Somalia - Strengthening Institutions for Economic Policy Management and Infrastructure Devt - IPR May 2023

IMPLEMENTATION PROGRESS AND RESULTS REPORT IPR A. Report summary and proposed actions Report Data Project name: STRENGTHENING INSTITUTIONS FOR ECONOMIC POLICY MGEMENT AND INFRASTRUCTURE DEVT Project code: P-SO-K00-002 Country Somalia Sector: Multi -Sector Environmental categorization - Report type: Date of report: 16.05.2023 Mission: DESK REVIEW PSR 0006 From: 17.04.2023 To: 01.05.2023 Prepared by Task Manager: Mosllem Ahmed ALAMIR AHMED Alternate Task Manager : Division Manager : GEBRE -SELASSIE Kalayu ECGF2 Project Data PROJECT FINANCING in UAC Financing sourceinstrument Foreign currency Local currency Total Fragile States Facility TSF - Pillar 3 3,000,000.00 0.00 3,000,000.00 T O T A L 3,000,000.00 0.00 3,000,000.00 PROCESSING MILESTONES bank approved financing only Loan Number Date approved Date signed Date of entry into force Date effective for first disbursement Disbursement deadline 5900155015304 25.03.2019 06.05.2019 06.05.2019 06.05.2019 30.12.2024 LOAN AMOUNT in UAC Loan Number Net loan Approved UAC Signed UAC Cancelled UAC Net Loan UAC 5900155015304 3,000,000.00 3,000,000.00 3,000,000.00 0.00 3,000,000.00 T O T A L 3,000,000.00 3,000,000.00 0.00 3,000,000.00 DISBURSMENT STATUS at supervision date in UAC Loan Number Disbursed to date Disbursed to date UAC Disbursed to date Undisbursed to date in UAC Undisbursed to date 5900155015304 2,207,570.42 2,207,570.42 73.59 792,429.58 26.41 T O T A L 2,207,570.42 73.59 792,429.58 26.41 Executing and Implementation agencies Borrower GOVERNMENT OF SOMALIA MINISTRY OF FINANCE Guarantor GOVERNMENT OF SOMALIA MINISTRY OF FINANCE Executing Agency GOVERNMENT OF SOMALIA MINISTRY OF FINANCE Performance status Progress towards development objective Rating on Development Objective DO Performance rating Summary of key findings Current Previous The project is rated satisfactory in terms of its likelihood to realize the development outcomes and outputs. The project implementation is on track towards achievement of the development objective enhance institutional capabilities in economic planning to anchor government's formulation, implementation and coordination of macro -economic and fiscal policies; data quality and satisfactory satisfactory reporting; and technical skills development that is critical for the reconstruction and development phases of the Somali economy Implementation progress Rating on Implementation Progress IP Performanc e rating Summary of key findings Current Previous The project's implementation progress is rated as satisfactory with a disbursement ratio of 73.8 as of end May 2023. COVID 19 pandemic and difficulty in attracting quality TAs to work in Somalia have ne gatively impacted on the pace of implementation of some of the project's activities. The project has made good progress in the project implementation and completed 73 of the planned procurement activities. Some of the achievements are reliable GDP and CP I data are now available for policy formulation. GDP numbers are at aggregate level, generated by both the IMF and the National Bureau of Statistics. Efforts are being made to produce data on composition of GDP. CPI data now regularly produced by the Stati stics Department. All SMP4 indicative targets and structural benchmarks were achieved except one; this was instrumental in facilitating Somalia's reaching the HIPC decision point in March 2020. A macro -fiscal strategy exists and has been recently updated i n light of COVID. The Medium -Term Macro -Fiscal Strategy has been used to draft the budget strategy for FY2021, FY2022, and FY2023. Two FGS staff are already trained and contributed to the preparation of the FY2022 and FY2023 budget strategy. The Feasibili ty and Preliminary Engineering Design Study, Environmental and Social Impact Assessment ESIA and preparation of Tender Documents for the Lowyaddo - Fardahha -Borama Road were delivered. The only outstanding project activities under this component is the completion of the procurement process for the delivery of Feasibility study for Hargeisa - Oadweine -Burao Road 183km. This activity is currently at technical and financial proposals evaluation. The budget for this activity is USD 1.3m of which USD 800,00 0 come from the SIEPMID project as savings from the Lowyaddo - Borama study. The project extended to December 30, 2024, to enable the project to fully implement the infrastructure activity of the Somaliland Roads e.g., Feasibility studies and skills deve lopment for Hargeisa -Oadweine -Burao Road, 183km. It is the only project's pending procurement activity, which require 2 months to complete the procurement stage and 16 months to complete the study. Since this activity is still under procurement stage, there is a need for extension to undertake a full feasibility study, preliminary and detailed engineering design and ESIA and preparation of tender documents for the Upgrading of 183 -Km Hargeisa - Odweine -Burao Road from Gravel to Bitumen Standard. satisfactory satisfactory Overall project performance classification Overall Project Performance PP, PPP or NPPP Performance rating Summary of key findings Current Previous The project is classified a NPPP, as both The DO and IP are rated satisfactory. Generally, the project implementation is on track and going forward, the implementation of activities is expected to accelerate. Non Potentialy Problematic Project Non Potentialy Problematic Project Issues, risks and actions for management consideration Issues affecting project implementation Key issues Corrective actions Responsible Deadline Status Difficulty in attracting quality TAs to work in Somalia. Identification of suitable, affordable, and committed personnel to work in Somalia is proving a challenge. Several candidates' fee expectations tend to be high, beyond budget. Conduct an aggressive image building campaign for Somalia especially in the foreign press FGS 30.08.2022Ongoing In progress Main risks and mitigation Risks Mitigation measures applied or proposed Responsible Deadline NA NA NA NA 30.08.2022 NA B. Results reporting and assessment Progress towards development objective project purpose State the project development objective usually the project purpose as set out in the Results -based Logframe and assess progress Building institutional capabilities in economic planning and reporting; and technical skills critical for the reconstruction and infrastructure development Outcome reporting Outcome indicators as per RLF Baseline value Most recent value End target Progress toward endtarget Assesment Efficient and effective institutions built Harmonized and standardized ME framework across FGS and FMS None ACHIEVED. FGS HAS DEVELOPED A ME FRAMEWORK FOR MONITORING THE IMPLEMENTATION O Harmonized and standardized ME framework for applied by all Federal FMS Institutions NA AchievedLikely to be achieved Achieved. FGS has developed a ME framework for monitoring the implementation of NDP9 activities. The framework formed part of the 2021 budget policy framework paper. An Economist was recruited and currently working with the Office of the Prime Minister OPM to pursueprogress the development of the ME framework. Responsibility for the M E function in entire Government was entrusted to OPM. Improved data quality and reporting GDP and CPI produced using the System of National Accounts Unreliable GDP figures RELIABLE GDP AND CPI DATA AVAILABLE FOR POLICY FORMULATION Reliable GDP and CPI data available for policy formulation. NA AchievedLikely to be achieved Achieved. The National Bureau of Statistics NBS has started producing National Accounts data. Started producing GDP numbers in 2021, compiled using the expenditure a pproach. Nonetheless provisional GDP numbers became available in 2016 produced by the IMF with input from FGS staff. CPI data is also now regularly produced by the NBS and will further improve with the ongoing training of FGS and FMS staff in the compilati on of both CPI and GDP numbers thanks to the project support. However, the reliability of the numbers is still in question given the differences between numbers produced by NBS and those of the WB and IMF. Outcome rating Rating on project outcomes Performance rating Summary of key findings Current Previous The project's outcomes rated highly satisfactory. Progress is being realized and the project is on track to achieve its end targets; considering the latest value of the outcome indicators. 4 3 Output reporting Output indicators Most recent value Annual target End target Progress towards annual target Progress towards end of project target Assessment Economic Strategy Unit established and staffed SMP implementation remains on track with operational support from the ESU ALL SMP4 INDICATIVE TARGETS AND STRUCTURAL BENCHMARKS WERE ACHIEVED EXCEPT ONE. NA All end December 2020 indicative targets and structural benchmarks achieved NA NA On track Achieved. Government continually updates its macro -fiscal strategy to reflect any new significant developments that could affect the fiscal numbers. The strategy has been used to draft the budget strategies for fiscal years 2021, 2022, 2023 and being used to prepare the budget strategy for the next fiscal year 2024 expected to be ready end May 2023. ME policy and framework for MoF and federal government NONE 2018 NA ME operational guidelines applied all federal institutions by 2021 NA NA On tr ack Achieved. Medium -Term Macro - Fiscal Strategy developed Medium -term fiscal strategy MEDIUM -TERM MACRO -FISCAL STRATEGY FOR 2021 -25 DEVELOPED AND USED. NA Government -owned medium -term macro fiscal strategy used to support budget formulation NA NA On track Achieved. Government continually updates its macro -fiscal strategy to reflect any new significant developments that could affect the fiscal numbers. T he strategy has been used to draft the budget strategies for fiscal years 2021, 2022, 2023 and being used to prepare the budget strategy for the next fiscal year 2024 expected to be ready end May 2023. Improving Data Quality and reporting Month ly Consumer Price Index CPI and annual Gross Domestic Product GDP MONTHLY CONSUMER PRICE INDEX CPI AND ANNUAL GROSS DOMESTIC PRODUCT GDP PRODU NA Real GDP figures underpin medium term macro -fiscal framework 2020 NA NA On track Achieved. Macro fiscal frameworks for 2021, 2022 and 2023 have used GDP aggregates produced by both the IMF and NBS for calculation of and targeting taxGDP ratios. The missing part is on yet -to-be availed Needed data on GDP composition to be able to know the contribution of the agriculture, industry and services sectors to GDP and be able to targetdirect the tax reform in a much better way. Macro fiscal framework Tra ining Macro -fiscal framework nbr 9.000 5.00 5.000 180.00 180.00 On track Achieved. As many as 23 staff have been trained in macro -fiscal analysis and forecasting however only three FGS staff have reached near perfection in this field an d have contributed to the preparation of the budget strategies for the last three years. The three staff still need more training since the analysis currently undertaken is limited by unavailability of sufficient timeseries data that would be required to p roduce elasticities for the key fiscal variables. They will need further training in use of regression analysis when undertaking macro -fiscal analysis and forecasting. More hands -on training is anyway ongoing between the project consultants and FGS staff , and more formal macro -fiscal training is planned in Q3 of 2023 to augment the training that took place between March and April 2022. It is expected that at least two more staff will pick a lot from the training and assisted further to become local expert s. Critical mass of infrastructure analysts produced Number of staff undergoing on job training nbr 1.500 5.00 5.000 30.00 30.00 Not on track Target likely to be achieved. Recruitment of TAs engineers that will provide the on -the-job training is ongoing, expected to be concluded by Q2 of 2023. Upstream studies conducted for the implementation of infrastructure projects Technical feasibility study reports nbr 2.000 2.00 2.000 100.00 100.00 On track Achieved. Implementation progress reports Number of progress reports produced quarterly Audit report nbr 2.000 2.00 2.000 100.00 100.00 On track Target achieved. 4 quarterly progress reports have been produced in each of the past two years 2021 and 2022. Output rating Rating on project outputs Performance rating Summary of key findings Current Previous 3 4 The project outputs are rated as satisfactory as all the project outputs are on track to reaching the annual targets and it is expected that end of project outputs will be achieved. Development objective DO rating Progress towards development objective Rating on Development Objective DO Performance rating Summary of key findings Current Previous The project is rated satisfactory in terms of its likelihood to realize the development outcomes and outputs. The project implementation is on track towar ds achievement of the development objective enhance institutional capabilities in economic planning to anchor government's formulation, implementation and coordination of macro -economic and fiscal policies; data quality and reporting; and technical skills development that is critical for the reconstruction and development phases of the Somali economy satisfactory satisfactory Additional andor unanticipated outcomesoutputs optional Indicator Baseline End target Most recent value 16.05.2023 -11:13:28 -PRD 

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