Document of The World Bank Report No: ICR2584 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-43110) ON A CREDIT IN THE AMOUNT OF SDR6.7 MILLION (US$10 MILLION EQUIVALENT) TO BURKINA FASO FOR A DECENTRALIZED URBAN CAPACITY BUILDING PROJECT July 30, 2013 Urban Development and Services - AFTU2 Country Department AFCF2 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective July 1, 2013) Currency Unit = FCFA FCFA1,000 = US$ 1.98 US$ 1.00 = FCFA504 FISCAL YEAR January 1- December 31 ABBREVIATIONS AND ACRONYMS AFD French Development Agency – Agence française de développement AMBF Association of Municipalities of Burkina Faso AMO Support to contract management - Assistance à la maitrise d’ouvrage APL Adaptable Program Loan BCEAO Central Bank of West African States - Banque Centrale des Etats de l'Afrique de l'Ouest CAS Country Assistance Strategy CBO Community Based Organization CGCT General Code of Local Governments - Code général des collectivités territoriales CSI Informal Sector Contribution - Contribution Secteur Informel DAF Financial Department – Direction des affaires financières DEP Directorate of Studies and Planning - Direction des études et de la planification DGE Unconditional grant for equipment - Dotation générale d’équipement DGF Unconditional grant for operating costs - Dotation générale de fonctionnement DGI Treasury Department – Direction générale des impôts DUC ABP Decentralized Urban Capacity Building Project ESMF Environmental and Social Management Framework FAPM Financial and Administrative Project Manual FICOD Local Government Investment Fund - Fonds d’investissement des collectivités décentralisées FPDCT Permanent Development Fund for Local Governments - Fonds permanents de développement des collectivités territoriales GTZ German technical donor agency - Gesellschaft fur Technische Zusammenarbeit IFR Interim Un-Audited Financial Report KfW German development financing agency - Kreditanstalt für Wiederaufbau LGs Local Governments MATD Ministry of Territorial Administration and Decentralization – Ministère de l’administration territoriale et de la décentralisation MEF Ministry of Economy and Finance MDG Millennium Development Goal MEDEV Ministry of Economy and Development – Ministère de l’économie et du développement MFB Ministry of Finance and Budget – Ministère des finances et du budget MHU Ministry of Housing and Urban Planning – Ministère de l’habitat et de l’urbanisme ii MSP Municipal Support Program MTEF Medium-Term Expenditure Framework PACVU Urban Environment Project - Projet d’Amélioration des Conditions de Vie Urbaines PAP Priority Action Plan PIM Project Implementation Manual PIP Priority Investment Program PMP Priority Maintenance Program PRCA Administration Capacity Building Project – Projet de renforcement des capacités de l’administration PRCCU Projet de renforcement des capacités de l’administration PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Strategy Paper SDAU Urban Master Plan - Schéma directeur d’aménagement urbain SG General Secretariat - Secrétariat général SIL Specific Investment Loan TAL Technical Assistance Loan UIS Urban Information System WAEMU West African Economic and Monetary Union Vice President: Makhtar Diop Country Director: Madani M. Tall Sector Director: Jamal Saghir Sector Manager: Alexander Bakalian Project Team Leader: Balakrishna Menon Parameswaran ICR Team Leader: Jonas Ingemann Parby ICR Main Author: Abdoulaye Kane iii BURKINA FASO Decentralized Urban Capacity Building Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph Contents  1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 3. Assessment of Outcomes .......................................................................................... 11 4. Assessment of Risk to Development Outcome......................................................... 17 5. Assessment of Bank and Borrower Performance ..................................................... 18 6. Lessons Learned ....................................................................................................... 20 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 22 Annex 1. Project Costs and Financing .......................................................................... 23 Annex 2. Outputs by Component ................................................................................. 24 Annex 3. Economic and Financial Analysis ................................................................. 36 Annex 4. Bank Lending and Implementation Support ................................................. 37 Annex 5. Beneficiary Survey Results ........................................................................... 39 Annex 6. Stakeholder Workshop Report and Results................................................... 40 Annex 7. Summary of Borrower's ICR ......................................................................... 41 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 53 Annex 9. List of Supporting Documents ...................................................................... 54 IBRD MAP 35395 iv A. Basic Information Decentralized Urban Country: Burkina Faso Project Name: Capacity Building Project Project ID: P084027 L/C/TF Number(s): IDA-43110 ICR Date: 07/24/2013 ICR Type: Core ICR Lending Instrument: TAL Borrower: BURKINA FASO Original Total XDR 6.70M Disbursed Amount: XDR 5.52M Commitment: Revised Amount: XDR 6.70M Environmental Category: C Implementing Agencies: Ministry of Territorial Administration and Decentralization Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 01/10/2005 Effectiveness: 11/30/2007 11/30/2007 11/04/2009 Appraisal: 02/19/2007 Restructuring(s): 11/28/2012 Approval: 05/29/2007 Mid-term Review: 10/12/2010 Closing: 01/31/2013 01/31/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Government: Moderately Satisfactory Unsatisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: v C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 39 39 General industry and trade sector 1 1 Solid waste management 1 1 Sub-national government administration 59 59 Theme Code (as % of total Bank financing) Decentralization 25 25 Municipal finance 24 24 Municipal governance and institution building 25 25 Urban planning and housing policy 13 13 Urban services and housing for the poor 13 13 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Madani M. Tall Mats Karlsson Sector Manager: Alexander E. Bakalian Eustache Ouayoro Project Team Leader: Balakrishna Menon Parameswaran Sylvie Debomy ICR Team Leader: Jonas Ingemann Parby ICR Primary Author: Abdoulaye Kane F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) Strengthen the delivery of urban services at the municipal level with special emphasis on Ouagadougou, Bobo-Dioulasso, Koudougou, Banfora, Ouahigouya and Kaya. vi Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : Share of municipal budget spent on infrastructure investments and maintenance. Average (2003-2005) -Ouagadougou: -Ouagadougou: 25% 33% -Ouagadougou: 25% -Bobo-Dioulasso: -Bobo-Dioulasso: Value (2002-2004) 22% 34% quantitative or -Bobo-Dioulasso: 12% -Koudougou: 21% -Koudougou: 37% Qualitative) -Koudougou: 13% -Banfora: 25% -Banfora: 44% -Banfora: 25% -Ouahigouya: 25% -Ouahigouya: 65% -Ouahigouya: 17% -Kaya: 21% -Kaya: 53% -Kaya: 10% Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments (incl. % Achieved (target exceeded for all cities). Latest figure is for 2011. achievement) Indicator 2 : Increase in municipal revenue (recettes ordinaires). Average 2003-2005: CFAF 8,342 million -Ouagadougou: -Ouagadougou: 25% 105% -Ouagadougou: CFAF -Bobo-Dioulasso: -Bobo-Dioulasso: Value 5,648m (2002-2004) 40% 51% quantitative or -Bobo-Dioulasso: 1.777 -Koudougou: 50% -Koudougou: 50% Qualitative) -Koudougou: 262 -Banfora: 50% -Banfora: 80% -Banfora: 337 -Ouahigouya: 40% -Ouahigouya: 19% Ouahigouya: 188 -Kaya: 40% -Kaya: 29% -Kaya: 131 Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments Achieved (target met or exceeded except for Ouahigouya and Kaya). The latest (incl. % figure available is for 2011. achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Number of municipalities having adopted and using transparent, standardized, Indicator 1 : and efficient budget management procedures as specified in administrative vii management procedures manual. Value (quantitative 0 6 49 or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Achieved (target exceeded). Since 2010, the activity has benefitted all forty nine Comments (49) urban municipalities of the country beyond the initial six (6) beneficiary (incl. % municipalities, and, eventually, all the 351 LGs adopted and started using the achievement) manual. Number of municipal contracts developed and signed by the Government and the Indicator 2 : cities. Value (quantitative 0 19 6 or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Partially achieved. Contracts were developed, signed and implemented for the six Comments project target cities. In 2010, Government dropped the Municipal Contract (incl. % approach in 2010 following the roll out of the FPDCT. The target is therefore no achievement) longer relevant. Level of budget execution of Priority Maintenance Program (PMP), as specified Indicator 3 : in the annexes to the municipal contracts. Value (quantitative 0 95% 3% or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments Not achieved. Latest figure from 2011.The activities planned were not carried (incl. % out due to delays in TA and contracting. achievement) Indicator 4 : Level of budget execution for the street addressing activities. Value (quantitative 0 100% 89% or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments (incl. % Partially achieved. Latest figure from 2011. achievement) Increase in revenue from the Informal Sector Contribution tax (CSI - Indicator 5 : Contribution du secteur informel). Total average 2004-2006: Ouagadougou: Ouagadougou: CFAF 872 million 25% -14% Bobo-Dioulasso: Bobo-Dioulasso: Value -Ouagadougou: 5% 25% -50% (quantitative -Bobo-Dioulasso: 5% Koudougou: 40% Koudougou: -38% or Qualitative) -Koudougou: 8% Banfora: 40% Banfora: 50% -Banfora: 8% Ouahigouya: 50% Ouahigouya: -29% -Ouahigouya: 10% Kaya: 50% Kaya: -19% -Kaya: 10% Date achieved 12/31/2006 01/31/2013 01/31/2013 viii Not achieved. Note, however, that there were several changes to the CSI in 2010 Comments limiting the total potential value of CSI revenue. Based on revised calculation, (incl. % the indicator is broadly stated to be achieved. See main ICR text. Latest figure achievement) from 2011. Number of urban Master Plans (SDAU - Schema directeur d'aménagement Indicator 6 : urbain) developed. Value (quantitative 1 13 12 or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments Achieved. 12 Urban Master Plans are completed. The city of Ouagadougou has (incl. % not been taken into account because the city completed an Urban Master Plan achievement) independently from the project. Level of budget execution of the pilot operation on Occupancy Permits (Permis Indicator 7 : urbains d'habiter) and land titles (Titres fonciers). Value (quantitative 0% 100% N/A or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Not achieved (under the project). No activity was carried out under the project. Comments However, IFC activities were undertaken as part of "Doing Business". Main (incl. % results were simplification of land titling procedure and increase in delivery of achievement) land titles. Development, dissemination and implementation of financial ratio guide for Indicator 8 : municipal finances (number of guides published). Value (quantitative 0 4 3 or Qualitative) Date achieved 12/31/2006 01/31/2013 01/31/2013 Comments Achieved. The original number of financial ratio guides were consolidated and (incl. % reduced to three. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 11/20/2007 Satisfactory Satisfactory 0.00 2 04/03/2008 Satisfactory Satisfactory 0.47 3 07/11/2008 Moderately Satisfactory Moderately Satisfactory 0.99 4 01/08/2009 Moderately Satisfactory Moderately Satisfactory 1.28 5 06/30/2009 Satisfactory Satisfactory 1.63 6 11/24/2009 Moderately Satisfactory Moderately Satisfactory 2.09 Moderately Moderately 7 06/04/2010 2.55 Unsatisfactory Unsatisfactory 8 12/15/2010 Moderately Satisfactory Moderately 3.46 ix Unsatisfactory 9 07/05/2011 Moderately Satisfactory Moderately Satisfactory 4.54 10 03/17/2012 Satisfactory Moderately Satisfactory 6.17 11 11/17/2012 Satisfactory Moderately Satisfactory 7.08 12 02/10/2013 Moderately Satisfactory Moderately Satisfactory 7.82 H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions Amendment of the Financing Agreement to increase of 11/04/2009 S S 2.09 procurement prior review thresholds for Burkina Faso. Amendment of Financing Agreement to include Incremental Operating Cost and reallocation of project proceeds among categories of expenditures is to allow disbursement of incremental operating costs under Credit No. 4311-BUR which were envisaged in the Project design and reflected in the Project Appraisal Document (page 20, paragraph 54, and page 56, 11/28/2012 S MS 7.26 paragraph 163), but were inadvertently not specified under Schedule 2, Section IV, A.2 (Table of Eligible Expenditures) of the Financing Agreement. The costs incurred as incremental operating cost were approved as eligible by the Bank from the beginning of the project up until June 2012 when the issue was raised and disbursement was halted. x I. Disbursement Profile xi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Country Context 1. Economic growth in Burkina Faso averaged 5.9%, placing the country above the average of the other countries in West Africa. The country’s poverty index had fallen to 46.4% in 2003, compared to 54.6% in 1998, with this change occurring largely in the rural areas. However, at the same time, the poverty rate in urban zones almost doubled, rising from 10.4% in 1994 to 19.9% in 2003. Presidential elections in 2005 and legislative elections in 2007 were ruled as relatively fair and free by the majority of international observers. The results of these elections confirmed the continued dominance of the ruling party. This long- term political stability combined with important economic reforms enabled higher than average growth rates for Burkina Faso relative to the sub-region, and these gains had provided opportunities for an increase in public expenditures on health, education and water and sanitation as well as for more targeted social service provision. However, the population growth rate remained high - around 3.2% annually. Sector Context 2. Burkina Faso is one of the least urbanized countries in West Africa - 23% of its population is living in urban areas. However, the urban population has been growing steadily, with the number of urban centers with 10,000 residents projected to increase from 64 in 2000 to 250 in 2025, and the share of population living in urban areas expected to increase to 40% in 2025. In general terms, urban development was characterized by (i) a significant deficit in urban planning capacity, which led to urban sprawl that was costly to cities and exacerbated the shortage of urban infrastructure; (ii) difficult living conditions, with more than 50 percent of the population living in unsafe housing and close to two-thirds of the urban population with limited access to sanitation; and (iii) inefficient management of financial resources and the shortage of these resources relative to needs. Furthermore, urban development has been constrained by insufficient resources - the combined budgets of the 49 urban local governments (LGs) accounted for only 2% of the national budget in 2008. 3. The national authorities made urban development a national priority with the creation of the Ministry of Housing and Urban Planning in 2006. With the passing of the Local Government Act in 2004, Government confirmed its commitment to decentralization. The act calls for a phased approach to the implementation of decentralization and for establishment of dedicated transfers (the Permanent Development Fund for Local Governments (FPDCT) to local governments as part of fiscal decentralization reforms. 4. Decentralization reforms had been affected by the (i) the failure to transfer authority to the LGs based on the schedule set by the act; (ii) the weakness of LGs and paucity of their own resources as well as those transferred by the Government; and (iii) weak human resources at the local government level, and their lack of control over the staff assigned to them by the State. The FPDCT was established by means of the LG Act, but the FPDCT had not been operationalized and dedicated funds had not been set aside in the Government budget.  1 Rationale for Bank assistance and contribution to high level objectives 5. The Bank’s intervention was consistent with its role as a major actor supporting urban development in Burkina Faso in the period from 1995 up to 2005, focusing on the two main cities ─ Ouagadougou and Bobo-Dioulasso. The project was designed to address three core sector issues as highlighted above: (i) inadequate capacity to deliver urban infrastructure and services and manage urban development; (ii) limited institutional and implementation capacity of urban local governments (LGs or municipalities) and urban stakeholders; and (iii) local resource mobilization for sustainable service delivery. 6. The project was designed to (i) facilitate the enforcement of the laws on decentralization and the increase in financial, human, and technical resources to be made available to urban LGs with a view to assumption of the responsibilities transferred to them; (ii) facilitate a closer relationship between the municipal authorities and the people through a participatory process (municipal audits) for identifying priority investment programs; and (iii) make the municipal authorities accountable to their constituents and the Government through a contractual framework (municipal contract). It focused on technical assistance targeting in particular (i) the preparation of municipal audits that made it possible to prepare priority investment programs designed in a participatory manner and funded by the FPDCT with State budget funds already included in the 2007 budget; (ii) the implementation of the mechanism for the transfer of funds from the Government budget to the LGs to finance infrastructure (FDPCT); and (iii) capacity building aimed at municipal and urban programming and management (in urban LGs and support institutions), with the aim of efficient use of resources transferred in an enhanced fiduciary environment.    7. The project supplemented the other IDA-funded interventions (in particular the Municipal Capacity Building Program and the PRSC series) and their objective of providing LGs with sustainable financing and capacity for implementation and management of investments for urban service delivery. The project was designed to leverage the financing for municipal infrastructure from Government as well as from the PRSCs towards the FDPCT through the inclusion of specific triggers in the PRSC series.   8. The project focused on Burkina Faso’s six main cities (Banfora, Bobo-Dioulasso, Kaya, Koudougou, Ouagadougou, and Ouahigouya). Provisions were also made to provide targeted assistance to other regional capitals (Dédougou, Dori, Gaoua, Fada N’Gourma, Manga, Tenkodogo, and Ziniaré). 9. In terms of its implementation, the project was designed to be mainstreamed with the activities and structures of the implementing agencies. In fact, the entities receiving institutional support directly supervised those activities for which they were responsible as part of a contractual arrangement between entities and the project coordination entity. Each commune were expected to sign a municipal contract that included (i) a Priority Investment Program (PIP) for infrastructure and services to be funded by the State budget through the FPDCT; (ii) a Municipal Capacity Building Program funded by the project; and (iii) a Priority Maintenance Program (PMP) funded by the commune. Municipalities were also the beneficiaries of activities conducted by the ministries and the AMBF. 2 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 10. The development objective of the project was to strengthen the delivery of urban services at the municipal level with special emphasis on Ouagadougou, Bobo-Dioulasso, Koudougou, Banfora, Ouahigouya and Kaya. 11. The key indicators for monitoring achievement of the project development objectives were as follows: (i) share of municipal budget spent on infrastructure investments and maintenance, and (ii) increase in current municipal revenue (“recettes ordinaires�). 1.3 Revised PDO (as approved by original approving authority) and Key Indicators 12. No changes were made to the project development. 1.4 Main Beneficiaries 13. The main beneficiaries of the project were (i) the local governments benefitting from technical assistance and capacity support, (ii) the population of the target cities, and (iii) the national government institutions (ministries, units, and technical departments) involved in managing and overseeing the framework for decentralization. 1.5 Original Components (as approved) Component 1: Municipal Support Program (US$4.3 million equivalent) 14. This component focused on strengthening the technical and financial capacity of the municipalities of Ouagadougou, Bobo-Dioulasso, Koudougou, Banfora, Ouahigouya and Kaya to program, finance, deliver and manage infrastructure and urban services. This was be supplemented by activities targeted at the remaining regional capitals. This component has three sub-components, which will define the Municipal Support Program of the municipal contract: Sub-component 1.1. Strengthening programming and urban management capacity (US$3.0 million equivalent). Activities under this sub-component included: (i) municipal audits for the cities of Ouagadougou, Bobo-Dioulasso, Banfora, Ouahigouya, Koudougou and Kaya (ii) updating or developing city plans and satellite photos (12 regional capitals, excluding Ouagadougou); (iii) evaluation and update of the Urban Information System, (iv) completing and consolidating the implementation of the street addressing system,(v) training for the municipal departments and elected officials; (vi) consolidation of the solid the waste management systems in Ouagadougou and Bobo-Dioulasso; (vii) supporting the identification of community based projects included in the PIP; (viii) providing logistical support to the six targeted municipalities (furniture, office and IT equipment); (ix) supporting the elaboration of the PMPs and regular monitoring and evaluation by consultants; and (x) supporting capacity for contract management. Sub-Component 1.2. Strengthening Financial Resource Mobilization (US$680,000 equivalent). Activities included: (i) continued support to the implementation of the residential 3 tax in Ouagadougou and Bobo-Dioulasso and rolling out the residential tax to Koudougou, Banfora, Ouahigouya and Kaya; and (ii) strengthening collection of the CSI (Contribution Sector Informelle) in Ouagadougou and Bobo-Dioulasso and support to carry out tax censes in Koudougou, Banfora, Ouahigouya and Kaya. Sub-Component 1.3. Strengthening administrative and financial management of the municipalities (US$600,000 equivalent). Activities included: (i) computerization of financial management and training; (ii) diagnostic of economic infrastructure management and support to the improvement of revenue generated from the infrastructures; and (iii) development of a training module on budget preparation and financial analysis, workshops and on-site training, and preparation of a budget and financial management manual. Component 2: Support to urban development institutions and stakeholders (US$2.6 million equivalent) Sub component 2.1. Transfer mechanisms and financing local investments (US$600,000 equivalent). Operationalizing transfers and monitoring the progress in local investments was implemented through: (i) a comprehensive review of the financial framework for decentralization and periodic technical assistance; (ii) strengthening the Local Finance Observatory in Ministry of Territorial Administration and Decentralization (MATD) and publishing of an annual municipal finance ratio guide; and (iii) support to establishing the instruments and procedures of the FPDCT, including logistical support, training and communication. Sub component 2.2 Urban planning (US$1.4 million equivalent). The capacities of the relevant ministries and other institutions to support the municipalities in carrying out urban planning was expected to be strengthened through: (i) modification and simplification of the development process and content of urban master plans and information technology support to the Ministry of Housing and Urban Planning (MHU); (ii) support to the implementation of specific activities of the national housing policy and strategy for safeguarding public land reserves including the development of a strategic plan for the social housing sector; (iii) extending the pilot operation on issuance of land ownership documents; and (iv) establishing an observatory of local economic development in MEDEV to support the development of secondary cities. Sub component 2.3. Institutional Strengthening (US$630,000 equivalent). General support to the national level institutions involved in urban development: (i) training and logistical support to the DGDCL and permanent secretariat of the MATD; (ii) implementation o f and training on the M&E systems for all regional capitals, MATD, MFB, MHU and MEDEV, including surveys to monitor results and evaluations of impact on beneficiaries; (iii) support to the Association of Municipalities of Burkina Faso (AMBF) to carry out training programs and implement street addressing; and (iv) support to private sector development through training of SMEs, consultant firms and local economic groups. 4 Component 3: Project management, monitoring and evaluation (US$l.7 million equivalent) 15. The objective of this component was to strengthen national capacity to coordinate programs, monitor performance of municipalities and institutions involved in decentralized urban development. Activities included: Sub-component 3.1. Project management (US$l.2 million equivalent): Overall support to project management via (i) technical assistance to the departments of MATD and other ministry departments involved in project management; (ii) equipping the MATD with suitable information technology and office equipment, and logistical means to carry out the management of the project; (iii) operating expenses of the MATD coordination team; (iv) quarterly meetings of the steering committee; (v) short term technical assistance to ministries as well as municipalities to carry out their tasks; and (iv) participation of key staff to relevant workshops and training. Sub-component 3.2. Monitoring and evaluation (US$405,000 equivalent). Actvities included: (i) workshops at project launch, mid-term review, and closure; (ii) evaluation of municipal contracts (performance of all parties) and regular implementation progress workshops; (iii) of consultants for the regular evaluation hiring of the project; and (iv) communication, publication and maximizing use of project experiences. Sub-component 3.3. Audits (US$140,000 equivalent). Annual financial audits of project accounts. 1.6 Revised components 16. Components were not revised during project implementation. 1.7 Other significant changes 17. The project was restructured twice during the course of implementation. The first restructuring was completed in November 2009 to amend the FA to reflect the increase in the procurement prior review thresholds – this was a country level decision affecting all World Bank projects. Secondly, a Level 2 Project Restructuring was completed in November 2012. The restructuring included an amendment to the initial financing agreement to include in the project operating costs for all three expenditure categories covering each of the three project components. In addition, the restructuring included a reallocation of proceeds: Component 1 was reduced with an amount totaling SDR 500,000 while Component 2 increased by SDR 750,000 (including SDR 250,000 from the unallocated resources). The rationale was to allow disbursement of incremental operating costs which were envisaged in the project design and reflected in the PAD (paragraph 54 and paragraph 163), but were inadvertently not specified in the Financing Agreement. The costs incurred as incremental operating cost were approved as eligible by the Bank from the beginning of the project up until June 2012 when the issue was raised and disbursement was halted on request of the Disbursement Department. 5 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 18. Project preparation took place over a relatively long period ─ from January 2005 to November 20071, largely because of changes in design. The preparation included thorough consultation with stakeholders and relevant Government counterparts as well as municipalities. Preparation was also informed by studies and other activities financed by a Project Preparation Facility of US$ 600,000. Initially designed as a urban infrastructure and service delivery project (a follow up to the Urban Environment Project) with specific financing for urban infrastructure, the project had to be redesigned during the September 2005 identification mission to reflect the new strategic priority on budget support and thus to be aligned with the 2006-2009 World Bank Country Assistance Strategy for Burkina Faso. The revised design was based on the commitment of Government to provide financing for urban services through FDPCT. The project built on the achievements and lessons from the earlier Urban Environment Project (in terms of resource mobilization and urban and municipal management) and on the Bank’s earlier engagement in the urban sector. The lessons learned considered included (i) sustainable financing of urban infrastructure services require expansion of intergovernmental transfers, (ii) emphasis on strengthening the mobilization of local governments’ own resources, and (iii) the importance of continuous local capacity building. Analyses of the country context and of the decentralization and urban development sectors were both pertinent and sound. 19. The project design was complex and ambitious even if it reflected a coherent approach. The project aimed at combining institutional capacity building through the credit and the financing of local investments expected through Government resources. The project development objective outlined in both the Project Appraisal Document (PAD) and the financing agreement was to “strengthen the delivery of urban services at the municipal level, with special emphasis on Ouagadougou, Bobo-Dioulasso, Koudougou, Banfora, Ouahigouya, and Kaya� in spite of the fact that the project did not finance any direct service delivery or infrastructure. The main focus of the project was to strengthen the delivery mechanisms for service delivery, i.e. the institutions responsible for services (through training and capacity building at national and LG level), and the financing of these services (through the PRSCs and the Government financing of FDPCT), and not the actual delivery2. 20. The PDO indicators reflected the PDO in the PAD in terms of increased budget spent on maintenance and services at LG level. However, there was no specific indicator for service delivery, and the PDO indicators did not fully take into account some of the challenges with regards to attribution (e.g. increase in overall revenue collection as a general 1 Due to these changes, project preparation formally only began in September 2005 when the design was agreed. 2 It is important to note that the French version of the FA had a different formulation that appeared to be better aligned with the project focus with the emphasis on strengthening mechanisms and capacities to ensure improved service delivery. In the French FA, the development objective of the PRD was to strengthen the capacity of urban communes to provide infrastructure and services to their communities, focusing in particular on the six major communes in Burkina Faso (Banfora, Bobo-Dioulasso, Kaya, Koudougou, Ouagadougou, and Ouahigouya). The intermediate results were: Component 1: Strengthen the technical and financial capacity of Burkina Faso’s six main communes to program, finance, deliver, and manage urban infrastructure and services. Result – Component 2: Strengthen the capacity of institutions supporting municipalities and financing mechanisms for decentralization. 6 proxy for the effect of the activities related to improved revenue collection, rather than having a more project specific indicator). In addition, the issue of Government co-financing was unclear in the design - while clearly stipulated in the PAD (Government co-financing estimated at US$ 400,000), this was not included in the FA. 21. In the absence of direct financing of infrastructure, the project design rested on two key assumptions: (i) that the linkages with PRSCs would ensure sufficient leverage to ensure continuous momentum in decentralization reforms and allocation of national budget to finance LGs, (ii) that the conditions built-in in the project design regarding the operationalization of the FPDCT would be implemented and financed by the Government and other development partners. For Burkina Faso, this design was innovative, but relatively complex given the status of decentralization reforms and the configuration of key actors involved in decentralization at the time of appraisal. Further, one could argue that the credit available was relatively high given the fact that the project could only focus on TA and capacity building – this may have contributed to the large number of thematic areas and activities included in the design (and this is also reflected in the fact that the project credit was not fully disbursed at project closing). 22. The large and varied number of activities included in the project combined with the complex institutional framework for implementation proved to be a risk for effective implementation. The project initially had 3 components, 9 subcomponents, and 37 action areas/activities (resulting in 49 contracts under implementation in the first two years of implementation). The implementation arrangements included a steering committee, involvement of four ministries, the municipalities, the FPDTC secretariat, the AMBF and CBOs. The project design could have benefitted from a principle of selectivity, i.e. a reduced number of activities and possibly focus within a few key areas of key importance, e.g. within revenue management and expansion of revenue opportunities. 23. The commitment of the Government was strong, particularly in the case of the oversight ministry, which viewed the project as a vehicle for strengthening the decentralization process through the establishment of a financial transfer mechanism for local government investments. However, the ensuing challenges during implementation with regards to coordination and oversight of implementing agencies were an indication that the project ownership (and the understanding and support to the project implementation framework) was not necessarily shared across all agencies. 24. The ICR rates the quality at entry as moderately unsatisfactory for the reasons outlined above. 2.2 Implementation 25. The first three years of implementation were characterized by slow implementation, low disbursement rates, and significant delays in all components. Some of the key factors for delay include: (i) project management3 and coordination issues related to the coordination of 3 Project management was initially constrained by (i) the coordination team operating in relative isolation from the ministry, (ii) the limited experience of PIU staff, and (iii) the working relationship and coordination between the Team 7 many stakeholders and the continuous need for follow up and supervision of activities, (ii) delays in recruitment of project staff, and (iii) management of procurement of activities, i.e. substantial delays in procurement, and challenges in managing the large number of contracts (up to 49 in the first two years). Following discussions between the Bank team and counterpart at the end of 2010, disbursements increased and project implementation improved, although final disbursement was 82.4% at project closure. The project was a problem project/project at risk during 2010 and was rated Moderately Satisfactory at project closure4. 26. As previously mentioned, a level 2 restructuring was completed for the project in November 2012 (refer section 1.7 for details). There was no formal midterm review, but a comprehensive assessment of project progress was completed in October 2010.  The review was conducted at a time when the project was rated MU and with a low disbursement rate (33%) and slow implementation. The conclusions and decisions made as part of this review (in particular with regards to planning and implementation of activities) helped to improve project performance and increase disbursement by (i) refocusing activities on the ones considered of critical importance (ii) eliminating the annual planning system for activities and replacing it with multiyear planning; and (iii) adopting measures to strengthen monitoring of implementation. At project closure, 32 of the total number of 37 activities, and additional six activities were completed.  In light of the changes in the sector context (e.g. delineation of the LGs, changes in guidelines for various revenue types, changes in municipal contract approach) a review of the project results framework would have been pertinent. However, no restructuring was completed at midterm. 27. Government provided a total of US$ 95,740 as counterpart financing – substantially short of the co-financing amount of US$ 400,000 quoted in the PAD5. The lack of provision of national counterpart funds for the project, which would have helped cover expenditures deemed ineligible for IDA financing, was the main cause for the gap in financing the project’s operating cost (this necessitated the restructuring in 2012) and this lack of financing also contributed to delays in implementation. The Government financing, as outlined in project preparation documents, was expected to cover, among other things, costs associated with meetings held by the steering committees – an important structure in multi-stakeholder projects such as this. 28. In addition to the factors outlined above, project implementation was affected by the following key factors: and the General secretariat which at times was not fully effective. These factors affected project ownership inside and outside the ministry at the beginning of the project. However, following the reorganization of activities as part of the midterm review in 2010, project management improved significantly. With regards to M&E, the project faced some initial challenges in collecting reliable data. However, these constraints were addressed by hiring on an M&E specialist, and accountant. 4 Please note that the last ISR of the project was archived on February 10, 2013. Therefore, the system uses the ISR rating from November 2012 which was Satisfactory. However, the correct final rating is Moderately Satisfactory. 5 In Client Connection, this amount is US$ 1,700,000. 8 (i) Coordination challenges in the project’s monitoring and decision-making bodies (technical committee, focal points, steering committee) caused delays in contract preparation, and insufficient management of service contracts; (ii) Inadequate integration of the project’s activities into the normal work programs of the relevant ministries, limited support for activities, and frequent changes at the implementing entities of officials responsible for monitoring activities and of focal points; (iii) The change in project design and approach during preparation which increased the risks that some of the implementing agencies would not be fully supportive and aware of the revised approach and implementation framework, causing delays in implementation; (iv) Fragmentation of procurement 6 and insufficient management and execution of procurement contracts, and (v) Delays resulting from the shift in September 2011 from a system of manual processing of disbursement requests to an electronic one; and the suspension of disbursements between July and November 2012, following a halt in activities lasting almost four (4) months. 29. In addition, a national sociopolitical crisis in March 2011 (causing disruption and demonstrations in the capital) caused delays in and/or postponements of the implementation of a number of activities (e.g., continuation of the studies on the SDAUs, and the launch of combined activities—improved local tax collection and street addressing). 30. Despite the challenges identified above, the project was able to complete a large set of activities and achieve significant outputs across all components as outlined in Annex 2, and as described in section 3.2 below. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 31. The monitoring and evaluation system was designed to report on the performance of each city and the implementation of the municipal contracts (investment, municipal finance and administration, infrastructure maintenance) and to help strengthen the national monitoring and evaluation framework for the decentralization process across the country in the areas of local governance, economic development of the cities, intergovernmental fiscal transfers, and municipal finances. The system also provided for the introduction of instruments to gather the opinions of the communities on the quantity and quality of the urban services provided. 32. Overall, the implementation of the system was moderately satisfactory. Despite the recruitment of an M&E specialist, the PCU was not able to consistently collect data and report on progress on indicators on a consistent basis, but in the last two years of project implementation the project team took specific actions to address deficits in the M&E 6 At one point during implementation, the number of activities amounted to 250 due to the tendency to breakdown activities into small contracts. 9 framework, including addressing data gaps and undertaking additional data collection exercises. The MATD, in particular the Directorate General for Local Government (DGCL), was central to the monitoring and evaluation system for purposes of collecting and validating data. In the last year of implementation, deliberate efforts were undertaken to ascertain the validity of data and to devise alternative measures to collect data for indicators that were no longer valid (e.g. the indicator on CSI). 2.4 Safeguard and Fiduciary Compliance 33. Financial Management. Overall, the project had an adequate financial management system that generally provided, with reasonable assurance, accurate and timely information that funds were being used for intended purposes. The accounting and financial procedures were in line with national and Bank procedures. The project rating for financial and accounting management has been Satisfactory until December 2010, Moderately Satisfactory from December 2010 to January 2012, Moderately Unsatisfactory from January 2012 to July 2012 (due to substantial delays in reporting and one minor audit issue), and Moderately Satisfactory from July 2012 to the closing date. The accounting system established by the project was acceptable to the Bank, staffed with an experience accounting officer and clerk accountant and delivered reports according to Bank standards and within the stipulated deadlines. However, minor deficiencies were revealed with regards to assets management and recording of advances. In addition, the project submitted acceptable financial monitoring reports generally acceptable within the stipulated timeframe, with only two reports submitted late and one minor audit issue which was resolved. 34. Procurement. While difficulties in managing procurement affected overall project implementation as outline above (in particular in the first three years of implementation), the selection and implementation of contracts was in line with Bank requirements. The move towards use of country systems, while fully in line with the Paris declaration, contributed to delays in implementation due to capacity weaknesses. Further, procurement planning was affected by the tendency to breakdown activities in many small contracts to allow for higher participation of local firms and consultants, thus increasing the transaction costs of procurement management. Towards the end of the project, the rating of procurement was satisfactory. Through the implementation of the project, significant progress has been made by all project implementation entities in the implementation of the procurement process of goods and the selection of consultancy services. 35. There were no safeguards issues in relation to the project as the project did not trigger any of the Bank’s safeguards policies. 2.5 Post-completion Operation/Next Phase 36. No formal transition arrangements have been put in place with regards to the project coordination commitment and the PCU, but the reforms achieved as part of implementation of the project are expected to continue – including Government financing of the FDPCT. However, no specific follow up plan has been designed for several of the other project 10 outputs, including financing of the implementation of the Urban Master plans produced for twelve of the participating cities. During the last part of implementation, the Bank worked to prepare a follow up operation focusing on specific investments and service delivery. However, at the time of writing of this ICR, it was decided that the Bank will continue its involvement on decentralization through the ongoing Local Government Support Project which focuses on strengthening the central government’s capacity for decentralization7 and the institutional capacities of municipalities (“communes�) in six regions, and to improve accountability linkages between local policy makers and citizens in said municipalities. No specific project on urban development is in the pipeline at this stage. Furthermore, the Bank is planning to undertake an Urbanization Review for Burkina Faso – it is expected that this review will provide important inputs for future engagement with the Government on the urban sector. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 36. The relevance of the overall objective and design was substantial in the context of Burkina Faso’s overall development strategy and decentralization reforms, and remains substantial at project closure. The project objectives were aligned with and supported the Government’s 2004 Poverty Reduction Strategy Paper (PRSP) and the World Bank’s 2005 Country Assistance Strategy covering the period 2006-2009, particularly pillar four of the PRSP and CAS - “better governance with greater decentralization�. The project was also closely linked to the 2007-2009 Poverty Reduction Support Credits (PRSCs) series and the focus on promoting management of public resources and deepening decentralization reforms. Furthermore, as described in section 2, the project was aligned and built on lessons and reform dialogue under previous projects (including the Urban Environment Project). Finally, the project was aligned with the Africa Action Plan with regards to (i) Results Framework for Achieving Impact, (ii) Building Capable States and Increasing Transparency, and (iii) Drivers of Growth. However, the relevance of project design was somewhat reduced by the following factors that also appeared during implementation: (i) the complexity in institutional arrangements and large number of activities at multiple levels which contributed to somewhat uneven implementation, and (ii) lack of adjustment of the project in the light of the Government’s decision to drop the municipal contract approach and the other changes in specific areas (e.g. land titling, fiscal decentralization). While these factors affected the relevance of project design and implementation, the adjustments made in last two years of implementation (e.g. focusing on core activities, sustaining the FDPCT as financing mechanism for LGs) were sufficient to justify that the relevance of the project remains substantial. 7 With particular emphasis on strengthening the systems for fiscal decentralization. 11 3.2 Achievement of Project Development Objectives 37. The development objective of the project was to strengthen the delivery of urban services at the municipal level with special emphasis on Ouagadougou, Bobo-Dioulasso, Koudougou, Banfora, Ouahigouya and Kaya. Provided the discrepancy in the formulation of the PDO between various versions of the FA (see section 2.1 above) the PDO is assessed to have been achieved. The project accomplished tangible and concrete results through institutional gains and enhancement of the capacity of the municipalities (e.g. including increased revenue collection, completion of urban master plans), resulting in the strengthening of financed under FDPCT and benefitting the population of the six cities. 38. The two PDO indicators (i) share of budget spent on infrastructure investments and maintenance and (ii) increase in municipal revenue) have been achieved and the target values exceeded for all six cities (except for Ouahigouya and Kaya which did not meet the targets for increased revenue). Five out of eight intermediate indicators have been met - and for the remaining three, one activity was dropped (issuance of land permits) because the activity was included in an IFC operation8, and one was strongly affected by decisions made beyond the control of the project (indicator on CSI tax collection9). 39. With regards to strengthening of the capacity of the six municipalities, the project has achieved the following results: (i) all six cities have adopted and are using transparent, standardized, and efficient budget management procedures as specified in administrative management procedures manual10, (ii) street addressing has been completed at 89% in 2011 against an original target of 80%, (iii) six city contracts have been signed against 19 expected 11 , and (iv) municipalities’ budget allocations provided adequate infrastructure maintenance according to the rates listed in city contracts – average increases in budget spent on maintenance and infrastructure was more than 40% in 2011 (and has been consistently exceeding the baseline in this area), compared to the baseline.  Furthermore, the municipal audits revealed that, as a result of the capacity building efforts, the six municipalities have now taken ownership of the investment programming and maintenance processes, and have 8 As indicated above, the project did not conduct any activities aimed at securing land titles for citizens in the cities. These activities were not undertaken because they were already included in the “Doing Business� pilot program for 2007-2011. These activities focused specifically on the issue of registration of the procedures required by a business to purchase property from another business. This activity pertained to businesses and not private citizens seeking housing, but there was some overlap with regards to the planned pilot exercise for the issuance of occupancy permits. IFC’s results in this regard included: (i) the streamlining of procedures for obtaining a land title; and (ii) an increase in the number of land titles issued, from 11 in 2006 to 4,503 in 2011 nationwide, far exceeding the urban project’s target of 75 percent. 9  As part of the comprehensive decentralization process adopted in 2007, the territorial borders of communes changed. Moreover, a significant number of taxpayers claiming to be part of the informal sector were transferred to the formal sector by the DGI, thereby considerably reducing the number of CSI taxpayers. The project target was therefore not met. However, by using the 2011 CSI collection rate as a basis for comparison, the exercise demonstrated that over a three year period, CSI collection increased between 18% (Ouagadougou) and more than 110% (Ouahigouya), except two specific cases: Kaya and Banfora. 10 Following the effective implementation, the manual has been rolled out nationwide and all 351 urban and rural communes of the country are now using the manual. 11 This was a result of the phasing out of the municipal contract approach in 2010 following the introduction of the FDPCT. The remaining 13 cities did not develop contracts because they had benefitted from the reform of the fiscal transfer system which provided them with direct transfers. 12 assumed responsibility for the identification of their own capacity-building and municipal administration needs. 40. The combined approach of expanding street addressing and enhancing tax collection has contributed to an overall improved performance and has improved local revenue collection, as reflected in the increase of overall municipal revenue in the 6 target cities from a total of 8.34m CFAF (approximately US$16.5m) at project start to a total of 17.32m CFAF (approximately US$ 34m) by completion. The project activities have contributed significantly to increases in revenue (e.g. through introduction of street addressing systems and updating of tax registries and conducting of tax censes) – but no detailed assessment has been completed to determine to what extent the increase in revenue can be attributed specifically to the activities financed by the project. 41. With regards to the specific objective of strengthening the delivery of urban services, there is evidence that all six cities were able to consistently expand the provision of services through the construction and maintenance of urban infrastructure. Urban infrastructure investment projects (mainly in urban roads, education infrastructure, markets, drainages, and health clinics) for a total of more than US$ 13m were delivered between 2008 and 2010 (refer annex 2) 12 . No data has been provided for the completion of additional services between 2011 and 2012, but given that the FDPCT was providing financing in this period, including to the six urban LGs, the additional expansion and delivery of services is assumed to have taken place. 42. At the national level, the project contributed to strengthening the capacity of key national stakeholders and institutions involved in supporting municipalities in their effort to provide services to their populations, as evidenced in the respective accomplishments of: (i) the Ministry of Housing and Urban Planning (MHU), with the development of thirteen urban master plans (SDAUs) and an urban database as planning and space management instruments for urban LGs, and the deepening of operational public-private partnerships as a result of strategic consultations in the public housing sector; (ii) the Ministry of Territorial Administration and Decentralization (MATD), which received equipment and various management tools (software, procedures manuals, technical guides, budget preparation framework, and several staff capacity-building exercises; (iii) the Ministry of Economy and Finance (MEF), with improved collection of local taxes coupled with the street addressing activities through the development and implementation of tools for identifying and collecting local taxes, and new financial guidelines which was extended to all local governments; and (iv) the Association of Municipalities of Burkina Faso (AMBF), with completion of street addressing activities for the cities. The project was also effective in providing capacity support at the central level aiming at supporting the municipalities through training, courses, 12 The data on service delivery improvements was provided as part of the municipal contract approach applied from 2008-2010. The data represents the investments made financed within the municipal contract framework, and therefore does not include all investments in all of the cities (e.g. cities may have financed additional infrastructure using own source revenue funds and other resources received directly from development partners). It is important to note that service delivery improvements can appear in different sub sectors in each city deepening on the priority of the city as the FDPCT is largely a discretionary grant. 13 and financing of goods provided to the MATD, Ministry of Finance and Budget (MFB), MHU and AMBF. 43. With respect to strengthening financial mechanism that support decentralization and local service delivery (as per component 2), the project contributed to the operationalization of the FPDCT (hiring of the director was one of the conditions for project effectiveness, and the project also provided support with infrastructure and the preparation of documents and tools for FDPCT operations). The project was successful in leveraging Government financing of the FDPCT – total allocations approved by Government amounted to US$30 million for investment financing of municipal contracts for the period 2008-2010, and subsequently in transfers. The FPDCT is still financed by Government and several development partners as evidenced in the contributions to the FDPCT in 2012 which included substantial contributions from development partners. 44. In addition, the project has contributed to the following results: (a) the development of a software that integrates national and local finances (CICT) (b) the development of a classification, updating and consolidation of financial statements for local government expenditures (NPJ - nomenclature des pièces justificatives)13, (c) setting up of an “Urban Information System� to be managed by national and local governments, (d) the consolidation of the solid waste management system in Ouagadougou and Bobo-Dioulasso, which began under the Bank’s last urban project, Urban Environment Project (PACVU), (e) support for housing and urban policy implementation, (f) support for setting up a “Strategic plan for financing of social housing�, and (g) establishment of a Public-Private Partnership (PPP) arrangement for social housing production. 45. Finally, an analysis of the performance of Government with regards to budget support triggers related to decentralization under PRSC 7-11 indicate that Government demonstrated its overall commitment to reforms by complying with triggers associated with decentralization, including three triggers linked to the objectives of the project (highlighted in bold below). However, the annual contributions from Government to the FDPCT were somewhat lower than envisaged due to the fact that Government was required to make other budget priorities and that the PRSCs did not allow for ring-fencing the financing provided for FDPCT. 13 These two tools (CICT and NPJ) have eventually benefitted all the local governments in the country. 14 Burkina Faso PRSCs – Pillar III : Improving access to basic social services through greater decentralization and strengthened institutional capacity PRSC 7 Implementation of roadmap to meet water and sanitation MDGs Fulfilled Transfer of responsibilities and resources to municipalities and regions Fulfilled Preparation of City Contracts for the six main cities Fulfilled PRSC 8 Fulfilled Transfer of responsibility for pre-schools and primary schools facilities to the 49 Fulfilled Municipalities Transfer of ownership of the real estate assets of health facilities to the 49 Fulfilled Municipalities Implementation of strategy to maintain new water points and transfer of 25 water Fulfilled piped systems to rural municipalities Strengthening of decentralized budget management procedures Fulfilled PRSC 9 Fulfilled • Decentralization in basic education through financial transfers to Fulfilled 49municipalities and the transfer of investment funds • Decentralization in water and sanitation through the signature of operation Fulfilled protocols for the management of the transferred services • Financing economic and social infrastructure projects in four Fulfilled municipalities beyond Ouagadougou and Bobo-Dioulasso Source: PRSC 7-11 ICR, pp 4-5 46. Based on the analysis above, the ICR rates the overall achievement of the PDO as moderately satisfactory. 3.3 Efficiency 47. At the design stage, the PAD clarified that ERR and cost benefit analyses are not applicable for this type of project in which the investments are for services at the national and local level (training, studies, and goods). Therefore, two main focus areas can be applied to assess the efficiency of the project: (a) project costs and (b) core thematic areas relevant for return to investment (as identified in the PAD): (i) better performing LGs and public administration to mobilize and manage resources for better service delivery to the population; (ii) improved fiduciary environment, and (ii) improvement of transparency and accountability of the fiscal transfer mechanisms. 48. With regards to project costs, an assessment of the utilization of resources under the project indicates that the costs of services and goods were reasonable and comparable to costs of similar activities in other projects in the country. Due diligence was ensured in the procurement processes under the project resulting in acceptable costs for goods and services provided. None of the components had significant cost overruns, and the overall level of utilization of resources was less than 90% of the total credit. The revenues of all six municipalities almost doubled in period from the project baseline to project completion. 15 49. With regards to three intended thematic areas listed as a measurement for efficiency in the PAD, it can be concluded that all three were achieved efficiently, demonstrating relevant returns to investments made under the project: (i) Better performing urban LGs and public administration to mobilize and manage resources for better service delivery: increased revenues and share of budget spent on maintenance and investments and improvements in the general performance of the LGs as evidenced in the municipal contract evaluations. (ii) Improved fiduciary environment: (a) introduction of financial management (FM) standards, regulations and guidelines for all LGs resulting in improvements in performance, (b) introduction of relevant software leading to the integration of LG financial management with those of central government agencies, and improved accountability due to the fact that the Mayor, the Controller and the internal auditor are connected to the same computer network, and real-time knowledge of the level of processing any financial records, (c) improved classification of expense vouchers, which applies to all local authorities in the country, and (d) roll out of revenue ratios has been systematized and is assisting LGs in determining and projection annual local revenues. (iii) Improvement of transparency and accountability of the fiscal transfer mechanisms: (a) the project contributed to the operationalization of the FPDCT equipment, development and dissemination of management tools and staff training, and institutional support for the setup of the FDPCT,  leading to institutionalization of a dedicated transfer mechanism to local governments and (b) beyond the project, the FPDCT has been consolidated and has become a mainstream grant mechanism funded partially by Government, partially by DPs. 50. Based on the findings above, the project is assessed to have achieved an acceptable and adequate level of efficiency. 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory 51. The overall project outcome is rated Moderately Satisfactory. The project remains substantially relevant in the context of the overall decentralization reforms in Burkina Faso. Overall project efficacy was moderately satisfactory. The PDO indicators were met (and in some cases, targets were exceeded). The project also provided crucial input into the reforms across several different sub sectors, including on (i) revenue collection, (ii) FM, (iii) completion of city specific tools and instruments (street addressing, urban master plans), and strengthening of key institutions involved in oversight and management of the decentralization process. 52. While no cost benefit analysis conducted due to the nature of the design and project investments, the project was efficient and the costs overall were reasonable and comparable to similar costs. The project accomplished to improved efficiency in the three areas as set out in the design. 16 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 53. The project did not include particular emphasis on poverty, gender or social development. No tracking survey or study was completed to assess the number and characteristics of the beneficiaries of the investment projects implemented at LG level. (b) Institutional Change/Strengthening 54. The project contributed to institutional strengthening of the LGs (particular with regards to revenue collection and FM) and of the national institutions involved in oversight and management of decentralization reforms through the provision of training and technical assistance. The main achievements with regards to institutional change were: (i) the assistance that the project provided to national institutions in setting up and operationalizing the FDPCT, (ii) the strengthening of the regulatory framework for financial management at LG level through the development and roll out of standardized software, guidelines and regulations for all LGs in the country, and (iii) the completion of urban planning tools (including the urban master plans, setting up of street addressing units at LG level, and rolling out the integrated local accounts system (CICT) to all LGs) which resulted in significant strengthening of the management and organizational capacity of LGs. (c) Other Unintended Outcomes and Impacts (positive or negative) N/A 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops N/A 4. Assessment of Risk to Development Outcome Rating: Moderate 55. The risks to maintaining the development outcome as well as the risks for the decentralized framework for service delivery are rated as moderate. The main threats to the outcomes are with regards to (i) capacity constraints (operational, human resources and staffing, and technical) at LG level, (ii) sustainability of the coordination and oversight mechanisms set up by the project at national level, and (iii) sudden policy changes (including if government financing of FDPCT reduces). The risks have been mitigated by the following achievements: (i) the consolidation of FDPCT as a financing instrument for LGs which has ensured that the LGs have access to stable and predictable resources financed in the national budget supplemented by development partners, (ii) the improvements with regards to the institutional and legal framework for coordination and management of decentralization and urban development, and (iii) the relative improvements in capacity at LG level which at this point should be sufficient for the six cities to manage and maintain the assets provided. 17 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory. 56. The project was designed as a sectoral investment project financed by IDA, was reconfigured to be aligned with the World Bank’s new Poverty Reduction Support Credits (PRSC 7-9) for Burkina Faso, which supported the Poverty Reduction Strategy Paper (PRSP). The objectives were aligned with the 2006–2009 Country Assistance Strategy and consistent with the decentralization and urban development context. Considerable preparation time including an extensive policy dialogue with the Government and local governments helped ensure agreement on the measures selected and the political commitments to be made, including the arrangements for FDPCT and Government co- financing. The project was also aligned with other Bank operations, including the PRSCs and the Municipal Capacity Building Project. 57. However, the institutional set up of the project (including project management and coordination) involving a high number of implementing entities and stakeholders in a emerging institutional environment combined with the multiplicity of activities covering a wide range of sub sectors and topics, and the administrative, technical and logistical implications of such a setup was not sufficiently assessed as part of appraisal – e.g. with regards to convening power of the PCU and the coordination and technical capacities of different ministries. Moreover, the financing agreement did not explicitly identify the modalities for covering the project’s operating costs, and it did not reflect the contribution from the Government mentioned in the PAD. Lastly, with respect to the results framework, the choice of indicators, some of which were beyond the project’s direct scope of influence, did not facilitate their full achievement, and the focus in the PDO on service delivery was not justified based on the project components that focused on technical assistance and capacity building. (b) Quality of Supervision Rating: Moderately Satisfactory. 58. The Bank provided support to project implementation through day-to-day support from the Burkina Country office and through a total of eight supervision missions with sufficient and qualified personnel as required. Recommendations provided in aide memoires were relevant, highlighting the project’s operational constraints and suggesting the most suitable methods of resolving them. Overall, the team proved responsive to the problems that arose during project execution and collaborated in a positive manner to resolve them. Implementation support was somewhat less consistent in the last two years of the project – only three formal missions were completed during the last two years of implementation, although this was a time in which new activities were implemented and other activities had been dropped. In parallel with the project, the role of the World Bank team was instrumental in developing the budget support triggers that would advance the decentralization agenda, 18 including working closely with Government on the establishment and effective provision of budget resources to the FPDCT. 59. Implementation support was somewhat affected by the frequent change of Task Team Leaders – a total of four TTLs were involved during the life of the project between preparation and closure. These changes contributed to reducing the continuity with respect to the monitoring of activities and dialogue with the client. Also, in a few cases, a few delays were noted with regards to the Bank response on client requests. (c) Justification of Rating for Overall Bank Performance Rating: Based on the observations above, the overall performance of the World Bank is rated Moderately Satisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory. 60. The Government demonstrated considerable commitment overall to achieving the project’s development objectives as well as a strong will to assume ownership of institutional framework—together with a new framework characterized by the priority accorded to budget support—and to executing the project without parallel units. Among other factors, the implementation efforts of the CGCT in December 2004, the establishment of the urban planning ministry in 2006, and the creation and financing of the FPDCT are clear indicators of this commitment. The establishment of the FDPCT contributed significantly to the achievement of the project’s objectives. 61. However, there were also shortfalls in Government performance. The counterpart funding agreed in the PAD was not fully provided (only 23% of the financing committed). This affected operational costs and resulted in the need for restructuring of the project. Ownership of and clarity about the project’s institutional framework was not always obvious among the implementing agencies, in view of the recurring delays in the preparation of terms of reference for activities, procurement and contract management, and the validation of evaluation reports, among other areas. At the institutional level, the project suffered from inadequate support from the three ministries involved in the project’s official committees and high turnover of staff. The steering committee often lacked the authority to support the actions of the technical implementing units of the ministries involved, as well as with respect to the tasks related to adoption of the action plans within the required timeframes. The committee was affected by irregularity of meetings and the frequent changes of members. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory. 62. Project Coordination Unit (PCU). The PCU was able to convene regular steering committee meetings and oversee project implementation. However, based on the project 19 implementation challenges, the PCU’s technical and managerial capacities were not fully commensurate with the complexity of the project’s institutional framework and the large number of implementing agencies. One reason for the limitation in performance was the lack of a signed implementation agreement between the oversight ministry and the other ministries involved in the project. This agreement could have clarified the roles and responsibilities for the implementing agencies. Moreover, the PCU did not benefit from the projected technical assistance from the MATD over time. Although it contributed significantly to the holding of regular meetings of the project entities, the PCU had consistent challenges with regards to effective project management, including procurement, financial management, and overall coordination of activities. The performance of the PCU is rated Moderately Satisfactory. 63. Ministries involved in the project (MEF, MATD, MHU). The ministries were responsible for preparing, implementing, and evaluating activities related to each agency. The ministries took on these responsibilities and the associated roles effectively, but with recurrent delays with regards to implementation of activities. The delays were also caused by challenges with regards to contract management in terms supervision of service providers and validation of intermediate reports. The performance of the ministries is rated moderately satisfactory. 64. Permanent Development Fund for Local Governments (FPDCT). The activities entrusted to the FPDCT were all completed. The FDPCT was able to provide financing for investments for six urban LGs, for a total sum of US$ 30 million (2008-2010) via the Treasury, through budget allocations from the Government. The FDPCT did, however, encounter limitations and constraints associated with the slow pace of disbursements to LGs and the quality of monitoring of municipal contracts (inadequate infrastructure maintenance by the LGs). The performance of the FPDCT is rated Satisfactory. 65. Association of Municipalities of Burkina Faso (AMBF). Despite some delays in the first two years of implementation, the AMBF completed almost all its planned activities. The performance of the AMBF is rated Satisfactory. (c) Justification of Rating for Overall Borrower Performance Rating: Based on the findings above, the overall performance of the Borrower is rated Moderately Satisfactory. 6. Lessons Learned 66. Linking capacity building and budget support processes to provide financing for local investment and enhance reforms requires strong selectivity in areas of intervention and a clear institutional framework for implementation. Implementation of a project exclusively focused on capacity building and technical assistance requires choosing a limited number of high-impact activities and linking these activities to obvious and realistic results at national and local level. The project could potentially have achieved more by focusing on narrower element of the decentralization and urban reform agenda – e.g. (i) assisting Government in 20 designing a comprehensive intergovernmental fiscal framework and thus focusing on fiscal decentralization beyond the FDPCT itself or (ii) by working directly on strengthening the delivery capacity of LGs by expanding the access to training and developing minimum standards for human resources at LG level, and thus contributing systematically to administrative decentralization. 67. Mainstreaming project management responsibility in government entities with the support of a small coordination team may be a positive innovation, but requires consistent and rigorous implementation support. Without adequate implementation support including management of the implementation delays, systematic efforts to address coordination challenges and targeted actions to speed up procurement, it may be difficult to make project activities an integral part of the normal activities of the beneficiary ministries and entities in a low capacity environment. 68. Readiness of activities, implementing stakeholders and substantial Bank support in initial stages of implementation is critical for effective implementation projects with complex institutional arrangements. The development of terms of reference and/or the preparation of bidding documents during project preparation could have reduced implementation delays. 69. Advancing policy dialogue and reforms through combination of budget support and standalone operations can be effective in achieving reform gains. However, the changing context of such reforms require a flexible, adaptive, and proactive approach in which targets and priority areas are carefully selected, regularly reviewed, and, if necessary, revised. Furthermore, the impact of reform and capacity building activities requires time to materialize. 70. Designing and implementing a stand-alone capacity building project requires clear incentives, goals and institutional frameworks. In order to succeed, activities must be linked to management frameworks, daily operational procedures, and organizational targets of the beneficiary institution. The global lesson on capacity support to LGs is that supply driven exercises are rarely effective in creating enhanced performance unless they are linked with a system of incentives (e.g. performance based contracting for staff or grants to LGs). 71. The application of Technical Assistance Loans may be better justified and manageable in a short to medium term policy reform area with tangible and timely outputs. Given the broad reform context at the time of design, the Bank could have considered applying an APL to enhance the strategic focus and sequencing of reform priority areas, and make financing dependent on specific areas of progress (similar to a DPL series)14.           14 In fact, the Local Government Support Project currently under implementation in Burkina has applied an APL approach – although also with a considerably larger resource envelope (US$ 150m in total). 21 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies - N/A 22 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (USD (USD millions) Appraisal millions) Total Baseline Cost 9.91 10.15 102% Price Contingencies 0.09 0.00 0.00 Total Project Costs 10.00 10.15 101% Total Financing Required 10.00 8.36 84% (b) Financing Appraisal Actual/Latest Type of Estimate Estimate Percentage of Source of Funds Cofinancing (USD (USD Appraisal millions) millions) Borrower Co funding 0.4 0.09 23% International Development 10.00 8.36 84% Association (IDA) 23 Annex 2. Outputs by Component Summary of the outputs of Component 1: Municipal Support Program Activities Outputs Comments Subcomponent 1.1: Strengthening programming and urban management capacity Municipal audits for the six  Six municipal contracts (CDV) signed and The combined main urban municipalities implemented over the 2008-2010 period; findings of the for the first generation of  Thirty-nine (39) focus reports (urban audits, municipal audits municipal contracts, financial audits and organizational audits) for and the evaluation updating the audits for a the regional capitals of the municipal second generation of  Thirteen (13) general municipal audit reports contracts form a municipal contracts, and for the regional capitals good basis for subsequent audits for the  One (1) methodological guide on conducting additional remaining regional capitals municipal audits interventions  Fifty (50) municipal department managers addressing gaps trained on the methodological guide on and areas of municipal audits improvement for  Nine (9) national consultants trained on the each of the LGs methodological guide on municipal audits Updating or developing city  Twelve (12) satellite photos covering the  The photos plans and satellite photos of thirteen (13) regional capitals purchased 12 regional capitals, with the  Two satellite imagery processing software consolidate the exception of Ouagadougou licenses urban database  Ten (10) Ministry of Housing and Urban  The photos Planning (MHU) managers trained on the purchased were satellite imagery processing software used to develop urban master plans (SDAU) for the regional capitals Evaluation and updating of  The Urban Information System was updated  Data sharing the Urban Information for the cities of Ouagadougou and Bobo- procedures were System (UIS), and linking it Dioulasso (study report available) defined in the to the collection of the public  The Ministry of Housing and Urban Planning study report, but land use tax (Taxe de (MHU) has an updated tool for urban data the new system Jouissance) management is not yet operational 24 Completing and  Full street addressing for the cities of Banfora The street consolidating the and Koudougou addressing data implementation of the street  Additional street addressing for the other cities were used for the addressing system where it (Bobo-Dioulasso, Kaya, Ouagadougou and tax census exists, conducting full street Ouahigouya) conducted in the addressing operations in  Some one hundred street addressing unit six (6) recipient Banfora and Koudougou, managers trained on street addressing cities and a study for the techniques for the six cities implementation of street  IT and street addressing equipment purchased addressing in the remaining for the six cities’ street addressing units seven regional capitals  Street addressing databases set up in the six cities  Updating and printing of the city plans  Skills and capacity building on street addressing database maintenance and updating for street addressing unit managers; they are now equipped to be able to conduct future street addressing operations in the cities concerned Activities Outputs Comments Training for the municipal Training of more than 200 municipal department These outputs departments and elected managers trained on public project and program improved the officials monitoring & evaluation and results-based skills of the management, general public procurement recipient managers regulations and public service procurement, and built the urban and municipal management, and on fiscal municipalities’ strategy instruments capacities. Baseline study on solid waste management in the cities of Ouagadougou and Bobo-Dioulasso Consolidating the solid (study report), Action plan and recommendations waste management systems for improvements to the solid waste management in Ouagadougou and Bobo- systems in the cities of Ouagadougou and Bobo- Dioulasso Dioulasso (study report), Monitoring report on the implementation of the recommendations Supporting the identification Eight (8) training sessions on social project These outputs of community-based projects management, and 100 municipal managers and improved the included in the PIPs elected officials trained on social project skills of the management recipient managers and built the municipalities’ capacities to prepare, conduct and manage local investments. 25 Providing logistical support IT equipment and office furniture and This equipment to the six targeted equipment were purchased for the municipal built the municipal municipalities (furniture, departments of the project’s six recipient departments’ office and IT equipment) municipalities operational capacities and improved the quality of the services provided to the general public Supporting the development The activities planned (assist the municipalities and monitoring of the with the preparation and implementation of the Priority Maintenance PMPs) were not carried out. Programs (PMP) Activities Outputs Comments Subcomponent 1.2: Strengthening Financial Resource Mobilization Support to the (i) Over one hundred census takers mobilized The evaluation of implementation of residence (recruited and trained) to conduct the tax census, the results of the tax in Ouagadougou and (ii) IT and miscellaneous equipment purchased tax census found a Bobo-Dioulasso and for the departments in charge of collecting sharp increase in extension of support to the residence tax and the Informal Sector collection of cities of Kaya, Banfora, Contribution (CSI) tax, (iii) CSI application revenues. Koudougou and Ouahigouya software updating, settings and user training , (iv) Street addressing expert mobilized to help Support to the Informal the General Tax Directorate (DGI) manage and Sector Contribution (CSI) supervise the tax census operations  tax collection chain Subcomponent 1.3: Strengthening administrative and financial management of the municipalities (i)Software for the integrated local government accounts system (CICT), (ii) Ten managers from the Directorate General for the Treasury and Public Accounting (DGTCP) and several others Computerization of from the municipality of Ouagadougou trained municipal financial on the CICT software, (iii) Training of municipal management and training managers (authorizing officers and accountants) and other actors involved in the municipal spending chain (budget, treasury and financial control), (iv) Deployment of the software in the six Decentralized Urban Capacity Building Project (PRD) recipient municipalities 26 Activities Outputs Comments  Diagnostic report on economic infrastructure management Diagnostic of economic  Action plan to build municipalities’ infrastructure management economic infrastructure management and support to improve the capacities revenues generated by these  Economic infrastructure management infrastructures monitoring and self-evaluation tools  Purchase of IT equipment for the municipal departments in charge of economic infrastructure management  Nomenclature of local government  Adoption of the NPJ- bookkeeping vouchers (NPJ-CT) CT by Joint Order Development of training (revenue and expenditure) drawn up, No. 2009- modules on budget printed and disseminated 257/MEF/MATD of preparation and financial  NPJ-CT user manual drafted, printed and July 15, 2009 analysis, workshops and on- disseminated followed by its site training, and design of a  Financial circuit actors from Burkina implementation in all budget preparation and Faso’s 49 urban LGs trained on the NPJ- 531 urban and rural financial management CT and its user manual municipalities manual  These outputs improved the regulatory framework for local government financial management and built the capacities of the central and devolved Ministry of Economy and Finance entities to conduct their support tasks – advice to local authorities Additional activities Assistance to the disseminate Preparation of documents subsequent to These outputs brought and imp-implement new Directive No. 01/2011/CM/UEMOA: the regulatory directive on the financial budget preparation and execution procedure framework for local system for local government guide, authorizing officer’s guide, tax government financial collector’s guide management into line with the subregional community provisions Summary of the outputs of Component 2: Support to decentralized urban development institutions and stakeholders Activities Outputs Comments Subcomponent 2.1: Support to financial transfer mechanisms to fund local government investments 27 Periodic technical assistance (i)Local finance database management to the Ministry of Territorial software, (ii) Twenty MATDS and regional  Improvement of Administration and managers trained on the local finance knowledge on the Decentralization (MATD) to database management software, (iii) local authorities’ set up the Local Finance Devolution plan for the local finance financial situation Observatory and publish an database management system, (iv) Local  Better fiscal annual finance ratio guide government finance ratio guides completed management visibility for 1995-2006, 2007 and 2008, (v) IT at local government equipment for the MATDS for the local level finance database, (vi) Preparation of an analytic report on the financial situation of the local authorities for the 2006-2010 period, (vii) Printing and dissemination of the 2008 and 2009 local government finance ratio guides Support to establish the (i)IT equipment and office furniture and These outputs helped instruments and procedures equipment for the Permanent Development make the FPDCT for the Permanent Fund for Local Governments (FPDCT), (ii) operational and embed Development Fund for Local FPDCT tools and procedures (technical the FDPCT in the local Governments (FPDCT), procedures manual, financing code, rules of investment financing including logistics, training procedure, M&E system, budgetary system under direct and communication accounts plan, website, communication management by the strategy, and management software local authorities package), (iii) A reference document on sustainable financing for the FPDCT, endorsed by all the stakeholders, (iv) A report on M&E system training for staff and managers in the regional agencies, (v) Purchase of a software package for the FPDCT, (vi) Development of a sustainable financing mechanism for the FPDCT, (vii) FPDCT M&E system training for staff and managers in the regional offices 28 Activities Outputs Comments Subcomponent 2.2: Urban planning Modification and (i)IT equipment to monitor the urban master Ownership by the simplification of the plans (SDAU), (ii) Final report on the urban recipients and local preparation process and master plans (SDAU) for the 12 regional stakeholders due to content of urban master capitals their close involvement plans (SDAU), and support in the different stages to the Ministry of Housing of the development and and Urban Planning (MHU) approval process via discussion forums, focus workshops and regional workshops Support for specific (i)Strategy for safeguarding public land Three social housing activities of the national reserves in the municipality of Bobo- construction housing policy and strategy Dioulasso, (ii) Strategic plan to fund social agreements were signed for safeguarding public land housing, (iii) Regulatory framework for the with private promoters reserves, including the public-private partnership to fund social development of a strategic housing, (iv)Study report on setting up self- plan for the Caisses build assistance, (v)Purchase of equipment Populaires in the social for the self-build assistance bureau, housing sector (vi)Development of a strategic plan to fund social housing  The study on Establishing a local Equipment for the Ministry of Economy and developing the economic development Finance (Directorate General for Regional database management observatory at the Ministry Planning and Local and Regional software for the urban of Economy and Development – DGAT-DLR) to set up the economic Development (MEDEV) to urban economic development observatory. development support secondary city observatory was not development conducted due to the consultant’s failure to deliver. This prevented the urban economic development observatory from becoming operational. 29 Activities Outputs Comments Subcomponent 2.3: Institutional strengthening Training and logistical (i)Equipment for the (MATDS entities in Outputs contributed to support to the Directorate charge of local government support and building the operational General for Local consultancy, (ii) General Code of Local capacities of the Government (DGCL) and Government drafted and 5,000 copies MATDS entities in permanent secretariat of the circulated, (iii) Four hundred (400) officials terms of local Ministry of Territorial graduated from the National Magistrate government support Administration and School, trained in local government and consultancy Decentralization (MATD) operations, (iv) One (1) catalogue on municipality management irregularities drafted and disseminated to local authorities Implementation of and Four (4) managers trained in the following These outputs helped training on national M&E areas: Operational planning and project improve the recipient systems for all regional control, Project and program monitoring & managers’ expertise capitals, MATD, Ministry of evaluation, Urban development and build operational Finance and Budget (MFB), management capacities in local Ministry of Economy and government support Development (MEDEV) and Ministry of Housing and Urban Planning (MHU), including surveys to monitor results and evaluations of impact on beneficiaries Support to the Association of (i)IT equipment and office equipment and The actions conducted Municipalities of Burkina furniture for the Executive Secretariat and helped build the Faso (AMBF) to carry out the Permanent Secretariats (regional agency AMBF’s capacities in training programs and offices), (ii) Some 15 managers from the assisting local implement street addressing AMBF permanent secretariats trained in authorities and local government operations and the promoting principles of inter-municipal cooperation, intermunicipal (iii) Training sessions held as part of the cooperation AMBF strategic plan (training for local elected officials), (iv) Some 100 local elected officials trained under the AMBF strategic training plan, (v) A simplified procedures manual, (vi) A management software program and training for four (4) AMBF managers Private sector training (i)Four (4) training sessions held for private sector construction and civil engineering operators (at least 200 participants), (ii) Structural A&D software for the Ministry of Housing and Urban Planning (MHU), (iii) Sixty civil engineers trained on structural A&D software Additional activities 30 Basic documents (organizational and Support to the Ministry of forward-looking study, analysis of Housing and Urban Planning operations for the first five (5) years of the (MHU) to set up an urban urban development fund (FAU), draft development fund (FAU) regulations, draft organization chart, and draft establishment decree) to be used to assist in establishing the urban development fund Activities Outputs Comments Ownership of the new  Printing of 5,000 information packs on implementation texts on the the new legislation adopted by the General Code of Local Council of Ministers Government (CGCT), Act No. 055 and Act No. 027 Build the MATDS’s  MATDS managers trained in strategic planning capacities for sector and operational planning, drafting reports policy ownership and activity programs Build the capacities of the  Purchase of folders for the supervision of MATDS and the individual local government officials’ municipalities in local dossiers government human resources  Reports on the support-consultancy management missions to the local authorities on human resources management Support to the Directorate  Report on the workshop to examine the General for Regional basic documents on the national regional Planning and specialization policy and the national Decentralization Assistance policy to promote regional investments (DGAT-AD) to finalize the national regional specialization policy and the national policy to promote regional investments Build the MHU’s planning  Report on the MHU manager training capacities for sector policy workshop on planning tools (strategic ownership planning, operational planning, financial planning, procurement, and operating procedures for the municipal technical departments) Summary of the outputs of Component 3: Information-communication project management, monitoring, and evaluation Activities Outputs Comments/Initial impacts Subcomponent 3.1: Project management and coordination National technical assistance Regular project monitoring reports (PMT contract staff) to the MATD departments involved in project 31 management PMT equipment IT equipment, office equipment and Information technology, furniture, and logistical means for the office equipment, and project management team logistical means to manage the project PMT operations Minutes of the committee meetings Project steering committee meetings Financing of operating expenses for the project team Technical assistance to the One (1) report on assistance to the project project implementing entities implementing entities Short-term assistance to ministries and municipalities to carry out their tasks Advanced training for PMT The PMT managers were given training on: managers  Urban development management Provision for participation of  Results-based management key staff in relevant  Operational planning and project workshops and training monitoring & evaluation  Procurement  Advanced management software modules Subcomponent 3.2: Project monitoring and evaluation Seminars and workshops Workshops at project launch, Report on the launch workshop mid-term review and closure Evaluation of municipal  One (01) methodological guide on In addition to the contracts (CDV) municipal contract (CDV) evaluation municipal contract Evaluation of municipal  Evaluation methodology training for (CDV) implementation contracts and regular twenty-six (26) managers (managers lessons learned, implementation progress from the Ministry of Territorial evaluation findings workshops Administration, Decentralization and could be used to Security (MATDS), particularly the develop and implement Directorate General for Regional a second generation Government (DGCT), the Permanent municipal contract Development Fund for Local (CDV). Governments (FPDCT) and the Directorate for Assessment and Forward Planning (DEP) as well as the municipal departments of Banfora, Bobo-Dioulasso, Kaya, Koudougou, Ouagadougou and Ouahigouya)  Six (6) self-evaluation reports on the implementation of the municipal contracts (CDV)  One (1) evaluation report on the implementation of the municipal contracts (CDV) 32 Activities Outputs Comments/Initial impacts Technical assistance Technical assistance for regular project monitoring and evaluation (support mission) Information and One full-page insertion in Les Annales du communication on the Premier Ministre in 2009 and 2010 project Communication, publication and dissemination of project outcomes Subcomponent 3.3: Regular audits  Unqualified audit opinions for four of Audits of project financial Five (5) audit reports on the project’s five financial years’ statements financial statements accounts Annual financial audits of project accounts 33 Municipal Contract Outputs (service delivery) by Local Governments – 2008-2010 Investment type Project Description Cost (USD) Banfora Urban Road Construction, asphalting and traffic lights 770'000 2008 Banfora Education – Class One level building with 8 classrooms, 161'864 2009 Rooms Municipal school Hema Fadouah Commercial Bus station 426,048 infrastructure Banfora Urban roads "Mamadou Kone Street"asphalting and 292,545 2010 drainage Education - One level building with 8 classrooms 155,610 infrastructure Commercial Construction of city's new market 533,509 infrastructure Community projects Unspecified. 142,400 Rainwater drainage Main drains construction 955,374 Bobo Urban land Paving of public squares: "Ouezzin 1'042'667 2008 management Coulibaly" square and Hospital square Construction of a Junction 370,399 Urban land Construction of traffic circle 870,310 management Bobo Urban Roads Urban Roads Rehabilitation : "Sakidi 395'816 2009 Sanon", "Avenue de la Nation" Avenue de la liberte' Street rehabilitation Urban Roads Roads improvements (upgrading of unpaved 1'061'589 roads) Health and Upgrading of infrastructure in Bobo- 41,232 education Dioulasso Health center wall fence (Bolomakote) 13,018 Library wall fence rehabilitation 94,406 Wall fence rehabilitation : "Women house", 122,905 Health center, school Crossing structure construction on "5.11" 17'628 Street Civil engineering Bridge construction between two subareas - 119'438 structure (Signoghin - Boulmiougou) Kaya 2008 Investment type Project Description Cost (USD) Sanitation Main drain construction 338,762 Education Grammar school extension 114,574 Education Construction of a Grammar school 57'437 34 laboratory Kaya 2009 Rainwater drainage Primary and secondary gutters construction 329'609 Koudougou Health 229,768 2008 Dental and ophthalmological clinic Sanitation Main drains construction. 2300m 378,601 Commercial Feasibility and technical study 489,000 infrastructure Market Koudougou Rainwater drainage Feasibility and technical study for gutters 21,946 2009 Ouagadougou Urban street "Avenue du progrès" construction and 1,562,187 2008 asphalting "19.30" and "17.32"streets construction and 1'466'051 asphalting Administrative Municipal archive building construction 637,987 building Ouagadougou Civil engineering Bridge construction 535,647 2009 structure Municipal library Municipal library construction 792,741 Administrative A three level building construction 760,245 building extensible to five levels Urban roads "30.02" street construction and asphalting 1,347,300 "22.72", "24.32",24.45" streets construction 1,669,653 Ouahigouya Education One level building for Municipal grammar 156,742 2008 infrastructure school Municipal school laboratory construction 85,523 Urban roads Construction and asphalting of market's road 543,528 Ouahigouya Education Classrooms building and school furniture 118,533 2009 infrastructure supply Social infrastructure One day-nursery construction in the 76,109 Civil engineering Construction of crossing 179,655 structure Health Two community clinics construction 78,802 infrastructure Education Classrooms 201,942 infrastructure 35 Annex 3. Economic and Financial Analysis Based on the overall information available for this ICR, the project is assessed to have achieved an acceptable and adequate level of efficiency. The PAD clarified that ERR and cost benefit analyses are not applicable for this type of project in which the investments are mainly for services at the national and local level (training, studies, and goods). Instead, the PAD pointed to three areas relevant for return to investment: (i) better performing LGs and public administration to mobilize and manage resources for better service delivery to the population; (ii) improved fiduciary environment, and (ii) improvement of transparency and accountability of the fiscal transfer mechanisms. Based on the achievement of the PDO indicators and the additional information provided earlier, it can concluded that all three intended objectives were achieved efficiently, demonstrating relevant returns to investments made under the project: (i) Better performing LGs and public administration to mobilize and manage resources for better service delivery: increased revenues and share of budget spent on maintenance and investments and improvements in the general performance of the LGs as evidenced in the municipal contract evaluations, (ii) Improved fiduciary environment: (a) introduction of financial management (FM) standards, regulations and guidelines for all LGs resulting in improvements in performance, (b) the introduction of relevant software leading to the integration of LG financial management with those of central government agencies, and improved accountability due to the fact that the Mayor, the Controller and the internal auditor and are connected to the same computer network, and real-time knowledge of the level of processing any financial records, (c) improved classification of expense vouchers, which applies to all local authorities in the country, and (d) the introduction of revenue ratios has been systematized and is assisting LGs in determining and projection annual local revenues. (iii) Improvement of transparency and accountability of the fiscal transfer mechanisms: (a) the project contributed to the operationalization of the FPDCT equipment, development and dissemination of management tools and staff training, and institutional support for the setup of the FDPCT, leading to institutionalization of a dedicated transfer mechanism to local governments and (b) beyond the project, the FPDCT has been consolidated and has become a mainstream grant mechanism funded partially by Government, partially by DPs. In addition to this, a review of the utilization of resources under the project indicates that the costs of services and goods were reasonable and comparable to costs of similar activities in other projects. Due diligence was ensured in the procurement processes under the project resulting in acceptable costs for goods and services provided. None of the components had significant cost overruns, and the overall utilization of resources was less than 90% of the credit. The revenues of all six municipalities almost doubled in period from the project baseline to project completion results. 36 Annex 4. Bank Lending and Implementation Support (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Francoise Brunet Consultant AFTSE Alicia B. Casalis Consultant AFTU1 Wolfgang M. T. Chadab Senior Finance Officer CTRLA William Dakpo Procurement Specialist AFTPE Sylvie Debomy Sr Urban Planner LCSDU Ousseynou Diop Sr Water & Sanitation Spec. TWIAF Yvette Laure Djachechi Senior Social Development Spec AFTCS Christian Vang Eghoff Consultant AFTU2 Catherine D. Farvacque- Lead Urban Specialist WBIUR Vitkovic C. Fallert Kessides Manager WBIUR Remi Kini Senior Environmental Economist AES Paul Kriss Sector Leader LCSSD Robert Maurer Lead Urban Sector Specialist MNSUR Lance Morrell Consultant IEGPS Eustache Ouayoro Country Director AFCC2 Robert A. Robelus Consultant AFTN2 Aguiratou Savadogo-Tinto Sr Transport. Spec. AFTU2 Mamady Souare Infrastructure Specialist AFTTR Amal Talbi Sr Water & Sanitation Spec. AFTN2 Armele Vilceus Senior Program Assistant LCC3C Mamadou Yaro Sr Financial Management Spec. AFTME Aissata Z. Zerbo Procurement Specialist AFTU2 Supervision/ICR Elisabeth Marie Bambara Program Assistant AFMBF Begnadehi Claude Bationo Operations Officer AFMBF William Dakpo Procurement Specialist AFTPE Sylvie Debomy Sr Urban Planner LCSDU Ningayo Charles Donang Senior Procurement Specialist AFTPW ICR Primary Abdoulaye Kane E T Consultant AFTU2 Author Kolie Ousmane Maurice Sr Financial Management AFTMW Megnan Specialist Aguiratou Savadogo-Tinto Sr Transport. Specialist AFTU2 Mamata Tiendrebeogo Procurement Specialist AFTPW 37 Armele Vilceus Senior Program Assistant LCC3C Sr Financial Management Mamadou Yaro AFTME Specialist Aissata Z. Zerbo Procurement Specialist AFTU2 Jonas Ingemann Parby Urban Specialist AFTU2 ICR Team Leader (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY04 6.37 39.81 FY05 9.73 67.85 FY06 24.24 121.57 FY07 30.39 169.88 FY08 14.69 64.32 Total: 85.42 463.43 Supervision/ICR FY09 19.50 66.90 FY10 20.50 115.62 FY11 21.54 113.34 FY12 17.01 95.05 FY13 10.85 46.68 Total: 89.40 437.59 38 Annex 5. Beneficiary Survey Results N/A 39 Annex 6. Stakeholder Workshop Report and Results N/A 40 Annex 7. Summary of Borrower's ICR 1. Introduction 1. The Decentralized Urban Capacity Building Project [Projet pôles régionaux de développement PRD] was granted under Financing Agreement No. 4311-BUR for a sum of SDR 6,700,000 (US$10,000,000 or CFAF 5,000,000,000 equivalent). The Agreement was signed between Burkina Faso and the International Development Association (IDA) on June 22, 2007. It came into effect on November 30, 2007 and was closed on January 31, 2013.   2. Context 2. At the time of project identification and preparation in 2007, urban poverty had virtually doubled from 10.4 percent in 1994 to 19.9 percent in 2003, despite Burkina Faso’s relatively high economic growth in the early 1980s.This rise in poverty concerned mainly the secondary urban centers and more particularly the five (5) major regional capitals (Banfora, Bobo-Dioulasso, Kaya, Koudougou, and Ouahigouya), which accounted for over 25 percent of the national urban population, but suffered from poor urban service quality.   3. The decentralization process was firmly launched with: (i) the 2004 adoption of Act No. 55-2004/AN on the General Code of Local Government (CGCT); (ii) the establishment of a full local and regional government set-up in 2006 with thirteen (13) regions, forty-nine (49) urban municipalities and three hundred and two (302) rural municipalities; (iii) the establishment of two mechanisms to raise the levels of financial transfers to local government: firstly, the granting of direct subsidies to cover local government operating and capital expenditure (Dotation Générale d ’Equipement (DGE) and Dotation Générale de Fonctionnement’ (DGF)); and secondly, the creation of the Permanent Development Fund for Local Governments (FPDCT), established by Article 141 of the General Code of Local Government (CGCT) on funding local government infrastructure investments.   4. In this context, the Decentralized Urban Capacity Building Project (PRD) was identified and prepared to support the decentralization process and help find solutions to the main urban capacity building problems in Burkina Faso, i.e.: (i) poor ability to plan and program urban development rationally and harmoniously; (ii) lack of basic urban infrastructures and facilities; (iii) the poor institutional capacities of the municipalities, the central administrative bodies and other actors to support decentralization and urban development; (iv) local and central budget problems with raising enough financial resources to gradually meet the needs to improve urban services; and (v) poor housing conditions.   5. The Decentralized Urban Capacity Building Project (PRD) was part of the government’s strategy defined in the World Bank’s Poverty Reduction Strategy Paper (PRSP) drawn up in 2004 and the Country Assistance Strategy (CAS) for the 2006-2009 period. It was based on an innovative approach, which combined various forms of 41 institutional support to the municipalities and urban actors, funded from IDA resources, with a national mechanism to finance priority municipal investments. The national mechanism operated by means of municipal contracts between central government and urban municipalities. These municipal contracts covered investments, priority maintenance work, and municipal capacity building actions. The recipient entities were moreover responsible for implementing the activities that concerned them, with the management team supervising and coordinating with a small team of staff.   3. Project objectives 6. The project’s initial development objective was to, “build the capacities of the urban municipalities to provide their populations with infrastructures and services, with special emphasis on the six main municipalities (Banfora, Bobo-Dioulasso, Kaya, Koudougou, Ouagadougou, and Ouahigouya)�. 4. Revised objectives 7. The development objective was not revised during project implementation. 5. Project components and activities 8. The project was initially made up of three (3) components and thirty-seven (37) activities, with each of the three components comprising three subcomponents. Component 1: Municipal Support Program Subcomponent 1.1: Strengthening programming and urban management capacity Activities: (i) municipal audits for the six (6) main urban municipalities for the first generation of municipal contracts; (ii) purchasing satellite photos of twelve (12) regional capitals with the exception of Ouagadougou, and updating or developing city plans; (iii) evaluating and updating the Urban Information System (UIS); (iv) completing and consolidating the street addressing system in the cities; (v) training for the municipal departments and elected officials; (vi) consolidating the solid waste management systems in Ouagadougou and Bobo-Dioulasso; (vii) supporting the identification of community- based projects included in the Priority Investments Programs (PIP); (viii) providing logistical support to the six municipalities (furniture, office and IT equipment); (ix) supporting the development and monitoring of the Priority Maintenance Programs (PMP); and (x) supporting municipal contract management. Subcomponent 1.2: Strengthening financial resource mobilization Activities: (i) support to the implementation of residence tax in Ouagadougou and Bobo- Dioulasso, and extension of support to the cities of Kaya, Banfora, Koudougou and Ouahigouya; (ii) improvements to the collection of the informal sector contribution tax 42 [Contribution du Secteur Informel CSI] in Ouagadougou and Bobo-Dioulasso, and tax census in Kaya, Banfora, Koudougou and Ouahigouya. Subcomponent 1.3: Strengthening administrative and financial management of the municipalities Activities: (i) computerization of financial management and training; (ii) diagnostic of economic infrastructure management and support to the improvement of revenues generated by these infrastructures; and (iii) developing of training modules on budget preparation and financial analysis. Component 2: Support to decentralized urban development institutions and stakeholders Subcomponent 2.1: Support to financial transfer mechanisms to fund local government investments Activities: (i) Preparation of a comprehensive review of the financial framework for decentralization and monitoring; (ii) periodic technical assistance to the Ministry of Territorial Administration and Decentralization [Ministère de l'Administration Territoriale et de la Décentralisation MATD] to set up the Local Finance Observatory and publish an annual finance ratio guide; and (iii) support to establish the instruments and procedures for the Permanent Development Fund for Local Governments [Fonds Permanent de Développement des Collectivités Territoriales FPDCT], including logistics, training and communication. Subcomponent 2.2: Urban planning Activities: (i) modification and simplification of the preparation process and content of urban master plans (SDAU) and support to the Ministry of Housing and Urban Planning (MHU); (ii) support to the implementation of specific activities of the national housing policy and strategy for safeguarding public land reserves, including the development of a strategic plan for the Caisses Populaires in the social housing sector and support to the MHU; (iii) extending the pilot operation on issuance of land ownership documents (PUH and TF); and (iv) establishing an observatory of local economic development to support the development of the secondary cities. Subcomponent 2.3: Institutional strengthening Activities: (i) training and logistical support to the Directorate General for Local Government [Direction Générale des Collectivités Locales DGCL 15 ] and permanent secretariat of the Ministry of Territorial Administration and Decentralization (MATD); 15 Now the Directorate General for Regional Government [Direction Générale des Collectivités Territoriales DGCT] 43 (ii) implementation of and training on national M&E systems for all regional capitals, MATD, Ministry of Finance and Budget [Ministère des Finances et du Budget MFB], Ministry of Economy and Development [Ministère de l’Economie et du Développement MEDEV]16 and Ministry of Housing and Urban Planning (MHU), including surveys to monitor results and evaluations of impact on beneficiaries; (iii) support to the Association of Municipalities of Burkina Faso (AMBF) to carry out training programs and implement street addressing; and (iv) private sector training. Component 3: Information-communication project management, monitoring, and evaluation Subcomponent 3.1: Project management Activities: (i) technical assistance to the MATD departments involved in project management; (ii) equipping the MATD with information technology and office equipment, and logistical means to manage the project; (iii) operating expenses for the project team; (iv) organization of quarterly steering committee meetings; (v) short-term assistance to ministries and municipalities to carry out their tasks; and (vi) provision for the participation of key staff in relevant workshops and training. Subcomponent 3.2: Project monitoring and evaluation Activities: (i) workshops at project launch, mid-term review and project closure; (ii) evaluation of municipal contracts and regular implementation progress workshops; (iii) technical assistance for regular project monitoring and evaluation (support mission); and (iv) communication, publication and maximizing use of project experiences. Subcomponent 3.3: Audits Activity: (i) Annual financial audits of project accounts. 6. Revised components and activities 9. At the mid-term review in October 2010, the action plan for the second phase of the project was refocused on the activities underway and a small number of backbone activities with the potential to have sufficiently significant short-term effects and impacts to reach the targeted outputs by project closure; (i) improving tax revenues coupled with street addressing in the cities; (ii) steering and coordinating the preparation of the urban master plans (SDAU); (iii) publishing 2006-2007 local finance ratio guides; (iv) project coordination to ensure completion in keeping with the procedures in effect; and (v) continuing with technical assistance for project implementation. 16 At the time of project preparation, the Ministry of Economy and Finance (MEF) corresponded, in its current configuration, to the Ministry of Economy and Development (MEDEV) and the Ministry of Finance and Budget (MFB). 44 10. Project implementation programming was based on annual action plans put forward by recipient institutions. Activities other than those initially planned were approved mid-term either to consolidate the project’s initial accomplishments or to factor in changes to the decentralization policy. The following eight (8) additional activities were approved: (i) assistance to the Directorate General for the Treasury and Public Accounting/Directorate for Studies and Financial Legislation (DGTCP/DELF) and local government to take on board and own Directive No. 01/2011/CM/UEMOA of June 24, 2011 on the financial system for local government in WAEMU; (ii) support to the Ministry of Territorial Administration and Decentralization (MATD) to organize the administrative census in the municipalities of Bobo-Dioulasso and Ouagadougou; (iii) support to the Ministry of Housing and Urban Planning (MHU) to set up an urban development fund; (iv) build the MHU’s planning capacities for sector policy ownership; (v) create awareness on the regulations for Act No. 055 on the General Code of Local Government (CGCT) and Act No. 027 on the legal regulations applicable to local government jobs and staff; (vi) build the MATD’s planning capacities for sector policy ownership; (vii) build MATDS and municipality capacities in local government human resources management; and (viii) support to the Directorate General for Regional Planning and Decentralization Assistance (DGAT-AD) to finalize the national regional specialization policy and the national policy to promote regional investments. 11. The following activities included in the 2011 action plan and approved by the Steering Committee (SC) had to be cancelled: (i) municipal audit capacity building: workshop to endorse and adopt standard models for agreements/protocols between central government and local government; and (ii) information and communication on project outputs (publication and dissemination of mid-term results, and workshop to disseminate project outputs). 12. An amendment to the Financing Agreement signed on November 28, 2012 revised the credit allocation among the different expenditure categories. This amendment was driven by: (i) the need to post in the official budget the budget overrun generated by the real costs of the contract to develop the urban master plans (SDAU) for the 12 regional capitals, with the exception of Ouagadougou; and (ii) the need to correct a major omission from the Financing Agreement, which had prevented the authorization of certain project coordination team operating costs. 7. Evaluation of the project’s objectives 13. The development objective was realistic: given the prevailing environment when the project was identified and prepared, the development objective corresponded to problems that faced Burkina Faso’s decentralized urban development and that called for urgent solutions. 14. However, the development objective was too general and did not adequately map out the priority activities to facilitate programming. The following specific targets were hence adopted mid-term to resolve this shortcoming and smooth the way to achieve the 45 development objective: (i) help the municipalities take up the new infrastructure programming and implementation mechanisms by building their programming and urban and municipal management capacities; (ii) support central government’s financial transfer and assistance mechanisms for local government to finance local investments; and (iii) build the capacities of the urban and municipal management support structures and institutions and other actors to develop, implement and evaluate urban development strategies and programs.   15. The activities identified matched the sector’s urgent needs and their accomplishment was likely to make a strong contribution to the achievement of the development objective. 8. Achievement of project objectives and outputs The project outputs were satisfactory. 16. The development objective was achieved to a great extent. At project closure date, the targets set for the two development objective indicators (Indicator 1: share of municipal budget spent on infrastructure investments and maintenance; and Indicator 2: increase in current municipal revenues) had been reached and even improved upon. This is highly satisfactory. 17. As regards the specific targets, definite and far-reaching advances were observed with solving Burkina Faso’s main decentralized urban development problems, as they were identified at the project preparation stage. The Decentralized Urban Capacity Building Project (PRD) hence:  Largely strengthened urban development planning and programming capacities and developed suitable tools such as the urban master plans (SDAU) and urban audits, and largely shared them with ministry and urban municipality actors;  Created the conditions required for better quality urban management at the level of the municipalities and support institutions (ministries and Association of Municipalities of Burking Faso), driven mainly by: (i) considerable staff capacity building; (ii) provision of management tools and equipment (software, procedures manuals, technical guides, budgetary preparation framework, etc.); and (iii) development and introduction of local tax census and collection tools;  Made highly positive progress with financing decentralization. Strategic thinking was conducted on developing a medium-term financing framework for decentralization and proposal of a sustainable financing mechanism for the Permanent Development Fund for Local Governments (FPDCT). The FPDCT is up and running and even financed the priority investments for the six (6) cities targeted by the project under municipal contracts whose implementation is deemed satisfactory. The establishment of the municipal contract as a new contractual 46 arrangement came from a bottom-up approach to the identification of priority investments and mutual commitments by municipalities and the government;  Conducted a great deal of strategic thinking in the social housing sector and started to form partnerships to find suitable solutions for the national situation. 18. At closure date, the targets set had been achieved for five (5) of the eight (8) output indicators chosen for the project’s two operational components, representing an achievement rate of 62.50 percent. 19. Five (5) of the thirty-seven (37) activities initially programmed were not carried out. These were: (i) strengthening municipal contract management; (ii) supporting the development and implementation of the Priority Maintenance Programs (PMP); (iii) extending the pilot operation on issuing land ownership documents (PUH and TF); (iv) assistance to establish an observatory of local economic development at the Ministry of Economy and Development (MEDEV) to support the development of the secondary cities; (v) technical assistance for regular project monitoring and evaluation (support mission). 20. Three (3) of the eight (8) additional activities were completed, three (3) were conducted in part and two (2) were cancelled due to the project activity closure requirements. 21. Thirty-two (32) initial activities and six (6) additional activities were conducted, for an implementation rate of approximately 84 percent (38 activities conducted out of the 45 programmed). 22. The results obtained cover: (i) considerable building of municipal and support institution staff’s technical capacities; (ii) the availability of efficient urban development planning and programming tools; (iii) modern municipality management and urban development resources; (iv) better local tax collection and yield conditions; (v) a defined decentralization financing framework and operational financial transfer mechanisms; (vi) a framework conducive to the development of social housing. 9. Main factors influencing project implementation 23. Factors beyond the control of the Government and the implementing agencies: the sociopolitical situation at the beginning of 2011 prevented the launch of certain activities on schedule (preparation of the urban master plans (SDAU), support for the improvement of local tax collection, and street addressing). 24. Factors beyond the control of the coordination bodies (project management team): the inefficiency of the recipient entities in charge of the contract management tasks for the activities concerning them; the high turnover of managers supervising the activities and focal points in the implementing entities; the cumbersome national 47 procurement system and inadequate procurement capacities among staff in the technical implementing entities. 25. Factors generally within the Government’s control: inefficient operational arrangements (steering committee, technical committee, and focal points) prevented the central ministry departments from swiftly taking the project on board; long procurement lead-times due, among others, to a cumbersome national procurement system and duality in the implementation of World Bank procedures and national regulations. 26. Factors generally within the implementing agency’s control: tardy circulation of the basic project set-up documents and procedures; and a lack of direct liaison with the Directorate General for Public Procurement (DGMP) to anticipate and discuss procurement problems. 27. Factors generally within the implementing entities’ control: inadequate incorporation of project activities into the regular work schedule for the ministries concerned; and procurement and contract performance management shortcomings. 28. Factors generally within the IDA’s control: the negative impacts on disbursement speed of the transition launched in September 2011 from manual to electronic disbursement application processing; and the suspension of disbursements from July to November 2012, which gave rise to the amendment of the Financing Agreement in November 2012 following a freeze on activities for four (4) months. 10. World Bank performance World Bank project identification and preparation performance was satisfactory, and its performance in implementation supervision and monitoring was moderately satisfactory. 29. In general, the World Bank strongly supported the Decentralized Urban Capacity Building Project (PRD) identification and preparation actions, in particular by establishing a Project Preparation Fund for a sum of CFAF three hundred (300) million, used to conduct a detailed feasibility study. The Bank regularly conducted supervision missions, was attentive to problems that arose during the project’s implementation, and cooperated in a constructive manner to solve them. 30. Nevertheless, declarations of no-objection for draft annual action plans, terms of reference, requests for proposals (RFP) and bidding documents, as well as evaluations of proposals and bids, were slow in certain areas. The fact that four (4) different people held the position of project manager from project preparation to closure was hardly conducive to continuity in monitoring activities and making decisions. 48 11. Government performance Government project identification and preparation performance was satisfactory, and project implementation phase performance was moderately satisfactory. 31. The government and all the public institutions in the decentralization and urban development sector worked closely on feasibility study follow-up and validating its recommendations. The Government’s political commitment to making the Permanent Development Fund for Local Governments [Fonds Permanent de Développement des Collectivités Territoriales FPDCT] operational paved the way for the admittedly complex, but innovative project design, with its guarantee of financing for investments. The Government earmarked resources in the 2008 to 2010 budget acts, providing the PIP financing for the municipal contracts for the six (6) urban municipalities targeted by the project for a sum of approximately CFAF eighteen (18) billion. This was highly positive. 32. However, the conditions to bring the Financing Agreement into effect took longer than scheduled (over 5 months instead of 3 months), and there were also delays with putting in place all the project coordination team staff. The efficiency of the supervisory bodies suffered from frequent staff changes as administrative entities and positions were reorganized. 12. Project coordination body performance 33. This was satisfactory. Despite the complexity of the project’s operational set-up and the large number of implementing entities, the Project Management Team (PMT) put sufficient effort into its main brief of coordinating the implementation of activities. The PMT convened regular steering committee and technical committee meetings, and submitted the required financial monitoring reports (FMRs) to the World Bank. The project’s accounts audit reports were sent to the World Bank on time, with the exception of the report on the 2010 financial year, which was sent in October 2011. Nevertheless, by the time activities were launched, there had not been enough of a communication and information campaign on the project and its set-up. 13. Performance of the ministries concerned by the project 34. Performance was moderately satisfactory. Project ownership by the ministries concerned and especially the implementation entities was slow to get moving. This held up the actual launch of operational activities. Procurement lead-times were also long and study oversight was not very efficient. Many studies dragged on. 14. Performance of the Permanent Development Fund for Local Governments(FPDCT) 35. This was satisfactory for the tasks of both project manager and financing institution. The FPDCT satisfactorily managed large sums for local government via the 49 treasury. The fund transfer mechanism was operational, but hold-ups with the disbursement system caused implementation delays with certain projects. 15. Performance of the project’s recipient urban municipalities 36. Performance here was satisfactory. The municipalities adhered to the contractual mechanism represented by the municipal contract. They were sufficiently involved in the implementation of the activities managed by the ministries and the Association of Municipalities of Burkina Faso (AMBF) in terms of building capacities and developing tools for planning/programming and urban management. The municipalities obtained satisfactory results in the management of the implementation of the municipal contracts’ Priority Investments Programs (PIP). The poor results of the implementation of the Priority Maintenance Programs (PMP) were partly down to the municipalities, although they did not receive the program preparation assistance initially provided for. 16. Performance of the Association of Municipalities of Burkina Faso (AMBF) 37. This was satisfactory for the tasks of both project managers for the activities that directly concerned it and delegated project manager for the street addressing. The AMBF’s procurement capacities needed building, but all the activities assigned to it were implemented within a reasonable amount of time and have been totally completed since 2011. 17. Performance of the consultants, consulting firms and suppliers 38. This was moderately satisfactory in general. Many studies were not completed by the contractual deadlines and many reports were considered to be of poor quality. There were also many late deliveries on supply contracts and problems with non- compliance of delivered products. Some contracts were even terminated. 18. The most noteworthy positive lessons 39. A positive innovation was to make the ministries and other recipient bodies responsible as project managers of the activities that concerned them, with the support of a small coordination team in charge of full-time monitoring of implementation and supervision. 40. Project ownership was helped enormously by a more technical workshop than the project launch workshop, focused on the presentation and detailed review of the basic project documents and procedures, and restricted to the implementing entities only. 41. The effects of the low level of ownership of the actions by the implementing entities were mitigated by the institutionalization of regular (monthly) activity monitoring meetings. 50 42. As regards procurement and contract management, the Decentralized Urban Capacity Building Project [Projet pôles régionaux de développement PRD] was one of the first World Bank-financed projects to start using the new procurement system adopted by the Government in April 2008, wherein all actors were expressing new training needs. The concrete commitment of the project management team and the implementing entities was decisive in ensuring the implementation of the project activities. 19. The most noteworthy negative lessons 43. The absence of regular and adequate national counterpart funding to ensure the remuneration provided for by the national regulations, but not eligible for IDA credit financing, contributed a great deal to the project implementation problems. 44. The poor incorporation of the project activities into the work programs of the ministries and recipient institutions. 45. Project monitoring and evaluation was inadequately prepared at the launch of activities. At the end of the project, certain indicators’ definitions were amended to improve the reliability and quality of the data collected. 20. Sustaining project outputs 46. A certain number of actions have already been taken to sustain the PRD’s many urban management and programming outputs: (i) the inclusion in the 2013 budget of the resources required to extend the integrated local government accounts system (CICT) to all municipalities; and (ii) budgeting for the full cost of the street addressing units in the municipal budgets. These actions will obviously need to be consolidated. 47. Moreover, the relatively satisfactory outputs of municipal investment financing by the Permanent Development Fund for Local Governments (FPDCT) helped gradually bring on board other development partners to consolidate this mechanism. 48. The few abovementioned actions obviously need to be consolidated and scaled up. To this end, it will be useful to bear in mind the following points: (i) the importance of developing a municipal infrastructure maintenance culture to go hand in hand with investment financing; (ii) the final approval and implementation of the urban master plans (SDAU) developed by the project; and (iii) the continuation of the important local tax collection improvement actions launched by the project. 21. Suggestions to consolidate and sustain project outputs 49. With a view to sustaining and consolidating project outputs, it is suggested that a think tank be launched on preparing and implementing a new decentralized urban capacity building support operation, taking into account the actions and operations already underway and prioritizing all the regional capitals. 51 50. This future operation will be based on an innovative mechanism to support central government and municipal commitments to institution building (including raising tax revenues, financial transfers, and financial management), making priority investments and infrastructure maintenance. 52 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A 53 Annex 9. List of Supporting Documents DUCBP - Project Appraisal Document DUCBP – Financing Agreement DUCBP - Implementation Status and Results Reports Aide Memoires DUCBP - Restructuring Paper DUCBP - Amendment to the Development Credit Agreement Audit Technique des Exercises 2008-2011 Review Report of the Implementation of Municipal Contracts 2008-2011 M&E Consolidation Reports - DUCBP DCUBP – Implementation Completion Report (Government of Burkina Faso) 54 4°W 2°W 0° 2°E This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on OUDALAN the part of The World Bank Group, any judgment on the MALI legal status of any territory, or any endorsement or acceptance of such BURKINA FASO boundaries. SOUM LOROUM NIGER Dori 14°N To To Mopti SÉNO Niamey YATENGA ig N er Ouahigouya BAM SANMATENGA NAMENTENGA YAGHA To To Dosso San SOUROU ZONDOMA GNAGNA KOSSI Kaya Sirba To Ségou PASSORÉ KOURE- KOMONDJARI WÉOGO bi OUBRITENGA NAYALA ou or Ziniaré G Dédougou OUAGADOUGOU GANZOURGOU BANWA MOUHOUN Koudougou KADIOGO Vol Fada ta BOULKIEMDÉ N'Gourma Bla KOURITENGA SANGUIÉ TAPOA 12°N n 12°N Vo ch lta BAZÉGA GOURMA e e Ro ir Tenkodogo No ug ZIRO e Z BALÉ O Manga ta UN BOULGOU KOULPÉLOGO Vol KÉNÉDOUGOU DW KOMPIENGA HOUET ÉO TUI G NAOURI O To Bougouni Bobo- SISSILI BENIN IOBA To Dioulasso To To Parakou 0° Djougou 2°E Sokidé BOUGOURIBA B UR KI N A FAS O Banfora LÉRABA KOMOÉ PONI Gaoua To D ECENTRALIZ ED URBAN Tamale CAPACITY BUILD ING P ROJECT Komoé Volta Noire MAIN PROJECT CITIES 10°N NOUMBIEL OTHER REGIONAL CAPITALS GHANA PROVINCE CAPITALS To Bole TOGO NATIONAL CAPITAL 0 20 40 60 80 100 Kilometers RIVERS CÔTE D'IVOIRE MAIN ROADS IBRD 35395 MARCH 2007 0 20 40 60 80 Miles RAILROADS To Bouaké To Koutouba PROVINCE BOUNDARIES 4°W 2°W INTERNATIONAL BOUNDARIES