Date of Submission to Coordination Unit1:

A. GENERAL INFORMATION

1. Activity NameSupporting the Design and Implementation of Economic and Social Reforms for Inclusive Growth in Tunisia through Capacity Building in Statistics, Monitoring and Evaluation

2. Requestor Information Name: Mrs. Kalthoum Hamzaoui Title: Director General of multilateral Cooperation

Organization and Address: Ministry of Development, Investment and International Cooperation, 98 Avenue Mohamed V (Place Pasteur), Tunis-Belvédère, TunisiaTelephone: (+216) 71 892 653 Email: k.hamzaoui@mdci.gov.tn

3. Recipient Entity Name: Mr. Rached Ben Romdhane Title: Director of Cabinet

Organization and Address: Ministry of Development, Investment and International Cooperation, 98 Avenue Mohamed V (Place Pasteur), Tunis-Belvédère, TunisiaTelephone: (+216) 71 794 564 Email: rached.benromdhane@tunisia.gov.tn

4. ISA SC Representative

Name: Mr. Jacob Kolster Title: Director, North Africa regional department

Organization and Address: African Development Bank, rue du dollar, Berges du Lac 2, Tunis, Tunisia

Telephone: (+216) 71 10 20 65 Email: j.kolster@afdb.org

Name: Mr. Nicolas Pinaud Title: Head of the Sherpa Office and Global Governance Unit

1 This proposal was initially submitted on 27 April 2016 and is now (15 October 2018) submitted as an application for an extension of activities, funding and timeframe to the MENA Transition Fund.

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Organisation and Address: Organisation for Economic Co-operation and Development, 2 rue André Pascal, Paris, France

Telephone: (+33) 01 45 24 95 76 Email: nicolas.pinaud@oecd.org

5. Type of Execution (check the applicable box)Type Endorsements Justification

Country-Execution Attach written endorsement from designated ISA

√ Joint Country/ISA-Execution

Attach written endorsement from designated ISA

The proposed project aims to support more effective implementation of the Government of Tunisia (GoT)’s Strategic Development Plan 2016-2020 and structural reforms by strengthening its capacity in statistics, impact assessment, monitoring and evaluation. The project comprises four components: (1) Support to the design and implementation of macro-economic and structural policies and reforms; (2) Support to inclusive regional development through improved regional statistics and monitoring and evaluation capacity; (3) support to Tunisia’s open data agenda through the design and installation of a new statistical dissemination infrastructure; and (4) Project management and audit. The duration of the project is 3 years.

The nature of the project requires some activities to be executed by the Government of Tunisia (GoT), in close collaboration with the participating ISAs, (OECD and AfDB) and other activities to be directly and exclusively executed by the OECD.

The part executed by the GoT will aim to strengthen its capacity in designing, monitoring and evaluating structural macroeconomic and regional development reforms and policies. The OECD executed activities will complement these efforts by putting at the disposal of the GoT the OECD’s expertise, established standards and instruments and peer reviews in the areas of macroeconomic policymaking, structural reforms, regional development and regional statistics.

In addition, the OECD has been engaged with the Government of Tunisia for over a decade

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to support reforms for socio-economic development through policy analysis and advice, including through the March 2015 report Tunisia: A Reform Agenda to Support Competitiveness and Inclusive Growth (Better Policies Series) or four ongoing MENA Transition Fund projects on investment, PPPs, youth employment and tax reform implemented with other partners. Similarly, AfDB has been a privileged partner of Tunisia since 1964 and is of the bank’s 3 top beneficiaries in terms of historical cumulative approvals. Therefore, Tunisia has experience in directly dealing with AfDB and accessing OECD research and tools.

AfDB will be the only ISA responsible for the oversight and management of the funds used for the country-executed portion.

The project will also leverage on the work performed by other development partners providing support in the above areas (e.g. the EU, World Bank and AfDB).

ISA-Execution for Country

Attach written endorsement from designated ISA

(Provide justification for ISA-Execution)

ISA-Execution for Parliaments

Attach written endorsements from designated Ministry and ISA

6. Geographic Focus√ Individual country (name of country): Republic of Tunisia

Regional or multiple countries (list countries): N/A

7. Amount Requested (USD) Amount Requested for direct Project Activities:(of which Amount Requested for direct ISA-Executed Project Activities):

USD

4,381,704.00

(Original: 3,678,017; AF OECD: 703,687.00)

including:

OECD-executed project activities: USD 2,551,704.00-

(original: 1,848,017.00; AF OECD:

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703,687.00)Government of Tunisia executed activities: USD 1,830,000

Amount Requested for ISA Indirect Costs:2 AfDB: USD 100,000OECD: USD 171,566.00

(Original OECD: 124,253; AF OECD: 47,313.00)

Total Amount Requested: USD 4,653,270

(Original: 3,908,270.00; AF OECD: 751,000.00)

8. Expected Project Start, Closing and Final Disbursement DatesStart Date:

1 September 2016

Closing Date:

30 Novembre 2021

End Disbursement Date:

28 February 2022

9. Pillar(s) to which Activity RespondsPillar Primar

y(One only)

Secondary(All that apply)

Pillar Primary(One only)

Secondary(All that apply)

Investing in Sustainable Growth. This could include such topics as innovation and technology policy, enhancing the business environment (including for small and medium-sized enterprises as well as for local and foreign investment promotion), competition policy, private sector development strategies, access to finance, addressing urban congestion and energy intensity.

√ Enhancing Economic Governance. This could include areas such as transparency, anti-corruption and accountability policies, asset recovery, public financial management and oversight, public sector audit and evaluation, integrity, procurement reform, regulatory quality and administrative simplification, investor and consumer protection, access to economic data and information, management of environmental and social impacts, capacity building for local government and decentralization, support for the Open Government

√

2 ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including staff time, travel, consultant costs, etc.

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Partnership, creation of new and innovative government agencies related to new transitional reforms, reform of public service delivery in the social and infrastructure sectors, and sound banking systems.

Inclusive Development and Job Creation. This could include support of policies for integrating lagging regions, skills and labor market policies, increasing youth employability, enhancing female labor force participation, integrating people with disabilities, vocational training, pension reform, improving job conditions and regulations, financial inclusion, promoting equitable fiscal policies and social safety net reform.

√ Competitiveness and Integration. This could include such topics as logistics, behind-the-border regulatory convergence, trade strategy and negotiations, planning and facilitation of cross-border infrastructure, and promoting and facilitating infrastructure projects, particularly in the areas of urban infrastructure, transport, trade facilitation and private sector development.

√

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B. STRATEGIC CONTEXT

10. Country and Sector Issues

Tunisia’s successful political transition has not produced yet the expected benefits in terms of economic recovery and transformation. Five years after the 2011 revolution, Tunisia continues to report weak growth, well below its historical performance (i.e. 5% during the decade leading to the 2011 revolution). Growth is estimated at 0.8% for 2015, reflecting a decrease or stagnation of all economic sectors, except non-commercial services, driven by wage increases in the public service, and agriculture whose performance was particularly boosted by an exceptional production of olive oil (1.77 million tons in 2015 against 350,000 tons in 2014). In 2016, GDP growth is projected at 2% and will continue to be driven mainly by domestic consumption. The authorities expect an acceleration of growth between 2016 and 2020, with an average of 4% over the period, driven by an improved security and social context, and an acceleration of the implementation of structural reforms, which should be fostered by the adoption of the 5-year plan. Nevertheless, Tunisia’s macroeconomic fundamentals remain fragile, especially on the external and debt fronts. In addition, while budget deficit shows a downward trend since 2014, the budget composition (i.e. strong emphasis on current expenses) and slow pace of public investment remain problematic.

Similarly, Tunisia continues to face significant regional disparities and high unemployment, which represent major weaknesses that contributed to the outbreak of the 2011 revolution. The gap has actually widened over the years between large coastal cities and interior regions. The last census, in 2014, shows that in terms of equipment, road infrastructure, health and leisure services, the governorates of Kasserine, Sidi Bouzid, Gafsa, Jendouba, Kairouan, Kebili are far behind the national average, but also far from the average reported by coastal governorates. For instance, national statistics show that the knowledge level is 30 times higher in Tunis than in an interior region such as Kasserine while quality of health services is six times higher in Tunis compared to Sidi Bouzid. These disparities have fueled several social uprisings recently and created further security challenges for the GoT. The Unemployment rate remains also high at 15.4% at the end of 2015. Unemployment particularly affects young graduates (31.2%) and women (22.6%). These high rates reflect the slow pace of reforms undertaken by the authorities so far, the low number of jobs created by the private sector because of the non-conducive business environment (notably in interior regions); and the mismatch between the training offered by the educational system and the needs of the labor market.

In order to address these weaknesses and deliver accelerated, inclusive and sustainable growth, the newly democratically elected government that took office in February 2015 initiated reform efforts and is putting the final touches to a 5-year Strategic Development Plan (SDP) that would guide the country’s investment and reform efforts. The SDP should serve as a base to produce regional development plans as well.

However, the implementation of this ambitious plan along with the necessary structural reforms require well developed design, impact assessment, monitoring and evaluation mechanisms and tools as well as availability of good statistical indicators to measure outcomes in terms of social and economic performance, with a particular focus on disadvantaged regions and groups. The availability of such mechanisms, tools and indicators is key to inform public decision making and help the GoT take corrective actions if need be. These instruments will also be useful to track and evaluate Tunisia’s progress in the implementation of the Deauville Partnership’s Compact for Economic Governance.3

3 Adopted by all Deauville Partners at a Senior Officials’ Meeting in May 2015, the Compact for Economic Governance provides a framework for key

policy objectives to promote good governance and a sound business climate, to be undertaken by Arab Countries in Transition and supported by the

G7, Deauville Partner countries, the OECD and the international financial institutions, as well as relevant coordination platforms.

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Against, this background, the objective of the present project is to assist the government in building capacity in these key areas, thereby contributing to the successful execution of the 5-year plan, associated structural reforms and policies, and beyond.

11. Alignment with Transition Fund Objective

The objective of the Transition Fund is to strengthen governance and public institutions, and foster sustainable and inclusive economic growth by advancing country-led policy and institutional reforms. The project is fully aligned with the Fund’s objectives because it aims to foster economic and social transition in Tunisia through support to the implementation of home-grown and country-owned reforms. Specifically, the project is aligned with the following thematic areas of the Fund: (i) investing in inclusive development and job creation by fostering reforms that enhances the inclusion of regions and disadvantaged groups; and (ii) enhancing economic governance by supporting greater transparency and capacity in reporting and assessing government policies and reforms. In addition, the project will leverage on the work supported by the European Union (EU) on regional statistics, which is in line with the Fund’s focus on “funding for technical cooperation proposals that leverage other supporting relationships that are external to the recipient entity and supporting ISAs”.

12. Alignment with Country’s National Strategy

The 2011 revolution revealed the limits of the economic development model used by Tunisia over the past decades and its inability to deliver equitable distribution of wealth and economic opportunities across regions and social groups. This prompted the authorities to rethink the country’s development policies in order to create inclusive and sustainable growth.

The new government’s priorities are articulated in the 2016-2020 strategic orientation note published in August 2015. The Government of Tunisia (GoT) is also finalizing a 5-year Strategic Development Plan (SDP) 2016-2020 to implement the vision and priorities presented in the strategic note. This plan is expected to be ready by summer 2016 and presented to the international community during an international conference in fall 2016.

The Orientation Note published by the GoT identifies 5 priority axes for government action and reform efforts: (i) Good governance and reforms; (ii) Enhanced economic sophistication; (iii) Human development and social inclusion; (iv) Comprehensive and sustained regional development; and (v) Sustainable development. The project will be serving all the 5 priority axes listed above but particularly, axes (i) and (iv).

C. PROJECT DESCRIPTION

13. Project Objective

The objective of this project is to enhance efficiency and effectiveness in the implementation of the GoT’s Strategic Development Plan 2016-2020 (SDP) and future structural reforms and policies by strengthening its capacity in statistics, impact assessment, monitoring and evaluation. Notably, the project presents a perfect opportunity to support Tunisia’s efforts to achieve its economic transition and structural transformation. In particular, the objectives and activities planned under this project makes it a suitable candidate for financing by the MENA Transition Fund given the Fund’s objective of assisting countries in transition to develop inclusive growth and foster home-grown reforms.

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In particular, the project will support the delivery of sustainable and inclusive growth by serving three key areas: (1) support to the design and implementation of macroeconomic and structural policies; (2) support to inclusive regional development through improved regional statistics and monitoring and evaluation; and (3) support to Tunisia’s open data agenda through the design and installation of a new statistical dissemination infrastructure.

14. Project Components

The project will be executed over a period of 62 months, and will comprise four components: (1) Support to the design and implementation of macro-economic and structural policies and reforms; (2) Support to inclusive regional development through improved regional statistics and M&E capacity; (3) Support to Tunisia’s open data agenda through a new statistical dissemination infrastructure; and (4) Project management and audit. The main aim is to support the GoT’s efforts to achieve accelerated and inclusive growth through more efficient planning, design, execution, and monitoring and evaluation capacity of projects and reforms.

Component 1: Support for the implementation of macro-economic and structural policies and reforms

The GoT faces many challenges, but also a unique opportunity to implement ambitious reforms, from which the benefits could be immense. The Ministry of Development, Investment and International Cooperation (MDICI) is at the forefront of these efforts and has initiated numerous activities to this end, notably by taking the leadership in preparing the SDP. Planning, designing, implementing and monitoring reforms and projects under the 5-year SDP and beyond will require clear and well-defined outcome and policy indicators, as well as capacity to assess the impact of these reforms and projects. Component 1 addresses these needs through two sub-components.

Sub-component 1.A: Benchmarking Tunisia’s economic performance and policies ( activities executed by the OECD)

Benchmarking Tunisia’s economic performance and policies against OECD countries and key emerging economies will serve to better design policies and structural reforms, and to monitor progress in policy implementation and outcomes. An in-depth policy analysis based on well-tested OECD methodologies will allow Tunisia to learn from the experience of other countries, to build expertise at the government level and to enrich the policy dialogue with key stakeholders.

Activity 1.A.1: Informing economic policy design through the development of internationally comparable indicators and economic projections

Good comparative data and information are key to the development of sound economic and policy analysis, the formulation of reforms, and assessment of progress in outcomes and in reform implementation. To assist the GoT in building capacity in this respect, the OECD will:

Build various structural policy indicators in the context of the OECD Going for Growth model and support Tunisia’s participation in this exercise alongside OECD and emerging economies. This exercise will cover a wide range of policy areas including competition and product market regulation (PMR) and employment policy legislation, taxation, innovation, education, financial markets, sustainable development, social safety nets, health care and public spending. The ultimate output of this activity would be Tunisia’s participation in the 2017 and 2018 OECD Going for Growth assessment. This would allow Tunisia to better assess and benchmark its economic performance and to identify key structural policy reforms. The OECD will also aim to build capacity within the GoT to update and maintain such indicators in the future by sharing and providing training on the methodology underlying the relevant indications.

Draw economic projections for Tunisia twice a year, in the context of the OECD Economic Outlook and its longer-term scenario. This exercise will integrate Tunisia into a forecasting framework along

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with OECD and key emerging economies. In particular, Economic Outlook projections will reflect the situation in OECD partner through trade and financial linkages, as well as overall global prospects. Before their publication, the projections are discussed twice a year in Paris among representatives of OECD and emerging markets. The project will support Tunisia’s participation in the OECD Economic Outlook starting in 2016.

Activity 1.A.2: Improving design and impact assessment of structural economic reforms

The augmented set of indicators will allow benchmarking Tunisia with OECD countries and emerging economies to better assess scope for progress, inform on relevant policy experience, and help prioritize reforms in the context of the SDP. To this end, the OECD will rely on the accumulated knowledge and experience sharing of the OECD Economic Policy Committee and other OECD bodies to:

Benchmark Tunisia’s policies with OECD countries and key emerging economies to help the GoT assess the impact of reforms and to prioritise them. Based on a broad set of structural indicators and by benchmarking Tunisia’s economic policies against those of OECD countries and key emerging economies, the OECD will help the GoT’s identify priorities for policy reforms. It will also assess the impact of various structural policy reforms on growth and other dimensions of well-being in particular inequality and the environment.

Provide an in-depth analysis of areas in which the country needs and wants to undertake reforms to develop specific, robust and evidence-based policy recommendations. The ultimate output of this activity would be an economic report of Tunisia. The report will provide an in-depth analytical assessment with an overview macroeconomic chapter and generally two structural policy chapters on topics important for growth and well-being to be chosen by the OECD in consultation with the GoT. The report will focus on policies having a potential to improve the economy’s long-run performance. The report also places a special emphasis on links between structural policies in these areas and macroeconomic performance.

Activity 1.A.3: Building local capacity and fostering policy dialogue

An integral part of the support to Tunisia is to build local capacity to ensure that indicators and the associated analysis can be maintained and upgraded, are well understood by key players and are fully integrated in the policy reform process. To this end, the OECD will:

Share its experience in assessing economic developments, maintaining indicators and measuring the impact of structural reforms. Building and maintaining indicators will be done in close cooperation with the Tunisian authorities and other key stakeholders to assess legislation and outcomes. The methodologies followed to develop the different indicators will be shared with the government. Secondment programmes with Tunisia’s government will also be used to expose the Tunisian authorities to OECD benchmarking exercises and further encourage knowledge transfer. In addition, the OECD will organise a workshop in Tunis on the impact of structural reforms based on the empirical work carried out by the Secretariat and the experience of countries shared in its Committees.

Promote the sharing of views and knowledge between Tunisia’s government, OECD countries and other emerging economies. The exchange of policy experience and peer learning are key objectives of the OECD. Tunisia is already a member of the OECD Development Centre. In addition, under the project, Tunisia is encouraged to apply to participate in additional OECD committees. Tunisia’s participation in meetings of the OECD Committees is subject to the OECD rules. Its participation as invitee is free, and the budget planned for the project includes travel for Tunisian participants in Paris.

Foster policy dialogue with key stakeholders. The preparation and publication of the in-depth policy analysis (Economic Report) will offer a unique opportunity to enrich the policy dialogue both within Tunisia and with its main partners. To prepare the in-depth policy analysis, the OECD will meet the government, trade unions, private sector representatives, and other representatives from the civil society to gather views and information. The OECD will present its preliminary conclusions to high-level government representatives and adjust them to incorporate comments and views. The draft will be discussed in an OECD workshop, with Tunisia and OECD countries’ representatives, as an opportunity to foster policy dialogue between Tunisia and key partners. When the in-depth policy analysis will be

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published, the OECD will co-organise an event with the Tunisian government to present the key conclusions. A series of workshops and seminars will also be organised with representatives of civil society and academia.

Additional activities under sub-component 1.A “Benchmarking Tunisia’s economic performance and policies” carried out during project extension (executed by the OECD).

The OECD has been supporting the Tunisian government in the design and implementation of macro-economic and structural policies and reforms since mid-2016. After several months of close collaboration with the Tunisian authorities the OECD produced and launched the first Economic Assessment of Tunisia together with H.E. Zied Laâdhari, Minister of Development, Investment and International of Tunisia on 20 March 2018. The report assessed the country's economic situation and drew specific proposals for reforms to boost growth and make it more equitable. In addition, the report analyses in particular policies to boost quality jobs and stimulate investment in order to improve growth and competitiveness of the Tunisian economy. The Tunisian Authorities praised the report and its recommendations, and mentioned that the OCDE support comes at an important political juncture for the country, and highlight the critical importance to continue this work. In parallel to the launch the OECD delegation also met with Mr. Youssef Chahed, Prime Minister of Tunisia, and Mr.  Marouane El Abassi, Governor of the Central Bank of Tunisia, whom welcomed OECD’s work and expressed their appreciation for the strong and growing co-operation between Tunisia and the OECD.

In this context, the OECD will support Tunisia in continuing its reform efforts through a new set of activities. These activities will build on the results of sub-component 1A and be executed over a period of 24 months. Important technical support and knowledge transfer will be provided to the Tunisian authorities to identify key priorities and examining the country’s economic performance.

Activity 1.A.1: Enhancing economic policy design through the development of internationally comparable indicators and economic projections.

Draw economic projections for Tunisia twice a year, in the context of the OECD Economic Outlook and its longer-term scenario. This exercise will continue to integrate Tunisia into a forecasting framework along with OECD and key emerging economies. In particular, Economic Outlook projections reflect the situation in OECD countries partner through trade and financial linkages, as well as overall global prospects. Before their publication, the projections are discussed twice a year in Paris among representatives of OECD and emerging markets. The OECD will continue to follow economic developments and produce economic projections.

Activity 1.A.2: Improving design and impact assessment of structural economic reforms

Building on the results of the 2018 OECD’s Economic Assessment of Tunisia, the OECD will continue to support the GoT to improve the design of structural economic reforms. The OECD will rely on the accumulated knowledge and experience sharing of the OECD Economic Policy Committee and other OECD bodies.

Continue to provide an in-depth analysis of areas in which the country needs and wants to undertake reforms to develop specific, robust and evidence-based policy recommendations. The ultimate output of this activity would be to deliver the second Economic Assessment of Tunisia that will provide an in-depth analytical assessment and will focus on policies having a potential to improve the economy’s long-run performance. The Assessment also places a special emphasis on links between structural policies and macroeconomic performance.

Activity 1.A.3: Building local capacity and fostering policy dialogue

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An integral part of the support to Tunisia is to build local capacity to ensure that indicators and the associated analysis can be maintained and upgraded, are well understood by key players and are fully integrated in the policy reform process. To this end, the OECD will:

Share its experience in assessing economic developments. Maintaining indicators will be done in close cooperation with the Tunisian authorities and other key stakeholders to assess legislation and outcomes. The methodologies used in the OECD to assess the country’s strength and challenges in fiscal, monetary and structural policies will be shared with the government.

Secondment programme with Tunisia’s government will be used to further encourage knowledge transfer.

Promote the sharing of views and knowledge between Tunisia’s government, OECD member countries and other emerging economies. The exchange of policy experience and peer learning are key objectives of the OECD. Under the project, Tunisia is encouraged to apply to participate in additional OECD committees. Tunisia’s participation in meetings of the OECD Committees is subject to the OECD rules. Its participation as invitee is free, and the budget planned for the project includes travel for Tunisian participants in Paris.

Foster policy dialogue with key stakeholders. The preparation and publication of the in-depth policy analysis (Economic Assessment) will offer a unique opportunity to enrich the policy dialogue both within Tunisia and with its main partners. To prepare the Economic Assessment, the OECD will meet the government, trade unions, private sector representatives, and other representatives from the civil society to gather views and information. The OECD will present its preliminary conclusions to high-level government representatives and finalise them taking into consideration comments and views. The draft will be discussed in an OECD meeting, with Tunisia and OECD countries’ representatives, as an opportunity to foster policy dialogue between Tunisia and key partners. When the in-depth policy analysis is published, the OECD will co-organise an event with the Tunisian government to present the key conclusions. A seminar will also be organised with representatives of civil society and academia.

Sub-component 1.B- Enhancing MDICI forecasting, planning and monitoring capacities (Activities executed by the GoT)

This sub-component aims at strengthening the capacity of the MDICI in planning, designing and implementing reforms under the 2016-2020 SDP and beyond. Specifically the component will seek to: (i) Enhance the GoT’s forecasting and implementation capacity of macroeconomic policies, (ii) Improve Quantitative Impact assessment of structural reforms, and (iii) Develop dashboards that would ensure more effective monitoring of Tunisia’s economic performance.

Activity 1.B.1: Enhance forecasting and implementation capacity of macroeconomic policies

The MDICI has a long experience and proved competency in planning, forecasting and implementing macroeconomic policies. Enhancing these capacities is key for the development of growth patterns including, among others, planning of public funding needs, public investment and for maintaining macroeconomic balances. A macro econometric model has been implemented with the support of the European Union and AfDB. The MIDCI (department of forecasting namely Direction Générale des Previsions (DGP) and the Institut Tunisien de la Compétitivité et des Etudes Quantitatives (ITCEQ)) are seeking to develop other useful tools to complement this model. This includes a Model using a Dynamic Stochastic General Equilibrium (DSGE) approach in order to forecast and assess the impact of fiscal and monetary policies. International institutions, central banks and governments currently use such approach in order to assess budget scenarios and the GoT is keen to adopt such best practice. In addition, the DGP and ITCEQ would like to introduce intra annual forecasting techniques to improve the short-term forecasting performance. These approaches are extremely useful to monitor the economic condition at the 2 nd

quarter perspective. The project will be supporting the introduction of these new forecasting techniques. Therefore, this activity will:

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Develop a DSGE model and a dynamic factor model to forecast and analyze Tunisia’s macroeconomic performance. These models will build on international best practices while being adapted to the Tunisian economy context,

Build the capacity of ITCEQ, DGP and other relevant ministerial staff to use, maintain and update the above requested developed models. This will be done through organization of 4 training sessions on (1) advanced macroeconomics, (2) programming on the software used to develop the model (3) modelling and simulation, (4) how to use models’ outputs to prepare policy briefs. At least 10 staff from DGP and ITCEQ will benefit from this training.

Activity 1.B.2: Improve Quantitative Impact assessment of structural reforms

The objective of this activity is to develop a series of monitoring tools to quantify the expected ex-ante impact of reforms to be undertaken by the GoT. The models will be developed in close cooperation with ITCEQ and DGP to enhance effectiveness of the GoT’s impact assessment capacity. More specifically, the models should be adapted to fiscal policy (CGE model), social security reforms (overlapping generations model), trade integration (multi-country CGE model) and impact assessment of reforms aiming to achieve Sustainable Development Goals (SDGs) (econometric and CGE models). Therefore, this activity will:

Develop a CGE model that delivers medium term scenarios of macroeconomic performance and quantitative assessment of the impact of envisaged reforms. The model include a user-friendly interface that would allow simple use by policy makers.

Develop an overlapping generation model that measures the quantitative impact of social security and retirement reforms.

Adapt and upgrade an existing multi-country CGE model by adding the features of the Tunisian economy in order to quantitatively simulate and assess the impact of commercial reforms.

Perform a diagnostic that will identify reforms needed for Tunisia to meet the Sustainable Development Goals (SDGs) and build a CGE model that will assess coherence between these reforms and quantify their joint feasibility and effect.

Build the capacity of ITCEQ, DGP and other relevant ministerial staff to use, maintain and update the above requested models. This will be done through organization of 4 training sessions on (1) simulations using CGE, (2) econometric techniques, (3) programming on the software used to develop the model, (4) how to use models’ outputs to prepare policy briefs. At least 15 staff from DGP and ITCEQ will benefit from this training.

Activity 1.B.3: Development of Dashboard

The objective of this activity is to develop a dashboard to track key indicators that are important for the implementation of the 5-year plan as well as economic conditions (economic and competitiveness, environment for sustainability, social). The dashboard will also be used to set up and monitor indicators against thresholds that will trigger corrective actions. Specifically, this activity will:

Define the indicators to be tracked and methodology, protocol to feed the dashboard,

Develop a user friendly interface,

Calibrate and test the system and running simulations.

Component 2: Support to inclusive regional development through improved regional statistics and M&E

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capacity

The new constitution adopted in 2014 places regional development at the centre of the government’s priorities, and gives local authorities a key role in economic and social planning and development. Five years after the revolution, regional disparities remain very large. The SDP 2016-2020 seeks to reduce permanently these differences. This component will have 2 pillars to be executed respectively by the OECD and the GoT. The AfDB will ensure oversight of the activities that are executed by the GoT.

Sub-component 2.A: Support the GoT in developing a system of internationally comparable indicators at the sub- national level ( activities executed by the OECD)

This sub-component will be implemented by the OECD as ISA, in consultation with the Government of Tunisia. Its overall objective is to improve the implementation, monitoring and evaluation of regional development and social policies in Tunisia through a strengthened governance of regional statistics. It covers only activities that are not supported by the twinning project funded by the European Union for the period 2016-2017 to the benefit of the INS (which is under the purview of the MDICI-see Annex 3) and leverages the achievements of 2 ongoing projects funded by the EU on regional statistics, including the restructuring of regional INS offices. 4 The sub-component will also support the activities of related MDICI institutions, namely the DGDR (Direction Générale du Développement Régional)5; ODS (Office de Développement du Sud); ODNO (Office de Développement du Nord Ouest); ODCO (Office de Développement du centre Ouest) Commissariat Général au Développement Régional (CGDR); Institute National de la Statistique (INS); CNS (Conseil National des Statistiques). Collaboration with Ministries in charge of administrative data relevant for regional statistics (for example, Ministry of Finance, Ministry of Social Affairs, Ministry for the Employment), will be sought concerning the identification, design and use of regional statistical information. All activities are inter-linked and contribute to building an improved knowledge base for the public and private sectors, as well as the civil society in Tunisia.

The sub-component will benefit from the accumulated knowledge and experience sharing of the OECD Working Party on Territorial Indicators (WPTI). The availability of accurate regional statistics would also allow Tunisian data to be compared with peer countries (including, for instance, through Tunisia’s participation in the OECD flagship publication Regions at a Glance), which would enable the GoT to participate more actively into international fora, such as the OECD Regional Development Policy Committee (RDPC), subject to the applicable OECD rules.

The work will offer a diagnosis of the legal and regulatory frameworks, data gaps in the context of a reformed multi-level governance system, as well as capacity needs at the national and the sub-national level to carry out new functions in the production and use of regional statistics.

Specific activities envisaged under this sub-component include:

Diagnosis of the current governance system of territorial statistics and identification of the information needs for the design and implementation of regional development policies. This action aims at strengthening the dialogue and exchange of information between producers and users of regional statistics, identify possible obstacles for a good governance of regional statistics, identify the priority sectors where administrative data sources can be exploited for regional statistics, and build capacity within ministries to transform the administrative information into statistics.

Compare the regional typology of Tunisia with the OECD typology for different levels with the aim of better understanding economic and social realities in urban and rural areas and increasing international comparability of Tunisian statistics. This work will use existing information and covers the use of alternative sources of data, including geographic information systems (GIS) and administrative data, to complement traditional sources – censuses and surveys – in the identification of geographical units

4 The Technical Assitance was extended under the Programme for the Support of the Association Agreement and the Transition "P3AT" (Programme d’Appui à l’Accord d’Association et à la Transition « P3AT »). Annex 3 provides a brief summary of this project.5 The DGDR coordinates the work of the Offices of Development which produce the publications “governorates in numbers.”

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and monitoring global and national development objectives at different regional scales.

Knowledge transfer on government statistics compiled under the international methodology of national accounts. This work will include non-financial accounts and financial accounts and balance sheets for the general government sector and sub-sectors (central government, local governments and social security). It will also help assess the methods to produce data on regional and local government budgets (expenditure, revenue, tax revenue) to better understand spending needs and charges.

Three final outputs foreseen for this sub-component could be summarized as follows:

First, one workshop organized and facilitated by the OECD to support the sustainability of the Tunisian regional indicators production over time. During the workshop, international experiences will be presented to foster knowledge transfer. Participants will include national civil servants and staff from statistical offices. Local and regional authorities could be invited to participate.

Second a document that summarizes the results of the diagnosis of the governance of statistics for regional development; this document will be peer reviewed by the OECD Working Party on Territorial Indicators and discussed in the MENA OECD Governance Programme.

The third output of this activity would be Tunisia’s participation in the 2018 OECD Regions at a Glance publication. First published in 2007, this bi-annual report provides an overview of regional contributions to national prosperity and well-being in OECD countries and emerging economies from a comparative perspective, which enables countries to assess regional disparities and progress made by lagging-behind regions.

Additional activities to be carried out during the project extension

The activities realised during the project showcased the need for Tunisia to put in place a more efficient regional statistics system and further alignment with international standards. The classification of Tunisian small regions (i.e. gouvernorats) according to their urban or rural characteristics through the OECD methodologies provided key elements for the adoption of place-based strategies. Further efforts need to be done at the more detailed geographical level to analyse the performance of Tunisian cities and their contribution to regional development.

Tunisia faces several challenges in terms of production of territorial statistics, which represents an obstacle for evidence-based regional development policy. This is particularly important for indicators aimed at measuring economic activities, which need to be developed to support regional development, in the context of the decentralization reform and given large socio-economic regional disparities.

Specific additional activities envisaged under this sub-component will offer a stronger dissemination of the results of the work already carried out and summarised in a report on Improving regional statistics for an inclusive and sustainable territorial development in Tunisia, as well as better information on cities and urban agglomerations in Tunisia, which would help identify local priorities for public policy and investment, and guide policy responses.

The following specific additional activities are envisaged:

1. Expanding and strengthening the evidence on regional economic development by providing new definitions of metropolitan areas and urban agglomerations, together with visualisation tools that enable monitoring the economic development of cities of all sizes. This activity will make it possible for national and subnational policy makers to use timely and robust regional and urban statistics relevant for policies and decision-making and develop some indicators that support mobility and housing policies. In particular, the OECD proposes to pursue a novel definition of Tunisian cities that better takes into account their economic realities ( functional urban areas). Producing indicators for functional urban areas will enable Tunisian policy makers to better address key policy areas such as access to infrastructure and services, land use for urban planning, and economic development between different territories within the same functional urban area and across them. Furthermore, statistics of Tunisian cities will be integrated into a database of OECD cities, which will facilitate a comparative analysis, and will be accessible via a visualisation tool.

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2. Improving coordination among the different levels of government involved in the production of territorial statistics and building a consensus on the specific challenges in improving territorial statistics and their use in regional development policy through the dissemination of the key results of the project. This activity aims at fostering coordination and establishing agreement on the importance of territorial statistics through the exchange of information both at the national and local levels. Creating a consensus and a common understanding around territorial statistics and promoting the demand for regional statistical information is crucial for developing evidence-based policy making. It will support the current efforts to match resources with competences in the context of the current decentralisation reform in Tunisia.

Three final outputs of the project extension could be summarised as follows:

1. Organisation of one workshop in Tunis or, preferably, in a statistical office in a province to raise awareness on the specific challenges that Tunisia faces in improving territorial information to design regional development policy. The aim is to disseminate the results of the realised project and to share the recommendations with all the stakeholders involved in implementing regional reforms (ministries, municipal and regional councils). The focus will be placed on the need for collecting qualitative information, introducing mechanisms that ensure accountability of the different actors, and identifying the role of each actor to help build a clear and effective governance of territorial statistics with respect to the needs of all types of territories in Tunisia.

2. Implementing a new, functional definition of cities in Tunisia and, subsequently, measuring their characteristics and performance. Based on a novel OECD methodology to estimate functional urban areas without commuting zone data, the OECD will identify Tunisian cities according to their economic extent. Results will be either integrated in the expected final OECD report or communicated in a separate OECD document, after consultation with the stakeholders on their preferences. The classification of Tunisian territories showed that 41% of the Tunisian population lives in predominantly urban regions, with a majority of them residing in the country’s largest cities. The urban centers in Tunisia are experiencing rapid population growth and account for large parts of the Tunisian economy. At the same time, those urban areas can stimulate growth in neighboring rural areas through stronger linkages. It is therefore crucial to have indicators at a more detailed geographical scale, that of urban agglomerations or functional urban areas (FUAs), in order to measure the contribution of Tunisian cities to the country’s development. This will make it possible to compare the performance of cities in a number of domains and to identify priorities in terms of investment and policies across Tunisian cities. The proposed work will help monitoring several aspects of urban agglomerations, such as (i) air quality; (ii) land consumption; (iii) spatial organisation; and (iv) accessibility to services and infrastructure etc. It will be conducted with INS, ensuring the transfer of statistical knowledge and practices to representatives of the National Statistical System. The results of the measurement of urban agglomerations will be shared through a workshop with the participation of peers in Tunis or another city.

3. Facilitating the comparability of Tunisian territories with OECD countries . The implementation of a consistent definition of functional urban areas will allow a more robust international comparison and analysis of Tunisian cities. The statistics that will be compiled for Tunisian cities will be included in the OECD metropolitan database, which will give Tunisian policy makers direct access to benchmarking exercises of their cities’ characteristics and development with cities in OECD countries.

Sub-component 2.B: Enhance effectiveness of Tunisia’s regional development policies through strengthened M&E capacity and improved indicators (activities executed by the GoT)

This sub-component will be executed by the GoT. The African Development Bank will act as ISA and ensure oversight of planned activities. Its main objective is to enhance the efficiency and effectiveness of

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regional development policies by (i) reviewing historical regional development policies to identify gaps and weaknesses, (ii) building indicators that measure the attractiveness of regions with the goal to identify areas for interventions and priorities, and (iii) strengthening the GoT’s capacity in monitoring and evaluating the impact of regional development policies.

Activity 2.B.1: Strengthen the GoT’s capacity to monitor and evaluate regional development policies

Under this activity, he project will strengthen MDICI's ability to implement, monitor and evaluate regional development policies by (i) providing an assessment of the effectiveness of previous regional development policies (before the revolution); (ii) building a monitoring and evaluation system for regional development policies using a participatory approach; and (iii) strengthening capacity in terms of monitoring and evaluation of regional development policies. The outcomes of this activity are:

Produce a diagnostic assessment of historical regional development policies to identify best practices and weaknesses that need to be addressed. The output will be a diagnostic report of regional development policies shared through a dissemination seminar.

Develop a monitoring and evaluation system of regional development policies involving civil society. The tool will serve as a decision making tool at the service of the structures responsible for promoting regional development, including those under the purview of the MDICI (CGDR, ODNO, and ODCO ODS). This monitoring and evaluation system will also serve as a monitoring tool for the implementation of public projects in regions included in the 2016-2020 SDP as well as its evaluation and adjustment.

Strengthen the capacity of MDICI and sectoral ministries in terms of monitoring and evaluation of regional development policies through training sessions and / or study visits in other countries for best practice sharing. At least 3 training sessions will be organized to train 20 government staff from MDCI and 9 other key sectorial ministries (equipment, agriculture, education, health, transport, women and family, local affairs, etc.) as well as key agencies such as the National institute of Statistics. A study tour will also be organized for 3 staff from DGDR (at MDCI) for best practice sharing.

Activity 2.B.2: Development of regional attractiveness indicators

This activity is fully aligned with the objective of promoting the attractiveness of regions that the GoT is emphasizing in its regional development policy. Actions envisaged entail the development of indicators measuring the attractiveness of Tunisia’s different regions on different dimensions (i.e. economic, social, etc.), in terms of public and private investment, public services, social and community facilities, infrastructure, etc. Such indicators will allow the GoT to identify gaps and regions that have disadvantages to attract domestic and foreign investment. These indicators will inform reform efforts and design of regional development policies and projects to achieve inclusive economic growth, and accelerate jobs creation.

Component 3: Support Tunisia’s open data agenda through a new statistical dissemination infrastructure (OECD-executed)

This component will support the development of a sustainable and robust statistical dissemination infrastructure to provide relevant and timely data to monitor progress of Tunisia’s economic situation and policies through relevant indicators, and data enriched policy dialogue with civil society and key partners.

In this context, the INS is expected to adopt .Stat as the underpinning component of the statistical dissemination infrastructure. To facilitate for this, INS, subject to the signature of a memorandum of understanding with the OECD, would become a member of the Statistical Information System Collaboration Community (SIS-CC).

The work will start with a scoping exercise with the goal of identifying the current infrastructure and technical capabilities of INS, and statistical processes underpinning data dissemination. This initial work would lead to an

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output called ‘blueprint for statistical dissemination at INS’ composed of following parts:

o Assessment of INS data dissemination processes and definition of the 2 year target

o Assessment of INS data product portfolio and definition of the 2 year target

o Assessment of INS ICT Infrastructure and definition of the 2 year target

o Delivery of a prototype of the future INS data dissemination platform based on available data, and on a prototype instance of INS.Stat temporarily hosted at OECD.

o Detailed identification of the 2 year target, action plan and refined resource requirement to reach it.

Communication will be extremely important during that phase with all stakeholders at INS (statisticians, communication and technical staff). Workshops will need to be facilitated to build capacity and develop a common understanding, both in Tunis and in Paris.

Following the blueprint, several phases and outputs are envisaged, subject to confirmation after blueprint assessment:

.Stat product adaptation based on the INS context and needs; at minimum the development of specific feature to support the Arabic language, and right to left display of text will entail product adaptation. The work effort to achieve this is expected to be between 5-6 months.

.Stat platform installation and integration in INS IT environment: Cloud implementation could be envisaged.

Capacity building of INS statistical, communication and technical staff.

Stat maintenance and support: The same contribution as the one requested from all other organisations using .Stat for dissemination today will enable OECD team to support the INS team on a regular basis and also fund SIS-CC coordination work.

OECD expects the ‘Go live’ of INS.Stat to happen somewhere between 9 to 16 months after start of the project, so as to ensure several iteration before end of the project for INS to be fully in capacity to continue to innovate on the platform in a more autonomous manner.

Additional activities under component 3: Preserving the project benefits by extending the technical assistance to INS over the Dec 19-Nov 21 time period

Continuing to support INS Tunisia is essential in the process of fully streamlining the data operations and how statistics from all the different branches of the Tunisian government and regional agencies are integrated in one single source of authority.

As of current agreement, under ‘Stat maintenance and support’, INS will benefit from OECD support up until Nov 2019, covering items listed above:

Beyond that date, and unless a new agreement comes into force, INS will no longer be supported. The proposed extension proposed consist in

Extending by two more years the .Stat maintenance and support provided by OECD to INS; Funding missions (approximately 10 per year on a Paris-Tunis basis) by INS and OECD experts to

continue to include INS staff in the .Stat open source community activities and further build capacity;

Support INS in setting up a dashboard to monitor technical quality and usage – this work will essentially consists in transposing the approach at OECD in the INS context.

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Component 4: Project Management and audit (activities executed by the GoT)

A Project Manager will be recruited by the GoT under the overall oversight of AfDB as ISA and tasked with providing advisory services and implementation support. The following deliverables are expected from the Project Manager: (i) prepare ToRs for the recruitment of the different consultants that will deliver the goods and services sought under this project; (ii) facilitate coordination between the different entities and departments within MDICI that are covered by this project (DGP, ITCEQ, DGDR and INS, etc.), but also coordination with the relevant line ministries and stakeholders; (iii) ensure end-to-end coherence of project activities from institutional/policy work to actual delivery of the overall project; (iv) organize the dialogue within the donor coordination unit; and (v) organize workshops, seminars and training sessions to the projects’ beneficiaries.

An external auditor should also be recruited to perform the audit of the use of the funds allocated to the GoT-executed portion of the project at mid-term (18 months) and at project closing, based on project financial statements prepared by ITCEQ. The 2 audits must be performed according to AfDB standard terms of reference for review of grants and trust funds. The OECD-executed portions of the project shall not be concerned by this provision.

15. Key Indicators Linked to Objectives

Activities supported by this project should foster the delivery of accelerated, sustainable and inclusive growth by enhancing the efficiency of the implementation of the 2016-2020 SDP, and Tunisia’s future structural reforms and policies. By strengthening capacity in policy and reform design, monitoring and evaluation, the project will provide the GoT with clear information about the expected outcomes and impact of projects and structural reforms and policies envisaged in its development programme. It will also allow the GoT to compare its performance to relevant peers, assess the impact of its actions and put in place an effective monitoring system of the Tunisian economy’s performance in terms of economic growth, wellbeing, competitiveness and sustainability.

The key results indicators for the project include:

Government bodies and institutions supported (indicator linked to MENA TF pillar output indicator 3.1.2);

Documents produced (studies, assessments, reports, etc.) (indicator linked to MENA TF pillar output indicator 5.1.1) Contribute to enhance economic governance in line with the SDP 2016-2020.

Support the GoT to improve the country’s trade and investment climate and to support job creation, based on the recommendations of the 2018 OECD Economic Assessment of Tunisia.

Produce a new economic assessment.Help the government to design, prioritize and implement reforms.

Produce bi-annual economic forecasts Strengthen capacities and skills of government officials.

The project’s Results Framework in Section F of this proposal provides a full description of the project’s indicators and targets.

D. IMPLEMENTATION

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16. Partnership Arrangements (if applicable)

A. Tunisian Government

The GoT will ensure overall coordination among the key stakeholders of the project. It will also be responsible for the execution of activities for which AfDB will act as ISA. The Ministry of Investment, Development and International Cooperation (MIDCI) will be the recipient of the grant funding the GoT-executed activities. A Project steering committee will be created within MDICI to guide project implementation and monitor key decisions and outputs. This steering committee should include representatives from key departments and entities that will contribute and benefit from the project, such the forecasting and planning department (DGP), the regional development department (DGDR), the National institute of Statistics (INS) and the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ). From a fiduciary perspective, ITCEQ will be acting as the project’s executing agency (PIU) for the GoT-executed activities. ITCEQ is a center producing studies on economies, social and competitiveness issues that is under the purview of MDICI. It was created in 1973 and has the status of a non a-administrative public institution (établissement public à caractère non administrative). A project manager will be recruited to assist and advise the PIU and key stakeholders during the implementation of the project to ensure successful delivery of results and outcomes.

B. African Development Bank

The AfDB will contribute its experience and knowledge of support to structural reforms and project financing and implementation. Specifically, the AfDB will aim to provide operational and hands-on experience acquired during its rich experience in supporting reforms and capacity building on the continent and in Tunisia.

The AfDB will also aim to create synergies between this project and its policy based operations (i.e. budget support operations, including the 2 ongoing ones targeting financial sector reforms and regional development) and technical assistance grants in Tunisia. AfDB will be solely responsible for the oversight and management of the funds used for the GoT-executed portion of the project (components 1.B, 2B and 4).

C. OECD

The OECD will execute components 1.A, 2.A and 3 of the project as ISA. The OECD will contribute its experience and know-how in economic forecasting and monitoring, structural policies and reforms, regional development and statistics. In addition, Tunisia will be able to benefit from benchmarking and best practice sharing from OECD countries and other emerging economies as well as peer reviews and dialogue in the context of relevant OECD committees and bodies (e.g. OECD Regional Development Policy Committee).

D. Other stakeholders (e.g. civil society, donors)

The project will build on the on-going consultation process regarding the preparation of the SDP 2016-2020. In addition, coordination with development partners active in the areas covered by this proposal (i.e. economic planning, general government capacity building, regional development, and statistics) will be ensured regularly to create further synergies. In addition, MDICI, as the government’s focal point and interlocutor for development partners, will ensure that coordination is handled effectively. The OECD/AfDB team will also ensure regular and routine coordination during implementation to enhance project impact.

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17. Coordination with Country-led Mechanism/Donor Implemented Activities

Several donors have been and still are supporting ongoing and planned GoT’s reform efforts. Between 2011 and 2015, the AfDB alone provided 3 budget support loans to the tune of 1.3 billion and 2 of these operations were jointly executed with other development partners, namely the World Bank and the European Union. Similarly, all 3 institutions have budget support operations planned for 2016. Overall, the policy matrices of these operations include reforms aimed at (i) enhancing macroeconomic stabilization, (ii) improve the business environment, (iii) reduce regional disparities (iv) create income and job opportunities , and improve (v) governance and accountability. Hence, the activities planned under this project would be complementary to streams (i), (iii) and (v) of the work programme of these development partners. For instance, AfDB’s 2016 policy-based operation on regional development includes reform measures to enhance capacity and public investment in regions which will serve the project’s purpose and vice versa .

In addition, several donors such as UNDP are providing assistance for the actual preparation and drafting of the 5-year plan while others such as AfDB, GIZ and JICA have produced analytical work on regional development issues that would inform the regional development plans that Tunisia will develop and implement in the years to come. The GoT is also planning an international conference to present the 5-year plan during fall 2016, which will be attended by both private investors and donors (AfDB, EIB, EBRD, IsDB, etc.). The latter will most likely be contributing to financing projects under this plan. By providing the necessary capacity to GoT to execute and monitor the 5-year plan and associated reforms, this project will support and facilitate the engagement of donors during the implementation of the plan.

18. Institutional and Implementation Arrangements

The project will be funded by the MENA transition Fund and the GoT, whose contribution will be in kind in the form of staff time, facilities, offices and equipment used and other services. AfDB and the OECD will receive from the MENA transition Fund the part of the grant resources that would allow each one of them to cover the direct cost of activities for which it acts as ISA as well as its share of the grant indirect cost. Each ISA will be using its own rules and procedures to execute and disburse these resources. The OECD’s components will be fully ISA-executed while the components for which AfDB acts as ISA will be executed by the GoT. The first and the second components will have an ISA-executed part and a country-executed part. The third component is fully ISA-executed by the OECD while the fourth component is GoT executed under the oversight of the AfDB as ISA.

A steering committee involving will be created at the level of MDICI to provide guidance/recommendations on the project’s progress, key decisions and outputs. This steering committee should be chaired by a senior staff from MDCI (as the latter has ultimate responsibility for executing the 5-year plan) and include representatives from key departments and entities that will contribute and benefit from the project, such as DGP, DGDR, INS and ITCEQ. The steering committee will have a launching workshop at project inception to agree on the set and timing of key milestones as well as distribution of roles and responsibilities among all stakeholders. For activities executed by the GoT, ITCEQ will be acting as the executing agency. A project manager will be hired to provide support to the execution agency while an external auditor will be hired to perform the audit of the project at mid-term and at end of the project. The project manager must also support the steering committee to prepare quarterly reports that will be submitted to the GoTs / MDICI Minister as well as implementing agencies. In order to ensure speedy recruitment of the project manager, the latter will be recruited as an Individual consultant (to be financed under the GoT-executed sub-components) and procured following comparison of qualification of at least three (03) candidates. Qualification comparison will be done based on information on their Curriculum vitae.

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19. Monitoring and Evaluation of Results

The monitoring and evaluation of the Project and its expected results will be coordinated by the Ministry of Development, Investment and International Cooperation (MDICI), ITCEQ and the Project Manager recruited under Component 4. MDICI shall regularly report against the targets indicated in the results framework of the Project. Quarterly monitoring and progress reports will be prepared and submitted to AfDB and the OECD. The Project Manager will ensure close coordination among key stakeholders and provide timely support to the executing agency as required.

AfDB will also perform annual supervision missions covering GoT executed activities to document progress and identify challenges that would need corrective actions. Regular meetings will be also organized between the 2 ISAs to ensure full coordination. Such approach has been used for another MENA-TF project (i.e. operationalization of PPP) and proved very useful. Also, a mid-term review will be carried out to assess progress and to draw lessons from the Project and provide an opportunity to adjust activities to ensure that the Project meets its objectives. A final report will be prepared at the end of the Project.

E. PROJECT BUDGETING AND FINANCING

20. Project Financing (including ISA Direct Costs6), Estimated budgetCost by Component Transition Fund (USD) Country Co-

Financing (USD)

Total

(USD)

Original Amount Additional Financing Amount

Component 1:

(a) Sub-component 1.A: (OECD executed)Activity 1.A.1Activity 1.A.2Activity 1.A.3

Additional ActivitiesActivity 1.A.1Activity 1.A.2Activity 1.A.3

(b) Sub-component 1.B: (AfDB executed)Activity 1.B.1Activity 1.B.2Activity 1.A.3

1,773,985.00

953,985

251,665421,572280,748

820,000

200,000300,000320,000

451,634.00

451,634.00

150,545150,545150,545

110,000

110,000

25,00035,00050,000

2,335,619

953,985

451,634

930,000

6 ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.

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Component 2:

(a) Sub-component 2.A: (OECD executed)

Additional Activities

(b) Sub-component 2.B: (AfDB executed)Activity 2.B.1Activity 2.B.2

1,052,160.00

352,160

700,000

500,000200,000

128,837.500

128,837.50

66,000

0

0

66,000

33,00033,000

1,246,997.5

352,160

128,837.50

766,000

Component 3: (OECD executed)

Oringinal activities

Additional activities

541,872

541,872

123,215.50

0

123,215.50

0

0

665,087.50

541,872

123,215.50

Component 4: (AfDB executed)Project managementAudit

310,000

300,00010,000

55,000

55,0000

365,000

355,00010,000

Total direct Project Cost

3,678,017 703,687.00 231,000 4,612,704.00

21. Budget Breakdown of Indirect Costs Requested (USD) Description Amount (USD)

For grant preparation, administration and implementation support:

OECD indirect costs* (original)OECD indirect costs (AF)

124,25347,313.00

AfDB indirect costs (original)AfDB indirect costs (AF)

100,0000

Total Indirect Costs OriginalAF

271,566 224,25347,313.00

* Since 1 March 2005, the Organisation applies an indirect VC administration charge to all voluntary contributions accepted. A new cost recovery policy was adopted by Council in November 2009. The current base rate is 6.3% of the total amount of the contribution to which adjustments may apply.

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F. Results Framework and Monitoring

Project Development Objective (PDO): Enhance efficiency and effectiveness in the implementation of Tunisia’s 5-year Strategic Development Plan and structural reforms by strengthening the Government’s statistical, monitoring and evaluation capacity in project and reform management

PDO Level Results Indicators

Unit Baseline Cumulative Target Values Frequency

Data Source/

Methodology

Responsibility for Data Collection

Description (Indicator Definition, etc)

2016 A

2017 A

2018 F

2019 F2020 F 2021 F

PDO indicator 1: Enhanced economic growth measured (OECD)

Quantitative

Annual GDP

1% 1.9% 2.6% Bi-Annual National Institute of Statistics and DGP (MDICI)

Project Implementation Team (PIT); MDICI

Annual GDP growth rate for 2019, 2020, 2021. Growth rates for 2016 and 2017 are realised. Growth rate for 2018 is realised. Projections for the following years are not yet available.

PDO indicator 2: Reduced regional disparities

Quantitative

30 percentage points

- - 20 percentage points

Once National Institute of Statistics (INS)

Project Implementation Team (PIT)

Difference between highest and lowest regional unemployment rates

PDO indicator 3: Improved enabling environment and government capacity to implement the SDP 2016-2020 (MENA TF pillar indicator 5.1)

Qualitative Capacity gaps

- - Improved capacity

Annual Project reports capturing progress and results

Project Implementation Team (PIT)

Qualitative assessment of improved government capacity to implement the SDP effectively

PDO indicator 5: Documents produced (MENA TF pillar indicator 5.1.1)

Quantitative

0 1 7 10 Annual for OECD, once for GoT

Project reports capturing progress and results; documents produced

Project Implementation Team (PIT)

Studies, assessments, reports, action plans, roadmaps, models of good practices or frameworks designed and (if applicable) endorsed by the GoT

PDO indicator 6: Quantitativ 0 8 8 9 11 13 Annual Project Project Government bodies and

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Government bodies and institutions including local governments supported (MENA TF pillar indicator 3.1.2)

e reports capturing progress and results

Implementation Team (PIT)

institutions receiving support (target: DGP, DGDR, ITCEQ, ODS, ODNO, ODCO, CGDR, CNS, INS, MET,MFFE,MFPE,FIPA)

INTERMEDIATE RESULTS

Component 1: Support for the implementation of macro-economic and structural policies under the Strategic Development Plan and the design of future reforms and policies

Indicator 1.1: Availability of economic projections for Tunisia based on OECD methodology (OECD)

Quantitative

Economic projections not benchmarked

1 3 5 7 9 10 Semi-annually OECD Economic Outlook

PIT Development of economic projections in line with OECD standards allowing for benchmarking under the bi-annual OECD Economic Outlook.

Indicator 1.2: Availability of structural indicators and policy recommendations (OECD)

Quantitative

Tunisia not participating

1 1 (interim) 2 (interim and main report)

2 2 Annual (bi-annual main report and interim reports)

OECD Going for Growth publication

PIT Inclusion of Tunisia in the OECD Going for Growth publication, including capacity building to maintain indicators in the future

Indicator 1.3: Availability of in-depth policy analysis (Economic Report), including policy recommendations (OECD)

Quantitative

No report - 1 1 2 2 Once Tunisia Economic Report

PIT Economic Report covering macroeconomic and structural aspects and policy recommendations, followed by a workshop on structural reforms

Indicator 1.4: Capacity building through seminars in Tunisia / participation of government officials in OECD Committees (OECD)

Quantitative

None 2 5 7 7 8 Annually Project progress reports; minutes of meetings

PIT Number of seminars organised in Tunisia / Number of missions of Tunisian officials to OECD HQ

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and seminars

Indicator 1.5: Number of Tunisian officials seconded to the OECD to foster knowledge transfer (OECD)

Quantitative

None 1 2 2 3 3 Annually Project progress reports

PIT Number of secondees to the OECD( 1 official will be trained to OECD methodologies)

Indicator 1.6: Number of structural reforms and policies for which ex-ante quantitative impact assessment is performed (OECD)

Qualitative

0 2 2 4 4 Annually Project progress reports

PIT Assessment for 2020 to be carried out

Indicator 1.7: Models developed for enhanced forecasting, planning and monitoring by MDICI (AfDB)

Qualitative

0 - 3 3 Annually Project progress reports

PIT Development and operationalisation of DGSE, dynamic factor and CGE models; related training activities

Indicator 1.8: Number of Training sessions organized

Quantitative

0 - 4 7 Once Project progress reports

PIT Training related to maintenance and use of DGSE, dynamic factor and CGE models;

Component 2: Support to inclusive regional development policies through improved regional statistical capacity

Indicator 2.1: Capacity building through workshop on the production of regional indicators

Quantitative

None - 1 1 1 1 Once Project progress report; workshop report

PIT Workshop focusing on the production of regional indicators and their sustainability over time

Indicator 2.2: Diagnostic of the governance of statistics for regional development developed

Quantitative

None - 1 1 1 1 Once Diagnostic report, minutes of Working Party Meeting

PIT/OECD Diagnostic report , including targeted recommendations, to be peer reviewed by the OECD Working Party on Territorial Indicators and discussed at MENA OECD Governance Programme

Indicator 2.3: Tunisia’s benchmarking through participation in the OECD Regions at a Glance publication completed

Quantitative

None - - 1 1 2 2 Bi-Annually OECD Regions at a Glance

OECD Benchmarking of regional contributions to national prosperity and well-being through Regions at a Glance

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publicationIndicator 2.3a (project extension): Capacity building and dissemination activities through a workshop on the overall project

Quantitative

None - 0 1 1 1 Once Project progress report; workshop report

OECD Workshop focusing on dissemination of results and recommendations of the overall project

Indicator 2.3b (project extension): Adoption of a new definition of functional urban areas and development of 5 to 10 indicators for Tunisian cities.

Quantitative

None - 0 1 1 1 Once Manual OECD 5 to 10 indicators on city characteristics and performance. Manual on city definition.

Indicator 2.3c (project extension): Assessment of performance of cities and metropolitan areas in Tunisia

Quantitative

None -

0 0 1 1 Once Diagnostic report, data

OECD Report to be peer reviewed by the OECD Working Party on Territorial Indicators

Indicator 2.4: Diagnostic assessment of historical regional development policies finalised

Quantitative

None - 1 1 Once Diagnostic assessment

PIT Diagnostic assessment of regional development policies including best practices and weaknesses; dissemination seminar

Indicator 2.5: Monitoring and evaluation system of regional development policies is active

Quantitative

None - 1 1 Once Project progress reports

PIT M&E tool involving civil society will also monitor public projects implemented in the regions under SDP

Indicator 2.7: National indicators measuring regional attractiveness are available

Quantitative

None - 1 1 Annually Project progress reports

PIT Indicator set developed and published

Indicator 2.8: Number of staff of MDICI and sectoral ministries participating in capacity building on M&E of regional policies

Quantitative

None 10 20 Once Project progress reports; training reports

PIT Capacity building including trainings and / or study visits

Component 3: Support to Tunisia’s open data agenda through a new statistical dissemination infrastructure

Indicator 3.1: Statistical dissemination infrastructure installed and operational

Qualitative

None - 1 1 1 Once Project progress report on a monthly basis

PIT OECDProject completion criteria defined in the bilaterally agreed ‘Feuille de route’ (project blueprint)

Indicator 3.2.: Statistical dissemination infrastructure

Qualitative

None NA NA NA 1 1 Once Yearly PIT INS with OECD supportQualitative report on the

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operational from Dec 2019 to Nov 2021 (AF)

platform overall quality

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