Guinea - Second Economic Management Support Project

Document of The World Bank FOR OMCLAL USE ONLY Repwt No. 12746 PROJECT COMPLETION REPORT REPUBLIC OF GUINEA SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) FEBRUARY 2, 1994 Country Operations Division Occidental and Central 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 disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency: Guinean Franc (GF) (Average - GF per US$) 1988 1989 1990 1991 1992 474.4 591.6 660.2 735.9 902.0 Fiscal Year January 1- December 31 ABBREVIATIONS AND ACRONYMS AfDF African Development Fund BCEAO Banque Centrale des Etats de l'Afrique de l'Ouest Central Bank of West African States CCEF Comiti de Coordination Economique et Financi6re (Economic and Financial Coordination Committee) CNPG Centre National de Perfectionnement A la Gestion (National Center for Management) DNIP Direction Nationale des Investissements Publics (National Directorate of Public Investments) DNSI Direction Nationale de la Statistique et de l'Informatique (National Directorate of Statistics and Informatics) ESAF Enhanced Structural Adjustment Facility FAC Fonds d'Aide A la Cooperation (French Aid Agency) IMF International Monetary Fund MEF Ministry of Economy and Finance Pagen Projet d'Appui A la Gestion de l'Economie Nationale (Economic Management Support Project) PMC Project Management Committee PREF Programme de Redressement Economique et Financier RMU Reform Monitoring Unit SAL Structural Adjustment Loan SGG Secretariat G6n6ral du Gouvernement (General Secretariat of the Government) UNDP United Nations Development Program USAID United States Agency for International Development  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.SA. Office of Dfrector-General Operations Evaluation February 2, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on the Republic of Guinea Second Economic Management Support Project (Credit 1963-GUI! Attached is the "Project Completion Report on Guinea - Second Economic Management Support Project (Credit 1963-GUI)" prepared by the Africa Regional Office, with Part II prepared by the Borrower. The goals of this technical assistance (TA) project were to support long-term institution- building while providing short-term remedies to weaknesses in national economic management. Approximately half the project's funds were allocated for resident expatriate specialists, the rest being for short-term consultants, equipment, operating costs, and training (including fellowships). The project design was complex, with many donors and project components. As the PCR notes, 'the need to implement the [economic reform program under SAC II] shifted attention away from long-term capacity building," with the consequence that many of the project's institutional development (ID) objectives were not met. In other words, the emphasis shifted away from ID to "substitution" TA. Part I of the PCR does not itself provide a sufficient basis on which to ascertain whether the overall project rating sbould be satisfactory or unsatisfactory. The failure to achieve important ID objectives would seem to warrant a rating of the project's outcome as unsatisfactory. But Part [l, authored by the Government, makes a plausible case that the project's achievements were in fact substantial and that, notwithstanding the shortcomings, there were a number of significant ID achievements. The project outcome is therefore rated as satisfactory overall, while ID performance is rated as partial and sustainability as uncertain. The PCR (Part I) gives limited attention to such fundamental issues as: the degree of Borrower commitment; the extent and quality of Borrower participation in design, preparation, and management; the quantity and quality of Bank supervision; the local incentive structure and the project's impact on that structure (and vice versa); the salary supplement issue; the quantity and quality of expatriate consulting and advisory services; and where the money went (as compared to how it was planned to be spent). The PCR does not, therefore, provide the kind of assessment which would have been desirable in helping to improve the design of a possible follow-up operation. An audit is planned. Attachment This documcnt 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.   FOR OFFICIAL USE ONLY REPUBLIC OF GUINEA PROJECT COMPLETION REPORT SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) TABLE OF CONTENTS Page No. Preface ................................ i Evaluation Summary ........................... iii PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE Project Identity ........................... 1 Background ............................ 1 Project Objectives and Description ........................... 3 Project Design and Organization ........................... 5 Project Implementation ......... .................. 5 Project Results ........................... 7 Project Sustainability ........................... 9 Bank Performance ........................... 9 Borrower Performance ......... .................. 10 Consultants Services ........................... 10 Project Documentation and Data ........................... 10 Attachment I: Matrix of Project Results ......................... 11 II. PART II: PROJECT REVIEW FROM THE BORROWER PERSPECTIVE PAGEN H Project Completion Report . .................... 15 II. PART III: SUMMARY OF STATISTICAL DATA Table I: Related Bank Loans ........ ............... 24 Table H: Project Timetable ....... ................ 25 Table Im: Loan Disbursements ........ ............... 25 Table IV: Project Financing Costs ............ ........... 26 Table V: Use of Bank Resources .......... ............. 27 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.   -i- REPUBLIC OF GUINEA PROJECT COMPLETION REPORT SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) PREFACE This is the Project Completion Report (PCR) for the Second Economic Management Support Project in Guinea, for which Credit 1963-GUI in the amount of US$ 14.5 million equivalent was approved on November 8, 1988. The expected closing date was June 30, 1994. The credit was fully disbursed and closed on February 8, 1993. Tiis PCR was prepared by the Country Operations Division of the Occidental and Central Africa Department of the Africa Region. The Guinean authorities have submitted their own assessment of the Project. This assessment is attached as Part II of this Report. This Report is based on (i) the findings of a completion mission which involved discussions with representatives of the Borrower, resident technical experts and their counterparts and (ii) the staff appraisal report, supervision reports, correspondence between the Bank and the Borrower, internal Bank memoranda, discussions with Bank staff previously involved in the Project, documentation and the Project Completion Report of the first Economic Management Project and the Project Implementation Monitoring System.   - jij - REPUBLIC OF GUINEA PROJECT COMPLETION REPORT SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) EVALUATION SUMMARY Project Objecies 1. The project was designed to support long-term institution capacity building while providing remedies to the weaknesses of the administration in economic management. Consolidating the results from the first economic management project of 1985, specific objectives of Pagen II were: (i) strengthening key economic management functions, including macro-economic planning and investment programming, public finance management, management of the civil service and administrative reform, economic and financial legislation, (ii) support to implement the Economic Recovery Program through better reform coordination and monitoring, (iii) strengthening of the Government's capacity to train civil service staff in economic and financial management. ImpIementation Eedience and Project Results 2. A first economic management support project (Pagen I) was implemented between 1985 and 1990. Results were mixed. Pagen I provided assistance for key economic management tools such as public investment program (PIP), budgeting and debt management, economic analysis and data base, main economic legislation and regulatory framework. However, the poor skill base of the Guinean civil service constrained the application of these new tools. Moreover, strong resistance from vested interests against transparent procedures further slowed down the pace of reform. In contrast, the training component of Pagen I was rather successful, as a local institution provided basic training in economic management. Overall, project sustainability was low as the administration remained highly dependent on expatriate technical assistance. Other shortcomings included: insufficient inter-departmental coordination within and among Ministries, unsatisfactory donor coordination, and dispersion of the various capacity building efforts. 3. To address the shortcomings of Pagen I, the second project was designed as a multi-donor umbrella operation, and aimed at strengthening internal project coordination (paras 7 and 8). In effect, donor dialogue improved and a better coordination of initiatives was achieved. 4. Main results of Pagen II include: (i) a more comprehensive economic and financial legal framework in the areas of procurement, taxation, customs, (ii) improvement in economic management regarding the PIP, the budget, debt management system, customs and tax administration, (iii) regular production of data and economic indicators, national accounts, (iv) streamlined management system for updating the civil service roster and pay rolls, (v) formal training in the local training center was provided to a total of 180 persons, with a success rate to the final examination of 86%.  - iv - 5. Overall project management proved difficult (paras. 20 to 25). A main reason was the complexity of coordinating several components involving different donors, different procedures and teams of experts. While it seemed necessary to integrate donors' activities, in hindsight project design was too ambitious given the past performance of the administration in project management. Another difficulty arose from the decision to include under project financing the updating of the civil service roster, previously supported by UNDP. This decision created a financial strain. Remaining credit funds were reallocated in February 1992, but were not sufficient to cover priority activities and altemative financing had to be identified. Moreover, the early full disbursement of the credit created a financing gap for 1993 and the need to identify bridge-financing before a new project could be put in place. In the event, the appraisal of the follow up operation was delayed. It was decided to make the definition of a possible third project dependent upon the results of this PCR. In the absence of IDA financing, most priority activities during the transition period are currently financed by other donors. The final audit of project accounts has been requested and should be available shortly. 6. Capacity Building and Long Term Institutional Development. Long-term sustainability of a Pagen type operation in Guinea remains for the time being still constrained by the low capacity of the administration and insufficient monitoring of in service training. As capacity building is a long term effort, economic management projects in Guinea should be integrated in a long term strategy for institutional development, consistent with the Government's development strategy. Progress in internalizing the economic management tools and procedures can only be gradual, as demonstrated by improvements which occurred during Pagen II as distinct from achievements under Pagen I. Therefore, it is necessary to define a strategy for capacity building with long term objectives and medium term benchmarks to evaluate progress achieved by individual projects. 7. Main lessons for capacity building projects include: (i) project design should be focused on few key economic management functions, supported by few cofinancing partners, in order to minimize the additional burden on local management capacities; (ii) project sustainability could be improved, through a closer monitoring of transfer of skills and closer supervision of in service training; and (iii) implementation could be improved through more rigorous supervision of progress reports prepared by both the experts and the local teams, and the definition of performance targets to monitor progress.  REPUBLIC OF GUINEA PROJECT COMPLEIION REPORT SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE I. Project Identitv Project Name: Second Economic Management Support Project (PAGEN II) Credit Number: Cr. 1963-Gui Credit Amount: SDR 11.3 million (US$ 14.5 million equivalent) RVP Unit : Africa Country : Republic of Guinea Sector : Economic Management H. Backhound 1. From independence in 1958 to the early 1980's, Guinea's economy was managed along socialist planning principles. The emphasis on state-led development failed to effectively and efficiently use the country's rich endowment of natural resources and led to a situation characterized by an unsustainable level of external debt, an inefficient public sector, an over- inflated civil service, and high levels of poverty. Within the public sector, the poor performance of the public enterprise sector contributed to the financial difficulties of the early 1980's. However, as early as 1979, the Government progressively came to accept the need to implement far-reaching reforms to decentralize the economy, to reform public sector management, and to improve economic management capacities. 2. In 1981, the Government requested Bank support for strengthening economic management in the form of technical assistance to the Ministries of Planning, State Control and the Central Bank. However, the preparation of Bank assistance proved extremely difficult as there was strong resistance in certain Government circles towards foreign technical assistance. It was not until the arrival of a new political leadership in 1984 that the past economic policy orientation was reversed in favor of a market economy. This change led to the reorganization of the ministries in charge of economic management and the preparation of the Economic Recovery Program (PREF), under the overall supervision of the Comite de Coordination Economique et Financiere (CCEF). The Bank supported the Government's efforts with a first technical assistance project approved in 1985 (Pagen I), and by a first Structural Adjustment Credit approved in 1986 (SAL I).  3. The PREF aimed at liberalizing the economy, controlling public expenditure and external debt, reforming and reducing the role and size of the public sector, reforming the public administration and reducing the civil service. To this end, measures were to be implemented under SAL I to remove state controls and interventions, and to set the policy and institutional framework for private sector development. Measures were adopted to reduce the impact of the reforms on vulnerable groups in urban areas, including labor intensive public work program and temporary compensation for the laid-off civil servants. 4. Pagen I provided the tools to implement and monitor policy measures under the PREF, including the preparation of a new economic legislation, the first public investment program, a beginning of debt management and data and economic analysis. The project also started a long term effort to establish an economic management capacity within the Guinean administration. However, the application of these new tools and procedures was hampered by (i) an inadequate skill base, (ii) an inadequate personnel policy characterized by a high level of staff turnover, inefficient development plans and performance evaluation, and (iii) vested interests opposing reforms and transparency of procedures. 5. In view of the encouraging results of SAL I, a Second Adjustment Credit (SAL II) was prepared and approved in May 1988. SAL II supports Government efforts to (i) further liberalize the economy through reforms of the banking, trade and pricing policies and the legal framework, and (ii) strengthen economic management through continued administrative reform, fiscal policy, public investment programming and budgeting, and public enterprise reform. However the success of the recovery program was constrained by the administration's weak capacity to execute the reform program. Therefore, a second economic management project (Pagen II) was prepared as a support mechanism to implement the SAL II policy measures. In particular, it would provide assistance to implement critical parts of the administrative reform such as the civil service roster and computerized pay rolls. 6. Both credits, Pagen II and SAL II were prepared in parallel. A workshop was launched in December 1987 to prepare the second phase of the PREF and SAL R. The workshop also assessed the results of Pagen I, and identified the weaknesses associated with a technical assistance mainly focussed on the delivery of outputs. The workshop was a basis for discussions for the preparation of Pagen II. A Special Project Preparation Facility of USS 300,000 approved in September 1985 supported the Government's efforts to reduce the civil service. A Project Preparation Facility (PPF) of US$ 455,000 was approved in June 1988 to help finance the general testing of civil servants, which was a main element of the Administrative Reform. 7. The design of Pagen II addressed the shortcomings of the first project. As activities under Pagen I were scattered, a consensus had emerged among donors for a closer coordination. Therefore Pagen II was designed as a multi-donor umbrella operation. Another problem of Pagen I related to accounting and procurement. Under Pagen II, a separate administrative unit was created to coordinate overall project activities. The unit was composed of a coordinator, an administrator and an accountant. A Reform Monitoring Unit was created under Pagen II to provide a permanent capacity to monitor the implementation of the reforms. Due to the close links between Pagen II and SAL II, the coordinator of the RMU was also responsible for Pagen II coordination. The signing of the Pagen II was made a condition for SAL II effectiveness. 8. The rationale for Pagen II was the consolidation of the results of Pagen I. In addition, the new project included support to the Central Bank, legal assistance and assistance to monitor  the PREF through the creation of the RMU. Special emphasis was put on formal training and the transfer of skills through in service training. 9. Pagen II (Credit 1963-GUI) was approved on November 8, 1988 in the amount of SDR11.3 million (US$ 14.5 million equivalent); the credit agreement was signed on November 29, 1988 and became effective on August 30, 1989. The project was closed on February 8, 1993. Cofinancing arrangements were as follows. Source Contribution Main Project Activity (USS million) % IDA 14.5 57.1 Economic Analysis and Planning Training; Legal assistance FAC 2.8 11.0 Public Finance Management AfDF 2.5 9.9 Economic Analysis and Planning UNDP 2.2 8.6 Administrative Reform USAID 1.3 5.1 Central Bank; civil service management CCCE 1.2 4.7 Public Finance Management Government 0.9 3.6 Operating costs The total cost of the project was US$ 27.8 million. The project was expected to disburse over a period of six years. L Proiect Obecthves and DesciDtion 10. Building on the results of Pagen I, the objectives for Pagen II were to: (i) strengthen key management functions such as: investment planning and programming, public finance management and management of the civil service and development of a coherent economic legislation; (ii) improve the management and the monitoring of the PREF, and, in particular, the reforms included in the structural adjustment program, and (iii) strengthen the national training capacity and develop the skill base of the civil servants. 11. The project included six components: economic analysis and planning; public finance management; administrative and civil service reform; professional skills development; direct support to the PREF including legal assistance and support to the Central Bank; monitoring and coordination of economic and institutional reforms. 12. Economic Analysis and Planning. This component's objective was to strengthen the analytical capacity of the Ministry of Planning. Focus was put on macro-economic analysis and forecasting, investment programming, and statistics. The project financed an expatriate macro- economist for three years, junior professional positions and short-term expatriates and consultants, working within a macro-economic analysis unit. This unit was to prepare a five year macro- economic framework, integrating the three year rolling public investment program (PIP) and the budget, and highlighting key development constraints and development strategies. It was also to provide regular economic reports. The Directorate of Public Investments was assisted by an expatriate investment programmer for three years, and foreign short-term consultants. The advisors were to help improve project screening, evaluation and appraisal of recurrent costs, strengthen sectoral analysis of the PIP, and implement a computerized data base to monitor project financial and physical execution. Expatriate experts would also assist the Directorate of Statistics and Informatics to design and implement work programs and new work methods. They were to help supervise the work of the Directorate's divisions, provide technical support, help  - 4 - carry out a number of surveys and disseminate the results, and ensure the collection of appropriate data and the preparation of the monthly price indices and national accounts. This component was to be financed primarily by the IDA credit. 13. Public Finance Management. Under this component, the project was to assist the Government in implementing a comprehensive budget reform. The IDA credit financed the services of a legal advisor to the Minister of Finance, a debt and a procurement expert. France's support to this component consisted of the funding of the services of a training/personnel management advisor to the Minister, and technical advisors to the Budget, Treasury, Tax and Customs Directorates. 14. Administrative and Civil Service Reform. Under this component, support was to be provided primarily by an on-going UNDP project. Its objective was essentially to help the Government carry out an administrative and civil service reform action plan. Key parts of the reform were (i) to establish a central payroll service, and a permanent mechanism for the monitoring and control of personnel files and wage bills (SAL II second tranche release condition) and (ii) to adjust the size and the composition of the civil service. 15. Professional Skills Development. The objective of this component was (i) to help the Government raise the level of competence of staff in economic management agencies, and (ii) strengthen the existing training capacity. The project financed the provision of training at the local facility (CNPG)i/, a number of fellowships for training abroad, junior professional positions, as well as an advisor to assist the director of the training center design and implement training programs. Existing training programs included economic and financial management and business accounting and auditing. A new curriculum was to be developed in project analysis, preparation and supervision. Furthermore a training needs assessment was to be provided by the advisor to the Minister of Finance. Similar assessments were to be carried out for the Ministry of Planning and the Ministry of Administrative Reform. The component was mainly financed by IDA. 16. Support Activities to the Economic Recovery Program. Under this component assistance to the Central Bank was provided by USAID. It was focussed on the Banking Sector division and the preparation of the balance of payments. In parallel, IMF assistance included advisors to the Governor, to the Foreign Exchange and Credit Departments and an accounting advisor. Legal assistance was also provided. The project financed three legal advisors to the Ministry of Finance, the Ministry of Justice and to the CCEF. The advisors were to (i) compile existing laws and regulations and build a legal data base, (ii) assist the Government in drafting new legislation in line with the new economic orientation, (iii) review recent jurisprudence, (iv) assist in drafting and negotiating Government contracts, (v) assist in organizing the legal services of the Ministries of Justice and of Finance and of the Secretariat of the Government, (vi) train counterpart legal advisors. 17. Monitoring and Coordination of the PREF. The project financed the establishment and the operation of the RMU to address the previous lack of monitoring encountered during the first phase of the PREF. The RMU was to provide technical support to the CCEF by preparing progress reports and action plans to help implement the measures included in the Government's j/Centre National de Perfectionnement i la Gestion. (National management training center)  Statement of Development Policy, the underlying document for SAL II, and coordinating and conducting the dialogue with Guinea's aid donors. Furthermore, the Coordinator of the RMU was to assume project management of Pagen II. IV. Projet Design and Organization 1& Project design. The project was designed as an integrated package of multi-donor activities, thereby incorporating the lessons from Pagen L To ensure better overall management of the work of the numerous resident experts, and monitoring of in-service training, donor coordination was formalized by the agreement to support Pagen II as a common project. As a result, instead of focussing on key economic management areas as in Pagen I, the scope of the project was expanded to include diverse aspects of economic management. Pagen II was thus to allow for a better dialogue among donors and a reduced risk of overlapping activities. 19. Project organization. The CCEF was responsible for the execution of the Project. Overall management would be ensured by (i) the RMU, (ii) a project administrator, (iii) six Chiefs of Operations responsible for each project component. A Project Management Committee /(PMC) chaired by the administrator was to review progress of implementation and results, review financial and administrative aspects and maintain contacts with cofinanciers. Furthermore the PMC was to report, through the RMU, to the CCEF on policy issues. V. !oiect Implementation 20. The project's staff appraisal report (SAR) identified the main difficulties to be anticipated during implementation. In the event, the extent of these difficulties was, however, underestimated. 21. Structural adjustment reforms versus long term capacity building. According to the SAR, a potential risk was that the priority given to the implementation of the reform program would divert attention and efforts from long term capacity building. It was, however, suggested that this risk would be minimal, based on the appropriate selection of counterparts and the close monitoring of training activities including on-the-job training. During project implementation the anticipated risk proved true: the need to implement the reforms shifted attention away from long term capacity building. 22. First, the appointment of counterparts did not always correspond to a clear selection process based on competence. Second, in the absence of an overall training program applicable to the Ministries participating in the project and supported by all donors, it was difficult to implement a systematic approach to training at the national training facility or abroad. The selection of staff for training was often not based on clear criteria. Only few Directorates designed a training policy, whereby all staff to be trained would first take a refresher course in economic and financial management, and would then proceed to the second year course. Only upon successful completion of this training could they apply for further training abroad. Third, despite the organization of a seminar based on the report 'Towards a strategy for on the job Zrhe project management committee consisted of the project administrator and the six chiefs of operations responsible for the execution of individual components.  training"a/, there was an inadequate evaluation of training results and supervision of transfer of skills. Fmally, an inadequate personnel policy contributed to the low motivation of the civil service. The adoption of objective criteria to reward/sanction staff performance, would encourage a thrust for self improvement among civil servants. In this context, the pressure to implement the reforms pushed experts to substitute for their counterparts. Some experts actually worked in semi-isolation, although this was also partly due to the difficult physical conditions prevailing in some Directorates. 23. Donor coordination versus project complexity. The large number of activities and the involvement of six donors (para 8) increased project complexity and the need for overall coordination. In practice, overall coordination of project activities was insufficient, as shown for example by the lack of a general training policy. The implementation of the PREF required all the attention of the PREF coordinator who therefore did not participate in project management. The members of the PMC did not meet on a regular basis as was originally planned. Furthermore, in spite of the improved collaboration among donors, project activities continued to be managed and implemented as separate projects. There were no procedures to ensure a common approach towards management of technical assistance and monitoring of transfer of skills, training abroad, and salary supplements. 24. The implementation of the civil service reform component was controversial. In view of the long delays to implement this part of the PREF, the Bank became convinced that the component's objectives could not be achieved, as well as the specific condition for SAL II second tranche release (para. 14). During a Bank supervision mission in early 1990, it appeared that the personnel files at the Ministry of Administrative Reform had been managed and updated in an unethical manner. The Government requested the Bank to finance an audit of the service in charge of managing the files. Consequently, the Bank became responsible for this component which was originally supported by UNDP. Consultants were engaged to oversee the reorganization and the operation of this service and to reconcile these files with the payrolls files at the Ministry of Finance. 25. Project financiny. The diversity of donor financing procedures increased complexity. Due to the lack of adequate project management (para. 22), it was difficult to obtain a clear view of the overall project accounts and costs, as other donors did not often share or communicate their financial position. IDA accounts were managed together with the AfDB funds by the project administrator. The decision to assume responsibility for the civil service reform component considerably drained the Bank's project fund. Early 1991, it appeared that the credit would be fully disbursed ahead of schedule. As a consequence, a core program of priority activities was prepared for 1992 and 1993. A revised budget was prepared in February 1992 to cover the priority activities for 1992 and remaining credit funds were reallocated accordingly. In parallel, the preparation of the follow up project was initiated in order to avoid a major gap between the two projects. However, the Bank subsequently decided that prior to proceeding with the preparation of a possible third project, the results of Pagen II should be evaluated. As a result, the processing of the third project was delayed. As Pagen II credit funds were fully disbursed by mid-October 1992, some commitments could no longer be financed under IDA funds. In order to allow for the continuation of some Pagen II activities, alternative financing was identified and most priority activities during this "transition period" are currently financed by other donors. Y/'Pour une strat6gie de formation sur le tas". Leila Zlaoui. Available from the AFlCO Guinea Desk.  -7 - VL Proiect Results 26. Project results should be evaluated against the results of Pagen I and in the context of a long term effort to strengthen institutional capacity. It must be recognized that Pagen II deepened the economic reform program begun with Pagen I. It contributed to further improve the administrative capacity for economic management through the training activities and the establishment of the CNPG as a sustainable national public training facility for civil servants. Despite many improvements in the technical skills of staff, fuirther achievements in key management areas such as investment programming, budget execution, and procurement practices remain hampered by resistance against the introduction of transparent procedures. 27. Component 1: Economic Analysis and Planning. The RMU and the division of macro- economic analysis (para. 11) are now better equipped to monitor the economy, forecast and evaluate the impact of policy measures. A macro-economic data base, a macro-economic framework and an annual economic and social report are prepared on a regular basis. Progress was also achieved in the preparation of the public investment program, including the "project description" (fiche de projet) to be filled by the technical and sector administration. Gaps still remain, however, regarding project evaluation and screening by the National Directorate for Public Investments (DNIP), to ensure consistency with the priorities of the investment budget and the evaluation of the recurrent costs of projects. Despite notable progress, including the collection of data and the production of the national accounts covering 1986 to 1991, the consumer price index for the city of Conakry, trade statistics and the directory of companies, the statistical apparatus still requires considerable strengthening and training. 28. Component 2: Public Finance Management. Budget preparation improved with the adoption of the budget preparation and accounting directive and the adoption of the public accounting code. However, there is still insufficient control over the execution of expenditures, despite the monitoring performed by a foreign advisor. This problem relates in particular to the arrears in counterpart funds to externally financed public investments. 29. Debt management also improved with a computerized debt management and reporting system becoming operational. The exchange of information with the Central Bank has improved. However, further improvements are still needed for systematic reporting of all new debt and centralization of data on new loans in the Division of the public debt in the Ministry of Planning and Finance, including the externally financed public investments and the disbursements schedules. The lack of on the job training is a major shortcoming and constraint to the sustainability of progress in this field. 30. A separate procurement directorate has been established within the Ministry of Planning and Finance, and standard and procurement procedures are now in place. Procurement commissions have been created to review tenders and to ensure that the procedures are correctly applied. Other areas requiring improvements include the diffusion of the new procedures and the implementation of the new regulations to all public procurement, and the strengthening of the directorate's capacity to assist public agencies in preparing tender documents and familiarize them with the new regulations. 31. Substantial progress was achieved in the tax administration including a census of taxpayers, a better organized and trained control and verification service. This resulted in a total of GF 1.8 billion in tax recalls for 1991. Computerization of the directory of public and private enterprises is underway. The technical assistance introduced standard team work methods and trained the  staff in analyzing tax declarations, identifying irregularities, and proceed with verification and inspection. Training was also provided in business accounting and management. Other areas of progress include the computerization of the public wage roll, the directory of retirees which is underway, and the customs administration. 32. Component 3: Civil service. The project contributed to finalize the general examination and testing of civil servants. The most important result of this component was the introduction of an improved civil service personnel management system. The system is divided into two components. First, the computer service of the Ministry of Planning and Finance streamlined and computerized the pay roll. The personnel files managed by the Ministry of Administrative Reform and Civil Service were updated and made consistent with the pay roll. UNDP first supported this component. However, delays in implementing a management system for the personnel files prompted the decision by the Government to initiate, with Bank assistance, an audit of the service in charge of managing these files. As a result, the Directorate of Civil Service was reorganized and the service in charge of the personnel files was restructured and incorporated into the Directorate. The computerization of the personnel files was completed and the staff was trained to operate the system. Sustainability, however, is limited by the reliance on the foreign computer specialist to manage and update the files. 33. Component 4: Professional Skills Development. The national training center (CNPG) has been able to provide a diversified training program. First, a two year program provides 900 hours of courses. The first year is a refresher course in micro and macro economics, mathematics, management and public finance while the second year provides specialization in investment project analysis and public finance and budgeting. Four classes of on average 50 civil servants completed the first year. More than half of the students continue for a second year. The program is completed by a final examination and a degree. More than 80 % of the students successfully graduated from the program. Second, a one year short term course offers a three months training in project analysis and evaluation. This course also included staff from the sectoral ministries. Other seminars were provided on specific issues such as auditing, accounting, lotus software. 34. Main shortcomings include: the lack of an overall training policy which prevented staff from key directorates such as the DNIP and DNSI to take full advantage of the facility; an insufficient coordination with the technical assistance performing on the job training; a program too "theoretical" compared to the need for operational know-how; and an insufficient training of local instructors to take over the second year of the two years program and the course on project evaluation. 35. Component 5: Direct Support to the Economic Recovery Program. A legal data base was produced, including 1860 legal texts. Legal services were organized at the Ministries of Justice and Finance and at the Secretariat of the Government, and a data base of the Guinean legislation was created. The project helped prepare economic legislation in various areas, including the first part of the code of economic activities and the land tenure code. Other legal activities carried out included: resumption of publication of the official gazette, the simplification of business regulations, the creation of a one-window investment approval center, and the creation of a legal service at the Central Bank. Support to the Central Bank mainly focussed on the establishment of the banking sector division and the development of the supervision and inspection capacity of that division. Although the legal assistance component was largely implemented successfully, counterpart's training of the resident legal advisors has been  - 9 - disappointing due, inter alia, to a poor selection of candidates and low salaries which were a major demotivating factor. 36. Component 6: Monitoring of the Economic Reform Program. The RMU worked in close coordination with the macro-economic analysis unit of the Directorate of Planning and Economy (para. 11), for which it provided training and technical feedback. The RMU also contnbuted to improve the exchange of information among Directorates and Divisions involved in economic analysis. The project mid-term evaluation recommended that two assistants to the RMU coordinator be recruited to help develop an information exchange network and to develop a consistent computerized economic data base. However, due to resistance regarding the selection process, these recommendations were not implemented. The RMU also provided technical support to the CCEF for the preparation of negotiations with the donor community. This effort contnbuted to the successful negotiation of the ESAF with the IMF in 1991, and of the rescheduling of the Guinean external debt with the Paris Club in 1989 and 1992. VII Project Sustainabili, 37. Different from Pagen I, overall project sustainability under Pagen II improved somewhat as internalization of the procedures and methods was pursued, and training of civil servants continued on a regular basis. However, major constraints remain. 38. A first limitation is the continued deterioration and lack of motivation of the civil service. This is partly due to lack of a personnel management policy, capable to provide adequate incentives and to motivate staff. During Pagen II, it became clear that efforts to train and improve the competence of the Guinean civil service will not be sustained without a dynamic policy to promote and recognize performance within the civil service. Incentives other than salaries and benefits should include career development opportunities, promotion policies and the introduction of reward for good performance and sanction for inefficiency and unethical behavior. In the case of the service in charge of managing the personnel files, the inadequate status of civil servants and the lack of sanctions had led in the past to mismanagement of the files under outside pressures. Greater emphasis should be on linking training, increased responsibility, and promotion. Instead, trained staff were often reassigned from the functions for which they had been trained, thus preventing them and their colleagues from using their new skills. 39. A second major constraint to the sustainability of the reforms is the continued lack of transparency in procurement and payments procedures. In particular as noted earlier, there is insufficient monitoring and control over the execution of public expenditures. In order to improve future sustainability of Pagen type projects, improvements are needed in such areas as the monitoring of the execution of public investments, the reduction of arrears in Government contribution to externally financed projects, the management and use of foreign aid counterparts funds and the systematic reporting in the contracting of new debt. Further success and sustainabilitv of the reform program will partly depend on the capacity of the Guinean administration to effectively control public expenditure and public finance. VIHL Bank Performance 40. Preparation of the project started during the implementation of the first project. The workshop organized in December 1987 to prepare the second phase of the Recovery Program provided a first assessment of the first project as well as an evaluation of the needs for technical assistance and thus helped prepare Pagen II. Given the experience of Pagen I and the  - 10- insufficient coordination on the Guinean side, the Bank assumed leadership among the donor community to ensure that the various donor interventions be properly harmonized. This leadership proved effective to unblock the situation prevailing at the Civil Service Directorate (para. 32). In particular, the decision to extend IDA financing to this component was a key element for the release of the second tranche of SAL II and related cofinancing. However, the impact on the project's budget and the need to identify alternative financing to cover both priority activities and the transition with the next operation introduced cleavages with the government, the donor community, and the expatriate experts. Overall dialogue became somewhat tense and difficult at the end of the project and after the credit was fully disbursed. IDL Borrower Performance 41. Difficulties during implementation have been mentioned earlier: lack of a personnel policy that motivates staff, insufficient skill base and inadequate choice of counterpart staff, inadequate approach to training in the local facility and abroad, resistance to introduce new transparent procedures and lack of supervision from the Reform Monitoring Unit. Although project accounts were adequately administered, project financing needed to be more carefully supervised. The requested audit of the project is expected to show improvements in procurement and accounting as compared to the first project. x Consultants Services 42. Overall, consultants performance was satisfactory regarding the introduction of new tools and procedures, and the production of inputs for decision making. The performance as regards the transfer of skills, however, was insufficient. Despite the constraints often mentioned about the low motivation and the low capacity to absorb on-the-job training, better results could have been achieved through more effective monitoring by the Government, the donor community, and the Bank XL Project Documentation and Data 43. Most of the documentation was available in project files and the MIS. The information necessary to this completion report was obtained in Conakry through extensive interviews with civil servants, experts, donor representatives, Bank staff, and former task managers in Washington. Project documentation on supervision and project accounts at the Project Administrative Unit were readily available. Information was collected with the close collaboration of the Administrator.  Attachment I Matrix of Proect Results |E XP ECIED RESULTS STATUS COMOMENTENUSTAINABHI LT Economic Analyis and Planing Main results include: consumer price index, directory of companies, national 1. Stronger, computerized economic data base and Improved accounts, trade statistics. timely preparation of national accounts; Macro-economic models introduced 2. Improved medium term projections and Completed during Pagen I were further improved. monitoring of macroeconomic indicators; Quality of project evaluation still needs 3. Better screening of projects on technical, Improved to be improved, as well as programming financial and economic grounds and improved and evaluation of recurrent costs. programming of public investments; Unsatisfactory monitoring of execution 4. Improved expenditure control as the three-year Improved of projects. PIP is integrated into the annual budget. Public Fmance Management Budgeting process has improved. Budget execution still to be improved. 1. Improved budget preparation and increased Improved Monitoring capacity of tax and customs efficiency in budget execution; administration has improved. 2. Broader revenue base due to increased tax and Improved Software for debt reporting and duty collection; management has been installed. 3. Increased efficiency in debt management; Improved On the job training was unsatisfactory. Administrative and Civil Service Reform The intervention of the Bank in this component focussed on: 1. Regular publication of reliable data on civil service employment and payroll; - establishing a reliable mechanism to 2. Completion of the staff testing and selection Completed manage the updating of the civil service process leading to a core civil service of about roster; 50,000 persons; - consistency with the payroll files at 3. Improved personnel policies and procedures; the Ministry of Planning and Finance 4. Improved organization of agencies responsible for which had been computerized. personnel management; 5. Better qualified staff.  EXPECTED RESULT1S STATUS COMMENTS/SUSTAINABELlTY Professional Skils Development Due to financial constraints, training mainly concentrated on the first part of 1. Develop a training program in project analysis, Completed. the component. Short term activities preparation and supervision; program will be four promotions of were reduced. tailored to the needs of Ministry of Planning staff students were and to the planning units of technical ministries; trained. Success rate 2. Support to the Ministry of Planning to develop at the end of the training programs in administrative techniques second year was and personnel and office management; 86%. 3. Fellowships and junior professional program. Partially completed Three junior professionals were recruited and financed under the project. Fellowship program was revised following mismanagement. Monitoring and Coordination of Economic and Institutional Reforms Establish and operate a Reform Monitoring Unit Globally completed managed by the Coordinator. 1. Review dossiers to be discussed in CCEF meetings; 2. Monitor the effective implementation of the decisions; Guinea successfully rescheduled its debt 3. Prepare concise progress reports Satisfactory with the Paris club. 4. Coordinate and ensure a better dialogue with major donors; Insufficient Project activities were not supervised by 5. Manage the project. the Coordinator.  EXPECTED RESULTS STATUS COMMENTS)SUSTAINABIIITY Other direc Support to the Recovery Progam 1. Central Bank 1.1 help establish the Banking Sector Division, Improved carry out inspections, improve capacity to analyze documents submitted by the banks 1.2 improve preparation of the Balance of Payments 2. Legal assistance 2.2 establish a data base of economic and financial Completed Overall satisfactory progress achieved, laws but continued legal assistance still 2.3 draft and comment on new legislation, ensure needed. consistency within the legal framework Training of counterparts has been less 2.4 review jurisprudence successful due to inadequate selection 2.5 draft contracts with suppliers, foreign investors, of counterparts, lack of office space and and assist in negotiations poor compensation benefits. 2.6 assist the MEF; SGG, and Ministry of Justice in organizing their legal services 2.7 on-the-job training for legal counterparts 3. Other Activities: additional studies,assistance to Not completed proceed with the public enterprise restructuring program, feasibility and sector reviews, policy oriented macroeconomic studies; Activities were suppressed due to financial constraints.  - 14 -  - 15 - PART II REPUBLIC OF GUINEA MINISTRY OF PLAN AND FINANCE SECOND ECONOMIC MANAGEMENT SUPPORT PROJECT (CREDIT 1963-GUI) PAGEN II PROJECT COMPLETION REPORT  - 16 - From the effective date of IDA Credit No. 1963-GUI, August 30, 1989, until closure on October 16, 1992, the Second Economic Management Support Project (PAGEN II) progressed through its normal three-year cycle with an overall positive outcome, despite a few shortcomings and inadequacies. The Government very much hopes that it will be possible to make the necessary adjustments and improvements during a third phase of the Technical Assistance Project for Economic Management. The present report starts out with a summary of the positive aspects of the project, followed by a critical appraisal of the difficulties and inadequacies noted, and ends with suggestions and recommendations to be adopted within the framework of the new project. OVERALL POSITVE OUTCOME OF PAGEN II Generally speaking, the Second Economic Management Support Project was intended to strengthen the outcome of PAGEN I in the areas of economic analysis and planning, and to furnish new management tools while improving the skills levels of local professionals working for the Directorates of Plan and Economy, Public Investment, Statistics, Public Finances (Budget, Customs, Taxes, Treasury), the Civil Service, the Central Bank, and Economic and Financial Coordination, as well as building local capacities in the legal area. It may be affirmed without a shadow of a doubt that remarkable progress has been made in several areas, as witnessed during the final stages of the ESAF negotiations at the end of 1992 and the rescheduling in early 1993 of Guinea's external debt to the Paris Club. Planning and Economic Analysis At the macroeconomic level (DNPE) New tools and procedures were put in place: - the enhanced medium-term projection model (MPEGUI); - a short-term projection model (PRECEGUI), making it possible to draw up a budget framework and test the short-term impact of the economic, monetary and exchange policies. The products obtained are becoming more and more diversified and are published regularly: - a macroeconomic data bank, set up in 1989; - a quarterly table of economic indicators; - a monthly table of economic indicators; - a macroeconomic framework, to serve as a frame of reference for preparation of the next year's budget, and for appraisal of the overall PIP envelope.  - 17 - In the area of public investment programming (DNIP) Several significant results were obtained in the area of investment programming, in the form of: - a public investment program with substantive improvements; - a programming procedure geared to greater participation by the technical ministries and sectoral divisions, with the Programming Division simply serving as arbitrator; - programming tools: the project briefs and the computerized project file have been gradually improved and are now operational; - existence of a national programming capacity, thanks to the transfer of skills. In the area of sectoral division project monitoring, the results were more uneven - the assistance supported by ADB/ADF financing produced results in the areas of methods and tools to be used; - in terms of the actual monitoring capacity of the sectoral divisions, there was an improvement in the knowledge in real time of projects during PIP preparation; - however, in the area of extended periodic (quarterly) monitoring, the results did not meet expectations. Gathering of statistical information (DNSI) The results obtained relate to the two main thrusts of PAGEN II: - In the area of National Accounts, organization of periodic "enterprise' surveys and economic assessments, and production of documents on: - the Economic Accounts, 1986-88, 1989 and 1990; - the Directory of Enterprises and Companies, 1990 and 1991. - In the area of general statistics, gathering and processing of customs data, and production of statistical series on imports from 1988 to 1991. Now that the Customs Directorate has a computerized system (SYDONIA), it should be possible to obtain more reliable data on foreign trade from 1992 onwards.  - 18 - Public Finance Management The outcomes obtained relate to three areas supported by IDA - At the National Directorate of Budget: creation of an external debt management unit. This program was implemented in the following stages: (a) creation and organization of the Debt Division; (b) updating of computerized files; (c) improvement of intemal procedures, particularly as regards the payment and monitoring of installments (single monthly payment order); (d) regularization of relations with other institutions involved in debt management, in particular the Central Bank, and reestablishment of the prerogatives of the Ministry of Finance in the area of external debt management; (e) renegotiation of part of the external debt in April 1989 and January 1993 (Paris Club, private banks, non-Paris Club bilateral loans, etc.). - At the National Directorate of Taxes: the program covering internal reorganization and the development of procedures and implementing regulations took the form of: (a) the adoption of instruments designed to better identify its various missions (organic laws); (b) the preparation of a taxpayers roster, in operation since 1991; (c) an enactment of the Code des Imp6ts Directs on February 8, 1991; (d) a proactive tax audit campaign, initiated in mid-May 1991, which has improved the tax yield. - At the National Directorate of Procurement and Portfolio, the program for internal reorganization, preparation of the regulatory framework, and design of working methods and tools produced the following results: (a) setting up of the National Directorate of Procurement and Government Portfolio; (b) adoption and enactment of the Code des Marches Publics (Code of Procurement); (c) development of the layout of the Bulletin Officiel des Marches Publics (Official Procurement Bulletin), primarily intended for publication of announcements of calls for bids on contracts to be awarded by the State, the Itablissements publics a caractere administratif, and the decentralized authorities.  - 19 - Generally speaking, in the Public Finance component, which is taken to include the other areas of action financed by the French Cooperation service, a considerable effort has been made in terms of establishing regulations and providing staff training. Administrative and Civil Service Reform The administrative reforms undertaken by the Ministry of Administrative Reform and the Civil Service since PAGEN I under UNDP auspices (projects GUL88/002) have had significant results in certain areas. Outcomes have been uneven in other sectors, however. This is particularly true in the case of development of the Service Informatique de Gestion - SIG. In this context, systematic intervention by the World Bank over a period of nine months, through July 1992, made it possible to achieve the goals of reorganizing the SIG into a more efficient unit, streamlining the Fichier de Gestion Administrative - FGA (civil service roster), a copy of which is sent each month to the Ministry of Planning and Finance to enable the wage rolls [Solde] to be processed, and improving FGA management through the institution of procedures to control updating of the personnel roster. Trainine at Centre National de Perfectionnement a la Gestion (CNPG) As was the case with PAGEN I, the activities of this Centre National during PAGEN II focused on the economic and financial authorities, but it was also quite heavily involved in administrative reform measures. The following activities were carried out: - 10 action training workshops; - 28 upgrading courses in the administrative, accounting and financial management of companies; - 4 "introduction to auditing" seminars; - 4 seminars for SME/SMI managers; - 3 advisory sessions for SMEs; - 56 classes in general accounting, in the form of computer-assisted instruction. Assistance to the Central Bank (BCRG) This component, financed by USAID, has had mixed results: The assistance for preparation of balance of payments statistics did not materialize because of the donor's time-consuming procedures and because of differences of opinion with the BCRG concerning selection of the expert.  - 20 - On the other hand, assistance in the area of bank supervision resulted in improved oversight of the local banking system. The various inspection reports resulted in the introduction and initial implementation of a set of prudential regulations. The BCRG's performance has improved in the area of monitoring of the banks' liquidity, solvency and exchange positions. Legal Assistance Thanks to its broad terms of reference, the legal assistance service has been instrumental in the tremendous progress made, since 1989, in the area of economic legislation (Code Foncier, Code des Imp6ts Directs, Codes des Douanes, revocation of special trade conventions, adoption of decrees implementing the Code du Travail, etc.). Two computerized data banks have been set up: - the LEGAL data bank, with a directory of over 1500 legislative texts as of December 31 1991, accessible to the Ministry of Plan and Finance, the Ministry of Justice and the Secretariat GsnEral du Gouvemement; - the PARAPUB data bank on public enterprises, used by the Portfolio Division of the Ministry of Planning and Finance. In parallel with these data banks, a directory of legal texts has been prepared, with over 3500 references. Lastly, the bimonthly publication, since 1989, of the Joumal Officiel de la Re,publique de Guin6'e, following a three-year hiatus. Assistance for the CCEFs Monitoring Unit In Guinea's present context, the CCEF is the only body that actively coordinates, harmonizes and motivates the political, economic and structural aspects of reform. Support for the Monitoring Unit has proven essential for the preparation of economic decisions on the one hand and the negotiation of economic programs on the other. The Unit provided assistance in bringing the ESAF and Paris Club (1989, 1992) Club negotiations to a successful conclusion. It has been responsible for monitoring all of Guinea's economic reforms. DIFFICULTIES AND INADEQUACIES OF PAGEN II During project implementation, a number of problems and inadequacies were noted, particularly in terms of donor coordination, technical assistance coordination, and transfers of skills. These inadequacies are linked to the terms of reference for technical assistance, which are often vague, and to difficulties encountered in the field.  - 21 - Donor Coordination The project setup provides for the intervention of several donors using different working methods and approaches. Thus they will often have widely divergent ideas on how to handle a given issue (such as the proper use of project resources, quality control mechanisms and provision for mid-project adjustments, technical assistance management, and strategies for training and transfers of skills). Following are two specific examples of this type of problem: (1) Grant of bonuses to local professionals involved in project activities. This practice is accepted by UNDP and by the ADB, whose financing takes the form of grants. These two agencies pay bonuses and other allowances to professionals participating in seminars, training courses or other activities within the project framework, including technical assistance counterpart staff. But the World Bank, which requires repayment of its credits, finds it unacceptable that bonuses and other allowances should be paid to local professionals already on the civil service payroll. The argument in favor of granting these bonuses is that in Guinea's present situation, civil service pay is very low, and these sources of additional income can serve as incentives for professionals who are assigned to work with the technical assistants and then sometimes have to take over from them. (2) Training of professionals abroad. Here also, the wide divergence of donor attitudes results in fellowships being awarded to professionals with no attention to their existing levels of qualification, the actual training requirements of the various sections, or the possibilities for absorption of the trainees upon their return. It should be noted that a great effort was made under PAGEN II to prepare appropriate training programs, and to make eligibility for fellowships for study abroad conditional upon the passing of a prequalification test or the issue by the CNPG of a certificate of equivalency. Coordination of Technical Assistance The project setup, while promoting better coordination of the tasks performed by the different experts financed by the different donors, thus creates more openings for conflicts and rivalries. One example of this occurred when the two Assistance Missions, SODETEG/SFC, funded by the IDA credit, and LOUIS BERGERJTRACTABEL, funded by the DCB/ADF grant, were working at the National Directorate of Public Investment at the same time. Had it not been for the quick reactions of the local officials, this experience could have jeopardized all the progress already made in the area of public investment programming. Another example of the difficulties of technical assistance coordination concerns levels of borrower and donor accountability. For purposes of efficiency, a donor, in this case the World Bank, will directly approach the technical assistance staff to obtain confidential information. This was the case of the heavy-  - 22 - handed intervention of the SINORG/SOFRECO team, which was placed in a supervisory position within both the Directorate of the Civil Service and the SIG of the Ministry of Administrative Reform and the Civil Service. This type of situation places the technical assistance staff in an ambiguous position vis- a-vis the borrower, the real beneficiary of its services, and the donor, i.e. the manager of the loan funds. Transfer of Skills The main difficulties affecting the transfer of skills from the technical assistance teams to the local professionals are linked to the latter's low levels of training, lack of motivation, and mobility. (1) The low level of training of local professionals often means that technical assistance counterparts are either incompetent or nonexistent. Thus a great deal of time has to be spent bringing the local staff up to standard before any special training program can be undertaken. (2) The lack of motivation is reflected in a lack of interest in the work of the technical assistance team, which in the long run tends to shift more and more toward substitution technical assistance. This situation has been described above, in the section concerning donors' attitudes to the award of bonuses and allowances. (3) Given the high turnover of professionals within a given section it happens that those who have received training and supervision from the technical assistants often prefer to offer their services elsewhere, for personal reasons, to the detriment of the section to which the technical assistance was provided. CONCLUSIONS AND RECOMMENDATIONS TMe establishment of a third phase of the technical assistance project for economic management is vital to the successful conclusion of the ESAF-supported recovery program. Improvements are needed in the following areas: - strengthening of the CCEFs Monitoring Unit; - collection and analysis of statistical data; - economic analysis and projections; - mobilization of internal and external resources; - control of public expenditure; - public investment programming, budgeting and monitoring; - establishment of a legal environment favorable to private investment.  - 23 - To achieve these objectives, it is necessary to place greater emphasis on the training of professionals, the use of domestic expertise (the Junior Professionals program), and the transfer of skills. (1) For the training of professionals, systematized training programs in appropriate areas and identification of existing skills levels before training fellowships are awarded will improve trainingfjob relevance. (2) The use of local expertise, where it exists, will have the dual benefit of solving the problem of motivating local professionals (see the successful Junior Professionals experiment at the Directorate of Plan) and of lowering the cost of expatriate technical assistance. (3) The transfer of skills should be enhanced by: - better selection of technical assistance counterparts; - inclusion of the "transfer obligation' clause in the technical assistance TOR; - assessment of the technical assistance in terms of its ability to transfer skills, and as a criterion for extending contracts. Ibrahima Sory SANO PAGEN II Administrator  - 24 - REPUBLIC OF GUINEA PROJECT COMPLETION REPORT SECOND ECONOMIC MANAGEMENT PROJECT (CREDIT 1963-GUI) PART m: SUMMARY OF STATISTICAL DATA TABLE I: RELATED BANK LOANS Loan/Credit Purpose Year of Status Comments Title Approval Technical Provide the inputs for reform 1985 Completed First attempt to reform Assistance Project implementation and economic management for Economic monitoring; institutional from central plannling. Management capacity building in key PCR available. economic management agencies. First Structural Support Government 1986 Completed Adjustment Credit Economic Recovery Program. Promote economic liberalization, divestiture from productive activities, public sector and administrative reform, control external debt. Second Structural Support the second phase of 1988 Second Adjustment Credit the Recovery Program; tranche address underlying was weaknesses, consolidate released market orientation, November management of the economy. 24, 1992.  - 25 - TABLE II: PROJECT TIMETABLE Preparation December 1987 Appraisal Mission March/April 1988, completed June 1988 Negotiations September 19 to 27, 1988 Board Approval November 8, 1988 Signature November 29, 1988 Effectiveness August 30, 1989 Original Closing Date June 30, 1994 Actual Closing Date February, 1993 TABLE III: LOAN DISBURSEMENTS FY Cumulative Actual as % Actual as appraisal estimate Cumulative of estimate % actual of total 1989 1.4 - - 1990 4.4 4.29 98% 28% 1991 7.4 8.37 113% 54% 1992 10.4 13.21 127% 86% 1993 12.4 15.42* 124% 100% 1994 14.0 _ 1995 14.5 * Due to /SDR US$ fluctuations, actual disbursements were higher than estimated.  - 26 - TABLE IV: PROJECT FINANCING COSTS A) PROJECT COST: APPRAISAL ESTIMATES % of Local Foreim Total Base cost ............... . (USS million). 1. Economic Analysis & Planning 1.3 2.5 3.8 17.1 2. Public Finance Management 2.0 3.8 5.8 26.1 3. Administrative and Civil 1.1 2.4 3.5 15.8 Service reform 4. Professional Skills Development 1.5 2.3 3.8 17.1 5. Other Direct Support to the Recovery Program 1.2 3.2 4.4 19.8 6. Reform Monitoring and Project Management 0.3 0.6 0.9 4.1 Total base costs 7.4 14.8 22.2 100.0 Physical contingencies 0.2 0.4 0.6 Price contingencies 19 0Q7 2.6 Total Project Cost 9.5 15.9 21A (Taxes excluded) - _ Taxes 2.4 - 2.4 Total Project Cost 11.9 15.9 27. a) Including the costs of activities financed through a SPPF of USS 300,000 and a PPF of USS 455,000. B) PROJECT FINANCING PLAN Local Foreign Total ....................... (US$ million). Source of Financing Government 3.3 - 3.3 IDA 5.3 9.2 14.5 UNDP 0.8 1.4 2.2 AfDB 0.9 1.6 2.5 FAC 0.9 1.9 2.8 CCCE 0.4 0.8 1.2 USAID 0.3 1.0 1.3 TOTAL 112 15.9 27  - 27 - TABLE V: USE OF BANK RESOURCES A. Staff Inputs FY88 FY89 FY90 FY91 FY92 FY93 Preparation 25.5 Appraisal 10.6 16.1 Negotiation 5.3 Supervision 8.2 48.0 35.6 41.9 18.0  -28 - B. Missions Stago of Month/Year Number Weeks Specialization Performance Types of Problems Project Cycle Persons in Field represented Rating Status Preparation September 1987 1 2 PA October 1987 1 1 PA November 1987 1 1 PA December 1987 1 1 PA Pre-appraisal February 1988 4 3 PA-Ec Appraisal MarchlApril 1 2 PA 1988 July 1988 July 13, 1988 1 1 AR - Appraisal of the civil service component. November 1988 1 2 LE - Appraisal of the legal assistance component. Negotiations July 1989 1 3 days PA - Prepare for Board Presentation Board to Effectiveness 2 1.8 PA 1 - Slow progress for: compliance with legal covenants, procurement, training. Supervision October 1989 1 2.8 PA 1 2/ January 1990 3 2 PA-Ec-TA 1 May 1990 2 1.5 PA-Ec 1 June 1990 1 1 Leg 3/ July 1990 1 1 RA 4/ October 1990 3 4.8 PA-Leg 2 Project management June 1991 1 performance October 1991 2 PA 1 PA-Ec 2 Availability of funds February 1992 4 5.8 PA-TA-OP Availability of funds May 1992 2 PA-TA 2 October 1992 1 2.6 TA 2 Funds totally disbursed March 1993 3 2 PA-Leg Financial 51 1/ PA: Public Administration, AR: Administrative Reform, TA: Technical Assistance Officer, Ec: Economist, Leg: Legal Framework, OP: Operations Assistant 2/ A workshop was organized to launch the project 3/ Supervision of the legal assistance component 4/ Supervision of the Administrative Reform component 5/ PCR mission