## Managing Natural Resource Wealth Thematic Fund (MNRW) — FY22 Annual Report (Executive Summary and Phase II Results)

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### Program purpose and structure
- The Managing Natural Resource Wealth Thematic Fund (MNRW) is the primary external funding vehicle in the IMF for capacity development (CD) on economic policy management for natural resource rich low and lower-middle income countries.
- Current Phase II started in FY18 and will be completed at the end of FY24.
- MNRW organized by modules:
  - Module 1: Design and Implementation of extractive industries tax policy including fiscal modeling and revenue forecasting.
  - Module 2: Revenue administration of extractive industries.
  - Module 3: Macro-fiscal and public financial management.
  - Module 4: Monetary policy, exchange rate policy frameworks and macro-prudential frameworks.
  - Module 5: Economic statistics (completed by end of FY21).
- Multi-country training delivered via online, virtual, and in-person courses.

### Global developments, commodity dynamics, and sectoral implications
- Commodity price and investment context:
  - Commodity prices increased during the last year, most marked for fuel and energy (PNRG) due to supply disruptions following the Russian invasion of Ukraine and economic recovery from COVID-19.
  - Mineral prices have been rising more recently with increased volatility.
  - Near-term revenue outlook for natural resource producing countries improved because of higher prices.
  - Longer-term investment outlook centers on the energy transition:
    - Renewable energy expected to replace fossil fuel energy.
    - Natural gas plays a role as a transition fuel.
    - Mining expected to expand, especially for minerals critical to the energy transition (copper, cobalt, lithium, rare earth elements).
  - The war refocused attention on energy security and diversification, especially in Europe.

### Impact of COVID-19 on CD delivery and modalities
- Delivery challenges and adaptations:
  - Remote delivery fatigue impacted FY22 program delivery across many projects.
  - Key obstacles: connectivity issues, time-difference constraints, reduced ability to build in-person professional relationships.
  - Opportunities from remote delivery: continuous engagement via communication technologies, more agile responses, wider reuse of online/pre-recorded materials, and cost savings.
- Forward approach:
  - Expectation of increased in-country CD delivery in the coming fiscal year, tailored by country with hybrid modalities to preserve effective remote innovations while restoring in-person engagement where needed.

### Portfolio execution, spending, and financials (FY18–FY22; figures in thousands of U.S. dollars unless noted)
- Indicative Expenditure Envelope, per 2016 Program Document: 30,000
- Latest Approved Budget as of April 2022: 29,114
- FY18 Actual Expenses: 4,625
- FY19 Actual Expenses: 4,982
- FY20 Actual Expenses: 5,040
- FY21 Actual Expenses: 3,038
- FY22 Actual Expenses: 2,745
- Change FY22/FY21: -10%
- Actual Total Expenses (FY18–FY22): 20,430
- Trust Fund Management Fee — Latest Approved Budget: 1,905; FY18: 303; FY19: 326; FY20: 330; FY21: 199; FY22: 180; Actual Total: 1,337
- Direct Technical Assistance — Latest Approved Budget as of April 2022: 21,101; FY18: 2,724; FY19: 3,951; FY20: 3,649; FY21: 2,212; FY22: 1,834; Actual Total Expenses: 14,371; Execution (%) (active projects only): 68%
- FY22 expenditure: $2.7 million (reported as $2.7 million in Executive Summary; FY22 Actual Expenses: 2,745)
- Cumulative spending through April 2022: $20.4 million (Actual Total Expenses: 20,430)
- Approved project budgets (cumulative): $29.1 million (Latest Approved Budget: 29,114)

- MNRW approved work program allocations by module (reported figures):
  - Module 1: 6,145,000
  - Module 2: 6,052,000
  - Module 3: 4,866,000
  - Module 4: 1,875,000
  - Module 5: 2,163,000
  - Research: 1,260,000
  - Training: 4,246,000
  - Workshop: 289,000

- MNRW approved work program allocations by region (reported figures):
  - Africa: 14,158,000
  - Asia Pacific: 1,512,000
  - Middle East & Central Asia: 1,002,000
  - Western Hemisphere: 2,701,000

- Selected module-level latest approved budgets and FY22 outcomes (in thousands):
  - Module 1: Latest Approved Budget: 6,148; FY22 Actual Expenses: 589; Actual Total Expenses: 3,957; Change FY22/FY21: 2%
  - Module 2: Latest Approved Budget: 6,051; FY22 Actual Expenses: 487; Actual Total Expenses: 3,741; Change FY22/FY21: -23%
  - Module 3: Latest Approved Budget: 4,866; FY22 Actual Expenses: 599; Actual Total Expenses: 3,125; Change FY22/FY21: 14%
  - Module 4: Latest Approved Budget: 1,874; FY22 Actual Expenses: 110; Actual Total Expenses: 1,386; Change FY22/FY21: -63%
  - Module 5: Latest Approved Budget: 2,162; FY22 Actual Expenses: 50; Actual Total Expenses: 2,162; Change FY22/FY21: -73%

- Other budget lines (latest approved budget; FY22 actual; total):
  - Scoping Missions — 1,098; FY22: 455; Total: 1,007; Change FY22/FY21: 26%
  - Research Projects and Analytical Tools — 1,260; FY22: 160; Total: 949; Change FY22/FY21: -48%
  - Workshops & Training — 4,534; FY22: 265; Total: 3,164; Change FY22/FY21: -11%
  - Project Management — 1,121; FY22: 241; Total: 939; Change FY22/FY21: 33%

- Portfolio management notes:
  - With total approved project budgets of 29,114 (in thousands of U.S. dollars) as of end-April, the available funding has been almost fully committed.
  - Steering Committee guiding principles: flexible portfolio management, reallocating funding toward projects with continued demand and traction, scaling back or completing other projects.

### Selected FY22 project results — Module highlights and country outcomes
- Module 1 — Natural Resource Fiscal Regime:
  - Ghana: capacity development on petroleum revenue forecasting; quantitative modeling supported policy discussions on draft Extractive Industries Fiscal Regime Act; updated forecasting manual and model.
  - Mozambique: support on international tax issues for LNG projects; updated FARI LNG model; work on fiscal regime implementation and establishment of a sovereign wealth fund.
  - Sierra Leone: legal review identified remaining transitional and implementation issues for the Extractive Industries Revenue Act; CD to construct mining revenue forecasting model; project proposed extension until December 2024.
  - Uganda: review of petroleum legislation advising interaction between production sharing agreements and income tax; advice on petroleum valuation as oil project advanced; Final Investment Decision (FID) for Uganda Oil Project expected to unlock US$10 billion in investments.
  - Uzbekistan: draft natural resources fiscal regime progressed; policy guidance informing resource rent tax and royalty legislation; legislation on resource rent tax and new royalty rates applicable as of January 1, 2022.
  - Liberia, Chad, The Gambia: varied engagement with delays in some cases due to legislative or COVID constraints.

- Module 2 — Natural Resource Revenue Administration:
  - Guyana: oil and gas matrix completed by Guyana Revenue Authority; audit capacity strengthened through training and coaching.
  - Kenya: compliance improvement plan (CIP) for extractive industries further developed; next CD to focus on CIP implementation.
  - Liberia: enhanced understanding of international accounting standards for extractive industries; connectivity issues limited progress.
  - Mozambique: oil and gas risk matrix completed; sector-specific risk work commenced.
  - Nigeria: extractive industries skills gap assessment in the Federal Inland Revenue Service; training on Computer Assisted Audit Techniques (CAATs); skills development plan completed.
  - Sierra Leone: National Revenue Authority defined mining industry risks and gained audit risk-addressing capacity.
  - Uganda: capacity development on CAATs in mining; audit mentorship program; Customs review guidance.

- Module 3 — Macro-fiscal and PFM:
  - Bolivia: advice on medium-term fiscal framework (MTFF); STX treasury management visits delivered; authorities requested one-year project extension.
  - Democratic Republic of Congo: fiscal risk management practices improved; Fiscal Risks Statement (FRS) included in 2022 budget documents; PFM reform strategy adopted in November 2021.
  - Mauritania: petroleum revenue forecasting working group established.
  - Senegal: oil revenue management law passed in parliament; petroleum revenue forecasting framework refined.
  - Uganda: Charter for Fiscal Responsibility approved to guide oil revenue management over next 4 years.

- Module 4 — Exchange rate regimes and macro-prudential policies:
  - Multiple virtual missions: Guatemala (economic forecasting process), Philippines (central bank communication), Uganda (central bank transparency), Papua New Guinea (monetary policy framework and exchange rate arrangement).
  - Progress on TA handbook; portal to the TA handbook operational on the IMF website.
  - Note: MNRW funding for Module 4 will not be required going forward; Module 4 is ending as of end FY22.

### Multi-country training, FARI, research, and monitoring
- FARI tool and outreach:
  - Modernized simplified FARI tool published on revamped FARI homepage; supports English, French and Spanish.
  - April 2022: first of three FARI workshops for Central and West African francophone countries delivered — 81 people from 18 countries and 3 regional institutions participated; second workshop series planned for July 2022.
- Training delivery and participation:
  - Three 2-week synchronous courses (Macroeconomic Management in Resource-Rich Countries) delivered with 57 participants.
  - Asynchronous online courses attracted 1,964 active participants (incl. 634 from MNRW-TF eligible countries); 157 completed the courses.
  - Synchronous course participant rating: 4.5 / 5; asynchronous course rating: 4.7 / 5.
  - Almost 1/3 of participants in synchronous courses, and 1/6 of those in asynchronous courses, were female.
  - Online Energy Subsidy Reform course: 1,016 participants (17 percent female, incl. 293 from MNRW-TF eligible countries); 101 completed; rated 4.5 / 5.
- Results-based Monitoring (RBM):
  - Overall RBM performance assessed as satisfactory.
  - Average milestone rating corresponded to ‘largely achieved’.
  - Average outcome rating fell between ‘partially achieved’ and ‘largely achieved’.
  - More than 250 milestones for active projects; about 65 percent largely or fully achieved.
  - Approximately 100 outcomes; about half largely or fully achieved.
  - COVID-19 contributed to a significant number of projects in the ‘red’ area of outcome performance; many such projects were relaunched following resumption of travel (Bolivia M3, Liberia M1, Mozambique M1, Sierra Leone M1, Uganda M3).

### Selected key country- and program-level FY22 outcomes
- Dem. Rep. of Congo (M3): Improved FRS included in 2022 budget documents; revised regulation on MTBF Committee signed; Government adopted new PFM reform strategy; five out of seven milestones due fully achieved.
- Ghana (M1): Complete draft of the Extractives Industry Fiscal Act delivered; quantitative modeling on outstanding policy issues; ten out of thirteen milestones due fully achieved.
- Guyana (M2): Oil and gas risk matrix completed; staff upskilled in statutory interpretation for oil and gas sector.
- Kenya (M2): Draft compliance improvement plan developed; awaiting approval.
- Mauritania (M3): Revenue Forecasting Working Group established; corresponding milestone fully achieved.
- Nigeria (M1): National Assembly approved the Petroleum Industry Bill in July 2021.
- Uganda (M1/M2/M3): Desk review of petroleum taxation legislation and technical advice on petroleum valuation delivered (December 2021); URA staff upskilled in CAATs and audit mentorship program established; Charter for Fiscal Responsibility passed.
- Uzbekistan (M1): Legislation on resource rent tax and new royalty rates passed.

### Preliminary considerations for a potential MNRW Phase III
- Overarching context:
  - Country demand for CD on natural resource economic management remains strong, driven by the need to prepare for the energy transition and differential impacts by resource mix.
  - Linkages between climate change, energy transition and natural resources should provide the overarching context for a third phase.
- Scope and focus (within IMF remit):
  - CD to center on economic management of natural resources to provide benefits for current and future generations.
  - Primary focus areas: collection, management, and usage of revenues from natural resource extraction, coordinated with other CD programs (e.g., the RMTF).
  - Framing to incorporate climate change and energy transition considerations.
- Proposed thematic emphases:
  - Tax Policy: continue fiscal regime design and implementation (mining and petroleum); extend FARI methodology scope to environmental and carbon taxation related to extractive industries and possibly tax policy for renewable energy.
  - Revenue Administration: build capacity for collecting resource revenue (mining and petroleum), auditing and compliance; integrate support into countries’ overall tax administration strategies where functions are fragmented.
  - Macro-fiscal and PFM: manage resource revenue through macro-fiscal frameworks guiding savings-investment decisions and budget integration; for fossil-fuel-dependent countries, emphasize climate-related investments for diversification.
- Country coverage and eligibility:
  - Consider expanding coverage to all low- and middle-income countries with current or potential natural resource extraction (adding upper middle-income countries).
  - Project eligibility should require that main CD activity focus directly relates to economic management of natural resources (a substantive eligibility test).
- Modular options (retained with refinements):
  - Option 1: Focus on natural resource revenue mobilization combining Modules 1 and 2; broaden to carbon and environmental taxes coordinating with RMTF.
  - Option 2: Include revenue mobilization (Modules 1 and 2) and extend CD to natural resource revenue management (macro-fiscal policy and PFM).
  - Option 3: Retain fiscal management focus (Modules 1, 2 and 3) and extend training and other CD from ICD in macroeconomic management of natural resources.

### Financial update and workplan status (as of April 30, 2022)
- Pledges: US$27.97 million against a budget of US$30 million.
- Contributions received from donor partners as of April 30, 2022: US$27.54 million.
- Interest earned: US$0.71 million.
- Transfers from Phase I: US$1.08 million.
- Combined subaccount receipts: US$29.33 million.
- Funding gap: under US$1 million.
- Phase II extended by 24 months, to April 30, 2024.
- Implementation in FY22: US$2.74 million, against projected US$5.08 million.
- Total execution to date during current phase: US$20.43 million.
- Average execution rate: 70 percent, against projected 78 percent.
- Projected expenditure: US$4.3 million in FY23 and US$4.1 million in FY24.
- Total workplan endorsed to date: US$29.11 million.
- Steering Committee sought endorsement for a net decrease in the budget by US$246,000 (additional US$514,000 for two new projects; decrease by US$760,000 for five completed projects returning balances); proposed total workplan for endorsement: US$28.87 million.
- Available resources plus pending installments expected to ensure sufficient liquidity for the work program.

### Independent mid-term evaluation
- Mid-term evaluation covering January 2017–September 2021 is underway to (i) assess MNRW TF performance against its mandate and (ii) formulate lessons learned and recommendations.
- Evaluation focuses on a sample for in-depth assessment with representative findings.
- Country selection for in-depth assessment: DR Congo, Guyana, Mozambique, Niger, Sierra Leone, and Uganda.
- A draft evaluation report was received in early June and is under review by the evaluation subcommittee.

*Source: Managing Natural Resource Wealth Thematic Fund (MNRW) Phase II annual report and program documents (figures and fiscal-year details as of April 30, 2022).*

### EXECUTIVE SUMMARY ___________________________________________________________________________  3

### EXECUTIVE SUMMARY — Managing Natural Resource Wealth Thematic Fund (MNRW)

### I. Program purpose and structure
- The Managing Natural Resource Wealth Thematic Fund (MNRW) is the primary external funding vehicle in the IMF for capacity development (CD) on economic policy management for natural resource rich low and lower-middle income countries.
- The current Phase II started in FY18 and will be completed at the end of FY24.
- The MNRW is organized by topical areas (modules):
  - Module 1: Design and Implementation of extractive industries tax policy including fiscal modeling and revenue forecasting.
  - Module 2: Revenue administration of extractive industries.
  - Module 3: Macro-fiscal and public financial management.
  - Module 4: Monetary policy, exchange rate policy frameworks and macro-prudential frameworks.
  - Module 5: Economic statistics (completed by end of FY21).
- Multi-country training is provided through online, virtual, and in-person courses.

### II. Developments and outlook: global context and sectoral implications
- Commodity price dynamics and implications:
  - Commodity prices increased during the last year, most marked for fuel and energy (PNRG) due to supply disruptions following the Russian invasion of Ukraine and economic recovery from COVID-19.
  - Mineral prices have been rising more recently with increased volatility.
  - Near-term revenue outlook for natural resource producing countries improved because of higher prices.
  - Longer-term investment outlook centers on the energy transition:
    - Renewable energy expected to replace fossil fuel energy.
    - Natural gas plays a role as a transition fuel.
    - Mining expected to expand, especially for minerals critical to the energy transition (copper, cobalt, lithium, rare earth elements).
  - The war refocused attention on energy security and diversification, especially in Europe.

### III. Impact of COVID-19 on CD delivery and modalities
- Delivery challenges and adaptation:
  - Remote delivery fatigue impacted FY22 program delivery across many projects.
  - Key remote delivery obstacles included connectivity issues, time-difference constraints, and reduced ability to build in-person professional relationships.
  - Remote delivery also provided opportunities: continuous engagement via communication technologies, more agile responses, wider reuse of online/pre-recorded materials, and cost savings.
- Forward approach:
  - Expectation of increased in-country CD delivery in the coming fiscal year, tailored by country with hybrid modalities.
  - Hybrid models to preserve effective remote innovations while restoring in-person engagement where needed.

### IV. Program portfolio execution and management
- FY22 execution:
  - Total spending for FY22: $2.7 million.
  - FY22 spending was about 10 percent lower than the previous fiscal year, mainly due to reduced spending in:
    - Module 2 (revenue administration) projects with Kenya and Guyana,
    - Module 4 (exchange rate and macroprudential),
    - Module 5 (statistics, completed).
  - Spending on research and analytical tools curtailed due to postponement of regional FARI workshops and staff turnover.
- Cumulative finances and allocations:
  - Cumulative spending through April 2022: $20.4 million against approved project budgets of $29.1 million.
  - Three largest cumulative spend modules:
    - Module 1 on fiscal regimes: $4.0 million.
    - Module 2 on revenue administration: $3.7 million.
    - Module 3 on macro-fiscal and PFM: $3.1 million.
  - Cumulative spending on multi-country training and workshops: $3.2 million.
  - Spending on scoping missions: $1.0 million.
- Portfolio management:
  - As Phase II nears completion, committed funding is almost fully allocated.
  - Steering Committee guiding principles: flexible portfolio management, reallocating funding toward projects with continued demand and traction, scaling back or completing other projects.

### V. Selected FY22 project results by module (high-level highlights)
- Module 1 — Natural Resource Fiscal Regime:
  - Ghana: capacity development on petroleum revenue forecasting; quantitative modeling supported policy discussions on draft Extractive Industries Fiscal Regime Act.
  - Mozambique: support on international tax issues for LNG projects; revenue forecasting model updated.
  - Sierra Leone: legal review identified remaining transitional and implementation issues for the Extractive Industries Revenue Act.
  - Uganda: review of petroleum legislation advising interaction between production sharing agreements and income tax; advice on petroleum valuation as oil project advanced.
  - Uzbekistan: new draft natural resources fiscal regime progressed with policy guidance informing resource rent tax and royalty legislation.
- Module 2 — Natural Resource Revenue Administration:
  - Guyana: oil and gas matrix completed by the Guyana Revenue Authority; audit capacity strengthened through training and coaching.
  - Kenya: compliance improvement plan for extractive industries sector further developed.
  - Liberia: enhanced understanding of international accounting standards for extractive industries.
  - Mozambique: oil and gas risk matrix completed by revenue authorities; work commenced on sector-specific risks.
  - Nigeria: extractive industries skills gap assessment in the Federal Inland Revenue Service; training on computer assisted audit techniques.
  - Sierra Leone: National Revenue Authority defined mining industry risks and gained audit risk-addressing capacity.
  - Uganda: capacity development on computer assisted audit techniques in mining; audit mentorship program; Customs review guidance.
- Module 3 — Macro-fiscal and PFM:
  - Bolivia: advice on medium-term fiscal framework.
  - Democratic Republic of Congo: fiscal risk management practices improved; PFM reform strategy adopted.
  - Mauritania: petroleum revenue forecasting working group established.
  - Senegal: oil revenue management law passed in parliament; petroleum revenue forecasting framework refined.
  - Uganda: Charter for Fiscal Responsibility approved to guide prospective oil revenue management.
- Module 4 — Exchange rate regimes and macro-prudential policies:
  - Progress on TA handbook.
  - Guatemala: guidance on economic forecasting.
  - Philippines: advice on central bank communication.
  - Note: MNRW funding for Module 4 will not be required going forward; Module 4 is ending as of end FY22.

### VI. Program performance and monitoring
- Delivery tempo and outcomes:
  - Program delivery continued to be slow in FY22, partly because Modules 4 and 5 have been winding down.
  - Number of active projects is starting to decline as projects are completed.
  - Average milestone performance across modules reported as satisfactory, while outcomes in many modules still require more time to reach satisfactory levels.

### VII. Key numeric facts and allocations (as reported)
- FY22 expenditure: $2.7 million.
- Cumulative spending through April 2022: $20.4 million.
- Approved project budgets (cumulative): $29.1 million.
- MNRW approved work program allocations by module (reported figures):
  - Module 1: 6,145,000
  - Module 2: 6,052,000
  - Module 3: 4,866,000
  - Module 4: 1,875,000
  - Module 5: 2,163,000
  - Research: 1,260,000
  - Training: 4,246,000
  - Workshop: 289,000
- MNRW approved work program allocations by region (reported figures):
  - Africa: 14,158,000
  - Asia Pacific: 1,512,000
  - Middle East & Central Asia: 1,002,000
  - Western Hemisphere: 2,701,000

*Source: Executive Summary of the Managing Natural Resource Wealth Thematic Fund (MNRW) FY22 Annual Report, IMF.*

### 10.      With total approved project budgets of $29.1 million as end-April, the available

### MNRW Phase II: FY22 Portfolio and Results

### Funding and portfolio management
- Total approved project budgets as of end-April: $29.1 million.
- With total approved project budgets of 29,114 (in thousands of U.S. dollars) as of end-April, the available funding has been almost fully committed.
- The program portfolio is actively managed to enable reallocation of funding between projects to reflect demand and traction, while responding positively to new requests for capacity development (CD).

### Portfolio execution and spending (FY18–FY22; in thousands of U.S. dollars)
- Indicative Expenditure Envelope, per 2016 Program Document: 30,000
- Latest Approved Budget as of April 2022: 29,114
- FY18 Actual Expenses: 4,625
- FY19 Actual Expenses: 4,982
- FY20 Actual Expenses: 5,040
- FY21 Actual Expenses: 3,038
- FY22 Actual Expenses: 2,745
- Change FY22/FY21: -10%
- Actual Total Expenses (FY18–FY22): 20,430
- Of which Trust Fund Management Fee: Latest Approved Budget 1,905; FY18 303; FY19 326; FY20 330; FY21 199; FY22 180; Actual Total 1,337

- Direct Technical Assistance (overall)
  - Latest Approved Budget as of April 2022: 21,101
  - FY18 Actual Expenses: 2,724
  - FY19 Actual Expenses: 3,951
  - FY20 Actual Expenses: 3,649
  - FY21 Actual Expenses: 2,212
  - FY22 Actual Expenses: 1,834
  - Actual Total Expenses: 14,371
  - Execution (%) (active projects only): 68%

- Selected module-level latest approved budgets and FY22 outcomes (in thousands of U.S. dollars)
  - Module 1: Fiscal Regimes — Latest Approved Budget: 6,148; FY22 Actual Expenses: 589; Actual Total Expenses: 3,957; Change FY22/FY21: 2%
  - Module 2: Revenue Administration — Latest Approved Budget: 6,051; FY22 Actual Expenses: 487; Actual Total Expenses: 3,741; Change FY22/FY21: -23%
  - Module 3: Macro-Fiscal — Latest Approved Budget: 4,866; FY22 Actual Expenses: 599; Actual Total Expenses: 3,125; Change FY22/FY21: 14%
  - Module 4: Exchange Rate and Macroprudential — Latest Approved Budget: 1,874; FY22 Actual Expenses: 110; Actual Total Expenses: 1,386; Change FY22/FY21: -63%
  - Module 5: Statistics — Latest Approved Budget: 2,162; FY22 Actual Expenses: 50; Actual Total Expenses: 2,162; Change FY22/FY21: -73%

- Other budget lines (latest approved budget; FY22 actual; total)
  - Scoping Missions — 1,098; FY22: 455; Total: 1,007; Change FY22/FY21: 26%
  - Research Projects and Analytical Tools — 1,260; FY22: 160; Total: 949; Change FY22/FY21: -48%
  - Workshops & Training — 4,534; FY22: 265; Total: 3,164; Change FY22/FY21: -11%
  - Project Management — 1,121; FY22: 241; Total: 939; Change FY22/FY21: 33%

### Country-level project traction and observations
- Overall: Pace of project execution varied across the portfolio; most CD projects maintained spending, while some had minimal spending in FY22. In general remaining budgets are adequate to complete project activities, though a few projects may realign remaining budgets over the next two years.

- Module 1 (Fiscal Regimes) — Key country developments:
  - Chad (M1): No activity delivered in FY22 due to COVID travel restrictions; remote delivery approaches were not agreed; recent petroleum asset deals may boost future oil output.
  - Ghana (M1): TA to Ministry of Finance on petroleum revenue forecasting; revised forecasting manual; updated forecasting model; FARI quantitative analysis informed internal FAD–MOF discussions on the draft Extractives Industry Fiscal Regime Act (EIFRA); data collection on three large mining projects.
  - Liberia (M1): September 2021 amendment to AML’s mining development agreement was struck down by Legislature; renegotiations ongoing; FARI modeling engagement deferred until AML project approved by Legislature; backlog of capacity building (FARI revenue modeling) rolled over to FY23 pending a two-year project extension.
  - Mozambique (M1): Continued work on fiscal regime implementation, tax risk assessment, and establishment of a sovereign wealth fund; March–June 2021 remote STX reviewed international tax issues related to LNG and updated FARI LNG model; planned remote HQ natural resource review mission fell through and is anticipated in-person during a two-year extension; backlog of FARI capacity building to be rolled into FY23 if extended.
  - Sierra Leone (M1): Strengthened engagement in FY22; CD to construct mining revenue forecasting model including a remote workshop in March 2022 across Ministry of Finance, National Revenue Agency, National Minerals Agency; legal assistance to improve fiscal regime legal framework commenced in FY22 and expected to complete in first half of FY23; project proposed extension until December 2024.
  - The Gambia (M1): Remote CD focused on reviewing petroleum fiscal legal framework and VAT application to upstream petroleum activities; engaged inter-agency group (Ministry of Finance and Economic Affairs, Gambia Revenue Authority, Ministry of Petroleum and Energy).
  - Uganda (M1): Final Investment Decision (FID) for Uganda Oil Project announced in early 2022 expected to unlock US$10 billion in investments; Parliament passed three bills in November 2021 affecting petroleum taxation: revision to the Income Tax Act, East Africa Crude Oil Pipeline bill, amendment of the Public Finance Management Act; under MNRW M1, desk review of petroleum taxation legislation and technical advice on petroleum valuation delivered in December 2021.
  - Uzbekistan (M1): FAD provided policy guidance on royalties and resource rent tax, comments on multiple drafts of new fiscal regime, and workshops on financial modeling; government passed legislation on the resource rent tax and new royalty rates for mining and petroleum applicable as of January 1, 2022.

- Module 2 (Revenue Administration) — Key country developments:
  - Guyana (M2): Sustained virtual CD engagement; focus on enhancing GRA knowledge of oil and gas industry, risk assessment, and audit capacity; completed oil and gas risk matrix; STX provides on-the-job training, mentoring, coaching; expectation of resumed in-country STX quarterly visits as COVID situation improves.
  - Kenya (M2): Progress developing a compliance improvement plan (CIP) for the extractive industries using risk matrices; next CD to focus on CIP implementation and industry knowledge.
  - Liberia (M2): Delivered workshop on international accounting standards for EI; progress limited due to internet connectivity hindering remote CD, affecting trainings and workshops central to capacity building plan.
  - Mozambique (M2): Support to complete oil and gas risk matrix, develop sector risk filters, and identify international tax risks; despite COVID disruptions, tax administration gained skills and confidence addressing compliance risks.
  - Nigeria (M2): Initial delay in CD commencement, then strong traction and senior management commitment; EI skills gap assessment and skills development plan completed; CD focused on industry knowledge, fiscal regime, compliance risk management; oil and gas risk matrix development commenced; staff upskilled in Computer Assisted Audit Techniques (CAATs); training, mentoring, coaching ongoing to build audit capacity.
  - Sierra Leone (M2): HQ assessed NRA EI administration progress; STX mission defined specific mining risk filters; NRA EI unit advanced skills, implemented EI tax returns and developed risk filters; FAD proposed a no-cost project extension to progress remaining milestones.
  - Uganda (M2): Sustained engagement despite remote modality challenges; CD enhanced URA mining industry knowledge and audit capacity; staff upskilled in CAATs; audit mentorship program established; HQ Customs mission identified reforms to enhance Customs administration of EI sector; FID for Uganda’s oil project in February 2022 underscores need to sustain and accelerate CD to develop oil and gas expertise.

- Module 3 (Macro-Fiscal and PFM) — Key country developments:
  - Bolivia (M3): Reinitiated activities with HQ virtual mission on medium-term fiscal framework (MTFF); mission recommended MTFF introduction to enhance budget credibility; two STX treasury management visits delivered; Minister and Vice Minister of Finance expressed strong support; authorities requested a one-year project extension to execute action plan.
  - Congo, D.R. (M3): Revised regulatory and institutional framework for fiscal risks management; improved Fiscal Risks Statement (FRS) and medium-term budget framework (MTBF); Government adopted new PFM reform strategy in November 2021; medium-term priority action plan being finalized; follow-up on public investment management, digitalization, and public arrears management confirmed.
  - Mauritania (M3): Authorities established a Revenue Forecasting Working Group under the Macro Forecasting Unit of the Ministry of Finance following scoping mission recommendation.
  - Niger (M3): No activity in the period due to external factors; execution slowed by COVID-19 and IMF-supported program negotiations requiring authorities’ attention; HQ-led mission to elaborate oil revenue management strategy planned for first half of FY23.
  - Senegal (M3): April 2022 HQ mission identified prerequisites for fiscal responsibility framework for natural resource wealth management and suggested procedural fiscal rules; supported final drafting of new oil revenue management law, which was passed in FY22; desk reviews for secondary legislation including sovereign wealth fund issues continued; additional training on oil and gas revenue forecasting including FARI model provided.
  - Uganda (M3): Authorities approved the Charter for Fiscal Responsibility with main fiscal objectives for the next 4 years, including oil revenue management.

- Module 4 (Exchange Rate and Macroprudential) — Key activities:
  - Multiple virtual missions in last 12 months:
    - Guatemala: improve process and organization of economic forecasts.
    - Philippines: guidance to strengthen central bank communications.
    - Uganda: review of central bank transparency practices to enhance public accountability.
    - Papua New Guinea: support for choice of optimal monetary policy framework and exchange rate arrangement.
  - A portal to the TA handbook is now operational on the IMF website with additional chapters to be added.

### Multi-country training, analytical tools, and research
- Macroeconomic Management in Resource-Rich Countries training adapted to COVID-19; both synchronous and asynchronous formats used.
- ICD held three synchronous courses emphasizing workshops, debates, and web-based learning tools to ensure strong participant engagement, high participant satisfaction, and significant learning gains.
- Asynchronous training available in English, French, and, since end-April 2021, Russian on a self-paced basis for the entire year to maximize enrollment and participation flexibility.

*Source: MNRW Phase II annual report (as of end-April 2022).*

### 17.      Progress continued under the FARI project. The modernized simplified FARI tool has been

### Progress continued under the FARI project and MNRW Phase II results

### FARI tool and training outreach
- The modernized simplified FARI tool has been published on the revamped FARI homepage of the IMF. The tool now supports three languages (English, French and Spanish).
- In April 2022, the first in a series of three FARI workshops for Central and West African francophone countries was delivered.
  - 81 people from 18 countries and 3 regional institutions participated.
  - The second workshop series is planned for July 2022.
- Training in Macroeconomic Management in Resource-Rich Countries:
  - Three 2-week synchronous courses were delivered, with 57 participants.
  - Asynchronous online courses attracted 1,964 active participants (incl. 634 from MNRW-TF eligible countries); of these, 157 successfully completed the courses.
  - Almost 1/3 of participants in synchronous courses, and 1/6 of those in asynchronous courses, were female.
  - Participants rated the synchronous and asynchronous training 4.5 / 5 and 4.7 / 5, respectively.
- Online Training in Energy Subsidy Reform:
  - The online course attracted 1016 participants (17 percent female, and incl. 293 from MNRW-TF eligible countries); of these, 101 completed the course.
  - Participants rated the training 4.5 / 5.

### Results-based Monitoring (RBM) performance
- Overall RBM performance was assessed as satisfactory.
  - The average milestone rating corresponded to ‘largely achieved’.
  - The average outcome rating fell between ‘partially achieved’ and ‘largely achieved’.
- Project counts and achievement rates:
  - There are more than 250 milestones for currently active projects, of which about 65 percent have been largely or fully achieved.
  - There are approximately 100 outcomes, of which about half have been largely or fully achieved.
- Covid-19 impacts and project status:
  - The Covid-19 pandemic contributed to a significant number of projects in the ‘red’ area of outcome performance.
  - A number of affected projects were near the end of their project life; decisions to extend were reached in consultation with country authorities.
  - Following the resumption of travel, most of these projects were relaunched: Bolivia M3, Liberia M1, Mozambique M1, Sierra Leone M1, and Uganda M3.
  - With the exception of Mozambique module 1, these relaunched projects have satisfactory or outstanding milestone performance track records.
  - The module 1 project for Nigeria did not reestablish traction after counterpart turnover following elections and will be closed.

### Selected key country- and program-level results (FY22 highlights)
- Dem. Rep. of Congo (M3): An improved Fiscal Risks Statement (FRS) has been included for the first time in the 2022 budget documents; a revised regulation on the MTBF Committee was signed; the Government adopted a new PFM reform strategy. Five out of seven milestones due are now fully achieved.
- Ghana (M1): Complete draft of the Extractives Industry Fiscal Act delivered; quantitative modeling conducted on outstanding policy issues; updated forecasting manual produced. Ten out of thirteen milestones due are fully achieved.
- The Gambia (M1): Review of the legal basis of the petroleum fiscal regime and tax law protections against international profit shifting delivered.
- Guyana (M2): Oil and gas risk matrix completed; staff upskilled in statutory interpretation focusing on the oil and gas sector.
- FARI (Research): The modernized simplified FARI tool published on the revamped IMF FARI homepage; tool supports three languages (English, French and Spanish).
- Kenya (M2): Kenya Revenue Authority developed a draft compliance improvement plan for the EI sector awaiting approval.
- Mauritania (M3): Authorities set up a Revenue Forecasting Working Group under the Macro Forecasting Unit; corresponding milestone fully achieved.
- Nigeria (M1): National Assembly approved the Petroleum Industry Bill in July 2021, bringing to closure a more than 15 years long reform process.
- Nigeria (M2): EI skills gap assessment conducted and a skills development plan established.
- Senegal (M3): New oil revenue management law passed in FY22; desk reviews for secondary legislation and support on revenue forecasting and FARI provided.
- Uganda (M1/M2/M3): Delivered desk review of petroleum taxation legislation and technical advice on petroleum valuation (December 2021); URA staff upskilled in Computer Assisted Audit Techniques and audit mentorship program established; authorities passed the Charter for Fiscal Responsibility including fiscal objectives related to oil revenue management.
- Uzbekistan (M1): Government passed legislation on resource rent tax and new royalty rates for mining and petroleum.

### Preliminary considerations for a potential MNRW Phase III
- Overarching context:
  - Country demand for CD on natural resource economic management remains strong, driven by the need to prepare for the energy transition and its differential impacts by resource mix.
  - Linkages between climate change, energy transition and natural resources should provide the overarching context for a third phase.
- Scope and focus (remaining within IMF remit):
  - CD will center on ensuring economic management of natural resources to provide benefits for current and future generations.
  - Primary focus areas: collection, management, and usage of revenues from natural resource extraction, coordinated with other CD programs (e.g., the RMTF).
  - Framing differs by broader incorporation of climate change and the energy transition.
- Proposed thematic CD emphases:
  - Tax Policy:
    - Continue policy design and implementation of fiscal regimes for natural resources (mainly mining and petroleum).
    - Objective: ensure a fair sharing of risk and reward between investor and government.
    - FARI methodology and model provide conceptual foundation.
    - Scope to be extended to environmental and carbon taxation related to extractive industries and possibly tax policy for renewable energy.
  - Revenue administration:
    - Build capacity for collecting revenue from natural resources, focused on mining and petroleum, including auditing and compliance.
    - Support should be integrated into countries’ overall tax administration strategy where collection functions are fragmented.
  - Macro-fiscal and PFM:
    - CD to manage natural resource revenue through macro-fiscal frameworks guiding savings-investment decisions and integration into the budget.
    - For fossil-fuel-dependent countries, increased attention to climate-related investments for diversification and transition away from fossil fuels.
- Country coverage and eligibility:
  - Consider expanding potential coverage to include all low- and middle-income countries with current or potential natural resource extraction (thereby adding upper middle-income countries).
  - Project eligibility should require that the main focus of the CD activity directly relates to the economic management of natural resources (a substantive eligibility test beyond beneficiary listing).
- Modular structure and options (retained with refinements):
  - Option 1: Thematic fund focused on natural resource revenue mobilization combining Module 1 (tax policy/fiscal regime) and Module 2 (revenue administration); broaden to carbon and environmental taxes with close coordination with RMTF.
  - Option 2: In addition to revenue mobilization (Modules 1 and 2), extend CD to natural resource revenue management (macro-fiscal policy and PFM).
  - Option 3: Retain fiscal management focus (Modules 1, 2 and 3) and extend to training and other CD from ICD in macroeconomic management of natural resources.

### Financial update and workplan status (as of April 30, 2022)
- Overall funding and receipts:
  - Pledges stand at US$27.97 million against a budget of US$30 million.
  - Contributions received from donor partners as of April 30, 2022 amounted to US$27.54 million.
  - Interest earned: US$0.71 million.
  - Transfers from Phase I: US$1.08 million.
  - Combined, the subaccount received a total of US$29.33 million.
  - A funding gap of under US$1 million remains.
- Cashflow and disbursement:
  - Projected cashflow position is satisfactory under the agreed disbursement schedule.
  - Phase II was extended by 24 months, to April 30, 2024.
- Program implementation and execution:
  - Implementation reached US$2.74 million in FY22, against a projected US$5.08 million.
  - Total execution to date during the current phase reached US$20.43 million.
  - Average execution rate reached 70 percent, against a projected 78 percent.
  - Expenditure is projected to rise to US$4.3 million in FY23 and US$4.1 million in FY24.
- Workplan endorsement and revisions:
  - The total workplan endorsed to date amounts to US$29.11 million.
  - Steering Committee endorsement sought for a decrease in the budget by US$246,000.
    - Adjustments comprise an additional US$514,000 for endorsement of two new projects, and a decrease by US$760,000 for five recently completed projects whose balance is returned to the pool.
    - Proposed revisions include budget-neutral extensions for ten already endorsed projects.
  - The total workplan proposed for endorsement amounts to US$28.87 million.
  - Available resources within the subaccount, plus pending installments and careful management, are expected to ensure sufficient liquidity for this work program.

### Independent mid-term evaluation
- An independent mid-term evaluation of MNRW Phase II is underway, covering the period January 2017–September 2021.
  - The review aims to (i) assess the performance of the MNRW TF in achieving its mandate; and (ii) formulate lessons learned and recommendations for improvement.
  - The evaluation focuses on a sample of countries and projects for in-depth assessment while enabling representative findings for the entire program.
  - Country selection for in-depth assessment: DR Congo, Guyana, Mozambique, Niger, Sierra Leone, and Uganda (selection driven by level of activity, representativeness of modules covered, balance at workstream objective level, and regional balance).
  - A draft evaluation report was received in early June and is currently being reviewed by the evaluation subcommittee.

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_Source: https://www.imf.org/-/media/files/capacity-developement/mnrw/mnrw-fy22-annual-report.pdf_