## Managing Natural Resource Wealth Trust Fund (MNRW-TF) Program Document (Phase 2) ## Source details **Canonical URL:** [Managing Natural Resource Wealth Trust Fund (MNRW-TF) Program Document (Phase 2)](https://www.imf.org/-/media/files/capacity-developement/mnrw/mnrw-program-2018.pdf) ## Other formats - [Markdown version](/-/media/files/capacity-developement/mnrw/mnrw-program-2018.pdf.md) - [Structured JSON version](/-/media/files/capacity-developement/mnrw/mnrw-program-2018.pdf.json) --- ### Overview and Rationale - The Managing Natural Resource Wealth Trust Fund (MNRW-TF) is a multi-partner trust fund established in 2011 by the International Monetary Fund (IMF) to help countries in managing natural resource wealth. - Drivers for increased revenue mobilization (RM) and reform in resource-rich countries: - The Addis Tax Initiative highlighting the need to boost capacity of less-developed countries to finance the Post-2015 Development Agenda. - The recent commodity price slump intensifying urgency to diversify the revenue base and effectively manage resource revenues. - Commodity price volatility placing pressure on exchange rate and macroprudential policies to smooth macroeconomic and financial impacts. - Growing focus on climate change and potential reduced demand for fossil fuels, and in some countries, significant depletion of natural resources requiring effective management of declining revenues. ### Phase 1 Performance and Key Achievements - Phase 1 operated from May 2011, extended to April 2017, with contributions totaling US$24.7 million and partners including the European Union and the governments of Australia, Kuwait, Netherlands, Norway, Oman, and Switzerland. - Results to February 2016 (selected): - The Steering Committee (SC) approved 43 projects in 22 countries, 8 research projects and 5 conferences/workshops. - Nine countries have reformed (either enacted or introduced to the governing authority) the laws relating to the EI fiscal regimes. - Capacity to use the Fiscal Analysis for Resource Industries (FARI) model increased in 12 countries, with training workshops averaging 20 participants per workshop. - Five countries formed special units within revenue administrations to administer large EI companies. - New or revised frameworks for public financial management are being implemented in 11 countries. - One country reformed governance structure and investment management of its Sovereign Wealth Fund (SWF). - Three countries improved their reporting of natural resource revenues in the national accounts. - Four regional conferences on EI fiscal issues were held (East Africa, Asia-Pacific, Andean region (two)), each with between 60 and 90 participants. - A Washington, DC conference addressed international EI issues; papers used as basis for a book on International Tax Issues for the Extractives Industries to be released in 2016. - Two handbooks released: Administering Fiscal Regimes for Extractive Industries: A Handbook; and Sovereign Asset-Liability Management Guidance for Resource-rich Countries. - A new template for collecting government revenue data from natural resources was developed and field-tested; the Extractive Industries Transparency Initiative (EITI) will collaborate with the IMF in using the template. - A public version of the FARI model was developed and released, with an accompanying Technical Note and Manual. - A draft guide on specific compilation issues for natural resources in macroeconomic statistics was completed and will be released online for comment. ### Results-Based Management, Evaluation, and Lessons - A results based management (RBM) methodology has been used to measure and monitor progress and support SC decision-making; Appendix 1 summarizes overall performance and lessons. - The independent midterm evaluation (to April 2014) rated projects very good on relevance and good on other OECD DAC criteria. - Observed project risks and lessons: - Projects stalled where sustained government commitment or continuity of key officials was lacking. - Importance of greater ownership by authorities emphasized for Phase 2. ### Recommendations from the Midterm Evaluation (summarized) - Strengthen project design, planning and TA delivery by: - Conducting scoping missions. - Setting more focused and realistic objectives, outcomes and time frames. - Defining milestones and preparing road maps. - Conducting more in-depth risk analysis and delivering more hands-on TA with continuity of engagement. - Increase participation of IMF Regional Technical Assistance Centers (RTACs) and regional advisors. - Improve synergies and coordination among Fiscal Affairs Department (FAD) modules and with the IMF’s Legal Department. - Consider providing TA support on monetary and capital markets and statistics under non-TF IMF TA. - Enhance use of research projects and workshops to achieve TF objectives. - Enhance RBM monitoring by disaggregating outcomes and objectives and standardizing scoring across approaches. - Clarify process for dealing with inactive projects. - Enhance efficiency of reporting to the SC. - Improve project budgeting to reduce over-costing of projects. - Appoint a full-time supra-manager in FAD financed by the TF to standardize RBM and distill technical lessons across projects. ### Geographic Coverage and Project Statistics - Regional budget distribution: - Africa: 64% - Asia-Pacific: 29% - Latin America and Caribbean: 6% - Middle East: 2% - Eligible and project country counts (Table 1): - Total eligible countries: 50 - Africa: 24 eligible (48 percent of eligible countries); 13 project countries (59 percent of project countries) - Asia-Pacific: 11 eligible (22 percent); 5 project countries (23 percent) - Europe: 1 eligible (2 percent); 0 project countries (0 percent) - Middle East and Central Asia: 9 eligible (18 percent); 2 project countries (9 percent) - Latin America and Caribbean: 5 eligible (10 percent); 2 project countries (9 percent) - Total project countries: 22 (100 percent) - Project activation (2011–2016): - Total projects activated: 56 - 43 country projects in 22 countries: - 30 currently active projects; - 9 completed projects — 8 evaluated by the independent midterm evaluation: 6 assessed as “very good” and 2 assessed as “good”; - 2 projects terminated (Mongolia module 1; Niger module 1) due to lack of commitment or fragmentation of responsibilities; - 2 projects never made active due to lack of commitment (Iraq module 4; Uganda module 4). - 8 research projects — 5 still active; 3 completed resulting in publications or input to other work. - 5 conferences — 4 undertaken. - RBM outcomes (of 37 active projects at October 2015): - 38 percent assessed as “largely” or “fully achieved;” - 49 percent assessed as “partially achieved;” - 14 percent assessed as “not achieved;” ### Program Focus and Modules (Phase 1) - Phase 1 concentrated on five capacity development modules: 1. EI fiscal regimes, including modeling. 2. EI revenue administration. 3. Macro-fiscal policies and public financial management. 4. Asset and liability management. 5. Statistics for natural resources. - Most Phase 1 projects related to improving EI fiscal regimes and revenue management; fewer projects than expected addressed asset and liability management and statistics. ### Phase 2 (MNRW2) Strategic Priorities and Changes - Strategic emphases and changes for Phase 2: - Targeted and intensive TA engagement, with three broad changes: 1. Expanded scope: greater emphasis on international tax policy and administration issues (given base erosion and profit shifting concerns) and TA on energy subsidy reform. 2. More flexible delivery modes: scope for more intensive mission work, including assigning experts to remain in-country for an extended period or using in-country or regional long-term advisors. 3. Strengthened project design and planning with greater upfront engagement from country authorities through scoping missions and memorandums of partnership with authorities. - Consolidation of the Fiscal Analysis for Resource Industries (FARI) model as a TA-enhancing tool. - Continued analytical work with stronger focus on dissemination and learning via on-line and face-to-face training, conferences, and workshops to support absorption and retention of TA-delivered knowledge. - Refined modular design: retain modules on EI fiscal regime design; EI revenue administration; EI macro-fiscal policies and public financial management; and statistics for natural resources, but replace the module on asset and liability management with a module on exchange rate regimes and macro-prudential policies in resource-rich countries. - Primary focus on low- and lower-middle-income resource-rich countries, with possible expansion by the SC to include some upper-middle-income countries or a region where appropriate. ### Financing and Forward Resource Needs (Phase 2 request) - Funding requirement to achieve Phase 2 objectives: - The TF will require funding of around $30 million, covering the six-year period from mid-2016 to mid-2022. This funding is intended to deepen targeted and intensive TA engagement, allow some expansion of country coverage, and address emerging issues. ### Phase 2 Proposal — Objectives, Monitoring and Program Structure - Objective for MNRW2: - "to build economic policy and administrative capacities to enable LICs and lower-middle-income countries (LMICs) to derive the maximum benefit from their oil, gas, and mineral resources, so as to facilitate their economic development and poverty reduction goals." - Strategic log frame and RBM: - A strategic log frame (Appendix 2) will aggregate module-level results and is fully consistent with the IMF’s enhanced RBM framework. - IMF enhanced RBM system requires standardized cataloging of TA project "objectives" and "outcomes," project milestones, and periodic scoring and reporting against objectives, outcomes, and milestones. - Program activity indicators (as presented in the proposal text) include numeric timeline elements: 0; 2; 4; 6; 8; 10; 12; 14; 12345; MNRW-TF Modules; 2013; 2014; 2015; 2016; 13. ### Box 3 — Expected Benefits of MNRW2 - For resource-rich countries: - Maximization of revenues over the life-cycle of extractive projects through balanced fiscal regimes and effective administration. - More effective spending of resource revenues to assist countries in meeting sustainable development goals. - Better governance by enhancing accountability and transparency in public service dealing with resource revenues. - More investment in the natural resource sector from an attractive, stable investment climate. - Smoother impact on the economy from commodity price swings to support stable growth and financial sector stability. - Creation of an information base on economic impacts to inform strategic policy decisions. - For the global community: - Foster economic and social development in LICs and LMICs by leveraging aid to increase development impact of resource revenues. - An enlarged and more secure global supply of energy and minerals. - Improved climate for investment and production consistent with corporate social responsibility and home country development policies. - For partners: - A mechanism for coordinating partner assistance in natural resource wealth management and RM. - Opportunity to participate in IMF-led analytical and diagnostic tools sponsored by the TF. - Enhanced visibility and greater impact from leveraging a multi-donor trust fund. - For the IMF: - Improved coordination and knowledge exchange with other TA providers. - TA delivery benefits from the programmatic approach and governance structure emphasizing results orientation and accountability. - Monitoring and evaluation: - Continuous oversight by the SC. - Project-specific RBM progress reports included in both annual and midyear reports. - Strategic log frame results included in annual reports only. - An independent midterm evaluation scheduled in FY2020. - Further refinements to the log frame to be done in consultation with the SC. ### Box 4 — Key Elements of Memorandum of Partnership (MOP) - Purpose and timing: - Formal agreement of cooperation between the IMF and country authorities; should be agreed before project commencement and discussed during scoping missions. - The MOP forms the basis for the project’s RBM. - Required elements: - Project Description: scope, objectives, outcomes, indicators, timelines. - IMF Project Participation: proposed TA, nature and scope of missions, number and timing of missions, expected outputs, reference to TF funds allocated. - Other Partners’ Inputs: complementary inputs by bilateral donors to enhance coordination and avoid duplication. - Country Commitment: identification of a senior official as main counterpart; liaison person; government commitment to provide data; consideration of a steering group; assistance for long-term experts; regular government reporting on reform progress. - Termination and Suspension: circumstances including insufficient reform progress (e.g., no substantial action on recommendations in the previous 12 months) and external factors (e.g., security issues). - Research and analytical work (Phase 2): - Continued support for IMF research to identify good/best practices and link research results to capacity development interventions; results to be widely disseminated. - FARI model (Phase 2): - FARI analyzes sharing of annual project cash flows between investors and government; built-in routines for Average Effective Tax Rate, Marginal Effective Tax Rate, progressivity and stochastic analysis. - Phase 2 actions: consolidate and refine FARI; support use for fiscal regime design and revenue forecasting; support development of FARI as a revenue administration tool. - Public release of the FARI methodology noted in October 2015 as a demand driver. - Outreach and training (Phase 2): - Continued horizontal and peer learning via conferences and workshops; emphasis on cost-effectiveness and targeting. - Support for on-line and face-to-face courses: - Macroeconomic Management in Resource-rich Countries; - Energy Subsidy Reform (already developed; TF to support ongoing provision). - Online tools to scale knowledge transfer and prepare officials in advance of TA delivery. - External mid-term evaluation noted importance of training for sustainability. - Gender considerations: - Capacity development will incorporate IMF’s broader work on gender, focusing on labor force participation, inequality and economic opportunities. - TA will ensure reviewed government policies do not have a gender bias. - Training will actively promote women’s participation; level of women participation included as an indicator in the MNRW2 log frame. ### Integration and Coordination (Section 3 highlights) - Integration of TF operations with IMF surveillance and lending: - MNRW2 TA and training will be integrated with IMF surveillance and lending inputs (structural benchmarks, Article IV consultations). - IMF area department teams will help identify, prioritize and monitor implementation of TA advice. - IMF capacity development includes diagnostics, policy design, legal drafting, implementation support, and follow-up via surveillance or programs. - Full integration with other IMF capacity development activities, including RTACs: - TF work overseen by the interdepartmental Committee on Capacity Building (CCB). - HQ-initiated TA addresses complex diagnostics; RTAC resident advisors and short-term experts provide practical implementation support. - RTACs mainly involved in revenue administration and revenue management (modules 2 and 3). - Project managers will ensure no overlap between MNRW-TF and RTAC TA; RBM provides a common reporting platform. - Coordination with other development partners: - Continued synergies with World Bank, EITI, Norway Oil for Development Programme, Switzerland SECO, Australia, UN, EC, UK Department for International Development, OECD, and UN on international tax matters. - With SC assent, World Bank and EITI may attend SC meetings as observers. - Consultation with private sector and CSOs will continue; project managers meet stakeholders to obtain perspectives. ### Governance and Operational Arrangements (Section 4) - Governance structure: - Multi-partner TF with a Steering Committee (SC) composed of partner representatives and IMF staff; chaired by a partner representative with possible rotation. - IMF staff serve as the Secretariat; SC meetings held annually with additional meetings as necessary. - SC functions: strategic guidance, policy and priority setting, endorse annual work plan, review progress/performance, coordinate TA by sharing mission-planning information. - Annual (or biannual if requested) report on TF activities and project results prepared; a version will be made public. - Work plan and TA prioritization: - Projects initiated within an annual work plan subject to SC approval. - Project selection demand-driven; prioritization criteria include country need, authorities’ commitment, distribution across regions and modules. - Work plan includes applied research, conferences, workshops, and training. - Dissemination policies: - Guided by IMF transparency policies; TA reports shared with SC members with recipient consent on a no-objection basis and kept confidential. - Sharing with non-SC partners decided case-by-case based on legitimate interest. - IMF encourages countries to publish TA reports. - Accountability and RBM at project and TF level: - Individual projects must establish comprehensive log frames consistent with IMF’s RBM system. - Strategic log frame will set TF-level goals and monitor portfolio progress. - Two types of strategic indicators: (a) results directly attributable to TF work; (b) results partially reflecting TF effects. - Modular indicators aggregate project-level results within each module. - Quality control via screening and selection of experts, supervision and HQ backstopping, and regular self-assessments. - Area Departments will monitor beneficiary progress within IMF programs and surveillance. - Relevant project status information accessible to Partners via the IMF’s partner portal. - Semi-annual SC meetings provide performance accountability with summaries of project and portfolio progress. - Independent evaluation: - An independent evaluation by outside experts after no fewer than three years of operation; expected in FY2020 to assess effectiveness and sustainability and formulate recommendations. - Visibility and outreach: - Intensified outreach including website, booklets, partner debriefings, newsletters, conferences/press releases; partners systematically recognized in outreach activities. - Project management: - Small dedicated TF team proposed: one full-time program manager, one research assistant, and one administrative assistant to manage scaled-up operation. ### Financing and Administrative Issues — Phase 2 illustrative estimates - Estimated total cost for an initial five-year phase: US$30 million. - Financing sought in advance for entire five-year period to provide stability and continuity. - Illustrative budget (MNRW-TF Phase II, $'000) — annual and total values preserved exactly: - TA Delivery: FY17 670; FY18 3,120; FY19 3,200; FY20 3,270; FY21 3,350; FY22 3,286; Total 16,896 - Targeted TA: FY17 540; FY18 2,990; FY19 3,060; FY20 3,130; FY21 3,210; FY22 3,286; Total 16,216 - Scoping missions: FY17 130; FY18 130; FY19 140; FY20 140; FY21 140; FY22 0; Total 680 - Research and Analytical Tools: FY17 90; FY18 370; FY19 380; FY20 390; FY21 400; FY22 405; Total 2,035 - Research Projects: FY17 90; FY18 180; FY19 190; FY20 190; FY21 200; FY22 203; Total 1,053 - FARI Country STX Follow-up Visits: FY17 0; FY18 180; FY19 190; FY20 190; FY21 200; FY22 203; Total 963 - Workshops and Training: FY17 0; FY18 1,930; FY19 1,140; FY20 1,170; FY21 1,190; FY22 1,220; Total 6,650 - Workshops & Conferences: FY17 0; FY18 310; FY19 315; FY20 320; FY21 330; FY22 340; Total 1,615 - Training: FY17 0; FY18 1,620; FY19 830; FY20 850; FY21 860; FY22 880; Total 5,040 - Program Management: FY17 355; FY18 360; FY19 370; FY20 580; FY21 390; FY22 400; Total 2,455 - Staff Costs*: FY17 355; FY18 330; FY19 339; FY20 343; FY21 347; FY22 356; Total 2,070 - Independent Evaluation: FY17 0; FY18 0; FY19 0; FY20 200; FY21 0; FY22 0; Total 200 - Steering Committee: FY17 0; FY18 30; FY19 31; FY20 37; FY21 43; FY22 44; Total 185 - Sub-total: FY17 1,116; FY18 5,780; FY19 5,091; FY20 5,410; FY21 5,330; FY22 5,310; Total 28,037 - TF Management Fee (7%): FY17 78; FY18 405; FY19 356; FY20 379; FY21 370; FY22 372; Total 1,960 - Total: FY17 1,194; FY18 6,190; FY19 5,447; FY20 5,788; FY21 5,700; FY22 5,682; Total 30,000 - Budget category shares: - TA Delivery 60% - Research & Analytical Tools 7% - Workshops & Conferences 6% - Training 18% - Program Management and Administration 9% - Indicative TA Delivery Budget distribution by module (listed in source order): 1. EI Fiscal Regimes 2. Revenue Administration 3. Public Financial Management 4. Exchange Rate and Macroprudential Policies 5. Statistics - Administrative arrangements: - Contributions into the multi-partner MNRW subaccount under the IMF’s Framework Administered Account for Selected Fund Activities (the “SFA Instrument”). - Operating unit for Phase 2 established under the Subaccount; funds commingled. - Basis: Letter of Understanding, subject to Subaccount terms and SFA instrument. - Procurement beyond threshold amount (currently US$50,000) requires competitive bidding with at least three bids. - IMF charges project-related TA costs on actual cost basis, including IMF staff time, and a trust fund management fee of 7 percent. - Partners receive reports on subaccount expenditures and commitments; subaccount operations subject to annual audits. - Separate reporting on TF budget execution provided at each SC meeting and available via the IMF’s partner portal. ### Appendix 1 — High-Level Results and Lessons from Phase 1 (selected) - Objective 1 (EI fiscal regimes): - Nine countries reformed EI fiscal regime laws based on IMF advice. - FARI capacity increased in 12 countries; workshops averaged 20 participants. - Four regional conferences held with 60–90 participants each. - Public version of FARI released with Technical Note and Manual. - Objective 2 (Revenue Administration): - Five countries formed special units within revenue administrations for large EI companies. - Administering Fiscal Regimes for Extractive Industries: A Handbook released and translated into French and Spanish. - Objective 3 (Public Financial Management): - New or revised PFM frameworks being implemented in 11 countries. - Objective 4 (Sovereign asset-liability management): - One country reformed its SWF governance and investment management; a guidance handbook released. - Objective 5 (Statistics): - Three countries improved national accounts reporting for natural resource revenues. - New template for collecting government revenues from natural resources developed and field-tested; EITI collaboration announced. - Draft Guide to Analyze Natural Resources in the National Accounts released online for comment. - RBM outcomes and lessons: - Success factors: strong political and institutional commitment; inter-ministerial cooperation; timely and relevant TA with mixed skills. - Causes of underperformance: security issues (e.g., Mali); health crises (Ebola in Sierra Leone and Guinea); lack of commitment and responsiveness. - Midterm evaluation recommendations incorporated into MNRW2 design (see Recommendations section). ### Box 5 — Phase 1 Case Studies (selected) - Mauritania (Module 1, 2011–2014): - Introduction of a withholding tax at 15 percent on transactions involving non-residents, raising revenue equivalent to 0.33 percent of GDP in 2013. - March 2014: parliament approved mining code changes subjecting mining companies to standard VAT (zero rate for exporters), avoiding VAT exemptions. - Tax revenue performance (excluding natural resources) improved by around 13 percent between 2010 and 2015. - Provision of a forecasting model of resource revenue. - Success factors: strong political support and management commitment. - Guinea (Initial TA program, 2012–2015, Module 1): - Fiscal provisions of the Mining Code completely reviewed, redrafted and adopted by the National Assembly; related Fiscal Regulations and Model Agreement redrafted. - VAT regime for mining companies significantly strengthened; roughly half of mining projects modeled. - Commencement of PFM project (module 3) in 2014 produced strategy for fiscal forecasting and budgeting and framework to strengthen fiscal governance and transparency of parastatals. - Implementation of a VAT refund system for the mining sector. - Success factors: very strong support from ministers and the President despite Ebola crisis. - Kenya (Module 1, 2013–2016): - Development of schedule in new model production sharing contract; revised income tax law for extractive industries now in force; draft Mining Bill incorporating project suggestions. - FARI model critically used and transferred via workshops. - High-profile events: “Kenya Rising” conference (September 2013) and EAC workshop on fiscal management of oil and gas (January 2014). - Success factors: strong senior commitment; lateral communication across agencies; combination of policy, modeling, and legal drafting skills. - Mongolia (Module 3, begun 2013): - Expansion and sophistication of the medium-term fiscal framework (MTFF); cash flow forecasting to manage seasonal variations; support in drafting a sovereign wealth fund law, with Parliament agreement in early 2016 to create such a fund. - Strong Ministry of Finance support; principal headwind: political pressure to increase spending. - Project benefited from cooperation with the World Bank and U.S. Treasury Department. - Cross-cutting success factors: - Strong political support and management commitment. - Use and transfer of modeling tools (FARI, forecasting models). - Integration of policy, legal drafting, and modeling skills. - Close cooperation with development partners. - Persistent constraint: limited institutional capacity requiring ongoing capacity building. ### Phase 2 Strategic Logical Framework — Key Objectives and Verifiable Indicators (selected) - STRATEGIC OBJECTIVE: Assist low and lower-middle income countries to derive maximum benefit from their oil, gas and mineral resources. - Impact indicators (examples): - Average resource revenues as a share of GDP increases in MNRW-TF countries. - Average potential government take for a standard resource revenue project in MNRW-TF countries (WoRLD 1/; Project managers; FARI Model). - Outcome areas with verifiable indicators and sources: - Better management of EI revenues: majority of participating countries implement reforms (MTFF, in-year budget reporting, budget classification, revenue collection information, consolidation of cash balances, reporting of contingent liabilities). Source: Project managers. - Effective exchange rate and macroprudential policies: majority of participating countries improve exchange rate regimes and macroprudential frameworks. Source: Project managers. - Improved statistics for natural resources: majority publish EI revenue data per IMF template and publish resource and non-resource GDP separately. Source: Project managers. - Selected objective-specific targets: - OBJECTIVE 1: IMPROVED EI FISCAL REGIMES - Result 1.1: 10 participating countries have amended their fiscal regimes broadly in line with IMF advice; FARI model to show improved estimated EI revenue potential. Source: Project managers. - OBJECTIVE 2: ENHANCED EI REVENUE ADMINISTRATION - Result 2.1: 8 participating countries with clear organizational structures for the EI sector. Source: Project managers. - Result 2.2: 8 participating countries with compliance risks identified, assessed, ranked, and quantified; 8 with compliance improvement programs. Source: Project managers. - OBJECTIVE 3: BETTER MANAGEMENT OF EI REVENUES (PFM) - Result 3.1: 10 participating countries have revised/introduced credible MTFFs integrated with the budget that include EI revenues; 10 with better controls over EI revenues and expenditure. Source: Project managers. - Result 3.2: 10 participating countries have budget classifications and charts of accounts incorporating EI details in line with international accounting standards. Source: Project managers. - Result 3.3: Treasury single account usage and disclosure/management of contingent liabilities improved in 10 participating countries. Source: Project managers. - OBJECTIVE 4: EFFECTIVE EXCHANGE RATE AND MACROPRUDENTIAL POLICIES - Result 4.1: 4 participating countries where exchange rate flexibility, operational FX intervention tools, and transition sequencing are in place. Source: CD-PORT. - Result 4.2: 4 participating countries with enacted legislation establishing macroprudential institutional frameworks and systemic risk monitoring. Source: CD-PORT. - OBJECTIVE 5: IMPROVED STATISTICS FOR NATURAL RESOURCES - Result 5.1: Participating countries have charts of accounts and budget classifications to complete the EITI summary data template in line with GFSM 2014. Source: Project managers. - Result 5.2: Pilot countries develop capacity for compiling national accounts covering natural resource industries; a workshop with EITI to support SDG monitoring (Goal 17). Source: Project managers; CD-PORT. - OBJECTIVE 6: TOPICAL RESEARCH AND ANALYTICAL WORK - Result 6.1: 3 publications produced setting out good/best practices and lessons learned. Source: CD-PORT. - OBJECTIVE 7: CAPACITY DEVELOPMENT THROUGH LEARNING OPPORTUNITIES - Result 7.1: Number of participants from MNRW eligible countries in IMF courses; number and percentage of women participants. Source: ICD Training Statistics. - Result 7.2: At least one regional/international conference or workshop per year for MNRW eligible countries. Source: Project managers. - MNRW-TF summary reporting on outputs (examples): - Number of TA missions completed (total and by module). - Number of TA reports produced (total and by module). - Number of workshops completed. - Number of research papers published. - Number of people trained (disaggregated by online and face-to-face and by sex and region). ### Appendix 3 — Eligibility and Country Coverage (high-level points) - Eligibility based on World Bank country classification at 1 February 2016 and satisfying resource revenue or export criteria; EITI countries included if EITI compliant or candidates. - The addition of Guyana was endorsed by the Steering Committee in June 2017 and the Gambia in June 2018. - Appendix lists LICs and LMICs meeting eligibility criteria (selected country examples preserved from source): Madagascar; Malawi; Mali; Mozambique; Niger; Sierra Leone; South Sudan; Tanzania; Togo; Uganda; Papua New Guinea; Philippines (EITI country); Sao Tome and Principe; Senegal (EITI country); Solomon Islands; Sudan; Syrian Arab Republic; Tajikistan; Timor-Leste; Ukraine (EITI country); Uzbekistan; Vietnam; West Bank and Gaza; Yemen, Rep.; Zambia; Afghanistan; Burkina Faso; Cambodia; Central African Republic; Chad; Congo, Dem. Rep. of; Ethiopia (EITI country); The Gambia; Guinea; Liberia; Bolivia; Cameroon; Congo, Rep. of; Cote d’Ivoire; Ghana; Guatemala; Guyana; Honduras (EITI country); Indonesia; Kenya; Kyrgyz Republic; Lao PDR; Mauritania; Myanmar; Mongolia; Nigeria. *Source: Managing Natural Resource Wealth Trust Fund (MNRW-TF) program document.* ### 3. INTEGRATION AND CLOSE COORDINATION FOR SUCCESS __________________________________ 25 ### 3. INTEGRATION AND CLOSE COORDINATION FOR SUCCESS ### Overview and Rationale - The Managing Natural Resource Wealth Trust Fund (MNRW-TF) is a multi-partner trust fund established in 2011 by the International Monetary Fund (IMF) to help countries in managing natural resource wealth. - The need for revenue mobilization (RM) in resource-rich countries is underscored by: - The Addis Tax Initiative highlighting the need to boost capacity of less-developed countries to finance the Post-2015 Development Agenda. - The recent commodity price slump intensifying urgency to diversify the revenue base and effectively manage resource revenues. - Commodity price volatility placing pressure on exchange rate and macroprudential policies to smooth macroeconomic and financial impacts. - Growing focus on climate change and potential reduced demand for fossil fuels, and in some countries, significant depletion of natural resources requiring effective management of declining revenues. ### Phase 1 Performance and Key Achievements - Phase 1 operated from May 2011, extended to April 2017, with contributions totaling US$24.7 million and partners including the European Union and the governments of Australia, Kuwait, Netherlands, Norway, Oman, and Switzerland. - Boxed summary of key achievements (results to February 2016): - The Steering Committee (SC) approved 43 projects in 22 countries, 8 research projects and 5 conferences/workshops. - Nine countries have reformed (either enacted or introduced to the governing authority) the laws relating to the EI fiscal regimes. - Capacity to use the Fiscal Analysis for Resource Industries (FARI) model increased in 12 countries, with training workshops averaging 20 participants per workshop. - Five countries formed special units within revenue administrations to administer large EI companies. - New or revised frameworks for public financial management are being implemented in 11 countries. - One country reformed governance structure and investment management of its Sovereign Wealth Fund (SWF). - Three countries improved their reporting of natural resource revenues in the national accounts. - Four regional conferences on EI fiscal issues were held (East Africa, Asia-Pacific, Andean region (two)), each with between 60 and 90 participants. - A Washington, DC conference addressed international EI issues; papers used as basis for a book on International Tax Issues for the Extractives Industries to be released in 2016. - Two handbooks released: Administering Fiscal Regimes for Extractive Industries: A Handbook; and Sovereign Asset-Liability Management Guidance for Resource-rich Countries. - A new template for collecting government revenue data from natural resources was developed and field-tested; the Extractive Industries Transparency Initiative (EITI) will collaborate with the IMF in using the template. - A public version of the FARI model has been developed and released, with an accompanying Technical Note and Manual. - A draft guide on specific compilation issues for natural resources in macroeconomic statistics has been completed and will be released online for comment. ### Results-Based Management, Evaluation, and Lessons - A results based management (RBM) methodology has been used to measure and monitor progress and support SC decision-making; Appendix 1 summarizes overall performance and lessons. - The independent midterm evaluation (to April 2014) rated projects very good on relevance and good on other OECD DAC criteria and made recommendations summarized below. - Experience from Phase 1 highlighted project risks, particularly projects that stalled due to lack of sustained government commitment or changes in key officials, underscoring importance of greater ownership by authorities in Phase 2. ### Recommendations from the Midterm Evaluation (summarized) - Strengthen project design, planning and TA delivery by: - Conducting scoping missions. - Setting more focused and realistic objectives, outcomes and time frames. - Defining milestones and preparing road maps. - Conducting more in-depth risk analysis and delivering more hands-on TA with continuity of engagement. - Increase participation of IMF Regional Technical Assistance Centers (RTACs) and regional advisors. - Improve synergies and coordination among Fiscal Affairs Department (FAD) modules and with the IMF’s Legal Department. - Consider providing TA support on monetary and capital markets and statistics under non-TF IMF TA. - Enhance use of research projects and workshops to achieve TF objectives. - Enhance RBM monitoring by disaggregating outcomes and objectives and standardizing scoring across approaches. - Clarify process for dealing with inactive projects. - Enhance efficiency of reporting to the SC. - Improve project budgeting to reduce over-costing of projects. - Appoint a full-time supra-manager in FAD financed by the TF to standardize RBM and distill technical lessons across projects. ### Geographic Coverage and Project Statistics - Regional budget distribution (Figure 1): - Africa: 64% - Asia-Pacific: 29% - Latin America and Caribbean: 6% - Middle East: 2% - Table of eligible and project countries (Table 1): - Total eligible countries: 50 - Africa: 24 eligible (48 percent of eligible countries); 13 project countries (59 percent of project countries) - Asia-Pacific: 11 eligible (22 percent); 5 project countries (23 percent) - Europe: 1 eligible (2 percent); 0 project countries (0 percent) - Middle East and Central Asia: 9 eligible (18 percent); 2 project countries (9 percent) - Latin America and Caribbean: 5 eligible (10 percent); 2 project countries (9 percent) - Total project countries: 22 (100 percent) ### Program Focus and Modules - Phase 1 concentrated on five capacity development modules: 1. EI fiscal regimes, including modeling. 2. EI revenue administration. 3. Macro-fiscal policies and public financial management. 4. Asset and liability management. 5. Statistics for natural resources. - Most Phase 1 projects related to improving EI fiscal regimes and revenue management; fewer projects than expected addressed asset and liability management and statistics. ### Phase 2 (MNRW2) Strategic Priorities and Changes - Phase 2 will build on Phase 1 success with the following emphases: - Targeted and intensive TA engagement, with three broad changes: 1. Expanded scope: greater emphasis on international tax policy and administration issues (given base erosion and profit shifting concerns) and TA on energy subsidy reform. 2. More flexible delivery modes: scope for more intensive mission work, including assigning experts to remain in-country for an extended period or using in-country or regional long-term advisors. 3. Strengthened project design and planning with greater upfront engagement from country authorities through scoping missions and memorandums of partnership with authorities. - Consolidation of the Fiscal Analysis for Resource Industries (FARI) model as a TA-enhancing tool. - Continued analytical work with stronger focus on dissemination and learning via on-line and face-to-face training, conferences, and workshops to support absorption and retention of TA-delivered knowledge. - A refined modular design: retain modules on EI fiscal regime design; EI revenue administration; EI macro-fiscal policies and public financial management; and statistics for natural resources, but replace the module on asset and liability management with a module on exchange rate regimes and macro-prudential policies in resource-rich countries. - Primary focus on low- and lower-middle-income resource-rich countries, with possible expansion by the SC to include some upper-middle-income countries or a region where appropriate. ### Financing and Forward Resource Needs - To achieve Phase 2 objectives, the TF will require funding of around $30 million, covering the six-year period from mid-2016 to mid-2022. This funding is intended to deepen targeted and intensive TA engagement, allow some expansion of country coverage, and address emerging issues. *Source: Managing Natural Resource Wealth Trust Fund (MNRW-TF) program document.* ### 2. MNRW-TF Phase 2 Proposal ### 2. MNRW-TF Phase 2 Proposal ### Objectives and Benefits - The objective for MNRW2 is "to build economic policy and administrative capacities to enable LICs and lower-middle-income countries (LMICs) to derive the maximum benefit from their oil, gas, and mineral resources, so as to facilitate their economic development and poverty reduction goals." - Phase 2 will continue to focus on supporting the proper management of natural resource wealth among developing countries. - Expected broader benefits: - Improved development prospects of beneficiary countries providing a useful demonstration to their peers. - Better management of natural resources yielding important benefits for global commodity markets. - Analytical and policy lessons from the TF representing a global good and strengthening the effectiveness of both development partners and the IMF. - The proposal notes that these expected benefits build on achievements under Phase 1 of the TF and the broader objectives of the trust fund. ### Monitoring, Evaluation, and Results Measurement - A strategic log frame will be used to measure and monitor results; this log frame is identified as "Appendix 2." - The log frame: - Builds on the application of this approach in Phase 1 of the TF. - Is fully consistent with the IMF’s enhanced RBM framework. - Aims at reporting results at a strategic level, complementing and aggregating project-specific RBM indicators. - Reflects the programmatic structure of the TF to provide full accountability for each module. - The IMF enhanced RBM system involves: - Definition of a standardized catalog of TA project "objectives" and "outcomes." - Requirement to define project milestones. - Establishment of a framework for periodic scoring of, and reporting against, objectives, outcomes, and milestones. ### Program Structure and Reporting - The log frame for MNRW2 is distinct from project-level log frames and is intended to aggregate module-level results. - The design of the strategic log frame complements and aggregates project-specific RBM indicators to provide program-wide accountability. ### Program Activity Indicators (as presented) - Numeric indicators and timeline elements included in the proposal text: - 0 - 2 - 4 - 6 - 8 - 10 - 12 - 14 - 12345 - MNRW-TF Modules - 2013 - 2014 - 2015 - 2016 - 13 *Source: MNRW-TF Phase 2 Proposal (MNRW program document).* ### Box 3. Expected Benefits of the MNRW2 ### Box 3. Expected Benefits of the MNRW2 ### For resource-rich countries - Maximization of revenues over the life-cycle of extractive projects, thanks to a fiscal regime that balances government and industry interests, and an effective administration for collecting revenues. - More effective spending of resource revenues, which can assist countries in meeting their sustainable development goals, such as in education and health, with the help of budgetary mechanisms tailored to the large size of resource revenue, and its volatile and finite nature. - Better governance throughout the government by enhancing accountability through transparency in the public service dealing with resource revenues. - More investment in the natural resource sector thanks to an attractive, stable investment climate that induces socially responsible behavior by companies. - Smoother impact on the economy of potentially large and unpredictable swings in commodity prices, in order to support stable economic growth and financial sector stability. - Creation of an information base on the economic impact of natural resources exploitation to inform strategic policy decisions. ### For the global community - Foster economic and social development in low-income countries (LICs) and lower-middle-income countries (LMICs) by using aid money to leverage the development impact of natural resource revenues. - An enlarged and more secure global supply of energy and minerals. - Improved climate for investment and production so that international resource companies can operate consistently with their corporate social responsibility standards and with their home countries’ development policies. ### For the partners - A mechanism for coordinating partner assistance in the area of natural resource wealth management and RM. - The opportunity to participate in discussion of IMF-led analytical and diagnostic tools sponsored by the TF. - Enhanced visibility and greater impact on the ground from leveraging a multi-donor trust fund. ### For the IMF - Improved coordination and knowledge exchange with other TA providers. - IMF’s TA delivery will benefit from the programmatic approach used in the TF and the governance structure emphasizing results orientation and accountability. ### Monitoring and evaluation - Monitoring and evaluation of the MNRW2 will be continuous and overseen by the SC. - Reporting and review arrangements: - Project-specific RBM progress reports will be included in both the annual and midyear reports. - Strategic log frame results will be included in the annual reports only. - An independent midterm evaluation is scheduled in FY2020. - Further refinements to the log frame will be done in consultation with the SC. *Source: MNRW2 (Box 3).* ### Box 4. Key Elements of Memorandum of Partnership ### Box 4. Key Elements of Memorandum of Partnership ### Memorandum of Partnership (MOP): purpose and timing - The MOP will be a formal agreement of cooperation between the IMF and the country authorities. - The MOP should be agreed before the project commences and be discussed during the scoping mission, if undertaken. - The MOP is envisaged to form the basis for the project’s RBM. ### MOP: required elements - Project Description - Project scope, objectives, outcomes, indicators, and timelines. - IMF Project Participation - Proposed technical assistance to be provided by the IMF. - Nature and scope of proposed missions (e.g., headquarters missions, short-term expert visits, and long-term experts). - The number and possible timing of the missions, and the expected outputs (e.g., TA report, training). - Reference to the amount of funds allocated by the TF for the project. - Other Partners’ Inputs and Participation - Any complementary input by bilateral donors to specific country projects, including complementary TA or training, to enhance partner coordination and avoid duplication. - Country Commitment - Identification of a senior official (e.g., Minister, Deputy Minister or Permanent Secretary) as main government counterpart. - Identification of a liaison person for organizational and administrative arrangements. - Government commitment to provide all available data necessary for the project. - Consideration of a steering group to oversee the project to ensure recommendations are properly considered. - For a long-term expert, authorities expected to assist with entry permits and provide work facilities. - Inclusion of regular reporting by the government on reform progress as part of the MOP. - Termination and Suspension of the Project - Specification of circumstances for suspension or termination, including: - Insufficient reform progress by the authorities (e.g., no substantial action on recommendations in the previous 12 months). - External factors, such as security issues, that make it difficult for the project to continue. ### E. Research and Analytical Work (Phase 2) - Continued support for IMF research and analytical work on managing natural resource wealth to identify good or best practice approaches and distill lessons from experiences. - Research proposals should discuss how research results will be taken into account in the design of subsequent capacity development interventions to ensure linkage between analytical work and capacity development. - Results to be disseminated widely to policy practitioners, development partners and other stakeholders via publications, and regional and international workshops and conferences. ### FARI Model (Phase 2) - FARI is a modeling framework developed by FAD to perform EI fiscal analysis. - FARI functions: - Analyses how annual project cash flows over the life of an EI project are shared between investors and the government through detailed modeling of a fiscal regime, economic and financial assumptions, and an EI project example (e.g., a petroleum field or mine). - Built-in analytical routines for Average Effective Tax Rate, Marginal Effective Tax Rate, progressivity and stochastic analysis. - Phase 2 actions: - Continue to consolidate FARI as a TA-enhancing tool. - Continue to refine FARI and its uses to meet the needs of developing countries. - Continue support for use of FARI as a tool for design of EI fiscal regimes and revenue forecasting. - Support development of FARI as a revenue administration tool for comparing actual revenues with model results. - Noted demand driver: public release of the FARI methodology in October 2015. ### F. Outreach and Training (Phase 2) - Continued use of horizontal and peer learning (conferences, workshops) to disseminate issues, practices and policies for managing natural resource wealth. - Design principle: ensure workshops and conferences are cost-effective and well-targeted to deliver best value-for-money. - Support for other training methods: - Development and ongoing provision of on-line training courses and face-to-face courses relating to managing natural resource wealth. - Two courses envisaged: - Macroeconomic Management in Resource-rich Countries; - Energy Subsidy Reform (the latter course has already been developed; TF will support ongoing provision). - Online tools intended to scale up transfer of knowledge to a broader group, including the public, and to prepare officials in advance of TA delivery or follow-up training to promote sustainable capacity development. - External mid-term evaluation of the MNRW-TF noted the importance of training for sustainability. ### Gender considerations in capacity development - Capacity development under the TF will incorporate the IMF’s broader work on gender, focusing on labor force participation, inequality and economic opportunities. - While TA under MNRW2 would not be expected to directly address gender issues given its macro-fiscal, statistical, and macro-financial focus, it will: - Ensure government policies reviewed as part of TA do not have a gender bias. - Use the increased training component to enhance capacity development of women through active promotion of their participation in face-to-face and online courses. - Include the level of women participation as an indicator in the MNRW2 log frame. ### 3. Integration and Close Coordination for Success - Integration of TF operations with other IMF activities and coordination with development partners is essential based on Phase 1 experience. - A. Integration between Capacity Development and IMF Surveillance and Lending - Capacity Development (TA and training) under MNRW2 will continue to be integrated with IMF surveillance and lending. - MNRW2 capacity development engagements expected to provide inputs for structural benchmarks (for IMF lending programs) or policy recommendations (under Article IV consultations). - IMF area department teams will help identify and prioritize capacity development and monitor implementation of MNRW2 TA advice. - IMF capacity development includes policy diagnostics and evaluation, policy design, legal drafting, support for implementation, and follow-up through regular surveillance or program consultations. - IMF functional departments provide specialists to: 1. Advise country authorities on reform agenda and support implementation; 2. Advise IMF area departments on technical issues to support surveillance and lending; 3. Contribute to building and maintaining IMF institutional knowledge in core expertise areas. - B. Full Integration with Other IMF Capacity Development Activities, including through RTACs - TF work is an integral part of IMF capacity development overseen by the interdepartmental Committee on Capacity Building (CCB), chaired by a Deputy Managing Director. - Annual CCB review of capacity development priorities feeds into IMF-wide planning and budget discussions. - Project work plans are developed guided by CCB priorities; part of these work plans may be delivered by the TF after SC endorsement. - Headquarters-based staff deliver TA directly and oversee/backstop IMF-hired short-term and long-term advisors, including RTAC advisors, to ensure quality and consistency. - Division of responsibilities: - HQ-initiated TA addresses complex diagnostic and strategic issues; - RTAC resident advisors and short-term experts provide practical implementation support. - In the MNRW-TF, RTACs are mostly involved in TA related to revenue administration and revenue management (modules 2 and 3). - Project managers will ensure no overlap or inconsistency between MNRW-TF and RTAC TA through close coordination and communication with HQ staff supervising RTAC advisors. - The new RBM will deliver a common platform for reporting on both MNRW-supported TA reforms and RTAC-delivered TA to ensure complementary and synchronized delivery. - C. Coordination with Other Development Partners - Continue to develop synergies with development partners active in natural resource management. - IMF staff and external experts will consult and engage development partners before missions and throughout reform processes. - Close collaboration with the World Bank to avoid overlap and exploit synergies; IMF focuses on macro-fiscal and macro-financial perspectives, World Bank on sector-specific perspectives. - With SC assent, MNRW2 will invite a participant from the World Bank and the EITI to attend as observers of SC meetings to avoid fragmentation and duplication. - Continued collaboration with other TA providers, including Norway Oil for Development Programme, Switzerland SECO, Australia, UN, EC, and UK Department for International Development. - Collaboration with the OECD on international tax issues, including participation in a joint working group with OECD, World Bank, and UN, and work in progress to develop a “tax platform” jointly by IMF, OECD, UN and the World Bank to help coordinate development of toolkits and guidance for developing countries on international tax matters. - Consultation with stakeholders such as the private sector and civil society organizations (CSOs) will continue; project managers typically meet private sector and CSO representatives to obtain perspectives on EI issues. *Source: IMF, MNRW-TF Phase 2 program document (Box 4 and accompanying sections).* ### 4. Governance and Operational Arrangements ### 4. Governance and Operational Arrangements ### Governance Structure - A multi-partner trust fund (TF) is used to achieve synergies and efficiencies in TA funding, partner coordination, global reach, and visibility. - Steering Committee (SC): - Composed of partner representatives and IMF staff; chaired by a partner representative with possible rotation. - IMF staff serve as the Secretariat to the SC. - Committee meetings held annually, with additional meetings as necessary; other stakeholders may be invited as observers when appropriate. - Secretariat ensures a regular flow of information and may consult informally with the SC. - An annual (or biannual if requested by the SC) report on TF activities and project results will be prepared; a version will be made public. - SC functions: provide strategic guidance, set policies and priorities, endorse an annual work plan, review progress and performance, and coordinate TA on managing natural resource wealth by sharing mission-planning information with partners. ### Work Plan - Projects under Phase 2 are initiated within an annual work plan subject to prior SC approval. - Project selection and TA delivery are demand-driven based on identified needs and country requests; IMF area departments work with member countries to identify needs. - TA prioritization criteria: country need, authorities’ commitment to reform, distribution across regions and modules. - TA organized into projects reflecting the modules described in section 2.C. - Work plan includes applied research, conferences, workshops, and training for wider dissemination. - IMF delivers a report on execution of activities under the previously endorsed work plan at each SC meeting. ### Dissemination Policies - Dissemination guided by the IMF’s transparency policies. - TA reports may be shared with SC members with consent of the TA recipient on a no-objection basis and kept confidential. - Sharing TA reports with non-SC development partners is determined case-by-case based on legitimate interest (e.g., engagement in related activities in the beneficiary country). - IMF will continue to encourage countries to publish TA reports. - Operational guidelines for the SC and clarification of roles of SC members and the Secretariat to be agreed at the first SC meeting. ### Accountability and Results Based Management (RBM) - Project-level requirements: - Individual projects must establish a comprehensive log frame at the outset, in line with the IMF’s new RBM System. - Log frames will be consistent with the modules in section 2.C and define inputs, country-level objectives, outcomes, verifiable indicators, and intermediate milestones drawn from the IMF’s new RBM log frame catalog. - TF-level requirements: - A strategic log frame will set goals and monitor portfolio progress (see Appendix 2). - Two types of strategic indicators: (a) results directly attributable to TF work (e.g., implementation of reforms); (b) results partially reflecting TF effects (e.g., resource revenue as a share of GDP). - Modular indicators aggregate project-level results within each module. - Quality control and supervision: - IMF TA departments supervise, carry out, and backstop TA delivery; maintain quality and consistency. - Operational quality control via: (a) screening and selection of experts; (b) regular supervision and HQ backstopping; (c) regular self-assessments against predefined project objectives and outcomes. - Monitoring by Area Departments: - IMF Area Departments will monitor beneficiary countries’ progress in implementing reforms supported by the TF within IMF-supported country programs and surveillance activities. - Information access: - Relevant project status information accessible to Partners via the IMF’s partner portal, including financial information, legal documentation, project documents, progress reports, project status, and self-assessments. - Accountability reporting: - Performance accountability occurs in semi-annual SC meetings with summaries of project and portfolio progress. ### Independent Evaluation - An independent evaluation by outside experts will be conducted after no fewer than three years of operation. - The evaluation is expected to take place in FY2020 and will assess effectiveness and sustainability and formulate recommendations to inform operations for the remainder of the six-year phase and beyond. ### Visibility - The TF will intensify outreach to enhance public profile and partner visibility. - IMF developing operational guidelines on partner visibility and communications for externally-funded capacity development to provide a common recognition framework. - Phase 2 outreach will expand beyond publications to include a website, booklets, partner debriefings, newsletters, conferences/press releases. - Partners will be systematically recognized in outreach activities, with acknowledgement in publications. ### Project Management - A small dedicated TF team will be established to manage the scaled-up operation. - TF team functions: monitor country program performance, ensure high-quality RBM reporting to the SC, strengthen synergies and coordination with other TA providers, and enhance partner visibility. - Proposed team composition: one full-time program manager, one research assistant, and one administrative assistant. ### 5. Financing and Administrative Issues ### Financing (Phase 2 illustrative estimates) - Estimated total cost of MNRW TA under the TF for an initial five-year phase: US$30 million. - Financing sought in advance for the entire five-year period to provide stability and continuity. - Illustrative budget (MNRW-TF Phase II, $'000) — annual and total values preserved exactly: - TA Delivery: FY17 670; FY18 3,120; FY19 3,200; FY20 3,270; FY21 3,350; FY22 3,286; Total 16,896 - Targeted TA: FY17 540; FY18 2,990; FY19 3,060; FY20 3,130; FY21 3,210; FY22 3,286; Total 16,216 - Scoping missions: FY17 130; FY18 130; FY19 140; FY20 140; FY21 140; FY22 0; Total 680 - Research and Analytical Tools: FY17 90; FY18 370; FY19 380; FY20 390; FY21 400; FY22 405; Total 2,035 - Research Projects: FY17 90; FY18 180; FY19 190; FY20 190; FY21 200; FY22 203; Total 1,053 - FARI Country STX Follow-up Visits: FY17 0; FY18 180; FY19 190; FY20 190; FY21 200; FY22 203; Total 963 - Workshops and Training: FY17 0; FY18 1,930; FY19 1,140; FY20 1,170; FY21 1,190; FY22 1,220; Total 6,650 - Workshops & Conferences: FY17 0; FY18 310; FY19 315; FY20 320; FY21 330; FY22 340; Total 1,615 - Training: FY17 0; FY18 1,620; FY19 830; FY20 850; FY21 860; FY22 880; Total 5,040 - Program Management: FY17 355; FY18 360; FY19 370; FY20 580; FY21 390; FY22 400; Total 2,455 - Staff Costs*: FY17 355; FY18 330; FY19 339; FY20 343; FY21 347; FY22 356; Total 2,070 - Independent Evaluation: FY17 0; FY18 0; FY19 0; FY20 200; FY21 0; FY22 0; Total 200 - Steering Committee: FY17 0; FY18 30; FY19 31; FY20 37; FY21 43; FY22 44; Total 185 - Sub-total: FY17 1,116; FY18 5,780; FY19 5,091; FY20 5,410; FY21 5,330; FY22 5,310; Total 28,037 - TF Management Fee (7%): FY17 78; FY18 405; FY19 356; FY20 379; FY21 370; FY22 372; Total 1,960 - Total: FY17 1,194; FY18 6,190; FY19 5,447; FY20 5,788; FY21 5,700; FY22 5,682; Total 30,000 - Budget category shares illustrated (preserved as listed): - TA Delivery 60% - Research & Analytical Tools 7% - Workshops & Conferences 6% - Training 18% - Program Management and Administration 9% - Indicative TA Delivery Budget distribution by module (listed in source order): 1. EI Fiscal Regimes 2. Revenue Administration 3. Public Financial Management 4. Exchange Rate and Macroprudential Policies 5. Statistics ### Administrative Arrangements - Contributions made into the multi-partner MNRW subaccount under the IMF’s Framework Administered Account for Selected Fund Activities (the “SFA Instrument”). - An operating unit for Phase 2 will be established under the Subaccount to receive contributions and finance MNRW-TF activities; all funds will be commingled. - Basis for financial arrangements: a Letter of Understanding, subject to Subaccount terms and the SFA instrument. - IMF administers and accounts for partner contributions per its financial regulations and applicable practices; if outside consultants/experts are recruited, IMF normal procedures apply. - Procurement beyond a threshold amount (currently US$50,000) requires a competitive bidding process with at least three competitive bids. - IMF charges project-related TA costs on actual cost basis, including IMF staff time, and charges a trust fund management fee of 7 percent. - Partners receive reports on subaccount expenditures and commitments; subaccount operations are subjected to annual audits. - Separate reporting on TF budget execution provided at each SC meeting and available via the IMF’s partner portal. ### Appendix 1 — Key High-Level Results and Lessons from MNRW-TF Phase 1 ### High-level results mapped to objectives - Objective 1 (EI fiscal regimes): - Nine countries have reformed (either enacted or introduced to the governing authority) laws relating to EI fiscal regimes based on IMF advice. - Capacity to manage resource wealth increased in 12 countries using the IMF’s FARI model; training provided in workshops with an average of 20 participants per workshop. - Four regional conferences held (East Africa, Asia-Pacific, Andean region (2 conferences)) with between 60 and 90 participants each. - A Washington, DC conference produced papers used as basis for a book on International Tax Issues for the Extractives Industries to be released in 2016. - A public version of the FARI model released alongside a Technical Note and Manual. - Objective 2 (Revenue Administration): - Five countries formed special units within revenue administrations to administer large EI companies. - Release of Administering Fiscal Regimes for Extractive Industries: A Handbook, translated into French and Spanish. - A Washington DC conference held with 70 participants from 12 eligible countries. - Objective 3 (Public Financial Management): - New or revised PFM frameworks being implemented in 11 countries to better manage natural resource revenues. - Objective 4 (Sovereign asset-liability management): - One country reformed governance and investment management of its Sovereign Wealth Fund (SWF). - Release of a handbook on Sovereign Asset-Liability Management Guidance for Resource-rich Countries. - Objective 5 (Statistics): - Three countries improved reporting of natural resource revenues in national accounts. - A new template for collecting government revenues from natural resources developed and field-tested; EITI announced collaboration with the IMF to use the template. - A draft Guide to Analyze Natural Resources in the National Accounts released online for comment. ### Project activation and characteristics (2011–2016) - Total projects activated: 56 - 43 country projects in 22 countries: - 30 currently active projects; - 9 completed projects — 8 of these were evaluated by the independent midterm evaluation: 6 assessed as “very good” and 2 assessed as “good”; - 2 projects terminated (Mongolia module 1; Niger module 1) due to lack of commitment or fragmentation of responsibilities; - 2 projects never made active due to lack of commitment (Iraq module 4; Uganda module 4). - 8 research projects — 5 still active; 3 completed resulting in publications or input to other work. - 5 conferences — 4 undertaken. ### RBM outcomes and lessons learned - Of 37 active projects at October 2015: - 38 percent assessed as “largely” or “fully achieved;” - 49 percent assessed as “partially achieved;” - 14 percent assessed as “not achieved;” - Success factors identified: - Strong political and institutional commitment; - Good inter-ministerial and agency cooperation; - Timely and relevant TA with a range of skills (policy, modeling, legal drafting). - Causes of underperformance: - Security issues (e.g., Mali); - Health crises (Ebola in Sierra Leone and Guinea); - Lack of commitment and responsiveness by authorities. - Midterm Evaluation recommendations incorporated into MNRW2 design: - Better project design, planning and TA delivery with more focused and realistic objectives, outcomes, time frames, milestones, road maps, risk analysis, more hands-on TA, continuity of engagement. - Increased participation of RTACs and regional advisors. - Improved synergies and coordination among FAD modules and with IMF Legal Department. - Enhanced use of research projects and workshops to achieve TF objectives. - Enhanced RBM as a monitoring tool. - Clarify process for dealing with inactive projects. - More efficient reporting to the SC. - Improved project budgeting to reduce over costing of projects. *Source: IMF — 4. Governance and Operational Arrangements, MNRW-TF Phase 2 documentation.* ### Box 5. MNRW-TF Phase 1 Case Studies ### Box 5. MNRW-TF Phase 1 Case Studies ### Mauritania (Module 1, 2011–2014) - The module 1 project resulted in reforms that contributed to improved revenue performance. - A withholding tax at 15 percent was levied on any transaction involving non-residents to limit profit shifting through subsidiaries, which raised revenue equivalent to 0.33 percent of GDP in 2013. - In March 2014, the Mauritanian parliament approved changes to the mining code with mining companies being subject to standard VAT (a zero rate for exporters), avoiding their VAT exemptions. - These law modifications are expected to reinforce tax revenue performance (excluding natural resources), which improved by around 13 percent between 2010 and 2015. - The project provided a forecasting model of resource revenue to the Mauritanian authorities. - Success factors: strong political support and management commitment from key ministries. ### Guinea (Initial TA program, 2012–2015, Module 1) - Fiscal regime design work largely successful: the fiscal provisions of the Mining Code were completely reviewed, redrafted and adopted by the National Assembly; related Fiscal Regulations and Model Agreement were redrafted and prepared. - VAT regime for mining companies significantly strengthened. - Roughly half of the mining projects were modeled; remaining projects depend on data to be provided by mining companies. - Commencement of the public financial management project (module 3) in 2014 enhanced prospects for sustained reforms; initial results included: - Formulation of a strategy for developing capacities related to fiscal forecasting and budgeting in the context of the expected surge of mining resources. - A framework to strengthen fiscal governance and transparency of parastatals, including governmental entities involved in managing natural resources. - Implementation of a VAT refund system for the mining sector. - Success factors: very strong support from all relevant ministers and the President; strong commitment at high and technical levels despite severe political/economic headwinds and the Ebola crisis. - Ongoing challenge: weak capacity, being addressed by authorities. ### Kenya (Module 1, 2013–2016) - Project produced several fiscal regime reforms: - Development of a schedule in the new model production sharing contract. - A revised income tax law for extractive industries now in force reflecting much of the project’s policy and legal advice. - A draft Mining Bill incorporating project suggestions. - The FARI model was critically used; workshops transferred the model to local officials. - High-profile exposure: “Kenya Rising” conference (Nairobi, September 2013) and EAC workshop on fiscal management of oil and gas in East Africa (January 2014). - Success factors: strong commitment of senior government officials; lateral communication across agencies; relationships built with Cabinet Secretaries and Principal Secretaries; combination of policy, modeling, and legal drafting skills delivered timely. - Capacity constraints remain; addressed via workshops and close liaison with the World Bank’s large TA program in Kenya. - Resulting demand: authorities sought an MNRW-TTF project on revenue management (module 3) and showed interest in a revenue administration project (module 2). ### Mongolia (Macro-fiscal and PFM - Module 3, begun 2013, ongoing) - Despite fiscal challenges from the fall in commodity prices and production slowdown, the project produced important reforms: - Significant expansion in scope and sophistication of the medium-term fiscal framework (MTFF), including quantifying fiscal risks and measures to manage them. - Development of cash flow forecasting models to manage seasonal variations in highly volatile revenues. - Support in drafting a sovereign wealth fund law aimed at inter-generational savings, leading in early 2016 to final agreement by Parliament to create such a fund; complementary to the asset and liability management (module 4) project. - Ministry of Finance has been a strong supporter of these reforms. - Principal headwind: strong political pressures to increase spending due to infrastructure needs in a large, sparsely populated country. - Project benefited from close cooperation with the World Bank (MTFF enhancements) and the U.S. Treasury Department (cash management). ### Cross-cutting success factors observed across Phase 1 case studies - Strong political support and management commitment at senior and technical levels. - Use and transfer of modeling tools (e.g., FARI, forecasting models). - Integration of policy, legal drafting, and modeling skills. - Close cooperation with other development partners (World Bank, U.S. Treasury). - Persistent constraint: limited institutional capacity requiring ongoing capacity building. *Source: Managing Natural Resource Wealth (MNRW-TF) Program Document (November 2016), International Monetary Fund Institute for Capacity Development.* --- ### Phase 2 Strategic Logical Framework — Key Objectives and Verifiable Indicators - STRATEGIC OBJECTIVE: Assist low and lower-middle income countries to derive maximum benefit from their oil, gas and mineral resources. - Impact indicators (examples) - Average resource revenues as a share of GDP increases in MNRW-TF countries. - Average potential government take for a standard resource revenue project in MNRW-TF countries (WoRLD 1/; Project managers; FARI Model). - Outcome areas with verifiable indicators and source attribution: - Better management of EI revenues - A significant majority of participating countries implement reforms to improve management of EI revenues by having: - Medium term expenditure estimates; - Coverage and comparability of in-year budget reports; - Budget classification; - Information on revenue collections; - Consolidation of cash balances; - Reporting of contingent liabilities and other fiscal risks. - Source: Project managers. - Effective exchange rate and macroprudential policies - A significant majority of participating countries have improved exchange rate regimes and macroprudential policies by: - Having an exchange rate that responds to changes in supply and demand, and tools and operational procedures in place to facilitate price discovery while managing financial stability risks; - Establishing a macroprudential policy body with the mandate to implement macroprudential policy, and having a legal framework in place. - Source: Project managers. - Improved statistics for natural resources - A significant majority of participating countries publish EI revenue data in line with the IMF template and publish resource and non-resource GDP separately per IMF guidance. - Source: Project managers. - Objective-specific targets and indicators (selected highlights) - OBJECTIVE 1: IMPROVED EI FISCAL REGIMES - Result 1.1: Adoption of amended EI fiscal regimes - 10 participating countries have amended their fiscal regimes broadly in line with IMF advice. - Using the FARI model, estimated EI revenue potential is improved due to fiscal regime reforms in participating countries. - Source: Project managers. - OBJECTIVE 2: ENHANCED EI REVENUE ADMINISTRATION AND COLLECTION - Result 2.1: Organizational arrangements - 8 participating countries with a clear organizational structure along functional lines and/or taxpayer segments established and operating for the EI sector. - Source: Project managers. - Result 2.2: Risk management for the EI sector - 8 participating countries that have compliance risks identified, assessed, ranked, and quantified for the EI sector. - 8 participating countries that have compliance improvement programs in place to mitigate identified risks for the EI sector. - Source: Project managers. - OBJECTIVE 3: BETTER MANAGEMENT OF EI REVENUES (PFM) - Result 3.1: MTFF and controls - 10 participating countries that have revised or introduced a credible medium-term fiscal framework integrated with the budget that includes EI revenues. - 10 participating countries with better controls over EI revenues and expenditure commitments and payments. - Source: Project Managers. - Result 3.2: Fiscal reporting quality - 10 participating countries that have budget classifications and charts of accounts incorporating specific EI details in line with international accounting standards. - Source: Project Managers. - Result 3.3: Asset and liability management - The EI revenues and expenditures are progressively conducted through a treasury single account consistent with international best practices in 10 participating countries. - 10 countries that disclose and manage contingent liabilities and other fiscal risks related to EI operations more comprehensively. - Source: Project Managers. - OBJECTIVE 4: EFFECTIVE EXCHANGE RATE AND MACROPRUDENTIAL POLICIES - Result 4.1: Exchange rate flexibility - 4 participating countries in which: - The exchange rate fluctuates—within the bounds of any explicit policy on leaning against short-term volatility—with changes in the demand and supply of FX, and appropriate instruments and operational procedures exist for the conduct of FX intervention. - The transition plan to a more flexible exchange rate regime is appropriately sequenced, and prudential regulations are developed to ensure FX risks are adequately monitored and managed in the financial sector. - Source: CD-PORT. - Result 4.2: Macroprudential framework - 4 participating countries in which: - Legislation is enacted to establish an institutional framework granting the mandate and powers over tools to conduct macroprudential policy to a particular body or committee. - A systemic risk monitoring framework is established and implemented, and the authorities have established a framework to map the assessment of risk into policy action. - Source: CD-PORT. - OBJECTIVE 5: IMPROVED STATISTICS FOR NATURAL RESOURCES - Result 5.1: Data on government revenues from natural resources - Participating countries have charts of accounts and budget classifications that provide the detail necessary to complete the EITI summary data template in line with GFSM 2014 recommendations. - Source: Project managers. - Result 5.2: National accounts for natural resource industries - Pilot countries have developed capacity for compiling national accounts covering natural resource industries. - A workshop conducted in collaboration with EITI counterparts to support monitoring of the UN’s Sustainable Development Goals, particularly Goal 17 on strengthening domestic resource mobilization. - Source: Project managers; CD-PORT. - OBJECTIVE 6: TOPICAL RESEARCH AND ANALYTICAL WORK - Result 6.1: Identification of good or best practices - 3 publications are produced setting out good or best practices and lessons learned in relation to topics related to managing natural resource wealth. - Source: CD-PORT. - OBJECTIVE 7: CAPACITY DEVELOPMENT THROUGH LEARNING OPPORTUNITIES - Result 7.1: IMF training - Number of participants from MNRW eligible countries in online or face-to-face IMF courses relating to management of natural resource wealth. - Number of women, and percentage of participants who are women, participating in these courses. - Source: ICD Training Statistics. - Result 7.2: Shared learnings by senior officials - At least one regional/international conference or workshop per year for MNRW eligible countries to exchange views and experiences in managing natural resources wealth. - Source: Project managers. - MNRW-TF summary reporting on outputs (examples) - Number of TA missions completed (total and by module). - Number of TA reports produced (total and by module). - Number of workshops completed. - Number of research papers published. - Number of people trained (disaggregated by online and face-to-face and by sex and region). *Source: Managing Natural Resource Wealth (MNRW-TF) Program Document (November 2016), International Monetary Fund Institute for Capacity Development.* --- ### Appendix 3 — Eligibility and Country Coverage (high-level points) - The list of countries satisfying eligibility criteria is based on the World Bank country classification at 1 February 2016 and satisfaction of resource revenue or export criteria; EITI countries are those that do not satisfy the revenue/export criteria but are EITI compliant or candidates. - The addition of Guyana was endorsed by the Steering Committee in June 2017 and the Gambia in June 2018. - Appendix lists Low-Income Countries and Lower-Middle-Income Countries meeting eligibility criteria (countries named in the Appendix include, among others: Madagascar; Malawi; Mali; Mozambique; Niger; Sierra Leone; South Sudan; Tanzania; Togo; Uganda; Papua New Guinea; Philippines (EITI country); Sao Tome and Principe; Senegal (EITI country); Solomon Islands; Sudan; Syrian Arab Republic; Tajikistan; Timor-Leste; Ukraine (EITI country); Uzbekistan; Vietnam; West Bank and Gaza; Yemen, Rep.; Zambia; Afghanistan; Burkina Faso; Cambodia; Central African Republic; Chad; Congo, Dem. Rep. of; Ethiopia (EITI country); The Gambia; Guinea; Liberia; Bolivia; Cameroon; Congo, Rep. of; Cote d’Ivoire; Ghana; Guatemala; Guyana; Honduras (EITI country); Indonesia; Kenya; Kyrgyz Republic; Lao PDR; Mauritania; Myanmar; Mongolia; Nigeria). --- _Source: https://www.imf.org/-/media/files/capacity-developement/mnrw/mnrw-program-2018.pdf_