Kenya - Development of the National Statistical System Project : restructuring (Vol. 1 of 2) : Main report

 Document of The World Bank Report No: 72920-KE RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DEVELOPMENT OF THE NATIONAL STATISTICAL SYSTEM PROJECT CREDIT IN THE AMOUNT OF SDR 14.1 MILLION (US$20.5 MILLION EQUIVALENT) March 20, 2007 TO THE REPUBLIC OF KENYA Sep17, 2012  ABBREVIATIONS AND ACRONYMS CBS Central Bureau of Statistics CPI Consumer Price Index ERP Enterprise Resources Planning GDP Gross Domestic Product GOK Government of Kenya IDA International Development Association KIHBS Kenya Integrated Household Budget Survey KNAO Kenya National Audit Office KNBS Kenya National Bureau of Statistics MDA Ministries, Departments, and Agencies MOF Ministry of Finance MPND Ministry of Planning and National Development NA Not Applicable NASSEP National Sample Survey and Evaluation Program NSS National Statistical System PAD Project Appraisal Document PDO Project Development Objective TSU Transition Support Unit STATCAP Statistical CapacityBuilding Program Regional Vice President: MakhtarDiop Country Director: Johannes Zutt Sector Manager / Director: Humberto Lopez Task Team Leader: Gabriel Demombynes 2  KENYA DEVELOPMENT OF THE NATIONAL STATISTICAL SYSTEM PROJECT P085414 CONTENTS Page A. SUMMARY ........................................................................................................................... 6 ANNEX 2: REALLOCATION OF PROCEEDS ......................................................................... 9 3  RestructuringStatus:Draft Restructuring Type:CD Approval Last modified on date : 06/30/2012 1. Basic Information Project ID & Name P085414: KE-Development of The National Statistical System Project Country Kenya Task Team Leader Gabriel Demombynes Sector Manager/Director Humberto Lopez Country Director Johannes C.M. Zutt Original Board Approval Date 03/20/2007 Original Closing Date: 12/31/2010 Current Closing Date 09/30/2012 Proposed Closing Date Not Applicable (NA) EA Category C-Not Required Revised EA Category C-Not Required-Not Required EA Completion Date Not Applicable (NA) Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 30.00 30.00 IDA 20.50 20.50 Total 50.50 50.50 3. Borrower Organization Department Location Republic of Kenya Kenya 4. Implementing Agency Organization Department Location Kenya National Bureau of Statistics Kenya National Bureau of Kenya National Bureau of Statistics Statistics P.O. Box 30266– 00100 GPO NAIROBI. 5. Disbursement Estimates (US$m) Actual amount disbursed as of 06/20/2012 11.31 Fiscal Year Annual Cumulative 2008 2.75 2.75 2009 0.76 3.51 2010 1.04 4.55 4 2011 2.60 7.15 2012 4.83 11.98 Total 11.98 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? No Does the restructured projects trigger any new safeguard policies? If yes, please select No from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The original project development objective (PDO) has not been changed. It is to establish a sustainable national statistical system to provide reliable, timely and accurate data in accordance with international standards through: (a) strengthening the capacity of the relevant statistical agencies through training and adoption of new information and communication technology; (b) carrying out legal and institutional reforms that promote statistical data development; (c) establishing linkages among statistical data producers; (d) promoting statistical information sharing among data users to strengthen the quality of decision making; and (e) developing a data access and dissemination strategy in conformity with relevant legislation and international good practice. 7b. Revised Project Development Objectives/Outcomes [if applicable] Not applicable 5  DEVELOPMENT OF THE NATIONAL STATISTICAL SYSTEM PROJECT RESTRUCTURINGPAPER A. SUMMARY 1. Following the request of Ministry of Finance on May 22, 2012, the proposed restructuring consists of (i) a reallocation of funds to increase the total amount in the training category from SDR 4.3m to SDR 4.9m and (ii) a total cancellation of SDR 5,690,000 (USD 8.8m) from the total credit of SDR 14.1m (USD 20.5m). 2. This is the third restructuring of the project. The first restructuring in December 2010 consisted of i) an extension of the closing date to June 30, 2012, ii) a reallocation across spending categories, and iii) a shift to 100% financing. The second restructuring in June 2012 consisted of i) an extension of the closing date to September 30, 2012 and ii) a reallocation across spending categories. 3. The total cumulative extension does not exceed two (2) years, and therefore does not require RVP approval. 4. The recently completed Implementation Support Mission in June 2012 concluded that overall progress towards the project development objective (PDOs) has been substantial and six out of seven indicators have reached their performance targets. 5. In particular, there has been appreciable progress in data production, institutional reform, capacity and infrastructure development, and in coordination of the national statistical system. However, the project components on project management, particularly financial management and procurement, and access to data and dissemination hasperformed below expectations. 6. The total projected disbursements for the project is SDR 8,410,000 (USD 12.94m). The final disbursement ratio by the end of the four month grace period is projected to reach approximately 60% of the total IDA credit. 7. The difference of approximately SDR 5,690,000 (USD 8,753,846) is therefore cancelled. 8. The cancellation is effective May 22, 2012 as requested by the Government of Kenya. 6  ANNEX 2: Reallocation of Proceeds _____________________________________________________________________ KENYA —DEVELOPMENT OF THE NATIONAL STATISTICAL SYSTEM PROJECT P085414 {42760} Restructuring Paper 9. Proceeds for THE DEVELOPMENT OF The National Statistical System Project, Project ID. P085414, Credit No. 42760-KE will be reallocated as follow: Category of Expenditure# Allocation (SDR) % of Financing Current Revised Current Revised Current Revised (1) Goods Goods 2,536,659 1,762,000 100% 100% (2) Consultants’ Consultants’ services 5,104,013 630,000 100% 100% services & audits & audits (3) Training & Training & 3,162,607 4,820,000 100% 100% workshops workshops (4) Incremental Incremental Operating 2,144,162 539,310 100% 100% Operating Costs Costs Amount due (5) Refund of pursuant to Project Refund of Project section 658,690 658,690 N/A Preparation Preparation Advance 2.02(b) of Advance this agreement (6) Unallocated Unallocated 493,869 0 N/A N/A Total* 14,100,000 8,410,000 Total amount cancelled 5,690,000 # Aconstant conversion rate of 0.65 has been used to covert USD to SDR. 7  10. KNBS addressed the outstanding audit qualifications in June 2012, but the latest Interim Financial Report is pending World Bank approval. The current financial management rating is Moderately Unsatisfactory, while the financial management risk rating is Substantial. 11. Despite financial management and procurement challenges, disbursements have improved over the last 12 months, and in total the project has disbursed USD 11.98m. In addition, existing commitments will be settled during the extension period and the four month grace period following project closure on September 30, 2102. The total expected disbursements are expected to reach approximately 60% of the original IDA credit amount of SDR 14.1m. The remaining balance of SDR 5,690,000 will be cancelled. 12. While the majority of planned activities have been implemented with good results, there appears to be overestimates of costs for several main activities, leading to a balance of SDR 5,690,000 of the IDA credit unutilized. At the same time, the Government of Kenya has clearly indicated where the funds can be better used within the Bank’s country portfolio. 8