Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project Name PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE GUINEA: EDUCATION FOR ALL - ADDITIONAL FINANCING Region AFRICA Sector Education (100%) Project ID P111304 Borrower(s) REPUBLIC OF GUINEA Implementing Agency Ministry of Finance Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 27, 2008 Date of Appraisal September 26, 2008 Authorization Date of Board Approval October 30, 2008 Report No.: AB4094 1. Country and Sector Background Despite its rich natural resource endowments, Guinea is one of the poorest countries in the world ranking 156 th among the 177 listed countries in the UNDP Human Development Index. Poverty is widespread and has increased especially in urban areas (from 18 percent 24 percent) while rural poverty has decreased by 23 percent to 59 percent during the period 1994-2002. Through the proposed additional financing, the government intends to engage in major savings through stricter management of its personnel starting with education as the pioneer sector. This would entail the removal of ghost workers by reconciling the list of active staff certified by the Ministries with the staff on the records of the payroll department to make it more transparent and efficient. In Guinea, the quality and motivation of human resources especially teachers is a key problem which is exacerbated by an unreliable system of teacher payment and the absence of incentive mechanism to attract teachers to rural and remote communities. There is no clear division of responsibility among the various institutional stakeholders regarding the organization and management of human resources. For instance, the Ministry for Civil Service is in charge of recruiting civil servants and manages directly the departures in retirement. The Ministry of Finance (direction de la solde) is responsible for paying salaries for all personnel from the Ministry of Education based on the personnel listing provided by the Ministry of Civil Service. Although in theory these requests for recruitment, promotions, incentives, should be based on the available positions and budget as stipulated in the Loi des Finances, a rigorous system has not been put into practice. The human resources unit (direction des resources humaines) in the Ministry of Pre-university education is responsible for the administrative management of the personnel and collects school census data with complete personnel data on a yearly basis. The Government s education team has also developed its sectoral medium-term expenditure framework (MTEF), which constitutes an important step towards a more practical, results-based budget exercise. 1
2. Objectives The original objective as stated in the Development Credit Agreement (dated August 1, 2001) was to assist the Borrower in its efforts to implement the first phase of its Program, through the establishment of a sustainable framework for reaching high quality universal primary education in its territory. The revised project objective is as follows: to assist the Recipient in its efforts to improve the conditions for teaching and learning in its territory, through (i) expanded access to education, (ii) enhanced quality of learning, and (iii) strengthened capacity for decentralized management of the sector. The Additional Financing would complement component 3 by contributing to an uninterrupted delivery of education service by supporting the payment of salary expenditures and teacher incentives from November until December 2008. 3. Rationale for Bank Involvement In Guinea, the primary fiscal balance deteriorated in 2007 to 3.7 percent of GDP, compared with 1.5 percent in 2006. The primary fiscal deficit is projected to remain at that level in 2008 primarily due to the Government s decision to respond to the rise in international food and petroleum prices, in order to mitigate the impact on the most vulnerable groups. According to the IMF SR report EBS/07/140 (January 2008), a residual financial gap for 2008 was identified in the amount of 0.7 percent of GDP. To this end, the World Bank and other multilateral organizations committed their support to fill this gap through, among others, the US$10 million emergency operation in support of the food price crisis financed under the Global Food Crisis Response Program Trust Fund and the US$10 million additional financing to cover recurrent expenditures of the education sector. The interruption of teacher salary payment could in the short term jeopardize the beginning of the upcoming school year and, in the medium to long term, the achievement of project development goals such as: Access: If not properly addressed, non-payment of salaries can lead to increased teacher absenteeism and, as a result, decrease education access. Quality: A growing body of evidence supports the intuitive notion that teachers play a key role in what, how, and how much students learn. Recent research also indicates that teachers respond to incentives. The quality and motivation of teachers are a key problem in Guinea that is exacerbated by an unreliable payment of salaries and no incentive mechanism to attract teachers to rural and remote communities. Management: Irregular salary payments can lead to strikes that completely disrupt the functioning of the country s education system, as observed in the recent riots. By harmonizing the personnel databases from Finance and Civil Service and developing a system for eliminating ghost teachers, the proposed project would contribute to an important effort to improve the human resource and budgetary management in education and make it more transparent and efficient. Guinea is improving its public expenditure management and has developed a roadmap for generating significant savings through stricter personnel management, which would free up some resources to hire additional staff in the priority sectors (education and health). As part of 2
Guinea s medium term macroeconomic framework, the primary fiscal objectives are: (a) to increase government revenue and reorient expenditure toward the priority sectors, particularly those that affect the access of the poor to basic social services, and to the social safety net protecting vulnerable segments of the population; and (b) to bring the public debt service to a sustainable level. Guinea has recently benefited from a PRGF arrangement from the IMF and from additional HIPC assistance in December 2007. Reaching the HIPC Completion Point and the MDRI, and accessing related external debt relief will be key to reaching and maintaining debt sustainability. In December 2007, the Education for All-Fast Track Initiative Catalytic Fund allocated US$117.8 million to Guinea to support investment expenditures that will help the country to attain EFA targets, including those related to access and quality. The CF is estimated to become effective for disbursement by end of December 2008 and would cover the period of 2009-2011. The proposed additional financing would, therefore, be a bridge fund to pay teacher salaries for a smooth transition and ensure the positive impact of new investments in the sector. 4. Description The additional financing would complement Component 3 by contributing to an uninterrupted delivery of education service by strengthening the overall human resource and budgetary management. The US$10 million additional financing would contribute to the financing of primary and secondary education personnel salaries and incentives for teachers working in challenging and remote areas for a period of two months (November-December 2008). The financing of these recurrent expenditures is necessary to meet the development objectives of the project. Guinea s current Country Financing Parameters note that there is no country limit for recurrent costs (OP 6.00). 5. Financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) 10 Total 10 6. Implementation The Government of Guinea is committed to achieving the development objectives of the project as well as the objectives and targets of the Government s education program. The Government has demonstrated this commitment by increasing the budget share allocated to education from 11 percent in 2006 to 15 percent in 2008, and by developing an action plan laying out concrete steps for the improvement of human resources and budgetary management. Furthermore, the EFA-FTI partnership shows that donors remain committed to the education sector and to supporting Government s efforts to accelerate progress towards meeting the education Millennium Development Goals. 3
The implementation arrangements would be changed as the Ministry of Finance, the Ministry of Education, and the Ministry of Civil Service would carry the joint responsibility for implementing the project. The MOF processes transactions using a computerized financial management information system, from the administrative phase (commitment and payment authorization) through the accounting phase (payment and recording of transactions). It will also produce the financial statements of the Additional Financing that will be subject to audit. The Ministry of Civil Service and its IT department in particular will be responsible to maintain the computerized employee database and transmit it to the MOF/DNB (Direction Nationale du Budget) in charge of issuing warrant-listings of payroll. The Ministry of Education Statistical Unit is collecting detailed data on its personnel (central and decentralized levels) on an annual basis. It will be responsible for transmitting their updated administrative personnel database on time to the Ministry of Civil Service. The project coordination unit will continue to be responsible for managing the EFA project and specifically the monitoring and evaluation aspects of the project. The Additional Financing will not finance the totality of the education payroll for the months of November and December it will only finance the basic pay of primary and secondary education personnel (excluding the new salary increases), as well as incentives for teachers working in challenging and remote areas. Therefore, the MOF will need to isolate these expenditures within the education payroll, issue bank transfer orders for salary expenditures and teacher incentives to the central, regional and prefecture levels by extracting required information from payroll warrant listings. It will then produce financial reports focusing exclusively on Bank financed expenditure. This semi-automated data processing operation will be performed by the MOF IT directorate and the MOF/DNTCP (Direction Nationale du Trésor et de la Comptabilité Publique). The Additional Financing financial records and all the transactions shall be in accordance with the accounting guidelines in the legal PFM documents of Guinea. The financial statements prepared by the DNTCP will be audited by an independent external auditor acceptable to the Bank. The DNTCP will also prepare Interim Un-Audited Financial Reports (IFRs) as part of the reporting arrangements once the Additional Financing operation ends. A designated account will be set up at the Banque Centrale de la République de Guinée (BCRG) and will be managed by the MOF/ DNTCP. The US$ 10 million grant will be disbursed in one tranche and will support the salaries and incentives for the months of November and December 2008. IFRs would be used to request the one-tranche disbursement. The Bank team will continue its supervision and provide guidance and support to the MOF staff involved in the Additional Financing implementation and ensure that established financial procedures of the MOF are complied with at all times during the life of the project. 7. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ ] [ X] Natural Habitats (OP/BP 4.04) [ ] [ X ] Pest Management (OP 4.09) [ ] [ X] Physical Cultural Resources (OP/BP 4.11) [ ] [X ] 4
Involuntary Resettlement (OP/BP 4.12) [ ] [X ] Indigenous Peoples (OP/BP 4.10) [ ] [X ] Forests (OP/BP 4.36) [ ] [X ] Safety of Dams (OP/BP 4.37) [ ] [X ] Projects in Disputed Areas (OP/BP 7.60) * [ ] [X ] Projects on International Waterways (OP/BP 7.50) [ ] [X ] 8. Contact point Contact: Nathalie Lahire Title: Education Economist Tel: (202) 473-6874 Fax: (202) 473-8216 Email: nlahire@worldbank.org 9. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: pic@worldbank.org Web: http://www.worldbank.org/infoshop * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties claims on the disputed areas 5
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