Ghana - Forest Resources Management Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 17416 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA FOREST RESOURCES MANAGEMENT PROJECT (Credit 1976-GH) February 27, 1998 Country Department 10 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENT'S Cedi/US$1.00 Year 1990 1991 1992 1993 1994 1995 1996 1997 SAR 210 217 221 223 225 _ Actual 325 390 420 700 980 1,250 1,500 2,200 WEIGHT AND MEASURES5 Metric System FISCAL YEAR OF BORROWER January 1 - December 31 ABBREVIATIONS AND) ACRONiYMS AfDB African Development Bank AFU Agro-Forestry Unit CIDA Canadian International Development Agency DANIDA Danish International Development Agency DFID Department for -International Development (UK) ERR Economic Rate of Return FAO Food and Agricultural Organisation FAO/CP FAQ/World Bank Cooperative Program FD Forestry Department FDPB Forestry Department Planning Branch FIMP Forest Inventory and Management Project FORIG Forestry Research Institute of Ghana FPIB Forest Products Inspection Bureau FRMP Forestry Resource Management Project FSDP Forest Sector Development Project GFS Ghana Forestry Service GOG Government of Ghana ICR Implementation Completion Report IDA International Development Association IRNR Institute of Renewable Natural Resources IUCN The World Conservation Union M&E Monitoring and Evaluation MEST Ministry of Environment, Science and Technology MLF Ministry of Lands and Forestry MLNR Ministry of Lands and Natural Resources MOA Ministry of Agriculture MOFA Ministry of Food and Agriculture NRMP Natural Resources Management Project ODA Overseas Development Administration (UK) PB Planning Branch PCU Project Coordination Unit PPF Project Preparation Facility PPMED Planning, Policy, Monitoring and Evaluation Department RFD Rural Forestry Division SAR Staff Appraisal Report SDR Special Drawing Rights SFS Sunyani Forestry School TEDB Timber Export Development Board WB World Bank WD Wildlife Department WITC Wood Industries Training Centre Vice President Jean Louis Sarbib Country Director . Peter Harrold. Techriical Manager Jean Paul Chausse Task Team Leader Robert Epworth  IMPLEMENTATION COMPLETION REPORT FOR OFFICIAL USE ONLY REPUBLIC OF GHANA FOREST RESOURCES MANAGEMENT PROJECT (Credit No. 1976-GH) Table of Contents Preface .............................................. iii Evaluation Summary .............................................. v PART I: PROJECT IMPLEMENTATION ASSESSMENT Statement and Evaluation of Objectives ...............................................1 Achievement of Project Objectives .............................................. 3 Imnplementation Record and Major Factors Affecting the Project ................................... 8 Project Sustainability .............................................. 10 Bank Performance ....................................................... 11 Borrower Performance .............................................. 11 Assessment of Outcome .............................................. 12 Future Operations .............................................. 12 Lessons Learned .............................................. 13 PART II: STATISTICAL TABLES 1. Summary of Assessments ............................................15 2. Related Bank Loans/IDA Credits ........................................... 16 3. Project Timetable ............................................ 17 4. Loan Disbursements: Cumulative Estimated and Actual .................................... 17 5. Key Indicators for Project Implementation ........................................... 18 6. Key Indicators for Project Operation ........................................... 19 7. Studies Included in Project ........................................... 20 8A. Project Costs ........................................... 22 8B. Project Financing ........................................... 22 9. Economic Costs and Benefits ........................................... 23 10. Status of legal Covenants ........................................... 26 11. Compliance with Operational Manual Statements ........................................... 27 12. Bank Resources: Staff Inputs ........................................... 28 13. Bank Resources: Missions ........................................... 28 APPENDICES 1. ICR Mission Aide Memoire 2. Borrower's Implementation Completion Report: Executive Summary 3. Comments from Cofinanciers and Parallel Financiers Danida DFID 4. Maps: IBRD Nos.15116R3, 18393R1, 18469R2, 18472R, 18484R2 This document has a restricted distribution and may be used by recipients only in the pierformnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization..   IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA FOREST RESOURCES MANAGEMENT PROJECT (Credit No. 1976-GH) Preface This is the Implementation Completion Report (ICR) for the Forestry Resource Management Project (FRMP) for which Credit 1976-GH, in the amount of SDR 30.6 million (US$39.6 million equivalent), was approved on December 22, 1988, and made effective on November 30, 1989. The IDA credit was closed on June 30, 1997, two years beyond the original closing date of June 30, 1995. Final disbursement took place on November 6, 1997, at which time the undisbursed balance of SDR 21,693 (equivalent to about US$30,000) was canceled. Cofinancing for the project of US$8.3 rnillion equivalent was provided by the Danish International Development Agency (Danida), and parallel financing of US$7.1 million equivalent by the UK Overseas Development Administration (ODA, now Department for International Development, DFID). The ICR was prepared by a Food Agricultural Organisation/World Bank Cooperative Program (FAO/CP) mission which visited Ghana from October 29 to November 14, 1997,1 and finalized by R. F,pworth, TTL for the project. The final draft was reviewed by G. Schreiber (AFTA3) and J. Chevallier (AFTS3). The Borrower, primarily through the MLF Project Coordination Unit (PCU), contributed to the preparation of the ICR by arranging field visits and meetings, providing data and infornation, as well as commenting on the mission's aide memoire. The Borrower's own implementation completion report was transmitted to the Bank in January 1998; the Executive Summary is attached as Appendix 2 to this ICR, and the full report is available in the project files of the Africa Region Information Center. 1 The mission consisted of A. Simon, Mission Leadcr and Forestcr (TCIL). and J. T racey-White. Economist/Institutions Specialist (Consultant). - iii -   IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA FOREST RESOURCES MANAGEMENT PROJECT (Credit No. 1976-GH) Evaluation Summary Introduction (i) The Forestry Resource Management Project (FRMP) was the first Bank project directly in support of the Ghana's forestry sector. The project was born out of the 1986 multi-donor Forestry Sector Review carried out under the auspices of the Global Tropical Action Plan, which outlined an action plan fDr the conservation and use of Ghana's forests. The Bank agreed to support these initiatives and approved a Project Preparation Facility (PPF). The resulting project was seen as the first phase of a long- term development program for the sector and was part of the various IDA-financed projects/programs to support the Government's Economic Recovery Program (ERP) which was introduced in April 1983. Project Objectives (ii) The project was intended to sharpen the focus of natural resource management in Ghana through the achievement of three main objectives: managing industrial forestry production based on a sustainable yield policy; promoting conservation and fuelwood tree planting to counteract fuelwood shortages and environmental degradation; and sector institutional strengthening and reform. These objectives were clear, realistic and relevant to the sector's needs at that time and are still relevant today. (iii) In support of these objectives, the project was designed with six components: (i) sector policy reforms: including changes in forest revenue policy, allocation of logging concessions, improved staff incentives and rationalizing timber trading; (ii) forest management: forest inventories and improved planning and forest management of 1.7 million hectares of forest in and outside reserves to protect vatersheds, endangered species and important ecosystems; (iii) rural forestry: jointly implemented through the Ministry of Lands and Forestry (MLF) and the Ministry of Food and Agriculture (MOFA), to upgrade/establish nurseries to provide and distribute around 7 million seedlings, the equivalent to 3,000 hectares of fuelwood plantations; (iv) institutional strengthening: program for enhancing organizational, monitoring and management skills within the MLF, including establishing a Planning, Policy, Monitoring and Evaluation Department (PPMED) and supporting the activities of the Forestry and Wildlife Departments, the Timber Export Development Board (TEDB) and the Forest Products Inspection Bureau (FPIB); (v) forestry education and training: involving the Institute of Renewable Natural Resources (IRNR) and the Sunyani Forestry School (SFS) to improve the relevance and quality of training in the natural resource management sector; and (vi) adaptive research: strengtlhening the capacity of the Forestry Research Institute of Ghana (FORIG) to determine sector priorities and implement an appropriate adaptive research program. -v -  Implementation Experience and Results (iv) After a slow start in 1990 caused by indifferent project management by the government and other factors outside the control of the lead agency, implementation peiformance improved greatly from 1993 onwards, and by Credit closing (including two years' extension) in 1997, the project was successful in achieving the substantial part of its technical objectives. Where policy objectives were not fully met, ongoing programs in the post-project period are expected to prodluce satisfactory results in the coming months. (v) Improved management of industrial forestry was to be achieved through policy reform and the introduction of improved resource planning and better field management techniques. On the policy side, progress was made in a number of areas, including: bringing all logging concessions (both on and off reserve) under one administrative system; requiring concessionaires to develop and operate working plans approved by the Forestry Department (FD); establishing annual timber harvest limits (annual allowable cut - AAC) based on sustained yield estimates; and the introduction of random field audits in concessions. Timber royalties were increased up to levels proposed in the SAR, although these have since been eroded by inflation and local currency depreciation. Attempts to improve concession arrangements and increase royalties were generally well formulated, but implementation tended to be weak. A review of the log export ban was undertaken, concluding that the ban was appropriate under the present circumstances in Ghana. (vi) Although significant reforms concerning concession allocation were still outstanding at Credit closing, these have since been embodied in legislation (the Timber Resources Management Bill) that was passed within the next six months, in December 1997. This legislaition contains positive elements that go beyond those envisaged in the project, including social responsibility agreements with local communities and provisions to link plantation development with harvesting of natural timber. Action to increase royalties to levels that reflect the economic price of timber is planned for the first quarter of 1998, to be followed in mid-1998 by further new consolidated legislation (Forest Bill) which will remove anomalies in existing legislation and establish the Forest Service. The new royalty system is expected to have provision for automatic rate adjustments, based on international timber price trends. (vii) The impact of the strengthening of the Forestry Department Planning Branch (FDPB) was particularly significant, as it was then able to generate more reliable quantitative information on which to base sector policy reforms and plan for sustainable resource use. Major improvements were made in the capacity to manage production forestry at field level, including preparation of forest inventories, harvesting schedules, technical manuals and working plans. SignifiFcant achievements during the project include: (i) completing inventories of all reserves in the high forest: zone; (ii) undertaking of the first off- reserve forest inventory; (iii) introduction of a 40-year felling cycle coupled with tighter logging controls; (iv) development of a national AAC (and anticipated introduction of district felling limits); (v) preparation of a guide for sustainable use of non-timber forest products (NTFP); (vi) intensified controls on illegal logging; (vii) preparation of a Forest Protection Strategy to ensure biodiversity conservation; and (viii) development of a collaborative forest management framework for on and off reserve situations to ensure all future forest management is socially sustainable. The successful completion of these project activities put Ghana at the forefront of international action to develop strategies for the effective combination of conservation with the sustainable economic use of the forest. (viii) Inventory and mapping of nearly 10,000 ha of existing Government-planted teak plantations was also undertaken, although there were many problems with the remote sensing. However, none of the - vi -  project proposed plantation rehabilitation took place, as government policy changed away from public expenditure on this activity, in favor of encouraging the private sector investment. (ix) Promoting conservation and tree planting on farms was also slow to take off, but picked up mnomentum in the second half of the project and eventually exceeded SAR targets. Although cooperation between the Rural Forestry Department (RFD) of MLF and the Agro-Forestry Unit (AFU) of MOFA was never developed to the planned level, the combined achievements of the two units was quite satisfactory, with seedling production increasingly being taken over by the private sector; an estimated 16,000 farmers adopting agro-forestry techniques; and the equivalent of over 20,000 ha being covered in an intensive tree planting campaign. (x) Institutional strengthening was perhaps the project objective where the least real progress was mrade, apart from FDPB which received strong support under the associated Forest Inventory and MAanagement Project parallel-financed by ODA/DFID. Although significant staff training was undertaken, technical assistance engaged, and facilities and mobility improved, only limited progress was mnade in strengthening operational capacity of the two main sector institutions, the Forestry Department (FD) and the Wildlife Department (WD). This suggests that more fundamental institutional change was required than that proposed by the project. However, significant progress is now being made under two associated initiatives leading to the preparation of the proposed Natural Resources Management Project (NRMP), the follow-on project to FRMP. A new DFID-financed initiative (Forest Sector Development Project - FSDP) was launched in 1996 to reorganize FD into a leaner and semi-autonomous Ghana Forest Service (GFS). Planning for this reorganization is well underway, and GFS is expected to come into being with the passing of the Forest Bill in mid-1998. At the same time, planning is well advanced for restructuring of WD -- being undertaken by the World Conservation Union (IUCN) with funding provided through a Japanese grant associated with the preparation of NRMP, in an initiative that started in September 1996. (xi) The key factor that adversely effected project implementation in the early days was the lack of commitment to sector reform by the government prior to 1993, which was reflected in the lack of stability in project implementation arrangements. The major underlying factor at that time was the change from a Presidential Decree system of government to a parliamentary system in December 1992, and the circumstances leading up to the election, combined at that same time with strong lobbying from loggers and millers intent on maintaining the status quo. This delayed the adoption of crucial sector policy reforms. Following the project mid-term review in 1992, implementation performance improved significantly from 1993 onwards, with increased commitment to change being exhibited by the GOG and MLF, and improved project coordination and management by a newly constituted project coordination unit within MLF. The Borrower's performance is, thus, rated as unsatisfactory up until the mid-term review, but satisfactory thereafter. (xii) The project met most of its physical targets, in terms of civil works, vehicles and equipment. (Construction targets for staff housing and offices for FD, IRNR, SFS, WD and MOFA have all been achieved, as well as the provision of new teaching/laboratory accommodation for IRNR and FORIG. Procurement targets for vehicles and office, camp and field equipment have also been met. For these two categories, actual expenditure exceeded appraisal estimates, mainly due to the mid-term review upward adjustments. Expenditure on training was slightly lower than planned, as not all line agency proposals. Against MTR amended targets, actual expenditure on civil works was up but only 8 percent, and vehicles amd equipment by 22 percent. Expenditure on training was lower than planned, as not all line agency proposals were ultimately approved by MLF. Technical assistance was less than half the appraisal estimate, again partly because of the mid-term review adjustments, and also due to a certain - vii -  unwillingness by some implementing agencies, who considered that adequate local expertise was available. Final expenditure in this category was almost in line with the MTR amended figure. Increased expenditure on all the above three categories was at the expense of operating costs, which were down 40% on the appraisal estimate and 20% on the MTR revised figure. At Credit closing, US$69.0 million was disbursed, a higher total amount than was estimated at appraisal because of the foreign exchange gain between the SDR and the US$ (increasing IDA disbursements from US$39.4 million to US$43.7 million) and the 18-months extension to ODA/DFID support which increased the parallel financing contribution to