## 1ginea2019002 ## Source details **Canonical URL:** [1ginea2019002](https://www.imf.org/-/media/files/publications/cr/2019/1ginea2019002.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2019/1ginea2019002.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2019/1ginea2019002.pdf.json) --- ### Mission, methodology, and deliverables - IMF Fiscal Affairs Department (FAD) and World Bank mission to Conakry, May 3–17, 2018; mission leader: Mr. Jean Pierre Nguenang (senior economist, FAD). - Conducted a Public Investment Management Assessment (PIMA) based on the revised April 2018 PIMA methodology. - Final presentation of principal findings and recommendations made to: - Ms. Malado Kaba, Minister of Economy and Finance - Ms. Kanny Diallo, Minister of Planning and International Cooperation - Mr. Mohamed Doumbouya, Minister of Budget ### Executive summary — key statistics and trends - Public investment averages: - 7 percent of GDP between 2012–15. - 4 percent of GDP between 2000–10. - Capital expenditure execution rates: - 42 percent in 2015. - 75 percent in 2017. - Financing mix: - On average, close to 70 percent of the investment effort financed from domestic resources. - Comparison with peers (2005–15): public investment in Guinea below peers by about - 2.5 percent of GDP (developing countries), - 2.6 percent of GDP (comparable African countries), - 2.8 percent of GDP (sub-Saharan Africa). - Public capital stock (2015): - Guinea: 57 percent of GDP. - Comparator SSA countries: 120 percent of GDP. - Efficiency gap: - Guinea’s efficiency gap relative to the efficiency frontier: roughly 50 percent. - SSA average efficiency gap: 40 percent. - World average efficiency gap: roughly 30 percent. - PPPs and alternative financing: - DNPEIP inventory (end-2017) indicates some 20–25 PPP contracts signed between 2012 and 2017 (DNPEIP inventory excludes Souapiti). - Aggregate size of PPP contracts signed between 2012 and 2017: roughly 58 percent of GDP. - Contracts under execution at end-2017: two contracts representing about 0.4 percent of GDP (0.2 percent Kaloum 5 and Kaloum 3 thermal plants; 0.2 percent ONOMO hotel complex). ### PIM institutional overview — strengths and weaknesses - Institutional strength: more strengths than weaknesses in the legal/institutional framework, but incomplete. - PIM effectiveness: more weaknesses than strengths in practice. - Principal institutional strengths: - Adherence to debt limit thus far (ECOWAS convergence criteria transposed in LORF of July 27, 2012). - Quality of the PNDES as strategic reference. - Capital expenditures approved by the National Assembly; administrative public entities had limited resources (4 percent of the total government budget in 2017). - Principal recurring weaknesses across planning, allocating, and implementing phases: - PPP framework not finalized; all PPPs contracted mainly via direct negotiation. - Most domestically financed projects in 2017–18 lacked economic and financial evaluations. - Annual/multiyear capital spending ceilings by ministries not operational. - Recurrent and capital budgets negotiated separately, causing inconsistencies and under-protection of investment expenditures. - No standard methodology to estimate and budget maintenance; routine and periodic maintenance under-budgeted. - Procurement and cash flow plans insufficiently harmonized; no time limits for BCRG payments. - Regulations inadequate for systematic ex post review; asset records incomplete; financial statements omit nonfinancial asset values and fixed asset depreciation. ### Planning and allocation — detailed findings - Fiscal rules and debt: - ECOWAS rule transposed in LORF; 70 percent limit on total debt-to-GDP. - No limits on outstanding government guarantees or explicit PPP commitments in existing law/decrees. - IMF-supported ECF program quantitative limit: non-concessional borrowing up to US$1.85 billion (US$1.2 billion for Souapiti; US$650 million for priority infrastructure). - Medium-term macro-fiscal framework: - MTBF required by LORF; MTBF does not distinguish between ongoing and new projects. - Credibility issues: example differences between 2018–20 DPBP and PLF 2018 (GNF billions; differences shown as percent): - Total expenditure: DPBP 19,229 ; PLF 2018 20,156 ; Difference 4.8% - Defense: DPBP 1,540 ; PLF 1,527 ; Difference -0.9% - Agriculture: DPBP 1,174 ; PLF 627 ; Difference -46.6% - Public works: DPBP 1,889 ; PLF 2,334 ; Difference 23.6% - Health: DPBP 1,123 ; PLF 1,305 ; Difference 16.2% - National Education and Literacy: DPBP 1,804 ; PLF 1,461 ; Difference -19.0% - Higher Education: DPBP 1,110 ; PLF 1,258 ; Difference 13.3% - Energy and Water Supply: DPBP 2,610 ; PLF 3,029 ; Difference 16.0% - National and sectoral planning: - PNDES (2016–20) published and costed but projects not adequately prioritized nor well aligned with sectoral strategies. - Sectoral strategies uneven; Ministry of Education strategy absent; many sector strategies lack project lists, costs, or results frameworks. - Coordination with SNGs and transfers: - Legal provisions exist for SNG planning (PDL, PDR, PAI) but consolidation and methodologies not defined; regional councils not yet established. - Communes’ investment expenditures estimated at less than 0.4 percent of the government budget. - FNDL assets estimated at GNF 286.52 billion for 2019 and GNF 479.56 billion in 2020 (risk of quadrupling communal budgets when operational). - Project appraisal and feasibility: - Circular for 2019–21 PIP requires feasibility studies to accompany project information forms but omits methodology and essential content requirements. - Domestically financed projects often lack socioeconomic analyses; externally financed projects typically include comprehensive studies. - PEFA review: of 23 major projects reviewed, economic analyses were conducted for only 11. - Post-Ebola Plan: of 113 projects, feasibility studies prepared for 34; 32 percent of those domestically funded. ### Implementation and asset management — detailed findings - Procurement: - Procurement Code promotes open procedures; ARMP independent and DNMP maintains procurement database. - DNMP registrations (five highest spending ministries, 2016–Q1 2018): - Public tender: No. contracts 234; % 80%; Total amount (GNF billions) 14,863.2; % 36% - Direct negotiation: No. contracts 29; % 10%; Total amount (GNF billions) 25,501.1; % 62% - Limited competition: No. contracts 30; % 10%; Total amount (GNF billions) 770.2; % 2% - Total: No. contracts 293; % 100%; Total amount (GNF billions) 41,134.5; % 100% - Large-value contracts often awarded by direct negotiation; statutory 10 percent limit on direct negotiation exceeded in practice. - Availability of funding: - Cash flow programming incomplete; no established time limits for BCRG payment of expenses. - TSA not implemented; many external donor project accounts held at commercial banks. - DNTCP survey: 73 project accounts on BCRG books totaling GNF 79,859,560,900, and 74 project accounts at commercial banks. - Treasury float for 2018 Title V expenditures: GNF 52,781,330,316 as at May 9, 2018. - Portfolio management and ex post review: - Regulations insufficient for effective monitoring and ex post review; transfers of appropriations allowed but not transparent. - Ex post reviews of major projects are infrequent; donors’ ex post reviews rarely published. - DNIP lacks human and financial resources for consolidated physical monitoring. - Project management and audits: - No national project management manual; project adjustments not standardized. - No major investment project has undergone an ex post audit to date. - Court of Audit scheduled future audits but none covered major projects so far. - Asset monitoring and accounting: - Asset records incomplete and out of date. - Financial statements do not present value of nonfinancial assets or fixed asset depreciation. - DGPBP compiled a buildings inventory in 2007 covering 27,000 properties and is updating it. - LORF provides for gradual implementation of asset accounting in 2019. ### Priority recommendations (selected, with leads and timing) - Strengthen PPP regulatory and procedural framework (Lead: DNPEIP, ACGPMP, DNMP; timing: 2019–2021) - Cap explicit commitments for PPPs, open unsolicited proposals to competition, finalize implementing decrees for Law 2017/AN of July 4, 2017. - Establish independent review and stricter selection criteria (Lead: DNIP; timing: 2019–2020) - Prepare manual for preparation, appraisal, and selection of priority investment projects; discontinue budgeting projects without feasibility studies beginning with the 2020 budget law; create bank of mature projects. - Strengthen investment budgeting and maintenance funding (Lead: DNIP, DNB; timing: 2019–2020) - Implement multiyear commitment authorizations and appropriations carryovers; hold a single budget conference addressing both recurrent and investment budgets beginning with the proposed 2020 budget law; prepare guides for estimating and budgeting maintenance costs; introduce a specific line item for projected maintenance expenses in the MTEF (2019). - Increase available funding and improve cash management (Leads: Ministries, DNB, DNTCP; timing: 2019–21) - Harmonize procurement, commitment, and cash flow plans; strengthen the TSA and gradually incorporate donor funds; rationalize payment time limits by the BCRG; consider medium-term financing instruments (e.g., Treasury notes). - Operate capital project monitoring, management, and ex post review mechanism (Leads: Ministries, DNIP, DNB, DNTCP, ACGPMP; timing: 2019–21) - Immediately survey all projects ongoing for at least 10 years before continuing funding for the 2020 budget law; prepare consolidated semiannual/annual reports on implementation of major projects; conduct and publish ex post external audits of major projects. - Strengthen monitoring of public assets (Leads: DGPBP, DNCMM, ministries, DNTCP; timing: 2019–21) - Continue updating government real property records; prepare technical information forms for asset appraisal and accounting; pool asset information across agencies. - Finalize and implement IT systems (Leads: DNIP (MPCI), MB, MEF; timing: immediate–ongoing) - Finalize SIGPRE (Integrated Project and Results Management System) and SIGMAP (procurement system) designs and implement them; link project management, monitoring, and procurement data. ### Action plan highlights and external support - Annex I maps priority recommendations to technical assistance: - AfDB, AFD, EU, IMF, World Bank and bilateral partners involved in SIGPRE, cash flow management, TSA implementation, procurement and ex post audit support, asset inventory and appraisal, and capacity development. - Notable timing markers across the Action Plan: 2019, 2020, 2021 for legal/regulatory finalization, institutional operationalization, and capacity-building measures. ### Ratings snapshot (selected PIMA scores; institutional strength / effectiveness) - Fiscal objectives and rules: 2 / 2 - National and sectoral planning: 2 / 2 - Project appraisal (major projects): 1 / 1 - Multiyear budgeting — capital spending by ministry/sector: 3 / 2 - Budget comprehensiveness — capital spending undertaken through the budget: 3 / 3 - Budgeting for investment — total project costs published: 1 / 1 - Maintenance funding — standard methodology in place: 1 / 1 - Public contracts (procurement process openness): 2 / 1 - Availability of funding — integration of donor funding into main government accounts: 3 / 1 - Portfolio management and oversight — monitoring during implementation: 1 / 2 - Management of project implementation — ex post audits routinely undertaken: 2 / 1 - Monitoring of public assets — nonfinancial asset values recorded in government accounts: 1 / 1 *Source: Extracted Executive Summary, chapter findings, and Annexes from the PIMA assessment for Guinea (IMF Fiscal Affairs Department and World Bank mission, Conakry, May 3–17, 2018).* ### PREFACE __________________________________________________________________________________________ 7 ### PREFACE ### Mission mandate and methodology - At the request of the Guinean authorities, a mission from the International Monetary Fund (IMF) Fiscal Affairs Department (FAD) and representatives of the World Bank visited Conakry from May 3–17, 2018. - The mission conducted a Public Investment Management Assessment (PIMA) based on the revised April 2018 PIMA methodology. - The mission was led by Mr. Jean Pierre Nguenang, senior economist, FAD. ### Mission team and contributors - Core mission members: - Mr. Jean Pierre Nguenang (senior economist, FAD) — mission leader - Mr. René Tapsoba (economist, FAD) - Messrs. Pierre Roumegas and Daniel Tommasi (public financial management experts, FAD) - Ms. Fabienne Mroczka (senior public financial management specialist, World Bank) - Mr. Abel Bove (governance specialist, World Bank) - Conakry-based contributors: - Mr. Ephrem Ghonda (resident advisor, IMF) - Mr. Alpha Mamadou Mbah (public procurement specialist, World Bank) - Ms. Murielle Edon Babatounde (governance specialist, World Bank) ### Institutions, stakeholders, and meetings - Meetings were held with institutions of the Guinean Presidency, including: - Central Project Studies Bureau (BCEP) - Large Projects and Contracts Management and Oversight Unit (ACGPMP) - National Directorate of Public Buildings (DGPBP) - The mission met with the Court of Audit. - Working sessions were held with directorates and units within: - Ministry of Economy and Finance (MEF) - Ministry of Budget - Ministry of Planning and International Cooperation (MPCI) - National Directorate of Public Investment (DNIP) - Technical Programming Support Bureau (BTAP) - National directorates of budget; government assets and private investments; materials accounting and equipment; Treasury and public accounting; plans and long-term planning; government contracts oversight; debt; and official development assistance (ODA). - Sectoral ministry engagement included senior officials from: - Agriculture - Education - Health - Public Works and the Road Maintenance Fund (FER/RER) - Energy and Water Resources - Regional Administration and Decentralization (MATD) - The mission also met with representatives of several of Guinea's technical and financial partners (TFPs). ### Deliverables and engagement with authorities - At the end of the visit, the mission presented its principal findings and recommendations to: - Ms. Malado Kaba, Minister of Economy and Finance - Ms. Kanny Diallo, Minister of Planning and International Cooperation - Mr. Mohamed Doumbouya, Minister of Budget ### Acknowledgements - The mission expressed special thanks to: - The Executive Secretary of the Technical Monitoring Unit for Economic and Financial Programs - The National Director of Public Investment and key members of their staffs - The Guinean authorities for their warm welcome, cooperation, and logistical support - Mr. Jose Sulemane, IMF resident representative, and his staff for logistical support *Preface of the PIMA mission report, IMF Fiscal Affairs Department and World Bank mission to Conakry, May 3–17, 2018.* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Overview - The mission evaluated public investment management (PIM) in Guinea using the Public Investment Management Assessment (PIMA) methodology (revised April 2018). - The report presents public investment trends, the public investment efficiency gap, assessment results, and recommendations to improve PIM in Guinea. - Objective: supplement the March 2018 Public Expenditure and Financial Accountability (PEFA) assessment. ### Public investment trends and funding - Average public investment: - 7 percent of GDP between 2012–15. - 4 percent of GDP between 2000–10. - Execution rate of capital expenditure: - 42 percent in 2015. - 75 percent in 2017. - Financing mix: - On average, close to 70 percent of the investment effort was financed from domestic resources. - Comparison with peers: - Public investment in Guinea was below comparable countries during 2005–15 by about 2.5 percent (developing countries), 2.6 percent (comparable African countries), and 2.8 percent of GDP (sub-Saharan Africa). - Historical notes: - Public investment surged in 2009 due to increased military spending tied to multiyear contracts awarded outside procurement procedures; spending reduced to a pre-military regime average of 3.8 percent of GDP after audits and restoration of budget discipline in 2011. - With IMF support, public investment rose to 7 percent of GDP between 2012 and 2013. - Public investment declined following the Ebola epidemic in 2014 and resumed an upward trend in 2015. - Private investment fell considerably since 2009 with a sharp decrease in its contribution to total investment. ### Public investment efficiency gap - Guinea’s efficiency gap relative to the efficiency frontier is roughly 50 percent. - Comparative gaps: - Average efficiency gap for SSA countries: 40 percent. - Average efficiency gap worldwide: roughly 30 percent. ### Institutional PIM framework and effectiveness (summary) - General assessment: - The institutional PIM framework has more strengths than weaknesses, though incomplete. - PIM effectiveness shows more weaknesses than strengths. - Principal institutional strengths: - Adherence thus far to the limit on total debt as a percentage of GDP. - Quality of the PNDES as a positive step toward strengthening national and sectoral planning. - Capital expenditures approved by the National Assembly; administrative public entities had limited resources (4 percent of the total government budget in 2017). - Principal weaknesses affecting PIM efficiency across planning, allocating, and implementing phases (detailed below). ### Planning / Allocating — key weaknesses - PPPs: - Guinea recently signed roughly 20 PPP contracts through direct negotiation. - The institutional framework for PPPs is not yet finalized, representing potential unevaluated financial risk. - Project appraisal and selection: - Most major domestically financed projects in the 2017 and 2018 budget did not undergo economic and financial evaluations or a rigorous selection process. - Annual/multiyear ceilings: - Procedure for establishing annual and/or multiyear capital spending ceilings by individual ministries is not operational, undermining prioritization. - Budget process: - Separate budget negotiations for recurrent and capital budgets result in inconsistencies in classification of expenditures. - Protection of investment expenditures: - Investment expenditures are not adequately protected during budget execution; financing of ongoing projects may be discontinued to finance new projects. - Maintenance budgeting: - Budget nomenclature provides a framework to budget for maintenance costs, but no standard methodology exists to estimate and budget these expenditures, leading to under-budgeting and deterioration of assets. ### Implementing — key weaknesses - Procurement and payments: - Procurement and cash flow plans are insufficiently harmonized. - No time limits are established for effective payment of expenses by the Central Bank of the Republic of Guinea (BCRG), causing delayed payments and delayed project implementation. - Oversight and ex post review: - Existing regulations are inadequate to ensure effective oversight and ex post review of domestically financed projects, but they allow transfers of appropriations which are implemented in practice. - Adjustments are made during project implementation without standardization. - Ex post audits of major investment projects (including some externally financed projects) are not systematically conducted. - Asset monitoring: - Monitoring of public assets is hindered by the lack of a final, detailed regulatory and operational framework. - Asset records are incomplete. - Financial statements do not reflect the value of nonfinancial assets or capture fixed asset depreciation. ### Critical recommendations (high-level) - Strengthen the regulatory and procedural framework for PPPs: - Cap explicit commitments under PPPs. - Open unsolicited proposals to competition. - Establish independent review and stricter selection criteria: - Prepare rigorous project selection and prioritization criteria. - Discontinue budgeting funds for projects that lack feasibility studies beginning with the 2020 budget law. - Strengthen investment budgeting and maintenance funding: - Implement multiyear commitment authorizations for investment expenditure. - Hold single budget conferences addressing both recurrent and investment budgets beginning with the 2020 budget law. - Increase funding availability through better cash management: - Harmonize procurement and cash flow plans, including implementation of the Treasury single account (TSA). - Establish time limits for payment by the BCRG. - Implement capital project monitoring, management, and ex post review: - Immediately conduct a survey of all projects ongoing for at least 10 years before continuing funding in the 2020 budget law. - Prepare a consolidated semiannual/annual report on the physical and financial implementation of major projects. - Prepare and systematically review completion reports for major projects. - Strengthen monitoring of public assets: - Continue updating government real property assets. - Develop technical guides covering all government accounting standards to prepare the valuation of assets. ### PIMA summary heatmap — notable items (selected highlights) - Fiscal objectives and rules: - LORF of July 27, 2012 establishes compliance with ECOWAS convergence criteria including a limit on debt, but no limit on amounts of commitments with respect to PPPs. - Total amount of PPP contracts signed exceeds 50 percent of GDP. - Priority: Limiting explicit PPP commitments and strengthening control of PCs and SNGs debts and liabilities — High importance. - Project appraisal: - No formal procedures or tools for project preparation and appraisal; capacities to appraise major projects are weak. - Effectiveness: Weak. - Importance: High — projects are of poor quality (under- or over-estimation of costs, lengthy implementation periods). - Multiyear budgeting: - LORF introduced multiyear approach; indicative multiyear ceilings provided. - Three-year capital spending projections published for each ministry, but multiyear ceilings not regularly defined and budget documentation does not include total project costs. - Importance: Medium. - Budget comprehensiveness and unity: - Budget includes all capital expenditure except PPPs, which are omitted. - Budget process split between recurrent and capital budgets; budget conferences are separate. - Importance: Medium — a single budget conference is essential. - Budgeting for investment: - Legal/regulatory provisions exist to protect capital expenditure, but implementing texts lacking. - Capital expenditure authorized annually instead of multiyear and thus not protected during execution. - Importance: High — implementation of multiyear commitment authorization is essential. - Maintenance funding: - Budget framework exists for maintenance but no standard methodology; current and periodic maintenance not adequately programmed. - Importance: High — deterioration of assets shortens useful lives. - Public contracts and PPPs: - Regulatory framework promotes open and transparent procedures; PPP framework not finalized. - All PPPs contracted via direct negotiation, limiting competition. - Importance: Medium. - Availability of funding: - Cash flow programming and management tools inadequately correlated; no time limits for BCRG payments; TSA should include donor funds. - Ceilings on capital spending not reliable and not timely communicated; most external funding held outside BCRG. - Importance: High — delays in payments undermine project execution; TSA and coordination essential. - Portfolio management and monitoring: - Regulations inadequate for effective monitoring and ex post review; ex post reviews infrequent; appropriations transferred between projects. - Importance: High — long delays in execution generate additional costs; monitoring and ex post reviews essential. - Asset monitoring: - Asset accounting implementation gradual; regulatory framework not finalized. - Asset records incomplete/out of date; financial statements do not present value of nonfinancial assets or fixed asset depreciation. - Importance: High — implementation of asset accounting will improve information quality. ### Priority recommendations (selected actions and timing) - 1. Strengthen PPP regulatory and procedural framework (Lead: DNPEIP, ACGPMP, DNMP) - 2019–2021 actions include capping explicit commitments for PPPs and opening unsolicited PPP proposals to competition. - 2. Establish independent review and validation of studies and stricter selection criteria (Lead: DNIP) - Actions: prepare rigorous project selection/prioritization criteria (TA); discontinue including projects without feasibility studies in budgets. - 3. Strengthen investment budgeting and maintenance funding (Lead: DNIP, DNB) - Actions: hold a single budget negotiation for recurrent and capital budgets; implement multiyear commitment authorizations for capital expenditure (TA). - 4. Increase available funding for investment (Lead: Ministries, DNB, DNTCP) - Actions: rationalize payment periods applicable to the BCRG; strengthen the TSA (TA); harmonize procurement plans and cash flow management tools (TA). - 5. Operate capital project monitoring, management, and ex post review mechanism (Lead: Ministries, DNIP, DNB, DNTCP) - Actions: assess status of projects ongoing 10+ years before continuing funding; prepare consolidated semiannual/annual implementation reports; prepare and publish project completion reports. - 6. Strengthen monitoring of public assets (Lead: Ministries, DGPBP, DNCMM, DNTCP) - Actions: continue updating government real property records; compile information forms on government accounting rules to prepare asset appraisals. - Note: * TA denotes technical assistance needed. ### Use of recommendations - The recommendations and associated actions in the detailed action plan (Annex I) relating to budgeting, cash flow management, and public accounting are intended as inputs to the 2019–22 PFM action plan the authorities plan to prepare based on the final PEFA report. *Source: Executive Summary of PIMA assessment for Guinea.* ### 3. The increased public spending had a limited effect on economic growth, which ### 3. The increased public spending had a limited effect on economic growth, which ### Public spending, growth, and public investment trends - Public spending increases had a limited effect on economic growth, which "remained weak and volatile." - Public investment was procyclical during the 1990s but became mostly uncorrelated with growth thereafter. - The surge in public investment during the 2009-10 military regime did not translate into stronger economic growth. - The resumption of public investment in 2014-15 partially helped mitigate the Ebola epidemic’s adverse effects on economic growth. ### Investment spending levels and composition - Investment spending represented: - 30 percent of total government spending during the 1990s, or 6.3 percent of GDP. - 21.5 percent of total spending during 2000-13. - 39 percent of total spending in 2014 (6.4 percent of GDP). - 46 percent of total spending in 2015 (7.6 percent of GDP). - The rise in 2014-15 reflected efforts to eradicate the Ebola epidemic and a strengthened political will to boost public investment. ### Public capital stock and international comparisons - Public investment contributed little to Guinea’s capital stock; accumulation averaged 3 percent a year between 1990 and 2005. - Public capital stock trends: - Decline in public investment between 1990 and 2005 led to slow capital accumulation. - Sharper decline between 2004 and 2008 further curtailed public capital formation. - The surge in public investment post-2008 reversed the decline. - In 2015: - Public capital stock in Guinea was 57 percent of GDP. - Comparator sub-Saharan Africa (SSA) countries: 120 percent of GDP. - Result: Guinea had a lower per capita capital stock than its peers. ### Public investment financing and public debt dynamics - Shift in financing composition in 2009: - Domestically financed investments represented roughly 72 percent in 2009 (4.4 percent of GDP), exceeding externally financed investments for the first time. - Drivers: 2009-10 military regime, dwindling ODA after the 2008 global financial crisis, weak capacity to absorb budgetary support, and a more proactive domestic financing stance. - Investment budget execution rates: - Increased from 42 percent to 75 percent between 2015 and 2017. - The increase occurred partly at the expense of adequate oversight and reflected a relaxation of investment control procedures for domestically financed investments (not subject to feasibility studies). - Public investment and public debt: - Government outstanding debt was about 60 percent of GDP in 2005. - Reduced to 43 percent of GDP when Guinea reached HIPC completion point in 2012. - Government debt rose again and stood at more than 50 percent of GDP at end-2015, in part due to the resumption of investment and revenue shortfalls and dwindling ODA. ### Private sector involvement and sectoral allocation - PPPs and private involvement: - PPP-driven capital stock was relatively limited, at 3.4 percent of GDP in 2014. - PNDES envisages more than one-third of projects for implementation through PPPs. - DNPEIP inventory (end-2017) indicated some 20 PPP contracts signed between 2012 and 2017 (DNPEIP inventory excludes the large Souapiti hydropower project). - Sectoral concentration: - Based on 2011 data, nearly 92 percent of capital expenditure in Guinea targeted economic infrastructure and only 4 percent for social infrastructure. - By contrast, SSA averages allocated 45 percent to economic infrastructure and 32 percent to social infrastructure (2011 data). - Caution: new government function classification was implemented only recently; more recent sectoral data were unavailable. ### Access, quality, and efficiency of infrastructure - Access and perception (2015): - Access to social infrastructure (education and health) was below averages for comparable SSA countries and developing countries (DCs). - Access to economic infrastructure (roads) was better than in peer countries. - Perception indicators of infrastructure quality show a marked gap between Guinea and its peers. - Efficiency of public investment: - Guinea’s efficiency gap relative to the efficiency frontier is estimated at roughly 50 percent. - Comparator SSA peers’ average efficiency gap: 36 percent. - The efficiency gap calculation excludes capital stock formed by public corporations; inclusion would increase per capita public capital stock but not the perception scores. - The PIM processes cause average countries to lose roughly 30 percent of the value of investment to inefficiencies; PIM improvements can reduce the efficiency gap by nearly two-thirds. - For Guinea, improved PIM could increase the quality and access to public infrastructure by 49 percent in absolute terms. ### Public Investment Management Assessment (PIMA) findings - The IMF PIMA evaluates 15 institutions across planning, allocating, implementing phases, plus three crosscutting institutions (IT support, legal framework, staff capacities). - Overall institutional strength: - Below that of peers for most institutions (national and sectoral planning, coordination, project appraisal, project selection, budgeting for investments, procurement, portfolio management and oversight, management of project implementation, monitoring public assets). - Comparable for fiscal objectives and rules, multiyear budgeting of investments, budget comprehensiveness and unity. - Relatively superior for alternative infrastructure financing and availability of funding. - Exception: maintenance funding institution — comparable-data not available for peers. - Effectiveness of practices: - Superior in some institutions: national and sectoral planning, budget comprehensiveness and unity, alternative infrastructure financing, portfolio management and oversight. - Comparable for: fiscal objectives and rules, coordination between entities, multiyear budgeting, procurement. - Below peers for a majority: project appraisal, project selection, budgeting for investment, availability of funding, management of project implementation, monitoring public assets. - Institutional strength generally exceeds effectiveness, indicating implementation gaps between existing legal/regulatory frameworks and practice. - The IMF PIMA methodological framework was revised in April 2018. ### Planning and fiscal governance issues - Planning pillar principles evaluated: fiscal principles/rules, national and sectoral plans, coordination between central government and other entities (SNGs and PCs), standardized project appraisal with risk assessment, and climate for private infrastructure financing (PPPs, PCs). - Fiscal rules and constraints: - ECOWAS convergence criteria include a 70 percent limit on total debt-to-GDP; transposed in Law L/2012/No. 012/CNT (framework budget law, LORF) and implementing decree D/2014/222/PRG/SDG. - Lack of limits on outstanding government guarantees represents a serious fiscal risk. - 2017 PPP law provides no ceilings on total PPP commitments (explicit or implicit) — a debt sustainability risk. - SNG borrowings are not adequately limited; revised Regions and Communes Code authorized SNG borrowing but no decree sets limits/terms for SNG borrowing. - Institutional arrangements and monitoring: - A draft policy statement on public borrowing and public debt management has been prepared to operationalize public debt sustainability objectives; it would require CNDP approval for public entities contracting debt or receiving sovereign guarantees. - Under practice, the IMF-supported ECF program (approved December 2017) limits non-concessional borrowing to US$1.85 billion, of which US$1.2 billion is set aside for the Souapiti hydropower project and US$650 million to finance priority infrastructure projects (energy, transportation, and education). - Quarterly monitoring reports on convergence criteria are prepared under the National Economic Policy Coordinating Committee and submitted to the ECOWAS Commission; these show Guinea has margin relative to the 70 percent debt limit following HIPC relief in 2012. *Source: IMF staff and Guinean authorities as presented in the provided chapter excerpt.* ### 24. However, the growing reliance on PPPs to provide infrastructure in Guinea could ### 1ginea2019002 - 24. However, the growing reliance on PPPs to provide infrastructure in Guinea could ### Public-private partnerships (PPPs) — scale, risks, and monitoring - Inventory at end-2017: total of 25 PPP contracts signed between 2012 and 2017, notably in energy, housing, and hotel services. - Aggregate size: these contracts represented a total of roughly 58 percent of GDP. - Contracts under execution: only two contracts (representing a total commitment of about 0.4 percent of GDP) are currently under execution. - The two contracts being implemented are: - PPP for the construction of the Kaloum 5 and Kaloum 3 thermal plants (0.2 percent of GDP) signed in 2017. - PPP agreement for construction and operation of the ONOMO hotel complex (0.2 percent of GDP) signed in 2015. - Data limitations prevented quantifying the sovereign guarantees associated with those PPPs. - Assessment: - The envisaged PPPs represent a serious fiscal risk and could make it difficult to comply with the debt limit in the future. - Monitoring of PPP contingent liabilities is limited and not comprehensive; DNPEIP conducts limited monitoring focused on government guarantees. ### Fiscal framework, fiscal rules, and macro-fiscal programming - ECOWAS convergence criteria transposed into Guinean law (LORF) and implementing decree: - Overall fiscal deficit limit: 3 percent of GDP. - Ceiling on central bank financing of the deficit: 10 percent of prior year tax revenue. - Weakness: community rules lack ceilings on annual PPP commitments or annual sovereign guarantees; binding feature does not apply beyond the central government. - IMF-supported ECF arrangement: - Program defines quantitative performance criteria for the basic fiscal balance and net BCRG lending to the government. - The government has not always met the IMF arrangement’s stricter criteria, but adherence to ECOWAS fiscal convergence criteria improved over the years. - Both the 2018–20 DPBP and the 2018 Economic and Financial Reports note that Guinea met five of the six convergence criteria in 2017. - Medium-term macro-fiscal framework: - Prepared ahead of budget preparation; includes budget aggregates broken down between current and capital expenditures. - LORF and implementing decree require an annual MTBF, which serves as basis for MTEF and that the draft annual budget law (PLF) be consistent with the first year of the medium-term framing documents. - MTBF shortcoming: does not distinguish between ongoing and new projects. - Credibility issues: - The practice of preparing the medium-term macro-fiscal framework was established only recently and entailed approximations; forecast errors exist between the DPBP and annual budgets. - Example comparisons (GNF billions) between 2018–20 DPBP and the 2018 Draft Budget Law (PLF 2018): - Total expenditure: DPBP 19,229 ; PLF 2018 20,156 ; Difference 4.8% - Defense: DPBP 1,540 ; PLF 1,527 ; Difference -0.9% - Agriculture: DPBP 1,174 ; PLF 627 ; Difference -46.6% - Public works: DPBP 1,889 ; PLF 2,334 ; Difference 23.6% - Health: DPBP 1,123 ; PLF 1,305 ; Difference 16.2% - National Education and Literacy: DPBP 1,804 ; PLF 1,461 ; Difference -19.0% - Higher Education: DPBP 1,110 ; PLF 1,258 ; Difference 13.3% - Energy and Water Supply: DPBP 2,610 ; PLF 3,029 ; Difference 16.0% ### National and sectoral planning (PNDES, sector strategies, and tools) - PNDES (2016–20) is Guinea’s public investment strategy and main strategic reference; adopted by the legislature and published. - Shortcomings: - PNDES projects are not adequately prioritized or coordinated with sectoral strategies. - Sectoral strategies are diverse in format and time horizon; lack standardized tools, codified methods, or procedures specifying minimum content (e.g., project priorities, estimated costs, funding constraints, results frameworks). - Sectoral strategies are often not published and are of limited use to guide investment programming. - The MTBF and PNDES relationship is weak; MTBF lacks distinction between ongoing and new projects, limiting credibility. - Table summary of selected strategies (presence/absence of elements): - National strategy—PNDES: published; total estimated cost; project list; project estimated costs; indicator of outputs and results; results framework all present. - Ministry of Public Works: strategy published; some project information present; results framework absent. - Ministry of Health: strategy published; project list and costs absent; partial indicators. - Ministry of Energy and Water Supply: strategy published; several elements absent. - Ministry of Education: strategy absent. - Ministry of Agriculture: strategy published; most elements present. ### Coordination between central and subnational entities, and transfers - Legal provisions: - CCL requires SNGs to develop planning tools (PDL, PDR, PAI) and communal budget including the PAI must be approved by the prefecture and publicized locally. - MATD local planning guide requires PDLs to consider government strategy objectives and sectoral strategies. - Implementation gaps: - No directives for consolidation of prefectural, regional, or national investment project lists. - Methodology for preparing PDRs undefined; regional councils not yet established so no PDRs in practice. - Transfers: Mining Code, 2016 budget law creating the FNDL, and decree creating ANAFIC provide for allocation of 15 percent of certain mining royalties to SNGs and plan for a Local Mining Development Fund (FMDL) allocating 5 percent to border communes, but formulas, terms of utilization, management, and oversight are undefined. - No legal provisions entitle SNGs to receive information on capital transfers prior to adoption of the budget law. - Practical situation: - All rural communes have a PDL; most produce a PAI each year; only 12 of the 38 urban communes have PDLs. - PAIs are not consolidated or discussed with sectoral ministries or prefectural staff. - SNGs do not undertake major investment projects due to limited resources and lack of transfers from FMDL and FNDL. - Communes’ investment expenditures estimated at less than 0.4 percent of the government budget. - SNG budget share and execution rates: SNG budget was 1.2 percent and 0.5 of the government budget in 2014 and 2017, respectively, with respective execution rates of 46 percent and 56 percent. - Risk: when FNDL becomes operational, transfers could quadruple communal budgets and create overlaps with sectoral ministries; FNDL assets estimated at GNF 286.52 billion for 2019 and GNF 479.56 billion in 2020. ### Monitoring of public corporations (PCs) and contingent liabilities - Legal framework: - Law 075 on governance of PCs provides for financial oversight of PCs by the MEF through DNPEIP; DNPEIP oversees government equity interests and submits an annual report on PCs to the MEF. - PPP law requires MEF to manage and oversee public commitments in the context of PPPs (L/2017/32/AN on PPPs, article 8). - CCL provides for SNG borrowing but implementing decrees lack terms for authorization, guarantee, and monitoring of contingent liabilities. - Practice: - DNPEIP collects information from PCs and consolidates debts; submits a note on status of corporations used in the PCs report attached to a budget proposal (first attached with proposed 2018 budget law). - The note was limited to liabilities associated with employer obligations, tax liabilities, and debts to suppliers. - DNPEIP monitors explicit contingent liabilities of some PPPs in an internal document focused on government guarantees (e.g., payments by EDG to independent producers) but monitoring is not comprehensive. - Documentation attached to the budget law does not consistently include sections on contingent liabilities. ### Project appraisal, feasibility studies, and evidence base for investment programming - Legal and procedural texts: - Circular on preparation of the 2019–21 PIP requires feasibility studies to accompany project information forms but omits methodology and essential content requirements (no requirement for transmittal, content specification, technical studies, economic/financial analyses, or risk analyses). - PPP law requires feasibility study to analyze environmental and socioeconomic impact and financial sustainability (Law 2017-32 of July 4, 2017, Title 3). - Institutional arrangements: - Study fund created in 2013 within ACGPMP to finance feasibility studies, but governance arrangements for the fund are not specified. - Entities supporting feasibility studies: DNIP and BTAP within MPCI; ministry BSDs; BCEP. - For PPPs, PPP committee and PPP units envisaged but implementing texts pending. - Practice and findings: - Domestically funded priority investment projects do not systematically undergo socioeconomic analyses; externally financed projects systematically have technical, social, economic/financial, and environmental feasibility studies (methodologies vary by partner). - PEFA review: of 23 major projects reviewed, economic analyses were conducted for only 11. - Post-Ebola Plan: of 113 projects, feasibility studies were prepared for 34, of which 32 percent were domestically funded. - Generally, project information forms are incomplete, focus mainly on financial information, rarely link explicitly to PNDES, provide summary financial evaluation, and often omit potential project impacts. - Examples: domestically funded projects rarely have economic/financial analyses; two BCEP studies include profitability ratios (2018–20 PIP projects 32335 and 32336). - PPPs are not always subject to socioeconomic impact and financial sustainability analyses; some PPPs for independent electricity production underwent technical and financial studies to set prices but lacked evaluation of socioeconomic impact and financial sustainability. ### Policy implications and priorities (inferred from analysis in the source) - Urgent finalization and adoption of the decree implementing the 2017 PPP law to: - Put the institutional framework into effect to supervise, monitor, and manage potential risks associated with PPPs. - Improve comprehensive monitoring of PPP contingent liabilities and sovereign guarantees. - Strengthen medium-term macro-fiscal framework credibility through improved forecasting and clearer distinction between ongoing and new projects in MTBF. - Standardize sectoral strategy formats and require minimum content (prioritized project lists, estimated costs, funding constraints, results frameworks) to better align sector strategies with PNDES and improve investment programming. - Define methodologies and legal force for feasibility studies and strengthen governance of the study fund to ensure economic, financial, environmental, social, and risk analyses are systematically prepared for domestically funded projects and PPPs. - Establish implementing regulations for FNDL and FMDL specifying allocation formulas, terms of utilization, management, and oversight, and provide SNGs with timely information on capital transfers to improve coordination and avoid overlaps. *Source: Extract from IMF country report content unit 1ginea2019002 (selected passages provided).* ### 41. Central support for the preparation of studies is not yet fully effective. The DNIP ### Central support for the preparation of studies is not yet fully effective. The DNIP ### Central support and human resources - The DNIP and BTAP lack the financial and human resources to conduct or delegate studies. - Funding allocated to feasibility studies is usually reallocated to the implementation of ongoing projects, creating a vicious circle from one year to the next. - Human resources specifics: - The BTAP, created in 2017, has only seven engineers in place out of the 27 provided. - The BCEP recently increased its team from four professionals to 30 in 2018. - The BCEP is intended to serve as the central support structure, based on the Ivoirian model (cf. Box 1). - Coordination and sharing of responsibilities among the BSDs, the DNIP, the BTAP, and the BCF is not yet defined in practice or in the applicable regulatory texts. ### Risks from lack of technical, economic, and financial evaluations - The lack of detailed evaluations of domestically financed projects creates significant risks across the investment management cycle: - Project selection: lack of objective data for sectoral prioritization and selection during budget conferences. - PIP execution: contingencies arising during implementation that impact schedules and costs. - Ex post evaluation: absence of baseline data on expected results. - A risk analysis would enable political decision makers to mitigate risks in advance, especially for costly projects. - Noted good practice (example): The Ministry of Pre-University Education applies preliminary identification, feasibility assessment, technical studies, and cost-impact analyses based on annual education statistics, but its methodology is not set out in any official document. ### Box 1 — Côte d’Ivoire: BNETD and Studies Fund Support Appraisal of the PIP (lessons) - Two lessons from Côte d’Ivoire: - A strong central support unit - The National Technical and Development Studies Bureau (BNETD) is a central support structure created in 196. - BNETD assists the government in: (1) identifying, preparing, and defining medium- and long-term development objectives; and (2) improving utilization of resources, completion of projects, and establishment of standards and methodologies for sectoral ministries. - BNETD may monitor project implementation; monitor, oversee, or conduct studies; and contribute to feasibility, technical, economic, and financial studies. - BNETD provides training, standards and methodologies, supports sectoral ministries in conducting studies required for the PIP, conducts studies on a contractual basis (competitive or direct negotiation), supports quality review and validation of feasibility studies at the request of the DPIP, plans additional studies needed for project preparation, and offers short-term training on investment project management phases. - Protected funding for feasibility studies - Financing of feasibility studies from own resources comes from: 1. Sector ministry budget appropriation earmarked for PIP preparation; 2. A special studies fund established within the Treasury in 2013 and managed by an interagency committee (the Presidency, the Prime Minister’s Office, and the ministries of planning, finance, and budget) that allocates additional funding to sector ministries by internal, competitive process for major projects; 3. External funding. - Between 2013 and 2014, the fund financed 119 studies for a total cost of US$25.8 million (GNF 232.5 billion). ### Box 2 — Chile: Project Appraisal and Selection (key features) - Project appraisal and selection in Chile based on four pillars: - A rigorous, systematic training program on formulating and preparing projects of different levels of complexity. - Mandatory socioeconomic evaluation based on net present value or internal rate of return for social investments. - Efficient allocation of resources among competing projects from different sectors. - Transparent procurement system based on competition. - National Investment System (SNI) features: - Published directives prescribe the process for evaluating and selecting projects. - An integrated project database, a shared IT tool, is used throughout the process. - Projects must be supported by either a cost-efficiency analysis (health, education, water) or a cost-benefit analysis (transportation, infrastructure); risk analysis and sensitivity information are required. - The MDS investment studies department reviews all investment project appraisals and recommends projects for the budget. ### Alternative infrastructure financing — institutional and regulatory status - The regulatory framework is partly open to competition. Law L/2001/18/AN on the reform of PCs and government divestment establishes open competition as the preferred mode. - Electricity and water: - The 2001 law authorizes PPPs and private investment for electricity production. - Discussions underway to extend competition to electricity distribution by end-2018. - Competition does not yet extend to water supply. - A water and electricity regulatory authority was recently created, but the implementing decrees have yet to be adopted. - In practice: EDG signed PPAs with seven independent electricity producers and two PPPs for hydropower production (Kaleta special purpose vehicle 240 MW and Souapiti 450 MW). Water supply in urban areas is monopolized by Société des Eaux de Guinée (SEG). - Telecommunications and NICT: - The 2015 law establishes an open, competitive market; ARPT is the regulator. - Transportation: - Competition regulated by Ministry of Transportation through sector directors. - Air: private domestic airlines discontinued operations; government reportedly negotiating with Ethiopia to create a national airline. - Ground: except SOTRAGUI, ground transport monopolized by private companies, many informal. - Rail: national railroad company is the main provider. - Maritime: public Société Navale de Guinée and small private operators provide canoe service under Directorate of the Merchant Marine supervision. ### Institutional framework for PPPs and current gaps - A PPP law adopted in July 2017 replaced the 1998 BOT law. The law defines institutional framework and rules for award, implementation, oversight, and regulation of PPPs; it allows PPPs across sectors except oil and mineral rights. - The institutional framework is not yet operational because two important texts remain unfinished: (1) proposed decree implementing Law 2017/AN of July 4, 2017, on Public Private Partnerships and Organization of the Institutional Framework Applicable to Public Private Partnerships; and (2) a decree implementing the draft PPP Policy Letter. - Until adoption, two key units within the DNPEIP—the PPP committee and the PPP unit—will remain non-operational. - At end-2017, DNPEIP identified roughly 20 signed PPP contracts that disregarded regulations guiding project preparation, selection, and management. - The IMF–World Bank PPP Fiscal Risk Assessment Model (P-FRAM) could support evaluation of PPP fiscal risks; technical staff of the PPP unit would benefit from familiarization with this tool. ### Monitoring of public corporations and investment reporting - Monitoring relies on feedback from government representatives on boards of directors. - The 2017 law on financial governance of public corporations and entities gives government directors key roles in transmitting financial information to technical ministries and the MEF, and in consolidation within the DNPEIP; lack of an implementing decree limits effectiveness. - DNPEIP has systematized annual collection of financial information from PCs and EPAs via questionnaire (revenue, recurrent expenditure including subsidies, investment expenditure, dividends, contingent liabilities). - Outputs: initial annual review of EPAs published September 2017; financial report on PCs produced and transmitted to the National Assembly December 2017. - Suggested improvements: further standardize information format, consolidate into more informative reports, harmonize across sectors, and adopt decree implementing financial governance law to require complete and accurate responses. ### Recommendations (selected, preserved text and timelines) - Problem: Alternative financing of public infrastructure is not well regulated; no explicit caps on annual/total PPP commitments or guarantees; monitoring of PCs’ investment plans inadequate; no explicit ceilings on borrowing by PCs; revised 2017 CCL and policy statement on public borrowing and public debt management do not clarify limits or terms for SNGs. - Recommendation 1: Strengthen the regulatory framework to provide for alternative infrastructure financing, and encourage competition in the provision of economic infrastructures. - Adopt the draft decrees implementing Law 2017/AN of July 4, 2017, on PPPs and organizing the Institutional Framework Applicable to PPPs; include explicit ceilings on the annual and total amounts of PPP commitments and guarantees provided in connection with PPPs. - Adopt the draft PPP Policy Letter. - Adopt the decree implementing the Public Entities Financial Governance Act, including explicit caps on public entities' borrowing and guarantees provided to public entities; strengthen the mechanism to monitor investments by public corporations. - Adopt the decrees implementing the revised CCL to clarify the ceilings and conditions applicable to borrowing by decentralized authorities. - Finalize the regulatory framework opening electricity distribution and the production and distribution of water to competition; adopt the decree instituting the water and electricity regulatory authority. - Problem: Lack of a guide for preparation of sectoral policies and strategies limits their credibility and effective programming. - Recommendation 2: Strengthen procedures for preparing sectoral policies and strategies. - Prepare a guide for formulating sectoral policies containing methodological guidance and indicative contents—such as prioritized list of projects, estimated costs, results framework, results indicators (to be implemented in 2018). - Ensure sectoral policies or strategies are up to date and aligned with the new strategic objectives of the PNDES, in particular in terms of the results framework (to be implemented in 2018 and 2019). - Develop an organizational framework and procedures manual that formalizes relationships between the DNPP and the sectoral ministry BSDs (to be implemented in 2019). - Problem: Lack of final implementing texts for the PPP law and lack of adjustment of PPPs in procurement regulatory framework may result in elevated financial risks. - Recommendation 3: Strengthen the regulatory and procedural framework for PPPs. In particular, cap explicit commitments under PPPs, and open unsolicited proposals to competition. - Finalize and adopt texts implementing the PPP law with respect to coordinating and monitoring structures (including risks in appraisal and capping explicit and implicit contingent liabilities in monitoring) (to be implemented in 2019). - Address and define the modalities of PPPs in the procurement regulatory framework (to be implemented in 2019). - Promote public access to information to support competition, efficiency, and transparency; in particular, open unsolicited proposals to competition (to be implemented in 2019). - Problem: Regulatory framework does not yet support role of communes as key actors in local development; communes’ capacities to manage public finances remain limited. - Recommendation 4: Put the FNDL into effect, and strengthen the framework for local public financial management. - Adopt texts supplementing the Mining code and CCL concerning the FNDL, the FMDL, and terms and conditions applicable to the SNGs' borrowing. - Launch operations of the SNG funding agency (ANAFIC) (procedures manual, funding, and human resources). ### Multiyear budgeting (context and legal framework) - Multiyear budgeting introduced by the budget framework law (LORF) of July 27, 2012, covering investment expenditure. - LORF requirements: - Articles 13 and 14: government must prepare an MTBF projecting budget aggregates over three years and three-year MTEFs breaking down MTBF by ministry, function, and economic nature. - Article 15: documents should be presented to the legislature before July 1 for budget strategy discussions. - Article 48: documents must be attached to the PLF, which should be consistent with the first year of the MTBF and MTEF. - Projected expenditures for the second and third years of the MTEF and MTEF may be revised each year and are not binding. - Decree 2014/222 on the public financial governance framework reiterates and clarifies LORF provisions concerning the MTBF. *Source: 1ginea2019002 - 41. Central support for the preparation of studies is not yet fully effective. The DNIP* ### 51. Three-year investment expenditure projections by ministry are published. In 2017, ### 1ginea2019002 - 51. Three-year investment expenditure projections by ministry are published. In 2017, ### Multiyear programming: current practice and weaknesses - A three-year PIP is prepared each year indicating investment expenditure by project ministry; a multiyear budget programming document (DPBP) indicates investment expenditure by ministry. - The 2018–20 DPBEP was presented to the legislature on October 3, 2017, for budget strategy discussions. - A summary of the 2018–20 PIP by ministry and funding source was attached to the 2018 PLF; the 2018 tranche is consistent with the 2018 PLF. - The total annual investment expenditures indicated in the PIP and the DPBP are close, but significant discrepancies exist between projected investment spending by ministry in the two documents, published several days apart (cf. Table 7). - Discrepancies point to insufficient coordination between staffs responsible for programming expenditures and undermine the reliability of multiyear projections. - The PIP presents three-year expenditure projections by project but does not present total project costs or expenditures remaining to be executed beyond the three years covered by the PIP. Key recommendation elements: - The PIP should present, in addition to three-year expenditure projections by project, the total project cost, total expenditures executed, total expenditures remaining to be committed, three-year distributions, and expenditure beyond the period of the current PIP. - Budget preparation and programming activities should be scheduled to ensure adequate coordination of multiyear programming documents (DPBP, ministerial MTEFs, and PIP). ### Budget comprehensiveness and unity: legal framework and practical gaps Findings: - LORF is based on budget unity and comprehensiveness; article 3 applies these principles to the government budget and EPAs. - LORF article 39 provides that the government budget must include funds from international donors and the expenditures financed by those funds. - LORF article 27 stipulates that for PPP contracts a commitment authorization (AE) covering the total amount of the legal commitment should be included in the budget law for the year the contract is signed. - Decree 2016/75 (March 30, 2016) assigns investment budget preparation to a specialized directorate within MPCI. - Decree 2016/92 (March 30, 2016) provides that the Ministry of Budget prepares recurrent budgets and consolidates recurrent and investment budgets in a single document in cooperation with the MPCI. Practical limitations: - The investment budget is relatively comprehensive, but unity of the government budget is limited and does not adequately reflect the impact of investment budgets on the recurrent budget. - Investment expenditures are presented in Title V of the 2018 budget and represent 37 percent of total budget expenditure. - Some projects in Title V are hybrid (capital and current expenditure); the paragraph-level nomenclature and accounting framework allow distinction between current and capital expenditure, but nomenclature is not yet applied to externally financed expenditures. - Most capital expenditure is approved by the national assembly; PPP projects are not yet included in the budget despite LORF article 27. - Investment operations by EPAs and specific external funding are not included in the budget. - Investment and recurrent budgets are prepared by two different ministries with insufficient coordination to ensure the impact of investments on the recurrent budget is adequately considered; allocation between maintenance and investment is not optimized. Implications: - Lack of information on expenditure not recorded in the budget and failure to apply economic nomenclature to some projects limits macroeconomic analysis. - Insufficient coordination, particularly absence of joint budget conferences, undermines effective resource allocation; recurrent costs of investment projects are often overlooked, affecting asset durability and growth impact. ### Budgeting for investment: legal protections and implementation gaps Legal provisions: - LORF article 26: the budget should include AEs for multiyear investment expenditure; for an investment project corresponding to a homogenous, indivisible unit, the AE should correspond to the total project cost. (Footnote: LORF article 26 text provided.) - LORF article 24: payment officer for each program may modify distribution of appropriations between budget titles as long as modifications do not increase Title II (personnel) or reduce Title V (investment). - LORF article 33: unused available payment appropriations (CP) for investment expenditures may be carried over at year-end; amount of CPs to be carried over is limited to amount of the AE consumed. Implementation issues: - No implementing texts have been adopted to define AE modalities, especially for projects combining multiple homogenous subprojects; whether the AE covers total project cost remains to be clarified in regulatory text. - Investment expenditures are not adequately protected over the multiyear horizon; financing for ongoing projects may be impacted by introduction of new projects. - Prime Minister’s framing letter of September 27, 2017, accords same priority to ongoing projects and mature new projects introduced in the budget. - Transfers from Title V to other titles were limited to two operations in 2017 that together represented 7 percent of the budget for domestically financed investment. - The proportion of domestically financed new projects in the 2018 PIP totaled 35 percent, or 16 percent if the local counterpart of externally financed projects is excluded. - Analysis of 16 projects launched since 2010 indicates projects representing a total cost of GNF 1099 billion were interrupted due to lack of financing, although 68 percent of the financing had been executed. (Information provided by the National Budget Directorate (DNB).) Policy guidance: - During programming, examine each project’s total cost and projected future costs and compare to optimal implementation period to avoid execution under poor conditions. - Avoid distributing appropriations among too many projects; conduct regular reviews to remove projects inactive for lack of financing from the PIP. - Protect investments in budget execution by prohibiting appropriations transfers from Title V to other titles. - Consider seasonal weather constraints of ministries when preparing commitment plans. ### Maintenance funding: gaps, sector practices, and recommendations Findings: - Budget provides framework for estimating current and periodic maintenance expenditure, but no standard methodology exists for estimating and programming these expenditures. - Decision A/2014/5262/MEF/SGG (October 9, 2014) nomenclature: routine maintenance in Title III (goods and services); periodic maintenance in Title V (investment). - No standard methodology for estimating routine maintenance requirements or corresponding budget funding. - Project forms require estimates of recurrent costs, but figures receive little attention during budget conferences. - Road maintenance fund (FER), funded by road maintenance fee on fuel sales, covers less than one-fourth of total road maintenance requirements (cf. Table 8). - In the 2018 PLF, new nomenclature provisions were applied for routine maintenance expenditure but not for maintenance work; new nomenclature was applied during execution of the 2018 budget. - Nomenclature not yet applied to externally financed rehabilitation work; FER categorization sometimes results in using routine maintenance resources for rehabilitation. Table 8 — Road maintenance requirements compared to anticipated proceeds of the Road Maintenance Fee (RER) (GNF billions) - 2018: Requirements (A) 1,071; RER (B) 259; Gap (A-B/A) 76% - 2017: Requirements (A) 1,305; RER (B) 207; Gap (A-B/A) 84% - 2016: Requirements (A) 1,315; RER (B) 193; Gap (A-B/A) 85% Source: Activity Reports, FER. Sectoral practices and tools: - Ministry of Public Works (MTP) surveys road conditions using VIS-ROAD and estimates maintenance funding based on unit costs of repair work; extension to heavy maintenance using L2-R system recommended. - Education sector projects have defined standards for routine and heavy maintenance. - Health sector guide prepared 20 years ago but considered obsolete. - In agriculture, externally funded project studies estimate cost recovery revenues, but cost recovery has proven inadequate in practice. Recommendations for maintenance: - Forecast and budget maintenance costs concomitantly with investment expenditure. - Hold combined investment-recurrent budget conferences to examine proposed budget and multiyear forecast for both investment expenditure and maintenance costs. - Compare new construction with rehabilitation where relevant. - Clearly identify projected maintenance costs in MTEFs. - Develop general directives on forecasting, budgeting, and implementing maintenance operations, supplemented by sectoral guides. - Directives should specify: (1) procedures and responsibilities for condition inspections of key plant and infrastructure; (2) methods to estimate routine and periodic maintenance requirements and costs (reference estimates using simple physical indicators and sector-specific refinements). ### Project selection: shortcomings, capacity, and prioritization Findings: - Criteria and procedures for project selection and prioritization are inadequate. - Decisions to include projects in the budget are made during budget preparation based on project information forms and availability of completed studies; no independent review of studies is performed. - DNIP has no formal methods for project selection. - For 2016–20 PNDES, MPCI reviewed investment projects and assigned one of three priority rankings; selection criteria used are insufficient to prioritize projects for budgeting. Limitations of current criteria: - Insufficient for major projects in sectors such as energy or transportation where cost-benefit analyses (including internal economic rate of return) are generally required. - Do not require cost-efficiency analyses in other sectors or consideration of alternative solutions. - Do not provide for review of project management provisions or future recurrent charges and comparison with sector recurrent budgets. PNDES project categorization and scale: - Projects classified as active, key, and reserve. - Total cost of active projects and key projects is GNF 438,437 billion, of which GNF 245 billion for key projects. - Only 30 percent of key projects have reached a sufficient degree of maturity according to the PNDES definition of maturity. - Total cost of active and key projects represents over 11 times the total amount of domestically and externally financed government investments planned for the PNDES (GNF 37,686 billion). - Key projects include projects without completed studies or careful examination of economic and social returns. - Capacities are insufficient to identify major projects with high economic and social impact based on feasibility studies; World Bank report identifies significant difficulties in ministerial BSDs and technical directorates monitoring feasibility studies by external consultants and evaluating those studies. Table 9 — PNDES Projects by Category - Active projects: Number 267; Total indicative cost GNF 193,430; USD Millions 21,738 - Key projects: Number 172; Total indicative cost GNF 245,007; USD Millions 27,529 - Reserve projects: Number 236; Total indicative cost GNF 110,512; USD Millions 12,417 Source: PNDES Volume 2 (MPCI), September 2017. Best-practice guidance: - Use results of economic studies (cost-benefit or cost-effectiveness) to compare projects, at least for projects of significant scope. - Evaluate alternative solutions for each significant project to select option with greatest socioeconomic benefits. - Estimate post-completion recurrent costs and compare to recurrent expenditures of the concerned ministry. - Analyze post-completion project management provisions, cost recovery mechanisms, and reasonableness of cost recovery projections. - Develop a guide to prioritize and select projects to create a pipeline of fundable projects, gradually supplementing with sectoral selection and prioritization guides. ### Explicit recommendations (Problems and recommended actions) Problem. Most budgeted priority investment projects funded from domestic resources lack feasibility, economic, and financial studies, adversely affecting implementation of the PIP in terms of costs, schedule, and anticipated impact. Recommendation 5. Implement a process of independent review and validation of studies, and develop stricter selection criteria. - Prepare and adopt a manual for preparation, appraisal, and selection of priority investment projects clarifying: - Method and standards for pre-identification; components of a feasibility assessment; calculation of costs; and economic, financial, and risk analyses. - Administrative processes within cycle of preparing, prioritizing, and selecting projects for inclusion in the PIP. - Project selection criteria and methods for review of recurrent costs. - Optimize institutional arrangements among units supporting evaluation (DNIP, BCEP, BTAP, BSD) to ensure coordination and effectiveness. - Protect funding for project appraisals (operations of BSDs, DNIP, BCEP) and for feasibility, technical, economic, and financial studies. - Issue a directive to: - Create a bank of mature projects and prescribe preparation process and access to financing for feasibility studies. - Stipulate that presentation of any project at the PIP preparation conference is subject to production of feasibility, technical, economic, and financial studies, and for major projects, prior maturity verification by an expert independent of the sponsoring entity. - Require that investment projects be prioritized by sector as prerequisite to inclusion in the PIP and the budget. Problem. Financing of major ongoing projects may be affected by introduction of new projects; recurrent costs of projects and maintenance of existing projects do not receive adequate consideration. Recommendation 6. Strengthen investment budgeting, and increase funding for maintenance activities: - Implement multiyear commitment authorizations and appropriations carryovers for investment. - Hold single budget conferences addressing both recurrent and investment budgets, beginning with the proposed 2020 budget law. - Prepare guides for estimating and budgeting maintenance costs and estimating the future recurrent costs of investment projects (2019–20). - Introduce a specific line item for projected maintenance expenses in the MTEF (2019). *Source: 2018–20 DPBP and 2018–20 PIP annexed to the 2018 proposed budget law (PLF); excerpts from IMF content unit 1ginea2019002.* ### 66. The implementation of public investment projects should deliver productive and ### The implementation of public investment projects should deliver productive and durable public assets ### Overview: Pillar objectives and assessment focus - The third pillar of the PIMA assessment evaluates whether the Guinean authorities: - Have in place an effective mechanism for procurement and monitoring public contracts, assessed by: (1) open, competitive procedures; (2) an appropriate system of monitoring contracts; and (3) equitable procedures for timely review of disputes. - Make financing available for capital expenditures on a timely basis, assessed by: (1) the capacity of ministries and institutions to plan their investment expenditures and commit them in advance, based on reliable cash flow forecasts; (2) the timely disbursement of funds allocated to the expenditures concerned; and (3) the incorporation of external financing in the Treasury single account (TSA). - Adequately oversee and monitor the implementation of the entire investment portfolio, evaluated by mechanisms for: (1) physical-financial monitoring of major projects during implementation; (2) transfer of appropriations from one project to another; and (3) ex post review of projects following the implementation phase. - Manage and oversee investment projects during execution, assessed by: (1) the existence of an effective project management system; (2) the issuance and application of rules, procedures, and directive governing project adjustments; and (3) the completion of external ex post audits. - Monitor public assets by correctly accounting for and reporting the value of assets in the financial statements, measured by: (1) regular updating of asset records, based on an analysis of inventory, value, and condition; (2) accounting for the value of nonfinancial assets in the government’s financial statements; and (3) recording of fixed asset depreciation in the government operating statement. - Most of the five institutions of this pillar received a low score in institutional strength and effectiveness, indicating weak implementation and an institutional framework that needs deepening. ### Procurement (institutional strength: medium; effectiveness: medium; reform priority: medium) - Legal and regulatory framework: - The Procurement Code and implementing decrees promote open and transparent procedures and rigorous oversight of public contracts. - PPPs are addressed in a specific framework whose implementing decree has not yet been adopted. - The procurement code defines the institutional framework for awarding, overseeing, and regulating public contracts and delegations of public services and sets transparency as a principle; calls for tenders are the default procurement mode. - The decree allows public contracts to be awarded by mutual agreement or direct negotiation on an exceptional basis. - The PPP decree (not yet adopted) establishes call for tenders as the rule and allows direct negotiation only under exceptional conditions. - Institutions and procedures: - The Public Contracting Regulatory Authority (ARMP) is independent, administers the dispute resolution mechanism, and has a dispute resolution and sanctions committee required to issue decisions within a regulatory time limit of seven days; decisions are binding and required to be published. - The National Directorate of Public Contracts (DNMP) implements award procedures, regulates procurement, produces statistics, and maintains a database with acquisitions, contract values, and bidders’ identities. - The Large Projects and Contracts Management and Oversight Unit (ACGPMP), reporting to the president, oversees contracting procedures and implementation of projects, public contracts, and delegations of public services. - Practical observations and transparency gaps: - Principles of competition and transparency are observed to an extent, but not fully. - Table 10 (DNMP registrations for the five highest spending ministries, 2016–Q1 2018) shows procurement method breakdowns and amounts: - Public tender: No. contracts 234; % 80%; Total amount (GNF billions) 14863.2; % 36% - Direct negotiation: No. contracts 29; % 10%; Total amount (GNF billions) 25501.1; % 62% - of which PPP contracts: 7 ... 15150.15 ... - Limited competition: No. contracts 30; % 10%; Total amount (GNF billions) 770.2; % 2% - Total: No. contracts 293; % 100%; Total amount (GNF billions) 41,134.5; % 100% - Note: Includes one PPP contract in 2016 (GNF 225 billion) and six PPP contracts in 2017 (GNF 14.925 billion). - Although 80% of contracts (by number) for the five ministries were awarded by calls for tenders, these represented only 36% of total contract volume, indicating that large-value contracts are often awarded by direct negotiation and that the statutory 10 percent limit on direct negotiation was exceeded. - Public access to procurement information is partial: call for tenders and award publications exist on MEF, ARMP, and contracting authority websites and in newspapers, but procurement plans were not always produced on time or fully disclosed in 2017; ARMP decisions resolving disputes are not published in full on its website; procurement time frames could not be analyzed due to lack of information. - Policy implications: - PPPs need to be adequately addressed in legal and regulatory frameworks to ensure competition, efficiency, transparency, and to subject unsolicited proposals to competition. - Strengthen procurement planning and increase public access to information. ### Availability of funding (institutional strength: medium; effectiveness: low; reform priority: high) - Institutional and procedural gaps: - Programming and management tools are insufficiently correlated. - No time limit is established for payment of expenses by the BCRG; the TSA should incorporate donor funds but has not been implemented. - The legal framework establishes the principle of correlation among annual commitment plans, procurement plans, and cash flow plans, but the mechanism is not clearly specified. - Authorities have a manual on the commitment plan and a draft cash flow plan, but no manual for the procurement plan. - A commitment committee convenes periodically to prepare quarterly updates of the commitment plan. - The legal framework establishes intermediate deadlines for expenditure cycle phases but does not set a reference time limit for payments by the BCRG. - LORF and RGGBCP mention that external donor funding should be fully incorporated in the principal structure of government bank accounts. - Operational shortcomings: - Cash flow projections are prepared and updated regularly, but ministries and institutions are not informed timely about decisions on commitment ceilings. - Commitment committee decisions inform actors of ceilings on major expenditure aggregates quarterly at the start of each quarter, but procurement plans may be prepared too late to feed into commitment ceilings by project. - Quarterly commitment ceiling methods do not consider seasonal constraints on project execution. - Budget appropriations for projects are often subject to cash flow restrictions, constraining project implementation; a partial list of projects was provided to the mission showing interruptions for lack of financing. - Most external financing is maintained in commercial bank accounts separate from the BCRG; the TSA has not been implemented. - DNTCP survey identified 73 project accounts on the BCRG books totaling GNF 79,859,560,900, and 74 project accounts at commercial banks (69 Conakry, 5 provinces). - The Treasury float for 2018 Title V expenditures stood at GNF 52,781,330,316 as at May 9, 2018. - Policy recommendations and priorities: - Better coordination among actors and tools is indispensable to make financing available on a timely basis for investments. - Strengthen capacity of ministries and institutions to plan and commit investment expenditures in advance, based on reliable cash flow projections. - Priority recommendation: strengthen investment financing (recommendation 7 referenced). - High priority: improved and timely disbursement of funds allocated to finance investment expenditure. - Plan for introduction of more appropriate instruments, such as Treasury notes, to finance investments over the medium term. - TSA implementation is critical to optimizing cash flow management; gradual incorporation of external financing into the TSA is a low priority for reform. ### Portfolio management and oversight (institutional strength: low; effectiveness: medium; reform priority: high) - Regulatory and procedural environment: - Guinean regulations (apart from donor procedures) are inadequate for effective project monitoring and ex post review, though they provide for transfer of appropriations between projects. - Donor procedures systematically provide a monitoring mechanism for externally funded projects. - National regulations only mention project monitoring in general terms (PNDES, DNIP and BSD provisions); there is no procedural manual for monitoring major projects. - DNIP plans IT platform development to support physical and financial monitoring. - Regulatory framework provides for transfers between investment projects during implementation, but no transparent, formal procedures exist to review and evaluate such transfers. - The regulatory framework mentions ex post review principles but lacks procedural manuals for conducting such reviews. - Practice and limitations: - Local physical and financial monitoring is conducted for most major projects, but ex post reviews are not frequent. - Financial monitoring is conducted for projects funded under the National Development Budget (BND); physical monitoring is divided among project managers, BSDs, and ACGPMP and requires more refined tools. - DNIP lacks resources to conduct on-the-ground physical monitoring; ministries report to the Prime Minister’s Office based on BSD information, but information is not consolidated at DNIP for PNDES monitoring. - Ministries transfer funds between investment projects during implementation without systematic monitoring mechanisms or transparent procedures; mission could not quantify total volume transferred. - Ex post reviews of major projects funded through the BND are neither systematically required nor frequent; the mission could not determine whether ACGPMP conducts ex post reviews or analyzes donors’ ex post review reports, which donors rarely publish. - Policy implications and priorities: - Strengthened monitoring of the entire investment portfolio, combined with systematic ex post review, will improve public investment effectiveness. - Weaknesses include lengthy execution periods leading to cost overruns, unreliable physical monitoring, and limited capacity to validate and consolidate information centrally. - Priority recommendation: strengthen management of the entire investment portfolio (recommendation 8 referenced). - Medium priorities: improve mechanisms for monitoring and increase transparency of appropriations transfers during project implementation. ### Project implementation management (institutional strength: medium; effectiveness: low; reform priority: medium) - Regulatory gaps and donor practice: - Apart from donor procedures and contract amendment rules, national regulations do not adequately provide for effective project management, adjustment procedures, or external ex post audits of projects. - There is no national project management manual; donor procedures include effective management mechanisms more consistently. - National regulatory framework is silent on rules, procedures, or directives specifically governing project adjustments beyond traditional contract amendment rules. - The Court of Audit is charged with conducting ex post audits of investment projects; article 24 of the Court’s creating law establishes that the Court’s principal findings, recommendations, and conclusions are to be published in an annual report. - Audit manuals have been developed with Expertise France support, but the external auditor lacks a manual for ex post audits of investment projects. - Practical consequence: - The absence of national project management and ex post audit manuals limits systematic project adjustment, oversight, and learning from completed projects. *Source: https://www.imf.org/-/media/files/publications/cr/2019/1ginea2019002.pdf* ### 78. The management and implementation of projects are not uniform, adjustments to ### 1ginea2019002 - 78. The management and implementation of projects are not uniform, adjustments to ### Project management, implementation, and ex post audits - Findings: - Management and implementation of projects are not uniform; adjustments to projects are not standardized. - Ex post audits have not been implemented for major investment projects; no major investment project has undergone an ex post audit. - Senior officials are assigned responsibility for major investment projects, but detailed implementation plans are not always prepared prior to budget approval. - Most managers use project information forms to monitor projects. - Ministries may make adjustments to projects, but adjustments do not include a fundamental reexamination of reasons, associated costs, and expected results. - The Court of Audit has provided for future audits of ongoing investment projects in its programming, but none of the projects in question is a major investment project. - Assessment and priorities: - Strengthening effectiveness of project management is a medium priority among the reforms. - Formalization of rules, procedures, and directives concerning project adjustments (separate from general provisions governing contract amendments) is a medium priority. - Ex post audits of major investment projects are a medium priority, conditional on necessary capacity development taking place beforehand. ### Monitoring of public assets (institutional strength: low; effectiveness: low; reform priority: high) - Findings: - The gradual implementation of asset accounting requires a more detailed operational framework that has not been finalized. - General regulatory framework covers materials accounting and applies to entities responsible for real property (DGPBP) and movable property (DNCMM). - Only the DNCMM has a proper procedures manual and information system; methodology for inventorying assets remains to be developed with planned support from the European Union. - Institutional framework establishes general principle of accounting for value of nonfinancial assets in government financial statements via periodic asset inventories and resource utilization accounts, but practical modalities of appraisal and recognition in financial statements remain to be defined in technical information forms following forthcoming implementation of asset accounting. - Regulatory framework establishes general principle of accounting for fixed asset depreciation in government operating account, but practical modalities remain to be defined in technical information forms. - Asset records are incomplete and out of date; financial statements do not account for the value of nonfinancial assets or fixed asset depreciation. - Materials accounting function is divided among DGPBP, DNCMM, and sector ministries, undermining quality, completeness, and reliability of information. - DGPBP compiled a buildings inventory in 2007 covering 27,000 properties, which is being updated. - Among ministries interviewed, asset records are neither complete nor regularly updated and do not consistently include asset values (example: vehicle register compromised by failure to systematically record vehicle sales). - No register of Guinea’s mineral deposits. - Government financial statements do not present value of nonfinancial assets; fixed asset depreciation is not accounted for in government operating statement. - LORF provides for gradual implementation of asset accounting in 2019. The register of government real property is being updated. - Assessment and priorities: - Monitoring of public assets is a high priority for reform. - Operational implementation of institutional framework principles is a prerequisite to improving the quality and reliability of information on assets produced by investments. ### Recommendations (problem statements with actions and timelines) - Recommendation 7. Increase available funding for investment through improved correlation of programming and management tools and rationalization of the time limits applicable to payments by the BCRG (ministries and institutions, DNB and DNTCP, 2019–21). - By incorporating additional information on projected contract implementation in the sectoral procurement plan (ministries and institutions, 2019); - By producing sectoral procurement plans at an earlier point in the budget calendar (ministries and institutions, 2019–21); - By better correlating procurement, commitment, and cash flow plans to adequately take account of particular aspects of investment expenditures (ministries and institutions, DNB and DNTCP, 2019–21); - By rationalizing the procedure and monitoring the time effectively taken for payment of investment expenses by the BCRG (DNTCP, DNB, 2019). - Recommendation 8. Implement the mechanism for the monitoring, management, and ex post review of investment projects (ACGPMP, DNIP, DNB, DNTCP, ministries and donors, 2019–21). - Immediately conduct a survey of all projects ongoing for 10 years or more before continuing to fund them in the budget law for 2020 (DNIP, DNB, DNTCP, ACGPMP, ministries and donors, 2019). - Prepare a semiannual or annual consolidated report on the physical and financial monitoring of the implementation of major projects (DNIP, ACGPMP, DNB, DNTCP, ministries and donors, 2020). - Clarify the rules of actors involved in transfers of appropriations by establishing a systematic monitoring process and transparent procedures (DNB, DNIP, 2019). - Conduct ex post external audits of major investment projects, programmed according to financial stakes and risks and focused on costs, deliverables and outputs, and publish the reports (ACGPMP, ministries and donors, 2019–21). - Recommendation 9. Strengthen the monitoring of public assets (DGPBP, DNCMM, ministries and institutions, and DNTCP, 2019–21): - Continue efforts to update the government real property records (DGPBP, ministries and institutions, 2019). - Prepare technical information forms on the applicable governmental accounting standards in preparation for the appraisal of asset, reporting in the financial statements, and accounting for fixed assets (DNTCP, 2019–20). - Pool the information available from the different actors involved in managing real and movable assets (DGPBP, DNCMM, ministries and institutions, and DNTCP, 2019–21). ### Cross-cutting issues — IT support - Findings: - No legal or regulatory texts govern the automation of public investment project management, and there is no dedicated IT system or master plan for an integrated information system to support management of public investment projects. - PNDES mentions principle of automating the financial management system but does not address modalities. - An automated system dedicated to investment project management would add value if it covers all phases of project life cycle, from planning to accounting for assets. - Authorities have used an Access application (project information form sent to ministries); ministries complete the form in Excel (MTP) or on paper (Ministry of Health); not all project forms are consolidated by DNIP in a comprehensive database. - Several ministries have databases/applications that could serve as inputs to an integrated system: - Ministry of Budget: automated expenditure management system covering phases of authorization, commitment, validation, and payment authorization (expenditure cycle). - MTP: regularly updated database on road infrastructures for assessment of road conditions, locations, and estimated maintenance costs. - Ministry of Health: District Health Information System 2, maintaining information on health infrastructures and potential module for local healthcare center management. - MATD: Access database of subnational jurisdictions including basic data on communal infrastructures. - DNMP: database of contract awards and contracts; plans to develop scope of work for public procurement management system (SIGMAP) in 2018. - AfDB is supporting MPCI in development of Integrated Project and Results Management System (SIGEPRE) with functionalities for administrative management; PIP programming (sectoral ministry project entry for DNIP analysis); project implementation management with links to financial execution; and project monitoring and evaluation. SIGEPRE is not designed to incorporate budget and accounting management, which is already operational in the expenditure cycle. - Recommendation 10. Finalize the design and implementation of SIGPRE and SIGMAP. ### Cross-cutting issues — Legal framework - Findings: - No specific regulatory framework applicable to PIM; fragmentation of entities leads to overlapping authorities. - LORF and implementing regulations introduce innovations for transparency and effectiveness in public financial management; procurement code and implementing regulations establish rules to ensure transparency and effectiveness of project implementation. - Regulatory framework for PPPs has yet to be finalized based on existing draft texts. - Fragmentation example: DNIP, MPCI (through BTAP), and Presidency (through BCEP) responsible for project studies and reviews, resulting in overlap. - A draft text on project governance focuses mainly on public contracts, delegations of public service, and PPPs and cannot be considered applicable to overall governance of public investment. - Effective PIM calls for a legal and regulatory framework formally defining institutional mechanisms, responsibilities, procedures, standards, and responsibilities of different actors across all PIM phases. - Recommendation 11. Establish a legal and regulatory framework formally defining the institutional mechanisms, responsibilities, procedures, standards, and responsibilities for PIM, 2018–20: - Conduct discussions beforehand on the general organization of public investment governance (all public investment actors, 2019). - Adopt a general text formalizing the organization and authorities of the different actors and entities in PIM (all public investment actors, 2019). - Develop specific operational texts based on the general text (rules for project adjustments) and manuals on the different phases of PIM (procurement plans, physical‐financial monitoring, ex post review, ex post external audit) (all stakeholders, 2020). ### Cross-cutting issues — Staff capacities - Findings: - Legal and regulatory provisions clearly identify government entities responsible for planning and management of public investments. - Entities generally have a sufficient number of staff: - DNPP: a staff of 86. - DNIP: about 225 staff members. - BTAP: a staff of 7, which should be increased to 27. - Within ministries, BSD staffing varies: some about 30, others only 10. - Capacities in planning, programming, and managing projects are generally inadequate; roles of actors in managing investments are not clearly defined. - BTAP study identified weaknesses in DNPP capacities. - BSD staff backgrounds frequently unsuited to tasks; many BSDs were recently created and professionals are inadequately trained for planning, directing studies, appraising and programming projects. - Within DNIP (created by merging two directorates), there are duplications of efforts and responsibilities (two division chiefs for a single division; two section chiefs for the same section). - Risk of overlapping authorities between MPCI directorates, such as DNIP and BTAP. - PNDES provides that specific arrangements should be formalized between DNIP and ACGPMP to define their interactions. - Recommendation 12. Define and implement a PIM capacity development program that includes: - Preparation to strengthen capacities of: - DNPP professionals in planning to support sectoral ministries; - DNIP professionals to oversee entire PIM cycle from programming to monitoring and evaluation; - BSD staff in sector planning, project appraisal, and project implementation management; - Ministerial PRMPs in planning, preparation, implementation, and monitoring of procurement plans; - Staff of PPP unit of the DNPEIP in monitoring PPPs and use of the PPP Fiscal Risk Assessment Model (P-FRAM) developed jointly by the IMF and the World Bank, to serve as a point of departure in evaluating whether a project should be executed in the form of a PPP (2019). - Implementation of the training program (end-2019–22). - A review of the BSDs’ staffing requirements (2019). - Definition of each stakeholder in implementing the recommendations of this report, avoiding any duplication of tasks (2019–21). *Source: 1ginea2019002 - 78. The management and implementation of projects are not uniform, adjustments to (PDF chapter/section).* ### Annex I. Mapping of PIMA Mission Priority Recommendations ### Annex I. Mapping of PIMA Mission Priority Recommendations for Guinea to Technical Assistance from the TFPs ### Phase / Priority recommendations and technical assistance in place or planned - Strengthen the regulatory and procedural framework for PPPs. - In particular, cap explicit commitments with respect to PPPs, and open unsolicited proposals to competition. - Technical assistance in place or planned: - AFD–AfDB: project preparation in progress - EU: support in progress - IMF: PFRAM assessment? - Establish a process of independent review and validation of studies, define stricter selection criteria, and institute ex post audits. - Short-term actions: (1) prepare rigorous project selection and prioritize criteria; and (2) discontinue the practice of budgeting funds for projects without feasibility studies, beginning with the 2019 budget law. - Technical assistance in place or planned: - AfDB: support for SIGPRE in progress - World Bank: support in progress - (EGTACB–FA) in PIM manuals, feasibility study funding, and definition of standards for technical specifications and costs - EU: support in progress for external auditor - Additional technical assistance needs: - Support for studies fund? - Strengthen investment budgeting and maintenance funding. - In particular: (1) hold single budget conferences, covering both recurrent and capital budgets, beginning with the 2020 budget; and (2) implement multiyear commitments authorities for capital spending. - Technical assistance in place or planned: - IMF–AFRITAC West: support planned for implementation of commitment authorizations (AE) / payment appropriations (CP) - Increase available funding for investment; improve correlation of cash management tools and rationalization of BCRG payment periods. - Technical assistance in place or planned: - IMF–EU: support in progress for cash flow management and implementation of the TSA - World Bank: support in progress for DeMPA assessment - World Bank: support in progress (EGTACB–FA) for procurement plans and cash flow management - IMF: medium- and long-term financing instruments - Launch operations of the capital project oversight, management, and ex post review mechanism. - Technical assistance in place or planned: - AfDB: support for SIGPRE in progress - Implement reforms in the short term: (1) conduct an immediate survey of all projects ongoing for 10 years or more before continuing financing under the 2020 budget law; (2) prepare a consolidated semiannual/annual report on the physical and financial implementation of major projects; and (3) submit project completion reports for major projects. - Technical assistance in place or planned: - World Bank: support in progress (EGTACB–FA) for PIM manuals and monitoring-evaluation of major projects - EU–Independent expert, France: support in progress for external auditor - Strengthen monitoring of public assets: update inventory of government real property; institute information forms; compile applicable government accounting standards in preparation for appraisal of assets. - Technical assistance in place or planned: - EU: support in progress (PARFIP) on the procedures, methods and techniques used to inventory, appraise, and record assets - World Bank–AFD: support in progress (PACV3) on the inventory and appraisal of SNGs’ real property - World Bank–AfDB: support for decentralization in preparation - Additional technical assistance needs: - Support in preparing guidance forms for individual accounting standards - Complete designs, and implement the integrated project and results management system and the procurement system. - Technical assistance in place or planned: - AfDB: support for SIGPRE in progress - World Bank: support in progress (EGTACB–FA) for SIGMAP and complementary SIGPRE module - Additional technical assistance needs: - Support for the development of an accounting information system - Formalize a legal and regulatory framework establishing mechanisms, authorities, procedures, standards, and responsibilities for PIM. - Technical assistance in place or planned: - World Bank: potential support (EGTACB-FA)? - Define and implement a PIM capacity development program. - Technical assistance in place or planned: - EU: support in progress (PARFIP) - World Bank: support in progress (EGTACB-FA) - World Bank–AfDB: support for decentralization in preparation - Additional technical assistance needs: - EU: further support to be determined ### Annex II — Detailed Action Plan: key recommendations, timing, and lead institutions - 1. Strengthen the regulatory framework to provide for alternative infrastructure financing and encourage competition in the provision of economic infrastructures. - Timing markers in plan: 2019, 2020, 2021 - Lead organizations / institutions: DNPEIP, ACGPMP, DNMP; related actions include adopting draft decrees implementing Law 2017/AN of July 4, 2017 on PPPs; include explicit ceilings on annual and total amounts of PPP commitments and guarantees; adopt the draft PPP Policy Letter; adoption of decree implementing the Public Entities Financial Governance Act; adopt decrees implementing the revised CCL; finalize regulatory framework opening electricity distribution and production and distribution of water to competition; adopt decree instituting the water and electricity regulatory authority. - 2. Strengthen procedures for preparing sectoral policies or strategies. - Timing marker: 2 (2020) - Lead: DNPP (MPCI) and ministries - Related actions: prepare a guide for formulating sectoral policies (priority projects, estimated costs, results framework, results indicators); develop organizational framework and procedures manual formalizing relationships between DNPP and sectoral ministry BSDs; ensure alignment with PNDES. - 3. Strengthen regulatory and procedural framework for PPPs. - Lead: DNPEIP, ACGPMP, DNMP - Related actions: cap explicit commitments with respect to PPPs and related guarantees; finalize and adopt implementing texts under PPP law; amend procurement regulations for PPP modalities; promote public access to information; open unsolicited PPP proposals to competition. - 4. Implement the National Local Development Fund (FNDI) and strengthen local public financial management. - Lead: MATD, DNI and DGD (MEF) - Related actions: launch operations of SNG funding agency (ANAFIC); adopt texts supplementing the Mining Code and CCL concerning FNDL, FMDL, and SNGs' borrowing terms. - 5. Establish process of independent review and validation of studies, define stricter selection criteria. - Leads: DNIP; DNB - Timing markers: 4, 10 - Related actions: prepare and adopt manual for preparation, appraisal, and selection of priority investment projects (PIPs); issue directive creating a bank of mature projects with prerequisites including technical, economic, and financial feasibility studies; discontinue practice of including projects without feasibility studies in the budget; optimize institutional arrangements among DNIP, BCEP, BTAP, BSD; protect financing for appraisal units (BSD, DNIP, BCIP). - 6. Strengthen investment budgeting and maintenance funding. - Leads: DNIP, DNB - Timing markers: 7, 8, 9 - Related actions: hold single budget conferences covering both recurrent and capital budgets beginning with the 2020 budget; prepare guides for estimating and budgeting maintenance expenses; introduce a specific line item for projected maintenance expenses in the MTEF; implement multiyear commitment authorizations and appropriations carryovers for investment. - 7. Increase available funding for investment through improved correlation of programming and management tools and rationalization of BCRG payment periods. - Leads: Ministries, DNB, DNTCP - Timing marker: 12 - Related actions: rationalize timeframes for effective payment by the BCRG; strengthen the TSA; prepare sector procurement plans earlier in the budget calendar; harmonize procurement, commitment, and cash flow plans. - 8. Put the capital project monitoring, management, and ex post review mechanism in operation. - Leads: Ministries, DNIP, DNB, DNTCP - Timing markers: 13, 14 - Related actions: assess status of projects in progress for 10 or more years before continuing funding in budget law; clarify roles in transfers of appropriations; define systematic oversight and transparent procedures; prepare semiannual/annual consolidated report on physical-financial implementation of major projects; publish project completion reports; conduct external ex post audits and publish results. - 9. Strengthen monitoring of public assets. - Leads: Ministries, DGPBP, DNCMM, DNTCP - Timing marker: 15 - Related actions: continue updating government real property records; compile information forms on applicable government accounting rules to prepare for asset appraisals and recording; pool available information across units. - 10. Finalize the design and fully implement SIGPRE and SIGMAP. - Leads: DNIP (MPCI), MB, MEF - Timing markers: 1 à 15 - 11. Formalize a legal and regulatory framework establishing PIM mechanisms, authorities, procedures, standards, and responsibilities. - Leads: All ministries (lead ministry, DNIP) - Timing markers: 1 à 15 - Related actions: prepare general text formalizing organization and authorities of PIM actors; prepare specific texts for operational aspects and procedures manuals. - 12. Define and implement a capacity development program in public investment management. - Leads: All ministries (lead ministry, DNIP) - Timing markers: 1 to 15 - Related actions: develop capacities based on training modalities proposed; review BSDs requirements for qualified personnel; implement and continue implementation of the training program. ### Annex III — Detailed ratings by component (selected findings) - Rating scale: - 1: Not in place or to a limited extent - 2: To a certain extent - 3: To a large extent - N/A: Not applicable - Institutional strength / Effectiveness — Planning (selected items with government performance and scores) - 1. Fiscal objectives and rules - 1.a. Is a target or limit defined to ensure government debt sustainability? — 2 / 2 - 1.b. Is the fiscal policy guided by one or more permanent fiscal rules? — 2 / 2 - 1.c. Is there a medium-term fiscal framework (MTFF) to align budget preparation with fiscal policy? — 2 / 2 - 2. National and sectoral planning - a. Does the government prepare national and sectoral strategies for public investment? — 2 / 2 - b. Are the government’s national and sectoral strategies or plans for public investment costed? — 2 / 2 - c. Do sector strategies include measurable targets for the outputs and outcomes of investment projects? — 2 / 2 - 3. Coordination between entities - 3.a. Is capital spending by subnational governments (SNGs) coordinated with the central government? — 2 / 1 - 3.b. Does the central government have a transparent, rule-based system for making capital transfers to SNGs, and for providing timely information on such transfers? — 1 / 1 - 3.c. Are contingent liabilities arising from capital projects of SNGs, public corporations (PCs), and PPPs reported to the central government? — 2 / 2 - 4. Project Appraisal - a. Are major capital projects subject to rigorous technical, economic, and financial analysis? — 1 / 1 - b. Is there a standard methodology and central support for the appraisal of projects? — 2 / 1 - c. Are risks taken into account in conducting project appraisals? — 1 / 1 - 5. Alternative Infrastructure Financing - a. Does the regulatory framework promote competition in contestable markets for economic infrastructure? — 2 / 2 - b. Has the government published a strategy/policy for PPPs, and a legal/regulatory framework that guides the preparation, selection, and management of PPP projects? — 2 / 1 - c. Does the government oversee the investment plans of PCs and monitor their financial performance? — 2 / 2 - B. Ensuring Public Investment is Allocated to the Right Sectors and Projects (selected ratings) - 6. Multiyear Budgeting - a. Is capital spending by ministry or sector forecasted over a multiyear horizon? — 3 / 2 - b. Are there multiyear ceilings on capital expenditure by ministry, sector, or program? — 2 / 1 - c. Are projections of the total construction cost of major capital projects published? — 1 / 1 - 7. Budget Comprehensiveness and Unity - a. Is capital spending mostly undertaken through the budget? — 3 / 3 - b. Are all capital projects, regardless of financing source, shown in the budget documentation? — 3 / 2 - c. Are capital and recurrent budgets prepared and presented together in the budget? — 1 / 1 - 8. Budgeting for Investment - a. Does the legislature appropriate funds covering the total amount of project expenses at the time of project start up? — 1 / 1 - b. Are in-year transfers of appropriations (virement) from capital to current spending prohibited? — 2 / 1 - c. Is the completion of ongoing projects given priority over starting new projects? — 2 / 1 - 9. Maintenance Funding - a. Is a standard methodology in place to estimate current maintenance requirements and budget maintenance funding? — 1 / 1 - b. Is a standard methodology in place to identify maintenance projects, and are they included in the national or sector investment plans? — 1 / 1 - c. Can expenditures relating to maintenance be identified in the budget? — 3 / 1 - C. Provide productive, sustainable public assets (selected ratings) - 11. Public contracts - a. Is the procurement process for major capital projects open and transparent? — 2 / 1 - b. Is a system in place to ensure that procurement is monitored adequately? — 2 / 2 - c. Are procurement complaints review processes conducted in a fair and timely manner? — 3 / 1 - 12. Availability of Funding - a. Are ministries/agencies able to plan and commit expenditure on capital projects in advance on the basis of reliable cash-flow forecasts? — 2 / 1 - b. Is cash for project outlays released in a timely manner? — 2 / 1 - c. Is external (donor) funding of capital projects fully integrated into the main government bank account structure? — 3 / 1 - 13. Portfolio Management and Oversight - a. Are major capital projects subject to monitoring during project implementation? — 1 / 2 - b. Can funds be reallocated between investment projects during implementation? — 2 / 2 - c. Does the government adjust project implementation policies and procedures by systematically conducting ex post reviews of projects that have completed the construction phase? — 1 / 1 - 14. Management of Project Implementation - a. Do ministries/agencies have effective project management arrangements in place? — 1 / 2 - b. Has the government issued rules, procedures, and guidelines for project adjustments that are applied systematically across all major projects? — 1 / 1 - c. Are ex post audits of capital projects routinely undertaken? — 2 / 1 - 15. Monitoring of Public Assets - a. Are asset registers updated by surveys of the stocks, values, and conditions of public assets regularly? — 2 / 1 - b. Are nonfinancial asset values recorded in the government financial accounts? — 1 / 1 - c. Is fixed asset depreciation captured in the government's operating statement? — 1 / 1 *Source: 1ginea2019002 - Annex I. Mapping of PIMA Mission Priority Recommendations* ### 1.  Fiscal objectives and rules: D ### 1.  Fiscal objectives and rules: D ### A. Fiscal institutions to promote fiscal sustainability and medium‑term planning for public investment - 1.a. Is a target or limit defined to ensure government debt sustainability? - There is no target or limit to ensure debt sustainability. - There is at least one target or limit to ensure central government debt sustainability. - There is at least one target or limit to ensure general government debt sustainability. - 1.b. Is the fiscal policy guided by one or more permanent fiscal rules? - There are no permanent fiscal rules. - There is at least one permanent fiscal rule applicable to central government. - There is at least one permanent fiscal rule applicable to central government, and at least one comparable rule applicable to a major additional component of general government, such as subnational governments (SNGs). - 1.c. Is there a medium-term fiscal framework (MTFF) to align budget preparation with fiscal policy? - There is no MTFF prepared prior to budget preparation. - An MTFF is prepared prior to budget preparation, but it is limited to fiscal aggregates, such as expenditure, revenue, the deficit, or total borrowing. - An MTFF is prepared prior to budget preparation that includes fiscal aggregates and allows distinctions between recurrent and capital spending, and ongoing and new projects. ### B. National and sectoral planning: are investment allocation decisions based on sectoral and intersectoral strategies? - 2.a. Does the government prepare national and sectoral strategies for public investment? - National or sectoral public investment strategies or plans are prepared and include only some projects funded through the budget. - National or sectoral public investment strategies or plans are prepared and cover projects funded through the budget. - Both national and sectoral public investment strategies or plans are published and cover all projects funded through the budget regardless of financing source (for example, donors, public corporations, or PPPs). - 2.b. Are the government’s national and sectoral strategies or plans for public investment costed? - The government’s investment strategies or plans include no cost information on planned public investment. - The government’s investment strategies include broad estimates of aggregate and sectoral investment plans. - The government’s investment strategies include costing of individual, major investment projects within an overall financial constraint. - 2.c. Do sector strategies include measurable targets for the outputs and outcomes of investment projects? - Sector strategies do not include measurable targets for outputs or outcomes. - Sector strategies include measurable targets for outputs (for example, miles of roads constructed). - Sector strategies include measurable targets for outputs and results (for example, reduction in traffic congestion). ### C. Coordination between entities: effective coordination of investment plans of central and other government entities? - 3.a. Is capital spending by subnational governments (SNGs) coordinated with the central government? - Capital spending plans of SNGs are not submitted to or discussed with the central government. - Major SNG capital spending plans are published alongside central government investments, but there are no formal discussions between the central government and SNGs on investment priorities. - Major SNG capital spending plans are published alongside central government investments, and there are formal discussions between central government and SNGs on investment priorities. - 3.b. Does the central government have a transparent, rule-based system for making capital transfers to SNGs, and for providing timely information on such transfers? - The central government does not have a transparent rule-based system for making capital transfers to SNGs. - The central government uses a transparent, rule-based system for making capital transfers to SNGs, but SNGs are notified about expected transfers less than six months before the start of each fiscal year. - The central government uses a transparent rule-based system for making capital transfers to SNGs, and expected transfers are made known to SNGs at least six months before the start of each fiscal year. - 3.c. Are contingent liabilities arising from capital projects of SNGs, public corporations (PCs), and PPPs reported to the central government? - Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are not reported to the central government. - Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are reported to the central government, but they are generally not presented in the central government’s budget documents. - Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are reported to the central government, and they are presented in full in the central government’s budget documents. ### D. Project appraisal: are project proposals subject to systematic project appraisal? - 4.a. Are major capital projects subject to rigorous technical, economic, and financial analysis? - Major capital projects are not systematically subject to rigorous, technical, economic, and financial analysis. - Major projects are systematically subject to rigorous technical, economic, and financial analysis. - Major projects are systematically subject to rigorous technical, economic, and financial analysis, and selected results of this analysis are published or undergo independent external review. - 4.b. Is there a standard methodology and central support for the appraisal of projects? - There is no standard methodology or central support for project appraisal. - There is either a standard methodology or central support for project appraisal. - There is both a standard methodology and central support for project appraisal. - 4.c. Are risks taken into account in conducting project appraisals? - Risks are not systematically assessed as part of the project appraisal. - A risk assessment covering a range of potential risks is included in the project appraisal, and plans are prepared to mitigate these risks. - A risk assessment covering a range of potential risks is included in the project appraisal, and plans are prepared to mitigate these risks. ### E. Alternative infrastructure financing: climate for private sector, PPPs, and PCs to finance infrastructure - 5.a. Does the regulatory framework promote competition in contestable markets for economic infrastructure (for example, power, water, telecommunications, and )? - Provision of economic infrastructure is restricted to domestic monopolies, or there are few established economic regulators. - There is competition in some economic infrastructure markets, and a few economic regulators have been established. - There is competition in major economic infrastructure markets, and economic regulators are independent and well established. - 5.b. Has the government published a strategy/policy for PPPs, and a legal/regulatory framework that guides the preparation, selection, and management of PPP projects? - There is no published strategy/policy framework for PPPs, and the legal/regulatory framework is weak. - A PPP strategy/policy has been published, but the legal/regulatory framework is weak. - A PPP strategy/policy has been published, and there is a strong legal/regulatory framework that guides the preparation, selection, and management of PPP projects. - 5.c. Does the government oversee the investment plans of PCs and monitor their financial performance? - The government does not systematically review the investment plans of PCs. - The government reviews the investment plans of PCs, but it does not publish a consolidated report on these plans or the financial performance of PCs. - The government reviews and publishes a consolidated report on the investment plans and financial performance of PCs. ### F. Ensuring public investment is allocated to the right sectors and projects (Multiyear budgeting) - 6.a. Is capital spending by ministry or sector forecasted over a multiyear horizon? - No projections of capital spending are published beyond the budget year. - Projections of total capital spending are published over a three- to five-year horizon. - Projections of capital spending disaggregated by ministry or sector are published over a three- to five-year horizon. - 6.b. Are there multiyear ceilings on capital expenditure by ministry, sector, or program? - There are no multiyear ceilings on capital expenditure by ministry, sector, or program. - There are indicative multiyear ceilings on capital expenditure by ministry, sector, or program. - There are binding multiyear ceilings on capital expenditure by ministry, sector, or program. - 6.c. Are projections of the total construction cost of major capital projects published? - Projections of the total construction cost of major capital projects are not published. - Projections of the total construction cost of major capital projects are published. - Projections of the total construction cost of major capital projects are published, together with the annual breakdown of these cost over a three- to five-year horizon. ### G. Budget comprehensiveness and unity - 7.a. Is capital spending mostly undertaken through the budget? - Significant capital spending is undertaken by extra-budgetary entities with no legislative authorization or disclosure in the budget documentation. - Significant capital spending is undertaken by extra-budgetary entities, but with legislative authorization and disclosure in the budget documentation. - Little or no capital spending is undertaken by extra-budgetary entities. - 7.b. Are all capital projects, regardless of financing source, shown in the budget documentation? - Capital projects are not comprehensively presented in the budget documentation, which omits PPPs, externally financed projects, and PCs’ projects. - Most capital projects are included in the budget documentation, but either PPPs, externally financed projects, or PCs’ projects are not shown. - All capital projects, regardless of financing sources, are included in the budget documentation. - 7.c. Are capital and recurrent budgets prepared and presented together in the budget? - Capital and recurrent budgets are prepared by separate ministries and/or presented in separate budget documents. - Capital and recurrent budgets are prepared by a single ministry and presented together in the budget documents, but without using a program or functional classification. - Capital and recurrent budgets are prepared by a single ministry and presented together in the budget documents, using a program or functional classification. ### H. Budgeting for investment: protection of investment projects during budget implementation - 8.a. Are total project outlays appropriated by the legislature at the time of project start-up? - Outlays are appropriated on an annual basis, but information on total project costs is not included in the budget documentation. - Outlays are appropriated on an annual basis, and information on total project costs is included in the budget documentation. - Outlays are appropriated on an annual basis and information on total project costs and multiyear commitments is included in the budget documentation. - 8.b. Are in-year transfers of appropriations (virement) from capital to current spending prohibited? - There are no limitations on virement from capital to current spending. - The finance ministry may approve virement from capital to current spending. - Virement from capital to current spending requires the approval of the legislature. - 8.c. Is the completion of ongoing projects given priority over starting new projects? - There is no mechanism in place to protect funding of ongoing projects. - There is a mechanism to protect funding for ongoing projects in the annual budget. - There is a mechanism to protect funding for ongoing projects in the annual budget and over the medium term. ### I. Maintenance funding - 9.a. Is a standard methodology in place to estimate current maintenance requirements and budget maintenance funding? - There is no standard methodology for determining requirements for routine maintenance. - There is a standard methodology for determining routine maintenance requirements and costs. - There is a standard methodology for determining routine maintenance requirements and costs, and appropriate amounts are generally allocated in the budget. - 9.b. Is there a standard methodology for determining capital maintenance projects, and are they included in national and sectoral investment plans? - There is no standard methodology for determining capital maintenance projects, and they are not included in national or sectoral plans. - There is a standard methodology for determining capital maintenance projects, but they are not included in national or sectoral plans. - There is a standard methodology for determining capital maintenance projects, and they are included in national or sectoral plans. - 9.c. Can expenditures relating to maintenance be identified in the budget? - Routine maintenance and capital maintenance are not systematically identified in the budget. - Routine maintenance and capital maintenance are systematically identified in the budget. - Routine maintenance and capital maintenance are systematically identified in the budget, and are reported. ### J. Project selection - 10.a. Does the government undertake a central review of major project appraisals before decisions are taken to include projects in the budget? - Major projects (including donor- or PPP-funded) are not reviewed by a central ministry prior to inclusion in the budget. - Major projects (including donor- or PPP-funded) are reviewed by a central ministry prior to inclusion in the budget. - All major projects (including donor- or PPP-funded) are scrutinized by a central ministry, with input from an independent agency or experts, prior to inclusion in the budget. - 10.b. Does the government publish and adhere to standard criteria and stipulate a required process for project selection? - There are no published criteria or a required process for project selection. - There are published criteria for project selection, but projects can be selected without going through the required process. - There are published criteria for project selection, and projects are generally selected through the required process. - 10.c. Does the government maintain a pipeline of appraised investment projects for inclusion in the annual budget? - The government does not maintain a pipeline of appraised investment projects. - The government maintains a pipeline of appraised investment projects but other projects may be selected for financing through the annual budget. - The government maintains a comprehensive pipeline of appraised investment projects, which is used for selecting projects for inclusion in the annual budget and over the medium term. ### K. Provide productive and durable public assets (Public contracts) - 11.a. Is the procurement process for major capital projects open and transparent? - Few major projects are tendered in a competitive process, and the public has limited access to procurement information. - Many major projects are tendered in a competitive process, but the public has only limited access to procurement information. - Most major projects are tendered in a competitive process, and the public has access to complete, reliable, and timely procurement information. - 11.b. Is there a system in place to ensure that procurement is monitored adequately? - There is no procurement database, or the information is incomplete or not timely for most phases of the procurement process. - There is a procurement database with reasonably complete information, but no standard analytical reports are produced from the database. - There is a procurement database with reasonably complete information, and standard analytical reports are produced to support a formal monitoring system. - 11.c. Is the procurement complaints review process conducted in a fair and timely manner? - Procurement complaints are not reviewed by an independent body. - Procurement complaints are reviewed by an independent body, but the recommendations of this body are not timely, published, or rigorously enforced. - Procurement complaints are reviewed by an independent body whose recommendations are timely, published, and rigorously enforced. ### L. Availability of funding: timely financing for capital spending - 12.a. Are ministries/agencies able to plan and commit expenditure on capital projects in advance on the basis of reliable cash-flow forecasts? - Cash-flow forecasts are not prepared or updated regularly, and ministries/agencies are not provided with commitment ceilings in a timely manner. - Cash-flow forecasts are prepared or updated quarterly, and ministries/agencies are provided with commitment ceilings at least one quarter in advance. - Cash-flow forecasts are prepared or updated monthly, and ministries/agencies are provided with commitment ceilings for the full fiscal year. - 12.b. Is cash for project outlays released in a timely manner? - Cash for project outlays is sometimes released with cash restrictions. - Cash for project outlays is sometimes released with delays. - Cash for project outlays is normally released in a timely manner, based on the appropriation. - 12.c. Is external (donor) funding of capital projects fully integrated into the main government bank account structure? - External financing is largely held in commercial bank accounts outside of the central bank. - External financing is held at the central bank, but it is not part of the main government bank account structure. - External financing is fully integrated into the main government bank account structure. ### M. Portfolio management and oversight - 13.a. Are major capital projects subject to monitoring during project implementation? - Most major capital projects are not monitored during project implementation. - For most major projects, annual project costs, as well as physical progress, are monitored during project implementation. - For all major projects, total project costs, as well as physical progress, are centrally monitored during project implementation. - 13.b. Can funds be reallocated between investment projects during implementation? - Funds cannot be reallocated between projects during implementation. - Funds can be reallocated between projects during implementation, but without systematic monitoring and transparent procedures. - Funds can be reallocated between projects during implementation, using systematic monitoring and transparent procedures. - 13.c. Does the government adjust project implementation policies and procedures by systematically conducting ex post reviews of projects that have completed their construction phase? - Ex post reviews of major projects are neither systematically required nor frequently conducted. - Ex post reviews of major projects, focusing on project costs, deliverables, and outputs are sometimes conducted. - Ex post reviews of major projects focusing on project costs, deliverables, and outputs are conducted regularly by an independent entity or experts, and they are used to adjust project implementation policies and procedures. ### N. Management of project implementation - 14.a. Do ministries/agencies have effective project management arrangements in place? - Ministries/agencies do not systematically identify senior responsible officers for major investment projects, and implementation plans are not prepared prior to budget approval. - Ministries/agencies systematically identify senior responsible officers for major investment projects, but implementation plans are not prepared prior to budget approval. - Ministries/agencies systematically identify senior responsible officers for major investment projects, and implementation plans are prepared prior to budget approval. - 14.b. Has the government issued rules, procedures, and guidelines for project adjustments that are applied systematically across all major projects? - There are no standardized rules and procedures for project adjustments. - For major projects, there are standardized rules and procedures for project adjustments, but do not include, if required, a fundamental review and reappraisal of a project’s rationale, costs, and expected outputs. - For all projects, there are standardized rules and procedures for project adjustments and, if required, include a fundamental review of the project’s rationale, costs, and expected outputs. - 14.c. Are ex post audits of capital projects routinely undertaken? - Major capital projects are usually not subject to ex post external audits. - Some major capital projects are subject to ex post external audit and information on the results is published by the external auditor. - Most major capital projects are subject to ex post external audit, and information on the results is regularly published and scrutinized by the legislature. ### O. Monitoring of public assets - 15.a. Are asset registers updated by surveys of the stocks, values, and conditions of public assets regularly? - Asset registers are neither comprehensive nor updated regularly. - Asset registers are either comprehensive or updated regularly at reasonable intervals. - Asset registers are comprehensive and are updated regularly at reasonable intervals. - 15.b. Are nonfinancial asset values recorded in the government financial accounts? - Government financial accounts do not include the value of nonfinancial assets. - Government financial accounts include the value of some nonfinancial assets, which are not revalued regularly. - Government financial accounts include the value of most nonfinancial assets, which are revalued regularly. - 15.c. Is fixed asset depreciation captured in the government's operating statement? - Fixed asset depreciation is not captured in the government operating statement. - The depreciation of fixed assets is recorded in operating statements, based on statistical estimates. - The depreciation of fixed assets is recorded in operating expenditures, based on asset-specific assumptions. ### Cross‑cutting issues - A. IT support: Is there a comprehensive computerized information system for public investment projects to support decision making and monitoring? - B. Legal framework: Is there a legal and regulatory framework that prescribes institutional arrangements, mandates, coverage, procedures, standards and accountability for effective public investment management (PIM)? - C. Staff capacities: Do staff capacities (number of staff and/or their knowledge, skills, and experience) and the clarity of roles and responsibilities support effective public investment management institutions? *Source: 1ginea2019002 - 1.  Fiscal objectives and rules: D* --- _Source: https://www.imf.org/-/media/files/publications/cr/2019/1ginea2019002.pdf_