World Bank and Government of Mozambique

Country Portfolio Performance Review

September 17-18, 2008

Susan Hume

World Bank Country Program Manager

Overview of Presentation

• CPPR Objectives

• Overview of Mozambique Program

• Portfolio Snapshots

• Traffic Light Table

• Successes Over the Past Year

• Portfolio Challenges

• Going Forward in Fiscal Year 2009

CPPR Objectives

• Taking the temperature of the entire portfolio once a year (through traffic light table)– Mini-CPPR (in March) focuses on selected projects,

but also completes traffic light table

• Taking opportunity of participation of high-level and technical government staff to discuss with World Bank project-specific issues and action plans

• Focusing on key themes– Last year’s focus was on the specifics of how the

World Bank monitors the portfolio (copy distributed)– This year we have a presentation on the Bank’s

strategy for moving projects to on-CUT

Overview of the World Bank ProgramPillar 1: Governance• Increased citizen voice and demand for accountability

Pillar 2: Access to Key Services• Efficiency and transparency of service delivery

Pillar 3: Sustainable and Broad-based Growth• Rural Development• Infrastructure Development• Regional Integration• Developing relevant skills for the labor market (higher education,

science and technology)

Cross-cutting• HIV/AIDS• Private Sector Development• Capacity building

Portfolio Snapshot (1)• 18 ongoing projects; net commitments

$853 m– 8 Infrastructure (59%)– 4 Human Development (education & health)

(21%)– 4 Public Sector and Decentralization (13%)– 2 Agriculture and Rural Development ( 7%)– The above includes:

3 Global Environmental Facility (GEFs) projects2 regional projects

• 36 Trust Funds; commitments $198 m

Portfolio Snapshot (2)

• Fiscal year 2008 disbursements: $198 m (87% of forecast)

• Estimated disbursements FY09: $220 m• Six projects closing in FY09:

– Higher Education – HIV Treatment Acceleration – Decentralized Planning and Finance– National Water Development II– Railways and Ports Restructuring– Communication Sector Reform

Portfolio Snapshot (3)

• For next three years, about $225 m per year in operations

• 6-7 planned new projects for FY09:– Poverty Reduction Support Credit 5 ($90 m)– Health Service Delivery ($38 m)– Competitiveness and Private Sector Development

($25 m)– Market-Based Irrigation ($50 m)– National Decentralized Planning & Finance ($25 m) – Regional Communications Infrastructure Program -

Phase 3 ($33 m)– Energy APL2 (possible) ($40 m)

Traffic Light Indicator Table

Key Trends in Table (1)

• Sept 2007 there were 3 problem projects; Sept 2008 there is only one problem project

• Six projects have maintained good performance since last September: – National Water Development II– Financial Sector Technical Assistance – Maputo Municipal Development– Roads and Bridges Management and Maintenance II– Railway and Ports Restructuring – Technical and Vocational Education and Training

Key Trends in Table (2)• The following projects have experienced a positive trend in their

performance:– Energy Reform and Access ; from red to green– Market-led Small-holders Project; from red to orange– Public Sector Reform Project ; from red to orange – Decentralized Planning and Financing; from orange to green– Higher Education; from orange to green– Communications Sector Reform; from orange to green– Transfronteir Conservation Areas and Tourism Development; from

orange to green

• The following projects have experienced weak or worsening performance:

– HIV / AIDS Response Project; from orange to red– Beira Railway; from green to orange

Successes (1)• Improvements in the Mozambique portfolio:

– Problem projects reduced from three at start of fiscal year 2008 to one (HIV/AIDS Response Project/MAP)

– Quality of the portfolio is above Africa Region average

• Improved portfolio performance and better score on CPIA (Country Policy Institutional Assessment) has resulted in increase of IDA15 resources for Mozambique

• PIUs overwhelmingly expressed view that relations between them and WB and MPD are strong and effective

• Introduction of e-sistafe and CUT for one project (Market-led Smallholder Development in the Zambezi Valley)

Successes (2)

• Energy Reform and Access: implementation pace has picked up and new energy commission in place

• Market-led Smallholders: successful adherence to e-sistafe/CUT and using national district planning systems

• Communication Sector Reform: strengthened telecommunications and civil aviation regulators

• Higher Education: all key areas being successfully implemented including new quality and innovation fund

Successes (3)• Transfronteir Conservation Areas and

Tourism Development: partnerships with local & int’l NGOs

• Regional HIV Treatment Acceleration Program: improved data collection in provinces, and contracting of NGOs for HIV/AIDS treatment provision

• Roads and Bridges Management and Maintenance II: harmonization of financial management procedures; Road Fund (PRISE) established

• Technical and Vocational Education and Training: developed four curriculums, and standards for evaluation and certification

Sucesses (4)

• Decentralized Planning and Finance: community participation in district planning is accepted by all

• Railways and Ports Restructuring: components being successfully implemented

• National Water Development II: improved quality in service delivery to cities and increase in the water access period

• ProMaputo: project management is fully integrated into institution’s structure; promotes ownership and clear leadership

• Financial Sector Technical Assistance: maintained satisfactory performance throughout the past year

Challenges: Cross-Cutting • Improve coordination between implementing agencies

and oversight agencies (especially MPD) to ensure smooth transactions with WB

• Strengthen ministry oversight/ownership of project at decision-making level (i.e. the change of a Minister should not affect the course of the activities agreed in the project)

• Give ministry staff needed time to focus on project delivery

• Build capacity at district and provincial levels (part of broader government challenge)

• Ensure simple project design based on local capacity and the government’s reform program

• Harmonize donor procedures – budgeting, reporting, financial management, monitoring and evaluation

Challenges: Procurement

• Acquire and maintain better knowledge on WB procedures

• Align procurement plans with the preparation of operational annual plans

• Ensure International Competitive Bidding (ICB) documents are prepared in English

• Consider higher thresholds for no-objection approval in some projects, depending on the capacity and associated risk

Challenges: Financial Management

• Improve quality and timely submission of financial management reports (IFRs)

• Improve quality and timely submission of annual audit reports

• Build capacity for financial management in provinces and within implementing partners

• Increase availability of Internal Auditors for provincial operations

Challenges: Monitoring & Evaluation

• Improve and maintain technical capacity within PIU and implementing partners (civil society and private sector) and at provincial level

• Create capacity in data analysis at central and local levels, also promote culture and motivate staff to do M&E

• Ensure consistency in data collection• Improve communication networks in order to

collect and transmit data between implementing partners and PIU

• Consolidate indicators for projects that have too many sub-indicators

Challenges: Recruitment & Retention• Improve skills in provincial and district labor markets• Increase retention at central and provincial level; staff

complains of low salaries, poor housing, lack of benefits• Ensure salary parity between staff sponsored by different

donors but performing similar work [leads to disharmony and contributes to high staff turnover]

• Improve staff allocation at central and provincial levels• Recommendations from PIUs:

– Recruit staff early in project cycle – Adopt 2-3 year contracts for PIU consultants (vs. one year

renewable contracts; based on the annual assessment)– Pair contracted staff with regular staff to ensure transfer of

knowledge and skills within the implementing agency– Ensure competitive salary and benefit package for PIU

contracted staff (e.g. medical assistance]

Challenges: Training Needs• Train on WB specific reporting and procedures

(particularly related to Common Funds)• Implement GOM training program in the provinces• Conduct (in Portuguese) more frequent financial

management, procurement and disbursement workshops for project staff in Maputo (and possible for regional centers);

• Recommendations from PIUs:– Offer training at beginning of project when needs are

greatest; especially on results framework– Use case study examples – Include other project and ministry staff in training,

even if they are not active in the same area [e.g. procurement knowledge is valuable to more than procurement staff]

– Provide on-the-job training for procurement and financial management

Specific Challenges for MPD

• Need for more frequent interaction between PIUs and MPD

• Apply policy that establishes parity for PIU contract staff among all donors (and in collaboration with donors)

• Improve coordination and planning with different sectors, especially regarding counterpart funds (still an issue for some projects)

• Improve processing time for:– CREE, TA and other BM approvals – Regular WB requirements (signatures, refunds, etc)

Specific Challenges for World Bank

• Increase World Bank involvement in SWAp’s and other program based approaches for better donor alignment and harmonization

• Design new projects to fit within the implementing agency’s structure of projects (eg more horizontal vs vertical approach)

• Ensure prompt response to review financial management reports and no-objection requests

Going Forward in FY09

• Put new projects on-CUT; also consider putting existing projects on-cut

• Proactively address potential problems in projects to ensure a healthy portfolio

• Make PIUs better aware of training opportunities – consider an integrated training course for new

projects