Zambia - Technical Assistance Project

The Woi FOR OFFIUC Report No. 9702 PROJECT COIvPLETION REPORT ZAMBIA TECHNICAL ASSISTANCE PROJECT (CREDIT 873-ZA) JUNE 25, 1991 Country Operations Division Southern Africa Department Africa Regional Office This document bas a restricted distribution and may be used by recipients only in the performance of their official duties. Its content may not otberwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS v Currency Unit = Kwacha (K) US$1.00 = K 0.83 K 1.00 US$1.20 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft.) 1 kilometer (km) 0.62 miles (mi) 1 sq. kilometer (km2) = 0.386 sq. miles (sq. mi.) FISCAL YEAR January 1 - December 31 ABBREVIATIONS DCA - Development Credit Agreement MAI.I.) - Ministry of Agriculture and Water Supply NCDP - National Commission for Development Planning PCR - Project Completion Report PPU - Project Preparation Unit SEU - Special Economic Unit ZIMCO - Zambia Industrial and Mining Corporation, Ltd. ZSIC - Zambia State Insurance Company  FOR OFFICIAL USE ONLY THE WORLD BANK Wahington, D.C. 20433 U.S.A. Office of Director-General Opeato Evaluation June 25, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Zambia Technical Assistance Project (Credit 873-ZA) Attached, for information, is a copy of a report entitled "Project Completion Report on Zambia - Technical Assistance Project (Credit 873-ZA)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. 2 Attachment Thb document has a restricted distribution and may be used by recipients only In the performance of their official duties. lts cortents may not otherwise be disclosed without World Bank authorization.  PROJECT COMPLETION REPORT FOR OFFICIAL USE ONLY ZAMBIA TECHNICAL ASSISTANCE PROJECT (CREDIT 873-ZA) Table of Contents Page No. PREFACE ........................................................... i EVALUATION SUMMARY .................................................. PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity ............................................... 1 2. Introduction ................................................... 1 3. Objectives and Project Design .................................. 2 4. Implementation Experience and Project Results The Bank's Role ........................................... 3 The Sub-projects .......................................... 4 Long-term Experts ......................................... 5 Medium- and Short-term Consultants' Services .............. 5 Economic Management ....................................... 7 Training .................................................. 8 Vehicles and Equipment .................................... 9 5. Longer-term Impact and Sustainability .......................... 9 6. Lessons of Experience Government Commitment ..................................... 10 Counterparts .............................................. 11 Follow-up of Studies ...................................... 12 PART III: STATISTICAL INFORMATION Basic Data Sheet ............................................... 15 Cumulative Credit Disbursement ................................. 15 Other Project Data ............................................. 15 Mission Data ................................................... 16 Estimated Project Cost (at Appraisal) .......................... 16 Actual Disbursements ........................................... 16 This document has a restticted 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.  ANNEXES Annex I Long-term Experts .................................... 17 Annex II Medium- and Short-term Consultants................... 18 Annex III Vehicles, Equipment and Training ..................... 20  - i - PROJECT COMPLETION REPORT ZAMBIA TECHNICAL ASSISTANCE PROJECT (CREDIT 873-ZA) PREFACE This is the Project C'mpletion Report (PCR) on a Technical Assistance Project in Zambia, for which Credit 873-ZA (US$5 million) was approved on December 21, 1978. The credit became effective July 12, 1979. The original Closing Date of June 30, 1984 was extended to June 30, 1986. The grace period during which disbursements were allowed after closure was extended to July 31, 1987. Final disbursement was made on July 22, 1987, at which date an undisbursed balance of US$67,549 was cancelled. The PCR (Preface, Evaluation Summary, Parts I & III) was prepared by the Cosentry Operations Division, Southern Africa Department, Africa Regional Office. Despite numerous requests from the Bank, the Government has not prepared Part II of the report; however, its views, as presented to the mission, are reflected in the Project Review prepared by the Bank. The PCR is based on a review of the relevant project documentation, interviews of Bank staff involved, and a mission in April 1990 to discuss the project with Zambian officials.  - iii - PROJECT COMPLETION REPORT ZAMBIA TECHNICAL ASSISTANCE PROJECT (CREDIT 873-ZA) EVALUATION SUMHARY Obiectives 1. The Credit was for the first freestanding Technical Assistance Project in Zambia. During implementation, the project's objectives were changed somewhat. The original goal was the strengthening of the Government's planning and project preparation capability through an infusion of foreign expertise to help prepare projects and carry out preinvestment studies. There was only a minor role for institution building and training. Training was to take place mainly through on-the- job training of local staff by long-term foreign experts. Halfway through project implementation, however, the emphasis shifted towards providing technical assistance for improving general economic management, which had been the principal development problem facing the Zambian authorities. The project was a convenient vehicle to finance assistance in economic management, as well as in a number of unrelated, ad hoc technical assistance activities. Implementation Experience 2. The project had a very slow start. It was intended to be completed in about four years, but after four years only about 20 percent of the credit was disbursed. The main reason for the delay was a lack of consensus within Government on the purpose and design of the project. Particularly, the National Commission for Development Planning (NCDP), the intended main beneficiary, did not feel committed to the project for ideological and other reasons and therefore did not assume responsibility for project execution. After 1982, however, project implementation improved through a combination of three factors: - transferring the main responsibility for sub-project processing from headquarters to the Bank's Resident Representative. - the appointment of an expatriate project coordinator. - the emergence of reform-minded forces within Government, who found other uses for the project. 3. Final disbursement was made in July 1987, more than three years after the original closing date.  - iv - Results 4. About half of the project funds were used for the original purpose of strengthening project preparation; about 15 percent, to support the Government's economic reform efforts, and the rest for a variety of unrelated activities. The bulk of the credit financed long-term foreign experts and medium- or short-.erm consultancies to carry out studies, both project- and non-project related. Small amounts were used to finarnce fellowships abroad and project-related equipment, The results of the sub- projects were mixed. 5. Most of the long-term experts were employed in line functions rather than in advisory capacities, as was intended. As a result, counterpart training was on the whole neglected. Project-related studies led to a small number of Bank-financed projects, the implementation of which, however, was severely hampered by the Bank's suspension of disbursements. Many of the non-project related studies, particularly those initiated by the Bank, were not properly followed through by the Government and had very little lasting impact. One of the most successful elements of the project was the small training component, which financed university courses abroad for 19 Zambians. Sustainability 6. Although the immediate goal of the project was preparing projects for external financing, the more lasting impact was thought to be twofolds a permanent strengthening of planning and proj9et preparation, and creating the capacity to identify technical assistance requirements and use offers of such assistance from external sources more effectively. A number of professional staff in the Project Preparation Unit (PPU) in NCDP benefited from the fellowships provided under the project and from in- house courses orpanized by the project coordinator. The PPU is now capable of carrying out ..ost project preparation tasks. On the other hand, during its entire life, the project has remained without a local management structure. As a result, it did not contribute to institution building, and the country's absorptive capacity for technical assistance did not improve. Lessons of Experience 7. The most significant lessons flowing from the experience with this technical assistance project appear to be the followingt - First, the necessity to ascertain the government's commitment, and, related to that, the importance of consensus building within the government and involving all parties in project design. - Second, the futility of on-the-job training of local counterparts by long-term foreign experts, and the necessity to devise other means of transferring experience and knowledge.  - v - Third, the necessity to create a system by which results and recommendations of studies are disseminated and followed through in the country.  PROJECT COMPLETION REPORT ZAMBIA TECHNICAL ASSISTANCE PROJECT (CREDIT 873-ZA) PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project IdentitX Name : Technical Assistance Project Credit Number : 873-ZA RVP Unit : Africa Regional Office Country : Zambia Sector s Technical Assistance 2. Introduction 2.01 The freestanding Technical Assistance Project was the first of its kind in Zambia. It came into being at the initiative of the Bank, which, by the end of 1977, had become concerned about the slow disbursements for existing projects and the lack of readily implementable projects in the country's development plans. 2.02 The project's primary goal was simple and straightforward: strengthening the government's planning and project preparation capability through an infusion of foreign expertise to help prepare projects and carry out pre-investment studies. There was only a minor role for institution building and training in the project. The Government accepted the project as designed by the Bank, but for a number of reasons, commitment to it remained lukewarm and disbursements were very slow. It was not until about four years after project approval that the Government started making greater use of the funds. By that time, however, the objective of the project had shifted from improving project preparation towards improving general economic management. One of the advantages of the project was its flexibility to adapt to changing circumstances. 2.03 The following Project Review is structured as follows. First, objectives (both 'old' and "new") and project design will be reviewed; followed by a review of implementation experience and project results. Some comments will be made about the sustainability of the project and its longer-term impact. Finally, a few issues will be discussed in somewhat greater detail as they appear to provide lessons for future projects. The selected topics ares first, the necessity to ascertzain government commitment, and, related to that, the necessity to i.ivolve government in project design; acond, the question of on-the-job training of counterparts by foreign experts; and, third, the necessity to follow up on the recommendations contained in studies.  3. Obiectives and Proiect Desitn 3.0 The original objective of the project wLS to help the Zambian Government achieve its investment objectives in the Third National Development Plan (1973-1983) by strengthening planning and project preparation. This was to be achieved by providing about 35 manyears of long-term expert assistance and an equal amount of short- and medium-term consultant services. The long-term experts would help overcome shortage;. of experienced planners and project analysts, and the consultant services would provide essential pre-investment work cn hight priority projects. Most training was to be on-the-job counterpart training, which would provide Zsmbians with experience in economic planning and project preparation. Institution building under the project was limited to creating greater work-discipline in the various planninig units by the formation of working parties to prepare sub-projects, and the requirement to prepare annual work programs. 3.02 Most of the assistance under the project was intended to be for the Project Preparation Unit (PPU) in the National Commission for Development Planning (NCDP). Within Government, NCDP was the agency responsible for formulating the country's development plans, and monitoring capital expenditure. In addition to the PP", other ministries and government agencies that had a need for project preparation assistance could also benefit from the project. 3.03 As mentioned earlier, the project as presented to the Board was basically the Bank's idea, and prepared by Bank staff. Although eventually general agreement was reached between the Bank ard the Zambian Government on the projec' ae it was presented in the Development Credit Agreement, there was a lsck of consensus within Zambia on the project's concept. The need to improve project preparation was generally recognized, but opinion on how to best achieve that goal differed widely. The Ministry of Finance appears to have been willing to tccept the large influx of foreign experts the project proposed., In NCDP, however, there were strong objections on ideological grounds to working with the Bank and to increasing the role of foreign experts, particularly thoso from Western Block countries. Also, NCDP officials wanted a strong trainirig component in the project, so were in favor of a large component of fellowships and scholarships. Having seen many failures in the past, they were skeptical of the proposed counterpart arrangements. 3.04 This lack of consensus caused serious flaws in the design of the project's management structure. The overall responsibility for the execution of the project was unclear in both the President's Report and Development Credit Agreement (DCA), and intentions expressed in the President's Report found no reflection in the DCA. NCDP, the main beneficiary of the project, was not assigned any responsibility for implementation. In the President's Report, it was merely called "the focal point for project implementation', which in practice NCDP took to mean the approval of individual sub-projects. In the President's Report, the assignment of responsibility for project execution only appears in the job  description of a senior expert to to attracted under the project, who would "assume responsibility for the smooth functioning of the entire project, ensuring that all conditions of the Credit Agreement are met...". This fact, however, was not reflected in the DCA. Provisions related to project administration were contained in the DCA, but in the absence of an executing agoncy, it was not clear who would perform that function. 3.05 The unclear responsibilities have continued to haunt the project for the f-est four years of its life. It would be unjust, however, to blame project design as such. The design as presented in the President's Report and DCA is simply a reflection of the lack of consensus about the project's concept, and of the compromises that were necessary to make the project acceptable to all parties concerned. 3.06 Towards the end of 1982, a number of factors combined to make the project more palatable in Zambia (See para 4.03 "Implementation"). By that time, however, it had become clear that because of persistent financial problems the preparation of new investment projects did not have the highest priority any more. Instead, emphasis had shifted to restructuring the economy and improving general economic management, and part of the remaining funds was used to support the Government's reform efforts. 4. Imp1lement-.on Experience and Proiect Results The Bank's Role 4.01 The project had a very slow start. At the end of 1982, four years after project approval, disbursements amounted to not more than 20 percent of what was estimated they would be at that time. After 1982, project implementation improved substantially. Before discussing the Bank's eirect role in project implementation, it should be pointed out that, more than anything else, the speed of implementation seems to have been related to the general state of Country-Bank relations and the presence or absence of reform-minded forces in economic diicision-makiag in the country. 4.02 Ever since independence, the Government had extended its role in economic management and planning, until eventually a system of pervasive government intervention and control over the economy was developeA. Pricing, subsidy, tariff and exchange rate policies combined to cause stagnation and financial difficulties. Over the years, the Bank had become increasingly critical of Zambian economic policies, but had been unable to achieve much change. When the Technical Assistance Project was conceived, in 1977/78, the Bank's influence was not large. 4.03 This changed for the better during 1982. The economic situation had continued to deteriorate, but reform-minded forces in government had become more influential in economic decision-making. In April 1983, a Special Economic Unit (SEU) was created (composed of high level Zambian officials) that sought actively Bank advice and assistance on economic  -4- policy matters, which included the use of the remaining funds of the technical assiatance project. In a short period, a large number of reform measures were taken, supported by IMF funds and policy-based Bank credits. Towards the end of 1985, however, the influence of the SEU appeared to be waning. Ic wae disbanded in April 1986, interventionist forces in Government gained the upperhand once again, and many policy decisions were reversed. The financial situation continued to deteriorate to the point where the Government was unable to serve its debt to the Bank. In May 1987, the Bank suspended disbursements, and curtailed its activities in the country. 4.04 The Bank's role in project implementation during the first three or four years was small. Internal project correspondence in Bank files speaks of a great deal of frustrati6,x. NCDP was slow in submitting sub- projects for approval, counterparts were not appointed, work programs were not drawn up and accounts were not submitted. The project was declared a "prob'em project", but at problem project reviews nothing could be achieved other than noting the lack of progress and the Government's apparent lack of commitment. There was just one supervision mission in those early years. It was not possible, so long after the start of the project, to ascertain the reasons for the lack of supervision in the early years of the project. It is doubtful, however, that supervision alone could have brought about a change in NCDP's attitude towards the project. 4.05 In May 1982, in order to improve project implementation, the Bank's Resident Representative was assigned primary responsibility for processing sub-projects to be financed from the credit, and for supervising project implementation. In an attempt to further speed up progress, the Bank's Legal Department had started investigating the possibility of circumventing NCDP and having sub-projects approved directly by other ministries and agencies in Government. That issue was no longer pursued, however, when the formation of the SEU and some personnel changes in NCDP had created a more favorable climate. Until the end of the project, the Bank's Resident Representative has played a vital role in its execution. There was one more formal supervision mission from headquarters, in July 1983, which noted the improved situation. Thereafter, implementation was monitored on a regular basis by the Resident Representative, without submitting formal supervision reports. The Sub-proiects 4.06 The TA-credit provided financing for the following sub-projects: USS million Eleven Long-Term Experts 2.15 Sixteen Medium- and Short-term conisultancies for studies 2.44 Training programs abroad for 19 Zambians 0.23 Vehicles and Equipment for the Project 0.11 Subtotal 4.93 Cancelled 0.07 Total 5.00  Details on the various sub-projects are given in Annexes I, II, and III. Lona-term Experts 4.07 During the first four years, NCDP had approved contracts for six long-term experts: three project evaluation experts for NCDP itself, one project coordinator for a rural water supply project in the Ministry of Agriculture and Water Supply (MAWD), one external debt administrator in the Ministry of Finance, and one financial director for the Zambia Industrial and Mitxing Corporation, Ltd (ZIMCO), which is the Government's umbrella organization for its interests in industry and mining. All experts were employed in line functions, rather than in advisory capacities, although ZIMCO's financial director, on a voluntary basis, soon became an active advisor to the SEU. None of the experts was assigned a counterpart. 4.08 Of the total of six appointees in the early years, however, only one was a "new" expert: one of the evaluation experts for NCDP. The others were foreign experts, already employed in Zambia, often in the same function, but on local contracts. The project was seen by the Government as a convenient vehicle to bring their salaries ur to international levels. For as far as could be ascertained, probably only one expert, ZIMCO's financial director, would have left the country if his existing contract had not been renewed on better terms. The topping-off of salaries of experts already present was clearly not the intention of the project, and the practice was ended quickly after the Bank's Resident Representative assumed responsibility for processing sub-projects. 4.09 NCDP had delayed engaging a Senior Expert/Project Coordinator for its Project Preparation Unit until late 1982. The senior expert should have played a vital role in the initial stages in preparing work programs, project monitoring and reporting, and organizing training. When the person finally assumed his functions, in the beginning of 1983. he soon became invaluable in the further execution and management of the project. Four more long-term experts were engaged under the projectt two planning experts in MAWD, one economic advisor in the Ministry of Finance, and one technical advisor for the Zambia Coffee Company, Ltd. 4.10 There is not much that can be said about the implementation of this particular component of the project. All experts were hired directly by the Government. All were again largely employed in line functions. Apart from the senior expert who assumed extensive training functions, counterpart training remained insignificant. The Bank's role was limited to commenting on the experts' qualifications at the time of recruitment. Medium- and Short-term Consultants Services 4.11 A total of sixteen studies were carried out under the project by cc.aultants. Only three were started during the first four years; the rest was cirried out after 1982. Eleven studies were for various sectors of the economy, though not all of them were pre-investment studies. The remaining five studies were related to the improvement of economic management in general.  4.12 The following five studies were carried out for the aRricultural sector: - Tobacco Sector Study (1980) - Inland Fisheries Development Study (1981) - A3ricultural Research and Extension Study (1984) - Evaluation of the Ministry of Agriculture and Water Development (MAWD), (1985) - Lukanga Tobacco Project Preparation (1986). 4.13 The Tobacco Sector Study was undertaken at the Bank's initiative. Previous Bank-financed projects involving tobacco production had not been successful, but it was thought that the sub-sector held good potential. The study, which was guided by the Bank's Regional Office in Nairobi, was deemed necessary before further investment could be undertaken. But there were no further Bank-financed tobacco projects, and the study is now forgotten in Zambia. 4.14 The Fisheries Study was intended to lead to a fisheries project to be financed by the Bank. Halfway through the exercise, however, Bank staff considered the consultant's performance unsatisfactory, and convinced the Governmert to cancel the contract. Bank personnel then prepared the project, which was approved in January 1985 (Credit 1529-ZA; Fisheries Development Project; US$7 million). 4.15 The Research and Extension Study was a combined Government and Bank initiative, and provided the Government with a comprehensive, 15-year strategy for revamping research and extension services to make them more appropriate for small-scale farming. It formed the basis for a Bank project approved in March 1987 (Credit 1746-ZA; Agricultural Research and Extension Project; US$14 million). 4.16 The Evaluation of the MAWD was to evaluate the efficiency of the ministry's organizational structure and administrative procedures, and the appropriateness of the investment program. The study was completed satisfactorily, but since it was basically intended to help resolve disputes within the ministry about the delineation of responsibilities of certain top functionaries, interest for the study has faded after the functionaries concerned were reassigned. 4.17 The Lukanaa Tobacco Proiect was a feasibility study for an investment by the Zambia State Insurance Company (ZSIC). When the request for financing was received by the Bank, the study had already been completed, financed entirely by ZSIC. As an exception, the Bank agreed to ex post reimbursement of the foreign exchange cost. After that, more requests of that nature were received, but they were declined. 4.18 Both studies for the industrial sector were carried out at the request of ZIMCO/INDECO, the umbrella organizations for Zambia's industrial state enterprises. The 1981 Fuel Ethanol Proiect was a feasibility study  - 7 - for a proposed ethanol plant. The project caused some controversy within the World Bank Group. The outcome was that the economic justification of the plant would be marginal at best. Over the objections of Bank staff, however, IFC remained interested in the project and a loan/investment for it was approved in 1982. Eventually, ZIMCO's board rejected the project and IFC withdrew. The Forestry/Wood ProcessinR Study (1985) was considered to be very useful by Zambian officials, and it led to a restructuring of the industry as a whole, and to a strengthening of ZAFFICO, Zambia's state enterprise involved in wood processing. 4.19 The two studies, in 1983/84, for the transport sector were less successful. They were the Trucking Transport Sector Study and the Tazaral/ Operational and Staff inx Study. The Bank had observed inefficiencies in the operations of the state-controlled trucking industry and TAZARA, and had hoped that the studies would provide an opportunity for dialogue, and eventually Bank operations. The studies were carried out quite competently, and, as Bank staff concluded, provided indeed 'a basis for an improved dialogue". But the matter was not pursued any further, and the studies have left no trace in Zambia. 4.20 The Family Health Project (1984), which was originally a project preparation activity, in fact turned out to be a study tour for Zambian health officials to familiarize themselves with health systems in various countries. It was organized by the Ministry of Health, and there was no direct Bank involvement. Reportedly, the tour was successful, and led to Zambia's adopting various elements of the Kenyan family health system. 4.21 The Government undertook the Education Reform Studv (1985) as a condition to the Bank-financed Fifth Education Project (Credit 1251-ZA). Although it started several years late, it turned out to be remarkable in several respects. With some Bank guidance, it was organized and executed entirely by faculty staff of the University of Zambia with the assistance of university students. Not only was the study much cheaper than a comparable study carried out by foreign consultants would have been, it was of good quality and the Government felt that they 'owned' it. Its recommendations are being implemented. Economic Manasement 4.22 Four of the five consultants activities financed under the project to improve general economic management were to help along the substantial amount of economic and sector work and project preparation that was going on in the Bank in the period 1983-1985 in support of the Government's economic recovery program. The fifth activity was the preparation of the Bank's second technical assistance project that was aimed at improving development administration. 4.23 The expenditures for Budaetarv Reform in 1984 and 1985 were for consultants services to help implement the recommendations contained in the studies Bank staff had carried out to improve budgetary procedures. I/ Tanzania-Zambia Railway Authority. The Tanzanian Government shared in the cost of the study.  - 8 - Systems to integrate recurrent and capital expendituras, and to provide "forward budgeting* were successfully installed. The integrated recurrent/capital budget procedures are still being used in Zambia to the Government's satisfaction, but, after a first try in 1986, the system of forward budgeting was abandoned after it had run into teething troubles, and Bank assistance was no longer available because of some reassignments and the suspension of disbursements. 4.24 The Export Promotion Study was a very small element of a larger study sponsored by UNCTAD intended to create a better policy environment for export diversification. A Public Sector Investment Proaram was prepared by consultants for a Consultative Group meeting in Paris in May 1984. Unfortunately, as had been the case with so many previous investment plans, it soon lost its operational significance because of over-ambitious estimates of financial resources. The Joint Monitorina Comuittee was an outcome of the 1984 Consultative Group meeting. The project financed the installation of a computerized monitoring system for external aid flows and the implementation of externally financed projects. The system became operational in the beginning of 1987. After a few initial reports to the Committee, activities came to a halt in 1988 when political opposition to the system arose. 4.25 The Preparation of the Technicil Assistance II Proiect, in 1984 and 1985, was at the request of the Special Economic Unit and the Ministry of Finance. It was an ambitious attempt to improve development administration which was too weak to be of much use in the planning and implementation of economic reform programs. It would have involved, among other things, changes in functions, organizational structures and procedures of the Ministry of Finance and in its linkages with NCDP and other ministries. Because of the political sensitivity of these matters, it was envisaged that the consultants would work closely with high-level Zambian officials to ensure acceptance by all parties concerned. By the time the consultants started their work, however, the influence of reform- minded officials in Government was on the decline and the necessary input by Zambian staff was not provided. Many of the consultants' proposals turned out to be unacceptable to the Government, and Bank staff had to make substantial changes. The revised project was approved by the Board in May 1986 (Credit 1679-ZA; Second Technical Assistance Project; US$8 million), but because of the Bank's suspension of disbursements in May 1987 implementation has hardly started. It is now doubtful whether it will ever be implemented in the form envisaged. Training 4.26 There was a small amount of money earmarked for training, but the exact size and purpose were not very clear.2/ The President's Report mentions "a small amount' for funding of short-term training courses and other training requirements. The Development Credit Agreement, however, suggests that the money was to defray the cost of counterpart training. Whatever the original intention may have been, no use was made of this 2/ In the President's Report, training was lumped together with vehicles, equipment and operating expenses, in total for US$200,000.  - 9 - component during the first four years. In 1982, the Government requested permission to use project funds for longer-term university training abroad, which was granted. Thereafter, 19 Zambian officials received scholarships and fellowships of six months to three years duration for a total amount of US$233,000. This new component turned out to be one of the more successful features of the project. Vehicles and Eauipment 4.27 The last component was for project-related equipment and vehicles, most of which was procured under an agreement between the Government and UNDP. 5. Longer-term ImDact and Sustainability 5.01 As mentioned earlier, the project's objectives had changed during implementation, away from supporting project preparation, towards improving general economic management. In the event, an estimated 48 to 50 percent of the credit funds were used for strengthening planning and project preparation. About 15 percent was used to support general economic management, and the rest, 35 to 37 percent, was used for various unrelated ad hoc activities that appeared useful at the time, but whose longer-term impact is difficult to trace. 5.02 Although the immediate objective of the project was to help the Government achieve its investment objectives in the Third National Development Plan, the more durable impact was thought to be twofolds first, a permanent strengthening of the Government's investment planning and project preparation capabilities, and, second, to build up the Government's capacity to identify its technical assistance requirements and utilize offers of such assistance from various external sources more effectively. 5.03 As described in the President's Report, the first longer-term goal--basically improving the technical skills of Zambian officials--was to be achieved largely through on-the-job training of local counterparts by foreign experts. This did not work well. Counterparts were rarely assigned to experts, and in the few cases when they were, frequent reassignments and other interruptions prevented an efficient transfer of expertise. Although the Development Credit Agreement contained the provision that "...the Borrower shall assign at least one qualified local counterpart to each expert...", in none of the individual contracts between the Government and the experts was there any reference to training functions. It would be too simplistic, however, to blame the lack of success of counterpart training on this administrative oversight; rather, it would appear that there is something fundamentally wrong with the concept of on-the-job training by long-term foreign experts. More about this in the final section 'Lessons of Experience". 5.04 A number of Zambians did receive relevant training, however, but in a manner different from that envisaged in the project description. After he took up his assignment, in 1983, the senior expert/project coordinator in NCDP's Project Preparation Unit undertook to devise training programs and to conduct seminars and courses for interested local officials in the PPU. A number of these officials also benefited from the  - 10 - fellowships abroad the project financed after 1983. As a result, PPU staff is now capable of carrying out most project preparation tasks. 5.05 The second long-term goal, to increase the absorptive capacity for technical assistance, was not achieved. In rather vague terms, the President's report describes that that was to be attained through instituting annual work programs and informal working groups, but, in the complete absence of a local management structure for the project, it is not surprising that nothing lasting could be accomplished. The senior expert/project coordinator called several ad hoc working groups to discuss certain activities to be carried out under the project, but that was discontinued after his departure. 5.06 In the category "improving economic management", the most important sub-project designed to have a long-lasting institution-building impact was the .reparation of the Second Technical Assistance Project, described in para 4.25. The project's purpose was to enable the Ministry of Finance to take on a leadership role in devising and executing economic reform programs. Project implementation, however, was held up by the suspension of Bank disbursements in 1987, and the recommended organizational changes met some political resistance. 6. Lessons of Experience 6.01 The most significant lessons flowing from the experience with this technical assistance project appear to be the following: - First, the necessity to ascertain the government's commitment, and, related to that, the importance of consensus building within the government and involving all parties in project design. - Second, the futility of one-the-job training of local counterparts by long-term foreign experts, and the necessity to devise other means of transferring experience and knowledge. - Third, the necessity to create a system by which results and recommendations of studies are disseminated and followed thrrugh in the country. Gcvernment Commitment 6.02 Full government commitment and understanding as a pre-condition to project success has been mentioned so frequently in recent project evaluations that it has almost become a tautology. However, once again, the main reason for the project's rather disappointing results was the lack of commitment, or, put more precisely, the indifference on the part of NCDP, which was the organization intended to benefit most. The reasons for going ahead with the project in spite of this have not been documented, but from interviews it may be gathered that, on the Bank's side, there was a strong desire to push ahead with a project that was already slipping in the program; and on the Government's side (the Ministry of Finance in this case), there was a preparedness to go along with the Bank for the sake of good relations.  - 11 - 6.03 With the benefit of hindsight, it is clear what should have happened at the stage of project preparation. Bank staff should have analyzed more carefully the reasons for NCDP's reluctance toward the project. While the problem of ideology may have been difficult to address, some of the more practical concerns could perhaps have been dealt with. They would have learned that NCDP's concern was not so much the lack of implementable projects as such, but more the need to give local staff involved in planning and project preparation proper education and training. NCDP recognized the proposed project for what it wass an expedient to make a number of projects ready for external financing, but with negligible training and institution building components and a greater dependence on foreign expertise. What NCDP wanted appeared reasonable enoughs less emphasis on foreign experts, and a much larger component to train local planning staff, not through counterpart training, but rather, through relevant fellowships abroad. It was for these reasons that NCDP declined in the first four years to cooperate with project execution. Counterparts 6.04 Had Zambian involvement in the design of the TA project been greater, the Government's lack of enthusiasm for the use of foreign experts and the associated on-the-job training of local counterparts would have been clear from the beginning. Most aid agencies who provide technical assistance insist on some sort of expert-counterpart arrangement. Over the years, the Government has gained a good deal of experience with it, but most of it was unfavorable. It had come to the conclusion that counterpart training by long-term experts is a very expensive and ineffective way of transferring expertise. 6.05 One high Zambian official formulated the problem as follows: *Counterpart training is usually a continuous source of friction and frustration, both for the expert and the trainee'. Friction is caused by a number of factorst - The enormous difference in pay between expert and counterpart that tends to cause resentment on the latter's part. - The Government's preference for employing experts in executive line functions, rather than in an advisory capacity. The experts usually have no time or motivation to train. - The enormous communication problems that become apparent when, as usually is the case, the gap in knowledge levels between expert and counterpart is too large. 6.06 It seems significant that Zambian officials interviewed for this report, who had been exposed to counterpart training themselves, never even mentioned job training as a useful outcome of the arrangement. If they remembered anything positive at all, it was usually something more general, such as the way the expert had approached problems, or had helped in finding compromises in conflict situations. The same officials were unanimous in their praise for the (limited) amount of training  - 12 - opportunities provided in the project's later years; namely, the fellowships abroad and the in-house courses provided by the senior expert. 6.07 This attitude towards counterpart training is not uniquely Zambian. Several studies 3/ have pointed to similar problems in other countries. In those studies, the use of fellowships was also highly praised. It seems therefore highly desirable that training of local staff in projects similar to the one reviewed here, be organized in a different manner. First of all, the function of expert in an executive function and that of trainer would need to be split. Because of the usually large difference in knowledge between expert and trainee, training in a certain discipline appears to be much more important than training in a specific job at hand. On-the-job training of counterparts can never be a satisfactory substitute for university training. 6.08 For the project under review, it would have implied identifying the training requirements of Zambian personnel first, then sending them to the relevant university courses, to be supplemented by in-house seminars given by professional trainers to prepare them for typical Zambian job requirements, and only then attach them, for the final touches, to the foreign expert. The added attraction for the beneficiary of such training would be greater prestige and better career prospects. Follow-up of Studies 6.09 The medium- and short-term consultancies financed by the project have produced a number of useful studies, particularly those which led to subsequent projects. A number of other studies, however, have left no trace whatsoever. They were usually not project-related, and not started at the Government's initiative, but at the Bank's. Although it often proved difficult to trace the original idea behind them, one must assume that they were supposed to lead to some sort of advice that was considered useful at the time. 6.10 In Zambia, however, there is no satisfactory mechanism to ensure that the main conclusions and recommendations contained in reports and studies are brought to the attention of the decision makers. They usually end up on civil servants' desks, and, without further action by the initiator of the study, are then forgotten. It seems clear, therefore, that if the Bank expects serious results from the studies it undertakes itself or finances through TA projects, the preparation and follow through on such studies should be given the same level of attention as is bestowed on investment projects. Also, as is the case with projects, government uownership" and participation in the design of studies are prerequisites for successful results. 3/ See, for example, "Review of Training in Bank-Financed Projects", Report No. 3834, March 1, 1982, Operations Evaluation Department (OEP), or the relevant sections in OED's Annual Reviews.  - 13 - PART III. STATISTICAL INFORMATION  - 15 - ZAMBIA TECHNICAL ASSISTANCE REPORT (CREDIT 873-ZA) PROJECT COMPLETION REPORT BASIC DATA SHEET (USS million) Original Disbursed Cancelled Repaid Outstanding Credit 873-ZA 5.00 4.93 0.07 CUMULATIVE CREDIT DISBURSEMENS FY80 FY81 FY82 FY83 PY84 FY85 FY86 FY87 FY88 (I) Planned 0.3 1.6 3.1 4.6 5.0 5.0 5.0 5.0 5.0 (ii) Actual 0.0 0.4 0.6 1.0 2.1 3.4 4.2 4.8 4.9 (iii) (ii) as 0.0 2.5 19.0 22.0 42.0 68.0 84.0 97.0 99.0 , of (i) OTMER PROJECT DATA Identification November, 1977 Preparation/Appraisal April-October, 1978 Decision Memorandum n.a. Negotiations Novembez, 1978 Board Approval December 21, 1978 Credit Agreement Date January 26, 1979 Effectiveness July 12, 1979 Closing Date (Original) June 30, 1984 (Revised) June 30, 1986 Final Disbursement July 22, 1987  - 16 - MISSION DATA No. of No. of Staff Date of Month/Year Weeks Persons Weeks Report Preparation/Appraisal 5/78 2 2 4 12/70 Supervision I 7/81 1 1 1 10/81 Supervision II a/ 7/83 1 2 2 7/83 Completion Report 4/90 1.5 1 1.5 6/90 a/ There have been no formal supervision missions &fter July 1983. In May 1982, responsibility for supervision was assigned to the Bank's Resident Representative who monitored project implementation in a continuing, informal manner. ESTIMATED PROJECT COST (at ADPraisal) (USS million) Local Foreign Total 1. Long-term Experts 0.5 2.1 2.6 2. Medium- and Short-term Consultants' Services 0.3 2.3 2.6 3. Vehicles, Equipment, Training. Operating Expenses 0.1 0.2 0.3 4. Contingencies 0.1 0.4 0.5 1.0 5.0 6.0 ACTUAL DISBURSENENTS a/ (USS million) Total bJ (all foreign) 1. Long-term Experts 2.15 2. Medium- and Short-term Consultants Services 2.44 3. Vehicles, Equipment 0.11 4. Training 0.23 Total Disbursements 4.93 Cancelled 0.07 Total Credit 5.00 8/ Detailed information on sub-projects is presented in Annexes I, II and III. b/ No information is available on local cost expenditures.  - 17 - AN I Page 1 of 1 TECHNICAL ASSISTANCE PROJECT (CR 873-ZA) PROJECT COMPLETION REPORT Long-tqEr ExDerts Amount Dascriotion USS million 1. Project Evaluation ExDert in the National 0.16 Commission for Development Planning (NCDP), 1980-1983. Previously on a local contract elsewhere in the public sector in Zambia. 2. Project Evaluation ExRert in NCDP, 1980-83. 0.05 Previously on local contract in NCDP. 3. Project Evaluation Expert in NCDP, 1981-86. 0.10 4. Proiect Coordinator in the Ministry of Agriculture 0.13 and Water Development, (MAWD), 1982-1984. Previously on local contract in MAWD. 5. Resource Manasement and Investment Develogment 0.19 Coordinator (External Debt Administrator) in the Ministry of Finance, 1982-1984. Previously on local contract in the same ministry. 6. Financial Director of Zambia Industrial and Mining 0.29 Corporation, Ltd. (ZIMCO), 1982-1986. Previously on local contract in ZIMCO; contract extension financed under T.A. II. 7. Team Leader of the Project Preparation Unit in 0.34 NCDP, 1983-1986; contract extension financed under T.A. II. 8. Irrigation Economis'. in MAWD, 1983-1986; contract 0.30 extension financpd from bilateral source. 9. Agricultural Planning Expert in MAWD, 1983-1986. 0.24 Transferred to NCDP after contract expiration; new contract financed from bilateral source. 10. Economic and Financial A'visor in the Ministry of 0.21 Finance, 1984-1986; contract extension financed under T.A. II. 11. Technical Advisor to the Zambia Coffee Company, Ltd., 0.14 1984-1986. TOTAL Long-term Experts 2.15  18 - AM= It Page I of 2 ZAMBIA TECHNICAL ASSISTANCE PROJECT (CR 873-ZA) SUB-PROJECTS PROJECT COMPLETION REPORT Medium- and Short-term Consultants ServicesiStudies Amount Description USS million 1. Tobacco Sector Study for the Ministry of 0.26 Agriculture and Water Development (MAWD), 1980. Sector Study to develop sub-sector policies and investment opportunities. 2. Fuel Ethanol Proiect Feasibility Study for ZIMCO/INDECO, 0.12 1981. 3. Inland Fisheries Development Studs for MAWD, 1981. 0.24 Sub-sector review and project preparation. 4. Trucking Transoort Sector Study for the Ministry of 0.05 Transport and Power (MTP), 1983. S. Tazara Onerational and Staffing Study, for MTP and the 0.14 Tanzania Zambia Railway Authority, 1983. 6. Family Health Proiect for the Ministry of Health. 0.08 Study tour for public health officials. 7. Agricultural Research a.d Extension Study for MAWD, 0.46 1984. Devel'.aent of long-term plan and project preparation. 8. Forestry/Wood Processing Study for INDECO, 1985. 0.20 9. Education Reform Study for the Ministry of General 0.11 Education ant Culture. 10. Evaluation of MAWD, 1985. Mostly a review of the 0.28 ministry's planning functions. 11. Export Promotion Study (Revolving Fund) 1985. Part of 0.01 a larger, UNCTAD-sponsored study. 12. BudgetarX Reform for the Ministry of Finance. 1984/1985. 0.03 Consultants services for the implementation of recommendations contained in World Bank Economic and Sector Work.  ANNEX II -19 - Page 2 of 2 Amount Description USS million 13. Preparation of a Public Sector Investment Proaram, 1984. 0.18 For submission to the Consultative Group. 14. Preparation of the Technical Assistance II Project, for 0.13 the Ministry of Finance, 1984/85. 15. Joint Monitoring Committee, Development of a foreign 0.09 assistance monitoring system as requested by the Consultative Group. 1985. 16. Lukanpa Tobacco Project, 1986, Project Preparation for 0.06 NCDP and the Zambia State Insurance Corporation. TOTAL Medium- and Short-term 2.44 Consultants' Services  - 20 - ANNEX III Page 1 of 1 7 AB IA TECHNICAL ASSISTANCE PROJECT (CR 873-ZA) SUB-PROJECTS PROJECT COMPLETION REPORT Vehicles, Equipment and TraininR Amount Description US$ million Fellowships and Postgraduate Courses 0.23 Medium- and short-term training courses abroad for 19 different Zambian officials from NCDP, the Ministry of Finance, the Ministry of Health and the Management Service Board, 1983-1986. Vehicles and Equipment 0.11 TOTAL 0.34