FOR OFFICIAL USE ONLY Report No: PAD5668 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROGRAM PAPER ON A PROPOSED ADDITIONAL LOAN IN THE AMOUNT OF EUR 233.1 MILLION (US$250 MILLION EQUIVALENT) TO THE KINGDOM OF MOROCCO FOR THE PUBLIC SECTOR PERFORMANCE (ENNAJAA) PROGRAM-FOR-RESULTS MAY 28, 2024 Governance Global Practice Middle East And North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) CURRENCY EQUIVALENTS (Exchange Rate Effective April 30, 2024) Dirham Marocain Currency Unit = (MAD) MAD 10.08 = US$1 EUR 0.93 = US$ 1 FISCAL YEAR January 1 - December 31 Regional Vice President: Ousmane Dione Country Director: Jesko S. Hentschel Regional Director: Nadir Mohammed Practice Manager: Jens Kromann Kristensen Task Team Leader(s): Yannis Arvanitis, Laila Moudden, Walid Dhouibi 2 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) ABBREVIATIONS AND ACRONYMS ADD Digital Development Agency (Agence de Développement du Digital) ADII Customs administration (Administration des Douanes et des Impôts Indirects) AF Additional Financing AM Accountability Mechanism API Application Programming Interface AREP Regional Agency for Project Implementation (Agences Régionales d'Exécution des Projets) CAS Special Allocation Account (Compte d'Affectation Spéciale) CBT Climate-Budget-Tagging CCDR Country Climate and Development Report CDAI Commission for the Right of Access to Information (Commission du Droit d’Accès à l’Information) CDG Deposit Management Fund (Caisse de Dépôt et de Gestion) CGI General Interoperability Framework (Cadre Général d’Interopérabilité) CMU Country Management Unit CNCP National Public Contracts Commission (Commission Nationale de la Commande Publique) CNDP National Control Commission for the Protection of Personal Data (Commission nationale de contrôle de la protection des données à caractère personnel) CNSS National Social Security Fund (Caisse Nationale de Sécurité Sociale) COPIL Steering Committee (Comité de Pilotage) CPER State-region planning contract (Contrat de Plan Etat-Region) CPF Country Partnership Framework CRB Climate Responsive Budget CSO Civil Society Organization CST Special Treasury Account DAAG Dept. of Administrative and General Affairs (Direction des Affaires Administratives et Générales) DAGG Department of General Affairs and Governance (Direction des Affaires Générales et de la Gouvernance) DB Budget Directorate (Direction du Budget) DCAI Control, Audit and Inspection Department (Direction du Contrôle, de l'Audit et de l'Inspection) DDE State Domains Directorate (Direction des Domaines de l’Etat) DEPP Directorate of Public Enterprises and Privatization (Direction des Entreprises Publiques et de la Privatisation) DGCT General Directorate for Local Governments (Direction Générale des Collectivités Territoriales) DGI/GDI General Tax Directorate (Direction Générale des Impôts) DLI Disbursement Linked Indicators DLR Disbursement Linked Results DO Development Objective DRA General Directorate for Administrative Reform (Direction Générale de la Réforme Administrative) DTFE Directorate of Treasury and Exterior Financing (Direction du Tresor et du Financement Exterieur) E&S Environmental and Social eGP e-Government Procurement ESSA Environmental and Social Systems Assessment EUR Euro 3 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) FRD Special State Reemployment Fund (Fonds de Réemploi Domanial) GB - OP General Budget - Investment and Operating expenses GDP Gross domestic product GHG Greenhouse gas GID Integrated Expenditure Management System (Gestion Intégrée de la Dépense) GIR Integrated Revenue Management GIR-CT Integrated Revenue Management - Local authorities (Gestion Intégrée de la Recette - Collectivités Territoriales) GIS Geographic Information System GOM/ GoM Government of Morocco GRB Gender Responsible Budgeting GRM Grievance Redress Mechanism GRS Grievance Redress Service HCP High Commission for Planning (Haut Commissariat au Plan) IBRD International Bank for Reconstruction and Development IDA International Development Association IFMIS Integrated Financial Management Information System IFSA Integrated Initial Evaluation of the Fiduciary System IGF General Inspectorate of Finance (Inspection Générale des Finances) IMF International Monetary Fund IP Implementation Progress IRI Intermediate Results Indicator ISR Implementation Status and Results KPI Key Performance Indicator LOF Organic Law of Finance LT Long-Term M&E Monitoring and Evaluation MAD Moroccan Dirham MAPS Methodology for Assessing Procurement Systems MD Managing Director MEF Ministry of Economy and Finance (Ministère de l'Économie et des Finances) MEFRA Ministry of Economy, Finance, and Administrative Reform MENA/MNA Middle East and North Africa MI Ministry of the Interior (Ministère de l’Intérieur) MICVEN/ Ministry of Industry, Investment, Trade, and Green and Digital Economy (Ministère de l'Industrie, MIICEN du Commerce, de l'Economie Verte et Numérique) MS Moderately Satisfactory MSME Micro, Small, and Medium-sized Enterprise MTNRA Ministry of Digital Transition and Administration Reform (Ministère de la Transition numérique et de la réforme de l'Administration) NARSA National Agency for Road and Safety (Agence Nationale de la Sécurité Routière et du Trafic) NDC Nationally Determined Contribution NDM New Development Model NOG General Orientation Note (Note d’Orientation Générale) NTC National Tax Conference (Assises Nationales de la Fiscalité) 4 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) OB Open Budget OBS Open Budget Survey OCDS Open Contracting Data Standards ODIN Open Data Inventory ODRA Open Data Readiness Assessment OECD Organization for Economic Cooperation and Development OPCI Real Estate Investment Trust (Organisme de Placement Collectif en Immobilier) OPRC Operational Procurement Review Comittee PAD Project Appraisal Document PAP Program Action Plan PBT Treasury Budget Project (Projet de Budget de Trésorerie) PDO Project Development Objective PEF Program Expenditure Framework PEFA Public Expenditure and Finance Accountability PFM Public Financial Management PforR Program for Results PIM Public Investment Management PIU Project Implementation Unit PLF Finance Law Project (Projet de Loi de Finances) PLR Performance and Learning Review POM Program Operation Manual PP Performance Plan (Projet de Performance) RA Results Area RDP Regional Development Plan SDG Sustainable Development Goals SGG General Government Secretariat (Secrétariat général du gouvernement) SME Small and Medium-sized Enterprise SOE State-Owned Enterprise TA Technical Assistance TC Technical Committee TGR Treasury General of the Kingdom (Trésorerie Générale du Royaume) TH Housing Tax (Taxe d’Habitation) TNC Third National Communication TOC Theory of Change TP Professional Tax (Taxe Professionnelle) TSC Communal Services Tax (Taxe sur les Services Communaux) UN United Nations UNFCCC United Nations Framework Convention on Climate Change USD / US$ United States Dollar VAT Value Added Tax (Taxe sur la Valeur Ajoutée) WB World Bank WHO World Health Organization (Organisation mondiale de la santé) 5 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) . BASIC INFORMATION – PARENT (Morocco Public Sector Performance (ENNAJAA) Program - P169330) Country Product Line Team Leader(s) Morocco IBRD/IDA Yannis Arvanitis Does this operation have an IPF Project ID Financing Instrument component? Practice Area (Lead) P169330 Program-for-Results No Governance Financing Implementing Agency: Ministry of Economy and Finance ADD_FIN_TBL1 Is this a regionally tagged project? Bank/IFC Collaboration No No Original Approval Date Effectiveness Date Closing Date 15-Dec-2021 06-Jun-2022 31-Dec-2025 Program Development Objective(s) The Program Development Objective is to improve performance and transparency of government operations and service delivery Ratings (from Parent ISR) RATING_DRAFT_NO Implementation Latest ISR 6 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 20-Mar-2022 22-Sep-2022 28-Mar-2023 20-Oct-2023 26-Apr-2024 Progress towards achievement of S S S S S PDO Overall Implementation S S S S S Progress (IP) Overall Risk M M M M M Technical S S S S S Fiduciary Systems S S S S S E&S Systems S S MS MS MS Disbursement Linked Indicators S S HS S S (DLI) Monitoring and Evaluation S S S S S BASIC INFORMATION – ADDITIONAL FINANCING (Morocco Public Sector Performance (ENNAJAA) Program Additional Financing - P181679) ADDFIN_TABLE Project ID Project Name Additional Financing Type Morocco Public Sector Performance (ENNAJAA) P181679 Restructuring, Scale Up Program Additional Financing Will there be additional financing for the IPF Financing instrument Product line Approval Date component? Program-for-Results IBRD/IDA 20-Jun-2024 No Financing Projected Date of Full Bank/IFC Collaboration Disbursement 10-Jun-2028 No Is this a regionally tagged project? 7 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) No Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD 450.00 174.19 255.38 41 % IDA % Grants % PROGRAM FINANCING DATA – ADDITIONAL FINANCING (Morocco Public Sector Performance (ENNAJAA) Program Additional Financing - P181679) FINANCING DATA (US$, Millions) PROJECT FIN_SUMM_WITH_IPF SUMMARY (Total Financing) -NewFi n1 Proposed Additional Total Proposed Current Financing Financing Financing Government program Cost 624.70 367.00 991.70 Total Operation Cost 450.00 367.00 817.00 Total Program Cost 448.88 367.00 815.88 Other Costs 1.13 0 1.13 Total Financing 450.00 367.00 817.00 Financing Gap 0 0 0 DETAILS – Additional Financing Counterpart Funding 117.00 Borrower/Recipient 117.00 International Bank for Reconstruction and Development (IBRD) 250.00 8 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) COMPLIANCE Policy Has the parent Program been under implementation for at least 12 months? Yes Have the DO and IP ratings for the parent Program been rated moderately satisfactory or better for at least the last 12 months? Yes Does the program depart from the CPF in content or in other significant respects? No Does the Program require any waivers from Bank policies? No INSTITUTIONAL DATA Practice Area (Lead) Governance Contributing Practice Areas Digital Development Poverty and Equity Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks TASK TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Yannis Arvanitis Public Sector EMNGU Responsible) Laila Moudden Team Leader Public Sector EMNGU 9 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Walid Dhouibi Team Leader Procurement reform EMNRU Procurement Specialist (ADM Mohammed Bennani Procurement EMNRU Responsible) Financial Management Fatou Fall Samba Financial Management EAWG1 Specialist (ADM Responsible) Financial Management Jean Charles Amon Kra Financial Management EMNGU Specialist Social Specialist (ADM Houcine Gabi Social Development SMNSO Responsible) Environmental Specialist (ADM Sultana Ajem Environmental issues SMNEN Responsible) Ali Ali Hassan Salamah Team Member Operations EMNGU Arthur Denis Pascal Foch Team Member Digital Development IDD08 Elena Segura Labadia Counsel Legal LEGAM Federica Marzo Team Member Gender / Data EMNPV Herve Hocquard Team Member Decentralization SMNUR Holy Tiana Razafimahefa Peer Reviewer Public Sector EGVPF Rame Jens Kromann Kristensen Program Manager Public Sector EMNGU Khalid Anouar Environmental Specialist Environment SMNEN Lorena Vinuela Peer Reviewer Public Sector EAWG1 Majda Benzidia Team Member Gender EMNPV Rabah Ounissi Team Member Public Sector EMNGU Roland Lomme Team Member Public Sector EMNGU Si-Ambhaivan Sisombat Team Member Collaborative leadership EMNGU Urska Zrinski Peer Reviewer Public Sector ELCG2 Zoubida Al Tayib Counsel Legal LEGAM Extended Team Name Title Organization Location 10 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Morocco Morocco Public Sector Performance (ENNAJAA) Program Additional Financing TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ...................................... 12 II. INTRODUCTION ............................................................................................................ 14 III. PROPOSED CHANGES .................................................................................................... 17 IV. APPRAISAL SUMMARY .................................................................................................. 33 V. KEY RISKS ..................................................................................................................... 38 VI. WORLD BANK GRIEVANCE REDRESS .............................................................................. 39 VII. SUMMARY TABLE OF CHANGES .................................................................................... 41 VIII. DETAILED CHANGE(S).................................................................................................... 41 IX. RESULTS FRAMEWORK AND MONITORING .................................................................... 43 ANNEX 1: INTEGRATED RISK ASSESSMENT .......................................................................... 85 ANNEX 2: MODIFIED PROGRAM ACTION PLAN ..................................................................... 86 ANNEX 3: PARIS ALIGNMENT AND CLIMATE CO-BENEFITS .................................................... 95 11 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 1. This Program Paper seeks the approval of the Board of Executive Directors for a EUR 233.1 million (US$250 million equivalent) Additional Financing (AF) and a restructuring, of the Morocco Public Sector Performance (ENNAJAA) Program for Results (P169330). Approved in the amount of US$450 million on December 15, 2021, the program was declared effective on June 6, 2022, with a closing date of December 31, 2025. The Program supports the implementation of the ENNAJAA government program across three Results Areas (RA): (i) improving the efficiency of public expenditure (RA#1), (ii) improving public revenue management (RA#2), and (iii) improving the foundations of digital transformation through interoperability and Open Data (RA#3). The Program’s Development Objective is to improve the performance and transparency of government operations and service delivery. The proposed AF aims to accompany the scaling up of government ambitions across key results areas. 2. After almost two years of implementation, ENNAJAA Program is on track both from a results and disbursement perspective. Progress towards achievement of the Program’s Development Objective (PDO) is rated satisfactory, as is Implementation Progress (IP) as per the latest Implementation Status and Results (ISR) report (archived on April 26, 2024). The disbursement rate stands at 41 percent (including advance) not accounting for a sizeable disbursement under verification. To date, ten Disbursement Linked Results (DLR) have been achieved and verified, leading to a EUR 94.5 million net disbursement – and another 8 DLRs have been submitted for verification with an expected disbursement of EUR 54.9 million (equivalent to 14.2 percent of the loan) by end-June 2024. Further, three DLRs are scheduled to be submitted for verification by July/August 2024 to the tune of EUR 52.3 million (equivalent to 13.5 percent of the loan). This would bring total disbursements in September to 68.7 percent including advance, and 52.2 percent excluding advance. Table 1: Achievement of Disbursement Linked Indicators and disbursements under the parent Program Value % of DLI % DLI Disbursement RA DLIs (US$ disbursement (or expected by sept. million) under verification) 2024 (Excluding advance) (Excluding advance) DLI1. Strengthening the performance approach introduced by the 62 100% 100% Organic Law of Finance (LOF) DLI 2: Introducing a Climate sensitive Budget (to be restructured) 50 0% 0% RA #1 DLI3: Enhancing the Decentralization agenda by strengthening regions’ 50 10% 40% public investment management DL4: Improving the efficiency of public procurement through data 42 48% 86% production and analysis DLI 5: Improving tax compliance and performance of the tax 50 10% 100% RA #2 administration DLI6: Increasing resources of municipalities 80 8% 70% DLI7: Improving data exchange and interoperability of information 56 36% 36% RA #3 systems DLI8: Improving the proactive disclosure of open government data 60 17% 17% 450 38.7% 52.2% 3. The Program is steadily moving towards the achievement of its development objective, with significant results thus far across results areas. 12 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • Under results area 1, progress in rolling out the 2015 Organic Law of Finance (LOF) was achieved with 11 Ministries improving performance projects by strengthening their quality and adopting management charters. The share of performance indicators for which annual targets have been achieved stands at 48 percent, in line with expectations as per the related PDO-level indicator. Additionally, 394 staff have been trained in gender-based budgeting, surpassing the goal of 160 staff captured as an intermediate-result indicator. At the local level, enhancements in budget programming quality for regional projects is taking shape, with ongoing verifications related to DLIs supporting medium-term expenditure planning for investments and strengthening of monitoring local development plan oversight. On public procurement, the DLI-supported creation of the national observatory for public procurement is achieved to further improve transparency. • Under results area 2, the Tax Administration’s (DGI) tax compliance efforts show substantial progress, leading to improvements in compliance and revenue collection in line with PDO-level indicators. The increase in targeted additional revenue collected by the DGI is being materialized: in 2022, DGI registered more than 338 000 taxpayers through its online tax platform. Compared with 2020, the additional revenues collected by the DGI have increased by 47 percent in 2021 and 24 percent in 2022, exceeding the target of 15 percent.1 At the local level, digitalization in local taxation progresses steadily, alongside initiatives promoting e-filing and e-payment and streamlining tax processes. Such efforts are yielding results and the PDO- level indicator measuring the increase in revenue from local taxes in targeted municipalities has been met, with a 22 percent increase against a target of 8 percent. • Lastly, under results area 3, strides towards digital transformation are led by the Ministry of Digital Transition and Administrative Reform (MTNRA) and the Digital Development Agency (ADD). Noteworthy achievements include the establishment of the National interoperability platform and regulatory acts promoting database interoperability. Additionally, efforts to increase access to and improve the quality of Open Data show traction, with numerous datasets published and ongoing enhancements in data reuse potential. 4. Since ENNAJAA’s approval in 2021, government ambitions with regards to public sector performance have increased, prompting the demand for further support. The implementation of the 2015 LOF, which underpins the Program, has been successful as reflected in improvements in Morocco’s ratings in the 2024 Public Expenditure and Finance Accountability (PEFA)assessment from 2015 to date. Conversely, the PEFA report – as well as other key diagnostics such as the ongoing Public Finance Review – suggests areas for improvement on which the Government of Morocco (GoM) is basing the increased scope and reach of its program. Many of these are embedded in new strategies or reform intentions such as amendments in the LOF, more ambition with regard to gender and climate budgeting, reforms of the SOE sector, and upcoming reforms on local revenue mobilization. In addition, the impetus for improved service delivery against far-reaching ongoing reforms (e.g., social protection, health etc.), pressing infrastructure needs (e.g., transport bottlenecks, hydric stress etc.) and various concurrent challenges (Al Haouz Earthquake, etc.) leads the GoM to fasten pace and ambition to instill a performance culture in the public administration as per the LOF. 1 Consolidated data for 2023 will not be available until July 2024. 13 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 5. Considering the increased breadth and depth of its program, and cognizant of ENNAJAA’s performance, the borrower has requested a combination of additional financing and restructuring. The additional financing will be underpinned by the scale-up of Program results to enhance development impact. The proposed restructuring will include an extension of the Program implementation period by thirty-six (36) months, with a new closing date of December 31, 2028, as well as changes in (i) Disbursement Linked Indicator 2 (DLI#2) on Climate Budgeting, (ii) an adjustment in DLI#3 to strengthen E&S systems at the regional level, and (iii) DLI#5 to go beyond tax administration to fiscal and non-fiscal tax revenues. While the AF will focus on RA#1 and RA#2 through new and scaled up DLIs, RA#3 will remain within the program albeit with unchanged scope. II. INTRODUCTION 6. The AF and Restructuring would involve new DLIs and related revisions to the result matrix and limited adjustments to implementation arrangements. Based on the government request for support, the AF will focus on RA#1 and to a more limited extent on RA#2. Efforts under RA#3 will be maintained but not covered by the AF. The PDO of the parent Program - improve the performance and transparency of government operations and service delivery - is adequate for the AF and remains unchanged as it can accommodate the inclusion of additional areas of the government program and the scaling up of objectives and targeted results. Some PDO level indicators and Intermediate Result Indicators (IRIs) are revisited both in substance and targets to ensure that they reflect progress made so far towards their achievement, the broadening of the scope of the Program to new dimensions of public financial management, and the scaling up of ambitions, including along the result chain towards output and outcome-level results. The geographic scope remains as defined in the parent program2. Budgetary performance: scaling-up of RA#1 7. While significant progress has been made in the implementation of the 2015 Organic Finance Law, headway remains to be accomplished on important dimensions of budget management that will benefit from enhanced support through the AF. The 2023 PEFA assessment highlights significant improvements of Morocco’s scores since 2015, with ratings of A or B+ across 14 indicators and improvements in 27 sub-indicators. Yet the assessment also reflects lasting weaknesses in public access to budget information; public investment management; management of public assets; public debt management; accounting and reporting; and parliamentary oversight and external auditing. Concurrently, while the performance drive instilled by the 2015 Organic Law has taken hold, it is not uniformly applied, and challenges remain. These include the application of quality standards across all ministerial departments, evaluation and accountability in relation to performance, and alignment of performance projects with key service providers. Gender budgeting is being promoted, yet the tracking of related expenditures or the inclusion of gender criteria in public investment projects is still pending. Critical preparatory steps are taking place for Climate-Budgeting, but delays have been incurred in rolling it out. 8. The impetus for stronger budgetary performance is backed by preparation for amendments at the level of the LOF. Approved in 2015, the LOF defines core budgetary and accounting rules, enshrines the 2 The geographic scope of the operation comprises the regions and municipalities as listed in the Program’s Operational Manual (POM). 14 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) principles of accountability and evaluation, extends the right of parliamentary amendment, and helps strengthen budgetary transparency. The objectives of the LOF reform are to promote institutional debate between Parliament and government on the governance of public finances, to support the current momentum of institutional reforms, to strengthen financial principles and rules through the introduction of new provisions; and to broaden the scope of application of LOF provisions. With regards to the latter, and in complementarity with the PfoR operation focusing on the SOE reform (P181522 - FY24 delivery) which is being prepared in parallel, the Program will seek to mitigate the fiscal impact of the SOE sector. It will also help introduce and implement critical provisions regarding public investment management. 9. Key infrastructure needed to strengthen resilience, promote growth, and ensure greater access to markets and services as per the New Development Model (MDN) have put Public Investment Management back in the reform spotlight. Coping with water scarcity has long been a governmental priority and large infrastructure investments are planned for that purpose in the decades to come.3 The annual King’s Speech in 2022 highlighted the need to improve public and private investment4 so as to boost economic and social growth. Public investment, accounting for 19 percent of the GDP, is crucial given the investment needs in several sectors (water desalination plants, ports, schools, and hospitals. etc.) as well as Morocco hosting major upcoming international events (the 2025 African Nation Cup and the 2030 World Cup). On public investment management (PIM), the Budget Directorate (DB) is currently assessing (with the support of the OECD) the Moroccan PIM system. A PIM guide will be drafted covering every stage of the investment cycle (selection, monitoring and evaluation). The improvement of investment selection should further improve budgetary performance and help best meet service delivery needs. 10. Employing the budget as a tool to foster sustainable and equitable development is critical in Morocco. Poor households, particularly women, youth, rural populations, and micro, small, and medium-size enterprises (MSMEs), face significant economic hardships due to extreme weather events like floods, landslides, droughts, and heat waves, which Morocco is highly vulnerable to. These events are expected to become more frequent and severe in the coming decades. Apart from physical infrastructure damage and economic losses, there will be substantial public health consequences, including increased disease prevalence and a tenfold rise in heat-related mortality.5 Actions and result targets related to climate and gender-based budgeting will be scaled up and restructured to ensure their effective roll-out under the AF. 11. Similarly, the AF will address fiscal fragmentation embodied in numerous budgetary and extra-budgetary entities at both the central and local government levels. Despite a stable number of special treasury accounts (CSTs) (+/- 55 over past years), their total value has increased from MAD 68 billion in 2012 to MAD 151 billion in 2022. Central government expenditure through all CSTs is funded by ear-marked fiscal resources. Such fiscal fragmentation limits budgetary unity and often dilutes 3 World Bank, 2023, Morocco Economic Monitor: From Resilience to Shared Prosperity. 4 King’s Speech of October 2022 in front of the Parliament 5 Wooden and others. 2014. “Impact of Weather Shocks on MENA Households.” World Bank Group; WHO (World Health Organization), and UNFCC (United Nations Framework Convention on Climate Change). 2015. Morocco’s Climate and Health Country Profile; World Bank. 2018. Morocco Country Profile; ThinkHazard! (a natural disaster risk screening tool); World Bank. 2016. Morocco Climate Adaptation Briefing; By 2050, climate-induced water scarcity is expected to cost the MENA region 6–14 percent in GDP growth (World Bank. 2018. Beyond Scarcity: Water Scarcity in the Middle East and North Africa, xxviii); Climate Risk Profile: Morocco (2021). The World Bank Group. The Kingdom suffers from acute water stress. Annual per capita water availability has dropped from 2,600 cubic meters in 1960 to 700 cubic meters in 2017 (Nationally Determined Contribution, pp. 1, 16). By 2030, the average Moroccan will have 500 cubic meters of water to use annually or about 1.37 cubic meters per day. 15 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) transparency in the use of public funds. It can also compromise aggregate fiscal discipline6. The upcoming 2024 LOF reform plans to further rationalize CSTs and introduce a "revenue cap" to limit their overall volume. Any (tax) revenue exceeding this cap will be redirected to the State's general budget. The AF incentivizes the implementation of the rule to cap the amount of earmarked revenues, thereby increasing revenue accruing to the general budget. At the sub-national level, local government operations exhibit a limited degree of fiscal decentralization, underscored by a consistent under- execution of capital budgets. This situation indicates a need for capacity development and Public Financial Management (PFM)systems reinforcement before assigning further responsibilities to local governments.7 12. While improvements in budget transparency have been notable in some areas, the AF will support deepening ongoing transparency reforms. Significant efforts have also been made to improve fiscal transparency and efficiency, notably since the adoption of the LOF. Budget classification has improved as noted in PEFA indicator PI-5 on budget documentation (now B, against D in 2016), and performance projects and related reports are systematically drawn up by departments and ministries with improved quality of related information. This PEFA finding comforts efforts deployed under ENNAJAA to improve performance budgeting. However, budget documentation still suffers from a lack of data and analysis on financial assets, budget risks and data on medium-term budgeting. Public access to budgetary information still falls short of expectations, due in particular to the relatively late publication of documents. This is equally reflected in the latest (2021) Open Budget survey, where Morocco scores 48/100. A transparency score of 61 or above indicates a country is publishing sufficient information and data to support informed public debate on the budget. Enhancing revenue management to accelerate the NDM roll-out: scaling-up of RA#2 13. Resource mobilization remains critical for the achievement of NDM objectives, improvements of service delivery and to address financing needs. The NDM estimates that an additional government spending per year should reach 10 percent of GDP by 2030. Customs are following suit with the approval of a " Strategic Plan of the Customs and Indirect Tax Administration 2024-2028", as is the General Tax Administration with a new strategy 2024-2028. Revenue mobilization also involves entities across government, such as non-commercial establishments with renewed efforts to improve revenue collection to finance critical services to citizens. Concurrently, the GoM intends to leverage its immoveable assets for revenue generation (and investment promotion). This includes leasing out properties to private tenants, selling surplus or underutilized assets, and exploring opportunities for joint ventures and development projects. 14. At the local level, the GoM is committed to strengthening financial autonomy of local governments – especially municipalities – and pursue the decentralization agenda initiated in 2015 and emphasized by the 2021 NDM. The success of the decentralization agenda hinges on ensuring steady resources to the largest municipalities of the Kingdom where 64 percent of the population resides (concentrated in the ten largest cities). Local taxes represent 80 percent of revenues in these municipalities. In 2020, the enactment of law 07-20 reforming the local tax governance framework aimed to improve collection of state-managed local taxes. Along with the digitization of the collection process for taxes managed locally, the reform was supposed to boost municipalities’ revenue. While the 6 Ref. ongoing Public Finance Review (Morocco Key Fiscal Developments and Issues: A Series of Fiscal Notes as Background to Public Finance Review; June 2023). 7 Issues also transpiring in the Municipal Performance Program (P168147). 16 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) reform is now effective, the government is committed to expand the local tax base of municipalities and ensure their financial autonomy by further exploring options to broaden the tax base and improving interoperability of systems between the Integrated Revenue Management System for Local Governments (Gestion Intégrée de la Recette, Collectivités Territoriales [GIR-CT]) and key partners (water and electricity distributors, national council of notaries, etc.). 15. The proposed AF is well aligned with the World Bank Group Country Partnership Framework for Morocco FY19–FY24 (CPF) (Report No. 121039-MA), and extended to FY2025 at the Performance and Learning Review (PLR) stage. ENNAJAA is the primary mechanism for operationalizing the CPF’s governance and citizen participation foundational pillars, comprising objective 11 (“improve the efficiency of public spending”) and objective 12 (“improve transparency and develop the building blocks for effective citizen-state engagement”). While the pillar and its objectives have been confirmed by the 2023 PLR, their indicators were adjusted to respond to the changes in the country context: (i) CPF objective 11 on improving the efficiency of public spending will be fostered by performance-budgeting and strengthening Public Investment Management (PIM), in alignment with the ENNAJAA AF. Besides, by adding a PIM component, the ENNAJAA AF is aligned with the CPF objective 11.2 of improving investment management. (ii) Improving transparency and developing the building blocks for effective citizen-state engagement will be strongly supported by the ENNAJAA AF with a DLI on Budget transparency. III. PROPOSED CHANGES A. Program Boundaries 16. The PforR will continue supporting the GoM's program to enhance government performance and transparency, adopting a comprehensive approach to modernize Moroccan public administration. The focus remains on PFM and government operations modernization through digitization for better service delivery. The program encompasses strategies and legislative reforms, including the 2015 LOF, public procurement reform, the Advanced Regionalization Act, and the Digital Development Agency’s (ADD) 2025 strategic orientation. The expansion of the program includes proposed amendments to the LOF, and the State Domains Directorate’s (DDE) 2022-2026 strategic plan. 17. The proposed additional financing will prioritize public spending efficiency (RA#1) and revenue management (RA#2) for a deeper and more impactful engagement. It will deepen engagement in key economic governance reforms, leveraging the World Bank's expertise, particularly in the reform of the Organic Budget Law, informed by the 2024 PEFA and ongoing Public Finance Review (PFR). Tax management will focus on sub-national levels, and non-tax revenues through State Asset Management, as the national DGI Strategic Action Plan is still being prioritized. Although digitization remains a priority, the new national digital strategy will proceed separately from the ENNAJAA- supported program. While RA#3 (Digital administration) will remain unchanged, the AF will include digital components in other areas. Nonetheless, the AF and restructuring was an opportunity to incorporate editorial adjustments were made on DLI#8 to clarify verification elements and provide greater precision on results sought, without making substantive changes in terms of content. Table 2: ENNAJAA AF Program boundary Parent AF & Restructuring of ENNAJAA Government Program ENNAJAA Program Program 17 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) To improve performance and To improve performance and Objective transparency of government transparency of government Unchanged operations and service delivery operations and service delivery Duration 2021-2025 (extension to 2028) 2021-2025 (extension to 2028) 2024-2028 Targeted sectors: Targeted sectors: Targeted sectors: - Public spending efficiency - Public spending efficiency Sectoral - Public spending efficiency - Domestic revenue mobilization - Domestic revenue coverage - Domestic revenue mobilization - Digital services mobilization - Digital services - Digital services Geographic National As defined in POM As defined in POM boundary RA#1: Public spending efficiency RA#1: Public spending efficiency RA#1: Public spending efficiency - Local public spending - Local public spending - Local public spending (scale- - Public procurement - Public procurement up) - Performance-budgeting - Performance-budgeting - Public procurement (scale-up) - Climate-budgeting - Climate-budgeting - Performance-budgeting (scale- - Decentralization - Decentralization up) - Climate-budgeting RA#2: Public revenue management RA#2: Public revenue management - Decentralization (scale-up) - Local tax administration - Local tax administration - Public investment - Customs administration - National tax administration management (new) - Open budget (new) RA#3: Digital administration RA#3: Digital administration - Gender-budgeting (new) Results areas - Digital services - Interoperability - Interoperability - Open Data RA#2: Public revenue - Open Data management - Local tax administration (scale-up). - National tax administration (scale-up) - Active asset management and revenue increase from State Domaine (New) RA#3: Digital administration - Interoperability - Open Data Overall - Initial prg: Est. US$625 million US$450 million US$250 million Financing - Scaled-up prg: US$992 million 18. Core activities under result Area 1 remain as per the parent Program8 with scale-ups as per the program boundaries outlined above. These focus on the support for the implementation of the Organic Budget Law and the strengthening of the value for money in public procurement. Some activities are scaled-up such as the adoption of quality standards of performance indicators and a management control charter, or the integration of gender and climate responsive considerations into the Borrower’s results-based budget. New activities under the AF include: (a) the implementation of management 8Under the parent program, these include: (a) the adoption of quality standards of performance indicators and a management control charter; (b) the reform of the budget structure of the Regions, including a performance-based classification; (c) the integration of gender and climate responsive considerations into the Borrower’s results-based budget, including the provision of training on gender-budgeting to selected ministries; (d) the upgrading of the Borrower’s public procurement database; and (e) the preparation of an Open Contracting Data Standards readiness study. 18 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) controls for program budgeting, (b) the strengthening of budgetary unity through the rationalization of CST, (c) the implementation of financial management instruments to non-commercial establishment in view of LOF amendments, (d) the identification of expenditures under regional development programs (at project level) in the Integrated Financial Management System (GID), (e) the publication of citizen budgets at regional and municipal levels, (f) the roll-out of an Open Budget Platform, (g) the roll-out of a multi-year action plan aimed at increasing budget transparency, and (g) the upgrade of the Istithmar public investment monitoring platform. 19. Under results area 2, while core activities remain9, scale-up is limited and program scope increase is met mostly through new activities, including: (a) the preparation of the new reform law on local taxation, (b) the upgrade of the revenue recovery Code for non-commercial establishments, (c) the upgrade of the State Domain GIS platform, and (d) the elaboration of risk mapping for revenue collection for State Domains. B. Expenditure framework 20. The proposed Additional Financing consists of US$ 250 million of IBRD financing, complemented by a government contribution of US$ 117 million. It will thus scale up the overall program volume from US$ 625 million to US$ 992 million. Table 3: Program Financing (in US$ million) Original Financing Source AF Total Program BORROWER/RECIPIENT 175 117 292 IBRD/IDA 450 250 700 OTHER - - - TOTAL 625 367 992 21. Execution of current expenditure framework. A financial reconciliation has been conducted between the expenditures of the parent operation and the disbursements to date. The Actual expenses incurred over 2022 and 2023 amount to MAD 1,133,171,310, equivalent to EUR 104,661,875. This exceeds disbursements (net of advances) made by the World Bank to date, which totals EUR 94,509,600, (including advances, disbursements stand at EUR 167,030,000). 22. AF & restructuring are underpinned by an extended expenditure framework consisting of: (i) budgetary allocations from the Ministry of Economy and Finance (MEF) that are focused on implementing result-driven budget reforms and enhancing the management of public revenues – and include activities linked to budgetary transparency and public investment management; (ii) projects under the State-Region Program Contract for Fez Meknes, which contribute to the region's economic development and aim to reduce social and territorial disparities; and (iii) the proactive management of assets and the increase of revenues from the State Domaine. The provision of additional funds would facilitate the scaling up of the Program's deliverables, thereby augmenting the efficacy of a program that is already yielding positive results. 9 These include: (a) the roll-out of a multi-year risk management action plan aimed at ensuring increased tax compliance; (b) the strengthening of the data sharing with the tax administration through the interoperability of relevant platforms; (d) the introduction of digital tools to pay taxes and the digitalization of back-end processes; and (e) the upgrade of the GIR-CT system to synchronize central government systems with municipal systems. 19 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 23. Updated expenditure framework. The AF has the same financial structure as the original program, except for minor adjustments. The DAGG will be excluded from the expenditure framework for RA#1 because it has been integrated into the MEF thereby ceasing to exist as an independent unit. DGI is being removed from the expenditure framework for RA#2 as it will not form part of the scale-up of activities. Expenses related to RA#3 (ADD, MNTRA) will also be excluded from the expenditure framework. The budget lines from DB, Department of Administrative and General Affairs (DAAG), Authority for customs and indirect taxes (ADII), and Treasury General of the Kingdom (TGR) will maintain support for RA#1 and RA#2, in conjunction with projects under the State-Region Program Contract for Fez-Meknes. Additionally, the Special State Reemployment Fund (FRD) managed by the Directorate of the State Domaine (DDE) of the MEF, will support RA#2. This account is tasked with the administration of revenue generated from the sale or leasing of state property, with the intent to redirect these funds towards targeted objectives, such as the enhancement of public real estate or the support of public benefit initiatives. The FRD is integrated into the state budgetary process, with its allocations adjusted annually to reflect the developmental needs and decisions of the government. Acquisition of administrative building is the relevant budget subline for the revised Program boundary, and suitable as per fiduciary and ESF assessments. The inclusion of the Directorate of Public Enterprises and Privatization (DEPP), as a new implementing entity with new DLIs under RA#1 and RA#2, is planned, but it will not be integrated into the PEF. Table 4: AF Program Expenditure Framework Parent AF PForR AF AF202 AF202 Total 202 2021- 2026 7 8 amount 5 Type of 2025 RA Ministry Depart. Budget Program expenditure (Mill (Mill (Milli (Million ion (Millio (Million ion on US$) US$ n US$) US$) US$) US$) ) MEF P115 Economic policy and public 5.7 0.5 0.5 0.5 0.5 7.7 DB General Budget – Investment finance strategy MEF DAAG and Operating P130 Steering and Management 84.6 4.7 4.7 4.7 4.7 103.4 expenses (GB – RA1 MEF P117 Execution of public 32.4 0.8 0.8 0.8 0.8 35.6 TGR OP) expenditure and public accounting MI Fes- 352.0 77.7 77.7 77.7 77.7 662.8 Investment Meknes Signed contracts projects Region TOTAL RA1 474.7 83.7 83.7 83.7 83.7 809.5 MEF P116 Facilitating and securing trade 47.7 0.3 0.3 0.3 0.3 48.9 ADII and consumer protection GB – OP MEF P118 Tax revenue mobilization and 45.3 45.3 DGI collection RA2 MEF 3200113003: 7.9 7.9 7.9 7.9 31.6 P119 Management of the State State DDE Private Domain: 20 – Acquisition of Reemployment administrative building Fund TOTAL RA2 93.0 8.2 8.2 8.2 8.2 125.8 MEF DAGG GB – OP P140 Steering and Management 5.3 5.3 MTNRA 17.0 17.0 P124 Administrative reform and DRA GB – OP RA3 improvement of public services ADD GB – OP P429 Digital Economy 35.0 35.0 TOTAL RA 3 57.3 57.3 Total Parent PForR and AF 625.0 91.9 91.9 91.9 91.9 992.6 20 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) C. Changes to the results matrix 24. At PDO-level, indicators are changed to reflect the amplified ambitions and scope of the program. For the three original PDO-level indicators, targets are updated to reflect increased ambition. Two new PDO level indicators are added to reflect new areas covered under the additional financing. Table 5: Changes to PDO-level indicators. PDO-level indicator under the Current Revisions / additions Rationale parent Program achievements The increased ownership of performance Share of performance projects by ministerial departments – notably indicators for which annual 48% (Target Increased target to 55% through the application of management targets have been achieved 50% in 2025) charters and quality standards (DLRs #1.3 and (with a target of 50%) #1.4) – underpins increased ambitions. Share of gender-related indicators for which targets 41% (Target Increased target to 55% As above. have been achieved (with a 50% in 2025) target of 50%) Increase revenue from local 22% (Target Past trends suggest that the target needs to taxes in targeted municipalities Increased target to 20% 20% in 2025) be recalibrated upwards. (with a target of 8%) Addition of a new indicator on This indicator is also a DLI and would capture increased revenues from State the increased capacity of central - Assets mobilisation (excluding administration in managing revenue Innovative financing): +8 percent collection in line with RA#2. yearly. Addition of a new indicator on Morocco’s rating under the - Open Budget Survey: objective is As above to reach 61/100, from current 48/100 rating 25. At the level of intermediary indicators, changes are made to capture the increased scope covered by the program. The number of ministries supporting common indicators is increased to reflect the commensurate increase in the related DLI, while the target related to Climate Sensitive Budgeting is reviewed downwards. Considering the scope of climate tagging and related complexities in generalizing it across the Budget, the related DLI is reviewed to include pilots between the setting of the methodology and a full-fledged climate sensitive budget. This cautious approach is taken considering that well-crafted Climate-Budget Tagging (CBT) can be critical - amongst others - for green bond issuance as considered in the Morocco Climate PforR Operation / Support to the Nationally Determined Contribution (NDC) (P178763).10 A new IRI is added on the decrease in the amounts held in CSTs (more specifically the Comptes d’Affectation Speciale – CAS). The CASs have accumulated significant balances over time, and persistently underspent their revenue. As surpluses have accumulated, they have been carried forward from year to year. As of end-2021, the accumulated balance of the CAS altogether was 10Climate Budget tagging is a critical piece to the Climate-Smart PFM arrangements in which Morocco is venturing. Other key workstreams are supported by the Climate P4R operation/support to NDC and include: (i) the alignment of the upcoming NDC to the Medium-Term Expenditure Framework in 2025/26; (ii) the development of a Green economic taxonomy, and (iii) the emission of Green Bonds. The Bank takes a holistic cross-operational view on Climate-Smart PFM, as in addition to ENNAJAA and the Climate PforR, the upcoming SOE-focused PforR operation (P181522) caters for Climate reporting by SOEs. 21 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) estimated at 9 percent of GDP.11 This potentially introduces spending rigidities and is addressed through the introduction of specific results targets under DLI#1. Table 6: Changes to Intermediate-level indicators. Considered IRI under the parent Program Status revisions / Rationale additions The number of ministries using common priority indicators for their Support Programs in From an end- Recalibration of indicator based on DLI line with the standards outlined the circular Modified target of 11 to 37 scale-up. Annual summary of Performance Projects published. (#) Considering the technical difficulties in generalizing climate budgeting, the process will include periods of piloting across critical ministerial departments. Annual Climate Sensitive Budget published (#) Modified From 2 to 1 This decrease reflects what is realistically possible to ensure that Climate- budgeting is conducted with the necessary quality. A target This indicator will reflect the decline, Decrease in the proportion of tax revenue downward trend over time, in tax revenues allocated to allocated to CASs compared with tax revenue New of -0.5% per the CAS. This will strengthen the unity of allocated to the General Budget. (I.e. observing annum, relative to the budget and improve budgetary a downward trend over time). the reference year. flexibility. 26. The Theory of Change (TOC) remains the same as for the initial program, bar the addition of public investment management as a key challenge under RA#1 and the utilization of State assets for revenue management for RA#2. The graph below presents the overview of the TOC focusing on the AF. A detailed TOC is presented in the addendum to the addendum to the technical assessment. 11 World Bank (2023). Morocco Key Fiscal Developments and Issues: A Series of Fiscal Notes as Background to Public Finance Review. 22 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 23 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) D. Changes to Disbursement Linked Indicators 27. A readiness assessment was applied in the selection of sub-areas to be supported through DLIs. The assessment looked at the (i) level of dialogue depth, analytical backing and strengthen of strategic anchors, (ii) maturity for implementation, (iii) ownership by ministerial units carrying out the bulk of the work, and (iv) the value added of World Bank support. Overall, three new DLIs with 8 DLRs are introduced under the AF. For existing DLIs, scaled-up actions are captured in 12 new/revised DLRs. Table 7: DLIs and strategic references ENNAJAA AF amount Strategic references / Analytical Amount (US$ DLIs underpinnings (US$ million) million) Results Area #1 - MEF Perf. Program 115 Scaled-up DLI 1: Strengthening the performance approach - LOF proposed amendments. 62 50 introduced by the LOF - Bank TA - PEFA & PFR - Parent program Restructured DLI 2: Introducing sustainable and equitable - Gender PEFA 50 28 budgeting - MEF Perf. Program 115 Scaled-up DLI 3: Enhancing the Decentralization agenda - Advanced Regionalization Act 50 36 by strengthening regions’ public investment management - National tax conference Scale-up DLI 4: Improving the efficiency of public - Art. #6 Decree no 2-22-431 42 8 procurement through data production and analysis - MEF Perf. Program - MEF Perf. Program 115 New DLI 9: Improving budget transparency - PEFA 2023 (PI-11) - 37 - PEFA & PFR - MEF Perf. Program 115 New DLI 10: Improving the programming, monitoring, and - PEFA Pilar II & PI-9 - 25 transparency of public investments. - Open Budget Survey - PEFA & PFR Results Area #2 Scaled-up DLI 5: Improving tax compliance and revenue - PP prg 116 50 15 collection performance Scaled-up DLI 6: Increasing revenue of municipalities - 2021 Tax framework law 80 8 New DLI 11: Enhancing the value of state-owned property - PP prg 119 - 43 - DDE strategic plan Results Area #3 No changes on content to DLI #7 - 56 - No changes on content to DLI #8 - 60 - TOTAL 450 250 Results area 1: 28. DLI#1 “Strengthening the performance approach introduced by the LOF” will be expanded in scale and duration. Pending the validation of ongoing verifications on DLR#1.3 and DLR#1.4 (against which there have already been partial disbursements) under the parent operation, DLI#1 will be fully achieved and disbursed against by June 2024. These early achievements are mostly due to the acceptance of the performance mindset by the MEF, and high capacity in delivering on results. Thus, DLR#1.4 will be scaled up, bringing the number of ministerial departments having implemented their management charters 24 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) from 10 to 19 (DLR#1.5). A new DLR (#1.6) is introduced to bring to 16 the number of ministerial departments with clear guidelines for the implementation of management control. Management control implies having a clearly defined steering tool for program managers and those responsible for operational program budgets to ensure that budgetary resources deployed are in line with the performance objectives pursued. Streamlining performance equally requires a more efficient budgetary management, and the reduction of fiscal fragmentation. A new DLR (#1.7) is introduced for the rationalisation of CSTs through the (i) introduction of a rule capping tax revenues earmarked to CAS and (ii) the reduction of CAS earmarked tax revenues in proportion to general budget tax revenue. Last, with the aim of consolidating efforts to improve public financial management, the new DLR#1.8 will focus on increasing the number of SOEs12 adopting a management instrument (such as general accounting rules, etc.) to modernize their financial management based on Financial Control Law 69.0013. This will improve oversight from the MEF and help it better gauge budgetary and financial performance. Table 8: DLI#1 Strengthening the performance approach introduced by the LOF US$ US$ DLI 1 Status million million Parent AF DLI #1: Strengthening the performance approach introduced by the LOF Scale-up 62 50 DLR 1.1: the MEF has issued a circular (or equivalent administrative/legal act) - Achieved 10 establishing the quality standards to be met by the Performance Projects. DLR 1.2: the MEF has issued a circular (or equivalent administrative/legal act) Achieved - 10 establishing a model of management charter. DLR 1.3: Eleven (11) ministries have implemented at least two quality - standards laid out in the MEF’s circular (or equivalent administrative/legal) Under verification 22 mentioned under DLR. 1.1. Project Parent: Partially DLR 1.4: Ten (10) ministries have adopted the management charter referred achieved / Under 20 - to in DLR#1.2. verification. DLR 1.5: Additional nine (9) ministries have adopted the management AF: Scale-up of 1.4 - 5 charter referred to in DLR#1.2 DLR 1.6: Sixteen (16) ministries/institutions have elaborated a New - 10 roadmap/guidelines for implementing management control. DLR 1.7: Streamlining of the management of Special Appropriation Accounts (CAS) through: a. Introduction of a capping rule for earmarked tax revenues New - 26 b. Reduction of earmarked tax revenue in proportion to general budget tax revenue, annually. DLR 1.8: Nine (9) SOEs (Etablissements et Entreprises Publiques) have - adopted at least two additional instruments to modernize their financial New 9 management as further described in the Program Operational Manual (POM). 12 Under ENNAJAA, the focus will be on SOEs under the DEPP’s purview, i.e., public establishments (Etablissements publics) and SOEs under the general State’s budget and under control of the State. 13 This DLR is aligned with DLI#4 of the SOE Governance, Performance and Competitive Neutrality in Morocco PforR (P181522) which aims to ensure the implementation of financial control reform through (i) the finalization of the legislative framework for financial control in line with Morocco's EEP reform; (ii) the introduction of intelligent criteria for the systematic monitoring of SOE performance, and (iii) the implementation of digitization initiatives to streamline law enforcement. Operation P181522 focuses on improving the governance and competitive neutrality of SOEs, covering both commercial and non-commercial entities in application of the SOE framework law 50.21. Here the focus is on non-commercial entities subsidized by the State or benefitting from other earmarked public revenues, in particular on improving financial management of such entities as seen from a MEF perspective in order to capture their budgetary performance aspect in line with the LOF. 25 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 29. DLI#2 “Introducing a Climate sensitive Budget” is restructured and expanded to become “introducing sustainable and equitable budgeting”14. DLR#2.1 remains unchanged, focusing on the methodology, definition and scope of application of climate budgeting. DLR#2.2 is changed, to cater for a pilot of CBT across 3 ministerial departements, and DLR#2.3 on the publication of a climate sensitive budget, in compliance with the circular. This more gradual approach ensures that CBT will be tested and evenutally corrected to ensure (i) it is adequate for generalisation across ministerial departments, and (ii) that it will be robust enough to inform the alignment of the Nationally Determined Contribution (NDC) with the medium term expenditure framework and the development of Green bonds – both of which are pursued and supported by the Morocco Climate PfoR / Support to NDC 15 (P178763). In practive, the restructuring will mean that the publication of the first full climate budget will be postponed by one year. DLR#2.4 is based on findings from the Gender component of the 2024 PEFA suggesting the need to strengthen gender tagging over medium term budgeting, and its application in an incremental manner. Table 9: DLI#2 Introducing sustainable and equitable budgeting US$ US$ DLI 2 Status million million Parent AF DLI #2: Introducing sustainable and equitable budgeting Restructured 50 28 DLR 2.1: The MEF has issued a circular establishing the procedures, the calendar, Restructured 5 - definitions and scope of application of climate budgeting. DLR 2.2: Adoption of climate tagging in the budgets of 3 ministerial departments New 20 - DLR 2.3: Publication of a climate-sensitive budget in line with the circular in Restructured 25 - DLR#2.1. DLR 2.4: The MEF rolls out Gender budget tagging through: a. integration of gender tagging in three-year budget programming pursuant to the Chef du Gouvernement’s circular on drawing up three- year budget programming proposals, or any other circular or equivalent New - 28 act on gender marking. b. application of the gender marking methodology by eight (8) ministerial departments. 30. DLI#3 on “Enhancing the Decentralization agenda by strengthening regions’ public investment management” is scaled-up. At the time of appraisal of the parent Program, little progress had been made on the back of the 2015 Regionalization Act to empower the regions, which are due to become a key territorial layer of public action for development. Advances have been made over the past years notably through improvements in real-time monitoring and steering of financial and physical execution of Regions’ public investment projects. However, it is critical to further support a better use of public resources by linking regional budgets to results and improving their multiyear investment programming. Indeed, regions’ public investment execution is the highest priority – as Regions’ spending is mostly on public investment (est. 90 percent) with gaps in execution and monitoring. Against this backdrop, DLR#3.1 (restructured in July 2023) on the three-year budgeting of each public investment projects 14 While they are not the same processes, both gender and climate tagging have similar approaches. In addition, they are embedded as per the Paris Agreement where governments acknowledge that adaptation action should follow not only a country-driven, but also a gender-responsive approach (article 7.5). 15 Ref. Roundtable Discussion: Climate Budget Tagging and Engaging with Investors, World Bank September 13, 2022: “While CBT has been developed independently of countries’ funding strategies, it can also help identify eligible expenditures or performance indi cators that back thematic bond issuance, facilitating tracking, monitoring and reporting”. 26 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) programmed in their Regional Development Plans (RDP) is currently under verification. DLR#3.2 concerning the operationalization of the RDP investment monitoring platform (including investments contracted between the State and the Region) is underway, and DLR#3.3 concerning the half-yearly publication by 3 Regions of information reports on investment execution should follow. However, considering delays in the implementation of a Grievance Redress Mechanism at the level of the region a restructuring of this DLR is proposed. Out of the $30m allocated to this DLR, $20m would be directly linked to relevant achievements by the Region of Fes-Meknes with the implementation of the GRM as a pre-requisite for disbursement. 31. A new DLR #3.4 will complement the RDP monitoring platform with a sustainability reporting dimension focusing on Sustainable Development Goals (SDGs) which should be backed by automatic feeds with data from the accounting systems used by the regions. This will ensure that the data captured by the platform is more up to date, complete, and reliable for decision making and monitoring. DLR #3.5 will promote better access to management data in an appropriate form for improved monitoring and oversight of regional spending. The adoption of the GID IFMIS system by Regional Project Execution Agencies (AREP) will greatly improve financial reporting of regions, as close to 40 percent of their budget is managed by AREPs. Bearing in mind that the GID system is managed by the TGR, and that the AREPs fall under the oversight purview of DEPP the ENNAJAA Program provides a critical coordination platform for these entities. Last, DLR#3.6 reinforces transparency and citizen outreach through the annual publication of a citizen's budget by at least 6 of the 14 largest municipalities, and by at least 6 Regions. Table 10: DLI#3 Enhancing the Decentralization agenda by strengthening re gions’ public investment management US$ US$ DLI 3 Status million million Parent AF DLI#3 - Enhancing the Decentralization agenda by strengthening regions’ public Scaled-up 50 36 investment management DLR 3.1: Publication of an MI’s circular requesting Regions to present three-year Under budgeting of each public investment projects programmed in their Regional 5 - verification Development Plans and State-Region Contract DLR 3.2: The platform monitoring Regional Development Plan with functionalities described in the POM including performance indicators, is operational in at least 3 Pending 15 - Regions DLR 3.3: Timely publication of two semestrial financial and physical public investment Not yet due execution reports as per described per the POM: / 30 - a. By the region of Fes Meknes Restructured b. By two additional Regions DLR 3.4: The platform monitoring Regional Development Plan is enhanced for improved reporting and sustainability monitoring: a. Accounting identification at project-level through GID is operational. New - 14 b. A module for monitoring the Sustainable Development Objectives of projects is operational in the PDR monitoring platform. DLR 3.5: Extension of GID and GIR-CT accounting and budget management information systems: a. Six Regional Project Execution Agencies (AREP) in the program area have adopted and are using the GID and GIR-CT systems. New - 12 b. The DGCT and the Directorates General Services of the six (6) Regions and of the six (6) largest Municipalities have access to GID reporting information system data for consultation (with a maximum of a one-week lag). DLR 3.6: Annual publication of a citizen's budget by six (6) largest Municipalities, and six New - 10 (6) Regions on their websites. 27 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 32. DLI#4 “Improving the efficiency of public procurement through data production and analysis” is scaled up. The proposed new DLR#4.4 involves the complete digitalization of documents following contract awards via the public procurement portal (Moroccan eGP System). This initiative will mark a significant advance in public procurement management by creating a seamless, paperless process from start to finish, enhancing the efficiency of contract preparation, awarding, and execution. Presently, the lack of interoperability between different information systems, specifically between the eGP system and the Government Integrated Disbursement and Information (GID) system, hinders integrated analysis of public procurement activities. Although the eGP system manages early stages of procurement activities electronically, later stages after contract awards continue to be paper based, incurring extra costs and increasing the risk of document and data loss or corruption. The envisioned system is set to fully digitize the public procurement lifecycle, thereby abolishing the use of paper. This advancement will not only facilitate the generation, preservation, and dissemination of electronic documents but will also enhance data security and integrity via electronic signature protocols. Transitioning to a wholly digital framework is anticipated to improve both the efficiency and transparency of Morocco’s public procurement operations. Table 11: DLI#4 Improving the efficiency of public procurement through data production and analysis US$ US$ million DLI 4 Status million Parent AF DLI #4: Improving the efficiency of public procurement through data production Scaled-up 42 8 and analysis DLR 4.1: The TGR has upgraded the procurement database under terms of reference Achieved 20 - set forth in the POM to inform the future national procurement observatory Under DLR 4.2: The national procurement observatory is operational. 16 - verification DLR 4.3: Six statistical reports of the national procurement observatory have been Not yet due 6 - published. DLR 4.4: Digitalization of the post-contract award documents New - 8 33. Under RA#1, a new DLI#9 will support budget transparency. This new DLI will bring further emphasis to the transparency objective of the PDO. It is warranted by the opportunity and government willingness to improve Morocco’s rating under the Open Budget Survey (OBS). At a score of 48 in the 2021 OBS, Morocco is rated below the score of 61 deemed reflecting the “publishing [of] enough material to support informed public debate on the budget” and ranks 2nd behind the best regional performer (Jordan with a score of 61) despite progress in the past 10 years (its score was 38 in 2012). Paradoxically, disclosed budget information in Morocco is deemed far more comprehensive that in most other MENA countries across a range of budget documents. The DLI consists of three DLRs: one (DLR#9.1) on the publication of a Citizen's Budget for the mid-year budget execution phase; a second (DLR#9.2) on the launch and functioning of an open budget platform providing the public with online access to budget information; a third (RLD No. 9.3) on the adoption and implementation of an action plan to enhance budget transparency. The implementation of an action plan on budget transparency supports the improvement of the OBS score and integrates other actions that take into account Moroccan specificities. The process of defining the action plan will bring together all entities involved in budget transparency at the central level (DB, Directorate of Treasury and Exterior Financing (DTFE), Directorate of Studies and Financial Forecasting (DEPF), ADII, DGI, TGR, DEPP), which will foster greater cooperation and enable the distribution and definition of roles and responsibilities in this regard. 28 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Table 12: DLI#9 Improving budget transparency US$ million DLI 9 Status AF ILD #9: Improving budget transparency New 37 DLR 9.1: Publication of a Citizen's Budget for the mid-year budget implementation phase New 3 DLR 9.2: The Open Budget Platform is functional New 10 DLR 9.3: (a) Adoption and (b) implementation of an action plan up to 60% to improve budget New 24 transparency 34. A new DLI#10 on improving Public Investment Management is introduced. The 2024 PEFA evaluation underscores the need for enhancing public investment management. The Budget Directorate, in collaboration with the OECD, is evaluating and enhancing Morocco's PIM system. This encompasses creating a comprehensive PIM guide encompassing all facets of the investment cycle, gradually implemented by various bodies including ministerial departments, State-Owned-Enterprises (SOEs), and parastatals. The DLI will strengthen PIM through three DLRs within the DLI. DLR 10.1 focuses on implementing regulations for public investments in the LOF. DLR 10.2 involves aligning the Istithmar platform with programming module for triennial budget programming and the draft budget law (PBT and PLF). DLR 10.3 aims to improve the linkage between project planning and execution, establishing a connection between investment projects planned through the budget law and facilitated by Istithmar through "e-budget 2," and their subsequent budget execution in GID. A pilot test will be implemented in a first phase to three ministerial departments/ public entities, and second, expansion to departments overseeing significant investment projects. As the PIM reform rolls out and investment projects improve their reporting, the involvement of the DEPP as a new implementing agency of the ENNAJAA program, will become increasingly important, in order to capture public investments led by entities under the DEPP’s purview, which accounts for a significant part of public investments. Table 13: DLI#10 Improvement of the planning, monitoring and transparency of public investments US$ million DLI 10 Status AF DLI #10: Improvement of the planning, monitoring and transparency of public investments New 25 DLR 10.1: Introduction of a rule for prioritizing public investments in the draft amendment of the New 8 Organic Law of Finance submitted to the SGG. DLR 10.2: The Isthitmar Platform is interoperable with budget programming modules of the New 5 Triennal Budget Program (PBT) DLR 10.3: A link is established between the investment projects programmed by the Budget Law and supported by Istithmar, and the execution of their budget appropriations in GID: a. Piloting for 3 pilot ministerial departments/entities. New 12 b. Extension to (10) ministerial departments/entities with major investment projects as defined in the verification protocol. Results area 2: 35. DLI#5 is scaled-up and slightly amended to cater for a greater scope in terms of revenue administration, to “Improve tax compliance and revenue collection performance” (from “Improving tax compliance and performance of the tax administration”). This change reflects a focus on revenue administration beyond tax administration and DGI. The new DLR No. 5.5 targets to increase the percentage of revenue collection from SOEs covered by the State budget. It specifically focuses on implementing the latest amendment to the Recovery Code to facilitate the collection of taxes and levies, a task that presents challenges, and targets an annual increase rate of revenue collection of 10 percent over the program duration, for a population of 20 public establishments. 29 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Table 14: DLI#5 Improving tax compliance and revenue collection performance US$ US$ DLI 5 Status million million Parent AF DLI#5: Improving tax compliance and revenue collection performance Scaled-up 50 15 DLR#5.1: The MEF has adopted a multi-year action plan to improve tax compliance Achieved 10 - DLR#5.2: A national tax compliance management and risk analysis unit in the MEF is Achieved 10 - created and operational DLR#5.3: A tax compliance risk management committee is operational. Achieved 10 - DLR#5.4: Based on the actions proposed by the national tax compliance management Under and risk analysis unit by March 31, 2024, 60% of the actions proposed have been subject 20 - verification to decision for action. DLR#5.5: The collection rate of non-commercial establishment’s (établissement et entreprise publique) revenue increased by 10 percent for at least 20 establishments New - 15 (cumulative). 36. DLI#6 on “Increasing resources of municipalities” is scaled-up. DLI#6 set the basis for clearer attributions with respect to management of the local tax system, clarifying the involvement of the General Directorate Tax (DGI), the TGR and the General Directorate of Local Governments (DGCT) with respect to local taxes and enhancing coordination among them. Such attributions are critical for the roll- out of Law 07-20 on local taxation. As such, DLRs #6.1 and #6.4 focused on the operationalization of Law 07-20 on local taxation, which specializes the TGR in the management of property tax and housing tax, and DGI in the management of the local business tax. DLR#6.2 concerned the Local Revenue Information System (GIR-CT) tax and license fees management functionalities, while DLR#6.3 the application of remote declaration and payment for all communal taxes. Law 07-20 is however a milestone on the road to in-depth reform of local taxation. Such a reform is due to be completed no later than 5 years after the promulgation of framework law 69-165 (July 21, 2021) on tax reform, in line with the orientations of the National Tax Conference (Assises nationales de la fiscalité) held in 2019. The new DLR#6.5 aims at accelerating the reform through a comprehensive draft reform of local taxation and licenses in accordance with framework law 69-19 on tax reform. Table 15: DLI#6 Increasing municipalities revenue US$ US$ DLI 6 Status million million Parent AF DLI#6 – Increasing municipalities revenue Scaled-up 80 8 DLR 6.1: The Borrower’s has published an arrêté implementing article 6 of Law 07-20 on Achieved 6 - local taxation management DLR 6.2: Interfacing functions of the GIR-CT with local systems is implemented in at least 100 large Municipalities enabling these Municipalities to manage the entire local Not yet due 40 - taxation chain of operations. DLR 6.3: The electronic declaration and payments system for municipal taxes is Not yet due 10 - operational. DLR 6.4: The new governance framework mandated by article 6 of Law No. 07-20 is Not yet due 24 - operational in 400 Municipalities. DLR 6.5: Pursuant to framework law 69-19 on tax reform, a reform of local taxation and New - 8 fees is submitted to the General Secretariat of the Government 37. A new DLI#11 is introduced: “Enhancing the value of state-owned property”. Effective management of state private assets is important for economic development, service delivery as well as resource optimization. These assets, comprising land, buildings, and real estate, must be managed 30 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) efficiently to maximize their value, i.e., translating into additional revenue, job creation, more private investment or ensuring it backs-up critical state services. The MEF’s State Domains Directorate (DDE) has identified in its Strategy 2022-2026, three critical objectives: (i) improving active asset management, (ii) collecting and digitizing geographic data and (iii) improving State revenues. DLR#11.1 will support the collection and digitization of geographic data via the GIS platform to better capture the base of State Private Domaine. DLR#11.2 will improve land matriculation in the program area. Most importantly, critical measures in addition to the above will lead to an increase in revenues generated by the State's assets over the medium-term period (DLR#11.3), and include framing DDE’s engagement through (i) the submission of a draft law on the State Private Domain to the SGG and its related implementation decrees, as well as the (ii) design and implementation of a risk mapping for the revenue circuit managed at DDE level – providing greater assurances for (iii) increased revenue collection. Table 16: DLI#11 Enhancing the value of state-owned property US$ million DLI 11 Status AF DLI#11: Enhancing the value of state-owned property New 43 DLR 11.1: The DDE has collected and digitized graphic data via the GIS platform in the program area. New 10 DLR 11.2: The DDE has achieved annually at least 90% of defined targets in terms of land area subject to the registration procedure (procédure d'immatriculation) in the Program Area annually, New 9 during three (3) CYs DLR 11.3: The DDE improved revenue collection through: a. The MEF has submitted (a) the draft law on the State Private Domain to the SGG and (b) the related draft implementing decrees for submission to the SGG. b. The DDE has drawn up and implemented a risk mapping for the revenue circuit managed New 24 at DDE level, together with an action plan for implementing related measures. c. The annual increase in revenues generated by the State's assets averages at least 7% in relation to the target defined in the Finance Law (excluding innovative financing 16) within the program area for a period of two years. Result area 3: 38. DLI#8 has undergone editorial changes without changing its scope, in order to better specify the expected results. More specifically, it has been changed from "Improving the proactive disclosure of open government data" to "Improve proactive communication of open public data". Specific changes to related DLRs are presented below. A similar change has under been made to DLR#7.8. Table 17: Changes to DLRs under results area 3 Parent Program Restructuring List of potential interventions to be implemented for open List of priority actions to be implemented for open data is DLR data is established by the Open Data Steering Committee established by the Open Data Steering Committee in 8.1 in consultation with non-government stakeholders. consultation with non-government stakeholders. DLR (a) The COPIL’s membership is extended to include actors (a) The COPIL’s membership is extended to 16 Excluding “innovative financing” which include general budget/land reallocation fund/agrarian reform fund receipts as defined under the 2024 Performance Budget Indicator of the MEF. Innovating financing schemes are essentially asset monetization processes. Introduced by the 2019 Finance Law, they are centered on active management of the State's real estate assets and consist in selling functional buildings to institutional investors (CDG, pension fund) while preserving their public service use through long-term leases. Revenues are accounted for as non-tax incomes. Rents are paid once property titles have been exchanged creating a future liability. The buying entity uses the assets to raise money in the markets through an investment vehicle. To this end, real estate transactions involving 98 properties in the State's private domain were concluded in 2022 with real estate investment trusts (OPCI) managed by AJARINVEST, a CDG subsidiary raising an additional DH25,068,766,350.00 in financing (DDE Annual Report 2023). 31 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 8.2 identified in the ODRA; and (b) the COPIL has: (i) defined include actors identified in the ODRA; and (b) the COPIL the norms and standards for the processing and has: i) defined in guides or manuals the norms and publication of data and metadata by the public standards for the processing and publication of data and administration on the open data platform; and (ii) metadata by the public administration and institutions on adopted a monitoring and evaluation plan for the open the open data platform; and (ii) data initiative. adopted a monitoring and evaluation plan for the open data initiative. The national open data portal is operational and include The national open data portal is operational and DLR an interactive module to facilitate user participation in include an interactive module to facilitate user 8.4 quality control and rapid feedback. participation in quality control and rapid feedback. A data inventory (which includes a referencing of A data inventory (which includes a referencing of the data the data sets available in the Borrower’s selected DLR sets available in the Borrower’s selected ministries and ministries and public entities) has been developed, and 8.5 public entities) has been developed, and priority data sets priority data sets for processing and publication have been for processing and publication have been identified. identified. At least one (1) annual hackathon-type event to DLR At least one (1) annual hackathon-type event to promote promote public open data use has been organized by the 8.6 public sector data use has been organized by the ADD. ADD. 245 quality, updated, priority datasets published 245 quality, updated, saved priority datasets published free of charge with essential metadata in an open and DLR free of charge with essential metadata in an open and reusable format on the national platform data.gov.ma (or 8.7 reusable format on the platform data-gov-ma (or linked to linked to a sectoral data platform), from a baseline of 145 a sectoral data platform, from a baseline of 145 datasets. datasets. A public administration users satisfaction survey of the DLR#7.8: A public administration and institutions users’ DLR platform regarding the national interoperability platform satisfaction survey of the platform regarding the national 7.8 has been completed by the ADD. interoperability platform has been completed by the ADD. E. Other changes 39. Changes to the Program action plan (PAP) are introduced to the parent operation and AF as follows: Table 18: Changes to the PAP Action Change Link to DLI Frequency changed from semi- Report on environmental and social standards status of pipeline annual to annual, with technical No investment projects of the Fes-Meknes region assistance Appointment of environmental and social focal points among Addition of DDE and DEPP No relevant stakeholders Adopting a training curricula and 3-y training action plan on Adopting a training curricula and 3-y Performance Projects, Regional Budgeting, Gender, Climate training action plan on Climate DL#1 / DLI#2 budgeting, Procurement. budgeting Adopting Procurement reforms Action Plan based on MAPS. Marked for deletion DLI#4 Marked for deletion given that the Monitor through periodic reports, the effective implementation of new Ministry’s national digital - the newly approved strategy “2025 ADD NOG.” strategy is replacing the ADD’s NOG. Validation of the Open Data Readiness Assessment Report and Marked for deletion - publication of its synthesis by the ADD. Adopting a communication plan on risk mapping within the DDE New DLI#11 Adapting DDE’s procedure manual on revenues with the risk New DLI#11 mapping E&S management system strengthening (E&S guide update, E&S Update of current PAP - staff strengthening, awareness raising and consultations); 32 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Strengthening the implementation and follow-up of the environmental and social management system (apply procedures Extension to new entities to the - and mechanisms to the new activities, capacity building and Program. consultations) New (more targetted than previous Roll out of the GRM specifically for the Fes Meknes component DLI#3 actions on GRM) Improve coordination with ministerial departments/institutions a in relation to management and monitoring of allocations achieved on the Fund (FRD) and (Periodic assessments to evaluate the New DLI#11 implementation of the provisions of the Prime Minister's Circular 2/202117) Strengthen internal audit missions within DDE: (i) develop a risk mapping to support the internal audit program; New DLI#11 (ii) schedule an internal audit mission covering the acquisition of administrative buildings Updating the Environmental and Social Technical Manual and New setting up an E&S reporting system 40. The E&S arrangements for the AF will be slightly adjusted to (i) exclude the ADD and MATRA and (ii) include the newly added implementing agencies: Direction des Domaines de l’Etat (DDE); Direction des Etablissements Publics et de la Privatization (DEPP) et l’Administration des Douanes et des impots indirect (ADII). New focal points from DDE, DEPP and DADII will be trained and included in the E&S monitoring and reporting mechanism. The MEF E&S focal point will continue to report on the program E&S progress and performance in close collaboration with the other implementing agencies. IV. APPRAISAL SUMMARY A. Technical 41. The results framework of the parent Program remains adequate under AF and restructuring and is revised to reflect new and revised DLIs. Revisions to the result framework (i) take stock of the achievement of targeted result to date by extending and deepening initial targets and broadening their scope and (ii) aim to support the implementation of additional PFM reforms. First, revisions to the DLI matrix extend, deepen and broaden the scope of the LOF which underpins the government program of PFM reforms by aiming at promoting budget comprehensiveness (through the capping of fiscal resources earmarked to satellite funds) and fiscal transparency (towards the increase of Morocco’s rating under the Open Budget Survey and relevant PEFA indicators). Revisions also aim at extending and deepening results achieved on domestic revenue mobilization through further reform to local taxation and by broadening its reach to revenue generation by the private domain of the state as well as revenue collection by non-commercial public establishments. 42. The DEPP’s participation to the ENNAJAA Program is key to improve public spending efficiency, beyond the scope of its specific DLRs (DLR#1.7 and DLR#5.5). The DEPP will incentivize SOEs and public establishments – especially SOEs under the General budget of the State drawing from the State – to adopt the tools to modernize their management. This will give guarantees to the State on their efficient administration and will reduce the impact on the State general budget. The ENNAJAA 17 Chief of Government's Circular No. 2/2021 of February 12, 2021, regarding acquisitions and allocations made on the State's private domain (DDE). 33 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Program will target subsidized public establishments, or benefiting from allocated resources, while the SOE PforR operation (P181522)18 will focus on reforming SOEs public portfolio in general in the light o framework law No. 50-21 published in 2021 o focusing on their governance, performance and competitive neutrality. The DEPP also plays an important role in public investment management and decentralization, as SOEs are managing a significant part of public investments, including at the regional level through the Regional Project Execution Agencies (AREP), under the leadership of their respective region but under DEPP’s oversight. Therefore, the DEPP’s role is central to help the budget department and the DGCT to improve public investment and accelerate decentralization. 43. The implementation arrangement of the parent Program has proved effective and remains unchanged under AF and restructuring. With satisfactory disbursement levels, the achievement of key intermediate results and PDO-level indicators ahead of time, as well a positive rating of fiduciary and the Program implementation progress is rated satisfactory. The institutional set up has proved adequate and effective: the PIU is fully capacitated, has proved anchored at the right place in the Ministry of Economy and Finance (under the oversight of the head of the Directorate general for Administrative Affairs - DAAG) and has confirmed its convening power when engaging successfully with implementing agencies to nudge targeted results. The verification process and M&E framework of the parent Program have also proved adequate and effective. Technical assessment confirms though the need for further technical assistance to support implementing agencies through a programmatic approach. Challenges, however, remain at the level of E&S engagement under the program-action plan as discussed in the relevant section below. 44. The economic justification of the parent Program remains relevant. AF and restructuring will enhance the Program impact both on expenditure effectiveness and revenue mobilization. It will contribute further to budget comprehensiveness, and fiscal sustainability. B. Fiduciary 45. The original Integrated Evaluation of the Fiduciary System (IFSA) for the PforR operation of the current parent program has been updated for the purposes of this proposed additional funding . The updated IFSA also includes the fiduciary evaluations of the DDE, added to the program expenditure framework (PEF), alongside the DEPP featuring new DLIs but not included in the PEF. The findings of the updated IFSA provide reasonable assurance that program funds will be used for the intended purpose of the proposed additional funding. 46. The project procurement performance is assessed to be at a satisfactory level at this stage of project implementation. Indeed, the recent procurement reporting prepared by the PIU and related to 2023 shows satisfactory procurement KPIs, with no complaints raised during the project implementation. Moreover, the implementation of the project action plan is well advanced while almost all the actions have been realized. Indeed, the PIU prepared a complaint mechanism skeleton and shared it with the implementing agencies to consider it in handling the complaints that they will receive during the project implementation. Also, the action related to developing and operationalizing a mechanism requiring the procuring officers to check the eligibility of firms and individuals from the Bank’s list of debarred and temporarily suspended has been realized by the PIU through the preparation of an instruction developing this requirement and the manner of how to proceed. The latter has been shared with the IAs and they have adopted it. The outcome of this action has been verified by the 18 Governance, performance and competitive neutrality of SOEs in Morocco - (P181522) 34 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) auditor and no blacklisted company was found among the selected sample of contracts launched by the different implementing agencies. Finally, the action related to capacity building for some implementing agencies in relation to the use of the new procurement decree is ongoing as well. Considering the above, the procurement performance is assessed as satisfactory and provides solid argument to continue implementing the project through additional financing. 47. The overall expenditures of the parent PforR up to 2024 are aligned with the expenditure framework. There have been no variances in the actual ongoing and investment expenditures. These are: (i) for RA#1 and RA#2, the budget allocations from the MEF aimed at driving budget reforms focused on results and improving the public revenue management; and projects within the State-Region Program Contract for Fez Meknes that support the region's economic development and address social and territorial inequalities; and (ii) for RA#3, the funds from the MTNRA and ADD, which are instrumental in advancing interoperability and open data access, crucial for the digital progression of GoM and the enhancement of citizen-focused services. 48. As under the parent operation, the implementation agencies shall execute the activities in accordance with the World Bank's Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing. The implementation agencies will (i) share information with the World Bank regarding all allegations of fraud and corruption in connection with the Program, investigate all credible allegations received, report to the World Bank on actions taken, and cooperate in any inquiry that may be conducted by the World Bank into allegations or other indications of fraud and corruption in connection with the Program; and (ii) monitor and abide by the World Bank's list of debarred/suspended firms. The modalities regarding the flow of funds remain unchanged compared to the parent operation. 49. Fiduciary risk remains rated as “Substantial”. 50. The AF will benefit from the lessons learned from the fiduciary performance of the parent PforR. The fiduciary (financial management and procurement) performance of the parent Program is rated as satisfactory and the fiduciary risk as substantial, with a disbursement rate of 41 percent, including the advance. 51. Mitigating measures put in place for the parent PforR will continue to be used under the AF . These consist of enhancing fiduciary coordination through the DAAG, the lead coordinating entity, and improving the digital oversight of fiduciary activities and the preparation and timely submission of the necessary reports. To mitigate the risks related to DDE, the AF will support the efforts through DLI#11 to improve the performance of its information system and management of the state’s private domain. Besides, a fiduciary action within the Program Action Plan (PAP) will enhance the internal audit missions within the DDE, developing a risk mapping to support the internal audit program and schedule periodic internal audit missions covering the acquisition of administrative buildings. 52. The project procurement risk is at a moderate level since the risks identified at the level of the parent project during the preparation stage were mitigated through the implementation of the actions mentioned in the PAP. Indeed, the risk related to awarding a contract to a blacklisted company has been mitigated through the preparation by the PIU of an instruction that was disseminated to all the IAs clarifying how to check the blacklist before awarding contracts and raising their awareness on that topic. In the other hand, the PIU has also prepared a complaint handling mechanism skeleton that explains and clarifies how to handle complaints cases and has shared it with the IAs. Finally, the lack of capacity identified at the level of some IAs in terms of using national procurement procedures has been mitigated by preparing a capacity building program to be delivered to some IAs. 35 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 53. Procurement exclusion. As under the parent program, it is not expected to procure any large contracts valued at or above the Operational Procurement Review Committee (OPRC) thresholds (US$115 million for works, US$75 million for goods and non-consulting services, and US$30 million for consultant services), which are based on a “Moderate” procurement risk rating. This conclusion is drawn based on an analysis of procurement data of the IAs and the procurement performance of the parent project. The latter shall report to the World Bank if large contracts appear throughout project implementation. In addition, the World Bank team will analyze and monitor the Program performance of fiduciary systems and contract management reports to identify any large-value contracts that may appear throughout the Program implementation. C. Environment and Social 54. An Addendum to the Environmental and Social Systems Assessment (ESSA) of the parent Program has been prepared by the Bank team. This has been done in close cooperation with Program counterparts and a draft has been disclosed before Appraisal. It is important to clarify that since then, there have been no changes in the current applicable regulation and systems, thus, the Addendum does not constitute a new ESSA and should be considered together with the ESSA of the parent Program. The ESSA of the parent program assessed national and municipal systems with respect to institutional capacity and performance, policy and regulatory bases, consultation mechanisms and grievance redress mechanisms (GRM) to manage and mitigate impacts. The Addendum to the ESSA is based on a review of the Program implementation performance, the existing regulatory and legal framework related to environmental and social matters, and consultations with the Program stakeholders. The new activities to be undertaken under the AF were analyzed to identify environmental and social effects. The intent of the Addendum is to ensure that environmental and social risks continue to be avoided, reduced, and mitigated adequately. 55. The management of E&S risks and impacts of the parent Program is rated Moderately Satisfactory (MS). The ESSA Program Action Plan (PAP) of the parent project has been partially implemented. Focal points at the level of the participating agencies were appointed, the environmental and social management guide was prepared but not disseminated, the training of stakeholders is planned for May 2024, the GRM is not yet in place for the Fes Meknes Region component (to be ready by July 2024) and the E&S monitoring and reporting is lacking. The original Technical Environmental and Social Guide will be updated to reflect AF’s new activities. 56. The environmental and social (E&S) risks and negative impacts associated with the AF are considered Substantial. The AF introduces three new DLIs (#9, #10 and #11), which have a low to moderate E&S risks. There are no new activities with physical works. The Program impacts will continue to be reversible and mitigated with the proposed mitigation measures in the updated Technical Environmental and Social Guide. They will be clearly identified, prevented and/or minimized through effective mitigation measures, which will be subject to an environmental and social monitoring and follow-up system that will allow for the identification and management of potential risks. 57. All activities requiring private land acquisition through expropriation will be excluded from the Program. To prevent these risks, Focal Points will be tasked with screening out any such activities through the tools included in the Technical E&S guide. 58. E&S actions of the PAP. The ESSA Program Action Plan (PAP) of the parent project has been partially implemented. For the AF, the PAP will be updated and new actions will be included, under the following type of measures : i) E&S management system strengthening (E&S guide and manual update, E&S staff strengthening, awareness raising and consultations); ii) Strengthening the implementation and 36 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) follow-up of the environmental and social management system (apply procedures and mechanisms to the new activities, capacity building and consultations, appointment of new E&S focal points among relevant stakeholders) (iii) roll out of the GRM especially for the Fes Meknes component.) D. Implementation arrangements 59. The Program’s implementation will rely on existing implementation entities with the addition of two new ones. Additionally, the DDE and the DEPP - both under the MEF - have been incorporated into the Program’s institutional set up. The DEPF and DTFE also become stakeholders through their involvement in RLD 9.3 via the budget transparency action plan. DEPP is excluded from the Program Expenditure Framework (PEF) and falls under the budget authority of DAAG, who is already part of the PEF. DEPP's operations heavily rely on its personnel, whose salaries cannot be redirected to fund program expenditures, as per government directives. The DEPP plays a pivotal role in overseeing State financial control over SOEs. DEPP's duties encompass monitoring the public portfolio, engaging in rationalization and restructuring of SOEs, conducting external audits, standardizing accounting practices, and facilitating the transition of public enterprises to the private sector. The DEPP also plays an important role in public investment management and decentralization – both are key areas of the ENNAJAA Program – as SOEs are managing a significant part of public investments, including at the regional level. The DDE, as outlined in article 13 of decree no. 2.07.995 of October 23, 2008, holds responsibilities such as managing the State's private domain, supporting productive investment policies and major state programs, structuring productive and controlled urbanization, developing public facilities and social services, and providing impetus for the realization of Social Housing and the relocation of slums. E. Corporate requirements 60. Citizen engagement: The ENNAJAA AF will deepen the citizen engagement component of the parent project by introducing a DLI incentivizing improved budget transparency. This will be achieved through the launch of an Open budget platform which will follow the same model as the WB-developed BOOST tool to publish the budget documentation in a usable format. Citizens will be able to monitor and analyze the macro-fiscal policy and track sectoral expenditures. The platform could also potentially incorporate a feedback mechanism where citizens can ask questions and request additional information. It will also be achieved through the implementation by the Budget directorate of an action plan aiming to improve Morocco’s rating under the Open Budget Survey. This will help Morocco improve its overall scores in the Open Budget Survey by the end of the Program beyond the benchmark for sufficient budget information to inform policy dialogue and the world average of public participation to budgeting (from a very low baseline): those scores are reflected in a new PDO-level indicator on budget transparency. The ENNAJAA AF will also incentivize the publication of exhaustive citizens budgets in the six largest municipalities of the Kingdom. 61. Climate: Building on the ENNAJAA parent project, the AF will support activities universally aligned with the Paris Agreement to reduce Morocco’s high vulnerability to climate change19. Morocco has however developed a strong and comprehensive legal arsenal20 along with national strategies to face this challenge21 in keeping with its commitments under the Paris Agreement. The GoM is also committed to adapt its PFM system to climate change through a series of reform aimed at strengthening 19 The Climate and Disaster Risk Screening has been performed for this operation. 20 The 2011 Constitution, the National Charter on the Environment and Sustainable Development, etc. 21 The 2050 long-term low-emission development strategy, the National Sustainable Development Strategy), National Climate Plan for 2030. 37 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) green procurement, green budgeting and ensuring public financing to achieve Morocco’s NDCs. These reforms have been stressed in the 2022 Country Climate and Development Report (CCDR), under the Institutions and Governance cross-cutting pillar. With respect to climate change mitigation, the operation does not present a risk of having a negative impact on the co untry’s low-GHG emissions development pathways. Activities supported by this public administration operation are universally aligned with the goals of the Paris agreement. The ENNAJAA PforR, particularly in its AF component, focus on areas of PFM and public institutions reforms. With respect to climate change adaptation, the climate-related risks that could impact its activities are low. The Program activities should not be impacted by climate-related hazards. The climate-risk assessment of the operation is detailed in annex. 62. The Climate-Co Benefits identified in the parent project remain valid and are enhanced by the AF. The ENNAJAA AF will continue the efforts initiated by the parent project on Climate-Budget Tagging (DLI#2). It will build on a strong technical assistance program to help MEF’s Climate Unit in getting the appropriate expertise to adapt its PFM system to climate change.22 Besides, the AF will support and additional DLRs that will improve monitoring of SDGs-related investment projects at the local level. The results contributing to climate change adaptation and mitigation of the ENNAJAA Program are summarized in annex. 63. Gender: Since the early 2000s, the Kingdom of Morocco has implemented a series of constitutional, legal and political reforms in favor of gender equality, in line with its international commitments, notably the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) (ratified in 1993). These reforms have involved the Moroccan legal framework (Labor Code in 2003, Family Code in 2004, Nationality Code in 2007, etc.), the launch of national and sectoral strategies, notably PGE1 and 2, and the NDM promoting gender equality. This momentum was reinforced by the adoption of the Moroccan Constitution (2011), which represents a historic turning point by recognizing and anchoring the principle of equality between women and men. This constitutional commitment has been legally translated into the LOF, which cements gender equality throughout a budgetary process that is performance-oriented, transparent and gives Parliament a greater role in the budgetary debate and control of public finances. In addition to the provisions concerning Budgetary Performance Programs, the LOF (article 48) also institutionalizes the "Gender Budget Report" (RBG), which must accompany the finance bill tabled in Parliament. The report on the gender-responsive results-based budget, gives an account of the efforts made by ministerial departments in the area of equality, and which has been produced every year since 2005 on the basis of voluntary participation by ministerial departments. 64. However, gender responsive budgeting still needs significant capacity building to be fully implemented throughout the administration. The dearth of gender-disaggregated data constitutes an obstacle to the development of gender-targeted policy interventions and service delivery improvements. The ENNAJAA parent project includes activities aimed at promoting gender equality, mainly by (i) promoting access to gender-disaggregated data and statistics (RA#2 and RA#3) and (ii) monitoring trainings in gender-budgeting provided to civil servants (RA#1). The ENNAJAA AF scales up activities under the gender tagged parent project, focusing on gender budgeting. V. KEY RISKS 22 TF0B7861 and TF0C0501 38 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 65. The overall residual risk for the Program is rated as Moderate when factoring in implementation of mitigation measures. The AF builds on the successful implementation of the original Program as well as the high levels of technical capacity within the government which, with ownership, can be effectively mobilized to reorient key stakeholders toward achievement of PDO. Also, the Task Team and the Country Management Unit (CMU) continue to maintain active dialogue with the Government for sound implementation of reforms supported by the Program. 66. The overall Environmental and Social risks are currently maintained as substantial . The new activities are, however, deemed manageable with existing capacities and an adaptive approach. The additional financing is not expected to cause significant environmental damage or irreversible impacts. The program will maintain its focus on regions like Fes-Meknes and reassess activities for a moderate risk rating. Two entities, ADD and MNTRA, will be excluded from the additional financing, while a new directorate under the MEF will support RA#1 (DDE). The AF will put mitigation measures in place to address specific risks. Based on the outcome of the addendum to the ESSA – seen as one package and not as a new ESSA – the task team identified additional mitigation measures to further reduce risks and ensure effective implementation of Program activities. Shortcomings in E&S reporting from the region will also be addressed through a hands-on approach to correct for capacity needs behind delays noted under the PAP. Regarding the implementation of the GRM, the Program involves ministries and public entities that are used to handling grievances through the existing national grievance system - chikaya.ma - which is operational for local governments and national administrations. In addition, MEF and Ministry of Interior (MI) benefit from the support of the World Bank in other Programs; these systems are supported and strengthened to include and cover the activities planned under this Program. However, the deployment of a specific GRM for the regional execution agency (AREP) of the Fes-Meknes region has suffered a 10-month delay as per the PAP. A framework for the GRM has been shared with the Bank and is being reviewed. Its effective deployment is planned for July 2024, and has become a conditions to disbursement for DLR 3.3a. These measures are included in an updated Program Action Plan (PAP). 67. Fiduciary risks remain substantial as described above. Mitigation measures consist of enhancing fiduciary coordination through DAAG and investing in the digital oversight of fiduciary activities and the preparation and timely submission of the necessary reports. VI. WORLD BANK GRIEVANCE REDRESS 68. Grievance Redress. Communities and individuals who believe that they are adversely affected as a result of a Bank supported PforR operation, as defined by the applicable policy and procedures, may submit complaints to the existing program grievance mechanism or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address pertinent concerns. Project affected communities and individuals may submit their complaint to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, as a result of Bank non-compliance with its policies and procedures, and the Dispute Resolution Service, which provides communities and borrowers with the opportunity to address complaints through dispute resolution. Complaints may be submitted at any time after concerns have been brought directly to the Bank's attention, and Bank Management has been 39 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) given an opportunity to respond. For information on how to submit complaints to the Bank’s Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, please visit https://accountability.worldbank.org. 40 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) VII. SUMMARY TABLE OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Change in Program Action Plan ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Change in Program Scope ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Technical Method ✔ Change in Fiduciary ✔ Change in Environmental and Social Aspects ✔ Other Change(s) ✔ VIII. DETAILED CHANGE(S) 41 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IBRD-93170 Effective 31-Dec-2025 31-Dec-2025 31-Dec-2028 30-Jun-2029 Conditions Type Financing source Description Disbursement IBRD/IDA For DLR#3.3(a) under Category (3), until and unless the Borrower has furnished evidence satisfactory to the Bank that the grievance mechanism system at the level of the Region Fez- Meknes is operational in a manner acceptable to the Bank and as further described in the POM. 42 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) IX. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Morocco Morocco Public Sector Performance (ENNAJAA) Program Additional Financing Program Development Objective(s) The Program Development Objective is to improve performance and transparency of government operations and service delivery Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 To improve performance and transparency of government operations and service delivery (Action: This Objective has been Revised) Share of performance indicators for which annual targets have 0.00 20.00 30.00 40.00 45.00 50.00 53.00 55.00 been achieved (Percentage) Rationale: Action: This indicator Increased ownership of performance projects by ministerial departments - notably through the application of management charters and quality standards (DLR has been Revised #1.3 and #1.4) - underpins the rationale for higher ambitions. Share of gender-related indicators for which 0.00 20.00 30.00 40.00 45.00 50.00 53.00 55.00 targets have been 43 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) RESULT_FRAME_TBL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 achieved (Percentage) Rationale: Action: This indicator Increased ownership of performance projects by ministerial departments - notably through the application of management charters and quality standards (DLR has been Revised #1.3 and #1.4) - underpins the rationale for higher ambitions. Increase in revenue from local taxes in the 0.00 0.00 0.00 4.00 8.00 12.00 16.00 20.00 targeted municipalities (Percentage) Rationale: Action: This indicator Past trends suggest that this target needs to be revised upwards. has been Revised Share of fully digitized public services 23.00 25.00 35.00 50.00 75.00 (Percentage) Increase in targeted additional revenue 0.00 0.00 5.00 10.00 15.00 collected by the DGI (Percentage) Increased revenues from the mobilization of null 0.00 8.00 State assets 11 (Percentage) Rationale: Action: This indicator is This indicator is also a DLI and will measure the increased capacity of central administration to manage revenue collection in line with results area no. 2. New Morocco's score in the open budget survey null 48/100 55/100 61/100 (Text) 44 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) RESULT_FRAME_TBL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 Rationale: Action: This indicator is Efforts to improve transparency are capture in the Open Budget Partnership's composite score. This relates directly to the transparency elements of the PDO. New PDO Table SPACE Intermediate Re sults I ndi cator s by Compone nts Intermediate Results Indicators by Results Areas RESULT_FRAME_TBL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 RA1: Improve the Efficiency of Public Expenditures The number of ministries using common priority indicators for their Support Programs in 0.00 0.00 4.00 7.00 11.00 20.00 25.00 33.00 37.00 line with the standards outlined the circular Annual summary of Performance Projects published. (Number) Rationale: Action: This indicator Indicator recalibration based on ILD extension. has been Revised Annual Climate null Sensitive Budget 0.00 0.00 1.00 0.00 1.00 published (Number) 2.4 Rationale: Action: This indicator has been Revised Given the technical difficulties involved in generalizing climate budgeting, the process will now include pilots in the main ministerial departments. This reduction reflects what is feasible to ensure that climate budgeting is carried out with the necessary quality. 45 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) RESULT_FRAME_TBL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Annual Citizen's Budget No Yes Yes Yes Yes Yes Yes Yes Yes published. (Yes/No) Rationale: Action: This indicator has been Revised Updated considering recurrence until the end of the AF. Number of semi-annual reports on Region’s public investment 0.00 2.00 6.00 execution published (Number) Action Plan for introducing the Open Contracting Data No Yes Yes Yes Yes Yes Standards (OCDS) adopted. (Yes/No) Open Contracting Data OCDS pilot OCDS pilot Standards piloted for No OCDS OCDS not applied - - evaluation evaluation report the Invitation to Bids feasibility study report published published stage. (Text) Civil servants trained on Gender Budgeting 0.00 40.00 80.00 120.00 160.00 and gender-specific indicators. (Number) Decrease in the proportion of tax revenue allocated to CASs compared with 0.00 -0.50 -1.00 -1.50 -2.00 tax revenue allocated to the General Budget. (Text) 46 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) RESULT_FRAME_TBL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Rationale: Action: This indicator is This indicator will reflect the decline, over time, in tax revenues allocated to the CAS. This will reinforce budget unity, improve budget flexibility and performance. New RA2: Improving public revenue management Increased data-sharing between DGI and key partners (CNSS, 0.00 1.00 2.00 3.00 4.00 Customs, NARSA, Exchange Office). (Number) Taxpayer satisfaction survey completed No Yes Yes (Yes/No) RA3. Improving the foundations of digital transformation through interoperability and Open Data Number of use cases integrated with the national 0.00 0.00 4.00 8.00 12.00 12.00 interoperability platform. (Number) Share of user requests timely responded to through the interactivity module on 0.00 0.00 30.00 50.00 80.00 the national Open Data portal (disaggregated by gender). (Percentage) Increase in the number of priority datasets published in an open 145.00 145.00 145.00 188.00 245.00 and reusable format on the national Open Data 47 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) RESULT_FRAME_TBL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 platform. (Number) IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Performance indicators include indicators of The IGF (evaluation unit) efficiency, quality of IGF, Budget will certify based on service, and socio- Department, information shared by economic indicators. This Share of performance indicators for which Annual Annual the Budget Department, IGF – evaluation unit PDO indicator tracks the annual targets have been achieved Performance the proportion of achievement of annual Reports performance indicators targets of performance targets achieved. indicators in the in the PPs of pilot ministries. Performance indicators include indicators of The IGF (evaluation unit) efficiency, quality of IGF, Budget will certify based on service, and socio- Department, information shared by economic indicators, Share of gender-related indicators for Annual Annual the Budget Department, IGF – evaluation unit including on gender which targets have been achieved Performance the proportion of aspects. This PDO indicator Reports performance indicators will track the achievement targets achieved. of annual targets of performance indicators in the PPs of pilot ministries. 48 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Increase in operating resources of the municipalities compared to 2019. Operating resources are revenues from local taxes, and therefore TGR and DGI The IGF verifies the Annual, excluding loans and sales of Statistics percentage increase Increase in revenue from local taxes in the starting in IGF – evaluation unit assets as well as transfer department based on the TGR and targeted municipalities 2024 revenues (CAS VAT). data DGI’s data. Targeted municipalities are Casablanca, Fez, Tangier, Marrakech, Salé, Rabat, Meknes, Oujda, Kenitra and Agadir. MEF’s Biennial The IGF verifies the level Percentage of public E-readiness of digitization of public services fully digitized and Biannual IGF – evaluation unit Share of fully digitized public services assessment of services based on the e- transactional meets the public services readiness assessment. biennial target Percentage of increase in additional revenue compared to 2020. The DGI The IGF verifies the Additional revenue is result Statistics Increase in targeted additional revenue Biannual percentage increase IGF – evaluation unit of DGI tax compliance department collected by the DGI based on the DGI’s data. enforcement efforts, as data opposed to “spontaneous” revenue mobilization. Increased revenues from the mobilization The indicator should Once, end TGR PIU of State assets measure the average 2027. 49 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) increase of revenues, excluding innovative financing, for the 2025- 2027 period against the every two years with the Every two Open Budget PIU and Budget Morocco's score in the open budget OB report. publication of the Open years. Partnership Directorate survey Budget index ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Targeted ministries are applying the decree on PP indicators with regards to common priority indicators for their Support Programs. The IGF (evaluation unit) The number of ministries using common Ministerial departments verifies the alignment of priority indicators for their Support have started implementing Budget IGF – evaluation unit of Annual the indicators of the Programs in line with the standards the circular. The Budget Department the Program selected ministries with outlined the circular Annual summary of Department has confirmed the standards Performance Projects published. (December 2022) that at least 4 ministerial departments have upgraded their PP indicators based on the circular. Planned for the 2028 Annual Climate Sensitive Budget Once MEF IGF IGF Budget Law published 50 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) A simplified budget is elaborated to enable easy understanding of annual budget by citizens. The http://lof.fina The Citizen's Budget is IGF – evaluation unit of Annual Annual Citizen's Budget published. citizen budget is published nces.gov.ma/ accessible online. the Program on the Budget Department website with the annual budget law. Targeted regions applies the format set up in the related instruction for triennial investment Number of semi-annual reports on DGCT collects data from IGF – evaluation unit of programming and Once DGCT, regions Region’s public investment execution Regions the Program performance program published budgets. Targeted regions will be the regions with Partnership Contract with the State. The IGF (evaluation unit) The TGR adopts an action Action Plan for introducing the Open http://lof.fina verifies that the IGF – evaluation unit of plan based on the Once Contracting Data Standards (OCDS) nces.gov.ma/ assessment report has the Program feasibility study to apply adopted. been produced. OCDS standards. The IGF (evaluation unit) The TGR pilots in a verifies that the IGF – evaluation unit of Open Contracting Data Standards piloted department the OCDS Once TGR assessment report has the Program for the Invitation to Bids stage. standards for bidding been produced. notices. Civil servants involved in http://lof.fina The IGF (evaluation unit) IGF – evaluation unit of Civil servants trained on Gender planning and programming Annual nces.gov.ma/ verifies that the trainings the Program Budgeting and gender-specific indicators. process in their ministries https://cebsg. have been delivered. have been trained in finances.gov. 51 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Gender Budgeting by 2025 ma/fr by the Center of Excellency in Gender Budgeting. Decrease in the proportion of tax revenue Baseline of 2023 (ref. yearly Finance law MEF allocated to CASs compared with tax annex to finance law) revenue allocated to the General Budget. Tax department (DGI) increase data-sharing with key partners to improve consistency of data as well Data-sharing between as contribute to service targeted databases is simplification. Targeted key considered effective Increased data-sharing between DGI and partners are (i) CNSS with Annual DGI when data-sharing is IGF key partners (CNSS, Customs, NARSA, regards to professional tax reciprocal, regular, and Exchange Office). and medical coverage; (ii) used by at least one of customs with regards to the stakeholder. VAT reimbursement; (iii) NARSA with regards to vehicles licenses; (iv) Exchange office with regards to remittances. DGI undertake, complete and publish a taxpayers satisfaction survey. The survey will assess the satisfaction of taxpayers with regards to ease of Once DGI DGI report MEF Taxpayer satisfaction survey completed paying taxes, covering a wide diversity of taxpayers categories (informal sectors, individuals, small business, large businesses, etc.) and tax types. 52 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) The IGF attests to the increase in the number Annual, Use cases are defined as of use cases integrated starting ADD annual data exchange between with the national IGF – evaluation unit of Number of use cases integrated with the from 2022 progress public sector entities for interoperability the Program national interoperability platform. (baseline 0 report the purposes of delivering platform, based on in 2021) a service. information shared by the ADD. 80% of user feedback requests are addressed ADD quarterly timely through the The IGF attests to the progress Share of user requests timely responded interactivity module percentage of feedback report using IGF – evaluation unit of to through the interactivity module on the located within the national Quarterly requests addressed data from the Program national Open Data portal (disaggregated Open Data portal. based on information national Open by gender). Timeliness will be provided by the ADD. Data platform described in the national Open Data portal procedures. Increase in the number of The IGF attests to the safeguarded priority ADD annual increase in the number datasets published in an progress Increase in the number of priority Annual, of datasets published open and reusable format report using IGF – evaluation unit of datasets published in an open and starting according to the defined and under the original and data from the the Program reusable format on the national Open from 2022 standards based on irrevocable terms of the national Open Data platform. information provided by ODbL adopted by the GOM Data platform the ADD. on the national Open Data platform. ME IO Table SPACE Verification Protocol Table: Disbursement Linked Indicators 53 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLI 1 Strengthening the performance approach introduced by the LOF Total Allocated Amount Type of DLI Scalability Unit of Measure As % of Total Financing Amount (USD) Intermediate Outcome Yes Text 112,000,000.00 14.9 Period Value Allocated Amount (USD) Formula Baseline Limited quality of performance-based programs DLR 1.1 - The MEF has issued a circular (or equivalent 2022 administrative/legal act) setting out the quality standards to be 10,000,000.00 Yes/No met by Performance Projects ("PPs"). RLD 1.2. MEF has issued a circular (or equivalent 2023 administrative/legal act) setting out a model management 10,000,000.00 Yes/No charter. RLD 1.3. Eleven (11) ministries have implemented at least two 2024 quality standards defined in the MEF circular (or equivalent 22,000,000.00 US$2.0m per ministry/department administrative/legal document) mentioned in DLR 1.1. DLR 1.4. Ten (10) ministries/departments have adopted their DLR#1.4: US$2,000,000 per management charter. (parent operation) ministry/department; 2025 25,000,000.00 DLR 1.5. Additional nine (9) ministries/departments have adopted DLR#1.5: US$555.555 per their management charter. (scale-up) ministry/department DLR 1.6. Sixteen (16) ministries/departments have established a 2026 roadmap/guideline for the implementation of management 10,000,000.00 US$625,000 per ministry/department control. DLR 1.7. Streamlining CAS management: a. US$10,000,000 for (a) a. Introduction of a rule capping revenues allocated to CAS, b. US$16,000,000 for (b): 2025-2027 introduced by administrative/legal act. 26,000,000.00 US$5,333,333 per year over b. Reduction of CAS earmarked tax revenue in proportion to three years as per POM. general budget tax revenue, annually. 2028 DLR 1.8 - Nine (9) non-commercial establishments 9,000,000.00 Yes/No 54 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) (établissements et entreprises publics) having adopted at least two additional instruments to modernize their financial management as further described in the POM. DLI 2 Introducing sustainable and equitable budgeting Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 78,000,000.00 10.4 Period Value Allocated Amount (USD) Formula The climate is not visibly taken into account in the Baseline budgetary process. Gaps remain in gender budgeting. 2022 -- 0.00 --- 2023 -- 0.00 --- 2024 -- 0.00 --- DLR 2.1: The MEF has issued a circular establishing 2025 the procedures, the calendar, definitions and 5,000,000.00 Yes/No scope of application of climate budgeting. From a baseline of 0, per ministerial DLR 2.2: Adoption of climate tagging in the budget 2026 20,000,000.00 department with adopted climate of three (3) ministerial departments. tagging in its budget, US$6,670,000. DLR 2.3: Publication of a climate-sensitive budget 2027 25,000,000.00 Yes/No, US$25,000,000 in compliance with the circular. DLR 2.4 The MEF rolls out Gender tagging: DLR 2.4: (a) Yes/No, US$8,000,000 a. integration of gender tagging in three-year 2025-2028 28,000,000.00 DLR 2.4: (b) From a baseline of 0, per budget programming pursuant to the Chef ministerial department having applied du Gouvernement circular on drawing up the gender marking methodology, 55 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) three-year budget programming US$2,500,000 proposals, or any other circular or equivalent act on gender marking. b. application of the gender marking methodology by eight (8) ministerial departments. DLI 3 Enhancing the Decentralization agenda by strengthening regions’ public investment management Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 86,000,000.00 11.46 Period Value Allocated Amount (USD) Formula Baseline No regional multiyear budget programming DLR 3.1: Publication of an MI’s circular requesting Regions to present a three-year budgeting of each 2022 public investment project programmed in their 5,000,000.00 Yes/No Regional Development Plans and State-Region Contract. DLR 3.2 - The PDR monitoring platform, with the 2023 functionalities described in the MOP, is 15,000,000.00 Yes/No operational in at least three Regions. DLR 3.3 - Timely publication of public investment a. US$20,000,000 for Fès- performance reports with an adequate level of Meknès 2024-2028 information as described in the MOP: 30,000,000.00 b. US$10,000,000 for the other a. By the Fès-Meknès region two regions, at a rate of b. By two additional regions 5m each. 56 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLR 3.4: The platform for monitoring the regional development plan (PDR) has been improved through enhanced reporting and better monitoring of sustainable development: DLR 3.4 (a) Yes/No. US$10,000,000 a. Project identification at GID level is 2025 14,000,000.00 operational. DLR 3.4 (b) Yes/No. US$4,000,000 b. A module for monitoring the sustainable development objectives of projects is operational in the RDP monitoring platform. DLR 3.5: Extension of the GID and GIR-CT accounting and budgeting information systems: a. Six (6) Regional Project Execution Agencies DLR 3.5: (a) Yes/No, from a baseline (AREP) in the program area have adopted of 0, US$1,000,000 per AREP and are using the GID and GIR-CT information systems. DLR 3.5: (b) Yes/No, from a baseline 2026 12,000,000.00 b. The DGCT and the Directorates General of 0, US$500,000 per municipality / Services of the six (6) Regions and of the Region six (6) largest Municipalities in the Program Area have access to GID reporting information systems data for consultation (with a maximum of one-week lag). DLR 3.6: Annual publication of a citizen's budget 2025-2028 by six (6) largest Municipalities, and six (6) Regions 10,000,000.00 Yes/no on their websites. 2028 -- 0.00 -- Rationale: -- 57 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLI 4 Improving the efficiency of public procurement through data production and analysis Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Text 50,000,000.00 6.67 Period Value Allocated Amount (USD) Formula Procurement performance data not produced and Baseline OCDS standards not implemented DLR 4.1: The TGR has upgraded the procurement database under terms of reference set forth in the 2022 20,000,000.00 yes/no POM to inform the future national procurement observatory DLR 4.2: The national procurement observatory is 2023 16,000,000.00 yes/no operational. DLR 4.3: National procurement observatory 2024 6,000,000.00 yes/no published 6 statistical reports 2025 -- 0.00 -- 2026 -- 0.00 -- DLR 4.4: Digitalization of the post contract award 2026-2027 8,000,000.00 yes/no documents 2028 0.00 Rationale: -- DLI 5 Improve tax compliance and revenue collection performance Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount 58 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Outcome Yes Text 65,000,000.00 8.7 Period Value Allocated Amount (USD) Formula Absence of a multi-year action plan and Baseline centralized risk management unit DLR 5.1: MEF implements multi-year plan for tax 2022 10,000,000.00 yes/no compliance DLR 5.2: MEF establishes and runs national tax 2023 10,000,000.00 yes/no non-compliance unit DLR 5.3: A tax compliance risk management 2024 10,000,000.00 yes/no committee is operational. DLR 5.4: By March 31, 2024, 60% of action plan 2025 proposed by UAGR's tax compliance proposals 20,000,000.00 60% were actioned. 2026 -- 0.00 -- DLR 5.5: The debt recovery rate has increased. a. By 5 percent on average for a total of DLR#5.5(a): US$7,500,00 twenty (20) public establishments 2024-2028 (établissement et entreprise publiques); 15,000,000.00 DLR#5.5(b): US$7,500,00 b. By a cumulative 10 percent for each of the Per public establishment achieving 10% twenty (20) public establishments in debt recovery date, US$375,000. DLR#5.5(a). 2028 -- 0.00 -- DLI 6 Enhancing the Decentralization agenda by strengthening regions’ public investment management Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 88,000,000.00 11.7 59 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Period Value Allocated Amount (USD) Formula Absence of an online platform to fill and pay local Baseline taxes; new governance framework for state managed local taxes not implemented DLR 6.1: The Borrower issued a decree 2022 6,000,000.00 yes/no implementing Law 07-20's local tax management DLR 6.2: GIR-CT interfaces with local systems in 2023 100+ large Municipalities for full tax operation 40,000,000.00 yes/no management DLR 6.3: The electronic declaration and payments 2024 10,000,000.00 yes/no system for municipal taxes is operational. DLR 6.4: The new governance framework 2025 mandated by article 6 of Law No. 07-20 is 24,000,000.00 yes/no operational in 400 Municipalities DLR 6.5: Pursuant to Framework Law No. 69-19 on tax reform, a draft law of local taxation and fees is 2026 8,000,000.00 yes/no presented to the Secrétariat Général du Gouvernement. 2027 -- 0.00 -- 2028 -- 0.00 -- Rationale: -- 60 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLI 7 Improving data exchange and interoperability of information systems Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 56,000,000.00 8.0 Period Value Allocated Amount (USD) Formula The interoperability platform is not operational Baseline and the legal and regulatory framework for interoperability is not in place DLR#7.1: The Government Council has adopted and submitted to Parliament draft Law on digital administration. DLR#7.2: A general interoperability framework consolidating the norms, procedures and 2022 18,000,000.00 Yes/No technical standards required for users to interface with the national interoperability platform, has been adopted. DLR#7.3: The national interoperability platform is operational. DLR 7.4: The regulatory acts implementing Law on interoperability have been prepared and submitted to the Secrétariat Général du Gouvernement. 2023 DLR#7.5: The list of administrative procedures 20,000,000.00 Yes/No prioritized for digitalization in conformity with Law No. 55-19 on the simplification of administrative formalities and procedures has been validated by the National Commission on Simplification of Administrative Procedures. 61 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 2023-2024 DLR#7.6: the ADD has integrated 12 use cases with the national interoperability platform for digitalization of associated services. 13,000,000.00 Yes/No DLR#7.7: The integration of the 12 use cases on the interoperability platform has resulted in the simplification of administrative procedures. 2024-2025 DLR#7.8: A public administration and institutions users satisfaction survey of the platform 5,000,000.00 Yes/No regarding the national interoperability platform has been completed by the ADD. DLI 8 Improving the proactive disclosure of open government data Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 60,000,000.00 8.6 Period Value Allocated Amount (USD) Formula Baseline Limited data openness DLR 8.1: List of priority actions to be implemented for open data is established by the Open Data 2022 5,000,000.00 Yes/No Steering Committee in consultation with non- government stakeholders. DLR 8.2: (a) The COPIL’s membership is extended to include actors identified in the ODRA; and (b) the COPIL has: (i) defined in guides or manuals the 2023 - 2025 norms and standards for the processing and 40,000,000.00 Yes/No publication of data and metadata by the public administration and institutions on the open data platform; and (ii) adopted a monitoring and 62 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) evaluation plan for the open data initiative. DLR 8.3: The draft regulatory text on proactive disclosure under the Access to Information Law No. 31.13 has been validated by the MNTRA for its submission to the Council of Government. DLR 8.4: The national open data portal is operational and include an interactive module to facilitate user participation in quality control and rapid feedback. DLR 8.5: A data inventory has been developed, and priority data sets for processing and publication have been identified. DLR#8.6: At least one (1) annual hackathon-type 2025 event to promote public open data use has been 5,000,000.00 Yes/No organized by the ADD. DLR#8.7: 245 quality, updated, priority datasets published free of charge with essential metadata 2025 in an open and reusable format on the national 10,000,000.00 Yes/No platform data.gov.ma (or linked to a sectoral data platform), from a baseline of 145 datasets. DLI 9 Improving budget transparency Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Text 37,000,000.00 4.9 Period Value Allocated Amount (USD) Formula 63 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) No action plan in place, not functioning open Baseline budget platform. 2022 _ 0.00 _ 2023 _ 0.00 _ 2024 _ 0.00 _ DLR 9.1: Publication of a Citizen's Budget for the 2025 3,000,000.00 Yes/No mid-year implementation phase. 2026 DLR 9.2: The open budget platform is operational. 10,000,000.00 Yes/No DLR 9.3: (a) adoption of an action plan to improved 2024-2025 5,000,000.00 Yes/No budget transparency. From a baseline of 0, per each 15% DLR 9.3: (b) implementation (60%) of an action threshold of the action plan 2025-2028 19,000,000.00 plan to improved budget transparency. implementation achieved, US$4,500,000 (up to US$19,000,000). Rationale: Action: This DLI is New -- DLI 10 Improvement of public investment management Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 25,000,000.00 3.3 Period Value Allocated Amount (USD) Formula No rule for prioritizing public investments. Weak link Baseline between the investment projects programmed and execution. 64 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 2022 - 0.00 _ 2023 - 0.00 _ 2024 - 0.00 _ DLR10.1: Introduction of a rule for prioritizing public 2025 8,000,000.00 Yes/No investments. DLR10.2: Isthitmar platform is interoperable with 2026 5,000,000.00 Yes/No budget programming modules (PBT). DLR#10.3: A link is established between the investment projects programmed by the Finance Act DLR10.3(a): Yes/No, US$6,000,000; i.e. and supported by Istithmar de "e-budget 2", and the US$2,000,000 per ministerial execution of their budget appropriations in GID: department. 2027 12,000,000.00 a. Piloting in 3 ministerial departments. DLR#10.3(b): Yes/No, US$6,000,000, i.e. b. Extension to ten (10) ministerial departments with US$600,000 per ministerial major investment projects, as defined in the protocol department. of verification. 2028 - 0.00 -- DLI 11 Enhancing the value of state-owned property Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 43,000,000.00 5.7 Period Value Allocated Amount (USD) Formula Need for a law on the private domain of the State Baseline and to capitalize on digitalization 65 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) 2022 _ 0.00 _ 2023 _ 0.00 _ 2024 _ 0.00 _ 2025 _ 0.00 _ DLR 11.1. The DDE has collected and digitized 2026-2027 graphic data via the GIS Platform in the geographic 10,000,000.00 Yes/no area of the program. DLR 11.2. The DDE has achieved at least 90% of defined targets in terms of land area subject to the US$3,000,000 for each annual target, 2024-2028 9,000,000.00 registration procedure in the Program Area up to a maximum of US$9,000,000 annually, during three (3) CYs. DLR 11.3. DDE has improved revenue collection: a. MEF has submitted (a) the law on the State Private Domain to the SGG and (b) the related draft implementing decree(s). a. Yes/No. US$2,000,000 with b. The DDE has designed and implemented a US$1,500,000 for the law (a) risk map for the revenue circuit and 500,00 for the draft 2024-2028 managed at DDE level, as well as an 24,000,000.00 decrees (b). action plan for deploying the b. Yes/No. US$2,000,000 measures. c. Yes/No. US$20,000,000, i.e. c. The increase in revenue generated by the US$10,000,000 per year. State's assets is at least 7% over a period of two (2) years (excluding innovative financing) in the program area. 66 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Verification Protocol Table: Disbursement Linked Indicators DLI_TBL_VERIFICATION DLI 1 Strengthening the performance approach introduced by the LOF The Ministry of Economy – Budget Department has issued a circular establishing the quality standards to be met by the Performance Projects, inlcuding efficiency indicators, quality of service indicators and socio-economic indicators – the latter Description including gender (DLR 1.1) and is implemented (DLR 1.3) The Ministry of Economy has issued a circular establishing a model of Management Charter to performance management dialogue in ministries (DLR 1.2) and its adoption by ministries (DLR 1.4) Data source/ Agency IGF Verification Entity Budget Department IGF (i) verifies that the two circulars are published, (ii) reviews the objectives/indicators in the PPs of the targeted ministries against the circular’s standards and attests that common priority indicators, and performance indicators (efficiency, quality Procedure of service, socio-economic) are used; (iii) verifies that the targeted ministries have adopted management charters in line with the circular against the model. DLI_TBL_VERIFICATION DLI 1 Strengthening the performance approach introduced by the LOF • DLR 1.1 - The MEF has issued a circular (or equivalent administrative/legal act) setting out the quality standards to be met by Performance Projects ("PPs"). • RLD 1.2. MEF has issued a circular (or equivalent administrative/legal act) setting out a model management charter. • RLD 1.3. Eleven (11) ministries have implemented at least two quality standards defined in the MEF circular (or Description equivalent administrative/legal document) mentioned in DLR 1.1. • DLR 1.4. Ten (10) ministries/departments have adopted their management charter. (parent operation) • DLR 1.5. Nine (9) ministries/departments have adopted their management charter. (scale-up) • DLR 1.6. Sixteen (16) ministries/departments have elaborated a roadmap/guideline for the implementation of management control. 67 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • RLD 1.7. Streamlining CAS management: a. Introduction of a rule capping revenues allocated to CAS, introduced by administrative/legal act. b. Reduction of CAS earmarked tax revenue in proportion to general budget revenue • DLR 1.8 - Nine (9) EEPs have adopted at least two additional instruments to modernize their management. IGF Data source/ Agency Budget Directorate (DB), Directorate of Public Enterprise and Privatization (DEPP) - Ministry of Economy and Finance Verification Entity DLR 1.1 • As under the parent operation DLR 1.2 • As under the parent operation DLR 1.3 • As under the parent operation DLR 1.4 and 1.5 • Each year, the Budget Department communicates the list of departments to the PMU, together with the management charters. This RLD will be implemented from 2023 and will cover 3/4 departments per year. • The PIU sends the IGF the list of departments concerned. • The IGF examines the management charters of the targeted departments . Procedure • The IGF ensures that the management charters are in line with the circular cited in RLD 1.2. In this respect, the IGF must ensure that each management charter includes at least the following aspects: * Scope and objectives of the management charter. * Roles and responsibilities of stakeholders. * Management principles and rules. * Management calendar. * Organization of management dialogue. • The IGF prepares a report confirming the number of ministerial departments that have adopted management charters in line with the circular. • The PMU submits the IG F report and the disbursement request to the World Bank. RLD 1.6 • Annually, the Budget Department communicates the list of departments to the PMU, together with the roadmaps and master plans. • The PIU sends the IGF the list of ministerial departments concerned. • The IGF examines the roadmaps/master plans of the targeted ministries. 68 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • The IGF ensures that the roadmaps/master plans are in line with Decree no. 2-22-580 on the implementation of management control within ministerial departments. • The IGF prepares a report confirming the number of ministerial departments that have adopted roadmaps/ master plans in line with the Decree. Each confirmed department is entitled to disbursement of the amount specified in the loan agreement. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD 1.7 (a) Introduction of a rule capping revenues allocated to CAS introduced by administrative/legal act • The MEF submits the duly approved legal/administrative act to the IGF incorporating a specific target for a "revenue ceiling" to limit CAS revenues, and specifies the repayment of surpluses to the general state budget. • The IGF prepares a report confirming the revenue ceiling. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD 1.7 (b) Reduction of CAS earmarked revenue in proportion to general budget revenue • MEF submits the necessary documentation to the PMU, which notes the reduction in assigned revenues. • The reduction is detailed as follows: a -0.5% change in the target, on a constant entitlement basis (excluding new taxes which could be assigned and which are not included in the reference value), with 2022 as the baseline. • The IGF is preparing a report confirming, on the basis of the documentation provided, the decline in assigned revenues as detailed above. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD 1.8 • Each year, the DEPP sends the PIU a list of the EEPs concerned, together with the management instruments that have been adopted and any documents proving their adoption. • The PIU sends the IGF the list of EEPs concerned and the documents forwarded by DEPP. • The IGF examines the documents provided for each management instrument adopted. • The IGF verifies the effective adoption of management instruments by the EEPs concerned, based on the documentation provided or any other evidence. The IGF will rely in particular on the regulations in force setting out and detailing each management instrument (for example, decree n°1549-05 on management instruments and financial control reform, or any other document that may replace it). • The IGF ensures that the adoption of the management instrument by the EEP has not already been, or is not intended to be, the subject of a disbursement under another World Bank financing program. • The IGF prepares a report confirming the number of EEPs that have adopted the management instruments. 69 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • The PIU submits the IGF report and the disbursement request to the World Bank. DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 2 Introducing sustainable and equitable budgeting • RLD 2.1 - The MEF has issued a circular (or an equivalent administrative/legal act) establishing in particular the procedures, timetable, definitions and scope of climate budgeting. • RLD 2.2 - Adoption of climate tagging in the budgets of 3 ministerial departments • RLD 2.3 - Publication of a climate-sensitive budget in accordance with the circular of RLD 2.1. • RLD 2.4 (a) integration of gender tagging in three-year budget programming pursuant to the Chef du Description Gouvernement’s circular on drawing up three-year budget programming proposals, or any other circular or equivalent act on gender marking. • RLD 2.4 (b)Application of the gender marking methodology by eight ministerial departments (two departments per year) Data source/ Agency Budget Departments/Involved ministerial departments Verification Entity IGF RLD2.1 • The IGF ensures that the budget department has published the circular (or equivalent administrative/legal act). • The IGF ensures that the circular (or equivalent administrative/legal act) is prepared in accordance with national standards and international best practice, i.e.: to include climate risk adaptation and mitigation measures, defines the methodology for assessing PoPs according to their climate sensitivity, provides guidance for climate-specific indicators and defines the processes for identifying and validating the climate-sensitive share of the budget, including roles, responsibilities and timetable. Procedure • The IGF prepares a report that includes the circular's publication references and confirmation of the circular's compliance with the national standards and international good practice cited above. • The PMU submits the IGF report and the disbursement request to the World Bank. RLD2.2 • The Bud get Department communicates the list of departments to the PMU. • The PMU communicates the Climate Budget document drawn up at department level. • The IGF ensures that the provisions of the circular setting out the standards to be met by climate-sensitive 70 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) budgeting have been respected in the budget documents. • The IGF prepares a report confirming the application of the circular (RLD2.1) to the published climate budgets • The PMU submits the IGF report and the disbursement request to the World Bank". RLD 2.3 • The PMU communicates the Climate Budget document drawn up by DB. • The IGF ensures that the provisions of the circular setting out the standards to be met by climate-sensitive budgeting have been complied with in the Climate Budget document - including publication. • The IGF prepares a report confirming the application of the circular (RLD2.1) to the published climate budgets. • The PMU submits the IGF report and the disbursement request to the World Bank". RLD 2.4 (i) • - The IGF ensures that the budget department has published the circular (or equivalent administrative/legal act). The circular will either be that of the Head of Government relating to the establishment of proposals for Three-Year Budget Programming1 , or a circular dedicated to marking. • - The IGF ensures that the circular (or an equivalent administrative/legal act) sets out the principle of gender marking, so that ministerial departments can implement it. • - The IGF prepares a report which includes the publication references of the circular and confirmation of the circular's compliance with the gender marking principle. • - The PMU submits the IGF report and the disbursement request to the World Bank. RLD 2.4 (i i) • - The budget department sends the list of departments to the PMU. • - The PMU communicates the marking methodological note, to facilitate its implementation at department level. • - The IGF ensures that the methodological note setting out the standards to be met by gender budgeting in terms of marking has been respected by the ministerial departments. • - The IGF prepares a report confirming the application of the methodological note. • - The PMU submits the IGF report and the disbursement request to the World Bank. DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 3 Enhancing the Decentralization agenda by strengthening regions’ public investment management • RLD 3.1 - Publication of a circular from the MI requesting the Region to include three-year budgeting for each public Description investment project in their PDR and CPER. 71 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • RLD 3.2 - The PDR monitoring platform, with the functionalities described in the MOP, is operational in at least three Regions. • RLD 3.3 - Publication within reasonable timeframes of public investment execution reports with an adequate level of information and as described in the MOP: o (a) By the Fez-Meknes region o (b) By two other regions in the geographical area of the Program • RLD 3.4 – The regional development plan monitoring platform is improved by strengthened reporting and better monitoring of sustainable development: o (a) Identification by project at GID level is operational. o (b)A module for monitoring the sustainable development objectives of projects is operational in the PDR monitoring platform. • RLD 3.5 – Extension of the GID and GIR-CT accounting and budgetary information systems: o (a) Six (6) Regional Project Execution Agencies (AREP) in the Program Area have adopted and are using the GID-AREF and GIR-CT information systems. o (b) The DGCT and the Directorates General Services of the six (6) Regions and of the six (6) largest Municipalities in the Program Area have access to GID reporting information systems data for consultation (with a maximum of one-week lag). • RLD 3.6 - Annual publication of a citizen budget by at least six (6) of the 14 largest municipalities and by at least 6 Regions. • DGCT /Regions and municipalities involved Data source/ Agency Verification Entity IGF DLR 3.1 As per parent operation. DLR 3.2 As per parent operation. Procedure DLR 3.3 The IGF verifies that: • A physical and financial execution report covering at least all the investment projects included in the PDR and/or the CPER is published at least for three Regions (including Fès Meknes) in the geographical area of the program, and 72 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) at least two consecutive semesters. This report contains in particular data from the monitoring and management platform referred to in RLD 3.2. • The publication of the reports from the Fes-Meknes region entitles it to a disbursement of $20 million, subject to specific conditions stipulated in the financing agreement linked to the grievance management system. • The publication of reports from two other regions gives rise to a total disbursement of $10m, or $5m per region. • The publication of each report occurs in the month following the end of the semester (i.e. in January and July) • The publication is posted online on the Region's website. • The IGF prepares a report attesting that the above conditions have been met. • The PMU submits the IGF report as well as the disbursement request to the World Bank. DLR 3.4 (a) • The IGF ensures that the integrated budgetary and accounting system GID available to the Regions makes it possible to identify each expenditure relating to an investment project included in a PDR or in a State-Region program contract, at the stage of the commitment and at the payment stage. • The IGF checks with a Region and its public accountant that this functionality is operational. DLR 3.4 (b) • The IGF ensures that a module relating to sustainable development objectives has been added to the PDR investment monitoring platform and that the amounts of investments monitored by the platform are well broken down, depending on their nature, between the 17 sustainable development goals as defined in September 2015 at the UN Sustainable Development Summit • The PMU submits the IGF report as well as the disbursement request to the World Bank. RLD 3.5 (a) • The IGF ensures that all the Regional Project Execution Agencies in the geographical area of the program have adopted the integrated budgetary and accounting system GIR and GID and that it is operational. • The IGF interviews each of the Regions and conducts an on-site verification in 3 Regions within the program area • The PMU submits the IGF report as well as the disbursement request to the World Bank. RLD 3.5 (b) • The IGF ensures that the GID and GIR reporting are accessible for consultation by the DGCT (Local Finance Directorate) and by the Regions and by the 10 most populated municipalities in Morocco, within the geographic area of the program. • Regarding the DGCT, this access is provided for all local authorities and local public establishments. It is reserved for 73 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) people designated by the Director General of Local Authorities or the Director of Local Finance in a dedicated and traceable manner. It must be completed in 2026. • With regard to Regions and municipalities, this access must be ensured in 2027 under the conditions: Safety and confidentiality, a community only having access to its own data and designated people within each of them having dedicated and traceable access; Freshness: the data consulted must be at least 5 days old following their introduction into the GIR and GID system The IGF with the DGCT (on-site visit) and by survey with local authorities of the reality of this access. • The PMU submits the IGF report as well as the disbursement request to the World Bank. DLR 3.6 • The IGF ensures that the DGCT has clearly defined a framework for presenting the citizen budget available to municipalities and Regions • The DGCT provides the IGF with a list of at least 6 regions and 6 municipalities within the geographic area of the program that have used the presentation framework • The IGF ensures that 6 municipalities and 6 regions communicate using this framework on their website. Communities can adopt a more developed presentation but respecting the general framework proposed by the DGCT. • The PMU submits the IGF report as well as the disbursement request to the World Bank DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 4 Improving the efficiency of public procurement through data production and analysis • DLR#4.1: The TGR has upgraded the procurement database under terms of reference set forth in the POM to inform the future national procurement observatory. • DLR#4.2: The national procurement observatory is operational. Description • DLR#4.3: Six (6) statistical reports of the national procurement observatory have been published. • DLR#4.4: Digitalization of the post contract award documents Data source/ Agency TGR/National Procurement Observatory/the Moroccan Public Procurement Portal Verification Entity IGF DLR#4.1: As per parent operation Procedure DLR#4.2: As per parent operation 74 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLR#4.3: As per parent operation DLR#4.4: • The IGF is attending an end-to-end demonstration of the post-contract document dematerialization system which will be carried out by the TGR. • The IGF ensures that the TGR has prepared detailed operating procedures for the functionalities of the system for dematerializing supporting documents dedicated to the various stakeholders concerned (public buyers, companies, agents responsible for control and public accountants). Said operating procedures must be posted online on the public procurement portal. • The IGF ensures that the TGR has provided training on the dematerialization system to the various stakeholders concerned. • The IGF ensures the operationalization of the system through a statistical report provided by the TGR containing the following data: number of actors using the system by category (public buyers, companies, agents responsible for control and public accountants), number of documents initiated and signed electronically through the system, number of contracts signed on the document dematerialization system. DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 5 Improve tax compliance and revenue collection performance • DLR#5.1: The MEF has adopted a multi-year action plan to improve tax compliance, under terms of reference as set forth in the POM. • DLR#5.2: A national tax compliance management and risk analysis unit in the MEF is created and operational. • DLR#5.3: A tax compliance risk management committee is operational. Description • DLR#5.4: Based on the actions proposed by the national tax compliance management and risk analysis unit by March 31, 2024, 60% of the actions proposed have been subject to decision for action. • DLR#5.5: The debt recovery rate has increased: a. By 5 percent on average for a total of twenty (20) public establishments (établissement et entreprise publiques); b. By a cumulative 10 percent for each of the twenty (20) public establishments in DLR#5.5(a). Official documents of DGI, DEPP Data source/ Agency IGF Verification Entity 75 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLR#5.1: As per parent operation DLR#5.2: As per parent operation DLR#5.3: As per parent operation DLR#5.4: As per parent operation DLR#5.5: Procedure • The DEPP communicates the list of the 20 EEPs concerned, defined on the basis of a diagnosis carried out in 2025. These 20 EEPs concern three sectors defined by the diagnosis. • The IGF assesses to what extent the debt recovery rate of these 20 non commercial establishments has increased since 2024. • The IGF prepares a report which measures the percentage increase in the debt recovery rate. • (a) according to the set target gfor the 20 SOEs. • (b) For each SOE that has increased its debt collection by 10 percent. • The PIU submits the IGF report as well as the disbursement request to the World Bank. DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 6 Increasing revenue of municipalities • DLR#6.1: The Borrower’s has published an arrêté implementing article 6 of Law 07-20 on local taxation management. • DLR#6.2: Interfacing functions of the GIR-CT with local systems is implemented in at least 100 large Municipalities enabling these Municipalities to manage the entire local taxation chain of operations. Description • DLR#6.3: The electronic declaration and payments system for municipal taxes is operational. • DLR#6.4: the new governance framework mandated by article 6 of Law No. 07-20 is operational in 400 Municipalities. • DLR#6.5: Pursuant to Framework Law No. 69-19 on tax reform, a draft law of local taxation and fees is presented to the Secrétariat Général du Gouvernement. Data source/ Agency TGR/DGCT/DGI 76 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Verification Entity IGF DLR#6.1: As per parent operation DLR#6.2: As per parent operation DLR#6.3: As per parent operation DLR#6.4: As per parent operation Procedure DLR#6.5: • The IGF ensures that a project to reform local taxation and local fees has been officially transmitted by the Minister of the Interior to the General Secretariat of the Government, • The PIU submits the IGF report as well as the disbursement request to the World Bank. DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 7 Improving data exchange and interoperability of information systems • DLR#7.1: The Government Council has adopted and submitted to Parliament draft Law on digital administration. • DLR#7.2: A general interoperability framework consolidating the norms, procedures and technical standards required for users to interface with the national interoperability platform, has been adopted. • DLR#7.3: The national interoperability platform is operational. • DLR#7.4: The regulatory acts implementing Law on interoperability have been prepared and submitted to the Secrétariat Général du Gouvernement. • DLR#7.5: The list of administrative procedures prioritized for digitalization in conformity with Law No. 55-19 on the simplification of administrative formalities and procedures has been validated by the National Commission on Description • Simplification of Administrative Procedures. DLR#7.6: the ADD has integrated 12 use cases with the national interoperability platform for digitalization of associated services. • DLR#7.7: The integration of the 12 use cases on the interoperability platform has resulted in the simplification of administrative procedures. • DLR#7.8: A public administration and institutions users satisfaction survey of the platform regarding the national interoperability platform has been completed by the ADD. • DLR#7.9: One (1) end-users satisfaction survey among companies and citizens regarding the digitalization of priority service has been completed by the MTNRA. Data source/ Agency Official gazette, ADD, MTNRA. 77 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) Verification Entity IGF DLR 7.1 As in parent program DLR 7.2 As in parent program DLR 7.3 As in parent program DLR 7.4 As in parent program DLR 7.5 Procedure As in parent program DLR 7.6 As in parent program DLR 7.7 As in parent program DLR 7.8 As in parent program DLR 7.9 As in parent program DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 8 Improving the proactive disclosure of open government data • DLR#8.1: List of priority actions to be implemented for open data is established by the Open Data Steering Committee in consultation with non-government stakeholders. • DLR#8.2: (a) The COPIL’s membership is extended to include actors identified in the ODRA; and (b) the COPIL has: (i) defined in guides or manuals the norms and standards for the processing and publication of data and metadata by the public administration and institutions on the open data platform; and (ii) adopted a monitoring and evaluation Description plan for the open data initiative. • DLR#8.3: The draft regulatory text on proactive disclosure under the Access to Information Law No. 31.13 has been validated by the MNTRA for its submission to the Council of Government. • DLR#8.4: The national open data portal is operational and include an interactive module to facilitate user participation in quality control and rapid feedback. 78 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • DLR#8.5: A data inventory has been developed, and priority data sets for processing and publication have been identified. • DLR#8.6: At least one (1) annual hackathon-type event to promote public open data use has been organized by the ADD. • DLR#8.7: 245 quality, updated, priority datasets published free of charge with essential metadata in an open and reusable format on the national platform data.gov.ma (or linked to a sectoral data platform), from a baseline of 145 datasets. Data source/ Agency Official gazette, ADD, MTNRA Verification Entity IGF DLR 8.1 As in parent program DLR 8.2 As in parent program DLR 8.3 As in parent program DLR 8.4 As in parent program Procedure DLR 8.5 As in parent program DLR 8.6 As in parent program DLR 8.7 As in parent program DLR 8.8 As in parent program DLI_TBL_VERIFICATION DLI_TBL_VERIFICATION DLI 9 Improving budget transparency • DLR#9.1: Publication of a Citizen's Budget for the mid-year implementation phase. • DLR#9.2: the open budget platform is operational. Description • DLR#9.3: (a) adoption and (b) implementation up to 60%, of an action plan to improved budget transparency. 79 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) MEF - and all parties involved in action plan. Data source/ Agency IGF Verification Entity RLD 9.1 • The IGF ensures that the citizen's budget for the mid-year implementation phase, i.e. by June 30, is published. • The PMU submits the IGF report and the disbursement request to the World Bank. RLD 9.2 • The IGF ensures that the Open Budget platform is operational and open to the public. • The IGF conducts an audit of the platform to ensure that it is easily consultable and that it makes budget documentation available to the public in an open, understandable and usable format. • The IGF prepares a report certifying that the platform is operational, and forwards it to the PMU. • The PMU submits the IGF report and the disbursement request to the World Bank. RLD 9.3 9.3. (a) • The PIU communicates to the IGF the action plan pr epared by the various stakeholders and coordinated by the DB, the PMU or any other department. This plan must be validated by all stakeholders (at least the Budget Department, the Treasury and External Finance Department and the Financial Studies and Forecasting Department). Validation of Procedure the plan gives entitlement to a disbursement. • The action plan will be based on international benchmarks for budget transparency (Open Budget Survey, PEFA, etc.), adapted to the Moroccan context. The action plan should contain a minimum of 10 actions. • The IGF prepares a report confirming the adoption of the action plan. • The PIU submits the IGF report and the disbursement request to the World Bank. 9.3 (b) • The PIU provides the IGF with a progress report on the implementation of the proposed actions, drawn up by all the stakeholders responsible for implementation. • The IGF assesses the extent to which the actions set out in the action plan have been carried out. It will be able to rely in part on existing benchmarks, where appropriate, as acceptable modes of verification (the Open Budget Survey, PEFA). • The IGF prepares a report that measures the percentage of actions completed. Each 15% level entitles to a disbursement (up to 60%, which entitles to full disbursement). • The PIU submits the IGF report and the disbursement request to the World Bank. 80 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) DLI_TBL_VERIFICATION DLI 10 Improvement of public investment management DLR#10.1: Introduction of a rule for prioritizing public investments in the draft amendment of the Organic Law of Finance submitted to the SGG. DLR#10.2: Isthitmar platform is interoperable with budget programming modules (PBT). Description DLR#10.3: A link is established between the investment projects programmed by the Finance Act and supported by Istithmar, and the execution of their budget appropriations in GID : • Piloting in 3 ministerial departments. • Roll-out to ministerial departments with major investment projects, as per the verification protocol MEF Data source/ Agency IGF Verification Entity RLD 10.1 • MEF submits the duly approved legal/administrative act to the IGF incorporating a rule for prioritizing public investments. • The IGF prepares a report confirming the introduction of this rule into the national legal arsenal. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD 10.2 • The IGF conducts an audit to ensure that the Istithmar platform is interoperable with the PBT p rogramming module. Procedure • The IGF prepares a report certifying that the platform is operational and forwards it to the PMU. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD 10.3 A link is established between the investment projects programmed by the LF and supported by istithmar in "e- budget 2", and the execution of their budget appropriations in GID : a. Experimentation, in the first year, for 3 pilot ministerial departments. • The PIU informs the IGF of the three pilot ministerial departments and the list of structuring projects programmed by the LF. • The IGF conducts an audit of the pilot ministerial departments to ensure that : 81 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • The structuring projects of the pilot ministerial departments are included in istithmar • The execution of said projects in istithmar is fed by the execution of the related budget appropriations in GID. • The IGF prepares a report certifying the above-mentioned elements and forwards it to the PMU. • The PIU submits the IGF report and the disbursement request to the World Bank. b. Generalization to ten (10) eligible ministerial departments with structuring investment projects • The PIU sends the IGF a list of the 10 eligible ministerial departments (excluding security and sovereignty departments). • The IGF conducts an audit of the ministerial departments to ensure that : • The structuring projects of the pilot ministerial departments are covered by istithmar • The execution of these projects in istithmar is fed by the execution of the related budget appropriations in GID. • The IGF prepares a report attesting to the above and forwards it to the PMU. • The PIU submits the IGF report and the disbursement request to the World Bank. DLI_TBL_VERIFICATION DLI 11 Enhancing the value of state-owned property • DLR#11.1: The DDE has collected and digitized graphic data via the GIS platform in the program area. • DLR#11.2: The DDE has achieved at least 90% of defined targets in terms of land area subject to the registration procedure in the program area. • DLR#11.3 (a,b,c): The DDE improved revenue collection: a. The MEF has submitted (i) the draft law on the State Private Domain to the SGG and (ii) the related draft Description implementing decrees. b. The DDE has drawn up and implemented a risk mapping for the revenue circuit managed at DDE level, together with an action plan for implementing related measures. c. The annual increase in revenues generated by the state's assets averages at least 7% of the target defined in the budget law (excluding innovative financing) in the Program Area, in two (2) CY. DDE Data source/ Agency IGF Verification Entity DLR 11.1 Procedure • IGF is conducting an audit on the digitization rates of graphic data relating to (i) land titles, (ii) registration 82 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) requisitions, (iii) unregistered estates/buildings, (iv) procedures, and (v) presumed available. • The target is 70% di gitization. • The IGF conducts an on-site audit with access to quarterly reports and the GIS system dashboard. • The PIU submits the IGF report and the disbursement request to the World Bank. DLR 11.2 • The IGF ensures that 90% of the total annual targets of the performance contracts of the regional departments in the program's geographical area have been achieved, based on the performance contract assessments. • Subject to registration pro cedure" is synonymous with "filing of requisition". • The RLD is verified by year for 2024, 2025, 2026. A chievement of targets results in a disbursement of $3,000,000 per year, for a total of $9,000,000. • The geographical a rea of the project includes the regions of Tangier-Tetouan-Al Hoceima, Oriental, Fès-Meknès, Rabat-Salé-Kénitra, Béni-Mellal-Khénifra, Casablanca-Settat, Marrakech-Safi, Draâ-Tafilalet, Souss-Massa and targeted communes in the Guelmim-Oued Noun region. • The PIU is submitting the IGF report and disbursement request to the World Bank. RLD11.3 (i) (a) • The IGF ensures that the MEF has submitted to the SGG the draft law relating to the Stat e's Private Domain. This gives entitlement to a disbursement of $1,500,000. • The PIU submits the IGF report and the disbursement request to the World Bank. RLD11.3 (i) (b) • On the basis of the law, and after publication in the B.O., the IGF ensures that draft implementing decrees are submitted to the SGG. This gives entitlement to a disbursement of $500,000. • The PIU submits the IGF report and the disbursement request to the World Bank; RLD11.3 (ii) • The IGF ensures that the DDE management committee validates (via a report) a risk mappi ng document comprising at least: (i) an inventory of the major risks associated with the revenue circuit, (ii) an assessment of said risks (including the potential impact and probability of occurrence), and (iii) a deployment plan for the measures defined. • The IGF ensures that the mapping is taken into account in the annual audit plan(s) following its adoption by the Management Committee. • The IGF ensures that the DDE has posted a note on its intranet presenting risk mapping and its deployment plan. 83 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) • The PIU is submitting the IGF report and disbursement request to the World Bank. RLD11.3 (iii) • The IGF verifies that this result has been achieved on the basis of TGR revenue reports. • This indicator corre sponds to the amounts of revenue and income generated by ECD management (general budget/land reallocation fund/agrarian reform fund - excluding innovative financing). • The target is restricted to the program's geographical area. • The geographical area of the project includes the regions of Tangier-Tetouan-Al Hoceima, Oriental, Fès-Meknès, Rabat-Salé-Kénitra, Béni-Mellal-Khénifra, Casablanca-Settat, Marrakech-Safi, Draâ-Tafilalet, Souss-Massa and targeted communes in the Guelmim-Oued Noun region. • The PIU is submitting the IGF report and disbursement request to the World Bank. . 84 The World Bank Morocco Public Sector Performance (ENNAJAA) Program Additional Financing (P181679) ULT_YES_TARGET_VALUES ANNEX 1: INTEGRATED RISK ASSESSMENT . SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance ⚫ Moderate ⚫ Moderate Macroeconomic ⚫ Moderate ⚫ Moderate Sector Strategies and Policies ⚫ Moderate ⚫ Moderate Technical Design of Project or Program ⚫ Moderate ⚫ Moderate Institutional Capacity for Implementation and ⚫ Moderate ⚫ Moderate Sustainability Fiduciary ⚫ Substantial ⚫ Substantial Environment and Social ⚫ Moderate ⚫ Substantial Stakeholders ⚫ Moderate ⚫ Moderate Other ⚫ Moderate Overall ⚫ Moderate ⚫ Moderate . 85 . ANNEX 2: MODIFIED PROGRAM ACTION PLAN Action Completion Description Source DLI# Responsibility Timing Measurement Action Establish and Technical MEF Other No later than 90 Ministerial Revised maintain days after the decision note throughout Effective Date, establishing SSC implementation a or such other responsible for Strategic Steering date as agreed strategic oversight Committee, by the Bank and policy chaired by the guidance under Head of the Program, all Government and under terms and composed of conditions as representatives described in the of ministries and POM, has been institutions submitted to the participating in Bank. implementation, monitoring and evaluation. Proposed Maintain Technical MEF Other Continuous/recur Ministerial throughout rent decision note implementation a establishing SSC Strategic Steering responsible for Committee, strategic oversight chaired by the and policy Head of guidance under Government and the Program, all composed of under terms and representatives of conditions as ministries and described in the institutions POM, has been participating in submitted to the implementation, Bank. Establish and Technical MEF Other No later than 90 Ministerial Revised maintain days after the decision note throughout Effective Date, establishing the TC implementation a or such other under terms and Technical date as agreed conditions as Committee by the Bank described by the chaired by the POM has been DAAG DG and submitted to the composed of Bank. technical representatives of the ministries and institutions participating in implementation, monitoring, and evaluation. 86 Proposed Maintain Technical MEF Other Continuous/recur Ministerial throughout rent decision note implementation a establishing the TC Technical under terms and Committee conditions as chaired by the described by the DAAG DG and POM has been composed of submitted to the technical Bank. representatives of the ministries and institutions participating in implementation, monitoring, and evaluation. Adopt a Program Technical MEF Other No later than POM approved by Revised Operation 120 days after MEF and no- Manual (POM) the Effective objected by the (including details Date, or such Bank is distributed on verification other date as to all entities protocol for each agreed by the involved in DLI). Bank Program Implementation. Proposed Maintain a Technical MEF Other Continuous/recur POM approved by Program rent MEF and no- Operation Manual objected by the (POM) (including Bank is distributed details on to all entities verification involved in protocol for each Program DLI). Implementation. Development of Environmental and Social MEF Other No later than 90 The training No Change the training Systems days after the module has been module on Effective Date, developed and environmental or such other submitted to the and social date as agreed Bank. management by the Bank including monitoring tools. Implementation Environmental and Social MEF Other No later than Trainings have No Change of the developed Systems 180 days after been completed. training sessions the Effective on environmental Date, or such and social other date as management. agreed by the Bank Report on Environmental and Social MEF Recurrent Semi-Annually Report submitted Revised environmental Systems timely with 87 and social content standards status satisfactory to the of pipeline Bank. investment projects of the Fes-Meknes region. Proposed Report on Environmental and MEF Recurrent Yearly Report submitted environmental Social Systems timely with and social content standards status satisfactory to the of pipeline Bank. investment projects of the Fes-Meknes region. Appointment of Environmental and Social MEF and Other No later than 90 Focal points are Revised environmental Systems stakeholders days after the appointed. and social focal Effective Date, points among or such other relevant date as agreed stakeholders: by the Bank MEF (DAAG, DB, TGR, ADI, DGI, DAGG), MI (DGCT, AREP-FM) and MNTRA (ADD, DRA) as well as all relevant stakeholders in the CPER of the Fes-Meknes region. Proposed Appointment of Environmental and MEF and Other No later than 90 Focal points are environmental Social Systems stakeholders days after the appointed. and social focal Effective Date, or points among such other date relevant as agreed by the stakeholders: Bank MEF (DAAG, DB, TGR, ADI, DGI, DAAG, DDE, DEPP), MI (DGCT, AREP-FM) and MNTRA (ADD, DRA) as well as the Fes-Meknes region. 88 E&S technical Environmental and Social MEF Other No later than 90 E&S technical Revised manual (covering Systems days after the manual approved site monitoring Effective Date, as satisfactory by tools, or such other the World Bank. responsibilities, date as agreed methods and by the Bank frequency of reporting, and application of the manual) approved by the World Bank. Proposed Maintain E&S Environmental and MEF Other Continuous/recur E&S technical technical manual Social Systems rent manual approved (covering site as satisfactory by monitoring tools, the World Bank. responsibilities, methods and frequency of reporting, and application of the manual) approved by the World Bank. Appointment of a Environmental and Social MEF Other No later than 90 An environmental Revised dedicated Systems days after the and social focal environmental Effective Date, point has been and social focal or such other identified and point for the MEF date as agreed appointed by the and assignment by the Bank MEF according to to the PMU for terms of reference the duration of agreed with the the Program. World Bank. Proposed Maintain Environmental and MEF Other Continuous/recur An environmental appointment of a Social Systems rent and social focal dedicated point has been environmental identified and and social focal appointed by the point for the MEF MEF according to and assignment terms of reference to the PMU for agreed with the the duration of World Bank. the Program. Implement Fiduciary Systems DAAG/DGCT/AD Other Immediately Fiduciary capacity Revised fiduciary capacity D development development program program implemented, including human particularly at the resources in level of region and 89 procurement and the ADD, and financial remaining entities management participating in the execution. Program where implementation lags. Proposed Maintain fiduciary Fiduciary Systems DAAG/DGCT/AD Other Continuous/recur Fiduciary capacity capacity D rent development development program program including implemented, human resources particularly at the in procurement level of region and and financial the ADD, and management remaining entities execution. participating in the Program where implementation lags. Assess and Environmental and Social MEF Other Within the first Assessment report Revised Strengthen the Systems year of the submitted to the existing grievance Program Bank including and mechanism improvement plan. systems. Proposed Roll-out a Environmental and DLI 3.3 MEF / MI / Other By August 2024, Assessment report grievance Social Systems Region and prior to submitted to the mechanism disbursing under Bank or onsite systems at the DLR#3.3(a) verification. Fes-Meknes Region level. Strengthened Fiduciary Systems MEF Recurrent Semi-Annually Fiduciary reports No Change fiduciary are submitted to reporting the Bank within submitted within the prescribed the prescribed timeframe. timeframe. Ensure fully Fiduciary Systems MEF Recurrent Yearly Financial No Change completed statements are program financial presented to the statements are Bank within the submitted by prescribed DTFE and shared timeframe. with IGF within the prescribed timeframe. Operationalizatio Fiduciary Systems Fes-Meknes Other No later than Internal audit Revised n of internal audit Region/AREP/D 365 days after function within the function within GCT/IGAT the Effective Fes-Meknes the Fes-Meknes Date, or such regions region including other date as operationalized to 90 development of agreed by the the satisfaction of tools and capacity Bank the World Bank. development activities. Proposed Maintain Fiduciary Systems Fes-Meknes Other Continuous/recur Internal audit operationalization Region/AREP/DG rent function within the of internal audit CT/IGAT Fes-Meknes function within regions the Fes-Meknes operationalized to region including the satisfaction of development of the World Bank. tools and capacity development activities. Develop and Fiduciary Systems MEF/TGR Due Date 30-Jun-2022 The MEF has Revised operationalize instructed the mechanism, ENNAJAA through issue of implementing Instructions/circul agencies with ar to all procuring procurement to entities, requiring check the eligibility the procuring of firms and officers to check individuals from the eligibility of the Bank’s list of firms and debarred and individuals from temporarily the Bank’s list of suspended. debarred and temporarily suspended. Proposed Maintain the Fiduciary Systems MEF/TGR Other Continuous/recur The MEF has requirement for rent instructed procuring officers ENNAJAA to check the implementing eligibility of firms agencies with and individuals procurement to from the Bank’s check the eligibility list of debarred of firms and and temporarily individuals from suspended. the Bank’s list of debarred and temporarily suspended. Report Fiduciary Systems IGF Recurrent Yearly IGF assesses the No Change compliance to the compliance of Bank’s list of winning firms debarred and within ENNAJAA temporarily implementation suspended firms against the Bank’s as part of list of debarred 91 Program Audit and temporarily Report. suspended firms. Develop and Fiduciary Systems DAAG/Fes- Recurrent Continuous Capacity building No Change implement a Meknes region program under capacity-building implementation to program aimed at the satisfaction of strengthening the the World Bank. financial management, procurement, and M&E skills of staff in the Fes Meknes region. Adopting a Technical DLI 1 MEF Other N olater than 18 Training action Revised training curricula months after plan and curricula and 3-y training Effective date or have been action plan on other dates submitted to the Performance agreed by the Bank. Projects, Regional Bank Budgeting, Gender, Climate budgeting, Procurement. Proposed Adopting a Technical DLI 1 MEF Other No later than 18 Training action training curricula months after plan and curricula and 3-y training Effective date or have been action plan on other dates submitted to the Climate agreed by the Bank. budgeting. Bank Implementation Technical DLI 6.3 MEF Due Date 30-Dec-2022 Implementation Marked for plan for rolling plan for e-filing Deletion out e-filing and e- and e-payment for payment for local local taxes taxes. submitted to the Bank. Validation of the Technical DLI 8 ADD Due Date 30-Jun-2022 ODRA report Marked for Open Data published online Deletion Readiness by ADD. Assessment Report and publication of its synthesis by the ADD. Monitor through Fiduciary Systems ADD Recurrent Semi-Annually Periodic reports Marked for periodic reports, submitted timely Deletion the effective and to the implementation satisfaction of the of the newly World Bank. approved strategy “2025 ADD NOG.” 92 ADD training Technical DLI 8 ADD Due Date 30-Jun-2022 ADD training No Change strategy on open strategy on open data to civil data submitted to servants. the Bank. Adopting Technical DLI 4 MEF Other No later than 3-year action plan Marked for Procurement 180 days after to improve Deletion reforms Action MAPS report procurement Plan based on completion system MAPS. performance based on MAPS report satisfactory to the Bank is adopted. Adoption of a risk Technical DDE Other 3 months after Transmission to New mapping the adoption of the Bank of the communication risk mapping said plan. plan within DDE Strengthen Fiduciary Systems DDE Other (i) One year (i) The DDE New internal audit after the has a mapping of missions within effective date, the operational DCAI: (ii) Six months risks related to the (i) develop after effective different state a risk mapping to date procedures. support the (ii) A final internal audit audit report is program; produced by DCAI (ii) on out-of-court schedule an acquisitions of internal audit administrative mission covering buildings. the acquisition of administrative buildings Adaptation of the Technical DDE Other 3 months after Updated manual New DDE revenue the approval of shared with the procedure the risk mapping Bank. manual with risk mapping Improve Fiduciary Systems DDE Other One year after Strengthen the New coordination with effective date budgetary dialogue ministerial in the departments and development of the effectiveness the employment of the budgetary program of the programming of FRD between the the Fonds de DDE and the Remploi domanial ministries (FRD) in relation responsible for to expenditure administrative related to the 93 purchase of buildings administrative buildings . 94 ANNEX 3: PARIS ALIGNMENT AND CLIMATE CO-BENEFITS 1. Morocco is highly vulnerable to climate variability and change, particularly rising temperatures, reduced precipitation leading to droughts23, and coastal flooding. This is particularly true of water scarcity, Morocco being one of the most water-scarce countries in the world: it is quickly approaching the absolute water scarcity threshold of 500 cubic meters (m3) per person per year. With more frequent and severe droughts, Morocco will likely experience negative impacts on water supply, biodiversity, and agriculture and the potentially simultaneous increase in flooding poses a serious water pollution threat. Mean annual temperature is projected to increase by 1.5°C to 3.5°C by mid-century and possibly by more than 5°C by the end of the century.24 Rises in temperature and other extreme weather events could affect education infrastructure and access. Furthermore, climate change is projected to negatively impact food production, food prices and nutritional quality.25 The Climate and Disaster Risk Screening has been performed for this operation. 2. Morocco has however developed a strong and comprehensive legal arsenal26 along with national strategies to face this challenge27 and keeping with its commitments under the Paris Agreement. The GoM is also committed to adapt its PFM system to climate change through a series of reform aimed at strengthening green procurement, green budgeting and ensuring public financing to achieve Morocco’s NDCs, in line with the 2022 Morocco CCDR’s Institutions and Governance cross-cutting pillar. 3. With respect to climate change mitigation, the operation does not present a risk of having a negative impact on the country’s low-GHG emissions development pathways. Activities supported by this public administration operation are universally aligned with the goals of the Paris agreement. The ENNAJAA PforR, particularly in its AF component, focus on areas of PFM and public institutions reforms, with a wide range of activities and results on public budgeting efficiency and transparency (DLI#1; DLI#9) and climate budgeting (DLI#2), revenue administration (DLI#5; DLI#6), decentralization (DLI#3), SOE governance (DLI#1), public investment management (DLI#10), state’s assets management (DLI#11), and public procurement (DLI#4). These areas are all aligned with the goals of the Paris agreement. While some of the DLIs entail a digital component, they focus on the interoperability of key existing PFM systems and do not include a data center component. The Program also aims to improve SOEs management (DLI#1). The DLI do not entail any climate-related risk activity. It will focus on SOEs governance, rather than their activity. Besides, while the scope of SOEs can be broad, the DLI will target in priority SOEs under the General Budget of the State operating in the social sectors (education, health, etc.) and other priority sectors to be defined by the DEPP. These SOEs activities’ climate-related risk is low. Similarly, DLI#11 on state’s assets management focuses on improving the systems used by the State’s Assets Agency (DDE) and will not target any risked activities such as new lands acquisition that could raise climate and social-related issues (expropriation, deforestation, etc.), as per the World Bank’s social and environmental guidelines. 4. With respect to climate change adaptation, the climate-related risks that could impact its activities are low. The Program activities should not be impacted by climate-related hazards. However, the three low risks identified for the parent project remains valid. (i) Increased Poverty and Vulnerability: an increase in disaster- related impoverishment would put pressure on social security systems and livelihoods that target poorer groups 23 As evidenced by the recent string of severe droughts (three in the last four years). 24 Climate Risk Country Profile, World Bank Group 2021. 25 FAO, 2018a: The Future of Food and Agriculture: Alternative Pathways to 2050. Food and Agriculture Organization of the United Nations, Rome, Italy, pp. 228. 26 The 2011 Constitution, the National Charter on the Environment and Sustainable Development, etc. 27 The 2050 long-term low-emission development strategy, the National Sustainable Development Strategy), National Climate Plan for 2030 95 in rural areas. (ii) Assets and Equipment: Climate-related hazards could destroy or degrade assets (such as information and communication technology [ICT] infrastructure and equipment, or local integrated digitalized access points), which would affect service delivery. (iii) Institutional: The public administration may not have the capacity to respond effectively to disasters or to build in effective adaptation mechanisms. The ENNAJAA AF will support low-risk activities when it comes to adaptation, since the Program support mainly institutional reforms to improve the PFM environment and system of the public administration. 5. The Climate-Co Benefits identified in the parent project remain valid and are enhanced by the AF. The ENNAJAA AF will continue the efforts initiated by the parent project on Climate-Budget Tagging (DLI#2). It will build on a strong technical assistance program to help MEF’s Climate Unit in getting the appropriate expertise to adapt its PFM system to climate change.28 Besides, the AF will support and additional DLRs that will (i) improve monitoring of SDGs-related investment projects at the local level and (ii) enrich budget documentation with a climate impact assessment of the government’s debt and macro-fiscal strategy. This annex summarizes the results contributing to climate change adaptation and mitigation of the ENNAJAA Program. The table keeps the same assessment as for the Parent project and highlights the new climate-related component that will enhance the climate-co benefits (DLI#2; DLI#3 and DLI#9). Table 6.1. Summary of results contributing to climate change adaptation and mitigation DLIs Climate Activity Financing Amount DLI#1 Strengthening the • Improving the quality of indicators of PPs as well as mainstreaming US$50 performance approach performance dialogue (DLI1) will foster the inclusion of climate-related million introduced by the LOF performance indicators in PPs and enhance their implementation and accountability for performance. DLI#2 Introducing a • Encouraging and supporting the adoption of a climate-sensitive budget US$28 sustainable and (DLI2) is expected to strengthen climate change policy implementation by: million equitable budget (a) increasing budget allocation in PPs to both climate adaptation and DLR#2.1; mitigation across all ministries, and (b) strengthening implementation, DLR#2.2 thanks to enhanced monitoring and accountability. This DLI has been and restructured in the ENNAJAA AF to adapt it to the Ministry of Finance DLR#2.3 reform calendar and ensure its alignment with other operations supporting Climate PFM, namely, the Morocco Climate Operation / Support to the Nationally-Determined Contribution (NDC) - (P178763). Ultimately, sectors critical to Morocco’s commitments to fight climate change – the environment, energy, water, forestry, agriculture and social protection - are likely to strengthen their investments related to climate adaptation and mitigation, obtain budget for these, and be under scrutiny for implementation. DLI#3 Enhancing the • Improving regions’ budgeting process (DLI3) will achieve the same result US$36 Decentralization agenda for their performance indicators and investment programming. The million by strengthening ENNAJAA AF is adding a DLR to ensure monitoring of SDGs-related (US$14 regions’ public investment projects at the local level (DLR#3.4). The platform monitoring million investment the regional development plans (PDR) will incorporate a SDG module to for 28 TF0B7861 and TF0C0501 96 management tag every project related to the SDGs. The module will specifically target DLR#3.4) SDGs related to climate change and include mitigation and adaptation actions: 7. Affordable and clean energy; 11. Sustainable cities and communities; 12. Responsible consumption and production; and, more importantly, 13. Climate action. DLR#3.4 will enable the Ministry of Interior and local governments track and better monitor investment projects expected to reduce or avoid GHG emissions or to support other climate mitigation activities. DLR#3.4(i) will ensure that all projects are financially tracked by including the investment expenses managed by the regional projects’ execution agencies (AREPs). DLI#4 Improving the • Open Data on procurement will enable civil society to monitor public US$8 efficiency of public procurement to advocate for more green or sustainable procurement. In million procurement through some countries, like Bolivia, civil society is making clear links between (US$8 data production and openness and sustainability, including strengthening of sustainable food million analysis purchasing through digitalization of procurement data. In Mexico, civil for society is supporting community opposition to construction of a dam, DLR#4.4) based on the analysis of contracting data. In Honduras, there are innovative efforts to join up infrastructure contract data, environmental impact assessments, land use data, and risk maps. Publication of public procurement data, including related to climate change, is supplementary to the support provided by the Morocco Climate Operation29 on green procurement. The ENNAJAA AF adds a new DLR to the parent project to incentivize the digitalization of the post-contract award documents (DLR#4.4), which will result in a significant reduction of paper-based procurement processes, eventually leading to a reduction in GHG emissions. DLI#5 Improving tax • Improving tax information systems (DLI5) will provide the opportunity to US$15 compliance and produce data on tax expenditures relevant to climate and to track climate- million performance of the tax responsive budgeting (DLI2). Tracking climate-related tax expenditures will administration not only foster the GOM’s efforts to fight climate change using the fiscal tools, but also tax compliance on tax relevant to climate change and taxation/exemption policy the GOM could leverage to support climate policy (e.g., on fuel, electricity and water consumption). Such taxation policy would in turn influence private sector alignment with national climate efforts. DLI#6 Increasing • s/a US$8 revenue of million municipalities DLI#7 Improving data • The assessment of the parent project still holds true: focus on data s/a (not exchange and interoperability standards and infrastructure (DLI7) will help reduce included interoperability of duplication and support efficiency by promoting the re-use of existing data in the AF) information systems across integrated services. Digitalizing key public services (DLI7) is expected to reduce the consumption of fossil fuels used in traveling to And administrative service points and/or receiving services through traditional 29 Morocco Climate Operation / Support to the Nationally-Determined Contribution (NDC) - (P178763) 97 analog channels, and reduce the consumption of paper. Improving inter- DLI#8 Improving the agency coordination in data management and governance and providing e- proactive disclosure of services to citizens will reduce the environmental impact of data open government data transactions. The data interoperability framework and platform will consider climate risk and climate policy data in its design to ensure resilience in adverse impact scenarios, but also to mainstream climate risk awareness and the need to contingency plan and develop responses to climate disasters. • The assessment of the parent project still holds true: Mainstreaming climate considerations into budget processes (DLI1) combined with improving information data consolidation (DLI7) and sharing (DLI8) will contribute to enhancing data availability on climate risks and policy commitment, and contribute to raising awareness on climate related disasters. Specifically, this activity strives to promote climate data collection and reporting within the public sector to inform policy and regulatory action, and disclosure of relevant data to the private sector. The availability and accessibility of quality data in a timely and reliable manner to both public and private sector stakeholders is not just critical in disaster settings, but also in the day to day of a changing climate to the development, deployment and monitoring of strategies, technologies and processes that increase the resilience of value chains, and civic systems and allow for the mitigation if not reversal of adverse climate impact. Ultimately, DLI8 will create a feedback loop of data collection and sharing between the public and private sector that informs climate related policy processes, regulation/legislation, and private sector activity from research and development, business creation and value chain optimization. DLI#9 Improving budget • This new AF DLI will contribute to enrich budget documentation with a US$37 transparency climate impact assessment of the government’s debt and macro-fiscal million strategy (DLR#9.3). An exhaustive section will be added in the three-years (US$24 budget programming budget document (PBT) on the links between the million debt sustainability and economic growth and climate change. for DLR#9.3) DLI#10 Improving Public • This new AF DLI will contribute to prioritize public investments, accounting US$25 Investment for close to 20 percent of the Moroccan GDP. Ultimately, the prioritization Million Management exercise will be done through several lenses, including the climate impact (US$8 dimension. The prioritization will include criteria to identify projects that Million will address climate mitigation and adaptation (for instance, projects for reducing GHG emissions). DLR#10.1) DLI#11 Improving State’s • Similarly, DLI#11 on state’s assets management focuses on improving the US$43 assets management systems used by the State’s Assets Agency (DDE) and will not target any million risked activities such as new lands acquisition that could raise climate and social-related issues (expropriation, deforestation, etc.), as per the World Bank’s social and environmental guidelines. 98