Economics & Development

The development objective of Harmonizing and Improving Statistics in West Africa Project is to strengthen the statistical systems of participating countries and regional bodies in Africa to harmonize, produce, disseminate and enhance the use of core economic and social statistics. This Paper seeks the approval for the second Additional Financing (AF) to Ghana component in the amount of 19 million US dollars to support the project. The proposed AF for Ghana revises the costs of components and subcomponents but does not introduce new activities or alter the project scope. A technical correction has been made to the Results Framework for PDO Indicator 1 (Modified Statistical Capacity Index (SCI 2.0)). The aggregate actual value has been revised from 75.37 percent to 73.91 percent, reflecting the average across the seven participating project countries, and this adjustment results from correcting Ghana’s actual value from 100 percent to 86 percent, addressing a data entry error identified during ISR preparation.

The development objective of Third Phase of the Recurrent Cost and Reform Financing (RCF III) Project for Somalia is to support the Federal Government of Somalia and Eligible Federal Member States to strengthen resource management systems, the inter-governmental fiscal framework, and service delivery systems in health and education. This paper requires an additional financing (AF) of 12 million US dollars that will support improvements in the reliability of FMS payroll systems through Performance‑Based Conditions (PBCs). Reforms supported under the AF also aim to limit non‑transparent staff expansion and strengthen the institutional foundations for service delivery. Changes are introduced to the results indicator targets. Number of FHWs selected according to guidelines, trained, and actively providing services will be revised downward from 3,000 FHWs to 1,400 FHWs. At the same time, the intermediate indicator on the number of women and children visited by FHWs will be revised upward from 15,000 women and 45,000 children, to 25,000 and 175,000 respectively. The theory of change of RCRF III is that predictable, on‑budget financing of recurrent costs and salaries, combined with targeted results‑based incentives and sustained Technical Assistance (TA), can stabilize core government functions, strengthen institutions, and progressively improve service delivery in Somalia’s fragile and federal context, further strengthening the social contract. PBCs link a portion of financing to concrete improvements in public financial management, payroll control, intergovernmental fiscal transfers, and sector service delivery systems, thereby incentivizing reform implementation rather than reliance on input‑based support alone. Rule‑based fiscal transfers and service delivery agreements between the FGS and FMSs strengthen intergovernmental cooperation, improve funding predictability, and enable resources to flow to frontline service units. Together, these interventions are expected to deliver short‑term stability, medium‑term institutional strengthening, and, over time, greater state legitimacy, improved human capital outcomes, and a strengthened social contract. The AF does not change this logic. It narrows the ambition of the PBCs to what is realistically achievable given political transition and implementation delays, and extends the timeline by one year to bridge to a larger governance and institution building operation.