Kenya - Public Debt Management Support Project - IPR April 2023

IMPLEMENTATION PROGRESS AND RESULTS REPORT IPR A. Report summary and proposed actions Report Data Project name: PUBLIC DEBT MANAGEMENT SUPPORT PROJECT Project code: P-KE-KF0-006 Country Kenya Sector: Institutional Support Environmental categorization - Report type: Date of report: 12.05.2023 Mission: DESK REVIEW PSR 0003 From: 22.04.2023 To: 24.04.2023 Prepared by Task Manager: Angelique UMUBYEYI Alternate Task Manager : Division Manager : GEBRE -SELASSIE Kalayu ECGF2 Project Data PROJECT FINANCING in UAC Financing sourceinstrument Foreign currency Local currency Total M.I.C.F TechAssistMIC 0.00 800,000.00 800,000.00 T O T A L 0.00 800,000.00 800,000.00 PROCESSING MILESTONES bank approved financing only Loan Number Date approved Date signed Date of entry into force Date effective for first disbursement Disbursement deadline 5500155013708 27.04.2020 23.09.2020 23.09.2020 23.09.2020 31.05.2024 LOAN AMOUNT in UAC Loan Number Net loan Approved UAC Signed UAC Cancelled UAC Net Loan UAC 5500155013708 800,000.00 800,000.00 800,000.00 0.00 800,000.00 T O T A L 800,000.00 800,000.00 0.00 800,000.00 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 5500155013708 179,321.24 179,321.24 22.42 620,678.76 77.58 T O T A L 179,321.24 22.42 620,678.76 77.58 Executing and Implementation agencies Borrower MINISTRY OF FINANCE Guarantor GOVERNMENT OF KENYA MULTINATIONAL Executing Agency 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, despite the COVID -19 pandemic shock. The project implementation is on track towards achievement of the development objective strengthen public debt managemen t capacity of the Kenya Public Debt Management Office for transparent, accountable and effective management of public debt and borrowing satisfactory satisfactory Implementation progress Rating on Implementation Progress IP Performance rati ng Summary of key findings Current Previous The rating on implementation progress is satisfactory as project activities are progressing on a steady pace. The project Implementation Unit PIU has been established in charge of the day -to-day project impl ementation. Both project workplan and procurement plan were prepared and approved. The upgrading and reengineering of the e -ProMIS has been suspended because a new integrated system known as the Public Investment Ma nagement Information System PIMIS is being developed. The recruitment of the high level Advisors on debt management delayed, and the NT proposed to replace the activity by TAs to support digitalization of the PDMO and the development of the PDMO frameworks. It is also noted that an Arrears Cl earance Framework as an output is not one of the activities in the work -plan and therefore not budgeted for, it will be implemented with the savings if available. 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 pro ject 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 COVID -19 Pandemic. The pandemic has negatively affected the roll -out of some aspects of project activities due to travel restrictions and in -person activities. Reschedule the training after easing social distancing measures and obtaining NOL for the train ing. Project coordinator 31.01.2021done Completed Delays in inclusion of the project budget in the national Government budget. The project became effective after conclusion of budget preparation process. The project budget was therefore not part of the main Budget Estimates. This delayed the implementation of project activities. Authority was sought to allow for use of project funds to implement the project activities pending regularization in the budget. Project coordinator 31.01.2021done Comp leted Main risks and mitigation Risks Mitigation measures applied or proposed Responsible Deadline Under close watch as disbursement is due for closure in less than 15 months, yet Under close watch as disbursement is due for closure in less than 15 months, yet the project is 22.4 disbursed. A number of actions are agreed to improve the disbursement rate. The disbursement is projected 90 rate by the end of December 2022. The Purchase of IT equipment is already underway and expected to conclude by end of June 2023. This will enhance absorption rate of the project funds. The bulk of undisbursed funds are earmarked for consultancy services which are currently at an advance stage of procurement. These activities will raise the disbursement rate further to around 80. The bulk of the uncommitted funds relates to services and operational cost. The train ing activities and bench marking visits are expected to conclude before the end of this year 2023 Project Coordinator GoK AfDB 31.12.2023 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 The goal of the project is to strengthen public debt management capacity of the PDMO for transparent, accountable, and effective management of public debt and borrowing. The ultimate objective is to support the GoK to better manage the level and composition of nationa l public debt, national guarantees and other fina ncial obligations of national government within the fiscal consolidation framework and develop a framework for sustainable debt control. Outcome reporting Outcome indicators as per RLF Baseline value Most recent value End target Progress toward endtarget Assesment Debt management framework strengthened Debt policy and management r16 4.000 4.080 4.200 40.00 Likely to be achieved with correctives actions likely to be achieved. The country is implementing the necessary economic policy and institutional reforms which will see an improvement in the CPIA score. The latest CPIA assessment was done in 2019. There is no change in score rating for the latest CPIA score and the baseline value. Long -term contingent liabilities management improved Liability management risk High Risk HIGH RISK Medium Risk NA Likely to be achieved with correctives actions likely to be achieved. Review and operationalization of the liability management framework is a work in progress which will see an improvement in long -term contingent liability management. Outcome rating Rating on project outcomes Performance rating Summary of key findings Current Previous The overall project rating is 3. Satisfactory progress is being realized and the project is on track to achieve its end targets; taking into account the latest value of the outcome indicators. 3 3 Output reporting Output indicators Most recent value Annual target End target Progress towards annual target Progress towards end of project target Assessment Fiscal Commitments and Contingent Liabilities reviewed Assessment report on the FC of PPP commitment FCCL COMMITMENT HAS BEEN UNDERTAKEN, BUT NOW BEEN EXPANDED TO INCLUDE PPPS AND U NA Assessment report on the FC of PPP commitment NA NA Not on track activity financed by World Bank Assessment report of contingent liability FCCL COMMITMENT HAS BEE N UNDERTAKEN, BUT NOW BEEN EXPANDED NA Assessment report of contingent Liability conducted and action plan for implementing recommendation NA NA On track likely to be achieved TO INCLUDE PPPS AND U elaborated and endorsed FCCL framework developed FCCL COMMITMENT HAS BEEN UNDERTAKEN, BUT NOW BEEN EXPANDED TO INCLUDE PPPS AND U NA FCCL framework developed and operationalized NA NA On track likely to be achieved. Guidelines for Sinking Fund have been developed and are currently awaiting legal clearance from the Attorney General Establishment of a framework for sinking funds Sinking funds framework developed THE PFM ACT ESTABLISHED THE SINKING FUNDS, BUT THE FRAMEWORK FOR ITS OPERATIONAL NA Liability management framework developed and operationalized NA NA On track likely to be achieved. Domestic market development for government securities improved Operational guidelines and rules to support secondary market trading activities developed FRAMEWORK FOR SECONDARY MARKET TRADING ACTIVITIES EXISTS, BUT NEED TO BE UNDATED NA Guidelines and rules to support secondary market trading activities develop and operationalized NA NA On track likely to be achieved. Guidelines for Sinking Fund have been developed and are currently awaiting legal clearance from the Attorney General Debt transparency and accountability framework improved Disclosure fr amework for debt statistics, reporting and settlement developed DISCLOSURE FRAMEWORK FOR DEBT STATISTICS, REPORTING EXISTS, BUT REQUIRED UPDATE NA Disclosure framework for debt statistics, reporting and settlement developed and operationalized NA NA On track likely to be achieved. Procurement of a consultant to undertake the activity is on course Number of staff trained on debt dissemination standards nbr 0.000 10.00 10.000 0.00 0.00 On track Achieved. Target achieved and surpassed likely to be achieved. Benchmarking visit is projected in the Training Plan and is scheduled for 2023 [WOMEN] -Number of staff trained on debt dissemination standards nbr 0.000 3.00 3.000 0.00 0.00 On track Achieved. Target achieved and surpassed likely to be achieved. Benchmarking visit is projected in the Training Plan and is scheduled for 20 23 Monitoring and evaluation functions of borrowing and debt -related transactions strengthened Annual reports on borrowing and debt -related transactions portfolio conducted ANNUAL REPORTS ON BORROWING AND DEBT -RELATED TRANSACTION PORTFOLIO EXIST; BUT QU NA Annual reports on borrowing and debt -related transaction portfolio produced and endorsed by NT NA NA On track likely to be achieved. The Electronic Project Monitoring Information System for Kenya e -ProMIS Kenya evaluated THE E -PROMIS SYSTEM HAS BEEN OPERATIONALIZED SINCE 2020, BUT YET TO BE EVALUATED NA Evaluation report on the e-ProMIS functionality and recommendation implemented NA NA On track likely to be achieved Enhanced capacity and knowledge for results -based debt management Number of staff benefited from training on: loan negotiation; contract management, resource mobilization; risk management; and ME nbr 0.000 30.00 30.000 0.00 0.00 On track Achieved. Target achieved and surpassed likely to be achieved. Bench marking visit is projected in the Training Plan and is scheduled for 2023 [WOMEN] -Number of staff benefited from training on: loan negotiation; contract management, resource mobilization; risk management; and ME nbr 0.000 9.00 9.000 0.00 0.00 On track Achieved. Target achieved and surpassed likely to be achieved. Benchmarking visit is projected in the Training Plan and is scheduled for 2023 Number of staff benefited from study benchmarking visits to countries that offer the relevant experience and lessons nbr 0.000 10.00 10.000 0.00 0.00 On track Achieved. Target achieved and surpassed likely to be achieved. Benchmarking visit is projected in the Training Plan and is scheduled for 2023 Number of staff benefited from study benchmarking visits to countries that offer the relevant experience and lessons nbr 0.000 10.00 10.000 0.00 0.00 On track Achieved. Target achieve d and surpassed likely to be achieved. Benchmarking visit is projected in the Training Plan and is scheduled for 2023 Output rating Rating on project outputs Performance rating Summary of key findings Current Previous The project is rated as satisfactory as all of the project outputs are on track to reaching the annual targets and it is expected that end of project outputs will be achieved. 3 3 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, despite the COVID -19 pandemic shock. The project implementation is on track towards achievement of the development objective strengthen public debt managemen t capacity of the Kenya Public Debt Management Office for transparent, accountable and effective management of public debt and borrowing satisfactory satisfactory Additional andor unanticipated outcomesoutputs optional Indicator Baseline End target Most recent value 12.05.2023 -09:52:25 -PRD 

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