AFRICAN DEVELOPMENT FUND

PROJECT : DOMESTIC RESOURCE MOBILIZATION AND

PUBLIC FINANCE MODERNIZATION SUPPORT

PROJECT (PAMRIM-FP)

COUNTRY : DEMOCRATIC REPUBLIC OF CONGO

APPRAISAL REPORT

Translated Document

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TABLE OF CONTENTS

Currency Equivalents i

Abbreviations and Accronyms ii

Project Information Sheet .......................................................................................................... iii

Project Summary ....................................................................................................................... iv

Results-Based Logical Framework ............................................................................................ v

Project Implementation Schedule ............................................................................................. vii

I – STRATEGIC THRUST AND RATIONALE ...................................................................... 1

1.1. Project Linkages with Country Strategy and Objectives ............................................. 1

1.2. Rationale for Bank Involvement. ................................................................................. 1

1.3. Aid Coordination ......................................................................................................... 4

II – PROJECT DESCRIPTION ................................................................................................. 5

2.1. Project Objectives and Components ............................................................................ 5

2.2. Technical Solutions Adpted and Alternatives Explored .............................................. 8

2.3. Project Type ................................................................................................................. 8

2.4. Project Cost and Financing Arrangements .................................................................. 9

2.5. Project Area and Beneficiaries .................................................................................. 11

2.6. Participatory Approach to Project Identification, Design and Implementation ........ 11

2.7 Bank’s Experience and Lessons Reflected in Project Design ...................................... 11

2.8. Key Performance Indicators ........................................................................................ 11

III – PROJECT FEASIBILITY ................................................................................................ 13

3.1. Economic Benefit ...................................................................................................... 13

3.2. Environmental and Social Impact. ............................................................................. 13

IV – IMPLEMENTATION ...................................................................................................... 14

4.1. Implementation Arrangements .................................................................................. 14

4.2. Monitoring and Evaluation ........................................................................................ 17

4.3. Governance ................................................................................................................ 17

4.4 Sustainability ............................................................................................................. 18

4.5. Risk Management. ..................................................................................................... 18

4.6. Knowledge Building .................................................................................................. 18

V – LEGAL FRAMEWORK ................................................................................................... 19

5.1. Legal Instrument ....................................................................................................... 19

5.2. Conditions Associated with Bank Intervention ......................................................... 19

5.3. Compliance with Bank Policies ................................................................................ 19

VI – RECOMMENDATION ................................................................................................... 19

LIST OF APPENDICES

Appendix I: Comparative Socio-economic Indicators ............................................................... I

Appendix I-a: Comparative Socio-economic Indicators ...........................................................II

Appendix II: Table of AfDB Portfolio in the DRC as at 30/06/13 ......................................... III

Appendix III: Map of the Project Area ................................................................................... IV

Appendix IV: Summary Description of the PAMRIM-FP ...................................................... V

Appendix V: Status of Public Finance Reforms ……………………… ………..…….…..XII

LIST OF TABLES

Table 1.1: Aid Coordination: Thematic Groups and Actors

Table 2.1 - Detailed Description of Activities by Component (in USD thousand)

Table 2.2: Estimated Cost by Component (in UA and USD thousand)

Table 2.3: Source of Financing (in UA thousand)

Table 2.4.1: Estimated Project Cost by Expenditure Category (in UA thousand)

Table 2.4.2: Summary of Estimated Project Cost by Expenditure Category (ADF Grant, in UA thousand)

Table 2.4.3: Summary of Estimated Project Cost by Expenditure Category (ADF Loan, in UA thousand)

Table 2.5: Expenditure Schedule by Component (in USD thousands)

Table 3.1: Monitoring Stages and Feedback Loop

Table 3.2: Risks and Mitigation Measures

This report was drafted by A. C. TOTO SAME, Principal PFM Specialist, ECGF, B. OLLAME, Operations Assistant,

ECGF, V. LOSSOMBO, Principal Financial Management Specialist, SNFI.2/COCD, and D. MARINI, Senior

Procurement Specialist SNFI.1/COCD, following an evaluation mission conducted in the DRC from 7 to 23 June

2017. The report also benefited from discussions with Mr S. MALIKO, Country Manager, COCD. Questions on this

report should be referred to Mr. A. COULIBALY, Acting Director, ECGF (Ext. 2536)

i

Currency Equivalents

June 2017

UA 1 = USD 1.38432

USD 1 = UA 0.72238

USD 1 = CDF 1 437

Fiscal Year 1 January to 31 December

Weights and Measures

1 metric tonne = 2 204 pounds

1 kilogramme (kg) = 2.200 pounds

1 metre (m) = 3.28 feet

1 millimetre (mm) = 0.03937 inch

1 kilometre (km) = 0.62 mile

1 hectare (ha) = 2.471 acres

Km² = square kilometre

M3 = cubic metre

M² = square metre

lm = linear metre

Mm3 = million cubic metres

M3/h = cubic metre per day

l/s = litre per second

l/d/inhab. = litre per day per capita

ii

Abbreviations and Acronyms

ADF African Development Fund

C2D French Agency for International Technical Expertise (French Cooperation)

CDF Congolese franc

COREF Public Finance Reform Steering Committee

CPC Provincial Coordination Committee

CSP Country Strategy Paper

CTB Belgian Technical Cooperation

CWIQ Core Welfare Indicator Questionnaire

DFID Department for International Development (UK)

DGE Directorate of Major Enterprises

DGI Directorate General of Taxation

DGRAD Directorate General of Administrative, State Lands, Judicial, and Participation Revenue

DTO Directorate of the Treasury and Payment Authorization

ETD Decentralized Territorial Entities

EU European Union

FE Foreign Exchange

FSU Fragile States Unit

HTTD Net of Taxes and Customs Duties

IMF International Monetary Fund

LC Local Currency

MDGs Millennium Development Goals

MTR Mid-Term Review

PAIM Multisector Institutional Support Project

PAM-FP Public Finance Modernization Support Project

PAP Priority Action Programme

PAP-REC Priority Action Programme - Capacity Building

PARER

Project to Provide Institutional Support for the Economic Recovery and

Reunification Support Programme

PCR Project Completion Report

PCU Project Coordination Unit

PEFA Public Expenditure and Financial Accountability

PIU Project Implementation Unit

PRONAREC National Capacity Building Programme

PSRFP Strategic Public Finance Reform Plan

PUAICF Emergency Programme to Mitigate the Impacts of the Financial Crisis

SENAREC National Capacity Building Secretariat

TFP Technical and Financial Partner

UA Account Unit

UAM Million Units of Account

UNDP United Nations Development Programme

WB World Bank

iii

Project Information Sheet

DONEE: Democratic Republic of Congo

EXECUTING AGENCY: The PIU - PAM-FP- CFEF (Fragile States Financing Unit) Ministry

of Finance.

Financing Plan

Source Amount (UA) Instrument

ADF

15.000.000

Grant

Government 1.666.666

TOTAL COST 16.666.666

Key AfDB Financial Information

Loan/Grant Currency

Unit of Account

Interest Type* N/A

Interest Rate Spread* N/A

Commitment Fee* N/A

Service Fee N/A

Maturity N/A

*if applicable

Timeframe – Main Milestone (expected)

Concept Note Approval

23 May 2017

Project Approval 17 Nov. 2017

Effectiveness 30 Dec. 2017

Last Disbursement 31 Dec. 2021

Completion Report 30 June 2022

Last Reimbursement NA

iv

Project Summary

Programme

Overview

Project Name: Domestic Resource Mobilization and Public Finance Modernization Support

Project (PAMRIM-FP)

Geographic scope: Nationwide

Overall implementation timeframe: 2017-2021

Financing: UA 15 million grant from ADF-14 resources

Operational instrument: Institution building project

Sector: Public finance

Needs

Assessment

The major public finance challenge currently facing the DRC is to boost domestic resource

mobilization for the effective financing of its economic development, and improve public finance

management, transparency and accountability. The PAMRIM-FP will continue to implement the tax

administration reform and modernization programme, in light of the weaknesses that were pointed

out in the organization and functioning of the DGI. The objective is to create conditions that would

boost domestic resource mobilization by building the capacity of operational services. The

programme will also strengthen the gains of Bank operations by continuing to build the capacity of

DGRAD and DRGC. To ensure greater transparency and accountability in public finance

management, the capacity-building effort will be extended to the Court of Auditors where the

exercise was initially supported by the EU, the World Bank and DFID until 2016.

Target

Beneficiaries

The project's beneficiary area is the whole country. The direct beneficiaries of the institutional

support are: the DGI, the DGRAD, the DRGC and the Court of Auditors. The end beneficiaries are

the country’s entire population. The improved domestic resource mobilization, transparency and

accountability will foster the effective financing of economic development and improve the people's

living standards.

Bank’s

Comparative

Advantage

and Value

Added

The Bank’s comparative advantages and value added in this operation derive from its long-standing

experience in designing and implementing institutional capacity building projects in Fragile States,

especially in the DRC since the resumption of cooperation in 2002. The Bank's value added lies

mainly in its integrated and structuring approach. PAMRIM-FP is indeed complementary to other

public finance institutional support projects, particularly PAM-FP and PAI-STATFIN, and

consolidates their impacts. PAMRIM-FP helps to maximize synergies and consolidate the progress

being achieved, thereby generating considerable leverage in terms of amplifying the results on the

ground.

Knowledge

Building

The project will also contribute to knowledge building in the DRC, especially in public finance

management in support of the modernization of public finance. Knowledge will be acquired through

the transfer of skills from technical assistance and consultants to the staff in institutions and

businesses that will benefit from the project, particularly women. Knowledge will also be generated

through the various data and knowledge platforms, user manuals, and several user-training

programmes and workshops that will be organized. Furthermore, knowledge acquired from this

project and its outcomes will be disseminated within and outside the Bank, thanks to rigorous

monitoring/evaluation of expected outputs and achievements, supervision missions, the project

completion report, as well as seminars and IDEV reports.

v

Results-Based Logical Framework

Country and Project Name: Democratic Republic of Congo –Domestic Resource Mobilisation and Public Finance Modernisation Support Project (PAMRIM-FP)

Project Goal: The project objective is to contribute to increased domestic resource mobilisation and enhanced accountability.

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF VERIFICATION RISKS/MITIGATION

MEASURES

Indicator

(Including CSI) Baseline Target

IMP

AC

T

Increased mobilization of

domestic resources.

Total revenue as % of GDP.

14.1% in 2016 17% in 2022 Min. of Finance/IMF

Risk:

- Socio-political –

Insecurity and political

instability.

Mitigation Measure

1:

- The commitment of the

country and the

international community

to holding general

elections as prescribed in

the Saint Sylvester

Agreement,

peacebuilding and

national security

Risk 2:

- Reversibility of the

Government’s

commitment to continue

structural reforms.

Mitigation

Measure 2. This involves institution

OU

TC

OM

ES

The capacity of the DGI and

DGRAD is strengthened to

ensure effective mobilization of

tax revenue.

Tax revenue collected by the DGI CDF 3 006 billion in 2016 CDF 9 443 billion in 2022 Min. of Finance/IMF

Tax revenue collected by DGRAD CDF 971 billion in 2016 CDF 4 823 billion in 2022 Min. of Finance/IMF

The capacity of the General

Accountability Directorate

(DRCC) and the Court of

Auditors is strengthened.

The thematic audits of the Court of

Auditors are released 0 report released in 2016 3 reports released in 2020

Completeness in the Production of the

State Budget Management Account

Unreliable Budget

Management Account

Credible Account, certified

by the Court of Auditors

(Opinion of the Court of

Auditors issued within the

constitutional timeframes

in 2020).

Court of Auditors’ Report

/DRGC

OU

TP

UT

S

Component I: Build domestic resource mobilisation capacity

Output I.1: Build the DGI’s

capacity for effective tax

revenue mobilisation

I.1.1. Production of service and tax

management system reports

Management statistical reports

are produced manually

Automated production

using an IT system in 2020 MIN/DGI reports

I.1.2 Modernisation if IT infrastructure

for the launching of online filing of tax

returns

Outdated IT infrastructure and

lack of online tax returns

filing facilities

IT infrastructure updated

and online tax returns

filing effective in (2019)

MIN/DGI reports

I.1.3 Number of multipurpose tax

auditors and taxpayer accounts

managers in the 26 provinces

Inadequate training

550 multipurpose tax

auditors are trained in the

26 Provinces, of whom

30% women (2021)

MIN/DGI reports

I.1.4 Number of tax bailiffs in the five

provinces

Absence of bailiffs in the five

provinces (Maniema,

Bandundu, Eastern Kasaï,

Western Kasaï and Equateur)

50 bailiffs (10 per

province) trained, 30% of

whom women (2019)

MIN/DGI Report

vi

I.1.5 Modernisation of the DGE

DGE is antiquated and

dashboards are produced

manually

DGE rehabilitated and

production of automated

management dashboards

end-2021

MIN/DGI report

building. The

Government has

reaffirmed its

commitment to continue

the public finance

modernisation process

and enhance internal

resource mobilisation

Risk 3:

- Human resource issues

in entities benefitting

from the project, to

ensure the efficient

conduct of activities

retained

.

Mitigation measure

3.

-The intervention of high-

level experts to provide

training and ensure

knowledge transfer in

these entities will help to

mitigate this risk in

beneficiary entities.

Output I.2: Build the

DGRAD’s capacity to

improve non-tax revenue

mobilisation

I.2.1 Number of agents and officers

trained in forecasting and auditing

methods in the mining, forestry,

environment, petroleum and

telecommunications sectors.

Absence of expertise

130 agents and officers

trained in forecasting and

auditing methods in the

mining, forestry,

environment, oil and

telecommunications

sectors, 30% of whom

women (2019)

MIN/DGRAD reports

1.2.2. Building of DGRAD’s collection

capacity Weak capacity

DGRAD provided with

collection equipment

(2019)

MIN/DGRAD reports

I.2.3 The capacity of the Services

Inspectorate to perform its risk

management and internal audit function

The Services Inspectorate is

no longer adequate

The Services Inspectorate

is performing its risk

management and internal

audit function fully by the

end of 2020

MIN/DGRAD reports

I.2.4 Status of archiving of

administrative documents and securities

printouts

Manual archiving of

administrative documents and

securities printouts

Archiving of

administrative documents

and securities printouts is

computerized by end-2019

MIN/DGRAD reports

I.2.5 Number of agents and officers

trained on the tax base (understanding of

the taxpayers’ register);

Inadequate understanding of

the tax base

130 agents and officers

trained on the tax base

(full understanding of the

taxpayers’ register) (2019)

MIN/DGRAD reports

Component II: Consolidate transparency and accountability

Output II.1: Build the

capacity of the General

Accountability Directorate

(DRGC)

II.1.1. Training of officers in the new

budget nomenclature and reconstitution

of accounting in each province (26

teams)

Officers not trained in the new

budget nomenclature and

accounting reconstitution

All officers trained in the

26 provinces (2019) MIN/DRGC reports

Including women 0% (2016) 30% in (2019)

II.1.2. Electrical equipment in provincial

accountability offices in 15 provinces

Inadequate equipment in the

15 new provinces

The 15 new provinces are

equipped before end-2020 MIN/DRGC reports

II.1.3. Number of teams trained in

consolidation, transparency and

credibility of accountability data, 30%

of whom are women

Inadequate training in

consolidation, transparency

and credibility of

accountability data

26 teams have been trained

in consolidation,

transparency and

credibility of accounting

data before the end of

2019, 30% of whom

women.

MIN/DRGC reports

vii

II.1.4 Data collection capacity in the 15

new provinces

The 15 new provinces are not

equipped with sufficient

resources for data collection

The 15 new provinces are

equipped with sufficient

resources for data

collection before 2020

MIN/DRGC reports

II.1.5 Status of archiving Manual archiving Electronic archiving in

place before 2020 MIN/DRGC reports

Output II.2 : Build the

capacity of the Court of

Auditors

II.2.1. Number of accountability

training and awareness-raising

workshops

No accountability training and

awareness-raising workshops

organized on 2016

At least one awareness-

raising workshop or

mission held in the 26

provinces before end-2020

Court of Auditors’ reports

II.2.2. Visibility of activities of the

Court of Auditors

The activities of the Court of

Auditors not visible – website

not operational

Communication capacity

enhanced and website

operational in 2018

Court of Auditors’ reports

II.2.3 Strengthen the IT equipment of

the Audit Court

Inadequate IT equipment for

the Court of Auditors

The Court has adequate IT

equipment (2018) Court of Auditors’ reports

II.2.4 Status of archiving and personnel

dedicated to this service

Manual archiving and

personnel not trained

The Court has archiving

equipment and its staff are

trained thereon before June

2019

Court of Auditors’ reports

AC

TIV

ITÉ

S C

LÉ

S COMPONENTS UA 16.666,6 MILLION

Component 1. Build capacity for domestic resource mobilization: build the capacity of the DGI and DGRAD to

increase domestic resource mobilisation.

UA 11,38 million

Component 2. Consolidate transparency and accountability: build the capacity of the General Accountability

Directorate (DRGC) and the Court of Auditors

UA 4,26 million

Component 3. Efficient project management: This mostly involves the equipping and functioning of the project management unit.

This component will also be responsible for coordinating the recruitment of the external auditor. UA 1,02 million

viii

PROVISIONAL PROJECT IMPLEMENTATION SCHEDULE Years

Activities/Month J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J J F M A M J J A S O N D

Prerequisite for start-up

Board presentation

Grant effectiveness

Setting up of the Project Team

Setting up of the PSU

Project launch mission

Works

Invitation to bid for works

Rehabilitation of the DGE, DGRAD,

DRGC and Audit Court

Laying out of the DGE, DGRAD,

DRGC and Court of Auditors

Equipment and Supplies

Invitations to bid for IT equip. Office

automation equip and rolling stock

Software Procurement

Rolling stock and other equipment

Office and other equipment

Goods delivery and start-up

Consultants

Preparation of CBDs and shortlisting

Launch of invitations to bid, opening

of bids, no-obj, bid exam. and ward

of contacts

Consultancy services

Capacity building DGI

Capacity building DGE

Training DGRAD

Capacity building for DRGC,

DGRAD, Court of Auditors

Various Training Courses

Training for DRGC, DGRAD, Court

of Auditors, DGI/DGE

Operating expenditure

Mid-Term review

Monitoring and evaluation

Steering Committee meeting

Audit

Annual accounts audit

20212017 2018 2019 2020

1

REPORT AND RECOMMENDATION OF BANK GROUP MANAGEMENT TO THE BOARD OF DIRECTORS

CONCERNING THE PROPOSAL TO AWARD A GRANT TO THE DEMOCRATIC REPUBLIC OF CONGO

(DRC) FOR THE DOMESTIC RESOURCE MOBILIZATION AND PUBLIC FINANCE MODERNIZATION

SUPPORT PROJECT (PAMRIM-FP)

This proposal, submitted to the Board for approval, concerns the award of a grant of UA 15 million

under ADF-14 to the Democratic Republic of Congo (DRC) to finance the Domestic Resource

Mobilization and Public Finance Modernization Support Project (PAMRIM-FP). This an

institutional support operation to be executed over the period 2017-2021, and is aimed at continuing

the implementation of the tax reforms initiated by the Government and consolidating the

achievements of Bank operations.

I STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with Country Strategy and Objectives

1.1.1 PAMRIM-FP is in compliance with the National Strategic Development Plan (PNSD)

2017-2021, which is being finalized. It also falls within the framework of the Public Finance

Reform Strategic Plan (PSRFP), adopted on 31 March 2010, which comprises five main pillars:

(i) budget reform aimed at establishing a comprehensive and multi-annual budgetary framework

consistent with national priorities; (ii) strengthening of the tax system with a view to modernizing

fiscal instruments and tax administrations (iii) streamlining of expenditure management in order to

strengthen the expenditure chain, the State payroll system, the public procurement system and the

public debt management system; (iv) strengthening of the accounting system and cash management

to produce reliable public accounts; and (v) strengthening of the oversight system with a view to

improving the quality of public finance control.

1.1.2 Furthermore, the project is in line with one of the Bank's five institutional priorities (the

High 5s), namely "Improve the quality of life of the people of Africa" since it supports domestic resource

mobilization to finance development and improve the people's living standard. PAMRIM-FP also reflects the

priorities set out in the Bank's 2013-2017 Country Strategy Paper (CSP), Pillar 1 of which aims to develop

private investment and rural integration support infrastructure, while Pillar 2 seeks to build Government’s

capacity to increase public revenue and create an enabling environment for private investment. The Project

covers Pillar 2 of the CSP by supporting domestic resource mobilization in complementarity with PAM-FP

and PAI-STATFIN currently being implemented. It aligns squarely with the AfDB Ten-Year Strategy for the

period 2013-2022 as regards support for Africa’s economic transformation. PAMRIM-FP is equally in

harmony with the Strategic Framework and Governance Action Plan (GAP II), Pillar 1 of which deals with

promoting transparent, responsible and competent public resource management to foster inclusive and green

growth. Lastly, it is consistent with the Bank’s 2014-2018 Gender Strategy: "Investing in gender equality for

Africa’s transformation", and covers one of the three pillars of the Strategy, namely: Pillar 3 "Knowledge

management and capacity building".

1.2 Rationale for Bank Intervention

1.2.1 Political context: Following mediation efforts by the National Episcopal Conference of

Congo (CENCO), the Government and the opposition on 31 December 2016 signed a comprehensive

and inclusive political agreement for the management of the transitional period leading to the

election of the next President of the Republic. The last constitutional mandate of the current

President expired on 19 December 2016, and the difficulties of preparing for election triggered a

political crisis whose scope could have been detrimental to a hard-won peace after many years of

social upheaval. The political compromise provides for the current President to remain in office until

2

the end of 2017, and bars him from participating in the next election. The leadership of the

Transitional Government and the Conseil National de Suivi de l’Accord (National Council for the

Monitoring of the Agreement) is entrusted to the opposition. The Agreement provides for the

organization of presidential, legislative and provincial elections before end-2017, and measures to

improve the political climate. The implementation of this Agreement began in April 2017 with the

appointment of the new Prime Minister by the President of the Republic, to replace the one

appointed in December 2016 after the signing of the Inclusive Political Agreement for consensual

management of the transition period up to the organization of elections. The Agreement also

provides for the appointment of persons to head the National Council for the Monitoring of the

Agreement. Recent developments include discussions in the Agreement Evaluation Committee of

December 31, 2016, which could lead to postponement of the election date.

1.2.2 Security situation and fragility: The security situation in the country remains fragile.

It had improved considerably, thanks to institutional reforms following the February 2013

Addis Ababa Framework Agreement1 for Peace, but pockets of insecurity remain in the East, as

recent events in the Centre show. DRC remains a fragile State faced with sporadic localized

rebellion and political instability that threaten the peace process, weaken State capacity and

authority, and thereby further undermining economic and financial governance while compromising

the effective implementation of economic and social policies. DRC faces multifaceted economic and

structural fragility factors that affect its institutional, security, political and socio-economic

environment. Thus, the country's vulnerability to exogenous shocks led to tensions in the foreign

exchange market in 2016, with the depreciation of the Congolese franc by 56% against the US dollar

since the beginning of 2016, while economic growth fell from 6.9% in 2015 to 2.5% in 2016.

However, despite the deterioration of the macroeconomic situation following the exogenous shock

and the political situation, the IMF projects real GDP growth rate to reach around 2.8% in 2017 and

to average 3.3% per annum over the 2018-2020 period. The continuation of on-going reforms,

particularly in the area of public finance and the consolidation of political and institutional stability

with a peaceful electoral process, should strengthen the resilience of the Congolese economy to

further boost its economic performance.

1.2.3 Fiscal policy: In 2016, the Government pursued a restrictive fiscal policy in an effort to

cope with the tightening of the fiscal space following the decline in the prices of mining products.

The initial 2016 Budget Act passed stood at CDF 7 283 billion and provided for a 0.2% reduction

compared with the 2015 budget. An Amended Budget Act was passed, slashing the budget amount to

CDF 5 497.5 billion, i.e. a cut of nearly 22% compared with the initial budget. This fiscal

adjustment, which affected all budget items, took into account the difficulties of mobilizing not only

higher tax revenue but also the initially planned bonds worth CDF 746.7 billion. Budget execution

reveals significant discrepancies between forecasts and actual achievements, thus

demonstrating the need to strengthen domestic revenue mobilization and accountability

throughout the expenditure chain. At end-2016, total revenue stood at CDR 3 632.8 billion (14.1% of

GDP), representing a performance rate of 67.10% compared to the revised forecasts. Expenditures

amounted to CDF 4 131 billion (15.1% of GDP), representing an execution rate of 76.31%. This

means that there was a cumulative budget deficit of CDF 498.2 billion, corresponding to 1.6% of

GDP at the end-2016, compared to a deficit of 0.8% of GDP the previous year. This apparent control

reflects the streamlining efforts whereby expenditure is executed exclusively on a cash basis, with all

the shortcomings that this entails in terms of prioritization of payments and accumulation of

1 This agreement was signed under the auspices of the United Nations by 11 countries (DRC, CAR, Angola, Burundi, Rwanda, Republic of Congo,

South Sudan, South Africa, Zambia, Uganda and Tanzania). It prohibits signatory countries from supporting armed groups operating in Eastern DRC and includes measures on army reform, restoration of state authority, development of Eastern DRC and strengthening of national cohesion.

3

domestic debt. The tight control has also led to the drying up of public contracts and the lack of

investment projects, which could improve economic development and growth support infrastructure.

1.2.4 Governance: Since 2008, the Government has initiated public finance management reform

and made notable progress. In 2010, it adopted a Public Finance Reform Strategic Plan (PSRFP), set

up the Public Finance Reform Orientation Committee (COREF) and in July 2011 adopted a Finance

Organic Law (LOFIP) – an innovative law that introduced the results-based budget system. The

country is pursuing the implementation of the 2016-2018 Action Plan and has recorded some

progress in setting up the programme budget and enabling public access to budget information.

Domestic resource mobilization remains the Government’s main concern. The already very weak tax

revenue collapsed in 2016, dropping to 9.4% of GDP in 2016 against 13.6% in 2015. Significant

effort is still needed to remedy the persistent weaknesses that undermine public finance management

efficiency, especially the tendency of the authorities to misuse exceptional procedures in public

expenditure management. In addition, improving transparency and governance in the extractive

sector remains a major challenge. With regard to the fight against corruption, despite progress

achieved in terms of economic and financial governance, effort is still needed to curb corruption and

ensure optimum performance of the economy. There is further need to: (i) strengthen budget

credibility; (ii) consolidate public accounting for reliable accountability; (iii) strengthen

accountability through empowerment of the Court of Auditors; and (iv) fight impunity and

corruption. With a Corruption Perception Index score of 21/100, the DRC ranked 146th out of 176

countries in the 2016 Report of Transparency International.

1.2.5 The Government is aware of the persistent weaknesses in public finance management and is

determined to address them. To that end, it places emphasis on strengthening the judicial system and

improving public finance management. To step up the anti-corruption effort, the Government

recruited 1 000 new magistrates and deployed them in the various provinces of the country. The

Bank, through the Public Finance Modernization Support Project (PAM-FP) and the Statistics and

Public Finance Institutional Support Project (PAI-STATFIN), supports these efforts along with other

TFPs, particularly the World Bank, the EU, DFID and other bilateral partners belonging to the DRC

Public Finance Thematic Group.

1.2.6 Therefore, in complementarity with the operations of other TFPs, PAMRIM-FP will

consolidate the gains of the Public Finance Modernization Support Project (PAM-FP), approved in

April 2012, in order to contribute to the improvement of domestic resource mobilization capacity.

The project’s specific objective is to continue the reorganization of tax administration services and

improve resource allocation and the efficiency of public finance management in the three provinces

of Bas-Congo, Orientale and Maniema by establishing the minimum platform for local public

finance, and implementing the Statistics and Public Finance Institutional Support Project (PAI-

STATFIN), approved in October 2013. PAI-STATFIN is aimed at building the State’s institutional

capacity to steer the economy and consolidate public finance management. The project’s specific

objective is to develop a national statistical system that provides reliable and up-to-date data on

development objectives, measure the outcomes and impacts of programmes and projects aimed at

supporting government action, monitor and evaluate the implementation of economic policies and

reforms. It also seeks to strengthen the effectiveness of institutional systems and mechanisms for

collecting mining royalties and those required to ensure greater transparency and accountability in

public finance management overall (see detailed achievements in the technical annexes).

4

1.2.7 Key development issues addressed by the project: The major public finance challenge

currently facing the DRC is to boost the mobilization of the domestic resources needed for the

effective financing of its economic development, and to improve public finance management,

transparency and accountability. For a country like the DRC, with huge mining revenue mobilization

potential and one of Africa's most significant economic development potential, total Government

revenue accounts for only 14.1% of GDP. In addition, it is worth noting that the authorities have a

tendency to overuse exceptional procedures in public expenditure management and to make ex post

adjustments. The excessive use of this practice is not likely to promote sound public resource

management. The weaknesses mentioned in §1.2.3 and §1.2.4 above are confirmed by the analytical

work recently conducted by other TFPs, namely TADAT by the World Bank, the study on the tax

burden (DFID) and the independent public finance assessment (DFID). Therefore, it is imperative to

further build the capacity of the Directorate of Accountability and the Court of Auditors, in order to

entrench the notions of transparency and accountability in public finance management in the DRC,

while improving the domestic resource mobilization capacity. The gains brought about by Bank

operations will also be consolidated by continuing to build the capacity of DGRAD and the DRGC,

and extending the capacity-building effort to the Court of Auditors - where the exercise was initially

supported by the EU, the World Bank and DFID until 2016 – to ensure greater transparency and

accountability in public resource management. (See the technical annexes "Updates on the Reform

Process").

1.3 Aid Coordination

1.3.1 Acting through its Field Office in the DRC (COCD), the Bank maintains on-going

dialogue with DRC’s other external partners. The aid coordination mechanism in the country is

based on the Partners’ Coordination Group (PCG), which meets on monthly, and inter-donor groups

and thematic groups, whose meeting schedule takes into account the dynamics of each group. For

matters of economic governance, the World Bank is the leader of the Thematic Group, which meets

under the auspices of the Ministry of Finance and in which the Bank's Field Office is very active.

The EU is the leader of the Inter-Donor Group on Public Finance. The Bank plays the lead role for

the "Statistics" and "Infrastructure" Groups, and participates in other thematic groups, depending on

the orientation of its operations portfolio. As part of the implementation of the Paris Declaration, the

Bank organized joint portfolio reviews with the World Bank and joint missions with other TFPs

involved in the same sectors, for better harmonization of interventions. Regarding relations with the

IMF, the country has had no IMF programme since 2012, but Article IV consultations are conducted

annually.

Table 1.1: Aid Coordination: Thematic Groups and Stakeholders

THEMATIC WORKING GROUP LEADER Security (army & police) EDSEC & EDPOL

Justice and human rights European Union

Local and decentralized governance UNDP

Economic governance and public finance European Union/World Bank

Elections and parliament UNDP

Business climate and private sector and PPP DFID

Media and culture French Embassy

Infrastructure AfDB

Statistics, prospective studies and energy AfDB

Community dynamics and vocational training Japan - JICA

5

Table 1.2: Mapping of Donor Financial Support for Public Finance Reform

No.° PROJECT DONORS AREA AMOUNT

1 PROFIT Congo (2017

to 2021)

World Bank/ British

Cooperation /

Belgium

Component 1 - Improvement of budget management processes

Component 2 - Strengthening of external

budget control and transparency Component 3 - Establishment of public

financial management systems at the

provincial level (Equateur, Eastern Kasaï, North-Kivu and City of Kinshasa

provinces)

USD 26 million (awaiting additional

funding of USD 50

million)

2 C2D (closing 2018) French

Cooperation

Budget reform support Technical assistance for the

computerization of financial services

EUR 12 million

3 PAI STAFIN (closing December 2017)

African Development Bank

Institutional support for public finances

(Treasury and Payment Authorisation Directorate, General Accountability

Directorate and the DGRAD)

USD 4.5 million

4 PAM-FP closing

August 2017)

African

Development Bank

Computerization of the expenditure

chain, revenue and payroll in three

provinces (Bas-Congo, Orientale and

Maniema) Strengthening of central tax

administration services

USD 10 million

5 PAMFIP in the closing phase in 2017

European Union Support to strengthen the accounting system

EUR 10 million

II PROJECT DESCRIPTION

2.1 Project Objectives and Components

2.1.1 The overarching objective of the project is to contribute to increased domestic

resource mobilization and accountability enhancement. The specific objective of PAMRIM-FP is

to continue the implementation of the tax reforms initiated by the Government and to consolidate the

gains of Bank interventions.

2.1.2 Detailed project description: The main purpose of the PAMRIM-FP is to consolidate

the gains of previous Bank interventions. The project is divided into three complementary

components: (i) consolidation of domestic resource mobilization capacity; (ii) consolidation of

transparency and accountability; and (iii) support for efficient project management. The first

component will help to improve domestic resource mobilization for effective development financing

and improvement of the people's living conditions. The second component will contribute to

enhancing transparency and the notion of accountability in public finance management in order to

ensure that the mobilized resources are put to better use. The third component will ensure the

effective implementation of the project.

6

2.1.3 Component I: Consolidate Domestic Resource Mobilization Capacity

Table 2.1-Detailed Description of Activities by Component (in USD million)

No. Project Sub-

Component

Estimated

Cost in

USD

Description of Sub-components

I.1.

Build the DGI's

capacity for the

efficient tax revenue

mobilization

USD 8.1

million

Reorganization of the DGI Service Inspectorate attached to the

Office of the Director General of Taxation.

Reorganization of the Service Inspectorate at two levels: (i) set up

modern structures and tools for better conduct of internal

control, risk control and internal audit missions (Publication

and dissemination of Job description, procedures manual,

internal control framework, job descriptions, mapping of risks

relating to DGI tax activities, DGI Audit Guide and Auditor's

Charter); (ii) Train 13 Auditors-Trainers in auditing, control and

risk management; (iii) international certification of 13 DGI

Auditors; and (iv) Train 125 Tax Inspectors locally in auditing,

control and risk management.

Modernization of the Directorate of Major Enterprises

(DGE) in Kinshasa. The DGE accounts for approximately 85%

of the DGI’s tax revenue. Therefore, there is need to provide it

with a viable, suitable and modern infrastructure. The

improvements would not only provide the staff of the

Directorate with decent working conditions enabling the

increased mobilization of public financial resources, but would

also offer taxpayers better reception conditions with a view to

fundamentally changing the image of the Congolese tax

administration through: (i) the rehabilitation of the premises of

the DGE; and (ii) the automation of the production of statistical

reports for management dashboards

Capacity building for officers and executives in various

specialties related to tax and service control missions. (i) Train

550 multipurpose tax auditors and taxpayer account managers

(ii) Train 50 bailiffs in the five provinces where they are lacking

(Maniema, Bandundu, Eastern Kasai, Western Kasai and

Equateur); and (iii) retrain 150 DGE and CDI officers

(Lubumbashi, Goma, Kisangani, Kinshasa and Central Congo

(further training in the fiscal audit of VAT, mining, petroleum

and telecommunications companies and banks – further

training in accounting based on OHADA standards)

Establishment of a modern electronic document archiving

system. Establish a system for the electronic archiving of

documents required by law to be preserved for at least 10 years

Modernization of the IT infrastructure for the launch of the

online filing of tax returns (equipment and refurbishment for

two server rooms, back-up system and back-up replication, - set

up the call centre with a capacity for 20 people

Sustainability of the provincial revenue chain.

7

I.2.

Build the DGRAD’s

capacity to improve

non-tax revenue

mobilization

USD 6.5

million

Specialized training in forecasting and auditing techniques for

staff of the mining, forestry, environmental, petroleum and

telecommunications sectors.

Develop risk mapping

Build material capacity (provision of furniture and other office

equipment).

Build staff mobility capacity for increased mobilization of non-

tax revenue.

Upgrade the General Inspectorate of DGRAD Services

Establish a modern electronic document archiving system.

2.1.4 Component II: Consolidation of Transparency and Accountability

No. Project Sub-

component

Estimated

Cost in USD Description of Sub-components

II.1.

Capacity building

for the Directorate

General of

Accountability

(DRGC)

USD 3. 6

million

Training on the new budget nomenclature and accounts

replenishment in each province (26 teams).

Training on the consolidation, transparency and credibility of

accountability-related data in each province (26 teams) for

reliable accountability purposes.

Capacity building for the provincial branches of the

accountability service (provision of equipment)

Building of data collection capacity in Kinshasa and in the

provinces.

Establishment of an electronic filing system

II.2.

Capacity building

for the Court of

Auditors

USD 1.8

million

Training and awareness mission on accountability in 25

Provinces plus Kinshasa (this mission will be organized for

provincial deputies, provincial public finance managers and

civil society).

Procurement of intranet network hardware for the

implementation of the electronic archiving project and training

of the staff in charge of this service so that the archives as well

as the permanent files of the controlled entities and the accounts

are well preserved.

Improvement of the visibility of its activities, which implies

strengthening its communication skills and organising report

dissemination worships. Dissemination of the thematic reports

of the Court of Auditors, including the budget implementation

report (website - revitalization of the website of the Court of

Auditors)

Supply of IT equipment

Participation of three magistrates of the Court of Auditors in the

Conference on capacity building and experience sharing on the

TEAM-MATE software (audit and management system)

Organisation of training in Kinshasa (management of State cash

flow and financing (issuance and management of financial

securities).

8

2.1.5 Component III: Project Management and Coordination

No. Project Sub-

component

Estimated

Cost

Description of Sub-component

III Project

management and

coordination

USD 1.4

million

Project implementation support

Project audit

Quarterly progress reports

2.2 Technical Solutions Adopted and Alternatives Explored

2.2.1 The technical solution adopted for this project was presented in § 2.1.1, 2.1.2, 2.1.3, 2.1.4

and 2.1.5. PAMRIM-FP is in compliance with the National Strategic Development Plan (PNSD)

2017-2021, which is being finalized. It is in harmony with of the Public Finance Reform Strategic

Plan (PSRFP) adopted on 31 March 2010 by the Government, and constitutes the reference

framework for public finance reform in the DRC for all TFPs. Under the PAMRIM-FP, efforts will

be geared towards continuing the implementation of the tax administration reform and modernization

programme, subsequent to the weaknesses that were identified in the organization and functioning of

the DGI. The purpose is to create conditions that would boost domestic resource mobilization by

building the capacity of operational services. The programme will also consolidate the achievements

of Bank operations by continuing to build the capacity of DGRAD and the DRGC. The capacity-

building effort will be extended to the Court of Auditors (where the exercise was initially supported

by the EU, the World Bank and DFID until 2016), to ensure greater transparency and accountability

in public resource management. No alternatives were explored.

2.3 Project Type

2.3.1 PAMRIM-FP is an institution building project funded with an ADF grant. Preference was

given to this type of operation in order to continue providing the support needed to consolidate the

gains of previous projects that focused on the implementation of tax administration reform. The

objective is to create conditions that would boost domestic resource mobilization by building the

capacity of operational services through the following measure: (i) reform of structures and

strengthening of the tax management support system; (ii) reform of tax laws; and (iii) build human

resource capacity. The tax administration reform was implemented with financing from the resources

of the African Development Bank, provided through various programmes and projects, including: (i)

the Emergency Programme to Mitigate the Impact of the Financial Crisis (PUAICF) in 2009; (ii) the

Public Finance Modernization Support Project (PAM-FP) in 2012-2016; and (iii) Project for the

Mobilization and Revitalization of Human Resources for the Public Administration (PMR-RH) in

2016.

2.3.2 In addition, the Statistics and Public Finance Institutional Support Project (PAI-STATFIN

2013-2017), intended to continue the implementation of the PSRFP and support Government effort

to boost domestic resource mobilization, has contributed to: (i) the conduct of a study on the

technological resources required to certify the actual moisture content of commercial mining

products, with a view to improving the taxable base; (ii) the improvement of computerization of

DGRAD services and procedures; (iii) the modernization of mining royalty management and the de-

9

materialization of administrative documents; (iv) the adoption of the procedures manual for mining

royalty collection; (v) capacity building for and equipment of the Directorate of General

Accountability; and (vi) capacity building for the DTO, mainly through the implementation of an

electronic filing system to ensure fast and faithful reproduction of accounting documents and

records.

2.4 Project Cost and Financing Arrangements

The total project cost, excluding customs duties and taxes, is estimated at UA 16.666 million.

The ADF will contribute UA 15 million and the Government UA 1.666 million in kind (10% of the

total project cost).

Table 2.2. Estimated Project Cost by Component (in USD and UA thousand)

Table 2.2. Estimated Project Cost by Component (in USD and UA thousand)

Cost in USD Cost in UA

Components F.E. L.C. Total F.E. L.C. Total %

Component I: Consolidate domestic

resource mobilization capacity 11674.8 2918.7 14593.5 8433.6 2108.4 10542.0 63%

Component II: Consolidate transparency and

accountability 2182.5 3273.7 5456.2 1576.6 2364.9 3941.4 24%

Component III. Project management and

coordination 525.2 787.8 1313.0 379.4 569.1 948.5 6%

Total base cost 14382.5 6980.2 21362.7 10389.6 5042.4 15432.0 93%

Provisions for contingencies: 3% 256.4 384.5 640.9 185.2 277.8 463.0 3%

Provisions price escalation: 5% 427.3 640.9 1068.2 308.6 463.0 771.6 5%

Total project cost 15066.2 8005.6 23071.8 10883.4 5783.2 16666.6 100%

Table 2.3 Source of financing (in UA thousand)

Table 2.3 Source of Financing (in UA thousand)

Source of Financing Cost in Foreign

Exchange Cost in Local Currency Total % of total

ADF grant 10883.4 4116.6 15000.0 90%

Government - 1666.6 1666.6 10%

Total cost 10883.4 5783.2 16666.6 100%

10

Table 2.4.1 Estimated Cost by Expenditure Category (in UA thousand)

Expenditure Category ADF Govt.

%

Total

Cost

F.E. L.C. F.E. L.C. Total

A. Works 3455.6 00 0.0 1543.0 4998.6 30%

B Goods 4467.4 0.0 0.0 0.0 4467.4 27%

C Services 1246.5 0.0 0.0 0.0 1246.5 7%

D Operation 0.0 1634.5 0.0 0.0 1634.5 10%

E Training 907.7 2177.3 0.0 0.0 3085.0 19%

Total base cost 10077.2 3811.8 0.0 1543.0 15432.0 92%

Provisions (contingencies + price escalation

8%) 806.2 304.8 0.0 123.6 1234.6 8%

Total project cost 10883.4 4116.6 0.0 1666.6 16666.6 100%

Table 2.4.2 Summary of Estimated Cost by ADF Grant Expenditure Category

(in UA thousand)

Table 2.4.2 Summary of Estimated Cost by Expenditure Category (in UA

thousand)

Expenditure Category ADF – GRANT

F.E. L.C. Total

A. Works 3455.6 0.0 3455.6

B Goods 4467.4 0.0 4467.4

C Services 1246.5 0.0 1246.5

D Operation 0.0 1634.5 1634.5

E Training 907.7 2177.3 3085.0

Total base cost 10077.2 3811.8 13889.0

Provisions (contingencies + price escalation:

6%) 806.2 304.8 1111.0

Total project cost 10883.4 4116.6 15000.0

Table 2.5: Expenditure Schedule by Component (in USD thousand)

Table 2.5. Expenditure Schedule by Component (in USD thousand)

Components Year 1 Year 2 Year 3 Year 4 Total

Component I: Consolidate domestic resource

mobilization capacity 2.918.7 4.378.1 4.378.1 2.918.7 14593.5

Component II: Consolidate transparency and

accountability 1.091.2 1.636.9 1.636.9 1 091.2 5456.2

Component III. Project management and coordination 262.6 393.9 393.9 262.6 1313.0

Total base cost 4272.5 6408.9 6408.9 4272.5 21362.7

Provisions for contingencies: 8% 341.8 512.7 512.7 341.8 1.709.1

Total project cost 4614.3 6921.6 6921.6 4614.3 23.071.8

11

2.5 Project Beneficiary Area

Target Beneficiaries: The beneficiary area of the project is the whole country. The direct

beneficiaries of the institutional support are: the DGI, DGRAD, the DRGC and the Court of

Auditors. The country’s entire citizens are the project’s end beneficiaries. They will benefit from

improved domestic resource mobilization as well as from the transparency and accountability as

these would lead to effective economic development financing and improvement of the people’s

quality of life. Furthermore, the strengthening of transparency and accountability in public finance

management will contribute to better use of the resources mobilized, especially in the basic priority

sectors.

2.6 Participatory Approach to Project Identification, Design and Implementation

During project development, the preparation team conducted an extensive consultation with the main

direct beneficiaries, including the DGI, DGRAD, the DRGC, the Court of Auditors and COREF (the

latter coordinates public finance reforms in the DRC). For further complementarity, the preparation

team also organized consultation sessions with all TFPs that are members of the Economic and

Financial Governance Thematic Group, including the IMF, the European Union, the World Bank,

DFID, the Embassy of United States and the French Agency for International Technical Expertise.

Their views were taken into consideration in project design and formulation, and in the institutional

mechanism for PAMRIM-FP’s implementation.

2.7 Bank Group Experience and Lessons Reflected in Project Design

2.7.1 Lessons Learned: Since the resumption of cooperation with the country in 2002, the Bank

has initiated a series of institutional capacity building operations, such as PARER2 in 2003; the

Project for Mobilization and Revitalization of Human Resources for the Public Administration

(PMR-RH), approved in January 2011; the Public Finance Modernization Support Project (PAM-

FP), approved in April 2012, and PAI-STATFIN in 2013; on-going operations geared towards

building the State’s institutional capacity to steer the economy; and the Private Sector Development

and Job Creation Support Project (PADSP-CE), approved in June 2015. The Bank also initiated the

PAIM3 Project in 2002, mainly to improve the institutional and statutory framework for private

sector development. PAMRIM-FP design took into consideration the lessons learned from PAIM’s

implementation, namely that the project should provide for: (i) a limited number of beneficiary

structures; (ii) satisfactory risk analysis; (iii) a logical framework indicating expected outputs and

outcomes; (iv) an integrated Project Management Unit covering all technical, administrative and

financial aspects headed by only one officer; (v) harmonization of the schedule for the provision of

IT equipment with the one for training experts to use such equipment; (vi) continuity of project

managers; (vii) consultation of beneficiaries regarding the type of training and engagement of expert

trainers; (viii) definition of project implementation responsibilities; and (ix) establishment of a

monitoring/evaluation system for project outcomes4.

2 Institutional Support Project in Support of Economic Recovery and Reunification. 3 Multisector Institutional Support Project. 4 The recent BDEV report (March 2017) on Evaluation of the Strategies and Programmes of the African Development Bank (AfDB) in the

Democratic Republic of Congo 2004-2013 also notes that the effective ownership of projects by the national party is still a challenge. This gap results in delays in the ratification of loan agreements by Parliament, the recruitment of senior staff for project implementation units and the

fulfillment of conditions precedent to first disbursement. In addition, the performance of the Project Implementation Units (PIUs), despite

improvements in procurement and financial management, is still hampered by non-compliance with procurement plans, the excessively long procurement process, and the existence of ineligible expenditures in project financing.

12

2.7.2 Reflection of Lessons Learned: The above lessons were taken into account during the

project formulation. PAMRIM-FP is in line with the Government’s National Strategic Development

Plan (PNSD) 2017-2021 that is being validated, as well as the Public Finance Reform Strategic Plan

(PSRFP). It is also part of the implementation of the Bank’s 2013-2017 intervention strategy in the

DRC. Furthermore, (i) the number of beneficiary structures is limited to four; (ii) the risk analysis

was conducted in close collaboration with COCD; (iii) the logical framework complies with the

Bank’s standards for performance indicators; (iv) the Project Management Unit, which is already

managing a Bank-financed project (PAM-FP), will be headed by a single coordinator, and will

comprise executives with technical, administrative and financial expertise; (v) training will be

systematically planned after the supply of any equipment; (vi) measures will be taken to ensure the

effective implementation of the project mainly through the systematic preparation of a report on the

status of implementation and results (SIR) after each mission, and the quarterly implementation

report; (vii) training courses will be designed in consultation with and on the initiative of the

beneficiaries; (viii) responsibilities will be clearly defined within the institutional framework of

project implementation; (ix) regular close monitoring will be conducted by COCD, and the Bank will

undertake at least two supervision missions per year. In addition, the conditions precedent to the first

disbursement are limited to three and relate exclusively to the aspects essential to effective project

start-up.

2.7.3 Active Bank Portfolio in DRC: As at 31 December 2016, the Bank Group’s portfolio in

the Democratic Republic of Congo (DRC) comprised 35 operations for cumulative net

commitments of UA 951.54 million (UA). It consists of 23 national investment projects with a

combined total of UA 810.55 million, financed from ADF resources (of which UA 132 million under

the Transitional Support Facility, representing 16.28%), RWSSI, AWF, PIF and FFBC. It also

includes eight (8) regional operations totalling UA 134.31 million financed by the ADF and the

NEPAD—IIPPF Fund, and three (3) operations of the Congo Basin Forest Fund (CBFF) for a total

UA 5.97 million. Lastly, the portfolio includes a UA 0.71 million emergency assistance operation. At

the national level, the infrastructure sector (transport, energy, water and sanitation) accounts for 77%

of the portfolio, followed by the agricultural sector (13%), the governance sector (8%) and the social

sector (2%).). This breakdown shows the perfect match not only with thrusts of the CSP, but also

with the High 5s and the Bank’s Ten-Year Strategy.

2.7.3.1 The portfolio faces a major challenge characterized by an unusually slow pace of

implementation. The main constraints to the smooth implementation of operations are: (i) delays in

fulfilling the conditionalities of agreements, including the ratification of loans and the fulfilment of

conditions precedent to first disbursement; (ii) weak involvement of line ministries in project

monitoring; (iii) weakness in project financial management, with the consequent rejection of audit

reports and suspension of disbursement; and (iv) long delays in the processing of files at the Bank,

particularly in the energy and governance sectors, which do not have any experts posted to COCD.

2.7.3.2 To further improve portfolio performance, an improvement plan was discussed and

validated by stakeholders at a workshop held on 27 and 28 July 2017 under the Ministry of Finance.

This plan includes specific actions to correct the persistent weaknesses identified during the review.

These measures are mainly aimed at strengthening the Government's ownership of projects, speeding

up the ratification and fulfillment of the conditions for first disbursement, improving the monitoring

and evaluation system, speeding up the processing of no-objections and the pace of projects

implementation.

13

2.8 Key Performance Indicators

The logical framework will be the baseline for project monitoring and evaluation. The main

indicators selected for monitoring of the project outcomes for the period 2017-2021 are: (i) the

training of 550 multipurpose tax auditors and taxpayer account managers; (ii) the training of bailiffs

in the five provinces without them (Maniema, Bandundu, Eastern Kasai, Western Kasai and

Equateur); (iii) the rehabilitation of the premises of the DGE; (vi) the automation of the production

of the DGE statistical reports and management charts; (v) specialized training of personnel in

forecasting and auditing techniques in the mining, forestry, environment, petroleum and

telecommunications sectors; (vi) at least 1 workshop or mission to raise awareness on the need for

accountability organized by the Court of Auditors in each province; and (vii) training on

consolidation, transparency and credibility of accountability data in each of the 26 provinces.

III PROJECT FEAISIBILITY

3.1 Economic Benefits

3.1.1 By its very nature, PAMRIM-FP is dedicated to institutional capacity building. As such, it is

not the type of productive project that aims for an immediate financial return or a return on

investments. Thus, the financial analysis generally used for projects is not applicable to this one.

Institution building does not generate cash flows (expenditure and revenue) for financial analysis.

Consequently, given its nature and specific objectives, only economic analysis can reveal the overall

economic benefits generated by the project and the distribution of these benefits among the

beneficiaries.

3.1.2 PAMRIM-FP will help increase domestic resource mobilization and strengthen

accountability. When combined, these two aspects will allow for better allocation and use of public

resources. The increases in budget allocations through better resource mobilization will make it

possible to finance infrastructure with own resources in support of economic development. In turn,

this will help to improve the standard of living. Part of the resources will also be channelled to basic

social sectors (health and education), thanks to which child mortality will be reduced and

opportunities created especially for women, through better education.

3.2 Environmental and Social Impact

3.2.1 Environment: The project has no negative impact on the environment. Consequently, it is

classified in environmental Category III.

3.2.2 Climate Change: Project activities will be geared towards human and institutional capacity

building, and will have no adverse impact on the environment or climate change.

3.2.3 Gender: Despite the existence of a gender-friendly normative framework in the DRC,

inequalities persist in terms of women's participation in decision-making. Women make up about

52% of the population. However, cultural, political, economic and historical barriers continue to

hinder the emergence of structured female entrepreneurship. To help correct the persistent

shortcomings in the DRC with regard to gender, PAMRIM-FP is in line with the Bank's Gender

Strategy (2014-2018) "Investing in Gender Equality for Africa’s Transformation", and covers one of

the three pillars of the strategy, namely Pillar III" Knowledge Management and Capacity Building".

PAMRIM-FP will provide training opportunities for women, and a mandatory quota of at least 30%

will be reserved for women in all training courses.

14

3.2.4 Social: As indicated in §3.1.2, the increase in budgetary allocations brought about by better

resource mobilization will enable own-resource financing of infrastructure in support of economic

development for the improvement of living standards. Part of the resources will also be channelled to

basic sectors such as health, education and agriculture. In turn, this will contribute to better nutrition,

the reduction of infant mortality and the creation of opportunities, especially for women, through

better education.

3.2.5 Involuntary resettlement: The project will not entail any population displacement

IV IMPLEMENTATION

4.1 Implementation Arrangements

4.1.1 The project will be under the supervisory authority of the Ministry of Finance, which is the

executing agency. The Management Unit of the Public Finance Modernization Support Project

(PAM-FP) - the Fragile States Financing Unit (CFEF) within the Ministry of Finance - will be the

PAMRIM-FP executing agency. Set up within the Ministry by the Bank, this unit has a satisfactory

knowledge of the Bank's procedures.

4.1.2 Project Steering Committee (PSC): To guarantee the efficient orientation and

coordination of PAMRIM-FP activities, the PSC will be responsible for supervising and monitoring

the project implementation. In this regard, it will validate the budgets and progress reports prepared

by the CEP- CFEF-PAM-FP. The PSC will comprise: (i) the Director of Cabinet of the Ministry of

Finance, who will chair the Committee; (ii) the Coordinator of the CFEF- PAM-FP or his/her

representative; (iii) the Director General of the DGI or his/her representative; (iv) the Director of

General Accountability or his/her representative; (v) the President of the Court of Auditors or his/her

representative; (vi) the COREF Coordinator or his/her representative and (vii); the Director General

of DGRAD or his/her representative. Secretariat services for PSC meetings will be provided by the

CFEF-PAM-FP. The establishment of this structure is a condition precedent to first

disbursement.

4.1.3 PAMRIM-FP will be implemented by the CFEF-PAM-FP, which will be the project’s

operational management entity and will be responsible for ensuring the implementation of all project

components, and producing periodic project progress reports. To that end, the project management

team will comprise: (i) a project coordinator; (ii) a procurement expert; (iii) an administrative and

financial officer (RAF); (iv) an accountant; (v) a monitoring and evaluation expert; (vi) an

administrative assistant; (vii) a driver; and (viii) a messenger. Evidence of the renewal of the

mandate of the CFEF-PAM-FP as the executing agency to act as an interlocutor with the Bank,

and designation of focal points shall be a condition precedent to first disbursement.

4.1.4 Financial Management: The capacity of the Ministry of Finance in terms of project

financial management was evaluated in accordance with the Bank's policies and guidelines. Based

on this evaluation, the Ministry - which is currently implementing the PAM-FP project now in its

closing phase (end-August 2017) - has the necessary capacity and mechanisms to ensure PAMRIM-

FP’s financial management. The following financial management modalities were defined, taking

into account the lessons learned from the financial implementation of on-going projects and the level

of the project’s residual risk, deemed moderate. Fiduciary responsibility for the project will be

entrusted to the Executing Unit of the Public Finance Modernization Support Project (PAM-FP) -

CFEF (Fragile States Financing Unit). This unit has qualified financial staff from the Bank-financed

PAM FP and PRECI projects, whose performance is deemed satisfactory. The TOM2PRO software

and the provisions of the procedures manual developed under the MAP-FP will be used for

15

PAMRIM-FP’s financial management. Financial monitoring reports prepared in the current format

will be forwarded to the Bank latest 45 days following the end of each quarter (see detail in Annex

B4).

4.1.5 Procurement Arrangements

4.1.5.1 Applicable procurement policy and framework: All procurement of goods, works and

consulting services financed with the Bank's resources will be in accordance with the Procurement

Policy for Bank Group-financed Operations ("AfDB Procurement Policy"), October 2015 edition,

and in accordance with the provisions set out in the Financing Agreement. Pursuant to this policy

and following the various assessments carried out, it was agreed that: (a) all procurement of works

and goods except those relating to: (i) the provision of IT equipment, and various servers including

software; and (ii) the provision of vehicles for data collection under this project, will be carried out

in accordance with the country's procurement system ("National System"), defined under Law

No.10/010 of 10 April 2010 on Public Procurement ("LMP"); (b) procurement of: (i) IT equipment,

capturing equipment and servers (including software); (ii) vehicles for data collection; and (iii) all

consulting services will be in accordance with the Bank's procurement system ("AfDB System").

The procurement details (system, cost, schedule, methodology, type of review) agreed upon by the

Borrower and the Bank are set out in Table B.5.d and the Procurement Plan (Section B .5(e) of

Technical Annex B.5.

4.1.5.2 Organization of Procurement Implementation: Project procurement will be carried

out by procurement experts from the PAM-FP Project Implementation Unit of the Ministry of

Finance. In light of its experience in project management, the quality of its members and the

management tools at its disposal, this unit offers sufficient guarantees for the diligent

implementation of the project. It satisfactorily implemented the procurement process for the MAP-

FP, PRECI financed by the AfDB, for the six (6) FSF projects, as well as the PDPC, PRSDHU,

PDIFIM, PVSBG projects financed by the World Bank.

4.1.5.3 Risk and procurement capacity assessment (ERCA): Taking project specificities into

account, the Bank assessed: (i) risks at national, sector and project levels; and (ii) the capacity of

executing agencies. The outcomes of these assessments made it possible to determine, subject to the

implementation of the mitigation measures proposed in paragraph 5.9 of Annex B.5, the group of

items to be procured using the Bank’s procurement system and the one that could be procured using

the national system without any major risk

4.1.5.4 Special arrangements for using the national system: The use of the national system calls

for the following specific measures

(a) Additional eligibility waiver: Bank resources meant for project activity financing

are from the ADF window. Consequently, the eligibility rules specific to the ADF

window are a priori applicable. Following the assessment of procurement risks and

capacity, it was decided that the national procurement system will be used for part

of this project. Given that the eligibility rules for public contracts under Congolese

law vary from those of the ADF window, any practical incompatibility must be

prevented. It has been observed that Law No.10/010 of 10 April 2010 on Public

Procurement (referred to as "the Law") and its implementation instruments do not

provide for any specific restriction regarding participation in a bid invitation except

that the bidder must be qualified to bid and must not be under sanction imposed by

the Dispute Resolution Committee, as stipulated in Article 56 of the Decree on the

16

establishment, organization and operation the ARMP. Accordingly, all contracts

concluded under this project under the Congolese Government Procurement

System will follow the national eligibility rules to which are added the

provisions of paragraphs 5.1 to 5.10 of the ADB Policy. Consequently, for the

sake of illustration, the resources of the Bank grant may not be used to finance a

contract awarded to a bidder under sanctions imposed by the African Development

Bank Group, even if the national system is being used in the procurement process.

If, notwithstanding these provisions, a contract happens to be concluded with a

bidder under Bank Group-imposed sanction, the contract will not be financed by

AfDB grant resources. The list of companies under sanctions is available at

http://www.afdb.org/debarred.

(b) Other special modalities proposed: To adequately fulfil its fiduciary obligations in

connection with the use of the national system, the Bank agreed with the borrower

on a series of measures, the rationale, objectives and details of which are available

in Appendix B.5, paragraph B.5.7.1. These measures include, among others: (i) the

implementation of an audit of public procurement; (ii) follow-up and management

of complaints; (iii) supply by the Donee of the names of owners of enterprises

awarded contracts of significant value and publication by the Bank of the contracts

awarded against these names; (iv) control of the reasonable nature of prices

compared to the estimates of the contracting authority; (v) submission of quarterly

progress reports on the project specifying in particular the list of contracts signed

and the enterprises to which they were awarded, the complaints received and

addressed.

4.1.6 Disbursements: Disbursements will be made in accordance with Bank procedures. Two

methods will be used for disbursement of funds: (i) the special account method for operating

expenses; and (ii) the direct payment method (for payment of contracts for the procurement of goods,

services and works). A special USD account for the grant will be opened in the name of the

PAMRIM-FP in a commercial bank deemed acceptable to the Bank to receive the resources needed

to implement the project. The special accounts will be managed jointly by the Project Coordinator

and the RAF, with the Project Officer and the Accounting Officer acting as their respective

alternates. Evidence of the opening of the special accounts will be a condition precedent to the

first disbursement of the grant.

4.1.7 Audit Arrangements: Annual audits will be carried out by an independent external audit

firm to be recruited on a competitive basis and in accordance with the Bank's standard terms of

reference (ToRs). The recruitment of the external auditor will be the responsibility of the CFEF-

PAM-FP and could be carried out jointly with the Court of Auditors. Audit expenses will be

defrayed by the project. The ToRs of the external auditor will be adapted to include the specificities

of PAMRIM-FP, with a view to recruiting an independent firm with experience in the auditing of

AfDB-financed projects. The audits will be conducted in accordance with ISA/ISSAI international

standards. The financial statements audited by the independent firm will be forwarded to the Bank

latest six months following the close of the fiscal year concerned.

17

4.2 Monitoring and Evaluation

4.2.1 The monitoring/evaluation system will be based on: (i) regular monitoring of activities by

the Field Office (COCD); (ii) periodic supervision (two or more per year) and periodic reports by the

Project Management Unit (PMU), as well as audits; (iii) mid-term review to assess the project’s

implementation performance; and (iv) regular supervision by ECGF. Supervision will be conducted

preferably in coordination with other development partners, and will end with the systematic

preparation of a status of implementation and results (SIR) report after each mission. A

monitoring/evaluation mechanism will be established; it will take account of the specificities of the

project, and a quarterly progress report will be prepared. Upon project completion, a completion

report will be prepared. The indicative key stages are presented in the table below:

Table 3.1: Monitoring Milestones and Feedback Loop

4.3 Governance

4.3.1 The project implementation could encounter governance problems (fraud, corruption),

especially in fiduciary management. The procurement risk will be mitigated through the following

measures: for international competitive bidding and selection of consultants, the Bank will conduct a

preliminary review at each stage of the process by issuing a formal approval on procurement

documents, contract award proposals, and contracts. For national competitive bidding and shopping

for suppliers, national regulations will be used, taking into account the provisions of the Letter of

Agreement of 27 September 2015 on the application of national procedures (§B.5.7 of the Technical

Annexes). In this regard, project procurements will be supervised and audited to ensure an ex-poste

review of the records and contracts awarded. The CFEF- PAM-FP, will conduct all procurement

processes. The internal administrative and technical control, the complaints and claims management

mechanism – all of which are already established and operational - will make it possible to continue

with the promotion and expansion of the fraud and corruption control mechanisms. As concerns

financial governance, see the adequate measures taken on financial and audit management (§ 4.1.4, §

4.1.6. and § 4.1.7).

Schedule Milestone Monitoring Activities and Feedback Loop

Nov.-17 Board approval of grant Notification to the Government

Dec-17 Grant effectiveness

Signing of grant agreements and fulfilment of conditions

precedent to first disbursement

Feb-18 Launch mission Training for project officials

Jan-18 NGA and NSA

UN Development Business; national and regional

newspapers

Feb-18

Fulfilment of conditions precedent to the

first disbursement

Opening of the special accounts, creation and decision of

members of the EPP

Dec-17 Launch of initial activities

Preparation of the work programme and setting up of the

Project Implementation Unit

Dec-17 Preparation and launching of bid invitations

Preparation by the beneficiary structures and the Project

Implementation Unit

March-18 Bid evaluation and contract awards

Evaluation of bids by the PIU and award of contracts by the

relevant authorities

2017-2021

Implementation of activities, other project

activities Quarterly and annual progress reports

2017-2021 Launching, supervision and mid-term review

missions Mission reports

2018- 2021 Annual project audits Audit reports

June-22 Project completion Completion report

18

4.4 Sustainability

4.4.1 Country commitment and ownership of the project and policy justifying the support:

The PAMRIM-FP is in compliance with the 2017-2021 National Strategic Development Plan

(PNSD), which is being finalized. It is part of the Strategic Plan for Public Finance Reform (PSRFP).

The main reason for the Bank Group's involvement is to continue the wide-ranging public financial

management reform project through the implementation of the PSRFP and its 2016-2018 Action

Plan, as well as to pursue the actions and activities undertaken by the Government specifically aimed

at reforming and modernizing tax administration for greater domestic resource mobilization. Indeed,

increased mobilization of domestic resources will make it possible to finance infrastructure from

own resources in support of economic development for the improvement of living standards in the

DRC.

4.5 Risk Management

4.5.1 Measures have been taken to address risks of poor governance (fraud, corruption),

especially as regards procurement, financial management and disbursement conditions. Besides, the

risk of reversibility of Government commitments to reform and political instability are mitigated by

the country’s determination to continue consolidating national peace and security with the support of

the international community, as well as the reaffirmation of the commitment by the Government and

TFPs to carry on supporting reform implementation, particularly with respect to public finance

management.

Table 3.2: Risks and Mitigation Measures

4.6 Knowledge Building

4.6.1 The project will also contribute to knowledge building in the DRC, especially in public

finance management in support of public finance modernization. Knowledge will be acquired

through skills transfer from technical assistance and consultants to the staff in institutions and

businesses that will benefit from the project, particularly women. It will also be acquired through the

various data and knowledge platforms, user manuals, several user-training programmes and

workshops that will be organized. Furthermore, the knowledge acquired from this project as well as

its outcomes will be disseminated within and outside the Bank, thanks to rigorous

monitoring/evaluation of expected outputs and achievements, supervision missions, the project

completion report, seminars and IDEV reports.

Risk s Magnitude

of Risk Mitigation Measures

Socio-political risk:

insecurity and political instability

Reversibility of the

Government’s commitment to

pursue structural reforms

Limited human resources in the

structures benefitting from the

project to ensure efficient

implementation of selected

activities

High

Average

Average

Commitment of the country and the international

community to continue consolidating peace and

national security. The existence of an inclusive

political agreement for the consensual management of

the transition period up to the organization of the

elections.

This is institutional support and the Government has

reaffirmed its commitment to continue the process of

modernizing public finance and mobilizing domestic

resources. The existence a public finance reform action

plan whose implementation is supported by several

TFPs, including the Bank.

The intervention of high-level experts to ensure

training and transfer of knowledge in these structures

will mitigate this risk in the beneficiary structures

19

V LEGAL FRAMEWORK

5.1 Legal instrument: The proposed financial instrument is a grant of UA 15 million to the

Democratic Republic of Congo.

5.2 Conditions for Bank’s Intervention

A. Condition precedent to the effectiveness of the Grant Agreement

5.2.1 The Grant Protocol Agreement shall become effective on the date it is signed by the Donee

and the Fund.

B. Conditions precedent to the first disbursement

5.2.2 In addition to the effectiveness of the Grant Agreement, the ADF shall not make the first

disbursement of the grant unless the Donee fulfils the following conditions to the satisfaction of

ADF:

Provide evidence of the establishment of the Project Steering Committee (PSC) and

appointment of its members (§ 4.1.2);

Provide evidence of the confirmation of the CFEF- PAM-FP as the project executing

agency and appointment of focal points in each entity involved in the project to serve

as the PIU contact person (§ 4.1.3);

Provide evidence of the opening of a special account in an acceptable bank to receive

ADF grant resources. (§ 4.1.6)

5.3 Compliance with Bank Policies

5.3.1 This project complies with the applicable Bank policies, especially those governing

financial management of projects, procurements, disbursements and expenditures eligible for Bank

financing. No waiver is requested.

VI RECOMMANDATION

Management recommends that the Board of Directors approve the proposal to award a grant of

UA 15 million, from ADF resources, to the Democratic Republic of Congo for the purpose and in

accordance with the conditions set forth in this report.

I

Appendix I. Comparative Macroeconomic Indicators

Indicators Unit 2000 2011 2012 2013 2014 2015 2016 (e)

National Accounts

GNI at Current Prices Million US $ 6 246 21 107 24 602 26 845 29 951 31 679 ...

GNI per Capita US$ 130 310 350 370 400 410 ...

GDP at Current Prices Million US $ 4 335 24 577 27 555 32 672 35 909 38 421 40 808

GDP at 2000 Constant prices Million US $ 4 335 7 493 8 024 8 705 9 529 10 189 10 444

Real GDP Growth Rate % -6,9 6,9 7,1 8,5 9,5 6,9 2,5

Real per Capita GDP Growth Rate % -9,3 3,5 3,7 5,1 6,1 3,6 -0,6

Gross Domestic Investment % GDP 3,4 12,2 15,2 21,7 23,1 19,1 20,7

Public Investment % GDP 0,5 5,4 4,6 6,2 6,4 3,3 3,5

Private Investment % GDP 3,0 6,9 10,6 15,5 16,7 15,8 17,3

Gross National Savings % GDP -0,1 9,8 8,8 23,5 27,1 15,4 14,2

Prices and Money

Inflation (CPI) % 550,0 14,9 0,9 0,9 1,2 1,0 6,9

Exchange Rate (Annual Average) local currency/US$ 21,8 919,5 919,8 919,8 925,2 926,0 957,1

Monetary Growth (M2) % ... 32,5 24,0 19,9 18,5 6,8 5,4

Money and Quasi Money as % of GDP % 45,1 13,0 14,4 14,6 15,6 15,6 15,0

Government Finance

Total Revenue and Grants % GDP 4,0 20,2 15,2 17,2 16,2 14,6 14,6

Total Expenditure and Net Lending % GDP 8,5 15,7 15,4 12,2 13,3 14,7 15,1

Overall Deficit (-) / Surplus (+) % GDP -6,0 -0,5 1,8 4,0 1,3 -0,1 -1,6

External Sector

Exports Volume Growth (Goods) % -6,1 14,1 -8,6 41,0 -5,5 -4,2 -7,3

Imports Volume Growth (Goods) % 32,5 8,2 -5,2 16,0 30,5 -4,7 -7,1

Terms of Trade Growth % -9,0 -11,8 -5,2 -5,9 9,4 0,8 -2,3

Current Account Balance Million US $ -173 -1 281 -1 260 590 1 427 -1 407 -2 332

Current Account Balance % GDP -4,0 -5,2 -4,6 1,8 4,0 -3,7 -5,7

External Reserves months of imports ... 1,3 1,8 1,6 1,2 1,2 0,7

Debt and Financial Flows

Debt Service % exports 83,6 1,4 1,8 1,3 1,4 2,1 2,2

External Debt % GDP 290,9 22,6 21,5 19,6 18,9 22,7 24,4

Net Total Financial Flows Million US $ 192 3 379 4 270 206 2 048 2 791 ...

Net Official Development Assistance Million US $ 177 5 526 2 846 2 584 2 400 2 599 ...

Net Foreign Direct Investment Million US $ 72 1 687 3 312 2 098 1 843 1 674 ...

Source : AfDB Statistics Department; IMF: World Economic Outlook, April 2017 and International Financial Statistics, April 2017;

AfDB Statistics Department: Development Data Portal Database, March 2017. United Nations: OECD, Reporting System Division.

Notes: … Data Not Available ( e ) Estimations ( p ) Projections Last Update: June 2017

Congo, Dem. RepublicSelected Macroeconomic Indicators

0,0

2,0

4,0

6,0

8,0

10,0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

%

Real GDP Growth Rate, 2004-2016

0

10

20

30

40

50

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Inflation (CPI),

2004-2016

-12,0

-10,0

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

2 004

2 005

2 006

2 007

2 008

2 009

2 010

2 011

2 012

2 013

2 014

2 015

2 016

Current Account Balance as % of GDP,

2004-2016

II

Appendix I-a. Comparative Socio-economic Indicators

Year

Congo,

Dem.

Republic

Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2016 2 345 30 067 97 418 36 907Total Population (millions) 2016 79,7 1 214,4 6 159,6 1 187,1Urban Population (% of Total) 2016 39,5 40,1 48,7 81,1Population Density (per Km²) 2016 35,2 41,3 65,1 33,8GNI per Capita (US $) 2015 410 2 153 4 509 41 932Labor Force Participation *- Total (%) 2016 71,1 65,7 63,5 60,0Labor Force Participation **- Female (%) 2016 70,5 55,7 48,9 52,1Sex Ratio (per 100 female) 2016 99,5 100,1 106,0 105,0Human Dev elop. Index (Rank among 187 countries) 2015 176 ... ... ...Popul. Liv ing Below $ 1.90 a Day (% of Population) 2012 77,1 ... 14,6 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2016 3,2 2,5 1,3 0,6Population Grow th Rate - Urban (%) 2016 4,0 3,6 2,4 0,8Population < 15 y ears (%) 2016 45,9 40,9 27,9 16,8Population 15-24 y ears (%) 2016 19,5 19,3 16,9 12,1Population >= 65 y ears (%) 2016 3,0 3,5 6,6 17,2Dependency Ratio (%) 2016 95,5 79,9 54,3 52,0Female Population 15-49 y ears (% of total population) 2016 22,5 24,0 25,7 22,8Life Ex pectancy at Birth - Total (y ears) 2016 59,4 61,5 69,9 80,8Life Ex pectancy at Birth - Female (y ears) 2016 60,9 63,0 72,0 83,5Crude Birth Rate (per 1,000) 2016 41,1 34,4 20,7 10,9Crude Death Rate (per 1,000) 2016 9,9 9,1 7,6 8,6Infant Mortality Rate (per 1,000) 2015 74,5 52,2 34,6 4,6Child Mortality Rate (per 1,000) 2015 98,3 75,5 46,4 5,5Total Fertility Rate (per w oman) 2016 5,8 4,5 2,6 1,7Maternal Mortality Rate (per 100,000) 2015 693,0 476,0 237,0 10,0Women Using Contraception (%) 2016 23,1 31,0 62,2 ...

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2005-2015 9,1 41,6 125,7 292,2Nurses and midw iv es (per 100,000 people) 2005-2015 96,1 120,9 220,0 859,4Births attended by Trained Health Personnel (%) 2010-2015 80,1 53,2 69,1 ...Access to Safe Water (% of Population) 2015 52,4 71,6 89,4 99,5Access to Sanitation (% of Population) 2015 28,7 39,4 61,5 99,4Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2015 0,8 3,4 ... ...Incidence of Tuberculosis (per 100,000) 2015 324,0 240,6 166,0 12,0Child Immunization Against Tuberculosis (%) 2015 74,0 81,8 ... ...Child Immunization Against Measles (%) 2015 79,0 75,7 83,9 93,9Underw eight Children (% of children under 5 y ears) 2010-2015 23,4 18,1 15,3 0,9Prev alence of stunding 2010-2014 42,6 33,3 25,0 2,5Prev alence of undernourishment (% of pop.) 2015-2016 ... 16,2 12,7 ...Public Ex penditure on Health (as % of GDP) 2014 1,6 2,6 3,0 7,7

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2010-2016 107,0 101,2 104,9 102,4 Primary School - Female 2010-2016 101,8 98,4 104,4 102,2 Secondary School - Total 2010-2016 43,5 52,6 71,1 106,3 Secondary School - Female 2010-2016 33,3 50,2 70,5 106,1Primary School Female Teaching Staff (% of Total) 2010-2016 28,3 47,1 59,8 81,0Adult literacy Rate - Total (%) 2010-2015 77,2 66,8 82,3 ...Adult literacy Rate - Male (%) 2010-2015 88,8 74,3 87,1 ...Adult literacy Rate - Female (%) 2010-2015 65,9 59,4 77,6 ...Percentage of GDP Spent on Education 2010-2015 2,2 5,0 4,0 5,0

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2014 3,1 8,7 11,2 10,3Agricultural Land (as % of land area) 2014 11,6 41,7 37,9 36,4Forest (As % of Land Area) 2014 67,4 23,2 31,4 28,8Per Capita CO2 Emissions (metric tons) 2014 0,1 1,1 3,5 11,0

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)

** Labor force participation rate, female (% of female population ages 15+)

COMPARATIVE SOCIO-ECONOMIC INDICATORS

Congo, Dem. Republic

June 2017

0

20

40

60

80

100

120

2000

2005

2009

2010

2011

2012

2013

2014

2015

Infant Mortality Rate( Per 1000 )

C ong o, D em . R epu bli c A fr i ca

0

500

1000

1500

2000

2500

2000

2005

2009

2010

2011

2012

2013

2014

2015

GNI Per Capita US $

C ong o, D em . R epu bli c A fr i ca

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2000

2005

2009

2010

2011

2012

2013

2014

2015

Population Growth Rate (%)

C ongo , D em . R epub li c A fr ic a

01020304050607080

2000

2005

2009

2010

2011

2012

2013

2014

2015

Life Expectancy at Birth (years)

C ong o, D em . R epu bli c A fr i ca

III

Appendix II: Table of AfDB Portfolio in the DRC as at 31/07/2017

IV

Appendix III: Map of Project Area

V

Appendix IV: SUMMARY DESCRIPTION OF THE PROJECT

PROJECT COMPONENTS

Component I: Consolidate internal resource mobilization capacity

Sub-component I.A – Continue the Bank’s efforts to strengthen the capacities of the

General Taxation Directorate, for the efficient mobilization of tax revenue

Under the laws and regulations, the General Taxation Directorate (DGI) fulfils

all tax-related missions and prerogatives concerning revenue, auditing,

collection and litigation in connection with income and other taxes, levies and

deductions. In this regard, it is responsible for studying and submitting to the

competent authority the relevant bills, decrees and orders on the topic. It must

be consulted for any text or convention with tax implications or any approval

of eligibility of any investment project for any tax exemption regime.

It should be noted that the DGI has exclusive jurisdiction nationwide.

Nonetheless, article 204, paragraph 16 of the 2006 Constitution transferred

some of its prerogatives to the provinces by stipulating that “income and other

taxes and provincial and local levies, including land taxes, taxes on rental

income and taxes on automobiles, fall under the exclusive jurisdiction of the

provinces”.

As a result of that tax-related decentralization, the DGI manages the following

taxes, which fall under the purview of the central government: tax on earnings

and profits (IBP), professional tax on emoluments (IPR), tax on income from

securities or securities tax (IM), exceptional tax on the emoluments of

expatriate personnel (IERE), professional tax on services provided by non-

residents, and value-added tax (VAT). Based on its current configuration, the

DGI comprises: (i) a central administration; (ii) an operational directorate: the

Large Enterprises Directorate (DGE); (iii) an urban directorate in the city of

Kinshasa; (iv) a provincial directorate in each province; and (v) external

services in the urban and provincial directorates: tax centres (CDI) and

synthetic tax centres (CIS).

In 2003, the Government of the Democratic Republic of Congo agreed on a

programme with the International Monetary Fund (IMF) to reform and

modernize tax administration, following deficiencies found in the organization

and functioning of the DGI. The purpose of the reform was to create conditions

conducive to increased mobilization of revenue by strengthening the capacity

of operational services, with a focus on three main areas: (i) reform of

structures and strengthening of the tax management support mechanism; (ii)

reform of tax laws, and (iii) strengthening of human resource capacity.

VI

Implementation of the tax administration reform was financed with resources

from the African Development Bank through different programmes and

projects, including: (i) the Emergency Programme to Mitigate the Impact of the

Financial Crisis (PUAICF) in 2009; (ii) the Public Finance Modernization

Support Project (PAM-FP) in 2012-2016; (iii) the Project for Mobilization and

Revitalization of Human Resources of the Public Administration (PMR-RH) in

2016.

1. The Emergency Programme to Mitigate the Impact of the Financial Crisis, which

cost USD 4.8 million, allowed the DGI to undertake the following major activities: (i)

modernization and modelling of seven provincial tax directorates that did not have a tax

centre, namely Bandundu, Équateur, Western Kasaï, Eastern Kasaï, Maniema, Orientale

Province and South Kivu; (ii) provision of computer equipment for several services; (iii)

computerization of human resource management; (iv) connection of the DGI to the RMA

Bank network; (v) VSAT connection with all provincial tax directorate headquarters; (vi)

training of 500 staff and officers on the conduct of tax missions, two staff on procurement and

42 tax inspectors on internal audit.

2. The Public Finance Modernization Support Project (PAM-FP) in 2012-2016, which

cost USD 2.7 million, financed: (i) the construction and rehabilitation of the buildings of the

headquarters of the Provincial Tax Directorate (DPI) in Katanga; (ii) the construction of the

synthetic tax centre (CIS) in Bunia, Ituri Province; (iii) construction of three tax centres (CDI)

in the former Western Kasaï, Eastern Kasaï and Orientale provinces. Office furniture was

purchased for these buildings under the project.

3. In 2006, the Project for Mobilization and Revitalization of Human Resources of the

Public Administration (PMR-RH) financed the training of 20 tax inspectors on the basic

concepts of internal audit, risk management, internal audit and drafting of procedures

manuals; the training of 100 special tax auditors to upgrade their skills in the auditing of

businesses in strategic sectors, namely oil and gas, mining, telecommunications, real estate

and banking, at a rate of 20 agents per sector.

Despite the significant progress made in tax administration with regard to the

organization of the operational entities set up by the reform, the General

Taxation Directorate still faces a number of challenges that prevent it from

mobilizing more tax resources for the public treasury:

The Large Enterprises Directorate (DGE), which accounts for about 85%

of DGI tax revenue, needs to be modernized. It is located in the basement

of the DGI building. It should be provided with viable, suitable and

modern infrastructure, to offer staff decent working conditions for

increased mobilization of public tax resources and to ensure that

taxpayers are served under the best conditions. This will completely

change the image of Congolese tax administration.

The absence of electronic archiving of tax and administrative data makes

the handling of taxpayers’ cases inefficient and the administrative

machinery too cumbersome. Electronic archiving is therefore of

necessity.

VII

Computerization of the tax management services and systems of the

operational directorates, primarily in Kinshasa and Lubumbashi. This

entails establishing a veritable internal and external communications

network, digital procedures and computer connections. With this

computerization, it is necessary and appropriate to organize training for

user agents and officers, and for all those who may intervene in the

system.

These operational constraints are in addition to the difficulties of

organizing regular sessions for DGI officers and agents to upgrade their

skills. The proportion of agents trained for technical missions remains

technically below average, representing approximately 30% of the entire

workforce. Specific training on thematic modules is necessary to give

professionals a full understanding, based on the service or orientation, of

the main activities of the DGI: (i) revenue (grasp of the taxpayers’

register and the need for taxpayers to fulfil their obligation to file

returns); (ii) tax audit (understanding of civic responsibility with regard

to taxes and the fight against tax fraud); (iii) collection (ensuring that all

tax revenue collected go into State coffers), and (iv) litigation

(understanding the dispute rate and proceedings brought by taxpayers).

The Services Inspection Agency, which is responsible for internal

oversight, risk management and internal audit under the General

Directorate, also needs to be reformed. The agency has kept its old

configuration, essentially based on tax crosschecking missions, service

support (still not well defined) and irregular audits of services that do not

have modern work tools or resource persons specializing in the field.

At the provincial level: The Public Finance Modernization Support Project

financed the establishment of computerized revenue, expenditure and payroll

chains in the three targeted provinces, namely Kongo Central, Maniema and

Tshopo. The benefits of that initial investment phase must be consolidated

through production assistance, to ensure that the integrated computer system

operates in a harmonious and rational manner over a long period.

It is necessary to provide technical support for the applicative maintenance of

the system through onsite visits, provision of support, both remotely and in

situ, and annual maintenance of the Oracle JD Edwards software, as well as the

establishment of quality indicators that will be used to determine whether the

information system is functioning properly and is being used fully. It is also

imperative to plan for the upkeep, maintenance, security and monitoring of the

functioning of the computer infrastructure (hub and data centre), to ensure the

management of conflict and potential interruptions in each province targeted,

and to organize supplementary training (preparation and support off shorts) in

situ, as well as field workshops for final users and administrators of the

infrastructure.

VIII

The overall goal is to ensure the longevity and maintenance of the

computerized revenue, expenditure and payroll chains in Kongo Central,

Maniema and Tshopo provinces, set up as part of the PAM-FP through:

Technical assistance for the piloting of the computer infrastructure

management system in Kongo Central, Maniema and Tshopo

provinces. The PAM-FP financed the establishment of the computerized

revenue, expenditure and payroll chains in the three provinces targeted.

The Axenet-ITEC Group, to which the contract was awarded, supplied

and installed computer equipment in the three provinces. It also

completed the principal steps of the process: analysis of functional needs,

definition of parameters and receipt of the new information system,

training of key users and installation of the software at the different

project sites. The benefits of that initial investment phase must be

consolidated through production assistance, to ensure that the integrated

computer system operates in a harmonious and rational manner over a

long period. In this regard, a directly negotiated contract will be

concluded with the Group to provide technical support for the applicative

maintenance of the system through onsite visits, provision of support

both remotely and in situ, and annual maintenance of the Oracle JD

Edwards software, as well as the establishment of quality indicators that

will be used to determine whether the information system is functioning

properly and is being used fully. The Group will also be responsible for

the upkeep, maintenance, security and monitoring of the functioning of

the computer infrastructure (Hub and Data Centre), for the management

of conflict and potential interruptions in each province targeted.

Furthermore, the Group will organize supplementary training

(preparation and off-shorts support) on the sites, as well as field

workshops for final infrastructure users and administrators. Therefore, it

is necessary to (i) acquire dedicated liaison bandwidths for all sites in

both the provinces and Kinshasa; (ii) renew licences and support; (iii)

extend the Matadi fibre optic line to the new data centre; and (iv) install

an adequate solar-based solution in Kasongo to supply power to the

entire system.

Training on the procedures and computerized management of local

public finances in Kongo Central, Maniema and Tshopo provinces.

There will be specific training modules on the computerized management

of revenue, expenditures and payroll for 70 experts from provincial

financial centres, provincial budget divisions, public service and finance

and budget officials in Governors’ offices. These modules will be

developed by the consultant and approved by the Public Finance Reform

Committee (COREF). A contract will be signed with the consultant SIMAC,

whose selection process, which had reached the contract negotiation phase,

fell through in 2015 owing to lack of financing.

IX

Sub-component I.B – Continue to enhance the capacity of the General Directorate for

Administrative, Judicial, Land and Investment Revenue (DGRAD), in order to increase non-tax

revenue

The General Directorate for Administrative, Judicial, Land and Investment

Revenue (DGRAD) was established following the observed failure of the

procedures and methods of support or mobilization of non-tax revenue for the

public treasury. Under the existing laws and regulations, DGRAD carries out

all missions and prerogatives concerning the authorization and collection of

administrative, judicial, land and investment revenue stemming from the State

budget, declaration and liquidation operations that come under the purview of

revenue services or executing administrations. Non-tax revenue under the

purview of DGRAD are contained in Order-Law No. N-13/002 of 23 February

2013 establishing the nomenclature of fees, taxes and levies of the central

government.

Since 2008, DGRAD has engaged in a vast programme of reforms as part of

implementing the Public Finance Reform Strategic Plan. In this context, the

Public Finance Modernization Support Project (PAMFIP), which was financed

by the European Union in coordination with the European Development Fund

(COFED), which ended in May 2016, led to: (i) the improvement of non-tax

revenue nomenclature; (ii) the continuous professional training of DGRAD

staff; (iii) the establishment of the SAP system for the computerized

management of the DGRAD revenue chain at five locations (Kinshasa,

Lubumbashi, Matadi, Kisangani and Goma); (iv) the establishment of a code of

procedures for non-tax revenue; and (v) the acquisition of software for the

management of the securities and administration printout inventory.

With the Debt Reduction and Development Contract (C2D) with the French

Development Agency (AFD), DGRAD had a plan of action for the

computerization of financial administration, to facilitate the interface between

financial agencies, i.e., the exchange of data on the same platform between the

Central Bank, the Treasury Directorate, Authorization and Public Accounting.

The Democratic Republic of Congo has signed a grant agreement with the

African Development Bank for the implementation of the Project for

Institutional Support in Statistics and Public Finances (PAI – STATFIN),

which is intended to help build the State’s institutional capacity to steer the

economy and consolidate public finance management.

Specifically, the project aims, on the one hand, to develop a national statistics

system for the generation of reliable and up-to-date statistics on development

goals, to measure the outcomes and impacts of projects and programmes

supported with government action, to monitor and evaluate the implementation

of economic reforms and policies and, on the other, to strengthen the efficiency

of institutional systems and mechanisms for the collection of mining fees and

those necessary for greater transparency and accountability in public finance

management in general.

X

As part of PSRFP implementation and support for the Government’s efforts for

greater internal resource mobilization, the support provided under PAI-

STATFIN will be used primarily to (i) conduct a study on the technological

resources needed to certify the actual humidity rate of merchant mining

products, with a view to expanding the tax base; (ii) improve the level of

computerization of DGRAD services and procedures; (iii) modernize the

management of mining fees and the de-materialization of administrative

documents; and (iv) prepare a procedures manual for the collection of mining

fees.

Despite the significant progress made in the administration of non-tax

revenue, with regard to the organization of operational entities, DGRAD

still faces major challenges that are impeding its capacity to mobilize

public revenue.

Among others, this entails resolving the issue of lack of qualified personnel by

enhancing DGRAD’s capacity through the training of agents, for each orientation service,

in order to enhance the Directorate’s main activities, particularly with regard to: (i) revenue

(understanding of the taxpayers’ register); (ii) audit prior to the authorization of declaration

and liquidation; (iii) enhancement of the capacity to collect mining and telecommunications

fees; (iv) enhancement of DGRAD’s collection capacity; (v) reform of the Services

Inspectorate, which has remained confined in its traditional role of cross-checking and service

support. The reform should allow the Inspectorate to fully perform its risk audit and internal

audit functions for the General Directorate; and (vi) computerized archiving of administrative

documents and securities printouts. PAMRIM-FP falls under this framework.

Component II: Consolidate transparency and accountability

Sub-component II.A - Consolidation of the capacity of the General Accountability

Directorate (DRGC)

The aim is to continue the reforms undertaken by the Government and to consolidate

the gains obtained with PAI-STATFIN. As indicated above, the aims of PAI-

STATFIN are, on the one hand, to develop a national statistical system for the

generation of reliable and up-to-date statistics on development goals, to

measure the outcomes and impacts of projects and programmes supported with

government action, to monitor and evaluate the implementation of economic

reforms and policies and, on the other, to strengthen the efficiency of

institutional systems and mechanisms for the collection of mining fees and

those necessary for greater transparency and accountability in public finance

management in general. It is worth noting that that support concerned only 11

provinces, whereas today the Democratic Republic of Congo has 26 provinces.

In this context, the goal with PAMRIM-FP is to expand coverage to the 15

new provinces that were not initially selected by PAI-STATFIN through:

(i) additional training on the law governing its preparation from the programme

budget; (ii) enhancement of the capacity of provincial accountability offices

(provision of electrical equipment); (iii) training and various upgrading

seminars on the new law on public finances (LOFIP) (techniques for the

collection of accounting and financial data for 360 agents); (iv) training on the

consolidation, transparency and credibility of accountability data (26 teams);

(v) electronic archiving; and (vi) data collection capacity.

XI

Sub-component II.B - Consolidate the capacity of the Audit Court

The Audit Court of the Democratic Republic of Congo (DRC) is the highest

court-like institution for the control of public finances. It has been provided for

in all the different Constitutions that the DRC has had and is currently provided

for under articles 178 to 180 of the Constitution of 18 February 2006, as

amended by Law No. 011/002 of 20 January 2011 on the revision of certain

articles of the Constitutions of the DRC. It is organized by Order-Laws Nos.

87-005 of 6 February 1987 and 87-031 of 22 July 1987. It has three principal

missions: (i) examine and liquidate the accounts of the general administration

of those who are accountable to the public treasury; (ii) ensure that there is no

overrun for any expenditure item and that transfers and additional expenditures

are approved by Parliament; and (iii) terminate the accounts of State

departments. In this regard, the Audit Court is responsible for examining the

general treasury account, the accounts of public accountants and de facto

accountants, and to control the management and accounts of public institutions

(article 21). It judges any public official who commits a management error

(article 23).

In fulfilling its broad constitutional mandate, the Audit Court faces a number of

challenges that inhibit its efficiency, notably the need to: (i) increase the

visibility of its activities, which entails strengthening its computer and

communications capacity, and its deployment in the provinces as part of the

community policy; and (ii) strengthen the quality and quantity of its human

capacity, in order to contribute effectively to the promotion of good

governance, the improvement of transparency in the management of public

finances, and the appropriation of accountability by public finance managers at

all levels. PAMRIM-FP falls within that framework.

Therefore, PAMRIM-FP will support: (a) raising of the visibility of its

activities, which entails strengthening its computer capacity (website);

(b) strengthening of its communications capacity (workshops on the

dissemination of reports); (c) deployment in the provinces as part of the

community policy; (d) training and accountability awareness-raising

workshop; and (e) acquisition of Intranet equipment for the

implementation of the project for electronic archiving and training of

personnel assigned to this service, to ensure proper conservation of

archives and permanent records of audited entities and accounts.

XII

Appendix V – STATUS OF PUBLIC FINANCE REFORM

DDEEMMOOCCRRAATTIICC RREEPPUUBBLLIICC OOFF DDUU CCOONNGGOO

MMIINNIISSTTRRYY OOFF FFIINNAANNCCEE

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PPRROOSSPPEECCTTSS

JJaannuuaarryy 22001177

XIII

I. INTRODUCTION.

To modernize the public finance management system, the Government of the Republic

adopted, in March 2010, a strategy known as Public Financial Reform Strategic Plan.

This strategy, which constitutes the foundation and the Government's reference framework for

public finance reforms, is structured around the following six pillars:

budgetary reform aimed at equipping the DRC with a comprehensive, multi-annual and

participatory budgetary framework that is in line with national priorities;

tax system reform aimed at increasing public revenue through the modernization of

fiscal instruments and tax administrations;

improvement of public expenditure management so as to strengthen the computerized

public expenditure chain, payroll management, the procurement system and to ensure

regular debt servicing;

public accounting and cash flow management reform aimed at strengthening the

accounting system and improving cash management;

Strengthening of the public finance control system in order to guarantee proper use of

public funds and assets. This strengthening consists in providing the various oversight

bodies with technical and institutional support; and

Financial decentralization for the purpose of improving the management of public

finance to ensure a better contribution of the latter to poverty reduction and the

development of the provinces.

The satisfactory implementation of the reform strategy by the Government called for

preparation of a rolling operationalization document known as the "Priority Action Plan" -

PAP for short - the latest version of which covers the period 2016-2018.

For fiscal year 2016, the Government's efforts focused on the following key areas:

1. . Implementation of the programme budget;

2. . Strengthening of the budget function in ministries

3. . Promotion of budgetary comprehensiveness

4. . Strengthening of citizen participation and transparency in the budget process

5. . Improvement of the budget preparation process

6. . Consolidation of VAT reform

7. . Control of the tax base

8. . Improvement of tax legislation

9. . Computerization of finance administrations

10. . Payment of the authorization devolution process

XIV

11. . Improvement of the budgetary control mechanism

12. . Strengthening of the ex-ante budgetary control

13. . Improvement public debt management

14. . Completion of public accounting regulatory, procedural and institutional framework

15. . Setting up of the DGTCP

16. . Computerization of accounting procedures

17. . Formalization and standardization of IGF control procedures

18. . Strengthening of the function of internal audit and oversight within ministries and

institutions

19. . Establishment of formalized coordination between the supervisory structures

20. . Strengthening of political control over public financial management

21. . Computerization of the Public Financial Control System

22. . Update of the minimum platform for public finance reform in the provinces

23. . Streamlining of public financial management procedures in provinces

24. . Promotion of the participatory budget

The table below presents the balance sheet as of 2016 and the prospects.

XV

AARREEAASS OOFF PPUUBBLLIICC FFIINNAANNCCEE RREEFFOORRMM IINN 22001166 AANNDD PPRROOSSPPEECCTTSS

AREAS ACTIVITIES CARRIED OUT IN 2016 ACTIVITIES IN PROGRESS PROSPECTS

PILLAR I: BUDGETARY REFORM

Implementation of the programme

budget

Preparation of annual performance projects for

11 ministries and 2 institutions

Continuation of the preparation of

annual performance projects for

other ministries

Validation of budget

programme templates

Development of the

managerial chain

(definition of the skills of

the actors)

Strengthening of the budgetary

function in ministries

Recruitment of DAF personnel for 12

ministries

Procurement of office and IT

equipment for DAF in 12

ministries

Organization of the

competition exam for the

recruitment of the DAF

personnel for 12 other

ministries.

Promotion of budgetary

exhaustiveness

Census of auxiliary bodies of Ministries Health

and ESU with a view to ensuring their

inclusion in the Budget Act

Continuation of the census

of the auxiliary bodies in

the other ministries

Preparation of draft decrees and a protocol

agreement relating to the inclusion of external

resources in the Budget Act of the year

Signing and publication of

the draft decree and

protocol agreement relating

to the inclusion of external

resources in Budget Act for

the Year.

Strengthening of citizen

participation and transparency in

the budget process

Participation of civil society organization

(CSOs) in the budget orientation seminar

(continuing activity))

Involvement of civil society

organizations in the entire

budget cycle

Publication of documents and budget

information accessible to the public

Improve the content of the 8

documents on budget

transparency and raise the

Produce the 8 documents

according to international

norms and standards

XVI

awareness of the services about

the publication deadlines.

Improvement of the budget

preparation process

Preparation of the draft decree on fiscal

governance

Validation and signing of

the decree relating to

budgetary governance

PILLAR II: TAX REFORM AND TAX ADMINISTRATION

Consolidation of the VAT reform

Production of the concept note for the IT

project relating to VAT data collection and

management.

Procurement of a computer

system relating to the

collection and management

of VAT

Control of the tax base

Signing of a contract with an American firm

for molecular marking

Establishment of the

mechanism for molecular

marking of petroleum

products

Study to assess the tax potential of the mining

sector

Finalisation of the report Implementation of the

recommendations of the

study in an effort to

maximize revenue in the

mining sector

Implementation of the

recommendations of the

study in an effort to

maximize revenue in the

mining sector

Improvement of tax legislation

Improvement of the tax

legislation Simplification

and harmonization of the

nomenclature of Central

Government, Provinces and

Devolved Territorial

Entities

XVII

Revision of Ordinance-Law

No. 13/003 of 23 February

2013 to reform procedures

relating to the basis, control

and modalities for the

collection of non-tax

revenue

Computerisation of financial

services

Program for migration from

ASYCUDA++ to

ASYCUDAWorld

Establishment of the

DGDA enhanced integrated

computerization program

Procurement of non-tax revenue management

software for DGRAD

Further configuration of in SAP

software of non-tax revenue

collection procedures

Establishment of the

DGDA enhanced integrated

computerization program

Establishment of a

computer system for

integrated tax management

Procurement of the software and hardware for

the development of online procedures: online

filing of tax returns and online payment of

taxes

Development of online

procedures: online filing of

tax returns and online

payment of taxes

PILLAR III: EXPENDITURE MANAGEMENT REFORM

Payment authorization devolution

process

Validation of the terms of reference relating to

the production of the plan for the gradual

devolution of payment authorization

Preparation of a plan for the

gradual devolution of

payment authorization

Elaboration

Validation of the terms of reference relating to

study on the extension of the expenditure chain

to the DAF

Study on the extension of

the expenditure chain to the

DAF

Improvement of the budget

regulation mechanism

Production of draft EPB and PTR drafting

guides and PPM integration flow diagram

definition in a single matrix Process of

validation of the PEB and PTR development

guides and schema definition PPM integration

flows in a single matrix

Process for the validation of the

PEB and PTR development

guides and definition of the flow

chart for the integration of the

PPM in a single matrix

Drafting of the PEB and

PTR development guides

and definition of the flow

chart for the integration of

the PPM in a single matrix

XVIII

Enhancement of ex ante budgetary

control

Technical validation of the draft

budget controllers' administrative

regulation

Reactivate the function of

budget controllers in the

context of results-based

management

Development of a Budget

Controllers' methodological

guide and revision of the

vade-mecum of supporting

documents for public

expenditure

Improvement of public debt

management

Development of draft instruments aimed at

enhancing the legal framework of public debt

management

Adoption of:

Public Debt Act,

Decree on the

retrocession and State

guarantee,

Decree on the

monitoring the debt

situation of public

enterprises

PILLAR IV: ACCOUNTING AND CASH FLOW MANAGEMENT

Completion of the public

accounting regulatory, procedural

and institutional framework

Adoption of procedure manuals for public

expenditure and revenue accounting and

preparation of the draft orders and

implementing instructions

Finalization of the nomenclature

of PCE accounts and the

accounting ledger cards

Validation and signing of

the instruction relating to

the PCE accounts

nomenclature

Final validation of the

manuals after

implementation of the

accounting procedures in

the SAP IT system

Finalization of the decree establishing the

DGTCP

Study on the jobs and skills

needed to operationalize the

Establishment of the

XIX

Establishment of the DGTCP

DGTCP

DGTCP

Finalization of the order on the organization

and functioning of the public accountants

national network

Development of the mapping of

accounting positions and

installation of public accountants

Establishment of the

national network of public

accountants

Computerization of accounting

procedures

Setting of procedures in the SAP accounting

information system

Production of financial

statements using the

computerized system

PILLAR V: STRENGTHENING OF GOVERNMENT FINANCIAL CONTROL SYSTEM

Formalization and standardization

of the control procedures of the

General Inspectorate of Finance

(IGF)

Development of the procedures manual and

audit and control guides for the General

Inspectorate of Finance

Quality control for the procedures

manual and the audit and control

guides of the General Inspectorate

of Finance by an international

consultant

Strengthening of the internal audit

and control function within

ministries and institutions

Technical assistance for Financial Inspectors

and Technical Inspectors of Sector Ministries

on internal control and risk-based audit (RBA)

Development of a mapping

system, a risk-based audit plan in

five ministries (EPSP, Health,

ITPR, Rural Development,

Agriculture)

Development of a mapping

system, a risk-based audit

plan in the remaining

ministries

Establishment of a formalized

coordination system between

control structures

Establishment of a

consultation framework for

internal and external

control bodies and

institutions (protocol

agreement)

Strengthening of the political

control of public finance

management

Production of the review procedure manual of

the Budget Act of the year and the

Accountability Act

Computerization of the public

financial control system

Procurement of the software known as

TeamMate for the Court of Auditors

PILLAR VI: FINANCIAL DECENTRALISATION

Update of the minimum platform for

public finance reforms in the

Organization of missions on the status of the

public financial management system in the

Organization of the national

forum on financial

Definition of a new

programme for public

XX

provinces provinces decentralization in the DRC finance reform in the

provinces (Revision of the

minimum platform of

reforms in provinces)

Streamlining of public financial

management procedures in

provinces.

Feasibility study for the establishment of an

integrated system of public finance

management in the provinces (Equateur,

North-Kivu, Eastern Kasai and Kinshasa)

Establishment of an

automated integrated

system for the management

of revenue, expenditure and

payroll in the provinces

(Tshopo, Maniema and

Kongo Central)

Promotion of the participatory

budget

Popularization of participatory budget

mechanisms and citizen participation in the

local budget processes in Equateur, North

Kivu, Kinshasa and Eastern Kasai.

(Ownership of the conclusions of the national

forum).

Implementation of the

participatory budget in 30 ETDs

(Kinshasa, North Kivu, Eastern

Kasai and Equateur provinces)

Implementation of the

participatory budget in 150

ETDs within three years

Preparation of participatory budgets for 16

devolved territorial entities (ETD) of the city

of Kinshasa