World Bank Document€¦ · · 2016-07-13Document of The World Bank FOR OFFICIAL USE ONLY ... GIPE -Interministerial Group for Personnel and Training GOM -Government of Morocco

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 15838

IMPLEMENTATION COMPLETION REPORT

KINGDOM OF MOROCCO

PUBLIC ADMINISTRATION SUPPORT PROJECT(LOAN 3048-MOR)

JUNE 26, 1996

Country Operations DivisionMaghreb and Iran DepartmentMiddle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. [ts contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currencv UJnit = Dirham (DH)

Equivalencv of US$ 1.0 in Dirham (DH)(Annual Average)

1988: 8.21 DH 1992: 8.54 DH1989: 8.49 DH 1993: 9.30 DH1990: 8.24 DH 1994: 9.20 DH1991: 8.71 DH 1995: 8.52DH

WEIGHTS AND MEASURESMetric System

FISCAL YEARJanuary 1 - December 31

ABBREVIATIONS AND ACRONYMS

CDIF - Informatics and Training Coordination CommitteeCED - Committee for Public Expenditures CommitmentCIPP - Inter-ministerial Project Prequalification CommitteeCNSS - Social Security OfficeCOCOES - Committee for the Coordination of Economic and Statistical

StudiesDB - Budget Directorate, Ministry of Finance (Direction du Budget)DI - Tax Directorate. Ministrv of Finance (Direction des Impo'ts)DP - Planning Directorate. Ministrv of PlanningDS - Statistics Directorate, Ministrv of PlanningGIPE - Interministerial Group for Personnel and TrainingGOM - Government of MoroccoICB - International Competitive BiddingIGF - General Inspectorate, Ministry of Finance (Inspection Generale

des Finances)LCB - Local Competitive BiddingMCI - Ministry of Commerce and IndustrvMDF/MDFIE - Ministrv of Finance and External InvestmentsMAE - Ministrv of Economic AffairsMCE - Ministry of External CommerceMDI - Ministrv of IntenrorMDP - Ministry of PlanningPAAP - Public Administration Support ProjectPAL - Public Administration LoanPCC - Project Coordination CommitteeSAL - Structural Adjustment LoanSAP - Structural Adjustment ProgramTGR - Treasurv General of the Kingdom, Ministry of FinanceTR - Treasurv Directorate (Direction du Tre'sor)TVA - Value Added Tax

* Several acronyms and organizations' names are the French ones. as used in Morocco.

FOR OFFICIAL USE ONLY

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KINGDOM OF MOROCCO


Table of Contents

Page No.

PREFACE ........................................................ ii

EVALUATION SUMMARY ........................ ................................. iii

PART I: PROJECT IMPLEMENTATION ASSESSMENT ....................

A. Background .................................................... 1B. Statement and Evaluation of Objectives .......................................... IC. Achievement of Objectives ................................................... 3D. Major Factors Affecting the Project ................................................. 7E. Project Sustainability ................................................... 8F. Bank Performance ................................................... 9G. Borrower Performance . ................................................... 0H. Assessment of Outcome .................................................... 1I. Future Operation ............. 1...................................... 1J. Key Lessons Learned ................................................... 12

PART II: STATISTICAL INFORMATION

Table 1: Summary of Assessment .15Table 2: Related Bank Loans .17Table 3: Project Timetable .18Table 4: Loan Disbursements: Cumulative Estimated and Actual 19Table 5: Key Indicators for Project Implementation .20Table 6: Key Indicators for Project Operation .31Table 7: Studies Included in Project .32Table 8A: Project Costs ................ .................................. 34Table 8B: Project Financing ........................ .......................... 34Table 9: Economic Costs and Benefits .............................................. 35Table 10: Status of Legal Covenants .................................................. 36Table 11: Compliance with Operational Manual Statements ......... ..... 38Table 12: Bank Resources: Staff Inputs .............................................. 38Table 13: Bank Resources: Missions ................................... .............. 39

Appendices:A. Missions' Aide-Memoires of Bank Final Supervision/

Completion Missions ................................................... 41B. Borrower Contribution to the ICR ................................................... 51

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.

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KINGDOM OF MOROCCO


PREFACE

This Implementation Completion Report (ICR) is for the Public Administration SupportProject (PAL) in Morocco, for which Loan 3048-MOR in the amount of US$23 millionwas approved on May 2, 1989, and made effective on December 28, 1989.

The Loan was closed on December 31, 1995, compared with the original date of June 30,1993. Final Loan disbursements amounted to US$22.4 million or about 98%.Counterpart funds for the project's local costs totaling about US$17 million equivalentwere provided by the Government of Morocco.

This ICR was prepared by Antoun Moussa, Senior Informatics Specialist, of theTelecommunications and Informatics Division (IENTI), Project Manager, and MarcelScoffier, consultant. It was reviewed by Christian Delvoie, Chief, Country OperationsDivision (MN I CO), Luc de Wulf, Country Economist (MN 1 CO), and Rene Costa,Project Adviser (MN1DR).

Preparation of the ICR was begun during the Banrk's final supervision/completionmissions to Rabat (Morocco) in March and November 1995. It is based on material in theproject file. The borrower contributed to preparation of the ICR by providing viewsreflected in the final missions' aide-memoires, preparing a full report on projectimplementation, which incorporated extensiv; information and data as well as its ownpresentation and evaluation of project execution, and providing comments on the draftICR. The missions' aide-memoires and a summary of the borrower's report are includedas Appendices A and B, respectively, to the ICR.

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KINGDOM OF MOROCCO


EVALUATION SUMMARY

Background

1. Following a severe financial and economic crisis in the early 1980s, theGovernment of Morocco (GOM) engaged in an extensive Structural Adjustment Program(SAP). The GOM initiated a set of stabilization and adjustment policies in 1984. Theseefforts were supported by a series of IMF standby arrangements and through a StructuralAdjustment Loan (SAL) from the World Bank approved in 1988. Discussions with thegovernment when preparing the SAL had brought to light a series of institutionalshortcomings in the management and executive capabilities of the core Ministriesresponsible for executing the SAP and of organizational weaknesses in severalgovernment agencies steering the expected results and benefits from the SAL. Thisrelated in particular to procedural complexities, staffing deficiencies and general lack ofappropriate information systems leading to weaknesses in tax administration, budgetaryprocesses, trade and industrial promotion activities, among others. To address theseweaknesses, the government of Morocco (GOM), in 1988, requested institutional andoperational assistance in the form of a loan for a Public Administration Support (PAS)project. The loan was the first PAL project in Morocco to assist in carrying out specificreforms and actions under the country's SAP. It was appraised in 1988 and approved andmade effective in Dec. 1989.

Project Objectives and Description

2. Project Objectives. The PAL project aimed simultaneously at facilitating theimplementation of the SAL reform measures, and at initiating efforts to prepare theground for related administrative reforms. The project, providing focused support to fiveGovernment ministries, was not an administrative reform project and should not beconsidered as such. Instead, it focused from the outset on providing technical assistanceto the GOM to improve administrative performance in targeted areas supported by theSAL, including internal resource mobilization, the monitoring of GOM's publicexpenditures, budgetary procedures, external debt management and external trade.

3. Project Description. The PAL project consisted of assistance to GOMthrough financing technical assistance, training, and large scale use of informationtechnology in the areas of:

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a) inter- and intraministerial coordination, by facilitating the flow of information andestablishing the coordination committees working with improved methodologiesacross administrative boundaries;

b) resource mobilization, by assisting the Tax Directorate (DI) and the TreasuryGeneral of the Kingdom (TGR) of the Ministry of Finance (MDF) in improvingtax administration, collection, and audit;

c) resource allocation and expenditures management, by assisting the MDF and theMinistry of Planning (MDP) in: (i) improving budgetary planning cycle andprocedures; (ii) implementing a harmonized budget nomenclature; (iii)strengthening of investment projects appraisal, selection, and supervisionmethodology; and (iv) computerizing the management of public debt;

d) trade facilitalin, by assisting the Ministry of Commerce and Industry (MCI) in:(i) training staff in computer modeling for import/export forecasting, (ii)performing statistical analysis on exchange rate fluctuations, and (iii) promotingthe industrial sector through enhanced quality control; and

e) macroeconomic management and sectoral planning, by training staff supportingGOM's efforts to: (i) improve overall macroeconomic management. (ii) undertakesectorial studies and strengthen statistical analysis capabilities, (iii) introduceadequate information technology facilities, and (iv) promote wide scaledissemination of demographic and economic data to the public.

4. The beneficiary government agencies include the following: the ministries offinance, planning, economic affairs, commerce and industry and external trade (MDF,MDP, MAE, MCI, and MCE). The main committees concerned with projectimplementation and coordination include the following: the committees for coordinationof economic and statistical studies, Informatics and Training, Projects Prequalification(COCOES / National Council on Statistical Data, CDIF, and CIPP), and the project'scoordination Committee (PCC). Most Directorates of the concerned Ministries weredirectly involved in and benefited from the proicct.

Implementation Experience and Results

5. The project's objectives were mostly met even though both project start-upand disbursement were slow. Start-up was delayed owing to: (i) an importantrestructuring, in 1990, of the GOM core agencies concerned with the project; (ii) therelatively large number of beneficiary agencies and the time required for the restructureddirectorates of the ministries involved to adjust and harmonize, and the cumbersomegovernment procurement procedures; and (iii) the fact thdt the PAL was the first technicalassistance project directly aiming at supporting public administration, with thebeneficiary services lacking prior experience in dealing with the Bank's procedures.Three extensions of the loan closing date were required for effective project completion.

This facilitated satisfactory and full implementation of the project. Compliance with thelegal covenants under the project took place with delays of 10 to 15 months, in line withthe shifts in project start-up and the revised implementation schedule (see Part II, Tables5 to 8, and 10).

6. The qualitative and quantitative results of PAL project execution weresatisfactorily met through the effective coordination between the agencies benefiting fromthe project. Improvements in economic management include the development of"economic" budgets and the implementation of various sectoral measures. Thesemeasures include improving access to information on international trade, establishing ofindustry promotion mechanism, producing of various sectorial studies and publications,and introducing improved methodologies and facilities for information flow and access.Additional accomplishments were achieved in the management of public finance withregard to tax collection and audit, budget preparation, execution and follow-up, andtreasury management.

7. Additional efforts remain to be made, however, to achieve the long-termobjectives of public administration modernization in Morocco. They relate in particularto: (i) integrated public financial management and fiscal forecasting,; (ii) implementationof a comprehensive human resources development program; and (iii) extension,nationwide, of the new methodologies, and information systems introduced under theproject. Although concrete programs were introduced for interministerial coordination,such coordination needs to be strengthened further as does the flow of information in therelevant services. Action plans seeking to further improve such coordination and enlargeproject results and benefits were tentatively developed for future operations. (see Part II,Tables 5, 6, and Appendix A).

8. The key findings and lessons learned are as follows:Proper implementation and satisfactory results have been facilitated by:

(i) The close liaison and coordination among the borrower and Bank teamsassociated with the SAL and the PAL, that were observed at all levels of itspreparation and execution;

(ii) The flexibility in project design that allowed the development of annual workprograms; and

(iii) The continuity of staff assigned to it from the concerned government agenciesand from the Bank during the entire project cycle.

The important restructuring and organizational changes, required by the SAL,resulted in some adjustments and delays in project implementation. However, this wasbeneficial to the project because:

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(i) Implementation occurred in tandem, with organizational/structural changes andtherefore assured adequate internal support; and

(ii) The delay enabled the beneficiary agencies to benefit from technologicalprogress including open, compatible and more efficient information systems in thevarious phases of the project; and

(iii) The project demonstrated that informatior technology can be used toremove and/or reduce inefficiencies in public administration (tax administration, budgetpreparation, expenditure management, quality control, etc...), and can be very effective inreinforcing discipline and accountability in public service.

9. With regard to future operations, implementation experience reveals that theproject has succeeded in focusing the attention on the major bottlenecks in the Moroccanpublic administration. The project initiated a process of change which needs to benourished and continued. To assure such continuity, the turnover of staff in thebeneficiary agencies whose skills were upgraded through project supported training needsto be addressed within a larger scope of administrative reforms. The GOM has indicatedthat future operations should be pursued based on the openings produced by the project tobuild upon the momentum generated by it. To realize the long-term objectives ofadministrative efficiency, actions toward further modernization of the publicadministration in Morocco should be pursued by the Bank, within the context of acomprehensive public administration program focusing on public finance management,overall civil service reforms, and the development of a strategy for deploying a nationalinformation infrastructure.


KINGDOM OF MOROCCO

Public Administration Support Project(Loan 3048-MOR)

Part 1: PROJECT IMPLEMENTATION ASSESSMENT

A. Background

1. Following a severe financial crisis in the early 1980s, Morocco had toengage in an extensive Structural Adjustment Program (SAP). The crisis was due to thefact that the high level of expenditures financed by a temporary increase in phosphateprice and large borrowing, which was not sustainable in light of the plunge in the pricesof export (phosphate), compounded by declining productivity of public investment and aprolonged drought through 1984. The SAP aimed to achieve a stabilization first, then asustainable increase in the rate of economic growth. Tnis was intended to ensureemployment opportunities and acceptable living standards for Morocco's growingpopulation, while shouldering debt service burden and enhancing externalcreditworthiness. The Bank supported first phase of Morocco's adjustment effortsthrough a Structural Adjustment Loan (SAL) approved in 1988.

2. During preparation of the SAL, discussions with the Government hadbrought to light a series of institutional shortcomings in the planning, organizational andgeneral management capabilities of those core ministries responsible for executing theSAP. Specific measures were needed to strengthen public administration. Thesemeasures were required to alleviate or remedy the prevailing constraints to their effectiveoperation. in particular, their effort to implement fiscal, budgetary, and trade policies. Toaddress these weaknesses, in 1988, the GOM requested institutional assistance in theform of a loan for a Public Administration Support Project (PAL).

B. Statement and Evaluation of ObjectivEs

3. Loan 3048-MOR to the (GOM), in an amnount equivalent to US$23.0million, was the first Public Adminis.ration Loan (PAL) project in this country. It wasintended to support the implementation of specific measures under the country's SAP andto lay the ground for future administrative reforms. Since 1989, a first phase of SAP hadbeen underway with the assistance of the SAL (Loan 3001-MOR). The PAL project wasappraised in 1988. The loan was approved on May 2, 1989, and made effective inDecember 1989 (see Part II, Table 2).

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4. Project Objectives. The project aimed simultaneously at facilitating theimplementation of the SAL reform measures, and at initiating efforts to prepare theground for related administrative reforms. It focused from the outset on providingtechnical assistance to the GOM to improve administrative performance in targeted areassupported by the SAL, including internal resource mobilization, the monitoring ofGOM's public expenditures, budgetary procedures, external debt management andexternal trade. The project, providing targeted support to five Government ministries, wasnot an administrative reform operation and should not be considered as such. To reachthe project objectives, the core agencies were to strengthen their administrative capabilityas follows: (a) the Ministry of Finance's (MDF) was to increase its capability to mobilizeresources through improvements in tax administration and collection, in planning andundertaking public expenditure programs, in managing public debt, and in pursuing thedecentralization of its services; (b) the Ministry of Planning's (MDP) was to improve itscapability to coordinate investment programming; (c) the Ministries of Planning (MDP)and Economic Affairs (MAE) were to strengthen their capacity to analyzemacroeconomics developments and statistics; and (d) the Ministry of Trade and Industry(MCI) was to improve import-export forecasting and external trade management and toenhance industrial quality and undertake export promotion activities. These objectiveswere set out as priority targets under the SAL on the basis of reports, studies, and reviewsof government officials.

5. Project Description. This two-tiered project consisted of (a) assistance tothe GOM to introduce improved financial and operational management practices, and (b)enhanced operational capabilities. The first task was to be accomplished by supportingenhanced methodologies and procedures that aimed at strengthening and improvingmacro-economic management and at facilitating and coordinating the flow of financialand economic information among the core economic ministries. Operational support wasto be provided to the GOM through financing, consulting and advisory services; trainingand workshops, and equipment. Specific project activities include the followingelements: (a) resource mobilization, to assist the Tax Directorate (DI) and TreasuryGeneral of the Kingdom (TGR) of the Ministry of Finance in improving taxadministration, collection, and audit; (b) resource allocation and expendituresmanagement to assist the Ministry of Finance (budget and treasury directorates, andTreasury General) and Ministry of Planning (planning and statistics directorates) in: (i)improving budgetary planning cycle and procedures; (ii) supporting the implementationof a new harmonized budget nomenclature; (iii) strengthening investment projectappraisal, selection, and monitoring; and (iv) improving the management of public debt;(c) trade facilitation, to assist MCI in improving external trade management, import-export forecasting and in promoting the industrial sector; and (d) macro-economicmanagement and sectoral planning, to support the GOM's efforts to improve overallmacroeconomic management and the statistic and data basis required for specificeconomic and sectoral programs and planning.

6. For each of the above elements, the project provided funds for: (a)technical assistance and studies to improve management practices and methodology, and

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institutional procedures; (b) training to improve staff skills and prepare them to theirtasks; and (c) information technology software and hardware to improve operationalcapabilities in the above areas.

7. To ensure sustained implementation of SAL reform objectives, the projectalso provided for coordination among the large number of beneficiaries through: (a)establishing a Project Coordination Committe-e (PCC) comprised of representatives fromall the agencies concerned, and appoirnting a prGject administrator; (b) establishing orrevitalizing committees to improve inter- and intra-agency coordination; (c)simultaneously strengthening all the core agencies involved in implementing policyreforms under the SAL rather than assisting one or two in isolation; (d) covering at thesame time complementary organizational, procedural, and technical aspects; and (e)emphasizing staff training. It had been agreed that the w.,rk programs and expectedoutputs within the core agencies concerned would serve as indicators for projectimplementation. These schemes and the expected results (detailed in Part II, Table 5)were flexible enough to enable adjustments in project implementation that would resultfrom organizational changes under the SAP. The above project components wereappropriate for efficient implementation and had been elaborated during projectpreparation in 1988, in cooperation with the SAL teams and with external consultationadvice.

C. Achievement of Objectives

8. As discussed below, most of the project objectives have been substantiallyachieved. T he measures taken within the concerned government agencies enabled toinitiate or accomplish the following improvements that were sought by GOM undermajor parts of its SAP: (a) introduction of improved practices in budget preparation, taxand revenue administration, public expenditures, industrial quality control, and exportpromotion; (b) improved coordination among and within the concerned core ministriesand their involved agencies, so that new methods and procedures could be introduced,being addressed through "productive sector type" work approach and practices rather thanthe usual administrative environment; (c) introduction of large scale computerizedsystems within five ministries responsible for tax administration, budget preparation andexecution, external trade, industrial promotion, sectoral statistics, and civil serviceadministration; and (d) extensive training in these and related skill areas.

9. Given the nature of the project, no direct criteria for judging its outputwere established at the outset. However, indirect development impact criteria wereestablished as output indicators (see Part II, Table 5), and these criteria were monitoredand updated during project implementation. Some of these development impact criteriawhich were realized by the project, include:

- Preparation of the Treasury performance chart on a daily basis;- Preparation of a periodic MDF performance chart;

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Establishment of a unique tax identification system, which is now used for TVAand is being generalized for all taxes;

- Increased volume reliability, and timeliness of tax audits;- Provision of on-line .nformation on, and for, tax payers at the regional and

local levels;- Important reduction of time required to pay public expenditures by the TGR.- Establishment of a central library on public debt and a system to identify

opportunities for rescheduling;- Routine publication of sectoral statistics and studies;- Introduction of harmonized budget nomenclature enabling economic analysis of

budgetary options, the preparation of economic budgets, and the reduction inbudget preparation cycle;

- Preparation and publication of industrial standards and export opportunities forselected products;

- Approximately 1200 management and staff were trained in tax administration,treasury and debt management and information systems - in addition tomacroeconomic modeling, statistical analysis, external commerce, industrialpromotion as described in the paragraphs below - (see Part II, Table 5); and,shared and efficient information systems were established with effectivetelecommunication capabilities with other government services.

10. The project was also instrumental in identifying administrative bottlenecksand required solutions. The government in fact requested a follow-up operation, modeledafter this project, to launch overall administrative reforms. Summary achievements of theproject in its beneficiary core agencies (MDF, MDP, MAE and MCI) are provided below(paras. 11 to 16) and shown in more details in the attached matrix (see Part II, Table 5).Each agency and its directly concerned services benefited of a proportional part of theproject's finances and related operations, namely: process coordination, studies andtraining, and modernization of work methods through computerization. The latterincluded the creation of shared or compatible data bases and systems (hardware, software,applications) and relevant technical assistance.

11. Improvement in Inter- and Intraministerial Coordination. A number ofmechanisms were established under the project to enhance inter- and Intraministerialcoordination. The coordination mechanisms focused on: (a) the revitalization/activationof the intermninisterial bodies responsible for the provision and circulation of statisticaland financial data (COCOES/National Councii on Statistical Data); (b) the developmentof a database (GIPE) to enable improved management and remuneration of civil serviceemployees and the creation of an intermilnsterial working group to address related issues;(c) preparation of a new budget nomenclature; (d) introduction of a "Performance Chart"for the Treasury, integrating inputs from different directorates, using compatibleinformation systems and on-line access to common databases between the directorates ofthe Ministry; (e) selection criteria and methodology for projects to be included in thebudget, applied jointly by concerned services of the MDP and MDF, for the first time; itshould be noted that due to the subsequent reorganization and the realignment of services

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within the MDF and MDP, this important activity is not being pursued actively andrequire further support; and (f) the establishment of electronic communication (ALL-IN-1) arnong all public administration agencies in Morocco, and between them and the Bank.The later enabled interagency sharing of information and electronic messaging, inaddition to access to data bases of the Bank and other international agencies. Althoughcoordination mechanisms have not resolved all coordination requirements between theagencies concerned, they have resulted in establishing common methodologies,information bases, and interlinked information systems. In turn, these systems havereinforced discipline, introduced efficiency in economic management and monitoring(budget preparation time greatly reduced), and shed the light on existing deficiencies andthe required remnedies.

12. Improvement of MDF's Capability in Public Finance Management. MDFwas a major project beneficiary, up to about 88 % of its cost. MDF coordinated theimplementation of its activities through an interministerial Project Committee, supportedby the necessary technical assistance, training, computer hardware and software, andoperational support. On the basis of updated organizational and operational plans for theBudget, Tax and Treasury Directorates of the MDF, (DB, DI and DT, respectively), theproject achieved the following: (a) new structures were created or merged to deal withfmancial forecasting, debt management, and investment projects analysis, and newbudget nomenclature was prepared; (b) tax administration was greatly improved andmade efficient through the actual use of computerized taxpayer identification files andrelated databases in budget, tax codes and tax collection; and (c) large-scale training wasprovided both within the country and overseas, including France, Canada, and the USA.

13. The effective computerization of the main MDF's activities in publicfinance management, and the introduction of compatible information systems and shareddatabases, as well as improved procedures, covered the main areas of activities of MDF'sresponsibilities. The project's operations covered, among others: (a) DI's TaxAdministration, establishment of a unique Tax Identification system, adoption of taxsimulation techniques, reinforcing tax audit and collection and establishing shared databases in the areas of Income Tax, value added tax (TVA) and local taxes (in part), customduties and other levies. MDF now uses computerized records for taxpayer identificationand fiscal data, thus expediting tax collection, and providing means to upgrade tax auditsand enhance public use of tax information and awareness. For example, transmission ofinformation tax dues and of belated payment reminder forms to private and institutionaltaxpayers is now completed in three months and two weeks, respectively, compared toprevious six and two months. In addition, the development of computerized andintegrated tax management (TVA-IS) has enabled the launching of follow-up measuresfor late filers 15 days after the filing deadline, as compared to three months prior to theproject; (b) DB's budget management and administration, including implementation ofnew budget nomenclatures with appropriate liaison and interfacing with concernedgovernment and treasury account agencies, and budgetary projections activities, alsointroducing a "working capital" item for project being financed and mechanisms tosimplify credit carryovers, and preparing a new government chart of accounts. The new

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budget'nomenclatures permit economic and functional classification of governmentexpenditures as well as special accounts receipts, but needs to be improved further toinclude identification at the "project" level which would permit better supervision andcontrol of agencies' expenditures. The computerized budget management system,developed under the project, enables instant reference control of public expenditureswhen they occur, which previously required several days; and (c) DT's and TGR's publictreasury administration, with regard to all treasury accounting offices and cashmanagement, domestic and external public financing and debt management, includingintroduction of auction procedures for treasury notes and current treasury papers. TGRnow disposes of 240 PC terminals for its 600 professional staff, which compares withprevious 30 units. An integrated database on personnel (GIPE, para. 11) for MDF and forthe ministries of public works and higher edlucation which have extensive civil servicestaff, were also established.

14. Improvement of MDP's and MAE's Capabilities in MacroeconomicManagement and Statistical Analysis. Assistance to the MDP and MAE aimed atimproving and strengthening of the staff capabilities in: (a) macroeconomic analysis andforecasting; (b) investment planning; and (c) statistical analysis, including establishmentof a computerized database of basic national statistics. This resulted in the production ofeconomic budgets, which include macroeconomic trend forecasts currently reflected inthe annual Law of Finance. The dissemination of statistical data on the national economyis now made on a regular basis. Also, the capacity for statistical analysis was greatlyincreased and direct access to statistical databases by concerned parties was madeavailable.

15. The work program to modernize, expand, and computerize these activitieswas designed during project preparation, and was implemented later in coordination withthe actions taken by other core agencies in charge of finance, economy, trade, industry,and population. The concerned directorates were provided with common training inmacroeconomic management, software modeling packages, computer hardware,communication networks, and technical and operational support. This was required toensure efficient internal and inter-agency operations at all levels. The StatisticsDirectorate (DS) of MDP had expanded its internal network from 19 to 140 terminalssharing access to important national statistical databases. Interagency linkages were alsoestablished, and computer-based communication networks were connected to otherdepartments and went beyond planned operations to provide telecommunication toexternal users through the North African data transmission network MAGHRIPAC,which also introduced selected access to Internet.

16. Improvement of MCI's Capability in Management of External Commerceand Industrial Promotion. The project also enabled and provided for: (a) theestablishment of statistical information on the industrial sector by MCI's IndustryAdministration Directorate, in liaison with MDF/MAE's activities in this field, makingthis information available to industrial/private sector concerns; (b) training in qualitycontrol of industrial products and in external trade management, and (c) computer

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modeling and related software to assist in import-export forecasting, in the use ofstatistical data on external trade and the industrial sector for appropriate follow-up andanalysis, and in assessing export competitiveness, the impact of exchange rate and othereconomic fluctuations. Staff in charge of the external commerce were trained throughseminars and courses in specialized institutes, and through on-the-job training on newprocedures and activities.

D. Major Factors Affecting the Project

17. Factors not generally subject to Government Control. When the projectwas appraised in 1988, the GOM was pursuing its SAP with Bank support under the firstSAL. Important reforms and restructuring of the main ministries were envisaged orunderway. Even though the project had adopted a flexible yearly implementation plan,actual execution of some training and computerization programs were delayed on theaccount of the administradJve changes that were affecting these agencies (see para. 19).Because most of project operations were considered and prepared under a master plan tomodernize and improve inter- and intra-agency procedures, these plans had to bereadapted to consider the changed structures and procedures. The main functionssupported by the project were not materially affected by the reorganizational changes.The project unallocated funds were used to finance studies and technical assistance whichcame to light as a result of these changes. The detailed planning of the components andactions for the core agencies of the ministries concerned by the project had to beelaborated on account of and in close coordination with the views, factors and changesbeing determined or undertaken under SAP. Though delays have been involved, thisresulted in the improved provision of up-to-date information technology facilities, moreappropriate procedures and staff resource utilization, and in increased internal capacitiesfor the effective operation of the current operations and their long-term sustainability.

18. Factors generally subject to Government Control. At project inception in1989, the GOM promptly established the interministerial PCC, with authority to finalizeproject preparation with the agencies and to ensure its implementation and supervisionthrough completion, in liaison with the Bank. Project start-up was delayed, however,during the first year of its implementation, as explained below.

19. The problems encountered in the progress and timely implementation ofthe project are detailed on Table 13 of Part II. These were mainly due to: (a)redistribution of the responsibilities and internal reorganization of several beneficiaryagencies of the MDF, MDP, and MAE. This occurred following restructuring of theseministries in 1990, when new ministries were created and old ones merged and delayed,in turn, the finalization of plans for training, technical assistance, and computerization;(b) slow and difficult start-up of an adequate and coordinated procurement process; and(c) initial shortages (until 1992) of local funding for project operations in the budget ofthe concerned agencies. These difficulties were not foreseeable before the changes atgovernment organization level had been made under the SAP.

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20. Most of the implementation difficulties were overcome by end 1992,through the dedication and experience acquired by PCC and the participating agencies,and the effective guidance and cooperation from the Bank's project supervision team.For instance, project contingency funds were used to increase the production andpublication of statistical surveys when the Ministry of Planning was abolished. In 1991standard bidding documents for equipment and services and uniform selection proceduresfor seminars and trainees were introduced. Detailed progress reporting by PCC alsohelped in resolving the initial problems. This enabled a level of commitment of 70 % forthe project components by mid-1 993, the remaining 30 % being then defined andprogrammed.

21. Implementation Schedule. According to the original plan, most of thecomponents to be financed through Loan 3048-MOR should have been completed by theend of June 1993. Moreover, the related achievements on work procedures, staff training,and computerization should have been fully operational by end 1993. In the abovecontext of slow project start-up (paras. 18 to 20), implementation of some operations atthe MDF, then restructured and renamed Ministere des Finances et des InvestissementsExterieurs (Ministry of Finance and External Investments] (MDFIE), was delayed byabout two years. The late start-up and the restructuring and organizational changes madein 1990-91 in the concerned agencies resulted in adjustments to the projected activitiesand their implementation plan. Three extensions of the closing date-from June 30,1993, through December 31, 1995- were needed to enable full implementation of theadjusted project.

22. Project costs, financing, and disbursements are detailed in Part II, Tables4, 8A, and 8B. Project costs were virtually unchanged from appraisal estimates, latertendering for the adjusted components having enabled them to benefit from technologicalprogress and better prices (para. 17). From 1991 on, budget appropriations of the agenciesinvolved in the project were adjusted, as needed, to meet local costs, which increased byabout 3 %. Some technical assistance on new and improved methods and procedures, inparticular computerization programs of the treasury and budget directorates and the studyon the factors of economic growth in Morocco and cash management, were implementedwith parallel financing from France, Canada, and the USA. Disbursements reflected thedelayed project implementation, with the loan virtually fully disbursed at completion.

E. Project Sustainability

23. The benefits and impacts of the project are significant and sustainable.The main objectives of the project were to assist in strengthening the capabilities of thecore economic management administrations of the Borrower (i.e., MDF/MDFIE, MDP,MAE and MCI). Expected benefits were largely met from improved capacity both in themobilization and allocation of domestic resources and in extemal trade. The physical,technical assistance and training components of the project were fully implemented in theseveral directorates and services of the concerned ministries. These components included

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implementing modem and efficient work methods and procedures, assigning qualifiedand trained staff in charge, and introducing up-to-date computerized facilities.

24. Four important aspects of the project concept and implementation that willsupport and ensure its sustainability are as follows: (a) the time given to adapt projectdesign and implement its operations after in-depth restructuring of the beneficiaryministries and concerned agencies under Morocco's SAP; (b) the participatory approachto its concept, design, and implementation; (c) the focusing on economic managementfunctions horizontally - encouraging cross-agency staff to come together and addressfunctional and administrative weakness; and (d) the thorough coordination exercised inits preparation and implementation. The ministerial restructuring supported by SALunder SAP enabled the project applications to be developed in a durable environment,and the resulting delay in project schedule enabled the use of more up-to-date and robustinformation technology solutions. The inter- and intraministerial committees wereadjusting and monitoring the project including the information technology developmentand training (CDIF within MDF) and PCC. This ensured: (i) the development ofinformation systems with common operational and access standards, and of proceduresopen to vertical and horizontal activities w:thin and between the beneficiary agencies; and(ii) more efficient and durable project outcormies, with broader sustainable impacts. Thisalso prevented the development within the various agencies of duplicate work methodsand smaller less efficient and incompatible computerized systems, with limited termcapabilities.

25. The project was a first phase to address ascertained weaknesses in GOM'splanning and financial management capability and to improve budget procedures andexternal debt and trade management under the SAL reforms. Through the introduction ofmodern computerized methods and facilities in the concerned agencies, it started adynamic process of modernization by enabling the creation of basic info-structures forimportant aspects of economic management. Project implementation revealed a nextstage of future operations, which is required to further modernize and improve theefficiency of the country's economics and financial administration. These operations havebeen discussed and agreed with the GOM and include (a) further reform of publicfinancial management; (b) the development of strategies for overall computerization ofthe public administration and its services; and (c) the establishment of adequateinformation infrastructures, access, and dissemination.

26. Based on the above outcomes, project sustainability is very likely.Prospects to further improve work methods and procedures, and to enlarge themodemization process within Morocco's public administration would enhance the projectoutcomes and warrant its sustainability.

F. Bank Performance

27. Preparation and Appraisal. The project was based on the Morocco'sSAP, supported by the Bank's SAL, under which the need to strengthen and improve the

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country's finance and economic administration had been identified. The Bank promptlyreacted to GOM'S request in 1988 for assistance in improving the production anddissemination of economic and financial infornation within its public administration,enhancing budget management, modernizing fiscal administration and improving publicdebt management. During preparation, the Bank insisted, in coordination with the SALimplementation team, on the need for tight inter- and intraministerial coordination, andfor adequate technical assistance and staff training. This would ensure effectiveness andopenness and allow future development in operations undertaken. The Bank also insistedon project coordination and an adequate administration of its implementation.

28. Supervision. The project was supervised as detailed in Part II, Table 13.A total of ten missions were performed during the six-year implementation period. Giventhe wide scope of the project and the complexity of some of its activities, not enoughresources were provided for its supervision. The restructuring of the core ministriesconcerned, during the first and the second year of project implementation, delayed but didnot reduce the need for the coordination requirements emphasized during preparation andappraisal. Also, close consultation and liaison were maintained with the SAL supervisionteam. Together with active cooperation from the PCC and the beneficiary agencies, thisclose consultation was greatly beneficial to the project, and to its outcomes and impacts.At project completion, the Government requested the Bank to assist to identify and defmea follow-up operation to refor-m public financial management, to expand thecomputerization process, and to intensify human resource development in the publicadministration.

29. The project results discussed above show that the overall Bankperformance has been very satisfactory.

G. Borrower Performance

30. Borrower performance was satisfactory during project preparation andimplementation. In early 1988, the PCC was established, with the mandate and authorityto coordinate project preparation and implementation, and to liaise with the Bank. At thesame time, three commissions, the National Council of Statistical Data, CIPP and CDIF,were established, or specifically mandated, to cooperate with PCC and adequately liaise,at project concept and during implementation, with the several government services andagencies involved in the project. The cooperation of all these units was tentative at times,but was generally adequate to ensure satisfactory conduct and outcomes of the project. Inparticular, in 1991-92, PCC adequately resolved implementation problems. Examplesinclude international competitive bidding procurement procedures, the lack of budgetaryallocation for local costs, and the selection of candidates for training (paras. 18 to 20).PCC also steadily and thoroughly reported to the Bank on the progress of the differentoperations under the project. A detailed final report on implementation was preliminarilydiscussed during the last Bank supervision mission and produced at project completion(December 1995).

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31. The status of compliance with the legal covenants of the Loan Agreementis detailed in Part II, Table 10. All the covenants were complied with. Compliance tookplace after delays of 10 to 15 months, in line with the overall delay in project start-up andimplementation schedule (para. 21).

H. Assessment of Outcome

32. The outcome of the project is satisfactory. All the physical andoperational outputs of the project were achieved in the several beneficiary agencies andunits of the ministries of finance, planning, economic affairs and commerce and industry.These outputs included: (a) the study of important institutional and organizationalaspects and the working out of adequate methodologies and procedures to reorganize andimprove the work of these agencies as they relate to economic management; (b) the actualintroduction of these procedures within the agencies, with adequate technical assistance;(c) professional and on-the-job training for management and staff; and (d) installation ofcomputerized systems that were operationalized with adequate training. The indicatorsfor project implementation and its outputs are detailed in Part II, Table 5. In line with theobjectives agreed at appraisal and in the legal documents, the main project outcomes werean improvement in GOM's capabilities in public resource mobilization, budgetpreparation and expenditures management, external trade management, sectoral planningand macroeconomic management (paras. 8 to 16). Limited objectives were met withregard to improving public debt management owing to the decision of the TreasuryDirectorate not to fully use project funds (and assistance) in this area. Perhaps the majorimpact of the project is that of raising internal awareness about administrative bottlenecksand the importance of both process simplification and information access and sharing.The changes brought up by the projects in these areas have reduced in large partresistance to future administrative reforms. The assessments under the various aspects ofproject preparation, implementation, and results are summarized in Part II, Table 1.

I. Future Operation

33. Achievements under the project are sustainable and beneficial to theagencies involved, which have now enhanced internal skills and operational capacity toimprove their future operations (paras. 23 to 25). The project outcomes enabled theachievement of its main objectives, derived from the SAL, and will undoubtedly continueto develop favorably (paras. 8 to 16).

34. The project also revealed the need for continuing the methodological andprocedural changes, and the introduction of expanded computerized information systemsin public administration. This would be set within the context of appropriate nationalpolicy guidelines and coordination mechanisms. In addition, the pursuit of therationalization and efficiency targets of budgetary, fiscal, and public debt managementwould require further public expenditure reforms and the continuation of themodernization efforts initiated by the project. The above could occur nationwide at the

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central, regional, and local levels. It could be undertaken in a subsequent stage ofactivities, which has already been considered by GOM and discussed with the Bank.

J. Key Lessons Learned

35. The key lessons learned are as follows:

a) Project implementation and satisfactory results have been facilitated by: (i)the close liaison and coordination that were observed in project concept anddesign, at its inception, between the staff involved in the SAL and the PAL, atboth Bank and government levels; (ii) the continuity of staff assigned to andinvolved in the entire project cycle, on both Bank and GOM sides; and (iii) theeffective coordination in project planning, implementation and supervisionexercised by the Bank and the PCC, and with the sustained contribution andguidance from the other inter-ministerial commissions involved.

b) The important restructuring and organizational changes that took place in1990, as part of the government SAP, resulted in adjustments of the projectoperations and schedule. This was beneficial to the project in two ways: (a) theproject was implemented within a continuing internal support; and (b) the delaycaused project computerization activities to take advantage of technologicalprogress, using open compatible technology and common standards, essential forlong-term sustainability.

c) The successive restructuring and reorganizational changes during projectimplementation have caused important turnovers in the staff of the administrationinvolved, whose skills were upgraded under the project. Though additionaltraining was introduced to compensate for staffing changes, this contributed todelays in project implementation.

d) Overall public administration in Morocco still suffers from proceduralbottlenecks and less than satisfactory coordination. However, this project hasdemonstrated that removing or reducirig these obstacles is possible. Addressingfunctional requirements across administrative boundaries and using informationtechnology to reinforce discipline, to ensure accountability, and to "de-personalize" the public administration, are catalysts to the administrative reformprocess.

36. This project was a first of its type and nature, that is, involving workmethods and procedures, and the related information systems, in a large administrativecontext. The introduction of modernized practices and information technology in thebeneficiary agencies brought to light the dynamic character of the "computerizationprocess" and the need to pursue and expand it: (a) where the project already providedimprovements in procedures and staff capabilities; and (b) globally within and between

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most of the other government administrations and services. Future actions toward afeasible stage to further strengthen public administration in Morocco within a globalinformation infrastructure strategy are being considered by government, and discussedwith the Bank. This would advocate continued Bank involvement to support andencourage the modernization of Morocco's public administration.

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KINGDOM OF MOROCCO



PART II: STATISTICAL INFORMATION

Table 1: Summary of AssessmentsTable 2: Related Bank LoansTable 3: Project TimetableTable 4: Loan Disbursements: Cumulative Estimated and ActualTable 5: Key Indicators for Project ImplementationTable 6: Key Indicators for Project OperationTable 7: Studies Included in ProjectTable 8A: Project CostsTable 8B: Project FinancingTable 9: Economic Costs and BenefitsTable 10: Status of legal CovenantsTable 11: Compliance with Operational Manual StatementsTable 12: Bank Resources: Staff InputsTable 13: Bank Resources: Missions

Appendices

A. Missions' Aide-MemoiresB. Borrower Contribution to the ICR

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Table 1: Summary of Assessments

A. Achievement of objectives Substantial l Negligible Not applicable

Macro policies E a a:!Sector policies E E IXE

Financial objectives x] a o

Institutional development E0 I a aPhysical objectives E 0 Poverty reduction El E alGender issues E E El

Other social objectives n ElEnvironmental objectives E El 0E

Public sector management Ix El aEPrivate sector development E a ]Other (specify) E E El

B. Proiect sustainability Liy Unlikely Uncrrtain(1) (1) (1)

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HWhJYsatisfal Satisfactorv Deficient

C. Bank performanc ( ) ( )

Identification lx ]

Preparation assistance [m :

Appraisal E C

Supervision l j

D. Bofrower performance satisf Safacto Deficient

(') (V) )

Preparation l El

Implementation i x a

Covenant compliance lj E D

Operation (if applicable) El F ]

~~~~~~~~~~~~~HighlyE. Assessment of outcome satisfactoIy Satisfactory UnsatiLfact= isfactory

E() (l) (V) (I)

1: mx 1: O

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Table 2: Related Bank Loans

Loan title Purpose Year of approval Status

1. Loan 3 M001 - To assist Government in a 1989 Completed inStructural Adjustment first phase of Morocco's 1994Loan (SAL) Structural Adjustment

program, aiming atincreased rates ofeconomic growth andemployment opportunities,at improved livingstandards for thepopulation and externalworthiness for the country.

2. Current Cgmpleted To facilitate the carrying 1989 Completed inLoan 3048-MOR out of the SAL reform December 1995

measures by strengtheningof the capabilities of coregovernment agencies ineconomic, financial andplanning management.

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Table 3: Project Timetable

Steps in project cycle Date planned Date actual/latest estimate

Identification (Executive Project Summary) October 1987

Preparation November 1987

Appraisal June/July 1988

Negotiations. March 6-10, 1989

Letter of development policy (if applicable) November 1988 (under

SAL I)

Board presentation May 2, 1989

Signing September 28, 1989

Effectiveness December 28, December 28, 19891989

First tranche release (if applicable) NA

Midterm review (if applicable) NA

Second (and third) tranche release (if applicable) NA

Project completion June 30, 1993 April 30, 1996 la

Credit closing June 30, 1993 December 31, 1995 L

la To enable completion of ongoing operations and related final disbursements after theloan closing date.

ll Three extensions of the closing date were required for the effective projectcompletion. The first one on 05/19/93, by one year, was due to an importantrestructuring, at project inception, of the concerned government agencies. The twoothers were required, to enable completion of the project activities committed underan adjusted implementation plan. They occuired on 06/14/94 and 05/19/95 by oneyear and six months respectively

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Table 4: Loan Disbursements: Cumulative Estimated and Actual

(US$ million)

FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96

Appraisal estimate 2.50 8.50 14.50 20.00 23.00 23.00 23.00 23.00

Actual 0.00 0.00 3.07 5.91 8.74 9.65 11.65 22.33/a

Actual (as % of estimate) 0.0 0.0 21.2 29.5 38.0 41.9 50.6 97.1 la

Date of last disbursement: May 14, 1996

Note: IBRD fiscal year end is June 30th.

la An undisbursed amount of US$668.2 millions was canceled on May 14, 1996, thedate of the last disbursement and closing of the loan account.

Page I of 11

Table 5: Indicators for Project Implementation

Key Project Activities

A. Inter- and Intranministerial Coordination

Govemnment objectives Measures previously adopted Planned measures Implemented measures Output indicators Responsi

(1989) bility

Improvement of financial Agreement to revitalize COCOES Definition and preparation by COCOES has been replaced by a Statistical information have become more MDP

management by: (a) (the Committee for Coordinating COCOES of procedures for national Statistical council, widely available to the public. Social, DS

rationalization and Statistical Studies). identifying and using financial and through a PM decree, with similar demographic and economic statistics are

standardization of economic data, and determining mission and attributes. The produced and published periodically.

financial and economic Issue of Prime Minister circular on the responsibilities of the various council's efforts are modest, but

data; (b) intra- and strengthening of COCOES' role. agencies concemed in particular DS conducted and published a

interministerial the Ministry of Finance (MDF), large number of statistical studies.

coordination of the Ministry of Planning (MDP),information flow. the Ministry of Interior (MDI), and

the Ministry of Commerce &Industry (MCI).Jan 1989 - Dec. 1989

MDF circular on establishment of Implementation of coordinating Several subcommittees were MDF 'tableau de bord,", or performw ice MDF

CDIF (Informatics and Training capability. established under the terms of chart, was first produced a. the end of 95, CDIF

Coordination Committec) Jan 1989 - Mar 1989 reference of the CDIF. integrating input from differentCoordination between different directorates, to the establishment of

MDF directorates (TGR, Di, DT, compatible information systems.DB, & CED) was reinforcedespecially in executing trainingand computerization programs.

Establishment in MDF of an Preparation of MDF performance Economic monitoring capability greatly MDF

economnic projections and studies chart. enhanced. Treasury

unit Jan 1989 - Dec. 1989

Improved coordination in April 1987 circular for Criteria and methodology for pre-selection CIPP

selection and monitoring implementation of economic of investment projects were established and MDP

of investment projects. approval of investment projects. commonly used by MDP and MDF prior to (DS)

Meeting of CIPP (Inter-Ministerial reorganization of the MDP. While not used

Project Prequalification actively now, all material exist and can be

Committee). used once restructuring is completed.

Page 2 of II



3: Resource Mobilization I) - Tax Administration

Govemnment objectives Measures previously adopted Planned measures Implemented measures Output Indicators Responsibility(1989) Comments

Preparation of economic PM circular of April 1987; Law Preliminary draft of new budget Eight economic budgets were Correlation between MI)FIEbudget. No. 39-87. outline. Harmonization of budget produced by MDFIE/MDP(DP) economic projections and MDP kDP)

plan with appropriation law. budget execution greatlyReview of budget plan. improved.July 1989-Dec. 1991

Increased f&s&aI revenuewithin the frmwor': ofgovanment adjm;rmentprogran

Improvemnent of tax Registration of preliminary files, Completion of file and analysis of Computerized general taxpayer Unique taxpayer MDFadminisution through the 90% cornplete. records for private and records were established for identification for VAT and MDIcsbblishment of a unified institutional taxpayers. taxpayer identification/fiscal data other taxes in use.ta> payer identification file. base.

Selection from file of tax data Fiscal census was made and MDF (Dl)and computerization of general unified taxpaycr ID and statastaxpayers records. Completion data were used for data bases.and updating of fiscal/taxpayer Actual use of data base in taxidentification data base. administration.July 1989 - Dec. 1991

Establishment of records andpreparation of taxpayeridentification.

Computerization of general Computerized unifiedtaxpayer records. taxpayer identification fileJan 1990 - Dec. 1990. in actual use.

Completion and updating offiscal data base.Jan 91 - Dec. 91

Page 3 of II

TableS: isad ws for Prjct ipkmeatatieo


B: Resoorce Mobiliatio. -Tax Admimistratdoo

Govanment Objectives Menumrs ously dopted Planned measures Implemented measures Output indicators Responsibility

(1989) Comments

Imrovements in tax Two computer centers Study to identify fisal simulation Recommendations, measures and Use of Tax data base and MDF

adminhnrdo redtods and establisied. techniques. Formulation of a action plan for fiscal simulation Tax simulation to provide Dl & TG

P-s tihmdugl group to study simulation techniques were implemented and input to budget preparation

development of computerized Htrmonization of VAT codes techniques. are being used in budget and related policies.

infonnation/mamageuit witbin the crntry with VAT Jan 1989 -Dec. 1990. preparation.

decision making systems. codes fbr imports.

Study for identifying Working group of TGRDB and Actual progrcss was made MDF Intra-

requirments for data transfer, Dl officials, monitors data in use of data bases, ministerial

procedural interfaces nd systems transfer and the use of computcrization at TG Comminttee

compatibility among tde Budget, harmonized data in budget and enabling direct access to

Treasury Geneal and Tax tax codes, and tax collection, unified taxpayerDirectorates. (since 1993). identification file. to

June 1989-Sept 1989 s

Computerization plan prepared. Review and/or updating of Master plan for computerization MDF (Dl & TG)

computerization pli if was updated. Equipment andnecesswry. software were procured andSept. 1989 - Dec. 1989 installed. Methods and

procedures of fiscaladministralion were adapted andcoordinated, (since 1993).

Preparation of bidding documents MDF (Dl & TG)

for computerization, based oncomputerization master plan.Sept. 1989 - Dec. 1989

___ ___ __ ___ __ __ ___ __ ___ __ ___ _ _ __ ___ __ _ __ _M DF (Dl & TG)

Page 4 of II



B: Resource Mobilization - Tax Administration

Govemnment Objectives Measures previously adopted Planned measures Implemented measures OLutput Indicators Responsibility

(1989) . Comments

Initiation of support training General training program in Availability of trained MDF (Dl)

program for the production of informatics and fiscal simulation staff at inception of newsoftware for the measures was completed in 1993. procedures.application/idcntification of datarequired for fiscal simulation. Staff training centers wereSept. 1989 - Dec. 1989. established, in Casablanca and

Marrakech.

50 managers and stalf are trainedeach year. on average plus 31managers participated in overseastraining sessions.

Improvements in tax Design and preparation of Combined training on tax Tax collectior performance MDF (TG)

collection procedures and computerization and training collection computerized using cornpirterized

staff skills. program for improved cfficicncy procedures took place in tcniniques improvedand effectiveness of existing tax Morocco and overseas courses for including prompt follow-collection services. tax collectors, inspectors and up on tax evadors.Jan 1989 - March 1989. managers (1992-93). 300

managers/staff were trained intotal.

Study of required improvements Study done in 1992 with outsideto extemal TG services. consultants.April 1989- July 1989.

Improvemcnts in fiscal Assistance provided through Extension of new auditing and MDF's general auditing group Efficiency in fiscal control MDF (DI)

control and auditing PERL for revising private sector accounting standards to public ((GF) was equipped for and auditing greatly

tcchniques and procedures. commercial auditing and auditing and accounting. computerized processing of increased and inspectorate

accounts procedures. April 1989 - Dec. 1989. audits and countries also using additional qualificddata bascs. auditors were appointed.

Page 5 of II


Key Projcct Activities

B: Resource Mobilization - Tax Administration

Govemmient Objectives Measures previously adopted Planned measures Implemented measures Output Indicators Responsibility

(1989) Commcnts

Improvements in tax auditing Study to identify computerization Fiscal data base now MDF (Dl)

through development of requirements for tax auditing and improved and txpanded in

computerized management collection. the areas of tax auditing

systenms. June 1989 - Dec. 1989. and fiscal control,including an active use of

statistical tables jor fiscalcontrol.

Preparation of professional Studies were done and several MDF (Dl)

monographs. monographs were prepared inMar 1989 - Mar 1989. 1991-92 using recommendations

of study. a tax fraud controlprogram was prepared.

Study on use of computerization MDF (Dl)

tax fraud control and enterpriseaudit.July 1989 - Dec. 1989.

Provision of assistance related Development of systems for Both systems were implemented Provision of tax MDF (Dl)

to fiscal information. providing extemal fax advisory (effective 1993). information, and taxpayerand information services to the use of tax information

public services greatly improved

June 1991-92 and now available at locallevels.

Page 6 of 11



C: Resource Allocation and Expenditures Management

Government Objectives Measures previously adopted Planned measures Implemented measures Output Indicators Responsibility

(1989) Comments

Rationalization and Preparation of new budget Continuation of program for New nomenclature implemented Budget data standardized MDF (DB)

improvement of budget cycle nomenclature now in progress. rationalizing budget since Jan. 1990. accordingly.

mad procedures. nomenclature. June 1989.

Improvements in project Preparation of project selection Implementation of monitoring Related processes and criteria Transparency in project MIDF (DB)

selection and monitoring procedures and criteria. and evaluation criteria for were adopted and implemented selection

criteria. April 1988. approval of investment projects. since 1991. Proccss not activelPJan 1989 - July 1989. used since 93 reorganization;

needs to be revitalized.CIPP MDP (DP)

Launching of discount rate andshadow price studies for projectappraisal.July 1989 - June 1990.

If necessary, refining of methods Criteria applied to all CIPP MDP (DP)

and criteria on sectors and projects included in thefinancial rates of return for budget (costing orselection of investment projects. exceeding DHIOO million).Jan 1989 - Dec. 1989

Preparation of new projects Updating of computer plan; DP was equipped with micro- Project information was MDP (DP)

briefs. procurement, if necessary, of processors funded under PAL in developed on data base.microcomputers for immediate 1991needs.Jan 1989 - Dec. 1989.

Budget Directorate Completion of Budget DB was reorganized in 1991. MDF (DG)

Improvement of investment reorganization memorandum, Directorate's reorganization. By

budget management February 10, 1988. Dec. 1989.

Page 7 of 11

Table S: Indicators for Project Implementation


C: Resource Allocation and Expenditures Managrmcnt

Government Objectives Measures previously adopted Planned measures Implemented measures Output Indicators Responsibility

(1989) . Comments

Improvement of monitoring Creation of Coordination Implementation of circular on Circular provided and effective All debt-relating data are MDF (TGR)

and management of extemal Committee to assure the procedures for receiving and since 1991. now central-zed, also

debt. implementation of an efficient monitoring extemal loans with providing on-line access to

census on extemal debt. govemment guarantees according extemal debt monitoring

to SAL Agreement. data.Computerized systems were

Preparation of an action plan for Increase in computing capability developed and implemented MDF (TGR)

the computerization of extema for improved extemal debt (1991-92).

debt managemenL monitoring and management.Sept. 1988 - April 1990.

Establishment of a contract Contracts file and library,

billing system and library. debt guarantee file and use

Jan 1989 - Dec. 1989. of inventory are now fullyavailable.

Establishment of an inventory of Inventory, library, data base and Ability to negotiate debt Treasury TG

external debt guarantees. guarantees granting criteria and rescheduling and reduction

Reviewiredcfinition of criteria registering conditions have been in debt services.

and conditions for granting established and made operational

guarantees. since 1992.Jan 1989 - Dec. 1989.

Improvements in the intemal Establishment of inventory on Further improvements of public

debt ianagement systent intemal debt guarantee. debt management required.June 1989- Dec. 1989

Review/redefinition of criteria Application of new criteria.

and conditions for granting Jan 1990 - Dec. 1993.guarantees.Jan 1989 - Sept. 1989.

Page 8 of II



C: Resource Allocation and Expenditures Management

Goverment objectives Measures previously adopted Planned measures Implemented measures Output Indicators Responsibility(1989) . Comments

lmprovements in the Joint study with the Treasury Joint study was completed in TGR and TG have direct MDF

magement of special Generation and computerization 1991. access to shared data bases Treasury /TGR

Treasury accounts. of special Treasury accounts. on Treasury accounts.Jan 1989 - June 1989

Improvements in physical and Preparation and initial Training programs organized and Improvement of staff skills MDF Treasury

b_mn rsowes for debt mad implementation of the Treasury completed in 1991, including: 45 in financial management -

financal mananegnct Directorate's training program. managers for HI. training courses i.e.: increase inaccuracyJan 1989 - Sept. 1989 at ENST-Paris, 57 managers for and frequency of audit,

fellowships in French Public ability to prepare timelyAccount Office, 150 HL staff for perfornance charts,training courses at Int.l. Center improved cashfor Banking/Treasury Specialists. management. t

300 more are planned. TGR's 7

Training Service trains 100inspectors and 120 staff ininformatics usage, each year. 10DT managers attendedspecialized courses and trainingsessions in USA, France, Italyand Sweden.

Development of an improved MDF Treasuryinfonnatic capacity in financialmanagement.

Improvements in the Establishment of economic Development of economic Computerized economic Financial reports and MDF Treasury

monitoing of national and monitoring uniL projection models and a projection models, and management information

international financial management information chart. management information and chart are now available,

situations. Jan 1990 - Dec. 1990 performance charts in use. simulation capacity isI_strengthened.

Page 9 of 11


Key Projcct Activitics

C: Resource Mlocation and Expenditures Management (conl'd)

Improvements in information Refinement and increase in the SROT regularly available. MDF TGR

on budget execution ad rate of application of SROT-typc

Tresmy opeaions statistics. Sept. 1989

(induding public debt andactual investment budgetexpenditure).

Interim mechanisms to monitor Implementation of mechanisms to Computerizzd cash management

real investment expenditures, monitor real expenditures. system was seveloped and partily

initiated. ]an 1989 established in 1993. _ _

Page 10 of II



C: Resource Allocation and Expenditures Mlanagement

Government objectives Measures previously adopted Planned measures | Implemented measures Output Indicators Responsibility

(1989) Comments

Data currently being collected for Development and implementation lTraining in economic Availability of data on MDP TG

preparation of statistical tables. of economic projection models. mnanagement taken place. Simple execution of budgetJan 1990 - Dec. 1990. projection models -re in usc appropriations law .

Improvement in capacity for Preparation of training program. Conditions necessary for Hlardware equipment and Dissemination of statistical MDP (DP)

Mac_ieconomic management macroeconomic analysis. software were installed (1992). data on the national MAE

and statistical analysis. Jan 1989 -Junc 1989. economy; periodicImplementation of publication of economiccomputerization plan (1990-91) budget, however with

limited distribution.

Preparation of training program Annual training program since Improvement of capacity MDP (DP)

on macroeconomic managcment. 1992, including overseas training for monitoring and MAE

Annually in Oct. courses and fellowships for 16 analysis.tiL stafl ini public managemient,short tenn and regional modeling,informnatics and statistics inseveral countries: Canada.France. USA (WB), Japan, Egypt,Malaysia.

Short-term plan for improving Preparation of infonnation plan Statistical data base at national Direct access to statistical MDP (DS)

existing computing capacity for on establishing statistical data level was established in 1992. data bases now availablc.

statistical analysis. base. Oct. 1988 - March 1989.

Preparation and initiation of Annual programs implemented Increased capacity for MDP (DS)

statistics training program. since end 1992. statistical analysis.Jan 1989 -June 1939. Firstprogram Sept. 1989.

Page 11 of 11

TaMe 5: ldiston for "eet Impleeobadot


D: Trade Facilitation: External Trade Ramagement

Govamen objectivs Measures previously adopted Planned memures Implemented measures Oatput Indicators Responsibility

(1939) . Comments

Strengtdhning maement of Development of professional Comnputer and software Active use of statistical MCI Extemal

extema trade and powtion training and computer modeling capabilities increased through data on cxtcmal trade. Trade Directorate

of the industrial sector. capability related to extemal procurement of facilities undertrade. PAL (1993).July 1989 -July 1990

Preparation of professional Programs implemented in 1992- Availability of statistical MCI Industry

uraining and computerization 93: information on the Administrationprograms related to industrial industrial sector. Directorate

sector promotion. 200 HL and Support staff wereSept. 1989 - Sept. 1990 trained in lnfonnatics in

Morocco, and an "analysis andmodeling" training unit wasestablished in MCI.

-31-

Table 6: Key Indicators for Project Operation

Given the nature of the project, there is no direct criteria for measuring ormonitoring its outputs in the course of time. The ministries and government agencies thatbenefited from the project will continue to operate their services, within the country'spublic administration. They will do this by using the improved methods, systems,procedures, informatics facilities and staff from the project, which strengthened theircapabilities and efficiency. The sustainability of the project warrants its durable results.Also, the preparation of a next stage is already underway to expand the "computerizationprocess" within the Government, and toward the public and the institutional users.Undoubtedly, further progress in this direction would enhance and enlarge the project'soutcomes and its operation.

Page I of 2

Table 7: Studies Included in Project

StatusCompletion date

Impact of Study

Implementing Agency Description and Purpose of Study Planied (PC) Actual (AC) Comments

I. Interministerial Committee Definition and preparation of procedures Procedures implemented under the auspices Further improvement necessary.

related to the flow of financial and economic of the New Ministry of Economic and Social

information. Affairs.

PC: 12/89 AC:

2. Ministry of Finance Tax and Treasury General Directorates to Implemented Simulation techniques used for financial

identify and to design fiscal simulation On going planning.

techniques.PC: 12/89 AC: 12/90

3. Ministry of Finance Intra-ministerial Committee to define Committee continues to define and Information access and exchange

procedural interfaces and computer systems implement improvements. Adequate enables the daily production of MOF

compatibility between Budget, Treasury procedures in place performance chart.

General and Tax Directorates.PC: 6/90 AC: n.a.

4. Ministry of Finance Treasury General to define external services Report completed. External services strengthened

improvements and define requirements. providing decentralized services to local

_____________11__89__ _taxpayers._ _ _ _ _ _ __ _ PC: 7/89 AC: 11/89

Page 2 of 2

Table 7: Studies Included in Project

StatusCompletion date

5. Ministry of Finance Tax Directorate to identify computerization Completed Now an integral part of tax

requirement for tax auditing and fraud administration.

control.PC: 12/89 AC: 12/90

6. Ministry of Finance Treasury Directorate to prepare training Underway with initial program completed. Further improvement in debt

program on debt management. Additional training planned. management requires additional

training.

PC: 12/90 AC:

7. Ministry of Finance Preparation of a training program on Annually in October. Some in-house training Common training was provided to staff

macroeconomic management. completed. Additional seminars planned. of MOP and MEA.

8. Ministry of Finance Development of professional training and Report completed. Computerization MCI central and external services

computerization program to improve external underway and training partly implemented. provide regular training and information

trade management and for industrial on quality control of export products

promotion. and widely disseminate information in

these areas.

I________ ________ I PC: 12/90 AC: I

-34-

Table 8A: Project Costs

Appraisal estimate Actual/Latest estim.ate

Item Local La Foreign Total Local La Foreign Total(USSM) tUSSM)

1. Technical assistance 0.10 2.50 2.60 0.10 2.50 2.60

2. Training and workshops 0.10 3.00 3.10 0.20 3.00 3.20

3. Equipment and materials 11.90 14.50 26.40 12.00 14.46 26.46

4. Incremental operating costs 4.00 0.00 4.00 4.30 0.00 4.30

5. Studies and advisory services Lb 0.70 2.80 3.50 0.70 2.80 3.50

6. Refinancing of PPF 0.00 0.20 0.20 0.00 0.24 0.24

TOTAL 16.80 23.00 39.80 17.30 23.00 40.30

La Include taxes and duties of approximately US$8.1 million.

Lb Funds to improve macroeconomic management and sectoral planning capabilities.

Table 8B: Project Financing

Appraisal estimate Actual/Latest estimate

Item Loc&l ,a Foreign Total Local La Foreign Total

(US$t1) (US$34)

IBRD 0.00 23.00 23.00 0.00 23.00 23.00Government 16.80 0.00 16.80 17.30 0.00 17.30

TOTAL 16.80 23.00 39.0 17.30 23.00 40.30

-35-

Table 9: Economic Costs and Benefits

For all projects, this table identifies either the major costs and/or benefits that enter into thecalculation of a re-estimated net present value (or economic rate of return), or, when the netpresent value (or economic rate of return) is not estimated, cost-effectiveness in achievingproject objectives.

- Not Applicable -

Page I of 2

Table 10: Status of Legal Covenants

Project Development Objectives Rating: S

Original RevisedCovenant fulfillment fulfillment

Agreement Section type date date Status Description of covenant Comments

L39480 3.01(a) Execution project 10 As set forth in Sched. 2. Borrower shall carry out theproject with due diligence and efficiency.

09/23/94 C Inefficient procurement.12/31/95 C No comment.

3.01(b) Project Execution 10 The Borrower shall carry out the project in accordancewith a program satisfactory to the Bank and shallfurmish to the Bank, not later than October 31 of eachcalendar year. a proposed action plan.

L304S0 3.02 Procurement 3 09/23/94 C No comment.12/20/95 C No comment.

Procurement of the goods & consultants' services shallbe govemed by the provisions of Schedule 4 of thisAgreement.

09/23/94 c12/20/95 C

L30480 4.01(a) Financial covenants 2 The Borrower shall maintain records and accountsadequate to reflect in accordance with soundaccounting practices the operations, resources, andexpenditures of the project.

09/23/94 C12/20/95 C

4.01(b)(i) Audit I The Borrower shall have the project records andaccounts, including those for the special account, foreach FY audited, by independent auditors

09/23/94 C Intemal auditors hired as agreedwith the Bank.

12/20/95 C No comment.

4.01(b)(ii) Audits I The Borrower shall fumish not later than 6 monthsafter the end of each FY, such audit report to the Bank.

09/23/94 C No comment.12/20/95 C No comment.

4.01(bXiii) Audits I The Borrower shall fuimish to the Bank such otherinformation conceming records and accounts, and theaudit report as the Bank shall request from time totime.

C - covenst complied withCD - complied with after delayCP = complied with patiallyNC - noc eomplied with

Page 2 of 2

Table 10: Status of Legal Covenants (cont)

Project Development Objectives Rating: S

Original RevisedCovenant fulfillment fulfillment

Agreement Section type date date Status Description of covenant Commcnts

09/23/94 c12/20/95 C

The Borrower shall maintain records and accounts

4.01 (c)(i) Statement of reflecting all expenditures of withdrawals made on

Expenditures I the basis of statements of expenditure.No comment.

09/23/94 C No comment.12/20/95 c

The Borrower shall retain until at least I year after

4.01(c)(ii) Statement of each audit report, all records evidencing such

Expenditures I expenditures.

09/23/94 C No comment.12/20/95 C No comment.

4.01(cXiii) Statement of The Borrower shall enable the Bank's

Expenditures I representatives to examine such records.

09/23/94 c No comment.

12120/95 C No comment.

4.01(iv) Statement of The Borrower shall ensure that such records and

Expenditures I accounts are included as a separate opinion, in theannual audit report.

No comment.09/23/94 C No comment.12n20/95 c

SUM: C - Complied with Covenant Class: I Accounts/audit

CD - Complied with after delay 2 Financial performance/generate revenue from beneficiaries

SOON - Compliance expected in reasonably shott time 3 Flow and utilization of pro.,ect funds

CP - Complied with partially 4 Counterpart funding

NYD - Not yet due 5 Management aspects of the project or of its executing agency6 Environmental covenants7 Involuntary resettlement8 Indigenous people9 Monitoring, review,and rcporting10 ImplementationII Secoal or crosssectoral budgetary or otber resource allocation12 Sectonl or crosssectionl regubloyfumsbka action13 Other

-38-

Table 11: Compliance with Operational Manual Statements

No significant lack of compliance with applicable Bank Statements Operational Manual(OD or OP/BP) was observed under the project. Provisional slow practices in theprocurement process were adequately adjusted during supervision.

Staiement number and title Description and comment on lack of compliance

Not Applicable

M:\TONY/MOROCCO:jp\TABLEI I .DOCM(0214/96)

Table 12: Bank Resources: Staff Inputs

Stage of Planned Actualproject cycle

Weeks US$ a Weeks US$

Through appraisal 30 72,000 36 86,400

Appraisal-Board 1 0 24,000 12 28,800

Board-effectiveness 8 19,200 10 24,000

Supervision 46 110,400 60 144,000

Completion 10 24,000 12 l 28,800

TOTAL 104 249,600 130 312,000

la At estimated averge staff week cost of USS 2,400.

Lb Combined with review and discussion of future operations.

-39-Page I of 2

Table 13: Bank Resources: Missions

Performance rating/lb

Number Specialized Implemen- Develop-Stage of Date of Days in staff skills tation ment Types of

project cycle persons field represented I status objectives problems

Thruph appraiaTo outline scope

IS(TM) - PSC of feasiblePreparation mission 11/87 4 42 OMS-FE project to support

IS(TM) - PSC SAL.Preappraisal mission 04/05/88 5 64 OMS-FE

Boalrdappronvy 05/89

through effectiveness

ProjectSupervision I organizational(project start-up IS(TM) - ECO- set-up.mission) 10/11189 3 30 FE I I Procurement

wftion

Effct1ivcnczs 12189

Supervision

Restrneturing ofgovernmentagencies maydelay projectprogress inprocurement and

IS (MA) -ECO technicalSupervision 2 05/06/90 4 28 Eng - OMS I I assistance (TA)

Delay in [CBprocedume and inTA and training

Supervision 3 11/90 2 16 IS(TM)-ECO 2 1 start-up

Organizationalmeasures still

Supervision 4 12/91 1 10 IS(TM) 2 I underway

Slow progress inIS(IM)-ECO procurement andOMS - Eng shortage of local

Supervision 5 4/92 4 36 (Tel) 2 I funding inBudget

Delay inprocurement

Supervision 6 11/12/92 2 22 IS(TM) -OMS 2 1 trnining and TA

La Abbreviations: Eng.: Engineer; FinA.: Financial Analyst; IS: Informatics Specialist; TM: Task Manager;PSS: Public Sector Specialist; F.E: Fiscal Expert; OMS: Organization/Management Specialist; ECO:Economist.

Lb Keys to overall performance rating(prior to FY 94) = I - problem free; 2 - moderate; 3 - major problems.(subce FY 94 on) = HS - highly satisfactory; S - satisfactory; U - unsatisfactory; HU - highlyunsatisfactory.

-40-Page 2 of 2

Table 13: Bank Resources: Missions

Pertfonance rating1h

Numbei Specialized Implemen- Develop-Stage of Date of Days in staff skills tation ment Types of

project cycle persons field represented /a status objectives problems

SupervisionProgressimproving butoverall delayrequiresextension of loan

Supervision 7 05/06/93 2 18 IS(TM)-Fin A 2 l closing date

Supervision Funds now 95%committed. Lateimplementationrqire anotherextension ofclosing daze by Iyear (to June

Supervision 8 4/94 1 7 IS(TM) S S 30/95)

Supery'sion ~~~~~~~~~~~~~~~~~~~~~~~~~Funds fullyconmimifted.Requirements forfituresusainability.C3mpletion ofprocurement/disb

ursenientsnecessitates thirdextension ofclosing date to

3/95 l 6 IS(TM) S S 12/31/95Supervision 9 _

Supervision 10(Final/completionmission) 11/95 l G IS(TM) S S

la Abbreviations: Eng.: Engineer; FinA.: Financial Analyst; IS: Informatics Specialist; TM: Task Manager;PSS: Public Sector Specilist; F.E: Fiscal Expert; OMS: Organization/Management Specialist; ECO:Economist.

Lb Keys to overall performance rating(before FY 94) = I - problem free; 2 -moderate; 3 - major problems;(from FY 94 on) = HS - highly satisfactory; S - satisfactory; U - unsatisfactory; HU - highlyunsatisfactory.

-41-

KINGDOM OF MOROCCO



APPENDICES

A. Missions'Aide-MemoiresB. Borrower Contribution to the ICR

-42-

APPENDIX AMissions' Aide-Memoires

(March 27 - 31, 1995 - 4 pages)(November 15 - 22, 1995 - 4 pages)

-43-

Public Administration Support Project

Supervision Mission(March 27-31, 1995)

Aide-Memoire

A PAL supervision mission comprising Mr. Antoun Moussa visited Rabat March 27-31, 1995 to determine the status of project execution and discuss the future action plan insupport of project objectives.

The mission held discussions with the Minister of Finance, the Minister of EconomicPromotion, the Project Coordination Committee, and the heads of the services benefitingfrom the project in the Ministry of Finance and External Investment and the Ministry ofTrade and Industry. The mission wishes to thank the M1oroccan authorities for theirhospitality and assistance in its work.

This aide-memoire reflects the standpoints of the Government and the mission on: (i)PAL execution; (ii) activities to be undertaken in support of the project; and (iii) thecontent of the project's operational plan, including future operations.

Proiect obLectives

The aim of the project was to assist the administrations responsible for economic andfinancial management, to implement the economic reforms envisaged by the first SAL.These objectives have been achieved to a large extent. On the basis of the lessons learnedduring the execution of the project, it is now possible to put in place an action plan foradministrative reform that will achieve the project's ultimate objective, i.e., raisingperformance standards in public finance management and macroeconomics analysis.

Tmpementationrsuli

The qualitative and quantitative results of project execution are set forth in detail inthe Coordination Committee report (see annex).

Even though concrete programs were introduced (commission on the GIPE, CIPP,VAT-TGRfDI integrated system, DB[budget directorate]/CED coordination) with respect tointer-ministerial coordination, such coordination remains insufficient as does the flow ofinformation in the relevant services. The action plan for future operations should seek toimprove such coordination.

-44-

Page 2 of 4

Macroeconomics management has been improved by the development of economicbudgets and various sectoral measures including the management of external trade, industrypromotion, and the various statistical studies conducted by the current Ministry ofPopulation. The Coordination Committee report shows the results obtained in themanagement of public finance with regard to taxation, budget management, debtmanagement, municipal finances, and Treasury management. However, additional effortsmust be made to achieve fully the objectives set forth in the project, specifically with regardto the introduction of a unified taxpayer identification file, integrated management, andfinancial forecasting.

Owing to .a delay in the project start-up, an extension of the completion date of theloan was required, due to the ctunbersome procedures for the signing of contracts,budgetary controls, reorganization of the administrations involved in the project, and siteadaptations, as well as delays in installing computer equipment throughout the nationalterritory.

Financial execution of the project

While the commitment level is satisfactory, loan-related disbursements are lagging.Given the failure to complete site preparation work before delivery was taken of computerequipment purchased under the last two DI and TGR contracts, and the delays noted withrespect to contract approval, it would be virtually impossible to take delivery of all theequipment involved--and to check the invoices, execute the pertinent disbursements, andmake the appropriate loan disbursements--between now and June of this year.

The Moroccan authorities have therefore informed the mission that they wish to senda last request to the IBRD for a 6-month extension of the loan agreement, with acommitment to complete all operations so that all the loan resources can be used. Theauthorities also stated that they wish to apply the remainder of the Unallocated Fund toenlist the services, with IBRD support, of specialized technical assistants for discussionswith the Ministry of Finance on a new project as successor to the PAL (cf. Ministry ofFinance memorandum).

Plan for future operations

The lessons learned from this project will be the object of a future operationalprogram.

The PAL objectives are clearly a necessary stage, but they are no longer sufficient.The main components of the operational plan, details of which are currently being workedout, are as follows:

- Produce, expand, process, and circulate domestic and external economicinformation for both government decision makers, and national and international economicoperators.

-45-

Page 3 of 4

- Review public finance audits.

- Re-examine general financial and economic information with a view to organizingit according to the most efficient international standards and making it available to bothpublic and private users.

- Continue large-scale computerization efforts,

- Introduce broad-based technology and user training so that computerization is nolonger limited to the purchase of machines.

- In order to define and rationalize the activities of the Ministry of Finance and theother economic administrations; the Ministry's missions should be context-related; Itshould also develop the forecasting function so that its activities take place in a coherentmacroeconomics framework.

Post-PAL

The idea of a new financial administration support project arose during a workingsession the mission held with the Minister of Finance. The mission was extremely pleasedto note Mr. Kebbaj's desire for continued implementation financial administration reforms.

The Minister of Finance stressed in particular the need to mobilize all the resourcesand energies needed for:

- development of training in the Ministry of Finance through the creation of aadvanced-level financial institute;

- reactivating of forecasting activities and the operational capability of the directorateset up for the purpose in the Ministry;

- improvement of budget management from both the preparation and executionstandpoints;

- assignment of proper importance to human and material resource management.

The Project Coordination Committee is currently fine-tuning these objectives andwill shortly send the Bank a request for consultant assistance in preparing for the post-PALperiod.

Rabat, March 31, 1995

-46-

Page 4 of 4

For the Moroccan side For the World Bank

Mr. Moharned Moumnen Antoun Moussa

Director, PASP Task ManagerChairman of the PASP at the IBRDCoordination Committee

ls/ /s/

Director of Budgetaryand Banking Operations

/s/

Signed: Mohamed Moumnen

-47-


Supervision Mission(November 15-21, 1995)

Aide-Memoire

In view of the completion date of the loan, December 31, 1995, a PAL supervisionmission comprising Mr. Antoun Moussa visited Rabat November 15-21, 1995 to take stockof project execution with the Moroccan Authorities.

The mission held discussions with the Ministries of Finance and External Investment,of Economic Promotion, of Trade and Industry, and with the Project CoordinationCommittee. The mission wishes to thank the Moroccan authorities for their hospitality andassistance during the discussions.

This aide-memoire reflects the points of view of the Government and the mission onproject execution and the plan fcr future support operations after the closing date. It carrieson from the discussions held during the last supervision mission of March 1995.

Real progress has been made in the execution of project operations, which reflects agrowing improvement in working methods and macroeconomics management. By way ofexample, the modernization program for the Treasury General of the Kingdom hasproduced encouraging results, which are outlined in the appendix. The otheradministrations have made similar progress, especially the Tax Directorate (MDFIE), theMinistry of Trade and Industry, and the Ministry of Population.

With regard to financial execution, commitments under the loan have reached the rateof 100%. It is expected that full use of the loan for financing will be made by thecompletion date at end-December 1995.

The TGR and the Directorate of Administrative Affairs and Taxes of the MDFIEhave again confirmed to the mission the commitments made during the last supervisionmission to speed up disbursement and ensure the relevant financing from the PAL loanbefore end-December 1995. The undisbursed amounts of other departments are much lesssubstantial and will also be settled before this date.

The mission and the Project Coordination Committee thus focused their effortsduring the visit on preparation of the final report on project execution and the operationalplan for future activities. The mission provided the Coordination Committee with detailson the information to be covered in the final report and reviewed the available data onproject execution. These discussions also identified the operational plan activities forsupporting project achievements after the completion date of the project.

-48-

Page 2 of 4Plan for future operations

The PAL objectives are a necessary stage but more remains to be done. The projectbegan the process of modernizing the administrations involved. Continued modernizationhas now been ensured by a plan for future operations centered on the following:

(A) Structural modernization

(i) Creation of a modernization committee in the Ministry of Finance and ExternalInvestment (MDFIE) and the hiring of a research firm "Euro Groupe" to continuemodernizing the ministry;

(ii) launching of the program for decentralizing and strengthening the Ministry ofTrade and Industry external services, including the establishment of investor authorization,data base in the commercial register, and trademark registration; and

(iii) ongoing enhancement of inter-ministerial coordination to improvemacroeconomics management.

(B) Management of public finance

(i) A research firm (Boussard) has been hired to draft proposals for reforming thecurrent financial audit system for public enterprises. Studies will also be undertaken shortlyon the improvement and simplification of tax audits and public expenditure channels forprojects being financed;

(ii) Canadian support has already been obtained in the cash management area with aview to launching an operational system that incorporates the computerization systemsachieved under the project; and

(iii) Efforts are also under way to obtain Canadian financing for the continuedimprovement of public debt management.

(C) Macroeconomics management

The MDFIE will oversee reactivating of forecasting activities and the operationalcapacity of the directorate set up for this purpose under the project. This is necessary toprovide a coherent macroeconomics framework;

(ii) Likewise budgetary management is to be improved both with respect to budgetpreparation and execution; and

(iii) Diffusion and circulation of external and domestic economic information forusers in both the public and private sectors;

-49-

Page 3 of 4(iv) Setting up of an external investment directorate in the MDFIE to coordinate the

strategy for promoting foreign investment in Morocco.

(D) Training

(i) The setting up of a Directorate of Human Resources in the MDFIE will permitinstitutionalization of the training program begun under the project. It will also ensureongoing training activities to meet the Ministry's objectives;

(ii) The other administrations will continue to implement spccific activitiesdepending on their resources.

(E) Computerization and information flow

(i) Budget allocations will be placed at the disposal of the relevant administrationsfor the upkeep of computer equipment, the purchase of supplies, and continuation of thecomputerization efforts begun under the project;

(ii) Electronic links will be created to connect the data bases installed in thedirectorates benefiting from the PASP;

(iii) The Ministry of Trade and Industry will introduce an electronic networkenabling the external services to link with each other and to work in real time;

(iv) A study has been conducted reliating to INTERNET access for the relevantadministrations; use of the INTERNET servicc is scheduled to begin toward end-March1996;

(v) The Ministry of Population and the Ministry of Trade and Industry will continueto publish sectoral surveys and studies for both public and private users; and

(vi) The preparation of a strategy for the expansion of information infrastructures atnational level is currently being discussed in earnest with various participants in the publicand private sectors.

Introducing the operational plan will provide essential support for the projectmeasures and the achievement of its ultimate objectives, i.e., raising administrativeperformance standards in public finance management and macroeconomics analysis. Giventhe plan's importance, it would be desirable for the PASP supervision committee to visit theBank in early 1996 for further discussions on the matter and to present its final report onproject execution.

At any event, the report will be sent to the Bank before end-December 1995; it willbe prepared in accordance with the outline agreed with the Coordination Committee.

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Page 4 of 4

Rabat, November 1995

For the Moroccan side For the World Bank

Mr. Mohamed Moumen Mr. Antoun Moussa

Director, PASP Task ManagerChairman of the at the IBRD.PASP Coordination Committee.

/s/ /s/

-51-

APPENDIX BBorrower Contribution to the ICR

A detailed contribution was prepared by the Borrower. The project coordinatorprepared a summary of this comprehensive project implementation report from theBorrower. A translation of this summary is attached as Appendix B. (16 pages)

-52-

Ministry of Finance and InvestmentTreasury General of the KingdomBudgetary and Banking Operations Directorate


I (PAL)

Evaluation Summary

Of thePAL Coordination Committee

April 24, 1996

-53-

Contents

Page

1. Project origin and context 12. Project objectives 23. Project policy instruments 34. Qualitative results 45. Financial results 96. Project coordination 127. PAL audit 148. Overall evaluation 15

-54-

1. Project origin and context

Ultimate aim: to raise performance standards in public finance management andmacroeconomics analysis.

1.1 Achievement of SAL objectives

* Improve internal resources mobilization,* Rationalize expenditure management,* Control debt.

1.2 Macroeconomics analysis

- Review planning methods,* Develop forecasting activities,

C oordinate activities of the administrations involved in macroeconomicsmanagement.

1.3 Reshaping public economic and financial sector policy for economic growth

* The Government as main agent of this policy,* and the means of achieving structural adjustment policy goals.• For the first time, the public economic and financial sector, rather than functioningas an intermediate sector, is the direct beneficiary of an IBRD project.

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Page 2 of 16

2. Project objectives

2.1 General

* Structural modernization of economic and financial administrations* Enhanced procedural flexibility* Increased productivity* Improved efficiency* Improved internal information flow* Expansion of inter- and intraministerial coordination.

2.2 Specific

i Develop economic and financial forecasting methods* improve and simplify budgetary procedures* Modernize Government mobilization and management of resources (mainly taxadministration)

* Improve internal and external public debt management* Simultaneous launch the computerization programs for the directorates of the Ministry ofFinance and the economic administrations (Directorate of Taxes, Treasury General,Treasury Directorate. IGF [financial audit agency], Planning, Statistics, External Trade,Domestic Trade, Economic Affairs).

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Page 3 of 16

3. Project policy instruments

3.1 First module - Information Technology

* Computer equipment* Development of appropriate software application* Design and Automation of procedures* Installation of interfaces to facilitate communication among various projectbeneficiary systems.

3.2 Second module - Technical assistance

* developmen: of new information systems• simplification and and standardization of procedures

3.3 Third module - Training

* Abroad: in the various administrations' areas of activity* Domestically: mainly through development of internal training capabilities* Encourage various administrations to pool training.

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Page 4 of 16

4. Qualitative results

Interministerial coordination

* Preparation of a draft law creating a national council on statistical data to take overand reactivate the COCOES [Interministerial Committee for the Coordination ofEconomic and Statistical Studies]. Approval of the draft is pending.* Preparation of a new budget nomenclature.* Creation of a discussion committee on the GIPE.* Formation of the CIPEP [standing intermninisterial committee on public enterprises],and definition and application by this committee of the selection criteria for projectsto be included in the budget.

Intraministerial coordination

* Establishment of operational links between the TGR [Treasury General of theKingdom] and the DI [Tax Directorate]. (Liaison committee, computer links withrespect to the VAT)* Operational and computer-based links between the Budget and the CED[commitment control office].* Ongoing coordination between TGR and the Treasury Directorate on governmentcash-flow management (monthly statement of costs and resources) and on debt.* Start up of forecasting activities at Ministry of Finance.

Macroeconomics management

* Production of economic budgets on a regular basis.* improvement of external trade management (law on external trade, customsnomenclature, liberalization of external trade).* Strengthening management capabilities of the Ministry of Commerce and Industry.* Study of current-value conversion rates and reference prices.* Study of sources of growth for the Moroccan economy.* Various other sectoral studies carried out particularly by the Statistics Directorate.* Decentralized treatment of investment files.* Computerization of the ministries of internal and external Commerce and industry.

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Page 5 of 16

Taation

* Completion of draft collection code.* Upgrading of tax audits.* Completion of applications for expediting collection activities.* Compiling tax data bases and using them to create the simulations needed duringthe preparation phase of the budget law. Use of cross-checking procedures.* Enhancement of public awareness and assistance efforts.

Budget preparation

* Implementation of new budget nomenclatures with a corollary improvement infund management.* Introduction of "working capital" for projects being financed.* Introduction of mechanisms simplifying credit carryovers.* Preparation of a new government chart of accounts.

Debt management

* Setting up and organization of a contract data bank.* Completion of computer applications by the TGR and the Treasury Directorate.* Introduction of auction procedures for Treasury notes.

Modemizing management of municipal finances

* Preparation of a new nomenclature for municipal expenditure.* Computerization of municipal revenue.* Introduction of new management tools.

Cashflow management

* Flow-of-funds tables: monthly, weekly, and daily.* Cash-flow committee (TGR-Bank Al-Maghrib-Treasury Directorate).* Oversight committee for the implementation of the Finance Law at ministeriallevel.* Cash management project.* Pilot electronic Casa-Rabat tax revenue link.* Implementation of cash-flow procedures: Treasury note auctions, expenditureschedule, resource tapping of some major public institutions.

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Page 6 of 16

Training

Treasury General of the Kingdom, Ministry of Finance

* Since 1989, 45 executives have been sent to attend the ENST training courses inParis. They have been holders of doctorates or equivalent postgraduate degrees.* Training courses were completed at the French Public Office by three groups ofmanagers, computer engineers, and accounting heads (a total of 57 individuals).* Training in banking of prefectural treasurers, tax collectors, executives andemployees of the TGR banking service (a total of 150 individuals), provided by theCentre International de Formation Bancaire [international center for training in thebanking profession].* Another program worked out with the Center provided for the training of 10groups, each comprising 30 individuals.* Equipping the TGR's training service has expanded its intake capacity. The servicetrains 100 inspectors and deputy inspectors and about 120 computer users everyyear.* German assistance in equipping the municipal finance training unit.

Tax Directorate

e Equipping the Casablanca Training Center.* Computer training for engineers, administrators, and employees (on average 50 ayear).X Introductory courses for tax specialists who have attended refresher courses on theVAT, the IGR, business licenses, the TPI, and registration (about 300 individuals).• Opening of a Training Center in Marrakech.* Training abroad. Selected management staff have attended sessions on varioustopics: tax audits, training of instructors, the VAT, taxpayer identification,management of cross-checks (about 31 individuals).

Ministry responsible for Population - Directorate of Planning and Directorate of Statistics

* One and 1/2 month seminar on public management for I executive at the ENAP[school of public administration] of Quebec, 1994.* One week training course in France for 2 executives on post facto evaluation in1994.* Training course in Malaysia for 1 executive on data systems in 1993.* Two week training course at the University of Alexandria, Egypt, for 3management staff on the privatization of public enterprises in 1994.* Training course for 2 executives during 4 separate assignments of one week each atthe INSEE and the Directorate of Forecasting in Paris in 1991, 1992, and 1993 on

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short-term modeling and the quarterly treatment of national accounts.e Training at the University of Aix-Marseilles III, France, for 2 executives during 4assignments in the area of regional modeling in 1991, 1992, 1993, and 1994.* Training for I executive on the RMSM-X model of the World Bank, Washingtonfor 2 weeks in December 1994.e Six months computer training in Japan for I executive in 1994/95.

Treasury Directorate

e Training courses in the USA. Italy, Paris. and Stockholm for 8 directoratemanagement staff.* Participation of executives in a seminar on the international foreign exchangemarket.* Preparation abroad by 2 executives of a postgraduate diploma.

Ministry of Extemal Commerce

Three staff were sent to Washington for training in modeling tools used by theIBRD.* Setting up of the External Trade Analysis and Modeling Unit in the Research andProgramming Division.

Ministry of Commerce and Industry

* Organization of several training sessions for executives, computer technicians, andsecretaries (almost 200 individuals).* Ten management and staff sent abroad for training in various areas such as projectmanagement, quality promotion, and privatization.

Technical Assistance

Treasury General of the Kingdom

* Assistance from the IMEG Company in analyzing the information system andoutlining the strategic computerization scheme and the master plan.* Assignment of a French expert in the promotion of banking activity.* Assistance from French Public Accounting office in implementing thecomputerization master plan.* Diagnostic mission of Mr. Summers of the IBRD on the introduction of a moderncash management system.* Mission of Mr. Abderrahmane of the IMF on collection procedures.* Project under way with Canada for the introduction of a cash management system.

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* Proposed assistance from Canada in setting up an integrated debt managementsystem.

Tax Directorate

* Assistance from the IMEG Company.* Assistance from the DIGITAL Company.* Assistance from French experts on specific assignments relating to tax audits,computerization of tax services, and professional training.* IMF missions

Ministry responsible for Population (Directorate of Planning and Directorate ofStatistics):

* Technical assistance for 2 executives on 3 separate assignrments of one week eachat the INSEE, Paris during 1992, 1993, and 1994 in the area of TABLO-typemodeling.* Technical assistance and 1 0-day training course for 2 executives at the UnitedNations (New York) and the University of Pittsburgh, USA, on data systems, andproject evaluation and follow up, in 1994.* One week technical assistance for 2 executives on promotion of the private sectorin Lille 1992.

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5. Financial results

6.1 Commitmenta

Table 1. Position of commitments on April 24, 1996 1'

(DH1,000)

Name Project Commitments Percent

MOF Directorate:

TGR 164872 194536 118Taxes 114800 114040 99Treasury 11000 8488 77IGF 300G 5432 181

MCI 18828 19710 105

Ex. trade 1500 844 56

Economic affairs 3600 1694 47

MDP

Statistics 12400 17638 142Planning 4000 4872 121

Total 334000 367254 110

The commitment level was satisfactory at 110 %.

Accordingly, the programs of most administrations are well under way.

The over-committed funds (9%) are charged to the operating budget and committed on anannual basis.

/ On the basis of the exchange rate in March 1989, i.e., the rate used for calculations during thenegotiation and conclusion of the loan agreement.

Z/ The evaluation includes the portion for contingencies and the Unallocated Fund as determnined by thefirst evaluation.

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IGF, Statistics, and Planning commitments exceeded the initial forecast as a result of theinclusion of program operations that were not covered during the evaluation phase.

6.2 Pavments

Table 2. Position of PASP-related payments on April 24, 1996.

(DH1,000)

Name Commitments Payments Percent

MOF Directorate:

TGR 164872 168891 102Taxes 114800 106133 92Treasury 11000 5981 54IGF 3000 4388 146

MCI 18828 16581 88

Ex. trade 1500 844 56


MDP


Total 334000 326173 98

The main reasons for the initial slow payments are as follows:

* The relevant administrations lacked experience with the management of financedprojects and were thus unfamiliar with the procedures involved.

* Project start-up was delayed by a year, the result of the lengthy procedures forapproval of the initial CPSs by the services involved, the IBRD, and then by the CED. Thisproblem was solved through preparation by the coordination committee of a CPS-type project,approved by the IBRD and the CED. Also contributing to the delay, for some administrations, werethe insufficient budget allocations for activities eligible for financing under the loan.

* The fact that many scheduled sites were not ready to receive computer equipment(electricity, cables, air-conditioning, furniture). This caused delays in taking delivery and hence inthe level of payments.

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* The lukewarm support for the project of some participants that felt that it did notoffer additional credits.

* IBRD procedures are constraining for others, who prefer to enter into contractsoutside a PAL.

* The large number of participants (5 ministries, and 5 directorates of the MDF).

* The cumbersome nature of budgetary procedures.

* The numerous control and approval authorities, both on GOM side and on that ofthe IBRD.

* Finally, the two largest contracts signed under the project representing 35% of itstotal budget did not begin to take effect until late in 1994. The relevant payments have thereforejust begun.

6.3 Disbursement

Table 3. Use of the IBRD loan as April 24, 1996

(DH1,000)

Name Loan Drawings Percent

MOF Directorate:

TGR 98923 116334 177Taxes 68880 55132 80Treasury 6600 1704 26IGF 1800 1500 83

MCI 7020 8713 124

Ex. trade 900 440 49


MDP


Total 196123 116466 100

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6. Project coordinationAn essential aspect of project implementation

- The special feature of the PAL: This project is directly intended, for the first time,for the administrations as a "productive sector."

- The project involves several participants from the various ministries, which entailsproblems of hierarchy and duties. The expenditures eligible for project financing aremanaged by the directorates or administrative divisions, for computer services and trainingand the Directorate of Public Facilities of the Ministry of Public Works (for the constructionand preparation of computer sites).

- By contrast, the supervision of qualitative activities is assigned to other bodiessometimes lacking data on those aspects involving the financial management of the project.

- rhe PAL Coordination Committee, set up during the preparation phase of theproject and confirmed after negotiation of the loan with the IBRD. The committee includesrepresentatives of the relevant directorates who participated in the preparation, negotiationand later in the supervision of the project.

- The Committee was the discussion partner of the IBRD for the approval andimplementation of the programs of all the agencies involved.

'MTe Commnittee also saw to the installation of an electronic link (All-in-one) withthe IBRD. It was designed to facilitate contacts and data and information transfers withboth the Bank and among the relevant government departments. Owing to the limited useof this link by most of those involved, this goal was not fully achieved.

- Through its regular meetings, annual reports, and frequent communications sent tothe administrationis involved in the PAL, the Coordination Committee emphasized the needfor coherence among the programs in a given Directorate, or within a given ministry, andamong all the ministries involved.

- The coordination among the economic and financial admiiJistrations, a mainobjective of the PAL, should continue after the completion date of the project loanagreement. It would therefore be desirable for an interministerial seminar to be held, withIBRD participation, for an assessment of the following:

* the impact of the reforms introduced since the project took effect

* the "added value" resulting from computerization of the relevant services

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* future activities for the continued implementation of reformn to consolidateproject's achievements and to adjust to the rapidly changing modem world.

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7. Project audit

- In accordance with loan agreement No. 3048/MOR in connection with the PAL,the audit was assigned to the IGF.

- The IGF regularly filed audit reports with the IBRD.

- The audit reports showed that project execution was proceeding in an orderlymanner, but called attention to difficulties hindering the speed of its implementation.

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8. Overall assessment

- Positive results of the project owing to computerization of the departments withcrucial responsibilities for budget financing and management, and for macroeconomicsmanagement.

- Creation of a new modernization process in said administrations.

- Corollary effects of the project: PAL gave rise to parallel activities which amongothers, resulted in:

* The mobilization of a Japanese grant for the financing of an "observatoire"for Moroccan international competitiveness in the Ministry of Commerce and Industry;

* The setting up of an electronic link (All-in-one) with the IBRD and amongthe relevant departments. It has been used for electronic messaging and access to economicand financial information, including loan-related information (LDS). It is planned now thatit would be used for possible connection with global networks such as the INTERNET);

* The launching of a project with Canadian financing to establishment of acash management system, and the possible installation, also with Canadian assistance, of anintegrated system for management of the public debt (in the broad sense).

- The difficulties noted with regard to financial execution confirm the need for moreflexible budgetary procedures.

- The deveiopment of coordination in the Ministry of Finance will also requirepreparation of a joint training strategy.

- In the meantime, more emphasis on the directorates own programs would seem tobe necessary.

- To sustain the investments in information technology, technical staffing should bemaintained and increased.

In conclusion, the success of the project was due mostly to the support of theconcerned administration and to the financial and technical support of the World Bank..This permitted achieving most of its objectives in a satisfactory manner. Loan proceedswere used almost totally by the concerned administrations in accordance with projectobjectives. The beneficiary administrations have communicated to the PCC their desire topursue the dynamic modernization process initiated by the project. Now, it appears moreevident then ever, that it is necessary to build upon project accomplishment and pursue,

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Page 16 of 16with the continuos assistance of the World Bank, future operations based on the openingsprovided by the project.

Documents

World Bank Document€¦ · · 2016-07-13Document of The World Bank FOR OFFICIAL USE ONLY ... GIPE -Interministerial Group for Personnel and Training GOM -Government of Morocco