Document o f The World Bank FOR OFFICIAL USE ONLY Report No: 53138-BJ PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT I THE AMOUNT OF SDR 9.7 MILLION N (US$15 M I L L I O N EQUIVALENT) TO THE REPUBLIC OF BENIN FOR AN e-BENIN PROJECT February 26,201 0 Global Information and Communications Technologies Department Africa Region This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective January 3 1, 20 10 Currency Unit = SDR US$ 1.55 = SDRl CFAF470.00 = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AGeNTIC Agence de Gestion des Nouvelles Technologies de l'lnformation et de la Communication (New Information and Communication Technologies Management Agency) ATRPT Transitional Post and Telecommunications Regulatory Authority ARCEP Benin Autorite' de Re'gulation des Communications Electroniques et des Postes du Be'nin (Benin Regulatory Authority o f Electronic Communications and Post) BCEAO Central Bank o f West African States BP Bank Procedures BTSA Benin Telecom SA CAA Caisse Autonome d 'Amortissement (Autonomous Reserve Fund) CAS Country Assistance Strategy CDMA Code Division Multiple Access CPIA Country Policy and Institutional Assessment DFIs Development Financial Institutions DNTIC Direction Nationale des TIC (National Directorat o f ICT) DP Direct Payment FDI Foreign Direct Investment FDUTIC Fonds de De'veloppement Universe1 des TIC (ICT Universal Development Fund) GDP Gross Domestic Product GSM Global System for Mobile Communication ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation ISP Internet service provider IXP Internet Exchange Point MCC Millennium Challenge Corporation MCTIC Ministry o f Communications and ICT MDG Millennium Development Goal M&E Monitoring and Evaluation OD Operational Directives OP Operational Manual 11 FOR OFFICIAL USE ONLY PAD Project Appraisal Document PCU Project Coordination Unit PNGE Plan National sur la Gouvernance Electronique (National Program for Electronic Governance) PPF Project Preparation Facility PPP Public-private partnership PRSP Poverty Reduction Strategy Paper UNPAN United Nations Department o f Economic and Social Affairs and United Nations Public Administration Network US$ United States Dollars WA Withdrawal application WBG World Bank Group Vice President: Obiageli Katryn Ezekwesili Country Director: Madani M. Tall Country Manager Joseph Baah-Dwomoh Sector Director: Mohsen Khalil Sector Manager: Philippe Dongier Task Team Leader Boutheina Guermazi Co- Task Team Leader: Y a m Burtin restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not be otherwise disclosed without W o r l d Bank authorization. BENIN e-Benin Project CONTENTS Page . I STRATEGIC CONTEXT AND RATIONALE .................................................................. 1 A . Country and sector issues .................................................................................................... 1 B. Rationale for World Bank involvement............................................................................... 5 C. Higher-level objectives to which the project contributes .................................................... 6 I1 . PROJECT DESCRIPTION .................................................................................................. 7 A . Lending instrument .............................................................................................................. 7 B. Project development objective and key indicators .............................................................. 7 C . Project components .............................................................................................................. 8 D. Lessons learned and reflected in the project design .......................................................... 10 E. Alternatives considered and reasons for rejection ............................................................. 11 I11 . IMPLEMENTATION ..................................................................................................... 12 A . Partnership arrangements .................................................................................................. 12 B. Institutional and implementation arrangements ................................................................ 12 C. Monitoring and evaluation o f outcomeshesults ................................................................ 13 D. Sustainability ..................................................................................................................... 13 E. Critical risks and possible controversial aspects ............................................................... 14 F. Grant conditions and covenants ......................................................................................... 15 IV . APPRAISAL SUMMARY .............................................................................................. 17 A . Economic and financial analyses.. ..................................................................................... 17 B. Technical analysis .............................................................................................................. 17 C. Fiduciary analysis .............................................................................................................. 18 D. Social analysis ................................................................................................................... 19 E. Environmental analysis ...................................................................................................... 19 F. Safeguard policies .............................................................................................................. 20 G. Policy exceptions and readiness ........................................................................................ 20 Annex 1: Country and Sector o r Program Background .......................................................... 21 iv Annex 2: Major Related Projects Financed by the World Bank and/or other Agencies .....31 Annex 3: Results Framework and Monitoring ......................................................................... 34 Annex 4: Detailed Project Description ...................................................................................... 41 Annex 5: Project Costs ................................................................................................................ 47 Annex 6: Implementation Arrangements.................................................................................. 49 Annex 7: Financial Management and Disbursement Arrangements ..................................... 51 Annex 8: Procurement Arrangements....................................................................................... 64 Annex 9: Economic and Financial Analysis .............................................................................. 73 Annex 10: Safeguard Policy Issues............................................................................................. 75 Annex 11: Project Preparation and Supervision...................................................................... 76 Annex 12: Documents in the Project File .................................................................................. 78 Annex 13: Statement o f Loans and Credits............................................................................... 79 Annex 14: Country at a Glance.................................................................................................. 81 Annex 15: Maps ........................................................................................................................... 84 V BENIN E-BENIN PROJECT PROJECT APPRAISAL DOCUMENT AFRICA CITPO Date: February 26,2010 Team Leader: Boutheina Guermazi Country Director: Madani M. Tall Sectors: Telecommunications (40%); Sector ManagedDirector: Philippe Dongier Information technology (25%); Public administration- Information and communications (20%); General industry and trade sector (1 0%); Postal services (5%) Themes: Infrastructure services for private sector development (30%); Regulation and competition policy (30%); Other public sector governance (20%); Rural services and infrastructure (10%); Small and medium enterprise support (1 0%) Project ID: P113370 Environmental category: C Lending Instrument: Technical Assistance Joint IFC: Grant Joint Level: Project Financing Data [ ]Loan [ ]Credit [XI Grant [ ]Guarantee [ ]Other: For Loans/Credits/Others: Total Bank financing (US$m.): 15.00 Proposed terms: Standard Borrower: Republic o f Benin Cotonou - Benin Responsible Agencies -Ministry o f Communication and New Technologies - Agence de Gestion des Nouvelles Technologies de l'lnformation et de la Communication (A GeNTIC) vi Estimated disbursements (Bank FY/US$m) :Y I 2010 I 2011 I 2012 I 2013 I 2014 I 2015 I innual 0.50 1.50 2.00 3.50 4.00 3.50 hmulative 0.50 2.00 4.00 7.50 11.50 15.00 Expected effectiveness date: July 26, 2010 Expected closing date: June 30,2015 Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO Ref: PAD I.C. Does the project require any exceptions from Bank policies? Ref: PAD I K G . [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [IN0 I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? [ ]Yes [XINO Ref: PAD III. E. Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ] N o Ref: PAD I K G . Project development objective Ref: PAD II.C., Technical Annex 3 The objectives o f the Project are to (i)improve access to lower cost and better quality I C T services, and (ii) enable the development o f e-applications, in the Recipient's territory. Project description [one-sentence summary o each component] Re$ PAD II.D., Technical f Annex 4 The proposed project takes an integrated approach to I C T sector development by looking at three different dimensions: promoting access, enabling applications, and supporting the I C T industry. The three dimensions are closely linked and present a full spectrum o f issues that facilitate ICT- led development. Given that Benin i s in the very early stages o f I C T reform, there i s considerable focus on creating an enabling legal and regulatory framework that improves access to affordable broadband connectivity and fosters quality o f service. This first dimension highlights the need for a platform for e-applications that will run over the network. The project will also focus o n creating legal, institutional, and interoperability frameworks to support e- applications, with a focus on e-government for improved governance. For e-applications to flourish, a local I C T industry capable o f creating electronic content and solutions i s needed. The focus o f the project i s to provide technical assistance to tackle the three priorities in parallel in support o f the Government's vision o f making Benin the "digital corridor o f Africa" and using I C T to facilitate Benin's development into an emerging economy. Specifically, the project will have three components: (i) Creating an enabling environment for improved access to I C T services (ii) Enabling e-applications and promoting e-business (iii) Effective project implementation, monitoring and evaluation, and communication. vii Which safeguard policies are triggered, if any? Re$ PAD I K R , Technical Annex 10 There are no significant environmental issues associated with this project. The project does not involve c i v i l works, but encompasses policy, legal, regulatory, and institution-building activities. The project will support the development o f a data center and a training center to build the capacities o f civil servants regarding e-applications. Neither activity will include construction services as sites have already been identified by the client; they will only involve rehabilitation o f existing sites. The project has been classified as a category C project because o f i t s l o w environmental impact. Significant, non-standard conditions, if any, for: ReJ: PAD III.F. Loadcredit effectiveness: (i) the Subsidiary Agreement has been executed on behalf o f the Recipient and the Project Implementing Entity; (ii) the Recipient has adopted the Project Implementation Manual, in form and substance satisfactory to the Association; (iii) the Recipient has established the PCU within the M C T I C under terms o f conditions, composition and resources satisfactory to the Association (including, recruitment o f a project coordinator, a financial management specialist and a procurement specialist, each under terms o f reference and with qualifications satisfactory to the Association); and (iv) the Project ImplementingEntity has recruited a director or officer responsible for i t s finances under terms o f reference and with qualifications and experience satisfactory to the Association. Covenants applicable to project implementation: (i) the development and implementation o f a computerized accounting system customized to the project (no later than three months after the project goes into effect); (ii) the appointment o f an external auditor with qualifications and experience satisfactory to IDA (no later than four months after effectiveness). viii I. STRATEGIC CONTEXT AND RATIONALE A. Country and sector issues 1. The Republic of Benin's economy: Benin i s a small country located in the Gulf o f Guinea next to Nigeria, with a population o f 8.7 million and a per capita annual income o f US$540. Following economic collapse and a political crisis in 1989, the country moved to a pluralist democracy and free market economy. This resulted in three peaceful democratic transitions in government and enhanced political and social stability over the course o f the period 1996-2008. In addition, the country has undertaken important structural reforms that have helped establish fiscal discipline, opened up the economy, privatized some public enterprises, and improved incentives for the private sector. Most social indicators improved steadily throughout the 1990s, including those for education, health, water supply, rural sanitation, and access to modern energy services. 2. Economic and population growth: GDP growth rates averaged 4.3 percent annually during the period 2001-2008. However, with a population growth rate o f 3 percent per year during the same period, per capita income growth remains well below the Sub-Saharan average and i s insufficient to achieve more inclusive economic growth. As a result, poverty i s s t i l l high, with 33.3 percent o f the population living below the poverty line. 3. Telecommunications and I C T sectors: The Government o f Benin has placed reform o f the Information and Communication Technology (ICT) sector as well as improved access to I C T at the center o f i t s development agenda, as reflected in the 2008 Sector Development Policy. The vision o f the Government i s to convert Benin into the "Digital Capital o f Africa," taking advantage o f the country's privileged location and i t s access to international connectivity. This vision i s an ambitious one for Benin given current constraints in the sector, such as uneven access to communications infrastructure, high prices o f services, a nascent legal regulatory and institutional framework, a shortage o f skilled human resources in regulation and in ICT-specific disciplines, and limited diffusion o f I C T across the Government as well as within the business community. The sector remains underdeveloped and s t i l l not able to contribute fully to the economic and social development o f Benin. 4. Limited access to I C T infrastructure: Access to fixed lines remains very limited in Benin. In December 2007, the number o f main fixed lines in operation was 110,300, representing a fixed teledensity o f 1.30. The cabled portion o f local telephone networks i s saturated, making it impossible to meet demand. Around 30,000 people were s t i l l on the waiting l i s t for wired telephone lines in 2007. In the mobile segment, the number o f subscribers has exploded since 2000, reflecting the very strong appetite o f consumers for mobile telephone services. Less than six months following sector liberalization, Benin joined the ranks o f African countries in which the number o f mobile telephone users exceeded the number o f fixed telephone subscribers. In June 2009, the number of mobile subscriptions reached 3.204 million, representing a mobile density o f 37. However, the increase in teledensity masks a wide discrepancy in access between urban and rural areas. Like many countries in the region, access i s highly concentrated in the capital and major cities, leaving a large percentage o f the population without access to 1 modern communications tools. The number o f broadband Internet (DSL) subscribers remains very limited in Benin and growth in the Internet industry is s t i l l very slow and highly constrained. I t remains a service for use by industry, government, and a privileged few at home. This can be attributed to several factors such as (i) high cost and poor the quality of international bandwidth, especially o f the SAT3/WASC/SAFE system; (ii) the lack of an Internet Exchange Point (IXP) to reduce the cost o f local Internet traffic; (iii) a monopoly structure for access to international capacity; and (iv) limited regulatory capacity to implement fair and equitable access to bandwidth. 5. Sector structure between monopoly and unregulated competition: Despite the introduction o f competition in the mobile and data segments since 2000, there i s only one operator for the fixed line market. Benin Telecom S A (BTSA) has a monopoly on the provision of fixed local access lines and i s reported to be in poor financial condition, which resulted in minimal investment in fixed line services over the past decade. The Government began the process o f privatizing BTSA, with the goal o f finalizing the transaction by early 2010. While the mobile sector i s fully competitive, with five (5) operators, regulation o f competition remains ad hoc and in need o f a well-defined regulatory strategy and well-equipped institutions to enforce the rules o f the game between different players. 6. High prices despite access to SAT-3 cable: Despite having access to SAT-3 Cable, international communications are s t i l l very expensive in Benin as a result o f a monopoly over access to international connectivity. According to data from the International Telecommunication Union (ITU), in 2007, a three-minute call to the USA cost US$4.80, compared to US$2 in low-income groups and an average o f US$2.20 in Sub-Saharan Africa. The high cost o f broadband Internet access, therefore, prevents Benin from reaping the benefits o f the I C T revolution. Business users and private citizens have to pay US$l05 per month for fixed broadband Internet access, while consumers in Senegal and Ghana pay only US$29 and US$64 respectively. 7. T h e postal sector fails to respond to the needs o f business customers: The Beninese postal sector i s organized, as in most countries o f the subregion, around a public operator, La Poste du Be'nin SA, and a few private operators dominating the national and international express mail markets. The postal network i s quite extensive: 74 full-service post offices (which offer all postal and financial products), 82 postal agencies, 32 secondary post office counters, and seven financial centers. I t handles an annual volume o f roughly 8 million pieces o f mail, yet it i s in a precarious situation from both an operational and financial standpoint and fails to respond to the needs o f business customers. 8. Slow adoption o f e-applications: Some o f the constraints facing adoption o f e- applications, including for government activities, are (i) lack o f technical skills in a government; (ii) weak I T infrastructure, including limited penetration o f computers; and (iii)limited public resources to finance e-government. More importantly, the absence o f a robust framework for I C T applications i s preventing Benin from capitalizing on innovative applications to improve service delivery in both the public and private sectors. Benin ranked 15 1 on use o f e-government applications,' according to the' U N P A N Web ' UNPAN Web Measure Index ranking. http://www2.unpan,org/egovkb/datacenter/CountryView,aspx 2 Measure Index, which assesses the progress o f e-government application. Because of a lack o f adequate regulations, the private sector i s neither supported nor organized, while in the public sector, each institution equips itself, develops its own computer network (Intranet), and handles i t s Internet connections with no real coordination at the central level. In terms o f usage, according to a study conducted by the National Institute o f Statistics and Economic Analysis (INSAE) in 2005 (Utilization and Perception o f Information and Communication Technologies in Benin), a substantial proportion o f government departments (27.9 percent) have no computers. There are, o n average, roughly eight computers per department and more than ten agents per computer. In addition, more than 72 percent o f the computers are not connected to the Internet in the departments studied. Lastly, all the ministries have local networks, while interconnection o f the ministries remains a future project. 9. Recent policy framework: In November 2006, the Office o f the President o f the Republic released an interim roadmap for improving, rehabilitating, and revitalizing the I C T sector (ICT Plan - Benin). With World Bank support, a new sector policy in line with international best practices and reflecting the local context in Benin was adopted by the Government in December 2008. This sector policy laid out the strategic objectives and the actions to be taken in the I C T sector in Benin to facilitate the uptake o f the I C T sector and i s consistent with the proposed project. In addition, the Government developed a National Program for Electronic Governance (PNGE) with a clear vision o f using I C T as a tool o f improved governance and transparency and to dynamize the administration. A number o f ad hoc policy instruments are being developed to support e-business. 10. Significant funding and technical assistance i s needed to translate the policy into actions and measurable results. The Government's vision and policy regarding the I C T sector can be depicted as follows (Figure 1): Figure 1. ICT Sector: Government Vision and Policy Vision - Pi Ila rs I Strategies -1 $ 3 11. M a j o r overhaul o f the current legal framework i s needed, and a new legal framework i s in the final stages o f preparation. The legal framework governing the telecommunications and postal sectors i s going through a major overhaul. The current framework dates back to the early 2000s, does not reflect the latest technological and market developments, and does not offer adequate tools to respond to market realities. The lack o f an adequate legal and regulatory framework resulted in major uncertainties for service providers and culminated in a major GSM crisis that shook the sector over the past few years. Operational and functional regulation remains to be put in place to further improve competition (for example, interconnection, numbering, and frequency management). A new legal, regulatory, and institutional framework reflecting ECOWAS directives and U E M O A Additional Acts concerning the sector was prepared and will be submitted to Parliament by March 20 10. 12. T h e institutional framework i s in urgent need o f strengthening. In the telecommunications sector, Benin i s one o f the few countries in Africa without a fully established independent regulator. The regulatory function was first exercised b y the Ministry o f Communications and I C T until 2007 when the Government appointed 10 members o f the Transitional Post and Telecommunications Regulatory Authority (ATRPT) in February 2007. The draft communications law provides for the creation of an independent, self-funded regulatory authority. The immediate challenges facing the Government include moving the sector from the current interim legal framework to the new permanent one and supporting the policy making and regulatory functions o f the sector. 13. A G e N T I C w i l l need to be strengthened before it can become truly operational. The New Information and Communication Technologies Management Agency (AGeNTIC) was recently created by the Government in partnership with the private sector and c i v i l society. Its mission i s to assist and support I C T businesses in Benin (including matters pertaining to the international market for the externalization o f servicedteleservices). In particular, it will help small and medium enterprises (SMEs) involved in I C T with international market exploration and training and will hold delegated contracting authority (charged with preparation, management, and monitoring) for government projects involving ICTs. 14. In summary, despite recent developments, the I C T sector in Benin s t i l l falls short o f achieving i t s development potential and fails to respond to the needs o f consumers, businesses, and government users. Benin ranks relatively l o w on the competiveness index (100 out o f 134 economies) as a result o f a number o f I C T constraints, as summarized in Table 1. 4 Score Rank Availability o f latest technologies 3.8 107 Firm level technology absorption 4.4 88 Laws relating to ICT 3.4 88 F D I and technology transfer 4.2 107 Mobile telephone subscribers 12.1 119 Internet users 1.4 120 Personal computers 0.6 122 Broadband Internet subscribers 0.0 113 B. Rationale for World Bank involvement 15. Government commitment: There i s considerable interest and commitment within the Government to addressing the existing sector constraints and facilitating development o f the sector. The Government o f Benin recognizes the potential o f ICT to enhance competitiveness, facilitate economic diversification, and increase productivity, as well as to improve the efficiency and capability o f institutions, particularly in government. With respect to the active involvement o f the Head o f State and the Government's stated goal o f making Benin the "Digital Capital o f Africa," major initiatives should be undertaken to organize the sector and enhance i t s visibility. 16. The Bank played a key role in supporting government efforts to establish enabling environments for the telecommunications and I C T sectors. The Bank i s actively engaged in the fields o f telecommunications sector reform, e-government, and ICT development in over 80 countries in the developing world. The Bank i s thus well positioned to inform the Government o f Benin about best practices and to discuss the different approaches and lessons learned for policy formulation and I C T initiatives in the Beninese context. In this regard, the Bank has demonstrated i t s ability to mobilize appropriate specialized skills in designing and implementing effective policies for helping countries to make the transition to a knowledge-based economy. 17. Broader sectoral perspective: The Bank i s currently mainstreaming ICT implementation in other sectors considered key to development and to reaching the MDGs. ICT should be carefully integrated as an enabling tool in order to contribute more broadly to growth and poverty reduction in Benin. B y creating an enabling environment for I C T applications, a number o f proposed initiatives in key social sectors including health and education, as well as government initiatives supported by other Bank projects, will benefit from a well-functioning ICT sector. 18. The Bank has already led much of the groundwork on sector policy and reform. Through a combination o f instruments, the Bank supported policy reform, emerging telecom legislation, and sector dialogue in Benin. An Economic and Sector Work (ESW) Report was prepared in 2008 to identify sector constraints and potential areas o f expansion. In addition, the Bank i s already supporting the privatization o f Benin 5 Telecom SA through en existing Private Sector Development (PSD) project-CIGOP. This new operation builds on work already started in the sector and aims to support the Government in completing its ICT reform agenda, promote further competition, and support ICT-led growth. C. Higher-level objectives to which the project contributes 19. B y providing technical assistance to help the Government create an enabling environment for the ICT sector, the proposed e-Benin Project w i l l support the Government in achieving i t s vision and leveraging the sector as a key driver o f growth, competitiveness, and improved governance. An improved and well-functioning ICT sector w i l l play a key role in reinforcing the country's objectives o f diversifying economic growth and increasing competitiveness, and in accelerating private sector-led growth. The project w i l l promote better governance through the use o f I C T to enhance the transparency and accountability o f the public administration and w i l l facilitate Benin's integration into the regional trading system. These goals are compatible with the Government's strategic plans to facilitate Benin's development into an emerging economy. Specifically, the proposed project supports two key pillars o f the Bank's Country Assistance Strategy (CAS) for FY09-12, as detailed below. 20. Strengthening competitiveness and accelerating private sector-led growth (CAS outcome 1): The proposed project w i l l help develop an enabling framework for the I C T sector, a sector with high growth potential that can bring substantial employment, export, and domestic economic efficiency gains to Benin. B y providing support to the development o f a new regulatory authority and providing tools and capacity to facilitate effective regulation o f the telecommunications sector, sector performance w i l l improve, prices w i l l be reduced, and the quality o f service w i l l be enhanced. This w i l l result in improved competitiveness for local f i r m s and businesses by lowering the cost o f doing business. In addition, creation o f a better environment for the sector w i l l encourage private investment and promote a larger role for the private sector. Furthermore, the proposed project w i l l strengthen the capacity o f SMEs to integrate ICT in their activities through e-applications, training programs, and transaction centers. The result w i l l be an increasingly computer- and Internet-literate SME business sector, better positioned to create growth and take on the challenges o f international trade and competition. A 2009 World Bank report found that for every 10 percentage-point increase in high-speed Internet connections, there i s an increase in economic growth o f 1.3 percentage points.2 The same report also identifies the mobile platform as the single most powerful way to reach and deliver public and private services to hundreds o f millions o f people in remote and rural areas across the developing world. 21. Promoting better governance and strengthening institutional capacities (CAS outcome 3). The proposed project will support this goal by providing support to the Government to put in place the building blocks for e-government by enabling legislation and institutional frameworks to facilitate the use o f e-applications. In the long run, this support w i l l contribute to enhancing the efficiency and transparency o f government Information and Communicationsfor Development 2009: Extending Reach and Increasing Impact. 6 operations. In this regard, when the Government engages in electronic processes (for example implementation o f government portals, online applications for business and land registration, e-procurement through online registration and notificatiodpublication o f tender awards, improvement o f online statistics collection and dissemination, and in general, expanding the Web presence o f government services), these applications will be based on sound frameworks that will improve government decision-making processes, lower transaction costs, improve the quality o f documentation and standardization, and limit discretionary actions and the scope for corruption. 11. PROJECT DESCRIPTION A. Lending instrument 22. The lending instrument i s a Technical Assistance Grant. The US$15 million project will be implemented over a five-year period, from 2010 to 2015. B. Project development objective and key indicators 23. The objectives o f the Project are to (i)improve access to lower cost and better quality I C T services, and (ii) enable the development o f e-applications, in the Recipient's territory. 24. In order to achieve these objectives, the project proposes an integrated approach with the following three outputs: (i)improving access to high-quality and affordable I C T services with a primary focus on creating an enabling legal and regulatory framework for the sector; (ii)enabling e-government applications with a primary focus on creating a legal, institutional, and interoperability framework that i s conducive to the use o f e- government applications; and (iii) promoting e-business with a primary focus on institutional strengthening and support to the local I C T industry to improve Benin's competitiveness. Institutional strengthening and the creation o f human capacity to initiate, implement and sustain reforms i s a crosscutting theme under the three different outputs. 25. The project will have the following core sector indicators: (i) improvement o f the ICT sector as a result o f technical assistance under the Project ( scale 1-5); (ii) reduction in the retail price o f internet services (including broadband); (iii) percentage increase o f public/government services which use electronic transactions; and (iv) percentage increase in the number o f small- and medium-sized enterprise in the ICT sector. 7 C. Project components 26. The proposed project takes an integrated approach to I C T sector development by looking at three different dimensions: promoting access, enabling applications, and supporting the ICT industry. The three dimensions are closely linked and present a full spectrum o f issues that facilitate ICT-led development. 27. Given that Benin i s in the very early stages o f I C T reform, there i s considerable focus on creating an enabling legal and regulatory framework that improves access to affordable broadband connectivity and fosters quality o f service. This first dimension highlights the need for a platform for e-applications that w i l l run over the network. The project will also focus on creating legal, institutional, and interoperability frameworks to support e- applications, with a focus on e-government for improved governance. For e- applications to flourish, a local ICT industry capable o f creating electronic content and solutions i s needed. The focus o f the project i s to provide technical assistance to tackle the three priorities in parallel in support o f the Government's vision o f making Benin the "digital corridor o f Africa" and using ICT to facilitate Benin's development into an emerging economy. 28. Specifically, the project will have three components: 0 Creating an enabling environment for improved access to ICT services 0 Enabling e-applications and promoting e-business 0 Effective project implementation, monitoring and evaluation, and communication. Annex 4 provides a detailed description o f the components and activities under the project while a summary i s provided below. 29. Component 1: Creating an enabling environment for improved access to ICT services (US$ 6.2 million): The project will not support direct investment in infrastructure. However, i t w i l l facilitate increased access to ICT services by supporting the Government's efforts to implement the building blocks o f an effective legal, regulatory, and institutional framework to foster competition in the sector and ensure that i t delivers the promise o f improved access. The specific objectives for this component consist o f (i) empowering the regulator and the line ministry; (ii) improving the quality of ICT service; and (iii) lowering the cost o f access to broadband services. Key activities will include (i) sustained government efforts to implement the new legal framework for the sector, focusing on adoption o f secondary legislation and key regulatory instruments; (ii) support for the creation o f ARCEP-Benin and the strengthening o f its human and technical capacity to ensure effective regulation o f the sector through a wide range o f capacity-building initiatives; (iii)enhanced policy-making capacity o f the ministry to further guide sector growth and development; (iv) regulatory support and equipment to improve the quality o f service; (v) policy and regulatory support for the promotion o f affordable high-speed Internet connectivity, including tools to ensure open access to landing stations and submarine, cable capacity; and (vi) policy, strategic, and regulatory support to promote wider access to ICT services, including the possibility o f leveraging the postal network for electronic access. 8 30. Component 2: Enabling e-applications and facilitating uptake o e-business f (US$ 7 million): This component will support the Government's efforts to put in place the building blocks o f a sound environment to enable e-government applications and to support the development o f e-business. Specifically, as regards the e-government subcomponent, the key focus i s the creation o f a legal framework, enterprise architecture (EA), and interoperability standards for e-government applications. The use o f EA as a tool i s important for the coordination o f investments across government agencies and to avoid duplication. By its very nature, EA focuses on the future and can help to radically redesign government processes and programs to achieve organizational goals. The project will create capabilities within the government to adopt EA methodologies in the design and execution o f all e-government applications and programs. Since the use o f EA approaches i s relatively new within the government, an incremental approach to EA will be adopted, starting with smaller initiatives that can demonstrate tangible results. This will help to institute a disciplined approach to leveraging technology to achieve government transformation and progressively build the capacity to use EA as a tool for providing better public services. The project will also create institutional mechanisms and capacities for ensuring the adoption of, and compliance with, interoperability standards. Such standards will ensure that different applications and databases relating to different ministries, departments, and agencies (MDAs) can communicate with each other. This component will also include an assessment o f the most relevant and viable applications to be implemented and support implementation o f one or two successful pilot projects for demonstration purposes. 31. With regard to the e-business subcomponent, the focus o f the project i s to support I C T skills and create new business opportunities for local I C T firms. The project will support the following three main activities: (i) promote the growth o f existing SMEs in the I C T sector and support innovative applications including mobile applications through a capital grant scheme based on a competitive selection p r o c e ~ s ;(ii) ~ promote I C T start-up f i r m s through a business incubator approach that will provide a critical mass o f small I C T businesses with affordable and reliable access to the Internet, office space, training, business support services, and business incubation in a single facility; and (iii) strengthen the capacity o f AGeNTIC to drive and implement the e-business agenda. 32. Component 3: Effective project implementation and M&E (US$1.8 million): The project will support incremental operating costs related to the project implementation unit, which i s about to be established with funding from a Project Preparation Facility (PPF). The project implementation unit will be responsible for project management, procurement, and financial management. This subcomponent will cover the costs o f equipment, vehicles, minor civil works such as office rehabilitation, training, and other operational and maintenance expenditures. I t will also cover the costs o f implementation- related studies. 33. The project will finance the establishment and operation o f a results-based monitoring and evaluation system including maintenance and management o f the management information system and associated training costs. The project will fund The selection process will be consistent with the Development Marketplace approach, which has been adopted by IDA/IFC as a way o f encouraging innovation, entrepreneurship, and job creation. 9 baseline surveys as well as periodic impact assessment surveys during project implementation. The project will also finance communications activities to raise public awareness regarding reform o f the I C T sector and contribute to broader appropriation o f I C T tools among public and private users. D. Lessons learned and reflected in the project design 34. The project draws on lessons learned from previous and ongoing World Bank- financed projects in I C T and from ongoing efforts in countries in similar situations as Benin. Broad global experience in I C T project implementation indicates that I C T project success i s primarily contingent on strong country ownership and a sustained commitment to implementation. The proposed project design has been guided b y the National Policy and i s thus fully owned by the Government. 35. The project proposes an integrated approach for facilitating the growth o f the I C T sector, focusing not only on issues related to access, but also incorporating the first elements needed to enable I C T utilization. Based on international experience, the ideal framework for maximizing the contribution o f I C T to development consists o f public policies that apply to different layers o f the I C T market (infrastructure, applications, and the human dimension). 36. In the I C T sector, where the frontier o f technology i s moving at a rapid pace, it i s advisable to build a degree o f flexibility into project design and supervision to accommodate at least some o f the new applications that may become possible during implementation. 37. Regulatory capacity i s necessary to enable fair competition as problems can and will develop over time-particularly as regards the interconnection and pricing o f noncompetitive services. Building such capacity takes time. At the same time, Benin could benefit from the extensive experience o f other countries in this area. The proposed project focuses on building this capacity in the newly established regulatory authority by using twining arrangements and creating opportunities for peer-to-peer learning from more advanced regulators and the sharing o f experiences. 38. Human capacity development is an important crosscutting theme and i s key to the success o f I C T reform. There i s a considerable focus on ensuring that the project will contribute to building national capacity on regulation, e-government, and e-business to create the capacity to implement and sustain reforms after the project comes to an end. 39. As regards the e-government component, while in the past there was great focus on I T architecture as a self-contained element, the practice has since evolved. I T architecture excludes business architecture, which i s the starting point and most important element o f Enterprise Architecture (EA). In fact, the trend now seems to be that most sustainable EA initiatives will encompass non-IT functions that demonstrate business value b y communicating in the language o f business. 40. Given the complexity o f EA, the focus should be on an incremental approach to EA rather than an all-encompassing one. This experience has recently been validated b y Gartner, which foresees that "strategic planning practices will shift toward the pursuit o f 10 a large portfolio o f smaller strategies, rather than a single grand vision. Thus, EA will move from a traditional, linear `gap closing' approach to one that involves more experimentation, selection, harmonization and execution." 41. A number o f previous e-application initiatives were not very successful in Benin because o f a lack o f interagency coordination, for example implementation o f an e- application to institute a single taxpayer ID system covering customs, commodity, and income taxes, communicated electronically between the port and the tax office, as well as an application for accounting and procurement in different ministries. The proposed project will focus on interagency coordination for the pilot project selected under Component 2 to ensure full buy in from different stakeholders. E. Alternatives considered and reasons for rejection 42. Restricting project scope to telecommunications reform and institutional strengthening: While a large part o f the project i s focused on regulatory reform, i t was felt that it would be a missed opportunity to have a traditional approach to telecommunications reform without introducing elements o f I C T application. B y supporting government implementation o f the enabling foundation for I C T applications, the project will facilitate Benin's journey to I C T development. A rigid approach focusing on telecommunications reform only would further delay Benin's ability to reap the benefits o f digital opportunities, hence the integrated approach o f this project. 43. Increasing the focus on vertical e-government applications: A coherent interoperability framework i s vital for a coordinated and integrated rollout o f e- government services. Standards are needed to provide clear guidelines for achieving interoperability across public administrations with regard to management o f information and have to be elaborated for the technologies involved. The use o f standards can also contribute to making Web services truly citizen-centric, avoiding duplication o f information across agencies and ministries, ensuring record accuracy and integrity, and cutting down the costs o f I C T systems development, maintenance, and operation for the Government. Component 2 o f the project will focus on creating the framework for e- government before engaging in vertical applications. 44. Focusing on I T architecture alone: Concentrating on IT architecture alone i s likely to focus the Government's attention on internal organizational capabilities and processes, whereas the true benefits o f I T are likely to accrue when government organizations start to focus externally on their interdependencies with citizens or businesses. Such an "outside-in" philosophy i s a much better approach and i s more likely to be adopted if the point o f departure i s a business perspective rather than a technological one. 45. Providing funding for infrastructure to improve access to ICE For most developing countries, a major obstacle to the adoption o f I C T remains the lack o f adequate access to I C T infrastructure. A lack o f investment in I C T infrastructure and access networks coupled with inefficient provision o f services are the most important factors undermining the development o f networked economies. In many countries, funding for infrastructure development i s justified in market segments that fail to attract 11 private investment. In this project, there were initial discussions about providing IDA funding as a contribution to the proposed universal access fund. This approach was rejected for fear o f crowding out private investment and because the sector has not benefited yet from a well-developed regulatory framework to test to what extent the private sector i s able to provide universal access. The focus i s then on creating a predictable legal and policy environment. This i s key for improving reliability for investors and restoring their confidence in the ICT sector. 111. IMPLEMENTATION A. Partnership arrangements 46. The Ministry o f Communications and ICT (MCTIC) in Benin has played a leading role in shaping the e-Benin Project. The World Bank team has continued to work extensively with a dedicated team from MCTIC to discuss project design, preparatory work, and requisite capacity within the ministry. 47. The project w i l l also build on reform measures undertaken with the support o f ECOWAS and ITU related to harmonization o f Benin's legal framework with ECOWAS Directives. Under this support, funded by the German Technical Corporation (GTZ), a new law was developed. The project w i l l support implementation o f the law through adoption o f secondary legislation and related regulatory instruments. 48. In addition, it i s expected that the African Development Bank w i l l provide assistance to Benin in other areas o f the project. The possibility o f collaboration with InfoDev i s also envisaged for the e-business component o f the project through the incubator program. 49. Millennium Challenge Corporation i s lending support to the Government o f Benin by funding a business registration project to connect all business registrars in the country. 50. Benin signed a recent cooperation agreement with the Government o f India related to e-applications that w i l l include (i)provision o f technical and material support to contribute to the creation o f a center o f excellence to train government officials on ICT tools and (ii) provision o f technical assistance and possible funding for a technology parWcyber city in Cotonou. The proposed Bank intervention will complement activities funded through this bilateral cooperation, ensuring complementarity o f interventions. B. Institutional and implementation arrangements 51. The project w i l l be implemented under the aegis o f MCTIC. A project Coordination Unit (PCU) w i l l be established within MCTIC and w i l l be responsible for the overall coordination, implementation, and supervision o f the project. The PCU w i l l be headed by a Project Manager who w i l l report to the Chief o f staff in the ministry. The PCU w i l l be assisted by a project team composed o f representatives from ARCEP and the MCICT on issues related to Component 1, representatives from the De'l&gution tr 1 'informutique for the e-government subcomponent, and a representative from AGeNTIC 12 for activities under the e-business subcomponent. All institutions identified will be supported by the proposed project, with a particular focus on building their capacity to implement reforms. 52. The Project Coordination Unit will be in charge o f (i) day-to-day activities under the project, in particular accounting, procurement, financial management, and monitoring activities; (ii) coordination with the other entities responsible for project implementation; (iii) preparation o f annual work programs, budgets, and procurement plans under the project; (v) dissemination o f internal and external audit reports; and (vi) implementation o f their recommendations. 53. AGeNTIC will take full responsibility for the e-business subcomponent o f the project, including coordination o f activities related to the innovative applications matching grant. AGeNTIC will obtain additional technical support through the project to serve as the Matching Grant Manager and will be charged with ensuring that implementation requirements are met. Implementation will be guided by a Grant Procedures Manual that will be incorporated into the Project Implementation Manual. C. Monitoring and evaluation o f outcomes/results 54. Monitoring and evaluation (M&E) o f the e-Benin Project will be embedded in the various components o f the project, and technical assistance provided through the project will include support for M&E. The information required to monitor and evaluate progress o f the project will be maintained by the PCU at the central level and collected by the different focal points at the activity and component levels. Information and data will be provided by ARCEP-Benin, MCTIC , existing operators where relevant, and national entities in charge o f collecting economic and demographic data. Over the course o f the project, ARCEP-Benin, AGeNTIC, and the De'lkgation tr 1 'Informatique will develop their capacity to collect and analyze information going forward. Specific targets are provided in Annex 3. D. Sustainability 55. The sustainability o f project benefits will depend on a number o f factors, including the commitment o f policy makers to putting I C T reform at the forefront o f the development agenda; the ability to create effective competition in the telecommunications industry in order to keep prices low; and the ability to implement e- applications successfully and to increase e-business. 56. O n the policy front, the Government o f Benin i s very committed to the project and continues to emphasize the aim o f placing I C T at the center o f i t s new growth strategy, as clearly demonstrated in i t s I C T policy. Additional commitment to teleco-imunications- reform i s clear in the Go;e&ent's effort to adopt a new telecommunications law and i t s approach to resolving the GSM crisis and adopt new mirror licenses to all operators to create a level playing field among operators. 13 57. Support for legal and regulatory reform i s expected to have a sustainable impact. Given that a number o f private operators already exist in the market and that there i s potential for additional players beyond the wireless sector, i t i s likely that the regulatory authority w i l l have sufficient resources and capacity through license and regulatory fees to become a self-funded institution and sustain the required regulatory capacity to supervise sector development. 58. Improved service coverage and quality at more competitive prices will be sustained as private investment i s likely to grow as a result o f an effective regulatory environment. In addition, the measures proposed to provide universal access to remote areas w i l l ensure that benefits are not only restricted to the urban population. 59. The project w i l l make significant investments in capacity-building efforts through training and technical assistance to build technical expertise, social capital, and knowledge. With the focus on building sustainable capacity in key institutions such as ARCEP-Benin, AGeNTIC, and the De'lkgation a 1 'informatique, the benefits o f the project are expected to last far beyond project completion as such capacity w i l l support the creation o f ICT policy and regulatory know-how to guide sector growth and applications in the future. E. Critical risks and possible controversial aspects Main risks Rating Mitigation measures Residual risk Delavs in enactment S There i s pressure from regional organizations ( ECOWAS and M o f enabling legal UEMEOA) for harmonization o f telecom laws in member framework countries. The preparation o f the new law i s part o f this harmonization process. Other Donors ( ECOWAS and ITU with funding from G T Z are funding this exercise). In addition support would be available to meet with Members o f Parliament to present the law and discuss importance o f enabling legislation for sector reform. This activity w i l l be organized in collaboration with ECOWAS. Slow transition from S The PPF w i l l support the effective establishment o f the permanent M the interim regulator regulator. to the new regulatory Targeted assistance was started under the old regime to provide authority and a lack o f capacity-building assistance to ensure a smooth transition and build confidence o f private the capacity o f the new entity to carry out activities. players in the competence o f the new regulator 14 Main risks Rating Mitigation measures Residual risk (cont'd) (cont'd) (cont 'd) (cont 'd) Impediments to S Recently, BTSA offered access to the international submarine cable M gaining access to (SAT3) to neighboringcountries (Nigeria, Togo, Niger and Burkina international capacity Faso) and other operators in the sector. at competitive prices The first component o f the project will focus on promoting affordable high-speed Internet connectivity through a strategy and regulatory tools that ensure open access to the landing station and submarine cables, and an IXP). It i s expected that new submarine cables will be laid soon (Glol in 2009, WACS in 2010). Even if Benin does not have direct access to the cables, the existing regional infrastructurecould be used to put additional pressure on BTSA in order to offer international bandwidth'at a competitive price. Benin Telecom SA S Through en existing Private Sector Development project (CIGOP), M (BTSA) remains a the Government h& engaged a Transaction Adviser to privatize public entity in a BTSA. The recently adopted ICT Policy highlights the aim of the private sector-led Government to step out o f operations and focus on policy. industry Leadership, S The project will focus on a few flagship applications for which M implementation country support and commitment have been secured. capacity, and sustainability o f the e- Also, in accordance with the ICT Policy, the Presidency will government agenda oversee the program and dedicated institutions will provide support (AGeNTIC, which will focus on the establishment of public-private partnerships and la De'le'gation6 1 'Informatique, which will focus on training). Both institutions identified will also be supported by the oroiect. Uncertainty over e- A detailed competitiveness and opportunities study will be M business potential carried out to complement analysis of the feasibility o f the incubator program. Resistance to Awareness-building and training components are built into M institutional the project to illustrate the benefits of making adequate changes in business process changes. processes Risks o f a change in The project will increase communications with key stakeholders M government/transition (operators, private users, corporate users, etc.) in order to increase to a newly elected awareness o f the project and its proposed outcomes and seek administration and widespread commitment to the reform program and ongoing continuation o f policy support for the project. and reform agenda Overall Risk M Risk Rating: H = High, S = Substantial, M = Moderate, L = Low, N = Negligible. F. Grant conditions and covenants 60. Condition of Effectiveness (i) the Subsidiary Agreement has been executed on behalf o f the Recipient and the Project Implementing Entity; 15 (ii) the Recipient has adopted the Project Implementation Manual, in form and substance satisfactory to the Association4; (iii) the Recipient has established the P C U within the M C T I C under terms o f reference, composition and resources satisfactory to the Association (including, recruitment o f a project coordinator, a financial management specialist and a procurement specialist, each under terms o f reference and with qualifications satisfactory to the Association); and (iv) the Project Implementing Entity has recruited a director or officer responsible for i t s finances under terms o f reference and with qualifications and experience satisfactory to the Association. 61. Other Covenants: (i) The development and implementation o f a computerized accounting system customized to the project (no later than three months after the project goes into effect). (ii) The appointment o f an external auditor with qualifications and experience satisfactory to IDA (no later than four months after effectiveness). As Defined in the Financial agreement, the P I M contains arrangements and procedures for: (i) f institutional coordination and day-to-day execution o the Project; (ii) disbursement and financial management; (iii) procurement: (iv) environmental and social impact screening guidelines; (v) a Matching Grants manual defining eligibility criteria and approval, disbursement, administration and monitoring arrangements for Subprojects together with a model Matching Grant Agreement format; (vi) monitoring, evaluation, reporting and communication; and (vii) such other administrative, financial, technical and organizational arrangements and procedures as shall be requiredfor the Project. 16 IV. APPRAISAL SUMMARY A. Economic and financial analyses 62. There i s strong evidence that I C T development can contribute significantly to Benin's economic growth by generating more income for the Government and additional employment opportunities. In addition, I C T can enhance Benin's service export potential by operating as a platform for trading business services. I C T can play a critical role in improving the productivity and efficiency o f the private sector, leading to better services and lower costs. The significance o f I C T as a critical engine for productivity and growth i s increasingly recognized. Research indicates that countries that have a 10 percent higher telephone penetration rate over the long run are likely to register 0.6 ercent higher annual growth in GDP than would otherwise be the case. The World Bank found P that for every 10 percentage-point increase in high-speed Internet connections, there i s an increase in economic growth o f 1.3 percentage points. There i s also evidence that higher rates o f I C T penetration are associated with great levels o f exports. At the company level, there are indications that f i r m s that invest more in I C T have higher levels o f productivity and are more profitable. 63. The e-applications component o f this project has a positive impact on government efficiency and broad economic benefits, including reduced transaction time and costs, transparency, increased participation and competitiveness by SMEs, and diffusion of business practices. Support to e-business will strengthen the local I C T industry in Benin, which, in turn, will help generate more economic output, attract foreign investment, energize exports, and create more employment for the local population. 64. Calculation o f the financial rate o f return and economic rate o f return i s not applicable for this project where most o f the resources will fund technical assistance activities. B. Technical analysis 65. Technical design o f the project reflects lessons learned in the sector and international best practices. For most developing countries, a major obstacle to the uptake o f I C T remains the lack o f adequate access to I C T infrastructure. A lack o f investment in I C T infrastructure and access networks, coupled with inefficient provision o f services, are the most important factors undermining the development o f networked economies. The main lesson derived i s that success i s mainly market driven. Creating a predictable legal and policy environment i s key to improving investor confidence and restoring trust in the I C T sector. The focus o f the project i s to assist the ministry and the regulator with implementation o f an investment-friendly framework. The project will establish an enabling institutional and regulatory environment to help attract and sustain investment in the telecommunications sector. ' Information and Communicationsfor Development 2009: Extending Reach and Increasing Impact. 17 66. The telecommunications and I T sectors are highly dynamic, characterized b y a high rate of innovation, both with regard to technologies and to business models. Technology choices will be market driven, allowing for cost reductions and greater affordability for users. 67. A key technical feature o f the project i s the introduction o f an I T architecture and interoperability framework for e-government transactions. The framework will cover business transformation, technical standards, semantics, and organizational interoperability, with an emphasis on flexibility, modular design, functionality, and support. 68. The overall technical viability o f the project i s closely associated with the ability o f the different agencies to handle the technical aspects o f regulatory reform and e- applications. To minimize technical difficulties, advisors will be hired under the project to support M C T I C and the regulator. In addition, an important skills subcomponent i s included in the project to help train and retain I T professionals to encourage the uptake o f e-business. C. Fiduciary analysis 69. A Project Preparation Facility (PPF) advance has been extended by the World Bank from the proposed IDA grant upon the request o f the Beninese Government. The advance will be used to finance critical activities needed to complete project preparation and expedite the launch o f implementation activities. 70. A financial assessment had been conducted o f the PCU to be established within the Benin Ministry o f Communications and I C T (MCTIC) and o f AGeNTIC,G which are in charge o f the implementation o f the e-business component o f the project. The assessment shows that the capacities o f M C T I C and AGeNTIC must be improved in order to satisfy the World Bank's minimum requirements and provide, with reasonable assurance, accurate and timely information on the status o f the project. The overall financial management (FM) risks o f these entities have been rated as "substantial." After implementation o f the main mitigation measures, which are expected to be completed before the project becomes effective given the availability o f the PPF, the degree o f risk should be "moderate." The actions to be implemented to strengthen the financial management systems are outlined in the Financial Management Action Plan (Annex 7). These actions include inter alia (i) adoption o f the Project Implementation Manual, the which specifies acceptable financial and accounting procedures and e-business implementation and FM activities to be conducted b y AGeNTIC; and (ii)and the recruitment o f qualified FM staff for the PCU and AGeNTIC. 71. In Benin, the operational National Procurement's tender Board, the National Committee o f Public Procurement Regulation, and the Ministries Procurement Control Units were established. The new procurement code was promulgated. The civil society's entities are active in denunciation and the bidders are using usually the recourse opportunities. Nevertheless, the use o f single source and shopping are s t i l l the Agence de Gestion des Nouvelles Technologies de 1'Information et de la Communication 18 predominant procurement methods used in public procurement and there i s a lack of standards bidding documents. 72. The procurement capacity assessment shows that neither Ministry o f Communications nor AGeNTIC have qualified staff to handle adequately the project procurement activities. The PCU, under the Ministry will be responsible for the overall procurement activities, but AGeNTIC w i l l responsive for procurement activities under the e-business sub component o f the project. The main risks are mis-procurement due to the lack o f procurement staff experimented with Bank's procurement procedures and the use o f discriminatory criteria or inappropriate bids evaluation system. The appropriate measures recommended to minimize the risks are (i) recruitment o f a procurement officer, (ii) nomination o f a procurement focal point by AGeNTIC, (iii)using bidding document prior approved by the Bank, and (iv) the use o f internal control process that w i l l be specified in the procurement section o f the PCU Administrative, Financial and Accounting Manual. The procurement risk i s rated as moderate. 73. Procurement would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004, revised October 2006. Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15,2006 shall apply to the project. D. Social analysis 74. The main social impacts o f the project are the increased possibility o f better access to ICT services for the population and improved government service delivery. The project w i l l (i) enable ICT to become a driver for sustainable economic growth; (ii) enable the Government to use ICT to provide decentralized services; (iii) improve access and quality o f ICT services for the population, businesses, and the Government; (iv) reduce isolation and enhance economic activities in rural areas; and (v) create additional opportunities for women entrepreneurs to own ICT-related SMEs. There are no resettlement issues or other potentially negative social issues associated with the project. E. Environmental analysis 75. There are no significant environmental issues associated with this project. The project does not involve civil works, but encompasses policy, legal, regulatory, and institution-building activities. The project will support the development o f a data center and a training center to build the capacities o f civil servants regarding e-applications. Neither activity w i l l include construction services as sites have already been identified by the client; they w i l l only involve rehabilitation o f existing sites. The project has been classified as a category C project because o f its low environmental impact. 19 F. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.0 1) 11 Natural Habitats (OP/BP 4.04) [I Pest Management (OP 4.09) [I Physical Cultural Resources (OP/BP 4.1 1) [I Involuntary Resettlement (OP/BP 4.12) [I Indigenous Peoples (OP/BP 4.10) [I Forests (OP/BP 4.36) [I Safety o f Dams (OP/BP 4.37) [I Projects in Disputed Areas (OP/BP 7.60) [I Projects on International Waterways (OP/BP 7.50) [I G. Policy exceptions and readiness 76. No policy exceptions are anticipated,The project i s ready for implementation. ' By supporting the proposedproject, the Bank does not intend to prejudice the final determination o the parties' f claims on the disputed areas 20 Annex 1: Country and Sector or Program Background BENIN: e-Benin Project 1. The Government o f Benin has placed reform o f the ICT sector as well as improved access to Information and Communication Technology (ICT) at the center of i t s development agenda, as reflected in the 2008 Sector Development Policy. The vision o f the Government i s to convert Benin into the "Digital Capital o f Africa," taking advantage o f Benin's privileged location and i t s access to international connectivity. This vision i s an ambitious one for Benin given current constraints in the sector, which include uneven access to communications infrastructure; a nascent legal regulatory and institutional framework; a shortage o f skilled human resources in regulation and in ICT- specific disciplines; and limited diffusion o f ICT within the Government and the business community. The sector remains underdeveloped and s t i l l not able to contribute fully to the economic and social development o f Benin. I.Limited Access to ICT infrastructure: 2. Fixed-line infrastructure i s very limited in Benin. - The total number o f subscribers was 110,254 as o f December 3 1, 2007, o f which 69,802 were on the fixed network, 38,265 on the C D M A wireless local loop, and 2,187 on the AMPS fixed cellular network. - A t the national level, digitization o f transmission lines stands at 100 percent. - The local networks o f Cotonou, Porto-Novo, Parakou, Abomey, and Bohicon were built to international standards, but are now nearly saturated. To solve this problem, on July 31, 2007, BTSA implemented the C D M A wireless local loop system, which made i t possible to increase the number o f fixed subscribers. - Rural telephone service remains largely undeveloped despite the deployment of VSAT equipment by BTSA. - The official waiting period for obtaining a fixed line i s 3.5 years. 3. Figure 2, the breakdown o f fixed teledensity in 2007 shows that, based on BTSA statistics, major efforts w i l l s t i l l be required to guarantee universal access in all geographic zones o f the country. 21 Figure 2 - Breakdown of fixed teledensity BREAKDOWN OF TELEDENSITY IATIONAL TOTAL 7 1 1 ~ LlrrORAL MONO OUEME PLATEAU zou 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 4. International communications are transmitted by access to the SAT3 underwater cable and b y Intelsat satellite earth stations. Benin recently increased i t s capacity on the SAT3 cable to reach a bandwidth o f one STM64 in mid-2008 and thereby position itself, in view o f i t s surplus capacity, as a reseller o f capacity to bordering countries. In fact, in May 2005, Nigeria invested in an alternative connection to SAT3 in order to improve the quality o f service b y using land routes to connect to the Cotonou landing station (the Lagos traffic passing through Cotonou i s estimated at 3 STMl + 2 STMl on a trial basis). Benin also provides capacity to Burkina Faso, Togo, and Niger and i s reportedly in discussions with Mali. To that end, Benin has developed four fiber-optic transmission lines: Cotonou-Parakou-Mallanville (Niger border), Parakou-Porga (Burkina Faso border), Cotonou-Hilacondji (Togo border), and Cotonou-Igolo (Nigeria border). In the country's interior, BTSA i s also a provider o f bandwidth not only for mobile operators (who are gradually abandoning their FH connections), but also to large Internet access providers such as OTI, Pharaon, and Isocell. 5. Benin Telecom SA i s the sole provider o f fixed services in the country. The company also offers mobile telephone services (Libercom), low- and high-bandwidth Internet services (BeninNet), and prepaid telephone cards, V S A T services, and capacity services. 6. B T S A faces management and liquidity problems, with debts o f close to CFAF 17 billion, which prompted the Government to consider a restructuring plan in 2006. The company's difficulties stem from the enormous success o f mobile telephone service, coupled with the dilapidated condition and inefficiency o f the fixed network. The ability 22 o f BTSA to meet coming challenges will thus depend largely on the Government's capacity to restructure the historical operator. 7. In 1999, when the market was opened to competition, the Government awarded two G S M 900 mobile licenses through competitive bidding to private operators, following a "beauty contest" procedure capped by payment o f a "symbolic" fee for this type o f license (CFAF 112 million per license). These two private operators (Telecel Benin and Spacetel Benin) and the mobile affiliate o f OPT, Libercom, which also received a mobile license, then began to market their services. 8. Since 2000, the number o f subscribers has exploded, reflecting the very strong appetite o f consumers for mobile telephone services. Less than six months following liberalization o f the sector, Benin joined the ranks o f African countries in which the number o f mobile telephone users exceeded the number o f fixed telephone subscribers. A fourth license was granted to Bell Benin Communications, which launched i t s network in December 2003. 9. Subsequent to the sector's rapid evolution, the Government entered into negotiations on two occasions with mobile operators in order to obtain financial compensation reflecting the average price o f licenses granted in the subregion (an increase to approximately CFAF 5 billion per license in 2004, and then CFAF 30 billion per license in 2007). 10. All the operators offer coverage in the southern part o f the country and around the cities o f Cotonou and Porto-Novo, while coverage in the country's interior i s variable. Table 2 below provides an overview o f the estimated coverage o f mobile networks in Benin and illustrates the breakdown of-and great disparity between- network coverage in urban and rural areas. Table 2. Type of population covered by GSM operators in Benin (YO) 2000 2001 2002 2003 2004 2005 2006 Percentage o f total population covered by 24.8% 37.3% 85.9% 41.2% 41.4% 42.1% 42.6%* GSM networks Percentage o f rural population covered by 5.9% 17.0% 21.1% 21.3% 21.6% 22.6% 23.4%* GSM networks Percentage o f urban population covered by 58.8% 73.7% 75.5% 76.7% 76.9% 76.9% 76.9%* GSM networks Source: AICD (*third quarter o 2006) f These data attest not only to the robust demand for mobile telephone services (roughly 24 mobile lines per 100 inhabitants at the end o f 2007), but also to the vitality o f competition in this sector. In addition to penetration rates that are among the highest in the region, Benin has a relatively l o w coefficient o f concentration, reflecting the balance o f forces and stabilization o f competition in this market. 23 Table 3. Mobile penetration (2008 estimates) 12.1% 19.3% 29.4% 34.6% Source: Wirelessintelligence 3/31/2002 11. Benin was connected to the Internet in November 1995, and the first connections were made available to the general public in February 1996. Initially, the international link had a capacity o f 65kb/s (via France Radio & Cables) and was later upgraded to 128kb/s with the assistance o f the Leland Initiative o f USAID. B y 2002, the country's bandwidth had reached 2Mb/s. Following an upgrade o f the national Internet gateway, OPT allowed private Internet access providers to be connected to this gateway and provide services to the general public. 12. Public access to the Internet i s increasing as a result o f the proliferation o f cybercafds. More than 200 o f these centers may be in operation today, most o f them held by small actors who possess just one computer and one telephone line. Eighty percent o f these centers are located in Cotonou (service in rural areas remains very limited). 13. BTSA and several other private service providers offer Internet access either by switched telephone network (RTC), by wireless local loop (BLR), by satellite, or by ADSL, one o f the latest technologies implemented by Benin Telecom SA. At the end o f December 2007, there were 1,091 R T C subscribers, 2,006 A D S L subscribers, and 21 specialized digital subscriber lines. The number o f users was estimated at 165,000 in 2006, or 2.14 percent o f the population. Three private enterprises are working in partnership with Benin Telecom SA to provide the ADSL connection. Table 4. Projected number of Internet users, 2010 - 2015 Year Conservative Optimistic Scenario Scenario 2010 500,000 1,370,000 2015 1,075,000 2,73 5,000 Source: BuddeComm forecasts 14. BTSA launched ADSL services in 2004 and then, in April 2005, offered to provide wholesale ADSL reselling services to two companies (Pharaon Telecom and OIT) with a bandwidth o f 10Mb/s each. After only one month o f operation, one o f these companies (Pharaon Telecom) already had 200 consumers, o f which 60 percent were businesses. Pharaon estimated at that time that i t s potential customer base was on the order o f 60,000 subscribers. Through December 2006, these two alternative suppliers had between them a subscriber pool of more than 900 customers. 24 15. At a monthly cost o f approximately US$153 for rates o f 256/128kb/s (downstreamhpstream), the price was relatively expensive, but lower than the prices offered by BTSA. In 2007, the prices declined sharply for residential customers, with offers in the vicinity o f US$35 (128/64kb/s) per month. The two ADSL resellers were also authorized to sell voice over I P (VoIP) telephone services, thereby giving a very strong boost to demand from consumers. 16. The Beninese postal sector i s unable to meet the needs o f business customers. It i s organized, as in most countries o f the sub-region, around a public operator, the Benin Postal Service, and a few private operators who dominate the national and international express mail industry. While the latter focus their services on a clientele composed o f businesses and large-volume mailers (large billers such as telecommunications, water, and power companies, as well as banks and government agencies), primarily serving Cotonou and urban centers, the Benin Postal Service carries and distributes mail throughout the country and, for lack o f the ability to adapt its supply o f services to the new needs o f business customers, focuses on mail for private citizens, with operating procedures that are typically manual and disconnected from the markets it serves. 17. With 650 employees, the Benin Postal Service possesses a network composed of 74 full-service post offices (which offer all postal and financial products), 82 postal agencies, 32 secondary post office counters, and seven financial centers. I t handles an annual volume o f roughly 8 million pieces o f mail, but i s in a precarious situation from both an operational and financial standpoint. From an operational point o f view, many years o f underinvestment have resulted in a decline in the quality o f service, which in turn has led to loss o f market share to the benefit o f the competition (including competitors from the informal sector). From a financial standpoint, the Benin Postal Service i s in a situation o f a structural deficit, which can only be resolved by an ambitious recovery plan spread over a number o f years. The situation o f the Beninese postal public operator i s very similar to that o f most other operators in the sub-region. 11. A nascent legal and regulatory framework and weak institutional framework 18. In November 2006, the Office o f the President o f the Republic released an interim roadmap for improving, rehabilitating, and revitalizing the I C T sector (ICT Plan - Benin). With World Bank support, a new sector policy in line with international best practices and reflecting the local context in Benin was adopted by the Government in December 2008. This sector policy lays out the strategic objectives and the actions to be taken in the I C T sector in Benin to facilitate the uptake o f the I C T sector and i s consistent with the proposed project. Significant funding and technical assistance support i s needed to translate the policy into actions and measurable results. 19. The legal framework governing the telecommunications and postal sectors i s going through a major overhaul. The current framework dates back to the early 2000s and does not reflect the latest technological and market developments. It, therefore, does not offer adequate tools to respond to market realities. The 1992 law gave OPT a monopoly in this sector, and in the absence o f an independent regulatory authority, this role f e l l to the supervisory minister. 25 20. Orders 2002-002 and 2002-003 o f January 3 1,2002, amplified by Decree 2003 o f December 1, 2003, laid out the foundations o f the new legal framework for the telecommunications sector. Faced with subsequent developments in the sector and the expectations o f public and private operators, it appeared that the framework was lacking. Therefore, the Government appointed the 10 members o f the Transitional Post and Telecommunications Regulatory Authority (ATRPT) in February 2007 to fulfill regulatory functions.' 21. The lack o f an adequate legal and regulatory framework resulted in major uncertainties for service providers and culminated in a major GSM crisis that shook the sector over the past few years. In addition, a number o f regulatory constraints continue to prevent the sector from further growth and development. 22. During 2007, the Government o f Benin embarked on a number o f reforms to restructure the telecommunications sector, including (i) reassessment o f the conditions for granting licenses to private operators; (ii) reassessment o f the interconnection agreements and, more broadly, all contracts linking private operators to the historical operator; (iii)collection o f new financial consideration for holders o f licenses to install and operate mobile telecommunications services; and (iv) review o f all licenses and authorizations for operators and service providers. 23. Under this initiative, the Government considered the following to be illegal: e All VSAT operators, except for private networks offering services to the public; e GSM operators that have either direct interconnection among themselves or their own international gateway;' and a All WiFi, WiMax, and VoIP services and most prepaid telephone cards. 24. Following suspension o f the Areeba (MTN) and Moov (Telecel) licenses on July 13, 2007, the Government, ATRPT, and the private operators involved continued their negotiations to resolve a crisis that significantly affected the economy and the Beninese people (the two suspended operators had some 950,000 active customers who were unable to switch to other still-operational networks because o f the latter's limited additional capacity). 25. ATRPT issued an announcement o f competitive bidding on August 3, 2007 for a GSM mobile license, which resulted in the Government granting a GSM license to Globacom (Nigeria) on August 10, 2007 for CFAF 33 billion. This new license runs for 10 years and i s subject to numerous provisions designed to improve investment A decree was issued subsequently to specify the role o f ATRPT-Decree 2007-209 o f M a y 10, 2007 establishing the formation, terms o f reference, organizational structure, and operations o f the Transitional Post and Telecommunications Regulatory Authority. 9 In such a context, all operators found themselves obligated t o route their traffic to Benin Telecom SA. 26 conditions in the sector." Subsequently, the other operators signed their new licenses on September 6,2007 (Telecel/Moov) and September 14,2007 (MTN/ Areeba). 26. Ultimately, as a result o f negotiations mindful o f the objectives and interests o f all parties, the outcome o f the GSM crisis should make it possible to give all mobile operators similar licenses and terms and conditions or, in other words, offer a level playing field in line with international best practices (that is, the opportunity for international access, direct interconnections between operators, tax and customs advantages, etc.). 27. Despite undeniable advances in the mobile telephone market, a number o f questions concerning operational and functional regulation and competition are s t i l l preventing the sector from reaching i t s full potential. For example, until recently, there was no direct interconnection between mobile operators and all traffic was required to pass through the historical operator, which collected a fee o f CFAF 10 for this service. The net call termination price o f this transit fee was CFAF 25, making Benin the country with the lowest interconnection rates in the region, as shown in the following table. 28. Although the indirect interconnection system has been abandoned theoretically since March 2008, a number o f problems remain with respect to implementation o f the new interconnection protocols (as in the case o f the entry o f new operators, Globacom or Moov). More generally, setting up the direct interconnection remains a problem from an operational standpoint. loSuch provisions include the following, among others: customs duty exemption for three years, sector fees lowered from 6 to 4 percent, free colocation with BTSA for the first year of operations, staggered total payment for the license. 27 Table 5. Interconnection Rates in West Africa ;1 Rate: CFAF/minute Country Operators (net o f taxes) ~~~~~M Benin Libercom 25 Telecel 25 Celtel Burkina Faso Telmob 50 Telecel Orange CGte d'Ivoire Telecel 57 Comstar Guinea- 44.75 Bissau Orange Mali Mali 78.3 Malitel Celtel Niger Sahelcom 40 Telecel Orange Senegal 50 Sentel Togo Sources: Operators 29. With regard to international connectivity, although the monopoly over international traffic has been lifted and operators can have their own CTI, discussions have been initiated between the Government and operators concerning taxation o f incoming minutes by the former, I t i s nevertheless true that international best practices do not recommend the imposition o f a tax on incoming international traffic b y public authorities. To do so would appear to go against the Government's objective o f reducing telecommunications and I C T rates for the public and for all businesses, since any tax would be passed on to end users in one way or another and would place operators in a situation o f unfair competition with foreign operators, who would then pass this increase along to traffic exiting Benin and entering their own network. The absence o f an interconnection system i s likely to have negative consequences for market development. Operators in particular are calling for the development and implementation o f such a system through guidelines. From an operational standpoint, the creation o f an interconnection and access committee, periodically bringing together all operators and the regulator, could make the market more fluid, a move that i s also sought by the various market actors. 30. Frequencies and numeration are rare resources, and the absence o f any real centralized management in this area has been identified by mobile operators as an impediment to market development. The absence o f a centralized, computerized database 28 hinders effective and equitable oversight (in accordance with the concept o f a level playing field) o f the way in which frequency bands are assigned to different actors. With respect to numeration, i t i s important to clarify the procedures for awarding blocks o f numbers, particularly the "AB" blocks, insofar as some operators are likely to exceed the threshold o f one million subscribers in the coming months. From this standpoint, it i s also important to ensure compliance with the requirements and equal treatment o f the different operators. 31. Benin i s one o f the few countries in Africa without a fully established independent regulator in the telecommunications sector. The regulatory function was first exercised by the Ministry o f Communications and ICT until February 2007 when the Government appointed 10 members o f the Transitional Post and Telecommunications Regulatory Authority (ATRPT). The draft communications law provides for the creation o f an independent, self-funded regulatory authority. The immediate challenges facing the Government include moving the sector from the current interim legal framework to the new permanent one and supporting policy making for and regulation o f the sector. 32. A number o f additional institutions have been incorporated into policy instruments, but have not yet been brought to fruition. One o f these i s a De`le`gation Nationale des TICS, which will be expected to lead the work in e-government. The proposed project w i l l support the creation and strengthening o f this institution. 111. Slow uptake o f e-applications 33. Constraints to uptake o f e-applications including e-government activities include (i) lack o f technical skills in government; (ii) a weak IT infrastructure, including limited penetration o f computers, and (iii) limited public resources to finance e-government. More importantly, the absence o f a robust framework for ICT applications i s preventing Benin from capitalizing on innovative applications to improve service delivery in both the public and private sectors. E-government applications are expected to resolve long-standing challenges facing government services such as corruption (as revealed by a 2007 governance and corruption survey) and absenteeism, which have culminated in a loss o f CFAF 125,000,000,000 in government resources. 34. There i s a total absence o f coordination in the approach to e-government, which results in duplication o f efforts and significant investment in stand-alone applications that function without an interoperability framework. According to a feasibility study conducted on e-government (PNGE study), this limitation was observed in important existing applications used by key ministries (for example, SICOPE, SDL7, FUR, SYSGRAPH, SIGfiP, SYDONIA ++, ASTER, WMONEY, SIGUCE, SIPIBE, CIPAF, SPIPAP or SIGMaP). 35. The ministries and other public administrations have neither I T plans nor a common approach to I T hardware and software acquisition, resulting in a very patchy approach to computerization o f the administration. In most cases, equipment purchased does not respond to actual needs. These constraints are compounded by the weak capacity 29 o f civil servants in I T matters and the lack o f a strategy for professional capacity building and strengthening. 36. Benin ranked 151 on e-government applications" according to the UNPAN Web Measure Index, which assesses the progress o f e-government applications. In the public sector, each institution equips itself, develops i t s own computer network (Intranet), and handles i t s Internet connections with no real coordination at the central level. In terms o f usage, according to a study conducted in 2005 (Utilization and Perception o f Information and Communication Technologies in Benin - INSAE), a substantial proportion o f government departments (27.9 percent) have no computers. There are, on average, roughly eight computers per department and more than ten agents per computer. In addition, more than 72 percent o f the computers are not connected to the Internet in the departments studied. Lastly, all the ministries have local networks, while interconnection o f the ministries remains a future project. 37. The Government o f Benin has identified Business Process Outsourcing (BPO) as a key engine for job creation for the country. The Government i s keen to provide the best possible environment for this industry to grow quickly, including through adoption o f a decree on call centers. However, for lack o f adequate regulations, the private sector i s neither supported nor organized. 38. The New Information and Communication Technologies Management Agency (AGeNTIC) was recently created by the Government in partnership with the private sector and civil society. I t s mission i s to assist and support ICT businesses in Benin, including in matters pertaining to the international market for the exportation o f services/teleservices. In particular, AGeNTIC w i l l help ICT SMEs with international market exploration and training and w i l l hold delegated contracting authority (for preparation, management, and monitoring) for government projects involving ICTs. AGeNTIC w i l l need to be strengthened before it can become truly operational. 39. In summary, despite recent developments, the ICT sector in Benin s t i l l falls short o f achieving i t s development potential and fails to respond to the needs o f private consumers, businesses, and government users. II UNPAN Web Measure Index ranking. http://www2.unpan.org/egovkb/datacenter/Count~View.aspx 30 Annex 2: Major Related Projects Financed by the World Bank and/or other Agencies BENIN: e-Benin Project Latest Project Supervision Ratings (Bank- financed Projects 0 y l ) ECOWAS-Broadband Connectivity Program (P116273) APL 1 includes Benin, NA NA Ghana, Nigeria and Togo - PiDeline: The objective o f the program i s to contribute to lowering the cost o f connectivity by leveraging alternative networks. The ultimate objective o f the program i s to reduce fragmentation o f the West Africa region's economies and help ECOWAS members to create a more unified regional economic space. In order to achieve this objective, the project proposes an integrated approach focusing on improved connectivity in the region, which addresses the missing infrastructure links, commercialization o f excess capacity, creation o f an enabling environment, and institutional strengthening to remove existing bottlenecks for both regional infrastructure and applications. Relevance: Both projects are complementary. The ECO WAS broadband project f will strengthen the development impact o the e-Benin Project by focusing on regional connectivity and providing additional support to help lower ICT costs in Benin. With its focus on creating an enabling environment, the e-Benin Project will provide support to policy makers and regulators to be better equipped to reap fuller benefits o regional connectivity. A number o applications could be f f financed by the Broadband Connectivity Program after all preparatory work is done under the e-Benin Project. First Adjarala Hydroelectric West Africa Power Pool APL-Phase I11 NA NA (P115063) - PiDeline: The goal o f the West Africa Power Pool (WAPP) Project i s to establish a well-functioning, cooperative, power pooling mechanism for West Africa, as a means o f increasing access o f the citizens of the Economic Community o f West African States (ECOWAS) to stable and reliable electricity at affordable costs. The overall developmental objective o f the Adjarala Hydropower Project - WAPP A P L 1 (Phase 3) Project is to increase power generation in Togo and Benin by utilizing local (indigenous) renewable resources, diversifying the fuel mix, and enhancing the quality o f the electricity services in the countries and in the region through better network availability and reliability. The project will allow greater value to be extracted from ongoing investment in the regional transmission network. The Adjarala Hydropower Project will enhance the stability o f the Coastal Transmission Backbone and augment the power supply in the subregion by 31 increasing the power supply, thereby reducing the cost o f supply, and improving the quality o f service. Relevance: The transmission network could be equipped for communications fervices providing additional broadband capacity for Benin. This project is closely linked to the ECO WAS Broadband Connectivity Program described above and would provide additional broadband capacity that could be used to facilitate use o e-applications and e-business. f Increased Access to Modern Energy Project (P110075) - Ongoing: but not vet effective: The project w i l l provide support to improve the electricity supply, extend NA NA its availability to underserved areas, and improve the management and financial sustainability o f the sector. I t w i l l also support private participation in the electricity sector and the establishment o f an energy sector regulator. Relevance: Increased access to energy is key to the success o ICT service f delivery and ICT applications Competitiveness and Integrated Growth Opportunity Project (CIGOP) S S (P104881): The objective o f CIGOP i s to support enterprise development and entrepreneurship through improved business development infrastructure, an improved trade expansion platform, and catalytic interventions for direct investment promotion and the development o f new products and new markets. Relevance: CIGOP seems to have the highest synergetic potential with the e- Benin Project in the following ways: (i) CIGOP aims to consolidate telecommunications reform through the privatization o Benin Telecom SA and f legal reform, two activities that are critical to the e-Benin Project as they target the creation o an enabling environment for improvement o the f f telecommunications sector. The e-Benin Project will build on progress achieved under CIGOP and focus on providing additional support to implement the new law and support the regulator following privatization; and (ii) CIGOP proposes a number o Government-to-Business e-applications in the areas o S M E f f development, trade, and customs. These include designing, setting up, and operating the same electronic and information technology backbone (EITB) in two one-stop shops, and setting up an ICT-based proactive trade information system (PTIS). These applications will be complemented by other applications supported by the e-Benin Project to promote the uptake o e-business, thereby f upholding the objectives o CIGOP. f The Community Driven Development Project (CDDP) (P117764): The CDDP aims to promote the use o f a community-driven development approach through line ministries, decentralized local governments, and local communities to improve the access o f the poorest communities to basic social and financial services. The aim i s to prepare line ministries and decentralized local governments for further implementation o f community-driven development activities though programmatic support. 32 Relevance: There is a small component o the e-Benin Project that aims to f improve ICT access in rural areas, including through the identification o f possible pilot projects. The pilots could be coordinated with priority areas o the f CDDP and highlight the role o ICT in improving service delivery in f communities. Health System Performance (P113202): Under preparation - Board date NA NA 3/25/20 10 The proposed project would support Benin's efforts to strengthen i t s health system through (i) results-based financing mechanism; (ii) a improvements in access to financial resources; and (iii)revision o f planning and budget processes and preparation o f a Sector Wide Approach (SWAP) aimed at improving the allocative efficiency o f the health budget. Relevance: ICT may be used to improve the health system through the f development o health-related applications. 33 Annex 3: Results Framework and Monitoring BENIN: eBenin Project Table 6. Monitorinn and Evaluation Framework Project Development Objective Project Outcome Indicators Use of Outcome Information The objectives o f the project Indicator 1: improvement of the These indicators measure the impact o f are (i) improve access to to ICT sector as a result of the enabling legal and regulatory framework lower cost and better quality technical assistance (score 1-5) on access, quality and price o f I C T I C T services and (ii) enable to Baseline (2009): I services. the development o f e- Target: (2015): 3 applications in the recipient's territory. Indicator 2: Retail price of internet services (including broadband) Baseline (2009): $153 Target: (2015): <$a0 Indicator 3 : Increase percentage This indicator measures to what extent of Public services using electronic the environment i s enabling for the transactions development o f e-applications. Baseline (2009): 0% Target: (2015):20% Indicator 4: Increase in percentage This indicator measures the impact o f the of ICT SMEs improved enabling environment on the Baseline (2009): 0 private sector in Benin and Benin Target: (2015): 30% comDetitiveness. COMPONENT 1 - Enabling Environment for imDroved access to I C T services Intermediate Outcome Intermediate Outcome Use of Outcome Information Indicators Outcome 1-A. Creating an I Indicator 5: Satisfaction rate of I This indicator measures the effectiveness enabling environmentfor regulated entities with the of the new regulator to conduct its improved access to ICT improved capacity of the business services regulator Baseline (2009):0% 34 Outcome I-B. Indicator 6: Access to telephone These indicators measure how the new Promoting access to ICT and internet services (# per 100 laws and decrees (including universal services people) access) will help consumer; have better Baseline (2009):37 (internet: 2.14) access to ICT services Target: (2015):+20% Indicator 7: Access to broadband internet services (YO of population)* Baseline (2009):2.00% Target: (201 5): +20% Indicator 8: Number of indirect beneficiaries of component 1 (of which %age of women) Baseline (2009):3 millions Target: (20/5):4 millions COMPONENT 2 Enabl Outcome 2-A. e-government for improved quality o f public services targeted roll out o f e-government services transparency and governance by the project Baseline (2009): 25% Target: (2015): 50% Indicator 10: Number of e- The level of demand for e-government government services services indicating successful Baseline (2009): I 7 implementationo f e-government. Target: (201 5):25 Indicator 11: Number o f manpower trained under the project (of which YO f women) o Baseline (2009): 0 Target: (20/5):500 Indicator 12: Number of indirect beneficiaries of component 2.1 (of which %age o f women) Baseline (2009):O Target: (2015):1000 35 Outcome 2-B. Indicator 13: %age of f Facilitating the uptake o e- applications financed through thc This indicator will show whether the Business matching grant that are availabk improved environment and the supported on the market AGENTIC will actually help the Baseline (2009): 0 development o f applications. Target: (2015): 5% Indicator 14: The difference (in YO This indicator will show the added-value between the proportion of start- of the new services offered by ups helped by A G E N T I C that AGENTIC, such as coaching and remains in activity after two incubating start-up SMEs in the ICT years, with those that did not sector. benefit from A G E N T I C support Baseline (2009): 0 Target: (2015): 20% Indicator 15: Percentage of firms qualifying for innovation grants that compete for the grant Baseline (2009): 0 Target: (2015):30% Indicator 16: Number of direct an1 indirect beneficiaries of component 2.2 (of which %age of women) Baseline (200 9): 0 Target: (201 5): 1000 36 I n I 1. The P C U within the Ministry o f Communications and I C T (MCTIC) will bear the primary responsibility for project monitoring and evaluation (M&E), and, as such, w i l l establish standard formats and guidelines for data collection and reporting, and will organize training sessions for project stakeholders in their use. Focal Points, who possess great expertise and technical skills in the various areas targeted by this project, will spearhead the implementation o f the project as agreed with the Coordinator. Specifically, they will work with designated staff within their respective entities (ARCEP, AGeNTIC, MCITIC, DGTIC, DNTIC), as focal points, to carry out project activities. Focal Points and staff in the P C U must work together to ensure that the timetable and desired outcomes o f each activity are achieved. 2. Comprehensive M&E reporting will be needed to monitor the results and performance o f the project. I t will involve mainly the direct beneficiaries o f project activities, but will be extended to other beneficiaries such as telecommunications operators and private I C T firms, which ultimately are the main beneficiaries o f the project's outcomes. The P C U will review and validate the reports on performance indicators and recommend corrective action if necessary. The Focal Points will be responsible for providing relevant information and monitoring progress, using relevant performance indicators. 3. Monitoring o f Outcome Indicators: As indicated above, an M&E system will be set up within the P C U to keep track o f and evaluate implementation progress o f the proposed IDA project within the broader context o f the institutional framework for the telecommunications sector. Although improved I C T and telecommunications services at the operator level remains the hallmark o f success o f an enabling environment, the project's M&E system will seek first to measure results that are closely associated with project activities. Hence, the first order o f indicators that the M&E system will look at shall include SMART indicators related to quality, quantity, and time. Ultimately, improvement o f laws and decrees by the project activities will have positive ripple effects on the whole sector and, it i s hoped, on service delivery. 4. Evaluation o f project performance: The Government, through the PCU, may perform evaluations jointly with the World Bank team and conduct supervision or implementation support missions at least twice a year. Missions will be based o n the latest quarterly implementation and financial monitoring reports prepared and submitted by M C T I C . 5. A mid-term review will be conducted within 30 months o f grant effectiveness to assess progress and make recommendations, if necessary, for any changes in Project Development Objectives (PDO), the content o f components, resource allocation, and performance indicators. 6. At project closing, M C T I C will prepare a completion report documenting the project's achievements and results and drawing lessons for future interventions. The completion report will in part be based on the project's technical, economic, social, and environmental impact survey studies, as well as an assessment o f beneficiaries' satisfaction. 38 2 a W t- 2 a W 3 2 t- o a 2 d a W 2 d 5 5 a 5 4 x w p! 4 d a d w % 2 Ei VI 2 3 2 d 2 b E .C L .- c C E - - i (d 3 2 cd - a 3 - E c c c 4 4 4 3 e! L - - 2 c V m s g + 0 E N N E i d $ E s + R N v-l * L b r z Q s s E E- .. e3 .. 0 s .. N rr) s 0 0 0 R 0 0 0 - 5. N, c? - .- a, .- a, .- W C E E x x I a, 1 m m W 2 2 3 c W a 5 a 5 5 2 4 P 2 d U 3 U 0 0 G G a a d E d v) 5 C 2 W 0 0 0 v) 0 0 2 s v) 0 m 0 z 0 d s N 0 N s s .. 0 .. 0 .. 0 *. 0 0 *. l .. o s 0 R 0 R 0 R 0 R 0 6 0 ? 0 0 0 0 0 0 Y - c? c? c? Y c? - a, .- E 4 - .- a, E B a, .- E 4 3 i 3 3 - Y E 2 0 Y m u ;i3 E Y d 0 yu 6 Annex 4: Detailed Project Description BENIN: e-Benin Project 1. The proposed project takes an integrated approach to ICT sector development by looking at three different dimensions: promoting access, enabling applications, and supporting the ICT industry. The three dimensions are closely linked and present a full spectrum o f issues that facilitate ICT-led development 2. Given that Benin i s in the very early stages o f ICT reform, there i s a considerable focus on creating an enabling legal and regulatory framework that improves access to affordable broadband connectivity and fosters quality o f service. This first dimension highlights the need for a platform for e-applications that w i l l run over the network. The project will also focus on creating legal, institutional, and interoperability frameworks to support e-applications, with a focus on e-government for improved governance. For e-applications to flourish, a local I C T industry capable o f creating e-content and e-solutions i s needed. The focus o f the project i s to provide technical assistance to tackle the three priorities in parallel in support o f the Government's vision o f making Benin the "digital corridor o f Africa" and using ICT to facilitate Benin's development into an emerging economy. 3. Specifically, the project w i l l have three components: 0 Creation o f an enabling environment for improved access to I C T services; 0 Enabling o f e-applications and promotion o f e-business; and 0 Effective project implementation, monitoring and evaluation, and communication. 4. Component 1: Creating an enabling environmentfor improved access to I C T services (US$5.6 million). The project will not support direct investments in infrastructure. However, it w i l l facilitate increased access to telecommunications by supporting the Government with implementation o f an effective legal, regulatory, and institutional framework for the sector to foster competition and ensure that it delivers i t s promise o f improved access. The following detailed activities w i l l be carried out. (a) Subcomponent 1.1- Strengthening the legal, regulatory, and institutional framework (i)The legal and regulatory framework: This activity w i l l focus on sustaining the Government's efforts to implement the new legal framework for the sector. A new telecommunications law i s being developed to bring Benin's legal regime in line with the ECOWAS framework. The law covers a number o f details for the sector, but needs to be complemented by secondary legislation and detailed regulatory instruments related to licensing, interconnection, spectrum management, universal access, and regulatory process, among other areas. Given that so far, the telecommunications sector has evolved without a robust legal framework, most o f these instruments 41 w i l l be developed from scratch and require significant attention. Under this component, activities will include (i)support to develop secondary legislation (decrees o f applications) and (ii)support to develop key regulatory instruments. (ii) institutional framework: Strengthening in this area w i l l take two forms: The o Creation and strengthening o ARCEP-Benin: The project w i l l support f (i) creation o f ARCEP-Benin with a focus on institutional design, the including a strategic plan, to optimize the performance o f the agency, staffing levels and skills, and modalities to achieve self-financing; (ii) acquisition o f an up-to-date management information system and tools to increase efficiency, including equipment for quality o f service control; (iii) support to develop a regulatory strategy and adopt an action plan for regulatory reform; (iv) funding for international advisors to support ARCEP in i t s formative years; and (v) strengthening ARCEP's human capacity, based on the results o f an assessment o f training needs, through training and capacity-building efforts at the upper and middle management levels. o Building policy making capacity: The project w i l l include activities aimed at developing the policy-making capacity o f MCTIC to further guide sector growth and development. This w i l l include funding for two advisors to the ministry, capacity-building activities, and studies to support formulation o f key strategies including a universal access strategy, a broadband strategy, and a center o f excellence study for sustainable ICT capacity building. (b) Subcomponent 1.2- Provision o f affordable high-speed Internet connectivity and universal service (i)Providing affordable high-speed Internet: The main activities under this component w i l l include support to the ministry to develop a broadband strategy and to tackle bottlenecks in the supply o f broadband services. The strategy w i l l identify a number o f actions to be taken to encourage competition and open access to landing stations and submarine cable facilities. This activity will also develop regulatory tools to ensure open access, improved access to bandwidth, and lower prices o f connectivity. Under this activity, a study and design o f national and regional exchange points w i l l be carried out. (ii) Promoting access to ICT services: While activities outlined above are expected to improve overall access to ICT, experience shows that targeted effort i s needed to ensure that access extends to remote areas and i s not only restricted to lucrative urban areas. The project will provide technical assistance to define a universal access regime, identify areas lacking access, 42 fund demand studies for remote areas, and support and prepare a l l the upstream work that would allow improved private sector provision o f I C T services in underserved areas in Benin. Under this component, special attention w i l l be devoted to the existing postal network to ensure that the postal outlets serve as access points for e-government and e-application pilots that will be developed under Component 2. Given the overall focus o f the project, this support w i l l not be limited to voice services, but w i l l target Internet services and last-mile broadband connectivity. 5. Component 2: Enabling e-applications and facilitating uptake o e-business f (US$7 million). This component w i l l focus on enabling e-government applications and facilitating the uptake o f e-business. (a) Subcomponent 2.1- Enabling e-government applications: The focus w i l l be on building a crosscutting framework for e-applications and piloting key applications that w i l l have a significant, demonstrable impact. (i)Creation o f a crosscutting framework for e-applications w i l l include the following activities: elegislation. In order to promote development o f the information society and permit electronic transactions, an appropriate legal, regulatory, and institutional framework i s required. The project will therefore finance technical assistance to strengthen ICT legislation and the institutional framework (for example, digital signatures, e- . commerce, intellectual property rights, data privacy). Strategic support. This w i l l involve providing support to the Government to finalize i t s e-government strategy (Politique National sur le Gouvernement Electronigue PNGE) and ensure full consistency . between PNGE and sector policy. Institutional strengthening and capacity-building support. This w i l l include (i) setting up the De'le'gation Nationale des TIC (DNTIC) and strengthening its capacity to lead and implement activities related to development o f an interoperability framework, implementation o f the Government's Intranet, and implementation studies and auditdappraisals o f e-government projects and (ii) building capacity for dealing with e- government issues. A CIO training program for senior civil servants w i l l . be launched together with specialized training for technical staff. Adoption o enterprise architecture (EA) and interoperability standards f for e-government applications. The use of EA as a tool i s important for coordinating investments across government agencies and avoiding duplication and waste. EA by i t s very nature i s a fonvard-looking concept and can help to radically redesign government processes and programs to achieve organizational goals. The project w i l l create capabilities within the Government to adopt E A methodologies in the 43 design and execution o f all e-government applications and programs. Since the use o f EA approaches i s relatively new within the Government, an incremental approach will be adopted, starting with smaller initiatives that can demonstrate tangible results. This will help to institute a disciplined approach to leveraging technology to achieve government transformation, and progressively build capacity to use EA as a tool for providing better public services. The project will also create institutional mechanisms and capabilities for ensuring the adoption of, and compliance with, interoperability standards. Such standards will ensure that different applications and databases relating to different ministries, departments, and agencies can talk to each other. . (ii) E-government network development and pilot applications This subcomponent will support design and initial pilot implementation o f a government-wide network (GovNet) and data center. It will include a detailed study that will explore the feasibility o f a adopting a public- private partnership (PPP) business model and rollout o f the network for the ministries selected for e-government applications. The e-government network will provide a secure high-speed communications network and will help provide access to information and applications across the administration. GovNet will, for example, make it possible for all connected departments to share a common workflow automation system. This component will also support modernization o f the Government's Intranet. While developing the government portal and data center, new approaches relating to Web 2.0 and government cloud infrastructure will . also be taken into account. This component will also include an assessment o f the most relevant and viable applications to be implementedand support the implementation o f one or two pilot projects with significant, demonstrable impact. Such projects could include applications in e-business and e-tourism to build on Benin's comparative advantage in the culture, tourism, and transit business and utilize synergies with existing projects in Benin. (b) Subcomponent 2.2- Facilitating the uptake o f e-Business: This component will focus on the following three activities: (i)Institutional strengthening: This subcomponent will empower AGeNTIC through technical and capacity-building support to promote greater awareness o f I C T and e-applications in the business community, in particular among small and medium enterprises (SMEs). I t will also include funding for advisors to AGeNTIC to help with implementation o f innovation grants and fund a comprehensive study to assess Benin's potential for entering global outsourcing and offshoring markets. Based on 44 the study's overall evaluation o f the key constraints to development o f the industry, the project w i l l prioritize among several smaller studies such as an incubation study, a technology park study, and a curriculum and training study. (ii)C T capacity development and creation o f new opportunities for local ICT I firms: Support to ICT f i r m s will be possible through a small incubation program under AGeNTIC. I D A resources w i l l be used by AGeNTIC to finance set-up costs and the required infrastructure (computers, printers, software, etc). Capacity-building efforts within IT f i r m s w i l l be based on an initial diagnostic period that w i l l include maturity level analysis, gap analysis, and identification o f areas requiring urgent improvement. This will be followed by a detailed assessment o f current business management practices as benchmarked against global best practices. Prospective entrepreneurs who have obtained support under this activity w i l l be eligible to apply for innovative applications grants described below. (iii)Support innovative applications: This subcomponent w i l l promote mobile application development through small grants managed by AGeNTIC. The grants will finance development, rollout, and scaling-up o f private sector applications. Beneficiaries o f innovative applications grants w i l l be identified through a competitive process via advertisements twice a year over a three-year period. The selection process w i l l be consistent with the Development Marketplace approach, which has been adopted by IDA and IFC as a way o f encouraging innovation, entrepreneurship, and job creation. A detailed manual for the grant w i l l be developed under the project with detailed eligibility and selection criteria. Specific criteria for the matching mechanism (including in-kind contributions) w i l l also be outlined. The grant i s expected to cover the expenses for service and content development (including consultations, website development, procurement o f software and hardware) and communications support. Proposals should also include a detailed action plan to ensure sustainability o f applications beyond the grant support period. The grant facility w i l l be managed by AGeNTIC and w i l l follow the governance and disbursement mechanisms laid out in a Grants Operational Manual (to be formulated as part o f the technical assistance activity to AGeNTIC). AGeNTIC w i l l be assisted by an independent adviser hired under the project. 6. Component 3: Effective project implementation and M&E (US$1.52 million). The project w i l l support the incremental operating costs o f the project implementation unit, which was established using project preparation facility funding during the preparation stage. This unit w i l l be responsible for project management, procurement, and financial management. Component 3 w i l l cover the costs o f equipment, vehicles, minor civil works such as office rehabilitation, training, and other operational and maintenance expenditures. I t w i l l also cover the costs o f implementation-related studies. The project w i l l finance the establishment and operation o f a results-based 45 monitoring and evaluation system that w i l l cover maintenance and management o f the management information system and associated training costs. The project will fund baseline surveys as well as periodic impact assessment surveys during project implementation in addition to communications activities to raise public awareness o f ICT sector reform and promote wider appropriation o f ICT tools among public and private users. 7. The different components w i l l be undertaken in parallel; however, activities will be sequenced within the different components. Under Component 1, activities related to the set up o f ARCEP will precede those dealing with quality-of-service equipment, capacity building for ARCEP-Benin, and implementation o f regulatory tools to promote cheaper access to bandwidth. As regards the e-government subcomponent, activities related to setting up the legal, institutional, and interoperability framework w i l l be implemented before the implementation support component for the data center and e-government applications. Finally, for the e- business component, technical assistance activities aimed at strengthening AGeNTIC w i l l precede incubation and innovation activities. The sequencing o f activities will be developed hrther in the Procurement Plan. 46 Annex 5: Project Costs BENIN: e-Benin Project Development o secondary legislation, key regulatory texts, and a strategic regulatory plan f 800 Supportfor the creation o ARCEP-Benin and capacity strengthening o ARCEP and MCTIC f f 2,000 Acquisition o an up-to-date management information system and tools and equipmentfor f 800 quality control 7 Internet connectivity u r d univer.sd s m k v - ~ - _ _ _ _ - -l_--"-.--- j 1.2 Pruvisiorr o cgfordubk high-speed f 7 connectivity (strategic and regulatory tools to ensure Provision o affordable high-speed Internet f 1,000 open access to the landing station and submarine cables, Cup) Supportfor universal access to ICT services --__--_ 1 1,000 -. Component 2: Enabting e-applications 7,000 -....._-" 2. I E-gnvernntentfiw improved governance and transparency 5,000 Creation o an enabling environmentfor e-applications (legislation/ interoperability), f institutional strengthening (DNTIC), and capacity building I 2'ooo Implementation o high-impact e-government pilots (government portal and IntruneiYdata center f 3,000 study) Creation o an enabling environntentfor e-business and institutional strengtheningfor f 1,000 AGeNTIC Supportfor ICT SMEs (start-up supporUincubation and matching grants for innovative 1,000 applications, including mobile applications) 47 Component 3: Project impiementation, communications, and M&E 1,520 --I_ . PCU set up and operating expenses 1,200 Communications and M&E 320 Contingencies 880 Total 15,000 48 Annex 6: ImplementationArrangements BENIN: e-Benin Project 1. The proposed project will be implemented under the aegis o f the Ministry of Communications and I C T (MCTIC). Implementation arrangements involve creation o f a Project Coordination Unit (PCU) that will be supported by four Focal Points. The P C U will be headed by a Project Manager who will report directly to the Chief o f Staff o f the M C T I C . Figure 4. e-Benin Proiect Imdementation Plan 2. The PCU will be composed o f 0 A project coordinator A procurement specialist 0 A financial management specialist 0 An accountant 0 Support staff The process o f hiring the project team started under the Project Preparation Facility (PPF). The team i s expected to be in place before Board. 3. The PCU will serve as the Grant Administrator o f the project and will handle all administrative matters in accordance with the Project Implementation Manual (PIM). It will also ensure financial management and handle project disbursements, and include the preparation and submission o f replenishment requests to IDA. The Unit will also be responsible for (i)maintaining an Management Information System (MIS) for tracking progress in all project subcomponents, both in terms o f financial performance and 49 meeting implementation targets and monitor the performance o f all contractors under the project; (ii)preparing annual work programs and budgets, and if necessary, reviewing, in consultation with IDA, the reallocation o f resources across the various components o f the project as lessons emerge as to patterns o f demand and development impact. Development o f the P I M and establishment o f the MIS will be financed under the PPF. 4. The P C U will be assisted by a task team composed o f four focal points. The focal points will be appointed by the Minister upon recommendation o f different agencieddepartments as follows: o Focal point recommended by the Minister o n issues related to policy matters; o Focal point recommended by D G T I C for issues related to the e- government component; o Focal point recommended by AGeNTIC on issues related to e-business; and o Focal point designated by the regulatory authority o n regulatory issues. 5. The focal point will be responsible for initiating activities related to their respective components, including developing TOR and draft procurement documents, and will be the focal points for monitoring progress o f their components and for collecting and updating indicators for the components they manage. 6. AGeNTIC will take full responsibility for the e-business subcomponent, including the coordination o f activities related to the innovative applications matching grant. AGeNTIC will obtain additional technical support from the project to serve as the Matching Grant Manager and will be charged with enforcing the implementation requirements o f the innovative applications grants. Implementation will be based on the Grant Procedures Manual that will be incorporated in the Project Implementation Manual. The key features o f the grants procedure are (i)description o f the main grant a recipient; (ii)compliance o f the proposed activity with grant eligibility criteria; (iii) appraisal procedures for access to the grants; (iv) meeting o f performance criteria for disbursements based o n measurable triggers; (v) development o f a grant agreement template; (vi) specifying o f the arrangements and procedures for implementation and supervision o f the matching grants; and (iv) review mechanisms o f the matching grants program. 50 Annex 7: Financial Management and Disbursement Arrangements BENIN: e-Benin Project Summary o the Financial Management Assessment f 1. An appraisal of the e-Benin Project has been conducted to assess the financial management (FM) capacity o f the Project Coordination Unit (PCU) to be established within the Ministry o f Communications and I C T (MCTIC) in Benin. A financial assessment o f AGeNTIC," which will implement the e-business component o f the project, has also been conducted. The financial management assessment was carried out in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective o f the assessment was to determine whether the P C U and AGeNTIC had acceptable financial management capacity, meaning they are capable o f recording accurately all transactions and balances, supporting the preparation o f regular and reliable financial statements, safeguarding the project's assets, and are subject to auditing arrangements acceptable to the World Bank. These arrangements should be in place when project implementation starts and be maintained during project implementation. 2. The conclusion o f the financial management assessment i s that financial management arrangements for the project need to be improved in order to satisfy the World Bank's minimum requirements under OP/BP10.02, after which they will be adequate to provide, with reasonable assurance, accurate and timely information on the status o f the project as required by the Bank. The main areas for improvement are the following: Regarding the PCU 0 Preparation and adoption o f an FM manual for the project; 0 Recruitment o f an FM specialist and an accountant with qualifications and experience satisfactory to the Bank; 0 Setting up o f accounting software; 0 Recruitment o f a financial external auditor with qualifications and experience satisfactory to the Bank. Regarding A GeNTIC 0 Recruitment o f a Finance Director with qualifications and experience satisfactory to the Bank; and 0 Preparation and adoption o f the e-business manual. The overall fiduciary risk ratings for the PCU and AGeNTIC are assessed as "substantial" and are expected to be lowered to "moderate" once the mitigation measures are implemented. l 3 Agence de Gestion des Nouvelles Technologies de I'Information et de la Communication 51 Project Summary 3. The objective o f the project i s to improve access to lower-cost and better-quality ICT services and enable the development o f e-applications in Benin. The project will be involve three components: (i) creating an enabling environment for improved access to ICT services (US$5.6 million); (ii) enabling e-applications and facilitating uptake o f e- business (US$7 million); and (iii) effective project implementation monitoring and evaluation and communication (US$1.5 million). The PCU w i l l be headed by a Project Manager who w i l l report directly to the Chief o f Staff within the Beninese MCTIC. 4. The PCU w i l l be assisted by a task team composed o f representatives from ARCEPI4 on issues related to Component 1; representatives from AGeNTIC, which will focus on establishing a Public-Private Partnership (PPP) and on activities related to e-government; and representatives from De`lkgation 2r 1 'Informatique, which w i l l focus on the component covering human development training for e-business. All three institutions identified w i l l also be supported by the project with a particular focus on building their capacity for implementation o f reforms. In particular, it was agreed that AGeNTIC, whose primary mission i s to support ICT improvement in Benin, will take fiduciary responsibility for the e-business component. Country issues 5. The Overall Inherent Risk o f the public financial management system in Benin i s rated as "substantial". The 2008 Public Expenditure and Financial Accountability Assessment (PEFA)ISnoted that key public financial management risks remain, namely, (i)a weak accounting recording and reporting system-public accounts are generally incomplete and prepared with significant delays; and (ii) inadequate control mechanisms-x-post controls are uncoordinated and include several units working independently, and external audits are delayed and a significant increase has been noted in the use o f expenditures processed through exceptional procedures. 6. The Government has taken important steps to address these issues. A decree regulating internal audit has been adopted and the use o f exceptional procedures has been strictly limited. The issue o f accounting delays i s being addressed: additional staff has been recruited and the Government's accounting software has been deployed at the subnational level. Discussions are in progress with the Government to improve the working environment o f the Chamber o f Accounts to enhance the external audit procedure. l4 AutoritC de RCgulation des Communication Electroniqueset des Postes du BCnin Is The recent has been completed November 2007 52 Fiduciary Risks and Mitigation Measures 7. The FM risk assessment o f the PCU and AGeNTIC i s summarized in the tables below. PCU FM Risk T a b l e Risk Risk Risk Mitigation Measure Conditionality Residual Rating Risk Rating I n h e r e n t risks: S M Country level S The Government has taken important S steps toward implementing Weak governance and anticorruption measures. Issues relating anticorruption institutions. to internal controls, reporting, and auditing reforms remain. Entity level A F M specialist and an accountant with F M staff for the M The MCTIC has no real capacity experience and qualifications PCU to be S and no previous experience in satisfactory to the Bank are being recruited before managing World Bank-hnded recruited under the PPF for the PCU. project operations. effectiveness Project level (i)Insufficient knowledge o f and PCU staff and other stakeholders will Project manuals M experience with IDA. Inadequate be trained in World Bank policies and to be available F M procedures may delay project procedures. IDA will provide prior to project implementation. supervision capacity to help identify effectiveness and address weaknesses. (ii)Possibility of governance and Specific International Standards on anticorruption (GAC) challenges. Auditing (ISA) regarding fraud and There i s a risk o f corruption and M corruption will be included in the TOR poor governance that could for an external financial auditor. prevent key project goals from being met. C o n t r o l Risks: M Budgeting The budget preparation process S The FM specialist o f the PCU will M may be delayed as different provide support in preparing realistic stakeholders are involved in budget estimates consistent with their project implementation. The disbursement plans. budget may be based on unrealistic procurement plans and costing. 53 Accounting The MCTIC lacks a qualified Under the PPF, the PCU F M staff ( F M F M staff for the accountant and an appropriate S specialist and an accountant with PCU to be M accounting system. experience and qualifications recruited before satisfactory to the Bank) i s being project recruited. effectiveness A specific computerized accounting Implementation system w i l l be acquired. Training w i l l o f an appropriate be provided by the software provider computerized and the consultant in charge o f accounting preparation o f the project's FM manual. system not later than three months after project effectiveness Internal Audit The ministry's F M procedures The FM manual w i l l outline approval The Project may not be appropriate to qualify and authorization procedures with clear Implementation for I D A assistance for the project. S segregation o f duties. The internal Manual, M control environment w i l l be reviewed including an FM during the FM supervision mission. Manual, to be available before project effectiveness External Audit Project audit reports are likely to A n independent, qualified external Appointment o f be submitted late. S auditor from the private sector w i l l be the external The Chamber o f Accounts does hired to audit o f the project's financial auditor no later L not deliver on time and i s not yet statements under terms o f reference than 4 months sufficiently acquainted with acceptable to IDA. after project World Bank audit procedures. effectiveness Funds Flow Difficulties with timely All key stakeholders in the project w i l l submission of acceptable be trained prior to project effectiveness M withdrawal applications (WA) S and the task force w i l l help resolve may delay mobilization o f funds. funds flow issues during project implementation. FM performance o f the PCU w i l l be regularly monitored to make sure that withdrawal applications are properly processed. Reporting There are delays and difficulties A qualified and experienced F M Agreement on related to preparation of S specialist i s being recruited and w i l l IFR formats and M acceptable Interim Financial facilitate the timely submission o f at project Reports (IFR). acceptable IFRs. Appropriate formats negotiation for Interim Financial Reports will be designed and included as annexes to the manual o f procedures. Overall Risk S M H: High s: ~ ibstantial M: Moderate L: L o w 54 Strengths and Weaknesses The main strength o f the project lies in the availability o f a PPF, which will finance (i) the establishment o f the PCU, (ii) drafting o f the Project Implementation Manual the that would, notably, include an acceptable Financial and Accounting Manual; and (iii) the establishment o f a computerized accounting system. Time-Bound Action Plan to Address Weaknesses 8. The action plan below indicates the actions to be taken to strengthen the PCU financial management system. No. ActivityIAction Target Responsibility Completion 1. Appoint P C U FM staff (FM specialist Prior to Project preparation and an accountant with experience and effectiveness committee aualifications satisfactow to the Bank) 2. Prepare the Project Implementation Prior to PCU Manual, including an acceptable effectiveness Financial and Accounting Manual Set up a computerized accounting No later than three PCU system to fit project needs and (3) months after generate usefwl information and effectiveness financial statements Prepare TOR for the external auditor During appraisal PCU that i s satisfactory t o IDA. and agreed on at negotiation 5 Appoint the external auditor No later than 4 P C U acceptable t o IDA months after effectiveness 55 AGeNTIC FM Risk Table Risk Risk Risk Mitigation Measure Conditionality Residual Rating Risk ~ Rating Inherent Risks: S M Country level S The Government has taken important S Weak governance and steps toward implementing anticorruption institutions. anticorruption measures. Issues relating to internal control, reporting, and auditing reforms remain. Entity level The appointment o f a Finance Finance Director M Director o f the agency has been for AGeNTIC to AGeNTIC has no real capacity S planned for the beginning o f 2010. be recruited and no previous experience with The TOR will be amended in before project managing WB funded operations. accordance with the requirements for effectiveness F M staff managing IDA-financed projects. Project level Insufficient knowledge of and AGeNTIC staff will be trained in E-business M experience with IDA. Inadequate World Bank policies and procedures. manuals to be S I D A will provide supervision F M procedures may delay project available prior implementation. capacity to help identify and address project weaknesses. effectiveness Control Risks: S M Budgeting The budget may be based on S The F M specialist o f the PCU and M unrealistic procurement plans and the Finance Director o f AGeNTIC costing. will work closely to prepare realistic budget estimates consistent with the disbursement plan. Accounting AGeNTIC lacks a qualified Under the AGeNTIC budget for Finance Director accountant and an appropriate S 2010, the F M staff will be reinforced to be recruited M accounting system. by the recruitment o f a Finance prior to project Director with experience and effectiveness qualifications satisfactory to the Bank. The computerized accounting system Adoption of the to be acquired by the PCU will be e-business extended and customized to the manual, needs o f AGeNTIC under the e- including FM business component. Training will be procedures provided by the software provider specific to I D A and the consultant in charge o f the financing , prior preparation o f the project manual, to project especially on aspects regarding e- effectiveness business and F M activities. 56 Internal Audit AGeNTIC's F M procedures may The e-business manual will outline Project not be appropriate to qua& for approval and authorization Implementation IDA assistance for the e-business S procedures with clear segregation of Manual, M component. duties. The internal control including aspects environment will be reviewed during related to e- the FM supervision mission. business implementation and FM activities, to be available before project effectiveness External Audit Project audit reports are likely to S The project's consolidated accounts, L be submitted late. including the component managed by The Chamber of Accounts does AGeNTIC, should be available in a not deliver on time and i s not yet timely manner as the above actions sufficiently acquainted with are implemented. World Bank audit procedures. Submission o f AGeNTIC currently has a contract AGeNTIC's annual audit report with a legal auditor. The last audit i s delayed. opinion submitted i s acceptable, but improvements are expected with the appointment o f a Finance Director for the agency. Funds Flow Difficulties with timely The FM staff o f AGeNTIC will be M submission of acceptable S trained prior to project effectiveness withdrawal applications (WA) and the task force will help resolve may delay mobilization o f funds. funds flow issues during project implementation. F M performance of the PCU will be regularly monitored to make sure that withdrawal applications are properly processed. Reporting There are delavs and difficulties AGeNTIC FM staff will be trained Agreement on related to preparation of S in World Bank FM procedures and IFR format and M acceptable IFRs as AGeNTIC i s proper preparation of IFRs. at project not familiar with IDA'S F M Comments provided during negotiation requirements. the review o f the IFR will help improve their quality. 57 Strengths and Weaknesses 9. In this area, the main strengths o f the project are (i) availability o f the PPF to the finance the drafting o f the Project Implementation Manual, which will include plans for e-business implementation and FM activities to be conducted by AGeNTIC; and (ii) the provision in the agency's 2010 budget for the appointment o f a Finance Director. Some weaknesses were identified with regard to the AGeNTIC FM manual which i s being updated and the agency's lack o f experience with managing IDA-financed projects. These weaknesses will be mitigated through capacity building and training o f FM staff on the e-business manual and on IDA'SFM and disbursement procedures. Time-Bound Action Plan to Address the Weaknesses I 10. The action plan below indicates the actions to be taken to strengthen the PCU's financial management system. ActivityIAction Target Responsibility Completion Appoint a Finance Director with Prior to AGeNTIC DG experience and qualifications effectiveness satisfactory to the Bank Prepare the Project Implementation Prior to PCU / AGeNTIC Manual, including guidelines for effectiveness implementation o f FM activities in AGeNTIC Financial management arrangements 11. Financial management arrangements for the project will be handled by AGeNTIC for the e-business component and by the PCU for the other components. These entities will be responsible for implementing and monitoring day-to-day project activities, including budgeting, disbursement, financial management, reporting, supervision, management o f operational accounts, and auditing. Disbursement arrangements 12. The PCU will be responsible for (i)managing the Operational Account A that will be opened at the commercial bank and (ii) preparing withdrawal applications to be submitted to the World Bank. AGeNTIC will manage the Operational Account B and prepare related withdrawal applications. Disbursement methods and processes 13. Various disbursement methods will be available for use under the project, such as the direct payment method, reimbursement method, special commitment method, 58 and advance disbursement method. The last method will be applied for the replenishment o f the DA. Further instructions on disbursement and details on the operation o f the DA will be outlined in the disbursement letter. 14. Disbursement under the project will be transaction based given the weak local capacity. The Direct Payment and Statement o f Expenditures (SOE) methods will apply as appropriate. Flow o funds f The Caisse Autonome d'Amortissement (CAA) i s the assigned representative o f the Recipient for the mobilization o f IDA funds. Withdrawal application requests will be prepared b y FM staff (at the PCU level) or the Finance Director (at the AGeNTIC level), signed by a designated signatory or signatories (the signature authorization letter i s signed b y the Minister o f Finance), and sent to the World Bank for processing. 15. Funds will flow from the Grant Account through the Designated Accounts opened at the Central Bank o f Benin. The funds will be released to the Operational Accounts A and B to be opened at a reputable commercial bank. Cash withdrawal transactions for the Operational Account A will be authorized respectively by the PCU's Coordinator and the FM Specialist recruited by the project. For the Operational Account B, withdrawal applications will be authorized respectively by the Managing Director and Finance Director o f AGeNTIC. The accounts are set up to fund eligible expenditures based on the approved o f annual activity plans. 59 Figure 5. Flow o f Funds Chart Grant Account (Washington) at the Accounts (BCEAO) mnnugeu' hv C'<4,1 CAA Operational (iiiaiid Account Account R Beneficiaries/SuFpliers/ Consultants 13 - b. Reports, goods, etc. CAA Caisse Autonome d 'Amortissement DP Direct Payment WA Withdrawal application BCEAO Central Bank o f West African States 60 Budgeting arrangements 16. The project will adopt a comprehensive cash budgeting arrangement. The FM Specialist o f the PCU and the Finance Director o f AGeNTIC will be responsible for preparing the annual budget, which will include all planned project activities for the year. Reporting and Monitoring 17. Quarterly unaudited Interim Financial Reports (IFRs) will be prepared by the FM Specialist for the project components under direct management by the PCU and by the Finance Director o f AGeNTIC for the e-business component. The IFRs will include sources and uses o f funds classified by project expenditure. They will also include a comparison o f budgeted and actual project expenditures (commitment and disbursement) to date and for the quarter. Each entity (PCU and AGeNTIC) will submit copies o f the IFRs to the Bank within 45 days following the end o f the quarter. 18. The PCU will produce consolidated Annual Financial Statements for the project, which will include the AGeNTIC component. These statements will comply with International Accounting Standards (IAS) and World Bank requirements and will comprise the following: > A Statement o f Sources and Uses o f Funds > A Statement o f Commitments > Accounting Policies Adopted and Explanatory Notes > A Management Assertion that project funds have been used for the intended purposes as specified in the relevant financing agreements. Accounting policies and procedures 19. Project accounts will be maintained on a cash basis, supported with appropriate records and procedures to track commitments and to safeguard assets. Annual Financial Statements will be prepared by the PCU in accordance with the private accounting standards (SYSCOHADA) currently used in Benin by all Bank-fundedprojects. Audit arrangements Internal audit and controls 20. Internal audit functions will be handled by MCTIC's internal audit department, in conformity with the 2006 decree regulating internal audit. Internal controls will be organized through the FM manual and will include the appropriate segregation o f duties and responsibilities. 61 External audit 21. The supreme audit institution (Chambre des Comptes), which i s supposed to audit all public funds, has limited capacity in terms o f staffing and experience with auditing project financial statements. In view o f this, an external independent and qualified private sector auditor will be recruited to audit the project's financial statements. Annual audits will be conducted based on terms o f reference satisfactory to the Bank. 22. The auditor will express an opinion on the annual financial statements, and perform the audit in compliance with International Standards o n Auditing (ISAs). The auditor will be required to prepare a management letter detailing observations and comments, providing recommendations for improvements to the accounting system and the internal control environment. The audit report on the project's annual financial statements and activities o f the DA, in addition to the audit report on AGeNTIC's annual financial statements (also with a management letter), will be submitted to IDA within six months after the end o f each project's fiscal year. AGeNTIC's audited financial statements will disclose, b y way o f a note or supporting schedule or statement, sufficient information on sources and uses o f funds associated with the project. The following table summarizes the auditing requirements for the project. Audit report Due date Prepared by Transmitted by 1 Project's financial statements End o f June Private auditing firm PCU and management letter to be selected I AGeNTIC's financial End o f June Private auditing firm AGeNTIC statement and management to be selected letter Supervision plan The project will be supervised using a risk-based approach. Supervision will focus on the status o f the financial management system to verify whether the system continues to operate well and provide support where needed. I t will comprise, inter alia, the review o f audit reports and IFRs, advice to the task team on all FM issues, review o f annual audited financial statements and management letters. Based on the current risk assessment which i s "moderate," there will be one on-site supervision mission per year during project implementation and a review of transactions will be performed on that occasion. To the extent possible, mixed on-site supervision missions will be undertaken with procurement, monitoring and evaluation, and disbursement colleagues. Withdrawal o f financing proceeds The following table specifies the categories o f Eligible Expenditures that may be financed out o f the proceeds o f the Financing ("Category"), the allocations o f the amounts o f the Financing to each Category, and the percentage o f expenditures to be financed for Eligible Expenditures in each Category. 62 Category Amount of the Percentage o f Expenditures to be FinancingAllocated Financed (expressed in $ US) (inclusive of Taxes) (1) Goods, consultants' 10,560,000 100% services, Training and Operating Costs for Parts A, B. 1 and C o f the Project (2) Goods, consultants' 1,400,000 100% services, Training and Operating Costs for Part B.2(A) o f the Project (3) Goodsand 600,000 100% consultants' services o f amount o f Matching Grants financed by Matching disbursed for such items Grants under Part B.2(B) o f the Project (4) Refund o f 1,560,000 Amount payable pursuant to Section Preparation Advance 2.07 o f the General Conditions (5) Unallocated 880,000 100% TOTAL AMOUNT 15,000,000 63 Annex 8: Procurement Arrangements Benin: e-Benin Project A. Background - Procurement Reform 1. A Country Procurement Assessment Report (CPAR), assessing the national procurement system, was carried out in April 1999 for Benin and an action plan for procurement system reform was developed in November 2002. This action plan supports the modernization o f the regulatory and institutional framework, and i t s objectives are to (i)improve the management o f public contracts; (ii) modernize public procurement procedures; (iii) strengthen capacities; (iv) establish an independent control system; and (v) adopt anticorruption measures. In addition, the plan provides for the gradual empowerment o f the decentralized procurement entities; the definition o f a strategic framework for capacity building in procurement; and the updating o f tools such as standard bidding documents and a manual for procurement procedures to ensure effective use o f the procurement code. 2. Implementation o f the new institutional framework has translated into the creation o f (i) National Commission o f Public Procurement Regulation (CNRMP), an a entity independent o f procurement transactions and comprising the public and private sectors and civil society, and responsible for policy, audit o f public procurement, and dealing with complaints from bidders; (ii)a National Directorate for Public Procurement (DNMP) responsible for controlling the quality o f procurement transactions; and (iii) Public Procurement Units (CPMP) at the ministry level. The new procurement law promulgated in September 2009 provides a legal and institutional procurement framework harmonized with the WAEMU Procurement Directives adopted b y i t s Council o f Ministers in December 2005. B. Guidelines 3. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised in October 2006; and "Guidelines: Selection and Employment o Consultants by World Bank Borrowers" dated May 2004, revised in October 2006, f and the provisions o f the project Financial Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed b y the grants, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrowers and the Bank in the respective Procurement Plans. The Procurement Plans will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 4. National Competitive Bidding procedures may be used provided that (i) are bids advertised in national newspapers with wide circulation; (ii) bid evaluation, bidder qualification, and award criteria are specified clearly in the bidding documents; (iii) bidders are given adequate response time (minimum four weeks) to prepare and submit 64 bids; (iv) bids are awarded to the lowest evaluated bidder provided that this bidder i s qualified; (v) eligible bidders, including foreign bidders, are not precluded from participating; and (vi) no preference margin i s granted to domestic suppliers. C. Procurement Documents 5. Procurement will be carried out using the Bank's Standard Bidding Documents or Standard Request for Proposal (RFP) for all International Competitive Bidding (ICB) for goods and recruitment o f consultants, respectively. For National Competitive Bidding (NCB), Borrower shall submit a Sample Form o f Evaluation Reports, developed by the Bank, for prior review and will use this type o f document throughout the project once agreed upon. D. Advertising Procedure 6. In order to elicit the broadest possible interest from eligible bidders, a General Procurement Notice (GPN) will be published in the United Nations Development Business (UNDB) online portal, the Development Gateway Market (dgMarket), and in national newspapers o f wide circulation to advertise for major consulting assignments (above US$200,000 equivalent) and International Competitive Bidding. The Borrowers will keep a roster o f the responses received from potential bidders interested in the contracts. 7. Specific Procurement Notices (SPN) for goods to be procured under I C B and National Competitive Bidding (NCB) and for consultant services will be published in at least one national newspaper o f wide circulation (or official gazette). Moreover, for all I C B procurement and all requests for expressions o f interest relating to large consulting services (above US$200,000 equivalent), the SPN will be published in accordance with advertising provisions in "Guidelines: Procurement under IBRD Loans and IDA Credits " dated May 2004, revised October 2006 and "Guidelines: Selection and Employment o Consultants by World Bank Borrowers " dated M a y 2004, revised f October 2006. At least two weeks will be allowed for submission for the Expression of Interest (EOI). 8. For I C B and RFP that involve international consultants, contract awards shall be published at UNDB online and dgMarket within two weeks o f receiving IDA'S "no objection" to the contract award recommendation. For goods, the information to be published shall specify (i) name o f each bidder who submitted a bid; (ii) prices the bid as read out at bid opening; (iii) name and evaluated prices o f each bid that was the evaluated; (iv) the name o f bidders whose bids were rejected and the reasons for their rejection; and (v) the name o f the winning bidder, the price offered, and the duration and summary scope o f the contract awarded. For consultants, the following information must be published: (i) names o f all consultants who submitted proposals; (ii) technical points assigned to each consultant; (iii) evaluated prices o f each consultant; (iv) the final point ranking o f the consultants; and (v) the name o f the winning consultant and the price, duration, and summary scope o f the contract. The same information will be sent to all consultants who have submitted proposals.\ 65 E. Procurement Methods 9. Procurement o goods: The total cost o f contracts for goods to be financed by f IDA i s estimated at US$1.8 million equivalent. The items w i l l include information systems equipment, office equipment and supplies, furniture, and vehicles. Goods shall be grouped in bid packages and shall be procured through International Competitive Bidding (ICB). Contracts estimated to cost less than US$300,000 equivalent may be procured through NCB. Limited International Bidding could be used where there i s a limited number o f suppliers or for justified exceptional reasons other than supplier discrimination. Goods estimated to cost less than US$50,000 equivalent per contract may be procured through shopping procedures in accordance with paragraph 3.5 o f the Procurement Guidelines; the contract w i l l be awarded following evaluation o f bids received in writing based on written solicitation issued to several qualified suppliers (at least three) who have a physical shop with the goods needed. The award will be made to the supplier with the lowest price only after comparing a minimum o f three quotations, opened at the same time, provided the capacity exists to execute the contract successfully and goods proposed are technically in conformity with the requirements. For shopping purposes, the project's Procurement Specialist will maintain a register o f suppliers, updated at least six monthly. Goods that meet the requirements for "Direct Contracting" as described in paragraphs 3.1 and 3.6 o f the Procurement Guidelines may be procured, with the prior agreement o f the Bank, in accordance with the provisions o f paragraphs 3.6 and 3.7 o f these Guidelines. 10. Selection o consultants: The project w i l l finance consultant services such as f studies, supervision, surveys, financial audits, training and workshops facilitators, the total amount o f which i s estimated at US$10.7 million. Consultant f i r m s may be selected through the following methods: (i) Quality and Cost Based Selection (QCBS); (ii)Consultant Qualification Selection (CQS) for contracts under US$ 100,000 equivalent that relate to exceptional studies or research requiring specialized f i r m s with specific expertise and strong capacities; (iii) Least Cost Selection (LCS); and (iv) Single Source Selection (SSS), with the prior agreement o f IDA, for services in accordance with paragraphs 3.10 to 3.12 o f the Consultant Guidelines. A n Individual Consultant (IC) may be hired in accordance with paragraphs 5.1 to 5.4 o f the Bank's Guidelines; SSS may be used only with prior review o f the Bank. 11. Short lists o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines, if a sufficient number o f qualified individuals or f i r m s are available. However, if foreign f i r m s have expressed interest, they may not be excluded from consideration. 12. Procurement o non-consulting services: Least Cost Selection (LCS) or f shopping may be used. 13. Training, workshops, study tours, and conferences: Training (including training materials and support), workshops, conference attendance, and study tours w i l l be carried out based on an approved plan for annual training and similar activities. A detailed training and workshop plan explaining the nature o f the training or workshop, the number o f traineedparticipants, duration, staff months required, timing, and 66 estimated cost will be submitted to IDA for review and approval prior to initiating the process. The selection methods will depend on the activity's requirements, schedule, and circumstances. After training, the beneficiaries will be requested to submit a brief report indicating the skills they have acquired and how these skills will contribute to enhance performance and contribute to the attainment o f the project's objectives. 14. Operational costs: Incidental expenses, including office supplies, vehicle operation and maintenance, maintenance o f equipment, communication costs, rental expenses, utilities expenses, consumables, transport and accommodation, per diem allocations, supervision costs, and salaries o f locally contracted staff will be covered by the project. Physical and nonconsultant service needs will be procured using the procurement procedures specified in the Project Administrative, Financial and Accounting Manual, to be accepted by the Bank. F. Assessment o f the Agencies' Capacity to Conduct Procurement 15. All procurement activities for the project will be carried out by the Project Coordination Unit (PCU). 16. A procurement capacity assessment has been conducted (i) the Ministry o f at Communications and I C T (MCTIC), which will be the project's relevant ministry for implementation matters and (ii)AGeNTIC which will implement the e-Business component. The assessment was conducted by Itchi Gnon Ayindo, a Senior Procurement Specialist based in the Togo Country Office. The assessment reviewed the organizational structure, the overall procurement process, management, and the interaction between the ministry and other entities involved in the procurement process. The assessment showed that the ministry's procurement unit i s staffed by two high- level staff members who are, however, not familiar with the Bank's procurement procedures. The procurement unit is, therefore, not adequately staffed to manage or implement satisfactorily the project's procurement activities. 17. In AGENTIC, the financial department i s in charge o f procurement activities and the staff i s not skilled with Bank's procurement guidelines. The procurement section o f AGENTIC's technical manual allows the use o f the Partners procurement procedures when needed. AGENTIC uses the merit system (notation system) for goods and works bid evaluation. 18. The measures agreed upon to strength the Ministry and AGeNTIC procurement implementation framework are (a) the recruitment, for the PCU, o f a Procurement Officer position under the project Coordinator; (b) the preparation o f the Administrative, Financial and Accounting Manual with the procurement section; (c) the preparation o f the Project Operational Manual that will describe the relationship between the PCU and all other structures that will be involved in project procurement process, (d) for AGENTIC, the nomination o f procurement focal point other than the Financial Management specialist; (e) the use o f bidding document jugged acceptable by the Bank; ( f ) the public opening o f the bids; and (g) the use o f post-qualification system for bids evaluation. The project coordination Unit will be responsible for the 67 preparation o f procurement documents that will be submit to the national procurement control entities at the Ministry or national level. 19. Table 8 summarizes the project preparation action plan. First draft shared Project 1. Submit to the Bank the first's with IDA by Before preparation 18 month procurement plan December 15, negotiations committee 2010 Project 2. Recruit a Procurement Before -_ preparation Officer effectiveness committee 3. Nominate AGENTIC Before -_ AGENTIC Procurement focal point effectiveness Recruitment o f 4. Prepare the procurement Before individual section o f operational manual 5 , Prepare the procurement Recruitment o f section o f the PCU Before consultant By PCU Administrative, Financial effectiveness January 20 10 and Accounting. Manual 20. In view o f experience o f the procurement unit o f the Ministry, the overall project procurement risk has been rated average. Procurement implementation arrangements 21. The project coordination unit established the Ministry o f communications will be responsible for the project implementation overall coordination. 22. The Procurement officer, to recruit, will be responsible for the coordination o f all procurement activities, but AGeNTIC will be responsive for the implementation o f procurement activities under the e-Business sub-component. The procurement tasks to perform include: (a) preparation and updating o f the consolidated procurement plans; (b) preparation, finalization and launching o f the Requests for Proposal and bidding documents; (c) drafting o f minutes o f opening o f the bids/proposal and preparation o f the evaluation reports; (d) submitting o f procurement documents (TORS, RFP, Bidding documents, evaluation reports, contracts, . . .) to the Bank when prior review i s required; (e) preparing the contracts, and overseeing the payments to contractors; and ( f ) drafting o f procurement progress report. Except the procurement activities to be perform by AGENTIC under the e-Business sub-component, all project procurement prior review documents shall be submitted to IDA through the PCU. The Procurement Officer (PO) will oversee and manage the project's procurement activities; he will ensure that these 68 activities are proceeding in a timely manner and according to project objectives. The PO will be responsible for the preparation o f six monthly project's procurement reports. G. Procurement Plan 23. At the project appraisal stage, the Government will develop a detailed draft Procurement Plan for project implementation, which provides the basis for the procurement methods and covers at least the first 18 months o f project implementation. This plan will be agreed between the Borrower and the IDA project team during the negotiation stage and will be available at the Implementing Agency. I t will also be available in the Project Database and on the Bank's external website. The Procurement Plan will be updated in agreement with the Bank at least annually in conjunction with an updated annual work program or to reflect any action plan drawn up following improvements in institutional capacity. All procurement activities will be carried out in accordance with the original or formally updated agreed procurement plan. The PCU will be responsible for the preparation o f the project procurement plan. In order to facilitate implementation and to ensure faster disbursement o f funds, the Procurement Plan should bundle the contracts where appropriate to minimize the number of procurement activities to be carried out. H. Fraud, Coercion, and Corruption 24. All entities and staff involved in procurement, as well as project implementation agencies, Borrowers, bidders, suppliers, and contractors shall observe the highest standard o f ethics during the procurement and execution o f contracts financed under the project in accordance with paragraphs 1,15 and 1-16 o f the Procurement Guidelines and paragraphs 1.25 and 1.26 o f the Consultant Guidelines. I. Frequency o f Procurement Supervision Missions and Audits 25. In addition to the prior review to be carried out from World Bank offices, the capacity assessment o f procurement activities has resulted in the recommendation that supervision be carried out every six months and the holding o f at least one annual Post Procurement Review (PPR) by the Bank; the ratio o f post procurement review shall be one for every five contracts. An Independent Post Review could be conducted through a consultant selected by the Bank at any time up to two years after the project's closing date. The project implementation agency shall send a project procurement management report to the Bank every six months, with details on implementation progress, problems, and solutions proposed. 69 ATTACHEMENT 1: DETAILS OF THE PROCUREMENT ARRANGEMENT INVOLVING INTERNATIONAL COMPETITION 1. Goods, and nonconsulting services (a) List o contract packages that will be procured following ICB and Direct f Contracting practices Goods 1 2 1 3 4 5 6 7 8 9 Ref. No. Estimat Procu Pre ed reme qualifi Domestic Prior or Expected Comment DESCRIPTION Amount nt cation preference Post Contract 5 (US$ Meth (yedno (yesho) Review Signature Date 000) od 1 - Quality c.l.1 control 700 ICB equipment - Fourniture de c.1.1 systkme informatique pour ARCEP 300 ICB No I No I Prior I 02/08/11 et Ministere c.2.1 Data center 5 00 ICB I Certification c.2.1 200 ICB center - Equipment for e- c.2 government 3 00 ICB training center I (b) Prior review: All contracts estimated to cost over US$300,000 for goods and the first two (2) contracts o f each procurement method, irrespective o f the amount, will be subject to mandatory prior review by IDA as determined in paragraphs 2 and 3 o f Annex 1 o f the Bank's Procurement Guidelines. (c) Post review: For each contract not submitted to prior review, the procurement documents will be submitted to IDA for post review in accordance with the provisions o f paragraph 5 o f Annex 1 o f the Bank's Procurement Guidelines. The post review will be based on a ratio o f at least one in five contracts. 70 2. Consulting Services (a) List o Consulting Assignments with Short List o International Firms f f 1 3 7 8 Amount Estimated Selection Ref No DESCRIPTION ESTIMAT. p r ~ ~Contract d ~ ~ Comments Method Signing (US$ 000) Review I Date Development o f secondary 19/03/11 legislation and regulatory QCBS prior 1 c1. 1 instruments 600 I Creation o f ARCEP and 04/04/11 QCBS prior c.1.2. regulatory roadmap 500 I Broadband strategy, action 02/17/11 plan and regulatory C.1.3 instruments 1,000 Development o f RFP and technical specification for CQ prior 02/03/11 c.1.1 QoS equipment 100 Strategy and action plan and regulatory instruments for 600 QCBS prior 02/03/11 C. 1.4 universal access IT audit for postal centers and strategy to use postal QCBS network for ICT access C. 1.5 Doints 400 prior Secondary legislation for QCBS c.2.1.1 ICT legislation 150 prior Study on EA, QCBS I -4- c.2.1.2 interoperability, norms 1,200 prior 05/05/11 Design o f e-government QCBS C2.1.3 pilots 200 Prior 03/27/12 Feasibility study for QCBS c.2.1.4 certification center 200 prior 02/06/ 11 Communications strategy 02/01/11 C.3.2 and implementation 120 QcBs prior (b) Prior review: The following w i l l be subject to mandatory prior review by IDA in accordance with paragraphs 2 and 3 o f Annex 1 o f the Bank's Consultant Guidelines: (i) each contract estimated to cost more than US$200,000 per contract for f i r m s ; (ii) all single source selection; (iii) first two (2) contracts o f each selection method the irrespective o f the amount; (iv) all training; (v) all terms o f reference for contracts whose estimated cost i s greater than US$lO,OOO, and (vi) all amendments to contracts that raise the initial contract value by more than 15 percent o f the original amount or above the prior review thresholds. For individual consultants, each contract estimated to 71 cost more than US$lOO,OOO will be subject to prior review by IDA; in addition, the prior review o f contracts under this threshold will be determined on a case-by- case basis depending on the procurement plan. (c) Short lists composed entirely o national consultants: Short lists o f consultant f services for contracts estimated to cost less than US$200,000 equivalent per contract may be comprised entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. However, if foreign f i r m s have expressed interest, they may not be excluded from consideration. (d) Post review: For each contract for services not submitted to prior review, the procurement documents shall be submitted to IDA for post review in accordance with the provisions o f paragraph 5 o f Annex 1 o f the Bank's Consultant Guidelines. Post review will be based on a ratio o f at least one in five contracts. 72 Annex 9: Economic and Financial Analysis BENIN: e-Benin Project 1. The e-Benin Project will bring significant benefits to Benin in a number o f ways including (i) increased public access to Internet services (ii) broad range o f social a benefits through increased labor productivity, employment creation, learning opportunities for the youth, participation by women in the labor market, and improved public administration; (iii)setting the stage to launch activities in IT-enabled services (ITES) that have greater economic value, such as Business Process Offshoring (BPOs) and other e-applications such as e-business, e-government and I T infrastructure services; and lastly (iv) greater fiscal returns due to new sources o f revenue for the Government. I t must be noted, however, that the economic and financial benefits o f a technical assistance project such this are generally difficult to quantify because o f the inadequacy o f data available at the outset. 2. Given that Benin i s s t i l l at the early stages o f the development o f i t s I C T sector, the e-Benin Project will focus on the key building blocks for realization o f the full impact o f the I C T sector on the economy. As a first step, the project focuses on providing technical assistance to build capacity in the country, so as to increase public access to Internet services. To achieve this basic objective, the project seeks to the finance the following activities: (i) creation o f an enabling environment for improved access to I C T services; (ii) enabling o f e-applications and facilitation o f the uptake o f e- business; and (iii) effective project implementation and M&E. Component 1 3. Improvement o f the I C T environment sets up the conditions under which a competitive marketplace can be created within the sector and thereby promote both more extensive and better-quality I C T services in the country. Increased access to I C T service i s often measured by the following five indicators: (i) Internet users per hundred inhabitants; (ii) cellular subscribers per hundred inhabitants; (iii)Internet users per host; (iv) the percentage o f computers connected to the Internet; and (v) the availability o f public access to the Internet. The enabling environment i s fundamental to achieving growth in these indicators. 4. Key benefits that can be achieved through a sound enabling environment are (i) strong institutions and regulation-the creation o f ARCEP and the Postal Commission would strengthen the institutional framework to help create competition in the sector, lower prices, improve the quality o f services, and create prospects for new infrastructure development and new I C T services through increased private sector participation; and (ii) capacity to regulate a fast moving IT sector, which will result the in greater public access through increased Internet services at cyber cafes, household internet connections, and public payphones or kiosks. 73 Component 2 5. Promotion o f e-applications such as e-business and e-government will enhance the productivity o f both the private sector and the public administration. While benefits under this component are expected to be modest at the initial stages o f the project, given an increase in investment in IT infrastructure, it could prepare the country to take advantage o f the higher economic value o f activities such as Business Process Offshoring (BPO) and the development o f local ICT businesses. An increase in economic activity based on an improved ICT environment i s therefore likely to promote better support for SME development, enhanced employment opportunities, and new demand for skilled ICT professionals. Ultimately, an increase in the share o f IT- enabled services in the economy w i l l have a positive impact on fiscal revenues as a result o f the creation o f new sources o f taxation. Component 3 6. Lastly, the financing o f project implementation and a results-based M&E system are critical for the success o f the project. Funding o f equipment, vehicles, and minor civil works w i l l create the needed focus on the implementation ICT reforms. In addition, the lack o f adequate data to measure progress on key success indicators underscores the benefits o f funding baseline surveys as well as periodic impact assessment surveys during project implementation. 74 Annex 10: Safeguard Policy Issues BENIN: e-Benin Project 1. The environmental threat o f this project i s assessed at level C. The project only involves technical assistance activities aimed at creating an environment conducive to enhanced ICT access and applications. The project focuses on institution-building activities, including computerization and IT-enabled management systems to facilitate public sector reform and policy, with regulatory changes to promote development o f the ICT industry. 2. A number o f project components are expected to lead to favorable social outcomes, including employment generation and poverty reduction. 3. The e-application component o f the project involves design and implementation of Web-based applications without requiring civil works to be performed. 4. Three activities w i l l include the need to rehabilitate existing buildings to host (i) a center o f excellence for training civil servants, (ii) center to host the government a data center and (iii) center for incubation o f ICT start up SMES. Buildings have been a identified by the client. 5. The project also includes a component aimed at improving connectivity in rural areas. This component does not involve investment in infrastructure, but provides technical assistance support to define a universal access strategy and downstream legal and regulatory work to improve access. 75 Annex 11: Project Preparation and Supervision BENIN: e-Benin Project Planned Actual PCN review 02/12/2009 Initial PID to PIC 11/03/2009 Initial I S D S to PIC 11/03/2009 Appraisal 01/28/2010 02/0 1/20 10 Negotiations 02/03/20 10 02/22/20 10 Board/RVP approval 03/25/2010 Planned date o f effectiveness 07/26/20 10 Planned date o f mid-term review Planned closing date 06/30/20 15 The key institutions responsible for preparation and supervision o f the project are: The Ministry o f Communications and ICT (MCTIC) i s the key government agency responsible for project preparation. The key person within the ministry i s the Telecommunications and ICT Technical Advisor o f the Ministry. A Project Coordination Unit (PCU) w i l l be established within the Ministry o f Communications and ICT and w i l l be responsible for the overall coordination, implementation, and supervision o f the project except for the e-Business component. The PCU w i l l be headed by a Project Manager who w i l l report directly to the Chief o f Staff o f the MCTIC. The PCU w i l l be assisted by a task team composed o f representatives from ARCEP (Component 1), representatives from AGeNTIC (establishment o f PPP and activities related to e-government), and representatives from the De'le'gation b 1 'Informatique (human development training component for e- business). AGeNTIC will responsible for implementing the e-Business component. Bank staff and consultants who worked on the project included: I Name I Title I Unit I Boutheina Guermazi TTL, Sr. Regulatory Specialist CITPO Yann Burtin Co-TTL, Sr. Operations Officer ClTPO Alain Hinkati Financial Management Specialist AFTFM Amadou Konare Sr. Environmental Specialist AFTEN Anthony Molle Co u nse I LEGAF Daniel Kwabena Boakye Economist AFTP4 Daniel Sellen Sector Leader AFTAR I David Satola I Sr. Counsel I LEGPS I I Doyle Gallegos I Lead ICT Policy Specialist I CITPO I 76 Name Title Unit Hugues Agossou Sr. Auditor IADDR lann Bannon Sector Manager, Social Development AFTCS Isabelle Huynh Operations Officer CITPO ltchi Gnon Ayindo Sr. Procurement Specialist AFTPC Jerome Bezzina Regulatory Economist CITPO Marc Lixi Sr. ODerations Officer AFTRL Marjory-Anne Bromhead Adviser ARD Mathias Gogohounga Procurement consultant AFMBF Mavis Ampah Sr. ICT Policy Specialist CITPO Michele Ralisoa Nor0 Sr. Program Assistant CITPO Nancy Clare Benjamin Sr. Country Economist AFTP4 Nouridine Kane Dia Economist AFTP4 Salamata Bal Sr. Social Development Specialist AFTCS Sandra Saraent ODerations Officer CITPO Sergio Margulis Lead Environmental Specialist ENV Sylvain Adokpo Migan Water and Sanitation Specialist ETWAF Pepita Olympio Program Assistant AFMBF Wolfgang Chadab Sr. Finance Officer CTRFC Bank funds expended to date on project preparation: 1. Bank resources:US$l71,329 (as o f today out o f a total o f US$286, 000 for FY09-10) 2. Trust funds: N A 3. Total: US$171,329 Estimated approval and supervision costs: 1. Remaining costs to approval:US$88,000.00 2. Estimated annual supervision costs:US$90,000.00 77 Annex 12: Documents in the Project File BENIN: e-Benin Project Etude de faisabiliti du projet e-Gouvernement October, 26,2009 (Programme National de la Gouvernance Electronique - PNGE) Letter of Development Policy (Dbclaration de November 2008 Politique Sectorielle - DPS) Financial Management Overall Risk Rating February 4,2009 Summary PCN Review Package February 12,2009 Approved Minutes of PCN Review Meeting April 2,2009 Signed PPA Letter of Agreement October, 23,2009 ESW Report on I C T Sector in Benin June, 30,2008 Decision Review Package January 20,2010 Approved Decision Note January 25,2010 78 m m N O m N zo t z k P H * .Y e n 0 00 Annex 14: Country at a Glance BENIN: e-Benin Project Benin a t a glance 9/24/08 Sub- 1 Key evelo pment Indicators Saharan Low Benin Afnca income Age distrlbutlon, 2007 72007) Male Female Population. mid-year (millions) 90 800 1296 Surface area (thousand sq km) 1 13 24,242 21646 Population growrh ( o h ) 30 24 21 Urban population ( O h of to tal population) 41 36 32 GNI(Atlas method, US5 billions) 51 762 749 GNI per capita (Atlas method. us$) 570 952 578 GNIpercapita(PPP.internationaI5) 13m 1870 1500 GDP growth(%) GDP percapita growth (%) 46 15 62 37 65 43 I 2o lo pSfCB"l 'O 2o ( m o s t r e c e n t estimate, 2000-2007) Poverty headcount ratio at5125aday(PPP,%) 50 Undor-5 mortality rate (per 1,000) . Povertyheadcount ratio at52,00aday(PPP,%) 72 Life expectancyat birth (years) 56 50 57 200 Infant mortality (per 1000 live births) 88 94 85 Child malnutrition (%of children under 5) 22 27 29 150 Adult literacy, male(%of ages S a n d older) 48 69 72 100 Adult literacy. female (%of ages 1 and older) 5 23 50 50 Gross primaryenrollment, male (%of age group) a5 99 DO 50 Gross pnmaryenrollment,female (%of age group) 87 88 89 0 I I Access t o animprovedwatersource(%of population) 65 58 68 Access to improved sanitation facilities (%of population) 30 31 39 1990 1945 2000 2006 Net A i d Flows 1980 1990 2000 2007 (us$millions) Net ODA and official aid 88 267 238 375 Growth of GDP and GDP per capita ( O h ) Top3donors(in2006) France I7 67 74 74 8 European Commission 14 44 3 35 6 Denmark 2 0 20 33 4 Aid(%of GNI) 63 148 236 81 2 Aidpercapita (USS) 24 52 33 43 - 0 Long-Term E c o n o m i c Trends 95 05 - Consumerprices (annual %change) 11 42 25 GDP implicit deflator (annual %change) a 2 16 32 29 u)P GDP per Capita Exchange rate (annual average local per US$) 2113 272 3 7`Q0 Termsoftradeindex(2000=230) a0 Population, mid-year (millions) 37 52 72 GDP (US$ millions) 1405 1845 2 255 (%of GDP) Agriculture 35 4 36 1 36 5 32 2 51 58 46 Industry 123 132 139 8 4 34 41 38 M anufacluring 60 78 88 75 51 58 27 Services 52 3 50 7 49 6 54 4 07 42 32 Household final consumption expenditure 87 7 86 8 82 4 78 1 19 26 21 General gov t final consumption expenditure 86 1 10 16 1 S O 05 44 83 Gross capital formation 152 u 2 B 9 8 6 -5 3 722 77 Exports of goods and services 158 143 152 8 5 -4 3 18 27 Imports of goods and services 37 3 26 3 28 1 26 1 -6 2 21 IS Gross savings 11 99 239 2)s Note Figures in italics are for years other than those specified 2007 data are preliminary indicates data are not available a Aiddata arefor2006 Development Economics Development Data Group (DECDG) 81 Ben in Balance o f Payments and Trade (US$ mrlhons) 2000 2007 I Governance Indlcators, 2000 and 2007 Total merchandiseeqorts (fob) 386 62 7 Total merchandise imports (cif) 447 Voice and accwntablity Net trade in goods and services -292 -573 Pditical smlity Workers' remittances and compensation of employees (receipts) 87 l73 Regulatory quality Current account balance R u l e d IN -%31 -4 15 as a % o f GDP -8 0 -7 6 Control of cwrupbon Reserves including gold 406 492 I 0 25 50 75 100 02007 Counws percentile rank (C-lW) Central Government Flnance 02000 higher velum impy b8terraImngs (%of GDP) Current revenue (including grants) 6 7 20 3 Taxrevenue 146 152 Current expenditure a 4 144 Technology and Infrastructure 2000 2007 Overall surplus/deficit -3 4 -2 4 Paved roads (%of total) 200 95 Highest marginal taxrate(%) Fixed line and mobile phone Individual 35 subscnbers (per 1000 people) 1 22 Corporate 38 High technologyexports (%of manufactured eqorts) 01 01 External D e b t and Resource Flows Environment (US$ miilions) Total debt outstanding and disbursed 1591 824 Agricultural land (%of land area) 29 32 Total debt service 75 83 Forest area ( % o f land area) 242 213 Debtrelief(H1PC MDRI) 344 570 Nationally protected areas (%ofland area) 23 9 Totaldebt (%ofGDP) 70 6 7 8 Freshwater resources per capita (cu meters) 128 Total debt service (%ofexports) '66 I36 Freshwaterulthdrawal(%of internal resources) 13 Foreign direct investment (net inflows) 60 63 C02emissions percapita(mt) 022 029 Portfolio equity (net inflows) 0 2 GDP per unit of energyuse (2005 P P P 5 per kg of oil equivalent) 42 40 Composition oftotal external debt, 2006 Energy use per capita (kg of oil equivalent) 277 304 (US$ millro ns) IBRD Total debt outstandingand disbursed 0 0 Disbursements 0 0 Principal repayments 0 0 Interest payments 0 0 US5 millions IDA Total debt outstanding anddisbursed 578 76 Disbursements 36 43 Prlvate S e c t o r Development 2000 2008 Total debt service 8 1 Time required to start a business (days) - 31 IFC (frscsiyear) Cost to startabusiness (%ofGNIpercapita) - 860 Total disbursed and outstanding portfolio 0 0 Time required to register property (days) t0 . 2 ofwhich IFC ownaccount 0 0 Disbursements for IFC ownaccount 0 0 Rankedas a majorconstraint to business 2000 2007 Portfolio sales prepayments and (%of managers surveyed who agreed) repayments for IFC own account 0 0 Tax rates 86 8 Tax administration 85 3 M IGA Gross exposure 0 1 Stock market capitalization (%of GDP) New guarantees 0 0 Bank capital to asset ratio (Oh) Note Figures in italics are for years otherthan those specified 2007 data are preliminary 9/24/08 indicates data are not available -indicates ObSeNatiOnis not applicable Development Economics Development Data Group (DECDG) 82 (estimate closest to date shown, +/- 2 years) Goal 1: halve the rates for extreme poverty and malnutrition 1990 1995 Poverty headcount ratio at $1 25 a day (PPP, % of population) . . Poverty headcount ratio at national poverty line (Oh of population) 26.5 29 0 Share of income or consumptionto the poorest qunitile (%) Prevalenceof malnutrition (% of children under 5) Goal 2: ensure that children are able to complete primary schooling Primary school enrollment (net, %) 41 52 80 Primary completion rate (% of relevant age group) 18 27 35 64 Secondary school enrollment (gross, %) IO 20 32 Youth literacy rate (% of people ages 15-24) 40 45 Goal 3: eliminate gender disparity in education and empower women Ratio of girls to boys in primary and secmdary education (%) 49 64 73 Women employed in the nonagriculturalsector ( h of nonagriculturalemployment) O 46 Proportionof seats held by women in national parliament ( W ) 3 7 6 8 Goal 4 reduce under-5 mortality by two-thirds Under4 mortality rete (per 1,000) 185 170 160 148 Infant mortality rate (per 1,000 live births) 111 102 95 86 Measles immunization(proportion of one-year oids immunized, %) 79 65 68 89 Maternal mortality ratio (modeledestimate, per 100,000live births) 840 Births attended by skilled health staff (% of total) 60 66 79 Contraceptiveprevalence(% of women ages 15-49) 16 19 17 Goal 6: halt and begin to reverse the spread of HlVlAlDS and other major diseases Prevalenceof HIV (% of population ages 15-49) Incidence of tuberculosis(per 100,000 people) 17 80 85 90 Tuberculosis cases detected under DOTS (%) 83 86 86 Goal 7: halve the proportion of people without sustainable access to basic needs Access to an improvedwater source (% of population) 63 63 64 65 Access to improvedsanitation facilities (% of population) 12 19 24 30 Forest area (% of total land area) 30 0 24 2 21 3 Nationally protectedareas ( h of total land area) O 23 9 CO2 emissions (metric tons per capita) 0.1 02 02 03 GDP per unit of energy use (constant 2005 PPP $per kg of oil equivalent) 3.2 3.5 42 40 Goal 8: develop a global partnership for development Telephone mainlines (per 100 people) 03 05 Mobile phone subscribers (per 100 people) 00 00 Internet users (per 100 people) 00 00 Personal computers (per 100 people) 00 I Education indicators (%) olds) io0 75 50 25 0 I . . . . . . . , 2000 2002 2004 2006 1890 1665 2000 2008 zoo0 2002 2004 20m - - Primary n d enrollment mi0 9 OFtred imobile subsonbsn -Ratio of girls io boys in pnmafy 8 secondary Wenin OSubSaharan Afnca ~lnlemelusen education 83 IBRD 33372 0 1E 2E 3E 4E To To Dosso Sokoto N IG ER RI NIGER VE R 12N BURKINA u BENIN FASO ro Malanville Mék Pendjari Alibori s in ta Kandi To n Dapaong u Sota o ri 11N 11N nja M ALIBORI Pa u ro ék M ra o ATA K O R A k ta A Lake Kainji Natitingou Bembéréké é sin s Ta Koum ong ou 10N 10N Djougou O BORGOU ué mé To NIGERIA Kaiama ra pa To Ok Kabou DONGA Alpouro Parakou 9N 9N TOGO 0 20 40 60 80 100 Kilometers 0 20 40 60 Miles GHANA COLLINES This map was produced by the Map Design Unit of The World Bank. 8N The boundaries, colors, denominations and any other information 8N Savalou shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Zou Dassa- 1E Zoumé émé Ou PLATEAU BENIN Cou o o Z O U ffo o o Abomey Cové SELECTED CITIES AND TOWNS COUFFO Bohicon DEPARTMENT CAPITALS 7N Pobé 7N To Aplahoué NATIONAL CAPITAL Notsé Dogbo OUEME OUEME OUEME RIVERS Lake Volta Sakété To MAIN ROADS MONO Ibadan Lokossa ATLANTIQUE RAILROADS PORTO NOVO DEPARTMENT BOUNDARIES Mon o oo To Lomé Ouidah Cotonou INTERNATIONAL BOUNDARIES LITTORAL BIGHT OF BENIN 0 1E 2E Gulf of Guinea 3E DECEMBER 2005