Niger - Economic and Financial Management Improvement Project

Document of The World Bank FOR OMCIAL USE ONLY Report No. 9938 PROJECT COMPLETION REPORT NIGER ECONOMIC ANTD FINANCIAL MANAGEMENT IMPROVEMENT PROJECT (CREDIT 1493-NIR) OCTOBER 3, 1991 Country Operations Division Country Department V 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 Currency Unit = CFA Francs US $1.00 = 283 CFA Francs 1/ PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ADETEF = Association pour le D6veloppement des Echanges en Technologie Economique et Financi6re (Association for the Development of Technical Exchange in Economic and Finance) SEDES = Soci6t6 d'Etudes pour le D6veloppement Economique et Sociale FISCAL YEAR January 1 - December 31 1/ As of June 1, 1991. The CFA Franc is tied to the French Franc (FF) in the ratio of FF 1.0 to CFAF 50.0. The FF is currently floating.  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Offlce of Dlretor-General Operations Evaluation October 3, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Niger - Economic and Financial Manazement luDrovement Proiect (Credit 1493-NIR) Attached, for information, is a copy of a report entitled "Project Completion Report on Niger - Economic and Financial Management Improvement Project (Credit 1493-NIR)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restrfcted distributlon and may be used by recipients only In the performance of their otldal doties. Its contents my not otherwise be disclosed without World Bank autboriUtion.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT NIGER ECONOMIC AND FINANCIAL MANAGEMENT IMPROVEMENT PROJECT (CREDIT 1493-NIR) TABLE OF CONTENTS Paore No. PREFACE ........................................................ i EVALUATION SUMMARY .............................. iii PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIV2 ............ 1 A. Project Identity ........................................ 1 B. Project Background ...................................... 1 C. Project Objectives and Description ...................... 2 Project Objectives .................................... 2 Project Components .................................... 2 D. Project Design and Organization ......................... 2 E. Project Implementation .................................. 3 Project Risks ......................................... 4 Unforeseen Factors Affecting Project Implementation ... 5 Actions or Decisions Taken or not Taken which Affected Project Implementation ..................... 5 F. Major Results of the Project ............................ 5 Impact of Project ..................................... 5 G. Project Sustainability .................................. 6 H. Bank Performance ........................................ 7 Major Strengths and Weaknesses ........................ 7 Lessons Learned ................., 7 I. Borrower Performance .................................... 8 Major Strengths and Weaknesses ........................8 Lessons Learned ....................................... 8 J. Project Relationships ................................... 9 Impact of Relationships on Project Implementation ..... 9 K. Consulting Services ..................................... 9 Role, Performance Level and Implications of Involvement ......................................... 9 L. Project Documentation and Data .......................... 9 Adequacy of President's Report and Major Working Papers .............................................. 9 Availability of Relevant Data to PCR Mission .......... 10 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.  TABLE OF CONTENTS (cont'd.) Page No. PART III: STATISTICAL INFORMATION .............. .............. 11 1. Related IDA Credits .. 11 2. Project Timetable .. 12 3. Credit Disbursements .. 13 4. Project Costs and Financing .. 14 A. Project Costs ........................................ 14 B. Project &Inancing ....................... 15 5. Status of Covenants .. 16 6. Use of Bank Resources ................... 18 A. Staff Inputs ......................................... 18 B. Missions ............................................. 19 7. Major Studies .............................................. 20  -. i - PROJFCT COMPLETION REPORT NIGER ECONOMIC AND FINANCIAL MANAGEMENT IMPROVEMENT PROJECT (CREDTT 1493-NIR) PREFACE This is the Project Completion Report (PCR) for the Economic and Financial Management Improvement Project in Niger, for which Credit 1493-NIR in the amount of SDR 11 million was approved on June 7, 1984. The credit was closed on October 31, 1990, six months behind schedule. All but SDR 0.01 million was disbursed and the last disbursement was in July 1990. The PCR was prepared by the Country Operations Division, Country Department V, of the Africa Region (Preface, Evaluation Summary, Parts I and III). On March 19, 1991, IDA requested the Borrower to prepare Part II by end-April 1991, but no reply was received. A reminder was sent on May 15, 1991, but again no reply was received. A French version of Parts I and III were sent to the Borrower on June 19, 1991, for comments, but none were received. Preparation of this PCR is based, inter alia, on the President's Report, the Credit Agreement, supervision reports, correspondence between IDA and the Borrower, and internal IDA memoranda.  - ,ii - PROJECT COMPLETION REPORT NIGER ECONOMIC AND FINANCIAL MANAGEMENT IMPROVEMENT PROJECT (CREDIT 1493-NIR) EVALUATION SUMMARY Oblectives 1. The key objectives of the five-year project were to: (i) help the Government design a consolidation program for the short term and a struc- tural adjustment program for the medium term; and (ii) strengthen the economic and financial management capabilities of the Ministries of Plan and Finance. Imylementc: ion Experience 2. The progress of pro.,ect implementation was mixed. Given the urgency and the built-up expectations of an IMF stand-by program and a World Bank structural adjustment operation, progress on SAL-related studies and technical assistance was generally satisfactory. However, for the other components, particularly training, implementation experienced delays and problems. There was a strong reluctance on the part of the Government to elaborate and finally adhere to the detailed training programs for the Ministries of Plan and Finance, which were ultimatelv launched between three to four years after credit effectiveness (paras. 9(i), 10, 16). The civil works component, introduced halfway through project implementation, entailed the construction of a documentation center in the Ministry of Plan and the extension of the computer center in the Ministry of Finance. These activi- ties met considerable delays, mainly because of the slow local bureaucratic procedures in awarding bids ane conflicts of interest in the selection process (para. 9). Another factor adversely affecting project implemen- tation was the rapidly deteriorating budgetary situation in Niger, which led to frequent requests for the use of project resources to cover operating expenditures and the restoration of offices. Linked to this was the exten- sion of salary supplements to the support staff of working groups in charge of supervising SAL studies, instead of just to the training officers, as originally foreseen in the project. This practice was later stopped by the Bank in all its projects (para. 12). Results 3. The project's overall objectives were met, with the short-term objectives of preparing a consolidation program and a structural adjustment program having been met more successfully than the longer-term objectives of institutional reform. The project successfully put in place an external debt management system, computerized the fiscal and customs administrations, introduced the methodology for a three-year rolling public investment program, contributed to the preparation of general economic indicators (including national accounts), and financed a number of studies, such as the  - iv - diagnostics of selected public enterprises, cost-reccvery study, and the industrial incentives study, all of which contributed to the structural adjustment program (para. 15). On the negative side, the training component assumed a lree-for-all approach, wherein all staff of the ministries became eligible, and more often than not general training abroad was accepted at the cost of job-related training (para. 16). The project included a large component for additional studies and technical assistance (28 percent of total) in order to provide flexibility to changing needs of the adjustment program. It appears that part of this component became a sort of slush fund for a number of activities (para. 13), including the construction of the documentation center. Sustainability 4. The project put in place a number of essential economic and financial management tools, which helped produce positive results, e.g., in the areas of external debt monitoring and public investment programming (para. 17). However, most of these activities still require complementary reforms in order to be more effective, for instance, budgetary system reforms and the linking of the investment budget with the recurrent budget. The sustainability of project activities is in doubt because of the need for further technical assistance and financing for operating expenditures. The lack of experience and analytical capacity of the staff in the key minis- tt'i:s and the shortage of budgetary resources continue to be serious con- str-ints to the improvement of economic management (para. 18). Findings and Lessons Learned 5. Key lessons learned during project implementation were: i) the importance of a genuine interest and commitment of the Government to improve economic management; (ii) from the Bank's side, avoiding the temptation to let urgent short-term needs of the structural adjustment program outweigh the more difficult task of designing long-term institution-building mea- sures; (iii) the need for an a&reed-upon detailed training program from the outset, based upon identified needs and the training policy of the institu- tions concerned, and which would include, inter alia, details on type of training required, selection criteria of candidates (paras. 20(i), 22); (iv) the possibility of putting in place a monitoring system to trace the bene- ficiaries of the training program (para. 22); (v) the importance of clearly defining the responsibilities of the Project Management Unit, particularly its managerial functions, and of keeping its head as independent as possible from political pressures (para. 22); (vi) the necessity of including tech- nical Headquarters staff in the supervision of such a project, even if the overall supervision responsibility of the project rests with the Resident Mission (para. 20(ii)); (vii) the limiting or close monitoring of the use of unallocated funds to ensure that Government requests are in keeping with the priorities of the project; and (viii) the need to minimize the financing of recurrent costs to the extent possible (para. 20 (iv)).  PROJECT COMPLETION REPORT NIGER ECONOMIC AND FINANCIAL MANAGEMENT IMPROVEMENT PROJECT (CREDIT 1493-NIR) PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE A. Prolect Identity Project Name Economic and Financial Improvement Project Credit No. 1493-NIR Date of Credit Effectiveness November 6, 1984 Completion Date October 31, 1990 Closing Date October 31, 1990 IDA Credit SDR 11 million (US$11.7 million equivalent) IDA Credit, disbursed US$13.7 million IDA Credit, cancelled US$0.01 million RVP Unit Africa Country Niger Sector Economic Management Subsector Plan and Finance B. Project Background 1. Following the economic boom of the late 1970's, Niger started facing a serious economic and financial crisis with the drastic fall of uranium prices and consequently slower GDP growth than the preceding decade. Public spending, however, did not slow down concomitantly with the gradual decline in public revenues. The large finiancial losses of public enter- prises, resulting from weak management and inappropriate policies and regulations, added to the public deficit. Moreover, even as the current account deficit was growing, the Government continued to implement its Five- Year Development Plan, thus forcing it to borrow extensively abroad and accumulate a heavy foreign debt, half of it on commercial terms. By 1983, debt service obligations represented 46 percent of Niger's exports of goods and services. 2. In light of the deteriorating ecoxiomic outlook, the Government of Niger started discussions with the IMF and the World Bank on an adjustment program and requested technical assistance from the Bank for the Ministries of Plan and Finance for the preparation of a stabilization program and the elaboration of a medium-term adjustment program. Because of the urgency of launching an adjustment program and the need to have strong economic and financial institutions in place, the Bank reacted quickly to this request and reoriented its proposed technical assistance project for the Ministry of Planning toward meeting the immediate needs of SAL preparation and longer- term institutional issues in the two key economic ministries. 3. In the beginning of project implementation, the strong commitment of the Government was instrumental in starting the process towards strength-  -2- ening the economic and financial analytical capability of the two minis- tries, particularly in a number of key areas, such as external debt manage- ment, fiscal and customs administration, public investment programming and the public enterprise sector. Several of the studies financed under the project were useful in the preparat4on of the structural adjustment program. Mid-way through project implementation, however, the death of the President, a strong supporter of the sd' lztent effort, and the overall difficulties of implementing the adjustment p.Dgram weakened the Government's commitment to the project at the highest level. This became clearly apparent with the less than favorable implementation of the training component of the project. C. Proiect Objectives and Descriptior 4. Project Ob1ectives. The key objectives of the project were to: (i) help the Government design a consolidation program 1/ for the short term and a structural adjustment program for the medium term; and (ii) strengthXn the economic and financial managemer.t capabilities of the Minis- tries of Plan and Finance. 5. Proiect Components. The five-year project was distributed as follows (ex,luding project administration): (i) economic studies mainly related to the structural adjustment pro- gram (21%); (ii) institutional strengthening of the Ministry of Plan 4n the areas of public investment programming and statistical analysis and of the Ministif of Finance in the areas of fiscal management, external debt management and financial planning (38%); (iii) a two-phased training program with the first phase intended to improve the existing skills of statistical assistants and mid-level and high-level staff of the two ministries; and the second phase to establish short-term training programs in economic and financial management for the two ministries and technical ministries in order to upgrade skills (8%); and (iv) additional studies and technical assistance to be identified during project implementation (28%). D. Project D'?sign and Organization 6. The project was originally conceived in mid-1981, with the aim of creating a permanent national capability to prepare and execute development projects. In light of the rapidly declining economic conditions of the early 1980's and the urgent need to meet short-term data and analytical i/ The consolidation program included a review of the public investment program and definition of a three-year investment program; a review of the financial situation, particularly external public debt management; and a review of the parastatal sector (the economic and financial rehabilitation program for this sector was later assumed by the Public Enterprise Sector Project).  - 3 - requiremnents of the adjustment program, the Government requested a redesign of the project to meet these needs, and appraisal took place in March 1983. Although the timing and shift in focus of the project were appropriate, the attention given to the short-term requirements may have sacrificed the design of the longer-term and more difficult institution-building aspects. In fact, the Bank decided to forego project negotiations in order to speed up loan processing. In general, the project rightly limited its scope to key institu- ;ions and areas in economic and financial management. However, the design and organization of the project had the following negative points: (i) the studies component, virtually half the project, was too large in relation to national capacity to undertake thei or absorb the results; (ii) the traininlg component was not clearly defined before project implementation; (iii) the additional technical assistance component, supplemented by a large unallo- cated amount, although providing a certain amount of flexibility during proJect implementation, was too vague and easily became a slush fund to finance activities not directly related to the original project objectives; and (iv) the location of the Project Unit in the Ministry of Plan and the appointment of a public official not relieved of his other responsibilities (see para. 21) as the head of the Unit limited the time he could devote to the project, and may have reduced the independence And objectivity of decision-making of the Unit. 8. In 1987, IDA agreed to amend the Credit Agreement in order to add a civil works component to the project, namely the construction of a documen- tation center in the Ministry of Plan and the extension of the computer center in the Ministry of Finance. E. Project Implementation 9. Project implementation progressed quite quickly up to the fourth year of the project, and, in fact, project management and the task manager believed that funds would be exhausted before the completion date. In reality, a small amount of the credit was cancele' even after delays in the civil works component required a six-month extension of the closing date. This component met considerable delays largely due to the generally slow local procedures in awarding bids and signing contracts (e.g., it took 18 months from the selection of the contractor to signing the contract for the computer center) and conflicts of interest in selecting contractors. LCB or local shopping of equipment purchases took an average of four to six months. Other factors which adversely affected project implementation were: (i) the reluctance of the Authorities to elaborate and finally adhere to a detailed training program for the two ministries. The training program for the Ministry of Plan was launched nearly thre_ years after credit effectiveness and that of the Ministry of Finance nearly four years. It should be noted, however, that, despite the lack of an agreed-upon program, training of statistical  4- assistants cid take place throughout the life of the project.2/ The training of higher-level staff (ten four-year scholarships abroad) never materialized because of diffioulties in releasing these officials from their normal responsibilities; (ii) the cumbersome administrative procedures of the UNDTCD (the UN Development and Technical Cooperation Department) which had pre- pared the statistical component in the Ministry of Plan and was slated beiore project approval to provide technical assistance and on-the-job training to the Statistical Department of the Ministry of Plan. Nearly two years after credit effectiveness the Govern- ment and the Bank agreed to break contact with the DTCD and allow the Project Management Unit to manage this activity with the tech- nical cooperation of INSEE (the French statistical institute) and; (iii) the civil service reform study proved ineffective in addressing key issues (consultants did not do a thorough job), such as over- staffing and the discrepancy between budget figures and personnel files, which at the time were essential elements for the prepara- tion of the IMF Structural Adjustment Facility. In fact, another consultant (financed under another project) had to be hired to fill these gaps. 10. Attempts to simplify administrative procedures, which adversely affected equipnFnt purchases and construction contracts, were addressed under tha structr.ial adjustment program and have had some success, but this is an area which requires codttinued monitoring. In retrospect, the delays experienced by the statistical component could have been reduced or averted by expanding the search for consultant services and not relying solely on the services of DTCD, which is known for its heavy bureaucratic procedures and long recruitment delays. The training program, probably the least satisfactorily-implemented component of the project, should have been better defined and agreed upon at negotiations, nonetheless allowing a margin of flexibility to adopt to changing circumstances (para 22). In the super- vision reports, the overall status of the project was rated "1", except in 1988 and 1989 when the problems with the training component and other implementation delays pushed the rating down to "2". 11. Proiect Risks. Two main risks were identified at the time of appraisal, namely, project sustainability and the high turnover and mobility of the civil service. Despite the modest success in putting in place certain economic management systems, project sustainability remains a true concern (section G). The availability of budgetary resources and experi- enced staff is an important, but doubtful, factor in determining the contin- uation of project activities. Since a monitoring system for tracking the post-training careers of the training participants does not exist, it is difficult to state whether the project's requirement to keep staff on board for a determined time after their training has been effective. However, / Nearly 200 persons received statistical training, of which 52 as computer programmers (through the baccalaureate), 64 as "adjoints techniques" (with about 12 years of schooling), and 83 as "agents techniques" (with up to 10 years of schooling).  - 5 - this perceived risk did not prove relevant since employment in the civil service with respect to job security and salary levels has remained competi- tive vis-a-vis the private sector. 12. Unforeseen Factors Affecting Project Implementation. The rapid deterioration in Niger's budgetary situation led to frequent requests for the use of project resources to cover operating expenditures (principally supplies and maintenance) and the restoration of offices. As mentioned above, the civil works component was introduced to the project midway through implementation and led to significant delays (see para. 9). The lack of standardization of computer equipment led to compatibility problems across different services and thus compromised possible efficiency gains (e.g., the Ministry of Plan is equipped with IBM, while the Ministry of Finance with BULL). In tddition, salary supplements that were originally meant only for training officers were extended to support staff of the working groups in charge of supervising SAL studies, a practice which was ultimately stopped by the Bank for all of its projects. 13. Actions or Decisions Taken or not Taken which Affected Project Implementation. The Bank's agreement to construct a documentation cel.er and expand the computer center in the Ministry of Finance delayed the closing of the project. Moreover, the contribution of the documentation center to institution-building is questionable. The Bank's decision to reject all proposals for salary bonuses in its projects came too late for this operation, but was a positive one. F. Major Results of the Project 14. Globally the project objectives were met. As would be expected, the short-term objectives (the preparation of the consolidation program and the structural adjustment program) were more successful than the longer-term objectives of institutional reform. This result was mainly due to the fact that the achievement of the short-term objectives was closely linked to the mobilization of financial resources from an IMF program and SAL. 15. Impact of proiect. Overall the project impact was mixed, but with important immediate results. On the positive side, some long-term benefits were obtained: (i) an external debt management system was put in place; (ii) the fiscal and customs administrations were computerized, simplifying economic analysis and improving the effectiveness of the tax administration; (iii) the methodology to prepare a three-year rolling public investment program was introduced and adopted in the Ministry of Plan during project preparation, and, despite its deficiencies, has made some contribution in centralizing formally-dispersed data on investments; and (iv) the quality of statistical data produced by the Statistics Division of the Ministry of Plan improved significantly and general economic indicators are being published on a regular basis. As to the studies component, the diagnostics of the public enterprises proved valuable to the action program of the Bank- financed adjustment operation for the public enterprise sector. The recom- mendations of the cost-recovery study contributed to the introduction of a num.ber of measures in the livestock sector and prompted the Government in shifting to a grassroots approach in the design of cost-recovery mechanisms for the health sector. The industrial incentives study recommended a number  -6- of actions related to tariff reform, investment code modifications and simplification of administrative procedures which were adopted. 16. On the negative side, the study on the civil service reform proved costly and useless (see para. 9). The recurrent costs study proved ineffec- tive in its approach for estimating the recurrent costs of the PIP and incomplete in coverage. The results of the training component are, at best, negative because the lack of a well-defined program resulted in a free-for- all approach, wherein all staff of the ministries became eligible, and more often than not general training abroad was accepted instead of training needs related to the candidate's job functions or on-the-job training. G. Project Sustainability 17. Initially, the improvement of the fiscal administration resulted in modest increases in tax and customs revenues, but this was not accompanied by reforms in budgetary structures and procedures aimed at rationalizing resource allocation and at strengthening expenditure control. The computer- ized debt management system has allowed better monitoring of Niger's debt servicing capability and facilitated preparation of Paris Club re- schedulings. It should be noted, however, that this has been in great part due to substantial contributions of two experts (IMF and French Coopera- tion), both of whom had resided in Niger for some time. Some doubt remains as to the adequacy of the training provided to local staff to carry out this work. Moreover, the debt system needs to be integrated into the country's economic and financial projection exercise. On the economic planning side, the programming of public investments is continuing, but on a mechanical basis with little regard to the reliability of data. The programming system requires particular improvemant in linking the investment budget with the recurrent budget and in coordinating programming activities with the tech- nical ministries. The objectives and strategies of the Five-YeL.r Develop- ment Plan (1987-91), produced with significant technical assistance, were not reflected in project selection and programming. The economic indicators generated by the Ministry of Plan do not yet form the basis of macroeconomic policy. Thus the project did not fully meet its objective of improving the plar.ning capabilities of the Ministry of Planning or providing policy-making tools to Government. 18. Given the country's tight budgetary situation, it is doubtful whether the continuation of these activities can be sustained without continued technical assistance and support to cover operating expenditures. Moreover, despite the number of staft trained under the project, the bene- ficiary ministries continue to be plagued with inexperienced staff with weak analytical skills and data processing capabilities. A number of bilateral donors are providing technical assistance support to the ministries of Plan and Finance in the areas supported by the project. However, it is important that these assistants not substitute for civil servants who should be performing the everyday activities of the ministries or for Nigerian staff implementing development projects, as in the past. Rather, their role should be to contribute to strengthening the technical and analytical capabilities of local institutions through supervision of tasks and training of staff.  -7- H. Bank Performance 19. Maior Strengths and Weaknesses. The decision to give supervisory responsibility of the project to the Bank's Resident Representative in 1986 ensured closer monitoring and quicker resolutions to implementation prob- lems, particularly budgetary issues. However, some shortcomings of this decentralization were evident: (i) too little technical support from Headquarters staff during the official biannual supervision missions held by the Resident Representative and his staff. Despite the Resident Mission's requests, only one supervision mission, out of nine, included Bank staff from other disciplines/sectors; (ii) the constant demands on Resident Mission staff preclude adequate supervision of time-consuming technical assistance projects, thus reinforcing the need for greater Headquarters support; and (iii) the Resident Mission's inevitable problem of being brought into the day-to-day management of the project can easily divert it from addressing broader project issues. 20. Lessons Learned. The main lessons learned during project implemen- tation were: (i) the need for a detailed training program to be agreed before credit effectiveness and to be reviewed periodically (para. 22); (ii) the importance of including Headquarters staff with specific sec- toral expertise in at least one supervision mission per year, even when supervision remains the main responsibility of the Resident Mission; (iii) the necessity of limiting, or, at least closely monitoring unallo- cated funds and loosely-defined components (para. 7) to ensure that Government requests are in keeping with the priorities of the project and to prevent it from becoming a slush fund, for activi- ties only vaguely related to project objectives; (iv) the need to minimize to the extent possible the financing of recur- rent costs; (v) the importance of introducing systems and methods that are ap- plicable within the context of the country. For example, although the "twinning" approach (i.e., the recruitment of ADETEF experts, experienced French civil servants in the fiscal and budgetary areas, at minimal cost, and for short-term duration), may have seemed like a good idea, in the end their contribution often proved complicated and unsustainable without continued assistance, notably in the budgetary management system. The mixed success of the twinning approach in Niger suggests that more clearly defined terms of reference are needed for the technical assistants and that training of counterpart staff in the civil service be monitored closely (para. 24); and (vi) in the case of operations managed by Resident Mission staff, the need to communicate fully with headquarters, ensuring especially that critical documentation reaches headquarters (para. 26).  I. Borrower Performance 21. Malor strengths and weaknesses. The Borrower's initial commitment to the project was strong and allowed satisfactory progress in the review of public investment programming and the diagnostics of a number of public enterprises. Despite this commitment, the Inter-Ministerial Committee, set up to ensure the coordination and implementation of the project, met only twice during the course of the project and proved ineffective, mainly because it was too big (11 members) and the competence of the participants (often representatives of the official members) was less than desirable. Political pressures were, however, felt quite strongly in two areas: the Project Management Unit and the training program. The hierarchical position of the Project Unit within the Directorate of the Ministry of Planning (and at times under the control of the Minister himself) weakened the objectivity of decision-making of the Unit and often undercut its managerial role. The Unit came to be seen as a coordinating and administrative body who merely paid bills. Moreover, the appointment of a deputy director of the Ministry of Planning as the Director of the Unit was unsatisfactory as he only devoted part of his time to the Unit, thus de facto delegating his functions to the deputy director of the Unit, an expatriate recruited under the project. A second weakness was the frequent non-respect of the agreed-upon training programs, a sore point throughout project implementation. The ad hoe approach to training added an unnecessary burden on the Project Unit and in some cases, added little to the overall objectives of the project. In fact, the Bank was ultimately forced to suspend all scholarships abroad. From the legal perspective, the Borrower complied with all Credit covenants, except for those related to: (i) training (3.03 (i) and (ii) in the Credit Agreement); (ii) the coordination of the project with other technical assistance projects in the ministries of Plan and Finance (3.04); (iii) the agreement with an agreed-upon organization to strengthen the Statistical Department of the Ministry of Plan (3.05 (a)); and (iv) the submission of a completion report (3.07 (d)). 22. Lessons Learned. The most important element required for a suc- cessful project of this kind is the genuine interest and commitment of the Government to improve economic management. In order to strengthen the position of the Project Unit, it is essential that the responsibilities, particularly the managerial ones, of the Project Unit be spelled out clearly in the beginning of project implementation and that the head of the Project Unit be appointed on a full-time basis and be as independent as possible from political intervention. Project design should ensure, however, that the Project Unit not develop as a totally autonomous unit, but carry out its institutional development functions within the relevant institution, so as to provide continuity once the project is completed. Training programs should be rigorously defined before credit effectiveness and be agreed upon by the Government, the Project Management Unit and the Bank, with changes allowed after review and only under clearly-justifiable circumstances. It might be necessary to review the programs on an annual basis. To the extent possible, the programs should be based on the identified needs and training policy of the institutions concerned, and should include details on type of training required, duration, selection criteria of candidates, identifica- tion of training institutions, and, if possible, the profiles of potential candidates and beneficiaries of scholarships. Given that the supervision of a training program can be time-consuming, it might be advisable to have a  -9- special sub-unit in the Project Unit to monitor them closely, particularly for the tracking of training participants. Finally, when a large amount of computerization is provided in a project, it is highly advisable that the needs of the beneficiaries be assessed early on, so that standard equipment can be identified, with a view to not only minimizing costs but also en- suring compatibility among different departments. J. Project Relationships 23. Impact of Relationships on Proiect Implementation. The good working relationships between the Resident Mission, Project Unit and the Borrower facilitated project supervision and was instrumental in ad- dressing/resolving a number of touchy issues, such as the policy on salary supplements, the elaboration of training programs, the selection of training participants, and procurement procedures. On the other hand, the distribu- tion of supervisory responsibilities between Headquarters staff and the Resident Mission was not always clear and the frequent changes in Head- quarters staff supervising the project did not help (para. 20 (ii)). K. Consulting Services 24. Role. Performance Level and Implications of Involvement. Two permanent experts were assigned to the Ministry of Plan. One was recruited as advisor to the Director of the Project Evaluation and Programming Depart- ment, but became de facto advisor to the Minister and was highly respected for his contribution to the preparation of the structural adjustment pro- gram, participation in Bank/IMF missions, and general operations of the ministry. In fact, his contract was renewed under the Bank's public enter- prise project. As mentioned above, the second expert was the deputy direc- tor of the Project Management Unit throughout project implementation and succeeded in setting up reliable accounting and administrative procedures in the Unit. Despite their positive contributions, this type of technical assistance is costly and unsustainable. The ADETEF experts obtained a high level of respect from their Nigerian counterparts and successfully put in place computerized systems for external debt, fiscal management and customs administration. However, they provided little on-the-job training, which might explain the limited lasting effect of their involvement (para.20(v)). The training programs, elaborated by SEDES and ADETEF experts for the ministries of Plan and Finance, respectively, were not considered of high quality, which may have contributed to the poor implementation of the training component. It should be noted that no annual performance evalua- tion of long-term consultants was prepared either by the Government or the Project Management Unit. The impact of the main economic studies conducted under the project are described in paragraphs 15 and 16. L. Prolect Documentation and Data 25. Adequacy of President's Report and Malor Working Papers. The President's Report and legal agreements for the project were adequate. However, it would have been useful to have a comprehensive implementation document, outlining the project components in greater detail for the Project Unit and for Bank supervision staff. This document would have been a ready reference for new staff and served as a base for the introduction of changes in the project.  - to - 26. Availability of Relevant Data to PCR Mission. The last major supervision mission (November/December 1988) occurred two years prior to the closing date of the project, during which there was considerable discussion of a second Technical Assistance Project very much along the same lines as the first. The Borrower and the Bank could ultimately not agree on the design and composition of the second project and all preparation ceased. This break in discussion led to a deterioration in the dialogue between the Borrower and the Bank during the final stages of project implementation. In September 1989, the supervisory responsibility of the project was returned to Headquarters. A problem encountered during the preparation of the PCR was the lack or incompleteness of important documents, such as terms of reference, reviews of studies, progress reports, consultants' contracts and anrual budgets, in the Central Files. This gap in the flow of documentation between Resident Mission and Headquarters should be addressed, especially for projects that are closely supervised by Resident Missions.  - 11 - PART III. STATISTICAL INFORMATION 1. Related IDA Credite Credit Date of Title Purpose Approval Status Comments Cr. 1680-NIR/ To support the first 18 Feb 86 Closed A-12-NIR phase of the Government's 31 Dec 87 Structural structural adjustment Adjustment program; reforms were in Credit the ar-as of public resource management, the parastatal sector and agricultural policy. Cr. 1833-NIR/ To support the extension 2S Jun 87 Ongoing Closing Date was not extended A-31-NIR of the Government's due to slippages in the Public adjustment program by implementation of the Enterprise deep-ning the reforms in adjustment program. USS8 Sector the public enterprise million remains undisbursed. Adjustm-nt sector and those in the Credit area of public resource management. Cr. 1838-NIR To assist the Government 7 Jul 87 Ongoing The Ministry of Public Public in acquiring the Enterprises (PEs) was Enterprise technical and abolished and responsibility Institutional administrative capacity for monitoring the PEs was Development to formulate and transferred to the Ministries Project implement reforms in the of Plan and Finance. After a public enterprise sector. difficult period of transition, project implementation resumed satisfactorily. -----------------------------------------------------__----------------------__-------------------------___  - 12 - -------------------------------------------------------------------------__--__ 2. Project Timetablo Date Date Date Item Planned Rovised A-tual - Idontification Jan 81 -- Mar 83 - Preparation mission Mar 81 -- -- - Appraisal mission Apr 81 War 83 14 Mar 83 - Negotiations -- Sep 83 26 Apr 84 - Board Approval -- Dec 83 7 Jun 84 - Signature -- -- Jul 84 - Effectiveness 16 Oct 84 12 Nov 84 8 Nov 84 - Project Completlon Oct 89 -- 81 Oct 90 - Credit Closing 30 Apr 90 31 Oct 90 31 Oct 90 Comments Identification. The dates cited are those of the final draft and final versions of tho Project Brief. Negotiations. The Bank and the Government decided not to hold formal negotiations in order to speed loan processing and to start tho studies for SAL preparation quickly. Negotiations were declared completed on April 28, 1984. Credit Closing. The last withdrawal application was paid volue July 4, 1990.  - 13 - 3. Credit Disbursements FY85 FY86 FY87 FY88 FY89 FY90 FY91 Appraisal Estimate 1.60 2.40 2.90 2.20 1.50 1.10 Actual 1.68 1.61 2.37 3.72 3.16 1.13 0.04 Actual as % of Estimate 105 67 81 169 210 102 Date of Final Disbursement: July 1990 Cred i t Di sbursernents USD millions 3. 0 2..0 v . a 0.0 PrY35 rY6 rY87 rYse ,Y89 FY90 FY91. Disbursesents as estimated at Appraisal __ Actual disbursements  - 14 - 4. Project Costs and Financing A. Project Costs Appraisal Actual /1 Estimate Item (USS million) (USS million) 1. Project Managremnt Unit 0.51 2. Economic Studies -Public Investment and Financial 0.09 Situation Study - Structural Adjustment Studi-e 1.74 - Projoct Appraisal Studies 0.26 3. rnstitution-building Ministry of Plan 1.26 Ministry of Finance 2.58 4. Training 0.79 6. Provision for Additional Studies and Tochnical Assistance 2.79 BASE COSr 9.98 Physical Contingencies 0.60 PriceC Contingencies 2.12 ----------------------------------------------------------__-----------------__-------------------- TOT'L 12.80 /1 Unavailable -----------------_-----------.--------------------------------0_-------------__-------_------------  - 15 - 4. Project Financing Planned /1 Rovised /2 Final Source ---- - (USs million) ------------ IDA Expenditure Categorrice 1. Consultants and exp*rts 6.37 4.68 6.11 2. Training and fallorships 0.61 1.60 1.29 3. Vehiclos and equipment 1.19 1.80 1.86 4. Supplomental salaries for 0.23 0.32 /3 0.09 training officaer 5. Office rent 0.06 1.60 1.47 6. Ronovation of offieco undor O.E9 1.05 Parts C.4 and 0.5 of the Project, and civil works ftor Documentation Conter 7. Initial deposit to the 0.10 0.27 Sp-cial Account 8. Rofunding of Project 1.00 0.83 0.83 preparation advance 9. Unallocated 3.16 0.23 Undisbureed/Cancollation 0.01 TOTAL IDA 11.70 11.70 11.70 Domestic 0.90 0.92 0.90 TOTAL 12.60 12.00 12.60 /1 Allocations at the time of nogotiations /2 Amendment of March 11, 1987. The Credit agreement was amended four times ovor the life of the project. /3 Category amonded to include the salary of an accountant end supplemental salaries for support staff. -- - -- - - -- - -- - - -- - -- - - -- -- - - -- - -- - - -- - -- - - -- - -- - -  - 16 - s. Status of Covonantu pag I _____------- -_--_----_--- -------_-_______ Dordl;no for Section /a Covenrnt Compliance Status 3.02 (a) The Borrower shall csrry out the none In compliance, projoct in conformity with appropriate pract ces. 3.01 (b) The Minister of Plrn shall bo in charge nono In compliance. of the administrative coordination of the Project and to this effect shall operate the Project Management Unit (PuU) and the Interminiaterial Coordination Comittoe. 3.02 (a) The Borrower shall employ consultants I Jan 86 In compliance. in accordance with principles and Project procedures satisfactory to IDA. *dministrator recruited Aug 83; deputy director recruited Oct 84. 3.02 (b) The Borrower shall cooperate fully with none In compliance. said consultants and make available to them information, staff, and facilities useful to successful execution of the Project. 3.02 (c) The Borrower shall ossign qualifiod mone In compliance. staff to work with consultonts to carry out the Project. 3.03 (i) Staff trained for at least 8 months none Not in compliance. shall be ossigned to the same Ministries for at leaSt one yoer after completing thoir training. (ii) Staff trained for more than 8 none Not In compliance. months shall be assigned to tho same Ministries for at least throe years after completing their training. 3.04 The Borrower shall through the PMU none Not in complionce. ensure coordination between tho Project and other TA programs in the Ministrios of Plan and Finance. 3.06 (a) Tho Borrower shall enter into an 31 Oct 84 In compliance. agreement with an organization Although arrangement accoptablo to IDA to strongthon the with UNDTCD did not Statistical Departmont of tho Ministry work out, agreement of Plan. was reached for training component with Contre National d'Informatique do Tunis and ENSEA of Abidjan. 3.05 (b) The Borrower shall not modify the above none In compliance. agreement or the agrooment with ADETEF unloss IDA agrees. /a Refers to section in Development Credit Agreoment