Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 47080-NE

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

IN THE AMOUNT OF SDR 6.7 MILLION (US$lO MILLION EQUIVALENT)

TO THE

REPUBLIC OF NIGER

FOR A

REFORM MANAGEMENT AND TECHNICAL ASSISTANCE PROJECT

June 8,2009

Public Sector Reform and Capacity Building Unit Country Department AFCF2 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate as o f March 2009 - average)

ACCT AFD AfDB ARMP AWPB BCEAO BMAC CAS CCE CCD CCI CEM CFAA CPAR DAAF DGB DGCF DGCMP DGCPT DGE DGD DIF DGI DPL DPO EITI ESW EU FM FMIS FY GDP GoN HIPC

CurrencyUnit = F C F A US$l.OO = FCFA489 US$l.OO = 0.67 SDR

FISCAL YEAR January 1 - December 31

ABBREVIATIONS AND ACRONYMS Agence Comptable Centrale du Tre'sor (Central Accounting Office) Agence F r a n p i s e de De'veloppement (French Development Agency) African Development Bank Public Procurement Regulation Agency Annual Work Program and Budget Central Bank o f the West African States Budget Management and Accounting Center Country Assistance Strategy Commissioner in charge o f Economy Commissioner in charge o f Development Commissioner in charge o f Internal Resources Country Economic Memorandum Country Financial Accountability Assessment Country Procurement Assessment Report Administrative and Financial Management Unit General Budget Directorate General Financial Control Directorate General Public Procurement Directorate General Government Accounting and Treasury Directorate General Economy Directorate General Customs Directorate Financial Management Information Systems Directorate General Taxes Directorate Development Policy Lending Development Policy Operation Extractive Industry Transparency Initiative Economic and Sector Work European Union Financial Management Financial Management Information System Fiscal Year Gross Domestic Product Government of Niger Heavily Indebted Poor Countries

ICB ICR ICT IDA IFMIS IGF IMF IFR LCS M&E MDRI MEF MDGs MTEF NCB NSBD PAD PDO PERC PEFA PEMFAR PER PETS PCU PIU PFM PPF PRSP QBS QCBS RSRC SFB SDRs SONITEL

SSA SWAP UNCTAD UNDP WAEMU

FOR OFFICIAL USE ONLY International Competitive Bidding Implementation Completion Report Information and Communication Technology International Development Association Integrated Financial Management Systems Inspection General o f Finances International Monetary Fund Interim Financial Report Least-Cost Selection Monitoring and Evaluation Multilateral Debt Relief Initiative Ministry o f Economy and Finance Millennium Development Goals Medium-Term Expenditure Framework National Competitive Bidding National Standard Bidding Documents Project Appraisal Document Project Development Outcome Public Expenditure Adjustment Credit Public Expenditure and Financial Accountability Public Expenditure Management and Financial Accountability Review Public Expenditure Review Public Expenditure Tracking Survey Project Coordination Unit Project Implementation Unit Public Financial Management Project Preparation Facility Poverty Reduction Strategy Paper Quality Based Selection Quality-and-Cost Based Selection Rural and Social Policy Reform Credit Selection under a Fixed Budget Special Drawing Rights Socie'te' Nige'rienne de Te'le'communications (Nigerien Telecommunication

Sub-Saharan Africa Sector-Wide Approach United Nations Conference on Trade and Development United Nations Development Program West African Economic and Monetary Union

Company)

Vice President: Obiageli K. Ezekwesili Country Director: Madani M. Tall Country Manager Ousmane Diagana Sector Manager: Anand Rajaram

Task Team Leader: Robert Yungu

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not be otherwise disclosed without World Bank authorization.

NIGER Niger Reform Management and Technical Assistance

CONTENTS

Page

I . STRATEGIC CONTEXT AND RATIONALE .................................................................. 1 Country and sector issues .................................................................................................... 1

Rationale for Bank involvement .......................................................................................... 4

A . B . C . Higher level objectives to which the project contributes .................................................... 4

PROJECT DESCRIPTION .................................................................................................. 5 I1 . A . B . C . D . E .

I11 . A . B . C . D . E . F .

I V . A . €3 . C . D . E . F . G .

Lending instrument. Financing Arrangements and Other Approaches .............................. - 5 Project development objective and key indicators .............................................................. 5 Project components., ........................................................................................................... -6

Alternatives considered and reasons for rejection. ........................................................... -14

IMPLEMENTATION ..................................................................................................... 14 Partnership arrangements .................................................................................................. 14

Monitoring and evaluation o f outcomeshesults ................................................................ 16

Critical risks and possible controversial aspects ............................................................... 18

Loadcredit conditions and covenants .............................................................................. -19

APPRAISAL SUMMARY .............................................................................................. 19

Economic and financial analyses.. ..................................................................................... 19 Technical ........................................................................................................................... 20

Fiduciary ............................................................................................................................ 20 Social ................................................................................................................................. 21

Environment ...................................................................................................................... 21

Safeguard policies .............................................................................................................. 22

Policy Exceptions and Readiness ..................................................................................... -22

Lessons learned and reflected in the project design .......................................................... 13

Institutional and implementation arrangements ................................................................ 15

Sustainability ..................................................................................................................... 17

. .

Annex 1: Country and Sector or Program Background .......................................................... 23

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies .................. 27

Annex 3: Results Framework and Monitoring ......................................................................... 29

Annex 4: Detailed Project Description ...................................................................................... 35

Annex 5: Project Costs ................................................................................................................ 45

Annex 6: Implementation Arrangements .................................................................................. 46

Annex 7: Financial Management and Disbursement Arrangements .................................... .49

Annex 8: Procurement Arrangements ....................................................................................... 59

Annex 9: Economic and Financial Analysis .............................................................................. 66

Annex 10: Safeguard Policy Issues ............................................................................................. 68

Annex 11: Project Preparation and Supervision ...................................................................... 69

Annex 12: Documents in the Project File .................................................................................. 71

Annex 13: Statement of Loans and Credits ............................................................................... 72

Annex 14: Country at a Glance .................................................................................................. 73

Annex 15: Map ............................................................................................................................. 75

Table 1: Key macroeconomic indicators. 1999-2013 .................................................................. 1 Table 2: Table of Bank-financed DPOs in Niger ...................................................................... 28 Table 3: Major Financial Management Information Systems in MEF .................................. 41

NIGER

Source Local

REFORM MANAGEMENT AND TECHNICAL ASSISTANCE

Foreign Total

PROJECT APPRAISAL DOCUMENT

BORROWEFURECIPIENT IDA Grant Total:

AFRICA

0.00 0.00 0.00 10.00 0.00 10.00 10.00 0.00 10.00

AFTPR

TY 4nnual hmulative

Date: June 8,2009 Team Leader: Robert A. Yungu

9 10 11 12 13 14 0.30 1 S O 1.70 1.90 2.20 2.40 0.30 1.80 3.50 5.40 7.60 10.00

Country Director: Madani M. Tall Sectors: Central government administration (1 00%) Themes: Administrative and civil service reform (P);Public expenditure, financial management and procurement (P);Other public sector governance (P) Environmental screening category: Not Required

Sector ManagedDirector: Anand Rajaram

Project ID: P108253

Lending Instrument: Technical Assistance Loan

Project Financing Data [ ]Loan [ ]Credit [XI Grant [ ]Guarantee [ ]Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 10.00 ProPosed terms:

Recipient: The Republic o f Niger Niamey Niger

Responsible Agency: Ministrv o f Economv and Finance

Estimated disbursements (Bank FY/US%m)

Expected effectiveness date: September 1 , 2009 Expected closing date: April 30,2015 Does the project depart from the CAS in content or other significant respects? Ref; PAD I.C. Does the project require any exceptions from Bank policies? Ref; PAD I K G .

[ No

[ ]Yes [XINO Have these been approved by Bank management? I: ]Yes [IN0 I s approval for any policy exception sought f rom the Board? Does the project include any critical risks rated “substantial” or “high”? Ref; PAD III.E. Does the project meet the Regional criteria for readiness for implementation? Ref: PAD I K G .

[ ]Yes [XINO

[XIYes [ ] N o

[XIYes [ ] N o

Project development objective Ref; PAD IIA, Technical Annex 3 The project development objective is to improve: (i) the credibility and reliability o f budgets allocated to budget managers in each ministry; and (ii) the internal controls o f the use o f said budgets.

Project description [one-sentence summary of each component] Ref; PAD II. C., Technical Annex 4 The project has three components: (i) capacity development; (ii) leverage and rationalize financial management information systems; and (iii) support to the project coordination unit.

Component 1 involves training and technical assistance activities for improving personnel’s technical and managerial capacities in the areas o f macroeconomic management, budget preparation, execution, monitoring, and cash management.

Component 2 i s exclusively dedicated to financial management information systems, networking, and related individual IT training activities.

Component 3 i s focused on project support and management under a project coordination unit (PCU) anchored inside the MEF.

Which safeguard policies are triggered, if any? Ref; PAD I K F . , Technical Annex 10 None

Significant, non-standard conditions, if any, for: Ref; PAD IIIX Board presentation: None

Grant effectiveness:

i. The Recipient has established the Monitoring & Evaluation Committee and recruited the senior project accountant and the procurement specialist, in a manner satisfactory to IDA.

i. The Recipient has adopted the Project Manual o f Financial, Accounting and Administrative

Procedures, in a manner satisfactory to IDA.

ii. The Recipient’s accounting software has been updated to meet the requirements o f the Project, in a manner satisfactory to IDA.

Covenants applicable to project implementation:

(i) Recruitment o f the project external auditor three months after grant effectiveness;

(ii) Adoption by November 30,2009 o f a Monitoring & Evaluation plan, in a manner satisfactory to IDA.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

Social and macroeconomic context

1. with an estimated population o f 14 million people. It i s one o f the poorest countries in the world.. In 2007, it was ranked 1 74th out o f 177 countries on the UNDP Human Development Index and i t s gross domestic product (GDP) per capita was US$260. Almost 80 percent o f the population i s rural and about 62 percent live on less than a dollar a day. Niger i s far behind to meet all but one Millennium Development Goals (MDG) by 201 5, Le. the goal o f reducing by two-third infant mortality which was reduced from 362 per 1,000 in 1990 to 180 in 2005, The targets o f reducing by half the poverty incidence, achieving universal primary education, ensuring sustainability and other MDGs are out o f reach under current growth trends. Limited and volatile economic growth has been identified as one o f the main causes o f this poor performance.

Located on the southern edge o f the Sahara desert, Niger i s a vast landlocked country

2. uneven. From 1960 to 1974 before the uranium boom o f the mid 1970s, the economy was essentially dominated by rain-fed agriculture and GDP growth averaged 1.4 percent. Following a five-fold increase in uranium prices during the international oi l crisis, real GDP growth rose to 3.3 percent from 1975 to 1983. Through a combination o f declining uranium prices due to the stabilization o f o i l prices, a succession o f droughts, and political upheaval in the nineties, real economic growth decelerated to 0.9 percent. With the advent o f political stability, relatively successful implementation o f economic reforms, and increased uranium prices, the economy now seems to have entered into a new phase o f steady growth. GDP growth averaged 5.1 percent from 2001 to 2007, which was 1.8 percent above the population growth rate. The current worldwide economic downturn i s likely to reduce the recent economic growth, though not significantly in the medium-term as big investments in the mining have already been committed or are underway.

Niger’s economic growth over the past several decades has been relatively modest and

Table 1: Key macroeconomic indicators, 1999-2013

I 1998 2000 2001 2002 2003 2004 2005 2006 2007+ 2008. 2009p 2010p ZOllp 2012p 2013p Growth and Investment I Real GDP Growth (%) Gross investment (% of GDP) Inflation (CPI Annual Change, %) Annual Average Public Finance Government revenue (Sa of GDP) Government expenditure (% of GDP) Overall budget balance Balance of Payments Terms of trade (% change) Current account balance (% of GDP) Source World Bank and IMF, based on

-0.6 -1.4 7.1 3.0 5.3 -0.6 6.8 5.8 3.3 5.9 4.5 4.5 5.0 7.1 4.3 11.2 11.4 12.1 14.2 14.2 16.4 16.5 23.6 23.6 26.3 36.9 44.6 35.4 27.3 23.4

-2.3 2.9 4.0 2.7 -1.8 0.4 7.8 0.1 0.1 9.0 2.5 2.3 2.0 2.0 2.0

8.8 8.6 9.3 10.6 10.0 11.2 10.5 13.0 15.2 17.5 12.3 12.4 13.0 14.5 15.0 18.9 17.0 17.2 18.4 17.5 20.4 18.1 19.8 23.4 24.2 26.3 237 23.2 22.8 23.6 -9.9 -8.1 -7.9 -7.7 -7.5 -9.2 -7.5 -6.8 -8.2 -6.7 -14.0 -11.3 -10.2 -6.3 -8.6

9.9 -12.7 10.0 -2.4 -6.3 0 . 6 -0.1 1.8 18.0 9.0 3.4 2.0 -0.8 24.2 3.5 -7.5 -7.9 4 . 8 -6.5 -6.0 -7.0 -7.4 -10.5 -11.1 -12.3 -29.1 -34.9 -24.9 -15.7 -10.4

ftics by Government of Niger

3. intermediate growth scenario target o f 5.7 percent annual growth rate. PRPS I1 i s articulated around seven pillars: (i) promotion o f strong, diversified, sustainable and job creating growth;

The second Poverty Reduction Strategy Paper (PRSP 11) for 2008-12 has set up an

1

(ii) ensuring equitable access to quality social services; (iii) slowing down population growth; (iv) reduction o f inequalities and strengthening o f social security for vulnerable groups; (v) infrastructure development; (vi) promotion o f good governance and capacity building; and (vii) effective implementation o f the PRSP.

4. predicated o n effective and efficient utilization o f national resources and donor assistance funds. The government o f Niger (GoN) will need to ensure that increased national revenues which are expected to come from rising exports o f natural resources, notably uranium and oil, are adequately used in agriculture, education, health, and other priority areas o f the PRSP. Therefore public financial management (PFM) and governance reforms, which have been eagerly promoted recently by the govenunent and development partners, must continue.

Successful implementation o f the PRSP, and therefore progress toward the MDGs, i s

Public Financial Management Issues

5. Niger has initiated several P F M reforms with the help o f major development partners, but success has been limited. The results o f structural adjustment lending (Public Expenditure Adjustment Credits I and 11) provided by the Bank between 2000 and 2003 to shore up public expenditure management were modest as budget allocations to priority sectors only edged up slightly. Subsequently the Bank and the EU worked closely with G o N to finalize at the end o f 2004 a Public Expenditure Management and Financial Accountability Review (PEMFAR), which has since became the basis for the current P F M strategy in Niger.

6. an action plan to address shortcomings in the areas o f budget preparation, execution, controls, information systems, cash management, and domestic debt management. Specifically, the PEMFAR Action Plan formulated ten main recommendations: (i) strengthen l i n k s between budget allocations and government priorities defined in PRSP and sector strategies; (ii) identify alternative mechanisms for financing the Treasury (e.g. treasury bills) and the government budget; (iii) improve budget execution, reduce disparities between voted and executed budgets, protect priority expenditures; (iv) simplify and rationalize the chain o f expenditure; (v) prepare for a decentralization process through deconcentration; (vi) improve transparency and information systems, and prepare for delegation o f commitment authority to l ine ministries; (vii) gradually integrate externally-financed expenditures into the chain o f expenditures; (viii) modernize and restructure the Treasury; (ix) improve accounting practices to provide an accurate picture o f government financial and non-financial assets; and (x) strengthen and improve procedures for closing accounts and preparing final government accounts.

The PEMFAR made a comprehensive assessment o f Niger’s PFM systems and laid out

7. Sti l l the implementation o f P F M reforms since 2005, supported through four DPOs (PEAC 3, PERC, RSRC 1 &2), has not been fully satisfactory mainly because o f institutional and technical capacity constraints. The first Public Expenditure and Financial Accountability (PEFA) exercise was conducted in September 2008, but the results have yet to be validated by the Government. The project will use some o f the PEFA sub-level indicators when they are officially available to monitor progress o f PFM reforms in the country.

2

Governance and Civil Service issues

8. out o f 180 countries, at par with Malawi, Mauritania and Zambia, an improvement from a ranking o f 123rd in 2007. Social accountability is st i l l perceived to be l o w as mechanisms o f checks and balances including c iv i l society organizations, media, and other mechanisms have yet to fully develop and become effective.

According to the 2008 Transparency International perception index, Niger i s ranked 1 15

9. and accountability issues through important initiatives such as the Extractive Industry Transparency Initiative (EITI). Niger i s a now a member o f EITI, and has established the High Authority (HLAC) to combat corruption and promote good governance. Furthermore, there i s an ongoing study on the political economy o f mining in Niger which aims to determine the political drivers and governance issues along the value chain o f natural resources (from licensing to public expenditures), and what the country can do to maximize the benefits o f its natural resource revenues.

The donor community i s engaged in the dialogue with the Government o n governance

10. come yet to full fruition, i s c iv i l service reform. Since it was initiated in the eighties in the Prime Minister’s Office o f Organization and Methods (Bureau Organisation et Me‘thodes), which was later fully adopted by the Ministry o f C iv i l Service and Work, c iv i l service reform hasn’t reached i t s objectives o f improving human resources management and performance o f the public sector.

Another important crucial driver o f public sector management in Niger, which hasn’t

1 1. There are st i l l significant issues related to the general c iv i l service statute, payroll management, incentives, and strategic planning, which continue to hinder efficiency, transparency, accountability, and performance in the public administration. These include:

0 Existence o f formal and informal statutes that operate in parallel with the general c iv i l service statute. Hence, the sheer number o f volunteers, auxiliaries, interns, and many other personnel who do not have clear roles and responsibilities.

Lack o f description o f key functions o f various ministries and absence o f long- te rm strategic planning o f personnel in terms o f skills, competencies, etc.

0 N o incentives to reward performance. The bonus system to reward performance i s not transparent and operates differently in various ministries.

12. Hence, long-term success o f PFM reform in Niger also depends to a great extent on the progress o f the c iv i l service reform (CSR). The payroll management and the incentive mechanisms are two major areas where PFM reform and CSR intertwine and where it i s crucial to harmonize approaches and create synergies. However, given the scope o f the proposed project which i s limited to the MEF and does not cover c iv i l service reform, it i s crucial that the Bank and other development projects continue to engage with the Government through other interventions on a wider range o f public sector reform agenda.

3

B. Rationale for Bank involvement

13. The Bank and other development partners have noted in several implementation completion reports (ICR) o f PFM reform projects that low capacity in public sector i s the root cause o f the lack o f success o f reform programs in Niger. In fact, all these ICRs indicate that the f i rs t and probably the most important lesson learned i s the need to combine the design of a major policy and institutional reform program in public finance management with implementation of a comprehensive capacity-building project supporting each main objective o f the PFM aspects o f the program’. In the same vein, the government has also acknowledged the importance o f strengthening capacity to successfully implement PFM reforms.

14. help strengthen, modernize, and reform his ministry. Specific areas expressed by the Minister in his request include strengthening o f General Directorates, acquisition and usage o f decisions support tools, training, research, and mobilization o f experts from within the country and the diaspora.

I t i s in this context that the Minister o f Economy and Finance has requested the Bank to

15, Strengthening capacity o f MEF i s all the more critical now as considerable revenues are starting to flow in from the mining sector. It i s expected that uranium exports revenue wi l l increase from CFAF 80 billion in 2006 to CFAF 400-500 billion in 2012. The French company AREVA has just signed a contract with the government to invest 1.2 billion Euros for exploitation o f the giant Imouraren uranium mine. This would double the country’s uranium production by 20 14. Also, oi l export should normally start in 20 1 1 , following the completion o f the refinery which was launched in 2008. All in all, the investment rate i s projected to be high, over 2008-12, between 25 and 28 percent o f GDP, partly as a result o f uranium-related public investments in infrastructure planned under PRSP 11. Hence, the pressing need for in-depth increase o f MEF capacity to properly manage the upcoming additional revenues, expand public expenditure in social sectors and infrastructures while ensuring effectiveness, efficiency, and transparency o f these expenditures.

C. Higher level objectives to which the project contributes

16. building which are among the seven pillars o f the second PRSP. The government has candidly identified the main factors o f poor governance, recognized their negative effect on economic growth and poverty reduction, and formulated proposals in the PRSP to promote good governance and build capacity in public financial management.

The proposed project i s critical for the implementation o f good governance and capacity

17. (CAS) for Niger which proposes a program focused on supporting the drivers o f growth, strengthening the management o f public resources and improving access to basic social services. The Bank’s strategy to contribute to PRSP I1 objectives i s built around two pillars: (i) accelerating sustained growth that i s equitably shared; and (ii) developing human capital through access to quality social services. In addition, there are two cross cutting themes including slowing down population growth and promoting good governance on which the Bank will work

The proposed project i s well aligned with the Bank’s 2008 Country Assistance Strategy

’ ICR o f the Public Expenditure Reform Credit (IDA-40660 IDA-H1720)

4

closely with Niger to support results o f the two pillars. The CAS acknowledges the proposed project as one o f the main instruments for building capacity and promoting governance in Niger.

11. PROJECT DESCRIPTION

A. Lending instrument, Financing Arrangements and Other Approaches

18. support the reform process at the MEF by developing capacities that are needed to implement the P F M reform. Therefore the focus o f the project i s not primarily on inputs such as computers or skilled staff, but f i rst and foremost on outcomes (Le. budget credibility, transparency, accountability, strategic resources allocation, and progress towards the MDGs).

The proposed operation i s a five-year technical assistance (TA) grant which seeks to

19. The choice o f TA for capacity development o f MEF i s the result o f lessons learned from the implementation o f previous DPOs, which were used to address the P F M reform issues in Niger. Despite significant resources allocated by development partners and the government on PFM reform, the results have been mixed in terms o f budget outcomes and processes precisely because o f continuous weak institutions and l o w capacity o f MEF. Hence, the need for a TA to break the vicious circle o f l o w capacity and modest reform success. Addressing this challenge i s a l l the more important nowadays with the prospects o f increased government revenues from the mining sector and the push toward a programmatic approach by both the donors and government.

B. Project development objective and key indicators

20. budgets allocated to budget managers o f each Ministry; and (ii) the internal controls o f the use o f said budgets. These objectives are related to the first two platforms o f the sequence approach described in the next section. The subsequent platforms, which seek to enable more accountability for performance management, are realistically beyond the project’s time horizon. They necessitate significant financial resources and sophisticated capabilities which take time to acquire and maintain.

The project development objective i s to improve: (i) the credibility and reliability o f

21. It is expected that MEF will have at the end o f the project a more competent and motivated personnel who will use efficient business processes and tools to ensure that (i) sound macro-fiscal framework and revenue forecasts are established, (ii) adequate budgets are allocated to managers according to agreed-upon programs; (iii) budgets are executed according to plan and without undue delays; and (iv) effective internal controls are put in place to hold mangers accountable. Ultimately, as capacities and capabilities gradually evolve in later stages, it will be possible to monitor budget performance through the lenses o f service delivery and development outcomes.

22. indicators related to cycle time, volume, productivity, and satisfaction rate o f internal processes, which in most cases relate to PEFA and are directly controllable by decision makers. The project outcome indicators are:

To measure and assess progress, the project has adopted quantifiable and measurable

Ratio (%) o f arrears compared to total expenditures

5

Delay (in months) for the submission o f financial statements to the Chamber o f Accounts and the National Assembly

C. Project components

23. Strengthening capacity o f MEF will necessitate continuous improvement o f the personnel’s technical and managerial skills, rationalization and integration o f systems and processes, and establishment o f enabling institutional arrangements. To allow a more coherent implementation o f activities envisioned by this project, i t was agreed between the MEF and the Bank’s team to have three components by functionality/expertise areas: human and institutional capacity development, information systems, and project management. Thus, the project wi l l have three components: (i) capacity development; (ii) leverage and rationalization o f financial management information systems; and (iii) support to the project coordination unit.

24. technical assistance activities for improving personnel’s technical and managerial capacities in the areas of macroeconomic management, budget preparation, execution, monitoring, and cash management. I t i s worth mentioning that, for better project implementation oversight and business process management, the type o f individual ski l ls and processes envisaged in the Component 1 doesn’t include information technology (IT) and networking skills. All IT and networking related training are included in the component 2 (Information System). In this fashion, Component 2 will be exclusively dedicated to information systems, networking, and related individual IT training activities. And Component 3 will focus on the project support and management via a project coordination unit (PCU), which i s anchored inside the MEF. The project will be implemented in the context o f a platform sequence approach described below. The estimated IDA financing for this project i s US$lO mill ion equivalent.

The capacity development component (Component 1) will involve training and

25. implementation o f PFM reforms, but the focus o f this project wi l l be on the first two platforms (budget credibility and financial accountability) due to the time horizon and limited budget o f the project. The challenge i s to be more selective and address the most pressing needs, which entailed covering f i rs t the basics o f PFM reforms, before moving to a more complex set o f reforms (e.g. performance management). A complete depiction o f the platform diagram i s provided in Annex 4.

Platform approach. The platform approach proposes four platforms for full

26. Project Costs. Following i s a summary the project costs per component.

6

1. Capacity Development 0.9 2.1 3.0 1.1. Strengthening Key Functions of MEF 0.6 0.9 1.5 1.2. Support to Local Training Institutes 0.3 0.7 1 .o 1.3. Support to the Diaspora Program 0.0 a.5 0.5

2. Leverage & Upgrade o f Information Systems 2.0 3.0 5.0 2.1. Intranet/Internet Deployment 1.1 1.4 2.5 2.2. Systems Rationalization & Upgrade 0.5 1.5 2.0 1.3. Ofice Equipment Upgrade 0.4 0.1 0.5

3. Support to the Project Coordination Unit 0.8 0.2 1.0 4. Contingency Fund 0.2 0.3 0.5

1 Total Baseline Cost 3.9 5.6 9.5 Project Preparation Facility 0.3 0.2 0.5 TotaI Financing Required 4.2 5.8 10.0

Component 1: Capacity Development ( U S 3 million).

27. o f the key functions o f MEF, (ii) support to the training institutes, and (iii) support to the Diaspora program.

Three sub-components were selected to support capacity development: (i) strengthening

Sub-component 1.1: Strengthening o f Key Functions o f MEF (US1.5 million).

The project will support MEF improve performance in the critical macro-fiscal and budget management functions o f the ministry.

28. The project will provide technical assistance to the units (e.g. CCE, CCD, and DGB) involved in the formulation o f economic policy, long-term planning, and budget preparation. Many donors particularly the UNDP, European Union, and IMF are in the process o f providing support to MEF in macro-fiscal management and development o f a global medium term expenditure framework (MTEF). There seems to be strong commitment f rom both these donors and MEF to move in the area o f program budgeting. Bank’s approach, o n the other hand, is a little bit cautious as it does not see the tool (e.g. MTEF/ Program Budgeting) as an end in itself; it rather aims f i rs t at strengthening the basics o f P F M systems which start with the establishment o f an excellent process for ensuing credible revenue forecasts, reliable multi-year budgets, and financial accountability.

Improving macro and revenue forecasts to prepare credible multi-year planning.

29. In this context, the Bank will coordinate with other donors around the MTEF and program budgets so as to support activities that focus on fundamentals. Some o f the main activities envisioned by the project include: (i) development o f macro-fiscal and sector policies; (ii) improvement o f fiscal framework and revenue forecasts; (iii) support in the development o f multi-year program budgets and strategic alignment; and (v) improvement o f the budget calendar to meet existing regulation requirements and enhance budget discussions and negotiations with sector ministries. Training will play a big role in capacity enhancement as well as study vis i ts to neighbouring countries to learn about their experience in the development o f macro-fiscal framework, strategic alignment, and program budgeting.

7

30. Improving revenue collection. Revenue collection in Niger (1 1% o f GDP in 2008) i s among the lowest in the WAEMU zone. Improving management and operational efficiency in the revenue agencies (Tax and Customs Revenue Authorities) shall lead to an increase in revenues. The following activities are envisioned: (i) formulation o f strategy and development plan for DGI and DGD; and (ii) training o f DGI and DGD staff on various aspects o f fiscal revenues and operational management.

3 1. from annual line-item budgeting to program budgeting, it i s crucial to support the underlying budget architecture and the development o f adapted tools to support the decision-making process. So far, DGB's staffing i s not specialized by sector type to provide support and guidance in the areas o f policy development, budget preparation, and monitoring. The project will help strengthen the reporting, analysis, and monitoring functions o f the DGB along the new budget management orientations.

Improving budget reporting and analysis. With the gradual shift o f the budget process

32. Improving procurement management. To ensure the implementation o f the Procurement Management Reform following the WAEMU's guidelines, the project will seek to strengthen the capacities o f the newly established General Directorate o f Public Procurement (Direction Ge'ne'rale du Contrdle des Marche's Publics). To this end, the project will provide opportunities for training to DGCMP staff on public procurement management and statistical analysis. Additionally, the project will facilitate the development o f a procurement management information system within DGCMP to ensure high reliability o f procurement information and statistics.

33. intended purposes, it i s critical to have a credible internal audit unit in place and whose recommendations are strictly followed through by all the parties involved. The internal audit function plays a key role in the realization o f the platform 2 on financial accountability. To this end, the project will support these activities: (i) development o f a strategy and action plan for the DGIF directorate; (ii) elaboration o f an internal audit handbook and procedures manual; (iii) support for the establishment o f a special status for financial inspectors to protect them against administrative retaliations; (iv) training programs for financial controllers and inspectors; and (v) introduction o f the assets accounting.

Improving internal audit and financial oversight. To ensure that resources are used for

34. effective and efficient cash management that the newly created Treasury and Government Accounting General Directorate (Direction Ge'ne'rale du Tre'sor et de la Comptabilite' Publique) carries out i t s mission as postulated by the reform program o f the Treasury. So far, there has been significant delay in the implementation o f the reform which has led to a stalemate and inefficiencies in cash management. Therefore, the project will seek to support the on-going reform and improvement o f the treasury and public accounting functions through the following actions: (i) elaboration o f a strategy and action plan for DGTCP; (ii) technical assistance for the implementation o f the strategy and action plan; (iii) training o f the public accountants and treasury staff; (iv) drafting, adoption and internalization o f an instruction governing the relations between the centralizing accountants (ACCT-GTA and PGT) and non-centralized accountants; (v) update the 2003 chart o f accounts to the new entities envisaged by the reform; and

Improving cash management and supporting Treasury reform. It i s critical for an

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(vi) upgrade o f the Treasury and the Accounting Information Systems (see more details on this under sub-component 2.2).

Sub-component 1.2: Support to Local Training Institutes (US$l.O million).

35. development program in Niger. The project seeks to strengthen capacity o f the National Institute o f Public Administration and Magistrate (Ecole Nationale d 'Administration et de la Magistrature, ENAM) and the Faculty o f Economics at the University o f Niamey so as to provide effective training to MEF staff in macro-fiscal management, financial programming, program budgeting, information systems, leadership, change management, and other key activities envisioned in this project.

Training institutes will play a critical rolei in long-term sustainability o f the capacity

36. Specifically, the project wi l l support these activities: (i) capacity need assessment, strategic update, and a development plan o f these two institutions; (ii) design o f a new curriculum and courses that will provide more hands-on experience to MEF trainees; (iii) limited hardware and software equipment; and (iv) some books and review materials.

37. carried by ENAM and the University, not just for economic reasons, but more importantly for the purpose o f sustainability and long-term capacity development o f these local institutes. It i s also expected that the Diaspora experts will be involved in training sessions at local institutes.

Most o f the training activities envisaged in this capacity development project will be

Sub-component 1.3: Support to the Diaspora program (US$0.5 million).

38. Leveraging the expertise o f Nigeriens from the Diaspora i s a very effective way o f sustaining capacity development as has been proven in a few good cases in Niger, particularly at the National Institute o f Statistics. There are also success stories o f the Diaspora program in some African countries. Through their direct participation in work program and staff mentoring, Diaspora experts will share knowledge, thus, ensuring long-term sustainability o f capacity development.

39. for work contracting with the Diaspora experts; (ii) identification o f potential candidates through embassy contacts and networks; (iii) ticket payment and ancillary fees to facilitate short term return. In the event the expert chooses to stay permanently, then MEF will need to decide on the type o f incentives for that particular case. The project will seek to capitalize on the database and other network information already garnered by UNDP through i t s TOKTEN (Diaspora program) so as to target maximum number o f potential candidates.

The project wi l l support the following activities: (i) formulation o f engagement policies

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Component 2: Leverage and Rationalize Financial Management Information Systems (US$5.0 million).

40. Given the risks and complexities o f developing integrated financial systems particularly in the l o w income countries with l imited capacity, the project will primarily seek to leverage and rationalize existing systems. The development o f completely new systems will be very limited.

4 1. directeur) proposed by the EU for strengthening core IT systems o f the ministry (Tax, Customs, Treasury, and Budget) by working on on-going projects which have already been initiated within the ministry.

In this context, the project will draw o n the recommendations o f the I C T plan (sche'rna

42. achieved by the local telecommunications provider (e.g. SONITEL), who has laid out a fiber- optic network around major government agencies in the capital, so as to start interconnecting disparate MEF information systems and deploy the intranevinternet. As capacities and capabilities improve, then there will be scope to develop a full-fledged IFMIS at later stages o f the platform sequence.

In the same vein, the project will capitalize on the improvement o f the network recently

Sub-component 2.1: Intranethternet deployment (US$2.5 million).

43. relatively secure and reliable network thanks to SONITEL and recent interventions from some donors including the EU and the World Bank. The next step will be to expand to regions as the telecommunications providers increase their services across the country and the cost o f interconnectivity become more affordable. Therefore, the project will negotiate the cost o f data transfer with providers, who could use any type o f cost effective technology (fiber-optic, satellite, Wimax, etc.) to provide network coverage across the country. Thus, the project will not fund the development o f network per se, but will seek to use available services and negotiate payment o f monthly or annual fees. Other related network expenditures that will be supported by the project will be the acquisition o f the connecting and security equipment as well as networking training for maintenance staff.

Network extension. The project will first focus on the capital Niamey which has a

44. Intranet. Currently, different parts o f the ministry do not have a unique platform for internal communication. With the establishment o f intranet which will firstly be built o n the existing network infrastructure, business processes will improve as more people have direct access to same information about procedures, guidelines, and other important administrative documents. Transparency on budget allocation, use and monitoring o f resources, and dissemination o f results shall help improve financial accountability and budget credibility.

45. the Diaspora initiative through establishment o f network contact with the outside world. In essence, the internet will have database applications and server, and the Diaspora network will use same platform (database applications and web server) as an Extranet to reach out to the outside world. The Diaspora news and database activity will mostly involve knowledge and content generation (distribution list, contacts database, communities o f interest, etc.) which will

MEF i s very interested in developing i t s internet capability which will also help support

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require the hiring o f skilled staff such as a webmaster and a communication specialist) to populate the MEF’s content related to Diaspora, and to advertise for that new collaboration tool to the different targeted groups through embassies, universities, etc.

46. and diverse types o f expertise which may not be currently available in the ministry. It i s doubtful that the private sector, which i s usually contracted out to provide content management, i s capable o f playing this role in Niger. The MEF will a im at developing capacities and capabilities in this critical area o f content management and strategic communication.

Content management for the whole MEF IntranedExtranet will involve more resources

47. of this project’s support i s to complement MEF’s and other donors’ resources to facilitate the realization o f this crucial tool. A study visit in another Francophone country in the region which has implemented a good intranethternet system for MEF will also be funded.

As the resources required to deploy and effectively use the internet are enormous, part

Sub-component 2.2: Systems rationalization and upgrade (US$2.0 million).

48. The current MEF information system platforms which include Budget, Customs, Taxes, and Treasury systems have significant deficiencies which need to be corrected in the short-term. Successful rationalization and upgrade o f these systems will require ownership and commitment o f adequate resources by the Government and other donors.

49. Upgrade o f Budget information systems. Two separate applications (Expenditures and Payroll) are housed in the General Budget Directorate (DGB). These are very rudimentary systems which present significant shortcomings. The Expenditure application is primarily used to keep track o f existing commitments. The Payroll application runs on a database which is not directly linked to the ministry o f c iv i l service, and doesn’t include regulatory and administrative texts. There are ongoing projects to upgrade these two systems which the project will support.

50. Significant improvements were recently made on the chain o f expenditures with the installation o f a centralized computer room where credit administrators come to enter their commitments and where the financial controllers input their ex-ante control visas. Further improvements are envisioned with the integration o f externally-funded investment expenditures (CCD) into the chain o f expenditures and interconnection with other satellite applications (DGCMP, etc.). Hopefully, these upgrades will streamline spending processes and enhance internal controls, which should lead to a significant improvement in the budget execution and availability o f resources to spending units.

5 1. budgeting, it is crucial to have al l the relevant tools and procedures in place. Hence, the project will help put in place a multi-year budget preparation module and different dashboard instruments to monitor and report performance by sectors and programs.

Furthermore, as budget processes move toward the MTEF approach and program

52. with difficulties, to the standard Sydonia ++ platform, sponsored by United Nations Conference on Trade (UNCTAD) in many countries o f the world. Only one module (declaration) i s

Upgrade of the Customs information systems. Currently the Customs are migrating,

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somewhat working, the rest (transit, sampling, manifest, etc.. .) are not operational. The project will support DGD to rationalize customs processes and implement other key modules. The project will not help DGD migrate to the new Sydonia World platform as i s presently recommended by UNCTAD. The technological r isks for such a migration are very high and there are s t i l l many useful functionalities in Sydonia + + which have yet to be fully exploited. One significant outcome o f this upgrade will be the electronic transfer o f customs revenue data from DGD to other infomation systems in the ministry including Treasury, DGI, and DGB.

53. Upgrade of the Taxes Authority information systems. The Tax Department (DGI) has three separate applications (professional taxation, big corporate taxation, and verification) which have limited functionalities -just statistics o f the different services. DGI i s currently trying to develop a unifying system for tax management which will incorporate unifying processes for taxation, verification, and collection. The real contour o f this system, which i s likely to be expensive, has yet to be properly defined by DGI. Therefore, the project cannot at this stage make a firm commitment on the type o f activities it will support in the development o f the DGI system. Instead, it i s only committing to support the process o f reviewing and studying different options o f system design that DGI i s going through. Eventually, the Bank, the EU, and other donors wi l l join forces to help establish a sound information system at the DGI.

54. Following the new requirements o f the Treasury reform which mandate the separation o f the Public Accounting function and the Treasury (cash management) function, the current Treasury system, which does not have these two split organizing views yet, i s required to undergo a systematic upgrade. The project will support the adaptation o f the current system to the new environment including the update o f the new government accounting chart and the new budgetary nomenclature. Furthermore, the project will support these crucial activities: (i) timely and accurate transfer o f revenue collection data from revenue agencies to Treasury; (ii) complete and timely exchange o f balance account information between Treasury and Budget Directorate; and (iii) staff training.

Upgrade of the cash management system and support o f the Treasury reform.

Sub-component 2.3: Office Equipment Upgrade (US$0.5 million).

55. Limited office equipment renovation. With the information systems upgrade and integration, there will be a great need for adequate office equipment. The project will help fund, jointly with the government and other donors, network equipment, computers, printers, and communication tools.

Component 3: Support to the Project Coordination Unit (US$1.5 million).

56. the project wi l l be carried out by a unit inside the MEF. The PCU wi l l be headed by a Coordinator who will supervise the work o f the two fiduciary staff (senior accountant and 'procurement specialist), the component managers, an assets accountant, and a monitoring and evaluation specialist.

As a way o f ensuring project ownership and use o f country system, the coordination o f

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57. work programs and corresponding procurement plans, procedure manuals, and procurement plans; (ii) conduct o f fiduciary and monitoring activities; (iii) coordination o f the technical work related to the project components; and (iv) monitoring in project preparation and implementation. The project will provide funding for necessary office equipment, acquisition of the accounting software, and payment o f the various activities related to project coordination and monitoring.

Ma in activities that will be carried out by the P C U include: (i) development o f annual

58. O f the US$1.5 mi l l ion allocated to the Project Coordination Unit, a contingency fund o f US$0.5 mi l l ion will be kept aside for funding o f unexpected activities which might be required in one o f the above mentioned subcomponents.

D. Lessons learned and reflected in the project design

59. The experience o f previous P F M reform projects has led the government and the Bank to address the issue o f l o w capacity which is now acknowledged as a sine qua none condition for the successful implementation o f the reforms. About a half-dozen development projects intended to boost performance o f P F M systems had limited success because they overlooked the issue o f l o w capacity in MEF. This project seeks to establish the basis for a dynamic and systemic capacity development approach which emphasizes both the individual and organizational capacities as wel l as the significance o f the institutional context.

60. Understanding the institutional context and external factors that exert influence on the organization and individuals i s very critical. Most o f the past project and reform programs on P F M had a purely technical approach to the challenges o f poor budget processes and outcomes. Those solutions consisted o f traditional ways o f providing international technical assistance with the preparation o f key documents on budget organic law, budget classification, and instruction manual for financial controllers, etc. What needed to be done in addition to the technical or functional response was to bring in the external factors o f political economy which have a great deal o f influence on the status quo. Two ongoing studies on political economy o f natural resources management and efficiency o f public investment system in Niger are being used to underpin institutional capacity development for this project. T o this end, the project will seek to promote trust and consensus among stakeholders through their involvement in the Monitoring and Evaluation Committee. The monitoring and evaluation o f project activities will be done in coordination with key stakeholders o f the P F M reforms including representatives o f l ine ministries to provide a counter-balance to MEF and ensure that their needs are taken into consideration. Furthermore, the deconcentration o f spending process in line ministries and improved transparency with the internet should improve financial accountability.

6 1. This dual approach, which suggests a long-term and systemic treatment o f existing anomalies o f the P F M system rather than a quick short-term technical fix, requires a sequenced approach for building credible and reliable PFM systems. Most past reform projects overlooked the sequenced approach which seeks first and foremost to cover the basics. In the past, the sequencing and priority for the program results were not wel l articulated. I t was unclear for instance when, why, and how program budgeting or sector medium-term expenditure frameworks will be put in place. The proposed project has laid out a sequence o f activities in a

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platform approach which gives priority to the most pressing needs, taking into account the capacity and institutional realities.

62. implementation unit (PIU) inside MEF rather than create an outside parallel structure. Having an internal unit to prepare and implement the project clearly provides a greater sense o f ownership and ensures long-term capacity building which i s not the case when external parties are in the driver’s s eat. PIUs o f the past did not achieve expected budget outcomes, and no substantial internal capacity was created, thus leaving MEF with l i t t le concrete outcomes and a severe capacity shortfall. The proposed project seeks to correct this anomaly by establishing an internally viable PIU.

Another important lesson learned from past projects was the need to anchor the project

E. Alternatives considered and reasons for rejection

63. because o f the need to focus on a TA that directly addresses the capacity and capability constraints o f MEF. Having a TA that takes into account external factors, the sequenced approach, and leverage o f existing structures, seems to provide a greater probability for addressing the type o f shortcoming and capacity constraints that have been identified.

Other considered alternatives consisted o f APL and DPL instruments, but were rejected

64. external controls, transparency, and accountability by the Parliament Finance Committee, Court o f Accounts, media, and civil society. But this option was not considered as other donors are already intervening in these areas (e.g. the French and EU are helping set up the Court o f Accounts) and the fact that, as expressly recommended by the Minister, the scope o f the project and thus i t s primary beneficiaries, should be limited to MEF.

In principle, the project should have included demand-side activities for strengthening

65. evident from existing low capacity o f MEF to properly implement PFM reform, that undertaking these reforms simultaneously was not feasible. Instead, it i s critical for long-term sustainability o f virtually every reform in public sector that the government and donors address Civil Service Reform through DPOs or other instruments.

The treatment o f Civi l Service Reform through this project was also rejected as it was

111. IMPLEMENTATION

A. Partnership arrangements

66. Action Plan. The Bank provides the largest financial contribution through budget support. A certain division o f labor, although informal, has emerged among donors in the type o f interventions that they provide to different units o f MEF.

There i s a great deal o f interventions f iom donors to help MEF implements the PEMFAR

67. But the interventions are not very well coordinated as there i s not yet a unique institutional set up within MEF to bring together and align these interventions around a comprehensive capacity development plan. Hopefully, the Project Coordination Unit which i s being set up for this project would be used by all donors to align and channel their assistance

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toward the actions and development objectives o f this project, and beyond that the overall implementation o f P F M reforms.

68. Clearly, there are many interventions by donors which have taken place or are being envisaged in the near future to help MEF implement P F M reforms. However, the amount o f resources mobilized or the effects o n the ground appear to be limited. Generally, there are issues o f absorptive capacity and disconnect between donors’ commitments and their real contributions.

A comprehensive l ist o f different donors’ assistance to MEF i s provided in Annex 2.

69. and use same implementation structure or focal point inside MEF to provide their support for the implementation o f PFM reforms.

A major objective o f this project i s to have donors better harmonize their interventions

B. Institutional and implementation arrangements

70. development partners and the government, the Government and donors have set up a dialogue committee (Cadre de Concertation) o n P F M reforms which has proven to be somewhat effective. I ts main objectives are to provide strategic directions for PFM reforms, facilitate aid coordination, and monitor progress. The committee i s open to development partners involved in the P F M reforms (e.g. EU, France, Germany, UNDP, etc.) and is headed by the Minister o f MEF. Currently the Commissioner in charge o f Economy from MEF i s responsible for technical coordination o f the committee.

To follow-up on the recommendations o f PEMFAR and enable aid coordination between

7 1. the following institutional and implementation arrangements: (i) a Steering Committee; (ii) a Project Coordination Unit (PCU); (iii) a Monitoring & Evaluation Committee; (iv) focal points inside the MEF; and (v) internal control and audit. A diagram o f the institutional and implementation arrangements and further details are provided in Annex 6.

For the implementation o f the proposed project, the Bank and the Government agreed o n

72. the project to ensure that the objectives are achieved. It will be chaired by the Minister or hisher representative and will be made up o f members from key directorates in the ministry, who happen to be the main beneficiaries o f the project. Steering committee members will have to validate and authorize yearly activity plan submitted by the Project Coordinator, reviewed in- year progress reports, and recommend corrective measures.

Steering Committee. This committee will provide strategic guidance and oversight o f

73, Program Coordination Unit. As mentioned above, the P C U will facilitate the preparation and implementation o f the project. The PCU will be headed by the Coordinator who will supervise the senior accountant, procurement specialist, assets accountant, M&E specialist, and c iv i l servants in charge o f different program components. The Project Coordinator assumes daily responsibility o f the project’s work program by working closely with al l the different managers and specialists reporting to him.

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74. Furthermore, in keeping with the corporate requirement o f strengthening the use o f country systems, the head o f the MEF's administrative and financial management unit (DAAF) will assume a direct control on the fiduciary staff working in the coordination unit and will share the responsibility o f approving payments with the Coordinator. Same shared responsibility will also apply in the authorization o f expenditure commitments.

75. technical skills in the various areas envisaged for reforms, wil l spearhead the implementation o f the project as agreed with the Coordinator. Specifically, they will work with designated staff inside different units o f the MEF, as focal points, to carry out project activities. Unit managers and Component managers from P C U must work together to ensure that the timetable and desired outcomes o f each activity are achieved.

Focal points inside the MEF. Component managers, who possess great expertise and

76. results and performance o f the project. It will comprise mainly the direct beneficiaries (members o f the Steering Committee o f the Project) but will be extended to other beneficiaries such as priority ministries (Education, Health, Agriculture, etc.) which ultimately are the main users o f the P F M system. The M&E Committee will review and validate the reports o n performance indicators and recommend corrective action if necessary. The direct beneficiaries will be responsible for providing relevant information and monitoring progress, using relevant performance indicators. The P C U will in the end be responsible for consolidating data, analyzing results, and disseminating the M&E reports approved by the Committee. T o this end, the recipient shall formally establish an M&E Committee prior to grant effectiveness.

Monitoring & Evaluation Committee. This committee will be needed to monitor the

77. Financial Management: The D A A F P C U will prepare Interim Un-Audited Financial Reports (IFRs). The segregated designated account wil l be managed by the D A A F P C U . With regard to controls duties, the Project will be strengthened by the intervention o f the Financial Controller to set up an efficient and robust ex ante control arrangement. The DAAF/PCU will also be provided with a Financial Management (FM) procedures manual and an integrated computerized financial management system. The Director DAAF will be trained in the FM procedures manual, and the Inspection General o f Finances (IGF) will maintain the right to intervene in the project fiduciary management. An audit firm will be selected to provide i t s professional opinion on the annual financial statements o f the project and assess the internal controls in place.

C. Monitoring and evaluation of outcomes/results

78. keep track and evaluate implementation progress o f the proposed IDA project within the context o f the broad P F M reform. The project's M&E system will seek to measure results that are closely associated with project activities. Hence, the first order o f indicators that the M&E system will look at shall include SMART (specific, measurable, achievable, relevant, and time- bound) indicators related to the quality, quantity, and cycle time o f the business processes.

As indicated above, an M& E system will be set within the Project Coordination Unit to

79. are expected in terms o f capacity development, strengthening o f country system, transparency,

With the M&E system operating within existing structures o f the MEF, two main benefits

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and accountability. These benefits include: (i) long-term institutionalization o f M& E system for monitoring and evaluation o f PFM; and (ii) multi-stakeholder participation in M&E and decision making process o f PFM implementation. The project will help recruit an M&E specialist who will be in charge o f collecting data, measuring results, conducting seminars, and validating results with various stakeholders.

80. progress and make recommendations to remedy any shortcoming noted in the carrying out o f the project in furtherance o f the objectives o f the project.

A mid-term review will be conducted within 30 months o f grant agreement to assess

D. Sustainability

8 1. The project reflects the medium-term priorities set out in the PRSP in terms o f building capacity in public sector and promoting good governance. It i s a direct response to the request from the Minister on technical assistance and a follow up o f ICR recommendations o f the Public Expenditure Adjustment Credit (PERC) about strengthening capacities o f MEF.

82. MEF i s very committed to the project and has taken the necessary steps to ensure ownership and leadership in initiatives designed to establish the basis for long-term sustainability. There has been great participation o f MEF staff in project preparation and frank dialogue about critical needs and the type o f activities that should be undertaken to meet expected outcomes. Strengthening o f local institutes and the development o f the Diaspora program should ensure long-term capacity development o f MEF.

83. management and procurement management) so that their use would be acceptable to donors in donor financed operations. Additionally, the PCU i s promoting the use o f focal points and other existing structures o f the ministry to carry out technical and administrative activities. Last but not least, the involvement o f local training institutes and the Diaspora provides additional solid guarantees for strengthening institutional capacities and ensuring long-term sustainability o f the project.

In the same vein, there i s a strong willingness to upgrade country systems (financial

84. on their commitments to provide adequate resources particularly in equipment and human resources, which are costly and out o f the scope o f this T A project. Many critical needs in terms o f vehicles, building, or staff recruitment are evidently out o f the purview o f this type o f project; hence, the government and donors must step up and fill this important gap.

Nevertheless, it i s imperative that the government and other donors also follow through

85. comprehensive reward mechanisms which will help maintain and develop capacity not only in MEF , but also in the, public administration in general. Constant dialogue between development partners and the Government i s critical to push through successful implementation o f civil service reform as well as building coalition with stakeholders and reformers on the political economy.

Furthermore, civil service reform must be completed to ensure adequate and

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E. Critical risks and possible controversial aspects

86. evaluation o f project’s outputs and outcomes; (ii) inadequate technological capabilities; (iii) inadequate implementation capacities; and (iv) project sequencing.

Specific risks inherent to the project include: (i) weak mechanisms for monitoring and

87. Mitigation measures include:

Risks

1. Possibility o f implementation delays due to the end o f political cycle.

2. Weak mechanisms for monitoring and evaluation o f project’s outputs and outcomes

3. Inadequate technological capabilities

4. Implementation capacity and sustainability. There i s a risk that the different implementing structures may not be staffed with competent people or utilize the rights tools and processes to ensure that project activities are carried out appropriately

sequencing. The project will follow a platform approach, which requires a great deal o f discipline and selectivity to ensure that expected outcomes are achieved.

5. Inadequate project

6. Overall risk rating

Risk Mitigation Measures

Key staffs o f the oversight and implementation structures of the project are staff o f MEF, and wil l not likely be affected by political events.

An M&E committee will be set up to monitor the results and performance of the project. I t w i l l comprise mainly the direct beneficiaries (members of the Steering Committee of the Project) but will be extended to other beneficiaries such as priority ministries (Education, Health, Agriculture, etc.) which ultimately are the main users o f the PFM system. An M&E specialist has been hired in the PCU and will develop an M&E plan and coordinate data collection, monitoring, and evaluation. Given the risks and complexities of developing integrated financial systems particularly in the low income countries with limited capacity such as Niger, the project will primarily seek to leverage and rationalize existing systems. The development of completely new systems will be very limited. Furthermore, there will be an expert (international consultant) who will be assigned to DFI to assist them with best practices in IT system development and procurement. Capacity w i l l be built gradually starting especially with managers and key personnel who will be working in the Project Coordination Unit. Further support will also be coming from consultants and Nigerien experts from the Diaspora. Acceleration of the civil service reform i s also very critical.

The project will support strong ownership and commitment by the government to stick with the platform approach and the results framework

Risk Rating

M

M

S

M

M

M

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F. Loadcredit conditions and covenants

88. The following effectiveness conditions apply: . The Recipient has established the Monitoring & Evaluation Committee and recruited the senior project accountant and the procurement specialist, in a manner satisfactory to IDA.

The Recipient has adopted the Project Manual o f Financial, Accounting and Administrative Procedures, in a manner satisfactory to IDA.

The Recipient’s accounting software has been updated to meet the requirements o f the Project, in a manner satisfactory to IDA.

89. In addition, the fol lowing dated covenant will apply: . Recruitment o f the project external auditor three months after grant effectiveness; . Adoption by November 30,2009 o f a Monitoring & Evaluation plan, in a manner satisfactory to IDA.

IV. APPRAISAL SUMMARY

A. Economic and financial analyses

90. country through enhancement o f strategic resource allocations, operational efficiency, and governance. The increase o f MEF’s capacity in effective and efficient resource mobilization and expenditure utilization will create great opportunities for a sustainable economic development in Niger.

The proposed IDA project will have a significant impact on the economic growth o f the

91. As budget allocations to sector ministries are aligned with the country’s strategic objectives, the probability o f spurring economic growth and achieving development objectives i s l ikely to increase. The project will ensure that the priority areas that have been identified as sources o f growth for Niger such as agriculture, education, health, mining, and infrastructure, receive adequate budget allocations. To this end, greater coordination and dialogue between MEF and sector ministries will be critical during budget preparation as wel l key inputs from all the stakeholders including the Parliament, the media, and the c iv i l society.

92. Considerable public resource savings i s l ikely to incur due the rationalization and streamlining o f budget processes that will be implemented through the project. Some o f the anticipated business processes re-engineering will touch on the expenditure and revenue chains, the intranet, rationalization and upgrade o f information systems. All these technical enhancements shall improve operational efficiency and result in great savings for the Nigerien taxpayer. Besides the technological benefits generated by the project, the impact o f human

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capital enhancement through training and institutional building will even be more durable and more dramatic.

93. Furthermore, as budget processes and outcomes become more transparent and available to a wider public, trust in the government and good governance will l ikely increase. This will in turn creates a good environment for private investors, which is a major objective for the government and the Bank, through i t s upcoming DPO o n growth, o f supporting the private sector development is as a key driver for economic growth in Niger. In fact, current domestic arrears and perception o f corruption in public sector are limiting the role o f private sector in the development process o f the country. A better performing and transparent public sector will give a healthy space for a growing private sector.

B. Technical

94. Systems upgrade and leveraging may present technical challenges due to existing network infrastructure, individual, and institutional capacities. The country would need to maintain the same type o f commitment and discipline used for the successful implementation o f the f i rs t version o f the automated expenditure chain, which covers al l phases o f the budget execution process Le. f i o m commitment to payment. This i s a major achievement in itself which is rare in many countries in Africa. A good sequencing o f activities will be critical for this important component.

95. and institutional capacity building i s also crucial. It i s important not to rush to provide resources or expertise which will not be used immediately, and rather try to take care o f what i s critically needed and necessary to provide strong building blocs for the future. Good revenue forecasting, credible budget allocation, rationalization o f internal controls and increased transparency through better reporting and information sharing are some o f the fundamental elements that need to be secured in the first stages o f project implementation.

Similarly, careful sequencing o f project activities related to individual, organizational,

C. Fiduciary

96. Accountability Review (PEMFAR), including a Country Financial Accountability Assessment (CFAA) was carried out for Niger in November 2003. The report identifies a number o f areas where additional steps need to be taken to strengthen existing institutions and/or accelerate the reform process. These include: (i) budget preparation and execution; (ii) computerized financial information systems; (iii) cash management; (iv) domestic debt management; and (v) internal and external controls. 97. The FM mission assessed the capacity o f the DAAF/PCU and found that the FM team i s not familiar with the Bank’s financial management procedures, including IFRs. A FM procedures manual and accounting software are not in place and therefore need to be developed on the basis o f implementation features o f the proposed project, and with regard to the Project’s goal o f supporting implementation o f Niger P F M reforms. These tools will be developed and funded under the Project Preparation Facility (PPF).A senior accountant will be recruited. A Financial Controller will intervene as an ex ante reviewer. The DAAF/PCU will manage a

Financial management: A Public Expenditure Management and Financial

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designated account opened in a commercial bank in Niamey. It will prepare annual financial statements to be audited by an independent firm acceptable to the Bank, will produce semester IFRs,' and will safeguard the Project assets and resources.

98. financial management arrangements o f the DAAF/PCU as the main B M A C (Budget Management and Accounting Center), are robust enough and comply with the minimum requirements under OP/BP 10.

99. 200 1-2002, and the principal recommendations were reflected in an agreed-upon Country Procurement Assessment Report (CPAR) which was officially published. The main result of these recommendations was the development o f a new Public Procurement Code, which was adopted in September 2002 and ratified by Law 2002-22, dated November 8,2002.

The F M assessment together with the suggested mitigation measures confirm that the

Procurement. An assessment o f the procurement system in Niger was conducted in

100. implement procurement actions revealed significant weaknesses as there i s no specific procurement unit. Therefore, the project will recruit a procurement specialist who will work under the supervision o f the Project Coordinator and DAAF Director. He/she wi l l be in charge of the day-to-day administration and management o f procurement for the project which will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 1 2006; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004, revised October 1 2006, and the provisions stipulated in the Financing Agreement.

An assessment o f the capacity o f the Ministry o f Economy and Finance (MEF) to

D. Social

101. N o staff redundancies are formally planned. Nevertheless, the rationalization and computerization o f processes may lead to staff redeployment and development o f new skil ls.

There i s no specific social risk which may result from the implementation o f this project.

E. Environment

102. The project activities will not include construction or utilization o f materials that present any environmental risk.

The project category i s C and warrants no particular environmental safeguard measure.

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F. Safeguard policies

Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OP/BP 4.01) [I [X 1 Natural Habitats (OP/BP 4.04) [I [ XI Pest Management (OP 4.09) [I [X 1 Physical Cultural Resources (OP/BP 4.1 1) [I [X 1 Involuntary Resettlement (OPBP 4.12) [I [ XI Indigenous Peoples (OP/BP 4.10) [I [X 1 Forests (OP/BP 4.36) 11 [ XI Safety o f Dams (OP/BP 4.37) [I [ XI Projects in Disputed Areas (OPBP 7.60)* [I [ XI Projects on International Waterways (OP/BP 7.50) [I [ XI

G. Policy Exceptions and Readiness

103. fulfillment o f the conditions o f effectiveness listed at section 111. F above

There i s no policy exception. The project i s ready for implementation, subject to the

* By supporting the proposedproject, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

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Annex 1: Country and Sector or Program Background

NIGER: Reform Management and Technical Assistance

1. entered, since the beginning o f this decade, into a new era o f economic stability and progress. Real GDP grew at an average 5.1 percent per year between 2001 and 2007, compared to 1.6 percent per year during the previous decade. In 2008, real GDP i s expected to grow by 6 percent, up from 3.3 percent in 2007. The current worldwide economic downturn i s likely to reduce the recent economic growth, not very significantly in the medium-term as big investments in the mining have already been committed or are underway. Improved political stability and better macroeconomic conditions are the main reasons for this remarkable achievement, although not sufficient yet to put the country on the track o f meeting the MDGs. Niger i s s t i l l one o f the poorest countries in the World. In 2007, it was ranked 174‘h out o f 177 countries on the UNDP Human Development Index and i t s gross domestic product (GDP) per capita was US$260.

After several decades o f volatile and short-lived economic growth, Niger seems to have

2. Political stability. Following the political unrest and social upheavals o f the nineties, Niger has enjoyed marked political stability and relative economic prosperity since the election o f 1999 which brought to power President Mamadou Tandja. H e was reelected for his second te rm in 2004 for five years. Furthermore, a major milestone toward political decentralization was reached in 2004 with the first ever local elections which took place across all the 265 communes in Niger. This was a big step forward as local mayors were democratically elected and local governments started to be empowered to provide basic services to citizens. Nonetheless, since 2007, the northern part o f the country has been the theater o f renewed violence between the Government and a number o f armed groups. A big test to the political stability enjoyed by the country so far during this decade wi l l be this year’s scheduled presidential elections. All in all, the current political stability has allowed the country to undertake with the help o f the donors sound economic reforms which has led to enhanced macro-fiscal outcomes.

3. Notwithstanding recurrent droughts which at times have had a drastic impact on the economy, the country has nonetheless shown resilience in achieving relatively good economic performance.

Macroeconomic and fiscal performance has markedly improved in recent years.

4. government revenues and the debt re l ie f from the Heavily Indebted Poor Countries Initiative (HIPC) in 2004 and the Multilateral Debt Relief Initiative (MDRI) in 2006. As a result, the country has been able to keep the basic budget deficit moderate, at 1.1 percent o f GDP on average in 2005-07, with no recourse to domestic financing2. Furthermore, external account balance has remained relatively low around 1 1-1 2 percent between 2007 and 2008, although it may temporarily increased in the next three years, due to sharp increase in FDI related to major investment project in mining and oil, before coming down to current levels.

Fiscal space has greatly increased from 2003, by about 5 percent o f GDP due to higher

5. The Niger’ second PRSP has set up an intermediate growth scenario target o f 5.7 percent annual growth rate for 2008-12. This growth rate target i s somehow comparable to the IMF new

IMF - Sixth Review o f PRGP, May 2008, p. 4

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PRGF program which considers an average annual GDP growth rate o f 5 percent for 2008-201 1. PRPS I1 i s articulated around seven pillars: (i) promotion o f strong, diversified, sustainable and job creating growth; (ii) ensuring equitable access to quality social services; (iii) slowing down o f population growth; (iv) reduction o f inequalities and strengthening o f social security for vulnerable groups; (v) infrastructure development; (vi) promotion o f good governance and capacity building; and (vii) effective implementation o f the PRSP. If protracted, the ongoing international financial crisis could potentially curtailed economic growth in medium-term; however, the impact will be limited in the next two years as the uranium sale price has already been negotiated. Additionally, other major exports- live animals, onions, and cowpeas - are sold in the sub-region where demand i s expected to be less affected3.

6. PEMFAR recommendations o f 2005 agreed between the government and donors for improving PFM in Niger, there have been some successes including: (i) adoption o f WAEMU budget nomenclature and i t s usage in the budget preparation and execution; (ii) elaboration and dissemination o f the budget organic law and government accounting and performance report; (iii) partial automation o f the expenditure chain; (iv) compliance in funding HIPC expenditure priorities; and (v) integration o f a substantial share o f externally financed expenditures in the chain o f expenditures. And in terms o f budget allocation to priority sectors, there have been some increase in public expenditures in the education, health and rural sectors, which rose from 7.8 and 8.1 percent o f GDP respectively in 2005 to 9 percent in 2007. However, there are s t i l l clearly considerable areas o f improvement in PFM and strategic budget allocations that need to be done.

Public financial management has relatively improved in recent years. Following the

7. Progress toward the MDGs i s predicated on effective and efficient utilization o f national resources and donor assistance funds. Without sufficient resource mobilization o f funds, optimal public investments, and cost-effective expenditure utilization, the government o f Niger won’t be in a good path to break the vicious circle o f poverty. To this end, the government shall ensure that increased national revenues notably from uranium and oil, are adequately used in agriculture, education, health, and other priority areas o f the PRSP. Therefore public financial management (PFM) reforms and good governance, which have been eagerly promoted recently by the government and development partners, must continue

Public Financial Management Issues

8. Niger has initiated several PFM reforms with the help o f major development partners, but success has been limited. The results o f the DPOs (Public Expenditure Adjustment Credits I and 11) provided by the Bank between 2000 and 2003, to shore up public expenditure management, were modest as budget allocations to priority sectors edged up slightly. Subsequently the Bank and the EU worked closely with GoN to finalize at the end o f 2004 a Public Expenditure Management and Financial Accountability Review (PEMFAR), which has since became the basis for the current PFM reform in Niger.

9. an action plan to address shortcomings in the areas o f budget preparation, execution, controls,

The PEMFAR made a comprehensive assessment o f the Niger PFM systems and laid out

World Bank - Brief on the impact o f the global economic slowdown on Niger, November 2008, p. 1

24

information systems, cash management, and domestic debt management. Specifically, the PEMFAR Action Plan formulated ten main recommendations: (i) strengthen l inks between budget allocations and government priorities defined in PRSP and sector strategies; (ii) identify alternative mechanisms for financing the Treasury (e.g. treasury bills) and the government budget; (iii) improve budget execution, reduce disparities between voted and executed budgets, protect priority expenditures; (iv) simplify and rationalize the chain o f expenditure; (v) prepare for a decentralization process through deconcentration; (vi) improve transparency and information systems, and prepare for delegation o f commitment authority to l ine ministries; (vii) gradually integrate externally-financed expenditures into the chain o f expenditures; (viii) modernize and restructure the Treasury; (ix) improve accounting practices to provide an accurate picture o f government financial and non-financial assets; and (x) strengthen and improve procedures for closing accounts and preparing final government accounts.

10. Budget preparation continues to be driven centrally by MEF with limited inputs from sector ministries and other key stakeholders. Usually, there i s a disconnect between sector budgets prepared by line ministries using sector MTEFs and budgets allocated by MEF. The national budget i s mainly incremental and done on an annually basis. Additionally, the time for budget discussions i s limited and not focused on sector strategic outcomes. As a result, there i s not enough ownership and accountability by line ministries on their budget outcomes.

1 1. Budget execution i s plagued by inefficient internal controls and delays in the availability o f funds. The automation o f the expenditure chain has helped to streamline some o f the internal controls which were causing major delays, but s t i l l this process o f automation i s partially done and needs to be extended. For instance, externally-fund investments are not fully incorporated in the expenditure chain and the exchange o f financial information back from Treasury to Budget directorate i s not seamless. Moreover, the limited o f financial controllers (only 13 people to control ministries and other governmental agencies) certainly has negative effects on the control and budget execution. The situation i s further exacerbated by difficulties in cash management from the unpredictability o f revenue inflows and lack o f timely information exchanges among the most critical departments in MEF (Tax, Customs, Budget, and Treasury). As a result o f these anomalies, the level o f budget execution remains low and the situation o f internal arrears continues to persist.

12. Transparency and accountability have not greatly improved as the budget process continues to be driven centrally by MEF and as only limited information on public finance management i s available to the public. This situation certainly does not help improve the investment climate which is, according to the World Bank 2009 Doing Business report, among the worst in the world (1 72nd out o f 18 1 countries).

Governance and Civil Service issues

13. 1 15 out o f 180 countries, at par with Malawi, Mauritania and Zambia. I t s ranking improved somewhat from 123 in 2007. Social accountability i s s t i l l perceived to be low as mechanisms o f checks and balances including civil society organizations, media, and other mechanisms strive to develop and become more effective.

According to the 2008 Transparency International’s perception index, Niger i s ranked

25

14. the P F M reform and other initiatives such as the Extractive Industry Transparency Initiative (EITI) to improve governance and enable conditions for sustainable and inclusive development. And the government seems to be willing to pursue the reforms because o f budget support and for legitimacy purposes. Niger has decided to become a member o f EITI, and establish the High Authority (WLAC) to combat corruption and promote good governance. Furthermore, there i s an ongoing study on the political economy o f mining in Niger which tries to determine the political drivers and governance issues along the value chain o f natural resources (from licensing to public expenditures), and what the country can do to maximize the benefits o f i t s natural resource revenues.

The donor community i s trying to respond to this challenge by building a coalition behind

15. Minister’s Office o f Organization and Methods (Bureau Organisation et Me‘thodes), and which was later fully adopted by the Ministry o f Civ i l Service and Work, hasn’t reached yet i t s objectives o f improving human resources management and performance o f the public sector. There are s t i l l significant issues related to the general c iv i l service statute, payroll management, incentives, and strategic planning, which continue to hinder efficiency, transparency, accountability, and performance in the public administration.

Furthermore, the process o f c iv i l service reform, initiated in the eighties in the Prime

0 Existence o f formal and informal statutes that operate in parallel with the general c iv i l service statute. Hence, the sheer number o f volunteers, auxiliaries, interns, and many other personnel who don’t have clear roles and responsibilities.

Lack o f description o f key functions o f various ministries and absence o f long- term strategic planning o f personnel in terms o f skills, competencies, etc.

0 No incentives to reward performance. The bonus system to reward performance i s not transparent and operates differently in various ministries.

16. service reform. The payrol l management and the incentive mechanisms are two particular areas where these two reforms intertwine and where it i s crucial to harmonize approaches and create synergies. Given the scope o f the proposed project which i s just l imited to MEF and hence doesn’t cover c iv i l service reform, it i s crucial the Bank and other development projects continue to engage with the Government through other interventions on a wider range o f public sector reform agenda.

Clearly, the success o f P F M reform in Niger largely depends on the progress o f the c iv i l

26

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies NIGER: Reform Management and Technical Assistance

Bank and Other Donors Support for PFM reform in Niger

1. The Bank and other donors have been very active in Niger since 2000 to provide support, mostly in form o f budgetary support and technical assistance, for the implementation o f PFM reform which is critical for transparency, good governance, and effective allocation o f resources for poverty alleviation.

2. interventions that they provide to different units o f MEF. But there i s a great need for better coordination and harmonization o f donors' interventions, which this project will provide a structure for. Most donors have expressed their desire to the Bank to use the institutional arrangements and implementation structure (PCU) set up by this project to harmonize and channel their assistance to MEF to support P F M reforms. So far, some o f the major interventions completed or planned by donors include:

A certain division o f labor, although informal, has emerged among donors in the type o f

I

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3.

The European Commission through its Development Fund (Fond Europe'en de De'veloppement ) has provided significant contribution with: (i) donation o f office equipment (computers, servers, software, etc.) to meet most o f MEF's needs; (ii) delivery o f generators; (iii) interconnection o f Customs services; (iv) planned delivery o f some vehicles for deconcentrated services (CSOs); (iv) elaboration o f the Information Systems roadmap (schema directeur); etc. In addition, EU has about $3.5 mi l l ion available until end o f 201 1 which are earmarked for PFM reform activities. French Embassy through its French Cooperation Unit (Coope'ration Frangaise) has provided assistance to MEF with the following: (i) long term technical assistance at DGI; (ii) assistance to DGI and DGD in the elaboration o f their strategies; (iii) training, internship, and long-term overseas studies to some MEF staff. U N D P i s providing assistance with the following: (i) training on MTEF and (ii) upgrade o f macroeconomic forecasts modeling tool (Ayerou). The African Development Bank (AfDB) has provided significant assistance in the establishment o f the computer room where credit administrators and financial controllers have direct access in the chain o f expenditures. The Germany Agency for Technical Cooperation (GTZ) has expressed their interest in providing assistance on MTEF. About US$3 mi l l ion could be used to support this intervention. IMF i s also ready to provide technical assistance on global MTEF. The U S Treasury has proposed a short-term technical assistance to DGB on inventory management. French Development Agency (Agence Frangaise de De'veloppement) has earmarked about US$1 mi l l ion for P F M reform related activities.

The DPOs financed by the Bank to support reforms in Niger covered many policy areas, but public finance reform has always occupied a central role in al l these operations as many

27

actions and resources were geared toward improving budget processes, transparency, and service delivery. Following i s a l i s t o f Bank-financed DPOs and their performance ratings.

FY Project 2001 Public Finance Recovery Credit 2002 2004 2005 2006 2007 2009 NE-Growth Policy Reform I 2009 NE-Reform Management & TA 2010 NE-Growth Policy Reform II

LKD Public Expenditure Adjustment Credit NE - PEAC II - (Pub.Exp.Adj.Cr.) NE-Pub Expend Reform Crdt (FY05) NE-Rural & Social Policy Reform I (FY06) NE-Rural & Social Policy DPL 2 (FY07)

Table 2: Table o f Bank-financed DPOs in Niger

IDA commitment ($US mllllon) Instrument

Adjustment Lending 35 Adjustment Lending 70 Adjustment Lending 65 Development Policy 40 Development Policy 50 Development Policy 50 Development Policy 40 TA Lending 10 Development Policy 50

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4. In general, the project development outcomes have been rather satisfactory, but as evidenced by the relative modest increase in public expenditures in priority areas and a weak progress toward MDGs, there i s s t i l l a great need to dramatically improve the implementation o f PFM reforms. Besides the financing o f lending projects, the Bank has also undertaken several AAA on various aspects related to economic growth, public expenditure, procurement, investment climate, trade, accounting, and auditing.

5. Other donors have also been quite active in the budgetary support, especially the EU, France, the AfDB, and IMF. The EU budgetary support was geared toward PFM, education, health, and road infrastructure. Both in 2007 and 2008, budget support allocated by EU to Niger amounted to 30 million Euros. France’s budgetary support totaled CFAF 4.7 billion (of which 1.640 billion were disbursed) and 10 billion (of which 5.6 were disbursed), respectively in 2006 and 2007. In 2008, the projected budget support from France was CFAF 3.9 billion. AfDB approved in 2005 a loan o f $26.3 million to finance Niger’s 5th Structural Adjustment Program (2005-2006) to improve PFM, promote good governance, strengthen decentralization, and enhance M&E o f poverty-reduction programs. IMF concluded the 2005-08 PRGF program with Niger and wi l l enter another three-year PRGF for SDR 23.03 million in 2009. The broad axes o f the three-year program wi l l be (i) a macroeconomic framework designed to fully absorb and spend aid and keep debt sustainable; (ii) better integration o f budgetary expenditures with the PRSP and the MTEFs and widening o f the tax base; and (iii) structural reforms to stimulate private investment and diversification o f the economy.

I

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Annex 3: Results Framework and Monitoring

NIGER: Reform Management and Technical Assistance

Results Framework

Project Development Objective

The project development objective is (9 Indicator 1 (increased credibilihi of to improve the credibility and reliability budget) of budgets allocated to budget managers in each Ministry; and (io the internal

controls of the use of said budgets.

Project Outcome Indicators

Ratio of arrears compared to total expenditure

Baseline (2009): > I O % Target: (2014): <5%

Indicator 2 (improved transparency) Delay in month of submission of financial statements to the Chamber o f Accounts and to the National Assembly

Loi de rsglement : 15 months Comptes de gestion : no submission

Target: (2014): Loi de rsglement : 9 months Comptes de gestion : 6 months

Baseline (2009):

I COMPONENT 1

Use of Outcome Information

This indicator w i l l capture how the project i s influencing the capacity o f the GoN to rein in the stock o f arrears which i s a critical indicator o f issues related to control o f budget and spending.

This indicator w i l l help track the improved ability o f the GoN to prepare and submit the Loi de reglement and the Treasury financial statement (Compte de Gestion) in a timely fashion.

Outcome 1-A. Deviation in aggregate expenditure quality o f budget forecasting Macro-fiscal projections are Baseline (2009): > I O % and execution performance strengthened Target: (2014): -3%

This indicator measures the quality o f revenue forecasting and performance o f the main

Indicator 4 Deviation in aggregate revenue for Tax and Customs Directorates

Baseline (2009): Tax:15% Customs: 15%

Target: (2014): Tax:5% Customs :5%

collectors o f revenue (i.e the GoN ability to effectively implement the budget allocation based upon the revenue -forecasting).

I I I

29

Outcome 1-B. Controls of non-salary expenditures are adequate.

Outcome 1-C. Effectiveness in collection of tax payments.

Indicator 5 Percentage of Exceptional Spending

3aseline (2009): 35% Exceptional Spending :

‘arget: (2014): I O % Exceptional procedures

Indicator 6 Frequency of complete accounts reconciliation between tad customs assessments, collections, arrears, records and receipts by Treasury.

3aseline (2009): Tax:> Iyear Customs : >9 months

“urget: (2014): Tm:2months Customs : 1 month COMPONENT 2

This indicator wi l l show if arrangements for the exercise o f control and stewardship in the use o f public funds are in place and operating. I t wi l l specifically help in tracking the volume o f expenditures using exceptional procedures despite streamlining in budget spending processes. This indicator wi l l show whether the revenue collection system i s working as intended following implementation o f the capacity building plans in Treasury, Tax and Customs Directorates.

LEVERAGE AND RATIONALIZE FINANCIAL MANAGEMENT INFORMATION SYSTEMS Intermediate Outcome Use of Outcome Intermediate Outcome Indicators Information

Outcome 2-A Budget and financial reports mandated by financial regulation are generated by set deadline.

Indicator 7 Timeliness of the issue of semi- annual budget reports

Baseline (2009): 8 weeks. Target: (2014): =< 6 weeks

Adequate records and information are produced, and disseminated to meet decision-making control, management, and reporting

30

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1. The PCU will bear the primary responsibility for project M&E. To that end, it will: (i) establish standard formats and guidelines for data collection and reporting; and (ii) organize training sessions for project partners for the use o f these tools and guidelines.

2. Furthermore, an M & E Committee will be established to monitor the results and performance of the project. I t will comprise mainly the direct beneficiaries (members of the Steering Committee o f the Project) but will be extended to other beneficiaries such as priority ministries (Education, Health, Agriculture, etc.), which ultimately are the main users o f the PFM system. The M&E Committee will review and validate the reports on performance indicators and recommend corrective action if necessary. The direct beneficiary will be responsible for providing relevant information and monitoring progress, using relevant performance indicators.

3. Monitoring of Outcome Indicators: an M& E system will be set within the PCU to keep tract and evaluate implementation progress o f the proposed IDA project within the context o f the broad P F M reform. Although improving PEFA indicators remains the hallmark o f success o f P F M reforms, the project’s M&E system will seek firstly to measure results that are closely associated with project activities. Hence, the first order o f indicators that the M&E system will look at shall include SMART indicators related to the quality, quantity, and cycle time o f the business processes. Ultimately, improvement o f business processes targeted by the project activities will have positive ripple effects on the PEFA indicators and service delivery.

4. Evaluation o f project performance: The Government, through the Steering Committee, may perform evaluations joint ly with the Bank team, supervision or implementation support missions at least twice a year. Missions will be based on the latest quarterly implementation and financial monitoring reports prepared and submitted by MEF.

5. A mid-term review will be conducted within 30 months o f grant agreement to assess progress and make recommendations to remedy any shortcoming noted in the carrying out o f the project in furtherance o f the objectives o f the project.

6. At Project closing, the Government, through the Steering Committee, will prepare a completion report documenting the Project’s achievements and results and drawing lessons for future interventions. The completion report will in part be based on the project’s technical, economic, social and environmental impact survey studies, as wel l as an assessment o f beneficiaries’ satisfaction.

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Annex 4: Detailed Project Description

NIGER: Reform Management and Technical Assistance

Strengthening capacity o f MEF will necessitate continuous improvement f personnel’s technical and managerial skills, rationalization and integration o f systems and processes, and establishment o f enabling institutional arrangements. Thus, the project will have three components: (i) capacity development, which will mainly focus on individual sk i l ls and processes; (ii) leverage and rationalize financial management information systems; and (iii) support to the project coordination unit. These components will be implemented in the context o f a platform sequence approach described below. The estimated IDA financing for this project i s US$ lO mi l l ion (equivalent)

2. platforms, but the focus o f this project will be o n the f i rst two platforms (budget credibility and financial accountability) due to the time horizon and limited budget o f the project. The challenge in designing the project was to be selective and address the most pressing needs, which entails covering f i rs t the basics o f P F M reforms, before moving to more complex reforms (e.g. performance management, IFMS, etc. )

Platform approach. Normally, full implementation o f P F M reforms requires four

ENABLES A BASIS FOR ACCOUNTABILITY AND ENSURE THAT RESOURCES ARE AVAILABLE TO CREDIT MANAGERS

Niaer MEF Reform Proiect -- Seauence of Platforms

ENABLES MORE ACCO FOR PERFORMANCE MANAGEMENT

ENABLES FOCUS ON WHAT IS DONE WITH MONEY AND PREVENTION OF FUNDS MISUSE

PLATFORM 3

Improved linkage of prlorltles and sewlce targets to budget planning and Implementation

Sy*srns towarallon Sy*srns towarallon

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Component 1: Capacity Development (US%3 million).

3. in MEF as the major constraint for a successful implementation o f P F M reform in Niger. To validate some o f these well-known facts, the Bank and government teams conducted a capacity needs assessment through meetings and discussions with staff across the different structures o f the ministry. And the unanimous decision was to focus capacity development efforts on the critical functions o f the ministry which have the greatest needs.

Many diagnostics and implementation completion reports have pinpointed l o w capacity

4. To this end, three sub-components have been selected: (i) strengthening capacity o f the key functions o f MEF, (ii) support to training institutes, and (iii) support to the diaspora program. T o ensure long-term capacity development, the project will support different types o f activities which will involve al l the three levels o f capacity development: individual, organizational, and institutional. At the individual level, main activities will cut across al l different components and will essentially involve ski l ls upgrade in modern public finance, information technology, leadership, and change management. At the organizational level, main activities will focus on the rationalization o f some processes and structures. And at the institutional level, the activities will look at power structure, relationships, and motivation.

Sub-component 1.1: Strengthening Capacity of Key Functions of MEF (US%1.5 million).

5. ministry such as macro-fiscal coordination and policy, medium-term revenues and expenditures forecast, program budgeting, tax collection, internal controls, cash management, and treasury reform. Following i s a quick description o f the main activities that will be carried out by the project to support these functions.

The project will support MEF to improve performance in the critical functions o f the

6. Improving macro and revenue forecasts to prepare credible multi-year planning. The merger o f the former Plan Ministry and Finance Ministry to form the current MEF didn’t lead to a marriage o f equals as init ial ly anticipated. The planning function has been severely weakened with many planners and economists who have since left, and MEF is essentially a ministry o f finance with a great focus on budget and treasury functions. All the core economic activities are very limited.

7. Many donors particularly the UNDP, European Union, and IMF are in the process o f providing support to MEF in macro-fiscal management and development o f a global medium term expenditure framework (MTEF). There seems to be strong commitment f rom both these donors and MEF to move in the area o f program budgeting. The Bank’s approach under this project aims first at strengthening the basics o f P F M systems which start with the establishment o f an excellent process for ensuing credible revenue forecasts, reliable multi-year budgets, and financial accountability.

8. program budgets to ensure coherence and support activities that focus on fundamentals. Some o f the main activities envisioned by the project include: (i) development o f macro-fiscal and

In this context, the Bank will coordinate with other donors around the MTEF and

36

sector policies; (ii) improvement o f fiscal framework and revenue forecasts; (iii) support in the development o f multi-year program budgets and strategic alignment; and (iv) improvement o f the budget calendar to meet existing regulation requirements and enhance budget discussions and negotiations with sector ministries. Training will play a big role in capacity enhancement as wel l as study visits to neighbouring countries to learn about their experience in the development o f macro-fiscal fiamework, strategic alignment, and program budgeting.

9. Activities that are envisioned at the individual level include: training o f staff in economic policies, macro-fiscal forecast, public investment management, budget programming, and information system. Furthermore, as will be the case for most o f senior staff o f MEF, additional training on leadership, change management, project management, communication, and information systems will also be provided as complement to pure technical training. Study tours in neighbouring countries are also envisioned to learn about their experience in MTEF and linkages between MTEF and PRSP.

10. among the lowest in the WAEMU zone. The ongoing D P L 3 on Growth, which underpins Bank’s budget support to Niger for 2009, seeks among other things to lower corporate tax in Niger from 35% to 30% in order to boost private sector participation from the informal sector.

Improving Revenue Collection. Revenue collection in Niger (1 1 % o f GDP in 2008) i s

1 1. To this end, the delivery o f fiscal services must definitely improve to be relevant and attractive to business people operating currently in the informal sector. This proposed TA project will complement the D P L by increasing the efficiency o f the tax and customs internal processes and improving the overall management o f DGI and DGD (Tax and Customs Revenue Authorities). And the end result shall be an increase in revenue mobilization which i s critical for the preparation o f a credible budget and funding o f programs.

12. Customs Revenue Authorities) shall lead to an increase in revenues. The fol lowing activities are envisioned: (i) formulation o f strategy and development plan for DGI and DGD; and (ii) training o f DGI and DGD staff o n various aspects o f fiscal revenues and operational management. Other core activities related to IT training for these revenue agencies will be supported under the IT upgrade Component 2 ,

Improving management and operational efficiency in the revenue agencies (Tax and

13. from annual line-item budgeting to program budgeting, it i s crucial to support the underlying budget architecture and the development o f adapted tools and procedures to support the decision-making process. So far, DGB’s staffing i s not specialized by sector type to guide line ministries to in the areas o f policy development, budget preparation, and monitoring. The project will help strengthen the reporting, analysis, and monitoring functions o f the DGB along the new budget management orientations.

Improving budget reporting and analysis. With the gradual shift o f the budget process

14. Procurement Management Reform following the WAEMU’s guidelines, the project will seek to strengthen the capacities o f newly established General Directorate o f Public Procurement (Direction Ge‘nerale du ContrGle des Marche‘s Publics). To this end, the project will provide

Improving procurement management. To ensure the implementation o f the

37

opportunities for training to DGCMP staff on public procurement management and statistical analysis. Additionally, the project will facilitate the development o f a procurement management information system within DGCMP to ensure high reliability o f procurement information and statistics.

15. intended purposes, it i s critical to have a credible internal audit unit in place and whose recommendations are strictly followed through by all the parties involved. The internal audit function plays a key role in the realization o f the platform 2 on financial accountability. To this end, the project wi l l support these activities: (i) development o f a strategy and action plan for the DGIF directorate; (ii) elaboration o f an internal audit handbook and procedures manual; (iii) support for the establishment o f a special status for financial inspectors to protect them against administrative retaliations and other vendettas, and (iv) training programs for financial controllers and inspectors; and (v) introduction o f the assets accounting.

Improving internal audit and financial oversight. To ensure that resources are used for

16. has been hindered by frequent unavailability o f funds from Treasury to l ine ministries. As a consequence, there i s an accumulation o f arrears which also means that government i s unable to provide services as initially planned. This situation i s due to inadequate revenue forecasts and cash flows mismanagement by Treasury, which continues to be beset by program reform delays. The nomination o f directors in the new Treasury set-up, which separates the normative and accounting functions per WAMEU directives, has not yet been formalized as the old structure based on a simple treasury function i s s t i l l maintained.

Improving cash management and supporting Treasury reform. Budget execution

17. treasury and public accounting functions through the following actions: (i) elaboration o f a strategy and action plan for DGTCP; (ii) technical assistance for the implementation o f the strategy and action plan; (iii) training o f the public accountants and treasury staff; (iv) drafting, adoption and internalization o f an instruction governing the relations between the centralizing accountants (ACCT-GTA and PGT) and non-centralized accountants; (v) update the 2003 chart o f accounts to the new entities envisaged by the reform; and (vi) upgrade o f the Treasury and the Accounting Information Systems (see more details under sub-component 2.2.).

In this context, the project seeks to support the on-going reform and improvement o f the

Sub-component 1.2: $upport to Local Training Institutions (U$$l.O million).

18. To help provide for a long-term and sustainable solution to the endemic issue o f capacity in Niger, the project will aim at strengthening capacity o f the National Institute o f Public Administration and Magistrate (Ecole Nationale d 'Administration et de la Magistrature, ENAM) and the Faculty o f Economics at the University o f Niamey, where most the MEF employees are trained.

19. suffer from neglect and are unable to fulfil their mission o f providing basic education and l i fe- long training to public servants. One o f the key reasons for this situation i s the lack o f adequate funding to these institutions by the government. Total annual budget appropriation by the

These training institutions, like the rest o f other public-funded institutions, seriously

38

government to ENAM amounts to CFA 20 million (about US$40,000 dollars), which can barely cover the administrative charges and the cost o f providing education for a growing student body o f about one thousand people.

20. To cope with this tremendous financial burdensome, ENAM i s looking beyond training o f only public servants, and i s increasingly enlisting students from private sector and other non- governmental institutions, to bring in other revenue streams. Furthermore other type o f revenue- enhancing services such as workshops and seminars are also being initiated. But these efforts are limited, and a deep reform o f these institutions i s required in order to effectively support long- term capacity development o f public sector in Niger.

21. participation by various stakeholders. Given the small budget o f this TA project, the approach in stead i s to focus on developing a growth strategy and a rationalization plan for ENAM as well as the School o f Economics at the University, which i s facing same type o f challenges.

Clearly, a deep reform o f these institutions demands considerable resources and a broad

22. Specifically, the project wi l l support these activities: (i) capacity need assessment, strategic update, and a development plan o f these two institutions; (ii) design o f a new curriculum and courses that will provide more hands-on experience to MEF trainees; (iii) limited hardware and software equipment; and (iv) some books and review materials.

23. carried by ENAM and the University, not just for economic reasons, but more importantly for the purpose o f sustainability and long-term capacity development o f these local institutes. It i s also expected that the Diaspora experts will be involved in training sessions at local institutes.

Most o f the training activities envisaged in this capacity development project will be

Sub-component 1.3: Support to the Diaspora program (US$0.5 million).

24. As a result o f current breakdown o f national training institutes, the availability o f competent local people i s a scarce commodity in Niger. This situation touches both the public and private sectors. At the same time, there i s a growing number o f Nigeriens living abroad who have been exposed to modern management techniques in various sectors and who could lend their expertise to the development o f their home country.

25. Leveraging the expertise o f Nigeriens from the diaspora i s a very effective way o f sustaining capacity development as has been proven in a few good cases in Niger, particularly at the National Institute o f Statistics. There are also success stories o f the diaspora program in some African countries. Through their direct participation in work program and staff mentoring, Diaspora experts wi l l share knowledge, thus, ensuring long-term sustainability o f capacity development.

26. for work contracting with the diaspora experts; (ii) identification o f potential candidates through embassy contacts and networks; (iii) ticket payment and ancillary fees to facilitate short term return. In the event the expert chooses to stay permanently, then MEF will need to decide on the

The project wi l l support the following activities: (i) formulation o f engagement policies

39

type o f incentives for that particular case. The project will seek to capitalize on the database and other network information already garnered by UNDP through i t s TOKTEN (the diaspora program) so as to target maximum number o f potential candidates.

Component 2: Leverage and Rationalize Financial Management Information Systems (US$5.0 million).

27. in the low income countries with limited capacity, the project will primarily seek to leverage and rationalize existing systems so as to provide support to the f irst two platforms o f the sequence approach (timeframe o f the project). The project will draw on the recommendations for systems upgrade (Tax, Customs, Treasury, and Budget) included in the ICT plan (sche'rna directeur) proposed by EU for the development o f an integrated financial management systems (IFMIS) at the MEF.

Given the risks and complexities o f developing integrated financial systems particularly

28. achieved by the local telecommunications provider (e.g. SONITEL), who has laid out a fiber- optic network around major government agencies in the capital, so as to start interconnecting disparate MEF information systems and deploy the intraneuinternet. As capacities and capabilities improve, then there will be scope to develop a full-fledged IFMIS at later stages o f the platform sequence

In the same vein, the project will capitalize on the improvement o f the network recently

29. Significant efficiency gains and cost savings will be achieved with further rationalization and strengthening o f the financial management information and communications systems. Some o f the expected benefits include: reduction o f waste and inefficiencies due to the automation o f business processes, greater transparency, improved efficiency and productivity.

30. in MEF and their main functionalities.

Following i s a quick overview o f the major financial management information systems

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Table 3: M a j o r Financial Management Information Systems in MEF

DOMAINS

ACCOUNTING AND TREASURY

PAYROLL

BUDGET

TAX

CUSTOMS

APPLICATIONS

DELPHI Client Server Microsoft 2003 Windows with Oracle 9 i database

In house application built on Microsoft 2000 Access Client Server with Oracle 8 i database

In house application built on Microsoft 2000 Access Client Server with Oracle 8 i database

3 Client Server applications built on PowerBuilder with Microsoft Windows 2000 and the Sybase database

Migration to Sydonia ++ since 2004

Currently this application i s deployed in the 12 most important Customs offices

FUNCTIONALITIES

Auxiliary Accounting, General Ledger; Asset M g t i s not included in the application

No connectivity between General Treasury in Niamey and regions.

Batch Files. Manual input o f data from other General Directorates This application i s housed in MEF (DIF), not at the Ministry o f C iv i l Service. A link exists between these two ministries to access the database.

Very basic application; regulatory and administrative texts are not included. Hence, manual verification o f the administrative data and delays in data update. Only the calculation o f salary and printing o f payroll slips are automated. Al l other functions are manual.

Very limited functionalities. The application i s primarily used to keep track o f existing commitments. Manual controls o f budget line, credit, liquidity, etc. All these controls could be automated.

The phase o f budget formulation i s not included in the application. No t a unifying application which integrates taxable base, recovery, and verification.

Difficulties in the deployment o f Sydonia ++, and issues o f limited functionalities as this new system heavily relies on informatics. Only the declaration module i s partially automated, other modules (transit, manifest, technical sampling, etc,) are not quite functional.

The deployment on each site requires a principal server and a back-up server. Economies may be achieved with the centralization o f servers.

The project will build on these existing systems to improve their functionalities and make them more interconnected. The development o f completely new systems will be very limited.

Sub-component 2.1: Intranethternet deployment (US$2.5 million).

3 1. relatively secure and reliable network thanks to SONITEL and recent interventions from some donors including the EU and the World Bank. The next step will be to expand to regions as the

Network extension. The project will f i rs t focus on the capital Niamey which has a

41

telecommunications providers increase their services across the country and the cost o f interconnectivity become more affordable. To that end, the project will negotiate the cost o f data transfer with providers, who could use any type o f cost effective technology (fiber optic, satellite, Wimax, etc.) to provide network coverage across the country. Thus, the project will not fund the development o f network per se, but will seek to use available services and negotiate payment o f monthly or annual fees. Other related network expenditures that will be supported by the project will be the acquisition o f the connecting and security equipment as wel l as networking training for maintenance staff,

32. Intranet. Currently, different parts o f the ministry do not have a unique platform for internal communication. With the establishment o f intranet which will firstly be built on the existing network infrastructure, business processes are l ikely to improve as more have direct access to same information about procedures, guidelines, and other important administrative documents. Transparency on budget allocation, use and monitoring o f resources, and dissemination o f results shall help improve financial accountability and budget credibility.

33. MEF i s very interested in developing internet capability which will later o n also help to support the diaspora initiative through establishment o f network contact with the outside world. In essence, the internet will have database applications and server, and the diaspora network will use same platform (database applications and web server) as an Extranet to reach out to the outside world. The diaspora news and database activity will involve mostly knowledge and content generation (distribution list, contacts database, communities o f interest, etc.) which will require the hiring o f skilled staff such as a webmaster and a communication specialist) to populate the MEF’s content related to diaspora, and to advertise for that new collaboration tool to the different targeted groups through embassies, universities, etc.

34. o f the Diaspora as it involved more resources and diverse types o f expertise which may not be currently available in the ministry. It i s doubtful that the private sector, which i s usually contracted out to provide content management, i s capable o f playing this role in Niger. The MEF will a im at developing capacities and capabilities in this critical area o f content management and strategic communication.

Content management for the whole MEF IntranetlExtranet is far greater crucial than that

35. enormous, part o f this project’s support is to complement MEF’s and other donors’ resources to facilitate the realization o f this crucial tool. A study visit in another Francophone country in the region which has implemented a good intranetlinternet system for MEF will also be funded.

As the resources required to deploy and effectively use the internet are obviously

Sub-component 2.2: Systems rationalization and,upgrade (US$2.0 million).

36. The current MEF information system platforms which include Budget, Customs, Taxes, and Treasury systems have significant deficiencies which need to be corrected in the short-term. Successful rationalization and upgrade o f these systems will require ownership and commitment o f adequate resources by the Government and other donors.

42

37. Upgrade of Budget information systems. Two separate applications (Expenditures and Payroll) are housed in the General Budget Directorate (DGB). These are very rudimentary systems which present significant shortcomings. The Expenditure application i s primarily used to keep track o f existing commitments. The Payroll application runs on a database which i s not directly linked to the ministry o f civil service, and doesn’t include regulatory and administrative texts. There are ongoing projects to upgrade these two systems which the project will support.

38. Significant improvements were recently made on the chain o f expenditures with the installation o f a centralized computer room where credit administrators come to enter their commitments and where the financial controllers input their ex-ante control visas. Further improvements are envisioned with the integration o f externally-funded investment expenditures (CCD) into the chain o f expenditures and interconnection with other satellite applications (DGCMP, etc.). Hopefully, these upgrades wi l l streamline spending processes and enhance internal controls, which should lead to a significant improvement in the budget execution and availability o f resources to spending units.

39. budgeting, i t i s crucial to have all the relevant tools and procedures in place. To this end, the project wi l l help put in place a multi-year budget preparation module and different dashboard instruments to monitor and report performance by sectors and programs.

Furthermore, as budget processes move toward the MTEF approach and program

40. with difficulties, to the standard Sydonia ++ platform, sponsored by the UN Conference on Trade and Development (UNCTAD) in many countries o f the world. Only one module (declaration) i s somewhat working, the rest (transit, sampling, manifest, etc.. .) are not operational. The project will support DGD to rationalize customs processes and implement other key modules. It won’t be question in this project to help DGD migrate to the new Sydonia World platform as i s presently recommended by UNCTAD. The technological risks for such a migration are very high and there are s t i l l many useful functionalities in Sydonia + + which have yet to be fully exploited. One significant outcome o f this upgrade will be the electronic transfer o f customs revenue data from DGD to other information systems in the ministry including Treasury, DGI, and DGB.

Upgrade of the Customs information systems. Currently the Customs are migrating,

41. Upgrade of the Taxes Authority information systems. The Tax Department (DGI) has three separate applications (professional taxation, big corporate taxation, and verification) which have rudimentary functionalities - just statistics o f the different services. DGI i s currently trying to develop a unifying system for tax management which will incorporate unifying processes for taxation, verification, and collection. The real contour o f this system, which i s likely to be expensive, has yet to be properly defined by DGI. Therefore, the project cannot at this stage make a firm commitment on the type o f activities it wi l l support in the development o f the DGI system. Instead, it i s only committing to support the process o f reviewing and studying different options o f system design that DGI i s going through. Eventually, the Bank, the EU, and other donors wi l l join forces to help establish a sound information system at the DGI.

42. Following the new requirements o f the Treasury reform which mandate the separation o f the

Upgrade of the cash management system and support of the Treasury reform.

43

Public Accounting function and the Treasury (cash management) function, the current Treasury system will have to undergo a systematic upgrade. The project will support the adaptation o f the current system to the new environment including the update o f the new government accounting chart and the new budgetary nomenclature. Furthermore, the project will support these crucial activities: (i) timely and accurate transfer o f revenue collection data f rom revenue agencies to Treasury; (ii) complete and timely exchange o f balance account information between Treasury and Budget Directorate; and (iii) staff training.

Sub-component 2.3: Office Equipment Upgrade (US$0.5 million).

43. Limited office equipment renovation. With the information systems upgrade and integration, there will be a great need for adequate office equipment. The project will help fund, joint ly with the government and other donors, network equipment, computers, printers, and communication tools.

44. substantial given the very important donation f rom the EU, which has covered or promised to cover most o f the equipment needs for the different units o f MEF.

The contribution f rom the project in the acquisition o f office equipment will not be

Component 3: Support to the Project Coordination Unit (US%1.5 million).

45. the project will be carried out by an internal unit inside MEF, not an external implementation unit. The PCU will be headed by a Coordinator who will supervise the work o f the two fiduciary staff (senior accountant and procurement specialist), the component managers, and the monitoring and evaluation specialist.

As a way o f ensuring project ownership and use o f country system, the coordination o f

46. programs and corresponding procurement plans, procedure manuals, and procurement plans; (ii) conduct o f fiduciary and monitoring activities; (iii) coordination o f the technical work related to the project components; (iv) and monitoring in project preparation and implementation. The project will provide funding for necessary office equipment, acquisition o f the accounting software, and payment o f the various activities related to project coordination and monitoring.

M a i n activities that will be carried out by PCU include: (i) development o f annual work

47. O f the US$1.5 mi l l ion allocated to the Project Coordination Unit, a contingency fund o f US$0.5 mi l l ion will be kept aside for funding o f unexpected activities which might be required in one o f the above mentioned subcomponents.

44

Annex 5: Project Costs

NIGER: Reform Management and Technical Assistance

Locaf Foreign Total US $million US $million US $million Project Cost By Component (including contingency)

1. Capacity Development 1.1. Strengthening Key Functions of MEF 1.2. Support to Local Training Institutes 1.3. Support to the Diaspora Program

2.1. Intranet/Internet Deployment 2.2. Systems Rationalization & Upgrade 2.3. OfJice Equipment Upgrade

2. Leverage & Upgrade o f Information Systems

3. Support to the Project Coordination Unit 4. Continrrencv Fund

0.9 0.6 0.3 0.0 2.0 1.1 0.5 0.4 0.8

2.1 0.9 0.7 0.5 3.0 1.4 1.5 0.1 0.2

3.0 1.5 1 .o 0.5 5.0 2.5 2.0 0.5 1.0

0.2 0.3 0.5

Project Preparation Facility 0.3 0.2 0.5 I Total Baseline Cost 3.9 5.6 9.5

1. Total IDA financing required for this project amounts to US$l 0 million, o f which half w i l l finance IT systems enhancement and about a third will go support individual and institutional capacity development.

2. More than 40 percent o f the financing will be used in the country and 0.5 percent o f the financing has been set aside for contingencies.

45

Annex 6: Implementation Arrangements

NIGER: Reform Management and Technical Assistance

1. Concertation) on P F M reforms to fo l low up on the recommendations o f PEMFAR and enable aid coordination among donors. I t s main objectives are to provide strategic directions for P F M reforms, facilitate aid coordination, and monitor progress. Although al l the PFM-related operations will have their specific implementation arrangements, in the case o f this project, they will be guided by and anchored in this dialogue framework, which i s open to development partners involved in the PFM reforms (e.g. EU, France, Germany, UNDP, etc.) and i s headed by the Minister o f the MEF. Currently the Commissioner in charge o f Economy at the MEF i s the focal point for the technical coordination o f this platform.

The government and donors have instituted a dialogue committee (Cadre de

2. the fol lowing institutional and implementation arrangements: (i) a steering committee; (ii) a Project Coordination Unit; (iii) a Monitoring & Evaluation Committee; (iv) focal points inside the MEF; and (v) Internal control and audit.

For the implementation o f the proposed project, the Bank and the Government agreed on

3. the project to ensure that the objectives are achieved. It will be chaired by the Minister or hidher representative and will be made up o f members f rom key directorates in the ministry, who happen to be the main beneficiaries o f the project. Steering committee members will have to validate and authorize yearly activity plan submitted by the Project Coordinator, reviewed in- year progress reports, and recommend corrective measures.

Steering Committee. This committee will provide strategic guidance and oversight o f

4. Program Coordination Unit. As mentioned above, the P C U will facilitate the preparation and implementation o f the project. The P C U will be headed by the Coordinator who will supervise the senior accountant, procurement specialist, assets accountant, M&E specialist, and c iv i l servants in charge o f different program components. The Coordinator assumes daily responsibility o f the project’s work program by working closely with al l the different managers and specialists reporting to him.

5. Furthermore, in keeping with the corporate requirement o f strengthening the use o f country systems, the head o f the MEF’s administrative and financial management unit (DAAF) will assume a direct control on the fiduciary staff working in the coordination unit and will share the responsibility o f approving payments with the Coordinator. Same shared responsibility will also apply in the authorization o f expenditure commitments.

6. results and performance o f the project. It will comprise mainly the direct beneficiaries (members o f the Steering Committee o f the Project) but will be extended to other beneficiaries such as priority ministries (Education, Health, Agriculture, etc.) which ultimately are the main users o f the P F M system. The M&E Committee will review and validate the reports on performance indicators and recommend corrective action if necessary. The direct beneficiary will be responsible for providing relevant information and monitoring progress, using relevant performance indicators. The P C U will in the end be responsible for consolidating data, analyzing

Monitoring & Evaluation Committee, This committee will be needed to monitor the

46

results, and disseminating the M&E reports approved by the Committee. To this end, the recipient will formally establish the M&E committee prior to grant effectiveness.

7. the Project Coordinator will be responsible for the procurement o f goods and services. Specifically, he will prepare the annual procurement plan, establish TORs, evaluate bids, and propose draft contracts to the Project Coordinator who will ultimately contact the TTL for final approval. Furthermore, he/she will provide on-the-job training to the team o f procurement staff in the MEF's General Directorate o f Public Procurement (Direction Ge'ne'rale du Contrdle des Marche's Publics) in a bid o f enhancing institutional capacity.

Procurement. A procurement specialist working in the P C U under the supervision of

8. Management of key components. Given the difficulty o f implementing complex components such as the integrated financial systems or capacity development, it is worthwhile to devolve the day-to-day management o f these components to front-line experts. The experts will be in charge o f preparing the TORs, work programs, detailed activity plans, and budget estimates related to specific components.

9. Focal points inside the MEF. The different experts in charge o f various project components will work with designated staff inside different units o f the MEF to carry out project activities. Unit managers and Component managers from P C U must work together to ensure that the timetable and desired outcomes o f each activity are achieved.

10. Financial Management. The DAAF/PIU will prepare Interim Un-Audited Financial Reports (IFRs). The segregated designated account will be managed by the DAAF/MEF. With regard to controls duties, the Project will be strengthened by the intervention o f the Financial Controller to set up an efficient and robust ex ante control arrangement. The DAAF/PIU will also be provided with a Financial Management (FM) procedures manual and an integrated computerized financial management system. The Director DAAF will be trained in the FM procedures manual. The Inspection General o f Finances (IGF) will maintain the right to intervene in the project fiduciary management. An audit firm will be selected to provide i t s professional opinion o n the annual financial statements o f the project and assess the internal controls in place. It is also expected that the Senior Accountant will also contribute to capacity building and knowledge transfer in favor o f the MEF.

47

INSTITUTIONAL ARRANGEMENTS FOR THE MEF REFORM PROGRAM

* Headed by the Yinh SG; Bene

Component 1 Manager ~~

or hidher Representative

48

Annex 7: Financial Management and Disbursement Arrangements

NIGER: Reform Management and Technical Assistance

Financial Management Assessment

1. A financial management assessment has been carried out during the pre-appraisal mission and completed during the appraisal mission in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective o f the assessment was to determine whether the Directorate o f Administration and Finance o f the Ministry o f Economy and Finance (DAAF/MEF) has acceptable financial management arrangements, which will ensure that: (1) the funds will be used only for the intended purposes and in an efficient manner; (2) the preparation o f accurate, reliable and timely periodic financial reports; and (3) the safeguarding o f the implementing entities’ assets. The DAAF/MEF will be the Budget Management and Accounting Center (BMAC) o f the Project, as it wil l be in charge o f the financial management o f al l the components and related activities. As the fiduciary staff will work under the authority o f the Project Coordinator through the P C U and will be technically supervised by the DAAFMEF, the latter will perform its duties and activities in close collaboration with the PCU.

2. The Bank and the Government agreed during the pre-appraisal mission on the option o f using the existing DAAF and the ex-ante control o f the MEF to strengthen the institutional capacity o f the latter, which i s in l ine with using country systems and consistent with Accra Agenda for Action. But, the project funds will not be channeled through the Public Financial Management (PFM) circuits because the financial management risk i s s t i l l rated substantial at the country level.

3. The DAAF/PCU has no experienced project financial management team. The present FM team i s not familiar with the Bank’s project financial management procedures, including Interim Financial Reports (IFRs) and related accounting software; i t s daily duties that are the same assigned to the similar teams o f other spending ministries mainly consist o f preparing expenditure commitments and certifying delivery o f services and goods. There i s need to recruit a Senior Accountant who will be able to strengthen the project financial management capacity o f the MEF. The development o f the project FM tools such as a FM manual and accounting software is also expected before effectiveness as part the activities requested to be funded under the Project Preparation Facility (PPF), The financial controller o f the MEF will be in charge o f ex-ante control and an external auditor will be recruited. Nevertheless, the DAAF/PCU will assign an assets accountant to the proposed project from i t s present FM staff as related profile and competence exist. Considering the existing FM arrangements with the suggested FM action plan (see related table), the overall residual control risk i s moderate.

Country Issues 4. A Public Expenditure Management and Financial Accountability Review (PEMFAR)4, including a CFAA was carried out for Niger in November 2003. The report identifies a number

Niger PEFAPFM Performance Measurement was carried out in September 2008 and the Bank i s preparing the PEMFAR 2.

49

o f areas where additional steps need to be taken to strengthen existing institutions and/or accelerate the reform ,process. These include: (i) budget preparation and execution; (ii) computerized financial information systems; (iii) cash management; (iv) internal debt management; and (v) internal and external controls.

Risk Rating

5. Improving Niger’s Public Finance Management requires a long-term reform program, which should be implemented in phases and requires the full support o f the Government and the donor community. The PEMFAR includes a table presenting a l ist o f essential reforms as key recommendations that should be implemented over the next three years and beyond to improve the structure o f public expenditures and strengthen fiduciary capacity.

Risk Mitigating Measures Incorporated into Project Design

6. For the time being, the overall country risk rating in Niger is substantial. The situation described above may have some effects on the project implementation because o f the fiduciary concerns mentioned above by the PEMFAR report.

S S

M

S

7. However, the Niger CPPR held on June 20-21, 2008, concluded that there were no major shortcomings in implementing internal control procedures in most o f the projects and on financial management statements; and, as o f today, the fiduciary compliance o f the World Bank portfolio in Niger indicates no overdue audit report.

In September/October 2006, the Government strengthened the internal controls o f the expenditure circuit by removing all the Financial Controllers and replaced them by new senior staff. In July 2007, a Financial Control Manual was developed. Guidelines and audit techniques for Court of Accounts are now documented. Actions are foreseen to produce reliable accounts on time. But the issues about accuracy o f accounting/financial information and fixed assets accounting remain. However, the implementation of the PFM reform program (PEMFAR) i s underway through execution o f DPOs, but senior staff effective constraints hamper it. The present project will be helpful. At the present time, the Ministry of Economy and Finance (MEF) i s overseeing one Bank-funded project that i s the Financial Sector Technical Assistance project. The main objective o f the present project i s to contribute to strengthening the capacity of the MEF in the areas of institutional aspects, human resources and promoting national expertise. These areas correspond to a certain number o f lines of the Niger PFM reform program (PEMFAR) o f which implementation will contribute a lot to address related shortcomings of the MEF. A permanent secretariat of implementation o f reforms will act as a Project Coordination Unit in which fiduciary arrangements will be set-up. For instance senior staff with good experience in project fiduciary management will be recruited. The financial controller of the MEF and an external auditor will intervene to insure sound financial management of the project.

Risk Assessment and Mitigation

Risk

Inherent risk Country level: Quality of PFM, standard o f financial accounting, reporting and auditing; and quality of accounting profession.

htity level: idependence of entity’s management nd appropriateness of organizational tructure.

roject level: ivolvement of many directorates o f the 4EF in the project implementation, and o previous experience of most of these irectorates in implementation of Bank nanced projects.

Over a I I Residual Risk rating

S S

M

M

50

:ontrol Risk: udgeting:

lack o f clear definition of budget

absence of authorization and preparation process

monitoring of budget variations with a view to making decisions

.ccounting delays in bookkeeping lack of adequate documented

software not customized on the policies and procedures

basis o f the Project's accounting needs

iternal Controls lack of quality and documentation of policies and procedures, including segregation o f duties Absence of internal audit function.

unds Flow cash flow constraints due to delayed fund flows affecting project implementation;

arrangements not functioning well

lack o f quality and documentation o f F M reporting responsibilities, form, content and periodicity o f IFRs and annual financial reports

production of IFRs and annual financial reports

complicated fund flow

inancial Reporting

delays in preparation and

.uditing inadequate institutional arrangements in place for the appointment of external auditors inadequate TORs for the Project limited capacity o f national external auditors

lverall FM Risk Rating S

To permit adherence to a fixed calendar o f the budget preparation process and good practices in producing IFRs, the F M team will be provided with the F M procedures manual including a budget classification customized in accounting software. The senior accountant will be involved in budget preparation, execution and will be in charge of related accounting. The financial controller's duties will include budget monitoring. Documented procedures and software in the area of accounting will be developed for the proposed Project and a senior accountant will recruited.

The fiduciary team of the PCU will be composed of the Coordinator, the Director o f DAAFNEF, the Senior Accountant, the Assets Accountant and the Procurement Specialist. The Senior Accountant and the Procurement Specialist w i l l be recruited on the basis of their experience in the Bank FM project procedures and practices. The Financial Controller of the MEF will be in charge of ex ante control of the project. This FM staffing configuration based on an adequate segregation of duties meets the proposed Project needs. The FM procedures manual and accounting software will be developed on the basis of implementation features of the proposed Project. The Financial Controller o f the MEF and the Director of DAAF will be trained to be familiar with FM procedures o f Bank- financed projects. Her interventions will help strengthen the proposed Project's control capacity. A Segregated Designated Account will be opened in a commercial bank and will be managed by the PCU. Disbursement procedures will be documented in the FM manual and wi l l result from transactions method. In line with the Financing Parameters of Niger, categories o f expenditures will be 100% financed with taxes included. Semester basis IFRs will be provided by the Senior Accountant in a timely manner under the responsibility of the DAAFPCU. The annual financial statements of the project will be produced and audited on time.

Some internal bodies of the ONECCA (Ordre National des Experts Comptables et des Comptables Agre'ks) are not functional and the CNC (Conseil National de Comptabilite') i s not yet created. However, the ROSC A&A action plan will address these issues. The Court of Accounts i s being strengthened through a series of RSRCs and PFM reforms, and according to its mandate, has the right to audit the project at any time. The Bank has no previous experience in audit preparation for Bank-financed projects. However, the audit TORs will be developed to take into account the project needs and a private audit firm will then be appointed. The functioning of all these FM arrangements will be followed up during supervision missions.

M

M

M

M

M

S

M

Strength

5 1

8. The DAAFMEF has good assets accountants and will assign one o f them to the proposed project.

Weaknesses and Action Plan

Significant Weaknesses

The Directorate /DAAF and the Financial Controller o f the MEF have no experience in procedures and practices of the Bank- funded projects.

Actions

(i) Recruitment o f a Senior Project Accountant and a Procurement Specialist, (ii) training on the FM manual o f the DirectodDAAF and Financial Controller o f the MEF.

Responsible body

PCU / DAAF

Deadline

Before effectiveness

Financial Management Institutional Arrangements

9. Under the Steering Committee's guidance and responsibility, the PCU/DAAF will be responsible for financial management and for preparing audits o f accounts, systems and procedures acceptable to the Bank. Using i ts delegation o f authority, the Direction Ge'ne'rale des Financements (DGF) will authorize withdrawals from the Project loan account located in Washington in the name and on behalf o f the Minister o f Economy and Finance who i s the main authorizer (ordonnateur) at the country level. The Project Coordinator will be the authorizer o f expenditures at the project level. He will approve related commitment documents and warrants. Jointly with the DAAF Director, he will authorize cash transactions o f the segregated designated account. The project flow o f funds and information do not get mixed up with those o f the public expenditure funds by channeling them through the Public Financial Management (PFM) system, but the annual allocation o f the Project's successive annual budget activity plans should be mentioned in the Niger Annual Budget (Loi de Finances). Consistent with Accra Agenda for Action, the reason for not using PFM circuits for the project funds i s the risk rated substantial at the country level. The DAAF/PCU will keep records o f all project-related expenditures following generally accepted accounting principles. The annual financial statements prepared by the DAAF/PCU should be audited annually, following international auditing standards, by independent auditors acceptable to the Bank. The DAAFPCU will also prepare Interim unaudited Financial Reports (IFRs).

Staffing and Training: The Project Fiduciary Team will be composed o f the Coordinator, the DirectodDAAF, the Senior Accountant, the Assets Accountant, the Procurement Specialist, and the support staff. The Financial Controller o f the MEF will be in charge o f ex ante control.

52

Budgeting

10. The budget preparation process and i t s monitoring will be clearly defined and documented in the FM procedures manual. The subsequent Annual Work Programs and Budgets (AWPBs) will be developed by the DAAF/PCU, in close collaboration with the various public bodies o f the MEF; they will be submitted to the World Bank for comments and acceptance by December 1 st o f each calendar year.

% Accounting Policies and Procedures

11. Accounting standards: Accounting standards to be applied by the DAAF/PCU wi l l be very similar to the International Public Sector Accounting Standards (IPSAS) issued by the Public Sector Committee o f the International Federation o f Accountants (IFAC-PSC). Any significant difference will be adequately disclosed and explained in the notes o f the financial statements. The DAAF will prepare the Project’s financial statements for auditing. Project accounting policies and procedures as required by the Project will be documented in the F M procedures manual.

12. Accounting Software: A computerized financial management system will be put in place at the DAAF/PCU. The DirectodDAAF will use a satisfactory and sound accounting package capable o f producing all the accounting and financial data required, including financial statements, bank reconciliation statements, and all financial reports, such as the Interim unaudited Financial Reports (IFRs). The updated accounting software should integrate the components o f activities and categories o f expenditures o f the Project. An agreement wi l l be reached on the format o f IFRs during the negotiations. The accounting software will be multi- site, multi-currency and multi-proj ect, and will include the following modules to be integrated: budgeting, general accounting, cost accounting, reporting, monitoring and evaluation, fixed assets management, preparation o f withdrawal applications, and tracking o f disbursements by donors. The books o f accounts wi l l also be maintained electronically in this software. A consultant will be appointed to develop the budget classification, the chart o f cost accounts and the geographic nomenclature. The consultant would also provide related assistance to the Financial Controller and the Director/ DAAF o f the MEF.

Internal auditing

13. The Inspection General Inspection Finance o f the MEF will retain the right to carry out any financial review at the level o f the DAAF/PCU. It would carry out reviews o f transactions from time to time, based on their mandate for Public Sector Control Institutions. Their duties and accountabilities wi l l be documented and filed at the DAAF/PCU level. This i s in line with the Bank’s approach for mitigating risks o f fraud and corruption.

Internal control

14. The FM procedures manual o f the project will be developed in conjunction with an appropriate customization o f existing accounting software, on the basis o f the project implementation features. This action aims to cover the project’s needs, documenting the detailed

53

FM procedures, and ensuring a robust internal control arrangement, including procurement duties and activities assigned to the DAAFPCU. The ex ante control will be in place and related TORS will be documented and filed at the Permanent Secretariat level; the holder (Financial Controller) will be trained in the Bank’s disbursement and FM procedures.

Funds Flow and Disbursement Arrangements 15. Disbursement Arrangements: The DAAFPCU will be responsible for the implementation o f the AWPB in conformity with the Financing Agreement. The DAAF/PCU will claim disbursements by sending the withdrawals and direct payment applications to the Bank through the payment authorization of the Ministry o f Economy and Finance of Niger. A designated account will be opened in a commercial bank in Niamey and will be managed by the DAAF/PCU. Funds from the account will be used to finance eligible expenditures such as payments to suppliers and advances to public central bodies. Detailed procedures of these transfers o f funds will be documented in the FM procedures manual.

16. Disbursement Methods: Disbursements will be transaction based and will include the Designated Account Advance, Direct Payment and Special Commitment methods. It i s expected to shift to semester IFR-based disbursement as soon as the Bank i s satisfied with the accounting and reporting capacity o f the DAAF/PCU. The procedures will be detailed in the FM procedures manual.

17. Minimum Value of Applications: The minimum value o f withdrawal applications submitted under the Grant for Direct Payments and Special Commitments will be documented in the Letter o f Disbursement o f the Project.

18. Reporting on Use of Loan Proceeds: Disbursements for al l expenditures should be made against full documentation except for some contracts for goods, consulting firms, individual consultants as well as operating costs which will be claimed on the basis o f Statement o f Expenditures (SOEs) without supporting documentation. Training will also be claimed on the basis o f statement o f expenditures (SOEs). Values of these contracts will be documented in the Letter o f Disbursement o f the Project. All supporting documentation for SOEs will be retained at the DAAF/PCU. They will be kept readily accessible for systematic internal ex-post reviews on request. The supporting documentation will also be subject to periodic review by the Bank teams during supervision missions as well as by the external auditors.

19. The DAAFPCU will submit a bank reconciliation statement o f the designated account . together with the withdrawal applications on a monthly basis. Disbursements will be made against full documentation for direct payments and reimbursements.

20. Designated Account: A designated account will be managed by the DAAF/PCU. It will be located in a commercial bank. The currency o f the designated account will be the CFA Franc (XOF). The authorized ceiling for the designated account for the Grant will be documented in the Letter o f disbursement o f the project. The advance should give the project sufficient liquidity for an average o f four months o f expenditures.

54

21. Allocation of the proceeds:

Categories Amount o f the financing allocated (expressed in USD

million) 3

5

(1) Component 1 : Capacity

(2) Component 2: Leverage and

(3) Component 3: Support to the

Development

rationalize Financial Management Information Systems

1.5 Project Coordination Unit (4) Refund o f Preparation 0.5 Advance

TOTAL AMOUNT 10

Percentage o f Expenditures to be financed, including taxes

100%

100%

100%

Amount payable pursuant to Section 2.07 o f the General Conditions

Figure 1: MEFTA Flow of funds:

Segff egated Designated Amunt ff off Wodd Bank Pff o@3eds

a commercial bank and

.* ***

. **

Public bodies of MOF

Suppliers In

LePend: designated account advance reconstitution Payments to suppliers (including direct payments from Financing Account) - I - I Advances to Public central and regional bodies. ..............

55

Financial Reporting and Monitoring 22. The DAAF/PCU will be responsible for the overall reporting o f the Project. It wi l l produce Interim unaudited Financial Reports (IFRs) on a semester basis, and the annual financial statements requested. The updated accounting software (multi-sites, multi-projects and multi- currency) will be installed at the DAAF/PCU level and will provide these financial reports. For the time being after effectiveness, IFRs wi l l not be used in support o f disbursements.

23. The DAAF Director will make sure that, on a semester basis, the IFRs are produced and transmitted to IDA no later than 45 days after the end o f the semester. The f i rs t IFR shall be furnished to the World Bank not later than 45 days after the end o f the semester in which the first disbursement occurs, and shall cover the period from the incurrence o f the first expenditure under the project through the end o f that semester.

24. The reporting format and procedures will be documented in the updated FM Procedures Manual. IFRs will be composed o f financial reports such as: (i) sources and uses o f funds by funding source and nature o f expenditures; and (ii) uses o f funds by components/activities o f the Project.

25. Semester basis IFRs and annual financial statements will cover all activities financed through the Project. The annual financial statements will be subject to external audit as described below. The DAAF/PCU will also be required to produce, not later than June 30 o f the following recipient fiscal year, audited annual financial statements.

External audit 26. External auditors from a private firm in accordance with international auditing standards acceptable to IDA wi l l conduct an annual audit o f the financial statements prepared by the DAAF/PCU and will review the internal control system running in the DAAF/PCU.

Audit Report

External auditors issue their opinion on the Financial Statements (annual financial statements, designated

account statements and SOEs) prepared by the DAAF. Letter to Management prepared by the external auditors

and containing findings and recommendations on internal controls at the level o f the DAAFRCU.

Due Date Submitted within six months after the

end o f each financial year.

Submitted within six months after the end o f each financial year.

56

Action Plan

and audit TORS Recruitment o f a Senior Accountant and training o f the DirectorDAAF and the Financial Controller on FM manual. Development o f FM manual and accounting software

Appointment o f External Auditor

I Negotiations Before I Process started I P C U M E F Effectiveness before Board’s

approval I

Before First draft and P C U N E F Effectiveness arrangements

submitted before I Board’s approval

Three months after 1 Selection process I P C U M E F Effectiveness started immediately

after Negotiations

Financing conditions and legal covenants

Dated covenant

0 The dated covenant i s as follows: no later than 3 months after Effectiveness the Recipient has appointed an external independent auditor on the basis o f the Terms o f Reference, and with qualification and experience satisfactory to the Association.

Legal Covenants

27. The following points o f the financial covenants are stated in the Financing Agreement: The Borrower i s to: (i) be compliant with all the rules and procedures required for withdrawals from the Designated Account o f Project; (ii) maintain the Project financial management system including records, accounts and preparation o f related financial statements in accordance with accounting standards acceptable to the Bank and to be audited; and (iii) prepare and hrnish to the Bank Interim unaudited Financial Reports (IFRs).

Supervision plan

28. Given the moderate level of the overall FM residual risk, the proposed project would require comprehensive financial management supervision once a year. However, intensity o f supervision could be reassessed upon the evolution o f the rating for the overall control risk. Financial management supervision will be carried out by the World Bank’s Financial Management Specialist (FMS) who will carry out the following tasks:

Conduct a financial management supervision before effectiveness/disbursement; Review the financial management aspects o f the IFR; Review the Audit Reports and Management Letters from the external auditors and follow--up on material accountability issues by engaging with the Task Team Leader,

0

0

57

Clients, and/or Auditors; the quality o f the audit (internal and external) also i s to be monitored closely to ensure that it covers all relevant aspects and provides enough confidence on the appropriate use o f funds by recipients; Provide assistance to build or maintain appropriate financial management capacity; 0

0 Reviews o f controls; and 0 Reviews o f transactions.

Conclusion

29. The FM assessment together with the suggested mitigation measures confirm that the financial management arrangements. o f the DAAF/PCU as the main BMAC (Budget Management and Accounting Center), are robust enough and comply with the minimum requirements under OP/BP 10.02; they are adequate to provide, with reasonable assurance, accurate and timely information on the status o f the project as required by IDA. The overall FM risk i s rated moderate for the Project, while the risk rating for the country i s substantial

58

Annex 8: Procurement Arrangements NIGER: Reform Management and Technical Assistance

A. General 1. Procurement for the proposed Project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October lSt, 2006; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers'' dated May 2004, revised October lSt, 2006, and the provisions stipulated in the Financing Agreement. The various items under various expenditure categories are described in general below. For each contract to be financed by the Grant, the various procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed upon between the Recipient and IDA in the Procurement Plan.

2. Procurement in the context o f the country. An assessment o f the procurement system in Niger was conducted in 2001-2002, and the principal recommendations were reflected in an agreed-upon Country Procurement Assessment Report (CPAR) which was officially published. The main result o f these recommendations was the development o f a new Public Procurement Code, which was adopted in September 2002 and ratified by Law 2002-22, dated November 8, 2002. Niger strictly followed the WAEMU guidelines by clearly separating the control functions and the regulation process. Thus, the Public Procurement Regulatory Authority (Autorite' de Re'gulation des Marche's Publics-ARMP) was created under the same legislation, while i t s composition, organization and operation were defined by Decree NO190 PRN/PEF dated July 6, 2004. An ordinance to modify the National Code by creating the Central Directorate for Public Procurement (Direction Ge'ne'rale du ContrGle des Marche's Publics) has been taken by the Government but has not yet been approved by the Parliament. A decree on composition, organization and functioning has been passed to make i t s application possible in the meantime. This decree will make use o f financial controllers in line Ministries to conduct prior reviews on behalf o f DGCMP. The remaining concerns in the procurement context are: i) the procurement units in l ine ministries are s t i l l in charge o f procurement transactions; ii) none o f the financial controllers have been strengthened to handle procurement controls; and iii) there are s t i l l national procurement clauses which are partially or entirely inconsistent with World Bank guidelines.

3. A Procurement Plan defining the procurement and selection methods and the requirement o f IDA prior review has been elaborated and will be updated at least once per year or as necessary to reflect the real situation for the project implementation, and the improvements o f the institutional capacities building

4. Procurement o f Goods: Goods procured under this project would include but are not limited to the acquisition o f computer hardware, software, office supplies, and vehicles. Procurement wi l l be done using IDA'S SBD for all ICB and National SBD agreed with or satisfactory to IDA. The procurement plan indicates the methods and cases where IDA review and no objection are needed

59

5. Selection of consultants: consultants selected under the project include recruitment o f consultants for training, financial audits, and other studies. Short l is ts o f consultants for services estimated to cost less than US$ 200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f Paragraph 2.7 o f the Consultant Guidelines. The procurement plan indicates the selection methods and all cases where IDA’S review and no objection are needed.

6. Training, workshops, study tours, and conferences: the training (including training material and support), workshops, conference attendance and study tours, will be carried out on the basis o f approved annual training plans. Annual training plans should include details on categories o f training, number o f trainees, duration o f training sessions, timing and estimated cost, and will be submitted to IDA for review and approval prior to initiating the training process. The appropriate methods o f selection will be derived from the detailed schedule.

7. Operating Costs: operating costs financed by the project are incremental expenses, including office supplies, costs associated with the operating and maintaining project’s office equipment, communications, rental expenses and uti l i t ies expenses, consumables, transportation and accommodation, per diem, supervision costs and salaries o f support staff. They will be procured using the procurement procedures specified in the Project Financial, Accounting and Administrative Manual (PFAAM) acceptable to IDA.

8. Procurement procedures and standard bidding documents (SBDs) to be used for each procurement method, as well as model contracts for goods procured and consultants services selected, are presented in the PFAAM.

B. Assessment o f the agency’s capacity to implement procurement

9. Directorate( DAAF) in the Ministry o f Finance and Economy

Procurement activities will be managed by The financial and Resources Management

10. An assessment o f the capacity o f the Ministry o f Economy and Finance (MEF) to implement procurement actions for the project has been carried out by IDA in November 2008. The assessment reviewed the organizational structure for implementing the project.

11. procurement unit exists.

The assessment revealed a weak capacity o f DAAF in procurement aspects; no specific

12. A procurement specialist will be recruited on a competitive basis and located at the level DAAF and the Project Coordination Unit (PCU). H i s k e r role will consist of: (i) controlling the quality and application o f the rules; (ii) advising decision makers on procurement matters; and (iii) and developing and supporting a capacity building program.

13. The procurement specialist wi l l work under the responsibility o f the Director o f DAAF and the Project Coordinator. DAAF/PCU i s responsible for ensuring quality control, including the utilization o f proper standard documents and monitoring o f procurement related delays.

60

14. The key issues and risks concerning procurement for implementation o f the project include: (i) possible confusion between the national procurement rules and IDA procedures by some executing agencies; (ii) the procurement process control and approval by staff not experienced in the IDA procedures, which may bring a risk o f rigidity in the interpretation o f the texts; and (iii) slowness in the examination o f the procurement decisions by DGCMP and their approval by the proper authority.

1

Ref. No. 1

2

15. The corrective measures which have been agreed upon are: (i) elaboration o f a Procedures Manual clarifying the role o f each team member involved in the procurement process, and the review and approval system; (ii) organization o f training sessions and workshops for the beneficiaries; (iii) non-application o f the notified l i s t o f clauses o f the National Procurement Code which are not partially or entirely consistent with the World Bank’s procurement guidelines. This l i s t i s attached to this annex.

2 3 4 5 6 7 8 9 Review Expected

Contract Estimated Procurement Preference (Prior Opening Description Cost (US%) Method P-Q (yesho) Post) Date Comments Statiscal 91 000 NCB N o N o Prior 02/10/2010 software and database for DGCMP, CCE and DIF Server 115 050 NCB N O N o Prior 03/10/20 1 0

Domestic by I D A Bid

16. The overall project risk for procurement i s substantial.

C. Procurement plan

17. The Recipient, during appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Recipient and IDA and i s available at the MEF. It w i l l also be available in the project’s database and on IDA’S external website. The Procurement Plan wi l l be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

D. Frequency o f procurement supervision

18. In addition to the prior review supervision to be carried out from IDA offices, the capacity assessment o f the PCU has recommended two supervision missions in the field and a yearly post procurement review.

E. Details o f the Procurement Arrangements Involving International Competition

19. Goods

(a) L i s t o f contract packages to be procured following ICB, NCB and direct contracting:

61

1 2 equipment and including cables

3 vehicles

4 photocopy Computer and

equipment Telecom

ons 5 interconnaecti

(*) direct contracting with the unique provider in regions, SONITEL.

3 4 5 6 7 8 9

03/25/2010

03/25/2010

Post 60 000 NCB No No

73450 NCB No No Post

190 000 DC (*) No No prior 03/10/2010

(b) Contracts for goods estimated to cost respectively US$300,000 and above per contract; the first two contracts for goods estimated to cost less than US$300,000 procured on the basis o f NCB; and each contract for works, goods, or non consulting services procured on the basis o f Direct Contracting will be subject to prior review by IDA.

c) All amendments o f contracts raising the init ial contract value by more than 15 percent o f original amount or above the prior review thresholds will be subject to prior review by the Bank as determined mandatory in Paragraphs 2 and 3 o f Annex 1 o f the Bank’s Consultant Guidelines.

d) Post Review: for each contract for goods not submitted to prior review, the procurement documents will be submitted to IDA post review in accordance with the provisions o f Paragraph 4 o f Annex 1 o f the Bank’s procurement Guidelines. The post review will be based on a ratio o f at least 1 to 5 contracts.

20. Particular Methods o f Procurement of Goods

1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods shall be procured under contracts awarded o n the basis o f International Competitive Bidding.

2. Other Methods o f Procurement of Goods. The fol lowing table specifies the methods o f procurement, other than International Competitive Bidding, which may be used for goods. The Procurement Plan shall specify the circumstances under which such methods may be used:

Other Procurement Methods (a) Limited International Bidding (b) National Competitive Bidding (*) (c) Shopping Procedures (d) Pirect contracting

62

(*) The procedures to be followed for National Competitive Bidding shall be those set forth in Law no. 2002-22 o f November 8, 2002, for the ratification Ordinance no. 2002-007 o f September 18, 2002 constituting the Procurement Code subject, however, to the modifications described in the following paragraphs required for compliance with the Procurement Guidelines.

1/ Eligibility o f bidders i s defined in Section I o f the Procurement Guidelines; accordingly, no bidder or potential bidder may be declared ineligible bid for a contract financed by the Association, for reasons other than the ones listed in Section I o f the Procurement Guidelines.

21 N o restrictions based on nationality o f bidders or origin o f goods shall apply; therefore, foreign bidders shall be allowed to participate in National Competitive Bidding without restriction and shall not be subject to any unjustified requirement which will affect their ability to bid such as, but not limited to, the proof that they have satisfied tax obligations to the Recipient, while able to prove that they have satisfied tax obligations in their home country.

3/ N o prior registration, licensing or agreement may be required as a condition to participate in bidding procedures.

41 No domestic preference shall be given for domestic bidders and for domestically manufactured goods.

5/ The following actions shall be subject to Prior Review by the Association: (i) the decision to divide a contract for works, goods or non consultants’ services into several separate contracts; and (ii) the review o f the short l i s t o f bidders in case o f Limited Competitive Bidding.

6/ Each bidding document and contract financed from the proceeds o f the Financing shall provide that the suppliers, contractors and subcontractors shall permit the Association, at i t s request, to inspect their accounts and records relating to the bid submission and performance o f their contract, and to have said accounts and records audited by an auditor appointed by the Association. The deliberate and material violation by the supplier, contractor or subcontractor o f said provision may amount to obstructive practice

63

2 1. Consulting Services

4

Selection Method QCBS

(a) List o f consulting assignments with short-list o f international f i rms.

5 6 Expected

Reviewby Proposals IDA(Prior / Submission Post) Date

Prior 04/27/20 10

Estimated Description of

2

3

4

No. I Assignment I (us$ooo) 1 1 Strategic plan for I460000

DGB, DGD, DGTCP, ENAM, FSEJ Development and 402500 documentation for DGCT

documentation for payroll

documentation for tax (DGI)

Development and 337 000

Development and 475 000

QCBS

QCBS

QCBS

Prior 01/10/2011

Prior 01/10/2011

Prior 15/08/2010

7

Comments

(b) Consultancy services for f i rms estimated respectively, at the equivalent value o f US$200,000 and above per contract, consultant services for individual consultants o f US$lOO,OOO and above per contract, and all single source selection o f consultants with f i r m s and individuals will be subject to prior review by IDA.

c) All TOR for the selection o f consultants shall be subject to IDA’S prior review.

d) All amendments o f contracts raising the initial contract value by more than 15 percent o f original amount or above the prior review thresholds will be subject to prior review by the Bank as specified mandatory in Paragraphs 2 and 3 o f Annex 1 o f the Bank’s consultant Guidelines.

(e) Short l is ts composed entirely o f national consultants: Short l is ts o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f Paragraph 2.7 o f the Consultant Guidelines.

f ) Post Review: for each contract for services not submitted to the prior review, the procurement documents will be submitted to IDA post review in accordance with the provisions o f Paragraph 4 o f Annex 1 o f the Bank’s Consultant Guidelines. The post review wi l l be based on a ratio o f at least 1 to 5 contracts.

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22. Particular Methods of Procurement of Consultants’ Services

1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants’ services shall be procured under contracts awarded on the basis o f Quality and Cost-based Selection.

2. Other Methods o f Procurement o f Consultants’ Services. The following table specifies methods o f procurement, other than Quality and Cost-based Selection, which may be used for consultants’ services. The Procurement Plan shall specify the circumstances under which such methods may be used.

I Other Procurement Methods I (a) Least Cost Selection I (b) Selection based on Consultants ’ qualijkations (c) Selection Under a fixed budget (d) Quality Based Selection (e) Single Source Selection (f) Individual Consultants

3. Training. Training shall be carried out on the basis o f annual programs and budgets, which shall have been approved by the Association, and which shall, inter alia, identify: (a) particulars o f the training envisaged; (b) the personnel to be trained; (c) the selection method o f the institution conducting such training; (d) the institution conducting such training if identified; (e) the purpose for such training; (9 the location and duration o f the proposed training; and (8) the estimate o f the cost o f such Training

23. The conditions o f application o f the various methods o f procurement under the National Competitive Bidding shall be determined in the Procurement Plan (notwithstanding any contrary provisions o f Articles 5 and 7 o f Recipient’s arr&te‘ 270/CAB/PM/ARMP dated October 24, 2007).

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Annex 9: Economic and Financial Analysis

NIGER: Reform Management and Technical Assistance

1. country as a result o f enhanced budget credibility, better internal controls, and increased transparency which will be achieved.

The proposed IDA project will have a significant impact on the economic growth o f the

2. As budget allocations to sector ministries are aligned with the country’s strategic objectives, the probability o f spurring economic growth and achieving development objectives is l ikely to increase. The project will ensure that the priority areas that have been identified as sources o f growth for Niger such as agriculture, education, health, mining, and infrastructure, receive adequate budget allocations.

3. Considerable public resource savings i s l ikely to incur due the rationalization and streamlining o f budget processes that will be implemented through the project. Some o f the anticipated business processes re-engineering will touch on the expenditure and revenue chains, the intranet, rationalization and upgrade o f information systems. All these technical enhancements shall improve operational efficiency and result in great savings for the Nigerien taxpayer. Besides the technological benefits generated by the project, the impact o f human capital enhancement through training and institutional building will even be more durable and more dramatic.

4. Furthermore, as budget processes and outcomes become more transparent and available to a wider public, t rust in the government and good governance will l ikely increase. This will in turn creates a good environment for private investors, which i s a major objective for the government and the Bank, through its upcoming DPO o n growth, o f supporting the private sector development is as a key driver for economic growth in Niger. In fact, current domestic arrears and perception o f corruption in public sector are limiting the role o f private sector in the development process o f the country. A better performing and transparent public sector will give a healthy space for a growing private sector

5. outcomes to the project’s interventions is not easy. Hence it is not straightforward to conduct a robust cost-benefit and financial analyses for such as capacity development and TA project. Nevertheless, looking at the Bank’s results in similar interventions and their positive outcomes, one could make a compelling case for the proposed project. Often, the fol lowing causes and effects were identified: (i) efficient, transparent, and accountable fiscal and budget management contribute to economic growth and poverty reduction; (ii) better program implementation and service delivery and additional benefits such as lower supplier prices have resulted to improved predictability; and (iii) direct pecuniary benefits have resulted to improved probity in the use o f public resources.

Quantifying the direct and indirect financial, economic and social benefits and linking

6. and Accountability Project (May 2006) and the Madagascar Second Governance and Institutional Development Project (2008) where formal quantification o f costhenefits analyses have been tempted, the results have been overwhelmingly positive. The economic and financial

And in the few projects such i s the case with the Cambodia Public Financial Management

66

analysis o f the Cambodia PFM project yielded to an NPV o f US$165 million and an IRR o f 64%; for the Madagascar project, the NPV was estimated at US$425 million. The available evidence, therefore, suggests that the economic and financial benefits from the proposed project will exceed planned projects costs and wi l l yield a positive NPV.

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Annex 10: Safeguard Policy Issues NIGER: Reform Management and Technical Assistance

1. assistance project in the area o f PFM reforms.

The project does not trigger any World Bank safeguard pol icy as it i s purely a technical

68

Annex 11: Project Preparation and Supervision NIGER: Reform Management and Technical Assistance

1. Project timetable

Planned Actual PCN review July 15,2008 Initial PID to PIC September 09,2008 Initial ISDS to PIC April 30,2009 Appraisal March 9,2009 Negotiations April 22,2009 April 23,2009 BoardRVP approval July 2,2009 Planned date o f effectiveness Planned date o f mid-term review Planned closing date

September 1,2009 March 1 , 20 12 April 15,20 15

2. Key institutions responsible for preparation of the project:

Ministry o f Economy and Finance

3. Bank staff and consultants who worked on the project included:

Name Title Unit Robert Yungu Task Team Leader AFTPR Helene Grandvoinnet Sr. Public Sector Specialist AFTPR Catherine Laurent Sr. Public Sector Specialist MNSED Mamadou Deme Sr. Public Sector Specialist AFTPR Mamadou Yaro Sr. Financial Management Specialist AFTFM Amadou Ibrahim Sr. Economist AFTP4 Ibrah Sanoussi Rahamane Procurement Specialist AFTPC

Alma Kanani Sr. Economist SASGP Bernard Myers Sr. Public Sector Specialist ECSPE Joseph Owen Country Manager LCCNI Helene Bertaud Sr. Counsel LEGAF Wolfgang Chadab Sr. Finance Officer LOAFC Marc Jean Yves L i x i Operations Officer AFTRL Nora Kaoues Operations Officer AFCCI Joelle Dehasse Sr. Operations Officer AFCCI Madeleine Chungkong Senior Program Assistant AFTPR Samia Melhem Sr. Operations Officer CITPO

James Brumby Lead Public Sector Specialist PRMPS

69

4. Bank funds expended to date on project preparation:

1. Bank resources: US$336,865 (fixed and variable costs); US$72,375 in variable 2. Trust funds: 0 3. Total: US$336,865

5. Estimated Approval and Supervision costs:

1. Remaining costs to approval: US$30,000 (variable) 2. Estimated annual supervision cost: US$250,000 (fixed and variable costs)

70

Annex 12: Documents in the Project File NIGER: Reform Management and Technical Assistance

1. Independent Evaluation Group. 2008. Public Sector Reform: What Works and Why? An IEG Evaluation of World Bank Support, Washington, D. C: World Bank

2. World Bank. 2008. Country Assistance Strategy for the Republic of Niger for the Period of FY2008-11. Report No. 43443-NE Washington, D. C. : World Bank

3. World Bank. 2008. Second Rural and Social Policy Reform Credit of FY2008-11. Report No. 43443-NE Washington, D. C. : World Bank

4. World Bank. 2009. Growth Policy Reform Grant 1 (GPRG-1). Report No.44611-NE Washington, D. C. : World Bank

5. World Bank. 2008 Implementation Completion and Results Report on First Rural and Social Policy Reform Credit (RSRC-1) and Second Rural and Social Reform Grant. Report No. ICROOOO988, Washington, DC: World Bank

6. World Bank. 2007 Implementation Completion and Results Report on a Public Expenditure Reform Credit. Report No. 39304 (IDA-40660 IDA-HI 720) Washington, D. C. : World Bank

7. World Bank. 2007 Implementation Completion Report on a Public Expenditure Reform Credit. Report No. 261 95 (IDA-35760) Washington, D. C, : World Bank

8 . Last, Duncan, Lynne McKenzie, Roberto Tibana, and Camille Karamaga. 2008. Implementing Public Financial Management Reforms. IMF Fiscal Affairs Department Technical Assistance Mission Report. March 2008. Washington, DC: IMF

9. Niger: 2008 Article I V Consultation and First Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility. IMF Country Report No. 09/59, Washington, D.C. : IMF I

71

Annex 13: Statement o f Loans and Credits

NIGER: Reform Management and Technical Assistance

Difference between expected and actual

disbursements Original Amount in US$ Millions

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. F m . Rev’d

P 101434 PO95949 PO96198 PO83350 PO61209 PO74316 PO65991 PO7 16 12 PO72996 PO61558

2008 2008 2007 2006 2004 2004 2003 2003 2002 2001

NE-Transport Sector Program SIM (FY08) 0.00 30.00 0.00 0.00 0.00 30.41 0.00 0.00 NE-Loc Urb Infrastructure Dev SIL (FY08) 0.00 30.00 0.00 0.00 0.00 29.90 0.00 0.00 NE-MS Demographic SIL (FY07) 0.00 10.00 0.00 0.00 0.00 9.77 -0.21 0.00 NE-Inst Stmgt & Hlth Sec Prgm (FY06) 0.00 35.00 0.00 0.00 0.00 29.25 9.38 0.00 NE-Basic Education SIL (FY04) 0.00 30.00 36.29 0.00 0.00 5.56 2.40 -3.83 NE-Financial Sec (FY04) 0.00 14.80 0.00 0.00 0.00 8.80 6.44 -0.14 NE-Corn Action Prgm (FY03) 0.00 35.00 0.00 0.00 0.00 4.85 -2.42 0.00

NE-Priv Irrigation Promotion SIL (FY02) 0.00 38.72 0.00 0.00 0.00 1.45 -6.37 -1.21 NE-MultiSec STI/HIV/AIDS 2 (FY03) 0.00 25.00 0.00 0.00 0.00 6.81 3.88 -1.27

NE-Water Sec SIL (FYO1) 0.00 48.00 0.00 0.00 0.00 7.19 -10.48 -2.37

Total: 0.00 296.52 36.29 0.00 0.00 133.99 2.62 - 8.82

NIGER STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f US Dollars

Com m itted Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

Total portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FY Approval Company

Approvals Pending Commitment

Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

72

Annex 14: Country at a Glance NIGER: Reform Management and Technical Assistance

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74

MAP SECTION

1963 Level1973 Level

2001 Level

LakeChad

Mont GrebounMont Greboun(1,944 m )(1,944 m )

S a h e lS a h e l

TTéé

nnéé

rréé

DDee

ssee

rrtt

A i r M t s .A i r M t s .

MM

aannggaa MMttss..

A G A D E ZA G A D E Z

T I L L A BT I L L A B ÉÉ R IR I

D O S S OD O S S O

T A H O U AT A H O U A

M A R A D IM A R A D I

Z I N D E RZ I N D E R

D I F F AD I F F A

TTéérara FilinguFilinguéé

KolloKollo

IllIlléélala

BirninBirninKonniKonni

BouzaBouza

KeKeïïtata

Tchin-Tchin-TabaradeneTabaradene

AguiAguiéé

MagariaMagaria

DakoroDakoro

TanoutTanout

IngalIngal

GourGouréé

MaMaïïnnéé--SoroaSoroa

NguigmiNguigmi

BilmaBilma

MadamaMadama

ArlitArlit

DossoDosso

DifDiffafaMaradiMaradi

ZinderZinder

TTahouaahoua

AgadezAgadez

TillabTillabéériri

NIAMEYNIAMEY

A L G E R I A

M A L I

L I B Y A

C H A D

N I G E R I AB U R K I N A

F A S O

BENIN

To Djanet

To Tamanrasset

ToGao

ToOuahigouya

ToOuagadougou

ToKontagora

ToKaduna

To Tajarhi

15°N

10°E 15°E

A G A D E Z

NIAMEY

T I L L A B É R I

D O S S O

T A H O U A

M A R A D I

Z I N D E R

D I F F A

Téra Filingué

Kollo

Illéla

BirninKonni

Bouza

Keïta

Tchin-Tabaradene

Aguié

Magaria

Dakoro

Tanout

Ingal

Gouré

Maïné-Soroa

Nguigmi

Bilma

Madama

Arlit

Dosso

DiffaMaradi

Zinder

Tahoua

Agadez

Tillabéri

NIAMEY

A L G E R I A

M A L I

L I B Y A

C H A D

N I G E R I AB U R K I N A

F A S O

BENIN

Niger

To Djanet

To Tamanrasset

ToGao

ToOuahigouya

ToOuagadougou

ToKontagora

ToKaduna

To Tajarhi

S a h e l

Té

né

ré

De

se

rt

A i r M t s .

M

anga Mts.

Mont Greboun(1,944 m )

15°N

10°E 15°E

20°N

15°N

10°E5°E0° 15°E

NIGER

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 50 100 150

0 50 100 150 Miles

200 Kilometers

IBRD 33457

SEPTEMBER 2004

N IGERSELECTED CITIES AND TOWNS

DEPARTMENT CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

DEPARTMENT BOUNDARIES

INTERNATIONAL BOUNDARIES