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Document of The World Bank Public Disclosure Authorized Report No: 33502-CV IMPLEMENTATION COMPLETION REPORT (IDA-32240 PPFI-Q0710 TF-29258 IDA-32241) ON A CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR 14.8 MILLION (US$20.1 MILLION EQUIVALENT) TO THE REPUBLIC OF CAPE VERDE FOR A SOCIAL SECTOR DEVELOPMENT PROJECT Public Disclosure Authorized September 28, 2005 Human Development II Country Department 14 Africa Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective April 1999 (Appraisal)) Currency Unit = Escudos 94.515 Escudos = US$ 1 US$ 1 = 0.01058 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AfDB Africa Development Bank INE National Statistics Institute ACDI/VOCA-DAgricultural Cooperative Development INERF Instituto Nacional de Engenharia GASP International-General Directorate of Rural e Florestas (National Institute Agriculture, Silviculture and Fisheries of Rural Engineering and Forestry) AGETIP Agence d’exécution de travaux d’intérêt KPI Key Performance Indicator public (Executing Agency for Public Works) CAS Country Assistance Strategy MIS Management Information System CVE Cape Verdian Escudos MOD Maître d’ouvrage délégué (Delegated Contract Management) DCMA Delegated Contract Management MTR Mid-term Review Agency D.G. Director General of AGECABO NCB National Competitive Bidding E.U. European Union NGO Non-Governmental Organization FAM Fonds d’appui aux municipalités NPAP National Poverty Alleviation (Support Fonds to Municipalities) Program FAIMO Frente a Alta Intensidade de Mano de PCU Program Coordination Unit Obra (Labor Intensive Funds) GoCV Government of Cape Verde PPF Project Preparation Facility GTI Inter-Municipal Technical Cabinet PROMEF Education and Training Consolidation and Modernization Project (Projecto de Consolidação e de Modernização da Educação e Formação) GTM Municipal Technical Cabinet PRSP Poverty Reduction Strategy Paper ICB International Competivie Bidding PRSC Poverty Reduction Support Credit IDRF Inquérito às despesas e receitas as SSDP Social Sector Development Project familiares (Expenditures and Income Household Survey) IFAD International Fund for Agricultural TOR Terms of Reference Development Vice President: Gobind T. Nankani Country Director: Madani M. Tall Sector Manager: Alexandre V. Abrantes Task Team Leader/Task Manager: Johanne Angers CAPE VERDE Social Sector Development CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 14 6. Sustainability 16 7. Bank and Borrower Performance 18 8. Lessons Learned 20 9. Partner Comments 21 10. Additional Information 21 Annex 1. Key Performance Indicators/Log Frame Matrix 22 Annex 2. Project Costs and Financing 25 Annex 3. Economic Costs and Benefits 31 Annex 4. Bank Inputs 35 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 38 Annex 6. Ratings of Bank and Borrower Performance 39 Annex 7. List of Supporting Documents 40 Annex 8. Borrower's Contribution 43 MAP: IBRD 33383 Project ID: P000432 Project Name: Social Sector Development Team Leader: Johanne Angers TL Unit: AFTH2 ICR Type: Core ICR Report Date: September 28, 2005 1. Project Data Name: Social Sector Development L/C/TF Number: IDA-32240; PPFI-Q0710; TF-29258; IDA-32241 Country/Department: CAPE VERDE Region: Africa Regional Office Sector/subsector: Other social services (94%); Central government administration (6%) Theme: Improving labor markets (P); Social safety nets (P); Participation and civic engagement (S); Poverty strategy, analysis and monitoring (S) KEY DATES Original Revised/Actual PCD: 04/03/1997 Effective: 10/04/1999 10/04/1999 Appraisal: 02/11/1999 MTR: 10/09/2001 10/09/2001 Approval: 05/25/1999 Closing: 08/31/2003 03/31/2005 Borrower/Implementing Agency: GOVERNMENT OF CAPE VERDE/MINISTRY OF LABOR AND SOLIDARITY Other Partners: STAFF Current At Appraisal Vice President: Gobind T. Nankani Jean-Louis Sarbib Country Director: Madani M. Tall Mahmood A. Ayub Sector Manager: Alexandre V. Abrantes Nicholas Burnett Team Leader at ICR: Johanne Angers Tonia Marek ICR Primary Author: Maurizia Tovo; Johanne Angers; Serge Theunynck 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: U Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The Project Development Objective was to contribute to poverty reduction among the 30 percent of the population living below the poverty line by: (a) assisting the Government of Cape Verde (GoCV) in the restructuring of the labor-intensive public works program (FAIMO) by creating an institutional capacity (AGECABO) to execute public works that are: (i) economically and/or socially useful; (ii) executed cost-effectively by the private sector; and (iii) based on labor-intensive techniques; (b) building the capacity of municipalities, communities and NGOs, in planning, implementing and monitoring cost-effective poverty alleviation interventions; and (c) establishing a central capacity to coordinate, monitor and evaluate the 1998-2002 National Poverty Alleviation Program (NPAP). The FAIMO system was instituted in the early 1980s as the main Government's strategy to provide food security through labor-intensive public works programs (FAIMO) that created jobs, particularly during the rainy season (July-August) when food is most scarce. Given the recurrent famines and the low-income levels at the time, the dependency of the poor on the FAIMO employment system was quite strong, particularly in the agricultural sector. Hence FAIMO was used predominantly as a welfare mechanism for the poor, which provided no incentive for improved productivity. With Cape Verde approaching middle-income levels, concerns for a sustainable approach to employment and improved productivity were the main reasons for Government's decision to decrease FAIMO dependency. The intention was to move from a centrally planned, forced account approach to one driven by community demand and handled at the municipal level. Project objectives evolved out of the NPAP, which formed an integral part of the broader National Development Plan (1997-2001), and were fully consistent with the overall country strategy of Cape Verde as well as with the Bank's 1997 Country Assistance Strategy (CAS, report no. 17206-CV). In particular, they (a) supported NPAP objectives to improve the coordination, allocation, and effectiveness of both government and donor resources to alleviate poverty, and (b) supported the priorities identified in the CAS, namely, sustaining macroeconomic stability, encouraging private sector development, improving human development --especially of women and children, and decentralizing responsibilities and resources to municipalities. However, the project objectives could have been expressed in a more streamlined fashion, without "layering" (one overall objective with three specific objectives), and it probably would have been better to limit the objectives to the three specific objectives, especially given the inherent difficulty of proving the contribution of a single project to a goal as ambitious and general as poverty reduction. 3.2 Revised Objective: The project objectives were not revised. 3.3 Original Components: The Social Sector Development Project (SSDP) consisted of two components, which were: Public Works and Employment Creation (US$16.6 million with original credit and US$4.0 million with supplemental credit). This component aimed at (a) providing a viable alternative for FAIMO workers; (b) decentralizing public works based on community-defined priority activities using private sector principles through a delegated contract management approach; (c) reinforcing NGO capacity to work with communities, as NGOs were to be contracted to mobilize poor communities and assist them in designing and implementing activities; and (d) building capacity of municipalities, NGOs, and small entrepreneurs through training and targeted technical assistance. The project, therefore, was to finance economic and social sub-projects, technical assistance, operating costs, and training. The objectives of this component - 2 - were to be achieved primarily by setting up a delegated contract management agency (AGECABO) drawing on the success and lessons learnt from the AGETIPs experience in Sub-Saharan Africa. Assistance to form local small-scale associations was to be provided to "FAIMO-type" workers with training in technical skills and contract management. Only sub-projects between US$20,000-800,000 equivalent were eligible for financing. Community activities costing less than US$20,000 equivalent could consist of self-help projects that aim at improving the living conditions of the poor especially in the areas of health, hygiene, education, environment, nutrition and food security. Capacity Building (US$1.5 million with original credit and US$0.4 million with supplemental credit). This component aimed at (a) providing support to the Program Coordination Unit (PCU) created in August 1998 for the implementation of the NPAP, whose main roles were