The World Bank DRC-Statistics Development Project (P150148) REPORT NO.: RES42754 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DRC-STATISTICS DEVELOPMENT PROJECT APPROVED ON AUGUST 28, 2015 TO - Democratic Republic of Congo POVERTY AND EQUITY AFRICA EAST Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Regional Director: Asad Alam Practice Manager/Manager: Pierella Paci Task Team Leader(s): Yele Maweki Batana The World Bank DRC-Statistics Development Project (P150148) ABBREVIATIONS AND ACRONYMS BCR Bureau Central du Recensement CAPI Computer-Assisted Personal Interview CD Country Director COVID Coronavirus Disease DDO Deferred Drawdown Option DEP Direction des Études et Prospectives DGDA Direction Générale des Douanes et Accise (General Directorat of Customs) DGI Direction Générale des Impôts DGRAD Direction Générale des Recettes Administratives, Judiciaires, Domaniales et de Participations DRC Democratic Republic of Congo DTO Direction du Trésor et de l’Ordonnancement EA Environmental Analysis GFS Government Finance Statistics GIS Geographic Information System HR Human Resources IDA International Development Agency INS Institut National des Statistiques (National Statistics Office) IP Implementation Progress ISR Implementation Status and Results Report IT Information Technology LSMS-ISA Living Standards Measurement surveys – Integrated Surveys on Agriculture M&E Monitoring and Evaluation PBCs Performance-Based Conditions PDO Project Development Objective PDS Projet de Développement de la Statistique QUIBB Core Welfare Indicators Questionnaire Surveys SNA System of National Accounting TOFE Tableau des Opérations Financières de l’État UNFPA United Nations Population Fund US United States USD United States Dollar The World Bank DRC-Statistics Development Project (P150148) BASIC DATA Product Information Project ID Financing Instrument P150148 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 28-Aug-2015 31-Dec-2020 Organizations Borrower Responsible Agency Ministry of Finances Institut National de la Statistique (INS) Project Development Objective (PDO) Original PDO The development objective of this project is to strengthen the capacity of the National Statistical System to produce and disseminate core economic and social statistics.   OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D0880 28-Aug-2015 27-Oct-2015 20-Jun-2016 31-Dec-2020 45.00 23.77 21.29 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? Yes The World Bank DRC-Statistics Development Project (P150148) Explanation A waiver is due because of a delay in the 2019 audit report. Has the waiver(s) been endorsed or approved by Bank Management? Yes Explanation Clearances were provided by the FM Practice Manager and the WFACS Practice Manager. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Overall Progress 1. Based on the latest Implementation Status Report (ISR), the progress towards the achieving the Project Development Objectives (PDO) is maintained Moderately Unsatisfactory (MU), and the Implementation Progress (IP) is also maintained as Moderately Unsatisfactory. After the project restructuring which took place in April 2019, it was expected that these ratings would improve. However, despite an increase in the disbursement following the implementation of the “enterprise census activities”, the overall progress has been affected by the slow pace of these activities. In fact, two main issues have been identified, including the dysfunction in financial management in carrying out the Enterprise Census, and the weak project management explaining long delays in the implementation of project activities. The Project IDA D0880 has currently disbursed up to 50.66% - data on Aug 20, 2020. 2. There has been some progress in the implementation of the first Component “Data Production, Dissemination and Use” to strengthen the statistical infrastructure for poverty and economic monitoring. While the prospects looked good with progress in the collection of enterprise census data and regular collection of price data, the INS ability to conduct a major data collection operation was undermined by shortcomings in fiduciary management as well as the inability of the Project Implementation Unit (PIU) team to anticipate and deal properly with field work issues. This situation led to the overspending under the disbursement category 6 which includes costs associated with components 1.6 (Enterprise Census: Support the Recipient’s data collection phase of the enterprise census) and 1.7 (Improving Public Finance Statistics). To pay thousands of enumerators, the team put in place special provisions including the temporary raising of the ceiling of the designated account. The absorption of this exceptional advance, and the impossibility of submitting reimbursements of expenses related to the census of enterprises beyond the amount allocated to the disbursement category 6, led to cash flow difficulties. Pending further restructuring to regularize the cash situation, the period from January to June was marked by a general delay in all activities, a situation which was aggravated by the COVID-19 pandemic. 3. For activities under the component 2 of Human Resources Development Management, some progress was made in the subcomponent on staffing and policies. The National Institute of Statistics (INS) has validated the critical action plan for revitalizing the HR function. Drafts of statutes, rules and procedural manuals are available and are awaiting final validation. Under the Support for the development of the National Statistics Schools, the institutional review of the three statistics schools (Kinshasa, Lubumbashi and Goma) was completed which makes possible to start the training of 175 new statistics technicians. Unfortunately, the pandemic and the health measures taken by the country's The World Bank DRC-Statistics Development Project (P150148) authorities, including the closure of schools, are causing delays that will affect the ability of this project to implementation this activity by the initial closing date of December 30, 2020. 4. According to the project financial agreement requirements, the 2019 audit report was due June 30, 2020. Despite the four-month waiver provided by the Bank because of the COVID-19 pandemic, this report is still overdue because of missing required documents that prevents the audit Firm to complete it. A correspondence has been sent to the Minister of Finance to notify him of this delay so that they can take appropriate measures to make this Report available before the end of the project. Clearances for an exception were provided by both WFACS and FM Practice Managers to proceed with this restructuring. B. Rationale for Restructuring 5. The restructuring involves the cancellation of US$ 15 million from the household survey and the agriculture census. The PDO will not be affected, as well as the components and subcomponents, but some activities will be downsized, including the subcomponents 1.2 on Household Surveys, 1.3 on Agriculture Census and Surveys, Part A (National Statistics Accounts) of 1.4 on Economic Statistics, and 1.7 on Improving Public Finance Statistics. As a result, some indicators will be revised or removed from the result framework. Moreover, for this new restructuring we are expecting a reallocation of funds between disbursement categories. 6. Cancelling US$ 15 million aims to improve the project's rating and the quality of the portfolio in the DRC, and to reallocate uncommitted funds to other more efficient projects. In fact, given the mismanagement and other difficulties resulting from inadequate institutional arrangements, it became increasingly clear that some activities could not be completed within the initial timeframe and that carrying out an extension to achieve them was not the best solution. The proposed restructuring will help the project to focus on activities that can be completed by the project closing date and which are necessary to achieve the PDO. These activities include: i) providing technical assistance under the Population Census, ii) downsizing the Household Survey operation and focusing on high-frequency mobile phone surveys, iii) downsizing the operation in the Agriculture Census and surveys, by focusing on the technical documents, iv) pursuing activities under Economic Statistics and Improving IT, Equipment and Dissemination, v) completing the remaining activities under the Enterprise Census, vi) reducing the Public Finance Statistics operation to a few activities that are practically feasible given the time remaining, and vii) finalizing activities under Human Resources Development and Management component. 7. An additional request for an extension by six months was not approved by the CMU. Because of the MU rating on both PDO and IP, the ongoing ineligible expenditures and the new CPF strategy that seeks to reduce the number of projects, the CMU was not able to grant the requested extension. However, alternative measures are being considered to ensure completion of certain key activities, including the training of around 150 statistical technicians in in Kinshasa, Goma and Lubumbashi. 8. There is also a need to reallocate funds between disbursement categories. First, to resolve the current cash flow difficulties associated with reaching the financial ceiling for disbursement category 6 and make it possible to finance the remaining activities of the Enterprise Census and those related to the improvement of public finance statistics, the amount allocated to disbursement category 6 should be increased by 65 percent. At the same time, the amount allocated to disbursement category 3 should be reduced by 30 percent to reflect the expenditure expected under this category as of June 30, 2021. In addition, the amount allocated to disbursement category 1 should be adjusted and reduced to reflect the cancellation of USD 15 million and the changes in the other two categories mentioned above. The World Bank DRC-Statistics Development Project (P150148) 9. Finally, it is necessary to revise the results framework to reflect the cancellation of certain activities and the introduction of new activities (such as COVID-19 investigations) which already fit well within the framework of the components and sub-components initially defined. The cancellation of the USD 15 million will not affect the PDO but will reduce the likelihood of fully achieving that objective. Hence the need to review the results framework to better capture the progress towards the PDO. II. DESCRIPTION OF PROPOSED CHANGES 10. As mentioned above, the proposed restructuring includes the following three areas: (a) Changes in components and sub-components, (b) Changes in key result indicators, and (c) Reallocation between disbursement categories. A. Changes in components and sub-components 11. Although the total budget allocation of the two components does not change, there are significant changes within the components with the reallocation of resources previously allocated to the Population and Habitat Census to the activities of the other subcomponents and to new activities. Most of these changes are expected within Component 1: Data production, Dissemination and Use (US$ 21.2 million) and are summarized in the Table below. Summary of changes in the component 1 Status of changes in Previous amount New amount sub-components ($ million) ($ million) Component 1: Data production, Dissemination and 35.1 21.20 Use Sub-component 1.1: Technical Assistance to the No change in activities 2.10 2.50 population and housing census Sub-component 1.2: Household surveys Cancellation of the 10.00 3.45 national household survey Sub-component 1.3: Agriculture census and surveys Cancellation of data 10.00 0.75 (US$ 0.75 million) collection activities Sub-component 1.4: Economic Statistics No change in activities 2.65 5.00 Sub-component 1.5: Improving IT, Equipment and No change in activities 2.35 1.50 Dissemination Sub-component 1.6: Enterprise Census No change in activities 6.00 7.70 Sub-component 1.7: Improving Public Finance Cancellation of some 2.00 0.30 Statistics activities i. Sub-component 1.1: Technical Assistance to the population and housing census (US$ 2.50 million): The amount under this sub-component are adjusted to US$ 2.5 million since the cartography activity was removed. The project had already (i) carried out the procurement of motorcycles for the cartography and population enumeration field activities; (ii) purchased equipment (maps scanner, maps printer, laptops, GIS software, etc.) for the GIS laboratory of the census office, (iii) supported the quality assurance (quality control of each phase of the census to assess the respect of international standards in implementing population census) of the census by the PDS-UNFPA convention and (iv) hired experts in of GIS and CAPI to support design and implement census cartography, develop data entry program, train local staff etc. In addition to these achievements done before the first restructuring, the remaining only activity is the provision of support in the resumption of census activities by the NSO and the Census Office (Bureau Central du Recensement), including the assessment of everything that has been achieved since this population census operation started. The World Bank DRC-Statistics Development Project (P150148) ii. Sub-component 1.2: Household surveys (US$ 3.45 million): The budget of this sub-component will be reduced from US$10 million to US$ 3.45 million, to reflect the cancellation of the national Household Survey. The remaining funds will cover the costs of activities under the high-frequency mobile household and enterprise surveys carried out monthly to monitor the living conditions of households and the performance of production units. These funds will also help finalizing the Kinshasa survey, notably with data processing, tabulation, analysis and drafting of outputs - final report - analytical summary - snapshots, document printing, distribution, data archiving. iii. Sub-component 1.3: Agriculture census and surveys (US$ 0.75 million): With the cancellation of data collection activities, this sub-component will be reduced from 10 to US$ 0.75 million. In fact, this operation will no longer be carried out up to the end as initially planned and will be limited to the finalization of technical documents (manuals and questionnaires) in order to capitalize on those activities already carried out. iv. Sub-component 1.4: Economic Statistics (US$ 5.00): There is no change expected under this subcomponent which includes improvements in National Accounts Statistics and data collection on prices and external trade statistics. The amount is increased from 2.65 to US$ 5 million to reflect actual expenses made under this sub-component. v. Sub-component 1.5: Improving IT, Equipment and Dissemination (US$ 1.50 million): There is no change it this component. But the allocated amount which was 2.35 is reduced to reflect actual expenses. vi. Sub-component 1.6: Enterprise Census (US$ 7.70 million): There is no change in this activity. The data collection is completed, and additional funds are allocated to cover an unexpected increase in budget that should have been supported by partners as initially planned, and to allow the completion of remaining activities including data cleaning and processing, the tabulation and the analysis. vii. Sub-component 1.7: Improving Public Finance Statistics (US$ 0.30 million): The budget of this sub-component will be reduced from US$ 2 million to US$ 0.30 million. The Project will focus on some achievable activities that include: i) Development guide of the Government Financial Operations Table (TOFE), ii) Basic local training workshop in analysis and compilation of public revenue statistics, iii) Local training session on the classification of the 2014 Public Finance Statistics Manual, iv) Work in the sub-committee for the reconstruction of public revenue statistics from 1990 to 2018 at the level of the three agencies (DGDA, DGI and DGRAD), v) Support for the production and publication of the Summary of Public Finance Statistics, and vi) Purchase Acquisition of computer and office equipment for the DTO and the DEP finance. 12. The Component 2: Human resources development and management (US$ 8.8 million) will experience no change. i. Sub-components 2.1 “Staffing and Policies (US$ 1.00 million)”: There is no change in this subcomponent. ii. Sub-components 2.2 “Support for the Development of the National Statistics Schools (US$ 1.40 million)”: This subcomponent remains unchanged. iii. Sub-component 2.3 “Scholarship program for the training of Congolese in the regional and national statistics and demography schools and short-term training related to statistics (US$ 2.10 million)”: This subcomponent is unchanged. The World Bank DRC-Statistics Development Project (P150148) iv. Sub-component 2.5 “Project management (US$ 4.30 million)”: This component will remain unchanged. B. Key result indicators 13. Given the cancellation of some activities and some changes within components, five indicators have been removed, three new indicators have been added and three indicators have been reformulated to better capture progress in activities. 14. The five indicators removed are : i) A Master sample Frame is developed (Yes/No), ii) A sampling frame of agricultural households is developed (Yes/No), iii) National Accounts prepared in accordance with SNA2008 (Yes/No), iv) Availability of an up-to-date database on household living conditions at national level (Yes/No), and v) Regular Production of Central Government Revenue Statistics compliant with 2014 GFS Manual (Number). This will compromise the achievement of the PDO, especially the first PDO indicator where four statistical products are expected out of eight major products (consumer price index, poverty indices, National Accounts, GDP and input-output tables, agricultural census, enterprise census, the national master sample, and yearly statistical books). Three of the removed indicators are related to these statistical products. However, the PDO remains reachable if the project makes it possible to obtain the four products out of the remaining five products. 15. The new indicators are : i) Number of technical tools required for the implementation of small surveys among households and enterprises (Number), ii) Technical tools for the agricultural census are finalized (Number), and iii) The development guide of the Government Financial Operations Table (TOFE) is produced (Yes/No). 16. The three indicators reformulated are: The intermediate indicator “LSMS-ISA surveys completed for: (i) Kinshasa, and (ii) DRC” is revised as “LSMS-ISA surveys completed for Kinshasa (Number)”; the indicator “The new building of the INS is equipped” is changed by “The new building of the INS is occupied and functional”; and the intermediate indicator “Total number of Young Contract Workers recruited and financed by the project” is changed by “Total number of Young graduates supported by the project to work with the INS (Number)”. C. Reallocation between disbursement categories 17. Based on the changes within components, there will be a necessary reallocation between disbursement categories. The amount allocated to the Disbursement Category 1 (Goods, non-consulting services, consultants’ services, Operating Costs, Training and Workshops for Components 1.2, 1.3, 1.4, 1.5, 2.1, 2.2, 2.3(a), 2.3(b)(ii) and 2.5 of the Project) will be reduced by XDR 12.68 million (about USD 17.8 million) since the amount of US$ 15 million has been cancelled while the amount dedicated to the Disbursement Category 6 (Goods, non-consulting services, consultants’ services, Operating Costs, Training and Workshops for Components 1.6 and 1.7 of the Project) will be increased to resolve the cash flow difficulties experienced by the project. Moreover, the Category 3 (Scholarship under Component 2.3(b)(i) will be reduced in favor of the Category 6. The World Bank DRC-Statistics Development Project (P150148) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank DRC-Statistics Development Project (P150148) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1: Data Component 1: Data Production, 35.10 Revised Production, Dissemination and 21.20 Dissemination and Use Use Component 2: Human Component 2: Human Resources 9.90 Revised Resources Development and 8.80 Development and Management Management TOTAL 45.00 30.00 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-D0880- Disburs XDR 32,000,000.00 10,863,189.00 03-Jul-2020 21,136,811.00 FOR 001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-D0880-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: G/NCS/C/OC/T/WP 1.2-5/2.1-3a-3bii-5 25,199,470.00 8,402,302.63 12,511,281.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: G/NCS/CS/OC/TR/WKSHP COMP. 1.1 1,800,000.00 1,768,772.70 1,800,000.00 100.00 100.00 The World Bank DRC-Statistics Development Project (P150148) iLap Category Sequence No: 3 Current Expenditure Category: SCHOLARSHIP COMP. 2.3bi 1,500,000.00 947,373.42 1,050,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: YOUNG PROF. PROGRAM COMP. 2.4 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: PPF REFINANCING 530.00 529.18 530.00 iLap Category Sequence No: 6 Current Expenditure Category: G/NCS/C/OC/T/WP 1.6, 1.7 3,500,000.00 4,875,427.68 5,775,000.00 100.00 100.00 Total 32,000,000.00 15,994,405.61 21,136,811.00 . The World Bank DRC-Statistics Development Project (P150148) . Results framework COUNTRY: Congo, Democratic Republic of DRC-Statistics Development Project Project Development Objectives(s) The development objective of this project is to strengthen the capacity of the National Statistical System to produce and disseminate core economic and social statistics.   Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 To strengthen the capacity of the NSS to produce and disseminate core economic and social statistics Number of statistical products completed and published by 0.00 0.00 1.00 2.00 3.00 4.00 the INS following international standards (Number) Rationale: Action: This indicator has been The enterprise census is added to the description of the possible statistical products. Revised Number of statistical outputs with data readily available to 1.00 1.00 1.00 1.00 2.00 3.00 users through INS data portal (Number) Action: This indicator has been Revised The World Bank DRC-Statistics Development Project (P150148) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Component 1: Data Production, Dissemination and Use Number of routine statistical publications on the INS website 0.00 2.00 4.00 6.00 10.00 15.00 (Number) Action: This indicator has been Revised LSMS-ISA surveys completed 0.00 0.00 0.00 1.00 1.00 1.00 for Kinshasa (Number) Rationale: Action: This indicator has been The LSMS-ISA survey for the DRC is removed since the cancelation of this activity. Revised A Master sample Frame is No No No No Yes Yes developed (Yes/No) Action: This indicator has been Marked for Deletion Price Indexes are calculated with 2012 as the base year No No No No Yes Yes (Yes/No) Action: This indicator has been Revised A sampling frame of agricultural households is No No No No Yes Yes developped (Yes/No) The World Bank DRC-Statistics Development Project (P150148) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Action: This indicator has been Marked for Deletion Quality of the 2015 E-QUIBB No Yes Yes Yes Yes Yes database certified (Yes/No) National Accounts prepared in accordance with SNA2008 No No No No Yes Yes (Yes/No) Action: This indicator has been Marked for Deletion Availability of an up-to-date database on household living No No No No No Yes conditions at national level (Yes/No) Action: This indicator has been Marked for Deletion A registry for enterprise No No No No Yes Yes statistics is developed (Yes/No) Rationale: Action: This indicator has been The term master sample is changed by registry. Revised The new building of the INS is No No No No Yes Yes equipped (Yes/No) INS has an action plan to implement the national data No No No No Yes Yes dissemination policy (Yes/No) Regular Production of Central 1.00 1.00 1.00 1.00 2.00 4.00 Government Revenue Statistics The World Bank DRC-Statistics Development Project (P150148) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 compliant with 2014 GFS Manual (Number) Action: This indicator has been Marked for Deletion Number of technical tools required for the implementation of small 0.00 2.00 2.00 3.00 surveys among households and enterprises (Number) Rationale: Action: This indicator is New New indicator introduced with the new activities introduced to monitor the effects of the COVID19 pandemic. The technical tools for the agricultural census are finalized 0.00 2.00 2.00 3.00 (Number) Rationale: This new indicator is introduced to replace the previous one on the agriculture master sample given that the data collection part is removed through this Action: This indicator is New restructuring. The development guide of the Government Financial No No No Yes Operations Table (TOFE) is produced (Yes/No) Rationale: Action: This indicator is New This new indicator is introduce to reflect the cancellation of some activities previously planned to support public finance statistics. Component 2: Human Resources Development and Management The World Bank DRC-Statistics Development Project (P150148) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Curricula of subjects taught in the schools of statistics updated in accordance with No No No No Yes Yes the standards of the African Schools of Statistics (Yes/No) Number of scholarships funded by the project (including 0.00 10.00 25.00 40.00 45.00 45.00 women) (Number) Total number of Young graduates supported by the 0.00 0.00 0.00 0.00 15.00 30.00 project to work with the INS (Number) Rationale: Action: This indicator has been The definition of the indicator has been slightly modified. Revised Number of statistics technicians trained in national 0.00 0.00 0.00 0.00 0.00 180.00 statistics schools (including women) (Number) IO Table SPACE The World Bank DRC-Statistics Development Project (P150148)