FOR OFFICIAL USE ONLY Report No: ICR00004767 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-52770, IDA-55500, IDA-H9990, TF-A1815, IDA-D1420, TF-A4949, IDA-61160, IDA-D2170, TF-A6378, IDA-D2710) ON THREE CREDITS, FIVE GRANTS AND THREE RECIPIENT EXECUTED TRUST FUNDS IN THE TOTAL AMOUNT OF US$126.34 MILLION EQUIVALENT TO THE REPUBLIC OF LIBERIA FOR THE POVERTY REDUCTION SUPPORT OPERATIONS I, II, III, IV AND SUPPLEMENTALS FOR THE SECOND AND THIRD OPERATIONS December 23, 2019 Macroeconomics, Trade And Investment Global Practice Africa Region The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals CURRENCY EQUIVALENTS (Exchange Rate Effective December 19, 2019) Currency Unit = Liberian Dollar (LDR) 1.00 LDR = US$0.0053. US$1 = 188.4 LDR FISCAL YEAR July 1 - June 30 Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Regional Director: Asad Alam Practice Manager: Abebe Adugna Dadi Project Team Leader(s): Marina Bakanova ICR Team Leader: Daniel Kwabena Boakye ICR Primary Authors: Richard J. Carroll and Daniel Kwabena Boakye The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AfT Agenda for Transformation AML Anti-Money Laundering ASYCUDA Automated System for Customs Data CFSNS Comprehensive Food Security and Nutrition Survey CFT Countering the Financing of Terrorism CPS Country Partnership Strategy CRW Crisis Response Window CSA Civil Service Agency CTRs Currency Transactions Reports DSA Debt Sustainability Assessment DPO Development Policy Operation ECF Extended Credit Facility ESBI Energy Supply Board International EVD Ebola Virus Disease FDI Foreign Direct Investment FIU Financial Intelligence Unit FY Fiscal Year GAC General Auditing Commission GDP Gross Domestic Product GNI Gross National Income GoL Government of Liberia HFO Heavy Fuel Oil HIES Household Income and Expenditure Survey IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation IFMIS Integrated Financial Management Information System IGDPO Inclusive Growth Development Policy Operation IMF International Monetary Fund IPFMRP Integrated Public Financial Management Reform Project IPSAS International Public Sector Accounting Standards LACC Liberia Anti-Corruption Commission LACE Liberia Agency for Community Empowerment LCPD Least Cost Power Development Plan LDP Letter of Development Policy LEC Liberia Electricity Corporation M&E Monitoring and Evaluation MIC Middle Income Country MoE Ministry of Education MFDP Ministry of Finance and Development Planning MoH Ministry of Health MSME Micro, Small & Medium Enterprise The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals MTEF Medium-Term Expenditure Framework MW Mega Watts OSRP Oil Spill Response Plan PA Prior Action PDO Program Development Objective PEFA Public Expenditure and Financial Accountability PER Public Expenditure Review PFM Public Financial Management PPCA Public Procurement and Concession Act PPCC Public Procurement and Concessions Commission PRS Poverty Reduction Strategy PRSDPO Reduction Support Development Policy Operation PSMP Public Sector Modernization Project SDR Special Drawing Rights SIDA Swedish International Development Agency SORT Systematic Operation Risk Tool STRs Suspicious Transactions Reports TA Technical Assistance UNMIL United Nations Mission in Liberia UNCTAD United Nations Conference on Trade and Development USAID United States Agency for International Development WAPP West African Power Pool WB World Bank WEO World Economic Outlook The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES .................................................... 5 II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES ............................................ 14 III. OTHER OUTCOMES AND IMPACTS ................................................................................ 24 IV. BANK PERFORMANCE ................................................................................................... 26 V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES .............................................. 27 VI. LESSONS AND NEXT PHASE ........................................................................................... 28 ANNEX 1. RESULTS FRAMEWORK ......................................................................................... 30 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES....... 38 ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’ COMMENTS ............................................................................ 44 ANNEX 4. SECTORS AND THEMES ......................................................................................... 45 ANNEX 5. SUPPORTING DOCUMENTS .................................................................................. 50 ANNEX 6. POLICY MATRIX TRIGGERS, PRIOR ACTIONS AND INDICATORS .............................. 51 ANNEX 7. ANALYTICAL WORK FOR THE SERIES ..................................................................... 60 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals DATA SHEET BASIC INFORMATION Program Series Project ID Short Name Full Name P127317 LR-PRSC-I (FY13) LR-Poverty Reduction Strategy Credit I P146619 LR PRSC II Poverty Reduction Support Credit II P151502 LR-PRSC III (FY16) Poverty Reduction Support Credit III Liberia Fourth Poverty Reduction Support Development P162111 MFMPRSDPO-IV Policy Operation Series Details (USD) Project ID Approved Amount Disbursed Amount P127317 10,000,000.00 10,349,892.00 P146619 10,000,000.00 9,698,296.00 P151502 40,000,000.00 39,061,561.00 P162111 20,000,000.00 20,697,493.88 Total 80,000,000.00 79,807,242.88 KEY_D PF_OPTI ONS_ TBL P127317 P146619 P151502 P162111 Policy-Based Guarantees No No No No IDA- TF- Ln/Cr/TF IDA-52770 55500,IDA- IDA-D1420 A6378,IDA- H9990 D2710 Concept Review 04-Feb-2013 17-Apr-2014 29-Mar-2016 31-Jul-2017 Decision Review 12-Apr-2013 03-Oct-2014 23-Sep-2016 29-Nov-2017 Approval 26-Jun-2013 12-Nov-2014 17-Nov-2016 24-Jan-2018 Page 1 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Effectiveness 07-May-2014 02-Dec-2014 24-Nov-2016 14-Mar-2018 Original Closing 30-Jun-2014 30-Jun-2015 30-Jun-2017 31-Dec-2018 Actual Closing 30-Jun-2014 30-Jun-2016 31-Dec-2017 31-Dec-2018 Crisis or Post-Conflict No Yes No Yes Regular Deferred Drawdown Option No No No No Catastrophe Deferred Drawdown Option No No No No Sub-National Lending No No No No Special Development Policy Lending No No No No Organizations Series Project Borrower Implementing Agency P162111 Republic of Liberia Ministry of Finance and Development Planning P146619 P127317 P151502 Program Development Objective (PDO) Program Development Objective (PDO) (From last operation in the series) The objectives of the proposed operation are: (i) strengthening governance with particular emphasis on transparency and accountability as well as budget execution and oversight; (ii) addressing key constraints to growth, including electricity; and (iii) improving human capital development particularly through improved access to education and health. PROGRAM FINANCING DATA (USD) World Bank Administered Financing Approved Amount Actual Disbursed P127317 10,000,000 10,349,892 IDA-52770 Page 2 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals P146619 20,000,000 18,993,555 IDA-55500 10,000,000 9,698,296 IDA-H9990 P151502 40,000,000 39,061,561 IDA-D1420 P162111 4,670,000 4,670,000 TF-A6378 20,000,000 20,697,494 IDA-D2710 Total 104,670,000 103,470,798 RATINGS SUMMARY Program Performance Overall Outcome Relevance of Prior Actions Achievement of Objectives (Efficacy) Moderately Satisfactory Satisfactory Moderately Satisfactory Bank Performance Moderately Satisfactory ACCOUNTABILITY AND DECISION MAKING At ICR: Regional Vice President Country Director Director Hafez M. H. Ghanem Pierre Frank Laporte Asad Alam Practice Manager Task Team Leader(s) Abebe Adugna Dadi Marina Bakanova, Daniel Kwabena Boakye Page 3 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals At Approval: P127317 Regional Vice President Country Director Director Makhtar Diop Yusupha B. Crookes Marcelo Giugale Practice Manager Task Team Leader(s) Mark Roland Thomas Errol George Graham, Raymond Muhula P146619 Regional Vice President Country Director Director Makhtar Diop Henry G. R. Kerali Marcelo Giugale Practice Manager Task Team Leader(s) Yaye Seynabou Sakho Errol George Graham P151502 Regional Vice President Country Director Director Makhtar Diop Henry G. R. Kerali Carlos Felipe Jaramillo Practice Manager Task Team Leader(s) Yaye Seynabou Sakho Errol George Graham P162111 Regional Vice President Country Director Director Makhtar Diop Henry G. R. Kerali Carlos Felipe Jaramillo Practice Manager Task Team Leader(s) Abebe Adugna Dadi Marina Bakanova Page 4 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES 1. This Implementation Completion and Results Report (ICR) assesses the achievements of the Liberia Poverty Reduction Support Development Policy Operation (PRSDPO) Series, which consisted of four operations and two supplemental financings. The program aimed to strengthen governance, with an emphasis on transparency, accountability, and enhanced budget execution and oversight; to remove key constraints to growth, including in the energy, transportation, and agricultural sectors; and to accelerate human capital development through enhanced access to education and healthcare. The series was structured around three pillars focusing on governance and civil service reforms, economic transformation, and human capital development. The series was financed by three IDA credits, four IDA grants, and three recipient-executed trust funds, with IDA financing totaling US$126.34 million equivalent, of which trust funds financed about US$14.04 million. Table 4 provides an overview of the entire series, including each individual DPO and supplemental financing. A. Context at Appraisal Context 2. Liberia is a fragile state striving to overcome the legacy of two devastating civil wars, and during the preparation of the series the country was still reeling from the impact of the Ebola crisis and the protracted slump in global commodity prices. The two civil wars between 1989-2003 caused widespread loss of life, suppressed economic activity, and destroyed vital infrastructure. The conflict was largely precipitated by the prolonged marginalization of a large share of the Liberian population and their exclusion from both political power and the economic wealth offered by the country’s natural resources. Poor economic governance and weak public financial management allowed public resources to be utilized for the benefit of a small political elite, which heightened inequality and aggravated social instability. Following the end of the war, Liberia’s per capita GDP grew at an average rate of 6.2 percent per year between 2003 and 2013, but the twin shocks of the Ebola outbreak and the sharp decline in global commodity prices brought Liberia's renewed expansion to a halt. 3. Since the end of the civil war, Liberia has made remarkable progress in establishing a stable multiparty democracy. The 2003 Accra Accord created a transitional government, which organized new elections. This process succeeded in enabling a diverse range of interest groups, including former combatants, to pursue their goals through formal institutions—often for the first time. In 2005, Madam Ellen Johnson Sirleaf was elected president for a 6-year term. Sirleaf was reelected in 2011 and served a second term, which ended in 2017. Between October and December 2017, Liberia held its third round of elections since the end of the second civil war, and 2018 marked the country’s first peaceful political transition from a living incumbent, as well as the first voluntary transfer of power between political parties. Liberia is now enjoying the longest period of democratic rule in its history. Meanwhile, the United Nations Mission in Liberia (UNMIL) completed the transfer of security responsibilities to national institutions at end-March 2018.1 4. Despite the country’s remarkable progress, efforts to strengthen governance, improve transparency, support structural economic transformation, and enhance human development remain unfinished. Tightening budget 1 The UNMIL mandate was extended through March 31, 2018, to ensure a smooth handover of security functions after the election. By the end of 2017, about 1,000 UNMIL civilian and military personnel remained in Liberia, down from over 18,000 in early 2016. Page 5 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals oversight was vital to ensure expenditure efficiency, and key constraints to growth and service delivery remained to be addressed. Institutional capacity constraints were particularly acute, as Liberia emerged from conflict with little or no technical capabilities in key areas of macroeconomic management, interagency coordination, legislation and policymaking, anticorruption, and governmental oversight. 5. In 2012, the Government of Liberia published its national strategic vision, Liberia Rising 2030 . This plan was designed to enable Liberia to achieve middle-income country (MIC) status2 by 2030 through peaceful and inclusive politics, stable institutions, economic diversification, and accelerated human capital formation. The Agenda for Transformation (AfT), a medium-term development plan for 2013–2017, attempted to advance the government’s vision by focusing on Liberia’s primary development challenges: consolidating peace and security, developing manufacturing and services, investing in human capital, improving the quality of governance, and strengthening public institutions. 6. From the end of the civil war until 2014, Liberia made considerable progress in poverty reduction, though poverty indicators remained high. The available data suggest that the poverty headcount ratio, measured as a percentage of population below the international poverty line of US$1.9/day in 2011 purchasing-power-parity terms, fell from 68.6 percent in 2007 to 38.6 percent in 2014. Economic growth drove poverty reduction, supported by a sharp drop in inflation after 2008. The government also targeted the agriculture sector under its Poverty Reduction Strategy (PRS) and provided income support to poor and vulnerable households through the Liberia Agency for Community Empowerment (LACE). According to the 2014 Household Income and Expenditure Survey (HIES), conducted just before the Ebola outbreak, the national headcount poverty ratio was 54.1 percent in the first half of 2014, with significant differences between rural and urban poverty rates (70 percent and 43.3 percent, respectively). Geographic and economic isolation contributed to both high poverty rates and low human development indicators in rural areas. Macroeconomic Context 7. When the first operation in the series (PRSDPO-I) was appraised in May 2013, the Liberian economy had been growing at a robust pace since the global economic crisis of 2008/09. The real GDP growth rate reached an estimated 8.9 percent in 2012, bolstered by strong exports (especially rubber, forestry products, and iron ore), as well as rising foreign direct investment (FDI) related to concessions and expanding construction activity (Table 2). The inflation rate moderated to an estimated 5.5 percent in 2012, reflecting prudent macroeconomic management and lower food and fuel prices. Fiscal revenue had risen steadily due to improved tax administration and increased economic activity, while the government kept expenditures in line with available resources. An increase in the overall fiscal deficit (including grants) was projected due to expanded investment in infrastructure projects, in the ports, energy and roads subsectors. The trade deficit widened in 2012 due to rising concession-financed capital imports and higher food and fuel import prices, which offset an increase in iron ore exports. The overall external position was estimated to remain broadly stable, as inflows of official transfers and FDI financed the current-account deficit and reserve coverage remained equivalent to three months of imports. 8. Liberia’s medium-term outlook was favorable, albeit subject to significant risks. The Liberian economy was projected to grow at an average annual rate of about 7 percent during 2013-15, reflecting a favorable external environment and increased FDI in the natural-resource-based subsectors, particularly iron mining, forestry, and palm oil production. Liberia benefitted from debt relief in 2009-10, and a 2012 Debt Sustainability Assessment (DSA) confirmed the country’s low risk of debt distress. The macroeconomic policy framework was supported by an IMF Extended Credit 2The World Bank defines middle-income countries as having a per capita gross national income (GNI) of at least US$1,005. https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups . Page 6 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Facility (ECF) agreement, which was approved in November 2012. However, downside risks remained high due to an uncertain domestic political and security situation coupled with the threat of external economic shocks, especially falling prices for Liberian commodity exports and rising prices for imported food and fuel. Observed outcomes for 2012-15 proved worse than had been projected when the PRSDPO I was appraised (Table 1). The materialization of downside risks, including unanticipated shocks from the Ebola outbreak and the withdrawal of UNMIL, significantly altered the context for subsequent operations. These changes are described in Section 1 B. Table 1: Selected Macroeconomic Indicators, 2011-2015 Indicator 2011 2012 2013 2014 2015 PRSC I PRSCI PRSCI PRSCI PRSCI Est. Proj. Act. Proj. Act. Proj. Act. Proj. Act. Real GDP (% growth) 8.2 8.9 8.3 8.3 8.7 5.6 0.7 7.1 0 Consumer prices (end of period %) 11.4 5.5 7.7 4.7 8.5 4.0 7.7 4.0 8 Exports, f.o.b (US$ Millions) 381 472 479 539 559 584 454 967 255 Imports, f.o.b (US$ Millions) 1,010 1347 1067 1565 1020 1652 1092 1570 1171 Current account balance incl. grants (% of GDP) -34.1 -52.4 -28.0 -65.0 -28.5 -71.6 -32.5 -45.6 -35.4 Gross official reserves (US$ Millions) 416 372 381 412 393 440 411 466 446 Broad Money (% Change ) 32.7 13.2 13.4 9.3 12.0 7.0 -30.1 13.2 45.2 Revenues and Grants (% of GDP) 26.4 27.8 28 27.3 29.9 28.8 27.4 27.6 32.4 Expenditures (% of GDP) 19.0 21.6 31.4 19.7 31.5 19.2 29.3 19.2 40.8 Overall surplus / deficit (incl. grants) -0.6 -3.2 -3.4 -6.0 -1.6 -6.6 -1.9 -6.2 -8.4 Public sector external debt (incl. arrears) 113.9 166.0 178.0 286.7 265.6 435.1 463.8 589.1 616.1 Source: PRSCI (or PRSDPO 1) PD for estimates and projections at the time of appraisal; IMF World Economic Outlook (WEO) for actuals. Sectoral Context 9. Economic exclusion, facilitated by opaque government operations, was among the primary drivers of conflict in Liberia. Consequently, the government emphasized the importance of transparency in the public sector to ensure equality of opportunity. Because FDI and donor transfers were critical to finance Liberia’s development agenda over the medium-to-long term, transparency and accountability were also vital to build confidence among Liberia’s development partners. The government made a concerted effort to establish Liberia as a reputable member of the global payment system, which would improve the country’s ability to attract reliable capital flows. 10. Strengthening integrity of institutions and ensuring ethical conduct among public officials were critical to address the country’s pervasive corruption. The lack of transparency and accountability for managing natural resource revenues, illicit financial flows across the country’s borders, and the misappropriation of public funds were major constraints on Liberia’s economic development. Moreover, the government’s efforts to attract foreign direct investment (FDI) and external development support required substantial improvements in transparency and integrity in the management of FDI and budgetary assistance. 11. Enhancing the quality of the civil service was vital to improve public administration. The civil service faced enormous challenges that undermined the performance of the public sector. Ministries and agencies had unclear mandates and overlapping functions, which undermined their institutional effectiveness. Senior managers routinely abused discretionary allowances, creating disparities and opaqueness in the civil service remuneration structure. Meanwhile, the government’s weak technical capacity undermined expenditure efficiency and service delivery across the public sector. Page 7 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals 12. Deficiencies in the procurement process weakened budget execution. The protracted civil war severely disrupted procurement policies and practices and eroded human capital and institutional capacity in the public sector. The Public Procurement and Concession Act (PPCA), which became effective in January 2006, marked the first step toward subjecting public sector contracts to meaningful competition. The PPCA was comprehensive and provided a sound framework for procurement management, but Liberia’s weak institutional framework undermined its implementation. In 2010, amendments to the PPCA strengthened the regulatory functions of the Public Procurement and Concession Commission (PPCC) and helped build the technical capacity of procurement personnel. 13. The electricity sector suffered from minimal generation capacity and high costs. Electricity costs exceeded $0.50/Kwh, which inhibited business development, discouraged private investment (including FDI), and diminished household welfare. Many households could not afford to connect to the public electricity grid or alternative sources, which encouraged widespread electricity theft. Total generation capacity was just 22MW, though the rehabilitation of the Mt. Coffee hydropower plant and improvements in service quality were expected to provide an additional 60 MW of capacity while lowering costs. However, the additional capacity also created new opportunities for illegal connections, and inadequate metering contributed to rising commercial losses, which—along with persistently high technical losses— undermined the financial viability of the sector. 14. A lack of secure land access constrained agricultural development. In the 2006 Comprehensive Food Security and Nutrition Survey (CFSNS), 66 percent of respondents reported having access to land, though 41 percent reported that their farm sizes were smaller than they had been prior to the war. The CFSNS also found that 67 percent of households lacked deeds for the lands to which they had access at the time. 15. A lack of credit for long-term investments and inadequate working capital were also important constraints on agricultural development. Liberia’s nascent financial sector provided inadequate credit for investment in agriculture. The country’s poor credit culture and ineffective legal system made it costly for creditors to act against delinquent borrowers. Liberia’s payment, settlement, and credit-reporting systems were weak and rudimentary, and only a small share of the population had access to financial services, including small and medium enterprises in the agriculture sector. 16. Access to education, as measured by gross primary and secondary enrollment rates, had shown little improvement, while education quality remained poor. The gross primary enrollment rate increased marginally from 86.3 percent in 2007 to 87.7 percent in 2010. The large share of overage students at all levels of the education system compounded the challenge of expanding education access. The gross secondary enrollment rate rose from 50.9 percent in 2007 to 58.4 percent in 2010 but remained far below the gross primary rate. The secondary enrollment rate for boys increased from 56.9 percent to 65.1 percent, while the rate for girls increased from 44.2 percent to 51.7 percent. More than half of household heads had no secondary education, while about 38 percent of household heads had no education at all. A sharp rural/urban divide was also evident, as 45.1 percent of rural household heads had no education, compared with 30.1 percent of urban household heads. Education quality was poor, and literacy rates were low even among those who had gone to school. According to the 2008 Census, the literacy rate for the 60-64 age group was just 25.8 percent. Low literacy rates among older Liberians were not caused by the conflict and reflected longstanding deficiencies in the education system. However, literacy rates appear to be improving over time, and the literacy rate among the 15-29 age group was 73 percent. Page 8 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Rationale for Bank Involvement 17. The operation supported priority reforms included in the 2012-17 AfT and was closely aligned with the WBG’s Country Partnership Strategy (CPS).3 The principal objective of the CPS4 was to support the government’s efforts to implement AfT reforms designed to foster sustainable growth, poverty reduction, and shared prosperity, while addressing sources of fragility and building resilience. The operation focused on measures in three key areas: (i) governance and civil service reforms; (ii) economic transformation; (iii) human capital development. The operation was also consistent with the IMF’s ECF program, as well as the policy dialogue and technical assistance provided through projects financed by the United States Agency for International Development (USAID) and the Swedish International Development Agency (SIDA)5. USAID and SIDA provided a combined US$23.5 million in co-financing for the Liberia Integrated Public Financial Management Reform Project (IPFMRP), which was implemented by the World Bank and designed to improve public financial management (PFM) practices. These partners also co-financed the Public Sector Modernization Project (PSMP), which focused on improving payroll management and performance in the public sector. Later in the series, the World Bank played a critical role in providing financing in response to the Ebola crisis. The World Bank also supported the government’s fiscal adjustment efforts and helped lay the foundation for public-sector reform. Original Program Development Objective(s) (PDO) (as approved) 18. The original development objectives were (i) to sustain and deepen government-owned efforts to reform governance and civil service, and (ii) to support the broadening of reforms to include economic transformation and human development in the context of the implementation of the AfT. The reforms focused on: (i) increasing transparency and accountability; (ii) reforming the civil service; (iii) improving budget execution and oversight; (iv) strengthening land administration to reduce conflict and enhance the investment climate; and (v) building human capital through reforms in the education sector and (later in the series) the health sector. The original and revised indicators measuring PDO achievement are presented in Table 5. Original Policy Areas/Pillars Supported by the Program (as approved) 19. The program was organized around three pillars: (i) governance and civil service reform; (ii) economic transformation; and (iii) human capital development. Pillar 1: Governance and Civil Service Reforms 20. This pillar aimed at improving transparency and integrity in government operations; improving systems to enforce integrity, transparency and accountability in the management of public assess and reducing opportunity for corruption. Measures supported under the first DPO included: (i) adoption and implementation of the Anti-Money Laundering (AML) and the Countering the Financing of Terrorism (CFT) Law, accompanied by the establishment of a Financial Intelligence Unit (FIU) and Central Bank of Liberia (CBL) regulation aimed at ensuring that Financial Institutions 3 World Bank (2013). Country Partnership Strategy for the Republic of Liberia for the period FY13-FY17. July 1, 2013. Report No. 74618-LR. 4 The CPS was focused on: (i) reducing constraints to rapid, broad-based and sustained economic growth to create employment; (ii) increasing access to basic social services and reducing vulnerability; and (iii) improving public sector and natural resource governance. 5 USAID and SIDA provided US$ 23.5 million of co-financing for the Liberia Integrated public financial management Reform Project, which was implemented by the World Bank to improve Public Financial Management. These partners also contributed to a trust fund to support public sector modernization project. Page 9 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals comply with AML/CFT obligations; and (ii) strengthening the Liberia Anti-Corruption Commission (LACC), through the preparation of a 3-year strategy and making the Commission fully operational, and the issuance of regulation to facilitate the implementation of the legal framework for the Asset Disclosure system. 21. Civil Service pay reform was a major priority for improving public sector management. Measures supported under this reform area included: (i) preparation and adoption of a revised pay reform strategy merging allowances and base pay for civil service cadres; (ii) completion of the merging of allowances and base pay for civil servants at levels 1-4 (Technical and Support staff); and (iii) completion of the merging of allowances and base pay for civil servants for the remaining levels 5-10. Merging discretionary allowances with base pay would remove a major distortion in civil servants’ salaries. 22. In customs and tax administration, efficient revenue administration was critical to mobilizing domestic resources needed to finance priority investments for growth and social services. Measures supported in this area included: (i) roll-out of ASYCUDA to two additional ports of Bo-Waterside and Ganta, and (ii) submission to Parliament of a draft “Modernized Customs Code of Liberia (2017).” 23. PFM reforms were needed to improve the country’s credibility, effectiveness and efficiency in the management of public resources. Measures supported under this policy area included: (i) migration of the payroll processing to the Integration Financial Management System (IFMIS) solution; (ii) completion of the IFMIS and rolling it out to a total of 19 ministries; (iii) improvement of civil service payroll management by: (a) completing the validation of all civil servants through biometric authentication; and (b) linking the HRMIS to the payroll system; (iv) submission of International Public Sector Accounting Standards (IPSAS) based financial statements to the General Audit Commission (GAC) for audit from FY 2010 until 2015. This was to help establish a culture of accountability. 24. The series supported measures to improve the professionalism of and capacity in public procurement . Public procurement measures included: (i) Establishing, within its civil service, a career track for procurement specialists; (ii) Establishment by the PPCC of minimum standards and a procurement accreditation system to certify procurement practitioners; (iii) transfer of the Financial Management Training School to the University of Liberia to ensure sustainability of training for procurement officers; and (iv) a technical review of draft implementing regulations, adopted by the Board of Commissioners of the Public Procurement and Concession Commission. Pillar 2: Economic Transformation 25. Reforms under this pillar aimed at supporting the Government to close key infrastructure gaps, particularly in energy and transport as well as to address the issues of land tenure and access to credit, with the goal to transform the economy. The main avenue of economic transformation was through the development of the domestic private sector. The strategy was to use resources leveraged from FDI in mining and plantations; providing employment for a youthful population; investing in infrastructure for economic growth; addressing fiscal and monetary issues for macroeconomic stability; and improving agriculture and forestry to expand the economy for rural participation and food security. 26. Reforms in the energy sector supported policy and institutional measures to provide affordable electricity to industry, micro, small and medium enterprises (MSMEs) and households in urban areas and improve access to alternate generation methods elsewhere. Measures under the series supported the: (i) issuance of a Petroleum Import License to Liberia Electricity Corporation (LEC) to import Heavy Fuel Oil (HFO) to generate electricity for public service with its own generating plants; (ii) introduction of an open and competitive procurement process for the importation of HFO for LEC’s own generating plants; and (iii) signing of a management contract between the LEC and Energy Supply Board International (ESBI), a competitively selected firm, to enable ESBI to take over and improve the management of Page 10 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals LEC. These reforms also benefited from the World Bank investment support for the development of an HFO storage tank facility so that lower-cost HFO could replace high-cost diesel for running the thermal plants. 27. Policy and institutional reforms in agriculture, land tenure and access to credit were aimed at developing comprehensive national land tenure and land use system. These reforms would contribute to security of tenure and improve access to credit for the agricultural sector including for small farmers and rural MSMEs. Measures included: (i) adoption of a Policy Framework for Land Tenure Reform which clarifies land rights related to public land, government land, customary land and private land; (ii) operationalization of the Liberia Land Authority to improve land governance including land administration and management; and (iii) establishment of a collateral registry to inter alia, expand the range of assets that could be used as collateral with a view to improving credit and expanding the rural economy. Pillar 3: Human Capital Development 28. The education reform aimed at ensuring better access to basic education and a variety of post basic education and training opportunities to improve livelihoods. Measures included the: (i) adoption of a comprehensive, fully costed implementation plan for teacher recruitment, training and deployment across all levels of the education system; (ii) adoption of a framework for equitable resource allocation by region and pupil’s poverty status, particularly with respect to the school grant scheme. B. Significant Changes During Implementation Changes in the Macroeconomic Context for PRSDPO 2-4 29. The context for the second operation in the series, PRSDPO 2 (appraised in October 2014), was dominated by the Ebola crisis. Real GDP growth which was initially projected at 5.9 percent in 2014 was projected to decelerate to 2.5 percent at the time of appraisal. The Ebola outbreak not only brought about a sharp disruption of economic activities across all sectors but also heightened social and political tensions. The escalation of the epidemic after July 2014 impaired of the Government of Liberia’s (GoL) capacity to deliver basic services, particularly critical health services. The fiscal costs of the health and other interventions increased dramatically even while fiscal revenues were falling creating substantial financing gaps for the GoL. The amount of the original PRSDPO 2 (US$10 million credit equivalent) was increased by US$20 million equivalent, plus US$10 million equivalent from the IDA Crisis Response Window (CRW) to help mitigate the ongoing effects of the Ebola epidemic for a total of US$40 million. The actual economic outturn of 2014 was worse than anticipated (see Table 2), which warranted additional support from development partners, including a supplemental financing for PRSDPO 2. Table 2. Estimated Impact of the Twin Shocks on GDP Growth 2014 2015 2016 Initial Projection Revised Actual Initial Revised Actual Initial Revised Actual (June 2014) Projection Outturn Projection Projection Outturn Projection Projection Outturn (Dec 2016) Real GDP 5.9 2.5 0.7 6.8 0.3 0.0 2.5 -0.5 -1.6 growth Agriculture 3.5 1.3 -3.7 5.3 -1.1 0.7 1.9 6.4 6.4 and fisheries Forestry 2.0 2.0 2.2 6.5 2.0 2.0 2.0 -7.0 0.0 Mining and 4.4 -1.3 3.3 4.8 -17.0 -15.9 -11.5 -23.8 -33.0 panning Page 11 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Manufacturing 9.6 5.0 -0.7 10.1 6.1 -1.5 8.7 -4.9 -5.2 Services 8.1 4.0 2.3 7.7 5.0 4.3 5.4 3.9 2.1 Source: Liberian Authorities, World Bank and IMF Staff Estimates and Projections. 30. By the third operation, PRSDPO 3 (appraised in October 2016), Liberia’s economy, still weak from the adverse effects of the Ebola crisis, was further hit by severe exogenous shocks from the sustained slump in global commodity prices. The sharp drop and sustained low prices for rubber, iron ore and palm oil and the ensuing economic crisis exacerbated the already sharp economic downturn, with gross domestic product (GDP) contracting by 0.5 percent in 2016 compared to 2.5 growth projected earlier (Table 2). The withdrawal of the UNMIL, which began in June 2016, and the consequent reduction in official inflows had further adverse consequences for employment and fiscal revenues which also carried over into PRSDPO 4. Additional budgetary pressures resulted from the cost of the October 2017 presidential elections. This led to increased poverty and created uncertainty around the likelihood of accomplishing key objectives of the AfT, such as increasing per capita income and improving living standards for a large share of population. 31. The GoL responded to the exogenous shocks by Implementing strong corrective actions, supported by the IMF Extended Credit Facility (ECF) program. In December 2016, the IMF augmented the program and directed the installment of US$17.3 million to the Government budget, instead of reserves, as was normal practice. The IMF and the World Bank coordinated closely to provide this additional budget support, which was intended to fill the remaining anticipated financing gap in FY17 and to avoid unsustainable expenditure cuts. However, an unanticipated financing gap emerged in FY17 as downside risks, highlighted in the PRSDPO 3 PD, materialized. GDP contracted by 1.6 percent in 2016. Notwithstanding the government efforts, the fiscal gap remained, which was then closed by a supplemental financing to PRSDPO 3, provided in June 2017. 32. At the time of the fourth operation, PRSDPO 4 (appraised in November 2017), Liberia’s economy was showing signs of sluggish recovery amidst growing external and fiscal imbalances and significant uncertainty regarding political transition. Real GDP growth was 2.5 percent with expected strong performance of the mining sector (Table 3). Fiscal pressures arising from declining revenues and high non-discretionary expenditures (including wages), combined with the rapid depreciation of the Liberian dollar and double-digit inflation, constituted major challenges for the outgoing Government in 2017. The end of the series also coincided with the expiration of the AfT and uncertainties over the Presidential elections which took place in October 2017 with none of the candidates receiving the majority votes. The run-off, originally scheduled for November 7, 2017 was postponed by the courts as allegations of election irregularity were being investigated. A new run-off date was set for December 26, 2017, and a peaceful transition was expected. Political risk to the program had risen to “high” due to the uncertainty about the ownership of reforms by the new Administration. An incipient recovery then ensued during 2017-2018, but which proved to be tepid and short-lived. Liberia’s economy is projected to contract by 1.4 percent in 2019, owing principally to weak macroeconomic management and delayed policy responses to growing macroeconomic imbalances, stalled structural reforms, weak governance and low capacity (Table 3). Page 12 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Table 3. Selected Macroeconomic Indicators, 2016-2019* Indicator 2016 2017 2018 2019 Act Act. Est. Proj. Real GDP (% growth) -1.6 2.5 1.2 -1.4 Consumer prices (end of period, % change) 12.5 13.9 28.5 20.6 Current account balance incl. grants (% of GDP) -18.6 -23.4 -23.4 -21.1 Gross official reserves (US$ Millions) 453 376 333 280 (Percent of GDP, fiscal year) Revenues and Grants 33.3 31 25.9 28.2 Expenditures and net lending 36 35.8 30.8 34.3 Overall surplus / deficit (incl. grants) -2.7 -4.8 -4.9 -6.1 Public sector external debt 18.8 24.9 28.4 34.7 Source: Liberian Authorities, World Bank and IMF Staff Estimates and Projections. Note: Liberia’s GDP was re-scaled by the factor 1.6 in 2018. Revised Program Development Objectives (PDOs) 33. There was a revision to the PDO between operations 2 and 3, which was mainly to add a new reform area rather than to change the direction of the series’ existing reform areas. The change also incorporated more specifics of the series. • PDO for PRSDPO 1 and 2: to sustain and deepen government-owned efforts to reform governance and civil service, and to support the broadening of reforms to include economic transformation and human development in the context of the implementation of the Government’s second Poverty Reduction Strategy—the Agenda for Transformation. • PDO for PRSDPO 3 and 4: (i) strengthening governance with particular emphasis on transparency and accountability as well as budget execution and oversight; (ii) addressing key constraints to growth, including electricity; and (iii) improving human capital development particularly through improved access to education and health. Revised Policy Areas/Pillars supported by the Program 34. Several changes were made during implementation to the original policy areas to adapt to the changing country context. The three main pillars of the PRS DPO series remained the same during implementation, but there were changes in some of the policy areas. These changes were: (i) the dropping of measures aimed at improving road maintenance practices (transport services), while focusing on the energy sector reforms; (ii) dropping the roll out of ASYCUDA software to all ports and borders after reaching about 95 percent coverage (target) in terms of value of trade (replaced with submission of the new customs code; and (iii) inclusion of the health sector measures during the third and fourth operations in response to the Ebola crisis. Technical assistance from United Nations Conference on Trade and Page 13 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Development (UNCTAD) to roll out ASYCUDA to the remaining ports and borders was halted due to the Ebola outbreak because of the difficulty of keeping a technical expert in-country. The Government therefore ceased pursuing the policy of 100 percent coverage of all ports and borders with ASYCUDA. 35. The indicative trigger to roll out ASYCUDA to the remaining (seven) border points, was replaced with a prior action, PA 4 (DPO 4), the submission of the “Modernized Customs Code of Liberia” to the Legislature for enactment, which also promoted improved customs administration. The Modernized Customs Code of Liberia was submitted to the Legislature in June 2017, but it has not been approved under the previous administration. After some effort, the new administration re-submitted the code to the Legislature (April 2019). This effort was aided through the policy dialogue during preparation of the new Inclusive Growth DPO series (IGDPO-1, P168218), which also supported the promulgation of the law, that is the approval by the Legislature and the Senate, signing in Law by the President and publishing in handbills. It is expected to be approved by end-December 2019 and come into force in early 2020. 36. The health policy area aimed at improving health financing, which is considered a critical factor underlying the poor performance of the sector. Efficiency of spending in the health sector needed to improve as donor inflows to the sector dwindled after the surge of funding to contain the Ebola outbreak. Measures supported include: (i) a half-year budget execution review for FY2016 to improve the execution rate of the allocated budget; (ii) approval of the Joint Financial Management Assessment Costed Plan 2017 to improve efficiency in the use of domestic and external resources for the health sector. Other Changes 37. There was a delay in the disbursement of PRSDPO I, at the outset of the series due to the delay in the ratification of IDA credit by the Legislature. This delay led to an extension of the implementation period for the programmatic series by one year, from 2017 to 2018. Further details are provided below. 38. There were two DPO supplementary financings and co-financing from the Norwegian Government, under the Liberia Forest Landscape Single Donor Trust Fund. The supplementary financing was necessitated by the Ebola crisis and other shocks, which are discussed in the context of PRSDPO 2-3. II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES 39. Table 4 provides an overview of the entire series including all of the individual DPOs and financing. Out of total US$126.4 million, US$14.04 million were financed from trust funds, including US$5 million from the Ebola Recovery and Reconstruction Trust Fund and $9.04 million from Liberia Forest Landscape Single Donor Trust Fund.6 Total IDA financing was All commitments were fully disbursed. Actual disbursed amount was slightly less than committed amount because of exchange rate changes (US$125,220,500 disbursed versus US$126,336,500). 6 The Single Donor for the Trust Fund is the Kingdom of Norway. Page 14 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Table 4. PRS DPO 1-4 and Supplemental Financing—Basic Information Approval by Board of Fully Disbursed Amount US$ Credit/Grant/ TF P# Name Directors by Amount SDR Equivalent Information LR-Poverty Reduction Strategy 26-Jun-13 IDA Credit No. Credit I 1 P127317 22-May-14 6,700,000 10,000,000 52770 IDA Credit No. Poverty Reduction Support Credit 12-Nov-14 20-May-15 13,500,000 20,000,000 55500 II IDA Grant No. 2 P146619 7-Jan-15 6,800,000 10,000,000 H9990 Supplemental Financing for Second Poverty Reduction 22-Jan-16 3 P156826 Support DPO II 5-Apr-16 - 5,000,000 RETF No. A1815 Poverty Reduction Support Credit IDA Grant No. 17-Nov-16 4 P151502 III 8-Dec-16 28,700,000 40,000,000 D1420 IDA Grant No. 29-Jun-17 4,800,000 6,800,000 D2170 Liberia PRSDPOIII Supplemental 26-Jun-17 IDA Credit No. 29-Jun-17 4,100,000 5,500,000 61160 5 P163164 29-Jun-17 - 4,366,500 RETF No. A4949 Liberia Fourth Poverty Reduction Support Development Policy 24-Jan-18 22-Mar-18 14,200,000 20,000,000 IDA Grant No.D2710 6 P162111 Operation 22-Mar-18 - 4,670,000 RETF No. A6378 TOTAL FINANCING 126,336,500.00 A. Relevance of Prior Actions Relevance of Actions to PDO 1: Strengthening governance with particular emphasis on transparency and accountability as well as budget execution and oversight. Accountability and Transparency 40. The prior actions (PAs) focused on transparency and accountability of public institutions, with the aim of reducing corruption, which was critical in Liberia’s post-conflict context. The PAs appropriately were aimed at strengthening governance institutions such as the FIU and the LACC. The operationalization of the Asset Declaration Unit of LACC was intended to discourage public officials from amassing wealth through corrupt practices. LACC was also expected to adopt policies and regulations to sanction public officials for corruption, misuse and abuse of public office as and when in the General Auditing Commission indicated so in their reports. The FIU was to pursue anti-money laundering policies and help Liberia become a member in good standing at the international organizations of financial intelligence units – the Egmont Group. These measures were important for ensuring that Liberia become a reputable member of the global payment system and increase its ability to attract reliable capital flows in the medium term. Page 15 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Civil Service reforms 41. The PAs focused on rationalizing the civil service pay scale and to streamlining human resource management policies within the Civil Service. To do this, the PAs supported the compilation and consolidation of data on the base pay and allowances for all Civil servants. At the beginning of the DPO series, the full extent of distortions in the civil service pay scales could not be ascertained because payroll information was held by different Ministries and Agencies. The PAs were necessary to ensure availability of a comprehensive and detailed database of civil service payroll, which then enabled policymakers to rationalize pay scales, which would contribute to transparency and accountability and greater equity. Customs and Administration 42. To improve governance in customs administration the series supported measures to ensure that revenues are effectively collected. At the preparatory stage of the series, ASYCUDA was successfully rolled out to 10 of 17 border points, including Robert International Airport, Ministry of Land, Mines and Energy, and the Buchanan port. This was aimed at reducing the processing time for customs clearance and enabling effective collection of trade and customs data. To build on these improvements, the program supported the roll-out of ASYCUDA to two additional ports of Bo-Waterside and Ganta, with the intent of covering the remaining seven border points. This was a trigger that was revised to support the submission to the Parliament of the “Modernized Customs Code of Liberia,” which increased the relevance of the program to achieving improved governance because it provided a more comprehensive framework for customs administration. Public Financial Management Systems 43. The PFM actions were essential to improved budget execution and oversight, and therefore transparency and accountability. Effective reforms would have to deal with the MFDP’s and line ministries’ inability to produce timely annual financial statements, and the lack of capacity to review and act on audit reports that were presented to the legislature. The program, thus, supported the migration of the civil service payroll to the IFMIS, validation of civil service employees using biometric and reduction of the time taken to prepare IPSAS -based annual financial statements, for onward submission to the GAC. Implementation of these actions was essential to strengthening the transparency and accountability in the use of public resources. Procurement Practices 44. The program pursued transparency and accountability through measures to strengthen the procurement capacity within the civil service and to strengthen the regulatory environment for procurement. The key measures were to expand procurement training and establish a career track for procurement practitioners in the civil service. These measures were prerequisites for improved governance as the prolonged civil war caused severe erosion of procurement policies and practices as well as the skills of practitioners and institutions. Page 16 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Relevance of Actions to PDO 2: Addressing key constraints to growth, including electricity Infrastructure: Energy 45. The PAs addressed management of the electricity sector, which was a critical constraint to growth. The program focused on three priorities in the sector: (i) the need to improve the operational efficiency of Liberia Electricity Corporation (LEC), which was addressed by signing a management services contract (MSC) with a foreign company; (ii) using competitive procurement of HFO fuel for thermal plants to reduce costs of operations; and (iii) supporting the pass through of the efficiency improvements to the consumers through lower tariffs. In 2018, a competitively selected firm took over the management of LEC, for a 3-year term to help introduce professional management at LEC. Land Tenure Reforms 46. The PAs were relevant to addressing a key development constraint related to land reform . Liberia’s weak land-tenure system was a major contributor to instability and conflict. The series supported the approval of a Policy Framework for Land Tenure Reform aimed at clarifying land rights related to public land, government land, customary land and private land, submission to the Legislature the draft Land Rights Act, approval of the Land Authority Act and establishment of Liberia Land Authority to improve land governance and land administration. Agriculture Credit 47. The agriculture PAs were directly linked to the PDOs but could have been stronger in helping to achieve the PDOs. Under PA9 (PRSDPO 2), GoL established a collateral registry with a view to improving credit, including to small farmers and rural MSMEs to help expand the rural economy. The establishment of the collateral registry is however only one of the measures needed to improve credit to the agriculture sector. While other risk factors such as land tenure have been addressed in the program, the gestation period of farming and the non-accessibility to guaranteed markets continue to cause commercial banks to be less attracted to financing agricultural activities than non-agricultural activities. Relevance of Actions to PDO 3: Improving human capital development particularly through improved access to education and health Increased Access to Education 48. The program was relevant to improving human capital development through several measures promoting access to education. To improve access to education it was necessary to focus on the lack of teachers, particularly in rural areas, which the program addressed through support to a comprehensive and fully costed implementation plan for teacher recruitment, training and deployment across all levels, with the view to improving incentives for school attendance. To address both access and equity, the program also supported the Ministry of Education’s adoption of a framework for equitable resource allocation by region and pupil’s poverty status, particularly with respect to the school grant scheme. These measures were relevant to improving school enrollment and quality of education, and therefore improving human capital. Page 17 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Improved Budget Execution in the Health Sector 49. To improve the health sector’s contribution to human capital development, it was critical to make sure that budget resources were fully and efficiently utilized. The program responded to the under-execution of the health sector capital budget of which only about 75 percent was spent. The measures were relevant and included a half -year budget execution review for FY2016 and the Ministry of Health’s approval of the Joint Financial Management Costed Plan (2017) to improve efficiency in the use of domestic and external resources for the health sector. 50. Most of the prior actions were relevant to achieving the program development objectives warranting a satisfactory rating for relevance. The actions were also relevant to the development strategy of Government, a key factor in securing government ownership. The design of the prior actions was also informed by the relevant analytical work done by the World Bank, other development partners, such as USAID and Transparency International, and the Government. The Public Expenditure Reviews (PER) for 20127 and 20138 and 2016 Public Expenditure and Financial Accountability (PEFA) assessment were of particular value in supporting prior actions in transparency and accountability and in human capital development. For reference, Annex 6 contains all prior actions and triggers of the series. Annex 7 contains a summary of analytical work relevant to the series. An ex-post assessment of the relevance of program actions for each PDO is presented below. Rating: Satisfactory B. Achievement of Objectives (Efficacy) Results Indicators 51. The overall quality of the results framework in measuring the effects of the prior actions and the achievement of the PDOs was good and the indicators were relatively stable and resilient throughout the four operations despite the changing development context. Relevance of RIs 52. The RIs were generally relevant to the prior actions and the PDOs, with a couple of exceptions, and were adequate for the PDO assessment. The transparency and accountability indicators provided a good connection between the prior actions and the PDO. The indicators measured the expected results of each the prior actions in the pillar 1 reform area. There were a few indicators that while not fully attributable to the actions were at least partially attributable. These include the number of electricity connections and enrollment rates for primary and secondary school children. In the case of enrollment, it was partially attributable to the program’s support to teacher recruitment in rural areas, but school enrollment is also dependent on other factors such as school funding, school feeding, etc. Electricity connections should rise because generation capacity was increasing by several fold as part of the sector plan, but electricity connections were also driven by technical factors, metering and other investments, as well as household income and therefore ability to pay. For health, the measure of capital 7World Bank (2012). Liberia Public Expenditure Review. Human Development. November 2012. Report No. 70980-LR. 8World Bank (2013). Liberia Agricultural Sector Public Expenditure Review. January 2013; Liberia Public Expenditure Review. Options for Fiscal Space Enlargement. May 2013. Report No. 75049-LR. Page 18 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals and recurrent budget utilization was highly relevant as it is necessary to use all available budget for the health sector which needs substantial strengthening. Measurability of RIs 53. The RIs were selected to be measurable and trackable throughout the implementation of the series. The indicators were selected in part because they were already routinely collected through normal government operations. Indicator selection avoided the need for special surveys or other major data collection efforts and data were readily available for the ICR. Appropriateness of Targets 54. Targets were generally appropriate and were adjusted as needed throughout the series, but with a few shortcomings. Generally, targets were revised upward because of faster than expected progress in achieving results. This was true for example for currency transaction reports (CTRs) from the FIU, the roll-out of IFMIS to ministries, departments and agencies (MDAs), several electricity indicators and the number of trained procurement specialists. There was one instance in which the target, number of CTRs, was underestimated and was revised from 50 to 100,000. The original target clearly did not reflect the potential progress in this transparency measure, but it was revised upwards once the initial actual volume of CTRs were recorded and the potential became clear. 55. There were a number of changes to the results indicators (see Table 5) that maintained and improved appropriateness and relevance of targets. The results framework covered 23 distinct indicators and was stable notwithstanding the long-time span of four operations across six years. Only two indicators were dropped, and two new indicators were added, both in the health sector, which is to be expected since it was a new reform area added during PRSDPO 3). The land deeds indicator was substantially revised to provide a more accurate measure of the progress in the land reform area. Details of these changes are provided in Table 5. Table 5: Original Results Indicators, Revisions and Actuals from PRSDPO 1 and PRSDPO 4 Approved Results Indicators for the Results Indicators at PRSDPO 4 Reason for Change and PRSDPO1 Final Indicator Value Pillar 1: Governance and Civil Service Reform Number of currency transaction reports Number of currency transaction reports No change. Target revised (CTRs) and Suspicious Transaction reports (CTRs) and Suspicious Transaction reports upward to reflect actual (STRs) issued by the FIU Target: >50 (CTR); > (STRs) issued by the FIU Revised: >100,000 number of transactions. 10 (STR) (CTR); > 100 (STR) CTR-446,015-Exceeded STR-68-Partially achieved Senior Civil servants (Directors and above) Senior Civil servants (Directors and above) No change providing complete asset statement to LACC providing complete asset statement to (%): Baseline: 56%; Target: 75% LACC (%) Baseline: 56%; Target: 75% 75%-Achieved Civil servants in grades 1-10 paid according to Civil servants in grades 1-10 paid according No change new pay structure. Baseline: 0%; Target: to new pay structure. Baseline: 0%; Target: 100% 100% 4.2%-Not achieved (a) Share of ports where ASYCUDA is (a) Share of ports where ASYCUDA is No change. Targets revised operational (b) Share of total customs operational (b) Share of total customs downward as necessary revenue captured by ports where ASYCUDA is revenue captured by ports where ASYCUDA funds for needed operational Target: (a) Baseline: 41%; target: is operational (a) Baseline: 41%; Rev. infrastructure were not 100%; (b) Baseline 90%; Target: 100% available. a) 50%, b) 93% Page 19 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals target: 55%; (b) Baseline: 90%; Rev. target: both mostly achieved 95% Civil servants paid through IFMIS solution Civil servants paid through IFMIS solution No change Baseline: 0%; Target 100% Baseline: 0%; Target 100% 60%-Partially achieved Ministries and Agencies in which IFMIS is Ministries and Agencies in which IFMIS is No change. Target revised installed and operational Baseline: 7 (MFDP installed and operational Baseline: 7 (MFDP upward as progress was and 6 others); Target: 20 or more (MFDP and and 6 others); Rev. target: 50 or more ahead of expectations. all M&As) (MFDP and all M&As) 50-Achieved Timeliness of submission of annual financial Submission of annual financial statements No change. Target revised statements to GAC (Months since the end of to GAC (Months since the end of the fiscal to reflect PFM law that the fiscal year) year) Revised: < 4 months allows 1 mo. For prep. plus Target: Within 3 months of the end of FY 3 mos., thus, 4 mos.- Achieved Number of trained and certified procurement Number of trained and certified No change. Target revised specialists appointed in the civil service procurement specialists appointed in the upward due to faster than Baseline: none; Target: 100 civil service Baseline: none; Rev. target: 120 expected progress. 172-Exceeded Implementation progress on Road Map of Indicator dropped as Reform of the PPCC (# of milestones met) underlying trigger for Baseline: None; Target: TBD PRSDPO 3 was dropped Publication of annual Compliance Monitoring Publication of annual Compliance No change Report (CMR) by PPCC Baseline: N; Target: Y Monitoring Report (CMR) by PPCC Baseline: N; Target: Y No-Not achieved Pillar 2: Economic Transformation (a) cost of electricity to end users in kWhs; (b) (a) cost of electricity to end users in kWhs; No change. Target (b) Urban access to electricity; (c) % of electricity (b) Urban access to electricity; (c) % of revised upward because of produced from high cost diesel Targets: (a) electricity produced from high cost diesel rapid progress. $0.40; (b) 50,000; (c) <20% Revised: (a) <$0.40; (b) 60,000; (c ) <20% a) $0.35-Achieved b) 54,075-Partially achieved c) <20%-Achieved Kms of roads maintained or rehabilitated Dropped as underlying trigger was dropped Land parcels with use and ownership rights # of legacy deeds and new deeds digitized Indicator revised to more recorded under new policy Baselines: 0 and 0; Targets: 50,000 and closely match prior action 10,000 63,219-Achieved 11,361-Achieved Share of commercial bank credit to the Share of commercial bank credit to the No change agriculture sector Baseline: 3.7%; Target: agriculture sector Baseline: 3.7%; Target: 4.8 percent-Target partially 5.5% 5.5% achieved Pillar 3: Human Capital Development Primary, junior secondary and senior Primary, junior secondary and senior No change secondary net enrollment rates Baselines: secondary net enrollment rates Baselines: Prim. Male 48%; Female primary male 31.6%, female 33.3%, JS 7.1%, primary male 31.6%, female 33.3%, JS 48% -Exceeded SS 5.4%; Targets: male 45%, female 45%, JS 7.1%, SS 5.4%; Targets: male 45%, female Jr. Sec. 24%-Exceeded 20%, SS 15.4% 45%, JS 20%, SS 15.4% Sr. Sec-10%-Partially achieved (a) Health budget execution rate (current); New indicators required for Baseline: 96%; Target: >96% adding new policy area. Page 20 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals (b) Health budget execution rate (capital) Recurrent-95.4% (FY17/18)- Baseline: 74.9%; Target: >74.9% Mostly achieved (b) – 92,1% - Exceeded Overall achievement of the PDOs was moderately satisfactory PDO 1: Strengthening governance with particular emphasis on transparency and accountability as well as budget execution and oversight—Moderately Satisfactory Achievement 56. The program made good progress toward greater transparency and accountability, though it fell somewhat short of several results targets. Of the 11 results indicators for this PDO, five were achieved or exceeded, five partially/mostly achieved, and two were not achieved. Achievement was particularly strong with respect to the installation of IFMIS in 7 ministries and 43 agencies, which will improve accountability of government operations. Though the impact is yet to be measured, the installation of IFMIS along with the use of biometric identification makes it possible to reduce the number of ghost workers within the public sector and better control the wage bill. The target for asset declaration of 75 percent was met for director level and above, which improves transparency of potential conflicts of interest. ASYCUDA was expanded and now 93 percent of revenue is captured under that system (though slightly below target). The gains in ASYCUDA coverage were mostly achieved and would have been greater except for the delays caused by the Ebola crisis and the lack of available budget to finance some of the needed infrastructure to support the ASYCUDA roll-out to border points. The achievement of establishing the new customs code more than compensated for this minor shortfall. The subsequent operations in the new DPO series and accompanying TA will support the implementation of the Law. The implementation of the two PAs combined is expected to strengthen tax and customs administration, which will improve transparency and accountability of border transactions. 57. The deficit in procurement expertise was substantially reduced with 172 newly trained procurement specialists (exceeding the target of 120 specialists), who were deployed in several MDAs. This accomplishment is expected to help reduce the excessive amount of sole sourcing of procurements, which not only improves transparency, but also enhances equity and ensures better value for government resources. One shortcoming was that only minor progress was made in the share of civil servants paid under the new payroll system that merges salary and allowances (which are not standardized). Only 4.2 percent out of a target of 100 percent was achieved, which means that the problem of politically determined allowances continues even at the lower levels of the civil service. Another shortcoming was the fact that the Compliance Monitoring Report by PPCC has not been published as a public record of compliance, and, thus, the expected result was not achieved. PDO 2: Address key constraints to growth, including electricity-Satisfactory Achievement 58. Constraints to growth were substantially eased through electricity, land and agricultural credit reforms. Of the six indicators related to this PDO, four were achieved and two partially achieved. With extremely low generation capacity of only 22 MW of mostly diesel-based energy, electricity supply was a major constraint to growth. The reforms to transition from expensive diesel to HFO were important to reducing cost to consumers. This was achieved as cost per kWh was reduced to $0.359(below the target of $0.40). In addition, under Liberia’s least cost energy plan, capacity was 9 Net of tax. $38.5 with tax. Page 21 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals substantially increased,10 which would mean that increased connections were both possible and necessary for economic viability. One of the sources of increased capacity was the Mt. Coffee hydro power facility (60MW), which also had substantial climate benefits through avoidance of carbon emissions. Substantial progress was made in connections, but the target that had been revised upward from 50,000 to 60,000 connections proved to be too ambitious and was missed (54,015 actual, which exceeds the original target) and thus partially achieved. Further improvements and per kWh cost reductions are expected with improved management of LEC with the help of the competitively awarded management contract with ESBI. 59. Land reform, including the digitization of deeds and expansion of agricultural credit also made progress, though the latter fell somewhat short of target. Land reform was a necessary measure to ensure that land title was clear and that land owners would therefore have increased incentives for productive use of that land, thus addressing a constraint to growth. The series supported the establishment of a legal framework that recognizes both statutory and customary land ownership. The series had a PA in PRSDPO 1 and an action in PRSDPO 4 to make the Liberia Land Authority operational. The time lag was necessary to allow for the development and passage of the law before establishing the implementing authority. The results targets were achieved with 11,361 new deeds and 63,219 legacy deeds digitized (against respective targets of 10,000 and 50,000), which is evidence that the new system is working and that formalization of land ownership, a prerequisite for growth, has advanced. The program also supported the establishment of a collateral registry aimed at improving the availability of agricultural credit. Progress toward this target was more modest, thus far, with agricultural credit accounting for 4.8 percent of commercial bank credit (against a baseline of 3.7 percent and a target of 5.5 percent—thus, partial achievement). The Land Rights Act was finally promulgated in October 2018, a major reform of the new administration. The impact of the law also depends on the quality of the judiciary system and the resolution of existing land conflicts, which could undermine the benefits. PDO 3: Improve human capital development particularly through improved access to education and health—Moderately Satisfactory Achievement 60. Progress was made on education through measures to increase teacher recruitment and to improve incentives for school attendance. Of the three education results indicators two were exceeded and one partially achieved. The measures included an implementation plan to recruit, train and deploy teachers at all levels and provide incentives so that they would show up at to their jobs (PRSDPO 2). In addition, under the program (PRSDPO 3), the MoE adopted a framework for equitable resource allocation by region taking into account poverty profiles. The results indicators targets were met at primary, junior secondary levels at 48 percent and 24 percent, respectively, with males and females achieving rough parity. Achievement was 10 percent for senior secondary compared with a target of 15.4 percent. Because there are a variety of other factors that affect school enrollment, attribution is only partial. Attribution to PDO achievement would be strengthened if actual underlying data showed 10 The Bank was financing an additional 30 MW of power, JICA 38 MW and Mt. Coffee hydro with a capacity of 60 MW. Combined these investments increased generation capacity from 22 MW to 140 MW, thus significantly alleviating the lack of electricity supply as a constraint to growth. Page 22 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals that teacher attendance improved, that incentives were provided, and education funding allocations were made more equitable. 61. The program made progress toward human capital development through measures that ensured higher budget execution rates in the health sector. Of the two results indicators, one was exceeded, and one mostly achieved. In FY16 there was a large influx of funds because of the Ebola crisis,11 but absorption was low. So, it was important for improved human capital development to increase the utilization of budget. The PAs targeted improvements in the recurrent and capital budget execution rates, >96 percent and >74.9 percent, respectively (both targets were at least equal to the 2012 baseline). The recurrent execution rate was 95.4 percent for FY2017/18, thus, nearly achieving the target, while the execution rate for the capital budget improved to 92.1 percent, thus, exceeding the target. The report “Absorptive Capacity of funds at Ministry of Health” (May 5, 2016) provided guidance for improving budget execution. By PRSDPO 4 the Joint Financial Management Assessment Costed Plan (2017) was approved to improve the efficiency of domestic and external resource use. One important advance is that now there is use of analytical tools, which improve proposals to better implement the budget. Table 6: Results Indicator Target Achievement by PDO Partially/ Not PDO Exceeded Achieved Mostly Achieved Total Achieved Strengthen governance- 2 3 4 2 11 transparency and accountability as well as budget execution and oversight Address key constraints to growth, 4 2 6 including electricity; improve human capital 3 2 5 development through improved access to education and health Total 5 7 8 2 22 Rating: Moderately Satisfactory The efficacy rating is moderately satisfactory as the program mostly achieved the objectives with PDO 1 and 3 rated moderately satisfactory for achievement, and PDO 2 rated satisfactory. C. Overall Outcome Rating and Justification 11There was a pool of funds from donors in Health (Norway, DEIT, WB no), which was paying for some recurrent costs (salaries/incentives of select staff). This pool is now closed. Page 23 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Rating: Moderately Satisfactory 62. Relevance is rated satisfactory, and efficacy is rated moderately satisfactory and therefore the overall outcome rating is moderately satisfactory. III. OTHER OUTCOMES AND IMPACTS A. Poverty, Gender and Social Impacts 63. While the program likely had a positive impact on poverty, overall poverty is estimated to have increased during the implementation of PRSDPO 1-4, largely due to declining economic growth and exposure to serious exogenous shocks. According to the 2014 and 2016 Household Income and Expenditure Surveys (HIES) the percentage of Liberians living in poverty increased from 54.1 to 61.2 percent. The Ebola crisis, the sharp decline in global commodity prices and the negative impact of the UNMIL withdrawal from Liberia had a negative impact on employment, prices, and food security, particularly in the urban centers.12 Employment in the formal sector also suffered following the closure or downsizing of key concession companies in iron ore and rubber sectors. The series partially offset these negative effects by achieving increased access to cheaper electricity, improved access to education and improved budget execution in the health sector. These achievements all have positive poverty effects. B. Environmental, Forests, and Natural Resource Aspects 64. The reforms implemented under the program were largely focused on governance, economic transformation, and human capital development and therefore did not have any significant negative impact on the environment. In cases where there were direct links between policy reforms and the environment (including forest and natural resources), the potential impacts were expected to be mostly positive. For example, land tenure reforms promoted secure tenure which provided incentives for sustainable use of land and related resources. Similarly, analysis of the energy sector reforms showed greater efficiency and the lower cost of electricity would lead to less reliance on charcoal with positive effects on the environment by reducing the rate of deforestation. 65. The proposed use of HFO required the implementation of a mitigation plan, namely, an oil spill response plan (OSRP). The OSRP was developed under the Liberia Accelerated Electricity Expansion Project, a World Bank-financed project currently under implementation. So far, there have not been any oil spills. The DPO series did not identify any gaps in the system for managing environmental impacts associated with the program. C. Institutional Change/Strengthening 66. Given the fragility context of Liberia, the Bank recognized the need to mainstream capacity building and institutional strengthening into the design and implementation of the program. In order 12The interim Assessment of the Impact of Ebola Outbreak in Liberia was based on a Cell Phone Survey, which conducted by the World Bank in 2015. Page 24 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals to improve governance, the operation identified four key institutions that needed strengthening, through capacity building support, further regulations and the enactment of new laws. These institutions were: (i) LACC, (ii) GAC, (iii) the Civil Service Agency (CSA), and (iv) the FIU. The latter was set up by law as a prior action under PRSDPO 1. The governance of the institutions was strengthened through agreed PAs, for example, LACC’s issuance of regulations to facilitate civil servant’s declaration of their assets to promote integrity in the civil service (PA2, PRSDPO 4). FIU also issued regulations, which facilitated the monitoring of illicit flows and corruption. 67. Other areas where there have been significant changes in terms of capacity building and institutional strengthening were in the areas of public financial management and energy sector. For example, the delay in completing the annual financial reports was reduced during the program from 12 months to 4 months, thus allowing GAC to conduct timely audits of public sector entities.13 Second, the training of financial management and procurement professionals has built capacity in the use of public funds. Third, the capacity of the energy sector has also been enhanced. For example, the succession planning strategy under the management contract agreement for LEC is aimed at ensuring that Liberians are ultimately trained to take over the management of the state company. 68. Despite significant progress in institutional strengthening and capacity building in the public sector, there are still major challenges ahead. Institutions in Liberia remain weak due the fragile environment, under-funding and political interference. While governance institutions have contributed to raising awareness about the breaches against the law, they have not been able to ensure compliance. For example, the findings of the Auditor General reports and LACC are often presented to the Public Accounts Committee and the executive, but recommendations are often not implemented. Budgetary allocations are often inadequate and disbursed in arrears, thus making the work of these entities difficult. D. Other Unintended Outcomes and Impacts 69. The civil service reforms originally focused on removing the distortions in the civil service pay structure due to the increased use of discretionary allowances in hiring and paying civil service personnel, but the reforms were subsequently expanded to cover the entire public sector. The Government has extended the civil service pay reforms to cover the entire public sector of about 103 entities compared to 29 entities in the civil service. This became necessary due the negative fiscal impact of the rising public sector wage bill. By end FY2019, the wage bill accounted more than 70 percent of domestic revenue compared to less than 40 percent in 2012. Government is now interested in rationalizing and centralizing the management of the wages and salaries of all public sector entities that depend on the national budget to create the needed fiscal space for more spending on social sectors and capital projects. 13The ICR notes, however, that delays have re-emerged in the provision of these reports, which the Bank is addressing through the country dialogue. Page 25 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals IV. BANK PERFORMANCE 70. The World Bank helped design a successful program, drawing on the lessons from previous series and throughout the PRSDPO 1-4 series, as well as lessons from DPOs in other countries. One of the more important lessons was that the policy reforms should reflect the Government’s own reform agenda especially because it would provide the best guarantee of government ownership and commitment that was achieved with the program’s alignment with the AfT. It was clear that support for actions that would improve accountability and transparency were top priorities from which other successes could flow. Second, the World Bank also recognized that the program design should focus on a few carefully selected prior actions that, in Liberia’s post-conflict environment of limited capacity, were essential for keeping the reform program on track. This was reflected in having a small number of prior actions, only five, at the outset (PRSDPO 1), with the flexibility to increase the number of actions as the program made steady progress and capacity increased. 71. The Bank’s initial risk assessment stated that the “proposed operation will be faced with moderate country and fiduciary risks,” but, in retrospect, should have been rated substantial. The team assessed a number of risks to the development outcome: (i) Security risks-the security situation remained fragile but largely stable; (ii) Political risks-the challenges included money laundering, corruption, natural resource governance, and the legal framework for land tenure; (iii) Macroeconomic risks-this included the heavy dependence on primary commodities for exports and the dependence on imported fuel and food; (iv) Fiduciary Risks-the weak financial management systems presented opportunities for corruption and diversion of resources, (v) Natural Disaster Risks – vulnerability to climatic change in the coastal areas of Liberia and (vi) Implementation Risk-due to slow progress in enhancing the capacity of the state, except for public financial management and procurement. While the Ebola crisis could not have been foreseen, as well as commodity price fluctuations, the overall fragility of the country and other risks supported a substantial rating for the overall risk. 72. The mitigation plan was nevertheless appropriate. UNMIL maintained a presence in the country which helped with security risks and the unanticipated Ebola crisis. The IMF ECF helped mitigate macroeconomic risks. Other World Bank financed projects, Integrated Public Financial Management Reform Project (IPFMRP, P156384) and IPFMRP II (P163243) supported an IFMIS roll-out which eased fiduciary risks. The National Disaster Relief Commission had been strengthened to deal with natural disasters. The provision of TA in key areas, by the World Bank and other development partners helped mitigate implementation risks. 73. The World Bank performed well in helping the Government sustain reforms during the Ebola crisis, which started in 2014. This unanticipated crisis led to the preparation of supplemental financing and additional financing from the Norwegian Trust Fund.14 Total supplemental financing of US$5 million and US$16.7 million were disbursed after PRSDPO 2 and 3, respectively. The Government also received additional financing from the Norwegian Trust Fund, which disbursed US$4.67 million alongside the PRSDPO 3 supplemental financing and the PRSDPO 4 operations, respectively. The World Bank also 14The Norwegian Trust Fund was referred to as the Liberia Forest Landscape Single Donor Trust Fund, the Program Document. Page 26 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals maintained its support for the promulgation of the Customs Code and expended considerable effort to bring this important reform to the attention of the new administration for ultimate passage. 74. The World Bank made good use of technical assistance and complementary investment projects to help boost program implementation. The series reflected this important lesson through ongoing support in areas related to the reforms, such as the EGIRP (P107248, effective June, 2008 and closed June 2015), the Integrated Public Financial Management Reform Project (IPFMRP, P127319, effective September 2012), the Land Sector Reforms Project (P117010, effective October 2009)) and the IMF through the five-year arrangement under the ECF. This support not only helped build capacity, but also encouraged commitment to reform as the actual implementers received the necessary technical and financial assistance. 75. While the World Bank would have benefited from a fuller grasp of the parliamentary challenges that could delay operations, it was eventually able to resolve the initial delay of the PRSDPO 1. There was an 11-month delay between Board Approval and disbursement of PRSDPO 1. The delay centered on the concern that the operation and indeed the series was a credit and not a grant as was the previous series. With significant concerns about adding to Liberia’s debt, following the successful completion of the debt buyback operation in 2010 (supported by the World Bank), the Parliament delayed for a long time in ratifying the operation. While the World Bank had a good policy dialogue, there was mis communication between the government technocrats who negotiated the series and parliamentarians. The World Bank helped resolve this issue with by supporting a visit by the Liberian members of Parliament to observe a credit ratification process in a neighboring country and the operation was subsequently ratified. Rating: Moderately Satisfactory 76. The overall rating of Bank performance is moderately satisfactory. V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES 77. The risk to development outcomes increased during the implementation of the programmatic series, mainly because of exogenous factors, and some of these risks continue. The higher risk was because of shocks such as the Ebola outbreak, the sharp drop in global commodity prices, and the heightened political risks preceding the presidential elections in 2017. By the fourth operation, the overall risk rating for the operation was changed from moderate to substantial. The assessment of political and governance risks, macroeconomic risk and fiduciary risk were revised from moderate to high. The macroeconomic risk remained high because of the over reliance on rubber and iron ore exports and continued low prices. Efforts to maintain the share of the wage bill to domestic revenue, at 40 percent or less was not successful. Wage reforms in the context of the wider public sector reform required enormous political will, given pressure to provide jobs for the youth. Another concern is that the submission of financial reports to the GAC is once again experiencing delays. The World Bank is working with the government to address this issue. Finally, electricity sector reforms faced significant challenges as the revenue losses increased. Failure to fully implement electricity sector reforms not only Page 27 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals affected the potential for leveraging the sector for economic transformation but also undermined efforts at maintaining macroeconomic stability. 78. The main risks are expected to be mitigated, at least in part, with the Government’s agreement to a new IMF program beginning in 2019 and with participation in several related World Bank financed projects. The IMF program is likely to help maintain the implementation of reforms aimed at restoring macroeconomic stability, providing a foundation for sustainable growth, and addressing weaknesses in governance. Two World Bank Investment projects, the Second Public Sector Modernization Project (PSMP 2, P143064, effective April 2014) and the Integrated Public Financial Management Reform Project (IPFMRP 2, P127319, effective September 2012), are expected to mitigate some risks to development by providing support to strengthen the economic governance reforms including civil servant pay reform, domestic resource mobilization and integration of financial flows among key Government agencies. Support from the existing Smaller Agriculture Transformation and Agribusiness Revitalization Project (STAR-P, P160945, effective June 2019) supports economic diversification and stronger growth over the medium term. On balance, the risk to development outcomes is likely to remain substantial over the medium term. VI. LESSONS AND NEXT PHASE A. Lessons Learned 79. The PRSDPO 1-4 confirmed general good practice lessons: build on the Government’s own program (AfT) and support reforms that are already buttressed by political consensus; emphasize technical assistance to complement legal and regulatory improvements and overcome capacity constraints that could affect the sustainability of reforms; selectively focus on a few objectives which have the greatest impact; be flexible to adjust the program to changing government priorities and constraints, but without compromising the program development objectives and timeliness of delivery. In addition, there are four specific lessons from the program. 80. Lesson 1: Good fiduciary practices require sustained repetitive measures to become ingrained in government operations. This approach proved initially successful in achieving timely submission of financial reports to GAC for audit as part of the process towards the legislature performing its oversight role. This was an action that was repeated three times for PRSDPO 1, 2 and 3 and met the target of four months for timely submission of the IPSAS-based financial statements. However, after the operation, delays in report submission have recurred, underscoring the need for continued effort to institute the practice of timely submission of reports. 81. Lesson 2: Good communication with all stakeholders (government, legislature, civil society) from the start is needed to avoid preparation and implementation delays. Even when there is a solid country dialogue, there may still be cases where misunderstandings can lead to a delay in operations. As stated, this issue occurred at the beginning of the series (PRSDPO 1) when Parliament was not fully informed that the budget support was in the form of an IDA credit and not an IDA grant. Parliamentarians Page 28 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals were concerned about the impact on Liberia’s debt status and needed additional assistance on how to ratify such agreements. It took 11 months between the Board approval of PRS DPO1 and disbursement. 82. Lesson 3: It is wise to keep the range of policy areas flexible so that new areas of reform can be pursued if circumstances warrant. The Ebola crisis, which occurred after the start of the series, highlighted the weaknesses in Liberia’s health care delivery system. The Ebola crisis put a major strain on an already weak health system. The program used this information to add a new reform area that prioritized the strengthening of Liberia’s health system, which included better surveillance and diagnostic capabilities and improved budget execution. These improvements have put the country in a better position to deal with future health crises. 83. Lesson 4: Capacity for reform in countries like Liberia, which experienced a lack of rule-of-law based governance over several years requires heavy TA to support a successful reform program . TA helped overcome weak capacity and supported requisite improvements in legal and regulatory frameworks. The TA also encouraged stronger government commitment and willingness to reform as the World Bank-Liberia partnership carried through to implementation of reforms on the ground. The key TA support was particularly helpful in the areas of PFM, land reform and in electricity sector reforms. B. Next Phase 84. In 2018, the new administration in Liberia approved an ambitious five-year development plan, the Pro-Poor Agenda for Prosperity and Development. The plan aims to strengthen income security and reduce the incidence of absolute poverty through sustained and inclusive economic growth driven by increased investment in agriculture, infrastructure, human-capital development, and social protection. Meanwhile, the macroeconomic situation has deteriorated significantly. A decline in external assistance combined with weak domestic revenue mobilization, limited expenditure adjustments and accommodative monetary policy stance led to numerous macroeconomic challenges, including unsustainable fiscal stance, the emergence of arrears and excessive central bank financing, depletion of fiscal and external buffers, and pressure on inflation and the exchange rate. After a slow start, the authorities have recently taken significant steps toward ensuring macroeconomic stability and returning Liberia to a sustainable and inclusive growth path. They have reached an agreement with the IMF on a new four-year ECF program15 and have engaged with other development partners (World Bank, European Union, African Development Bank) to unlock external financing. In line with this request and within the framework of the new World Bank Group’s Country Partnership Framework (CPF) for Liberia,16 a programmatic series – Inclusive Growth Development Policy Operation (IGDPO-P168218) comprising three operations is currently under the preparation. The new IGDPO series designed to support productivity-driven economic growth and diversification through removing distortions in selected sectors (agriculture, energy, trade), strengthening public sector transparency and promoting economic and social inclusion. IGDPO-1 is expected to be approved in FY20. . 15A new ECF arrangement for Liberia was approved by the IMF Executive Board on December 13, 2019. https://www.imf.org/en/News/Articles/2019/12/11/pr19451-liberia-imf-executive-board-approves-us23-4- million-ecf-arrangement 16World Bank (2018). Country Partnership Framework for the Republic of Liberia for the period FY19-FY24. Report No. 130753-LR. Page 29 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 1. RESULTS FRAMEWORK A. RESULTS INDICATORS Pillar: Governance and Civil Service Reform Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Currency transaction reports Text None >100,000 (CTR); > 100 (STR) CTR-446,015-Exceeded. (CTRs) and Suspicious Transaction STR-68-Partially achieved reports (STRs) issued by the FIU 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): CTRs portion exceeded. STRs portion partially achieved. Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Page 30 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Senior Civil servants (Directors Percentage 56.00 75.00 75.00 and above) providing complete asset statement to LACC 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Achieved Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Civil servants in grades 1-10 paid Percentage 0.00 100.00 4.20 according to new pay structure 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Not achieved. Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion (a) Share of ports where Text (a) 41% (a) 55% a)50%, b)93%-Partially achieved ASYCUDA is operational (b) Share (b) 90% (b) 95% of total customs revenue captured by ports where ASYCUDA is operational 31-Dec-2012 31-Dec-2018 31-Dec-2018 Page 31 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Comments (achievements against targets): Partially achieved. Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Civil servants paid through the Percentage 0.00 100.00 60.00 IFMIS solution 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Partially achieved Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Number of Ministries and Number 7.00 50.00 50.00 Agencies in which IFMIS is installed and operational 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Achieved. Page 32 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Submission of annual financial Months 12.00 4.00 4.00 statements to GAC (Months since the end of the fiscal year) 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Achieved. Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Trained and certified Number 0.00 120.00 172.00 procurement specialists appointed in the civil service 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Exceeded. Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Publication of annual Compliance Yes/No N Y N Monitoring Report (CMR) by PPCC 31-Dec-2012 31-Dec-2018 31-Dec-2018 Page 33 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Comments (achievements against targets): Not achieved. Pillar: Economic Transformation Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion (a) cost of electricity to end users Text (a) $0.55 (a) <$0.40 a) 0.35-Achieved in KWHs (amount); (b) Urban (b) 12,742 (b) 60,000 b) 54,075-Partially achieved access to electricity (number); (c) % of electricity produced from (c) 100% (c) less than 20% c) <20%-Achieved high cost diesel 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): a) Achieved b) Partially achieved c) Achieved Page 34 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Legacy deeds and new deeds Text 0/0 50K Legacy deeds; 10K new 63,219-Achieved digitized deeds 11,361-Achieved 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Achieved Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Share of commercial bank credit Percentage 3.70 5.50 4.80 to the agricultural sector 31-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Partially achieved. Page 35 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) Pillar: Human Capital Development Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion Primary, junior secondary, and Text Primary male 31.6%; Primary male 45%; Primary Prim. Male 48%; Female 48% - senior secondary enrollment Primary female 33.3%; female 45%; Junior Exceeded; Jr. Sec. 24%-Exceeded; rates Junior secondary 7.1%; secondary 20%; Senior Sr. Sec-10%-Partially achieved Senior secondary 5.4% secondary 15.4% 31-Dec-2012 31-Dec-2018 30-Jun-2017 Comments (achievements against targets): Prim. Male 48%; Female 48% -Exceeded Jr. Sec. 24%-Exceeded Sr. Sec-10%-Partially achieved Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion (a) Health budget execution rate Text (a) 96% (FY13) (a) >96% (a) (Recurrent) 95.4% (FY17/18)- (current) (b) Health budget (b) 74.9% (FY13) (b) >74.9% Almost achieved Page 36 of 62 The World Bank Liberia Fourth Poverty Reduction Support Development Policy Operation (P162111) execution rate (capital) (b) – 92.1% - Achieved 28-Jun-2013 28-Jun-2019 28-Jun-2019 Comments (achievements against targets): (a) (Recurrent) 95.4% (FY17/18)-Almost achieved (b) – 92.1% - Achieved Page 37 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES A. TASK TEAM MEMBERS P162111 Names Title Unit Responsibility Marina Bakanova Senior Economist GMTA3 TTL Daniel Kwabena Boakye Economist GMTA3 Errol George Graham Program Leader AFCW1 Cari Votava Senior Financial Sector Specialist GFCFN Zubair K. M. Sadeque Senior Energy Specialist GEE08 Joseph Tawiah Quayson Senior Energy Specialist GEE08 Munirat Ogunlayi Senior Health Specialist GHN13 Preeti Kudesia Senior Health Specialist GHN13 Victoria Stanley Sr Land Administration Specialist GSULN Smile Kwawukume Senior Public Sector Specialist GGOAS Saidu Dani Goje Sr Financial Management Specialist GGOAE Donald Mphande Lead Financial Management Specialist GGOAS Ayago Esmubancha Wambile Economist/Statistician GPV07 Sekou Abou Kamara Environmental Specialist GENA2 Nightingale Rukuba-Ngaiza Senior Counsel LEGAM George Ferreira Da Silva Finance Officer WFACS Silvia Gulino Operations Analyst GMTA3 Lydie Ahodehou Program Assistant GMTA3 P146619 Names Title Unit Responsibility Errol George Graham Program Leader AFCW1 TTL Smile Kwawukume Senior Public Sector Specialist GGOAS Daniel Boakye Economist GMTA3 Saidu Dani Goje Sr Financial Management Specialist GGOAE Kulwinder Singh Rao Lead Transport Specialist GTR01 Cari Votava Senior Financial Sector Specialist GFCFN Clemencia Torres De Mastle Senior Energy Economist GGE08 Komana Rejoice Lubinda Senior Procurement Specialist GGOPA Julie Rieger Chief Counsel LEGES Nightingale Rukuba-Ngaiza Senior Counsel LEGAM Page 38 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Irene Sitienei Program Assistant GMTA1 Silvia Gulino Operations Analyst GMTA3 Maude Valembrun Program Assistant GMTA2 P127317 Names Title Unit Responsibility Errol George Graham Program Leader AFCW1 TTL Daniel Boakye Economist GMTA3 Dora A. Harris Senior Program Assistant GSP01 Raymond Muhula Senior Public Sector Specialist GGOAP Ismaila Ceesay Practice Manager AFCW1 Saidu Dani Goje Sr Financial Management Specialist GGOAE Winter Chinamale Senior Procurement Specialist GGOPA Douglas Sumerfield Senior Operations Officer GEDDR Cari Votava Senior Financial Sector Specialist GFCFN Gary Fine Consultant GFCAE Clemencia Torres De Mastle Senior Energy Economist GGE08 Kulwinder Singh Rao Lead Transport Specialist GTR01 Anders Jensen Senior Monitoring & Evaluation Specialist GENOS P151502 Names Title Unit Responsibility Errol George Graham Program Leader AFCW1 TTL Raymond Muhula Senior Public Sector Specialist GGOAP Jariya Hoffman Senior Economist GMF07 Ismaila Ceesay Practice Manager AFCW1 Maxwell Dapaah Sr Financial Management Specialist GGOES Allan Rotman Consultant GEE08 Winter Chinamale Senior Procurement Specialist GGOPA Emily Weedon Sr Social Protection Specialist GSP08 Cari Votava Senior Financial Sector Specialist GFCFN Gary Fine Consultant GFCAE Clemencia Torres De Mastle Senior Energy Economist GGE08 Zayra Romo Senior Energy Specialist GGE01 Kulwinder Rao Lead Transport Specialist GTR01 Oliver Braedt Program Leader LCC6C Anders Jensen Senior Monitoring & Evaluation Specialist GENOS Page 39 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Supervision Daniel Kwabena Boakye Economist GMTA3 TTL Marina Bakanova Senior Economist GMTA3 Silvia Gulino Operations Analyst GMTA3 Richard Carroll Senior Evaluation Specialist GMTA3 B. STAFF TIME AND COST P162111 Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation 9.820 86,493.12 FY17 18.039 127,601.83 FY18 Total 27.86 214,094.95 Supervision/ICR 18.425 77,588.75 FY18 11.463 32,269.62 FY19 0 0.00 FY20 Total 29.89 109,858.37 P146619 Page 40 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation 24.200 190,156.54 FY14 12.200 74,953.26 FY15 0 0.00 FY16 9.820 86,493.12 FY17 18.039 127,601.83 FY18 Total 64.26 479,204.75 Supervision/ICR 18.425 77,588.75 FY18 11.463 32,269.62 FY19 0 0.00 FY20 Total 29.89 109,858.37 P127317 Page 41 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation 0 6,277.94 FY12 31.574 225,438.37 FY13 24.200 190,156.54 FY14 12.200 74,953.26 FY15 0 0.00 FY16 9.820 86,493.12 FY17 18.039 127,601.83 FY18 Total 95.83 710,921.06 Supervision/ICR 18.425 77,588.75 FY18 11.463 32,269.62 FY19 0 0.00 FY20 Total 29.89 109,858.37 P151502 Page 42 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation 0 6,277.94 FY12 31.574 225,438.37 FY13 24.200 190,156.54 FY14 26.550 193,788.58 FY15 23.000 204,218.82 FY16 19.595 156,829.54 FY17 18.039 127,601.83 FY18 Total 142.96 1,104,311.62 Supervision/ICR 18.425 77,588.75 FY18 11.463 32,269.62 FY19 0 0.00 FY20 Total 29.89 109,858.37 Page 43 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’ COMMENTS N/A Page 44 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 4. SECTORS AND THEMES . SECTORS AND THEMES P162111 Sectors Mitigation Co- Adaptation Co- Major Sector/Sector (%) benefits (%) benefits (%) SECTOR_TBL Agriculture, Fishing and Forestry 11 0.00 0.00 Other Agriculture, Fishing and Forestry 11 0 0 SECTOR_TBL Public Administration 44 0.00 0.00 Central Government (Central Agencies) 44 0 0 SECTOR_TBL Financial Sector 23 0.00 0.00 Banking Institutions 23 0 0 SECTOR_TBL Health 11 0.00 0.00 Health 11 0 0 SECTOR_TBL Energy and Extractives 11 5.50 0.00 Energy Transmission and Distribution 11 50 0 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Finance 22 Financial Stability 22 Financial Sector oversight and policy/banking regulation & restructuring 22 Public Sector Management 44 Public Finance Management 44 Public Expenditure Management 33 Page 45 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Domestic Revenue Administration 11 Public Administration 11 Administrative and Civil Service Reform 11 Urban and Rural Development 11 Rural Development 11 Land Policy and Tenure 11 Environment and Natural Resource Management 11 Climate change 6 Mitigation 6 Energy 11 Access to Energy 11 P146619 Sectors Mitigation Co- Adaptation Co- Major Sector/Sector (%) benefits (%) benefits (%) SECTOR_TBL Agriculture, Fishing and Forestry 10 0.00 0.00 Other Agriculture, Fishing and Forestry 10 0 0 SECTOR_TBL Public Administration 80 0.00 0.00 Central Government (Central Agencies) 80 0 0 SECTOR_TBL Education 10 0.00 0.00 Other Education 10 0 0 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Public Sector Management 80 Public Finance Management 30 Public Expenditure Management 30 Page 46 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Public Administration 50 Transparency, Accountability and Good Governance 50 Human Development and Gender 10 Education 10 Access to Education 5 Education Financing 5 Urban and Rural Development 10 Rural Development 10 Rural Markets 10 P127317 Sectors Mitigation Co- Adaptation Co- Major Sector/Sector (%) benefits (%) benefits (%) SECTOR_TBL Public Administration 100 0.00 0.00 Central Government (Central Agencies) 100 0 0 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Economic Policy 10 Fiscal Policy 10 Tax policy 10 Private Sector Development 100 Jobs 100 Public Sector Management 70 Public Finance Management 30 Public Expenditure Management 20 Domestic Revenue Administration 10 Page 47 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Public Administration 40 Transparency, Accountability and Good Governance 40 Urban and Rural Development 20 Rural Development 20 Land Administration and Management 20 P151502 Sectors Mitigation Co- Adaptation Co- Major Sector/Sector (%) benefits (%) benefits (%) SECTOR_TBL Public Administration 70 0.00 0.00 Central Government (Central Agencies) 70 0 0 SECTOR_TBL Education 10 0.00 0.00 Other Education 10 0 0 SECTOR_TBL Health 10 0.00 0.00 Health 10 0 0 SECTOR_TBL Energy and Extractives 10 0.00 0.00 Oil and Gas 10 0 0 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Finance 20 Financial Stability 20 Financial Sector Integrity 20 Public Sector Management 40 Public Finance Management 30 Public Expenditure Management 30 Page 48 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Public Administration 40 Administrative and Civil Service Reform 20 Transparency, Accountability and Good Governance 30 Human Development and Gender 10 Health Systems and Policies 10 Health Finance 10 Education 10 Access to Education 10 Environment and Natural Resource Management 10 Energy 10 Access to Energy 10 . Page 49 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 5. SUPPORTING DOCUMENTS 1. The World Bank (2013). Program Document for a proposed credit in the amount of SDR6.7 million (US$10 million equivalent) to the Republic of Liberia for a Poverty Reduction Support Credit I. Report No: 75849-LR, May 30, 2013. 2. The World Bank (2014). Program Document for a proposed credit in the amount of SDR13.5 million (US$20 million equivalent) and a proposed IDA Crisis Response Window grant in the amount of SDR6.8 million (US$10 million equivalent) to the Republic of Liberia for a Poverty Reduction Support Credit II. Report No: 86588-LR. 3. The World Bank (2016). Program Document for a supplemental financing for a proposed grant in the amount of US$5 million to the Republic of Liberia for a Poverty Reduction Support Credit III. Report No: 75849-LR. 4. Program Document on Proposed Development Policy Grants in the Amounts of SDR 14.2 Million (US$20 Million Equivalent) and US$4.67 Million from the Liberia Forest Landscape Single Donor Trust Fund to the Republic of Liberia for the Fourth Poverty Reduction Support Development Policy Operation (PRSDPO-IV) December 12, 2017. 5. Implementation Completion and Results Report on a Credit in the amount of SDR 3.2 Million (US$5 million equivalent) and [other grants-TF012390, TF0A2366] to the Republic of Liberia for the Liberia Integrated Public Financial Management Reform Project (127319), December 18, 2017. 6. Program Document for a Proposed [CREDIT/GRANT/GUARANTEE] in the Amount of SDR YY Million to Republic of Liberia for the Liberia First Inclusive Growth Development Policy Operation. Draft As well as other documents in the program file, including financing agreements, ICRs, etc. Page 50 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 6. POLICY MATRIX TRIGGERS, PRIOR ACTIONS AND INDICATORS Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) PILLAR 1 Prior Action 1: Indicative Trigger 1: Establish Indicative Trigger 2: Regulations Indicative Trigger 2: Result Indicator 1 (original): Recipient has Financial Intelligence Unit as on Currency transactions The CBL Board has adopted Number of currency transaction adopted an provided for by the AML/CFT reports and suspicious policies and procedures to reports (CTRs) and Suspicious AML/CFT law and approved by the transaction reports issued by conduct AML/CFT compliance Transaction reports (STRs) issued regulation to Cabinet the FIU inspections to assess compliance by the FIU enhance Prior Action 1: Recipient has Prior Action 1: Recipient has of financial institutions with Baseline (2012): none transparency and established a financial facilitated the effective AML/CFT obligations set forth in Target (2018): more than 50 accountability intelligence unit whose operation of an FIU through laws related to AML/CFT (CTR) and more than 10 (STR) vocation is to help increase issuing: (I) Regulation on obligation pursuant to transparency in the Currency Transaction Reporting membership in the Egmont Result Indicator 1 (revised): CTRs recipient's financial for Financial Institutions; (b) Group of FIUs. and STRs issued by the FIU transactions. Regulation on suspicious Prior Action 1: Baseline (2012): none Transaction Reporting for CBL has issued a regulation to Target (2018): >100,000 (CTR) Financial Institutions; (c ) improve the capacity of CBL to and >100 (STR) Regulation for Further compel financial institutions to distribution and Action on the comply with their obligations on UN List of Terrorists and AML/CFT to promote more Terrorist Groups; (d) Regulation efficient sanctions regime Dealing with Cross border Transportation of Currency and Bearer Negotiable Instruments Indicative Trigger 2: Indicative Trigger 2: Indicative Trigger 2: Result Indicator 2 (no revision): A 3-year strategy for Liberia Asset Disclosure Unit within the Legal and regulatory policies for Share of Senior Civil Servants Anti-Corruption Commission LACC is operational with asset disclosure issued by the (Director and above) providing (LACC) completed and adequate staffing. LACC to provide clear guidance complete asset statement to approved by the Prior Action 2: and resources for public officers LACC commissioners The Asset Disclosure Unit to comply. Prior Action 2: within the LACC has become Prior Action 2: Baseline (2012): 56% Page 51 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) Recipient has completed the operational as evidenced by the LACC has issued a regulation to preparation of a 3-year employment of an asst facilitate civil servants' Target (2018): 75% strategy whose substance is verification officer pursuant to declaration of their assets to acceptable to the Association an employment contract dated promote integrity in the civil for the Liberia Anti- November 2, 2015 service. Corruption Commission. Indicative Trigger 3: Indicative Trigger 3: Indicative Trigger 3: Result Indicator 3 (no revision): Prepare and adopt a revised Complete merging of Complete merging of allowances Share of civil servants in grade 1 pay reform strategy merging allowances and base pay for and base pay for civil servants at to 10 paid according to the new allowances and base pay for civil servants at levels 1 through levels 5 through 10 pay structure civil service cadres. 4 Prior Action 3: Prior Action 3: Prior Action 3: The CSA has issued a Personnel Baseline (2012): 0% Recipient has prepared and Recipient has completed Action Letter to the MFDP to (a) adopted a revised pay merging of discretionary complete the merging of Target (2018): 100% reform strategy merging allowances and base pay for discretionary allowances and allowances and base pay for civil servants at levels 1 through base pay for civil servants and civil service cadres, with a 4 as evidenced by a Personnel (b) set out the consolidated pay view to enhancing Action Notice from the CSA to scale for grades 1 to 10 to transparency and the MFDP dated April 12, 2016 remove distortions in civil accountability of the setting out the consolidated servants' salaries and enhance recipient's public service. pay scale for each of the grades transparency and accountability covered under levels 1 to 4. in the public service. Prior Action 2: Indicative Trigger 4: Result Indicator 4 (no revision): Recipient has Roll out of ASYCUDA to eight (a) Share of ports where rolled out a new remaining border points. ASYCUDA is operational/ customs Prior Action 4: (b) Share of total customs administration Recipient has submitted to its revenue captured by ports system parliament for enactment a where ASYCUDA is operational (ASYCUDA) to two draft Modernized Customs Code Page 52 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) additional ports of Liberia to strengthen customs Baseline (2012): of Bo-Waterside and tax administration (a) 41% (b) 90% and Ganta to improve customs Target (2018) Original: administration (a) 100% (b) 100% and enhance service delivery Target (2018) Revised: (a) 55% (b) 95% Indicative Trigger: Roll out of ASYCUDA to eight remaining border points. Dropped. Prior Action 3: Indicative Trigger 4: Indicative Trigger 4: Result Indicator 5 (no revision): Migrated payroll Complete installation of Civil Complete the validation of all Share of civil servants paid processing from Service Management (CSM) employees through biometric through the IFMIS solution the Legacy module of IFMIS authentication and link the System t the HRMIS to the payroll system. IFMIS solution. Prior Action 4: Baseline (2012): 0% Recipient has completed Prior Action 4: installation of the civil Recipient has through CSA Target (2018): 100% service management module improved civil service payroll of the IFMIS with a view to management by: (a) completing strengthening fiscal validation of all employees discipline and budgetary through biometric transparency. authentication; (b) linking HRMIS to the payroll system as evidenced by a letter and Page 53 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) interim reports from the CSA to the MFDP dated May 2, 2016. Indicative Trigger 5: Indicative Trigger 5: Indicative Trigger 5: Result Indicator 6 (no revision): Complete roll out of IFMIS to Prepare and publish quarterly Prepare and publish quarterly Number of Ministries and 15 additional M&As for a comprehensive GFS-compliant comprehensive GFS-compliant Agencies in which IFMIS is total of 23, and bring five fiscal operations report for fiscal operations report for installed and operational additional donor-financed FY13/14 and first two quarters FY15/16 and first two quarters projects into IFMIS of FY14/15 of FY16/17 Baseline (2012): 7 (MFDP and 6 others) Prior Action 5: Prior Action 5: Prior Action 5: Recipient has completed roll Prepare and publish quarterly MFDP has (a) published on its Target (2018): out of IFMIS to 11 additional comprehensive government website quarterly 20 or more (MFDP and all M&As) Ministries and agencies for a financial statistics as set forth in comprehensive GFS-compliant total of 19 and brought five the Annual Fiscal Outturn fiscal operations reports for Target (2018) revised: donor-financed projects into report for FY13/14 and the FY15/16 and FY16/17 to 50 or more (MFDP and all M&As) pilot-tested mode in IFMIS, Annual Fiscal Outturn report for promote budget transparency with a view to facilitating FY14/15 FYs and (b) submitted IPSAS management of public compliance financial statement systems. for FY15/16 and FY16/17 to the GAC to improve internal budget controls. Prior Action 4: Indicative Trigger 6: Indicative Trigger 6: Indicative Trigger 6: Result Indicator 7 (no revision): Recipient through Submit IPSAS compliance Submit IPSAS compliance Submit IPSAS compliance Submission of annual financial MFDP has financial statements of GOL financial statements of GOL for financial statements of GOL for statements to GAC (Months submitted its for FY12/13 to GAC for audit. FY13/14 to GAC for audit. FY15/16 to GAC for audit. since the end of the fiscal year) IPSAS-based financial Prior Action 6: Prior Action 6: Embedded in PA5 (b) Baseline (2012): statements for Recipient has submitted its Recipient has submitted to GAC Delay of over 12 months FY10/11 and IPSAS-based financial its report on the Annual FY11/12 to statements for FY12/13 to Consolidated fund for FY14/15 Target (2018): Page 54 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) General Auditing General Auditing for audit with a view to Within 3 months of the end of FY Commission to Commission for audit, with a improving internal budget improve internal view to improving internal controls. Target (2018) revised: budget controls budget controls. < 4 months Indicative Trigger 7: Indicative Trigger 7: Indicative Trigger 6: Result Indicator 8 (no revision): Approval by cabinet of a Approval by PPCC of minimum Cabinet has approved the Number of trained and certified procurement career track for standards and procurement transition order for the procurement specialists procurement specialists accreditation system to certify Procurement Training School to appointed in the civil service within the civil service procurement practitioners in be moved to the University of Liberia Liberia and the PPCC has Baseline (2012): None Prior Action 7: provided a detailed plan, Recipient has structured Prior Action 7: including the timeline for the Target (2018): 100 within its civil service a PPCC has approved and transition, with a view to career track for procurement published minimum standards entrenching procurement Target (2018) revised: 120 specialists with a view to and a procurement certification training and enhancing improving budget execution. system entitled Design of professionalism of procurement Procurement specialists. Professionalization System for Liberia dated May 25, 2016 to Prior Action 6: certify procurement MFDP has approved the transfer practitioners with a view to of the Financial Management professionalizing public Training School to the University procurement. of Liberia to enhance professionalization of financial management and procurement specialists and started the transfer process. Indicative Trigger 8: Indicative Trigger: Result Indicator 9 (no revision): Page 55 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) Complete technical review of Complete Road Map for the (a) Implementation progress on implementing regulations of reform of the Public road Map of Reform of the PPCC the Public Procurement and Procurement and Concession (# of milestones met); Concession Commission Commission and have said Road (b) Publication of annual (PPCC) and have regulations Map approved by compliance monitoring reports approved by cabinet Commissioners (CMR) by PPCC (Y/N) Prior Action 8: Dropped Baseline (2012): Recipient has completed (a) none technical review of draft (b) No implementing regulations adopted by the Board of Target (2018): Commissioners of the Public (a) TBD Procurement and Concession (b) Yes Commission (PPCC) with a view to strengthening the Target (2018) revised: recipient's procurement (a) dropped systems. (b) Yes Pillar 2 Indicative Trigger: Indicative Trigger 8: Indicative Trigger 7: Result Indicator 10 (no revision): Complete least cost power Complete approval of an To ensure an efficient delivery of (a) cost of electricity to end users development plan and have electricity tariff strategy that procurement services to users, in KWHs same approved by Cabinet appropriately balances the the contract between the LEC (b) Urban access to electricity by end-sept 2013 and long-term sustainability of the Board and a competitively (c) % of electricity produced implement open competitive energy sector with the selected firm for the from high cost diesel procurement process for distributional impact given the management of LEC has been imports of heavy fuel oil evolution of the generation signed and the new Baseline (2012): used in electricity generation mix. management contractor has (a) $0.55 (b) 12,742 Page 56 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) for LEC to ensure lowest CIF Prior Action 8: taken over management of the (c) 100% cost of fuel Recipient has (a) issued a utility. petroleum import license dated Target (2018): DEFERRED TO PRS DPO3 TO August 23, 2016 to LEC to Prior Action 7: (a) $0.40 GIVE GOL MORE TIME FOR import HFO to generate The LEC has signed the contract (b) 50,000 TECHNICAL ANALYSIS AND electricity for public service between LEC and ESBI, a (c) less than 20% CONSULTATIONS WITH with its own generating plants competitively selected firm, to STAKEHOLDERS. and (b) introduced an open and enable ESBI to take over and Target (2018) revised: competitive procurement improve management of LEC. (a) <$0.40 process for the importation of (b) 60,000 HFO for LEC's own generating (c) less than 20% plants through LEC's Board Policy Resolution dated July 4, 2016 mandating all procurement of fuels for LEC's generation of electricity to be done through and international competitive bidding process. Prior Action 5: Indicative Trigger 8: Result Indicator 11 (original): Recipient has GOL has established the Liberia Land parcels with use and adopted a policy Land Authority through the ownership rights recorded under framework for appointment of commissioners new policy land tenure and the provision of budgetary reform which resources for its operation in Result Indicator 11 (revised): clarifies land keeping with the 2016 Act. # of legacy deeds and new deeds ownership rights digitized related to public Prior Action 8: land and Recipient has, pursuant to Baseline (2012): 0 government- Liberia Land Authority Act, made owned land Liberia Land Authority Target (2018): TBD Page 57 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) operational to improve land governance including land Target (2018) revised: administration and management 50K Legacy deeds; 10K new as evidenced by (a) allocation of deeds budgetary resources for the LLA in its National Budget FY17/18 and (b) President's appointment of at least four of the five Commissioners. Indicative Trigger 9: Result Indicator 12 (no revision): Establish collateral registry Share of commercial bank credit and adopt rural credit policy to the agricultural sector framework Baseline (2012): Prior Action 9: 3.70% Recipient has established collateral registry with a view Target (2018): to improving credit and 5.50% expanding the rural economy. Pillar 3 Indicative Trigger 10: Indicative Trigger 9: Result Indicator 13 (no revision): Adopt comprehensive and Adopt framework for equitable Primary, junior secondary, and fully-costed implementation resource allocation by region senior secondary enrollment plan for teacher recruitment, and pupils' socio-economic rates training, and deployment status particularly with respect across all levels of education to school grants scheme. Baseline (2012): system to improve the Prior Action 9: Page 58 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals Indicative Triggers (from Indicative Triggers (from DPO1) Indicative Triggers (from DPO1) Prior actions for DPO1) and and and Results Indicators (original DPO1 Prior Actions for DPO2 Prior Actions for DPO3 Prior Actions for DPO4 (DPO1) and revised) incentive for school Ministry of Education has Primary male 31.6%; Primary attendance. adopted a framework for female 33.3%; Junior secondary equitable resource allocation by 7.1%; Senior secondary 5.4% Prior Action 10: region and pupil's poverty Recipient has adopted status particularly with respect Target (2018): comprehensive and fully- to the school grant scheme as Primary male 45%; Primary costed implementation plan evidenced in its briefing paper female 45%; Junior secondary for teacher recruitment, to cabinet entitled Revision of 20%; Senior secondary 15.4% training, and deployment the Framework for Equitable across all levels of education allocation by Region and Pupil's system with a view to Poverty status with Respect to improving incentives for School Grant Scheme dated school attendance. May 6, 2016 Indicative Trigger 10: Indicative Trigger 9: Result Indicator 14 (no revision): N/a Conduct a full year budget (a) Health budget execution rate execution review with a view to (current) Prior Action 10: ensuring improved budget (b) Health budget execution rate Ministry of Health has execution. (capital) conducted a half-year budget execution review for FY16 as Prior Action 9: Baseline (2012): evidenced in its report on MoH has approved the Joint (a) 96% (FY13) Absorptive Capacity of funds at Financial Management (b) 74.9 (FY13) Ministry of Health dated May 5, Assessment Costed Plan 2017 to 2016 with a view to improving improve efficiency in the use of Target (2018): budget execution. domestic and external resources (a) >96% . for the health sector. (b) >74.9 Page 59 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals ANNEX 7. ANALYTICAL WORK FOR THE SERIES17 Pillar 1Governance and Civil Service Reform US State Department’s 2013 The relative openness of Liberia’s economy coupled with its desire Money Laundering Report for foreign investment makes the country vulnerable to some degree of illegal business activities. Transparency International Liberia is perceived as having progressed in the fight against (2012) corruption over the last few years. However, corruption remains Liberia Systematic Country endemic and permeates most sectors of the society Diagnostic (2017) Public Expenditure Review Implement the medium-term wage reform strategy to improve (2013) transparency and ensure medium-term sustainability of wage bill. Complete biometric registration for all civil servants Liberia DTIS Update (2016) The new Code is critical for the overall customs modernization program, especially in clarifying the role and mandates of public agencies at the ports and border facilities and streamlining the risk management approach. PEFA (2016) All quarterly reports for FY 2014/2015 have been posted on the MFDP website, but 2-5 months after the end of the period covered. The availability of in-year reports has improved compared to the 2012 Assessment, when one quarter was not posted, but not by enough to meet the benchmark. Annual Report of the PPCC Priority should be given to long-term procurement capacity- building (2014) programs for PPCC staff, geared towards enhancing their skills in the public procurement and concessions award processes. Pillar 2: Economic Transformation Liberia: Inclusive Growth High cost/lack of access to electricity reduces competitiveness of Diagnostics (2012) Liberia: otherwise potentially attractive value-added sectors. Systematic Country Diagnostic (2017) Liberia: Inclusive Growth Weak governance of land resources increases the risk of instability in Diagnostics (2012) Liberia: the future, particularly when large new concession areas are granted Systematic Country Diagnostic without proper verification of land ownership. (2017) Pillar 3: Human Capital Development Liberia: Public Expenditure Budget execution by the MoH has been less than optimal and needs Review Human Development to be urgently addressed. Looking for the reasons behind the (2012) observed less than optimal budget execution is another key Joint Financial Management challenge that both the MoH and MFDP need to tackle. This would Assessment (2016) help to convince partners that the GoL is serious about efficiently spending what is currently available to it and help to justify any calls to increase funding. 17 Excerpted from PRSDPO 4 Program Document, which also covers relevant analytical work for other operations in the series. Page 60 of 62 The World Bank ICRR for Liberia Poverty Reduction Support Operations I, II, III, IV and Supplementals MAP Page 61 of 62