Uganda - Second Technical Assistance Project

DCUmt of The World Bank FOR OMCAL USE ONLY 1oEw Nc. 12090 PROJECT COMPLETION REPORT UGANDA SECOMD TECIHNICAL ASSISTANCE PROJECT (CREDIT 1434-UG) JUNE 28, 1993 MICROGRAPHICS Report No: 12090 Type: PCR Public and Private Enterprise Division Eastern Africa Department Africa Regional Office Tbis document has a restricted distribution and may be sd by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CRENCY EQIVALENTS Currency Unit: Uganda Shillings (USh) US$1.00 USh 150 (First Window) US$1.00 = USh 280 (Second Window) USh 1.00 = US$0.0067 (First Window) USh 1.00 = US$0.0036 (Second Window) SDR 1.00 US$1.05928 (From October 1975 to My 1981, the Ugandan shilling was tied to the Special Drawing Right (SDR' oC the IMF (SDR 1.00 - USh 9.66). Hower, the Ugandan shilling was devaltued by 90% in June 1981 and has subsequently be n floating in relation to a basket of currendes. Since August 1982, the Bank of Uganda has opetated a dual exchange r.ute system, induding a second window at which foreign exchange traded mo freeely.) ABBREVIATIONS CFIC - Commnonwealth Fund for Technical Cooperation EDI - Economic Development Institute ESAMI - Eastern and Southern African Management Institute IDA - International Development Association IPA - Institute for Public Administration ISNAR - International Service for National Agricultural Research MPED - Ministry of Planning and Economic Development WPPT - Ministry of Power, Posts and Telecommunications OED - Operations Evaluation Department OPE - Office of Project Execution of UNDP PCR - Project Completion Report PEP - Public Enterprise Project UNDP - United Nations Development Program FISCAL YEAR July 1 - June 30  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Dltotor-Generel Operations EvaluaHon June 28, 1993 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Uganda - Second Technical Assistance Project (Credit 1434-UCG) Attached is the Project Completion Report on Uganda - Second Technical Assistance Project (Credit 1434-UG) prepared by the Africa Regional Office, with Part II contributed by the Borrower. rTe PCR is comprehensive, informative and insightful. The PCR tells the story of a project that was on the whole successful in achieving ambitious objectives under tlie difficult conditions of Uganda during the mid- and late-1980s. The project aimed at producing not only an array of project and policy studies but also at providing policy advice and at strengthening several core ministries and agencies the staff of which had been decimated by earlier political disruptions. The project design allowed project/task managers to exercise considerable flexibiity in adapting modalities and modus operandi to changing opportunities and constraints. The project got off to a slow start because it became effective at a time (April 1984) of unrest and strife. Fortunately, the government that came to power in 1986 was committed to making good use of project resources and subsequent implementation proceeded well on all fronts. The project is rated satisfactory overall, and the institutional developmental impact appears to have been substantiaL The benefits should be sustainable provided that civil service and related reforms permit the payment of salaries sufficient to retain a critical mass of qualified public servants. An important Bank contnbution was in the form of intensive supervision; the PCR argues persuasively that this was a necessary condition for making this kind of project (i.e. one with its built-in design flexibility) work well. The Borrower's comments state that 'the amount and type of supervision received [under this project]...will certainly be needed for the next few years if Government is to continue its strong dialogue with IDA and maintain the progress currently being made." The project may be audited because of the need to disseminate lessons of experience from successful TA projects in countries where absorptive capacity is very limited. Attachment This document has a restricted distribution and may be used by recipients only in the p-r.nmance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT UGANDA SECOND TECHNICAL ASSISTANCE PROJECT CREDIT 1434-UG Page No. PREFACE ............................................................ i EVALUATION SUMMARY .............................................. ii PART Ik PROJECT REVIEW FROM BANK'S PERSPECTIVE ................. 1 A. Project Identity ............................. 1 B. Introduction and Background ..................................... 1 C. Project Objectives and Description ................................. 2 D. Project Design and Organization ................... 3 E. Project Implementation ......................................... 3 F. Overall Performance and Institutional Development .................... 6 G. IDA Performance ............................ 7 H-. Summary and Conclusions ............................ 8 PART H: PROJECT REVIEW FROM THE BORROWER'S PERSPECIVE ....... 9 A. Background .................................................. 9 B. Implementation of the Project .................................... 9 C. Evaluation of the 2nd IDA Technical Assistance Project ................ 9 D. General Conclusion ........................................... 10 PART I: STATISTICAL INFORMATION ................................. 11 Related Bank Credits ............................................. 11 Project rimetable ............................................... 12 Credit Disbursements ............................................. 12 Project Implementation ........................................... 13 Project Costs and Financing ........................................ 17 Project Results ............... ................................... 18 Status of Covenants .............................................. 22 Use of Bank Resources ........................................... 23 This document ha a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  (i) PROJECT COMPLETION REPORT UGANDA SECOND TECHNICAL ASSISTANCE PROJECT CREDIT 1434-UG PREFACE This is the Project Completion Report (PCR) for the Second Technical Assistance Project (TAII), for which Credit 1434-UG in the amount of SDR 14.2 nillion was approved on April 28, 1984. The loan was closed on June 30, 1992, with complete disbursement. During the effectiveness period of the IDA credit a total of approxinately US$ 10 million was also made available through a UNDP project to provide assistance to the Mbinistry of Planning and Economic Developmew This UNDP project was executed by IDA under the same management as the IDA Credit. The PCR (Parts I and l) was prepared by the task manager, Mr.I. Knapp, of the Public and Private Enterprise Division; reviewed with the tbh,n Country Officer for Uganda, Ms.A Vaughn, and then commented upon by the Borrower, (Part II). Preparation of the PCR was started duiing the final supervision mission to close off all administrative matters for the Credit, in October 1992, and is based, inter alia, on the President's Report, the Credit Agreement, supervision reports, and sub project files.  (ii) PROJECT COMPLETION REPORT UGANDA SECOND TECHNICAL ASSISTANCE PROJECT CREDIT 1434- UG EVALUATION SUMMARY 1. The Second Technical Assistance project became effective (April 1984) at a time of renewed unrest and strife in Uganda and, as such, much of its momentun and usefulness as an immediate follow on to the First Technical Assistance Project was lost. However, the new Government that came to power in 1986 adopted the flexible design of the project and, within the same broad framework of objectives, set up a directed set of sub projects that were for the most part instrumental in establishing the lending and policy framework within which Government and IDA have inacted over the last six years. 2. The project relied extensively upon foreign expatriate assistance, and, for the most part, the quality and style of the recruited consultants was good, with very few problems being encountered. Many of the same consultants have moved on within the expanded lending program to take further assignments, thus maintaining an unusual amount of continuity and local expertise in the use and management of technical assistance fuids. This approach, while obviously open to criticism on the grounds of "perpetuating external dependency", has been very necessary as a result of the enormous loss of skilled Ugandan technicians and managers. Nevertheless, the use of long term resident experts has facilitated significant amounts of in-country and on-the-job training, at very economical costs and the benefits of this past training can now be seen in the emergence of many younrer Ugandan civil servants at the mid management levels in those institutions that received assistance. 3. The project also started the process of joint efforts of IDA and donors in focusing technical assistance within a common framework. With a strong and informed central Government ministry, the Ministry of Planning and Econonic Development (MPED), technical assistance was utilized efficiently in addressing many issues of economic policy, and in breaking through specific bottlenecks that confronted Government. Of particular importance in this joint effort at practical partnerships with the donors was the complementary UNDP project at the MPED. The integration of the UNDP funded experts within the friamework of IDA funded sub projects was of great assistance to Govermuent in ensuring maximum benefits, while also providing Government with independent analysis and support for their discussions with IDA.  (iii) 4. Many of the lessons learned from this project have already been incorporated into two major follow-on technical assistance projects. The modality of expatriate long term assistance to run major projects with senior counterparts has been widely extended and was used as a model for designing the management of a major piece of technica assistance now being undertaken by Government at the core Ministries. Also, the success of technical assistance in transferring skills, and building enduring capacities has been recognized as all too fragile, unless Government is willing to pay proper attention to the issues of wages/benefits, and basic equipment. In the case of the Ugandan Governent, this understanding is evident, and serious steps at Civil Service Reform with appropriate attention to wages/benefits are now beginning to emerge, supported by fuither IDA lending. 5. Perhaps the most .nportant lesson that has been drawn is that project design can never be a substitute for good leadership and conmnitment within Government, and that a commonly shared view of what needs to happen requires a considerable amount of face to face contact. In this sense, while the Second Technical Assistance Credit helped to start Government along a particular path and process, the methods employed placed an extremely heavy load upon supervision and required inputs that are not normally availble. ( While the fonnal tables show the recorded supervision, actual in- country supervision, in conjunction with TAM and the UNDP project, between 1988-1991 averaged six missions and approximately 20 weeks per year). As such, projects of this type should only be used in very particular circumstances, and should lead quickly, if at all possible, to a more normal operating approach for the design and delivery of technical assistance.  1 PROJECT COMPLETION REPORT UGANDA SECOND ElCHNICALL ASSLSTANCE PROJECT (CREIJT 1434-UG) PART 1. PROJECT REVIEW FROM THE BANK'S PERSPECTIVE A. Project Identitv Name : Second Technical Assistance Project (TA11) Credit Number :1434-UG RVP Unit : Africa Region Country : Uganda Sector : Public Sector B. Introduction and Background 1. At the time of project preparation, Governmenit's primary goal was to restore law and order as a basic prerequisite for futture economic progress. Second to this was a desire to provide a broad framework for the development of the economy during 1982/83 and 1983/84, as contained in the Recovery PtnrTam document released in April 1982. A basic req iement for implemenation of the Recovery Program was action to strengthen the administratve framework for implementing programs, for carrying them forward and malkng them more effective. The contemplated actions required that technical assistance be provided to Government in order to make up for the enormous loss of technical and managerial skills resulting from the exodus and loss of life during the conflicts of the 1970's. The Second Technical Assistance Credit was thus prepared and agreed as an immediate follow on to the First Technical Assistance Credit. The two Credits shared similar broad objectives in the areas of capacity building/substitute TA and preparatory studies for future policy and investment operations. Additionally, TAIR was designed to fund studies already identified under TAI and agreed with the (then) Government. 2. Government efforts to achieve recovery were being significantly frustrated by an administrative machinery that had been seriously affected by abuse and neglect between 1970- 1980. The civil service's internal situation was characterized by serious manpower constraints at the higher levels and expansion of staff numbers at lower ievels; financial constraints; low pay and morale; weak management and organizational problem; poor records and record keeping practices; and inadequate and dilapidated equipment. By any normal measures of efficiency and effectiveness one might have concluded that the Service did not function at all. All reports by IDA staff and other concerned donors deplored the situation and the use of technical assistance to alleviate the situation was a common reconunendation.  2 3. The Credit was presented to the Board in late 1983, and became effective in April 1984. Subsequent unrest in 1985 greatly affected the allocation and use of funds and it was not until the Government of President Museveni came to power in early 1986, and by 1987 established some levels of security, that the project was able to begin proper and full implementation. [For the historical background covering the major years of project implementation see OED Report # 8751, Program Performance Audit Report, First Technical Assistance Project (pages 39 -40)]. C. Pro3ect Objectives and Description 4. The stated objectives of the project were to: (a) strengthen the Government's economic decision making, planning, project preparation and impiementation capabilities through external assistance, and (b) transfer skills to Ugandans through training 5. To achieve these objectives the credit of 14.2 million SDR's (equivalent to US$15 million) was to finance high priority activities (ie "sub projects"), selected in agreement between Govemment and IDA. Project design was flexible to allow for identification and agreement of specific sub projects throughout the first two years of the credit life. The sub projects would have to be consistent with the Revised Recovery Program for 1983-1985, and as a matter of priority were to be concenated on: (i) the Ministries of Finance, Planning and Economic Development, and Public Service and Cabinet Affairs, to improve their capacities to manage the economy; (ii) sector ministries to strengthen their planning and project capabilities, and (iii) the Institute of Public Administration to enhance its ability to provide training in Uganda. 6. At the time of presentation to the Board a number of sub projects had been fully agreed between Government and IDA, costed at approximately US$4 million, and other projects costed at approximately US$6 million were in advanced stages of preparation. The credit also contained a feature that required all commitments to be made within two years,( by December 31 1985), with all expenditures to be completed within a further two and a half years. (This requirement was later removed). 7. As in the case of the First Technical Assistance Credit the project was administered by the Ministry of Planning and Economic Development (MPED), utilizing the services of a senior economist as the project administrator, who was to be assisted by an expatriate advisor. Sub project proposals were to be prepared by Government Ministries, parastatals or other agencies, with the  3 assistance of consultants if necessary, and presented to a Review Committee, comprisLng the Pennanent Secretary of MPED, Secretary to the Treasury and other officials of MPED, MOF and line ministries. All agreed sub projects were then to be submitted to IDA for approval and allocation of funds. Approved sub projects were to be implemented by the proposing agency, with MPED providing IDA with progress reports. D. Project Desian and Organization 8. The project brief was distributed on February 24, 1983, and the project was appraised in April 1983. As this was a technical assistance project, no Staff Appraisal was issued, and the project went to the Board as a President's Report, on December 22 1983, with effectiveness being declared on April 28 1984. The project followed on immediately from the first technical assistance project (evaluated by OED in Report #8751, referenced above), with the broad objectives of providing further funding for needed studies and preparation work already identified, and further assisting Govermnent in strengthening core agencies associated with the development and implementation of economic policy, through the conduct of studies and training of Ugandans. 9. The design of the project also foresaw and thus included arrangements for the receipt of various study and sub project preparation proposals by the planning ministry frnm across a wide range of organizations and sectors. (In terms of actual implementation the range of organizations involved became more focused under a new Government, from 1986 onward). The design also recognized the assistance provided from UNDP (which was extended on three occasions during the credit disbusement period), to the implementing agency, and intended that improvements being made in parallel through this assistance should have an interactive effect on the selection of sub projects and the Tnanagement of their implementation. E. Project Implementation 10. With the internal difficulties experienced during late 1984 and 1985, new sub project preparation was reduced to almost nil, and by late 1985 there were still uncompleted sub projects under Technical Assistance I, and only US$ 2 million (cumulatively) had been disbursed under Technical Assistance IH. (See Table 3, Part III). During 1986, the pace of imnplementation began to pick up, particularly in the area of sub project preparation, and with the resumption of supervision missions for the credit in early 1987, tied with the beginning of a policy dialogue with the new Government, implementation then began in a more serious and integrated manner. 11. Under the new Govermment and the direct leadership of a new Permanent Secretary in the Ministry of Planning and Economic Development, the overall objectives for the Credit were retained, but a large part of the Credit proceeds became more narrowly focused than had been envisaged at the time of Credit design. In the area of project preparation, the six ongoing contracts were concluded by 1988, but no new ones were initiated and the value of these studies to later policy considerations and/ or lending is questionable; under studies. ten were completed, of which three were of sufficient importance and impact - the household budget survey, the agricultural task forces and the information systems study - that they received significant follow up (under the Third Technical Assistance Project, and the Economic and Financial Management Project, which came into operation in mid 1988 and mid 1992 respectively). Trining, which received less attention in total  4 than had been originally planned, alto received significantly less funding for individuals, with more attention being applied to groups of people in specialist areas, eg accounting, organizational specialists. Training also became more important within the sub project structures set up to implement improvements and changes within the administrative structures at the center of Government, e.g.within the Ministry of Civil Service and Cabinet Affairs. In total, credit administration and management became more concerned with technical assistance implementation and addressing more directly the immediate concerns and bottlenecks within the Ministry of Finance, the Ministry of Planning and Economic Development, the Ministry of Industry, the Ministry of Public Service and Cabinet Affairs, and the Agricultural Sector. (Table 4 in Part III provides a complete listing of all such projects, numbering 30 in total). The major technical assistance sub projects under each of these ministries and sector(s) are briefly described below. Minisby of Finance 12. The ministry received assistance valued at approximately US$ 2.7 million, covering 9 sub projects. The most important of these were TA-7 and 24; TA-17; and 3-TA-7. TA7 and 24 provided Government with the services of a qualified accountant, who during the time in country, (almost 6 years), was called upon to act as the Commissioner for Treasury some five times, upon the dismissal/removal of the incumbent nationals. Though the original objective for this assistance, (improvements in accounting practices and standards), remained largely unmet under TAI, there is little doubt that the presence of an independent expatriate advisor capable of immediately stepping into the line management role provided significant assistance to Government in its attempts to curb various excesses within budgetary expenditures. The advisor also played a major role in the organization and implementation of the accountancy training, funded under 3-TA-7; (results of this training are shown in Table 6, Part m). The other major initiative funded for the ministry was TA-17 which involved a complete assessment of Govermment systems concerned with the tracking of financial transactions. This assemet became the basis of the design now being implemented under the Economic and Financial Maagement Project (EFMP). Ministry of Planmin= and Economic Develorment 13. The ministry received assistance of approximately US$2.4 million for some 7 sub projects, the most important of which concerned the Statisdts Department, (1-ST-2 and 6; and 1-TA- 12 and 23). [IDA assistnce to the central departments of thb ministry was unnecessary as UNDP assistance was provided, which was executed by the Bank, and managed by the IDA TAII task managerl. The two major areas of work - rehabilitation of the statistics department and the conduct of the household budget study - were further supported under TAIl and the EFMP, (Statistics only). The results of the household udget survey, (which was completed under further assistance from TAI), have been widely accepted by Bank staff working on Uganda, and Ugandan planners as a very competent and professional product, while the Statistics Department itself is now thought to be one of the better departments of its kind in Africa, (according to consultants from donor agencies), that is capable of a wide range of data collection and analysis as an underpinning for economic Plnig.  5 Minstr of Indust 14. The minitry received approximately US$ 2.0 million in assistance. from 5 sub projects. TA-8 and TA-14 dealt with strengthening the various functions of the riinistry and assisting with the preparation of sub sector reports and policy options. This work was of significant input towards tue design of a new IDA credit - the Public Enterprise Project (PEP), which went to the Board in November 1988 (Credit 1962-UG). Funding also facilitated later studies on the role and structure of the Ministry (in 1989), that were instrumental in designing the merger of Industry and Commerce (1991). Other assistance was also utilized to start up the PEP, by funding key exptriate assistance, without the need for a project preparation facility. [ The PEP in turn prepared the way for a detailed divestiture plan, and the beginning of the privatization processes across all sectors, which is now supported by the Enterprise Development Project, (Credit 2315-UG)J. Ministry of Public Service and Cabinet Affairs. 15. The ministry received approximately US$6.9 million for four major sub projects, all directly concerned with strengthening internal capabilities and preparing/implementing various initial steps towards a more comprehensive program of civil service reform. The largest sub project - 1-TA- 6 achieved a number of improvements within the ministry, particularly through the training program organized with assistance from RIPA (UK), and carried out at the Institute of Public Administration in Kampala. Also, a series of courses were held that began the process of sensitizing Pennanent Secretaries from aU sectors across Government to the need for improvements from their staffs. However, on balance this assistance was not considered to be as successful as it might have been, given the level of expenditures and in 1989 Government decided to close out the existing implemening arrangement, change the Chief Technical Advisor, and redirect its efforts towards more general aspects of civil service reform, including studies of the structure and roles of ministries; operation and efficiency of the payroll system and its links to appointments/promotions; and a census of civil servants, part time workers and teachers. These activities continued to receive funding under the follow on credit, TAll, that resulted in a mnmber of documented changes, including (V) the removal of some 20,000 ghosts from the payroll;(ii) a more than fifty percent reduction in part dme employees; (iii) a reduction in Ministries from forty four to the current number of nineteen, and (iv) the completion of the most accurate census to date on Government employees. Agricultural Sector 16. A number of different organizations within the sector received assistance of approximately US$ 1.4 million for 7 sub projects. Major emphasis was placed in two areas: (i) a sub project implemented by the International Service for National Agricultural Research (ISNAR), oriented to studying and improving agricultural research, and (ii) assistance to the Agricultural Task Forces who considered a wide range of agricultural rolicy issues. The latter area was further financed under TAIII. (OED Report #8751 identified the performance of the Agricultural Task Forces as one of the major achievements under TAI ). The outputs of the various task forces have been utilized by Government and IDA to reformulate policy in the Agricultural sector, which was then supported by a  6 major IDA policy based operation in 1990 - the Agricultural Sector Adjustment Credit (Credit 2190- UG, presented to the Board on December 13, 1990). F. Overall Performance and Institutional Development 17. The performance under the Second Technical Assistance Credit has been, in the main, satisfactory. The Credit was successful in assisting Government to lay the ground for a wide range of IDA (and donor) funded investment and policy based operations. It also started a trend, continued under TAIII (since 1988), of utilizing technical assistance in a flexible manner, whereby an expatriate advisor was directly teamed with a civil service counterpart in a senior management position eg. commissioner; deputy permanent secretary, and together the details of a sub project were worked out, within the general framework and overall budget previously agreed between IDA and Government. These sub projects were then heavily monitored and supervised by IDA, with assistance from the central ministry responsible for the credit, and inputs of IDA sector specialists to the credit task manager. 18. The results achieved clearly demonstrate the benefits that can accrue through technical assistance if there is a strong focal point within Government, (in this case the Ministry of Planning and Economic Development) that is also closely tied to. and has a major input into the major initiatives within the macro-economic Rolicy area. However, it should also be noted that given the need for speed in tackling the many institutional and policy problems that beset the Government between 1986-1991, the proper and fully required administrative procedures within Govermnent were not strictly followed. While all sub- projects submitted by Government came from the Permanent Secretary, MPED, in writing, and if appropriate were accepted in writing by the IDA task manager, many were not formally discussed by the required project sub committee, and the updating of interested goverment officials owed more to the missions and aide memoires than to outward communication from the ministry. The lessons of more recent experience with technical assistance and its relationship to internal differences within Government suggest that an added degree of caution and review needs to be exercised in the administration of technical assistance, to ensure complete transparency and consensus among all agencies, on whose collaboration the long term success of TA depends. 19. In terms of building institutional capacities, many of the sub projects achieved significant improvements in the skill levels, procedural approaches, and general operating efficiencies of respective organizations and units. However, it also became clear during the implementaion that such improvements would not be sustained once the sub projects ceased and needed financing for "salary top ups", equipment and training were no longer available.l/ 1/ In Uganda there is now a Government/Donor overall agreement on the level and manner in which "top-ups" are paid to Government staff. This level is also monitored within the efforts of Government to reform its pay and benefits approach, as part of the agreed Civil Service Reform Program.  7 G. MA Performance 20. This Credit continued the practice developed under the First Technical Assistance Credit of utilizing a flexible administrative machinery for the allocation of funds, as opposed to allocating all the credit proceeds to sub projects at the time of design. This approach was entirely appropriate, given the internal difficulties of the times, and avoided the possible requirement for a formal redesign of the project. However, the built in design flexibility, while extremely benefit to Govermnent, necessitated significant supervision effort on the part of IDA staff, and would not ikave worked successfully without resources provided from other sources, e.g. UNDP, that allowed "extra" and more frequent supervision missions. The results also benefitted from the very close integration of the country team around an evolving policy dialogue that was for the most part conducted with the Permanent Secretary of MPED, as the focal point. 21. Also, and importantly, the results eventually achieved were greatly reinforced by a strong continuity of personnel, and interlocking structures that greatly facilitated policy and implementation aspects. On Government's side, the same team of Pennanent Secretaries involved in the use of proceeds from this Credit were also involved in the design and implementation of the two follow on Credits, which utilized many of the outputs and experiences from TAII. On IDA's side, management of this Credit was passed from the Country Officer to a Public Sector Management Specialist, who in 1989 was transferred to the controlling Country Operations Division, and was then involved in supervision of TAIL and design of the EFMP. This continuity allowed for significantly enhanced comnon understandings of practical difficulties in implementing technical assistance, and very open and straightforward communication between Government and IDA staffs. In turn, this resulted in the ability to utilize assistance very rapidly, without long delays and difficulties that can be associated with such issues as procurement, contract awards, terms of reference, access to appropriate conuting expertise, etc. The third aspect involving continuity and evolving expertise in the use of technical assistance concerns a core group of expatriate advisors, recruited under this project, and retained under the follow on TAHI Credit. While there were obvious risks of perpetuating "external expertise dependency", the lack of in country expertise mandated that outside experts be used. A deliberate decision was taken by Government and IDA staffs that long term resident experts, teamed with appropriately selected senior staff, and supported by contracted local staff was the most efficient way to ensure that problems were tackled quickly and effectively. This approach was also felt to provide the best environment for providing training, as opposed to merely putting people through classroom courses. The success of this approach is evident when looking at any number of departments within the core organizations, where many civil servants first recruited to work on TAII sub projects now hold significant positions. 22. A further and extremely important element in IDA's performance involves key donors, in particular UNDP, ODA and USAID. It is estimated that between 1986 and 1992 the Government of Uganda received approximately US$50 million from these donors and ID.A for technical assistance. While such assistance has covered every sector, by far the most funding has been expended around "core" Government ministries and associated economic policy and implementation. The IDA Credit was the initial vehicle for providing a focal point, (MPED) and a general framework for much of this expenditure. The relationship started between all parties during the major years of IDA's funds commitment and implementation (1987-1990), was extended under TAM and resulted in  8 very significant parallel financing for activities within the EFMP framework. Without the very close cooperation that has evolved the impact of technical assistance would have been greatly impaired, as would IDA's performance. H. Sunmarv and Conclusions 23. The Second Technical Assistance Credit met the stated general objectives of strengthening the capacities of core agencies and of transferring skills through training. However, in retrospect, and based on the need for and results from further technical assistance projects, the expectations for strengthening of capacities were probably too optimistic, and failed to take account or tackle all the dimensions involved in capacity building. Of particular difficulty to Government was the issue of sustainability and most importantly the payment of appropriate salaries that helped ensure continued attendance of better skilled staff in the work areas where they had been trained. The outcomes were also reduced by the continued internal unrest over the first three years of the credit effectiveness, and by the difficult economic perod that Uganda then entered. 24. On the positive side, this Credit spearheaded a new start of assisting and developing a policy dialogue, and taclding major areas of economic difficulty, that was then further extended under Technical Assistance m. A review of the lending program for Uganda over the last four years (1988- 1992), shows that both for institutional actions and project preparation in the industrial sector, the agricultural sector, the bankdng sector, within the area of civil service reform, and across a broad range of policy areas, eg debt reduction; trade and tariff regimes; exchange rate etc all owe something to work initiated under this Credit. While the Credit was not specifically designed with this objective, and could not in any event have foreseen the difficulties the country had to face due to internal conflict, the flexibility in design, allied to the development of close relationships between operational saff and key Government officials provided the opportunity for the use of such an approach. 25. In conclusion, the Credit was instrumental in laying a strong foundation for the development of sound policy options and their implementation, while at the same time helping to increase the needed relationships and understandings between a new Government and IIDA.  9 PART II PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE A. Background 1. The need for technical assistance cannot be over-emphasized in Uganda, particularly in the early 1980's, after the loss of much of Uganda's skilled and trained manpower in the 1970's. This was an agreed fact both when IDA extended the first technical assistance credit in 1980 and the second technical assistance credit in 1984. 2. The situation in the administrative machinery/Civil Service until 1984 was still characterized by manpower constraints in the higher levels and an expansion in the lower levels, financial constraints, low pay and low staff morale, weak management and organizational problems, poor records and data systems, inadequate training and broken down equipment etc. All evidence deplored the effects of the above outlined situation and reiterated the critical shortage of trained and competent manpower. The conmmon theme was the recommendation to alleviate the difficulties which faced Uganda's economy by providing technical assistance and training. 3. Following discussions between IDA missions and Government, IDA agreed to extend a second TA of SDR 14.2 million, in March 1984, for a project whose objectives were to:- (a) strengthen the Governments decision making, planning, project preparation and implementation capabilities through external assistance and (b) transfer skills to Ugandans through training. To achieve these objectives, the project would finance expertise provided by expatriate advisers or consulting firms, training and equipment. B. Imglementation of the Proiect 4. This second IDA TA project was appraised by IDA in April 1983 and negotiations were held in November 1983 in Washington D.C. A Development Credit Agreement was signed on March 8, 1984. After a slow start due to the political events which characterized much of 1984 and 1985 in Uganda, the project implementation was accelerated during 1986, 1987 and 1988. Towards the end of 1988, IDA did in fact extend a third TA Credit to Government, as almost all of the Second IDA TA had been committed on various sub-projects of high priority, selected by agreement between IDA and Government and consistent with the Government's revised Recovery Program. C. Evaluation of the 2nd IDA Technical Assistance Proiect 5. The then MPED was responsible for the implementation of TA 11. This was agreed based on the fact that the Ministry's weaknesses had been addressed under the second Restructuring Program and with renewed efforts to implement the UNDP-flnanced Planning Assistance Project, its capacity  10 to administer the second project would be greatly enhanced. This prediction, in the Government's view , proved correct. 6. As of November 3, 1987, about US$13.0 million had been formally committed on thirty-one (31) sub-projects and only about US$ 2.0 million remained uncommitted. However, it had already been proposed by Government at this particular date that US$ 635,000 would be used for the Public industrial Enterprises Secretariat, US$ 200,000 for the rehabilitation and implementation of a computerized Financial System in the Treasury and US$55,000 for the Directorate of Supplies and the Central Tender Board. Therefore, only about US$1,000,000 remained uncommitted. This is not to say, however, that the project was not implemented without frequent problems/difficulties. A frequent difficulty was that after a long processing period, sub-projects were delayed in their implementation or were withdrawn altogether, (e.g. because candidates for technical assistance positions declined at the last minute, or could not be found in the first place). This was mainly due to the security situation existing in the country. Examples of such sub-projects were:- (a) The Household Budget Survey, - (first phase) (b) The Small Scale Industry Advisor in UCB and (c) The Rural Credit Scheme in the BOU These problems gave rise to the disbursement lags that occurred during the implementation of the project. 7. Another difficulty related to the maintenance of a consolidated project account of all expenditures financed out of the proceeds of the TA II credit. The Treasury (then under MOP) continued to effect payments without the knowledge of the then MPED. Although such payments were always duly in order, the MPED still found it could not adequately monitor and record expenditures in a timely fashion resulting, in the lack of expenditure records and therefore lack of accounting records and lack of the anmnal audits, which was a mandatory requirement of the DCA. D. General Conclusion 8. From the borrower's perspective TAII was a very useful vehicle that enabled specific actions to be undertaken that laid the basis for a strengthened dialogue with IDA, particularly concerning macroeconomic issues. While it is true that this credit received significant in-country supervision, that was facilitated by IDA's need to supervise UNDP projects in the same central ministry, it should be noted by IDA management that this level of supervision and the particular type of interactive and close supervision was extremely beneficial to Government's efforts to move the macroeconomic reform program along a new path. The amount and type of supervision received, which was then continued under the following credit TA III, will certainly be needed for the next few years if Government is to continue its strong dialogue with IDA and maintain the progress currently being made.  11 PROJECT COMPLETION REPORT UGANDA SECOND TECHNCAL ASSISTANCE PROJECT (CR.1434-UG) PART 1I. STATISTICAL INORMATION Table 1. Related Bank Loans / Credits Loan/Credit Title Purpose Year of Status l________________ _ lApproval The First Technical Assistance Assist GOU in preparing 1980 Completed in Project (Cr. 1077-UG; US$ development and rehabilitaton 1985. 8.0 million) projects for financing by IDA and other donors. 'The Third Technical Rehabilitation of the 1988 On going and will Assistance Project (Cr.1951- Government's essential be completed in UG; US$ 18.0 million) administrative and management 1995. functions in key economic l _______________ ministries. _ _l Economic and Financial Build greater institutional 1992 Will be Management Project capacity in key government completed in (Cr.2180-UG; US$ 29.0 organizations. 1999. million) The Second Reconstruction Support GOU's Recovery 1982 Completed in Program (Cr.1252-UG; US$ Program of 1982. 1985. 70.0 million) l The Third Reconstruction Consolidate the economic gains 1984 Completed in Program (Cr. 1474-UG; US$ and the policy reforms 1987. 50.0 million) achieved under Reconstruction I and 11. Public Enterprise Project (Cr. Assit GOU in preparing 1988 Ongoing, has led 1962-UG; US$ 50.0 million) detailed sector plans for to the Enterprise finance and industry Development I______I_____ I__ Project.  12 Table 2. Proiect Timetle Item Date Planned Date Revised Date Actual Identification 02/1983 02/1983 Preparation 32/1983 02/1983 Appraisal 04/1983 04/1983 Negotiation 11/1983 11/1983 Board Approval 07/1983 12/1983 12/22/1983 Credit Signature 03/84 03/08/1984 Effectiveness 0311984 04/27/1984 Credit Closing 06/30/1988 06/30/1989 06/30/1992 06/30/1990 06/30/1991 ____________________________ i _________________ 06/30/1992 Credit Comletion 12/31/1987 12/31/1988 06/30/1992 Table 3. Credit Disbursement (US$ million) IDA Fiscal Year Appraisal Estimate Actual Actual as % of Annual Cumulative Annual Cumulative Appraisal Estimate 1984 0.2 0.2 0.1 0.1 1 1985 2.5 2.7 1.9 2.0 13 1986 5.3 8.0 1.8 3.8 25 1987 4.5 12.5 4.1 7.9 53 1988 2.5 15.0 4.6 12.5 83 1989 n.a. 2.9 15.4 103 1990 n.a. 2.6 18.0 120 1991 n.a. 0.6 18.6 124 1992 n.a. 0.2 18.8 125  13 Table 4. Project Lmplementation* Approved Sub-Projects Amount Status Disbursed(US$) A. Technical Assistance Proiects: I-TA-1 Tech. Asst. for Ministry of Public Service and 325,977 Completed in 1988. Cabinet Affairs 1-TA-2 Petroleum Exploration and Promotion 165,716 Completed in 1986. I-TA-3 Agricultural Development Project 168,531 Abandoned. 1-TA-4 Bank of Uganda: Rural Credit 311,311 Abandoned. 1-TA-6 Public Service Improvement Program 4,203,868 Contract was signed with DTCD in 1986. Work was finished in 1990. 1-TA-7 Mr. Siriwardena 225,000 Continued under TA Ill. 1-TA-8 Ministry of Industty: Planning Dept. 1,051,081 Proposals for functions and stuctmre was completed in 1988. 1-TA-9 Bank of Uganda: Computes 52,447 Computers were purchased in 1987. 1-TA-10 Uganda Commercial Bank Consultancy 20,000 Consulting contract was signed in 1987. 1-TA-il (Gov/IDA records missing 150,117 1-TA-12 Statistics Dept. Rehabilitation 1,006,381 Continued under TA m. 1-TA-13 Uganda Commarcial Bank Consultancy 27,716 Consultant was selected in 1988. 1-TA-14 Industrial Enterprise Secretariat 624,429 Contract was signed with UNIDO in 1987. Project continued under TA Im. sub-project was not specifid i Me r siden Report.  14 Table 4. (Continued) Approved Sub-Projects Amount Status Disbursed (US$) I-TA-IS Procurmet Advisory Services 83,231 1-TA-17 Price Wathouse 542,939 Completed in 1991. 1-TA-18 Justin Zake 18,100 Completed in 1991. 1-TA-21 Hadjicostas Procurement Contract 84,712 Completed in 1990. 1-TA-22 Jackson Contract 134,302 Completed in 1990 I-TA-23 Statistics Rehabilitation 230,463 Completed in 1987. 1-TA-24 Treasury Accounts 520,654 Continuation of I-TA-7. I-TA-26 Relocation of Sentongo 11,578 Completed in 1990 1-TA-27 Preparation of Uganda Airlines Accounts 106,761 Completed in 1990. 1-TA-28 ADC &ADD Advisor 168,321 Completed in 1991. 1-TA-29 Preparation of Coffee Subsector Budget & 160,231 Preliminary Monitoring assessment was satisctory. 1-TA-30 ISNAR Agricultunl Research 453,943 Completed in 1991. 1-TA-31 Rehabilitation of Lanid Registry 37,499 Completed in 1990. 1-TA-33 Auditng of TA U Accounts 72,169 Completed in 1992. 1-TA-35 Civil Service Reform 1,313,500 Preparation completed in 1991. Follow on from 1-TA-6. 1-TA-38 Tumwebaze 900 Completed in 1991 I-TA-89 KPMG Contract 138,225 Completed in 1992.  15 Table 4. (Continued) Approved Sub-Projects Amount Status Approved (US$) B. Project Preparations I-PP-1 Kakira Sugar Works: Re-evaluation 30,000 Subsidiary Loan Agreement was concluded in 1988. 1-PP-2 Ministry of Health: Tech. Asst. 688,170 Consulting contract was signed in 1986. 1-PP-3 Road Studies 108,240 Completed in 1986. 1-PP-4 Joint Audit Services 40,978 Completed in 1988. 1-PP-5 Pre-Contract Services: KLA Jinja Road 71,619 Abandoned. 1-PP-6 Factory Rehabilitation: KSW Engineering 361,382 Consultancy contract was signed in 1987. C. Studies 1-ST-1 Transport Manpower 289,410 Final Report: Summary & Action Plan was completed in 1986. 1-ST-2 Household Budget Survey 343,645 Completed in 1989. 1-ST-3 Parastatal Accounting Study 849,229 Final report was completed in 1986. 1-ST-4 Agricultural Task Force 575,202 Completed in 1990. 1-ST-5 UEB Organizational Training 163,849 Completed in 1990. 1-ST-6 Household Budget Survey 692,996 Follow on from ST-2. Completed in 1990. 1-TA-16 Coffee Hulling Study 90,072 Completed in 1989. I-TA-19 Land Tenure Study 30,879 Completed in 1991. 1-TA-20 Tax Study 35,802 Completed in 1989. 1-TA-25 Budget Reform Study 47,854 Continued under TA III.  16 Table 4. (Continued) Approved Sub-Projects Amount Status Disbursed (US$) D. ItniM n 3-TR-CI Training 42,786 3-TR-1 Individual Training 17,992 Completed in 1986. 3-TR-3 Individual Training 40,000 Completed in 1986. 3-TR-4 Onyach-Olaa 8,000 Completed in 1986. 3-TR-5 Bradford Projec planning 10,154 Completed in 1986. 3-TR-7 Diploma Course in Accounting 1,276,536 Accountancy traning agreement was signed in 1987. 137 trinees received diploma at completion. completed in 1989. 3-TR-8 Kasunsole Mukongo 20,571 Completed in 1989. 3-TR-10 Disbursement Seminar 3,350 Completed in 1989. 3-TR-1l Fred Kabunga 2,139  17 Table 5. Project Costs and Financing A. Proiect Costs (US$ mnillion) Project Component Appraisal Estimate Actual Total Local Foreign Total Technical Assistance 1.6 8.8 10.4 17.3 Training 0.3 3.2 3.5 1.4 Vehicles and 0.2 3.0 3.2 0.1 Support Equipment Total 2.1 15.0 17.1 18.8 B. Project Financina (US$ million) Sources Planned Actual IDA 1. Consultants' services 7.5 17.3 2. Equipment and vehicles 3.0 0.1 3. Training 3.2 1.4 4. Unallocated 1.3 Total 15.0 18.8 GOU 2.1 0 * Total 17.1 18.8 * GOU counterpart assistance was provided in kind, rather than fund. No counterpart project fund was established.  18 Table 6. Proiect Results A. DlirtBeefits Indicators Appraisal Actl Estimate No. of Approved Sub-Proiects ( by category) 1. Project Preparations 6 2. Studies n.a. 10 3. Training 9 4. TA Projects 30 Total 55 Traininu No. of accountants completed ordinary n.a. diploma 76 No. of accountants completed advanced 61 diploma No. of persons trained overseas 7 Total 144 Imrovement of GOU's Manauement Capacitv Financial management yes yes Policy formulation yes yes Public adminisuation yes yes Project preparadon yes yes B. Economic lmpact Underlying Assumptions Appraisal Estimate Actual ERR n.a. n.a.  19 C. Studies Studies Puipose Status Impact Transport Sector Completed in No information Manpower and Training 1986 available. Survey Road Studies Lay basis for rehabilitation Completed in Major roads were priorities. 1986 constructed in 1987 onwards. Household Budget Survey Lay a base for improving Completed in Study was utilized statistical analysis including 1990. across social sectors expeditures and social service and very well usage. received. Organization, Training and Increase management skills in Completed in Negligible. Program Manpower Study (Power) UEB. 1990. was poorly managed. Agricultural Task Forces Assist in policy formulation for Completed in Provided basis for sectors in agriculture. 1990. govermment plans and IDA lending programs. Parastatal Accounting Assist in up-dating the Completed in The impact of the Study financial statements, identify 1986. study was doubtful policy issues and provide because of the recommendations. changed Coffee Hulling Study Assess status of hulling Completed in Utilized as part of operations in the country 1989 discussions for liberalizing the agricultural sector. Land Tenure Study Assess past studies and issues Completed in Being used as part of of title 1991. ongoing discussions for clarification of future policy. Tax Study Assess correct tax base, Completed in Used in part for collection difficulties 1989. creation of URA. l Budget Reform Study Initial assessment of budgeting Completed in Used as a large input problems. 1989 and for 1991 PER and continued under budget component TA Ill. under EFMP.  20 D.Maior T.A.Contracts : General Performance 1 .Price Waterhouse: ($534,000) Price Waterhouse won an internationally competitive bid to assess the computer and information needs for the Ministry of Finance, in relation to Government's financial transactions. The contract suffered from a number of difficulties during its execution; (i) in retrospect, the original TOR was not well defined, and while the overall objectives were well understood, the level of detail required in order for the study work to be "projectised" at a later date were vastly underestimated; (ii) Govermnent did not have a strong cadre of senior managers sufficiently knowledgeable in computers and the management of fiancial information to be able to give indepth direction to the consultants as the study progressed, and uncovered the possible need for further work, and extensions; (iii) IDA's supervision of the contract,( which in light of (ii) above should have been very strong) was constrained by a lack of appropriate resources with technical knowledge in the subject area. The result of these difficulties was that the initial draft report could not be accepted by Government and IDA, as it failed to take account of many important factors that would affect implementation of new systems. However, the redrafted report, which involved significant additional effort by the consultants, and strong liaison with IDA, was accepted by Government and became the underpinning for the computer information and strengthening component within the Economic and Financial Management Project. 2.UNDP Office of Project Services (OPS): ($ approx. 4.6 million) UNDP OPS took over the contract for assistance to the Ministry of Public Service and Cabinet Affairs from another UN agency, who Government felt were unresponsive to the need for speed, particularly in regard to procurement matters. They also managed the contract for assistance to the Statistics Department, the Household Budget Survey and the Treasury. The relationship that was developed between Government, OPS and IDA has been extremely satisfactory. The flexibility of the modalities offered by OPS was utilized on a case by case basis to meet different needs at different stages of sub project design. Moreover, the quickness of response, the ease of organizing joint missions, and the cost elements of their work all assisted in the achievement of results. Under the follow on Credits, TA 111, and EFMP, Government has extended furither contracts in recognition of their performance. 3. Royal Institute of Public Administration (RIPA): ($ approx. 1.2 million) The RIPA contract was executed in parallel to the assistance being provided to the Ministry of Public Service and Cabinet Affairs, in that the contract was to strengthen the Institute of Public Administration in Kampala, which is the main training organization for civil servants. The initial design for the contract was flawed in one major respect- it failed to recognize the financial state of the local institute, and the extremely low levels of equipment, pay and general working conditions. While RIPA fielded personnel as requested, and followed up closely on their performance, the project setting made it almost impossible for their efforts to meet with the desired success, and today little of their efforts is visible.  21 4.United Nations Industrial Development Organization (UNIDO): ($ 625,000) UNIDO was awarded a contract to strengthen the Ministry of Industry, with particular attention to both internal organizational requirements and the need for sub sector studies. The contract was performed satisfactorily, in that the stated o'itputs were completed, and at a later stage work undertaken was used in the eventual design of the reorganization of the Ministry, in its merger with Commerce, and sub sector studies assisted in preparing the way for the design of the IDA Public Enterprise Project. Difficulties did arise between Government, UNIDO and IDA in the preparation of this latter project, due to the different understandings over the modalities and for contracting with UNIDO under the provisions applying to execution of Bank-funded projects. (These difficulties have since been resolved to the satisfaction of all concerned). 5. Chartered Institute of Public Finance and Accounting (CIPFA) Training Center. ($1,275,000) CIPFA was awarded a contract to provide training to local accounts personnel. Again, the original contract did not recognize the difficulties of the local environment, and particularly Government's difficulties in meeting agreed local cost contributions. The program took much longer to run than was originally foreseen, and suffered from a lack of study continuity. However, positive results were achieved, with 137 people obtaining diplomas and certifications, albeit at a rather high cost per completion of around US$1000 per individual. Despite the difficulties the contractor lived up to its contract and mainained close relationships with IDA and Government in an attempt to complete all the needed training for -students". Key Lessons: Discussions at the time of supervision with all the above groups on the performance under their various contracts showed one marked similarity - no one was really prepared for the environment in which the contract was to be executed and original TOR's failed to take this into account when costing the need for "support" to the contracts awarded eg. equipment, salary supplements for local staff whose input was vital in achieving results, and the lack of depth of Government to discuss and find ways out of difficulties. Resolution of these problems was facilitated by frequent supervision missions and follow up, and from approximately 1988 onward appropriate steps were taken with the design and costing of sub projects to ensure that these difficulties would be minimized.  22 Table 7. Status of Covenants Covenant Compliance Status 3.01 Borrower's commitment to we objectives of the Compliance. project. 3.02(a) Submit detailed sub-project proposals to Compliance. MPED. 3.02(c) Maintain within MPED the Review Committee The Review Committee was formed in 1984 to approve sub projects. but was not really functioning. However, all sub-projects were approved through the PS MPED, chairman of the Review Committee. 3.02(d) Each sub-project shall be submitted to IDA for Requirement dropped in light of unrest 1984-87 approval by 12/31/1985. 3.03(a) Employ consultants and experts. Compliance. 3.03(b) Employment of technical assistance Coordinator was not appointed until 1988. coordinator by 6/30/1984. 3.05 All fellowships under the project shall be Compliance. administered in accordance with procedures and conditions satisfactory to IDA. 3.07(a) Obtain adequate insurance for imported goods. Compliance. 3.07(b) Exclusive use of the project goods and Compliance. services. 3.08 Maintain records. Purnish plans, reports, Project records were kept but not properly contracts and other project documents. Contribution to maintained. Performance improved later in the PCR. project. PCR contnbution was received at completion. 4.01(a) Maintain separate project account. As required in the DCA, this was not applicable, and hence not done. 4.01(c) Furnish annual audit report. Accounts were not audited each year during the initial lifetime of the project and ad hoc reports were received for 90' 91'. However, as all use of funds were through direct withdrawal on IDA, financial discipline was not impaired through lack of audits. A summary report of the auditors for the period 6/28/1984 to 6/30/1992 was furnished on 9/1992.  Table 8. Use of Bank Resources A. Staff Inputs Stage of 1983 1984 1985 1986 1987 1988 1989 1990 1991 Total Project Cycle l Preparation 1.5 1.5 Appraisal 5.9 2.9 8.8 Negotiation 2.1 2.1 Supervision 8.7 13.2 16.0 16.3 10.9 13.1 12.9 6.7 97.8 Total 7.4 13.7 13.2 16.0 16.3 10.9 13.1 12.9 6.7 110.2  B. Missions I/ Stage of Project Month/Year No. of Persons Specialization Performance Types of Cycle Represented 2/ Rating Status 3/ Problems 4/ Appraisal 04/1983 1 TA Supervision 07/1984 1 TA 2 M Supervision 03/1987 1 TA 2 M, l Supervision 12/1987 2 PA, Cons. _ Supervision 05/1988 1 TA 2 M, I Supervision 03/1989 2 TA, PSM 2 M, I Supervision 08/1989 1 PSM 2 M,I Supervision 11/1989 1 PSM 2 M, I Supervision 01/1990 1 PSM 2 M, I Supervision 02/1991 1 PSM 2 M I/ No mission between 1985-1986 due to the civil war in Uganda. 2/ Cons=Consultant, PA=Project Advisor, PSM=Public Sector Management Officer, TA=Technical Assistance Advisor. 3/ 1 =Minor problems, 2=Moderate problems, 3=Major problems. 4/ I=Impact, M=Management. * No Form-590.