Document of
The World Bank
Report No:ICR00003665
(IDA-H8500)
ON A
GRANT
IN THE AMOUNT OF SDR 13.4 MILLION
(US$20 MILLION EQUIVALENT)
TO THE
KINGDOM OF LESOTHO
FOR A
FIRST GROWTH AND COMPETITIVENESS
DEVELOPMENT POLICY GRANT
December 19, 2016
Macroeconomics and Fiscal Management Global Practice
AFCS1
Africa Region
CURRENCY EQUIVALENTS
(Exchange Rate Effective as of June 30, 2014)
Currency Unit = Maloti
Maloti 1.00 = US$0.07
US$ 1.00 = 10.62Maloti
FISCAL YEAR
April 1 – March 31
ABBREVIATIONS AND ACRONYMS
AfDB / African Development BankAGOA / African Growth and Opportunity Act
AIDS / Acquired Immune Deficiency Syndrome
BEDCO / Basotho Enterprises Development Corporation
BoS / Bureau of Statistics
CAS / Country Assistance Strategy
DFID / Department for International Development from United Kingdom
DPO / Development Policy Operation
ECF / Extended Credit Facility
EU / European Union
FDI / Foreign Direct Investment
FIA / Financial Institutions Act
FIRST / Financial Sector Reform and Strengthening Initiative
GDP / Gross Domestic Product
GNI / Gross National Income
GoL / Government of Lesotho
GPOBA / Global Partnership for Output-Based Aid
GTZ / German Technical Corporation
HBS / Household Budget Survey
HIV / Human Immunodeficiency Virus
HMIS / Health Management Information Systems
HRH / Human Resources for Health
IBRD / International Bank for Reconstruction and Development
ICT / Information and Communication Technologies
IDA / International Development Association
IFMIS / Integrated Financial Management Information System
IMF / International Monetary Fund
LDHS / Labor and Demographic Health Survey
LNDC / Lesotho National Development Corporation
LRA / Lesotho Revenue Authority
MCC / Maseru City Council
MDA / Ministries, Departments and Agencies
MDGs / Millennium Development Goals
M&E / Monitoring and Evaluation
MDP / Ministry of Development Planning
MoF / Ministry of Finance
MoH / Ministry of Health
MoSD / Ministry of Social Development
MTEF / Medium-Term Expenditure Framework
NISSA / National Information System for Social Assistance
NPAB / National Planning Advisory Board
NSDP / National Strategic Development Plan
OBFC / One Stop Business Facilitation Center
PAF / Performance Assessment Framework
PEFA / Public Expenditure and Financial Accountability
PMT / Proxy Means Test
PPAD / Procurement Policy and Advice Division
PPP / Public/Private Partnerships
PSCEDP / Private Sector Competitiveness and Economic Diversification Project
PFM / Public Finance Management
PRS / Poverty Reduction Strategy
R&D / Research and Development
SACU / Southern African Customs Union
SADC / Southern African Development Community
SCD / Systematic Country Diagnostic
TVET / Technical and Vocational Education Training
Vice President: / Makhtar Diop
Country Director: / Catherine Signe Tovey
Senior Practice Director: / Carlos Felipe Jaramillo
Practice Manager: / Mark R. Thomas
Task Team Leader: / Asli Senkal
ICR Team Leader: / Asli Senkal
KINGDOM OF LESOTHO
First Growth and Competitiveness Development Policy Grant
Contents
A. Basic Information ii
B. Key Dates ii
C. Ratings Summary ii
D. Sector and Theme Codes iii
E. Bank Staff iii
F. Results Framework Analysis iii
G. Ratings of Program Performance in ISRs vi
H. Restructuring (if any) vii
1. Program Context, Development Objectives and Design 1
1.1 Context at Appraisal 1
1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved) 2
1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification 3
1.4 Original Policy Areas Supported by the Program (as approved) 3
1.5 Revised Policy Areas (if applicable) 5
1.6 Other significant changes 5
2. Key Factors Affecting Implementation and Outcomes 6
2.1 Program Performance (supported by a table derived from a policy matrix) 6
2.2 Major Factors Affecting Implementation: 7
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: 11
2.4 Expected Next Phase/Follow-up Operation (if any): 12
3. Assessment of Outcomes 12
3.1. Relevance of Objectives, Design and Implementation 12
3.2. Achievement of Program Development Objectives 13
3.3. Justification of Overall Outcome Rating 20
3.4. Overarching Themes, Other Outcomes and Impacts 20
3.5. Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 21
4. Assessment of Risk to Development Outcome 22
5. Assessment of Bank and Borrower Performance 23
5.1 Bank Performance 23
5.2 Borrower Performance 25
6. Lessons Learned 25
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners 26
MAP IBRD 33434R1 35
ANNEXES
Annex 1: Bank Lending and Implementation Support/Supervision Processes 27
Annex 2: Beneficiary Survey Results 28
Annex 3: Stakeholder Workshop Report and Results 29
Annex 4: Summary of Borrower's ICR and/or Comments on Draft ICR 30
Annex 5: Comments of Cofinanciers and Other Partners/Stakeholders 31
Annex 6: List of Supporting Documents 32
TABLES
Table 1: Prior Actions for First Growth and Competitiveness DPO 7
Table 2: Links between the DPO and Prior Analytical Work 9
v
A. Basic Information
Country: / Lesotho / Program Name: / LS- First Growth and Competitiveness DPGProgram ID: / P128573 / L/C/TF Number(s): / IDA-H8500
ICR Date: / 07/01/2016 / ICR Type: / Core ICR
Lending Instrument: / DPF / Borrower: / KINGDOM OF LESOTHO
Original Total Commitment: / XDR 13.40M / Disbursed Amount: / XDR 13.40M
Revised Amount: / XDR 13.40M
Implementing Agencies:
Ministry of Finance and Development Planning
Cofinanciers and Other External Partners:
B. Key Dates
Process / Date / Process / Original Date / Revised / Actual Date(s)Concept Review: / 01/17/2013 / Effectiveness:
Appraisal: / 04/08/2013 / Restructuring(s):
Approval: / 06/03/2013 / Mid-term Review: / 02/03/2014 / 03/31/2014
Closing: / 06/30/2014 / 06/30/2014
C. Ratings Summary
C.1 Performance Rating by ICROutcomes: / Moderately Unsatisfactory
Risk to Development Outcome: / High
Bank Performance: / Moderately Unsatisfactory
Borrower Performance: / Moderately Unsatisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank / Ratings / Borrower / Ratings
Quality at Entry: / Moderately Unsatisfactory / Government: / Moderately Unsatisfactory
Quality of Supervision: / Moderately Unsatisfactory / Implementing Agency/Agencies: / Not Applicable
Overall Bank Performance: / Moderately Unsatisfactory / Overall Borrower Performance: / Moderately Unsatisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation Performance / Indicators / QAG Assessments (if any) / Rating:
Potential Problem Program at any time (Yes/No): / No / Quality at Entry (QEA): / None
Problem Program at any time (Yes/No): / Yes / Quality of Supervision (QSA): / None
DO rating before Closing/Inactive status: / Moderately Unsatisfactory
D. Sector and Theme Codes
Original / ActualSector Code (as % of total Bank financing)
Central government administration / 60 / 60
General industry and trade sector / 20 / 20
Other social services / 20 / 20
Theme Code (as % of total Bank financing)
Economic statistics, modeling and forecasting / 20 / 20
Public expenditure, financial management and procurement / 40 / 40
Regulation and competition policy / 20 / 20
Social Protection and Labor Policy & Systems / 20 / 20
E. Bank Staff
Positions / At ICR / At ApprovalVice President: / Makhtar Diop / Makhtar Diop
Country Director: / Catherine Signe Tovey / Asad Alam
Sr. Practice Director / Carlos Felipe Jaramillo
Practice Manager: / Mark Roland Thomas / John Panzer
Program Team Leader: / Asli Senkal / Christian Yves Gonzalez Amador
ICR Team Leader: / Asli Senkal
ICR Primary Author: / Maria Teresa Benito-Spinetto
F. Results Framework Analysis
Program Development ObjectivesThe operation's development objective is to assist the Government in implementing a reform program aimed at promoting growth, competitiveness and public sector efficiency. The DPO supports progress towards the Country Assistance Strategy objectives of fiscal adjustment and public sector efficiency and enhanced competitiveness and diversification.
Revised Program Development ObjectivesProgram Development Objectives were not revised.
(a) PDO Indicator(s)Indicator / Baseline Value / Original Target Values (from approval documents) / Formally Revised Target Values / Actual Value Achieved at Completion or Target Years
Indicator 1 : / Number of sub-leases per year
Value
(quantitative or
Qualitative) / 8 / 64 / 10
Date achieved / 12/31/2012 / 01/01/2016 / 03/31/2016
Comments
(incl. %
achievement) / Not met. The number of sub-leases (which refers to land sub-leases), were 10 from April 1, 2015 to March 31, 2016, therefore not meeting the target.
Indicator 2 : / Number of days to obtain a construction permit
Value
(quantitative or
Qualitative) / 330 / 240 / 179
Date achieved / 12/31/2012 / 01/01/2016 / 01/01/2015
Comments
(incl. %
achievement) / Met (100%) The target was achieved earlier than expected. Per Doing Business 2015, it took 179 days to obtain a construction permit Since then, the time has remained constant per DB, 2016 and 2017 draft
Indicator 3 : / Number of days to register a firm
Value
(quantitative or
Qualitative) / 40 / 7 / 7
Date achieved / 12/31/2012 / 01/01/2016 / 01/01/2016
Comments
(incl. %
achievement) / Met (100%). Doing Business Report 2016 report that it takes 7 days to register a firm. Therefore, the target was met.
Indicator 4 : / Number of days required to obtain manufacturing and trading licenses
Value
(quantitative or
Qualitative) / 1-5 / 3 / 3
2 days to obtain an industrial license +1 day for trading license.
Date achieved / 12/31/2012 / 01/01/2016 / 06/01/2016
Comments
(incl. %
achievement) / Met (100%). Doing Business Reports 2014 and after do not measure this indicator any longer. However, the number of days that it takes to obtain an industrial license according to Director of Industry, is currently 2 days if there are no queries on the application. In addition, it takes 1 day to obtain a trading license.
Indicator 5 : / Number of days required for import clearance
Value
(quantitative or
Qualitative) / 4.5 days / 1 day / 7 hours
Date achieved / 12/31/2012 / 01/01/2016 / 01/01/2015
Comments
(incl. %
achievement) / Met (100%). DB Reports 2015 and 2016 measure this indicator in hours and separates the times to obtain Border Compliance and Documentary Compliance. Both added to 7 hours which was considered to be one day and therefore, the indicator was met.
Indicator 6 : / Number of days required for export clearance
Value
(quantitative or
Qualitative) / 4.7 days / 1 day / 7 hours
Date achieved / 12/31/2012 / 01/01/2016 / 06/02/2014
Comments
(incl. %
achievement) / Met (100%). The target was met earlier than expected. DB Reports for 2015 and 2016 measure this indicator in hours and separates the times to obtain Border Compliance and Documentary Compliance. Both added to 7 hours and therefore the indicator was judged met.
Indicator 7 : / Number of months delay in publishing the audit reports on public accounts
Value
(quantitative or
Qualitative) / 18 months / Zero (this is interpreted as less than one month) / 24 months for 2013/14 Public Accounts and over 12 months for 2014/15 Public Accounts
Date achieved / 12/31/2012 / 01/01/2016 / 9/31/2015
Comments
(incl. %
achievement) / Not Met The delay for the 2013/14 accounts was 24 months and for the 2014/15 accounts, 12 months, therefore, indicator was not met.
Indicator 8 : / Timely and reliable budget expenditure data from the Integrated Financial Management Information System (IFMIS).
Value
(quantitative or
Qualitative) / No quarterly expenditure reports reconciled from IFMIS / Zero delays / No quarterly expenditure reports reconciled from IFMIS
Date achieved / 12/31/2012 / 01/01/2016 / 06/10/2016
Comments
(incl. %
achievement) / Not Met By June 2014, still there weren't reconciled quarterly expenditure reports from IFMIS. Currently there are some reconciliation, but reports are not reliable. Therefore, this indicator is judged not met.
Indicator 9 : / Medium term budget policy statement and a medium term fiscal framework approved by Cabinet.
Value
(quantitative or
Qualitative) / Not approved by Cabinet / Approved by Cabinet / Informal approval by Cabinet
Date achieved / 12/31/2012 / 01/01/2016 / 06/15/2016
Comments
(incl. %
achievement) / Met. The Medium term budget policy and medium term fiscal framework are not approved by Cabinet separately. However, the budge ceilings which are approved by cabinet include a budget policy statement and MTFF Therefore, one can argue that the MTFF has implicitly been approved by Cabinet deeming this indicator as met.
Indicator 10 : / Number of waivers allowing non-competitive bidding approved
Value
(quantitative or
Qualitative) / 79 / 30 / 79
Date achieved / 12/31/2012 / 01/01/2016 / 06/30/2015
Comments
(incl. %
achievement) / Not met. The number of waivers allowing non-competitive biddings approved was 48 in June 2014, but went back to 79 by mid-2015 which is latest information available according to the register at the Ministry of Finance.
Indicator 11 : / Number of waivers allowing non-competitive bidding not approved
Value
(quantitative or
Qualitative) / 40 / 70 / 56
Date achieved / 12/31/2012 / 01/01/2016 / 03/31/2015
Comments
(incl. %
achievement) / Mostly met (80%). Number of waivers allowing non-competitive bidding not approved were 31 in June 2014, but increased to 56 by March 2015. Not further information is available.
Indicator 12 : / Number of households in NISSA reached through the Childs Grant Programme(CGP)
Value
(quantitative or
Qualitative) / 6,920 / 25,000 / 19,500 (April 1, 2014)
25,400 (End 2015)
Date achieved / 12/31/2012 / 01/01/2016 / 09/29/2015
Comments
(incl. %
achievement) / Met. Latest available data is that 25,400 children where reached. In April 2014 19,500 were reached. Therefore, indicator was achieved.
Indicator 13 : / Number of ministries using harmonized concepts and definitions
Value
(quantitative or
Qualitative) / Zero / 14 / Not available
Date achieved / 12/31/2012 / 01/01/2016 / 06/10/2016
Comments
(incl. %
achievement) / Not met. The BoS no longer follows up on the ministries’ progress on the usage of harmonized concepts and definitions. Therefore, the indicator is considered not met.
Indicator 14 : / Percentage of population issued with National ID cards
Value
(quantitative or
Qualitative) / Zero / 100 percent / 43% (April 2016)
Date achieved / 12/31/2012 / 01/01/2016 / 04/30/2014
Comments
(incl. %
achievement) / Partially met (43%). 43% of the population were issued National ID cards by April 2016. This program continues to be implemented.
(b) Intermediate Outcome Indicator(s)
Indicator / Baseline Value / Original Target Values (from approval documents) / Formally Revised Target Values / Actual Value Achieved at Completion or Target Years
G. Ratings of Program Performance in ISRs
No. / Date ISRArchived / DO / IP / Actual Disbursements
(USD millions)
1 / 05/03/2014 / Moderately Unsatisfactory / Moderately Unsatisfactory / 20.54
H. Restructuring
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