Ghana - Village Infrastructure Project

Report No. PIC3424 Project Name Ghana-Village Infrastructure Project Region Africa Sector Agriculture Project ID GHPA41150 Borrower Government of Ghana (GOG) Implementing Agency Ministry of Food and Agriculture (MOFA) P.O. Box M. 37 Accra, Ghana Contact: Dr. Sam Kojo Dapaah, Chief Director Ministry of Food and Agriculture Telephone: 233-21-666-567 Fax: 233-2-668-245 1. Country/Sector Background. Agriculture, the dominant sector of Ghana's economy, accounts for nearly 50 percent of GDP, about 60 percent of foreign exchange earnings, and provides livelihood for an estimated 70 percent of the population. It is also the most important component of the private sector, with millions of smallholder producers and processors being predominant. Ghanaian agriculture is also well diversified and supports production of various food and export crops under a broad range of agro-ecological conditions. With only 29 percent of the total area of 23.9 million ha under cultivation and a production system characterized by low technology, there is significant untapped potential for intensification of existing farming systems using improved on-the-shelf technologies, and from environmentally-benign expansion into new areas. These features of Ghanaian agriculture -- high employment, a large contribution to economic production dominated by low-income smallholders, and high untapped potential -- make it a desirable vehicle for inducing higher growth leading to poverty reduction. 2. However, agriculture+s contribution to overall economic growth and poverty alleviation has been well below expectations during the last decade. The slow growth in agriculture is due firstly to its subsistence nature and secondly to factors that perpetuate this state. Subsistence production is largely characterized by millions of small producers using low-input, low-output technologies on rainfed crops. With increasing population pressure, the traditional bush-fallow system which, under conditions of low rural population density, naturally regenerated soil productive capacity has been dangerously shortened in many places, resulting in soil fertility decline. Significant growth in agriculture has also been constrained by non-agronomic factors, such as the limited scope and poor conditions of rural infrastructure which has led to the relative isolation of rural communities from markets and high post-harvest losses. 3. Project Rationale. The recent Extended Poverty Study (EPS) estimates that one-fifth of Ghana+s population of 16.5 million still live below the poverty line (defined as one-half of mean per capita  household expenditures). Poverty in Ghana is predominantly rural and agricultural: 54 percent of those classified as poor are food crop producers who depend on farming as primary source of income; 39 percent of them live below the poverty line. The main constraints to improving rural living standards have been identified as the poor state or non- existence of infrastructure for rural water, village post-harvest and rural transport on which the poor depend for their livelihood. The proposed project is a core part of IDA Country Assistance Strategy. It would help achieve its objectives by improving access of the poor to technical and financial resources for village infrastructure and enhancing rural communities+ capacity to manage and sustain poverty- reducing interventions. 4. Project Objectives. The primary objective of the Village Infrastructure Project would be to improve the quality of life of Ghana+s rural poor by increasing the transfer of technical and financial resources to improve basic village-level infrastructure. Specific project objectives are to: (i) empower local communities and beneficiary groups through technical assistance and other measures to identify, plan, implement and maintain small, village-level infrastructure investments; (ii) increase rural communities+ access to development resources through small grants; (iii) strengthen community and district-level institutions to improve the efficiency of rural resource transfer and ensure the sustainability of poverty-reducing interventions. 5. Project Description and Components. Four components have been identified: (i) Rural Transport Infrastructure, comprising small access roads, village tracks and trails and small bridges over village streams; (ii) Rural Water Infrastructure: comprising hand dug wells, boreholes, handpumps and small reservoirs (for livestock) and peri-urban agriculture; (iii) Village Post-Harvest Infrastructure: comprising threshing and drying floors, and basic village storage, including cold storage for coastal fishermen and women, and; (iv) Institutional Strengthening: comprising technical assistance for strengthening beneficiary communities in project implementation, management and for carrying out basic O&M. 6. Project Financing. Total project cost is estimated at US$70 million with an IDA contribution of US$50 million representing 71 percent of project costs. GOG would contribute US$7 million, about 10 percent of project costs, while beneficiary communities would provide an estimated US$3 million mainly through in-kind contributions such as community-based labor. Co-financing of US$10 million and DM15 million (about US$10 million) is expected from IFAD and KfW, respectively. 7. Project Implementation Arrangements. Overall project implementation would be coordinated by a Project Policy Committee (PCC) that would comprise the Ministries of Finance and Economic Planning, Food and Agriculture, Local Government and Rural Development, Works and Housing, Trade and Industries, Environment, Science and Technology, and Transport and Communications. The PCC would provide overall policy guidance to project. It would also coordinate activities among the sector ministries. The PCC would normally meet at least twice a year to discuss workplans, review progress reports, and provide overall - 2-  implementation advice. 8. At the technical level, the project will be coordinated by a Steering Committee that will provide specific sectoral expertise drawing upon the technical background of each of the collaborating agencies. It will also ensure that implementation experience from IDA and other donor funded operations in these sectors are taken into account in implementing the proposed Village Infrastructure Project. In addition to the Chief Directors of the implementing ministries of Food and Agriculture, Local Government and Rural Development and Works and Housing, the Steering Committee will consist of the following agencies: the Community Water and Sanitation Division, the Department of Cooperatives, National Board for Small-Scale Industries, Ghana National Association of Farmers and Fishermen (GNAFF), Private Enterprise Foundation (PEF), the Extension and the Postharvest Departments of the Ministry of Food and Agriculture, and a representative of the NGO community. The Technical Steering Committee will be chaired by the Chief Director, Ministry of Food and Agriculture. 9. Implementation Arrangements. The Ministry of Food and Agriculture will have primary responsibility for implementing all aspects of the project related to agriculture infrastructure, such as postharvest storage and processing, water for livestock and agriculture production, non-motorized transport and rehabilitation and/or construction of village tracks and trails for improved access between farms and villages. The Ministry of Local Government and Rural Development will be responsible for implementing the institutional strengthening of the District Assemblies, and the Community Water and Sanitation Department will implement the village water supply component. Project preparation and implementation will explicitly take into consideration the existing projects in the rural areas, such as the Agriculture Sector Investment Project (ASIP) and the Community Water and Sanitation Project (CWSP) in order to maximize synergies in the development of rural infrastructure. 10. Project Sustainability. To ensure sustainability of project benefits, measures would be taken during project preparation to promote local ownership and involve beneficiary groups in developing project concept and refining local priorities. This process would begin with a series of regional client consultation workshops (CCWs), for which CCF resources have been approved. These workshops would be followed by the placement of facilitators at the district-level to promote general awareness of the project among communities and districts. In addition, the project would support the strengthening of district assemblies and local development organizations to assist beneficiary communities in organizing themselves to meet project eligibility criteria. 11. Lessons from Previous IDA Involvement. Since 1989, government strategy for agricultural development has been driven by its Medium-Term Agricultural Development Strategy (MTADS) which was developed with IDA assistance. Key lessons from implementation of the MTADS have been: (i) a realization that significant dearth of implementation capacity exists at both the central and local levels and this has been a major constraint to achieving accelerated growth; (ii) access to isolated farms and villages with increased production potential is often a limiting factor to achieving this potential; (iii) training of farmers - 3-  and villagers in group ownership and operations and maintenance is vital for sustaining rural infrastructure; and (iv) technical support agency have limited capacity and are reluctant to participate in small subprojects that are located in remote villages. The project would incorporate these lessons in design features and the nature and scope of technical assistance. 12. Poverty Category. The primary impact of the proposed operation would be on poverty alleviation; about 80 percent of anticipated program impact would be on the rural poor. 13. Environmental Category. Category B. 14. Project Objective Category. The project would contribute to poverty alleviation and local capacity building. Task Manager Rudolph Polson The World Bank 1818 H Street N.W. Washington D.C. 20433 Tel.: (202) 473-5526 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. - 4 -