Document of The World Bank FOR OFFICIAL USE ONLY Report No: 23372 IMPLEMENTATION COMPLETION REPORT (IDA-26070; TF-20849) ONA CREDIT IN THE AMOUNT OF US$9 MILLION TO THE REPUBLIC OF MOZAMBIQUE FOR A FINANCIAL SECTOR CAPACITY BUILDING PROJECT DECEMBER 21, 2001 Financial Sector Unit Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 2000) Currency Unit = Meticais (Mt) Mt I = US$ 0.000059 US$ 1 = Mt 16,987.0 FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS BCM Banco Commercial de Mozambique BoM Banco de Mozambique BPD Banco Popular de Desenvolvimento BPI Banco Popular de Investimento DCA Development Credit Agreement FSCBP Financial Sector Capacity Building Project GOM Government of Mozambique ICB International Competitive Bidding ICR Implementation Completion Report IDA International Development Association IFBM Instituto de Formacao Bancaria de Mozambique MoF Ministry of Finance MOP Memorandurn of the President NCB National Competitive Bidding PPF Project Preparation Facility PSR Project Status Report QAG Quality Assurance Group SDC Swiss Development Cooperation SDR Special Drawing Rights SERC Second Economic Recovery Credit TA Technical Assistance TTL Task Team Leader UEM University Eduardo Mondlane Vice President: Callisto E. Madavo (AFRVP) Country Manager/Director: Darius Mans (AFC02) Sector Manager/Director: Gerard A. Byam (AFTFS) Task Team Leader/Task Manager: Ahmet I. Soylemezoglu (AFTFS) FOR OFFICIAL USE ONLY MOZAMBIQUE FINANCE SECTOR CAPACITY CONTENTS Page No. 1 Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 7 5. Major Factors Affecting Implementation and Outcome 12 6. Sustainability 13 7. Bank and Borrower Perfornance 13 8. Lessons Learned 16 9. Partner Comments 18 10. Additional Information 18 Annex 1. Key Performance Indicators/Log Frame Matrix 19 Annex 2. Project Costs and Financing 20 Annex 3. Economic Costs and Benefits 22 Annex 4. Bank Inputs 23 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 24 Annex 6. Ratings of Bank and Borrower Performance 25 Annex 7. List of Supporting Documents 26 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. Project ID: P001811 Project Name: FINANCE SECTOR CAPACITY Team Leader: Ahmet I. Soylemezoglu TL Unit: AFTFS ICR Type: Core ICR Report Date: December 21, 2001 1. Project Data Name: FINANCE SECTOR CAPACITY LI/C/TFNunber: IDA-26070; TF-20849 Country/Department: MOZAMBIQUE Region: Africa Regional Office Sector/subsector: FS - Financial Sector Development KEY DATES Original Revised/Actual PCD. 04/15/1993 Effective: 08/17/1994 08/17/1994 Appraisal: 10/01/1993 MTR: 11/30/1996 Approval: 04/14/1994 Closing. 06/30/2000 03/31/2001 Borrower/lImplementing Agency: Govemment of Mozambique/Bank of Mozambique Other Partners: Swiss Development Cooperation STAFF Current At Appraisal Vice President: Callisto E. Madavo E. Jaycox Country Manager: Darius Mans Stephen M. Denning Sector Manager: Gerard A. Byam David Cook Team Leader at ICR: Ahmet 1. Soylemezoglu Simon C. Bell ICR Primaiy Author: John P. Byamukama 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outconme: U Sustainability: L Instituitional Development Impact: M Bank Performance: U Borrower Performance: U QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The Mozambique Financial Sector Capacity Building Project (FSCBP) was designed to develop and strengthen the institutions charged with implementing the policy and institutional reforms in the financial sector, agreed under the Second Economic Recovery Credit (SERC), so that financial services could be provided in an efficient and effective manner. The SERC was desigined in 1993 as a policy-based and institutional building instrument to support the govermment strategy of creating an environment for rapid economic recovery and sustained growth following almost twenty years of civil war after independence. The financial sector had been identified as a key constraint to growth and to address this problem two of the components of the SERC focused on: (i) strengthening of the central bank to enable it play its role of administering monetary policy and carrying out effective regulation and supervision of the financial sector; and (ii) restructuring the financial sector, especially the state-owned banks, which was a source of excessive monetary expansion that created macroeconomic instability. The Government recognized that there was a weak human resource capacity in the country to implement these activities and therefore requested the World Bank for the FSCBP as a companion credit to the SERC to develop the required human resource capabilities in the sector. The most pertinent institution in this regard was the central bank, Bank of Mozambique, which was one of the weakest institutions in the financial sector at the inception of the FSCBP in 1994. When Mozambique's economic rehabilitation program was introduced in 1987, the Bank of Mozambique (BoM) was a typical mono-bank in a centrally-planned economy perfonning both central and commercial banking functions, including acting as the payments and accounting ann of the Ministry of Finance. This dual and conflicting role for BoM made the conduct of monetary policy almost impossible and was a source of macroeconomic instability. With the liberalization of entry of private banks into the financial sector following successive adjustment operations, it became vitally important to create an independent central bank with adequately trained staff to supervise the banking system and to formulate and conduct monetary policy. In response to this urgent need, a decision was made in 1991 to separate and hive off the commercial activities of the BoM into the Banco Commercial de Mozambique (BCM). However, the majority of the staff in the central bank and elsewhere in the financial sector had very limited formal education and their training had mainly been acquired in a period when the banking system operated under a govermnent plan rather than in a free market environment. It was thus the government's priority to develop skills in macro-monetary management, supervision of the banking system and foreign exchange management. In addition, the staff of the commercial banks also needed training to be able to undertake banking business in a deregulated environment. The main components of the FSCBP included: (a) training central bank staff so that they could undertake better macro-monetary management, prudential supervision of the financial sector, and manage a more effective system of foreign exchange allocation; (b) training staff in the commercial banks so that they could more effectively provide trade finance to importers, appraise credit applications and, for higher level staff in the banks, provide more effective overall management; (c) training a core of legal professionals in the central bank and the Ministry of Finance to review and re-draft financial and other related legislation for its applicability in a deregulated environment and to also strengthen legal systems, which could beneficially impact upon the overall operation of the financial system; (d) supporting institution building within the financial sector, through the recruitment of technical assistance experts who could, in large part, train local staff and help develop local competences; and (e) studying certain aspects of the financial sector in greater depth to provide better understanding of possible policy alternatives. - 2 - The design of the FSCBP was in line with the Bank's country assistance strategy of poverty reduction and increased self-reliance in the long run, beginning with the policy and institutional refonns needed for long term growth. The Credit was in essence laying a foundation for successful financial sector strengthening and restructuring, which was necessary for macroeconomic stability that was in turn a prerequisite for sustained growth. In addition, the state-owned banks were making losses through poor lending practices and causing a drain on fiscal resources through their recapitalizations. Turning these banks into profitable commercial entities implied big savings on budgetary resources that could be channeled into priority sectors like infrastructure, health and education. The design was a consultative process in which the project team had extensive consultations with the central bank, bilateral donors already involved in banking training, the management of the banks in Mozambique and the banks' staff on the types of training which were required. A questionnaire of bank training needs was provided to the banks and the responses were used as an input into project preparation. Within the World Bank, the project team received guidance and constructive comments from the Regional Management Team on the content of the project at all stages of project preparation. 3.2 Revised Objective: N.A. 3.3 Original Components: Central Bank Training. Staff at the Bank of Mozambique (BoM) were to be trained in the core functions of conduct of monetary policy in a liberalized environment, banking supervision, management and control of foreign exchange, accounting, legal issues, and human resource management. An important component of the training was to consist of on-the-job training from long term and short term technical experts assigned to the relevant departments of BoM. In addition, this was to be combined with short and long tenn courses and seminars held at home and overseas, and attachments of staff overseas to provide them with a deeper understanding of macroeconomics, monetary policy, the economics of financial markets, and quantitative methods. The training program was designed to cover entry level staff and intermediate level staff with university education or extensive practical experience, and senior management level staff. Where relevant and necessary, this training would also be extended to the staff of the Ministry of Finance. Given that Mozambique had no history of proper central banking and entry into the financial sector had just been liberalized, the proposed training was highly relevant to central bank staff, especially for the three core departments of banking supervision, economics and research, and accounts. The prevailing low level of education for staff in the financial sector justified the inclusion of basic entry level courses in economics, banking, English and computer literacy required by the staff for day-to-day operations. As of December 1992, out of a total professional staff of 239 at BoM, only 58 staff had completed secondary education and 42 staff had some tertiary education. The intermediate level and senior level courses were well defined for the purposes of providing to middle-level officers the basic conceptual framework that underlies monetary policy, and providing to senior management an understanding of the core functions and management of a central bank respectively. In addition, the inclusion in the project of attachments of senior staff to other central banks in the region and overseas was also a good method of imparting practical experience and international exposure to staff on the operations of a well- functioning central bank. A useful feature of this training component was the plan to support the Borrower to take advantage of the protocol arrangement that the BoM had with Banco de Portugal for the latter to provide BoM with central banking talent and training facilities. -3 - Commercial Bank Training. Short term courses to meet the immediate specific skill requirements of commercial banks would be identified. The Credit would support training programs in bank credit analysis, project appraisal techniques, documentary credits, trade finance and management techniques. It would also provide a limited amount of institutional support for the Bankers' Institute that was being developed in conjunction with the local banks and the Government of France. The IDA program of short term courses would supplement the French Government program of developing longer-term banking courses and would aim to achieve full cost recovery on all the commercial banking courses by the close of the FSCBP. With the history of a centrally planned economy and low education levels achieved during the pre-Independence period, bankers in Mozambique lacked the skills to operate in a competitive banking system. The decision to include training of commercial bank staff in the project was therefore a prudent one. The training would provide senior management of the banks with skills in internal organization and administration, designing bank strategies and customer service. The project team realized that there was a need to change the attitudes of bank management regarding business philosophy and operating style. This was deemed necessary to improve the banks' efficiency, profitability, and product development. Additionally, training was also deemed essential for junior and mid-level officers in fundamentals of bank credit analysis, project appraisal, documentary credits and trade finance as these are key ingredients in selecting a viable loan portfolio. The design of this component considered the issue of sustainability of the comnmercial banks' training program and included support for the strengthening of the newly established local Bankers' Training Institute, the Instituto de Formacao Bancaria de Mozambique (IFBM) through which the training would be carried out. The IFBM would be partly funded by the Credit and the share of contribution by the conmnercial banks to the training costs would be gradually increased over the project period until full cost recovery was achieved. However, one issue that the project team did not include in the project design or consider as a risk was the possibility of the commercial banks refusing or not being able to invest in staff training. Strengthening Legal Financial Capabilities. This component was a continuation and expansion of some modest legal assistance provided to BoM under the Economic and Financial Management Technical Assistance Project (Cr. 2066-MOZ). Under this component, legal training in the financial sector would be conducted to increase the number of well-trained lawyers so as to strengthen the overall legal financial environment and to create capacity to revise the existing financial sector laws and complete existing draft legislation in order to build a modem and efficient financial legal framnework. The SERC program specifically called for revisions in legislation relating to foreign exchange control, insurance, pension and provident funds, and money and capital markets development for which this legal expertise was required. This component would also support the hiring of foreign legal advisory services specialized in sophisticated areas in the ongoing financial legal reforms. These foreign lawyers would be required to provide on-the-job training to Mozambican lawyers to maximize the results of their assignments. Additionally, further aspects of institutional development as well as dissemination of the law would be tackled. Institutional development would involve acquisition of basic office equipment and materials for the legal departnent of BoM and the Legal Studies Department of MoF, including legal software, photocopiers, and legal literature for use in the training program. The project would also support the establishment and operation of the Cart6rio Notarial at BoM through the employment of local professionals and assistants. Dissemination would involve publication of financial laws and regulations, design of standard legal documentation and contracts, and publication of a Tax Legal Journal. The legal profession and institutions in Mozambique were weak and lacked the technical skills to undertake the task of overhauling the legal system in that period of economic and political reform. Specifically, the - 4 - legal staff working in the financial sector were very few and lacked formal training in banking and financial matters. They were also overburdened with conflicting responsibilities of drafting and implementing the financial legislation, and developing banking practices and contract documentation. Moreover, the laws in force were scarcely known by both the legal staff responsible for their application and enforcement, and the public at large. The project team therefore responded proactively by including legal training, institutional development and dissemination in this component. The importance of an appropriate legal environment to the efficient operation of the financial sector was recognized. Activities under this component were accordingly allocated 25 percent of the project resources. Institutional Development. Technical advisors to support the implementation of the SERC program would be provided to the Research, Banking Supervision and Foreign Exchange Control departments of BoM, with particular emphasis on the transfer of skills to local counterparts. This would include a swat team of experienced bank supervisors to train a cadre of local Mozambican staff on-the-job while simultaneously undertaking a loan portfolio review of the commercial banks. A banking supervision advisor would also be recruited to assist in drafting regulations and developing a system of off-site reporting for the commercial banks. Simultaneously, the development of strategic plans and subsequent restructuring work in the two state-owned banks would also be financed under the credit, including the carrying out of manpower audits, development of job descriptions and drafting of a manpower development plan. This component would specifically finance a management support team for the Banco Commercial de Mozambique (BCM) which was in poor financial health. The management team would be responsible for the implementation of BCM's strategic plan. Other short term experts would also be recruited to support the legal staff of BoM in developing the legal framework for insurance, pensions, and money and capital markets and to develop a better operating payments and clearing system in BoM. The component would also provide support for the development of accounting and audit capacities in BoM as well as the auditing, for the first time, of the BoM's accounts (for the year 1993). Given the weak human resource capacity in the financial sector and the fact that the central bank was still in its infancy, the project team made the right choice in deciding that provision of technical assistance (TA) was vital to the successful implementation of the SERC program. Additionally, the project team and the Borrower were careful during the design of the project to emphasize that these experts would be required to impart skills on local counterpart staff thus consolidating the gains from the training component of the Project. The banking supervision department of BoM, which was newly created thus needed experienced bank supervisors to guide the newly trained staff in the day-to-day activities of the department, and to develop regulations and supervisory methodologies. The preparation of the first accounts of BoM following its separation from BCM was also a task that needed experienced experts. One contradiction in the design however was the emphasis on almost all the TA being of a short-term nature while expecting it to create local capacities. It is very difficult for an expert to have a significant and lasting impact on local counter part staff after being in a host country for less than six months. The two state-owned banks, the BCM and the Banco Popular de Desenvolvimento (BPD), were in poor financial condition and were the source of monetary instability through excessive lending to non-viable parastatals. Any efforts to address macro and financial sector instabilities therefore had to focus on a lasting solution for the health of these two banks. Despite an earlier recommendation by a World Bank Financial Sector Study in 1992 that the restructuring of BCM would be a very costly task and with minimal chances of success, the project still went ahead with this option. The 1992 study had recommended that BCM and BPD be liquidated and their assets be sold off to other banks and private sector buyers. It had argued against restructuring because of the high levels of recapitalization that would be required to - 5 - bring these banks to the minimum required capital and the fact that government could not afford to pay these amounts. On the other hand, capital from foreign investors could help recapitalize the banks and reduce the government's financial burden. However, the govermnent was not prepared to consider the liquidation or the privatization option. The project team therefore settled for the "second best" alternative of restructuring the two state-owned banks and hiring a management support team to help stem the losses at BCM. Given the risky nature of the restructuring task and the costs involved (the management support team was allocated 20 percent of the total project cost), the foreign management team should have been give full control of the activities of BCM and made answerable for the results of the restructuring task. Instead, they were supposed to work alongside the old BCM management. This arrangement was likely to make the management team less effective and gave them no incentive to perform to the best of their ability. The project team also did not spell out clearly in the preparation documents the plan of action for BPD. Financial Sector Studies. The Credit would fund a series of studies that would be deemed essential for informed decisions to be made during the financial sector reform program. Some of these studies had been identified under the SERC program and, included, among others, the review of interest rate developments, study of deposit mobilization, review of the National Social Security Scheme, study on the issuance of Treasury Bills, the viability of credit unions in Mozambique, study on the development of leasing activities and agricultural credit. The credit was flexible and allowed for any additional study and review, which would become evident during the implementation of the financial sector reform program. Table 1: Original Project Components Component Cost (in US$ million) Central Bank Training 1.92 Commercial Bank Training 1.44 Strengthening Legal Financial Capabilities 2.72 Institutional Development 4.02 Financial Sector Studies 0.41 TOTAL* . 10.51 * IDA's contribution was US$9 million, while the Swiss Development Cooperation was to provide US$1 million and GOM to provide US$0.5 million. 3.4 Reivised Co0nponents: The project components were not revised. It remained with five components although some activities which had not been envisaged at the time of appraisal were later added into the project thus necessitating re-allocation of credit proceeds in the different disbursement categories in the Development Credit Agreement. The allocation for consultant services was reduced from SDR 4.82 million to SDR 3.35 million, while the allocation for equipment, materials and supplies was increased from SDR 0.31 million to SDR 1.61 million. A new disbursement category of civil works with an allocation of SDR 0.4 million was added into the Development Credit Agreement. The additional activities included: (i) hiring of sales advisors for the privatization of the two state-owned banks (under the institutional development component), after a change in strategy had been agreed upon in 1995; (ii) civil works on the library (Documentation Center) of the BoM and IFBM; (iii), support to the Tribunal Administrativo; and (iv) purchase of vehicles for some of the beneficiaries. - 6 - 3.5 Quality at Entry: The Project predates the introduction of the Quality at Entry process into Bank projects. It was thus not evaluated by the Quality Assurance Group (QAG) at entry. The project also predates the introduction of the logical framework approach to project design. Because of this, there was consistent confusion between the development objective and project activities as evidenced in the Memorandum of the President (MOP), which states training as a major objective of the project. However, a number of monitorable perfonnance indicators were identified at appraisal and a project implementation plan drawn up and both were included in the MOP. The project design benefitted from detailed comments from peer reviewers and continuous intemal Bank consultations throughout the preparation and appraisal stages. However, the identification of risks for a project of this nature was not very thorough. Only two minor project risks were identified during preparation: (i) the likelihood of trained staff moving on to other banks or to other private sector institutions; and (ii) the difficulty of identifying and recruiting in a timely manner adequately qualified technical experts in key fields who could speak Portuguese. There was no discussion or mention of the effect that the post-conflict status of Mozambique would have on the overall implementation of the project. The possibility of private operators in commercial banks not being willing or able to invest in staff training was not considered as a risk to the commercial bank training component. Their cooperation was taken as a given. Also, the risks associated with attempting to restructure insolvent state-owned banks were not documented. On the training of banking supervision staff of the BoM, the lack of prompt follow-up actions on the recommendations of bank examiners was not identified as a risk to the sound operations of the banking system. 4. Achievement of Objective and Outputs 4.1 Outconze/achievement of objective: The outcome of the project is rated marginally unsatisfactory with respect to the development objective of strengthening institutions in the financial sector so that financial services could be provided in an efficient and effective manner. While the project was successful in increasing the human resource capacity of the central bank and creating the conditions for stable monetary conditions (following the privatization of BCM), other financial sector institutions remained weak and the provision of financial services was neither efficient nor effective. The BoM itself created a core cadre of bank supervisors to carry out on-site bank examinations but the BoM was not able to enforce the recommendations arising from these examinations. By the middle of 1999, the financial sector was sliding into a state of crisis because the two privatized banks (BCM and BPD) were facing adverse financial conditions. The two banks representing about 47 percent of the total market share of banks in Mozambique at the time were declared insolvent in 2000. Some estimates put the recapitalization requirements of both banks at that time to the tune of US$200 million. The two banks were recapitalized by the Government at the beginning of 2001. BCM has now been taken over by Banco Commercial Portugues (BCP) of Portugal which also owns Banco Intemacional de Mocambique (BIM), the second largest bank in Mozambique. The central bank intervened in BPD (renamned Banco Astral) which has now been bought by Amalgamated Bank of South Africa (ABSA). Although the number of banks and other financial intermediaries in Mozambique have increased, bank lending spreads have remained relatively high in the range of 18.9 percent in 1997 to 13.6 percent per annum in 2000. This is largely because of high costs of overheads and non-performing loans in the two privatized banks, which provided a break on competitive pressure, and inadequate contract enforcement - 7 - laws and accounting systems that impeded financial intermediation. The component for the training of staff of the commercial banks also did not achieve the intended objective of providing the staff with skills in key areas of the banks' activities. It had been estimated that over the project's five year period, over 1,000 commercial bank staff would be trained at the IFBM. After seven years, by the middle of 2001, only 150 staff (including staff of BoM) had been trained at the IFBM. The FSCBP project suffered from implementation delays in many of the activities. Three years after the project became effective, only about 33 percent of the Credit had been disbursed. By this time, the SEC program, for which the FSCBP was supposed to provide implementation support for the financial sector component, was closing. Implementation progress picked up in 1998 and 1999 and during this period about US$4.8 million were disbursed bringing total disbursements to about 90 percent of the Credit amount. The closing date of the Credit had to be extended twice from June 30, 2000 to December 31, 2000 and to March 31, 2001 so that some outstanding project activities could be completed. In spite of the outcome being rated marginally unsatisfactory, the project recorded some substantial improvements in a number of areas. As mentioned above, it was successful in increasing the capacity of the central bank to supervise the financial sector and to conduct monetary policy following the separation of BoM from the commercial activities of BCM. The completion of the separation of the two institutions was a big achievement since the dual role of BoM had previously hampered macroeconomic management. A system of off-site surveillance for commercial banks was established and supervisory methodology for on-site inspections was developed at BoM and these are currently in use. The privatization of the two state-owned banks transformed a state-dominated financial system into a more diversified and competitive system, and eliminated a major source of inflation. When BCM was still state-owned, it was a source of monetary leakages through loans to loss-making parastatals thus creating macroeconomic instability. Annual inflation which had been at about 50 percent when BCM was privatized in July 1996 had fallen to about 4.2 percent a year later and to 1.4 percent in April 1998. As a result of the project activities, there was also increased human resource capacity in the other departments of BoM and in the Tribunal Administrativo, and an improved legal and regulatory framework for the financial sector. The BoM is now producing timely annual central bank reports that include audited financial statements. Its Economic Studies and Credit Departments also produce quarterly economic bulletins and have introduced the issuance of Treasury Bills as an instrument of monetary policy. The Tribunal Administrativo's staff and those of government departments have leamt the correct ways to present accounts for the Tribunal's review. The Tribunal now has 8 qualified accountants and was capable of auditing the government's accounts for the first time ever in 2000. The Bolsa de Valores (Stock Exchange) has also been established and is currently operational although its human resource capacity is still weak. 4.2 Outputs by components: Training for Central Bank Staff (Appraisal Estimate - US$1.92 million; Actual - US$1.42 million) This is a component in which the achievement of objectives was satisfactory. A core set of economics courses and intermediate level training were conducted for BoM staff at the beginning of the project and 4 staff were attached to the South African Reserve Bank and Bank of Portugal for periods of one to two months. The attachments enabled the staff to learn and appreciate the operations of a well-functioning central bank. Eleven staff completed masters degree courses in economics at the University of London and 6 technicians also received masters degree courses in information systems and most of these staff are still with the central bank. However, because post graduate training did not start until after mid 1998, nine BoM lawyers on training for masters degrees in law have not yet completed their courses and the BoM is - 8 - going to fund the remaining costs for this training. BoM staff also attended several regional seminars and conferences enabling them to interact with their counterparts from other central banks in the region and leam from each other's experiences. The credit also financed training in the English language for BoM staff. In the area of banking supervision, short-term consultants provided on-the-job training while at the same time developing supervision methodology for on-site examinations and regulations for off-site surveillance. The size of the banking supervision department has grown to 22 professionals and on-site examination and off-site surveillance are reasonably well executed. However, the decision to make the contracts of the consultants of a short term nature led to disruptions in the training programs since the time the consultants stayed in Mozambique was not long enough for them to impart adequate skills on the staff. The increasing number of English-speaking bank managers also hampers on-site examination as some of the examiners cannot communicate effectively, calling for more intensive training in English communication skills. The project provided funding to purchase some computers for use by the bank examiners. The BoM did not however follow-up and enforce the recommendations made by the bank examiners leading to progressive deterioration of the financial condition of some banks in the sector. A decision was made during project implementation to replace the formal training planned for senior management of BoM with a Regional Economists' Conference in Maputo. Given the experience with conferences and their value added, this was probably not a good idea. Nevertheless, the conference was never eventually carried out although some discussion papers had been prepared by the University (UEM). Senior management of BoM therefore never got the planned training to improve their knowledge on the management and organization of a central bank, the function of bank supervision, the transition from direct to indirect monetary control, options of financing fiscal deficits and their implications to monetary policy, and the development of short term money markets. One issue that was identified during implementation was the need to develop a comprehensive and integrated human resource development master plan for the whole central bank. Although the credit had resources to finance a consultant to develop such a plan, the master plan was never developed. Most of the training in BoM was therefore carried out on an ad hoc basis. Training for Commercial Banks Staff (Appraisal Estimate - US$1.44 million; Actual - US$0.33 million) This component did not achieve the objectives for which it had been designed. The start of the training was delayed for more than a year because the IFBM which was supposed to conduct the training first concentrated on designing a program of long distance learning. Later when training for the banks started, the commercial banks were questioning the rationale of gradually increasing the share of costs they had to pay for the training conducted by the IFBM. The banks did not appreciate the importance of running the IFBM on a commercial basis and training was halted for a period of time. While the project had envisaged that the IFBM would train about 1000 commercial bank staff over five years (1994-1998), the institute has trained about 150 staff to date. The risk identified in this component at the time of project design was that the commercial banks would lose their trained staff to other private sector companies.The payment for training by the commercial banks had been envisaged as a mitigating factor to provide an incentive for the banks to retain staff after they had invested in the staffs' training. The risk however surfaced in a different way with the commercial banks not embracing the training program. Funding for strengthening the institutional set up of the IFBM was also provided under this component. The IFBM was originally supposed to be located at Matola, a few miles outside of Maputo, but was realocated in 1995 to downtown Maputo. This was thought to be a good decision as transforming the site in -9- Matola into a usable complex required more capital expenditure. After the IFBM had discovered that the space it had rented in Maputo was not enough, the BoM offered it space in one of its buildings. The contract to renovate and transform this space into lecture rooms took very long to award because the Implementing Agency had problems with following the correct IDA bidding procedures. Work on this contract started in February 2000, four months before the initial closing date. Renovations have now been completed. Strengthening Legal Financial Capacities (Appraisal Estimate - US$2.72 million; Actual - US$0.33 million) This is another component in which the achievement of objectives was satisfactory. Work under this component started at the time of the Project Preparation Facility (PPF). A set of four modules for legal training were conducted within the first year of the project. The Foreign Exchange Act and Banking Law were revised and presented to Parliament and exchange control regulations were reviewed. However, one important activity that took several years to implement was the purchase of a printing press for the Imprensa Nacional to enable the printing of financial sector laws for dissemination. The main problem was that counterpart funding from the Government was not readily available. When the implementation of this activity began in 1998, lack of adherence to procurement procedures delayed the contract for the supply of the printing press but this was finally delivered in April 2000. Institutional Development (Appraisal Estimate - US$4.01 million; Actual - US$6.9 million) The achievement of objectives under this component was unsatisfactory. This was the component with the biggest allocation, accounting for about 45 percent of the Credit. It funded technical advisors to support the implementation of the SERC program, capacity building in various government agencies and the development of strategic plans and the subsequent restructuring and privatizations of the state-owned banks. The original design did not include the privatization of the banks but after a year of managerial and financial restructuring failed to stem the losses of the banks, the Government agreed to privatize the banks. The achievement of objectives under the technical advisors was satisfactory but the activities under the capacity building in governrment agencies and restructuring of state-owned banks were unsatisfactory. Technical advisors were recruited for the Research Department of BoM and the Ministry of Finance. They carried out on-the-job training in monetary policy management and public investment respectively. A swat team was recruited to carry out a rapid on-site supervision of the BCM and the BPD and an external bank supervisor was hired to train the staff of the banking supervision department of BoM and develop bank supervision methodology. The results of the swat team exercise were used to prepare a strategic plan for BCM. Management advisors were contracted for the BCM at the end of 1995 to help with the implementation of its strategic plan.The performance of these advisors was found to be inadequate as BCM continued to lose money despite their presence. The project team recommended a revision of their scope of work in order to make them more effective. The advisors were subsequently put in line positions of Treasury Manager and Credit Manager to help stop the bleeding of BCM as it was being prepared for privatization. The Banco Portugues de Investimento (BPI) was contracted to be the sales advisor for the privatization of BCM. After a few months, the Bank wrote to the Governor of BoM expressing concerns about the BPI contract. There were concerns about the lack of intensity in the marketing of BCM by BPI and an apparent lack of utilization of the expert contracted to help design and market an alternative Government-assisted transaction structure. In addition, there were concerns of conflict of interest for BPI in their possible purchase of Banco Fomento e Exterior (one of the commercial banks known to be interested in purchasing BCM). BCM was eventually privatized in July 1996 with 51 percent of the shares sold to a consortium headed by Mello Group. However, the government remained a significant shareholder with 49 percent of - 10 - the shares. BPI also won the contract for the sales advisor position of the BPD. However, based on the experience of the BPI's contract as privatization advisor for BCM, the BoM negotiated a more stringent contract to hold BPI accountable to a quality transaction. BPD was privatized in March 1997 by selling 60 percent of its shares to a company owned by Malaysian and Mozambican investors. In both of these bank privatizations, the Government retained a significant majority stake that did not permit the new owners to exercise full management control over the activities of the bank. This fact was to prove fatal to the continued operations of these banks a few years later. Both banks became insolvent and have been recapitalized by the Govermment. BCM was eventually taken over by Banco Commercial Portugues and the central bank intervened in BPD (renamed Banco Astral) which has now been bought by Amalgamated Bank of South Africa. Computers, vehicles, office equipment, and furniture were purchased under the project to improve the operational efficiency of the Unidade Tecnica de Coordenacao de Projectos of the MoF, the Departamento de Cooperacao Intemacional, and the Tribuno Administrativo. The BoM's Documentation Center was moved into new premnises refurbished with funding from the Credit and it also acquired books and furniture. These activities were not in the original project design, but were deemed essential by the Government during implementation and were subsequently incorporated into the project. The purchase of a printing press for the Imprensa Nacional to facilitate the printing and dissemination of (financial sector) laws was one of the activities that suffered long implementation delays. The printing press was delivered in April 2000. The issue of the location, refurbishing and equipping of the Instituto Formacao Bancaria de Mocambique (IFBM) was not resolved until 1999. The latter significantly affected the coiunercial banks staff training program which was supposed to be conducted by the IFBM. As mentioned above, the numbers of commercial bank staff trained by IFBM in the last six years is less than a fifth of what had been envisaged during project appraisal. Financial Sector Studies and Project Support (Appraisal Estimate - US$0.41 million; Actual - US$0.33 million) The only disbursements under this component were for project management expenses. The Financial Sector Study that was carried out during project implementation in 2000 was funded by Trust Funds. 4.3 Net Present Value/Economic rate of return: No economic analysis was carried out in the MOP 4.4 Financial rate of return: No Financial Rate of Retum was carried out in the MOP 4.5 Institutional development impact: The project had a positive impact on the BoM where its staff received basic training in economic concepts and post graduate training. The on-the-job training also enhanced the effectiveness of the central bank staff, especially in the banking supervision department as pointed out in the recent Mozambique Financial Sector Study of February 2001. The Tribunal Administrativo and MoF also achieved enhanced human resource capacity. The provision of computers, office equipment and vehicles to various government agencies has also contributed to more efficiency in the way they conduct their operations. - 11 - 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of governinent or implementing agency: Mozambique had just emerged from a prolonged civil war and held its first multi-party democratic elections in October 1994. Whereas these were positive developments, the post-conflict status of the country made foreigners sceptical about the sustainability of the peace process which rendered it difficult to attract high quality buyers for the state-owned banks. There was also a limitation in locating good quality consultants who could speak Portuguese. A lot of potential consultants who could have been ideal for some assignments were hampered by this language constraint. In addition, some project activities, like the training of staff of the commercial banks, included private sector operators over whose decisions the Govermnent had no control. 5.2 Factors generally subject to government control: There were delays in implementation of some project activities which resulted from lack of counterpart funds from the Government, despite the fact that the amounts involved were not very large. Also, the Govenunent did not intervene or require BoM to effectively deal with the causes of implementation delays although the BoM as implementing agency was answerable to the Government. 5.3 Factors generally subject to implementing agency control: Previous experience with Bank projects in Mozambique had shown that the requirement for the Minister of Finance to approve contracts on all Bank-funded projects led to excessive delays after contract negotiations had been completed. In the FSCBP, the Government was requested and agreed at the outset of the project to delegate the Minister of Finance's responsibility for approving contracts under this project to the Governor of the central bank. This made it easier for the consultants to begin work promptly once the negotiations were completed. As mentioned earlier, the establishment of an internet hook-up between the project coordinator and the task manager enabled constant communication between the two and greatly helped to bridge the gap in the capacity weaknesses associated with the implementing agency. The project was faced with disbursement delays throughout most of its life due largely to the inability of the implementing agency to adhere to Bank procurement procedures. At the beginning of the project, there were concerns that the project administrator assigned from the Bank of Mozambique did not have sufficient time to attend to project matters. A full time project coordinator was appointed at the beginning of 1996. Although there were improvements in project management, procurement and implementation progress reporting issues remained problematic. The delays arising from the slow procurement process necessitated the extension of the closing date twice. 5.4 Costs andfinancing: The original cost of the project was estimated at US$10.5 million. Of this amount, the IDA credit would provide US$9 million, the Swiss Development Cooperation (SDC) would provide USSI million and the Government of Mozambique would provide US$0.5 million. The Project which became effective in August 1994 was supposed to close on December 31, 1999. However, because of implementation delays, the closing date was extended twice from June 30, 2000 to December 31, 2000 and then to March 31, 2001. Total project costs at completion were US$9.7 million, representing 92.4 percent of the originally estimated project cost. By the closing date, the World Bank had disbursed US$8.48 million or about 94.3 percent of the IDA Credit, the SDC had disbursed US$1.21 million and the Government of Mozambique had provided US$0.01 million. - 12 - 6. Sustainability 6. 1 Rationale/for sustainability rating: The training component in the BoM has created increased human resource capacity in the central bank and most of the staff trained have been retained so far. The same applies to the Tribunal Administrativo which has generated enough capacity and was able in 2000 to audit government accounts for the first time ever. The Government has made a fundamental shift in its attitude towards a privately-run financial sector and its policy on the ownership of financial institutions is now clearly defined with the Government only responsible for the creation of an enabling environment. This was demonstrated when the BoM was able to deal with the financial crisis created by the problems of BCM and BPD through changing the private ownership of the two banks rather than the Government repossessing these privatized banks. Several institutions that have an impact on the performance of the financial sector have been established or provided with support from the project and are in the process of becoming financially self-sustaining. These include the Bolsa de Valores, the Imprensa Nacional and the IFBM. 6.2 Transition arrangement to regular operations: The BoM initiated transition arrangements to regular operations in March 1999 by terrninating the contract of the project coordinator which was being funded from the credit and incorporating responsibility for the remaining project activities into its mainstream activities. Responsibility for project activities was assigned to the International Relations Department. The IFBM has developed a substantial program for in-house training and distance learning activities as one of the ways to become financially self-sustaining. The Bolsa de Valores whose establishment in 1999 was partly funded by the project has six bonds listed on the sock exchange and the first equity was listed in November 2001. The Bank's Financial Sector Study of February 2001 identified a number of areas that require further strengthening if the Mozambican financial sector has to provide efficient intennediation. These include reduction of inefficiencies in the banking system (control of operating costs and better risk control systems), strengthening contract enforcement systems, more independence to the BoM in its supervisory role, improved liquidity management, revision of the commercial code, strengthening the judiciary, and development of contractual savings institutions. The agenda is broad and the issues identified in the study need to be addressed as soon as possible. A number of activities in this project suffered implementation delays and the impact of their implementation is yet to register. It would be prudent to wait another eighteen months before an impact evaluation can be carried out by OED. 7. Bank and Borrower Performance Bank 7.1 Lending: Bank performance in the identification, preparation and appraisal of the project was satisfactory. The project design was based upon the Government's specific request to increase human resource capacity in the financial sector, especially in the BoM, in order to successfully implement the fmancial sector component of the SERC program. A series of interactions by the project team with the stakeholders on the specific requirements of capacity building in the financial sector, and with the three major bilateral donors involved in the sector at the time (France, Switzerland and Portugal), provided inputs into the final project design. There were extensive consultations within the Bank from the identification up to the appraisal stages and useful comments were received from peer reviewers, regional management and country team - 13 - members that helped improve the final content of the project. In order to test the Government's commitment to the project, the Bank required the Government to carry out certain actions prior to negotiations and Board presentation, which were carried out in an expedited manner. The conditions for negotiation included requesting for funding under the PPF to develop a strategic plan for BCM, selection of a firm to provide a swat team for banking supervision, approval of a contract with the legal firm to provide support to the legal department of the BoM, and selecting an auditor for the project. The latter condition was waived at the Government's request and was instead instituted as a condition for Board presentation. Other conditions of Board presentation included the BoM preparing a satisfactory plan to reverse the dormant status of special accounts on other Bank projects by submitting replenishment requests and refunding all outstanding amounts on closed credits. The project which was pre-appraised in July 1993, was appraised in October 1993, approved by the Board in April 1994 and became effective in August 1994. Two project risks were identified during preparation: (i) the likelihood of trained staff moving on to other banks or to other private sector institutions; and (ii) the difficulty of identifying and recruiting in a timely manner adequately qualified Portuguese speaking technical experts in key fields. To mitigate the first risk, it was argued that staff moving from Bank of Mozambique to other banks were not a particular problem since the expertise would still remain within the financial sector. In any case, staff at the Bank of Mozambique were considered to be less mobile than the staff of other quasi-public institutions because of the relatively better conditions of service offered by the central bank. In order to retain the trained staff of the commercial banks, the Bank team proposed that the banks should be made to pay for the training on a graduated basis, up to full cost recovery by the fifth year of the program, so as to make the management of the banks focus on incentives to retain the staff on whom they have incurred training costs. With regard to the recruitment of Portuguese speaking experts, the Government was advised to start work on recruiting key individuals immediately before the project even became effective. However, the identification of risks was not exhaustive as risks associated with the post-conflict status of the country, restructuring of state-owned banks, and training of commercial bank staff were not considered. 7.2 Suipervision: The supervision of the project by the Bank was unsatisfactory. It had been recognized during appraisal that the implementing agency had capacity weaknesses and thus needed adequate support based at the Country Office in Maputo. At the beginning, a local staff was recruited to help with project implementation. The project team also decided to establish an intemet connection between the Project Coordinator and the Bank so as to increase the efficiency of communication and support provided to the implementing agency. These measures did not improve the effectiveness of the implementing agency and progress remained slow. The Task Manager was relocated from Washington to the Maputo office in order to provide hands-on support to the Project Coordinator. This however did not accelerate the speed of implementation substantially. There were on average two official supervision missions per year irivolving headquarter staff, field office staff and consultants qualified in the relevant disciplines. A total of 11 supervision missions were carried out throughout the life of the project (see Annex 4). Project implementation progress was reported in detailed Aide-memoire, which also highlighted the outstanding issues and suggested actions. However, a number of issues tended to remain outstanding for long periods of time and the project team did not devise proactive ways of assisting the Implementing Agency to address them. In addition, information in mission Aide-memoire was not properly transferred into the PSRs and some of the ratings given in these reports were rather optimistic and not consistent with the issues raised in the Aide-memoire. Although the project suffered implementation delays, implementation progress was rated satisfactory throughout the life of the project with the exception of one occasion. Another case of this disconnect was when the state-owned banks were privatized (a big achievement itself) and the Development Objective rating of the project was upgraded to Highly Satisfactory only on this basis in spite of the fact that the performance on other - 14 - components of the project had mixed results. The above weakness not withstanding, the project team was flexible and responsive to the Borrower's concerns and suggestions. The Development Credit Agreement (DCA) was amended on several occasions to incorporate activities not included in the original project design but which the Borrower found necessary during implementation and to extend the closing date of the Credit. More importantly, when the Government finally accepted that restructuring of the state-owned banks was not working and the strategy was changed to privatization of the banks, the Bank responded positively and provided resources for the sales advisors which had not originally been envisaged in the project design. The Bank also carried out a study in 1996 which showed that privatization of BPD was not likely to be successful given the poor financial position the bank was in. However, the project team did not document in the PSRs the risks associated with the privatization of these highly insolvent banks. 7.3 Over all Bank perfornmance: Overall Bank performance was unsatisfactory, although this is on the thin borderline between "marginally satisfactory" and "unsatisfactory" . The project team sought the input of the stakeholders during the early stages of project preparation to ensure that the project was relevant to the needs of the Borrower. It also coordinated with the major donors who were involved in the area of banking training at the time. Relying on previous experience with Bank projects in Mozambique, the team also recognized the likely limitations in the capacity of the implementing agency and thus made sure that there was always a member of the project team in the Maputo office to support the Project Coordinator. However, the project team did not ensure that issues or potential implementation problems identified during supervision missions were addressed in a timely manner. Procurement problems persisted throughout the life of the project and the project team did not find proactive ways to address this. The limited cooperation by the Government in the privatization of the banks was also not raised as a major issue by the project team. On the positive side, throughout the supervision period, the Bank team was flexible in its response to the Borrower's requirements as exemplified by the re-allocation of Credit proceeds on two occasions and the extension of the closing date of the Credit, both at the request of the Borrower. Borrower 7.4 Preparation: The Borrower performance in project preparation was satisfactory. High level officials in the central bank and the Ministry of Finance were involved in the identification process which culminated in the solicitation of input from other stakeholders in the financial sector. As mentioned earlier, the Borrower was asked to carry out specific actions prior to negotiations and Board presentation. All these were met in a timely basis except one condition of negotiation (appointment of an external auditor for the credit) which was shifted to a condition of Board presentation. The responsiveness of the Borrower made it possible for the credit to be prepared, appraised and approved in less than a year. 7.5 Government implementation performnance: The Government's performance during implementation was unsatisfactory. While the Government made important adjustments in its position during implementation (the most important of these adjustments was shifting from the restructuring of state-owned banks to privatization on an "as is" basis), it did not cooperate fully with the Bank in some areas, especially with regard to the privatization of banks. The Government did not impress upon the sales advisor the need to put a premium on the quality of the identified buyers. There were also delays in the provision of counterpart funds which affected the speed of implementation of the Imprensa Nacional activity of buying a printing press to facilitate the dissemination of financial sector laws. - 15- However, the Government's shift to a privatization strategy yielded benefits to the country. Following the privatization of the two banks which were a major source of excessive monetary growth, inflation was controlled and there was improved macroeconomic stability. 7.6 Implemnenting Agency: The performance of the implementing agency was unsatisfactory. Responsibility for project coordination was initially entrusted to the Human Resources Department of BoM. However, within the first year of project implementation, it was evident that the coordinator did not have sufficient time to attend to project matters. There was no adequate follow-up on issues identified during supervision missions and there were continuous delays in contracting largely because the project coordinator could not follow the Bank's procurement procedures properly. This led to persistently low disbursement figures during the first three years of the project. A full time project coordinator was appointed at the beginning of 1996. Although there were improvements in overall project management, the problem of lack of follow-up on issues identified during supervision missions and failure to follow procurement guidelines persisted. The quarterly implementation progress reports which had been agreed at negotiations were not forthcoming and the privatization advisor of the first bank privatization was not properly managed. There were complaints of lack of information on what the privatization advisor was doing, how poorly the marketing of the transaction was carried out and claims of conflict of interest on the part of the privatization advisor. As a result of these problems, the Development Objective and the Implementation Progress ratings of the project were downgraded to "Unsatisfactory" at one point in May 1996 (see Annex 4). 7.7 Overall Borrowver performance: The overall performance of the Borrower was unsatisfactory. Although the Borrower remained committed to the objectives of the project and was engaged in continuous dialogue with the Bank on policy issues, there were instances where information affecting the financial sector reform program was not freely shared with the Bank. The Borrower also did little to solve the problems that caused delays in implementation progress. The implementing agency did not carry out adequate follow-up on the issues raised and actions recommended by the Bank's supervision missions. Several issues remained outstanding for a number of years. The implementing agency's performance was largely responsible for the delays in some components. 8. Lessons Learned Several lessons can be learned from the implementation of this project: * In the privatization of state-owned banks, more attention should be paid to the quality of the privatizations. The emphasis should be on a transparent process that will bring in an investor of high integrity and reputation rather than on completing the privatization process as fast as possible. When potential buyers have been identified, the central bank should perform a fit and proper test on the buyers prior to the approval of the sale and issuance of the banking license. * The removal of political influence in the banks' day to day operations should be a top priority during privatization but this was not the case in Mozambique. In BCM and BPD, the Government remained a significant minority shareholder with 49 percent and 40 percent stakes respectively, meaning that the new owners did not have full control over the activities of the bank. They did not have the free hand to make the staff reductions that they wanted to make. In both banks, - 16 - Mozambican political interests were involved behind the screen of holding companies. The continued politicization of the banks after 'privatization' meant that they never improved credit controls and efficiency as would have happened under true, responsible, private ownership. In effect, the banks were never transformed into proper commercial entities and it was just a matter of time before the cost of political influence spilled over into crisis. * It is important to determine whether conditions in the country are conducive to privatization of banks and whether the Authorities believe in the policy of privatization. There are instances when the Authorities are pushed into privatization prematurely and they agree merely to meet loan conditionalities while they actually do not believe in the policy of privatization. Conversely, if the Bank believes that the only viable option is the liquidation of a state-owned bank, it should not settle for the second-best option which is risky, costly and not likely to work. * The Project was declared effective when it was clear that the capacity of the implementing agency was limited. This was largely responsible for the excessive delays in most of the activities. More emphasis should have been placed on implementation readiness during project appraisal. Since it was important that the project be implemented immediately, an experienced project manager could have been hired for the first two years of the project to give some momentum to the implementation process while also training the local counterpart in the implementing agency. * The FSCBP was designed to build capacity for implementing the financial sector component of the SERC program. However, the timing was such that the two Credits became effective within a month of each other. There was therefore still no capacity when the SERC became effective. In fact, because of implementation delays faced by the FSCBP, the SERC program closed just as the implementation of most components of the FSCBP was beginning. Technical Assistance projects supporting implementation of adjustment programs need to be launched at least two years before the adjustment operation so that some minimum capacity is developed first. * There is need to be selective about projects whose management should be decentralized to the country offices and those that should be managed from headquarters. Projects that involve political sensitivities like the privatization of large state-owned banks should ideally be managed from headquarters. For projects managed from country offices, there needs to be constant communication between the field and headquarters on all issues of policy dialogue and project implementation. Because of the spatial proximity between the task team leader (TTL) and the Borrower, some important decisions and discussions and/or developments in the project tend not to be documented. In this particular project, there is very little documentation in the project files on the dialogue between the Bank and the Borrower during the process of changing the strategy from restructuring to privatization of the state-owned banks. * For TA loans which have a big training component, development of a human resource master plan should be carried out during appraisal and probably made a condition for negotiations or Board presentation. As happened in this project, if this is delayed until the project becomes effective, there is a danger that the Borrower will use the resources to fund ad hoc training needs which tend to be unplanned and haphazard * For TA expertise to impart adequate mentoring on the local counterpart staff, short sojoums of less - 17- than three months in the host country are too short for any lasting impact. For TA that also focuses on training local staff, longer stays of up to eighteen months should be recommended in order to provide some continuity. 9. Partner Comments (a) Borrower/implementing agency: The Borrower has prepared a contribution to the ICR which is attached in Annex 7 at the end of this report. There is acknowledgement of the increased human resource capacity and institutional development in the financial sector, as a result of this project. The government's contribution points out that one of the constraints in the implementation of the project was the limited knowledge about World Bank procurement procedures. It also points out that there were delays in disbursements by the Bank's Disbursements Department. It then concludes that the achievements from the project need to be consolidated and recommends a follow-on IDA credit for further development of the financial sector. (D) Cofinanciers. (c) Other partners (NGOs/private sector): N.A. 10. Additional Information N.A. - 18 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate a) Well trained staff of Banco de This project predates the Log Frame era. No A total of 270 staff of BoM received training, Mogambique, the central bank); Log Frame was prepared for the operation; with 17 of them attaining Masters degrees. There were no performance indicators tracked in the PSRs (b) Strong capabilities in BoM in the areas On-site examination and off-site surveillance of banking supervision, statistics, research, of banks is currently in place; The Economic accounting, MIS, etc; Studies department now prepares quarterly economic bulletins and the BoM's annual financial statements are now prepared (c) Development of a small stock exchange The Bolsa Volares is now operational and and the development of markets in monetary has six bonds and one equity listed. The instruments such as T-Bills; auction of treasury bills has been introduced. (d) Development of strong, and well The rehabilitation of lecture rooms for the functioning training institutes for commercial IFBM has been completed and furniture and bankers and other financial institution equipment procured and installed. players; (e) Support the Ministry of Finance in its A consultant was hired and provided TA and various roles -- particularly (but not trained relevant staff of the MoF in public exclusively) as they relate to the broadening investment. Vehicles, computers, office and deepening of the financial sector; equipment and furniture were also purchased and helped improve the effectiveness of the staff. (f) Support the Administrative Tribunal in its The Tribunal now has 8 qualified accounting and auditing function; accountants (from zero previously) and has trained its staff and those of government departments in correct ways of presenting government accounts for review and approval by the Tribunal (g) Increased soundness of the banking Non-performing loans for BCM and Banco system (level of non-performing loans) Austral are around 27% and 21% of loan assets respectively; for other banks the average ratio of non-performing loans is less than 10 percent of their loan assets. The BCM and Austral financial condition created a financial crisis in 2000. Output Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate Number of commercial bank staff trained at 150 IFBM Number of attachments of BoM staff to 4 foreign central banks Number of BoM staff completing post 17 graduate Studies Frequency of printing laws by the Imprensa Nacional Number of senior management of BoM trained Average number of banks examined per year Number of listings on the Bolsa de Volares 6 Number of BoM lawyers trained End of project - 19- Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million Training for Central Bank Staff 1.92 1.42 73.9 Training for Commercial Banks Staff 1.44 0.74 51.4 Strenghtening Legal Financial Capacities 2.72 0.33 12.1 Institutional Development 4.01 6.91 172.3 Financial Sector Studies and Project Support 0.41 0.33 80.5 Total Baseline Cost 10.50 9.73 Total Project Costs 10.50 9.73 Total Financing Required 10.50 9.73 ___= Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other2 N.B.F. Total Cost 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.22 0.00 0.23 0.03 0.48 (0.22) (0.00) (0.20) (0.00) (0.42) 3. Services 0.00 0.00 7.31 0.81 8.12 (0.00) (0.00) (6.88) (0.00) (6.88) 4. Training 0.00 0.00 1.34 0.16 1.50 (0.00) (0.00) (1.30) (0.00) (1.30) 5. Refinancing the PPF 0.00 0.00 0.40 0.00 0.40 (0.00) (0.00) (0.40) (0.00) (0.40) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.22 0.00 9.28 1.00 10.50 (0.22) (0.00) (8.78) (0.00) (9.00) - 20 - Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equival nt) Procurement Method Expenditure Category ICB NCB Other2 N.B.F. Total Cost 1. Works 0.00 0.34 0.00 0.00 0.34 (0.00) (0.34) (0.00) (0.00) (0.34) 2. Goods 2.44 0.00 0.00 0.01 2.45 (2.44) (0.00) (0.00) (0.00) (2.44) 3. Services 0.00 0.00 4.20 1.21 5.41 (0.00) (0.00) (4.20) (0.00) (4.20) 4. Training 0.00 0.00 1.20 0.00 1.20 (0.00) (0.00) (1.20) (0.00) (1.20) 5. Refinancing the PPF 0.00 0.00 0.30 0.00 0.30 (0.00) (0.00) (0.30) (0.00) (0.30) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 2.44 0.34 5.70 1.22 9.70 (2.44) (0.34) (5.70) (0.00) (8.48) FiguLres in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies. 2, Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 21 - Annex 3. Economic Costs and Benefits N.A. - 22 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation July 15, 1993 5 1 Fin. Economist, I Lawyer, I Training expert, 2 Bankers Appraisal/Negotiation October 30, 1993 5 1 Fin. Economist, I Lawyer, 2 Training Experts, I Banker Supervision Dec. 3, 1994 3 2 Fin. Economist, S S July 28, 1995 4 2 Fin. Economists, 1 P/D A, 1 S S MIS Specialist April 30, 1996 6 1 Fin. Economist, IP/D A, 2 U U Payments systems, 1 Bank Supervisor, 1 Money Markets Expert September 10, 2 1 Fin. Economist, 1 Bank 1996 Supervisor, October 25, 1997 2 1 Fin. Economist, I P/D A, S HS March 13, 1998 2 1 Fin. Economist, I Fin. Analyst S S Sept. 12, 1998 1 1 Fin. Economist S S February 26, 1999 2 2 Fin. Sector Spec. S S September 9, 1999 2 2 Fin. Sector Spec. S S February 15, 2000 1 1 Fin. Sector Spec. S S June 6, 2000 2 2 Fin. Sector Spec. ICR (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 10.1 29.6 Appraisal/Negotiation 13.3 43.1 Supervision 87.8 303.5 ICR 7.1 17.8 Total 118.3 394.0 - 23 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High. SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating El Macro policies * H O SU (J M O N C NA El Sector Policies O H 0 SU 0 M 0 N 0 NA L Physical O H O SU O M ON * NA O Financial O H OSUOM ON O NA O Institutional Development O H 0 SU 0 M '- N 0 NA O Environmental 0 H C SU 0 M 0 N 0 NA Social O Poverty Reduction C H 0 SU 0 M 0 N 0 NA El Gender O H ) SU M C N * NA El Other (Please specifv) O H O SU U M O N * NA O Private sector development 0 H 0 SU * M 0 N 0 NA El Public sector management 0 H 0 SU * M 0 N 0 NA El Other (Please specify) 0 H 0 SU O M 0 N 01 NA - 24 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating [] Lending OHS *S OU 0O U L Supervision OHS OS * U O HU O Overall OHS Os * U O HU 6.2 Borrower performance Rating O Preparation OHS OS O U 3 HU O Government implementation performance O HS O S 0 U 0 HU O Implementation agency performance O HS O S * U 0 HU O Overall OHS OS * U O HU - 25 - Annex 7. List of Supporting Documents Development Credit Agreement Staff Appraisal Report Aide-memoire and Back-to-Office Reports Borrower's Contribution to the ICR - 26 - Borrower's Contribution to the Project Implementation Report for the Financial Sector Capacity Building Project (Credit No. 2607-MOZ) Introduction Within the framework of the economic reforms initiated in 1987, an area that was considered to be of vital importance for the development of the country is the financial sector. In order to strengthen this sector, the implementation of a Technical Assistance Project in the Ministry of Planning and Finance and at Bank of Mozambique (Cr. 2066-MOZ) was started in 1989, to provide a new look to it, both through capacity building and, particularly, through moves leading to the privatisation of some commercial banks. However, the duration of the Credit 2066 - MOZ was not long enough to enable the conclusion of all the activities that were part of the ongoing reform programme. In view of the need to ensure the continuity of the activities that have been started by the credit referred to abo've, Credit 2607 - MOZ Financial Sector Capacity Building "FSCB" was designed. The Credit, its Objectives and Components The Project FSCB was launched in March 1994 with the objective of further creating the conditions for the strengthening of the financial sector not just in the areas that had already been initiated, but also in new areas that were considered to be relevant. Thus, as a whole the Project FSCB covered the following components: 1. MINISTRY OF PLANNING AND FINANCE 1.1 Unidade T&nica de Coordenasao de Projectos (UTCP) This component is co-ordinated by the Ministry of Planning and Finance and was aimed at its capacity building. An agreement has been signed with CESO/SODETEG, a consultancy firm, to provide technical assistance on issues related to public investment to the National Directorate of Budget. Indeed, a consultancy contract with consortium CESO/SODETEG was established under which a sum of USD 683.350 were used for payment of technical assistance services, properly so called in addition to the sum of USD 103 500 for the purchase of vehicles, equipment and furniture to make the Unit more functional, and thereby enable it to meet the envisaged objectives. In the context of this contract, efforts were concentrated in the support to the implementation of Budgetary Reform and Assistance to current activities of National Directorate of Planning and Budget, specially the following: In the framework of Budgetary Reform - Development of an information system and corresponding computer application for preparation of State Budget (area of current budget, complementing a previous work done in the area of Investment Budget). This system allows to get an integral outlook of public expenses written in the State Budget, as well as it registers all details used for its programming. It allows to quickly retrieve all aggregates for the dimensions established in the Law of Budget Framing and supply digitised information to other internal sectors of MPF, namely Public Accountancy and Treasury. - Later extension of the system to incorporate and manage budgetary changes during the year, keeping, in this way, the budget itself permanently updated. - Supervision of the study of off Budget in 4 sectors and 2 provinces. - Technical Support and Assistance of the set BAD projects. 2 - Technical Support and Assistance to studies on autonomous institutions. In the framework of medium-term Public Expenses Programming - Establishment of Medium-Term Fiscal Scenario (expenses side), namely in the conception of this instrument applied Mozambican reality, development of methodological instruments. - Elaboration of MTFS for the period of 2000-2004. In the framework of public expenses programming - Technical support and to the elaboration of Public Investment Triennial Plan for the years 98, 99 and 2000. - Technical support and assistance to the elaboration of the State Budget for the years 98, 99 and 2000. In the framework of public expenses programming - Technical support and assistance to the elaboration of opinions under request of technicians from Budget and Macroeconomics Programming Departments. - On job training of counterpart technicians during the execution of the above activities. Collaboration with other Projects Close collaboration with United Nations Project of Planning Reinforcement, in the framework of public investment planning, foreign support and other local and provincial institutions. - Collaboration witlh GTZ Germany project of support to decentralised planning, at central level and in the Province of Manica. 3 - Collaboration with the Project to support MPF Studies Office (Project of Oxford University), namely in the framework of Medium-Term Fiscal Scenario. In the context of this contract the sum of USD 683 350 was used to pay for the technical assistance services, in addition to the sum of USD 103 500 used for the purchase of vehicles, equipment and furniture to make the Unit more functional and thereby enable it to meet the envisaged objectives. Actually, the hiring of the consultants has contributed to the consolidation of the existing knowledge in the sector about budget preparation and on issues related to public investment. 1.2 Departamento de Cooperaaio Internacional Considering the nature of its activities, this department has been establishing contacts with various entities, including international bodies and institutions, and consequently it required adequate premises, furniture and other equipment so as to fulfil its mission. The funding provided for this project was precisely to overcome the difficulties in this domain, and in this connection, the sum of USD 26 000 was used for the acquisition of furniture, computers and other office equipment. As a result of this funding, the sector has improved its conditions in the following manner: - Better working conditions for the staff affected to the sector; - Better preparation of the documents thanks to the existing of adequate computer equipment: - Expeditious sending of documents and correspondence thanks to fax machine installed. 4 1.3 Comissao Instaladora da Bolsa de Valores The Commission for the Installation of the Stock Exchange was set up in order to prepare the creation of the Mozambique Stock Exchange. In order to fulfil this objective various activities have been carried out, including the contracting of technical assistance and the purchasing of vehicles, equipment and furniture; advertising, translation and training programmes as well as the payment of rent and salaries. These activities absorbed the total amount of USD 832 000. As a result of all these activities, the Stock Exchange was formally created and it has already started concrete actions and in this regard there have been some significant advances towards the market expansion. In fact, as per the evidence below, the market has gained an impetus during the last three months, after a period of relative stagnation. There were two new corporate bond issues from BIM and BSTM, adding up the aggregate traded papers to four. There are three other issues in process, and as per the scheduile, by the year- end the exchange will account with seven issues. I would remind you that these issues are particularly surprising from the regional standpoint. In fact looking at the regional stock markets, excluding the Johannesburg one, the Mozambican is showing a sound development of bond market. Although it can be argued the lack of a much more dynamic share market, even with such a widespread privatisation process, in fact this is one of the bottlenecks most emerging markets are facing, particularly in Sub-Saharan region, that is the reluctance of the potential issuers to join the market. Reasons are various, but the paramount one I consider is related to the nature of the stock market concept, which remains new and less clear. However, as per the Bolsa programme, they already have secured the listing of Cervejas and Maragra, for the first quarter 2001, which will launch the otlher side of the market: the slhares trading. Therefore, considering the amoLunt allocated to this component, I consider it accomplished the very basic goal. That is to set-up the market, to bring in 5 the business into account of the new financial instruments available for their medium and long term financing 1.4 Master Degree Course in Economics - University of London The FSCB Project continued to finance training courses initiated by Credit 2066/M0Z, and for this USD 80 000.00 were disbursed. These courses, thought in Maputo and Beira cities, comprised Diploma and Master levels, and are intended for technicians from Public Administration and public institutions and enterprises, and ended with graduation of more than 45 State senior staff. The establishment of Post-Graduation courses through the distance learning programme had a positive impact, since it was a unique opportunity for the staff to upgrade their knowledge without leaving their professional activities. This can be proved by the application of potential candidates from different national walks of life. The project contributed to improve the understanding of financial economics by the government of Mozambique, a country managed a planned economy up to the beginning of 1990's. On the other hand, the increase of international integration demands reforms to an market economy supported by the World Bank and International Monetary Fund. In this context, there was a clear need to organise a training programme on economics for Minister and State senior technicians, but not only. The Ministry decided to extend this training to encompass economists from other Ministries, Institutions and companies. 2. MINISTRY OF STATE ADMINISTRATION 2.1 Imprensa Nacional One of the main constraints in the publishing of Laws is caused by to the lack of conditions in terms of printing equipment. As there was no objection 6 to addressing this issue, an Offset machine has been purchased at the cost of USD 384 000. As it will come into operation shortly, the current delays in the printing and publication of legislation will be eliminated and the quality will be enhanced significantly. 3. TRIBUNAL ADMINISTRATIVO During the mission of the Project Monitoring of April 1998, the Administrative Tribunal considered as priority areas for its capacity building the dissemination of laws, training and refresher courses for its staff as well as the purchase of books and publications, office furniture and equipment, including computers. Some of the activities carried out towards the materialisation of this objective include the following: - Holding of three seminars for the dissemination of laws, in the Southern, Central and Northern parts of Mozambique, in which 90 civil servants took part; - About 8 professionals attended a higher course on Auditing and Accountancy; - Training of 3 controllers so that to introduce improvements in the process of verification of public institutions accounts. - Senior staff from the tribunal paid work visits and attended seminars and exchanged experiences with regional bodies and institutions, namely CPLP, SADC etc. - Purchase of vehicles and other equipment. The cost for the purchase of vehicles and equipment was USD 384 000 and a total of USD 234 000 was spent on training and on the dissemination of the laws. The Administrative Tribunal undertakes its activities in three major areas, namely (i) resolution of conflicts between civil service and citizens; (ii) resolution of fiscal conflicts; and (iii) review of administrative contracts and 7 the accounts of Government entities, public companies, associations and NGOs. Its mandate is clear cut. It is an autonomous institution. By focusing on the training of its staff, the Tribunal seeks to implement successfully and strictly all its attributions. As it started to intervene in each of the areas referred to above a new climate is emerging in terms of organisation, discipline and accountability on the part of all the staff. It goes without saying that all this will lead to the capacity building of this institution and, above all, it will also promote the capacity building of the financial sector as a whole. 4. BANCO DE MOCAMBIQUE 4.1 Training One important area that has received funding under this project was undoubtedly training. In the specific case of the Bank of Mozambique, the training focused on the following areas: Masters Degree Course at the University of London - The funding of this training programme under the project has expired . It training 15 people of which 1 I are affected to the financial system and the others work for other Ministries. Masters Degree Course for Lawyers - It is intended to train 9 lawyers and as the project will close before the end of the training period, BM will have to secure funds to ensure the conclusion of the training programme. Masters Degree Course on Information Systems - A total of 6 technicians have been trained and they have all been assigned to work at the Department of Organisation and Informatics. Training in the English Language (17 technicians) workshops and upgrade training programmes abroad. 8 The training of the staff in each of the areas mentioned above is obviously aimed at improving the performance of such staff and consequently this will impact on the quality of the service provided by the sectors in which they work. In this perspective, this is undoubtedly a valuable contribution made by the project to strengthen the financial sector - the core objective for which the project was designed. 4.2 Departamento de Supervisio Bancaria (DSB) One of the most important tasks undertaken by the Department of Banking Supervision was the monitoring of the process of privatisation of BCM and BPD. As there was not either the experience nor the capacity to this work internally, external services have been sought. More specifically from Deloite, from Banco Pinto Sotto Mayor and from Banco Portugues de Investimento, and this absorbed a sum of the tune of USD 2 632 936. This task was successfully completed as both BCM and BPD have already been privatised. This has given a new impetus both in qualitative and quantitative terms to the financial sector in Mozambique. Additionally about USD 140 000 have been used for restructuring and capacity building of the DSB in terms of the supervision of the financial activities at large. For this consultancy was provided by Intersoft and by some independent consultants. There have also been exchanges with SARB and it was necessary to acquire computer equipment for this Department. These activities have contributed greatly for the capacity building of the DSB for a more effective supervision of the financial institutions in Mozambique, and Bank of Mozambique is committed to the consolidation and improvement of its capacity to intervene in this sector. 9 4.3 Centro de Organizasao e Informatica This component contemplated the funding for the refurbishment of the premises where the future centre will be located. Although delayed, a process is underway for the purchase of the respective furniture. Other activities funded by the project include the purchase of books and publications and the hiring of technical assistance. Bank of Mozambique wants to have a Documentation and Information Centre that is in line with its level of growth and so all actions are directed at this objective. After the conclusion of the work, it will be possible to improve the assistance provided to other sectors of the Bank not just in terms of making information available, but also in terms of the organisation of an appropriate filing system. 4.4 Departamento de Organizacao e Informatica The computerisation process of Bank of Mozambique was initiated by Cr. 2066 - Moz. This process was continued by Project FSCB and it has basically consisted of activities that had been agreed upon with SIEMENS, in the area of automation of the services of various Departments , the creation of Database, the Management of Networks etc. Additionally, funding was also provided for the activities undertaken by the Bank to minimise the impact of the Y2K problem, namely the replacement of some hardware and introduction of adequate software. These activities costed USD 722 500. The activities funded by this project have virtually been concluded and there is now internal capacity for the maintenance of all the computer equipment purchased as well as for the Management and Development of the respective software. 4.5 Instituto de Forma$ao Bancaria The training of staff for the financial sector is vital for the strengthening of the system. In view of the need to create conditions for the attainment of this 10 objective, funding totalling USD 678 000 has been provided for the following: Rehabilitation of the premises, training, purchasing of equipment and furniture - The works are almost concluded and both the equipment and the furniture have been acquired and installed. Consequently, the IFB is in a better position to carry out its activities i.e. the training of bank staff in areas related to their activities Various technical courses have been provided with the coordination of the Institute of Banking Training from Portugal. A total of 150 employees from Bank of Mozambique and from Commercial Banks have attended the courses The activities under this component were directed at two major areas: - Training. Here the objectiv'e was to build a consistent technical capacity capable of responding to the present day requirements of the financial market. - Rehabilitation of premises. The objective here was to create more space and equip it so as to create an appropriate environment for the staff undergoing training. In actual fact, the number of class rooms of the Institute went up from 3 to 6. 5. CREDICOOP Funding was provided to hire and advisor for this institution. After USD 121 000 had been spent, this funding was withdrawn and allocated to other components due to the inobservance of the rules that govern the use of funds allocated by the World Bank. 6 CONSTRAINTS In the course of the implementation of the project the following constraints were found: Regarding the components: - poor knowledge about the procedures of the Worl,d Bank - delays in the implementation of the activities planned motivated by the lack of a more active and dynamic attitude. Regarding the World Bank: - Delays in the disbursements by the Departmnent of Disbursement in Washington. Regarding the Coordination of the Project: - At times it was noticed that a proactive action was lacking on the components that revealed slow in the implementation of their activities. Lessons Learned/Conclusions The Project FSCB in terms of the volume of resources involved was relatively small, however the results it has produced are very relevant. The outputs achieved with this Project are very visible and are reflected in a concrete manner in the financial system. Training was a major focus of this project and this makes us believe that in the near future the results will be tangible. The project has produced results with noticeable sustainability: e.g. investment in training, expected revenues from the Stock Exchange and the operation of the offset machine. CONCLUSION Resources have been invested for the materialisation of activities contemplated in the project, particularly with regard to training. We believe that a considerable part of this activities need not just to be complemented but also they need to be consolidated. Therefore, we feel that the design of another project for this area or for a similar one is worth considering. 12 FINANCIAL SECTOR CAPACITY BUILDING PROJECT Summary of Expenses and Analysis of Budget Period: Up to September 2000 Financier: IDA Credit 2607-MOZ Currency: USD DATA Actual Value Budgeted Value Available Rate of Budget Until 1977 After 1997 Total Current Year up Accumulated Budget Use Previous Years Current Year Accumulated to 2000 total (1) (2) (3) (4= I + 2 + 3) (5) (6 = I + 2 + 5) (7 = 6 - 4) (8) 1. Ministry of Planning and Finance 123,303.43 1,411,806.87 326,064.52 1,861,174.82 741,079.60 2,276,189.90 415,015.08 81.8% 1.1 Project Coordination Unit (UTCP) 800,129.15 -13,236.00 786,893.15 338,967.65 1,139,096.80 352,203.65 69% 1.2 Department of International Cooperation 25,243.75 25,243.75 0.00 25,243.75 0.00 100.0% 1.3 Commission for Establishing Stock Exchange 123,303.43 493,684.52 214,156.00 832,143.95 243,041.33 861,029.28 28,885.53 96.6% 1.4 Training 817.04 817.04 0.00 817.04 0.00 100.0% 1.5 Economic Analysis (Treasury Dept.) 90,932.41 125,144.52 216,076.93 159,070.62 250,003.03 33,926.10 86.4% 2. Bank of Mozambique 487,994.70 1,253,672.91 502,752.06 2,244,419.67 1,076,327.01 2,817,994.62 573,574.95 79.6% 2.1 Project Management 204,518.00 113,146.00 15,000.00 332,664.00 53,706.00 371,370.00 38,706.00 89.6% 2.2 Documentation Center 68,712.55 58,174.45 126,887.00 705.913.14 774,625.69 647,738.69 16.4% 2.3 Training 159,551.48 396,726.07 330,689.48 886,967.03 253,305.16 809,582.71 -77,384.32 109.6% 2.4 Informatics 623,607.19 98,888.13 722,495.32 63,402.71 687,009.90 -35,485.42 105.2% 2.5 Banking Supervision and Legal Matters 123,925.22 51,481.10 175,406.32 0.00 175,406.32 0.00 100.0% 3. Other Institutions 467,086.36 599,204.33 705,876.18 1,772,166.86 848,392.86 1,914,683.55 142,516.68 92.6% 3.1 CreditCoop 82,00.00 39,000.00 121,00.00 0.00 121,000.00 0.00 100.0% 3.2 Administrative Tribunal 551,038.18 65,757.83 616,796.01 107,559.01 658,597.19 41,801.18 93.7% 3.3 Bankers' Training Institute (IFBM) 385,086.36 9,166.15 256,395.67 650,648.18 340,833.85 735,086.36 84,438.18 88.5% 3.4 National Printery (impressa National) 0.00 383,722.68 383,722.68 400,000.00 400,000.00 16,227.32 95.9% 3.5 Seminars and Workshops 0.00 0.00 0,00 0.00 0.00 0.00 10. Others to classify (Before 1998) 3,447,532.48 0.00 0.00 3,447,532.48 0.00 3,447,532.48 0.00 100.0% 10.1 Constant Values from Report of 4,525,916.97 0.00 0.00 4,525,916.97 0.00 4,525,916.97 0.00 100.0% 12/31/97 10.2 Recasting Made in following years -1,078,384,49 0.00 0.00 -1,078,384.49 0.00 -1,078,384.49 0.00 100.0% Grand Total 4,525,916.97 3,264,684.11 1,534,692.76 9,325,293.84 2,665,799.47 10,456,400.55 1,131,106.71 89.2% Original 1 Balance in Conversation I Balance in USD Analysis of Budget Currency Original Currency Rate I - Total Available Budget SDR 806,447.07 1.33 1,070,292.36 I . Balance of IDA Credit account SD , 1.33 0.36 2. Disbursement Requests pending CHEF 0.00 0.62 0.00 3. Balance of Swedish account USD - .37 0.62 - .37 4. Balance of Special Account A USD -14,765.37 1.00 -14,765.37 5. Balance of Special Account B USD 0.00 1.00 0.00 II.- Available funds not allocated (1-7) (a) -75,579.72 (a) Excess of uses over sources of funds FINANCIAL SECTOR CAPACITY BUILDING PROJECT Period: Up to September 2000 TOTAL TOTAL BALANCE PERCENT- 5 - STATUS OF AGREED ACTIONS FOR EACH COMPONENT ALLOCATED AMOUNT OR AGE OF AMOUNT USED DEFICIT BUDGET USED Consultants Vehicles Other Furniture Books Rehabilitation Masters Masters Other Equiposent and and of Degree Degree Training DESCRIPTION OF Supplies Publications Facilities Courses Courses Tasks COMPONENTS BY SECTOR (Economist) (Lawyers) .(1) L.(2) (3) (4) (5) (6) (7) (S) (9) (10) (1 1) (12) (13) t. Ministry of Pkanning and Finance 2,276,189.90 1,861,174.s2 415,015.0S 81,8% 1.1 Project Coordination Unit 1,139,096 as 786,893 t5 352,203 65 69.t% 1Concluded (UTCP) Ongoing Concluded Concluded 1.2 Department of Intemational 25,243.75 25,243 75 0.00 100.0% Cooperation Concluded Concluded 1.3 Commission for Establishing 861,029.28 832,143.95 28,8s5.33 96.6% Stock Exchange Concluded Concluded Concluded Concluded Concluded Ongoing 1.4 Training 917.04 al7.04 0.00 too.o0r/ 1.5 Economic Analysis (Treassey 250,003.03 216,076 93 33,926.10 96.4% Dept.) Concluded Concluded Concluded Concluded 2 Bank ofMoz,ambique 6,265,527.10 5,691,952.15 573,974.95 90.8% 2.1 Project Management 371,370 0o 332,664 00 38,706.00 89.6% Concluded Concluded Concluded 2 2 Documentation Center 774,625 69 126,887 00 647,739.69 164% On oing Ongoing Concluded 2.3 Training 809,5a2.71 886,967.03 -77,384.32 109.6% G Ongoing 2.4 Informatics 687,009.90 722,495.32 -35,485 42 105 2% CoIud d Ongoing Ongoing Concluded 2.5 Bank Superv. cod Legal Matters 175,406 32 175,406.32 0 oIoo% onclude Concluded Concluded 2.6 Othor Actions 3,447,532.48 3,447,532.48 0 oo loo 01/. Concuded Concluded Concluded Concluded Concluded Concluded Concluded 3 Other Institutions 1,914,683.55 1,772,166.47 142,516.68 92.6% 3 1 CreditCoop 121,000.00 121,00000 000 100% Concluded 3 2 Administrative Tribunal 65a,597 19 616,796.01 41,801 19 93.7% Concluded Concluded 33 Bankers Training Institute 735,086 36 650,641 It 94,439.10 905% Ongoing Ongoing Ongoing (IfBM) Ongoing Concluded Ongoing 3 4 National Printery (lmyressa 400,000 00 383,722 68 16,277.32 9t 9% National) Concltided Grand Total 10,456,400.55 9,325,293.84 1,131,106.71 89.2
Groupe de la Banque mondiale · Implementation Completion and Results Report
Mozambique - Financial Sector Capacity Building Project
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Groupe de la Banque mondiale
Type de document
Implementation Completion and Results Report
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Mozambique
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Banque mondiale