COTE D’IVOIRE – PUBLIC EXPENDITURE MANAGEMENT AND ...

COTE D’IVOIRE –

PUBLIC EXPENDITURE MANAGEMENT AND

FINANCIAL ACCOUNTABILITY REVIEW (PEMFAR)*

*Questions concerning this document may be directed to the following:

Mr Gabriel NEGATU Director OSGE 2077

Mr Janvier K. LITSE Director ORWA 2047

Mme Marlène KANGA Manager OSGE.2 2257

Mr Carlos SANTISO Manager OSGE.1 2186

Mr Serge M. N’GUESSAN Chief Procurment Expert OSGE.1 3146

Mr Samba BA Principal Macro-economist OSGE.2 3210

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(In Three Volumes) Volume I: Main Report

November 2008

PREM 4

Africa Region

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Document of the World Bank, co-produced with the Government of Côte d’Ivoire, theInternational Monetary Fund, the African Development Bank and the European Union

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Monetary Equivalents

Monetary Unit = CFA Franc (CFA F)1 US dollar = 436.17 (April 2008)

Financial Year

01 January - 31 December

ACRONYMS AND ABBREVIATIONS

ACCD Central Account Agency (Agence Comptable Centrale des Dépôts)ACCT Central Accounting Agent of the Treasury (Agent Comptable Central du

Trésor)ADB African Development BankAIDS Acquired Immune-Deficiency SyndromeASTER Treasury Service Database (Application des Services du Trésor en

Réseau)BCEAO Central Bank of West African States (Banque Centrale des Etats

d’Afrique de l’Ouest)BROMD National Development Strategy based on Achievement of the MDGsCAA Amortization Autonomous Fund (Caisse Autonome d’Amortissement)CFAP Classification of Functions of Government (COFOG)CGAF General Accounts of the Financial Administration (Compte Général de

l’Administration et des Finances)CGI General Taxation CodeCGRAE Civil Servants National Retirement Fund (Caisse Générale de Retraites

des Agents de l’Etat)CNPS Caisse Nationale de Prévoyance SocialeCNW Centre, North and WestCPAR Country Procurement Analytical ReviewCRDP Public Expenditure Review UnitDAAF Director of Administrative and Financial AffairsDAC Development Aid CommitteeDCPE Department of Economic Conditions and ForecastingDDP Public Debt DirectorateDGBF General Directorate of the Budget and Finance (Direction Générale du

Budget et des Finances)DGD General Directorate of Customs (Direction Générale des Douanes)DGER Economic Governance and Recovery GrantDGI Internal Revenue Service (Direction Générale des Impôts)DGTCP General Directorate of the Treasury and Public Accounting (Direction

Générale du Trésor et de la Comptabilité Publique)DMP Directorate of Public Procurement (Direction des Marchés Publics)DSOP Expenditures without Payment Order (Dépenses sans Ordonnancement

Préalable)E.U. European UnionECOWAS Economic Community of West African StatesEPCA IMF Emergency Post-Conflict AssistanceEPN National Public Establishments (Etablissements Publics Nationaux)

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FUR Single Reference File (Fichier Unique de Référence)GDP Gross Domestic ProductHDI Human Development IndexHDS Health and Demographic SurveyHIPC Highly-Indebted Poor CountriesIDA International Development AssociationIGE General Public InspectorateIMF International Monetary FundMDG Millennium Development GoalsMEF Ministry of Economic and FinanceMTEF Medium-Term Expenditure FrameworkNPV Net Present ValueOECD Organization of Economic Cooperation and DevelopmentPEFA Public Expenditure and Financial AccountabilityPEMFAR Public Expenditure Management and Financial Accountability ReviewPGT Paymaster-General of the Treasury (Payeur Géneral du Trésor)PIP Public Investment ProgrammePPA Purchasing-Power ParityPRSP Poverty Reduction Strategy PaperSACO Central Payment Order Service (Service Autonome de Centralisation de

l’Ordonnancement)SIGFAE Integrated Public Servants and Government Employees Management

SystemSIGFIP Integrated Public Finance Management SystemSIGMAP Integrated Public Procurement Management SystemSIR Ivorian Refining Company (Société Ivoirienne de Raffinage)SNDI National Company of Software Development (Société Nationale de

Développement Informatique)SOE State-Owned EnterpriseSYGADE Debt Management and Analysis SystemSYSCOA West African Accounts SystemTOFE Table of State Financial OperationsWAEMU West African Economic and Monetary UnionUNO United Nations OrganizationVAT Value-Added Tax

Vice President: Obiageli K. EzekwesiliCountry Director: Madani M. Tall

Sector Manager: Sudhir ShettySector Official: Antonella BassaniTeam Leaders: Marcelo R. Andrade

Richard A. Doffonsou

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TABLE OF CONTENTS

PREFACE .................................................................................................................................................... v

EXECUTIVE SUMMARY......................................................................................................................... vii

A. REVIEW OF PUBLIC EXPENDITURES............................................................................................ 1

A. Introduction....................................................................................................................................... 1

B. Quality of Reporting of Expenditure .................................................................................................. 7

C. Public Finance and Budgetary Discipline........................................................................................... 9

D. Allocation of Resources by Sector and by Economic Classification................................................. 26

F. Conclusions and Recommendations................................................................................................. 42

2. REVIEW OF THE PUBLIC FINANCIAL MANAGEMENT SYSTEM........................................... 49

A. Context of the Review ..................................................................................................................... 49

B. General Overview ........................................................................................................................... 49

C. Legal and Institutional Framework .................................................................................................. 51

D. Credibility, Comprehensiveness, Transparency of the Budget and Policy-based Budgeting .............. 54

E. Accounting, Recording and Reporting ............................................................................................. 63

F. Predictability and Internal and External Controls of Budget Execution............................................. 68

G. Summary of the Recommendations.................................................................................................. 82

3. REVIEW OF THE PUBLIC PROCUREMENT SYSTEM................................................................ 84

A. Context of the Review ..................................................................................................................... 84

B. General Overview ........................................................................................................................... 85

C. Pillar I: Legislative and Regulatory Framework ............................................................................... 87

D. Pillar II: Institutional Framework and Management Capacity ........................................................... 90

E. Pillar III: Procurement Operations and Market Practices .................................................................. 93

F. Pillar IV: Integrity and Transparency of the Procurement Mechanism .............................................. 95

H. Summary of Recommendations ....................................................................................................... 97

FIGURES

Figure 1.1: Human Development Index, 1970 - 2005........................................................................... 4Figure 1.2: GNI per capita in current US dollars .................................................................................. 6Figure 1.3: Total Revenues (constant 2005 CFAF billions) ................................................................ 12Figure 1.4: Government revenue excluding grants as a proportion of GDP (%),

African Countries, 2005................................................................................................... 13Figure 1.5: Cocoa Farm Gate Price as Percentage of FOB Price in 2006 ............................................ 14Figure 1.6: Grants and Loans, 1995-2008 .......................................................................................... 16Figure 1.7: Selected Debt Ratios, 2006 - 2027 ................................................................................... 25Figure 1.8: Poverty-relevant Spending, by Ministry, as a Percentage of

Total Expenditures, 1999 - 2008 ...................................................................................... 26Figure 1.9: Education Spending and Gross National Income per Capita in 2001, African Countries ... 27Figure 1.10: Net Enrolment Rates in Primary School (Male, sub-Saharan African Countries) ............. 28Figure 1.11: Health Spending and Gross National Income per Capita in 2001

in Selected African Countries .......................................................................................... 29Figure 1.12: Gross National Income per Capita and Births Attended by Trained Personnel

in 2001, in Selected African Countries ............................................................................. 29Figure 1.13: Per Capita Gross National Income and Population per Hospital Bed in 2001,

in Selected African Countries .......................................................................................... 30

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Figure 1.14: Government Personnel Costs as a Percentage of GDP, in SelectedAfrican Countries in 2005................................................................................................ 31

Figure 1.15: Government Personnel Costs as a Percentage of GDP, for a Selection of LessDeveloped Countries, 2005.............................................................................................. 32

Figure 1.16: Ministry of National Education: Percentage of Total Expenditures byEconomic Classification, 1999 - 2008.............................................................................. 33

Figure 1.17: Ministry of Economic Infrastructure: Percentage of Total Expenditures,by Economic Classification, 1999 - 2008 ......................................................................... 34

Figure 1.18: Levels of Disbursements of World Bank Projects, for Africa Region and forCôte d'Ivoire, 1997 - 2007 ............................................................................................... 41

Figure 3.1: Côte d’Ivoire Public Procurement Aggregated Score by OECD/DAC Pillar ..................... 85Figure 3.2: Public Procurement - Aggregated Scoring by OECD/DAC Indicator................................ 86

TABLES

Table 1.1: Selected Economic and Financial Indicators, 2002-08........................................................ 3Table 1.2: Poverty Index 1995 - 2006................................................................................................. 4Table 1.3: Components of the Human Development Index for Côte d'Ivoire ....................................... 5Table 1.4: Comparing official sources concerning spending: budget, CGAF and TOFE, for 2005 ....... 8Table 1.5: Fiscal Developments and Prospects (2002-08, Percentage of GDP).................................. 11Table 1.6: Planned versus actual spending aggregates, 2002-2005 .................................................... 17Table 1.7: Planned and actual expenditures, 2006-2007.................................................................... 18Table 1.8: Budget Execution by Function, January - September 2007 ............................................... 19Table 1.9: Budget Execution in Health and Education, January – September 2007............................ 20Table 1.10: Planned and Actual Expenditures of the Largest Ministries, 2007 .................................... 21Table 1.11: Planned and Actual Expenditures by Economic Classification: January - September 2007 22Table 1.12: Crisis Expenditures.......................................................................................................... 24Table 1.13: Balance of Major Categories of Spending for Education, Health and Infrastructure,

1999 and 2007 (% of total) .............................................................................................. 32Table 1.14: Progress Towards the Key Millennium Development Goals as of 2005 ............................ 35Table 1.15: Projected Financial Requirements for Achieving the Millennium Development Goals...... 36Table 1.16: Global Action Plan for Public Expenditures ..................................................................... 45Table 2.1: Summary of PEFA Scores ............................................................................................... 50Table 2.2: Global Action Plan for Public Financial Management ...................................................... 82Table 3.1: Global Action Plan for Public Procurement...................................................................... 99

ANNEXES

Annex 1: Fiscal Developments and Prospects (2002-08, % of GDP) ................................................ 105Annex 2: Expenditures by Ministry, January-September 2007.......................................................... 106Annex 3: Planned and Actual Expenditures by Economic Classification January-September 2007 ... 107Annex 4: Normative Timetable for Budget Preparation .................................................................... 108Annex 5: Stages of the Normal Expenditure Procedure .................................................................... 109Annex 6: Statistical Control Table of the Financial Controller – Fiscal 2006 .................................... 110Annex 7: Computer Systems............................................................................................................ 111Annex 8: Developments since the 2004 CPAR................................................................................. 114Annex 9: Comparison by Country – Summary of PEFA Scores........................................................ 117Annex 10: Comparison by Country – Average Assessment per OECD/DAC Pillar............................. 118

PREFACE

1. This joint report is the fruit of the permanent dialogue and coordination between theGovernment of Côte d’Ivoire and the major multilateral technical and financial partners in the area ofpublic expenditure management. It was prepared under the leadership of the World Bank with theparticipation of the International Monetary Fund (IMF), the African Development Bank (ADB) andthe European Commission (EC).

2. The report has a triple objective. First of all, in terms of the Government, it is intended toencourage the development and implementation of a Government Action Plan for improving PublicExpenditure Management. Secondly, it aims at establishing a concerted framework for assessing theresults of medium-term reforms. Finally, it is also intended to motivate the specific interest of thetechnical and financial partners in the areas covered by the review with the goal of defining jointlywith the Government a coordinated assistance framework for multilateral and bilateral partners. Inthis regard, it is commendable that the Ivorian authorities have decided to launch a new PEMFARreview within 2 - 3 years to assess progress achieved, establish a new reference situation, define anew time-bound performance program and set the framework for actions to be carried out incollaboration with development partners.

3. The preparation of this report would not have been possible without the strong commitmentof the Ivorian authorities. This report benefited from the guidance and personal involvement of theHon. Minister of Economy and Finance, H.E. Mr. Charles Koffi Diby and his Principal Secretary,Mr. Ahoutou Koffi Emmanuel. It also received the support of Mr. Kouassi Kouamé, DirectorGeneral of Budget and Finance, the Directors General of all the financial authorities (DGCPT, DGI,DGD), the Directors and senior executives of the Ministry of Economy and Finance and the Ministryof State, Ministry of Planning and Development, and particularly the constant support, fullcooperation and availability of Mmes. Yao Madelaine, Special Adviser to the Minister of Economyand Finance and Fofana Mariame, Director of Budget Estimates and Synthesis and focal points of thePEMFAR review. The report also benefited from comments from members of the NationalCoordination Committee and Monitoring of public procurement (CNCS), the Economic andFinancial Affairs Commission of the National Assembly, the General Public Inspectorate (IGE), theChamber of Accounts, the Administrative and Financial Directors of the Ministries in charge ofEducation, Health, Economic Infrastructure, Decentralization and Local Communities; as well asofficials of the General Confederation of Enterprises of Côte d’Ivoire (CGECI), Petroci, the Cocoaand Coffee Control Board (ARCC) and other government entities as well as the contribution of thecivil society.

4. The preparation of this report resulted from the efficient coordination by the Ivorianauthorities and the Multilateral Technical and Financial Partners (PTFM). The World Bank ensuredthe overall coordination of the PEMFAR exercise in close collaboration with the Ministry ofEconomy and Finance through the PEMFAR focal points (Mmes. Yao Madelaine, Special Adviser tothe Minister of Economy and Finance, and Fofana Mariame, Director of Budget Estimates andSynthesis).

5. In September 2007, a launching workshop of the review was organized with the support ofthe World Bank, the AfDB and the IMF and the excellent participation contributed to strongownership of the exercise. In November 2007, an inter-agency mission to review the system forpublic expenditure and procurement benefited greatly from the active dialogue with the different

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government services and other development partners. This inter-agency mission, headed by theWorld Bank, included representatives from the African Development Bank, the Fiscal AffairsDepartment of the IMF, and the European Commission Delegation. The World Bank and AfDBprovided funding for the consultants who participated in the inter-agency field mission and preparedthe preliminary reports. The same active commitment facilitated the work of the January 2008 WorldBank mission focused on management of public expenditures. Finally, a validation workshop wasorganized in Abidjan on June 16-17 2008 for dissemination of the conclusions and recommendationsof this review to members and specialists of the Government and to the civil society. The EuropeanCommission funded this workshop while the AfDB funded the participation of the two mainconsultants on public finance and procurement systems.

6. The main PEMFAR report was prepared by the World Bank with inputs from Messrs. PeterMoll, World Bank Senior Economist (Review of Public Expenditures), Robert Cauneau and GiséleSuire, international consultants, funded respectively by the African Development Bank and theWorld Bank (PEFA Performance Report and contribution to the Review of the Public FinancialManagement System) and François Serres, international consultant, funded by the AfricanDevelopment Bank (Procurement Report prepared according to the OECD Methodology andcontribution to the Review of the Public Procurement System). The consultants’ reports weretransmitted to the Government, the technical and financial partners, including the PEFA Secretariat,for comments in January and February 2008. Some of the comments received are reflected in thismain report and the attached volumes. The conclusions and recommendations of the validationworkshop organized in Abidjan in June 2008 are also reflected in this main report and the attachedvolumes.

7. World Bank staff who contributed to the preparation of this report included Messrs. MarceloAndrade (TTL, Senior Economist) and Richard Doffonsou (Co-TTL, Economist), Emile Finateu(Lead Financial Management Specialist), Eric Yoboue, (Senior Procurement Specialist), Diallo BellaLelouma (Senior Financial Management Specialist), Peter Moll (Senior Economist), Mrs. AssiataHouédanou (Disbursement Assistant), Mmes. Judite Fernandes, Zainab Mambo-Cissé, Tina Aboah-Ndow (Operations Assistants), and Marie-France Anet-Oyourou (Procurement Assistant).

8. Those who contributed from the International Monetary Fund (IMF) included Messrs. BacariKoné, (Technical Assistance Adviser of the Fiscal Affairs Department) and Philippe Egoumé (IMFResident Representative). From the AfDB were Messrs. Racine Kane, (Chief Macro-economist),Samba Ba (Senior Macro-economist), and Serge Nguessan (Chief Procurement Officer). Staff fromthe European Commission comprised Messrs. Zoltàn Agai and Koenrad Burie.

9. The team from the World Bank benefited from technical guidance and advice fromMr. Bernard Harborne (former Resident Representative) and Ms. Antonella Bassani (SectorManager, AFTP4), and Mr. James Bond (former Director of Operations). The reviewers, Messrs.Francisco Carneiro (OPCCE), Pierre Messali (MNAFM) and Naushad Khan (ECSPS) made precioussuggestions and provided advice from the design up to the finalization of this review. Messrs. FransRonsholt and Franck Bessette (PEFA Secretariat) made essential suggestions for the design andprovided comments on the preliminary report and during the finalization of the PEFA exercise inCôte d’Ivoire.

EXECUTIVE SUMMARY

1. This review was conducted in Côte d’Ivoire with the goal of establishing the referencesituation of the management and system of public finances, including procurement, andfacilitating the monitoring of the impact of the reforms to improve the management andefficiency of public policies and their fiduciary framework. The review is also aimed atassisting the Government in the establishment of an updated action plan of well-targeted measures,whose implementation will benefit from support from the community of the main multilateral andbilateral technical and financial partners. Hence, the review was used to develop some componentsof the Governance and Institutional Development Grant, approved by the World Bank’s Board ofDirectors during the 2008 fiscal year. The grant is intended to assist the Government to implement

reforms in the public finance management areas, including those identified in this review.

2. The review presents three in-depth analyses. After summarizing the main conclusions andrecommendations of the priority measures, the review presents the results of the followinganalyses: (i) public expenditure review, which analyses recent macro-economic and fiscaldevelopments in relation to the budget execution and Côte d’Ivoire’s poverty reduction strategy; (ii)review of the public financial management system, conducted on the basis of the findings of the“Public Financial Management Performance Report” (PFM PR), which constitutes Volume II ofthis review. The PFM PR was prepared using the “Public Financial Management PerformanceMeasurement Framework”, established in the context of the partnership under the “PublicExpenditure and Financial Accountability” (PEFA) program; and (iii) review of the publicprocurement system prepared on the basis of findings of the “Public Procurement AssessmentReport”. This report, which constitutes Volume III of this review, was prepared according to the“Methodology for Assessment of National Procurement Systems” approved by the OECD’sDevelopment Assistance Committee (DAC). At the end of each review, the report proposes anexhaustive action plan of corrective measures for enhancing the efficiency and transparency in theuse of government resources and improving the public finance management system and the qualityof procurement.

3. This executive summary highlights the main conclusions emerging from the PEMFARreview. The summary, after an overview, reflects succinctly the underlying themes which emergefrom the assessments of public expenditures, the public financial system, and the publicprocurement system. Moreover, in view of their importance in improving the impact andeffectiveness of public expenditure, the summary provides a set of targeted priority actions thatshould receive the Government’s special attention in implementing the reforms.

4. Globally, the results of this review are mixed. In some areas, the conclusions areencouraging. Progress in the macro-economic management since 2006 helped to establish, inAugust 2007, a program supported by the IMF Emergency Post-Conflict Assistance (EPCA). Agradual return to the orthodoxy in budget formulation and adoption was noted in 2007, with theapproval of the 2008 budget before the start of the fiscal year. Some progress has been made sinceSeptember 2007 which makes it possible the release of the in-year budget execution reports on aquarterly basis. The adoption in November 2007 of a road map for establishing an independentmechanism for regulating public procurement with separation of the execution and control functionswill contribute to improve considerably the quality of the Ivorian system. However, in other areas,several weaknesses were identified. Progress towards the achievement of the Millennium

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Development Goals is still inadequate. The rigor and transparency in the budget execution has yetto be consolidated and strengthened. Moreover, the external control is still inadequate and does notensure an appropriate transparency of the use of public resources. The integrity and transparency ofthe public procurement mechanism constitute the weak link of the chain.

5. The challenges to be faced in the coming years to improve the effectiveness andefficiency of public expenditure call for corrective measures that will require theGovernment’s sustained political commitment. The four main challenges are the following:

Pro-poor expenditures should be substantially increased to recover the delay in makingprogress towards the MDGs. In this regard, it is essential that the strategy for povertyreduction (full PRSP) being prepared and the public policies, properly identify and clearlydefine the program to be implemented to increase spending in the key social sectors(education, health and basic infrastructure). These expenditures should also be included in aMedium Term Expenditure Framework (MTEF) consistent with consolidation of recentgains in macroeconomic management.

Priority attention should be given to improving the budget’s credibility andcomprehensiveness. The budget should be implemented in an orderly and predictable way,to establish its credibility and increase the efficiency and impact of public expenditure. Tothis end, the gap between the voted and implemented budget should be greatly reducedwhile ensuring compliance with normal procedures during budget execution and strictlyenforcing the rules for the use of special procedures (cash advances). In addition, the budgetshould be more comprehensive (in revenues as well as expenditures) including thebudgeting of all public resources (services revenue, quasi-fiscal levies in the cocoa sectorand other resources from PETROCI).

Detailed and regular budget execution reporting should be established. The quarterlypreparation of the budget execution report should be continued and strengthened,particularly in view of the full PRSP, to allow detailed tracking of the expenditure funded bythe resources granted under the HIPC Initiative;

Transparency and integrity of public resource management should be increased andfiscal information must be accessible to the public. It is essential to reestablish, in theshort term, the legislative scrutiny of the external audit reports on the budget execution. Tothis end, it is important to return to the financial orthodoxy by timely producing the budgetexecution review laws. In this context, external institutions such as the Chamber ofAccounts and the National Assembly should be strengthened. Regarding procurement, it isnecessary to implement the National Public Procurement Observatory to ensure the effectiveseparation of policy from execution and control functions. In addition, the independentcomplaints mechanism should be operationalized. In both areas (public finance andprocurement) the various reports and fiscal information should be publicly available in atimely manner.

Public Expenditure Review

6. The Government is aware of the country’s post-conflict needs and is seeking to respondto the challenges presented. Côte d’Ivoire bears the common characteristics of post-conflictcountries. External debt arrears are large and public debt is unsustainable; revenues are low;

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government employment is inflated; expenditures on staff displace investment and other currentexpenditures; resources are diverted away from sectors contributing to poverty reduction; there is awide gap between planned and actual expenditures; and governance has deteriorated sharply.Consequently, the delivery of services has suffered and the outcomes have deteriorated. Theauthorities are seeking to respond to the challenge and the post-conflict reconstruction strategyprogram envisages actions which, when implemented, are expected to have a favorable impact onthe country’s living conditions.

7. The budget execution reports are not exhaustive and need to be substantiallyimproved. Treasury advances should be limited to the minimum, regularized on a timely basis andcaptured in the quarterly budget reports. Poor handling of spending on the basis of treasuryadvances results in the financial management system SIGFIP seriously under-reportingexpenditures; it also weakens transparency and accountability for the use of public funds, includingavoiding procurement procedures. In addition, the omission of considerable externally financedspending reduces the accuracy and usefulness of the budget reports. The General Accounts of theAdministration and Finances (CGAF) under-estimated investment expenditures by 43% in 2005.More efforts should be made to more comprehensively capture donor-funded spending; in themeantime, a “bridge table” could be developed to reconcile the CGAF (which excludes most donorfunds) and the TOFE (which includes donor funds).

8. Budget credibility should be considerably improved. Deviations between planned andactual expenditures are substantial. During the year 2007, overspending on sovereignty, defense andsecurity was particularly evident; consequently, several ministries, whose missions relate to povertyreduction, lacked the funds to deliver services. The Ministry of Agriculture, for example, spent only35% of its budget allocation by September 2007. As the Ministry of Economy and Finance cutsdown on treasury advances, overspending is expected to decline and more resources to be allocatedto the provision of services that have to do with poverty reduction.

9. Domestic resource mobilization needs to be strengthened and the comprehensiveness ofthe budget improved. Domestic revenues represented about 17 - 19% of GDP for the past threeyears, substantially less than in other countries at a similar level of development. The authorities areseeking various ways of increasing the take (improving collections, extending coverage to theinformal sector, and cancelling tax exemptions). In addition, the authorities would do well toimplement the automatic price adjustment mechanism of petroleum products, at the pump, toincrease the sector’s contribution to the budget, through that of PETROCI, since the revenues arefar below the potential in a context where oil prices are high and, therefore, quite favorable.Moreover, with a view to ensure budget comprehensiveness and good governance, it is necessary tobudget all quasi-fiscal levies (including those of the cocoa/coffee and oil sectors) and reduce levieson cocoa/coffee cumulatively in relation to the level observed during the 2007/08 crop reason.These resources, as agreed in the cocoa/coffee sector for the 2009 budget, could, among others, bepart of revenues allocated for the functioning of the sector’s structures and of the investmentallocations to funds attached to them. In this perspective, it is desirable to adopt and implement in asatisfactory manner a new institutional and regulatory framework for the coffee/cocoa sector, withinthe scope of the new government strategy for developing the sector, which will be funded throughthe World Bank’s Governance and Institutional Development Grant. The strategic study to beconducted should, among others, help to conclude on the appropriateness or otherwise of certainentities, and thereby, rationalize the use of the sector’s resources.

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10. With the end of the crisis, poverty-relevant activities should be better funded. Duringthe political crisis, spending on poverty-relevant activities fell as a proportion of all governmentspending. For instance, health spending fell from 9% of total spending in 1999, to 6.4% in the 2008budget. Total public expenditures in the education and agricultural sectors also declined from 28%and 9% in 2000 and 1999, respectively, to 23% and 1.5% in 2007. These levels of expenditure arewell below those in countries at an equivalent level of wealth. Pressures on the current expendituresaccount also contributed to reduce road maintenance efforts.

11. Expenditures on personnel largely exceed the WAEMU convergence criterion. Thewage bill represents 43% of tax revenues, and is very high compared to the other WAEMUcountries and well above the established convergence criterion (35%). Now that peace is returningto the country, the Government needs to ensure that its personnel have recurrent funds at theirdisposal to deliver services, and investments that had been abandoned should be resumed. However,personnel costs as a share of total public expenditures should not be increased. Efforts should bemade to prevent that the high budget overrun in the prime de front, registered in 2007, does notbecome structural and exert a crowding out effect on other expenditures, particularly expendituresin the poverty reduction priority sectors.

12. Out of the seven Millennium Development Goals, only two (maternal health andHIV/AIDS) have a good chance of being achieved before 2015. The remainder – namelyeradication of extreme poverty and hunger, primary education, gender equality, infant mortality andimproved water supply– are behind schedule. More funds are needed, but also improved efficiencyin service delivery.

13. Work is under way to prepare the full poverty reduction strategy, which should becompleted around September 2008. It will be crucial to develop a medium-term expenditureframework, so as to make credible projections of financial requirements. The strategy should clearlyidentify and integrate a plan for increasing and incorporating in the quarterly reports expenditureson poverty reduction activities. In this context, a budget classification, which identifies the povertyreduction expenditures, should be adopted in the short-term.

14. Procedures to enable the different actors of the expenditure chain to ensure an efficientimplementation of externally-funded projects needs to be implemented. While the installationof SIGFIP in 1999 gave better control over expenditures, co-financed projects faced difficulties dueto the long lags in the cycle of approvals. At the time of the suspension of Bank disbursements in2004, Côte d'Ivoire had the lowest rates of execution of externally-financed projects in the region.In the next two years, the Bank has agreed, on an exceptional basis, with the Ministry of Economyand Finance, that four of its projects will be implemented in transfers en capital. For the medium-term, it is important that the authorities avoid special arrangements for individual donors, but ratherwork on measures to make the SIGFIP more efficient, more responsive and better adapted toexternally-financed arrangements. In this regard, the approval cycle in SIGFIP should be simplifiedand the Directors of Administrative and Financial Affairs (DAAFs) should receive training, notablyin donor agencies’ procedures.

Review of the Public Finance Management System

15. In recent years, given the difficulties confronted by Côte d’Ivoire, its public financesystem has faced difficult conditions, making it hard to initiate reforms that would have helped to

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overcome a great number of its weaknesses, as reflected in the recent review conducted in theframework of the PEFA.1

16. Overall, the public finance system is below average (see Figure 1 below and Annex 9)and is weak compared with other countries. For some aspects, the scores of the PEFA indicatorsare good. However, other indicators should be improved through actions such as the return to theorthodoxy in the budget formulation and adoption; budgeting based on the public policies; budgetexecution and reporting as well as monitoring and external control. The results of the jointassessment carried out with the Ivorian authorities in accordance with the PEFA methodology arepresented in detail in Volume II of this review. This analysis covers the legal and regulatoryframework of public finance, and the system for drafting the Budget Law and to prepare theGovernment’s budget; it then examines the conditions for budget execution; finally, it analyzes themodalities for exercising internal and external controls over public finance.

Figure 1: Public Expenditure and Financial Accountability (PEFA) Scores

Source: Reports published on the site www.PEFA.org. Exception: Mali (to be published soon) and Côte d’Ivoire.

1Considering C as the average score for Côte d’Ivoire, only 10 of the 28 PEFA indicators were assigned this or higher

score.

1. BUDGET CREDIBILITY

a/ Mali, Benin, Ghana, Tanzania

Scoring: 3 = "A"; 2 = "B"; 1 = "C"

0.0

1.0

2.0

3.0

1. BUDGET CREDIBILITY

2. COMPREHENSIVENESS ANDTRANSPARENCY

3. POLICY-BASED BUDGETING

4. PREDICTABILITY AND CONTROLIN BUDGET EXECUTION

5. ACCOUNTING, RECORDINGAND REPORTING

6. EXTERNAL SCRUTINY ANDAUDIT

Cote d'Ivoire

Average 4 African Countriesa/

Average "3"

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17. The legal and regulatory framework of Côte d’Ivoire’s public financial managementsystem is relatively complete but it coexists and is tangled up with that of the WAEMU’sharmonized framework and needs to be improved. It comprises the Constitution, the organic lawon the budget law of December 31, 1959 and the decree on public accounts of January 3, 1980. Thisframework fixes the rules for the preparation of the budget laws, their execution, as well as theircontrol. Before the crisis started, Côte d’Ivoire had initiated a process of reform of the publicfinancial management system within the WAEMU community framework, whose financialguidelines were not totally incorporated into the domestic law. The process is, therefore,uncompleted. Given the fact that the WAEMU Guidelines are currently being revised, it ispreferable to wait for the end of this process, planned for December 2008, to encourage Côted’Ivoire to initiate as early as next year their full integration into the Ivorian law.

18. The presentation of the budget is still marked by the logic of resources, thepredominant role of the Ministry of Economy and Finance in the process, and the lack of amultiyear perspective. Since the past three years were characterized by the non-respect of thedeadlines for preparation and adoption of the budget, the Government pledged to adopt a betterframework for budget preparation. In this regard, the 2008 budget was adopted by PresidentialOrdinance on December 28, 2007. The very short deadlines given to the ministries for preparationof their budget limit the quality of their proposals. Moreover, the budget is prepared strictly on anannual basis. The ministries have no quantified sector strategies, as the main objective of actionsbudgeted in these past years was to support the crisis recovery process. The reactivation of thefinalization of the poverty reduction strategy should offer Côte d’Ivoire the opportunity to embarkon the development of medium-term hypotheses for the strategy’s priority sectors and help to gobeyond the annual budget horizon. Furthermore, the current budget nomenclature does not integratethe functional classification in accordance with international standards. Finally, governmentrevenues, notably those collected by public administrations, are not fully reflected in the budgetdocument.

19. The budget execution, which was carried out under difficult conditions in these pastyears, also presents significant weaknesses. Globally, as already mentioned above, the credibilityof the budget is still low. In fact, the provisions on the establishment of budget credits haveintroduced some rigidity in the execution of expenditures and their flexibilization is indispensablefor improving their quality. Moreover, if public accountants carry out regular bank reconciliations,the accounts where expenditures payable are kept are not adequately monitored, a situationreflecting the extended use of the advance payment procedure until 2007. Before the correctivemeasures taken in 2007, a considerable part of public expenditures (more than 50% according to the2006 estimates) has been executed outside the regular budget procedures and by resorting todiscretionary Treasury advances. Finally, the SIGFIP computer system is still under-utilized sincethe publication of the reports on the budget execution is not systematic. The reliability of theinformation is thus not completely ensured during the fiscal year. Concerning domestic revenues,the difference between estimates and those actually collected is not significant. However, a moresignificant contribution of quasi-fiscal revenues from the cocoa/coffee and oil sectors to the budgetshould help increase substantially domestic revenues. In this sense, the Government should take theappropriate measures to ensure comprehensive and transparent budgeting of these revenues.Moreover, there are still large domestic and external arrears, which require the adoption of aclearance strategy.

xiii

20. Public expenditure control mechanisms exist but they are not effective and operational.Internal financial control is part of the expenditure chain and exercised in a redundant mannerwithout preventing the existence of a recurrent risk on the effectiveness of the service rendered.Moreover, the lack of effective external scrutiny of the executive power constitutes a real challengefor Côte d’Ivoire. The Chamber of Accounts is in fact not yet really operational. The managementaccounts of public accountants were transmitted up to the 2004 fiscal year, and those of the 2005and 2006 fiscal years will be by the end of December 2008 latest. However, the latest budgetexecution review law judged by the Chamber of Accounts and voted concerned the 2002 fiscal year.The examination of the draft budget execution review laws is conducted with much delay. TheNational Assembly, which exercises control over the legislative power, does not receive anyexternal audit report and, since the budgets for 2006, 2007 and 2008 were adopted by Ordinance, itdid not also examine the related budget laws.

21. The potential financial risk resulting from the management of public finance in Côted’Ivoire is assessed in Table 1. It is important to specify that the assessment of this risk does notconcern the specific risk associated with the implementation of each component listed below, butthe financial consequences resulting from the presence or absence of an observed phenomenon.

Table 1: Financial Risk Assessment

COMPONENT Level ofRisk

Observations

Estimation of BudgetExpenditures

High The estimates of budget expenditures do not cover the entire activities of theGovernment and the estimates concern only the current fiscal year. Thefinancial risk caused by these phenomena seems high as they are exerting astrong pressure on cash management during budget execution.

Commitment, validation andorder to pay of budgetexpenditures(administrative phase of theexpenditure chain)

High The procedure of this expenditure phase is complete, but the control measuresinstituted, even if redundant, do not prevent an ineffective execution of thebudget. This phase of the expenditure chain is also too long and inefficient.The financial risk associated with this phase appears high. The lack ofefficient control on the materiality of the expenditures entails the risk that thepublic authorities do not obtain the counterpart of their financial commitment(value for money).

Execution of the payment ofbudget expenditures

(accounting phase)

High The high financial risk of this phase is systemic. The indispensable controlsfor reducing this risk are not in place.

Execution of personnelexpenditures

High The considerable efforts deployed by the services to compensate for thetechnical services used to ensure regular payment of the payroll cannotguarantee the reliability of expenditures on government employees. Therecurrent risk in the management of the payroll appears high.

Rules for the use of specialprocedures for execution ofbudget expenditures

High Although the legislative and regulatory mechanisms of these waivers exist,the extended use of these procedures (advance payment, regies d’avances)creates a financial risk.

Public Accounting Moderate The reasonable deadline for preparation of monthly accounting balancestranslates into a moderate risk on the management of available funds.

Reporting High The combined absence of internal control and very late production ofmanagements accounts result in a high financial risk that the errors andmisappropriations will not be discovered and especially that appropriatesolutions will not be taken to deal with them.

Cash Management VeryHigh

The financial risk is systemic and based on the lack of independent internalcontrols within services responsible for the public treasury.

Management of public debt Low The weaknesses in the monitoring of public debt at the Treasury do not showany significant risks in this area.

xiv

Assessment of the Public Procurement System

22. Following the 2004 CPAR, some progress was made in the improvement of the publicprocurement system. Despite the climate of political instability that has persisted for some years inCôte d’Ivoire, the challenge of procurement in the execution of budget is still and alwaysperceptible through the size of public expenditure (CFAF 121.9 billion2) subjected to procurement(except the communities and semi-public sector) in 2006. Apart from the fact that it does notinclude public resources granted to the communities and the semi-public sector, such as SOEs, thisamount hardly represents 1% of GDP and is, therefore, far below the average for the country (4%during the years 1994-2002)3 in the area of public expenditure subjected to public procurement. Thepublic procurement assessment was conducted in collaboration with the Ivorian authorities inaccordance with the OECD methodology, referenced according to the following four pillars: (i)Pillar I – Legislative and Regulatory Framework; (ii) Pillar II – Institutional Framework andManagement Capacity; (iii) Pillar III – Procurement Operations and Market Practices; and (iv)Pillar IV: Integrity and Transparency of the Procurement System.

23. Globally, the public procurement system is just above average4; but low compared tosome countries (Figure 2 below and Annex 10). With reference to the system recommended byOECD/DAC, it is necessary, however, to underline a major disparity between the scores by pillar,notably between pillar IV and the others. Despite the well-structured regulatory framework broadlyin conformity with international standards, and functional operational mechanisms, the weaknessesin the integrity and transparency and the functional conflicts observed in the regulation and controlaffect the efficiency of the system and reduce the impact of reform efforts since 2002. The results ofthe joint assessment of the public procurement system according to the OECD/DAC methodologyare presented in detail in Volume III “Public Procurement Assessment Report” of this PEMFARreview. The following paragraphs present the main conclusions of this assessment.

24. The Legislative and Regulatory Framework for procurement has considerablyimproved. Indeed, remarkable efforts have been made, with the adoption of the publicprocurement code in February 2005, for the harmonization of this framework with internationalstandards, including those of the WAEMU Guideline. However, there are still weaknesses in theprovisions of the code, whose scope does not cover some institutions (Parliament, etc.). The codealso authorizes waivers that may reduce its scope of application. Besides, cases of sole sourcecontracts are too widespread and pave the way for its abusive use. Similarly, the rules governing theapplication of the code are incomplete in the area of settlement of disputes, existence of anindependent regulatory body, sanctions, audit, community preference margin, and categorized list ofenterprises. Finally, the Bidding Documents should all be completed and approved through theregulatory channel.

2Source: Journal of Public procurement - June 2007 Edition.

3Source: CPAR 2004

4 The assessment assigned a score of 1.5, which corresponds to the average of the assessment system adopted byOECD/DAC.

xv

Figure 2: Comparison by Country a/ – Average Assessment per OECD/DAC Pillar b/

Source: www.oecd.org see Procurement, a report published by pilot countries. Exception: Ghana(www.worldbank.org) and Côte d’Ivoire. For Vietnam, the scores are assigned by the external review

25. The institutional framework and management capacity have been strengthened butthere are still areas requiring more efforts and support by a strong political will. A set ofmeasures5 aimed at integrating the planning and monitoring of the execution of public procurementin the management of public finance, has been installed and is functional. However, althoughendowed with a normative, regulatory and functional body (the Structure in charge of publicprocurement), and a public procurement information management tool, the institutional frameworkdoes not ensure the separation of control/execution and regulation functions (definition of policies,appeals and audits) of public procurement. In addition, no global strategy for strengthening thecapacities of the actors of the public procurement chain exist for ensuring efficient and sustainabledevelopment in the area, notably with a view to develop a career of procurement specialists withinthe administration.

5 The computerized system for managing public procurement (SIGMAP) has been established and inter-connected tothe budget management system (SIGBUD) and the public finance management system (SIGFIP).

a/ Uganda, Ghana, Rwanda, Vietnam, Sri Lanka

b/ Total of all scores of the sub-indicators of each pillar divided by its number.

Scoring: 3 = "A"; 2 = "B"; 1 = "C"

0.0

1.0

2.0

3.0

1. LEGISLATIVE AND REGULATORY

FRAMEWORK

2. INSTITUTIONAL FRAMEWORK ANDMANAGEMENT CAPACITY

3. PROCUREMENT OPERATIONS AND

MARKET PRACTICES

4. INTEGRITY AND TRANSPARENCY OF THEPUBLIC PROCUREMENT SYSTEM

Cote d'Ivoire

Average 5 Countries a/

Average "3"

xvi

26. The operational capacities of the system also constitute a challenge for improving itsefficiency. Indeed, although considerable progress has been accomplished in the area ofaccountability of the procurement and control authorities6, and development of tools (such asSIGMAP) and mechanisms for managing the documentation, the control and approval proceduresare still relatively too centralized for really promoting the efficiency of the system. In addition, therecent positive trends of the regulatory framework and the momentum on accountability of thecontracting authorities has created a very important need for training actors of the public and privatesectors which is important to be met. Finally, the mechanisms for dialogue with the private sectorare inadequate to facilitate the establishment of a legal framework for promoting the developmentof public/private partnerships and the capacities of this sector to improve access to public markets.The operationalization of the observatory of public procurement should undoubtedly contribute tofacilitate the establishment of this partnership framework.

27. The integrity and transparency of the procurement system constitute the weak link ofthe chain. The ex ante control of markets is ensured both within the contracting authorities (FocalPoints, COJO) and the Ministry of Economy and Finance (DMP). However, there is total lack ofinternal control by the DMP over contracts signed below the a priori review threshold (CFAF 100million) by the contracting authorities. Similarly, there is no external control of public procurementon the part of the competent structures like the General Public Inspectorate (IGE) or the Chamber ofAccounts. The lack of these controls weakens the functionality of the control framework and makesit impossible to effectively identify the irregularities in the observation of the rules in force, fraudand other cases of corruption. This lack of control and limited access to information on publicprocurement by the general public significantly affects the transparency of the system in place andalso reduces the capacity of the authorities to continually introduce improvements in the functioningof the system at the level of the pillar. Finally, the lack of a functional appeals mechanism and thelimited resources and tools devoted to the prevention and fight against fraud and corruption alsocontribute to the great weakness of the integrity of the national public procurement system.

Recommendations

28. The priority actions proposed in Table 2 below should be taken into account in thepreparation of the reform plan that the Government pledged to adopt before September 2008.By relying on the conclusions of this review, the preparation of the plan of priority actions to dealwith the major weaknesses should be done in a coherent manner and within the proposed deadlines.Recapitulated in a more exhaustive manner at the end of each chapter, the actions included in thetable below are those which should receive the Government’s priority attention with a view tostrengthen the management of public resources. The proposed priority actions concern institutional,organizational and procedural measures, which constitute a coherent set to be implemented in acoordinated manner and on the basis of an integrated and budgeted program. In the coming years,progress in the improvement of the management of public finance will be assessed taking intoconsideration the reference situation established in this review.

6 Focal points and Bid Judgment Opening Committees have been established within the contracting authorities toaccompany the deconcentration process; regional public procurement control services have also been created to enhancedeconcentration of the function and reconcile the control decisions of the contracting authorities.

xvii

Table 2: Priority Action Plan

Problems Encountered Measures to be taken ResponsibleParty

TechnicalAssistanceRequired

(Low,Average,

High)

To be completedbefore:

I. PUBLIC EXPENDITURE REVIEW

1. A) Domestic revenues are still lowcompared to the potential

1. Implement the automatic priceadjustment mechanism, at the pump, ofpetroleum products

2. Budget the quasi-fiscal revenuesfrom coffee/cocoa and oil; reduce taxeson cocoa; prepare an inventory andbudget revenues collected byministries.

3. Transfer completely to the budgetdividends paid by state-owned orpublicly participated companies

MEF

MEF

MEF

L

L

L

December 2008

Budget 2009

Immediate

1. B) Expenditure reporting ismisleading and actual expendituresdeviate from planned expenditures:

(1.B.1) The on line SIGFIP does notreport advances, so the quarterlybudget execution reports arecompiled using a parallel system

4. Strictly enforce the use of waivers tonormal procedures for execution ofexpenditure; prepare an inventory ofcash advances already committed andmaintain the total volume of theseadvances at less than 15% ofcumulative current expendituresexcluding salaries, debt servicing,régies d’avances and externally-financed expenditures

MEF/DGBF L Immediate

(1.B.2) Considerable deviationbetween actual and plannedexpenditures

5. Do not incur expenditures beyondthe budget envelopes and ensure thatthe poverty reduction-related sectorsreceive their entire budget allocations

DGBF L Immediate

1.C) Côte d'Ivoire has no detailed, time-bound, realistic and financed povertyreduction program

(1.C.1) Though based on multi-yearmacro-economic hypotheses there isno quantified sector strategy

6. Finalize and cost the full povertyreduction strategy and ensure thatallocations to the poverty reduction-related sectors are increased

MEMPD/MEF/Sector

Ministries

A September 2008

(1.C.2) The budget is limited to oneyear

7. Adopt a road map to implement aMedium-Term Expenditure Framework(MTEF)

MEF/DGBF/

SectorMinistries

H Mid-2009

II. REVIEW OF THE PUBLIC FINANCE SYSTEM

2. A) Legal and institutionalframework

8. Transpose the WAEMU Guidelines(currently being reviewed), ensuringtheir consistency with the 2001 GFS

MEF L In the yearfollowing theiradoption at theWAEMU level

2. B) Credibility, comprehensivenessand transparency of the budget andpolicy-based budgeting

xviii



(Low,Average,

High)


(2.B.1) The amount of governmentdomestic and external arrears is verylarge

9. Establish a global arrears clearanceplan

DGBF/DGTCP

L December 2008

(2.B.2) During the past 3 previousfiscal years, the budget was nevervoted before the beginning of thefiscal year

10. Adopt the Budget Law before thebeginning of each fiscal year (1January) and post the budget on theMEF website

MEF L December 2008

2.C) Accounting, recording andreporting

(2.C.1) The budget execution reportsare not systematically published, aremutually contradictory andconfusing, and public access to keyfiscal information is limited

11. Systematically produce everyquarter a report on the execution of theBudget Law, which identifies thepoverty reduction-related expenditures.Post this information on an Internet sitewithin 6 weeks after the end of thequarter.

12. Complete the interfacing of theSIGFIP and ASTER applications, andwith SIGFAE as well

DGTCP/DGBF

DGTCP/DGBF

L

A

Immediate

Mid-2009

2.D) Predictability and internal andexternal controls of budget execution

(2.D.1) The examination of the Draftbudget execution review law by theChamber of Accounts is conductedwith much delay

13. Issue the certificate of conformityof the draft budget execution lawswithin the ten months following theend of the fiscal year

14. Promulgate the organic lawcreating the Auditor-General’s Office,appoint the judges and provide it withan appropriate budget

Chamber ofAccounts

Presidency

H

L

October 2009

Mid-2009

15. Publish and post on theGovernment’s official Internet site theBudget Execution Review Law(starting with the one’s for 2005 and2006)

16. Follow-up identifiedmisappropriations

MEF

MEF/AJT

L

L

December 2008

Starting 2009

III. REVIEW OF THE PUBLIC PROCUREMENT SYSTEM

3. A) Pillar I: Legislative andRegulatory Framework

(3.A.1) The Public procurementCode defines:

A. Scope of application that doesnot cover certain institutions(Parliament, etc.) and authorizewaivers that may reduce itsscope of application;

B. Cases of application of sole

17. Transpose WAEMU Guideline 4 towiden the scope of application of thecode and limit the cases of applicationof sole sourcing

MEF/DGBF/DMP

L December 2008

xix



(Low,Average,

High)


sourcing which are too vast andfavor its abusive use

3.B) Pillar II: InstitutionalFramework and ManagementCapacity

(3.B.1) No separation of control andregulation functions in publicprocurement

18. Operationalize the NationalObservatory for Public Procurement, inline with the WAEMU guidelines, tomanage policies, training, appeals andaudits.7

MEF/DMP H June 2009

3.C) Pillar IV: Integrity andTransparency of the procurementsystem

(3.C.1) The legal framework andeffectiveness of the internal andexternal control of publicprocurement is weak

19. Publish the à priori and àposteriori internal control reports ofpublic procurement of all contractingauthorities, as established in theWAEMU guidelines

20. Publish in the Public ProcurementJournal and web site the results of allprocurement tenders and concessions,including those of state-ownedcompanies (SOEs)

MEF/DMP

MEF/DMP

L

A

January 2009

January 2009

(3.C.2) The regulatory mechanismfor settlement of disputes in theadjudication of contracts is notindependent and functional

21. Operationalize the independentmechanism for treatment of complaints

MEF/DMP H June 2009

7The operationalization of the National Observatory for Public Procurement will consist of (i) adopting the legal text(s)

required for its establishment, organization and operation; (ii) appoint the key managers (Regulatory Council andTechnical Steering Committee); and (iii) allocate an appropriate budget for the operation of this entity.

1. REVIEW OF PUBLIC EXPENDITURES

A. INTRODUCTION

1.1 After a coup d’Etat in December 1999, Côte d’Ivoire entered into a long period of politicalinstability. Efforts to promote national reconciliation were ongoing when in September2002, there was an armed uprising by mutinous soldiers faced with likely demobilization.This escalated into an outright secession. The country was split in two, with the Forcesnouvelles (FN) controlling the Centre, the North and the West and the Governmentcontrolling mainly the South and the East. The impartial forces, French (OperationLicorne) and those of the United Nations (UNOCI) served as a buffer between thebelligerents.

1.2 Implementation of the Ouagadougou power sharing agreement and of the road map for thepresidential elections will be challenging. Following several failed attempts to resolve thecrisis situation, in March 2007 a power-sharing agreement was signed in the form of theOuagadougou Accord. Power was shared between President Gbagbo and the ex-rebelForces Nouvelles leader (FN), Soro. The Accord, which received the support of theinternational community, set out a roadmap for disarmament, demobilization andreintegration, the dismantling of militias, reunification of the country and preparation forelections in 2008. A new transition Government, with the FN leader Soro as PrimeMinister, was formed in early April 2007. A unified command center for the army andthe rebel forces was established. Prefects for all the departments and judges for thenationality identification hearings (audiences foraines) were appointed. This shouldfacilitate the dismantling of militias, and the redeployment of the national administration.Implementing the roadmap in time for the presidential elections, as targeted, will bechallenging. Progress will require firm political consensus between the majorstakeholders and strong international support.

1.3 The adverse impact of the crisis on growth and poverty was severe and widespread. In the period2000–07, average annual economic growth rate was practically nil (0.4%), plungingbelow the rates in the rest of the WAEMU (4%) and sub-Saharan Africa (5%). Withpopulation growing at 1.7%, real per capita GDP fell by 1.3% annually. As anxiety aboutthe political and security situation grew and external funding dwindled, public andprivate investment dropped from 14% of GDP in the period 1994-99, to 10% during theperiod 2000-07. Comparator countries’ investment rates were far better: 20% in theWAEMU and 19% in sub-Saharan Africa. Private sector activity diminished, especiallyin industry. The partition of the country disrupted internal trade and reduced Côted'Ivoire’s role as the regional hub. Export volume growth fell between the period 1994-99 (8.7%) and the period 2000-07 (1.9%). The external current account held up (1.6% ofGDP during the period 2000-07) thanks to an increase in oil exports and favorable termsof trade. The financial sector was badly hit by the crisis, as all 19 bank branches wereclosed in the Centre, North and West after 2002. The quality of bank loan portfoliosdeclined, in part because of Government arrears to the private sector. The already weakjudicial system deteriorated further. Developments in Côte d'Ivoire hurt the WAEMUregional trade and output.

2

1.4 Fiscal performance suffered and the pattern of public expenditures deteriorated. Asgrowth slowed and the tax base eroded, total revenue fell. Pressures for defense anddiscretionary spending rose, while external assistance was suspended. While the overallfiscal deficit narrowed (from 2.7% in the period 1994-99 to 1.3% in the period 2000-06)due to the tight cash management, the country could not comply with most fiscalWAEMU criteria and domestic and external debt arrears increased substantially. Thecomposition of expenditures also deteriorated as health and education spending fell as ashare of GDP, from 5.3% of GDP in 1999 to 4.2% in 2007, and the share of “sovereignspending” rose, as security concerns came to dominate daily life.

1.5 Governance and transparency deteriorated. Budgets were approved late, often as lateas mid-year, so the standard budget cycle was disrupted. An increasing share of publicexpenditures (over 50% estimated in 2006) was executed outside regular budgetprocedures using discretionary treasury advances. The contribution of oil revenues to thebudget increased by 40% in value between 2005 and 2007. However, this contributioncould have been higher given the high oil prices. The quasi-fiscal levies on cocoa andcoffee were not budgeted and used to benefit producers as intended. Consequently,accountability was weak and the composition of the expenditures did not conform to thebudget. To meet temporary cash needs, the authorities resorted to advanced collection ofcocoa export taxes against large discounts. With the recent growth of the informal sector,tax evasion and fraud have also increased. Vested interests and political interventions inthe cocoa, energy and financial sectors have stalled reform. To reduce resistance toreform in these sectors, steps are now being taken to restructure the boards of theregulatory agencies in the cocoa sector and set the stage for more transparent andaccountable practices in the financial and energy sectors.

1.6 Governance worsened considerably in all measured dimensions of governance. Theshared perception is that governance was on constant decline between 1999 and 2007.8

For instance, according to Transparency International, the Corruption Perception Indexdeteriorated considerably between 1999 and 2007. In 2007, the country ranked 150th outof 180 while in 1999 it ranked 75th out of a total of 99 countries. In addition to thecocoa/coffee sector, confronted with the thorny issue of “rents”, the reforms in thefinancial and energy sectors stagnated during the past years. The Government, in unisonwith the World Bank and the IMF, is striving to take measures for reducing thebottlenecks, strengthening governance in the sector, improving transparency in themanagement of quasi-fiscal levies and restructuring the entities of the cocoa sector.Moreover, in the financial and energy sectors, the Government also plans to carry outreforms aimed at improving the management of these two sectors.9

8Other governance indicators show a similar trend, as those of Kaufmann, Kraay and Mastruzzi

(http://www.worldbank.org/wbi/governance).9

See Section 3 of the programme document of the EGRG (Report No. 4175-CI, 14 March 2008).

3

Table 1.1: Selected Economic and Financial Indicators, 2002-08

2002 2003 2004 2005 2006

Est.

2007

Est.

2008Proj.

National income (Annual percentage changes, unless otherwise indicated)

GDP at constant prices -1.6 -1.7 1.6 1.8 -0.3 1.6 2.9GDP Deflator 5.1 1.3 0.6 4.2 5.0 2.1 4.7Consumer price index (annual average) 3.1 3.3 1.5 3.9 2.5 1.9 5.0Consumer price index (end of period) 4.4 -0.1 4.4 2.5 2.0 1.5 5.0

External sector

Exports, f.o.b., at current prices 28.5 -8.3 8.4 11.3 8.0 -5.0 12.8Imports, f.o.b., at current prices -3.5 9.5 21.9 22.9 -1.7 0.1 17.7Real effective exchange rate (depreciation–) 1/ 4.0 6.9 1.3 0.0 -0.4 1.9 ...

Central government operations ( P e r c e n t a g e o f G D P )

Total revenue and grants 18.4 17.4 18.4 18.2 19.1 20.0 20.7Total revenue 17.8 16.8 17.5 17.1 18.5 19.4 19.4Total expenditure 19.6 19.6 20.1 19.9 20.9 20.6 21.1Primary basic balance 2/ 2.7 0.5 0.9 0.4 0.3 0.7 0.8

Gross investment 10.1 10.1 10.8 9.7 9.4 8.8 10.5Gross domestic saving 26.7 21.0 20.0 17.2 19.9 16.1 16.8Gross national saving 16.8 12.3 12.4 10.0 12.4 10.2 11.1External sector

Current account balance (incl. official transfers) 6.7 2.1 1.6 0.2 3.1 1.4 0.6Current account balance (excl. official transfers) 3.7 -0.4 1.7 0.4 3.3 -0.3 -0.5Overall balance -12.1 -9.9 -3.6 -4.0 -2.7 -2.1 0.1External public debt 81.8 76.5 72.4 73.5 71.8 70.1 66.8

Memorandum items:

Public external debt in arrears (% of GDP) 5.4 7.8 13.0 19.4 22.3 24.5 19.7Public domestic debt in arrears (% of GDP) 3.6 6.2 6.4 5.7 5.5 2.9 1.6Nominal GDP (CFAF billion) 8.006 7.984 8.178 8.621 9.029 9.379 10.103Nominal exchange rate (CFAF/$US,Period average) 695 580 528 527 522 479 446Population (million) 17.3 17.6 17.9 18.2 18.5 18.8 19.0Population growth (%) 1.7 1.5 1.5 1.8 1.5 1.5 1.5Nominal GDP per capita ($US) 665 782 867 900 936 1045 1190Real GDP per capita (%) -3.2 -3.2 0.1 0.0 -1.8 0.1 1.4

1/ Based on end-of-period changes in relative consumer prices and the nominal effective exchange rate.2/ Total revenues minus total expenditure, excluding interest and foreign- financed investment expenditures.Sources: Ivorien authorities; and IMF staff estimates and projections.

1.7 Although security has improved somewhat since the Ouagadougou Accord inMarch 2007, commerce is still limited. “Racketeering” (the practice of requiringpayments from travelers to pass security check-points) by the security forces both in theSouth and the North of the country has cut back on trade. GDP growth has recoveredsomewhat, driven by off-shore oil, but most of the population still faces economicinsecurity. In the north of the country, economic activity is still far below its pre-crisislevel, on account of a lack of credit as well as poor infrastructure and social services. Theinvestment climate is downgraded and few foreign investors have returned to the country.

1.8 Education and health services are much diminished in the north of the country. Inthis region there was no government presence from 2002 to 2007 and about 1 millionpeople were displaced. Many children in the north have not been able to attend school

4

since 2002. As of 2007, only 30% of qualified teachers had been redeployed. Most healthfacilities have reopened, but with a reduced staff. Food insecurity in the north has led toother displacements to southern towns, increasing the number of internally displacedpeople.

1.9 The nationwide poverty rate is estimated to have increased from 38% in 2002 to43% in 2006 (Table 1.2). Between 1998 and 2002, poverty increased (from 34% to38%) mainly due to a shock in the agricultural sector: producer prices for cocoa andcoffee fell. The further increase in the poverty rate from 2002 to 2006 was due to thedecline of the private formal sector in the urban areas as well as the impact of conflictrelated insecurity.

Table 1.2: Poverty Index 1995 - 2006

1995 1998 2002 2006

Abidjan 20 11 15 18

Côte d’IvoireUrban 24 23 25 28 (est.)Rural 46 42 49 54 (est.)Total 37 34 38 43 (est.)

Source: INS Côte d’Ivoire and World Bank (2007). The figure for 2006 in Abidjan is based on asurvey conducted in February in that year. The figures for the whole country in 2006 were derivedfrom a projection of poverty figures of 2002, using the growth of consumption.

1.10 Human development was already in decline before the 1999-2007 crises (Figure 1.1).As shown below, since the mid-1970s most regions in the world have increased theirHuman Development Index (HDI) scores. East Asia and South-East Asia had acceleratedprogress after 1990. The major exception is sub-Saharan Africa. Since 1990, it has onlyminimally improved. owing partly to economic reversal but principally to the disastrouseffect of AIDS on life expectancy. However, the HDI for Côte d'Ivoire declined after1985 and since 1995 it stagnated at a very low level.

Figure 1.1: Human Development Index, 1970 - 200510

10 Site http://hdrstats.undp.org/countries/country_fact_sheets/cty_fs_CIV.html, see 2007/2008 Human DevelopmentReport.

5

OECD

Latin America

East Asia

South Asia

Sub-Sah.

Africa

Côte d'Ivoire

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1975 1980 1985 1990 1995 2000 2005

Va

lue

of

the

HD

I

1.11 According to the UN Human Development Report, life expectancy was lower andchild mortality rate higher in 2005 compared to 1990, notwithstanding a “rise” ingrowth towards the end of the 1990s (Table 1.3). Of the HDI components, only incomeand gross enrolment rate are somewhat responsive to short-term policy changes. Theother components (life expectancy, adult literacy) reflect investments and institutionalarrangements from years and decades before. In 2001 and 2005, the income rank of Côted'Ivoire in PPP terms was 148 and 147, respectively, down from 130 in 1995.

Table 1.3: Components of the Human Development Index for Côte d'Ivoire

1990 1995 2001 2005 a

Life expectancy (years) 51,7 c 48,7 c 46,6 c 46,2 c

Adult education (above 15 years; %) 48,7

Combined primary, secondary and thetertiary gross enrolment ratio (%)

39,6

Infant mortality (under 1 year; per 1000) 103 e 118 e

Infant mortality (under 5 years; per 1000) 155 165 175 b 194 d

Rank in UN Human Development Index 145 161 166

Rank in income in PPP terms 130 148 147a All 2005 data, except life expectancy, are from the UNDP web site. The data for 2005, as published in the2007/2008 Human Development Report.b Infant mortality data from the 2003 PER.c Development data platform, World Bank. The 2006 WHO Mortality Fact Sheet indicates 44.d 2005 data, from WHO Mortality Fact Sheet 2006(http://www.who.int/whosis/mort/profiles/mort_afro_civ_cotedivoire.pdf), in turn from the Demographicand Health Survey for 2005.e Under 1 year infant mortality in 1990 and 1995: collected from UNICEF at:http://www.unicef.org/infobycountry/cotedivoire.html

1.12 The stagnation of Côte d'Ivoire’s HDI is comprehensible, given the decline in realper capita GDP after 1978 (Figure 1.2). As incomes rose up to 1978, child mortality

6

rates fell to their lowest levels (155/1000) in 1985. Then, as incomes fell between 1978and 2002, mortality rates rose inexorably, peaking at 194/1000 in 2005. Thisphenomenon seems to be produced essentially over a decade. Even if the crisis is quicklyresolved and the country makes good progress, it is likely that the under-5 mortality willtake several years to improve.

Figure 1.2: GNI per capita in current US dollars11

100

120

140

160

180

200

220

240

260

280

300

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Mo

rta

lity

rate

(pe

r0

00

)

200

300

400

500

600

700

800

900

1000

1100

1200

Pe

rc

ap

ita

GN

I

Mortality (<5, /000) (leftaxis)

GNI p.c., Atlas (currentUS$)

1.13 The Government’s post-conflict reconstruction strategy for 2008 envisages buildingon the gains of 2007, as well as improving public finance and transparency.Concerning the preparations for elections, town hall meetings began in September 2007and have so far run without security incidents. Also, the contractor for identification andelectoral enrolment has been appointed. The redeployment of the public administration inthe CNW zones is proceeding: all the prefects have assumed their posts and 2/3 of the24,000 civil servants who had to leave their posts have returned or are in the process ofreturning. The Government intends to redeploy 6,000 teachers during 2008. In addition,some 5,000 volunteers in education and health in the CNW regions will be given achance to participate in a competitive examination to become fully-fledged civil servants.The Government will also proceed with the integration of child-soldiers, provide teachingmaterials to schools and reopen school canteens. Overall, the strategy envisages actionsthat will have an immediate impact on the populations affected by the crisis and includes

11 Mortality rate and per capita GNI in current US dollars: World Bank Development Data Platform. Data formortality rate are the most recent available.

7

micro-projects, the provision of food aid and agricultural inputs, and also thereestablishment of basic infrastructure such as wells. Successful implementation of thisstrategy depends on the Government being able to complete the political normalizationprocess and shift resources to priority areas (health, education, agriculture, roads).

B. QUALITY OF REPORTING OF EXPENDITURE

1.14 Expenditure reporting is in need of an overhaul. Two areas need special attention:spending on the basis of treasury advances and externally financed spending. To beginwith spending using treasury advances: the SIGFIP financial management systemseriously under-reports spending on the basis of advances. It is impressive to observe theSIGFIP in action: with a few simple instructions, the system is able to turn out complextables, detailing the current or past budget and the execution of the same, broken down byany standard classification (economic, functional, ministerial, etc.). However, the SIGFIPreflects only expenditures which pass through the entire system. It does not reflectexpenditures that are made by advances. During the crisis years, the Government madeheavy use of advances, partly because the budget was adopted late in the year (e.g. in2007 it was passed in June) and, partly because certain ministries and institutionscontinued to make substantial use of advances even after the publication of the budget.

1.15 The process of “regularization” of treasury advances should be conducted in a moresystematic manner. The practice has consisted essentially in recording advances in theSIGFIP system after the expenditure has been made. Although the Government claimedthat it had made considerable progress in the “regularization” of the advances for 2007,the budget execution report of September 2007 was not prepared directly from theSIGFIP after the regularization has been appropriately completed. That report, appears tohave been to be have been compiled by relying on SIGFIP and a parallel system thatrecords expenditures on the basis of advances. In 2008, it is important to prepare aninventory of treasury advances already committed and maintain the total volume of theseadvances at less than 15% of cumulative current expenditures excluding salaries, debtservicing, régies d’avances and externally-financed expenditures. In addition, theseadvances should strictly follow the waivers to normal procedures for execution ofexpenditures.

1.16 The second area of expenditure reporting that is in need of reforms has to do withexternally financed projects. This arises because it is very difficult to reconcile the mainofficial sources of budget and spending information. On the one hand, there are theoriginal budget and the Compte Général de l’Administration des Finances (CGAF). Onthe other hand, there is the Tableau des Opérations Financières de l’État (TOFE). TheCGAF reports debt service due (and also increases in arrears) while the TOFE reportsdebt service paid; the CGAF does not attempt to report expenditures executed outside ofthe budgetary process, whereas the TOFE does make the attempt; and the CGAFconsiders only central government expenditures and not those of para-governmentalinstitutions, such as social security. The fact that the CGAF and the TOFE sometimesarrived at total expenditure numbers which are not far removed is purely fortuitous.

8

1.17 Reconciliation between the TOFE and the CGAF needs to be improved. Consider thebreakdown for the year 2005 in Table 1.4. The budget anticipated, and the CGAFreported, current expenditures of the order of CFAF 1,000 billion, investment of aboutCFAF 150 billion and debt service of about CFAF 580 billion. But the TOFE reportscurrent expenditures at a considerably higher level (CFAF 1,204 billion), investmentexpenditures at a considerably higher level (CFAF 235 billion), plus crisis and electionsexpenditures (CFAF 76 billion), and this is balanced out by reporting only paid serviceon the public debt (CFAF 178 billion, all in interest). It is not clear how to reconcile thesenumbers, as the TOFE and the CGAF do not cross-reference each other. It may be thatthe higher figure for current expenditure in the TOFE is due largely to its inclusion ofsocial security, and that the remaining items in current expenditure are reconcilable oncecompatible categories are used. It is not clear why the TOFE figure of CFAF 563 billionfor personnel differs sharply from the CGAF figure of 500 billion. What is clear is that:

The CGAF considerably under-reports externally financed investment (CFAF 28 billionin CGAF, CFAF 102 billion in TOFE). With the result that the CGAF underreported totalinvestment in 2005 by 43%.

The CGAF does not report crisis and election expenditures (CFAF 76 billion in TOFE),which were financed mostly from external resources. The outcome is that the CGAFunder-reported current expenditures in 2005 by at least 7% (=76/1021).

Table 1.4: Comparing official sources concerning spending:budget, CGAF and TOFE, for 2005

(in CFAF billions)

2005Budget

2005CGAF

2005TOFE

Expenditures 1735 1744 Expenditures 1714Current 990 1021 Current 1204

Personnel 561 500 a Personnel 563Soc. Sec. (Subscription) 39 .. a Soc. Sec. (CNPS, etc.) 149Subsidies and other transfers 55 303 a Subsidies and other transfers 94Other current expenditures 335 217 a Other current expenditures 395

Targeted social expenditures 3Investments 176 134 Investments 235

Internally financed 130 106 Internally financed 133Externally financed 45 28 External financed 102

Capital expenses (ADB grant) 0.5Net loans 20Crisis and election expenditures 76Toxic waste 0

Debt service 569 589 Interest on public debt 178Domestic 115 106External 454 483

a Note that the breakdown in the 2005 CGAF is similar, but not identical. The largest categories are personnel (500),goods and services (170), subsidies (147), other transfers (166), exceptional expenditures (26), real estate andmaterials (furniture) (8), capital transfers (4). For this Table, the following expenditures were grouped under thesection « Other current expenditures »: G&S, exceptional expenditures, real estate and materials and capital transfersfor a total of CFAF 217 billion.

9

Sources: 2005 budget drawn from the Cadrage Budgetaire (Budget Framework) 2006, issued by the authorities.CGAF 2005 from Compte Général de l’Administration de l’État 2005, p. 101, and from the Direction Générale duTrésor et de la Comptabilité Publique: Tableau de Bord du Trésor: Gestion 2005, p. 35.

1.18 From the analysis of this section, it is recommended that:

The authorities should ensure that the treasury advances are immediately regularized sothat they can be adequately reflected in the quarterly budget execution reports to bepublished within four weeks after the end of each quarter.

The authorities greatly restrict the access of the ministries to advances, to less than 15%of cumulative current expenditures excluding salaries, debt servicing, régies d’avancesand externally financed expenditures. In this regard, the instructions issued by theMinister of Economy and Finance on January 10, 200812 should be complied with to limitthe access to advances. These instructions, inter alia, require ministries wishing toincrease certain categories of expenditures beyond the budget limits, to ensure thefinancing themselves from other categories within their ministerial budget; the CGAFand the TOFE should cross-reference each other, possibly in a single table, showing howthe reconciliation is effected.

The consistency among the different reports (CGAF, TOFE, quarterly budget executionreports) should be improved. The CGAF should be made exhaustive and complete byreporting all the information that the TOFE includes on externally financed investment,crisis, expenditures and other items. If necessary, this additional information, whicharises from sources other than the budgeting and accounting system, could be included inan annex. The quarterly budget execution reports, likewise, should agree with the TOFE.

Efforts continue to be made to include all government expenditure into the budgeting andaccounting system. It is recognized that this is a difficult task because donors do notalways report grants and expenditures in a consistent manner, and donors are sometimesreluctant to surrender control of disbursements owing to fears of misdirection of thefinance.

C. PUBLIC FINANCE AND BUDGETARY DISCIPLINE

Aggregate Fiscal Discipline

1.19 Budget credibility has been weak. Except for improvements in 2007, fiscaldiscipline since 2002 has been inadequate. While the primary basic balance variedbetween 0.3% and 2.7% of GDP between 2002 and 2007, this was accomplished by thecountry’s ceasing its servicing of most loans, both internal and external (see Table 1.5below). External debt in arrears stood at 5.4% of GDP in 2002. This continued to mountin 2003, to an accumulated total of 7.8% of GDP, owed mainly to the Paris Club and theAfrican Development Bank. In addition, in 2002, the accumulated domestic arrears stoodat 3.6% of GDP. As the political and military crisis widened, external arrears mounted to24.5% of GDP by 2007 (see Table 1.1). Domestic arrears also increased to 5.5% of GDP

12 Instruction 005 MEF/CAB-01/OS of 10 January 2008 on accompanying measures of execution of the budget,2008 management.

10

in 2006 before declining to 2.9% of GDP in 2007. In 2007, while slightly below thepolicy target of 1% of GDP, the primary basic balance reached 0.8% of GDP, whichcompares favorably with the 0.3% in the previous year.

1.20 During 2007, the Government improved relations with its domestic and externalcreditors. Following the successful mobilization of resources on the regional financialmarket, a significant amount of domestic arrears was settled and current debt obligationsto several multilateral creditors were timely serviced. At the beginning of 2008, theGovernment paid half of its arrears with the World Bank and on April 1, 2008, itbenefited from an Economic Governance and Recovery Grant (EGRG) of US$308million (including budget support of US$35 million), thereby clearing the other half.13

Also, during 2008, after the planned settlement of arrears amounting to about US$150million owed to the ADB, it is envisaged that Côte d’Ivoire will also benefit from abudget support operation from this institution. The Government will initiate discussionswith the European Investment Bank with a view to eliminating its arrears with thatinstitution. It will likewise pursue discussions with the Paris Club, the other bilateralcreditors and the London Club in order to obtain debt restructuring and with a view toinitiating a HIPC debt write-down.

13 US$252 million for clearing arrears, plus nearly US$35 million as budget support.

11

Table 1.5: Fiscal Developments and Prospects (2002-08, Percentage of GDP)

2002 2003 2004 2005 2006 2007 2008Est. Est. Proj.

Total revenue and grants 18.4 17.4 18.4 18.2 19.1 20.0 20.7

Total revenue 17.8 16.8 17.5 17.1 18.5 19.4 19.4

Tax revenue 15.7 14.9 15.2 14.5 15.5 15.7 16.0

Direct taxes 4.2 3.6 3.5 4.2 4.9 4.5 4.8

Indirect taxes 11.6 11.3 11.6 10.3 10.6 11.1 11.3

Non tax revenue 2.1 1.9 2.3 2.6 3.0 3.7 3.4

Social security contributions 1.4 1.4 1.4 1.4 1.4 1.4 1.4

Oil and gas revenue … 0.2 0.5 0.7 0.8 0.7 1.1

Others (including PETROCI,toxic waste) 0.7 0.4 0.5 0.6 0.9 2.5 1.2

Grants (projects and programs, includingthose related to the crisis) 0.5 0.6 0.9 1.1 0.6 0.6 1.3

Total expenditure 19.6 19.6 20.1 19.9 20.9 20.6 21.1

Current expenditure 16.3 16.3 17.2 16.9 17.6 17.6 17.9

Wages and salaries 6.5 6.8 6.7 6.5 6.8 6.8 6.8

Social security benefits 1.3 1.4 1.7 1.7 1.9 1.9 1.9

Subsidies and current transfers 0.9 1.3 1.0 1.1 2.0 1.7 1.5

Other current expenditure 3.7 4.0 4.4 4.6 4.7 4.7 4.4

Crisis-related expenditure 0.7 1.2 1.2 0.9 0.8 0.8 1.2

Interest due 3.1 2.2 2.2 2.1 1.8 1.8 1.3

Capital expenditure 3.2 2.7 2.8 2.7 3.1 2.7 3.1

Domestically financed 1.8 1.6 1.5 1.6 2.3 2.0 2.1

Externally financed 1.4 1.1 1.3 1.2 0.8 0.7 1.0

Net lending 0.2 0.1 0.1 0.2 0.2 0.3 0.1

Primary basic balance 2/ 2.7 0.5 0.9 0.4 0.3 0.7 0.8

Overall balance, including grants 1/ -1.3 -2.2 -1.7 -1.7 -1.8 -0.7 -0.4

Overall balance (cash basis) -1.0 -0.7 0.8 -0.3 -0.3 -1.7 -1.1

Financing 1.0 0.7 -0.8 0.3 0.3 1.7 1.1

Domestic financing 0.1 -0.5 -1.5 0.4 0.3 1.3 0.3

External financing 0.9 1.2 0.7 -0.2 0.0 0.5 -4.1

1/ Payment order basis2/ Total revenues (excluding grants) less expenditure net of scheduled interests and adjustment.

Sources: Ivorian authorities; and IMF staff estimates.

1.21 The Government’s fiscal plan in 2008 seeks to consolidate recent gains whileaddressing urgent post-conflict needs. The budget’s key assumption is strong progresson the resolution of the crisis as defined in the 2007 roadmap agreed in Ouagadougou.The primary basic balance (i.e. the balance excluding interest and foreign-fundedspending) target is fixed at 0.8% of GDP (Table 1.5). To achieve the 2008 policy target,the share of the wage bill remains at the 2007 level of 6.8% of GDP, with newrecruitments limited to teachers and health workers; the share of non-wage currentspending in GDP (including discretionary spending by the highest state institutions) is

12

brought down to about the 2006 level, and subsidies to the electricity sector are reducedas result of the tariff increase, introduced in early 2008. The budget also plans for a 1% ofGDP increase in crisis-related and social spending. In the medium term, the primary basicbalance should increase from 0.7% of GDP in 2007 to 2% of GDP in 2010.

The Mobilization and Structure of Domestic Revenue

1.22 In real terms, total central Government revenues plunged when the crisis hit in 1999and they did not recover until 2006 and 2007 (Figure 1.3). As a percentage of GDP,revenues were already falling before the crisis (from 20%, in 1995, to 18.5%, in 1998)and dived to 16.5% in the crisis year of 1999, where they stagnated.

Figure 1.3: Total Revenues (constant 2005 CFAF billions)14

1,200

1,300

1,400

1,500

1,600

1,700

1,800

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Re

ve

nu

es

(in

20

05

inC

FA

bill

ion

16

16.5

17

17.5

18

18.5

19

19.5

20

20.5

Re

ve

nu

es/G

DP

(%)

Real total revenues

Revenues/GDP(right axis)

1.23 The recovery of domestic revenues between 2005 and 2007 is due to improvedcollection of indirect taxes and other non tax revenues (Table 1.5).15 With regard toindirect taxes, the increase between 2005 and 2007, by 0.8 percentage points of GDP, isdue basically to the VAT. As for other non tax revenues, an increase of 1.1 percentagepoints of GDP, they consisted largely of damages paid for the toxic waste incident as wellas PETROCI revenues. To further improve non-tax revenues, it is important to prepare aninventory of revenues collected by ministries and ensure that they are adequatelycaptured in the budget (para. 2.33). VAT receipts are expected to continue to performwell in 2008, as the authorities seek to improve collections, extend its coverage to theinformal sector and review various exemptions that had been granted during the crisis.Also, it is expected that the reopening of customs posts in the Centre, North and West(CNW) will generate an additional 0.3% of GDP in receipts.

14 Data provided by the Ivorian authorities and IMF documentation of same. The CPI was used to obtain realrevenues.15

The full table is found in Annex 1 of this report.

13

1.24 Efforts to collect revenues in Côte d’Ivoire are inadequate. This emerges from thegraph below which shows government revenues (excluding grants) as a proportion ofGDP, against per capita GDP in 2005. There is a widespread range in the revenuecollection effort, with natural resource-rich countries such as Nigeria and Botswana doingbetter than the other countries. Côte d'Ivoire is well below the average line. It isnoteworthy that Côte d’Ivoire’s ratio of revenues to GDP of 18% is less than that ofpoorer, non-resource rich countries, such as Malawi (26%), Ghana (24%) or Senegal(20%). In 2007, Côte d’Ivoire had only the fourth most important ratio of tax revenue toGDP out of eight WAEMU countries.16

Figure 1.4: Government revenue excluding grants as a proportion ofGDP (%), African Countries, 2005

Ghana

Kenya

Nigeria

TunisieEthiopia

Botswana

SudanMalawi

RCI 2005

0

10

20

30

40

50

60

100 1000 10000

Log. of per capita GDP in 2005

Revenues

ofth

eG

ovt(e

xclu

din

g

gra

nts

/GD

P)

1.25 Cocoa and coffee are a major source of income and export earnings. Together withcotton, these two products support the livelihoods of 9 million people, or half of thepopulation. Côte d'Ivoire is the world’s largest cocoa producer. Disruptions and physicalinsecurity during the crisis resulted in a sharp downturn of output. Reforms were put onhold and investment all but ceased. Quasi-fiscal levies were imposed on cocoa and coffeebut these were not used for the benefit of the producers as originally planned. A large partof the levies on exports collected between 2001 and 2005 (US$862 million dollarsequivalent),17 as well as spending by the sector’s agencies, cannot be traced. As a result,the sub-sector is not making the contribution to rural growth that it could.

1.26 The coffee/cocoa sector is characterized by a decline in cocoa production of aboutone hundred thousand tons during the 2006/2007 farming season compared to the

16 West African Economic and Monetary Union, 2007. Rapport séméstriel d’exécution de la surveillancemultilatérale. The Commission: Department of Economic Policies and Domestic Taxation. December 2007. Table“Status of implementation of the criteria in 2006”, page 101.17 Data from the Government quoted in World Bank Report No. 41745 on Economic Governance and RecoveryGrant (DGER) (approved on April 1, 2008).

14

Cocoa Farm Gate Price as Percentage of FOB Price

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Indonesia Nigeria Cameroon Ghana Côte d'Ivoire

previous season. This could be explained by a less favorable weather situation, theincrease in diseases, and to a lesser degree, the smuggling of products to neighboringcountries (although it is not possible to determine whether the phenomenon has increasedcompared to the previous crop year). On the other hand, coffee production has increased.This growth resumption in the coffee sector resulted from the price recovery and thereturn of farmers to the plantations abandoned during the crisis.

1.27 The average farm gate price paid to producers is still far below the prices paid toproducers of other countries (Figure 1.5). According to information provided by theGovernment, the cocoa average farm gate price paid to the producer as of 31 August2007 was CFAF 350/kg, representing a 35% increase compared to CFAF 260/kg in theprevious crop year. This seems to be basically due to the increase in prices in theinternational market (CFAF 901/kg compared to CFAF 787/kg), representing an increaseof about 15%. However, this average farm gate price only represents 42% of the FOBprice (35 % during the previous crop year) at the same date and is still below prices paidto producers of other producing countries (example: 72% in Ghana). As for coffee, therehas been a significant increase in the producer price which is CFAF 475/kg andrepresents 65% of the FOB price, resulting from an increase in the world prices andalleviated taxation and quasi-fiscal levies.

Figure 1.5: Cocoa Farm Gate Price as Percentage of FOB Price in 2006

1.28 The Government should review the levies funding the budget of the sector’s entities(ARCC, BCC, FDPCC and FRC). During the period 2001-May 2006, these levies wereestimated at about CFAF 100 billion. This represents nearly four times the operationalcosts of the former Caistab. It, therefore, appears urgent that the Government examinethe justification of such high levies/operational costs. The initial analyses of the2006/2007 detailed budgets of these entities show that considerable reductions arepossible, for the following reasons: (i) major investments were made for the 2006/2007crop season; it will be not be necessary to renew them; (ii) some activities whose fundinghad already been taken into account in the budgets of some entities are found in other

15

specific programs and, therefore, constitute a duplication; and (iii) the “other expenses”,particularly those of “communications and public relations”, are excessive and difficult tojustify. Consequently, it seems that the entities’ budgets for the years 2008 and 2009 andthe levies meant for financing them can be substantially reduced.

1.29 Since 2006, the Government has taken measures to improve transparency in thecollection and use of cocoa/coffee funds and is working on a global strategy toreform the sector. The quasi-fiscal levy on cocoa was reduced from CFAF 53.15/kg to49.11 in the 2006/7 crop season and to 46.46 in 2007/8, and the proceeds were channeledto the Fonds d’investissement en milieu rural under the supervision of a committee (theCoffee/Cocoa Committee) co-chaired by the Ministries of the Economy and Finance, andAgriculture. The next steps should include: the budgeting of all quasi-fiscal levies; thereduction of levies on cocoa, cumulatively, compared to the level observed during the2007/08 crop season; completion and publication of an audit of the levies managed by theCESPPCC; and adoption and satisfactory implementation, by the State, of a newinstitutional and regulatory framework for the cocoa/coffee sector, within the scope of thenew government strategy for development of the sector, which will be supported by aWorld Bank-financed project. This new global strategy for reforming the sector shouldcomprise a reform of the operation of existing agencies, including their roles in thecollection of quasi-fiscal levies.

1.30 The Government’s revenues from oil, gas and petroleum products rose from about3.5% of total revenues, in 2003, to 9%, in 2006. Crude oil production grew from 7.6million barrels in 2003, to 22 million barrels in 2006. A further increase to 30 millionbarrels is expected for 2009. Even so, Côte d'Ivoire is a small producer compared to otheroil-rich African countries. Nearly all the crude oil produced is exported. The State’s shareis secured through production-sharing agreements negotiated by PETROCI. The countryalso imports (lighter) crude oil from Nigeria to feed the refinery run by the SociétéIvoirienne de Raffinage (SIR), which is the sole supplier of refined petroleum products inthe country.

1.31 However, revenues generated by the oil sector are far below potential. Governmentrevenues from taxing petroleum yielded total fiscal revenues of some CFAF 103 billionin 2007, of which the bulk are for diesel.18 Revenue originating from petroleum as apercentage of total government revenues in 2005 was 5% in Côte d'Ivoire, 14% inSenegal, 17% in Mali and 11% in Burkina Faso. Côte d’Ivoire collects substantially lesstax, even though it is the only exporter among the four, and is the largest consumer. Theauthorities would do well to review the various tax rates and the means of their collectionwith a view to raising the State’s take.

1.32 The energy sector will require a technical upgrading compatible with its potentialnot yet realized. The entire energy sector constitutes one of the main engines of theIvorian economy. Given the preliminary results of the first two audits, the energy sectorseems to have survived relatively well the crisis. However, the sector has suffered fromlack of maintenance and development investments.

18 IMF, Selected issues and statistical appendix, 2007, Table 7 (page 51).

16

1.33 In the oil sector, it would be necessary to adapt the production sharing contracts tothe new international context of high prices.19 Careful preparation is also needed forthe next promotion of the sedimentary basin, which has a better future, given therecent oil and natural resources discoveries in the sub-region. An audit of SIR foundthat the refinery functions at a high level of performance, ranking among the best in sub-Saharan Africa. Its protection margin was reduced from 13% to 6% in 2007. SIR stillbenefits from an implicit subsidy. On the basis of these audits, the authorities plan todevelop a new strategy for the petroleum sector.20 The recent deep water technology canensure, with a more advanced seismic interpretation of the sedimentary basin, an efficientexploitation of existing deposits as well as those that are yet to be discovered. Theachievement of this effort will require the implementation of adequate accompanyingmeasures.

1.34 Particular attention should be given to the methodology for determining the price ofgas for the electricity sector as well as non-technical losses. The lack of recovery in theelectricity sector still affects some regions of the country and state institutions. Thissituation makes it impossible to implement a normal maintenance and investmentprogram that helps to export nearly 20% of the production to countries in the sub-region.However, the supply of the national and international market is affected by productionproblems and especially maintenance of the transmission and distribution grid. The sectorshould continue to reduce the technical and non-technical losses on the grid and improverevenues.

Figure 1.6: Grants and Loans, 1995-2008 (in CFAF billion)21

0

50

100

150

200

250

300

350

400

450

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Gra

nts

/loans

(accum

ula

tedé)

inC

FA

Fbill

ion

Grants Project Loans Programme Loans

1.35 Donor assistance started to fall off immediately as the crisis broke in 1999 and isplanned to resume in 2008 (Figure 1.6). There was a brief up-tick in program andproject loans in 2002 amid hopes of a durable political stabilization, but this did not

19 See the program document for the EGRG (March 14, 2008).20 See the program document for the EPCA 2007 (IMF).21 TOFE and budget of the Government for 2008 as agreed with the IMF.

17

materialize. Program loans ceased in 2003 and project loan disbursements ceased almostaltogether by 2005. Grant moneys were available for crisis-related expenditures in 2007,but because several projects made no progress for political reasons, the moneys wereunderspent.22 Following the successful implementation of IMF’s post-conflict assistanceand the clearance of arrears to the World Bank and the ADB, grants and project loans areexpected to rise sharply in 2008.

Government Expenditure Outturns

1.36 Côte d’Ivoire shows the typical characteristics of a country that is emerging from aperiod of conflict. Government consumption is high; wages and emoluments takeprecedence over goods and services; investment is low; execution of planned investmentsis low; there are large deviations of outturns from planned expenditures; and, as it wasalready pointed out all the governance indicators point to a deterioration of governanceand decline in effectiveness. The analysis below points out key issues that need to beaddressed now that a peace accord has been struck, enabling the country to return tonormality and aspire again to reduce poverty. The objective should be to strengthengovernance and prevent the unfortunate characteristics of a conflict-ridden situation frombecoming the norm now that the country has returned to stability.

1.37 In response to the decline in revenues after the crisis struck in 2002, investmentspending declined and planned spending differed from actual spending. Investmentexpenditures were underspent, with execution rates of 69% (2004) and 76% (2005). Lowinvestment outturns were due partially to a cutback in donor funding as the crisisdeepened. In addition, as tax receipts declined, the authorities cut back on non-personnelcurrent expenditure (e.g. demonstration materials and fuel for agricultural extensionagenda) and cut investment on the ground that can be postponed (Table 1.6).

Table 1.6: Planned versus actual spending aggregates, 2002-2005(CFAF billions)

2002 a 2003 a 2 0 0 4 2 0 0 5================== ==================

Actual Actual Budget Actual % Budget Actual %

Expenditures 2004 1520 1987 1563 79 1739 1744 100Public Debt 716 429 710 339 48 569 589 104

Interior 107 131 114 105 92 118 106 90Exterior 609 298 595 234 39 451 483 107

Currentexpenditures

1027 935 1008 1039 103 990 1021 103

Investmentexpenditures

255 156 268 185 69 176 134 76

a No planned budget numbers were presented in the 2003 General Account.

Source: 2002-03: 2003 General Account of the Fiscal Administration: Presentation report, pp. 35-36.2004-05: 2005 General Account of the Fiscal Administration: Presentation, p. 101.

22 SeeTable 1.12, page 22 for further detail about donor assistance during 2007.

18

1.38 In 2006 current expenditures were slightly over-executed (a rate of 103 or 104 percent, depending on the source, see Table 1.7 below). The execution of the investmentaccount rose to 111 percent in 2006, but fell again to 97 percent in 2007. As the countrysought to regularize its situation with respect to its international creditors, it startedpaying interest promptly.

1.39 While desirable, it is not possible to pinpoint the ministerial origin of the lowinvestment account outturns. The constraint for 2007 results from the fact that thebudget execution report for September of that year does not distinguish between thecurrent and the investment account at the ministerial level. In the future, budget executionreports should regularly make this distinction and list the execution figures for the currentand investment accounts separately by ministry.

Table 1.7: Planned and actual expenditures, 2006-2007(CFAF billions)

2 0 0 6 2 0 0 7================== ==================

Originalbudget

Revisedbudget

Actual % Orig.budget

Revisedbudget

Actual %

-- Breakdown (budget and CGAF) -- A G =G/A D H =H/D

Expenditures 1785 1971 ..Debt servicing 565 .. 573 99,6 523 .. ..Current expenditures 1031 .. 1075 104 1105 .. ..Investment spending 191 .. 212 111 344 .. ..

-- Breakdown (TOFE) -- A B C =C/B D E F a =F/E

Expenditures 1785 1816 1890 104 1971 2055 2050 100Current expenditures, y /c .. 1545 1588 103 1562 1494 96Interest .. 151 162 107 142 166 117Investment spending .. 271 302 111 261.9 254 97

a For 2007, actuals are estimated. Sources: A, original budget for 2006: 2006 Budget Framework. B, revised budget for2006: IMF. C, actual expenditures for 2006 drawn from the IMF and the Tableau des opérations financiers de l’État(TOFE) prepared by the authorities. D, original budget for 2007: Presentation to Cabinet of the 2007 draft budget(Annex 1: 2007 budget framework). E, budget for 2007: drawn from RCI, Presentation to Cabinet of the budgetexecution as at the end of September 2007. F, Actual expenditures for 2007, drawn from IMF and Tableau desopérations financiers de l’État (TOFE), in the month of February 2008, prepared by the authorities. G, actualexpenditures for 2006,drawn from the 2006 CGAF, Summary table of the execution of the 2006 Budget Law.

1.40 Detailed comparisons of planned expenditures as against actual expenditures byfunction cannot be presented for the period 2002 - 2006. The key source ofinformation on executed expenditures, i.e. the General Account, has several differentbreakdowns but not functional breakdowns. Hence, we are limited to commenting on thefunctional breakdown for 2007.

1.41 For 2007, the execution rates vary considerably by function. Table 1.8 reflects thesituation as reported at the end of September 2007. It is granted that in some sectors,

19

there cannot be straight-line extrapolation to the end of the year; and that in these sectorsit would not make much sense to compare the execution rates in Table 1.8 with thetheoretical number of 75% (January – September / January – December). Thisqualification having been made, it seems safe to make a number of statements:

“Institutions” in public administration (whose specific nature has not yet come to light)are already heavily overspent, with an execution rate of 138%.

Concerning the Ministry of Defense, the functional classification (Table 1.8) wouldsuggest that the defense function is overspent at 86%, but the ministerial classification(Table 1.10) indicates that the ministry was somewhat underspent at 66%. The apparentdiscrepancy is explained by the ex-gratia payments to soldiers (primes de front) whichare bulked with defence in the functional classification but not in the ministerialclassification. The primes de front were highly overspent in 2007 in response to threats ofunrest.

Agriculture and fisheries are grossly underspent, with an execution rate of only 31%.Similarly with housing (40%), health (43%) and education (66%).

Table 1.8: Budget Execution by Function, January - September 2007(CFAF billions)

Budget as votedand modified

Actual as ofSeptember 2007

Execution rate(%)

Public administration (central) 437 339 77.6Institutions 66 91 137.9General services 371 249 67.1

Defense 147 127 86.4Order and security 87 51 58.6Economic development 65 31 47.7

Agriculture 29 9 31.0Minerals and Energy 1 0.4 40.0Transport and telecommunication 23 15 65.2Industrial and other 13 7 53.8

Protection of the environment 13 6 46.2Housing, equipment and infrastructure 127 51 40.2Health and social action 180 78 43.3Culture, sport and leisure 18 11 61.1Education, training and research 437 290 66.4Public debt 546 148 27.1

Domestic 155 100 64.5Foreign 391 47 12.0

TOTAL 2055 1131 57.7

Source: Ministry of Economy and Finance, Presentation to Cabinet of the budget execution as of endSeptember 2007. Abidjan, November 2007.

1.42 The provision in the 2007 budget execution report of a detailed functionalclassification of education (primary/secondary/tertiary/technical) and health (healthcenters and other) is a very positive development. These expenditures are directly

20

related to poverty reduction and this practice should be continued. This sub-classificationpermits some precise observations (Table 1.9):

Within the health category, the “unclassified” category is badly underspent at only 48%.It is not known what elements this category represents.

Within the social action category, the heading Civic Service and Reinsertion is grosslyunderspent at only 9%. Political difficulties resulted in the program’s not being put inplace.

Within the education ministry, tertiary education is overspent (83%); basic and technicaleducation are underspent (with 65% and 51%, respectively).

Table 1.9: Budget Execution in Health and Education, January – September 2007(CFAF billions)

Budget asvoted andmodified

Actual as ofSeptember

2007

Execution rate(%)

Health and social action 180 78 43.3Health, of which: 96 54 56.3

Specialized health centers 31 24 77.4Otherwise unclassified 46 22 47.8

Social action, of which: 84 24 28.6Civic and rehabilitation service 53 5 9.4Retirement pensions 21 12 57.1

Education, training and research, including: 437 290 66.4Basic 266 174 65.4Secondary 31 21 67.7Tertiary 67 56 83.6Technical and professional 39 20 51.3

Source: Ministry of Economy and Finance, Presentation to the Cabinet of the Budget Execution as oft theend of September 2007. Abidjan, November 2007.

1.43 It would be useful for the authorities to investigate the causes of the underspendingof agriculture, housing, health and education. Since these functions are directly relatedto the Government’s anti-poverty program, making appropriate disbursements to thesesectors should be considered a matter of urgency. Likewise, further restraint may be duein respect of the “institutions” heading in public administration. It would be wise for theauthorities to investigate the causes of the overspending in these categories and adoptappropriate measures.

1.44 In the future, it would be desirable to present and publish detailed budget executionreports like that for 2007. This would assist implementation of the Government’spoverty reduction strategy and also the pursuit of economic development in general. Ifthe reports were posted on an Internet site it would permit civil society access to this keyinformation, thereby building trust with the general population and building support forthe Government’s anti-poverty strategy.

1.45 Planned versus actual spending by ministry also varies considerably. The plannedand actual expenditures of the largest ministries are presented in Table 1.10. The

21

following commentary focuses only on the results of the period January - September2007. As noted above in the analysis of expenditures by functional classification:

The Agriculture ministry was grossly underspent at only 35% of its budget as ofSeptember 2007. This ties in with the finding from the functional classification thatagriculture was grossly underspent.

The Presidency was vastly overspent at 140%. This is almost double the expected amountby September (namely, 75%). It was not possible to determine what goods and serviceswere involved. This ties in with the finding in the functional classification that “publicadministration” was overspent.

Table 1.10: Planned and Actual Expenditures of the Largest Ministries, 2007(CFAF billions)

No. MinistryBudget asvoted andmodified

Actual as ofSeptember 2007 a

Execution rate(%)

2 Presidency 37 52 14112 Ministry of Economy and Finance 921 552 60

of which debt 546 148 27compensation state-electricity company 89 10 11

15 Interior 116 84 7218 Agriculture 26 9 3521 Economic Infrastructure 104 65 6322 National Education 295 203 6924 Health 93 62 6725 Foreign Affaires 43 34 7926 Defense 137 91 6633 Higher Education and Research 87 84 9734 Technical Education & Professional Training 26 20 77

TOTAL 2,055 1,131 55Sources: Annex 2, September 2007: Ministry of Economy and Finance, Presentation to Cabinet on budgetexecution as of end-September 2007. Abidjan, November 2007.Note: “Largest” is defined as ministries with budgets over CFAF 15 billion..

1.46 Large variations also appear between planned and actual expenditures by economicclassification. A comparison of planned and actual expenditures in 2007 (January-September), by economic classification, is presented in Table 1.11. Subject to the above-mentioned qualification that matters might change once the October to Decembernumbers are in, several observations are in order:

Spending on goods and services (supplies) is grossly underspent at only 17%, withexpenditures on maintenance, services and communication being very low (16%, 21%and 15%, respectively). The implication is that services are being delivered only to alimited extent. This is the result of the strategic choices made by the authorities, namely:to maintain and extend employment for the sake of keeping the peace, even if this meansthat services suffer. It is worth noting that for all of Africa, the median ratio of goods and

22

services to wages is about 84%.23 For Côte d’Ivoire in 2007, the ratio was only 23% (=108/472, see Table 1.11).

There are four categories of expenditures, amounting to a total of CFAF 216 billion(about US$444 million), which where heavily overspent and whose nature is not veryclear. “Transfers to national institutions”, the bulk of which is a transfer to thePresidency, was 140% spent by September. No information could be secured on theheading “Institutions”, which was 135% spent. “Other goods and services”24 constitutesCFAF 118 billion of the total CFAF 292 billion in the revised budget for goods andservices, but no more detailed information on this category was available. Inferring fromthe budget execution report, this team was 126% spent by September 2007. “Othercurrent charges” was 92% spent. Subject to the qualification that the true nature, of theseexpenditures may still be made apparent, it appears that in 2007 substantial expenditureswere being made which are not provided for in the budget.

Table 1.11: Planned and Actual Expenditures by EconomicClassification: January - September 2007

(CFAF billions)

MinistryFinalizedBudget

Actual,September

2007

Execution Rate(%)

Amortization and interest 546 148 27.1Infrastructure (equipment, roads, buildings, water, electricity,

other) 164 67 40.9Transfers (communes, General Councils, EP, SPP, retirement

pensions, national institutions, embassies, non-profits,autonomous funds, households, other)

384 277 72.1

of which: Transfers to National Institutions 38 53 139.5Personnel (Central government wages, benefits, social security,

public associations and state-owned firms, institutions,embassies, communities)

611 472 77.3

of which: Institutions 26 35 134.6Goods and services 287 108 37.6

Provisioning (Furnitures) a 232 39 16.8Other (G&S less supplies) – nature unclear 55 69 125.5Other current charges 64 59 92.2TOTAL 2,055 1,131 55,0Source: Annex 3. Ministry of Economy and Finance, Presentation to Cabinet of the budget execution as of endSeptember 2007. Abidjan, November 2007.a Supplies = Maintenance, services, insurance, water, electricity, communication, rent, transport, missions, other.

1.47 Crisis expenditures in 2007 and those projected for 2008 are largely financedexternally and are mostly executed outside of the budget process. A compilation ofthese is presented in Table 1.12. Execution ran to just 57% in 2007, partly becausesome of the key donors (notably the World Bank) were unable to proceed with their

23 World Bank, African Development Indicators 2003, pp. 198 - 200, data for 2001, for sub-Saharan Africa.24 Note that this category is not presented in the original Government budget execution report. There is a substantialpart of the of Goods and Services category that is simply omitted in the original, and so the author constructed thisby subtracting Supplies from the total of Goods and Services.

23

assistance because the overall arrears situation of the country was not normalized duringthe year, as had been expected originally. The ex-gratia payment of premiums to soldierswas highly overspent in 2007, following threats of further unrest, increasing from theplanned CFAF 20 million to CFAF 39 million.

24

Table 1.12: Crisis Expenditures(CFAF billions)

2007 2008Planned Actual Planned

Peace Accords (Peace efforts) 32.8 43.9 33.0Ex-gratia payments to soldiers (primes de front) 20.2 39.0 20Civic Service 10.0 0 10.0Other (including Linas-Marcoussis) 2.6 4.9 3.0

DDR (Community rehabilitation) 33.0 9.5 26.9Domestically financed 10.0 7.0 7.0Externally financed 23.0 2.5 19.9

Redeployment of public administration 20.0 9.7 21.2Domestically financed 6.0 4.5 6.0Externally financed 14.0 5.2 15.2

Identification 21.9 5.7 34.2Domestically financed 4.9 5.7 5.0Externally financed 17.0 0.0 29.2

Elections 29.0 0.0 28.0Domestically financed 8.0 8.0 8.0Externally financed 21.0 0.0 28.0

Grand Total 136.7 76.8 151.3

Sources: IMF, Table 3c (November 2007), in turn computed from authorities’ figures.

1.48 Government investment, compared with public expenditures in Côte d'Ivoire, islower than in comparable countries. The ratio of total government spending on theinvestment account to total spending on the current account (omitting interest) was 0.25in 2002,25 falling to 0.18 in 2007.26 The equivalent ratio for the all sub-Saharan Africawas 0.37 in 2001.27

1.49 The country is in debt distress. Côte d’Ivoire’s public debt stood at about US$15 billionin 2006, or 85% of GDP. The bulk was external (73% of GDP) nearly all concessional.Accumulated arrears to external creditors amounted to US$0.4 billion, or 3.5% of GDP.Projections on the basis of prudent assumptions about growth and spending28 indicate thatthe country’s key net present value (NPV) ratios exceed the thresholds for the HeavilyIndebted Poor Countries (HIPC) initiative and only one – the debt-to-revenue – will reachthe threshold in the next 20 years. As can be seen in Figure 1.7, the NPV of debt-to-GDPratio falls from 85% in 2006 to 45% by 2027, not reaching the 30% threshold. The NPVdebt-to-exports falls from 125% in 2006 to 107% by 2027, not quite reaching the

25 Table 1.6, page 16.26 Table 1.7, page 17. Note that interest was subtracted from current spending for the purposes of calculating thisratio.27 See World Bank, African Development Indicators (2003), pp. 199-203. Capital and net lending for SSA was18.6% of GDP. This is divided by the sum of wages and salaries (31%), other goods and services (17.9%), subsidiesand current transfers (1.5%), giving a ratio of 0.37.28 Growth is estimated at 3.5%, in 2008, and 5% thereafter until 2027; real interest rates will range between -0.3%and 1.4%; a constant grant element in external borrowings of 43%; inflation will be around 3%, while growth in realprimary expenditures will range between 6 and 10%.

25

threshold of 100. And the NPV debt-to-revenue falls from 401% in 2006 to below thethreshold of 200%, in 2016.

1.50 Provided progress is sustained in normalizing the country‘s fragile situation, thecountry is likely to benefit from the HIPC initiative. Hence, these ratios are likely tobe somewhat reduced over time. This progress should result in debt sustainability andsupport the Government’s efforts to achieve its social improvement objectives and, to theextent possible, achieve the Millennium Development Goals.

Figure 1.7: Selected Debt Ratios, 2006 - 202729

40

50

60

70

80

90

100

110

120

130

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

NP

Vd

eb

t-to

-GD

P,

de

bt-

to-e

xp

ort

s

100

150

200

250

300

350

400

450

NP

Vd

eb

t-to

-exp

ort

s(%

)

NPV debt-to-GDP

NPV debt-to-exports

NPV debt-to-revenue (rt. axis)

1.51 The key recommendations arising from the analysis of this section are summarizedbelow:

The country needs to persist with its efforts to increase the tax take, by improvingcollection rates, eliminating exemptions and broadening out to the informal sector.Revenues from petroleum and cocoa/coffee could be increased.

Overspending in certain politically sensitive headings (e.g., certain ministerialdesignations, “institutions”, “other goods and services”) needs to be curtailed. On thecontrary, poverty-relevant ministries, such as the Ministries of Health and Agriculture,need to timely receive funds so that they can execute their budgets fully; and execution ofnon-wage recurrent expenditures needs to rise from their current low levels.

It is essential that the quarterly budget execution reports continue to be published and tobe improved upon. More information needs to be available on vaguely stated headings

29 World Bank/IMF, Debt Sustainability Analysis, 2007 (September 13).

26

such as “Institutions” so as to build public confidence that the funds are being well spent.Posting this information on a web site would help build support for the Government’spoverty reduction strategy.

D. ALLOCATION OF RESOURCES BY SECTOR AND

BY ECONOMIC CLASSIFICATION

Allocation of Resources by Sector

1.52 The government spending items that are usually considered to have the biggestimpact on poverty are those on education, health, agriculture and economicinfrastructure (essentially roads, water and sanitation). This is because the vastmajority of the population, including rural people, are in a position to benefit from thissort of spending, and because these items often have direct impacts on the productivity ofindividuals. The review did not consider the expenditures incurred in the areas of waterand sanitation.

Figure 1.8: Poverty-relevant Spending, by Ministry, as a Percentage ofTotal Expenditures, 1999 - 200830

0

5

10

15

20

25

30

99 '00 '01 '02 '03 '04 '05 '06 '07 '08

%of

tota

lexpenditure

sle

ss

pu

blic

debt

Ec. Infr. Educ.

Health Agric.

1.53 In the case of Côte d'Ivoire, expenditures on education, agriculture and health havesignificantly declined since 2000 (Figure 1.8 above). As a percentage of total public(current and investment) spending,31 education spending fell from 28% in 2000 to 23% in2007 (and falls further to 21% in the 2008 budget). The budget for agriculture fell from4.6% in 1999 to 1.5% in 2007. Health spending fell from 9% in 1999 to 6.7% in 2007,and is expected to fall further to 6.4% in the 2008 budget. The only item among the fourthat increased was economic infrastructure, whose budget share increased from 2% in

30 See documents printed from the SIGFIP by the staff of the Ministry of Economy and Finance, January 2008.These are actual expenditures for all the years, except 2008 where the budget is given. The public debt due issubtracted from total expenditures for the reasons given in footnote 32 (p. 48).31 Actual as a percentage of total government spending minus public debt due. This is because during most of thecrisis years the bulk of the public debt was not serviced and arrears accumulated. Since data on these flows was notreadily available, the easiest solution was to omit all service due.

27

1999 to more than 5% in 2002. It subsequently fell to 4.3% by 2007, but is expected toincrease to 6.5% in 2008.

Figure 1.9: Education Spending and Gross National Income perCapita in 2001, African Countries32

1.54 Current total education spending in Côte d’Ivoire’s is somewhat below from thelevel in the average African country at its level of development (Figure 1.9). In 2001,Côte d'Ivoire spent 4.4% of its GDP to education, the same as other African countrieswith a GDP per capita GDP of $630. As of 2007, Côte d'Ivoire education spending hadfallen back to 4.2% of GDP despite the country’s increase in wealth. At a GDP per capitaof $1,053, the average African country was spending about 5% of GDP on education.

1.55 Educational outcomes in Côte d'Ivoire, predictably, are well behind other countriesat similar levels of wealth (Figure 1.10). Note that the figure used for Côte d’Ivoire isbased on data for 2000, since reliable figures for 2005 were not available. Given thecrisis, and the collapse of schooling in the Centre and North of the country, the overallnet enrolment rates in 2005 is likely to be considerably lower. Côte d'Ivoire, at 61% netenrolment for boys in primary school, is doing worse than other poorer countries such asMalawi (92%), Rwanda (72%), Zambia (89%) and Senegal (70%). Inasmuch as thenumber used for Côte d'Ivoire is pre-crisis, the country’s poor performance is attributablenot to the crisis, but to low investments or to inefficient use of funds in the years anddecades leading up to the year 2000. The situation probably worsened with the closingdown of schools in the Centre, North and West (CNW) zones and the needs increased.

32 See World Bank, African Development Indicators 2003. Expenditure on education refers to public educationexpenditure only (Table 13-21, p. 329), omitting private spending, averaged over the years 1993 to 1998. Côted’Ivoire is indicated by large triangles.

Malawi

Namibia

Botswana

Kenya

RCI 2007

RCI 2001

0

1

2

3

4

5

6

7

8

9

10

100 1000 10000Log of GNI per capita in 2001

Educa

tion

expenditu

res/G

DP

(%)

28

Figure 1.10: Net Enrolment Rates in Primary School(Male, sub-Saharan African Countries)33

Malawi

Rwanda

ZambiaMauritius

Sen

egal

Lesotho

RCI 2000

30

40

50

60

70

80

90

100

100 1000 10000Log of GNI per capita in 2005

Net

rate

of

en

rolm

en

to

fb

oys

inth

e

pri

ma

rysch

oo

l(%

)

1.56 Health spending in Côte d'Ivoire is unusually low when compared with otherAfrican countries at a similar level of development (Figure 1.11). Public expenditureson health in Côte d'Ivoire is about 0.9% of GDP, less than half of that in the averageAfrican country at its level of development (which is about 2.5% of GDP). Moreover, ascountries grow richer, they tend to spend proportionately more on health. But this has notbeen the case in Côte d'Ivoire, which has seen its GDP rise from about $630 in 2001 to $1,053 in 2007, but has not increased its health spending, which is still at about 0.9% ofGDP. It is to be expected that the low expenditures have contributed to the country’sparlous health outcomes. The low spending on health cannot be entirely ascribed to thepolitical crisis, which led donors to withdrawing from the country from 2000 on; becausepublic spending on health before the crisis, averaged over the 1990 – 1995 period, wasonly 1.4% of GDP.34 Even this level, is well below the average of African countries at anequivalent level of development.

33 Source: World Bank, Development Data Platform, Ed Stats data set. The figure for Côte d’Ivoire is the net schoolenrolment rate in 2000, as that for 2005 was not available. For the other countries, the figure is that of 2005.34 See Table 13-11, Health Expenditure, in: World Bank, 1998. African Development Indicators, 1998/99.

29

Figure 1.11: Health Spending and Gross National Income per Capitain 2001 in Selected African Countries35

Senegal

Malawi

Ghana

Gabon

NamibiaBotswanaMauritania

RCI 2007RCI 2001

0

1

2

3

4

5

6

100 1000 10000

Log of GNI per capita in 2001

He

alth

exp

end

itu

re/G

DP

(%)

Figure 1.12: Gross National Income per Capita and Births Attended byTrained Personnel in 2001, in Selected African Countries36

35 Source: World Bank, African Development Indicators, 2003. Expenditures on health refer to public healthexpenditures only (Table 13-12, p. 320), omitting private spending, averaged over the years 1995 to 2000. Côted’Ivoire is indicated by large squares.36 Data source: World Bank, African Development Indicators 2003. Côte d’Ivoire is indicated by large circles.

SenegalGhana

Namibia

Botswana

MauritaniaMalawi

RCI 2007RCI 2001

0

20

40

60

80

100

100 1000 10000

Log of per capita GNI in 2001 .

Bir

ths

assis

ted

by

tra

ine

dh

ea

lth

wo

rke

rs(%

)

30

1.57 A consequence of the low spending is that fewer health services are offered. Ameasure of the “health effort” of the State is the percentage of births that are attended bytrained health personnel. For Côte d'Ivoire, this stood at 47% in 2001, and has notimproved since. This is also lower than the average in African countries, which was about56% (Figure 1.12). It was lower still in 2007 because at the level of GDP per capita of$1,053, the average African country had about 67% of births attended by trained healthpersonnel.

1.58 Similarly, the population per hospital bed in Côte d'Ivoire is higher than theAfrican average. As of 2001, Côte d’Ivoire had 1,232 citizens per hospital bed, while theAfrican average at that level of national wealth was 774 (Figure 1.13). As of 2007, Côted'Ivoire had more citizens, but no more hospital beds so the situation had, if anything,deteriorated, while the African average at Côte d’Ivoire’s now higher level of wealth had610.

Figure 1.13: Per Capita Gross National Income and Population per Hospital Bed in2001, in Selected African Countries

CameroonCape Verde

Sao Tome Gabon

GhanaGhanaMalawi

Cote d'Ivoire

100

1000

10000

100 1000 10000

Log of per capita GNI in 2001

Pop

ula

tio

np

er

ho

spita

lb

ed

(lin

e)

1.59 It should be noted that spending devoted to the fight against HIV/AIDS hasgradually increased. Total expenditures by the Ministry for the Fight Against AIDS wasat the low level of CFAF 0.9 billion in 1999, but had increased to CFAF 3.1 billion in2007, and a budgeted CFAF 3.4 billion in 2008.37 Given the considerable donors’resources to support the HIV control programs, special attention should be paid toeffective mobilization and utilization of these funds to maintain a low prevalence level.

1.60 The pressure on the recurrent account curtailed the road maintenance andrehabilitation efforts of the Ministry of Economic Infrastructure. In the 1990s, about

37 See document on Budget trends by ministry, 2002-2007 (January 24, 2008).

31

200 kilometers of roads were built each year; this fell below 20 kilometers per year after2000; about 30,000 kilometers of the country’s 82,000 kilometers of road are seriouslydegraded and another 20,000 kilometers are at risk of closure.

Allocation of Resources by Economic Category

1.61 The political crisis in Côte d'Ivoire led to over-spending on personnel and under-spending on other recurrent expenditures and investment. Expenditures on personnelin 2007 stood at 43% of tax revenues, exceeding the WAEMU convergence criterion of35%. Viewed in internationally comparative terms, however, expenditure on personnel of6.7% of GDP is not high. Côte d'Ivoire was slightly below the African average (Figure1.14) and was also slightly below the average for several less developed countries (Figure1.15). Obviously, it does not follow that this is the time for profligacy as far as hiring isconcerned, particularly in the absence of a strong increase in revenues. Quite the oppositeis true: service delivery in Côte d'Ivoire is very poor because the needed investmentshave been postponed and civil servants have not been given the non-wage recurrent fundsthat they need in order to deliver services. In order for the Government to improve thequality and quantity of services - education, health, roads and agriculture - it will need torestrain wage growth and hiring, while increasing investment and non- wage recurrentexpenditures.

Figure 1.14: Government Personnel Costs as a Percentage of GDP, inSelected African Countries in 200538

Kenya

Nigeria

Algeria

EthiopiaS. Africa

Lesotho

D.R. Congo

Botswana

RCI 2005

0

5

10

15

20

100 1000 10000


Sta

ffexpenditure

/GD

Pin

2005

(%)

38 World Bank, Data Development Platform.

32

Figure 1.15: Government Personnel Costs as a Percentage of GDP, for aSelection of Less Developed Countries, 200539

Bangladesh

Ghana

Bosnia

Seychelles

Honduras

Malawi

Zimbabwe

RC

I 2005

Chile0

5

10

15

20

25

100 1000 10000


Sta

ffE

xpenditure

/GD

Pin

2005

(%)

1.62 It is important to analyze the economic classification of spending by the largestministries with a direct impact on poverty. Table 1.13 summarizes the 1999 and 2007major categories of spending in the ministries responsible for education, health andeconomic infrastructure.

Table 1.13: Balance of Major Categories of Spending for Education, Health andInfrastructure, 1999 and 2007 (% of total)

Ministry 1999 2007 Ministry 1999 2007National Education 100 100 Health 100 100

Personnel 64.9 80.3 Personnel 56.3 48.1Other currentexpenditure 27.0 15.6

Other current expenditure31.3 33.8

Investment 8.1 4.2 Investment 12.5 18.2Tertiary Education 100 100 Economic Infrastructure 100 100

Personnel 38.0 32.1 Personnel 25.5 3.9Other currentexpenditure 51.6 63.0

Other current expenditure16.6 11.8

Investment 10.4 4.9 Investment 57.9 84.3Source: Printouts from SIGFIP, from the Ministry of Economy and Finance, January 2008. TheMinistry of Technical Education and Professional Training is omitted because its spending is dwarfedby the other two education ministries. Note that these data omit a) off-budget expenditures, e.g.financed by donors without going through the Government apparatus and b) expenditures on the basisof advances, which are not yet reflected by the SIGFIP.

1.63 The first trend that stands out, in the Ministry of National Education is thatinvestment dwindled from 8% to 4% of the total between 1999 and 2007, and other

39 World Bank, Data Development Platform. Data are presented for all the less developed countries for which bothdata items were available.

33

current expenditures fell from 27% of the total in 1999 to 16% in 2007.Correspondingly, personnel costs rose, from 65% in 1999 to 80% in 2007. Most of thisdramatic shift in favor of personnel expenditures occurred between 1999 and 2001, as canbe seen in Figure 1.16. Moreover, at the beginning of the crisis, the teachers fled from theconflict zones. Some of them were redeployed and, therefore, taught courses, while,others remained without doing anything, contributing to the deterioration of the sector’sresults.

Figure 1.16: Ministry of National Education: Percentage of Total Expendituresby Economic Classification, 1999 - 200840

0%

20%

40%

60%

80%

100%

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Pe

rce

nta

ge

ofT

ota

lE

xp

en

ditu

res

Investment

G&S and others

Personnel

1.64 The other key finding is that for recurrent expenditure-intensive activities, thesituation worsened. In the area of road maintenance, in particular, the country’sinfrastructure seriously worsened. Table 1.13 clearly indicates that in the Ministry ofEconomic Infrastructure, investment spending rose sharply, personnel costs actually fell(in nominal terms) and other recurrent expenditures fell sharply, between 1999 and 2007.Most of the change occurred between 1999 and 2001 (see Figure 1.17). This marked shiftwas due to the financial squeeze (hence the cuts in personnel and recruitmentexpenditures), while at the same time certain large projects were kept afloat, particularlythose in port facilities.

40 Source: Printouts from the SIGFIP, from the Ministry of Economy and Finance, January 28, 2008. The figures for1999 to 2007 are actuals and those for 2008 are budgets.

34

Figure 1.17: Ministry of Economic Infrastructure: Percentage of Total Expenditures,by Economic Classification, 1999 - 200841

0%

20%

40%

60%

80%

100%

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Perc

enta

ge

Tota

lExpenditu

res

Personnel G&S and others

Investment

Medium and Long-term Outlook

1.65 Only two of the Millennium Development Goals are on track: maternal health andHIV/AIDS (Table 1.14). Progress towards achieving five out of seven MDGs – thoserelating to hunger, primary education, gender equality, infant mortality and access toimproved water sources – are behind schedule.

1.66 Discussions with the three ministries did not turn up any realistic medium-termstrategies or computations linking financial inputs with sectoral outputs andoutcomes. Hence, it is not possible to say much about the absorption capacity andsustainability at the present time. In the case of education, work is under way to preparedetailed funding and output scenarios for the Education for All Initiative. The only fullycosted medium-term strategy, to come to light was the National Development StrategyBased on the Achievement of the MDGs, Version 4 (November 2007, RCI and UNO;abbreviated as SNDBROMD). The projections are deliberately optimistic because theyseek to determine, using a complex model of inputs and outputs, the spending needed toachieve the Millennium Development Goals by 2015.

41 Source: printouts from the SIGFIP from the Ministry of the Economy and Finance, 28 January 2008. The figuresfor 1999 - 2007 are actuals, and those for 2008 are budgets.

35

Table 1.14: Progress Towards the KeyMillennium Development Goals as of 2005

Selected goals and indicators 1990 1995 2000-01 2005 Assessment

Goal 1: Halve the proportion of people suffering from hunger andextreme povertyIndicators:Undernourished (percent of population)Population with a daily income of less than $1

1832

N.A.N.A.

15 2

N.A.N.A.43

Far behind 1/

Slipping backGoal 2: Achieve universal primary education.Indicators:Net primary enrolment ratio (percent)Children reaching grade t5

4773

5375

6491 3/

56 12/

88 15/Slipping backSlipping back

Goal 3: Eliminate gender disparity in education.Indicators:Female net primary enrolment ratio as percent of malesFemale net secondary enrolment as percent of males

N.A.N.A.

N.A.N.A.

75N.A.

88 13/

80 14/Far behindFar behind

Goal 4: Reduce under -5 and infant mortality rate by 2/3Indicator: Under-5 mortality rate (per 1,000 live births) 155 165 175 195 5/ Slipping backGoal 5: Improve maternal healthIndicator: Reduce maternal mortality rate by ¾ N.A. 1,200 690 6/ 543 16/ On trackGoal 6: Combat HIV/AIDS, malaria and other diseasesIndicator: Adults (percent age 15 - 49 years) living with HIV/AIDS N.A. 9.8 4/ 9.7 4.7 7/ On trackGoal 7: Halve the proportion of people without access to betterwater sources.Indicator: Population without sustainable access to improved watersources (%)

34 8/ 19 9/ 18 10/ 24 11/ Slipping back

1/ Since the 2002-2007 crisis, malnutrition has likely increased but no nationally representative survey data are available.2/ 1998-2000. 3/ 1999-2000. 4/ 1994.5/ Data from 2005, from WHO, Mortality Fact Sheet 2006(http://www.who.int/whosis/mort/profiles/mort_afro_civ_cotedivoire.pdf), in turn from the DHS for 2004. Note that the figuregiven in RCI, National Strategy...MDGs (November 2007) has the figure of 125 per 1000, but the source for this is not stated andthe reduction appears to be very large since 2001, during a time when the economy was operating poorly so it seems that theremay be a problem of comparability across years. Hence the WHO figure of 195 is retained6/ Data from 2000, from the WHO, Mortality Fact Sheet 2006, in turn from the World Health Statistics.7/ 4.7% from RCI, National Strategy ... MDGs (November 2007), p. 26. The figure of 4.7% is also given in Results from the 2005Côte d'Ivoire Indicator Survey on AIDS (EIS-CI) from the DHS website site http://www.measuredhs.com. Note that there is also afigure of 7.1% from UNICEF at http://www.unicef.org/infobycountry/cotedivoire_statistics.html .8/ Data from 1988, from WHO/ /UNICEF Joint Monitoring Programme for Water Supply and Sanitation: Coverage Estimates:Improved Drinking Water: Côte d’Ivoire (June 2006), available at wssinfo.org. In turn from World Bank LSMS of 1988.9/ 1994 data, from the 1994 DHS, as reported in WHO/UNICEF (loc. cit.)10/ 2000 data, from the Multiple Indicator Cluster Survey (MICS) of 2000, quoted by WHO/UNICEF (loc. cit.).11/ 24%: from RCI, National Development Strategy Based on the Achievement of the MDGs (November 2007), p. 26. Note thebetter figures for early dates: 8% (in 2003), from WHS 2003 survey on water, health and sanitation, quoted by WHO/ UNICEF(loc. cit.), or 16% (in 2004), quoted by UNICEF at http://www.unicef.org/infobycountry/cotedivoire_statistics.html .12/ Net primary enrolment ratio: from RCI, National Strategy ... MDGs (Nov. 2007). Note that UNICEF has a figure of 56%(average for females (50%) and males (62%)).13/ Female-male net primary enrolment ratio: from RCI, National Strategy ... MDGs (November 2007). Note that UNICEF (athttp://www.unicef.org/infobycountry/cotedivoire_statistics.html ) has: females 50%, males: 62%, giving a ratio of 81% for theperiod 2000-2005.14/ Female-male net secondary enrolment ratio: from UNICEF at http://www.unicef.org/infobycountry/cotedivoire_statistics.html.referring to the period 1996-2005. Females: 16%, males: 20%.15/ Children reaching grade 5: from UNICEF: at http://www.unicef.org/infobycountry/cotedivoire_statistics.html. Referring to theperiod 2000-2004.16/ Maternal mortality: from RCI, National Strategies ... MDGs (November 2007), p. 26.Source: Unless otherwise specified, Human Development Report, 2003, UNDP; extracted from the country tables. The tablesummarizes the analysis of progress towards goals for 2015 based of linear interpolation of trends in the 1990s.

1.67 Unfortunately, the approach described above yields rather little by way of usableinputs and financial estimations. Consider, for example, the projected financial

36

requirements for 2007 for education, health and roads (see Table 1.15). The projectedspending for education is CFAF 369 million, somewhat less than the estimated actualexpenditures of CFAF 409 million. But the growth rate of expenditures on educationrepresents a considerable 18.6% per year for eight years, which is probably much morethan could feasibly occur. In health and roads the requirements projected for 2007 areway in excess of current spending levels: CFAF 308 billion in 2007 for health, when theactual is an estimated CFAF 83 million; and CFAF 475 billion in roads alone for 2007when, the actual for all economic infrastructure is an estimated CFAF 87 billion.

Table 1.15: Projected Financial Requirements for Achieving theMillennium Development Goals

Projections by SNDBROMD (in CFAFbillion)

Actual expenditures(estimate; CFAF

billions)a

2007 2015 Growth (%) 2007

Education (prim + sec + ter) 369 1447 18.6 409

Health 308 601 8.7 83

Roads 475 483 0.2 87

Sub-total 1152 2531 10.3 579a Estimate by grossing up the actual spending figures in the budget execution report (Table 1.10).Sources: projections from the National Development Strategy Based on the Achievement of the MDGs, Version4 (November 2007, RCI and UNO; abbreviated as SNDBROMD).

1.68 The Government is aware that the projections of the SNDBROMD are unrealistic,and work is under way to develop two further scenarios: one, “current situation”, andanother somewhere between the current situation and the SNDBROMD projections.

1.69 Preparation of the full poverty reduction strategy is underway and should becompleted around September 2008. A preliminary PRSP (Poverty Reduction StrategicPaper) was prepared in 2002, but was not pursued further owing to the political crisis.After the 2007 peace accords, the process was restarted. However, there has been somedelay in resuming the work, owing to a lack of budgetary funding. A survey on 12,500households was launched in February 2008, and provisional results are expected in May.Work has started on a draft document covering the period 2002 - 2007, giving a profile ofpoverty. The final PRSP will be prepared between April and September 2008, makinguse of the findings of the household survey. The strategy should integrate a plan forincreasing and reporting on poverty related expenditures.

1.70 The medium term macro-economic framework of the PRSP will be based on thatused by the Ministry of Economy and Finance. This framework has been agreed uponwith the IMF and the World Bank and forms the basis of donors’ reengagement tosupport the country’s reconstruction efforts. The simulations linking the probablefinancing from Government and donors with likely outputs (schooling) and outcomes(poverty, infant mortality and the like) will be done in a way consistent with the medium-term macroeconomic framework.

37

1.71 The Government has expressed its confidence that monitoring and transparencywith respect to poverty-relevant or “priority” spending would be a simple matter.This assessment is associated with the capacity of the SIGFIP system to issue complexreports following any given breakdown for any year from 1999 onwards, including thecurrent year. Indeed, it is impressive to note how quickly and easily complex reports canbe issued from the system.

1.72 But the SIGFIP is as yet inadequate to the task. As noted above, it does not reflectspending on the basis of advances, requiring the use of a parallel system to reportaccurately and it seriously under-reports foreign funded spending. Arrangements willneed to be made for tracking of priority or poverty-related spending.

1.73 There are two different sets of expenditure priorities in the 2007 budget.42 First,priority actions (Annex 6, p. 20) which cover 40% of the budget. Second, priority sectors(Annex 8, p. 29) which cover 64% of the budget. The documents do not cite the criteriaused to determine which items should be considered a priority. For instance, a criterionmight be, “items that have immediate and large impact on the productivity of the majorityof the population.” Nor do the documents state the consequences of being classified as“priority.” For instance, it might relate to the protection of the specific categories ofexpenditure in nominal terms, or in percentage terms, in the event of revenue shortfall.There is no follow-up to these lists of priorities in the budget execution report for January- September 2007. Discussions with the authorities indicated that the priorities mightsometimes relate only to priorities within a particular budget year, and that this protectionof certain expenditures in nominal terms or percentage terms is not guaranteed. At anyrate, there seems to be a wide margin of discretion in the way the “priorities” should betreated.

1.74 The key recommendations arising from the analysis of resource allocation may besummarized as follows:

The shares of health and education in the budget should be raised gradually to their pre-crisis level, and the overall poverty-relevant spending be increased to a level consistentwith the level of development of the country. Efforts should be made particularly with thehealth sector, whose outputs are lagging well behind those of the country’s peers. Asthese increases in expenditure are executed, care should be taken not to exceed thecountry’s absorption capacity.

It is further recommended that the expenditures of health and infrastructure be reviewedin detail in order to determine the ways of improving efficiency of spending and avoidproblems of absorptive capacity. (In the case of education, the Government is alreadyworking in collaboration with the World Bank to prepare costed projections for the“Education for All” initiative).

Spending projections of the SNDBROMD should be made more realistic, if they are toserve as a useful planning tool and to serve as a criterion for budgetary allocations in the

42 Presentation of the 2007 Draft Budget to Cabinet.

38

medium-term macro-economic framework. They should take into account the likely:fiscal revenues, pace of resumption of donor assistance and GDP growth rates.

In view of the inadequacy of the SIGFIP reporting, the tracking of priority or povertyrelated spending – including spending executed with advances and executed outside ofthe budget – should be made the object of a specific plan, to be included in the finalPoverty Reduction Strategy Paper.

In order to be meaningful, the word priority should be clearly defined and stated in thebudget document; and there should be only one set of priorities, which should beprojected in the budget document and reported on in the budget execution report. Itshould be noted that one of the conditions for a possible future HIPC assistance is that thecountry effectively defines, increases and efficiently monitors its poverty reduction-related expenditures. The priority areas should concern less than 50% of the budget;otherwise, it is unlikely that they could be protected, in any way, in the event of a budgetshortfall. It would also be advisable to specify only Government-funded items aspriorities (excluding anything financed with donor resources) because this enables theGovernment to have complete control over the achievement of the needed expenditures.It is suggested, furthermore, that the priority actions or expenditures focus primarily onitems of a medium-term nature, so that the priorities extend over several years andprogress in achieving them can be monitored.

E. OPERATIONAL EFFICIENCY AND EFFECTIVENESS OF PUBLIC INVESTMENTS

Public Investment Projects

1.75 The procedures for selection of investment projects follow, in theory, the standardsequence. The Government’s overall strategy is defined (March) with its correspondingbudgetary framework. Ministries submit lists of projects (May) and donors are consultedon their planned contributions to investment. A coherent programme is developed usingthese inputs (June) which are evaluated following a set of criteria using a computerprogram entitled Synapse. This program is approved by the Cabinet (in July). Detailedbudgeting follows (August) and the Program of Public Investment (Programmed’Investissements Publics - PIP) is published in October. The first year of the rollingthree-year PIP is supposed to coincide with the investment account of the budget for theforthcoming year.

1.76 The selection criteria include notably: (a) priority sectors (health, education, basicinfrastructure, decentralization, security and defense, administration of the territory,assistance to production sectors, strengthening the of the capacity of the publicadministration); (b) under execution (viz. project are not stopped at mid-stream); (c)new projects financed by loan or grant and which have already been signed; (d) newprojects to be financed exclusively by internal resources and for which feasibilitystudies have already been done.43 In addition, in the future the contribution to povertyreduction will be taken into account using the PRSP. The list of priority sectors in (a)above is long and covers about 60% of the budget. The intention in selecting these five

43 See Planning Department, 2007. Public Investment Program 2007-2009, Volume 1, page 24.

39

priority sectors was in turn based on the following five objectives of: (i) reducingpoverty; (ii) completing the decentralization process; (iii) securing peace and security;(iv) starting the national reconstruction and pursuing the development of economicinfrastructure; and (v) diversifying the economic resources of the State and supporting theagriculture, education and health sectors.44

1.77 In reality, the preparation of the PIP is not as smooth or as linear as indicatedabove. The PIP for the period 2007 - 2009 was published late, in July 2007, because thebudget itself was determined only at that time. The PIP of 2008 – 2010 will be publishedafter the 2008 budget has been approved. The next PIP, which will cover 2009-2013, isscheduled for completion by mid-2008. In principle, the budget should correspond to thefirst year of the PIP. This practice is not always respected and there is still a time lagbetween the budget and the PIP. It is, therefore, necessary to strengthen the integrationbetween these two instruments by eliminating the differences and notably by ensuring acoordinated approval.

1.78 A defect of the selection procedure is that there has been no practice of preparing amedium-term expenditure framework. Hence, the second and third year of eachsuccessive PIP lacks the degree of predictability or stability they would have had in thepresence of a rolling medium-term financial framework. In other words, it is not clearwhat influence the second year of the PIP of years T to T+2 could have on the first yearof the PIP of years T+1 to T+3. For, if the budget is formulated de novo each yearwithout reference to the past medium-term financial frameworks, there is no reason whythe investment side of the budget for the de novo should not also be changed.

1.79 A further defect of the PIP process is that the PIP is not made available to a broadpublic. The PIP document is available at the relevant Government departments but itwould have more impact if it were also posted on the Internet.

1.80 It is recommended that a medium-term expenditure framework be developed assoon as possible, and that this form the mainstay of the public investment program.The MTEF should encourage ministries to examine the trade-offs between current andcapital spending and between sectors.

Challenges of Integrating Donor-financed Projects in the SIGFIP, and Interim Measures

1.81 With the installation of the SIGFIP (Integrated Public Finance ManagementSystem) in 1999, the Government laid the foundation for greater control ofexpenditures. It became possible to monitor the execution of expenditures in real timeand it was easier to issue accurate reports. These advantages, however, were offset by aseries of problems with externally financed projects which affected all donor efforts. Thisresulted in a sharp drop in disbursement rates. This is illustrated in Figure 1.18 whichshows disbursement rates in World Bank projects falling sharply in 1999, to only 10%,well below the Africa average of 22%. Disbursement rates remained low until 2002.

44 op. cit., p. 33.

40

1.82 In response to the significant reduction in disbursements, the Government allowedthe Bank to execute certain projects outside the SIGFIP circuit (advance and capitaltransfer systems). Accordingly, disbursement rates rose sharply in 2003 and 2004. Owingto non-payment of debt service, disbursements were frozen in June 2004.

41

Figure 1.18: Levels of Disbursements of World Bank Projects, forAfrica Region and for Côte d'Ivoire, 1997-2007

Cote d'Ivoire

Africa region

0

5

10

15

20

25

30

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Dis

burs

em

ents

(%)

1.83 Over the years, the expenditure circuit has been improved but problems persist.This is particularly the case of slow approvals, budget line errors and the unavailability ofGovernment counterpart funds. The key problems are described in more detail below.

The DAAF is responsible for all the expenditures and projects of the relevant ministry.This concentration of tasks becomes a bottleneck, particularly since approvals cannot bemade in the officers’ absence.

Frequently, the budget allocations need to be changed. To effect the change anAmendment Order has to be approved by the authorities. This signature sometimes takestwo to three months, during which the project disbursements are held up.

The poor understanding of the donors’ procedures by Government officials monitoringfinancial proceedings is frequently a source of denials of requests, thus causing delays.

Delays occur when the Government’s counterpart funds (usually about 20%) areunavailable due to late adoption of the budget.

The lack of standardization of approvals is problematic. The requirements for approval(documents or signatures) often differ from time to time and from officer to officer. Thiscan result in unnecessary delays. The scope for discretion afforded to individual officersis exactly what the SIGFIP was intended to combat.

1.84 The Government has sought to improve the performance of the SIGFIP. It has,among other things, provided training for the DAAFs and other actors in the expenditurecircuit and gave the Ministry of Economy and Finance a say in the appointment of theDAAFs so as to avoid over-frequent changes. In addition, new modules have beendeveloped, such as the SIGMAP, for better management of public tenders. As time haspassed, the operators of the SIGFIP have acquired greater familiarity with the system andthe latter has been gradually decentralized to the regions.

42

1.85 However, much remains to be done. In the short-term, the Government has agreed withthe Bank that four projects which had been suspended, and which need to be completedwithin two years, should be executed through the simplified capital transfer procedures.

1.86 Moreover, over the medium-term, several other recommendations could be usefullyimplemented:

A thorough examination should be done of the SIGFIP system to develop proposalswhich will deliver durable improvements in the speed of execution of projects, withoutcircumventing the traceability and reporting capabilities of the SIGFIP system.

Budgetary modifications should be approved more quickly.

The arrangements at the DAAF level could be improved by further training of staff andby (temporary) delegation of powers.

In order to avoid the bottlenecks at the DAAF level, project management units could begiven authorization to enter in data themselves, instead of being dependent on DAAFstaff for data entry.

Further training is needed to familiarize the Government officers with the financialprocedures of the donors’ systems.

A single manual or form should be established detailing the documentary evidence andsignatures required at each step.

F. CONCLUSIONS AND RECOMMENDATIONS

1.87 The authorities are aware of the country’s post-conflict needs and are seeking torespond to the challenges presented. Côte d’Ivoire exhibits the standard financialfeatures of countries emerging from conflict. External debt arrears are large and publicdebt is unsustainable; revenues are low; Government employment is excessive; personnelcosts displace investment and other current expenditures; resources are diverted awayfrom poverty-reducing sectors; there are wide divergences between planned and actualspending; and governance has seriously deteriorated. Not surprisingly, given theselimitations, the delivery of services has suffered and the results have deteriorated. Theauthorities are striving to deal with these challenges and the strategy of the post-conflictreconstruction program envisages actions which, if implemented would have a favorableimpact on the country’s living conditions. This chapter has sought to understand theseproblems in more detail, and propose ways forward. The following is a brief summary ofthe main conclusions and recommendations.

1.88 Expenditure reporting should be substantially improved. Two aspects need specialattention: spending on the basis of treasury advances, and externally financedspending. The financial management system SIGFIP under-reports expenditures by aconsiderable margin, because it does not reflect spending on the basis of advances. Thisby-passes compliance with procurement procedures, and affects global transparency andaccountability for the use of public funds. The “regularization” of advances for 2007 wasfar from complete at the beginning of 2008. In any case, the on-line SIGFIP system doesnot yet reflect the “regularizations” effected, so that the budget execution report for

43

September 2007 had to be compiled using a parallel system. The “first-best” solution is toreduce advances to a minimum, and the authorities are pursuing this, but in addition therewill be a need for complete “regularization” of all advances, as well as a link-up betweenthe regularized advances and the on-line SIGFIP, so that the quarterly budget executionreports can be issued directly from the SIGFIP without resort to a parallel system.

1.89 The authorities intend to reduce advances to the minimum. In January 2008, theMinister of Economy and Finance issued instructions severely limiting access toadvances and also required any ministry wishing to make changes in specific spendinglines to show how the changes would be financed out of the requesting ministry’s ownbudget. Moreover, the 2008 budget was issued in advance of the budget year (inDecember 2007), for the first time since the start of the crisis, and this alone is expectedto limit the need for and access to advances. In agreement with the Fund and the Bank,the Ministry of Economy and Finance has capped budget advances (barring personnel,debt service, externally financed expenditures and régies d’avances) to CFAF 120 billion(15% of accumulated current expenditures excluding personnel, debt service, cashadvances and externally financed expenditures).

1.90 Coverage of externally financed spending in the budget reports should be mademore comprehensive. The other area of expenditure reporting in need of an overhaul isthe capture of spending executed outside the Government system. Due to the limitedcapture of data from donors, the CGAF under-estimated recurrent expenditures by 7%and investment spending by 43% in 2005. Much could be achieved by introducing a“bridge table” between the CGAF and the TOFE (which does reflect expenditures fundedby donor agencies) showing how the two can be reconciled. In addition, in the future, thebudget execution reports should reflect donor-funded spending.

1.91 Budget credibility is weak. During 2007, there were substantial deviations betweenplanned and actual spending. Overspending was particularly evident in the Presidencyand certain other headings which sometimes also included transfers to the Presidency.The counterpart of this overspending is that several poverty-relevant ministries did nothave the necessary resources to deliver their services adequately - particularly agriculture,health, education, economic infrastructure - where execution of the investment budgetand budget for non-personnel items was low. For instance, the agriculture ministry wasunderspent at only 35% as of September 2007. The authorities are aware of the problemand it is expected that the instructions by the Ministry of Finance in January 2008, willlead to fewer advances and much less overspending, and hence a more efficient allocationof resources towards the delivery of services relating to poverty reduction.

1.92 Domestic resource mobilization needs to be strengthened and budgetcomprehensiveness increased. Domestic revenues were situated at around 17% to 19%of GDP for the past three years; substantially less than in other countries at a similar levelof development. The authorities are seeking various ways of increasing the take(improving tax collection, extension coverage to the informal sector and cancellingexemptions). In addition, the authorities would do well to implement the automatic priceadjustment mechanism of petroleum products, at the pump, and increase the sector’scontribution (from PETROCI) to the budget, since revenues are far below potential given

44

that oil prices are high and, therefore, quite favorable. Furthermore, to ensure budgetcomprehensiveness, there is a need to budget the quasi-fiscal levies (including those oncocoa/coffee and oil) and reduce the levies on the cocoa/coffee cumulatively, comparedto the level observed during the 2007/2008 crop season. These resources, as agreed in thecocoa/coffee sector for the 2009 budget, could, among others, be used to fund the sector’sentities operations and investments from the funds managed by these entities. In thisperspective, it is desirable to adopt and implement in a satisfactory manner a newinstitutional and regulatory framework for the cocoa/coffee sector, part of a newGovernment strategy for the sector which will be funded through the World Bank’sGovernance and Institutional Development Grant. The strategic study should, amongothers, help to conclude on the appropriateness or not of certain entities and, thereby,rationalize the use of the sector’s resources.

1.93 With the end of the crisis, poverty-relevant activities should be better funded.During the political crisis, spending on poverty-relevant activities (education, health andagriculture) fell as a proportion of all Government public spending. For instance, healthspending was 9% of total spending in 1999, and fell to 6.7%, in 2007, and it isprogrammed to fall further to 6.4% in the 2008 budget. Total public expenditures in theeducation and agriculture sectors also fell from 28% and 9%, in 2000 and 1999respectively, to 23% and 1.5% in 2007. These levels of expenditures are well below thosein countries at an equivalent level of development. The pressure on the recurrent accountalso curtailed the road maintenance efforts of the Ministry of Economic Infrastructure. Itis recommended that there be reallocation of spending in favor of these items which arekey to both the growth process and poverty reduction

1.94 Expenditures on personnel exceed the WAEMU convergence criteria. The wage billrepresents 43% of tax revenues, and is still very high compared to the other WAEMUcountries and well above the established convergence criteria (35%). Now that thecountry is at peace, efforts need to be made to increase investment spending andexpenditures on goods and services at the appropriate levels so that services can bedelivered effectively. In this regard, it is recommended that efforts be made also toprevent the large overspending in the primes de front in 2007, from becoming a standardor repeated feature.

1.95 Of the seven Millennium Development Goals, only two (maternal health andHIV/AIDS) stand a good chance of being met by 2015. The others – namelyeradication of abject poverty and hunger, primary education, gender equality, infantmortality and improved water sources - are all far behind schedule and some havedeteriorated during the crisis period. While no realistic projections are yet available tocompute the likely costs in terms of investments and recurrent spending, it is clear thatthere is a considerable backlog in the areas of education and health. It will likely beinsufficient to increase spending levels. It will probably be necessary to also improveefficiency in service delivery.

1.96 Work is under way to prepare the full poverty reduction strategy, which should becompleted around September 2008. This will be done on the basis of a large householdsurvey which will be conducted from February to April 2008. It is recommended that a

45

medium term expenditure framework be at the first order of business which shouldintegrate a plan for increasing and reporting on poverty related spending; without thisinstrument, it will be impossible to make consistent and credible projections of financialrequirements for the strategy. It is also recommended in view of the above-mentionedlacunae in expenditure reporting, that the strategy clearly identify and integrate a plan forincreasing and giving account in the quarterly reporting of poverty related expenditures.In this context, a budget classification that identifies poverty reduction expendituresshould be adopted in the short-term.

1.97 Finally, the issue of how to integrate new donor-financed projects, includingprojects funded by the Bank, with the SIGFIP needs to be addressed by theGovernment. The creation of the SIGFIP in 1999 gave the Government better controlover public expenditures. However, co-financed projects encountered enormousdifficulties because SIGFIP was not particularly adapted to the requirements of co-financed projects. Improvements were made with time but the problems have not beentotally resolved and in particular the long lags in the approval cycle. At the time of thesuspension of disbursements, in 2004, Côte d'Ivoire had one of the lowest rates ofexecution of externally-financed projects in the region. Instruments called “régiesd’avances” were put in place in 2004 for emergency projects and produced appreciableresults.

1.98 While permanent solutions are being identified to make the SIGFIP moreresponsive, transitional arrangements have been agreed upon with the Government.With the reactivation of the World Bank’s program in Côte d'Ivoire, the suspendedprojects will be restructured in order to respond to urgent needs created by the crisis. Theperiod of execution of these projects will not exceed 24 months. This will be anenormous challenge which the SIGFIP, with its weaknesses and delays will not be able tomeet. Hence, the Bank and the Ministry of Economy and Finance have agreed that thesefour projects will be executed in Capital transfer. During this transitional period, it isimportant that the authorities work on measures to make the SIGFIP more efficient andquick, and better adapted to externally-financed arrangements. In this sense, the approvalcycle in the SIGFIP should be simplified and training provided to the Directors ofAdministrative and Financial Affairs (DAAF), notably in the donors’ procedures.

1.99 The recommendations of the review are specified in the global action plan below(Table 1.16). They were finalized during the validation workshop of the review (June2008).

Table 1.16: Global Action Plan for Public Expenditures(Including the priority actions presented in the priority action plan)

Problems encountered Measures to be taken Responsible Party Technicalassistance required

(Low, Average,High)

To becompleted

before:

Domestic revenues arestill low compared to thepotential

1. Implement theautomatic adjustmentprice mechanism of

MEF L Dec. 2008

46


(Low, Average,High)

To becompleted

before:

petroleum products, at thepump

2. Budget the quasi-fiscallevies on coffee/cocoaand oil; reduce taxes oncocoa; and prepare aninventory and budgetrevenues collected byministries

3. Transfer completely tothe budget, dividendspaid by state-owned orpublicly participatedcompanies

MEF

MEF

L

L

2009 Budget

Immediate

Expenditure reporting ismisleading and actualexpenditures deviatesignificantly fromplanned expenditures:

(a) The on-line SIGFIPdoes not report onadvances, so that thequarterly budgetexecution reports haveto be compiled using aparallel system

4. Strictly enforce the useof waivers to normalprocedures for executionof expenditure

5. Prepare an inventory ofcash advances alreadycommitted and maintainthe total volume of theseadvances at less than 15%of cumulative currentexpenditures excludingpersonnel, debt servicing,régies d’avances andexternally financedexpenditures

6. Introduce an annexmodule to report on

advances45

MEF/DGBF

MEF/DGBF

DGBF

L

L

L

Immediate

Immediate

Dec. 2008

45Annex module to be developed in ASTER or SIGFIP

47


(Low, Average,High)

To becompleted

before:

(b) Reports (SIGFIP online, quarterlyexecution reports,CGAF, TOFE) aremutually contradictoryand confusing

7. Introduce a “bridgetable” between the CGAFand the TOFE

8. Ensure that the CGAFand the SIGFIP timelyintegrate expendituresbased on treasuryadvances and externallyfinanced expenditures (asTOFE is already doing)

DGTCP/DGBF

DGTCP/DGBF

L

A

Dec. 2008

Dec. 2008

(c) Actual expendituresdeviate considerablyfrom plannedexpenditures

9. Refrain from executingexpenditures beyond thebudget envelopes

DGBF L Immediate

(d) Expenditures forpoverty reduction-related ministries arelower than their budgetallocations

10. Ensure that thepoverty reduction-relatedsectors receive theirentire budgetedallocations

DGBF/DGP/Sector Ministries

L Immediate

Budget allocations for thepoverty reduction sectors(agriculture, education,health) fell between 2000and 2008

11. Increase budgetallocations to the povertyreduction sectors

DGBF/DGP L 2008 andsubsequent

years

Expenditures devoted tohealth are far below theirhistorical level andlargely below the averagefor Africa, and healthresults are of poor qualityor deteriorating

12. Increase budgetallocations to the healthsector

DGBF/DGP L 2008 andsubsequent

years

Côte d'Ivoire has nodetailed, time-bound,realistic and financedpoverty reductionprogram

13. Finalize and cost thefull poverty reductionstrategy

MEMPD/MEF andSector Ministries

A Sept. 2008

Though based on multi-year macro-economichypotheses, the budget islimited to one year andthere is no quantifiedsector strategy

14. Adopt a road map toimplement the Medium-Term ExpenditureFramework (MTEF) anddevelop sector plans

MEF/DGBF andSector Ministries

H Mid-2009

Disbursement rates forco-financed projects were

15. Exceptionally allowdonors, in the short-term,to resort to accelerated

MEF L 2008-2009

48


(Low, Average,High)

To becompleted

before:

low due to the length andslow pace of approval ofthe expenditure chain’sactors

disbursements (as, forexample, in capitaltransfer)

16. Simplify the approvalcycle of expenditures,provide further training toDAAFs (notably on thedonors procedures)

DGBFH

2008 andsubsequent

years

49

2. REVIEW OF THE PUBLIC FINANCIAL MANAGEMENT SYSTEM

A. CONTEXT OF THE REVIEW

2.1 The framework for preparation, execution and control of the budget exercise is adetermining factor for the effective conduct and appreciation of the quality ofgovernment policy. The weaknesses identified by this review constitute challenges andcall for corrective measures, which will require the Government’s sustained political willover the coming years. In certain areas of the public financial management systemsubstantial progress has been made in recent years; however, in other areas theperformance has been less remarkable. The detailed results of the joint assessment arepresented in Volume II of this report which provides the “Public Financial ManagementPerformance Report” of this PEMFAR review. This joint assessment was conducted inaccordance with the PEFA methodology, which has 31 indicators covering the followingaspects:

Credibility of the budget, Comprehensiveness and transparency of the budget, Policy-based budgeting, Predictability and control in budget execution Accounting, recording and reporting, External scrutiny and audit Donor practices.

2.2 The recommendations of the review will be used in the design and preparation ofthe Government’s action plan for improving the public financial managementsystem. In the coming years, the progress made will be assessed taking into account thebaseline situation resulting from this joint assessment. To facilitate the development ofthe Government’s action plan, this chapter presents, after the general overview, thecurrent situation of the public financial management system, in terms of its strengths andweaknesses, indicates the risks associated with the weaknesses identified andrecommends corrective actions. A series of Annexes are attached to this report,comprising: (i) the normative calendar of the budget preparation (Annex 4), the stages ofthe normal procedure of expenditures (Annex 5), a statistical control table of theFinancial Controller for the fiscal year 2006 (Annex 6), and the description of thecomputer systems (Annex 7).

B. GENERAL OVERVIEW

2.3 Globally, the public financial management system is below average.46 Generally,while in recent years Côte d’Ivoire has made significant progress, there are still a goodnumber of weaknesses in its public financial management system. Table 2.1 belowpresents the summary of scores assigned for the 31 indicators of the PEFA assessment.

46 Taking C as average performance, 10 indicators of the PEFA system among the 28 under control by theGovernment are at this level and above.

50

Volume II “Public Financial Management Performance Report” provides a detailedexplanation of the assessment of each PEFA indicator.

Table 2.1: Summary of PEFA Scores

Indicators on the Performance of Public Financial ManagementScoringmethod

ScoresbycomponentOverallScore

i ii iii iv

A. PFM OUT-TURNS: Credibility of the Budget

PI-1 Aggregate expenditure out-turn compared to original approved budget M1 NS

PI-2 Composition of expenditure out-turn compared to original approved budget M1 NS

PI-3 Aggregate revenue out-turn compared to original approved budget M1 B

PI-4 Stock and monitoring of expenditure payment arrears M1 D B D+

B. CROSS-CUTTING SPECIFICITIES: Comprehensiveness and TransparencyPI-5 Classification of the budget M1 B

PI-6 Comprehensiveness of information included in budget documentation M1 C

PI-7 Extent of unreported government operations M1 NS NS NS

PI-8 Transparency of inter-governmental fiscal relations M2 D C D D+

PI-9 Oversight of aggregate fiscal risk from other public sector entities M1 C C C

PI-10 Public access to key fiscal information M1 C▲

C. BUDGET CYCLE

C(i) Policy-based budgeting

PI-11 Orderliness and participation in the annual budget process M2 D▲ D D D▲

PI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting M2 D D D C D

C(ii) Predictability and Control in Budget Execution

PI-13 Transparency of taxpayer obligations and liabilities M2 C A D C+

PI-14 Effectiveness of measures for taxpayer registration and tax assessment M2 C B C C+

PI-15 Effectiveness in collection of tax payments M1 D A A D+

PI-16 Predictability in the availability of funds for commitment of expenditures M1 A C D D+

PI-17 Recording and management of cash balances, debt and guarantees M2 B A C B

PI-18 Effectiveness of payroll controls M1 C D B C D+

PI-19 Competition, value for money and controls in procurement M2 C C C C

PI-20 Effectiveness of internal controls for non-salary expenditure M1 C C D D+

PI-21 Effectiveness of internal audit M1 D C D D+

C(iii) Accounting, Recording and Reporting

PI-22 Timeliness and regularity of accounts reconciliation M2 A D C+

PI-23 Availability of information on resources received by service delivery units M1 D▲

PI-24 Quality and timeliness of in-year budget reports M1 D D ▲ C D+

PI-25 Quality and timeliness of annual financial statements M1 A D C D+

C (iv) External Scrutiny and Audit

PI-26 Scope, nature and follow-up of external audit M1 D D D D

PI-27 Legislative scrutiny of the annual budget law M1 D D D C D+

PI-28 Legislative scrutiny of external audit reports M1 D D D D

D. DONOR PRACTICES

D-1 Predictability of Direct Budget Support M1 NS NS NS

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Indicators on the Performance of Public Financial ManagementScoringmethod

ScoresbycomponentOverallScore

i ii iii iv

D-2Financial information provided by donors for budgeting and reporting onproject and program aid

M1 D A D+

D-3 Proportion of aid that is managed by use of national procedures M1 D

2.4 The results of this assessment are mixed. For certain aspects, the scores for theindicators are good. However, the scores for other indicators should be improved throughactions like those consisting in the return to the orthodoxy in the preparation and adoptionof the budget, its execution and reporting as well as the external scrutiny.

C. LEGAL AND INSTITUTIONAL FRAMEWORK

Description and assessment of the existing situation

Legal Framework

2.5 The legal framework of Côte d’Ivoire’s public financial management system comprises:(i) the Constitution; (ii) the Organic Law on the Budget Law of December 31, 1959,which sets the rules on the preparation and voting of the Budget Laws (Lois desFinances), their execution, as well as their control and determines the provisions onpresentation of the Budget Execution Review Laws (Lois des Règlement); (iii) Law No.62-53 of February 12, 1962, organizing public finance management; (iv) the decreeregulating public accounting of January 3, 1980; and (v) the WAEMU Guidelines, whichare mentioned as having been transposed (see para. 2.18).

2.6 Côte d’Ivoire has initiated, during the past years, a public finance reform process with aview to bringing the system closer to international standards and in line with theWAEMU community framework. However, because of the crisis facing the country sincethe beginning of 2000, this framework has not been integrated into the internal law.

Institutional Framework

2.7 The budget management system is based on a principle of segregation of duties betweenthe credit managers (ordonnateurs) and the accountants (comptables). The Minister ofFinance is sole credit managers of the budget. He delegates his power to sub-creditmanagers who are the Administrative and Finance Directors (DAAFs) of the ministries.The ministers are the administrators of credits.

2.8 The Ministry of Economy and Finance ensures the coordination of the different stages ofthe budget preparation. It conducts budget conferences and ensures arbitrations. Wherenecessary, it resorts to the arbitration of the Prime Minister. It approves the budgetdocuments and consolidates them in the draft budget, which is then submitted to Cabinet.Following the adoption of the draft Budget Law by the Government, it edits and finalizesthe different documents to be submitted to the National Assembly.

2.9 According to the regulation, the expenditures are incurred through the normal procedure(commitment-validation-order to pay-payment) or by a simplified procedure whereby the

52

commitment and order to pay phases take place concomitantly. The public accountantsare in charge of collection of revenues and payment of expenditures, as well as keepingthe accounting records of the State.

2.10 The texts establish that: (i) the ex ante control of public expenditure is exercised by theDirectorate of Financial Control (Direction du Contrôle Financier) for expenditures onthe budget, the Directorate of Budget Control (Direction du Contrôle Budgétaire) forexpenditures by National Public Agencies (EPNs), as well as by the public accountants;and (ii) the financial and budget operations of the State are controlled ex post by theinternal bodies, the General Inspectorate of Finance (Inspection Générale des Finances),the General Inspectorate of Government (Inspection Générale de l’État),controlstructures of the ministries, and by an external body, the Chamber of Accounts of theSupreme Court. An ex ante control of compliance with public procurement rules andprocedures is also exercised by the Directorate of Public Procurement. Finally, theNational Assembly exercises its control through the examination and adoption of thedraft budget law and the draft budget execution review law.

Strengths

2.11 The legal framework is currently complete but it coexists and overlaps withWAEMU’s harmonized framework and needs to be improved. Subject to thereservations made in the following analysis, and which concern both the outdated natureof some provisions and non compliance with the WAEMU Guidelines, Côte d’Ivoire hasa relatively well-established legal framework for public finance management. Concerningthe implementation of the WAEMU Guidelines, given the fact these guidelines arecurrently being reviewed, it is today preferable to wait for the end of the processscheduled for December 2008 to encourage Côte d’Ivoire to initiate early in the followingyear their complete transposition into Ivorian law.

2.12 The Government intends to reform the organic law, notably to harmonize it with theWAEMU Guideline. The principle of a review of the organic law was retained by theauthorities. However, as mentioned above, this amendment can only intervene after theadoption of the new WAEMU Guidelines. Indeed, it appeared necessary to correct theerrors, omissions and inconsistencies of the initial texts, as well as taking into account thechanges made since their preparation, notably the introduction of results-basedmanagement, move towards a multi-year approach to budget preparation, theimplementation of new standards for the development of public finance statisticsanchored on public accounting based on recorded transactions and new classification ofthe public administration operations.

2.13 The institutional framework contains the necessary structures for ensuring efficientmanagement of public finance. The institutional framework, as defined by the texts,meets the needs of budget preparation, execution and control. The following analysisshows that, subject to some improvements, the problems identified in the managementconcern more inadequate practices than poor definition of the institutional framework.

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Weaknesses

2.14 Some current practices contradict the scope of the texts. The provision in place since1959 is based on shared and acknowledged budgeting principles, but some practicescontradict its scope. This is the case, for example, as explained later, of the procedure ofpayments on the basis of treasury advances, which is used considerably, as well as,despite the existence of a regulation on the management of earmarked accounts, themanagement of earmarked funds in a poorly defined and non-transparent manner.

2.15 A number of budget execution provisions are old compared to developmentsobserved in other countries of the region. In the framework of improving publicmanagement, some countries are implementing reforms aimed at moving public financialmanagement from resource-based budget logic towards a results-based budget. This typeof development is based on making managers accountable and controlling theirperformance. Also, the current system does not take into account the multi-year nature ofcertain expenditures. Besides, the 1959 act on the budget law would need to be amendedto address the lack of coherence in budget headings47 with its own provisions and theWAEMU Guideline No. 5/97.

2.16 The lack of internalization of the WAEMU Guidelines into the national law affectsthe coherence of the system. Although the WAEMU Guidelines organizing themanagement of public finance have not been formally adopted, certain texts makereference to them. This is the case of Decree No. 98-716 of December 16, 1998, on thereform of the channels and procedures for execution of budget expenditures and revenuesand special Treasury accounts. However, the reference to the WAEMU Guidelines intexts hierarchically less important that the organic law on the 1959 Budget Act or the1962 Law organizing the management of public finance is not sufficient to constitute aformal integration into the domestic law.

2.17 Ministers do not have an adequate autonomy. The 1959 law stipulates that theMinister of Finance is the sole credit manager (ordonnateur) of the Government’s currentexpenditures and expenditures under the special investment and equipment budget andthat the initiative for expenditures belongs to each Minister. The quality of sole creditmanager of the MEF at the central level is confirmed by the Decree No 80-12 of January3, 1980 on the regulation of public expenditure accounting. Decree No. 98-716 stipulatesthat “the Minister of Finance is the sole credit manager of funds for expenditureoperations of the general budget and the special Treasury accounts. Within each ministry,the DAAFs (Directors of Administrative and Financial Affairs) carry out operations tocommit and validate expenditures on behalf of the Minister of the Ministry to which they

47 The budget law is presented in 5 articles, which are defined in Annex 8 of Order 1572 MEF/CAB of December31, 1998, detailing the codification of the budget structure.

- Heading 0: Budget Revenues

- Heading 1: Public Debt Expenditures

- Heading 2: Ordinary Expenditures

- Heading 3: Investment Spending

- Heading 4: Special Treasury Accounts.

54

are affected,48 except for staff expenditures whose sub-credit manager (ordonnateurdélégué) is he Payroll Director, the debt repayment and exchange losses whose creditmanager is the Director of Debt and expenditures on rental and acquisition ofGovernment vehicles whose credit manager is the Director of Public Property.” It ishowever necessary to specify that the Government has decided to put in place a medium-term expenditure framework (MTEF) and this will involve greater autonomy for lineministries.

Risks

2.18 The lack of a formal internalization of the provisions of the WAEMU Guidelines inIvorian texts creates today a certain incoherence and confusion of the entire regulationand risks to cause divergences in the appreciation of certain issues.

2.19 The strictly annual nature of the budget does not allow the Government to have amedium-term vision and may lead to poor allocation of resources.

Recommendations

In the medium-term

Integrate the provisions of the WAEMU Guidelines after their review, into the Ivorianregulations on public finance, taking into account the ongoing developments (multi-yearbudgeting, results-based management, etc.).

D. CREDIBILITY, COMPREHENSIVENESS, TRANSPARENCY OF THE BUDGET

AND POLICY-BASED BUDGETING


Credibility of the budget

2.20 The analysis of the credibility of the budget consists in determining whether the budget isrealistic both in terms of revenues and expenditures and whether it is executed in the wayit is adopted. It is therefore based on a comparative study of revenue and expenditurebudget estimates and associated outturns,49 analyzed both at aggregate level and byministry. It also consists in assessing the existence of payment arrears as well as theirevolution over time.

Strengths

2.21 The level of revenues collected is close to the budgeted amount. During the past threefiscal years (2004, 2005 and 2006), the difference between the estimates of domesticrevenues (budget revenues excluding grants and borrowing) and those effectivelycollected only exceeded 5% during fiscal year 2004. The budget estimates and

48 The DAAFs are jointly appointed by the Minister of Finance and responsible Ministers.49 The amounts of expenditure outturns used in this report are those based on payment authorization.

55

performance of domestic revenues should therefore be considered as adequate, notablytaking into account the crisis situation. It should be noted that actuals for 2006 werehigher than the estimates.

2.22 The regulation defining the concept of arrears is clear. The regulation applied fordefining payment arrears is that of the WAEMU, that is to say all the expendituresreceived by the treasury and not paid within 90 days after the date of the order to pay hasbeen issues by the credit manager, i.e. from the date of transmission of the order to pay tothe public accountant, whether it is payment for goods and services or salaries. Subject tosome arrangements concerning certain creditors like the World Bank, public debt serviceis considered as arrears from the moment the payment is not made on the due date.

2.23 The monitoring of arrears is well ensured. The arrears are monitored by theDirectorate of Public Debt (DDP) and the Statistics Coordination Department of theDGTCP. The DDP uses the SYGADE computer system, which helps among others toknow the age of the arrears, both in terms of the original fiscal year and precise date theywere incurred, particularly concerning the Treasury pending payments managed by the ITsystem ASTER. The data available to the DDP are transmitted every month to thefinancial partners as part of the monitoring of the economic and financial program and tothe Directorate of Conjuncture and Economic Forecasting (DCPE) for the monthlypreparation of the TOFE. The DDP prepares a quarterly report on the debt. Thisdocument contains the arrears on both the external and domestic debts.

2.24 The ASTER system makes it possible to ensure satisfactory monitoring of theexpenditures’ pending payments. The accounting of the Treasury allows monitoring thepending payments both in the general and subsidiary accounting (monitoring of thebudget execution and separated management of the payment orders). The ASTERcomputer system allows making partial payments on the payment orders to facilitate todeal with temporary cash difficulties. It also allows publishing reports containing eitherall the pending payment orders or those that were issued after more than 90 days whichare, therefore, considered as domestic arrears. The interface between the SIGFIP andASTER applications, which is under implementation, will facilitate a more efficientmonitoring of payment orders and remaining amounts yet to be paid.

2.25 The Government has pledged to clear its arrears. The Government has pledged to payoff the arrears owed to the World Bank and the African Development Bank (AfDB) inagreement with these two institutions. Between January and March 2008, Côte d’Ivoirecleared about US$241 million of arrears towards the World Bank with its own resources.Remaining arrears to the World Bank Group were cleared on April 1, 2008 through abridge loan provided by a bilateral donor. Côte d’Ivoire then used the proceeds of theEconomic Governance and Recovery Grant, approved by the World Bank on April 1,2008, to finance the bridge loan. Arrears to the AfDB Group are expected to be cleared inSeptember 2008. It has also pledged to adopt a domestic arrears clearance plan over theperiod 2007/2009.

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Weaknesses

2.26 Due to the importance of the budget expenditures incurred in the form of treasuryoperations, the analysis of the credibility of budget expenditure estimates is notfeasible. The budget execution figures that appear in the CGAF would allow concludingthat that the budget is credible. Indeed, it appears that actual total primary expendituresexceeded 5% of the estimated amounts for just one year. By ministry or institution, theanalysis of differences between estimated and actual expenditures, as they appear in theCGAFs, would also allow concluding that the budget is credible. It appears, indeed, thatthe differences have never exceeded 10%. However, given the practices of theexpenditure chain actors intervening upstream of the DGTCP, the data is incomplete asdoes not include the considerable amount of expenditures to be regularized, thereforepaid but not recorded in a specific budget account, which are reported in the treasury cashbalance of each of the above mentioned fiscal years under accounts 470.1 “Expenditurespaid without payment order” and under certain sub-divisions of account 472 “Provisionalcharge of expenditures to the DGTCP”, which are not possible to analyze for lack ofdetails. Hence, a comparative study of the budget estimates and actual expenditureswould only have been possible if the details of the relevant amounts had been provided,classified by fiscal year and by ministry.

2.27 The amount of the arrears is quite considerable. As a consequence of the crisissituation prevailing in the country for several years, the stock of arrears as of December31st, 2006 is very important, as it amounts to FCFA 1,162 billion and represents 13.2% ofGDP and 100.6% of the total primary expenditures of the fiscal year. This stock increasedin 2006 in relative value, since the stock as of December 31, 2005 represented 93.65% ofthe total primary expenditures of the fiscal year 2005. Moreover, it should be specifiedthat these figures should be increased with the salary arrears, following an ongoing salaryarrears inventory operation by the IGF.

Comprehensiveness of the budget

Strengths

2.28 The budget format has been modernized over the past years. The budget formatcurrently used was adopted by Decree No. 98-259 of June 3, 1998 which establishes thedetailed codification of the government’s budget classification. Then, it was implementedfrom January 1st, 1999, by Order No. 1572/MEF/CAB of December 31, 1998. Comparedto the WAEMU project, which is mainly based on a double classification by services andby nature, the Ivorian budget format also comprises a classification of expenditures bydestination. The classification of expenditures is based on four elements: title, ministry orsection, destination and nature.

Weaknesses

2.29 Some budget imputations are wrong and vague. Generally, the expenditures excludingdebt are classified as ordinary (operational) and investment expenditures. It is, however,common to observe that categories of expenditures on investment are classified in

57

accounts reserved for ordinary expenditures (title 2). Similarly, certain expenditures,whose nature concerns current operations of the administration, are classified in accountsreserved for investment spending (title 3). This is the case, notably of expenditures onstaff and maintenance. Similarly, a relatively high amount of expenditures (36% ofexpenditures of this nature) is classified without any other specification under budget line“Other purchases of goods and services.” This type of practice distorts the analyses andhampers transparency.

2.30 Poverty reduction expenditures are not defined. Although a presentation ofexpenditures by functions according to the classification of functions of publicadministrations (COFOG) of the Government Finance Statistics Manual of 2001 is madepossible thanks to a bridge table, the current functional classification does not make itpossible to monitor poverty reduction expenditures. The latter should, indeed, beidentified from a table specifying the appropriate divisions, groups and classes (at leaston 4 positions) of the functional classification.

2.31 The presentation of the budget document should be improved. Despite the potentialoffered by the budget format, the presentation of the budget document is not optimized.The details of the budget items are well presented by title, representing a vast nature ofthe expenditures, and within title by ministry. However, the expenditures are notpresented in summary format according to the functional classification or by ministry.Besides, the reading of the document is made difficult because of the regrouping, withinthe classification by destination (chapter and sub-chapter): (i) of a classification bysectors of activities, similar to the functional classification at the level of the chapter; and(ii) of an administrative classification at the level of the sub-chapter.

2.32 The budget documentation is incomplete. The annual budget documents presented tothe National Assembly comprise a set of annexes and reports that contain pertinentmacroeconomic and budget data on the budget policy and the main macroeconomicassumptions. In this regard, the production of the documentation required by Article No.35 of the 1959 ordinance is observed. The budget annexes contain detailed informationon the financial operations of national public agencies as well as on the amounts ofresources voted for the budget of the territorial communities. The document presents theinitial estimates of the budget for the previous fiscal year as well as the summary tablesfor revenues and expenditures. However, the following elements are lacking: budgetbalances as defined in the Government Finance Statistics (GFS), sufficiently detailedpresentation about financing of the deficit, debt stock, detailed information on thefinancial assets, detailed status of execution for the previous year presented in the sameformat as the draft budget and, finally, impact analysis of the fiscal measures.

2.33 The comprehensive of the budget is still not effective. They include first of all,revenues collected directly by certain Ministries, generally in exchange for servicesrendered, and which, are either not paid to the Treasury, or are partially paid. The sameapplies to dividends paid by some public companies or parastatals, which are not yetsystematically added to the budget (case of PETROCI, which manages governmentshares in the energy sector). Moreover, with a view to ensure comprehensiveness of thebudget, it is necessary to budget the quasi-fiscal levies of certain key sectors like oil and

58

in particular those of the cocoa/coffee sector. Some of these revenues called servicerevenues (counterpart of a service rendered) are regulated by specific texts. Theadministration wishes to clean up these texts. By definition, the level of these operationsis not known. This also concerns some allocated funds which should have been managedaccording to the regulation on earmarked accounts, a regulation that exists but which isnot yet utilized. The Government intends to review this practice and therefore apply thisspecific regulation for earmarked accounts. The list of these funds is known but not theamount managed.

2.34 It is difficult to assess the quality of the monitoring of external financing. Most of theexternally-financed expenditures are included in the budget. Title III of the budgetcontains the details of expenditures funded by the Treasury with its own resources andthose funded with grants and loans. But the expenditures financed by grants are notpresented in an exhaustive manner. Externally-financed expenditures are monitored by aCommittee on Mobilization of External Financing and Monitoring of Public Investments(COMFESIP), which is responsible for producing a quarterly and annual report on themobilization of budget support and execution of public investments. The documentsprovided by this entity for assessing the quality of the monitoring of external financingare very few to carry out a real assessment.

Transparency of the Budget

Strengths

2.35 The territorial communities have fiscal resources whose distribution rules areknown. The territorial administrative organization distinguishes 5 levels ofdecentralization: 718 communes, 183 sub-prefectures, 68 departments, 19 regions and 2districts. Proceeds from Government taxes are paid back to the territorial communitiesaccording to the quotas envisaged by the provisions of Article No. 36 of the fiscal annexto the 2004 Buget Law. Concerning the effective pay out of these amounts, the books ofthe Agence Comptable Centrale des Dépôts (ACCD) contain a special bank accountunder the name of the General Treasury entitled «Tax revenues to be paid back to theterritorial communities».50 This account is intended to receive transfers of the share oftaxes made by the Agent Comptable Central du Trésor (ACCT) for the benefit of theterritorial communities attached to the General Treasury. The funds that are paid into thisspecial account are automatically paid to the respective accounts of the beneficiarycommunities.

2.36 The central administrations receive a great number of data on budget and actuals ofthe different entities of the public sector. The entities of the public sector other thanthe central administration are constituted by National Public Agencies (EPN) and State-owned companies. The Directorate of Parastatals Accounting receives every month afinancial and budget situation for most of the EPNs. Most of the management accounts ofthe 70 EPNs were produced for the 2004, 2005 and 2006 fiscal years. These documents

50 Procedure provided for by Instruction 0103 DGTCP/DCE of January 4, 2007, on modalities of paying back thequota of proceeds from certain taxes to the territorial communities.

59

contain reliable information on their accounts and budget execution. The MEF istherefore in a position to anticipate the eventual risks of slippages due to arrears build upor the creation of operational deficits which could adversely affect the financial situationof the State. The data on the financial operations of public enterprises and companieswith public financial participation are available for those concerning state-ownedcompanies and companies with majority public participation except for the CaisseGénérale de Retraites des Agents de l’Etat (CGRAE), for which an audit is envisaged.

2.37 A great number of territorial communities produce regularly their annualmanagement account. At the time of the assessment, the management accounts of theterritorial communities for the past three fiscal years (2004, 2005 and 2006) had beenproduced at 80% (439 out of 549). The documents contain reliable information thatenable the DGTCP to carry out an initial control of their accounts and budget executionand then make these elements available to the Chamber of Accounts.

Weaknesses

2.38 The rules on allocation of government funds to the territorial communities areincomplete. Law No. 2003-489 of December 26, 2003 on the financial, fiscal andnational regime of the territorial communities devotes its title II to resources of territorialcommunities. Chapter 3 - Articles 86 to 96 – deals with the government’s assistance,which results in the establishment of an allocation for operational expenditures, anotherallocation for general decentralization and grants for equipment. But these distributionrules are not all defined. For example, the law does not indicate the per capita amount ofthe fixed part of the overall operational expenditures and refers to a decree on modalitiesfor calculating the additional part of the allocation.

2.39 The method of distribution effectively applied may cause disparities among thecommunities. In order to distribute the amounts available, the DGBF communicates tothem the resource envelopes. Then, on the basis of the proposals of the communities, itissues a proposed distribution. The representatives of the DGBF feel that this method ofdistribution may create disparities between the communities, since the amount that servedas basis for the initial distributions could have been poorly determined. In this case, theinitial error of evaluation is carried forward from one year to the other. It is alsonecessary too specify that government resources do not make it possible to transfer to theterritorial communities the amounts to which they are entitled, given the competenciestransferred.

2.40 The State informs late the territorial communities of the amount of future transfers.For the preparation of the 2006 budget, the circular was dated October 17, 2005, and thedeadline given to the Presidents of the General Councils and Mayors to submit their draftbudget was October 29. Generally, the information on transfers from the State do notarrive at the financial services of the territorial communities before the end of November,which is too late to enable the local councils to effectively adopt their budget before thebeginning of the fiscal year concerned. The local communities therefore very rarelymanage to adopt their budget before January 1. If the budget is voted earlier, the mayorsare obliged to amend it to take into account the information on the amount of the

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transfers. As regards the effective payment of the transfers, it is generally done withmuch delay.

2.41 The possibilities offered by the budget nomenclature of the territorial communitiesare not all explored. The Directorate of Parastatals Accounting of the DGTCP receiveseach month the financial situation and the aggregated budget situation of all the territorialcommunities. The budget and accounting nomenclature of these communities, in theory,facilitates a presentation of their expenditures on the basis of an economic and functionalclassification identical to that of the budget. However, the latter presentation has neverbeen used.

2.42 The outturn data of the various entities of the public sector cannot be aggregated.Since the financial and budget data on all the EPNs is only available rather late, the MEFcannot timely establish a consolidated situation. Concerning public enterprises, in theabsence of an exhaustive production of data, it is not possible to consolidate theirfinancial and budget data. Finally, the net budget situation of most of the territorialcommunities may be controlled at least once a year, on the basis of their managementaccounts, but does not make it possible to present a consolidated situation.

2.43 Public access to budgetary information is limited. In total, few data are available. Thisis the case for (i) the award of contracts estimated at over US$100,000, or about FCFA 50million, which is published in the Journal of Public Procurement; and (ii) the informationon resources made available to the service units at local level is presented in detail in thebudget documentation. As for the budget documents, they are not accessible to the publicat the time of presentation of the budget to Parliament, which harms the information ofthe citizens. The in-year budget execution reports are also not available to the public.Good practices indicate that pubic information should be initiated as soon as thepreparation of the budget law is completed and the draft adopted by the Government. Itwould be necessary to ensure that the quarterly publication of the budget execution reportin an analytical form is accessible to the public within the six weeks following the end ofeach quarter. The end-of-year financial statements, notably the draft budget executionreview laws have not been approved since the fiscal year 2002. Moreover, the externalaudit reports, notably the report of the Chamber of Accounts on the execution of theBudget Law, are not accessible to the Public within the 6 months following the audit ofthe accounts. Finally, the deliberations of Parliament in the monitoring and surveillanceof budget management are not brought to the knowledge of the citizens; the MPs do nottake the initiative in this sense. The radio and television retransmission of the budgetdebates, as practiced in other Francophone African countries, offers an opportunity todisseminate among the population the content of the budget laws and strategies pursuedby the Government. Moreover, in the light of ongoing efforts to eliminate the backlog inthe preparation and voting of the draft budget execution review laws, it would beimportant to ensure the publication of the budget execution review law, starting withthose of 2005 and 2006. These initiatives, currently absent, would facilitatecommunication to the public and introduce greater transparency in the management ofpublic finances.

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Policy-based budgeting

Strengths

2.44 A timetable for budget preparation was defined for preparing the 2008 budget.Concerning fiscal 2007, it was not possible to confirm whether a budget timetable wasestablished or whether instructions had been formally given for preparation of the budget.However, the instruction given by MEF on July 16, 2007 defined the timetable forpreparation of the 2008 budget, which determines the main steps, as well as theirdeadlines, up to the promulgation of the budget law, which should occur beforeDecember 31, 2007. This timetable is presented in Annex 4. As planned, the 2008budget was approved by Ordinance before the beginning of fiscal year 2008.

2.45 A Public Investment Program (PIP) is prepared on the basis of the major budgetorientations. This document, which constitutes an attempt to monitor and assessinvestments, is a triennial programming of investments updated every year on the basis ofthe actual realizations, orientations and priorities of the Government. The expendituresunder Title 3 of the budget (investments) were previously retained in the PIP.

Weaknesses

2.46 During the past 3 fiscal years (2005, 2006, 2007), the budget was never voted beforethe beginning of the fiscal year. The deadline for presentation of the Budget to theNational Assembly is fixed by Article No. 80 of the Constitution, which stipulates that”the budget law shall be presented to National Assembly at the opening of the Octobersession.” Given the crisis situation prevailing in Côte d’Ivoire these past years, the budgethas been approved and adopted by Ordinance. The 2005 budget was adopted by theNational Assembly on April 27, 2005; the 2006 budget was approved on June 14, 2006and adopted by Ordinance on August 2, 2006; and the 2007 budget was approved on May31, 2007 and adopted by Ordinance on May 31, 2007. As mentioned above, the 2008budget was approved by Ordinance before the beginning of fiscal year 2008.

2.47 Although based on multi-year macro-economic assumptions, the budget preparationis limited to one year. The crisis situation has not made it possible to finalize a nationalmedium-term strategy; consequently, Côte d’Ivoire prepares no global MTEF or sectoralMTEFs. However, in the framework of the post-crisis re-engagement strategy, theprocess has been re-launched. In this regard, a workshop was to be organized fromNovember 28-30, 2007. Moreover, although the PRSP was not adopted, a nationaldevelopment strategy based on the MDGs is being finalized and could help to place thebudget in a multi-year perspective.

2.48 The Debt Department is not yet in a position to conduct a debt sustainabilityanalysis which is validated by the authorities. The Debt Department has the DebtProsoftware for carrying out debt sustainability analyses. It seems that this Department triesto conduct this type of analyses, but its work is not validated by the authorities. It,however, intends to master this tool, initially with the support of the developmentpartners.

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2.49 There are no quantified sector strategies. Issues associated with crisis recovery, likethose associated with staffing and office rehabilitation, are dealt with priority and thedevelopment of strategies is being relegated to a second plan. There is a nationalmedium-term strategy that integrates certain sectoral strategies and a few rare projects arebased on strategies in the Ministries of Health and Education. But these strategies areneither translated into an action plan nor quantified. This situation is particularlyprejudicial to the priority sectors, namely education, health and infrastructure. Anotherconsequence is the fact that recurrent costs induced by investments are not taken intoaccount. There are currently only two strategic actions under study. They are thedevelopment of a new National Health Sector Development Program (PNDS) for 2008-2012, which is one of the priority activities of the action plan of this sector, but which hasnot yet been launched. The other action concerns the resumption of the development of apoverty reduction strategy, which started with the seminar held at the end of November2007 and is planned to be completed during the third quarter of 2008. The preparation ofthis document, which will be based on the national development strategy and regionaland national consultations, will be done under the control of the PRSP SteeringCommittee, which has been revived, and the preparatory process will comprise, notably,the development of a medium-term expenditure framework and a results-monitoringsystem (see paragraphs 1.65-1.70).

2.50 There is no national inventory of investment projects. The Directorate of Planningexpressed the wish that the project sheets should be prepared by the ministries on thebasis of their objectives and that the costs should be quantified. It should be noted thatthere is no national inventory of projects. This type of database would be very useful forproviding information on the life of projects, notably by taking into account the variouspreparation and execution stages (projects studied but not yet accepted, projects waitingfunding, etc.).

Risks

2.51 The weak credibility of the budget, largely associated to the crisis that has affected thecountry and the repeated utilization of exceptional procedures (treasury advances) until2007, creates a risk of budget deficits and accumulation of arrears. The firmimplementation of corrective measures is essential to avoid funding deficits for priorityexpenditures. It is also essential to avoid the accumulation of payment arrears whichrisks leading to the practice of inflated prices, as the suppliers to the Governmentincorporate a risk premium in their prices. It may also result in changes in the realstructure of the expenditures.

2.52 The non-respect of proper imputation of budget expenditures according to their naturedistorts the analysis and harms transparency. The lack of legibility and information gapson budget documentation may harm parliamentary control and prevent an efficientallocation of resources.

2.53 The lack of budgeting of part of government resources has a direct impact on the totalamount of resources to be allocated to the different sectors.

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2.54 Difficulties in implementing the legal texts and regulations associated to the method ofdistribution of transfers from the State to the territorial communities do not favor anequitable allocation of these resources. The late publication of consolidated data on theterritorial communities, the EPNs and public enterprises makes it impossible for the Stateto conduct an exhaustive risk analysis. The deficit of budget information prevents thepublic from verifying the way in which the resources are utilized.

2.55 The lack of MTEF may affect the strategic allocation of resources.

Recommendations

In the short-term

Establish a plan for total clearance of arrears. Integrate in the budget nomenclature the functional classification of the 2001 GFS

Manual, and identify the poverty reduction expenditures. Present the budget by breaking down the expenditures by nature for each ministry and by

presenting the expenditures by function and sub-function. Budget the quasi-fiscal revenues of the coffee/cocoa and oil sectors. Make an inventory of treasury advances already committed and maintain the total volume

of these advances at less than 15% of cumulative current expenditures excluding salaries,debt servicing, régies d’avances and externally-financed expenditures.

Make an inventory and budget revenues collected by the ministries. Adopt the decrees fixing the rules on distribution of government allocations to the

territorial communities. Adopt each year the Budget Law not later than December 31. Implement gradually a Medium-Term Expenditure framework (MTEF). Post the budget on the Internet site of the Ministry of Economy and Finance.

In the medium-term

Establish a national inventory of projects.

E. ACCOUNTING, RECORDING AND REPORTING

Description and review of the existing situation

2.56 The accounting system is based on the use of two recently modernized tools, the budgetnomenclature and the Public Accounting Plan, as well as on computer tools, namely theSIGFIP application for managing the expenditure chain and the ASTER for treasuryaccounting. The budget nomenclature was established at the beginning of 1999 at thesame time as the SIGFIP application. The classification of the budget nomenclature wasestablished with the objective of ensuring correspondence with the Accounting Plan atthe level of the classification by nature. The ASTER application, which implements thenew accounting plan adopted in 1998, has been operational since 2003.

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Strengths

2.57 The accountants undertake bank reconciliations on a regular basis. The publicaccountants establish each day their banking situation on the basis of checks received andchecks issued. The reconciliation between the accounting entries and bank statements isconducted at the time of the daily, fortnightly and monthly closing of accounts.

2.58 The primary service delivery units are well informed of the amount of their budgetallocations. The administrative entities whose manager acts as credit administrator areinformed, by simple consultation of the annual budget, of the amount of credit allocatedto them. This is the case, for example, of secondary schools or health centers. For theothers, the funds are managed by the head of the deconcentrated service to which they areattached. When the credit administrators are not connected to the SIGFIP system, thecredits are allocated to them in the form of credit delegation.

2.59 A monthly TOFE is prepared. The development of the TOFE is the responsibility ofthe Directorate of Conjuncture and Economic Forecasting (DCPE). The data are providedby the BCEAO, DGTCP, other régies financières, the CNPS, the CGRAE and the DGBF,which provides a report from SIGFIP, the “Comparative table of commitments, mandatesapproved by the financial controllers and payments orders registered in the books of theTreasury”, as well as some information that helps to break down the expendituresaccording to their nature and TOFE headings. These data notably allows identifying theshare of subventions allocated for payment of salaries of national public agencies (EPNs)and state-owned companies, which are re-classified under “Staff Expenditures” in theTOFE.

2.60 A number of reports, prepared on the basis of the general public accounting, areregularly published. The progress made in terms of production and reliability of theaccounting documents, facilitates detailed analysis and control of the accountinginformation contained in the balance of accounts. The DGTCP publishes a monthlybalance of accounts within the 10 days following the end of the month, from the ASTERsystem. Analytical reports on the execution of the budget are prepared during the fiscalyear with the objective of monitoring the policies adopted in the framework of theWAEMU and follow up the convergence criteria.

2.61 The administration is focused on the systematic publication of reports. According tothe declarations of the DGBF representatives, efforts have been made since September2007 to ensure that the in-year reports on the budget execution are published and madeavailable on a monthly basis. A bilateral committee comprising representatives of theDGBF and the DGTCP has been established with the objective of monitoring progress ofbudget execution. To enable it to accomplish its task, a monthly execution report must beprepared showing the amount of expenditures according to the different types ofclassifications. This report will be presented to Cabinet.

2.62 The CGAF is prepared each year, on regular basis. The preparation, since a few yearsago, of the CGAF at the end of the fiscal year represents a significant progress which isonly observed in a few countries of the region. At the time of the mission, the 2006

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CGAF had been prepared in a draft version. The CGAF is a very complete document thatcontains: the detailed balance of accounts of the State; (ii) the breakdown of budgetexpenditures by title, ministry and economic nature; (iii) the breakdown of budgetrevenues; (iv) the development of result accounts; as well as (v) the financial documents.It should however be noted that in the 2006 draft CGAF, a number of accounts arepresented without budget headings, which harms the legibility of the document.

Weaknesses

2.63 The monitoring of the suspense and advance accounts is inadequate. Some suspenseand advance accounts present very important balances, the amount of which has beenincreasing from year to year. This is notably the case of account 472, which shows abalance of FCFA 335 billion as of October 31, 2007. This means that the reconciliationand adjustment of these accounts are not done regularly.

2.64 The control of the disbursement of resources to the primary service delivery units isnot adequately ensured. The Ministries of Infrastructure, Health and Education carryout a management control on the basis of field surveys. But the low level of theirresources does not enable them to conduct more than three or four missions each year.The high number of administrative units (for example, about 1,400 health centers) makesit impossible to carry out a systematic control throughout the country. Although a publicexpenditure tracking survey has not been conducted during the past three years, theministries that the mission met (Education which prepares a quarterly report by regionaldepartment, Health and Infrastructure) carry out a few controls on the effectiveness ofexpenditures.

2.65 The reliability of the data should be verified (see Section B of Chapter 1). The delaysin the adoption of the Budget and in making available the appropriated funds, as well asthe associated reliance on advances, do not facilitate an efficient monitoring of the budgetoperations. The fact that a monthly TOFE is prepared favors the coordination between theTechnical Secretariat of the Committee and services producing basic data. However, inorder to verify the reliability of the data, it is essential to carry out, immediately after theclosure of the operations of the month, the reconciliations and systematic cross-checkingof data from the different services. Moreover, the data should be compared and checkedin order to ensure that they actually cover the same period.

2.66 The SIGFIP system is under-utilized in terms of information on the execution of thebudget (see Section B of Chapter 1). The organic law on the Budget act stipulates thatquarterly information on expenditures committed and ordered to pay should be addressedto the Finance Commission of the legislative Assembly. This information is not providedand, generally, the public finance management system is characterized by a deficit ofinformation on the budget execution. The SIGFIP database system allows the publicationof various reports both aggregated and detailed. But the publication is not systematic.They are only done upon request. The budget execution reports, which the system canpublish, contain the amount of: (i) budget estimates; (ii) commitments issued; (iii)commitments approved by the financial controllers; and (iv) payment orders registered inthe accounting books of the Treasury. However, the amount of payments is not indicated.

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2.67 The process of transfer of information from the SIGFIP system to the ASTERsystem is not totally protected (see Section B of Chapter 1). The information from theDGBF (SIGFIP system), notably payment orders, is transferred to the Treasury (ASTERsystem) in digital form. But the procedure is not completely electronic. The reconciliationof registrations made in these two systems is only done at the end of the fiscal year. Thiswork generally takes only one to two days. A Committee was set up recently to ensurethis reconciliation every quarter. The reliability of the data can, therefore, not be totallyensured during the fiscal year. Hence, the reconciliation between the amounts ofexpenditures reported in the 2006 CGAF and the amounts reported in the executionreports derived from SIGFIP shows relatively significant differences (about 10%).

2.68 The complementary period is poorly utilized. Decree No. 98-260 on theimplementation of the public accounting plan establishes that: “the accounting systemused is that of management, extended for a complementary period, the duration of whichis determined by order of the Minister in charge of Finance.” In most countries that takeinspiration from the French system, the complementary period is reserved for managingthe regularization of the expenditures paid and provisionally imputed, i.e. expenditurespaid before authorization. In Côte d’Ivoire, the texts stipulate that during this period51,certain expenditures may be authorized. Hence for expenditures other than capitalspending, for which credits may be made by order of the Minister of Finance,authorizations may be made by the delegated credit manager until January 1552 and therecording of expenditure authorizations in the books of the Treasury may be made untilFebruary 28. This approach applies both to expenditures paid without prior authorizationduring the previous year or expenditures whose service is delivered before December 31.These provisions may delay the closing of the year’s accounts. It should be added that theduration of the complementary period is not in conformity with the WAEMU standards.The 1959 ordinance authorizes a complementary period of three months whereas theWAEMU Guideline on public accounting plan limits the duration of this period to twomonths. It would be desirable, therefore, to set a complementary period of one monthonly devoted to the regularization of expenditures paid before authorization.

2.69 The public accounting system follows international standards but some accountingprinciples are not totally respected. The accounting system is based on the accountingstandards contained in the WAEMU Guideline on public accounting which is itself basedon the SYSCOA system. Since the establishment of this system in 2002, the reports arepresented in a format that corresponds to these standards. However, the examination ofthe balances for 2004, 2005 and 2006 fiscal years allows identification of some suspenseaccounts which present unusual balances while others are not systematically paid off. Theexistence of unusual balances is also pointed out in the report of the mission on control of2007 balances conducted by the services of the DGTCP from September 17-30, 2007.This shows that if the accounting standards really exist, they are not fully respected.

51 See Articles 4 and 5 of the 1959 Act on the additional period.52 Including as regularization of advances, see circular letter on the closure of public budget operations for the 2006management of 29 November 2006.

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2.70 Though in conformity with the WAEMU Guideline, the accounting plan could besimplified. The budget operations accounting and classification system uses among otherclasses of accounts, class 9 “Budget Cost Accounting.” This technique, highly complexto be implemented, is today considered useless. It helped to obtain an immediateaggregated situation of the budget execution by reading class 9 accounts. But, given thatthe accounting of transactions in the patrimonial accounts (classes 1, 2, 6 and 7) weredelayed due to the clearance of the class 9 accounts, the system became difficult tomanage. The recent accounting plans which maintained this technique generally providesfor a quarterly or monthly clearance of these accounts. But the system is complex to use.Moreover, currently the accounting systems are computerized and they allow monitoringin detail the daily operations in the patrimonial and auxiliary accounts of the Treasury aswell as in an aggregated manner. As a result, the method has no interest. The passage ofthis type of operations through class 9 becomes useless and this class of accounts may beabolished. It should be kept in mind, however, that this development cannot be completedwithout changes in the WAEMU Guideline on the Public Accounting Plan. It is importantto ensure that abolishing this account will not harm the regular and timely preparation ofperiodic budget execution statements and the TOFEs.

Risks

2.71 The lack of regular monitoring of the suspense accounts and the regularization of thegeneral public accounting may result in accumulation of amounts that are difficult toregularize and distort the results of the budget execution.

2.72 The fact that reports on the situation of budget execution are not systematically publishedand, therefore, not used as tools for decision-making and piloting of budget executionmay harm an efficient allocation of resources. The lack of information on monitoring thebudget execution may also result in unjustified changes in the distribution ofexpenditures.

2.73 The use of an excessively long complementary period for taking into consideration thenew operations attached to the year being closed may delay the closing of the fiscal year.

Recommendations

In the short-term

Clear systematically the suspense accounts and regularize the general public accounting. Intensify the control of the disbursement of resources to the primary service delivery

units. Produce systematically a quarterly report on the execution of the budget law. Complete the interface between the SIGFIP and ASTER applications. Complete the project to integrate the payroll financial and administrative management

(SIGFAE) and envisage the possibility of an automatic transfer of payroll information toSIGFIP.

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F. PREDICTABILITY AND INTERNAL AND EXTERNAL CONTROLS

OF BUDGET EXECUTION


2.74 The funds are made available to line ministries by the DGBF immediately after adoptionof the budget. DGBF is also in charge of implementing the measures on creditconsumption decided by the Minister in charge of Finance in the framework of themonthly regulation of the budget expenditures. The predictability of the availability ofresources is enhanced by the establishment of the treasury plan, but the late adoption ofthe budget seriously constrains the budget regulation actions.

2.75 The texts define that the a priori control of public spending is exercised by the FinancialControl Directorate for expenditures under the general budget, the Budget ControlDirectorate for expenditures of National Public Agencies (EPNs). The public accounts,the government’s financial and budget operations are controlled a posteriori by internalbodies, the General Finance Inspectorate, the General Pulic Inspectorate and controlstructures of the ministries, and by an external body, the Chamber of Accounts of theSupreme Court. An a priori control of the respect of the procurement rules andprocedures is also exercised by the Public Procurement Directorate. Finally, the NationalAssembly exercises its control through the examination and voting of the draft budgetlaw and the draft budget execution review law.

Relationships between the fiscal administration and taxpayers

Strengths

2.76 Taxpayers have easy access to information on tax obligations. Concerning the IRS(DGI), which collects 90% of tax revenues, a number of documents have been developedduring the past four years to facilitate access of taxpayers to information: the taxprocedures book and the taxpayer’s guide. The media are also used to disseminate the taxregulations. For example, the television presents a program every Monday and the radiotwice a week which cover the entire country. Toll free numbers are also available to thepublic. The DGI has a department that monitors the quality of its services. The GeneralDirectorate of Customs (DGD) uses its own Internet site and that of the WAEMU topresent its texts to the public. It also organizes information meetings for economicoperators. In this regard, a seminar was organized at Grand Bassam in October 2007,which helped to rationalize certain tax procedures.

2.77 Taxpayers are registered in a relatively reliable system. A system for registeringtaxpayers was established in 2005. It is based on a single identification number thatcaptures the data on each taxpayer: surname, first name, address and activity. The censuscarried out during the establishment of the system helped to identify a number oftaxpayers in the informal sector. This identification number is managed by the DGI,which acknowledges, however, that not all taxpayers have been identified and that someof them are registered under several numbers.

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2.78 Transfer of duties and taxes collected by the fiscal authorities to the Treasury isdone on a daily basis. The transfer of amounts collected by the DGI and the DGD to theTreasury is done every evening. All the accounts are then set at zero. The transfer ofcollected taxes to the Treasury account by the fiscal authorities should, therefore, beconsidered as very efficient.

2.79 Reconciliations of the operations of the fiscal authorities and the Treasury areregularly done. A weekly meeting between the BCEAO, the DGI, the DGD and theTreasury helps to verify the compliance of payments by the revenue administrations tothe Treasury account. This work is done in preparation of the Treasury Committee andconducted by the Statistics Coordination Department of the DGTCP during the technicalreconciliation meetings chaired by the BCEAO. All the bank accounts of the EPN arecentralized and monitored by the Central Accounting Agency of Deposits (ACCD) whichis gradually being deployed in the interior of the country in order to make up for thewithdrawal of certain commercial banks. Concerning the amounts to be recovered, theTreasury carries out regular reconciliations between its general accounts held on theASTER software and the REC application which is used for the monitoring of collectionsin auxiliary accounting.

Weaknesses

2.80 The regulation on duties and taxes is clear, but it seems it is not always respected.The legal texts and procedures on all the main categories of taxes feature in the GeneralTax Code (CGI) and in the Customs Code (CD). These texts are exhaustive and clear andtheoretically limit the discretionary powers of the administration entities which exercise afunction in the area. However, to deal with private sector complaints an observatory hasbeen put in place in 2002 and 2007 to cover customs’ and IRS issues, respectively.

2.81 Lack of information did not allow assessing completely the appeals mechanisms oftaxpayers. Within the DGI, the regulation on disputes is clearly defined in the CGI. Theprocedure is contradictory and seems to satisfy the taxpayers. The statistics providedshow that a major part of presented applications is treated and that 12% of them aresubject to jurisdictional appeals. The DGD has established an observatory in charge ofreceiving complaints from taxpayers. The latter intervenes as an arbitration court.However, no element on the statistics concerning the appeals was provided by thisadministration to the mission.

2.82 Lack of information did not allow assessing the efficiency of the penalties definedfor cases of non respect of the registration and tax declaration obligations.Concerning the DGI, the lack of tax declaration results in the payment of a fine equal tothe amount of the tax itself. Discussions may be initiated. A deadline for settlement isproposed. Concerning the DGD, the goods imported serve as guarantee for the duties andcan therefore, as a last resort, be auctioned. If it is not declared or not adequatelydeclared, the due duties shall be paid together with the fines according to the CustomsCode. Concerning fines, discussions may be initiated. The duties are guaranteed by abank guarantee mandatory for the exercise of the function of customs’ clearing agent.

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2.83 The audit programs of the fiscal authorities are not based on clear risk assessmentcriteria. The DGD establishes an annual program of activities. This very brief documentdoes not present objectives based on a ranking and assessment of risks. The DGIpresented some elements of programming and execution of the tax control that it actuallycarries out, but this activity is not based on a ranking of risks. A continuous program oftax audits and surveys on fraud, therefore, exists but the audit programs are not based onclear risk assessment criteria.

2.84 The information on the monitoring of collection of duties and tax arrears is notdisseminated. The necessary elements for appreciation of the rate of recovery of arrearsof duties were not provided neither by the DGD, nor the DGI.

Management of the Treasury and regulation of expenditures

Strengths

2.85 The monitoring of the Treasury is well ensured. On the basis of the cash flows for thepast fiscal years, the Statistics Coordination Department of the DGTCP establishes anannual cash plan for the coming budget year. This cash plan is updated monthly on thebasis of the actual inflows and outflows of funds. The directorate of forecastingcalculates, on a monthly basis, the revenues and the DGBF assesses future expenditures,both help to inform preparation of the annual cash plan. The arrears to be cleared are alsointegrated into the plan. The monthly update is the opportunity to verify the achievementof the revenue objectives assigned to the revenue authorities in the framework of themonitoring of the quantitative benchmarks of the economic and financial program.

2.86 The data on debt are complete. The Directorate of Public Debt (DDP) has beenoperational since 1997, when debt management was removed from the Caisse Autonomed’Amortissement (CAA). In 2002, the SYGADE application was installed, as Côted’Ivoire was designated as a pilot country for the use of this application. The databaseconcerning the debt was transferred from the database of the CAA into that of SYGADE.This database contains the records of all debt movements since 1998. The loans arecodified and grants are also registered. The operations are also registered on a daily basis.The database is updated in real time of exchange rate variations, thanks to an Internetconnection.

2.87 The data on debt are reliable. The DDP prepares a quarterly report on the debtsituation. All debt flows are subjected to accounting transactions and the balance presentsthe stock situation (ASTER application). The stock and debt flows are monitored in theSYGADE application (DDP), since the SIGFIP application only allows monitoring theflows. The reconciliations between these different sources of information only showdifferences due to exchange rate variations. The database of the DDP is exhaustive, bothfor the domestic and the external debt. All flow operations are presently registered in theSYGADE application. The data on domestic and external debt are subjected to monthlyreconciliations between the different operational sub-divisions of the DDP.

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2.88 All receipts are consolidated. A central account opened at the BCEAO is managed bythe Central Accounts Agent of the Treasury. The flows from all the other accounts areaggregated on this central account through regular action taken by the BCEAO.Generally, no account is opened in the name of the Government in commercial banks.

2.89 The Minister of Finance signs all loan agreements. The procedure for publicindebtedness starts by establishing a draft agreement at the level of the MEF. The DDPcarries out a financial and legal analysis of the application. It then makes suggestions onthe conditions of the loan. The sector Minister responsible for the expenditures for whichfunding is solicited is then authorized to initiate the technical discussions with thefinancial partner. At the end of the procedure, for all the applications, it is the Minister ofEconomy and Finance who signs the loan agreement and therefore commits the State.The granting of loan guarantees and approvals is codified by Decree No. 83-501 of June2, 1983, which stipulates, notably in its Article 25, that the decision belongs to theMinister of Finance alone.

Weaknesses

2.90 The provisions on making available budget allocations introduce some rigidity inthe execution of expenditures. The MEF, the sole credit manager of expenditures,oversees the rate of consumption of credits by the DAAFs, delegated credit managers.The latter are appointed on the basis of a proposal from the responsible minister, after theMEF has given its view. They, therefore, intervene in a dual capacity. The allocations forcurrent expenditures are made available to the ministries every month which does notallow the Ministers to efficiently plan their operational expenditures. However, when aparticular expenditure, by its nature, should be incurred over a period of time exceedingone month, the DAAFs of ministries may obtain, exceptionally, the disbursement of thecorresponding funds in a single tranche. The allocations for investment are madeavailable to the ministries on a case by case basis. The allocations are specialized at thelevel of the budget line. As a result, any modification in the distribution of funds at thelevel of the paragraph or line requires a decision of the General Director of the Budgetand clearance by the Financial Controller, which introduces some rigidity in the use offunds.

2.91 The late adoption of the budget seriously constraints the regulation actions. Theprovisions that regulate the budget execution according to expenditure priorities andavailable resources lose their relevance and efficiency since for some years, the budget isadopted late.

2.92 The rules governing the changes made to the budget in the course of the fiscal yearare clear but applied in a non-transparent manner. The rules governing the changesto the budget in the course of the fiscal year without prior approval by parliament areclearly fixed by the organic law of 1959 that covers the budget law. However, althoughquite many, these changes which are adopted in the form of executive orders do notappear in the General Accounts of the Financial Administration (CGAFs) of 2006. Theinformation provided, generated from SIGFIP, allowed the mission to verify that theseoperations are numerous but it was not possible to verify whether they concern virements

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or credit transfers and whether they have an incidence on the budget balance. It should bespecified that, when a Supplementary Budget Law is voted, as it was the case in 1999,2000, 2001 and 2003, that information is available and is considered during theratification process. When that’s not the case, article 36 of the WAEMU Guideline No.05/CM/UEMOA establishes that changes made to the budget in the course of the fiscalyear without prior Parliament approval must be confirmed in the Budget ExecutionReview Laws. However, no Budget Execution Review Laws was voted since 2002.

2.93 Parliament does not establish an annual debt ceiling. The invoked reason is that thistype of ceiling would prevent the Government to deal with emergency situations. Thissituation gives the Government a free hand as regards the amounts to be borrowed duringa given fiscal year.

Internal controls of salary expenditures

Strengths

2.94 The Payroll and Civil Service Directorates and the Treasury ensure systematiccontrol of the variable elements of the payroll. The pay roll expenditures are incurredon the basis of capped appropriations. Payment is done according to the procedure ofexpenditures without prior authorization (DSOP). The procedure of monthly payment ofsalaries is initiated by the Payroll Directorate, which first of all registers the commitmentsin the SIGFIP system. The draft monthly payroll is addressed to the Civil ServiceDirectorate, which on the basis of general and sector statements carries out somecontrols. At the payment stage, the PGT controls the variable elements of the payroll. Todo that, he has a direct link with the database of the Payroll Directorate. The PGTsystematically verifies the slips for salaries over FCFA 600,000. A large part of thesalaries is paid to bank accounts. However, some are still paid by cash slips the reasonbeing the control of their physical presence at their posts. These are newly recruitedemployees or employees that resumed their jobs after an interruption of their activities.

2.95 The modalities of approval of recruitment and change in situation are clearlyestablished. Concerning new recruitments, the orders are submitted to the prior approvalof the Financial Controller before the signature by the Minister of Civil Service andEmployment. The same applies to changes in the administrative situation of employees.The modalities for approval of acts in connection with recruitment and change insituation are clearly established. These elements are also verified by the PayrollDirectorate. All pay movements associated with changes in administrative and financialsituation of civil servants and government employees are subjected to systematic controlby the PGT, before they are registered in the accounting system. Summary statements arepublished to review movements made in the month (registration of employees, changes inappointment, service or changes in marital status, reclassification after promotion, etc.).When the civil servant goes on retirement, the Payroll Directorate prepares a certificate ofcessation of payment, which enables the service in charge of retirements to pay thepension benefits.

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2.96 The payroll control operations have been developing for several months. Aninventory of the staff was carried out in 2002 with funding from the World Bank. On thisoccasion, only civil servants who physically presented themselves were paid. Thisoperation helped to eliminate a lot of “ghost” names in the database. Since this inventory,there has not been an exhaustive control of payroll statements or number of staff.However, since May 2007, sector staff control operations are carried out in the ministries.The Regional Directorates and the Salary Control Branch of the Payroll Directorate carryout monthly controls on all elements of remunerations. In addition to these regularchecks, targeted controls are carried out on certain elements of salaries or fringe benefits,for example, transport allowances, special work allowance, etc. To date, these have beenmade in all the sectors, except education and health.

2.97 There is a project to develop a single payroll database. The project to develop a singledatabase for administrative and financial management of salaries should lead to anautomatic input of data on salaries into the SIGFIP application. A project team chaired bythe Director of Civil Service has been established in order to conduct the SIGFAE(Integrated System for the Management of Civil Service’s Records) project. The newapplication will be based on a decentralized management of the payroll by the DAAFs ofministries. It should be implemented latest in 2008.

Weaknesses

2.98 There are two payroll databases for civil servants. Côte d’Ivoire has no integratedmanagement tool for salaries of civil servants and government employees. There are twoseparate files: that of the Civil Service Directorate, which manages all civil servants aswell as contractual staff, and that of the Payroll Directorate, which manages only civilservants (government employees and EPN) who are to be paid. A project to develop acentral personnel database (Fichier Unique de Référence) called SIGFAE, which will beused by the Civil Service Directorate, the Payroll Directorate, the Paymaster-General ofthe Treasury (PGT) and the Civil Servants National Retirement Fund (CGRAE), is beingdeveloped by the Société Nationale de Development Informatique (SNDI). It is one of theactions included in the 2007 strategic action plans of MEF.

2.99 Assessment of the wage bill is not based on an exhaustive list of budget positions. Atthe stage of the preparation of the draft budget, the wage bill estimation is conductedthrough a conference for the programming of staff attended by representatives of thePayroll and the Civil Service Directorates. An assessment of future recruitments iscarried out, on the basis of pre-approved budget staffing. However, an exhaustive list ofbudget positions for the whole administration is not available (number of positions,definition of each position and valuation on the basis of an associated index). In thecontext of moving towards medium-term programming, the Government could usefullyconsider implementing a more elaborated framework to program staffing for the wholeadministration.

2.100 Modifications associated with changes in the situation of civil servants are taken intoaccount late. Presently, the Payroll Directorate of the DGBF uses the Year 2000 Payrollapplication. The payroll database is updated on the basis of administrative documents and

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computer records transmitted by the Civil Service Directorate, the DAAFs of ministries,public agencies and institutions. Newly-recruited employees are not registered in thesystem until after an average period of more than 3 months from the date of theirassumption of duty. This delay before civil servants are registered, which concernsespecially teachers, is associated with the delays in the transmission of files. Changes inthe situation of civil servants are taken into account from the date of transmission of thefiles to the Payroll Directorate, i.e. with a minimum delay of 3 months.

Internal controls of non-salary expenditures

2.101 In the framework of the budget reform, Decree No. 98-445 of August 4, 1998transformed the DAAFs of the ministries into delegate credit managers of theGovernment’s Budget. These functions and delegations were confirmed by Decree No.98-716 of December 16, 1998 which defines the procedure for execution of expendituresas well as the role of the different actors. As part of this regulation, the Ministers aremere credit administrators, whose functions are delegated (Articles 11 and 16 of DecreeNo. 98-716) to officers placed under their authority.53 The expenditures are incurredaccording to three types of procedure: the normal procedure, the simplified procedure andthe procedure of payment without prior authorization.

Normal Procedure

2.102 The normal procedure is presented in Annex 3. It is composed of 4 stages:commitment, validation, order to pay and payment. The first three stages correspond tothe administrative phase and are the responsibility of the credit manager and the creditadministrator. Payment represents the accounting phase. It is the responsibility of theAccountant. All the expenditures are controlled by the Financial Control Directorate andthe Public Accountant. Moreover, all expenditure lines above FCFA 15 million, theceiling required for procurement, are blocked in the system, with the aim ofsystematically requiring the opening of public procurement file for this type ofexpenditures.

Simplified Procedure

2.103 Expenditures eligible under this procedure are fixed by Decree No. 98-716 ofDecember 16, 1998. In this case, the financial controller accepts that the commitmentand order to pay operations are carried out simultaneously and on the spot he controls thesupport documents to ensure the effectiveness of the service provided before theauthorization of the expenditure.

53 Prior to the reform introduced by SIGFIP, the payment authorization was given by the Service Autonome deCentralisation de l’Ordonnancement (SACO), which centralized virtually all the operations carried out in theadministrative phase of the expenditure (commitment, validation and order to pay).

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Payments without prior authorization

2.104 According to the texts, the following expenditures may be paid without priorauthorizations: (i) reimbursements of Treasury Bills; (ii) cancellations, refunds andreturns; (iii) the expenditures following rulings and condemnations not subject to appeal;(iv) exchange losses; and (v) certain automatic deductions made on cash flow accounts.

2.105 The control a priori of government expenditures is exercised by the Financial ControlDirectorate placed under the authority of the MEF. The attributions and functioning ofthis Directorate were established by a 1995 decree. Its main function consists incontrolling expenditure commitments under the general budget, with the understandingthat the expenditures of the EPN are controlled by the Budget Control Directorate. Thiscontrol concerns the availability of budget funds, the quality and legality of theexpenditure (conformity with the texts in force). Concerning salary expenditures, thefinancial controller carries out controls on the management decisions on staffing:recruitment, promotion, end of career.

2.106 The financial controller also intervenes at the stage of validation of the expenditure,before the order to pay phase to verify: (i) that the order really corresponds to acommitment already approved by him; (ii) that the invoice had been correctly preparedand that the support documents are attached to the file; and (iii) that the service hasactually been rendered, i.e. that the services or delivery have actually been effected. Thiscontrol should be done within 8 days of service or supply provision. The financialcontrollers are supported in this task by verification officers. At the central level, eachfinancial controller is in charge of expenditures of several ministries. At thedeconcentrated level, each financial controller is in charge of expenditures of allministries that have a local representation.

Strengths

2.107 The procedures are clearly defined by the regulation in force and described in themanuals of procedures. The regulation on the execution and control of the budget maybe considered as complete and adequately detailed. This regulation is explained in themanuals, which present in detail the various procedures and their conditions ofimplementation. These manuals are intended for the various services: DGBF, TreasuryServices, DGMP, SIGFIP, Payroll Directorate, Directorate of Budget Policies andSyntheses, CDRP, IGF, DCF, Directorate of Government Property. They have theundeniable advantage of facilitating uniform use of the procedures by these variousservices.

Weaknesses

2.108 The control carried out by the financial controllers lacks efficiency. The financialcontrol does not entail a ranked control of expenditure files. Hence, the risk assessmentmethod is not used and all files presented are controlled according to the same rules,irrespective of the amount involved. The effectiveness of the financial control may alsobe appreciated by comparing the budget estimates to outturns. In this regard, the CGAF

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under Article 62 “Purchase of goods and services” reports an execution rate of 142% in2004 and 110.1% in 2005, thus reflecting overspending. Hence, the measures forcontrolling commitment of expenditures exist, but, as they are not based on a riskassessment, they lack effectiveness. They do not cover all expenditures and are notalways respected.

2.109 The normal expenditure procedure is only used for a low percentage ofexpenditures. As shown in Annex 6, as reported by the financial controller, the normalexpenditure procedure is used for a low percentage of expenditures. The use of thesimplified expenditure procedure has virtually become the rule because out of totalapproved mandates of FCFA 1,326 billions, 1,178 billion followed this procedure. Theregulation (Article 68 of the 1998 Decree) establishes a limited list of expenditures thatcan be made according to this procedure, which is characterized by the simultaneousissue of the commitment and the order to pay. A major part of these expendituresconcerns transfers to the EPN and public enterprises and the territorial communities (29%of the actual revenues for fiscal 2006), whose expenditures are controlled not by thefinancial controller but through the budget control. Hence, during fiscal 2006, thefinancial controllers cleared a total amount of payment orders of FCFA 1,344 billion(central level plus local level) while they only controlled 68 billion of commitments. Itwould be necessary to review this type of practice by limiting the simplified procedure toexpenditures of an exceptional or emergency nature, in order to give back to the financialcontroller, for the majority of budget expenditures, his real role as the upstream controllerof public expenditure.

2.110 Certain controls are redundant. The Public Accountant (PGT at the central level) alsoexercises, before taking charge, control of non-salary expenditures. This control, whichconcerns all the support documents attached to the expenditure file, may result inrejections. It is based, among others, on the evaluation at the time of the order to pay ofavailability of adequate budget credits. Since this type of control has already been madeat the commitment stage by the financial controller, the question is whether this newcontrol is relevant.

2.111 The rules concerning the treatment of expenditures are clear but incomplete. In thisregard, Decree No. 98-716 of December 16, 1998 and its draft application instruction donot define deadlines for the different actors of the chain, except a period of 8 days for thefinancial controller, at the stage of approval of the commitment and order to pay. Therecommendations of the seminar on optimization of public expenditures dealing with theestablishment of deadlines should, therefore, be implemented for each of the actors of theexpenditure chain.

2.112 The credit managers need training. The implementation of the expenditures of theministries is ensured by the delegate credit administrators, namely the heads ofadministrative units. The latter submits commitment requests to the DAAFs. In someministries, the high number of credit administrators may cause delays in the treatment offiles by the DAAF, all the more so since the credit administrators do not always haveadequate capacities.

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2.113 The reliance on payment of expenditures through cash advances without priorauthorization was very common until 2007 and represented considerable amounts.Since for some years, up to 2007, the budget was adopted with much delay, theGovernment executed expenditures in the form of advances. These advances were oftenput in place at the initiative of the DGBF and managed by the Paymaster-General of theTreasury (PGT). They feature in the general balance of the accounts under Accounts 471,for the general accountants, and 472 for the accountants of the Treasury. Account 470.1“Expenditures paid before prior authorization” shows a balance of FCFA 309 billion inthe balance of the Treasury as of October 31, 2007. In 2006, these types of expendituresin the CGAF account amounted to FCFA 607 billion and represented 32.4% of the totalamount of expenditures entered in the 2006 accounts. Even if they are later regularized,these expenditures evade a priori control. Indeed, the financial controllers are notinformed of their issue, which confirms the particularly non-transparent nature of thistype of practices. Besides, this procedure entails notably the risk of not being able toregularize these expenditures, i.e. not being able to impute them to the budget, due to aneventual lack of budget credits. The results of the budget execution may thus be distorted,the public procurement procedures risk to be bypassed, and the transparency andaccountability in the use of public resources is weakened.

Internal and external scrutiny

2.114 The internal audit is ensured by the General Inspectorate of Finance (IGF), GeneralPublic Inspectorate (IGE), the Public Expenditure Review Unit (CRDP) and the internalcontrol structures of Ministries. The external scrutiny is ensured by the Chamber ofAccounts of the Supreme Court and the National Assembly.

Strengths

2.115 The structures required for internal audit are inadequate. The internal audit isensured mainly by the General Inspectorate of Finance (IGF), whose mission is to controlall administrative units using public funds. But the General Public Inspectorate (IGE),whose position has evolved over the years, is also charged with the mission of verifyingall the public structures by conducting financial and accounting audits, as well asoperational audits focused on good governance. The audits that IGE undertakes should beauthorized by the Presidency. Its reports are sent to the Presidency as well as to the entityaudited. Its activities for fiscal 2006 included audits of the city of Abidjan, the fishingharbor, the security structures, the Ministry of Justice, the national printing house as wellas court registries. The road safety office, some general councils, districts and communeswere also audited. These controls generally concern the administrative and financialmanagement. The IGE considers that the recommendations it makes in its reports areimplemented.

2.116 A public expenditure review unit enhances the control mechanism in place. Thecontrol activities of disbursement of resources to the primary service delivery units madeby the ministries are sometimes completed by interventions of the Public ExpenditureReview Unit (CRDP) which was established in 2002. This unit, which is placed under theauthority of the DGBF, is in charge of carrying out every evaluation on the execution of

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public expenditures. Its reports are sent to the Budget and Finance General Director. Itconducted in 2006, an audit of the grants and schooling fees granted to privateeducational institutions, and an audit of management of school cafeterias. This unit alsoexecuted inspection missions focused on three EPN: PSP-CI, the INHP, and the CHU deTreichville. In addition, in the same period, this unit conducted a public expenditurereview of departments and districts in the framework of piloting a module targeting fivedepartments and two districts. This unit should however be considered as transitory.Indeed, its areas of intervention constitute an integral part of the attributions of the IGFand the Chamber of Accounts and the CRDP should eventually disappear when these twoorganizations attain an adequate level of effectiveness.

2.117 The procedure for examination of the draft Budget Law by Parliament is clearlydefined. The procedure for examination of the draft Budget Law by Parliament featuresin the National Assembly’s Standing Orders. The Economic and Financial AffairsCommission of the National Assembly organizes sessions for questions addressed to theMEF and his collaborators. MPs who are not members of the Commission mayparticipate in these sessions, but they do not have voting right. The Commission carriesout controls on the allocation of resources (bearing in mind the concerns of thepopulations), the sources of funding of expenditures, and the fiscal provisions (new taxes,exemptions, etc.). It also examines the budget policy elements presented by the MEF insupport of the fiscal annexes. Discussions often take place on the level of external anddomestic debt. Amendments may be proposed in writing but they cannot result in anincrease in expenditures except when they contain proposals on corresponding newrevenues.

Weaknesses

2.118 The IGF conducts mostly financial audits. This organization has about twentyinspectors, who consider themselves insufficient in number, and it sometimes resorts toprivate firms which it supervises. Its audit method is defined in a procedures manual. It isbased on the ranking of risks and is in conformity with international standards. But theIGF basically carries out financial audits and only intervenes exceptionally on theorganizational and structural aspects (monitoring of the systems) of the controlledadministrations. It should however be specified that the IGF is, since a few months ago,interested in the monitoring-evaluation system. According to the declarations of itsrepresentatives, its activities will now be geared in that direction. Consequently, it will benecessary to strengthen the competences of this entity to enable it to accomplish thismission.

2.119 The IGF has no control over its timetable and its reports are not disseminated. TheIGF reports are transmitted to the entity audited and to the Minister of Economy andFinance but they are prepared in a highly irregular manner. The IGF attributes thissituation to the fact that their audits are conducted at the request of the top hierarchywhich does not allow them to respect their program of activities. It also reported that thetexts do not oblige them to systematically transmit their audit reports to the SupremeAudit Institution (Chamber of Accounts).

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2.120 The recommendations made in the IGF reports are not implemented. The IGFprepares an annual program of activities as well as a strategic action plan. The executionis in general less than the planned activities. Concerning the other control structures, theinspectors feel that there is no redundancy between their interventions and those of theIGE, an organization with which they do not coordinate their activities. The monitoringof the conclusions and recommendations of the internal audit is not ensured. This lack ofmonitoring constitutes one of the major issues of IGF concern, which reports that thefollow-up of its recommendations are left to the discretion of the hierarchy.

2.121 The Chamber of Accounts, a Supreme Audit Institution created in 1961, has notbeen transformed into an Auditor General’s Office. The Constitution of 2000upgraded this institution to an Auditor General’s Office, but, because of the crisis, thechange could not be realized and the organization has remained a Chamber of Accountsdepending on the Supreme Court. It has a triple mission: jurisdictional (judgment of theaccounts of public accountants), management control and examination of the draft budgetexecution review law.

2.122 The activity of the Chamber of Accounts in the area of judgment of public accountsis very weak. The management accounts of the State have not been judged since 1978,those of the National Public Agencies have never been judged and those of the territorialcommunities have only been partially judged (about one hundred for each of the 2002and 2003 fiscal years). According to investigations, the management accounts of the Statehave not been produced since 1998. However, the DGTCP affirms that this productionhas actually been finalized. It must be noted, however, that the Chamber of Accounts hasnot adequate place for stocking the support documents, which represent importantvolumes. As a result, the latter are kept in the offices of the MEF.

2.123 The audit activity of the Chamber of Accounts is inadequate. The Chamber ofAccounts only conducts three audits per year. Concerning its management controlactivities, the Chamber of Accounts conducts audits: it conducted three audits of EPNduring the year 2006, including control of the operations of the Caisse Nationale dePrévoyance Sociale (CNPS). Hence, the audits carried out by the Chamber of Accountsduring fiscal 2006 largely cover less than 50% of total expenditures.

2.124 The examination of the draft Budget Execution Review Law by the Chamber ofAccounts is conducted with much delay. Hence, the draft Budget Execution ReviewLaw currently examined is that of 2003, having been specified that the document wassubmitted by the DGBF only in July 2006. A report on the execution of the budget law istabled at the same time as the examination of the draft budget review act. In this regard,the most recent exercise is that of 2002. After reconciling the administrative accounts ofthe credit manager and the balance of Treasury, the Chamber issues a certificate ofconformity between the entries of the DGBF and those of the Treasury.

2.125 The reports of the Chamber of Accounts are not presented to Parliament within thedefined deadlines. The Chamber of Accounts prepares an annual activity report which ispublished in the Gazette. It also prepares a bi-annual report on the entities audited whichcontains, notably the monitoring of follow-up of the recommendations made. This

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follow-up is generally difficult to ensure. This document is addressed to the President ofthe Republic as well as to the National Assembly. However, the Chairman of theEconomic and Financial Affairs Commission of the National Assembly declared that henever received it. The last report on the budget execution dates back to fiscal year 2002.It was developed and produced in April 2004 hence, with a very important delay after theend of the period under review.

2.126 During the last two fiscal years, Parliamentary control was not possible because ofthe crisis. During the preparation of the budget law of the fiscal year 2005, the Economicand Financial Affairs Commission of the National Assembly undertook the examination:(i) of the budget policies; (ii) the major aggregates; as well as (iii) details of expendituresand revenues. However, since the draft budget is prepared on the basis of an annualframework, the Commission could not examine the medium term financial framework orthe medium-term priorities, which are not yet defined. Due to the crisis, the budgets forthe 2006, 2007 and 2008 fiscal years were adopted by Ordinance.

2.127 The Budget Law is always voted late by the National Assembly. Since the beginningof the crisis, except for the 2006, 2007 and 2008 fiscal years during which theGovernment intervened by Ordinance, the draft budget law was tabled at the NationalAssembly with a delay of three or four months, and the MPs were given only one monthto examine it. The budget has never been voted before the month of May of the fiscalyear concerned. It is important to also underline that the 2006, 2007 and 2008 budgetswere not voted by the National Assembly. The voting of the budget by the NationalAssembly should be resumed as early as possible.

2.128 The Budget Execution Review Law is voted with a lot of delay. The budget executionreview law, which is produced with much delay, is a very brief document which does notcontain any analysis on the budget execution data. The most recent one dates back to2001. The 2002 draft budget execution review law has been examined by the Chamber ofAccounts and submitted to Parliament. The draft budget execution review law for the2003 fiscal year is being examined by the Chamber of Accounts. The delay in thesubmission for external scrutiny is, therefore, very long and the a posteriori control ofbudget execution by the Assembly of representatives of the people loses all its meaning.It should be added that the latest budget execution review law adopted in 2000 and 2001only present the execution of expenditures according to their nature.

2.129 The National Assembly cannot examine external scrutiny reports. During the pastthree years, the National Assembly did not receive any report on external scrutiny fromother external control organizations or institutions except the bi-annual report of theChamber of Accounts, which is addressed to the Chairman himself but which is notbrought to the attention of members of the Economic and Financial Affairs Commission.The Chamber of Accounts transmitted in October 2006 to the National Assembly, the2002 draft budget execution review law. During the past three years, no hearing has beenorganized by the Economic and Financial Affairs Commission of the National Assembly.Over the same period, the National Assembly did not make any recommendation ofmeasures that would be related to the findings identified in the reports from the externalcontrol institutions.

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Risks

2.130 The non availability during the mission of information regarding the taxpayers’ appealsdid not allow assessing the transparency in this area.

2.131 The lack of timely information on the availability of funds may favor the emergence ofirregular practices among the administrators for fear of risks of blocking funds.

2.132 The existence of redundant controls of expenditure may overburden and therefore extendthe expenditure procedure.

2.133 The lack of a posteriori examination of public accounts risks translating into a reductionof the Government’s incentive to efficiently allocate resources and execute the budget inaccordance with the policies that served as basis for the preparation and adoption of thebudget. In the absence of sanction, it may also result in the lack of accountability of theadministrations. The quality of the administrative and financial services may be reduced.

Recommendations

In the short-term

Provide taxpayers with better information on the possibilities of administrative andjudiciary appeal.

Develop audit programs for the fiscal administration anchored on risk-based criteria. Make budget credits available to the ministries on a quarterly basis. Propose to Parliament to vote a ceiling of public borrowing in the framework of the

annual budget law. Limit the use of simplified expenditure procedures to the cases provided for by the

regulation. Rationalize the expenditure chain (abolition of redundant controls, institution of a

deadline for each phase, risk-based controls). Adopt an Instruction of the DGTCP for making available the management accounts of

the public accountants to the Chamber of Accounts.

In the medium-term

Provide the Accounts Officer of the Debt Department with resources for monitoring thedebt stock and interfacing the SYGADE system with the SIGFIP and ASTERapplications.

Train the IGF in management control audits and establish a mechanism for following-upits recommendations.

Strengthen the IGF capacity with human, material and financial resources in order toallow meeting the requests from the top hierarchy and fulfillment of its program ofactivities.

Adopt and implement a timetable for presentation of the budget execution review laws tothe National Assembly.

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Adopt and implement a timetable for clearing the management accounts of publicaccountants.

G. SUMMARY OF THE RECOMMENDATIONS

2.134 The recommendations of the review are specified in the following global action plan(Table 2.2). They were finalized during the validation workshop of the review held inAbidjan on June 16-17, 2008.

Table 2.2: Global Action Plan for Public Financial Management(Including the priority actions presented in the priority action plan)

Problems encountered Measures to be taken Responsibleparties

Technicalassistancerequired

(Low,Average,

High)

To becompleted

before:

A. The legal and institutionalframework

The lack of internalization of theWAEMU Guidelines in the national lawharms the coherence of the public financemanagement system

Transpose the WAEMU Guidelines(currently being reviewed) early nextyear after their adoption

MEF L In the yearfollowing theiradoption at theWAEMU level

B. Credibility, comprehensivenessand transparency of the budgetand policy-based budgeting

The amount of government domestic andexternal arrears is very large

Establish a global arrears clearanceplan

DGBFDGTCP

L December.2008

The functional nomenclature is not inconformity with the classification offunctions of public administrations(COFOG) of the 2001 Manual ofGovernment Finance Statistics

Integrate the functional classification inaccordance with the 2001 GFS into thebudget nomenclature, and identifypoverty reduction expenditures

DGBFMinistries

L December 2008

The budget document is difficult to readand is not complete

Present the budget by breaking downexpenditures by nature for eachministry and presenting theexpenditures by function and sub-function

DGBF L December 2009

Public revenues are not all accounted forin the budget operations

Budget the quasi-fiscal revenues fromthe oil and cocoa/coffee sectors

Prepare an inventory and budget therevenues collected by ministries

DGBF

DGBF

L

L

2009Budget

2009 Budget

The rules on allocation of Governmentresources to the territorial communitiesare incomplete and may cause disparitiesbetween the communities

Adopt decrees defining the rules onallocation of government resources tothe territorial communities

DGBFDir Terr.Comm.

A December 2009

Public access to budget information islimited

Post the Government’s budget on theMEF website

DGBF L Immediate

During the past three fiscal years, thebudget was never voted before thebeginning of the fiscal year

Adopt the Budget Law before thebeginning of each fiscal year (January1)

MEF L December 2008

There is no national inventory ofinvestment projects

Establish a national inventory ofprojects

DGBFDGP

A December 2010

C. Accounting, recording and

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(Low,Average,

High)

To becompleted

before:

reportingThe monitoring of suspense and advanceaccounts is inadequate and the balancesof these accounts are quite considerable

Systematically clear the suspenseaccounts and ensure regularization ofthe general public accounting

DGTCP A December 2008

Control of disbursement of resources tothe units for primary service delivery isnot adequately ensured

Intensify the control of the allocation ofresources to the primary servicedelivery units

DGTCPMinistries

A December 2009

The SIGFIP does not produce adequateinformation on the execution of thebudget. The budget execution reports arenot systematically published.

Systematically produce every quarter areport on execution of the budget lawwhich identifies the poverty reduction-related expenditures. Post thisinformation on an Internet site within 6weeks after the end of the quarter.

DGTCP L Immediate

The process of transfer of informationfrom the SIGFIP system to the ASTERsystem is not totally secure.

Complete the interfacing of the SIGFIPand ASTER applications

DGBFDGTCP

A Mid 2009

The software to manage the expenditurechain (SIGFIP) and the payroll are notinterfaced

Complete the project on integration ofthe administrative and financialmanagement of the payroll (SIGFAE)and provide for the possibility ofautomatic transfer of data from thepayroll into SIGFIP

DGBFDir. Payroll

A December 2009

D. Predictability, internal andexternal controls of budgetexecution

It is not possible to evaluate completelythe taxpayers appeals mechanisms

Provide taxpayers with betterinformation on the possibilities ofadministrative and judiciary appeal

DGIDGD

L December 2008

The audit programs of the fiscaladministrations are not based on clearrisk assessment criteria

Establish audit programs for fiscalauthorities, anchored on risk-basedcriteria

DGIDGD

L December 2008

The provisions on making available thebudget credits introduce rigidity in theexecution of expenditures

Make funds available to ministries ona quarterly basis

DGBF L 1st Quarter2009

Parliament does not define an annualdebt ceiling

Propose a vote of Parliament on aceiling for public borrowing in theframework of the annual budget law

MEFParliament

L December 2008

The normal procedure for expenditure isonly used for a low share ofexpenditures. Reliance on payment ofexpenditures through cash advanceswithout prior authorization is frequentand represents important amounts

Limit the use of the simplifiedexpenditure procedures only to thecases provided for by the regulation

MEFMinistries

L December 2008

The expenditure chain is complex andlong

Rationalize the expenditure chain(abolition of redundant controls,institution of a deadline for each phase,risk-based controls)

DCFDGTCP

L December 2009

To justify its very low level of activity interms of control of accounts of publicaccountants, the Chamber of Accountsargues that the management accounts arenot produced by the public accountants

Adopt an Instruction of the DGTCP formaking the management accounts ofpublic accountants available to theChamber of Accounts

MEF A December 2008

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(Low,Average,

High)

To becompleted

before:

The reconciliation of data between theDebt Department and the debt accountsofficer can only be partially done

Provide the Debt Accounts Officer theresources to monitor the debt stock andinterface the SYGADE system with theSIGFIP and ASTER applications

DDPDGTCP

A December 2010

The evaluation of the wage bill is notbased on an exhaustive list of budgetpositions

Institute an accounting of budgetpositions

DGTCP/DFPMinistries

L December 2010

The IGF only conducts financial audits.Its reports are not disseminated. Itsrecommendations are not implemented

Train the IGF in management controlaudits and establish a system forfollowing up its recommendations

IGF A December 2010

The activity of the Chamber of Accountsin the area of judgment of publicaccounts is very weak. The examinationof the draft budget execution review lawby the Chamber of Accounts isconducted with much delay

Issue the certificate of conformity ofthe draft budget execution review lawswithin the ten months following theend of the fiscal year

Promulgate the organic law creatingthe Auditor General’s Office, appointthe judges and provide it with anadequate budget

Publish and post on the Government’sofficial Internet site the budgetexecution review law (starting with theone’s for 2005 and 2006)

Follow-up identified misappropriations

Chamber ofAccounts

Presidency

MEF

MEF/AJT

H

L

L

L

October 2009

Mid-2009

December 2008

Starting 2009

3. REVIEW OF THE PUBLIC PROCUREMENT SYSTEM

A. CONTEXT OF THE REVIEW

3.1 Following the 2004 CPAR, there has been some improvement in the procurementsystem. The main weaknesses observed concern the non-separation of the regulation andcontrol functions, the slow pace of the process to decentralize and deconcentrate thefunction, the lack of a national capacity building strategy and the inexistence of anindependent mechanism for managing complaints and amicably settling differences. Thenew National Procurement Code entered into force in April 2006 and manyimplementation texts have been adopted, thus enhancing the transparency of theprocedures. The Integrated Public Procurement Management System (SIGMAP) wasestablished and made operational in Abidjan (Communes and Administration) since2006, thus facilitating the process of effective deconcentration and decentralisation of thefunction. A website and a Journal devoted to public procurement have been establishedand made accessible in order to better disseminate information on business opportunities,results of some adjudications and certain statistics on the procurement process. Progressmade in the implementation of the 2004 CPAR is presented in detail in Annex 8 of thisreport.

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3.2 However, there are still some challenges to be met as shown by the results of thejoint review of the public procurement system. It is also important to stress that theamount of public expenditures subjected to procurement (excluding local communitiesand parastatals) in 2006 hardly represented 1% of GDP, i.e. far below the average of 4%in Côte d’Ivoire during the period 1994-2002. These results are presented in detail inVolume III “Public Procurement Assessment Report” of this review. The review wasconducted in conformity with the OECD/DAC methodology and organized around thefollowing four pillars, and was conducted by the Ivorian authorities, the World Bank andthe African Development Bank:

Pillar I: Legislative and Regulatory Framework, Pillar II: Institutional Framework and Management Capacity, Pillar III: Procurement Operations and Market Practices, Pillar IV: Integrity and Transparency of the Procurement System.

3.3 The Government pledged to adopt in 2008 a priority reform action plan to addressthe major weaknesses. By relying on the conclusions of the joint assessment, theimplementation of the plan should be done in a coherent manner and within the agreedtimeframes. In the coming years, progress in the strengthening of the public procurementsystem will be measured taking into account the baseline situation established in theabove-mentioned joint assessment. In order to provide the necessary information for thedesign and preparation of the Government’s action plan, after the general overview, thischapter presents by pillar the existing situation with its strengths and weaknesses,indicates the risks associated with the weaknesses identified and recommends correctiveactions. The synthesis of the recommendations for improvement of the nationalprocurement system is presented at the end of the chapter, as well as the global actionplan.

B. GENERAL OVERVIEW

3.4 Overall, the quality of the public procurement system in Côte d’Ivoire is slightlyabove average.54 Despite a well-structured regulatory framework broadly in conformitywith international standards (Pillar I, average score of 2.2), there are weaknesses thataffect the principles of transparency and efficiency of the system which reduce the scopeof the reform efforts implemented since 2004 (Pillar IV, the lowest score, i.e. 1.0).Concerning the institutional framework and management and operational capacities, thesystem presents a score slightly above average (1.7 and 1.8, respectively). In figure 3.1below, the results of the joint assessment are aggregated by indicator and pillar inaccordance with the OECD/DAC methodology and use a simple average calculation.

Figure 3.1: Côte d’Ivoire Public Procurement AggregatedScore by OECD/DAC Pillar

54 The review assigned a score of 1.5, which corresponds to the average of the scoring system adopted by theOECD/DAC.

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3.5 It is important to underline the disparity between the scores by indicator. Indeed, asindicated in Figure 3.2 below, there are still some major challenges to meet in areasconcerning institutional development capacities (inadequate linking of procurementplanning with budget planning, lack of an independent regulatory body and a strategicvision for capacity building), procurement operations and practices (considerable needsin training of public and private actors), mechanisms for control and audit of publicprocurement, and measures for promoting ethics and fighting against corruption. Thesummary explanation of the score for each of the 12 OECD/DAC indicators and relatedstandards is presented in the annex to this report (Volume III, Public ProcurementAssessment Report).

3.6 It should also be stressed that public expenditures subject to public procurementcontracts in 2006 was well below the country average before 2002. Publicexpenditures (CFAF 121.9 billion55) subject to procurement (excluding localcommunities and parastatals) in 2006 hardly represented 1% of GDP. Apart from the factthat it does not include public resources granted to the local communities and theparastatals, such as the SOEs, this amount is far below the country average (4% duringthe period 1994-2002)56 in the area of public expenditures subject to public procurement.

Figure 3.2: Public Procurement – Aggregated Scoring by OECD/DAC Indicator

55 Source: Public Procurement Journal - June 2007 Edition.56 Source 2004 CPAR

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NB: In bold, indicators above average (1.5).

C. PILLAR I: LEGISLATIVE AND REGULATORY FRAMEWORk


3.7 Concerning the Legislative and Regulatory Framework of public procurement,remarkable efforts have been made for harmonizing it with international standardsincluding those of the WAEMU Guideline. The Public Procurement Code was adoptedby Decree No. 2005-110 of February 24, 2005 and entered into force in April 2006, andthe authorities are pursuing the process of total harmonization of the present code withthe said Guidelines.

Strengths

3.8 In most cases, the provisions of the public procurement code meet the requirementsof the indicators of the OECD methodology, international standards as well as thoseof the recent WAEMU Guideline (05/CM/2005) adopted in December 2005. TheCode imposes on the contracting authorities many obligations aimed at ensuring greatertransparency of the system, notably in the area of planning, equal treatment of bidders,publicity and greater objectivity of the qualification and evaluation operations. Opencompetitive bidding becomes the main procurement method and the cases justifying theuse of other methods are governed by the regulation.

3.9 Many implementation texts and regulation procedures have been adopted.Concerning the implementation texts, it is important to mention those regardingattributions of the Department of Public Procurement, the procurement ceilings andprocess of validation and approval of public procurement. The detailed description ofthese texts is provided in Volume III of this report. In the area of regulation procedures,

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several pamphlets have been drafted within the Department of Public Procurementexplaining the various types of procurement procedures defined in the regulation.

Weaknesses

3.10 However, the scope of application of the code should be more strictly defined, asseveral contracts are not covered, either because they are carried out directly betweenpublic entities without using the procurement procedures or because the code itselfprovides for waivers (contracts signed notably by private entities, delegations of publicservice).

3.11 Some procurement procedures are inadequately defined to guarantee the principlesof transparency and cost-cutting, with notably:

Cases of sole sourcing provided for by the code that are not in conformity withinternational standards including those of the WAEMU Guideline (for example additionalworks whose amount is above those that could require an amendment to the contract).The rate of sole sourcing (around 30%), though reduced compared to previous years ismaintained well above the limit accepted by good international practices.

The differentiation of the procurement ceilings on open competitive bidding (FCFA 120million for SOEs as against FCFA 30 million for ministries) is not justified since theceiling of contracts by open competition should only be based on the economicenvironment of the country and not the nature of the entity.

The rules governing the participation of public enterprises do not favor fair competition.Hence, concerning the BNEDT and the LBTP or other public services there are reservedforms of procurement which limit competition.

The transparency of the results could be improved by making provision for thepublication of the minutes of opening and evaluation of bids in accordance with OECDstandards and those defined by the WAEMU Guideline.

The Code does not provide for a specific chapter on tenders for intellectual serviceswhich may cause some confusion. On this point, it should be underlined that the Code isvague on a number of points, particularly on the different methods of selection,evaluation and opening of bids, etc.).

3.12 The analysis of the implementation texts in force revealed some issues of concernregarding the delegations of competence in the area of non-competitive procedures.Indeed, it is observed that there is some dilution of the a priori control function ensuredby some people (Principal Secretary, Public Procurement Director) and not a controlstructure, and this situation does not seem to be in conformity with the more specificprovisions of the WAEMU public contract Guideline No. 5.

3.13 Major implementation texts are still in a project state. It concerns particularly thedecree on organization and functioning of the system for settling differences and disputesin the public procurement procedure and the decree on modalities for implementation andfollow-up of the recommendations of the audit of public procurement. These two basicfunctions required to ensure a good procurement system are not always effective. It

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should also be noted that their content does not often take into account the newinternational commitments of Côte d’Ivoire such as those resulting from the adoption ofthe two WAEMU Procurement Guidelines Nos. 4 and 5. However, the process oftransposition of this guideline is integrated into the framework of assistance provided bythe WAEMU Commission and the African Development Fund and consultations shouldbe launched very quickly. These texts are examined in the report attached (Volume III)with reference to the pertinent pillars dealing with the subject they referred to.

3.14 Standard bidding documents exist but have not yet been adopted at the regulatorylevel. The same applies to the cahiers des charges which are either non-existent orlargely anterior to the adoption of the new code. Work is ongoing to make up for thisdeficit and these documents should be finalized and adopted through the normal channel.It will of course be necessary to ensure that these new texts are in conformity with theabove-mentioned guidelines and the public procurement code. At the same time, a studyis ongoing (commissioned to BNEDT) for the purposes of constituting a databank ofindicative prices.

Risks

3.15 The regulatory risk is moderate. Indeed, if no text, however perfect is it can reduce therisk of fraud and slippages, it should be noted that the high percentage of sole sourcing,the tolerance revealed as regards to contracts signed outside the system (although they arecontracts budgeted on budget line items subject to procurement), and the agreementssigned between public entities are all areas where there are risks of slippages. However,the conditions imposed by the transposition of the WAEMU Guidelines, which shouldhave been implemented latest by December 31, 2007 compelled the Government to startthe review of this code. This constitutes no doubt an opportunity to finalize as early aspossible, the harmonization of the public procurement code with the good internationalstandards and subsequently reduce the risks.

Recommendations

In the short-term

Publish the minutes on opening and evaluation of bids;

In the medium term

Transpose WAEMU Guideline No. 4 to extend the scope of application of the Code andlimit the cases of sole sourcing;

Complete the set of standard bidding documents and have them approved through thenormal channel;

Complete and revise the implementation rules of the Code on the settlement of disputes,the regulatory body, sanctions, audits, the community preference margin, the categorizedlist of enterprises in conformity with the code and WAEMU Guideline No. 4;

Introduce in the code provisions aimed at restoring fair competition between publicenterprises and those of the private sector;

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Harmonize at the national level, the procurement ceiling according to the nationalcompetitive bidding (NCB);

Update and complete the General Conditions of Contract.

D. PILLAR II: INSTITUTIONAL FRAMEWORK AND MANAGEMENT CAPACITY


3.16 The analysis of the institutional framework and management capacity consists inassessing practically the mode of operation of the public procurement mechanism asdefined by the legal and regulatory framework, through the organizations andmanagement systems which are stakeholders in the general governance of the publicsector. In particular, it involves ensuring that the public procurement mechanism isintegrated and well incorporated into the public finance management system and that thebasic functions of definition of public procurement policies, training and collection ofstatistics actually exist and are performed under adequate conditions to guarantee theprinciples of transparency and efficiency required.

Strengths

3.17 The institutional framework and management capacity have been improvedthrough a set of mechanisms aimed at integrating the planning and monitoring ofexecution of public procurement into the public finance management. The newpublic procurement Code underscores the importance of procurement planning consistentwith budget credits allocated to the contracting authorities. The Integrated PublicProcurement Management System (SIGMAP),57 operational since 2006, ensures greaterrigor in the planning and execution of the procurement process, thus allowing for a bettercontrol of the commitment of expenditures and monitoring of the provision of services. Itis a basic tool facilitating the integration of procurement into the chain of publicexpenditure management. The SIGMAP is directly linked to the SIGBUD, the integratedbudget management system, the interface between the two systems ensuring in fact theprocess of creation of lines which are subject to procurement procedures.

3.18 The institutional framework has a normative regulatory and functional body whosepositioning is being revised to provide it with the required autonomy. The Order ofAugust 2, 2006 on attributions of the DMP created a regulation and regulatory sub-department comprising both a regulatory service and a service for management ofparticular regimes. This institutional framework does not ensure the separation of thecontrol and regulatory functions (appeals and audits). The Government, as part of theimplementation of the WAEMU Guideline No. 05/CM/2005 on public procurement,which clearly specifies a separation of the regulatory and control functions, recentlyadopted a road map for the creation of a national observatory on public procurement(ONMP). This is planned to be an independent administrative authority, tripartite andwith equal representation from the administration, the private sector and the civil society,

57 The computerized government contract management system (SIGMAP) has been established and inter-connectedto the public finance management system (SIGFIP).

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which will be in charge of regulating public procurement. It will exercise this authority incollaboration with the General Public Inspectorate (IGE), which will serve as its technicalsecretariat and to which are assigned the mission of independent audit, management ofappeals and application of sanctions. The Ivorian part has pledged to create andoperationalize the new mechanism by the end of September 2008.

3.19 Actions have been initiated to develop the capacities of the contracting authorities.Several training courses have been organized for the contracting authorities on therequirements of the new code, but these actions are still inadequate in view of theobjectives set following the 2004 CPAR. There is a training plan in the form of eightmodules, but due to lack of funding, only one has been organized.

3.20 The institutional framework has tools for data management and collection ofstatistics on public procurement. Indeed, improvements must be noted in terms ofaccess to information on public procurement due to the innovative implementation of thepublication of the Journal of Public Procurement, from appropriate software on the basisof the data generated and directly transferred by SIGMAP, and the establishment of awebsite managed by the Department of Public Procurement.

Weaknesses

3.21 The content of the regulatory provisions in the area of public procurement planningcould be improved. The provisions defined by the code in force should be enhanced inorder to facilitate the development of procurement plans well before the budgetarbitrations and make the availability of budget credits before launching procurementprocedures a regulatory obligation.

3.22 The linking of the planning of procurement with budget planning is still inadequate.The DGBF underlined the absence at the level of some contracting authorities ofprocurement plans prepared with all the rigor required, both at the technical level and interms of cost. Besides, the fact that certain contracting authorities (EPN, SODE,Communities, etc.) are not taken into account by the SIGMAP58 does not facilitate anexhaustive coverage and control of contracts by the DMP,59 and the efficiency of thesystem is however affected by the tolerance revealed towards contracting authorities thatsign contracts outside the said budget lines. (cf. para. 3.15). Finally, delays in thesettlement of invoices are frequent, which have an impact at the level of the budgetregulation left to the contracting authorities often without the necessary capacity.

3.23 The independence of the future ORMP vis à vis the MEF and the IGE is yet to beconfirmed. Indeed, compared to the principles defined both by the indicators of theOECD methodology and the WAEMU Guideline No. 5, it is necessary to indicate that theindependence of the Observatory considered as an independent administrative authorityattached to the Ministry of Economy and Finance should be assessed in the short-term.

58 This is mainly due to the fact that SIGBUD to which SIGMAP is linked does not take into account thesecontracting authorities.59 Department of Public Procurement.

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Similarly, it is noted that there is a break-up of the regulation functions as defined by theGuideline, since the body in charge of regulation is not in charge of the audits, as this roleis assumed by the IGE. The implementation texts of the roadmap should, therefore definethe functional relationships between the Observatory and the IGE, which shouldguarantee an effective involvement of the Observatory in the initiative and the validationof the audits and in the follow-up of appeal decisions taken.

3.24 There is no global strategy for strengthening the capacities of actors of theprocurement chain. Indeed, the short, medium and long-term vision of capacity buildingin public procurement, including the needs and costs of training the public sector, theprivate sector and the civil society, and taking into account the policies adopted in thearea of deconcentration and decentralization of the functions of attribution, control andmanagement of public procurement, does not exist to ensure efficient and sustainabledevelopment in the area. Besides, this development of capacities should integrate theprospect of greater stability of procurement units within the administration and a careerdevelopment path of procurement specialists within the administration.

3.25 SIGMAP should be improved to integrate certain basic data for enhancingtransparency. This system should still be improved to integrate all the contractingauthorities and certain useful data in terms of prices and by distinguishing betweencontracts signed by sole sourcing according to the different cases authorized by theprocurement code.

Risks

3.26 The institutional risk is moderate. Indeed, if SIGMAP is a high quality tool, itsoperationalization is not yet complete among all the contracting authorities and itsmanagement functions are today, not adequately geared towards the detection of potentialfraud. Similarly, the attachment of the Observatory to the MEF and involvement of theIGE in the management of essential regulation functions (audit, sanction, settlement ofdifferences) are provisions that are yet to be clearly established during theoperationalization of the ORMP in order to ensure effective independence of its decisionsvis-à-vis the other actors of the system.

Recommendations

In the short-term

Implement the roadmap ensuring the separation of the control and regulation functions byoperationalizing the mechanism for regulating public procurement.

Develop a national training strategy (Global Training Plan – GTP) in the area to facilitatethe conduct of coherent and structured actions in what concerns to capacity building.

In the medium-term

Integrate the contracting authorities such as the SODE and communes into the SIGMAPand this, in liaison with the SIGBUD.

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Strengthen the capacities of the contracting authorities in the development ofprocurement plans upstream of the adoption of the budget.

Deploy the SIGMAP in all the main budget consuming contracting authorities.

E. PILLAR III: PROCUREMENT OPERATIONS AND MARKET PRACTICES

Description and evaluation of the current situation

3.27 This pillar focuses on the functioning and examines the operational efficiency andusefulness of the procurement mechanism at the level of the contracting authorities andthe functionality of the existing market. It is interested in the market as one of the meansof appreciating the quality and efficiency of the system at the time when the procurementprocedures are being put into practice.

Strengths

3.28 The operational capacities of the public sector have been considerably improved.Indeed, considerable progress has been accomplished in the area of making theprocurement and control authorities aware of their responsibilities60, and development oftools and mechanisms for managing the documentation.

3.29 Côte d’Ivoire also has an adequate legal framework for settling disputes, notably inthe area of arbitration. Concerning provisions on the management of contracts andresolution of disputes, a number of provisions of the code are in conformity with theindicators of the OECD methodology and those of the WAEMU Guideline No. 4 ofDecember 2005.

Weaknesses

3.30 The control and approval procedures are still highly centralized despite the progressmade in this area. The current deconcentration and decentralization arrangements forprocurement need to be strengthened respectively at the level of the control authoritiesand within the contracting authorities (Administration and Communities). Thisstrengthening should be rational and take into account the effective capacities of thebeneficiaries to assume these responsibilities, notably with a strengthening of the trainingactions in this area.

3.31 The mechanisms for dialogue with the private sector are still inadequate to facilitatethe establishment of a legal framework conducive to the development ofpublic/private partnerships and the capacities of this sector to improve its access topublic procurement. This strengthening should be a major orientation of the reformefforts given the post-crisis context, the number of agreements (type of public/privatepartnership) renewed in the area and the lack of transparency in which certain sensitive

60 Focal points and commissions for opening and judgement of bids have been put in place within the contractingauthorities; regional contract control departments have also been created.

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activity sectors are operating. A study with a view to establishing a system forcategorization of enterprises has been undertaken but it is not yet finalized.

3.32 Even if the private sector is relatively competitive, several constraints prevent itsaccess to public procurement. Indeed, several systemic obstacles persist and limit thecapacity of access of the private sector to public procurement, notably the under-invoicing of the reference price, unfair competition associated with the phenomena ofsocial dumping, difficult access to guarantees, long delays in issuing tax certificates andregulations.

3.33 The system suffers from a capacity shortage in the area of contract management,which affects efficient application of the legal and regulatory provisions on settlement ofdisputes. Moreover, although there is an adequate legal framework in the area ofarbitration, it should be observed that the judiciary tribunals are selected to settle localconflicts and that few disputes are brought before them. Finally, this system does notfacilitate the settlement of disputes associated with the non-collection of public debts.

Risks

3.34 The operational risk is high. Indeed, the instability of the staff (focal points) in chargeof controlling public procurement within the contracting authorities, currently observedon a small scale but which could become chronic depending on the nature of the socio-political context, could seriously affect the operationality of the system. There cannot bea good procurement system without a strategy to assess and strengthen capacities,without strategies and important training programs and especially without this strategybeing developed in a stable regulatory framework favoring the emergence of sustainableprocurement structures and a body of procurement specialists. The Government hasmobilized the funding of an institutional development project (PGDI) which shouldcontribute to the strengthening of the capacities of the actors of the public and privatesectors.

Recommendations

In the short-term

Develop sustained and regularly assessed training actions for public buyers and privatesector operators.

In the medium term

Ensure the participation of the private sector in the management of the Observatory ofPublic Procurement in order to promote the development of dialogue and partnershipbetween the public and private actors as well as an efficient public procurement system.

Adopt a mechanism for assessing the capacities to evaluate and justify the level ofresponsibility of the contracting authorities in the framework of the procurement,deconcentration and decentralization processes.

Strengthen the capacities of the contracting authorities in the development ofprocurement plans upstream of the adoption of the budget.

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Approve a legal framework for the development of public/private partnerships (PPP). Extend the resources for contract management through the SIGMAP to all the contracting

authorities.

F. PILLAR IV: INTEGRITY AND TRANSPARENCY OF THE PROCUREMENT MECHANISM


3.35 This Pillar focuses on aspects of the procurement mechanism and the governanceframework which are deemed necessary to offer the guarantee of a system, which: (i)functions with integrity; (ii) ensures appropriate controls facilitating its functioning inaccordance with a legal and regulatory framework; and (iii) has appropriate measures fordealing with corruption risks in the system. It ensures that they are defined and structuredin a way that will contribute to the integrity and transparency of the system.

Strengths

3.36 The a priori control of contracts signed by the contracting authorities is effective. Itis ensured by the Department of Public Procurement and deconcentrated or decentralizedstructures among the contracting authorities (Focal Point, Bid Opening and EvaluationCommittee), which carries out a priori control on all contracts whose amount is higherthan the a priori review ceiling61 established through the regulations.

Weaknesses

3.37 Very few actions have been undertaken with a view to improving the functioning ofthe entire mechanism for controlling public procurement. Certainly, there are lawsand regulations governing the internal and external control of public expenditureparticularly that of public contracts, but it should be observed that the a posterioriinternal control (DMP for the contracting authorities) and external control (Chamber ofAccounts, IGE) are not effective. The PEMFAR review observed that the GeneralInspectorate of Finance, in fact did not exercise any control over the procurementprocedures. The recent audits of the Chamber of Accounts did not reveal cases of fraud orcorruption in the public contracts, but this result can only be partially taken intoconsideration, given the fact that this institution does not exercise any control over theprocurement procedures. The lack of these external controls weakens the functionality ofthe control framework and makes it impossible to effectively identify irregularities asregards the compliance with the standards in force, fraud and other corruption cases. Thislack of control and limited access to information on public procurement for the generalpublic significantly affect the transparency of the system in place and also reduces thecapacity of the authorities to introduce on a constant basis, improvements in thefunctioning of the system at the level of the pillar.

61 The ceiling of a priori review by the DMP (or control ceiling) is fixed at CFAF 100 million, or aboutUS$250,000.

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3.38 The appeals mechanism provided by the code is not operational and could not beefficient in its implementation. Indeed, the Rules Committees, which were to beestablished since the last CPAR only express views subject to ratification by the Ministerresponsible for Public Procurement (who is at the same time the control, approval andappeal authority). The statutory positioning of the appeals body, not specified in the draftorders, is an issue of concern. Moreover, the non-jurisdictional conflict resolution entityshould have the capacity to automatically refer matters to it, and especially suchmechanism cannot be considered as independent if the decisions are subjected toratification.

3.39 The legal and regulatory framework for combating corruption in publicprocurement is inadequate. It is not integrated into a global strategy to fight corruptionwhose content could be implemented with reference to the provisions proposed byrelevant International Conventions (United Nations, African Union). The assessment didnot make it possible to establish the slightest proof of legal proceedings and punishmentfor corrupt practices. This situation is associated with the lack of audit of publicprocurement and of means and procedures for detecting fraud and corrupt practices.

Risks

3.40 The “integrity” risk is very high. The lack of a priori internal and external control andindependent audits on public contracts weakens the functionality of the controlframework and does not facilitate effective identification of irregularities in theobservation of standards in force, frauds and corrupt practices. Besides, the lack ofcontrol observed reduces considerably the capacities of the authorities to introduceconstant improvements in the functioning of the system and the scope of the progressobserved at the level of Pillar I. Finally, the lack of a functional mechanism foraddressing complaints affects the confidence of the national and international privatesector, thereby, reducing the competitiveness of the public procurement system. Theestablishment of a regulatory body constitutes a positive step forward, which canfacilitate the establishment, in the short-term, of institutions capable of ensuring thesettlement of differences and independent external control of public procurement.However, according to the roadmap mentioned in paragraph 3.23, the management ofcomplaints will now be assigned to the IGE. It will be necessary to ensure adequatedevelopment of the regulatory framework for its establishment. In accordance with theprinciple established by recognized international practices, and implemented in theWAEMU Directive No. 5, procurement shall be suspended as soon as the complaint isreferred to the contracting authority; the non-judicial body in charge of dispute resolutionmust have the right to hear a complaint on its own initiative. The decisions of the IGE donot need any ratification, as is the case today with the conciliation boards.

Recommendation

In the short-term

Apply the a priori and a posteriori internal control of public procurement and externalcontrol (non-jurisdictional audit) to any contracting authority.

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Pursue the development of the website and its links with the SIGMAP.

In the medium-term

Implement the roadmap in order to operationalize the regulatory body and the complaintmanagement mechanism.

Strengthen the capacities (human and logistical resources, and training facilities) of theIGE and the Chamber of Accounts to contribute to the improvement of the control ofpublic procurement.

Develop, approve and disseminate a code of ethics on public procurement. Operationalize the mechanism of the green line for detection and denunciation of fraud

cases.

G. SUMMARY OF RECOMMENDATIONS

3.41 Côte d’Ivoire has made substantial progress in recent years in terms ofimprovement of the procurement system, despite a difficult socio-politicalenvironment, notably through the establishment of a well-structured regulatoryframework broadly in conformity with international standards and functional operationalmechanisms. It should however be noted that the weaknesses of the system identified inthis assessment (notably, the weaknesses of Pillar IV) and the functional conflicts notedin Pillar II (regulation and control) are substantial, as they affect the basic principle oftransparency and substantial competitive bidding and reduce the scope of reform effortsimplemented since 2004. Besides, the amount of public procurement in 2006 representedhardly 1% of GDP, i.e. well below the country average (3.2% - 4.3% during the years1994-2002). This indicates that nearly 3% (FCFA 360 billion) are currently not coveredby the rules62 governing public procurement.

3.42 Some basic weaknesses require strong political will to overcome. If some weaknessesmay be overcome through adequate capacity building programs, the weaknessesidentified in Pillars I, II and IV relative to the Legislative and Regulatory Framework andManagement Capacity, on the one hand, and Integrity and Transparency, on the otherhand, require strong political commitment on the part of the Ivorian authorities. In casethey are not dealt with rapidly, some of these weaknesses, including notably theconsiderable cash advances, which make it possible to incur expenditures outside thepublic procurement framework, irrespective of the efforts deployed at the regulatorylevel, can only increase the cost of public procurement, increase corruption and result inan ineffective implementation of development programs. In fact, the transposition of thetwo WAEMU Guidelines may be for the Ivorian authorities an important opportunity toimprove considerably their procurement mechanism and the score retained by the review.

3.43 The recommendations of the PEMFAR assessment are specified and presented indetail in the following global action plan (Table 3.1). They were finalized during theworkshop (June 2008) for validation of results of the PEMFAR assessment. Building on

62 These expenditures are mainly incurred on cash advances or transfers to the communities or state-ownedcompanies for which the contracts are not always monitored by SIGMAP.

98

these recommendations, the Government has pledged to adopt an action plan to addressthe major weaknesses. They are in line with a short, medium and long-term phasing ofactivities presented as follows:

In the short-term, the efforts made should be consolidated and pursued in terms ofseparation of the functions of regulation and control before the end of September 2008and development of the information system in order to disseminate the resultsprocurement, collection and processing of data, conduct of independent audits ofcontracts, as well as in the area of training. These actions may be implemented as early aspossible, since notably, they do not require the adoption of additional regulatorymechanisms.

In the medium-term, the Government should institute measures for ensuring thesettlement of deficits observed at the regulatory and institutional level; (i) reduction ofcontracts by sole sourcing and improvement of the current provisions of the code toextend and intensify competition; and (ii) strengthening of the arsenal of implementationtexts and standard procurement bidding documents; and (iii) development of anindependent complaint management mechanism. To that end, it will be necessary toensure the implementation of the transposition of the WAEMU Guideline.

In the long-term, it is necessary to pursue and enhance the efficiency of the provisionsof audit, appeals, which should be incorporated in the global policy to combat corruption.These efforts can only really succeed if the private sector and the civil society areassociated with the implementation of these provisions.

99

Table 3.1: Global Action Plan for Public Procurement(Including the priority actions presented in the Priority Action Plan)

Problems encountered Measures to be taken Responsible parties TechnicalAssistancerequired

(Low, Average,High)

To becompleted

before:

Pillar I: Legislative and Regulatory Framework

A. 1 - Conformity of the legislativeand regulatory framework of publicprocurement with agreed standardsand respect the obligations in force

Scope of application that doesnot cover certain institutions(Parliament, …etc.) andauthorize waivers that mayreduce its scope ofapplication (public entities,delegations of public services,private entities)

Transpose the WAEMUGuideline No. 4 for extending thescope of application of the codeand make applicable toconcessions contracts the selectionmethods established in theWAEMU guidelines

MEF/DGBF/DMP L December2008

Cases of sole sourcing are toovast and favor its abusive use

Transpose the WAEMUGuideline No. 4


Lack of rules on participationof public enterprises capableof promoting fair competition

Transpose the WAEMUGuideline No. 4 and adoptrelevant implementation texts


Lack of publication of minutesof bid opening and evaluation

Transpose the WAEMUGuideline No. 4


Harmonizing at the nationallevel the procurement ceilingaccording to the AON

Conduct a study to determine aceiling in conformity with theeconomic development of thecountry and capacities of thenational private sector

MEF/DGBF/DMP H March 2009

A. 2 - Existence of implementationrules and documentation

The implementation rules ofthe code are incomplete(settlement of disputes,regulation body, sanction,audit, community preferencemargin, categorized list ofenterprises, see list in annexetc…)

Revise and complete the existingprocedures manual in accordancewith the code and WAEMUGuideline No. 4

MEF/DGBF/DMP HJune 2009

The models of bidingdocuments were not approvedthrough the normal channel

Complete the regulatory arsenalin accordance with the WAEMUGuideline No. 4

MEF/DGBF/DMP H June 2009

100


(Low, Average,High)

To becompleted

before:

The methods and assessmentof intellectual service tendersare not integrated into theregulatory mechanism defined

Review the Code for apresentation according to theWAEMU Guidelines


The general conditions ofcontract are non-existent ornot updated

Complete the regulatory arsenal inaccordance with WAEMUGuideline No. 4

MEF/DGBF/DMP H June 2009

Pillar II: Institutional Framework and Management Capacity

B. 1- Integration of publicprocurement mechanism into thepublic sector governance system

Weak capacities of thecontracting authorities in thedevelopment of procurementplans ahead of the adoption ofthe budget

Adopt a regulatory provisionguaranteeing the preparation ofprocurement plans at the technicaland financial levels in parallelwith the budget timetable

Establish a legal framework thatrequires contracting authorities toconduct feasibility studies beforeprojects are budgeted for

Establish a legal frameworkdefining project implementation

MEF/DGBF/DMP

MEF/DGBF/DMP

MEF/DGBF/DMP

H

H

H

March 2009

September2009

September2009

The budgets of the SODEsand Communes are notautomatically captured bySIGMAP

Adopt a legal text to define theneed to make available thebudgets of the SODE andCommunes at the beginning of thefiscal year

Support the implementation ofSIGESCOD with a view toharmonize the nomenclature ofthe budget of the communes withthe one of central government

Provide breakdown of the budgetof Institutions with a view tofacilitate monitoring of the budgetexecution and public procurement

MEF/DGBF/DMP/DPP/DOCD

MEF/DOCD

DGBF

L

H

L

December2008

December2009

December2008

101


(Low, Average,High)

To becompleted

before:

B. 2- Existence of a functionalnormative/regulatory body

No separation of the controland regulation functions

Operationalize the ONMP in linewith the WAEMU Guidelines tomanage policies, training, appeals

and audits63

MEF/DMP H June 2009

B. 3 - Existence of institutionaldevelopment capacities

The system for collection anddissemination of informationon procurement is notsufficiently developed, and isnot accessible to the publicfree of charge

Intensify the dissemination ofinformation on procurement andtheir accessibility to the public byreviving the website anddeveloping its functional linkswith SIGMAP

MEF/DMP A December2008

The system and procedures forcollection and monitoring ofnational statistics isincomplete, inaccessible to thepublic and is not sufficientlydeveloped to serve as aneffective tool for auditing theprocedures

Pursue the development ofSIGMAP and define a reportingformat, aligned to the WAEMUmodel, to help appreciate thequality of the system

MEF/DMP A June 2009

There is no national strategyfor strengthening thecapacities of the actors of thepublic procurement chain

Conduct a study on assessment oftraining needs of the differentactors, which will provide thebasis of a national capacitybuilding strategy in the area

MEF/DMP H June2009

The status of the procurementunits within the contractingauthorities, the function ofprocurement specialist, hishierarchic and statutorypositioning does not ensurethe sustainability of thesystem

Conduct a study to assessprospects to create a course onprocurement and financial control

Improve the sustainability of thestructures and agents (to beintegrated into the strategic study)

MEF/DMP

MEF/DMP

H

H

December2009

December2009

PILLAR III: Procurement Operations and Market Practices

C. 1 – The country’s procurementoperations and practices are efficient

The procurementdeconcentration anddecentralization mechanismshould be strengthened withinthe contracting authorities(Administration andCommunities) at the level ofthe control authorities

Adopt a mechanism for evaluatingcapacities that justifies the level ofresponsibility (conduct a study tothat end)

MEF/DMP A June 2009

63 The operationalization of the National Observatory for Public Procurement will consist of (i) adopting the legaltext(s) required for its establishment, organization and operation; (ii) appoint the key managers (Regulatory Counciland Technical Steering Committee); and (iii) allocate an appropriate budget for the operation of this entity.

102


(Low, Average,High)

To becompleted

before:

The capacities of the publicand private actors are notadequately strengthened

On the basis of the nationalcapacity building strategy,organize training workshops forgovernment buyers and operatorsof the private sector)

MEF/DMP H December2009

C.2 – Functionality of the publicprocurement contracts

There are no efficientmechanisms for partnershipbetween the public and privatesectors

Ensure the participation of theprivate sector in the managementof the National Observatory onPublic Procurement

MEF/DMP L December2008

The legal frameworkfacilitating access of SMEs topublic orders and access ofnew entrants to the marketshould be improved

Study the opportunity forintroducing a regulatorymechanism to facilitate the accessof SMEs to public procurement

MEF/DMP A December2009

The legal framework fordevelopment of public/privatepartnerships (includingconcessions) is non-existent

Approve a legal framework forthe development of public/privatepartnerships (PPP), concessions,BOT

MEF/DMP/DPP H June 2010

There are many obstacles thatlimit the capacity of theprivate sector to have accessto the procurement market

Conduct a study andimplementing the results with aview to reducing the systemicobstacles

MEF/DMP/Minist ofIndustry

H June2010

The mechanism forcategorization of enterprises isnot sufficiently efficient

Strengthen the legal andoperational framework of themechanism for categorization ofenterprises

MEF/DMP/PrivateSector

H June

2009

C.3-Existence of contractadministration and disputeresolution provisions

The regulatory provision inthe area of execution ofcontracts should beharmonized with the WAEMUGuideline

Revise the code to ensure greaterefficiency and transparency of thesettlement of disputes

MEF/DMP L December2008

The facilities for managingcontracts via SIGMAP are notextended to all the contractingauthorities

Extension of SIGMAP to all the(central and local) contractingauthorities and two importantterritorial collectivities

MEF/DGBF/DMP H December

2008

103


(Low, Average,High)

To becompleted

before:

Pillar IV - Integrity and Transparency of the Public Procurement Mechanism

D.1 – The country is endowed withefficient control and auditmechanisms

The legal framework andeffectiveness of internal andexternal control ofprocurement is weak

Publish the à priori and àposteriori internal control reportsof public procurement of allcontracting authorities , asestablished in the WAEMUguidelines

The SODE are submitted tocontrol according to the WAEMUGuidelines

Assess the opportunity of linkingSIGMAP to a fraud detectionsoftware

MEF/DMP

MEF/DMP

MEF/DMP

L

L

H

January 2009

January 2009

December2009

Control and audit functionsare not separated

Clarify audit and control functionsin the code according to PEMFARworkshop (June 2008) findings

Operationalize non-

jurisdictional audit function

MEF/DMP

MEF/DMP

L

H

December2008

December2009

The audits of publicprocurement are notconducted by the Chamber ofAccounts

Submit the audit reports to theChamber of Accounts

MEF L January 2010

The human and materialresources of the controlstructures and their power donot enable them to efficientlyaccomplish their mission

Organize training sessions in auditfor the Observatory, the IGE, theIGF, and the Chamber ofAccounts

MEF/DMP H June 2009

D.2 – Efficiency of the appealmechanism

The regulatory provision forsettling disputes in contractaward is not independent andfunctional

Operationalise the independentmechanism for treatment ofcomplaints

MEF/DMP H June 2009

104


(Low, Average,High)

To becompleted

before:

D.3 – Level of access to information

Accessibility of the public toinformation on the results ofpublic procurement isinadequate

Pursue the development of thewebsite and its links withSIGMAP

Publish in the Public ProcurementJournal and website the results ofall procurement tenders,concessions, including those ofstate-owned enterprises (SOEs)

MEF/DMP

MEF/DMP

H

A

December2009

January 2009

D.4 - The country has adoptedmeasures for promoting ethics andcombating corruption

The legal and institutionalbody for combating corruptionis inadequate with reference tothe provisions proposed by theUnited Nations Conventionand the Convention of theAfrican Unity in the field; thefight against corruption inpublic procurement is notintegrated into a nationalstrategy

Engage the Government in aprocess of ratification of allrelevant international agreements

SNBG H December2009

Specific offences oncorruption (influencepeddling, favoritism,information retention, etc.) arenot provided for in the code

Complete the regulatory arsenal MEF/DMP L December2009

The fraud detection,monitoring and denunciationprocedures are not regulatedand functional

Operationalize the mechanism ofthe green line on publicprocurement

MEF A December2009

There is no ethics code forpromoting measures forcombating corruption andfraud

Develop, approve and disseminatean ethics code on publicprocurement

MEF/DMP A June 2009

Strengthening the applicationof the administrative sanctionsin public procurement

Effective utilization of auditreports by the Chamber ofAccounts, the IGE and theObservatory

Chamber ofAccounts/IGE/IGF

L June 2010

105

Annex 1: Fiscal Developments and Prospects (2002-08, % of GDP)

2002 2003 2004 2005 2006 2007 2008Est. Est. Prom.

Total revenues and grants 18.4 17.4 18.4 18.2 19.1 20.0 20.7Total revenues 17.8 16.8 17.5 17.1 18.5 19.4 19.4

Tax revenues 15.7 14.9 15.2 14.5 15.5 15.7 16.07Direct taxes 4.2 3.6 3.5 4.2 4.9 4.5 4.8Indirect taxes 11.6 11.3 11.6 10.3 10.6 11.1 11.3

Non tax revenues 2.1 1.9 2.3 2.6 3.0 3.7 3.4Social security contributions 1.4 1.4 1.4 1.4 1.4 1.4 1.4Oil and Gas revenues ... 0.2 0.5 0.7 0.8 0.7 1.1Others 0.7 0.4 0.5 0.6 0.9 2.5 1.1

Including: dividends of PETROCI .. .. 0.0 0.1 0.0 0.6 1.3Including: toxic waste damages .. .. .. .. .. 0.8 0.0

Grants 0.5 0.6 0.9 1.1 0.6 0.6 1.3Projects 0.4 0.5 0.9 1.1 0.6 0.5 0.4Programmes (including crisis related) 0.0 0.0 0.0 0.0 0.0 0.1 0.8

Total expenditures 19.6 19.6 20.1 19.9 20.9 19.9 21.1Current expenditures 16.3 16.8 17.2 16.9 17.6 17.8 17.9

Wages and salaries 6.5 6.8 6.7 6.5 6.8 6.7 6.8Social security benefits 1.3 1.4 1.7 1.7 1.9 2.0 1.9Subsidies and current transfers 0.9 1.3 1.0 1.1 2.0 1.6 1.5Other current expenditures 3.7 4.0 4.4 4.6 4.7 5.0 4.4Crisis related expenditures 0.7 1.2 1.2 0.9 0.8 0.8 1.2Interest due 3.1 2.2 2.2 2.1 1.8 1.7 1.3

Capital expenditure 3.2 2.7 2.8 2.7 3.1 1.9 3.1Domestically financed 1.8 1.6 1.5 1.6 2.3 1.7 2.1Externally financed 1.4 1.1 1.3 1.2 0.8 0.3 1.0

Net lending 0.2 0.1 0.1 0.2 0.2 0.2 0.1

Primary basic balance 2/ 2.7 0.5 0.9 0.4 0.3 0.7 0.8Overall balance, including grants 1/ -1.3 -2.2 -1.7 -1.7 -1.8 -0.7 -0.4Overall balance, excluding grants 1/ -1.8 -2.8 -2.6 -2.8 -2.4 -1.2 -1.7Overall balance (on cash basis) -1.0 -0.7 0.8 -0.3 -0.3 -1.7 -1.1

Financing 1.0 0.7 -0.8 0.3 0.3 1.7 1.1Domestic financing 0.1 -0.5 -1.5 0.4 0.3 1.3 0.3

Bank financing (net) 0.3 -0.8 -0.7 0.4 -0.4 0.9 -0.1Nonbank financing (net) -0.2 -0.2 -0.7 0.1 0.7 0.4 0.5

External financing 0.9 1.2 0.7 -0.2 0.0 0.5 -4.1

Memorandum items:External debt arrears (accumulated) 5.4 7.8 13.0 19.4 22.3 24.5 19.8Social spending 5.3 5.3 5.3 5.1 5.1 5.3 5.6

Education 4.4 4.4 4.4 4.3 4.2 4.4 4.6Health 0.9 0.9 0.9 0.8 0.9 0.9 1.0

Defense spending 1.4 1.5 1.6 1.5 1.5 1.5 ...

1/ Payment order basis.2/ Total revenues (excluding grants) minus expenditures, net of scheduled interest.

.Sources: Ivorian authorities; and IMF staff estimates and projections

106

Annex 2: Expenditures by Ministry, January-September 2007

(in CFAF billion)

No. MinistryFinalizedBudget

Actual,Sept. 2007

ExecutionRate (%)

1 National Representation 11 6 54.52 Presidency 37 52 140.53 Social and Economic Council 3.2 2.4 75.04 Appeals Court (Court de Cassation) 0.46 0.55 119.65 Grand Chancery 0.59 0.52 88.16 Office of the Prime Minister and Attached Services 15 28 186.77 Constitutional Council 1.4 1.4 100.08 Prime Minister's Office 0.49 0.96 195.99 Council of State 0.33 0.44 133.310 Auditor General’s Office (Cour de Comptes) 0.31 0.6 193.511 Electoral Commission 10.5 4.9 46.712 Ministry of Economy and Finance 921 552 59.9

including public debt 546 148 27.1compensation – state electricity 89 10 11.2

14 Mines and Energy 4.9 1.95 39.815 Interior 116 84 72.416 Civic Service and Employment 12 8 66.717 Justice 16 11 68.818 Agriculture 26 9 34.619 Construction 15 9 60.020 Plan and Development 5 1.6 32.021 Economic Infrastructure 104 65 62.522 National Education 295 203 68.824 Health 93 62 66.725 Foreign Affairs 43 34 79.126 Defense 137 91 66.427 Communication 3.9 3 76.928 Environment, Water and Forestry 10 7 70.033 Higher Education and Research 87 84 96.634 Technical Education and Professional Training 26 20 76.935 Culture 4.9 4.2 85.737 Commerce 4.6 2.7 58.738 Industry and Promotion of the Private Sector 2.2 1.6 72.739 Tourism 1.7 1.4 82.440 Transport 7.3 5.2 71.242 Family, Women and Social Affairs 9.2 6.3 68.545 Solidarity and War Victims 2.3 0.48 20.946 Fight against AIDS 3.2 3.9 121.947 Supreme Court 2.4 2.4 100.048 New Technologies 2.2 2.6 118.251 Animal Production and Fisheries 4 2.9 72.560 African Integration 0.75 0.68 90.761 National Reconciliation 4.8 0.9 18.868 National Public Prosecutor 0.3 0.37 123.370 Reconstruction and Rehabilitation 1.2 0.19 15.871 Youth, Sport and Leisure 8.4 4.9 58.372 Urban Hygiene 0.16 0.24 150.0

TOTAL 2055 1131 55.0Source: Ministry of Economy and Finance, Presentation to Cabinet on execution of the budget at the end ofSeptember 2007. Abidjan, November 2007.

107

Annex 3: Planned and Actual Expenditures by Economic ClassificationJanuary-September 2007

(in CFAF thousand)

Ministry Finalized BudgetActual, Sept.

2007Execution Rate

(%)

Amortization 403 104 25.8Domestic debt 129 65 50.4

BCEAO 19 4.5 23.7Commercial banks 49 56 114.3Other 62 4.7 7.6

Foreign debt 274 40 14.6Multilateral 129 32 24.8Bilateral 133 68 51.1Others 12 8 66.7

Interest 143 44 30.8Including: on domestic debt 26 35 134.6

Infrastructure 164 67 40.9including: Equipment 23 8.9 38.7Road infrastructure 68 41 60.3Buildings 24 7.4 30.8Water and Electricity 17 4 23.5

Transfers 384 277 72.1including: Transfers to communes 11 6 54.5Transfers to the General Councils 24 22 91.7Transfers and subsidies to EPs and SPPs 98 74 75.5Retirement Pensions 21 11.4 54.3Transfers to National Institutions 38 53 139.5Transfers to Embassies (representations abroad) 17 8.9 52.4Transfers to Non-profits 92 26 28.3Transfers to Autonomous Funds (PNDDR, etc.) 37 5.2 14.1Transfers to Households 23 19 82.6

Personnel 611 472 77.3Central Government 510 380 74.5

including: Wages and salaries 454 328 72.2Benefits (Allowances) 14 2.3 16.4Social Security (by employer) 39 49 125.6

Public Associations and (partially) state-owned firms 50.8 40.5 79.7Institutions 26 35 134.6Others 24 17 70.8

including: Embassies 11 8.9 80.9Communities 5.9 4 67.8

Goods and Services 287 108 37.6including: Supplies 232 39 16.8

Maintenance 38 6 15.8Services (delivery of services) 23 4.8 20.9Insurance 17 3.8 22.4Water, Electricity and Other (energy) 1.4 16 1142.9Communication 76 11 14.5Rent 8.5 3.9 45.9Transport and Mission Expenses 0.8 0.7 87.5

Other Current Charges 64 59 92.2

TOTAL 2055 1131 55.0

Source: Ministry of Economy and Finance, Presentation to Cabinet on execution of the budget at the end of September 2007.Abidjan, November 2007.

108

Annex 4: Normative Timetable for Budget Preparation

Budget preparation Phases ResponsibleStructures

Plannedcompletion

date

Budget framework: equilibrium table, which harmonizes statecommitments with mobilizable resources

DPSB/DBE March

Adoption of budget framework PrimeMinister

April

Determination of budget envelopes DPSB April

Establishment of budget proposals Ministers May – June

Return of the budget proposals of the ministries DAAF July

Budget conferences and internal arbitrations DGBF July - August

Examination of budget by the Prime Minister Office of MEF 1st fortnightSeptember

Finalization of budget documents DGBF 2nd fortnightSeptember

Tabling of the draft finance act at the National Assembly foradoption, in accordance with the Constitution of the Republic.

Office of MEF 1st fortnightOctober

Study and adoption by Parliament Parliament November

Promulgation and publication of the Finance Act in the Gazette ofthe Republic

MEF Before the endof December

109

Annex 5: Stages of the Normal Expenditure Procedure

The funds administrator contacts the supplier whotransmits to him a proforma invoice

The funds administrator transmits a commitment request tothe DAAF of the ministry, delegate appropriator of funds

- The DAAF verifies the request made by the fundsadministrator and certifies it

The DAAF introduces the commitment request in SIGFIP

Constitutes an act of commitment, by decree, order,decision, contract, and generally any measure that directly orindirectly results in creation or increase in expenditure

Intervention of the financial controller for authorization ofthe commitment

Approval of the purchase order and signing of the originalpurchase order, transmission of the other documents to theDAAF

Transmission by the DAAF of a copy of the commitmentapproved to the funds administrator and the supplier toinform him about the order

Commitment

Assessment

After delivery or offer of the services, issue of the invoice bythe supplier

Observation of the beneficiary of the service and thefinancial controller

Establishment of minutes of reception of the works or adelivery slip of the suppliers

Certification of the service provided by the fundsadministrator and transmission of the certified invoice to theDAAF

Preliminary to commitment

Administrative and Financial AffairsDepartment (DAAF) of the Ministry

Reception by the DAAF of the invoices certified "Servicerendered" by the funds administrator

Issue of the draft payment order by the DAAF

Transmission of the file to the financial controller forapproval

Control of the support documents of the expenditure by thefinancial controller and approval

Transmission to the DAAF for authorization of the

Authorization

Payment Publication of the transmission slip of the warrant

Transmission to the public accountant, responsible for theexpenditure

110

Annex 6: Statistical Control Table of the Financial Controller – Fiscal 2006

Commitmentstreated

Commitmentsvalidated

Commitmentsdiffered

Commitmentsrejected

Nature of commitments Number Amount Number AmountShare

of totalNumber Amount Rate Number Amount Rate

Commitments validated

Ex-project commitments co-funded 16,974 46.55 14,667 39.86 66.77 1,720 3.68 7.90 587 3.02 6.48

Project commitments co-funded 1,979 4.37 1,558 3.82 6.41 184 0.31 7.07 237 0.24 5.43

Total Central Level 18,953 50.93 16,225 43.69 73.18 1,904 3.99 7.83 824 3.25 6.39

Commitment under operating budget 30,343 17.98 27,198 16.01 26.82 1,170 0.79 4.41 1,975 1.18 6.54

Total Local Level 30,343 17.98 27,198 16.01 26.82 1,170 0.79 4.41 1,975 1.18 6.54

Grand Total 49,296 68.91 43,423 59.70 100.00 3,074 4.78 6.93 2,799 4.43 6.43

Warrants validated Warrants treated Warrants validated Warrants differed Warrants rejected

Ordinary warrants and project warrantsco-funded 28,502 148.64 26,271 140.29 10.53 1,432 4.92 3.31 799 3.45 2.32

Simplified procedure warrants 15,504 1,178,00 15,196 1,175.16 88.19 226 2.41 0.20 82 0.44 0.04

Total Central Level 44,006 1,326.65 41,467 1,315.45 98.72 1,658 7.32 0.55 881 3.88 0.29

Operating budget warrants 28,578 17.13 27,076 15.89 1.19 694 0.54 3.12 808 0.71 4.12

Ex-budget warrants 721 1.14 695 1.12 0.08 10 0.00 0.39 16 0.02 1.33

Total Local Level 29,299 18.28 27,771 17.01 1.28 704 0.54 2.95 824 0.72 3.95

Grand Total 73,305 1,344.92 69,238 1,332.47 100.00 2,362 7.86 0.58 1,705 4.60 0.34

Annex 7: Computer Systems

1. The information system, composed of the main SIGFIP and ASTER applications, hasgreat potential, which should be further exploited. These two computer applications integrate thelegal framework and general organization of public finance set by the texts in Côte d’Ivoire.However, the management system is not fully integrated. The budget execution situations are notsystematically produced and the establishment of the SIGFIP has not helped to significantlysimplify the procedures and fully validate the information.

SIGFIP

2. The data on execution of the budget expenditure operations are treated and validated,since 1999, from the SIGFIP computer application64.

3. The application, which connects the main actors of the expenditure execution chain, isbased on procedures defined by Decree 98-716 of 16 December 1998 and ApplicationInstruction 399/MEF/CAB of 16 October 2000. Its establishment was accompanied by adelegation of power of authorization from the Minister of Finance to the Directors of DAAFs ofthe ministries. Since October 2006, the Prefects and Sub-Prefects are delegated appropriators offunds in the departments. As at the end of 2006, 36 localities were connected to SIGFIP.

4. Expenditures under debt refund and payroll expenditures should be fed into SIGFIP. Thesystem, indeed, is not interfaced with the 2000 Payroll Application dedicated to the treatment ofsalaries of government civil workers, to that of contract workers, and pensions. Similarly, no linkhas been established with the SYGADE software used for debt management.

5. The system has helped to improve the management of basic budget operations such asmonitoring of budget votes, commitments, warrants issued and securities for payment and helpsto obtain in real time statistics on execution of the budget. The major users have real time accessto information on availability of funds, and at the consumption level. However, the loanadministrators, other than the DAAFs, are not connected to the system, which may cause somedelays in budget execution for some DAAFs, who have to manage a great number of loanadministrators.

6. Besides, the entire potential of the application has not been exploited. No synthesissituation is produced to enable the different appropriators to keep an administrative account oftheir operations. Finally, it is not possible to obtain, from SIGFIP, a complete situation of budgetexpenditure, from commitment to payment.

ASTER

7. The main objectives of implementation of the accounting reform supported by ASTERwere:

64 Until 1998, public expenditures were executed according to a procedure supported by a computer system managedby the Office Central de Mécanographie (OCM). The obligation to modernize its computer system compelled Côted’Ivoire to replace the former OCM by a state-owned company specially created for that purpose, the SociétéNationale de Development Informatique (SNDI), whose very first task was to develop an integrated public financemanagement system (SIGFIP).

112

(i) To accelerate the integration of accounting systems;(ii) To produce detailed accounting of the execution of public expenditures and revenues; and(iii) To facilitate the rapid validation of end of management operations.

8. Since 1996, Côte d'Ivoire is the pilot country for this project, Benin joined the project in2001 and became in 2005 the 2nd country where the application is used, since then Senegal hasalso joined the application.

9. Some prior conditions for installation of the ASTER software package at the level ofregulation, administrative organization and technical environment. In this context, the DGTCPhas embarked on a vast reform project, which in 2002 resulted in the reorganization of theaccounting procedures and the introduction of ASTER. These reforms and computerizationhelped to publish for the first time in early 2005 the CGAF for fiscal 2003, a basic document forclosing the management.

10. The conception of ASTER takes into account the integration of the relationships with theappropriators of funds and centralization of the accounting entries from the basic accountingheadings up to the central level. In Côte d’Ivoire, the application comprises a core developed byFrance65 and 4 peripheral applications developed by Côte d’Ivoire. They are the PEC-MER(prise en charge et mise en règlement des mandats), REC (prise en charge des recettes), RET(traitement des retenues et oppositions), and BC (traitement des bons de caisse) applications.The peripheral applications use the data from the ASTER database. The ASTER application isused in all accounting items at the central level and in the centralizing accounting items at theregional level. The Computer Department of the DGTCP manages the database, the maintenanceof computer programs is ensured by the Research Branch.

11. ASTER makes it possible to have, in the course of management, the level of assumptionof accounting responsibility for the expenditures and should ultimately provide information onpayments and details of the balance payable. Every month, ASTER helps to publish the generalbalance of the accounts of the Treasury, the development of the expenditures and the budgetrevenues66. ASTER helps to produce the General Account of the Financial Administration(CGAF) within a reasonable time frame given the closing date of the financial year.

12. The procedure is not fully automatic and the reconciliation of entries made in the twosystems is not done at the end of the fiscal year. The integration into ASTER and the GeneralPublic Accounting of warrants issued in SIGFIP as budget expenditures is done through aperipheral “prise en charge et mise en règlement PEC-MER.”67 A committee was set up (inFebruary 2007) to carry out this reconciliation every quarter. The coherence of the data cannot becompletely ensured in the course of the fiscal year.

65 The French Foreign Ministry was the owner of this project, the Public Accounts Department of the Ministry ofEconomy and Finance was the main contractor. The project was developed in France by Slumberger/Sema.66 A copy of these documents presenting the situation closed on 31 October 2007 was presented to the mission.67 At the level of the expenditure accountants, the warrants targeted in the SIGFIP application are later transferred tothe PEC-MER application thanks to the database link between the two applications. Once the warrants are coveredin the PEC-MER, a file is constituted by the SNDI and transmitted to the ASTER directory where the data are fedinto the Administrative expenditure accounting module of ASTER.

113

13. The audit of the information and public accounts management system was conducted inAugust 2006 by the General Treasury Inspectorate (IGT). It involved identifying the difficultiesencountered and needs not covered by computer applications. They noted that globally the actors(accounting items and DGTCP) demonstrated a desire to assume ownership of the new system,but there were some difficulties concerning the computer accounting aids, ASTER , slowness inthe execution of certain requests, notably the centralization, non recognition by the system oferroneous cost allocations, incoherence of the system concerning the status of operationsrejected: A follow-up of recommendations of the audit was organized by the DGTCP and thecomputer anomalies were corrected in version 4.126 of the software package.

Other applications

14. The two main systems, SIGFIP and ASTER, are completed by other applications.

15. The Integrated Budget Preparation System (SIGBUD) is an application for assisting withthe preparation of the Budget. Since 2003, the DAAFs of ministries can directly capture theirbudget proposals. SIGBUD helps to harmonize supports for budget proposals, thus facilitatingtheir consolidation.

16. The Integrated Government Contract Management System (SIGMAP), implemented in2006, aims at supporting the management of public procurement. It completes the recentadoption of a new Contract Code and a legal institutional framework, which clearly definesresponsibilities and distinguishes, on the one hand, the functions of regulation, recourse in caseof litigation, audits of contracts, and on the other hand, the functions of procurement andexecution of contracts. The application is geared towards greater deconcentration anddecentralization of the operations.

17. The Réseau Informatique de Comptabilité Intégré des Établissements Publics Nationauxcelps to monitor the execution of expenditures of the EPN and produce more quickly financialstatements. The implementation of this application started in 2003 and, today, it is used in 18EPNs. 17 other EPNs should be connected in 2007.

18. The project on development of a common application to the administrative and financialmanagement of the payroll should result in an automatic feeding on data on salaries into SIGFIP.A development team has been set up to conduct the Système Intégré de Gestion des Agents del’État (SIGFAE). The development of the application was entrusted to the SNDI, the preliminarystudy and the specifications of the new application were validated in June 2006, thedevelopments are ongoing. The new application, which should be operational in 2008, is basedon decentralized management of the payroll by the DAAFs of the ministries.

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Annex 8: Developments since the 2004 CPAR

Summary of Conclusions and Recommendations of the previous Review

The analytical review of public procurement carried out in 2004 revealed a number ofweaknesses concerning notably:

The lack of independence of the body in charge of the regulation function and generallyweak institutional development capacity.

The delay in implementation of the deconcentration of the Department of Publicprocurement and decentralization of the government contract function, notably at thelevel of the territorial communities.

The lack of a capacity building plan to accompany the process of decentralization anddeconcentration of government contract function.

The lack of development of a mechanism for categorizing enterprises was also noted; The lack of independence of the mechanism for appeal and amicable settlement of

differences proposed in the code.

Other weak points requiring medium and long-term actions to simplify existent texts andmake them accessible; improving the procedures for execution of government contractbudget through the establishment of an electronic system for managing publicprocurement, and strengthening the mechanism for combating corruption.

At the end of the 2004 CPAR discussions conducted with the Ivorian authorities,agreements were signed under which the weaknesses identified above should becorrected, in the short and medium term. They may be summarized as follows:

“Regulatory body: as a transitional measure, the regulation function of the publicprocurement systems will be entrusted to the Department of Public procurement. Thedecree of organization and functioning of this structure should create within it a sub-division in charge of the distinct regulation of the other services in charge of theoperations. In its organization and functioning at the level of the decision-makingprocess, notably in the area of definition of policies and independent non-jurisdictionalcontrol of the procedures, it should rely on a participative framework, equivalent to thatof the CNCS, associating the administration, the private sector and the civil society.

Deconcentration of the government contract function: The deconcentration of theDepartment of Public procurement should be pursued.

Decentralisation of public procurement to the territorial communities: An agreementwas reached on the urgent need to implement training and capacity building activities forthe benefit of the local officials in general and the territorial communities in particular.

Mechanism of appeal and amicable settlement of differences: As a transitionalmeasure, the mechanism of appeal and amicable settlement of differences provided for inthe draft government contract code was maintained. The efficiency of this mechanismshould be evaluated after a year of functioning with a view to taking a final decision.

115

Categorization of enterprises: A Joint Committee should be created in a participativeframework ensuring vast information of the economic operators concerned.

Training and capacity building: A sector plan for training and strengthening thecapacities of the actors of the public contract system was developed; it should bediscussed at a roundtable of partners with a view to its validation and implementation.

Reforms implemented since the previous review

Pillar I: Legislative and regulatory framework

The legislative and regulatory framework of public procurement has been improved.A new government contract code was adopted by Decree 2005-110 of 24 February 2005and entered into force in April 2006, and most of its provisions are in conformity withinternational standards and meet the obligations of the country in the framework of theWAEMU guidelines on public procurement. Many application rules have been adopted tofacilitate and simplify the implementation of the code. Model files have been prepared andremain to be adopted through the normal channel.

Pillar II: Institutional framework and Management Capacity

The institutional framework and management capacities of public procurement havebeen strengthened. With the operationalization of the integrated management of publicprocurement (SIGMAP) and its links with SIGBUD and SIGFIP, the incorporation of theplanning and execution of public procurement in the budget execution system andproduction of the relevant statistics have been improved. In the framework of thetransposition of the WAEMU 2005 directives, No. 4 and 5, in the area of publicprocurement, the Government adopted in November 2007, a roadmap for establishing amechanism for regulation of public procurement independent of execution functions. Thismechanism should integrate the functions of definition of training policies and strategies,management of complaints and conduct of independent audits on public procurement. Itwould be managed in a tripartite manner including, apart from representatives from theadministration, those of the private sector and the civil society, through a NationalObservatory on public procurement (ONMP) whose application texts are being developedand should specify the modalities of organization and management of these functions inaccordance with the relevant guidelines of WAEMU.

Pillar III: Procurement operations and market practices

The deconcentration and decentralization of the functioning of the market have beenintensified in order to enhance the efficiency of the procurement and governmentcontract management operations. The deconcentration of the DMP throughout thecountry has been intensified with the opening of six (6) regional offices in order to bringthe decisions of a priori control closer to the contracting authorities. Similarly, thedecentralization of the procurement function to the contracting authorities has beenintensified with the increase of their level of responsibility and with the establishment of

116

structures (focal point and COJO68) within them to ensure the control of contracts.Nevertheless, the lack of training of the different actors of the system (public and privatesectors) and the socio-political difficulties have not enabled the system to substantiallyimprove its efficiency. Finally, it should be emphasized that another study for establishinga system of categorization of enterprises has been initiated but not yet finalized.

Pillar IV: Integrity and Transparency of the procurement provision

Very few actions have been undertaken with a view to improving the functioning ofthe mechanism for controlling public procurement. In particular, the mechanism forappeal and amicable settlement of differences provided for in the draft government contractcode is not yet operational.

68 Bid Opening and Evaluation Commission.

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Annex 9: Comparison by Country – Summary of PEFA Scores

Number ofPerformance

Indicators

Côte d’Ivoire(May 2008)

Mali(October

2007)

Benin(September

2007)

Ghana(June2006)

Tanzania(June2006)

A. RESULTS OFTHE PUBLICFINANCEMANAGEMENTSYSTEM: Credibilityof the Budget

4 1 B

1 D+

2 NS

1A

2 B

1 D+

2 B

1 C+, 1 C

1 A

1 B+, 1 B

1 D

3 A

1 D

B. SPECIFICITIESCROSS-CUTTING:Comprehensivenessand Transparency

6 1 B

1 C▲, 2 C

D+

1 NS

1 C+, 2 C▲, 3C

3 C

3 D+

1 A

2 B

3C

1 A

2 B

3 C

C. BUDGET CYCLE

C (i) Polic-BasedBudgeting 2

1 D▲, 1 D

2 B 1 B+

1 C+

1 B

1 C

2 B

C (ii) Predictabilityand Control inBudget Execution

9

1 B

2 C+, 1 C

5 D+

1 B+

3 C+, 4 C

1 D+

1 B

3 C+, 2 C

2D+, 1 D

2 B

1 C+, 4 C

1 D+

1 NS

1 B+, 2 B

3 C+, 2 C

1 D

C(iii) Accounting,Recording, andReporting

4 1 C+

2 D+, 1 D▲

1 C+, 1 C

2 D+

2 C

1 D+, 1 D

2 C+, 1 C

1 D

3 B

1 C

C(iv) ExternalScrutiny and Audit 3

1 D+, 2 D

1 B+

2 D

1 C+

2 D

3 C+ 1 C+, 1 C

1 D+

TOTAL 28

3B

3C+, 1 C▲,3C

10D+, 2 D▲,3D

3NS

1A

2B+, 4B

5C+, 2C▲, 8C

4D+, 2D

1B+, 3B

6C+, 8C

6D+, 4D

2A

1B+, 6B

6C+, 9C

1D+, 2D

1NS

4A

1B+, 9B

4C+, 7C

1D+, 2D

D. PRATICES OFDONORAGENCIES

3

1 D+, 1 D

1 NS

1 D+, 2 D 1 C

1 D+, 1 D

1 C+, 1 C

1 D

1 A

2 C

Source: Reports published on the site www.PEFA.org. Exception: Mali (to be published soon) and Côte d’Ivoire.

118

Annex 10: Comparison by Country – Average Assessment per OECD/DAC Pillar69

Pillar Côted’Ivoire

(May 2008)

Uganda(May2007)

Ghana(February 2008)

Rwanda(August

2007)

Vietnam(Dec. 2006)

Sri Lanka(Sept. 2007)

Legislative and RegulatoryFramework

2.2 2.9 2.3 2.4 1.8 3.0

Institutional Framework andManagement Capacity

1.7 2.0 1.8 1.5 1.8 2.1

Procurement Operations andMarket Practices

1.8 2.2 1.8 2.2 0.8 2.0

Integrity and Transparency ofthe Public Procurement System

1.0 1.9 1.8 2.1 1.4 0.9

Total Average70

1.7 2.3 1.9 2.1 1.5 2.0

69 Total of all scores of the sub-indicators of each pillar divided by its number.70 Total of all scores assigned to the pillars divided by its number

Report No. 44429-CI

Côte d’Ivoire

Public Expenditure Management and FinancialAccountability Review

(In Three Volumes) Volume II: Public Financial Management Performance Report

November 2008

PREM 4Africa Region

Document of the World Bank, co-produced with the Government of Cote d’Ivoire, theInternational Monetary Fund, the African Development Bank and the European Union

i

Currency Equivalents

Currency Unit = CFA Franc1 US dollar = 436.17 (April 2008)

Fiscal Year



ACCD Central Accounting Agency of Deposits (Agence Comptable Centraledes Dépôts)

ACCT Central Accounting Agent of the Treasury (Agent Comptable Centraldu Trésor)

ASTER Treasury Service Database (Application des Services du Trésor enRéseau)

BCEAO Central Bank of West African States (Banque Centrale des Etatsd’Afrique de l’Ouest)

CAA Amortization Autonomous Fund (Caisse Autonome d’Amortissement)

CD Customs Code (Code des Douanes)

CFAP Classification of Functions of Government (COFOG)

CGAF General Accounts of the Financial Administration (CompteGénéral de l’Administration Financière)

CGI General Tax Code

CGRAE Civil Servants National Retirement Fund (Caisse Générale de Retraitésdes Agents de l’Etat)

CNPS National Social Protection Fund (Caisse Nationale de PrévoyanceSociale)

CPAR Country Procurement Analytical Review

CRDP Public Expenditure Review Unit

DAAF Director of Administrative and Financial Affairs

DAC Development Aid Committee

DCPE Directorate of Conjuncture and Economic Forecasting

DDP Directorate of Public Debt

DGBF General Directorate of the Budget and Finance (Direction Générale duBudget et des Finances)

DGD General Directorate of Customs (Direction Générale des Douanes)

DGER Economic Governance and Recovery Grant

ii

DGI Internal Revenue Service (Direction Générale des Impôts)

DGTCP General Directorate of the Treasury and Public Accounting (DirectionGénérale du Trésor et de la Comptabilité Publique)

DMP Directorate of Public Procurement

DSOP Expenditures without Payment Order (Dépenses sans OrdonnancementPréalable)

E.U. European Union

ECOWAS Economic Community of West African States

EPCA IMF Emergency Post-Conflict Assistance

EPN National Public Agencies (Etablissements Publics Nationaux)

CFAF CFA Franc

FUR Central Personnel Database (Fichier Unique de Référence)

GDP Gross Domestic Product

HDI Human Development Index

HDS Health and Demographic Survey

HIPC Highly-Indebted Poor Countries

IDA International Development Association

IGE General Public Inspectorate

IGF General Inspectorate of Finance

IGT General Inspectorate of the Treasury

IMF International Monetary Fund

MDG Millennium Development Goals

MEF Ministry of Economic and Finance

MTEF Medium-Term Expenditure Framework

OECD Organization of Economic Cooperation and Development

PEFA Public Expenditure and Financial Accountability

PEMFAR Public Expenditure Management and Financial Accountability Review

PGT Paymaster-General of the Treasury (Payeur Géneral du Trésor)

PIP Public Investment Program

PPA Purchasing-Power Parity

PRSP Poverty Reduction Strategy Paper

SACO Central Payment Order Service (Service Autonome de Centralisation del’Ordonnancement)

SIGFAE Integrated System for the Management of the Civil Servants’ Records(Système Intégré de Gestion des Fonctionnaires et Agents de l’État)

iii

SIGFIP Integrated Public Finance Management System

SIGMAP Integrated Public Procurement Management System

SIR Ivorian Refining Company (Société Ivoirienne de Raffinage)

SNDI National Company of Sofwtare Development (Société Nationale deSoftware Informatique)

SOE State-Owned Enterprise

SYGADE Integrated Debt Management System

SYSCOA West African Accounts System

TOFE Government Fiscal Operations Table

UNO United Nations Organization

VAT Value Added Tax

WAEMU West African Economic and Monetary Union

Vice-President: Obiageli K. Ezekwesili

Country Director: Madani M. Tall

Sector Manager: Sudhir Shetty

Sector Official: Antonella Bassani

Team Leaders: Marcelo R. Andrade


iv

TABLE OF CONTENTS

SUMMARY OF THE ASSESSMENT.......................................................................................................................... v

1. INTRODUCTION................................................................................................................................................. 12. COUNTRY BACKGROUND INFORMATION...........................................................................................................3

A. Description of the Country Economic Situation............................................................................. 3

B. Description of budgetary outcomes ................................................................................................ 43. ASSESSEMNT OF PFM SYSTEMS, PROCESSES AND INSTITUTIONS .................................................................. 7

A. Credibility of the Budget................................................................................................................. 7

B. Comprehensiveness and transparency ......................................................................................... 12

C. Policy-Based Budgeting................................................................................................................. 21

D. Predictability and Control in Budget execution ........................................................................... 23

E. Accounting, Recording and Reporting ......................................................................................... 37

F. External Scrutiny and Audit......................................................................................................... 40

G. Donor Practices ............................................................................................................................. 444. GOVERNMENT REFORM PROCESS ................................................................................................................45

A. Description of Recent and On-going reforms............................................................................... 45

B. Institutional Factors Supporting Reform Planning and Implementation ................................... 46

TABLES

Table 2.1: Revenue and Expenditure Outturns, 2004-2006..................................................................... 5Table 2.2: Estimated and Actual Expenditures by major Functional Categories, 2004-2006 ................... 6Table 3.1: Comparison between Expenditures estimated by the Budget Laws and Actual

Expenditures for the Fiscal Years 2004 to 2006..................................................................... 8Table 3.2: Differences between Initial Budgets and Actual Expenditures for the 20 most

important Budget Lines during the 2004, 2006 and 2006 Fiscal Years................................... 8Table 3.3: Comparison between Estimates and Actual Domestic Revenues for the 2004, 2005

and 2006 Fiscal Years........................................................................................................... 9

ANNEXES

Annex 1: Summary Table of PEFA Scores......................................................................................... 48Annex 2: Summary Justification of Scores assigned to Indicators....................................................... 50Annex 3: List of Persons Met............................................................................................................. 62Annex 4: List of Documents Consulted.............................................................................................. 67Annex 5: Calculations of Ratios for PI-1 and PI-2 .............................................................................. 73Annex 6: Synthesis of the Observations and Proposals of the Ivorian Part on the PEFA Report .......... 76

v

SUMMARY OF THE ASSESSMENT

Integrated Assessment of Public Financial Management Performance

1. The legal and regulatory framework of Côte d’Ivoire’s public financial managementsystem comprises: the Constitution; the organic law on the Budget Act of December 31, 1959;Law No. 62-53 of February 12, 1962, defining the public finance management systemorganization; and the decree on public sector accounting principles of January 3, 1980. This legalframework fixes the rules on preparation of the budget laws, their implementation as well as theircontrol.

2. Côte d’Ivoire had initiated the reform of the public finance management system, in orderto bring it closer to international standards and in line with the regional framework of the WestAfrican Economic and Monetary Union (WAEMU), which has not been incorporated into thenational law. Progress has been slow because of the crisis the country has been facing since thebeginning of 2000, which had a direct impact on the performance of the system. Hence, theprocedure of paying expenditures on the basis of treasury advances was widely used until 2007.For some fiscal years (2006, 2007 and 2008), the budget was approved by presidential ordinance.Despite this particular situation, the periods and dates specified in the guidelines on the use ofthe Public Expenditure and Financial Accountability (PEFA) methodology were carefullyrespected, in order to analyze the situation as it is and not as it should be.

3. Annex 1 of the report presents the summary of scores assigned to the 31 indicators of thePEFA review system. This review of the public finance system is incomplete since it was notpossible to assign scores to four indicators (PI-1, PI-2, PI-7 and D-1) for which the data was notavailable. For five other indicators, the data provided was only partial and some componentswere assigned a D score (PI-13 – 3rd dimension, PI-15 – 1st dimension, PI-16 – 3rd dimension,and D2 – 1st dimension).

4. The review notes that, globally, the public financial system is below average.71

Indeed, the review observed that if, on the whole, Côte d’Ivoire has made significant progress inrecent years, there are still a large number of weaknesses in its public finance system. However,for some aspects, the scores assigned to the indicators are good, while those assigned to otherindicators could evolve positively through actions such as the return to the orthodoxy in budgetformulation and approval, execution and reporting as well as external control, all of which areappropriately defined in the country’s legal and regulatory framework.

5. Credibility of the budget. The credibility of the budget is low. The performance ofdomestic revenues is adequate, taking into account the crisis situation. It should be noted that theoutturn for 2006 was well above the initial estimates. Concerning expenditures at the aggregatedlevel, there were differences over the past three fiscal years (2004, 2005 and 2006) which areprobably significant, taking into account the level of advances not regularized. These differences

71Considering C as the average performance, 10 out of the 31 indicators of the PEFA system are at this level and

above.

vi

weakened the transparency and accountability in the use of public funds, including the nonrespect of the procurement procedures. Globally, the breakdown of expenditures shows that, forthe main ministries, the differences from plans are considerable. It should be specified that thedata used for the analysis should be corrected by taking into account the expenditures to beregularized and which feature in the general balance of the Treasury accounts.

6. Comprehensiveness and transparency. Despite the improvements observed duringthese past years, there are still efforts to be made in order to improve the presentation of thebudget document. The budget classification was reviewed at the beginning of the years 2000, butstill shows some limitations: lack of clarity between the various components and inadequatealignment with the functional classification of the GFS 2001, which to be prepared requires abridge table. Although abundant, the budget documentation is not in conformity with therequirements neither of the organic law, nor of the PEFA standards (for example, it does notidentify financing of the deficit or analysis the impact of the tax measures). The budget is notcomprehensive in terms of resources and expenditures. Indeed, despite the efforts made by theGovernment during the implementation of budget reforms, a number of operations do not featurein the budget. They include first of all revenues collected directly by some ministries, generallyagainst services rendered, and which are either not paid to the Treasury or are partially paid. Thesame applies to dividends paid by some state-owned companies or parastatals that are notsystematically added to the budget (case of PETROCI, which manages government shares in theenergy sector). Moreover, to ensure comprehensiveness of the budget, it is necessary to budgetthe quasi-fiscal levies on some key sectors like oil and particularly the cocoa/coffee sector.Besides, transfers from the State to the local communities are not based on clear and well-defined rules and the information on the amount is provided late, which delays the adoption oftheir budgets. Concerning the oversight of the aggregate fiscal risk from other public sectorentities, the lack of consolidation of the data limits monitoring of these fiscal risks. Finally,public access to key budgetary information is gradually improving with the establishment ofInternet sites for key agencies (DGD, DGTCP, and DGI). An Internet site of the DGBF is beingdeveloped. However, the dissemination of information to the public concerning budget vote andbudget execution is still limited.

7. Policy-based budgeting. The presentation of the budget is still marked by the logic ofresources and the predominant role of the MEF in the process. Also, its perspective is annual.Since the last three years were characterized by the non-compliance of the deadlines for thepreparation and adoption of the budget, the Government pledged to ensure better supervision ofthe 2008 budget preparation in order to adopt it before the end of the year. The very shortdeadlines given to the ministries for preparation of their budgets limit the quality of theirproposals. However, a timetable for preparing the 2008 budget was adopted. The budget isprepared purely on an annual basis and the ministries do not have quantified sector strategies.The resumption of the process to finalize the poverty reduction strategy will offer the opportunityto engage in the development of medium-term scenarios for the priority sectors of the strategyand thereby help to move beyond the annual budget perspective.

8. Predictability and control in budget execution. The obligations of taxpayers are fixedby a regulation, which is widely disseminated. There are opportunities for appeal but they requiregreater transparency and efficiency. The system for registration of taxpayers is relativelyefficient and the tax audits are planned, but the verification programs are not based on clear risk

vii

assessment criteria. The rate of recovery of tax and customs arrears could not be assessed due tothe lack of data. Management of the public treasury is conducted on the basis of an annual plan,which is updated monthly both in forecasting and execution. This possibility of availability offunds over several months is, however, not exploited since the ceilings are provided to theministers on a monthly basis. The controls carried out on the personnel database of the payrollare inadequate and updated late. The level of control of non-salary expenditures is affected bylack of assessment of risks. Finally, the internal audit system is inefficient.

9. Accounting, recording and reporting. Public accountants carry out bank reconciliationson regular basis but the suspense accounts are not adequately monitored. This situation largelyreflects the use of the procedure of payments on the basis of advances. The SIGFIP system isunder-utilized since the publication of budget execution reports is not systematic. The reliabilityof the data cannot be totally ensured during the fiscal year, as the reconciliation between theSIGFIP and ASTER records is only done at the end of the fiscal year.

10. External scrutiny and audit. The Chamber of Accounts is not yet really operational.Although the DGTCP transmitted the Treasurer-General’s management accounts until the 2002fiscal year, none has, so far, been verified or judged. The last report prepared by the Chamber ofAccounts on the budget execution review law concerns the 2002 fiscal year. The examination ofthe draft budget execution review laws (Lois de Règlement) is done with much delay. The lastvoted budget execution review law is that of the 2001 fiscal year. The National Assembly doesnot receive any external audit report and since the budgets for the 2006, 2007 and 2008 fiscalyears were adopted by presidential ordinance, it did not consider the draft budget law (Loi deFinances). The score adopted for the corresponding indicators is, therefore, the lowest.

Assessment of the impact of weaknesses in public financial management

11. The weaknesses in public management have an impact on the objective of a soundmanagement of public finances (fiscal discipline, strategic allocation, and efficiency). Thefollowing table reviews some of the impacts of the weaknesses on the three objectives of a soundpublic financial management.

viii

Fiscal discipline Strategic allocation ofresources

Efficient service delivery

Credibility of thebudget

It is not possible to assess thelevel of credibility of budgetestimates in relation to budgetoutturns. Indeed, a considerableamount of expenditures to beregularized cannot be charged tothe budget. Domestic revenues arequite close to the estimates.However, the credibility can beaffected by the modalities ofbudget execution (system ofadvances), by the delay inadoption of the budget and,therefore, late disbursement ofbudget resources.

The importance of the amount ofarrears payment leads to addedcosts, as government suppliersintegrate a risk premium in theirprices. The presence ofimportant arrears may also resultin modifications in the realstructure of expenditures.

Requests for reallocation offunds from the funds’administrators are frequentand may prevent theefficient use of resources.However, these changesmay also be due to theexcessive detail of allocatedfunds.

Comprehensiveness andtransparency

Despite some weaknesses, thebudget structure, if used in all itscomponents, would allow for aclear presentation of the budget.

The budget documentation, whichincludes detailed annexes, notablyon transfers, does not conformwith the requirements of theorganic law or of the PEFAstandards.

A number of operations are notcovered by the budget. They arerevenues collected directly bysome ministries and fundsallocated, the amount of which isnot known.

The rules to allocate transfersfrom the central to the localgovernments are either notupdated or clear. The amounts ofthe transfers are communicatedlate, at the stage of budgetpreparation by the localgovernments, and are also paidlate.

The public has access to limitedinformation on the budget.

The incomplete budgetdocumentation may have anadverse effect on Parliamentarycontrol and prevent efficientallocation of resources.

The lack of consolidation of thedata on the EPNs and localgovernments may prevent theState from anticipating asituation of deficit of theseentities, which would affect itsown financial situation.

The lack of budgeting of part ofthe government resources has adirect impact on the total amountof resources to be allocated tothe different sectors.

The absence of pre-establishedrules governing the method ofdistribution of transfers from theState to the local governmentsleaves the door open for arbitrarydistribution of these resources.

The lack of information preventsthe public from verifying howthe resources are utilized.

The lack of transfer to thetreasury by some ministriesof revenues collected forservices rendered and thefact that they probably usethese amounts to meet theiroperating expenditures doesnot allow the centralgovernment to make anequitable distribution ofsuch resources.

The late provision ofinformation on transfersfrom the State to the localgovernments has a directimpact on the quality oftheir budget estimates.

Policy-basedbudgeting

The impact of the medium-termoperations is not taken intoaccount, since the budgetpreparation process is not basedon an overall medium-termframework.

The lack of MTEF may affectthe strategic allocation ofresources and lead to majorchanges in the composition ofexpenditures.

The lack of importanceattached to the medium-term prevents ministriesfrom optimizing theirinterventions.

ix



Moreover, no ministry has sectorstrategies based on quantifiedestimates.

The lack of dialogue between theMEF and the sector ministries aswell as the short deadline givento them for the preparation oftheir budget may have an adverseeffect on the quality of theirbudget proposals and, therefore,globally, on the allocation of theresource envelope.

Predictabilityand control inbudget execution

There is a formal framework forcash management. A treasury planis established at the beginning ofthe fiscal year, for the duration ofthe year and updated monthly.

The efficiency of the a prioriinternal control of expenditures isweak. Expenditures are largelyexecuted according to thesimplified procedure and aconsiderable amount is executedin the form of treasury advances.

The coordination between budgetexecution and the treasuryestimates is not obvious becauseof delays in the adoption of thebudget and recourse to advances.

The treasury cash flow forecastis not exploited, since the fundsfor current expenditures aremade available to the ministrieson a monthly basis. This practiceprevents them from efficientlymanaging their budget, as a greatnumber of expenditures extendover a period longer than onemonth.

The practice of making paymentson the basis of advances and thepresence of considerableamounts of expenditures to beregularized prevents theevaluation of the budgetexecution.

The lack of timelyinformation on availabilityof budget funds may favorthe emergence of irregularpractices among themanagers for fear of risks ofblocking funds.

The weakness of theinternal control system andthe practice of payments onthe basis of advances mayresult in the emergence ofunorthodox practices.

Accounting,recording andreporting

The general balance of thetreasury accounts is producedmonthly. The reconciliationsbetween the accounts andstatements of account are doneevery ten days. But, the quality ofthe information on the budgetexecution is limited by the lack ofautomatic transfer of data betweenthe SIGFIP and ASTER computersystems and the fact that thereconciliation between these twosystems is only done at the end ofthe fiscal year.

Apart from a monthly TOFE, thein-year budget execution reports,which could be obtained from theSIGFIP system, are notestablished.

Even with the delay, theadministrative entities are well

The fact that the executionreports are not used as tools toassist decision-making andpiloting of budgetimplementation, may prevent anefficient allocation of resources

The lack of information on themonitoring of budget executionmay also result in unjustifiedchanges in the composition ofexpenditures.

The lack of information onthe execution of budgets,both the general budget andbudgets of other publicadministrations, limits thecapacity to monitor theachievement of objectivesand, therefore, take thenecessary correctivemeasures as early aspossible.

The lack of control of thedisbursement of funds to therecipient administrativeentities may prevent theeffectiveness of thisdisbursement.

x



informed about the amount ofresources allocated to them. Butthe low level of financialresources of the ministries and thevery high number ofadministrative units only allowthem to carry out a few fieldsurveys on the effectiveness of theexpenditure.

Surveillance andexternalverification

The a posteriori examination ofthe execution of the budget law bythe Chamber of Accounts is notoperational.

The examination of the draftbudget execution review law byParliament is done with muchdelay. The last draft budgetexecution review law voted wasthat of fiscal year 2001.

The lack of a posterioriexamination of the publicaccounts may reduce theGovernment incentives toallocate resources in an efficientmanner and executing the budgetin accordance with the policiesand budget circular that served asbasis for budget preparation andexecution.

The lack of a posterioriexamination of publicaccounts may, in theabsence of sanctions, resultin lack of accountability onthe part of theadministrations. The qualityof the administrative andfinancial services may bereduced as a result.

Prospects for Reform Planning and Implementation

12. The Ministry of Finance developed in 2006 and 2007 a strategic action plan whoseobjectives were aimed at enhancing the public financial management system. It should also benoted that, in 2006, the status of implementation of the priority action matrix showed a goodexecution rate. This practice should be consolidated and further improved and, in this context,the Government could, in the short term, build on the findings of the PEFA review to develop astrategy for strengthening public finances in the areas of budget preparation, execution andcontrol.

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4. INTRODUCTION

4.1 The Government of Côte d’Ivoire initiated, during these recent years, major reforms of itspublic financial management system (PFM), but the crisis facing the country since 2002has had a negative impact on its performance. However, given the recent progressaccomplished under the auspices of the Ouagadougou Political Accord for reunification,significant improvement of the PFM system can be achieved in the short term. It is in thiscontext that the Government has decided to conduct an assessment of its PFM systemperformance on the basis of the indicators of the PEFA Secretariat. This performanceassessment will assist to review and deepen its reform program.

4.2 Objective of the report: The objective of the public financial management performancereport (PFM-PR) is to establish, on the basis of the 31 high-level PEFA indicators, abaseline from which the future progress in the PFM area will be assessed. TheGovernment and its technical and financial partners (TFPs) will thus have a baseline aswell as indicators to monitor and assess over time the impact of implemented reforms.

4.3 The review focused on the systems and practices in place during the reference periodsfixed by the PEFA methodology.72 The rules for assigning scores were applied inaccordance with the instructions contained in the June 2005 publication of the PEFASecretariat.73 It is useful to stress that the purpose of the exercise was not to assess orassign scores to the different public institutions or their officials but rather to situate thepublic finance management system in relation to good international practices.

4.4 The assessment was conducted with the support of several TFPs, including the WorldBank, the lead agency, the African Development Bank, the International Monetary Fundand the European Union.

4.5 An ad hoc Committee has been put in place, chaired by the Director-General of Budgetand Finance. This Committee ensured the preparation and implementation of the review.The Director of Forecasting and Budget Syntheses ensured the coordination (focal point)of the PEMFAR review for the national part. Throughout the process, the representativesof the national part (senior managers and high officials of the structures) devoted a lot oftime and efforts to ensure ownership of the review’s findings and facilitate the search fordocuments and justifications of the scores of the indicators. The World Bank, the leadagency of this assessment, ensured the coordination and acted as a focal point for theTFPs.

4.6 This report is Volume II of the “Public Expenditure Management and FinancialAccountability Review” (PEMFAR), and informed the preparation of the PEMFAR mainreport, particularly Chapter II, which presents a review of the public financial system.

72Document entitled “Guidance on evidence and sources of information to support the scoring of the indicators.”

73 Document entitled “Public Financial Management - Performance Measurement Framework.” PEFA Secretariat,World Bank, Washington D.C., June 2005.

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4.7 Process of preparing the report: The review was conducted in two stages:

An inter-agency mission to the field,74 during which working sessions were organizedwith representatives of the Government and the private sector and documentary evidencewas collected. At the end of the field mission, an aide-memoire containing the mainconclusions was presented to the Government.

The second phase concerned the preparation of this report. A provisional report wasinitially transmitted to the Government and all the donor agencies in January 2008. Thisprovisional report was then finalized to take into account the comments of the IvorianGovernment, the PEFA Secretariat and donor agencies. This report was presented forvalidation by all stakeholders during a workshop held in Abidjan on June 16-17, 2008.

4.8 The methodology for the preparation of the report: The review required many technicalinterviews with the senior managers of the structures involved and persons withresponsibilities in the public financial management system. The field mission, therefore,met with senior officials of the MEF, the National Coordination and MonitoringCommittee of the public procurement reform (CNCS), the Economic and FinancialAffairs Commission of the National Assembly, the General Public Inspectorate (IGE),the Chamber of Accounts, the Administrative and Financial Directors (DAAFs) of theMinistries in charge of Education, Health, Economic Infrastructure, the Department ofDecentralization and Local Communities of the Ministry of Interior, as well as officialsof the General Confederation of Enterprises of Côte d’Ivoire (CGECI).

4.9 The review relied on the analysis of the documents that were provided as well as on theadditional documentary evidence requested. Information on different sources was cross-checked whenever possible.

4.10 Some of the working sessions of the field mission were devoted specifically to thescoring of the indicators. The mission objectives were not only to explain the scoresassigned to the indicators with a view to their approval but also to attain the objective ofownership of the exercise by the national part.

4.11 Annex 6 of this report informs whether the observations transmitted by the Governmentwere totally or partially taken into account or not taken into account.

74 From 14 to 28 November 2007. Participants in this inter-agency mission included Mr. Robert Cauneau and Mrs.Gisèle Suire, international consultants financed by the African Development Bank and the World Bank,respectively, who drafted this report. The mission team, which was led by Messrs. Marcelo Andrade (TTL,Principal Economist) and Richard Doffonsou (Co-TTL, Economist), both World Bank experts, and included Messrs.Eric Yoboue, (Principal Procurement Specialist), Bella Lelouma Diallo (Principal Financial Management Specialist)and Mrs. Assiata Houédanou (Disbursement Assistant), all from the World Bank, Mr. Bacari Koné, Adviser to theTechnical Assistance of the IMF Fiscal Affairs Department, Messrs. Racine Kane, Lead Economist, Samba Ba(Principal Macro-Economist), and Serge Nguessan (Principal Procurement Officer) from the AfDB as well as Mr.Zoltàn Agai from the European Commission Delegation. Mr. François Serre, Consultant financed by the AfDB andProcurement Specialist, also took part in the mission. Mmes Zainab Mambo-Cissé, Tina Aboah Ndow, and JuditeFernandes (Operations Assistants) and Mrs. Marie-France Anet-Oyourou (Procurement Assistant), all from theWorld Bank, facilitated the preparation and work of the mission team.

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4.12 The scope of the assessment as provided by the PFM-PR: The public financialmanagement performance report in Côte d’Ivoire concerned all the revenues andexpenditures of the central government. The study, therefore, covered: the centraladministrations of ministries and their deconcentrated services. However, the NationalPublic Agencies (EPNs) and public enterprises, as well as the territorial communitieswere only integrated from the point of view of financial transfers from the State, of whichthey are beneficiaries.

4.13 Content of the report: The rest of the report comprises a brief presentation of theeconomic situation of Côte d’Ivoire and the legal and institutional framework of publicfinancial management (Chapter 2); a description of the context and explanation of thescores assigned to each PEFA performance indicator (Chapter 3); a brief description ofthe Government’s reform program and the institutional factors supporting reformplanning and implementation (Chapter 4). Several annexes comprise: a summary ofscores of the performance indicators (Annex 1), justifications of the specific scores foreach indicator (Annex 2), a list of the persons met (Annex 3) and a list of the documentsconsulted (Annex 4). Annex 5 presents the details of the calculations that were used forscoring the PI-1 and PI-2 indicators. Finally, Annex 6 provides information on thefollow-up of the observations transmitted by the Government on the provisional PEFAreport.

5. COUNTRY BACKGROUND INFORMATION

DESCRIPTION OF THE COUNTRY ECONOMIC SITUATION

Country Context

5.1 Considered as one of the countries with the most advanced economy in West Africa, Côted’Ivoire experienced a crisis, which resulted in a civil war in September 2002. Over theperiod 2000 to 2006, the average economic growth rate became negative and remainedbelow rates observed in the rest of the WAEMU and sub-Saharan Africa. Despite a percapita GDP of $ 920 for a population of a little over 18 million inhabitants, the livingconditions of the population and public services have deteriorated and it is estimated thatper capita income declined by 15% during the crisis.

5.2 Since the Ouagadougou Accord was signed, on March 7, 2007, which has received thesupport of the international community, the new Government has embarked on aneconomic recovery process and the prospect of holding presidential elections in 2008.The economic situation improved recently and the economic activity slightly improved toattain the rate of 1.5% in 2004, 1.8% in 2005 and 1% in 2006.

5.3 Despite a difficult context, in mid 2007, the Government implemented most of themeasures envisaged in the context of the program supported by the Emergency Post-Conflict Assistance (EPCA) of the IMF. This program focuses on general measures in theareas of budget policy, debt management, monetary and financial issues and structuralreforms aimed at restoring the viability of public finances and reconstructing theeconomy by launching key actions to strengthen the economy and improve transparency.

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The Government Reform Program

5.4 The Government has made considerable progress in restoring normal budget executionprocedures and, at the beginning of 2008, a credible budget was adopted by ordinance,thus limiting the recourse to cash advances which was widespread during the previousfiscal years, partially due to the late adoption of the budget. In 2008, the Governmentplans to implement measures to lay the basis, in the longer term, for deeper and wide-ranging structural reforms. The Government will particularly focus on: (i) strengtheningof the capacities and increasing the accountability of managers of the financial and fiscaladministrations and of the parastatal sector; (ii) intensification of controls; and (iii)improvement of communication on budget execution and, more broadly, on the results ofgovernment policies. The Government has pledged, through the PEMFAR review andimplementation of the Governance and Institutional Development Grant, funded by theWorld Bank, to adopt measures in the areas of public finance, the energy sector and thecocoa/coffee sector.

Rationale for PFM Reforms

5.5 As mentioned in its letter of development policy of April 2008, the Government isdetermined to place good governance of public resources management at the centre of itseconomic program. In order to improve budget transparency and enhance the efficiencyof public expenditures, the authorities intend to develop a comprehensive plan forimproving public financial management, with the support of the World Bank and otherdonor agencies. The PEMFAR review, conducted by the World Bank, jointly with theIMF, ADB and the European Commission should help identify the major orientations of apriority reform program in the area of public finance.

DESCRIPTION OF BUDGETARY OUTCOMES

Fiscal Performance

5.6 In 2006, the budget situation was not as good as envisaged and the basic primary surplusrepresented 0.3% of GDP (as against 0.4% of GDP achieved in 2005 and 1.4% of GDPplanned for 2006). This was due to weaker than planned revenues due to the lower levelsof oil and gas production than initially programmed. During the same year, expenditureswere higher than estimated, which is explained by overspending observed in non-salarycurrent expenditures (excluding crisis-related expenditures), in particular the unforeseensovereignty expenditures (toxic wastes and subsidies in the energy sector). The latter tookplace despite the fact that the level of crisis-related expenditures was lower thanestimated.

5.7 The table below was prepared on the basis of the data contained in tables 4a and 4b of thereport issued by the IMF for the 2007 Article IV consultations and the request presentedfor the emergency post-conflict assistance.

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Table 5.1: Revenue and Expenditure Outturns, 2004-2006

(Amounts in CFAF billion)

CFAF billions and % of GDP 2004 % GDP 2005 % GDP 2006 est. % GDP

Total revenue and grants 1,507.50 18.4 1,566.00 18.2 1,727.60 18.8

Total revenue 1,431.60 15.5 1,471.40 17.1 1,672.10 18.2

Grants 75.90 0.9 94.60 1.1 55.50 0.6

Projects 75.90 0.9 94.60 1.1 55.50 0.6

Total expenditures 1,643.60 20.1 1,714.00 19.9 1,889.70 20.6

Primary domestic expenditures and netlending

1,355.80 16.6 1,434.90 16.6 1,659.60 18.1

Interest due 181.40 2.2 177.50 2.1 162.10 1.8

Net lending 10.60 0.1 20.30 0.2 22.10 0.2

Overall balance, including grants -136.10 -1.7 -148.00 -1.7 -162.10 -1.8

Overall balance, excluding grants -212.00 -2.6 -242.60 -2.8 -217.60 -2.4

Basic primary balance 1/ 75.80 0.9 36.50 0.4 28.30 0.3

Overall balance, cash basis 63.40 0.8 -22.40 -0.3 -30.00 -0.3

Financing -63.40 -0.8 22.40 0.3 30.00 0.3

Domestic -122.20 -1.5 38.60 0.4 26.90 0.3

External 58.80 0.7 -16.20 -0.2 3.10 0

1/Total revenues (excluding grants) minus expenditures, excluding interest due and capital expenditures financed by

external resources, except net compensation proceeds from toxic waste damage.

Allocation of Resources

5.8 In 2002, Côte d’Ivoire prepared a draft Poverty Reduction Strategy Paper entitled“Growth, Development, Wealth Creation and Poverty Reduction 2003-2007”, but thispaper was not adopted. There is also no national long-term policy document or medium-term budget framework. Moreover, the objectives defined by the convergence policiesdecided in the framework of the WAEMU seem not to have been taken into account,since the budget documents do not make reference to them. Hence, the allocation ofresources at the time of budget preparation does not obey to any clear logic and thebudget funds are allocated to the spending structures, taking more into account the levelof the allocations at their disposal during the previous fiscal year than a real strategicvision.

5.9 Table 2.2 below presents the estimated and actual expenditures during the fiscal years2004, 2005 and 2006, classified by major functional categories. The data that appear inthis table are those that were used for the review of the PI-1 and PI-2 indicators. Theyshould be considered as incomplete, since they do not reflect expenditures to beregularized, hence paid but not recorded in a specific budget account, showing in the cashbalances of some suspense accounts of the treasury balances. The totals of actualexpenditures from 2004 to 2006 in Table 2.2 below, should in principle, be close todomestic primary expenditures and net loans in the previous Table.

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Table 5.2: Estimated and Actual Expenditures by Major Functional Categories, 2004-2006


2004 2005 2006

Estimates Actual

%executed Estimates Actual

%executed Estimates Actual

%executed

General PublicServices

189,384 178,927 94.5% 230,639 219,263 95.1% 247,712 232,488 93.9%

Defence 131,716 130,453 99.0% 128,704 122,671 95.3% 132,359 119,796 90.5%

Education 364,826 344,311 94.4% 365,959 361,807 98.9% 392,450 374,454 95.4%

Health 71,897 67,566 94.0% 71,630 67,020 93.6% 76,721 73,679 96.0%

Social Services 10,363 9,614 92.8% 9,831 9,807 99.8% 14,876 15,776 106.1%

EconomicServices

221,743 256,408 115.6% 214,108 239,135 111.7% 289,709 267,271 92.3%

Others 47,941 46,844 97.7% 83,660 63,904 76.3% 78,444 71,821 91.6%

TotalExpenditures

1,037,874 1,034,127 99.6% 1,104,535 1,083,608 98.1% 1,232,270 1,155,284 93.8%

DESCRIPTION OF THE LEGAL AND INSTITUTIONAL FRAMEWORK FOR PFM

The Legal Framework

5.10 The legal framework of the public financial management system of Côte d’Ivoirecomprises the Constitution, the Organic Law on the Budget Law of December 31, 1959,which sets the rules on the preparation of the Budget Laws, their execution as well astheir control, and Law No. 62-53 of February 12, 1962, organizing public financemanagement.

The Institutional Framework

5.11 The Ministry of Economy and Finance ensures the coordination of the different stages ofthe budget preparation. It conducts budget conferences and ensures arbitrations. Wherenecessary, it resorts to the arbitration of the Prime Minister. It approves the budgetdocuments and consolidates them in the draft budget, which is then submitted to theCabinet. Following the adoption of the draft Budget Law by the Government, it edits andfinalizes the different documents to be submitted to the National Assembly.

5.12 The budget management system is based on the principle of segregation of dutiesbetween credit managers (ordonnateurs) and accountants (comptables). The Minister ofFinance is the sole credit manager of the budget. He delegates his power to sub-creditmanagers who are the Administrative and Financial Directors (DAAFs) of the ministries.The ministers are the administrators of credits.

5.13 According to the regulation, the expenditures are incurred through the normal procedure(commitment-validation-order to pay-payment) or by a simplified procedure whereby thecommitment and order to pay phases take place concomitantly. The public accountantsare in charge of collection of revenues and payment of expenditures, as well as keepingthe accounting records of the State.

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5.14 The texts establish that: (i) the ex ante control of public expenditure is exercised by theDirectorate of Financial Control (Direction du Contrôle Financier) for expenditures onthe budget, the Directorate of Budget Control (Direction du Contrôle Budgétaire) forexpenditures by National Public Agencies (EPNs), as well as by the public accountants;and (ii) the financial and budget operations of the State are controlled ex post by theinternal bodies, the General Inspectorate of Finance (Inspection Générale des Finances),the General Public Inspectorate (Inspection Générale de l’État),control structures of theministries, and by an external body, the Chamber of Accounts of the Supreme Court. Anex ante control of compliance with public procurement rules and procedures is alsoexercised by the Directorate of Public Procurement.

5.15 The National Assembly exercises its control through the examination and vote of thedraft Budget Law (Loi des Finances) and the draft Budget Execution Review Law (Loi deRèglement). A budget timetable has been formalized for the preparation of the 2008budget. The 1959 Organic law on the Budget Law defines the provisions on thepresentation of the Budget Law and Budget Execution Review Law, as well as modalitiesfor voting the draft budget.

6. ASSESSEMNT OF PFM SYSTEMS, PROCESSESAND INSTITUTIONS

CREDIBILITY OF THE BUDGET

6.1 Credibility, in the sense of good practices of public financial management, is reviewed onthe basis of the difference between the initial estimates and actuals in terms of revenuesand expenditures75. Concerning estimates, the data used for assessing these criteria werethose of the initial budget of the 2004, 2005 and 2006 fiscal years. In terms of actual, thedata used were extracted from the General Accounts of the Financial Administration(CGAF). Considered as such, the figures of budget execution of the CGAF would allowto conclude that the budget is credible, as it appears in Table 3.1 below. Indeed, this tableshows that the actual total domestic primary expenditures (i.e. excluding debt service andexternally financed project expenditures) were above 5% of the estimated amounts foronly one year.

6.2 However, given the practices of the expenditure chain actors intervening upstream of theDGTCP, the data is incomplete as it does not include the considerable amount ofexpenditures to be regularized, therefore paid but not recorded in a specific budgetaccount, which are reported in the treasury cash balance of each of the above mentionedfiscal years under accounts 470.1 “Expenditures paid without payment order” and undercertain sub-divisions of account 472 “Provisional charge of expenditures to theDGTCP”, which are not possible to analyse for lack of details. The field mission couldnot obtain details of the amounts concerned, classified by fiscal year and by ministry. Forthis reason, the review could not assign a score to this indicator.

75The amounts of budget realizations used in this report are all based on payment authorizations.

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Table 6.1: Comparison Between Expenditures Estimated by the Budget Laws and ActualExpenditures for the Fiscal Years 2004 to 2006


2004 2005 2006

Primary expenditures approved1 (initial budget law) 1,037.8 1,104.5 1,232.2

Actual primary expenditures (CGAFs) 1,034.1 1,083.6 1,155.2

Difference between amount approved and actual 3.7 20.9 76.9

Difference between amounts approved and actual (in %) 0.4% 1.9% 6.2%

1/ Domestic primary expenditures (excluding debt service and externally financed projectexpenditures).

Sources: Budgets voted and CGAFs.

6.3 The analysis, by ministry or institution, of the differences between estimated and actualexpenditures as they appear in the CGAFs allows to conclude that budget credibility isaverage. Table 3.2 below shows the average of these differences calculated according tothe PEFA method. It indicates that the differences never exceeded 10%. However, as inthe case of the evaluation of the credibility of the budget at the aggregate level, data onbudget execution should be completed by adding the important amount of expenditurespaid without payment order and expenditures provisionally charged to the DGTCP andnot yet regularized. Hence, here too, the review considers that it cannot assign scores tothis indicator.

Table 6.2: Differences Between Initial Budgets and Actual Expenditures for the 20 MostImportant Budget Lines During the 2004, 2006 and 2006 Fiscal Years*

Difference in totalexpenditures (PI-1)

Variation of totalexpenditures

Variation exceeding thetotal difference (PI-2)

2004 0.4% 8.0% 7.6%

2005 1.9% 9.9% 8.0%

2006 6.2% 6.7% 0.4%

* The data and calculation are detailed in annex 5.

6.4 The difference between the estimates of domestic revenues (budget revenues excludinggrants and borrowing) and those effectively realized only exceeded 5% during fiscal year2004. The performance of domestic revenues should, therefore, be considered asadequate if the crisis situation is taken into account. It should be noted that the actual for2006 was higher than the estimate.

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Table 6.3: Comparison Between Estimates and Actual Domestic Revenuesfor the 2004, 2005 and 2006 Fiscal Years


Finance Act CGAFActual

(Rate)

2004 1,466.05 1,347.66 91.9%

2005 1,368.96 1,299.83 95%

2006 1,364.96 1,425.22 104.4%

6.5 The regulation applied for the definition of payment in arrears is that of the WAEMU,that is to say all expenditures received by the Treasury and not paid 90 days after the dateof the order to pay has been issued by the credit manager, i.e. from the date oftransmission of the order to pay to the public accountant, whether it is payment for goodsand services or salaries. Subject to some arrangements concerning specific creditors likethe World Bank, the public debt service is considered as arrears from the moment thepayment is not made by the due date.

6.6 The arrears are monitored by the Directorate of Public Debt (DDP) and the StatisticsCoordination Department of the DGTCP. The DDP uses the SYGADE computer system,which helps among others to know the age of the arrears, both in terms of the originalfiscal year and precise date they were incurred, particularly concerning the Treasurypending payments managed by the IT system ASTER. The data available to the DDP aretransmitted every month to the financial partners as part of the monitoring of theeconomic and financial program and to the Directorate of Conjuncture and EconomicForecasting (DCPE) for the monthly preparation of the TOFE. The DDP prepares aquarterly report on the debt. This document contains the arrears on both the external anddomestic debts. It should be noted that since an inventory of salary arrears is beingundertaken by the IGF, the total amount of arrears could still be higher.

6.7 As a consequence of the crisis situation that has been prevailing for several years, thestock of arrears as of December 31, 2006, is very important, totalling CFAF 1,162 billion,representing 100.6% of the total primary expenditures for the fiscal year. This stockincreased in 2006 in relative value, since the stock as of December 31, 2005, represented93.65% of the total primary expenditures for fiscal year 2005.

6.8 The accounting of the Treasury allows monitoring the pending payments both in thegeneral and subsidiary accounting (monitoring of the budget execution and individualizedmanagement of the payment orders). The ASTER computer system allows making partialpayments on the payment orders to facilitate dealing with temporary cash difficulties. Italso allows publishing reports containing either all the pending payment orders or thosethat were issued after more than 90 days which are, therefore, considered as domesticarrears.

6.9 The project under implementation, to establish the interface between the SIGFIP andASTER applications, will facilitate a more efficient monitoring of payment orders andremaining amounts yet to be paid. Besides, the Government has pledged to pay off the

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arrears owed to the World Bank and the African Development Bank in agreement withthese two institutions. It has put in place a mechanism intended to secure the necessaryfunds for covering the servicing of debts owed to these institutions.76 It has also pledgedto adopt a domestic arrears clearance plan over the period 2007/2009.

6.10 A summary of the indicators covering the credibility of the budget is presented in thefollowing matrix:

76At the beginning of 2008, the Government paid half of its arrears owed to the World Bank and on April 1, 2008, it

benefited from an Economic Governance and Recovery Grant (EGRG) of US$308 million (including a budgetsupport of about US$35 million), which made it possible to pay off the other half.

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Indicator Score Summary Explanation

A. CREDIBILITY OFTHE BUDGET

PI-1. Aggregateexpenditure out-turncompared to originalapproved budget

NS 77 Differences between the budget initially approved and actualexpenditures were:

2004: 0.4%

2005: 1.9%

2006: 6.2%

Considered as such, these figures would allow concluding thatbudget is credible and propose the A score. However, theevaluation of this indicator should be qualified, since aconsiderable amount of expenditures to be regularized, i.e. paidand not charged to a specific budget account, feature in thebalance of each of the fiscal years on accounts 470.1 and somesub-divisions of account 472.

Since the details of operations charged to these suspenseaccounts is not known, this indicator was not scored.

PI-2. Composition ofexpenditure out-turncompared to originalapproved budget

NS The variations of the actual composition of the budget(according to the administrative classification) compared towhat was initially approved are as follows:

2004: 7.6%

2005: 8%

2006: 0.4%

Considered as such, these figures would allow a C score to thisindicator. However, as in the case of indicator PI-1, given theconsiderable amounts of expenditures charged to accounts470.1 and some sub-divisions of account 472, these values arelikely to change. Therefore, this indicator cannot be scored.

PI-3. Aggregate revenueout-turn compared tooriginal approved budget

B Total actual revenues compared to revenues of the budget initiallyapproved were:

2004: 91.9%

2005: 95%

2006: 104.4%

Since the revenues of the past 3 years were only in one yearbelow 94%, the score is B.

PI-4. Stock and monitoringof expenditure paymentarrears

D+

(i) Stock of expenditurepayment arrears and anyrecent change in the stock

D The regulation applied for the definition of arrears is that of theWAEMU, that is to say any expenditure not paid within a periodof 90 days from their issue by the credit manager, i.e. from the dateof transmission of the payment order to the public accountant,whether it is payment for goods and services or salaries.

The stock of arrears as at 31 December 2006 amounts to CFAF

77NS: No Score.

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1,162 billion and represents 100.6% of the total primaryexpenditures for the fiscal year. It increased in 2006 in relativevalue, since the stock as at December 31, 2005, represented93.65% of total primary expenditures of fiscal year 2005.

Since the stock of arrears exceeds 10% of the total primaryexpenditures, the score is D.

(ii) Availability of data formonitoring the stock ofexpenditure payment arrears

B The arrears are monitored by the DGTCP (Directorate of PublicDebt and Statistics Coordination Department). The dataconcerning the stock of arrears are transmitted monthly to thefinancial partners. The Directorate of Public Debt prepares aquarterly report. These documents comprise the total of externaland domestic arrears, having been specified that the IGF iscurrently carrying out an audit of the salary arrears.

The score is B since the data on the stock of arrears are regularlymade available but may be incomplete for a small number ofcategories of expenditures identified, notably salaries.

COMPREHENSIVENESS AND TRANSPARENCY

Classification of the Budget

6.11 The budget nomenclature was adopted by Decree No. 98-259 of June 3, 1998 whichestablishes the detailed codification of the Government’s budget classification. It wasimplemented on January 1, 1999 by Order No. 1572/MEF/CAB of December 31, 1998.Compared to the WAEMU project, which is mainly based on double classification byservices and by nature, the Ivorian budget nomenclature also comprises a classification ofexpenditures by destination. The classification of expenditures is based on four elements:title, ministry or section, destination, and nature.

6.12 Given the potential offered by the nomenclature, the presentation of the budget documentcould be improved. The expenditures are not presented in a summary form using thefunctional classification and a synthesis by ministry. The reading of the document ismade difficult because of the regrouping within the classification by destination (chapterand sub-chapter): (i) of a classification by sectors of activities, similar to the functionalclassification at the level of the chapter; and (ii) of an administrative classification at thelevel of the sub-chapter. The budget is presented by title, representing a diverse type ofexpenditures, and within each title by ministry. Some expenditure classified under title 3“Investment Spending” is in fact operating expenditures of the services. In the same way,some expenditures featuring under title 2 “Operating Expenditures”, are in realityinvestment expenditures. Moreover, the budget execution review laws do not presentexpenditures classified by ministry. The last budget execution review laws adopted in2000 and 2001 present the execution of expenditures only by nature.

6.13 A presentation of expenditures by functions according to the classification of thefunctions of public administrations (COFOG) of the Government Finance Statistics

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(GFS) Manual of 2001 is made possible thanks to a bridge table. It should be noted thatthe Government undertook to integrate in the budget nomenclature the 2001 GFSfunctional classification.


B. COMPREHENSIVENESSAND TRANSPARENCY

PI-5. Classification of thebudget

B The nomenclature classifies the expenditures by nature andaccording to their administrative destination. The classificationby destination comprises a classification by sectors of activitysimilar to the functional classification at the level of the chapter,which is identical to that of WAEMU Guideline No. 4/98 onbudget nomenclature. The budget execution review law adoptedin 2001 presents the execution by nature. The functionalclassification used is a specific classification, but it may be madesimilar to the COFOG by using a bridge table.

Score is B, because the establishment and execution of the budget arebased on an administrative, economic and infra-functionalclassification inspired by at least the ten main functions of COFOG.

Comprehensiveness of the Budget

6.14 The annual budget documentation presented to the National Assembly comprises a set ofannexes and reports, containing pertinent macro-economic and budget information on thefiscal policy and the main macro-economic problems. In this regard, the production of thedocumentation required by Article 35 of the Order of 1959 is observed. This Orderestablishes that the draft law presented to Parliament should be accompanied by:

A report on the economic and financial situation, recent main outcomes and futureprospects.

Support documents indicating the cost of services previously voted as well as the cost ofthe new measures associated with proposed modifications, notably the credits for thecreation, abolition, and transformation of employment.

Annexes providing the list of special Treasury accounts, their revenues, expenditures andoverdrafts as well as the full list of quasi-fiscal taxes;

Concerning the budget annex on investment and equipment, a report on the execution ofthe operations during the past year and a statement indicating the scheduling over thefuture years of the voted programs authorized.

Concerning other budget annexes, a report on the activity of the interested service duringthe past year and on the operational and investment program planned for the followingfiscal year.

6.15 The budget annexes contain detailed information on the financial operations of nationalpublic agencies (EPNs) as well as amounts of votes allocated in the budget for the local

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communities. It should be noted that WAEMU Guideline No. 5/97/CM/WAEMU on thebudget law contains additional requirements in this field with regard to the currentpractice in Côte d’Ivoire. Indeed, the documentation to be presented to the NationalAssembly should include a statement on pending payments by the State established onthe most recent date at the time of tabling the draft budget law, a statement on thebalances and deadlines for public debt servicing and a statement on credits pending to becollected.

6.16 In the sense of the PEFA review, the criteria on the presentation of the budget documentare presented as follows:

The macro-economic assumptions for 2007 feature in the financial and economic report(page 54). These are also featured in the analysis of compliance with the WAEMUcriteria which include indications such as the inflation rate, the growth rate and theexchange rate. This benchmark is, therefore, met.

The economic and financial report makes reference to the ratio of the basic budgetbalance as a ratio to GDP (page 51). But there is no presentation of budget balances asdefined in the Government Finance Statistics (GFS). This benchmark is, therefore, notmet.

Funding of the deficit, including the breakdown, does not feature explicitly in the budgetdocument. The balance of the budget is presented but details of financing needs are notspecifically stated. This benchmark is therefore not met.

The debt stock features in an aggregated manner in the 2007 budget document. Thisbenchmark, therefore, is met.

There is no detailed information on the financial assets, i.e. the cash amounts or creditsheld by the State. This benchmark is, therefore, not met.

There is no detailed statement of execution for the previous year presented in the sameformat as the draft budget. For example, in the 2007 budget, there is no detailedinformation, using the same format as the proposed budget, on the execution of the 2005budget and revised estimates for 2006. The indications on the execution are global. Thisbenchmark is, therefore, not met.

The 2007 budget was prepared using the details and format of the initial estimates of the2006 budget. This benchmark is, therefore, met.

The report on presentation of the 2005 budget law, which is the last budget adopted bythe National Assembly, contains summary tables on revenues and expenditures. The dataon expenditures are presented by title and by ministry. The draft 2007 Budget presentedto Cabinet contains the same tables. This benchmark is, therefore, met.

Annex 2, entitled “Catalogue of new measures”, presents the financial impact of thesemeasures. The fiscal annex contains a note which presents, in a general manner, the mainfiscal measures adopted over the past few years concerning the rationalization andmodernization of the fiscal system. But the impact of these measures is not analyzed inthe document. This benchmark is, therefore, not met.

6.17 Since 1999, with the establishment of the Integrated Public Finance Management System(SIGFIP), efforts have been made to improve the readability of the budget document andthe financial information. The SIGFIP IT application helped to improve the monitoring of

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the execution of the budget, at both the central and deconcentrated levels. It is nowpossible to obtain, in real time, information on the execution of expenditures that areregistered in the system and the authorities are committed to exploiting its possibilities,notably by producing, at least quarterly, a report on the budget execution.


PI-6. Comprehensiveness ofinformation included in thebudget documentation

CThe assessment is based on a specific list of 9 benchmarks, whichshould be communicated in the budget document for the fiscal year2007 addressed to the Parliament or the National Assembly.

The benchmarks that are met are as follows:

i) Macro-economic assumptions;

iv) Debt stock;vii) Presentation in the same format as the initial estimates of theprevious budget;

viii) Summary tables on revenues and expenditures.

The unmet benchmarks are as follows:

ii) Presentation of budget balances;iii) Financing of the deficit;

v) Detailed information on financial assets;vi) Detailed statement of execution for the previous year presentedin the same format as the draft budget;ix) Analysis of the impact of the fiscal measures.

Overall, 4 out of the 9 information benchmarks are met and the scoreis C.

Extent of unreported Operations of the Central Administration

6.18 According to the provisions of Article 3 of the Organic Law, the budget comprises thetotality of the expenses and resources of the State in a single account entitled generalbudget. However, a number of operations do not feature in it:

First of all, revenues collected directly by some ministries, in general for servicesrendered and, which are either not paid to the Treasury or are partially paid (examinationfees, fines, mining revenues, etc.). Some of these revenues, called service revenues(counterpart of a service rendered), are regulated by specific texts. The administrationplans to clean up these texts. By definition, the level of these operations is not known,having been specified that there is a regulation for some of them. The DGTCP and theIGF have started identifying these revenues in order to make them follow the revenueregimes in accordance with the regulation.

Moreover, concerning the comprehensiveness of the budget, it is necessary to budget thequasi-fiscal levies of certain key sectors, such as the petroleum and coffee/cocoa sectors.

Also, some allocated funds should be managed according to the regulation on earmarkedaccounts, a regulation that exists but is not yet utilized. The Government intends toreview this practice and, therefore, use this specific regulation for earmarked accounts.The list of these funds is known but not the amounts managed.

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6.19 Concerning externally-financed expenditures, most of them are included in the budget,having been specified that they have declined considerably during the past three years.Title III of the budget contains the details of expenditures funded by the Treasury with itsown resources and those funded with grants and loans. But the expenditures financed bygrants are not presented in an exhaustive manner. Externally-financed expenditures aremonitored by a Committee on Mobilization of External Financing and Monitoring ofPublic Investments (COMFESIP), which is responsible for producing a quarterly andannual report on the mobilization of budget support and execution of public investments.As of the date of the review, the report for fiscal year 2004, the report as of September30, 2005 and the report as of October 31, 2006 had been produced. But the final report asof December 31, 2006, was not available.


PI-7. Extent ofunreported governmentoperations

NS

(i) Level of extra-budgetary expenditures NS

A number of operations, whose amount has not yet been assessed by theadministration, are not covered in the budget. They are revenues collecteddirectly by some ministries, in general for services rendered and which areeither not paid back to the Treasury or are partially paid. Moreover,concerning the comprehensiveness of the budget, it is necessary to budgetthe quasi-fiscal levies of certain key sectors, such as the petroleum andcoffee/cocoa sectors. Similarly, some of the earmarked funds, the list ofwhich is known, but not the corresponding amounts, are not managedaccording to the regulation, which stipulate however that they should obeythe rules on earmarked accounts.

Since the information on amounts collected directly by some ministries aswell as those concerning funds that should be managed according to theregulation established for earmarked accounts are not known, this componentis not scored.

(ii) Income/expenditureinformation on donor-funded projects

NS From the point of view of forecasting, the majority of externally-financedexpenditures are included in the budget. These expenditures are monitoredby COMFESIP which, for the fiscal year 2006, only provided information onthe level of these expenditures until October 31.

A score cannot be assigned to this component without the production of thefinal report of COMFESIP for fiscal year 2006.

Transparency of Intergovernmental Fiscal Relations

6.20 The territorial administrative organization distinguishes 5 levels of decentralization: 718communes, 183 sub-prefectures, 68 departments, 19 regions and 2 districts. It is useful atthis stage to clarify the decentralization and deconcentration concepts. Decentralizationinvolves assigning to the elected local authorities the management responsibility, whiledeconcentration refers to the action of giving more powers to the local representatives ofthe Central Government.

6.21 Law 2003-489 of December 26, 2003 on the financial, fiscal and territorial regime of thelocal communities devotes its title II to resources of the territorial communities. Chapter3 (Articles 86 – 96) deals with the State’s assistance, which results in the establishment ofan allocation for operational expenditures, another allocation for general decentralization

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and grants for equipment. The rules on distribution of these allocations are incomplete.For example, the law does not indicate the per capita amount of the fixed part of theoverall operational allocation and refers to a decree on modalities for calculating theadditional part of the allocation.

6.22 The rules on distribution of the allocations should, therefore, be the subject ofimplementation texts. Following the holding of the Decentralization General Assembliesof January 2007, instructions were given to accelerate the adoption of the implementingorders of the 2003 laws. Hence, concerning the decentralization allocation, a draft textwas proposed in January 2007. It is on this basis that the actual distributions of thisallocation would be made.

6.23 The resources of the State do not facilitate the transfer to the territorial communities ofthe amounts to which they are entitled, given the competences transferred. In order todistribute the amounts available, the DGBF communicates them the resource envelopes.Then, on the basis of the proposals of the communities, it issues a proposed distribution.The representatives of the DGBF feel that this approach may create disparities among thecommunities, since the amount that served as basis for the initial distributions could havebeen poorly determined. In this case, the initial error of evaluation is carried forwardfrom one year to the other.

6.24 The territorial communities also have tax resources for which the distribution rules areknown. Proceeds from state taxes are paid back to the territorial communities accordingto the quotas provided for by the provisions of Article 36 of the fiscal annex to the 2004Budget Law. Concerning the effective pay out of these sums, the books of the Central

Accounting Agency of Deposits (Agence Comptable Centrale des Dépôts-ACCD) contain aspecial bank account under the name of the General Treasury identified as “Tax revenuesto be paid out to the territorial communities”78. This account is intended to receivetransfers of tax quotas made by the Central Accounting Agency of the Treasury (AgentComptable Central du Trésor-ACCT) for the benefit of the territorial communitiesattached to the General Treasury. The funds that are paid into this special account areautomatically transferred to the respective accounts of the beneficiary communities.

6.25 For the preparation of the 2006 budget, the circular was dated October 17, 2005. Thedeadline given to the Presidents of the General Councils and Mayors to submit their draftbudget was October 29. Generally, the information on transfers from the State do notarrive at the financial departments of the territorial communities before the end ofNovember, too late to enable the local councils to effectively adopt their budget beforethe beginning of the fiscal year concerned. The local communities very rarely succeed inadopting their budget before January 1. If the budget is voted earlier, the Mayors areobliged to amend it to take into account the information on the amount of transfers. Asregards the effective payment of transfers, it is generally made with much delay.

78Procedure envisaged by instruction No. 0103 DGTCP/DCE of January 5, 2007, on the modalities of transferring

the quota of proceeds of certain taxes to the territorial communities.

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6.26 The Directorate of Parastatal Accounting of the DGTCP receives every month thefinancial situation and the aggregated budget situation of all the territorial communities.The budget and accounts nomenclature of these communities facilitate a presentation oftheir expenditures on the basis of an economic and functional classification identical tothat of the national budget. However, this last presentation has never been used.

6.27 In order to rapidly make available to the territorial communities their share of local taxes,provisions were recently adopted. They concern, notably Order No. 2006-234 of August2nd, 2006 in the 2006 budget, which establishes new rules on transfer of proceeds oftaxes to the communities. This text, indeed, provides for “the opening of an account inthe name of each territorial community in the books of the Treasury Department. Thisaccount is immediately credited with the quota for each community as soon as the tax iscollected.”


PI-8. Transparency of inter-governmental fiscal relations

D+

(i) Transparency and objectivityin the horizontal allocationamong the decentralizedadministrations

D There are four types of transfers from the State to the territorialcommunities: decentralization allocation, general operations allocation,equipment grant and share of local taxes to which they are entitled. Therules on distribution of these transfers are either not updated or unclear.Score is D.

(ii) Timeliness of reliableinformation to the decentralizedadministrations on theirallocations

C For the preparation of the 2006 Budget, the circular dated October 17,2005 and the deadline given to the Presidents of General Councils andMayors to submit their draft budget was October 29. The information,therefore, arrives too late to allow for major amendment of the budgets.

(iii) Extent of consolidation offiscal data for the generalgovernment according to sectoralcategories

D Although their budget and accounting nomenclature allows it, the budgetinformation of the territorial communities, which is centralized andaggregated monthly at the Directorate of Parastatal Accounting of theDGTCP, is not presented according to the functional or sectoralcategories. Score is D.

Oversight of the aggregate fiscal risk from other public sector entities

6.28 In Côte d’Ivoire, public sector entities other than the central administration areconstituted by National Public Agencies (EPNs) and State-owned companies.

6.29 The budget of the 70 EPNs is prepared in an autonomous manner within eachestablishment, eventually with the support of the Directorate of Parastatal Accounting ofthe DGTCP. It is then adopted by its Management Board and annexed to the budget. Allthe management accounts of the EPNs for fiscal 2004 were produced by accountingofficers and only one of them did not produce its management accounts for fiscal 2005and fiscal 2006. These documents contain reliable information on their accounting andbudget execution.

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6.30 The Directorate of Parastatal Accounting receives every month a financial and budgetsituation for most of the establishments. These situations are prepared by accountingofficers of the establishments who are staff of the DGTCP. The MEF is, therefore, in aposition to anticipate the eventual risk of slippages due to the build up of arrears orcreation of operational deficits, which could adversely affect the financial situation of theState. However, since it has no financial and budget information from all the EPNs, itcannot establish a consolidated situation.

6.31 It is necessary to specify that the EPNs do not resort to borrowing, but they aresometimes compelled to solicit grants directly from the donors. In order to anticipate oneventual cash problems and, thereby, avoid the constitution of arrears, the State generallyrecommends to them to spend on the basis of their cash situation. If it happens that,despite the recommendation, pending payments accumulate, the latter are at the charge ofthe EPN concerned, unless it is dissolved.

6.32 The data on the financial operations of public enterprises and companies with publicfinancial participation are available for those concerning State owned companies andcompanies with majority public participation, except for the Civil Servants National

Retirement Fund (Caisse Générale de Retraites des Agents de l’Etat-CGRAE), for whichan audit is envisaged. It is, therefore, not possible to consolidate the financial and budgetinformation of all these entities.

6.33 The management accounts of the territorial communities (districts, departments andcommunes) are established by the accountant of the community, then approved by itsdeliberating body and forwarded to the MEF latest on June 30 of the year following theclosure of the fiscal year. After the analysis of these documents, the Directorate ofParastatal Accounting of DGTCP deposits them with the Chamber of Accounts, latest on31 August of the year following the closure of the fiscal year. At the time of theassessment, the management accounts of the territorial communities for the past 3 fiscalyears (2004, 2005 and 2006) had been produced at 80% (439 out of 549). The documentscontain detailed information, which helps the DGTCP to carry out an initial control oftheir accounts and their budget execution and then make these elements available to theChamber of Accounts. Hence, the net budget situation of the territorial communities iscontrolled at least every year, but does not make it possible to present a consolidatedsituation.


PI-9. Oversight of the overallfiscal risk from other publicsector entities

C

(i) Extent of central governmentmonitoring of autonomous publicagencies and public enterprises

C Most of the main autonomous public agencies (EPN) and publicenterprises submit, at least every year, budget reports to thecentral administrations. However, since some of them do notcomply with this directive, it is not possible to present aconsolidated situation. The score is C.

(ii) Extent of central governmentmonitoring of the decentralizedadministrations fiscal position

C The net budget situation of the territorial communities iscontrolled at least every year, but does not make it possible topresent a consolidated situation. The score is C.

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Public access to key fiscal information

6.34 The access of the public to the main budget information is improving gradually with theestablishment of Internet sites for the main financial administrations. One can, forexample, consult the 2004 and 2005 fiscal annexes of the 2004 and 2005 Budgets on theInternet site of the DGTCP, which, like that of the DGI, is one of the best documentedsites. These documents may be communicated, at their request, to interested persons ororganizations. However, the dissemination of the information to the public concerningbudget allocations and budget execution is still limited and, generally, the public hasaccess to this information only after the adoption of the budget.

6.35 On the Internet site of the DGTCP, it is also possible to consult the monthly informationreview of the Ministry of Economy and Finance Eco Actualités, which provideseconomic and administrative information. However, there are no publications presentingthe results of the budget execution in an analytical form accessible to the public. Thisinformation is, nevertheless, available and should be published in the framework of thecommunication policy of the Ministry.

6.36 In the sense of the PEFA indicators, elements of the main budget information accessibleto the public are presented as follows:

The enterprises are consulted by the MEF at the stage of establishment of the macro-economic framework. The budget documents are accessible to the public after the votingof the budget law. The main elements are published in the Gazette and in the writtenpress, which carries out analyses. However, the budget documents are not accessible atthe time of the presentation of the budget in Parliament. This criterion is, therefore, notmet.

The in-year annual budget execution reports are not available to the public. This criterionis, therefore, not met.

The end-of-year financial statements, notably the draft budget execution review laws, arenot approved since fiscal year 2002. The last budget execution review law approved isthat of 2001. The draft budget execution review law of 2003 was forwarded to theChamber of Accounts in July 2006. In the context of the budget support granted by theWorld Bank, the authorities are committed to examining the draft budget executionreview law of 2003 and 2004 before the end of 2007. This criterion is, therefore, not met.

The external audit reports, notably the report of the Chamber of Accounts on execution ofthe budget law, are not accessible to the public within the 6 months following the audit ofthe accounts. This criterion is, therefore, not met.

The award of contracts estimated to cost more than $100,000, or about CFAF 50 million,is advertised in the public procurement journal, which is published every 10 days. Thiscriterion is, therefore, met.

The information on resources made available to primary service units at the local level isdetailed in the budget document for the administrative entities with a credit administrator.For the others, the information is available to the beneficiaries upon request to theadministrative department of their constituency. This criterion is, therefore, met.

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PI-10. Public access to keyfiscal information

C▲ This indicator is based on a list of six elements of information aboutbudget operations, to which the public should have access.

The criteria that are met are as follows:

v) The award of contracts estimated at over $100,000;

vi) The information on resources made available to the administrativeunits.

The criteria that are not met are as follows:

i) The budget document at the time of their presentation inParliament;

ii) The in-year reports on the execution of the budget;

iii) The year-end financial statements;

iv) The external audit reports.

The score is C, since the administration makes available to the publictwo of the elements mentioned in the PEFA performance framework.An arrow has been added to the score to indicate that the process isimproving, notably with the establishment of Internet sites for themain financial administrations.

POLICY-BASED BUDGETING

Orderliness and participation in the annual budget process

6.37 The instruction of the MEF dated July 16, 2007, sets the timetable for preparation of the2008 Budget, which defines the main stages as well as their deadlines up to thepromulgation of the budget law, which should take place before December 31, 2007. Thebudget conferences should take place between September 3 and October 14. But delaysare observed in the respect of this timetable. Concerning fiscal year 2007, which serves asreference for assigning scores to this component, it could not be demonstrated that abudget timetable had been established or instructions formally given for preparation ofthe budget.

6.38 The deadline for presentation of the budget to the National Assembly is fixed by Article80 of the Constitution, which stipulates that “the budget law is tabled before the NationalAssembly at the opening of the October session.” Given the crisis situation prevailing inCôte d’Ivoire these past years, the budget was approved and adopted by Ordinance. The2005 Budget was adopted by the National Assembly on April 27, 2005; the 2006 Budgetwas approved on June 14, 2006 and adopted by Ordinance on August 2, 2006; and the2007 budget was approved May 31, 2007 and adopted by Ordinance on May 31, 2007.


PI-11. Orderliness andparticipation in the annualbudget process

D▲

(i) Existence of and adherence toa fixed budget calendar

D▲ The reference period for this component concerns the last budgetadopted (2007). Since the information on the timetable for the

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preparation of the 2007 Budget is inadequate to determine thenumber of weeks between reception of the budget circular andbudget submissions by the ministries, the score is D.

The time-table for the preparation of the 2008 Budget has beendefined. It establishes the main stages and their deadlines up to thepromulgation of the draft budget law. This progress justifies anarrow.

(ii) Guidance on the preparationof budget submissions

D Concerning fiscal 2007, it could not be demonstrated that a circularhad formally been issued for the preparation of the budget. TheMEF’s circular of July 16th, 2007 sets the timetable for thepreparation of the 2008 Budget.

The score is, therefore, D.

(iii) Timely budget approval bythe legislature

D The reference period for this component concerns the last threebudget years. During the past 2 years (2006 and 2007), the budgetwas adopted by Ordinance with more than 5 months delay. Thescore is, therefore, D.

Multi-year perspective in fiscal planning, expenditure policy and budgeting

6.39 The MTEF is an integrating factor of the PRSP in the public expenditure programs, butthe crisis situation did not make it possible to finalize this strategy and, consequently,Côte d’Ivoire is preparing neither the general MTEF nor sectoral MTEFs. However, inthe framework of the strategy of the post-crisis re-engagement, the process has been re-launched. In this regard, a workshop should be organized from 28 to 30 November 2007.Moreover, although the PRSP was not adopted, a national development strategy focusedon the MDGs is being finalized and could help to place the budget in a multiyearperspective.

6.40 The Debt Department has installed the DebtPro software for conducting debtsustainability analyses. It seems that this department is trying to carry out such analysesbut its work is not validated by the authorities. The department intends to master this tool,initially with the support of the development partners. The estimated expenses of thedebt, calculated on the basis of the debt outstanding as of the end of the year, arecommunicated to the DGBF for preparation of the annual budget.

6.41 Issues relating to the crisis recovery, as those relating to the staffing and officerehabilitation, are dealt with as a priority, with the development of strategies relegated toa second plan. There are no quantified sectoral strategies, notably in the health, educationor infrastructure sectors. However, the development of a new National Health SectorProgram (PNDS) for 2008-2012 is one of the priority activities of the action plan of thissector.

6.42 A Public Investment Program (PIP) is established on the basis of the major budgetorientations. This document, which constitutes an attempt to monitor and assessinvestments, is a triennial programming of investments updated every year on the basis ofthe actual realizations and orientations and priorities of the Government. A few projectsare based on strategies in the Ministries of Health and Education. There is also a medium-

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term national strategy, which integrates some sectoral strategies. But these strategies areneither detailed into action plans nor assessed.

6.43 The Directorate of Planning has expressed the wish that the project sheets should beestablished by the ministries on the basis of their objectives and that the costs should bequantified. It should be noted that there is no national inventory of projects. This type ofdatabase would, however, be very useful in order to provide information on the life ofprojects, notably taking into account the various stages of preparation and execution(projects studied but not yet accepted, projects about to be financed, etc.).

6.44 Expenditures under Title III of the budget are those that were previously retained in thePIP. It is not shown whether the recurrent costs induced by investments are taken intoaccount, as the ministries have no sector strategies.

6.45 The resumption of the preparation of a poverty reduction strategy, which started with theseminar held at the end of November 2007, should be completed during the third quarterof 2008. This document will be prepared under the control of the PRSP SteeringCommittee and the preparatory process will comprise, notably, the development of amedium-term expenditure framework and a system for monitoring results.


PI-12.Multi-year perspective infiscal planning, expenditurepolicy and budgeting

D

(i) Multi-year fiscal forecasts andfunctional allocations

D Côte d’Ivoire does not prepare a global MTEF or sector MTEFs.However, in the framework of the post-crisis re-engagement strategy,the process has been re-launched. Moreover, a national developmentstrategy focused on the MDGs is being finalized.

Since no medium-term budget framework has been established, thescore is D.

(ii) Scope and frequency of debtsustainability analysis

D The Debt Department is trying to carry out studies on debtsustainability, but they have not been validated.


(iii) Existence of costed sectorstrategies

D There is a national medium-term strategy, which integrates certainsectoral strategies. But these strategies have not been detailed into anaction plan nor assessed.

Since no sectoral strategy has been sufficiently quantified for the costassociated with investments and operational expenditures, the score isD.

(iv) Linkages between investmentbudgets and forward expenditureestimates

C It has not been demonstrated that the recurrent costs induced byinvestments are taken into account since the ministries have no sectoralstrategies. The score is, therefore, C.

PREDICTABILITY AND CONTROL IN BUDGET EXECUTION

Transparency of taxpayer obligations and liabilities

6.46 The texts and procedures on all the main categories of taxes feature in the General TaxCode (CGI) and in the Customs Code (CD). These exhaustive texts are clear and limit in

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theory the discretionary powers of the entities of the administration that exercise afunction in that area. The private sector pointed out that some enterprises are subjected toin-depth tax controls every two months, whereas the procedures manual provides that thesame taxpayer should not be subjected to a new control within two months.

6.47 Concerning the Internal Revenue Service (DGI), which collects 90% of tax revenues, anumber of documents were prepared during the past four years to facilitate access oftaxpayers to information: the tax procedures book and the taxpayer’s guide. The mediaare also used to disseminate tax regulations. For example, the television presents aprogram every Monday and the radio presents a program twice a week which cover theentire country. Toll free numbers are also available to the public. The DGI has adepartment that monitors the quality of its services and, which recently conducted out asatisfaction survey. The General Directorate of Customs (DGD) uses its own Internet siteand that of the WAEMU to present its texts to the public. It also organizes informationmeetings for economic operators. In this regard, a seminar was organized in GrandBassam in October 2007. This seminar helped rationalize some tax procedures.

6.48 Within the DGI, the regulation on disputes is clearly defined in the tax code. Theprocedure is contradictory and seems to satisfy taxpayers. The statistics provided showthat a major part of submitted applications had been treated and that 12% are referred tothe courts. The DGD has established an observatory in charge of receiving complaintsfrom taxpayers. This observatory intervenes as an arbitration court. However, if thisadministration has duly provided the list of cases formulated by economic operators in2006, no information on the statistics concerning the follow-up actions to these requestswas provided to the mission. The lowest score is, therefore, retained for this component.


PI-13. Transparency of thetaxpayer obligations and liabilities

C+

(i) Clarity andcomprehensiveness of taxliabilities

C The texts and procedures on all major categories of taxes are exhaustiveand clear, which limit in theory, the discretionary powers of the entitiesof the administration that exercise a function in that area.

But, contrary to what the regulation stipulates, some enterprises aresubjected to in-depth fiscal controls every 2 months. The score is,therefore, C.

(ii) Taxpayers’ access toinformation on tax and liabilitiesand administrative procedures

A In recent years, the DGI and the DGD have developed a number oftools to facilitate access of taxpayers to information.

Since taxpayers now have easy access to exhaustive, friendly and up-to-date information on tax obligations and administrative procedures, thescore is A.

(iii) Existence and functioning ofa tax appeals mechanism

D A taxpayer’s appeal mechanism provides for transparent administrativeprocedures, but the information on statistics concerning the appeals tothe financial administrations were only provided by the DGI, since noinformation on the follow-up of the appeals was obtained from theDGD. The score of this component is, therefore, D.

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Effectiveness of measures for taxpayer registration and tax assessment

6.49 A system of registration of taxpayers was established in 2005. It is based on a singleidentification number that captures the information on each taxpayer: surname, firstname, address and activity. The census conducted during the establishment of the systemhelped to identify a number of taxpayers in the informal sector. This identificationnumber is managed by the DGI which, however, acknowledges that not all taxpayershave been identified and that some of them are registered under several numbers. Theidentification number is also used by the DGD. However, the conclusions of the seminarheld in June 2007 on the fight against fraud helped to confirm that the “DGD has noadequate information on the account number of taxpayers.” This number is also used bythe SIGFIP system, which helps to make a reconciliation of the credits and debts owed tothe State by the same individual or moral entity.

6.50 Concerning the DGI, the lack of tax declaration leads to the payment of a fine equal tothe amount of the tax itself. Discussions may be initiated. A schedule for payment isproposed. Concerning the DGD, the goods imported serve as guarantee for payment ofduties and can therefore, as a last resort, be auctioned. If it is not declared or notadequately declared, the due duties shall be paid together with the fines according to theCustoms Code. Concerning fines, discussions may be initiated. The duties are guaranteedby a bank guarantee mandatory for the exercise of the function of customs’ clearingagent.

6.51 The DGD establishes an annual program of activities. This very brief document does notpresent objectives based on a ranking and assessment of risks. The DGI presented someelements of programming and execution of the tax control that it actually carries out, butthis activity is not based on a ranking of risks. A continuous program on tax audits andsurveys on fraud, therefore, exists but the audit programs are not based on clear riskassessment criteria.


PI-14. Effectiveness ofmeasures for taxpayerregistration and taxassessment

C+

(i) Control in the taxpayerregistration system

C A system of registration of taxpayers was put in place in 2005. Theidentification number is used by the fiscal administrations as well asin the SIGFIP information system.

The score is C, because the database is not exhaustive and containstaxpayers with several numbers.

(ii) Effectiveness of penaltiesfor non-compliance withregistration and tax declaration

B Concerning the DGI, the lack of tax declaration results in thepayment of a fine equal to the amount of the tax itself. Discussionsmay be initiated. A repayment schedule is proposed.

Concerning the DGI, the goods imported serve as guarantee for thepayment of duties and can therefore, as a last resort, be auctioned. If

26


it is not declared or not appropriately declared, the duties due shall bepaid together with the fines according to the Customs Code.Concerning the penalties, discussions may be initiated. The duties areguaranteed by a bank guarantee mandatory for the exercise of thefunction of customs’ agent.

Hence, the fines for all cases of contravention are sufficiently high tohave a dissuasive effect, but it was not possible to verify whetherthey are administered in a coherent manner. The score is B.

(iii) Planning and monitoringof tax audit programs

C The DGI and DGD have a continuous program of tax audits andsurveys on fraud, but the audit programs are not based on clearcriteria for risk assessment. The score is C.

Effectiveness in collection of tax payments

6.52 The necessary elements for assigning a score to the first component, which would help toassess the collection ratio of tax arrears, are inadequate both for the DGD and the DGI.The lowest score is, therefore, retained for this component.

6.53 The transfer of the DGI and the DGD to the Treasury is done every evening. All theaccounts are then set at zero. The transfer of collected taxes to the account of theTreasury by the tax authorities should, therefore, be considered as very efficient.

6.54 A weekly meeting between the BCEAO, the DGI, the DGD and the Treasury helps toverify the compliance of payments by the revenue administrations to the Treasuryaccount. This work is done in preparation of the treasury committee and conducted by theStatistics Coordination Department of the DGTCP during the technical reconciliationmeetings chaired by the BCEAO. All the bank accounts of the EPNs are centralized andmonitored by the Central Accounting Agency of Deposits (ACCD), which is graduallybeing deployed in the interior of the country in order to make up for the withdrawal ofcertain commercial banks. Concerning the amounts to be recovered, the Treasury carriesout regular reconciliations between its general accounting held on the ASTER softwareand the REC application, which is used for monitoring the collections in subsidiaryaccounting.


PI-15. Effectiveness incollection of tax payments

D+

(i) Collection ratio for grosstax arrears calculated inpercentage of tax arrearsduring the fiscal yearconcerned

D The elements provided by the DGD and the DGI are not sufficient toassess this component. Score is, therefore, D.

(ii) Effectiveness of transferof tax collections to theTreasury by the revenueadministration

A The transfer from the DGI and the DGD to the Treasury Department isdone every evening. All the accounts are then set at zero.

The score is A.

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(iii) Frequency of completeaccounts reconciliationbetween tax assessments,collections, arrears records andreceipts by the Treasury

A The compliance of the payments from the revenue administrations intothe Treasury account is verified each week. Concerning the remainingamounts to be recovered, the Treasury carries out regularreconciliations between its general accounting held on the ASTERsoftware and the REC application (subsidiary accounting ofcollections).

The score is A.

Predictability in the availability of funds for commitment of expenditures

6.55 The Statistics Coordination Department of the DGTCP establishes, on the basis of cashflows of the previous fiscal years, an annual cash plan for the coming budget year. Thiscash plan is updated monthly on the basis of actual inflows and outflows of funds. Thedirectorate of forecasting calculates, on a monthly basis, the revenues and the DGBFassesses future expenditures, both help to inform the preparation of the annual cash plan.The arrears to be cleared are also integrated into the plan. The monthly update is theopportunity to verify the achievement of the revenue objectives assigned to the revenueadministrations in the framework of monitoring the quantitative benchmarks of theeconomic and financial program.

6.56 The MEF, the sole credit manager of expenditures, oversees the rate of consumption ofcredits by the DAAFs, delegated credit managers. The latter are appointed on the basis ofa proposal of the responsible minister after the MEF has given its view. They, therefore,intervene in a dual capacity. The allocations for current expenditures are made availableto the ministries every month. When a particular expenditure, by its nature, has to bemade over a period of time exceeding one month, the DAAFs of the ministries mayrequest for an exception from the DGBF. The investment credits are made available on acase by case basis.

6.57 No corrective budget law was voted during the past three years. The last was before theoutbreak of the crisis. However, many modifications of budget credit lines were madethrough decrees, thus indicating either poor estimation of expenditures or an excessivedetail of budget credits. The review team wanted to have a list of these budgetmodification acts. The list extracted from the SIGFIP system, which was provided, showsthat these modifications are quite numerous. However, the list does not contain all thenecessary information to carry out a review. In fact, a good number of operations are notbalanced. It is, therefore, not possible to determine whether these modifications are creditvirements (modification of budget allocation within the same ministry), or credit transfers(modification between two or several ministries). Moreover, the total amount ofoperations is not indicated. It is, therefore, not possible to verify whether the budgetbalance is changed or not through these modifications. Finally, the purpose of thesemodifications is not indicated. For lack of adequate information, the lowest score isretained for this component.


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PI-16. Predictability in the availabilityof funds for commitment ofexpenditures

D+

(i) Extent to which cash flows areforecast and monitored

A Estimations of cash flows are prepared by the StatisticsCoordination Department of the DGTCP for the subsequentbudget year and updated every month.

Since the cash flow estimates are prepared for the budgetyear and are updated every month on the basis of the actualinflows and outflows of funds, the score is A.

(ii) Reliability and horizon of periodicin-year information to spending agencieson ceilings for expenditure

C Concerning operational expenditures, the credits are madeavailable to the ministries every month. When expenditure,by its nature should be made over a period of time exceedingone month, the DAAFs of the ministries may solicit for anexception from the DGBF. The credits for investmentexpenditures are made available in a piecemeal fashion.

(iii) Frequency and transparency ofadjustments to budget allocations whichare decided above the level ofmanagement of spending agencies

D A list of budget acts modifying the initial estimates wasproduced. But the information provided in this document forassessing this component is inadequate: unbalancedoperations, lack of a total amount, lack of purpose. For thisreason, score is D.

Recording and management of cash balances, debt and guarantees

6.58 The Directorate of Public Debt (DDP) is operational since 1997, when debt managementwas removed from the Amortization Autonomous Fund (Caisse Autonomed’Amortissement). In 2002, the Sygade application was installed, as the RCI wasdesignated as a pilot country for the use of this application. The database concerning thedebt was transferred from the database of the CAA into that of Sygade. This databasecontains the records of all debt movements since 1998. The loans are codified and thegrants are also registered. The operations are entered on a daily basis. The database isupdated in real time of the variations of the exchange rate, thanks to an Internetconnection.

6.59 As for the other financial flows, the management of the debt is subjected to the principleof segregation of duties between credit manager (the Director of Debt) and the accountant(the Debt Accounting Officer). The two actors should, therefore, be in a position toexercise mutual control as a result of this type of organization. But this control is notpossible. Indeed, the debt accounting officer is certainly informed of the movements onthe debt, in terms of mobilization and reimbursement, but it has no database that wouldallow him to assess the debt stock. He verifies and accounts for the files on the debtflows, but has not access to agreements or amortization schedules.

6.60 The DDP prepares a quarterly report on the debt situation. All debt flows are subjected toaccounting transactions and the balance presents the stock situation (ASTER application).The stock and flows of the debt are monitored in the SYGADE application (DDP). TheSIGFIP application only allows the monitoring of the flows. The reconciliations betweenthese different sources of information only show differences due to exchange rate

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variations. The database of the DDP is exhaustive, both for the domestic and externaldebt. All flow operations are presently registered in the SYGADE application. The dataon domestic and external debt are subjected to monthly reconciliations between thedifferent operational sub-divisions of the DDP.

6.61 A central account opened at the BCEAO is managed by the Central Accounting Officerof the Treasury. The flows from all other accounts are aggregated on this central accountthrough regular action taken by the BCEAO. Generally, no account is opened in the nameof the Government in commercial banks.

6.62 Parliament does not fix the annual ceiling of indebtedness in order to allow theGovernment to deal with emergency situations. The procedure for public indebtednessstarts by establishing a draft agreement at the level of the MEF. The DDP carries out afinancial and legal analysis of the dossier. It then makes suggestions on the conditions ofthe loan. The sector Minister responsible for the expenditures for which funding issolicited is then authorized to initiate the technical discussions with the financial partner.At the end of the procedure, it is the Minister of Economy and Finance who signs theloan agreements and, thereby, commits the State for all agreements.

6.63 The granting of loan guarantees and approvals is codified by the Decree No. 83-501 ofJune 2, 1983, which stipulates, notably in its Article 25, that the decision solely belongsto the Minister of Finance.


PI-17 Recording andmanagement of cash balances,debt and guarantees

B

(i) Quality of debt data recordingand reporting

B The debt stock features in an exhaustive manner in the SYGADE(Directorate of Public Debt) and SIGFIP databases and in the publicaccounting system (ASTER). The reconciliations only show differencesdue to exchange rate variations. The Directorate of Public Debtestablishes a quarterly report on the debt situation.

Since the debt accounts officer has no information on the debt stock, thescore is B.

(ii) Extent of consolidation of thegovernment’s cash balances

A A central account opened at the BCEAO is managed by the centralaccounting officer of the Treasury. Flows from all other accounts areaggregated on the central account through regular action taken by theBCEAO.

Generally, no account is opened in the name of the Government incommercial banks.

(iii) Systems for contracting loansand issuance of guarantees

C

After the study by the Directorate of Public Debt, the Minister ofEconomy and Finance signs all loan agreements. The granting of loanguarantees and approvals is also decided by the Minister of Finance.However, since there is no clear ceiling for indebtedness, the score is C.

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Effectiveness of Payroll Controls

6.64 The RCI has no integrated management tool for salaries of civil servants and governmentemployees. There are two separate files: that of the Civil Service Directorate (DFP),which manages all civil servants as well as contractual staff and that of the PayrollDirectorate, which only manages civil servants (government employees and EPN) whohave to be paid. A project to develop a central personnel database (Fichier Unique deRéférence - FUR) called Integrated System for the Management of Civil Servant’sRecords (SIGFAE), which will be used by the Civil Service Directorate, the PayrollDirectorate, the PGT and the CGRAE is being prepared by the Société nationale dedevelopment informatique (SNDI). This is one of the actions contained in the 2007strategic action plan of the MEF.

6.65 Presently, the Payroll Directorate of the DGBF uses the Year 2000 Payroll application.The payroll database is updated on the basis of administrative documents and computerrecords transmitted by the Civil Service Directorate, the DAAFs of ministries, EPNs andinstitutions. Since May 2007, unexpected sectoral controls are carried out in theministries to ensure that all the agents paid are effectively working in the administration.On this basis, the file is updated.

6.66 At the stage of the preparation of the draft budget, the wage bill estimation is donethrough a conference for the programming of staff attended by representatives of thePayroll and Civil Service Directorates. An assessment of future recruitments is conductedbut it is not based on a list of pre-defined budget positions.

6.67 Salary expenditures are incurred on the basis of capped appropriations. The payment ismade according to the expenditures without prior payment order (DSOP) procedure,which are regularized 2 or 3 months later. The procedure of monthly payment of salariesis initiated by the Payroll Directorate, which first of all registers the commitments in theSIGFIP system. The draft monthly payroll is sent to the Civil Service Directorate which,on the basis of global and sectoral statements, carries out some controls. At the paymentstage, the PGT controls the variable elements of the payroll. To do that, he has a directlink with the database of the Payroll Directorate. A major part of the salaries is paid tobank accounts. Some are still paid by cash notes.

6.68 Newly-recruited staff members are not registered in the system before an average periodof more than 3 months from the time of their assumption of duty. This delay in takinginto account the new civil servants, concerning especially teachers, is due to delays in thetransmission of files. The changes in the situation of civil servants are taken into accountfrom the date of transmission of the files to the Payroll Directorate, i.e. with a minimumdelay of 3 months.

6.69 Concerning new recruitments, the orders are submitted to the prior approval of theFinancial Controller before signature by the Minister of Civil Service and Employment.The same applies to changes in the administrative situation of civil servants. Themodalities for approval of acts in connection with recruitments and change of situationare clearly spelt out. These elements are also verified by the Payroll Directorate. All paymovements associated with changes in the administrative and financial situation of civil

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servants and government employees are subjected to systematic control by the PGT,before being accounted for. Particularly, the PGT systematically verifies the pay ordersexceeding CFAF 600,000. Summary statements are prepared to review movements madein the month (registration of new agents, changes in appointment, service or change inmarital status, reclassification after promotion, etc.). When the civil servant goes onretirement, the Payroll Directorate prepares a certificate on suspension of payment, whichenables the service in charge of retirements to pay the pension benefits.

6.70 A staff census was conducted in 2002 with financing from the World Bank. On thisoccasion, only civil servants who physically presented themselves were paid. Thisoperation helped to remove a number of ghost workers from the database. Since then,there has not been any exhaustive control of the payroll statements or staffing position.However, since May 2007, sector control operations on staff are carried out in theministries. The Regional Payroll directorates and the Salary Control Branch of thePayroll Directorate carry out monthly checks on all elements of remunerations. Tocomplete these regular checks, targeted controls are conducted on some elements ofsalaries or fringe benefits, for example transport allowances, special work allowance. Todate, these controls have been carried out in all sectors, except education and health.

6.71 The project on development of a new IT application to be shared by the administrativeand financial management of the pay system should lead to the automatic feeding of payinformation into the SIGFIP application. A group of projects chaired by the Director-General of the Civil Service has been put in place for conducting the SIGFAE project.The new application will be based on a decentralized management of salaries by theDAAFs of ministries. It should be implemented latest in 2008.


PI-18. Effectiveness ofpayroll controls

D+

(i) Degree of integration andreconciliation between personnelrecords and payroll data.

C The updates of the payroll database are done on the basis of computersystems under the control of all the administrations concerned.However, the reconciliation of payroll and personnel records iscarried with a periodicity of more than six months. Unexpectedcontrols are carried out in the ministries to ensure the physicalpresence of the agents.

However, it is not certain that the coherence is regularly ensuredbetween the file of the Payroll Directorate and that of the CivilService Department. That’s why the score is C.

(ii) Timeliness of changes topersonnel records and thepayroll

D Newly-recruited staff members are not registered in the systembefore an average period of more than 3 months from the date of theirassumption of duty. Changes in the situation of civil servants aretaken into account with a minimum delay of 3 months.

(iii) Internal controls ofchanges to personnel recordsand the payroll.

B The visa modalities of recruitments and changes in situation areclearly established. These changes are made under the prior controlof the Financial Controller and the PGT. A list is prepared to recapmovements made in the month, registration of agents, changes inappointments or services.

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(iv) Existence of payroll auditsto identify control weaknessesand/or ghost workers.

C Since the 2002 census, there has not been any exhaustive control ofthe payroll statements or staffing position. However, since May 2007,monthly operations to control staff are launched in the ministries bythe Pay Control Division of the Payroll Directorate. Moreover,selected controls are carried out on certain remuneration elements,for example transport allowances.

Competition, value for money and controls in procurement

6.72 A data collection system has been put in place (Sigmap), managed by the Directorate ofPublic procurement (DMP), and is producing quite reliable annual statistical data formuch of the budget is approved within acceptable deadlines to facilitate taking intoaccount contracts since the beginning of the fiscal year. The data provided show the totalamount of budget lines submitted for procurement, beyond the threshold, by type ofcontract and function of the contracting authorities and in relation to the total volume ofcontracts for the given year (from June 2006 to the date of the review, since the budgetwas approved late). In fact, the choice of procurement methods depends on the ceilings,which are different according to the nature of the contracting authorities (notably, state-owned companies, and especially, the cocoa/coffee fund). Presently, the data collectedfor the second half of 2006 shows that the amount of sole sourcing contracts (CFAF 49.7billion) - without specifying whether they are sole sourcing contracts in a valueexceeding the ceiling - and limited competitive bidding (CFAF 14.8 billion) is higherthan the amount of the open competitive bidding (CFAF 57.6 billion). This shows thatabout 47.5% of contracts were awarded on an open competitive basis. This percentage isbelow 50%, mainly due to the following combined factors: (i) procurement thresholds forcompetitive bidding that are high and not justified for part of the public entities(SODE/CFAF 120 million, Communes CFAF 60 million, ARCC CFAF 500 million, etc.)whereas that of the ministries is CFAF 30 million; (ii) criteria for utilisation of solesourcing still too broad and favouring its use; and (iii) procurement of direct contractsbetween public law entities, which restricts the scope of use of competitive biddingmethods.

6.73 The procurement code provides for the principle that open competition is the preferredmethod of procurement. Several criteria justifying the use of sole sourcing do not appearreally justified: (a) no bids or unacceptable bids; (b) supplies unable to come from morethan one production or storage venue because of their particular nature (terms subject tovery wide interpretation); (c) transportation of public funds; (d) additional procurementbeyond ceilings in the contracts (the cases mentioned show the risks of slippage, notablyin case of poor needs assessment), where the circumstances justifying unforeseentechnical or economic constraints are not justifiable; and (e) cases of major technical orinvestment needs. These cases are not in conformity with the WAEMU Guidelines. It hasmoreover been noted that, since the adoption of the new code, there has been a worryingincrease in the number of sole sourcing (over 30%), cases of regularization of solesourcing signed without resorting to normal procurement procedures; the importance ofspecifying the accounting of sole source contracts in the Sigmap system according to thepresented justification was underlined. Furthermore, the lack of independent audit doesnot facilitate the verification of compliance with procedures for procurement awardedusing less competitive modalities and guaranteeing the control of detected slippages.

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6.74 There is a regulatory and institutional mechanism (commission for settlement of disputes-CRD) to appeal against decisions taken in the area of complaints and resolutions tofacilitate the implementation of the code (a pamphlet on appeals) were adopted todescribing the functioning of the CRD and appeal procedures. However, as themechanism is not yet functional, it cannot ensure effective registration of complaints andtreatment of claims in accordance with the provisions of the code implemented in 2005and, as a result, it is not possible to assess its efficiency. Moreover, the informationprovided by SIGMAP on complaints (number, author, etc.) and the treatment(justification, processing timelines, …etc.) data, have yet to be developed. Furthermore,the existing mechanism for appeals and for the amicable settlement of disputes is notindependent, since the Settlement Commissions that will be instituted and to which casescan be referred only provide recommendations subject to approval by the Minister incharge of Public Procurement (at the same time, the control authority and authority forapproval of appeals).


PI-19. Competition, value formoney and controls inprocurement

C

i) Use of open competition foraward of contracts that exceedthe nationally establishedmonetary threshold for smallpurchases

C The percentage of contracts awarded on the basis of opencompetition procedures is 47.5%. This is mainly the consequence ofseveral combined factors: (i) procurement thresholds forcompetitive bidding that are high and not justified for part of thepublic entities (SODE/CFAF 120 million, Communes/CFAF 60million, ARCC/ CFAF 500 million, etc.) whereas that of theministries is CFAF 30 million; (ii) criteria for utilisation of solesourcing still too broad and favouring its use; and (iii) procurementof direct contracts between public law entities, which restricts thescope of use of competitive bidding methods.

(ii) Justification for use of lesscompetitive procurementmethods

C The procurement code provides for the principle that opencompetition is the preferred method of procurement. Several criteriajustifying the use of sole sourcing do not appear really justified andare not in conformity with WAEMU Guidelines. It has also beennoted that since the adoption of the new code, there has been aworrying rate of increase in sole sourcing. Besides, the lack of anindependent audit does not facilitate the verification of compliancewith procedures for procurement awarded using less competitivemodalities and guaranteeing the control of detected slippages.

(iii) Existence and operation of aprocurement complaintsmechanism

C There is a regulatory and institutional mechanism for appealingagainst decisions rendered in the area of complaints and resolutionsto facilitate the implementation of the code were taken to that end todescribe the appeals procedures. However, this mechanism is notyet functional. Besides, the information provided by SIGMAP oncomplaints and treatment given has yet to be developed. Finally, theexisting appeals mechanism and amicable settlement of disputes isnot independent.

Effectiveness of internal controls for non-salary expenditures

6.75 The a priori control of public expenditures is exercised by the Financial ControlDirectorate, which is placed under the authority of MEF. The attributions and functioningof this Directorate were fixed by a decree adopted in 1995. Its main function consists in

34

controlling commitments of expenditures under the general budget, having been specifiedthat the expenditures of the EPN are controlled by the Budget Control Directorate. Thiscontrol concerns availability of budget funds, the quality and legality of the expenditure(conformity with the texts in force). Concerning salary expenditures, the FinancialControl Directorate carries out controls on the management decisions on staffing:recruitment, promotion, end of career.

6.76 The financial controller also intervenes at a stage of the validation of the expenditurebefore the order to pay phase to verify: (i) that the order concerns a commitment alreadyauthorized by him; (ii) that the invoice has been correctly prepared and that the supportdocuments are attached to the file; and (iii) that the service has been rendered, i.e. theprovision of service or delivery has been effectively made. This control should be madewithin 8 days of service or supply. The financial controllers are supported in this task byverification officers. At the central level, each financial controller is in charge of theexpenditures of several ministries. At the deconcentrated level, each financial controlleris in charge of the expenditures of all ministries that have a local representation.

6.77 The financial control has no market price listing reference (an ongoing project at theDMP should result in the establishment of a reference price database). It does not make aranked control. It does not use the risk assessment method and controls all files presentedto it according to the same rules, irrespective of their amount. The effectiveness of thefinancial control may also be assessed by comparing the budget estimates to outturns. Inthis regard, the CGAF under Article 62 “Purchase of goods and services” reports anexecution rate of 142% in 2004 and 110.1% in 2005, thus reflecting overspending.Hence, the measures for control of expenditure commitment exist but, since they are notbased on an assessment of risks, they lack effectiveness. They do not cover all theexpenditures and are not always respected.

6.78 The normal expenditure procedure is used for a low percentage of expenditures. The useof the simplified expenditure procedure has virtually become the rule because, out of atotal authorized mandates of CFAF 1326 billion, CFAF 1,178 billion followed thisprocedure. The rules (Article 68 of the 1998 Decree) establish a limited list ofexpenditures that can be made according to this procedure, which is characterized by thesimultaneous issue of commitment and the order to pay. A major part of theseexpenditures concerns transfers to the EPN, public enterprises and territorial communities(29% of actual revenues of fiscal year 2006) whose expenditures were controlled not bythe financial controller but the budget controller. Consequently, the control carried out bythe financial controllers is exercised especially at the stage of the validation of theexpenditure. Hence, during fiscal 2006, the financial controllers cleared a total amount ofpayment orders of CFAF 1,344 billion (central level plus local level) while they onlycontrolled CFAF 68 billion of commitments. It would be necessary to review this type ofpractice by limiting the simplified procedure to expenditures of an exceptional oremergency nature, in order to give back to the financial controller, for the majority ofbudget expenditures, his real role as the upstream controller of public expenditure.

6.79 The public accountant (PGT at the central level) also exercises, before taking charge, thecontrol of non-salary expenditures. This control focuses on all support documentsattached to the expenditure file and may result in rejections. It is based, among others, on

35

the evaluation at the time of the order to pay of availability of adequate budget credits.Since this type of control has already been done at the commitment stage by the financialcontroller, the question is whether this new control is relevant. Some rules andprocedures therefore appear excessive.

6.80 The rules concerning the treatment of expenditures are clear but incomplete. In thisregard, Decree 98-716 of December 16, 1998 and its draft application instruction do notdefine deadlines for the different actors of the chain except the 8 days deadline for thefinancial controller at the stage of commitment and order to pay approval. The relianceon payment of expenditures through treasury cash advances is quite frequent andrepresents important amounts. Account 470.1 “Expenditures paid before priorauthorization” shows a balance of CFAF 309 billion on the cash balance as of October31, 2007. These expenditures, even if they are later regularized are not subjected to priorcontrol. Indeed the financial controllers are not informed of their issue, which confirmsthe particularly non transparent nature of this type of practices. Moreover, this procedurepresents the risk of not being able to regularize these expenditures, i.e. of not being ableto charge them to the budget, because of an eventual lack of budget credits. The results ofthe budget execution may, therefore, be distorted.


PI-20. Effectiveness of internalcontrols for non-salaryexpenditures

D+

(i) Effectiveness ofexpenditure commitmentcontrols

C A considerable amount of expenditures is made through thesimplified procedure (89% of payment authorizations approved bythe financial controllers in 2006), which limits considerably the areaof intervention of the financial controller. The control of expendituresmade on the basis of transfers from the State through the EPN andpublic enterprises escape the financial controller, since it is entrustedto the budget controller. The financial control does not carry outranked control. Hence, there is no method for risk assessment. Somebudget accounts register over expenditures.

Hence, measures for controlling commitments of expenditures existbut, since they are not based on risk assessment, they lackeffectiveness. They do not cover all the expenditures and are notalways respected. The score is C.

(ii) Comprehensiveness,relevance and understanding ofother internal control rules/procedures

C The financial control has no market price listing reference.

The public accountant (PGT) exercises, before accounting booking,the control of non-salary expenditures. This control is done, amongothers, on the evaluation at the stage of the order to pay of the respectof the budget ceilings, being noted that this type of control hasalready been done by the financial controller at the stage ofcommitment. Some rules and procedures, therefore, seem excessiveand the score is C.

(iii) Degree of compliancewith rules for processing andrecording transactions

D The regulation does not set deadlines for the different actors for thevarious phases of the expenditure.

The rules guiding expenditure procedures are clear, both for thenormal and the simplified procedure. But the use of the simplifiedprocedure, other than for salary expenditures and debt, is veryimportant and it has become the rule.

The reliance of payment of expenditures on the basis of treasury cash

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advances is still very frequent and represents important amounts.These expenditures, therefore, escape the a priori control and distortthe results of the budget execution. For this reason, the score is D.

Effectiveness of internal audit

6.81 The internal verification is ensured by the General Finance Inspectorate (IGF), whosevocation is to control all the administrative entities using public funds. This entity hasabout twenty inspectors, who consider themselves as inadequately trained, and sometimesresorts to private firms that it supervises. Its audit method is contained in a manual ofprocedures. It is based on the ranking of risks and is in conformity with internationalstandards. But the IGF basically conducts financial audits and only exceptionallyintervenes in the organizational and structural aspects (monitoring of systems) of thecontrolled administrations.

6.82 IGF’s reports are transmitted to the entity audited and to the Minister of Economy andFinance. But they are prepared in a highly irregular manner. The IGF attributes thissituation to the fact that their audits are conducted at the request of the top hierarchy,which does not allow them to respect their program of activities. It also expressed that thetexts do not compel them to systematically transmit their audit reports to the SupremeAudit Institution (Chamber of Accounts).

6.83 The IGF prepares an annual program of activities as well as a strategic action plan. Therealization is generally below the estimations. Concerning the other control structures, theInspectors consider that there is no redundancy between their interventions and those ofthe IGE, an organization with which they do not coordinate their activities. The follow upof conclusions and recommendations of the internal audit is not ensured. This lack offollow up constitutes one of the major concerns of IGF, which indicated that the follow-up of its recommendations are left to the discretion of the top hierarchy.

6.84 The IGF became interested in the monitoring/evaluation system only a few months ago.According to its representatives, its activities are now oriented in this sense.Consequently, it will be necessary to enhance the skills of this entity to enable it toaccomplish its mission.


PI-21. Effectiveness ofinternal audit

D+

(i) Coverage and quality of theinternal audit function

D The internal verification is ensured by the General FinanceInspectorate (IGF). Its method of audit is based on the ranking ofrisks and it is in conformity with international standards. But the IGFbasically conducts financial audits and only exceptionally interveneson the structural aspects (monitoring of the systems) of the controlledadministrations.

(ii) Frequency and distribution C The reports of the IGF are transmitted to the entity audited and to theMEF. It is difficult for them to establish a plan of their audits, which

37


of reports are decided on case by case basis by their hierarchy. Besides, the textdoes not oblige them to systematically transmit their audit reports tothe Supreme Audit Institution (Chamber of Accounts).

(iii) Extent of managementresponse to internal auditfindings

D The follow-up of the conclusions and recommendations of theinternal audits is not ensured. This lack of follow-up constitutes oneof the major concerns of the IGF, which indicates that the follow-upof its recommendations are left to the discretion of the hierarchy.

ACCOUNTING, RECORDING AND REPORTING

Timeliness and regularity of accounts reconciliation

6.85 The public accountants establish each day their banking situation on the basis of checksreceived and checks issued. The reconciliation between their accounting entries and bankstatements is conducted at the time of the daily, fortnightly and monthly closing ofaccounts.

6.86 Some suspense and advance accounts present very important balances, whose amountincreases from year to year. This is notably the case of account 472, which presented abalance of CFAF 335 billion as of October 31st, 2007. This means that the reconciliationand adjustment of these accounts are not done within the 2 months deadline after the endof the fiscal year.


PI-22. Timeliness andregularity of accountsreconciliation

C+

(i) Regularity of bankreconciliations

A The public accountants establish each day their bank situation on thebasis of checks received and checks issued. The reconciliationbetween their account entries and bank statements is conducted at thetime of the daily, fortnightly and monthly settlement of accounts.

(ii) Regularity of reconciliationand clearance of suspenseaccounts and advances

D Some suspense and advance accounts (notably the sub-divisions ofaccount 472) present very important balances whose amountincreases from year to year. This means that the reconciliation andadjustment of these accounts are not done within the 2 monthsdeadline after the end of the fiscal year.

Availability of information on resources received by service delivery units

6.87 The administrative entities whose manager operates as credit manager are informed, bysimple consultation of the annual budget, of the amount of credits granted to them. Thisis the case, for example, of secondary schools or health centres. For the others, the creditsare managed by the head of the deconcentrated service to which they are attached. Whenthe credit administrators are not connected to the SIGFIP system, the credits are grantedto them in the form of credit delegation. The Ministries of Infrastructure, Health andEducation conduct a management control, which is materialized by field surveys. But thelow level of their resources does not allow them to conduct more than three or four

38

missions each year. The high number of administrative units (for example, about 1,400health centres) makes it impossible to conduct a systematic countrywide control.

6.88 Although no real public expenditure tracking surveys were conducted during the pastthree years, the ministries that the mission met (Education, which prepares a quarterlyreport through the regional office, Health and Infrastructure) carry out some controls onthe effectiveness of the expenditures. These actions are sometimes completed by theinterventions of the Public Expenditure Review Unit (CRDP), which was established in2002. This unit is placed under the authority of the DGBF and is in charge of conductingevery evaluation on the execution of public expenditures. Its reports are sent to theDirector-General of Budget and Finance. It carried out in 2006 an audit of grants andschooling fees granted to private educational institutions, notably in order to verify theeffectiveness of the services.


PI-23. Availability ofinformation on resourcesreceived by service deliveryunits

D▲ The administrative entities are well informed of the amount of creditsgranted to them. But the low level of financial resources of theministries and the very high number of administrative units allowthem to carry out only a few field surveys on the effectiveness of theexpenditure.

Quality and timeliness of in-year budget reports

6.89 Reports on budget execution may be prepared upon request by generating them from theSIGFIP system which allows the preparation of reports both aggregated and detailed.These documents present the amount of: (i) budget estimates; (ii) commitments issued;(iii) commitments approved by the financial controllers; and (iv) payment ordersregistered in the accounting books of the Treasury. However, the amount of payments isnot indicated.

6.90 Analytical reports on budget execution are prepared during the year with the objective ofmonitoring the policies decided in the framework of WAEMU, in order to follow up onthe convergence criteria. The DGTCP publishes a monthly balance of accounts within the10 days following the end of the month, from the ASTER system. Concerning theadministrative accounts, although the SIGFIP system allows it, the publication is notsystematic, but upon request. A monthly TOFE is prepared as part of the monitoring ofthe crisis recovery program.

6.91 The information from the DGBF (SIGFIP system), notably payment orders, is transferredto the Treasury (ASTER system) in digital form. But the procedure is not completelyelectronic. The reconciliation of registrations made in the two systems is only done at theend of the fiscal year. This work generally takes only one or two days. A committee wasput in place recently to ensure this reconciliation on quarterly basis. The reliability ofdata can, therefore, not be totally ensured during the fiscal year. Hence, the reconciliationbetween amounts of expenditures reported in the 2006 CGAF and amounts reported inthe execution reports drawn from the SIGFIP show relatively significant differences(about 10%).

39

6.92 According to the representatives of the DGBF, efforts have been made since September2007 to ensure that the in-year reports on the budget execution are published and madeavailable on a monthly basis. A bilateral committee comprising representatives from theDGBF and the DGTCP has been established, with the objective of monitoring progress inthe budget execution. To enable it to accomplish its task, a monthly execution report mustbe prepared showing the amount of expenditures according to the different types ofclassifications. This report will be presented to the Cabinet.


PI-24. Quality and timeliness ofin-year budget reports

D+

(i) Scope of reports in terms ofcoverage and compatibility withbudget estimates

D The SIGFIP system allows the publication of both aggregated anddetailed budget execution reports and reports may also be publishedon request. However, these reports do not contain the information onpayments of expenditures.

Analytical reports on budget execution are prepared during the fiscalyear with the objective of monitoring the policies decided in theframework of WAEMU, in order to follow up the convergencecriteria.

(ii) Timeliness of the issue ofreports

D▲ The monthly balance sheets are produced regularly within the 10days following the end of the month. However, although the SIGFIPsystem facilitates it, the publication of budget execution reports is notsystematic, but upon request. A monthly TOFE is prepared.

Since the quarterly reports are not prepared, the score is D. However,an arrow is attached to the score in order to formalize the intention ofthe DGBF to proceed, in the near future, to the monthly publicationof the budget execution statement.

(iii) Quality of information C The information from the DGBF (SIGFIP system) is transferred tothe Treasury (ASTER system) in digital form. But, the procedure isnot fully electronic. The reconciliation of the registrations made inthese two systems is done at the end of the fiscal year. The amount ofexpenditures appearing in the 2006 CGAF is different from that ofthe budget execution reports produced by SIGFIP.

Since there are concerns about the accuracy of the data, the score isC.

Quality and timeliness of annual financial statements

6.93 The budget execution review law, which is produced with much delay, is a very briefdocument which contains no analysis on the budget execution data. However, the GeneralAccounts of the Financial Administration (CGAF) is a highly complete document. Itcontains: (i) the detailed balance of accounts of the State; (ii) the breakdown of budgetexpenditures by title, ministry and economic nature; (iii) the breakdown of budgetrevenues; (iv) the development of result accounts; as well as (v) the financial documents.

6.94 The CGAF is prepared each year on a regular basis. That of 2006 exists in a draft version.However, the budget execution review law is voted with much delay. The most recentone is that of 2001. The 2002 draft budget execution review law has been examined bythe Chamber of Accounts and presented to Parliament. The draft budget execution review

40

law of 2003 is being examined by the Chamber of Accounts. The delay of submission forexternal scrutiny is, therefore, above 15 months following the end of the fiscal year.

6.95 The accounting system is based on the accounting standards contained in the WAEMUguideline regarding the government accounting plan, which is based on the SYSCOAsystem. The statements are presented in a format that is based on these norms since theestablishment of this new system in 2002. However, the analysis of the balances at theend of the 2004, 2005 and 2006 fiscal years has allowed observing that some suspenseaccounts present unusual balances and that others are not systematically paid off. Theexistence of unusual balances is also pointed out in a report of the mission on control ofthe 2007 balances carried out by the DGTCP services from 17 to 30 September 2007.This shows that if the accounting standards really exist, they are not fully respected.


PI-25. Quality and timeliness ofannual financial statements

(i) Completeness of the financialstatements

A The budget execution review law is a very brief document.However, the General Accounts of the Financial Administration(CGAF) is a very complete document.

(ii) Timeliness of submission ofthe financial statements

D The CGAF is prepared each year but the budget execution reviewlaw is voted with much delay. The most recent one is that of 2001.The 2002 draft budget execution review law has been examined bythe Chamber of Accounts and submitted to Parliament. That offiscal 2003 is being examined by the Chamber of Accounts. Thedelay in submission for external scrutiny, therefore, exceeds 15months following the end of the fiscal year.

(iii) Accounting standards used C The accounting system is based on the accounting standardscontained in the WAEMU directive on the government accountingplan, which is based on the SYSCOA system. However, the analysisof the balances of the 2004, 2005 and 2006 fiscal years made itpossible to observe that some suspense accounts present unusualbalances while others are not systematically paid off. This showsthat if the accounting standards really exist, they are not totallyrespected.

EXTERNAL SCRUTINY AND AUDIT

Scope, nature and follow-up of external audit

6.96 The Chamber of Accounts, a Supreme Audit Institution was created in 1961. The 2000Constitution upgraded it to an Auditor General’s Office but because of the crisis, theoperation could not be concretized and the organization remained a Chamber of Accountssubordinated to the Supreme Court. It has a triple mission:

jurisdictional, by judging the accounts of public accountants, according to a written andcontradictory procedure. However, the management accounts of the State have not beenjudged since 1978. Those of National Public Agencies (EPNs) have never been judgedand those of territorial communities were only partially judged (about one hundred foreach of the 2002 and 2003 fiscal years). According to the declarations of an official of

41

this organization, the management accounts of the State have not been produced since1978. However, the DGTCP affirms that this production has been formalized, but that,since the Chamber of Accounts has not enough place to stock the huge volumes ofsupport documents, the latter have been kept in the offices of the MEF.

management control, by conducting audits: the Chamber conducted three EPN auditsduring the year 2006, including a control of the operations of the Caisse Nationale dePrévoyance Sociale (CNPS). Hence, the audits carried out by the Chamber of Accountsin fiscal 2006 largely concern less than 50% of the total expenditures.

analysis of the draft budget execution review law. This analysis is conducted with muchdelay since the project presently being examined is that of 2003, having been specifiedthat the document was sent by the DGBF only in July 2006. A report on the execution ofthe budget law was presented at the same time as the examination of the draft budgetexecution review law. The most recent exercise was that of 2002. After reconciling theadministrative accounts of the credit manager and the balance of the Treasury, theChamber issues a certificate of conformity of the entries of the DGBF and those of theTreasury.

6.97 The Chamber of Accounts prepares an annual activity report, which is published in theGazette. It also prepares a bi-annual report on the entities audited, which contains notablythe status of follow-up of the recommendations made, a follow-up which is generallydifficult to ensure. This document is intended for the President of the Republic as well asfor the National Assembly. However, the Chairman of the Economic and FinancialAffairs Commission of the National Assembly declared that he never received it. The lastreport on the budget execution dates back to fiscal year 2002. It was developed andproduced in April 2004. Hence, with a delay of well over 12 months after the end of theperiod under review.


PI-26 Scope, nature andfollow-up of external audit

D

(i) Scope/nature of audit

performed

D The Chamber of Accounts has not judged the management accountsof the State since 1978. Those of National Public Agencies (EPNs)have never been judged and those of the territorial communities wereonly partially judged. It carries out, on average, 3 audits per year.Hence, the audits carried out by the Chamber of Accounts duringfiscal 2006 largely concern less than 50% of total expenditures. Theexamination of the draft budget execution review law is conductedwith much delay. The project currently being examined is that of2003.

(ii) Timeliness of submissionof audit reports to legislature

D The Chamber of Accounts prepares a bi-annual report on the entitiesaudited. This document is intended for the President of the Republicas well as the National Assembly. However, the Chairman of theEconomic and Financial Affairs Commission of the NationalAssembly declared that he never received it.

The last report on the budget execution dates back to fiscal 2002. Itwas developed and produced in April 2004, thus with a delay wellover 12 months after the end of the period under review.

(iii) Evidence of follow-up onaudit recommendations

D According to the information collected, the recommendationsformulated by the auditors are not followed-up, neither by the

42


Chamber of Accounts itself nor by the National Assembly.

Legislative scrutiny of the annual budget law

6.98 The parliamentary control could not be exercised because of the crisis. During thepreparation of the 2005 Budget Law, the Economic and Financial Affairs Commission ofthe National Assembly carried out the examination of: (i) the budget policies; (ii) themajor aggregates; as well as (iii) details of expenditures and revenues. However, sincethe draft budget is prepared on the basis of an annual framework, the Commission couldexamine neither the medium-term financial framework nor the medium-term priorities,which were not yet defined.

6.99 The procedure for examining the draft budget law by Parliament features in the NationalAssembly’s Standing Orders. The Commission organizes sessions for questions posed tothe MEF and its collaborators. Non-member MPs of the Commission may participate inthese sessions, but they have no voting rights. The Commission carries out controls onthe allocation of resources (bearing in mind the concerns of the populations), the sourcesof funding of expenditures, and the fiscal provisions (new taxes, exonerations, etc.). Italso examines the budget policy elements presented by the MEF in support of the fiscalannexes. Discussions often take place on the level of the external and domestic debt.Amendments may be proposed in writing, but they cannot result in an increase inexpenditures, unless they contain proposals on corresponding new revenues. Thepresentation made by the Chairman of the Commission and his main collaborators helpedthe review to consider that the procedures were well respected during the examination ofthe 2005 draft Budget Law.

6.100 Since the beginning of the crisis, except for fiscal years 2006 and fiscal 2007 duringwhich the Government intervened through ordinances, the Draft Budget Law waspresented to the National Assembly with a delay of three or four months, which gave theMPs only one month to examine it. The budget has never been voted before the month ofMay of the fiscal year concerned.

6.101 The rules governing the amendments made to the budget during the fiscal year, withoutprior approval by Parliament, are clearly set by the organic law on the 1959 Budget Act.However, these amendments do not appear in the budget execution review laws of 2000and 2001, or in the 2006 General Accounts of the Financial Administration. Besides, theexistence of over-expenditures in the 2006 CGAF shows that even if they are notformalized, many budget and credit transfers are made.


PI-27 Legislative scrutiny ofthe annual budget law

D+

(i) Scope of the legislature’sscrutiny

D Parliamentary control was not possible because of the crisis.

The reference period for this component concerns the last budgetexecuted. Since the budget for fiscal 2006 was approved byOrdinance and the National Assembly did not examine the DraftBudget Law, the score is D.

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(ii) Extent to which thelegislature’s procedures arewell-established and respected

D The reference period for this component concerns the last budget yearexecuted. Since the budget for fiscal 2006 was adopted by Ordinanceand, therefore, the National Assembly did not examine the DraftBudget Law, the score is D.

(iii) Adequacy of time for thelegislature to provide aresponse to budget proposalsboth the detailed estimatesand, where applicable, forproposals on macro-fiscalaggregates earlier in the budgetpreparation cycle (timeallowed in practice for allstages combined)

D Since the beginning of the crisis, except for fiscal 2006 and fiscal2007, during which the Government intervened with ordinances, thedraft Budget Law was submitted to the National Assembly with adelay of three or four months, which gave the MPs only one month toexamine it.

Since the budget for fiscal 2006 was adopted by Ordinance and,therefore, the National Assembly did not examine the Draft BudgetLaw, the score is D.

(iv) Rules for in-yearamendments to the budgetwithout ex-ante approval bythe legislature

C These rules are clearly set by the organic law on the 1959 FinanceAct. However, these amendments do not appear neither in the budgetreview acts of 2000 and 2001 nor in the General Accounts of theFinance Administration of 2006. Besides, the existence of over-expenditures in the 2006 CGAF shows that even if they are notformalized, many budget or credit transfers are made.

Since the rules on amendment of credits are not always respected,score is C.

Legislative scrutiny of external audit reports

6.102 During the past three years, the National Assembly received no external audit report fromother external control organizations or institutions except the bi-annual report of theChamber of Accounts, which is sent to the President but which is not communicated tomembers of the Economic and Financial Affairs Commission. The examination of thedraft budget execution review laws is conducted with much delay. The most recentbudget execution review law voted is that of fiscal 2001. The Chamber of Accountstransmitted in October 2006 to the National Assembly, the 2002 draft budget executionreview law.

6.103 During the past three years, no hearing was organized by the Economic and FinancialAffairs Commission of the National Assembly.

6.104 During the past three years, the National Assembly made no recommendation onmeasures associated with the findings identified in the reports from the external controlinstitutions.


PI-28 Legislative scrutiny ofexternal audit reports D

(i) Timeliness of examination ofaudit reports by the legislature (forreports received within the last threeyears)

D The National Assembly received, during the past three years, noexternal audit report from other external control organizations orinstitutions. The examination of the draft budget executionreview law was conducted with much delay. The most recentdraft budget execution review law voted is that of fiscal 2001.The Chamber of Accounts transmitted in October 2006, to theNational Assembly, the 2002 draft budget execution review law.

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(ii) Extent of hearings on keyfindings undertaken by thelegislature

D The Economic and Financial Affairs Commission has the rightto establish commissions of enquiry. But it never used it. Duringthe past three years, no hearing was organized by Parliament onthe main conclusions of the external audit reports.

(iii) Issuance of recommendedactions by the legislature andimplementation by the executive

D During the past three years, the National Assembly made norecommendation on measures in connection with the findingsidentified in the reports from the external control institutions.

DONOR PRACTICES

Predictability of Direct Budget Support

6.105 Since the Republic of Côte d’Ivoire was not eligible for direct budget support during thepast three fiscal years, this type of intervention was neither envisaged nor realized. It is,therefore, suggested not to assign any score to this indicator.


D-1 Predictability of Direct BudgetSupport

NS Since the Republic of Côte d’Ivoire was not eligible for directbudget support during the past three years, this type ofintervention was neither envisaged nor realized. Hence, thisindicator cannot be scored.

(i) Annual deviation of actual budgetsupport from the forecast provided bythe donor agencies at least six weeksprior to the government submitting itsbudget proposals to the legislature

NS

(ii) In-year timeliness of donordisbursements

NS

Financial information provided by donors for budgeting and reporting

6.106 The documents provided contain the amount of program aid and project aid mobilized in2006 (67.6%), but it is not specified in which period of the budget calendar they areprovided. Because of this lack of information, the lowest score is retained.

6.107 The total information on aid disbursements was provided to the country within a periodof one month from the end of the quarter of the last year. These data are obtained fromthe Public Debt Directorate and from COMFESIP.


D-2 Financial informationprovided by donors forbudgeting and reporting

D+

(i) Completeness and timeliness ofbudget estimates by donors forproject support

D The documents provided contain the amount of program aid andproject aid mobilized in 2006 (67.6%), but it is not specified inwhich period of the budget calendar they were provided.

Because of lack of information, score is D.

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(ii) Frequency and coverage ofreporting by donors on actualdonor flows for project support

A The total information on disbursements of aid was provided to thecountry within one month from the end of the quarter of the lastyear. These data are obtained from the Public Debt Directorate andfrom COMFESIP.

Proportion of aid that is managed by use of national procedures

6.108 The period of crisis that the RCI faced recently made it impossible to develop the use ofnational procedures in the implementation of external aid. In 2006, 32% of the amount ofloans and project grants were managed according to the national public procurementprocedures. The payments made according to the national payment and accountingprocedures represented 1.62% of total aid.


D-3 Proportion of aid that ismanaged by use of nationalprocedures

D In 2006, 32% of the amount of loans and project grants weremanaged according to the national public procurement procedures.The payments made according to the national payment andaccounting procedures represented 1.62% of total aid. Score is D.

7. GOVERNMENT REFORM PROCESS

DESCRIPTION OF RECENT AND ON-GOING REFORMS

7.1 The management of public finance has undergone major reforms initiated towards theend of the 1990s. First of all, they concern the implementation of a new budgetnomenclature, which is based on reformed procedures for execution of expenditures andthe SIGFIP application, introduced in 1999 for monitoring budget execution. This reformaccompanied the deconcentration of the Service Autonome Central d’Ordonnancement(SACO) and appointment of DAAFs in the ministries. It was followed by the adoption ofa new public accounting plan, close to SYSCOA, and through the computerization ofoperations of the Treasury and the general public accounting through the establishment ofthe ASTER software package developed in partnership with France and the GeneralDirectorate of Public Accounting. The new public accounting system has beenoperational since 2003.

7.2 As part of the program to support the implementation of the corrective measures in Côted’Ivoire, these reforms were completed from 2002, with the assistance of the EuropeanUnion, through the establishment in October 2002 of the Public Expenditure Review Unitand through the strengthening of the control structures. The entities benefiting from thissupport were the Financial Control Directorate, the Public Procurement Directorate andthe General Inspectorate of Finance. The reform of the public procurement systeminitiated since 1999 resulted in the adoption of the new Public Procurement Code, byDecree No. 2005-110 of February 24, 2005 and applicable since April 2006. Thesereforms were completed by a capacity building program supported by UNDP.

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7.3 All these reforms helped to improve the comprehensiveness and transparency of the dataon the execution of the financial operations of the Government. They were expected tofacilitate the monitoring of the execution of the budget. Indeed, it is now possible toobtain in real time, information on budget execution. The modernization of the operationsof the Treasury helped to establish, since 2003, the General Accounts of the FinanceAdministration, which presents, for a given fiscal year, all the budget expenditures andrevenues of the State and which contains elements concerning the balance sheet andincome statement.

7.4 Beyond these important reforms, at the end of fiscal 2006, the major improvementsconcerned:

Implementation of piloting tools such as TOFE and development of treasury plan;

Formalization of a budget execution timetable;

Deconcentration of the SIGFIP;

Drafting of manuals of procedures for most of the services;

Adoption of the financial system of the territorial communities.

INSTITUTIONAL FACTORS SUPPORTING REFORM PLANNING AND IMPLEMENTATION

7.5 Given the crisis situation facing the RCI, the Government could not benefit like somecountries in the sub-region from reform programs supported by the financial partners.Moreover, the internalization of the WAEMU directives has not been formalized.

7.6 The MEF prepares every year, a plan of action for strengthening the management ofpublic finance. This document focuses on finalizing the reforms initiated towards the endof the 1990s, which instituted a real reform of budget management, and would require thedevelopment of a strategic vision based on clearly-defined objectives and results. The2007 action plan comprises ten objectives aimed notably at: (i) conducting aperformance-based budget policy; (ii) optimizing the management of the public portfolioand treasury; and (iii) safeguarding the economic and financial information system.Besides, the DGCPT develops an annual action plan, which serves as basis for theconsolidation of the major reforms that it conducted in recent years with a view toimproving the functioning and productivity of its services.

Political will of Government and Support for the Reforms

7.7 The RCI is committed to develop a PRSP by September 2008. As part of therevitalization of this process, it is envisaged to implement a MTEF. This programmingframework, which aims at achieving greater effectiveness of public actions, should helpto clarify the inter and intra-sectoral strategic choices through a multiyear budgetaryframework. The finalization of the PRSP and the implementation of the MTEF could bethe starting point of the redefinition of a public finance reform strategy.

Coordination and Implementation of Reforms

7.8 On the basis of the PEFA assessment, a reform strategy could be developed toaccompany the PRSP process. Taking inspiration from the strong points and weaknessesidentified for each of the six basic dimensions of the assessment, it would involve

47

reflecting on the reform objectives and anchor them on a medium and long-term strategicvision of development. The action plans of the ministries and other institutions could bedeveloped in a concerted manner in order to ensure complementarity of the actionsbetween, on the one hand, the central level and the deconcentrated level, and on the other,between the State, the EPNs and the territorial communities.

Involvement of Social Partners

7.9 The Public Finance Strengthening Strategy (SRFP) envisages in its institutionalmechanism, the representation of members of the civil society on the SteeringCommittee. It is important that this representation of the civil society becomes effectiveto enable it to fully play its role and meet good international practices.

Participation of the Technical and Financial Partners (TFPs)

7.10 Beyond the representation of the TFPs on the Steering Committee of the SRFP, it isbasically through the general framework of budget support for implementation of thepoverty reduction strategic framework (CGAB-PRSF) that the partnership to support thereform should be formalized in order to contribute to the identification of the priorities,the coordination of the reforms of the TFPs practices and of their support for publicfinance reforms.

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Annex 11: Summary Table of PEFA Scores

Indicators on the Performance of Public Financial ManagementRatingmethod

Scoresbycomponent OverallScore

A. PFM OUT-TURNS: Credibility of the Budget

PI-1 Aggregate expenditure out-turn compared to original approved budget M1 NS

PI-2 Composition of expenditure out-turn compared to original approved budget M1 NS

PI-3 Aggregate revenue out-turn compared to original approved budget M1 B

PI-4 Stock and monitoring of expenditure payment arrears M1 D B(1)+

B. KEY CROSS-CUTTING ISSUES: Comprehensiveness and Transparency

PI-5 Classification of the budget M1 B

PI-6 Comprehensiveness of information included in budget documentation M1 C

PI-7 Extent of unreported government operations M1 NS NS NS

PI-8 Transparency of inter-governmental fiscal relations M2 D C D D+

PI-9 Oversight of aggregate fiscal risk from other public sector entities M1 C C C

PI-10 Public access to key fiscal information M1 C▲

C. BUDGET CYCLE

C(i) Policy-based budgeting

PI-11 Orderliness and participation in the annual budget process M2 D▲ D D D▲

PI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting M2 D D D C D

C(ii) Predictability and Control in Budget Execution

PI-13 Transparency of taxpayer obligations and liabilities M2 C A D C+

PI-14 Effectiveness of measures for taxpayer registration and tax assessment M2 C B C C+

PI-15 Effectiveness in collection of tax payments M1 D A A D+

PI-16 Predictability in the availability of funds for commitment of expenditures M1 A C D D+

PI-17 Recording and management of cash balances, debt and guarantees M2 B A C B

PI-18 Effectiveness of payroll controls M1 C D B C D+

PI-19 Competition, value for money and controls in procurement M2 C C C C

PI-20 Effectiveness of internal controls for non-salary expenditure M1 C C D D+

PI-21 Effectiveness of internal audit M1 D C D D+

C(iii) Accounting, Recording and Reporting

PI-22 Timeliness and regularity of accounts reconciliation M2 A D C+

PI-23 Availability of information on resources received by service delivery units M1 D▲

PI-24 Quality and timeliness of in-year budget reports M1 D D ▲ C D+

PI-25 Quality and timeliness of annual financial statements M1 A D C D+

C(iv) External Scrutiny and Audit

PI-26 Scope, nature and follow-up of external audit M1 D D D D

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PI-27 Legislative scrutiny of the annual budget law M1 D D D C D+

PI-28 Legislative scrutiny of external audit reports M1 D D D D

D. DONOR PRATICES

D-1 Predictability of Direct Budget Support M1 NS NS NS

D-2Financial information provided by donors for budgeting and reporting on projectand program aid

M1 D A D+

D-3 Proportion of aid that is managed by use of national procedures M1 D

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Annex 12: Summary Justification of Scores assigned to Indicators


A. CREDIBILITY OF THEBUDGET

PI-1. Aggregate expenditureout-turn compared tooriginal approved budget

NS 79 Differences between the budget initially approved and actualexpenditures were:

2004: 0.4%

2005: 1.9%

2006: 6.2%

Considered as such, these figures help to conclude that budget iscredible and propose the A score. However, the evaluation of thisindicator should be qualified, since a considerable amount ofexpenditures to be regularized, i.e. paid and not charged to aspecific budget account, feature in the balance of each of the fiscalyears on accounts 470.1 and some sub-divisions of account 472.

Since the details of operations charged to these suspense accountsis not known, this indicator is not scored.

PI-2. Composition ofexpenditure out-turncompared to originalapproved budget

NS The variations of the actual composition of the budget (accordingto the administrative classification) compared to what wasinitially approved are as follows:

2004: 7.6%

2005: 8%

2006: 0.4%

Considered as such, these figures would allow a C score to thisindicator. However, as in the case of indicator PI-1, given theconsiderable amounts of expenditures charged to accounts 470.1and some sub-divisions of account 472, these values are likely tochange. Therefore, this indicator cannot be scored.

PI-3. Aggregate revenue out-turn compared to originalapproved budget

B Total actual revenues compared to revenues of the budget initiallyapproved were:

2004: 91.9%

2005: 95%

2006: 104.4%

Since the revenues of the past 3 years were only in one year below94%, the score is B.

PI-4. Stock and monitoringof expenditure paymentarrears

D+

(i) Stock of expenditurepayment arrears and any recentchange in the stock

D The regulation applied for the definition of arrears is that of theWAEMU, that is to say any expenditure not paid within a period of90 days from their issue by the credit manager, i.e. from the date oftransmission of the payment order to the public accountant, whether itis payment for goods and services or salaries.

The stock of arrears as at 31 December 2006 amounts to CFAF 1,162billion and represents 100.6% of the total primary expenditures forthe fiscal year. It increased in 2006 in relative value, since the stock

79NS: No Score.

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as at December 31 2005 represented 93.65% of total primaryexpenditures of fiscal year 2005.

Since the stock of arrears exceeds 10% of the total primaryexpenditures, the score is D.

(ii) Availability of data formonitoring the stock ofexpenditure payment arrears

B The arrears are monitored by the DGTCP (Directorate of Public Debtand Statistics Coordination Department). The data concerning thestock of arrears are transmitted monthly to the financial partners. TheDirectorate of Public Debt prepares a quarterly report. Thesedocuments comprise the total of external and domestic arrears,having been specified that the IGF is currently carrying out an auditof the salary arrears.

The score is B since the data on the stock of arrears are regularlymade available but may be incomplete for a small number ofcategories of expenditures identified, notably salaries.

B. COMPREHENSIVENESSAND TRANSPARENCY

PI-5. Classification of theBudget

B The nomenclature classifies the expenditures by nature andaccording to their administrative destination. The classificationby destination comprises a classification by sectors of activitysimilar to the functional classification at the level of the chapter,which is identical to that of WAEMU Guideline No. 4/98 onbudget nomenclature. The budget execution review law adoptedin 2001 presents the execution by nature. The functionalclassification used is a specific classification, but it may be madesimilar to the COFOG by using a bridge table.

Score is B, because the establishment and execution of the budget arebased on an administrative, economic and infra-functionalclassification inspired by at least the ten main functions of COFOG.

PI-6. Comprehensiveness ofinformation included inbudget documentation

CThe assessment is based on a specific list of 9 benchmarks, whichshould be communicated in the budget document for the fiscal year2007 addressed to the Parliament or the National Assembly.

The benchmarks that are met are as follows:i) Macro-economic assumptions;

iv) Debt stock;vii) Presentation in the same format as the initial estimates of theprevious budget;

viii) Summary tables on revenues and expenditures.

The unmet benchmarks are as follows:

ii) Presentation of budget balances;iii) Financing of the deficit;

v) Detailed information on financial assets;

vi) Detailed statement of execution for the previous year presented inthe same format as the draft budget;ix) Analysis of the impact of the fiscal measures.

Overall, 4 out of the 9 information benchmarks are met and the scoreis C.

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PI-7. Extent of unreportedgovernment operations NS

(i) Level of extra-budgetaryexpenditures NS

A number of operations, whose amount has not yet been assessed bythe administration, are not covered in the budget. They are revenuescollected directly by some ministries, in general for services renderedand which are either not paid back to the Treasury or are partiallypaid. Moreover, concerning the comprehensiveness of the budget,it is necessary to budget the quasi-fiscal levies of certain keysectors, such as the petroleum and coffee/cocoa sectors. Similarly,some of the earmarked funds, the list of which is known, but not thecorresponding amounts, are not managed according to the regulation,which stipulate however that they should obey the rules on earmarkedaccounts.

Since the information on amounts collected directly by someministries as well as those concerning funds that should be managedaccording to the regulation established for earmarked accounts arenot known, this component is not scored.

(ii) Income/expenditureinformation on donor-fundedprojects

NS From the point of view of forecasting, the majority of externally-financed expenditures are included in the budget. Theseexpenditures are monitored by COMFESIP which, for the fiscal year2006, only provided information on the level of these expendituresuntil October 31.

A score cannot be assigned to this component without the productionof the final report of COMFESIP for fiscal year 2006.

PI-8. Transparency of inter-governmental fiscal relations

D+

(i) Transparency and objectivityin the horizontal allocationamong the decentralizedadministrations

D There are four types of transfers from the State to the territorialcommunities: decentralization allocation, general operationsallocation, equipment grant and share of local taxes to which they areentitled. The rules on distribution of these transfers are either notupdated or unclear. Score is D.

(ii) Timeliness of reliableinformation to the decentralizedadministrations on theirallocations

C For the preparation of the 2006 Budget, the circular dated October 17,2005 and the deadline given to the Presidents of General Councilsand Mayors to submit their draft budget was October 29. Theinformation, therefore, arrives too late to allow for major amendmentof the budgets.

(iii) Extent of consolidation offiscal data for the generalgovernment according tosectoral categories

D Although their budget and accounting nomenclature allows it, thebudget information of the territorial communities, which iscentralized and aggregated monthly at the Directorate of ParastatalAccounting of the DGTCP, is not presented according to thefunctional or sectoral categories. Score is D.

PI-9. Oversight of aggregatefiscal risk from other publicsector entities

C

(i) Extent of central governmentmonitoring of autonomouspublic agencies and publicenterprises

C Most of the main autonomous public agencies (EPN) and publicenterprises submit at least every year, budget reports to the centraladministrations. However, since some of them do not comply withthis directive, it is not possible to present a consolidated situation.The score is C.

(ii) Extent of central government C The net budget situation of the territorial communities is controlled at

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monitoring of the decentralizedadministrations fiscal position

least every year, but does not make it possible to present aconsolidated situation. The score is C.

PI-10. Public access to keyfiscal information

C▲ This indicator is based on a list of six elements of information aboutbudget operations, to which the public should have access.

The criteria that are met are as follows:

v) The award of contracts estimated at over $100,000;

vi) The information on resources made available to the administrativeunits.

The criteria that are not met are as follows:

i) The budget document at the time of their presentation inParliament;

ii) The in-year reports on the execution of the budget;

iii) The year-end financial statements;

iv) The external audit reports.

The score is C, since the administration makes available to the publictwo of the elements mentioned in the PEFA performance framework.An arrow has been added to the score to indicate that the process isimproving, notably with the establishment of Internet sites for themain financial administrations.

PI-11. Orderliness andparticipation in the annualbudget process

D▲

(i) Existence of, and adherenceto, a fixed budget calendar

D▲ The reference period for this component concerns the last budgetadopted (2007). Since the information on the timetable for thepreparation of the 2007 Budget is inadequate to determine the numberof weeks between reception of the budget circular and budgetsubmissions by the ministries, the score is D.

The time-table for the preparation of the 2008 Budget has beendefined. It establishes the main stages and their deadlines up to thepromulgation of the draft budget law. This progress justifies anarrow.

(ii) Guidance on the preparationof budget submissions

D Concerning fiscal 2007, it could not be demonstrated that a circularhad formally been issued for the preparation of the budget. TheMEF’s circular of July 16, 2007 sets the timetable for the preparationof the 2008 Budget.


(iii) Timely budget approval bythe legislature

D The reference period for this component concerns the last threebudget years. During the past 2 years (2006 and 2007), the budgetwas adopted by Ordinance with more than 5 months delay. The scoreis, therefore, D.

PI-12. Multi-year perspectivein fiscal planning, expenditurepolicy and budgeting

D

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(i) Multi-year fiscal forecastsand functional allocations

D Côte d’Ivoire does not prepare a global MTEF or sector MTEFs.However, in the framework of the post-crisis re-engagement strategy,the process has been re-launched. Moreover, a national developmentstrategy focused on the MDGs is being finalized.

Since no medium-term budget framework has been established, thescore is D.

(ii) Scope and frequency of debtsustainability analysis

D The Debt Department is trying to carry out studies on debtsustainability, but they have not been validated.


(iii) Existence of costed sectorstrategies

D There is a national medium-term strategy, which integrates certainsectoral strategies. But these strategies have not been detailed into anaction plan nor assessed.

Since no sectoral strategy has been sufficiently quantified for the costassociated with investments and operational expenditures, the score isD.

(iv) Linkages between investmentbudgets and forward expenditureestimates

C It has not been demonstrated that the recurrent costs induced byinvestments are taken into account since the ministries have nosectoral strategies. The score is, therefore, C.

PI-13. Transparency oftaxpayer obligations andliabilities

C+

(i) Clarity andcomprehensiveness of taxliabilities

C The texts and procedures on all major categories of taxes areexhaustive and clear, which limit in theory, the discretionary powersof the entities of the administration that exercise a function in thatarea.

But, contrary to what the regulation stipulates, some enterprises aresubjected to in-depth fiscal controls every 2 months. The score is,therefore, C.

(ii) Taxpayer access toinformation on tax liabilities andadministrative procedures

A In recent years, the DGI and the DGD have developed a number oftools to facilitate access of taxpayers to information.

Since taxpayers now have easy access to exhaustive, friendly and up-todate information on tax obligations and administrative procedures,the score is A.

(iii) Existence and functioningof a tax appeals mechanism

D A taxpayer’s appeal mechanism provides for transparentadministrative procedures, but the information on statisticsconcerning the appeals to the financial administrations were onlyprovided by the DGI, since no information on the follow-up of theappeals was obtained from the DGD. The score of this component is,therefore, D.

PI-14. Effectiveness ofmeasures for taxpayerregistration and taxassessment

C+

(i) Controls in taxpayerregistration system

C A system of registration of taxpayers was put in place in 2005. Theidentification number is used by the financial administrations as wellas in the SIGFIP information system.

55


The score is C, because the database is not exhaustive and containstaxpayers with several numbers.

(ii) Effectiveness of penaltiesfor non-compliance withregistration and tax declaration

B Concerning the DGI, the lack of tax declaration results in thepayment of a fine equal to the amount of the tax itself. Discussionsmay be initiated. A repayment schedule is proposed.

Concerning the DGI, the goods imported serve as guarantee for thepayment of duties and can therefore, as a last resort, be auctioned. Ifit is not declared or not appropriately declared, the duties due shall bepaid together with the fines according to the Customs Code.Concerning the penalties, discussions may be initiated. The duties areguaranteed by a bank guarantee mandatory for the exercise of thefunction of customs’ agent.

Hence, the fines for all cases of contravention are sufficiently high tohave a dissuasive effect, but it was not possible to verify whether theyare administered in a coherent manner. The score is B.

(iii) Planning and monitoring oftax audit programs

C The DGI and DGD have a continuous program of tax audits andsurveys on fraud, but the audit programs are not based on clearcriteria for risk assessment. The score is C.

PI-15. Effectiveness incollection of tax payments

D+

(i) Collection ratio for gross taxarrears calculated in percentageof tax arrears during the fiscalyear concerned

D The elements provided by the DGD and the DGI are sufficient toassess this component. Score is, therefore, D.

(ii) Effectiveness of transfer oftax collections to the Treasuryby the revenue administration

A The transfer from the DGI and the DGD to the Treasury Departmentis done every evening. All the accounts are then set at zero.

The score is A.

(iii) Frequency of completeaccounts reconciliation betweentax assessments, collections,arrears records and receipts bythe Treasury

A The compliance of the payments from the financial administrationson the account of the Treasury Department is verified each week.Concerning the remaining amounts to be recovered, the Treasurycarries out regular reconciliations between its general accounting heldon the ASTER software and the REC application (subsidiaryaccounting of collections).

The score is A.

PI-16. Predictability in theavailability of funds forcommitment of expenditures

D+

(i) Extent to which cash flowsare forecast and monitored

A Estimations of cash flows are prepared by the Statistics CoordinationDepartment of the DGTCP for the subsequent budget year andupdated every month.

Since the cash flow estimates are prepared for the budget year and areupdated every month on the basis of the actual inflows and outflowsof funds, the score is A.

(ii) Reliability and horizon ofperiodic in-year information tospending agencies on ceilings forexpenditure

C Concerning operational expenditures, the credits are made availableto the ministries every month. When an expenditure, by its natureshould be made over a period of time exceeding one month, theDAAFs of the ministries may solicit for an exception from theDGBF. The credits for investment expenditures are made available ina piecemeal fashion.

(iii) Frequency and D A list of budget acts modifying the initial estimates was produced.

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transparency of adjustments tobudget allocations which aredecided above the level ofmanagement of spendingagencies

But the information provided in this document for assessing thiscomponent is inadequate: unbalanced operations, lack of a totalamount, lack of purpose. For this reason, score is D.

PI-17. Recording andmanagement of cash balances,debt and guarantees

B

(i) Quality of debt datarecording and reporting

B The debt stock features in an exhaustive manner in the SYGADE(Directorate of Public Debt) and SIGFIP databases and in the publicaccounting system (ASTER). The reconciliations only showdifferences due to exchange rate variations. The Directorate of PublicDebt establishes a quarterly report on the debt situation.

Since the debt accounts officer has no information on the debt stock,the score is B.

(ii) Extent of consolidation ofthe government’s cash balances

A A central account opened at the BCEAO is managed by the centralaccounting officer of the Treasury. Flows from all other accounts areaggregated on the central account through regular action taken by theBCEAO.

Generally, no account is opened in the name of the Government incommercial banks.

(iii) Systems for contractingloans and issuance of guarantees

C

After the study by the Directorate of Public Debt, the Minister ofEconomy and Finance signs all loan agreements. The granting of loanguarantees and approvals is also decided by the Minister of Finance.However, since there is no clear ceiling for indebtedness, the score isC.

PI-18. Effectiveness of payrollcontrols

D+

(i) Degree of integration andreconciliation between personnelrecords and payroll data

C The updates of the payroll database are done on the basis of computersystems under the control of all the administrations concerned.However, the reconciliation of payroll and personnel records iscarried with a periodicity of more than six months. Unexpectedcontrols are carried out in the ministries to ensure the physicalpresence of the agents.

However, it is not certain that the coherence is regularly ensuredbetween the file of the Payroll Directorate and that of the CivilService Department. That’s why the score is C.

(ii) Timeliness of changes topersonnel records and the payroll

D Newly-recruited staff members are not registered in the system beforean average period of more than 3 months from the date of theirassumption of duty.Changes in the situation of civil servants are taken into account with aminimum delay of 3 months.

(iii) Internal controls of changesto personnel records and thepayroll

B The visa modalities of recruitments and changes in situation areclearly established. These changes are made under the prior control ofthe Financial Controller and the PGT. A list is prepared to recapmovements made in the month, registration of agents, changes inappointments or services.

(iv) Existence of payroll audits toidentify control weaknesses and/orghost workers

C Since the 2002 census, there has not been any exhaustive control ofthe payroll statements or staffing position. However, since May 2007,monthly operations to control staff are launched in the ministries bythe Pay Control Division of the Payroll Directorate. Moreover,selected controls are carried out on certain remuneration elements, for

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example transport allowances.

PI-19. Competition, value formoney and controls inprocurement

C

i) Use of open competition foraward of contracts that exceed thenationally established monetarythreshold for small purchases

C The percentage of contracts awarded on the basis of open competitionprocedures is 47.5%. This is mainly the consequence of severalcombined factors (i) procurement thresholds for competitive biddingthat are high and not justified for part of the public entities(SODE/CFAF 120 million, Communes/CFAF 60 million, ARCC/CFAF 500 million, etc.) whereas that of the ministries is CFAF 30million; (ii) criteria for utilisation of sole sourcing still too broad andfavouring its use; and (iii) procurement of direct contracts betweenpublic law entities, which restricts the scope of use of competitivebidding methods.

(ii) Justification for use of lesscompetitive procurement methods

C The procurement code provides for the principle that opencompetition is the preferred method of procurement. Several criteriajustifying the use of sole sourcing do not appear really justified andare not in conformity with WAEMU Guidelines. It has also beennoted that since the adoption of the new code, there has been aworrying rate of increase in sole sourcing. Besides, the lack of anindependent audit does not facilitate the verification of compliancewith procedures for procurement awarded using less competitivemodalities and guaranteeing the control of detected slippages.

(iii) Existence and operation of aprocurement complaintsmechanism

C There is a regulatory and institutional mechanism for appealingagainst decisions rendered in the area of complaints and resolutions tofacilitate the implementation of the code were taken to that end todescribe the appeals procedures. However, this mechanism is not yetfunctional. Besides, the information provided by SIGMAP oncomplaints and treatment given has yet to be developed. Finally, theexisting appeals mechanism and amicable settlement of disputes isnot independent.

PI-20. Effectiveness of internalcontrols for non-salaryexpenditure

D+

(i) Effectiveness of expenditurecommitment controls

C A considerable amount of expenditures is made through thesimplified procedure (89% of payment authorizations approved by thefinancial controllers in 2006), which limits considerably the area ofintervention of the financial controller. The control of expendituresmade on the basis of transfers from the State through the EPN andpublic enterprises escape the financial controller, since it is entrustedto the budget controller. The financial control does not carry outranked control. Hence, there is no method for risk assessment. Somebudget accounts register over-expenditures.

Hence, measures for controlling commitments of expenditures existbut since they are not based on risk assessment, they lackeffectiveness. They do not cover all the expenditures and are notalways respected. The score is C.

(ii) Comprehensiveness, relevanceand understanding of otherinternal control rules/ procedures

C The financial control has no market price listing reference.

The public accountant (PGT) exercises, before accounting booking,the control of non-salary expenditures. This control is done, amongothers, on the evaluation, at the stage of the order to pay of the respectof the budget ceilings being noted that this type of control has alreadybeen done by the financial controller at the stage of commitment.

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Some rules and procedures, therefore, seem excessive and the score isC.

(iii) Degree of compliance withrules for processing and recordingtransactions

D The regulation does not set deadlines for the different actors for thevarious phases of the expenditure.

The rules guiding expenditure procedures are clear, both for thenormal and the simplified procedure. But the use of the simplifiedprocedure, other than for salary expenditures and debt, is veryimportant and it has become the rule.

The reliance of payment of expenditures on the basis of treasury cashadvances is still very frequent and represents important amounts.These expenditures, therefore, escape the a priori control and distortthe results of the budget execution. For this reason, the score is D.

PI-21. Effectiveness of internalaudit

D+

(i) Coverage and quality of theinternal audit function

D The internal verification is ensured by the General FinanceInspectorate (IGF). Its method of audit is based on the ranking ofrisks and it is in conformity with international standards. But the IGFbasically conducts financial audits and only exceptionally interveneson the structural aspects (monitoring of the systems) of the controlledadministrations.

(ii) ) Frequency and distributionof reports

C The reports of the IGF are transmitted to the entity audited and to theMEF. It is difficult for them to establish a plan of their audits, whichare decided on case by case basis by their hierarchy. Besides, the textdoes not oblige them to systematically transmit their audit reports tothe Supreme Audit Institution (Chamber of Accounts).

(iii) Extent of managementresponse to internal audit findings

D The follow-up of the conclusions and recommendations of theinternal audits is not ensured. This lack of follow-up constitutes oneof the major concerns of the IGF, which indicates that the follow-upof its recommendations are left to the discretion of the hierarchy.

PI-22. Timeliness and regularityof accounts reconciliation

C+

(i) Regularity of bankreconciliations

A The public accountants establish each day their bank situation on thebasis of checks received and checks issued. The reconciliationbetween their account entries and bank statements is conducted at thetime of the daily, fortnightly and monthly settlement of accounts.

(ii) Regularity of reconciliationand clearance of suspenseaccounts and advances

D Some suspense and advance accounts (notably the sub-divisions ofaccount 472) present very important balances whose amountincreases from year to year. This means that the reconciliation andadjustment of these accounts are not done within the 2 monthsdeadline after the end of the fiscal year.

PI-23. Availability ofinformation on resourcesreceived by service deliveryunits

D▲ The administrative entities are well informed of the amount of creditsgranted to them. But the low level of financial resources of theministries and the very high number of administrative units allowthem to carry out only a few field surveys on the effectiveness of theexpenditure.

PI-24. Quality and timeliness ofin-year budget reports

D+

(i) Scope of reports in terms ofcoverage and compatibility with

D The SIGFIP system allows the publication of both aggregated anddetailed budget execution reports and reports may also be publishedon request. However, these reports do not contain the information on

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budget estimates payments of expenditures.

Analytical reports on budget execution are prepared during the fiscalyear with the objective of monitoring the policies decided in theframework of WAEMU in order to follow up the convergencecriteria.

(ii) Timeliness of the issue ofreports

D▲ The monthly balance sheets are produced regularly within the 10 daysfollowing the end of the month. However, although the SIGFIPsystem facilitates it, the publication of budget execution reports is notsystematic, but upon request. A monthly TOFE is prepared.

Since the quarterly reports are not prepared, the score is D. However,an arrow is attached to the score in order to formalize the intention ofthe DGBF to proceed, in the near future, to the monthly publicationof the budget execution statement.

(iii) Quality of the information C The information from the DGBF (SIGFIP system) is transferred tothe Treasury (ASTER system) in digital form. But, the procedure isnot fully electronic. The reconciliation of the registrations made inthese two systems is done at the end of the fiscal year. The amount ofexpenditures appearing in the 2006 CGAF is different from that ofthe budget execution reports produced by SIGFIP.

Since there are concerns about the accuracy of the data, the score isC.

PI-25. Quality and timeliness ofannual financial statements

(i) Completeness of the financialstatements

A The budget execution review law is a very brief document. However,the General Accounts of the Financial Administration (CGAF) is avery complete document.

(ii) Timeliness of submission ofthe financial statements

D The CGAF is prepared each year but the budget execution review lawis voted with much delay. The most recent one is that of 2001. The2002 draft budget execution review law has been examined by theChamber of Accounts and submitted to Parliament. That of fiscal2003 is being examined by the Chamber of Accounts. The delay insubmission for external scrutiny, therefore, exceeds 15 monthsfollowing the end of the fiscal year.

(iii) Accounting standards used C The accounting system is based on the accounting standardscontained in the WAEMU directive on the government accountingplan, which is itself based on the SYSCOA system. However, theanalysis of the balances of the 2004, 2005 and 2006 fiscal years madeit possible to observe that some suspense accounts present unusualbalances while others are not systematically paid off. This shows thatif the accounting standards really exist, they are not totally respected.

PI-26 Scope, nature and follow-up of external audit

D

(i) Scope/nature of audit

performed

D The Chamber of Accounts has not judged the management accountsof the State since 1978. Those of National Public Agencies havenever been judged and those of the territorial communities were onlypartially judged. It carries out, on the average, 3 audits per year.Hence, the verifications carried out by the Chamber of Accountsduring fiscal 2006 largely concern less than 50% of totalexpenditures. The examination of the draft budget execution reviewlaw is conducted with much delay. The project currently beingexamined is that of 2003.

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(ii) Timeliness of submission ofaudit reports to legislature

D The Chamber of Accounts prepares a bi-annual report on the entitiesaudited. This document is intended for the President of the Republicas well as the National Assembly. However, the Chairman of theEconomic and Financial Affairs Commission of the NationalAssembly declared that he never received it.

The last report on the budget execution dates back to fiscal 2002. Itwas developed and produced in April 2004, thus with a delay wellover 12 months after the end of the period under review.

(iii) Evidence of follow-up onaudit recommendations

D According to the information collected, the recommendationsformulated by the auditors are not followed-up, neither by theChamber of Accounts itself nor by the National Assembly.

PI-27 Legislative scrutiny of theannual budget law

D+

(i) Scope of the legislature’sscrutiny

D Parliamentary control was not possible because of the crisis.

The reference period for this component concerns the last budgetexecuted. Since the budget for fiscal 2006 was approved byOrdinance and the National Assembly did not examine the DraftBudget Law, the score is D.

(ii) Extent to which thelegislature’s procedures are well-established and respected.

D The reference period for this component concerns the last budget yearexecuted. Since the budget for fiscal 2006 was adopted by Ordinanceand, therefore, the National Assembly did not examine the DraftBudget Law, the score is D.

(iii) Adequacy of time for thelegislature to provide a responseto budget proposals both thedetailed estimates and, whereapplicable, for proposals onmacro-fiscal aggregates earlier inthe budget preparation cycle (timeallowed in practice for all stagescombined)

D Since the beginning of the crisis, except for fiscal 2006 and fiscal2007, during which the Government intervened with orders, the draftBudget Law was submitted to the National Assembly with a delay ofthree or four months, which gave the MPs only one month to examineit.

Since the budget for fiscal 2006 was adopted by Ordinance and,therefore, the National Assembly did not examine the Draft BudgetLaw, the score is D.

(iv) Rules for in-year amendmentsto the budget without ex-anteapproval by the legislature

C These rules are clearly set by the organic law on the 1959 FinanceAct. However, these amendments do not appear neither in the budgetreview acts of 2000 and 2001 nor in the General Accounts of theFinance Administration of 2006. Besides, the existence of over-expenditures in the 2006 CGAF shows that even if they are notformalized, many budget or credit transfers of credits are made.

Since the rules on amendment of credits are not always respected,score is C.

PI-28 Legislative scrutiny ofexternal audit reports D

(i) Timeliness of examination ofaudit reports by the legislature (forreports received within the lastthree years)

D The National Assembly received, during the past three years, noexternal audit report from other external control organizations orinstitutions. The examination of the draft budget execution reviewlaw was conducted with much delay. The most recent draft budgetexecution review law voted is that of fiscal 2001. The Chamber ofAccounts transmitted in October 2006, to the National Assembly, the2002 draft budget execution review law.

(ii) Extent of hearings on keyfindings undertaken by thelegislature

D The Economic and Financial Affairs Commission has the right toestablish commissions of enquiry. But it never used it. During thepast three years, no hearing was organized by Parliament on the mainconclusions of the external audit reports.

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(iii) Issuance of recommendedactions by the legislature andimplementation by the executive

D During the past three years, the National Assembly made norecommendation on measures in connection with the findingsidentified in the reports from the external control institutions

D-1 Predictability of DirectBudget Support

NS Since the Republic of Côte d’Ivoire was not eligible for direct budgetsupport during the past three years, this type of intervention wasneither envisaged nor realized. Hence, this indicator cannot be scored.

(i) Annual deviation of actualbudget support from the forecastprovided by the donor agencies atleast six weeks prior to thegovernment submitting its budgetproposals to the legislature

NS

(ii) In-year timeliness of donordisbursements

NS

D-2 Financial informationprovided by donors forbudgeting and reporting

D+

(i) Completeness and timeliness ofbudget estimates by donors forproject support

D The documents provided contain the amount of program aid andproject aid mobilized in 2006 (67.6%), but it is not specified in whichperiod of the budget calendar they are provided.Because of lack of information, score is D.

(ii) Frequency and coverage ofreporting by donors on actualdonor flows for project support

A The total information on disbursements of aid was provided to thecountry within one month from the end of the quarter of the last year.These data are obtained from the Public Debt Directorate and fromCOMFESIP.

D-3 Proportion of aid that ismanaged by use of nationalprocedures

D In 2006, 32% of the amount of loans and project grants weremanaged according to the national public procurement procedures.The payments made according to the national payment andaccounting procedures represented 1.62% of total aid. Score is D.

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Annex 13: List of Persons Met

No. Surname and First Name Function Structure Contacts (Tel./Email)

Ministry of Economy and Finance

1 Charles Koffi Diby Ministry of Economy and Finance

2 Koffi Ahoutou Principal Secretary

3 Kouassi Kouman Technical Adviser Office of the MEF Tel.: 20 250 08 41

National Assembly

4 Guéhi Brissi Lucas Secretary General Mobile: 07 05 71 70

5 Declercs Francis Member of the Economicand Financial AffairsCommission

Mobile: 08 08 61 11

6 Koua Bindé Mobile: 07 05 92 62

7 Zéréhoué Edouard Mobile: 08 38 12 77

8 Salé Poli Mobile: 07 71 70 56

9 Coulibaly Roger Mobile: 07 01 09 94

General Public Inspectorate (IGE)

10 Public Inspector

Chamber of Accounts of the Supreme Court

11 Serges François Consultant Chamber of Accounts Tel.: 47 03 43 62

12 Tanoh Yao Séraphin Research Officer Chamber of Accounts Tel.: 20 22 49 55

13 Anoman Paulette Research Officer Chamber of Accounts Tel.: 20 21 21 94

14 Doudou Jonas Auditor Chamber of Accounts Tel.: 20 21 70 27

Mobile: 07 47 25 11

15 Goba Daniel Auditor Chamber of Accounts Tel.: 20 21 70 27

Mobile: 05 67 03 60

16 Adja Vincent Auditor Chamber of Accounts Tel.: 20 21 70 27

Mobile: 07 60 92 82

17 Bouadou E. Julien Adviser Chamber of Accounts Mobile: 07 07 22 80

18 N’Guessan Djaha Adviser Chamber of Accounts Tel.: 20 21 32 09

19 Gueraud Béatrice Adviser Chamber ofAccounts

Chamber of Accounts Tel.: 20 21 98 01

Mobile: 02 02 10 01

General Inspectorate of Finance

Directorate General of Economy

20 Kouassi Oussou Director General of Economy

21 Kacou Nicolas T. Research Officer DGE/Department ofMarket Conditions andEconomic Forecasting

Tel.: 20 21 93 43

Mobile: 05 27 41 59

[email protected]

Directorate General of Budget and Finance

22 Kouassi Kouamé Director General of Budget and Finance

23 Mariame Fofana Director Department of BudgetPolicies and Syntheses

63


24 Diomandé Massanfi Deputy Director Department of BudgetPolicies and Syntheses

Tel.: 20 21 42 78

[email protected]

25 N’Guessan Konan Raphael Deputy Director andAssistant DG

DGBF Tel.: 20 21 57 79

Mobile: 05 74 51 87

[email protected]

26 Konan A. Michel CE Department of BudgetPolicies and Syntheses

Tel.: 20 21 21 84

[email protected]

27 Patrice Ahoussi CE Department of BudgetPolicies and Syntheses

Tel.: 20 21 0769

Mobile: 05 62 09 86

[email protected]

28 Soro Mandjima CE DGBF/DBE Mobile: 02 50 06 46

29 Konan K. Germain CE Department of BudgetPolicies and Syntheses

Tel.: 20 21 03 88

Ext. 2339

Mobile: 05 74 31 31

[email protected]

30 N’Dri Brou CE AdministrationDepartment of SIGFIP

Tel.: 20 21 16 25

Mobile: 05 55 07 19

31 Kouakou Armand Assistant Director AdministrationDepartment of SIGFIP

Tel.: 20 21 78 66

Mobile: 05 79 30 40

[email protected]

32 Tanoh Yao Séraphin Research Officer DGBF Tel.: 20 22 49 55

33 Kouakou N’Diaye Research Officer DGBF

34 Doukouré Lassiné Research Officer DGBF Tel.: 20 21 21 88

Mobile: 01 28 40 78

[email protected]

35 Ebrotié Yomanfo Director Directorate of PublicProcurement

Tel.: 20 21 15 19

36 Coulibaly Yacouba P. Deputy Director forRegulation and Control

Directorate of PublicProcurement

Tel.: 20 21 53 28

[email protected]

37 Kossonou Koko Olivier Head of Studies andAssessment Division


Tel.: 20 305 252

Ext 2246

[email protected]

38 Yapo Assamoi A. Deputy Director forProcedures and Operations


Tel.: 20 305 252

Ext. 2373

Mobile: 08 39 66 60

[email protected]

39 Brou Yao P. Deputy Director forAssistance and Training


Tel.: 20 305 252

Ext. 2387

[email protected]

40 Diabaté Kaladji Research Officer Directorate of PublicProcurement

Tel.: 20 30 52 52 Ext. 2393

Mobile: 02 50 29 91

[email protected]

41 N’Dri Norbert Technical Advisor Directorate of PublicProcurement

Tel.: 20 22 74 71

Mobile: 07 83 32 15

[email protected]

64


42 Brou Yao Paul Deputy Director Directorate of PublicProcurement

Tel.: 20 30 52 52/2348

[email protected]

43 Gnagne Kanne Deputy Director forComputer Systems


Tel.: 20 21 93 43

Mobile: 05 27 41 59

[email protected]

44 Gueye Idrissa Financial Controller Financial ControlDirectorate

Tel: 20 21 42 49

45 Timité Youssouf Financial Controller Financial ControlDirectorate

46 Traoré Tiédé Budget Control Director Budget ControlDirectorate

47 Traoré Seydou Inspector Auditor General Public ExpenditureReview Unit

Directorate General of Treasury and PublicAccounting

48 Konan K. Charles Special Adviser Statistics CoordinationUnit

Tel: 20 25 38 28

20 25 38 12

49 Gbané Abou Director Public AccountsDepartment

Tel.: 20 25 38 41

50 Ali Coulibaly Deputy Director Public AccountsDepartment

Mobile: 07 30 79 29

[email protected]

51 Beugré K. Amos Deputy Director Public AccountsDepartment

Tel.: 20 25 38 41

[email protected]

52 Gnonsiéhoué Michel Trainer Public AccountsDepartment

Tel.: 20 25 38 41

53 Brika Sarapahi Director Public DebtDepartment

Tel.: 20 25 09 80

[email protected]

54 Ziké Celestin Head of Department Public DebtDepartment

Tel.: 20 25 09 58

[email protected]

55 Doh André Deputy Director Treasury Department Tel.: 20 21 50 02

[email protected]

56 Adopo Fiacre Head of Department Treasury Department Tel.: 20 25 67 18

Mobile: 07 69 37 19

[email protected]

57 Salé Poli National Assistant DPTE Mobile: 07 71 70 56

[email protected]

58 Kabran E. François Director of InformationSystems

Computer ServicesDepartment

Tel.: 20 25 67 43

Mobile: 07 02 87 15

[email protected]

59 N’Zi Comoé Antoine Director of InformationSystems

Computer ServicesDepartment

Tel.: 20 25 67 43

[email protected]

60 N/A Director Semi-public AccountsDepartment

61 Koffi N’Guessan Attorney ACCT Mobile: 07 60 15 88

62 Assahore konan Jacques ACDP Tel.: 20 25 09 73

65


[email protected]

63 Touré Kaffouba Public Accountant ACDP Mobile: 08 27 20 46

[email protected]

64 Niepe Paul Hubert M. Research Officer DGTCP

65 Kouassi K. Noël Attorney PGT Mobile: 09543296

66 Coulibaly Issa Head of Department PGT Mobile: 07 673946

67 Aké Nina Conservator Tel.: 20 21 21 99

68 N’Guetta Arsène Inspector Auditor Mobile: 05 71 15 47

69 Anguié Angme IGAF Tel.: 20 330072

Mobile: 05302749

70 Yoro Zahui Apollinaire Deputy Director LegalDepartment

Tel.: 20217094

71 Bouaouli Kouassi Augustin Deputy Director forControl

Pay Department Tel.: 20217586 p.2256

72 Sanogo Bassirima Direction Grand SoldeAbidjan

Tel.: 20 21 36 76

73 Dago Komenan Computer Analyst DDP

74 Ziké Celestin Head of Department DDP

75 Gbessane Bouazo Deputy Director DDP Tel.: 20250960

76 N’Guessan Gnamba Henri Special Advisor DDP Tel.: 20 25 09 57

Central Revenue Department

Customs Department

Other Ministries

77 Niamien Kadjo Ag. Director DGPLAN/DP Tel.: 20 25 88 61

[email protected]

78 Attoh Aristide DAAF MIE Tel.: 20 225759

79 Konan Simlice DAAF MSHP

80 Bamba Charles DAAF MEN Tel.: 20 213396

81 Abiyou Ourag OAF MEN Tel.: 20212216

82 Diaby Lanciné Director for Development MEMPD [email protected]

Other Institutions

PEFA Team

83 Doffonssou Richard Economist World Bank Tel.: 22 400 418

Mobile: 05 41 63 [email protected]

84 Marcelo Andrade Economist World Bank Tel.: 22 400 400

[email protected]

85 Eric Yoboue Principal Procurement World Bank Tel.: 22 400 400

66


Specialist [email protected]

86 Bella Lelouma Diallo Principal FinancialManagement Specialist

World Bank Tel.: 22 400 400

bdiallo@ worldbank.org

87 Bacari Koné Expert Economist IMF [email protected]

88 Serge Nguessan Principal ProcurementOfficer

ADB Tel.: 00216 71103146

[email protected]

89 Racine Kane Chief Economist ADB [email protected]

90 Ba Samba Principal Macro-economist ADB Tel.: 00216 217 577 60

Mobile: 08 58 03 68

[email protected]

91 Zoltàn Agai Economist Delegation, EuropeanCommission

[email protected]

92 Robert Cauneau Consultant in PublicFinance

ADB 332 41 95 29 32 / 336 75 50 58 67

[email protected]

93 Gisèle Suire Consultant in PublicFinance

World Bank 331 45 04 11 89

336 83 12 45 40

[email protected]

94 François Serres Consultant in Procurement ADB Tel.:47 03 43 [email protected]

95 Houédanou-Soro

Assiata

Disbursement Assistant World Bank Tel.: 22 400 430

[email protected]

96 Zainab Mambo-Cissé Operations Assistant World Bank Tel.: 22 400 400

[email protected]

97 Tina Aboah Ndow Operations Assistant World Bank Tel.: 22 400 400

eaboahndow@ worldbank.org

98 Marie-France Anet-Oyourou Procurement Assistant World Bank Tel.: 22 400 477

manetoyourou@ worldbank.org

67

Annex 14: List of Documents Consulted

Indicator Department or Unit

General Documents

Law 60-356 of 3 November 1960 on the Constitution of the Republic of Côte d’Ivoire

Law 2000-513 of 1st August 2000 on the Constitution of Côte d’Ivoire

Organic Law 59-249 of 31 December 1959 on the Finance Act DGBF/DPSB

Law 62-53 of 12 February 1962 organizing public finance management DGBF/DPSB

Decree 50-209 of 21 October 1959 on creation of the Caisse Autonome des Emprunts subscribed bythe Republic of Côte d’Ivoire

DGBF/DPSB

Decree 64-116 of 6 March 1964 on organization of economic control DGBF/DPSB

Order 447-FAEP of 30 May 1960 on organization of the Caisse Autonome d’Amortissement desEmprunts subscribed by the Republic of Côte d’Ivoire

DGBF/DPSB

Decree 64-240 of 16 June 1964 on regulation of the accountability and balance due to publicaccountants

DGBF/DPSB

Decree 69-416 of 16 September 1969 on regulation in the control of contracts and agreements signedon national budgets and supplementary budgets

DGBF/DPSB

Decree 73-436 of 1st September 1973 fixing the rules on constitution of advance systems DGBF/DPSB

Decree 77-209 of 2 April 1977 on additional regulation of payments made on public funds DGBF/DPSB

Articles 6, 7 and 8 of Law 70-214 of 24 March 1970 DGBF/DPSB

Decree 2006-118 of 7 June 2006 on organization of the Deputy Minister attached to the Prime Ministerin charge of Economy and Finance

Statistics CoordinationDepartment of the DGTCP

Decree 98-260 of 3 June 1998 on application of the General Public Accounting Plan DGTCP/DCP

Decree 69-304 of 4 July 1969 fixing guarantees for public accountants DGTCP/DCP

Decree 71-167 of 25 March 1971, fixing guarantees for public accountants DGTCP/DCP

Decree 2005-48 of 3 February 2005 on appointment of General Accountants for the TreasuryDepartment and Government Accounting

DGTCP/DCP

Decree 2002-444 of 16 September 2002 on the attributions, organization and functioning of theInspectorate General (IGE)

IGE

Synthesis of the 2002 recommendations of the seminar on Optimization of Public Expenditures,Yamoussoukro, 23 - 26 August 2006

IGF

Support for training on budget reforms and procedures for execution of public expenditures, 2007edition, containing the budget structure and Decree 98-716 of 16 December 1998 on the reform of thechannels and procedures for execution of the expenditures and revenues of national budget under thespecial accounts of the Treasury and implementation of the integrated public finance managementsystem

DGBF/DPSB

Procedures Guide of Public Treasury services DGTCP

Procedures Manual of the Operations Department of Decentralized Communities DGBF/DOCD

DGBF pamphlet on the budget preparation process DGBF/DPSB

Extract from the Procedures Guide of the DGBF on the structure of public expenditures and supportdocuments

DGBF

Procedures Guide of the DGBF DGBF

Procedures Manual of the Budget Department DGBF/DPSB

Procedures Manual of the Balance Department DGBF/DPSB

Procedures Manual of the Public Expenditure Review Unit DGBF/DPSB

Procedures Manual of the Administration Department of SIGFIP DGBF

Procedures Manual of the Department of Budget Policies and Syntheses DGBF/DPSB

68


2007 Strategic Action Plan Ministry of Economy andFinance/Cabinet

Procedures Manual of the Department of Government Property DGBF

Audit report of the Ivorian accounting system DGTCP/IGT

Statement of Audit Recommendations DGTCP/IGT

Implementation of Audit Requests DGTCP/IGT

2005 Finance 1ct, presentation report and annexes DGBF/DPSB

Order fixing the 2006 Budget, presentation report and annexes DGBF/DPSB

Order fixing the 2007 Budget, presentation report and annexes DGBF/DPSB

PIP 2003-2005

PIP 2004-2006

PIP 2005-2007

PIP 2006-2008

Planning Department /PublicInvestment and ProgrammingDepartment

PI-4: Stock and monitoring of expenditure payment arrears

PI-16: Predictability in the availability of funds for commitment of expenditures

PI-17: Recording and management of cash balances, debt and guarantees

Note on the debt structure Public Debt Department

Responses of the Public Debt Department to PEFA questionnaire on PI-4, PI-12, PI-17 and PI-22indicators

Public Debt Department

Note of the Public Debt Department on the loans mobilization procedure Public Debt Department

Decree 83-501 of 2 June 1983 on regulation of granting conditions and government approvalmanagement modalities


Note of the Public Debt Department on loans mobilization procedure Public Debt Department

Table on the stock of arrears of domestic debt as at 31 December 2006 and 30 September 2007 Public Debt Department

Situation of the stock of arrears of external debt as at 31 December 2006 and 30 September 2007 Public Debt Department

Activity Report as at 30 September 2007 Public Debt Department

Note of 14 November 2007 on the structure of the domestic and external debt Public Debt Department

Table of the Public Debt Department presenting the stock of arrears of domestic debt as at 31December 2006 and 30 September 2007


Table of the Data Analysis and Forecast Directorate presenting domestic arrears as at 30 September2007


Synthesis Note on the Treasury situation from 01 January to 31 October 2007 Statistics CoordinationDepartment of DGTCP

Draft Report of the Treasury Committee dated 11 October 2007 Statistics CoordinationDepartment of DGTCP

Response to the PEFA questionnaire, point PI-4 Statistics CoordinationDepartment of DGTCP

Decree 2006-118 of 7 June 2006 on the organization of the deputy ministry attached to the PrimeMinister in charge of Economy and Finance

Statistics CoordinationDepartment of DGTCP

Note on the definition of arrears and situation of payment arrears at the end of October 2007 Statistics CoordinationDepartment of DGTCP

Order 067 /DGTCP/CE of 21 May 2001 on establishment a Treasury Committee Statistics CoordinationDepartment of DGTCP

Treasury situation from 1st January to 31 October 2007 DGTCP/Statistics Coordination

69


Department

Treasury situation for the month of November 2006 DGTCP/Statistics CoordinationDepartment

Treasury Plan as at 31 December 2005



DGTCP/Statistics CoordinationDepartment

Draft minutes of the technical meeting of the Treasury Committee of 10 October 2003 DGTCP/Statistics CoordinationDepartment

Draft minutes of the technical meeting of the Treasury Committee of 11 October 2007 DGTCP/Statistics CoordinationDepartment

PI-5: Classification of the budget

Synthesis table of the 2006 Budget according to GFS/COFOG 2001 classification DGBF/DPSB

PI-7: Extent of unreported operations of the central administration

Annual report of COMFESIP 2004 and prospects for 2005 DGBF/DPSB

Annual report of COMFESIP as at 30 September 2005 DGBF/DPSB

Annual report of COMFESIP as at 31 October 2006 DGBF/DPSB

PI-8 Transparency of inter-governmental fiscal relations

Law 2003-208 of 7 July 2003 on the transfer and distribution of government competences to theterritorial communities

DGBF/DPSB

Law 2003-489 of 26 December 2003 on the financial, fiscal and national regime of the territorialcommunities

DGBF/DPSB

2007 Draft Budget Annex, general advice, heading 2 and 3 budget envelopes DGBF/DPSB

2007 Draft Budget Common Annex, heading 2 budget envelopes DGBF/DPSB

Note on government taxes whose proceeds are partially attributed to the territorial communities(communes)

Summary statement of management accounts of the territorial communities for the years 2004-2005and 2006

DGTCP/Semi-public DC

2004 Management Account of Agboville commune DGTCP/ Semi-public DC

2005 Management Account of Dimbokro commune DGTCP/ Semi-public DC

PI-9: Oversight of the overall fiscal risk from other public sector entities

Law 98-388 of 2 July 1998, fixing the general rules on national establishments and on the creation ofcategories of public establishments and repealing Law 80-1070 of 13 September 1980

DGBF/DPSB

List of state-owned companies and public companies DGE/Joint Venture andPrivatization Department

Table presenting the execution of products and overheads of the main state-owned and joint companiesfor the 2005 and 2006 management and estimates for 2006

DGE/ Joint Venture andPrivatization Department

List of audits and studies concerning state-owned enterprises and public funded enterprises DGE/ Joint Venture andPrivatization Department

Summary statement of EPN financial accounts produced by accounting officers for the years 2004-2005 and 2006

DGTCP/ Semi-public DC

2006 Financial Account of the FIDEN (National Enterprise Development Fund) DGTCP/ Semi-public DC

PI-10: Public access to key fiscal information

70


PI-11: Orderliness and participation in the annual budget process

Organic Law 59-249 on the Draft Finance Act DGBF/DPSB

The Prime Minister’s Letter of 20 September 2007 presenting the 2008 Budget DGBF/DPSB

Letter 139/MEF/DGBF/DPSB 02 of 29 August 2007, presenting the 2008 Draft Budget DGBF/DPSB

2008 Budget presentation, table on the trend of tax revenues, draft of the wage bill, Table on the impactof salary demands in 2007 and 2008, Synthesis of staff movements as of 30 September 2007

DGBF/DPSB

Prime Minister’s Letter of 4 November 2005 presenting the 2006 Budget DGBF/DPSB

Prime Minister’s Letter of 4 November 2005 presenting the 2006 Budget DGBF/DPSB

2002 – 2008 Macro-economic Trends, summary table of the main aggregates DGBF/DPSB

Management Note on the economic situation and forecasting on macro-economic trends DGBF/DPSB

Circular Letter 2809/MEFMEF/DGBF/DBE/ABS of 24 November 2005 on the closing of thebudgetary transactions, national public establishments and territorial communities for the 2005management

DGBF/DPSB

Instruction 109/MEF/CAB 01-20 of 16 July 2007 on the process and time-table for preparation of thenational budget for fiscal 2008

DGBF/DPSB

Circular Letter 2809/MDPMEF/DGBF/DAS 9 of 29 November 2006 on the closing of the budgettransactions for the 2006 management

DGBF/DPSB

Order on the 2007 Budget and its annexes DGBF/DPSB

Presentation of the Draft Budget to Cabinet DGBF/DPSB

Order on the 2006 Budget and the economic and financial report DGBF/DPSB

2004 Finance Act, economic and financial report DGBF/DPSB

2005 Finance Act, economic and financial report and presentation report DGBF

Circular Letter 2908/MEMEF/DGBF/DAS 9, on the closing of the budgetary transactions of the Statefor the 2006 management

DGBF

Circular Letter 2809/MEMEF/DGBF/DBE/ABS of 24 November 2005, on the closing of the budgetarytransactions of national public establishments and territorial communities for the 2005 management

DGBF

PI-12: Multi-year perspective in fiscal planning, expenditure policy and budgeting

Note on the process of preparation and approval of the Public Investment Program (PIP) Planning Branch/DPIP

Note on the process of preparation of the Poverty Reduction Strategy Paper (PRSP) Planning Branch /DevelopmentBranch

Note on stages planned for implementation of the MTEF DGBF/National Directorate ofBudget

PI-13: Transparency of taxpayers obligations and liabilities

General Tax Code and Tax Procedures Manual, 2007 edition DGI

The verified Taxpayer’s Charter DGI

Decision 0001/DGI/CGECI of 30 November 2006 on creation of the fiscal control observatory DGI

Memorandum of Understanding between the DGI and the National Ivorian Employers’ Council on thecreation of an exchange and reflection group

DGI

PI-14: Effectiveness of measures for taxpayer registration and tax assessment

2006 Statement of Actions of the Bureau of control of common law customs procedures DGD/Customs InvestigationDepartment

2007 Action Plan DGD/Customs Investigationand Information Department

Activity Report as at 22 November 2007 of the Bureau of control of economic customs procedures DGD/ Customs Investigationand Information Department

71


Results of activities of the 1st quarter of the Bureau of control of common law customs procedures DGD/ Customs InvestigationDepartment

PI-15: Effectiveness in collection of tax payments

Statistics on issues and collections of customs revenues from 2004 to 2006 DGD/DSEE

PI 16: Predictability in the availability of funds for commitment of expenditures

List of movements of funds for 2006 DGBF/DPSB

PI-17: Recording and management of cash balances, debt and guarantees

See PI-4

PI-18: Effectiveness of payroll controls

Organizational and Functional Overview of the Debt Department DGBF/Pay Branch

Report of the Steering Committee on Staff Sector Control of 31 May 2007 DGBF/Pay Branch

Staffing position by category and by ministry from 2002 to 2006 DGBF/Pay Branch

Detailed estimates of the impact (confirmed or potential) pay demands by the different groups of civilservants in 2007

DGBF/ Pay Branch/DPSB

PI-19 Competition, value for money and controls in procurement

The Government Contracts Code, Decree 2005-110 of 24 February 2005 DMP

Government Procurement procedures on the basis of the Decrees of 16 September 1969 and 3 January1980

DMP

Order 250 MEF/DGBF/DMP of 13 August 2002 amending Order 037/MEF/DMP of 13 March 2000 onthe execution of budget funds under the Government Contracts Code

DMP

Statistics on contracts by mode of procurement and by amounts from 2000 to 2006 DMP

Table showing the number of complaints submitted in 2006 (3) and 2007 (5) DMP

Letter 1148/MEMEF/DGBF/DMP/34 of 4 June 2004 defining the modalities of execution of budgetfunds for 2004, as regards government procurement procedures

DMP

Order 1037/MEF/DMP of 26 November 1990 defining the modalities of commitment, approval andpayment of contracts signed with public law moral entities

DMP

Government Contract Sheet no. 954 of 21 October 2007

Government Contract Sheet no. 955 of 1st November 2007

Government Contract Sheet no. 956 of 11 November 2007

DMP

Procedures manual of the Department of Government Contracts DMP

PI-20: Effectiveness of internal audit controls for non-salary expenditures

Extracts of the 2006 activity report of the Financial Controller

PI-21: Effectiveness of internal audit

Decree 95-121 of 22 February 1995 on the attributions, organization and functioning of the financialcontrol

DGBF/DCF

Decree 95-122 of 22 February 1995 determining the conditions of access to the functions of FinancialControllers

DGBF/DCF

Decree 95-123 of 22 February 1995 modifying decree 80-12 of 3 January 1980 on settlement ofaccounts on public expenditure concerning public expenditures on materials at the central level

DGBF/DCF

Order 23 PM of 6 November 1995 on the application of Decrees 95-121, 95-122 and 95-123respectively on attributions, organization and functioning of financial control

DGBF/DCF

2006 Activity Report of the Public Expenditures Review Unit CRDP

72


Statistical extracts from the Annual Report of the Financial Control Director DGBF/DCF

Procedures Manual of the Financial Control Department DGBF/DCF

Auditor’s Guide DGBF/DCF

Financial Controller’s Guide DGBF/DCF

Presentation report of the IGF IGF

Procedures Guide of IGF services IGF

Code of Ethics Pamphlet of the IGF IGF

Note on indicators IGF

IGE, note on missions carried out in 2006 IGE

Activity program and time-table for the year 2007 IGE

PI-22: Timeliness and regularity of accounts reconciliation

Copies of availability book of the accounting item of the Plateau for the period May - October 2007 DGTCP/DCP

Note of the DGTCP/DCP on regularity and respect of deadlines of the account reconciliationoperations

DGTCP/DCP

Note on control missions of the 2007 balances DGTCP/DCP

Note on the monitoring of the provisional allocation accounts

Order 53 MDP/DGTCP/CE of 16 February 2007 on the creation of the Monitoring Committee of thebudget execution and operations of the government. And minutes of the meeting of 12 April 2007

DGTCP/DCP

PI-23: Availability of information on resources received by service delivery units

PI-24: Quality and timeliness of in-year budget reports

Accounts Instruction 0609 DGTCP ASTER/CRCP project of 14 April 2006 on the breakdown ofprovisional allocation accounts in the deconcentrated accounts headings

Letter 2604 of MEMEF/DGTCP/ACCT of 26 June 2006 fixing the time frame for production of thegeneral monthly balance of the 2005 management

Order 053/MDPMEF/DGTCP/CE of 16 February 2007 on the creation of the Monitoring Committee ofthe execution of the Budget and Operations of the Government

DGTCP/

CGAF 2003, 2004 DGTCP/DCP

General Account of the Finance Administration, Presentation Report and Operating Report of theTreasury, 2005 Management

DGTCP/DCP

General Trial Balance as at 31 October 2007 DGTCP/DCP

Development of Budgetary Revenues as at 31 October 2007 DGTCP/DCP

Development of Budgetary Expenditures as at 31 October 2007 DGTCP/DCP

PI-25: Quality and timeliness of annual financial statements

2000 Budget Review Act DGBF

Presentation of the report of the 2001Budget Review Act DGBF

2001 Budget Review Act DGBF

PI-26: Scope, nature and follow-up of external audit

73

Annex 15: Calculations of Ratios for PI-1 and PI-2

Sources of data: Situations extracted from SIGFIP and General Accounts of the FinancialAdministration.

The amounts are in CFAF million.

Indications on the method:

For the PI-1 indicator, the ratio to be calculated is the ratio of the difference (in absolute valueand in percentage of the estimate) between the total of budgeted and actual expenditures. It doesnot take into account expenditures on debt and projects funded with external resources.

For the PI-2 indicator, the ratio to be calculated is equal to the sum of differences between thebudgeted and actual for each institution, in relation to the total of budgeted expenditures andcorrected with the relative difference between total budget and total actual.

Data Year: 2004

Budget Head Budget Actual Difference Absolute Percent

Education 282,879 269,183 -13,697 13,697 4.8%

Economy and Finance 186,531 224,788 38,257 38,257 20.5%

Defence 131,717 130,454 -1,263 1,263 1.0%

Health and Public Hygiene 71,897 67,567 -4,330 4,330 6.0%

Higher Education and Research 62,360 62,247 -113 113 0.2%

Interior 59,493 49,923 -9,570 9,570 16.1%

Foreign Affairs 35,824 35,925 102 102 0.3%

Economic Infrastructure 35,212 31,620 -3,592 3,592 10.2%

Presidency of the Republic 35,158 35,567 409 409 1.2%

Professional Education 19,588 12,882 -6,706 6,706 34.2%

Justice and Human Rights 13,019 11,777 -1,243 1,243 9.5%

Prime Minister's Office and AttachedServices 12,273 12,761 487 487 4.0%

Construction and Urban Planning 12,035 11,327 -707 707 5.9%

Agriculture 11,725 11,458 -268 268 2.3%

National Representation 9,759 9,871 112 112 1.1%

Civil Service and Employment 7,933 7,856 -76 76 1.0%

Youth, Sport and Leisure 6,458 6,072 -386 386 6.0%

Communication 3,926 3,692 -235 235 6.0%

Family and Women's Affairs 3,906 3,543 -363 363 9.3%

Solidarity and War Victims 3,892 3,921 29 29 0.8%

Other Ministries 32,290 31,696 -595 595 1.8%

Total Expenditures 1,037,874 1,034,128 -3,746 3,746 0.4%

74

Data Year: 2005

Budget Head Budget Actual Difference Absolute Percent

National Education 277,560 272,736 -4,824 4,824 1.7%

Economy and Finance 157,469 198,647 41,178 41,178 26.1%

Defence 128,704 122,671 -6,033 6,033 4.7%

Interior 98,600 92,353 -6,246 6,246 6.3%

Health and Public Hygiene 71,630 67,020 -4,610 4,610 6.4%

Higher Education and Research 66,997 68,240 1,242 1,242 1.9%

Economic Infrastructure 52,729 36,754 -15,975 15,975 30.3%

Foreign Affairs 37,249 36,623 -625 625 1.7%

Agriculture 35,176 19,523 -15,653 15,653 44.5%

Presidency of the Republic 34,928 34,543 -384 384 1.1%

Professional Education 21,401 20,830 -570 570 2.7%

Prime Minister’s Office and Attached Services 15,613 13,345 -2,268 2,268 14.5%

Justice and Human Rights 13,480 12,386 -1,093 1,093 8.1%

Construction and Urban Planning 12,031 11,257 -774 774 6.4%

National Representation 10,378 10,291 -86 86 0.8%

Civil Service and Employment 8,358 8,461 103 103 1.2%

Independent Electoral Commission 8,242 8,256 13 13 0.2%

Youth, Sports and Leisure 5,795 7,407 1,612 1,612 27.8%

Solidarity and War Victims 4,035 4,011 -24 24 0.6%

Planning and Development 3,909 3,733 -176 176 4.5%

Other Ministries 402,41 34,511 -5,729 5,729 14.2%

Total Expenditures 1,104,535 1,083,607 -20,927 20,927 1.9%

75

Data Year: 2006

Budget Head Budget Actual difference absoluteRelative

difference

Education 291,056 27,671 -17 384 17 384 6,0%

Economy and Finance 227,756 216,837 -10 919 10 919 4,8%

Defence 132,359 119,796 -12,563 12 563 9,5%

Ministry of Interior 103,503 96,187 -7,316 7 316 7,1%

Higher Education and Research 78,276 76,924 -1,352 1 352 1,7%

Health and Public Hygiene 76,721 73,679 -3,041 3 041 4,0%

Economic Infrastructure 61,953 50,434 -11,519 11 519 18,6%

Foreign Affairs 39,599 38,321 -1,278 1 278 3,2%

Presidency of the Republic 34,595 34,377 -218 218 0,6%

Professional Education 23,118 23,858 740 740 3,2%

Agriculture 19,351 19,563 211 211 1,1%

Justice and Human Rights 14,519 13,330 -1,189 1 189 8,2%

Prime Minister’s Office andAttached Services 13,780 14,324 543 543 3,9%

Construction and Urban Planning 12,551 11,729 -822 822 6,6%

National Representation 10,138 10,075 -62 62 0,6%

Civil Service and Employment 10,119 9,256 -864 864 8,5%

Environment, Water and Forests 8,988 7,611 -1,378 1 378 15,3%

Independent Electoral Commission 8,906 4,889 -4,017 4 017 45,1%

Family and Women’s Affairs 7,997 7,874 -123 123 1,5%

Youth, Sports and Leisure 6,879 7,902 1,023 1 023 14,9%

Other Ministries 50,105 44,648 -5,457 5 457 10,9%

Total Expenditures 1,232,270 1,155,284 -76,986 76 986 6,2%

Amount of differences (value and %of the estimate) 82 022 6,7%

Results

For PI-1 For PI-2

YearTotal Expenditure

Deviation(1)

Total expenditurevariance

Variance in excessof total deviation

2004 0.4% 8.0% 7.6%

2005 1.9% 9.9% 8.0%

20056 6.2% 6.7% 0.4%

Annex 16: Synthesis of the Observations and Proposals of theIvorian Part on the PEFA Report

Observations and Proposals of the Directorate General of Budget and Finance

PAGE

PARA-GRAPH

PEFAREPORT

OBSERVATIONS

PROPOSALS

FINAL REPORT – STATUS

Fullytaken intoconsiderat

ion

Partiallytakeninto

consideration

Nottakeninto

consideration

V §-6

Comprehensiveness andtransparency

"Thoughabundant, thebudgetdocumentationis not inconformitywith theorganicrequirements,nor PEFAstandards"

"The level ofextra-budgetaryoperationswouldrepresent ahigh amountgiven that, bydefinition, theyare difficult toassess as theyare notknown"

The budgetdocumentationis in conformitywith the organicrequirements.We will producethe data inaccordance withPEFA standards.

What operationsare beingreferred to here?How can oneassess the levelof operationsthat are notknown? Theextra-budgetaryexpenditures arelimited toadvances notregularized atthe end of themanagement,there are noothers.

This partcould becancelledfor lack ofspecificelementson theseserious andunfoundedassertions.

X

X

Vii (ii) §-11

Table:linecredibility of thebudget;columnbudgetdiscipline

"It is notpossible toassess the levelof credibilityof theestimatescompared tothe budgetauthorizations"

One shouldrather indicate“credibility ofthe estimates inrelation to theactuals” and notin relation to thebudgetauthorizations,which are alsoestimates.

Thecredibilityof thebudgetestimatesorauthorizations isappreciatedin relationto theactualexpenditures in thebudgetexecutionreviewlaws.

X

(ii) §-11

77

PAGE

PARA-GRAPH

PEFAREPORT

OBSERVATIONS

PROPOSALS



ion

Partiallytakeninto

consideration

Nottakeninto

consideration

Vii Table:line:comprehensiveness andtransparency,column:strategicallocation ofresources

"The lack ofbudgetdocumentationmay affectparliamentarycontrol andpreventefficientallocation ofresources"

This is a veryvague assertion.There is a needto indicate theprecisedocuments thatare necessaryand would notbe available.

All thebudgetdocumentationrequired forparliamentary controlareproducedandavailable.

X

Viii

(ii) §-11

Table:lineAccounting,registration offinancialinformation andreportscolumn:budgetdiscipline

"But thequality ofinformation… is onlyassessed at theend of thefiscal year”

There is aPECMERinterface whichensures the linkof the transfersin real timebetween SIGFIPand ASTER.Studies areongoing for thecreation ofanother interfacewhich willensure feed-back fromASTER andSIGFIP.

X

12 3.13

(Table)

“The budgetstructure…………., thedestination andnature.”

The budgetstructure is inconformity withthe WAEMUnomenclature,which is adirectivedefining theminimumframeworkconcerningclassification byfunctions and bynature, whichthe memberStates shouldcomplete in caseof need.

The differentparts are linkedamongthemselvesthrough well-defined types of

X

78

PAGE

PARA-GRAPH

PEFAREPORT

OBSERVATIONS

PROPOSALS



ion

Partiallytakeninto

consideration

Nottakeninto

consideration

administrativeunity: it istherefore nottrue to say thatthey lack clarity.

Theexpenditures onpovertyreduction areclearlyidentifiable inthe budget. Theymay be wellmonitored.

Observations and Proposals of the Chamber of Accounts

PAGE

PARA-

GRAPH

PEFAREPORT

OBSERVATIONS

PROPOSALS



ion

Partiallytakeninto

consideration

Not takeninto

consideration

vi

40

10

3.95

« TheChamberofAccounts………..,none hasso farbeenverifiednorjudged”

“…However theaccounts…offiscal2002 andfiscal

Contrary to thisview, theChamber ofAccounts has aregular activitydespite itshighly reducedpersonnel (07Magistrates and02 auditors in2000) and thevery poor stateof the offices,which makes thearchiving ofdocumentsdifficult.

Thefollowingstatisticsindicate thepace ofactivities:

Years andTotalAccountsjudged

2005 - 95

2006 - 101

2007 - 115

Controlsmade

2006:

X

X

79

PAGE

PARA-

GRAPH

PEFAREPORT

OBSERVATIONS

PROPOSALS



ion

Partiallytakeninto

consideration

Not takeninto

consideration

2003” AbidjanInstitute ofCardiology, RoadSafetyBureau,NationalInstitute ofPublicHygiene

2005:Société desTransportsAbidjanais,

- Control oftheefficiencyof thegrantsgranted toprivatestateestablishments.

Observations and Proposals of the General Directorate of Customs

PAGEPARA-

GRAPHE

PEMFARREPORT

OBSERVATIONS

PROPOSALS


Fullytakeninto

consideration

Partiallytakeninto

consideration

Nottakeninto

consideration

25 TablePI-14 (i)

“Thetaxpayersareregisteredin arelativelyreliablesystem……. thenumber isalso usedby theCustomsbut in aninadequatemanner.”

The Customshas no otheruse to make ofthe taxaccount thanidentifyingcorrectly theimporter or theexporter.

Theinadequate usethat ismentioned isnot specified.

X

80

Observations and Proposals of the General Directorate of Economy

PAGE

PARAGRAPH

PEMFAR

REPORT

OBSERVATIONS

PROPOSALS


Fullytaken intoconsidera

tion

Partiallytakeninto

consideration

Nottakeninto

consideration

6 2.9 “(…)Theexpenditures areregularized,therefore, paid butnotbudgeted(…).”

Theexpenditures tobe regularizedcompriseoperationsestimated in thebudget butexecuted viaadvances, beforetheir executionin SIGFIP andsome operationsnot provided forin the budget.

X

Report No. 44429-CI

Côte d’Ivoire

Public Expenditure Management and FinancialAccountability Review

(In Three Volumes) Volume III: Public Procurement Assessment Report

November 2008

PREM 4

Africa Region

Document of the World Bank, co-produced with the Government of Cote d’Ivoire, theInternational Monetary Fund, the African Development Bank and the European Union

i

Currency Equivalents

Currency Unit = CFA Franc (CFA F)US$ 1 = FCFA 436.17 (April 2008)

Fiscal Year



AfDB

AJT

GCC

CCMP

CGECI

CNCS

COJO

CPAR

DAAF

DGBF

DMP

IGE

IGF

OHADA

ONMP

GDP

SME

SIGFIP

SIGMAP

WAEMU

African Development Bank

Treasury Solicitor (Agent Judiciaire du Trésor)

General Conditions of Contract

Public Procurement Consultative Commission

General Confederation of Contractors of Côte d’Ivoire

National Coordination and Monitoring Committee

Bids Opening and Award Commission

A. Country Procurement Assessment Report

Director of Administrative and Financial Affairs

General Directorate of Budget and Finance

Directorate of Public Procurement

General Inspectorate of Government

General Inspectorate of Finance

Organization for Harmonization of Business Law

in Africa

National Public Procurement Observatory

Gross Domestic Product

Small and Medium Enterprises

Integrated Public Finance Management System

Integrated Public Procurement Management System

West African Economic and Monetary Union

Vice President: Obiageli K. Ezekwesili

Country Director: Madani M. Tall

Sector Director: Sudhir Shetty

Sector Manager: Antonella Bassani

Team Leaders: Marcelo R. Andrade


ii

TABLE OF CONTENTS

1. INTRODUCTION................................................................................................................................................. 1

2. CONTEXT.......................................................................................................................................................... 2

A. Nature and scope of public expenditures ................................................................................. 2

B. Breakdown of public procurement by method of procurement and nature of services ......... 2

C. Role of Central Administration and Other Sub-national Administrations............................. 3

D. Links with Budgetary and Control Mechanisms ..................................................................... 4

E. Procurement System and its Links with the Rest of the Public Sector................................... 5

F. Procurement System, Key Actors and their Role in the Operation of the System.................. 53. Government Reform PROGRAM.......................................................................................................................6

A. Background of Reform Process ................................................................................................ 6

B. Reforms Implemented since the 2004 CPAR ........................................................................... 8Pillar I - Legislative and Regulatory Framework ........................................................................... 8Pillar II - Institutional Framework and Management Capacity.................................................... 10Pillar III - Procurement Operations and Market Practices .......................................................... 11Pillar IV - Integrity and Transparency of the Procurement System ............................................. 12

4. assessment of the QUALITy of the procurement system ................................................................................. 13

A. Overall assessment of System ................................................................................................. 13

B. Detailed assessment by pillar.................................................................................................. 16Pillar I - Legislative and Regulatory Framework ......................................................................... 16Pillar II - Institutional Framework and Management Capacity.................................................... 26Pillar III - Procurement Operations and Market Practices .......................................................... 33Pillar IV - Integrity and Transparency of the Public Procurement System ................................... 40

5. RISK ASSESSMENT....................................................................................................................................... 48

6. RECOMMENDATIONS ....................................................................................................................................49

FIGURES:

Figure 4.1: Public Procurement Score Aggregated by OECD/DAC Pillar................................. 14Figure 4.2: Public Procurement Score Aggregated by OECD/DAC Indicator ........................... 16

ANNEXES:

Annex 1: Public Procurement – OECD/DAC Summary Table ................................................. 62Annex 2: List of Documents Consulted.................................................................................... 64Annex 3: PEMFAR – Public Procurement: List of Persons Contacted...................................... 66

1

1. INTRODUCTION

1.1 Objective of the assessment report: The objective of this report is to conduct anassessment of the Ivorian public procurement system that can be used to measure itsfuture progress. It also aims at providing information needed for the preparation of theGovernment’s action plan to address the inadequacies identified. The report constitutesVolume III of the “Public Expenditure Management and Financial AccountabilityReview” (PEMFAR) and informed preparation of the main PEMFAR report, particularlyits Chapter III which presents an evaluation of the public procurement system.

1.2 The methodology for the preparation of the report: The report provides an assessmentof the quality of the public procurement system using the OECD/DAC methodology.80

The scoring system followed the criteria set out in the methodology. It needs to be notedthat the aim of the exercise was not to assess or to rate the various Governmentalinstitutions or their managers, but rather to relate the system to international goodpractices and relevant WAEMU guidelines.

1.3 Hence, the assessment identifies the discrepancies between the current procurementsystem and the one proposed by the WAEMU public procurement guidelines adopted inDecember 2005 and signed by Côte d’Ivoire. Efforts must be made to apply theseguidelines, which should have been done by December 31, 2007. This would assist Coted’Ivoire to improve the efficiency of its system and the scores achieved in the review.

1.4 Process of preparing the report: The review was conducted in two stages:

During the first stage, in November 2007, an inter-agency mission assessed in Côted’Ivoire81 the public financial management system. This assessment included anevaluation of the public procurement system. During the mission, the team focused on areview of a number of documents listed in the annex and conducted several workingsessions with the National Coordination and Monitoring Committee (CNCS) made up ofrepresentatives from the administration, private sector and civil society, the DirectorateGeneral of Budget and Finance (DGBF) and the Directorate of Public Procurement(DMP). The mission team conducted a preliminary assessment that was subsequentlyexpanded through many individual interviews with all the relevant stakeholders.

80Document titled “Methodology for assessment of national procurement Systems”, Version 4,

www.oecd.org/dac/effectiveness.81

From 5 to 28 November 2007, François Serres, an international consultant funded by the African DevelopmentBank, participated in the mission and prepared this report. The inter-agency mission team, which was led byMarcelo Andrade (Principal Economist, TTL) and Richard Doffonsou (Economist, Co-TTL), both World Bankexperts, included Eric Yoboue, (Principal Procurement Specialist), Bella Lelouma Diallo (Principal FinancialManagement Specialist) and Assiata Houédanou (Disbursement Assistant), all from the World Bank, Bacari Koné,Technical Assistant Advisor from the IMF Public Finance Department, Racine Kane, Chief Economist, Samba Ba(Principal Macroeconomist), and Serge Nguessan (Principal Procurement Officer) from the AfDB as well as ZoltànAgai from the European Commission Delegation. Robert Cauneau and Giséle Suire, Public Finance Consultantfunded by the AfDB and the World Bank respectively also took part in the mission. Zainab Mambo-Cissé, TinaAboah Ndow, and Judite Fernandes (Operations Assistants) and Marie-France Anet-Oyourou (ProcurementAssistant) all from the World Bank, facilitated the preparation of the report and the work of the said mission team.

2

Subsequently, the assessment underwent several reviews to refine the diagnosis. At thesame time, a working session was organized with the CNCS and the DMP to update anaction plan of the procurement system reform. At the end of the mission, an aide-mémoire containing the major findings was presented to the Government.

The second stage involved the preparation of this report. A preliminary report wassubmitted to the Government and all the donors in January 2008, which was subsequentlyrevised to incorporate the comments from the Government and the donors. The finalreport was presented for validation by all stakeholders at a workshop held in Abidjan onJune 16-17, 2008.

2. CONTEXT

2.1 Since 1999, Côte d’Ivoire has been beset by political instability that has adverselyimpacted on the macroeconomic and social fronts. The quality of public services hasbeen significantly affected in many sectors, including health and education. In view ofthe strategic position of Côte d’Ivoire, inter-regional trade has also been hard-hit.

2.2 According to Transparency International, the quality of public sector institutions andgovernance has also deteriorated. The World Bank indicator “Doing Business” hasconfirmed this trend and, more generally, the lack of transparency, notably in themanagement of sensitive sectors such as petroleum and cocoa. “Post-conflict”rehabilitation programs have been put in place, and this requires greater transparency inpublic financial management.

A. NATURE AND SCOPE OF PUBLIC EXPENDITURES

2.3 According to the 2004 Country Procurement Assessment Report (CPAR) “between 1994and 2002, public procurement represented between 3.2 and 4.3% of the gross domesticproduct (GDP).” More specifically, since 1994, the volume of public procurement hasbeen growing. Thus, public procurement generated tenders ranging from FCFA 62billion to FCFA 208 billion between 1994 and 2002. Moreover, the significance ofpublic procurement in the government’s budget execution is still as evidenced by theweight of public expenditure subjected to procurement processes (excluding localcommunities and parastatals) (Journal of Public Procurement, No. 940 of June 1, 2007).In 2006, these expenditures amounted to FCFA 121.9 billion compared to FCFA 89.7billion in 2005 and FCFA 135.2 billion in 2004. The level of government spendingsubjected to the public procurement process represented barely 1% of GDP, well belowthe country average (3.2% to 4.3% over the 1994-2002 period). This shows that anequivalent of nearly 3% of the GDP (FCFA 360 billion) currently is not governed bypublic procurement rules.

B. BREAKDOWN OF PUBLIC PROCUREMENT BY METHOD OF PROCUREMENT

AND NATURE OF SERVICES

2.4 According to the CPAR conducted in 2004, “sole sourcing or by direct negotiationwithout use of competitive methods was the most frequently used procurement method interms of volume between 1998 and 2002. Open competitive bidding was the second

3

most used method, slightly behind procurement by sole sourcing. Limited competitivebidding (whereby candidates are directly invited to present a bid without the priorpublication of tender notices) only accounted for a small volume of contracts signedbetween 1998 and 2002.”

2.5 The use of competitive procedures, particularly open competition was progressing wellfrom 2002 (39.7%), 2003 (54.4%) to 2004 (70.5%). Since then, there has been a cleardecline in the use of such competitive procedures, notably since 2005 and 2006 whenthey accounted for 39.1% and 47.2%, respectively, in terms of volume.82 The Journal ofPublic Procurement estimates contracts awarded in 2006 by open tender at FCFA 72.5billion, equivalent to 59.5% of the amount of contracts approved. However, limitedcompetition was valued at CFA 14.9 billion (out of the FCFA 72.5 billion mentionedabove), representing nearly 1/5 of the total amount of competitive tendering.Consequently, an estimated FCFA 49.4 billion was awarded through non-competitiveprocedures, the bulk of which was by sole sourcing (30 % of total amount of approvedcontracts).

2.6 Additionally, the Journal of Public Procurement notes that operational constraintscompelled credit administrators to execute a portion of the appropriated budge line itemssubject to public procurement by by-passing the normal procedures. The possibility wastherefore given to the latter to directly spend about 25% of the credit concerned. Thisdispensation is applicable only to current operating expenses (according to the GeneralDirectorate of Budget). It is not possible to determine if such amounts are included in thepercentage of tenders awarded through the uncompetitive methods mentioned above (solesourcing).

C. ROLE OF CENTRAL ADMINISTRATION AND OTHER

SUB-NATIONAL ADMINISTRATIONS

2.7 The regulatory framework highlights the empowerment of departments of the centraladministration, public establishments such as state corporations and local governments inthe area of procurement. Article 38 of the public procurement code provides for thecreation within each contracting authority of a deconcentrated committee for tenderopening and award. Additionally, the contracting authorities have put in place focalpoints within the directorates of administration and financial affairs of the ministries tocoordinate the various procurement operations undertaken by the different structuresattached to the ministries.

2.8 Responsibility for the supervision of public enterprises lies with the Directorate in chargeof Participation and Privatization that coordinates the operations of the state corporationsand parastatals; the General Directorate of Decentralization and Local Development isthe overall supervising body responsible for coordinating the operations of localgovernments while the Directorate of Budget Control oversees the operations of nationalpublic agencies.

82Source: Journal of Public Procurement –June 2007.

4

2.9 Be that as it may, procurement procedures are subject to a pre-audit by the Directorate ofPublic Procurement (DMP) located at the Ministry of Economy and Finance dependingon thresholds determined by Orders No. 188 and 189 of August 2, 2006. The Ivorianauthorities have devolved this function to the regional level. Currently, seven regionalaudit directorates have been created.

2.10 The specificity of the Ivorian regulatory framework lies in the existence, alongside thecontrol body responsible for ex-ante and ex-post control (the Directorate of ProcurementProcurement), of procurement advisory committees (some chaired at the central level bythe Directorate of Public Procurement) that advise the minister in charge of publicprocurement on the use of waiver and exceptional procedures.

D. LINKS WITH BUDGETARY AND CONTROL MECHANISMS

2.11 In Côte d’Ivoire, the national budget is prepared annually, but in view of thesociopolitical crisis, the budgets of recent years have not been passed by parliament; theyhave been adopted by presidential ordinance. All contracting authorities are expected toformulate their budgets and prepare procurement plans as part of a planning processordered by the Ministry of Finance.

2.12 As soon as their budgets are approved, all entities governed by the public procurementcode have to prepare, a provisional and reviewable procurement program, if possibleprior to the award of any new contract. This program should be consistent with thecredits allocated to them and their annual activity program. Procurement plans areprepared with the support and under the coordination of the Directorate of PublicProcurement.

2.13 In 2006, the Integrated Public Procurement Management System (SIGMAP) was put inplace (it has been operational since April 2006). It is a tool for monitoring themanagement of the public procurement and contract performance processes. Once thebudget of the contracting authority is approved, the latter is notified and the procurementallotments are entered into the SIGMAP system thereby ensuring the tracking ofexpenditure commitments as and when the contract services are executed.

2.14 Furthermore, revenue and expenditure projections are introduced into another system, theintegrated public financial management system (SIGFIP), which is inter-connected withthe SIGMAP. Since these are only expenditure estimates, budget management operationssynchronize the rates of execution of revenue and expenditures. This consists in definingan overall amount of the expenditures to be authorized in relation to public resourcemobilization prospects during a given period. The SIGMAP is also directly linked toSIGBUD, (integrated budgetary management system), through an interface between thetwo systems that effectively creates procurement lines specifying the relevant procedures.

2.15 Public expenditures are managed through a control channel, the major actors of whom arethe delegated commitment officer, the financial comptroller and the allocatingaccountant. Several state institutions are in principle involved in the control and auditingof procurement procedures, namely the General Inspectorate of Government (InspectionGénérale de l’État – IGE), the General Inspectorate of Finance (Inspection Générale desFinances-IGF) and the Chamber of Accounts of the Supreme Court, although their

5

intervention in procurement matters is virtually non-effective. The ex-post control by theDMP of procurement procedures is no longer operational.

E. PROCUREMENT SYSTEM AND ITS LINKS WITH

THE REST OF THE PUBLIC SECTOR

2.16 The regulatory framework of the procurement system covers all contracting authorities atboth the organic and material levels. However, it is worth highlighting a number ofdispensatory arrangements in the procurement code. These include agreements betweenpublic legal entities based on decisions by the Minister in charge of procurement. Anumber of contracts are directly signed by the ministries and local governments withpublic entities, particularly in the services sector (Bureau National d’Etudes Techniqueset de Développement - BNETD, Laboratoire d’Analyse du Bâtiment et des TravauxPublics). The decision governing this dates back to November 26, 1990 and no otherinstrument has been passed in application of the new procurement code. Theseagreements are not covered by any competitive procurement procedure.

2.17 Contracts signed by private entities acting on behalf of a public legal entity, as well asagreements for public service delegation can also be subjected to dispensatoryarrangements. The country has yet to put in place a special regulatory framework forconcessionary arrangements of public services (with or without construction works).

2.18 Lastly, control over the execution of the budget of some contracting authorities insensitive areas such as petroleum or coffee-cocoa should be subjected to an in-depthreview. Indeed, the bulk of the PETROCI budget is invested in a consortium in whichthe company is not a majority shareholder, and the leader of the consortium is responsiblefor procurement. Since such consortiums were not selected on a competitive basis, eventhough the share of the Government is similar to a subvention, it is important that theDMP verifies and ensures that the internal procedures of the said consortiums are in linewith the public procurement code as well as good international practices applicable topublic resources. Furthermore, some funds set up in the coffee-cocoa sector should beconsidered to be public organizations in line with WAEMU Procurement Guideline No. 4and, consequently, subject to public procurement regulations. Moreover, since thecompanies are not selected on a competitive basis, it would be useful to review the termsof granting or renewing the framework of their activities.

F. PROCUREMENT SYSTEM, KEY ACTORS

AND THEIR ROLE IN THE OPERATION OF THE SYSTEM

2.19 The institutional arrangement has been briefly mentioned above. In its current state, itdoes not provide for a clear separation between procurement, control and regulatoryfunctions. Alongside the contracting authorities which pursue adeconcentration/empowerment objective in procurement by setting up focal points andbids opening and award commissions, the Directorate of Public Procurement also plays acentral role in the system and performs control functions, either directly or through thecentral consultative committee, notably with regard to limited competitive bidding andsole sourcing. It participates in the formulation of procurement plans and manages theSIGMAP. It also carries out regulatory functions.

6

2.20 A potential conflict of interest also exists at the level of the ministry in charge of publicprocurement, since it is at the same time in a position to authorize some procedures (solesourcing), approve contracts and endorse the decisions of the commissions in charge ofdispute resolution.

2.21 At the institutional level, the mechanism proposed by the procurement code for settlingdisputes with private bidders, entails the creation of a mediation commission whosechairmanship is entrusted to the General Inspectorate of Government (IGE) and thesecretariat under the Treasury Solicitor.

2.22 The private sector has inadequate access to Government tenders and, consequently, ishardly involved in the regulation of the system. As for the civil society, it is virtuallynon-existent and has a weak intervention capacity in the government procurementprocess.

3. GOVERNMENT REFORM PROGRAM

A. BACKGROUND OF REFORM PROCESS

3.1 Given the post-crisis context of Côte d’Ivoire, it is important to refer to the findings ofthe procurement analytical review and the terms of the aide-mémoire signed by theIvorian party during their mission to the World Bank in Washington D.C. from June 7 to11, 2004. As the aide-mémoire states, “at the end of the discussions, the two partiessigned agreements on the outstanding substantial issues relating to: (i) the publicprocurement regulatory body; (ii) deconcentration of the Directorate of PublicProcurement and the public procurement function; (iii) decentralization of publicprocurement at local government level; (iv) appeals body and amicable resolution ofdisputes; (v) categorization of contractors; and (vi) implementation of the training andcapacity building component.”

3.2 Agreements on the various points may be summarized as follows:

Regulatory Body: As a transitional arrangement, the function of the public procurementregulatory system will be devolved to the Directorate of Public Procurement. A decreeon the organization and operation of this structure will create a sub-directorate in chargeof regulation, separate from other units responsible for operations. In its organization andoperation at the decision-making level, particularly with regard to policy definition andindependent non-jurisdictional control procedures, it will draw on a participatoryframework equivalent to that of the CNCS, involving the administration, the privatesector and the civil society.

Deconcentration of the Public Procurement Function: The Bank team noted the fast-tracking of the deconcentration of the Public Procurement Directorate. This translatedinto the effective creation of two new regional directorates based in Abengourou (Eastand North-East) and San-Pedro (South-West), in addition to the three operational regionaldirectorates of Bouaké, Daloa and Man.

Decentralization of Public Procurement in Local Governments: Following the review ofthe measures proposed for the new draft Public Procurement Code, the latter was found

7

to be consistent with the legislative framework governing decentralized communities.However, the two parties agreed on the urgent need to undertake training and capacitydevelopment actions for the benefit of local managers in general and local governmentsin particular.

Appeals Mechanism and Amicable Dispute Resolution: Provisionally, the mechanismproposed in the draft Public Procurement Code, will be maintained. The effectiveness ofthe mechanism will be assessed after one year of operation before a final decision ismade.

Categorization of Contractors: Both parties share the concern for transparency in theimplementation of the process. The Bank took note of the involvement of private sectorprofessional organizations in the establishment of the parity committee, currently beingestablished. This participatory framework will make for a wide dissemination ofinformation for economic operators as well as the periodic updating of the list ofcontractors.

Training and Capacity Building: A sectoral training and capacity building plan forstakeholders of the public procurement system has been formulated and will be discussedby the partners at a roundtable for validation and implementation. The Bank hopes toprovide support for the organization of the roundtable and the funding of the proposedactivities.

3.3 At the end of the meeting, a joint public procurement reform action plan was validated.The action plan consisting of four (4) pillars corresponding to the strategic themes of thereform is summarized in the table below”:

Pillar No. 1: Legislative and Regulatory Framework:

- simplify texts and make them accessible to all;

- harmonize public procurement procedures within the context of the WAEMU.

Pillar No. 2: Central Institutional Framework:

- improve budget execution procedures in public procurement;

- render the transitional regulatory body operational and functional;

- put in place an institutional development capacity.

Pillar No. 3: Procurement Operations and Private Sector Performance in PublicProcurement:

- continue the deconcentration of the DMP and the decentralization of the public procurementfunction;

- put in place a computerized public procurement management system;

- train actors of the public procurement system.

Pillar No. 4: Integrity of the Public Procurement System:

- render the appeals body functional and operational;

- render the transitional regulatory body at the DMP operational and functional;

- take measures to combat corruption in public procurement.

8

3.4 During the Abidjan assessment mission, the Public Procurement Directorate supplied theteam with an updated matrix of its action plan. A working session was organized with theCNCS, in light of the provisional findings of the mission, to finalize a new plan forpursuing the reform measures.

B. REFORMS IMPLEMENTED SINCE THE 2004 CPAR

Pillar I - Legislative and Regulatory Framework

3.5 The Public Procurement Code was adopted by Decree No. 2005-110 of February 24,2005. However, it did not become effective until April 2006. Many implementinginstruments were adopted:

Order No. 185 MDPMEF/DGBF/DMP of August 2, 2006, on the functions andorganization of the Public Procurement Directorate.

Order No. 186 MDPMEF/DGBF/DMP of August 2, 2006, on the modalities for theestablishment, organization and mode of operation of the Public ProcurementConsultative Commissions.

Order No. 187 MDPMEF/DGBF/DMP of August 2, 2006, defining the method forcomputing timelines in public procurement procedures.

Order No. 188 MDPMEF/DGBF/DMP of August 2, 2006, establishing the thresholds forsigning, validating and approving public tenders.

Order No. 189 MDPMEF/DGBF/DMP of August 2, 2006, specifying the modalities fordelegation of responsibilities of the Minister in charge of Public Procurement.

3.6 In view of these instruments, one of the issues of concern of the review has been thecontent of delegated power in non-competitive procedures. In fact, in cases of limitedtendering or sole sourcing, the procurement code provides that their use would be subjectto prior approval by the Minister for public procurement. The control structure does notintervene as such, since the authorization by the Minister is only preceded by theapproval of the Central Consultative Commission (admittedly chaired by a representativefrom the Public Procurement Directorate). However, the executive order specifyingmodalities for the delegation of the powers of the Minister in charge of PublicProcurement establishes that:

The Chief of Staff of the Ministry in charge of Public Procurement, has the power toauthorize the use of the sole sourcing procedure where the amount involved exceeds theex-ante control threshold, to approve tenders, to sign amendments involving sumsexceeding a specific threshold and approve the decisions of the appeals bodies.

The Public Procurement Director, has the power to authorize the use of limitedcompetitive bidding and sole sourcing and to sign an amendment for a sum below a giventhreshold.

9

3.7 However, the executive order states that “the delegation of power mentioned in the orderconcerns actions that require a decision of the Minister in charge of public procurementand for which the procurement code expressly provides for delegation;” “apart from suchcases, any other delegation must be by a specific order by the Minister.” Theprocurement code was passed by decree issued by the Council of Ministers; Article 146of the said decree specifies that any waiver for the provisions of this code should be by aCouncil of Ministers decree.” Articles 71.3, 77.3, 124.5 specify that the use of the twoabove-mentioned procedures or the signing of an amendment, an approval or a sanctionmay be authorized either by the minister or his appointee.

3.8 However, the only item in the code (Article 82) governing the delegation of powersrelates solely to those of the approving authority (which in the context of the code shouldbe understood to mean the tender approving authority). There is no such an arrangementfor the authorization of the use of non-competitive and dispute settlement procedures.Similarly, the order setting thresholds for signing, validating and approving tenders raisedquestions about the delegation of powers only with regard to tender approval. The sameorder authorizes the Public Procurement Director to coordinate the management ofparticular procurement methods.

3.9 Our concern here is not to ascertain if the said decisions follow the letter and the spirit ofthe provisions of the procurement code. However, it is worth noting that the ex-antecontrol function is diluted, as handled by individuals and not a control structure, asituation that is at variance with the provisions of WAEMU Public ProcurementGuideline No. 5. The need to clear bottlenecks in the structures and to shorten time limitscannot justify, in this particularly sensitive area, the excessive use of the system ofdelegation of powers.

3.10 Many texts are still at the draft stage:

Draft decree on the organization and operation of the dispute and litigation resolutionsystem in public procurement.

Draft order on the definition of modalities for referring cases to mediation commissionsand the investigative and decision-making procedures of the latter.

Draft order on modalities for the implementation and follow-up of the recommendationsof public procurement audits.

Draft order on modalities for managing the financial resources of the mediationcommissions.

Draft order on time limits for which bidders for public tenders would be committed totheir bids.

Draft order on the determination of modalities for applying preferential margins ofnational bidding contractors.

3.11 These instruments will be reviewed with in relation to the relevant pillars dealing withissues to which they refer. It is worth noting that their content – this is particularly thecase of the rule on preferential margins – does not take into account the new internationalcommitment of Côte d’Ivoire following the adoption of the two WAEMU Public

10

Procurement Guidelines No. 4 and 5, expected to be transposed to the country’sregulations at the latest by December 31, 2007. The transposition process will howeverbe part of the assistance provided by the WAEMU Commission and the AfricanDevelopment Fund and for which consultants would be recruited shortly.

3.12 With regard to payment procedures, several instruments have been prepared at the PublicProcurement Directorate. The preparation of tender documents and terms of reference isongoing and should be finalized and subsequently adopted in accordance with theregulations. However, there will be the need to ensure that these new texts are in linewith the above-mentioned guidelines and procurement code. At the same time, a study isongoing (contracted out to BNEDT) to establish a data bank on reference prices.

Pillar II - Institutional Framework and Management Capacity

3.13 The new procurement code highlights the need to relate procurement planning to creditsallotted to the contracting authorities. This provision could be reviewed to enable theformulation of the said plans well ahead of budgetary arbitration and make theavailability of credits prior to the launch of procurement procedures a statutoryobligation.

3.14 The Public Procurement Management System has been operational since 2006; it is a keyinstrument for integrating procurement into the public expenditure management system.However, this system should be expanded to include all the contracting authorities aswell as some relevant information (pertaining to pricing and by identifying procurementby sole sourcing according to the various cases of usage outlined in the code).

3.15 The question of the regulatory body was at the center of discussions held in Washington.Since then, Côte d’Ivoire has adopted the WAEMU Procurement Guideline No. 5 thatrecommends a clear separation between regulatory and control functions. According tothe aide-mémoire signed by the Ivorian party, a sub-directorate for regulation, separatefrom other operational units, was to be created at the Public Procurement Directorate.

3.16 However, it is worth noting that the Order of August 2, 2006, on the functions of thePublic Procurement Directorate has created a sub-directorate for regulation and controlcomprising both a regulatory department and a special management department. Theprinciple mentioned above has therefore not been complied with, in view of the fact thatthis sub-directorate caters for both regulation and control. Currently, and prior to theadoption of the WAEMU guideline, there has been no separation between the body incharge of control and the one in charge of regulation.

3.17 According to information obtained by the mission, there are plans to create a publicprocurement observatory and, following discussions with the Minister of Finance and hisChief of Staff, a roadmap for setting up the regulatory function has been adopted. Thus,it was agreed that regulatory duties should be the responsibility of an independenttripartite administrative authority with equal representation of the administration, theprivate sector and the civil society, and called the National Public ProcurementObservatory (Observatoire National des Marchés Publics - ONMP). It will carry out thisfunction in conjunction with the IGE, which will run the technical secretariat which willalso be responsible for independent audit missions, management of appeals and

11

application of sanctions. To this end, the Ivorian Government undertook to take thenecessary steps for the creation within the IGE of a specialized unit that the developmentpartners intend to support to make operational as soon as possible.

3.18 Located under the Ministry of Economy and Finance, the ONMP meets the criteria ofcollegiality, independence and representativeness. It aims at fulfilling the followingmissions:

Define training policies and strategies pertaining to public procurement.

Define guidelines for the organization and building of the public procurementinformation system and the Internet site for supervision.

Ensure the application of the principles of good governance (green number to fightcorruption and fraud in public procurement).

Provide advice to the Minister in charge of public procurement in the definition andimprovement of policies in this field.

Monitor the implementation of audit findings, decisions on bidders’ complaints andpublic procurement reform actions.

Create and lead a platform for the exchange of views and dialogue with all thestakeholders of the system.

3.19 The Ivorian party undertook to create the new mechanism and make it operational bySeptember 2008. This roadmap constitutes a first step whose impacts on the operation ofthe system could usefully be measured.

3.20 In relation to the principles of the WAEMU Guideline No. 5, it needs to be noted that theindependence of the observatory considered as an autonomous administrative authoritybut placed under the Ministry of Economy and Finance needs to be reviewed in the shortterm. Similarly, it is worth keeping sight of the separation of regulatory functions asdefined in the guideline, since the organ in charge of regulation is not in charge ofauditing, a function which has been given to the IGE. The implementing texts of theroadmap could however foster an efficient development of the procurement regulatorysystem by defining the functional linkages between the ONMP and the IGE, therebyguaranteeing the effective involvement of the former in initiating and validating auditsand in monitoring the execution of decisions arising from complaints.

3.21 The objectives of the 2004 CPAR in terms of capacity building have only been partiallyachieved. There is a training plan consisting of eight modules, but, due to lack offunding, only one has been implemented; discussions with the stakeholders helpedunderscore the need to implement a national capacity development strategy comprising atraining component and a statutory component to define a stable framework for thefunctions of a procurement specialist.

Pillar III - Procurement Operations and Market Practices

3.22 Few actions were undertaken under Pillar III. The table of assessment given in thefollowing chapter is quite explicit on this. The matrix of actions submitted by the Public

12

Procurement Directorate is quite limited. There is a dire need to formalize the legalframework of public-private partnership development in view of the post-crisis context,the number of relevant agreements renewed and the lack of transparency in which somesensitive activity sectors have been operating. A study designed to put in place a systemof categorization of contractors was initiated, but has yet to be finalized.

Pillar IV - Integrity and Transparency of the Procurement System

3.23 Few actions were taken to improve the operation of the public procurement controlsystem. The review noted that the General Inspectorate of Finance and the Chamber ofAccounts in effect did not exercise any control over procurement procedures.Furthermore, the audit function is non-existent. Admittedly, the new code (Article 140)provides for an independent audit mechanism, but its management was entrusted to thePublic Procurement Directorate, thus undermining the principle of independence. Thereis a draft decision on the issue, the content of which has been reviewed below in theassessment table. Be that as it may, it is worth noting that the audit function, as definedby the WAEMU Guideline No. 5, is a regulatory function; therefore cannot be entrustedto a control body. According to the afore-mentioned roadmap, the audit function ishenceforth entrusted to the IGE; consequently, the terms of the regulatory instrument thatattributes this function to it will have to be reviewed; it is certain that the effectiveness ofthe audits also depends on the capacity to issue sanctions and enforce them; theregulatory framework in which the IGE has been operating should therefore be re-examined from this perspective.

3.24 In the 2004 CPAR, it was recommended that, as a provisional arrangement, the appealsand amicable dispute resolution mechanism provided for in the draft procurement codewill be maintained. The effectiveness of this mechanism will be assessed after one yearof operation in order to arrive at a final decision. No mechanism has been put in placethree years after the signing of the aide-mémoire, as a result of which there is no efficientdispute settlement mechanism in the country.

3.25 According to the roadmap for the creation of the ONMP, this function will be entrusted tothe IGE, but there again it will be necessary to monitor the formulation of a regulatoryframework that will govern its establishment. Indeed, according to the WAEMU PublicProcurement Guideline No. 5, the principle of suspension of the tender award proceduremust be raised as soon as a case is referred to the contracting authority; the non-jurisdictional body for dispute settlement must have the capacity to initiate aninvestigation and, in particular, such a mechanism cannot be considered to beindependent if the decisions of the IGE continue to be subjected to further approval, as iscurrently the case of decisions of the mediation commissions. Also, and in conclusion,the transposition of the two WAEMU guidelines can provide a valuable opportunity forthe Ivorian authorities to improve their procurement system as well as the scores assignedin the review.

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4. ASSESSMENT OF THE QUALITY OF THEPROCUREMENT SYSTEM

4.1 The assessment of the quality of the Ivorian procurement system was conducted based onthe OECD/DAC methodology. This methodology consists of a set of baseline indicatorsrelating to the main regulatory and functional characteristics of the procurement system.The assessment aims at defining the major building blocs of the strategy and thedevelopment plan for improving the operation of the system, as well as establishing abenchmark for measuring progress made in the implementation of the reform action plan.

4.2 The above-mentioned indicators are grouped into four pillars, (Pillar I: Legislative andRegulatory Framework, Pillar II: Institutional Framework and Management Capacity,Pillar III: Procurement Operations and Market Practices, Pillar IV: Integrity andTransparency of the Public Procurement System). These indicators are also subdividedinto 54 sub-indicators whose assessment is based on precise criteria that determine scoresranging between 0 and 3. Score 3 represents full achievement of the stated standard.Score 2 indicates less than full achievement and calls for improvements. Score 1 meansthat substantial efforts are needed to achieve the standards set and 0 indicates failure tomeet or non-conformity of the system with the proposed standard. The scores achievedderive from an independent assessment by a consultant funded by the AfricanDevelopment Bank. However, many of these scores are identical to those assigned duringthe workshop on Procurement of November 5th, 2007. This workshop was attended by theNational Coordination and Monitoring Committee (CNCS) of procurement reform, theDirectorate of Public Procurement and donor agencies. Hence, many of the scoresmentioned were endorsed by the CNCS.

A. OVERALL ASSESSMENT OF SYSTEM

4.3 Overall, the public procurement system is slightly above average.83 However, it is worthnoting the wide disparities in scores by pillar (Figure 4.1).

83The team assigned 1.5 which corresponds to the average of the OECD/DAC scoring system.

14

Figure 4.1: Public ProcurementScore Aggregated by OECD/DAC Pillar

4.4 As illustrated in Figure 4.1, which indicates the aggregated scores for the 4 pillars, thestrongest component of the procurement system is the one relating to the regulatoryframework (Pillar I, average score of 2.2). Overall, the score for Pillar II - InstitutionalFramework and Management Capacity – is slightly above average (1.7). The operationalcapacities of the system (Pillar III, average score of 1.8) also present a challenge toimprove its efficiency. Lastly, the absence of a functional system of appeals and theweak resources devoted to the fight against corruption account for the low performanceof Pillar IV, which has the lowest score of 1.0.

4.5 The public procurement system has made remarkable strides, particularly against thebackground of the crisis affecting Côte d’Ivoire in recent years. However, furtherprogress needs to be made, and these are identified in the detailed assessment below.

4.6 With regard to the legislative and regulatory framework, remarkable progress has beenmade with the adoption of a new procurement code in 2005. However, these efforts mustbe continued to strengthen the transparency of the procedures by,

Extending the scope of application of the code to cover all the contracting authoritiesusing public resources.

Maximum Score

Country ScoreMaximum Score

Country Score

Pillar III: Procurement Operations and Market Practices

0

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15

Reviewing the unduly high procurement threshold of SODEs, used by some of them toconduct procurement below the said threshold without resorting to competitive biddingprocedures.

Making the use of standard documents that complement the regulatory frameworkmandatory.

Restricting the use of sole sourcing.

4.7 The institutional framework and management capacity improved through a set ofmechanisms84 that integrated the planning and monitoring of the execution of publicprocurement with public financial management. However, despite the fact that it has anormative and regulatory operational body (the structure in charge of procurement),together with information management tools on procurement, the institutional frameworkdoes not separate the control and regulatory functions (appeals and auditing).

4.8 Furthermore, there is no overall capacity building strategy for actors in the publicprocurement chain to ensure an effective and sustainable development. This capacitybuilding effort must take into account the need to establish a career development path ofprocurement specialists within the administration. Although considerable progress hasbeen made in the empowerment of procurement and control authorities,85 and thedevelopment of tools and mechanisms for documentation management, control andapproval procedures are still relatively centralized.

4.9 Mechanisms for dialogue with the private sector are not sufficient to enable putting inplace a legal framework conducive to promote the development of public/privatepartnership and the capacity of the sector to improve access to public tenders.

4.10 The internal control of tenders is carried out at the level of contracting authorities as wellas that of the Ministry of Economy and Finance, but the lack of external control andauditing of public procurement hampers the functionality of the control framework, thusmaking it difficult to effectively identify irregularities in compliance with standards,fraud and other corrupt practices. This deficit in control also reduces the capacity of theauthorities to make continued improvements to the system and the impact of progressnoted in Pillar I.

4.11 Despite the existence of a well-structured regulatory framework that reasonably followsinternational standards and functional operational mechanisms, weaknesses of Pillar IVand the functional conflicts noted in Pillar II (regulation and control) affect the principlesof transparency and efficiency of the procurement system thereby limiting the impact ofthe reforms implemented since 2004.

4.12 The assessment of the twelve baseline indicators of the OECD/DAC methodology,organized in the four pillars mentioned above, is represented in Figure 4.2 below. The

84The computerized public procurement management system (SIGMAP) was put in place and linked to the public

financial management system (SIGFIP).85

Focal points and bids opening and tender award committees have been put in place at the level of contractingauthorities; regional tender control directorates have also been created.

16

summary explanation of the score of each of the 12 indicators and relevant standards ispresented below.

Figure 4.2: Public ProcurementScore Aggregated by OECD/DAC Indicator

NB: In bold, the indicators performing above average (1.5).

B. DETAILED ASSESSMENT BY PILLAR

Pillar I - Legislative and Regulatory Framework

4.13 The existence of a clear and transparent procurement regulatory framework constitutesone of the foundations of a procurement system that helps achieve the objectives ofefficient governance in the use of public funds. This requirement is expressed throughthe baseline indicators in Pillar I of the OECD/DAC methodology. Pillar I includes twoindicators and covers all the relevant legal instruments, from the procurement code itselfto implementation and procedural regulations, as well as standard documents used.These indicators are themselves evaluated through sub-indicators or benchmarks that arescored separately.

4.14 The procurement regulatory framework of Côte d’Ivoire is characterized as follows:

Indicator 1: Public procurement legislative and regulatory framework achieves the agreedstandards and complies with applicable obligations

4.15 Côte d’Ivoire adopted a new Procurement Code by Decree No. 2005-110 of February24th, 2005 that marked a significant improvement in the public procurement system. Itimposes a number of obligations on contracting authorities designed to foster bettertransparency of the system, notably in the area of planning, equal treatment of bidders,advertisement, and enhanced objectivity of the qualification and evaluation operations.

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17

Open competitive bidding has become the main method of procurement, and the use ofother methods is governed by specific regulations. These arrangements mostly followinternational standards as well as those of the recent WAEMU Guideline No. 4 ofDecember 2005 that the Union highly recommends to member countries to include intheir national code not later than December 31, 2007.

4.16 However, the scope of application of the code must be more strictly defined since manytenders are not covered, either because they are signed directly between public entitiesthat fail to use procurement procedures or because the code itself contains waiverprocedures (notably contract signed by private entities, or delegation of public services).

4.17 It is also worth stressing cases of sole sourcing specified in the code that are not inconformity with international standards, including those of the WAEMU guidelines (forexample, the case of additional works whose amounts exceed those that could besubjected to a contract amendment). The rate of sole sourcing (higher than 30%) hasrisen above the limits set by good international practices.

4.18 Also, the disparity in thresholds for open competitive procurement (FCFA 120 millionfor state enterprises compared to FCFA 30 million for ministries) is not justified in viewof the fact that the threshold of tenders must solely depend on the economic environmentof the country and not the nature of the entity. Lastly, the regulatory framework does notdefine rules governing the participation of public enterprises, which could foster faircompetition. Thus, the BNEDT, the Public Works and Building Analysis Laboratory(Laboratoire d’Analyse du Bâtiment et des Travaux Publics) and other public structuresresort to a restricted form of tendering that limits competition.

4.19 Sub-indicator 1 - h) relating to the system of complaints achieved a low score (1) in viewof the failure to adopt dispute resolution regulatory mechanisms for the system proposedin the procurement code.

Indicator 2: Existence of Implementing Regulations and Documentation

4.20 Since February 2005, a number of implementing regulations were formulated to improvethe transparency and efficiency of the system, but some are still at the draft stage (notablydispute resolution). A Procedures Manual has also been proposed to the contractingauthorities.

4.21 Indeed, despite the existence of tender documents, they have not yet been adopted at theregulatory level; this is also true of terms of reference that either do not exist or precedethe adoption of the procurement code, thus accounting for the low score of sub-indicator2 – f).

4.22 Furthermore, a low score (1) was awarded to sub-indicator 2 - d) since the code does notmake provision for a specific chapter on procurement of intellectual services and is vagueon a number of points used as benchmarks or indicated in the WAEMU guidelines,particularly with regard to the different methods of bids evaluation, selection, opening,etc.

4.23 The table below presents a detailed assessment for Pillar 1.

18

Joint Assessment of OECD/DAC Baseline Indicators

Baseline Indicator Summary Explanation ScoreComments by

the Government

Pillar I – Legislative and Regulatory Framework

1) Public Procurement legislative andregulatory framework achieves theagreed standards and complies withapplicable obligations.

1-a) Scope of application and coverage oflegislative and regulatory framework

The legislative and regulatory body ofnorms complies with all the followingconditions:

(a) Is adequately recorded and organizedhierarchically (laws, decrees, regulations,and procedures) and precedence is clearlydefined.

(b) All the laws and regulations arepublished and easily accessible to thepublic at no cost.

(c) It covers goods, works and services(including consulting services) for allprocurement using national budget funds.

The national legislative and regulatorybody of norms meets criteria (a) and (b).

In contrast, compliance with (c) isinadequate.

At the organic level: The applicability ofthe code to some institutions (parliament)remains to be established in view of thefact that in practice, the PublicProcurement Directorate does not havecontrol over these institutions.

At the material level: It has been noted thatsome contracting authorities request theservices of public corporations (such as theBNEDT) without resorting to thecompetitive procedures stipulated in theregulations. It is also worth noting that thecode specifies (Article 1.1) thatagreements between state corporations begoverned by a decision from the Ministerin charge of public procurement, anarrangement likely to limit the scope ofapplication of the code. Moreover, theapplicability of the code to some contractssigned by private entities is likely to bechallenged on the basis of the relaxation ofthe rules granted by the Council ofMinisters decree (Article 1.2). Lastly, it isalso specified in the code that the lattercase is applicable to the Delegation ofPublic Services (DSP), except where thelatter are not subjected to a regulatoryregime.

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the Government

Interviews with some state enterprises(PETROCI, SOPIE) as well as withAGEROUTE indicate that these entitiesfollow divergent procurement practicesand interpret the application thresholdregulation differently; thus PETROCI, andthis is not the case of SOPIE, resorts toopen competitive bidding as soon as theregulatory threshold of FCFA 30 million isexceeded. It was not possible to verify theprocedures used by some institutionscreated to manage special funds (notablyin the coffee-cocoa sector). Since the codeconsiders that all public legal entities aregoverned by it, there is a need to determinewhether the concept of public organizationas defined by the WAEMU Guidelineindeed applies to these variousorganizations and funds.

The alignment of the national system oflegislative and regulatory norms to theOECD standards relating to this indicatorshould also help meet therecommendations of WAEMU guidelinecovering the definition of legislativestandards, in accordance with thecountry’s obligations. To date, thenational code has introduced too manyexemption regimes passed throughregulatory means.

1-b) Procurement Methods

The legal framework meets all thefollowing conditions:

(a) Allowable procurement methodsauthorized are established unambiguouslyat an appropriate hierarchical level, alongwith the associated conditions underwhich each method may be used,including a requirement for approval byan official that is held accountable.

(b) Competitive procurement is thedefault method of public procurement.

(c) Fractioning of contracts to limitcompetition is prohibited.

(d) Appropriate standards for internationalcompetitive tendering are specified and

Procurement by sole sourcing methods arenot void of ambiguity (Articles 31 (2), (5),(6) and (8), and this accounts for the scorein the margin. Furthermore, it is worthnoting that the cases of appeal and theconditions of authorization for solesourcing do not meet the standards set byWAEMU Guideline No. 4/2005 (Article38). Indeed, cases of appeal are muchmore numerous and in some cases it isdifficult to justify them (for example:additional works whose amount is higherthan those that could require anamendment of the contract, the only sourceof storage, etc.). The institutionalmechanism put in place restricts thepowers entrusted to the control entitiessince authorization to use sole sourcingprocedure is given by another entity. Thisprovision is in contradiction with the

2

20


the Government

are consistent with internationalstandards.

principles laid down by the WAEMUGuideline, which aims at strengthening thecontrol function and not diluting it. Theconformity of this provision with theWAEMU Guideline (Article 38) is inquestion.

Another problem related to condition (b)must be noted, namely the difficulty facedby some contracting authorities inchoosing procurement methods; thesechoices are often influenced by the levelsof threshold; however, the latter may differdepending on the nature of the contractingauthorities (notably state companies or acoffee-cocoa fund); adoption ofexcessively high thresholds could thusnullify condition (b); furthermore,divergences in approach were noted in thechoice of procurement methods dependingon the computation of thresholds inrelation to the budget line items subject totenders, notably for the budgets ofdecentralized communities (apparentlyalso between the Public ProcurementDirectorate and the Treasury), requiring aclarification of the interpretation of thebudgetary nomenclature.

The analysis of the Manual of Proceduresused by some contracting authorities(SOPIE and AGEROUTE) indicates thatthe latter fall under the provisions of thecurrent code. However, variations inprocurement thresholds for opencompetitive bidding (FCFA 120 millioncompared to FCFA 30 million forministries) are not justified given that thethreshold of competitive bidding shoulddepend solely on the economicenvironment of the country and not thenature of the entity involved.

It is worth notingthat such choicesdo not depend onthe thresholdsbut rather on thetype of contract(works, goods orservices).Similarly, in factthere is nodivergence orinterpretation inthe choice ofprocurementmethod; therecould bedivergence ofapproach withregard to thecomputation ofthe threshold,notably, for thebudget ofdecentralizedcommunities inview of thespecificity oftheir budgetarynomenclature.

1-c) Advertising rules and time limits

The legal framework meets the followingconditions:

The legal framework fully meets theconditions set. This assessment is alsoconfirmed by the proposal of the CNCS(National Coordination and Monitoring

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the Government

(a) Requires that procurementopportunities other than sole source orprice quotations be publicly advertised.

(b) Publication of opportunities providessufficient time, consistent with themethod, nature and complexity ofprocurement for potential bidders toobtain documents and respond to theadvertisement. Such timeframes areextended when international competitionis sought.

(c) publication of open tenders ismandated in at least a newspaper ofnational circulation or in a unique Internetofficial website where all publicprocurement opportunities are posted thatis easily accessible.

(d) Content of publication includessufficient information to enable potentialbidders to determine their ability andinterest in bidding.

Committee).

1-d) Rules on participation


(a) Establishes that participation of anycontractor or supplier or group ofsuppliers or contractors is based onqualification or in accordance withinternational agreements, requires the useof pass/fail basis for determiningqualifications to extent possible: limitsdomestic price preferential, if allowed, toa reasonable amount (for example, 15% orless); and requires the justification for setasides that limit competition.

(b) Ensures that registration, if required,does not constitute a barrier to tenders anddoes not require mandatory associationwith other firms.

(c) Provision for exclusions for criminalor corrupt activities, administrativedebarment under the law subject to dueprocess or prohibition from commercialrelations.

The regulations meet criteria (a) and (b),(Article 11,15,16,20 of Procurement Code)as well as one of the other conditions(namely, condition (c) (Article 12 of theCode).

However, the regulatory framework doesnot define rules for the participation ofpublic enterprises that are likely to fosterfair competition. Thus, the BNEDT andthe LBTP resort to reserved procurementthat limits competition.

Furthermore, some contracting authoritiesmade references to the practice of pre-financing in some tenders (securityservices) that are extended even to othercategories of services; this practice is notregulated and even where it is related to aparticular context, it is likely to affectcompetition, more so in a system wherecompliance with payment time limits isnot guaranteed, as acknowledged by theDGBF in its comments.

2

The pre-financingmentioned is not

22


the Government

(d) Establishes rules for the participationof government owned enterprises thatpromote fair competition.

It is worth noting that provisions of Article15 of the Public Procurement Code do notfollow those of the WAEMU Guidelinerelating to community preference. Theaforementioned Guideline indeed specifiesthat Member States should ensure that theparticipation of a public organization in apublic procurement process does not resultin unfair competition vis-à-vis the privatebidders (Article 2). The code shouldreflect this obligation.

peculiar to asingle categoryof services; itdoes not result inprice increasesbut ratherconstitutes aguarantee of theproper executionof the contractand over a period(first quarter ofthe fiscal year) totake into accountuncertaintiesabout paymentsduring theperiod.

This amount is afixed rate knownto all the bidders.

The preferenceindicated inArticle 15 of theProcurementCode does notconcern publicorganizations.

23


the Government

1-e) Tender documentation and technicalspecifications


(a) Establishes the minimum content ofthe tender documents and requires that thecontent is relevant and sufficient fortenderers to be able to respond to therequirement.

(b) Requires the use of neutralspecifications citing internationalstandards when possible.

(c) Requires recognition of standardswhich are equivalent when neutralspecifications are not available.

The legal framework substantially fulfillsthe conditions outlined in this indicator(Article 17 of the Procurement Code).This assessment is also in line with theCNCS proposal. The Public ProcurementDirectorate has prepared standardreference documents reflecting sub-indicator (a).

The legal framework would be morecomplete if the standard documentsproduced by the DMP were included in theframework as a rule.

3

1-f) Tender evaluation and award criteria

The legal framework mandates that:

(a) The evaluation criteria are relevant tothe decision and precisely specified inadvance in the tender documents so thatthe award decision is made solely on thebasis of the criteria stated in the tenderdocuments.

(b) Criteria not evaluated in monetaryterms are, evaluated on a pass/fail basis tothe extent possible.

(c) The evaluation of proposals forconsulting gives adequate importance tothe quality and regulates how price andquality are considered.

(d) During the evaluation period,information relating to the examination,clarification and evaluation of tenders isnot disclosed to the participants or toothers not involved officially in theevaluation process.

The legal framework meets the conditionsset out in the sub-indicator. Thisassessment also confirms the CNCSproposal.

However, it is worth pointing out that themethod of evaluation of consultants is onlyindicated in the bidding documents, whichare not yet part of the regulatoryframework. It must be noted that thehigher score given here takes into accountthe lower score assigned to the BDs (sub-indicator 2 (b).

3

1-g) Submission, receipt and opening oftenders

The legal framework provides for thefollowing conditions:

(a) Public opening of tenders in a defined

The legal framework includes theconditions outlined in this indicator(Article 34.2,34.5 of the Code), with theexception of condition (c) which is notexplicitly regulated in the code.

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the Government

and regulated proceeding, immediatelyfollowing the closing date for bidsubmission.

(b) Records of proceedings for bidopenings are retained and available forreview.

(c) Security and confidentiality of bids ismaintained prior to bid opening anddisclosure of specific sensitiveinformation during debriefing isprohibited.

(d) The modality of submitting tendersand receipts by the government is welldefined to avoid unnecessary rejection oftenders.

Furthermore, the private sector hasmentioned cases of rejection during theopening of bids involving failure to supplytax certificates, which is not in accordancewith the provisions of Article 34-2 of theprocurement code. However, the principleaccording to which the bid of a biddermust be complete and meet this type ofobligation is in line with the code (Article1.2).

Lastly, it is worth noting that theprocurement code does not meet therequirements of the WAEMU Guidelineon the publication of the bid openingreport.

1-h) - Complaints

The legal framework provides for thefollowing:

(a) The right to review for participants ina procurement process.

(b) Provisions to respond to a request forreview at the procuring agency level withadministrative review by another bodyindependent from the procuring agencythat has the authority to grant remediesand includes the right for judicial review.

(c) Establishes the matters that are subjectto review.

(d) Establishes timeframes for issuance ofdecisions by the procuring agency and theadministrative review body.

The legal framework provides for (a). Incontrast, the Code does provide for (c) and(d). The relevant implementing orders arestill at the draft stage.

The contents are not defined and this maylead to wide latitude of action, such as awide power of interpretation by thecommittees.

Condition (b) will only be effectively metwhen the regulatory measures on theimplementation of the review process areeffective, which has not been the case twoand a half years following the entry intoforce of the code.

The institution in charge of dealing withcomplaints is not independent eitherbecause its decision is subject to approvalby the Minister in charge of Procurement(Article 124.5 of the Code) who isresponsible, through the DMP, for theauditing of public tenders, a structure thatcould be involved in the action that led tothe complaint.

1

2) Existence of ImplementingRegulations and Documentation

2-a) – Implementing regulations thatprovide defined processes and procedures

There are regulations that complement andspecify the provisions of the procurement

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not included in higher-level legislation.

There are regulations that supplement anddetail the provisions of the procurementlaw that meet the following requirements:

(a) They are clear, comprehensive andconsolidated as a set of regulationsavailable in a single and accessible place.

(b) They are updated regularly.

(c) The responsibility for maintenance isdefined.

(d) They are clear and detailed.

law and which meet the conditions listedin the margin. However, some are still atthe draft stage. This assessment is sharedby the CNCS.

2-b) - Model tender documents for goods,works and services

(a) There are model invitation and tenderdocuments provided for use for a widerange of goods, works and servicesprocured by government organizations.

(b) There is a standard mandatory set ofclauses or templates that are reflective ofthe legal framework for use in documentsprepared for competitive tendering.

(c) The documents are kept up to datewith responsibility for preparation andupdating clearly assigned.

Model documents and a minimum ofprovisions or models are available, but theuse of the latter is neither obligatory norregulatory.

Some local governments complain aboutthis situation by noting the lack ofharmonization of model documents thatare modified from one consultation to theother, evaluation reports, etc.

2

2-c) – Procedures for pre-qualification

Procedures exist that define pre-qualification which:

(a) Provide for limitations on the contentof pre-qualification criteria that are basedon needs of the specific procurement.

(b) specify the use of pass/fail forapplication of qualification criteria.

(c) Provide guidance on when to apply apre-qualification procedure.

Procedures governing pre-qualificationthat meet all the conditions indicated inmargin exist. 3

2-d) - Procedures suitable for contractingof services or other requirements in whichtechnical capacity is a key criterion.

The legal framework and its

The code does not stipulate a specificchapter on tenders for intellectual services,but deals with such tenders as part ofexemptions to the general regulations

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implementing regulations provide for thefollowing:

(a) Conditions under which selectionbased exclusively on technical capacity isappropriate and when price and qualityconsiderations are appropriate.

(b) Clear procedures and methodologiesfor assessment of technical capacity andfor combining price and technicalcapacity under different circumstances.

(such as competitive bidding; this does notmake for easy comprehension orinterpretation and can lead to someconfusion. The code is ambiguous on anumber of points used as benchmarkstandards or indicated in the WAEMUGuideline; particularly with regard tovarious evaluation selection methods,opening conditions, etc.).

The above-mentioned provisions areoutlined in a special chapter in theWAEMU guideline.

2-e) – User’s guide or manual forcontracting entities

(a) There is a unique procurement manualdetailing all procedures for the correctadministration of procurement regulationsand laws.

(b) The manual is regularly updated.

(c) The responsibility for maintenance ofthe manual is clearly established.

The legal framework meets the criteria setout in this indicator. Indeed, bookletsproduced by the DMP correspond to themanual required.

3

2-f) - General Conditions of Contract(GCC) for public sector contractscovering goods, works and services,consistent with national requirements and,when applicable, internationalrequirements.

Both of the following apply:

(a) There are GCCs for the most commontypes of contracts and their use ismandatory.

(b) The content of the GCC is generallyconsistent with international acceptedpractice.

The conditions given in the margin havenot been fully met, in the absence ofGCCs, for some types of contracts. Theavailable GCCs on the procurement ofworks date from 1986, preceding the code.However, new GCCs are in preparation.This is also the opinion of the CNCS.

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Pillar II - Institutional Framework and Management Capacity

4.24 Pillar II assesses the operationality and efficiency of the regulatory mechanism,particularly at the institutional level. The 3 indicators assessed here relate to institutionsand management systems considered to be integral parts of good governance of the

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country’s public sector. Indicator 3 relates to the integration of procurement into thepublic financial management system. Indicator 4 determines whether there is aregulatory body, its mission and powers and Indicator 5 assesses the extent to which thecountry has evaluation and capacity building systems and systems for measuring thequality of procurement.

4.25 The outcomes of Pillar II evaluation are summarized as follows:

Indicator 3: The public procurement system is mainstreamed and well integrated into thepublic sector governance system

4.26 A number of measures were taken or put in place to ensure a better integration ofprocurement into the public expenditure chain (procurement plan, availability of credits,etc.). A new system of information collection and processing (Public ProcurementManagement System, SIGMAP), linked to the Public Financial Management System(SIGFIP) has been established since 2006 to ensure greater rigor in the planning andmanagement of the procurement process and execution of tenders. Lastly, improvementswere noted in terms of access to information on public procurement, as a result of theinnovative system of publication of the Journal of Public Procurement, on the basis ofappropriate software based on data directly generated and transferred by the SIGMAP,and the setting up of a website by the Public Procurement Directorate.

4.27 However, linkages with budgetary planning are still inadequate; the General Directorateof Budget highlighted the absence, at the level of some contracting authorities, ofprocurement plans prepared with the requisite rigor both at the technical level and interms of cost.

4.28 Furthermore, delays in the payment of invoices were frequent. This affects the budgetarymanagement left to contracting authorities often without the necessary capacity. Theseobservations account for the low scores assigned to sub-indicators 3 - a) and b).

Indicator 4: The country has a functional normative/regulatory body

4.29 One of the major problems affecting the credibility of the procurement system is the lackof separation of the public procurement control and regulatory functions performed bythe public procurement entity. The separation of functions does not correspond to goodinternational practices, including those defined by the WAEMU Guideline, thusaccounting for the very low score (0) of sub-indicator 4 - d).

Indicator 5: Existence of Institutional Development Capacity

4.30 There is an integrated system of data collection and processing linked to the DMPwebsite, but this system could be improved and access to information is limited. Also, itis worth noting the relative high cost of the Journal of Public Procurement.

4.31 Lastly, it is worth stressing, despite efforts made in terms of training of stakeholders, thelack of an overall capacity building strategy at national level and sustainable procurementservices; this weakness, which has also resulted in the unduly high mobility of publicservants, is related to the absence of a protective status for procurement units in theadministration as well as procurement specialists. It is also worth noting that the system

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does not provide for quality assurance mechanisms or staff performance evaluation, thusaccounting for the very low score (0) of the sub-indicator 5 – d).

4.32 The Table below gives a detailed evaluation for Pillar II.

Joint Evaluation of OECD/DAC Baseline Indicators

Baseline Indicator Summary Explanation ScoreComments by the

Government

Pillar II. Institutional Framework and Management Capacity

3) The public procurement system ismainstreamed and well incorporatedinto the public sector governancesystem

3-a) – Procurement planning andassociated expenditures are part of thebudget formulation process andcontribute to multi-year planning

There is a regular planning exerciseinstituted by law or regulation that:

starts with the preparation of multi-year plans for the governmentagencies, from which annualoperating plans are derived.

followed by annual procurementplans and estimation of theassociated expenditures.

and culminates in the annual budgetformulation.

Procurement plans are prepared insupport of the budget planning andpreparation process.

Linkages with budgetary planning arestill inadequate, even if it is requiredthat the plans necessarily correspond toavailable budget prior to thecommitment of expenditures (Article 4of the Code).

The standard aimed at should becompared to the reality of budgetarypreparation; in this regard, the GeneralDirectorate of Budget indicated thatmany contracting authorities did notprepare their procurement plans with therequired rigor, both technically and interms of cost, despite the provisions ofArticle 2.1 of the code relating to thedetermination of needs, to the extentthat in-depth studies were conductedonly during budget allocation.

In contrast, plans necessarily correspondto available budget prior to thecommitment of expenditures.

Lastly, it is worth noting that pursuantto the provisions of Article 20 of theorganic budget law of December 31st,1959, “commitments made for thesecontracts or agreements (in case ofannual payments) pre-empt the opening,in the following budgets of estimatedapplications equal to the projectedpayments.”

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3-b) – Budget law and financialprocedures support timely procurement,contract execution and payment.

(a) Budget funds are committed orappropriated within a week from theaward of the contract to cover the fullamount of the contract (or amountneeded to cover the portion of thecontract to be performed within thebudget period).

(b) There are published businessstandards for processing of invoices bythe government agencies that meetobligations for timely payment stated inthe contract.

(c) Payments are authorized within fourweeks following approval of invoices ormonthly certifications for progresspayments.

Condition (a) is met. It is worth notingthe effects of the computerized systemsput in place (SIGFIP and SIGMAP); incontrast, conditions (b) and (c) have notbeen met in the absence of publicationof commercial standards; time limits forthe intervention of commitment officersare not fixed in a regulatory manner;payment delays are widespread. Thisassessment reflects the position of theCNCS.

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3-c) – No initiation of procurementactions without existing budgetappropriations

The following measures should be inplace:

(a) The law requires certification of theavailability of funds before solicitationof tenders takes place.

(b) There is a system in place (e.g.paper or electronic interface betweenthe financial management andprocurement systems) that ensuresenforcement of the law.

The system meets conditions (a) and (b)indicated in the margin. It is thereference to the budget law that must bementioned here, as well as theinstruments regulating the SIGFIP.

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3-d) - Systematic completion reports areprepared for certification of budgetexecution and for reconciliation ofdelivery with budget programming.

The procurement system is sufficientlyintegrated with the financial andbudgetary management systems toprovide information on the completionof all major tenders aimed at releasingthe remaining funds in order to allotthem for other purposes during thefiscal year.

However, the reports are not sufficientlydocumented on elements that canfacilitate the comparison of services

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rendered with the budget programming(absence of aggregated table); this lackof information stems from the fact thatthe budget is put in place late(June/July) and major operationsupstream are executed without usingnormal procurement procedures and areonly regularized later. This assessmentreflects the position of the CNCS.

4) The country has a functionalnormative/regulatory body

4-a) – The status and basis for thenormative/regulatory body is covered inthe legislative and regulatoryframework.

There is a normative or regulatorybody, or the functions are clearlyassigned to various units within thegovernment, but it is not established aspart of the legal and regulatoryframework in unambiguous waywithout gaps or overlaps.

There is a structure in charge of publicprocurement that fulfills this role(Article 70 and following of the Code);however, this structure performs boththe functions of control and ofregulation; this situation is notcompatible with the provisions ofArticle 3 of the second Guideline (No.5) of the WAEMU. Moreover, this isnot an independentnormative/regulatory body as specifiedin the benchmark indicator; functionsentrusted to this entity are therefore notin conformity with the legal andregulatory framework as required by theinternational obligations of Côted’Ivoire.

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4-b) – The body has a defined set ofresponsibilities that include, but are notlimited to the following:

providing advice to contractingentities;

drafting amendments to thelegislative and regulatoryframework and implementingregulations;

monitoring public procurement; providing procurement

information; managing statistical databases; reporting on procurement to other

part of government; developing and supporting

implementation of initiatives forimprovements of the pubicprocurement system; and

It is worth noting that the eightfunctions mentioned in the sub-indicatorare clearly assigned to one or severalorganizations without creating avacuum or overlaps in the performanceof duties (Article 70 and following ofthe Code).

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providing implementation tools anddocuments to support training andcapacity development ofimplementing staff.

4-c) – The body’s organization,funding, staffing and level ofindependence and authority (formalpower) to exercise its duties should besufficient and consistent with theresponsibilities.

It is worth noting that the Directorate ofRegulation is not fully independent interms of regulation of the system; manyconventional regulatory functions(policy definition, etc.) cannot becarried out effectively in an independentmanner in view of the positioning of theDirectorate of Public Procurement, ofwhich it depends, at the Ministry ofEconomy and Finance.

The result is that the provisions of theWAEMU guideline are not compliedwith.

2

4-d) – The responsibilities should alsoprovide for separation and clarify so asto avoid conflict of interest and directinvolvement in the execution ofprocurement transactions.

The necessary separation ofresponsibilities and tasks (particularly,the control and regulation functions)required by this indicator does notappear to have been met in the currentcontext. Indeed, it is worth noting thatthe DMP acts as a member of some bidaward committees, while at the sametime having the capacity ofsubsequently issuing non-objectionnotices.

In the view of some local governments,this situation results in administrativebottlenecks insofar as the DMPrepresentative tends to refer it to hissuperiors during deliberations, knowingthat the latter will ultimately have toissue an approval on the tender.

The CNCS also noted that this conditionwas not met.

0

5. Existence of institutionaldevelopment capacity

5-a) – The country has a system forcollecting and disseminatingprocurement information includingtender invitations, requests forproposals and contract awardinformation.

There is an integrated system presentingthe characteristics described thatprovides updated information on themajority of contracts at the level of thecentral administration, but access tosuch information is limited. The privatesector has been complaining about the

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high cost of the Public ProcurementJournal (FCFA 5,000 per publication,three times per month). However, theincomplete nature of the informationprovided, particularly with regard tocomplaints was noted. It also appearsthat only invitation for bids notices areadvertised systematically in the PublicProcurement Journal. This is not thecase of invitations for the expression ofinterest (the DMP indicates that it is notalways requested on time).

It is worth noting thescarcity of invitationsfor expression ofinterest compared toinvitation for bids.This is therefore nota deliberate decisionto fail to publish thelatter. Besides, thePublic ProcurementDirectorate almostalways receivescomplaints late.

5-b) – The country has systems andprocedures for collecting andmonitoring national procurementstatistics.

(a) There is a system in operation fordata collection.

(b) The system collects data onprocurement by method used, durationof different stages of procurementcycle, awards of contracts, unit pricesfor most common types of goods andservices and other information thatallows for analysis of trends, levels ofparticipation, efficiency and economyof the purchases and compliance withrequirements.

(c) Reliability of the information is high(verified by audits).

(d) Analysis of information is routinelycarried out, published and fed back intothe system.

Indeed, the country has a system thatmeets criterion (a) as well as the twoother conditions.

However, the system does not includethe prices of goods and services;furthermore, the assessor noted that theSIGMAP system does not provide anyindication on sole sourcing contracts,and where these are justified, the auditshave not yet been carried out.

2

5-c) – A sustainable strategy andtraining capacity exists to providetraining, advice and assistance todevelop the capacity of the governmentand private sector participants tounderstand the rules and regulations andhow they should be applied.

There is a training and capacity

The current program is not sufficient tomeet the needs of the system. Thisview is shared by the CNCS.

The country has not yet adopted anoverall capacity development strategy atnational level.

Furthermore, the absence of the career

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building strategy that provides for:

(a) Substantive permanent trainingprograms of suitable quality and contentfor the needs of the system;

(b) Evaluation and periodic adjustmentbased on feedback and need;

(c) Advisory service or help desk toabsolve questions by procuring entities,suppliers, contractors and the public.

development path for procurementspecialists and the unduly high mobilityof the staff resulting from this do notguarantee the maintenance of capacitiesin the procurement services. Thisconstitutes one of the major weaknessesof the system.

5-d) – Quality control standards aredisseminated and used to evaluate staffperformance of the workforce andaddress capacity development issues.

(a) Provide quality assurance standardsand a monitoring system forprocurement processes and products.

(b) Provide for a staff performancesystem based on outcomes andprofessional behaviors.

(c) Ensure that operational audits arecarried out to monitor compliance withquality assurance standards.

It is worth noting that the system doesnot provide for quality assurancemechanisms or the assessment of theperformance of the staff. This view isshared by the CNCS.

0

Pillar III – Procurement Operations and Market Practices

4.33 Pillar III assesses the operational effectiveness and efficiency of the procurement systemat the level of contracting authorities. It also examines the operation of the publicprocurement market itself as one of the means of assessing the quality of the system.Pillar III comprises three indicators. Indicator 6 assesses the effectiveness of thecountry’s procurement operations. Indicator 7 assesses the functionality of the publicprocurement market. Indicator 8 deals with measures focused on procurementadministration and resolution of disputes.

4.34 The findings of Pillar III are summarized as follows:

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Indicator 6: The country’s procurement operations and practices are efficient

4.35 The level of competence of officials at procurement entities is satisfactory but the overallstandard of the staff assigned to procurement is doubtful, in view of the inadequatetraining and capacity development program. Training programs for the private sector arevirtually non-existent, thus accounting for the low score of the first three sub-indicators.

4.36 However, efforts have been made to achieve some degree of deconcentration/decentralization, notably with regard to control functions by creating seven regionalprocurement control directorates, but the operational effectiveness of these structuresneeds to be boosted.

4.37 Similarly, it is worth noting, following the review by the SIGMAP system of the year2006, a high concentration of DMP control activities on high volume contracts, indicatingthe positive effects of decentralization and accountability of the contracting authorities.

Indicator 7: Functionality of public procurement market

4.38 The private sector is affected by the non-existence of a capacity building program andpolicy for SMEs. Similarly, it is worth noting that public-private partnership mechanismshave not been defined within a pre-established and functional legal framework.

4.39 While the private sector is relatively efficient, several constraints hinder its access topublic tendering, (under evaluation of price benchmarks, unfair competition related to theproblems of social dumping), problems of access to guarantees, deadlines for submittingtax certificates, absence of advances even in case of provision of a guarantee, unduly longpayment delays.

Indicator 8: Existence of contract administration and dispute resolution provisions

4.40 With regard to the relative availability of contract administration and dispute resolution, anumber of the provisions of the code are in line with the WAEMU guideline. However,the system is hampered by a deficit in procurement administration capacity; furthermore,Côte d’Ivoire also has an adequate legal framework to settle disputes, notably with regardto arbitration, but it is worth noting that although the courts are chosen to settle localdisputes, few are referred to them. This system does not facilitate the resolution ofdisputes related to the non-recovery of Government debts.

4.41 The Table below provides a detailed assessment for Pillar III.



Government

Pillar III. Procurement Operations and Market Practices

6. The Country’s operations andpractices are efficient

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Government

6-a) – The level of procurementcompetence among government officialswithin the entity is consistent with theirprocurement responsibilities.

(a) There are defined skill and knowledgeprofiles for specialized procurement jobs.

(b) There is systematic matching of skillsagainst requirements for competitiverecruitment.

(c) Staff required to undertakeprocurement activities on an ad-hoc basishave the knowledge they need toundertake the activity or have access toprofessional staff that can provide thisknowledge.

The assessment, which reflects theposition of the CNCS, indicates thatthe arrangement only meets criterion(a) mentioned in the margin. Theother conditions have not been met inview of the inadequate training andcapacity building programs.

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6-b) – The procurement training andinformation programs for governmentofficials and for private sector participantsare consistent with demand.

(a) Training programs’ design is based ona skills gap inventory to match the needsof the system.

(b) Information and training programs onpublic procurement for private sector areoffered regularly, either by theGovernment or by private institutions.

(c) The waiting time to get into a course(for public or private sector participants)is reasonable, say one or two terms).

The assessment, which reflects theposition of the CNCS, indicates thattraining programs exist, but they areinsufficient, notably with regard to theprivate sector.

1

6-c) – There are established norms for thesafekeeping of records and documentsrelated to transactions and contractmanagement.

(a) The legal and regulatory frameworkestablishes a list of procurement recordsthat must be kept at the operational leveland what is available for publicinspection, including conditions foraccess.

(b) The record should include:

The assessment, which reflects theposition of the CNCS, indicates thatthe procurement system meetscriterion (a), but not the remainingcriteria notably, c) and d). Moreover,the consultation by the public ofdocuments is not governed by anyregulation. The code should providefor an arrangement that deals with thedissemination of information to thepublic on procurement and make it aright for the all stakeholders.

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public notices of biddingopportunities

bidding documents and addenda bid opening records bid evaluation reports formal appeals by bidders and

outcomes final signed contract documents and

addenda and amendments claims and dispute resolutions final payments disbursement data (as required by

the country’s financial managementsystem).

(c) There is a document retention policythat is compatible with the statute oflimitations in the country for investigatingand persecuting cases of fraud andcorruption and with the audit cycles.

(d) There are established securityprotocols to protect records, eitherphysical or electronic.

6-d) - There are provisions for delegatingauthority to others who have the capacityto exercise responsibilities.

(a) Delegation of decision-makingauthority is decentralized to the lowestcompetent levels consistent with the risksassociated and the monetary sumsinvolved.

(b) Delegation is regulated by law.

(c) Accountability for decisions isprecisely defined.

The assessment, which reflects theposition of the CNCS, indicates thatdelegation is not adequately regulated.However, the system still concentratesdecisions upstream at the level of someentities, notably ministries, therebycreating bottlenecks and delays.Delegation is provided for by the Code(decentralization and deconcentrationsystem) and takes into accountfiduciary risks. Greater accountabilityof the actors is necessary; this must bepursued with existing capacitiesdeemed to be relatively weak.

2

7. Functionality of the PublicProcurement Market

7-a) - There are effective mechanisms forpartnerships between the public andprivate sectors.

(a) Government encourages open dialoguewith the private sector and has establishedand formal mechanisms for open dialoguethrough associations or other means.

(b) The Government has programs to helpbuild capacity among private companies,including for small businesses and

The assessment, which reflects theposition of the CNCS, indicates thatthe system only takes into accountcriterion (a) mentioned in the margin.

It is worth noting the non-existence ofcapacity building programs for SMEs.

The private sector (SME/SMI)indicated the absence of a regulatory

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training to help new entities into thepublic procurement marketplace.

(c) The Government encouragespublic/private partnerships and themechanisms are well established in thelegal framework to make possible sucharrangements.

framework to promote its activities(e.g. Small Business Act - SBAestablished in the USA).

Moreover, the public/privatepartnerships mechanisms have notbeen defined in a well-establishedlegal framework.

7-b) – Private sector institutions are wellorganized and able to facilitate access tothe market.

The private sector is competitive, wellorganized and able to participate in thecompetition for public procurementcontracts.

The assessment, which reflects theposition of the CNCS, indicates thatthe private sector is relativelydynamic, but competition for securingmajor contracts is limited to arelatively small number of contractors.However, for example in theconstruction sector, the private sectornoted the absence of a referencecontractor (such as those in Senegal,Benin and Burkina Faso).

To ensure a significant revival ofbusiness, it would be worth examiningthe capacities of the private sector torespond to demand.

2

7-c) - There are no major systemicconstraints (e.g. inadequate access tocredit, contracting practices, etc.)inhibiting the private sector’s capacity toaccess the procurement market.

Several constraints hinder access bythe private sector to publicprocurement. This affects the level ofcompetition (under estimation ofreference price, a database is beingdeveloped and will be published aftercompletion) leads to unfaircompetition related to social dumping(the issue of abnormally low bids isnot considered by the code), affectsaccess to guarantees, deadline forissuance of tax certificates,competition by physical persons orlegal entities set up for the occasion,little allotment to enable access bySMEs to tenders, no penalties forpayment delay, no price revision, noadvance even in case of provision ofguarantee, or instructions tocontractors prior to payment ofadvance, de facto pre-financing

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system, payment time limits. The twolatter points have been confirmed bythe CGECI.

7-d) - There are clear and transparentrules for determining the need to resort tointernational or national procurement,based on a sound assessment ofcommercial and development interest.

(a) The country has clear rules fordetermining the need to resort tointernational or national procurement.

(b) With regard to the participation offoreign companies, the country’s rules arein accordance with good practices and donot create any barriers (see Annex 1 forgeneral guidelines).

(c) The country’s rules enable theparticipation of any interested enterprise,even where international competition isnot involved, in accordance with thecountry’s legal obligations.

The assessment, which reflects theposition of the CNCS, indicates that allthe conditions mentioned in the marginhave been met.

3

8. Existence of contract administrationand dispute resolution provisions

8-a) – Procedures are clearly defined forundertaking contract administrationresponsibilities that include inspection andacceptance procedures, quality controlprocedures, and methods to review andissue contract amendments in a timelymanner.

(a) Procedures for acceptance of finalproducts and for issuance of contractamendments are part of thelegal/regulatory framework or areincorporated as standard clauses incontracts.

(b) Clauses are generally consistent withinternationally accepted practices (see IFIstandard contracts for good practiceexamples).

(c) Quality control (QC) procedures forgoods are well defined in the modelcontracts/documents or in the regulations.QC is carried out by competent officers,

The assessment, which reflects theposition of the CNCS, indicates that allthe conditions mentioned in the marginhave been met, with the exception ofcondition (e).

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inspection firms or specialized testingfacilities.

(d) Supervision of civil works is carriedout by independent engineering firms orqualified government supervisors andinspectors.

(e) Final payments are processedpromptly as stipulated in the contract.

8-b) – Contracts include disputeresolution procedures that provide for anefficient and fair process to resolvedisputes arising during the performance ofthe contract.

(a) There is an arbitration law in thecountry.

(b) The law is consistent with generallyaccepted practices for neutrality ofarbitrators, due process, expediency andenforceability.

(c) The country accepts as a matter ofcourse international arbitration forinternational competitive bidding.

(d) Provisions for alternative disputeresolution (ADR) are standard incontracts.

(e) ADR provisions conform tointernational standard wording (may referto IFI standard bidding documents forsample of good international practices).

The assessment indicates that thesystem fulfills all the rules (a) to (e)mentioned in the margin (OHADAUniform Act on arbitration; Law 93-671 of 9 August 1993 on arbitration).

The assessment reflects the position ofthe CNCS expressed at the workingsession between the joint mission andthe CNCS.

Contractual arrangements are referredto the courts to settle disputesconcerning the performance of publicprocurement.

3

8-c) – Procedures exist to enforce theoutcome of the dispute resolution process.

(a) The country is a member of the NewYork Convention on enforcement ofinternational arbitration awards.

(b) The country has procedures to enablethe winner in a dispute to seekenforcement of the outcome by going tothe courts.

(c) The country has a process to monitorthis area of contract administration and toaddress performance issues.

The assessment, which reflects theposition of the CNCS, indicates thatthe country has only met two of theconditions indicated in margin (a) and(b). Issues relating to tenderregulations remain a major problem;the private sector does not have muchconfidence in the legal system andfears retaliation in case of lawsuitagainst the Government. The TreasurySolicitor confirmed the virtual absenceof disputes relating to publicprocurement.

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Pillar IV - Integrity and Transparency of the Public Procurement System

4.42 Pillar IV covers four indicators for measuring the degree of integrity of the system,quality of controls to support its implementation in line with the regulatory frameworkand the effectiveness of the anti-corruption mechanism. Indicator 9 assesses theefficiency of the control and audit systems. The indicator 10 focuses on the mechanismfor settling disputes. Indicator 11 relates to the quality, access by the public toinformation on the procurement system, while Indicator 12 evaluates the nature andscope of the anti-corruption measures adopted.

4.43 The outcomes of the assessment of Pillar IV are summarized as follows:

Indicator 9: The country has effective control and audit systems

4.44 There are laws and regulations that govern the internal and external control of publicexpenditure, particularly that of public procurement. Internal control is mainly theresponsibility of the Directorate of Public Procurement and deconcentrated ordecentralized structures of contracting authorities (focal points, bids opening and awardcommission that undertakes a pre-audit). However, ex-post internal control (DMP forcontracting authorities) and external control (Chamber of Accounts and IGE) are noteffective.

4.45 The control function carried out by the structure in charge of public procurement hasbeen weakened by the role devolved to the Public Procurement Consultative Commission(that it chairs) and to the Minister in charge of public procurement as part of the controlof specific procedures (sole source, shortlist, etc.); the consequence is that there are nospecific procedures effectively separating the control and contract approval function (inline with the WAEMU Guideline). The recent proliferation of sole source is certainly asource of concern.

4.46 While the function of independent auditing is recognized, it is entrusted to the structureresponsible for public procurement; hence, there are risks of conflict between the controlfunction and the audit function, which is a regulatory function according to the WAEMUGuideline. Indeed, this non-jurisdictional function has not yet been made operational,which accounts for the score (0) of the sub-indicator.

4.47 The Chamber of Accounts and the General Inspectorate of Finance do not exercise anycontrol over public procurement. They do not have the adequate human and logisticalresources and initiatives to strengthen their capacities could improve significantly theeffectiveness and impact of the use of public resources. The audit conducted recently didnot show any cases of public procurement fraud or corruption.

Indicator 10: Efficiency of Appeals Mechanism

4.48 The appeals mechanism has not yet been put in place despite commitments made by theIvorian authorities in 2004 (cf. CPAR of June 2004). In any event, the proposed appealsmechanism will not be effective since the decisions of the proposed SettlementsCommissions due to handle such cases will be subject to approval by the Minister in

41

charge of public procurement (at the same time, the control, approval and appealsauthority).

4.49 The statutory position of the appeals body is not yet specified in the draft orders, and thisis a matter of concern. The absence of any suspension principle as soon as any complaintis lodged with the contracting authority and the absence of a reference to the principle ofinvestigation initiated by the appeals organ are not in line with good practices includingthose established in Articles 11 and 12 of the WAEMU Guideline.

Indicator 11: Degree of Access to Information

4.50 The assessment noted progress made, but the available information is either incompleteor not easily accessible to the general public.

Indicator 12: The country has ethics and anti-corruption measures in place

4.51 The public procurement anti-corruption legal and regulatory framework is inadequate. Itdoes not form part of a global anti-corruption strategy that could be implemented in linewith measures proposed by relevant international conventions (United Nations and theAfrican Union). The assessment could not establish the minimal evidence of anyprosecution or sentencing for corrupt practices. This situation, which accounts for theweakness of sub-indicators 12 - c) and d), is also related to the lack of auditing of publicprocurement and of means and procedures for detecting acts of fraud and corruption. Itwould certainly be advisable to associating the private sector and the civil society withthe anti-corruption measures, which is not yet the case.

4.52 The Table below presents a detailed assessment for Pillar IV.


Baseline Indicator Summary Explanation SCOREComments by the

Government

Pillar IV. Integrity and Transparency of Procurement System

9. The country has effective control andaudit systems

9-a) – A legal framework, organization,policy, and procedures for internal andexternal control and audit of publicprocurement operations are in place toprovide a functioning control framework.

The legal and regulatory system in thecountry provides for:

(a) adequate independent control and auditmechanisms and institutions to oversee theprocurement function.

(b) implementation of internal controlmechanisms in individual agencies with

The system meets criterion a) but controls arenot efficient; however, interviewees expresseddoubt on the effective enforcement of laws andregulations to avert the risks of fraud as muchas possible.

Internal quality control of procurement atcontracting agencies is assured by focal pointsand the bid opening and award commissions.The positioning of focal points within thecontracting agency also poses a problem (underthe authority of the DAAF who is also adelegated commitment officer); the indicatorclearly shows the need for an internal controland management framework that provides

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clearly defined procedures.

(c) proper balance between timely andefficient decision making and adequaterisk mitigation.

(d) specific periodic risk assessment andcontrols tailored to risk management.

checks and balances within an organization incharge of processing tenders.

The control function exercised by the structurein charge of public procurement has beenweakened by the role devolved to the PublicProcurement Consultative Commission (whichit also chairs) and to the Minister in charge ofPublic Procurement as part of the control ofsome procedures (sole source, shortlist, etc.).The consequence is that in these specificprocedures there is no effective separationbetween control and contract approval functions(pursuant to the WAEMU guideline); the recentproliferation of the sole source method that thecontext of crisis and slippages in budgetaryscheduling cannot legally justify, and the factthat the contracting authorities (such as theDistrict of Abidjan) were able to undertake alltheir consultancy recruitment by sole sourcingduring the year 2006/2007 cast serious doubt onthe effectiveness of the control function, exceptin cases where the contracts were below theFCFA 60-million threshold and therefore weresubjected to ex-post control; cases requiringregularization were pointed out for procurementby sole source; the pre-control function in state-owned enterprises should be clearly defined forall the entities.

It is worth noting the major split up of controlbodies. Some depend directly on the GeneralDirectorate of Budget (Financial Control,CRDP, Directorate of Operations ofDecentralized Communities). On its part, theaim of the General Inspectorate of Finance,attached to the office of the Minister of Financeis to conduct audits throughout the country. Butit lacks adequate human and material resources.It often encounters strong resistance in theperformance of its duties. Also, it does not haveany coercive capacity. It reports solely to theMinister of Finance. It has not conducted anyaudit of public procurement procedures and thereports issued recently do not address theproblem. It is also worth noting the lack ofcoordination with state organizations thathandle customs and tax fraud.

Although the function of independent auditingis recognized, its management is entrusted to

The issue of solesourcing is not tobe necessarilylinked to theforegoing; it israther related to thecrisis environmentand to slippagesaffecting the budgetschedule.

Concerning theissue of solesourcing, it wasclearly explained tothe Mission thatconsultancycontracts weresigned by theDistrict of Abidjanfor credits belowthe thresholdrequiringcompetitivebidding, cannot beclassified ascontracts by solesourcing as definedin the ProcurementCode. However, itis worth noting thatgenerally, the bulkof consultancycontracts is subjectto competitionbased on shortlist(see statisticalstatements).

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Government

the structure that oversees public procurement;there is a real risk of conflict of interestbetween the control function and the auditfunction, which is a regulatory functionaccording to the WAEMU guideline. This non-jurisdictional audit function is not yetoperational.

The Chamber of Acccounts does not havesufficient human resources to perform its dutiesefficiently (20 magistrates).

In the few years preceding the assessment, itsaudits did not reveal any cases of fraud orcorruption relating to procurement. It does nothave any control over procurement proceduresby itself and its magistrates have not had anytraining following the implementation of thenew procurement code.

9-b) – Enforcement and follow-up onfindings and recommendations of thecontrol framework provide an environmentthat fosters compliance.

Internal or external audits are carried out atleast annually and recommendations areresponded to or implemented within sixmonths of the submission of the auditor’sreport.

No audit has been conducted since the entryinto force of the code in 2005; there are reasonsto doubt, inter alia, the content of the draftorder, admittedly not yet validated by the DMP,on the modalities for implementing and thefollow-up of the recommendations of publicprocurement audits and compliance with thecode. Indeed, the code provides that internalaudits be carried out by the DMP (which nolonger limits itself to implementation), and thatexternal audits be carried out by classicadministrative and jurisdictional controlstructures. The use of private firms appears tobe of secondary importance. Moreover theresults of the implementation of auditrecommendations must be approved by theDMP. However, the code is not clear on theconsequences of violation of the regulations orcriminal violation of the law.

0

The findings of theaudits do notappear to be fairsince they are basedon a consultant’sdraft report not yetvalidated by thePublic ProcurementDirectorate.

9-c) – The internal control system providestimely information on compliance toenable management action.

(a) There are written standards for theinternal control unit to convey issues tomanagement depending on the urgency ofthe matter.

(b) There is established regular periodicreporting to management throughout theyear.

(c) The established periodicity and written

Only condition a) has been met. If thisconcerns the Bids Opening and AwardCommission, it is the code that can correspondto the said standards. The inadequacy ofcontrol procedures (notably, in the regularmonitoring of works on site) must be indicated.

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standards are complied with.

9-d) – The internal control systems aresufficiently defined to allow performanceaudits to be conducted.

There are internal control procedures,including a manual that states therequirements for this activity which iswidely available to all staff.

The assessment, which reflects the position ofthe CNCS, indicates that procedures exist,although their compliance is uneven.

1

9-e) – Auditors are sufficiently informedabout procurement requirements andcontrol systems to conduct quality auditsthat contribute to compliance.

The assessment indicates that there is noprogram for the training of internal and externalauditors to ensure that they fully master theprocurement principles, operations, laws andregulations; moreover, to date, no audits havebeen conducted.

1

10. Efficiency of appeals mechanism

10-a) – Decisions are deliberated on thebasis of available information and the finaldecision can be reviewed and ruled uponby a body (or authority) with enforcementcapacity under the law.

(a) Decisions are rendered on the basis ofavailable evidence submitted by the partiesto a specified body that has the authority toissue a final decision that is binding unlessreferred to an appeals body.

(b) An appeals body exists which has theauthority to review decisions of thespecified complaints body and issues finalenforceable decisions.

(c) There are times specified for thesubmission and review of complaints andissuing of decisions that do not undulydelay the procurement process.

The assessment indicates that the system hasnot met conditions (a) - (c) above, limitingappeals only to the courts. It is worth notingthat the mechanism provided for by the code isstill not in place; furthermore, the mechanismfor appeals and amicable settlement of disputesis not efficient since the decisions by theSettlements Commissions that must be set up todeal with appeals, will be subject to approval bythe Minister in charge of Public Procurement(at the same time, the control, approval andappeals authority).

0

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Government

10-b) – The complaint review system hasthe capacity to handle complaintsefficiently and means to enforce theremedy imposed.

As indicated above, the system is still not inplace.

On this point, reference should be made to theprovisions of the aide mémoire prepared duringthe mission to Washington by the Ivorianauthorities in June 2004.

The appeals and amicable dispute resolutionmechanism: provisionally, the mechanismcontained in the public procurement code willbe maintained. The effectiveness of themechanism will be assessed after one year ofoperation in order to arrive at a final decision.

In fact, the lack of a clear definition in the draftorders of the statutory position of the appealsentity is a source of concern, just as is theabsence of any principle of suspension as soonas a complaint is lodged to a contracting agency(Article 11 of the WAEMU guideline) and theabsence of any reference to the principle ofinvestigation initiated by the latter (Article 12of the WAEMU guideline).

0

10-c) – The system operates in a fairmanner, with outcomes of decisionsbalanced and justified on the basis ofavailable information.

The system is still not in place, and thisaccounts for the score assigned. 0

10-d) – Decisions are published and madeavailable to all interested parties and to thepublic.

The system is still not in place, and thisaccounts for the score assigned. This was alsothe assessment of the CNCS. 0

10-e) – The system ensures that thecomplaint review body has full authorityand independence for resolution ofcomplaints.

It is acknowledged here, and this is endorsed bythe CNCS, that the review body as defined inthe code is not independent. The commissionsare chaired by either the IGE, or arepresentative of the Prime Minister and theirtechnical secretariats are run by the TreasurySolicitor who is also under the authority of theMinistry of Economy and Finance in charge ofcontrol and on whom the final decision for thehandling the complaint depends.

0

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Government

11. Degree of access to information

11(a) – Information is published anddistributed through available media withsupport from information technology,when feasible.

Information on procurement is easilyaccessible in media of wide circulation andavailability. The information provided iscentralized at a commonplace.Information is relevant and complete.Information is helpful to interested partiesto understand the procurement processesand requirements and to monitoroutcomes, results and performance.

The assessment, which reflects the position ofthe CNCS, indicates that information ispublished in media that are not easily andwidely accessible to the general public.

2

12. The country has ethics and anti-corruption measures in place

12-a) – The legal and regulatoryframework for procurement, includingtender and contract documents, includesprovisions addressing corruption, fraud,conflict of interest and unethical behaviorand set out (either directly or by referenceto other laws) the actions that can be takenwith regard to such behavior.

The procurement law or the regulationsspecify this mandatory requirement andgives precise instructions on how toincorporate the matter in tenderingdocuments. Tender documents includeadequate provisions on fraud andcorruption.

It is recognized, and this is also the view of theCNCS, that the conditions mentioned in themargin have been substantially met. Tenderdocuments indeed embody adequate measureson fraud and corruption. However, it is certainthat the procurement law or regulations do notmention this measure as obligatory neither dothey give precise instructions on the manner ofincorporating this matter in the tenderdocuments.

3

12-b) – The legal system definesresponsibilities, accountabilities andpenalties for individuals and firms foundto have engaged in fraudulent or corruptpractices.

It is recognized here, and this is also the view ofthe CNCS, that the legal and regulatoryframework refers to other laws that dealspecifically with the issue, in accordance withthe requirements of the sub-indicator. This isalso true for the consequences of such practices.

2

The fact that thecode refers to otherlaws is consistentsince the nationallegislation on thecombating of thiscrime, is governedby such regulations.The PublicProcurement Code,which is a speciallegal framework, isnot intended tosubstitute for thislegislation.

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Government

12-c) – Evidence of enforcement of rulingsand penalties exists.

The assessment was unable to establish, as themethodology proposal requires, evidence ofenforcement of rulings and penalties for corruptpractices (no case of corruption notified at thelevel of the administration through the system),or cases that were brought to court (accordingto the Treasury Solicitor, the IGF and theChamber of Accounts). This situation is due tothe absence of public procurement auditing andconsequently of any procedure for detectingfraudulent and corrupt practices.

0

12-d) – Special measures exist to preventand detect fraud and corruption in publicprocurement.

The Government has not put in place a detailedanti-corruption program to prevent, detect andpunish corruption in public procurementinvolving relevant government organizationsthat are sufficiently empowered to carry outtheir responsibilities.

However, during the interviews, certain factswere reported (use of false services certificates,inter-contractor agreements for contract sharingin the health sector).

There are no special measures to detect andprevent procurement-related corruption. It isworth noting the dearth of institutionalresources to combat corruption (GoodGovernance Secretariat attached to PrimeMinister’s Office; no operational capacities ofan independent anti-corruption body). There isalso a lack of means of detection (linked withthe SIGMAP). The fight against corruption inpublic procurement is not attached to andcoordinated within the context of an overallanti-corruption program. From this perspective,the anti-corruption legislative and regulatoryframework, as defined by the United NationsConvention and the African Union Convention(if such conventions have been ratified), couldserve as a reference framework.

1

12-e) – Stakeholders (private sector, civilsociety and ultimate beneficiaries ofprocurement/end users) support thecreation of a procurement market knownfor its integrity and ethical behaviors.

(a) There are strong and credible civilsociety organizations that exercise social

The assessment, which reflects the position ofthe CNCS, indicates that there is only a smallnumber of organizations involved in this, thatdialogue with the authorities is insufficient andthat proposals by the public for improvementsare not sufficiently taken into account.

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audit and control.

(b) Organizations have Governmentguarantees to function and cooperation fortheir operation and are generally promotedand respected by the public.

(c) There is evidence that civil societycontributes to shape and improve integrityof public procurement.

12-f) – The country should have in place asecure mechanism for reporting fraudulent,corrupt or unethical behavior.

The assessment, which also reflects the positionof the CNCS, indicates that there is no safemechanism for reporting cases of fraud andunethical as well as corrupt behaviors.

0

12-g) – Existence of Codes ofConduct/Codes of Ethics for participantsthat are involved in aspects of the publicfinancial management systems that alsoprovide for disclosure for those indecision-making positions.

Following the CNCS proposal, it will beconsidered that there is no such code or code ofconduct.

0

5. RISK ASSESSMENT

5.1 The risks associated with the inadequacies that still beset the system are easy to identifysince they are similar to those found in all the other countries in the WAEMU zone.Their analysis must include a crosscutting approach and an assessment by pillar.

5.2 The regulatory risk is clear: no regulatory instrument, no matter how well formulated,can reduce the risks of fraud or slippage. The significant percentage of contracts based onsole source, the persisting latitude given to procurement outside the system (althoughthese involve contracts funded from budgetary line items subject to procurement) and theagreements signed between public entities constitute some of the areas where risks ofslippage exist. The changes to adapt to the WAEMU public procurement guideline couldserve as an impetus to reduce them. However, in a system characterized by a significantweakness of Pillar IV, where control, audit, sanction and dispute settlement mechanismsare weak, present a conflict of interest or are virtually non-existent, the risks associatedwith regulatory reform are significant since it is also true that the number of appealsagainst non-competitive procurement, albeit reduced, is not likely to improve the system

49

if the institutional control mechanism is not better structured in a collegial manner withefficient tools for detecting fraud.

5.3 The institutional risk should soon be reassessed: the SIGMAP is a tool of high quality,but its management functions are not sufficiently directed towards detecting potentialfraud. In the hands of the Public Procurement Directorate, its access must be facilitated toallow for its efficient use by audit and anti-corruption bodies. The ONMP, which willcater for regulation should demonstrate its independence towards other stakeholders ofthe system, especially since it is devoid of other key regulatory functions (audit, sanction,dispute resolution).

5.4 The operational risk is important: since there is no sound procurement system withoutan assessment and capacity development strategy and, more importantly, without thisstrategy being developed within a stable regulatory framework that would foster theemergence of sustainable procurement structures and a crop of procurement specialists.There is also a “private sector” risk if a framework is not developed early to provideaccess in a transparent manner, to the public procurement sector.

5.5 The integrity risk is major: it is the key of the system and should be understood as theheart of the regulatory function in the absence of an efficient judiciary. It is essential torapidly develop an overall anti-corruption strategy with a specific mechanism andcoordinated with the public procurement management system. These risks are addressedin the reform action plan proposed in the main PEMFAR report.

6. RECOMMENDATIONS

6.1 The recommendations of the review (detailed in the action plan below) are presented inthe form of a matrix that was discussed during the validation workshop (including theprioritization of actions and deadlines for implementation) of the outcomes of thePEMFAR held in Abidjan on June 16-17, 2008. The preparation of the document tookinto account the previous action plans and matrices formulated by the Ivorian authorities.

Updated Matrix of Actions

Indicator

(Objectives set)

Problemsidentified/standards

Actions Resultindicators

Performanceindicator

Responsibleinstitution

Deadlinefor

implemen-tation


(weak,averagehigh)

PILLAR I:Legislative andregulatoryframework

50

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Indicator 1

1) PublicProcurementlegislative andregulatoryframeworkachieves theagreedstandards andcomplies withapplicableobligations

1. The scope ofapplication of thecode does not coversome institutions(Parliament, etc…)and allows fordispensations likelyto reduce the scopeof application (publicentities, publicservice delegations,private entities)

1. Introducechanges tocomply withWAEMUguideline No. 4to expand thescope ofapplication ofthe code

2. Theprocedures andinstitutionswhich governconcessionsshould complywith selectionmethodsestablished inthe WAEMUguidelines

Articles 3 to 6of GuidelineNo. 4/2005applied

Increase in the% of the amountof budgetaryline items ofcontractingauthoritysubjected toprocurementprocedures

MEF/DGBF/DMP

Dec. 2008 Weak

2. Cases of solesourcing are toofrequent

Introducechanges tocomply withWAEMUGuideline No.4 to limit solesourcing cases

Article 38 ofGuideline No.4/2005

% of tendersawarded on thebasis of solesourcing in linewith the revisedcode

MEF/DGBF/DMP

Dec. 2008 Weak

3. Absence of rulesgoverningparticipation ofpublic enterprisesfostering faircompetition

ApplyWAEMUGuideline No.4 and passrelevantimplementingregulations

Article 2Guideline No. 4

Considerablereduction (involume) of % ofcontractsawarded topublicenterprises bycontractingauthority

MEF/DGBF/DMP

Dec. 2008 Weak

4. Bid opening andevaluation reportsnot published

ApplyWAEMUGuidelineNo. 4

Article 57 and64 GuidelineNo. 4

The summary ofevaluations andresults of tenderawards areposted on theWeb

MEF/DGBF/DMP

Dec. 2008 Weak

51

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

5. Harmonize thethreshold for NCBwith the nationalprocurement plan

Conduct astudy todetermine athresholdreflecting thecountry’seconomicdevelopmentand nationalprivate sectorcapacity.

A singlethreshold isapplicable to allpublic entities

Increased % ofcompetitiveprocurement

MEF/DGBF/DMP

March2009

High

Indicator 2

Existence ofimplementingregulations anddocumentation

1. The implementingregulations of thecode are incomplete(dispute settlement,regulatory body,sanction, audit,communitypreferential margin,categories ofcontractors, see listin annex etc…)

Complete theregulatoryinstruments inline with thecode andWAEMUGuideline No.4

Passing ofrelevant decreesand orders andprepare the PPmanual

The Manual ofProcedures ofpublicprocurement isexhaustive andused by the ACs

MEF/DGBF/DMP

June 2009 High

2. Model tenderdocuments were notapproved inaccordance withregulations

Complete theregulatoryinstruments inline with thecode andWAEMUGuidelineNo. 4

Adoption ofdecrees andorders relatingto TenderDocuments andDDP

Model tenderdocuments areused by allentities applyingpublic funds

MEF/DGBF/DMP

June 2009 High

3. Methods andevaluation ofprocurement ofintellectual servicesare not covered by adefined regulatorymechanism

Revise theCode to ensureconformitywith WAEMUguidelines

The code hasbeen revisedaccordingly

Procedures forrecruitingconsultants areclearly definedin the code

MEF/DGBF/DMP

Dec. 2008 Weak

52

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

4. General conditionsof contract are non-existent or areundergoing update

Complete theregulatoryinstruments inline with thecode andWAEMUGuidelineNo. 4

Adoption ofrelevant decreesand orders

Model generalconditionscontracts areused by allentities applyingpublic funds

MEF/DGBF/DMP

June 2009 High

PILLAR II:Institutionalframework andmanagementcapacity

Indicator 3

The publicprocurementsystem ismainstreamedand wellincorporatedinto the publicsectorgovernancesystem

1. Weak capacity ofcontractingauthorities in theformulation ofprocurement plansupstream of budgetadoption process

2. Establish a legalframework thatrequires contractingauthorities toconduct feasibilitystudies beforeprojects are budgetedfor

3. Establish a legalframework definingprojectimplementation

1. Adoptregulatorymechanismensuring theformulation ofprocurementplans attechnical andfinancial levelin line with thefiscal calendar

Procurementbudgetproposals arebased onprocurementplans

Improved % ofplanned budgetallotments andreduction (involume) of % oftenderssubjected tobudgetaryregulatoryprocedures

% of ongoingcontracts thatshould havebeen suspendedfor lack of funds

Percentage ofincrease in thefinal amount ofcontractsresulting frommodificationsand amendments

MEF/DGBF/DMP

MEF/DGBF/DMP

MEF/DGBF/DMP

March2009

Sept. 2009

Sept 2009

Weak

High

High

53

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

2. SIGMAP does notautomatically referthe budgets of SODEand Communes

1.Adopt a legaltext to definethe need tomake availablethe budgets ofthe SODE andCommunes atthe beginningof the fiscalyear

2. Support theimplementationof SIGESCODwith a view toharmonize thenomenclatureof the budget ofthe communeswith the one ofcentralgovernment

3. Providebreakdown ofthe budget ofInstitutionswith a view tofacilitatemonitoring ofthe budgetexecution andpublicprocurement

Procurementallocations forSODE andcommunes areembodied intothe SIGFIP

Increase of the% (in volume)of competitiveprocurement

MEF/DGBF/DMP/DPP/DOCD

MEF/DOCD

MEF/DGBF

Dec 2008

Dec. 2009

Dec 2008

Weak

High

Weak

Indicator 4

The country hasa functionalnormative/regulatory body

1. Control andregulatory functionsare not separated

Adopt aroadmap toapply WAEMUGuidelineNo. 5

Article 3 ofWAEMUGuideline No. 5is adopted in thecode

Existence of asystem of appealand regularauditingeffective andindependent

MEF/DMP March2008

Weak

54

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Operationalizethe ONMP inline with theWAEMUGuidelines tomanage appealsand audits

ONMPoperationalization consisting of(i) adoption oftexts to create,organize andestablish itsoperatingprinciples, (ii)appointment ofall keymanagementstaff(RegulationCouncil andPermanentTechnicalSecretariat) and(iii) allocationof an adequatebudget to theONMP

ACFmanagementmanualavailable

Activity reporton managementof complaintsand audits

MEF/DMP March2009

Average

Indicator 5

Existence ofinstitutionaldevelopmentcapacity

1. The system for thecollection anddissemination ofinformation onprocurement is notsufficientlydeveloped and it isnot easily accessibleto the public

1. Strengthenthe collectionanddisseminationof informationon procurementand its accessto the public

2. Reactivatethe web siteand developfunctional linkswith theSIGMAP

In formation onprocurementopportunities,negotiation,exceptions anddispensations,audit findingsare posted onthe WEB

MEF/DMP

MEF/DMP

Dec 2008

Dec 2008

Average

Average

55

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

2. The system andprocedures for thecollection andmonitoring ofnational statistics onprocurement isincomplete, noteasily accessible tothe public and notsufficientlydeveloped to becomean effective tool forauditing procedures

1. Pursue thedevelopment ofSIGMAP

2. Define areport format,in conformitywith theWAEMUmodel, toassess thequality of thesystem

SIGMAPProceduresManualimproved anddistributed tousers

A summaryreport on keyinformationposted on theweb-site

Reliability ofstatisticalinformation

Improvement oftimelines inpublicprocurement

MEF/DMP June 2009 Average

3. There is nonational strategy forcapacitydevelopment andtraining

Undertake atraining needsassessment ofvarious actorswhich willform the basisof a nationalcapacitydevelopmentstrategy

Reportestablished andvalidated,trainingmodulesavailable and Xtrainers trained

Medium andlong termcapacitydevelopmentestablished andquantified

MEF/DMP June 2009 High

56

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

4. The status ofprocurement units ofcontractingauthorities, thefunction ofprocurementspecialist, itshierarchical andstatutory role doesnot guarantee thesustainability of thesystem

1. Conduct astudy to assessprospects tocreate a courseon procurementand financialcontrol

2. Improve thesustainabilityof structuresand staff (to beincluded instudy)

Course createdand trainingprojectionsrespond toneeds

Increasedstability andperformance ofpublicprocurementstaff

% ofgovernmentprocurementemployees stillat post followingtraining

Averagepresence of aprocurementspecialist in acontractingauthority

MEF/DMP

MEF/DMP

Dec 2009

Dec 2009

High

High

PILLAR III:Procurementoperations andmarketpractices

Indicator 6

The country’sprocurementoperationsand practicesare efficient

1. Procurementdeconcentration anddecentralizationmechanism ofcontractingauthorities should bestrengthened(Administration andCommunities) andalso at level ofcontrol authorities

Adopt acapacitydevelopmentmechanism thatjustifies thelevel ofempowerment(conduct astudy)

Mechanismadopted andimplemented

Unit pricedifferentials(between publicsector andmarket prices)

% of timelycontractualpayment asestablished inthe contracts

MEF/DMP June 2009 Average

Inadequate capacityof public actors

Training ofactors based onnationalcapacitydevelopmentstrategy

Training reportof 1000 public,private sectorand civil societystakeholders

Improvement pfthe quality ofTDs, bids andfewercomplaints bybidders

MEF/DMP Dec 2009 High

57

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Indicator 7

Functionality ofthe publicprocurementmarket

1. There are noeffectivemechanisms forpublic sector-privatesector partnership

The privatesector is astakeholder inthemanagement ofthe National

PublicProcurementObservatory(ONMP)

The privatesector has thepower toinfluencereform sectorreform

Private sectorconfidence inthe operation ofsystem improves

MEF/DMP Dec 2008 Weak

2. Legal frameworkfor access by SMEsto publicprocurement andaccess to newmarkets must bestrengthened

Exploreopportunity forintroduction aregulatoryarrangement tofacilitate SMEaccess to publicprocurement

Facility foraccess to publicprocurement areprovided to newSMEs

Increase innumber of newSMEs created

MEF/DMP Dec 2009 Average

3. The legalframework forpublic-privatepartnershipdevelopment(includingconcessions) is non-existent

Create a legalframework forPPP,concessionsand BOTdevelopment

Enactment of alaw onselection, andoperation ofPPPs

Increased PPPinitiatives

MEF/DMP/DPP

June 2010 High

4. Many systemichurdles that limitprivate sectorcapacity to accessprocurement marketexist

Conduct astudy andimplementfindings toreducesystemichurdles

Study reportavailable andlegal andregulatoryprovisionsadopted anddisseminated

Increase in % ofaccess bycontractors topublicprocurement

MEF/DMP/Ministry ofIndustry

June 2010 High

5. Mechanism forcategorization ofcontractors is noteffective enough

Strengthen thelegal andoperationalframework ofthe contractorcategorizationmechanism

Increase in the% andreliability ofcontractorscategorized

Improved timelimits andquality ofservices

MEF/DMP/Private sector

June 2009 High

58

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Indicator 8

Existence ofcontractadministration and disputeresolutionprovisions

1. Regulations oncontract performanceshould be in linewith the relevantWAEMU guideline

The code mustbe revised toensureenhancedeffectivenessandtransparency ofdisputeresolution

Newmechanismshave beenadopted in thecode anddisseminatedthrough modeldocuments

Disputeresolution isefficient andtransparent


2. Means ofmanaging tendersthrough SIGMAP arenot extended to allcontractingauthorities

Extension ofSIGMAP to allcontractingauthorities, thetwo moreimportantcommunes atRegional levelet the threeremainingcommunes inAbidjan

100% ofcontractingauthorities haveaccess toSIGMAP

Internal controlof operations isconducted andefficient

MEF/DGBF/DMP

Dec 2008 High

PILLAR IV:Integrity andtransparency ofpublicprocurementsystem

59

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Indicator 9

The countryhas effectivecontrol andaudit systems

1. Legal frameworkand effectiveness ofinternal and externalcontrol ofprocurement isdeficient both at thelevel of contractingauthorities and legalcontrol structures

1. Internal ex-ante or ex-postcontrol ofprocurementmust be applyto allcontractingauthorities

2. The SODEare submittedto controlaccording tothe WAEMUGuidelines

3. Assess theopportunity oflinkingSIGMAP to afraud detectionsoftware

The new code isaligned with theWAEMUGuidelines

Internal controlreports of lineMinistries areposted on theWebsite

Significantreduction of %of non-complianttenders

MEF/DMP

MEF/DMP

MEF/DMP

Jan 2009

Jan 2009

Dec. 2009

Weak

Weak

High

2. Control and auditfunctions are notseparated

1. Clarify auditand controlfunctions in thecode accordingto PEMFARworkshop (June2008) findings

Operationalizenon-

jurisdictionalaudit function

The code isrevised andinternal controland auditfunctions ofprocurement areseparated in linewith GuidelineNo. 5

Procurementobservatoryreceives copiesof audit reports

Empowermentof control andaudit in linewith goodpractices

Procurementaudits areeffective andposted on theWeb

MEF/DMP

MEF/DMP

Dec 2008

Dec 2009

Weak

High

3. Chamber ofAccounts does notconduct procurementaudits

Submit auditreports toChamber ofAccounts

Annual auditreports onpublicprocurement

Chamber ofAccounts andIGE haveinformationneeded for theirdecisions

MEF Jan 2010 Weak

60

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

4. Human andmaterial resources ofcontrol structures astheir power does notenable them to carryperform their dutieseffectively

Undertakeaudit trainingactivities fortheObservatory,IGE, IGF andChamber ofAccounts

% ofmagistratestrained

Procurementaudits areefficient

MEF/DMP June 2009 High

Indicator 10

Efficiency ofappealsmechanism

1. The disputeresolutionmechanism fortender awards is notindependent andfunctional

Implement theroadmap for theimplementationof anindependentand efficienttreatment ofcomplaintsaccording toPEMFARworkshop (June2008) findings

Theprocurementcode is revisedto enable theestablishment ofa system inaccordance withWAEMUguidelines

Bidders’complaints arehandled by aneffective andindependentprocurementbody


Make thesystemoperational

Comprehensivereport on themanagement ofcomplaints

% of complaintshandled to thesatisfaction ofbidders


Indicator 11

Degree of accessto information

Access by public toinformation onoutcomes of publictenders is inadequate

1. Pursue thedevelopment ofthe web-siteand links withSIGMAP

2. Publish inthe PublicProcurementJournal andpost on thewebsite theresults of allprocurementtenders,including thoseof SODE andconcessions

The web-site isfunctional,accessible to thepublic andpublishes theoutcomes andstatistics onpublic tenders(Award,complaints andaudits)

% of privatesector visitorsand civil societysatisfied withthe relevance ofinformation

MEF/DMP

MEF/DMP

Dec 2009

Dec 2008

High

Average

61

Indicator

(Objectives set)





Deadlinefor

implemen-tation


(weak,averagehigh)

Indicator 12

The countryhas ethics andanti-corruptionmeasures inplace

1. The legal andinstitutional anti-corruptionframework isinadequate comparedto proposals made bythe relevant UNConvention andAfrican UnionConvention; the fightagainst corruption inpublic procurementis not integrated intoa national strategy

Urge thegovernment toratify allrelevantinternationalconventions

There is anindependentregulatory bodycapable ofinitiatinglawsuits andtakingdisciplinaryaction againstbidders.

The code isrevised andimplementingregulations arepassed

Activity reporton reporting offraud cases

% of corruptioncases at theprivate sectorlevel resulting insanctions

SNBG Dec 2009 High

2. Specific penaltiesagainst corruption(influence pedaling,favoritism,informationretention, etc.) arenot provided for inthe code

Complementthe body ofregulations

Degree oftransposition ofspecificpenalties in thecode


3. Procedures fordetection, monitoringand reporting ofcases of fraud areneither regulated notfunctional

Operationalizepublicprocurementgreen linemechanism

% of cases offraud leading toinvestigations

MEF Dec 2009 Average

4. There is no codeof ethics

Formulate acode of ethicson procurement

Ethics codeposted on theWebsite

% of public andprivate sectorvisitors havinghad access tothis code

MEF/DMP Dec 2009 Average

5. Strengthenapplication of publicprocurementadministrativesanctions

Chamber ofAccounts, IGEIGF, andObservatoryeffectively useaudit reports

% of auditedtenders resultingin disciplinarymeasures orpenalties

Chamber ofAccounts,IGE IGF

Dec 2009 Weak

62

Annex 17: Procurement –OECD/DAC Summary Table

OECD/DAC Baseline IndicatorScorebycomponent OverallScore

a b c d e f g/h

Pillar I – Legislative and RegulatoryFramework

IB-1Public procurement legislative and regulatoryframework achieves the agreed standards andcomplies with applicable obligations 2 2 3 2 3 3 2/1 18/24

IB-2Existence of implementing regulations anddocumentation 3 2 3 1 3 1 13/18

PILLAR I RESULT 31/42 (74 %)

Pillar II - Institutional Framework andManagement Capacity

IB-3The public procurement system ismainstreamed and well integrated into thepublic sector governance system 1

1 3 3 8/12

IB-4The country has a functionalnormative/regulatory body 2 3 2 0 7/12

IB-5

Existence of institutional developmentcapacity 2 2 1 0 5/12

PILLAR II RESULT 20/36 (56%)

Pillar III - Procurement Operations andMarket Practices

IB-6

The country’s procurement operations andpractices are efficient 1 1 1 2 5/12

IB-7

Functionality of the public procurementmarket 1 2 1 3 7/12

IB-8

Existence of contract administration anddispute resolution provisions 2 3 2 7/9

PILLAR III RESULT 19/33 (58%)

Pillar IV - Integrity and Transparency of

63

OECD/DAC Baseline IndicatorScorebycomponent OverallScore

a b c d e f g/h

Public Procurement System

IB -9 The country has effective control and auditsystems 1 0 1 1 1 4/15

IB-10 Efficiency of appeals mechanism0 0 0 0 0 0/15

IB-11 Degree of access to information2

2/3

IB-12 The country has ethics and anticorruptionmeasures in place 3 2 0 1 1 0 0 7/21

PILLAR IV RESULT 13/54 (26%)

64

Annex 18: List of Documents Consulted

Organic Law No. 59-249 of December 31, 1959, on Budget Laws.

Law No. 2003-489 of December 26, 2003, on State Income Tax System of TerritorialCommunities.

Public Procurement Code (Decree No. 2005-110 of February 24, 2005).

Decree No. 80-465 of May 16, 1980 on the operations of engineering consulting firms.

Decree No. 86-495 of July 11, 1986, on the establishment of a Communal DevelopmentCommission and Departmental Budget Programs of communes and the city of Abidjan.

Decree No. 2006-14 of February 24, 2006, on the creation of the Committee for the review andmonitoring of projects and programs of the coffee-cocoa industry.

Inter-ministerial Order No. 0059/ME-MIE/MEMEF of May 9, 2003, on the setting of thresholdsfor approval and award of tenders of the Road Management Agency (AGEROUTE).

Order No. 1037 MEF/DMP of November 26, 1990, defining the modalities for the commitment,approval, execution and payment of agreements signed between public law corporations.

Order No. 185 MDPMEF/DGBF/DMP of August 2, 2006, on the powers, duties andorganization of the Directorate of Public Procurement.

Order No. 186 MDPMEF/DGBF/DMP of August 2, 2006, on the modalities for theestablishment, organization and mode of operation of the Public Procurement ConsultativeCommissions.

Order No. 187 MDPMEF/DGBF/DMP of August 2, 2006, defining the method of computationof timelines in public procurement procedures.

Order No. 188 MDPMEF/DGBF/DMP of August 2, 2006, setting the thresholds for the award,validation and approval of public tenders.

Order No. 189 MDPMEF/DGBF/DMP of August 2, 2006, specifying the modalities fordelegating powers of the Minister in charge of public procurement.

65

Draft decree on the organization and operation of the dispute resolution in public procurementprocedure.

Draft order on modalities for referring cases to and procedures of investigation decision by theconciliation boards.

Draft order on modalities for the implementation and monitoring of recommendations of publicprocurement audits.

Draft order on modalities for financial resource management of conciliation boards.

Draft order specifying the thresholds and powers to approve public tenders within the office ofthe Minister in charge of public procurement.

Draft order on timelines during which public procurement bidders remain committed by theirbids.

Draft order on the determination of modalities for the application of preferential margin forbidding national contractors.

Manuals of procedure of the DMP:

- Booklet 1: General Provisions- Booklet 2: Open Competitive Bidding- Booklet 3: Restricted Competition- Booklet 4: Sole Sourcing and Amendment- Booklet 5: Special Procedures- Booklet 6: Execution, Control And Payment- Booklet 7: Exceptional Measures- Booklet 8: Appeal Administration

Procedures Manual for award and administration of AGEROUTE tenders.

Journal of Public Procurement (July 2004, February and July 2005, January and November2007).

66

Annex 19: PEMFAR – Public Procurement: List of Persons Contacted

No. Name and Surname Structure Position Contacts (Tel. /Email)

PEMFAR launch meeting– 31 October 2007

1. Fofana Mariame DGBF/DPSB Director Tel: 20 21 96 72

2. N’Guessan Konan Raphael DGBF/DPSB S/D Budget Studiesand Training

Tel: 20 21 57 79

3. Kamara Kabiwé DGBF/CRDP Audit Inspector Tel: 20 21 48 46

4. Abiyou Ouraga OAF/MEN Market Head of Unit Tel: 20 21 22 16

5. Kouassi Tougbin Francis DAAF/MEN Dept. Head SIGMAP Tel: 20 21 33 96

1. Coulibaly Mamadou DAAF/Health S/D Procurement Tel: 20 22 61 40

2. Legré Gossé David DGBF/DOCD S/D Director Tel: 20 21 94 28

Mobile: 07 76 94 00

3. Salé Poli National Assembly MP Mobile: 07 71.70.56

4. Eric Yoboué World Bank ProcurementSpecialist

Tel: 22 400 400

5. Ahoussi Patrice DGBF/DPSB Research Officer Tel 20 21 07 69

Email: [email protected]

6. Kouamé Yao DGBF/DPSB Research Officer Tel: 20 21 21 88

Launch of Public Procurement Assessment Meeting of 05 November 2007

1. N’Guessan Konan Raphael DGBF/DPSB S/D Budget Studiesand Training

Tel: 20 21 57 79


2. Ahoussi Patrice DGBF/DPSB Research Officer Tel: 20 21 07 69


3. Celestin Blé CNCS/TechnicalSecretary

Consultant Mobile: 07 81 41 62


4. Fatoumata Marthe Ehui CNCS/FIPME Member Tel: 21 75 85 75

Mobile: 07 00 96 26

5. Legré Gossé David DGBF/DOCD S/Director Tel: 20 21 94 28

Mobile: 07 76 94 00

6. Kossonou Koko Olivier DMP/DGBF Head Research andEvaluation Dept

Tel: 20 30 52 52 Poste 2246

Mobile: 07 83 08 02


7. Serres François Consultant Lawyer Tel: 47 03 43 62


8. Salé Poli National Assembly Parliamentarian Mobile: 07 71.70.56

9. Anet-oyourou Marie-France

World Bank ProcurementAssistant

Tel: 22 400 477

Email:[email protected]

67


10. Diabaté Kaladji MEF/DMP Research Officer Tel: 20 31 52 52 p. 2393

Mobile: 02 50 29 91

11. Brou Yao Paul MEF/DMP A/Director Tel: 20 30 52 52 p. 2348


12. Gnagne Kanne MEF/DMP A/Director ofInformation andCommunication Unit

Tel: 20 21 49 11

Mobile: 08 26 47 80


13. Coulibaly YacoubaPénagnaba

MEF/DMP A/D Regulation Tel: 20 21 53 28

Mobile: 07 84 51 37


14. Ouattara Issa CNCS/JCI President of CPS/ATSOS Transparence

Tel: 22 48 53 33

Mobile: 05 30 28 68


15. S. Ipaud Lago CNCS/CFENCI Business manager Tel: 20 33 90 04

Mobile: 05 04 75 96

Fax: 20 30 90 04


16. Yépié Auguste CNCS/GIBTP General Secretary Tel: 21 35 52 71

Mobile: 05 64 53 84


17. N’Zi Moro Nicaise Alex CNCS/ALACO President Mobile: 07 61 39 00

18. Ezan Emmanuel CNCS/TI(Transparency andIntegrity)

Member Mobile: 07 81 19 98

19. Kamara Kabive MEF/CRDP Audit Inspector Tel: 20 21 48 46

Mobile: 07 05 22 76


20. Angoran Yed CNCS President Tel.: 22 44 95 81/ 05 06 00 01


21. N’Guessan Serge AfDB ProcurementSpecialist

Tel: 216 71 10 31 46


22. Anguié Anguié MEF/IGF Deputy GeneralInspector of Finance

Tel.:20 22 00 72

Mobile: 05 30 27 49

Email: anguiea [email protected]

23. N’Guetta Arsène MEF/IGF Audit Inspector Tel: 20 22 01 14

Mobile: 05 71 15 47


24. N’Guetta K. Richard Yopougon Town Hall Head – TechnicalDept

Tel: 23 50 32 19

Mobile: 07 04 7117

68


25. Coulibaly Mamadou DAAF/Health A/D Procurement Tel: 20 22 61 40/20 21 05 69

Mobile: 05 76 10 28


26. Yapo Assamoi DMP/MEF A/Director Tel: 20 30 52 52 p. 2373

Mobile: 08 39 66 60


27. Kouamé A. André SOPIE Director Purchasesand Logistics

Tel: 22 52 76 20

Mobile: 05 30 27 61


28. Konan K.Charles DGTCP Special Adviser ofDG

Tel: 20 25 38 28

Mobile: 09 70 78 57

Meeting of 6 November 2007 11h – 12h30


2. Doukouré Lassiné DGBF/DPSB Research Officer Tel: 20 21 21 88


3. Kouadio K. Emmanuel CRDP/DGBF Research Officer Mobile: 09 64 16 46


4. N’Guessan Serge AfDB Procurement Expert Tel: 216 71 10 31 46




6. Légré Gossé David DOCD/DGBF A/Director Tel: 20 21 94 28

Mobile: 07 76 94 00

7. N’Guiachi YattéEmmanuel

DOCD/DGBF A/Director Tel: 20 21 22 15

Mobile: 05 75 44 14



9. N’Guessan Konan Raphael DGBF/DPSB A/Director BudgetaryStudies and Training

Tel: 20 21 57 79


10. Timité Youssouf DCF FinancialComptroller

Tel: 20 21 00 29

Mobile: 05 92 06 40



Meeting of 6 November 2007 - 14h30 to 16h30



2. Koné Djibiri DGBF/DPSB Research Officer Tel: 20 21 07 69


69


3. Nanga Marie Lucie BEP CABS (procurement) Tel: 22 40 48 10


4. Aka Brou Eugène DAAF/MEN Manager Tel: 20 21 34 32


5. Kouassi Tougbin Francis DAAF/MEN Head SIGMAPDepartment

Tel: 20 21 33 96

Mobile: 07 68 91 99


6. Kossonou Koko Olivier DMP/MEF Head Studies andEvaluation

Tel: 20 30 52 52 p. 2246

Mobile: 07 83 08 02


7. Abiyou Ouraga DMP/MEF Head Contract Dept Tel: 20 21 22 16

8. Akaffou Lydie DAAF/MEN Head Approval Dept Tel: 20 21 33 96



Meeting of 6 November 2007 from 8h45 to 10h30


Tel: 20 21 57 79








5. Yuetto Nadège Epse Konan DPSB Research Officer Tel: 20 21 21 94

Mobile: 05 86 50 10


6. Diaba Roger DBE A/Director Tel: 20 21 81 08

Mobile: 07 62 58 06





Meeting of 6 November 2007 of 17h to 18h30



2. Koné Djibiri DGBF/DPSB Research Officer Tel: 20 21 07 69


3. Konan Simplice DAAF/MSHP DAAF Tel: 20 22 57 59

Mobile: 07 49 75 25

70


4. Coulibaly Mamadou DAAF/Health A/D Procurement Tel: 20 22 61 40/20 21 05 69

Mobile: 05 76 10 28


5. Kouabenan Koffi Tchire DAAF/ MSHP Research Officer Tel: 20 21 05 69

Mobile: 08 26 11 72


6. Koua Ané Clément DAAF/Health Head - Procurement Tel: 20 22 61 40

Mobile: 06 49 88 03


7. Koné Yaya DAAF/Health Procurement Dept Tel: 20 21 32 13

Mobile: 05 00 92 41






Meeting of 7 November 2007 from 8h30 to 10h20





Tel: 20 21 57 79


4. Meité Mamadou AGEROUTE DMC Tel: 20 25 10 00

5. Edoukou K. Valère AGEROUTE Operations Officer Mobile: 07 86 77 74





Tel: 22 400 400




9. Bouaké Fofana AGEROUTE General Director Tel: 20 25 10 00



Meeting of 7 November 2007 from 11h to 13h




71



3. Atté Kakou JB SOPIE/SPME Special Adviser Tel: 22 52 76 09


4. Kouamé A.André SOPIE Director - Purchasesand Logistics

Tel: 22 52 76 20

Mobile: 05 30 27 61




6. Bernard Gobo SOPIE DC-DGF Tel: 22 52 76 20





Tel: 22 400 400


Meeting of 7 November 2007 from 15h to 16h45




3. Naï Serge DPP/MINAGRA Head of Dept. Tel: 20 21 08 33 p.280

Mobile: 05 60 43 86





Tel: 22 400 400




7. Fallé Diabagaté MINAGRA General Director Mobile: 05 95 71 93


8. Haccoway Yao DPP/MINAGRA “Directeur desParticipationsPubliques”

Mobile: 01 08 71 00


9. Koné Mamadou MINAGRA DAAF Mobile: 07 33 18 00

10. Adaï Roger Ass. DAAF/PublicProcurement

S/DAAF Mobile: 08 66 10 94


11. Diarra Issouf DGBF/DMP Assist. SIGMAP Mobile: 01 51 12 55


72




1. Fatoumata Marthe Ehui FIPME Tel: 21 75 85 75

Mobile: 07 00 9 626

2. Kouakou L. Diant FIPME Mobile: 05 02 70 65

Fax 23 45 45 41

3. Sylla Yssouf FIPME Tel: 21 75 85 75

Mobile: 07 85 85 18

4. Kouakou Yao FIPME Tel: 21 75 85 75 /23452274

Mobile: 07 58 83 63

5. Ahuili Naylor FIPME Mobile: 02 20 57 29/66 00 95 20

6. Monney Desiré FIPME Mobile: 07 09 88 45

7. Naky Séry Edouard FIPME Mobile: 07 08 66 28

8. Serres François Consultant Tel: 47 03 43 62


9. Atchoumou Emmanuel FIPME Tel: 20 33 70 61

Mobile: 07 82 77 66

10. Cissé Brahima FIPME/ DPECI Mobile 07 08 64 27

11. Arra Daté Mathieu FIPME/DPECI Tel: 21 25 04 98

Mobile: 07 64 58 43

12. Nago Lucas FIPME/DPECI Tel: 21 21 52 15

Mobile: 07 08 10 93

13. Amissah Kouaman Joseph FIPME/MPME Tel: 21 24 00 70

Mobile: 05 46 34 64

14. Totpkra Boni Sosthène FIPME Mobile: 05 71 91 32


1. Assié Léandre LEV Côte d’Ivoire General Director Tel: 20 30 51 80


2. Anoman Paulette DGBF Research Officer Tel: 20 21 21 94


3. Yépié Auguste GIBTP/SG General Director Tel: 21 35 52 71




5. Boa Jérôme CGECI EconomicManagement Officer

Tel: 20 22 50 08


6. Lakoun Ouattara CGECI General Director Tel: 20 22 50 08


Meeting of 26 November 2007 at 16h

73


No Nom et Prénoms Structure Position Contacts (Tel. /Email)

1. Ebrottié Yomanfo MEF/DMP Director Tel: 20 21 15 19


2. Brou Yao Paul MEF/DMP A/Director Tel: 20 30 52 52 p. 2348


3. Gnagne Kanne MEF/DMP A/Director ofInformation andCommunicationSystems

Tel: 20 21 49 11

Mobile: 08 26 47 80

Eamil: [email protected]

4. Diabaté Kaladji MEF/DMP Research Officer Tel: 20 31 52 52 p. 2393

Mobile: 02 50 29 91


5. Yapo Assamoi Augustin DMP/MEF A/Director Tel: 20 30 52 52 p. 2373

Mobile: 08 39 66 60




7. Eric Yoboué World Bank ProcurementSpecialist, WorldBank

Tel: 22 400 400




9. Coulibaly YacoubaPénagnaba

MEF/DMP A/D Régulation Tel: 20 21 53 28

Mobile: 07 84 51 37


10. Ako Yapi Eloi CNCS/Min Justice Magistrate Tel: 20 22 27 89


11. Celestin Blé CNCS/ST Consultant Mobile: 07 81 41 62


12. S. Ipaud Lago Cfen-ci/CNCS Business Manager Tel: 20 33 90 04

Mobile: 05 04 75 96

Fax: 20 30 90 04


13. Yépié Auguste GIBTP/SG General Director Tel: 21 35 52 71


14. Anet-oyourou Marie-France

World Bank ProcurementAssistant

Tel: 22 400 477

Email:[email protected]

15. Ouattara Issa CNCS/JCI President of CPS/ATSOS Transparence

Tel: 22 48 53 33

Mobile: 05 30 28 68

74



16. Kouamé Yao MEF/DPSB Research Officer Tel: 20 21 21 88

Mobile: 08 98 49 43


17. N’Dri Norbert MEF/DMP Technical Advisor Tel: 20 22 74 71


18. Miezan Ahiri Pierre DCGA Mobile: 09 16 91 31

19. Yapo Née Aké Nina CE/DGBF Tel: 20 21 21 99

20. N’Goran Ahou Edwige DFC Mobile: 05 64 50 98

21. N’Cho Albert DT/SG Mobile: 08 99 30 44

22. Guy Robert Berté Dir. Cab. Mobile: 08 41 33 81

23. Serres François Consultant Tel: 47 03 43 62

Meeting of 26 November 2007

1. Brouho Christian ONG ODAHROM Tel: 22 42 82 31

Mobile: 04 39 39 57

2. Serres François Consultant Tel:: 47 03 43 62

3. Totpkra Boni Sosthène CSCI Mobile: 05 71 91 32

4. El hadj Vallet Diomandé CSCI Mobile: 05 62 62 87

5. Ouattara Diakalia FNDP/CSCI Mobile: 07 08 95 23

6. Dr Touré-Diabaté Ténin CSCI/ Oasis de lasolidarité sociale

Tel: 22 44 87 12

Mobile: 05 95 41 21/07 233788

Meeting of 28 November 2007

1 Koffi Ahoutou Emmanuel MEF Chief of Staff, MEF 20 30 25 20

2 Ebrottié Yomanfo MEF Director of PublicProcurement

20-21-15-19

3 Coulibaly YacoubaPénagnaba

MEF A/Director of PublicProcurement

20-21-53-28

4 Traoré Karim MEF Research Officer,Cabinet, MEF

20 30 50 91

5 Serge N’Guessan AfDB Procurement Expert (216) 71 10 31 46

6 Eric Yoboué World Bank ProcurementSpecialist

(225) 22 40 04 00

7 François Serres Consultant Lawyer 47 03 43 62

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