Document of The World Bank FOR OFFICIAL USE ONLY Report No: 56099 PROJECT APPRAISAL DOCUMENT ON A PROPOSED REGIONAL IDA GRANT IN THE AMOUNT OF SDR 16.3 MILLION (US$25.0 MILLION EQUIVALENT) AND A MULTI-DONOR TRUST FUND IN THE AMOUNT OF UP TO US$51.6 MILLION TO THE AFRICAN CAPACITY BUILDING FOUNDATION FOR AN ACBF REGIONAL CAPACITY BUILDING PROJECT February 10, 2011 Public Sector Reform & Capacity Building Unit (AFTPR) Africa Regional Integration (AFCRI) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
80
Embed
Document of The World Bank FOR OFFICIAL USE ONLYdocuments.worldbank.org/curated/en/178421468008107153/pdf/560… · COSO Committee of Sponsoring Organizations of the Treadway Commission
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 56099
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED REGIONAL IDA GRANT
IN THE AMOUNT OF SDR 16.3 MILLION
(US$25.0 MILLION EQUIVALENT)
AND A MULTI-DONOR TRUST FUND IN THE AMOUNT OF UP TO
US$51.6 MILLION
TO THE
AFRICAN CAPACITY BUILDING FOUNDATION
FOR AN
ACBF REGIONAL CAPACITY BUILDING PROJECT
February 10, 2011
Public Sector Reform & Capacity Building Unit (AFTPR)
Africa Regional Integration (AFCRI)
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
i
CURRENCY EQUIVALENT
(Exchange Rate Effective December 2010)
Currency Unit = US$
US$ = SDR 0.652
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
AAP Africa Action Plan
ACBF African Capacity Building Foundation
AERC African Economic Research Consortium
AFCRI Africa Regional Integration Unit
AFDB African Development Bank
AFTFM Africa Technical Financial Management Unit
APIF African Policy Institutes Forum
BIDPA Botswana Institute for Development Policy Analysis
BOG Board of Governors
CAPAN Projet de Renforcement des Capacités de l’Assemblée Nationale (National
Assembly Capacity Building Project )
CAPES Centre d’Analyse des Politiques Economiques et Sociales (Center for Economic
and Social Policy Analysis)
CAS Country Assistance Strategy
CEPA Centre for Policy Analysis
CEPOD Centre d’Etudes pour les Politiques de Développement (Center for Development
Policy Studies)
CGIAR Consultative Group on International Agricultural Research
CLK-Net Country Level Knowledge Networks
COI Conflict of Interest
COSO Committee of Sponsoring Organizations of the Treadway Commission
CDMAP Capacity Development in Africa Management Action Plan
CESAG Centre Africain d’Études Supérieures en Gestion (African Center for Graduate
Management Studies)
CODESRIA Council for the Development of Social Sciences Research in Africa
COMESA Community of East and Southern African States
CQS Selection Based on Consultants‘ Qualifications
CSD Corporate Services Department
DGF Development Grant Facility
EB Executive Board
ECCAS Economic Community of Central African States
ECOWAS Economic Community of West African States
ii
EPAM Economic Policy Analysis and Management
EPM Economic Policy Management
ERM Enterprise Risk Management
ES Executive Secretary
ESAMI Eastern and Southern African Management Institute
ESRF Economic and Social Research Foundation
FBS Fixed-Budget Selection
FMA Financial Management & Accountability
GIMPA Ghana Institute of Management and Public Administration
HESPI Horn Economic and Social Policy Institute
HR Human Resource
IBRD International Bank for Reconstruction and Development
IA Internal Audit
IC Individual Consultant Selection
ICB International Competitive Bidding
ICT Information and Communication Technologies
IDA International Development Association
IFR Interim Financial Report
IS Implementation Support
KIPPRA Kenya Institute for Public Policy Research and Analysis
LCS Least-Cost Selection
LIB Limited International Bidding
MDAs Ministries Department and Agencies
MDTF Multi-Donors Trust Fund
MAP Management Action Plan
MEFMI Macroeconomic and Financial Management Institute of Eastern and Southern
Africa
M&E Monitoring and Evaluation
NCB National Competitive Bidding
OPCFM OPCS Financial Management Unit
OPD Operational Program Department
ORAF Operational Risk Assessment Framework
PACT Partnership for Capacity Building in Africa
PARP Policy Analysis and Research Project, National Assembly
PDO Project Development Objectives
PRC Project Review Committee
PRCS-RCA Projet de Renforcement des Capacités en Statistique - République Centrafricaine
(Central African Republic - Statistics Capacity Building Project)
PTIC Programme de Troisième Cycle Inter-universitaire
(Post-Graduate Inter-University Program)
PWC Price Waterhouse Coopers
QBS Quality Based Selection
QCBS Quality and Cost-Based Selection
RBM Results-Based Management
REC Regional Economic Communities
REMDTF Recipient Executed Multi-donor Trust Fund
iii
RMF Results Monitoring Framework
RIDA Regional IDA
SADC Southern African Development Community
SIG Specific Investment Grant
SMTP Strategic Medium Term Plan
SOE Statement of Expenditure
TAP-NET Technical Advisory Panels and Networks
UNDP United Nations Development Programme
WAMI West African Monetary Institute
Vice President: Obiageli K. Ezekwesili
Director, Regional Integration : Yusupha B. Crookes
Sector Director: Marcelo Giugale
Sector Manager: Anand Rajaram
Team Leader: Mamadou L. Deme
iv
Table of Contents
I. Strategic Context .................................................................................................................. 7 A. ACBF Context ............................................................................................................... 7
B. Sectoral and Institutional Context: SMTP2 implementation ........................................ 8 C. Higher Level Objectives to which the Project Contributes ......................................... 12
II. Project Development Objectives........................................................................................ 12 A. PDO ............................................................................................................................. 12 B. Project Beneficiaries ................................................................................................... 12
C. PDO Level Results Indicators ..................................................................................... 12
III. Project Description.......................................................................................................... 13 A. Project components ..................................................................................................... 13
B. Project Financing......................................................................................................... 14 C. Lessons Learned and Reflected in the Project Design ................................................ 16
IV. Implementation ............................................................................................................... 16
A. Institutional and Implementation Arrangements ......................................................... 16 B. Results Monitoring and Evaluation ............................................................................. 17
C. Sustainability ............................................................................................................... 18 D. Key Risks and Mitigation Measures ........................................................................... 18
V. Appraisal Summary ........................................................................................................... 22
A. Economic and Financial Analysis ............................................................................... 22 B. Technical ..................................................................................................................... 22
Annex 1: Results Framework and Monitoring........................................................................... 26
Annex 4: Operational Risk Assessment Framework (ORAF) ................................................... 57 Annex 5: Implementation Support Plan ..................................................................................... 60 Annex 6: World Bank/IDA staff and consultants who worked on the project .......................... 63
Box 1: ACBF AT A GLANCE .................................................................................................. 11 Box 2: ACBF Project Cycle Overview ...................................................................................... 34
Box 3: Historical Timeline of ACBF Partnerships‘ Evolution and Major Events .................... 65 Box 4. Forensic and HR reviews by the Executive Board ......................................................... 66 Box 5: Forensic review by the Bank .......................................................................................... 69
Table 1: ACBF Financial Status and SMTP2 financial projections at end of 2011 .................. 15 Table 2: Project Costs by Component and Source of Financing ............................................... 15 Table 3: Project Disbursement by Category and Source of Financing ...................................... 45
1
PAD DATA SHEET
AFRICA
ACBF REGIONAL CAPACITY BUILDING PROJECT
AFRICA, AFCRI/AFTPR
Date: February 10, 2011
AFCRI Director: Yusupha B. Crookes
Sector Manager: Anand Rajaram, AFTPR
Project ID: P122478
Lending Instrument: SIL
Team Leader: Mamadou L. Deme
Sector(s): General public administration sector
(50%); Central government administration (50%)
Theme(s): Other economic management (30%);
Managing for development results (20%);
Poverty strategy, analysis and monitoring (20%);
Other rule of law (15%);Other social
development (15%)
EA Category: C
Project Financing Data:
Proposed terms:
[ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other:
Source Total Amount (US$76.6 million)
Recipient
IDA 15
New
Recommitted
Others(MDTF)
$ 0.0 million
$25.0 million
$25.0 million
$51.6 million
Recipient : African Capacity Building Foundation (ACBF)
Project Implementation Period: April 2011 - December 2015
Expected effectiveness date: April 30, 2011
Expected closing date: December 31, 2015
Does the project depart from the CAS in content or
other significant respects?
○ Yes ○ No
Not applicable
If yes, please explain:
Does the project require any exceptions from Bank
policies?
Have these been approved/endorsed (as appropriate
by Bank management?
Is approval for any policy exception sought from
the Board?
○ Yes x No
○ Yes ○ No
○ Yes x No
If yes, please explain:
Does the project meet the Regional criteria for
readiness for implementation?
x Yes ○ No
If no, please explain:
Project Development objective
The project‘s objectives are to contribute to: (i) enhanced capacity for effective policy
formulation and management in ACBF sub-grant recipients‘ countries; and (ii) improved and
sustained management of ACBF‘s operations.
3
Project description.
The proposed project includes two components:
The first component ―Capacity Building Sub-Grants‖ will finance ACBF sub-grants to
public and private beneficiaries in Sub-Saharan African countries and to Regional
Organizations serving these countries. The sub-grants will finance technical assistance sub-
projects approved under SMTP2 to enhance the institutional capacities of these beneficiaries
in the following areas: (i) Economic policy analysis and development management;
(ii) Financial management, accountability, and transparency; (iii) National Statistics and
Statistical Systems; and (iv) Regional economic cooperation and integration and provision
of regional public goods.
The second component “Institutional Development‖ will consist of (a) continued
implementation of the Management Action Plan, (b) development of a forward looking
medium term strategy (SMTP3), including enhancement of the monitoring and evaluation
system; and (c) appraisal, supervision and evaluation of subprojects; and (d) development
and implementation of knowledge and learning activities designed to enhance skills and
peer learning in economic and public sector management in Africa; all through the
provision of goods, services, training and operating expenses, including staff salaries.
The proposed Recipient Executed Multi-donor Trust Fund (RE MDTF) will co-finance the IDA
Grant so as to build synergies between the financiers and minimize transaction costs for ACBF,
the Bank, and other donors.
Safeguard policies triggered?
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Forests (OP/BP 4.36)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Indigenous Peoples (OP/BP 4.10)
Involuntary Resettlement (OP/BP 4.12)
Safety of Dams (OP/BP 4.37)
Projects on International Waters (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
○ Yes x No
4
Conditions and Legal Covenants
Financing Agreement
Reference
Description of
Condition/Covenant
Date Due
Section 4.01
(Suspension Remedies)
Failure of RE MDTF Grant
Agreement to become
effective1
April 30, 2011
Section 4.01
(Suspension Remedies)
Failure by ACBF‘s host
country or a sub-project‘s
country to comply with its
respective agreement of
non-interference in the
Project or sub-project
NA
Section 5.01
(Effectiveness
Conditions)
1. Adoption of a revised
Operations Manual
acceptable to IDA.
2. Compliance with
conditions of disbursement
of the 2nd
and 3rd
tranches
of both the FY09 DGF
Grant Agreement and the
PACT-ACBF
Memorandum of
Understanding, to the
satisfaction of the
Association..
3. Adoption of the
Governance Action Plan
(together with timetable)
taking into account IDA‘s
comments on it.
[4. The agreement between
ACBF‘s host country and
the Bank confirming the
country‘s non-interference
in the Project has been
executed on behalf of all
the parties thereto.]2
The date ninety (90) days after the
date of the Financing Agreement
1 A similar remedy will be included in the MDTF Grant Agreement. In this way, each agreement can be signed
independently of the other, but the other would need to be effective by a particular deadline. 2To be deleted if this agreement is signed before the signing of the Financing Agreement.
5
Conditions and Legal Covenants
Financing Agreement
Reference
Description of
Condition/Covenant
Date Due
Schedule 2, Section I.C Sub-grants to be made
according to criteria and
procedures acceptable to
IDA, including: (a)
requirement that the Sub-
grantee be eligible for IDA
financing;3 (b) IDA prior
review of selected Sub-
projects;4 (c) maximum
amount of (i) any Sub-
grant set at US$5 million
equivalent; and(ii) all Sub-
grants to a given Sub-
grantee set at US$7 million
equivalent; and
(d) requirement that for
non-sovereign Sub-
grantees, the Member
Country involved confirm
its support for the project
and provide non-
interference undertakings
to ACBF.
NA
Schedule 2, Section I.D ACBF to commence M&E
reporting on a quarterly
basis on all ACBF
activities, including Sub-
projects, in a manner
acceptable to IDA
Quarterly, commencing no later than
June 30, 2011
3 Sub-grants to IBRD-only countries or countries in arrears would be financed exclusively out of the RE MDTF.
4 Seven Sub-projects have been selected by the Bank for prior review (see Annexure 1 of Annex 2).
6
Conditions and Legal Covenants
Financing Agreement
Reference
Description of
Condition/Covenant
Date Due
Schedule 2, Section I.D ACBF to adjust the
responsibilities of its M&E
staff in a manner
satisfactory to the
Association, so as to
ensure that assessment of
the Sub-grants‘ monitoring
and evaluation systems are
conducted by the Recipient
during the preparation of
each Sub-project, prior to
its approval for financing
June 30, 2011
Schedule 2, Section III ACBF to conduct annual
procurement audits.
Annually, commencing with FY 2011,
due 6 months after the end of the
Fiscal Year.
Schedule 2, Section IV Retroactive financing for
eligible payments under
―Institutional
Development‖ Component
made from July 1, 2010
onward up to an aggregate
amount of US$5 million
equivalent5.
NA
Schedule 2, Section V ACBF to continue to carry
out its activities in
accordance with the MAP
and to implement the GAP
in accordance with its
terms.
Ongoing
5 In addition, up to 20% of the MDTF Grant amount would be allocated for retroactive financing.
7
I. Strategic Context
A. ACBF Context
1. The Bank decided to support the “African Capacity Building Initiative” in the
early 1990s within the framework of its strategy to develop government capacity at the
continent level. The African Capacity Building Foundation (ACBF) was established in 1991
under the sponsorship of the World Bank, the United Nations Development Programme
(UNDP) and the African Development Bank (AfDB) to enhance institutional capacity for
policy making in Africa. In 1995, following a broad consultative process involving the Bank‘s
African Governors and a study which yielded a strategy on how the World Bank might
enhance the impact of its operations in Africa, the Bank initiated the Partnership for Capacity
Building in Africa (PACT) as a collaborative effort among the World Bank, AfDB and UNDP
to take concrete steps towards improving economic and public management capacity in Africa.
Implementation of the PACT was entrusted to ACBF from 2000 onward and ACBF, under its
first Strategic Medium Term Plan (SMTP1), provided grants and technical support to some 40
countries in Sub-Saharan Africa and to about 34 regional and continental institutions until
2005. The World Bank supported SMTP1 by providing multiple DGF Grants for a total of
US$147.6 million which represented 56 percent of the total amount mobilized by ACBF under
SMTP1, as well as by serving as Trustee of the multi-donor trust fund for SMTP1 (SMTP1
MDTF) under which donors provided US$85.4 million.
2. The Executive Directors, on September 5, 2006, endorsed management’s proposal
to extend Bank support to the new SMTP2 program and objectives over 2007-2011
through a series of DGF grants totaling up to $150 million to be approved annually. The
Bank funding to SMTP2 was justified on the basis that it not only “fits within the Bank’s
framework for supporting capacity development in Africa, as articulated in the CDMAP6, [but]
independent evaluations [of ACBF programs] have confirmed the effectiveness of ACBF/PACT
in addressing several aspects of the capacity development challenge in Africa”7.
3. The impact of SMTP2 has been mixed. Started in 2007 with the endorsement of up to
US$150 million in DGF funding and corresponding pledges by other donors of up to
US$67 million, SMTP2 implementation was stalled by the delay in reaching agreement with
ACBF on the terms of the new MDTF as well as the delay in appointment of a new Executive
Secretary (ES) following the end of tenure of the previous ES in December 2007. Anonymous
allegations of human resource and financial malpractices at ACBF made in September 2008
further compounded the problem as they inevitably necessitated a review of management
practices and governance issues within the Foundation.
4. The ACBF governing bodies with support of the Bank undertook a series of
actions, notably: (i) instituted a freeze on approval of new projects; (ii) commissioned a
consultant to undertake an independent review of the corporate governance framework at
ACBF; (iii) adopted and implemented a Management Action Plan to strengthen the Internal
6 Capacity Development in Africa: Management Action Plan (CDMAP), Report SecM2006-0323
7 African Capacity Building Foundation (ACBF)/ Partnership for Capacity Building in Africa (PACT), A Proposed
Strategy For Further Bank Support to ACBF/PACT (2007-2011) . World Bank Report No36976, August 8, 2006.
8
Control Framework; and (iv) commissioned a forensic audit and human resources audit of
ACBF. In its capacity as trustee of the MDTF and on its own behalf in respect of the DGF, the
Bank took the following additional actions: (i) funds allocated for the FY09 DGF
(US$26 million) were frozen, as were the balance of undisbursed funds under the SMTP1
MDTF (US$42 million); (ii) additional audits were conducted to identify if fraud or corruption
had in fact taken place at the sub-grantee level. (see Annex 7 for more details on forensic
reports‘ findings and recommendations).
5. The new Executive Secretary hired in July 2009 moved aggressively to design and
implement a far reaching Management Action Plan (MAP) in order to restore good
management of the Foundation. A new management team was recruited, with half of the
positions being externally filled. With Bank and AfDB support, ACBF management
implemented MAP actions designed to restore (i) effective internal controls and financial
procedures within ACBF; (ii) effective controls for existing projects implemented by ACBF
grantees as well as for the selection and approval of new projects; and (iii) effective oversight
of ACBF management. The MAP progress has revived ACBF with better-motivated staff,
strengthened internal controls, and enhanced systems and tools allowing for swift resumption
of the SMTP2 program.
6. As a consequence, and with the progress registered under the MAP, the Bank,
following consultations with donors, approved the release of an initial tranche of both the
FY09 DGF Grant and the SMTP1 MDTF to ACBF. Based on positive assessment of the
implementation of management actions conditioning the availability of an initial tranche of
each of the FY09 DGF Grant and undisbursed amount of the SMTP1 MDTF and intended to
restore effective internal controls and financial procedures within ACBF and for ACBF
grantees of existing and upcoming grants, the Bank disbursed a total of US$17 million in June
2010. It is expected that remaining conditions, which are prerequisites to availability of a
second and third tranche of each of the FY09 DGF Grant and SMTP1 MDTF aggregating a
total of US$51 million will be met in early 2011. Concurrently, the Bank decided to resume
support to implementation of SMTP2 program.
B. Sectoral and Institutional Context: SMTP2 implementation
7. The initial SMTP2 (2007-2011) objectives supported under the DGF are still
relevant and are reflected in the grants made by ACBF so far. These goals were to:
(i) increase effectiveness of governments in designing and managing public policies;
(ii) strengthen the interface between development stakeholders (public sector, private sector,
civil society and local communities); and (iii) enhance the capacity of Africa Regional
Economic communities, institutions and networks.
8. SMTP2 implementation was impacted by the reforms at ACBF through cancelled
disbursements to projects due to the freeze and as a result of portfolio restructuring. For
much of the last 18 months ACBF, with support from the Bank, was focused on management
reforms and strengthening fiduciary controls and capacity of the institution. Comprehensive
portfolio reviews have been undertaken to close or restructure projects over this period. Now
that ACBF management has begun to restore trust and commitment from internal and external
9
stakeholders (staff, donors including the Bank, and African governments), its adjusted strategy
for the remaining 18 months of SMTP2 is to: (i) pursue and consolidate the results achieved so
far in strengthening the organization internal controls, (ii) meet its SMTP2 objectives while
increasing performance and operational efficiency of ACBF; and (iii) finalize its new strategy
(SMTP3) for the period 2012-2016 which will define the basis for continued financial support
from African and external stakeholders to capacity development efforts throughout the
continent.
9. The proposed Regional IDA Grant and its associated Recipient Executed Multi
donor Trust Fund (RE MDTF) are warranted by the Bank management decision to
change instruments designed to support ACBF. As part of a broader decision regarding the
appropriate use of DGF resources, Bank management has decided that institutions such as
CGIAR8 and ACBF, which will require long term funding, are better funded through other
sources. Accordingly, Bank financial support to ACBF will be provided under this Regional
IDA (RIDA) Grant. At the same time, the historical pass-through SMTP1 MDTF is to be
replaced with a new Recipient Executed Multi-donor Trust Fund (RE MDTF), which would be
governed by the same operational policies as the RIDA Grant.
10. ACBF and this operation meet the eligibility criteria for a regional IDA Grant.
(a) While ACBF was not formally established as a regional organization by member states, it
was created as an ―autonomous non-profit agency‖ with ―full juridical personality‖ to serve a
regional function in Africa and has the legal status and fiduciary capacity to receive grant
funding and the legal authority to carry out the SMTP activities proposed to be financed under
the proposed IDA Grant (and RE MDTF) (see paragraphs 32 below and following); (b) ACBF
does not meet eligibility requirements to take on an IDA credit because it is not generating
revenue and would not be in a position to repay the credit; (c) the costs and benefits of the
activity to be financed with an IDA grant are not easily allocated to national programs (see also
paragraph 11); (d) the activities to be financed under the IDA grant are related to coordinated
interventions to provide regional public goods in capacity building (see also paragraph 11);
(e) while grant co-financing for the activity from other donors is expected under the new RE
MDTF, as elaborated in Annex 3, such co-financing will not be sufficient for ACBF‘s planned
activities; and (f) under this operation, ACBF would be the recipient of an IDA-funded
regional operation involving many of IDA‘s Member Countries.
11. Regional IDA support to ACBF is justified by the regional focus of many of
ACBF’s interventions in the past that would be consolidated in the SMTP2 program to be
financed under the proposed project. ACBF has assisted in moving forward the regional
integration agenda through strengthening capacities of regional economic communities (such
as ECOWAS, ECCAS, COMESA and SADC)9 which provide a platform for policy
harmonization and enhanced trade among member countries. The current ACBF SMTP2 grant
pipeline continues to build upon this and will provide funding to COMESA, CODESRIA10
,
8 CGIAR is a global partnership for agricultural development research. See www.cgiar.org.
9 ECOWAS = Economic Community of West African States;, ECCAS= Economic Community of Central African
States; COMESA= Community of East and Southern African States; and SADC = Southern African Development
Community. 10
Council for the Development of Social Sciences Research in Africa.
10
and West African Monetary Institute (WAMI). ACBF has also been instrumental in leveraging
several institutions for regional higher education and skills development in the fields of
economics, public policy, public sector management, financial management and accountability
as well as banking sector and capital market regulation. Under its proposed SMTP 2 grants,
ACBF will continue to support regional based research and education institutions such as
EPM11
in Uganda, GIMPA12
in Ghana, and HESPI13
in Addis-Ababa. Regional think tanks
such as the African Economic Research Consortium (AERC) which benefited from ACBF
support now provide a significant source of economic policy capability to the region. Finally,
ACBF has established and is poised to continue nurturing a number of Technical Advisory
Panels and Networks (TAP-NETs) which have fostered communities of practice and peer
learning networks with substantial regional benefits that spill over national boundaries. (for
details on the current pipeline of SMTP 2 subprojects proposed for support under this Project,
see annexure 1 of Annex 2; for ACBF recent developments generally, see Annexure 1 of
Annex 7).
12. Continued World Bank engagement in ACBF remains valid for the same reasons
that underpinned the decision to support the SMTP2 program in 2006.14
ACBF remains
an important provider of capacity building support in Africa and has unique access to African
institutions given its nature and composition. It complements the World Bank and other
donors‘ efforts to increase capabilities in Public Management, Civil Society Organizations and
Parliaments.
13. Supporting the development of indigenous African institutions remains critical to
development success in Africa. Technical and managerial capacity needs at the continental
level will require sustained long-term effort, and in this regard management believes that
continued support to ACBF is an effective way of leveraging capacity development in Africa.
14. Having restored good management through the MAP implementation, ACBF needs
continued Bank and broad donor support to achieve sustainable impact on capacity
building throughout the continent. In this context, management proposes that the Bank
support ACBF by providing IDA financing in FY11 to complete the final year of SMTP2
(instead of the usual DGF contribution), to consolidate the results achieved under the MAP,
and to finalize the preparation of the new medium term strategy, SMTP3, so as to allow timely
preparation and implementation of donors‘ support to this new strategy.
11
Economic Policy Management at the University of Makerere. 12
Ghana Institute of Management and Public Administration. 13
Horn Economic and Social Policy Institute. 14
See pages 1-2 and 13-14 of the World Bank Report No 36976, August 8, 2006 cited above.
11
Box 1: ACBF AT A GLANCE (Extract from ACBF 2009 Annual Report)
DATE OF ESTABLISHMENT
9 February 1991
VISION
To be the leading African institution, in partnership with other stakeholders, in building
sustainable capacity for good governance and poverty reduction in Africa.
MISSION
To build sustainable human and institutional capacity for poverty reduction in Africa.
CORE COMPETENCY AREAS
1. Economic policy analysis and management; 2. Financial management and accountability;
3.Public administration and management; 4.National statistics and statistical systems; 5.National
parliaments and parliamentary institutions; 6. Professionalization of the voices of the private
sector and civil society
MODE OF INTERVENTION.
Grant-making; Technical advice and support; Knowledge-based products and services;
Partnerships
SPONSORING AGENCIES
The African Development Bank (AfDB); The United Nations Development Programme
(UNDP); The World Bank
MEMBERSHIP
Full Members (48), comprising:
4 international development institutions (the African Development Bank, United Nations
Development Program, The World Bank and International Monetary Fund); 44 countries
(Benin, Botswana, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic,
Chad, Republic of Congo (Brazzaville), Democratic Republic of Congo, (DRC), Côte
d'Ivoire, Denmark, Djibouti, Finland, France, Gabon, Ghana, Greece, India, Ireland, Kenya,
Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, The Netherlands, Niger, Nigeria,
Source: ACBF projections and calculations of the mission
(b) = A balance of $31 mill ion remains from the MDTF and is expected to be disbursed by end of June 2011 under tranche 2 and 3
(c) = A balance of $19.5 mill ion remains from the DGF and is expected to be disbursed by end of June 2011 under tranche 2 and 3
1/ WB and AfDB deliver their projects respectively for $25 mill ion and $12 mill ion during the last 18 month of SMTP2
2/ MDTF Donors disburse the total amount of their $51.6 mill ion during the last 18 month of SMTP2
3/ ACBF will potentially be able to deliver $38 mill ion worth of new grant during the last 18 month of SMTP2
Assumptions:
TOTAL
FROM
INCEPTION
Total
Before
SMTP2
SMTP 2
(a) = AfDB arrears in an amount of US$15.0 from Phase 2 and SMTP1 were disbursed in December 2010
(d) = uncommitted balances from closed projects of Phase I to SMTP II that can be re-committed
16
C. Lessons Learned and Reflected in the Project Design
28. Three important lessons were drawn from the past Bank support to ACBF
programs:
29. The first lesson is the need to enhance a systematic approach to track results:
While ACBF SMTP2 has a RMF with objectives and predetermined indicators at development,
operational and institutional levels, there is an absence of a systematic approach for measuring
results and impact. Under the proposed project, a new RMF will be initiated with a dual focus
on (i) tracking ACBF‘s operational performance through December 2011; and (ii) enhancing
the M&E system for proper monitoring of the future strategy (SMTP3).
30. The second lesson relates to appropriate management of fiduciary risks in past
operations. The pass-through arrangements for donors‘ financing and the DGF grants and the
consequent limited contractual fiduciary oversight role of the Bank as donor and as trustee in
relation to disbursements made to ACBF, proved in this case to be inadequate (see para. 31
below). The proposed financing under the IDA Grant and RE MDTF will require application
of standard Bank fiduciary policies and technical supervision to provide better assurance that
Bank and donor funds are spent for the intended purposes.
31. Finally, the Bank’s role as a member of ACBF’s Executive Board has raised issues
of conflict of interest with the Bank's role as financier and trustee. While the Bank‘s
representation on ACBF‘s Executive Board has been valuable in responding to the governance
crisis and addressing the issues raised during the last 2 years, including with respect to the
Bank‘s role as donor and pass-through trustee, the Bank‘s continued presence on the Executive
Board poses issues of conflict of interest (COI) between (i) the Bank‘s role as executive
director of ACBF endorsing ACBF managerial actions and approving projects for funding, and
(ii) the Bank‘s role as trustee and financier, with fiduciary and supervision responsibilities and
arms-length agreement terms. In connection with the proposed project, the Bank has
determined that its formal supervision role would be incompatible with its continued
representation at the Executive Board. Proposed transitional measures to address the COI issue
are detailed in paragraphs 45 and 46 below in Key Risks and Mitigation Measures.
IV. Implementation
A. Institutional and Implementation Arrangements
32. Implementation of the proposed operation will be carried out by ACBF, which is
governed by a three-tier structure with mandates clearly defined in its Constitution15
.
ACBF is an autonomous non profit agency with full juridical personality. The organization of
the ACBF consists of a Board of Governors (BoG), an Executive Board (EB), and an
Executive Secretary (ES) supported by staff. The Board of Governors, which determines
ACBF‘s overarching policies and appoints members of the EB (other than the ―sponsoring‖
members), is made up of representatives of African governments who contribute to ACBF, the
15
ACBF Constitution was adopted by Agreement among the Bank, AfDB and UNDP, the three sponsoring agencies
on February 9, 1991.
17
Bank, the AfDB, and the UNDP (these three are known as ―sponsoring agencies‖), and other
bilateral donors.16
33. The Executive Board, which is responsible for the conduct of ACBF’s general
operations, is comprised of 11 members, including a representative of each of the
sponsoring agencies, and 8 independent members appointed through a search and
selection process. Each member has one vote, with decisions being taken by majority
vote. The EB approves ACBF‘s annual work plans and budget (including grants made by
ACBF) and appoints the ES. The ES serves as the chief executive officer of the organization
and is responsible for conducting ACBF‘s business under the control and direction of the EB.
ACBF is based in Harare, with a headquarters agreement signed in 1991 with the Republic of
Zimbabwe, and is currently staffed with 75 African Specialists and Managers to support
preparation and implementation of its programs and oversight of grants it makes, which
involve 40 African countries and 26 regional organizations and initiatives.
34. Because the proposed Project is an integral part of ACBF’s normal activities, it will
be implemented by its staff using ACBF’s existing institutional structures, which have
been reinforced as a result of the MAP execution. ACBF has several units and staff
dedicated to appraising and supervising individual projects and negotiating the related grants
made by it, which are supported by FMS, procurement and disbursement specialists and legal
counsel. These staff have been found by the Bank to have the requisite qualifications and
experience to manage the Project. Sub-grants made under the Project will be reviewed by the
ES, the Project Review Committee and ultimately approved by the EB but will involve more
internal peer-reviewing among Operations and M&E staffs.
B. Results Monitoring and Evaluation
35. M&E capacity at ACBF and Sub-grantee levels presents some challenges and will
need strengthening to ensure a proper monitoring of ACBF’s strategies and activities. An
audit undertaken by ACBF in September 2008 determined that its strategies need to be
underpinned and supported by a suitable M&E system and recommended an action plan
divided into three broad ―phases‖ (Phase I: System Design and Preparation; Phase II: System
Implementation and Operation; Phase III: System Automation) and six themes17
to address
deficiencies in the M&E capacity and systems in place at ACBF and in the projects it finances,
including the issues related to institutional structure, reporting mechanisms and performance at
an organizational and individual level as well.
36. Implementation of the adopted action plan was delayed, partly because of ACBF’s
management crisis. While the implementation of the MAP resulted in enhancement in
performance management including in the reporting, audit and information systems, ACBF
16
ACBF‘s BoG currently includes representatives from over 30 African countries and a dozen European and North
American countries. 17
The themes are: Promote and strengthen a culture of M&E and Results Based Management (RBM) in
ACBF; Increase ACBF project M&E capacity; Increase ACBF ability to monitor and evaluate projects;
Increase ACBF ability to evaluate departments‘ performance, and; Enable ACBF to measure their own
organizational achievements against the ACBF Strategic Plan.
18
still needs to strengthen its ability to properly monitor and evaluate its operations and results,
its projects and its own performance.
37. Under the proposed operations, an appropriate M&E system is required to ensure
an adequate monitoring of the PDO and key results. To the extent possible, the Project‘s
M&E system will be embedded into ACBF‘s own monitoring and evaluation organization,
tools and systems. Hence, building ACBF capacity for collection of data, reporting on
activities and outcomes, and tracking of key results at corporate and grantee levels will be a
priority activity supported by the Project. With a systematic implementation of the M&E action
plan throughout the Project life, it is expected that ACBF will lay the groundwork for its next
strategy to be more results oriented.
C. Sustainability
38. The Bank support to the SMTP2 program has been positively acknowledged by key
stakeholders since its inception in 200718
. The SMTP2 program (2007-2011) is a
continuation of the effort initiated by the World Bank, AfDB and UNDP in the early 1990s to
address African capacity building needs through the ACBF. The ultimate beneficiaries
(African governments) as well as other donors involved in the SMTP2 program are still
committed to supporting ACBF and expect the Bank to maintain a strategic leadership role in
supporting this program.
39. Hence, sustainability of the proposed Project will ultimately be determined by
tangible results of ACBF’s operations, including proper implementation of the Sub-
projects, and effective and transparent management of donors’ resources. The recent
management challenges experienced at ACBF, coupled with the pressures of the global
financial crisis, have resulted in the withdrawal of one important donor and could lead to more
withdrawals if ACBF‘s recovery is slow or new allegations of misuse of funds re-emerge.
Therefore, in order for ACBF to regain its reputation as a key partner in capacity building in
Sub-Saharan Africa, the effective and satisfactory implementation of the proposed Project
during this transition period will be critical.
D. Key Risks and Mitigation Measures
40. In addition to the risks associated with ACBF’s governance and capacity (discussed
further below), a critical risk identified during the preparation of this operation is the
capacity of ACBF management to maintain a sustainable cost structure over the Project
execution period.
41. Cost Sustainability and Financial Risks. ACBF remains in a potentially precarious
financial position since the level of donor support continues to be uncertain. ACBF‘s
financial situation will be affected by the spillover of the recent international financial crisis
and the delays in establishing the MDTF for SMTP2. ACBF anticipates a loss of more than
18
The recent Board of Governors meeting in Paris held on September 30, 2010, recognized the Bank‘s positive role
and contribution to ACBF‘s turnaround and requested the Bank to continue its support to ACBF management in this
defining moment.
19
US$23 million that had been expected from European and North American donors and from
African countries. Additional funding received from the Bank19
will help mitigate the risk of
reduced grants to ultimate beneficiaries.
42. However, internal cost reduction efforts are required and ACBF must actively and
carefully manage its operating costs, in order to make available more resources for Sub-
projects and to increase ACBF’s efficiency. To that end, the ACBF management has adopted
the following measures:
ACBF will contain operating and overhead expenses during the remainder of
SMTP2. Caps and limits on staff, travel, consultants, administrative and knowledge
activities costs have been introduced and will be maintained for 2011.
Broader commitment to performance and cost-efficiency measures will be adopted
as part of the governance framework defined and monitored by the Executive Board.
ACBF will make budget or grant commitments based on resources available.
Recently negotiated agreements with its grant recipients already contain a clause
stating that grant disbursements are dependent upon availability of funds.
ACBF will consider cancelling some grants awarded in 2008 (or earlier) but not yet
concluded and recommit these resources when possible. It will also continue
aggressive collection of unretired advances (US$6 million) under closed grants, even
though likelihood of recovery is low, partly because some of these funds have been
used for eligible expenses, but have not yet been properly accounted for.
43. Another risk related to ACBF’s financial condition is the possibility that should
any of the proceeds of the RIDA Grant or RE MDTF Grant be misused, ACBF may not
be in a position to refund them to the Bank. This risk is always inherent in making regional
IDA grants to non-revenue generating organizations such as ACBF. However, it is
significantly mitigated by virtue of (a) the development under the MAP of a strong team of
professionals and sound fiduciary systems, (b) training provided by the Bank to ACBF staff on
Bank policy requirements, which will continue throughout Project implementation; and
(c) ACBF‘s contractual right to a refund of amounts misspent by grantees, which is included in
its grant agreements with its grantees.
44. Governance Risks. Concerns about oversight over ACBF management practices
highlighted the critical role of its governance organs. A Corporate Governance Review
(CGR) was initiated in mid-2009 by ACBF‘s Executive Board (EB) to assess the relevance and
effectiveness of the management and EB functions in order to strengthen the corporate
governance of ACBF. The BoG meeting in September 2010 approved a governance action
plan based on the CGR that aims to bring governance practices at ACBF in line with good
practice principles in similar institutions. The plan addresses the functions and relationships
among the various governance organs of ACBF as well as the competencies required of EB
members for effective leadership and for effective oversight and audit functions. The
governance action plan was approved by the BoG in September 2010, subject to nuancing the
19
Final support of $25 million compared to initial level of RIDA project financing of $10 million.
20
confidentiality provisions as they apply to representatives of the sponsoring agencies on the
EB, given that these members have obligations towards their respective organizations.
45. Establishing a proper governance relationship between the Bank and ACBF also
requires resolution of the conflict of interest (COI) inherent in the Bank's multiple roles. The Bank has participated in ACBF's Executive Board (EB) since its inception and its
participation is memorialized in ACBF's constitutive documents. The proposed Project will be
placing the Bank in an unprecedented position of having concurrent executive and supervisory
functions in an IDA-recipient organization, which creates both real and apparent conflicts of
interest that potentially could undermine the legitimacy of EB decisions and put the Bank's
reputation at risk. At the same time, the Bank's departure from the EB needs to be
appropriately managed to address transitional issues for ACBF, the Bank, and other donors and
stakeholders. With due regard to the need to balance all these concerns, a withdrawal from EB
participation by the Bank will be formalized at the September 2011 Board of Governors
meeting. Actual withdrawal would occur upon the adoption of those formalities and in no
event later than March 31, 2012. Any extension of time beyond September 30, 2011 would be
based on compelling business reasons and implementation of appropriate risk mitigation
measures.
46. The following steps will be taken in order to mitigate COI concerns during this
transition period: (i) Full disclosure to stakeholders of the Bank's dual role within the context
of its decision to disengage from the EB; (ii) measures to facilitate prompt effectiveness of the
IDA Financing Agreement and RE MDTF Grant Agreement and ensure effective supervision
of the Project (see Annex 5), with adequate supervision resources; (iii) project supervision to
address explicitly any remaining institutional issues (Section IV-A); (iv) ACBF and the Bank
to ensure effective communication of the shift in the Bank's role as it disengages from the EB;
(v) the World Bank Group staff member appointed to serve on an interim basis on the EB will
not be nominated by or be mapped to any VPU involved in preparation or supervision of the
proposed Project; (vi) clear terms of reference for the appointed staff member will be prepared,
requiring recusal of him/herself from EB discussions and decisions that involve the RIDA
Grant or RE MDTF Grant, including Sub-project approvals, budgets or resource allocations;
(vii) Establishment of effective information and decision firewalls between the EB and Bank
staff involved in Project oversight; and (vi) a regular stock-taking by IDA management,
aligned with the supervision process, will be conducted to ensure that these safeguards are
operating as intended.
47. Capacity Risks. The forensic and human resource audits conducted in 2009 revealed
a number of lapses in internal control processes and in general compliance with ACBF’s
policies. The implementation under the MAP of the recommendations coming out of these
audits led to a profound restructuring of ACBF involving re-engineering of its systems,
policies, processes and procedures and adjusting its staffing to develop a strong cadre of staff,
update ACBF‘s policies and create a culture of compliance with ACBF‘s policies.
48. At the operational level, the implementation of the MAP through the end of July
2010 has yielded important results in a very short period of time: (i) Internal controls have
been enhanced and the Enterprise Risk Management (ERM) framework is now being used for
21
risk management; (ii) systems and processes as well as their supporting manuals are being
continuously improved for increasing institutional effectiveness; (iii) a human resources
development and management strategy, in line with those of similar international
organizations, is being implemented to attract and retain the best talent; (iv) knowledge
creation is becoming more effective through an internal expertise, and channels for
communicating new knowledge to Operations Departments; (v) an operations evaluation
function has been institutionalized and evaluation findings, lessons and recommendations are
being implemented; (vi) business continuity has been strengthened; (vii) resource mobilization
and partnership building have been streamlined in all of ACBF‘s activities;
(viii) communication and visibility have improved regarding ACBF‘s activities; and
(ix) corporate governance is being enhanced through better delineation of responsibilities and
further collaboration between the three governing bodies (BoG, EB, ES), improved EB
oversight responsibilities, as well as better recruitment processes and requirements for EB
members.
49. The challenge remaining for ACBF is to manage carefully this transition period
toward the “new ACBF”. The objective is to consolidate the MAP results by ensuring that
with the new organizational structure staff are able to effectively use the new systems and
processes so as to deliver quality products and achieve expected results. The proposed Project
will integrate conditions and measures so to ensure that the MAP achievements and results are
continuously maintained and enhanced during the remaining SMTP2 period and mainstreamed
into the upcoming SMTP3.
50. Overall Risk Ratings. The ORAF rated the proposed Project as Medium-I. It will be
implemented in a context in which the Bank is acutely conscious of the reputational risks
associated with mismanagement or poor governance by ACBF. An anonymous complaint
in September 2008 triggered a number of forensic and human resource management audits and
a corporate governance review of ACBF. While no evidence of fraud or corruption was found
by the various audits, the financial and management problems and weak oversight revealed at
ACBF highlighted the potential reputational risks to ACBF as well as to the Bank given its role
as a lead donor under the DGF program as well as trustee of the MDTF and member of both
the Board of Governors and Executive Board of ACBF.
51. A new ACBF management team, far-reaching management systems reform and
ongoing corporate governance reforms, mitigate the control and use of fund risks at the
corporate level. The recent crisis has stimulated the implementation of major managerial
reforms at ACBF as reflected in the MAP. The reform of financial, human and portfolio
management systems have made ACBF a much lower risk organization. Newly introduced
strengthened controls and oversight over grantees will also reduce the risks at the level of
ACBF‘s grant beneficiaries. In addition, the implementation of the corporate governance
action plan would strengthen skills and committee structures to clarify and strengthen oversight
arrangements and managerial accountability at the Executive Board and the Board of
Governors levels.
22
52. Applying standard Bank operational policies and project supervision to the RIDA
Grant and RE MDTF will provide an additional level of oversight that will help identify
and address in a timely manner some of the potential risks. Taken together with the actions
to strengthen management and corporate governance, the proposed operation will incorporate
appropriate conditions and monitoring modalities that would allow for successful
implementation of the SMTP2 with reduced risks regarding fund use and project execution.
V. Appraisal Summary
A. Economic and Financial Analysis
Not Applicable
B. Technical
53. Recent assessments conducted by the Bank team concluded that ACBF has in place
adequate financial management and procurement systems and capabilities that would
allow for proper implementation of the proposed Project, contingent on implementation of
an action plan in some areas indicated below.
54. Monitoring and Evaluation. The Monitoring & Evaluation (M&E) of progress
towards achieving the objectives of the project will entail a process of continuous and
systematic collection of data on the inputs, outputs and intermediate outcome indicators
of the Project, as set out in the arrangement for results monitoring (see Annex 1). This effort
will be aimed at enabling timely management decision making by providing regular and up-to-
date information on the performance of the Project and on actual/potential problems in
implementation. The findings of relevant M&E activities will be reflected in quarterly and
annual progress reports that will be submitted to IDA and the management of ACBF. The
progress reports will cover the implementation of activities under the various Sub-projects
managed by ACBF Sub-grantees, institutional activities, training and studies, performance
indicators, and Financial Monitoring Reports (FMR). They also will cover any other issues
identified during project supervision and the effect of actions taken to resolve such issues. The
fourth quarterly report of each year will be an annual report, covering progress during the past
year.
55. Following the M&E assessment, the ensuing action plan has been adopted by
ACBF:
A draft Results Monitoring Framework (RMF) for the Project has been developed and
found acceptable by the Bank. In addition, a draft RMF for the third Strategic
Medium Term Plan (SMTP3) of ACBF will be completed when the strategy is
finalized.
Under the project, and no later than June 30, 2011, ACBF will: (i) adjust its staff
responsibilities in a manner satisfactory to the Association, so as to ensure that
assessments of the M&E systems to be used under proposed Sub-grants are conducted
by the Recipient upstream, during the preparation of each Sub-project, prior to its
approval for financing; (ii) prepare quarterly monitoring and evaluation reports on all
23
of ACBF‘s activities (including Sub-projects) in form and substance acceptable to the
Association.
As a condition of effectiveness, ACBF will revise its Operations Manual; inter alia, to
further enhance its Sub-project monitoring and evaluation.
56. Financial Management. A financial management (FM) assessment was undertaken
of the financial management system of ACBF to determine whether ACBF has the capacity
to carry out the financial management functions required for the proposed RIDA and MD-
RETF Grants.
57. Subject to a few improvements suggested in the FM action plan, ACBF has the
capacity to carry out the FM functions required for implementation of the proposed
project. During the last year, ACBF has been continuously working with the support of the
Bank and AfDB on improving its FM and governance as part of its MAP. As a result ACBF
has developed and substantially implemented improved Manuals to guide FM, Procurement
and Operations activities. It has also strengthened the staffing in its FM units. This has had the
overall effect of enhancing, among others, internal controls and audit systems as well as
controls at sub-grantees‘ level.
58. The FM assessment has, however, through risk evaluation, noted that there are
some outstanding weaknesses in the system requiring attention. First ACBF needs to
complete the IT systems integration. ACBF is using the SUN system for accounting. This
system is only interfaced with the payroll system and allowing for manual intervention
between the subsystems and sometimes within the subsystems. This makes the internal controls
less effective. Second, other areas of improvement needed for the project include (but are not
limited to) the full adoption of International Financial Reporting Standards and the regular
issuance of Interim Financial Reports (IFRs) in format and substance satisfactory to the Bank.
The action plan in Annex 3 of this PAD details the additional actions required and timetable to
strengthen the FM function.
59. Procurement. Procurement under the Project would be carried out in accordance
with the World Bank's Guidelines. The use of the World Bank's "Guidelines: Procurement
under IBRD Loans and IDA Credits" dated May 2004, revised October 2006 and May 2010;
and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers' dated
May 2004 revised October 2006 and May 2010 and the Bank‘s Standard Bidding Documents
and Request for Proposals Documents would be mandatory for all contracts financed under the
RIDA and RE MDTF Grants. At Sub-grant level, these requirements and the particular
procurement methods to be used and institutional arrangements to be maintained by the Sub-
grantees, would be elaborated in ACBF‘s Procurement Guidelines, which will be updated and
finalized as part of the updated Operations Manual, required as a condition of effectiveness.
Specific procurement methods are detailed in Annex 3.
60. The overall capacity of ACBF to manage procurement under the proposed
operation is deemed adequate and the risk medium driven by likelihood (ML). ACBF has
adequate institutional arrangements with clear roles and responsibilities for procurement. In
addition to the existing procurement unit, ACBF has recruited an international Procurement
24
Specialist to strengthen procurement management of its internal procurement as well that of
Sub-grantees. Several operational guidelines have been developed and adopted by ACBF that
will mitigate the identified risks. The envisaged contracts to be procured are generally of small
value.
61. The capacity of Sub-grant recipients would only be known after the Sub-projects
have been appraised by ACBF. Historically, the majority of ACBF grant recipients have been
government and quasi government agencies that have procurement knowledge based on their
national procurement laws. The contracts envisaged though many and scattered are expected to
be small in value. In addition, ACBF has put in place policies and procedures to assess Sub-
grantee capacity and mitigate against potential risks.
62. Actions that remain to be taken under the proposed operation (and included in the
Procurement Action Plan in Annex 3) are as follows: (i) Revision by ACBF as a condition
of effectiveness of its Operational Manual (including Procurement Guidelines for its Grant
Recipients) to ensure consistency with other Manuals and with Bank policies; and (ii) Training
(with ongoing assistance from the Bank) of Project Officers in procurement and financial
management for Sub-grants, in particular, familiarization with the Bank‘s specific procurement
requirements for RIDA and RE-MDTF Grants. In addition, ACBF would be required to
conduct an annual procurement audit (commencing FY 2011) with experts whose terms of
reference, qualifications and experience are acceptable to the Association, and furnish the
report of the audit to the Bank not later than 6 months after the end of the year.
63. Disbursement. The proceeds of both the IDA Grant and the RE MDTF Grant
would be disbursed against eligible expenditures incurred under SMTP2. These
expenditures would comprise eligible goods, services, training and operating costs.
Retroactive financing of up to US$5 million equivalent of the IDA Grant and 20% of the RE
MDTF for operating expenses under Component 2 (Institutional Development) and for which
payment is made between July 1, 2010 and the signing of the Financing/Grant Agreement
concerned. ACBF‘s financial statements, including those for the Project, would be audited
annually by independent auditors acceptable to the Bank.
64. The Bank would disburse the RIDA Grant and MDTF Grant proceeds based on
consolidated and quarterly withdrawal requests sent by ACBF., The Bank would provide
ACBF with advances through two Designated Accounts opened respectively for the RIDA
Grant and the RE MDTF Grant in a reputable commercial bank, satisfactory to the Bank as
described in Annex 3, section C and, sub-section 14. To allow for proper tracking of eligible
expenditures financed under the RIDA and MDTF Grants, withdrawal requests would be
accompanied by unaudited Interim Financial Reports (IFRs) indicating sources and uses of
funds (form and content of IFRS have been agreed).While the operating costs and Sub-grants
to Sub-grantees would be committed during FY2011, the RIDA Grant and RE MDTF Grant
proceeds would be disbursed over 4 to 5 years, reflecting the normal disbursement period of
ACBF‘s sub-grants.
65. Social (including safeguards)
25
There are no social issues to be addressed under this project.
66. Environment (including safeguards).
The EA category of this project is ―C‖, since all the activities will be for technical
assistance and will not involve any environmental impacts. Sub-project proposals that
might involve design work leading to investments, such as feasibility studies and
engineering designs, would not be eligible for financing under the IDA Grant or the RE
MDTF Grant.
67. Other Safeguards Policies triggered (if required).
26
Annex 1: Results Framework and Monitoring
(ACBF Regional Capacity Building Project)
PROJECT DEVELOPMENT OBJECTIVE (PDO):
1. Enhanced capacity for effective policy formulation and management in ACBF sub-grant recipients’ countries
2. Improved and sustained management of ACBF operations
PDO Level Results Indicators*
Co
re
Unit of
Measure
Baseline
(SMTP2
average
or 2010)
Cumulative Target Values**
Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Description
(indicator
definition etc.) Dec
2011
Dec
2012
Dec
2013
Dec
2014
Dec
2015
1. Number of
recommendations, submitted
by ACBF grantees, and used
by government in policy
formulation
# 0 5 10 15 20 25 Annual
Independent
Survey of
ACBF-
supported
policy units
and progress
reports of
Grantees
ACBF-M&E
unit
Count of
recommendations submitted by policy
units which the
government uses in policy formulation
2. Ratio of Total Budget to Total
Active Portfolio Value % 8 12.6 14.4 12.4 10.9 9.8 Annual
ACBF-
Finance /
Annual
Financial
Statements
audited
reports
ACBF-Finance This indicator
would show how
much ACBF is
spending to deliver
and manage 1
dollar grant.
INTERMEDIATE RESULTS
Component 1: Strengthened key institutions and human resources involved in policy formulation (new projects)
3. Economic policy researches
completed in policy institutes
supported by ACBF (number)
# 0 10 20 30 40 50 Annual
ACBF-
supported
policy units /
records
review,
interviews
ACBF –OPDs Policy papers
being developed
4. MDAs supported by the targeted
economic policy units (number)
a. Technical assistance
b. Training
# 0
0
5
5
35
55
65
155
95
205
125
255 Bi-Annual
MDAs
supported by
ACBF/
records
review,
interviews
ACBF –OPDs
Information about
the nature of the
training and the
concrete outcomes
of the support will
be available at
project level
27
during
implementation
Intermediate Results Indicators*
Co
re
Unit of
Measure
Baseline
(SMTP2
average
or 2010)
Cumulative Target Values** Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Description
(indicator
definition etc.)
Dec
2011
Dec
2012
Dec
2013
Dec
2014
Dec
2015
5. Students receiving a Master‘s
degree certificates in Economic
Policy and Public
Administration by ACBF
supported programs/institutions
# 0 0 80 180 280 380 Annual
CSOs, private
sectors
institutions
supported by
ACBF/
surveys,
records
review
ACBF-OPDs This is a count of
number of students
obtaining MA
degrees in the
indicated field of
study
6. Students receiving training
certificates in Economic Policy,
Public Administration and/or
statistics
# 0 0 200 450 700 950
ACBF
Grantees
OPDs-ACBF This is a count of
number of students obtaining certificates
for short courses in the
indicate areas.
Component 2: Improved ACBF management process and structures
Medium-I There are potential risks of donors backing-off if new allegations of
corruption and misuse of funds reemerge in ACBF despite positive
results from independent evaluation of ACBF programs. Yet, the
likelihood of this occurrence is limited given (i) the changes in
ACBF management, (ii) the strengthening of internal controls,
resulting from application of the Management action Plan (MAP) in
2009 and (iii) the decision to apply Bank fiduciary policies and
introduce extended Bank supervision of the Sub-projects financed.
Introduction of standard Bank fiduciary
policies and supervision in ACBF
operations may help in increasing donors
trust in ACBF reliability.
Implementing Agency Risks
Medium-I The forensic and human resource audits conducted of ACBF
activities revealed a number of lapses in internal control processes
and in general compliance with ACBF‘s policies. At the operational
level, the implementation of the MAP at end of September 2010
has yielded remarkable results in a very short period of time that
has helped restore ACBF‘s internal controls, staff motivation and
morale; and the donors‘ trust.
The proposed Project will build upon the
MAP achievements at all levels and
ensure they are continuously maintained
and enhanced during the remaining
SMTP2 period and into SMTP3.
58
Project Risks
Design
High Following the recent governance issues and to help mitigate the
risks encountered in ACBF management the Bank instruments
supporting ACBF will require application of the Bank‘s fiduciary
policies as well as enhanced monitoring of ACBF operations
through closer supervision.
To that end, a SIL operation is proposed primarily geared toward
supporting the completion of SMTP2 program involving standard
supervision of ACBF corporate and sub-grantees activities.
Introduce the Bank fiduciary policies,
including FM, procurement, anti-
corruption and disbursement policies
and standard Bank supervision while
ensuring this does not hamper ACBF
capacity to execute its program.
Social and Environmental
Low
There are no social & environmental risks,
All Sub-grants will be for capacity building TA (no engineering designs or feasibility studies are involved), and ACBF’s operational budget does not include any civil works.
Program and Donor
Medium-I Delays in receipt of MDTF funds may jeopardize achievement of
SMTP2 program objectives. While many donors have confirmed
their pledges, delays could ensue due to time needed to conclude (i)
interactions with donors and (ii) coordination of internal processes
required before RE MDTF activation.
The RE MDTF was established in
December 2010 and is now available for
receipt of donors‘ funds. To that end,
draft Administrative Agreements were
sent to key donors for review in
November 2010, as promised in Paris.
The first contribution from SIDA
(SEK30 million), deposited into the
account. Continued action is ongoing to
ensure donors‘ pledges are collected on
time to fund SMTP2 program
Delivery Quality
Medium-I ACBF existing M&E system is weak and does not allow for proper
monitoring of the Foundation activities and programs. Efforts
should be made to introduce a meaningful monitoring of operations
and activities.
The proposed Project would finance an
M&E capacity building program based
on the M&E action plan agreed upon
during appraisal.
Other Risks (Sub-grantees risks)
High The recent overhaul of ACBF management, operations, fiduciary
and monitoring framework has improved the risk management
function at ACBF level. There still is a need to ensure that the
system is working properly and Sub-grantees‘ activities are
adequately monitored in all aspects (fiduciary and technical)
Sub-grantees will be required to follow
standard Bank fiduciary policies (FM,
procurement, Anti-corruption).
Introduce a suitable level of Bank
supervision of Sub-grantees (especially
in fiduciary issues and M&E) without
compromising the existing ACBF
systems.
59
Other Risks (Risk of Non-Payment)
Low A risk related to ACBF‘s financial condition is the possibility that
should any of the proceeds of the IDA Grant or RE MDTF Grant be
misused, ACBF may not be in a position to refund them to the
Bank. This risk is always inherent in making regional IDA grants
to non-revenue generating organizations such as ACBF, which have
no guarantees by its members of financial coverage.
This risk is mitigated by virtue of (a) the
development under the MAP of a strong
team of professionals and sound
fiduciary systems, (b) training provided
by the Bank to ACBF staff on Bank
policy requirements, which will continue
throughout Project implementation; and
(c) ACBF‘s contractual right to a refund
of amounts misspent by Sub-grantees,
which is included in its Sub-grant
agreements.
Overall Risk Rating at
Preparation Overall Risk Rating
During Implementation Comments
Medium-I Medium-I
The Bank appraisal mission in November 2010 and the BoG meeting in Paris in September
2010 provided comfort that perceived risks during PCN are significantly mitigated. Donors‘
contributions to the newly established MDTF have started. Actions taken by ACBF
governing bodies and new ACBF management with support from Bank and AfDB have
strengthened ACBF‘s internal controls and restored trust with staff and donors. However,
the new ACBF framework needs to be tested over time. The Bank management decision to
require application of the Bank‘s operational policies including Bank supervision of ACBF
operations through the proposed RIDA Grant and RE MDTF will help in monitoring the
situation and mitigating outstanding fiduciary risks. Most of the remaining risks identified
in FM and procurement are going to be mitigated through defined action plans and could be
managed during the implementation phase.
60
Annex 5: Implementation Support Plan
AFRICA: ACBF REGIONAL CAPACITY BUILDING PROJECT AND RE-MDTF
Strategy and approach for Implementation Support
A. The strategy for implementation support (IS) has been developed based on the nature of
the project and its risk profile. It will aim at making implementation support to the client more
flexible and efficient, and will focus on implementation of the risk mitigation measures defined
in the ORAF.
M&E. Monitoring of ACBF results and performance will be critical to meeting the
development objective of this project. To that end, during implementation support
missions, the Bank team will carry out regular assessment of SMTP2 key performance
indicators against targets agreed upon at appraisal. In addition, ACBF will be required to
initiate an independent evaluation of SMTP2 program and results in early 2011 so as to
be able to draw lessons for the overall M&E system and Results Monitoring Framework
of the upcoming SMTP3.
Procurement. The Bank will undertake supervision through a combination of prior and
post reviews and implementation support missions that will be geared towards:
(a) providing training to relevant staff of ACBF; (b) reviewing procurement documents;
(c) providing detailed guidance on the Bank‘s Procurement Guidelines; and
(d) monitoring procurement progress against the detailed Procurement Plan. At ACBF
corporate level post procurement review will be undertaken once a year. For Sub-
grantees, ACBF will hire a consultant to conduct post procurement reviews under a
sample of Sub-grants once a year and ACBF will share the consultant report with the
Bank. The Bank will review the report and at its discretion would undertake further
reviews on areas highlighted by the report.
Financial management. The Bank team will undertake an FM Implementation Support
(IS) mission twice a year due to the size of the Project. During the IS missions, the FM
team will review the FM systems for continued adequacy, evaluating the quality of the
budgets and ACBF‘s adherence thereto, reviewing the IFRs and/or annual Financial
Statements, compliance with relevant manuals including Financial Policies and
Operations manuals and follow up on both internal and external audit reports. It is
envisaged that the Bank FM team will mostly interact with ACBF itself. However, the
Bank reserves the right to review a Sub-Grantee directly using the Bank‘s FM staff in the
relevant Country Offices when and where required. The procedures for this will be
agreed with ACBF.
Environmental and Social Safeguards. The project has no environmental or social
safeguards issues and will not require specific implementation support activities.
Anti-Corruption. The Bank team will supervise the implementation of ACBF‘s
Governance Action Plan as well as its Fraud and Corruption Policy, and provide guidance
in resolving any issues identified. The Bank‘s Anti-corruption Guidelines will apply to
61
this operation, and Bank team will supervise proper implementation of these guidelines
as well.
Other Issues. The Bank will carry out intensive missions especially during the first year
of implementation to ensure that the system is working properly; Sub-grants are
compliant with Bank requirements at entry and Sub-projects are adequately monitored in
all aspects (fiduciary and technical) during implementation. Bank supervision of Sub-
projects will also be undertaken without compromising the existing ACBF systems while
taking into account the transactions costs for the Bank and ACBF.
Implementation Support Plan
B. Bank team members (financial management and procurement) will be based in the region
and country office respectively to ensure timely, efficient and effective implementation support
to the client. Formal supervision and field visits will be carried out twice a year during the
implementation period. Detailed inputs from the Bank team are outlined below:
Technical inputs. Technical procurement support will be provided to ACBF during the
first year to assist in: (i) adapting Operation, Disbursement, and Procurement manuals for
sub-grantees to ensure that Bank requirements are properly reflected; (ii) reviewing seven
grants selected in the 2011 pipeline so as to train ACBF staff in, and ensure compliance
with, Bank policies and fiduciary requirements and (ii) in reviewing bid documents to
ensure fair competition through proper technical specifications and fair assessment of the
technical aspects of bids. Technical procurement support and site visits will also be
conducted at the sub-grantees level on a semi-annual basis throughout project
implementation.
Fiduciary requirements and inputs. Training will be provided by the Bank‘s financial
management specialist and procurement specialist before the commencement of project
implementation. The team will also help ACBF identify capacity building needs to
strengthen its financial management capacity and to improve procurement management
efficiency. Both the financial management and the procurement specialist will be based
in the country office to provide timely support. Formal supervision of financial
management will be carried out semi-annually, while procurement supervision will be
carried out on a timely basis as required by the client.
Safeguards. Environment specialist and a social specialist inputs are not required, since
this is a C category project.
Financial review of ACBF corporate finance. Input is required from a financial
specialist for regular review of ACBF‘s financial status to verify compliance with
financial covenants. This exercise will be combined with the supervision of other World
Bank financed projects being implemented in Zimbabwe through semi-annual review.
62
Operation. An operations officer will assist in reviewing the Sub-grants‘ quality and
compliance before entry, and in regular implementation support of all operational
aspects, as well as coordination with the client and among Bank team members. The main focus of implementation support is summarized below.
Skills Needed Staff Weeks (SWs)
FY11 FY12 FY13 FY14 FY15 Total
Task Team Leader 10 8 8 8 8 42
AFTPR Manager 1 1 1 1 1 5
AFTPR Administrative Support 5 5 5 5 5 25
Financial Management Specialist 8 8 8 8 8 40
Procurement Specialist 8 8 8 8 8 40
Monitoring and Evaluation 4 1 - - 1 6
Consultant 10 5 5 5 5 30
TOTAL 46 36 35 35 36 188
Travel Number of trips planned
FY11 FY12 FY13 FY14 FY15 Total
Task Team Leader 2 2 2 2 2 10
Financial Management Specialist 2 2 2 2 2 10
Procurement Specialist1/ - - - - - -
Consultant 1 1 1 1 1 5
TOTAL 5 5 5 5 5 25
1/ Procurement Specialist is based in CO, Harare.
63
Annex 6: World Bank/IDA staff and consultants who worked on the project
Name Title Unit
Yusupha Crookes Director AFCRI
Jan Walliser Acting Sector Director AFTPM
Anand Rajaram Sector Manager AFTPR
Mamadou Deme Senior Public Sector Specialist/Team Leader AFTPR
Macmillan Anyanwu Operations Officer AFTPR
Said Al Habsy Operations Adviser AFTDE
Diego Garrido Martin ET Consultant AFTDE
Isabel Mignone Del-Carril Operation Officer-Trust Fund AFTDE
Edward Olowo-Okere Director AFTOS
Francis Kanyerere Mkandawire Financial Management Specialist AFTFM
Daniel Yaw Domelevo Sr Financial Management Specialist AFTFM
Patrick Kabuya Financial Management Specialist AFTFM
V.S. Krishnakumar Manager AFTPC
S.M. Quamrul Hasan Senior Procurement Specialist AFTPC
Simon Chenjerani Chirwa Procurement Specialist AFTPC
Tijan Sallah Manager AFTCP
Nicolette DeWitt Lead Counsel LEGAF
Agata Pawlowska Sr Operations Officer CFPIR
Ivonna Kratynski Lead Finance Officer CTRLP
Magdalena Manzo Senior Operations Officer CFPTP
Frode Davanger Operations Officer AFCRI
Reynaldo P. Castro Consultant AFTPR
Douglas I. Graham Consultant OPCFM
Madeleine Chungkong Senior Program Assistant AFTPR
64
Annex 7: ACBF Recent Developments
1. ACBF creation and evolution
1. The establishment of the African Capacity Building Foundation dates back to 1988 when the
World Bank convened a brainstorming session in Kenya for its staff and African
policymakers, economic managers and academics to exchange views on Africa‘s
development problems. Sub-Saharan Africa‘s limited capacity for policy analysis and
economic management was identified as a primary contributing factor to the region‘s
inability to adjust to the economic dislocations of the 1970‘s. It was emphasized that Africa
needed to build the necessary capacity in order to develop.
2. The African Capacity Building Foundation (ACBF) was established in 1991 as a
collaborative effort of the World Bank, the African Development Bank, UNDP, bilateral
donors and African governments to provide financial and technical support toward the
building of capacity in the areas of economic policy analysis and development management.
A Brief on major events related to ACBF is presented in Box 3 below. Since its
establishment, ACBF has evolved through three distinct phases: an initial phase (1992 –
1995); an institutionalization phase (1996 – 1999); and the phase involving the integration
and implementation of the Partnership for Capacity Building in Africa (PACT) (2000 –
present).
3. To date (June 2010), ACBF has committed over US$558 million in grants covering some 40
countries in Africa with 111 active projects. Major areas of interventions cover six core
competencies in: (i) Economic policy analysis and management; (ii) Financial management
and accountability; (iii) Public administration and management; (iv) National statistics and
statistical systems; (v) National parliaments and parliamentary institutions; and
(vi) Professionalization of the voices of the private sector and civil society.
4. Throughout the past 2 decades, ACBF-supported projects and programs have contributed to
enhancing the effectiveness of the state; supported the development of a culture of
accountability and transparency in some countries; supported the interface among national
stakeholders in the development process and assisted in moving forward the regional
integration agenda through strengthening of regional economic communities (see Annexure 1
for more details).
65
Box 3: Historical Timeline of ACBF Partnerships’ Evolution and Major Events
(Extract From The 2009 ACBF Annual Report) February 1991 Establishment of ACBF
Resource envelope target : US$100million
Pledges: US$94.1 Million.
November 1991 Official launching of ACBF in Harare
23 countries were founding members of the Foundation: Austria, Canada, Denmark,
Finland, France, Japan, The Netherlands, Norway, USA, UK, Sweden, Botswana,