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African Development Bank Group
Equatorial Guinea
COMBINED 2008-2012 COUNTRY STRATEGY PAPER COMPLETION
REPORT AND 2011 COUNTRY PORTFOLIO PERFORMANCE REVIEW
CENTRAL REGIONAL DEPARTMENT (ORCE)
MARCH 2012
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TABLE OF CONTENTS
ACRONYMS AND ABBREVIATIONS ......................................................................... 3
I. INTRODUCTION ......................................................................................................... 4
II. COUNTRY CONTEXT AND DEVELOPMENT STRATEGIES AND
POLICIES ......................................................................................................................... 4 2.1 COUNTRY CONTEXT ................................................................................................... 4
2.2 POLITICAL CONTEXT .................................................................................................. 4
2.2 ECONOMIC TRENDS .................................................................................................... 5
2.3 SOCIAL TRENDS ......................................................................................................... 6
2.4 CHALLENGES AND WEAKNESSES ................................................................................ 6
2.5 STRENGTHS AND OPPORTUNITIES .............................................................................. 7
2.6 COUNTRY DEVELOPMENT STRATEGY ........................................................................ 7
III. EVALUATION OF BANK ASSISTANCE.............................................................. 8 3.1 BANK STRATEGY ....................................................................................................... 8
3.2 IMPLEMENTATION OF BANK STRATEGY: PORTFOLIO REVIEW .................................... 9
3.3 AID HARMONISATION AND COORDINATION .............................................................. 12
3.4 DIALOGUE WITH GOVERNMENT ............................................................................... 12
IV. OVERALL ASSESSMENT ..................................................................................... 13 4.1 THE BANK PERFORMANCE ....................................................................................... 13
4.2 GOVERNMENT PERFORMANCE ................................................................................. 13
V. LESSONS LEARNT .................................................................................................. 14 5.1 LESSONS LEARNT FROM THE RBCSP 2008-2012: .................................................... 14
5.2 LESSONS LEARNT FROM PORTFOLIO REVIEW: ......................................................... 14
VI. CONCLUSIONS AND RECOMMENDATIONS ................................................. 15
ANNEX I: SELECTED ECONOMIC AND FINANCIAL INDICATORS .............. 15
ANNEX II: PROGRESS TOWARD ACHIEVING THE MILLENNIUM
DEVELOPMENT GOALS ............................................................................................ 17
ANNEX III: GOVERNMENT PROGRESS TOWARDS ACHIEVING PNDES
OBJECTIVES ................................................................................................................. 18
ANNEX IV: RBCSP 2008-2012 OUTCOME AND OUTPUT MATRIX .................. 19
ANNEX V: PORTFOLIO PERFORMANCE ASSESSMENT .................................. 21
ANNEX VI: PORTFOLIO IMPROVEMENT PLAN ................................................ 22
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ACRONYMS AND ABBREVIATIONS
ADB African Development Bank
BEAC Bank of Central African States
CEMAC Economic and Monetary Community of Central Africa
CSP Country Strategy Paper
ECCAS Economic Community of Central African States
EITI Extractive Industries Transparency Initiative
GDP Gross Domestic Product
HDI Human Development Index
HIV Human Immunodeficiency Virus
IMF International Monetary Fund
MDG Millennium Development Goals
MSBES Ministry of Health and Social Welfare
NA National Assembly
OECD Organization for Economic Cooperation and Development
DPEG Democratic Party of Equatorial Guinea
PNDES National Economic and Social Development Plan
PIU Policy Implementation Unit
REC Regional Economic Community
REG Republic of Equatorial Guinea
SME Small and Medium-size Enterprises
SMI Small and Medium-size Industries
UNDP United Nations Development Programme
UNICEF United Nations International Children’s Emergency Fund
UNO United Nations Organization
WTO World Trade Organization
CURRENCY EQUIVALENTS
(As of March 2012)
Currency Unit:
1UA = 759.2702 CFA
1UA = 1.1575 EU
1UA = 1.5560 US Dollars
GOVERNMENT FINANCIAL YEAR
1 January – 31 December
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I. INTRODUCTION
The Results-Based Country Strategy Paper 2008-2012 (RBCSP) for Equatorial
Guinea, was approved in October 2008 to support the Government’s National
Economic and Social Development Plan (PNDES) 2008-2020. The PNDES aims to
diversify the economy and transform Equatorial Guinea (REG) into an emerging
economy by 2020. To support the PNDES, the RBCSP 2008-2012 is structured in two
pillars: Pillar I - Capacity Building, consisting of four public sector projects; and, Pillar II
- Creating Conditions for Economic Diversification, consisting of three public sector
projects. A total of 230 million UA of ADB loans were earmarked for the RBCSP 2008-
2012, of which less than 50% has been approved with a value of 66 million UA, and
1.5% disbursed.
The Combined RBCSP 2008-2012 completion report and portfolio review aims to
identify the factors that have contributed towards the Bank’s poor performance in
order to provide recommendations for improving assistance in the future. This
report builds on the mid-term review approved in December 2010, which concluded that
implementation of Bank operations had been slow due to the limited presence of the
Bank in the field and the Government’s poor understanding of the Bank’s procedures.
The synthesis of the RBCSP 2008-2012 Completion Report and the Portfolio Review
into one document is intended to rationalize the reporting and review processes, given the
commonality of objectives related to delivery and results. The evaluation consists of: a
brief description of the country context in terms of economic and social developments; an
assessment of the RBCSP 2008-2012 design; the Portfolio Review; a cursory look at the
activities carried out by international agencies in REG; an overall assessment of the
performance of both the Bank and the Government; and, recommendations for improving
the Bank’s assistance in the future.
II. COUNTRY CONTEXT AND DEVELOPMENT STRATEGIES AND
POLICIES
2.1 Country Context
Equatorial Guinea is a relatively small country yet the third largest oil producer in
Sub-Saharan Africa. Spanning an area of 20,078 km2, REG has a relatively small and
young population roughly 1.3 million of which 60% are under the age of 25. The oil
boom coupled with declining agricultural productivity has encouraged urban migration
where 42% of the population are based, which is expected to rise to 58% by 2015.
2.2 Political Context
President Obiang Nguema has led the Government of REG since 1979. His position
as head of the Government was reconfirmed with 95% of votes during the November
2009 Presidential elections. In November 2011 a Constitutional Reform was approved by
referendum with a large majority (98% of voters), which creates a new position of vice
president and establishes the legal framework for instituting a National Court of Audit.
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The next legislative election is scheduled for May 2013 and the next presidential election
in November 2016.
Despite progress towards democratization since the introduction of the multi-party
system in the early 1990s, freedom of expression and civil liberties remains
restricted and political governance weak. The democracy index 2011 prepared by the
EIU (Economist Intelligence Unit) rated RGE 165th
out of 167 countries suggesting that
the political system is not fully inclusive. Access to information is limited in RGE; the
media is tightly controlled – the most recent Media Watch Dog Ranking (2009), ranks
REG 156th
out of 173 countries in terms of press freedom– and internet penetration is
low.
In recent years REG has made progress in consolidating regional integration.
Equatorial Guinea is a member of the Economic and Monetary Union of Central Africa
(CEMAC). The Bank of Central African States (BEAC) governs monetary policy, and in
2010 the CEMAC Parliament was installed in Malabo. In 2011 President Nguema
presided over the African Union, improving Equatorial Guinea’s influence in furthering
regional integration.
2.2 Economic Trends
Equatorial Guinea’s economy continues to be driven by oil. In 2011 Oil and gas
production accounted for roughly 88% of GDP, almost 100% of exports and 90% of
fiscal revenue. There have been important developments in the manufacturing of oil and
gas derivatives: REG is an exporter of methanol, petrol liquid gas, butane, propane and
liquefied natural gas. Yet these industries are intrinsically tied to the hydrocarbon
industry, and unlikely to remain once oil production is exhausted.
Table 1 - Macroeconomic Indicators
2008 2009 2010 2011(e) 2012(p)
Real GDP growth 10.7 5.7 -0.8 7.1 4.0
CPI inflation 4.3 7.2 7.5 7.2 7.1
Budget balance % GDP 15.4 -7.9 -4.8 -2.3 -3.0
Current account % GDP 9.1 -17.1 -23.8 -17.9 -16.4
Source: Data from ADB Statistics; estimates (e) and prediction (p) based on authors' calculations.
The non-oil sector has been increasingly driven by large public investment in
infrastructure, with limited signs of economic diversification. Between 2008 and 2011
the economy saw a boom in the construction sector, which in 2010 contributed 5% of
GDP. Agriculture and fisheries, sectors in decline since independence, have contracted
further to 1.9% of GDP, providing a mere 20%-30% of national food consumption. There
has been strengthened activity in telecommunications and timber, however the economy
remains dependent on oil with limited sources of domestic growth.
After a period of sustained growth, averaging 22% between 1999 and 2008, the
economy was hard hit by the 2009 economic crisis, highlighting its vulnerability to
oil price fluctuations. In 2010, real GDP contracted by -0.8%, while large public
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investment widened the overall fiscal deficit to -7.2% of GDP and increased inflation to
7.5%. High imports coupled with repatriated oil profits caused the current account to
plunge into deficit reaching -27.9% of GDP in 2010. In 2011, growth recovered to 7%
spurred by drilling of two new wells, as well as continued investment in public
infrastructure.
2.3 Social Trends
Despite a relatively small population and high real GDP per-capita, improving
human development remains a significant challenge. According to the most recent
official data available, 77% of the population live in poverty, 57% have no access to
drinking water and 16% of children under-five suffer from chronic malnutrition.
Furthermore, REG’s Human Development Index has worsened falling from 115 out of
176 countries in 2008 to 136 out of 187 countries in 2011.
By 2015, only one out of the eight MDGs might be achieved. According to the most
recent MDG report (2009), RGE is close to achieving universal education by 2015
(education levels have shown significant improvements in the net primary school
enrolment rates have reached 76%). Despite this progress, completion rates remain low
(50% in 2006), and education quality remains poor. Poverty rates remains high and
chronic malnutrition affects 16% of children under the age of 5. The mortality rate of
children under the age of 5 stands at 157.9 per 1000, and the maternal mortality rate of
280 per 100,000 live births is above the regional average. Endemic diseases such as HIV
Aids and tuberculosis are pervasive (3.4% and 135 per 100,000 respectively).
2.4 Challenges and weaknesses
Reduce high levels of poverty and inequality: Nearly three of four people live on less
than two dollars per day and the contrast between high per capita income and rising
inequality pose a serious threat to social stability.
Strengthen governance: The Mo Ibrahim 2011 governance index ranks Equatorial
Guinea 45th
of 53 African countries, (with an overall score slightly lower than in 2010),
reflecting an overall lack of progress in governance. The public sector is often ineffective
both in terms of designing and implementing public policies as fulfilling its redistribution
responsibilities.
Improve transparency: The International Transparency Index ranks REG as one of the
most corrupt countries in the world with a score of 1.9 out of 10 in 2011 (0 being most
corrupt). Despite a willingness to join the Extractive Industries Transparency Initiative
(EITI), attempts have been unsuccessful again demonstrating the need to improve
transparency.
Develop human capital: the low level of education is a significant constraint not only to
private sector development but also to public service delivery. In addition endemic
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diseases such as HIV/Aids with a prevalence of 3.5%, tuberculosis affecting 135 per 100
000 people and malaria continue to represent a concern.
Reduce oil dependence: Oil and gas production accounts for 88% of GDP. There have
been important developments in the processing of oil and gas derivatives; yet industry’s
viability is uncertain once petroleum reserves are exhausted (expected by 2035).
Strengthen the business environment: The Doing Business Report ranks REG 156 out
of 183 countries; an improvement from previous years, however investing in REG
remains a burdensome process. Starting a business takes on average 137 days at a cost of
101% of per capita income; labour costs are relatively high compared to neighbouring
countries; the tax system is neither transparent nor applied in a uniform fashion; customs
levies are high.
Create employment for the fast-growing urban youth population: Around 60% of the
population is under 25 years old, urban employment opportunities in the non-oil economy
are necessary to absorb a growing labour force estimated between 244,000 and 491,000
during 2010–20.
2.5 Strengths and Opportunities
Abundant natural resources: Besides oil and gas, there are potential undiscovered
opportunities in solar and biofuels energy. The fisheries sector has considerable potential,
with marine territory accounting for nine-tenths of total surface area. The country’s
wealth of fertile land well used could guarantee food security for the entire population.
Modern infrastructure: Impressive improvements have been registered in the country’s
road and electricity network The Island of Bioko is served by a gas fuelled electricity
plant and the mainland by a hydroelectric plant with a capacity of 120 MW. Major ports
have been upgraded, two new airports have been built, and the modernization of Bata
airport complete. The telecommunications sector, although relatively uncompetitive is
growing and likely to offer better services with the entrance of a third Chinese company.
Regional integration: Development corridors offer potential to exploit the country's
comparative advantages in energy, transport and tourism.
2.6 Country Development Strategy
The National Plan for Economic and Social Development (PNDES) 2008-2020,
focuses on four strategic objectives: (i) Build world class infrastructure; (ii) Strengthen
human capital and improve the quality of life of every citizen (iii) Build a diversified
economy based on the private sector, and (iv) Establish good governance at the service of
the citizen. Its implementation is structured in two phases: (i) Phase I from 2008-2012,
focuses on accelerating investments in infrastructure primarily: economic infrastructure,
social infrastructure, and administrative infrastructure, and; (ii) Phase II from 2012-2020,
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concentrates on creating an environment conducive to diversification and private sector
development.
There is limited quantitative information regarding the implementation of the
PNDES and its impact assessment is constrained by a lack of reliable socio-economic
data. In 2008, the Government established several agencies (including Agencia 2020) to
implement and monitor PNDES and approved a Public Investment Plan (PIP), however
no formal evaluation regarding implementation of public investment projects has been
published. Reliable information on budget execution is unavailable and similarly sector
indicators are rare. The lack of household surveys precludes poverty impact analysis of
public expenditure.
In line with PNDES (Phase I), Government efforts have concentrated on the
development of transport and energy infrastructure, as well as projects with high
political visibility. Improvements have been witnessed to the country’s road and
electricity network, which connect all provinces and major cities, and major ports and
airports have been upgraded (see Annex III). In particular large investments have been
made to host international events and improve REG’s image, including the African Union
Summit in 2011 and the Africa cup 2012. Despite high levels of public spending,
investment has been largely driven by political considerations with limited planning and
no long-term development impact assessment. Furthermore decision-making regarding
project selection is overly centralised.
Pro-poor spending has not been a Government priority. Large social infrastructure
projects have been completed but have not yet benefitted the poor. The budget structure
does not favour social investment, with recurrent education and health expenditures in
2008 accounting for only 11% of total current expenditure (0.2% of GDP) and 6.4% of
total current expenditure (0.1% of GDP), respectively. Advancing the PNDES agenda
and developing the non-oil sector requires a shift of public resources toward social
sectors.
III. EVALUATION OF BANK ASSISTANCE
3.1 Bank Strategy
The RBCSP 2008-2012 was fully aligned with PNDES objectives (see Annex X) but
could have been less ambitious and more selective, with a greater focus on areas
where the Bank’s intervention would benefit from Government buy-in. The RBCSP
2008-2012 has not provided any outputs to date, due to difficulties encountered setting up
Policy Implementation Units (PIUs) for the three ADB loans and TAC MIC funds
approved. Details are discussed in the portfolio review, however it is expected that by the
end of 2012 the first set of outputs will be delivered. The following weaknesses in the
design of the RBCSP’s 2008-2012 have contributed to the lack of Government interest in
Bank assistance:
Lack of selectivity: Out of a total of 13 public operations proposed within the
strategy, 5 were never developed into proposals, 5 were not accepted by the
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Government, and only 3 succeeded in attaining loan agreements. The operations on
the private sector window (Luba port expansion, support to SMEs and public private
partnerships) were neither fully identified nor followed up.
Financial assistance was not required from the Bank: The Government did not
require Bank assistance to fund investment in public infrastructure. Furthermore, the
Bank’s procedures to finance urgent feasibility studies were considered cumbersome
and slow – the Road and Transport and Water and Sanitation projects identified in the
RBCSP 2008-2012, were directly funded by the Government, as was the Assistance
to supervise and monitor the National Development Plan project (PNDES).
Bank’s assistance failed to achieve visible results quickly: During the course of
implementation of the Banks projects (in particular the Middle and Senior
Management Staff Training programme, and Health System Development Support
project), the Government emphasised the need to prioritise and accelerate the
construction of infrastructure components (health clinics and vocation schools) in
order to achieve Political approval, and maintain interest in the Bank’s assistance.
Lack of political commitment to strengthen public institutions, promote
transparency and produce socio-economic data: the Agriculture project intended
to strengthen the Ministry of Agriculture and Ministry of Fisheries was not
considered a priority and an ADB loan request was never formally made;
implementation of the Public Finance Management Support project (PAGFP) has
been hindered by the complexity of the reform agenda. Team leaders have preferred
to focus on the visible elements (IT systems) rather than institutional reform,
suggesting a lack of political will; the National Statistics System Capacity Building
project was never requested by the Government.
Risks were not well defined by the RBCSP 2008-2012 identifies 3 risks (sharp drop in
oil prices, political instability and lack of investor’s interest in the development of value-
added sectors was identified) and failed to take into account:
Government’s insufficient knowledge and commitment to follow Bank
procedures: The Government has repeatedly encountered difficulties following the
Bank’s procedures, requesting that these be simplified to accelerate the
implementation of projects.
Lack of transparency: Difficulties in adhering to bank rules and procedures, have in
part been due to REG’s discretionary culture.
3.2 Implementation of Bank Strategy: Portfolio Review
The Bank's portfolio consists of three ADB loans and two TAC/MIC grants, with a
total net commitment of 66 million UA. In addition REG is one of the central African
countries that received support from the Congo Basin Forest Funds (10 million UA for 5
operations), which aims to mitigate deforestation in the Congo Basin.
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The Portfolio Performance of the Bank’s operations is unsatisfactory, scoring 1.83
on a scale of 3. In general, the portfolio performance has been characterized by: (a)
unsatisfactory compliance with conditions due to weak capacity; (b) unsatisfactory
adherence to procurement rules and procedures; (c) satisfactory financial management,
and (d) delays in delivering outputs due to incomplete PIUs. The average age of the
portfolio projects is 2.9 years, only 1.5% of total funds approved have been disbursed,
and one project is considered problematic. The previous portfolio review took place in
2003 and therefore a comparison is not possible.
Table 2: Evaluation of Portfolio Performance – Key Indicators
Year of
review
Compliance
with
conditions
Procurement
Performance
Performance
of financial
management
Activities and
achievements
Development
impact
General
Evaluation
2012 1,75 1,83 2,01 1,50 2,06 1,83
Rating Scale: highly unsatisfactory 0-1, unsatisfactory 1-2, satisfactory 2-3, highly satisfactory 3
Compliance with conditions for all projects has been hindered by weak capacity
(Score: 1.75). There were significant delays between project approval, project
effectiveness and first disbursements, which took on average 22.2 months, due to a lack
on knowledge of Bank procedures. In 2010 the Bank recruited a consultant to assist the
government, which proved essential to collecting the necessary documents precedent to
the fulfillment of the general loan and first disbursement conditions. Project reporting has
been similarly slow: no audit reports have been submitted and only two projects have
Table 2: Portfolio Characteristics
Project Source of
Financing
Date of
approval
Date of loan
effectiveness
Net
engagement
(million
UA)
Disbursed
(Million
UA)
Disbursed
(%)
Average
age
Social
Middle and Senior
Management Staff
Training programme
ADF loan 11/12/2008 23/09/2010 36.92 0.19 0.5% 2.9
Health System
Development Support
project
ADF loan 29/10/2008 02/04/2010 14.21 0.39 2.7% 3.4
Population and Health survey
AFD Grant
07/08/2009 07/08/2009 0.33 0.33 100.0% 2.3
Multi-sector
Public Finance
Management Support project (PAGFP)
ADF loan 25/11/2008 10/08/2010 13.85 0.08 0.5% 3.1
Assistance to supervise
and monitor National Development Plan
(PNDES)
AFD Grant
10/04/2009 10/04/2009 0.39 0.00 0.0% 2.8
Total 65.70 0.99 1.5% 2.9
Source: ORCE Department
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submitted quarterly reports. Several factors have contributed to the Government’s poor
performance; weak institutional capacity, a lack of knowledge concerning Bank rules and
procedures, and incomplete PIUs.
The timeliness and quality of procurement requests and adherence to Bank rules
and procedures has been unsatisfactory (Score: 1.83). Procurement activities have not
been carried out according to implementation plans, tender documents have failed to
meet standards, and procurement rules and guidelines have not been met (including one
project that purchased equipment without the non-objection of the Bank). The
Government has also expressed its concern regarding the time taken by the Bank to
respond to requests, which has in some cases has exceeded the recommended period of
14 workings days. In general the procurement performance has been affected by
insufficient expertise within PIU’s, due to delays in recruiting national and international
experts (Health System Development Support project is the only project to have hired a
procurement expert).
Financial management performance is considered satisfactory overall (Score: 2.01).
The Government was initially slow in making counter funds available, which was
resolved following a high-level mission in 2010. Reporting has been poor: delays in
submitting progress reports, and failure to provide audit reports is common to all projects.
The Government has justified the lack of reporting due to the slow progress of project
implementation.
Activities and outputs have been limited (Score: 1.50). Delays in setting up PIU’s has
meant that projects have not delivered outputs and implementation plans have not been
met. Furthermore readjusted implementation plans have not been presented to the Bank.
Disbursements and outputs will increase by the end of this year as PIUs become fully
functional and activities are implemented (See Annex V: Portfolio Improvement Plan).
The project development impacts have not yet been delivered but will contribute to
National development (Score: 2.06): The Middle and Senior Management staff training
programme, through the creation of vocational training, as well as training for provincial
polytechnic institutes and the National University will contribute to the Government’s
priority to improve the skills of the national labour force; the Health System
Development Support project will strengthen the national health service through the
establishment of a health information system, the construction of integrated health and
blood transfusion centres and training for management and specialized staff; and the
Public Finance Management Support project (14 million UA) and MIC/TAC Grant for
Assistance to supervise and monitor National Development Plan will improve the
efficiency of economic and financial services and national policy monitoring.
Projects that require close attention
The Portfolio contains one problematic project, the Middle and Senior Management Staff
Training Programme, which has encountered problems launching procurement activities.
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Overall, Portfolio Management has been affected by:
Weak institutional capacity, and a lack of knowledge of Bank rules and procedures.
The Government is generally unaccustomed to managing bilateral assistance and
unfamiliar with international standards of best practice.
Incomplete Policy Implementation Units (PIUs). There have been delays in recruiting
the necessary expertise to staff PIU’s. In 2010 all projects were blocked as the
Government froze the recruitment of International experts, and recruiting national staff
has been difficult due to the lack of human capital in REG.
Lack of Bank presence in REG. The presence of the Bank’s consultant in 2010 and
2012 has provided significant impetus in advancing the Bank’s operations in REG. Given
the weak capacity of the Government, a stronger presence from the Bank is important to
provide constant monitoring of project implementation and support for strengthening
PIUs.
Delays in attaining non-objection from the Bank. The Government has also expressed
its concern regarding the time taken by the Bank to respond to requests, which in some
cases has exceeded the recommended period of 14 workings days.
3.3 Aid harmonisation and coordination
There is no formal mechanism for aid harmonisation and coordination in REG.
Given REG’s fiscal surplus development partners tend to be involved in capacity building
activities in an ad-hoc manner. In particular there are Donors working in the following
areas: (i) health (USAid, Cuba, UNDP including the Global Fund to support the
acquisition of medications, Spain, France and China); (ii) education (Spain, which
recently completed the construction of training college and China which supports
vocational training); (iii) agriculture (China and FAO); (iv) Public Finance Management
(France, AFRITAC and the World Bank, which is providing technical assistance for
developing macro-forecasting and the national accounts system); statistics (UNFPA, ILO
and FAO have prepared a proposal to carry out a combined household, employment and
agriculture survey). In addition, the World Bank is providing support to the Government
to strengthen its application for EITI status.
3.4 Dialogue with Government
Dialogue with authorities has contributed significantly to removing bottlenecks and
accelerating project implementation. Several high-level missions were necessary to
alert the Government of the need to release counter funds, to reach an agreement
regarding the institutional arrangements of PIUs, and to encourage continued efforts to
improve portfolio management and adherence to Bank rules and procedures.
Strengthened Dialogue should have focused more on alerting the Government to the
need to focus on strengthening public institutions, promoting transparency and
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improving socio-economic data. The Government is aware that more needs to be done
to promote transparency and improve the quality of the public administration to achieve
the goals laid out in the PNDES 2008-2020. Moreover, the Government participated in
the design of the RBCSP 2008-2012 and repeatedly expressed it’s interest in receiving
technical assistance from the Bank. The lack of political interest that was eventually
shown towards the operations proposed by the Bank suggests that political dialogue was
not successful in presenting the benefits of its support to the Government.
In terms of wider reforms, the dialogue with authorities has focused on:
The need for efficient social policy by permanently sensitizing the national authorities
on the urgent need to make progress in this sector, mainly through an increase in the
budget allocation to the social sectors, with a view to improving the welfare of the
citizens and ensuring sustainable development;
The need to improve the business climate, through greater transparency and better
governance and increased investment in human capital.
Encourage the Governments actions to join the Extractive Industries Transparency
Initiative (EITI).
IV. OVERALL ASSESSMENT
4.1 The Bank Performance
The RBCSP 2008-2012 was fully aligned with PNDES 2008-2020 objectives but
could have been less ambitious and more selective, with a greater focus on areas
where the Bank’s intervention would benefit from Government buy-in. The low
proportion of projects that achieved loan agreement status is evidence of the over-
ambitious approach of the strategy, and its failure to focus on priority areas where the
Government required financial and advisory assistance. Furthermore, strengthened
Political dialogue could have contributed toward raising the Government’s interest in the
operations offered by the Bank.
The Bank should have provided more support during project start-ups and
increased its presence to ensure smooth project implementation. The Government’s
weak capacity and lack of knowledge of Bank rules and procedures was not fully taken
into account when designing operations. Project implementation benefitted from
supervision missions and the presence of Bank consultants, however delays could have
been reduced with a stronger presence of the Bank. Furthermore the time taken by the
Bank to review requests caused additional delays, which could have been avoided.
4.2 Government Performance
The Government has shown its commitment to achieving the goals laid out in
PNDES 2008-2020, however limited political commitment to promoting
transparency, and building capacity constitute key weaknesses. Both the RBCSP and
Mid-term review noted a determination from the Government to promote a transparent
management of its resources and raise the country’s administration to international
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standards essential for pursuing reforms. However the lack of political interest in Bank
operations that aimed to strengthen public institutions, promote transparency and produce
socio-economic data, suggest the Government is not ready to implement reform.
Portfolio management by the Government was considered poor. In particular it
suffered from: a lack of participation in project design; insufficient experience and
reluctance to follow Bank rules and procedures; late mobilization of counter funds; and
poor monitoring of projects at the national level. Strengthened dialogue and support from
the Bank should be pursued to assist the Government to improve portfolio management.
V. LESSONS LEARNT
5.1 Lessons learnt from the RBCSP 2008-2012:
Ensure selectivity on the selection of intervention areas and simplicity in the
design of the operations. Out of a total of 13 public loans proposed within the
RBCSP 2008-2012, only 3 succeeded in attaining loan agreements, and no private
sector operations were negotiated, highlighting the difficult environment for
providing development assistance and doing business in REG.
Intervene only in areas where the Bank has comparative advantage. In particular,
avoid prioritizing infrastructure projects, where the Government does not require
additional Bank funding and is well enabled to carry its large public investment
agenda.
Ensure that proposed operations are designed in a way that they achieve visible
results quickly without compromising the long-term sustainability of
interventions. Quick wins such as tangible outputs are essential for obtaining
Government confidence and support during project implementation.
Ensure that an adequate assessment is made of the Government’s effective
commitment to the proposed reform agenda. In particular, for operations aimed at
promoting transparency, enhancing public administration and strengthening the
production socio-economic data.
Ensure risks are adequately identified. The RBCSP 2008-2012 did not identify the
following key risks: (i) Implementation risk: the Government’s insufficient capacity
and/or reluctance to adhere to Bank’s rules and procedures, particularly during the
initial stages of project implementation: (ii) Lack of transparency and accountability
risk (iii) Commitment risk and (iv) Reputational risk.
5.2 Lessons Learnt from Portfolio Review:
The need to take into account the weak capacity and lack of knowledge of Bank
rules and procedures. Closer monitoring and assistance, particularly in project start-
up phase is essential for ensuring Bank conditions are met and project implementation
plans are effectively and efficiently carried out.
Increase Bank presence in REG. A stronger Bank presence is necessary to support
the Government in terms of identifying bottlenecks, and providing assistance to
strengthen capacity.
Strengthen Political Dialogue. Increased High-level missions are necessary to alert
the Government of the need to focus on strengthening public institutions, promoting
transparency and producing socio-economic data.
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VI. CONCLUSIONS AND RECOMMENDATIONS
6.1 Conclusions
The RBCSP 2008-2012 should have been less ambitious and more selective. The
operations proposed in RBCSP 2008-2012 were overly ambitious and not effectively
followed up by the Bank. The RBCSP 2008-2012 aimed to be innovative allowing for
projects to be jointly funded by the Government and the Bank. However this was not
sufficient in gaining political interest. A more pro-active approach is required to carry out
operations in REG. In this regard the RBCPS 2008-2012 and the Bank did not succeed in
attracting the attention and interest of the Government.
The implementation of projects and portfolio management was hindered by the
Government’s weak capacity. The Bank did not sufficiently take into account the
Government’s weak capacity and lack of understanding of Bank rules and procedures.
Project implementation, has been a steep learning curve for both the Bank and the
Government. However on-going projects have made progress, and will soon start to
provide visible outputs, important for gaining the Government’s trust.
6.2 Recommendations
The evaluation provides the following recommendations to strengthen future
assistance:
The Bank should concentrate on completing the on going projects. Despite delays in
setting-up, all three on-going projects enjoy significant political interest, and are
operational. The Bank should capitalize on the relationship and political interest already
gained, and continue strengthening the relationship through these projects.
Increase sustained Political Dialogue. The Bank should engage in strengthened
dialogue to gain the Government’s trust and raise awareness of the importance of
introducing reforms particularly in terms of transparency, strengthening public
institutions and socio-economic data. The Government is aware that assistance is required
however, trust and constant dialogue is necessary to achieve political commitment.
Explore Private Sector opportunities. The Bank should concentrate on providing
support to the private sector. The Government has invested significantly in developing
public infrastructure, laying the foundation for productive activity.
ANNEX I: Selected Economic and Financial Indicators
16
Indicators Unit 2000 2006 2007 2008 2009 2010 2011 (e)
National Accounts
GNI at Current Prices Million US $ 661 4,290 6,217 9,499 11,037 10,082 …
GNI per Capita US$ 1,270 6,856 9,654 14,342 16,204 14,394 …
GDP at Current Prices Million US $ 1,177.7 8,521.8 10,840.8 14,943.8 10,127.4 11,020.1 13,719.5
GDP at 2000 Constant prices Million US $ 1,177.7 3,982.0 4,835.4 5,352.2 5,657.2 5,602.2 5,959.3
Real GDP Growth Rate % 8.2 1.3 21.4 10.7 5.7 -1.0 6.4
Real per Capita GDP Growth Rate % 4.8 -1.6 18.1 7.7 2.8 -3.7 3.5
Gross Domestic Investment % GDP 61.9 27.0 30.7 32.1 69.5 58.3 54.8
Public Investment % GDP 5.4 17.0 19.6 20.8 51.9 41.9 38.5
Private Investment % GDP 56.5 10.0 11.1 11.3 17.6 16.4 16.3
Gross National Savings % GDP 45.2 40.2 39.6 34.9 31.0 24.2 25.7
Prices and Money
Inflation (CPI) % 4.6 4.4 2.8 4.3 7.2 7.3 6.7
Exchange Rate (Annual Average) local currency/US$ 712.0 522.9 479.3 447.8 472.2 495.3 440.8
Monetary Growth (M2) % 36.2 14.1 41.3 30.1 18.8 46.5 …
Money and Quasi Money as % of GDP % 5.7 7.1 8.7 8.7 14.5 18.7 …
Government Finance
Total Revenue and Grants % GDP 20.7 45.9 44.4 45.6 49.5 47.7 43.7
Total Expenditure and Net Lending % GDP 12.1 19.5 22.2 26.7 59.1 49.6 46.4
Overall Deficit (-) / Surplus (+) % GDP 8.6 26.4 22.3 19.0 -9.6 -2.0 -2.7
External Sector
Exports Volume Growth (Goods) % -23.2 -3.2 11.6 3.8 -8.4 -6.9 3.5
Imports Volume Growth (Goods) % -9.6 -28.9 3.5 68.7 75.8 -21.0 -12.8
Terms of Trade Growth % 71.5 -44.7 -15.6 77.7 -17.8 -1.4 -9.4
Current Account Balance Million US $ -196.4 774.5 119.9 1,554.1 -1,829.4 -2,320.6 -1,377.4
Current Account Balance % GDP -16.7 9.1 1.1 10.4 -18.1 -21.1 -10.0
External Reserves months of imports 0.2 7.7 7.7 5.9 … … …
Debt and Financial Flows
Debt Service % exports 0.8 1.2 0.4 0.1 0.2 0.3 0.3
External Debt % GDP 36.3 1.8 1.3 0.8 6.1 6.6 8.0
Net Total Financial Flows Million US $ 21.9 1,131.2 -207.2 -983.9 428.4 … …
Net Official Development Assistance Million US $ 21.3 26.2 31.4 32.1 31.6 … …
Net Foreign Direct Investment Million US $ 154.5 469.5 1,242.7 -793.9 1,636.2 695.0 …
Source : ADB Statistics Department; IMF: World Economic Outlook, September 2011 and International Financial Statistics, September 2011;
ADB Statistics Department: Development Data Portal Database, October 2011. United Nations: OECD, Reporting System Division.
Notes: … Data Not Available ( e ) Estimations Last Update: October 2011
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
%
Real GDP Growth Rate, 2000-2011
0
2
4
6
8
10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Inflation (CPI),
2000-2011
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Current Account Balance as % of GDP,
2000-2011
17
ANNEX II: Progress Toward Achieving the Millennium Development Goals
Goal 1: Eradicate extreme poverty and hunger 19901 20002 20113
Employment to population ratio, 15+, total (% ) 61.4 63.3 62.6
Malnutrition prevalence, weight for age (% of children under 5) … 10.6 …
Poverty headcount ratio at $1,25 a day (PPP) (% of population) … … …
Prevalence of undernourishment (% of population) … … …
Goal 2: Achieve universal primary education
Literacy rate, youth female (% of females ages 15-24) … 96.6 98.2
Literacy rate, adult total (% of people ages 15 and above) … 88.3 93.3
Primary completion rate, total (% of relevant age group) 50.8 35.6 49.6
Total enrollment, primary (% net) 81.4 70.5 56.3
Goal 3: Promote gender equality and empower women
Proportion of seats held by women in national parliaments (% ) 13.0 5.0 10.0
Ratio of female to male primary enrollment 93.9 97.4 97.2
Ratio of female to male secondary enrollment 44.1 57.6 …
Goal 4: Reduce child mortality
Immunization, measles (% of children ages 12-23 months) 88.0 51.0 51.0
Mortality rate, infant (per 1,000 live births) 122.3 104.0 93.7
Mortality rate, under-5 (per 1,000) 213.3 176.7 157.9
Goal 5: Improve maternal health
Births attended by skilled health staff (% of total) 5.0 64.6 …
Contraceptive prevalence (% of women ages 15-49) … … …
Maternal mortality ratio (modeled estimate, per 100,000 live births) 1000.0 480.0 280.0
Goal 6: Combat HIV/AIDS, malaria, and other diseases
Incidence of tuberculosis (per 100,000 people) 80.0 105.0 135.0
Prevalence of HIV, female (% ages 15-24) … … 2.5
Prevalence of HIV, male (% ages 15-24) … … 0.8
Prevalence of HIV, total (% of population ages 15-49) … 3.2 3.4
Goal 7: Ensure environmental sustainability
CO2 emissions (kg per PPP $ of GDP) 0.6 1.1 0.8
Improved sanitation facilities (% of population with access) 51.0 53.0 …
Improved water source (% of population with access) 43.0 43.0 …
Goal 8: Develop a global partnership for development
Net total ODA/OA per capita (current US$) 161.1 49.4 46.3
Internet users (per 1000 people) … 8.5 59.4
Mobile cellular subscriptions (per 1000 people) … 105.0 570.1
Telephone lines (per 1000 people) 3.5 17.8 19.3
Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports,
Note : n,a, : Not Applicable ; … : Data Not Available,
October , 2011
1 Latest year available in the period 1990-1995;
2 Latest year available in the period 2000-2004;
3 Latest year available in the period 2005-2011
0.00
50.00
100.00
150.00
1990 2000 2011
Incidence of tuberculosis (per 100,000 people)
Equatorial Guin ea
0
20
40
60
80
1990 2000 2011
Employment to population ratio, 15+, total (%)
Equatorial Guin ea
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1990 2000 2011
Primary completion rate, total
Equatorial Guinea
92.0
94.0
96.0
98.0
1990 2000 2011
Ratio of female to male primary enrollment
Equator ial Guinea
0.0
50.0
100.0
150.0
1990 2000 2011
Mortality rate, infant (per 1000 live births)
Equatorial Guinea
0.0
500.0
1000.0
1500.0
1990 2000 2011
Maternal mortality ratio (modeled estimate, per 100,000 live births)
Equatorial Guinea
0.0
200.0
400.0
600.0
1990 2000 2011
Mobile cellular subscriptions (per 1000 people)
Equatorial Guinea
0
10
20
30
40
50
1990 2000 2011
Improved water source(%)
Equatorial Guin ea
18
ANNEX III: Government Progress towards achieving PNDES Objectives
PNDES 2008-2020
Pillar Area Achievements
1. Build
world class
infrastructure
Energy
Progress in implementing National Electricity Plan
Network has been widened in areas of high use
Government subsidized programs have improved distribution to some
disadvantaged areas
ICTs Fiber optic connection complete between Malabo and Bata
Transport
Principal regional roads have been completed
5km road to airport is complete
Anabon airport construction is complete
Bata airport has been upgraded
Malabo airport construction is complete
Modernization of the Ports in Malabo and Bata are almost complete
Public-Private
Partnerships No actions recorded
2. Strengthen
human
capital and
improve the
quality of
life of every
citizen
Education 2 New Vocational Colleges built and renovated in Malabo and Bata
Gender No actions recorded
Health
Program to improve health clinic facilities is complete
Construction of provincial hospital completed
Construction of 2 modern hospitals complete (clinic in Bata, and Hospital
La Paz in Malabo)
Water and
Sanitation
The first phase of the improving water access in urban areas program has
been completed
The second phase which included access to remote areas has been delayed
Environment No actions recorded
Housing More than 20,000 houses built in Malabo
Social
Protection No actions recorded
Media and
Culture No actions recorded
Source: ORCE
19
ANNEX IV: RBCSP 2008-2012 Outcome and Output Matrix
Country
development goals
(NESDP)
Sector constraints
on achievement of
goals (= sector
issues)
FINAL
OUTCOMES (at
end of CSP in 2017)
FINAL IMPACTS
(expected at end of CSP in
2017)
MID-TERM
OUTCOMES OF CSP
(expected at mid-term
in 2015)
MID-TERM IMPACTS
(expected from CSP by
2015)
ADB Operations (new
and ongoing)
PILLAR I : CAPACITY BUILDING
1.1 Strengthening of human capital
(i) Adapt
technical,
professional and
Univercity
training to the
needs of the
market (19rganiz
4, p.39)
(i) The low
quality of
training offered
by the existing
structures; and
(ii) inadequate
qualified human
resources hamper
long-term
development
prospects.
(i) 25% of the
objectives of the
NESDP achieved
under ADB support
; (ii) About 30
000 people have
received
qualification
training of which
at least 1/3 women
(i) The availability of
skilled labour is
improved (the number of
skilled job applicants
has increased by 35 % of
which 1/3 women);
(i) the number of
qualified teachers
increases by 35% in
the sub-sector of
technical and
vocational training;
(i) The quality of
infrastructure and
the teaching staff is
improved;
Ongoing: Middle and
Senior Management
Staff Training Program
(ii) The national
foreign labour
requirement is reduced
by 40%.
(ii) Five (5)
regional polytechnic
institutes (RPI) are
almost completed;
(ii) The relevance of
the training schemes
is increased.
The training schemes
are developed
according to the
building block
approach by
competency (APC).
(i) Improve the
health of the
population
(maternal health
and control of
communicable
diseases)
(i) Health
problems limit
the contribution
of the
populations to
the national
development
process due to
difficulties of
access to health
structures.
Reduce by 50 %:
(i) morbidity due
to communicable
diseases; and (ii)
maternal and
infant mortality
(i) Improvement of the
public health conditions
of the population (of
which the majority are
women)
Approximately 40 %
of the project
objectives are
achieved
The maternal and
infant morbidity and
mortality rates are
reduced by 25 %
Ongoing: Health
System Development
Project
1.2. Strengthening of multi-sector capacities
20
Country
development goals
(NESDP)
Sector constraints
on achievement of
goals (= sector
issues)
FINAL
OUTCOMES (at
end of CSP in 2017)
FINAL IMPACTS
(expected at end of CSP in
2017)
MID-TERM
OUTCOMES OF CSP
(expected at mid-term
in 2015)
MID-TERM IMPACTS
(expected from CSP by
2015)
ADB Operations (new
and ongoing)
(i) Foster healthy
and better shared
economic growth,
through efficient
management
transparent and
public finance
(i) Inadequate
inclusion of
sectoral
priorities in
the budget;
(i) The rates of
allocation and
implementation of
the budget of the
social sectors
rise respectively
from 6% and 44%
(2006) to 15% and
80%.
The incidence of poverty
estimated at 76.8% in
2006 is reduced
I) The rates of
allocation and
implementation of
the budget of the
social sectors reach
10% of the budget
The incidence of
poverty estimated at
76.8% is reduced
Ongoing: Support to
Public Finance
Management (PFMS)
(e.g. Budget
Support)
(i) Set up an
efficient national
statistics system
(i) The weak
capacities of
the statistics
apparatus skews
all the
forecasts and
estimates of
financial and
natural
resources and
bogs down the
development
planning process
(i) An efficient
national
statistics system
is put in place
with gender-
disaggregated
information
((I) Planning,
programming, monitoring
and evaluation of
development actions are
carried out on the basis
of reliable, gender-
disaggregated and
updated data
(i) The development
of the national
statistics
development strategy
(SNDS) is completed.
The implementation
of the SNDS,
especially the
training of officers
of the various
structures involved
in statistics
production is
started
(i) Better
programming of the
economic and social
development process
Ongoing: Project of
enhancement of the
capacities of the
national statistics
system
21
ANNEX V: Portfolio Performance Assessment
Compliance
with
Conditions
Procurement
Performance
Financial
Performance
Activities
and Works
Development
Objectives
Average
score
Social Sector 1.79
Health System Development Support project 2.00 2.00 3.00 2.50 3.00 2.50
Population and Health Survey 2.00 N/A 2.00 1.00 2.00 1.75
Middle and Senior Management Staff
training programme 2.00 1.00 0.80 0.50 1.25 1.11
Multi-Sector 1.95
Public Finance Management Support project
(PAGFP) 1.00 2.50 2.25 2.00 2.00 1.95
Assistance to supervise and monitor
National Development Plan (PNDES) N/A N/A N/A N/A N/A
Overall Performance 1.75 1.83 2.01 1.50 2.06 1.83
Score Rating: Highly satisfactory performance: 3
Satisfactory performance: 2-3
Unsatisfactory performance: 1-2
Highly unsatisfactory performance: 0-1
Source: ORCE
22
ANNEX VI: Portfolio Improvement Plan
Problems Actions to be carried out Expected results and Indicators Responsible Timeframe
Quality of Entrance
1. Lack of project ownership from
Government
1.1 Involvement of Government Officials
throughout project preparation and decision
making
1.1 Government officials who participate
during project preparation are involved
throughout project implementation
GOV Next project
formulation
1.2 Empower Government during project
preparation
1.2 The Government is fully responsible
for project preparation
1.3 Provide resources necessary to meet
conditions for project implementation and
prior to first disbursement
1.3 Financial resources are budgeted for
project preparation
2. Achieving conditions precedent to
first disbursement
2.1 Ensure that certain conditions are met
prior to project approval
2.1 First disbursements made no later than
six months after project implementation ADB
Next project
formulation
2.2 Adapt conditions to institutional
capacity of borrower
2.3 Support borrower to meet the
conditions precedent to first disbursement
3. Absence of statistical data 3. Encourage analytical work through PRI
grants
3. Award PRI grants to finance economic
and sector studies ADB/GOV 30/06/2013
Supervision Quality
4. Bank’s ability to respond in a
timely manner
4.1 Accelerate accreditation of Project
Managers
4. Time taken to process requests reduced
to 15 days ADB 30/03/2012
4.2 Decentralize Project Manager
responsibilities to experts in field offices
4.3 Review the matrix of delegated
authority
23
Problems Actions to be carried out Expected results and Indicators Responsible Timeframe
5. Project Launching
5. Organize a technical mission made up of
procurement and financial management
experts to launch projects once all project
staff have been hired
5. Project launching training provided for
all projects under implementation ADB 31/12/2012
Procurement
6. Knowledge of procurement
procedures and contract management
6.1 Provide training on the Bank’s
procurement procedures
6.1 Annual training on Bank procurement
procedures ADB 31/12/2012
6.2 systematize the recruitment of
procurement experts in project
implementation units
6.2 Each project implementation unit has a
procurement expert ADB/GOV
As soon as
possible
7. Lack of acquisitions planning 7. Systematize the preparation and
updating of procurement plans
7. Procurement plan are prepared by all
projects GOV 30/06/2012
8. Bank response time 8. Use the procedures in journals a
posteriori
8. Ex-post review procedures used by PIUs
with procurement experts ADB/GOV
Next project
formulation/
project mid-
term review
Monitoring and Evaluation
9. Lack of a centralized project
monitoring mechanism
9. Establish a national system for project
monitoring
9. A monitoring project at the national
level is in place and projects are monitored
on a quarterly basis
GOV 31/12/2012
10. Steering committee operations
10. Ensure the regular functioning of
steering committees that must approve
work programs and annual budgets
10. The steering committees meet at least
twice a year GOV 31/12/12/
11. Results based management 11. Organize training seminars on results-
based management
11. Training on results-based management
23organized for Ministries and staff
responsible for project monitoring
ADB 31/12/2012
Financial Management
24
Problems Actions to be carried out Expected results and Indicators Responsible Timeframe
12. Budgeting and release of
counterpart funds
12.1 Harmonize funding with work
programs and annual budgets
12.1 The amount of counter funds
budgeted is consistent with the work
programs and annual budget
ADB./GOV
12.2 Release counter funds at the beginning
of the fiscal year
12.2 Budgeted counter-funds are released
at the beginning of the fiscal year
13. Financial management and
accounting manual for projects
13. Develop a manual of standard
procedures for project implementation
13. A manual of standard procedures for
the administrative, financial and
accounting management of projects is
developed for all projects
GOV 31/06/2013
14. Processing of working capital
requests
14. Decentralize processing of working
capital requests to the Bank’s regional
office in Gabon
14. The Bank’s regional Office in Gabon is
authorized to process applications for the
renewal of working capital in the SAP
system
ADB 30/06/2012
15. Financial Management System
15. Ensure the establishment project
financial management and accounting
systems before first disbursements are
made
15. Project preparation funds are used to
implement the entire financial management
and accounting system GOV/ADB Next project
16. Project audits
16.1 Ensure recruitment of auditors from
start of projects
16.1 Auditors recruited in the first year of
project implementation GOV/ADB Next project
16.2 Ensure that all current projects
complete recruitment of auditors
16.2 All projects have completed
recruitment of auditors GOV/ADB 31/12/2012
Source: ORCE