In response to a request from the Gabonese authorities, a mission from the Fiscal Affairs Department of the IMF visited Libreville to conduct an evaluation of public investment management, using the Public Investment Management Assessment methodology. The report highlights that enhancing the efficiency of public investment is essential, given Gabon’s current budget constraints. Improving public investment management (PIM) should help stem the declines in public investment efficiency in Gabon. In terms of infrastructure quality, public investment efficiency has fallen to half of the expected optimal level, compared to a 20 percent decline both worldwide and in Sub-Saharan Africa, as well as a 31 percent decline in member states of the Central African Economic and Monetary Union. The findings of the PIM assessment reveal structural deficiencies in planning procedures and institutional arrangements. Eight recommendations are put forward to enhance PIM efficiency in the short and medium terms, with three urgent steps needed to rationalize planning.


In response to a request from the Gabonese authorities, a mission from the Fiscal Affairs Department of the IMF visited Libreville to conduct an evaluation of public investment management, using the Public Investment Management Assessment methodology. The report highlights that enhancing the efficiency of public investment is essential, given Gabon’s current budget constraints. Improving public investment management (PIM) should help stem the declines in public investment efficiency in Gabon. In terms of infrastructure quality, public investment efficiency has fallen to half of the expected optimal level, compared to a 20 percent decline both worldwide and in Sub-Saharan Africa, as well as a 31 percent decline in member states of the Central African Economic and Monetary Union. The findings of the PIM assessment reveal structural deficiencies in planning procedures and institutional arrangements. Eight recommendations are put forward to enhance PIM efficiency in the short and medium terms, with three urgent steps needed to rationalize planning.

Executive Summary

The development of infrastructure is one of the pillars of the Emerging Gabon Strategic Plan (PSGE). Implemented as of 2012, the PSGE has been establishing priority strategic guidelines to transform Gabon into an emerging economy by 2025. Its primary aims are to ensure and expedite the country’s sustainable development and growth by focusing on potential growth sectors. Public investment grew continuously from 2009 to 2013, when it peaked at 15.2 percent of GDP; it averaged 5.7 percent growth from 1990 to 2018. At the same time, private investment declined, as did growth and public capital stock. These outcomes indicate that public investment in Gabon does not drive growth and that investment expenditure does not automatically translate into actual accumulation of assets, which raises questions about the efficiency of those outlays.

Enhancing the efficiency of public investment is essential, given Gabon’s current budget constraints. Since 2014, Gabon has been experiencing decelerating growth and severe cash flow shortages. An extensive fiscal adjustment is under way, limiting the ability to launch new investments. This tight environment, in which the volume of investment spending is necessarily restricted, requires making the most of investment expenditure in terms of the coverage and quality of infrastructure. This goal is rendered even more essential by the fact that public investment served as an adjustment variable in a period of decelerating growth; in 2017, it reached its lowest level since 1990.

Improving public investment management (PIM) should help stem the declines in public investment efficiency in Gabon. In terms of infrastructure quality, public investment efficiency has fallen to half of the expected optimal level, compared to a 20 percent decline both worldwide and in Sub-Saharan Africa, as well as a 31 percent decline in member states of the Central African Economic and Monetary Union (CEMAC). Studies have shown that efficient management of public investment can narrow that gap from optimal levels through more credible and productive infrastructure development. The PIMA methodology developed by the IMF helps to detect the strengths and weaknesses of the system throughout the PIM cycle and to determine what reforms are priorities.

The findings of the PIM assessment reveal structural deficiencies in planning procedures and institutional arrangements. The assessment (Figure 1 and Table 2) shows an institutional framework that is close to attaining the highest international standards with respect to fiscal objectives and rules, budgetary comprehensiveness and unity, and monitoring of government assets. That strength derives directly from Gabon’s adherence to the regulatory framework of the CEMAC and implementation of the program-budgeting reform. However, the assessment also reveals weaknesses in public investment planning. Strategic and operational roles get not clearly defined, and multiple actors draw up separate, uncoordinated lists of projects that at times have little to do with the final list selected for inclusion in the budget law. Planning tools are nonexistent, dispersed, or dysfunctiona; in practice, projects selection and how they are financed are not based on objective criteria derived from prior studies. Precisely when Gabon would like to expand recourse to public-private partnerships (PPP), the legal framework for them remains deficient, particularly with respect to spontaneous bids; the fiscal impact and risks associated with such partnership contracts have not been evaluated, ascertained, or mastered. Moreover, the effectively low level of competition in the major infrastructure sectors does not create an environment conducive to efficient financing.

Figure 1.
Figure 1.

Summary of the Strengths and Weaknesses of PIM in Gabon

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Table 1.

Proposed Action Plan

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Table 2.

Map Summarizing the Outcomes of the PIMA in Gabon

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Note: *** = high priority, ** = medium priority, * = low priority.

These planning defects have a direct impact on resource allocation and project execution. In the absence of well-coordinated planning, the allocation of resources for investment outlays in the program-budget becomes incomplete and subjective. Not all public investments, especially those of the Gabonese Strategic Investment Fund (FGIS) and other public institutions, are included and described in the budget, and the selection criteria for projects that are included in the budget are not detailed or published. In the end, funding is not available when it comes to executing projects, a practice that lacks both transparency and proper oversight. The choice of providers in charge of works is essentially based on tacit agreements; the monitoring of project implementation is neither centralized nor adequately supervised, which results in poorly synchronized budgetary, physical, financial, and accounting execution. The flagship PK12-PK105 road construction project—with its cost overruns and occasional payments made for works not in fact executed—is a case in point.

Eight recommendations are put forward to enhance PIM efficiency in the short and medium terms, with three urgent steps needed to rationalize planning. The proposed action plan (Table 1) is based on the following recommendations:

  • Strengthening the legal framework of PIM is a priority for establishing well-anchored and durable procedures and responsibilities with which all actors are familiar.

  • Rational organization of PIM and capacity-building are essential for centralizing planning, assigning spheres of competence to each of the actors involved, and ensuring that they coordinate with one another throughout the PIM cycle.

  • Rationalization and more robust planning are prerequisites for the budgetary programming of projects and for their execution.

  • Enhanced budget documentation, particularly regarding the risks associated with PPP, is needed to improve forecasts and allow proper oversight of resource allocation.

  • Several other actions add to the credibility of budgetary programming of investments and help prevent slippages in budget execution.

  • Overall, PIM transparency needs to be improved, with respect to both the project selection criteria and to the choice of the investors and providers to execute the projects.

  • Effective mobilization of financing, particularly through better cash flow management, is a key factor in preventing the accumulation of arrears.

  • Finally, once infrastructure is delivered, steps need to be taken to maintain and replace it.

As part of these endeavors, three actions are urgently needed, given their ability to shape the entire structure of PIM:

  • Issuing a decree governing the whole of the PIM cycle, specifying responsibilities, making ex ante assessment of large investment projects mandatory by law, and systematizing ex post evaluation

  • Turning the Sectoral Studies Committee into the central technical body responsible for selecting projects and preparing the draft Public Investment Program (PIP) by revising the documentation establishing its composition and tasks;

  • Drawing up and consolidating a PIP.

I. The Context Surrounding Public Investment in Gabon

Public Investment Management Terminology

Public investment comprises the gross fixed capital formation (GFCF) of the general government sector (public institutions and corporations and subnational governments). It consists of the purchase or production of fixed assets (such as capital goods, housing, and buildings) to be used in the process of producing goods and services incorporated into acquired capital, land, and intangible assets.

The fixed capital stock is the whole set of tangible or intangible assets to be used in the production process for at least one year (they are durable goods). The fixed capital stock is the result of cumulative GFCF, diminished over time by an attrition rate (that is, adjusted for depreciation).

Infrastructure quality is gauged using data compiled by the World Economic Forum from opinion surveys conducted by sector in each of the countries concerned. Methodology and panel size vary by sector.

Public investment performance is a function of both its productivity and efficiency:

  • Input efficiency: ratio of the value of public capital (input) to the measures of infrastructure coverage and quality

  • Output efficiency: ratio of the average rate of growth of the capital stock (in real terms) to the average rate of growth of the economy

The efficiency of public investment is measured using an indicator ( Public Investment Efficiency Index-PIE-X), which is based on an aggregate measure of infrastructure coverage and perception of its quality. The efficiency of public investment is the relationship between the value of the public capital stock and the measured coverage and quality of infrastructure assets.

According to an IMF study covering more than 180 countries, inefficiencies in public investment (or the efficiency gap) average 27 percent for all the countries covered.

Sources: FMI/PIMA methodology; the mission’s own interpretations.

A. Total Public Investment and Capital Stock

1. The positive overall trend of investment in Gabon since the 1990s is driven by private investment, irrespective of public investment. The long-term investment trend is positive: +33 percent for the cumulative amount of public and private investment between 1990 and 2018 (Figure 2). Most of the growth stems from strong private investment (+41 percent), which offsets and disguises the decline in public investment over the same period (-8 percent). In fact, the private investment share was more than 10 times the amount of public investment. For the period as a whole, the correlation between public and private investment is negative (coefficient of -0.23), reflecting the absence of any leverage exerted by public investment on private investment. Since 2010, the phases in which public investment increases have been systematically accompanied by a decline in private investment. Conversely, when public investment dropped sharply in 2014 from 15.2 percent to 6.7 percent of GDP, private investment increased from 18 percent to 29.1 percent of GDP. All in all, between 2010 and 2018, the correlation coefficient was -0.77.

Figure 2.
Figure 2.

Total Public and Private Investment

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

2. The overall level of public investment in Gabon is low and tends to fall when the pace of growth declines. Public investment accounted on average for 5.8 percent of GDP from 1990–2018 (Figure 3), a level below that observed in other countries in the region (CEMAC: 7.5 percent; Sub-Saharan Africa: 8.2 percent). In 2015, in US dollar terms, public investment in Gabon stood at US$1.8 billion, the same level as in the Democratic Republic of Congo or Guatemala, ranking 114 out of 168 countries. Fluctuations in the level of public investment from one year to another, as a percentage of GDP, were also higher in Gabon (averaging 1.83 percent of GDP) than in the rest of the CEMAC (1.5 percent) or Sub-Saharan Africa (1.76 percent). Since 2010, the correlation between the level of public investment in Gabon and the overall state of the country’s economy has become much more marked: in the event of an economic shock, investment serves as an adjustment variable.

Figure 3.
Figure 3.

Public Investment: Regional Comparisons (nominal, % GDP)

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

3. An increase in public investment, however, does not have a knock-on effect on growth. Several empirical studies document a positive correlation between public investment and economic growth.1 The 2015 IMF study of public investment highlights the way in which public investment acts as a catalyst for growth.2 It enables public capital stock to accumulate, which, in turn, raises the productivity of total capital. That dynamic has not been observed in Gabon, where vigorous investment spending does not systematically translate into robust growth, and a similar growth rate may result from a modest to a triple level of investment (Figure 4). For certain periods, the rate of GDP growth even follows an opposite trend to that of the level of investment: from 2011 to 2013, the rate of growth declined (from 7 percent to 5.5 percent), while the level of investment rose significantly (by more than 50 percent over the same period).

Figure 4.
Figure 4.

Public Investment and Growth of GDP

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

4. The public capital stock has remained stable, while the public debt hedging rate (taux de couverture de la dette publique] has steadily deteriorated in recent years. The value of the capital stock (amortized value of fixed assets) has barely risen due to the low level of investment and limited maintenance of existing infrastructure. The public capital stock level remained relatively unchanged from 1990 to 2015 (1990: 110.9 percent of GDP; 2015: 118 percent of GDP). The steady increase in public investment from 2007 to 2013 did not translate into a significant increase in the public capital stock, which averaged 111.18 percent of GDP in that period. Nevertheless, the per capita public capital stock is higher than that found in numerous countries in Sub-Saharan Africa, particularly the CEMAC countries (Figure 6), due to Gabon’s relatively smaller population. At the same time, the public debt increased sharply (by 190 percent) between 2008 and 2018, due to the macroeconomic downturn. The ratio of fixed capital to public debt thus deteriorated in recent years: by 2015, the hedging rate was 37 percent, compared to 19 percent in 2008 (Figure 5).

Figure 5.
Figure 5.

Public Capital Stock and Public Debt

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.
Figure 6.
Figure 6.

Per Capita Capital Stock

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

B. Composition of Public Investment

5. The Government of Gabon has ambitious plans to transform the country’s economy and reduce poverty. Gabon possesses major natural resources, especially oil, which have been driving the economy for many years. Although GDP per capita is high (US$7,7283), social indicators remain modest: in 2017, Gabon ranked 110 out of 188 countries on the Human Development Index ranking, with a HDI of 0.702, one rung below its ranking in 2016.4 Its poverty rate, estimated as 33.5 percent in 2005, has barely changed; it was 34 percent in 2015, according to United Nations Development Programme (UNDP) and IMF sources. A household consumption survey is being conducted to update the data, but no findings are yet available. Following the decline in oil output in recent years, the country is seeking to diversify its economy and sources of growth to safeguard its economic and social development. To this end, Gabon has been pursuing a strategic development plan since 2012, the Emerging Gabon Strategic Plan (PSGE), to become an emerging economy by 2025 (Box 2).

The Emerging Gabon Strategic Plan

Since 2012, Gabon has been implementing the Emerging Gabon Strategic Plan (PSGE), to make the country an emerging economy by 2025. The plan has five core objectives:

  • A united nation: strengthening good governance and affirming adherence to the principles of the rule of law

  • A competitive economy: dynamic growth and diversified and sustainable engines of growth

  • Sustainable development: optimal management of natural resources, mindful of future generations and efforts to combat climate change, in keeping with the United Nations Framework Convention on Climate Change

  • Shared prosperity: the effects of growth translate into improved social indicators

  • A voice respected on the international stage: Gabon becomes a key player at the subregional (CEMAC) and regional (African Union) levels.

For the Emerging Gabon Vision to materialize, three strategic paths have been chosen, all of which are illustrated in the Pyramid of an Emerging Gabon.

1) Strengthen the foundations for emergence: take global competitiveness factors into account (human capital, sustainable development, governance, and infrastructure).

2) Build emergence pillars: focus on potential growth sectors and ensure sustainable development of the country (three components: Green Gabon, Industrial Gabon, and Services Gabon)

3) Establish shared prosperity: facilitate the well-being of and equitable sharing by all segments of the Gabonese population in the fruits of growth.

Source: Gabonese authorities; PSGE.

6. However, neither the volume nor the composition of public investment supports this vision. Since the PSGE was implemented in 2012, capital expenditure has averaged 28 percent of the total budget expenditure, but its share of the total fell continuously from 2012–17, from 46 to 13 percent. Indeed, domestic financing of investment declined constantly and was only partially offset by increased external funding by lenders and borrowers, as shown in Figure

7. Moreover, investment focused on the economic sectors (collective infrastructure, trade, and public finance), which accounted for 60 percent of investment outlays in 2018, versus 12 percent for the education and health sectors (Figure 8).

Figure 7.
Figure 7.

Shares and Sources of Capital Expenditure Financing in the Budget

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.
Figure 8.
Figure 8.

Allocation of Investment Expenditure, by Major Functions, 2018

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

C. Impact and Efficiency of Public Investment

7. The ratio between public capital stock per capita and the volume and quality of physical infrastructure provides a measure of the efficiency of public investment. The IMF has developed a methodology for measuring the performance of public investment by relating public capital stock per capita to its impact in terms of the volume and quality of physical infrastructure. Countries with the strongest impact compared to their public capital stock per capita levels represent the efficiency frontier. 5 Scores range between zero and one. Distance from the frontier represents the room for potential improvement of public investment performance. Recent data for the volume of physical infrastructure in Gabon are incomplete and do not allow an overall estimate. The data on the perception of its quality, however, do allow us to analyze efficiency.

8. There has been little progress in expanding access to basic infrastructure, with the notable exceptions of access to drinking water and health infrastructure (Figure 9). Access to infrastructure is measured through a series of indicators in relation to the population: the number of teachers per 1,000 inhabitants; electricity capacity in kWh per 1,000 inhabitants; kilometers of road per 1,000 inhabitants; the number of hospital beds per 1,000 inhabitants; and the percentage of the population with access to safe water. With respect to education and electricity production, these indicators point to stagnation in the different periods reviewed. The number of kilometers of road per 1,000 inhabitants has dropped. Only access to health infrastructure and safe water show marked improvements of +100 percent (between 1990 and 2010) and +14 percent (between 1990 and 2015), respectively.

Figure 9.
Figure 9.

Access to Public Infrastructure Indicators

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; IMF staff estimates.

9. Users’ perception of the quality of infrastructure is better than in the countries of the CEMAC but has recently tended to deteriorate. Users’ perception of quality is measured by an index developed by the World Economic Forum. Scores range from 1 to 7, where 7 indicates top quality infrastructure. The perceived quality of infrastructure in Gabon is better than in other CEMAC countries but below that for Sub-Saharan Africa. At the same time, unlike the findings for the CEMAC, users have perceived a decline in quality since 2013 (Figure 10).

Figure 10.
Figure 10.

Infrastructure Quality Perceptions

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Sources: World Economic Outlook; Gabonese authorities; and IMF staff estimates.

10. Public investment efficiency measured in relation to infrastructure quality is relatively low in Gabon. Comparing public capital stock per capita against infrastructure quality in Gabon yields an efficiency score of 0.5 (Figure 11), which is below the average scores in the CEMAC (0.69), Sub-Saharan Africa (0.80), and emerging countries (0.78). The public investment efficiency shortfall, with respect to infrastructure quality, is 50 percent vis-à-vis the potential level expected for that public capital stock (Figure 12). The aforementioned IMF study shows that, on average, that gap can be reduced by up to two-thirds by improving public investment management (PIM).

Figure 11.
Figure 11.

Efficiency Frontier: Quality of Infrastructure Component

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Source: IMF staff estimate.
Figure 12.
Figure 12.

Efficiency Indicator: Quality of Infrastructure Component

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Source: IMF staff estimate.

II. Assessment of Public Investment Management

11. Public investment (PI) can be an important driver of economic growth, but its impact depends primarily on its efficiency. On average, a country loses around 30 percent of the value of its investments due to inefficiencies in its PI management process. By improving the efficiency of that process, a country can reduce that efficiency gap by up to two-thirds. The economic dividends realized from closing this efficiency gap are substantial; the most efficient public investors get twice the growth “bang” for their public investment “buck” than the least efficient.

12. The new revised tool for assessing PIMA developed by the IMF is intended to help countries strengthen their practices in this area.6 PIMA serves to evaluate 15 institutions engaged in the three phases of the PI cycle, as well as 3 crosscutting institutions (IT support, legal framework, and skills of the personnel involved) that affect them (Figure 13). For PIMA purposes, an institution is defined as a set of rules, relations among actors, and effective practices in a given PIM area.

  • Planning sustainable levels of investment across the public sector.

  • Allocating investment to the right sectors and projects.

  • Implementing projects on time and on budget.

Figure 13.
Figure 13.

PIMA Framework

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

A. Planning Sustainable Levels of Public Investment

13. Sound planning ensures that public investments are sustainable and coordinated with development strategies. This pillar is assessed in terms of the existence of an institutional framework and the effectiveness of the following institutions: (1) fiscal principles or rules that help ensure fiscal sustainability and facilitate medium-term planning of public investments; (2) national and sectoral plans that establish investment strategies; (3) effective coordination of central government and other entities, such as subnational governments and public corporations (PCs), on matters involving investment and communication regarding contingent liabilities associated with investment projects; (4) prior, systematic, and standardized assessment of proposed projects, taking into account the risks involved; and (5) a propitious environment for financing of infrastructure by the private sector, public-private partnerships (PPPs), and PCs.

14. Despite recent efforts, planning is still characterized by major weaknesses that affect other stages in PIM. First, the investment planning phase has collapsed: no actor has an overall, precise, and quantified vision of the investments and activities needed to achieve strategic goals. Accordingly, there is no coordination between national and sectoral planning or between the different public entities, and there are no consolidated data on investment. Feasibility studies are not systematically conducted and, in general, are performed after a project has already been included in the budget. Infrastructure markets are not entirely competitive, and recourse to innovative forms of financing (PPPs) needs to be better organized and supervised.

1. Fiscal targets and rules (institutional strength – high; effectiveness – medium; priority of reforms – medium)

15. Limits are set to ensure the sustainability of the public debt. The CEMAC convergence criteria and the Government’s economic program supported by the IMF under the Extended Fund Facility (EFF) prescribe limits to ensure public debt sustainability. The CEMAC convergence criteria (Table 3) establish a general government indebtedness ceiling: the stock of public debt has to be below 70 percent of GDP. Those criteria include a measure to prevent the accumulation of domestic and external arrears. Furthermore, under the economic program supported by the IMF, the Government has committed to meeting a quantitative performance criterion with respect to foreign debt, as well as criteria with respect to bank financing and non-accumulation of domestic and external arrears. In practice, while the debt ceilings are respected, Gabon regularly accumulates domestic and external arrears.

Table 3.

Ratio of Fulfillment of the 2018 Convergence Criteria

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Source: The CEMAC Commission (criteria not met are shown in gray).

16. Central and local government fiscal policy establishes several permanent rules that are not fully observed in practice. The CEMAC convergence criteria and multilateral surveillance indicators, as well as the quantitative benchmarks of the program with the IMF in connection with the EFF arrangement, have established permanent fiscal policy rules: a deficit objective through targets for the fiscal balance (for example, the non-oil fiscal balance under the EFF program); the tax pressure rate (for example, a target of 17 percent of revenue under the CEMAC criteria); or payroll expenses as a share of tax revenue (35 percent ceiling under the CEMAC criteria). Article 4 of the Organic Law on Budget Laws and Budget Execution (LOLFEB) specifies that “the Government shall establish a medium-term fiscal policy in keeping with the criteria set by the conventions governing the Central African Economic and Monetary Community.” In addition, Organic Law No. 001/2014 of June 15, 2015, on decentralization, sets specific rules for local government budgets. The law ordains that loans taken out by local governments may only be used for investment expenditure7 and that operating expenses may not exceed 60 percent of the local government budget.8 In practice, however, and except for fiscal deficit targets, these rules are not observed (Table 3). With respect to local governments, the Public Expenditure and Financial Accountability (PEFA) assessment had shown that the share of operating expenses in their budgets exceeded that allowed by the law (up to a projected 76 percent).

17. A three-year macrofiscal framework was established prior to the preparation of the annual budget, but it is not aligned with fiscal policy. The Macroeconomic and Fiscal Policy Framework Document (DOCAMAB) is produced in June in connection with the budget proposal (PLF) for year n+1. As a fiscal stance discussion tool, the DOCAMAB projects fiscal revenue and expenditure for the PLF year (n+1) and the following two years. This document includes three-year projections of investment expenditure and synthetic sectoral data. However, the investment expenditure aggregates do not distinguish between new investment projects and those already being implemented. That distinction is only made for externally financed (FINEX) projects. Furthermore, the credibility of the macrofiscal framework is limited: the differences between the amounts first calculated for the first year and the amounts included in the budget proposal average more than 5 percent for 2017 and 2018 and differ by as much as 44 percent in 2017 for investments financed with own resources (Table 4).

Table 4.

Discrepancies Between the First Year of the DOCAMAB and the Corresponding Budget Law Amounts

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Sources: Gabon authorities; DOCAMAB; PLF.

18. Drawing up a fiscal framework is a relatively recent exercise and one that needs strengthening to pay more heed to investment. A fiscal framework document has been mandatory since the passage of Organic Law No. 020/2014 (LOLFEB) on May 21, 2015, and the program-budgeting reform that resulted from the incorporation of the CEMAC directives in public financial management. Article 5 of the law provides for an annual three-year projection of revenue and expenditure to serve as a benchmark for preparing the budget for year n+1. That fiscal framework exercise needs to be improved to (1) ensure observances of the various fiscal rules and (2) become a tool for better planning and forecasting of investment expenditure. In particular, the section on DOCAMAB investments needs to be completed, and the document needs to be published on a regular basis.

2. National and sectoral planning (institutional strength – weak; effectiveness – weak; priority of reforms – high)

19. Existing national and sectoral strategy documents do not include all of the projects in the budget. At the national level, the PSGE launched in 2012 is the benchmark strategic document establishing the Government’s broad objectives. It comprises separate sectoral strategies (Green Gabon and Industrial Gabon operational plans). Other strategic documents, drawn up after the PSGE, such as the 2017 Economic Recovery Plan (PRE), provide specifics for certain actions envisaged in the PSGE. All of these documents are available online. Nevertheless, none of these documents provides a detailed list of the activities or investment projects actually embodying the strategic guidelines or details of the costs, schedules, or even the ways they are to be financed. Unlike other countries, Gabon lacks a centralized system for planning investments from the national and sectoral strategy levels through to budgetary implementation. Line ministry investment projects are only tied in with PSGE objectives a posteriori, when they are monitored by the PSGE Coordination Office (BC-PSGE), which was formerly attached to the Office of the President and since early 2019 is attached to the General Secretariat of the Government (SGG). At the sectoral level, some ministries (water, energy, and national education) have a sectoral strategy document,9 and a National Infrastructure Development Program (SNDI) serves as a guideline for the execution of works carried out by the National Agency for Major Infrastructure Projects (ANGTI). These documents, which are not published, bear no clear relation to the national strategy; it is not easy to trace the projects in budget documents, given the lack of standardized nomenclature and presentation. Ultimately, the lack of consistency among the multiple national and sectoral strategic documents, the weakness or lack of units in charge of planning, and the dispersal of responsibilities all preclude a unified and coordinated vision of the different projects.

20. National and sectoral strategy documents do not contain reliable quantifications of the investments contemplated. Since the national strategic documents do not provide a breakdown of the various investment projects pursuing the strategic objectives of the PSGE, projects costs are established later, either in the sectoral documents or when a project is included in the budget. At the sectoral level, project cost assessments vary considerably from one document to another. The SNDI has a precise assessment of the different projects; the education sector document estimates project costs in a way that is barely trackable in the budget; the electrification master plan has no quantified list of projects. Furthermore, the absence of systematic prior feasibility studies makes it impossible to achieve reliable estimates of how much projects will cost.

21. Each ministry’s annual performance plans (projets annuels de performance [PAP]) include measurable investment targets. The PSGE does not come with a performance framework establishing objectives monitored with the help of targets and indicators. The thematic plans associated with the PSGE do list strategic objectives and actions to be undertaken to achieve them, but only sporadically do they come with measurable targets. Nor do the sectoral strategies come with a performance framework showing targets and indicators for outputs and outcomes. In contrast, the PAP that have been included in the annual budget documents since the reform implementing program-budgets do come with performance measurement frameworks for keeping track of investments in all sectors (Table 5).

Table 5.

Performance Indicators for Objective No. 1 of Mission 15 Construction, Social Housing, and Infrastructure

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Source: PLF 2019.

22. National and sectoral planning lacks coordination and barely functions. The strategy documents contain few precise data and figures for activities and projects with which to monitor progress in achieving objectives. Those shortcomings and the dispersal of the various units involved in planning directly impair program-budgeting and project implementation. Strategic planning needs to be thoroughly revamped by means of the following:

  • adoption of a written set of rules to govern the planning process and selection of investment projects

  • specification in the rules of the roles of those involved and the tools and procedures to be used

  • provision in the rules for the establishment of a centralized project database10

  • methodology for preparing sectoral strategies and gradually extending them to all ministries.

These developments should be accompanied by efforts to boost both central and sectoral planning. Box 3 illustrates the steps taken in Mali to coordinate its various strategy documents.

Mali’s National Planning Documents

In Mali, public investment planning uses three documents leading up to the investment budgeting phase.

The National Projects System (SNP)

This includes (1) a National Inventory of Projects (RNP), based mainly on information provided by national technical departments; and (2) a National Inventory of Agreements (RNA), based on information provided by donors and creditors.

The National Inventory of Projects (RNP)

The RNP database is available at the National Planning and Development Directorate and is regularly updated using information from project description datasheets. In addition to describing the projects that can be programmed, the datasheets can be fed into the projects portfolio of the RNP to track the progress of their implementation. Listed in the RNP are the projects and programs of the line ministries selected by the Project Selection Committee that have made sufficient progress in both project formulation and funding negotiations.

The Three-Year Investment Plan (PTI)

All projects—regardless of whether they are internally or externally financed—have to complete the various preparation phases before being included in the PTI. This requirement helps to ensure the effectiveness of public expenditure by giving projects a better chance of achieving their targets, thereby contributing to achievement of the overall objectives of Mali’s Strategic Framework for Economic Recovery and Sustainable Development.

The three-year investment program serves as a tool for coordinating planning and budgeting. The first year of the program matches the investment budget in the budget law. The PTI is a year-on-year plan based on the fiscal year. The procedure makes it possible to cover all areas of government investment with respect to both internally and externally financed investment projects.

The PTI needs to echo the country’s priority development objectives and sectoral strategies and to take macroeconomic and financial constraints into account.

PTI projects cover the four planning areas: (1) rural economy, (2) manufacturing (the secondary sector), (3) infrastructure, and (4) human resources.

Source: Mission.

3. Coordination between central and local government levels (institutional strength – medium; effectiveness – weak; priority of reforms – medium)

23. Local governments11 have investment expenditure plans compiled in coordination with the central government. To finance their investments, local governments have what are known as special resources, such as donations, bequests, or assistance funds, as well as resources provided by the Departmental Initiative Fund (FID).12 Local governments may also resort to borrowing; the proceeds must be entirely devoted to investments. With UNDP support, all local governments in Gabon have drawn up strategic Local Development Plan documents (PDL), which include lists of projects. The preparation of the PDL was coordinated with the ministry in charge of decentralization, with line ministries taking part during the design phase. A summary of the projects mentioned in the PDL has been put together by the ministry responsible for decentralization. However, the PDL have not been published. Moreover, in practice, local government participation in executing PI is limited or nonexistent. Although projects to be funded by the FID have been included in the budget FID in the past three years, no PDL project has yet been financed; the use of the amounts involved is subject to approval by the General Directorate of Budget and Public Finance (DGBFIP)13 without any rules having been set in that regard. Investments to be implemented locally are, in practice, decided on at the central government level; local governments do not make financing decisions or participate in either the design or management of the projects. The state still funds the clear majority of investment expenditures; some investments decided on at the local government level are financed using own resources, with little coordination with the central government.

24. There are no rules governing transfers to local governments, which are difficult to predict. The 2015 decentralization law allows local governments to draw up preliminary budgets prior to the beginning of the fiscal year, which are then completed by a definitive budget once transfer amounts are confirmed following adoption of the budget law. The amounts of those transfers are established in connection with the annual process of drawing up the budget for year n+1, in which local governments do not participate. As underscored by the PEFA evaluation, most transfers are calculated under a rule established by an ordinance issued in 1981. Later, at the start of the fiscal year, local governments are notified of the amounts allocated to them.14 During execution, actual mobilization of the transfers envisaged in the budget laws is random. As discussed, no local investment has been funded by the FID despite being including in the budget. The government is assessing the possibility of having local governments participate in the process to give more consideration to their needs and to facilitate the financing of initiatives.

25. No document identifies the contingent liabilities derived from investment projects, and no unit keeps track of them. Contingent liabilities are not identified, charted, or monitored, irrespective of the government entity concerned (the state, local government, state-owned enterprise, or public institution) or of the type of contract (such as concessions or PPPs). Despite the existence of contingent liabilities in certain current contracts—primarily in the water and electricity sectors—the data regarding them are not compiled systematically, their potential impact on public finance is not analyzed, and no risk mitigation measures are taken as a precaution. These shortcomings are due to the absence of an operational arrangement or unit for centralizing the information. Responsibility is dispersed across ministries, the local governments directorate, and the PPP Unit attached to the National Agency for Investment Promotion (ANPI). Government enterprises and institutions are not monitored, given that the unit recently created at the DGBFIP to conduct that financial surveillance—following a decree issued by the Minister of Budget and Public Accounting on October 23, 2018—is not yet functional. In short, as of now, there is no budget document for assessing the costs and potential impacts of contingent liabilities, even though Article 11 of the LOLFEB provides for production of an annex to the budget law on fiscal risks.

26. Coordination of investment management among government entities is weak, and recent initiatives to improve it have not yet taken hold. Some positive steps to enhance the coordination of PI have been taken in recent years, such as the drawing up of PDL for all local governments, the establishment of the FID, and the creation of a separate unit devoted to PPPs. However, that coordination needs to be consolidated: (1) the grounds for allocating funding to local governments need to be clear and objective; (2) the unit in charge of monitoring government enterprises or public institutions (GE/PI) in the DGBFIP needs to become operational; and (3) investments made by all public entities (including local governments and GE/PI) need to be monitored and identified in budget documents, along with contingent liabilities, especially those associated with PPPs.

4. Evaluation of projects (institutional strength – weak; effectiveness- weak; priority of reforms – high)

27. The institutional framework encourages prior studies evaluating major projects, but they are rarely conducted. Decree No. 00199/MBCP of September 8, 2016, specifying terms and conditions governing project eligibility provides for systematic study of the socio-economic, technical, financial, environmental, and institutional feasibility of projects. Furthermore, a structural benchmark of the economic program supported by the IMF requires that any project costing more than CFAF 20 billion must undergo a cost-benefit analysis. Under current arrangements and in regulations, no provision is made for entrusting an independent body with prior assessments. In practice, (1) studies for major projects are generally conducted after the projects are included in the budget, given that those studies are financed out of the budget appropriation, or else they are carried out directly by partners and lenders after the project agreement; and (2) the IMF’s structural benchmark has not yet been applied because of the lack of projects that reach the CFAF threshold for the 2019 Budget Law. Only studies for externally funded projects are actually published.

28. The existing framework for carrying out project evaluations is not effective. The project assembly guidelines produced in 2012 proposes a standard methodology for assessing the technical, socio-economic, environmental, institutional, and financial feasibility of projects. Nevertheless, the contents of those guidelines and the methodology proposed are vague, unenforceable because they are not endorsed by any law or regulation, and not applied. Even though its charter does not entrust this task to it15, ANGTI does have resources in its budget for prior studies that it can either conduct directly or support by providing funding to certain line ministries. Other line ministries can also conduct studies, as can ANPI in its quest for PPPs, with each authority applying different methodologies. In practice, prior evaluation of projects does not occur: ANGTI has not conducted any recent study and, as pointed out, most studies are conducted directly by lenders or investors after entering into a contract with the state.

29. Risk assessment is envisaged in connection with project selection, but it is not systematically practiced. The methodology established in the 2012 project assembly guidelines includes risk analysis (input and output prices, political measures, and natural factors) in project feasibility analysis. However, the methodology does not call for the establishment of risk mitigation measures and is not binding. In practice, certain project evaluation documents include a risk analysis and identify mitigation measures; however, those documents are not available for all projects, even all major projects. The procedures followed are also neither systematic nor homogeneous. The annex to the budget law on risk assessment called for under Article 11 of the LOLFE and listing risk mitigation measures has yet to be produced.

30. Ex ante project evaluation is not performed, due to the lack of properly structured organizational arrangements and a binding methodology for it. Ex ante evaluations are generally performed after projects have been included in the budget. The part played by ANGTI in conducting evaluations is more of a pragmatic response to a need than a well-thought-out organizational approach to the tasks and functions of public investment management. Feasibility studies are an essential stage in the project cycle that shapes the chances of subsequent stages developing as planned. The aforementioned redefinition and revamping of the roles of those involved in planning, along with the establishment of a centralized project database, should help systematize and enhance the quality of ex ante evaluations. It is also necessary to mandate by statute the ex ante evaluations of major investment projects and to allocate the financial resources needed to conduct these studies, while clearly specifying the rules governing the use of those funds.

5. Alternative financing of infrastructure (institutional strength – medium; effectiveness – weak; priority of reforms – medium)

31. The regulatory framework governing competition is relatively complete, but little advantage is taken of it, and openness to competition varies sharply from one sector to another. Several independent economic regulators, such as the Electronic Communications, Postal and Print media distribution Regulatory Authority (ARCEP),16 the Drinking Water and Electricity Sector Regulatory Agency (ARSEE),17 or the Rail Transport Regulatory Agency (ARTF),18 have been in place for several years (founded in 2012, 2010, and 2010, respectively). Law 5–89 on competition banned anticompetitive activities, except for those established by law, and established an advisory commission responsible for reviewing and making recommendations on any competition-related issue. Private operators may intervene in certain markets but on terms set by law: for example, in the electricity sector, only generation is not a monopoly; transportation and supply are a monopoly of the Energy and Water company of Gabon (SEEG).19 Rates are regulated and may be altered through adjustment mechanisms. A formula for reviewing rates is negotiated and specified in the concession contract between the state and private operators. In practice, however, competition is limited.

The presence of private operators varies from by sector. Several operators are found in the telecommunications sector, for instance,20 but this is not the case in the water supply sector, in which several segments are a monopoly. In addition, large government procurement operations for the provision of equipment/infrastructure in the water and electricity sectors, restricted or direct, use discretionary tenders. Finally, in practice, the regulators’ functions are not effective when it comes to rates charged or the awarding of licenses; their independence is limited when, as in the case of ARSEE, their funding comes solely from the Government budget.

32. The PPP management framework is recent and needs to be completed and better coordinated with other PI. The legal framework relating to PPPs consists of Ordinance No. 009/PR/2016 of February 11, 2016, and Law No. 020/2016 of September 5, 2016, as well as several enabling regulations. This recently established framework takes its inspiration from international best practices and helps steers project preparation and selection. The framework does not, however, contain rules governing unsolicited bids and is not completely aligned with government procurement rules; as a result, the Public Procurement Authority (ARMP) is not competent to hear appeals against the awarding of contracts to PPPs. The recently established Public-Private Partnerships Support Unit (SU-PPP) is not yet fully operational. In practice, projects financed through this mechanism are not identified in the budget, even though several PPP-financed projects are currently being implemented, including the new Libreville airport project. In addition, the decision to resort to this type of financing, the state’s financial commitments, and the mechanism for remunerating partners are discussed separately and irrespective of budget tradeoffs. Finally, there is no national strategy with respect to PPPs and no comprehensive list of PPP projects.

33. The supervision of investments carried out by public institutions and enterprises is not organized and lacks a rationale encompassing PIM as a whole. The supervision is conducted by having state representatives serve on boards of directors, but there is no well-organized, overall review and consolidation of the financial and fiscal data relating to investments by the PIs, PCs, or PPPs. These players are mentioned in the PAP as operators who help attain the program’s objectives, but only the subsidies from which they benefit are identified. In contrast, the budget documents do not mention their investment operations that may help achieve the sector’s objectives. For example, investments by the SEEG are not identified in the PAP of the Water and Sanitation Resources Management program, although those investments may serve the country’s water stress reduction goals.

34. Despite recent progress in strengthening the institutional framework, private sector participation in the financing of public infrastructure is conducted on terms that pose a risk to the state. The legal framework and the presence of regulators, in theory, are conducive to competition in major infrastructure procurement; in practice, however, such competition is limited, and regulators fail to perform their functions or lack the means to do so. The only recently established PPP management framework is neither complete nor fully operational. The lack of a strategy to guide recourse to PPPs and the lack of coordination with other PI reduce the effectiveness of this form of financing and detract from the transparency of agreements.

Finally, there is no coordinated and centralized monitoring of investments by PIs and PCs. This state of affairs could be improved by the following: (1) boosting the independence of regulators by endowing them with own resources identified in the budget; (2) completing the PPP management framework by including rules regarding unsolicited bids (Box 4) and completing the regulatory framework for procurement by including PPP-related aspects; (3) identifying PPP projects in budget documents (annexes to investment projects and ministerial PAP) and including an assessment of contingent liabilities in the annex to the budget law on risks; (4) including the option of resorting to PPPs in the general considerations regarding investments during the annual drafting of the budget law; and (5) doing whatever is required to make the unit in charge of monitoring PPPs fully functional and effective.

Spontaneous Bid Management

A spontaneous bid occurs when a private transactor submits a bid to a public partner, without the latter having first envisaged or prepared a similar project or without having invited the transactor to do so via the public procurement process.

Spontaneous bids may have advantages, including the following: (1) developing innovative solutions in certain sectors; and (2) helping resolve difficulties encountered during prior project appraisal. They may also help authorities to gain a better understanding of the areas for which they are responsible and a more in-depth insight into economic agents’ interests.

Nevertheless, spontaneous bids also come with certain risks due to their uneven quality:

  • These bids may not necessarily fit in with the public investment programming cycle.

  • Spontaneous bids tend to underestimate the nature and costs of the risks run, explicitly or implicitly, by the authorities.

  • Finally, entering into partnerships with the private sector based on spontaneous bids may give the appearance of undermining transparency, which is a key principle in the public procurement process.

Accordingly, the contracting authorities contacted by private transactors need to have specific methodological tools at their disposal to handle spontaneous bids. Doing this requires the following:

  • Establishing competition for the project: Even if, after reviewing the spontaneous bid, the public partner wishes to proceed with the projects, it is in its interest to put it up for competition, via an open tender, rather than engage in an direct arrangement with the bidder.

  • Providing guarantees for the private sector: To encourage private transactors to assume the responsibility of preparing high-quality spontaneous bids, they need to be convinced of the commercial viability of the undertaking. To that end, the public partner needs to seek to reformulate the project within the framework for preparing tenders and, in particular, to base it on sought-after objectives and expected results, rather than on means that have yet to be put in place.

  • Establishing shared procedures: To achieve the identified objective, the contracting authorities need to develop and implement clear, well-established procedures in accordance with the provisions specific to public procurement and to share them with the interested private transactors. In particular, it is important to ensure that private transactors clearly understand how their spontaneous bids are handled.

Five essential strategic questions need first to be answered by government decision-makers:

  • 1. Are the spontaneous bids authorized?

  • 2. What are spontaneous bids expected to offer?

  • 3. How should spontaneous bid management policy be included in the existing regulatory framework?

  • 4. To what extent will the promoter of the spontaneous bid be able to participate in the development of the project?

  • 5. What kinds of public procurement and incentives will be authorized?

The following decision tree illustrates the appraisal process and how to handle spontaneous bids.

Source: Mission, based on guidelines for handling spontaneous bids in Senegal and documents of the World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF).

B. Ensuring Public Investment is Allocated to the Right Sectors and Projects

35. A sound public finance management system has three objectives, one of which is the efficient allocation of resources.21 With respect to investment, this objective entails allocating resources to sectors and projects likely to generate growth and/or reduce poverty. Here, pillar 2 of the PIMA seeks to ensure the following: (1) budgeting is done from a multiyear sustainability perspective and takes the overall costs of investment projects into account; (2) the budget is comprehensive and unified in both its preparation and presentation; (3) appropriate provision to protect investments already under way are in place; (4) operating and maintenance costs of physical assets are correctly appraised when it comes to launching projects; and (5) investment projects are selected on the basis of objective criteria.

36. Despite relatively robust budgeting of investment outlays, there are major shortcomings with project selection and the programming of funding for them. The program-budgeting reform and the adoption of the LOLFEB since 2015 have greatly improved multiyear budgeting. The budgetary exhaustiveness and unity principles are likewise built into the provisions of the LOLFEB. However, more needs to be done to apply those principles. Furthermore, maintenance expenses are not taken into account when the budget is drawn up and financing remains problematic. Finally, more transparency is needed with respect to project selection criteria and procedures.

6. Multiyear programming (institutional strength – medium; effectiveness – weak; priority of reforms -high)

37. The LOLFEB provides for three-year programming of capital expenditure, but there is still room for improving projections. Articles 5 and 20 of the LOLFEB specify that the Government must prepare and publish a medium-term budget framework (MTBF), with three-year projections of fiscal aggregates. Based on that MTBF and within the ceilings established in it, the Government establishes the medium-term expenditure frameworks (MTEF), with a breakdown of the major public expenditure categories by type, purpose, and program. In practice, this budgeting framework essentially relies on two programming tools: the Macroeconomic and Fiscal Policy Framework Document (DOCAMAB) and the Annual Performance Plans (PAP). The DOCAMAB presented to Parliament during the fiscal stance debate contains aggregate three-year projections of capital expenditure and is not published. The PAP annexed to the budget law have been showing three-year budget appropriations since 2017, classified by purpose and program. However, sectoral MTEF are not yet being produced, and the list of investment projects is provided on an annual basis.

38. The multiyear ceilings prescribed by the LOLFEB are not applied. Article 36 of the LOLFEB establishes the commitment authorizations (CA) principle and provides for a detailed schedule of payment appropriations (PA). In addition, Article 10 of Law No. 021/2014 of January 30, 2015,22 provides for complete quantification of the fiscal impact of government decisions. Furthermore, Article 17 of Decree No. 0078 of March 4, 2014,23 states that institutions and ministerial departments shall draw up their proposed budget on the basis of a multiyear expenditure framework, in keeping with the ceilings instructions (lettres-plafonds) of the Prime Minister, sectoral plans, and the Government’s strategic guidelines. Nevertheless, the DOCAMAB establishes aggregate capital expenditure ceilings that are not broken down by ministry. Moreover, those ceilings are indicative rather than mandatory, and they are regularly adjusted in annual reviews, thereby giving ministries a less clear picture of their multiyear investment projects (Table 4).

39. The budget documents do not show the programming of the total cost of each major investment project or its breakdown by year. The LOLFEB requires that total expenditure costs be included in the budget and systematically published. Nevertheless, neither the total cost nor a detailed timeline for project implementation are provided in the budget documents. That information may appear in sectoral strategies, but not systematically, and the strategies are not published. Moreover, while the PAP annexed to the budget law do show three-year projections for investment projects, broken down by purpose and by program, they do not show the total cost of major projects. Finally, the list of investment projects annexed to the budget proposal shows the cost of projects only for the corresponding fiscal year.

40. Strengthening the multiyear programming mechanism is essential for establishing a reliable and sustainable investment program. The budget preparation timeline must ensure proper coordination between the drafting of multiyear programming documents (MTBF, MTEF, PAP) and the programming of public investment projects. In addition, the DOCAMAB must include detailed information regarding the three-year projections, broken down by ministry and capital expenditure plans, to obtain a complete overview of investment expenditure. At the same time, to obtain a better grasp of the financial impact of projects, improvements in the presentation of the list of investment projects annexed to the budget law are needed; the drawing up of a public investment program (PIP)24 is a short-term priority. For each investment project, the PIP needs to show three-year expenditure projections, total project cost, total expenditure executed, total expenditure remaining, breakdowns for each of the three years, and expenses extending beyond the period covered by the public investment program (Box 5 and Annex III). Finally, the gradual introduction of CA and PA will make programming credible and facilitate alignment between the DOCAMAB forecasts and those of the budget proposal.

The Public Investment Program


The Public Investment Program (PIP) is a tool for ensuring consistency between PI expenditures and the overall macroeconomic framework and the broad lines of Government policy. It constitutes a multiyear (normally three-year), year-on-year, public investment programming framework, in which the first annual tranche is consistent with the amounts established in the corresponding budget law. This tool provides an overview of investment projects and increased transparency in fiscal management.


The PIP encompasses all of the projects to be carried out over a given period, based on priorities and available resources, which may come from different sources (the national budget, external financing [FINEX], PPPs). It entails multiyear investment management, as well as an annual review to adjust forecasts for the following years. That adjustment is based on the progress made by projects under way and the level of maturity of new projects to be included in the program. Certain criteria are established for a project to be included in the PIP, especially the following:

  • Consistency with strategic development priorities

  • Prior studies and ex-ante appraisal

  • Availability of financing (external or domestic funding agreements)

  • Existence of a work program or technical and financial execution program (start and end of the work).

A sample PIP format is attached to this report (Annex III).

Preparation process and schedule

Drawing up the PIP is an iterative and consistent procedure, for which general guidelines need to be established each year in a budget programming circular prepared in advance of the budgeting process itself. The various stages involved in drawing up the PIP should be included in the budget preparation schedule:

  • Development of the three-year programming frameworks (MTBF/MTDF)

  • Establishment of capital expenditure ceilings for each ministry

  • Physical and financial execution summary of ongoing projects

  • Appraisal and selection of new projects

  • Drawing up of the program based on a questionnaire or project datasheet type of form to be filled in by the ministries (a sample format is shown in Annex IV).

Source: Mission.

7. Budget comprehensiveness and unity (institutional strength – high; effectiveness -medium; priority of reforms – medium)

41. Although budget comprehensiveness is a principle clearly asserted and guaranteed by the LOLFEB, major investment operations are not identified in the budget. The LOLFEB prescribes that the budget must cover all levels of government and government agencies receiving public funds and that no revenue may be earmarked in advance for any particular expenditure, except for operations in supplementary budgets and special-purpose accounts. In such exceptional cases, the expenditures shall be provided for, authorized, and executed on the same terms and conditions as apply for the general budget. In fact, the budget law and its annexes do not identify all capital expenditure. A significant portion of public investment is carried out by public institutions and local governments. This lack of comprehensiveness of the information contained in the budget precludes accurate and reliable knowledge of the actual level of public investment. Thus, projects financed or managed by the Gabonese Strategic Investment Fund (FGIS) or the National Agency for Investment Promotion (ANPI) are not included on the list of public investments annexed to the budget law and are not centralized.

42. In principle, the budget law covers most internally or externally financed investment expenditure. However, it does not include information on PPPs. Articles 9 and 13 of the LOLFEB specify that all contributions by national and international donors and creditors must be included in the budget. Article 36 states that investment operations under PPPs are included in the CAs. However, the budget does not fully include all government investment outlays, and projects carried out under a PPP contract are not included in the budget documents. PPP projects follow their own management and preparation procedures, just as the state is tending to increasingly favor this kind of financing, given the cash flow constraints it faces. According to ANPI, out of some 40 PPP projects, about 10 are under way without any available financial information about those contracts.

43. Current expenditure and capital expenditure budgets are drawn up by a single ministry and shown in the budget law, broken down by purpose and program. Decree No. 0078 of March 4, 2014, vests only the Ministry of the Economy and Budget with the authority to draw up the budget law and establishes rules governing the presentation of operating and investment expenses. As the body responsible for consolidating the budget law, the DGBFIP ensures that there is a coordinated approach to investment and operating expenses. The latter are included in the same budget; the special procedure for drawing up and adopting them is the same for both of those expenditure categories. The recent government restructuring that merged the Ministry of the Economy and the Ministry of the Budget reinforces that principle of a unified budget and makes it possible to fully integrate the entire chain of steps used to process projects and the funding for them. Despite this unified handling of all expenditures, only limited heed is paid to future current expenditure related to infrastructure maintenance, because the amounts involved are not reported in the information provided by the line ministries.

44. Greater comprehensiveness is essential to ensure that investment expenditure is allocated in a thorough, well-coordinated, and efficient manner. Although the principle of a unified budget has been accepted, the current investment budgeting procedure is not yet watertight. Gaps persist in budget coverage, making it difficult to fully assess the impact of investments carried out. Not all investment outlays are shown in the budget documents, especially those effected by autonomous government entities or financed by PPPs. No annex to the budget law identifies the investment expenditure of national public institutions, such as the FGIS. Budget information needs to be enriched with those data to enhance financial transparency and better manage the fiscal and cash flow impact of the complete set of investment operations. The recent establishment of a unit in the DGBFIP to conduct financial surveillance of those institutions should facilitate the gathering and analysis of the data needed. Similarly, to ensure a complete overview of expenditure, the line ministries should report the future current spending amounts needed for maintenance.

8. Investment budgeting (institutional strength -medium; effectiveness – weak; priority of reforms – medium)

45. Multiyear budgeting of investment expenditure is not yet being practiced, and budget documents do not include the total cost of projects. Article 36 of the LOLFEB specifies that the CA set the ceiling on expenses, payment of which may extend over several years. However, current budget procedure has not yet implemented that mechanism. In the budget law, CA are equivalent to PA, and the budget documents remitted to Parliament make no mention of the total cost of projects. The current investment project preparation mechanism cannot guarantee completion of the projects.

46. Transfers of capital expenditure appropriations to current expenditures are prohibited by law; in practice, however, projects suffer from substantial underexecution. Article 40 of the LOLFEB establishes that investment expenditure appropriations may not be reduced within a program. Article 45 sets a limit on transfers of appropriations equal to 2 percent of the appropriations provided for in the budget law. In practice, investment appropriations act as adjustment variables in the event of funding constraints. Figure 14 illustrates the—sometimes considerable—gaps between budget law forecasts and the execution rate. That same figure shows major discrepancies in forecasts between the budget proposal and the supplementary budget. In 2018, in particular, the lowering of investment appropriation forecasts led to higher appropriations for operating expenses.

Figure 14.
Figure 14.

Forecasting and Execution of Investment Expenditure and Recurrent Spending

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Source: Initial budget law, budget proposal, and supplementary budgets (LFI, LFR, Lois de règlement).

47. The procedure for drawing up the budget prioritizes inclusion of projects already under way, but that principle has never been stated in an official document. The budgeting procedures accord priority to projects that are consistent with the PSGE, to projects under way, and to external financing counterparts. However, those principles have not been formally established, and the inclusion of new projects in the budget may impair funding for projects under way. Analysis of the list of projects for the 2019 budget law shows that more than half of them are new, a finding that does not suggest prioritization of projects under way. Moreover, the way that projects are listed in the budget does not distinguish between current and new projects: the nomenclature used for projects under Title V makes it impossible to identify them. Within a given purpose, which is then further broken down by programs, all projects are grouped together in a single operational unit on the same line, with no possibility to differentiate between projects or the departments in charge of implementing them. This approach impairs both budget readability and the transparency surrounding the execution of investment expenditure.

48. The regulatory framework is intended to protect investment expenditure during budget execution but, in fact, it is not very effective. The reforms undertaken by the Government in recent years have improved the fiscal framework, especially since the passing of the LOLFEB. However, budgeting procedures do not fully guarantee the quality and credibility of investment expenditure, The prioritization of investment outlays and the analysis conducted by the DGBFIP should be supported by a budget programming circular and project fact sheets (see Annex IV) to be filled in by the line ministries to consolidate and harmonize information regarding projects. Furthermore, project codification needs to be improved to facilitate the identification of the units in charge of managing expenditure. Finally, the gradual transition to CA-PA budgeting should lead to the inclusion of a ceiling that takes the total cost of a project into account. Those actions should be accompanied by capacity-building for DGBFIP personnel and the upgrading of I. tools.

9. Financing of maintenance activities (institutional strength -weak; effectiveness -weak; priority of reforms – high)

49. There is no standard methodology for appraising current maintenance needs, and recurrent costs are not taken into account in the projects. No methodology has been established for estimating recurrent costs, and the line ministries do not assess them. The project assembly guidelines developed by the DGBFIP in 2012, describing the procedures that line ministries must follow when preparing projects to be included in the budget, do not require consideration of recurrent costs, and there are no rules governing maintenance cost estimates.

50. Estimates of the cost of expenses involved in major improvements are not based on any standard methodology, and maintenance is underfunded. There is no centralized standard methodology for determining major maintenance costs and how to finance them. Certain sectors have established rules for estimating maintenance costs. In the energy sector, for example, maintenance costs are supposed to be based on an operating costs benchmark,25 which, however, is not applied. For the roads sector, the calculation of road maintenance expenses is based on the findings of studies of degraded works and on consideration of the urgency of upkeep. Since the 2019 budget law, those expenses have been included in the budget and broken down by project in the road stock management and fuel quality control special-purpose account. They are financed out of the Road Usage Fee (RUF) and included in the list of investments annexed to the budget law. However, the expenditure execution rate is low, and the amounts entered in the budget do not necessarily reflect maintenance financing needs (Table 6).

Table 6.

Road Maintenance Expenditure (CFAF billions)

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Sources: Budget execution reports; 2019 budget law; and PAP task 68.

51. Current servicing expenses are not identified in the budget, which only shows certain major maintenance costs. Current servicing expenses should be included under Title III (goods and services expenses), and periodic maintenance should be included under Title V (investment expenditure). However, routine servicing expenses and expenditure on major improvements are not systematically identified in the budget, with the exception of road maintenance expenses.

52. Upkeep of infrastructure requires predicting expenditure on servicing, regular maintenance, and major maintenance using a standard methodology. Line ministries do not calculate current servicing needs, so those expenses are not taken into account when the budget is drawn up. Introducing a methodology and procedures for calculating servicing and maintenance costs is essential for the efficient management of investment. Those servicing expenditure forecasts need to be clearly identified in the PAP. The project assembly guidelines should be updated to include the obligation to predict project servicing costs. The guidelines should also specify the methods to be used to calculate the amounts needed to cover current and periodic maintenance expenses.

10. Project selection (institutional strength -weak; effectiveness – weak; priority of reforms – high)

53. The institutional framework prescribed in the regulations for validating development projects has not been set up. Two regulatory documents establish central bodies, at the technical and strategic levels, to examine all projects to be included in the budget. The Inter-ministerial Development Project Validation Committee, known as the Sectoral Studies Committee, was established by Decree No. 00198/MBCP of September 8, 2016, 26 to select the development projects to be included in the budget proposal and to monitor their implementation. It is chaired by the Minister in charge of the budget. At the strategy level, a decree issued in February 2019 instituted the Inter-ministerial Commission for Validating and Coordinating Investment Programs in the Gabonese Republic, chaired by the Minister in charge of the Economy and the Budget. Its purpose is to coordinate the programming and validation of investment projects. It also monitors the financing of those projects, their successful completion, and their impact on the economy. In practice, neither of these two bodies is up and running; the job of reviewing, examining, selecting, and prioritizing projects is performed by the Coordination Office of the Emerging Gabon Strategic Plan (BC-PSGE), which used to be attached to the Office of the President and which since February 2019 has been part of the General Secretariat of the Government (SGG). The DGBFIP notifies the BC-PSGE of the budget amount available for investment expenditure and does not undertake any second opinion of the projects selected.

54. The investment project selection procedure is insufficiently regulated, and selection criteria are too broad. They are also not published. Decree No. 00199/MBCP of September 8, 2016, establishes the terms and conditions for a project to be eligible for inclusion in the PIP, including a prior study comprising: (1) the context and grounds justifying the project; (2) the feasibility of the project; (3) the logical framework; (4) the project appraisal and monitoring and evaluation; and (5) the sustainability of the benefits of the project. These provisions are only partially applied, and the criteria are not published. In addition, the 2012 project assembly guidelines specify the stages to be followed in drawing up projects that will contribute to implementation of the PSGE. However, the guidelines are not used. In practice, project selection/prioritization starts with guidelines issued by the Head of State. Next are projects already under way, followed by externally funded projects, and, lastly, new projects. Financing permitting, political trade-offs are always possible.

55. The Government has no list of mature projects, and the procedure for selecting projects to be included in the budget lacks transparency. Each of the actors involved in PIM draws up its own separate list of investment projects. The BC-PSGE, which officially decides the projects to be included in the budget, has at its disposal the list, provided by the line ministries, of projects ready to be budgeted. At the same time, other entities, such as FGIS and ANPI, also have their own lists of infrastructure projects and projects to be implemented under PPP contracts. Except in the case of externally financed projects, sectoral ex ante appraisals for drawing up these lists are not systematically conducted. Studies are mostly conducted after a project has been selected and are sometimes even conducted directly by the private investor concerned.

56. Formalizing the project selection and prioritization procedure is essential to guarantee efficient investment. Getting the Sectoral Studies Committee and the Inter-ministerial Commission up and running is a short-term priority. Project selection procedures need to be clearly defined and communicated to all those involved in PIM. Currently, the criteria used to select projects are very broad and could lead to projects that are less than mature being included in the budget. Moreover, the failure to make public the selection criteria and the lack of transparency regarding the procedure mean that there is no guarantee that new projects selected align with PSGE objectives. Finally, capacity-building is needed at both the central and sectoral levels to enhance expertise and evaluation skills.

C. Delivering Productive and Durable Public Assets

57. The implementation of PI projects needs to deliver productive and durable public assets. Economically profitable and timely implementation of PI projects requires comprehensive financing, effective management, and thorough and transparent monitoring and evaluation mechanism. This PIMA evaluation pillar seeks to determine whether the authorities:

  • Have an effective procurement and procurement monitoring mechanism evaluated by implementing: (1) open and competitive procedures; (2) an appropriate system for monitoring procurement; and (3) equitable procedures applied in a timely fashion for examining complaints.

  • Make financing for capital expenditure available on time, which is gauged by assessing: (1) the capacity of ministries and institutions to plan and commit their investment expenditure in advance, thanks to reliable cash flow projections; (2) timely disbursement of the funds allocated to the expenditures concerned; and (3) the inclusion of external financing in the Treasury Single Account (TSA).

  • Appropriately manage and monitor implementation of the whole investment portfolio, as indicated by the existence: (1) of a physical and financial mechanism for monitoring major projects during their implementation; (2) of mechanisms for transferring appropriations from one project to another; and (3) a posteriori studies of projects that have reached the end of the implementation phase.

  • Manage and oversee PI projects during implementation, as indicated by: (1) the existence of an effective project management system; (2) the issuance and enforcement of rules, procedures, and directives on adjustments to projects; and (3) the performance of ex post external audits.

  • Guarantee monitoring of public assets by recording them and their value accurately in financial statements, as indicated by: (1) regularly updating assets records, based on an analysis of the stock of assets, their value, and their condition; (2) recording the value of these nonfinancial assets in the government’s financial accounts; and (3) recording the depreciation of the fixed assets concerned in the state’s income statement.

58. Execution of investments is weak with respect to procurement procedures, the mobilization of financing, and project monitoring and oversight. This weak performance has to do with the difficulty of implementing an institutional framework that still needs developing, particularly with respect to government procurement and management and monitoring of the PI portfolio.

11. Government procurement (institutional strength – weak; effectiveness – weak; priority of reforms- high)

59. Few major project contracts are awarded via a competitive process, and the public has little access to information on government procurement. The Public Procurement Code (CMP) advocates openness, 27 that is, competitiveness and transparency,28 in procurement processes via public access to information. 29 Thus, the World Bank’s recent assessment of the public procurement system30 highlights the incomplete and/or obsolete nature of the enabling regulations for the CMP, especially the procedures manuals.31 In particular, the Gabonese authorities lack a manual on government procurement plans. In practice, most contracts are awarded by direct (private treaty) agreement.32 The public has only limited access to government procurement information. Only the legal framework for it is made available to the public. Opportunities to bid are only published when contracts are awarded via invitation to tender. The awarding of contracts, information on the settlement of complaints, annual statistics, and procurement plans are not published.

60. Incomplete information in the database impedes proper monitoring of government procurement. The institutional framework for procurement calls for a system that makes it possible to monitor procurement via the establishment of a database, but it has still to be documented when it comes to the formats for standard analytical reports. This framework33 does not specify the authority responsible for gathering information and documents, with a view to setting up an electronic database and producing an annual report on the effectiveness and reliability of the government procurement system. It entrusts that task to the Directorate of Public Procurement (DMP) in the DGBFIP and to the Public Procurement Authority (ARMP), which do little to ensure the availability of complete information. In addition, the framework also fails to specify the terms and conditions governing timely provision of government procurement information. In practice, the authorities have no public procurement information management system. The information in the procurement database is incomplete and not available in a timely manner. The DMP has a database, but it, too, is incomplete. In particular, no mention is made in procurement plans of contracts entered into by direct (private treaty) agreement, and information is not fully centralized by the DMP and ANGTI.

61. The procedure for dealing with procurement-related complaints is not applied in an equitable manner. The regulatory framework34 mentions general principles needed to ensure fair and prompt examination of procurement complaints. However, the World Bank study points out that the designation of ARMP as an independent authority is not guaranteed, given that it backed by a simple decree rather than by a law. 35 Moreover, neither the procedures for friendly settlement of disputes nor the deadlines are specified. In practice, the mechanisms for handling complaints and disputes36 by the Disputes Settlement Committee are not used, since that committee has not been installed.

62. Improving the procurement system in connection with PI projects to optimize resources is a high priority. Gabonese authorities are unable to do the following: (1) put mechanisms in place to ensure competitiveness and the public’s access to procurement information; (2) adequately monitor procurement to ensure that the system is functioning properly, steer use of the mechanism, and deal with issues related to it; and (3) effectively examine procurement-related complaints, to assess whether the system is correctly designed and functioning as it should. Several measures could boost the institutional framework for procurement linked to PI projects and ensure that it is fully applied: (1) further drafting and promulgation of regulations and manuals for enforcing the Public Procurement Code; (2) systematic recourse to open tenders for selecting providers within the framework of the provisions set forth in the Procurement Code; (3) establishment of a public procurement internet portal posting complete and reliable procurement information; (4) deployment of a separate information system for monitoring and managing public procurement; and (5) legal basis for the designation of ARMP as an independent administrative authority and installation of the Dispute Settlement Committee.

12. Availability of financing (institutional strength – medium; effectiveness – weak; priority of reforms – high)

63. Ministries and institutions are not in a position to plan and commit investment project expenditure in advance, based on reliable cash flow forecasts. The CMP37prescribes that procurement plans must be drawn up. The LOLFEB38 mentions the drawing up of a commitment plan and a cash flow plan to be annexed to the budget law. However, there are no specific guidelines to assist with the actual drafting and coordinating of the various tools for programming and budget and financial execution.39 An annual circular from the Prime Minister on fiscal management for the year establishes general principles but does not enable the authorities to plan and commit their investment expenditure in advance. In practice, cash flow forecasts are made40 and regularly updated; however, the cash flow committee is not effective,41 and there is no guarantee that the information is reliable.42 Moreover, line ministries and ANGTI are not notified in good time of the commitment ceilings established for them.43

64. The funds earmarked for project expenditure are not disbursed on time due to severe cash flow constraints. The regulatory framework has not been updated with respect to intermediate and overall processing times in the chain of budgetary, accounting, and financial execution of PI project expenditure.44 In keeping with the CEMAC rules, the decree45 on the government flow of funds table (TOFE) establishes amounts still pending payment. The LOLFEB46 prescribes that those pending payments must be annexed to the supplementary budget. The VECTIS app has a module for monitoring payment times with early warning or alert features. Payment arrears are closely monitored under the program entered into with the IMF, and the Gabonese authorities publish quarterly reports keeping track of outstanding and unpaid balances. In practice, given the large volume of domestic and external debt arrears,47 expenditures on internally and externally financed PI projects are subject to severe cash flow constraints, which is detrimental to both physical and financial project execution.48 Budget and accounting chain execution times are not monitored, although the information is available in VECTIS.

65. Although the legal framework prescribes it, external project funding is not included in the principal government bank account system. The legal framework49 prescribes that all resources, including external donor funding, are included in the TSA. In practice, depending on the financing agreements, foreign financing is handled either by the Deposits and Consignments Fund (Caisse des dépôts et des consignations),50 outside the Bank of Central African States (BEAC), or in commercial banks, as is the case for some World Bank-financed projects.

66. The availability of financing for PI expenditure needs to be improved soon to optimize physical and financial project execution. The Gabonese authorities are not in a position to: (1) plan and commit PI expenditure in advance, based on reliable cash flow projections for determining whether enough liquidity will be available to cover needs and avoid delays in project execution; (2) ensure timely disbursement of funds earmarked for financing project expenses; and (3) include externally financed project bank accounts within the remit of the BEAC to facilitate the monitoring and planning of project expenditure. The following recommendations seek to boost financing allocated to investment projects, by: (1) drafting procedural guidelines for procurement plans, commitment plans, and cash flow plans; (2) organizing regular meetings of the Cash Flow Committee to increase the accuracy of information and make effective use of programming and budget execution tools; (3) ensuring that CA and PA are issued to provide line ministries with annual commitment ceilings, and periodically regulating payment appropriations based on forecasts of the progress made with physical implementation of projects; (4) updating the January 2012 circular on payment times and activating monitoring of those times in VECTIS; (5) establishing a plan for clearing arrears accumulated on projects at a standstill; and (6) holding upcoming external financing in escrow accounts at the BEAC.

13. Portfolio management and monitoring (institutional strength – weak; effectiveness -weak; priority of reforms – high)

67. Physical and financial track is kept of major projects during implementation, but the information is not centralized in an efficient manner. The procedures established by donors and creditors and the national framework set rules51 for monitoring during the implementation phases, but these are not enough to ensure centralization. The procedures establish certain responsibilities for the DMP in the DGBFIP,52 for provincial procurement authorities,53 for ANGTI54 and the Inter-ministerial Development Project Validation Committee.55 The project assembly guidelines mention general rules for physical and financial monitoring. However, arrangements for periodically pooling and centralizing information on the internally and externally funded project portfolio are deficient.56 The decree issued on October 28, 2013, establishing how projects in the public investment program are to be handled does not assign specific responsibility to any organ in charge of centralizing physical and financial monitoring, which severely weakens the institutional framework. In practice, for most major projects, annual costs and physical progress are monitored during implementation; however, the data are not regularly reconciled, pooled, and centralized. ANGTI keeps physical and financial track of the projects for which it is in charge, but it does not regularly share the information with other actors. The DGBFIP and the DGCPT are responsible for financial monitoring, but feedback on actual payment is not made available to all actors. 57 There is no effective centralization of information in the SGG. That lack of a link between physical and financial monitoring can lead to actual payments for work that has not been done, as shown by the PK12-PK105 road project (Annex V). The January 2016 report by the Supreme Audit Court (Cour des comptes) on the auditing of expenditure related to efforts to combat HIV/AIDS and malaria also refers to certain malaria treatment centers where physical works were paid for but not built.

68. There is currently no effective way to transfer appropriations from one investment project to another during implementation. The LOLFEB58 does authorize transfers of appropriations from one investment project to another during implementation, but only via a presidential decree, which, in practice, renders the provision inapplicable. Consequently, there are no officially sanctioned transparent procedures for appraising and justifying such transfers. The authorities have developed a draft decree on the movements of appropriations to remedy this legal snag, but the instrument has still to be examined and promulgated. In practice, the line ministries with which the mission met have never transferred appropriations from one investment project to another during the implementation phase.

69. The Government does not conduct an ex post review of completed projects and does not adjust project execution policies and procedures accordingly. Procedures established by donors and creditors and the national regulatory framework59 establish general procedures for an ex post review of projects; however, the national regulation is not sufficiently detailed, and no rules are set for adjustments based on the review findings. The procedures assign responsibilities60 to the General Government Oversight Office61, to the Directorate for Evaluating Fiscal Policy Performance in the DGBFIP62, and to ARMP63. The General Government Oversight Office is a single-purpose central department attached to the Prime Minister’s office comprising three inspection units: the general inspectorate for administration, the technical general inspectorate, and the general inspectorate of finance. The project assembly guidelines mention general rules regarding a posteriori project evaluation, but there are no detailed guidelines and no formal rules for making adjustments based on the evaluation findings. In practice, ex post review of projects is, in most cases, only required and carried out for externally funded projects; the mission was not in a position to analyze evaluation reports.

70. Project portfolio management and monitory suffer from major shortcomings that require immediate measures to tighten oversight. The Gabonese authorities conduct physical and financial monitoring of major projects to check, on a regular basis, whether they are being implemented according to plan and to identify any cost overruns, delays, or other issues. However, the information is not effectively double-checked, pooled, and centralized; this impairs the quality of overall monitoring of the implementation of the PSGE and may lead to unwarranted payments. Furthermore, the authorities do not carry out: (1) reallocations that could expedite the implementation of the major projects portfolio, by transferring appropriations from slower projects to those making more rapid progress; and (2) systematic ex post evaluations of completed projects to draw lessons from their implementation and adjust implementation policies and procedures based on these lessons. Enhancing the accuracy and centralization of information on the physical and financial implementation of both internally and externally funded projects; restoring the interface between the payment information system at the DGCPT and VECTIS and authorization for those involved in PIM to access information on actual payments; and ensuring systematic ex post evaluation of projects are all essential to strengthen project management monitoring and oversight.

14. Project execution management (institutional strength – medium; effectiveness – weak; priority of reforms – medium)

71. The authorities systematically appoint those to be in charge of major investment projects, but project implementation plans are not systematically drawn up prior to the adoption of the budget. Apart from the donors’ and creditors’ procedures, implementation of the project governance framework is not backed by any sectoral instrument. Nevertheless, for each major infrastructure project that it monitors, ANGTI establishes formal project management procedures and systematically designates the senior managers responsible for implementation. At the line ministry level, decrees and decisions are generally made to put in place and appoint project management bodies. Financing agreements for externally funded projects likewise include a governance mechanism. In practice, ANGTI and the line ministries responsible for executing development projects establish the mechanisms needed to implement them, but implementation plans are drawn up prior to budget approval only in the case of externally funded projects.

72. The Government has not issued rules, procedures, or directives regarding adjustments that need to be made systematically to all major projects. Apart from the usual mechanisms generally found with respect to public procurement contract riders,64 the institutional framework makes no mention of any rule, procedure, or directive regarding adjustments to projects in the process of being implemented. In practice, PI projects are generally not adjusted once they are under way based on an in-depth reexamination of the grounds for them, their costs, or expected outcomes. Only the availability of funds or political priority criteria involve regulation.

73. Major investment projects are generally not subject to ex post external audits. The legal framework broadly mandates the National Assembly’s Finance, Budget, and Public Accounting Commission65 and the Audit Office (Cour des comptes)66 to conduct evaluations of public policies and performance audits. That mandate de facto includes surveys and ex post external audits of projects, but the institutions involved have no manual on a posteriori auditing of PI projects.67 The legislative framework likewise envisages those reports being open to the public.68 To date, no recent externally financed PI project has been audited ex post by either Parliament or the Audit Office. In April 2017, the latter did, however, conduct a performance audit of public procurement in connection with road infrastructure and engineering works carried out by the SANTULLO/SERICOM Group between 2010 and 2015.69 That audit, which is posted on the Audit Office website,70 highlighted, in particular, the lack of expenditure planning, the failure to enforce the provisions of the CMP, and the occasional lapses in the provision of funds.

74. Consolidated management of major project implementation is needed to boost the transparency of PIM. Project management provides overall assurance that project implementation is proceeding in line with the scope, costs, and scheduling envisaged. However, (1) there are no standardized adjustment rules and procedures, which are essential to prepare for possible impact on the project and promptly make any needed adjustments; and (2) a posteriori external audits of major projects are almost nonexistent. It would be best to systematize these audits, adopt a risks and financial implications-based approach, and publish the outcomes.

15. Monitoring of public assets (institutional strength – medium; effectiveness – weak; priority of reforms – medium)

75. Assets records are not complete and not regularly updated as a result of an analysis of the stocks, values, and condition of public assets. A general regulatory framework71 governs accounting aspects, but it is not detailed enough to provide modi operandi for drawing up, and then updating, an inventory of assets. The Directorate of Insurance and Administrative Assets in the DGBFIP72 is responsible for monitoring the state’s real estate assets, centralizing the stock accounting records of the authorizing officers, and keeping an up-to-date inventory of the state’s movable and immovable assets. The authorities have a specific (PRACTIS) information system for asset accounting. However, the framework does not specify the formats to be used for the journal, general ledger, fixed asset datasheets, inventory, and trial balance. In practice, there are no comprehensive and regularly updated records of assets in PRACTIS. Monitoring is patchy and sporadic and provides no overall picture. FGIS was established to administer tangible, as well as intangible, real estate assets, but the data are not pooled. Moreover, the assets management corporation is responsible for the maintenance of water and energy infrastructure assets; the assets management corporation responsible for digital infrastructure is responsible for maintenance of related digital assets. However, there is no communication with the DGBFIP, and the assets managed by those government corporations are not subject to any accounting.

76. The value of nonfinancial assets recorded in the Government’s financial accounts does not cover all of them and is not substantiated by inventory datasheets or updated regularly. The institutional framework73 establishes general principles governing the valuation and recording of nonfinancial assets in the Government’s financial assets, with practical and precise ways to value and record them in the accounts.74 In practice, however, the Government’s financial assets statements,75 drawn up using ASTER software, provide an unchecked value for certain nonfinancial assets, which are regularly reevaluated. Although the net position table is accurately described in the annex to the Government’s general account, the failure to fully implement stock accounting (comptabilité des matières) precludes proper substantiation of the values recorded, which requires reconciliation with fixed asset and inventory datasheets.

77. The fixed asset depreciation recorded in the Government’s income statement is likewise incomplete and is not substantiated with inventory datasheets. The institutional framework76 establishes the general principle of recording depreciation of fixed assets in the government’s income statement, and the accounting standards book and technical datasheets provide concrete details regarding the mechanism for doing so. In fact, the Government General Account for 2017 shows allocations to depreciation and provisions in the income statement. Calculation methods, the hypotheses used, and the applicable depreciation schedule based on statistical estimates are specified as well. However, given the lack of fixed asset and inventory datasheets, the base to which depreciation is to be applied cannot be validly appraised in terms of its reliability and comprehensiveness.

78. Monitoring of public assets needs to be progressively introduced because it is essential for sustainable fiscal policy, planning, and budgeting maintenance expenditure. The regulatory framework for general accounting is aligned with best international practices, but implementation of asset accounting arrangements remains weak. Thus, the keeping and regular updating of comprehensive records of public assets are not guaranteed; the recording of the value of nonfinancial assets and their depreciation in the Government’s financial accounts are not yet fully reliable. Further work to ensure the reliable monitoring of public assets should help to guarantee infrastructure maintenance and upkeep by: (1) developing asset stock accounting and gradually making an inventory of existing assets; and (2) increasing the reliability of nonfinancial asset valuation and depreciation by reconciling them with fixed asset and inventory datasheets and regularly reassessing values.

D. Cross-Cutting Issues

IT Support

79. The IT system essentially covers the preparation and execution of the budget law by using three softwares. For project planning, there is no complete and validated IT database on investment projects. Project ideas are stored by the directors of each ministry’s technical departments on Excel spreadsheets, for lack of a single unit devoted to centralizing projects. During the administrative phase, budget preparation and execution are facilitated using VECTIS software. The accounting phase is handled by ASTER and DC software. Payment orders issued using VECTIS are channeled into ASTER and then into the DC app (cash flow phase) to finalize payment. The information system needed to list and monitor fixed assets (PRACTIS software) has not yet been deployed in public administration.

80. The breakdown of expenditures by operating unit precludes monitoring by project in the IT system. Given that operating units are used as the basis for budget nomenclature, investment projects are not broken down by their purpose. Investment projects are grouped by type of expenditure under Title V of the operating unit. As a result, there is no (even annual) computerized database of projects included in the budget. Reprocessing is required to obtain that statement in VECTIS.

81. The compartmentalization of information systems and the lack of a specific system for constituting and monitoring a project database detract from the quality of PIM. The mapping and current coverage of information systems preclude access to a unified inventory of projects at the planning stage and make it impossible to base the choice of projects to be included in the budget on objective criteria. Interconnecting systems to connect all of the stakeholders in the process—line ministries and offices of the directors-general of budget, public finance, cash flow, and public accounting—and cover the complete PIM cycle are essential to improve the monitoring and effectiveness of investment expenditure.

Legal Framework

82. The legal framework governing PIM is scant and dispersed with respect to the role of the actors involved and the procedures. With respect to the bodies in charge of PIM, several barely consistent instruments exist. Decree No. 0058/PR/MBCP of January 16, 2015, on the establishment and organizational structure of the DGBFIP vests that General Directorate with powers to coordinate the monitoring of investment projects by: (1) monitoring and periodically evaluating projects; and (2) constructing a project database. The DGBFIP’s responsibility with respect to investment project management was also reinforced by Decree No. 00198 MBCP of September 8, 2016, which entrusted it with the task of acting as the Secretariat of the Inter-ministerial Project Validation Committee, known as the Sectoral Studies Committee. That committee’s job is to choose which of the development projects in the public investment program are to be included in the budget law and to monitor the proper execution of those projects. Another Inter-ministerial Committee to validate and coordinate investment programs in the Gabonese Republic was established in February 2019 to coordinate the programming and validation of investment projects and to keep track of the financing for those projects, ensure that they reach completion, and assess their impact on the economy. With respect to tools, project preparation guidelines have been in place since 2012, basically establishing the rules governing project document presentation. Those rules cover five areas:

  • the context of the project and the rationale for it

  • the operational feasibility of the project

  • the logical framework of the project

  • the evaluation of the relevance of the project

  • the sustainability of the benefits of the project.

The principal shortcoming of the guidelines is that they mainly address the content of the project document, without mentioning the players involved at various stages in the project cycle and their responsibilities. Certain parts of the guidelines were subsequently readdressed in Decree No. 0862/PR/MBCPFP of October 28, 2013 establishing how projects are to be included in the public investment program of the Gabonese Republic; and in Decree No. 00199MBCP of September 8, 2016, establishing rules governing the eligibility of projects for inclusion in the public investment program.

83. In practice, this legal framework is not applied, thereby disrupting the whole PIM cycle. The regulatory provisions are implemented. The way in which the DGBFIP operates is inconsistent with the provisions in the decree. In particular, the project execution directorate in the DGBFIP includes a department in charge of investment expenditure, whereas the legal instruments delegate that function to the line ministries. The public investment program has never been drawn up; the procedures in the guidelines have not been applied. The Sectoral Studies Committee has never met; neither has the new Inter-ministerial Commission. Furthermore, numerous other actors intervene in PIM, sometimes, as in the case of ANGTI, in ways that go beyond the powers vested in them. The job of selecting projects, which should be performed by the Sectoral Studies Committee, is in practice split among all of the actors, each of which draws up its own list of projects and looks for ways to fund them, without any real coordination and encouraging resort to extrabudgetary operations, as is the case with FGIS. In the end, the projects included in the budget law are selected by the BC-PSGE, which is now part of the SGG, without that information being effectively shared with all of the actors involved (Figure 15).

Figure 15.
Figure 15.

Current Planning Arrangements

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Source: Mission.

84. There is an urgent need to strengthen the legal framework and rationalize the way PIM is organized. The existing legal framework needs to be supplemented and harmonized by drafting and passing a decree encompassing the complete PIM cycle, specifying responsibilities, terms and concepts, documents, and processes and procedures at every stage of the PIM. That decree would then be broken down into guidelines and manuals specifying the precise roles of the actors involved and the methodologies to be applied to specific processes. Effective decentralization of payment orders to line ministries is also essential to ensure that spending is executed close to projects on the ground and to be able to hold fiscal program and project managers accountable. Along the same lines as the decree, the way that the PIM is organized needs to be rationalized, and the role of the departments/units involved needs to be redefined by revising the regulations governing them. Thus, the Sectoral Studies Committee could become the central technical body responsible for preparing the draft PIP, which would then be validated by the Inter-ministerial Commission. Figure 16 contains a proposal for rationalizing planning practices.

Figure 16.
Figure 16.

Proposed Organizational Structure for Planning

Citation: IMF Staff Country Reports 2020, 188; 10.5089/9781513546438.002.A001

Source: Mission.

Staff Capacities

85. Investment planning and programming are not systematized in the line ministries. Some ministries, especially health and education, include planning and programming departments in their organizational structures, thanks to the close involvement of technical and financial partners in sectoral policies. The organizational chart of the Ministry of Health includes a Directorate-General of Planning, Infrastructure, and Equipment charged with making health care accessible to all via a network of well-equipped health units distributed throughout the country. That Directorate is responsible for drafting and updating the Health Care Map (la carte sanitaire) and the organizational structures for health care. The Ministry of Education has a Directorate-General of Planning and Projection Statistics and a Directorate-General for Investment and Infrastructure Programming. However, those functional divisions are not found in all ministries.

86. Capacity-building still poses a major challenge for both administrative and human resource management. Capacity-building for those involved in investment management used to be entrusted to the former BC-PSGE, which was attached to the Office of the President until early 2019, and whose functions have now been absorbed by the General Secretariat of the Government. The decree governing the organizational structure of the Coordination Office designated as one of its tasks the “methodological support for managing programs and projects for program managers, line budget managers, and operating unit managers, with crafting and steering PSGE programs and projects.” In many countries, planning units appear in ministries’ organizational charts as a cross-cutting body like financial and human resource directorates, and the civil service statute provides for professional planners. In practice, the job of professional planner does not exist. Planning is done by staff members from a variety of professions (including engineering and administration), depending on their responsibilities and the powers vested in them in the administrative hierarchy.

87. Developing planning and programming skills is a perquisite for ensuring optimal management of investment. Directorates or units—depending on the size of the ministries— responsible for studies, planning, and statistics need to be established in the line ministries. It is essential to adopt and implement a continuous training program in investment project management to ensure that they function effectively in the long term.

Annex I. PIMA Evaluation Scores

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Annex II. Examples of Provisions Contained in Regulations Governing PIM

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Annex III. Sample Public Investment Program (n – n+2) Format

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Note. (*) For ease of reference, each project is given a code, which should be consistent with budget nomenclature.

Annex IV. Sample Project Datasheet

Note: (*) Recurrent operating and maintenance expenses start prior to project implementation. The project documents must include information on the nature and programming of these expenses.

Annex V. Example of a PIMA Evaluation: The KP12-KP105 Road Project

Context: National Route 1 is a highway serving the southern parts of Libreville and heading toward the west and north of the country. Work has been done on several sections. The stretch between kilometer points 12 and 105 links the southern exit from Libreville (near the Special Economic Zone of Nkok) to the Nsile commune in the southwest (Map A5.1). Apart from its social function, this highway is also of major economic importance because it connects to the SEZ and is used by the logging industry to transport timber. It is also one of the priority projects in the PSGE.

Project background: The first contract was placed in November 2008 and was awarded in its entirety to CEDEX Corporation, with Deutsche Bank financing. The idea was to complete the work in 2015, at a cost of approximately CFAF 70 billion. The first amendment to the contract was made in 2013, and a memorandum of understanding was drawn up on splitting the contract into various stretches. The first three stretches—KP12-KP40, KP40-KP55, and KP55-KP74—were awarded to CEDEX, SOCOBA and ACCIONA, respectively. The next two stretches—KP74-KP94 and KP94-KP105—were awarded to the COLAS Corporation. The contracts were awarded by private arrangement, with all financing charged to the national budget. To this day, only the KP94-KP105 stretch has been finished, with COLAS receiving payment for the work. Since the companies that contracted for work on the other sections never received any payment, those works are at a standstill or never began.

Accordingly, parts of the KP40-KP55 and KP55-KP74 sections have been completed, while work on the KP74-KP94 stretch has never started. All of these contracts were rescinded in 2017. The Gabonese Government is now seeking concessionary EXIM Bank financing and has launched a restricted tender to which three Chinese companies have responded. The tender called for bidders to develop a financing proposal. The contract was awarded to the China State Construction Engineering Corporation, but the loan application was turned down by the EXIM Bank China in May 2018, and the Gabonese state is unable to finance the works. It is, moreover, in a dispute with the company over a clause in the contract that precluded any suspension. Currently, the Gabonese State is in the process of rescinding the contract with China State.

Current state of affairs:

- A longstanding but still unfinished project despite the use of “urgent” bidding procedures: by private arrangement with CEDEX; restricted tender for the sections awarded to SOCOBA, ACCIONA, COLAS, and China State

- A major cost to the state:1 apart from the costs associated with the first contract awarded to CEDEX in 2008,2 payments made total CFAF 79 billion, not counting debts amounting to approximately CFAF 3 billion claimed by certain companies (SOCOBA and ACCIONA)

- Multiple lawsuits that could result in a further burden on the budget: one dispute is already under way with CEDEX, and there is a risk of another dispute with China State.

- A project still to be implemented: appropriations to implement the project are still being included in the national budget (Table A5):


Table A.5
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Source: Draft supplementary budget (PLFR 2018) Road Upgrading.

- Failure to meet physical and financial implementation objectives: the initial goal was to have a first 70 km stretch of road upgraded by 2015. The initial cost estimate was CFAF 1 billion per kilometer.

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