PROJECT INFORMATION DOCUMENT (PID)

APPRAISAL STAGE

Report No.: AB1029

Project Name

/ Community-Based Rural Development Project
Region / AFRICA
Sector / General agriculture, fishing and forestry sector (100%)
Project ID / P081482
Borrower(s) / GOVERNMENT OF GHANA
Implementing Agency
Republic of Ghana
Ghana
Rural Infrastructure Coordinating Unit
CT 3742
Ghana
Tel: 233-21 770246 Fax: 233-21-770247
Environment Category / [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Safeguard Classification / [ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)
Date PID Prepared / July 14, 2004
Date of Appraisal Authorization / March 18, 2004
Date of Board Approval / July 27, 2004

Country and Sector Background

1. Ghana has made progress on poverty reduction over the past decade, but considerable effort will still be required to achieve a sustainable reversal in its post independence slide in living standards. Overall, the incidence of poverty has fallen from 50% in 1992 to 43% in 1999. However, this reduction has been inequitable across socio-economic groups and geographically uneven. While overall social indicators have improved, education and health services have favored urban areas rather than rural areas. Food crop farmers have fared far less well, particularly those in the coastal and northern savanna zones where poverty is chronic and persistent. Uneven quality of service delivery and shortage of funding have contributed to increasing poverty in these areas. Inadequate development of rural infrastructure have disconnected households, particularly in the three northern regions, from economic growth taking place in the rest of the country, with limited opportunities to escape from poverty because of their limited access to education, markets and public services.

The Government has formulated the Ghana Poverty Reduction Strategy (GPRS) that aligns its poverty reduction goals with those of the Millennium Development Goals (MDGs). The overarching goal of this strategy is to achieve sustainable, equitable growth, accelerated poverty reduction, and the protection of the vulnerable and excluded within a decentralized democratic environment. The GPRS is anchored and articulated around five major issues that have been constraining socio-economic development in the past. These are: (i) macroeconomic instability; (ii) sluggish growth in production and employment; (iii) weak human resource capacity; (iv) lack of effective special programs for the vulnerable and excluded; and (v) poor governance. The GPRS has made tackling these issues the five pillars of its socio-economic development and poverty reduction agenda.

Programs and actions that address the first two pillars of the GPRS, i.e. maintaining macro-economic stability and increasing production and employment, target accelerated economic growth over the medium to long term. The focus will be first on continuing to ensure macroeconomic stability and reducing poverty. The existing constraints to private sector-led growth will be tackled in order to induce, and harness, the sources of growth so that new opportunities are generated. The focus in catalyzing new sources of growth will be increasing productivity in agriculture and non-traditional sectors, while improving natural resource and environmental management to ensure long-term sustainability, and tapping better into global knowledge.

2  Objectives

The overall goal of the project is to reduce poverty and enhance the quality of life of beneficiary rural communities. This will be achieved by improving their productive assets, rural infrastructure and access to key support services from private and public sources. Specifically the project will:

(i)  Build and strengthen capacities of national, regional, district, area councils and rural communities to deliver services and manage resources;

(ii)  Transfer technical and financial resources for the development of infrastructure and income generating activities to be managed and maintained by beneficiaries for their economic and social well-being and;

(iii)  Promote the convergence of decentralization efforts in accordance with the National Decentralization Action Plan.

3.  Rationale for Bank Involvement

(see Annex 2)

The GPRS charts the medium-term strategy for growth and poverty reduction. It aims to achieve equitable growth, accelerated poverty reduction and the protection of the vulnerable and excluded within a decentralized democratic environment. The Bank’s Ghana Country Assistance Strategy (CAS) is built on three strategic foundations in support of the GPRS, namely, (i) sustainable growth and job creation; (ii) human development and service provision; and (iii) governance and empowerment. The proposed CBRDP is one of the major tools for the implementation of the CAS. It is repeater to the Village Infrastructure Project (VIP ITF NO 020 - GH), which is scheduled to close on June 30, 2004. In accordance with the procedures for repeater projects, approved by the Board in January 2003[1], a Regional Review Panel was constituted to review the advisability of preparing a repeater project. The panel’s recommendation was positive- based on strong borrower interest, performance of the VIP implementation and alignment with the Ghana CAS, provided the Development Project Objectives (DPO) and Monitoring and Evaluation (M&E) were framed better.

The panel’s recommendations have been taken into account in the preparation of the project (See Annex 3) as the CBRDP contributes to all three CAS foundations by providing access to project beneficiaries to productive resources through the development of rural infrastructure as well as sustainable on-farm and non-farm rural enterprise development activities which contribute to the realization of sustainable growth and job creation (item i above). The project will also build the capacity of DAs, Area Councils (ACs), unit committees, traditional authorities and community-based organizations (CBOs) to plan and implement their rural infrastructure development based on full participation and on demand from the rural communities. The CBRDP will support the planning, design, implementation and monitoring process, thus deepening efforts at human resources development, decentralization of service delivery, good governance and empowerment of the poor (items ii and iii above).

Implementation of the GPRS requires substantial resources that cannot be mobilized without the strong support of its development partners (DPs) including IDA. Donors have in the past firmly supported Ghana’s development agenda. The multi-donor budget assistance was introduced in 2003 to align policy support with the GPRS and pool funds for budgetary support, as well as to harmonize implementation assistance and timing of performance reviews. A number of donors have initiated pilots aimed at harmonization of decentralization policies and programs at the grassroots level. CIDA’s District Wide Approach Project (DWAP) for 24 districts of the northern regions, IFADs Northern Region Poverty Reduction Program (NORPREP) and other programs supported by DANIDA and DFID are currently financing development initiatives in local government, decentralization and community-based programs. Development partners in Ghana have signaled their intention to realign funding of rural infrastructure through a District Development Funding Facility (DDFF) expected to go directly to the districts which is supported firmly by the Government and the Bank is expected to play a major role in the realization of this objective considering experience gained in sector-wide investment programs, particularly in the transport (road), health and agriculture sectors.

A first step within the Bank towards coordination of district-based intervention in support of decentralization is to rationalize the delivery of water and sanitation services. It has been agreed that the supply of point source community water and sanitation services will be funded through the CBRDP whilst small town water supply systems will be carried out through the Small Towns Water and Sanitation Project (STWSSP). The intention is to move out of project-based activities to budgetary support to the districts through the (DDFF). The CBRDPs’ investment and capacity building windows will provide the beginnings of such a framework. The CBRDP is also designed to mainstream implementation into existing Government statutory agencies. PNDC Law 327 defines the roles and responsibilities of ministries and national level departments, regional coordinating councils and district assemblies. The tenets of the Law will be respected in the implementation of the two Bank financed projects. Policy formulation, guidelines and standards in all sectors, education, health water and sanitation, irrigation, roads etc., will be the responsibility of national level ministries, departments and agencies while implementation will be the responsibility of district assemblies and other local government institutions. In this regard, the Ministry of Works and Housing (MoWH) through the Community Water and Sanitation Agency (CWSA) will provide policy guidance, facilitate and ensure that standards are maintained in the delivery of water and sanitation services as defined in the Agency’s Act 564 of 1998

4. Project Description

The lending instrument proposed for this project is the Sector Investment Loan (SIL). The Bank is considering harmonization of CDD activities under one financing instrument, for which a clear vision and strategy will be prepared in the next 12-18 months. A SIL for four years was therefore deemed appropriate under these circumstances. It is envisaged that the successor project will embrace all CDD activities financed perhaps with an APL.

Project Development Objective and Key Indicators

The overall goal of the project is to reduce poverty and enhance the quality of life of beneficiary rural communities. The objective is to strengthen the capacity of rural communities to enhance their quality of life by improving their productive assets, rural infrastructure and access to key support services from private and public sources

The objective will be achieved by consolidating and broadening the gains made during the implementation of the Village Infrastructure Project in the areas of capacity building, community empowerment and provision of capital investment funds to beneficiary communities. Progress towards the achievement of CBRDP objectives, outputs, outcomes and impacts will be measured through a set of key indicators which include: (i) number of communities engaged in the management of infrastructure provided and ability of DAs to plan, deliver services and monitor effectively; (ii) increases in real value of agricultural production and productivity; (iii) increase in the number of rural enterprise and their productivity; (iv) volume of rural infrastructure constructed/rehabilitated (based on kilometers for roads, hectares for irrigated land; number of households with potable water, number of schools and community health compounds and nutrition centers rehabilitated; (v) reduction in the transmission of water borne diseases in beneficiary communities; (vi) size of environmentally sustainable managed natural resources; (vii) number of communities engaged in the management of natural resources and; (viii). increases in real net incomes of beneficiaries

Project Components

The project has a national coverage just like the VIP and consists of five components which have been re-arranged to provide clarity, respond to beneficiary concerns as is contained in the beneficiary assessment and survey report and focus on the more on development objectives. The components cover investing in capacity building and empowerment of rural population to drive the agenda for a community demand driven (CDD) program.

Component1. Institutional Strengthening and Capacity Building (US$8.52): This component will provide support to strengthen capacities of local government institutions in furtherance of the Ghana Poverty Reduction Strategy which includes: (i) Good Governance through accountability and transparency and, (ii) human resource development, in order to improve service provision by statutory government agencies and private providers to rural communities. The project will strengthen and enhance the capacities of the Ministry of Local Government and Rural Development (MLGRD), the 10 Regional Planning Coordinating Units (RPCU), 138 District Assemblies (DAs), Area Councils (ACs) including traditional authorities within the ACs, rural communities, Non-Governmental Organizations (NGOs), CBOs, private and public service providers. This component will include training, a public communication program, technical support and provision of logistical support to enhance communities participation in decision making processes, the performance of various levels of government in their statutory roles in planning and managing community driven initiatives.

Component 2. Infrastructure for Agricultural Development (US$21.90): Will provide facilities and resources to enhance farm and non-farm activities to increase the incomes of beneficiaries. This includes provision of water for agriculture, the rehabilitation of feeder roads, provision of intermediate means of transport to improve access (track and trails, carts, tricycles etc.,), to improve access to farm and markets and reduce the drudgery of head portage and enhance socio-economic activities in the rural areas. The project will finance consultant services for engineering design, contract supervision and training wherever necessary. Maintenance of facilities will be the responsibility of beneficiary community and they will be trained to acquire the skills for doing so. Until the responsibility for the maintenance of feeder roads is transferred to the districts, the Department of Feeder Roads (DFR) will be required to include any rehabilitated road in their annual maintenance plans and an MOU will be signed between the MLGRD and the DFR to that effect.

Component 3. Rural Enterprise Development and Learning Centers (US$8.37): The objective is to develop skills and create employment in rural communities by assisting rural enterprises to properly managed and provide ready market for agricultural produce for processing for value addition and increased shelf life. The project will provide support for the strengthening of co-operative business activities, market research, business linkages and joint venture agreements, micro-enterprise development and small business through training in technical and business management, upgrading and rehabilitation of equipment to develop the enterprises in particular fields of commodity production, agro-processing and marketing.

Learning centers will serve as focal points for empowering the poor through the acquisition of knowledge and skills, processing units and marketing outlets and promoting horizontal communication among communities. A learning centre is organized around a prospering small private enterprise that accept for training people willing to develop similar business. Trainees who acquire skills from the centre, become part of the learning and production network and may continue to be associated with the centre or will be encouraged to set-up their own business. The principal target groups for this components includes existing farm and non-farm entrepreneurs, under employed and unemployed rural populace (made up of rural youth, rural women and graduate apprentices).

Component 4. Infrastructure for Social and Human Development (US$23.34): Provision of a congenial environment for learning and health by rehabilitating existing but run down school facilities, construction of community health compounds and nutrition centers. This component will also provide potable water for areas known to have water related diseases which limit the productivity of the rural population and where women and children have to travel far to access clean water. The water activities will be limited to point sources such as hand dug wells and bore holes fitted with hand pumps. Sanitation and hygiene provision will be integrated with the delivery of water facilities to maximize health benefits. The implementation of the water supply will follow the guidelines described in the Project Operational Manual (POM) of the STWSSP. Backlog of point sources sub-projects generated under CWSP2 Phase 1 will be rolled over into this component for financing. The interventions will be coordinated with sector ministries such as education health and CWSA to ensure consistency with sectoral policies and standards.