Ghana - Community-based Poverty Reduction Project

Document of the International Development Association Report No. 19319 GH PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 3.7 MILLION(US $5 MILLION EQUIVALENT) TO THE GOVERNMENT OF GHANA FORA COMMUNITY-BASED POVERTY REDUCTION PROJECT MAY 14, 1999 Human Development III Africa Region  CURRENCY EQUIVALENTS (Exchange Rate Effective as of May 1999) Currency Unit = SDR LC = Cedi US$I = LC 2438 FISCAL YEAR 1999 ABBREVIATIONS AND ACRONYMS BMivI Body Mass Index CAS Country Assistance Strate,gy CG Consultative Group CNW Community Nutrition Worker DACF District Assembly Common Fund FO Facilitating Organization GLSS Ghana Living Standards Survey GPN General Procurement Notice GSS Ghana Statistical Service IBRD Intemational Bank for Reconstruction and Development ICB Intemational Competitive Bidding IDA Intemational Development Association IMCPR Inter-Ministerial Committee on Poverty Reduction KA-P Knowledge, Attitude and Practice LACI Loan Administration Change Initiative LIL Learning and Innovation Loan MIESW Ministry of Employment and Social Welfare MOH Ministry of Health NBF Not Bank Financed NCB National Competitive Bidding NDPC National Development Planning Commission NFS Nutntion and Food Security NGO Non-govemment Organization NU Nutrition Unit PAD Project Appraisal Document PLU Project Liaison Unit PMM Poverty Monitoring and Measurement PRU Poverty Reduction Unit PSC Project Steering Committee QCBS Quality and Cost Based Selection SBP Selection Based on Qualification SC Street Children SOE Statement of Expense SPN Specific Procurement Notice SRFP Standard Request for Proposals TAC Technical Advisory Committee TCOP Technical Committee on Poverty VIP Village Infrastructure Project Vice President: Jean-Louis Sarbib Country Manager/Director: Peter Harrold Sector Manager: Helena Ribe Task Team Leader: Josephine Woo  Ghana Community-Based Poverty Reduction Project CONTENTS A. Project Development Objective ........................1.... 1. Project development objective and key performance indicators 2 2. Key performance indicators. 2 B. Strategic Context.. 2 1. Sector-related CAS goal supported by the project. 2 2. Main sector issues and Government strategy. 3 3. Learning and development issues to be addressed by the project 3 4. Learning and innovation expectations. 4 C. Project Description Summary. . . 5 1. Project components. 5 2. Institutional and implementation arrangements. 6 3. Monitoring and evaluation arrangements. 6 D. Project Rationale. 7 E. Summary Project Analyses .. 7 1. Economic .................. 7 2. Financial. 7 3. Technical. 7 4. Institutional. 7 5. Social. 8 6. Environmental assessment. 8 7. Participatory approach. 8 F. Sustainability and Risks. . . 9 1. Sustainability. 9 2. Critical risks. 9 3. Possible controversial aspects. 9 G. Main Loan Conditions. 9 1. Effectiveness conditions. 9 2. Other .10 H. Readiness for Implementation. 10 I. Compliance with Bank Policies. 10  Annexes Annex 1. Project Design Summary Annex 2. Detailed Project Description Annex 3. Estimated Project Costs Annex 4. Cost-Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary Annex 5. Financial Summary for Revenue-Eaming Project Entities, or Financial Summary Annex 6. Procurement and Disbursement Arrangements Table A. Project Costs by Procurement Arrangements Table B. Thresholds for Procurement Methods and Prior Review Table C. Allocation of Loan Proceeds Annex 7. Project Processing Budget and Schedule Annex 8. Documents in Project File Annex 9. Statement of Loans and Credits Annex 10. Country at a Glance Map  GHANA Community-Based Poverty Reduction Project Project Appraisal Document Africa Region Country Department 10 Date: April 27, 1999 Team Leader: Josephine Woo Country Manager/Director: Peter C. Harrold Sector Manager/Director: Helena Ribe Project ID: 40659 Sector: SS - Social Sector Lending Instrument: Leaming and Innovation Loan (LIL) Theme(s): Poverty Reduction Poverty Targeted Intervention: [x ] Yes [ ] No Project Financing Data [ ] Loan [xl Credit [] Grant I[] Guarantee [I Other [Specify] For Loans/CreditslOthers: Amount (US$m): 5.0 Proposed terms: ] To be defined [ I Multicurrency I ] Single currency lIi Standard I ] Fixed [Ii LIBOR-based Variable Grace period (years): 10 Years to maturity: 40 Commitment fee: 0.5% Maximum Service charge: 0.75% Front-end fee on Bank loan: Government 1.8 0.0 1.8 IBRD IDA 45 0.5 50 Other (specify) Total: 6.3 0.5 6.8 Borrower: Government of Ghana Responsible agency: National Development Planning Commission Estimated disbursements (Bank FY/US$M): Annual 1.0 1.2 1.6 1.2 Cumulative 1.0 2.2 3.8 5.0 Project implementation period: September 1999 - June 2003 Expected effectiveness date: 09/15/99 Expected closing date: 06/30/2003 Implementing agency: National Development Planning Commission Contact person: Dr. Kobena Erbynn Address: Flagstaff House, P. 0. Box CT-633, Accra, Ghana Tel: (233-21) 773011 Fax: (233-21) 773055 E-mail: NDPC@ncs.com.gh OCS LIL PAD Forin: January 5, 1998  Page 2 A: Project Development Objective 1. Project development objective: (see Annex 1) The project will (a) test approaches and mechanisms for delivering poverty reduction interventions to marginalized groups through community nutrition and food security interventions and activities to assist street children, and (b) test and build capacity, at national and district levels, for monitoring and evaluating poverty reduction programs. 2. Key performance indicators: (see Annex 1) Indicators of successfil approaches/mechanisms for targeted service delivery and monitoring ofpoverty interventions at the district level: 50% of pilot communities able to identify nutrition problems Decrease in percentage of children 0-6 months with low weight for age in pilot communities Increase in percentage of children under 5 regularly attending growth-monitoring sessions in pilot communities Increase in service coverage for street children Poverty monitoring system designed and tested in 3 pilot districts -- data collected and used to plan and monitor district-based programs Indicators of strengthened capacity at national and local levels: TCOP/NDPC has demonstrated capacity to coordinate, monitor and evaluate poverty reduction activities Pilot communities have increased capacity to access and manage resources Nutrition unit in MOH has increased its capacity to deliver effective poverty targeted interventions jointly with districts. MESW has developed a national policy on street children Decision to proceed with follow-on operations will be based on assessment of the extent to which the two sets of indicators above will have been met by the end of the LIL. B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 17002-GH Date of latest CAS discussion: 09/02/97 The project has been identified in the CAS as one of the key instruments for Bank support to the government in testing targeted poverty alleviation measures, assessing alternative modalities of community participation in the delivery of basic services and building capacity where necessary. It supports the CAS goals of broad-based social development as well as direct poverty alleviation interventions.  Page 3 2. Main sector issues and Government strategy: Ghana has made substantial progress in economic growth and poverty reduction since the economic reform program was introduced in 1983. Data from the Ghana Living Standards Surveys (GLSS) indicate that between 1988 and 1992, the overall prevalence of poverty declined from 36% to 31%, although some pockets of rural and urban poverty did not benefit from the overall economic growth, and there was a significant increase in poverty in the Greater Accra area. Malnutrition remains a serious problem with 30% of children under 5 stunted (GSS 1998). Street children are a growing phenomenon with estimates of 15,000 in Greater Accra and 7,000 in Kumasi. Various studies indicate that inflationary fiscal policies after 1992, coupled with sluggish growth, have resulted in more hardship among both urban and rural poor. Hence, the government is anxious to expand its development strategy to include targeted interventions for those groups excluded from the overall economic growth including children with malnutrition in rural areas and street children in urban areas. At the Consultative Group (CG) meeting in 1995, the Govemment made a commitment to initiate actions to reduce poverty in Ghana. An Inter-Ministerial Committee on Poverty Reduction (IMCPR) and the Technical Committee on Poverty (TCOP) were established to coordinate the development and implementation of policies and programs for poverty reduction. The 1996 paper "Policy Focus for Poverty Reduction in Ghana" constitutes the Government's policy framnework for poverty reduction in Ghana over the medium term (1997-2000). It proposes a more focused and targeted approach to poverty reduction activities, poverty indicators and monitoring. Government commitment to pursue these policies and programs was reiterated in the 1997 CG meeting. The Government's efforts to reduce poverty in Ghana face two key process constraints: (a) interventions are often uncoordinated and sometimes work at cross-purposes, using the same scarce resources at central and local levels, resulting in de facto capacity depreciation- and (b) many interventions do not start from analysis of the poor's own priorities and capacity for implementation, but follow traditional top-down approaches. Good examples of participatory activities do exist. For example, UNICEF has successfully used nutrition activities as an entry point for wider community development actions, an experience the government would like to replicate using its own capacities. Street children are a highly visible poverty- related phenomenon the government is beginning to tackle. Programs exist, implemented by NGOs, but no government policy has been developed and the co4t-effectiveness of the existing programs has not been determined. The lack of coordination and lack of a participatory approach are especially acute at the district level where most poverty reduction activities are implemented, using resources channeled either through line agencies or directly to districts and communities. Indicators useful for poverty monitoring at the district level are being collected, but only by the sectoral ministries which pass the information to their central offices rather than district planning agencies. A first step in better coordination at the district level would involve better utilization of existing data and improved availability of data on poverty and the impact of projects. The Bank has supported the Govemment's poverty reduction efforts through various programs over the past decade. Adjustment operations support macroeconomic reforms and stabilization, a necessary condition for poverty reduction. Sectoral programs (e.g., Village Infrastructure, Community Water and Sanitation, education and health projects) are aimed at alleviating the constraints to a pro-poor development. However these projects do not directly address marginalized groups and do not address capacity issues at the district level. 3. Learning and development issues to be addressed by the project: The government has led project preparation with minimal assistance from the Bank, thereby gaining valuable experience in designing poverty projects within the existing institutional framework. Within the policy and implementation framework established by the government for poverty reduction, the LIL will address the following issues:  Page 4 Nutrition and Food Security - building on efforts by other donors, the LIL will test whether or not the government can implement similar activities in a sustainable manner. This component will mobilize and strengthen the capacity of communities and districts to take action against the causes of malnutrition and to improve nutrition and food security especially for children under five and pregnant and lactating mothers; Assistance to Street Children - the LIL will support the government in the development of a national policy on street children, deepen public awareness of the problem and assess the cost-effectiveness of street children interventions; In addition the LIL will strengthen the capacity at the district level for Poverty Measurement and Monitoring including improved utilization of existing data for planning and analyzing the impact of social services on the poor. 4. Learning and innovation expectations: Ix] Economic fxl Financial [ ] Technical lx] Institutional [x] Social [. ] Environmental [x] Participation [ ] Other Preliminary analyses of financial, institutional, social and participatory issues have been carried out as part of project preparation and appraisal (See Section E below). The following are expected to result from the LIL: Economic - improved cost-effectiveness of interventions. Cost-effectiveness analysis will be an important part of project evaluation. Current nutrition programs supported by donors are not sustainable without external financial and technical support. The nutrition component will test the government's capacity to provide nutrition interventions in a cost-effective manner. Similarly, the street children component will test the cost-effectiveness of interventions undertaken by this component. Financial -- improved capacity for financial management at national agencies responsible for coordinating and implementing poverty reduction programs Institutional - effective utilization of existing capacity (national, district and NGO) for delivering and monitoring services at the district level. Improved capacity for coordination of poverty reduction programs and development of collaborative implementation modalities between ministries, NGOs and districts Social -- improved capacity at district level to help communities organize themselves to identify their needs and access support to meet these needs, especially in the area of nutrition. Participation - increased government ability to involve communities in a participatory manner. Successful experiments tested by the LIL could be financed from available resources under ongoing Bank operations (e.g., the Village Infrastructure and Community Water and Sanitation Project) or programs supported by other funding agencies. They could also be followed up with an investment loan on a larger scale if additional resources prove to be needed.  Page 5 C: Project Description Summary 1. Project components: (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown) C ommunity-b red Ntion H N - Nutrition 2.3 34% 1.8 80% and Food Security Assistance to Street Children SA-Social 2.3 33% 1.8 80% Assistance Poverty Measurement and SS - Social 1.9 28% 1.2 65% Monitoring Sector Project Management SS - Social 0.3 5% 0.2 56% Sector Total Project Costs 6.8 5.0 73% 2. Institutional and implementation arrangements: The primary Implementing Agency for the project will be the National Development Planning Commission (NDPC), under the supervision of the Technical Committee on Poverty (TCOP). A Project Steering Committee (PSC), made up of two representatives from TCOP, the heads of the PLUs, representatives from other projects managed by TCOP and representatives of two beneficiary district assemblies will play an external advisory role; reviewing work plans and progress of the project every six months. The Poverty Reduction Unit (PR U) in the NDPC will be responsible for overall project coordination on behalf of TCOP and NDPC. The PRU will carry out the following functions: (a) coordinate implementation of the three project components; (b) coordinate monitoring and evaluation activities; (c) coordinate procurement actions following procedures acceptable to IDA; (d) manage the special account to ensure adequate and timely provision of funds for project implementation, and prepare periodic accounting reports and auditing, following sound financial management practices, systems and procedures acceptable to IDA; and (e) prepare annual reports on progress of project implementation to be submitted to the Government and IDA as the basis for the annual review. A project coordinator will be appointed to the PRU prior to effectiveness. NDPC has recently hired a financial expert who will be in charge of disbursement and accounting. Prior to approval the NDPC will appoint a full-time qualified accounts assistant to be responsible for daily operations of the project accounts and disbursements and to work with the financial expert in managing the special account. Technical Advisory Committees (TACs) made up of selected members of the working groups (that prepared the project) will play the role of internal advisors to the Project Liaison Units; reviewing work plans, procurement of consultants and service providers and ensuring implementation progress. Project Liaison Units (PL Us) staffed by existing employees of the concerned institutions -- the Ministry of Health (MOH), Ministry of Employment and Social Welfare (MESW), and NDPC -- will be responsible for the technical supervision of their respective components. The heads of  Page 6 the PLUs will be appointed prior to project effectiveness. The PI,Us will carry out the following functions: (a) select and supervise the activities of the FOs and service providers in consultation with the districts, (b) provide technical advice to service providers, (c) operate an efficient financial management and reporting system, (d) liaise with district assemblies and communities, and (e) manage monitoring and evaluation for the component. The PLUs will report to their respective agencies and to the PRU. At the district level implementation of project activities will be coordinated by the district administration. The District Chief Executive will name a focal person for the project. A district-level committee, including the focal person, representatives from local communities and other representatives from the district government, will oversee project activities. FOs will coordinate their work closely with this committee. Procurement Methods and Responsibilities. see Annex 6 for different categories of expenditure. FinancialManagement. A financial management assessment was carried out for this project. The PRU of NDPC will have responsibility for the Special Account to be established under this project. There will be 3 sub-accounts for the three components managed by the PLUs. The PRU currently does not meet the LACI disbursement requirements. During appraisal the government agreed that for effective project implementation, the PRU would put in place a sound financial management system. This system should be adequate to achieve effective budgeting and monitoring of the cost of project activities, efficient internal control measures, recording and maintenance of up to date accounting records and provision of project financial data for project management. An acceptable financial and accounting system would be an effectiveness condition. AnnuialReviews The government will conduct, with the Bank, annual reviews of program implementation where project management will be modified and funds reallocated as appropriate. 3. Monitoring and evaluation arrangements: Monitoring and evaluation (M&E) will be critical features of the project in order to ensure that useful lessons and experiences are documented and analyzed for their potential replication. Monitoring and evaluation for each individual component will be the responsibility of the PLU for that component In the nutrition component, FOs will monitor selected progress indicators with support from the PLU. Baseline studies with control groups in project communities will facilitate impact evaluation. In the street children component, FOs will also be required to monitor process and impact indicators. External evaluations of the effectiveness of FO interventions will be conducted annually. Under the Poverty Monitoring and Measurement component, learning reports will be produced biannually to document findings and assess effectiveness of institutional arrangements proposed.  Page 7 The PRU will coordinate the monitoring and evaluation by the PLUs. The PRU will coordinate annual implementation reports for IDA, beginning on September 1, 2000. These reports will be routed through the NDPC and will summarize progress in project implementation. They will also highlight any specific issues and learning that have arisen during implementation for which policy guidance from the Project Steering Committee has been required. The reports should incorporate the findings of periodic site visits and technical evaluations including those by extemal consultants on specific aspects of implementing project activities. The PRU will organize and manage the overall end-of-project evaluation that will analyze each component in terms of cost-effectiveness and readiness to be scaled-up. The Project Steering Committee should play an important role in this and other evaluation activities. D: Project Rationale: (This section is not to be completed in a LIL PAD) E: Summary Project Analysis: (detailed assessments for those analyses applicable to LIL are in the project file, see Annex 8) 1. Economic: (supported by Annex 4) [ ]Cost-Benefit Analysis: NPV=US$ million; ERR= % [x] Cost Effectiveness Analysis L ] Other (specify) The nutrition intervention is based on a successful UNICEF model. The specific design used in this project is based on an analysis of how to deliver that type of intervention at the lowest cost. Cost- effectiveness analysis will be an important part of project evaluation. Cost-effectiveness analysis has not been done prior to the project for the street children component, as the specific intervention will be designed during the project. In the poverty monitoring component, cost-effectiveness analysis led to the emphasis placed on improved utilization of existing data rather than design of new data collection instruments. 2. Financial: NPV=US$ million: FRR= % N.A. 3. Technical: Design of the nutrition component and the street children component was based on successful experience-s= in Ghana. Inadequacies in the current poverty monitoring system led to the design of the poverty monitoring activities in this project. 4. Institutional: a. Implementing agencies: NDPC's role in the govemment is one of coordination, monitoring and evaluation. Experiences with implementation of donor-financed projects under the current framework for poverty reduction have been poor. However, NDPC was selected as the central coordinating agency in order to use existing structures rather than create new ones. The project design minimizes the implementation activities required of NDPC and strengthens its capacity to coordinate and monitor. The Nutrition Unit in MOH has considerable experience with activities similar to those in the project. It is well staffed with technically qualified people and has experience working with other donors. The MOH has experience working with the Bank and is familiar with Bank procedures. For procurement activities,  Page 8 the project will use existing procurement capacities in the MOH in association with the implementing agencies until the PRU/PLUs develop sufficient capacity. The roles of the agencies will be defined in the implementation manual. MESW has limited experience with Bank projects and its capacity will have to be built under the project. Poverty monitoring is one of the core roles of NDPC and capacity will be strengthened under the project both to implement monitoring activities and to coordinate with other agencies. b. Project management: The PRU will be the central project management unit, supported by the three PLUs for the different components. A financial expert already in the PRU will handle disbursement and accounting issues with the help of an accounts assistant. Each PLU will have an accounts assistant responsible for accounting issues under that component. 5. Social: There has been extensive work done in Ghana on poverty, including qualitative work examining social issues linked to poverty. As part of the preparation for this project a social assessment was carried out to get more in-depth information on the process whereby communities organize to meet needs and on effective methods of ensuring that community priorities receive extemal support when needed. The findings of this study highlighted the complexity of decision-making processes with communities including the differences between the priorities of community leaders and the District Assemblies which focus on infrastructure and the priorities of other community members which focus on livelihood security. It also examined gender issues related to community decision-making and the difficulties women have in participating in discussions with extemal agencies. The study pointed out the need for improved capacity both wthin district agencies and NGOs for addressing poverty issues at the community level. This project addresses these issues under the nutrition component which will use participatory methods to help communities design food security and nutrition interventions. The project will provide training for NGOs and communities in needs assessment and community organization. The project also supports capacity-building activities for district and sub-district agencies. 6. Environmental assessment: Environmental Category [ ] A [ ] B [x] C N.A. 7. Participatory approach: a. Primary beneficiaries and other affected groups: The design of the project is based on a great deal of consultation with communities, NGOs, and local governments. Primary beneficiaries, the local communities, were involved in the initial determination of needs under the needs assessment (CON). The community nutrition component is designed to be highly participatory, with communities establishing their own priorities and determining what interventions are necessary (COL). Selection of monitoring indicators under the poverty monitoring component will be done through consultation with data users at the district level. b. Other key stakeholders: Project design was done by three working groups organized by the TCOP/NDPC, comprised of members from national and local governments, NGOs, universities and other donors (COL). The Bank's role was to appraise the design and advise on implementation issues.  Page 9 F: Sustainability and Risks 1. Sustainability: (This section is not to be completed in a LIL PAD) 2. Critical Risks: (reflecting assumptions in the fourth column of Annex 1) From Outputs to Objective District assemblies have ownership and are S Ownership built in district willing to collaborate assemblies by including them in project preparation, will benefit from capacity-building activities Government agencies willing to delegate M Concemed government agencies service delivery have been part of the design team and will be part of the selection process choosing NGOs to delivery the services Line ministries accept more demand-oriented M Line ministries participating in approach testing of demand oriented approaches Pilot districts provide sufficiently representative M Careful selection of pilot districts to experiences to determine whether to scale-up cover a wide range of conditions From Components to Outputs Government counterpart funding on time and S Project has been designed by sufficient government and has high levels of ownership Street children component has sufficient S Capacity-building activities implementation capacity included in project activities Project management willing to reallocate and S Importance of annual reviews reorganize as necessary stressed in project preparation Despite complex implementation arrangements H Components have substantial project will implement as planned autonomy. Minimized need for coordinating activities. Annual reviews offer scope for changing procedures Sufficient incentives are put in place to prompt S Component design takes into district personnel to carry-out project activities consideration need for incentives NDPC develops sufficient capacity to S Project design minimizes necessity coordinate project and manage poverty for NDPC action. Capacity monitoring component -building activities under project Overall Risk Rating H Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk) 3. Possible Controversial Aspects: None G: Main Loan Conditions 1. Effectiveness Conditions: * Appointment of qualified accounts officers for the PRU and each PLU  Page 10 * Appointment of auditors * Appointment of project coordinator and heads of PLUs * First year work plan approved by government and acceptable to IDA * Financial and accounting system acceptable to IDA * Final Operational Manual ready and acceptable to IDA 2. Other: (classify according to covenant types used in the Legal Agreements) e Disbursement condition for the grants for the Street Children component is operational procedures for that component acceptable to IDA.