The World Bank Mali Digital Transformation Project (P176174) Project Information Document (PID) Concept Stage | Date Prepared/Updated: 16-Jun-2021 | Report No: PIDC31740 Jun 10, 2021 Page 1 of 9 The World Bank Mali Digital Transformation Project (P176174) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Mali P176174 Mali Digital Transformation Project (P176174) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) AFRICA WEST Feb 07, 2022 Mar 21, 2022 Digital Development Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Ministry of Economy and Ministère de la Finance Communication, de l'Économie numérique et de la Modernisation de l'Administration Proposed Development Objective(s) Improve access to and adoption of broadband connectivity and public services, including legal identification, to underserved populations. PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 100.00 Total Financing 100.00 of which IBRD/IDA 100.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 100.00 IDA Credit 100.00 Jun 10, 2021 Page 2 of 9 The World Bank Mali Digital Transformation Project (P176174) Environmental and Social Risk Classification Concept Review Decision Substantial Track II-The review did authorize the preparation to continue Other Decision (as needed) Country Context 1. Mali faces multiple structural and economic constraints that hinder its socio-economic development. A landlocked territory in the Sahel region with a population of 20.3 million inhabitants in 2020, the country’s large size, low population density and high rurality level present serious challenges to providing infrastructure and public services such as health, education, and agricultural extension to the population. With an annual per capita income of US$ 799 in 2019, Mali is among the 25 poorest countries in the world. Extreme weather conditions, food insecurity exacerbated by high population growth rates and climate change, few economic opportunities due to lack of economic diversification, weak state legitimacy, limited administrative capacity, inequitable and poor quality of public services, and vulnerability to exogenous shocks all constitute a fabric of complex and inter-connected fragility drivers. In addition, Mali has been experiencing political instability, turmoil and conflict since the military coup of 2012 and the occupation of the northern regions by extremist forces. Risks of political instability heightened in 2020 as a military insurrection toppled the sitting president, followed by another coup in May 2021. 2. The country underperforms on most living conditions dimensions, and poverty incidence, at 47.3 percent in 2020,1 is associated with low endowment in human capital. Overall, the country ranks 184th out of the 189 countries in the UN’s Human Development Index for 2020. Mali’s poor live predominantly in rural areas and are mainly farmers who depend on low-productivity agricultural production systems. The great majority of the urban poor are workers in the informal sector who are engaged in low-productivity activities. Neither farmers nor the workers in the informal sector have social protection coverage. Mali has a young population, growing at 3.1 percent a year, and youth unemployment is a major challenge. These issues are exacerbated by current fragility, with the COVID-19 pandemic and the security, social, and political crises having led to a 5 percent increase in poverty in 2020, and socio-economic vulnerabilities are expected to further rise, exacerbating the country’s fragility and social challenges, particularly in rural areas. The situation of women and girls is characterized by deep inequalities, particularly in terms of access to education, health-care services, economic opportunities, and political participation. Sectoral and Institutional Context 3. Mali’s digital economy remains nascent, and its digital transformation is too slow compared to its peers. Based on international indicators, Mali's ranks relatively low compared to the rest of the world or the rest of the African continent, whether in terms of connectivity and accessibility, digital use, e-administration, or e-commerce (e.g., 155/174 on ITU’s ICT Development Index in 2017, 171/193 on UNDESA’s e -Government Index in 2020, 153/193 on UNDESA’s e-Participation Index in 2020, and 136/151 on UNCTAD’s e-Commerce Index in 2019). The last mobile connectivity index published by the GSMA in 2018 ranks Mali amongst the bottom 20 countries with a score of 30 versus an average score for the Sub-Saharan Africa (SSA) region of 38. The performance of the country across all four connectivity enablers (infrastructure, affordability, consumer readiness and content and services) is below the regional average, and most of the foundational building blocks needed to propel digital transformation at scale are 1 Source: World Bank, 2021, https://www.worldbank.org/en/country/mali/overview. Jun 10, 2021 Page 3 of 9 The World Bank Mali Digital Transformation Project (P176174) still under-developed or missing (key elements are described further below). Low levels of broadband adoption leading to weak digital adoption by consumers, businesses and government means that digital technology is yet to have the desired transformational impact it could through contributions to growth, job creation and expanded service delivery. Bringing more Malians online, by increasing internet access and supporting greater uptake, would be the first step in laying the foundations for reaping the digital dividends associated with greater technology adoption and fostering a more vibrant local digital ecosystem. The COVID-19 pandemic has also highlighted the need for accelerating digital adoption in Mali, as means of boosting resilience. 4. Digital transformation is at the heart of Mali's development plans, but limited progress has been made in respect to achieving key objectives established. The 2016 "Digital Mali 2020" Strategic Plan has identified digital transformation as a priority to unlock the country’s potential as an engine of growth and societal transformation. It proposed an ambitious vision for the development of the ICT sector to enable human development, unlock economic growth potential, improve public administration and support the grown of local digital industry. However, this strategy has remained largely aspirational, due to limited implementation of key initiatives envisioned at scale, and a lack of clear and actionable roadmap and financing to back it up. Overall, although the GoM has a vision for digital transformation, significant challenges stand in the way to operationalize this vision, and the strategic plan’s objectives have not been achieved. 5. Over the last decade, GoM has introduced a number of dedicated agencies and initiatives to advance the country’s digital transformation; however, limited coordination has led to fragmentation and limited impact. The Ministry of Communication, Digital Economy and Modernization of the Administration (MCENMA) is today the highest public body supervising the digital sector and the postal sector. In 2017, the National Directorate of Digital Economy (DNEN) was created to support the design of national digital policies and the execution of the digital transformation strategy. Several agencies and institutions are supported by the DNEN for the execution of their sectoral strategies, including the Information and Communication Technologies Agency (AGETIC), which is in charge of the implementation of several digital services, and the telecommunications regulator, the Malian Regulatory Authority for Telecommunications and Posts (AMRTP). The Société Malienne de Transmission et de Diffusion (SMTD) was created in 2015 to manage the state's telecommunication infrastructure, while the Universal Access Fund Management Agency (AGEFAU) was created in 2016, with the mandate to promote universal access to telecommunications services and ICTs. The Personal Data Protection Authority (APDP) was created in 2013 to regulate personal data management. No authority is currently in charge of the national cybersecurity. Nevertheless, implementation of the digital transformation agenda is fragmented due to the involvement of multiple government agencies with overlapping mandates and little coordination. This has resulted in a proliferation of initiatives and has impeded a more cohesive approach to the development of Mali’s digital economy. 6. Although relatively well regulated and liberalized, the telecommunications sector is still not very competitive. The development of the sector initially revolved around the incumbent state-owned operator Sotelma, now known as Moov Africa. A process of liberalization began in 1999, with the privatization of Sotelma/Moov Africa, effective in 2009, followed by the entry of Orange into the market in 2003. Subsequently, the duopoly between Orange and Sotelma/Moov Africa has structured the market for the past two decades, both on the wholesale and retail segments. A third private mobile operator (Atel/Telecel) entered the market in 2017 with limited impact on competition and services adoption. In 2018, the GoM launched the procedure for awarding a 4th license through an international tender. However, the award procedure is still underway. Furthermore, the ARMTP’s ability to regulate wholesale rates has so far been limited. In general, limited competition and a lack of wholesale rates regulation have deprived the sector of sufficient investment to improve connectivity for the population and have put upward pressure on the cost of services for end consumers. Jun 10, 2021 Page 4 of 9 The World Bank Mali Digital Transformation Project (P176174) 7. Access to broadband Internet services remains limited and uneven, leading to significant digital divides between urban and rural areas and between men and women. Compared to international benchmarks, Mali’s penetration rates for both connectivity and use of digital services are too low. Mali's mobile internet penetration rate stood at only 35 percent in 2019, compared to 54 percent in Senegal and 66 percent in Côte d'Ivoire,2 which means that about two-thirds of the population still does not have access to a broadband connection. Broadband access is almost exclusively via mobile. Access to broadband internet is primarily confined to urban areas, and there is a very large digital divide between Bamako and the rest of the country. Similarly, 78 percent of men report having cell phone service, compared to only 61 percent of women, for a gender parity index of 0.78. 3 8. The main obstacles to widespread broadband access and utilization in Mali, besides the impact of insecurity in certain areas of the country, include network unavailability, the high cost of Internet services in relation to the purchasing power of the inhabitants, the inadequate quality of infrastructure, leading to frequent outages and slow connections, and the insufficient bandwidth. GoM has launched ambitious plans for the extension of digital infrastructure, but this is not enough to cover the entire country, and several bottlenecks exist on all segments of the broadband network value chain. On the first mile, the country's landlocked situation makes it dependent on neighboring countries for international bandwidth, the cost of which is reflected in operators’ prices. On the middle mile, the existing backbone remains insufficient to bridge the digital divide as a large number of circles (29 out of 57) are still not connected. On the last mile, remote and rural areas suffer from a persistent market failure, i.e., private operators do not consider investing to cover these areas due to low profitability. Security challenges, mainly in the north and east of the country, as well as the availability and capacity of the infrastructure required for ICT development, including electricity, have further hampered the development of infrastructure. 9. Although good progress has been made to digitize public administration in the country, foundational elements of digital government – secure digital infrastructure, shared services and public platforms, ability to financially transact online, digital skills to provide and consume online services, and the enabling legal, regulatory and institutional environments – need to be established to modernize government functions and services and give confidence for individuals and businesses to make use of it online. Mali ranks relatively low compared to the rest of the African continent and the world in terms of e-administration and e-participation (171/193 on UNDESA’s e- Government Index in 2020, 155/193 on UNDESA’s e-Participation Index in 2020). Main challenges include: (i) limited capacity to manage, exchange, and harness data for service delivery; (ii) lack of equipment and poor maintenance of basic ICT infrastructure combined with limited broadband connectivity; (iii) weak cybersecurity; (iv) absence of public platforms to boost online participation among individuals and businesses; (v) limited technical and administrative capacity within the government to harness digital technologies combined with limited supply of digital skills. Important new laws and amendments to the existing legislation have been introduced to bring public administration online, including such areas as personal data protection, electronic transactions, cryptology, the information society, and the fight against cybercrime. Nevertheless, legal and regulatory gaps remain in such critical areas as the foundational identification system, cybersecurity, interoperability, and access to open data. Although Mali has recently undertaken legal efforts to ensure the digitization of its civil registry, such efforts remain largely in draft form and the legal environment underpinning the ID ecosystem is weakened by discriminatory provisions such as ones found under Mali’s Persons and Family Code. Many legal provisions also require updates, including for digital payments and data anonymization. 2 ITU, 2020 3 Gallup Surveys, 2018 Jun 10, 2021 Page 5 of 9 The World Bank Mali Digital Transformation Project (P176174) 10. Digitization of government payments is also low. GoM, as the largest payer of expenses, still makes weak usage of technology to delivery government payments to individuals, according to the percent of adults having received a government payment in a digital form (5.8 percent in 2018). Limited use of digital payments and use of cash by the government weaken its potential for financial gains, efficiency, and transparency. A number of constraints impede greater digitization of government payments, including gaps in access to digital financial services, a limited number of platforms and services conducive to digital payments, reflecting limited innovation in the market and hence affecting the ability of the government to reach the underserved efficiently, gaps in the legal framework, and the lack of interoperability among the mobile wallet providers and payment platforms, materialized through the impossibility of transferring money from one digital wallet to another and the retail payment ecosystem being fragmented. 11. Bottlenecks in establishing digital government foundations have stifled wider digital transformation, including greater digital service delivery to improve human development, entrepreneurship, and innovation. The government of Mali has so far been able to develop specific online services that remain partially digitized, such as tax declaration, university registration, or civil service exams, and others are under development, but most of the services are informational and allow at most declaration/registration. Several pilot digitalization projects for the development of essential social public services have been launched, particularly in the areas of health and education, most often with the support of external technical and financial partners. However, they continue to face various structural and technical problems, including their failure to scale up, the absence of adequate implementation mechanisms, the absence of sustainable institutional frameworks, and the "seasonal" and intermittent nature of the efforts made. Yet, these emerging uses of technology hold immense opportunities for Mali. For instance, in response to the upheaval and impact of the COVID-19 context, digital solutions have enabled pedagogical continuity with online learning tools or access to certain information services. Likewise, technology can support the strengthening of adaptive social protection systems in Mali, thereby building household resilience prior to a crisis and protecting household wellbeing after a shock. 12. Private-sector participation in supporting digital transformation remains limited. In particular, the digital innovation ecosystem is still in its nascent stages. Incubators and accelerators, which have proven to be a key driver of the digital transformation across Africa, have grown, but the majority of these structures have low capacity and would require to have their business models and offerings strengthened in order to provide better quality services to entrepreneurs. Relationship to CPF 13. The proposed project is aligned with the WBG’s Western & Central Africa Strategy 2021 -2025. More specifically, the project supports the strategy’s 4 main goals: (i) a new social contract, by promoting digital opportunities to support citizen engagement, (ii) more and better jobs, by supporting critical connectivity infrastructure, (iii) stronger human capital, by leveraging digital technologies to improve public service delivery in critical human development sectors, empower women, expand social protection, and connect workers to jobs, and (iv) more climate resilience, by strengthening digital infrastructure resilience. Increasing broadband connectivity is one of the 6 key measurable outcomes highlighted by the Strategy. 14. The proposed project is also aligned with Mali’s Country Partnership Framework (CPF) for FY16-19, which has been extended to cover through FY22. Through its interventions in expanding access to broadband connectivity in underserved and remote areas, improving the efficiency of digital government services, and boosting the digital transformation in priority sectors, the proposed project supports CFP identified Areas of Focus 1. Improve Governance, 2.Create Economic Opportunities, and 3. Build Resilience. Jun 10, 2021 Page 6 of 9 The World Bank Mali Digital Transformation Project (P176174) C. Proposed Development Objective(s) Improve access to and adoption of broadband connectivity and public services, including legal identification, to underserved populations. Key Results (From PCN) 15. The proposed PDO-level results indicators for the project would include: a) Access to broadband connectivity: Population that is covered by broadband (3G+), by rural/urban (percent). b) Adoption of broadband connectivity: Internet subscribers, by gender (percent). c) Access to public services: Persons in Mali with a proof of legal identity that facilitates that access to services, by gender and by rural/urban (percent). d) Adoption of public services: Persons (individuals and businesses) using digitally enabled services supported by the project, by gender and by rural/urban (number). D. Concept Description 16. The Mali Digital Transformation Project thus proposes five integrated and mutually reinforcing components , with a sixth component is dedicated to contingent response to future emergencies. At the lowest level of the stack, Component 1 (Strengthening the Enabling Environment for Digital Transformation) will establish the foundational enabling environment for digital economy and government by supporting the necessary legal, regulatory, and institutional reforms, enabled by green ICT, to achieve universal and affordable internet access and to modernize public administration and service delivery through digitization. One layer up, Component 2 (Expanding Digital Connectivity) will help improve access to affordable and high-quality internet by unlocking critical investments in the first mile, middle mile and last mile. Component 3 (Establishing eGovernment Foundations) will establish technological foundations and capabilities to digitize public administration and service delivery through strengthened data hosting and management infrastructure, government back-office systems and shared platforms, modernized legal ID systems that facilitate access to services for citizens and non-citizens, and digital payments capabilities and infrastructure. Component 4 (Strengthen Public Service Delivery through Digital Solutions) will be built on the foundations established under Component 3 to design and implement a number of government-to-citizens (G2C) and government-to-business (G2B) e-services across Mali under a whole-of-government approach and to improve access and delivery of selected public services in social protection and education sectors in partnership with local entrepreneurs. Component 5 (Citizen Engagement, Implementation Support and Monitoring & Evaluation) will finance citizen engagement, project management, communications, and monitoring and evaluation (M&E). Component 6 (Contingent Emergency Response Component, CERC) will allow for quick disbursement of any uncommitted balances in response to eligible crises or emergencies that could arise during implementation. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Jun 10, 2021 Page 7 of 9 The World Bank Mali Digital Transformation Project (P176174) Summary of Screening of Environmental and Social Risks and Impacts . . CONTACT POINT World Bank Tounwende Alain Sawadogo, Daria Lavrentieva Senior Digital Development Specialist Borrower/Client/Recipient Ministry of Economy and Finance Implementing Agencies Ministère de la Communication, de l'Économie numérique et de la Modernisation de l'Administration Abdoul Kader KY Directeur national de l'Economie Numérique aky@dnen.gouv.ml FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Task Team Leader(s): Tounwende Alain Sawadogo, Daria Lavrentieva Approved By APPROVALTBL Country Director: Kofi Nouve 15-Jul-2021 Jun 10, 2021 Page 8 of 9 The World Bank Mali Digital Transformation Project (P176174) Jun 10, 2021 Page 9 of 9