The World Bank Angola Statistics Project (P157671) REPORT NO.: RES48442 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ANGOLA STATISTICS PROJECT APPROVED ON DECEMBER 7, 2016 TO MINISTRY OF FINANCE POVERTY AND EQUITY AFRICA EAST Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Regional Director: Asad Alam Practice Manager/Manager: Pierella Paci Task Team Leader(s): Alejandro Medina Giopp, Liliana Do Couto Sousa The World Bank Angola Statistics Project (P157671) ABBREVIATIONS AND ACRONYMS ACRONYMS GDP Gross Domestic Product IBRD International Bank for Reconstruction and Development ICT Information and Communication Technology IDREA Household Income, Expenditure and Employment Survey IEA Labor Force Survey INE National Statistical Office IT Information Technology PDO Project Development Objective PPP Purchase Power Parity RAPP Agricultural and Fisheries Census REMPE Enterprise and Establishment Census STEP Systematic Tracking of Exchanges in Procurement The World Bank Angola Statistics Project (P157671) BASIC DATA Product Information Project ID Financing Instrument P157671 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 07-Dec-2016 30-Nov-2021 Organizations Borrower Responsible Agency Republic of Angola National Institute for Statistics of Angola (INE) Project Development Objective (PDO) Original PDO The PDO is to strengthen the capacity of the National Institute for Statistics to fill data gaps, improve statistical production and enhance statistical dissemination practices. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-86690 07-Dec-2016 02-Mar-2017 31-May-2017 30-Nov-2021 62.00 49.26 12.74 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Angola Statistics Project (P157671) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Summary 1. This Project Paper seeks the approval of a restructuring of the Angola Statistics Project (P157671) to extend the project for an additional nine months. The additional nine months will allow for the completion of ongoing activities, including the Economic Census (REMPE) and the Agriculture and Fishing Census (RAPP) as well as the continuation of key statistical inputs such as the labor force survey (IEA) and the economic surveys used to update price indices and the national accounts. The extension comes after delays were incurred by both on-going censuses during the COVID-19 pandemic. The Project Paper also seeks the approval of a change in the target value of several PDO and intermediate indicators and a readjustment of the budget across the components. The project development objective (PDO), implementation arrangements, safeguards category, and safeguards policies remain unchanged. This is a first extension for the project. B. Country and sector background 2. Angola is a lower middle-income country that has been suffering from an economic recession since 2015, with half of its nearly 32 million people living on less than $1.90 (2011 PPP) per day. It is one of the largest countries in Sub- Saharan Africa and one of the largest African oil producers. After its independence from Portugal in 1975, the country suffered a civil conflict that lasted 27 years, ending only in 2002. Propelled by the end of the conflict and high oil prices, its economy grew at an average rate of 12.5 percent between 2004 and 2008, with slower growth after the 2008-2009 global crisis. It is, however, highly dependent on oil exploitation, which accounted for 94 percent of its exports in 2020 even after a 30 percent decline in oil production since 2015. Falling oil prices and oil production, exacerbated recently by the COVID-19 pandemic, have fueled five years of recession that have resulted in Angola’s GDP shrinking by 10.8 percent from its peak in 2015. This has reduced public revenues and forced large expenditure cuts, including to statistics. 3. Angola needs a strong economic diversification push to compensate for falling oil revenues and generate gainful employment for the majority of its population who lives in poverty. Agriculture and fishing sector is one of the most promising sectors for diversification of the economy as it remains severely underdeveloped. Despite its importance, prior to the RAPP, which is being currently implemented, the last agricultural census was from the 1970s, prior to the country’s independence and civil conflict. Similarly, other basic sources of information, such as private sector data, regular labor force surveys, and updated national accounts methodology have been lacking until recent years. This lack of reliable and updated data has constrained the ability of the Government of Angola (GoA) to design and target meaningful reforms. 4. The National Institute for Statistics (INE: Instituto Nacional de Estatística de Angola) is the main official Provider of statistics in Angola. The legal framework of the National Statistical System, Law 3/11, identifies INE and the Banco Nacional de Angola (Central Bank) as the official statistics producers. It is supported by regional statistics offices as well as departments in line ministries. Its limited capacity to provide official statistics is reflected in a low Statistical Capacity Index (SCI) scored at 42.2 in 2016 at the beginning of this project (below the 59.9 average for Sub-Saharan Africa). As of the preparation of this project, the main data gaps of the National Statistics System were the lack of an agricultural census and related surveys, infrequent household and employment surveys as well as an outdated business census. The system of national accounts suffered from data limitations (including a lack of quarterly GDP estimates), outdated methodologies, and insufficient documentation. The World Bank Angola Statistics Project (P157671) C. Project Implementation and Performance Status 5. Project performance: The Angola Statistics Project, a US$ 62 million IBRD loan was approved on December 7, 2016, signed on March 2, 2017 and became effective on May 31, 2017. The ratings of the project progress towards the achievement of PDO and implementation progress are satisfactory as a result of the steady progress made across all project components as of October 2021, though there have been some delays and cost overruns partly due to the impact of COVID-19. No safeguards policies were triggered and the overall environmental and social risks as of October 2021 are considered low because the project did not undertake any activities that would cause significant effects on the country’s environment, forests and other natural resources. The disbursement rate is at 79.45 percent which is below the original projected disbursements. The project is compliant with all project covenants, including audit and financial reporting requirements. 6. The PDO is to strengthen the capacity of INE to fill data gaps, improve statistical production, and enhance statistical dissemination practices. The project has three components: 7. Component 1: Institutional Reform and Capacity (US$ 3.5 million). The first component is designed to support INE’s transformation into a modern provider of statistics. This component includes necessary institutional reforms, information and communication technology (ICT) upgrades, and investments in the institution’s human capital. Specifically, the project has financed assessments and strategies to support institutional reforms; reforms to the legal framework of the statistical system; human resources; and ICT needs. It has also supported the implementation of these strategies, including financing necessary trainings and ICT equipment. 8. Component 2: Data Production and Dissemination (US$ 56.3 million). The second component focuses on closing the most important statistical gaps in the country by creating statistical monitoring infrastructure. Specifically, this component supports the improvement of the national accounts and price indices both through methodological improvements and through improved survey inputs, including a new economic census (the REMPE collected in 2021). It also establishes a welfare monitoring system, supporting both household income and expenditure surveys (the IDREA 2018-19) and the introduction of a continuous quarterly labor force survey (the IEA). It similarly establishes an agricultural monitoring system, financing Angola’s first agricultural census since the early 1970s (the RAPP) as well as complimentary agricultural surveys – particularly important as the country attempts to diversify away from oil- dependence and invest in agribusiness and fisheries. 9. Component 3: Project implementation support (US$ 2 million). The successful implementation of the project requires a dedicated Project Implementation Unit (PIU) fully staffed and trained. This component also finances the necessary fiduciary measures to ensure effective use of project funds, including external annual auditing and internal quarterly auditing. II. DESCRIPTION OF PROPOSED CHANGES 10. There are three changes being proposed as part of the restructuring of this project: 1) an extension of 9 months, 2) reallocation of funds, and 3) an update to the targets of some PDO and intermediate indicators. The World Bank Angola Statistics Project (P157671) 11. Extension: Due to the restrictions related to the COVID-19 pandemic and a change in leadership in INE in 2020, there were significant delays in the implementation of several key activities, including the RAPP. At the same time, cost overruns incurred during the project mean that it is no longer possible to finance some of the originally planned activities, particularly the second household income and expenditure survey (the IDREA) and agricultural surveys planned to complement the RAPP. It’s important to mention that even considering the lack of these activities, the project is still on track to attain its PDO, and most of the intermediate indicators. These activities will be supported by a future project and are planned to begin in the second half of 2022. In the meantime, the elimination of these two planned activities leaves financing available for an extension of the project that will allow for the continuation of ongoing activities. 12. During the 9-month extension several ongoing activities will be completed or continued while two new activities will be added (Table 1). In particular, the extension of the project allows for the completion of key activities in Component 1.2 [installation of necessary ICT equipment], 1.3 [completion of training plan], 2.1 [completion of REMPE], and 2.3 [completion of RAPP]. It also supports the continuation of survey collection under Component 2.1 [economic surveys supporting the national accounts and price indices] and 2.2 [the labor force survey]. It also supports INE in the preparation for planned surveys scheduled for 2022-2023 – the IDREA 2022-2023 (Components 2.2) and the complementary agricultural surveys (Component 2.3). Each of these activities had already been planned under the original project. The extension also allows for the introduction of two new activities: the collection of phone-based surveys to monitor the impact of the pandemic on households and firms (Component 2.2) and a communication campaign to raise awareness of the importance of responding to INE’s surveys (Component 2.4). Table 1. Activities to be supported during the project extension Component 1: 1.1 - Institutional Reform  Continued support to National Statistics Council regular meetings 1.2 - ICT and Statistical Infrastructure  Delivery and installation of ICT equipment already contracted 1.3 - Human Capacity  Previously planned trainings in Data science, IT, and Project Management  Newly proposed trainings in IT and related software Component 2: 2.1 - National Accounts  Final report and dissemination for the REMPE Statistics  Continue data collection of economic surveys (price, construction, import-export, consumer confidence) 2.2 - Welfare  Continue collection and publication of quarterly labor force survey and indicators Monitoring System  Publish 2020 and 2021 annual labor force reports  Continue technical preparations for IDREA2 (2022-2023)  Implement rapid phone surveys (households and firms) 2.3 - Agricultural  Final report and dissemination for the RAPP Production Monitoring System  Begin technical preparation for complimentary agricultural surveys 2.4 - Analysis and Dissemination  Communications campaign to encourage survey participation Component 3: Project  Extension of staff and consultant support Management  Audits for 2022 (internal and external) The World Bank Angola Statistics Project (P157671) 13. Risks: INE and the World Bank have identified two factors that might constrain the implementation during the project extension. First, 2022 is an election year in Angola. Although the General Elections are scheduled for August 2022, at the end of the project’s extension period, they might generate disruptions in the planned activities. Second, the fact that unforeseen events might occur, for example, a new variant of COVID-19 or a more difficult phase of the pandemic which would imply a new round of curfews or shutdowns. This type of delay could affect the implementation of the remaining activities. To mitigate these risks, the project team will implement the following strategies: (i) close monitoring of the political risks; (ii) continue relying on local field teams that are dispersed throughout the country as they are less likely to be affected by COVID-19 related travel restrictions. It is noteworthy that the project team has been conducting data collection activities throughout the pandemic. Indeed, the quarterly labor force survey was only suspended for three weeks during the initial shutdown. Therefore, it has developed the necessary capacity to carry out activities in such circumstances. 14. Reallocation of funds: The proposed budget in the original project plan proved to be insufficient to support several activities. This, in addition to costs incurred due to the delays in 2020, also require a reallocation of funds from Component 2 to Components 1 and 3. Specifically, a total of $4.1 million, representing 7 percent of the original budget for Component 2, will be reallocated to supplement Components 1 and 3. These are reallocations between components and not disbursement categories. 15. Building on the lessons learned thus far in the project, INE has taken several steps aimed at reducing project costs and increasing efficiency. These include (i) the cancellation of several service provision contracts such as vehicle maintenance, trainings (linked to the RAPP), and consultancies that were considered overvalued; (ii) efforts to establish contacts with suppliers that offer competitive prices; (iii) the standardization of the unit costs of budget items such as coffee breaks, lunches, and dinners, with the objective to increase transparency; (iv) update of all activities in the STEP system; (v) the completion of tenders on STEP, specifically, that of the call center for COVID-19 phone survey; and (vi) the creation of a tool for improving the monitoring of ongoing contracts. 16. Update to Project Indicators: The PDO indicator for this project is a measured increase in the Statistical Capacity Index (SCI) score. Since this indicator includes several dimensions outside the scope of the project, the WB DEC team will estimate the project’s influence on the global score. Four targets from intermediate and PDO indicators were revised due to the reduction of the number of surveys to be collected by this project. Specifically, the revisions to PDO indicators include: (i) the reduction in the number of statistical operations from 8 to 4 due to budget overrun in earlier activities, and (ii) the reduction in the number of INE downloads of microdata from 150 to 100, as a consequence of the reduction of the number of the statistical operations that will be available in the data catalog. The changes to the intermediate indicators include: (i) the reduction in the number of microdata documented and published online from 21 to 8 because of the cancellation of some statistical operations and the exclusion from the indicator of datasets that were not collected under this project, and (ii) the decrease in the number of staff trained from 750 to 600 because some trainings were delayed or canceled because of the COVID-19 pandemic. The World Bank Angola Statistics Project (P157671) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Angola Statistics Project (P157671) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Institutional Reform and Institutional Reform and Capacity 3.50 3.50 Capacity Data Production and Data Production and 56.35 56.35 Dissemination Dissemination Project Management 2.00 Project Management 2.00 TOTAL 61.85 61.85 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-86690 Effective 30-Nov-2021 31-Aug-2022 31-Dec-2022 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 1,004,427.50 1,004,427.50 2018 4,599,262.79 4,599,262.79 2019 7,997,243.48 7,997,243.48 2020 18,500,000.00 18,500,000.00 2021 9,500,000.03 10,000,000.00 2022 1,649,066.24 1,149,066.27 . The World Bank Angola Statistics Project (P157671) . Results framework COUNTRY: Angola Angola Statistics Project Project Development Objectives(s) The PDO is to strengthen the capacity of the National Institute for Statistics to fill data gaps, improve statistical production and enhance statistical dissemination practices. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 Increase the national statistical capacity of Angola Increase in the Statistical Capacity Index (SCI) 42.20 45.60 60.00 score (Percentage) Rationale: Revisions: This target remains the same. There is a change in methodology. The WB DEC who publishes the SCI team will apply an Action: This indicator has been Revised algorithm to estimate the project influence on the global score since some components of the indicator, which are out of control of the project, are not performing well and are affecting the global score. Data gaps on agriculture, welfare, employment and business covered surveys or censuses implemented Number of agriculture, welfare, employment and business surveys or censuses implemented 0.00 5.00 8.00 (Number) Rationale: Action: This indicator has been Revised Revisions: This final target is revised to 8 since 4 statistical operations will not be produced because of the budget overrun situation. The World Bank Angola Statistics Project (P157671) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 Improved national accounts Improved national accounts (Percentage) 0.00 50.00 100.00 Rationale: Action: This indicator has been Revised Revisions: This target remains the same. Increase metadata and microdata dissemination Number of INE downloads of statistical materials 0.00 20.00 110.00 and micro-datasets (Number (Thousand)) Rationale: Action: This indicator has been Revised Revisions: The revised target is 110.00 because there will be fewer statistical operations uploaded in the NADA Catalog PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 Project Management FM and procurement plan complied 0.00 100.00 (Percentage) Data Production and Dissemination Number of published quarterly GDP 0.00 6.00 10.00 statistics (Number) Action: This indicator has been Revised Rationale: The World Bank Angola Statistics Project (P157671) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 Revisions: This target remains the same. Updated intermediate targets. Number of survey and census micro- 0.00 2.00 4.00 8.00 datasets available online (Number) Rationale: Action: This indicator has been Revised Revisions: The revised target is 8 due to fewer data collection operations being completed. Institutional Reform and Capacity Number of statistical reports funded by the project available online, 0.00 4.00 6.00 disaggregated by availability of gendered statistics (Number) Rationale: Action: This indicator has been Revised Revisions: This target remains the same. Updated intermediate targets. The number of staff who have achieved improvements in skill/knowledge compared to a pre-training baseline 0.00 350.00 600.00 (measured by test results and disaggregated by gender) (Number) Rationale: Action: This indicator has been Revised Revisions: The revised target is 600 since some trainings were delayed or cancelled because of the COVID-19 Pandemic. IO Table SPACE The World Bank Angola Statistics Project (P157671) . The World Bank Angola Statistics Project (P157671)