Document of
The World Bank
Report No:ICR00003332
IMPLEMENTATION COMPLETION AND RESULTS REPORT(IDA-H6240)
ON A
GRANT
IN THE AMOUNT OF SDR 7.5 MILLION
(US$ 11.0 MILLION EQUIVALENT)
INCLUDING SDR 4.1 MILLION IN PILOT CRW RESOURCES
(US$ 6.0 MILLION EQUIVALENT)
TO
THE REPUBLIC OF LIBERIA
FOR A
THIRD REENGAGEMENT AND REFORM SUPPORT PROGRAM
September 8,2016
Macroeconomics and Fiscal Management Global Practice
Country Department AFCW1
Africa Region
CURRENCY EQUIVALENTS
(Exchange Rate Effective July 21, 2016)
Currency Unit = Liberian Dollar (LDR)
1.00 LRD = US$0.011
US$1.00 = 89.99LRD
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS
AfDB / African Development BankAIDS / Acquired Immune Deficiency Syndrome
ASYCUDA / Automated System for Customs Data
CAF / Common Assessment Framework
CAS / Country Assistance Strategy
CNDR / Center for National Documents and Records Agency
CRW / Crisis Response Window
DPO / Development Policy Operation
ECOWAS / Economic Community of West African States
EGIRP / Economic Governance and Institutional Reform Project
GAC / General Auditing Commission
GDP / Gross Domestic Product
GEMAP / Governance and Economic Management Assisted Program
GFS / Government Finance Statistics
HIPC / Heavily Indebted Poor Countries
HIV / Human Immunodeficiency Virus
IAA / Internal Audit Agency
IAS / Internal Audit Service
IDA / International Development Association
IFMIS / Integrated Financial Management Information System
IGPSPL / Interim Guidelines and Procedures for the Sale of Public Land
IMF / International Monetary Fund
IPTP / Intensive Procurement Training Program
IPSAS / International Public Sector Accounting Standards
ITAS / Integrated Tax Administration System
JCAS / Joint Country Assistance Strategy
KRI / Key Results Indicators
LCC / Land Coordination Center
LERN / Liberia’s Early Warning and Response Network
LIPA / Liberia Institute for Public Administration
LRDC / Liberia Reconstruction and Development Committee
LTPC / Liberia Trade Policy and Customs
M&A / Ministries and Agencies
MTEF / Medium Term Expenditure Framework
NTGL / National Transitional Government of Liberia
PPCC / Public Procurement and Concessions Commission
PDO / Program Development Objectives
PEFA / Public Expenditure and Financial Accountability Assessment
PFM / Public Financial Management
PRGF / Poverty Reduction and Growth Facility
PRS / Poverty Reduction Strategy
RIA / Roberts International Airport
RRSP / Reengagement and Reform Support Program
SDR / Special Drawing Rights
SPF / State and Peace Building Fund
UN / United Nations
UNDAF / United Nations Development Assistance Framework
UNDP / United Nations Development Program
UNMIL / United Nations Mission in Liberia
USAID / United States Agency for International Development
Vice President: / Makhtar Diop
Country Director: / Henry G. Kerali
Senior Practice Director: / Carlos Felipe Jaramillo
Practice Manager: / Seynabou Sakho
Task Team Leader: / Errol George Graham
ICR Team Leader: / Daniel Kwabena Boakye
1
REPUBLIC OF LIBERIA
THIRD REENGAGEMENT AND REFORM SUPPORT PROGRAM (P117279)
CONTENTS
A. Basic Information
B. Key Dates
C. Ratings Summary
D. Sector and Theme Codes
E. Bank Staff
F. Results Framework Analysis
G. Ratings of Program Performance in ISRs
H. Restructuring (if any)
1. Program Context, Development Objectives and Design
1.2 Original Program Development Objectives (PDO) and Key Indicators
1.3 Revised PDO and Key Indicators, and Reasons/Justification
1.4 Original Policy Areas Supported by the Program
1.5 Revised Policy Areas
1.6 Other significant changes
2. Key Factors Affecting Implementation and Outcomes
2.1 Program Performance
2.2 Major Factors Affecting Implementation:
2.3 Monitoring and Evaluation (M&E)
2.4 Expected Next Phase/Follow-up Operation (if any):
3. Post-Approval Experience and Reasons for Cancellation of the RRSP IV.
3.1 Main Events Leading to Cancellation
3.2Steps Taken to Mitigate Problems
3.3Implications of Loan Cancellation
4. Assessment of Outcomes
4.1 Relevance of Objectives, Design and Implementation
4.2 Achievement of Program Development Objectives
4.3 Justification of Overall Outcome Rating
4.4 Overarching Themes, Other Outcomes and Impacts
4.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
5. Assessment of Risk to Development Outcome
6. Assessment of Bank and Borrower Performance
6.1 Bank Performance
6.2 Borrower Performance
7. Lessons Learned
8. Comments on Issues Raised by Borrower/Implementing Agencies/Partners
Annex 1. Bank Lending and Implementation Support/Supervision Processes
Annex 2. Beneficiary Survey Results
Annex 3. Stakeholder Workshop Report and Results
Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR
Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders
Annex 6. List of Supporting Documents
REPUBLIC OF LIBERIA
THIRD REENGAGEMENT AND REFORM SUPPORT PROGRAM(P117279)
DATA SHEET
A. Basic Information
Country: / Liberia / Program Name: / Third Reengagement and Reform Support ProgramProgram ID: / P117279 / L/C/TF Number(s): / IDA-H6240
ICR Date: / 05/25/2016 / ICR Type: / Core ICR
Lending Instrument: / DPL / Borrower: / REPUBLIC OF LIBERIA
Original Total Commitment: / XDR 7.50M / Disbursed Amount: / XDR 7.50M
Revised Amount: / XDR 7.50M
Implementing Agencies:
Ministry of Finance
Cofinanciers and Other External Partners:
B. Key Dates
Process / Date / Process / Original Date / Revised / Actual Date(s)Concept Review: / 03/25/2010 / Effectiveness: / 11/16/2010
Appraisal: / 05/26/2010 / Restructuring(s):
Approval: / 09/30/2010 / Mid-term Review:
Closing: / 06/30/2011 / 06/30/2013[1]
C. Ratings Summary
C.1 Performance Rating by ICROutcomes: / Satisfactory
Risk to Development Outcome: / Moderate
Bank Performance: / Moderately Satisfactory
Borrower Performance: / Moderately Satisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank / Ratings / Borrower / Ratings
Quality at Entry: / Moderately Satisfactory / Government: / Moderately Satisfactory
Quality of Supervision: / Moderately
Satisfactory / Implementing Agency/Agencies: / Moderately
Satisfactory
Overall Bank Performance: / Moderately
Satisfactory / Overall Borrower Performance: / Moderately Satisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation Performance / Indicators / QAG Assessments (if any) / Rating:
Potential Problem Program at any time (Yes/No): / No / Quality at Entry (QEA): / None
Problem Program at any time (Yes/No): / No / Quality of Supervision (QSA): / None
DO rating before Closing/Inactive status:
D. Sector and Theme Codes
Original / ActualSector Code (as % of total Bank financing)
Central government administration / 100 / 100
Theme Code (as % of total Bank financing)
Land administration and management / 33 / 33
Public expenditure, financial management and procurement / 67 / 67
E. Bank Staff
Positions / At ICR / At ApprovalVice President: / Makhtar Diop / ObiageliKatrynEzekwesili
Country Director: / Henry G. R. Kerali / IshacDiwan
Practice Manager/Manager: / Yaye Seynabou Sakho / Edward Philip English
Program Team Leader: / Errol George Graham / Errol George Graham
ICR Team Leader: / Daniel Kwabena Boakye
ICR Primary Author: / Mathurin Gbetibouo
F. Results Framework Analysis
Program Development Objectives (from Program Document)The objectives of the proposed grant were to support government-owned ongoing reforms to strengthen governance and improve theenvironment for private sector-led growth that is more broadly shared. More specifically, the RRSPIII focused on: (i) improvingbudget planning and execution; and (ii) improving land administration to reduce conflicts and enhance the investment climate.
Revised Program Development Objectives (if any, as approved by original approving authority)No changes.
PDO Indicator(s)Indicator / Baseline Value / Original Target Values (from approval documents) / Formally Revised Target Values / Actual Value Achieved at Completion or Target Years
Indicator 1: / Average difference between out-turn and legislated budget for each Ministry as measured by PEFA indicator PI-2
Value
(quantitative or
Qualitative) / 16% / 10% / 8.4%
Date achieved / 06/30/2009 / 06/30/2011 / 06/30/2011
Comments
(incl. %
achievement) / Fully met Average budget deviation for FY10/11 was 8.4%. (Source: PEFA 2012). Since FY12/13, the average budget deviation has remained less than 10%.
Indicator 2: / The timely production of IPSAS compliant financial statements to facilitate complete audit of the final accounts of the budget in keeping with the PFM Act.
Value
(quantitative or
Qualitative) / No complete financial statement produced. / Complete IPSAS compliant financial statements for FY09/10 produced for auditing. / IPSAS compliant FY09/10 complete financial statements submitted
Date achieved / 06/30/2009 / 06/30/2011 / 11/30/2011
Comments
(incl. %
achievement) / Partially met. The IPSAS compliant financial statement for FY09/10 was submitted in November 2011, thus exceeding the target date of June 2011. However, since FY2014/15 the time for submission has reduced considerably to less than 6 months after close of fiscal year. Statutory requirement is four months after end of fiscal year.
Indicator 3 : / Consolidation of land deeds in the National Archive
Value
(quantitative or
Qualitative) / 65% of land deeds in National Archive. / 90% of land deeds in National Archive / 85%
Date achieved / 06/30/2009 / 06/30/2011 / 6/30/2011
Comments
(incl. %
achievement) / Partially met. 85% of total, 53,261, land deeds were consolidated and archived at the National Archives (CNDRA.) by June 2011.
Indicator 4 : / Number of deeds digitized and filed in the National Archives
Value
(quantitative or
Qualitative) / 0 % / 75% / 90%
Date achieved / 06/30/2009 / 06/30/2011 / 06/30/2011
Comments
(incl. %
achievement) / Fully met. 90% of archived land deeds were digitized by end June 2011. This was increased to 95% by May 2016.
Indicator 5 : / Percentage decrease in the number of land dispute cases in the docket.
Value
(quantitative or
Qualitative) / To be determined / 50 percent decrease from baseline / 56 percent decrease from baseline
Date achieved / 06/30/2011 / 06/30/2011
Comments
(incl. %
achievement) / Fully met. The outstanding number of land disputes in 2011 was 556 compared a baseline of 1183 in 2010. Thus 627 cases were dropped, representing 56% of the baseline.
G. Ratings of Program Performance in ISRs
No. / Date ISRArchived / DO / IP / Actual Disbursements
(USD millions)
H. Restructuring (if any)
Not Applicable
1
REPUBLIC OF LIBERIA
THIRD REENGAGEMENT AND REFORM SUPPORT PROGRAM (P117279)
IMPLEMENTATION COMPLETION AND RESULTS REPORT
1. Program Context, Development Objectives and Design
- The Third Re-engagement and Reform Support Program (RRSP III) was the first Development Policy Operation (DPO) in a two-tranche programmatic series for the Government of Liberia.Thisbudget support operation, financed by a US$11million IDA grant, was approved in September 2010 and became effective in November 2010. Itwas proceeded by two stand-alone DPOsto Liberia,at the end of the protracted civil war and after the installation of a new democratically elected Government in 2006. The first Re-engagement and Reform Support program (RSSP I), financed by a single tranche grant, was approved in December 2007. It provided (i) direct reimbursement of a bridge loan of US$376 million to clear Liberia’s arrears, and (ii) cash flow needed in the period immediately after arrears clearing, including future debt obligations. The Second Re-engagement program (RRSP II), which was also financed by an IDA grant of US$ 4 million was approved in April 2009. It was designed to support the improvement of the country’s fiduciary environment, rebuilding of public institutions and improvement in the environment for private sector-led growth.
- This document presents the Implementation Completion and Results Report (ICRR) for RRSP III and the Note of Cancelled Operation (NCO) for the RRSP IV. The document assesses the achievements of the expected results of the RRSP III, over the period 2010-2011.However the narrative goes beyond this period, in order to show the extent to which reforms were sustained beyond the closing date of the DPO.TheRRSP III aimed at deepeningthe government’s ongoing reforms by strengthening economic governance and improving the environment for private sector-led growth that is more broadly shared. The successor,second operation of the programmatic series, RRSP IV,which was expected to be financed by an IDA credit of US$5 million, was approved on October 18, 2011after all prior actions and triggers were met. However the DPO was cancelled on June 30 2013,because the Liberian lawmakers failed to ratify its financing credit agreement. The lawmakers disagreed with the Bank’s policy of changing the second operation of the programmatic series from grant to credit financing; upon reaching HIPC completion point andcompletion of the debt buy-back operation, Liberia’s status moved from high to low risk to debt distress. The country was therefore obliged to move from IDA grant to credit.
1.1 Context at Appraisal
- Poor governance and nearly fifteen years of brutal conflict destroyed lives, key institutions, infrastructure, and grounded the Liberian economy to a halt. Approximately 270,000 people were killed and about a third of the total population was displaced by the conflict. Infrastructure and social institutions were damaged or destroyed and key services were severely disrupted. The 2003 Accra Comprehensive Peace Accords and deployment of a strong United Nations (UN) peacekeeping force and the activities of the several donors provided much-needed space to lay a solid foundation for recovery. WorldBank engagement since 2003 has focused on providing emergency stabilization support rebuilding state institutions and restarting public service delivery. During that period, the World Bank’s programs focused on basic economic governance reforms, community-driven development for service delivery, and emergency infrastructure rehabilitation.
- In January 2006 Liberia entered into a new era of democratic governance.The inauguration of a new democratic government on January 16, 2006 following a period of ineffective rule by a National Transitional Government of Liberia (NTGL) brought renewed hope and new dynamism to the recovery efforts. The country was at an inflection point, moving from the transitional post-conflict recovery phase to laying the foundations for long-term development. The government’s main focus was on sustaining economic growth and securing social peace dividends. Employment generation was a key priority in that context, to ensure that citizens experience the tangible benefits of peace and reforms and to reduce the number of at-risk youth. Moreover, this priority received heightened consideration in the wake of the negative impact of the 2008/09 global crisis on employment in key sectors in Liberia. On the policy side, the government’s focus was on consolidating economic governance reforms and moving beyond the transitional Governance and Economic Management Assisted Program (GEMAP) which ended at HIPC completion point in June 2010, to a fully-owned Governance framework.
- Despite strong postwar recovery, the 2009 global financial crisis created substantial challenges for Liberia’s fledging economy.At the macro level, the global crisis resulted in a much weaker economy than envisaged under the PRS, which called for an average growth of 11.5 percent over the period 2008-2010. However, following the global financial crisis, the lower exports and investment as well as lower demand in the domestic economy from the reduced remittances and credit resulted in growth slowing to 5.9 percent over the same period.The nascent growth had been curtailed through lower and delayed investments, fiscal space had been severely eroded as a result of the lower economic activity and the trade balance and overall balance of payments had also deteriorated. The RRSP III operation therefore provided timely financial support to the government in the context of the severe global environment. The amount of the grant was increased from US$5million to US$11 million through the addition of US$6million from the Crisis Response Window (CRW) to help mitigate the ongoing effects of the global slowdown on key priorities reflected in the Poverty Reduction Strategy.
- The economic context during the RRSP III implementation period is summarized in Table 1.The strong postwar recovery continued in 2008 but the difficult international environment towards the end of 2008 through most of 2009, created substantial challenges for Liberia’s fledgling economy. The global crisis which emerged in the latter half of 2008 and deepened in 2009 had considerable impact on the Liberian economy. The fiscal impact of the global financial crisis was a slowdown in tax revenue and public expenditures. Despite the challenges however, the government pursued prudent fiscal and monetary policies and as a result has maintained broad macroeconomic stability. However, there were downside risks to the maintenance of economic stability; given significant domestic risks (security and political—given the pending 2011 elections) as well as external economic shocks, including that from a slower than expected recovery in the global economy. Mitigating factors, included the maintenance of broad macroeconomic stability and the government’s focus on growth enhancing structural reforms, and support provided by donors, including through the RRSP III operation.
Table 1: Liberia Key Economic Indicators -2008-2014
- The grant for RRSP III was an integral part of IDA’s Country Assistance Strategy for the period FY09-11 presented to the Board in April 2009. The operation wasclosely coordinated with assistance provided to support government’s reforms through the ongoing Economic Governance and Institutional Reform Project (US$11 million equivalent), the Liberia Land Sector Reform Project (US$2.98 million equivalent), the EU budget support operation and the IMF ECF. Designed as the first operation of two single tranche DPO programmatic series, RRSP III was expected to cover the period 2010-2011, a short period largely reflecting the fact that the Government’s medium-term strategy was due in 2011 and that presidential elections were also due in 2011.The follow-up, cancelledsecond operation of the series, RRSP-IV was meant to maintain the overarching focus on the two pillars under RRSP III, while adding on other key complementary policy areas including: (i) improving the capacity for and transparency of public procurement, (ii) improving internal control measures and the capacity for internal audit, and (iii) improving revenue administration. Despite the cancellation of the credit under RRSP-IV,Government continued the implementation of the reforms in these policy areas as well.
1.2 Original Program Development Objectives (PDO) and Key Indicators
- The RRSP III grant aimed at supporting government-owned reforms by strengtheningeconomic governance and improving theenvironment for a private sector-led growth that is more broadly shared. More specifically, the RRSPIII focused on; (i) improving budget planning and execution to ensure transparency and accountability and (ii) improving land administration to reduce conflicts and enhance the investment climate.
- Budget planning and execution in a transparent and accountable manner is critical for ensuring improved economic governance and efficiency of public spending.The guidelines for implementation of the MTEF were meant to ensure that the budgetary process is transparent and aligned with the country’s development agenda. Liberia’s major challenge in the context of thepost-conflict era has been the financing of reconstruction and development budget within the constraints of limited fiscal space. Secondly, prior to the adoption of the IPSAS based financial reporting, Government of Liberia was only producing revenue and expenditure statements that could not be subjected to auditing reviews; hence exposing the country to high risks of financial mal-practice.
- Improved Land Administration is critical to reducing land disputes, thereby ensuring better investment climate, private sector investment and pro-poor growth. More than half of the 4.5 million people live on land under customary tenure, which provides traditional rights to land but not recognized by law. The lack of legal recognition of customary rights to land has been one of the drivers of the 14-year civil war and has been one of the key sources of court disputes in the post-conflict era. Government’s decision to reform the land tenure system was therefore considered key to the reduction of land disputes and promotion privatesector participation in economic development.
- The prior actions under the two areas of overall reforms supported by the RRSP III and corresponding fivekey results indicators of the program are shown in Table 2.
Table 2: Liberia RRSP-III Prior Actions and Status