The World Bank Implementation Status & Results Report Economic Management Strengthening (P152171)

Economic Management Strengthening (P152171)

AFRICA | Ghana | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2017 | Seq No: 7 | ARCHIVED on 01-Jun-2020 | ISR41904 | Public Disclosure Authorized

Implementing Agencies: Ministry Of Finance (MoF), Republic of Ghana

Key Dates

Key Project Dates

Bank Approval Date: 30-Aug-2016 Effectiveness Date: 01-Nov-2016 Planned Mid Term Review Date: 28-Jun-2019 Actual Mid-Term Review Date: 23-Aug-2019 Original Closing Date: 31-Mar-2020 Revised Closing Date: 31-Mar-2022 pdoTable

Project Development Objectives Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to strengthen the Government of Ghana s institutional capacity for revenue and expenditure management.

Has the Project Development Objective been changed since Board Approval of the Project Objective? No

Components Table

Name Component 1: Strengthening Ghana Revenue Authority s Business Intelligence Systems:(Cost $4.00 M) Component 2: Strengthening Debt Management:(Cost $1.20 M) Component 3: Strengthening Capacity in Public Investment Management:(Cost $4.00 M) Public Disclosure Authorized Component 4: Improving the Governance of State- Owned Enterprises:(Cost $5.25 M) Component 5: Project Management:(Cost $0.55 M)

Overall Ratings

Name Previous Rating Current Rating

Progress towards achievement of PDO €Moderately Satisfactory €Moderately Satisfactory Overall Implementation Progress (IP) €Moderately Satisfactory €Moderately Satisfactory Overall Risk Rating €Substantial €Substantial

Implementation Status and Key Decisions

The project is now progressing well and has some notable achievements including having supported the establishment of the State Interests and Governance Authority (SIGA). Public Disclosure Authorized Component 1: Strengthening Ghana Revenue Authority’s Business Intelligence Systems 1. The objective of the component is to improve tax compliance, integrate income assessment regardless of source and location, simplify the processes, and align with international tax rules. This objective is expected to be achieved through the implementation of the data warehouse (DW), with Business Intelligence (BI), an information technology (IT) tool set for integration of data and analytical reporting, as well as the deployment and integration of the Common Reporting Standards (CRS)/Foreign Account Tax Compliance Account (FATCA) platforms with the DW. Progress has been slow to date – the most important output has been a consultancy to design the specifications for a BI/DW for the Ghana Revenue Authority

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(GRA). Work on contracting the BI/DW has not yet started, due to concerns about the high costs of the proposed solution, although the World Bank’s technical team has indicated that there are technical solutions available within the budget. 2. The extension of the project will allow the World Bank team and the GRA team to:  Complete reviewing the scope of functionalities to be covered by the BI/BW;  Reduce the cost element and finalize the bidding documents for the BI/DW component;  Launch the procurement to finalize the selection process before March 2020;  Deploy and integrate the CRS/FATCA platforms 3. With the implementation of the modules for the BI/BW the and the deployment and integration of the CRS/FATCA the GRA will be able to improve tax compliance, integrate income assessment regardless of source and location, simplify processes and align with international tax rules, and thus achieve the DO of this component. Component 2: Strengthening Debt Management 1. Component 2 aims to strengthen the Ministry of Finance’s (MoF) capacity to manage public debt with a high degree of transparency, as well as to improve treasury management and forecasting. This objective is expected to be achieved through (i) operationalization of the Medium-term Debt Management Strategy (MTDS) and a detailed annual borrowing plan (ABP); (ii) improvement in existing cash-flow forecasts on a daily basis for 30 days ahead; (iii) building the necessary capacity in the Treasury and Debt Management Division (TDMD) to fulfil reporting and transparency requirements under the Public Financial Management (PFM) Act; and (iv) strengthening the operational risk management framework of TDMD. 2. The TDMD of the MoF has made considerable progress in strengthening its capacity, developing and implementing Ghana’s MTDS. Significant milestones include the MTDS and ABP for the financial years 2018 and 2019. Quarterly issuance calendars based on the MTDS have been published on MoF’s website. Other critical broad activities that have been implemented include the preparation of the National Borrowing Guidelines. 3. The extension of the project will allow the TDMD to:  Complete the establishment of a trading room which has not been completed due to difficulties in setting up a dedicated internet connection;  Complete the scanning of legal agreements to establish an off-site backup and recovery center;  Develop a dedicated website which is linked to the MoF website;  Address the security issues and other weaknesses of the ICT data center, implementing the NITA alternate site; and  Provide TA to develop an operational risk management guideline and a code of conduct. Component 3: Strengthening Capacity in Public Investment Management (PIM) 1. The objective of Component 3 is to develop and institutionalize a functional, transparent process for public investment programming that is applied across the Government. It seeks to achieve the objective through the establishment and implementation of a functional PIM system; and enhancing the capacity of the National Development Planning Commission (NDPC) for long-term planning of infrastructure and other investment projects. 2. Considerable progress has been made in developing the necessary manuals, guidelines, Human Resource (HR), and long-term institutional training capacity. It is important to ensure that this work becomes institutionally embedded. Many of the activities have started and are at various stages of implementation. 3. The extension of the project will enable the Public Investment and Asset Division (PIAD) to:  Finalize the draft PIM Regulations and secure approval by Parliament;  Embark on the capacity building activities to be strengthened with more ‘customized’ training programs;  Complete the development of a medium-to-long-term plan on establishing a PIM database using the Integrated Bank for Projects (IBP) and connecting it to the Hyperion;  Strengthen the linkage between PIAD and NDPC with more specific mandates integrating their roles in PIM planning, appraisal, selection, and implementation;  Support a South-South learning from other countries on PIM reforms;  Design E-learning and online courses, as well as design and implement a comprehensive and continuous training program at relevant national tertiary-level training institutions;  Procure ICT hardware and software relevant to PIM for use by the MoF and Ministries, Departments and Agencies (MDAs);  Review of the National Infrastructure Plan; and  Support the development of a national monitoring and evaluation (M&E) system. Component 4: Improving the Governance of State-Owned Enterprises (SOE) 1. The objective of this component is to improve SOE governance by supporting reforms aimed at consolidating the state’s ownership role through an equity study and preparatory work for setting up a Single Entity responsible for overseeing SOEs; establishing the SOE Single Entity; and piloting corporate governance improvements in five SOEs. 2. This component has supported the completion of the equity study and the recommendations of the Report have been reviewed and submitted to the Management of MoF for approval. MoF has, however, taken time to approve the recommendations to allow for adequate consultation with stakeholders. Also, component 4 supported the major achievement of the establishment of SIGA; even though SIGA’s Board has been constituted, there is still the need to satisfy the covenants of (i) putting in place senior management (with terms of reference, qualification and experience, satisfactory to the Association); as well as (ii) technical procurement and financial management assessment of said. Currently, a consultancy firm has been hired to conduct a corporate HR review (report expected shortly); and are expected to also facilitate recruitment in positions where gaps are identified. Until then, resources allocated to sub-component 4.2 (supporting capacity and institution building of SIGA) may not be disbursed. However, the principal problem in meeting the disbursement condition, that of approving the SIGA legislation, has now been overcome, and it is expected that the remaining conditions will be satisfied by the end of May 2020. If SIGA is to achieve its objectives, the program of capacity and institution building supported by GEMS will be essential, and by its nature cannot be implemented in less than two years.

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3. The extension of the project will ensure that the following activities are completed:  The recommendations of the Equity Study be approved by Cabinet and that State Ownership Policy document is concluded;  Developing the organizational chart, setting up the structure and job descriptions, and supporting the recruitment of qualified staff of SIGA;  Developing and supporting the implementation of approved policies, guidelines, and tools for the Government as shareholder;  Developing and supporting policies, guidelines, and tools for SOEs in its portfolio;  Developing compliance M&E tools; and  Building capacity through training, peer-to-peer learning and related activities. These activities will ensure that SIGA is able to establish a modern and effective governance regime over all SOEs, and thus improve both their governance and transparency, and consolidate the State’s ownership role. .

Risks

Systematic Operations Risk-rating Tool

Risk Category Rating at Approval Previous Rating Current Rating

Political and Governance €Substantial €Low €Low Macroeconomic €Moderate €Moderate €Substantial Sector Strategies and Policies €Moderate €Moderate €Moderate Technical Design of Project or Program €Substantial €Substantial €Substantial Institutional Capacity for Implementation and €Substantial €Moderate €Substantial Sustainability Fiduciary €Substantial €Moderate €Moderate Environment and Social €Low €Low €Low Stakeholders €Low €Low €Low Other ------Overall €Substantial €Substantial €Substantial

Results

PDO Indicators by Objectives / Outcomes

To strengthen the Government of Ghana's instutional capacity for revenue and expenditure managment

IN00847086 ►To increase ratio of four major taxes to GDP (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 9.00 9.00 9.00 10.00

Date 31-Dec-2018 12-Mar-2020 30-Apr-2020 31-Mar-2022

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This is an annual target Comments:

To strengthen the Government of Ghana's instutional capacity for revenue and expenditure managment

IN00847083 ►PDO Indicator 2: Deviation of the share of short-term refixing in total debt at the end of the year from the level set out in the medium-term debt management strategy (MTDS) (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 2.00 0.20 0.20 0.50

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

0.2%: By the end of August 2019, the share of short-term debt was 25.20%, against the 2018 MTDS target of 25%. This result has been influenced by Government’s successful liability management programme over the period which significantly reduced the stock of short-term debt. Comments:

To strengthen the Government of Ghana's instutional capacity for revenue and expenditure managment

IN00847084 ►PDO Indicator 3: Percentage of public investment projects that are prioritized on the basis of published standard criteria for project selection (prior to the inclusion in the budget) (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 0.00 0.00 30.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

Project under Education and Road sector have been collated, validated, prioritized and ranked using the Multi Criteria Analysis Tool and yet to be uploaded unto the Hyperion GIFMIS Comments:

To strengthen the Government of Ghana's instutional capacity for revenue and expenditure managment

IN00847085 ►PDO Indicator 4: The number of SOEs covered by the aggregate annual reports on SOE financial and governance performance issued no later than six months after the end of the year to the public (Number, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 36.00 36.00 20.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022 Aggregate annual report (titled the State Ownership Report) covering 77 entities (36 SOEs, 25 Joint Comments: Venture Companies and 16 regulatory bodies) expected to be publish by 31st December 2019.

Intermediate Results Indicators by Components

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Component 1: Strengthening Ghana Revenue Authority's Business Intelligence Systems

IN00847087 ►IR Indicator 1.1: Launch of Data Warehouse with Business Intelligence System fully integrated (Text, Custom)

Baseline Actual (Previous) Actual (Current) End Target Launch of CRS to Value None CRS Launched CRS Launched GRA data warehouse

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

CRS is launched but not linked to GRA Data Warehouse. Comments:

IN00847091 ►IR Indicator 1.2 The usage of the new DW in their auditing and reporting practices (Text, Custom)

Baseline Actual (Previous) Actual (Current) End Target The management reporting process. The enforcement process Value No Data Warehouse None None (debt collection, non- filer follow up, and nonpayer follow up). Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022 No Change: This is because the Data Warehouse has not been launched, hence, no management Comments: reporting processes have started.

Component 2: Strengthening Debt Management

IN00847088 ►IR Indicator 2.1 Contracting of new external borrowing does not exceed the borrowing limits for non-concessional borrowing and borrowing from the International Capital Markets, as set in the MTDS. (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 1.50 -0.80 -0.80 0.50

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

This indicator is an amended form of the previous indicator (deemed unattainable). Comments:

IN00847092 ►IR Indicator 2.2: Public debt data available on MoF’s official website (within months of end of Ghana’s fiscal year) (Months, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 6.00 3.00 4.00 3.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022  2018 public debt report published by end March 2019, 3 months following the end of the Fiscal Year. Comments:  The 2018 public debt report were reviewed by experts (both local and international) before it was published and adjudged the best report by the Finance Committee of Parliament

IN00847095

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►IR Indicator 2.3: An operational risk guideline with a business continuity (BCP) and a disaster recovery plan (DRP) approved and reviewed biannually (Yes/No, Custom) (Yes/No, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value No No No Yes

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022 Work on drafting an operational risk guideline, with BCP and DRP, has already began. Critical business processes have been identified and documented. The next stage of the process is to identify the Comments: strategies to mitigate the risks and draft the operational risk guidelines and code of conduct, indicating that the target was fully not met.

Component 3: Strengthening Capacity in Public Investment Management

IN00847089 ►IR Indicator 3.1: Roll out and operationalization of PIM strategy and action plan (Text, Custom)

Baseline Actual (Previous) Actual (Current) End Target 1. PIM operational and institutional guidelines not disclosed. No PIM strategy/Action Value Not fully implemented PIP established Plan 2. PIP Working Committee established

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

Comments:

IN00847093 ►IR Indicator 3.2: New projects reviewed by PID team for quality assurance in line with PIM guidelines Operations Manual (Number, Custom) (Number, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 0.00 0.00 30.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022 No new projects have been reviewed in line with PIM guidelines Operations Manual and Templates. PIM guidelines and operations manual for economic appraisal of public projects yet to be published and Comments: used by sectors for preparing and appraising new projects.

IN00847096 ►IR Indicator 3.3: Civil servants who receive PIM-related trainings (of which female) (Number, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 460.00 460.00 500.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022  Over 460 Civil Servants have been trained on project appraisal, Risk Management, Financial Comments: Modelling, PPIs/Project Finance as at October, 2019. Forty percent (40%) of the participants, on the average, were women;

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 Proposal for study tour on PIMS in other countries drafted for NO Objection to be given to 21 public officers;  Four faculty staff from the University of Ghana Business School (UGBS) have been trained on investment appraisal and risk management. They will further provide training on PIM to Ghana public officers delivering investment projects.  An MoU between government and UGBS has been developed, and is expected to be signed by end of year 2019. Training program and curriculum is yet to be developed by UGBS (in collaboration with a consultants).  E-learning and online courses are yet to be initiated for public officers. With e-learning and online courses the challenge is that officials are not able to complete most of the course because of busy schedules

IN00847098 €Of which female (Number, Custom Breakdown)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 184.00 184.00 150.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

IN00847099 ►IR Indicator 3.4: National ICT-based M&E System developed with capability to monitor Public Investment Projects (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 0.00 0.00 20.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022  The ICT-based M&E system is being developed to have the lens for monitoring Public Investment Projects, the system development is currently at the design stage. Comments:  The PIM frameworks have been developed to assist all MDAs to prepare and appraise projects for Public Investment Program.

Component 4: Improving the Governance of State- Owned Enterprises

IN00847090 ►IR Indicator 4.1: SOEs with audited annual financial reports publicly disclosed by the time of SOE Annual General Meetings (Number, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 9.00 9.00 15.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

 Year 1: 7 companies (SIC Insurance Company Ltd., Electricity Company of Ghana, Ghana Grid Company, PBC Company Ltd. GCB Bank Ltd., Ghana Reinsurance Company Ltd., Ghana Oil Company, Ghana National Petroleum Corporation)

 Year 2: 7 companies (SIC Insurance Company Ltd., Ghana Grid Company, PBC Company Ltd. GCB Bank Ltd., Ghana Reinsurance Company Ltd., Ghana Oil Company, Volta Comments: River Authority)

 Year 3 (Current Period): 9 companies (GOIL Company Ltd, Ghana Reinsurance Company Ltd, SIC Insurance Company Ltd., GCB Bank Ltd., TDC Development Company Ltd., Agricultural Development Bank, Ghana Supply Company Ltd, Community Water and Sanitation Agency and Ghana Women Fund)

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IN00847094 ►IR Indicator 4.2: Implementation of the annual action plans for the five SOEs (Percentage, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 72.20 72.20 80.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022

The Board of Directors for the five SOEs have each approved and adopted their respective Action Plans for implementation. The aggregate level of implementation on the Action Plans is 72.5 percent.

A guide to the implementation of the Action Plans has been developed and approved by the Board of the five SOEs. All the five SOEs have also designated a Corporate Governance champions to oversee the implementation of the Action Plans. The Ministry of Finance engaged the services of an individual Consultant a consultant to assist the SOEs implement the Action Plans. Comments: As part of the implementation of the Action Plans, MoF with the support of the Consultant held series of capacity building workshops for key senior management and all the boards of the 5 SOEs.

Also, Government-related activities in the Action Plans were also broadly approved by Cabinet in 2017. The single entity(SIGA) which is part of Government-related activities was duly launch at 2019 Policy and Governance Forum was held on 19th August, 2019.

IN00847097 ►IR Indicator 4.3: CSOs participating in the annual stakeholder workshop on SOE governance (Number, Custom)

Baseline Actual (Previous) Actual (Current) End Target

Value 0.00 8.00 8.00 15.00

Date 01-May-2016 11-Dec-2019 30-Apr-2020 31-Mar-2022 Twenty one (21) civil society organizations participated in the 2019 SOE Policy and Governance Comments: Forum held on the 19th and 20th of August, 2019.

Performance-Based Conditions

Data on Financial Performance

Disbursements (by loan)

Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed

P152171 IDA-58960 Effective USD 15.00 15.00 0.00 8.94 5.89 60%

Key Dates (by loan)

Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date

P152171 IDA-58960 Effective 30-Aug-2016 20-Sep-2016 01-Nov-2016 31-Mar-2020 31-Mar-2022

Cumulative Disbursements

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PBC Disbursement

Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC

Restructuring History

Level 2 Approved on 09-May-2020

Related Project(s)

There are no related projects.

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