Ghana and the World Bank 2002 : a partnership for progress

74383  Page Foreword 2 Statement by Mini ster of Finance 3 Statement by Priv ate Enterprise Found ation 4 Statement on behalf of Civil Society 5 H istorical Perspecti ve 6 Ghana Today: hall engcs and Strategies 8 Poverty and the Ghana Poverty Reduction Str<ltegy 10 I npc Initiati ve 12 Economic Managment and Refo rm 13 Sec toral Activities 14 Agriculture and Rur,ll Development 15 Education 17 He alth 18 HI \ , [OS 19 - 'J blic Sec tor Management ,\ " . 20 Wa ter and Sanitation 23 Local Governme nt ane! Urban Development 25 Tran sportat ion 27 Private Sector De velopment 29 Financial Sector 30 Energy Sector 31 Mining Sector De velopment 32 Informatio n and Communication Tec hn ology 33 Partnersh ip with Others 34 Collaborating with ivil Society 35 Looking to the Future 37 The World Bank's afeguard Policies 38 International F inance Corporation 39 Mu lt ilate ral Invest me nt Gu arantee Agency 40 Africa Project De e lopment Faci lity 41 AMSCO 42 Curren t World Bank Financed Projects in Ghana 44 ,\ I',\ RT '. I RSII II' FOR I'ROGRESS  GH A NA AN D TI [E WORLD BA NK 2002 FOREWORD his is thL: second edition of "Ghana and the World Bank" that I have had the pleasure of overseeing. Again, T thi s is timed to coinc ide witb the holding of the Consultative Group for G hana meeting in Accra. Of more significance, it is th e first such publication since the new Government took office in January 200 I. There was a very smooth transition both for the change of gove rnment itself and with respect to the World Bank, and a very strong relationship has quickly developed with the new government. [n particular, we have been gratified by the way the new govenunent faced up lo a very challenging situation, and by the way it has stro ngl y comm itted itse lf to good governance. Further, a very strong feature has been the development of the Gbana Poverty Reduction Strategy as the foundation both for government action and for support from development partners. The transition that Ghana has gone through ge nerates a pause for reflection. The last 20 years have seen undoubted progress in Ghana, and yet this progress is so much less than it could have been and has le ft too many people mired in poverty. As we look forward , ou r greatest hope is that Ghana will at last begin to realize its full potentia! for the benefit of all its people. Peter Harrold Cou ntry Director for Gha na Accra, March 2002 < •• NOtfl., with the ~ence of II8W pmg~«~ revulsion for power wilh selfish ends, there are mOtmling-eve1f .. !from a ~ generation uIA~)fordevelopment that works/ o r thepeopk . The ilitiiitnds (IT(! f(Jr peace. For< reducing ptJVerty tIitough growth and solid public services. For atmlmlable, UTU;orrUf!te4 gOllemmenrs, The tkfl'llllUls art! also f or a viable fuJure for the Ilnemp and the youne. A ndjor inclusion in a progressive world. There is 17UJmentum on ai/ these frv~1iiilfarfrom e1WUgh... ,; Quote from speech delivered by K.Y. Amoako, Ex ative Secretary, Econonuc. Commission for Africa (ECA) entitled - FULFll...LING AFRICA'S PROMISE - at 10 Downing Street. London 17 December 2001, during Prime Minister Tony Blair's MiUennium Lecture. A PARTNERSHIP fOR PROGRESS 2  GHA NA AND THE WORLD BA NK 2002 STATE rENT BY TH E Ml 1STER 0 FlNA CE he World Bank has long been an active partner of Ghana, granting its first loan to the cou~try for the. constmction T of the Ako ' ombo Hydro-Electnc Dam In 1961. It has contll1ued to support Ghana s economIc and socIal development through many diverse projects. ft has, over four decadcs, provided SUppOlt for policy reforms, covering not only macro-economic policies, but also sectoral refonns in education, agriculture, the financial scctor and private sector development. II has also provided a number of project loans in these sectors. To date, the Wor"ld Bank is thc lead lcnder to Ghana having lent ovcr USS4.0 billion to Ghana, mostly on concessional tenns from ib soft window - the International Development Association (IDA) . As a natural consequcnce, about half of OUf foreign debt is owcd to th Bank. The Bank is clmently funding aboul 25 on-going projects in the country. On an annual basis the country receives an average of USS300 million as commitm nt - from the World Bank. Despite the relatively substantial inflow of resources to Ghana and our long association with the World Bank, thc implementation of somc ofthe projects/programs has not yielded the desired results sufficient to impact positively on our development process as we would have wished. The pacc of implementation of most projects has been gencrally slow, leading to canccllation of undisbursed credits at the closing date and non implementation of some project components resulting in the non attainment of full project benefits. Again som c of the factors ,,1tTecting smooth implementation have bcen inadequatc project designs, cumbersome procedures and guidelines oftbc Bank as well as frcquent changes of personnel within the Bank. On the part of government thc constraints have been la k of adequate and motivated counterpart personnel and timely provision ofmatch.i ng funds. The problem of matching funds in an economy where serious efforts are being made to reduce govemment deficit remains critical. Howe v r every effort will be made to solve these issues to ens ure that we derive ma, irmun benefits from our projects! programs in the future. l! is my firm bclic(that if we arc able to properly dcsign, successfi.dly implement and ta ke fi.tll advantage of these proj c<.' t s, we \Vip , ~o a large extent, achieve our aim of creating tho:: environment which attracts Foreign Di rect Inv l mmt'to jolQ,.h~nds with local investors to facilitate hi : r rates of ccollomi..: growth. We will further be able to t ulfill the wish bCtf1"e government and also that of the \i enId Bank, of reducing poverty, creating opportunities through education and the provision of more social services to the people of G hana, thus making Ghana a mueh better place to live. or Ghana (le(i) and /Ian }'iIlV Osafa-Maafo, AliniSlc'r a/Finance (right) PC'ler Harrold, COL/illry Director( signing a S25 million Governll7ent a/Ghana AIDS Respons(' Credit. No vember 2001 A PARTNERSH[P FOR PRO(;R.ESS 3  GHA NA AND TH E WORLD BANK 2002 STATE MENT BY PRIVATE ENTERPRISE FOUNDATION (PEF) ON BEHALF OF THE PRIVATE SECTOR o the private sector ill Ghana, partnership denotes an arrangement that is functional and participatory. The T various partners have to foc us on how well they play their part to ensure the attainment of general goals and the satisfaction of their sectional interests. Within this framework, the Private Enterprise Foundation would urge all collaborators to refl ect on their ideas, the consultations, the performance etc with the focu s on results that would strengthen the partnership and make it meaningful and beneficial. We need to encourage the pri vate sector to understand the partnership and to be guided by the objective of attaining better results through enlightened contributions to enrich any proposals made by "World Bank experts", and also to be able to convey our more informed vi ews on development issues to the World Bank. Partncrship goes with shared fforts, shared aspirations and mutual respect for professionalism and technical deta ils that are necessary in a results-oriented environment. How prepared are we to face the challenges in the new vision we need to have in the partnership with the World Bank? We call for a better understanding of our capabilities in identifying economic problems, presenting feasible proposals, analyzing the alternatives and dec iding on measures that will work success fully, given our environment and other conditions. These should be the same goals the World Bank aims at through its insistence on detailed analyses, the specification of condi tionaliti es, and keeping the discipline necessary for economic change , developmcnt and growth. We need to embrace th e partnership for effic iency, for an improved environment for exchange of ideas and "the learning process"; partnership for better understanding of economic and social issues and the determination to pick the right polices and to implement these successfully. If we work well, we shall keep "ownership" of these desired policies, and the strange notion of "policies being imposed by external forces" will be cleared from our list of problems with the economy forever. Let us gird our loins in matters economic and social and our 0 " '1 vIews can also be favorably accepted by the World B an ~ I We need to be prepared for what the partnership .. lt2:iS. Nana Yeboah-Kodie Asare II. President ofthe Governing Coullcil Private Enterprise Foundation A PARTNERSHIP FOR PROGRESS 4  GHANA AND THE WORLD A!\NK 2002 STATEMENT ON BEHALF OF C1YU, SOCf.ETY ORGANIZATIONS elations between the Ghana Office of the World Bank and local civil R society have improved somewhat since 1997 when the Structural Adjustment Participatory Review [nitiative (SAPRO was launched in Ghana. From a situation of ncar zero contact between the World Bank and local civil society organisations in the t 9805 and the first hal f of the 1990s, contacts between the two actors increased towards the late 1990s at various levels. The SAPRl exercise in Ghana provided a platfoll11 for periodic interaction with World Bank officials in Gha na and/or Washington. Representatives of Civil Society Co-ordinating Council (CIVISOC), the coalition of civil society organisations formed to oversee civil soc iety participation in the SAPRI exercise, periodically met with visiting officials of the World Bank, from Washington. At such meetings, a broad rangc of issues pertaining to the macro­ economy, povelty reduction, accountability and transparency in the democratic govell1ance of the country were disc ussed . Needless to say, these discussions Kwasi Adu-Amallkll'olr, broadened the issues on which ,the World Bank had initially interacted with Chairman, CIVISOC & segments of civil soc iety in Ghana. Secretary-General, TUC From its earlier preoccupation with devcloping relations with scrvice delivery development Non-Governmental Organisations (N GO) and Community Ba.' ed O rganisations (CBO), the Wo rld Bank gradually opened up towards advocacy-oriented NGOs including gender and other issue-based organisatic n5. In , ovember 1999, it collaborated with ClV[SOC in organising regional forum s to enable CBOs and other civil soc iety associations to input into the preparation of the World Bank's busines plan for the period 2000-2002, the currcnt Country Assista nce Strategy (CAS). Anothe r invitation was extended to CIVISOC to obsen <:' he 10th Consultativc Group Meeting of Donors, held for the first time in Accra in Nov mber 1999. Commendable as the World Bank's initiatives were, they did not develop into a regular system of civi l society representation and consultation on the making of macro-economic policy decisions involving the Bretton Wood institutions. The typical situation was one in which the World Bank invited civil society organisations to observe the CGM but could not secure their logical involvemcnt in the mini-CG process of monitoring and co-ordinating aid. Similarly, the World Bank had becn successful in advocating civil society pal1icipation in the preparation of the fu ll Poverty Reduction Strategy Paper (PRSP). But, while this process was underway. the Bank and the Govcmment of Ghana made a decision on thc HIPC status of the cOllntry behind closed doors , without any public debate and/or deliberations on the range of options open to the country. Evidently, in the late 1990, and carly 2000s. the World Bank interacted much more with civil society organisations on macroeconomic and soci al policy issues than it did in the past. Civil society actors welcome these initiatives and interactions as significant basis for continuous development of critical but constructive relations \"'ith the World Bank. But, having interacted on macro-economic policy issues for almost half a decade , thcre is popular {i eli ng among CIV [SOC members in particular and civil society in general that th e World Bank could and should do 1110re to address the substantive issucs of building partnership with civil society organisations. The first of th" substantive issues that the World Bank has to seriously address is its retention of the nco-liberal macro-economic paradigm as the only paradigm of development for a poor country like Ghana and others in Alri a and the wider world. So rar, that paradigm has failed to facilitate poverty reductio n, create jobs and put African countries on the path of su:;tainablc growth and human development. [t is time the Wo rld Bank acknowledged the failurc of its developme nt paradigm anc! embraced alternative paradigms that have great potenti~ll to produce betlcr and la sting results. T he second issue has to do with capacity building in eivil society actors to el1cctively engage the public policy proc ss in all its phases . So far the World Bank has apl)cared kcen on taking ad van tage of capaciti es that already exi,(S in civil soc iety and can be exploited to advance it obj ctives. What the Bank had failed to do so far is to abo invest in xpanding the techni ca l capacity base of civil soc iety actors to enable them serve as autonomous, worthy and credible pa11ners in all spheres of development. .'\ PAR r NE RSf-[lP FOR PROGR.ES$ 5  GHANA AND THE WORLD BANK 2002 HISTORJCAL PERSPECTIVE hana's relationship with the World Bank dates back the country has put together to carry out its long term G to 1961 when the then Government applied for Ghana's fi rst financial assistance for the construction vision. It is based on the simple premise that to succeed, a country needs a long te rm vision of its pattern of of the Akosombo Hydro-E lectric the Volta Dam. As the development, and that it makes much more sense fo r Volta River Authority celebrated its 40th Anniversary in external partners to come together to finance programs the year 200 I, Qhanaians could proudly say that not only in support of such a vi sion, rather than carrying on with has the Dam brought light to the homes of the people many separate proj ects, many of which are not really of Ghana and beyond, but it has served as a great source owned by the host coun try. Ghana was selected as one oflivelihood to the formal industrial sector and, equally of the twelve countries to pilot this initiative and has importantl y, to the many Ghanaians engaged in a wide used it to deepen coordination among its development range of informal economic activities. partners in order to increase the impact of external resources on poverty reduction. In 1983, the Government invited the World Bank to participate in the country's econom ic reform process. Under this framework, Ghana's relationship with the Th is phase of the relationship started when, after World Bank has seen sign iflcant improvements in designing its Economic Recovery Program (ERP), the various areas. With regard to ownership, in order to government requested assistance in financing essential ensure that all the programs are genuinely those of the imports for the reconstruction of the economy. Around Government, it has been our guiding principle that they the mid-eighties, when the Bank's new lending are not "supply-driven" by Bank staff. The existence instrument, the Structural Adjustment Credit (SAC) of a broad long term vision for the economy helped were developed, Ghana became one of the first countries this, but the development of sector strategics, such as in Africa to benefit from it. Several such Credits those that exist for health , roads, and for public sector succe ssfully provided broad support for macro reform, and the fac t Ulat these are controlied ' ,1d driven economic reforms and marked the beginn~ng of a long by the Governm en t is c r itical f( ~uccess and and improved collaboration betl"l.cn '.Jllua and the sustainability. Symb olic to lo c.. ,nership and World Bank in the area of policy worl< . leadership has been the shift of the Consultative Group Meetings from Pari to Accra. Equally significantly is As of December 31,200 I a total of 134 loans have been the creation of the 'Mini-CO" which provides a more approved for Ghana, amounting to US$4.36 billion. Of regular framework for the Government to meet formally these, 22 projects/programs with a portolio value of on a quarterly basis with its development partners under about $ 1 billion and an undisbursed balance of about the co-chairmanship of the Minister of Finance and the US$450 m illion are still active today. World Bank Bank's Country Director_ support continues to be geared towards general poverty reduction in G hana . and has helped the country With regard to decentralization of the Bank's operations specifically to rehabilitatc and restructure its energy and to the country office, G hana was one of the first water sub-sectors, to reconstruct and develop its health countries in Africa to have the Country Director moved and education systems, to enhance the road network from Washington to the country, about five years ago, across the country and improve urban infrastructure, with the associated localizalion of decision-making. and last but not least, helped promote capacity building This has sped up many processes. Almost all deeision­ and kno wledge development. In all these, poverty has making on procurement waS brought to the GQana remained the number priority for both the Government Office ofthe World Bank. All decision on procurement and the World Bank. up to $10 million for goods and up to S5 million for services (which covers all except for a relatively few In early 1999, the World B ank launched the decisions each year) are now made in Accra. This sped Comprehensive Development Framework (CDF) as an up the procurement proces sharp ly. Washington based initiati ve to promote gre ater coordination in staff still com e to G hana on missions , but development assistance within countries. It attempts implementation support i firm ly rooted in the country, to bring all of a country 's partners together, under the along with the key dec ision-mak ing capacity. leadership of the country, to support the programs that A Pl\RJ,\I.RSHIP fOR PROGRESS 6  GIIANAAl':D TIll' WORl.D UA~K 2002 One other important development in the relationship is In early 200 I, G hana decided to seek debt relief unde r the redefinition ofthc Country Assistance Strategy (CAS) the HIPC Initiative. This program seeks to bring the process. Cases used to be a World Bank document in debt position of poor countries who have performed which was outlined what the Bank thought was its weIl to a level that is affordable. Ghana has quickly assistance strategy for a country Over the past few years, reached the "Decision Point" in its HIPC negotiations, this process has becomc almost completely owned and and is now enjoying relief 011 $3.7 billion out of its $6 directed by the Government, with inputs from across a bi Ilion total debt. T his has reduced Ghana's annual debt broader spectrum of the Ghanaian society, particularly payments by almost $250 mi Ilion a year, re leasing the private sector, the Unions, NGOs and othcr Civil resources that can now be used to support the fight Society organizations. Copies of the last CAS document against poverty can be obtained from the World Bank Ghana Ofticc. In thc spirit of participation and more openness to Civil At the moment, the Bank has been working very elo ely Society organizations, both the Government and the with the Government in the development of the Ghana Bank opened an important chapter through the Poverty Reducti on Strategy (GRSP), a frame work involvement ofthcse organization in the CAS process. which . is con ider d by the Governmcnt as the action This wa s, in part, the culmiJlation of the Structural program to be used as a tool for improving the standard Adjustment Participatory Review Initiative (SAPRI), a of living of the people. This framework is disclissed in global initiative aimed at reviewing structural adjustmcnt more detail later. and its impact on the peopk as weIl as forging a more participatory approach i.n the design and implementation The rest of this brochure presents a more detailed of adjustment policies. Many Ghanaian Civil Society overview of Ghana's relationship with the World Bank organizations played a lead role in thi s initiative and in a number of arc · s, and loo ks at how this partnership the G hana SAPRI was adjudged onc of the most might evolve in the years to come. participatory. · ChunG sjirst project support ed by the World Balik \I'([sfor the COl1structioll a/th e Akosomho Dam. Suhsclfuent projects supported the distrihutioll 0/ electricity thro ughout GhanG. and the CO I1StruC!/OIl a/ th e Takoradi thermal fHJ II '('/' plu!1l ,\ P·\R1SCRS llll' FOR PROGRESS 7  GHAN A AN D THE WORL D BANK 2002 GHANA TODAY: CHALLENGES AND STRATEG£ES he biggest change in G hana since the last edition Ghanaian economy did three times in the 1990s - are T of "Ghana and the World Bank" in November 1999 is obviou sl y the peac eful de mocratic change of very severe and ta e a long time to recover from .. government that took place in December 2000. It is \\there, then, is the economy today? A strong program notable and a little sad that this event in Ghana - which of stabi lization has been enacted in the first year of the was merely the respect of the Ghanaian Constitution new government, that has addressed most of the key and th will of the people - should be rega rded as so issues and sent all variab les in the right direction : extraordinary. This said, it was a remarkable series of inflation has fallen sharply, domestic and international events with a palpabl e feeling of change in the air. debt have been restructured (with "HIPC" becoming a new adjec tive in everyday Ghanaian speech), the But the challenge that the new Government faced was curre ncy has beco me more stable, government not to be envied. We have described it as a "dangerous borrowing has fa llen sharply and the interest rate is situation": the Cedi was un table, inflation was close to moving towards affordable leve ls. This is a sound basis 50%, dom stic debt interest payments were consuming for progress. It do so't mean that the macroeconomic half of all revenue, the inter st rate pushed borrowing battle is over, for it can never be, but it does lay the beyond aU but the Government, reserves were measured foundation for moving forward with development and in days rather than months, and the government appeared poverty reduction policies. to have temporarily lost control ofspending. The external shocks that the economy received had not been adapted In this rega rd, Ghana has two great advantages, leaving to, and new stabilization mea ures were urgently needed aside its location and narural r sources first it has a people as the top priority facing the new government. If the with a wide range of talents, ingenuity and skills, and state of the democracy was a cause fo r celebration, the with a justifiably famous reputation for welcoming and state of the economy was worrisome. openness. This is ofenonnous potential importance; and Second, it has a culture capable of seeing the "big picture" "How can this be, after almost 20 years ofadjustment?", favoring integrated development strategies and programs, many peop le ask .. Doesn' t this mean that adjustment and not believing in a single "magic buHet", but a need has failed') To us, it reflec ts two things in particular: to work ',· multaneously to improve across a number of that"tbe j t'b (1 ' transforming the Ghanaian economy into sec t0[~ . In addition to these a dvantages, 'Ghana has the a robust, resilient, and vibrant state is far from complete, basic physical infrastructure in place, which is good for and takes longer than some had originally thought; and domestic use, but sti ll needs major improvements to second, that the costs of "slipping off the rails" - as the become competitive in export markets. Parliament in Session : A vibrant democracy is being nurtured ill Ghana today, and all efforts must be made to maintain and sLlstain il A PARTNERS Hll' FOR PROGRE SS 8  (jl I.\NA AND TilE WORLD BANK 200 2 Domestically, Ghana has to fac e up to four great in this century. Similarly, the knowledge economy is a challcnges in its economic and social development. ne w global phenom e no n that offers cnormous First, thc last two years havc really emphasized the opportunities and some dangers. Ghana appears poised fragility and vulnerability of the economy. This means to be one of those countries that will benefit from this that policies and institutions to devclop the private sector trend. Already, two companies have set up in Accra and diversifY the economy are ofcnormous importance, doing data processing - including, it might be noted, all but, gladly, have reach d center stage. Second, the level of the processi ng of health claims for the company that of poverty in Ghana, at over40%, remains unacccptably runs the World Bank health insurance! - and there ar high , and has been worsening in the north. Not only over 200 internet cafes in Acera alone. Third, the wo rld does this call for higher growth , but specific programs continues to be shadowed by the etlects of Septem er to ensure more widesprea d benefits of growth , II th, and what this may mean in terms of globa l especially through higher rural productivity. Third, there slo\vdown and less attention for Africa. This is a real is a widespread dissatisfaction wi.th the quality of threat, best responded to by ensuring that domestic education, despite high resource allocations to the sector. policies are themselves as good as possible. Finally, A strategic and institutional review is under way that is there lies the problem that the world's trading system of critical importance to Ghana's future. Fourth, continues to be in need of sl!rious reforn1 if the benefit governance improvement - which means more thanjust of trade are to be spread more equitably, and here we the state of the democracy - ri.eed to be deepened, must hope for good new fr m the "development round" especially in terms of decentralized government, anti­ of reforms at the WTO . conuption and the reformed role of the state vis-ii-vis citizens and private companies. Government is reacting to all these challenges and opportunities by formulating strategies and gearing up None of these challenges is news to the Government, to ensure their implementation. rn particular, it has just and much of the World Bank's current function in Ghana .i ssued the "Ghana Poverty Reduction Strategy: A" is to work with the Government and other stakeholders . Agenda for Growth and Prosperity" (GPRS), which t. lS to address these challenges. out its policy direc tions and plans in a vo;: ry . i' comprehensive way (see page 37). The GPR ') " II I be Externally, the world is also posing challe-ll f' ..~ for the centerpiece around which all developm ' . l aI;tners .,\. Ghana, as it is for all of Africa . . Globali z lI OU i a will fonnulate their programs for Ghana, a,,·' indeed, it phenomenon that is here to stay, and which can be's'eized is the core document for the 11 th Consu ,,,tlve Group and rel ished, or feared and shunned. It certainly poses Meeting for Ghana, taking place in Accra April 8-10, great challenges of management, and has yet to deliver 2002, with which this publication is designed to coincide. the same level of benefits in Africa as has been seen The big test now is to see that this poverty strategy is elsewhere. The countrie of A frica tha t rise to thi s tirmly reflected in the Ghanaian budget, and is actually challenge will be the ones that will develop most rapidly implemented, rather than being just another plan. Ghana s markel.> are jWI10LlS j iJr Iheir vibral1t economic aClivity alld th e hardworking markel "'omen A PART. ·fR. HLP !'OR PROGRESS 9  GHANA AND THE WORLD BANK 2002 POVERTY AND THE GHANA POVERTY REDUCTION STRATEGY P overty is a multi-dimensional concept which encompasses levels of income, nutrition, health, literacy and insecurity. One of the main sources of data headed househ Ids. Even in Eastern region where poverty has fallen slightly, female poverty has increased. The data indicate that women are still vulnerable and on poverty is the Ghana Living Standards Survey often are the pri mary victims of poverty. Among farmers (GLSS), for which the World Bank provides technical - the most co mmon occupation in Ghana - export assistance to the Ghana Statistical Service (GSS). farmers made the greatest gains in their incomes, while food crop farmers did less welL The GLSS3 and GLSS4 indicates that 40 percent of the population is classi fied as poor in Ghana in 1999, a The most striking res ult of this data is that although dec rease from 52 percent in 1992. However, the economic growth has enabled more households to chieve reduction in poverty was not experienced evenly in all levels of consumption above the poverty line, there are parts of the country. The major reduction in poverty some groups that have been left behind. There are areas was observed in Accra and the Forest (urban and rural) ofthe country (the Northern Region) and some occupation zone. There were very modest declines in poverty in groups (food crop farmers) that have benefited littlc, if at most other parts of Ghana, except the Urban Savannah all, from economic growth during the 1990's. where poverty in fact increased between 1992-9. On other welfare indicators such as potable water and Poverty continues to be more prevalent and serious in toilet facilities, there was improvement overall , but rural areas. Both urban and rural poverty are heavily again differences among areas and types of households. concentrated in the Savannah zone. This implies that In urban areas, while overall there was an increase in the Savannah zone has benefited little from Ghana's the access to potable water, among the poorest 60 economic growth during the Last decade, where poverty percent of households acces:; actually fell slightly rates of about 80% were recorded, about7.5 percentage between 1992 and 1999. The sto is much better for r , ",; .. ­ points worse than a decade earlier T Idition, extreme rural areas where access to potab' ,n,er increased fr m 'j, poverty is concentrated in the 'S;l ltdnnah and Coastal one-half of households to al mo~1 :wo thirds, with poorer zones, and the levels of urban extreme poverty have households showing the greatest gains. hardly changed. On health services, the data raise some concerns becal e Looking at the data by Region, poverty has declined in they indicate that fewer people an:: consulting doctors the West, G reater Accra Vo lta, Ashanti and Brang and visiting public health facilities when they are ill. Ahafo , but it has insreased in !he Central, Northern and.., ' .:rhi~ is a widespread trend, seen among both urban and Upper East. The incre ase~ it;l 'poverty in the Central }: ' rural households and fo r all but the wealthiest urban region reflects .i! worseni ng wel~re situation of femaie hop,seholds< Desp}te this, most health indicators have GeogrilphlcJI Ol.tribution 01 the IncIdence of Poverty All Upl'fi E.1st UppMWlIISt . , , I .. 5\ 7 I 'Y , t r I Northern B Ahai0 ! , ~. ,. I Ashllnl! - .. h JI .2 I VolU , ,10 , 0 GACCTiJ "' ~2 1 , ,,~ I .. . - Ce nt~1 I, , . - " ". .' ." '" ~ Source: Ghana Statistical Service, 2000, Poverty Trends in the 1990s. Accra APARTNERSHIP FOR PROGRESS 10  GHi\,\Ai\:'<DTHE WORLD I3i\NK 2002 shown a positive trend. On educJtion, attendance raks Strategy (GPRS), as the PRSP is ca ll ed in Ghana, contains for primary and sccondary sc hools increJsecl sha rp ly policies based on: macroeconomic stabili ty; agricul tural between 1992-99. Now 1110re than fo ur out of eve ry rural de ve lopment; governance and public sector reforms, five children 111 Ghana attcnd prim ary school. Al though including dcccnt ral ization; equitab le access to health and the gap between attcndancc rates of girls and boys has eciuc<ltion serviccs; and protectioll of the vulnera ble and dccreascd at the rrilllary lewl , the gendcr disparity is exc lu ded (see page] 7) still significant at t11e secondary level. The Ba nk has provided tcchnica l ass ista nce to assist in On the basis of the poverty dia gnos is, the Government preparation orthe PRSP and is read y to prov ide further of Ghana is preparing a Po verty Reduction Strategy Paper Jssistance as required by thc Governmcnt, in addition as a basis for future assistance of the [3.lIl k and the Fund. to facilitating access to fi nanc~al resources in support An interim Po ve rt y Reduction Strategy Pap er was of the process. Staff of the 13ank also have prepared considered by the Boa rds of the Bank. and Fund in August severa l pape rs o n und erstanding the causes and 2000 and found to be a good basis lor developing the co nsequcnces of povcrty, publi c expenditure benefit fu ll PRSP. Present ly, tbe draft Ghana Poverty Reduction incidence and tracking or public expenditure flows. GOV(?Tnment of Ghana's Pove rty Reduction Targets 2000 2004 Core Poverty In dicators Incidence of poverty 39% 32% Incidence of extreme poverty 27% 21% Rea l GDP growth rate 3.7%, 5% Re,11 GOP per cap it a growth 1.4'Yo 2.4% Gross primary school enro lment rate To tal 7(,";;) 80% Girls 72% 78% Under-five mortality rate , 110/ 1000 9511000 Maternal mortality rate 2 141100000 160/ 100000 Children under-five undcrweight 2)');., 20% Total Fertility Rate 4.0 4.2 Supplementary In dicators Inc idence of poverty among food producers 59% 46°/') Incidence of po vcrly in: Northern 69% 60% Upper East 88% 75% Upper Wcst 84% 70% Consumer price index (end ye:lI') 40% 5% Agricultura l growth rate ] .8% 5% Social sector expenditure/total expendi ture 3].9% I ]8.0% InC1nt Mortality Rate 56/ 1000 50/ 1000 Criterion Reference Test (mastery lcve l) for pub lic prima ry sc hoo ls Engl is h 8.7% 17% Math 4.0% 10% Gross ju ni or secondary schoo l en rollll ent rate 60% 65% I lous cholds with access to sa fe water Urban 70% 78'% Rural 51% 67% III V; AIDS bella viour indicator - condolll use l'emalc 6~~) 20% tvlal e 14% 30% A PARTNfRSHIP FOR PROGRESS 11  GHAN A A;"ID TH E WORLD BA'\K 200 2 HlPC INITIATIVE T he I-IIPC (Heavily Indebted Poor Country) Initiative was propo ed by the World Bank and IMF and agreed by governments around the world in the fall of 1996. It was the fIrSt comprehen ive approach to reduce the external debt of the world's poorest, most heavily indebted countries, and represented an important step forward in placing debt relief within an overall framework of poverty reduction. A major review in 1999 resulted in a significant enhancement o f the original framework, and has produced an Enhanced RIPC Initiative which is deeper, broader and faster. The lnitiative is open to countries that: (i) are eligible to highly concessional assistance such as the World Bank's Intem ationaJ Development Association; (ii) face an unsustainable debt situation even after the full app lication of traditional debt relief mechanisms; (iii) have a proven track record in implementing strategies focused on reducing poverty and building the foundation for sustainable economic growth. . . .The initiative involves two stages. In the first stage, the HIPC country works in coordination with the World Bank and lMF to establish a record of implementing econ mic reforms and poverty reducing poli cies, with a particular focus on developing a Poverty Reduction Strategy Paper (PRSP). At the end of the first stage, the country reaches its decision point, where it is d termincd whether the debt level is sustainable, and, for countries where the debt burden is determined to be unsu tainable, a package of debt relief is prepared and committed to by creditors. While interim debt relief is provided between the decision point and completion pelint, countries receive their full package of debt relief once it has implemented a set of key structural reforms determined at the decision point and linked to the PRSP. At the 1( l onsultative Gr up Meeting in Accra in N ovemb{' 1999, the then Government announce.d its decision not to apply to the RIPC Initiative at that time. Thi , was based on an evaluation of the likely level of debt relief that was going to be available at that time, in comparison with the expected I S8 of externa l inflows. However, dUling the subsequent 18 months, the Cedi underwent a major real depreciation. and a re-evaluation of the potential relief under RIPC was carried out in February 2001. based on the new RIPC rules. The depreciation and the revised HIPC framework more than tripled the amount of relief available to Ghana. As a result, the Gov ernment of Ghana announced its intention to apply fo r the HIPC Initiative in April 2001 and a preliminary assessment of the country's eligibility for as, istance was conducted by IDA and IMF in May 200 1. The IDA and IMF agreed to support Ghana under the Enhanced HIPC Initiative through the Decision Point meeting in February 2002. The decision was reached based on the debt sustainability analysis which showed that Ghana qualified under both the NPV ofexternal debt to fiscal revenue ratio and the NPV of external debt to export ratio criteria. Total relief from all of Ghana's creditors under the RIPC Initiative amounts to US$3,700 million. IDA's contribution amounts to US$l ,446 million, to be disbursed over a 20 year period. IDA begins providing debt relief immediately in lhe form of interim debt relief, as will IMF and most official bilateral creditors, but the bulk of the relief will be deli ered upon reaching the Completion Point. Ghana reaches its floating Completion Point when the country successfully implements the key policies agreed by the G vernment in the Decision Point. These will include the completion and implementation of the GPRS, education and health spending targeted towards the poor, governance and public expenditure management reforms, and further decentralization. A PARTNERS HfP FO R PROGRE SS 12  GHANA AND TI IE WORLD [lANK 2002 ECONOMIC MANAGEMENT AND REFORM acroeconomic stability ha . s been elusive during of economic reform to enhance long term growth M most of the 1990s. Periods of relati ve fiscal and monetary discipline were incvitably punctuated by prospects. These loans were often accompanied by technical assistance which built the capacity for policy periods of high influation. Inflationary pressure formulation and implementation in core government typically emerged as a result of fiscal relaxation at the institutions, including the Ministry ofFinancc. A series time of general elections, in the f0011 of a civil service of Sector Adjustment C redits starting from the first one wage hike associated with the 1992 elections and a rapid in 1987 supported policy reforms in education, financial burst of public in vestment associated with the 1996 sector, agriculture, private sector development, and elections. fnflation was partly contained by the early plivatization. After a period of interruption during 1996­ half of 1999 through tighter fiscal and monetary 7, adjustment lending resumed in the form of Economic management, but re-cmerged aftcr the mid point of 1999 as a rcsult ofa sharp declinc in Ghana's terms of trade. RefonTI Support Operations (ERSO), a fast-track, Ol1e­ Fiscal loosening leading up to the 2000 election tranche credit. ERSO 111, the latest in the series, was exacerbated the problem and, the Cedi lost half its va,lue approved and disbursed in mid-200 I, providing support in 2000 and the inflation rate renching the 40 percent tor continuing retorms in budgetary management, public range for the first few months of200 I. Fortlinately, the enterprise divestiture, banking sector reform, and cocoa economy stabilized in 200 I as the new government export marketing. exercised tighter control over fiscal expenditure, domestic borrowing, and the money supply. The In particular, ERSO III supported the preparation and inflation rate declined to 21.3 percent at the end of the implementation of the G hana Poverty Reduction year, and the cedi depreciated by only 4.1 perccnt ovcr Strategy (GP RS) w ithin a broad participatory 200 I. With the macroeconomic environment under consultation process. I n essence, the GPRS has become relativdy stable control, thc authorities should now be the basis for the Ba nk's support for economic able to bctter focus on increasing growth and improving management and refoml in G hana. It is an integral part noverty and social indicators. of the HIPe Initiati ve whic h provides a sounder fisc! , ;fhe World Bank has had a long history of providing , foundation on which the authorities can purSlJ . i . support for economic management and policy reform' reform agenda. Future support could come in the .i.1rm in Ghana. Since the early 1980s, the Bank has provided of a Poverty Redu tion Support Credit (PRSC) which structural adjustment lending which provides foreign provides budgetary support for the implementation of exchange budgetary support for government programs policy reforms in the G PRS . Ghana~' efforts to be a leading exporter ojpineapples and other non-traditiollal exports received significant suppOrt under the Agricu.ltural Diversification Project A PARTN ERS HfP FO R PROGRESS L  GHANA AND THE WORLD BANK 2002 SECTORAL ACTIVITIES or a number of reasons, the World Bank in Ghana disbursement should be compared to the average tota l F has come to be synonymous with structural adjustment, the imposition of conditionality and with level of external assistance to Ghana, which 'has been rurming at a level of disbursement of about $600 million H1 PC. However, a glance at the portfolio today and for per annum, and thus the World Bank accounts fo r about the la st several years shows that the bulk of our one third of all the assistance that comes to Ghana. involvement is at the sectoral level, and is concerned essentially with the provision of services in agriculture, It should also be mentioned that several of the credits ed ucation, and health, and with the development of granted to Ghana of la te have been what are ca lled economic and social infrastructure. "adaptable program loans (APLs)". These provide very long term ass istance to Ghana, for 9-12 years. These As can be seen from the table on page 44 this is a broad permit the Government to take a long view of a secto r, program of involvement in many aspects of the when this is called for. Such operations now cover natura! Ghanaian economy, from economic refolID to education, resources management, community water supply, pub lic agriculture to urban development, road construction to sector management, and agricultural services the health sector. There are 22 ongoing programs, most of which are scheduled to last 3-5 years. The total value All credits to G hana are on standard IDA terms, that is, of the World Bank's commitments to Ghana through they are repayable over 40 years , with 10 years ' grace, these various operations is $1.05 billion, and, of this and with zero interes t charges. This means they have a total, j ust under $500 million remains to be disbursed. grant element of 80-90%. This said, given the long involvement in Ghana, the debt outstanding to the World G hana's disbursements have averaged between $200 Bank stands at $3 billion, almost half of Ghana 's lotal million and $250 million a year for the past several external debt. However, because of the favorable tenns years. The portfolio is now nearing its "steady state" of the Bank's ass istance, it accounts for less t. l<m 20% of some 20 operations with a total value similar to of debt service. today's levels. It should be noted that this level of High-y ield palm. Agriculture remains the most important sector for Ghana f\ PARTNERSHIP FOR PR OGRESS 14  GHANA AND Till: WORLD BAN K 2002 AGRICULTURE AND RURAL DEVELOPMENT n the past, the Bank has provided strong support to Agricultural Development Il1 promoting increased I thc Government in formulating its agricultural developmcnt strategy. The medium term agricultural production and processi ng of roots and tuber crops that form more than 65% of agricultural output In Ghana. development strategy formulated in 1990 guided the This will undoubtedly sup port the President's Special rehabilitation of Ghana's shattered agriculture sector. Initiative of boosting the production and processing llf The Accelerated Agricultural Development and Growth cassava. Two projects are in the pipeline, name ly the Strategy (AAGDS) is expected to underpin the Savanna Biodivcrsity Conservation Project for G EF Government's efforts in the scctor in the first decadc of funding and the Land Administration Project. The latter the new millennium. The Bank 's financial assistance to is aimed at reforming the administration of land. whose thc sector was channeled through projects aimcd at access has becoIne a major bottleneck in economic increasing the flow of technical and financial resources development. for rural development and infrastructure; through policy and institutional reforms; through investmcnts in Achievements and Challenges production, processing and marketing and through capacity building in both the publiC; and private sectors. There has been good progress over the past couple of years as is evident from the substantial and sustained The Government of Ghana aspircs to achieve sustainable resurgence of foo d crop pr duction by Ghana's two socio-economie developmcnt by becoming a leading million smallholder farmers. Food production kept well agribusincss and industrial country in Africa and ahead of populatio n gro wth, during 1994-97, with eradicate poverty by 2020. It is crucial that major positive effects on rural and overall ineomc, nutritio n advances are made in developing the agriculture sector and poverty levels. T he performance of traditiona l that dominates thc economy, contributing about 40% to export and industrial crops was less positivc, while non­ the GDP and employing more than 60% of the labor traditional agriculmral exports have shown remarka ble force, mostly women. Reco gnizing that growth in growth, especially Em its and vegetables. Between 1991 agriculture would have to nearl y. double from the current and 1997 the export of pineapples incrcascdby over rate of3% p.a. to 6% p.a., the Government has fonnulated 200%. Cassava output has quadrupled, and maize bas the AAGDS that emphasizes creating an enabling tripled. Cocoa prod uction rose at an average rate of environment for and partnership with the private sector. 4.3% from 160,000 tons in 1983 to over 400,000 t ns in 1998. Livestock and fisheries, however, ha ve The strategy has five kcy elements, namely: (i) remained stagnant. Promotion of selected commodities through improvcd access to markets, (ii) Development of and improvcd Past developmen t interventions in the sector have access to technology for sustainable agricultural concentrated on the supply side (increasing production) production and natural resources management, (iii) to the neglect of the demand sidc of dcveloping the Development of rural infrastructure, (iv) Improvement market for agricultural commodities and forest produ:: ts. of access to agricultural financial services, (v) Future interventi n,; would have to take a hoii st ic Enhancement of human resources and strcngthening of approach along the enti re spectrum of the foo d institutional capacity in both the public and privatc production distribution and consumption chain, sectors, particularly farmcr-based organizations. including input procurement and distribution; on-farm production technologies and management; on and off­ Current Activities farm storage; transportation; processing an d va luc addition; internal and external marketing; and financing Current Bank support focuses on aSSIsting the of all these activities. Among the important challenges Government to implement this strategy as well as those on the supply side are (i) low levels of technology u$ed that translate its forest, environment and land policies by an overwhelming majority of smallholders; (ii) low into programs of action. The Bank is financing six acreage of irrigated land; (iii) declining natural resource projects in the agriculture and natural resources sector, base and accelerated envi ronmental degradation; (iv) with a total valuc of $1 29 million, out of which $8.9 expanding dive rsity of sal eable timber speci es and million is the Global E nvironment Facluty (GE F) quality of export product; and (v) difficulties in land support to forest biodiversity conservation. The Bank tenure, all of which are exacerbated by the high costs is collaborating w ith the International Fund for of off-fann inputs an d/or crcdit. A PAln~ERSHIP FOR PROGRES 15  GHANA AND THE WORLD BANK 2002 High-yield cassava is to receive support under the President s Specta/ Initiative Appropriate conservation of Ghana s stock offish guarantees employment for these industrious women A PARTNERSHIP FOR PROGRESS 16  GHANA AND THE WORLD BANK 2002 E DU CATION ducation in Ghana during the 19:50s and (,Os \\';IS expanding enrollments and improving quality at all E one of the best in Sub-Saharan Al"rica. It included a policy of providing fj'ee primary and Illiddk education levels . It provided a more practical curriculum with :lIso a focus on education. It reduced the 17 year to all. Access to education and literacy increased ,IS a primary/ middle/seco ndary st ru cture to a 12 year basic/ result of this POliCY, The economic decline of tile 1970s seconda ry onc, while lengthening the tertiary cycle and 1980s led to the reversal of many of these g:lins (from 3 to 4 years). In 1997, the Government began and caused a statc of crisis 111 the education systeill. implementing the free Compulsory Universa l Basic Insufficient funds lcd to a dcmotivatlOll of teachers, Education program (ITU13E), aimed at providing 9 coupled with physical infrastructure and educ,lliolwl ye,ns of quality b:1Sic education to all Ghanaians. Its materials , which led to a decline in learning outcoilles. overall objective was to ensure that all pupils arc equipped to becomc full stakeholders in, and Two major reforms in 1987 and 1997 were initi:llcd to belldici~ries of, dcvc:lopmcnl. reverse th e c ri sis . The reform 01" 1') 1;7 <1111h:d ,ll 2000/2001 Enrolment Data (Public and Private) Total Of which Females Publ ic share (%) Pre -school 647,126 319,817 67% -- Primary 2,446,417 1,446,417 SJ% Junior Secondary 803 ,877 367,055 87 % Secondary" 193,950 84.410 97% IT** 17,25'11, 75% TTC** 21,4 10 100% Polvtc " nics** r-:-::--=--.. 15,078 --. ­ 100% U n ivc ._ , dles*'" " ,'36,4 12 .- 94> % Somee: MOE National [ducat ion Data and Indi cators, [MIS October 17,200 I (*only public school enrollmcnt '*these <lIT 199912000 cnrolllllcnt) Cur rent Activities Basic Education The BES IP su pport s tile rCUBE through intervcntions to US$ 29 .3 Sector Improvemcnt improve teaching quality and learning outcomes. selectively million Project US$ 50 increase 'lecess. ~lIld strengthen m:lnageillent el'iicicncy of the di sburscd as of million) Ministry or Education and the GES at central ,lml i<:x:allevels. January 2, 2002 National Functional The NFLP suppOJ'ls the second ph:Lse or the Go\'ernlllcnt's USD $1.6 Literacy P roject progralll to rcduce illiteracy in Ghan,l. The Program aims to mil Iion (NFLP, US$ 32 provide liter:lcy ,1Ild runctional skills to I million learnel's (with disbursed as or million) a Illajority or \\,olllen) over a period o r 5 ye'lrs. January 2. 2002 An educat ional secto r rC\'iew is L1ndcl'\vay which \\lIlle:ld to the prcpat'atlOn ofa sector·wide program to be supported by devclopmcnt partncrs. Achievements and Cballenges at all \evels, wcaknesses in the management of the sySI III (particularly human resources management) at alllevcIs Significant achievements have bcelllll :ltk illlhc sectol': inhibiting regul,lJ' service delivery, inadequacy of the improved textbook/pupil ratio for core basic tcxtbooks, planning and logistics functions; at the tert iary educat ion incremental funding for pre-ter ti :lI'y education level, expanding enrollments and shrinking per stud ~n t (lI1c1uding for external sou rces), and cx p:lI1sion of resources for the syste m , placing the qu:.d ity and private tertiary institutions. However, the scctOI' at large sust3 inability of this system at risk. With regard to the s till faces enormous challenges , amongst which: portfolio of Bank-financed projects, the NLfP su ffers stagnat ion ofaecess at pre-tertiary le vels (espccially for from vcry lo w disbursements (currently the girls and intake into P I for public schoo ls has becn disbursement lag rate is at 82%); A request has been dropping since 1998/1999), decline in terms of quality recei ved from the MOE to restructure the project. A PARTNERSHIP fOR PROGRESS 17  GHANA AND THE WORLD BANK 2002 HEALTH T he general health indicators of the Ghanaian population have shown some improvements over the last decade. For instance, infant and under five to more strongly fight the HIVIAIDS epidemi c, to further reduce inequ alities in health and to build stronger links with the private sector. The Bank also provided mortality have been reduced by about 20%. However, regular technical as, is tance in the field of financ ial one cannot be satisfied with the present situation and in management and procurement. The current IDA credit particular with the very large inequalities in health and (HSPSP 1) will be fully d isbursed before its closing access to health services that exist across geographical date in June 2002. Therefore, the Bank is preparing a areas and socio-economic groups. Moreover, i) without follow-on prog ram to H SPSPI to support the intensified actions to reduce its spread, the HI V/AIDS implementation MOH's 5 Year Program of Work. Both epidemic could seriously undermine, if not reverse, the amount of the next IDA are still under discussion. progress made in the past years and ii) in parallel with However, the World Bank 's financial contribution ro Ghana 's modemization, new public health issues - such the Sector Program is likely to be significantly as diabetes, cardiac and vascular diseases and road traffic increased, but will remain within the absoI'ptive capacity accidents -are on a rapid increase. of MOH. In addition, the B ank intends to increase its support for act iv ities re la ting to HIV/AID S. rhe Since 1998, each annual Program of Work adopted by reduction of inequalities in health, health financing the development partners has fa nned the single overall including insu ra nce and prepayment schem es , plan funded jointly from Government funds , intemally partnerships with the private sector and procurement. generated funds and external partners. The strategic directions and expenditure envelope being re vi cd according to the conclusions of regular meetings with Ghana Health Se ctor Program. stakeholders. Reviews of the sector perfonnance and Donor funds poole d into the Health Account external independent financial management and ( in US$) procurement audits have been carried out annually. The adoption nf common management arrangements have contrib ~te d to building up the Ministry of H ealth's . (MOH ) management capacity and facilitated the decentral ization process. As a results of these achievements in management and accountability, and in a movement towards (single govenunent systems and) hannonized procedures, a group of donors decided to increas ingly pool their financial reso urces into a common Health Account (with Government of Ghana funds incl uded) managed by the M inistry of Health. In total since the inception of the 5 Year Program about 1998 1999 2000 2001 US$ 68 million have been pooled out of which $4 million were di sbursed in 200 I alone. Achievements and CbaUeoges Current Activities In spite of limited and stagnant financial resources (th e Through th H aIth Sector Program Support Project total public expenditure on health is at about US$ 7 P r (HSPSPI) signed in Apri l 1998, the World Bank has capita) and a number of other serious constraints (as for largely contributed. to the definition and implementation instance the major brain drain problem), substantial of the Sector Wide Approach for Health Development progress has been made in improving access to care and in support of the Government's strategy and five year health service delivery as well as in improving fina ncial Progran1 of Work. Between 1998 and end 200 I, the management and procurem ent both at central and World Bank contributed more than US$ 30 million to decentralized levels. There are dear indications that the the health sector. While implementing the H SPSPI, the Medium Tenn Health Strategy and the Five Year Progran1 World Bank has contributed to the dialogue on the health of Work that have guided health development in Ghana policy and strategies, insisting particiJlarly on the needs since 1997 have largely contributed to this progress. A PARTNERSHIP FOR PROGRESS 18  GI-IA NA A,\1l TilE \vOlli.!) J3A1\K 2002 of HIVI AIDS and to reduce its impact on those already Ghana Health Sector Program infected. The project will support the fo li ow ing Contributions to the Pooled Health actiVities: i) prcvcntion and care by financ in g Account (1997-2001) governmental and civil society entities to provi de a broad spectrum of preventive and care acti\'ities at national, regional and local levels, ii) capacity builcLng by supporting training and providing te chn ic a l NDFBJ DFID 1%3% assistance to public as well as private institutions and, World bank iii) knowlcdge management. The implementa tion 27'% 44% agency will be thc Ghana AIDS Commission. NL % 16 9% RIV/AIDS / There is no doubt that m VIAIDS constitutes a major development issue both at present and for the ncxt decades. It is estimated that about 3% of the adult population of Ghana and at least 400,000 Ghanaians are already living with lilV and that in 2000, about 40,000 Ghanaians mostly young adults, activc and in charge of children have died from ALDS. In spite of past and currcnt efforts, the HIV/AIDS tl'.f::at of the epidemic is getting bigger and at currcnt- ratcs of infection, there could be more than a million pcrsons . infcctcd by 2005. Meanwhile, the general response and Challenges efforts to tackle this menacc, though improving. are still In the CUITcnt situation, the most impOitant challenge largely insufficient. Given the complex nature of HIV I seems to be how to mobilize civil society organizations AIDS, the strategy to deal with it needs to be broad­ and thc co mmunities and to assist them in the based , involving all relevant levels and sectors of development of preventive activitie~ as well as home government and society, be rapid and flexible and well based care and social support for persons living with balanced between prevention, carc to those inti eted and HIV/AID . MOH efforts t6 pTcvent new infectio , in mitigation of impact on familics and the economy. particular mo th r to child transmissio n, develo p CllI'rent Activities voluntary tcsting and counseling and improve care and treatment of persons infected need to be encouraged The Ghana AIDS Responsc Project (GARFUND): This and supported as well. The Ghana Aid Commission cr dit has just been signed between the Govcrnment of . needs to set up a formidable outreach mechanism to Ghana and the Bank and will become effective as SOon attack this menace :lcad 011, and the Bank is will ing and as the key staff in the Ghana AIDS Commission have rcady to provide any support needed by the Government becn appointed. T he US$25 miliion project will support of Ghana in thi s fi ght. over a 4-year period non-MOH mandated activities of the Government's strategic framework for AIDS. Indeed considerableeftorts and financial resources must Districts will also be mobilized to playa key role in the be put, by all, into curbing the epidemic to prevent the fight against HIVI AIDS . GARFUND aim s to intensify social and development crisis that is affecting O I11 C and diversify activities designed to combat the spread other African countries. Stop A Love Life ,\ PARTN ERSHIP FOR PROGR _ss 19  GHANA AND THE WORLD BAJ'\IK 2002 .1 PUBLIC SECTOR M ANAGEMENT T he Go vernment of Ghana over the past decade has set forth an agenda to reduce poverty through macroeco nomic sta bi lity an d accelerated economic others, and an in effic ient organizational and management structures. The consequence is th a t performance and m o tivation are poor, res ulting in growth. The new government that took office in January unsatisfactory quantity and quality of service deliv ry. 200 I has declared a golden age ofbusiness. Achievement of these obj ectives requires an effective and efficient A Public Expenditure Re view (PER) undertaken by the publi c sector, which is capable of designing and Government of Ghana in 1993 highlighted the following implementing consistent polices and creates an enabling problems in public fi nancial management: weak budge t environment for private sector-led development. preparation, the lac k o f uniform and ade q uate accounting ·system, weak expenditure monito ring and The public sector in Ghana is faced with many problems. control mechanisms, and the lack of owners, h ip and The main problems and weaknesses are explained by accountability by the M inistries, Departments and deficiencies in (i) critical processes, e.g. policy design, Agencies (MDAs). Weaknesses also remain in other areas coordination and implementation, (ii) core systems, e.g. of public financial management: inadequate capacity for the rules go verning the use of human and financial both internal and ex.ternal audit, resulting in what is now resources, and (iii) structures, e.g. unclear mandates, popularly know as the "Ghost names" (i.e. salaries being responsibilities and opera tional objectives of p ublic paid to none existing employees), low revenue collection, sector institutions. These problems were exacerbated incomplete and untimely information on the cash assets by a wage structure whic h has created a lack of skilled of the Governme nt, poor aid and debt management, lack staff in critical areas and an oversized establishment in of a national procurement code. Current Activities Pr oject Credit Amount o isburscrn 2 11 t as at (US $rnillion) Jail. Ie ~! J02 Public Sector Management Reform I'rojeet(phase I) 14.3 7.6 33 Public Finane ial Management Reform Program 20 .949 7 ..'; 77 Training workshop under the National Institutional Renewal Programme A PAR tN ERS HIP FOR PROGRESS 20  GHANA AN D THE WORLD BAN K 2002 PUBLIC SECTOR MANAGEMENT to support the establishment and the operations of an REFORM PROJECT - (PS MRP) autonomous Distance Learning Center for a period of about three (3) years. The OLe, which is part of the In 1994, the Government created the National Global Development L earning Network (GDLN) is Institutional Renewal Program (NIRP) in order to focus providing training for professionals from the public and and give strategic direction to the many reform activities the private sector through a video link to professional taking place within the public sector. In October 1997, training institutions from all '" ver the world via modem the government issued the "Public Sector Re-invention communication technology. The establishment of the and Modernization Strategy for Ghana: Transforming DLC is a ref1ection of the role the Bank is playing as a Vision into Reality" (PUSERMOS). In this strategic Knowledge Bank by providing the platform to build local document, the gov e rnment committed itself to capacity, share learning and knowledge and develop a reforming the public sector in general and in particular global community dedicated to fighting poverty. review and refOlw public sector institutions in terms of their mandate, approach and scope of activities. The document provided a framework for integrating, sequencing and monitoring the retorms in the public sector. PSMRP is supported by Adaptable Program Loan to be implemented in three phases during an eleven year period. It has three components: (i) restructuring the central management agencies of government, (ii) the restructuring of subvented agencies that are funded from public subsidies and (iii) Improvement of systems and processes. The main objectives of the PSMRP are redefining the rules and functions of the state, (b) detining :<ippro.ptiateinstitutions and systems to implement the role, and (c) rationalizing the existing structures and systems to meet the design. The development objective Ghana has the potel/tial to become an ICT of this project is to improve the efficiency, effectiveness and knowledge gateway in West Africa and quality of public services in Ghana. Distance Learning Center (DLC) Under a Memorandum of Understanding between the Achievements and ChaUenges World Bank and the Government of Ghana, US $1 .5 million of the public sector reform credit has being used Studies for the restructuring of five (5) Central Management Agencies (MOF, NDPC, PSC, ORCS, SEC) have been completed and are awaiting implementation, while studies for the restructuring of forty five (45) Subvented Agencies have been completed. Six of the agencies have been closed, while implementation of the restructuring plans have started in benefiCiary agencies including Ghana Institute of Management and Public Administration, Ghana Regio nal Appropriate Technology I nd us trial School an d the Ghan a Universities Press. The DLC is in full operation and is delivering a wide range of courses to both the public and private ·ector. Signific ant d elay s in impl ementing appro ve d restructuri ng plans as a result of which the restructuring Training Session at the Global Distance plans for MOF, NOPC and SEC have been awaiting Learning Center at G/AIPA implementation for more than 18 months. Restructuring plans for a number subvented agencies requ ire a A PARThERSrUP FOR PR lliRESS 21 - - - ---- - ------  GHANA AND THE WORLD BANK 2002 significant number of policy decisions to improve the for the provision of Wide Area Network (WAN), which operations of the targeted agencies. It is hoped that is yet to be finalized, needs to be expedited in other to government will take priority action to expedite the boost, without further delay, the information system for restructuring process. The alternative employment effective and efficient economic management. :rhe machin ry which has been agreed upon should be fully Bank is currently supporting the Government to prepare operational to take care of possible retrenchments that the phase II of PSMRP and PUFMARP II. wi ll occur in 2002. Support for Anti-Corruption Initiatives PUBLIC FINANC IAL MANAGEMENT REFORM PROGRAM (pUFMARP) In addition to projects foc using on public sector reform. the World Bank also supports a range of activities that The Bank is providing credit and technical assistance promote good governance. With the financial and to implement the public fi nancial management system technical support from the World Bank and other donors, called the P ublic Financial Management Reform a coalition of stakeholders have formed the Ghana Anti­ Program (pUFMARP). Thi program seeks to develop Corruption Coalition (GACC). The institutions that are a n integra ted financi al ma nag e ment system in currently represented include CHRAJ, SFO, Ghana government in order to enhance efficiency, transparency Integrity Initi a tiv e , Center for Democracy and and accountability. A major component of PUFMARP Development, Institute for Economic Affairs, National is the Budget and Public Expenditure Management Institutional Renewal Program, Ghana Journalists System (BPEMS) . It supports the preparation of the Association, Private Enterprise Foundation. T he budget in accordance with the priorities of GoG and Coalition has: (i) Conducted and published a survey of provides for the effective control and monitoring of perceptions on corruption and public sector performance government expenditure. It pennits the classification, by households, business, and public officials, and recording and. llWalysis of fmancial transactions in a complete.. I .n analysis that identifies public in~tituti ons timely and standardized manner. with rampant corruption and highlights the institutional weaknesses underlying this phenomenon . This anti­ Acbieve~ents and Cballenges ('o.·--" ption survey was conducted with assistancl: frOll' .~ Bank and other d no rs , (ii) developed Software development for the Budget and Public comprehensive action plan on how to address the issue Expenditure Management System (BPEM ) is almost of corruption. This action plan is widely endorsed by complete by Oracle. A comprehensive training strategy the donor community and (iii) undertaken initiatives on Oracle technology ane! modules has been developed that promote tra nsparency and accountability. In ane! preparation s towards User Acceptance Testing are particular, the GACC has embarked on a general underway. An approved Chart of Accounts is being publicity campaign to educate the public on the effects introduced to the national budgeting and accounting of corruption and the need to combat it by all. Tbe system as part of the Oracl e configuration and GACC led by the Institute of Economic Affairs (lEA), customization process. A draft IT Strategy document the GIl and CHRAJ is canvassing for the promulgation has been prepared through the BPEMS consultancy of a Freedom of Information Bill. The GACC also, led engagement while sites in Accra and the regions are by the SFO is sponsoring a Whistle Blowers Bill. The being developed for the deployment of hardware. Government ofGbana through the Attorney-General has Work on two important components of the project: Data agreed to sponsor the Bill fr m drafting to promulgation Center (currently only 60% complete) and the contract in Parliament. A PARTNERSHIP FOR PROGRESS 22  GHAN A AND THE WORLD BANK 2002 WAT E R A D SANITATION n order to improve service delivery, basic coverage restructure the sub-sector to introduce greater efficiency I and ensure sustainability of investments in the Water Sector, the Government of Ghana with the assistance and make it more re 'pon 'ive to the needs ofconsumers. The Bank is eOl1.sid r ing to provide $100 million under of the World Bank and other development partners has an Urban Water Restruc turing Project to support in the past few years embarked on a restructuring of thc increased private sector participation in delivery of entire water sector. Significant developments include urban water supplies . It is anticipated that two operating the separation of the management of rural water delivery leases will be awarded to private operators for periods from urban water, the establislunent of the Community / up to 10 years in a bi to improve aceessibi lity of water Water and Sanitation Agency (Act 564, 1998), an and quality of service to consu mers at an efficient price. autonomous body mandated to facilitate the provision The leases which are still being developed will embody of safe water and relatcd sanitation services to village provisions such as lifeline tari ffs and social connections communitie and small towns and the establishment of to protect poor consumers. two other important statutory bodies viz. the Water Resources Commission (Act 522, 1-996) and thc Public Utilities Regulatory Commission (Act 538 of 1997). Urban sanitation remains a formidable challenge for Municipalities. Solid Waste collection and disposal, cost accounting for services, treatment of liquid waste, domestic sanitation, storm drainage, public education and weak enforcement are some of the issu es confronting most cities today, resulting in deplolable living conditions for the urban poor. Current Activities Rural "Vater Supply: In Ghana, less than 40% of the rural population have access to safe water and less than 11 % have ad equate sanitation. The National Community Wat r and Sanitation Program (NCWSP) Affordable water/or all is the goal 0/ all was launched in 1994 as part of the overall sector restructuring to extend the coverage ofsustainable rural water and sanitation faeili tie to 85% of the rural Urban Sanita tion: The World Bank in 1996 approved population by the ycar 2009. a credit of $78 million towards the cost of the Ur an Environmental Sanitation Project (UESP). The proj ct The World Bank has been supporting the Government is meant to improve drainage, sanitation, and solid waste ofGhana to ac hieve the 85% coverage target of the sub­ services in five of Ghana 's major cities, especially for sector by providing more than a $ 100 million in funding lower-i.ncome people and enhance the capacity of the for the sub-sector. In 1994, $25 million was provided metropolitan and munic ipa l assemblies to manage for the implementation of the First Community Water environmental sanitation serv ices. and Sa nitation proj e ct (CWSP I), a full scale demonstration ofthe national strategy. In 2000, a furthcr Acbievements and Cballenges $80 miJlion was approved for the implementation of the Second Community Water and Sanitation project By close of 1999, 1288 new water points and 29 piped (CWSP2), a I O-year Adaptable Program Loan. water schemes serving 480,000 people had been provided under the First Community Water and Sanitation Project. Urban Water Supply: Urban water supply coverage Seventy school latrines and 6,000 househoLd latrines is currently estimated at 62% and the level of non­ serving more than 36,000 people were also bui lt. revenue water system-wide is 52%. The World Bank Presently, over 30 District Assemblies and 600 rural is currently assisting the Go vernment of Ghana to communities in 4 regions are participating in the Second A PARTNERSHIP FOR PROGRESS 23  GHANA AND THE WORLD BANK 2002 Community Water and Sanitation Project. District Community Water and Sanitation Agency as facilitators. Assemblies have prepared water and sanitation plans as Increased sector investment by District Assemblies and part of their overall District development plans and have central Government would contribute immense ly success fully engaged the private sector and NGOs to towards achieving greater coverage of water supply and work with over 600 communities to prepare them for sanitation. Improved donor coordination and a their subprojects. These Assemblies have received over departure from projects-based approach to a sector $150,000 in equipment and logistics support. program managed by Government is vital for ensuring achievement of sector objectives. Under the UESP, infrastructure in 7 low-income communities in 3 cities have been upgraded and the Among the key challenges that are being addressed in major storm drain in Accra, the Odaw is being the restructuring of the urban water sector are the impact constructed. Over 5,000 household toilets and hundreds of investmen t levels on tariffs, protection of poor of school toilets have been provided. The construction consumers, regulation by PURC, public education on of sanitary landfills and septage treatment facilities for the water sector refoans, and re-organization of the solid and iiquid waste disposal in Tamale, Kumasi and public water utility to assume its new role in the context Sekondi-Takoradi will begin shortly. of increased private sector participation. Building and maintaining adequate capacity at the While some progress has been made to improve the Districts to plan and implement projects in the rural operation and maintenance for urban sanita tion, water sector remains a key challenge. So far though, particularly for solid waste coHection and drainage, Districts appear to a large extent to have internalized better arrangements for the man:J.gement and fi nancing their role as imp lement<;>rs of the project and the of these services by the municipalities are still needed The construction oJthe Odaw River drainage is intended to reduce th e impact ojfloods A PARTNERSHIP FOR PROGRESS 24  GHANA AND THE WORLD BANK 2002 LOCAL GOVERNMENT AND URBAN DEVELOPMENT omparative country data show that economic Weak municipal institutions are unable to provide C development and urban growth are closely linked, that per capita incomes are consistently higher in urban adequate services, asSlll'e the sustainability of services and investments, or mo b ilize funds for adequate areas, and that urbanization increases with economic operation and m a intena nce, let alone capi tal growth more rapidly at lower income levels than at investments. The Local G vem ment Act 462 (1993) higher ones. Inadequate infrastructure services and initiated a shift in the structure of governmenta l weak District Assembly (DA) institutions hamper the authority whereby central government devolved to ability of the Government to fulfil economic and social District Assemb lies the responsibility for pol icy functio ns . Im proving the coverage of urban formulation, planning, and implementation with respect infrastructure and services requires not only investment, to, among other things: community development, town but also major efforts to build institutional capacity i~ planning, public wor ks, town roads and streets, markets, the fi elds of planning, management, finance, and sanitation, and lorry parks. operation and maintenance in the District Assemblies. Current Activities IDA's support for urban development in Ghana since the launch of the Economic Recovery Program in 1983 includes severi operations involving over US$300 million. This has helped implement Ghana's decentratization policy, build accountability in service delivery in project areas, bring the private sector into service delivery, and rehabilitate infrastructure in Accra, Kumasi, Sekondi-Takoradi, Tamale, and Tcma. It has also helped establish several public institutions, including the Department of Urban Roads and the Home Finance Company, the performance of which has surpassed expectations, making them models for the sub-region. Three ongoing urban projects assisted by IDA and other donors benefit 34 District Assemblies and total about US$ 166 million. They involve strengthening the capacity of District Assemblies, constructing roads and drainage works, rehabilitating markets anci lorry parks, upgrading low-income communities, COli: ,meting sanitary landfills, and establishing private sector participation in waste management. C nrren t Proj ecls Project Towns IDA, Disbursemt $ mill. $ mill . Local Governmcnt Boigatanga, Bawku. Wa , Sunyani, Techiman, Koforidua, 38.50 35 Devclopment Ho Keta /Anloga , Elmin ,l, Agonn Swcdru and Cape C oast U rban Accra, TCll1Z1 , KUlllasi, Sckondi Takoradi, and Tamale 71.00 48 En vi ronIl1ental Sanitation - Urban V (Phasc I) Agogo, KOllongo Odumasc, Ejura, Mampong, Obuasi , 10.83 0.1 Bcrckull1, Nkoranza , \Vencili, Dunkwa, W inncba, Akim Oda, Akwatia, Asalllankcsc , Begoro, Nkawkaw, Nsawam, SUhUIll , Madina , Savclugu, Vend i, Aflao, Hohoc. Kpandu . Prc s tca and Tarkw<J Future oper ation' : The future operations are (i) the acceleration of reforms in the decentralization process Second phase of the Urban V project ($75million), by implementing the Local Government Service Act at wh ich in volves strengthening and deepening the the district level, build capacity and provide investment capacity building initiatives achieved in the past and funds to District Assemblies to operationalise tb Act, prov idi n g infrastructure for all the 39 District and develop monitori ng and evaluation system to tTack Assemblies listed above, and (ii) the Decentralization progress on d ·centralization. Support Program ($50-100 million): invol ving the A PARTNER SHIP FOR PROGRESS 25  GHANA AND THE WORLD BANK 2002 Achievements and Challenges the policy may require resolution of a number of issues already identified, including (i) the establishment ofsector In addition to instituting policies to ensure increased public services for health and education wi th in the p rivate sector participation and growth to create framework of the proposed Local Government Service employment, the policy related to urban development is Act; (ii) legislation to specify the functions and pow rs closely linked to decentralisation. Under the Local to be exercis d by the M unicipal and District Assemblies G overnment Act, Ghana's metropolitan, municipal and at the various levels of decentra li sation; (i ii) capac ity district assemblies have autonomous local government enhancement of the Sector Ministries; and (iv) effective status with legislative and executive powers within their co-ordination of the implementation of dccentral isation. jurisdictions. Concerning investments, substantial res ources have been allocated to the construction and In order to resolve the sectoral differcnees in approaches reha bilitation of economic infrastructure, which has to instituti o na l re forms with the aim of setting up local resu lted in significant improvements over the last fifteen government s rvi ce. several actions need to be taken, years. Major infrastructure deficiencies however remain . including (i) buil ding consensus on mini steria l restlUcturing; (ii) clarifying institutional set-ups at the T he main challenge re lated to the effective national and D istrict Assembly levels on their roles and implementation of decentra li sation in Ghana is the functional re lationships, and (iii) presenting a revised absence of a phased prog[am of action to guide the Local Governme nt Service Bill to Cabinct and then to process. The role of the Ministry of Local Government Parliament. Finally the systematic transfer o fr sources lnd R ural Development as the national oversight body to District Assemblies should be ensured, commensurate . or decentralisation may have to be redefined. The with the responsibili ties that they have been gi en w ith ectom\. conceptual difD.:rences in the interpretation of de" entralisation. The construclion industry, parlicularly for homes, continues co be one ofthe fil slest growing sectors ill Ghana today A PARTNER SH IP FOR PROGRES S 26  c;r L\N:\ , \ l\ [) Tr IE WORLD Q,\!\K 2002 TRANSPORTATION hana's transport system is well developed and the predominant mo de of transporta t.ion , currently G consists of a road network of about 40,000km , two large deep-water ports, a railway system serving the accounting for 94')10 of freight and 97"10 of all traffic movements in the country. The road network consis ts southern part of G hana, one international airport and of 13,250 km of trunk roads, 24,000 km of feeder roads several regional airports and airstrips. This sector plays and over 2,200 km of urban roads. The road transport a key role in the devciopment of Ghana's ceonomy and industry, which is dominated by the private sector. has the Government of Ghana has been working with its unrestricted entry and competition is prevalent, but its development partners to streng then the ti·ansportation efficiency is constrained by the high cost that poor roads systems and remedy defrciencies in the transport sector. impose on vehicle peration. There are no widely available alternativ s to roads other than for the The transport sector accounts for about 9% of GDP and movement of bulk commodities for export, which are both generates and consumes s ignificant shares or the suited to transport by rail from central collection centers country's total budgetary revenues. Ghana 's two ports and mining areas to the ports. The 944km railway system between them handle an an nual amount of7 million tons has limited covcrage (Accra-Kumasi-Takoradi) and of import and export traffic. T hi · figure will increase serves only the south e rn part of the country, and over the coming years if Ghana is able to capture a largcr excluding the largest port of Tema. It is presently share of shipment to and from landlocked countries, operating at low efficiency, and options tor concessioning particularly Mali , Burkina Faso, and Niger. Roads are the infrm;tructure and operations.are under consideration. Cu r rent Acti "ties J ( Programs Disbursement Status r Road Sector De velopment P mgram ($220 0% (project not yet effe ctive) I million) . Achievements and Challenges accruing to the Road Fund do not adequately meet the maintenance requirements and so there is an urgcnt need The World Bank has provide d as s istance for the for more resources to meet maintenance financc. The rehabilitation and improvement ofGhana's ports, railway, government also needs to look at diversifying the Road highways, urban and feederroads. The focus has been Fund resource base. A second and related issue is the on cost effective investments that generate high economic payment of the arrears: currently about USS;47 million is returns for overall economic growth, for the transport of owed to road contractors. Elimination of this problem is farm produce and on support to poverty rcduction through key to putting the sector on a sound financial footing, transport improvements in poor areas, both urban and and there is a need to keep tbe commitment of repayment. rural. The intervention in the road sector have led to an A third challenge is for the road agencies to develop improvement in the condition of roads countrywide. further their strate gies in conformance with th e Maintenance of the network is supported mainly through Government' s overa ll strategy and proces s of the Road Fund. The Road Fund is one of the successes decentralization. For the Department of Feeder Roads of the sector. Its secretariat has been supported by the this will entail a transformation of its relatively centralized Bank and the management of the fund itsclfis governed structure and operation to mntch the decentralized local by a private-public board. The Ghana Ports and Harbours government stmcture and fmancing, while the Department Authority is being assisted under the Gateway project to of Urban Roads continues to devolve its planning and revise their legal framework and to improve the efficiency operations to the municipalities and towns. ' of port operations.by the transfer of key functions to the private sector. The .e xcellent dcvelopment partner With respect to the po rts , it is'·hoped that the coordination contributes to the success of the Government's dec ision to introduce' the " landlord" act programmatic approach used in the road sector. will allow private sector management of the ports and help implement refo rms to reduce the turnaround time In the road sector, a key issue that still needs to be of containers at the harbor from the current 23 days to 7 addressed is road maintenance funding and management. days an.d lower handling costs . Reforms in the airline There is a need for the government to define clearly its industry should help to enhance Ghana's role as a hub maintenance needs and then to address these needs prior in West Africa, encouraged by the recent increase in to any further expansion of the network. Revenues the number of flights of maj r airlines into Accra. A PARTNERSH IP fOR PROGRES S 27  GHANA AND 11fE WORLD BANK 2002 Th e roads sN;tnris currently Ghana s biggest recipient of World Balik as,c ' ~Iallce II Re-collStructed Tema Station now serves as an important nodal point for Accra, the capital of Ghalla A PARTNERSHIP FOR PROGRESS 28  GHANA AND THE WORLD BANK 2001 PRIVATE SECTOR DEVELOPME:'IIT W ith the Government's unequivocal stance in favor of private sector development, and in line with its desire to create a "golden age for business," it has helping to upgrade the facilitation capacity of the front-linc administrati v agencies, including Customs, Ports and Ha rbor Authority, Ci vil implemented a variety of initiatives designed to improve AviationAuthority, lmmigration Service, the Ghana the investment climate , including tighteniIlg tiscal Investment Promotion Center and the Ghana Free discipline to restore price stability, raising the standards Zone Board. S condo it provides funding for the of govemance and transparency ('"zero tolerance" for off-site infrastructure de e lopment ofa new export corruption), undertaking financial and managcment processing zone near the Tema Port. The project audits of major public sector enterprises, restarting is scheduled to close in December 2004 and as divestiture efforts and establishing a new Ministry of of December 200 I has en undisbursed balance of Private Sector Development. [t is alsoready to launch US$ 3R.0 million. by early Maya high-levellnvcstment AdvisolY Council designed to draw on the strategic and managerial Public Enterprise and Privatization Technical expertise of top international and local business leaders Assistance Project, Afte r a major restructuring to improve G hana's competitivenoss. concluded in January 2000, the project has provided tcchnical assistance and support in three areas. First, Reflecting this pro-business stance, the Ghana Poverty it helps the overnment procure the neces ary Reduction Strategy (GP R ), envisages a significantly technical and investment banking services for the larger role for the private sector, particularly in generating divestiture program. Second, it provides funding growth in agriculture and the rural economy. The public tor capacity building acti vities among the regulatory sector would be more engaged in support and facilitation, agencies including the Public Utility RegulatOlY rather than commercial production, as well as a more Commission, the Energy Commission, the National extensive decentralization of fiscal responsibility and Communication Authority and the Ghana Standards services from the national government to local and district Board . Third , it s upports the Governme n t's authorities. A key strategy is to make usc of Ghana 's comp,ehef1sive legal reform program with a focus comparative advantage - what it has in abundance, on improving the quality and timeliness ofjudicial primarily labor, land and natural resources - to produce services. The project is scheduled to close in June goods and services for the world markets. To carry out 2003 and currently has an undisbursed balance of this strategy, the Govemment is devoting more resources US$ 10.6 million. for upgrading rural human resources and infrastructure, including rural road networks, small-scale irrigation and Achievements and ChaUenges assisting small scale enterprises in training, marketing The Government of G hana has made a commendable and providing logistics services. The Government has start, particularly in upgrading the quality of governance also re-affirmed its commitment to the Ghana Gateway and restoring economic stability. Maintaining th e Initiative, a trade and investment facilitation program momentum in th se crucial areas will be essential for designed and launched in the mid-1990s to attract export­ building the confidence of foreign investors an d oriented foreign direct investment. Ghanaians abroad, most of whom still bold a "wait-and­ Current Activities " .. see" attirude. Upgrading the quality of infrastructure, tinancial and administrative setvices is on the agenda (as The World Bank supports the private sector in Ghana indicated in the draft GPRS ), but decisive actions rema in through a variety ofactivities, including economic sector to be seen. Of particular importarice is a significant work structural adjustment operations, investment improvemcnt in the quality of port, customs and telecom projects, as well as through the services of the lFC and scrviccs. A Icgal framework for ensuring market-based MIGA. C urrently, two active projects have been competition - including competition or anti-trust laws and specifically designed to the promote private sector lowcr trade barriers - would curtail the high costs and development, (a mining sector development project was low quality of many services now provided by entrenched closed in December, 200 I) : incumbents, both private and public. Effe ctive decentralization of fiscal responsibility, coupled with Ghana Trade and Investment Gateway Project. increased private provision of essential social and This project, which supports the Govemment's infrastructure services, is crucial for poverty reduction in initiatives to promote exports and attract foreign remote rural communities. direct investment, has two components. First, it is A PARTNERSHIP FOR PROGRESS 29  GH;\'\A AND TH E WO RLD BAN K 2002 FINANCIAL SECTOR G hana's Financial Sector consists of 17 commercial banks, 115 rural ban ks, 39 NBh s, 16 lI1surance companies, one social insurance fund (SSNIT) and 14 system assets. How vcr the social security fund remains one of the largest financial institutions overall with cedi 1.6 tin or 14% per cent ofGDP and is the only signi ficant stock brokers. The sector is relatively small with total source of long-term investment funds in the co u.ntry. assets, excluding Bank of Ghana, of cedi 10.8 tIn as of Government owned fi nanci al institutions incl udi ng December 1999 or 52% of GDP. It has enjoyed a real GCB , ADB, SIC and Ghana Re, while still retaining growth rate of 13 per cent per annum since 1995.The significant levels of business, have seen their mark t sector is dominated by the commercial banking system shares decline over the last few years. which represents approximately 70% of total financial Current Activities Programs Status Non::}3ank Financ ial Institutions Project Closes June 2002 Public Enterprise Privati zation Technical Ass istance Closes June 2003 Achievements and Challenges To support eco no mic de velopment in Ghana, the financial sector still needs to impro ve access to its The Wo rld Ba nk's support for Financia l Sector services so that as many Ghanaians as possible can Development in Ghana has been aimed at improving function effectively in the market economy, contribute efficiency, soundness and access to financial services, thei: ,'esources to the national economy through their mainly through project support - NBFI, PEPTA, the Rural :·a vings, and obtain resources from the financial sector Finanfial Services Project and ERSO III - but also through ,:: hen they have viable investmcnt opportunities. T' h a joint World BanklI MF Fina ncial Sector Assessment World Bank , along with other donors , is facili tating carried out in 2000 The Bank is supporting investments effOlis in this regard by supporting the de velopment of in development of the National Payments System, and payments systems and supervision efforts through the divestiture of financial parastatals thereby improving NBFI project, and the enhancement of the rural banking competition in the sector and reducing the role of systems and the micro finance sector with the Rural Government in private resource allocation decisions. Financial Services Project. With support from the World Bank, Ghana ha s made cons iderable progress in moving towards a modem framework of prude nti al regulation for its financial sector wh ich covers ban ks , non-bank fin a ncial institutions, insurance and capital markets. The Bank, through the NBF I proj ec t, is c urrently support ing cap acity build ing for e ffe c tiv e regulation and su perv is ion by the B a nk of G hana, the National Insurance Commission and the Securities Commis sion and ha s in iti a ted a s yst e m o f m onitoring the effectiveness of supervision efforts. Several bills are currently being presented to Parliament which should sub stantiall y strengthen the regul atory fra mework within which financial insti tutions operate in Ghana. The NBFI and PEPTA proj ects may also be used to support reform of the pens ion system and restructuring TheJast growing Home Finance Company (HFC) of SSNIT. makes it possible Jor many Ghanaians to own homes A PARTN ERS HlP FO R PROGRESS 30  GHANA ,\:\D rm: IVORLD llA:-IK 2002 ENERGY SECTOR pmts of the country. The project provides assistance to G hana has depended primarily on hydro gcncration of electricity from the Volta Lake since independence. More recently G hana has entered into the Volta River Authority (VRA) to develop an additional therma l generating capacity of 330 MW to power sharing agreements with its neighbors to augment supplemcnt electric ity demand in Ghana. this supply. However, the acute elcctricity shortage of 1998 whcn the water level of the Volta Lake was low, Achievements and Challenges has created a situation wh e re additional power generation was necessary to supply the increasing Access to electricity is estimated at about 35 % of the energy demands of the economy. population, which is among the highest in Sub-Saharan Africa, although substantially below the 100'Vo targ t The World Bank has been closely involved in the by year 2020. Th is progress has been madc possibl development of Gha.na's power sector, with eight by the recently completed donor supported Nationa l lending operations in the past 30 years. IDA's objective Electrification P rogram (J 990-2000) and the Se lf-Help has been to help remove the power sector as a potential Schemes (SHEP). Some donors, have shown interest constraint to economic dcvelopment and to assist Ghana in supporting 'overnment e florts to implement a vari ery in developing a well-managed and well-regulated sector, of options for increasing tllral access, including through whose institutions are capable of dclivcring a rcliable distributed small scale renewable energy schemes which . and cconomic supply of electricity. Since 1961, Bank can be operated by communities or the private sec tor. loans to VRA have assisted in the financing of the The focus on increasing access is predicate d on Akosombo and Kpong dams and powcr plants. Recent international experience that suggests that energy is not crcdits have helped VRA rehabilitate its systems and only an enabler [or income and employment growth, ex tend thc transmission grid to northern G hana. but also faciJitatcs the delivery of hea lth servil " ~s , clean Lending to ECG began soon after its formation in 1967 water and education through access to technology. and it assisted with the improvement of ECG' network in the major urban centers. In 2000, the power sector had a total in~lalled capacity of about 1,55 5 MW, comprising 1, 180 MW of hydro The Government of G hana is committed to reforming (1020 MW al Akosombo and 160 MW at Kpong) and the energy sector in order to overcome power shortages. 375 MW ofthe0l1al (330 MW at Takoradi and 45 MW Private scctor participation is being encouraged in the at Tema). After d iscounting thc inoperative capac ity at arca of generation and distribution of electricity, and Akosombo due to ongoing rehabilitation and the o ld also in the supply, transportation and distribution of gas turbine at Tema, the system capability was about natural gas. Two regulatory bodie s have been 1250MW compared to system peak demand of about established to manage the environment for private 1380 MW The capacity and related energy defi cit was participation. Th e Public Utilities R eg ulatory madc up through imports from la Cote d ' Ivoire. Commission (P URC) i. an independent body with rcprcscntation from th e industry and the public at large Although at present the supply deficits can be plugged to sets tariffs. The Energy Commission regulates scctor through imports, there are capacity constraints in the participants to ensures quality of service and transmission an d istribution systems which contribute competition. Ghana's public utilities, the Electricity to the high system losses (about 23%) and to frequent Company of Ghana (E 'G) and the Volta Rivcr Authority blackouts an o r brow nouts . The capacity constra ints (VRA ), have also recently been restmctured to improve in the distributi on systems havc been worsened by their financial and tec hnical performance. decisions to de lay investment pending privatiz, li 11 of the Electricity Company of Ghana (ECG) and VRA's Current Activities Northern Electricity Depaltment. Takoradi Thermal Power Project: Therc is only one It is hoped that th · right policics will be adopted v ithout ongoing operation , the Thermal Power Project ($175 million) which funded til<? first phase of the Takoradi further delay to ensure that both VRA and ECG are able phase one station. There are no other opcrations in the to function e tectively and efficicntly, and t hat the pipeline, but the Bank would be willing to discuss the s upply of e le ctricity to Ghanaians and to the poss ibility of further support to expand aCCess in poorer neighbouring countries is sustained . A PART:-iERSHIP fOR PRO(;R ES ~ 31 _____ ~I  GHA~A AND THE WORLD BANK 2002 MINING SECTOR DEVELOPMENT he mining sector in Ghana includes production of operation which clOSed only in December 200 1: The T . minerals such as gold which is the country's largest foreign exchange earne r; ba uxi te; mangane se; Mining Sector Development and EnvirOllllental Proj ect. The objectives of the Projcct were to (a) enhance the diamonds; salt and sand. Gold mining has a long history capacity of the government institutions to carry out their in Ghana going back many centuries. Since 1900, functions of administrating mineral rights, providing a commercial gold mining has gone through various reliable and modem bas ic geological infonualion cycles with production in creas ing significantly but database, and encouraging and regulating investments erratically. Output peaked in the earl y 1960s at around in an environmentally sound manner; and (b) support one million ounces per year and declined thereafter to the use of techniques and equipment to help improve 277 ,000 ounces in 1983 . Adverse conditions included the productivity and reduce the environmcntal impact overvalued exchange rate s that made exports of small scale miners. uncompetitive, lack of spare parts, and deterioration of infrastructure related to the mining sector. Achieveme nts and Challenges Over the past two decades, Ghana's strategy for the Project achievements include the completion of (i) a mining sector encouraged both local and foreign thorough assessment of the institutional arrangements investment through reduced taxat::)!:' )rivatization of of Ghanaian mining whic h established a clear blueprint state-owned mines, a liberalized productio n and of a forward looki ng instirutional structure for Ghanaian marketing regime with sound environmental standards, mining . This blueprint guided the restructuring cfforts and a market-driven exchange rate. The Government in the latter part of the p roject and should continue to also encouraged the development of small-scale mining serve as a guiding doc um en t for any insti tu tiona l activities, by improving tcchnology and access to modernization undertaking in the fUI.ure (ii) a thorough official marketing channels. assessment of the Ghanaian legal " .lmework, which was amply debated by different grr ;'p" with stakes in mining World Bank Support for Mi ning in Ghana activities in Ghana, incl ud 0 0 i\lGOs , representative of local comm un itie ~ fr ,, ;n mining areas, private Apart from loans to Ashanti Goldfield Company from companies and government agencies. This resulted in !FC, the affiliate of the World Bank which lends directly a draft new mining law and draft mining, fi scal and to private institutions the World Bank has assisted the environmental regu lati ons, which are currently being Government of Ghana w ith four operations that focused reviewed by government for their submiss ion to on de velop ing the mining sector: the (i) Export Parliament. (iii) the completion of aerial geophysical Rehabil itation Project, the (ii) Export Rehabilitation work which proved to be very helpful in attracting Technical Assistance Project, and the (iii) Mining Sector investors to Ghana . Rehabilitation Project and the (iv) Mining Sector Development and En ironmental Project. The first two Challenges for the future include bringing to completion identified mechanisms for the development of the state­ (i) the enactm ent of a modern and comp etitiv e owned mining enterprises and the third project focused lega l-regulatory framework regulating the mining, on the rehabilitation and di v stiture of these mines. The fiscal and env ironmental aspects of the sector; and (ii) emergence ofa very large and growing small scale mining the restructu ring o f the sector along the lines sector, with related social, ewnomic and environmental recommended by thc above referred assessment of issues prompted the preparation of the most recent institutional arrangements . A PARTNERSH IP FOR PROGRESS 32  GlIANA A'<D TH E WORL D BAN K 2002 INFORMATION AND COMMUNICATION TECHNOLOGY I t is widely recognized that, among their many uses, information and communication technology (ICI) and modem infQlm ation management systems can 'increase the effectiveness and efficiency of public sector decision making. These technologies can also facilitate efforts towards publjc sector reform, institution building, increasing the effectiveness ofpublic services delivery, improving governance, and building public and private sector capabilities. Ghana is currently we)) positioned to take advantage nCT and become a regional leader in many areas. To achieve this, Ghana is moving towards establishing the prerequisites of a knowledge society by creating: A regulatory and economic environment that enables the free flow ofknowledge, in vestmeotin Information and Communications Technology (ICT), and encourages entrepreneurship; An educated and skilled population to create, share and use knowledge; An information infrastructure ranging from radio to the internet, primarily through private investment, in order to facilitate the effective communication, dissemination and processing of information; A network of research cel)ters, universities, think tanks, private enterprises and community groups to tap into the growing stock ofglobal knowledge, assimilate and adapt it to local needs, and create new knowledge. The major components of an ICT policy framework will include: Establishing the National Policy Framework 1. Regulations oflCT infrastructure 2. Regulations of trade 3. Regulat'ons of technical standards ..PGlicies for development human capabilities I. Policies for higher education 2. Policies for basic education 3. Policies for development of learning on the job Partnership policies I. National partnership 2. International partnership 3. Partnering with global vendors and suppliers 4. Partnering with multilateral agencies 5. Country Development Gateway 6. Create a National Investment Database System 7. Public-Private Partnerships (PPP) Governance policies I. Intellectual properties 2. Security information 3. Privacy 4. Trade and taxation of electronic and automated information I The B~nk will support the gove~ent of Ghana to provide le~dership t~ proVide guidelines and stan. d~"l I the natIOnal level to d velop and unplement a coherent and umform national rCT program. .. . . ~ A PAR1 ERSHIP FOR PROGKES 33  GHANA AND THE WORLD BANK 2002 PARTNERSHIP WITH OTHERS uring the November 1997 Ninth Consultative last CAS. SAPRl was a powerful experience for both D Group Meeting fo r G hana, a key conclusion was the need to "create a mec han ism for making the civil society a nd the Ba nk and has had a lasti ng institutional impact on civil society. And yet, the, e Consultative Group a regular process of coordination consultations, as indeed can be said of consultation rather than a biennial event. " In order to effect this between Go vernment and the private sector, are recommendation, the M inistry of Finance and the World ad hoc, and issue-oriented. Except in the case of Bank bave created what is commonly referred to in Ghana health and, to some extent roads, neither civil society as the "Mini-CG." This meets quarterly, is co-chaired nor the private sector takes part systematically in the by the Minister of Finance and the Country Director of partner arrangements described above, and this is a the World Bank, and is attended by all major bilateral major area for future attention. The 11 th CG Meeting and m uLtilateral agencies operating in Ghana . will be the most open yet in this regard, and it is Representation on the Ghanaian side depends on the hoped that th is w il l len d an impetus to fu ture agenda items, but always includes the key members of frameworks for consu ltation . the economic team. This "Mini-CG" follows up on key issues raised at the CG itself, briefs participants on recent developments, and addresses partner coordination. One feature in Ghana that bears mentioh is the high level of collaboration between the Bank and the rest of the UN System. In 1998, Ghana had been one of the few countries to participate successfully in the "United Nations De velop m en t Ass istance Framework (UNDAF)," with a final document signed by FAO, IMF, UNHCR, UNIC, UNICEF, UNU, WFP, WHO, UNDP and the World Bank. The UN Country Team for Ghana, which includes the heads of UN agencies in the country, discussed the CDF fully, and views it as a natural extension of tbe UND AF and Common Country Assessment (CCA) exercises, although not replacing Asantehene, Otumfuo Osei Tutu II, officiates the need for such work. The team warmly welcomed the signing of the innovative 'Partnership with the opportunity to apply the principles and approaches Traditional Authorities " Project of the UNDAF to the broader partnership in Ghana. Each group is chaired by the relevant G hanaian agency, The final aspect ofpartnership to mention is the shift to mostly, but not exclusively, Government, and each has programmatic approaches and multi- ·' onor funding: In a nominated "focal support", which role is distributed many sectors, there ex.isted hundreds of donor-financed among different partners accordi ng to their interests and projects, with limited Government leadership or comparative advantage. On the whole this system has ownership. In order to reduce the burden associated served Ghana well, and the new Government rapidly with so many projecrs and to increase the coherence of dec ided to maintain this approach to partnership. external support, we have been trying to shift: to sector- . wide approaches, under which the Government defines An area of mixed results is that of collaboration with its policies, programs and related expenditures, and the civil society, as can be gleaned from the comments of development partners then come in to help finance the the B a uk's partner, b ut long-time critic in the program . This enhances ownership and greatly introd uction to this volume. But there is undoubted improves efficiency especially in the administration of progress, and the Gove rn ment has dramatically assistance. This is best demonstrated in the case of the improved consultati on in the context of the preparation Health sector, but is also true in general in roads of the GPRS, as did the Bank in the preparation of its agriculture and natural re ources. A PARTNERSHIP FOR PROGRESS 34  GHANA AND TilE WORLD BA1\K 2002 COLLABORATING WITH CIVIL SOCIETY Country Assistance Strategy (CAS) I n the last two decades, th e World Bank has significantly expanded and improvcd its relationship with civil society organizations. During this pcriod, the In 1997, even though the Ghana CAS process did nol Bank's dialoguc and collaboration with civil society has attain a high level of participation, it saw the begitUli ng moved from negligible to substantial. Scveral initiatives of a process that recogniz d the importance of civil are responsible for recent improvements in civil society society involvement in pol icy formulation. NG Os involvement including the Strategic Compact (1996­ consulted then, though appreciative of this development 2000) which strengthened the Bank's capacity to work against the backdrop of the past practice whereby the with civil society and other deve}opmcnt partners, as CAS was considered as the exclusive preserve of well as the Bank's decentralization to the frontline of government and Bank, expressed their regret at their development work. It led to the Bank's new client limited involvement. In 1999, the CAS preparation orientation, poverty-reduction focus, and a knowledge­ process marked a significant shift from the past as six based emphasis. Furthermore, the World Bank has stakeholder consultations were held across the country adopted new initiatives and products such as the CDF to collect views and contributions from civil society and PRSP. These encourage the use of participatory groups from the word go. These consultations which, processes at the macro level and promote a policy of at the request of the Country Director, were organized . inclusiveness, transparency and empowerment. by the Civil Society Coordinating Council (Civisoc), a coalition of Ghanaian CSOs, involved associations of By the end of the 200 I fiscal year,'the Bank had about teachers, nurses, the Trade: ' fnion Congress, NGOs 70 Social Development/Civil Society Specialists and and community-based Drganizations (CBOs) , and NGO Liaison Oftlcers in country offices around the facilitated a mutuall y beuefieial interface between the world. They have primary responsibility for civil Bank and its civil soc iety partners. society-World Bank collaboration , civil society involvement in Bank supported projects and civil society In 2000, with th supp rt ofthe Bank and other donors, involvement in thc preparation of Country Assistance the Ghana Ass oc iat ion of Private Volunta ry Strategies (CASs), as well as other forms of dialogue Organizations in D e e lopment (GAPVOD) in such as the Structural Adjustment Participatory Review collaboration with the Ministry of Employment and Initiative (SAPRI). Social Welfare (n ow Manpower Developm ent and Employment) held consultations countrywide on n In Ghana NGOs are seen in aU spheres of economic, NGO Policy. These consultations were designed to political, and social activities and have been a feature result in a mutually agreed framework to define NGO in the design, implementation and monitoring of a activities and to e stablish a more formal NGOI growing number o f Bank- supported projects in government of Ghana relationship. It is hoped thal by education, health, water and sanitation, agriculture, the end of that process o f dialogue, an enabling legal environment, poverty reduction , and infrastructure. environment would ha e been created to govern the There are more than 1,500 NGOs and Community activities ofal! NGO in the country. This will be in the Based Organizations (CBOs) providing a wide variety inte rest of government and the rest of the development of social services, particularly to the poor and community in Ghana. disadvantaged, especially in the rural areas. It is in view of the importance the B nk attaches to GOs and CBOs, Structural Adjustment Participatory that il tries to ensures that they are involved in projects Review Initiati e (SAPRI) it supports and at the po li<:y level. A growing number of Bank projects show ev idence ofN GO and community The Structural Adjus tment Participatory Revie w in vo lvement to enhan ce the effectiveness of Initiative (SAPRI), a joint exercise between the Bank. de ve lopment interv entions. Besides, the Bank's a network of c ivil soci ety organizations and the Safeguard Policies stipulatl! that social aspects are Government to improve understanding of the impact carefully examined and given a clean bill of health to ofadjustment policies and to seek ways of incorpora ring be rated satisfactory. the participation of eiv iI society in future policy A PARTN ERSHIP FOR PROGRESS 35  GHANA AND THE WORLD BANK 2002 formulation, ended recently. Ghana is one of seven The Small Grants Program countries in Asia, Latin America, Central Europe and Africa that carried out agreed actions under SAPRI after Collaboration between the Bank and NGOs has the 50 Years is enough Campaign by an international improved over the past decade and should continue to coalition of NGOs in the mid-nineties. After the First grow. New initiatives are evolving through which NGO Global Forum to launch the exercise in Washington and CBOs can access the Bank's resources, including D.C. , participating countries went back and started the Special Grants Program, the Small Grants Program, individual country exercises. After Ghana's First the Consultants Trust Fund and the Consultative Group National Forum in Accra in 1998, a number of issues to Assist the Poorest. The Small Grants Program has, were selected by the three partners for field research. since fiscal 1998, been decentralized to country offices The results of the investigations in the selected areas of the World Bank. Since fiscal 1999, the Ghana Office were presented at the Second National Forum in May has disbursed funds fro m the Small Grants Program to 200 1. The areas of investigation were mining, 22 beneficiaries, mainly NGOs. The grantees have used education, health, agriculture, and trade. The exercise the funds for activities such as HIV/ AIDS awareness was brought to an end at the Second Global Forum in creation, traini ng of trainers in income generating Washington D.C. at the end of July 2001. Though the activities, gender-ori ented training, and networking of exercise as a program is over, perhaps its most tangible the youth in enterp rise development. Through this legacy is Civisoc which remai ns a mechanism through initiative, the Ghana Office has supported civil society which civil society can engage government and the organizations in different parts of the country to raise donor community in the ongoing dialogue on a broad awareness on a wide rang of social issues and undertake range of policy issues. training of poor communities , in appropriate strategies to improve their standard ofliving . \ \ \ Ghana SOCiety for th e Blind holds a workshop organised with the assistance of the ' World Bank A PARTNERSHIP FOR PROGRESS 36  GHANA AND TI-IE WOR I.D BANK 2001 LOOKING TO THE FUTURE s Ghana looks to the future, and we look to "a below potential, and certainly be low target Can that A partnership for progress" with Ghana, can we do with optimism? The past development pattern has been potential now be realiz ed and equitable growth at a significantly higher Le el be realized and felt widely in mixed (Insert title ofAryeetey book M iracle ane! Mirage the economy? If the G PRS policies outlined in Box here). Success in reducing poverty through positive per below arc implemented, then there is every cause for capita growth and in attracting huge resource flows: and optimism and that is why the Bank will continue its yet a performance that all WQuid acknowledge is well etforts in Ghana. The Ghana Poverty Reduction Strategy The Governm ent of Ghana aims to create wealth by transforming the nature of the economy to achieve gl'owth, accelerated poverty reduction and the protection of the vulnerable and excluded within a decentralized, democratic environment This goal will be achieved by: .. Ensuring sound economic management for accelerated growth; • Increasing production and promoting sustainable livelihoods; • Direct support for human development and the provision of basic services; • Providing special programmes in support of the vulnerable and excluded; • Ensuring good governance and tncrec:sed capacity of the public sector; and • The active involvement of the private secto ' cis the main engine of growth and partner in nation building, The emphasis over the period wi ll be (.0 ;) stabilising the economy and laying the foundation !'ora sustainable, accelerated and job creating agro-based industrial growth. The GPRS will also focus on providing the enabling environment that will empower all Ghanaians to participate in wealth creation and to partake in the wealth created. The priorities over the period 2-002-2004 are: Infrastructure: The objective is to open up the country, introduce competition and create an I' enabling environment for the Private Sector th rough roads, ports, telecommunications and airways- Modemised agriculture based on rural development: Governmenfs objective is to develop the country to become an agro-industrial economy by the year 2010, throug h land reform, encouragement to grains and new cash crops, and supporting value-added. Enhanced social services: The objective is to enhance the delivery of social services to ensure locational equity and quality, particularly with regard to education and health services, changes in the educational system, model health centres, and replacing wcash and carry" system with alternative systems of financing health care. Good governance: The objective is to ensure the rule of law, respect for human rights and the attainment of social justice and equity_ This is to lead to the strengthening of the three arms of government, the exeoutive , judiciary and the legislature Private sector development: The objective is to strengthen the private sector in an active way to ensure that it is capable of acting effectively as the engine of growth and poverty reduction. This is to lead to the creation of wealth at a faster rate in order to reduce poverty in a sustained manner. A PARTNERSHIP FOR PROGRESS 37  GHANA AND THE WORLD BANK 2002 In the "Ghana Today" section, we outlined the main Three themes have guided our activities in Ghana in domestic and international challenges that face the the last three years, and can be expected to continue to economy. The GPRS is the response to these challenges. do so. In responding to it, the Bank will be formulating with (i) Raising the rate of growth of the economy: the Government a new CAS. While not wishing to pre­ thi' has included such areas as support for empt what will emerge from that process, there are a economic reform, and the projects described few things that we can say. ea rlier in agriculture, the Gateway, and infra tructure. Given the underlying theme of First, and most obvious, the World Bank has been a the GPRS, this is sure to continue to be a key close partner ofGhana's for almost forty years, and will area of focus. continue to be until Ghana achieves its development (ii) Redefining the role of the state: th is has goals. COllunitments and disbursements of close to included the strong invo1 lvement in the reform $200 million per annum have been the average for recent of the public sector, including privatization, years, and we would expect this to rise somewhat over and th s t rengthening of pu blic ser vice the coming period. This would of course be provision in health, education, water supply and accompanied with advice on policy and program design the urban sector. and the sharing of international comparative experience. (iii) Implementing the strategy more effectively: Ghana has been a leadi ng practitioner of what is called G hana has, as noted, been a better planner than the Comprehensive Development framework (CDF). implementer. This area has therefore included The CDF is based on four key principles, and these will a se arc h for more better p artne rsh ip s, continue to guide our work in Ghana. These are: improvements in governance and support for the decentralization of service provisi n. Working in the context of a comprehensive We will therefore continue to work on these th ree long-term vision for the economy thematic areas, under the overall guidance ofthe Ghana Country ownership .of the process Poverty Reduction Str.iLegy. We will increasingly be Working in partnership with others, notably seen to be financing th" Government's programs, rather other deve!opmen't partners, civil society and than implementin g " ',vodd Bank" projects, and we will the privatI' sector always be wor ~ ,~ with partners, wherever possible within compreheuliive sector-wide programs. MeasLJ II1g success by results Finally, we wilL judge and be judged by results. The These may seem to be simple approaches, but they imply goal of the Bank in Ghana in simple: to contribute to fundamental changes in the nature of the relationship the sustainable reduction of poverty. That is, at the end between countries and development partners, and we of the day, the oIle yardstick to measure the success of believe these changes are paying off in Ghana. our partnership. TI;JF. WORLD BANK'S SAFEGUARD POLICIES S afeguard Policies were developed by the World Bank on the assumption tbat though de velopment projects it supports may have many benefiCIal impacts, they may also have some negative impacts. The safeguard policies are meant to cnsure that these negative impacts are idtmti fied and mitigation measures carried out. lbe Bank believes that projects are enhanced by intcgratLng social and environmental considcmtions into project design . The J 0 safeguard policies can be categorized into Environmental and Rural, Social and Legal safeguards. Additionally, under Public Consultation and Disclosure is the Bank Disclosure Policy. The safeguard policies cover the following: Environmental Policies, EnVIronmental Assessment, Natural Habitats, Forestry, Pest Management, and Salety of Dams. These policies identiJY and evaluate the risks of a project on the natural environment, ensure due consideration is given to the conservation of natural habitats. that forests are managed in a sustainable manner, and pest management acti vities follow an Integrated Pest Management approach . They also ensure that due consideration is given to the safety of dams in projects, or what may be affected by dams under constmction. Involuntary Resettlement, Indigenous Peoples, and Cultural Property. Social policies are meant to avoid or minimize involtmtary resettlement and related dismption and to as 'ist displaced persons, eusure that indigenous peoples (in areas where they are found) are afforded respect for thetr dignity, do not suffer adverse effects and benet,t from prior consultation and infomlcd participation. The policy on cultural property cnsuws that ·cultural properties such as sacred groves, burial grounds and so on are identified and protected. Di sputed Areas and lntemational Waterways. Legal safeguard policies ensure that auy territorial dispute is identilied at the earliest Slag possible, and that projects will not affect the efficient utilization and protection of international waterways. An additional policy is that on disclosure. It aims at ensuring that infonnation is made avaI lable to afleeted people and the public about a project to promote transparency. Public consultation leads to fewereonflicts and delays, improved decision-making by government, better understanding and credibility by GOs and public agencies. Senior management of the Bank is committed to full compliance with Safeguard Polic ies as t1,e reputation and perfonnance of the Bank depends \1 " their consi stent application. It improves the borrower 's understanding of the Bank 's goal s of sustainable development and provides opportunities for beneficiaries to participate in the design and benefits of project~. By adhering to these policies, the Bank maintains its commitment to a po " c '11 of "do no hann" to people and the environment. In general, these policies help in the identification of issues and avoidance of surprises, help desi,, better projects, and improve relations with local communities . They also prevent delays and stoppages, prevent conflicts and legal disputes, allow for good corporate image, reduce economic costs and contributo to borrower capacity building. A PARTNERS HIP FOR PROGRESS 38  GHANAX, O TH E WORLD U,\l\K 200 2 INTERN TlONAL FINANCE CORPORATlON financing for projects which typically cost I s than T he International Finance Corporation (IFC) promotes growth in the developing world by financing private sector investments through both US$5 million. loan and equity finance, and by providing technical In Ghana, IFC continues to provide a package of assistance and advice to Governments and businesses. financial and advisory services at each stage of the Since 1984, IFC has invested in 55 projects in Ghana, project cycle: creation, expansion, modernization, and approving US$300 million in financing from its own diversification. It also manages a technical assistance account and US$280 million through the loan program to d ev lop capa ci ties wi thi n private syndication program, with a cumulative cost of companies and government agencies, and to encourage US$1.5 billion. More than twenty-five of these corporate best practice with regard to environmental investments have been fi nanced through IFC's small and social issues. business program, which provides debt and equity 5 yndi. ColilU o.n fL OgtllUTl 47% I!qti.ty 2% portfolio in Ghana comprises 18 For FY200 1, four proj ects are under consideration active projects in variou s sectors with a total for a possible IFC investment, Wllic h have an mmilt:ed amount of a t U5$62 million. 65% of estimated total cost of $22 million. These proj ects which is in the telecom sector (including a yet to be include a housing finance, pharmaceutical, printing disbursed US$40 million loan to Ghana Telecom). and construction ofa commercial building. Sector No. Committed Dis rsed project $'000 $'000 Agribusiness 4 1,286 1.286 Financial services 3 2.353 2,353 IT/tclecom 2 4 0,625 625 Aluminiuml ted 2 1,751 1.751 Touri om 2 2,235 1,007 Mining 1 13,008 13,008 Others 4 1,044 61"8 Total I~ 62,302 20,718 Website: www.ifc.org A PMU N"Ei RSHIP FOR PROGRESS 39  GH ANA AND THE WORLD BANK 2002 MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA) IGA was established in 1988 to promote FDI flows to and among developing countries - a mandate M which it implements by offering risk mitigation products to investments into its 132 developing mem­ ber countries and by providing legal and technical assistance in designing and implementing programs to attract FDI. MlGA is active with all of its products and services in Ghana. MIGNs technical assistance unit organized its [ust investment promotion conference in Ghana in 1990 to draw the attention of the international business community to the fa orabl investment climate and specific opportunities .. MIGA will continue to support Ghana in the area of designing and implementing effective investment promotion programs and providing feedback from investors on p licy issues and improvements in the regulatory environment for business. This work is expected to contribute to guarantee activity. Preliminary applications for coverage received by MIGA over the past rew years in connection with investors wish ing to invest in Ghana and seeking guarantees against risks include inve tor interest in telecommunica­ tions, water, power, agri-busincss and other services. Their indicative investment values range from US$ 10 to $80 million. In 1999, MIGA issued approximately USS18 million cover for a project to expand an equip­ ment dealership in the Tarkwa mining area in Ghana. About 150 jobs will be created during constmcuon and operation of the project. MIGA will continue to provide technical assistance to Ghana and the private sector on: • Developing a FDl promotion strategy that reflects national attributes and serves economic objectives Building effective partnerships with public and private sector counterparts • Strengthening country image building ill the international business community • Generating and targeting investment opportunities that lead to actu al investment • Servicing investors to ensure that investment is secured and r tained In the above context, MlGA is providing technical assistance to the Ghana Investment Promotion Cent(e (G LPC), the Free Zones Board, and the Chamber of Mines in the development and maintenance of their websites. In July 200 I , MIGA sponsored a landmark program for Ghana popularly known as Home Coming. Th aim of the p~ogram was to encourage Ghanaians, particularly tho 'e living abroad, to invest in Ghana. It brought togeth r , ome 1,500 Ghanaians, 500 of whom have been living abroad. The success of the program and the interest it as generated has led participants and the Government to ask for a second such gathering. · Ghana is also on of five African countries selected to benefit from investment promotion technical assis­ tance (funded by the Swiss Government and executed by MIGA) commencing inearly 2002, under which MIGA will work with the lead Ghanaian investment promotion intermediaries to target and reach out to interest investors able to benefit from the country's privileged trade agreemen1s with the EU and U SA. With MIGA's Africa func tion now decentralized to the continent (Johannesburg, South Africa) MIGA's work on (Ihana is expected to grow even fUrther. For more information, please contact: Dr K en Kwaku, Chief Representative Tel: +27 II 34 1 9000 MIGAAfrica Fax: +27 11 325 05 82 1st Floor Oxford Gate, Hyde Park 2196 Email: kkwaku@worldbank..org P.O. Box 4 1283, Craig Hall 2024 Johann sburg. South Africa Website: www.miga.org A PA RTN ERS HI P FOR PROGRES S 40  C; HA'\l AAl'D rHL WORLD l3 ANK 2002 AFRICA P ROJECT DEVELOPMENT FACILITY T he Africa Project Development Facility (APDF) was established in 1986 . joint initiative of the International Finance Corponttion (IF ), the prog rams to 124 local consultants. Four hundred and ninety-four (494) client personnel have received 00­ . the-job training as part of the consulting process, and African Development Bank (AiD B) and the United 3 19 new jobs have been createJ in client finns, 108 Nations Development Program (UNDP), to respond of these at th management/senior level. to the need for project preparation assistance for Who can APDF assist? A frican entrepreneurs. AP DF will a sistAfrican entrepreneurs who APDF has been active in Ghana ince 1987, serving the country from the Facility's West Africa Regional Ha e viable business ideas or ventures Headquarters in Abidjan. The establishment of tile Are also prepared 10 invest their money in the Accra office in 1993 was justified by tJle prevailing venture high demand for APDF services in the country and the pote ntial for ill c n t inued growth. The Show commitment in investing time and effort iQ Government of Ghana's L ng-tetm commitment to developing and implemenung business ide~; and private sector-led gro th has also translated into Are committed to ta k ing an acti ve role in growth in the deman d tor APOF services. managing their busin sses In 1999, APDF integrated business development into How to a pp ly to APDF its range of services und r the name Enterprise Support Services (ES ). The ESS concept was To apply for APDF aSSIstance, you should provide introduced as a pil t project in Ghana in February the following infonnation: 1996 under the name Enterprise Support Services for Africa (ESSA), and as jointly funded y the Business or project name Canadian International DevdopmentAgency (CIDA) Names of owners or promoter..> and the International Finance Corporation (IFC). The CVs of owners or promoters Under ESS , SMEs are assisted with consulting A brief description of the business or projt.:L1 services in the areas of Organizational and Human A brief description of products and serv ices Resource Development, Production Planning/ Scheduling & Control, Improving Financial Planning List the assets owned or to be bought and Accounting Systems, Developing and Value of businesses or the estimated project cost; Implementing Marketing Strategies and Developing and and i mplementing Management Information Supporting documents (if available) Syst ms. Services offered also include formal Management Training, Firm Specific Technical Business registrations. financial status, business concept or plan Training and In-house Training as part of the consulting process. For more information contact: Since it began operations in Ghana, APDF Accra has APDF completed 93 projects in Ghana, Nigeria, Sierra Leone House No 150A and The Gambia. The projects have resulted in the Roman Road, R man Ridge mobilizatiou of approximately US$76.4 million in P.O. Box CT2638, Cantonments financing, the creation or preservation of about 7,878 Accra, Ghana jobs, and the generation of approximately US$ 8 1.5 million in exports earning '. Tel: (23321 ) 77 98 04/ 77 98 05 177 81 09 7012 17017012 171 Under ESSA Ghana, 68 contracts have been signed WIth consu ltants for the provi"i n of consulting Fax: (23321) 774961 /77 6245 selvices. 24 fonnal tr.tining programs have been Email: mnjie@ifc.ocg offered to 60 I client personnel and 5 train ing A PARTNERSHIP FOR PROGRESS 41 -------  GHANA AND TH E WORLD BANK 2002 AMSCO MSCO is a private sector company form d to implement the African Tr . • g and M anagement Services A (ATMS) Project. United Nations Development Program (UN DP) and lnt tional Fi1)ance Corpoiation (We, th private sector arm oftbe World Banle:) j ointly initiated this Project. The Project is aimed at improving manageml!Ut capacity at the level of the individual African enterprise. AMSCO's objective is to assist in imProving the competitivenes o f African companies to hring them up to international standards and to train local stalI for management succession. AMSCO's Core Services include Company analysis to identify long term potential and major management needs; Recruitment of managers for senior positions, secondments for periods of 1 to 3 years; Subsidizing palt of manager's salary to client companies Meeting up to 50% of the cost of management development (training) programs; Providing continuous implementation support and backstopping; AssessmenY'ofskill gaps and assisting with the preparation oftai ~ ·,-made Company training and external training courses A" ' isting in raising funds for client companies AMSCO's clients inc Iud African and joint-venture companies wishing to expand and/or further improve their quality; companies in the process of rehabilitation; and parastatal companie, in the process ofprivatization. AMSCO has been iov lved in over 16 companies in Ghana. Presently, there are 69 Managers in 11 Ghanaian companies. Every year, over 2000 employees in client companies receive in-(:ompany training and specific training plans. Who Qualifies SMEs with African presence, at least 10% African ownership and which have the potential for grm.vth and sustainability. Mostly private sectorenterprises but parastatals operated on commercial lines and with serious intention of future private ownership are also considered. How to contact us; Project Officer, Ghana Offi ce 150A Roman Road IFe Building Roman Ridge, Accra Telephone: 779804/5 or 70 11787/8 F~ 77496 1 e-mail: charJesgidi@amscobv.com A PARTNERSHIP FOR PROGRESS 42  THE WORLD BANK GHANA OFFICE PUBLIC INFORMATION CENTER (PIC) The World Bank Ghana Office PIC is open to the general public Monday to Thursday 1:30pm to 4:30pm We stock a selection of World Bank pub lication s in print and you can also access publications on th e w eb. Staff of the PIC are available to answer all questions about the activities of the World Bank in Ghana and elsewhere or di rect you to the appropriate specialist for answe r. ~ You·can access a \ ' ide range of informati n abou t th World Hank and its operations at: www.w orldbank.org and for Ghana specific information: w w w.worldbank.orglghana Please visit u s and contact the following PIC staff for assistance: Kafu Kofi Tsikata Stephen Tettevi Ernmabel Hammond Salli Cudjoe Thank you. 43 -------  Current World Bank Financed Projects in Ghana Name of Project or Program Secto r Year Amount Summary of Objectives (US$I11) l. Second Economic Refonn Macroeconomic 1999 180.0 Suprort for m~croeconoillic stability and for thc implemcntation Support Operation (ERSO II) of deeper reforms in the cocoa, energy Jnd banking sectors. 2. Agric Services Sub -sector Agriculture/ Rural 2000 67.0 Incrcas ing the growth of agricultural rroduetivity and incomes and boosting Investment Development rood security, in an cnvironmentally sustainable manner 3. Rural Finance Serviccs Agricu lture/ Rural 2000 5.13 Broade!1ing and deerening rll1ancial intermcdiation in rmal areas through linkages betwcen ·inforrl1al and formal financial in stinili ons, establishment of arc x body for the rural banking system, earac ity building for rural and community linaneial institutions 4. Vi lIag.:: In frastructure Agriculturel Rural 1997 ~OO Poverty allevi~lt i on through small investments alld grallts targeted at small reso urce-roor Develorment cOl11munities for develorment of social and economic infrastnlcture at the village level. , 5. Fisheries De.velorlllent Agriculture/ Rural 1995 9.0 II11[lroved management of the cxploitation ofmmine fishcl·ies , ami conditions for a sustain ed I Development inerease in inland fisheries. 6. Natural Resource Management Environment 1998 9.1 Sustainable fore stry, wildlife ~l11d other natural res ource management rolieies and [lractiecs ! I through mana gemcnt OffOITstS, [lrotected wildlife areas and land re sources. -I'> -I'> 7. National Functional Literacy Education 1999 30.0 SU[lpllrts the Government's National Lituacy and Functional Skills Program by increasing the number of Ghanaian adults (15 yeal's or older), par1icularly IVomen , wilo ~equirc Iitcracy and function~1 skills. 8. Basic Education Sector Education 1996 50.0 Irn[lroved imrlell1 cntn tion of the Government's Free Compulsory Un ive rsa l Basic Educa ti on Improvement [lrogram by interventions to imrro\'C teachingilearning outcomes, selc:ct ivcly impro ve access, and slren gthen management efficiency at central and de-ccntrali zed levels. 9. Communi ty-Based Poverty Poverty 1999 5.0 Te sting mechanisms for delivering [loverty reduction intervcntions to marginalized grou[ls Reduction Reduction/Health lilrougil coml11unity nutrition , food security interventions and activities for strect chi ldren ; al" .') build cU[lacity for monitoring and evaluating povCl'ty reduction programs . . _- 10. Ghana AlOS Response Project Health 2002 25 Supro r,,: ove r a 4-year [leriod non-MOl-! mandated aetivitics of the Government's strategic fr~mework for AlOS . Districts will al so be mobilized to playa key role in tile fight against HIV/AlOS. II. Health Sector Surport Health 1997 35.0 Sup[lort for the Government's n~ti ona lmcdium term strategies for health, nutrition and popUlation. f2. Urban V Project In frastructure 2000 10 )3 Supports impro vc ments in basi c infrastructure and urban services in seco nd ary (owns, especially th ose se rv ices bcneliting the poor, and stren gthening the filElncial , technical and managerial capacities of Di strict Assembl ies. It is part of mAs 573.2111 3-rhased program. - -­ - - _. -­ -  - Name of Project or Program Sector Year Am ount Su mmary of Objectives -­ (tJSSm) 13. Community Water & Sani tation Jl[ Infrastructure 1999 25.0 Rehabi litating/construction appropriate !ilcilities and establ ishing comm uni ty responsibili ty for opera tions and maintenance. I 14. Road Sector Del' Program Infrastructure 2002 220.0 (·ovcrs all three areas of roads: highways, fecdcr and mban roads. An d seeks to achieve sllstainable improvements in the supply and perfomlance of roads and road transpoi1 scrvices in a regio nally equiwblc manner. 15. Local Governmen t Development Infrastructure 1994 38.5 Extension of local governmen t financ ial and institutional reforms earlier unde rtaken in five 16. Urban Environmental Sanitation Infrastructure 1996 71.0 Improved urban waste management and drainage in five main cities with emphasis on improving serviccs for lower-income people and private sector provision of serviccs 17. Thermal (P-VII) Energy 1995 175 .6 Expansion of therlm l gencra tion to compi.:mellt hydro generation ofthc power supply, and the development and implementa tion of the power scctor refo rm program aimed at private pa rt ic ipation in power gencra tion and dis trib uti on .. 11i. Non-Bilnk Fina ncia l Ins ti tutions Private Sector 1\l95 23.9 Technical assistance to aid devclopmcnt on non -bank linancial secto r capacit y to support & Finance pri\;atc sector credit and in surance needs. 19 . Public Enterpri se and Privatization Privatc Scctor 19% 20.9 Further strengthcn publ ic tinancialmanagemcnt practices by the introduction of the Medium I Te chnical Assistance & Finance Te rm Expenditure frame'work for budgeting and expcndirure management and the modernization of the cxpcndirure management systems. 20. Trade & Invcstment Gateway Privatc Sector 1998 50.5 Promotion of export orientcd investmcnt by supporting the developmen! of privately export & Finance proccssing zone, an d by imp roving the efficicncy of trade and investment promotion front line agencies, namely customs, pOi1S services and immigration. 21. Financial Managel11~nt Public Sector Reform 1997 20.9 Enhancing the efficiency, accountabil ity and transpa rency of the financial functions of Techni cal Ass istance Project >! ovcmmen t through the modcm izat ion ofaeeollnting systems, strength enin g audit , imp ro\'cd I 22 . Publ ic Sec tor Managemcnt Reform Pub l ic Sector Refoml 1999 14.3 budget ing procedure s, and mo re open procuremen t systems. Refo rm of ce ntral management agencies and subvented agencies and the improvement of basic publ ic sector management systems and proccsses. --­ - ­ - - ­ - --­ - - - - - -­ ---­ - - DESI GN, L AYO UT So: I' IHNTl NC : MOLTEI'I·J,\ - (233·21) 77Y379