French Government in installing the SYDONIA system, which is becoming a standard throughout francophone Africa. The operation is self-contained and on track. Because it is so highly standardized, however, a number of essential activities, such as computer site preparation and upgrading of some custom services, were not included in the SYDONIA project. 2. Manugement Control 33. The main management tool for effective resource allocation and evaluation should be the budget. Except for its use in tracking the deficit, however, the budget in Burkina has not been used as an effective tool for resource management. Successive reviews by various donors (including the Macro-Economic roundtable in May 1991) have consistently stressed the problems arising from poor budgetary management (the growing deficits, large wage bill, military expenditures, and arrears. etc.), but not often the problems of the budget process and structure themselves. With the exception of an isolated attempt to reformulate the budget with IMF assistance, the Budget Department (and the rest of the Ministry of Finance) has not benefitted from the same high levels of assistance received by the ex-Ministry of Plan. 34. In Burkina, the preparation of the budget is done roughly as follows. Technical Ministries submit their requests in response to budget instructions issued by the Ministry of Finance. Following arbitration at various levels, the budget is normally assembled by the Budget Department and adopted at the end of November. Until 1990, budgetary preparation was essentially an incremental exercise, building on past budgets. Budgets did not cover externally funded public investments. They were characterized by a high degree of inconsistency in the presentation amongst budget titles, and were therefore difficult to analyze. Most of the recurrent budget funds were consolidated in common interministerial expenditure lines, reflecting a heavily centralized management. 35. To help improve the process, in 1991, a new budgetary nomenclature and consolidation of the investment and recurrent budgets were introduced with IMF support. This new nomenclature will ultimately permit analysis and presentation of the budget by nature, function and Government agencies/services/departments of the State. This will take some time, however, since existing data is not yet sufficiently disaggregated to permit such a degree of refinement. This is especially evident for investments for which disaggregation by nature of expenditure is unavailable. Under current practices, collection of the relevant data requires a return to the individual investment project, since projects (87 percent externally funded) tend to follow the budgetary rules and accounting procedures of the financing institutions. The effective integration of investments into the consolidated budget will also take some time, requiring the introduction of a project accounting framework compatible with the budget, as well as extensive training. 36. Effective budgetary management is fully meaningful when done against measurable objectives. This is rarely the case in Burkina, however, as the present budget process does not - 10 - readily permit the Government to evaluate either the efficiency or the effectiveness of expenditures. In 1991 with help from IDA, efforts were initiated to express the budgets of two priority ministries (Primary Education and Health) in the form of simple programs attached to clear operational objectives. Although both of those ministries are now preparing projects with IDA, and therefore should be more likely to possess adequate data, the exercise will take time and require further training of staff in each of their DAAFs. 37. The public auditing function in Burkina - the other tool for effective budgetary management and accountability - is in effect moribund. The Government's General Auditing Department was unable to function effectively during the revolutionary period. In 1988, an Auditor General's office (IGE) was created with vast powers on paper, but very few means to apply them (14 inspectors with no support staff). Moreover, because no law closing the books of the fiscal year (Loi de reglement) has been promulgated for the past ten years (under the Fund program a "Loi de reglement" is to be promulgated for the current fiscal. year), it has been impossible for any auditor to have a clear picture of the year-end treasury and budget accounts, particularly concerning arrears and carry- overs from one year to the next. Thus, the ihree principles on which a budget is founded, namely its unicity, its universality and its regularity are not generally respected, rendering difficult its evaluation and effective use as a management tool. 3. Strategic Planning 38. Investment planning and programmin. Throughout the late 1980s, investment was relatively high in Burkina, peaking at 26.9 percent of GDP in 1987, largely because of increased public investment. Much of this investment, however, went to large new infrastructure projects with marginal economic returns. External aid finances almost 90 percent of public investment. Some of the misconceived public investment projects were financed by forced lending from domestic banks and financial institutions (eg. from the social security fun'ds), contributing to the increasingly precarious situation of the financial institutions themselves. The overall efficiency of investment has been relatively low. 39. The choice and monitoring of public investments, as well as the coordination of aid have been weak. Technical ministries include a DEP supposed to prepare, program and follow the physical execution of investments. The DEPs are the corresponding agencies for the Finance and Planning Ministry's Department of Studies, Programming and Monitoring of Investment (DEPSI). In general, however, all these services are weak, with the agencies understaffed and under- equipped to carry out their job. To remedy this situation, the Government, with past technical assistance from the UNDP and the Bank, had established procedures for formulating a three-year rolling investment program (PIP) and for monitoring investments identified from the 2nd five- year Plan (1991-1995). For the following reasons, however, these efforts have been only marginally successful to date: (i) the existence of two agencies, attached to Government institutions (the SISP in the Presidency, and the BIP in the Planning Ministry), but effectively outside the administration, with one created with support from the Bank (support for the SISP was provided beginning in 1985 under the Fertilizer Credit) and the other from UNDP, with overlapping responsibilities for investment planning and monitoring; (ii) with both staffed by seconded civil se.-vants remunerated at a much higher level than other civil servants, with their budgets and management effectively independent of civil service rules and budgetary procedures; (iii) with neither connected to the budget cycle and control, since externally financed investment expenditures were not included in the budget; (iv) with the availability of consistent, reliable and complete project implementation data, financial and physical, often wanting; and (v) with procedures lacking for systematically assessing the operating and maintenance needs of investment projects. 40. The major consequences have been: (i) a high degree of uncertainty regarding the level of investments, as externally financed projects contain a high level (estimated at 30 percent) of recurrent expenditures; (ii) uncertainties regarding the real status of projects; (iii) a lack of administrative cooperation with the BIP and the SISP resulting from resentment at the differential treatment enjoyed by their staff; (iv) the priority given by the BIP and the SISP to their donors' requests, often at the expense of the Government's needs; and finally (v) underfunding of operating costs for completed projects (particularly acute for primary health centers and primary education). 41. The Government has now recognized that linkage between the public investment program and the budget is vitally important when determining the level of public investment and selecting investment projects. In June 1991, the Ministries of Finance, and of Planning were merged to respond to the request of the IMF and the Bank for a unified budget. Investments and recurrent expenditures were formally subjected to the same budgetary rules (ordonnateur unique). Because of the political transition, however, effective integration of both ministries has been slow, and preparation of the 1992 investment budget by the Budget Department has also suffered. 42. Under the SAL the Government is preparing proposals on: (i) a system of macro- economic projections to provide a macro-economic framework for budgetary and investment planning; (ii) an assessment of the underfunding of recurrent costs in the principal sectors (excluding road maintenance and primary education, for which estimates have already been made); (iii) procedures for assessing the recurrent costs of projects in the PIP; (iv) procedures for estimating the recurrent costs of future investment projects; and (v) improvement of the data base on public investment, notably through better coordination, and a merger of the BIP and the SISP. 43. The completion of these actions, however, presupposes the existence of usable information, as well as a common budgetary framework and common budgetary procedures. To this end, the IMF is providing technical assistance to consolidate the investment program within the Government's budget, through a revision of the budgetary nomenclature. During a June- August 1991 IDA mission, it was established that information management and data availability including, but not limited to statistics, were major problems, and a simple revision of the budgetary nomenclature would not be sufficient to ensure the preparation and execution of an operationally consolidated budget. The information management and data problems (see paras. 47 and 48), as distinct from computerization, remain to be dealt with therefore, while the budgetary system, particularly as it pertains to the expenditure cycle, would need to be reviewed in its entirety. For the latter, a committee composed of all Directors of Finance and Plan and the Director of the BIP, has been created to prepare a position paper on the budgetary system, including a global audit of the expenditure cycle. 44. Economic and Financial policy rormulation. In preparing the PFP, and the various IDA-financed adjustment operations, the Burkinabe authorities took much of the initiative and responsibility, though with considerable donor assistance in the area of macroeconomic management. Out of a total of US$ 28 million in external flows for institutionally oriented TA projects, about 35 percent are iirected to economic planning and investment programming (UNDP support accounts for about 15 percent). To help assure effective implementation of this - 12 - broad based reform program, it was recommended at the Macroeconomic Roundtable in May 1991, that a "technical" secretariat be established to follow up on the SAL and oversee the reforms. Though initially delayed and still somewhat subject to the effects of the incomplete merger of the Ministries of Finance and of Plan, the secretariat has been operating effectively to date. 45. As for the newly merged Ministry of Finance and Planning, though its reorganization is still incomplete, there will be no future 5-year plans and the economic planning function will be largely indicative in nature, involving a large dose of economic forecasting. On the financial planning side the problem is similar, with numerous departments and agencies having overlapping responsibilities, and being preoccupied with daily operational concerns rather than financial planning and economic forecasting. 46. Although a considerable amount of TA has been provided to Burkina in the past for macro-financial planning, due to uncoordinated support for the creation of several agencies with ill-defined roles, such assistance too has been largely ineffective adding to the neglect of macro- economic and financial forecasting. 47. Statistical Information. Statistical deficiencies in Burkina have been recognized as a serious constraint to effective economic and budgetary management. The National Institute of Statistics and Demography (INSD), created in 1974, has the responsibility for producing official statistics, but its work has been seriously wanting due to (i) the absence of a coordinated work program and a mismatch between the demand for statistical data and INSD's capacity to supply it; (ii) a lack of analytical and publishing capacity leaving a wealth of unanalyzed data from numerous uncoordinated surveys; (iii) a lack of financial resources and skilled professional staff; and (iv) an ambivalence as to the extent to which INSD should indeed have exclusive responsibility for statistical data in Burkina. 48. Despite INSD's de jure monopoly for producing statistics, other public and private institutions also produce statistical data. Accordingly, the Government has recognized the need to design and implement an integrated national information system, including a decentralized stat 1tical capacity whereby data are produced and used at the regional level, and where the capacity exists to do relevant policy analysis based on a standardized national accounting system and compatible nomenclature. As noted in the SAL program, the absence of this analytical capacity has been especially critical in limiting the Government's ability to pinpoint needs arising from poverty and effective social and economic policies to deal with them. B. Public Procurement 49. In spite of several reform initiatives by the Government during the 1980s, the public procurement system in Burkina Faso has functioned poorly and has been identified - by donors as well as by Government - as a process which needs improvement so as to minimize public resource waste. The basic procurement regulations date back to 1970. They were modelled on the French national regulations existing in the late 1950s. Although some piecemeal reforms were introduced in the 1980s, they have not benefitted from the modernization of public procurement methods in France since that time. An assessment by the Bank in 1986 of the acceptability of the regulations for use in Bank-funded projects noted some objectionable features, such as private bid opening and numerous bid bond exemptions, while concluding that the regulations on the whole conformed to minimum Bank requirements. 4 - 13 - 50. What has come to be observed by the Bank and by the Government as a more serious problem has been the overlapping of regulations and the ensuing duplication of functions between the various entities involved in the public procurement process. As an example, a new national procurement directorate, the rINAME, was established under the Ministry of the Budget in 1986, without sufficient resources nor a clear delineation of its powers vis-a-vis those of the technical and planning ministries to act efficiently. The result was an increase rather than a decrease in overlapping functions. In practice, the DINAME did not obtain the powers formally assigned to it. A decision was taken by the Government in January 1991 to create a successor agency, the Office National de Marches Publics (ONMP). This was done and DINAME has been replaced by ONMP, which remains ineffective, however, since the detailed arrangements with regard to the resources and mandate of the agency remain unclear. Until the Ministries of Finance and Planning were merged in 1991, a further complication arose from the fact that the Minister of Finance was given authority to approve contracts funded by the national budget, while the Planning Minister was to approve externally funded contracts (See para. 41). 51. The understanding and application of public procurement regulations has obviously suffered from these regulatory overlaps and contradictions. In the first place, few officials have complete knowledge of the various laws and regulations affecting public procurement; much less placed in a position to apply them effectively. In this environment, ad hoc decisions, based on political opportunism rather than objective criteria, have tended to flourish. Also, since DINAME, and subsequently ONMP, have not been afforded the means to work effectively, there is inadequate statistical knowledge of the volume and nature of public procurement. In addition, there is a perception - again hard to verify because of the lack of data and of proper audit - that contract supervision is lax. As pointed out in para. 25, public procurement also has not been subject to the normal financial controls which the DCF is supposed to exercise over other budgetary expenditures. 52. Adding to the problems caused by overlapping and confusing regulations are the delays caused by the numerous and overstaffed commissions involved in the procurement process. In 1984, for instance, the number of members of the central tender board was increased from eight to twelve, and that of the sectoral commissions from three to six. The size of the coimimissions reduces their ability to meet at short notice, and to take decisions promptly. In addition, most members remain passive, or absent, in their respective capacities. As a result, frequently the review by the commissions not only lacks in depth and quality but also renders the procedure cumbersome and lengthy. As a result, disbursement of foreign assistance, including IDA, has been slower than necessary, entailing heavy costs to the Government through price escalation of delayed contracting and a lack of counterpart funds. With a budgetary system under whic.l spending authority lapses unless allocations are used within the fiscal year, there is a real threat of having to start the procedure from scratch in a subsequient year due to delays in the process. 53. Finally, there is no academic or vocational training path leading to positions in procurement; nor is there a stated policy in Burkina Faso to establish and promote the professionalism of a procurement cadre. Thus, for instance, while financial controllers receive extensive training from ENAREF, there is a lack of training facilities in public procurement both for those in the technical branches who are initiating and implementing procurement action and for those in the controlling functions, who are supposed to watch over the proper application of the rules. - 14 - 4 C. Civil Service Manafiement 54. Despite its relatively modest size (about 34,000 employees on the payroll compared to 118,000 in COte d'lvoire for roughly the same population), and its relatively modest cost (CFA 55 billion compared to 270 billion in Cote d'lvoire), the Burkinabe public wage bill represents a very high share of current expenditures, growing from 54 percent in 1986 to 64 percent in 1990. The Government has realized that such increases in the wage bill are not sustainable, and that the structure of the wage bill threatens economic growth in the longer term, especially since a large portion of wages goes to military personnel at the expense of basic education and health. 55. A key objective of the SAL, therefore, is in the short-term to contain the wage bill as of 1993, at no more than 55 percent of current expenditures, without detrimentally affecting the efficiency of the central administration. Under its program for 1991, the Government has attempted to tackle the size of these expenditures in part through a three-year freeze on salary increases resulting from promotions, through limited voluntary departures in 1991 and through reductions in the military wage bill. It has chosen not to use the direct reduction of wages (adjusting indices), because of the limited benefits and the demotivating and destabilizing effects of such measures in neighboring countries. The Government has been particularly sensitive to these considerations during the current period of political and electoral reform. 56. Yet lacking even a central civil service file, the Government does not have the necessary information to deepen its analysis of the wage bill nor the management structure and tools to effectively control the size or growth rate of the bill in the long-term. No salary review mechanism exists and the existing civil service statutes are t},emselves limited in scope. Moreover, the policy of the then-Ministry of Employment and Civil Service had itself been to generate employment and protect formal sector workers under the provisions of the Labor Code, rather than managing the civil service as a whole. 57. With Government recognizing the undesirable effects of this approach on the public sector wage bill, in June 1991, the Ministry was renamed the Ministry of Civil Service and Administrative Reform, and its mission, as its *.sw name indicates, was shifted to improving civil service management and quality. The Government requested and obtained limited assistance from the UNDP for the new Ministry. At the same time, the Budget Department in the Finance Ministry attempted on its own, to set up a forward budgeting system specifically for wage expenditures. This effort has so far met with limited success due to a lack of means and lack of coordination with the new Civil Service Ministry. 58. Finally, all of these attempts to improve civil service management have suffered from the inadequacies in training of key civil service personnel. Ostensibly, local training for the civil service is done through three schools: the National Customs School (END), the National Public Administration School (ENAM), and the National School for Public Finance Management (ENAREF), created in 1988 to replace the Ministry of Finance training center. In 1990, the END produced only four graduates at the highest level, and ENA suspended its activities, as the civil service ceased recruiting for general administration as part of the Government's adjustment program. ENAREF is active, however, with 370 students presently enrolled for training and retraining. Although the school is presently limited to training Ministry of Finance staff, it is only partially responding to the real staffing needs of the Ministry, which is not represented on the school's Board. The result is that enrollment in the school is seen largely by civil service staff as a vehicle for promotion. - 15 - 59. This situation in respect of training creates two types of problems for the civil service: a) an ambiguity in the role, status, and scope of ENAREF, and b) serious deficiencies in the school's operations and management. In the case of the former, ambiguity as to whether ENAREF is a professional school geared to retraining, or a "graduate school" providing university equivalency has resulted in civil service criteria for promotion which impose unnecessarily long course curricula and degree requirements. The automaticity in promotions arising from training has resulted in a high cost to the wage bill, and often produced absences of two years for training, rather than a few months, thereby limiting the number of civil servants who can be trained during the period. In the case of ENAREF's internal operations, a technical audit in July 1991 revealed that there are insufficient operating resources which, combined with the ambiguous status of teachers (most of whom are full-time civil servants) has resulted in an unmotivated and often incompetent staff with poorly conceived programs. The school is currently housed in five different sites, pending completion of a new building partially financed by UNDP and the Canadian Government. D. TDe al and Judicial Context 60. From the time Burkina's adjustment program was conceived, it has been apparent that unless appropriate legal reforms are implemented, the economic reform program cannot have more than a limited impact on investor confidence. This consideration underlies the initiative taken in October 1991 by the West African Monetary Union (UMOA), with French assistance, to harmonize commercial and business laws throughout its member countries, as a priority in transforming them from a monetary to an economic union. Burkina's program is amongst the first to be addressed in this regard. 61. At the height of the revolutionary fervor in the early 1980s, the Government decided that the system of justice as it existed had been designed to serve only the rich. It therefore created a 'popular" system of justice which did not altogether supplement the existing courts, but operated alongside and independently of them. It consisted of a network of "revolutionary" and popular tribunals competent to hear all cases involving persons and public property that they deemed fit to hear, as well as most criminal cases involving public officials. All tribunals were required to apply revolutionary principles of justice. There was no systematic right of appeal or review provided against decisions of these tribunals. 62. In parallel, although it stopped short of doing away completely with the so-called liberal legal professions, the Government did create a new legal cadre, ("songdas"), consisting of qualified magistrates on the civil service payroll, to compete for the business of private lawyers. The rest of the legal profession (namely notaries and legal ushers) was abolished and its functions taken over by the chief registrars ("greffiers en chef") of the popular tribunals, and by a new breed of civil servants known as "mandataires de justice". Considering that the "songdas" have no fixed costs and that all public enterprises (no matter the size of the state's capital share) are required by law to use their services, their existence has created fear and resentment by both the legal profession and industry. The current Government has therefore decided to pave the way for a return to the use of the "liberal" legal professions. All "revolutionary" tribunals have been either eliminated or frozen. The Government has also agreed to juridically abolish "songdas"; only the timing is still at issue. 63. One of the results of this revolutionary legacy is that only 28 lawyers are practicing in Burkina, hence driving up the cost of their services to business, and reinforcing the views of -16- those who might wish to retain the "revolutionary" professions. Similarly, since the elimination of the Department of Legislation in the Ministry of Justice, there has been virtually no centralizing of legislative drafting. Legislation is initiated and prepared in almost autonomous fashion by line Ministries. Coupled with the haphazard and unreliable publication of the Official Journal, it produces a chaotic and unclear picture of the legal/legislative context in which investment and business can take place. Even the Supreme Court is incapable of publishing its own decisions. The administration of justice is slow and inefficient with an inadequate number of magistrates, aggravated by the suspension of activities in the magistrates department in the Ecole Nationale de l'Administration et de la Magistrature (ENAM). Combined with the absence of any real source of accountability, magistrates dispose of widely abused discretionary powers to postpone cases for the flimsiest of reasons. Moreover, such inefficiencies have little bearing on decisions regarding promotions in the service. Finally, there is no specialization and no special jurisdiction for commercial law cases, although for labor disputes such separate jurisdiction is provided for by law. 64. The existing body of commercial laws are in a similarly chaotic state. Largely inherited from colonial days, they have undergone haphazard revision and amplification particularly in the last decade. Though the core is basically sound, there is a need to consolidate the laws, streamline proceedings and adapt them to the needs of modern day commercial transactions. In particular, there is a need to review the provisions governing the entry, mobility and exit of companies, as well as those relating to debt recovery both in a commercial and in a criminal law context. This includes the Mining Code, which governs an activity of growing economic importance to Burkina. The revisions arising from such a review would, however, need to be carried out within the framework of current efforts to achieve economic integration within UMOA. Similarly, although the new land tenure law (RAF) adopted in June 1991 provided individuals the right of land ownership, the latest version of the law does not sufficiently address issues of ownership and credit security, particularly in a business context. The result of these various deficiencies is that the legal system is slow, frustrating and never easily predictable. Tne local business community has done its best to stay clear of the system, and the consensus is that in its present state, the process of justice will have an adverse impact on the business environment. E. Communication of Economic Policy 65. Since the current Government took office and began moving Burkina towards a more open system, the private media has begun to flourish. In addition to the three government-owned publications, and a government radio and television station, a privately-owned radio station is now operating, and three privately-owned daily newspapers, 7 weeklys, 5 monthlys and 5 other publications are now being publicly sold. There are estimated to be 200-250 journalists active throughout Burkina, with the vast majority still in the publicly-owned media. 66. Because people in the Sahel are primarily exposed to the written media (especially in urban areas) and radio - amongst the few effective instruments for generating public debate and understanding - it is important that journalists (including editors) comprehend the objectives and impact of economic policy and reform. This is especially so in societies in which, until recently, free market economics.was officially viewed with hostility, as in Burkina. Difficult adjustmnent measures applied by Governments can be unravelled easily by opposition forces, sparked by journalists who lack basic training in market economics. Very few of the journalists in Burkina, or elsewhere in the Sahel, have had such training, and the Government is therefore giving a high - 17- priority in its focus on adjustment and capacity building to training journalists in some form of economic journalism. 111. THE PROECT ObJectives 67. As indicated in the preceding chapter, effective economic management not only requires good policy, but also strong institutions, an appropriate legal framework, and skilled individuals to implement and communicate the policies throughout the administration and the public at large. The objective of the program of actions to be financed by the proposed IDA credit is to support the Government's broader effort to transform key public institutions, the laws supporting them, and the personnel staffing them, thereby helping sustain the economic reforms which the Government initiated with SAL support. Parts of this larger program are already underway or are being considered for support through coordinated financing from a number of other bilateral and multilateral donors (see Annex A for a more complete description of the Government's program of public institutional development, and the coordinated support being provided by various donors). Summarv Prolect Description 68. The proposed credit will finance a four-year time slice consisting of selected components of the Government's institutional reform program. The program itself is based on a policy framework for technical assistance and cooperation (see para. 2). The project, to be financed by the IDA credit, is limited to actions which can be effectively completed within four years, and which will result in lasting improvements in key areas of civil service and administrative behavior. To this end, the project will help introduce greater effectiveness, accountability, and transparency to public sector functions critical to the long-term success of the structural adjustment program. Specifically, the credit will finance the following components: (a) Support to strengthen Information and Budgetary Management (US$8.6 million). The credit will finance short-term TA, training, computers and civil works to strengthen the information and budgetary management functions in the Administrative and Finance Departments (DAAF) and the Research and Planning Departments (DEP) of four priority ministries (Finance, Health, Education, and Civil Service) as well as the capacity to produce and analyze statistical information in the INSD; (b) Support to Improve Public Procurement (US$ 102.000). Through tinancing short- term TA and equipment, the credit will assist the Government in preparing new legislation and strengthening institutional procedures to improve the public procurement process; (c) Strengthening Civil Service Management and Services (USS3.4 million). Support will include financing a civil service census and studies, as well as introducing training and new service quality techniques to improve the management of the public sector wage bill and the civil service in general; - 18 - (d) Refbrms to the Legal and Judicial System (US$2.8 million). Support will include financing specialized assistance, training and civil works necessary to undertake the formulation, communication, and application of new commercial and business laws and practices; and (e) Training of Economic Journalists (US$90.000 . The credit will finance training of Burkinabe journalists so as to improve the communication of economic policy and reform measures to the public at large. 69. As noted in Burkina's NATCAP study and in the Government's TA framework paper, past institutional development efforts have been largely uncoordinated and unsustained. The proposed credit, in financing elements of a larger government program developed around a common set of objectives linked to the SAL, will also serve to coordinate donor support for technical cooperation and institutional development. Other elements of the Government's broader program of institutional support for economic management are currenmly being financed by France's Ministry of Cooperation, the UNDP, the AfDB, Germany, and Norway. Detailed Project Features A. Information and Data Management 70. The success of the Government's program to strengthen economic management through institutional development depends very much on the availability and quality of economic and financial data. At present such data is seriously deficient in Burkina. As a result, Burkina's major donors have committed themselves to providing support for data collection, management, analysis and economic forecasting. Indeed, total donor support for such activities is now estimated at about US$8 million equivalent during the 1992-95 period, of which about 10 percent will be financed from the proposed IDA credit. (i) Strenghening INSD: To strengthen the collection and management of economic and financial data, the Government intends to transform the National Institute of Statistics and Demography (INSD) into an independent institution providing statistical services under contract to government departments and institutions. The French Government and IDA will support INSD's transformation in accordance with a regional effort within the monetary union to harmonize and strengthen statistical services. Specifically, tihe IDA credit will support: (a) the establishment, prior to August 1. 1992, of a National Statistics Committee to design and monitor a long-term strategy and work program for data collection and analysis; (b) a comprehensive organizational audit of the INSD leading to improved operations including statistical management; (c) a series of economic and poverty-focussed SDA surveys and studies identified as part of the adjustment program; and (d) the design and implementation of a training program in statistics for staff of INSD and of the DEPs and DAAFs of key ministries. Selection of the auditors would be completed prior to August 1. 1992, while completion of the audit and implementation of its recommendatior.; would be done in accordance with the timetable in Volume II Annex 1. As part of the Government's effort to deal with the social dimensions of adjustment, the series of priority household surveys will be done by INSD. These surveys will be supported by the IDA credit with joint cofinancing from Norway, and - 19- coordinated financing from the French Government, the UNDP, the AfDB and Canada, which is financing an ongoing rural-based survey. In addition, the UNDP will finance a household budget survey intended to allow Government to establish meaningful consumption price indices and improve national accounts data. (ii) Information Management: The IDA credit will support the preparation of a unified financial information management system for the Ministry of Finance, including the review and updating of various nomenclature (some of which have remained unchanged for 30 years) notably for the budget, with IMF assistance. The credit will finance consultant services, including one long-term consultant (an Information Manager) whose role would be to set up the system, constitute a team from local staff, and recommend candidates for specialized training. Because the effective management of financial information is critical to the success of other project components and to SAL monitoring, agreement on the TORs for the recruitment of the Manager were completed during negotiations (see Volume II, Annex 2), and his recruitment would be effective no later than September 1. 1992. The Information Manager function will be the responsibility of the Secretary General of Finance, who with IDA financing would ensure the financing of computers, training and hardware management. Creation of a central civil service file (harmonizing the currently separate files of the Payroll Office in the MCSAR, and the Budget Ministry) through the purchase of computer hardware and training, is being financed under the PPF. The establishment of the information management system in the Ministry of Finance will be closely coordinated with support from the French Government and the UNDP; ('ii) Analysis: Although the UNDP has been providing support to the BIP for several years, monitoring of public investments remains a serious problem for SAL implementation. One of tne primary objectives of the institutional development project therefore is to deal with this problem through reforms to the budgetary expenditure process (see para. 71 below), and through a closer coordination of UNDP and IDA support for the production of better public investment data. At the same time, the UNDP and the French Government will assist in the preparation of more accurate national accounts, indispensable for economic forecasting and management. The establishment of the new information management system to be financed by the Credit will improve Government's ability to analyze information, thus contributing to monitoring of public investments and to the preparation of national accounts by INSD; and (iv) Economic Forecasting: In the context of the adjustment program, both the IMF and the Bank are interested in improvements to Burkina's economic forecasting capacity. This constitutes an integral part of the Government's program to strengthen the use of financial and economic information. Although the IDA credit will not finance such support directly, the German and French Governments, as well as UNDP, will provide the necessary financing to develop this capacity in the Ministry of Finance. The UNDP will also include support for the preparation of industrial and commercial strategies, as well as for a national long-term perspective study. - 20- B. Budget Management 71. Sound budgetary management will be critical to the success of the adjustment program and to the redefinition of the role of Government in the economy. The project will support this redefinition by financing actions to strengthen the critical budgetary functions described earlier in paras. 20-46. Although the French Government will continue to provide the bulk of support for government revenue collection services, the IDA credit will complement those efforts by financing the construction of a central tax services building and installation of a computerized management system in the customs service (SYDONIA system). The IDA credit will also finance a global audit of the budgetary expenditure cycle, a need identified after close collaboration with the IMF. Already underway with PPF financing, this audit exercise (to receive coordinated financing from the French Government) will review recurrent and investment expenditures made by the Ministry of Finance and other Government ministries and agencies. On the basis of its results, Government will be able to reorganize budgetary expenditure processes, thereby more effectively managing public resource use and economic reforms more generally. The results of the audit, to be completed no later than the end of the first year of the program, are expected to result in a strengthening of the following functions: (a) reinforcing the Financial Control Department (DCF) of the Ministry of Finance, thereby extending its reach of effective control to the whole budget while streamlining complex control procedures and allowing more effective delegation to the technical ministries (the procurement reform component described in paras.73- 76 below is an integral part of this effort); (b) strengthening the Inspector General of Finance (IGF) and the Auditor General's office. Pending completion of the audit, the credit will finance the purchase of equipment and costs of training for the IGF; (c) strengthening public accounting through support for harmonizing the budgetary nomenclature with the new public accounting framework. This new system will be tested on a pilot basis in Ouagadougou, Bobo Dioulasso and Koudougou. The credit will also provide for the development of a computerized accounting system over the next three years, including staff training. On this basis, the Government will provide its assurances that by December 31, 1992 the general balance of accounts and aggregate balances from the principal accounting service and the Treasury will be completed; (d) strengthening of the customs services through computerization and training will be closely coordinated with French assistance. In addition to the audit, program budgeting and annual public expenditure reviews will be introduced in the priority ministries (Health, Education and Equipment), and extended to other Ministries in years 2-4 of the project; 72. Finally, while the global audit mentioned above will help the restructuring of a number of institutions intimately involved in the budget expenditure process, the French Government will also be assisting with the reorganization of the Ministry of Finance and Plan, as well as with direct support for the Auditor General and the Comptroller General's Office. C. Public Poremient Reform 73. In keeping with the objectives of: (i) administrative deconcentration expressed in the Government's institutional development strategy paper, and (ii) reinforcing budgetary expenditure controls expressed in the SAL, as an alternative to its earlier proposal to creating an autonomous national public procurement office (see para. 50), the Government will adopt an approach which deconcentrates procurement authority, eliminates duplication and ensures greater financial accountability in the process. This new approach would strengthen the administrative capacity of technical ministries to carry out their own procurement, subject to reinforced budgetary expenditure controls exercised by the Ministry of Finance. - 21 - 74. To this end, the credit will support the following actions to reform public procurement: (a) Revision and consolidation of the regulations. The Government will appoint a high level committee, as a condition of credit effectiveness, charged with the task of preparing a revised and consolidated set of public procurement regulations. The committee will be chaired by the Minister in charge of the budget and include the Directcr of the Financial Control Department of the Ministry of Finance and representatives of the most important sectoral ministries affected by the public procurement regulations, as well as the Ministry of Justice, the Auditor General and a representative of the private sector. The committee will be assisted by a secretariat and will draw on the advice of short-term international expertise financed under the credit. The objectives of the reform work will be to: revise procurement regulations and consolidate them into one set of regulations, including ancillary texts in the form of standard general conditions of contract for goods, services and civil works; clarify existing regulations in order to increase the speed and transparency of public procurement procedures; enable delegation of authority to line ministries and contracting agencies with commensu-ate accountability to the Department of Financial Control; eliminate duplication of responsibilities between organs of the state involved in public procurement, distinguishing between organs of control and contracting agencies and treating procurement expenditure as normal budgetary expenditures; meet criteria of non-discrimination, efficiency, transparency.; apply regulations uniformly, regardless of the source of funding, unless agreement to the contrary with any foreign donor is reached and duly ratified. (b) Action to promote better application of the procument-r=llons. The Ministry of Finance, (through the Department of Financial Control, DCF) will promote the better understanding and application of the regulations by those concerned. For this purpose, the Ministry will, in consultation with other concerned ministries and drawing on advice from relevant expertise financed by the credit and by UNDP: - add model documents to be used in conjunction with the standard general conditions mentioned above, demonstrating good practice in dealing with different kinds of contracts (models for invitations to bid, instructions to bidders, particular conditions of contract, bid forms, etc.) and producing and distributing among users diskettes containing models of the kind referred to above; - 22 - prepare a commentary on the new regulations in the form of a manual, giving practical hints and examples of dealing with expected problems; give a wide dissemination to the new regulations and accompanying models and explanatory documents; guide the responsible government agencies in applying the new regulations in a proper way, through current advice and by taking initiative to train procurement staff; collect and organize statistical data on relevant aspects of public procurement; and devise ways and means to increase respect for the procurement regulations, including means to contravene illegal and negligent practices. (c) Sff Development and Training. In accordance with terms of reference agreed to during credit negotiations (see Volume II, Annex 2), the Ministry of Finance, will systematically review the staff resources having been or currently engaged in public procurement work in Burkina Faso. This inventory of staff will distinguish between contracting agency staff and staff engaged in controlling functions. Core common skill requirements will be identified, along with additional knowledge required in specialized areas, such as technical specifications, contract monitoring and assessment of supplier/contractor qualifications. Based on such an inventory, a staff development plan will be drawn up uy 31. 1993, and action for implementation taken in accordance with the implementation schedule in Volume II Annex 1. (d) Based on the staff inventory, the Government will devise in-service training programs, to be financed by the UNDP, for staff engaged in public procurement. These programs will consider training opportunities at the national, sub-regional and international levels, as necessary. In a first phase, a specialized training program will be organized for a limited number of civil servants, lawyers and professors of public administration. This program will include study visits to institutions specializing in procurement. As far as national training facilities are concerned, the Government will identify resource staff to be employed by ENAREF for the purpose of sponsoring a basic training program, which can subsequently be enlarged to cater for particular needs in various sectors and subjects (see para. 78). 75. The credit will finance about 1.8 manmonths of short-term consultants, as and when required, to set up a consultative arrangement between the Government and a group of procurement experts, partly local, partly foreign, which would intervene intermittently In the work of the government committee charged with reform of the regulations, and support the secretariat of that committee through drafting advice and access to international experience and data bases. The kind of expertise required would cover such subjects as public procurement policies and methods, legal drafting techniques, and commercial and technical aspects of procurement. This assistance would include help in drafting manuals and model documents of - 23 - various kinds which would be used as tools to promote the smooth introduction of the procurement reform. The expert group would also help plan training activities and organize introductory workshops. In order to enable the Government to set up a well-functioning public procurement system, the credit would also finance computers, office equipment, document production, and reproduction equipment for the institutions concerned. 76. During credit neiotiations, agreement was reached with the Government on a timetable and an action plan for dissolution of ONMP and associated technical and sector commissions, and a transfer of their staff to DCF and to the key technical ministries. It was also agreed that the Government would designate the Minister of Finance to act as coordinator on its behalf with respect to any matter concerning the implementation of the procurement reform component of the project. The high level committee (para. 74 (a)) would hire, in the first instance, the experts needed to prepare and introduce the reform. This reform will institutionalize transparent procedures including public bid opening, and disclosure of all bid evaluation criteria to bidders. Assurances were also provided during negotiations that this reform will expedite procedures, by applying the principal that review and clearance of all public procurement decisions will be completed within a fixed period of time. Subsequently, with UNDP financing, an umbrella agreement would be made with a qualified organization to provide the training and technical assistance services required over a longer period of about three years. D. Strengthening Civil Service Management 77. In order to meet short-term financial targets under its adjustment program, in 1990-91 the Government adopted a combination of measures to better manage the growth of the public sector wage bill. These included inter ali freezing financial increments for promotions over a three-year period, and a limited number of voluntary departures. At the same time, for the long- term, Government is preparing a program to improve the efficiency of civil servants. This will be done through introducing better incentives and trair.ing to increase staff motivation, as well as adopting management tools for controlling the rate of promotions, the levels of remuneration and the number of civil servants. These measures will enable the Government to better manage the evolution of the public sector wage bill without continually having to resort to unpopular compression measures. The credit will finance short-term TA and equipment for: (i) a civil service census, as well as preparatory studies based on the central civil service file prepared with UNDP assistance and with PPF financing; (ii) revising civil service wages and remuneration based on PPF financed studies of civil service remuneration and grading; and (iii) a system of wage planning and forecasting linking personnel management to budgetary objectives. The credit would finance a series 'of training seminars during the first two years of the project to better associate unions and other key social groups with the Government's new wage and civil service reform policies. Agreement was reached during negotiations on a training strategy for civil service agents (See Volume II, Annex 4 for copy of strategy). A major principle of this strategy is to stop the practice of training leading to automatic promotions, and instead to introduce promotions based on merit. The credit would also support the examination of alternative approaches to a career civil service, intended in part to minimize the loss and demotivation of senior civil servants. Implementation of the actions described above would be completed in accordance with the schedule presented in Volume 11 Annex 1. 78. With respect to ensuring training for the civil service, in close coordination with UNDP, the credit will assist in strengthening the capacity of Burkina's schools for public administration to provide appropriate training for a transformed civil service. To this effect, a study will be - 24 - done to review ENAREF's scope, role, and status, including the possible merger with the National School for Public Administration (ENAM) and the Customs School, extending coverage by the new institution to the entire administration. The regional scope of the school would also be explored in the context of an ongoing initiative sponsored by the French Government to identify regional institutions for economic and public resource management. Selection of the consultants for the ENAREF study would be completed by October 31. 1992 and implementation of its recommendations, to be reviewed with IDA, are to be completed by the end of Year 2 of the project. Ultimately, the program would seek to ensure that, with only well-defined exceptions, virtually all civil service training and retraining would rely mostly on local permanent and non-permanent teaching staff. The credit would finance senior teachers for short-term courses (1-3 months) recruited from higher-level civil services abroad. Training in computer use would also be financed by the project through the purchase of equipment and software, as well as the design of specialized training modules for different government services covering about 1000 civil servants. 79. Finally, the credit would also finance a series of pilot actions intended to directly increase productivity and improve service quality in the public administration. These actions would build on the positive results shown to date from applying, with Japanese Grant and SPPF funds, quality control circles (QCC)4/ in selected Burkinabb industrial enterprises over the past three years. These actions would use group dynamics, a technique more akin to Burkinabe cultural traditions, to help develop the concept of service to the public tax payer in Burkina, and increase motivation through developing a greater sense of teamwork. To this end, under the supervision of expatriate experts, local QC experts from the QC Promotion Unit in the Ministry of Industry and from the National QC Association would, in accordance with the timetable detailed in Volume II Annex 1, help install the QC system in four public institutions considered under the SAL as providing priority services to the public: (i) the Yalgado National Hospital in Ouagadougou; (ii) the Public Service Pension Fund (CARFO); (iii) the National Social Security Fund (CNSS); and (iv) the Income Tax Department (DGI). The credit would finance training, short-term TA, and logistical support for the proposed activities. Under this component, support would also be provided to the Burkinabe Consumer Association to develop a broader constituency of users of public services. The project would provide TA and logistical support to the Association to assist it in developing indicators of public service quality, and monitoring service delivery from the targeted public institutions. E. !gal and Judicial Reforms 80. Although the Government's institutional development prograni' focusses broadly on the legal and judicial context, the proposed IDA credit will support those reforms which most directly affect business and commercial activity. The Ministry of Justice will have primary responsibility for implementation of this component. A Steering Committee (which started meeting on an informal basis in November 1991) consisting of broad government and legal representation, including the private sector, will be established to advise the Minister of Justice on matters relating to this component. Prior to credit negotiations, the Government adopted a decree i/ QCC is a system aimed at increasing the productivity of the working unit using small group dynamics. By giving all workers a sense of participating in the restructuring of production techniques and processes, the system has not only raised productivity and efficiency where applied, but also reduced labor/management tension. - 25 - ratifying its existence and setting out its role and composition. As a condition of credit effectiveness, to strengthen legislative drafting, the Ministry will establish a Legislative Drafting Division (LDD), which is to advise all Ministries and provide a coordinating mechanism for legislative drafting. Staff for the Department will be recruited and trained locally during the project period. At the same time, under the SAL, the Government undertook to establish a Law Revision Committee to compile, revise and publish, in a consolidated form, existing laws. Within the framework of this Committee, and under the chairmanship of the Director of the new LDD, a sub-Committee to review the Commercial Code and Legislation (as well as the new land- tenure law) will be created to recommend and prepare revised legislation. The credit will finance short-term TA, and material and equipment for the Department and for the sub-committee. The appointment of the Director and his core staff (3 magistrates), and the establishment of the sub- committee (all members acceptable to IDA) are conditions of effectiveness. Abrogation of the law creating "songdas", and the elimination of revolutionary tribunals, will be completed prior to credit effectiveness, but because of political sensitivity, is recorded in a Side Letter to the Credit Agreement. 81. To increase the number of practicing lawyers, the Government will prevail upon the Bar Association to resume its functions as vested in it by law, including processing without further delay, the backlog of outstanding applications for admission to the Bar. Prior to credit disbursement against this component, Government will confirm that all outstanding applications have been fully processed. In the course of negotiations, assurances were also obtained from the Government that a legal aid mechanism for poorer clients including its operating procedures, would be established no later than December 31. 1993. At the end of each year of the project, the Government will provide IDA with evidence to show that all trainee advocates admitted for training in the preceding year, have secured trainee positions either in a law firm or, when justified, in the judicial service. 82. With respect to the courts, for the lower courts of Ouagadougou and Bobo Dioulasso, the Government will set up separate commercial courts to relieve the overburdened magistrates and to provide a specialized and better equipped court for prompt and efficient disposal of commercial cases. These commercial courts will be presided over by specially trained magistrates. In view of the shortage of qualified magistrates, the lower court positions will need to be filled in the first year of the project from amongst those who relinquished their functions as "songdas". These courts will also establish a registry to maintain a register of companies. This registry will also serve as the court registry. The adoption of legislation creating separate commercial courts in Ouagadougou and Bobo Dioulasso is a condition of effectiveness. Furthermore, in order to guard against possible abusive postponement of proceedings by magistrates, the project will require from them, monthly reports giving to their supervisors details on output and performance, with deadlines fixed to ensure that judgements are made within a reasonable time. Administrative instructions to this effect were discussed during ne2otiations. The same instructions will make it clear that the criteria for promotion will be revised to include compliance with the instructions. 83. As an alternative for investors and businessmen to the overcrowded courts, the Government has agreed to encourage more widespread recourse to arbitration for resolving conflict. The credit will finance a study to determine the necessary legal and institutional framework that arbitration requires, and result in the adoption of legislation and appropriate institutional arrangements. The study will be completed no later than June 30. 1994 with its recommendations to be reviewed by IDA and put into effect no later than December 31. 1994. The credit will also finance technology to ensure the production, safe storage of all court - 26 - decisions and their ready availability and communication as part of a legal database. With coordinated financing from the French Government, the credit will also finance upgrading of the Supreme Court's library facilities, the,appointment of a suitably qualified librarian, and the rehabilitation and modernization of facilities for preparing the Official Journal. In the preparation of legislation and in the sale and distribution of the Official Journal, the General Secretary of the Government (SGG) will take a more active role. Administrative instructions to this effect were discussed at negotiations and will be adopted no later than September 30. 1993. 84. To fill the new positions in the commercial courts and in the LDD, the project will finance part of the costs of training magistrates, prospective business notaries and legal ushers, as well as specialized training in commercial and labor law matters for sitting magistrates. For lawyers and magistrates, the Government has agreed to amend the law governing training requirements for access to the profession, thereby improving the piocess of recruitment and training qualified legal staff. Specific programs, including reactivating the magistrates department at ENAM, have been identified, and criteria for selection to these programs are being prepared. Draft legislation for training these specialized professions, as well as reinstating notaries and legal clerks, was submitted to IDA for discussion during negotiations, and will be adopted prior to disbursement against this component. Submission of a detailed training program, including the proposed criteria for candidates selection shall be agreed upon prior to disbursement against this compgnent. 85. In terms of specific legislation, the mining code and related legislation also need to be addressed urgently if Burkina's significant mining potential is to be tapped. Recent negotiations with foreign mining firms concerning the Perkoa Zinc and the Tambao manganese projects drew attention to the absence of much needed mining legislation. With coordinated financing from UNDP, the credit would finance: (i) preparation of reforms to the mining code and related legislation including the land-tenure law; and (ii) on the job training of two Burkinabe lawyers and two economists to work with foreign experts in preparing the new legislation. During negotiations. agreement was reached with IDA on terms of reference and schedules for technical assistance, and on the timing for completion of draft mining legislation (see Volume II, Annex 2). 86. The actions financed by the IDA credit to strengthen business laws in Burkina will be buttressed by support from the French Government as part of a wider effort within the countries of the UMOA to harmonize not only business and commercial law, but also basiking controls and regulatory mechanisms, insurance, and social security legislation, the ultimate intention being to transform the monetary union into an economic one. F. Strengthening Communication of Economic Policy 87. Cognizant of the training deficiencies in economic journalism mentioned earlier (paras. 65-66), the Ministry of Information in Burkina has given high priority to providing journalists from both the public and private media with a better understanding of basic market economics, and adjustment. Four other Sahelian countries have indicated the same priority. Considering the Bank's recent support for building-up Africa's human resource capacity in economic policy formulation and management, as well as its commitment to improving the communication of economic policy, the project would help strengthen the understanding of those who analyze, interpret and mold public opinion on issues of economic and social policy. - 27 - 88. To this end, in collaboration with EDI and the BCEAO, a course module for training francophone journalists in basic economics and adjustment (3 man-weeks) has been developed. During the program implementation period, several courses would be held at the BCEAO in Dakar to which journalists from other Sahelian/UMOA countries would also be invited, at their Government's own expense. The Burkinabe Ministry of Information has identified some 36 journalists (from both the private and public media) to be trained in the first 2 years of the project. The credit would finance the travel and subsistence costs of the Burkinabe journalists concerned, with course materials supplied by EDI. Because the countries to be invited are UMOA members, the BCEAO will provide the facilities, and the French Government has agreed to finance the general costs incurred by the BCEAO, as well as the costs of some of the trainers required. G. Rationale for IDA Involvement 89. Because IDA is a privileged partner in the macroeconomic and sector policy dialogue concerned with helping to improve economic management, and because the sustainability of the adjustment reforms depends on the capacity of the GOB to implement the SAL supported measures, IDA is well placed to extend its dialogue to institutional and process reform. Experience from Burkina and elsewhere in the Sahel, as well as IDA's comparative advantage in mobilizing and coordinating international support for structural adjustment, will also help the GOB better coordinate its overall program of institutional development in economic management, albeit ensuring that other donors continue to support those activities for which they have a clear comparative advantage. IV - PROJECT COSTS. FINANCING. AND PROCUREMENT Proiect Costs 90. Total project costs are estimated at US$16.96 million, (excluding taxes and duties, from which the project is exempt). The estimated foreign exchange component is US$11.95 million, or 70 percent of total cost. The costs by project component are provided below, while detailed estimates are provided in Annex B. - 28 - TABLE 1: ESTIMATED PROJECT COSTS USS Millions Z- - Local Foreign Total % of For. A. Information and Budgetary Reforms Ministry of Pinance 2.22 4.22 6.44 66 INSD/Statistics 0.13 1.19 1.32 90 Sub total 2.35 5.41 7.76 70 B. Prourement Reform 0.02 0.08 0.10 80 C. Civil Service Reforms Census 0.07 0.20 0.27 74 Studies 0.05 0.18 0.23 78 Tmining 0.50 1.00 1.50 67 Quality Control Circles 0.15 0.33 0.48 69 Civil Service Ministry 0.10 0.57 0.67 85 Sub total 0.87 2.28 3.15 72 D. Legal and Judicial Reforms 0.88 1.97 2.85 69 E. Training of Joumalists 0.045 0.045 0.09 50 P. IDA Crcdit: Auditb 0.02 0.06 0.08 75 G. PPF Refinancing 0... .75 0.75 100 Total Base Costs 4.19 10.60 14.78 72 Physical Contingencies 0.46 0.92 1.38 67 Price Contingeies 0.36 0.43 0.79 54 Total Project Cos 5.01 11.95 16.96 70 91. Base cost estimates are in mid-1991 prices. Physical contingencies amounting to about 10 percent of base costs are included. Price contingencies have been estimated at about 5.4 percent of base costs. Annual rates of inflation used are those projected in the March 1991 Policy Framework Paper and are estimated at about 3.7 percent for intemational inflation in the cost of foreign goods and services, and about 3 percent for local inflation. - 29 - Financing Plan 92. The proposed IDA credit of US$15 million equivalent would finance approximately 88 percent of total project costs, net of duties and taxes; this would cover approximately US$11.7 million of foreign costs and US$3.3 million of local costs. A PPF in the amount of US$ 0.75 million was approved in October 1991. Up to US$1.5 million of retroactive financing could be required and is reflected in the legal documents. The Government's contribution to the project will finance operating costs of about US$1.6 million equivalent (see para. 97). Norwegian co- financing estimated at US$0.3 million would finance strengthening information management as it relates to the social dimensions of adjustment. The financing plan for the project is set out below: TABLE II: FINANCING PLAN [ | I GOVr. OF % of IDA 1 IDA JNORWAY BURKINA TOTAL CONTR. US$ Millio-s Training 2.4 0.15 2.6 96 Consultant Services 3.4 3.4 100 Civil Works 3.7 3.7 100 Equipment/ Vehicles 4.7 0.15 4.9 96 Operating Costs 1.6 1.6 0 IDA Credit: Audits 0.08 0.08 100 PPF Rorfuancing 0.75 0.75 100 |TOTAL r n0.30 n 1.6 I 16.9 [ 9 Due to rounding numbers may not add up exactly. 93. Because of the complexity involved in attempting to establish formal co-financing arrangements with donors already providing assistance to the Government's program of institutional development, coordinated financing has been worked out which includes additionally about US$1 million from the AfDB; US$12 million from the UNDP; US$10.7 million from the French Government, and US$1.5 million from Germany. Financing for recurrent costs will be limited essentially to maintaining INSD vehicles, and the maintenance of computers financed under the project. Procurement 94. Procurement under the credit would cover the net of tax cost of goods, consultant services for technical assistance, studies and training, and civil works. The total cost of goods - largely -30- computer equipment, legal texts, and a small number of vehicles - would be approximately USS4.7 mil'ion. Since adequate local representation exists, and the contracts will be relatively small, the vehiUes (which include a half dozen cars, motorcycles, and mobylettes) and smaller items of equipment (including local publication of legal texts for the law library), the total costing about US$800,000 equivalent, would be procured through local competitive bidding (LCB) procedures acceptable to the Association (}e at prices comparable to UN/IAPSO). Computer equipment and software, photocopiers, typewriters and fax machines totalling about US$3.9 million, would be purchased through ICB. Civil Works (involving several contracts) construction of an intemal revenue central services building totalling about US$2 million equivalent would be procured through ICB, and renovation of facilities for the Official Journal, INSD, and the Civil Service Ministry totalling about US$1.7 million equivalent, would be procured through LCB since there are capable local contractors and the contracts in question would be relatively small. LCB documents, however, would be reviewed by the Association, and foreign firms would not be precluded from participation. All contracts of US$100,000 equivalent or more will be subject to prior review by the Association, while contracts below will be subject to ex post review by the Association. All import goods financed by IDA are subject to pre-shipment inspection for quality, quantity and price verification by pre-shipment inspection firms, except that IDA-financed ICB procurement would be exempt from price verification. 95. The IDA credit would finance some 27 consultant contracts totalling US$4.8 million equivalent (of which about US$2.3 million for training), with each contract costing on average US$175,000 equivalent. All consultants financed by the credit would be hired in accordance with IDA's guidelines on the employment of consultants. Cofinanced consultants are expected to have specific terms of reference with verifiable goals to be achieved, in the same way as those financed by IDA. Draft terms of reference (TORs) for all major consultant contracts financed by the credit were discussed during appraisal and confirmed at negotiations (TORs for major contracts are found in Volume II as Annex 2). Overall procurement arrangements are summarized in Table MII below; a listing of the contracts to be let for consultants and studies is attached as Annex C. Training costs under the project include some consultants, equipment and materials for local training, as well as a limited amount for training abroad. The consultants associated with training to be financed by the credit are separated into approximately 8 contracts, including 5 individuals, and 3 firms. Two firms would provide services for the QCC component, and the third for strengthening training in the ENAREF. In each case, sole sourcing would be used since the expertise required in the case of the QCC component is highly specialized and limited, while in the case of ENAREF, the Government's preference is to use expertise for training civil servants in budgetary management techniques most compatible with their current systems of public resource management. On average, these contracts would cost about US$250,000 equivalent. About US$366,000 equivalent of training abroad will be procured under the credit in recognized training institutions agreed to with IDA. 96. Although reviews of IDA's investment portfolio in the Sahel over the last several years have established that Burkina's is amongst the best managed, a recurring problem has been the delays in public procurement. Procurement bottlenecks have also been identified as a serious source of delay in implementing TA projects throughout Africa. Because of these problems, the project addresses system-wide procurement reforms in Burkina. During the transition, however, to avoid bottlenecks to project implementation arising from slow procurement, procurement authority for contracts under CFAF 50 million financed under the credit will be given to a special commnittee to be chaired by the Department of Financial Control of the Ministry of Finance. Details on the scope and composition of the Committee were agreed to during negotiations. - 31 - TABLE IlL: AMOUNTS AND METHODS OF PROCUREMENT la Ploject Procuremcnt Method e Project S Elemont ICa LCB Othcr NBF Total Cost (USS Millions) l Training (2.40) (2.40) 0.15 0.15 Consultant Services and studies (3.39) (3.39) Civil Works (2.00) (1.70) _ (3.70) Equipment and (4.8) Vehiclc _ (3.9) (0.80) 0.15 .... 0.15 Operating Costs 1.60 1.60 PPfi (0.75) (0.75) Total (5.90) (2.50)-- (6.54) - (5.00) (5.90) (2.5) 1 0.30 1.60 1.90 Ia Contingencies and expenditurns finanncd by thc PPF arc includcd in the amounts above. IDA contribution is in parentheses. Due to rounding, numbers may not add up exactly. Disbursements 97. The proceeds of the credit would be disbursed against: 100 percent of the costs of training, consultants, studies, civil works, and equipment, vehicles, and materials. The credit wili refinance the PPF upon effectiveness. The Government's contribution to the project will finance 100 percent of operating costs defined as: (i) upgrading and refurbishing of buildings; (ii) rental; and (iii) consumables such as operating supplies. These expendi:ures, equivalent to about US$1.6 million (about 10 percent of credit) will not recur after project completion and will therefore not represent incremental budgetary expenditures. This approach will minimize implementation problems otherwise arising from the splitting of invoices between the Bank and the Borrower. In addition, the Norwegian grant funds will be disbursed at 100 percent for training and vehicles. A summary disbursement schedule is attached as Annex D. 98. The standard disbursement profile for TA/ID projects in Africa is about 84 months. For the following reasons, however, we expect this operation to disburse in 48 months: (i) the success to date in implementing SAL measures; and (ii) the already advanced state of a number of the project actions. - 32 - 99. IDA would disburse against certified Statements of Expenditure for consultant services whose contract value would be less than US$50,000, for equipment and vehicles for contracts valued less than US$100,000. The Director General for Administrative Reform (DGAR) in the Ministry of Civil Service and Administrative Reform (MCSAR) would retain the documentation for expenditures and make it available for the independent auditors and for review by IDA during supervision missions. Conditions of disbursement are described in para. 113. The closing date for the Credit will be March 31, 1997, six months after project completion. Accounts and Audit 100. The Ministry of Civil Service and Administrative Reform (MCSAR) will be responsible for ensuring that accounts for all expenditures funded under the project Credit, are submitted to it on a regular basis by the various implementing ministries. In order to facilitate access to project funds for numerous small payments, a special account equivalent to US$1 million will be opened in a commercial bank acceptable to IDA. The project accounts will be maintained in accordance with sound and internationally recognized accounting principles and practices satisfactory to IDA. MCSAR will provide interim and annual financial statements to reflect the financial performance and position of the project. The project would also finance the hiring of a local accounting firm to assist the MCSAR in doing so. The TORs for the consultant accountant were agreed to during negotiations (see Volume II, Annex 2) and the hiring of a consultant acceptable to IDA would be confirmed prior to effectiveness. Project accounts would be audited annually by independent external auditors satisfactory to IDA, including an audit of Statements of Expenditures (SOEs). The audit reports, of such scope and in such detail as IDA shall reasonably request, would be submitted to IDA no later than six months following the end of the Government's fiscal year. The auditor's report will include a statement on the adequacy or otherwise of the accounting system and internal controls, the reliability of statements of expenditure as a basis for loan disbursement, and compliance with financial covenants. Assurances to this effect were obtained at negotiations. The Burkinabe delegation provided a short-list of auditing firms to IDA for approval during negotiations. The appointment of an auditing firm to audit the project accounts over a four-year period is a condition of effectiveness. V. PROJECT IMPLEMENTATION Project Management 101. As noted earlier, an often critical flaw in institutional/TA projects has been the creation of independent project management/coordination units (PMUs) whose existence has depended on the continuation of the projects themselves. Bank sector work in this field has concluded that instead of creating new PMUs to manage the implementation of institutional development projects, the management of institutional reforms should be an integral part of the day-to-day responsibilities of the ministries concerned. Based on this experience, the specific program for each component in the project, has been largely formulated by and will be implemented by the Ministries and agencies themselves. Although the project is intended to reinforce weaknesses in institutional capacity in these ministries and agencies, Burkina's administration is recognized on the whole as being relatively capable, and as noted earlier, portfolio management has consistently been amongst the most highly rated in the Sahel. - 33 - 102. Overall responsibility for program and project coordination and administration would lie with the newly reoriented MCSAR. The Director General of Administrative Reforms (DGAR), supported by his staff, would ensure this responsibility on behalf of the Ministry. Each of the three implementing ministries would designate a project liaison from its existing staff to report to the Director in MCSAR and ensure that documentation and reporting on project progress is provided as necessary. Government confirmation formalizing those project management arrangements was provided prior to negotiations (see Volume II, Annex 5). 103. The main responsibilities of the DGAR would include: (a) ensuring coordination among components and between implementing agencies, and IDA and the cofinanciers; (b) assisting implementing agencies in the preparation of their annual work plans and compiling project expenditure documentation in a program budget format, including information on Government counterpart financing; (c) preparing quarterly progress monitoring reports; and (d) coordinating project related training activities of participating agencies with training institutions. 104. In those areas where appropriate administrative or technical capacity on project-related tasks does not already exist in the administration, the agencies concerned may subcontract the capacity from outside the agency. No incremental civil service positions would be created or new staff hired with project financing, nor would any salary supplement be paid under the project. Annual Work Program and Reporting 105. Project implementation will be carried out on the basis of annual work programs for each component, thereby enhancing flexibility in planning and monitoring, and allowing objectives for each component to be attained independently. Each annual work program would include: (i) an evaluation of the previous years' work program; (ii) a statement of monitorable objectives to be pursued, and a description and timetable of the activities to be carried out to realize these objectives; (iii) detailed budgets and financing plans as well as a procurement program and timetable; and (iv) staffing and training plans. WVork programs are to be prepared and implemented by each agency concerned. They would all be submitted to the DGAR who would synthesize them and prepare a project-wide budget and procurement plan to be submitted annually, prior to the end of the previous fiscal year cycle, for IDA review and approval. A mid-year review of implementation would be held with IDA and the other financing agencies. The first year work program covering the first 12 months of the project period was agreed to during neotiation (see Volume II, Annex 1). Supervision of the project would be undertaken jointly with representatives of the French Ministry of Cooperation and the UNDP (see Annex E for Project Supervision Schedule). Representatives of the AfDB, and the German Government would participate on an ad hoc basis at their request. Representatives of the Norwegian Government would be invited to jointly supervise the information management component dealing with the priority surveys. - 34 - 106. The DGAR would also prepare quarterly progress reports for submission to IDA, and would prepare the project completion report and submit It to IDA no later than 9 months after the credit closing date. Each implementing agency would be responsible for providing the MCSAR with the documentation needed to enable it to prepare the progress as well as the completion reports. 107. As Annex A shows, a number of different donors are already supporting or intending to support the Government's overall program for institutional development. As a result, Government is in the process of establishing a mechanism which will minimize donor overlap and at the same time allow the identification of additional TA needs in the program as they develop. To this end, a coordinating commission on TA/ID will be established. It will be chaired by a Government representative and will, in addition to Government officials, include representatives from the donor institutions supporting the Government program. The UNDP will serve as Secretary to the Commission. The Commission would convene several times per year, and would ensure that an inventory of donor support for institutional development was kept up to date. Agreement with the Government was reached during negotiations on the role and the composition of the coordinating commission. (See Aide Memoire of Appraisal Mission, March 18, 1992, in Volume II, Annex 3 and Annex 5). VI. BENEFITS AND RISKS 108. The project to be financed by IDA is integral to the Government's strategy and larger program to implement and sustain the economic reform program supported by the SAL. It would also help support the Government's policy to focus TA/ID from donois around a common set of principles and objectives, thereby minimizing the often disparate nature of past technical assistance. Specific benefits from the project would include: (i) improved management of information and the budgetary process in the priority sectors defined by the structural adjustment program; (ii) more effective management of the civil service including training responsive to financial constraints and personnel requirements, and ultimately, improved working conditions, thereby allowing the Government to retain higher quality staff more easily; (iii) a transparent and more efficient system of public procurement; (iv) creation of a legal framework giving confidence to private investors; and (v) increased public understanding of economic policy and reform under the Government's macro-economic policy framework through building the capacity of local journalists and editors to analyze and report on economic policy and management. 109. The main risk associated with project implementation is the possible weakening of the Government's commitment to the economic reform program. On the one hand, the uncertainty in the outcome of the political reform process, and the composition of the new National Assembly following legislative elections scheduled for May 1992, adds to this risk. On the other hand, the support for the economic program from virtually all the major opposition parties mitigates the risk. Moreover, the politically neutral nature of the project's objectives and components should enable it to enjoy broad support, which is unlikely to be lost under a different Government. A second risk arises from the Government's capacity to manage and implement what is both an ambitious and innovative program. Although the MCSAR is relatively new, the Government has a strong commitment to building national capacity, has on its own taken the initiative to produce a strategy framework paper and policy guidelines to realize this commitment and has been relatively effective in managing donor financed projects. In addition, the Government's strategy of deconcentrating management and integrating implementation of each component into the line - 35 - ministry concerned (with overall coordination given to the MCSAR) should minimize the complexity of managing multiple components. The project will be implemented over a 4-year period in accordance with independently defined work programs which permit flexibility and mid- course adjustments as necessary. Because of the proposed project's link to the SAL, the SAL supervision plan is being amended to take account of the project, which will as a result benefit from close IDA supervision during implementation. Since this is a Category C project, no enviromnental analysis is needed. VII. AGREEMENTS Agreemenls Reached 110. Prior to negotiations: (a) GOB adopted a decree to ratify the existence of a Steering Committee to advise the Minister of Justice on matters relating to legal and judicial reforms including the TORs and composition of the Committee (para. 80); (b) GOB submitted to IDA draft decrees to ratify the existence of (i) a Coordinating Commission for the overall TA/ID program; and (ii) IDA project management arrangements (paras. 102 and 107). 111. During negotiations: (a) Agreement reached on TORs and hiring of the Information Manager (para. 70 (ii)); (b) Agreement reached on TORs for the study pertaining to the Ministry of Finance's systematic review of staff resources presently engaged in public procurement work (para. 74 (c)); (c) Agreement reached on timetable and action plan for dissolution of ONMP and related commissions, the integration of their functions and transfer of staff to DCF and to technical ministries no later than January 1, 1994 (para. 76); (d) Agreement on a training strategy for civil service agents (para. 77); (e) Agreement reached on administrative instructions concerning the role of SGG in preparing the Official Journal (para. 83); (f) Confirmation provided on TORs and schedules for TA related to the mining sector, and on the timing for completion of draft mining legislation (para. 85); (g) Agreement reached on the TORs for the Consultant Accountant whose services the MCSAR will use to identify the accounting and administrative management needs of the Administrative Reform Department (para. 100); - 36 - (h) Agreement reached on first-year work program including procurement actions envisaged under the project (para. 105); (i) Agreement reached on a short-list of auditing firms for the project (para. 100); (j) Agreement reached on the scope and composition of the Committee to review IDA procurement financed under the credit (para. 96); (k) Agreement reached on scope and composition of coordinating commission for TA/ID (para. 107). 112. Conditions of effectiveness: (a) Appointment of a high level committee, chaired by the Minister responsible for budget preparation, and including the director, to prepare a revised and consolidated set of public procurement regulations (para. 74 (a)); (b) Establishment of a Legislation Drafting Division, recruitment of the Director and magistrates, and establishment of the sub-committee in charge of the codification of commercial law (para. 80); (c) Adoption of legislation creating separate commercial courts in Ouagadougou and Bobo-Dioulasso (para. 82); !d) Recruitment of Consultant Accountant for the MCSAR (para. 100). (e) Selection of auditors for the project (para. 100); 113. Conditions of disbursement (legal component): (a) GOB to confirm that the Conseil de l'ordre has ruled on all pending applications for admission to the Bar (para. 81); (b) Upgrading of library facilities and appointment of librarian (para. 83). (c) Adoption of laws pertaining to training of attorneys and magistrates (as well as their prospects for entering the profession) and to .he reinsertion of legal ushers and lawyers (para. 84); (d) Submission of a detailed training program for magistrates and other attorneys, including the criteria for selection of candidates (para. 84); 114. Assurances provided by Government during negotiations: (a) Review and clearance of all public procurement would be decisions be completed within a fixed period of time following approval by the financier (para. 76); (b) Establishment of legal aid mechanism not later than December 31, 1993 (para 81); - 37 - (c) Issuance of administrative instructions on monthly reports detailing output and performance of proceedings by magistrates (para. 82); (d) Issuance of instructions on the drafting and follow-up of legal texts, and on the distribution and commercialization of the Official Journal no later than September 30, 1993 (para. 83); (e) Completion of study for establishment of arbitration facilities not later than June 30, 1994 (para. 83). Recommendation 115. Subject to the above conditions, the proposed project is suitable for a credit of US$15 million equivalent to the Government of Burkina Faso on standard IDA terms with 40 years maturity. ANNEX A - 38 - Page 1of 2 lI ___ *i Ail I!;ffiiI t 3 Z X 1} axile Xli Xt I 3 WX t 0| I iIl 00Ilt{ ___ rJ 7I if l f t_ _ __ _ _ _ _ - 39-~ ANNEX A Page 2 of 2 I r = 0 l " - iiX}ij]S }iti LIIs ii IT I l Ii Ibe2$a ii {i li1 X~j . 1 -l 1 ll BURKIN FASN PUBUC LITUTIONAL DEVELOPMENT PROJECT CFAF Project Components by Year Bas, Costs Total 1993 1994 199 199 CFAF USS A. Budgeary gt.. Reforms 1. Ministry of Finance 442527.0 592461.7 590420.0 63426.9 1684840.7 6194.3 2. Stattetics/INSm 178988.8 73932.3 73866.0 19173.2 342999.1 1261.0 sub-total 61565.6 666394.0 67M281.1 72699.1 2027839.8 7466.3 B. Credit Manag eet 66.0 66M.6 666.6 6556.6 22926.4 81.0 C. Civi I Service Reform 1. Coosus 76544.5 e.o *.o 9.o 76344.6 277.9 2. Studies 6883.2 0.0 9.9 9.0 69385.2 265.1 S. Schools 16656.6 159374.3 68954.9 38282.5 392367.3 1442.6 4. QualIty Control Circles 685.9 6887.0 368.8 368.8 1206W4.1 476.7 5. Civil Service Minlstry 86058.4 7199.8 17862.6 18934.6 190966.4 702.6 Sub-total 45851.6 267331.8 76275.3 55575.9 857714.5 3163.4 D. Procur_mt. Reforms 1196.9 8854.3 6679.3 1380.0 27876.4 102.6 E. Lepl A Judicial Reform 286969.2 262766.8 171214.6 6676.2 7765.2 2854.8 F. Training of Journalist 1221.6 12921.6 0.0 9.0 24943.3 88.4 G. PPF RefInanciog 24 . 9 .9 0.0 20466.0 760.0 Tot*l BASELINE COSTS 1595632.5 1212873.6 92986.8 291636.8 3989999.6 14486.3 Physical Contingncies 182109.9 122837.7 107809.2 13294.3 375961.1 1382.2 Price Cotoingncies 26068.1 70658.6 90628.6 27446.5 216586.6 792.6 Total PROJECT COSTS 1754645.4 1465319.9 1128290.5 242267.6 4531647.4 16669.1 Tax" 9.0 0.9 *.0 9.6 9.6 6.6 Foreign Exchange 881066.9 974124.5 648361.3 170496.8 8174646.6 11671.6 Valuo Scaled by 1011.09 6/81992 17:61 4~~~~~~~~~~~~~~~~~~~~~~~~1 BURKINA FASO PUBLIC INSTITUTIONAL DEVELOPMENT PROJECT CFAF Sumary Accounts by Year Base Costs Foreign Exchange 1993 1994 1996 1996 Total X Amount ======_ == I. INVESTMENT COSTS A. Equipmsnt,Fureiture,Uats 676903.4 876280.1 52668.8 64866.4 1095903.7 89.2 946499.4 8. Civil Works 45111.8 254892.8 494980.4 4102.0 798867.0 48.8 369887.0 C. Vehicles 67876.8 5.6 5.5 5.5 578.8 89.6 51656.1 D. Training 226139.9 198279.2 130466.4 48331.9 663216.6 50.3 353846.0 E. Consultants 303296.0 263363.8 143117.7 21637.3 811314.8 74.0 655200.6 F. PPf Ref IinocIn 204505.0 0.0 0.0 0.0 204056.0 100.0 204005.5 Total INVESTMENT COSTS 1493128.0 1091616.5 821197.3 128637.6 3534678.8 70.6 2494889.1 II. RECURRENT COSTS 0. Vehiclo 0
Groupe de la Banque mondiale · Staff Appraisal Report
Burkina Faso - Public Institutional Development Project (Vol. 1 of 2) : Main report
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