Ghana - Structural Adjustment Institutional Support Project

Documentof The World Bank FOR OMCLAL USE ONLY RePot No. 12502 PROJECT COMPLETION REPORT REPUBLIC OF GHANA STRUCTURAL ADJUSTHENT INSTITUTIONAL SUPPORT PPOJECT (CREDIT 1778-GB) NOVEMBER 15, 1993 FILE COPY Report No: 12502 Type: PCR Country Operations Division Western Africa Department Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Cedi It 1987 1j2 I.28 I990 1991 1992 Cedis per US$1.00 153.7 202.4 270.0 326.3 362.8 431.9 WEIGHTS AND MEASURES Undess otherwise stated all weights and measures used in this report are metric. GLOSSARY OF ACRONYMS ASYCUDA - Automatic System of Customs Data Entry, Control and Management CFTC - Commonwealth Fund for Technical Cooperation COS - Committee of Secretaries DRMS - Debt Recording and Management System ELU - Economic Liaison Unit EMS - Eco;iomic Management Support Project EPU - Economic Policy Unit ERP - Economic Recovery Program GDP - Gross domestic product GIMPA - Ghana Institute of Management and Public Administration GLSS - Ghana Living Standards Measurement Survey GOG - Government of Ghana GSS - Ghana Statistical Service IBRD - International Bank for Reconstruction and Development IERD - International Economic Relations Division SAD - Investment and Project Analysis Division IPPD - Integrated Personnel and Payroll Database IRS - Internal Revenue Service LSMS - Living Standards Measurement Study MDPI - Management, Development and Productivity Institute MFEP - Ministry of Finance and Economic Planning MSD - Management Services Division NRS - National Revenue Secretariat ODA - Overseas Development Administration OHCS - Office of the Head of the Civil Service PCR - Project Completion Report PIB - Prices and Incomes Board PIP - Public Invesunent Program PMU - Project Management Unit PNDC - Provisional National Defence Council PPF - Project Preparation Facility PRD - Planning and Research Division SAIS - Structural Ac ustment Istitutional Support Project SAP - Structural Ad ustment Program SAPSEC - Structural Adjustment Program Secretariat SMS - Skills Mobilization Scheme UNCTAD - United Nations Conference on Trade and Development UNDP - United Nations Development Programme FISCAL YEAR January I - December 31 1I Period average.  FOR OFFICLAL USE ONLY THE WORLD BANK WashinMton. D.C. 20433 U.SA OffRh of DirectorGeneral Operatons Evaluation November 13, 1993 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THIE PRESIDENT SUBJECT: Project Completion Report on Ghana - Structural Adjustment Institutional Support Proiect (Credit 1778-GH) Attached is the Projct Completion Report on Ghana - Structural Adjustment Institutional Support Project (Credit 1778-GH) prepared by the Afrca Regional Office, with Part II prepared by the Borrower. This project accompanled the first Structural Adjustment Credit (SAC ) to Ghana. it was approved In 1987. The project's main objectives were: () to stengthen the policy analysis capability of the Ministry of Finance and Economic Planning and Office of the Head of State; (i) to Improve public Investment programming and other aspects of financIal managemnent;, (i to help plan and Implemert reforms In the civil service; and ffv) to monitor the Impact of the reform program on vulnerable groups. The PCR finds that Othe project was implemented for the most part as designed.. [and thatJ the overall results ... were satisfactory.* it acknowledges, however, that the Instiutional development Impact was only partial The PCR found that whle several agencies achieved significant ilmprovements In skill levels, procedural approaches and general operating efficiency," the *overall performance of the project management was less than satisfactory' (e.g. there were serious problems In procuremertt and accounting that required Intensive supervision from IDA). Most project components were Implemented successfully, but there was a notable hick of success In puttng In place the Policy Analybsis Divison and the Economic Laison Unit and In Implementing a Skills Mobilzatlon Scheme (which was designed to attract qualified Ghanaian advisors, Including Ghanalans retuming from abroad). The PCR Is equivocal regarding the matter of sustalnabiliGy, and It does not provide an explicit rating for this project attribute. The overall lmpression given, however, is that sustalnabilty Is Dkely. The PCR Is quite Informaive, and It provides an adequatG descrption of the objectives and outcomes of the main project componerft Its weaknesses are that R Is not very evaluative and that some of the lssons drawn (e.g. the need 1or a 'clarer understanding by IDA of the soclo-polilcal framework') are not sufficiently explained and/or supported by analysis OED plans to audit this project In order to get a better understanding of the strengths and shortcomings of Its design and Implementation. Particular attention will be given to the issue of client ownership and to examining the reasons (not explained in the PCR) why the composition of actual project expenditures was so different from the compositon of plannid expenditures. Tne audit will also contribute to the Country Assistance Review (CAR) of Ghana, In which the subject of capacily building will be emphasized. Attachment ihis doument has a resicted distribution and may be used by recipients only in the perfonnanoe of their offical duties. Its contents n2ay not otherwie be disclosed without Worid Bank authorization.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT REPUBLIC OF GHANA STRUCTURAL ADJUSTMENT INSTITUTlON'AL SUPPORT PROJECT (CREDIT 1778-GH) TABLE OF CONTENTS Page No. PREFAC'E ....... i EVALUAIION SULM4ARY .i PART b PROJECT REVIEW FROM THE BANKUS PERSPECTIVE .1 1. Pro;ect Identity. 1 2 Background. 1 3. Project Objectives and Components. 2 4. Project Design and Organization. 3 5. Project Implementation and Results .5 6. Cofinancing. 8 7. Project Sustainability. 9 & Bank Performance. 9 9. Borrowe r's Performance .10 10. Project Documentation and Data .10 11. Conclusions and Lessons Learned .10 PART I PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE ...... 12 1. Introduction .12 2. Training .12 3. Consultancy. 15 4. Procurement .18 5. Observations and Conclusions .19 PART lL- STATISTICAL INFORMATION .23 Table 1. Related Bank Credits .23 Table 2. Project Tmetable .24 Table 3. Credit Disbursements (Cumulative) .24 Table 4. Allocation of Loan Poceeds. 25 Table S. Project Results .26 Table 6. Status of Covenants .28 Table 7. Use of Bank Resources .29 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -1- PROJECT COMPLETION REPORT REPUBLIC OF GHANA STRUCTURAL ADJUSTMENT INST]TUTIONAL SUPPORT PROJECT (CREDIT 1778-GiH) PREFACE This is the Project Completion Report (PCR) for the Structural Adijustment Institutional Support Project (SAIS) in Ghana, for which Credit 1778-GH in the amount of US$10.8 million equivalent was approved on April 14, 1987. The closing date for the Bank loan is June 30, 1993, and an undisbursed amount of about US$49 will be canceled. The PCR (Parts I and HI) was prepared by Ms. Hilda Yumiseva, a consultant, in conjunction with the Country Operations Division, Africa Country Department IV of the World Bank. Part II was prepared by the Borrower after receiving Parts I and III from the Bank. rreparation of this PCR took place during March 1993, and is based on the Memorandum of the President, Credit Agreement, Supervision Reports, Mid-Term Review, progress reports, project audits, correspondence between the Bank and the Borrower, internal Bank memoranda, and several discussions with project supervision members of this project and the follow-up Economic Support Project (EMS).  - ii PROJECT COMPLMION REPORT REPUBLIC OF GHANA STRUCTURAL ADJUSrMENT INInTUTIONAL SUPPORT PROJECT (CREDfT 1778-G) EVALITATION SUMMARY Project Objectives 1. The project objectives were to support the Government's efforts to reform public sector management, in the short term, by facilitating the implementation of the Structural Adjustment Program (SAP) and, in the longer term, by strengthening the policy and management capacities of key government agencies to manage the economy. Financing of international experts, equipment, and training was directed to (i) strengthening the policy analysis capability of the Ministry of Finance and Economic Planming (MFEP) and the Office of the Head of State and Government; (ii) improving public investment programming; (iii) improving civil service productivity; and (iv) monitoring the impact of reforms on vulnerable population groups. Implementation and Results 2. The project was implemented for the most part as designed. Effective channelling of cofinancing made for a smooth project implementation, and foreign technical assistance was adequate. The credit became effective on July 31, 1987, about two and a half months after the signing date, and the project will be closed as scheduled on June 30, 1993. 3. The overall results under the SAIS project were satisfactory. The project made available the necessary means to imnprove economic analysis and procedures in various goverrnent agencies and supported intensive training, all of which undoubtedly contributed to the success of the SAP. In the area of budgeting and expenditure control, the budget is announced on a more timely basis and improvements were made in the preparation of estimates. This helped restore credibility to the budget process. Since 1988 the Government has produced a rolling 3-year public investment program and progress was made to incorporate the Public Investment Program (PIP) into the budget. Revenue performance improved considerably due to the implementation of the SAP as well as a stronger tax administration-the latter resulting partly from the fact that the revenue agencies benefitted the most from training, and partly from higher salaries. An external debt management system was also installed which generates important information of value to several government agencies, especially the Bank of Ghana. 4. The Government made progress in reducing overstaffing at the lower levels of the civil service. During 1987-90 some 49,300 civil servants were retrenched. Net retrenchment was considerably lower, however, because of rehiring of redeployees and new hiring. Progress was made on decompressing salary scales, and a mechanism for continuous functional reviews was established. The conduct and implementation of management reviews and job inspections have contributed to appreciable increases in civil service productivity. TI. rebuilding of the Management Services Division (MSD) capacity has enabled the Office of the Head of the Civil Service (OHCS) to effectively induce ministries to improve their performance. Work was started  - iii - on the Integrated Personnel and Payroll Database Project (IPPD) and is expected to lead to major improvements in personnel management. Work was completed on the design of the new simplified pay and merit system. Implementation of the latter and continued efforts on the above reforms are supported under the follow-up Economic Management Support Project (EMS) (Credit 2240-GH). 5. Although most components were implemented successfully, some were only partially implemented. The Economic Policy Analysis Unit, which later became the Policy Analysis Division, is still in the process of restructuring and the Economic Liaison Unit (ELU) V_d a short life. Tne Government showed little interest in these components mainly because of the res.stance to change from a traditionally highly centralized process of decision-making, and a nationalistic sentiment which resisted foreign advice. The Skills Mobilization Scheme, designed to attract qualified Ghanaian advisors, never really took off primarily because the fees prope'zed for coisultants were in excess of the agreed fee structure (paras. 4.11 and 5.12). 6. Managemwat of the project was weak. Problems in the management of the Special Account, procurement procedures and accounting required substantial supervision effort from IDA. Project Sustainability 7. In terms of building institutional capacity, several agencies achieved significant improvements in skill levels, procedural approaches, and general operating efficiency. However, overall economic management capacity remained weak. Decision-making remains centralized and there is insufficient use of the outputs of the project. Management capacity takes more relevance as the country moves beyond structural adjustment to the formulation and implementation of strategies to sustain growth. Building on the experience of SAIS, the EMS project takes a more focussed approach to capacity building. 8. Self-sustainability of the civil service reform was enhanced by a series of organizational manuals, policy guidelines and procedures produced by Overseas Development Administration (ODA)-financed consultants. Another important contribution to sustainability is the input of local consultants and trainers. The launch of the IPPD gave a boost to local computer consultants acting as sub-contractors to ODA consultants. Other local consultants ran training courses and assisted OHCS with the introduction of a performance appraisal system, and the Ministry of Health with the implementation of new staffing guidelines. Lessons Learned 9. The Government and IDA could benefit from the following lessons: (a) Closer control of training could ensure that those trained are assigned to more responsible jobs, and are eligible for promotions, possible salary supplements or other incentives in order to retain them in the civil service; (b) A clear understanding by IDA of the socio-political framework and sufficient consultation with the authorities would avoid over-designing of project components and wasted efforts, as was the case for the ELU and the Economic Policy Unit (EPU); (c) The Bank should support an independent initiative for policy analysis such as the recently established Centre for Policy Analysis, which will do non-partisan economic research and is supported by the Government. The Centre should play  - iv - an advisory role not only to high-level government authorities but also to technicians responsible for policy anaiysis; (d) Economic analysis capacity within the Government is urgently needed in Ghana, and the Centre should not substitute for the Policy Analysis Division of MFEP. Provided that there is goverwnent commitnent, the Bank should continue to assist in the restructuring of the Policy Analysis Division of MFEP as well as in developing analytical capacity within the sector ministries and the Bank of Ghana. The Centre and government agencies should work in a coordinated fashion. (e) The impact of technical assistance projects such as SAIS is limited by the willingness of decision-makers to utilize the outputs of the project effectively. Greater coordination between decision malkers and technicians would contribute to efficient policy decision-making in Ghana, and the Bank should exert its influence to bring that coordination about. (t) The Government should create an environment in which Ghanaian economists feel that they have an opportunity to contribute to improved policy making.  PROJECT COMPLETION REPORT REPUBLiC OF GHANA STRUCTURAL ADJUSTMENT INSTITUTIONAL SUPPORT PROJECT (CREDIT 1778-GB) PART I: PROJECI REVIEW FROM TIE BANK'S PERSPECTIVE 1. Project Identity Project Name StructralAdjustmentlnstitutionalSupportProject(SAIS) Credit Number Credit 1778-GH RVP Unit : Africa Country Republic of Ghana Sector : Public Sector 2. Background 2.1 Relative to the rest of West Africa, Ghana once enjoyed a fairly high standard of living. However, its economy deteriorated considerably in the 1970s and early 1980s due to poor economic policies and oil price increases. Large budget deficits, driven by the need to support a sprawling, inefficient public sector, fueled monay supply expansion and inflation. Ghana's problems were exacerbated by a severe drought in the early 1980s, a deterioration in the terms of trade, and the need to absorb a million returnees from Nigeria. Real per capita income had dropped substantially in the 1980s and half of the population was estimated to live in absolute poverty. 2.2 Along with the economy, virtually all government agencies had also suffered major declines in productivity and effectiveness. The Government's administrative capacity to implement policy decisions effectively was inadequate and had become highly centralized. The civil service as a whole w; scessively large and inefficient. Personnel administration capacitias and management systems at the sector and decentralized levels were critically inadequate. 2.3 In 1983, the Government launched an Economic Recovery Program (ER?), which quickly brought about an impressive improvement in the economy. The Government recognized, however, that in order to sustain those initial gains, further adjustments over a number of years were necessary. The structural adjustment progran represented the first stage of that long-term process. 2.4 The success of the adjustment program, however, depended to a large extent on developing strong institutions. The Government initially prepared an ambitious organizational reform to decentralize the central government ministries to regional and district levels, but progress was slow. As a result, with the first Structural Adjustment Program (SAP) and complementary SAIS project in 1987, it opted for a more focussed and realistic approach to public sector management reform that addressed the most critical problems of the administration in a phased manner. Priority was given to improv-C _ he effectiveness of economic management  institutions and the productivity of the civil service. SAIS provided institutional support to the Government of Ghana (GOG) during the implementation of SAC I and SAC II. 3. Project Objectives and Components Project Objectives 3.1 The project sought to support the Government s efforts to reform public sector management by strengthening the policy and management capacities of the core agencies in charge of the economic recovery and structural adjustrment programs. This was to be achieved through project financing of Ghanaian and intemnational experts, equipment, and training. Specifically, project assistance was to be directed to: (a) strengthening economic policy analysis, formulation and coordination in the Ministry of Finance and Economic Planning (MFEP) and the Office of the Head of State an: Government; (b) Improving economic management, especially public investment programming, expenditure control, revenue mobilization, debt management and aid coordination; (c) increasing public service productivity through retrenchment of surplus staff, establishment of a sound personnel management system, and an incentive- oriented public service salary policy; (d) undertaking studies to help prepare, implement and review structural adjustment policies, programs and projects, and providing short- and long-term advisory services, whenever possible by skilled Ghanaians; and (e) monitoring the impact of economic policies on vulnerable population groups. Components 3.2 The project covered a 7-year span within a long-term public sector management program, and had the following components: (a) Economic Policy Management focussed on the improvement of public sector management of economic policy by: (i) the establishment of an Economic Policy Unit (EPU) in the MFEP; (ii) the establishment of an ELU in the Office of the Chairman of the Committee of Secretaries (COS); (iii) public investment planning; (iv) budgeting and expenditure control; (v) revenue mobilization; (vi) debt/aid management; and (vii) training of staff. (b) Public Service Productivity focussed on: (i) the execution of a civil service staffing and functional review, a salary policy review, as well as establishment of a sound personnel management system, through the Office of the Head of the Civil Service (OHCS); and (ii) the design of a coherent staff redeployment program, salary policy and support for redeployment and training activities.  - 3 - (c) Structural Adjustment Related Studies and Advisory Services to be carried out by skilled Ghanaians from outside the public service through a Skills Mobilization Scheme. (d) Poverty l,3nitoring to measure the socio-economic impact of the structural adjustmnent program at the household level. 4. Project Design and Organization Economic Policy Managenent 4.1 The project was to support the establishment of an EPTJ as the nucleus for rebuilding MFEP's capacity to analyze policy issues, review economic trends and performance, and advise the Government on appropriate economic policies. The EPU was to consist of three advisers-for macroeconomic, monetary and financial, and fiscal policies. The advisers were expected to report to the Secretary for Finance and Planning, and provide support and advice to the heads of MFEP's five functional divisions. 4.2 An ELU including three senior officers, seconded possibly from MFEP, was to be established in the Office of the Prime Minister (the Chairman of the Committee of Secretaries) and was to be charged with the preparation and processing of economic policy decisions and aid agreements and of advising the Government on improvements in economic decision-making. The ELU was to report to the Secretary of the COS. 4.3 Restructuring of the Investment and Project Analysis (IPAD) and the Planning and Research (PRD) Divisions of the MFEP was contemplated so that they might assume full responsibility for drawing up a rolling three-year PIP. With joint assistance from the United Nations Development Programme (UNDP), planning units were to be set up in sector ministries to prepare investment plans, and the project was to finance consultants to assist these divisions as an interim measure while staff were recruited and trained. 4.4 The project contemplated the restructuring and strengthening of the Budget Division of MFEP, and the reestablishment of systematic budget preparation and monitoring procedures. The International Monetary Fund reviewed the budgeting system and made proposals for improvement, and a task force helped prepare budgetary expenditure norms for priority sectors. The Project Preparation Facility (PPF) financed an expatriate budget adviser to assist in the preparation of the 1987 budget and financing of 30 staff-months of local and international consultants was envisaged for this Division. Additionally, a study was to review the operations of the Controller and Accountant-General's Department. 4.5 Monitoring of aid disbursements and project performance was to be integrated into the work of the International Economic Relations Division (IERD). IERD was also assigned primary responsibility for debt management. The Debt Management and Financial Analysis System developed by the United Nations Conference on Trade and Development (UNCTAD) was to be installed and further linked to IERD's aid information system. 4.6 Revenue collection (taxation and customs), which had earlier been transferred from the MFEP to the National Revenue Secretariat (NRS), was to return to MFEP. The NRS planned to improve its information base for income, customs and excise taxes, as well as its computer facilities to increase the timeliness and accuracy of assessments and revenue collections. The  -4- project was expected to finance 52 staff-months of short-term consultants, mainframe upgrading, microcomputers for regional tax offices and major customs posts, vehicles, and staff training. 4.7 MPEP drew up a preliminary staff development program for economic and financial staff, which included courses organized mainly by the CGhana Institute of Management and Public Administration (GIMPA), the Manpower Development and Planning Institute, and a highly selective program of overseas training. The British Council was to assist with course identification and administration for overseas fellowships and the provision of specialists for some Ghana-based courses. The MFEP training officer, in coordination with the PMU training officer, was in charge of preparing an annual comprehensive training plan. Public Service Productivity 4.8 Civil Service Management. Institutional strengthening of OHCS was planned in order to help create a sound civil service management system. Areas singled out for strengthening were the staff inspection function and personnel management information systems. Particular attention was to be given to dovetailing the administration of personnel with that of the payroll, which is the responsibility of the Accountant-General, so as to reinforce internal checks on the payroll. The Overseas Development Administration (ODA) would provide international consultants in close collaboration with the GIMPA. 4.9 StaMng/Functional Review and Redeployment. The project would finance a staffing and functional review, modeled after similar successful exercises elsewhere in Africa, and was to include a training and staff development program for OHICS staff. ODA was to finance about 36 staff-months of foreign consultants, and IDA local consultants, logistical requirements and other local costs. The project was to finance the design of a coherent redeployment program and an assessment of training needs and private sector employment opportunities for retrenched workers. The project earmarked about US$1 million for redeployment activities. 4.10 Salary Policy. The project was to finance studies to help formulate salary policy. Other studies and surveys were also envisaged to guide salary policy, and, in particular, salary adjustments in future budgets. Structural Adjustment Studies and Advisory Services 4.11 Financing for studies and advisory services by consultants in support of the SAP was planned through SAIS. Executing Ministries or the SAP could request financing of these studies. Responsibility for the execution of the studies would rest with the implementing agency. The Skllls Mobilization Scheme was to offer financial incentives for civil servants involved in ERP- related tasks, provide for long- and short-term consultancies for non-civil servants also working on ERP tasks, and encourage the return of Ghanaians living abroad. An appropriate fee structure was established for these consultants. Returnees had to sign a contract for a minimum of 3 years and received a relocation allowance of approximately US$15,000. In addition, to help overcome the severe shortage of housing in Accra, the project was to finance rehabilitation of government housing. Poverty Monitoring 4.12 To monitor the socio-economic impact of the structural adjustment program at the household level, the project envisaged financing the Ghana Household Survey Program. The first phase of the Programn was based on an extensive household survey developed by IDA's Living  Standards Measurement Study (LSMS). The study was supervised by the Bank's LSMS staff and consultants, until June 1987, at which time the World Bank Social Dimensions of Adjustment Unit, in charge of managing the UNDP/World Bank project, took over project financing and implementation. Project Management 4.13 Monitoring of SAIS was the responsibility of the SAP Secretariat (SAPSEC). SAPSEC provided support to the short-lived SAP Team headed by the Chairman of the Committee of Provisional National Defence Council (PNDC) Secretaries and was responsible for monitoring and evaluating the SAP. Until 1989, SAPSEC was headed by the PNDC Secretary for Fuel and Power (who was also responsible for the NRS), which created coordination difficulties with MFEP. The major role of the SAPSEC was to monitor the implementation of the SAP and to facilitate the provision of support to the implementing agencies. Once the work programs of implementing agencies were approved, they were to be carried out with the assistance of SAPSEC. S. Project Implementation and Results 5.1 Only some components of the project were implemented as designed. The Policy Analysis Unit and ELU were partially implemented, as was the Skills Mobilization Scheme. Effective channelling of cofinancing made for a smooth project implementation, and foreign technical assistance was adequate. The credit became effective on July 31, 1987, about two and a half months after the signing date. Selection of the managing unit staff was made ahead of project effectiveness and preparatory work was initiated using PPF advances worth US$405,000, which included short-term consulting services for the MFEP. The project will close, as scheduled, on June 30, 1993. Economic Policy and Management 5.2 The EPU was only partially staffed. Of the planned four senior advisers ondy two Ghanaian returnees were hired for the positions of macro-economic advisor and money and credit expert. In 1989, the EPU became the Policy Analysis Division (PAD) with a larger staff and expanded responsibilities. PAD was reorganized in the second half of 1990 into six units; however, its contribution to economic policy analysis and formulation has been minimal. Although the terms of reference of the ELU, including its relationship with the ministries, were approved and the unit was adequately staffed, its work substantially differed from that originally envisaged. The Unit did a study on decision making proc,edures by the PNDC; assisted the Chairman of the COS in evaluating proposals, preparing model contracts for consultancy services, and various projects; and monitored economic agreements reached by the COS and the PNDC. Its role became even less relevant when the Unit Head took a second job. 5.3 Public Resource Management. Initially, the project provided the Government with the services of a budget advisor for six months, who assisted in the preparation of the 1987 budget and was in charge of the overall monitoring and support of the budget activities. To help improve the allocation of operations and maintenance expenditures in agriculture, health and education, an MFEP budget task force completed a study on recurrent expenditure norms in late 1987, the results of which were used in the preparation of the 1989 budget. A budget manual on recurrent expenditure guidelines was prepared and seminars were held with sector ministries. The key issue was the adequacy of non-wage recurrent expenditures. Extemal consultants financed by ODA prepared a requirements study which recommended computerization of the  -6 - budget process. Computerization would enable integration of information on actual expenditures and concessional assistance and disaggregation of estimates by district arising from the Government's decentralization program. Partial computerization took place under SAIS which, together with improvements in the preparation and publishing of estimates permitted distribution of the budget estimates on a more timely basis. The project also financed a task force to assist the IPAD with the preparation of a rolling three-year PIP. Publication of the PIP thus started in 1988. Initial work to incorporate the PIP into the budget started under SAIS. 5.4 Revenue Mobilization. A requirements study was done to computerize the Internal Revenue Service (IRS) and Customs Excise and Preventive Service. The Customs Excise and Preventive Service, assisted by UNCTAD, installed the Automatic System of Customs Data Entry, Control and Management (ASYCUDA) computer system at various ports of entry, aimed at speeding up customs clearance, maximizing customs revenues through more accurate accounting, and producing reliable trade statistics. A local consulting firm was hired to develop a system for the domestic sales tax. The firm linked the ASYCUDA system with the domestic sales tax system. These procedures contributed to improved revenue performance. Revenues increased considerably due to both the implementation of the ERP-especially the move to a more realistic exchange rate, and the restructuring of the tax system-and a stronger tax administration partly resulting from the fact that the revenue agencies benefitted the most from training.1/ 5.5 Debt/Aid Management. In 1988 the Government requested the assistance of tho Commonwealth Fund for Technical Cooperation (CFTC) to install a debt management system within IERD. Installation of the Debt Recording and Management System (DRMS) wa'. completed in late 1989. An inter-agency committee on debt management was established with representatives also from the Bank of Ghana and Office of the Controller-Accountant General to supervise the process. The information generated by the system is critical for various agencies, especially to support Bank of Ghana's efforts to improve the management of financial resources. Civil Service Reform 5.6 Improving the efficiency of the civil service was a central objective of the adjustment program. The reforms aimed at reducing staffing levels, raising remuneration, and increasing salary differentials. Since 1987 ODA provided consultant support in designing and implementing Civil Service Reforms. Agreement on a second phase of assistance was reached in early 1989, extending support until mid-1992. The program was managed by the Oversight Committee for Civil Service Referm, under the chairmanship of the Head of the Civil Service and Member Secretary of the COS, and included representatives of the divisions of the OHCS, the Prices and Incomes Board (PIB), the Public Services Commission, and local management training institutions. 5.7 The consultants produced reports on (i) Pay and Grading, (ii) Functional Review and Redeployment, and (iii) a proposal for civil service legislation, which were the basis for various reforms. The Pay and Grading report was used to start a reform on the salary structure-mainly the decompression of the civil service, salary structure. The PIB did studies on fringe benefits in both the public and private sectors and comparative salary levels by job category, and played an important role in formulating salary policy and grade restructuring. The Management Services Division (MSD) of the OHCS established a capacity to undertake continuous functional reviews it Tax revenues for 1988 were 36 percent higher than those in 1987, which were 53 percent higher than in 1986; and although they did not increase in relation to GDP during 1988-90, the share of cocoa revenue dropped shaiply from 17 to 12 percnt.  of the Civil Service through an annual program of job inspections, and job inspection units were established in key sector ministries. 5.8 Although there was widespread recognition that the lower ranks of the civil service were overstaffed, identification of those to be redeployed was difficult in the absence of adequate information. A feasibility study for the Integrated Personnel and Payroll Database (IPPD) was prepared by the consultants, which would enable monitoring overall staffing levels broken down by salary level and agency and thus lead to major improvements in personnel management. Pending the establishment of this system, in late 1990, the Personnel and Policy Management Division established an information system on manpower levels which was used to keep new recruitment under control. 5.9 As a result of these measures, retrenchment of civil service personnel was close to target.Z/ 'he conduct and implementation of management reviews and job inspections has contributed to major increases in Civil Service productivity. The rebuilding of MSD's capacity has enabled the OHCS to reestablish itself as an effective central agency for inducing Ministries and Departments to improve their performance as shown in the Ministry of Agriculture. Work was completed on the design of the new simplified pay and grading structure and further work was undertaken on the introduction of a merit pay system. Training 5.10 Project training was handled by both the implementing agencies and by SAPSEC. Over US$1.1 million were allocated to training (compared to the original budget of US$364,000). It was envisaged that MFEP would use most of the training resources and IDA therefore strongly suggested that MFEP have its own training officer, who was to coordinate with the SAPSEC training officer. Initially, this component suffered from management inefficiency as budgets were not always submitted by SAPSEC for IDA approval or the amounts paid to trainees exceeded the approved budget. Guidelines for improving the implementation of the training component were then agreed upon with IDA. Training programs were initially skewed toward overseas training covering over half of the training budget, and mostly benefiting NRS.2/ The Government then decided to give more emphasis to local training. A total of 17 training courses were organized locally by SAPSEC, 12 of which in computer literacy and the rest in customs enforcement and comprehensive tax administration. In 1989 an observation trip to Kenya by staff of the Budget Division was organized to discuss the Kenyan budget rationalization program, including computerization, expenditure monitoring and control, budget preparation, and aid management. Overall, training appears to have contributed significantly to improved management capacity of various agencies, especially NRS, OHCS and the Budget Division of MFEP. An evaluation of this component indicated that some 50 percent of those receiving training asked to be given more responsible jobs. 2/ By the end of 1987, some 11,300 civil servants had been retrenched compared to the target of 15,000. A furher 12,000 were removed from the payroll in 1988, however, recruitment of some 25 percent of the number of redeployed took place, although many of those recruited were people with scarce skills. The retrenchment program was implemented smoothly under SAC 11 with almost 14,000 staff being laid off in 1989 and slightly over 12,000 in 1990. 2/ The Government PCR makes no mention as to why NRS used the training resources much more heavily than MPEP.  -8- Studies and Advisory Services 5.11 Studies. One of the major studies financed under SAIS was the Cocoa Pricing Policy study. The study influenced the Government to start a system of producer price incentives and trim the operational expenses of the Ghana Cocoa Board. Progressive increases in the share of the producer price in the export price were achieved during the implementation of both SAC I and II, reaching 47 percent in 1989/90, although short of the long-run target of 55 percent. The Ghana Living Standards Measurement Sw,ve (GLSS) was the first phase of the Household Survey Programme. The survey, undertaken by the Ghana Statistical Service (GSS), started early on, and has been used to monitor the impact of the ERP reforms on various social indicators. One of the outcomes of the GLSS was the publication of the Statistical Abstract, which in 1989 was used to determine minimum wages. 5.12 Advisory Services. The Skldls Mobilization Scheme was a means to attract qualified consultants to work in tasks related to the ERP. A condition of disbursement for this component, was the prior agreement between IDA and the GOG on a detailed implementation arrangement. However, IDA was unable to approve the scheme (under relaxed procurement procedures) primarily because the fees proposed for local consultants were considerably in excess of the rates in the Staff Appraisal Report (US$1,000-1,500 per staff-month for local short-term consultants and $300 per staff-month for local long-term consultants). The Skills Mobilization Scheme (SMS) facility was therefore used only once.A/ Local consultants and returnees were hired under regular IDA procedures since the contracts were for amounts over $5,000. Economic Management Support Project (EMS) 5.13 The EMS supports furither reforms in institutional development and administrative capacity of key agencies. Specifically, EMS aims at strengtening the capacity of the Government to formulate and implement economic policies and reforms associated with the SAP. Several activities initiated under SAIS continue to be supported under EMS: (i) restructuring of the Policy Analysis Division; (ii) further improvements in budget preparation and the installation of a more refined computerized system; (iii) introduction of the PIP into the budget; (iv) linking the debt with aid management; (v) improvements in the ASYCUDA system; (vi) continued reforms in salary scales and regrading, implementation of these reforms and introduction of a merit pay system; and (vii) further support for MSD, job inspection units and redeployment activities. 6. Cofinanldng 6.1 The project was cofinanced by ODA. Throughout the life of the project, relations between ODA and the Bank were marked by a high degree of cooperation and coordination, resulting in a very successful integration of assistance. This complementarity of efforts allowed each agency to provide support in those areas where they were best able to do so. In each joint undertaking, ODA financed external consultancies and/or foreign training costs, while the Bank picked up the local costs. 6.2 The main areas of collaboration were accounting and budgeting, tax administration, and civil service reform. Assistance from ODA in budgeting and accounting consisted of overseas training; financing for a study to identify measures to strengthen the budget process; and 4/ The CGovernment PCR refers to the early demnse of the Slills Mobilization Scheme, however it does not discuss why the SMS did not work.  -9 - financing for a Technical Cooperation Officer to draw up and implement a five-year training program for staff of the Controller-Accountant General's Office. In tax administration, ODA financed external training and the services of an expatriate expert for an in-ountry, in-service training program intended to improve tax collection and enforcement techniques and to ensure effective use of computerized systems in the revenue agencies. In the area of civil service reform, ODA provided consultant support for the design and implementation of the civil service reform program. The SAIS project financed the cost of training facilities, local experts, teaching aids, vehicles, equipment and supplies, incremental, recurrent and maintenance costs, and all local expenditures relating to job inspections. 7. Project Sustainability 7.1 In terms of building institutional capacity, agencies like NRS, OHCS and, to a lesser extent, the Budget achieved improvements in the skill levels, procedural approaches, and general operating efficiency. However, this improvement was not generalized to many other government agencies. Several reasons could be attributed to this result, one being the fact that often trainees were not always utilized effectively. The Policy Analysis Unit never really took off under SAIS, for various reasons, inter alia, the unwillingness of the Government to give it the necessary importance; jealousy toward returning Ghanaians who would be recrited at a substantially higher pay than the rest of the civil service; and the absence of financing for external training of local economists. Finally, failure of the ELU to function as envisaged prevented an improved process of policy decision-making in Ghana. 7.2 To enhance the self-sustaining capability of the Civil Service, the ODA-financed consultants produced a set of organization manuals, policy guidelines and procedures, which have been key contributions to effective management of the Civil Service. Another important contribution to this goal of sustainability is the input of local consultants and trainers. The launch of the IPPD project has given a boost to local computer consultants acting as sub-contractors to the ODA consultants. The local consultants have also completed an assignment to assist OHCS with its efforts to develop an interim personnel database. Other local consultants ran training courses in computer skills for civil servants and assisted OHCS with the introduction of the revised performance appraisal system and the Ministry of Health with the implementation of new staffing guidelines. 8. Bank Performance 8.1 The project allowed for sufficient flexibility in the allocation of funds. This approach was appropriate, given the changing economic environment. However, the built in design flexibility, while extremely beneficial to the Government, necessitated intensive supervision on the part of IDA staff, and would not have worked successfully without the flexibility of cofinancing provided by ODA. The implementation of the project also benefitted from an amicable dialogue between the country team, including the Ghana ]Resident Mission and the PNDC Secretary of Finance and Economic Planning. On IDA's side, responsibility for the management of this credit during its entire life was in the hands of the same country team members. The Country Economist was also involved in the design of the follow-up Economic Management Support project. This continuity allowed for full understanding of the problems involved in implementing technical assistance and very open communication between the Government and IDA. IDA supervision missions effectively advised the Government in various aspects of implementation, especially in areas related to procurement, management of the special account and training, all leading toward achieving the targets of the ERP. The establishment of the EPU and ELU, however, was overoptimistic given the political reality of the country.  -10- 9. Borrower's Performance 9.1 The borrower complied with the essential legal and financial conditions and covenants of the credit agreement. The release of counterpart funds was timely. There was lack of interest by the Government in making the EPU and ELU operational. The implementing agencies showed special interest in the project specially because it provided the greatly needed logistics to allow them to perform their functions. 9.2 Overall performance of the project management was less than satisfactory. Serious problems in the management of the Special Account, procurement, and accounting required substantial supervision effort from IDA. The purpose of the special account was to ensure continuous funding for the project, however, shortages of funds in the special account were frequent because replenishment were not made on a systematic basis. Record-keeping for the PPF special account was not efficiently organized. Procurement procedures were not being followed both for goods and consulting services. The move of SAPSEC from the Ministry of Fuel and Power to MFEP in late 1990 improved the coordination with MFEP and a computer- based accounting and monitoring system helped improve the management of the Special Account. The Government's decision to require the Ghana Supply Commission to handle all procurement diminished the importance of SAPSEC as the implementing unit. By mid-1991 the management of the project was transferred to the World Bank Desk in MFEP. 10. Project Documentation and Data 10.1 The project covenants were clearly stipulated for effective implementation. SAPSEC was expected to prepare monthly progress reports to the SAP Team, but this only occurred in the beghining, and was mainly due to the fact that the SAP Tearn only met a few times and eventualy disintegrated because of a lack of coordination. Reports on procurement and accounting were of low quality, but IDA's frequent supervision was important in improving the quality of SAPSEC reports. The work programs prepared by the implementing agencies effectively focussed support on activities crucial to implementation of the stmctural adjustment program. 11. Conclusions and Lessons Learned 11.1 The general objectives of strengthening the policy and management capacities of the core agencies in charge of the structural adjustment program was partially met by SAIS. Under SAIS and the first and second Structural Adjustment Credits, useful improvements in capacity occurred in respect of public investment programming, external debt management, tax administration, and civil service reforms, as well as in the capacity to track the impact of the ERP on the poor. 1 1.2' Although many people were able to use their training effectively in more responsible jobs, in general, the technical and managerial capacity of the relevant units did not show sustained improvement. Decision-making remained centralized. Little use was made of the project outputs. The expectations for strengthening of capacities were probably too optimistic, and failed to take into account the problems with reforming ..to civil service. In addition, the Government was unable to retain the staff that had been trained, because of poor civil service salaries. Thus the lessens from this experience in designing future assistance in this area are: (a) The project should ensure that those trained are assigned to the relevant and more responsible jobs, base on performance with salary supplements, until civil service reform is completed.  - 11 - (b) A cleau understanding of the socio-political framework and sufficient consultation with the authorities would avoid overdesign of project components and wasted efforts as was the case for the ELU and the EPU; (c) The Bank should support an independent initiative for policy analysis such as the newly established Centre for Policy Analysis, which will do non-partisan economic research and is supported by the Government. The Centre should play an advisory role not only to high-level government authorities but also to technicians responsible for policy analysis; (d) Economic analysis capacity within the Government is urgently needed in Ghana Provided that there is government commitment, the Bank should continue to assist in recruiting, training and retaining skilled staff in the Policy Analysis Division of MFEP as well as in developing analytical capacity within the sector ministries and the Bank of Ghana. The Centre and government agencies should work in a coordinated fashion. (e) The impact of technical assistance projects such as SAIS is limited by the willingness of decision-makers to utilize the outputs of the project effectively. Greater coordination between decision makers and technicians would contribute to efficient policy decision-making in Ghana, and the Bank should exert its influence to bring that coordination about. (f) The Government should create an environment in which Ghanaian economists feel that they have an opportunity to contribute to improved policy-making.  - 12 - PART Il PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE 1. IntroductIo Project Objecdves 1.1 The objectives of the program as outlined in the Staff Appraisal Report on the SAIS were to: (a) strengthen economic and policy analysis, formulation and coordination in the MFEP and the Office of the Head of State and Government (the Castle"); (b) improve economic management, especially public investment programming. expenditure control, revenue mobilization, debt management and aid oowrdination; (c) increase civil service productivity through retrenchment of surplus staff, establishment and sound management and personnel system in the public service, and an incentive-onented public service salary policy, (d) undertake studies to help prepare, implement and review policies, programs and projects tied to the structural adjustment process and provide short- and long-term advisory services with special emphasis on mobilizing skilled Ghanaians to undertake these tasks, through a Skills Mobilization Scheme; and (e) monitor the impact of economic policies on vulnerable population groups through a lhving standards measurement survey. 1.2 These objectives were to be achieved through financing Ghanaian and non-Ghanaian exertise, equipment and training to strengthen policy and management capacities of the core agencies in charge of the ERP. 2. Taining Objeces 2.1 The major objective of the training components of the SAP (SAP) was to enhance existing skills within the agencies charged with the implementation of various programs and policies defining the SAP. 2.2 A budget of $284,000 for the program gave cognizance to the fact that the quality of skils needed for the implementation of the program was a critical success factor toward the attainment of the objectives of the program. To pursue these objectves effectively the post of a Training Officer was created within the Project Management Unit (PMU) -the Structwal Adjustment Program Secretariat (SAPSEC). 2.3 However, a derivative, in part, of this recognition was the Skis Mobilization Scheme. The scheme, in the main, was a skills dearth-induced arrangement to recruit resident and expatriate Ghanaians to provide the needed expertise for the tasks of the SAP.  - 13 - Dhrctlon of Traling Progm 2.4 The responsibility with the position of a Training Officer at SAPSEC was the coordination and monitoring of the training programs for the various agencies responsible for the implementation of the SAP. 25 The agencies and their actirities listed below provided the outline from which specific training programs were drawn. (a) Pubfic Investm Program (PIP): a 3-year rolling development budget called for personnel with adequate skills in project preparation, analysis and evaluation; (b) Budget Division: concems over prevailing budgetary processes and procedures were to be redressed by restructuring the division and injecting appropriate skills leading to a more systematic budget preparation and monitoring. (c) Aid Management: the implementation of an agreed schedule of activities to translate pledges into disbursements; simplifying donor/government procedures covering agreements, and effectiveness and disbursement of aid. (d) Debt Managemnt. improving and rationalizing debt management. (e) National Revenue Secretariat: fresh recruitments to complement a major restructuring of central government tax-collecting institutions, leading to an improved revenue mobilization, engendered a training program to update eisting skils and also provide the requisite skdlls with respect to fresh recruitments. (i) Civil Serice: the need for a restorative shift toward a vibrant and efficient civil service gave focus for a training program that could provide, within the service, skills for the development of a sound civil service management system: an efficient personnel management system; and a strong staff inspection capability to relate manpower levels to functions on an ongoing basis. 2.6 During the first half of 1987, local and foreign training institutions capable of addressing these needs were identified. The training program therefore dichotomized into local training and foreign training. I Tal l ng 2.7 The GIMPA and the Management, Development and Productivity Institute (MDPI) which offer a wide range of courses in both public and private sector management conducted a number of programs between 1987 and 1989. 2.8 In June 1987, GIMPA organized a seminar on the preparation of the 1988 public investment program, which was attended by officials of the implementing agencies and other institutions involved with the public investment program. 2.9 A Program Identification and Implementation course was run by the MDPI from July to August 1988 for a number of officials from the MFEP. 2.10 From January 1989 to March 1989, GIMPA again organized a course on Capital Budgeting for budget officers from the MFEP.  - 14- 2.11 Aside from GIBA and MDPI, much of the local training was in the direction of computer literacy. The awareness of the computer's immeasurable role toward operational efficiency in today's work environment provided the raison d'tre for the upswing of requests for computers from the implementing agencies. 2.12 To cost-justify their acquisition through optimal value from their use, a large number of computer users, spanning policy-makers through top management and mid-career personnel to support staff were provided computer training during the project period. Participants of these courses even included some PNDC Secretaries. Attempts to get all senior officials of the implementing agencies involved in the computer literacy training program did not materialize due to pressure of work on some of these officials. 2.13 Computer training centered on the use of applications software such as the spreadsheet, word processing and database management programs. 2.14 These courses were offered by marketing agents for computer brands (supplied to SAPSEC) and software development houses A list of these are: Masai Developers Ltd. - IBM Reiss & Co. - ICL Computer Data Systems - Hewlett Packard Compu-data Service - Compaq NCR - NCR Advanced Computer System - Software House Infoconsult - Software House Megasys - Software House 215 As part of efforts to enhance supporting staff skills, a course to retrain typists was organized in June 1988 by the Government Secretarial SchooL 216 Over time, budget allocation for local training had over 90 percent of it taken by computer training for over 700 people. Each participant had an average of 45 hours of training sessions. Foreig TaiDig 2.17 Training requests contained in work programs for implementation in 1987 and 1988 incautiously stressed foreign training. projections arising from these requests, not unexpecedly, were in excess of available budget. 2.18 However, at the request of the PNDC Secretary for the NRS, a substantial part of the funds allocated to the revenue institutions under the project for equipment, etc., was made available for training. Thi therefore made it possible for a large number of personnel identified to play key roles in the revenue mobilization efforts to attend courses abroad. 2.19 The extensive restructuring in the IRS and in the Customs, Excise and Preventive Service, pointed out earlier, imperatively called for analytical skdlls to examine and review exnsting tax policies and strctures, and additionally to formulate new ones needed for the realization of the underlying objectives of the restructuring.  .15- 2.20 Furthermore, a new kind of management capacity was needed to ensure their efficient operations in light of their being divested off the civil service apparatus. 2.21 Courses that personnel from these institutions attended were in the areas of Tax Administration, Customs and Excise Development, Computer Applications in Tax Administration, Contract and Commission Law, etc. 2.22 The Harvard Institute of International Development's program on Investment Analysis and that on Budget and Fmance were attended by some staff from the Budget Division. Staff from the PIP implementing agency also attended a course in Project Planning and Appraisal at the same institute. 2.23 To achieve the objective of improving and rationalizing debt management, personnel from the Debt Management Unit were provided training in the UK in the use of the Commonwealth Secretariat's computerized Debt Record Management System. The use of the system has significantly assisted in the areas of debt recording and general management of debt in the country. 2.24 Toward the end of 1989, the impact of the cost of foreign training on the total training budget drew much concern from Government. Subsequently foreign training was defocused, and emphasis shifted on in-country training programs, which were expected to have a multiplier effect 2.25 In consonance with the new focus, proposals for a program to provide training locally for Customs. Excise and Preventive Service and Internal Revenue Service by Crown Agents were submitted in January 1991. The proposals were accepted, and scheduled for implementation in September 1991. 2.26 The main objective of the program was to develop a corps of staff within these institutions to conduct ongoing training programs. The program is dubbed Training the Trainer. 3. CUosltsncy Object}ves 3.1 The objective underlying the provision made in SAIS for consultancy or advisory services was to provide a fill-in for the implementing agencies which did not have the requsite skdlls to execute programs they were charged with. Additionally, sidelights of these programs, which were perceived to be very relevant to attaining fundamental objectives of the programs, were to be addressed by the use of consultancy services. Skills Mobilizatioin Scheme 3.2 The Skills Mobilization Scheme was set up as a vehicle for the mobilization and retention of the needed manpower for SAP implementation. 3.3 The thrust behind the scheme was to obtain specialized local and expatriate Ghanaian skills at a cost below that of non-Ghanaian consultants, without sacrificing quality. A part of this thrust was the conviction that resident and expatriate Ghanaian nationals had a better understanding or knowledge of issues that uniquely pertain to Ghana.  - 16 - 3.4 Proposals or recommended action programs were therefore going to be adaptive enough, leading to a comparative ease of implementation. Recritment aDd Remunentiom 3.5 The early demise or the ephemeral existence of the Skills Mobilizaton Scheme immensely reduced the projected level of consultancy service, therefore marginalizing the role of SAPSEC in consultancy recruitment It is pertinent to point out that the Scheme did not go beyond the recruitment that was carried out to till the position of head of the then newly created ELU at the Castle in 1988. 3.6 Furthermore, this development rendered irrelevant a Consultancy Selection Committee which had been instituted, for which, together with a set of proposals sought to establish a framework for the recruitment and remuneration of consultants under the scheme and equally importantly outside the scheme. 3.7 The proposals were fundamentally based on 'World Bank Guidelines Regarding the Use of Consultants under Bank-Fmanced Projects" 3.8 The Consultancy Selection Committee was set up as a body of experts and officials to assist an Implementing Agency requesting consultancy service. The Comnmittee's responsibility was to conduct the selection of a consultant for tte implementing agency in question. 3.9 Following the demise of the scheme, the procedure for the recruitment of consultants therefore changed. It began with a need-identification of the cosultancy by the Implementing Agency. lhis was followed by a request from the Implementing Agency for proposals from consultants, and ending with the selection of the consultant, that needed to be reviewed by the World Bank, depending mostly on Terms of Reference, contract proposals, etc. 3.10 The documentation on the process was forwarded to SAPSEC for onward transmission to the World Bank for purposes of review. Besides the remuneration that it had responsibility for, SAPSEC effectively operated in this respect as a condur. ta the consultancy recruitment process. Prvision of Servic 3.11 A total of 11 major consultancy services was provided during the project period at tile cost of $934,676. Ten of the consultancies were provided by individuals and two by firms. Three of the consultancy services were provided drectly to SAPSEC. These are the Evaluation of the SAIS Training Program, the development of a computerized accounting system, and the program coding for analyzing details of project accounts. 3.12 The Cocoa Pricing Study, which cost a total of $115,192 and accounted for 12 percent of total expenditure on consultancy, was to "prepare an assessment of the market acceptance of cocoa beans fom Ghana and advise on a strategy for sustaining and enhancing market acceptance.' It was also to "develop a comparative (ie., cross-country) analysis of cocoa production costs in recent years including all major producing countries.e  - 17 - 3.13 As a lky input to the study, a field survey and data collection was carried out by a local consultant on the team for the 'development of a multi-period agricultural sector model of Ghanas ITe consultancy also involved the training of Ghana Cocoa Board staff on "Cocoa Pricing Study Methodologies." 3.14 Consultancies on the impact of the severity of the Adjustment Program on vulnerable groups in the context of the GLSS were also undertaken. 4. P e t Objetie 4.1 Logistics provided for in the Development Credit Agreement No. 1778-GH were to aid the effective implementation of the defined tasks as well as refine existing procedures prescnrbed by spedfic policy and program objectives of the SAP. 4.2 The long-term objective, however, was to establish an institutional capacity that could sustain the SAP by strengthening economic management functions and effecting reforms in the civil service apparatus. Gutdelnes 4.3 In order to ensure that procurement decisions by SAPSEC and the implementing agencies were in conformity with the objectives for the provision of logistics, broad guidelines governing the procurement of goods for the project were provided. These were set out in the provisions of Schedule 3 of the Credit Agreement. 44 A more detailed set of provisions which outlined vanous procurement procedures were, however, provided by the "Guidelines: Procurement under IBRD Loans and Credits." 4.5 The specific details relating to issues of the rights and obligations of SAPSEC on one hand, and suppliers on the other, that relate to common procurement concerns like quality of service, excess payments and delivery schedule, were to be indicated by the provisions of the bidding document for award of contract. These provisions were to take cognizance of the contents of the "Guidelines: Procurement under IBRD Loans and Credits." Supplies 4.6 Logistics needed for the implementation of the project were listed in Category 3 of Schedule 1 of the legal agreement. These were detailed as equipment, materials, supplies, and vehicles. Items considered as critical for certain implementing agencies were indicated in Schedule 2 of the legal agreement. 4.7 In the course of the implementation of the project, the following constituted the main logistic supplies: Typewriters UPS and stabilizers Computers-personal computers (and laptops), computer accessories Vehicles-saloon cars, cross-country, motor-bikes Air conditioners  - 18- Shredders Calculators Filing cabinets Stationery Photocopiers Duplicating machines Projectors Generator Radio communication equipment Audiovisual aids 4.8 The procurement of these items, which were based on the guidelines provided, was through international competitive bidding, local competitive bidding, local shopping and direct contracting as the case required. 4.9 The provision of logistics was initially restricted to MNEP, the NRS, Office of head of the Civil Service, Chairman of Committee of Secretaries (COS), and the GSS. The Controller and Accountant-General's Department was included so as to carry out a reorgaization of its data processing operations as part of the arrangement to improve the national budgetary system 4.10 However, during the project's implementation phase, a number of institutions identified as key instruments for the successful implementation of SAP became beneficiaries of the credit These agencies which included the Registrar-General's Department, the Audit Serice and the Ministry of Local Government were not listed as implementing agencies at project start-up. 4.11 Aggregated figures and calendar year totals for some of the listed supplies are provided below: Total 1987 1988 1989 1990 1991 Computers 100 37 18 3 13 29 Vehicles 102 36 5 48 13 0 Typewriters 345 36 10 43 256 0 Air conditioners 86 22 0 19 34 11 UPS and stabilizer 137 0 15 28 7 87 Duplicating machines 59 0 0 9 50 0 4.12 In July 1989, Government directed that procurement of al items, excluding non- standard items, be carried out by the Ghana Supply Commissio. Tbis directive became law in 1990 (PNDC Law 245). Pmcement Plans 4.13 As implied by Article m of the Credit Agreement, SAPSEC had the responsibility of drawing up procurement plans from the logistics requested by the implementing agencies.  - 19- 4.14 These requests were to be included in the work programs for the ensuing year, and SiAPSEC was requested by Schedule 5, Part IA, of the Credit Agreement to assist in their preparation. Logistics requests were to be reviewed to establish relevance or need and budgetary support. 4.15 The absence of a procurement plan in 1987 was in part due to the fact that the project was launched in mid-year (May 1987). The drawing up of any meaningful procurement plan from the tentative work programs became difficult. Mixed-up functional roles of staff of the just established SAPSEC, that took some time to sort out, were a major reason for the inability to draw up the plan. 4.16 The assumption of responsibility for procurement plans by Bank staff was a move toward closer oversight of procurements and disbursements to ensure the expeditious provision of logistics to implementing agencies, savings from bulk purchases and certainty of the need for requests. 4.17 The Bank from 1988 evolved procedures that involved discussions between implementing agencies and Bank missions to establish logistics requirements. 4.18 Following these discuions, procurement plans in the form of an agency-item matrix were drawn up by Bank staff for implementation and monitoring by SAPSEC with the actual procurement effected by the Ghana Supply Commission. S. Observations and Conclusions Design and Implementation 5.1 The SAIS project, designed in the context of the SAP, became effective in May 1997. The pre-effective period covered the 19 months from October 1985 to May 1987. 5.2 The project was to provide needed skills and logistics to implement the improvement of the existing incentive framework; strengthening the capability of economic management and other institutions in the formulation of policy, and the implementation and monitoring of programs. 53 The original project design was altered to accommodate a view by Goverrment which sought to ensure a better integration of the SAIS and SAP programs. The functions of SAPSEC were therefore redefined to cover, in addition to the provision of logistics, implementation of the Skills Mobilization Scheme and a training program, and the monitoring and coordination of the SAP. 5.4 A three-tiered structure defined a broad management apparatus for project implementation. The SAP Team provided the overall supervision and direction to the project. It also served on the one hand as the conduit between SAPSEC and the implementing agencies, and on the other, the Chairman of the Committee of Secretaries (COS) and the PNDC. 5.5 The management of the program on a day-to-day basis was the responsibility of the SAPSEC, which was under direct responsibility of the SAP Team.  -20 - 5.6 Project implementation at the level of the implementing agencies was provided by the liaison officers They had the responsibility of drawing up w, rrk programs which were to be implemented to attain SAP objectives. These work programs were, however, to be reviewed by SAPSEC, the SAP Team and the IDA. 5.7 The redefinition of functions of SAPSEC arising from the alteration in project design, brought about an effective integration of the various constituents of the program. The axal role of SAPSEC offered a reliable window for project status for the SAP Team. 5.8 The project, in broad terms, was implemented through monthly status reports arising from visits to implementing agencies by officials from SAPSEC: bimonthly meetings of officials of SAPSEC and liaison officers of the implementing agencies; and quarterly meetings of the SAP Team with officials of the SAPSEC and liaison officers. 5.9 These meetings provided periodic review of the global status of the SAP and SAIS. Major implementation problems were addressed during the meetings. 5.10 A directive by Govermnent in July 1989 effected the devolution of the functions of coordinating and monitoring to the MFEP SAP Coordinating Unit This informal unit was essentially an instrument for the assemblage of individual SAP implementation units within MFEP. 5.11 The concem expressed by Government on the scale of foreign training, the directive for Ghana Supply Commission to take over the direct procurement of major supplies, and the early demise of the Skills Mobiition Scheme combined as factors to scale down very considerably the functions of the SAPSEC. SAPSEC was therefore sized down, in terms of staf, to be commensurate with the reduced functions. 5.12 These developments cleaved existing project implementation linkages and reduced to irrelevance and subsequent disintegration the project management system outlined above. Overall SAP management became less effective; SAIS implementation brought greater stress on residual staff as SAPSEC turned out to be woefully understaffed. 5.13 A degree of flexibility of project scope extended the project to cover the Ministry of Local Government, Registrar-General's Departme ' the Audit Service, Ghana Export Promotion Council, etc. 5.14 Vehicles and trekking equipment were procured for the Mobile Planning Unit of the Ministry of Local Government to aid in the execution of the Decentralization Program. 5.15 The computerization of the Registrar-General's Department and the computer training for its stafE, for example, have been a major complementary effort toward improved revenue mobiizafion. 5.16 The Audit Service is currently engaged in a training program coveting the use of modern techniques in auditing and computer usage. The objective is to improve skills for an effective role in fiscal management.  - 21 - Perhrunce of Ban 5.17 The Bank's effective and regular supervision of the project reflected its clear understanding of the objectives outhiing the program design and focus. 5.18 Besides the four missions preceding program launch in May 1987 and the visit by the Regional Vice President, Western Africa, in July 1987, a total of eight SAP/SAIS missions took place. 5.19 In spite of occasional expressions of paternalism by Bank staff, excellent rapport was developed oetween Bank mission staff and officials managing and implementing the SAP/ SAIS program 520 Participation in meetings of SAPSEC and liaison officers by mission staff during missions, detaied discussions with Ghanaian officials over SAP/SAIS, review of work programs and logistics requests, and meticulous examination of SAPSEC documentation and disbursements brought about the appreciable st-scess of project implementation. Development Impact 5.21 The training programs conducted provided participants with increased analytical skills, and knowledge of new techniques and procedures. The general skdlls enhancement that spanned policy-makers to supporting staff added immeasurably to the human resource capacity of the civil service. 5.22 A study on the SAIS Training Program in September 1990 indicated that resulting from foreign training "50 percent of the beneficiaries have been given added responsibilities since they attended these courses" (Report on the Evaluation SAIS Training Program). 5.23 Computer training programs conducted in the early part of the project's implementation heightened the awareness and promotion of the use of information technology applications. 5.24 A request for budgetary support for increased demand for local computer training was approved by the Bank The resulting increase in the effective and efficient use of computer systems has increased productive man-hours. 5.25 Computer procurement for the project did not appear particularly to address issues of capacity utilization and price competitiveness. Government expressed concern over the issue by setting up guidelines for computer acquisition by all state institutions and agencies. The seemingly endless decline in prices of computer systems in the PC industry are now reflected, as a result of these guidelines, in the procurement of computer systems. The increasing affordability is helping to mechanize a number of activities in several government agencies outside the civil service. 526 Though the up-beat projecion made for consultancy services for the project turned out not to be the case, due to a number of difficulties, formulations made in respect of it influenced in large measure the establishment of a project to redress the absence of a clear national policy on the recruitment and remuneration of consultants. The UNDP is currently funding this project-UNDP Project GHAM8/002-which is primarily to develop a local consultancy car -ity.  -22- 5.27 The project has so far helped establish fee structures for local consultants and also created formal consultancy uluts in the country's universities. While these structures provide sources for the augmentation of remuneration for university teachers and stem the tide of the brain drain, specialized skills are readily available for the multi-sectoral projects being executed. 5.2 The SAIS project has, on the whole, through manpower enhancement and logistics, revitalized key segnents of central government machinery.  - 23 - PART III: STATISTICAL INFORMATION 1. Related Bank Credits Year of Credit Title Purpose Approval Status Public Enterprise T.A. (Cr. Technical assistance/ 1987 Will be com- 18470-OH, US$10.5 million) institutional support to SEC pleted in 1994 for the implementation of the public enterprise reform program. .l Export Rehabilitation Technical Develop the capacity of key 1984 Closed in 1988 Assistance (Cr. 1436-GH, organizations to carry out US$17.1 million) the Export Rehabilitation Project. l Economic Management Support Strengthening the capacity 1991 Will be com- Project (CR. 2224-GH, of the Government to form- pleted in 1996 US$15.0 million) ulate and implement eco- nomic policies and reforms associated with the SAP. First and Second Structural Support of trade liberaliza- SAC I 1987 SAC I was com- Adjustment (Crs. 1777/A- tion; an incentive frame- SAC II 1989 pleted in 1990 025/A-025-1-GH & 2005/2005- work for cocoa producers; and SAC II in 1/2005-2-GH, US$139.9 and improved resource use 1991. million and US$136.3 million) in the public sector. SAC II had greater emphasis on tax reform and private sec- tor development.  - 24 - 2. PIrolect Timetable |__ _ __ Date Planned Actual Date Identification 3/86 5186 Preparation 6/86 7/86 Appraisal Mission 10/86 10/86 Credit Negotiation 2/87 2-3187 Board Approval 2/87 4/87 Credit Signature 3/87 5/87 Credit Effectiveness 6/87 7/87 Project Completion 12/92 6/91 Credit Closing 6/93 6/93 3. Credit Disbursements (Cumulative) (US$ million) Actual as % of IDA Fiscal Year Appraisal Estimate Actual Estimate 1987 0.6 1.11 185 1988 2.3 3.34 145 1989 4.9 6.12 125 1990 7.5 8.36 111 1991 9.9 11.23 113 1992 10.5 11.40 108 1993 10.8 11.40 106  - 25 - 4. Allocation of Loan Proceeds (US$ Million) Actual as Appraisal percent of Category estimate Actual appraisal 1. Consultant's services & studies A. For PMU 0.14 0.18 129 B. For SMS 1.05 0.00 1 C. Other 3.50 0.72 21 2. Training 0.36 1.15 319 3. Equipment, material, housing & vehicles A. For housing 0.30 0.33 110 B. Other 2.55 7.56 296 4. Operating & maintenance costs 0.50 0.99 198 5. Refinancing of PPF 0.75 0.42 56 6. Unallocated 1.68 0.00 0 H Total 10.80 11.40 106 Note: Totals may not add due to rounding.  - 26 - 5. Project Results Score Components Objectives Results /a Econonic Policy lMangentl EPU (MFEP) Rebuild MFEP's capacity to ana- The Unit was understaffed and did I lyze policy issues and advise the not fully comply with the terms of Govermment on the appropriateness reference, mainly because the of policies. Govemment had no interest in the Unit. ELU (Prime Improve policy decision-making ELU did not comply with the terms Minister's Office) process. of reference and had a short life. Budget Division, Establish systematic budget prep- Partial computerization of the budget 4 IPAD and PRD aration and monitoring procedures process and improvements in budget (MPEP) in the Budget Division. IPAD and preparation permitted early PRD to assume fuR responsibility publication of the budget. PRD was for drawing up a rolling three-year eliminated and IPAD strengthened. PIP. Rolling three-year PIP started in 1988. IERD (MFEP) Assume responsibility for debt CFTC consultants installed the 3 management. Maintain a data DRMS system in 1989. Link was system for project aid and dis- not done. bursement information and link it to debt management. NRS NRS was to return to MFEP. ASYCUDA system was installed. A 4 Improve the information base for local consulting firm developed a income, customs and excise taxes system for the sales tax and linked it through computerization and with ASYCUDA. training of staff. Public Serice Productivity OHCS Strengthen the staff inspection A requirements study for the 3 function and personnel manage- installation of the IPPD was ment information systems. Join prepared by ODA-financed consult- the administrtion of personnel ants. In the meantime, an informa- with that of the payroll to reinforce tion system on manpower levels was internal checks on the payroll. started which helped keep recniit- ment under control.  -27 - Score Compouents Objectives Results /a OHCS and Carry out a staffing and functional MSD of OHCS was strengthened 4 Ministry of review and establish a coherent and job inspections have contributed Mobilization and redeployment program. to a more productive civil service. Productivity Reduce the size of the civil Civil service was reduced according service. to targets, but little retraining of redeployees took place. Studies on salary Help formulate salary policy. A Pay and Grading report was 4 policy. (OHCS produced by ODA-financed consult- PIB) ants in conjunction with PIB which was the basis for initiating the decompression of the salary struture and a regrading exercise. Structal Adjustment Studies and Advisory Services Studies Execute studies in Support of the The Cocoa Pricing Policy study 5 l SAP. induced the Goverment to take policy actions toward improving producer incomes through price incentives. Advisory Hire qualified consultants to work The SMS was the scheme to be used I Senrices in tasks related to the SAP. for this purpose, however it never really worked. The SMS facility was used only once. Poverty Monitor the socio-onomic impact Various impact stidies were done. 3 Monitoring of the SAP at the household level. The Statistical Absact was used to determine minimum wages. The Statistical Service was reinforced. Training Strengthen economic institutions. Substantial overseas training took 2 place, mostly benefiting NRS. Some 17 training courses were offered locally, 12 of which in computer literacy. Except for a few, trainees were not effectively utilized. Overall Project Rating: 3.5 /a Relative uccess of attining objectives: 1 =poor, 2=mediocre; 3 =average; 4=good; 5=very good.  $ - 28 - 6. Status of Covenants [Articl@ Covenant Compliance Status 3.01 (a) Borrower's comnmtment to the Compliance objectives of the project. 3.01 (b) Maintain its SAP Team in a form and The SAP Team funtioned for a few with functions satisfactory to IDA. months only. There were problems of coordination among member ministers. 3.01 (d) Establish at. EPU and an ELU. The EPU was established but under- staffed, and has never worked efficiently. ELU had a short life. 3.05 Appoint a training officer to coordinate Compliance taining activities. 4.01 (a) aintain adequate accounts reflecting Project records were kept but not prop- the operations, resources and expendi- erly maintained. Performance improved tures telting to the project. labr in the project. PCR was presented to IDA. 4.01 (b) Perform annual audits of the records Compliance and accmts of (a), including the (i) special account. (tt) Fumish IDA a copy of such audit no Audits were submitted with delays. later than six nonths after the end of each such year.  - 29 - 7. Use of Bank Reources A. Staff Inputs (Staff weeks) FY87 FY88 FY89 FY90 FY911 FY92 FY93 Total Preappraisal 14.6 14.6 Appraisal 44.8 44.8 Negotiations 8.2 8.2 Supervision 4.0 29.2 34.9 15.9 11.5 8.2 0.4 104.1 Total 71.6 29.2 34.9 15.9 11.5 8.2 0.4 171.7 B. Mission Data No. of Speializtons Perfornce Types of Mission Date pers reprentd /a rating L problems Jc Appraisal 10/86 4 a,c,c,e - Supervision 1 10/87 3 a,a,b 2 M Supervion 2 2/88 2 as,a 2 M Supervision 3 6-7/88 2 a,b 2 F,M Supervision 4 3-4/89 4 a,b,c,d 2 F,M Supervision 5 9/89 5 a,b,c,d,d 2 F,M Supervision 6 3/90 5 a,b,c,d,e 2 F,M,O Supevsion 7 10-11/90 2 a,b 2 F,M,O Supervision 8 1/91 2 a,b 1 M La a = Economist; b = Procurement/Disbursneent Officer, c = Information Systems Specialist; d = Budget Specialist; e = Civil Service Specialist. b1 = Problem free or minor problems; 2 - Modeat problems. /c F = Financial; M = Management; T = Technical; 0 = Other.