The World Bank Report No: ISR5277 Implementation Status & Results Ethiopia Public Sector Capacity Building Program Support Project (P074020) Public Disclosure Copy Operation Name: Public Sector Capacity Building Program Support Project Project Stage: Implementation Seq.No: 12 Status: ARCHIVED Archive Date: 24-Sep-2011 (P074020) Country: Ethiopia Approval FY: 2004 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Ministry of Finance and Economic Development, Ministry of Civil Service Key Dates Board Approval Date 11-May-2004 Original Closing Date 07-Jul-2009 Planned Mid Term Review Date Last Archived ISR Date 24-Sep-2011 Effectiveness Date 22-Nov-2004 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Public Sector Capacity Building Program (PSCAP)Support Project is to improve the scale, efficiency, and responsiveness of public service delivery at the federal, regional and local level; to empower citizens to participate more effectively in shaping their own development and to promote good governance and accountability. This overall objective will be achieved by scaling up Ethiopia's ongoing capacity building and institutional transformation efforts in six priority areas under PSCAP - (i) Civil Service Reform (ii) District-Level Decentralization (iii) Urban Management Capacity Building; (iv) Tax System Reform; (v) Justice System Reform; (vi) Information and Communications Technology. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost FEDERAL PSCAP 30.00 REGIONAL PSCAP 120.00 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Implementation Status Overview The public Sector Capacity Building Program Support Project finances 6 core sub-programs that are directly linked to the outcomes. One or more sub-programs may contribute for each of the outcomes. The project became effective at the end of 2004 and one of the binding agreements in the project is to initiate woreda/district and city level benchmarking as Page 1 of 17 The World Bank Report No: ISR5277 one of the main monitoring tool. The Woreda and City Benchmarking Survey created the baselines and has been measuring progress over the years. The first supply side survey was conducted in 2005/6 in a limited number of local governments. The second survey conducted in 2008 incorporated both the supply and demand side surveys. The supply-side survey collected data from local government officials on financial autonomy, institutional capacity, service delivery, inclusiveness and openness of the local government affairs to citizens. The supply side information is triangulated with the demand side component that collects and analyzes the views, opinions and perceptions of citizens with regard to service Public Disclosure Copy delivery, openness, inclusiveness, and accountability of local governments. The demand side survey uses three tools: i) Citizens’ Report Card using household survey, ii) Focus Group Discussion with citizens representatives; and iii) Key Informant Interviews with civil society organizations. In terms of coverage, the first round of the Woreda and City Benchmarking which was carried out in 2005/6 established a baseline in a limited number of jurisdictions (10%). In the subsequent three rounds the sample size increased to 38%, 50%, and 33% respectively including the initial (10%) jurisdictions which were used for time series comparison. In addition the demand side of the survey covers more than 11,000 households in every round. The survey result indicates a confidence interval of +/- 3 % at 95% confidence interval. The results worthy of note are the following: The scale, efficiency and responsiveness of public service delivery at federal, regional, and local levels have improved. Based on the Woreda and City Benchmarking Citizens Report Card, 88% of the local jurisdictions are now providing all basic services compared to only 25% in 2005 which suggests that in more and more jurisdictions the public is having better access to services considered basic. Similarly, satisfaction with basic services is also improving. I) Citizens using government health facilities increased from 50% to 84% in urban and from 77% to 94% in rural areas in 2008 Vs. 2011. Overall satisfaction with the health services increased from 62% to 70% while households satisfied with the waiting time, attitudes of the medical staff, and availability of drugs increased from 66%, 66%, 53% in 2008 to 81%, 74% and 54% in 2011 respectively. II) Overall satisfaction with primary education service increased from 84% to 94%, with solid waste from 70% to 74%, with agricultural extension from 90% to 94% over the same period. Although, there is no clear evidence of growing satisfaction for water supply (61% in 2008 to 58% in 2011), there has been a 16% fall over the past 18 months (from 26% to 10%) in the proportion of respondents who rely on unprotected water sources. The nation-wide tax system reform has contributed to service delivery improvement by increasing the predictability and adequacy of financial resources. Tax collection nationwide increased five times from 12.4 to 58.9 billion Ethiopian Birr between 2005, the project’s first year, and 2011. Tax to GDP ratio has increased from 8.6 in 2009 to 11.3 in 2010 and 11.5 in 2011 after consecutive reduction for three years. Transparency and accountability have also documented improvements. Citizens who know what taxes and fees they are legally required to pay increased from 60% in 2008 to 81% in 2011. Those who know their woreda budget and strategic plan increased from 13% and 17% in 2008 to 20% and 19% in 2011 respectively. Citizens who know council meetings are open to the public increased from 11% in 2008 to 32% in 2011 while those who are personally consulted on development issues increased from 17% to 20% over the same period. Citizens who think an ordinary person can do something to hold local government leaders to account if they fail to keep their promises increased very slightly from 47% to 49% in the last 18 months. In addition, the loss of confidence that concerns raised regarding local government’s service quality will be addressed also seems to recover slightly after considerable loss between 2008 and 2010. Confidence that concerns raised in relation to quality of service in health increased from 56% to 58% and in water from 8% to 14%. Notwithstanding the above progress, citizens who reported paying extra money to get public service increased from 4.1% to 6.5%. Similarly, the proportion reporting extra-legal payments for government health services has also risen from 5.8% to 8.5% between 2008 and 2011 which reinforces the view that there is an increase in petty corruption. Locations Public Disclosure Copy Country First Administrative Division Location Planned Actual Ethiopia Not Entered Federal Democratic Republic of Ethiopia Results Project Development Objective Indicators Page 2 of 17 The World Bank Report No: ISR5277 Indicator Name Core Unit of Measure Baseline Current End Target Improved transparency and accountability Text Value 1) GOE survey: increased 1) The Woreda and City 1) Reduced corruption and arbitrariness in rule incidence of Speed money Benchmarking Citizens Public Disclosure Copy enforcement (corruption). 2) Poor access Report Card showed that 2) Increased access to justice to justice - requires baseline payment out side the legal 3) Independence of courts data 3) Weak requirement was reduced 4) Freedom of information verticalindependence 4) from 4.3% in 2008 to 4.1 in Freedom of info 2010. That number has increased to 6.5% in the 2011 survey. 2) Alternative Dispute Resolution (ADR) including the Kebele Social Courts is increasing encouraged and used. 55% of the respondents of the citizen's report card in 2011 reported that social courts solve problems quite often compared to 50% in 2010. 3) Independence of courts is adequately recognized and protected in the Ethiopian Constitution and the various laws concerning the judiciary. Significant efforts are being exerted through short and long-term training to address gaps in understanding and respect for the principles of judicial independence. Public Disclosure Copy 4) Transparency and accountability have also documented improvements. Citizens who know what taxes and fees they are legally required to pay increased from 60% in 2008 to 81% in 2011. Those who know their woreda budget and strategic plan increased from 13% and 17% in 2008 to 20% and 19% in 2011 respectively. Citizens who know council meetings are open to the public increased from 11% in 2008 Page 3 of 17 to 32% in 2011 while those The World Bank Report No: ISR5277 Improved quality and efficiency of operations Text Value Available in PPA and WMS 1) 88% of the Local 1) Improved access, responsiveness and cost for specific services jurisdictions are providing efficiency in priority sectors all basic services in 2011 2) Reduced unit costs and processing time in compared to only 25% in Public Disclosure Copy priority sectors 2005. 2) The household's satisfaction on the agriculture extension services has increased from 90% in 2008 to 94% in 2011; on health services from 62% to 70%, on primary education from 84% to 91% and on solid waste collection from 70 to 71%. 3) Tax collection is now processed in 7 minutes compared to 11 minutes in December 2010. And opening of case files in Federal and Regional Supreme Courts is now done in 7 minutes compared to 15 minutes in December 2010. Date 23-Nov-2004 14-Dec-2011 Comments We moved to reporting the core indicator measuring improvement in processing time on December 2010. At the time, we wrongly reported the baseline as 5.21 for tax Public Disclosure Copy and 8.20 as minutes. We found out that the indicated time is the total processing time in hours without dividing it by the number of customers. The correct baseline as of December 2010 is 11 minutes for tax and 15 minutes for opening files in Supreme Courts. The baselines were developed from a single day transactions in the two selected services. Please notethat the tax Page 4 of 17 information for the baseline is collected from Federal office, The World Bank Report No: ISR5277 Enhanced incentive environment (by gender) Text Value 1) Real public sector wages 1) Across the board 30-40% Performance evaluation and 1) Average civil service salary have increased on avg. 2) salary increase was given to reward to be introduced in 20 2) Private-public wage comparison Differentials noted but require all civil servants in January ministries. 3) Wage decompression ratios further analysis 3) Some 2011. Public Disclosure Copy decompression (to beverified) 2) The GoE's performance management system known as the Balanced Score Card (BSC) is being implemented in more and more offices in the last five months. At federal level, the full use of the system has increased from 17 to 22 offices and Tigray is now at advanced stage of preparation in addition to the three big regions and A.A. that are already using the system. The others are at different stages of preparation. Date 23-Nov-2004 14-Dec-2011 Comments Enhanced revenue performance and fiscal Text Value 1) Increased transfers to 1) Fed-regional transfer autonomy regions and woredas EFY95 annual increment was 22% in 1) Increased own revenues and unconditional to EFY96 2) Overall tax 08/09, 18% in 09/10, 21% in transfers as a share of total expenditures revenues in 2002/03 (EFY95) 10/11 and 30.2% in 2011/12. 2) Increased tax effort ETB 8.2 billion The regional-woreda transfer which covered only the 4 big regions in 2003 has now expanded to all regions. 2) Tax collection nationwide increased fivetimes from 12.4 Public Disclosure Copy to 58.9 billion Ethiopian Birr between 2005, the project’s first year, and 2011. Tax to GDP ratio has increased from 8.6 in 2009 to 11.3 in 2010 and 11.5 in 2011 after consecutive reduction for three years. Date 23-Nov-2004 14-Dec-2011 Page 5 of 17 The World Bank Report No: ISR5277 Comments The district level decentralization sub-program primarily supported the devolution of administrative Public Disclosure Copy and fiscal powers to local governments. The tax system reform i) overhauled the legal and policy aspects including proclamations on income tax, turn-over tax, VAT, presumptive taxation and revision of manuals for assessment, collection, audit and administration; ii) restructured the revenue bodies at federal and regional level; iii) introduced better systems and technology including the integrated government tax administration system (SIGTAS), Biometric technologies for taxpayer registration, cash registers etc) and iv) widely conducted tax payer education. Greater inclusiveness and transparency of Text Value Principles of 1) and 2) 1) Participation of citizens and Participation of citizens and prioritization established in PRSP local level civil society like civil society organizations to 1) Participatory budgeting and public reporting processes and white paper on youth, women, farmers, be an established practice. on budgets capacity building cooperative etc for planning 2) Involvement of civil society in planning and and reporting is established in review processes local governments through the good governance Public Disclosure Copy package. An independent review of the good governance package (GGP) established that the main decision making bodies in woredas and kebeles are the councils, the cabinets and ultimately the people. The councils composed of elected representatives exercise the Page 6 of 17 The World Bank Report No: ISR5277 highest authority to approve plans and budgets. In addition to the council and cabinet members, there is Public Disclosure Copy also space for popular participation in planning and budgeting particularly at kebele level. In general, the community kebele level is involved in planning-related deliberations during meetings with heads of the field sector offices held for soliciting information on priority needs and identification of gaps. There also exists a practice of discussing proposed plan in public meetings prior to finalization. The specifics of involved processes in this regard, however, vary from region to region. Date 23-Nov-2004 14-Dec-2011 Comments Increased predictability and adequacy of Text Value 1) Budget variance: will use 1. The jurisdictions having financial resource flows EFY96 as benchmark in close match between the 1) Reduced budget variance future years 2) Fiscal gap: will planned and actual 2) Reduced fed-regional and regional-local be measured using EFY96 expenditure increased from fiscal gaps data 55% to 63% to 65% in the three rounds of survey done in 2005, 2008, and 2010. 2. According to PEFA 2010, the score for predictability in Public Disclosure Copy the availability of funds for commitment of expenditures has increased from D to B showing change in performance due to the overall improvement in cash flow forecast activities in the last three years. Disbursements are now based on both approved Page 7 of 17 The World Bank Report No: ISR5277 allocation and disbursement ceiling. 3. Fiscal deficit in % to GDP Public Disclosure Copy has improved from -4% in 04/05 to -1.3% in 2009 and slightly went up to -1.6% in 2011. Date 23-Nov-2004 14-Dec-2011 Comments PSCAP has supported the implementation of the expenditure management reform which includes financial proclamations, budget, accounts and cash management reforms. Intermediate Results Indicators Public Disclosure Copy Page 8 of 17 The World Bank Report No: ISR5277 Indicator Name Core Unit of Measure Baseline Current End Target Bulk training in discrete areas Text Value Ongoing bulk training in all In ICT, the training was programs mainly in basic and advanced Public Disclosure Copy IT applications; TSRP on tax administration, tax accounting, the use of biometric data collection method as well as tax payers education; CSRP focused more on the balanced score card performance management system; DLDP on the good governance package and participation; EMCP on the newly developed or amended manuals; the court reform on sentencing guidelines, IT assisted court systems, BPR, on new laws and issues including the press law, aviation policy, child justice, construction law, civil procedure law and criminal law; and JSRP on reforming the legal education, BPR, community policing etc. The UMCBP continued to train urban professionals at the Masters level. Total number of urban professionals graduated reached 1285 and ofthese 137 are women. Date 23-Nov-2004 14-Dec-2011 Public Disclosure Copy Comments Other cross cutting systems Text Value Date 23-Nov-2004 Comments Horizontal accountability mechanisms or Text Value 1) Government white paper 1) The review of good -Develop community needs checks and balances established on woreda participation governance package by assessment and strategy independent consultants document to empower established that the rolling out communities with information. of GGP was accompanied by Page 9 of 17 The World Bank Report No: ISR5277 creating and/or strengthening -National court reform pertinent structures to ensure program in all woreda courts. institutional preparedness for participation/consensus Public Disclosure Copy building, transparency, and accountability. It includes establishing woreda planning and supervision offices, expanding the number of kebele council members to at least 200 in order to ensure wider representation in the grassroots assemblies, reorganizing grassroots executive councils that are replaced by cabinets spearheading kebele administrations, downsizing the number of the previous dozens of kebele level committees to four major committees charged with the task of dealing with such fields of engagement like development, education and training, health, and justice and administration affairs. New institutional set ups that did not exist previously were also created for expediting the scheme. These included the deployment of trained kebele Managers/ focal persons designated as fulltime local government employees, Public Disclosure Copy kebele inspection and supervision teams charged with the responsibility of monitoring and evaluation, kebele socialcourts, and complaint handling units. 2) ICT is increasingly being used to enhance citizen’s access to government Page 10 of 17 The World Bank Report No: ISR5277 information and services. Community centers (68) are established by federal ICT sub-program as future access Public Disclosure Copy points to government services, toll free call centers (888) increased from 10 to 12 at federal and Oromia offices in the last 5 months and this is being expanded to otherregions. Users of the toll free call center increased in the last two quarters from 35 K to 76K. Similarly, the National government portal is also providing information to internal and external users. 3) The court reform program is rolled out to the three levelsof courts at federal, regional and woreda first instance courts. The courts are using different mechanisms to enhance access to justice information. Information Counters are established in Supreme and high courts and are also rolled out to Woreda Courts to provide case related information, a wide range of information about the courts are provided including court judgments and Public Disclosure Copy proclamationsonweb sites, touch screen and toll free number (992), legal awareness to the public are provided in diff. media, Ethiopian journalof legal education is disseminated to government, non-government and universities to encourage Page 11 of 17 The World Bank Report No: ISR5277 legal research and exchange of good ideas. Date 23-Nov-2004 14-Dec-2011 Public Disclosure Copy Comments Vertical accountability mechanisms (service Text Value Service standards to be All offices implementing the standards) established developed under DLDP and BPR have set service UMCBP subprograms standards and the required documentation from users for each service and these are expected to be posted in these offices. Consultation / validation workshop was conducted on the draft Citizens and Civil Service Charter with sectors and training on the development and implementation of citizen’s charter is also included in the action plan for2011/12. Date 23-Nov-2004 14-Dec-2011 Comments Intergovernmental fiscal and revenue Text Value Fiscal system based on 1) Income tax, turn over tax, -Income tax, turn over tax, mobilization mechanisms established regional subsidy and woreda agricultural income tax are agricultural income tax block grant implemented. adopted by all regions -Revenue potential study 2) Tax collection nationwide completed in all regions increased five times between -Presumptive taxation the project’s first year and guidelines and national 2011. The total tax collection profitability rates issues in 2005, 2008 and 2009 is -100% VAT registered 12.4 billion, 24 billion and 29 taxpayers respectively. In FY 2010 tax -100% TIN in all regions. Public Disclosure Copy revenue collected increased -100%of commercial banks, to Br 37.5 billion and in customs, national bank and FY2011 to Birr 58.9 billion. trade and industry using TIN Tax to GDP ratio has reference increased to11.3 and 11.5 in -The three revenue 2010 and 2011 after organizations are now consecutive reduction for merged into one and three years. Organization structure completed in all regions 3) Revenue potential study at -100% of staff trained in Page 12 of 17 The World Bank Report No: ISR5277 federal level is now floated. customer oriented service Previously 2 regions had delivery completed the study. -100% of tax payers covered by education program Public Disclosure Copy -All tax manuals implemented in all regions -Integrated Government Tax Administration System and File Management adopted in all regions -Migration to ASYCUDA++ completed and customs staff trained. Date 23-Nov-2004 14-Dec-2011 Comments Personnel management systems reformed and Text Value Job grading and classification 1) The GoE's performance rolled out exercise underway; Results management system known Oriented Performance as the Balanced Score Card Appraisal System adopted (BSC) is being implemented in more and more offices in the last five months. At federal level, the full use of the system has increased from 17 to 22 offices and Tigray is now at advanced stage of preparation in addition to the three big regions and A.A. that are already using the system. The others are at different stages of preparation. 2) The study report on the job evaluation & grading (JEG) is Public Disclosure Copy being drafted and is expected to be submitted to the top management in February 2012. 3) The Bank has commented on the TOR for the development of HRMIS. 4) The performance related Page 13 of 17 The World Bank Report No: ISR5277 incentive system document was reviewed in light of the performance management system (BSC) and is sent to Public Disclosure Copy Council of Ministers for comments. Date 23-Nov-2004 14-Dec-2011 Comments Expenditure management systems reformed Text Value BIS and BDA roll out in 4 1) All the targets in relation to -Financial laws, regulations and rolled out regions completed the expenditure management and manuals revised and and control sub-program are rolled out to all regions. achieved. -All regions use the new budget structure and char t 2) Program budgeting is now of accounts as well as the implemented in all Federal budget and accounts Budgetary Institutions. information systems (BIS and BDA). -Budget and Accounts reform implemented in all regions. -Cash management directive adopted in all regions - Procurement law, manual and standard bid document rolled out to all regions. Date 23-Nov-2004 14-Dec-2011 Comments Restructuring and performance improvement of Text Value PSIP modality has been 1) Restructuring and -Performance improvement MABs and local governments undertaken adopted; 11 MABs identified performance improvement adopted 20 Ministries. for PSIP implementation through the Business Process - Application of legislative Reengineering (BPR) framework and capacity continues to take place in all building for devolution of fiscal the remaining federal and power. regional government offices to -Establishment of ICT training Public Disclosure Copy streamline cumbersome work center processes and requirements. -ICT curriculum development Special support continuedto completed. be provided to the four -Online-based document emerging regions to help exchange and them build capacity to messagingimplemented at implement the reforms federal level. including the (BPR) and the good governance package. Page 14 of 17 The World Bank Report No: ISR5277 2) Local governments are now given administrative and fiscal power to provide basic services. 88% of the Public Disclosure Copy localjurisdictions surveyed by the 2011 Woreda and City Benchmarking Survey are now providing all basic services compared to only 25% in2005 survey. 3) As part of performance improvement, application development for 28 additional services is now underway following the completion of the first phase implementation of the federal network master plan in 13 Ministries and several of their agencies. Furthermore, the second phase of the network master plan installation is now under evaluation. Date 23-Nov-2004 14-Dec-2011 Comments Legal and regulatory framework established Text Value 1) Municipal enabling 1) City and Municipal -Municipal Legislation in all legislation completed and proclamation are adopted by regions adopted in 4 regions 2) VAT all regions. In addition, - National Housing Policy and withholding tax laws regulatons are issued in implemented passed 3) Civil Services land, finance, HR, and in - All tax proclamations relation to a number of adopted in regions municipal services. In 2011, property registration Public Disclosure Copy proclamation was enacted & urban land development & management policy with its capacity building framework, legal framework and standard manuals were developed. 2) All tax proclamation including income tax, turnover Page 15 of 17 The World Bank Report No: ISR5277 tax, agriculture income tax and land use fee adopted by all regions. Only Afar didn't adopt the land use Public Disclosure Copy feebecause of its unique communal land ownership. 3) The revised civil service proclamation is adopted by all regions; the proclamation for asset disclosure and registration is enacted; the e- government strategy document and architectural framework for e-gov. as well as guidelines for key public infrastructures were developed. Date 23-Nov-2004 14-Dec-2011 Comments Data on Financial Performance (as of 03-Jan-2012) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P074020 IDA-38990 Effective 11-May-2004 23-Aug-2004 22-Nov-2004 31-Dec-2012 P074020 IDA-46690 Effective 23-Mar-2010 30-Apr-2010 14-Jul-2010 31-Dec-2012 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P074020 IDA-38990 Effective XDR 66.90 54.17 12.73 53.85 0.32 99.00 P074020 IDA-46690 Effective XDR 31.50 31.50 0.00 20.07 11.43 64.00 Public Disclosure Copy Disbursement Graph Page 16 of 17 The World Bank Report No: ISR5277 Public Disclosure Copy Key Decisions Regarding Implementation None. Restructuring History There has been no restructuring to date. Related Projects P107217-Public Sector Capacity Building Program Support Project Public Disclosure Copy Page 17 of 17