## 1gmbea2019002 — Public Investment Management Assessment (selected findings and recommendations) ## Source details **Canonical URL:** [1gmbea2019002 — Public Investment Management Assessment (selected findings and recommendations)](https://www.imf.org/-/media/files/publications/cr/2019/1gmbea2019002.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2019/1gmbea2019002.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2019/1gmbea2019002.pdf.json) --- ### Strategic context and high-level findings - Public investment has averaged "only about 6 percent of GDP" since 2008, around two percentage points lower than the average of sub-Saharan African (SSA) countries. - External financing dominates public investment: in recent years, around "85–90 percent" of infrastructure has been externally financed. - Over 2008 to 2018, "83 percent" of public investment was funded by donors. - In 2018 donors accounted for "90 percent" of public investment spending ("6.7 percent of GDP"), with "71 percent" of donor funding as grants. - Public debt has increased since 2007 and is estimated at "87 percent of GDP at end-2018"; debt is described as unsustainable per the 2018 Debt Sustainability Analysis. - Public capital stock measurement is weak: - Alternative published estimate: public sector capital stock equivalent to "35.8 percent of GDP in 2016" (IMF Fiscal Monitor, October 2018). - Total fixed assets from agencies’ financial statements: "D17 billion in 2017, approximately US$ 340 million". - Estimated capital stock per capita has been relatively constant at around "120 percent of GDP" since 1990 and approximated the SSA average in 2015. - State-Owned Enterprises (SOEs) hold about "60 percent" of the public capital stock and show weak financial performance and governance problems. - Estimated public investment efficiency gap in The Gambia is "37 percent"; figure annotation cites an average inefficiency of "41 percent". ### Patterns, composition and PPPs - Composition of donor funding (five years to 2018): "47 percent" of donor funding comprised loans and the balance grants. - Major donors: World Bank, Islamic Development Bank, African Development Bank, European Union; World Bank and African Development Bank together accounted for "31 percent" of donor funding over 2012–17. - Predominant investment areas: roads and bridges (including the Senegambia Bridge), agriculture, the environment and energy. - PPPs: few PPPs implemented in past ten years; PPP track record described as patchy with poor design, implementation and weak controls. Selected project statuses (2016 screening): - Senegambia Bridge Concession: bridge handed to government and open to light vehicles; access roads to be completed in mid-2019; role of future PPP transactions under review. - Road Maintenance Area-Based Concessions: Not Commenced. - Banjul-Barra Bridge Concession: Not Commenced. - The Gambia River Ferry Concessions: Not Commenced. - Banjul Port Terminal Concession: Not Commenced. - National Data Centre: Feasibility Study completed. - GAMSWITCH: Completed. - Electricity Generation Concession(s): Karpowership signed a "two-year 30MW Power PPA with NAWEC in February 2018"; powership started operating in May 2018. - National Conference Centre Concession: Under construction – "US$50 million" facility. ### PIMA institutional performance — strengths and weaknesses - Strengths: - Comprehensive National Development Plan (NDP) 2018–21 with measurable targets and costing. - Coordination between central and local government (framework exists). - Comprehensiveness and unity of the budget (all MDA expenditures authorized in central government budget). - Weaknesses: - Many information gaps and non-transparent disclosure policies; no comprehensive asset register. - Multiple IT systems lacking interoperability; duplicate data entry and manual reconciliation. - Weak and overlapping organizational structures; laws and procedures often not followed. - Absence of clear operating guidelines for prioritization, selection of projects and monitoring/evaluation. - Significant capacity gaps in infrastructure governance and SOE corporate governance, internal controls, procurement and IT systems. - Donor influence caveat: - Donor project management procedures are generally stronger than government procedures; high reliance on donor funding ("85–90 percent") inflates some effectiveness scores. - The report provides adjusted scores reflecting GLF-funded projects only (where donor practices are excluded), and notes many dimensions would be rated one step lower without donor practices. ### Detailed institutional findings (selected indicators and exact ratings) - Fiscal principles or rules: Institutional design — "Low"; Effectiveness — "Low". - National and sectoral plans: Institutional design — "Medium"; Effectiveness — "Medium". - Project appraisal: Institutional design — "Low"; Effectiveness — "Medium" (noting a "^" caveat that effectiveness would be one step lower if donor practices excluded). - Alternative infrastructure financing: Institutional design — "Low"; Effectiveness — "Low". - Multi-year budgeting: Institutional design — "Low"; Effectiveness — "Low". - Budget comprehensiveness and unity: Institutional design — "Medium"; Effectiveness — "Medium". - Budgeting for investment: Institutional design — "Low"; Effectiveness — "Medium". - Maintenance funding: Institutional design — "Low"; Effectiveness — "Low". - Project selection: Institutional design — "Medium"; Effectiveness — "Low". - Procurement: Institutional design — "Medium"; Effectiveness — "Medium" (with "^" caveat for GLF-only assessment). - Availability of funding: Institutional design — "Medium"; Effectiveness — "Medium". - Portfolio management and oversight: Institutional design — "Low"; Effectiveness — "Medium". - Project implementation: Institutional design — "Low"; Effectiveness — "Medium" (with "^" caveat). - Management of public assets: Institutional design — "Low"; Effectiveness — "Low". ### Evidence on budgeting, maintenance and assets - GLF average share of total capital investment captured by Statement of Government Operations (five years to 2018): "16 percent". - In 2018 donors accounted for "90 percent" of public investment (6.7 percent of GDP), with "71 percent" of donor funding as grants. - Maintenance budgeting (Government Buildings and Quarters, Dalasis): - 2014: Budget "32 768 592"; Actual "56 959 514"; Under/(Over)-Spent "(24 190 922)"; % Under-/(Over-spent) "(73.8)". - 2015: Budget "29 538 140"; Actual "29 929 197"; Under/(Over)-Spent "(391 057)"; % Under-/(Over-spent) "(1.3)". - 2016: Budget "27 519 400"; Actual "19 898 865"; Under/(Over)-Spent "7 620 535"; % Under-/(Over-spent) "27.7". - SOE external debts (percent of GDP) — Table 3.2: - 2010: "6.4" - 2011: "8.7" - 2012: "10.0" - 2013: "11.5" - 2014: "12.5" - 2016: "13.5" ### IT systems, reporting and capacity issues - Multiple systems with limited interoperability: - Epicor 9 FMIS (to be replaced by Epicor 10 from January 2020); current system does not identify individual capital projects. - Aid Management Platform (AMP) introduced 2015; records total project cost and disbursements but does not record planned yearly costs or physical progress and does not identify individual capital projects. - Aid Monitoring and Evaluation Tool (expected operational June 2019) planned to expand AMP functionality but preliminary indications suggest data will not be shared between AMP and the tool. - CS-DRMS (loan and debt management) upgraded to version 2.3 in April 2019; migration to Meridian planned for June 2019. - SOE Portal publicly accessible but does not systematically identify SOE-funded economic infrastructure projects. - IT governance gap: MoFEA lacks a Chief Information Officer (CIO)-equivalent and an IT strategy. ### Procurement: compliance and transparency - Legal framework updated (GPPA Act 2014); GPPA covers central government, local government and SOEs. - In practice, open tender used infrequently: only "13 percent" and "10 percent" of tenders over D 1 million presented to GPPA were open in 2015 and 2016 respectively. - GPPA compliance statistics (Table 3.4): - Submit annual procurement plan: "50-60 percent". - Submit monthly reports (complete 12 monthly reports): "30 percent". - Considered in compliance with rules: "47 percent". - Public disclosure and publication of procurement stages/awards limited; GPPA annual report last published covering years "2015 and 2016 combined". - Donor procurement procedures often take precedence and most PCUs follow donor-specific procurement procedures. ### Cash management and availability of funding - GLF cash flow forecasts updated monthly; commitment ceilings generally set one month in advance. - GLF visibility limited to one month; commitment recording for construction contracts not consistently applied. - There are "46" project accounts in the Central Bank of The Gambia (CBG), "two 'basket' accounts" in government account structure in CBG, and "eight" project accounts in commercial banks. - Funding availability is generally good for donor-funded projects (donor disbursements reliable upon milestone completion), while GLF funding is less predictable and frequently crowded out by current expenditures. ### Portfolio oversight, monitoring and audits - No centralized agency responsible for the public investment portfolio; monitoring of major capital projects is limited. - DAC monitors selected externally-financed projects quarterly but reports do not consistently track implementation against milestones or annual/total project costs. - No government requirement exists to conduct ex-post reviews of projects; National Audit Office lacks capacity to systematically audit capital projects. - Donor ex-post reviews are the exception where implemented (e.g., World Bank Implementation Completion Reports). ### Main reform recommendations (summary with exact timelines) - The recommendations focus on five priority areas intended to complement ongoing reforms. Action owners and timelines are as specified in the chapter. 1) Operationalize MIIT and GSRB - Prepare TORs for the two committees (September 2019). - Issue a decree establishing the committees and defining roles and responsibilities (December 2019). - Prepare criteria for project selection (June 2020). - Action owner: MoFEA and Office of the President. 2) Expand Aid Management Platform (AMP) - Include projects from all financing sources (grants, loans and GLF) and monitor projects across all stages. - Prepare an action plan for AMP development and roll-out (December 2019). - Obtain technical support from development partners, as required (March 2020). - Complete roll out (June 2020). - Publish information from AMP each quarter (June 2020). - Action owner: Directorate for Aid Coordination and Budget Directorate. 3) Improve classification and reporting of maintenance and capital spending - Revise Chart of Accounts (COA) in the new program budgeting framework. - Complete COA update and issue guidelines to MDAs (December 2019). - Fully implement revised COA in the 2021 budget (June 2020). - Action owner: Budget Directorate and Accountant General’s Directorate. 4) Prepare and publish a comprehensive register of government physical assets - Issue guidelines to MDAs on preparing and maintaining the stock and value of assets (June 2020). - Identify one or two pilot MDAs and complete pilots (December 2020). - Extend register to all MDAs and publish data (June 2022). - Action owner: Accountant General’s Directorate, with selected MDAs. 5) Strengthen IT systems integration and IT management in MoFEA - Appoint a Director of IT Services in MoFEA (January 2020). - Prepare a 3-year strategic plan for IT rationalization in MoFEA (December 2020). - Action owner: Permanent Secretary and IT Unit, MoFEA. - Additional recommendations include: prepare guidelines on project appraisal (December 2020); consider establishing a Public Investment Management (PIM) Unit as a later reform; strengthen SOE oversight including draft SOE Act adjustments and clearer MoFEA role in SOE financial oversight. ### Draft SOE Act and SOE oversight concerns - Draft SOE Act (2018) would establish a State-Owned Enterprise Regulatory Commission and set corporate governance arrangements, but the draft: - May understate MoFEA’s role in setting performance targets and overseeing financial performance. - Lacks clarity on Commission resourcing and enforcement capacity. - Omits explicit criteria tying Commission decisions to fiscal risk, debt or government objectives. - Does not require adoption of IFRS (or simplified IFRS) by SOEs within a specified deadline. - Recommendations include enhancing the role of DPPP-PE in MoFEA to oversee SOE budgets, performance targets, dividend policies, public service obligations and consolidated annual SOE performance reporting; reflect loans to SOEs that do not represent adequate returns "above the line" in fiscal statements; and consider risk-hedging mechanisms for state support. ### Project selection criteria and decision-support tools - Mandatory criteria for final approval: Strategic alignment; Economic benefit; Affordability (including O&M and fiscal impact); Project readiness. - Suggested decision-support instruments: - Publish formal project selection criteria and a project scorecard template covering: project title; objectives and strategic alignment; expected economic and social impact; project components; project cost; funding sources; budget impact (capital and recurrent) by year and impact on debt; risks and contingent liabilities; project readiness items (feasibility, procurement, implementation timetable). - Implementation steps: expand GSRB TORs to cover all major projects; ensure GSRB advises MIIT; build MoFEA capacity to support GSRB/MIIT and apply scorecards. *Source: PREFACE, Executive Summary, and Chapters I–III excerpts — 1gmbea2019002.* ### PREFACE _________________________________________________________________________________________ 7 ### PREFACE ### Mission and Composition - A Fiscal Affairs Department (FAD) capacity development mission visited Banjul during April 23 to May 6, 2019 to undertake a Public Investment Management Assessment (PIMA). - The mission was led by Mr. Richard Allen and comprised Ms. Michelle Stone (both FAD), Mr. Luis Camacho (IMF Resident PFM Advisor in The Gambia), Mr. David Gentry and Mr. Graham Smith (both FAD experts), and Ms. Mehwish Ashraf (World Bank). - Mr. Mouhamadou Ndoye (World Bank procurement specialist based in Senegal) joined the mission for the last few days. ### Key meetings and stakeholders engaged - Met with Ministry of Finance and Economic Affairs (MoFEA) senior officials, including: - Mr. Mod AK Secka, Permanent Secretary, MoFEA; Mr. Bai Madi Ceesay, Director of Budget; Mr. Lamin Fatty, Deputy Director, Budget; Mr. Bakary Krubally, Director of Aid Coordination; Mr. Baboucarr Jobe, Director of Economic Policy and Research; Mr. Alagie Taal, Director of Macroeconomic Policy Analysis; Mr. Mustapha Samateh, Director of PPPs and Public Enterprises; Mr. Lamin Jobe, Deputy Director of Development Planning; Mr. Modou Ceesay, Director of Internal Audit; Mrs. Clara Saine, Deputy Accountant General; Mrs. Amie Kolleh Jeng, Director of the PFM Reform Unit; and Mr. Ngage Gaye, Principal Loans Officer, Debt Management. - Met with senior officials from sector ministries and agencies, including: - Mr. Bai Lamin Jobe, Minister of Works, Transport and Infrastructure; Mrs. Mariama Njie, Permanent Secretary, Ministry of Works, Transport and Infrastructure; Mr. Ebrima Sisawa, Permanent Secretary, Ministry of Basic and Primary Education; Mr. Gibril Jarju, Director of Planning, Ministry of Health; Mr. Yankuba Darboe, Commissioner General, Gambia Revenue Authority; Mr. Halifa Sallah, Chairman of the Public Enterprise Committee of the National Assembly; Mr. Karamba Touray, Auditor General; Mr. Abdoulie Tambedou, Director General, Gambia Public Procurement Authority; Mr. Modou Ceesay, Director, Public Utilities Regulatory Authority; Mr. Alajie Ceesay, Deputy Managing Director, Gambia Ports Authority; Mr. Baba Fataja, Managing Director, NAWEC; Mr. Omar Gaye, Technical Director, GAMWORKS; Mr. Amara Batchilly, CEO, Banjul City Council; and Mr. Luis Poladura, Director of Works, Arezki (Senegambia Bridge). - The mission presented findings to a meeting of development partners chaired by the IMF Resident Representative. ### Acknowledgements - The mission expressed appreciation to the Gambian authorities for cooperation, and gave special thanks to Mr. Luis Camacho and Ms. Asta Jobe of MoFEA’s Economic Policy and Research Directorate for preparing the meeting schedule and logistical support. - Additional thanks to Ms. Ruby Randall, IMF Resident Representative, and Ms. Isatou Njie at the IMF country office for support. ### Executive Summary — Strategic context - The government has highlighted infrastructure development as a key element of The Gambia’s National Development Plan, 2018–21. - After a spurt in the early 2000s, public investment slowed and since 2008 has averaged only about 6 percent of GDP, around two percentage points lower than the average of sub-Saharan African (SSA) countries. - Public investment has been constrained by tight fiscal constraints and high debt levels. - The need for increased public investment should be balanced against potential fiscal risks related to future Public Private Partnerships (PPPs) and State-Owned Enterprise (SOE) investments; these risks should be carefully managed to mitigate negative fiscal and debt impacts. ### Patterns and composition of public investment - External financing dominates public investment: in recent years, around 85–90 percent of infrastructure has been externally financed. - Major donors include the World Bank, the Islamic Development Bank, the African Development Bank and the European Union. - Predominant investment areas: roads and bridges (including the Senegambia Bridge), agriculture, the environment and energy. - SOEs own about 60 percent of the public capital stock; their investment has been affected by very weak financial performance and poor governance, as highlighted in a recent special audit of seven large SOEs. - Local government sector investment is small. - Few PPPs have been implemented in the past ten years; PPP track record is patchy with poor design, implementation and weak controls. ### Efficiency and impact of public investment - Perceptions of overall infrastructure quality are somewhat better in The Gambia than other SSA countries. - Access to health, education and road infrastructure is lower than the SSA average; access to electricity is better. - Key health indicators (life expectancy, infant mortality, incidence of malaria) have been improving. - On the IMF’s overall indicator of public investment efficiency, The Gambia’s estimated efficiency gap is 37 percent, broadly in line with other SSA and low-income developing countries. - To increase infrastructure efficiency, the government must strengthen public investment management institutions. ### PIMA institutional performance — summary - The report analyzes 15 institutions across three PIM phases: planning, allocation of resources, and implementation & evaluation. - Strengths: - Comprehensive national development planning system. - Coordination between central and local government. - Comprehensiveness and unity of the budget. - Weaknesses: - Many information gaps and non-transparent disclosure policies. - Multiple IT systems lacking interoperability. - Weak and overlapping organizational structures. - Absence of clear operating guidelines (e.g., prioritization and selection of projects). - Flawed monitoring and evaluation systems. - Significant capacity gaps in infrastructure governance. - Existing legal frameworks, rules and procedures often not followed. - SOE corporate governance, internal controls, procurement procedures and IT systems show serious challenges. ### Donor influence caveat - Donor project management procedures are generally stronger than government procedures. - High reliance on donor funding (85–90 percent of development projects) raises overall PIMA effectiveness ratings for several indicators. - The report includes assessed scores and adjusted scores reflecting practices for GLF-funded projects only, showing where donor practices inflate effectiveness. - Ongoing PFM reforms (MTFF/MTBF, SOE governance, PPPs, procurement, cash management) could significantly improve PIMA scores. - Reforms should aim to deliver effectiveness through domestic systems rather than dependence on donor systems. ### PIMA Summary Assessment (high-level findings from Table 1) - Planning phase highlights: - Fiscal principles or rules: Institutional design Low; Effectiveness Low (no fiscal rules or debt limits; MTFF under preparation; implicit limits breached). - National and sectoral plans: Institutional design Medium; Effectiveness Medium (NDP comprehensive with measurable targets and costing; NDP leads priorities chiefly for donor-funded projects). - Project appraisal: Institutional design Low; Effectiveness Medium^ (project appraisal not required for all projects; donors typically apply sound appraisals; ^ indicates one-step lower if donor practices excluded). - Alternative infrastructure financing: Institutional design Low; Effectiveness Low (PPPs legal framework incomplete; SOEs ≈ 60% of public capital stock). - Allocation phase highlights: - Multi-year budgeting: Institutional design Low; Effectiveness Low (multi-year projections not in budget; MTBF being planned). - Budget comprehensiveness and unity: Institutional design Medium; Effectiveness Medium. - Budgeting for investment: Institutional design Low; Effectiveness Medium (donor agreements provide multiyear outlays). - Maintenance funding: Institutional design Low; Effectiveness Low (maintenance identified but not estimated with standard methodology; reported classification not aligned with GFS). - Project selection: Institutional design Medium; Effectiveness Low (procedures exist but not implemented; limited central capacity). - Implementation phase highlights: - Procurement: Institutional design Medium; Effectiveness Medium^ (open tender preferred; GLF procurements not competitive in practice). - Availability of funding: Institutional design Medium; Effectiveness Medium (GLF cash plans quarterly; GLF funding availability unreliable). - Portfolio management and oversight: Institutional design Low; Effectiveness Medium (limited monitoring for GLF; donors have systematic re-allocation practices). - Project implementation: Institutional design Low; Effectiveness Medium^ (PCUs operational; ex post audits for GLF rare). - Management of public assets: Institutional design Low; Effectiveness Low (depreciation reported but not based on asset registers; asset registers not comprehensively prepared; asset register planned beginning 2020). - Institutions marked with “X” in Table 1 denote subjects of specific recommendations in the report. - “^” indicates dimensions that would be rated one step lower if donor practices were excluded. ### Main recommendations (summarized from Table 2) - The recommendations focus on five priority areas designed to complement ongoing reforms. 1) Operationalize MIIT and GSRB - Prepare TORs for the two committees (September 2019). - Issue a decree establishing the committees and defining roles and responsibilities (December 2019). - Prepare criteria for project selection (June 2020). - Action owner: MoFEA and Office of the President. 2) Expand Aid Management Platform (AMP) - Include projects from all financing sources (grants, loans and GLF) and monitor projects across all stages. - Prepare an action plan for AMP development and roll-out (December 2019). - Complete roll out (June 2020). - Publish information from AMP each quarter (June 2020). - Action owner: Directorate for Aid Coordination and Budget Directorate. 3) Improve classification and reporting of maintenance and capital spending - Revise Chart of Accounts (COA) in the new program budgeting framework. - Complete COA update and issue guidelines to MDAs (December 2019). - Fully implement revised COA in the 2021 budget (June 2020). - Action owner: Budget Directorate and Accountant General’s Directorate. 4) Prepare and publish a comprehensive register of government physical assets - Issue guidelines to MDAs on preparing and maintaining the stock and value of assets (June 2020). - Identify one or two pilot MDAs and complete pilots (December 2020). - Extend register to all MDAs and publish data (June 2022). - Action owner: Accountant General’s Directorate, with selected MDAs. 5) Strengthen IT systems integration and IT management in MoFEA - Appoint a Director of IT Services in MoFEA (January 2020). - Prepare a 3-year strategic plan for IT rationalization in MoFEA (December 2020). - Action owner: Permanent Secretary and IT Unit, MoFEA. - Most recommended reforms are described as "quick wins" and relatively easy to implement; later reforms could include establishing a Public Investment Management (PIM) Unit in MoFEA. *Source: PREFACE and EXECUTIVE SUMMARY, 1gmbea2019002 - PREFACE.* ### 1. Public investment in The Gambia is constrained by low domestic revenue and high ### 1gmbea2019002 - 1. Public investment in The Gambia is constrained by low domestic revenue and high ### Overview - Public investment in The Gambia is constrained by low domestic revenue and high public debt. - As one of Africa’s poorest countries, funding for the capital program comes primarily from donors. - Debt has been increasing since 2007 after HIPC debt relief and is now nearing 90 percent of GDP. ### Data and measurement - Annual public investment is estimated by the MoFEA in the April 2019 Statement of Government Operations, which captures transactions with line ministries and proposals for investment projects delivered by SOEs, but not all SOE investment activities. - Estimates of the stock of public infrastructure are unreliable because non-financial assets are not systematically recorded; planned efforts to improve capital stock measurement are described in Chapter III (Institution 15). - Alternative published estimates: the October 2018 IMF Fiscal Monitor reports a significantly lower level of public sector capital stock, equivalent to 35.8 percent of GDP in 2016. - The total fixed assets taken from agencies’ own financial statements was D17 billion in 2017, approximately US$ 340 million. ### Public capital stock and infrastructure levels - The estimated capital stock per capita in The Gambia has been relatively constant at around 120 percent of GDP since 1990 and approximated the SSA average in 2015 (latest comparable year). - Roughly two-thirds of the public capital stock is held by the seven major SOEs (water, electricity, the sea port and airport, communications, housing and petroleum). ### Public debt and fiscal constraints - Public debt fell sharply in 2006 after HIPC debt relief, but returned to an upwards trajectory and in 2017 exceeded the debt-to-GDP ratio immediately before relief was provided. - The 2018 Debt Sustainability Analysis indicated that debt is unsustainable. - To restrict the debt burden going forward, the authorities plan to limit external borrowing to loans that have at least a 50 percent grant element. - The April 2019 IMF World Economic Outlook Database is used for public debt and budget deficit series; results for 2018 onwards are estimates. ### Composition of public investment - Over 2008 to 2018, 83 percent of public investment was funded by donors. - Over the five years to 2018, the portion funded by the Gambian budget (Gambia Local Fund, GLF) averaged 16 percent of the total capital investment captured by the Statement of Government Operations. - Of donor funding over the same period, 47 percent comprised loans and the balance through grants. - Donor support increased following the transition to the new government in 2017; in 2018 donors accounted for 90 percent of public investment spending (6.7 percent of GDP), with 71 percent of the donor funding coming in the form of grants. - The World Bank and the African Development Bank together accounted for 31 percent of donor funding over 2012–17. - The authorities project a slight overall decline in donor funding in future years; a return to more typical donor levels would dramatically reduce resources available for public investment. - Most donor support is directed to transport and agriculture sectors (projects in the Aid Management Platform, 2012–17). ### Public-Private Partnerships (PPPs) - The Gambia has implemented a small number of PPPs and is developing further proposals. Selected project statuses from a 2016 screening: - Senegambia Bridge Concession: Bridge handed to government and open to light vehicles; access roads to be completed in mid-2019; role of future PPP transactions under review. - Road Maintenance Area-Based Concessions: Not Commenced. - Banjul-Barra Bridge Concession: Not Commenced. - The Gambia River Ferry Concessions: Not Commenced. - Banjul Port Terminal Concession: Not Commenced. - National Data Centre: Feasibility Study completed; being promoted by the Gambia Investment and Export Promotion Agency. - GAMSWITCH (National Electronic Payment Switch): Completed; operates as a company under the Central Bank of The Gambia and a few private investors. - Agri-Business Value-Chain Development: Concept Note. - Electricity Generation Concession(s): Karpowership signed a 2-year 30MW Power PPA with NAWEC in February 2018; the powership Koray Bey started operating in May 2018. - National Conference Centre Concession: Under construction – US$50 million facility as part of the Government contribution to hosting the 2019 OIC summit in early October. ### Efficiency and impact of public investment - Perceptions of infrastructure quality (World Economic Forum survey): perceived quality in The Gambia exceeds the SSA and LIDC averages, though the gap narrowed from 2010 to 2015. - Access to infrastructure: - Electricity access has been steadily rising over 1990–16 and is better than comparators; however transmission and distribution outside Banjul remains a challenge and country-wide supply is unreliable. - Public infrastructure in health (hospital beds per 1,000 persons) and education (secondary teachers per 1,000 persons) fall below SSA and LIDC averages. - Access to at least basic drinking water services was approaching 80 percent in 2015 and is well above the SSA average. - The share of the population with access to basic sanitation services fell from 55 percent in 2000 to 42 percent in 2015 and is comparable to the SSA average. - Health outcomes: - Life expectancy at birth has increased since 1990 and now aligns with the SSA average. - Infant mortality per 1,000 live births has fallen and remains substantially below the SSA average. - The incidence of malaria per 1,000 population at risk has fallen dramatically since 2010 and now stands well below the SSA average. - Health expenditures (PPP basis) peaked in 2008 and have fallen as a share of GDP: 6.2 percent in 2011, compared to 4.4 percent in 2016. - Education: - Adjusted net enrollment of primary school age children in primary or secondary education increased to 79 percent in 2018, exceeding the previous high of 77 percent and aligning The Gambia with the SSA average; higher utilization and attendance followed the introduction of free primary education in 2018. ### Public investment efficiency assessment - IMF methodology compares output of public investment to per capita public capital stock to estimate efficiency. - The estimated efficiency gap in The Gambia is 37 percent, broadly comparable to SSA and LIDCs, but worse than best performing countries. - There remains substantial scope to improve public investment efficiency; Chapter III analyzes gaps across 15 PIM institutions and proposes recommendations. - Average inefficiency cited in figure annotation: 41 percent. ### Public Investment Management Assessment (PIMA) — overall findings - The PIMA assesses 15 institutions across planning, allocation, and implementation stages, scoring institutional design and effectiveness. - Two issues affecting assessment interpretation: - Development projects vs capital projects: The Gambian system prepares recurrent and development budgets (development budget includes recurrent and capital), and does not identify individual capital projects; this PIMA equates development and capital projects for assessment. - Effectiveness scores may be raised by donor PIM practices: because more than 80 percent of the development budget is donor-funded, donor-imposed PIM rules often reflect international good practice; institutional design scores are based on local institutions while some effectiveness scores reflect donor practices. - Overall PIMA conclusion: - Infrastructure institutions are relatively weak and lower than many regional comparators. - Strengths: national and sectoral development planning, coordination between central and local government, comprehensiveness and unity of the budget, developing internal audit function. - Weaknesses: laws/regulations not always applied or enforced; significant data gaps (no comprehensive asset register); organizational units and IT systems that do not communicate well (including in MoFEA); serious cases of financial irregularity and lack of control in many areas (e.g., financial oversight of SOEs); generally non-transparent fiscal information systems and disclosure policies. *Italic: Source — 1gmbea2019002 - 1. Public investment in The Gambia is constrained by low domestic revenue and high (IMF PDF content).* ### 20. The recommendations set out at the end of this chapter provide guidance on topics ### 20. The recommendations set out at the end of this chapter provide guidance on topics selected by the mission as priority areas of reform ### Ongoing reforms that could improve PIMA scores - Medium-Term Fiscal Framework/Medium-Term Budget Framework — impacts: 1. Fiscal principles and rules; 6. Multi-year budgeting - Public procurement reforms — impacts: 11. Procurement - Budget credibility (expenditures) — impacts: 2. National and sectoral plans; 4. Project appraisal; 10. Project selection - Cash forecasting/cash management — impacts: 12. Availability of funding - Arrears management — impacts: 6. Multi-year budgeting; 12. Availability of funding - SOE and PPP Laws/Reforms — impacts: 5. Alternative infrastructure financing - Integrated Financial Management Information System Modernization / Epicor — impacts: 10; 15. Asset register - Draft National Public Building and Facilities Policy — impacts: 14. Maintenance; 15. Asset register - Cross-cutting examples noted: PPP Operational Guidelines 2016; rules on virement and public procurement; recording of spending commitments; quarterly expenditure reports by PCUs to the AGD; NAO audits of completed projects; AGD guidelines to MDAs on the preparation of an asset register. _Source: IMF Staff._ ### B. Planning Sustainable Levels of Public Investment — summary of findings and assessments #### 1. Fiscal rules (Institutional design – Low; Effectiveness – Low) - The Gambia has no formal rules aimed at instituting fiscal discipline or safeguarding debt sustainability; the Public Finance Act (PFA) 2014 governs public financial management, budgeting and debt management but lacks rules on public investment and fiscal responsibility. - Limits on domestic and external borrowing were part of quantitative ceilings under the IMF program in 2017; authorities have been targeting a net domestic borrowing (NDB) limit of 1 percent of GDP, communicated through the budget document, to contain public debt—this limit is under review. - Borrowing limits are not adhered to: - The Staff-Monitored Program (SMP) starting April 2017 stipulated quarterly limits (including on NDB and on new non-concessional external debt); authorities could not comply with these targets in three of the four reviews under the program. - The implicitly-set NDB target under the budget was not attained for 2018: NDB was 3.4 percent of GDP in 2018 due to a shortfall in budget support, spending overruns on goods and services, and unbudgeted transfers to SOEs. - Public debt is estimated at 87 percent of GDP at end-2018. - PFA 2014 provides for a multiyear perspective in fiscal planning; since 2012 forecasts and ministry ceilings have been developed in a Budget Framework Paper (BFP) and submitted to Cabinet for pre-approval before the Budget Call Circular (BCC) is issued. - A medium-term fiscal framework (MTFF) was drafted in 2018 but not approved nor integrated in the 2019 budget nor published. - An MTFF for the 2020 budget is being prepared by the MoFEA and is expected to be consistent with an updated medium-term debt management strategy; authorities plan to submit MTFF to the Cabinet for approval by end June 2019. The MTFF could serve as a credible anchor for medium-term reform and investment program ensuring fiscal and debt sustainability. - A medium-term budget framework is being prepared in parallel (see Indicator 6). #### 2. National and sectoral planning (Institutional design – Medium; Effectiveness – Medium) - National Development Plan (NDP) 2018–21 provides the strategic planning framework and includes broad estimates of costs for development programs and projects over four years (aligned with the presidential term). - Sector plans are formulated by MDAs (education, health, transport), but the NDP acknowledges excessive policy fragmentation at the sector level; for the next cycle (2022–25) the government resolved to “strengthen the links between the NDP and sector plans to ensure a tighter alignment between existing and new plans with the NDP, in terms of both substance and orientation of the planning cycle.” - The NDP captures development projects for inclusion in the budget but prioritization is weak; there is no ranked priority list to indicate funding order as resources become available, making it difficult to link the NDP to the MTFF and the annual budget. - An ongoing initiative to introduce program-based budgeting (PBB) aims to strengthen planning–budgeting links and create a uniform structure of programs, targets and indicators. - The NDP contains measurable targets for outputs and outcomes and provides aggregate costs of priority projects, but sector strategies do not detail capital investments by year aligned to fiscal constraints. - The NDP financing strategy (presented at the International Conference on The Gambia in Brussels in May 2018) costed 21 priority projects with a value of US$2.4 billion, of which US$750 million is committed leaving a US$1.6 billion shortfall. - Many sector strategies are broadly defined, overly ambitious and aspirational; plans are perceived as mechanisms to attract donor funding rather than being aligned to the available resource envelope. - Recommendation implication: sector strategies should profile priority projects with estimates of total and annual costs, and expected outputs and outcomes. #### 3. Coordination between entities (Institutional design – Medium; Effectiveness – Medium) - Local Government Act (LGA) 2002 provides for inter-governmental fiscal transfers: Section 128(3) states the Central Government shall provide 25 percent of the Local Government Areas (LGAs) development budget; in practice this has not been followed and LGAs cannot rely on central transfers for priority capital projects or counterpart funding for donor-financed projects. - Most local-level capital investment is delivered through a devolved model where devolved departments of central MDAs manage implementation based on sector plan priorities; GAMWORKS (established 1993) implements small capital infrastructure aligned to local council priorities. - GAMWORKS has been responsible for the implementation of US$200 million of capital investment in small to medium sized public works projects, approximately US$8 million per annum on average over the last 25 years. - Borrowing without approval of the MoFEA is prohibited for local governments and public enterprises under PFA 2014: - Section 54 allows LGAs to raise loans within The Gambia only with endorsement of the Ministry of Lands and Regional Government and approval of the MoFEA. - Section 55 allows LGAs to obtain a bank overdraft subject to defined conditions. - Section 56 prohibits public enterprises from borrowing, raising overdrafts and extending guarantees unless approved by the MoFEA. - Reporting of contingent liabilities by the MoFEA is not timely, comprehensive or accurate, contrary to PFA 2014 requirements: - Section 50 requires MoFEA to keep timely, comprehensive and accurate records of all state debt, including contingent liabilities; in practice the debt register is not up-to-date, comprehensive or accurate. - No data on guarantees issued by the government to SOEs or other entities are published in the MoFEA’s annual Debt Bulletin or other documents; many guarantees are implicit, including government assuming debt responsibilities of bankrupt SOEs. - Example: Debt Bulletin (2017) acknowledged government purchased a 12 percent seven-year National Water and Energy Company (NAWEC) Bond valued at US$31.5 million, representing 6 percent of the total stock of public debt. #### 4. Project appraisal (Institutional design – Low; Effectiveness – Medium) - Robust appraisal processes covering financial, economic and technical aspects of public investment are not in place; the Gambia Strategic Review Board (GSRB) intended to oversee project selection is not yet fully operational. - Projects are not systematically chosen to ensure strong economic and social returns; robust appraisals should include financial, economic, technical factors and risk management using standard and transparent methodology before proceeding. - PPPs have stronger appraisal requirements but few PPPs are in the pipeline and the PPP Operational Guidelines 2016 have not been implemented. - PPP Operational Guidelines 2016 elements (good-practice framework) require: - establishment of a PPP Committee chaired by the Minister of Finance and Economic Affairs to vet and oversee projects; - a framework for conducting a value for money assessment and a risk assessment; - financial appraisal covering specified elements; - minimum criteria for unsolicited proposals, including open tendering; - maintenance of a PPP register and ongoing monitoring and budget risk management by the PPP Directorate in the MoFEA. - Little evidence these PPP procedures have been followed or enforced: the PPP Oversight Committee has not been established, and the PPP and Public Enterprises Directorate appears not to have played a central role in advising government about costs and risks of PPPs. - Donor processes (World Bank and African Development Bank) have transparent appraisal processes and account for just under one-third of donor funding over the last five years; donor-driven appraisals are useful inputs but do not systematically capture the government’s long-run financial, economic and social consequences (including O&M costs and impacts on other priorities). - Government capacity to participate in, review or undertake appraisals is limited: - Directorate of PPPs and Public Enterprises (DPPP-PE) and the DAC within MoFEA have some staff to review proposals but resources are few and cannot provide robust reviews or support MDAs comprehensively. - At MDA level, capacity to undertake and review appraisals is variable; SOE financial appraisal is inconsistently undertaken (example: Gambia Ports Authority routinely conducts financial appraisal, uses consultants on larger projects, but this practice is not consistent across SOEs). - Case study: Senegambia Bridge - Crosses the River Gambia; provides first direct road link between north and south banks. - Opened to light vehicles in January 2019 and expected to be open to all vehicles by July 2019. - Has markedly reduced journey times (example: Dakar to Ziguinchor road trip reduced from a whole day to five hours when using the bridge). - Primarily funded through a grant from the African Development Bank; contractor Arezki overseen by project management consultants hired by National Roads Authority (NRA). - Original design unsuitable for mangrove location caused a 10-month delay and added EUR 16 million to the original cost estimate. - Benefits accrue to other regional countries (Senegal, Mali, Mauritania); tolling that recognizes benefits to foreign trucks will be critical to ensuring revenues for maintenance and access roads. - Impacts on Gambia Ports Authority: ferry route Yelitenda to Bamba was one of GPA’s most profitable routes and subsidized others; the bridge may make Banjul Port more attractive. #### 5. Alternative infrastructure provision (Institutional design – Low; Effectiveness – Low) - Legal and regulatory framework generally supports competition in markets for economic infrastructure but competition varies by sector. - Government has been attempting to open markets to attract private investment; telecommunications, road transport and air transport services are fully deregulated and liberalized. - Energy sector shows early signs of IPP entry but market remains small and dominated by NAWEC; IPP entry has been facilitated through unsolicited bids and direct negotiations to address emergency needs rather than through structured, transparent competitive bidding. - Port operations and services market is restricted to the Gambia Ports Authority (GPA), an SOE; water and sanitation services market is restricted to NAWEC. - Regulatory structure is fragmented and could be rationalized: - Public Utilities Regulatory Commission (PURA) regulates energy, water and telecommunications. - Regulation of transport markets is embedded within Ministry of Transport, Works and Infrastructure (MoTWI), which oversees policy, standards and compliance and approves GPA tariff structure for port operations and ferry services. - MoFEA responsible for financial reporting standards and compliance. - Issuance of commercial licenses to road haulage and passenger transport operators and vehicle licenses is regulated by the Gambia Police Force. - Gambia Maritime Authority issues commercial pilot licenses and registers maritime vessels. - Gambian Civil Aviation Authority issues commercial pilot licenses and registers aircraft. *Source: IMF Staff.* ### 38. The PPP Policy of 2015 and the Draft PPP Act (2018) guides government policy and ### 1gmbea2019002 - 38. The PPP Policy of 2015 and the Draft PPP Act (2018) guides government policy and ### PPP policy and project pipeline - The PPP Policy of 2015 and the Draft PPP Act (2018) provide the policy framework and operational guidelines for separate evaluation, selection and approval of PPP projects from other public investment projects. - A draft PPP Act (2018) was prepared to create the legal framework for institutionalizing procurement through PPP methods. - In January 2016, the DPPP-PE published findings of an initial screening of ten public investment projects to assess eligibility for PPP implementation; most of these projects are stalled in initial stages of project preparation (see Table 1.1 in Chapter I). - Donor-funded project agreements typically show total costs, detailed breakdowns, physical progress by year, and implementation schedules; the DAC consolidates project information in its AMP and Project Briefs are available on request. ### SOE oversight, performance and reform - The MoFEA’s DPPP-PE is primarily responsible for the financial oversight of The Gambia’s 13 SOEs, with a mandate to review SOEs’ investment plans and financial performance, but in practice this function is constrained by: - lack of timely data from the companies; - lack of a modern methodology for setting and evaluating financial targets and indicators; - absence of a consolidated report on SOE investment activities and financial performance; - limited data on government financial support to SOEs (subsidies, capital injections, on-lending and loan guarantees). - Oversight is blurred by fragmented and overlapping roles between MoFEA, parent MDAs and SOE boards, contributing to rising SOE debts (Table 3.2) and backlogs in annual financial statements dating back to 2015 or 2016 despite a legal requirement to publish within six months of the financial year end. - Table 3.2. The Gambia: External Debts Incurred by SOEs (percent of GDP) - Year: 2010 2011 2012 2013 2014 2016 - %: 6.4 8.7 10.0 11.5 12.5 13.5 - Source: MoFEA Loans and Debt Department; World Bank 2018. - In February 2018, Karpowership signed a two-year 30 MW Power Purchase Power Agreement with NAWEC. The Powership Koray Bey started operation in May 2018. - In April 2016, Cabinet approved a partial SOE reform program. Ernst and Young is assessing performance of the seven largest enterprises; the review still needs finalization and submission to Cabinet. - A draft SOE Act (2018) is under review; it would strengthen corporate governance and establish an SOE Commission but understates MoFEA’s role in setting performance targets and overseeing financial performance. Annex 2 provides comments on this legislation. - The government is drafting Shareholder Performance Agreements to supersede some founding Acts and increase accountability of boards and management. ### Multiyear budgeting (Institutional design – Low; Effectiveness – Low) - No projections of development spending are published beyond the budget year; such projections would guide spending ceilings in the MTFF/BFP and the budget call circular (BCC). - Indicative multi-year ceilings of development expenditures for MDAs have been provided in the BCC every year since 2014, covering the budget year plus two forward years; ceilings have been based on GLF funds only and have limited usefulness. - A new multiyear budgeting framework and MTFF is being prepared and planned for implementation in June 2019; it will consist of a 3-year program-based budget (PBB). - Identifying total project costs and money needed to complete projects (regardless of funding source) is important to: - manage GLF funding for wholly GLF-funded projects and GLF local match requirements for donor-funded projects; - convey to the National Assembly and the public physical progress on infrastructure. ### Budget comprehensiveness and unity (Institutional design – Medium; Effectiveness – Medium) - Comprehensiveness by spending entities is good; share of off-budget spending is relatively small. All MDA expenditures are authorized in the central government budget. Project Coordination Units (PCUs) and 47 subvented agencies are included in the budget (with a noted possible undercount versus other sources). - Information on PCUs and subvented agencies in the budget is incomplete and fragmented: - composition of proposed spending by subvented agencies is not presented; - neither PCUs nor subvented agencies typically use the FMIS for payments and accounts; AGD prepares reports based on the FMIS only, excluding these entities from those reports. - MoFEA is considering requiring PCUs to use the FMIS from the beginning of 2020. - Comprehensiveness by financing source is limited: most donor funding is included (budget support and multilateral projects) but bilateral grants and loans (e.g., Chinese funding for the Gambia International Conference Centre) are not shown and the total size is unknown. - The PFA 2014 does not require disclosure of private financing of PPPs in the budget; GLF portions are understood by MoFEA to be subject to budget rules. SOE-funded public economic infrastructure projects are not included in budget documentation. - Recurrent and development budgets are prepared and presented together, but the program classification is inconsistently applied in the development budget; the FMIS upgrade to Epicor 10 will separate program classification from organizational classification. - Two serious challenges to budget unity: - parallel processes for GLF-funded and donor-funded projects pervade planning, allocation and implementation cycles (no systematic way to estimate GLF-funded recurrent costs of completed donor-funded projects before approval); - inability to consistently identify capital projects in the development budget regardless of financing source. - Inclusion of PCUs and subvented agencies in the FMIS (even end-of-year) and legal provisions on coverage of PPPs and SOEs in the budget process/documents are recommended to align NDP and budget coverage. ### Budgeting for investment (Institutional design – Low; Effectiveness – Medium) - Outlays are appropriated annually; major contract commitments are not recorded in practice despite FMIS (Epicor 9) having commitment-recording features and the 2018-20 BCC advising MDAs to record them. - The PFA 2014 requires prior consent of the Minister of Finance and Economic Affairs for any bill representing a long-term Consolidated Fund commitment, but this is not consistently applied. - The AMP contains information on total cost and future expenditure requirements for donor-funded projects but is outside the budget documentation and not publicly accessible. - Virement rules exist and allow transfers between development and recurrent budgets with Minister approval; PFA 2014 does not prohibit such movements (paragraph 29 (8) specifically prohibits only virements out of personal emoluments). - The BCC 2018-20 discourages virements from the development budget to other charges (see paragraphs 18, 31 and 41 referenced). - No formal policy prioritizes funding already-started projects before new approvals, though priority is often given to GLF counterpart funding obligations under donor agreements. - Donor project funding is largely protected by contractual provisions in project agreements rather than by budget institutions. ### Maintenance funding (Institutional design – Low; Effectiveness – Low) - MDAs invest too little in maintenance due to budget constraints, limited planning, and weak manager incentives; systematic information on maintenance needs is not typically available. - Capital and routine maintenance costs are budgeted incrementally and squeezed by other protected expenditures. - Government maintenance allocations and actual expenditures for Government Buildings and Quarters 2014–16 (Dalasis): - Year: 2014 2015 2016 - Budget: 32 768 592 29 538 140 27 519 400 - Actual: 56 959 514 29 929 197 19 898 865 - Under-/Over-Spent: (24 190 922) (391 057) 7 620 535 - % Under-/(Over-spent): (73.8) (1.3) 27.7 - Source: Consultant’s report prepared to support development of the National Public Buildings and Facilities Policy (2018). - Over the period 2014–2016 budget allocations for maintenance declined from D 32.8 million (equivalent to US$ 0.6 million) in 2014 to D 27.5 million in 2016; actual expenditure declined from D 57.0 million in 2014 to D 19.9 million in 2016. *Source: Excerpt from 1gmbea2019002 (IMF country report content provided in the source PDF).* ### 57. Most MDAs and other public bodies have not established rigorous standards and ### 1gmbea2019002 - 57. Most MDAs and other public bodies have not established rigorous standards and ### Asset maintenance: practices and gaps - Most MDAs and other public bodies have not established rigorous standards and procedures for the maintenance of their assets. - Notable exceptions and initiatives: - Inter-ministerial Committee on Office and Residential Accommodation (CORA) provides office space for MDAs and estimates maintenance requirements. - National Roads Authority (NRA) developed a standard methodology and ring-fenced funding to address routine and capital maintenance of the national road network. - A Road Fund, financed primarily by a levy on petroleum and managed by the NRA, was established in 2015. - Ministry of Basic and Secondary Education (MoBSE) has systems for estimating rehabilitation and maintenance costs but lacks physical capacity and financial resources to implement programs. - Some SOEs, notably NAWEC, apply rigorous methods to estimate maintenance needs of generators and other plant and equipment. - Draft National Buildings and Facilities Policy 2018–2027 (championed by MoTWI) aims to define standard methodologies for estimating capital and maintenance costs for public buildings and facilities. - Budget classification and definitions: - Maintenance expenditure can be identified in the budget; current classification identifies proposed spending on both routine and capital maintenance. - Only the definition of capital maintenance is consistent with the IMF’s Government Finance Statistics Manual 2014. - No definitions of maintenance are issued by either the MoFEA’s Budget Directorate or by the AGD; proposed spending for routine and capital maintenance may not be precise. - Recommendation: Link improved definitions and general guidance on budgeting for maintenance to development of the new program classification segment scheduled with the FMIS upgrade to Epicor 10 to allow reliable recording and aggregation of maintenance budgets and expenditures. ### Project selection: current framework, institutions, and weaknesses - Role of the NDP and MoFEA: - NDP has been key policy instrument driving selection of investment projects since 2018; articulates priority areas but does not specify individual investment projects across all sectors. - Projects in the NDP consider economic and social impact and achievability, but the Plan does not apply a formal set of criteria to prioritize projects with highest economic and social return. - MoFEA’s Planning Directorate sees its role as ensuring the plan is followed; MDAs’ proposals are scrutinized and rejected if not aligned with the NDP, but criteria for assessing ‘alignment’ are not clearly defined and may be subjective. - Committees and bodies: - Gambia Strategic Review Board (GSRB): - Created by the 2015 Aid Policy; chaired by the Permanent Secretary of MoFEA. - Mandate: appraise and endorse all aid-funded programs and projects, subject to alignment to national and sectoral development strategies and priority action plans. - Policy requires GSRB to receive concept notes with expected outputs, outcomes and impacts; a monitoring and evaluation plan; and an analytical note/report prepared by the DAC in MoFEA (GSRB Secretariat). - First meeting held in April 2019. - PPP Committee: - PPP Operational Guidelines 2016 require a PPP Committee to approve projects with a contract value of US$1-3 million and to advise the Cabinet on larger PPPs. - Chaired by the Minister of Finance and Economic Affairs and includes Justice and Trade Ministers and heads of relevant agencies. - Ministerial Investment Implementation Taskforce (MIIT): - Intended to provide scrutiny to ensure selection of new projects is in the country’s best interest and does not undermine debt sustainability. - Composition, terms of reference and operations still in the design stage. - Fragmentation and coverage gaps: - Decisions to proceed with public investment projects are fragmented across structures. - Major investment projects funded through SOE own resources are not required to be approved centrally; in practice many SOE projects are donor funded and included in the budget through line ministries. - GLF funded projects that are not PPPs account for only 10–15 percent of total public investment and are captured by the budget process but not other infrastructure review processes such as the proposed GSRB. - AMP (managed by MoFEA’s DAC) can capture both projects under implementation and planned projects; PPP projects are not included in the system. - MoFEA’s DPPP-PE has not yet created the anticipated database of PPP projects. - Both Directorates cite lack of information from MDAs on projects that do not follow central processes as a constraint on completeness of records. - Capacity and design considerations for effective project selection: - Critical to improve selection processes for infrastructure efficiency and effectiveness; greater capacity needed to support decision making. - Key issues to consider when designing a practical and effective framework: - Comprehensiveness—are all major projects subject to scrutiny regardless of funding source? - Authority—do government organizations and senior managers have adequate authority and enforcement mechanisms? - Alignment to the budget process—as more projects become GLF-funded, alignment with the budget process becomes increasingly important. - Capacity to support decision makers—including ability to review appraisals from technical, financial, economic and risk perspectives; strongest practices involve independent advice and external experts. - Reforms and support: - Reforms underway (MIIT and GSRB implementation) can be bolstered with additional measures; Annex 3 provides further tools including possible project selection criteria and a project selection scorecard. - New proposed PPP and SOE laws should align with strengthened project selection practices. ### Implementing MIIT and GSRB (Box 3.6 summary) - Opportunity: Use MIIT and GSRB to strengthen public infrastructure project selection and implementation by reviewing all major infrastructure projects to improve coordination and robustness. - Key steps recommended: - Expand draft terms of reference for the GSRB to cover all major infrastructure projects regardless of funding source. - Sharpen focus on developing and applying project selection criteria. - Ensure robust economic, financial and technical appraisal has been undertaken. - Use GSRB (MDA-level) to advise MIIT (ministerial-level) before final decisions on major projects. - Expand capacity of MoFEA to support GSRB and MIIT, requiring leadership from the DAC and incorporation of expertise from across MoFEA (including DPPP-PE, Budget Directorate, Planning Directorate and Macroeconomic Policy Directorate). - Longer-term option: Consider establishing a Public Investment Management Unit, acknowledging that in a small country like The Gambia this may not be highly beneficial immediately but could be a longer-term reform. ### Procurement: system design, compliance, and transparency - Institutional framework: - Procurement system is decentralized and covers the entire public sector. - Gambia Public Procurement Authority (GPPA) created under GPPA Act of 2001 and updated under GPPA Act 2014. - GPPA serves as a standard setting, quality control, and monitoring body and does not itself perform procurements. - GPPA and GPPA Act cover central government, local government, and SOEs. - Currently, 203 procuring organizations embedded in spending agencies have authority to conduct procurements. - GPPA 2014 stipulates that if GPPA Act and related procedures conflict with donor procurement requirements, donor procurement rules shall have precedence. - Most PCUs follow donor-specific procurement, monitoring, and reporting procedures. - Tendering practice and transparency: - Law requires major projects to be tendered competitively but is not always followed in practice. - Open tender is stated as the preferred method, but only 13 and 10 percent of tenders over D 1 million (approximately US$ 20,000) presented to the GPPA for approval in 2015 and 2016, respectively, were open. - No proposed tenders were denied by GPPA in 2015 and 2016. - Public access to procurement information is limited; stages of tendering or award information are not published. - GPPA publishes an annual report with aggregate statistics; last annual report published covered years 2015 and 2016 combined. - GPPA website is not used to support procurement process or publish monitoring reports. - Monitoring, compliance, and systems: - Procurement data collection methods: - Annual procurement plans should be submitted by January 15 of each fiscal year. - Procuring organizations must obtain GPPA pre- and post-approval for tenders expected to cost D 1 million or more. - Monthly reports must be submitted to GPPA covering procurements valued less than D 1 million. - GPPA conducts 80–90 compliance audits of procuring organizations each year. - Data collection is incomplete due to lack of adherence to GPPA procedures; GPPA does not impose penalties for lack of compliance. - Data stored in excel spreadsheets and summarized on an ad hoc basis; a procurement module is planned in the proposed Epicor upgrade. - Most PCUs follow donor-specific monitoring procedures. - Compliance statistics (Table 3.4): - Submit annual procurement plan: 50-60 percent - Submit monthly reports (complete 12 monthly reports): 30 percent - Considered in compliance with rules36: 47 percent - Source: GPPA staff and GPPA annual report 2015/2016. - Complaints Review Board: - Authorized in GPPA Act 2014 and created in 2016 as a quasi-judicial entity. - Independence preserved by having a court judge as chairman and by requesting external organizations to nominate some members. - GPPA and MoFEA have representatives on the Board; MoFEA pays Board expenses directly. - Complaint process: unsuccessful bidder may challenge first to procuring organization, second to Complaints Review Board, third to a higher court; no fees charged for bringing complaints to the Board. - Board decisions are not published. *Source: IMF staff summary of content unit 1gmbea2019002.* ### 69. While progress has been made in strengthening procurement procedures in recent ### 1gmbea2019002 - 69. While progress has been made in strengthening procurement procedures in recent ### Procurement framework and disclosure - Progress: Procurement legal framework updated based on international good practices; Complaints Review Board is independent. - Shortcomings: - Limited public disclosure over a wide range of procurement practices. - Compliance of procuring organizations with legal requirements is poor; breaches are not subject to any sanctions. - Mitigating factor: Most public investment is procured using donor procedures. - Policy note: Public procurement reform included in the 2016–20 Public Financial Management Strategy, but procurement is not mentioned in the 2018 and 2019 Action Plan and Monitoring Reports. ### Availability of funding (Institutional design – Medium; Effectiveness – Medium) - Cash forecasting and management: - For GLF, cash flow forecasts are updated monthly; commitment ceilings are set for only one month in advance. - Cash forecasting and cash management system does not apply to donor funding; donors disburse according to project agreements. - Since 2017, changes aim to reduce ad hoc allocations: MDAs prepare monthly GLF cash plans submitted to MoFEA for review. - Cash Management Committee (formed in 2018) reviews monthly cash proposals and frequently reduces requested amounts. - After its meeting, the Liquidity Forecasting Committee adopts a weekly borrowing plan for the next month. - System provides only one month of visibility on spending and commitment limits; commitments for construction contracts are not recorded. - IMF FAD has provided capacity development assistance on cash forecasting and cash management. - Cash-rationing effects: - GLF outlays restricted by authorization to spend only cash allocations; minimizes arrears risk when tied to effective expenditure control but reduces MDA operational planning ability. - Priority given to GLF contributions to donor-funded projects, but local contributions sometimes not provided timely. - Domestic arrears historically significant; arose largely from failure of MDAs to pay utility bills and processing payment orders prior to receiving goods and services. - A treasury single account (TSA) is in early installation stages; government adopted IMF recommended roadmap in the TSA Action plan; implementation of the TSA is a benchmark under an SMP associated with the IMF-Rapid Credit Facility. - Banking of project funds: - Most project-related external funding flows through central bank accounts not part of the main government bank account structure. - There are 46 project accounts in the Central Bank of Gambia (CBG), two “basket” accounts in the government account structure in the CBG, and eight project accounts in commercial banks. - PCUs manage deposit and withdrawal oversight for opened project accounts; regulatory obligation to provide quarterly reports to AGD typically occurs only annually. - Overall funding availability: - Funding availability is good overall because most project spending is donor-funded; donor disbursements reliable upon milestone completion evidence. - GLF funding is less predictable and frequently crowded out by current expenditure, notably wages and goods and services. - Cash rationing with one-month allocations reduces operational efficiency. - Current SMP includes structural benchmarks related to improvements in cash forecasting and cash management systems. ### Portfolio management and oversight (Institutional design – Low; Effectiveness – Medium) - Monitoring of capital projects: - Monitoring of major capital projects is limited; no centralized agency to oversee public investment portfolio. - For externally-financed projects, DAC within MoFEA monitors physical progress of selected projects quarterly through field visits; selection based on random criteria and sometimes “problem projects.” - DAC quarterly progress reports do not monitor implementation against project milestones or annual/total project costs. - Financial information for donor-financed projects is centrally available to DAC via the AMP (though AMP has limitations). - Monitoring and Reporting Unit of the Budget Directorate (recently established) is mandated to monitor GLF and counterpart-funded projects and produce quarterly reports in coordination with PCUs or Project Monitoring Units. - Reallocation of funds: - Some scope to reallocate funds across projects: GLF funds can be transferred within or between ministries; externally-financed project funds can be reallocated only between projects funded by a single donor. - Virements (GLF) and donor no objection (externally financed) are key reallocation instruments. - Absence of detailed written procedures for GLF virements results in practices where funds may be reallocated without transferring budget agency knowledge, reducing transparency. - Donor practices on re-allocations are systematic and transparent. - Ex-post reviews and audits: - No government requirement to conduct ex-post reviews of projects. - Project Managers' Forum (semi-annual) discusses lessons learnt for externally-financed projects, but feedback is not systematically collected to inform domestically-financed project management. - Most donors conduct rigorous ex-post reviews; example: World Bank Implementation Completion Report. - Reform steps underway: - MoFEA working to institutionalize quarterly monitoring tools for GLF-funded and externally-financed projects; sample templates and guidelines prepared at different roll-out stages. - DAC plans web-based tablet deployment from June 2019; Monitoring and Reporting Unit plans to initiate excel-based monitoring the same year. - Capacity constraints in human resources and IT systems in MoFEA and other MDAs are a top-priority challenge. ### Management of project implementation (Institutional design – Low; Effectiveness – Medium) - Project implementation arrangements: - Centralized PCUs within MDAs are responsible for individual capital project management; many donor-funded projects require PCUs. - MDAs sometimes outsource project implementation to GAMWORKS under delegated management contracting (example: Ministry of Health and Social Works). - MoBSE acknowledged as highest performing MDA in project execution; uses centralized PCU with project manager and specialist support teams (procurement, finance, engineering); MoBSE model being followed by other MDAs. - Rules and data on project adjustments: - No consolidated, consistent rules and procedures for managing project adjustments across MDAs, except donor-funded projects following donor rules. - Frequent time and cost overruns reported, but no hard data available through AMP or other monitoring systems. - For domestically-funded projects, no systematic recording of reasons for variations (price adjustments, scope changes, time extensions). - No formal process for re-examining economic and social rationale of a project amid significant cost or demand changes. - Ex post audits: - Ex post audits of major capital projects not conducted by National Audit Office or Internal Audit Directorate of MoFEA. - Aid Policy 2015 requires annual audit of all completed projects by the Auditor General, using AMP monitoring and evaluation reports; National Audit Office currently focused on clearing backlog in annual financial audits and lacks capacity to systematically audit capital projects. - Some large donor-funded projects have ex post external audits; such reports are the exception rather than the rule. ### Monitoring of public assets (Institutional design – Low; Effectiveness – Low) - Legal and regulatory framework: - Section 65 of PFA 2014 requires MoFEA to issue statutory instruments for improvement, maintenance, disposal, control of immovable public assets, and writing off losses. - Financial Regulations 2016 require departments to “compile and maintain an asset register of the department as determined by the Accountant General.” - AGD has not issued further guidance nor shown knowledge of asset registers prepared by individual MDAs. - MDA practices: - Practices in collecting non-financial asset information are variable: - MoBSE developed its own asset management policy and undertakes periodic asset verification. - Banjul City Council maintains an asset register. - MoTWI developing a roads database with University of Birmingham to record stock and valuation. - Financial reporting of assets: - Nonfinancial assets are not recorded in government’s annual financial statements; Financial Regulations 2016 do not require recording non-financial assets in public accounts. - Consumption of fixed assets is estimated in government financial statements but is not a robust measure of depreciation due to limited stock/value/condition information; estimates likely capture disposals or write-offs rather than proper depreciation. - SOE asset reporting: - SOEs include fixed assets and depreciation estimates in financial statements, but data quality generally poor. - Ernst and Young 2019 special audit of seven SOEs indicates asset values often overstated, incorrectly depreciated or impaired, or improperly recorded. - Planned reforms: - Rollout of Epicor 10 FMIS from 2020 will include a module requiring assets to be registered and valued; MDAs will need further guidance on accounting policies for valuation and condition reporting. - MoTWI developing a National Public Buildings and Facilities Policy to require better recording of assets and their condition. - Implementation of these policies and guidelines likely to be a long-term reform; near-term better information should reduce asset wastage and improve maintenance spending estimates. ### IT systems and capacity building (cross-cutting issues) - General: - IT systems supporting public investment present in MoFEA but not integrated. - Five systems operational or in development: Epicor 9 FMIS, AMP, Aid Monitoring and Evaluation Tool, CS-DRMS, and SOE Portal. - Systems do not share information, requiring duplicate data entry and risking inconsistent/inaccurate reports. - System characteristics: - Epicor 9: - Adopted Epicor 7 FMIS in 2007; upgraded to Epicor 9 in 2014; to be replaced by Epicor 10 effective January 2020. - Managed by AGD; six modules including basic accounting, treasury management, and budget; includes procurement module used primarily for payment stages, not used by GPPA to manage tendering data. - Reforms tied to Epicor 10 include revising CoA (e.g., creating a program segment) and extending FMIS coverage to include self-accounting projects (e.g., PCUs). - System currently does not identify individual capital projects. - AMP: - Introduced 2015; web-based system for planning and monitoring donor-funded development projects. - Records total project cost, disbursements to date, start date, end date; does not record planned yearly costs or physical project progress. - Does not maintain a history of project revisions and does not identify individual capital projects. - Aid Monitoring and Evaluation Tool: - Web-based, being developed to expand AMP monitoring by linking to the NDP and identifying progress against project milestones. - Expected to become operational in June 2019; preliminary indications that data will not be shared between AMP and the tool. - CS-DRMS: - Loan and Debt Management Directorate used version 1.3; upgraded to version 2.3 in April 2019 as step toward migrating to Meridian version planned for June 2019. - Used to track disbursements under donor agreements; data between AMP and CS-DRMS reconciled manually. - SOE Portal: - Publicly accessible via DPPP-PE web-page; lists all SOEs and information such as overview, board members, recent financial statements. - Information collected by DPPP-PE staff and uploaded by MoFEA IT Unit staff. - SOE-funded economic infrastructure projects not systematically identified through the Portal. *Source: https://www.imf.org/-/media/files/publications/cr/2019/1gmbea2019002.pdf* ### 89. IT is expensive and must be carefully planned and managed to derive the greatest ### IT is expensive and must be carefully planned and managed to derive the greatest ### IT governance, strategy, and capacity - Finding: IT offers potential benefits but is expensive and poses management challenges; technical aspects matter but understanding user needs and costs is equally important. - Finding: In many countries a Chief Information Officer (CIO) at Director or Director General level provides leadership and authority over all IT issues and is guided by an IT strategy that prioritizes needs and costs. - Finding: The MoFEA currently has neither the equivalent of a CIO nor an IT strategy. - Noted intent: The Permanent Secretary of MoFEA informed the mission of his intention to create a CIO position and to upgrade the Ministry’s IT strategy. - Recommendation 5: Expand the capabilities of the MoFEA to plan and manage IT systems. (Permanent Secretary, MoFEA, and IT Unit) - Appoint a Director of IT Systems in the MoFEA with authority to coordinate all IT systems in the MoFEA and approve the purchase of new applications, system administration, networks, data communications, and equipment, and the hiring of consultants (January 2020) - Develop a 3-year IT strategic plan covering the users and needs of existing applications, new applications, and the integration of networks and applications (December 2020) ### HR capacity and civil service reform - Context: Staff capacity issues are being addressed by the Civil Service Reform Strategy (2018–27). - Governance: The strategy was developed by a Strategy Development Team composed of senior career officials, supported by the government’s Personnel Management Office, which is organizationally under the President’s Office; the Personnel Management Office will lead implementation. - Historical note: The current strategy benefited from lessons learned in two previous efforts at civil service reform: in 2008–11 and 2012–15. - The Strategy recognizes six major challenges facing the civil service: - Proliferation of public sector entities with overlap of roles and functions; - Collapse of legacy standard personnel administration systems and practices; - Gaps in discipline and ethical conduct by civil servants; - Low and poorly administered remuneration and incentives for civil servants; - Growth in staff numbers and the wage bill have outpaced fiscal capacity; and - Ad hoc and inadequate capacity building. - Caution: Implementation of ongoing PIM-related reforms (MTFF/MTBF, PBB, public procurement, cash forecasting and management, and PPPs) appear to be straining capacity; additional reforms requiring new organizational units or many officials/consultants should be approached with caution. ### Reform priorities and recommendations for infrastructure, investment management, and accounting - Issue: Structures for infrastructure project selection and appraisal are not comprehensive and robust; separate processes exist for donor-funded, GLF, PPPs and major SOE infrastructure projects. - Recommendation 1: Operationalize the MIIT and the GSRB, and clarify their role and responsibilities. (MoFEA and the Office of the President) - Prepare TORs for the two committees (September 2019) - Issue a government decree establishing the two committees and defining their role and responsibilities (December 2019) - Prepare criteria for project selection to be approved by the GSRB (June 2020) - Prepare guidelines on project appraisal and circulate to MDAs (December 2020) - Issue: Good information on investment projects is needed to support planning, budgeting, and monitoring of the investment program. - Recommendation 2: Expand the coverage and functionality of the Aid Management Platform (AMP) to include projects from whatever financing source (grants, loans and GLF), and monitor projects at all stages of the project cycle from inception to completion. (DAC and Budget Directorate) - Prepare an action plan for developing the expanded AMP and rolling it out (December 2019) - Obtain technical support from development partners, as required (March 2020) - Complete the roll out of the revised AMP (June 2020) - Issue: The chart of accounts (COA) does not systematically identify routine and capital maintenance, or the capital projects that comprise expected capital spending. - Recommendation 3: Improve the classification and reporting of maintenance and capital spending through a revised chart of accounts in the new program budgeting framework. (Budget Directorate and AGD) - Complete work on updating the COA and issue guidelines to MDAs on its use (December 2019) - Fully implement the revised COA in the 2021 budget (June 2020) - Issue: Records of public infrastructure assets are not kept, despite a requirement in law. - Recommendation 4: Prepare and publish a comprehensive register of the government’s physical assets. (AGD in consultation with the MOTWI) - Issue guidelines to MDAs on preparing and maintaining a register of the stock and value of their physical assets and calculating depreciation (June 2020) - Identify one or two pilot MDAs to develop the register and complete the pilots (December 2020) - Extend the register to all MDAs and publish the data (June 2022) ### SOE law (Draft State-Owned Enterprise Law, 2018) — key observations and concerns - Context: In April 2016 Cabinet approved a partial SOE reform program; the performance of the seven largest enterprises is being assessed by an external consultant (Ernst and Young) and a draft SOE Act (2018) is under review. - Draft Act main provisions (as summarized): - Establish an oversight body, the State-Owned Enterprise Regulatory Commission; - Establish arrangements for efficient governance of SOEs and monitoring their performances; - Make provision for restructuring of SOEs; - Provide for appointment of boards of SOEs and define their powers, duties and functions; and - Make provision for connected matters. - SOE objectives (Article 24): The formulation of objectives is not entirely consistent; potential conflicts noted between objectives such as “net worth maximization” and “to provide quality public service to all citizens.” - Remuneration of public service obligations: The draft text does not clarify whether government compensation covers full costs plus a margin or includes incentives for efficiency/quality. - Composition and tenure of the SOE Commission (Articles 5 and 7): - Article 5: Vague description of human resources; Commission comprises four members (plus the Chair) and can co-opt experts but no permanent staff is mentioned despite broad technical tasks. - Recommendation: If resources are insufficient, decentralize part of the mandate to other ministries (especially MoFEA) and reduce remit to oversight of corporate governance. - Article 7: Establishes five-year tenure periods for Chair and four main commissioners, renewable for another five; observes international trend toward longer non-renewable tenures. - Functions of the SOE Commission (Article 11): - Concern: Insufficient allocation of responsibilities between the Commission, parent ministries, and MoFEA; Commission likely under-resourced to deliver all stated functions. - Article 11 assigns establishment of corporate governance principles but does not specify enforcement capacity. - Determination of performance criteria and monitoring lacks clarity on interaction with line ministries and MoFEA and coordination mechanisms. - Several functions (analyzing the suitability of the annual budget; assessing financial policies and practices; confirming judicious use of funds; receiving reports and making recommendations to Cabinet) could be better placed in MoFEA. - Suggestion: Enhance role of the DPPP-PE in MoFEA to cover financial oversight of SOEs, including approval of SOE budgets and financial plans, setting and monitoring performance targets, establishing dividend policies, controlling public service obligations and quasi-fiscal activities, and preparing a consolidated annual report on SOE performance. - Article 11 lacks criteria guiding Commission decisions and omits references to risk assessment, government debt, or fiscal objectives. - Request of state support (Article 40): - Observation: Section 2 treats capital transfers and loans differently though in practice government loans have been used as capital transfers; interest and repayment prospects should be considered when classifying support. - Recommendation: Loans to SOEs that do not represent adequate return should be reflected in fiscal statements above the line and appropriated in the budget. - Recommendation: Consider risk-hedging mechanisms (collateral and/or guarantee fees) to compensate government for risk and discourage moral hazard. - Unclear whether the Commission’s opinion on support requests will be binding. - Business plan (Article 43): - The SOE board must incorporate Commission recommendations into the final business plan, but criteria the Commission should use and consultation mechanisms with Cabinet/MoFEA are not specified. - Key assessment criteria recommended: impact of subventions on government budget, company capacity to borrow, systemic importance, financial risks, and spill-over potential. - Accounting records, financial statements and internal control (Articles 46 and 48): - Article 46: Accounting records must follow Accountant General requirements but no commitment to incorporate IFRS (or simplified IFRS) or a deadline. - Article 48: Financial statements do not explicitly require cash flow statement and changes in equity. - Finding: Ernst and Young report highlights failures of internal control and procurement in many SOEs; the Bill lacks provisions to require internal control functions meeting international good practice and audit committees. ### Improving project selection — criteria, application, and tools - Major public infrastructure project selection criteria fall into four categories: - Strategic alignment — The project must be aligned with the published government development strategy. - Economic benefit — The project must have a net economic benefit as assessed by a project appraisal. - Affordability — The project must be able to be funded without placing the government’s fiscal position under stress, including direct implementation costs and ongoing operational and maintenance costs. - Project readiness — The project must be ready for an investment decision with an implementation plan and a risk mitigation strategy. - Application rule: For a project to receive final approval, it should demonstrate strategic alignment, economic benefit, be affordable and be ready for investment decision. - Use in prioritization: Criteria assist in ranking competing proposals; calculation of net economic benefit (benefit-cost ratio) and alignment with national/sectoral development strategy are particularly useful. - Formalization: Formalizing and publishing project selection criteria would guide MDAs, MoFEA, GSRB, and MIIT. - Decision-support tools: - Project scorecards can implement and reinforce selection criteria; MoFEA could prepare a template circulated to MDAs. - Key document areas for decision makers include: - Project title - Objectives and strategic alignment - Expected impact (economic, social) - Project components - Project cost - Funding sources (internal and external) - Budget impact (capital and recurrent), including ongoing costs, by year; and impact on debt - Risks (financial, contingent liabilities, others) - Example scorecard principles and criteria are provided (Strategic alignment; Economic appraisal; Affordability; Project readiness) with detailed sub-criteria such as alignment with the National Development Plan, cost-benefit analysis, full budget impact analysis, contingent liabilities, risk management, project implementation, feasibility studies, and project timeline. *Source: IMF staff content from the provided PDF chapter/section.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2019/1gmbea2019002.pdf_