Ghana - Urban Development Strategy Review

Document of THE WORLD BANK FOR OFFICIAL USE ONLY CONFIDENTIAL Report No 13567-GH REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW December 22, 1994 Infrastructure Operations Division _ Western Africa Department FILE COPY African Regional Office CONFIDENTIAL Report No: 13567 GH Type: SEC This document has a restricted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without VVorld Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Cedi (0) USS1 = 01034 01 USSO.001 (As of December 1, 1994) ABBREVIATIONS AND ACRONYMS AESC Architectural and Engineering Services Corporation AfDB African Development Bank AMA Accra Metropolitan Assembly ARDP Accra District Rehabilitation Project (GOG/IDA) AWMD Accra Waste Management Department CBD Central Business District CIDA Canadian International Development Agency DA District Assembly DACF District Assemblies Common Fund DUR Department of Urban Roads DWST District Water and Sanitation Team ECG Electricity Corporation of Ghana EPC Environmental Protection Council GAMA Greater Accra Metropolitan Area GDP Gross Domestic Product GSS Ghana Statistical Service GOG Government of Ghana GPRTU Ghana Private Road Transport Union GTZ Gesellschaft fir Technische Zusammenarbeit (Germany) GWSC Ghana Water and Sewerage Corporation IDA International Development Association ILO International Labor Organization LGDP Local Government Development Project (GOG/IDA) LTR Land Title Registry LVB Land Valuation Board JICA Japan International Cooperation Agency KfW Kreditanstalt flir Wiederaufbau (Germany) KMA Kumasi Metropolitan Assembly KWMD Kumasi Waste Management Department MFEP Ministry of Finance and Economic Planning MLGRD Ministry of Local Government and Rural Development MOTC Ministry of Transport and Communications MRH Ministry of Roads and Highways MWH Ministry of Works and Housing NGO Non-Governmental Organization ODA Overseas Development Administration (U.K.) O&M Operation and Maintenance PWP Priority Works Project (GOG/IDA) SEI Stockholm Environmental Institute TCPD Town and Country Planning Department UMP Urban Management Programme (UNDP/UNCHS) UNDP United Nations Development Programme UNCHS United Nations Centre for Human Settlements UTP Urban Transport Project (GOG/IDA) VRA Volta River Authority WMD Waste Management Department FISCAL YEAR January I - December 31 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW Table of Contents Page No. EXECUTIVE SUMMARY i I. INTRODUCTION 1 A. Objective 1 B. Preparation of the Review 1 C. Policy Context 1 D. External Support in Urban Development. 2 II. URBAN ECONOMY AND POPULATION 4 A. Economic Development and Urbanization 4 B. Urban Population Trends 6 C. The Urban Informal Sector 7 D. Conclusions 9 III. DEALING WITH CONSTRAINTS FOR URBAN PRODUCTIVITY 10 A. Coverage and Quality of Urban Services 10 B. Infrastructure Costs and Land Use Patterns 16 C. Infrastructure Constraints on Microenterprises 18 D. Infrastructure Constraints on Formal Industry 20 E. Conclusions 21 IV. TARGETING THE URBAN POOR 23 A. Urban Poverty in Context 23 B. Living Conditions in Low-Income Urban Areas 24 C. Impacts of Deficient Services in Low-Income Areas 25 D. Conclusions 26 This report is the product of a collaboration between the World Bank and the Government of Ghana. Data collection, analysis, and writing were carried out by a team comprising Alan Carroll (Task Manager/Urban Development Specialist), Jagdish Bahal (Senior Financial Analyst), Chris Banes (Consultant Municipal Engineer), Kavita Sethi (Consultant Economist), Robert Roche (Sanitary Engineer), Jerry Silverman (Principal Institutional Specialist), Kyu Sik Lee (Principal Economist), Alan Coulthart (Senior Municipal Engineer), Frank Tackie (Consultant Urban Planner), and Kwame Young- Gyampo (Consultant Economist). Officials of the relevant Ministries, Departments, and Local Government Assemblies were involved at all stages of the Review, but their participation was especially focused at two stages. To initiate the Review, meetings were held with central and local officials to identify the issues to be covered. After data collection and initial analysis, a series of seminars was conducted with the various groups to review the preliminary findings and discuss recommendations. The responsible manager is James Wright, Chief, AF41N, and the peer reviewer was William Dillinger, LAlIN. Barbara Barbosa-Machado provided production support for the report. V. DELIVERY SYSTEMS FOR URBAN INFRASTRUCTURE AND SERVICES 28 A. Water Supply 28 B. Sanitation 31 C. Solid Waste 35 D. Drainage 39 E. Urban Roads 40 F. Urban Transport 43 G. Conclusions 44 VI. URBAN LOCAL GOVERNMENT 47 A. The Policy Environment for Local Government 47 B. Major Issues 48 C. Conclusions 51 VII. URBAN FINANCE 53 A. Own Source Revenues 53 B. Central Government Transfers 57 C. Own Source Revenues vs. Transfers 59 D. Expenditures 60 E. Composite Budgets 62 F. Accounting, Auditing and Financial Management 62 G. Conclusions 63 VIII. URBAN ENVIRONMENT AND LAND 65 A. The Urban Environment 65 B. Urban Land 68 IX. URBAN DEVELOPMENT STRATEGY 77 A. Objectives 77 B. Alleviating Constraints on Urban Productivity 77 C. Targeting the Urban Poor 78 D. Making Urban Service Delivery more Efficient 78 E. Improving the Financing of Urban Services 80 F. Urban Environment and Land 81 G. High Priority Interventions 81 ANNEXES 1. Estimated Investment Requirments of Meeting Bulk and Local Urban Infrastructure Needs 2. Technology Options for Urban Sanitation 3. Housing Types and Technical Choice in Urban Sanitation 4. Responsibilities of Waste Management Departments S. Revenue of Local Government Bodies, Local Government Act 1993, Sixth Schedule (Section 86) 6. Percentage Contribution of the Various Components to Total Revenue and Expenditure 7. Actual Metro/Municipal Assembly Revenue and Expenditure BIBLIOGRAPHY MAP IBRD No. 26553 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW EXECUTIVE SUMMARY A. OBJECIVE 1. The objective of this Review is to help define a strategy that addresses the economic, poverty, capacity-building, and environmental dimensions of urban development in Ghana. In 1988, when the last urban sector study was carried out by the Government of Ghana (GOG) and the World Bank, Ghana was barely beginning to recover from a deep economic crisis. Today Ghana's economy is growing, per capita income is rising, and prospects for the future are encouraging. Ghana's economic turn- around is placing increasing demands on its cities and towns, both to support economic development and to meet the needs of the expanding urban population. These pressures make a fresh assessment of the country's urban strategy necessary. B. ISSUES Economic Development and Urbanization 2. Ghana's economic base has been gradually shifting away from almost exclusive dependence on rural-based primary activities to a more diversified structure. Coupled with the continuing economic expansion, these changes are generating a steady increase in the share of the country's urban population (currently about 35 percent). Even though urban dwellers have relatively higher incomes on average than rural people, the urban population includes a large proportion of individuals whose econonic opportunities are mainly limited to low-productivity activities in the informal sector. Ghana's current urban growth rate of 4.3 percent per year, while below the average for Sub-Saharan Africa, would lead to a doubling of the country's urban population in only 16.5 years. Through the year 2000, Ghana will acquire an average of about 277,000 new urban dwellers each year, the equivalent of adding a city the size of Kumasi every three years or four cities the size of Cape Coast each year. 3. About half of Ghana's total GDP is non-agricultural, in industry and services. These largely urban-based sectors of the national economy have been the most dynamic. Between 1980 and 1992 the average annual growth rates of the industry and services sectors were 4.0 percent and 6.7 percent respectively, while that of the agriculture sector was 1.2 percent. Barring an unexpected economic downturn, the contribution of urban areas to the economy as a whole is likely to increase. While improved economic growth in Ghana over the medium term future will depend in large part on achieving higher agricultural production and exports, growth of the agriculture sector is likely to foster the development of urban-based activities linked to it, such as the processing of wood and other products, the transfer and storage of farm outputs, and the provision of commercial and financial services. Ghana's current drive to promote new investment, both foreign and domestic, would also contribute to the development of new manufacturing enterprises (catering to both the export and domestic markets) in urban areas. 4. For Ghana to meet its objectives of sustained growth and improved living conditions, its cities and towns must be able to provide substantially higher levels of infrastructure and services, must be managed more efficiently, and must offer a more supportive environment for private investment. Constraints on Urban Productivity 5. Adequate urban infrastructure and services, a supportive urban policy framework, and good institutional capacity are essential components of the enabling environment for the growth of the urban economy and the productivity of urban firms and households. In Ghana, inadequate urban roads, water supply, electricity, telephone systems, public transport, and sanitation hinder the formation and growth of firms by increasing the cost of doing business, limiting access to markets, and reducing efficiency. 6. Urban productivity is also hampered by low-density urban sprawl, which increases the costs of infrastructure and commuting. Concentrations of small and micro enterprises in urban areas provide thousands ofjobs and serve as incubators for the growth of firms, but these areas lack adequate access, water, power, sanitation, and drainage and are at risk from ill-conceived relocation schemes. Over the medium to longer term, the development of manufacturing will be constrained unless measures are taken to facilitate the availability of land and services for industries. Effects on the Urban Poor 7. Although urban areas in general are less afflicted by poverty than the national average, this is largely accounted for by Accra's relatively better situation. The incidence and depth of poverty in the urban areas outside Accra is about the same as the national average. In absolute terms, Ghana has a significant amount of urban poverty. As of 199 1- 92, there were about 2 million poor people in urban areas, about half of them living in extreme poverty. 8. Regardless of how poverty is measured, it is clear that a large and growing number of people in Ghana's urban areas do not have sufficient income to meet their basic needs. The urban poor tend to be concentrated in core indigenous settlements, migrant residential areas, and high density neighborhoods that are economically depressed, have poor environmental and health conditions, and lack basic services. Inefficient Delivery Systems for Urban Services 9. The deficiencies of urban infrastructure in Ghana are due partly to the limited financial resources available given the nation's relatively low GDP. Nevertheless, there is considerable scope for improving water supply, urban transport, solid waste collection, and other services by reducing waste and inefficiency. Moreover, without improvements in delivery systems-the institutional arrangements for service provision-additional investments will not be sustainable. The demands of users for services-such as water, sanitation, and public transport-at different levels of quality and price go unmet even when users are willing and able to pay. Among the main factors underlying these problems are: (a) services are usually provided by public agencies which are not subject to the pressures of competition for improving performance; (b) providers lack effective managerial and financial autonomy, which results in pressures to meet objectives other than efficient service provision and fosters a lack of accountability; and (c) users are not well positioned to make their demands known. 10. Providing the right incentives is at the heart of the issue. At the higher levels, executives and political officials are not sufficiently accountable to the public for the effective provision of services, though this has begun to change with the introduction of electoral systems nationally and locally. At the technical and administrative level, the incentives and sanctions to make civil servants more productive are lacking. Slow Decentralization 11. Under the Local Government Act of 1993, Metropolitan, Municipal, and District Assemblies are supposed to assume devolved responsibility for the provision of most infrastructure and services. Recently adopted electoral systems are making local governments more accountable to the public. However, the devolution of functions has not been accompanied by a net transfer of financial resources to the local level or measures to curtail the direct involvement of central government agencies in local activities. Regional and District offices of central agencies have not been abolished or absorbed by local Assemblies as envisioned, and the Assemblies have been slow in creating their own Departments to take over sectoral functions. A major impediment is that most professional and technical staff at the local level are accountable, through the Civil Service, to the central government. Urban Finance 12. Improving urban infrastructure and services requires the mobilization of more financial resources for both capital investment and O&M. Efforts to increase own source local revenues in recent years have centered on the revaluation of property rates and the collection of property taxes. These measures have produced some gains (property tax revenues in Accra increased by an average of 50 percent per year in nominal terms between 1988 and 1991), but their sustainability is subject to the ability of local governments to become more responsive and accountable for the provision of services iv (Accra's property tax revenues dropped by 22 percent from 1991 to 1992). Local revenue collection remains far below its potential. It is estimated, for example, that Metropolitan/Municipal Assemblies are collecting between one third and one tenth of the potential property taxes. Per capita total local revenue collected by the five main cities is minuscule, averaging about US$2.25 in 1992. Transfers are to be increased through a new District Assemblies Common Fund (DACF) which will by law annually distribute to the DAs not less than 5 percent of total GOG revenues specifically for development (capital investment). The key issue with the DACF is avoiding a disincentive effect on local revenue mobilization. Local governments in Ghana have not yet been able to achieve consistent yearly budget surpluses. Until they do so, they will not be capable of servicing debt. Urban Environment 13. The key urban environmental issue in Ghana at present is poor environmental sanitation resulting from a combination of inadequate water supply, sanitary facilities, drainage, and solid waste. There is substantial evidence that the urban poor suffer disproportionately from these problems. The urban strategy needs to take into account the broader framework of policies and institutions that is being developed in Ghana for dealing with environmental issues. The Environmental Protection Council is increasingly involved in setting standards that affect urban development interventions. Urban Land 14. Complementing the need to protect the environment in urban areas is the need to make land available for urban uses to accommodate the rapidly growing urban population and provide for economic growth. The urban land market operates in a highly inefficient and inequitable way. Gaining access to land is difficult, especially for lower-income people. Over-regulation of land transfers and the control of large tracts of land by State institutions make land inordinately expensive. Resources are wasted through rent-seeking in land allocation and litigation over property rights. Lack of secure legal title restricts access to credit and prevents productive development. C. URBAN STRATEGY 15. The objectives of a medium term urban development strategy for Ghana would be: * To improve the productivity of firms and households in urban centers through better infrastructure and services and policies to foster more efficient urban development. * To improve basic infrastructure for the urban poor. * To make the delivery and financing of urban services more efficient. V To contribute to urban environmental protection. Alleviating Constraints 16. The coverage and quality of urban sanitation, solid waste and public transport can be improved most effectively by making available a range of levels of service at different costs in response to the willingness to pay of users. Experience shows that consumers, even those with low incomes, are able and willing to pay for improved basic services. For example, the quality of urban transport services is generally low. It would appear feasible to charge slightly higher tariffs for better-quality vehicles and larger, more cost-efficient buses. Impediments to accessing credit and other barriers need to be removed. In sanitation, studies (see Section B above) have shown that people are willing to pay more than what they currently pay for public toilet usage to obtain a household pit latrine. Public and private providers should be encouraged to develop and implement alternative service solutions and to gain the capacity to perform the financial analysis required for establishing sustainable delivery. 17. In the urban roads and water supply subsectors, priority should be given to continuing the rehabilitation and upgrading of existing, productive facilities. New capital investments should be undertaken selectively, ensuring that (a) they are essential for filling major systemic gaps, (b) there is real demand for them, and (c) they have well- demonstrated high economic returns. The use of appropriate, low-cost design standards for services such as water supply, sanitation, roads, lighting, and solid waste will be crucial to extending the impact of limited financial resources (see Annex Tables 1.3 and 1.4). 18. In the medium to long term, the ability of Ghana's cities to attract new industrial firms will be hindered by a lack of serviced land. The absence of roads, water supply mains, and electricity lines in suitable locations on the peripheries of cities raises costs for firms (and households) due to the need to pay for self-provision or the inefficiency of doing without adequate services. Trunk infrastructure for industrial sites should be provided on a selective basis, in accordance with well-demonstrated demand. 19. The small-scale and micro industry areas found in Ghana's cities can be made more productive by upgrading access roads, electricity, water, sanitation, and drainage. Such measures could be part of a larger assistance strategy comprising technical assistance, training, and the promotion of savings schemes and pooling/sharing arrangements for utilities and expensive equipment. 20. Extensive low-density, low productivity urban land areas should be converted to higher-intensity, more productive use. This would result in much more efficient use of existing infrastructure networks and save on travel times. There appears to be a high potential for private sector investment in the development of urban land provided that: (a) legal and administrative obstacles to the efficient and secure transfer of land rights can be removed, (b) inefficiently used government-owned land can be released for higher- vi intensity development, and (c) short-term construction financing can be made available through banks and other capital market institutions. There are no price controls on private land transactions. Targeting the Urban Poor 21. Many of the urban poor live in communities characterized by inadequate water supply, bad sanitation, lack of drainage, poor road access, and inefficient, low-quality public transport. Geographically targeted upgrading of infrastructure and services in lower income urban areas should be a high priority. Such programs can be undertaken at relatively low investment costs per capita (around US$100-150; less if they are limited to one or two types of services). There appears to be demand for such improved services. The urban poor, along with all other households, place considerable value on environmental improvements and are willing to pay a significant amounts to obtain them. Beneficiaries should contribute a share of the up-front investment costs and should be expected to pay for most of the recurrent costs of the improved services. Physical improvements should be part of an overall strategy for poverty alleviation that includes macro-economic measures to foster stable growth, policies to promote investment for employment generation, and the improvement of primary health and education. Making Urban Service Delivery More Efficient 22. The many alternative institutional arrangements that are available to make infrastructure and service provision more efficient and sustainable can be summarized in four main categories: (a) public ownership and public operation based on financially sound principles and freedom from political interference; (b) public ownership with private provision, using service, management, leasing, or concession contracts; (c) private ownership and private provision under appropriate regulation; and (d) community and user provision. 23. In the public sector, much higher remuneration is not achievable, but other types of rewards and pressures can be used. One approach, which is commonly applied in the solid waste subsector in the U.S.A., is to allow private sector organizations to compete with public agencies. The productivity of both public and private providers can be monitored and adjustments made accordingly. 24. The provision of most urban infrastructure services can be improved by making them more responsive to demand. Part of the solution is opening up service delivery in sectors such as urban transport, sanitation, or solid waste to competition by different providers whose success is dependent on meeting the demands of users. Public agencies may also offer various options (such as cost-sharing schemes for different sanitation solutions) among which users may choose. 25. The maintenance of urban infrastructure could be improved greatly if user charges were managed more effectively. There is considerable scope for imposing more of the vii costs of services on users, as opposed to general revenues. Direct tariffs for services such as water supply, sanitation, and urban transport are still far below the levels needed to cover operating costs and could be raised without exceeding users' ability of pay. For example, GWSC needs to raise its tariffs by about 20-30 percent in order to cover its cash operating expenses. Ghana has made a good start on the recovery of road maintenance costs from users through a surcharge on fuel, but the share of fuel taxes earmarked for road maintenance remains low. 26. The incentives for good performance in all subsectors can be strengthened greatly by widening the use of private sector contracts (in their various forms). Shifting to private contracting is not cost-free or easy-it requires government to learn new skills-but, if properly managed, it makes it possible to reward good performance and sanction bad performance in ways that are not possible under traditional public sector arrangements. 27. A few subsector-specific issues are worth highlighting. While segments of the water, sanitation, and solid waste subsectors may be privatized, public sector agencies and local governments will remain responsible for basic planning, contract management, and coordination in the foreseeable future. Lack of management autonomy is an important problem in these subsectors. It will be critical to provide the organizations responsible for these services with freedom from political interference so that they may operate with professionalism and financial soundness. In the drainage subsector, it is still necessary to sort out the responsibilities between the two levels of government and among agencies. In the urban transport subsector, despite the absence of both government regulation and limits on private sector entry, there are financial and institutional barriers to the placement in service of newer and larger urban transport vehicles and the improvement of transport terminals. The quasi-monopolistic control over vehicle operators (who are overwhelmingly private) and terminals by the transport unions is the most sensitive and difficult issue. The GOG is not yet prepared to intervene, but it has agreed to conduct studies of how to deal with these barriers. 28. Implementation of the government's decentralization policy (codified in the 1992 Constitution and in the Local Government Act of 1993) can bring the authority and responsibility for the provision of services closer to the people and make service delivery more effective. There should be continued support for these objectives. Specific measures include: (a) encouraging government to implement composite budgeting at the District level and providing assistance for testing and refining it; (b) improving the management performance of local governments as part of the civil service reform and through specific personnel management measures (such as personnel services contracts); (c) providing assistance to local Assemblies that wish to reorganize themselves and strengthen their capacity. Improving the Financing of Urban Services 29. Even with much improved collection of user charges, general tax revenues will still be needed to help cover the costs of urban services, especially to ensure that they reach vii the lower-income population. Central government transfers and foreign assistance will continue to pay for a major share of capital costs, but local governments will have to finance most operation and maintenance costs themselves. 30. The provision of technical assistance, training, and equipment is necessary but not sufficient to achieve improved revenue mobilization by local governments. Such assistance can produce short-term gains, but they tend not to be sustained. Improving urban finance requires a long-term view which recognizes that obtaining more revenue from local taxpayers is politically difficult and that the achievement of sustainable improvements in local revenue collection depends on developing incentives for local government politicians, executives, and staff to view themselves principally as providers of services to the public. As the public develops confidence in local government's responsiveness and competence, people's willingness to pay higher taxes will grow. 31. The property tax remains a major underexploited source of local revenue. The main challenge facing the Assemblies is to obtain the authority to perform their own periodic revaluations (so as not to have to wait for LVB to do it), to implement a yearly indexing system, and to better manage their billing and collection. There is also considerable potential for raising more revenues from local business taxes (licenses) by weeding out unproductive taxes and using cost-effective collection methods. 32. Assemblies should be given some discretion in the selection of capital projects financed by grants and foreign assistance. If the central government retains control over the choice of projects, DAs will not perceive them as "theirs," and the corresponding local revenue mobilization efforts for O&M will not be forthcoming. 33. To help improve the financing of O&M at the local level, the "earmarking" of O&M accounts in Assemblies' budgets can be promoted. Local governments should also start formally evaluating the current cost implications of proposed capital investments. 34. At present own source revenues do not cover recurrent expenditures even in the largest cities (except Tema). Achieving a surplus of locally-raised revenue over expenditure will be the first step toward financially sound operation and eventual creditworthiness. The creation of a special "urban development bank" or similar entity is not recommended at this time. Alternatively, local Assemblies that are consistently achieving budget surpluses could establish their own capital investment funds (which could be capitalized initially by grants) from which they could "borrow" and to which they could make regular repayments to demonstrate their creditworthiness. 35. Finally, measures should be taken to provide local Assemblies with the legal means to perform their own periodic property tax revaluations, to implement yearly property value indexing systems, and to better manage their billing and collection. Assemblies should also receive technical assistance for raising more revenues from local business taxes (licenses). ix Urban Environment and Land 36. GOG is in the process of establishing a national policy, regulatory, and institutional framework for environmental protection and management. Within the urban strategy, a high priority is to finance investments and institutional improvements in urban sanitation, solid waste, and drainage. In addition, urban land use planning and control systems should give high priority to the preservation of environmentally valuable areas and the siting of environmentally sensitive facilities. Public participation in environmental affairs should be encouraged through local governments and non-governmental organizations. 37. With regard to land use planning, one of the most effective measures that can be taken in the short to medium term is acceleration of modern land titling and registration, which has started but is proceeding slowly. A number of regulatory and administrative reforms have been recommended by Ghanaian experts to deal with other land issues; these should be taken up at policy-making levels. Simplified, enforceable,, and participatory systems for land use control need to be introduced, and an enabling environment for private sector land development created. "Infilling" the low-density areas will require removing obstacles to the buying and selling of land and releasing inefficiently used government-owned land for higher-intensity development. External Support 38. Over the next several years external assistance agencies could provide support for various elements of the above urban strategy. The table at the end of Chapter IX summarizes the suggested high-priority interventions which central and local governments could undertake, with support from international agencies. 39. In terms of investment in urban infrastructure and services, one of the highest priority areas is urban environmental sanitation (comprising storm drainage, sewerage/sanitation, and solid waste) in the major cities. These services have been relatively neglected, and their inadequacy is both a key environmental issue and a major problem for the urban poor. 40. Multilateral and bilateral assistance agencies have been and will continue to be heavily involved in urban water supply and urban transport. Follow-on assistance in these subsectors should be part of GOG's medium term financing program. 41. Upgrading of basic services (water supply, sanitation, access roads, lighting, drainage, etc.) in low-income urban communities is an important element of poverty alleviation. Upgrading components can be included in most multi-sectoral urban projects. The key challenge in upgrading is to involve the beneficiaries in planning, implementing, and sustaining the improved services. 42. These investments would be complemented with assistance aimed at reforming the institutional delivery systems to make urban services more efficient and sustainable. Policy X changes in would be discussed and agreed upon as necessary. Capacity-building measures would center upon the mobilization of Ghanaian expertise from public agencies, the private sector, universities, and NGOs. Community participation would be structured into the projects. Training would continue to be financed, but it would emphasize the utilization of local institutions and a demand-driven approach that is being piloted under the IDA-supported LGDP. 43. The larger urban centers will rightly demand priority attention because (a) they concentrate the bulk of present and potential urban economic activities; (b) they house the majority of the urban poor, and (c) they have the major urban environmental problems. However, the needs of the smaller towns cannot be neglected. These centers also play an important role in economic development and have serious deficiencies of basic services. Over the medium to long term, investment and capacity-building efforts must be allocated in a reasonably balanced way to larger and smaller towns. 1 I. INTRODUCTION A. OBJECTIVE 1.1 The objective of this Review is to help define a strategy which addresses the economic, poverty, capacity-building, and environmental dimensions of urban development in Ghana. In 1988, when the last urban sector study was carried out by the Government of Ghana (GOG) and the Bank,1 Ghana was barely beginning to recover from a deep economic crisis. Today Ghana's economy is growing, per capita income is rising, and prospects for the future are encouraging. Ghana's economic turn-around is placing increasing demands on its cities and towns, both to support economic development and to meet the needs of the expanding urban population. These pressures make it necessary to carry out a fresh assessment of urban strategy. B. PREPARATION OF THE REVIEW 1.2 This Review is the product of extended consultations with the sectoral ministries involved in urban development, various local Assemblies, and the private sector. Before the start of data collection, meetings were held with officials of the Ministries and Assemblies to obtain their views on the issues that should be addressed in the Review. Following this, an outline and work plan were prepared. Throughout the data gathering and analysis period, discussions were held with Ghanaian experts, civil servants, and others concerning the topics being addressed. Once this phase had been completed, but before the report was written, a series of seminars was conducted with top officials of the concerned central and local government bodies to review the preliminary findings and discuss recommendations. The Urban Strategy presented here reflects a consensus among the various participants. C. POLICY CONTEXT 1.3 The GOG is carrying out a national economic development strategy structured around the goals of accelerated economic growth and poverty alleviation, encompassing the following elements2: * Maintaining macroeconomic stability. * Establishing an enabling environment for more vigorous private sector participation throughout the economy. World Bank, 'Ghana: Reviving the Urban Sector", Report No. 7384-GH, July 1988. 2 See *Ghana-Country Policies and Bank Group Assistance Strategy' in World Bank MOP No. P-618 GH, March 23, 1994. 2 * Building and effectively using managerial and technical capacity in both the public and private sectors. * .Investing in social services (health, education) and basic infrastructure, with a focus on poverty alleviation. * Addressing key environmental issues, including water and sanitation, soil degradation, deforestation, and waste from mining. 1.4 The most important government policy related to urban development is the recent decentralization initiative. The key legal instruments governing decentralization are Chapter 20 of the 1992 Constitution and the Local Government Act (No. 462) of 1993. The decentralization policy assigns to Ghana's 110 District Assemblies (DAs) the responsibility for performing those functions previous handled by the local offices of 22 central government agencies. DAs are autonomous local governments with legislative and executive powers within their areas. DAs are empowered to prepare and approve their annual budgets, to raise revenues from taxes and fees, to borrow funds, to acquire land, and to provide basic services and local infrastructure. Districts with large cities are classified as Metropolitan or Municipal Assemblies and have somewhat more responsibilities. The Bank prepared a special study in 1992 on decentralization in Ghana3. 1.5 A Letter of Local Government Development Policy prepared by the Ministry of Local Government and Rural Development (MLGRD) in conjunction with the latest IDA- financed urban project emphasizes that: (a) DAs should eventually be able to employ their own staff accountable to them (the 1993 Local Government Act calls for the creation of a Local Government Service, and proposals for this are being studied); and (b) new revenues will be channeled to DAs specifically for capital investment through the District Assemblies Common Fund, and the DAs are to have discretion in selecting of projects to be financed. 1.6 In 1992-93, a task force composed of Ghanaian professionals from various disciplines prepared a report, "A National Strategy for Sustainable Human Settlements in Ghana". The effort was financed through UNDP and UNCHS. A number of consultation meetings were held on drafts of this paper. While not an official policy statement, the paper reflects a broad Ghanaian consensus on four basic elements of a settlements strategy: (a) Improving the economic performance of towns and villages; (b) Increasing access to basic services; (c) Improving the living conditions of the poor and vulnerable groups; and (d) Building human capacity for planning and management. D. EXTERNAL SUPPORT IN URBAN DEVELOPMENT 1.7 Foreign assistance agencies are supporting both capital investments in urban infrastructure and technical assistance for urban planning and management. The bulk of 3 World Bank, "Ghana: Strengthening Local Initiative and Building Local Capacity," Report No. 11369- GH, February 18, 1993. 3 the external capital funding is currently going into urban roads and urban water supply. IDA is the major financing agency in the urban roads sector at present. IDA is supporting road rehabilitation investments in the five main cities of Ghana through the Urban II Project and the new Urban Transport Project (UTP). The main projects in urban water supply are the Accra-Tema project (AfDB, Italy), District Capitals Water Supply (JICA, Italy), the Water Sector Rehabilitation Project (IDA, Austria, ODA), and the GWSC Assistance Project (CIDA). Upgrading of infrastructure in lower-income communities in Accra and Tema has received a limited amount of support through the Bank-assisted Accra District Rehabilitation Project (ADRP), the Priority Works Project (PWP), and Urban II projects. Urban sanitation and storm drainage have received little foreign funding (mostly minor works, except for the current rehabilitation of the Tema sewerage system under IDA's Urban II Project). 1.8 UNDP has been active in providing technical assistance, notably a 1988-1992 project which prepared a Strategic Plan for Greater Accra. UNDP and UNCHS, on their own and through the joint Urban Management Program (UMP), have been supporting during 1993-94 a process of policy-making and consultation on human settlements, decentralization, and urban infrastructure. KfW and GTZ have supported a project, which began in 1985 and is continuing, to strengthen the Accra Waste Management Department. ODA carried out a similar, more limited project during 1991-93 in Kumasi. 1.9 IDA's assistance has focused on the rehabilitation of urban infrastructure and services (roads, water supply, sewerage and sanitation, drainage, solid waste collection and disposal, markets, public transport, traffic management, and area upgrading) and on institutional strengthening, especially in cost recovery and municipal revenue mobilization. The first IDA-assisted urban project, ADRP (completed), covered Accra only. The PWP (completed), Urban II (under implementation), and the UTP (effective in 1994) have extended investments and technical assistance to the five main cities of Ghana (Accra, Kumasi, Sekondi-Takoradi, Tema and Tamale). In late 1994 a new IDA-assisted urban operation, the Local Government Development Project (LGDP), will be initiated. LGDP will support infrastructure upgrading and capacity building in 11 economically important secondary towns. The six IDA financed urban projects completed, underway, or about to start (including the four multisectoral urban projects and the transport and water projects) have a total value of US$422 million, of which IDA's participation is US$251 million. 1.10 The housing sector in Ghana has received limited attention from IDA. A Housing Sector Review was carried out in 19904. This study concluded that major efforts are needed to deal with severe distortions in the Ghanaian housing market and housing finance system. Some of the recommendations have been taken up through a Pilot Housing Finance Subproject that is currently being implemented under the Urban II Project. World Bank, "Sustaining the Structural Adjustment Program: A Shelter Strategy for Ghana'. Report No. 8099-GH, June 1990. 4 II. URBAN ECONOMY AND POPULATION 2.1 Economic development is bringing about significant structural changes in Ghana. A declining economy has given way to real per capita GDP growth. The nation's economic base is shifting away from almost exclusive dependence on rural- based primary activities to a more diversified structure. These changes are generating a steady increase in the share of Ghana's urban population. The increasing role of urban centers in the national economy, their expanding needs for infrastructure, and the problems of the urban population have become important development issues. Even though urban dwellers have relatively higher incomes on average than rural people, the urban population includes a large share of individuals whose economic opportunities are limited to low-productivity activities in the informal sector. A. ECONOMIC DEVELOPMENT AND URBANIZATION 2.2 During the period 1965 to 1986, Ghana's real per capita gross national product (GNP) declined at an average annual rate of 1.5 percent per year. Total investment declined, as people sought to maintain a minimum level of consumption in the face of falling incomes. Gross fixed capital formation declined from roughly 11 percent of GDP at the beginning of the 1970s to 6 percent in the early 1980s. The package of economic reforms initiated in 1983 has contributed to a turn-around in Ghana's economic performance. Since 1986, real GNP per capita has been growing at around 1.5 percent per year. The share of investment in GDP is estimated to have increased from 11 percent in 1988 to 16 percent in 1994. 2.3 About half of Ghana's total GDP is non-agricultural, in industry and services. These largely urban-based sectors of the national economy have been the most dynamic. Between 1980 and 1994 the average annual growth rates of the industry and services sectors were about 4 percent and 7 percent respectively, while that of the agriculture sector about 1 percent. Barring an unexpected economic downturn, the contribution of urban areas to the economy as a whole is likely to increase. While improved economic growth in Ghana over the medium term future will depend in large part on achieving higher agricultural production and exportsi, growth of the agriculture sector is likely to foster the development of urban-based activities linked to it, such as the processing of wood and other products, the transfer and storage of farm outputs, and the provision of commercial and financial services. Ghana's current drive to promote new investment, both foreign and domestic, would also contribute to the development of new manufacturing enterprises (catering to both the export and domestic markets) in urban areas. 2.4 Comparative country data show that economic development and urban growth are closely linked, owing to the consistently higher productivity of the urban-based 'Republic of Ghana Country Strategy Paper", World Bank, June 1993. 5 sectors, and that urbanization increases with economic growth more rapidly at lower income levels than at higher ones2. Ghana, with a per capita GNP of about $450 (1992) and about one-third of its population urbanized, has a substantially smaller portion of its national economy in non-agricultural sectors than other countries with similar income and urbanization levels (see Table 2.1). This suggests that, as Ghana's national economic performance continues to improve, the share of urban-based economic activities are likely to grow considerably faster than in the past. Table 2.1. Urbanization and Economic Indicators for Ghana and Selected Countries, 1992 Shares of GDP (%) Country GNP/ Population % Urban Industry Industry Services Capita (millions) Population plus Services (US$) Kenya 310 25.7 25 73 '19 54 Nigeria 320 101.9 37 63 38 25 Togo 390 3.9 29 64 21 43 Benin 410 5.0 40 63 13 50 Pakistan 420 119.3 33 73 27 46 Ghana 450 15.8 35 51 16 35 Guinea 510 6.1 27 68 32 36 Mauritania 530 2.1 50 71 27 44 SriLanka 540 17.4 22 74 25 49 Zimbabwe 570 10.4 30 78 35 43 Source: World Development Report, World Bank. 2.5 The Greater Accra Metropolitan Area (GAMA) includes the Accra, Tema, and Ga Districts. It covers an area of 1,079 km2, and its urban area consists of the cities of Accra and Tema. GAMA accounts for 15 percent to 20 percent of GDP and employs around 10 percent of the national labor force (one third of the national urban labor force)3. Recent employment data are not available, but the 1984 census indicated that 64 percent of GAMA's workforce was in the service sector (including trade and government), 25 percent in industry, and 11 percent in agriculture. Women comprised 49 percent of the labor force, working primarily in the wholesale and retail trade and service sectors. Accra and Tema house the majority of Ghana's industries, from micro-enterprises to large plants. Tema is Ghana's primary port, handling about three quarters of all goods shipments (the remainder goes through the port of Takoradi). In addition, major financial institutions, government ministries, parastatals, and multinational corporations have their head offices 2 See, for example, Edwin Mills and Charles M. Becker, Studies in Urban Developmen Oxford University Press, 1986. 3 Department of Town and Country Planning, "Strategic Plan for the Greater Accra Metropolitan Area,w December 1992. 6 in Accra. Accra's primary market linkages (as both a purchaser and seller) are with Kumasi in the Ashanti region and Sekondi-Takoradi in the Western region. 2.6 Ghana's secondary towns, with little or no industry, function mainly as centers for the provision of marketing, administrative, and commercial services to their rural hinterlands. The trade linkages of the second and third tier of urban centers with major cities like Accra, Kumasi and Tema tend to be limited and sporadic. For the most part traffic between the smaller towns and the first ranked cities is determined more by geographical location and the condition of connecting roads than by economic interdependence4. B. URBAN POPULATION TRENDS 2.7 Economic growth in Ghana is bringing about a transition from a predominantly rural to a quasi-urban society. Over the past three decades, Ghana's urban population5, estimated at 5.5 million in 1992, has consistently grown at a higher rate than the national population (see Table 2.2). The level of urbanization-the proportion of total population living in urban areas-rose from 26 percent in 1965 to 35 percent in 1992. The total population of Ghana is projected to reach 20 million by the year 2000 (see Table 2.3). If the growth of the urban population is assumed to remain constant, population in urban areas in the year 2000 would be nearly eight million, constituting about 38 percent of the total population. 2.8 Ghana has a modest urban growth rate compared with other countries at its income level. Over the period 1980-92, the urban population grew at 4.3 percent per annum, while total population grew at 3.2 percent over the same time period. Comparable average rates of urban population growth are 5.0 percent in Sub-Saharan Africa and 4.7 percent in all low income countries. Even so, Ghana's current urban growth rate would produce a doubling of the urban population in 16.5 years. The country acquires roughly 277,000 new urban dwellers each year, which is the equivalent of adding a city the size of Kumasi every three years or four cities the size of Cape Coast each year. 2.9 There are approximately 185 urban settlements in Ghana, with the capital, Accra, accounting for about one quarter of the urban population. The two largest cities, Accra and Kumasi, together contain about 35 percent of the urban population, while the five largest cities (Accra, Kumasi, Tema, Sekondi-Takoradi and Tamale) account for about 44 percent of the total (see Table 2.4). Regionally, about 60 percent of the urban population is concentrated in the Greater Accra, Ashanti and Eastern regions, all three of which are located in southern Ghana. Of the remaining urban population, 36 percent is more ore less evenly distributed over the Western, Central, Volta, Brong-Ahafo, and Northern 4 See Ministry of Local Government and World Bank, 'Preparation of Development Plans and Infrastructure Programmes in Selected Towns," Volumes I and 2, The Consortium, February 1993. Urban centers in Ghana are officially defined as those with populations of 5,000 or more. 7 regions, while four percent is found in the two least urbanized regions, Upper West and Upper East. 2.10 There are major differences in economic functions between the larger cities and the secondary towns. The main cities of Accra, Kumasi, Tema, and Sekondi-Takoradi have diversified economies. Tamale, the main city in the north, and the medium and small towns around the country are market, service, and administrative centers which have grown up in response to the needs of the surrounding agricultural areas. During the past decade, the medium and small urban centers have been growing at a faster rate than the five main cities (see rates in Table 2.4). This reflects both the smaller absolute base of growth in the smaller centers and a tendency for migrants to move to Regional and District capitals, not just the major cities. C. THE URBAN INFORMAL SECrOR 2.11 The informal sector- defined as enterprises which are very small, are not registered, and have a low level of physical assets- plays an extremely important role in the urban economy. An ELO/JASPA study6 estimated that the informal sector absorbs nearly 80 percent of the annual increase in the urban labor force. Within GAMA, the informal sector was estimated to employ about 40 percent of the labor force, mainly in wholesale and retail trade, manufacturing and agriculture. In 1989, informal sector enterprises generated 22 percent of the Accra Metropolitan Assembly's total revenue and 82 percent of its total income for licenses and fees. Around 60 percent of informal activities operate out of stalls, kiosks and street side open spaces7. 2.12 The informal sector is diverse in its income structure and income generating activities. It is dominated by one-person firms and small-scale entrepreneurs. Informal enterprises can be subdivided into four subsectors: petty commodity production and services, petty trading and related services, small scale construction, and transport. The firms and entrepreneurs are not covered by government labor regulations, and there are no restrictions on entry or exit. This leads to stiff competition, low profit margins and a high turnover of units. It is noteworthy that despite being classified as informal, most of these enterprises pay fees to the local government. Most of the sector's production is for consumption, especially by low income households. The sector is dominated by women, who are estimated to account for around two thirds of total informal employment. 6 ILOjASPA, Informal Sector in Africa,. Adis Ababa, 1985. 7 Strategic Plan for the Greater Accra Metropolitan Area,' op. cit. 8 Table 2.2 Ghana: Urban and Total Population Growth Rates (% per Annum) 1950-60 1960-70 1970-80 1980-92 Urban 10.1 4.8 2.9 4.3 Total 4.4 2.4 2.2 3.2 Source: Ghana Statistical Service; World Development Report, World Bank. Table 23. Ghana: National Urban Population Projection, 1992 - 2000 (Millions) Total National Five Other National Urban Largest Urban Population Population Cities* Centers Annual Growth Rate % 3.2 4.3 3.8 4.6 1992 15.800 5.530 2.426 3.104 2000 20.328 7.745 3.279 4.466 Note: Growth rates based on 1980-92 trends. Source: Ghana Statistical Service; Department of Town and Country Planning. * See Table 2.4. Table 2.4. Ghana: Population Estimates for Five Largest Cities (Thousands) Sekondi- Accra Kumasi Takoradi Tema Tamale District Assembly Area (Km2) 241 168 790 163 241 Estimated Built-Up Urban Area 95%. 80% 20% 60% 40% Urban Area (Km2) 230 135 160 100 100 District Assembly Population: 1993 1,410 616 187 320 265 2000 1,842 737 195 459 378 Urban Population:* 1993 1,339 524 140 304 225 2000 1,750 626 146 436 321 *Portion of the total District population living in the urban built-up area. Source: Ghana Statistical Service; Department of Town and Country Planning. 9 2.13 Two surveys of medium and large scale manufacturing enterprises and of micro and small scale enterprises, carried out in 1989, indicate that new firms, those started since 1983, have entered relatively high growth activitiess. These newer, more dynamic firms account for nearly half the micro-enterprises sampled were established since 1983; and around 40 percent of the very small and small enterprises surveyed. Domestic small firms are cited as the leading source of competition by large scale firms, despite import liberalization. The individual entrepreneurs in the informal sector provide the breeding ground from which successful firms emerge. The main constraints on this sector are lack of access to resources, inadequate infrastructure services combined with the inability to invest in self-provision, lack of market information, inadequate managerial skills, and an uncertain business climate. 2.14 The informal sector has a dominant role in housing production. During 1974-80, the national housing stock grew at the rate of 1.8 percent per annum, while that of Accra grew at 3.7 percent. The public sector over this period accounted for no more than 10 percent of total output, and the formal private sector contributed no more than a few hundred new units per year9. Formal sector housing production has, not substantially increased since then; thus it is the informal sector that is supplying the bulk of new housing. D. CONCLUsioNs 2.15 Urban-based economic activities in Ghana already account for about half of GDP. Moreover, they are growing considerably faster than rural-based ones, and this trend is likely to continue. This means that the ability of cities and towns to support economic development will become increasingly constrained by inadequate infrastructure and services. Urban centers provide spatial efficiencies and concentrations of public services that promote economic growth. The importance of urban development and urban economic growth in Ghana are recognized by the GOG and the World Bank. While some progress has been made in the past decade to relieve some of the most critical deficiencies in urban infrastructure and services, major physical deficits and institutional problems remain to be addressed. For Ghana to meet its objectives of accelerated growth and improved living conditions, its cities and towns must be able to provide substantially higher levels of infrastructure and services, must be managed more efficiently, and must offer a more supportive environment for private investment. Paul W. K.. Yankson, 'Urbanization and Employment Generation in Ghanaian Towns: A Comparative Study of the Role of the Informal Sector in Tamale and Tema," Study Report No. 5, Union for African Population Studies, Dakar, November 1992. 9 World Bank, 'Ghana Housing Sector Review," Report No. 8099-G, June 1990. 10 III. DEALING WITH CONSTRAINTS FOR URBAN PRODUCTIVITY 3.1 Adequate urban infrastructure and services, a supportive urban policy framework, and good institutional capacity are essential components of the enabling environment for the growth of the urban economy and the welfare of the urban population. In Ghana, inadequate infrastructure facilities and public services hinder the formation and growth of firms by increasing the cost of doing business, limiting access to markets, and reducing efficiency. Urban productivity is also hampered by low-density urban sprawl, which increases the costs of infrastructure and travel time. This can be addressed by reducing the restrictions on buying, selling, and redeveloping underutilized urban land. Concentrations of small and micro enterprises in urban areas provide thousands of jobs and serve as incubators for the growth of firms, but these areas lack most basic services and are at risk from ill-conceived relocation schemes. Infrastructure upgrading for such areas would be beneficial. In the medium to longer term future, the development of industry will be constrained unless measures are taken to facilitate the availability of land and services for industries. At the household level, improved road access and sanitation would contribute to raising the low productivity of the urban poor. 3.2 The term "urban productivity" refers to the productivity of firms and households in urban areas. Constraints on the full utilization of their productive potential may be grouped into several categories, such as (a) infrastructure deficiencies, (b) inappropriate regulations (e.g., governing land use or the activities of the private sector), (c) inadequate institutional arrangements, and (d) ineffective financing mechanisms (which depend largely on the extent of capital market distortions). Identifying such constraints provides a basis for policy reform and project intervention. This chapter will focus mainly on the first and second categories. Institutional problems are covered in Chapter V. Financial market issues are beyond the scope of this report but are analyzed elsewhere.' A. COVERAGE AND QUALITY OF URBAN SERVICES 3.3 Deficient urban services-water supply, sanitation, urban roads, and others-is a major problem for urban productivity in Ghana. This section reviews the coverage and quality of urban infrastructure and services for each subsector. Mobilizing more capital for investment in urban infrastructure certainly is a major aspect of the solution, along with using financial and institutional resources more efficiently (see Chapter V). Investment cost estimates for meeting "bulk" and "local" urban infrastructure needs to the year 2000 have been made (see Annex 1). The requirements are, of course, enormous: the total capital needed for bulk urban infrastructure amounts to roughly $2,150 million. This I See World Bank, *Ghana Financial Sector- Missing Links between Savers and Investorse, Report No. 13423-GH, August 1994. 11 comes to about $300 million per year, which is about double the GOG's total estimated development expenditure for 1993. 3.4 In this regard, the tremendous importance of design standards needs to be emphasized. The use of appropriate, low-cost standards, as opposed to conventional industrialized-country standards, can multiply the effectiveness of investment between two and five times. As shown in Annex 1, investment requirements for local infrastructure range from $117 per capita for minimum basic services at high density to $530 per capita for full services at low density. Water Supply 3.5 The Ghana Water and Sewerage Corporation (GWSC) estimates that, currently, about 75 percent of the urban population is covered by piped water systems, down from a high of over 90 percent in the late 1970s. Total production capacity from piped systems equals around 85 liters per capita per day, but about 50 percent of this water is lost or unaccounted for. Some 30 of the 110 District capitals still lack a formal water supply system. The five main cities of Ghana (Accra, Tema, Kumasi, Sekondi-Takoradi, and Tamale) all suffer from insufficient quantities of treated water, although it appears that the water that is produced is generally of acceptable quality. Three large-scale piped water supply schemes (supported by IDA, AfDB, and CIDA) are currently on-going at an estimated cost of $222 million, covering 87 systems responsible for over 80 percent of GWSC's production capacity. Sanitation 3.6 Tema is the only urban center in Ghana with a comprehensive waterborne sewerage system (though presently it has no treatment, with sewage discharged directly to the sea). The IDA-supported Urban H Project is rehabilitating the system, which has fallen into disrepair. The central part of Accra has a limited waterborne sewerage system to which very few properties are connected and which also has fallen into disrepair. The sea outfall has long ceased to function, and sewage is discharged close to the beach in central Accra. The smaller town of Akosombo also has a waterborne system, but all other urban centers in Ghana rely on on-site excreta disposal systems. 3.7 Only about 40 percent of the urban population is estimated to have access to some form of household sanitation facility. Of these, a small minority have flush toilets (almost all connected to septic tanks), most have pit latrines, and a significant proportion use the unsanitary pan or bucket latrines (whose contents must be disposed of manually each day). Around 45 percent of the urban population relies on public toilets. The remainder have no sanitation facility at their disposal. The few disposal facilities for liquid waste (stabilization ponds) that exist in the major cities are inadequate and in poor condition. Most of the waste goes directly into storm drains, lagoons, or the sea. 12 Urban Roads 3.8 GOG has given high priority to investment in urban roads over the past decade, particularly in the five main cities. This was necessary to counter the severe deterioration that arose from deferred maintenance throughout the 1960s and 1970s and to accommodate the significant increases in traffic. In Accra, a motorway enabling traffic from Tema, the main port, to bypass the center of the city has been constructed and several of the main arterial roads have been rehabilitated. Virtually all of the main roads in Kumasi were reconstructed in the late 1980s after having deteriorated to the point of failure, and a similar project has been embarked upon in Tamale. Key roads in the central business districts of Accra and Sekondi-Takoradi will be rehabilitated soon under the World Bank-funded Urban Transport Project. 3.9 Under the Accra District Rehabilitation Project, traffic management studies were carried out in 1987-88 in the five main cities to identify and prioritize necessary road and traffic management improvements. Five-year and ten-year improvement programs, which were prepared for each city, have provided the basis for recent investments. The IDA- financed Local Government Development Project (LGDP) will support some key road rehabilitation investments in eleven Regional and District capitals. Future medium-term interventions in the urban roads subsector should focus on carefully selected road improvements and traffic management measures with high economic rates of return. A further priority is the improvement and provision of access roads for lower-income urban communities as part of integrated infrastructure upgrading programs. Storm Drainage 3.10 None of the Ghana's urban centers has a comprehensive storm drainage system. Haphazard urban growth over the past decades has produced a situation characterized by tertiary drains which are not properly connected to main drainage channels and physical development in low-lying, flood-prone areas. Flooding, with related building and personal property damage and traffic disruption, is a regular occurrence in urban areas during the rainy season. A study carried out in Accra in 1991 found that flooding affects around 17,000 people annually, causing damage to buildings and personal property. The poor are affected most, because they have settled in the least desirable locations in low lying areas adjacent to drains and water courses, where land is cheap or has been informally settled. Garbage, sullage, and sewage are commonly deposited in drains, creating a health hazard along the course of the drains and polluting the waters into which they discharge. In the southern cities, receiving waters often form part of sensitive coastal wetlands. Capital works and major maintenance tasks, such as dredging of water courses, are funded mainly from foreign assistance. While a significant amount have been invested in roadside drainage in the major cities as part of road upgrading projects in recent years, primary and secondary drainage has received little financing. 13 Urban Electricity Supply 3.11 With the recent extension of the national grid to the north of the country and the connection of Tamale, all of Ghana's five main cities have access to a stable power supply. However, many of the smaller towns, including some District capitals, do not have access to any sort of supply. The Volta River Authority (VRA) is the power generating entity in Ghana. VRA owns the two hydroelectric stations on the Volta River at Akosombo and Kpong which account for about 95 percent or 1,072 MW of Ghana's 1,122 MW total generating capacity. The Electricity Corporation of Ghana (ECG) distributes power in the urban centers located within an interconnected grid in the southern part of the country. 3.12 A long term (30 year) goal of the Government is to provide electricity for all through the National Electrification Program. The focus to date has been on the District Capital Electrification Program (DCEP), which aims at connecting all the 110 District capitals, and on the Self Help Electrification Program (SHEP), under which villages and towns along supply routes and surrounding areas of the District capitals are served. To date about 20 District capitals have been connected in addition to 60 other towns on supply routes. About 180 towns and villages have been connected to the national grid under the SHEP. 3.13 The total generation requirement is currently about 6,422 GWH and is forecast to increase to 7,544 GWH by the year 2000. The present capacity of 905 MW is adequate, but 400 MW additional capacity will be required by the year 2000 to meet the forecast load. Ghana has benefited from seven power projects supported by IDA and others. Service deterioration that has occurred in the distribution system in recent years is being addressed under the fifth project. Under the latest power project, the National Electrification Project, further support is being given to VRA and its Northern Electricity Department in the VRA/NED service area (north of the country) and to ECG for transmission and distribution in its service area (remainder of country). Telecommunications 3.14 Telecommunications in Ghana are generally poor, and the country has a very low telephone density (0.3 lines per 100 people). The existing facilities are inadequate for the present level of economic development, and their distribution is unbalanced. The telephone service that is available is concentrated in the ten regional capitals, which account for about 75 percent of the total direct exchange lines (DELs) but only about 20 percent of the population. The DEL density is 0.6/100 in urban areas and 1.6/100 in Accra. 3.15 GOG is aware of the need for a well-functioning telecommunications network as being strategically crucial to the success of the economic recovery program (ERP). The quality of service and its operational efficiency are being improved through a program that includes network rehabilitation and expansion, installation of an effective operations and 14 maintenance program, and ensuring that existing assets are optimally utilized through the installation of complementary assets. 3.16 The IDA-supported Second Telecommunications Project is underway, and the Ghana Post and Telecommunications Corporation has also received considerable assistance from the Japanese government. Under the IDA project, upgrading of lines, exchanges, and cables, as well as some expansion, are to be carried out in Accra, Kumasi, Tema, Sekondi-Takoradi, Tamale, Koforidua and Cape Coast. A Telecommunications Master Plan has been prepared for the period 1987-2006. The target density for the year 2000 is 1 DEIJ100 people, a tripling of the current level. It is hoped that about 85 percent of the year 2000's forecast demand of around 185,000 lines can be met. The costs of implementation of the plan up to 2000 are estimated at approximately $560 million. In 1994 GOG announced the adoption of a new telecommunications policy under which private companies will be invited to bid on concessions for upgrading telecom facilities and providing services. Solid Waste Colection and Disposal 3.17 Solid waste management is entirely a local government service. Collection ratios (waste collected/waste generated) in the five main cities are well below desirable levels: Accra 67 percent; Kumasi 45 percent; Tema 59 percent; Sekondi-Takoradi 42 percent; and Tamale 13 percent2. The Accra and Kumasi Waste Management Departments provide a limited degree of house-to-house collection services in some of the lower-density, higher-income areas. In Tema's "Township" (planned city) area, rubbish is collected adequately by curbside pickup; however, no solid waste services are provided in Tema's lower-income areas. A significant share of the solid waste collection in Ghana's major cities is through communal containers and lift vehicles. Much of the collection, however, is limited to the sporadic clearing of neighborhood dumps by manual labor and tipper trucks. This is the norm in the secondary towns. In all urban centers, heaps of uncollected rubbish are found in and around built-up areas, especially lower-income communities. As mentioned earlier, rubbish dumping is a major cause of blocked storm drains. 3.18 Inadequate rubbish disposal is one of the main urban environmental problems in Ghana. In the main cities, waste is deposited at large open dumps located in fringe areas, sometimes very close to residences. None of the dumps is operated as a proper sanitary landfill. To date, no special methods have been applied for the disposal of hospital, industrial, or other specialized solid waste. 3.19 The central government or external agencies may pay the initial investment costs of new disposal sites or collection vehicles, but the sustained delivery of solid waste services depends on the level of recurrent costs that can be borne at the local level. Thus, 2 Aca and Kumasi figures from the respective Waste Management Departments, other figures from Asafo- Boakye & Partners/BCEOM, Preparation of Waste Management Projects in Sckondi-Takoradi, Tamale, and Tema,* Ministry of Works and Housing, March 1993. 15 the potential for improvement of solid waste services is a function of the ability and willingness to pay of both households (through user fees) and the local Assemblies (through general local taxation). The specifics of these issues are addressed in Chapter V (Section C) and in Chapter VII. Urban Transport 3.20 Urban transport in Ghana is exclusively road based, and the vast majority of travelers rely on motor vehicles, though in response to economic pressures increasing numbers are using non-motorized transport or are walking. With the high growth of urban centers over the past two decades, Ghana's urban road networks have been placed under great stress. Capacity overloads already constrain both the efficiency and productivity of the urban economy, and the situation is being exacerbated by the large number of vehicles imported in recent years. Traffic congestion is now ubiquitous throughout Accra and is also a problem in the centers of Chums and Sekondi-Takoradi. The national vehicle fleet has grown at an average rate of 19 percent per annum since 1984. Between 1987 and 1990, traffic flows increased by about 10 percent per annum, and sample surveys suggest that delays increased at an even greater rate. Average peak hour speeds in 1990 were about 15 km. per hour in the center of Accra and below 10 km. per hour on certain critical links. Surveys have also indicated that in 1987 more than 76 percent of all motorized passenger trips were by public transport (taxis, tro-tros and buses). However, large buses carry less than 10 percent of the total, while taxis increased their share from around 25 percent in 1987, to 32 percent in 1990.3 3.21 The overall quality of public transport is poor. Most vehicles are old, many are converted trucks, and maintenance standards are low. There appears to be a sufficient number of vehicles to meet demand, with low-capacity vehicles such as taxis and minibuses predominating and increasing their share of the market. This is of concern because small vehicles carry fewer passengers per standard unit of road space than larger buses and therefore exacerbate traffic congestion. Public transport and freight terminals, commonly referred to in Ghana as lorry parks, serve all forms of vehicles from private cars and taxis to multi-axled trucks. Few are paved and there is no clear demarcation between access roads, bus parking spaces, and passenger waiting areas. There is little shelter for passengers, sanitary facilities are primitive, and refreshment facilities rudimentary. Generally, the terminals have sprung up near markets and at major intersections in an ad- hoc manner, with little account taken in their siting of the impact of the vehicle and pedestrian traffic they attract. Lack of planning also results in vehicles following disruptive cross city routes and passengers having to change vehicles to reach their destinations. 3 Data primarily from Ross Silcock Partnership and COMPTRAN Engineering and Planning Associates, 'Urban Transport Policy Action Programme,' Ministry of Transport and Communications, 1992. 16 3.22 Ways of improving urban public transport services are discussed in Chapter V, Section F. B. INFRASTRUCTURE COSTS AND LAND USE PATrERNS 3.23 An important aspect of urban productivity is the degree to which infrastructure and services are provided in response to the locational patterns of population and employment in an urban area. Understanding the extent of any "spatial mismatches" in this sense is necessary for planning urban development and future infrastructure investment. 3.24 For the analysis of locational patterns of population and employment, GAMA was divided into four concentric rings, based on the boundaries of 56 neighborhood areas used by the Town and Country Planning Department. Table 3.3 shows that between the years 1970 and 1991, there was a clear decentralization trend of population from the central city to outer areas. According to the Town and Country Planning Department, approximately 60 percent of new residential development in Accra takes place in the peripheral areas north of Kwame Nkrumah Motorway (i.e., in Achimota and beyond), 30 percent in the middle area between the Ring Road and the Motorway, and 10 percent inside the Ring Road. Table 3.3. Ghana: Decentralization Trend Of Population in Accra, 1970 - 1991 1970 1991 Average (000) (000) Annual Growth Population Percent Population Percent Rate % gI 77 12.1 1267 9.5 2.4 Ring II 81 12.8 118 8.9 1.8 Ring I 419 65.8 886 66.4 3.6 Rg IV 60 9.4 204 15.3 6.0 Total 637 100.0 1335 100.0 3.6 Note: Ring 1: Central Business District (CBD) Ring I: Remaining area within Ring Road Ring : Between Ring Road and Motorway Ring IV: Beyond Motorway Source: The population figures for 52 small areas for 1970 are from "Demographic Studies and Projections", by G. Benneh et al, Department of Geography, University of Ghana, 1990; the 1991 figures for 56 small areas are from the Town and Country Planning Department; geo-coding prepared for this Review. 3.25 Accra has three areas zoned as industrial: the Ring Road West industrial area, a newly developing industrial corridor at Nsawam Road to the north, and the Motorway Industrial Zone toward Tema. Both the north and south industrial areas at Ring Road West have been filled up, with about 100 establishments in the north and about 60 in the 17 south. Most of these are medium and large scale operations established in the 1960s and 1970s. 3.26 Table 3.4 shows the locational distribution of manufacturing establishments by size in Accra (based on 1987 data). Two thirds of manufacturing establishments are located in Ring III (between the Ring Road and the Motorway), reflecting the heavy concentration of manufacturing activities in the northern part of the Ring Road West Industrial Area. There is also a heavy concentration of manufacturing in the central business district (CBD) and its vicinity, indicating the presence of the "incubator" function provided by the central area (discussed below). 3.27 Business offices are moving to the northeast in the Ridge and the Airport residential areas. Commercial activities are decentralizing along all major roads, to the northwest along Winneba Road, to the north along Nsawam Road, and to the northeast along Independence Avenue. Table 3.4. Ghana: Location Distribution of Manufacturing Establishments b Employment Size in Accra, 1987 . Less Than 50 More than 50 Total Number Percent Number Percent Number Percent Ring I 35 10.4 19 14.7 54 11.6 Ring I 67 19.8 20 15.5 87 18.6 Ring 1 208 61.5 89 68.9 297 63.6 Rg IV 28 8.3 1 0.8 29 6. Total 338 100.0 129 100.0 467 100.C Source: Industrial Census 1987; geo-coding prepared for this review. 3.28 Accra's core CBD consists of the old colonial era residential areas, which are now inhabited by lower income families, and the offices of government agencies and financial institutions. Despite the somewhat deteriorated physical conditions in the residential parts of the CBD, the area around the "December 31 Women's Market" at Makola Square and the areas along Kojo Thompson Road leading to the Adabraka area have a high density of small-scale economic activities. The Accra Strategic Plan calls for the CBD to be developed as a higher-density financial and commercial center. Encouraging signs of renewal in the CBD include the opening of the Novotel hotel five years ago, the clearance of a nearby site for a new City Hall, and the current renovation of the Ambassador Hotel. A new five-star hotel is under construction, and two seven story office buildings are to go up in this area. 3.29 Most private residential construction in Accra takes place on an individual basis. Land use planning and building controls exist, but are generally not enforced. The majority of dwelling units recently constructed in the fastest-growing peripheral areas (e.g. Achimota and beyond) lack piped water connections, road access, and other urban services. Individual builders must provide these services on their own, if costs permit. The on-site infrastructure costs of housing in newly developing areas account for about 30 18 percent of the total construction cost of higher-cost residential units. There are additional off-site costs to be incurred such as water mains, access roads, and electric power transformers and poles. The need for builders to pass such costs on to house buyers raises the price of housing and helps to keep formal housing out of the reach of low and middle income families. 3.30 The development of new commercial or industrial sites is similar. The individual entrepreneur is responsible for the provision of all on- and off-site infrastructure. Developers estimate that the on-site infrastructure costs alone can be 50 percent of the total setup costs of a manufacturing establishment. The tendency is, therefore, for new small manufacturing activities to start as home-based business in the residential areas. 3.31 While residential and commercial development is occurring rapidly in the peripheral areas of Accra, where there are few or no urban services, a large portion of the already built-up area of the city, where infrastructure exists, is underdeveloped. These very low-density areas typically consist of large plots with old, single-family villas, colonial-era government offices and bungalows, and other public buildings. In principle, if these areas were developed at higher urban densities, the existing infrastructure-roads, water systems, electricity lines, etc.-could be used far more efficiently, and the need for new trunk infrastructure in the periphery could be greatly reduced. According to the Strategic Plan for Greater Accra (1992), the potential "infill" area could accommodate 18,000 housing units. 3.32 In addition to raising development costs, urban sprawl increases commuting time and its direct and indirect costs. People reliant on public transport reportedly may have one-way journeys up to two and a half hours long: Densification or infill does not need to be limited to residential land use. The development of employment nodes within and along the Ring Road would also contribute to a more efficient urban economy. C. INFRASTRUCTURE CONSTRAINTS ON MICROENTERPISES 3.33 According to the 1987 Census of Industrial Enterprises, there were 8,351 manufacturing establishments with 10 or more employees in Ghana, of which 92 percent were small-scale (having less than 30 employees). There were a total of 668 medium and large scale establishments, of which only 216 had 100 or more employees and 52 had 500 or more. About 25 percent of the medium and large establishments belonged to the Government. While the size distribution of firms in the 1987 Census is skewed to the small scale, it omits establishments with less than 10 employees. According to an LO study,4 the informal sector provided 74 percent of the total non-agricultural employment in Ghana and 65 percent in Kumasi in the mid 1970s. It is estimated that over 300,000 persons are employed in the informal sector in Accra. The informal sector contributed 82 percent of Accra's total license fees collected and 22 percent of total revenue in 1989. 4 ILOIJASPA, "Informal Sector in Africa', Addis Ababa, 1985 19 3.34 Research on large cities such as Bogota, Seoul and Bangkok5 has shown that when a small entrepreneur starts a new manufacturing business, he or she tends to locate in the central area of the city (including the CBD) where all necessary services are readily available, including skilled labor, utilities, transport, financial and government services, easy access to markets, and shared repair and delivery services. Such an area offers the "incubator" function for small new businesses. As these small firms grow and expand, space and infrastructure constraints become more significant, and they tend to move outward in the city where more space is available. But when they relocate, they tend to move a short distance, less than two kilometers at a time. Evidence from large cities in both developed and developing countries shows that from 60 percent to 80 percent of new jobs are created by newly established small firms that tend to locate in the central city. 3.35 Accra's core CBD (near the December 31 market and the areas along Kojo Thompson Road leading to Adabraka and vicinities) shows the type of vitality characteristic of incubation areas elsewhere. The proposal to relocate the December 31 Women's Market to the Lagoon area along Abose-Okai Road should be reconsidered, to avoid destroying a productive concentration of economic enterprises. Traffic management improvements could address the congestion problems in the area and enhance its economic efficiency. 3.36 In Ghana's larger cities there are various areas where large numbers of microenterprises cluster in a single location. These include Odorna in Accra, Suame Magazine in Kumasi, and Kokompe in Accra and Sekondi-Takoradi. During the economic downturn in the 1970s and in the subsequent adjustment period, these areas, attracting distressed but innovative and industrious small entrepreneurs, survived and grew with no governmental support. During these difficult times, such areas have served as a substitute for the "incubation areas" found in cities elsewhere. The 11 largest informal industrial areas in Accra, Tema, Kumasi, Sekondi-Takoradi, and Tarale contain several thousand small-scale enterprises engaged in auto repairs, machine tool cutting, drilling, welding, paint and spray work, electrical work, fabricated metal work of all kinds, and many other businesses 6. The microenterprises typically have a "master" and three or four apprentices and occupy a small plot (40 by 80 to 60 by 120 feet). 3.37 These informal industrial areas began as clandestine (i.e. squatter) activities. Some are located on marginal lands with poor access and bad drainage. Roads tend to be unpaved, and the road space is used inefficiently. Although electricity is available, distribution and transmission facilities are inadequate. Water connections are limited and need to be extended.. The water standpipes used by many tend either to promote waste or 5 KS. Lee, An Evaluation of Decentralization Policies in Light of Changing Location Patterns of Employment in the Seoul Region," World Bank Discussion Paper No. UDD-60, 1985; K.S. Lee, The Location of Jobs in A Developing Metroolis: Patterns of Growth in Bosota and Cali. Colombia. Oxford University press, 1989; and K.S. Lee, "Spatial Policy and Infrastructure Constraints on Industrial Growth in Thailand,' Review of Urban and Regional Development Studies Vol. 4, 1992. 6 Kwame Young-Gyampo, 'Support for Analysis of Infrastructural Constraints on Urban Industry-, John Young and Associates, World Bank, 1993. 20 to result in higher bills as the unit rate rises with larger quantities. The disposal of scraps and waste materials has also been a major problem. 3.38 The main constraints on the productivity of these areas are the inadequacy of basic infrastructure services as well as other factors including: (a) lack of access to credit for purchase of tools and equipment; (b) lack of market information, i.e., on the demand for their services; (c) lack of general education and managerial skills; (d) uncertainties about the future business climate; and (e) non-affordability or non-availability of sites for. expansion. 3.39 Most of the informal industrial areas are highly congested. Interviews with entrepreneurs in these areas indicate that a significant number of them would like to relocate to larger sites where they can expand their operations. There appears also to be a demand for such sites among new entrants to the sector. According to the executive secretary of the Darkuman Kokompe area in Accra, the number of establishments increased from 400 to 600 recently to accommodate those laid off from government agencies, hence, increasing the congestion. 3.40 The Accra Metropolitan Assembly collects 040 per month from the microenterprises in Odorna, which is much less than the average rent of about 03,000 per year paid by those in Suame Magazine to the Kumasi Metropolitan Assembly. The enterprises in Odorna, however, contribute at least 0100 per month to the development fund of their Association. Although a further study is required, it is reasonable to assume that the enterprises would be willing and able to contribute toward the cost of upgrading the services in existing areas or even the costs of servicing new areas. 3.41 Government authorities have proposed relocating some of the small-scale industrial areas (such as Darkuman Kokompe and Odorna) to free the land for other uses. Unless the new sites will offer the enterprises similar advantages--in terms of access to clients, revenue levels, and agglomeration advantages--and do not impose undue costs on them, such measures run the risk of putting the enterprises out of business, thereby, reducing the overall benefits they provide to the economy. 3.42 Subject to the willingness of the users to contribute financially, basic services in existing informal industrial areas should be upgraded. In both existing and potential new areas, additional productivity-enhancing measures that could be considered include: (a) utility pools for electricity and water distributions; (b) sharing arrangements for expensive and more sophisticated machinery; (c) technical assistance services to provide information on marketing, financial and government services, and technology; (d) technical training and general education programs; (e) savings schemes for investment in additional facilities. D. INFRASTRUCTURE CONSTRAINTS ON FORMAL INDUSTRY 3.43 The difficulties faced by large firms during Ghana's period of economic downturn were less serious than those affecting the small and medium sized firms. This was due 21 partly to the ability of the larger enterprises to internalize the costs of infrastructure and services. They have their own standby generators to be used during power outages; they own company buses to carry employees to and from work and trucks to ship their products; they have their own water treatment and waste disposal facilities; and they often have their own workshops to carry out repair and maintenance work in-house. These firms also tended to maintain access to credit. 3.44 The small and medium scale firms, on the other hand, have had difficulty in internalizing the costs of inadequate infrastructure. An infrastructure problem common to small, medium, and large firms is the poor telephone service, which requires managers either to pay for costly and not always reliable cellular phone service or to resort to frequent, time-consuming face-to-face contacts. 3.45 At present, the formal manufacturing sector in Ghana is at a. low ebb. Manufacturing enterprises that were previously protected by import tariffs and subsidies are being forced to adapt to the new, liberalized economic policy regime. An underdeveloped financial sector and higher costs of imported materials are among the constraints facing manufacturing. Capacity utilization in medium and large scale industry is estimated to have dropped to as little as 30 percent in the early 1990s, though the rate may have improved recently. 3.46 For formal sector industrial firms that are already in existence or for new firms that may occupy sites vacated by defunct enterprises, infrastructure does not appear to be a primary constraint on the revitalization of the sector in the short term. However, in the medium to long term, Ghana's ability to attract direct foreign and domestic investment in new industries will be constrained by the availability of infrastructure and land. Undeveloped land suitable for new industries in the major cities tends to be on the urban periphery, where water, sewerage, electricity, and adequate roads are lacking. As noted above, the added costs to entrepreneurs of providing off-site infrastructure can be enormous, to the extent of making the potential investments uneconomical. In addition, the difficulty of acquiring land and obtaining clear property rights in Ghana (see Chapter VIII) pose additional costs on prospective investors. E. CoNcLUsioNs 3.47 This chapter's review of infrastructure and regulatory constraints on urban productivity points to the following main conclusions: In the next 10-15 years, the financial resources available for investment in urban infrastructure will meet only a small part of the "needs." Therefore, the investments to be financed will have. to be chosen carefully. In the urban roads and water supply subsectors, priority should be given to (a) continued rehabilitation and upgrading of existing, productive facilities, which in most cases remains the most cost-effective type of investment, 22 and (b) selected new investments which fill major systemic gaps and which have well-demonstrated high economic returns. * For sanitation, solid waste, and urban transport, coverage and quality will be improved most effectively by making available a range of levels of service at different costs in response to the willingness to pay of users. * Low-cost design standards need to be used wherever possible to multiply the impact of scarce investment resources. * Additional investments do not necessarily translate into improved, sustainable flows of services. Reforms in institutional arrangements will be needed to absorb greater amounts of capital resources and improve service delivery. These issues are taken up in Chapter V. * In Accra (and in Ghana's other major cities) employment is decentralizing. Investments in urban infrastructure should be planned to facilitate the movement of people and goods to and from the main concentrations of employment. * In the medium to long term, the ability to attract new industrial firms to Ghana's cities will be hindered by a lack of serviced land. Governmental assistance for the provision of trunk infrastructure and assembly of land for industrial sites on a selective basis would be justified. * The main cities contain numerous concentrations of small-scale and micro industries and commercial enterprises. These areas provide thousands of jobs and are effective "incubators" of firms that may grow in the future. Relocation of such areas should not be undertaken unless the continued viability of the enterprises is assured. Basic infrastructure in these areas should be improved with co-financing from the enterprises. * The low density of development in many areas of the cities is unproductive in two ways: (a) established urban infrastructure networks are underutilized and (b) transportation costs and commuting times are increased. "Infilling" the low-density areas will require removing obstacles to the buying and selling of land and releasing inefficiently used government-owned land for higher-intensity development (see Chapter VIII). 23 IV. TARGETING THE URBAN POOR 4.1 No matter how poverty is measured, it is clear that a large and growing number of people in Ghana's urban areas do not have enough income to meet their basic needs. The poor tend to be concentrated in core indigenous settlements, migrant residential areas, and high density neighborhoods that are economically depressed, have poor environmental and health conditions, and have the highest deficits of basic services. Programs to upgrade basic infrastructure in these communities would be an effective way to improve the living conditions and productivity of lower-income urban households. A. URBAN POVERTY IN CONTEXT 4.2 Data on incomes and expenditures are available from the Ghana Living Standards Survey (GLSS) for three points in time (1987-88; 1988-89; and 1991-92). At the time this Urban Strategy report was written, the Ghana Statistical Service (GSS) was in the process of carrying out a new study on poverty using data from the three GLSS surveys. Preliminary results of this work are used here to give a general picture of urban poverty in the national context. 4.3 The GSS study uses two "poverty lines" to estimate the incidence of poverty: two thirds ("poverty") and one half ("ultra poverty") of the mean total household expenditure per capita. This yields a higher poverty line of g225,700 per year per capita and a lower poverty line of g169,300 per year per capita in May 1992 prices. In 1991-92, around 40 percent of the national population was classified as poor relative to the higher poverty line and about 22 percent relative to the lower line. The study defines the depth of poverty as the percentage by which the average expenditure of the poor is below the poverty line. Nationally, this figure was about 6 percent relative to the lower poverty line and about 12 percent relative to the higher line in 1991-92. 4.4 Of the five localities into which the population was classified in the GSS study (Accra, Other Urban, Rural Coastal, Rural Forest, and Rural Savannah), Accra and the Rural Savannah are the extreme cases with respect to poverty. Accra is significantly less poor than the national average, with 28 percent and 14 percent of its population below the higher and lower poverty lines, respectively, in 1991-92. This is due to the unusually high proportion of household income in Accra derived from government and non-farm self employment. On the other hand, in the Rural Savannah 57 percent of the population was below the higher poverty line and 38 percent below the lower line in 1991-92. 4.5 Although urban areas in general are less afflicted by poverty than the national average, this is largely accounted for by Accra's relatively better situation. The differences in the incidence and depth of poverty between the Other Urban, Rural Coastal, and Rural Forest localities are quite small. Urban areas outside Accra have about the same proportion of poor people as the national average. In absolute terms, Ghana has a 24 significant amount of urban poverty. As of 1991-92, there were around 2.0 million poor people in urban areas. Of those, about half fell in the "ultra poverty" category. 4.6 As urbanization proceeds and, as is likely, accelerates, Ghana, like many other countries, will probably experience an increase in urban poverty. While it is important for Ghana to focus on the alleviation of rural poverty, it is critical to simultaneously address urban poverty issues and take measures to address them before they assume unmanageable proportions. B. LIVING CoNDrrIoNs IN LOW-INCOME URBAN AREAS 4.7 The urban poor tend to cluster in identifiable areas of Ghana's major cities. Data on the living conditions of the urban poor are available for Accra. The situation in low- income areas of other cities is similar. The Accra Planning and Development Programme (DTCP/UNDP) estimated that, in 1990, 46 percent of Accra's population and 29 percent of its land area fell into the two lowest-standard residential categories (out of seven): "high density indigenous" (10 named communities) and "high density low class" (18 named communities). These areas had the lowest income levels, the lowest social indicators (education and health), and the lowest service levels in the city. They also accounted for 75 percent of all epidemic and preventable diseases.' Another study carried out for the Ministry of Health reported, "Accra has become, over time, a very segregated city where it is possible to see differentials in environmental conditions and health outcomes."2 The study highlighted high residential density as one of the environmental risk factors that differs between areas and that is correlated, along with low education levels and poverty, with an area's health indicators. 4.8 A 1991 survey of services in eight lower-income communities Accra3 (later expanded to 17 communities) yielded the following profile: * Secondary roads are few and unpaved or non-existent. Many sections of the communities are inaccessible by vehicle. * All the communities have pipe-borne water systems with connections to most houses or compounds; however the quality and reliability of the supply varies. Carolyn Stephens and Sebastian Avle, "An Analysis of Intra-Urban Mortality Differentials Using Existing Data-Collaborative Studies in Accra, Ghana and Sao Paulo, Brazil," London School of Hygiene and Tropical Medicine and Korlebu Medical School, Accra, March 1993. 2 COWIconsult and Health Research Unit, Ministry of Health, OCrowding and Health in Low-Income Settlements,8 Accra, UNCHS, March 1993. Bidex Consult, -Urban II Preparatory Studies-Accra Residential and Market Upgrading Study, Inception Report," Ministry of Works and Housing, September 1991. The communities studied were James Town/Ussher Town, Teshie Old Town, Kotobabi/Pig Farm, Chorkor, Abeka, Darkuman, Sukura, and Russia. 25 * Drainage is poor, with numerous localized flooding problems. The few existing drains tend to be badly built and clogged by rubbish and silt. * Sanitation is very bad: there are few household toilets or latrines; public toilets are in disrepair; pan latrines are still widely used despite having been banned; night soil is dumped in and around the communities and flows into drains; large numbers of people defecate in the open. * Solid waste collection is erratic or non-existent; there are few communal rubbish containers; sometimes these are not emptied regularly, open rubbish dumps are common. * Most houses have electricity, but quality is substandard (low voltages and interruptions). * Street lighting is non-existent or inadequate. 4.9 The income generating activities of the poor are mostly in the informal sector. In Accra, the largest concentration of informal commerce is in the area of the December 31 Market and adjacent areas along the Kojo Thompson Road. Informal sector economic activities are also carried on within the residential areas and on marginal lands., Small- scale workshops are clustered in various locations (see Chapter III). C. IMPACrS OF DEFICIENT SERVICES IN LOW-INCOME AREAS 4.10 While urban incomes are generally higher and urban services and facilities more easily accessible, poor town dwellers may suffer more than their rural counterparts from certain aspects of poverty. The urban poor contend with poor sanitation, inadequate access, high costs for fuel and transport, and overcrowding. It is also important to note that the burden of coping with unreliable and inadequate household services falls disproportionately on women and children. The urban poor in Accra lack access to productive resources such as credit, equipment, and land. The productivity of the resources that they do own is low. 4.11 A 1991 household survey study of the Greater Accra Metropolitan Area (GAMA) conducted by the Stockholm Environmental Institute (SEI) and University of Ghana4 found that about one third of the low-income population of Accra lacks access to piped water and must purchase water from vendors. These households pay five to ten cedis per bucket, or about one cedi per gallon. Households with access to metered or unmetered piped water pay about a quarter of this price. The cost of purchasing water from vendors can come to 10 percent of the monthly income of a low income household. This, together with the irregularity of water supplies and low levels of health education, G. Bennh et al. Environmental Problems and the Urban Household in the Greater Accra Metropolitan Area (GAMA) - Ghana,' Stockholm Environment Institute, 1993 26 constrains the amount of daily water use by the urban poor for drinking, cooking, and hygiene. Daily per capita water consumption is about 60 liters in low-income areas, compared with 100 to 200 liters in middle to high income areas. The poor are also affected by the progressive water rate structure, as a result of their tendency to share water connections among many families, increasing the water use per connection and thereby the total cost compared with an individual connection. 4.12 The SEI study found that 51 percent of lower-income families in GAMA shared the same piped water connection with three or more other families; 22 percent shared their connections with more than 10 other families. For sanitation, 22 percent of the lower- income population relied on the unhygienic pan latrine, and nearly three-quarters of all families in Accra reported sharing toilet facilities with other households, including 40 percent using public toilets. The study also found that 41 percent of low-income households lived in only one room, compared with just 12 percent of middle income households and none of higher-income households. 4.13 Of the 16 significant diseases reported in Accra, 13 are linked to poor housing and ventilation, an unsanitary environment, contaminated drinking water, poor drainage and lack of facilities for waste disposal.5 As noted above, these conditions predominate in the higher density, lower income neighborhoods of Accra (as well as other cities). A UNCHS study6 on the incidence of common diseases in 12 communities concludes that overcrowding and poor sanitary conditions in low income areas are related to a high incidence of diarrhea, tuberculosis and acute respiratory infections. The 12 study areas are among the 17 most deprived areas in terms of incomes; they also have the poorest water supply facilities and waste disposal systems. The higher occurrence of disease means greater loss in work days and a,higher outlay of expenditure for medical attention for the poor than for those living in better physical environments. 4.14 The 1991 SEI study of GAMA is one of the best sources of data on the impact of inadequate services on health in lower-income areas. The study found that the prevalence of diarrhea in children under six is associated with eight environmental conditions, four of which are related to inadequate water and sanitation: (a) interruptions in water service, (b) using a pot to store water, (c) sharing a toilet with five or more other households, and (d) outdoor defecation by neighboring children. D. CONcLUsloNs 4.15 It is clear that the urban poor bear a disproportionate share of the environmental health burden. Geographically targeted improvements in infrastructure and services in lower income areas would have a direct impact on the welfare and productivity of the J. Leitmann, 'Rapid Urban Environmental Assessment Lessons from Cities in the Developing World," Urban Management Programme, UNDP.UNCHS-IBRD, April 1993. Housing and Urban Development Associates, -Housing Needs Assessment Study,' UNDP-UNCHS, Accra Planning and Development Programme, Kumasi, 1990. 27 urban poor. Such targeted upgrading programs should be part of an overall strategy for poverty alleviation that includes macro-economic measures to foster stable growth, policies to promote investment for employment generation, and the improvement and extension of primary health and education services. 4.16 The deprived lower-income urban areas would benefit from improvements in environmental sanitation, water supply, drainage, health extension, and education. Moreover, there appears to be demand for such improved services. The urban poor, along with all other households, place considerable value on environmental improvements and are willing to pay significant amounts to obtain them. The investment costs of upgrading programs are in the range of US$100 to $150 for multisectoral improvements and a fraction of this for programs limited to one or two types of services. The Assemblies of Accra, Kumasi, Sekondi-Takoradi and other cities could start by preparing profiles of the lower-income communities in their jurisdictions and identifying their priority needs. The Assemblies could use these data to prepare proposals to the Government and international agencies for financing upgrading programs. They could also begin working with community groups in the areas to initiate small-scale projects financed through a combination of Assembly funds and community contributions. 28 V. DELIVERY SYSTEMS FOR URBAN INFRASTRUCTURE AND SERVICES 5.1 The deficiencies of urban infrastructure in Ghana are due partly to the nation's low GDP. Nevertheless, there is considerable scope for improving urban infrastructure and services by reducing waste and inefficiency. Moreover, without improvements in delivery systems-the institutional arrangements for service provision-additional investments will not be sustainable. Providing the right incentives is at the heart of the issue. Many services are inadequate despite high willingness to pay on the part of users. Unmet demand can often be addressed by deregulation and opening service delivery to competition. Poor performance in the public sector must be dealt with by providing officials and staff with sufficient incentives for accountability and performance. Those responsible for service provision must be given effective managerial and financial autonomy. The use of private sector contracts, if properly managed, makes it possible to reward good performance and sanction bad performance in ways that are not possible under traditional public sector systems. The many alternative arrangements that are available can be summarized in four main categories1: (a) public ownership and public operation based on financially sound principles and freedom from political interference; (b) public ownership with private provision, using service, management, leasing, or concession contracts; (c) private ownership and private provision under appropriate regulation; and (d) community and user provision. 5.2 This chapter looks at the existing institutional arrangements for the provision of urban water supply, sanitation, solid waste, drainage, roads, and public transport, and considers how reforms in their delivery systems can improve performance. A. WATER SUPPLY 5.3 The Ghana Water and Sewerage Corporation (GWSC) is the principal national institution in the water supply sector (it also is responsible for sewerage, of which there is little in Ghana; see Chapter III and below). GWSC is a wholly owned government corporation under the Ministry of Works and Housing (MWH). It is administered through ten regions (managed by Regional Directors) divided into 110 Districts. The Corporation is responsible for urban and rural water supply; it handles urban systems in four metropolitan areas and some 200 secondary and small towns. See World Bank, "World Development Report 1994-Infrastructure for Development," Oxford University Press, 1994. 29 5.4 GWSC has experienced difficulties in attracting and retaining qualified managerial and technical staff.2 The existing centralized structure makes effective management in the regions difficult, as regional managers are not delegated the authority needed to deal with the problems of the systems under their jurisdiction. This leaves upper management at headquarters little time to address important strategic issues. The need to decentralize operations has been accepted in principle by GWSC for a number of years. However, effective delegation of authority over technical and financial matters to Regional Directors has not occurred. The regions send all revenues directly to headquarters, and budget allocations to the regions do not reflect local performance. This represents a disincentive to the regions, both for the three viable profit centers and the remaining seven non-viable ones. On the operational side, centralization produces long delays in basic tasks such as procurement and personnel management, undermining maintenance efforts. Salaries are currently above civil service levels, but recruitment problems persist, especially in the fields of finance and accounting. 5.5 Maintenance policies, particularly for routine preventive maintenance, have not been elaborated or implemented. Few leak detection programs have been organized, and these have not been sustained (though under the IDA-financed Water Sector Rehabilitation Project a comprehensive operation and maintenance (O&M) program is being implemented in two regions). Ineffective billing and collection persists despite past efforts. These institutional deficiencies form part of a vicious cycle. Budget constraints produce inadequate service, which discourages users from paying the higher tariffs needed to cover costs. The problem is aggravated by GWSC's lack of autonomy in personnel, compensation, and tariff setting, which limits its responsiveness to customers. 5.6 Ghana's severe economic problems during the 1970s and early 80s, combined with GWSC's management difficulties, have left the Corporation in a weak financial position, dependent on the central government to service and/or restructure its debt and to finance new investments. GOG's own budget constraints have restricted the dependability and amount of its subventions, requiring GWSC to limit the pace and scale of new investments and leaving its fixed assets in a severe state of disrepair. From its inception, GWSC has suffered from the government's reluctance to approve tariff increases adequate to cover even operating costs before depreciation and interest, and to countenance the enforcement of collections by disconnections. GWSC's financial position began to improve in 1986 as a result of cumulative tariff increases, but its accounts are distorted by understated depreciation charges (due to undervaluation of fixed assets). The Corporation still needs to deal with its persistent operational and financial problems, primarily inefficient capacity utilization as a result of high leakage rates, low tariffs, and inadequate billing and collection (including high GOG arrears). It is estimated that GWSC needs at present to increase its tariffs around 30 percent just to meet its cash operating expenses. GWSC is currently working, with IDA support, to improve its accounting systems, which would enable more accurate forecasts of tariff requirements to be made. 2 World Bank, "Republic of Ghana Water Sector Review," Infrastructure Division, West Central Africa Department, February 1994. 30 5.7 Despite recent efforts, GWSC is not meeting the present demand for urban water supply service, let alone gaining on the growth of demand. Dealing with existing inefficiencies and the scale of the task ahead requires more fundamental changes in the institutional arrangements for urban water provision. The long-term objective would be for urban water services in Ghana to be provided by locally operated, autonomous, commercially-oriented utility companies. GWSC has taken a first step in the restructuring process by agreeing to separate rural from urban operations as part of the recently signed Community Water Supply Project. In addition, GWSC has agreed to undertake an assessment of options for institutional reform of the water supply sector. This assessment, to be completed in the second quarter of 1995, will be conducted under the direction of a Steering Committee appointed by the MWH. It will include a study by consultants and at least one workshop (to which a broad range of sector participants would be invited) to review the advantages and disadvantages of the alternatives and make recommendations to the GOG on a strategy for phasing in the agreed-upon institutional restructuring. The options being considered are: * Conversion of GWSC into one public limited liability company with substantial decentralization and private sector participation. * Establishment of a joint venture between GWSC and an external company (or multiple companies) in a new operating entity. * Limiting GWSC to the production and sale of bulk water for private sector distribution. * Leasing of self-contained systems. * Spinning off the Accra-Tema Metropolitan Area (ATMA) and the largest urban centers as autonomous, commercially-oriented utilities and operate the remaining areas through a down-sized GWSC. 5.8 It is not expected that any one of these options will be adopted in its "pure" form. A hybrid may be the most practical solution. For all of these options, the institutional assessment will consider policies and actions for contracting certain services (e.g. billing and collection, leak detection and repairs, metering) to the private sector as well as the potential for management, leasing, or even concession contracts with the private sector. In addition, the assessment will consider how to handle the transition between GWSC's present centralized financial structure, in which the Accra-Tema region accounts for about 60 percent of total revenues, and a future arrangement in which each region is largely self-sustaining. 31 B. SANITATION 5.9 Several special characteristics of the sanitation subsector affect the consideration of options for improving the delivery of urban sanitation services in Ghana. The sanitation subsector is unique in offering a wide range of technical solutions at substantially varying costs (see Annex 3). These include on-site solutions which are not networked, like most urban infrastructure. This range of options allows, in principle, for several different types of sanitation services to be offered in different parts of a city according to the users' ability and willingness to pay. This is extremely important in Ghana, where conventional piped sewerage is unaffordable to the vast majority of the urban population and too expensive to be subsidized by government. At the same time, soil conditions, topography, and building density may restrict the types of sanitation services that can be offered in any specific location. This means that financial and technological criteria must be considered simultaneously in making decisions on levels of service (see Annex 4). 5.10 The recommendations summarized here for improving the delivery of sanitation services are based in large part on the experience of a UNDP-funded sanitation project carried out in Kumasi between 1989 and 1994. Role of the Public Sector 5.11 Metropolitan, Municipal and District Assemblies have the legal authority to be responsible for the provision of sanitation and to set sectoral policies upon the advice of their specialized Sub-Committees. For day-to-day management of urban sanitation, the Assemblies should establish Waste Management Departments (WMDs) in the larger cities and District Water and Sanitation Teams (DWSTs) in the smaller towns. Each would be responsible for sanitation planning, the management of a District Sanitation Fund to finance on-site systems, the supervision of construction contracts, and the supervision of contractors responsible for operation and maintenance of sewers and public sanitation facilities. The suggested responsibilities of a WMD serving a metropolitan area are summarized in Annex 5. DWSTs would have similar though more limited responsibilities. Role of Users 5.12 Individual property owners within a community should be responsible for the installation of sanitation facilities on their premises, and together with tenants should be responsible for the maintenance of household facilities and payment of sewer fees or septage hauling fees. Community groups would need to be actively involved in promoting the construction of on-site systems and the connection of individual households to the sewer network, as well as in ensuring that individuals pay their sewer fees. Developers of housing estates who wish to install sewers should be required to prepare feasibility studies 3 See Kumasi Metropolitan Assembly, Waste Management Department, "Brief Status Report of Kumasi Sanitation Project,' UNDP Project GHA/87/016, April 8, 1994. 32 and to encourage the formation of homeowner association to manage revenue collection and operation and maintenance through a service contractor. Parent-Teacher Associations at individual schools would have the opportunity of participating in school latrine construction programs by arranging financing for part of the capital cost of new or rehabilitated sanitation facilities and managing maintenance including revenue collection. Role of the Private Sector 5.13 Private firms and small contractors are available in Ghana for designing and constructing sanitation facilities under contracts with WMDs, DWSTs, communities and property owners. Service contracts may be let for the operation and maintenance of sewage systems and public toilets (in Kumasi, all public toilets are now operated by private contractors). Private operators would be paid for desludging services at household, public and school facilities. In many cases, sewer charges could be collected by lease contractors, who may in turn hire private collectors. Revenue collection at public facilities is best handled by the service contractor or community group. Issues for Household On-Site Systems 5.14 Septage from household WC/septic tank systems and public sanitary sites, for the most part, is collected with publicly owned suction trucks. Because cities do not have sufficient funds to operate and maintain their trucks, many operators informally charge for their services to cover operating costs and to supplement their incomes. Long waiting times for service, overflowing public latrine vaults, and indiscriminate dumping of bucket latrine waste into road side drains and local drainages result from such ad hoc service. Public entities with sufficient financial resources (such as the military, police, and port authorities) work around the problem by purchasing and operating their own suction trucks. In Kumasi the private operation of publicly owned suction trucks has met with success. In Accra, private haulers have not been able to compete with government owned and operated trucks due to the subsidization of public sector equipment and the high tipping fee (relative to the standard emptying charge) charged to private operators. 5.15 For on-site systems, the ideal financing arrangement is one in which households pay cash for their sanitation facilities from savings. The experience in Ghana and elsewhere with directed loan programs for household sanitation is not favorable. While few homeowners would immediately have the requisite cash to pay for improved facilities, a program to encourage savings through informal savings schemes ("susus") or local banks could be implemented. Cost recovery through property taxes or water bills is not presently viable, as most municipalities currently collect a small portion of property taxes and GWSC recovers only about 70 percent of water billings. Adding cost recovery for sanitation onto either property taxes or water tariffs could also weaken the efforts that municipalities and GWSC are making to rationalize their tariff structures and improve collection rates. Households unable to afford the full cost of an on-site sanitation facility could receive matching grants (perhaps 50 percent of the capital cost) from District Sanitation Funds managed by WMDs or DWSTs. 33 Issues for Piped Sewer Systems 5.16 In Accra, a combination of no community participation and high connection charges resulted in a very slow connection rate to the small sewerage system. Under the UNDP project in Kumasi, sewer connections are being encouraged by involving the community in the planning process, not levying a connection charge, and providing technical assistance to households in planning their internal plumbing (households must pay for this and their toilets). Operation, maintenance and revenue collection will be contracted to a private operator. As a general policy piped sewerage, because of its high cost, should be installed only in areas where on-site systems are not technically feasible. The Kumasi policy of not charging connection (or other up-front) fees and providing piping up to individual properties appears valid as a general approach, provided users are required to cover the costs of in-house facilities and all operation and maintenance costs. O&M could be contracted to the private sector (see Box 1). Box 1 Lease Contracts for Operation and Maintenance of Sewers The Kumasi Sanitation Project, executed by the Kumasi Waste Management Department (WMD) and the UNDP/World Bank Water -and Sanitation Program, includes a pilot subproject providing "simplified" piped sewerage, with treatment, to about 4,000 households. The project proposes to implement an operation and maintenance system though a "lease contract" with a private contractor, which would operate the system at its own commercial risk and collect fees directly from users. The contractor would pay the KMA a set lease fee. If successful, this model could be extended to other cities. To select a lease contractor, WMDs would call for financial bids after pre-qualification; the user charge structure set by the WMD would be indicated in the bidding documents, and the sole criterion used for the evaluation of bids would be the rental fee the bidders would propose to pay back to the municipality. The lease contractors' initial equity requirement would be indicated in the tender document, and guarantees would be sought to ensure that it would actually be paid in at the time a company is engaged. Lease contractors would finance their initial investment (sewer cleaning equipment and office furniture) and working capital with their initial equity or commercial loans. However, to ease the financial burden during the first years of operations, WMDs could help service the lease contractor's debt, but only upon payment of the rental fee. This arrangement is proposed in order to provide a financial incentive to lease contractors to pay the rental fee. User fees would be based on water consumption rather than on land value, but the lease contractor would have a billing system independent from that of the Ghana Water and Sewerage Corporation (GWSC). Billing would be based on average annual water consumption for each connection obtained from GWSC records. This billing base would be updated periodically. 34 Issues for Public and Institutional Facilities 5.17 Public toilets traditionally have been widely used in Ghanaian cities. By the mid 1980s, however, public toilets had deteriorated to the point that many were abandoned. This situation led to the takeover of management functions by neighborhood Committees for the Defense of the Revolution (CDRs), which cleaned up most of the facilities and introduced a user charge (now typically %10 per visit). The interventions of the CDRs, though quite remarkable, have been limited by inadequate injection of revenue into maintenance of the facilities. More recently, local assemblymen have tended to displace CDRs and now control revenues. 5.18 Under the Kumasi Strategic Sanitation Plan, new public latrines in residential areas would not be financed. This is because user charges at neighborhood facilities are not sufficient to cover capital costs and because, with the same investment, individual household latrines can be constructed that provide a cleaner, private, and more convenient service. Nonetheless, existing neighborhood toilets can continue to meet part of the sanitation needs of many municipalities. For these facilities WMDs and DWSTs should (a) rehabilitate them; (b) assist in preparing a management plan for each neighborhood facility with day-to-day operation and maintenance contracted to a community group or private contractor; and (c) monitor improved septage hauling services and train the managers and operators of the facilities. 5.19 In Kumasi the operation of public latrines in the central business district by lease contractors has been successful. The system should be extended to other cities. Government would finance the construction of public latrines in areas that are heavily frequented by the general public. Operation, maintenance and revenue collection would be the responsibility of lease contractors, whose rental fees would cover operation and maintenance, profit and repayment of the full capital cost of the latrines. In this way revolving funds could be established that would eventually allow additional public facilities to be constructed. 5.20 Government offices and private institutions should provide proper sanitation facilities at their own cost. However, to improve conditions in schools, where most sanitation facilities have been poorly managed and have fallen into disrepair, it is recommended that government finance a school sanitation program. WMDs and DWSTs could encourage Parent-Teacher Associations (PTAs) to participate in the program and to introduce complementary hygiene and user education programs in participating schools. This process will instill good hygiene behavioral practices in children during their formative years. Grant eligibility criteria could include the provision of the necessary guarantees for sustained operation and maintenance of the facility. Grants could be provided for, perhaps, 80 percent of the capital cost, with PTAs making a 20 percent down payment as a commitment fee. 35 C. SOLID WASTE 5.21 Collection and disposal of solid waste is a local government responsibility. Solid waste collection has very limited economies of scale and can often be provided on an exclusive basis (i.e., users who do not pay can be prevented from having access to the service). Thus collection lends itself to being carried out through competitive, commercially viable mechanisms. In high-income countries, collection is usually performed by private companies. The disposal of solid waste may have moderate economies of scale (one or two large disposal facilities serving whole cities are usually more cost-effective than numerous small ones), but it also can be exclusive, through the levying of a charge for access to the disposal site. On the other hand, solid waste management is a public good in the sense that it provides benefits to the public as a whole even if only a portion of the community is receiving the service. In addition, it is generally accepted that the public health and environmental benefits of solid waste service justify ' subsidizing it so that it can be provided to those who cannot pay4. Accra 5.22 The Accra Waste Management Department (AWMD), part of the Accra Metropolitan Assembly (AMA), owns a fleet of 28 multilift trucks for picking up communal garbage containers and four compaction trucks for house-to-house garbage collection. Communal containers serve 220 sites in the city; house-to-house collection serves about 3,500 residences in higher-income areas. Recently, the Department began to test the use of private contractors for garbage collection. Three contractors are currently collecting waste from about 1,600 houses using low/medium technology (including carts pulled by power tillers or donkeys). AWMD also owns 10 'suction trucks (for emptying septic tanks) as well as other heavy equipment and vehicles. Its present staff strength is about 1,000. AWMD operates its own workshop for maintaining and repairing its vehicles and equipment. In December 1993 the availability of the multilift trucks was 50 percent and of the compaction trucks 72 percent. AWMD currently operates two landfill sites at Ring Road West and Mallan (another one adjacent to the Korle Lagoon was closed in early 1994). A new landfill site is urgently needed. A joint effort between AWMD, TCPD and EPC has identified a potential site, but feasibility studies have not yet been done. 5.23 Billing for house-to-house collection is done quarterly by AWMD's own collectors who are paid according to a progressive incentive rate. Cost recovery for communal container collection service is carried out through a two-tier system. Users pay a fee of 620 for each load of garbage dumped into a container. These fees are collected by the AMA's Sub-Districts, which in turn must pay a fee to the AWMD to have each full container emptied. Individuals or contractors who dump waste at one of the Department's two main disposal sites must also pay a tipping fee. The fees for the house-to-house 4 See Sandra Cointreau-Levine, "Private Sector Participation in Municipal Waste Services in Developing Countries," UNDP/UNCHS/World Bank, Urban Management Programme. Report No. 13, 1994. 36 collection service presently cover its operating expenses plus some of the fixed administrative costs, but not depreciation. The communal container service, on the other hand, recovers only about 30 percent of its operating cost. Since 1985, AWMD's capital costs have been met largely by the German government, which has also been providing technical assistance in the form of long-term resident technical advisers.5 5.24 As a direct dependency of AMA, AWM]D lacks the authority to implement its own personnel policies or to manage its own budget. The portion of AWMD's expenses not covered by user fees is provided by AMA. Delayed and inadequate subventions from AMA have been a significant problem. Also, AWMD's revenues are deposited into AMA's general account and are not necessarily available to AWMD as or when needed. Kumasi 5.25 The present institutional arrangement in Kumasi is like that of Accra. The Kumasi Metropolitan Assembly (KMA) established a Waste Management Department in 1989. KWvID is responsible for both solid waste and sanitation. Solid waste collection is primarily through communal containers which are picked up by KWMD's lift trucks. The Department also operates two side loading vehicles which provide a limited amount of house-to-house collection. So far there has been no attempt to use private contractors for solid waste collection. 5.26 KWMD's operational problems are similar to those of AWMD. Effective financial management is hampered by KWMD's lack of direct control over its revenues, which are deposited directly into KMA's central account, and over its expenditures. Untimely and inadequate disbursements by KMA have been a significant constraint. An additional problem is that the services of KWMD's maintenance workshop are available to other KMA Departments at no cost. The average availability of KWMD's collection vehicles was less than 50 percent as of 1993 due to lack of funds for spare parts and inadequate routine maintenance. For disposal, KWMD is dependent on one major landfill to the northeast of the city. This site has capacity only for a few more years, and a new site has yet to be identified. KWMD received donations of trucks, containers, workshop equipment, and other vehicles as well as technical assistance under a solid waste pilot project funded by the British government during 1991-93. A review of this project by ODA concluded that KWMD should become an autonomous agency and should shift towards contracting most waste management functions to the private sector.6 5 See GOPA Consultants, *Waste Disposal Project Accra, Ghana-Activities and Financial Aspects,* March 1994. 6 Mott MacDonald, 'Waste Disposal in Kumasi, Ghana-Pilot Project," Final Report, Overseas Development Administration, October 1993. 37 Tema 5.27 In 1990 the (then) Tema Municipal Council, lacking funds to acquire solid waste collection equipment, decided to institute a solid waste charge of 500 per household per month and hire private contractors to collect garbage within the "township" (planned) area of the city. This system has continued successfully. There are two fbrms of collection, house-to-house and from curbside collection points. Collection is three times per week using dump trucks and laborers with shovels. Fees are collected by private collectors who earn a 10 percent commission. In 1993 the fee was raised to 1800, and the Assembly is considering a further increase to 1,000. In 1994 this service earned about 150 million, and the Assembly contributed a subvention of e80 million. The Tema Waste Management Unit (TWMU) is formally under the Environmental Health Department but reports directly to the Assembly's Director of Administration. 5.28 Tema's privatized collection system does not operate in the city's two unplanned, lower income, higher density areas (Ashaiman and New Town), which house about 120,000 people, or nearly 40 percent of the city's population. These communities presently have no solid waste collection service. Garbage is simply piled in heaps in and around the neighborhoods. TWMU is considering the possibility of having private contractors supply communal containers and provide the collection service in these areas. The fee charging system has not been decided upon. 5.29 Tema has one solid waste disposal site about 13 km. from the center of town. The site has good access and is far from inhabited areas, but it is simply a large dump, not a proper landfill. The waste is neither compacted nor covered with inert material, and there is no control of run-off. Future Directions for Solid Waste Services 5.30 There is a growing recognition that the traditional institutional model--direct provision of all solid waste services by a government department--performs inadequately due to the absence of proper incentives and a lack of competitive conditions. This is bringing about a readiness to experiment with alternative arrangements. The key performance problems that should be addressed in the near term are low availability rates of vehicles and equipment; lack of funds to replace worn out vehicles; cost recovery from users considerably below potential; high staff costs relative to output; and slow, inflexible government management procedures. 5.31 Metropolitan, Municipal, and even some District Assemblies should begin to implement measures to improve the efficiency of solid waste services and reduce the share of the service's costs borne by user fees. New delivery arrangements will need to be introduced gradually, in line with the managerial capacity of the Assemblies to develop, negotiate, supervise, and enforce contracts. The following are the elements of the reform agenda: 38 * Waste management budgets should be separated from general Assembly budgets; Waste Management Departments should have control over their finances and managerial authority over personnel. * House-to-house and even curbside collection should be expanded through contracts with private companies. This can be done through service contracts or franchise arrangements in which the contractor collects tariffs directly from users within a specified zone and pays a license fee to the Assembly. Contractors should be allowed flexibility in mobilizing low-cost technology (e.g. tipper trucks, handtillers with trailers, or even donkey carts). * Billing and collection of user fees may be performed by private contractors working on commission. * Communal container collection will remain the principal form of solid waste collection in Ghana's cities and towns. The experiments in Accra suggest that the share of costs recovered from users of this type of service can be raised significantly, but Assembly subventions will still be needed. The general revenue raising capacity of Assemblies and the amounts of city budgets available for solid waste will be major constraints. One promising approach is for containers to be managed by community groups, which could collect user fees and pay a charge to a contractor or the WMD for pickup. * Existing solid waste vehicles could be leased to private contractors. Given that the life span of solid waste vehicles under government management is only five to seven years and that the recovery of depreciation costs through user fees will not be feasible for a long time, Assemblies should experiment with requiring collection contractors to provide their own vehicles (as in Tema). Experience in Ghana in the construction and public transport sectors suggests that this should be feasible, provided that contractors' fees are sufficient. * Maintenance of vehicles and equipment by local government-operated workshops tends to be deficient in part because of a lack of competition. Where WMDs retain their own solid waste vehicles and machinery, Assemblies should contract out at least some of the maintenance to private workshops. This could prod the government workshops to improve their performance. * Assemblies can also try to improve the technical and financial operation of landfills by franchising them to private contractors who would collect tipping charges and pay a fee to the WMD. 39 As services are contracted out, Waste Management Departments need to develop their capacity to manage the contracting process and perform inspection and enforcement functions. D. DRAINAGE 5.32 Delivery of an effective drainage service requires periodic capital works to accommodate runoff from new development and to replace failed drains, as well as routine maintenance to keep drains free from blockages. In Ghana, responsibility for urban storm drainage is divided between central and local government, with the former being responsible for the design and implementation of capital investments on primary and secondary drains, and the latter for the construction of tertiary drains and the maintenance of the whole drainage system. At the central level, responsibility is delegated to the Hydrological Branch of the Architectural and Engineering Services Corporation (AESC), a government technical services agency under the Ministry of Works and Housing (MWH). Responsibility at the local level falls to the Waste Management Departments or Units of the Assemblies. Drains directly associated with roads are the responsibility of the Department of Urban Roads (DUR). These assignments are far from clear-cut. For example, DUR was responsible for commissioning drainage master plan studies for Kumasi and Accra under the IDA-financed Urban II Project in the early 1990s. Prior to 1991 AESC was responsible for maintaining primary and secondary drains, but this function was transferred to local governments, apparently because AESC did not have the resources. While it is unclear that the local governments are any better endowed to perform maintenance, there is logic in making a single body responsible for maintaining the whole drainage network. 5.33 Urban drainage systems are public goods (similar to roads) in that, once they are installed, individual consumers cannot be easily excluded from using them, and consumption by one individual does not lessen its availability to others. In the foreseeable future, the rehabilitation and construction of urban drains in Ghana will probably remain a joint responsibility of MWH and local Assemblies due to financing constraints and the scarcity of technical expertise at the local level (especially for large-scale works). The use by government of private contractors for construction of drainage works is a well- established practice. 5.34 There are some options for the funding and construction of local (community) drains. The developers of new housing estates should be required to install storm drainage facilities within their sites and include the costs in the prices charged for plots. Communities in which the residents have a strong interest in drainage improvements can be organized to finance the works from special levies among themselves. This is best done through existing community organizations. Residents who can be identified as directly benefiting from drainage works may also be willing to pay modest fees for drain maintenance, also preferably through a community-based entity. However, many of the urban areas with serious drainage problems are inhabited by lower-income people whose 40 ability to pay for drainage works is limited. Drainage improvements in these areas will need to be subsidized in the interest of public health. 5.35 Routine and periodic maintenance of main drains also will need to be financed from the general revenues of the local Assemblies. The prospects of improved maintenance will depend on the Assemblies' abilities to present themselves as effective service providers, which is a pre-requisite for a greater willingness among the public to contribute higher local tax revenues. E. URBAN RoADS 5.36 Responsibility for roads in Ghana is divided between three bodies, all of which report to the Ministry of Roads and Highways (MRH). These are the Ghana Highway Authority (GHA), responsible for the trunk and secondary road system; the Department of Feeder Roads (DFR), in charge of rural feeder roads; and the Department of Urban Roads (DUR), which oversees urban roads. The DUR was established in 1987 to take over responsibility for roads in Accra, Kumasi, Sekondi-Takoradi and Tema from the Ghana Highway Authority in order to direct more attention to the specific problems associated with the increasingly trafficked urban roads. In Accra, a Metropolitan Roads Unit (AMRU) has been formed, and District Roads Units (DRUs) were established in the other three cities, with a fourth planned for Tamale. The AMRU is responsible for maintenance of Accra's roads, though major rehabilitation and reconstruction works are still administered by DUR. The local Road Units are funded through and supervised by DUR in consultation with the Municipal and Metropolitan Assemblies (MMAs), with which DUR develops construction and maintenance programs. DUR, including the Road Units, has a total staff of 550, of which only 28 are professionals (apart from clerical staff most of the remainder are construction personnel who perform force account maintenance works). Virtually all engineering studies, detailed designs and supervision of large contracts are carried out by consultants (mostly Ghanaian). All capital works, and around 80 percent of maintenance, are contracted out to the private sector. 5.37 In line with the GOG's decentralization policy, it is intended that all of the cities will, over time, build up the capacity of their Road Units and eventually become responsible for most urban road construction, rehabilitation, and maintenance. Central government funding for road maintenance and construction would gradually be transferred to the Road Units (as has already occurred with Road Fund monies for Accra). It is envisaged that DUR will evolve toward becoming a national policy, advisory, research, testing and technical support unit for road and traffic engineering.7 An organization and management study, the main objectives of which are to determine the most appropriate structure and staffing levels to enable DUR to fulfill its existing and medium term See the Letter of Urban Transport Policy signed by the Minister of Finance in the "Staff Appraisal Report, Republic of Ghana Urban Transport Project,' Report No. 11674-GH, World Bank, April 20, 1993. 41 responsibilities and to plan the gradual transition of responsibility to the Assemblies, will be carried out under the Urban Transport Project during 1994. 5.38 Table 5.1 shows actual expenditures by DUR on capital works and routine and periodic maintenance. While routine maintenance expenditures have declined slightly over the three years, expenditures on periodic maintenance and capital works has increased. Data are not available on what share, if any, of urban road maintenance costs are financed by Assemblies' own resources. Table 5.1 Ghana: Actual Expenditures By DUR For Urban Roads in the Four Main Cities, 1990-1992 (Constant 1993 USS millions) Category Actual Expenditures 1990 1991 1992 Routine Maintenance 1.0 0.9 0.8 Periodic Maintenance 5.7 11.7 15.4 Capital Investment 6.0 13.1 12.0 Total Annual Expenditure 12.7 25.7 28.2 Source: DUR. 5.39 DUR's funding for urban roads comes from three main sources: the government's consolidated fund, the Road Fund (a road maintenance fund financed mainly from motor fuel taxes); and foreign development assistance. Routine maintenance and recurrent expenditures are financed solely from the consolidated fund; periodic maintenance from the Road Fund and consolidated fund; and capital expenditures from the consolidated fund and foreign assistance. Table 5.2 shows DUR's finding from the first two sources for the years 1990 through 1992. Table 5.2 Funding For DUR, 1990-92 (USS millions) Funding Sources Funding Allocations In S Million 1990 1991 1992 Road Fund 3.4 8.6 5.6 Consolidated Fund 1.1 2.0 9.1 Total 4.5 10.6 14.7 Note: Figures for foreign assistance funding not available. Source: DUR. 5.40 The Road Fund was established in 1985 to provide a regular flow of funds for financing road maintenance and to service the backlog of deferred maintenance that had built up during previous decades. The Road Fund works relatively smoothly because it is simple and its administration costs are low, though the flow and timeliness of disbursements has not been sufficiently regular in recent years (see Table 5.2). There are 42 three sources of funds: a fuel levy, which accounts for around 96 percent of the total; vehicle road-worthiness tax; and motorway tolls. The MRH is responsible for deciding the relative allocations from the Road Fund to each of the three road agencies, and allocations are varied annually to suit perceived need. In addition to the Road Fund levy, a number of other levies and duties are added to fuel, the most significant of which, excise duty, raised around US$156 million in 1992, close to six times the amount for the Road Fund. Taking into account the principle that the costs of infrastructure should be borne as much as possible by the actual users, the policy implication here is that the share of fuel taxes earmarked for road improvements and maintenance should be increased. 5.41 Table 5.1 shows that allocations for periodic maintenance tripled in real terms between 1990 and 1992. However, DUR is responsible for the maintenance of 1,912 km. of roads but was able to carry out periodic maintenance on an average of only 73 km. per year between 1990 and 1992. This is far from sufficient to keep pace with the normal rate of road deterioration. A typical six year periodic maintenance cycle would require 319 km. to be treated annually. Costs per kilometer of periodic maintenance in Ghana are high because routine maintenance has not been performed. Roads have often deteriorated to the extent that reconstruction, rather than the resurfacing more normally associated with periodic maintenance, has to be carried out. Allocations for routine maintenance are disproportionately low and should be increased .to around 20 percent of periodic expenditures to safeguard against the early road failures that are precipitated by blocked drains, untreated potholes, and similar deficiencies. 5.42 The GOG's policy of devolving responsibility for urban roads to the local government level and therefore closer to users is sound. However, significant challenges exist in developing the necessary institutional capacity and in aligning responsibilities for revenue generation and service provision. 5.43 The main challenge of building adequate technical and managerial capacity in the Metropolitan and Municipal Assemblies would require a means, which is acceptable to the staff, of transferring the central government's civil servants currently working for the DUR-administered Road Units to the local governments. At present, central government staff are likely to view such moves unfavorably because of the limited career prospects available at the local government level. 5.44 As noted above, there has been an encouraging trend in the financing of urban road maintenance, with road users meeting a proportion of costs directly through the Road Fund fuel levy and expenditures having significantly increased in real terms. However, a recent study8 indicates that only 17 percent of the full maintenance cost of all roads in Ghana is being met by the Road Fund and concludes that there is a case for increasing user charges. While Government has increased fuel taxes regularly in recent years, it is recognized that such decisions are politically contentious. Vehicle 8 TECNECON, "Road User Charges and Axle Load Study," Ministry of Roads and Highways, December 1993. 43 inspection/licensing fees, which have been identified as a further source of increasing user charges, are also politically sensitive. Local governments will need to increase their own revenues to meet road maintenance needs. A study of possible local sources9 identified parking fees (largely the fees charged at lorry parks and bus terminals), the local vehicle licensing tax, and stores and market licensing fees, as the most promising sources. There appears to be considerable scope for increasing revenue from parking fees, as only 084 million was collected in 1991 out of a potential 0961 million. Under the Urban Transport Project, the government has agreed to carry out a study of mechanisms to increase collections toward meeting the maintenance requirements of roads, lorry parks, and bus terminals. F. URBAN TRANSPORT 5.45 The vast majority of urban transport services in Ghana are provided by the private sector, which operates a mix of buses, minibuses ("tro-tros"), and taxis. There are also three parastatal bus companies--Omnibus Services Authority (OSA), City Express Services (CES), and State Transport Corporation (STC)--but they are largely limited to inter-city operation. Government has stopped direct subsidization of the three companies, though some residual financial support continues in the case of OSA. and CES through Government repayment and guarantee of loans for bus purchases. Government ministries, parastatals, and large private companies operate their own buses to carry their employees to and from work. 5.46 There are few government controls over the operation of public transport services. However, private operations are strictly controlled by trade unions, of which the most powerful is the Ghana Private Road Transport Union (GPRTU). The unions charge an obligatory membership fee, and drivers must register with and pay a daily fee to one of the "locals" which controls a terminal. User charges are also collected by the unions on behalf of the local Assemblies, which own the terminals but reportedly receive less than 10 percent of the revenues. 5.47 The Planning and Implementation Division (PID) of the Ministry of Transport and Communications (MOTC) is responsible for transport policy, legislation and regulation. Until recently no formal procedures existed for the coordination of urban transport information and policy. An ad-hoc technical committee was formed in 1991 to steer the preparation of an urban transport policy action program. As a first step towards adopting this program, the government established an Urban Transport Unit (UTU) within the Planning and Implementation Division of MOTC to act as a focal point for the coordination of urban transport activities. At present there is very little capacity at the local government level to regulate urban transport services or perform traffic management, Delta Technics, "Urban Road Maintenance: Financing Sources and Mechanisms Study," DUR, March 1993. 44 though the Accra Metropolitan Assembly has recently established a Parking and Traffic Unit. 5.48 The key problems of urban public transport are the low quality of most vehicles, a lack of high-occupancy vehicles which contributes to traffic congestion, restrictions on vehicle operators, and the poor condition of most lorry parks. It is not clear why private operators have not placed better-quality vehicles and greater numbers of larger, more cost-efficient buses into service. The government does not regulate fares, so operators in principle have the option of charging higher tariffs for transport provided by newer and more comfortable vehicles. Given the prevailing state of most taxis, trotros and buses, a willingness to pay for improved service probably exists. Non-availability of credit for the purchase of new vehicles appears to be part of the problem.0 However, privately-owned trucks and other heavy vehicles in new or good condition are not uncommon in Ghana, which suggests that there may be other barriers. 5.49 The quality of service would also be improved if there were more flexibility in vehicle operations. Unions such as the GPRTU, which control the lorry parks, have rules requiring vehicles to be full before they can depart. This practice is not always in the interests of users, who often cannot board vehicles between terminals and must wait for long periods until vehicles are full. Regarding the poor physical condition of lorry parks, a starting point would be to change the current system under which the lorry park fees collected from transport operators and passengers are not plowed back into the maintenance or upgrading of the parks. This would require a change in the lorry parks' management arrangements between the Assemblies and the unions. 5.50 The Urban Transport Project will sponsor two studies on sensitive issues related to service delivery: (a) a study of regulatory options for improving the quality and quantity of public transport in Ghana, to identify the regulatory, institutional, and financial constraints on the use of better and larger vehicles and recommend ways of addressing them, and (b) a study of the management of lorry parks and bus terminals, to evaluate management practices, revenue collection, and operational characteristics and recommend improvement strategies. G. CONCLUSIONS 5.51 Where government departments (whether central or local) are involved in urban service delivery, poor performance occurs because of a lack of various types of incentives. At the higher levels, executives and political officials are not sufficiently accountable to the public for the effective provision of services, though this has begun to change with the introduction of electoral systems nationally and locally. At the technical and administrative level, government does not provide the necessary individual incentives or 10 Ross Silcock Partnership and COMPTRAN Engineering and Planning Associates. "Urban Transport Policy Action Programme," Ministry of Transport and Communications, 1992. 45 sanctions for staff to be significantly more productive. Although much higher remuneration is not achievable in Ghana's public sector, other types of rewards and pressures can be used. One approach is to allow private sector organizations to compete with public agency and measure the comparative performance. 5.52 The provision of most urban infrastructure services can be improved by making them more responsive to demand. The demands of users for services at different levels of quality and price go unmet even when users are willing and able to pay1. Part of the solution is opening up service,delivery to competition by different providers whose success is dependent on meeting the demands of users. Public agencies can also offer various options (such as cost-sharing schemes for different sanitation solutions) among which users may choose. 5.53 The maintenance of urban infrastructure could be improved greatly if user charges were managed more effectively. There is considerable scope for imposing more of the costs of services on users, as opposed to general revenues. Direct tariffs for most services are still far below the levels needed to cover operating costs and could be raised without exceeding users' ability of pay. Ghana has made a good start on the recovery of road maintenance costs from users through a surcharge on fuel, but the share of fuel taxes earmarked for road maintenance remains low (around 15 percent). The majority of fuel taxes go into the general public treasury. 5.54 Even with much higher user charges, general revenues will still be needed to help cover the costs of most services, especially to ensure that they reach the lower-income population. Central government transfers and foreign assistance will continue to pay for a major share of capital costs, but local governments will have to finance most operation and maintenance costs themselves. Their ability to mobilize greater amounts of revenues from local taxes will depend on the extent to which local leaders can inspire the public's confidence in their ability to provide better services. 5.55 The incentives for good performance in all subsectors can be strengthened greatly by widening the use of private sector contracts (in their various forms). Shifting to private contracting is not cost-free or easy-it requires government to learn new skills-- but, if properly managed, it makes it possible to reward good performance and sanction bad performance in ways that are not possible under traditional public sector arrangements. 5.56 A few subsector-specific issues are worth highlighting. Lack of management autonomy is an important problem in the water, sanitation, and solid waste subsectors. It will be critical to provide the organizations responsible for these services--such as GWSC for water and local Waste Management Departments for sanitation and solid waste--with freedom from political interference so that they may operate with professionalism and I I See Dale Whittington et al, 'Household Demand for Improved Sanitation Services: A Case Study of Kumasi, Ghana," UNDP-World Bank Water and Sanitation Program, May 1992; and G. Benneh et al. 1993 (op.cit.). 46 financial soundness. In the drainage subsector, it is still necessary to sort out the responsibilities between the two levels of government and among agencies. Finally, the urban public transport subsector poses unique, politically sensitive problems. The quasi- monopolistic control over vehicle operators (who are overwhelmingly private) and terminals by the transport unions restricts the quality of service. The unions clearly have a role in limiting vehicle operations in ways that do not necessarily benefit consumers, and their financial stake in the management of terminals prevents revenues from being plowed back into improved services for passengers. There seem to be both financial and institutional barriers to the placement in service of newer and larger urban transport vehicles, despite the lack of both government regulation and limits on entry. Ways of eliminating these barriers need to be found and implemented. 47 VI. URBAN LOCAL GOVERNMENT 6.1 Under the Local Government Act of 1993, Metropolitan, Municipal, and District Assemblies are supposed to assume devolved responsibility for the provision of most infrastructure and services. Recently adopted electoral systems are making local governments more accountable to the public. However, the devolution of functions has not been accompanied by a net transfer of financial resources to the local level or measures to curtail the direct involvement of central government agencies in local activities. Regional and District offices of central agencies have not been abolished or absorbed by local Assemblies as envisioned, and the Assemblies have been slow in creating their own Departments to take over sectoral functions. A major impediment is that most professional and technical staff at the local level are accountable, through the Civil Service, to the central government. In the short/medium term, Assemblies can make use of personnel services contracts to boost their staff capacity. External assistance agencies can support local government capacity building. A. THE POLICY ENVIRONMENT FOR LOCAL GOVERNMENT 6.2 Ghana's current decentralization policy and the issues arising from it have been subject to extensive studyl. PNDC Law No. 207 (1988) initiated a fundamental shift in the structure of governmental authority whereby the central government devolved to local government Assemblies the responsibility for policy formulation, planning, and implementation with respect to, among other things: (a) community development; (b) town planning; (c) public works; and the construction, rehabilitation, and maintenance of (d) roads and streets; (e) markets; (f) sanitation; (g) water; (h) electricity; and (i) car parks. This shift of authority is to occur in two directions: vertically from 22 central government ministerial departments to District Assemblies; and horizontally, at local the government level, from GOG staff performing executive functions to members of District Assemblies performing legislative functions. Two thirds of the members of each District Assembly are elected; the latest local government elections occurred in March 1994. 6.3 The Local Government Act of 1993, which replaced Law 207, gives District Assemblies the power to "exercise political and administrative authority in the District [and] provide guidance, give direction to, and supervise all other administrative authorities in the District" (Article 10). The 1993 Act does not mention specific sectoral functions of local Assemblies; rather it devolves to them responsibility for "the overall development of the District", "the development of basic infrastructure", the provision of "municipal works and services", and the "management of human settlements and the environment", among other activities. The 1993 Act also refines the structure of local governments by I World Bank. "Ghana-Strengthening Local Initiative and Building Local Capacity," Report No. 11369- GH, February 18. 1993; and J.M. Silverman, "Ghana Urban Sector Strategy - Background Paper: Urban Local Government," May 1994. 48 distinguishing among three different types: Metropolitan Assemblies (requiring an urban area of at least 250,000 population); Municipal Assemblies (requiring an urban area of at least 95,000 population); and District Assemblies (which must have at least 75,000 people within their boundaries). Box 2 Local Government Sector Study 1992 In 1992, the World Bank carried out a review of the GOG's recently-adopted decentralization program. The resulting report, "Strengthening Local Initiative and Building Local Capacity", found that Ghana's was perhaps the most ambitious decentralization program in Africa. The study identified a number of practical constraints and requirements for implementation of the stated decentralization policies. In general, there was a significant inconsistency between the objectives of the program and the actual structure of authority for the performance of planning, financing, and personnel management functions. Also, it was observed that the local Assemblies were not ready to assume most of the new responsibilities assigned to them. However, the trend toward allocating responsibilities so as to benefit from the comparative advantages of the various levels of government and the private sector was identified as a mitigating factor. With government generally moving toward a more limited role as policy-maker, regulator, and supervisor, rather than direct implementer, a massive institutional development program would not be needed at local levels. It was recommended that the Government adopt a phased plan, stretching over ten years, for implementing decentralization. It would focus on (a) priority investment sectors, (b) the structure of authority in these sectors, taking into account the Assemblies' comparative advantages, jurisdictional issues, and the scope of "spillovers" of various functions, (c) the incentive effects of financial and personnel management systems, (d) rationalizing intergovernmental fiscal arrangements, (e) improving financial management among the Assemblies, and (f) reforming personnel management to increase performance and accountability. B. MAJOR ISSUES Ineffective Devolution 6.4 The structure of authority regarding the acquisition of financial resources, the expenditure of those resources, and the careers of political decision-makers and government staff influence incentives for local government performance. There remains a fundamental incompatibility between the devolution objectives of GOG policy and the highly centralized financial and personnel management systems which remain in place. 49 6.5 The devolution of functions under the 1993 Local Government Act is clear, but it has not been accompanied by any explicit measures requiring central ministries and departments to cease their direct involvement in what should now be local activities. Thus, the present situation allows both central and local governments to claim legitimate authority to perform the same functions. Even with the impending implementation of the District Assemblies Common Fund (DACF; see Chapter VII), it is not clear whether there will be a net transfer of funds from the central to the local level. The decision to use the funds allocated to the DACF in 1994 for unfinished central agency projects--as opposed to projects chosen by local governments--reflects the GOG's ambivalent approach. There has so far been little or no pressure on central ministries and departments, to change their traditional "top-down" ways of operating. Relationship Between Central Agencies and Local Government 6.6 Numerous line ministries and parastatals affect the cross-sectoral operations of local governments. Although the local level offices of these various ministerial departments and parastatals are supposed to be abolished or transferred to local Assemblies, they continue to exist and function as central government dependencies. Many senior technical staff at local levels continue to identify themselves with agencies at the central level, especially with respect the progression of their own careers. Further, even large Metropolitan and Municipal governments rely on services provided by regional offices of central government departments. The problems of overlapping central and local responsibilities mentioned above are compounded by the ambiguous role of the 10 Regional Coordinating Councils (RCCs). Finally, to the extent that urban local governments depend on GOG departments and ministries at intermediate levels, the fact that some central government departments have deconcentrated themselves within boundaries which are not coterminous with those of Metropolitan/Municipal Assemblies nor Regional administrations creates yet another complicating factor. For example, the ministries of Roads and Highways, Agriculture, Health, and Works and Housing would need to undergo substantial reorganization along spatial lines if GOG's decentralization policy is to be fully implemented. 6.7 As is the case with all government ministries, the 1992 Constitution does not make explicit provision for the Ministry of Local Government and Rural Development (MLGRD). It is expected that MLGRD will continue in the forseeable future with its current mandate and structure which provides for the performance of the following functions: (a) developing policies and legislation with respect to local goverment; (b) supervising and monitoring local administration; (c) monitoring the implementation of the Constitution with respect to local government issues (including assisting District Assemblies in drafting by-laws and vetting such by-laws on behalf of Parliament); (d) auditing local government financial accounts; (e) providing guidelines to local governments with respect to procurement, tax rates, and the like; and (f) facilitating the provision of offices and residential accommodation for local government staff. In addition, in the absence of actual implementation of composite budgeting, the MLGRD serves as an interlocutor between local governments and international donor agencies with 50 respect to projects that are appropriately implemented at the local level. It is not clear whether MLGRD's primary function is to manage the operations of local governments on behalf of GOG or to represent the interests of local governments to central government. MLGRD attempts to perform both roles, but clearly gives higher priority to the former. As an alternative, the National Association of Local Authorities of Ghana (NALAG) could be strengthened to be the major representative of local governments' interests. Lack of Coordination 6.8 The ambiguities discussed above as well as the fragmentation of responsibilities for different urban services (see Chapter 5) make planning and coordination almost impossible. At the most basic level, this is manifested in problems like streets being dug up for laying pipes soon after they are paved or delays in relocating utility poles to make way for road widening. At the city-wide level, the situation prevents integrated budget planning and priority-setting. Relationships Within Local Government 6.9 For policy-making the Assemblies have standing committees, some of which are required by GOG legislation and others, including ad hoc committees, which can be established at the discretion of each Assembly. For the purposes of implementing the decisions of the Assembly, each local government has executive departments, overall responsibility for which is vested in a Chief Executive. The types of departments applicable to Metropolitan, Municipal, and District Assemblies are specified by the Local Government Act of 1993. 6.10 Authority relationships among Assembly members, executive staff, and staff of previously centralized departments assigned to local levels remain ambiguous. Local government Assemblies have been established as political entities, but they seem to function more as advisory bodies to the technical staff than as primary decision-makers with respect to local government development policy. That is due, at least in part, to the attitude of many Assembly members who do not view the staff as their own. Although the heads of local-level departments are ex-officio members, without vote, of the relevant technical committees of the Assemblies, they are often not informed of or invited to meetings. In return, Assembly members contend that they are not informed of the practical financial details of projects or consultants' reports managed by the departments. Personnel Policy 6.11 Currently, all but the lowest ranking staff assigned to local governments are employed by the unified Central Government Civil Service. The Local Government Act of 1993 mandates the establishment of a Local Government Service, separate from the Central Civil Service. Nevertheless, it is likely that a Local Government Service, if actually established, will remain a centralized service managed by the central government. Either type of unified public sector personnel system has negative incentive effects on local 51 government management; i.e., staff responsible for implementing the decisions of local Assemblies are unlikely to do so efficiently and effectively if their career and compensation prospects are determined by authorities other than the Assemblies for which they ostensibly work. The lack of accountability of most staff (especially professional and technical staff) to local Assemblies is one of the most important impediments to improving local government performance. C. CONCLUSIONS 6.12 The above constraints on local governments' performance can be addressed in various ways: * Ghana's revitalized Civil Service Reform Program will substantially reduce local governments' need to absorb excess civil service personnel; therefore, local governments may assert more direct authority over the employment of staff directly responsible to them through the use of fixed-term personnel services contracts or the equivalent. * Recently-adopted voting practices at the District level will have a significant impact on local government management. Two-thirds of the members of the Assemblies are now elected by popular ballot. Also, the central government's nominee for the District (or Municipal or Metropolitan) Chief Executive must be approved by no less than two thirds of the Assemblies. These measures will help make the legislative and executive leadership of the Assemblies more responsive to the local public. * The assessment of delivery systems in Chapter V shows that the devolution of authority and resources for urban services is occurring, albeit very slowly. External assistance agencies can, through their projects and programs, assist in strengthening the institutional capacity of the Assemblies. * For local government staff to perform effectively under a regime of truly devolved responsibility, there is no substitute for each Assembly having the authority to hire and fire its staff. A unified Local Government Service under central control will not provide the required incentive structure. In the long run, Assemblies will need to have autonomy in personnel management. In the short run, the problem will be mitigated slightly by the shrinkage in the role of the public sector and the use of contracting by local governments (privatizing individual positions). * In the longer term, as local governments adopt more efficient institutional arrangements for delivering urban infrastructure and services (see Chapter V), their staffing and skill requirements will change. With the contracting 52 out of most routine functions, local governments will require few semi- skilled and unskilled staff. Professional and technical staff presently devoted to the direct provision of services will gradually give way to a smaller number of skilled personnel capable of managing service contracts, lease contracts, franchises, and the like. The assumption of substantial new functions will occur first in the major cities, then gradually spread among secondary cities. A limited supply of trained, experienced personnel and the difficulty of attracting such personnel to work in smaller cities and towns will limit the pace of this process. As a result, centralized agencies, in which scarce skills are concentrated, will continue to play a large role in the provision of some types of urban infrastructure and services--particularly roads and water- for many years to come. 53 VII. URBAN FINANCE 7.1 Improving urban infrastructure and services requires the mobilization of more financial resources for both capital investment and O&M. This chapter examines the status of local revenue collection and intergovernmental fiscal relations in order to identify issues that need to be addressed as 1part of the Urban Strategy. Efforts to increase own source local revenues in recent years have centered on the revaluation of property rates and the collection of property taxes. These measures have produced some gains, but their sustainability is subject to the ability of local governments to become more responsive and accountable for the provision of services. Local revenue collection remains far below its potential. In addition to property taxes, there is major scope for generating revenues from business taxes. Transfers are to be increased through a new District Assemblies Common Fund which will by law annually distribute to the DAs not less than 5 percent of total GOG revenues specifically for development (capital investment). The key issue with regard to the DACF is avoiding a disincentive effect on local revenue mobilization. Local governments in Ghana have not yet demonstrated the ability to service debt (through consistent budget surpluses), but some could begin to do so by making regular payments into their own special capital investment accounts. Eventually, this may establish sufficient evidence of creditworthiness. For the moment, the creation of an "urban development bank" or similar entity is not recommended. A. OWN SOURCE REVENUES 7.2 The Local Government Act No. 462 of 1993 empowers DAs to generate revenue from levies, fees and licenses for specified activities (Annex 6). The law provides that such revenue shall be taxed or collected exclusively by DAs, although they may authorize another government body to collect revenue on their behalf. Some taxes (land and tribunal fees) are collected by the central government on behalf of all DAs and redistributed to them. Some DAs receive revenue in the form of royalties from the exploration of resources such as timber or minerals. Royalties are collected by the relevant central government agency, and a proportion of the royalty is remitted to the DA. Local taxes can take the form of either general rates, which are levied over the whole District, or special rates, which are levied over a limited area of the District for the purpose of specific activities in that area. Property rates may be levied upon the owner of property based on its value. In addition, a basic rate, which is effectively a poll tax payable by all adults residing in an area, can also be levied. In practice, only a few of the many revenue sources tapped by DAs--such as property rates and market fees--generate the bulk of local revenue. 7.3 Table 7.1 shows that, in nominal terms, all five of the largest urban Assemblies substantially and steadily increased their own source revenue mobilization over the 1988- 54 1992 period. However, in real terms the own source revenues of the five cities together grew at barely 2.5 percent per year, well below the urban population growth rate of over four percent. Table 7.1 Own Source Revenues of the Five Main Cities, 1988- 1992 (Millic -s of Ce is) Average Annual 1988 1989 1990 1991 1992 Growth Rate (%) Accra 328 544 766 1117 1076 34.6 Tema 175 208 250 306 623 37.4 Kumasi 331 438 561 837 729 21.8 Shama-Ahanta 78 108 138 177 218 29.3 Tamale 22 46 50 62 67 32.1 Total 934 1344 1765 2499 2713 30.5 Total in Constant 1 1988 Cedis 934 1021 1077 1100 1031 2.5 Source: World Bank tabulation of data from Metropolitan and Municipal Assemblies. 7.4 Perhaps the most striking thing about local financial resource mobilization is how little is actually raised. The per capita amount of own source revenue collected by the five largest urban Assemblies as a group in 1992 was only 0936 (about US$2.25 per capita at the 1992 exchange rate). Per capita local revenue collections in 1992 varied from a high of 02,090 for Tema to a low of 0268 for Tamale. Accra generated 0800, Kumasi 01,216, and Shama-Ahanta 01,172 per capita. Property Rates 7.5 Property rates are potentially the most lucrative source of local revenue for the urban local governments. The Land Valuation Board (LVB), established in 1986, took over the property tax valuation work of the former Land Valuation Division of the Ministry of Local Government. Under the IDA-assisted Accra District Rehabilitation Project (ADRP) and with the assistance of United Kingdom Valuation Office (UKVO), LVB carried out a revaluation exercise in Accra which was completed in 1988. As a result, Accra achieved a 70 percent increase in property tax revenues in real terms between 1988 and 1990 (see Table 7.2). Following completion of property revaluation in Accra, LVB undertook a similar exercise in Tema which has been successfully completed. With assistance of the ongoing World Bank-financed Urban II Project, the property rating systems in Tamale, Kumasi, and Shama-Ahanta (Sekondi-Takoradi) are also being upgraded. 55 Table 7.2 Property Tax Revenues, 1988 - 1992 (1988 Constant Cedi Millions) Average Annual % 1988 1989 1990. 1991 1992 Change 88-92 Accra 74.8 99.4 126.8 122.7 76.4 0.5 Tema 93.0 96.8 82.3 67.7 87.7 -1.5 Kumasi 58.6 43.8 51.4 45.6 32.0 -14.0 Shama-Ahanta 12.9 11.1 18.0 18.3 18.3 9.1 Tamale 1.5 0.9 0.8 0.7 0.6 -20.5 Source: World Bank tabulation of data from Metropolitan and Municipal Assemblies. 7.6 Table 7.3 shows that, in all five Districts, at current prices, property rate income has recorded an increase for the period 1988 to 1992. In Accra and Kumasi property tax income increased each year from 1988 to 1991, but declined in 1992. This reflects a breakdown of the revenue collection and monitoring system. For Accra, this was due in part to frequent changes in leadership, i.e., three Metropolitan Secretaries in less than two years. Recently it was discovered that Accra lost about 0170 million in 1992-93 due to misappropriation by rate collectors. AMA has taken action to correct the problem, collect the misappropriated revenue to the extent possible, and prosecute some of the revenue collectors. In real terms the trends are mixed. Only Shama-Ahanta was able to sustain a positive increase in real property tax collections over the five year period. In Accra, Tema, and Kumasi the overall trend is flat or declining in real terms (which means that real per capita property tax revenues have declined). Table 7.3 Property Tax Revenues, 1988 - 1992 (Nominal Cedi Millions) Average Annual % 1988 1989 1990 1991 1992 Change 88-92 Accra 74.8 130.9 207.8 256.2 - 201.1 28.0 Tema 93.0 127.4 135.1 153.8 228.7 25.2 Kumasi 58.6 57.6 84.2 103.7 84.3 9.5 Shama-Ahanta 12.9 14.7 29.5 41.6 48.2 39.0 Tamale 1.5 1.2 1.3 1.5 1.6 1.6 Source: World Bank tabulation of data from Metropolitan and Municipal Assemblies. 7.7 As shown in Table 7.4, the property tax is among the three most important sources of own source revenue in all of the main cities except Tamale (which relies more heavily on other sources). It accounted for 24.7 percent of all own source revenues for the four largest cities (Accra, Tema, Kumasi, and Sekondi-Takoradi) over the whole five 56 year period. However, the yield is well below the estimated potential of a fully implemented and efficiently operated property tax system. In the appraisal of the Urban II project in 1990, it was estimated that revenues from property rates had the potential to increase in real terms between 270 percent in Tema and 900 percent in Tamale by 1996. The unfulfilled potential is shown most clearly by the minuscule amounts of property tax revenues per capita collected by the cities in 1992: Accra 0150; Tema 0767; Kumasi 0 140; Shama-Ahanta 0259; Tamale 06. Table 7.4 Ranking of Own Source Revenues By -mounts Collected, 1988 1992 Accra Tema Kumasi Shama- Tamale Ahanta 1. Other Fees and Charges* 1. 2 2 1 2 2. Foodstuff Exit Fee 1 3. Property Tax 2 1 3 3 7 4. Miscellaneous Fees 3 3 4 4 5 5. Trading Services 4 7 7. 5 8 6. Market Fees 5 4 1 2 3 7. Lorry Park Fees 6 5 5 7 6 8. Basic Rate 7 6 6 6 4 * Mainly annual license fees on businesses and self-employed persons. Source: World Bank tabulation of data form Metropolitan and Municipal Assemblies 7.8 The recent efforts to revalue properties have been helpful, but fundamental problems remain. Some relate to the local government system in general (see Chapter VI and below). Local governments of the main cities failed to establish the valuation, billing, and collection mechanisms needed to sustain increased property tax collections. AMA's property valuations have not been updated since 1988 due to resource constraints in LVB. AMA has engaged the services of a private consultant to identify newly constructed buildings and to support LVB in carrying out the valuation of the new properties. There are two possible approaches to the problem of regular updating of property valuations: (a) the operations of LVB could be decentralized in such a way that some LVB staff are seconded to DAs or (b) DAs are given authority to establish their own valuation departments to ensure that the valuation rolls are kept current. In any case, LVB should develop a simple indexing system that DAs can use to keep up with changes in market property values between formal revaluations. Business and Market Fees 7.9 Table 7.4 shows that "Other Fees and Charges" is the first or second most important generator of own source revenues for all five of the main urban Assemblies. This category mainly represents revenues from a multitude of license fees and similar levies on businesses and self-employed persons in the District, as per Annex 6. These fees in aggregate represented 31 percent of all own source revenues of the four largest urban Assemblies during the entire 1988-92 period. The main problem is that there are too many different types of levies, making them difficult and unproductive to collect. In addition, 57 the fees are levied as flat rates (regardless of the volume of business) and are extremely low. Local business taxes offer enormous future potential as a major revenue source for the Assemblies. Key measures to be taken by the Assemblies include simplifying the number of levies, setting rates at higher (though affordable) levels, and ensuring that billing and collection is performed cost-effectively. 7.10 Market fees are important producers of own source revenues in Kumasi, Shama- Ahanta, and Tamale. Kumasi obtained 46 percent of all its own source revenues from market fees over the 1988-92 period; the figure was 55 percent in 1992. Basic Rates 7.11 The basic rate is a poll tax levied on all adults residing in a District. The present standard rate is 0200 per person per year in all Districts. Collection of basic rates is far below the potential. For example, in Accra, the largest Metropolitan Assembly in Ghana with an estimated population of 1.3 million, only 017 million was collected in 1992. This is only about 10 percent of the total estimated potential. The basic rate is currently among the least important own source revenues of the larger cities (Table 7.4). The cost effectiveness of collecting the basic rate, especially at its current low amount per head per year, is questionable. The regressive nature of the tax also raises equity issues. B. CENTRAL GOVERNMENT TRANSFERS 7.12 The main objectives of central government transfers to DAs include: (a) funding development programs of national significance; (b) encouraging DAs to develop programs in line with national policy and ensuring compliance with national policies and standards; (c) stimulating growth in local economies; (d) securing an equitable standard of services; and (e) compensating DAs with a narrow internal revenue base. Transfers include both block and targeted grants. Block grants are available for general use by DAs, whereas targeted grants are provided for specific programs or projects. Targeted grants may be matching or non matching. Matching grants create incentives for raising local revenue as DAs receive an amount equal to some percentage of monies raised by themselves, as with the 50 percent salaries grant for category D (unskilled) staff employed by DAs. Several ministries, other than MFEP and MLGRD, also provide matching grants to DAs. For example, the Ministry of Education provides matching grants to cover two-thirds of the cost of senior secondary school construction when DAs meet the remaining one-third. Matching grants are generally targeted for purposes and according to criteria established by central government. Non-matching grants include those provided for payment of the salaries of categories A, B and C (managerial, technical, and skilled) staff assigned to DAs. 58 District Assemblies Common Fund 7.13 Article 252 of the 1992 Constitution establishes a District Assemblies Common Fund (DACF) which is to receive an annual financial allocation by Parliament of not less than 5 percent of total GOG revenues. DACF monies are to be used only for development (capital investment). Quarterly allocations will be made to DAs from the Fund in accordance with a formula which is being developed by the Fund Administrator and has been presented to Parliament for its approval. The formula is based on the DAs' population, per capita income, and local re source mobilization efforts, among other criteria. About 034 billion are expected to be transferred through DACF in the 1994 budget. In the first year, it appears that the DACF monies will probably be used for the completion of ongoing projects of "decentralized" agencies. However, according to MLGRD the intention is for DAs to have discretion in determining their own priorities within the overall national policy. 7.14 DACF resources will be a net addition to local government resources; MLGRD has stated that they will not substitute for any other central government grants. The key issue that emerges from the GOG decision to use DACF resources exclusively for development is how to finance the resultant recurrent expenditures. Three possible options for consideration are: (a) a percentage of DACF be allowed to be used to meet recurrent expenditures resulting directly from the capital investments funded from DAFC resources; (b) DAs set aside funds from their own resources to meet the estimated recurrent costs; or (c) GOG provides additional resources to DAs to meet such recurrent expenditures, particularly if resources were previously provided by GOG for specific services now being decentralized. This issue needs to be addressed at the outset to avoid deferred maintenance problems which have plagued Ghana in the past. 7.15 Local governments in all countries adjust their local revenue mobilization and budgeting in accordance with the prevailing system of transfers from the center. The experiences of other countries (e.g., Kenya) show that where the rules of such systems and the amounts transferred are not predictable and reliable, intergovernmental fiscal relations risk substantial waste, inefficiency, and even breakdown. Salary Grants 7.16 Salary grants comprise: (a) payment by GOG of 100 percent of salary costs for Category A, B and C staff assigned to the District level including those from the 22 decentralized departments and (b) GOG grants for 50 percent of salary costs of Category D staff employed directly by DAs. The balance of Category D salaries is met by the DAs from their own locally-generated revenue. Salary grants in 1992 ranged between 16 percent (Accra) and 48 percent (Tamale) of total revenues among the five main urban Assemblies. Although the salary grants have increased steadily in nominal terms over the 1988-1992 period, they have declined as a proportion of total revenues (most noticeably in Accra and Kumasi) due to increases in own source revenues. 59 Ceded Revenues 7.17 Ceded revenues, comprising entertainment duty, casino revenue, betting tax, business registration fees, entertainment tax and daily transport tax, are locally assigned revenues collected by the central government and redistributed to DAs. A sum equal to the amount of tax collected from ceded revenue sources by the Internal Revenue Service (IRS) during the previous year is paid quarterly into the Fund Account, which is controlled by MLGRD. MLGRD determines the actual distribution to each of the 110 DAs according to a formula based on the number of towns and the total population in a District, modified by considerations of equity among districts. Disbursements are normally made in one lump sum each year. 7.18 Total ceded revenues nationally jumped from 0 205 million in 1990 to 0 600 million in 1991 and to 0 2,400 million in 1992. These large increases are primarily due to an expansion of the sources of revenue, not higher yields from the same sources. However, ceded revenues represent a minor share of income to the five main urban Assemblies. In 1992 ceded revenues to the five cities accounted for a total of about 0 180 million, only 3.8 percent of their total revenues (see Annexes 7 and 8). In 1993 MLGRD did not distribute the ceded revenues to the DAs; instead, it used the resources to purchase cesspit emptiers and distributed them to all but the five largest DAs which are benefiting from the World Bank-financed Urban II Project. This action clearly demonstrates that, in spite of the fact that ceded revenues are not, strictly speaking, central government transfers (they are revenues to which DAs are legally entitled which the central government merely collects and distributes), the central government can easily take away the DAs' discretion concerning the use of their resources. Grant in Lieu of Rates 7.19 Property owned by the Central government is not subject to payment of property rates. Therefore, GOG is supposed to provide a grant in lieu of rates to DAs to compensate them for the loss of income from such property. The grant in lieu is rarely paid in practice (see Annex 7). Even if the central government were willing to take the grant in lieu seriously, the amounts paid would be arbitrary, because there are no guidelines on how it is to be determined. The Local Government Act of 1993 simply provides that the Government will pay grants in lieu, of rates of such sums and at such times as may be agreed between GOG and the rating authority. It would be preferable for the payments to be based on a transparent, predictable criterion, ideally the actual rates payable for the GOG properties. C. OWN SOURCE REVENUES VS. TRANSFERS 7.20 Among the five largest urban Assemblies the degree of dependence on central government transfers varies considerably. As shown in Table 7.5, Tema and Kumasi received only 23 percent and 21 percent, respectively, of their total revenues from 60 transfers over the 1988-92 period. By contrast, the share of transfers received by Accra, Shama-Ahanta, and Tamale averaged about half of total income over the same period. The reliance on central government transfers of Ghana's other District Assemblies is much greater than that of the five main urban local governments. Accra's dependence on transfers had been declining up to 1990 (down to 29 percent), but increased dramatically as of 1991 due to the transfer of the Accra Metropolitan Roads Unit (AMRU) from DUR to AMA. This carried with it a substantial transfer of funds from the National Road Fund for the maintenance of urban roads in Accra. The data in Table 7.4 indicate that the degree of reliance on transfers of the five Assemblies as a whole has not changed significantly in recent years. Once the District Assemblies Common Fund (see above) comes into operation, the share of Assemblies' budgets obtained from transfers will increase. Table 7.5 Central Government Revenue Transfers As a Percentage of Total Revenues, 1988 - 1992 (Including Salary Grants) Years Accra Tema Kumasi Shama-Ahanta Tamale 1988 41 18 24 50 62 1989 34 21 21 45 47 1990 29 23 19 52 51 1991 49 26 17 46 55 1992 55 24 24 44 50 Weighted Average 46 23 21 47 55 Trend Decline, then Slight Rise Decline, Slight Decline Decline, Rise then Rise then Stable Source: World Bank tabulation of data from Metropolitan and Municipal Assemblies. D. EXPENDITURES Recurrent Expenditures 7.21 District Assemblies classify recurrent expenditure into: (a) salaries and wages; (b) transport and traveling costs; (c) maintenance and repairs; and (d) overhead and operating expenses. In practice, the allocation of expenditure to various sub-heads is not done in a consistent manner. This can make it difficult to compare expenditure trends between local governments. For example, for 1990 Accra's travel and transport and maintenance and repairs sub-heads accounted for 0.6 percent and 12.6 percent of its total expenditure, compared to Kumasi's 16.2 percent and 3.0 percent respectively (Annex 8). 7.22 In Accra, Tema and Kumasi, salary costs as a proportion of all recurrent expenditures (Table 7.6) declined substantially between 1988 and 1992, from over 70 percent to between 36 percent and 54 percent. Shama-Ahanta and Tamale's shares of salary costs remained relatively high in 1992, at 74 percent and 70 percent respectively. In Accra the decline in the share of salary costs in 1991 and 1992 was complemented by a 61 very large increase in the share of expenditures for "maintenance and repair", corresponding mostly to the transfer of road maintenance funds from DUR to AMA's accounts. As Table 7.6 shows, the share of expenditures on maintenance and repair did not increase in the four other cities over the five year period. The minuscule percentages for repair and maintenance that appear in the table are deceptive because they do not reflect the salary costs of Assembly employees engaged in repair and maintenance work. Table 7.6 Salary Expenditures and Maintenance/Repair Expenditures as a Percentage of All Recurrent Ex penditures, 1988 - 1992 1988 1989 1990 1991 1992 Salary as Percentage of Total Accra 70 65 60 40 36 Tema 71 63 62 56 47 Kumasi 73 72 67 59 54 Shama-Ahanta 73 83 86 82 74 Tamale 85 84 68 71 70 Maintenance and Repair as Percentage of Total Accra 5 8 13 49 49 Tema 4 8 3 2 2 umasi - 6 7 8 4 Shama-Ahanta 5 4 1 1 2 Tamale 3 2 2 4 5 Source: World Bank tabulation of data from Metropolitan and Municipal Assemblies. 7.23 One commonly-used measure of local governments' financial soundness is whether their own source revenues cover their recurrent expenditures. In the 1988-1991 period, only Tema and Kumasi raised amounts of own source revenue greater than their recurrent expenditures. In 1992 only Tema achieved this position. This shows that even the largest urban Assemblies in Ghana have a long way to go in order to reach financial self-sufficiency in recurrent expenditures. This would be the first step towards the ability to leverage credit for development investments. Capital Expenditures 7.24 It is very difficult to estimate the share of revenues available to the DAs for capital investment because of anomalies in the way revenues and expenditures are classified and presented in their budgets and accounts. From the data collected for the five largest urban Assemblies it appears that, overall, around 80 percent of revenues go for recurrent expenditures and 20 percent for capital investment. As the DACF becomes operational in 1994, the resources available to DAs for capital investment will increase significantly. 7.25 Sources of capital finance currently available to DAs are either a surplus of total revenue over total expenditure or GOG grants. Although DAs are empowered to borrow, in practice they cannot do so because they are considered poor credit risks by lending 62 institutions. One of the reasons for this is that DAs have not had opportunities to establish histories of servicing debts. One way of overcoming this problem would be to set up a' local capital fund within each DA, initially capitalized from donor monies. Loans for individual capital schemes would be taken out by the DA from its fund in the same way as a DA would borrow from an outside lender, for a specified period at a market interest rate. Annual repayments of principal and interest, which would be a charge to the current account, would be made to the fund, building up a store of capital and demonstrating the seriousness and ability of the DA to service debts. This should generate confidence among lenders, encouraging them to lend to the DA for future projects. Tema has achieved a consistent surplus of direct local revenues over recurrent expenditures which could be available for debt servicing, for example. In the medium term future, GOG block grants should form part of the resource base for enhancing the DAs' debt servicing potential. Eventually, DAs could be in a position to issue their own borrowing paper. E. COMPOSITE BUDGETS 7.26 The composite budget was conceived in 1988 as a tool for enabling DAs to set and implement their own priorities and for fostering financial discipline and coordination at the District level. Composite budgets, to be prepared by each District, were to consist of an integrated program of expenditures of the DA and the 22 decentralized departments within a single budget document. Composite budgeting has so far not been implemented. The Ministry of Finance and Economic Planning has not issued guidelines on what should be included in composite budgets or the procedures for preparing them; nor has MFEP made available a slot in the annual budget cycle for hearings on composite budgets. If composite budgeting is to be introduced, the procedures need to be clarified and, if they are to be properly implemented, the decentralized agencies at the District level must be explicitly instructed to cooperate by their parent organizations. F. ACCOUNTING, AuDrrING AND FINANCIAL MANAGEMENT 7.27 The District Assemblies' accounting systems and the mechanisms for auditing the DAs' accounts need to be improved in the interest of providing adequate financial information required for management. The accounting systems used by DAs follow standard GOG guidelines and formats. Currently, DAs' accounting systems consist of monthly trial balances together with a final set of annual accounts based on receipts and payments. This system relies largely on manual recording (except in Accra) and leads inevitably to incomplete and unreliable reporting. Effective policy-making, budgeting, and expenditure control requires reliable information on current performance, projected trends, and the probable consequences of alternative options. Existing local government procedures for accounting and auditing do not provide such information in a timely manner. The World Bank-financed Urban II Project is undertaking the development of computerized accounting, billing and collection systems for the five main urban DAs. 63 7.28 In the near future, local governments will need to adopt mechanisms to assess the effects of capital investments on their multi-year recurrent expenditure budgets. 7.29 To upgrade the financial management capacity of DAs, improvements in manpower, equipment, and skills are required. While the educational and professional qualifications of senior treasury staff in the five largest urban Assemblies appears generally adequate, the staff tend to lack up-to-date knowledge of modern financial management techniques. At the middle and lower levels, there are some shortages of personnel with adequate training in basic financial procedures. 7.30 There appears to be considerable scope for improving the effectiveness of internal audit. Auditors would benefit from enhanced training facilities to upgrade skills including audit planning, statistical techniques and systems/management/efficiency auditing. G. CONCLUSIONS 7.31 Among all local governments in Ghana, the five largest urban Assemblies have the highest shares of revenues generated from local sources. Even in these cities, however, the amounts of own source revenue collected are extremely low on a per capita basis. Recent experience shows that the provision of technical assistance, training, and equipment is necessary but not sufficient to achieve improved mobilization by local governments of own source taxes and fees. Such inputs can produce short-term gains, but they tend not to be sustained. Sustainable improvements in local revenue collection will require developing incentives for local government politicians, executives, and staff to view themselves principally as providers of services to the public. As the public develops confidence in local government's responsiveness and competence, people's willingness to pay higher taxes will grow. 7.32 The impending increase in central government transfers from the District Assemblies Common Fund could undermine the efforts to raise own source revenue collections locally if the DACF funds are viewed by DAs as a substitute for their own resources. Ensuring that the DACF is used, as intended, only for capital investments can help to avoid this. Even with the DACF, the DAs need to be made aware of their responsibility to increase their own source revenues to cover the recurrent costs of infrastructure and services. On the other hand, if the central government retains control over the choice of projects financed by the DACF, DAs will not perceive the projects as "theirs", and local revenue mobilization efforts by DAs for O&M will not be forthcoming. 7.33 At present own source revenues do not cover recurrent expenditures even in the largest cities (except Tema). Achieving a surplus of locally-raised revenue over expenditure is a major objective that the Assemblies should strive for, as their expenditures are basically for local administration and services. Reaching this objective will be the first step toward financially sound operation and creditworthiness. The introduction of a 64 special "fund" for urban infrastructure is not recommended. Local assemblies that are consistently achieving budget surpluses could begin establishing creditworthiness themselves by making regular repayments to their own capital investment funds (which could be capitalized initially by grants). 7.34 The property tax remains a major underexploited source of local revenue. The main challenge facing the Assemblies is to obtain the authority to perform their own periodic revaluations (so as not to have to wait for LVB to do it), to implement a yearly indexing system, and to better manage their billing and collection. There is also considerable potential for raising more revenues from local business taxes (licenses) by weeding out unproductive taxes and using cost-effective collection methods. 65 VIII. URBAN ENVIRONMENT AND LAND 8.1 Chapter IV presented considerable evidence that the urban poor suffer disproportionately from environmental problems associated with inadequate water, sanitation, and drainage. Community-specific interventions to address these problems are a high priority. The Urban Strategy also needs to take into account the broader framework of policies and institutions that is being developed in Ghana for dealing with environmental issues. The Environmental Protection Council is increasingly involved in setting standards that affect urban development interventions. Urban land use planning and control systems should give high priority to the preservation of environmentally valuable areas and the siting of environmentally sensitive facilities. Public participation in environmental affairs should be encouraged through local governments and non-governmental organizations. 8.2 Complementing the need to protect the environment in urban areas is the need to make land available for urban uses to accommodate the rapidly growing urban population and provide for economic growth. The urban land market operates in a highly inefficient and inequitable way. Gaining access to land is difficult, especially for lower-income people. Over-regulation and the difficulty of acquisition make land inordinately expensive. Resources are wasted through rent- seeking in land allocation and litigation over property rights. Lack of secure legal title restricts access to credit and prevents productive development. One of the most effective measures that can be taken in the short to medium term is acceleration of modern land titling and registration, which has started but is proceeding slowly. A number of regulatory and administrative reforms have been recommended by Ghanaian experts to deal with other land issues; these should be taken up at policy- making levels. Simplified, enforceable, and participatory systems for land use control need to be introduced, and an enabling environment for private sector land development created. A. THE URBAN ENVIRONMENT Current Conditions and Priorities 8.3 Environmental problems in Ghana's urban areas are primarily related to inadequate sanitation and solid waste management (see Chapters III and V). Other specific problems requiring attention include localized water pollution from industrial wastes, poor indoor air quality due to the use of biomass fuels, and the declining availability of open spaces in Accra and Kumasi. Other issues are not significant at present. Particulate concentrations in ambient air in residential areas of Accra and Tema are below WHO recommended limits. While outdoor air pollution may become a problem as motorization and industrialization proceed, there is no evidence that this is currently so. The pH of rainwater (in the range of 6.2-6.5 around Accra) suggests low levels of acidity. 66 There are zonal variations in the quality of surface water, but chloride levels are generally within WHO guidelines. 8.4 A policy-making agency, the Environmental Protection Council, was established in 1974. Since 1984 the government, with encouragement from foreign assistance agencies, has taken a pro-active stand on environmental issues. It commissioned an Environmental Action Plan (EAP) which was prepared for the period 1991-2000. The EAP includes urbanization as one of four main areas for intervention. Sanitation and waste disposal are highlighted as major issues. It calls for the implementation of urban waste management and sanitation projects as a top priority; the improvement of urban drainage in coastal cities; the establishment and implementation of environmental and health standards; and the adoption of effective land use control mechanisms. The plan develops a framework for management of the nation's natural resources. It proposes (a) standards for air, water and land quality and industrial emissions; (b) legislation of ambient quality objectives for various environmental media and pollutants; (c) a regulatory framework; and (d) the strengthening or creation of agencies which would be given responsibility for monitoring and enforcement. 8.5 The Greater Accra Metropolitan Area (GAMA) has been the focus of the available environmental studies. GAMA accounts for roughly one third of the nation's urban population and about the same proportion of manufacturing industries. Relative to the rest of the country, GAMA faces by far the biggest urban environment issues. The range of environmental problems in Accra illustrates the range of issues facing the remaining urban centers in Ghana, though on a different scale. 8.6 In 1991-92 the UNDP/UNCHS/World Bank Urban Management Programme undertook a series of "rapid urban environmental assessments" in various cities around the world including Accra.1 As part of the Accra exercise, 33 public and private organizations were interviewed and a one-day forum was held with 50 participants from government, the private sector, academia, and non-governmental/community organizations. The questionnaires, coupled with data gathered for the assessment, yielded a ranking of urban environmental problems. The two highest priorities from this analysis were poor sanitation and pollution of surface water. Inadequate solid waste management, contamination of ground water, coastal pollution, and indoor air quality were ranked as medium priority problems.2 8.7 Another study3 identified the key environmental concerns in GAMA as: (a) pollution of the Korle lagoon and Odaw River, mainly from domestic wastes, (b) health problems from improper excreta disposal in drains and on beaches, (c) food and water J. Leitmann (op. cit.) 2 The forum also identified and prioritized key urban environmental problems. The highest priority problems, according to the participants, were inadequate solid waste management, poor sanitation, poor drainage, and ineffective land use controls. A.T. Amuzu and J. Leitman, "Accra,' in EaiM 1994. 67 sold and consumed under unhygienic conditions, (d) poor inside air quality in overcrowded slum households throughout the AMA caused by the combustion of bio- mass, and (e) a lack of green, open spaces. 8.8 The inter-related problems of poor sanitation, inadequate solid waste management, and deficient storm drainage are reviewed in Chapters III and V of this report. Chapter IV discusses the disproportionate impact of these problems on the urban poor. 8.9 An AMA solid waste landfill--finally closed in early 1994--is located along one bank of the Korle Lagoon. This site has been used to dispose of hospital waste as well as refuse. In the same area, along the sea beach, there is a major disposal site for night soil and septage collected from pan latrines and septic tanks. This waste washes directly into the sea and back into the Korle Lagoon at high tide. High levels of total and fecal coliform have been measured along the Accra beachfront. Over and above the decline in water quality and generation of hydrogen sulphide, the Korle Lagoon, which is Accra's main storm drainage outlet, has serious silting problems. This has severely reduced its carrying capacity for storm water. 8.10 Monitoring and control of industrial pollution is virtually non-existent and needs to be improved before the problem becomes much larger. GAMA contains most of the country's manufacturing plants, including food processing, pharmaceuticals, oil refining, garment production and vehicle assembly. Most of the industries in Tema and Accra are located within the catchment areas of the Odaw River and the Korle and Chemu Lagoons. Untreated industrial waste water is discharged into the storm drainage system which eventually empties into these waterways. In Tema, oil from the Tema refinery, the only oil refinery in the country, finds its way into the Chemu lagoon. The Chemu lagoon also receives industrial discharges and is consequently heavily polluted. The dissolved oxygen levels in GAMA's lagoons are rather low, averaging 0.5 mg/ in the Chemu lagoon and 4.4 mg/ in the Korle lagoon. Downstream stretches of the Odaw River are extensively polluted with organic and inorganic matter; water quality tests show the presence of lead, zinc, cadmium and chromium. 8.11 Accra and other coastal settlements suffer from shoreline erosion due to winds and waves. The government has from time to time erected gabions and rock breakwaters to arrest the problem. Shoreline erosion from sand extraction in and around Accra has generally been halted, but quarried land has not been reclaimed. Environmental Management 8.12 The organizations involved in urban environmental management encompass the central government, local Assemblies, the private sector, and conununity groups. The instruments available to these entities include legislation, fiscal measures, planning mechanisms, regulatory systems and standards, community organizing, public information, and education and training. The impact of existing legislation, regulations, and standards 68 is limited by inadequate institutional capacity for monitoring, enforcement, and coordination. Fiscal measures have not yet been used in Ghana to explicitly address environmental problems. Efforts at land use control have been largely ineffective except where government has been able to acquire tracts of land and manage them directly. There are no mechanisms in place to control industrial siting on the basis of environmental considerations. So far, environmental standards have been set only for ambient air quality in residential and industrial areas. EPC has promulgated guidelines requiring certain industrial and agricultural projects to obtain environmental clearance certificates. EPC is also promoting the use of environmental assessments and monitoring systems. Environmental education capabilities are increasing, as are cases of public organizing and promotion involving urban environmental issues. 8.13 A number of initiatives have been underway to improve urban environmental management.4 These include: * Enhancing public participation through newly-created environmental subcommittees in the urban District Assemblies, as well as consultative meetings. * Improved communication across levels of government that has involved discussions at the community, metropolitan, and regional levels about, for example, the replacement of bucket latrines with improved pit latrines in lower-income areas. * Utilization of private sector knowledge and capacity, through, for example, initiatives to improve sanitation and solid waste management through the use of private contractors and the provision of environmental expertise to the public sector by private consultants. * Support by the government and foreign assistance agencies for the national environmental action plan, the strengthening of EPC, the application of environmental impact assessments, and urban coastal zone management. B. URBAN LAND Context 8.14 The two major forms of land ownership in Ghana are (a) "allodial" custodianship on behalf of the community by the traditional authorities (also referred to as "Stools" or "Skins") and (b) State ownership. Other less prevalent forms are family ownership and customary law freehold, which have evolved from land grants made by chiefs to prominent families and individuals. The State owns a considerable part of the land in the A.T. Amuzu and J. Leitmann, "Environmental Profile of Accra,' Urban Management Programme, UNDPIUNCHS/World Bank, August 1991. 69 metropolitan area of Accra, though the actual amount is uncertain. Traditional authorities own about 68 percent of the land in Kumasi, 60 percent in Sekondi-Takoradi, and 75 percent in Tamale.5 8.15 The Stools or Skins usually transfer land rights to individuals, groups, or institutions through long-term leases. The rents are nominal; however, allottees normally must pay to the chief a substantial up-front cash payment (known as "drink money") roughly reflecting the market value of the land. Article 267(5) of the 1992 Constitution prohibits grants of freehold from Stool land6, but freehold ownership obtained previously is legally recognized in Ghana. It is not clear how much urban land is in freehold tenure. This seems to vary according to custom in different areas. 8.16 The Lands Commission is one of the most important government agencies involved in land management. Its functions according to the 1992 Constitution are: (a) to manage public lands or lands vested by law in the President (management functions include allocating public lands for specific purposes, fixing and collecting rents, and securing of properties from encroachment); (b) to grant consent/concurrence for all allocations of Stool, Skin and family land; (c) to advise the government, local authorities and traditional authorities on policies for land use and development; and (d) to advise on and participate in a comprehensive national land title registration program. The Lands Commission has a central office in Accra, headed by an Executive Secretary, and Regional Secretariats. A bill is currently pending in Parliament on the functions and operations of the Lands Commission. The contents of the bill are confidential, but its purpose is to give more substance to the provisions of the 1992 Constitution. 8.17 Other central government bodies participating in urban land administration are: * The Town and Country Planning Department, which has offices in each Regional capital and a number of District capitals. * The Land Title Registry, which was established to implement the 1986 Land Title Registration Law. * The Survey Department, responsible for official land surveying and mapping in Ghana. * The Land Valuation Board, established in 1986 as the central agency for property valuation in support of land taxation and public land acquisition. R. Kasim Kasanga, "Institutional/Legal Arrangements for Land Development,* University of Science and Technology, Kumasi, for the UNDP/UNCHS/World Bank Urban Management Programme, December 1990. 6 Article 267(5) says: 'no interest in, or right over, any stool land in Ghana shall be created which vests in any person or body of persons a freehold interest howsoever described.' 70 Land Transfer, Titling and Registration 8.18 Recent initiatives in urban land management have focused on improved land titling and registration. The gradual expansion of modern titling will be a major contribution to reducing the risks and problems associated with land transfer. It should stimulate private sector investment in residential and commercial land development and improve the efficiency of land utilization in urban areas (see Chapter HI's discussion of Constraints on Urban Productivity). Titling will also expand the amount of real property that can be used as collateral in the formal credit system, thereby stimulating the financial market. 8.19 Before the passage of the Land Title Registration Law in 1986, formal transfers of land rights in Ghana were documented through deed registration. This system lacked safeguards against fraud or error, but it provided a basic form of documentation. Nevertheless, many land transfers and allocations were made over the years without deeds. As Ghanaian society has become more modern and urbanized, the transfer of land rights through customary procedures rooted in traditional, rural culture has become increasingly problematic. 8.20 Disputes over land rights are common. Various studies have documented the existence of huge backlogs of court cases involving land7. These cases tie up a large amount of land, in the sense of keeping it from being transferred to individuals or entities that would use it more productively. The largest single share of land litigation concerns disputed titles derived from customary law. Allocations of land by traditional authorities have been subject to dispute for various reasons, including (a) lack of records, (b) disputes among chiefs about the boundaries of the areas under their jurisdiction, (c) situations in which a decision made by a deceased chief is not upheld by his successor, (d) deliberate allocation of the same land to different parties, or (e) allocations of land made by individual chiefs without consultation, as custom dictates, with other elders or family members. 8.21 The Land Commission's review and approval of land allocations by traditional authorities is intended to be a check against these problems. The Commission's review covers the accuracy of the site plan, whether the parcel has been affected by litigation, the validity of ownership of the Stool or Skin that is transferring the parcel, and whether the parcel has already been registered. The Lands Commission also checks with the Town and Country Planning Department as to whether the parcel conforms to the land use plan, 7 See Urban Management Programme, "Report of Country Consultation on Land Management in Ghana,' UNDPIUNCHS/WVorld Bank, June 27-28, 1991. This report cited a backlog of 16,000 High Court cases involving land. See also R. Kasim Kasanga, "Institutional/Legal Regimes and Urban Land Management (proposed article)," Department of Land Economy and Estate Management, University of Science and Technology, Kumasi, October 1991. This paper documented that over one third of all cases brought before the Kumasi High Court during a nine-month period in 1990 were land cases. 71 if any.8 Obtaining legal approval of a grant of land from a Stool or Skin is an extremely complicated, time-consuming, and expensive process of applications, approvals, and payments involving the Traditional Council, the Lands Commission Regional Office, and the Lands Commission Secretariat Headquarters in Accra. It can take up to several years, depending on the applicant's ability to make correct and timely payments, his zeal in following up all stages of the process in person, and the amount of his personal "clout".9 8.22 The 1986 Land Title Registration Law and Regulations did not deal with land allocations by traditional authorities. It was enacted to overcome defects in the pre- existing deed registration system. Its objectives were to give finality and certainty to property rights, to provide an official record of such rights, to facilitate the transfer of land rights in the open market, to reduce litigation over land, and to facilitate the use of land for economically productive purposes. One of the features of the 1986 law is that it provides for the registration not only of common-law tenure (both freehold and long-term leasehold) but also of various types of customary tenure, including allodial, customary freehold, and customary long-term tenancy. The uncertainty of many claimed customary property rights was recognized as a problem, but it was not viewed as an obstacle in implementing the law. Rather, it was felt that the various forms of existing property rights should be respected and that conflicting or ambiguous claims could be settled in the course of registration and titling. 8.23 The IDA-assisted Urban II Project includes a Land Administration Component consisting of: (a) a Pilot Land Adjudication and Titling (PLAT) project, to support the implementation of the 1986 Land Title Registration Law; (b) the production of 1:2500 scale photomaps for Accra and Kumasi, which would be used for the PLAT project; (c) institutional support (vehicles and equipment) for the key land administration agencies; and (d) studies and documentation of the exercise. The PLAT project was conceived as an initial testing and learning exercise, limited to only 1,000 plots in selected areas of Accra and Kumasi, the lessons of which would be scaled up later on. It was planned as a systematic effort involving close collaboration between the Survey Department, the Land Title Registry, and the Lands Commission. The entire Land Administration Component was to have been guided by a Land Administration Steering Committee composed of the heads of the participating agencies, supported by a three to four person Secretariat, and directed by an internationally recruited expert in land administration. 8.24 Since the effectiveness of Urban II in May 1991, the PLAT project has yet to be implemented. There have been delays in receiving vehicles and equipment. The Art. 267(3) of the 1992 Constitution says, "There shall be no disposition or development of any stool land unless the Regional Land Commission of the region.. .has certified that the disposition or development is consistent with the development plan drawn up or approved by the planning authority of the area concerned." 9 Typical procedures in Kumasi are documented by Kasanga, Dec. 1990 (op. cit.) and by Seth 0. Asiama, *Land Management in Kumasi, Ghana," Department of Land Economy and Estate Management, University of Science and Technology, Kumasi; prepared for the World Bank; October 1989. 72 international expert has not been recruited, and the Secretariat has not been established. The three agencies are carrying on, albeit slowly, with the registration of new titles under the 1986 law, but not within the structure of the pilot project as originally conceived. Coordination between the agencies has been inadequate, and no systematic documentation of the process or its lessons has been produced so far. 8.25 From 1990, when the Land Title Registry began effective operation, to the end of 1993, only about 3,000 new titles had been issued. Around 17,000 applications for titles were pending, either awaiting cadastral plans from the Survey Department or at other stages of the review process. A major constraint on the titling program is limited budgets for staff, logistics, equipment, supplies, and transportation in all the land administration agencies. Through the end of 1993, the Land Title Registry operated only in Accra. An office in Kumasi was set to open in 1994. As of late 1993, the Registry's Accra office had three Registrars, eight Records Staff, and five Technical Officers. Staffing of the Registry's head office is to be increased marginally, and new staff have been requested to open the Kumasi office. 8.26 The Survey Department has limited capacity to produce cadastral maps. Before. the delivery of the final photomaps of the Accra area under the Urban II project, the Department had been using old photographs and maps. Another problem is a lack of modern technology for map production, which forces the Department to use old- fashioned, slow, labor-intensive methods. To cover the initial five registration districts in central Accra, the Department needs to produce a total of 6,000 to 7,000 different block plans. At present, its production rate averages around a dozen such plans per week. Some improvement may be expected once the Department receives new map digitization equipment under the Bank-financed Environmental Resources Management Project. Even so, the Survey Department will remain constrained by limited budget and logistical capacity. 8.27 To improve the land titling process, the following issues merit attention: * The agencies involved in surveying, mapping, and documentation use high standards of precision and complex procedures, adapted from British land management models, which are expensive and time consuming. Consideration should be given to the use of simpler, cheaper approaches.10 * There appears to be considerable scope for improving information-sharing and coordination among the participating agencies. * The Survey Department should explore the possibility of speeding up the production of cadastral maps by contracting part of the work out to private licensed surveyors under its supervision. Also, as suggested in the 1991 10 One of various approaches is suggested in Akin L. Mabogunje, "Perspective on Urban Land and Urban Management Policies in Sub-Saharan Africa,' World Bank Technical Paper No. 196, Africa Technical Department, 1992. 73 Country Consultation, surveying capacity could be expanded through the supervised use of trained surveyors other than licensed ones (who are in short supply). 8.28 Apart from accelerating property titling, a number of measures can be taken to simplify and shorten the procedure for legally transferring interests in Stool/Skin lands. The focus would be on simplifying the Lands Commission's consent/concurrence process and shifting to a decentralized (Regional) administrative arrangement.II 8.29 Specific legal and administrative measures have been proposed to reduce the amount of land litigation and the long periods during which land cases are tied up in the courts.12 These include codifying the relevant customary laws; encouraging the use of arbitration; using existing legal provisions to release certain lands tied up in litigation; and revitalizing existing or creating new special tribunals empowered to deal with land cases expeditiously. Land Use Controls 8.30 Land use planning and control in Ghana has been governed by the Town and Country Planning Ordinance of 1945. This law sets out procedures for master planning, land use zoning, subdivision regulation, and building permits. The existing approaches are largely outdated. The Local Government Act of 1993 (Articles 46-619) devolves to District Assemblies the authority to control physical development. The Act abolishes the District offices of the Town and Country Planning Department (which is to remain as a central government policy-making agency) and gives DAs the power to issue development permits, enforce development plans, make building by-laws, and issue building permits. 8.31 The land use and development controls used to date in Ghana are lengthy, cumbersome, and complex. They would be a serious constraint on the development of urban land if they were not widely ignored or circumvented. While the provisions of the 1993 Local Government Act are a step forward, the Town and Country Planning Ordinance of 1945 has not been repealed. This poses the prospect of confusion over which authorities and procedures are valid. The key issue for the future is to develop a new approach to land use control which is implementable by DAs. This should consist of simple, easily enforceable, and participatory procedures. The model should be adapted to local conditions with the involvement of chiefs, private land developers, and professionals outside government. See Kofi Wireko Brobby, *Improving Land Delivery System for Shelter,' Department of Land Economy and Estate Management, University of Science and Technology, Kumasi, prepared for UNDP and UNCHS, February 1992. 12 See Brobby, Feb. 1992 (op.cit); Ebenezer Acquaye & Associates, "Study of Institutional-Legal Problems Associated with Land Delivery in Accra," prepared for UNDP and UNCHS, October 1989; and Urban Management Programme, 1991 (op.cit.). 74 Public Land Management 8.32 Since Independence the government has attempted to remedy the problems of the traditional land allocation system by superimposing various types of public land sector management. 8.33 In Ghana the state has the power to take over land through "vesting" (Administration of Lands Act, No. 123, 1962), under which the absolute interest in the land remains with the original owner but the State (the President) has the power to "administer" the land. Where this has been done (e.g. Accra/Tema City Stool Lands Vesting Order, E.I. 108, Sept. 1984), it appears to have created additional problems (i.e. lack of compensation to the chiefs; uncertainty over the boundaries of the vested areas; failure to distinguish between lands held entirely by traditional authorities and those governed by freehold or lease interests given by chiefs) without much effect on the availability of land for development. 8.34 The GOG has adequate legal powers to expropriate land for public purposes under the Administration of Lands Act 1962 (Act 123) and State Lands Act 1962 (Act 125). However, government land acquisition tends to be difficult, slow, and un- coordinated in practice. Public confidence has been eroded by a failure to pay adequate and timely compensation, as required by law, compounded by difficulties in identifying who is entitled to compensation. Some improvement could be made by eliminating contradictory, vague, and overlapping legal provisions, improving compensation procedures to bring awards closer to real market values, and reducing delays in the payment of compensation.13 8.35 Government agencies, such as the State Housing Corporation and the Tema Development Corporation, among others, hold considerable amounts of undeveloped urban land, but they lack the capital to develop infrastructure and housing on it. Public estate management agencies are hampered by inefficiency, minuscule budgets, lack of trained and motivated staff, and political interference in technical matters. Governmental land development programs typically are not operated on a cost recovery basis and thus provide heavy subsidies to relatively small numbers of beneficiaries. 8.36 These problems are familiar in Ghana; yet, direct government management and allocation of land is still widely viewed as appropriate. For example, the Accra Strategic Plan calls for the creation of public sector land banks and the purchase of land by local Assemblies for joint development ventures. Rather than increasing its involvement in land management, government should direct its efforts to facilitating land development by the private sector. This may include releasing vacant government land to developers, perhaps through auctions. See, for example, Brobby, Feb. 1992 (op.cit.). 75 Private Sector Land Development 8.37 Formal private sector participation in the development and sale of serviced land plots has been extremely limited due to the difficulty of obtaining land, a lack of formal sector development financing, and cumbersome development approval procedures. These problems have contributed, as pointed out in the Bank's 1988 Urban Sector study, to considerable informality in land acquisition and occupation. There is squatting on government land and a substantial amount of occupation of Stool and Skin land with the permission of the chief but not of the State. The agencies that provide urban services in Ghana do not, in practice, require residents to show legal ownership before local infrastructure (roads, water supply, electricity) is constructed. 8.38 Chiefs frequently engage in subdividing land and allocating plots. Usually they neglect rational plot layouts and ignore infrastructure provision. There has been some discussion in Ghana of trying to obtain more efficient land subdivision through collaboration between traditional authorities and government. This may involve measures as simple as encouraging the chiefs to use more rational subdivision layouts, an activity which local planning officers could carry out effectively. Where the technical capacity permits, planning authorities could take on the role of assisting chiefs and other land owners to implement schemes for financing basic infrastructure with revenue from the sale of plots. 14 8.39 A Ghana Real Estate Developers Association exists. The focus of attention in policy-making circles has been mainly on the industry's lack of professionalism and on ways of regulating it to control dishonest practices. Little attention has been given to positive measures for encouraging private land development, including (a) making the assembly of land parcels easier, (b) simplifying regulations, and (c) building up financing mechanisms. Conclusions 8.40 Solving the problems of Ghana's land market will require a balance between respecting the practices of traditional authorities and accommodating the needs of a modernizing, urbanizing society. The key elements of a long-term agenda for dealing with urban land problems are: Accelerate implementation of the land titling and registration program by introducing a mechanism to coordinate the participating agencies; obtaining 14 Brobby (Feb. 1992, op.cit.) makes some interesting proposals for several modes of 'joint ventures" between traditional authorities, government, and local communities for the development of serviced land. The 1992 Constitution (Art. 267(6) provides that no more than 40 percent of the revenue from stool lands be paid to chiefs; the rest is to be paid to the Administrator of Stool Lands (10 percent) and the Municipal or District Assembly (50 percent). Thus legally, local governments have a claim on a part of 'drink money' (not just rents). 76 qualified technical assistance; ensuring that as much GOG financial support as possible is given to the effort;- and providing further donor agency assistance. * Simplify the approval process for legally transferring interests in Stool/Skin land. * Adopt measures recommended by Ghanaian experts for reducing the amount and duration of land litigation. * Establish simple, enforceable, implementable, and participatory procedures for land use planning and control based on the Local Government Act of 1993. * Treat land development for housing and commerce largely as a private sector business for which an enabling environment needs to be created, through facilitating the purchase of land, simplifying regulations, and making finance available. 77 LX. URBAN DEVELOPMENT STRATEGY A. OBJECTIVES 9.1 The objectives of the medium term urban development strategy for Ghana, whose implementation would be supported by the World Bank, are: * To improve the productivity of firms and households in urban centers through better infrastructure and services and policies to foster more efficient urban development. * To improve basic infrastructure for the urban poor. * To make the delivery and financing of urban services more efficient. * To contribute to urban environmental protection. 9.2 Several major, long-term trends occurring in Ghana provide the context for and will shape the progress of work on the above objectives. These trends are: the transition from the economic crisis of the 1970s and early 1980s to an economy capable of sustained growth; the shedding of central planning policies and the adoption of market-oriented, incentives-driven economic and social development policies; the shift of the public sector's role from the direct provision of services to facilitating, regulating, coordinating, and supervising (for which new skills are required); and the nation's transition to a democratic political system at the central and local levels of government. B. ALLEVIATING CONSTRAINTS ON URBAN PRODUCTIVITY Infrastructure Deficiencies 9.3 In the urban roads and water supply subsectors, priority should be given to continuing the rehabilitation and upgrading of existing, productive facilities. New capital investments should be undertaken selectively, ensuring that (a) they are essential for filling major systemic gaps, (b) the demand or need for them is immediate, and (c) they have well-demonstrated high economic returns. The use of appropriate, low-cost design standards for services such as water supply, sanitation, roads, lighting, and solid waste will be crucial to extending the impact of limited financial resources (see Annex Tables 1.3 and 1.4). 9.4 The coverage and quality of urban sanitation, solid waste and public transport can be improved most effectively by making available a range of levels of service at different costs in response to the willingness to pay of users. Experience shows that consumers, even those with low incomes, are able and willing to pay for improved basic 78 services. Ghanaian institutions at the central and local levels should develop and implement alternative service "solutions" and gain the capacity to perform the financial analysis required for establishing sustainable delivery. Policies 9.5 In the medium to long term, the ability of Ghana's cities to attract new industrial firms will be hindered by a lack of serviced land. The absence of roads, water supply mains, and electricity lines in suitable locations on the peripheries of cities raises costs for firms (and households) due to the need to pay for self-provision or the inefficiency of doing without adequate services. Trunk infrastructure for industrial sites should be provided on a selective basis, in accordance with well-demonstrated demand. 9.6 Ghana's main cities contain numerous concentrations of small-scale and micro industries. These areas provide thousands of jobs and are effective "incubators" of firms that may grow in the future. They can be made more productive by upgrading of access roads, electricity, water, sanitation, and drainage. Such measures could be part of a larger assistance strategy comprising technical assistance, training, and the promotion of savings schemes and pooling/sharing arrangements for utilities and expensive equipment. 9.7 The low density of development in many areas of the major cities is inefficient because the established infrastructure systems serving them are underutilized. Also, urban sprawl raises transportation costs and commuting times. There appears to be a high potential for private sector investment in the conversion of urban land to more productive use, provided that: (a) legal and administrative obstacles to the efficient and secure transfer of land rights can be removed, (b) inefficiently used government-owned land can be released for higher-intensity development, and (c) short-term construction financing can be made available through banks and other capital market institutions. C. TARGETING THE URBAN POOR 9.8 Several studies have shown that the urban poor bear a disproportionate share of the burden of inadequate water supply, bad sanitation, lack of drainage, poor road access, and inefficient, low-quality public transport. Geographically targeted upgrading of infrastructure and services in lower income urban communities should be a high priority. These should be part of an overall strategy for poverty alleviation that includes macro- economic measures to foster stable growth, policies to promote investment for employment generation, and the improvement of primary health and education. D. MAKING URBAN SERVICE DELIVERY MORE EFFICIENT 9.9 Most urban infrastructure and services in Ghana are provided directly by government agencies which have monopolies within their jurisdictions. Unless basic 79 reforms are made in the institutional arrangements for service delivery, the provision of financing and technical assistance alone will not solve these problems. New urban service provision mechanisms need to be introduced to overcome inefficiencies, lack of responsiveness to users, and inadequate maintenance. 9.10 Where government departments (whether central or local) are involved, poor performance is largely due to a lack of incentives. At the higher levels, executives and politicians are not sufficiently accountable to the public for the effective provision of services. At the technical and administrative level, government does not provide the necessary individual incentives or possible sanctions for staff to be significantly more productive. Although much higher remuneration is not achievable in Ghana's public sector, the public sector management can be improved by through civil service reform and the introduction of merit-based management mechanisms. Another approach for raising the performance of public sector organizations is to allow them to compete with the private sector in the provision of specific services. 9.11 - In many cases it is most efficient for the public sector to limit itself to regulating, planning, coordinating, and supervising. Direct provision of services can be handled by the private sector. The incentives for good performance in all infrastructure and services subsectors can be strengthened through the use of private sector contracting (in its various forms). If properly managed, private sector contracts allow government to reward good performance and sanction bad performance in ways that are not possible under traditional public sector management arrangements. 9.12 The provision of services is inadequate even in the face of high ability and willingness to pay on the part of users. Ghana offers opportunities for opening up service delivery to competition by different providers whose success is dependent on meeting the demands of users (e.g., in sanitation, solid waste collection, and urban transport). Public agencies may also offer various service options (such as cost-sharing schemes for different sanitation solutions) among which users may choose. 9.13 Ghanaian institutions should continue to move toward sound financial management of urban infrastructure and services. There has been some progress on improving cost recovery through direct user charges, but much more remains to be done in water supply, sanitation, and solid waste. Measures to obtain higher levels of coverage of road maintenance costs from the Road Fund are also needed. 9.14 Lack of management autonomy is an important problem in the water, sanitation, and solid waste subsectors. The Bank is presently helping GWSC to carry out a major study of institutional options designed to lead to the creation of more autonomous, financially viable water utilities. Other subsectors require reforms to free implementing agencies from political interference and allow them to operate with professionalism and financial soundness. In some subsectors, such as roads and drainage, there is a need to sort out the responsibilities between the two levels of government and among agencies. Finally, the urban public transport subsector poses unique, politically sensitive problems 80 (see Chapter V) regarding the regulation and management. The Bank has begun to help the government address them through the recently-initiated Urban Transport Project. 9.15 Implementation of the government's decentralization policy (codified in the 1992 Constitution and in the Local Government Act of 1993) can bring the authority and responsibility for the provision of services closer to the people and make service delivery more effective. There should be continued support for these objectives. Specific measures include: (a) encouraging government to implement composite budgeting at the District level and providing assistance for testing and refining it; (b) improving the management performance of local governments as part of the civil service reform and through specific personnel management measures (such as personnel services contracts); (c) providing assistance to local Assemblies that wish to reorganize themselves and strengthen their capacity. E. IMPROVING THE FINANCING OF URBAN SERVICES -9.16 The provision of technical assistance, training, and equipment is necessary but not sufficient to achieve improved revenue mobilization by local governments. Such assistance can produce short-term gains, but they tend not to be sustained. Improving urban finance requires a long-term view which recognizes that obtaining more revenue from local taxpayers is politically difficult and that the achievement of sustainable improvements in local revenue collection depends on developing incentives for local government politicians, executives, and staff to view themselves principally as providers of services to the public. As the public develops confidence in local government's responsiveness and competence, people's willingness to pay higher taxes will grow. 9.17 Local governments will continue to be assigned responsibility for financing the operation and maintenance costs resulting from most public investments in urban infrastructure and will need to generate sufficient revenue from appropriate sources for this purpose. In addition, local Assemblies should be given some discretion in the selection of capital projects financed by grants and foreign assistance. If the central government retains control over the choice of projects, DAs will not perceive them as "theirs", and the corresponding local revenue mobilization efforts by for O&M will not be forthcoming. 9.18 To help improve the financing of O&M at the local level, the "earmarking" of O& M accounts in Assemblies' budgets can be promoted. Local governments should also start formally evaluating the current cost implications of proposed capital investments. 9.19 At present own source revenues do not cover recurrent expenditures even in the largest cities (except Tema). Achieving a surplus of locally-raised revenue over expenditure will be the first step toward financially sound operation and eventual creditworthiness. The creation of a special "urban development bank" or similar entity is not recommended at this time. Alternatively, local Assemblies that are consistently 81 achieving budget surpluses could establish their own capital investment funds (which could be capitalized initially by grants) from which they could "borrow" and to which they could make regular repayments to demonstrate their creditworthiness. 9.20 Finally, measures should be taken to provide local Assemblies with the legal means to perform their own periodic property tax revaluations, to implement yearly property value indexing systems, and to better manage their billing and collection. Some Assemblies may also wish to obtain technical assistance for raising more revenues from local business taxes (licenses). F. URBAN ENVIRONmENT AND LAND 9.21 GOG is in the process of establishing a national policy, regulatory, and institutional framework for environmental protection and management. Within the Urban Strategy, a high priority is to finance investments and institutional improvements in urban sanitation, solid waste, and drainage. Reforms in urban land use control systems should emphasize the protection of environmentally valuable areas and the siting of environmentally sensitive facilities. 9.22 Urban development is hampered by an inefficient and inequitable land market. One of the highest priorities is the acceleration of the land titling and registration program. Other measures to reduce the policy and regulatory impediments should be taken up at policy-making levels. G. HIGH PRIORITY INTERVENTIONS 9.23 Over the next several years the World Bank and other external support agencies could provide assistance with many elements of the above Urban Strategy. The table at the end of this Chapter summarizes suggested high-priority interventions which central and local governments could undertake, with assistance from external agencies. 9.24 In terms of investment in urban infrastructure and services, one of the highest priority areas is urban environmental sanitation (comprising storm drainage, sewerage/sanitation, and solid waste) in the major cities. These services have been relatively neglected, and their inadequacy is a major constraint on the productivity of urban households (because of health effects), a major problem for the urban poor, and a key environmental issue. 9.25 The World Bank and other financing agencies have been and will continue to be heavily involved in urban water supply and urban transport. Follow-on assistance to the current water sector and urban transport projects would be part of the Bank's medium term assistance program. 82 9.26 Upgrading of basic services (water supply, sanitation, access roads, lighting, drainage, etc.) in low-income urban communities is an important element of poverty alleviation. Upgrading components can be included in most multi-sectoral urban projects. The key challenge in upgrading is to involve the beneficiaries in planning, implementing, and sustaining the improved services. 9.27 These investments would be complemented with assistance aimed at reforming the institutional delivery systems to make urban services more efficient and sustainable. Policy changes in would be discussed and agreed upon as necessary. Capacity-building measures would center upon the mobilization of Ghanaian expertise from public agencies, the private sector, universities, and NGOs. Community participation would be structured into the projects. Training would continue to be financed, but it would emphasize the utilization of local institutions and a demand-driven approach that is being piloted under the Bank-assisted LGDP project. 9.28 The larger urban centers will rightly demand priority attention because (a) they concentrate the bulk of present and potential urban economic activities; (b) they house the majority of the urban poor; and (c) they have the major urban environmental problems. However, the needs of the smaller towns cannot be neglected. These centers also play an important role in economic development and have serious deficiencies of basic services. Over the medium to long term, investment and capacity-building efforts must be allocated in a reasonably balanced way to larger and smaller towns. 9.29 The following table summarizes high-priority actions under each of the five main objectives of the strategy. The main responsible organizations are also listed. 83 HIGH PRIORITIES FOR INTERVENTION IN URBAN DEVELOPMENT Actions for the Short/Medium Term (One to Five Years) MAIN RESPONSIBLE MAIN OBJECTIVES PRIORITY ACTIONS ORGANIZATIONS 1. ALLEVIATING PRIMARILY FOR FIRMS CONSTRAINTS ON URBAN 1.1 Roads: Upgrading of key urban road links in major cities; traffic DUR, Assemblies PRODUCTIVITY management measures. 1.2 Telecoms: Telecommunications improvements in major cities. MOTC 1.3 Electricity: Improvements in generation. VRA, ECG 1.4 Industrial sites: Government regulatory facilitation of private Various land assembly for industrial sites; provision of trunk infrastructure to industrial sites based on well-demonstrated demand. 1.5 Micro/small enterprise: Upgrading basic infrastructure in Assemblies existing areas where micro and small-scale enterprises are concentrated. PRIMARILY FOR HOUSEHOLDS 1.6 Sanitation: Investment in treatment facilities; large-scale Assemblies promotion of household KVIPs; limited sewerage where tariffs can be imposed or sanitation conditions are very bad. 1.7 Solid waste and drainage: Greater coverage of solid waste Assemblies collection in lower-income areas; establishment of new sanitary landfills in major cities; drainage improvements for localized flood- prone urban areas. 1.8 Roads: Upgrading or construction of access roads to lower- Assemblies income areas. 1.9 Water: Rehabilitation and metering to reduce losses. GWSC 1.10 Urban transort: Improving the quality of service with newer, Private Sector larger vehicles. 84 BOTH FIRMS AND HOUSEHOLDS 1.11 Land Titling: Accelerating the implementation of the land Land Title Registry titling and registration program. 1.12 Private land development: Creating an enabling environment Lands Commission, for private sector land development (residential and commercial) Others through encouraging the assembly of land parcels by private developers, simplifying regulations, and promoting the provision of construction financing through the banking systems. 1.13 Land transfer: Simplifying the approval process for transferring Lands Commission interests in Stool land. 1.14 Land divestiture: Releasing underutilized government-owned Various land for higher-intensity development. 2. TARGETING THE 2.1 Local initiatives: Identification and prioritization of lower- Assemblies, URBAN POOR income urban communities by Assemblies; execution of limited Communities upgrading with Assembly and community resources. 2.2 Upgrading programs: Larger-scale upgrading of basic Assemblies infrastructure in low-income urban areas with central Government and external funding 3. MAKING URBAN 3.1 Water supply: Increasing tariffs; reducing leakage; improving GWSC SERVICE DELIVERY billing and collection; contracting out functions to private sector, MORE EFFICIENT agreeing on GWSC restructuring policy and action plan. AND SUSTAINABLE 3.2 Sanitation: Establishing Waste Management Departments Assemblies responsible for management, planning, and supervision in all major cities; accelerating use of the private sector for constructing and operating facilities; implementing cost recovery systems. 3.3 Solid waste: Providing WMDs with financial and managerial Assemblies autonomy; extending private contracting for collection with a wide range of technologies; increasing fee collection, with the participation of community groups and contractors; contracting out vehicle maintenance and landfill operation to private sector. 3.4 Urban roads: Continue strengthening of Road Units in main DUR, Assemblies cities and transfer of responsibilities and resources to them; raising more funds for road maintenance from an increased share of fuel taxes and more user charges from parking fees and vehicle taxes. 85 3.5 Urban transport: Eliminating barriers to use of better-quality MOTC, GPRTU, vehicles, higher tariffs, and more flexible vehicle operations. Private Sector 4. IMPROVING 4.1 Staff: Engagement by Assemblies of qualified technical and Assemblies URBAN LOCAL managerial staff through fixed-term services contracts. GOVERNMENT AND I FINANCE 4.2 Property tax: Providing Metropolitan and Municipal Assemblies MFEP, LVB with the authority to perform their own property revaluations and implement property tax indexing systems. 4.3 Business taxes: Encouraging Assemblies to raise more revenues MLGRD from local business taxes (licenses). 4.4 DACF: Ensuring that Assemblies have discretion in choosing MFEP, MLGRD projects to be financed with DACF monies. 5. AMELIORATING 5.1 Water and sanitation: Improving water supply, sanitation and GWSC, Assemblies PRIORITY URBAN solid waste collection and disposal. ENVIRONMENTAL PROBLEMS 5.2 Industrial pollution: Determining the nature and magnitude of Ministry of industrial pollution in urban areas; identifying priorities for Environment, EPC intervention. 5.3 Standards: Initiating the establishment of standards and EPC regulations for protecting the urban environment, beginning with water supply and sanitation. 86 Annex 1 Page l of9 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW ESTIMATED ]NVESTMENT REQUIREMEN7S OF MEETING BULK AND LOCAL URBAN INFRASTRUCTURE NEEDS A. BULK INFRASTRUCTURE Water Supply 1. Assuming a current urban population of 5.5 million requiring 200 lcd, and considering losses and peaking requirements, production would need to be about 2.0 million cubic metres per day compared with the current 0.5 million cubic metres per day. To provide additional source works, treatment capacity, transmission, pumping and storage, a total of $750 million would be required at today's costs (assuming capital cost is on the order of about $0.5 per litre capacity provided). Considering the time horizon of the year 2000, it is unlikely that GWSC's worthy but ambitious target of providing adequate water for all urban residents by the year 2007 will be met. If the three large schemes (IDA, AfDB, and CIDA) currently underway are completed, and all Regional Capital schemes are rehabilitated and expanded as envisaged, then GWSC will have achieved a great deal. Taking into account implementation capacity as well as financial constraints, expenditure is unlikely to exceed $300 million by the year 2000. Sanitation 2. A stated mid-term objective of GWSC is to provide waterborne sewerage schemes in regional capitals by the year 2000. Clearly this is not feasible (from technical, financial, and institutional standpoints). The further development of low-cost, simple technology, with on-plot or shared schemes, would appear to be the realistic way forward for the foreseeable future in all but the most densely settled areas of the major cities. Waterborne sewerage and centralized sewage treatment are considered "bulk" infrastructure elements. The costs of carrying out meaningful rehabilitation and expansion of the systems in Accra and Tema and for pilot schemes in Kumasi and Sekondi-Takoradi are unlikely to be less than $300 million. However, given the long periods required for study, preparation, implementation, commissioning, and connections, it is unlikely that capital expenditure on these schemes would be more than 30% of this ($90 million) before the year 2000. Urban Roads 3. Investment'estimates for key improvements to distributor or collector roads (considered as bulk infrastructure elements) in the District capitals, excluding those covered in the LGDP, assume an average of 10 km. (a minimum requirement) in each of 87 Annex 1 Page 2 of 9 100 towns at $250,000 per kilometre by year 2000. This yields a total of $250 million, or $2.5 million per town over about five years, an average of $500,000 per year per town. Storm Drainage 4. For this Review, no attempt has been made to estimate the financing requirements for a comprehensive investment program of primary and secondary urban storm drainage. Costs for main drains are necessarily high, especially if rights-of-way acquisition and relocation are required. Storm drainage has received relatively little investment in the past. Tertiary drains have been constructed as part of road rehabilitation and community upgrading projects, but primary and secondary drainage has been neglected. In the future it is recommended that, in schemes providing "on-site" storm water drainage, the "off-site" needs beyond the area, which are necessary to ensure the on-site drainage operates efficiently, be addressed. Based on estimates of local infrastructure investment to the year 2000, it is suggested that on the order of $50 million might be required to ensure adequate drainage from new areas to be developed and areas where local infrastructure is to be upgraded. Urban Electricity 5. VRA's investment program to the year 2000 totals about $870 million, which includes the additional turbines required to increase the capacity. ECG's investment program to the year 2000 totals about $470 million and includes further main distribution in Accra, main distribution in other capitals, and national electrification (small towns and rural areas). It is difficult to see how such sums could be expended during this relatively short period. 6. It is difficult to disaggregate ECG's investment program into urban vs. rural sectors, but given that settlements are considered urban if they have 5,000 people or more, it is estimated that about $415 million is required to meet GOG objectives as far as they relate to the urban sector. Of this, some $115 million is estimated to be required for local distribution. Thus ECG's investment needs for urban bulk distribution are put at approximately $300 million to the year 2000. Subtracting local distribution and other "local" costs from VRA's overall investment program, it.is estimated that some $700 million is required for generation and transmission. Telecommunications 7. For future urban infrastructure cost estimation, most telecommunications infrastructure--lines and automatic exchanges--would be considered local infrastructure. System-wide infrastructure, including the international exchange and satellite earth station, are considered bulk elements whose costs to the year 2000 are estimated at $410 million. 88 Annex 1 Page 3 of 9 Public Transport 8. Available data did not permit an estimate to be made of the investment requirements for upgrading or acquisition of public transport vehicles. An attempt has been made to estimate the order of magnitude costs for rehabilitation and/or provision of public transport terminals in all of Ghana's urban centers to the year 2000, albeit based on very limited information. Using parameters from the LGDP and UTP, the cost is estimated to be on the order of $50 million. Bulk Investment Needs Summary 9. Annex Table 1.1 summarizes the bulk infrastructure investment requirements. The total over the seven year period 1994-2000 is roughly $2,150 million. This comes to around $300 million per year, which is approximately double the Government of Ghana's total estimated development expenditure for 1993.1 B. LOCAL INFRASTRUCTURE 10. For "local" infrastructure provision, a range of service levels has been developed and costed. Service levels range from "basic needs" standards to what are generally considered "full" standards. These cost estimates are intended to give, as in the previous section, an "order of magnitude" idea of the possible requirements; perhaps just as useful is an indication of the variability of investment costs according to the technical standards applied. 11. For this exercise costs have been developed using the population projections presented in Chapter II. Costs for three "service levels" and three urban density levels have been estimated for each sub-sector. From these costs, incremental investment scenarios to the year 2000 for developing new urban areas and upgrading existing areas from one level to another have been calculated for each of Ghana's five main cities and for the urban population nationally. For this exercise a "minimum" existing service level has been assumed for each sub-sector in each town as a starting point from which the incremental costs for achieving any of the future targets are determined. The three alternative targets are "basic", "intermediate", and "full" service levels. The specific service standards corresponding to each are outlined in Annex Table 1.2. 12. Unit costs for the provision of local infrastructure and services to the three service levels have been based on various sources, including recent costs of Bank-financed urban projects in Ghana, costs of infrastructure in other African countries, and internationally accepted parameters. The unit costs used in this exercise are summarized in Annex Table 1.3. I The 1993 total GOG development expenditure is estimated provisionally at 0 119,254 million by the Ministry of Finance and Economic Planning. An approximate 1993 mid-point exchange rate of 0 700/USS 1 is used. 89 Annex 1 Page 4 of 9 13. The alternative investment scenarios for local infrastructure are shown in Annex Table 1.4. The estimates assume that infrastructure needs to deal with population growth to the year 2000 are met in full. For upgrading of services in existing urban areas, assumptions have been made as to what is considered achievable based on past experience in Ghana. 14. Given institutional and implementation constraints together with local finance constraints, the maximum volume of local infrastructure upgrading considered feasible in over the 1994-2000 time frame is considered to be about 200 ha. per year maximum in total for Accra and Kumasi. For other towns the capacity to implement large scale infrastructure upgrading schemes is somewhat less, and it has been assumed that the other regional capitals could manage to implement about 50 hectares per year by 2000. In the remaining urban centers, the capability is lower, and it has been assumed that about five hectares per town per year could be upgraded. 15. In per capita terms the investment costs range from $117 for the basic service level at the high (350 persons/ha) density to $530 for the full service level at the low (150 persons/ha) density. In terms of total investment costs of local infrastructure, there is approximately a three to one difference in the amounts needed between the basic level of service and the full level. Total investment estimates for the 1994-2000 period at the "medium" urban density range from $72 m. to $207 m. for Accra; from $158 m. to $452 m. for the five main cities; and from $401 m. to $1,144 m. for all urban centers. 90 Annex 1 Page 5 of 9 Annex Table 1.1. Ghana: Cost Estimates for Meeting Urban Bulk Infrastructure Needs 1994 - 2000 (USSMillions) Functions Estimated Cost Water Supply 300 Sanitation 90 Urban Roads 250 Storm Water Drainage 50 Electricity Supply 1000 Telecommunications 410 Solid Waste Management All Local Public Transportation Terminals 50 Total Estimated Cost 2150 91 Annex 1 Page 6 of 9 Annex Table 1.2 Service Levels and Density Parameters for the Estimates of Local Infrastructure Investment Requirements Minimal Service: Water Supply by few communal standpipe Sanitation by pan or public toilets No formal solid waste collection and disposal Roads are unsurfaced or in need of total reconstruction No formal stormwater drainage Very limited electricity supply and no streetlighting No, or very irregular, access to public transport No, or very limited, access to a telecommunication facility Basic Service: Standpipe for water within 250 meters Communal or shared latrines Rudimentary but formalised solid waste collection/disposal Gravel roads Unlined formal stormwater channels and lined road crossings Streetlighting on arterial roads with some houses connected to power supply Once per day public transport Public telephone within each community Intermediate Service: Yard standpipe for water On-plot KVIP or similar Regular collection from community collection points Bus routes paved, other roads gravelled Bus routes with lined stormwater channels, others unlined Street lighting on arterials, distributor and collector roads and restricted power supply available to majority of houses Regular public transport of traditional quality Access to private telephone within 250 m. walking distance Full Service: Metered in house water supply Modified conventional or small bore sewerage Regular twice-weekly collection of refuse and sanitary disposal All arterial, distributor and collector and main local roads paved On-road drainage and pipes and culverts where necessary Streetlighting on all roads and unrestricted metered power supply to each house 92 Annex 1 Page 7 of 9 Modern, safe, reliable and affordable public transport Private telephone available to all at affordable costs Density Options: -15 plots per ha @ 8-12 persons/plot = av. 150 persons per ha -25 plots per ha @ 8-12 persons/plot = av. 250 persons per ha -35 plots per ha @ 8-12 persons/plot = av. 350 persons per ha 93 Annex 1 Page 8 of 9 Annex Table 1.3 Ghana: Per Hectare Capital Costs of Local Urban nfrastructure Used for Investment Estimates (USS Per Hectare) Levels of Service 1/ Services 1. Minimal 2. Basic 3. Intermediated 4. Full Water Supply Standpipe for Standpipe 250 Yard standpipe Metered in-house Community meters 150pers/ha 3200 5000 8000 250pers/ha 3600 5800 9500 350 pers/ha 4000 6500 11000 Sanitation Pan Communal latirne On-plot VIP Simplified piped sewerage 150 pers/ha 6000 9000 12500 250 pers/ha 7200 10000 14500 350 pers/ha 8100 16000 Roads Unsurfaced tracks Gravel roads Bus route paved All roads paved 150 pers/ha 9000 12500 22000 250 pers/ha 10800 15000 26000 350 pers/ha 12500 17200 30000 Storm drainage Natural Unlined channels Drains on bus route All drains lined 150 pers/ha 1700 2500 5000 250 pers/ha 2000 3000 5800 350 pers/ha 2500 3500 6400 Electricity None Street lights on All main roads lit- All roads lit and arterials (few supply available unrestricted house connections) supply 150 pers/ha 3000 15000 20000 250 pers/ha 3500 17000 24000 350 pers/ha 4000 19000 27000 Telecom None Line density Line density Line density 2/100 pop. 3/100 pop. 4/100 pop. 150 pers/ha 4000 6000 8000 250 pers/ha 6000 9000 12000 350 pers/ha 8000 12000 16000 Solid Waste None Equip. for periodic Equip. for formal Same as collection/disposal community collection intermediate with some house collection 150 pers/ha 1000 2000 4000 250 pers/ha 1500 3000 6000 350 pers/ha 2000 4000 8000 Total Cost 150 pers/ha 27900 54500 79500 250 pers/ha 34600 62800 97800 350 pers/ha 41100 73600 114400 1/ See Annex Table 1.2 for definitions 94 Annex 1 Page 9 of 9 Annex Table 1.4 Ghana: Cost Estimates for Local Urban Infrastructure 1994 - 2000 (US$ Millions) Levels of Service 1/ Town Basic Intermediate Full Accra Lower Density 103.2 192.4 . 294.2 Medium Density 72.5 135.2 206.7 Higher Density 60.5 112.8 172.5 Kumasi Lower Density 44.6 83.2 127.2 Medium Density 39.1 72.8 111.3 Higher Density 35.2 65.5 100.2 Sekondi-Takoradi Lower Density 8.4 15.6 23.9 Medium DensityZ/ 7.5 14.0 21.6 Higher DensityZ/ 7.5 14.0 21.6 Tema Lower Density 30.7 57.2 87.5 Medium Density 21.8 40.6 62.0 Higher Density 16.5 30.7 46.9 Tamale Lower Density 25.1 46.8 71.6 Medium Density 17.6 32.8 50.9 Higher Density 15.5 27.0 41.3 Other Urban Lower Density 320.9 598.0 914.3 Medium Density 242.7 452.4 691.7 Higher Density 209.3 390.0 596.3 Total Lower Density 532.9 993.2 1518.5 Medium Density 401.2 747.8 1144.2 Higher Density 343.4 6402.0 978.8 1/ See Annex 1 for definitions. 2/ Figures same due to low population growth and rounding. 95 Annex 2 Page 1 of3 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW TECHNOLOGY OPTIONS FOR URBAN SANITA TION 1. Sanitation planning should allow a mix of different types of technologies and levels of service instead of the selection of a single technology for an entire city. In reviewing options for selection, the following range of technologies may be considered: A. VENTILATED IMPROVED PIT LATRINES 2. A ventilated improved pit (VIP) latrine is a traditional latrine to which a vent pipe covered with a screen has been added to minimize odor and fly problems. In urban areas where available land is limited, an offset, double-pit design, fitted with either a squat plate or seat (KVIP), is recommended. Such a design can easily be retrofitted into an existing house and is almost maintenance-free. When a pit is full, it is sealed for 18-24 months during which wastes undergo decomposition and pathogens are destroyed. The decomposed pit contents can then be removed manually without health risks and used as a soil conditioner. The offset pit can be sized according to the number of users and enlarged at a later time if necessary. KVIP latrines are advantageous because no water is required for flushing and all kinds of cleansing materials can be used without threat of blockage. In addition, they can accommodate the water needed for cleansing if that is preferred. Wherever, a property has sufficient space to allow a detached latrine to be constructed and then moved when idled with solids, a single, deep-pit model will yield major savings as it is one-third the price of a twin-pit latrine. Single pit VIPs can also be employed if suction trucks are available and the latrines are accessible. B. POUR FLUSH TOILETS 3. In areas where water is used for cleansing, pour-flush (PF) toilets are particularly appropriate. The basic feature is a squatting plate incorporating a simple water seal and a pit where solids collect and liquid can percolate into the ground. Different designs of the receiving units range from single or double lined pits directly underneath the squat plate to single or double offset pits which are connected to the toilet by small diameter pipes. The PF toilet is advantageous because it is much cheaper and requires only a fraction of the volume of water that a conventional flush toilet requires. Also, internal plumbing within households is not essential to ensure efficient operation. In using them one should be aware that they cannot dispose of large volumes of household wastewater and they clog easily if bulky cleansing materials are used. Thus, user education is essential. C. SEPTIC TANK AND DRAIN FIELD SYSTEMS 4. Low volume flush toilets (WCs) with septic tanks are a relatively expensive but good option. Wastewater flows from the home by gravity to a septic tank which is usually a double-chambered, watertight, concrete tank where heavier solids settle to the bottom 96 Annex 2 Page 2 of 3 and accumulate as sludge, and grease and lighter particles rise to the surface and form a scum. The clarified effluent then flows to a drain field. Septic tank systems are particularly advantageous in that they can accommodate both excreta and sullage. A properly designed system can provide many years of good service. However, the tank will become blocked with solids if it is not cleaned out every two to three years and wastewater will surface if the drainfield is not large enough to accommodate the wastewater flow. It is important that drainfields (either seepage pits or gravel filled trenches) are sized to provide one square meter of infiltration area for every 10 to 25 liters/day of wastewater, depending on the soil permeability. A simple percolation test can be used to determine the proper design factor. D. SIMPLIFIED SEWERS 5. Simplified sewers, like conventional sewers, are designed to convey all household wastewater, including toilet and wash water, to off-site treatment and disposal. Simplified sewerage differs from conventional sewerage in that fewer manholes are constructed and smaller diameter pipes, laid at flatter gradients and in shallower trenches, are often used. Also, individual houses are not independently connected to the public sewer, but rather to a block sewer passing through alleyways or backyards where less lateral piping is required and vehicle loads are lower. Changes in technical specifications include limiting design periods to 20 years, allowing 100 mm. house laterals and 200 mm. street sewers instead of the more traditional 200 mm. and 300 mm. pipes, and using 0.4 meters per second as a minimum flow velocity instead on 0.8m/s. Experience in the USA, Australia and Brazil has shown that these revised design criteria reduce construction costs by 20 to 40 percent without adversely affecting performance. E. SMALL BORE SEWERS 6. Small bore sewers, also called solids-free sewers, are a form of simplified sewerage. They are designed to receive only the liquid portion of sewage for off-site treatment and disposal. Sludge, grit, grease and other solids which might cause obstruction in the sewers are separated from the waste flow in an interceptor tank which is installed upstream of every connection to the street sewers. Since the sewers convey only liquids, the need for achieving a 'self-cleansing' velocity as in conventional sewerage is eliminated. The use of small diameter pipes (typically of 50 75 mm. internal diameter) laid at flat gradients in smaller trenches can achieve substantial savings in the costs of sewer pipes and trenching, particularly where the terrain is flat. The installation of fewer and shallower manholes further adds to the savings in cost. 7. Small bore sewers are particularly suitable for low-density areas where the cost per household for conventional sewerage is too high or, where users do not consume the quantity of water required to properly operate a conventional sewage system. In high- density areas, communal interceptor tanks may be used in place of domestic tanks. However, trouble free operation of solids-free sewerage is dependent on the proper design and maintenance of the interceptor tanks because solids that do not settle in the tank may cause blockages of the sewers. The interceptor tank should therefore be designed to have 97 Annex 2 Page 3 of 3 a long enough detention time for the solids to settle or float. Regular desludging of accumulated solids should also be done to prevent accumulated solids from reaching the level of the interceptor tank's outlet pipe causing carry-over of solids into the sewer or blockage and surfacing of wastewater. F. TREATMENT 8. Wastewater ponding systems are recommended whenever requisite land is available. Compared to mechanized systems they are inexpensive to construct and operate. Savings in construction derive from a minimal use of mechanical equipment and concrete structures and a simple design which saves on engineering costs. Savings in O&M derive from the elimination of day-to-day sewage handling and effluent chlorinating; reduced energy needs for aeration, sludge handling and digestion; and fewer staff (1/3 that of mechanized systems). Wastewater ponding systems are also noted for their reliability, particularly in equatorial climates where the weather is warm throughout the year. They require little operational control and consistently achieve reductions in parasites, pathogenic bacteria and viruses allowing for effluent discharge to streams without disinfection unlike effluents from other sewage treatment systems. Their overall cost is a small fraction of mechanized systems and they provide a more reliable service resulting in better effluent quality (oxygen demand and pathogen content). Generally treatment should be through four ponds in series, an anaerobic, a facultative, and two holding ponds, with a total land requirement of about I hectare per 2,000 people served. Overall BOD reduction would be about 85% and effluent fecal coliform counts would be less than 5,000 per 100 ml. 98 Annex 3 Page 1 of 3 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW HousING TYPES AND TECHNIC4L CHOICE IN URBAN SANITA TION 1. The type of sanitation facilities that are best suited for a particular situation depend on a number of factors, some technical, some financial, some social. Technical considerations include the type of housing, water supply facilities, geological conditions and O&M requirements; while financial considerations include construction cost, O&M costs, user preference and willingness-to-pay. The ideal approach is to allow individual choice, provided guidelines for the construction of sanitation facilities are met, and to provide financial assistance for those technologies that are both technically sound and most economical in a particular housing area. Recommended technologies would be sewers in high-density, low-income areas; latrines and soakaways in the medium-density, low-income areas; and, WC/septic tank systems in low-density, high-income areas. In addition, homeowners associations would be encouraged to form service districts in government housing estates and other similar developments to manage the chosen technology. A. HIGH-DENSITY, Low-INCOME AREAS 2. In Kumasi most residences in these areas are 2-3 storey buildings generally with 20-30 rooms, shared by 10-20 families (40-100 persons) resulting in a population density of 300-600 persons per hectare. Most are built to the property boundary and have a central courtyard. Nearly all buildings have private water connections but less than half have internal plumbing. Water consumption in these areas is about 60 lcd. Because of the large number of persons living at each residence and the limited open space for constructing a drain field, septic tanks are not feasible. KVIP latrines are not feasible either, again because of the limited space (in this case' the 4 to 6 privy rooms that would be required for each residence can't be constructed on the ground floor), and because the multi-storey buildings themselves interfere with the wind flow required for proper ventilation (odor control). Fortunately, nearly all residences in these areas have private water connections, so sewers are feasible; and they are not too much more expensive than on-site systems. B. MEDIUM-DENSITY, Low-INCOME AREAS 3. Residences in these areas tend to be single storey traditional compounds with interior courtyards. These usually have 5-10 rooms that are shared by 4-10 families (20- 50 persons), resulting in population densities of 100-300 persons per hectare. Older, more-planned neighborhoods have lower population densities, while more recently settled areas have not been planned, resulting in higher population densities and poorer access. In older neighborhoods up to half of the homes have yard taps, but only a few have internal plumbing, while others get water from their neighbors. In the newly settled areas most 99 Annex3 Page 2 of 3 people rely on public stand posts. Water consumption tends to be about 40 lcd. Up to half of the households in the older neighborhoods have bucket latrines while others use public latrines or ad hoc means. The majority of human excreta is discharged into neighborhood dumps and drainages. Sullage water is disposed on one's property and into street drains. 4. Because of space constraints and lack of private water connections, WCs with sewers or septic tanks are not a general solution for this housing type at this time. Rather the sanitation option that is most generally applicable and most economical for this housing/income area is the VIP latrine. For the most part, single- or twin-pit KVIP latrines that are built into the house can be used, but in lower density areas detached, single-pit latrines can be constructed. The use of relatively inexpensive household soakaways would need to be encouraged. C. Low DENSITY, HIGH INCOME AREAS 5. Residences in low-density, high-income areas for the most part are detached single family structures. All homes have internal plumbing with water consumption of 100-120 lcd. Homes also have septic tanks with seepage pits or drain fields through which WC flush water is disposed on-site, but sullage is often discharged to surface drains. There are no significant problems with wastewater disposal. Because all homes have WCs, either septic tanks or sewers are required. While septic tanks are more expensive than simplified sewers to construct, their total cost (annualized capital plus O&M) is less than half that of simplified sewers. The current practice of providing septic tanks is generally appropriate and they should continue to be provided with new homes. 100 Annex 3 Page 3 of 3 Annex Table 3.1: Overview of Technical O tions for Domestic Facilities High-density, Medium-density, Low-density, Selection Criteria Low-income Housing Low-income Housing High-income Housing Housing 300-600 persons/ha. 80-250 persons/ha. 10-15 persons/ha. 2-3 storey buildings Detached single with 20-30 rooms. Single storey homes family homes on large 10-20 families (40- wim5-10 rooms. 4- lots with 5-8 rooms 100 persons). 10 families (20-50 and servants' quarters. persons). Water Use Water use = l d. Water use =40 Icd. - Water use = 100-120 90% of homes have lcd. All houses have house connections and <25% of the homes full internal plumbing. 25% have internal have yard taps, others plumbing. buy water from neighbours or get it from public standposts. Existing sanitation 40% septic tanks. 60-80% public 100% septic tanks facilities 30% public latrines. latrines. 20-40% 30% bucket latrines. bucket latrines. Suitability of sewage Only technically Technically feasible, Technically feasible. feasible option for but water supply must proper disposal of be upgraded to house excreta and sullage connections and water water. Water use consumption minimum required for increased to at least sewered systems. 60 lcd. Suitability of septic Not technically Open space is limited Open space is tanks feasible. Insufficient but adequate for on- adequate for on-site open space for drain site disposal of disposal of excreta fields, overflows will excreta and sullage. and sullage in go to surface drains. individual septic tank systems. Suitability of KVIP Not suitable for Technically feasible Technically feasible latrines multi-storey for excreta disposal. but all already have buildings: (1) Due to low water use, septic tanks that inadequate space on sullage disposal is not provide a higher level ground floor for the a serious problem. of service. 3-6 privy rooms Where necessary on- needed in each site seepage pits can building and (2) be installed. buildings interfere with wind flow required for proper ventilation (odour control). 101 Annex 4 Page 1 of I REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW RESPONSIBILITIES OF WASTE M4NA GEMENT DEPARTMENTS Functions Responsibilities * Manage, monitor and evaluate execution of the city sanitation plan. * Supervise consultants and engineering firms * Refine the implementation strategy * Identify and prepare projects * Periodically update the sanitation plan * Mobilize the financial resources Planning * Oversee internal training * Community liaison, user education and promotion of household sewer connections and latrines, including savings programs and sewer rate payments * Manage school sanitation program. * Assist housing estates to form sewer associations * Manage the tendering procedures for the construction and rehabilitation of the sewer systems, public facilities and school latrines. * Manage the tendering procedures for sewer, public facilities and Contract Management sludge hauling lease contracts, and monitor contractors' performance * Maintain a registry of qualified household latrine contractors and inspectors and monitor their performance * Train construction contractors, on-site construction inspectors and public facilities franchise operators. * Monitor municipal and industrial waste discharges * Monitor household and public sanitation facilities was well as Pollution Control sewer systems * Monitor performance of construction and lease contractors * Monitor municipal and industrial waste discharges * Monitor operation of landfill and sewage treatment ponds * Keep accounts of the lease contractors' rent payments and lines of credit, forecasting revenues and disbursements * Set lease rates to ensure that income is sufficient to cover operating costs and debt service Finance and Administration * Manage the Sanitation Fund, disbursing funds for household, public and school grants * Submit monthly financial statement to the District Treasury Department * Prepare annual budget and cash flow analyses * Personnel management 102 Annex 5 Page 1 of 2 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW REVENUE OF LocAL GOVERNMENTBODIES LocAL GOVERvMENTACT 1993 SIxTH SCHEDULE (SECTION 86) Entertainments Duty under the Entertainment Duty Act, 1962 (Act 150). 2. Casino Revenue under the Casino Revenue Tax Decree, 1973 (N.R.C.D. 200). 3. Betting Tax under the Betting Tax Act, 1965 (Act 268). 4. Income tax (Registration of Trade, Business, Profession or Vocation) Law, 1986 (P.N.D.C.L. 156). 5. Gambling Tax under Gambling Machines Decree, 1973 (N.R.C.D. 174). 6. Rates and levies on crops other than cocoa, coffee, cotton and sheanuts. 7. Fees: (i) Cattle Pounds (ii) Conservancy (iii) Slaughter House (iv) Market Dues (v) Market Stalls/Stores (vi) Lony Parks Dues (vii) Advertisements (viii) Trading Kiosks (ix) Restoration of Conservancy Service (x) Graveyard Receipts (xi) Bread Bakers (xii) Chop Bars (xiii) Corn Mills (xiv) Dressing Stations 8. Licences: (i) Dog Licenses (ii) Hawkers (iii) Extension of Hours (iv) Hotels and Restaurants 103 Annex 5 Page 2 of 2 (v) Beer and Wine Sellers (vi) Petroleum Installations (vii) Palm-wine Sellers (viii) Akpeteshie Distillers/Sellers (ix) Herbalists (x) Taxi Cabs (xi) Lorry Parks Overseers (xii) Taxi Drivers (Driving Licence) (xiii) Self-employed Artisans (xiv) Fishing Tolls (xv) Births and Deaths 9. Taxes chargeable on the income of the following categories of self- employed persons: (i) Spare parts dealers (ii) Chemical sellers (iii) Tailors and dressmakers (iv) Sandcrete blocks manufacturers (v) Musical spinners (vi) Radio and television repairers (vii) Gold and silver smiths (viii) Drinking bar operators (ix) Professional photographers (x) Chopbar keepers and cooked food sellers (xi) Butchers (xii) Refrigeration and air conditioning workshop owners (xiii) Hairdressers (xiv) Garage owners (xv) Video operators (xvi) Cornmill owners (xvii) , Co-operative distillers (xviii) Scrap dealers (xix) Livestock breeders and traders (xx) Traders (xxi) Liquor sellers 10. Miscellaneous: (i) Town Hall/Community Centre Receipts (ii) District Hearse Hiring (iii) Dislodging of latrines (iv) Hire of Bulldozers/Grader (v) Collection of Sand/Grave/Stone (vi) Slot Machines (vii) Stool Land Revenue 104 Annex 6 Page 1 of 5 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW PERCENTAGE CONTRIBUTION OF THE VARIOUS COMPONEN7S TO TOTAL RE VENUE AND EXPENDITURE AccRA METRoASSEMBLY 1988 1989 1990 1991 1992 A. SOURCES OF FUNDS DIRECT LOCAL REVENUES Basic Rate 3.16 1.93 1.69 0.72 0.71 Property Rates 13.45 15.96 19.18 11.79 8.36 FEES AND CHARGES Market Fees 6.55 6.48 5.45 2.90 1.99 Lorry Park Fees 0.58 0.88 1.18 0.94 1.99 Food stuff Exit Fees Other Fees and Charges 12.22 13.19 16.74 25.51 21.67 Miscellaneous 15.64 12.84 12.13 9.53 10.01 Trading Services 7.34 15.12 14.31 0.00 0.00 TOTAL DIRECT REVENUES 58.93 66.40 70.67 51.38 44.72 INDIRECT REVENUES Salary Grants 40.43 33.51 28.72 16.60 16.31 Grant in lieu of rates Ceded Revenue 0.53 0.96 3.07 Other Grants (Ex salary Grant) 0.64 0.09 0.08 31.06 35.89 TOTAL INDIRECT REVENUES 41.07 33.60 29.33 48.62 55.28 TOTAL SOURCES OF FUNDS 100.00 100.00 100.00 100.00 100.00 B. APPLICATION OF FUNDS Routine Operations Salary Grants 39.90 37.29 34.36 17.29 17.29 Staff Costs (Net of GOG Grant) 30.36 27.65 25.80 22.50 19.24 Travel & Transport 5.22 0.76 0.58 0.00 0.00 General Expenditure 16.47 23.24 23.82 11.61 14.64 Maintenance and Repair 4.51 8.21 12.57 48.61 48.83 Other 3.54 2.85 2.87 0.00 0.00 TOTAL RECURRENT EXPENDITURE 100.00 100.00 10000 100.00 100.00 Source: Accra Metropolitan Assembly 105 Annex 6 Page 2 of 5 PERCENTAGE CONTRIBUTION OF THE VARIOUS COMPONENTS TO TOTAL REVENUE AND EXPENDITURE TEMA MUNICIPAL ASSEMBLY 1988 1989 1990 1991 1992 A. SOURCES OF FUNDS DIRECT LOCAL REVENUES Basic Rate 2.44 1.64 1.86 1.50 0.76 Property Rates 43.54 48.44 41.54 37.42 27.87 FEES AND CHARGES Market Fees 8.97 8.45 7.05 8.75 7.34 Lorry Park Fees 1.48 2.24 2.44 2.15 1.51 Food stuff Exit Fees Other Fees and Charges 10.95 12.08 17.64 21.72 26.84 Miscellaneous 14.30 4.28 3.96 2.66 11.57 Trading Services 0.26 1.80 2.28 0.26 0.01 TOTAL DIRECT REVENUES 81.94 78.92 76.77 74.45 75.89 INDIRECT REVENUES Salary Grants 17.47 21.08 19.47 16.45 11.67 Grant in lieu of rates Ceded Revenue 0.68 1.63 2.89 Other Grants (Ex salary Grant) 0.59 0.00 3.08 7.47 9.54 TOTAL INDIRECT REVENUES 18.06 21.08 23.23 25.55 24.11 TOTAL SOURCES OF FUNDS 100.00 100.00 100.00 100.00 100.00 B. APPLICATION OF FUNDS Routine Operations Salary Grant 27.49 30.97 27.80 25.81 21.41 Staff Costs (Net of GOG Grant) 43.08: 32.51 33.77 30.29 25.76 Travel & Transport 11.82 12.94 16.21 19.72 18.82 General Expenditure 3.73 4.69 5.54 10.00 6.09 Maintenance and Repair 3.50 8.13 2.92 2.05 1.68 Other 10.39 10.77 13.75 12.13 26.24 TOTAL RECURRENT EXPENDITURE 100.00 100.00 100.00 100.00 100.00 Source: Tema Municipal Assembly 106 Annex 6 Page 3 of 5 PERCENTAGE CONTRIBUTION OF THE VARIOUS COMPONENTS TO TOTAL REVENUE EXPENDITURE KuMsI METRO ASSEMBLY 1988 1989 1990 1991 1992 % % %y % % A. SOURCES OF FUNDS DIRECT LOCAL REVENUES Basic Rate 5.20 3.71 3.59 1.51 0.38 Property Rates 13.42 10.38 12.15 10.30 8.82 FEES AND CHARGES Market Fees 31.16 28.00 29.43 44.57 42.18 Lorry Park Fees 7.01 5.77 4.61 4.97 5.96 Food stuff Exit Fees Other Fees and Charges 15.41 17.06 18.96 19.39 18.59 Miscellaneous 3.56 14.13 12.20 2.39 0.42 Trading Services 0.03 0.03 0.03 0.03 0.02 TOTAL DIRECT REVENUES 75.81 79.08 80.97 83.15 76.37 INDIRECT REVENUES Salary Grant 22.81 20.92 18.55 15.73 19.48 Grant in lieu of rates Ceded Revenue 0.48 1.11 4.15 Other Grants (Ex salary Grant) 1.38 0.00 0.00 0.00 0.00 TOTAL INDIRECT REVENUES 24.19 20.92 19.03 16.85 23.63 TOTAL SOURCES OF FUNDS 100.00 100.00 100.00 100.00 100.00 B. APPLICATION OF FUNDS Routine Operations Salary Grants 35.29 29.24 23.87 20.83 22.26 Staff Costs (Net of GOG Grant) 37.27 43.14 42.71 38.39 31.67 Travel & Transport 0.00 6.86 8.24 13.79 24.19 General Expenditure 0.00 4.55 7.26 5.84 6.66 Maintenance and Repair 0.00 5.95 7.48 8.50 3.92 Other 0.00 10.27 10.44 12.65 11.30 TOTAL RECURRENT EXPENDITURE 72.60 100.00 100.00 100.00 100.00 Source: Kumasi Metropolitan Assembly. 107 Annex 6 Page 4 of 5 PERCENTAGE CONTRIBUTION OF THE VARIOUS COMPONEN7S TO TOTAL RE VENUE AND EXPENDITURE SHAMA-AHANTA MUNICIPAL ASSEMBLY 1988 1989 1990 1991 1992 A. SOURCES OF FUNDS DIRECT LOCAL REVENUES Basic Rate 3.51 3.71 1.61 1.85 0.65 Property Rates 8.21 7.43 10.31 12.61 12.38 FEES AND CHARGES Market Fees 17.68 21.29 12.60 14.14 7.02 Lorry Park Fees 1.15 2.07 1.47 0.83 1.51 Food stuff Exit Fees Other Fees and Charges 14.98 17.88 19.37 13.08 14.49 Miscellaneous 3.93 2.32 2.65 11.27 8.71 Trading Services 0.35 0.07 0.12 0.03 11.15 TOTAL DIRECT REVENUES 49.81 54.77 48.14 53.81 55.93 INDIRECT REVENUES Salary Grants 50.19 45.23 40.57 44.12 30.72 Grant in lieu of rates 3.53 Ceded Revenue 0.79 2.07 6.23 Other Grants (Ex salary Grant) 0.00 0.00 10.50 0.00 3.59 TOTAL INDIRECT REVENUES 50.20 45.23 51.86 46.19 44.07 TOTAL SOURCES OF FUNDS 100.00 100.00 100.00 100.00 100.00 B. APPLICATION OF FUNDS Routine Operations Salary Grants 0.00 42.38 45.26 45.70 37.02 Staff Costs (Net of GOG Grant) 77.92 41.01 40.54 36.21 36.92 Travel & Transport 5.75 4.11 6.40 9.69 15.08 General Expenditure 3.74 4.51 3.14 3.08 4.01 Maintenance and Repair 4.83 3.89 1.29 1.17 1.51 Other 7.75 4.10 3.37 4.15 5.46 TOTAL RECURRENT EXPENDITURE 100.00 100.00 100.00 100.00 100.00 Source: Shama-Ahanta Municipal Assembly 108 Annex 6 Page 5 of 5 PERCENTAGE CONTRIBUTION OF THE VARIOUS COMPONEN7S TO TOTAL RE VENUE AND EXPENDITURE TAMALE MUNICIPAL ASSEMBLY 1988 1989 1990 1991 1992 A. SOURCES OF FUNDS DIRECT LOCAL REVENUES Basic Rate 5.59 3.36 2.58 3.40 1.99 Property Rates 2.50 1.37 1.29 1.09 0.97 FEES AND CHARGES Market Fees 10.91 7.74 6.38 8.66 6.13 Lorry Park Fees 1.87 3.03 2.90 1.65 1.67 Food stuff Exit Fees Other Fees and Charges 9.78 5.81 8.77 9.48 12.16 Miscellaneous 0.55 0.34 0.58 2.80 5.72 Trading Services 0.54 0.11 0.00 0.40 0.38 TOTAL DIRECT REVENUES 38.02 53.21 49.24 44.93 40.78 INDIRECT REVENUES Salary Grants 60.50 44.15 47.80 51.41 47.98 Grant in lieu of rates 2.48 Ceded Revenue 2.96 3.66 11.25 Other Grants (Ex salary Grant) 1.48 0.16 0.00 0.00 0.00 TOTAL INDIRECT REVENUES 61.98 46.79 50.76 55.07 59.22 TOTAL SOURCES OF FUNDS 100.00 100.00 100.00 100.00 100.00 B. APPLICATION OF FUNDS Routine Operations Salary Grants 61.10 54.28 47.17 55.27 54.98 Staff Costs (Net of GOG Grant) 23.96 29.83 20.72 15.29 15.29 Travel & Transport 0.79 1.59 17.34 15.28 13.93 General Expenditure 11.52 11.99 7.01 3.28 3.39 Maintenance and Repair 2.63 2.31 1.84 4.29 4.54 Other 0.00 0.00 5.92 6.59 7.87 TOTAL RECURRENT EXPENDITURE 100.00 100.00 100.00 100.00 100.00 Source: Tamale Municipal Assembly 109 Annex7 Page 1 of 5 REPUBLIC OF GHANA URBAN DEVELOPMENT STRATEGY REVIEW ACTUAL METRO/MUNICIPAL ASSEMBLY REVENUE AND EXPENDITURE 1988 (000 CEDIS) A. SOURCES OF FUNDS ACCRA TEMA KUMASI SHAMA TAMALE DIRECT LOCAL REVENUES Basic Rate 17579 5219 22701 5509 3248 Property Rates 74796 93009 58561 12885 1455 FEES AND CHARGES Market Fees 36389 19155 135914 27755 6346 Lorry Park Fees 3212 3163 30600 1810 1087 Food stuff Exit Fees 3650 Other Fees and Charges 67925 23390 67229 23522 5685 Miscellaneous 86935 30549 15549 6171 320 Trading Services 40779 555 138 548 316 TOTAL DIRECT REVENUES 327615 175040 330692 78200 22107 INDIRECT REVENUES Salaries Grant 224777 37323 99500 78800 35182 Grant in lieu of rates Ceded Revenue Other Grants (Ex salary Grant) 3544 1256 6040 863 TOTAL INDIRECT REVENUES 228321 38579 105540 78800 36045 TOTALSOURCES OFFUNDS 555936 213619 436232 157000 58152 B. APPLICATION OF FUNDS Routine Operations GOG Salaries Grant 224777 37323 99500 78800 35182 Staff Costs (Net of GOG Grant) 171011 58482 105069 66719 13797 Travel & Transport 29414 16041 4927 456 General Expenditure 92773 5060 3201 6633 Maintenance and Repair 25398 4757 4138 1514 Other 19944 14102 6637 TOTAL RECURRENT EXPENDITURE 563317 135765 281914 164422 57582 SURPLUS FOR CAPITAL EXPENDITURE -7381 77854 154318 -7422 570 CAPITAL EXPENDITURE 9597 74657 73119 6561 EXPENDITURES Recurrent 563317 135765 281914 164422 57582 Capital 9597 74657 73119 6561 TOTAL 572914 210422 355033 170983 57582 Surplus/Deficit -16978 3197 81199 -13983 570 110 Annex 7 Page 2 of 5 ACTUAL METRO/MUNICIPAL ASSEMBLIES REVENUE AND EXPENDITURE 1989 (000 CEDIS) A. SOURCES OF FUNDS ACCRA TEMA KUMASI SHAMA TAMALE DIRECT LOCAL REVENUES Basic Rate 15857 4304 20543 7324 2908 Property Rates 130894 127438 57574 14660 1189 FEES AND CHARGES Market Fees 53119 22221 155246 42000 6706 Lorry Park Fees 7177 5904 31980 4093 2621 Food stuff Exit Fees 27250 Other Fees and Charges 108135 31785 94608 35270 5028 Miscellaneous 105304 11259 78369 4578 295 Trading Services 123947 4743 143 131 91 TOTAL DIRECT REVENUES 544433 207654 438463 108056 46088 INDIRECT REVENUES Salaries Grant 274748 55457 115985 89236 38238 Grant in lieu of rates 2147 Ceded Revenue Other Grants (Ex salary Grant) 777 136 TOTAL INDIRECT REVENUES 275525 55457 115985 89236 40521 TOTAL SOURCES OF FUNDS 819958 263111 554448 197292 86609 B. APPLICATION OF FUNDS Routine Operations GOG Salaries Grant 274748 55457 115985 89236 38238 Staff Costs (Net of GOG Grant) 203673 58223 171097 86346 21012 Travel & Transport 5584 23175 2728 8644 1122 General Expenditure 171197 8405 18034 9489 8448 Maintenance and Repair 60485 14553 23597 8197 1625 Other 21030 19282 40732 8634 TOTAL RECURRENT EXPENDITURE 736717 179095 372173 210546 70445 SURPLUS FOR CAPITAL 83241 84016 182275 -13254 16164 EXPENDITURE CAPITAL EXPENDITURE 99072 139895 2966 2283 EXPENDITURES Recurrent 736717 179095 372173 210546 70445 Capital 99072 139895 2966 2283 TOTAL 736717 278167 512068 213512 72728 Surplus/Deficit 83241 -15056 42380 -16220 13881 Annex 7 Page 3 of 5 ACTUAL METRO/MUNICIPAL ASSEMBLIEs REVENUE AND ExPENDITURE 1990 (000 CEDIS) A. SOURCES OF FUNDS ACCRA TEMA ]KUMASI SHAMA TAMALE DIRECT LOCAL REVENUES Basic Rate 18314 6034 24878 4608 2595 Property Rates 207849 135052 84242 29459 1294 FEES AND CHARGES Market Fees 59026 22913 204080 35998 6419 Lorry Park Fees 12783 7947 31950 4208 2920 Food stuff Exit Fees 26914 OtherFeesand Charges 181418 57363 131456 55341 8830 Miscellaneous 131474 12859 84593 7564 579 Trading Services 155121 7418 183 350 TOTAL DIRECT REVENUES 765985 249586 561382 137528 49551 INDIRECT REVENUES Salaries Grant 311269 63300 128624 115895 48102 Grant in lieu of rates Ceded Revenue 5772 2223 3356 2252 2977 Other Grants (Ex salay Grant) 871 10000 30000 TOTAL INDIRECT REVENUES 317912 75523 131980 148147 51079 TOTAL SOURCES OF FUNDS 1083897 325109 693362 285675 100630 B. APPLICATION OF FUNDS Routine Operations GOG Salaries Grant 311269 63300 128624 115895 48102 Staff Costs (Net of GOG Grant) 233740 76897 230144 103792 21135 Travel & Transport 5251 36897 44418 16388 17685 General Expenditure 215828 12614 39098 8034 7153 Maintenance and Repair 113865 6658 40289 3301 1876 Other 26016 31309 56282 8639 6035 TOTAL RECURRENT EXPENDITURE 905969 227675 538855 256049 101986 SURPLUS FOR CAPITAL EXPENDITURE 177928 97434 154507 29626 -1356 CAPITAL EXPENDITURE 136847 95243 137564 31893 8503 EXPENDITURES Recurrent 905969 227675 538855 256049 101986 Capital 136847 95243 137564 31893 8503 TOTAL 1042816 322918 676419 287942 110489 Surplus/Deficit 41081 2191 16943 -2267 -9859 112 Annex 7 Page 4 of 5 ACTUAL METRO/MUNICIPAL ASSEMBLIES RE VERvUE AND ExPENDITURE 1991 (000 CEDIS) A. SOURCES OF FUNDS ACCRA TEMA KUMASI SHAMA TAMALE DIRECT LOCAL REVENUES Basic Rate 15546 6160 15255 6090 4667 Property Rates 256209 153818 103687 41600 1502 FEES AND CHARGES Market Fees 63006 35978 448822 46632 11903 Lorry Park Fees 20453 8835 50024 2737 2261 Food stuff Exit Fees 23985 OtherFees and Charges 554360 89284 195252 43121 13027 Miscellaneous 207150 10942 24096 37181 3841 Trading Services 1056 274 92 550 TOTAL DIRECT REVENUES 1116724 306073 837410 177453 61736 INDIRECT REVENUES Salaries Grant 360718 67624 158457 145497 70632 Grant in lieu of rates Ceded Revenue 20853 6699 11228 6825 5023 Other Grants (Ex salary Grant) 675157 30699 TOTAL INDIRECT REVENUES 1056728 105022 169685 152322 75655 TOTAL SOURCES OF FUNDS 2173452 411095 .1007095 329775 137391 B. APPLICATION OF FUNDS Routine Operations GOG Salaries Grant 360718 67624 158457 145497 70632 Staff Costs (Net of GOG Grant) 469361 79382 291993 115296 19541 Travel & Transport 51673 104843 30851 19526 General Expenditure 242246 26204 44446 9821 4198 Maintenance and Repair 1014126 5384 64612 3724 ,5478 Other 31790 96193 13201 8422 TOTAL RECURRENT EXPENDITURE 2086451 262057 760544 318390 127797 SURPLUS FOR CAPITAL EXPENDITURE 87001 149038 246551 11385 9594 CAPITAL EXPENDITURE 355437 73675 164879 12202 3386 EXPENDITURES Recurrent 2086451 262057 760544 318390 127797 Capital 355437 73675 164879 12202 3386 TOTAL 2441888 335732 925423 330592 131183 Surplus/Deficit -268436 75363 81672 -817 6208 113 Annex 7 Page 5 of 5 AcTuAL METRO/MUNICIPAL ASSEMBLIES REVENUE AND ExPENDITURE 1992 (000 CEDIS) A. SOURCES OF FUNDS ACCRA TEMA KUMASI SHAMA TAMALE DIRECT LOCAL REVENUES Basic Rate 17026 6262 3601 2545 3293 Property Rates 201093 228683 84272 48245 1598 FEES AND CHARGES Market Fees 47982 60228 402861 27361 10139 Lorry Park Fees 47764 12362 56960 5895 2760 Food stuff Exit Fees 19470 OtherFees and Charges 521256 220279 177578 56481 20117 Miscellaneous 240789 94915 3988 33947 9470 Trading Services 60 203 43467 624 TOTAL DIRECT REVENUES 1075910 622789 729463 217941 67471 INDIRECT REVENUES Salaries Grant 392433 95791 186072 119691 79391 Grant in lieu of rates 13758 Ceded Revenue 73975 23719 39611 24275 18607 Other Grants (Ex salary Grant) 863397 78321 14001 TOTAL INDIRECT REVENUES 1329805 197831 225683 171725 97998 TOTAL SOURCES OF FUNDS 2405715 820620 955146 389666 165469 B. APPLICATION OF FUNDS Routine Operations GOG Salaries Grant 392433 95791 186072 119691 79391 Staff Costs (Net of GOG Grant) 436635 115264 264685 119383 22080 Travel & Transport 84193 202212 48762 20115 General Expenditure 332388 27244 55639 12956 4891 Maintenance and Repair 1108269 7519 32750 4895 6554 Other 117424 94440 17659 11365 TOTAL RECURRENT EXPENDITURE 2269725 447435 835798 323346 144396 SURPLUS FOR CAPITAL EXPENDITURE 135990 373185 119348 66320 21073 CAPITAL EXPENDITURE 119417 224434 182806 86521 23341 EXPENDITURES Recurrent 2269725 447435 835798 323346 144396 Capital 119417 224434 182806 86521 23341 TOTAL 2389142 671869 1018604 409867 167737 Surplus/Deficit 16573 148751 -63458 -20201 -2268 114 Biblioeraphy Acquaye, Ebenezer & Associates - "Study of Institutional - Legal Problems Associated with Land Delivery in Accra". Department of Land Economy & Estate Management, U.S.T., Kumasi, Ghana, October 1989 Alderman, Harold - "Nutritional Status in Ghana and its Determinants". 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