AFRICAN DEVELOPMENT FUND GHA/PAAR/2002/01Language: EnglishOriginal: English
APPRAISAL REPORT
COMMUNITY FORESTRY MANAGEMENT PROJECT
REPUBLIC OF GHANA
NB: This document contains errata or corrigenda (see Annexes)
AGRICULTURAL AND RURALDEVELOPMENT DEPARTMENT (OCAR) APRIL 2002
TABLE OF CONTENTS
PROJECT INFORMATION SHEET, CURRENCY AND MEASURES, LIST OF TABLES,LIST OF ANNEXES, LIST OF ABBREVIATIONS, BASIC DATA SHEET, PROJECTLOGICAL FRAMEWORK, AND EXECUTIVE SUMMARY (i)-(vii)
1. ORIGIN AND HISTORY OF THE PROJECT
2. THE AGRICULTURAL SECTOR
2.1 Salient Features2.2 Agricultural Development Strategy2.3 Agricultural Decentralisation2.4 Land Tenure2.5 Poverty Status2.6 Gender Issues2.7 HIV/AIDS Issues
3. THE FORESTRY SUB-SECTOR
3.1 The Natural Forest Resources3.2 Plantation Forestry3.3 The Timber Industry3.4 Forest Policy and Legislation3.5 Interventions by Major Donors in the Sub-sector3.6 Constraints and Potentials3.7 Institutions Related to Forestry
4. THE PROJECT
4.1 Project Concept and Rationale4.2 Project Area and Beneficiaries4.3 Strategic Context4.4 Project Objective4.5 Project Description4.6 Production, Markets and Prices4.7 Environmental Impact4.8 Project Costs4.9 Sources of Finance and Expenditure Schedule
5. PROJECT IMPLEMENTATION
5.1 Executing Agency5.2 Institutional Arrangements5.3 Supervision and Implementation Schedule5.4 Procurement Arrangements5.5 Disbursement Arrangements5.6 Monitoring and Evaluation
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5.7 Financial Reporting and Auditing5.8 Aid Co-ordination
6. PROJECT SUSTAINABILITY AND RISKS
6.1 Recurrent Costs6.2 Project Sustainability6.3 Critical Risks and Mitigating Measures
7. ROJECT BENEFITS
7.1 Financial Analysis7.2 Economic Analysis7.3 Social Impact Analysis7.4 Sensitivity Analysis
8. CONCLUSIONS AND RECOMMENDATIONS
8.1 Conclusions8.2 Recommendations and Conditions for Loan Approval
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The report was prepared by Messrs. M. M. Msuya, Principal Agricultural Economist, MissionLeader, J. Helsen, Principal Agronomist, A. G. Khumbanyiwa, Senior Forestry Officer, and M.Basalirwa, Senior Financial Analyst all of OCAR.2, following a mission to Ghana duringNovember – December 2001. All questions relating to the report should be addressed to theauthors or Mr. S. Z. Moussa Division Manager, OCAR.2 (Extension 4162).
LIST OF TABLES AND ANNEXES
TABLE Page
3.1 NRMP Donor Funding Status ……………………………………………… 104.1 Summary of Project Costs by Component…………………………………. 244.2 Summary of Project Costs by Category of Expenditure……………………. 244.3 Sources of Finance………………………………………………………….. 254.4 Summary of Project Financing by Component and Financiers ……………. 254.5 Summary of Project Expenditure by Categories and by Sources of Finance.. 265.1 Expenditure Schedule by Component………………………………………. 285.2 Expenditure Schedule by Sources of Finance………………………………. 295.3 Summary of Procurement Arrangements…………………………………… 296.1 Summary of Recurrent Cost Financing …………………………………….. 34
LIST OF ANNEXES
ANNEX Number of Pages
1. Map of Project Area 12. Project Implementation Schedule 13. Provisional List of Goods and Services 14. Summary of Economic Analysis 15. Summary of Bank Group Operations in Ghana 1
Documents in Volume II of the Appraisal Report
1. Organisational Chart 12. Model Mixed Crop Farm Budget – With and Without Project 23. Summary of Financial Analysis 14. Detailed Project Cost Tables 85. Model of Tree Production Assumptions 16. Identified List of Potential Sustainable Livelihood Activities 17. Production and Marketing
AFRICAN DEVELOPMENT FUND01 BP V 1387, ABIDJAN 01, COTE D'IVOIRE
TEL: (225) 20 20 44 44FAX: (225) 20 20 44 90
PROJECT INFORMATION SHEET
1. COUNTRY : Republic of Ghana
2. TITLE OF PROJECT : Community Forestry Management Project.
3. LOCATION : Six degraded forest reserve sites in four regions,Ashanti, Brong Ahafo, Western and Eastern Regions.
4. BORROWER : The Republic of Ghana
5. EXECUTING AGENCY: Ministry of Land and Forestry (MoLF),P. O. Box M 212, Accra, Ghana, Tel: (233 21)665949/ 673520, Fax: (233 21) 666896
6. PROJECT DESCRIPTION: The project has four components: a) Integrated ForestManagement; b) Sustainable Livelihood Support Scheme; c) Capacity Building andInstitutional Strengthening; and d) Project Management Support.
7. TOTAL COST : UA 9.12 million
8. ADF LOAN : UA 7.00 million
9. OTHER SOURCES OF FINANCE:Government of Ghana : UA 1.69 millionBeneficiaries : UA 0.43 million
10. DATE OF APPROVAL : June 2002
11. PROBABLE COMMENCEMENT DATE AND PROJECT DURATIONCommencement : December 2002 and Duration : 6 Years
12. PROCUREMENT OF GOODS, WORKS AND SERVICESProcurement of goods works and services financed by the ADF resources will be inconformity with Bank Group Rules of Procedure. Procurement of: civil works, transportand mostly simple equipment and tools will be through National Competitive Bidding(NCB); specialised equipment through International Shopping; consultancy servicesthough competition on the basis of a short list; and training services, fellowships and fieldresearch through direct contracting.
13. CONSULTANCY SERVICES REQUIREDAbout 25 person months of consultancy services will be required for legal andcost/benefit sharing reviews on the Modified Taungya System, financial audit, and Mid-term and Ex-post evaluation studies of the project. In addition, a total of 18 personmonths of international technical assistance will be required for project co-ordinationsupport and curriculum development for the CRNR.
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CURRENCY AND MEASURES
Currency Equivalents (December 2001)
Currency Unit = Ghanaian Cedi (GHC)US$ 1= GHC 7000
UA 1 = GHC 9224.99UA 1 = US$ 1.27497
Fiscal Year
1 January - 31 December
Weights and Measures
1 t (Metric tonne) = 2,200 lbs (pounds)1 Kg (Kilogram) = 2.2 lbs1 M (Metre) = 3.28 ft (feet)1 Ha (Hectare) = 2.471 acres
ACRONYMS AND ABBREVIATIONS
ADB African Development BankADF African Development FundAgDB Agricultural Development BankCDF Community Development FundCFC Community Forestry CommitteeCFMP Community Forestry Management ProjectCRNR College of Renewable Natural ResourcesCSD Crop Services DirectorateDA District AssemblyDANIDA Danish International Development AgencyDFID Department for International DevelopmentEIA Environmental Impact AssessmentEIRR Economic Internal Rate of ReturnEPA Environmental Protection AgencyEU European UnionFAO Food and Agriculture Organisation of the United NationsFC Forestry CommissionFDMP Forest Development Master PlanFPDC Forestry Plantation Development CentreFPDF Forestry Plantation Development FundFSD Forest Services DivisionFSDP Forestry Sector Development ProjectFWP Forest and Wildlife PolicyGDP Gross Domestic ProductGEF Global Environment FacilityGoG Government of Ghana
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GPRS Ghana Poverty Reduction StrategyHFZ High Forest ZoneICB International Competitive BiddingIFAD International Fund for Agricultural DevelopmentJICA Japanese International Co-operation AgencyMIS Management Information SystemsM&E Monitoring and EvaluationMoFA Ministry of Food and AgricultureMoLF Ministry of Lands and ForestryMoF Ministry of FinanceMTEF Medium Term Expenditure FrameworkMTS Modified Taungya SystemNGO Non-Governmental OrganisationNPV Net Present ValueNRMP Natural Resources Management ProgrammeNTFP Non-Timber Forest ProductsPDP Plantation Development PlanPIC Project Implementation CommitteePIU Project Implementation UnitPMU Project Management UnitPPMED Policy Planning Monitoring and Evaluation DepartmentPRA Participatory Rural AppraisalRMSC Resource Management Support CentreRNE Royal Netherlands EmbassyTGA Tree Growers’ AssociationUA Unit of AccountUNDP United Nations Development Programme
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GHANA : BASIC DATA SHEETCOMPARATIVE SOCIO-ECONOMIC INDICATORS
Year Ghana Africa Developing DevelopedCountries Countries
Basic Indicators
Area ( '000 Km²) 239 30,061 80,976 54,658
Total Population (millions) 1998 19.2 748.0 4,718.9 1,182.2
Urban Population (% of Total) 1998 36.9 38.2 39.6 75.6
Population Density (per Km²) 1998 80.3 24.9 58.3 21.6
GNP per Capita (US $) 1998 390 687 1,250 25,890
Labor Force Participation - Total (%) 1998 47.0 43.7 … …
Labor Force Participation - Female (%) 1998 23.8 37.0 … …
Gender -Related Development Index Value 1997 0.5 0.5 0.6 0.9
Human Development Index (Rank among 174 countries) 1997 133 n.a. n.a. n.a.
Population Living Below $ 1 a Day (% of Population) 1989-94 ... 45.0 32.2 …
Demographic Indicators
Population Growth Rate - Total (%) 1998 2.7 2.4 1.6 0.3
Population Growth Rate - Urban (%) 1998 4.2 4.3 3.1 0.6
Population < 15 years (%) 1998 43.9 42.9 33.2 18.8
Population >= 65 years (%) 1998 3.0 3.2 19.7 26.7
Dependency Ratio (%) 1998 82.8 86.9 61.7 48.8
Sex Ratio (per 100 female) 1998 99.0 99.3 103.3 94.8
Female Population 15-49 years (millions) 1998 4.5 176.2 1,213.4 296.8
Life Expectancy at Birth - Total (years) 1998 61.2 52.7 64.0 75.4
Life Expectancy at Birth - Female (years) 1998 63.0 53.4 65.8 79.1
Crude Birth Rate (per 1,000) 1998 36.2 37.7 23.8 11.0
Crude Death Rate (per 1,000) 1998 8.8 13.7 8.4 10.3
Infant Mortality Rate (per 1,000) 1998 61.2 80.7 58.9 9.0
Child Mortality Rate (per 1,000) 1998 88.4 116.1 76.2 10.4
Maternal Mortality Rate (per 100,000) 1996 740 698 488 30
Total Fertility Rate (per woman) 1998 4.9 5.0 2.9 1.6
Women Using Contraception (%) 1995 28.0 … 56.0 70.0
Health & Nutrition Indicators
Physicians (per 100,000 people) 1990-96 4 23 76 253
Nurses (per 100,000 people) 1988-96 28 89 85 780
Births attended by Trained Health Personnel (%) 1983-88 40 … 54 99
Access to Safe Water (% of Population) 1990-97 56 55 72 100
Access to Health Services (% of Population) 1995 60 60 80 100
Access to Sanitation (% of Population) 1990-97 55 45 43 100
Percentage of Adults (aged 15-49) Living with HIV/AIDS 1997 2.4 5.7 … …
Incidence of Tuberculosis (per 100,000) 1995 222 201 157 24
Child Immunization Against Tuberculosis (%) 1996 72 77 88 93
Child Immunization Against Measles (%) 1996 59 63 79 90
Underweight Children (% of children under 5 years) 1990-97 27 26 31 …
Daily Calorie Supply 1996 2,598 2,406 2,650 3,222
Public Expenditure on Health (as % of GDP) 1995-97 1.6 1.4 1.8 6.3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 1991 75.1 79.5 100.0 103.0
Primary School - Female 1991 68.9 73.0 93.8 103.2
Secondary School - Total 1991 36.4 28.3 50.4 100.3
Secondary School - Female 1991 28.4 25.7 45.3 101.8
Primary School Female Teaching Staff (% of Total) 1991 35.2 45.0 51.0 82.0
Adult Illiteracy Rate – Total (%) 1997 33.6 43.5 28.2 1.3
Adult Illiteracy Rate – Male (%) 1997 23.5 33.0 19.6 1.0
Adult Illiteracy Rate – Female (%) 1997 43.5 51.6 35.8 1.5
Percentage of GDP Spent on Education 1995 ... 3.5 3.9 5.9
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 1996 12.5 5.9 9.9 11.6
Annual Rate of Deforestation (%) 1990-95 1.3 0.7 0.4 -0.2
Annual Rate of Reforestation (%) 1980-90 2.0 4.0 … …
Per Capita CO2 Emissions (metric tons) 1996 0.2 1.1 2.1 12.5
Source : Compiled by the Statistics Division from ADB databases; UNAIDS; World Bank Live Database and United Nations Population Division.
Notes: n.a. Not Applicable..... Data Not Available
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GHANACOMMUNITY FORESTRY MANAGEMENT PROJECT
Project MatrixHIERARCHY AND OBJECTIVES OBJECTIVELY VERIFIABLE INDICATORS (OVI) MEANS OF VERIFICATION ASSUMPTION & RISKS
A. SECTOR GOAL
Contribute to poverty reduction through inter alia, the conservation and sustainabledevelopment of forest resources for maintenance of environmental quality and the
perpetual flow of optimum benefits to all segments of the Ghanaian society.
Degraded forest reserves reforestedSustainability of forest resources improved
Environmental quality improvedOn- and off-reserve production of wood products increasedProduction of food and other agricultural products increased
Environmental SurveysSocio-economic and impact
surveys of participatingcommunities
B. PROJECT OBJECTIVE
Rehabilitation of degraded forest reserves while increasing production ofagricultural, wood and non-wood forestry products and strengthening the capacity
of relevant institutions.
Tree plantations on degraded forest reserve increased by 6,000 ha byPY 6
Production of small/building poles increased by 150,000 m3,telephone poles by 168,750 m3, transmission poles by 105,014, andcommercial quality timber by 135,208 m3 by end of tree plantation
rotation (Year 30)Equitable framework agreement for sharing costs and benefits fromforest plantation outputs agreed upon by all stakeholders by PY 1.
Agricultural production increase by 43% by PY 6Employment opportunities increased by at least 30,000
District Project ImplementationCommittee Monitoring Reports
CFC and FSD M&E ReportsProject quarterly and annualreports
Bank supervision mission reportsNFPC Project monitoring reports
1. Equitable Cost andBenefits
Sharing FrameworkAgreement concluded andsigned by FC and
beneficiary communities2. Effective controlagainst illegal logging in
natural forests.3. Good weatherconditions
C. OUTPUTS
1. Integrated Forest Management:
Support provided for tree nursery establishment and managementCommunity forestry plantation plans preparedForest plantations established on-reserve and agro-forestry plots developed off-
reserveBush fire prevention and management systems strengthened
6 Tree Growers’ Association nurseries assisted and 12 communitytree nurseries established60 community forestry plantation plans prepared
6,000 ha of tree plantations established on-reserve and 1,500 ha ofagro-forestry plots developed off-reserve1,200 ha of fire breaks established and community fire control teams
trained and equipped with fire fighting equipment
District Project Implementation
Committee Monitoring ReportsProject quarterly and annualimplementation reports
Bank supervision mission reportsNFPC Project monitoring reports
Tenure reforms concluded
and effectedCost-Benefit sharingagreement framework
concluded and effected
2. Sustainable livelihood Support Scheme
2.1 Sustainable livelihood survey undertaken and appropriate income generatingactivities identified2.2 Participating farmers supported to undertake non-timber forest products related
income generating activities2.3 Participating farmers supported to undertake agricultural production activities2.4 Participating farmers supported to undertake post-harvest produce storage and
marketing activities2.5 Feeder roads and field tracks rehabilitated
2.1.1 A list of suitable livelihood activities established by PY2
2.2.1 1,800 participating families undertake non-timber income
generating activities by PY62.3.1 4,800 supported to increasing agricultural productivity by PY62.3.1 3000 participating families engage in project supported
produce storage and project related produce marketing by PY62.5.1 75 km of feeder roads and 30 km of field tracks rehabilitatedand maintained annually.
District Project Implementation
Committee Monitoring ReportsProject quarterly and annualimplementation reports
Bank supervision mission reportsNFPC Project monitoring reports
Economic stability
continuesFree market policiesprevail0
3. Capacity Building and Institutional Strengthening3.1 FORIG capacity supported to produce and distribute quality tree seeds and to
provide quality control service
3.2 MoLF and MoFA staff trained social forestry, agro-forestry and MTS skills
3.3 Forest sector specialist trained at post graduate level
3.4 CRNR and FPDC capacities strengthened with technical assistance
3.5 Tenure and related policy reforms and dialogue related to MTS supported withconsultancy services
3.6 Project mid-term and ex-post evaluations reports prepared
3.7 Environmental mitigation assessment and management plans prepared
3.8 6 Tree nurseries establishment and management strengthened
3.1.1 National Tree Seed Centre Constructed, equipped and
operational3.1.2 Seed orchard, storage and distribution system established andoperational
3.2.1 40 MoLF and MoFA field staff receive training of trainerscourse in social forestry, agro-forestry and basic MTS skills3.3.1 2 FPDC staff members receive 12 months post graduate
training, one each in social forestry, and natural resource economics,and a 6 months course in Monitoring and Evaluation3.3.2 1 MoLF staff member receive 12 months postgraduate training,
in policy analysis3.3.3 6 FSD staff members receive 1 month course in tropicalforestry
3.4.1 6 months technical assistance given to CRNR for curriculumdevelopment3.4.2 12 months technical assistance given to FPDC for project
implementation monitoring3.5.1 18 person months of Legal consultancy services provided toFPDC to strengthen capacity for tenure reforms, cost/benefit sharing
and related policy reform dialogue3.6.1 Mid-term review Report prepared in PY3 and ex-postevaluation reports prepared by PY6
3.7.1 Environmental mitigation assessment report and managementplan prepared and submitted by PY 1 and PY2, respectively3.8.1 12 Community tree seedling nurseries established and 6 Tree
Growers Associations supported with equipment and watering points
District Project ImplementationCommittee Monitoring Reports
Project quarterly and annualimplementation reportsBank supervision mission reports
NFPC Project monitoring reports
Successful conclusion ofpolicy reforms
Successful implementationof GoG strategy for supplyof seedlings to beneficiaries
as GoG contribution incontext of cost/benefitsharing arrangement
4. Project Management and Co-ordination
FPDC capacity strengthened with staff training and equipment
2 specialised staff members sponsored for 12-months post graduate
training in social forestry and natural resource economics, and 1 for6-months training in monitoring and evaluationFPDC provided with logistical support
1. DPIC Monitoring Reports
2. Project quarterly and annualimplementation reports3. Supervision mission reports
1. Successful
implementation by GoG ofintegration of FPDC intoMoLF structure
ATIVITIES
Integrated Forest Management
Community Sensitisation campaigns, planning and organisational workshops,beneficiary training and advisory servicesFacilitate stakeholder training in preparation of plantation development plans
Equip MoLF & MoFA field staff with means of transport, support seedling nurseryestablishment
Sources of Resources
ADF UA 7.00 MillionGOG UA 1.69 MillionBENEFICIARIES UA 0.43 Million
UA 9.12 Million
1. Quarterly Progress Reports
2. ADB Supervision missionReports3. Project Audit Reports
1. Tenure reforms
concluded and successfullyeffected2. Cost/benefit sharing
arrangements concluded,signed and effected
Alternative Livelihood SchemeSupport for livelihood surveys, identification of business ventures, and beneficiarytraining in managing small enterprises
Facilitate beneficiary advisory services by NGOs on managing small enterprisesSupport consultations for sustainable livelihood policy and institutional framework
Component AmountIntegrated Forestry Management UA 4.03 MillionSustainable Livelihoods Scheme UA 2.69 Million
Capacity Building UA 1.81 MillionProject Management and Co-ordination UA 0.59 Million
Capacity Building and Institutional Strengthening
Facilitate social forestry training and training of trainers courses on essentialproject skills to MoFA and FSD field staffSupport to extension services to beneficiaries
Provide capacity building support to RMSC of FC, CRNR, MoLF and TreeGrowers AssociationsProject Management and Co-ordination
Technical assistance and equipment support to FPDC
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Executive Summary
Project Background: Forest resources of Ghana play a significant role in the livelihoodstrategies of the rural poor. In 1994 the Government of Ghana (GOG) adopted a new Forestryand Wildlife Policy. The new policy places more emphasis on conservation and sustainabledevelopment of forest and wildlife resources for maintenance of environmental quality. In 1999,the GOG prepared the Natural Resources Management Programme (NRMP) as a vehicle forimplementing the Forestry and Wildlife Master Plan. The objective of NRMP is to protect,rehabilitate and manage national land and forest to increase the income of rural communitieswho own these resources. The project will focus on small-scale plantation investors andinvolve the participation of communities living near degraded forest in the management offorest and the establishment of forest plantations through the Modified Taungya System.
Purpose of the Loan: The ADF loan of UA 7.00 million, amounting to 76.8 % of the totalproject cost estimated at UA 9.12 million, will be used to finance 100 % of foreign exchange(UA 1.99 million) or 48.51% of local cost (UA 4.11 million).
Sector Goal and project Objectives: The sector goal is to contribute to poverty reductionthrough sustainable development of forest resources for maintenance of environmental quality.The project objective is the rehabilitation of degraded forest reserves while increasingproduction of agricultural, wood and non-wood forestry products and strengthening thecapacity of relevant institutions.
Brief description of the project’s Outputs: The project has four components: (i) IntegratedForest Management, (ii) Sustainable Livelihood Support Scheme; (iii) Capacity Building; (iv)Project Management.
Project Cost: The total project cost is estimated at UA 9.12 million, of which the foreign costis UA 5.01 million (54.93%) and the local cost is UA 4.11 million (44.85%).
Source of Finance: The project will be financed by the African Development Fund, theGovernment of Ghana and the Beneficiaries.
Project implementation: The project will be implemented over a period of six years. TheMinistry of Lands and Forestry will be the Executing Agency. The day-to-day managementand co-ordination will be delegated to the Forestry Plantation Development Centre (FPDC).
Conclusions and Recommendations: The proposed project is in line with the Bank’s visionand strategy, and falls within the national poverty reduction strategy. It gives special focus onparticipatory approach and enhances ownership of the project by the communities byempowering the poor to gain higher incomes and sustainable livelihoods. When fullyimplemented, the project will benefit 6,000 farm families. Increased availability of land to thefarming communities will lead to increased employment and income generationopportunities. The project is financially and economically viable, technically feasible,socially desirable and environmentally sound.
It is, therefore, recommended that an ADF loan not exceeding UA 7.00 million be granted tothe government of Ghana for the purpose of implementing the project as described in thisreport subject to the conditions specified in the Loan Agreement.
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1. ORIGIN AND HISTORY OF THE PROJECT
1.1 Ghana's forest resources play a significant role in the livelihood strategies of the ruralpoor. The forests are important sources of fuel wood, poles, timber, hunting grounds, andnumerous non-timber forest products (NTFPs). However, the potential for the forestresources to contribute significantly to the socio-economic development of the country isconstrained by the dwindling resource base. It is estimated that Ghana’s forest resources arebeing depleted at the rate of 20,000 ha per year mainly as a result of mounting pressure onforest reserves brought about by increasing population and the resulting growth in thedemand for food, for other agricultural products, and for energy (fuel wood and charcoal) andother forest products. This is exacerbated by unsustainable harvesting practices for timberand other forest products. The result is that presently an estimated 500,000 ha of the forestreserves are so badly degraded that they have no potential to regenerate naturally as they areincreasingly susceptible to bush fires, further over-exploitation and soil erosion. If thissituation is left unchecked, it would spell a major loss to the country both in terms of incomefrom the lost forests but also in environmental, bio-diversity and ecological terms.
1.2 In its search for strategies to arrest the rate of deforestation and reverse the situation,the Government of Ghana (GoG) adopted in 1994 a new Forest Policy placing emphasis oncollaborative forestry management through the increased involvement of communities livingaround the forest reserves and other stakeholders. By making the farming communities andother stakeholders partners both in managing and in drawing benefits from the forestreserves, the farming communities would become committed to the conservation of thereserves. This is expected to enhance sustainability of the resources therein, as well asensuring the conservation of the environment for future generations. In addition, the policycontemplates the reform of institutions and deregulation with a view to creating an enablingenvironment for private sector investment in the forestry sector. In pursuit of its commitmentto reverse the degradation of forest resources, the GoG, in 1996 launched the Forestry andWildlife Master Plan for the period 1996-2020. The plan provides a framework for increasingthe area of forest and tree cover through afforestation, reforestation and agro-forestrydevelopment. It sets an annual target of 10,000 ha of plantations to be established over atwenty-year period.
1.3 In 1999, the GoG launched the Natural Resources Management Programme (NRMP),as a vehicle for implementing the Forestry and Wildlife Master Plan. The objectives of thisten-year programme are to protect, rehabilitate and sustainably manage national land, forestand wildlife resources and to sustainably increase the income of rural communities who ownthese resources. The programme has five components: a) High Forest ResourcesManagement; b) Savannah Resource Management; c) Wildlife Resources Management; d)Biodiversity Conservation; and e) Environmental Management Co-ordination. TheProgramme will be implemented in 3 phases: Phase 1 (2 years) concentrates on policy andlegislation reforms, and institutional strengthening; conditional on the success of the firstphase, Phase 2 (4 years) will focus on the implementation of collaborative natural resourcemanagement in areas selected along environmental, economic and social considerations; andPhase 3 (4 years) will expand coverage of collaborative resource nation-wide. NRMP is anadjustable programme initially estimated to cost US$ 90 million, of which the IDA wouldfinance US$ 30 million and GEF US$ 8.7 million. The remaining would come from theGovernment and parallel financing from other donors. The following donors already fundprojects at varying stages of implementation within NRMP’s forestry sub-sectors: the WorldBank, the Global Environmental Facility (GEF), the Department of International
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Development of the United Kingdom (DFID), the European Union (EU), the RoyalNetherlands Government, and Germany. The respective commitments add up to about UA45.68 million. The Japanese International Development Agency (JICA) has an on-gongoperation in forestry while the World Food Programme (WFP) and the Danish InternationalDevelopment Agency - DANIDA are preparing projects within the NRMP frameworkestimated at UA 3.38 million.
1.4 Following invitation by the Government of Ghana for ADF support in financing theproposed Community Forestry Management Project (CFMP) a Bank mission was fielded inAugust 2001 to prepare the project. Subsequently, an appraisal mission was undertaken inNovember 2001. This Appraisal Report is a result of previous studies, preparation missionand findings of the appraisal mission.
2. THE AGRICULTURE SECTOR
2.1 Salient Features
2.1.1 Agriculture is the most dominant sector in the Ghanaian economy. It comprises fourprincipal sub-sectors: a) crops, accounting for about 75% of agricultural GDP; b) forestryaccounting for 11%; c) livestock accounting for 7%; and d) fisheries accounting for 5% andthe rest 2%. Over the period 1995-2000 the contribution of the sector to GDP averaged 37%.In 2000 the sector employed about 65% of the active population and accounted for about44% of the country’s export earnings.
2.1.2 About 13.6 million ha (57%) of the country’s 23.8 million hectares of land is suitablefor agricultural production. Of this about 35% is under cultivation. Agricultural production isundertaken by about 2 million, predominantly - smallholder subsistence farmers who accountfor about 80% of food production in the country. Farm sizes are small, mostly around 1.2 hawith very few exceeding 2 ha. Only some of the industrial crops such as oil palm, rubber andpineapples are produced on large corporate estates.
2.1.3 The most important food crops include maize, cassava, plantain, yam, cocoyam,sorghum, millet and rice, which are mainly produced for home consumption. Vegetables,such as tomatoes, pepper, onion, okra, cabbages, and eggplants are planted, in principle, forhome consumption and near market centres for cash. Production levels vary from region toregion but reach on average: Yam: 6,000 kg/ha; Plantain: 7,000 kg/ha; Cassava: 9,000 kg/ha;Coco Yam: 4,000 kg/ha; Chilly pepper: 6,000 kg/ha; Tomatoes: 5,000 kg/ha; Okra: 5,000kg/ha. Mixed cropping is widespread and it attains its highest point in the “compound” farmsin the forest and savannah zones. Here, tree crops are an integral part of the farming system
2.2 Agricultural Development Strategy
2.2.1 The Government’s long-term objectives for the agricultural sector are to: (i) ensureadequate food supplies at a reasonable cost; (ii) reduce unemployment in rural areas; (iii)encourage balanced regional development (iv) increase the sector’s contribution to GDP; (v)increase foreign exchange earnings through greater production of traditional crops anddiversification into non-traditional crops; and (vi) improve linkage between agriculture andindustrial development.
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2.2.2 The Government has defined the following strategies for attaining the foregoingobjectives: (i) increased crop production through improved intensive farming practices aswell as expansion of land under cultivation on a sustainable basis; (ii) the development ofsmall-scale irrigation schemes; (iii) improved livestock sub-sector productivity; (iv)development of inland fisheries and (v) strengthening of agricultural support services. Thesestrategies are sound as they include the essential elements for boosting performance of thesector. However, because of the low levels of technologies currently used in mostsmallholder farms, which account for about 80% of the country’s agricultural production, therealisation of these strategies pose considerable challenge. To realise the strategies it will benecessary to mobilise the requisite resources and train farmers in improved technologies.
2.3 Agricultural Decentralisation
The Ministry of Food and Agriculture (MoFA) is mandated to formulate, plan, implement,co-ordinate, monitor and evaluate national agricultural programmes. In line with theGovernment decentralisation policy adopted in 1997, MoFA has been reorganised with aview to transferring functional powers, means and competences to the district level, which iscloser to the communities. Within this framework, at the national level, the Crop ServicesDirectorate (CSD), one of the nine departments of MoFA, provides technical services in cropproduction and agro-forestry development. At the regional level, the Regional Directors,being the most senior officers of MoFA, are supported by teams of Subject Matter Specialists(SMS) grouped at the regional centres. Each Region has a Training Co-ordination Unit,which co-ordinates training services using the Unified Agricultural Extension Agents(AEAs), who are in direct contact with farmers and farmer groups. The District Directors ofAgriculture head MoFA activities at District level. Ghana is divided into ten AdministrativeRegions and 110 Districts. At the district level decision-making regarding developmentpriorities takes place in District Assemblies of elected members, in consultation with MoFA,farmers and other stakeholders. As constituted, District Assemblies have four committees ofwhich the agricultural committee is one of the most important.
2.4 Land and Tree Tenure
2.4.1 Communal ownership is the main feature of land tenure in most of Ghana. Such landis controlled by lineage or clan based land-owning groups and allocated to individuals orhouseholds on a usufruct basis. Those without usufruct rights may also gain access to landthrough customary sharecropping agreements. Under this traditional system both men andwomen can access land as long as they are recognised members of the local communities.The national Land Policy published in 1999 stipulates that all traditional sources of landtenure and rights are recognised as legitimate sources of land titles and the law protects suchtenure rights. Leaseholds may be granted for a maximum duration of 49 years, renewable.The policy document provides a framework for access to land by all Ghanaian men andwomen, including internal migrants, as well as foreign potential investors, provided that: a)land is available, b) the individual agrees with land owners to adhere to covenants and othercustomary practices governing the disposal of the land, c) the individual agrees to put theland to a use that conforms to the land use plans for the area and to principles of sound landuse management.
2.4.2 Ghana is notable in that all forest and savannah woodland reserves are owned by thelocal communities and traditional authorities, and managed by the government in trust for thepeople. On customary land, where traditional trees are a feature of the farming system, trees
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are not always transferred together with the land. In principle, families within a given clanretain the right to trees, especially those with economic value, even when the right to the useof the land has changed hands. In other cases, however, clan families may agree with tenants,arrangements for revenue sharing for some of these trees. On reserve land, right to timbertrees is vested in the state President and in accordance with the Concession Act of 1962, thestate is empowered to manage and regulate the use of Vested Lands on behalf of thecommunities.
2.4.3 Currently, revenues accruing from natural forest resources are divided as follows:60% to the Forestry Commission, as a management fee and 10% to the Office of theAdministrator of Stool Lands. The remaining 30% is divided between the District Assembly(55% or 16.5% of the total revenue), Traditional Council (20% or 6% of total revenue) andthe Stools (25% or 7.5% of total revenue). Although communities benefit indirectly fromdevelopment investments made at the district level using revenue from royalties on land andforestry royalties, royalty shares do not generally trickle down directly to communities orcommunity members. Consequently, communities feel left out in sharing benefits fromroyalties arising from land that in principle belongs to them.
2.4.4 While both the traditional and conventional legal frameworks provide access to landby all section of society, the wide diversity of traditional tenure systems and ignorance of therelevant laws, policies and practices are sources of concern. For these reasons, it often takes along time to establish leaseholds causing delays in land and related development investments.There are also concerns over the fairness/equity in benefit sharing between variousstakeholders to land, forestry and related resources. Additionally, in most ethnic groups,access to land for women is indirect through their male relatives not direct. To address theissues of equitability of access to land regardless of gender, marital and migrant status andany other that may not have been adequately dealt with in the 1999 policy document, theGovernment has launched a programme of land policy reform. This programme involvesextensive consultations between Government, traditional leaders, and land owning and landusing communities.
2.4.5 To facilitate this process, the Government has established a Policy Review Committeethat will review existing policies and, drawing from the preliminary results of consultationswith various stakeholders, propose specific reforms aimed at improving efficiency,sustainability and equity in the management and sharing of the implied costs and benefitsfrom these resources. A team of experts appointed by the Committee has submitted itspreliminary findings recommending a net benefit share of 40% to participating farmers, 40% tothe Forest Commission, 15% to the landowners, and 5% to the communities. Concernedcommunities were consulted during the report process and they accepted the findings. Further,the report received a positive reaction from the Committee. The team is to finalise and submit itsreport to the Committee and the Minister of Lands and Forests by the end of May 2002.Following consideration of the report within MoLF, the Minister would by the third quarter,2002 table the Report recommendations for endorsement and instructions as to the requisitechanges in the relevant policies and procedures. In view of the utmost importance of thereformed policies and procedures, especially as regards equitable access to land and benefitsharing, to the success of the project, the Government will be required to undertake to continueand conclude these consultations and policy review and to submit to the Bank for review andcomment, the agreed tenure and cost-benefit sharing framework agreement that will be signedbetween the participating farmers, communities and the Forestry Commission.
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2.5 Poverty Status
2.5.1 According to the Second Medium Term Development Plan 2001-2005, povertyreduction is rated as the leading policy objective for the Ghana government. Over the lastdecade economic growth has been modest, averaging 4.4% per annum. Using an upperpoverty line of Cedis 900,000 (US$ 129) annual income, the proportion of poor Ghanaiansdecreased from 50.8% of the population in 1991-92 to 42.6% in 1998-99, a decline of 8.2%.While the proportion of the very poor, i.e. those with annual incomes of Cedis 700,000 (UA$100) or less also fell, the decline was only 6.3% from 35.7% to 29.4%. This implies thatalthough over the decade poverty declined for the population as a whole, for the very poor thedecline has been significantly less. Most (85%) of those described as poor live in rural areasand most (61%) earn their living producing agricultural crops. The greatest decline has beenin urban coastal areas (especially Accra) and forest zones.
2.5.2 The most vulnerable groups among the poor are women and children with continuinghigh levels of female illiteracy (64%), rural children malnutrition (28%) and infant mortality(57%). Because of the over-representation of women among the extremely poor, thisdeepening of poverty implies that there is a growing feminisation of poverty in the country.Another category of the poor is the ‘land poor’, those whose occupancy on the land isinsecure, or that are vulnerable to losing rights to land. It is now generally accepted that thepoor should be identified not as broad categories but as “segments/groups” such as men andwomen, disabled, children etc. and to clearly expose the unique constraints experienced byeach group.
2.6 Gender Issues
2.6.1 Women in Ghana are estimated to constitute 52% of the agricultural work force. Theyproduce 70% of subsistence crops make up 95% of the actors in the processing of agriculturalproducts, and 85% in food distribution. Women in rural areas in particular, lack access to andcontrol of such economic assets as land and credit. In addition, they have less access to socialcapital, including education and health, and the ability to participate effectively in decision-making and legal rights. These constraints, combined with time-consuming domestic duties,limit their economic empowerment. Women's access to land in much of Ghana depends onderivative rights, often through a male relative. In recent decades, as land has become scarcerand more valuable as a tradable commodity, rural women have found that rights to land theycustomarily assumed as secure are increasingly eroded.
2.6.2 Women may be dependent on common property resources and non-timber forestproducts to meet subsistence and economic needs while trees and tree crops tend to be seen asthe domain of men. As forest reserve land is, in principle, under Government control,participating women farmers should not face this discrimination. To ensure equity oftreatment in respect of access, security, and benefit sharing, the land tenure and benefitsharing arrangements now under review (see Paragraph 2.4.4 and 2.4.5) would ensureequitable benefit shares across the gender divide. In addition, decision-making both withinthe household and at community levels, attending meetings and performing public rituals arelargely male preserves, thus further weakening women's abilities to protect their rights.Recognising these constraints, the Ghana Poverty Reduction Strategy 2002-2004 documentadvocates the targeting of women participation. As a loan condition, GoG will undertake toensure that women, be they wives or heads of households, will be equitably represented in all
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decision making consultations and that women headed households will be treated equally inthe allocation of forest reserve lands.
2.7 HIV/AIDS Issues
2.7.1 The Ghana AIDS/STD Control Programme has drafted a national policy withobjectives that seeks to ensure a consistent programme of information and education aboutHIV/AIDS among the general population, especially the youth, leading to behaviouralchange. The programme aims at decreasing vulnerability to infection, reducing stigmatisationand discrimination, and minimising the socio-economic impact of the epidemic. Strategies ofMoFA HIV/AIDS monitoring unit include, development of a sectoral policy on HIV/AIDS,strengthening collaboration with relevant Ministries and Departments and with NGOs inundertaking advocacy activities, establishing HIV/AIDS focal points in all directorates, andincreasing the capacity of MoFA staff at Regional and District level to support ruralHIV/AIDS campaigns. In 1990, a system of HIV sentinel sero-surveillance was instituted bythe Ghana Ministry of Health to complement the passive AIDS surveillance. Since 1994 HIVprevalence in pregnant women has been recorded at 22 sites across the country. Staff fromboth the MoFA HIV/AIDS focal point and the relevant unit at the Ministry of Health will beinvolved in sensitisation campaigns in this project.
2.7.2 Compared to other countries in Africa, the current infection rate in Ghana reported as4.6% (GPRS January 2002), is relatively low. Females constitute 63% of the reported cases.The number of aids orphans is presently estimated to be 160,000. The high migrantpopulation and resistance to attitudinal change in spite of high awareness of the epidemicpoints to increasing prevalence rate over time. AIDS infection is closely associated withpoverty in that the most vulnerable section of the population is the most economically activeage group. Additionally the cost of taking care of the infected and of the orphans left byvictims lays a heavy burden, especially on poor households.
3. THE FORESTRY SUB-SECTOR
3.1 Natural Forest Resources
3.1.1 Forest resources of Ghana play a significant role in the livelihood strategies of therural poor. The forests are important sources of fuel wood, poles, timber, and numerous non-timber forest products (NTFPs). The most important NTFPs include wrapping leaves, chewsticks, medicinal plants, honey and game meat. Game meat is an important source of proteinin the project areas. In addition to the socio-economic importance, especially to the poorersections of the population, the country’s forests play an important environmental role bystabilizing climate and conservation of soil, water and bio-diversity.
3.1.2 Ghana comprises two broad ecological zones: the high forest and the savannah. Thehigh forest zone covers roughly one third of the country and supports two thirds of thepopulation. Most of the economic activities in the country (cocoa, oilpalm, rubber, timberand mining) are concentrated in this zone. At the turn of the century, the area of high forestwas 8.2 million ha, but this has been reduced to about 1.7 million ha today, of which 1.64million ha is within the 216 forest reserves gazetted in the 1930s. Since then, much of theoff-reserve forest has been clear-felled under a deliberate policy to open up farmland. It wasnot until 1994 that this policy was reversed and controls were put in place to ensuresustainable management of the remaining off-reserve forest resources. The estimated
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sustainable annual allowable cut (AAC) from the high forest has recently been reviewedupwards from 1.0 million m3 to 2.0 million m3 of round logs for the wood processingindustry, with half coming from forest reserves and half from scattered trees on farmland, off-reserve. The actual tree harvest is difficult to quantify accurately because of illegal felling butit is estimated to be twice the annual allowable cut, with detrimental effect on theenvironment.
3.1.3 The savannah zone covers the drier northern two thirds of the country, where the maineconomic activities are the production of annual crops (cereals, root crops and cotton) andlivestock. Woodlands cover about 9.4 million ha of the savannah zone, producing mainlywoodfuel and a small amount of building poles for local use. An estimated 70 percent ofGhana’s primary energy requirements come from fuelwood, and this comprises about 10.0million m3 of firewood and an additional 4.0 million m3 converted into charcoal for use inurban areas. Although current aggregate fuelwood supply exceeds demand, regional deficitsoccur especially in the Upper East, Volta and Brong-Ahafo regions.
3.1.4 The key natural resource management issues in Ghana today are land and forestdegradation and the loss of biodiversity associated with unsustainable harvesting levels, inthe high forest and in the savannah zones. The main underlying problems include (i) a forestroyalty system that does not price trees at their real economic value; (ii) ineffective sectoralinstitutions with overlapping responsibilities; (iii) insufficient involvement of communitieswho own the trees and woodlands in the management of the resource, coupled with negligibleeconomic returns when the resource is utilised; (iv) a relatively inefficient milling industrywith access to a dwindling but currently under-priced natural resource, and therefore notencouraged to invest in either new equipment or industrial wood plantations; and (v) weakinter-agency co-ordination in planning and monitoring natural resource use, particularly at theregional and district levels.
3.2 Plantation Forestry
3.2.1 Currently experience in commercial plantation forestry in the country is limited toplantations established by the Forestry Commission (FC), a few privately owned plantationsand some farm forests/woodlots owned by smallholder farmers. The FC has about 15,000 haof teak plantations, Subri Industrial Plantation project, financed by the Bank, has 4,000 ha ofGmelina plantations and another 5,000 ha of plantations are owned by private investors. Inaddition, about 2000 ha of farm forestry plantations/woodlots ranging in size from 0.4 ha to 2ha of teak and eucalyptus have been established by small-scale tree growers through out thecountry.
3.2.2 A system of inter-cropping food with tree crops during plantation establishment,known as the Taungya, was introduced in Ghana in the 1960s. Taungya was introduced inorder to solve problems of land shortage experienced by farmers living near forest reservesmainly in the High Forest Zone. The system enabled participating farmers to improve theirhousehold food security from increased yields achieved in producing food and other cropsfrom more fertile though degraded forest reserve lands. Some of the present plantationsowned by the Forest Commission were established using this system. The primary aim of thesystem was to improve the stocking of economic species in the High Forest Zone andestablish plantations for poles, firewood and sawn timber in denuded forest reserve areasreplacing the disappearing natural forests with a crop of fast growing tree species. When thesystem was first introduced, farmers were allowed to inter-crop food crops during the initial
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three years of forest plantation establishment. The Forest Department has been responsiblefor all plantation development activities, including demarcation, pegging, planting, bush firecontrol and harvesting, while farmers in taking care of their food crops would also be caringfor the young trees. The system was particularly attractive in areas of acute land shortage.
3.2.3 Although successful in the beginning, Taungya, had several flaws of which thefollowing were particularly important: (i) insecure tenure with access to forest land limited toa short period (about 3 years); (ii) no prospect for the farmers to obtain a direct share in therevenues from the tree outputs, especially timber harvesting, therefore farmers had no long-term stake in the plantations they helped establish; (iii) inequity in land allocation to theparticipating farmers; (iv) long distances between the forest reserves and community villages;and v) emergence of middlemen who exploited the landless and migrant farmers.Consequently, the Taungya System fell out of favour and was abandoned.
3.2.4 The government has come to recognise the potentials of a properly designed andmanaged Taungya System for small-scale plantation development in the High Forest Zone. Inthis regard, the government is in the process of modifying the system following a consultativeprocess with key stakeholders, including Traditional Chiefs and farmers. Major changes inthe proposed Modified Taungya System (MTS) include: (i) farmers will be responsible forthe establishment and maintenance of the tree crop, even after the tree canopy closes; (ii)farmers will share in the cost for establishment and become entitled to specified share ofbenefits, in accordance with an agreement signed between the Forestry Commission and eachinterested farming community; (iii) farmers will be given a new plot, as soon as intercroppingis no longer possible on the first plot due to canopy closure; (iv) criteria will be agreed uponfor equitable land allocation to the communities and within the communities and to individualfarmers; (v) the Government has embarked on a process of establishing a more permanentuser rights regime for land under the MTS. A framework agreement stipulating rights andresponsibilities of stakeholders, including cost and benefit sharing principles, is presentlybeing finalized and government during its preparation sensitised communities about theopportunities under the MTS. This will continue as it was generally favourably received.
3.3 The Timber Industry
3.3.1 On average, over the period 1995-99, Ghana’s forest sector is estimated to havecontributed 3% to the country’s annual GDP (1993 constant prices) and to have brought in anestimated US$ 172 million, equivalent to 10 % of export earnings. Forestry ranks third aftergold and cocoa in terms of contributing to export earnings. Over the period royalties andtaxes on forestry products accounted for an estimated 10% of total Government revenues. Inaddition, the sector provides direct employment to some 75,000 people and indirectly to anadditional 2 million. Apart from supplying timber to the domestic and export markets, thesector provides fuel-wood that meets an estimated 80% of the country’s energy requirements.
3.3.2 In order To sustain the wood based industry and contribute to the government’s policygoal of poverty reduction through sustainable economic growth the supply-demand gap forlog inputs into the domestic wood based industry, now estimated at 2.00 million m³, needs tobe bridged. Consequently, there is a growing interest in tree planting and plantationestablishment in the country. A number of sawmill owners are beginning to establish ownplantations to ensure future supplies of logs. At the same time the government has directedthat Timber Utilisation Contract (TUC) holders, i.e. holders of the official permit forinvestors to harvest and trade in timber, replant at least 10% of their concession areas. In
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addition, a number of tree grower and tree farmers associations have been established and arecurrently involved in managing commercial seedling nurseries and mobilization of theirmembership to establish more woodlots and forest plantations. Success in these initiativeswill help ensure that the bio-diversity of the country’s forests, now threatened by theoverexploitation of forests, will be preserved thereby avoiding unwanted negativeenvironmental impact.
3.4 Forestry Policy and Legislation
3.4.1 Forestry Policy: In 1994, a new Forest and Wildlife Policy was adopted with the aim ofconservation and sustainable development of forest and wildlife resources for maintenance ofenvironmental quality and the perpetual flow of optimum benefits to all segments of society.The Government’s natural resource policy is embodied in the Forestry and Wildlife Policyand the Forest Development Master Plan (1996-2000). This policy aims to: (i) ensure asustained and adequate supply of forest and woodland products; (ii) prevent furtherenvironmental degradation due to forest depletion and inappropriate farming practices; and(iii) stimulate community involvement in the management of the resources and enhance theeconomic well-being of rural communities.
3.4.2 In 1999, the GOG revised the Forestry Commission Act thereby empowering theForestry Commission to act as a corporate body to engage in commercial activities andinvestments in plantations. The FC’s role in plantations development include; a) to set criteriaand monitor plantations on reserve on behalf of the land owners; b) to manage existingplantations in a commercial and business oriented manner; c) to provide expert advice andextension services to farm forestry; d) to provide competitive services to the private forestryplantation sector; and e) to engage in new plantations development as an equity investor with aview to help kick-start and demonstrate best practice plantations.
3.4.3 Forestry Legislation: Forestry has been regulated on the basis of a Forest Ordinance,dating back to 1927. The ordinance provides for the establishment and management of forestreserves, regulation of concessions, property marks, Forest Improvement Fund, forest fires andspecific forest sector institutions. Legislation to conserve forests has included the direct banningof specific activities deemed to be harmful to the health of the industry. For instance, banning ofchainsaw operations in the early 1990s, the ban against the export of round logs in 1978, and the1999 ban against the use of chainsaws to convert logs into lumber and against the sale of chainsawn lumber. The Constitution of 1992 includes a chapter on Lands and Natural Resources,which comprises various provisions and establishes the principal institutions (LandsCommission and the Administrator of Stool Lands). The Constitution also sets out the manner inwhich Stool Land Revenues are to be shared among the Administrator of Stool Lands,traditional authorities and District Assemblies (see paragraph 2.3.2).
3.4.4 An equitable benefit sharing agreement between the Government and otherstakeholders, particularly, project beneficiaries is crucial to the success of the project. It willguarantee that incomes from the planted trees will accrue to the project beneficiaries,significantly improving their incomes and standards of living. In this regard, the Governmentof Ghana has embarked on a broad-based consultative process aimed at reforming theexisting natural resources policies, including those related to land and tree tenure and benefitsharing (refer paragraph 2.4.4).
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3.4.5 In the year 2000, a Forestry Plantation Development Fund (FPDF) was established.The Fund is to provide financial support towards meeting the costs of plantationestablishment and management, training as incentives to forestry plantation investors. TheFPDF Management Board has not yet been formed but once established, will set up thecriteria, guidelines and procedures for the disbursement and utilization of the Fund resources.The source of the Fund’s resources is a levy on air-dried timber exports. Currently the Fundhas a total of Cedis 53 billion (about US$7.5 million). As exporters are increasingly exportingkiln-dried timber, the inflows of resources into the FPDF will dwindle unless the Fund Boardfinds innovative ways to ensure the continued replenishment of its resources.
3.5 Interventions of Major Donors in the Sub-sector
3.5.1 The Government has since 1994 had as the objective of the sector, the sustainablemanagement of its natural resource endowment. It was in this context that a number of donoragencies have been involved in the forest sub-sector (see table below). During 1989-97 theWorld Bank supported the Forest Resource Management Project focusing on the sustainablemanagement of industrial plantations and the development of rural forestry in the savannahzone. Between 1985 and 1995, DFID supported a number of capacity building operations,including: (i) the Forestry Inventory Project that sought to assist the Forestry Departmentestablish sustainable harvest levels for half of the country’s forest reserves; (ii) ForestryInventory and Management Project seeking to improve management and to enhance thepublic awareness of social aspects of forestry; (iii) Forest Sector Development Project aimedat assisting the Forestry Department improve its efficiency and effectiveness and (iv) theForest Plantation Preparation Project which sought to enhance profitability of plantationcompanies and protect areas around high forests through bush fire control.
3.5.2 Support from the United Nations Development Programme (UNDP) has focused onenergy and agricultural projects seeking to promote the conservation of forests and inpromoting poverty reduction through participatory approaches. In 1993 the Government ofthe Federal Republic of Germany in collaboration with GoG launched the Forest Protectionand Resource Use Management Project (FORUM) with the objective of controlling forestdegradation and to rehabilitate selected forest reserves in the Volta region over the period1993-2008. The project is presently in its third phase extending from 2001-2005.
3.5.3 Implementation of Natural Resources Management Programme (NRMP) began inJune 1999 with the World Bank as the principal donor. As described in paragraphs 1.3 and1.4 and shown in the table below, various donor agencies have on-going operationssupporting the objectives of the NRMP.
Table 3.1: NRMP Donor Funding Status
Amount (million)Donor
Currency UA
World Bank
Global Environmental Facility
U.K. Department for International Development
European Union
Royal Netherlands Government
Germany
US$ 8.7
US$ 8.7
US$ 6.8
EU 4.8
EU 20.0
DM 25.0
7.01
7.01
5.48
3.34
13.93
8.91
Total 45.68
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3.6 Constraints and Potentials
3.6.1 Historically, the main cause of deforestation in the high forest zone has been thegrowing demand for agricultural land, more than the quest for timber or fuel wood. Theproductivity of land under shifting cultivation has been declining as a consequence of theshortening fallow period brought about by increasing population pressure. This has beenaggravated by the movement of cocoa farmers into forest areas of the Western Region toescape disease problems in the traditional cocoa growing areas. Land degradation associatedwith loss of vegetative cover and improper farming practices is an increasing problem in thecountry. In the high forest, where the problem is more evident, because of unsustainablelogging rate the commercial existence of several tree species is under severe threat. Specificconstraints to community forestry development and the plantation development programmein particular include; a) inadequate forest extension service; b) inadequate high quality seedand vegetative planting material; c) lack of capital; d) rampant bush fires; f) problems of landand tree tenure arrangements; g) lack of forestry plantation tradition; h) absence of anadequate policy framework for benefit sharing in plantation development.
3.6.2 Ghana also has considerable potential for forestry plantation development. These includefavourable ecological conditions for tree growing and the prevalence of political stability andsecurity. Private individuals have demonstrated readiness to invest in tree planting and theGovernment has a policy of actively encouraging private sector (large and small) involvement inforestry plantation development.
3.7 Institutions Related to Forestry
3.7.1 Government Inistitutions: The Ministry of Lands and Forestry (MoLF) hasresponsibility for policy, legislation formulation, and monitoring and evaluation. TheMinistry has a core team of technical staff and is responsible for the implementation of theNRMP. Although, the Monitoring and Evaluation (M&E) Unit of the Ministry is responsiblefor policy review and monitoring and evaluation of planned and on-going projects in theMinistry, it doesn’t have enough staff qualified in policy analysis and natural resourceeconomics.
3.7.2. The Forestry Commission (FC) is the executive arm of the Ministry of Lands andForestry responsible for setting criteria and monitoring plantation development on forestreserve lands. FC also provides subject matter expertise to plantation investors as well aslimited extension services. The FC has four divisions; i) Forestry Services Division (FSD); ii)Wildlife Division; iii) Forestry Products Inspection Division; and iv) Timber ExportInspection Division. The FSD is subdivided into five Departments: a) Resource ManagementSupport Centre (RMSC); b) Northern Savannah; c) High Forest Zone; d) Coastal Savannah;and e) College of Renewable Natural Resources (CRNR). The implementation structure forthe High Forest Zone (HFZ) involves the Regional Managers, District Managers, RangeSupervisors and Forest Guards. To date, the Forest Rangers and Forest Guards, FC’s groundlevel field operatives are trained as forestry police not as forestry extension personnel. Theexisting staff need to be retrained in forestry extension skills and the curriculum for thetraining of new entrants will have to be changed in line with the new orientation. TheForestry Commission is undergoing restructuring and reform with the support from DFID
3.7.3 The Forestry Plantation Development Centre (FPDC) has been established as a semi-autonomous agency under MoLF and mandated to plan, co-ordinate, advise and inform
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stakeholders, promote plantation development by small-, medium- and large-scale investors,and to seek funds for plantation development under the NRMP. FPDC has been established tofunction for a period of ten years and is currently financed by the Government and the WorldBank. The Centre was deliberately designed to have a minimum staffing of its own. This isbecause it was expected to call on the services of other specialised agencies of MoLF, theprivate sector and within the international donor community to perform specific tasks forwhich it was not equipped to handle. Currently the Centre is staffed by only two professionalForesters, an accountant, and a secretary. The staff operate from rented premises at the WoodIndustries Training Centre in Kumasi and have only one old and unreliable vehicle betweenthem. In spite of these resource constraints, the FPDC has satisfactorily performed itsprescribed functions. In order to ensure sustainability of FPDC’s operations, it iscontemplated that at the end of the current phase of World Bank’s NRMP support programme(June 2002) consideration will be given to the mainstreaming of the Centre into the existingstructure of MoLF.
3.7.4 The College of Renewable Natural Resources (CRNR) at Sunyani runs a three-yearForestry Diploma Programme. The College intake is open to general certificate of education(O-level students) after five years of secondary schooling as well as experienced ForestryGuards with requisite academic qualifications. While the College has adequate number ofTeaching Staff, it is in dire need of support in terms of teaching materials, laboratoryequipment and teaching nursery. In view of current forestry policy, there is need to reviewthe college curriculum with a view to adequately prepare the graduates for challenges incommunity forestry in general and community plantation development programmes inparticular. The college’s role in this will also include re-training of MoLF Range Supervisorsand Forest Guards in social forestry and MoFA Extension Agents in forestry skills. So far,JICA has pledged to support the College with teaching, nursery and laboratory equipment.
3.7.5 The Forestry Research Institute of Ghana (FORIG) is the only body undertakingresearch in the forestry sector. Most of the institute’s research programme is oriented totimber utilisation and, to a limited extent, in forestry management and plantationdevelopment. Consequently, FORIG has much experience and on-station scientificknowledge relevant to forest plantation development. FORIG also plays a major role in treeseed and seedling production. Because of resource limitations, FORIG has not been able toextend its research programme to encompass on-farm research that is client demand drivenand sensitive to realities on the ground. For the same reason, the institute has not developedthe capacity to produce tree seed and vegetative planting materials necessary to meet therequirements of plantation development initiatives envisaged in the country.
3.7.6 The Environmental Protection Agency (EPA) is responsible for nationalenvironmental policy formulation and co-ordination of activities relating to the environment.EPA’s role is to ensure that development plans take account of environmental concernsthrough Environmental Impact Assessments (EIA) and that there is regular monitoring ofenvironmental quality. The EPA also assists with the dissemination of public information andnon-formal education programs and, where necessary, law enforcement. Resources toundertake full-fledged EIAs and monitoring and evaluation are insufficient.
3.7.7 NGOs and Other Institutions Involved in Forestry: The National Union of TreeGrowers (NUTREEGA) is an umbrella body for tree growers associations in the country.There are however other tree grower groups that are also emerging separate fromNUTREEGA, such as the National Association of Tree Farmers Association of Ghana
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(NATFAG). Both NUTREEGA and NATFAG mobilise their membership to plant moretrees. In addition, both associations have local branches within the HFZ where they operateseedling nurseries as one of their income generating activities.
3.7.8 Care International has a 16,000 ha concession area in the Western Region (nearTakoradi) in which they are working with 600 farm families and individual farmers toestablish plantations. The organisation provides extension services in order to enhanceagricultural productivity among the beneficiaries. Care International has introduced someincome generating activities within the project area including bee keeping, snails, fishponds,mushrooms, and black pepper.
3.7.9 The Africa 2000 Network is one of the NGOs operating in the forestry sector. It issponsored by UNDP to provide support for community-based projects that preserve theenvironment while promoting sustainable human development. It provides technicalassistance and training in-group dynamics throughout the country. Africa 2000 has expertisein natural forest management, erosion control, range and watershed management, foodpreservation and storage, fish farming, livestock rearing and dairy farming, bee-keeping, aswell as in management and accounting. The NGO’s wealth of knowledge and experiencewould be invaluable in the course of implementing the proposed project. While itsheadquarters are located in Accra, it has branches in all the regions of the country. Itpossesses both the human and physical capacity required to implement the intended projectactivities. It has been in operation for over 15 years.
4. THE PROJECT
4.1 Project Concept and Rationale
4.1.1 The project has been conceived in the context of the country’s NRMP, which wasprepared by the Government to serve as a vehicle for implementing the ForestryDevelopment Master Plan. It is supported by about eight donors (paragraph 1.3).
4.1.2 The High Forest Zone in the country experiences an alarming rate of deforestationdue to encroachment from farming communities and unsustainable harvesting practices. Theproblem of deforestation is exacerbated by the occurrence of rampant bushfires and illegalchainsaw operators who supply an estimated 70% of the timber used in the country’s localindustry. Consequently, as noted earlier, more than 500,000 ha of forest reserves are nowdegraded to the extent that if these areas are left unattended they will turn into wastelandswith serious consequences on the eco-system and the economy as a whole.
4.1.3 To halt the process of degradation and restore sustainable natural resourcemanagement, the proposed project will introduce principles of collaborative forestrymanagement, which forms the basis of the country’s national forest policy (paragraph 3.4.1)adopted in 1994. The project approach of allowing smallholder farmers, living in the vicinityof the forest reserves to participate in collaborative forest management in which they gainaccess to relatively fertile land in the degraded forest reserves in which to plant trees andengage in food crop production is in line with the Ghana Poverty Reduction Strategy (GPRS)2002-2004. The GPRS emphasises this direct participation of fringe communities incollaborative forestry resource management as a means of enhancing beneficiary incomes,food security and poverty reduction.
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4.1.4 The Forestry Commission will be achieving its goal of natural resources managementthrough reduced costs of plantation establishment and maintenance. At the same time, thecosts to the Forestry Commission for the control of bush fire would also fall, as farmers willtake over a share of that responsibility. In addition, it is expected that the communities wouldreduce the incidence of illegal chainsaw operators through enhanced control of the forests.The plantations, when mature, will contribute to bridging the gap between demand andsupply of wood by domestic wood processing industries, thereby sustaining jobs in theindustry and saving foreign exchange for the country by reducing the need to import timber.
4.1.5 The project has been designed with the involvement of a cross section of stakeholders.The preparation and appraisal missions held meetings in the project areas with potentialparticipating communities and individual farmers both to gauge their concerns and interest inthe project as well as to obtain their views on operational modalities, especially on themodified taungya system and how women, in particular, would get equal access to theresources as their male counterparts. Bank missions held many consultations with localleaders, and government officials at district, regional and national levels to discuss issues ofproject design, relevant government policies and plans for the sector. In addition, themissions visited several private forest plantations and timber milling firms to learn from theirexperiences and gather their views on future prospects of the national and international woodindustries. These have been integrated into the project design.
4.1.6 The Government has invited the Bank to finance this project in order to contribute toresolving some constraints facing the forestry sector and that hamper the realisation of thepotential inherent in small-scale community forestry development initiatives in general andcommunity plantation development in particular. These constraints are outlined in paragraph2.6.1.
4.1.7 Lessons Learned From Similar Operations: The Bank’s experience inimplementing the Subri project and the experiences from other donor-funded projects havesignificantly influenced the design of the current project. The experience with the Subriproject has led to the conclusion that, because of the volatility of Government resources,large-scale forestry plantation investments are best left to the private sector. These lessonshave contributed to the decision that the present project should focus on plantationdevelopment by communities of smallholder private investors. Among the relevant lessons ofexperiences drawn from other donors’ operations in the sub-sector is the demonstration bythe German-funded FORUM Project in the Volta Region that tree plantation development bysmallholder private investors is financially viable. This project has shown that with very littleinput from the Government, mostly in the form of technical advice and promotionalcampaigns, smallholder tree plantation can become a major source of incomes and facilitatepoverty alleviation for poor farmers. The FORUM project also demonstrated financialadvantages of integrating tree planting with the production of intermediary inputs, especiallyseeds and seedlings. Under the FORUM project it has been shown that the production of treeseedlings becomes cheaper when undertaken by tree growers themselves as an incomegenerating activity than when produced in Government funded nurseries. Other advantages ofseedling production by tree farmers include lower transport costs, better seed germinationrates and survival rates for seedlings.
4.1.8 The diagnostic analysis of the agro-industrial study (see Paragraph 3.5.4) confirmedthe fact that the future of the forest industry is threatened by the on-going unsustainableharvesting of forestry products thus further strengthening the case for the current project. The
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feasibility and detailed design phase of the study noted that apart from the production ofwood products for the export market, there are viable investment opportunities for industrialdevelopment in the tertiary processing of logging residues into various products, includingfurniture, joinery, flooring, and for use in the construction industry. These findings furtherstrengthen the long-term viability of wood industry and of forestry plantation development.
4.2 Project Area and Beneficiaries
4.2.1 The proposed project will be located in the following four regions of the High Forestzone: Ashanti, Brong Ahafo, Eastern and Western Regions. The actual project sites are selectedon the basis of acute land shortage and hence the desire by farmers to gain access toproductive land for agricultural production, in the degraded forest reserves. The selected sitesare: Afram Headwaters and Asubima Forest Reserves in Ashanti Region; Yaya Forest Reservein Brong Ahafo Region; Worobong and Esuboni Forest Reserves in Eastern Region; and TanoSuraw Forest Reserve in Western Region.
4.2.2 Although the identified sites can be easily accessed during the dry season by fieldtracks, their accessibility becomes restricted during the main rain seasons, making it difficultto bring in farm inputs and evacuate farm outputs. The access between fields and nearestfeeder road or villages is mainly by footpaths, which cannot be used by vehicles, tractors ortrailers. There is need for support in this area to ensure year-round access to the project sites.
4.2.3 The project’s target beneficiaries are smallholder farmers – men, women and theirfamilies, many of whom are landowners, cultivating land, which has been assigned to themthrough traditional rulers. They also include migrant farmers who cultivate land undervarious sharecropping arrangements. Most of these farmers are involved in food cropproduction intended for home consumption. Their farming system is based on simpletechnologies and characterized by little use of productivity enhancing inputs. A total of 6,000farm families, of which an estimated 20% are female-headed are expected to participatedirectly in project activities, 3,000 families each on- and off reserve. These farmers, typically,undertake many of their activities in group, especially those related to harvesting, marketingand processing of marketable food crop surpluses. Most of such surpluses are disposed of atmarkets within the community. The project will facilitate/strengthen these groups. Wheregroups do not exist the project will encourage their formation in order to enable beneficiariesbenefit from, among other things, economies of scale in the procurement of inputs and inaccessing technical and other services. Other groups, which currently exist include the micro-credit groups from other projects operating within the project sites, Community ForestCommittees, Tree Seedling Associations, etc.
4.2.4 On each project site, 10 communities will participate in project activities. The criteriafor selecting these communities will include: i) communities experiencing acute landshortage, ii) community’s history of working successfully with collaborative forestmanagement schemes in partnership with the Forestry Commission, iii) communities whoseTraditional Leaders have demonstrated a readiness to enter into negotiations leading to theequitable sharing of the costs of and benefits accruing from forest reserves, iv) communityproximity to the selected forest reserves to farmers’ villages to minimise distances and traveltime to farmers’ assigned plots, and v) history of community organisations with goodgovernance and transparency. It is estimated that each community would comprise about 50farm families. It is noteworthy that already more than 20,000 farmers have expressed interestto participate in the tree planting programme. Selection of beneficiaries will be through a
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participatory and transparent process with deliberate efforts made to ensure that the process isall-inclusive, fair, and promotes the full participation of all interested farmers. The selectioncriteria will ensure that women will have equal opportunity to participate in project activitiesin their own rights, be they wives with participating husbands or heads of households. Theprocess will ensure that the proportion of participating women is not less than 20% of allbeneficiaries.
4.3 Strategic Context
4.3.1 The objective of Phase I of the National Resource Management Programme (NRMP)is to establish an effective national policy and institutional framework for sustainable naturalresource management and to develop and test collaborative resource management systems.Project activities in this phase, therefore, include finalizing policy reforms, undertakinginstitutional restructuring and strengthening and initiating baseline surveys and pilot projectsassociated with collaborative resource management. Phase I commenced in June 1999 andhas been extended to June 2002. Phase II will commence in July 2002 and will focus on theinitiation of projects in collaborative natural resource management. The proposedCommunity Forestry Management Project fits into Phase II of NRMP.
4.3.2 ADF financial support for the project has been requested in order to stop the rate ofdeforestation and ensure protection and conservation of the forestry resource base in asustainable way. The Government of Ghana has already launched a National PlantationDevelopment Programme with an annual planting target of 20,000 ha. The project willcontribute to this target by piloting the Modified Taungya System (MTS) as a viable modelfor smallholder forest plantation development and by supporting Government efforts inaddressing some of the key constraints to efficient forest plantation development in thecountry as highlighted in paragraph 3.6.1.
4.3.3 The project will support the production of high quality genetic forest plantingmaterial, support the retraining and equipping of an effective social forestry extension serviceand facilitate the creation of a conducive environment in which various stakeholdersconfidently play their roles in forest plantation development. The successful implementationof the project would arrest the on-going deforestation while at the same time enhancingincomes and reducing poverty among the participating farmers and other stakeholders thusenhancing the national and Bank strategic objectives of reducing poverty and enhancinghousehold food security. The project would also be contributing to Government’s need tobridge the gap between the supply and demand for wood to the domestic wood industry andto export markets for high quality timber and other wood products thus improving thesector’s contribution to national economic development.
4.4 Project Objective
The sector goal is to contribute to poverty reduction through inter alia, the conservation andsustainable development of forest resources for maintenance of environmental quality and theperpetual flow of optimum benefits to all segments of the Ghanaian society. The projectobjective is the rehabilitation of degraded forest reserves while increasing production ofagricultural, wood and non-wood forestry products and strengthening the capacity of relevantinstitutions.
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4.5 Project Description
4.5.1 The Community Forestry Management Project will have four components, namely: a)Integrated Forest Management; b) Sustainable Livelihood Scheme; c) Capacity Building andInstitutional Strengthening; and d) Project Management Support.
(A) Integrated Forest Management
4.5.2 This component has the following activities: conducting beneficiary awarenesscampaigns; organising project beneficiaries and field staff; supporting tree plantationdevelopment; conservation of bio-diversity, watershed catchment and ensuring sustainableforest production and rehabilitation; providing support to consultations on cost/benefitsharing agreements; supporting tree seedlings nurseries establishment; and supporting villagefire control volunteer teams.
4.5.3 The component seeks to create awareness of the project concept, organise thebeneficiaries and officials of various institutions that will be directly involved with treeplantation development. To this end, a total of 25 workshops will be organised by MoLF andMoFA staff at various levels. The purpose of these workshops is to sensitise decision-makers,community leaders and potential project beneficiaries on the project activities, and to consultthem on modalities of implementation and how they may participate and benefit from theproject. Community Forestry Committees (CFC’s) already exist in many areas in the projectzone and where they do not exist, they will be created and strengthened. Equitablerepresentation in these committees will be promoted across gender. CFC formation andstrengthening will be undertaken with the support of NGOs.
4.5.4 Forest reserves will be zoned into management areas for bio-diversity conservation,water catchment, sustainable forest production and rehabilitation. Among activities to beundertaken under forest production and rehabilitation, CFC’s will develop integrated forestresource management plans using Participatory Rapid Appraisal (PRA) tools. Thecommittees will be assisted in this respect by the RMSC of the Forestry Commission. Theplans will consist of physical demarcation of the degraded forest areas, forestry resourceinventories, rational management plans for various tree species and cropping systems,identification of necessary inputs, fire management plans, tree and food crop marketingopportunities, roles and responsibilities vis-à-vis plantation establishment, cost and revenuesharing agreements, procedures for collecting revenues, etc. To facilitate the development ofthe plantation plans, the project will train various stakeholders, including CFC officials,traditional Chiefs, as well as MoLF and MoFA staff involved in this activity. The project willfinance NGO services to assist in training activities.
4.5.5 On average each participating family will be allocated a total of 2 ha in two instalmentsof one ha each to carry out plantation development. The second plot would be allocated after thethird year when canopy in the initial plot would have closed making it uneconomic for farmersto continue growing agricultural crops. To the extent possible, the plots to be allocated perfarm family will be adjacent to each other in order to reduce the travel time and cost from oneplot to the next. Off-reserve plantation/woodlot establishment would be carried out on anaverage of 0.5 ha of beneficiaries' own land and would comprise mostly of agro-forestry andmulti-purpose tree species.
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4.5.6 A total of 18 nurseries will be involved in raising seedlings for the project. Six ofthese nurseries already exist managed by the Tree Growers Association. High quality foresttree seeds will be procured from FORIG, which will be supported under the project inestablishing a national tree seed centre. The seedlings raised will be purchased by theGovernment and provided to the participating communities as part of Governmentcontribution within the framework of the cost/benefit sharing agreement being negotiated andexpected to be signed between FC and beneficiary communities at the commencement of theproject implementation.
4.5.7 The project will contribute resources to facilitate the continuation of the on-goingconsultation process towards the finalisation of a framework agreement for cost/benefitsharing arrangements. Specifically, project funds will be set aside to fund tenure reformseminars, cost/benefit sharing workshops and related sensitisation campaigns as well asrequisite technical services to facilitate the tenure and cost/benefit sharing consultation andnegotiations between stakeholders.
4.5.8 The project will assist in strengthening Village Fire Control Volunteer Squads byorganising awareness campaigns and training. Other support activities will include promotionof the creation of green fire belts, provision of basis rudimentary fire fighting equipment andsupport for the establishment and undertaking of community fire patrols. This activity willcomplement and be closely co-ordinated with the Dutch funded Fire Prevention andManagement Project under NRMP.
4.5.9 To facilitate integrated forest management planning and agro-forestry activities, theproject will support the Forestry Services Department with 18 motorcycles for the RangeSupervisors and 40 bicycles for the Forest Guards. Motorcycles and bicycles will be providedon a self-owned basis. MoFA extension agents will be provided with 12 motorcycles, onsimilar terms to enable them provide technical advice to project beneficiaries especially inagro-forestry and inter-cropping techniques.
(B) Sustainable Livelihood Support Scheme
4.5.10 The project will support the implementation of a sustainable livelihood schemeseeking to raise the household incomes of project beneficiaries. For a start, the project wouldfinance a livelihood survey that would catalogue relevant activities for each community outof the identified general list of potential activities annexed in Volume 2. As grant resourcesare available from other donors (GEF and EU for instance), beneficiaries will be assisted toundertake income-generating activities supported by these grant resources. To enablebeneficiaries utilise grant resources provided by project co-financiers (paragraph 4.5.12) andto access credit resources from other projects operating in the project areas (paragraph4.5.14), the project will contract the services of suitably experienced NGO(s) to: trainbeneficiaries, and assisting them in preparing and managing investment proposals. Inaddition, during the initial two years of the inception of the Community Development Funds -- CDFs (paragraph 4.5.12), the contracted NGOs would provide management assistance forthe CDFs while training members of the communities, and MoLF and MoFA field personnelon how to manage the CDFs. After this period, beneficiaries would take over running of theCDFs with continued support from the MoLF and MoFA field staff. The ADF would financefield extension work by FSD and MoFA personnel involved in the livelihood survey and inrendering advice to beneficiaries on their income generating activities.
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4.5.11 To alleviate transportation problems experienced in the project areas especially duringrainy seasons (see paragraph 4.2.2), the project would fund the rehabilitation of 75 km offeeder roads linking project sites to the all season roads leading to the nearest market centres,and 30 km of in-field/in-reserve tracks and paths as well as provide for their annualmaintenance. Rehabilitation of the feeder roads will entail mostly filling in potholes, levellingby grading and putting gravel on roads damaged by rain after rainy seasons. Rehabilitation ofthe field tracks and paths will involve the widening, levelling and making side drains to makethem motorable. To ensure sustainability of the road infrastructure rehabilitated under theproject the Department of Feeder Roads in the Ministry of Roads and Transport will includethe roads and paths in the ministry’s annual maintenance programme funded from the RoadsFund.
4.5.12 Consultations with other donors operating in the project areas have indicatedwillingness to co-operate with the efforts contemplated under this component. The GlobalEnvironmental Facility (GEF) Small Grant Programme has committed US$ 300,000 toparallel finance income generating activities under this component. The exact manner inwhich the GEF funds would be administered would be determined in consultation involvingthe beneficiary groups thereby ensuring ownership, increasing commitment and ensuringsuccess of the activities. These modalities will broadly follow procedures agreed beforehandbetween GEF or other donors and the concerned District Assemblies. It is contemplated thatthese resources would be used to finance a CDF scheme whereby CDFs would be establishedin participating communities. The purpose of these funds would be to assist projectbeneficiaries acquire assets and start-up capital for carrying out sustainable livelihood/incomegenerating activities that would otherwise have been difficult to undertake given their levelsof poverty and inability to raise the requisite start-up capital. The funds would be used topurchase inputs that would be supplied to beneficiaries, in kind.
4.5.13 The GEF financing would facilitate support for income generating activities worthabout $100 per participating family per year. This support would be enough to purchase seedand fertiliser for the one ha average model mixed farm allocated at any one time perhousehold. The CDF would operate as a revolving fund with recipients reimbursing at theend of each planting season. Since most crops are harvested within 6 months and some (e.g.vegetables) only 3 months, every participating family would be able to access to the supportat least once a year so the total value of the support provided would be a multiple of the GEFgrant amount.
4.5.14 A number of other donor agencies also have grant resources, which are disbursedthrough NGOs and/or District Assemblies in support of development and poverty reductionactivities. The EU has a Micro Projects Programme operating in the project areas in supportof development initiatives proposed by the communities themselves. The EU has written toconfirm that their resources under the EU funded Micro Projects Programme would beavailable to fund initiatives proposed under this component as long as the requests arechannelled through and approved by the respective District Assemblies. When consulted bythe appraisal mission, some other donors expressed interest in joining the project furtherdown the line. Beneficiaries would be assisted and encouraged to access other sources ofsupport, including credit funds from such other donor aided programmes as the SocialDevelopment Fund (co-financed by the ADF), Emergency Social Relief Fund, PovertyReduction Fund and the Bank funded Line of Credit at the Agricultural Development Bank.Beneficiaries’ access to these resources is likely to be relatively easy after they have, using
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the support provided by this project, improved their income levels and acquired some assetsthat they can use as collateral.
(C) Capacity Building and Institutional Strengthening
4.5.15 The project will train staff of the Forest Services Department and MOFA to equipthem with requisite knowledge and skills on integrated forest management including bestpractice plantation development and agro-forestry. Issues related to HIV/AIDS and genderequity will be incorporated. Training courses will follow the principle of Training of Trainersand cover specific subjects such as principles and practices of community forestry, agro-forestry, processing and marketing, access to and management of credit, group dynamics,nursery establishment, tree species selection, silvi-cultural operations, bush fire control andmarketing of forest products. Extension services will be provided by FSD and MoFA staffwho will interact with relevant officials of District Assemblies, Traditional Chiefs; CFCs,Tree Growers Associations, Fire Control Squads and farmers. Apart from assistance in termsof motorcycles and bicycles (paragraph 4.5.9) support will also be provided for local andregional study tours and field visits. The project will also support publication of leaflets;plantation handbooks, guidelines on nursery establishment; and guidelines on silvi-cultureand agro-forestry activities.
4.5.16 The College of Renewable Natural Resources (CRNR) will be contracted to train FSDand MoFA staff in social forestry techniques. The Project will allocate resources to contract aCurriculum Development Expert for a period of one year to undertake sector-wide trainingneeds assessment, curriculum review and preparation of revised training modules andmaterial. Specific support will be provided for the procurement of training equipment andmaterials, library books and materials. Support to nursery establishment and variouslaboratory equipment and materials will be provided under a JICA support programme.
4.5.17 The technical wing of the FSD, the Resource Management Support Centre (RMSC) isresponsible for, collaborative forest management. In this respect it prepares IntegratedReserve Management Plans, including Plantation Development Plans and sustainablelivelihood plans. The project will support the RMSC by providing inventory, mapping andsurvey equipment, and short-term training in community forestry and participatorymonitoring and evaluation.
4.5.18 The Project will support the establishment of a National Tree Seed Centre (NTSC) toprovide high quality seed and planting material for exotic and indigenous tree species. TheNTSC will be established at and managed by FORIG. Ultimately, the centre will operate asan independent commercial entity. Project support for the NTSC will include (i) associatedcivil works; ii) provision of requisite equipment, including one FWD pickup; and (iii)implementation of tree surveys, orchard inventory, establishment of seed orchards, seedcollection, processing, storage and distribution; and iv) provision of quality control servicesfor seedling producers. Distribution of the NTSC produced tree seeds, and carrying outquality control and performance monitoring of the seed will call for extensive travel byNTSC scientists and technicians. As the seed centre will be newly established, it will have novehicle of its own, hence the provision of the pickup.
4.5.19 At least six Tree Growers Associations and 12 community nurseries will be supportedto establish and/or strengthen their capacities for tree seedling nursery management in orderto produce about 9 million seedlings for the establishment of the 7,500 ha under the project.
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Specifically, the project will provide support to kick-start nursery establishment as well assupport for nursery maintenance. Various equipment, tools and provision for watering pointswill be provided. The project will also support various training courses on nurseryestablishment and management.
4.5.20 Provision will be made for short-term consultants to assist the Government in the on-going policy dialogue regarding the legal framework for the Modified Taungya System,concerning tree and land tenure and revenue sharing framework agreements. The project willalso support the implementation of a number of studies covering options for developmentunder the Taungya System, marketing possibilities for non-timber products (cane rats,mushrooms, honey, livestock etc). Resources will also be made available for a mid-termreview and a final project evaluation. Furthermore, the project will support specialised out-ofcountry study tours. Finally a number of short courses will be organised to sharpen projectstaff in aspects of plantation silviculture, monitoring and evaluation among others.
(D) Project Management
4.5.21 The Forest Plantation Development Centre (FPDC) will be responsible for the co-ordination on a daily basis, of project activities as well as to provide managerial support forother Government and donor-supported plantation development initiatives. The existingcapacity and functions of FPDC are outlined in paragraph 3.7.3. To enable it cope with theadded responsibilities under the project, the project will fund 12 months postgraduate trainingfor a Social Forester, Natural Resources Economist, and a Monitoring and Evaluation Expert.While the experts are under training, the project will fund a 12-person month technicalassistance by a Social Forestry Expert with experience in Monitoring and Evaluation. Tofacilitate project supervision and monitoring, the project will support the centre withcomputer/office equipment and will finance field visits and project monitoring expenses ofthe project management team and the cost of operation and maintenance expenses ofequipment provided under project financing. To facilitate supervision and monitoring of theproject the Government will supply one 4-wheal drive double cabin pick-up and meet the costof operation and maintenance of the vehicle.
4.6 Production, Markets and Prices
4.6.1 The annual allowable cut has been set at 2 million m3. This, when compared to theinstalled wood-based industries’ capacity of about 5.2 million m3, leaves an annual deficit of3.2 million m3. Consequently, the projected output of 135,208 m3, of marketable timber, and0.43 million m3 of poles would be easily absorbed by the industry.
4.6.2 The proposed project would begin to produce marketable output with the firstthinning beginning in PY6 to year 13 and end with the harvesting of timber beginning the26th year and ending the 30th year from planting. On the basis of yields and other productionassumptions detailed in Annex 5 of Volume 2 (the Implementation Document), the project asa whole would result in the production of the following products: small/building poles150,000 m3, telephone poles 168,750 m3, transmission poles 105,014 m3, processed timber135,208 m3 (of which teak 80,880 m3, cedrella 8,578 m3 and other commercial species45,750 m3), and fuel wood 99,670 m3.
4.6.3 The most important NTFPs include canes, wrapping leaves (special types of leavesused for wrapping certain foods for steam cooking and preservation), chew sticks, plant
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medicines and game meat mostly from small wild animals such as grass cutters (agouti),hares, porcupines, etc. Men are particularly involved in the harvesting of most of theseproducts and in weaving baskets and furniture from canes while women dominate the trade,especially of wrapping leaves and game meat. Some other products, including mushroom andhoney production are gaining importance as sources of rural income in the project area.While there is no reliable data on the size of production and trade in NTFPs, there is littledoubt that the production, processing and marketing of these products constitute a majorsource of income for the communities in the project area, especially during off season andother periods of economic hardship. The project will encourage these activities as one of thesustainable livelihood activities by providing business development advisory service andother forms of capacity building in order to enable beneficiaries improve their output andbenefits from these activities.
4.6.4 A typical smallholder farmer in the project area would inter-crop maize, yam, cocoayam, cassava, plantain, groundnuts and bananas and such vegetables as chillies, okra andtomatoes. It is expected that farmers who participate in the project will continue to practicemixed farming inter-planting these crops with plantation trees most of the time off-reserve andduring the initial three years of tree plantation establishment on-reserve. The national productionof the principal staples, among these crops, are about 1 million tons for maize, 2.2 million tonsof yams, 1.8 million tons of plantain and 7.1 million tons of cassava. The projected annualproduction from the project for these staples of 11,250 tons of maize, 33,750 tons of yams,24,750 tons of plantain and 15,000 tons of cassava. Most of this output will be for subsistenceconsumption. However, any marketable surplus should not present a major problem inmarketing especially since the project is providing support for produce storage and marketing.(Further details are provided in Volume II).
4.6.5 Farm gate prices for some of the food crops include: Maize: Cedis 167,719/100 kgbag; Yams: Cedis 343,830/100 tubers; Cassava: Cedis 51,034/91 kg bag; Plantain: Cedis17,617/12 kg bunch; Bananas: Cedis 4,822/7kg bunch; Tomatoes: Cedis 91,164/52 kg crate;dried pepper: Cedis 147,527/16 kg bag; Groundnuts: Cedis 279,687/82 kg bag; Cowpeas:Cedis 241,688/109 kg bag. It is worth noting that between the end of one harvest to anotherproduce prices may vary by up to three fold. Consequently, farmers by investing in producestorage may increase the prices significantly.
4.7 Environmental Impact
4.7.1 The project has been classified as category II, indicating that it has limited negativeimpacts, which can be mitigated by incorporating specific measures in the design. Overall,the project’s environmental impacts are expected to be positive. The project will contributetowards decreasing deforestation by providing an alternative source of raw material to thewood based industry. The additional tree cover provided by the project plantations will helpalleviate pressure on local vegetation, increase soil fertility (by improving moisture retention,soil structure and nutrient content), and mitigating the effects of drought and desertification inthe region. Specifically, the envisaged positive impacts will include: a) reduced pressure onnatural forests; b) enhanced supply of logs from forest plantations; c) rehabilitation ofdegraded forest reserve lands; d) enhanced fire management and control; e) improved foodsecurity through the adoption of MTS; f) protection of water courses and otherenvironmentally fragile areas; g) improved community participation and involvement in theproject; h) protection of water courses and other environmentally fragile areas; and i) bio-diversity conservation.
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4.7.2 The inter-cropping of trees with agricultural crops during the initial years of plantationdevelopment would attenuate the negative impacts usually associated with mono-culturalplantation development. However, these negative impacts would be felt in later years when theagricultural crops would be withdrawn according to the MTS design. Potential negative impactswould include reduced availability of non-timber forest products, loss of habitat and subsequentdecrease in bio-diversity, increased potential for massive loss by pests or pathogens (throughsimplification of the natural ecosystem and absence of natural control) especially in the case ofintroduced exotic species. Localised soil erosion and loss of fertility due to chemical andbiological changes in the soil structure (as litter becomes dominated by one species, therebyaltering the decomposition process) can occur. A build-up of organic matter under the plantationcan pose fire hazard especially in teak plantations and reduce water infiltration. The performanceof the introduced exotic species in the new environment could be unpredictable, due tounsuitable site conditions or attacks of pests and diseases to which the exotic species have littleor no tolerance. Finally, there is concern about the possibility of labour and good landsespecially off-reserve being taken away from food crop production.
4.7.3 The Project will collaborate closely with the Environmental Protection Agency (EPA),which is represented in the project Steering committee, to ensure that mitigation measures areincorporated in project design and effectively implemented. Technical support and trainingthroughout the process is important and will include nursery operations, plantation siting andmanagement techniques (thinning, regeneration, fire management, etc), pests and diseaseprevention, safety of pesticide use, and prevention of environmental contamination byagrochemical residues. The Executing Agency will ensure that the environmental mitigationmeasures are implemented, and mechanisms put in place to monitor the long-term ecologicalviability of the plantation development operations. (Further details are in Annex 4 of Volume II).
4.7.4 Environmental and Social Management Plan: To ensure environmental integrity,the EPA will prepare a full environmental and social management plan (ESMP) at thebeginning of the project. This will be a loan condition. A budgetary allocation of UA 46,300has been made for environmental monitoring and management.
4.7.5 HIV/AIDS Sensitisation: To contribute to the country’s efforts to combat the spread ofHIV/AIDS the project set out funds (UA 0.1 million) to finance anti-AIDS campaigns andsensitisation carried out with the collaboration of the relevant unit of the Ministry of Health andthe MoFA Focal Point on AIDS monitoring. This will involve both field level campaigns andincorporation of anti-HIV/AIDS messages in all the carricula, courses and workshops for projectbeneficiaries and staff.
4.8 Project Costs
4.8.1 The total project cost, excluding taxes and duties but including physical and pricecontingencies is estimated to be Cedi 84.10 billion (UA 9.12 million at December 2001exchange rates). Of this, the foreign exchange costs are estimated to be UA 5.01 million or54.93% and local costs to be UA 4.11 million or 45.07%. The estimated costs for the projectcomponents and for various expenditure categories are given below in Tables 4.1 and 4.2.
4.8.2 The project costs are estimated at the December 2001 exchange rates and prices inGhana. Prices of imported goods were obtained in Cedis and converted to UA. Costs of civilworks are based on estimated costs of comparable on-going works. A physical contingency rateof 10% has been applied to the cost of civil works and goods. A price contingency rate of 2.5%,
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Table 4.1: Summary of Project Costs by Components
(Cedis '000) (UA '000) % Foreign
Components Local Foreign Total Local Foreign Total Exchange
Plantation Development 16,782,531 12,069,825 28,852,355 1,819.25 1,308.38 3,127.63 42
Livelihood Support Scheme 4,935,416 15,718,414 20,653,830 535.01 1,703.90 2,238.90 76
Cap. Bld'g & Insti. Streng. 3,829,319 11,064,206 14,893,525 415.10 1,199.37 1,614.48 74
Project Management 2,237,799 2,016,237 4,254,036 242.58 218.56 461.14 47
Total BASELINE COSTS 27,785,065 40,868,682 68,653,746 3,011.93 4,430.21 7,442.15 60
Physical Contingencies 1,998,607 3,119,016 5,117,623 216.65 338.11 554.76 61
Price Contingencies 8,120,660 2,205,912 10,326,572 880.29 239.12 1,119.41 21
Total PROJECT COSTS 37,904,331 46,193,610 84,097,941 4,108.88 5,007.44 9,116.32 55
the current international index of traded goods, has been applied for foreign goods while a rateof 9% has been applied to locally sourced goods in the light of the projected local inflation rateover the project implementation period.
Table 4.2: Summary of Project Costs by Category of Expenditure
(Cedis '000) (UA '000) %
Cost Categories Local Foreign Total Local Foreign Total Foreign
I. Investment Costs
A. Works
1. Civil Works 3,110,667 12,442,667 15,553,333 337.20 1,348.80 1,686.00 80
B. Goods
1. Vehicles & Equipment 280,327 5,326,216 5,606,543 30.39 577.37 607.76 95
C. Services1. Train., W/shops S. Tours 670,443 1,711,966 2,382,409 72.68 185.58 258.26 72
2. TA & Fellowships - 1,983,373 1,983,373 - 215.00 215.00 100
3. Consult & NGO Services 985,672 2,299,901 3,285,572 106.85 249.31 356.16 70
4. Plant. Developm. Support 12,238,695 11,893,178 24,131,873 1,326.69 1,289.23 2,615.92 49
5. Livelih. Projects Support 1,604,041 3,742,763 5,346,804 173.88 405.72 579.60 70
6. Field/Applied Research 367,155 1,468,618 1,835,773 39.80 159.20 199.00 80
Total Investment Costs 19,256,999 40,868,682 60,125,680 2,087.48 4,430.21 6,517.70 68
II. Operating Expenses
1. Travel and Allowances 920,447 - 920,447 99.78 - 99.78 -
2. Oper. & Maintenance 6,876,077 - 6,876,077 745.38 - 745.38 -
3. Other Operat. Charges 731,542 - 731,542 79.30 - 79.30 -
Total Recurrent Costs 8,528,066 - 8,528,066 924.45 - 924.45 -
Total BASE COSTS 27,785,065 40,868,682 68,653,746 3,011.93 4,430.21 7,442.15 60
Physical Contingencies 1,998,607 3,119,016 5,117,623 216.65 338.11 554.76 61
Price Contingencies 8,120,660 2,205,912 10,326,572 880.29 239.12 1,119.41 21
Total PROJECT COSTS 37,904,331 46,193,610 84,097,941 4,108.88 5,007.44 9,116.32 55
4.9 Sources of Financing and Expenditure Schedule
4.9.1 The project will be financed with a loan from the ADF and contributions from theGovernment of Ghana, and from project beneficiaries. As shown in Table 4.3 below ADFfinancing is estimated to be UA 7 million, representing 76.79% of total project cost. TheADF contribution will finance 100% of foreign exchange costs and UA 1.99 million or
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48.51% of local costs. ADF funding of local costs will include the cost of civil works, andconsultancy and NGO services for supporting beneficiaries’ sustainable livelihood/incomegenerating activities (including provision of watering points for tree seedling nurseries),applied research, for capacity building (including staff and beneficiary training andsensitisation). The contribution from the Government is estimated at UA 1.69 million or18.49% of project costs. This contribution will cover the part of the travel expenses of staffinvolved in project implementation, and operation and maintenance of vehicles, motorcycles,and bicycles and of equipment as well as general operating costs of the project co-ordinationoffice. Project beneficiaries will contribute labour for, among other things, clearing the landand taking care of tree nurseries, cutting and transporting pegs, pegging, planting and tendingtrees, planting and maintaining evergreen fire breaks around forest reserves, and constructionof produce storage facilities. Beneficiaries’ contribution is estimated at UA 0.43 million or4.72% of total project cost.
Table 4.3: Sources of Finance (UA million)
Source Foreign Exchange Local Costs Total Cost % of Total Cost
ADF 5,007.44 1,993.04 7,000.48 76.8
Government - 1,685.78 1,685.78 18.5
Beneficiaries - 430.06 430.06 4.7
TOTAL 5,007.44 4,108.88 9,116.32 100.0
Table 4.4: Summary of Project Financing by Components and Financiers (UA ‘000)
Financier Total Cost % of Cost by
Components GoG ADF Beneficiaries Components
Integrated Forest Management 1,241.75 2,358.18 430.06 4,029.99 44.2
Sustainable Livelihood Support Scheme 60.97 2,630.05 - 2,691.02 29.5
Cap. Build’g & Institutional Strengthening 110.96 1,699.45 - 1,810.41 19.9
Project Management 272.10 312.80 - 584.90 6.4
Total Disbursement 1,685.78 7,000.48 430.06 9,116.32 100.0
4.9.2 Justification for local cost financing by ADF: The project has a relatively high localcost content estimated at UA 4.10 million, about 21.86% of the total project cost and 48.51%of all local costs. This is because the project involves mainly, capacity building forbeneficiaries and national staff, support to sustainable livelihood activities for beneficiaries,support to forestry plantation development research, and tree planting by smallholder farmersmost of which us a large proportion of local materials and personnel. The country isstruggling out of a serious economic crisis characterised by falling prices and stagnant andeven falling production levels of several of its principal export commodities – timber andeven gold, traditionally principal sources of export duties. These commodity trends haveconstrained the capacity of GoG to raise revenue. In fact the country’s fiscal deficit increasedfrom about 6.5% of GDP in 1999 to 8.5% during 2000. Additionally, the Government hassince the 1980s been pursuing a rigorous programme of economic reforms that require it torefrain from heavy domestic borrowing to finance its development budget. It is thereforenecessary that to support project implementation ADF take up some of the local project costs.
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4.9.3 As part of its on-going economic reform programme, the Government is taking anumber of measures to improve its capacity for revenue collection and fiscal management.These efforts would ensure that operating expenses of the project would be met beyond the
Table 4.5: Summary Expenditure by Categories and by Sources of Finance (UA ‘000)
Categories of ADF GoG Benef
Expenditure Local Foreign Total Local Foreign Total Local Foreign Total
I. Investment Costs
A. Works
1. Civil Works 163.561 1,348.800 1,512.361 - - - - - -
B. Goods
1. Vehicles & Equip 14.740 577.368 592.108 37.033 - 37.033 - - -
C. Services
1. Training 35.252 185.579 220.832 - - - - - -
2. TA & Fellowships - 215.000 215.000 - - - - - -
3. Consult & NGOs 51.827 249.312 301.139 - - - - - -
4. Plantat Develop 643.520 1,289.235 1,932.755 819.413 - 819.413 218.488 - 218.488
5. Livelih Projects 84.342 405.720 490.062 - - - - - -
6. Research 19.305 159.200 178.505 - - - - - -
II. Operat Expenses 448.412 - 448.412 379.282 - 379.282 96.759 - 96.759
Total BASE COSTS 1,460.960 4,430.214 5,891.174 1,235.728 - 1,235.728 315.247 - 315.247
Phy Contingencies 105.088 338.105 443.193 88.887 - 88.887 22.676 - 22.676
Pri Contingencies 426.990 239.123 666.114 361.163 - 361.163 92.136 - 92.136
Total Project Ccost 1,993.038 5,007.443 7,000.481 1,685.80 - 1,685.80 430.059 - 430.059
project’s financing phase. GoG has created the Central Revenue Board with a view toimproving the administration of the tax system. In addition, the Government has introducedmeasures seeking to tighten both revenue collection procedures and auditing to ensureefficiency in the utilisation of Government revenues. To increase the sources of Governmentrevenues, the Government has re-introduced the Value Added Tax. To better streamline theutilisation of Government revenues, the Government has introduced the Medium TermExpenditure Framework (MTEF) that seeks to stabilise Government development andrecurrent expenditure by setting three-year rolling budgets within pre-established budgetaryceilings. Consequently, a project, once approved has at any point in time a three-yearbudgetary allocation.
5. PROJECT IMPLEMENTATION
5.1 Executing Agency
The Ministry of Lands and Forestry (MoLF) will have overall responsibility for seeing to theimplementation of the project and will serve as the Executing Agency. The day-to-daymanagement and co-ordination of the project will be delegated to the Forest PlantationDevelopment Centre (see Paragraph 4.5.21 and 3.7.3).
5.2 Institutional Arrangements
5.2.1 As the agency responsible for the day to day management of project activities, theFPDC will prepare annual work plans and budgets, manage the finances of the NRMP,handle procurement of goods and services, co-ordinate NRMP activities, as well as supervise,monitor and continuously evaluate and report on project activities. At field level, the FPDC
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will work through the FSD in collaboration with MOFA Agricultural Extension Agents,CFCs, Stools, and the District Assembly's PIC’s. As explained in paragraph 3.7.3 FPDC hashitherto performed well in monitoring the implementation of the NRMP. With the capacitystrengthening contemplated under the project (see paragraph 4.5.21) the centre would be ableto perform its responsibilities under this project.
5.2.2 To ensure sustainability, existing institutions will be used, to the extent possible, forthe monitoring and co-ordination of project activities. The existing Programme SteeringCommittee (PSC) of the MoLF will, therefore, serve as the Steering Committee for theproject. The committee, chaired by the Deputy Minister (Forestry) will provide policyguidance, review project progress and approve annual budgets. Other members of the PSCwill include: Director, PPMED (MLF); Technical Director (Forestry); Chief Executive FC;Director of Crop Services, MOFA; Director of Women in Agriculture Development(MOFA); Director Rural Development of the Ministry of Local Government and RuralDevelopment; Executive Director of the Environmental Protection Agency; onerepresentative of the Ministry of Finance; Director FORIG; one Traditional Ruler; tworepresentatives of participating farmers (one male and one female); two representatives ofTree Nurseries Associations; two NGO representatives; representative of the National TreeGrowers’ Association; and one representative of Commercial Large-Scale PlantationInvestors. In addition, the Committee will invite various experts to its meetings as needarises. The FPDC will serve as the Committee’s Secretariat. The PSC will meet at least twicea year. The PSC will report to the Projects Co-ordination Committee (PCC), which is chairedby the Honourable Minister for Lands and Forestry and is responsible for monitoring allprojects within the sector.
5.2.3 At the district level, Project Implementation Committees (PIC) will be set up by theDistrict Assemblies, in accordance with the Government’s decentralisation policies, tomonitor and evaluate project implementation progress at community level, and preparedistrict level development plans and budgets. The District Co-ordinating Director of theparticipating districts will chair the PIC. Membership of the PIC will include: DistrictForestry Manager, District Director of Agriculture, District Planning Officer, DistrictFinance/ Budget Officer, Two Representatives of project beneficiaries (one male and onefemale); two Representatives of NGOs, two Representatives of Women Groups, oneTraditional Ruler; one representative of Tree Grower Associations; a representative of anNGO participating in the project; Community Development Officer. The PIC shall meet atleast 4 times per year.
5.3 Supervision and Implementation Schedule
5.3.1 Supervision by the Borrower: The day-to-day supervision of the project will bedone by the FPDC. The annual work plan and budget shall be submitted three months beforethe beginning of each year to ADF for review and approval. The District PIC will meetquarterly to prepare and submit to the National PSC work plans and budgets. The NationalPSC will meet twice per year to review project progress and approve annual budgets.
5.3.2 The FPDC will supervise all project activities including those to be undertaken byMOFA, contractors, consultants, plantation development investors, NGOs, and Tree GrowerAssociations. It will report bi-annually to the PSC on all aspects of project implementationand management. FPDC will also submit quarterly and annual reports to the Bank followingthe Bank’s format for Quarterly and Annual Progress Reporting. It will also prepare and
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submit to the ADF the Borrower’s Project Completion Report (PCR), according to the Bankformat, capturing all aspects of the project including achievements, constraints, problems andlessons learnt at the end of the project period.
5.3.3 Supervision by the ADF: The ADF will supervise the project at least once a year toevaluate project implementation progress and discuss with FPDC, MOLF, MOFA, DistrictPIC, MFR managements, project beneficiaries, other officials and stakeholders relevantactivity achievements, problems, constraints, and any changes that may be necessary. A mid-term review mission will be undertaken in the fourth year of project implementation. Onreceipt of the Borrower’s PCR (paragraph 5.3.2), the ADF will prepare its version of the PCRin which it will verify the information provided in the Borrower’s PCR and recommendmeasures to ensure sustainability of the project activities, and draw up lessons for futureproject design. A final evaluation mission will be carried out at the end of year 6.
5.3.4 Implementation Schedule: The project will be implemented over a period of sixyears (Anne 2). In year one, activities will involve Establishment of the PSC at national leveland the District Implementation Committee at the district level; recruitment of the TechnicalAssistant and secondment/appointment of key staff to the FPDC. Recruitment of the NGO forcommunity mobilisation and sensitisation through participatory rural appraisal (PRAs). Inaddition, FORIG will commence work on the Seed Centre and support planning for on-farmresearch.
5.3.5 From year 2, the project beneficiaries will be involved in the preparation of ForestryManagement Plans (FMPs); Establishment and strengthening of the Community ForestryCommittees (CFCs.). Training of Forestry and MOFA staff, as well as project beneficiariesand CFCs. Nurseries will be established and areas for plantation development will bedemarcated and pegged. Firebreaks will be prepared and community patrols systemestablished. The first forestry plantations will be established from year two.
Table 5.1: Expenditure Schedule by Component (UA ‘000)
Component 2002 2003 2004 2005 2006 2007 Total
Integrated Forestry Management 593.18 836.70 563.53 585.11 721.45 730.01 4,029.99
Sustainab. Livelihood Support Scheme 106.26 917.00 1,475.55 120.77 43.14 28.31 2,691.02
Cap.Build. & Institut. Strengthening 1,155.85 372.68 36.88 126.87 35.38 82.74 1,810.41
Project Management 101.41 196.24 66.94 60.69 107.84 51.78 584.90
Total PROJECT COSTS 1,956.71 2,322.62 2,142.90 893.43 907.82 892.84 9,116.32
Table 5.2: Expenditure Schedule by Sources of Finance (UA ‘000)
Source of Finance 2002 2003 2004 2005 2006 2007 Total
ADF 1807.08 1938.38 1734.06 505.39 485.27 530.3 7000.48
GoG 125.93 321.81 338.02 307.9 331.89 260.23 1685.78
Beneficiaries 23.7 62.43 70.82 80.14 90.66 102.31 430.06
TOTAL 1956.71 2322.62 2142.9 893.43 907.82 892.84 9116.32
5.3.6 From year 3 to 6, the project will accelerate plantation development. By year 6, it isexpected that 6,000 ha of forest plantations will be established on-reserve and 1,500 ha ofagro-forestry plots established off-reserve. Stakeholders will continue to receive trainingwhile support to the RMSC and the CRNR (see paragraph 4.5.16 and 4.5.17) will take place.
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The sustainable livelihood support programme will continue. The Mid-term review is plannedfor year 4 while the post-evaluation of the project will be undertaken at the end of the sixyears. A detailed implementation schedule is provided in Annex 2. Tables 5.1 and 5.2 aboveindicate the schedules of the flow of project funds by component and by financier.
5.4 Procurement Arrangements
5.4.1 Procurement arrangements are summarised in Table 5.3 below. All procurement ofgoods, works and acquisition of consulting services financed by the ADF loan will be inaccordance with the Bank’s Rules of Procedures for Procurement of Goods and Works or, asappropriate, Rules of Procedure for the Use of Consultants using relevant Bank StandardBidding Documents.
Table 5.3: Summary of Procurement Arrangements
Procurement Methods in UA ‘000Expenditure categories NCB Other S/L NBF Total
A. Works
1. Civil Works 1,892.07[1,892.07] 114.64[114.64] - - 2,006.70[2,006.70]
B. Goods
1. Vehicles & Equipment 342.80[342.80] 289.98[289.98] 114.64[114.64] - 632.79[632.79]
B. Services
1. Training 48.75[48.75] 239.75[239.75] 6.03[6.03] - 294.53[294.53]
2. TA & Consultancies - 122.23[122.23] 472.19[472.19] - 594.42[594.42]
3. Education - 102.59[102.59] - - 102.59[102.59]
4. Research - 218.09[218.09] - - 218.09[218.09]
5. Livelihood Projects - 408.72[408.72] 289.71[289.71] 60.97 759.39[698.42]
6. Plant. Development 128.36[128.36] 2,736.55[2,263.30] - 1,198.57 4,063.47[2,391.66]
C. Operating Costs - 130.25[61.28] - 314.08 444.34[61.28]
Total Cost 2,411.98[2,411.98] 4,362.80[3,8205.57] 767.93[767.93] 1,573.62 9,116.32[7,000.48]
Note: Figures in parenthesis are the respective amounts financed by ADF
5.4.2 Civil Works: Twenty contracts with an average value of UA 94,600 will be awardedfor the rehabilitation of feeder roads and construction of the National Tree Seed Centrefollowing National Competitive Bidding (NCB) procedures. These works are not likely toattract foreign competition as they are scattered widely in remote areas in the forest reserves,individual contracts are small, and there is adequate capacity among local contractors for theworks. Works on the improvement of footpaths and tracks with a total value of UA 114,640will be undertaken by the project beneficiaries under supervision of the District Works Teamsusing the Force Account method of procurement.
5.4.3 Goods: Procurement of specialised equipment for seed processing by the NTSC and forthe RMSC with a total value of UA 280,610 will be through International Shopping. This isbecause of the specialised nature of the equipment and its availability from limited suppliers.Procurement of vehicles (FWD pick-up, motorcycles and bicycles), inventory and mappingequipment for the RMSC, computer and office equipment, camping and road maintenanceequipment with a total value of UA 342,800 will be through NCB. Five contracts with averagevalue of UA 68,500 will be awarded following NCB. Similarly one contract each for the supplyof specialised mapping and surveying equipment to the Resource Management Support Centrewith a value of UA 128,360, and for the supply of social forestry training materials for the fieldstaff of MoLF with a value of UA 48,750 will be awarded following NCB. The contracts aresmall and there are adequate representatives of international suppliers of the equipment in the
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country to ascertain adequate competition. Fire fighting requirements (including buckets, boots,and cutlasses) with a total value of UA 16,800 and some simple field training equipment valuedat UA 9,400 will be procured through National Shopping. There is an adequate number ofnational suppliers and agents of foreign suppliers of the items to ensure competitive prices.
5.4.4 Services: Contracts for all consultancy services, including for technical assistance and allNGO advisory and support services will be awarded using short lists of qualified consultants inaccordance with the Bank’s ”Rules and Procedure for the Use of Consultants” based ontechnical quality and price considerations. Contracts for consultancy services, technicalassistance and NGO services with a total value of UA 767,930 for in support of the Taungyacampaigns and related capacity building (UA 472,190), for supporting beneficiaries’ AlternativeLivelihood activities (UA 289,710) and for a resource person for Taungya workshops (UA6,030) will be awarded using short-lists from qualified consulting firms, NGOs and individualconsultants.
5.4.5 The services of international training institutions for specialised post graduate training ofstaff of specialists in social forestry, forestry and natural resources economics, policy analysis,and short courses in tropical forestry and for monitoring and evaluation valued at UA 102,590will be procured through direct negotiations with reputable institutions in the specialised areas.The qualifications and selection of beneficiaries for the postgraduate training (see Paragraph4.5.21) and their selection will be subject to no-objection from the Bank. Services for thetraining of field staff and other government personnel and beneficiaries in relevant nationalinstitutions and study tours with a total value of UA 239,750 will be directly contracted tospecialised national institutions and selected sites (for study tours). Likewise, field researchservices with a total value of UA 218,120 will be directly contracted to the Forest ResearchInstitute of Ghana, the national research institution specialising in forestry research. Services forpreparation of the project’s Environmental and Social Management Plan and for HIV andGender Equity monitoring with a combined value f UA 122,230 will be directly contracted tothe Environmental Protection Agency and to the MoFA focal point for HIV/AIDS, and genderequity monitoring units. Plantation development support services and Livelihood Projectsupport valued at UA 2,263,300 and UA 408,720, respectively will be provided through aSpecial Account managed by the Executing Agency.
5.4.6 Operation and Maintenance Services: Support to Project Management staff involved inproject monitoring with a total value of UA 61,280 will be funded through the Special Accountnoted in paragraph 5.4.5 above.
5.4.7 National Procedures and Regulations: Ghana’s national procurement laws andregulations have been reviewed and determined to be acceptable.
5.4.8 Executing Agency: The Executing Agency, i.e. MoLF has experience in implementingdonor-funded projects, including the ADF funded Subri Forest Plantation Project. The ministryhas staff that is sufficiently experienced in preparing procurement documents, processing themand in handling procurement issues. The staff is familiar with ADF Rules of Procedure for theProcurement of Goods, Works and Services. The existing experience would be strengthenedwith regular refresher training provided to relevant member country personnel by the Bank’sprocurement unit.
5.4.9 General Procurement Notice: the text of a General Procurement notice (GPN) will beprepared by the Government and reviewed during loan negotiations. The GPN will be issued for
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publication in the Untied Nations Development Business, upon approval of the project loan bythe Board of Directors.
5.4.10 Review Procedures: the following documents are subject to review and approval bythe ADF before promulgation: a) Specific Procurement Notice; b) Tender Documents nsRequests for proposal for consultants; c) Tender Evaluation Reports or Reports on Evaluationof Consultants’ Proposals, including recommendations for contract award; d) Draft contractsif these have been amended from the drafts included in the tender documents.
5.5 Disbursement Arrangements
5.5.1 Project funds will be disbursed in accordance with the expenditure schedule bycomponent and expenditure shown Table 5.1 and 5.2, above. At loan negotiations the Bank andthe Borrower would together examine the project document and agree on the disbursementmodalities. In principle the Government would open two separate special accounts in the nameof the project, one in a convertible currency for ADF resources, and the other in the nationalcurrency for project funds from the Government. Disbursement of the ADF funds will be guidedby an annual work programme drawn up by Project Management and approved by theGovernment and the Fund. Specific disbursement modalities for various categories ofexpenditure would be discussed and agreed during loan negotiations. These modalities would, ifnecessary, be revisited during project implementation and project reviews to take into accountlessons of experience. Broadly, the disbursement procedures most appropriate for particularproject components or activities will be chosen from the following: Direct Payment Method: this method is most appropriate for civil works and consultancy
services, and for vehicles, and equipment; Revolving Fund Method: Matching funds for the project’s support to income generating
activities, staff allowances and training; and Reimbursement Guarantee Method: this method will be used for operations and maintenance
expenses of vehicles, equipment, including purchase of spares.
5.5.2 The initial request for disbursement of ADF funds into the project Special Account,covering a period of four to six months, would be submitted to the Bank for approval.Subsequent disbursements would be subject to adequate justification of the utilisation of thepreceding disbursement. Other project disbursements would follow the procedures agreedduring loan negotiations. Government contribution to the project costs would be deposited in therespective Special Account on a quarterly basis. This will be a condition of the loan.
5.6 Monitoring and Evaluation
5.6.1 Monitoring and Evaluation (M&E) will form an integral part of management tools toeffectively assess progress of project activities, identify critical implementation constraintsand to evaluate new opportunities. Monitoring and Evaluation activities will include a)continuous monitoring against criteria and benchmarks that will be established by a base linesurvey to be undertaken at the start of project implementation; b) mid-term evaluation to beconducted during the third year of project implementation; and c) project completion reportto be prepared during the last year of project implementation. A start-up workshop will beorganized soon after loan effectiveness in order to raise awareness of the project and to reacha common understanding with the beneficiaries and other stakeholders about the projectobjectives and modalities of implementation.
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5.6.2 Continuous monitoring: The FPDC, FC and the MoLF will have the overallresponsibility over ensuring the continuous monitoring of project activities. FPDC willconduct and report regularly on project activities. In addition, within the context of theNRMP co-financiers’ co-ordination, multi-donor supervision missions will continue to beundertaken periodically to give the donors a first hand appreciation of programmeimplementation progress and problems. The EPA will regularly monitor and report on theimpact of the project on the environment while the Contact Groups on HIV/AIDS and Genderat MoFA will monitor and report regularly on the impact of the project on these issues. Inaddition, resources will be provided to undertake, on a yearly basis, surveys and forestinventories in order to determine the rate of plantation establishment, species preference andto get feed back from the project beneficiaries. In line with the project objective to reducepoverty and focus on capacity building, specific effort will be made to monitor indicators of:a) poverty reduction, including access to resources, such as land and benefits accruing fromthe project, and their impact on the living standards, especially of the vulnerable groups suchas the very poor, women and migrants; b) capacity building, including beneficiariesunderstanding of the land law and their rights under the law; and c) social and economicempowerment of women, the poor and migrants in order to ensure gender and social equity;and d) participation, especially of the vulnerable groups in all aspects of decision makingconcerning project activities and benefits. The survey during the first year will constitute thebaseline survey and will furnish the benchmark data for various parameters to be used asbases for assessing progress in ensuing surveys.
5.6.4 Mid-term review: The mid-term review to be undertaken by independent consultantswill evaluate progress made against set targets and recommend change in project scopeand/or implementation modalities to enhance progress over the remaining project period. Amid-term workshop will be organised as a forum for the beneficiaries and project staff toreview progress achieved and agree on the way forward.
5.6.5 Project Completion Report: Within three months before the end of the projectimplementation period, a Project Completion Report (PCR) will be prepared by the FPDC.The report after review by MoLF and FC will be submitted to the ADF and will form thebasis for the ADF version of the PCR to be prepared soon after. An end of project workshopwill be organised in order for the beneficiaries and project staff to reflect on the achievementsand problems and constraints and to evaluate whether or not the project has been a success.
5.7 Financial Reporting and Auditing
FPDC will maintain a computerised accounting system and produce quarterly financialstatements in accordance with sound accounting practices. FPDC will ensure that the projectfinancial statements are audited, once a year, by an independent auditor. The appointment of theauditor shall be approved by the ADB. The audit reports will be submitted to the national levelPSC for review and to the Bank, for comment, not later than three months after the end of eachfinancial year. Failure to submit the reports regularly will attract sanctions, including suspensionof disbursements from the Bank. These audit reports will constitute one major way of ensuringthe proper utilisation of project resource.
5.8 Aid Co-ordination
5.8.1 Aid co-ordination in Ghana is built on the Comprehensive Development Framework(CDF), a process seeking to ensure government leadership and ownership of its development
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agenda while ensuring close co-ordination and consultation with development partners inorder to ensure their collaboration in supporting the agreed agenda. The principal forum forthis process of “Co-ordination, Consultation and Collaboration” is the Consultative Group(CG) held every two years under the joint chairmanship of the country’s Minister of Financeand the country director of the World Bank. A system of mini-CGs are held every quarter tomonitor progress in the agreed programme and targets. The Minister of Finance and the Headof the World Bank’s country office also jointly chair these meetings. Sector level co-ordination is achieved through a series of CDF Sector Coordination Groups in which thesectoral ministry or ministries provide leadership with the focal assistance of a major donoror two acting as the focal point for the coordinating of donor agencies active in the particularsector.
5.8.2 It is in this context that the for the forestry sub-sector the coordination of developmentassistance from bilateral and multilateral agencies is led by the World Bank while the DanishEmbassy takes the lead in liaison with the Government. The FAO leads donor co-ordinationon the agricultural sector. NRMP GoG/Donor consultative meetings are normally heldquarterly under the auspices of MoLF and Ministry of the Environment, Science andTechnology, which jointly co-ordinate Government input in these sectoral consultations.While these sectoral consultative meetings experienced a lull following the recent generalelections, they have now resumed. The interested Donors have their own Co-ordinationCommittee whose meetings are also held on a quarterly basis or as and when deemednecessary mainly to review progress and share knowledge and experiences under theframework of NRMP. The agencies represented at the donor consultative meetings includeWorld Bank, DFID, GTZ, FAO, JICA, RNE, EU, and UNDP. At the invitation of theGovernment the ADB was represented at the latest meeting of the GOG/Donors coordinationmeeting held in October 2001 to review activities concerning the NRMP. Both theGovernment and members of the Donor community participating in the meeting weresupportive of the project.
6. PROJECT SUSTAINABILITY AND RISKS
6.1 Recurrent Costs
6.1.1 Total recurrent costs of the project amount to UA 1.14 million. In the course of projectimplementation ADF will cover recurrent costs relating to FPDC monitoring of projectimplementation estimated at UA 0.01 million annually. The government will bear the recurrentcosts relating to staff salaries, office utilities and some of the costs of operating and maintenanceof vehicles, motorcycles and bicycles estimated to amount to UA 0.02 million a year. All staffsalaries and most of the cost of office utilities are already built into the government budget.
6.1.2 At the end of project implementation, the cost of maintenance of motor cycles andbicycles supplied to field staff on ownership basis will be the responsibility of the staffmembers. The maintenance and operating expenses, including maintenance of the National TreeSeed Centre built with project financing, will be met by the centre which would have becomeautonomous by then. Similarly, the cost of operating and maintenance of infrastructure providedto farming communities will be the responsibility of the communities themselves. With theincome gains from the project and improved community organisation the communities shouldnot have difficulty carrying out these activities. Consequently, the remaining recurrent costs tobe borne by the government will be low and within the budgetary capacities of government
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under the multi-year budgeting process within the Medium Term Expenditure Framework(MTEF). Table 6.1 demonstrated the declining trend of recurrent costs towards the end ofproject implementation.
Table 6.1: Summary of Recurrent Cost Financing
UA ‘000
Recurrent Expenditure Item 2002 2003 2004 2005 2006 2007 Total
1. Motorcycle Operation & Maintenance - 187.94 204.86 148.86 162.26 88.43 792.36
2. Bicycle Operation & Maintenance - 0.25 0.27 0.22 0.24 0.18 1.17
3. Inventory Mapping Equipment O & M - 0.06 0.07 0.04 0.04 0.02 0.23
4. Feeder Roads Maintenance - - 3.91 12.79 9.29 8.10 34.10
5. In-field Road Maintenance - - 3.13 10.23 7.43 6.08 26.87
6. National Tree Seed Centre (NTSC) O &M
- 5.08 - - - - 5.08
7. NTSC Equipment O & M - 14.72 - - - - 14.72
8. Other FORIG Operational Costs 91.16 - - - - - 91.16
9. FPDC Personnel Travel Expenses 27.57 25.99 23.90 21.21 17.86 13.72 130.25
10. FWD Vehicles O & M - 37.59 40.97 37.22 40.57 35.37 191.71
11. Computer Equipment O & M 0.05 1.15 1.25 1.36 1.48 1.62 6.91
12. Office Equipment O & M - 0.75 0.82 0.89 0.97 1.06 4.50
Total 118.78 273.53 279.18 232.82 240.14 154.58 1,436.22
6.2 Project Sustainability
6.2.1 After the financing phase GoG, will continue to meet the cost of replacement andmaintaining some of the equipment acquired with project financing. The proposed project hasbeen designed in a participatory and consultative manner. The Government undertook a massawareness campaign to inform potential participants in the merits of the Modified TaungyaSystem. As a result, more than 20,000 people have expressed their interest. The design teamparticipated in meetings with and in training sessions of potential beneficiaries, while meetingswere also held with community organisations, and groups engaged in income earning activities.The team visited institutions likely to be involved in project activities such as rural banks,relevant NGOs and projects operating along modalities similar to those planned for the project.Lengthy consultations were held with local government, district and regional governmentofficials to discuss possible roles in project monitoring and implementation, and to assess theexisting capacities and requirements for additional capacity building. Contacts were also madewith large-scale private plantation operators to discuss potentials and modalities forcollaboration between these operators and smallholder tree planters. Members of theinternational donor community (bi- and multilateral), and the NGO community were alsovisited. This process has helped ensure that the concerns, views and experiences of allstakeholders have been taken in mind in project design. The principal focus of project activitiesis to strengthen the capacities of participating farmers and of the institutions and personnel thatprovide essential services to the beneficiaries so that once the financing phase is over, activitieswill continue with minimum outside intervention. In addition, all through the implementation ofthe project beneficiaries would be involved in decision-making.
6.2.2 The design is such that beyond the project-financing phase relatively few of the costitems will require maintenance expenditure from the Government (see paragraph 6.1.1). Theseitems will comprise mostly of some office and specialised equipment supplied to FSD. AsNTSC is expected to become autonomous following establishment, it is expected to maintain its
35
vehicles and equipment from its own resources. Similarly the maintenance of motorcycles andbicycles will be met by the staff themselves. According to the most recent CSP, GoG has beentaking a number of measures to improve its revenue collection and management systems. Thesemeasures include the recent creation by the government of the Revenue Agencies GoverningBoard, which seeks to strengthen Government revenue collection and management capacity. Inaddition, the implementation of the MTEF and on-going civil service reforms seeking to limitbudgetary expansion will all further strengthen GoG’s capacity to keep its budget under control.The project supported CDF schemes and training provided in the course of projectimplementation are expected to enable beneficiaries to have adequate incomes that would enablethem to meet the maintenance cost of their plantations beyond the project-financing phase.
6.2.3 The timely conclusion of on going reforms of laws and regulations governing land andtree tenure, and framework agreements on cost and benefit sharing arrangements betweenstakeholders is, therefore, crucial for the success of the project. The Bank will require theGovernment to give an undertaking that it would continue these reforms with a view toconcluding a remunerative cost/benefit sharing framework agreement to be signed betweenthe FC and participating farming communities. It is also expected that the Government wouldcontinue to pursue its general economic reform programme thereby ensuring the successfulimplementation of the project.
6.3 Critical Risks and Mitigating Measures
6.3.1 Many forest areas are in remote places far from markets for input required for productionand for selling outputs from the forest reserves, and from schools and health facilities. This maydiscourage potential beneficiaries from participating in project activities. To reduce this risk, theproject is providing support for feeder road rehabilitation and tracks improvement. In addition,the Government is undertaking, in collaboration with a number other donors, programmes toimprove social and physical infrastructure thereby alleviating this constraint. A number of theseprogrammes cover the project areas.
6.3.2 The principal output of the tree plantation programme (timber and poles) will only berealised after the end of project financing. This fact risks putting off potential projectbeneficiaries, especially since the targeted groups are smallholders who are generally poor andtherefore more concerned with their everyday needs for survival than long-term incomes. Tomitigate this concern, the project design contemplates the institution of CDF scheme withsupport grant resources contributed, for a start, from UNDP/GEF. The CDFs would enablebeneficiaries to undertake short-term income generating activities. The added incomes wouldenable the beneficiaries to afford everyday living expenses and to use some of the income tomeet the costs of tree planting and care.
6.3.3 Frequent bush fires constitute the most serious threat to forestry development. Theproject, by allowing farmers to cultivate degraded forestlands to plant trees and crops, couldincrease the risk of bush fires in view of local practices of slash and burn. The project isproviding support to combat any increase in the threat of bush fires, in the form of support tothe development of firebreaks, providing district and regional FSD offices with bush firefighting equipment and relevant training for staff and beneficiaries. This is because threats ofbush fires also come from such traditional practices as clearing of land using fire, startingfires to facilitate hunting and honey harvesting. To control these practices and thus obtain amore comprehensive control on forest fires will require large-scale national campaigns toraise public awareness on the dangers of forest fires. This is beyond the scope of this project.
36
7. PROJECT BENEFITS
7.1 Financial Analysis
7.1.1 Farm models drawn up using current data indicate that the inter-planting of forestplantation trees and agricultural crops is profitable. Under the MTS participating farminghouseholds (on-reserve) would plant a total of 2 hectares over the 6-year financing period of theproject. Because of higher potential returns on investment from teak as compared to other treespecies, it is assumed that most (up to 75%) of the planted area will be in teak. Assuming thatunder the MTS benefit sharing system the average participating farmer would retain 30% of theproceeds from the tree outputs, and all returns from agricultural crops (including maize, yams,plantain, cocoyams, cassava, okra, chillies, and tomatoes), an internal financial rate of return of26% is realised over a 30-year rotation period (Annex 3, Volume 2). The analysis indicates thatthe FIRR is quite sensitive to changes in the benefit share accruing to the beneficiaries. It istherefore important that the on-going cost-benefit sharing consultations conclude withbeneficiaries’ share that will ensure remunerative return to the participating farmers. This is acondition of the loan.
7.1.2 Farm budget for the typical mixed cropping models (crops listed in paragraph 7.1.1) andprojected revenues from various forestry products, including seedlings production, indicate thaton average farmers’ annual net incomes would increase from an estimated income of Cedis173,082 (about $25) per ha (Annex 2, Volume 2) without project to Cedis 2,549,900 (about$364) with project for those operating on-reserve. For farmers off-reserve net annual incomeswould rise to an estimated Cedis 632,900 (about $90). These gains would originate principallyfrom the income received from various tree outputs but also from a doubling of crop yields(97% on average) brought about by farmers growing crops in more fertile forest soils on-reserveand their use of productivity raising inputs acquired through project support and support fromco-financiers. This significant increase in income would afford participating farmers improvedliving standards as well as enable them to meet other expenses, including the cost of maintainingtree plantations and of crop production beyond the capacity of available family labour.
7.2 Economic Analysis
To assess the potential impact of the project on the national economy a comparison of theeconomic benefits with and without the project was carried out. Analysis of the incrementalbenefits yields an Economic Internal Rate of return of 20% (Annex 4). These estimates haveassumed: A 30-year rotation period to facilitate the final harvest of the area of plantations established
under the project; Economic prices for poles and timber are based on projected export market prices adjusted
to the respective standing log price levels, i.e.: $7 per m3 of small poles, $17 per m3 oftelephone poles, $28 per m3 of transmission poles, and $119 per m3 of Teak and Cidrellatimber and $47.50 for timber of other species. Economic costs are based on financial costsless taxes and duties, price contingencies.
Most of the agricultural products produced under the assumed inter-cropping model are forsubsistence consumption, mostly in the production area. Consequently, financial prices havebeen used for the economic analysis.
Because of dearth of dependable data benefits from non-timber forestry products such asprotein from bush meat, and other nutrients from honey and mushrooms, and considerable
37
incomes obtained from trade in canes and wrapping leaves have not been included in theanalysis.
7.3 Social Impact Analysis
7.3.1 Positive social impacts at community level will include increased revenue from treesplanted on- and off reserve, increased access to land for farming activities on-reserve, accessto start up working capital from CDF resources for on- and off-farm income generatingactivities, and increased access to extension advice in forestry and agriculture. In the short-term, participating farmers on-reserve are expected to harvest agricultural crops valued atCedis 2,158,667 ($308) annually. Those off-reserve would harvest crops valued at Cedis539,667 ($77) per annum. In the long-term farmers’ annual receipts would be augmented bytheir benefit share from the sale of various wood products from the forest plantations.Assuming that the on-going consultations on cost/benefit sharing result in a beneficiaries’share of 30% of the revenues from all wood products, beneficiaries total annual receiptswould increase to an estimated Cedis 2,549,900 ($364) per family on reserve. Off-reserve,the total annual receipts would amount to Cedis 632,900 ($90) per family. Changes inrevenue sharing and community participation will have impacts beyond the immediatecommunities and have the potential to act as a model for revenue distribution further afield.Appropriate extension advice will be provided to beneficiary communities to engage inseedling production as a short-term source of revenue. The activity is particularly suitable forparticipating women farmers and special effort will be made to encourage womenparticipation in this activity.
7.3.2 It is reckoned that in rural Ghana poverty and vulnerability to poverty is closelyassociated to inadequate or insecure access to fertile land. In this respect, the most vulnerablegroups including migrant farmers, women and the youth who are more dependent oncommon land resources for their livelihoods. Land in forest reserves is common in that it ismanaged by the Government. These groups would therefore have equal access to the land forforest plantation development and crop production. In consultations with resident migrantsand landowners during project preparation, both groups expressed a strong interest ingrowing teak under a modified abanu (sharecropping) system off-reserve. This system whichresembles the MTS in that land operators and owners share the costs and benefits inproportion to their contributions would allow for the gains from tree production to poorfarmers operating off-reserve. Poor farmers would therefore equally benefit from theestimated 43% increase in food production expected from adoption of the MTS . Most of thisfood would be for subsistence consumption, and would significantly improve the foodsecurity of the communities, and especially of the vulnerable members of the communities.This together with the sales of any marketable surpluses would, together with the significantincreases in incomes indicated in 7.3.1 result in a significant improvement in communityincomes and poverty reduction.
7.3.3 Extension advice at village level will also involve training and informationdissemination on tree ownership and timber harvesting legislation thus empowering thebeneficiaries in respect of their rights and responsibilities under the national forestrylegislation.
7.3.4 The project design has integrated a component of raising awareness and protectionagainst HIV/AIDS. It is planned that this will be done through dissemination of informationat the grass-root level through training the Range Supervisors, Forest Guards, Agricultural
38
Extension Agents and the CFCs who in turn will sensitise the community members. The GoGagreed that this activity would be done in co-operation with the HIV/AIDS focal point of theMinistry of Health.
7.3.5 The main impact on women at the community level will be economic and socialempowerment. Economic empowerment will be achieved by ensuring that womenparticipation in project activities is proportional to their number in the communities. Womenwould gain equitable access to land, know-how and CDF support for farm inputs, and othersupport provided under the project leading to improvements in nutrition, health, educationand the general standard of living for the participating families. Their participation would beensured partly through gender specific training provided by staff of the Women inAgricultural Directorate of MoFA. Social empowerment will be achieved through greaterinvolvement in information dissemination and decision-making. To this end, the NGOcontracted to provide support for sustainable livelihood/income generating activities underthe project would insist that at least 3 of the members of the CFCs and of other plantationrelated committees would be women.
7.3.6 Benefits will also accrue to those involved in the timber industry down-streamthrough the provision and maintenance of jobs in small and large scale timber processing. Itis also expected that benefits will accrue through enhanced forestry research and extensioncapacity. In supporting a collaborative approach to forest management, the effects are likelyto go beyond the communities directly involved in the project.
7.4 Sensitivity Analysis
7.4.1 Return from the project may fall or increase as a result of changes in such factors asprices or yields of project outputs. Returns could also be affected by delays in the flow ofrevenues caused by such factors as the late maturity of trees. The analysis reveals that returnsfrom the project are relatively more sensitive to changes in revenues than to costs or timing ofthe flow of revenues. The analysis results are summarised below:
EIRRi) At the assumed level of revenues and costs : 20%ii) Revenues decline by 10% : 16%iii) Costs increase by 10% : 19%iv) Revenue decline by 10% and costs increase by 10% : 15%v) Two-year delay in the flow of revenue : 19%
7.4.2 The assumptions for both prices and output are conservative (further details are providedin the Production and Marketing Annex in Volume II). The on-going consultations withinGhana that are likely to result in improved returns to project beneficiaries from their treeplantations thus strengthening the chances that production levels and hence revenues would notfall below projected levels. However, even if revenues were to decline, they would have to fallby more than 20% for the EIRR to fall below 12%, the current opportunity cost of capital inGhana, which is not likely.
8. CONCLUSIONS AND RECOMMENDATIONS
8.1 Conclusion8.1.1 The analysis demonstrated that smallholder farmers may successfully and profitablyparticipate in forest plantation development. It is shown that this activity would, in the long-term, significantly improve their incomes, reducing rural poverty and enhancing household
39
food security. This would lead to overall improvement in well being of the participatingfarming communities. The analysis shows that, if participating farmers retain 30% of thebenefits from plantation development, they would realise a financial rate of return on theirinvestment of 26% over the 30-year rotation period which is about 2.2 times the prevailingopportunity cost of capital in Ghana (12%).
8.1.2 The growing of crops in the fertile, though degraded forest reserves, would result in cropyields more than doubling for most crops thus resulting in improved food production some ofwhich would be sold outside the participating communities thereby improving food securitybeyond participating household. At the same time the increase in timber, poles and fuel woodwould bring the country vital export earnings amounting to over U$40.4 million (from export oftimber), and domestic incomes amounting to about US$14.3 million from the domestic sale oftimber, various types of poles and fuel wood and to public revenue from increased tax receipts.In addition the project will make an important contribution to the conservation of the country’sfauna and flora, improve water conservation and environmental quality as a result of therehabilitation of forests.
8.2 Recommendations and Conditions for Loan Approval
It is recommended that a loan not exceeding UA 7.00 million from the ADF be granted to theGovernment of the Republic of Ghana for the purpose of implementing the project as describedin this report subject to the conditions specified in the Loan Agreement.
(A) Conditions Precedent to Entry into Force of the Loan Agreement
The entry into force of the Loan Agreement shall be subject to the fulfilment by the Borrower ofthe provisions of Sections 5.01 of the General Conditions Applicable to Loan and GuaranteeAgreements of the Bank.
(B) Conditions precedent to First Disbursement
The obligations of the (Fund) to make first disbursement of the Loan and grant shall be subjectto the entry into force of the Loan Agreement and the submission by the Borrower of evidence,acceptable to the Bank, that the following conditions have been fulfilled:
The Borrower shall have submitted to the Fund evidentiary documentation to the satisfaction ofthe Fund attesting to the:
i) Designation of the Programme Steering Committee of the Ministry of Lands andForestry chaired by the Deputy Minister (Forestry) and comprising the Director, PPMED(MLF); Technical Director (Forestry); Chief Executive FC; Director of Crop Services,MOFA; Director of Women in Agriculture Development (MOFA); Director RuralDevelopment of the Ministry of Local Government and Rural Development; ExecutiveDirector of the Environmental Protection Agency; one representative of the Ministry ofFinance; Director FORIG; one Traditional Ruler; two representatives of participating farmers(one male and one female); two representatives of Tree Nurseries Associations; two NGOrepresentatives; representative of the National Tree Growers’ Association; and onerepresentatives of Commercial Large-Scale Plantation Investors. The FPDC will serve as theCommittee’s Secretariat. The PSC will meet at least twice a year. The PSC will report to theProjects Co-ordination Committee (PCC), which is chaired by the Honourable Minister for
40
Lands and Forestry and is responsible for monitoring all projects within the sector. The PSCwill provide policy guidance, review project progress and approve annual budgets. The PSCshall meet at least twice each year and be empowered to invite experts to attend its meetings asand when the need arises (paragraph 5.2.2);
ii) Establishment of Project Implementation Committees by District Assemblies indistricts in which the Project is being implemented (paragraph 5.2.3). The District Co-ordinating Director of the participating districts will chair the PIC. Membership of the PICwill include: District Forestry Manager, District Director of Agriculture, District PlanningOfficer, District Finance/ Budget Officer, Two Representatives of project beneficiaries (onemale and one female); two Representatives of NGOs, two Representatives of WomenGroups, one Traditional Ruler; one representative of Tree Grower Associations; arepresentative of an NGO participating in the project; Community Development Officer. ThePIC shall meet at least 4 times per year.
B. Undertakings
The Government shall have submitted to the Fund a written undertaking to:
(i) continue the on-going consultations towards concluding a "cost-benefit sharingframework agreement " to be signed between participating farmers and the ForestCommission stipulating respective responsibilities and rights, including shares ofcosts and benefits accruing to each stakeholder (paragraph 2.4.5), and to submit draftframework agreement to the Fund for review and comments by 30th June 2002.
(ii) ascertain that the share of benefits accruing to the participating farmers will beremunerative relative to their contribution to the realisation of the forest plantationoutputs and shall submit a report of its findings to the Fund for comment by 30th June2002 (paragraph 2.4.5);
(iii) Ensure that the Environmental Protection Agency has prepared an Environmental andSocial Management Plan that shall be submitted to the Fund for comment within sixmonths of project implementation (paragraph 4.7.4).
(iv) include in the annual maintenance programme of the Department of Feeder Roads inthe Ministry of Roads and Transport the feeder roads and paths improved under thisProject both during implementation and after completion of the Project (paragraph4.5.11).
41ANNEX 1
This is intended exclusively for the use of the readers of the report to which it isattached. The names used and the borders shown do not imply on the part ofthe Bank and its members any judgement concerning the legal status of a
UPPER WEST REGION
UPPER EASTREGION
NORTHERN REGION
VOLT
AREGIO
N
BRONG-AHAFO REGION
ASHANTI REGION
WESTERN REGION
CENTRAL REGION
EASTERN REGION
GREATER ACCRA
Ashanti Region:
Brong-Ahafo Region:
Eastern Region:
Werstern Region:
Afam Headwaters Forest ReserveAsubima Forest Reserve
Yaya Forest Reserve
Worobong Forest ReserveEsuboni Forest Reserve
Tano Saraw Forest Reserve
GHANACOMMUNITY FORESTRY MANAGEMENT PROJECT
Esuboni FR.
Worobong FR.Tano Suraw FR
AframHeadwatersFR
Asubima FR
Yaya FR
42
ANNEX 2
GHANACommunity Forestry Development Project
Tentative Implementation Schedule
Beginning End AgencyBoard ApprovalEffectiveness of loan AgreementLaunching missionLoan implementation
June 2002Sep 2002Oct 2002Oct 2002
ADFGOGADFGOG
- Organisation and ManagementEstablishment of the Project Steering CommitteeRecruitment of Technical AssistantRecruitment of the NGO for community mobilizationEstablishment of Seed CentrePlanning for on-farm Research
Nov 2002Jan 2003Jan 2003Jan 2003Jan 2003
Dec 2002Mar 2003Mar 2003June 2003Mar 2003
FPDCFPDCFPDC
FORIGFORIG
- Natural Resources ManagementSensitisation workshopsAwareness campaignsParticipatory Rural AppraisalsEstablishment of Community Forestry CommitteesPreparation of integrated forest reserve management plansForest zoningEstablishment of nurseriesPlantation establishmentEstablishment of fire breaks and community patrolsImplementation of on-farm research programmeEstablishment of benefit sharing agreements
Apr 2003Apr 2003July 2003Sep 2003Sep 2003Sep 2003Apr 2003Jan 2004Jan 2004
April 2004Sep 2003
June 2003June 2003Sep 2003Dec 2003Dec 2003Dec 2003Dec 2003Jan 2006
Dec 2006Dec 2007Dec 2004
FC/FPDCFC/FPDC
NGO/FC/FPDCNGO/FC/FPDCNGO/FC/FPDCNGOFC/FPDC
TGAFSD/FPDC
FSDFORIG
FC
- Alternative Livelihood SchemeLivelihood surveyEstablishment of Community Development FundPreparation and appraisal community-based initiativesImplementation of community-based initiatives
Sep 2003Jan 2004Apr 2004Jul 2004
Dec 2003Mar 2004Jun 2004Dec 2007
FPDC/GEFNGO/GEFNGO/GEFNGO/GEF
- Capacity Building $ Institutional StrengtheningStrengthening of Community Forestry CommitteesStrengthening of Village Fire Volunteer SquadsTraining of forestry and MOFA staffUndertaking a training needs assessmentPrepare training modulesPreparation of various extension materialsUndertake specialized training materialsUndertake forestry researchEstablishment of seed orchards
Sep 2003Jan 2004Jul 2003
Oct 2003Apr 2004Sep 2004Sep 2004Apr 2003Apr 2003
Sep 2004Mar 2004Sep 2003Mar 2004Dec 2004Mar 2005Mar 2005Dec 2007Dec 2007
NGO/FPDCFC/FSD
FPDC/TAFPDC/TAFPDC/TAFPDC/TAFPDC/TA
FORIGFORIG
- Project ManagementQuarterly reportsAuditMid-term reviewProject evaluationProject completion report
Jan 2003Jan 2003Jun 2005Oct 2008
Dec 2008Dec 2008Aug 2005Dec 2008Jun 2009
FPDCFPDC/
GOG/ADFGOG/FPDC
FPDC
43
Annex 3
GhanaCommunity Forestry Management Project
PROVISIONAL LIST OF GOODS AND SERVICES
CATEGORY (UA ‘000)
A. Civil Works 2,006.70
B. Vehicles(FWD Pick-ups, Motorcycles & Bicycles) 184.06
C. Equipment and Tools 500.34
D. Training, Technical Assistance & Fellowships 524.25
E. Consultancy and NGO Services 415.68
F. Plantation Development Support 2,391.66
G. Livelihood Projects Support 698.42
H. Field/Adaptive Research 218.09
I. FPDC Project Monitoring Expenses 61.28
TOTAL 7,000.48
Annex 4
CULCULATION OF ECONOMIC RATE OF RETURN
Costs (Ghanaian Cedis Million) Benefits (Ghanain Cedis Million)Project With Project W/out
Projectwith Project w/out
Project
Year Investment Recurrent Prod. & Mktg Total Prod. & Mktg Tot. Bene. TotalBenefits
Tot. Increm.Benefits
Net Increm.Benefits
1 2,180.48 134.27 0 2,314.75 0 - - - (2,248,284.37)
2 25,214.31 893.39 2,222,176.67 2,248,284.37 519,877.73 4,000,000.00 2,205,002.00 1,794,998.00 716,284.793 6,826.25 335.28 1,071,551.67 1,078,713.21 519,877.73 2,400,000.00 2,630,003.00 (230,003.00) (1,061,798.43)4 5,036.38 207.39 826,551.67 831,795.43 519,877.73 1,200,000.00 2,630,004.00 (1,430,004.00) (2,370,298.16)5 1,464.34 146.15 938,683.67 940,294.16 519,877.73 4,000,000.00 2,630,005.00 1,369,995.00 311,359.856 1,041.46 42.02 1,057,551.67 1,058,635.15 519,877.73 2,988,000.00 2,630,006.00 357,994.00 217,951.987 0 42.02 140,000.00 140,042.02 519,877.73 588,000.00 2,630,007.00 (2,042,007.00) (2,182,049.02)8 0 42.02 140,000.00 140,042.02 519,877.73 588,000.00 2,630,008.00 (2,042,008.00) (2,182,050.02)9 0 42.02 140,000.00 140,042.02 519,877.73 588,000.00 2,630,009.00 (2,042,009.00) (2,182,051.02)
10 0 42.02 140,000.00 140,042.02 519,877.73 588,000.00 2,630,010.00 (2,042,010.00) (2,392,052.02)11 0 42.02 350,000.00 350,042.02 519,877.73 8,837,500.00 2,630,011.00 6,207,489.00 6,066,691.5112 755.47 42.02 140,000.00 140,797.49 519,877.73 8,837,500.00 2,630,012.00 6,207,488.00 6,067,445.9813 0 42.02 140,000.00 140,042.02 519,877.73 8,837,500.00 2,630,013.00 6,207,487.00 6,067,444.9814 0 42.02 140,000.00 140,042.02 519,877.73 6,166,125.00 2,630,014.00 3,536,111.00 3,396,068.9815 0 42.02 140,000.00 140,042.02 519,877.73 6,166,125.00 2,630,015.00 3,536,110.00 3,186,067.9816 0 42.02 350,000.00 350,042.02 519,877.73 12,353,906.25 2,630,016.00 9,723,890.25 9,583,848.2317 0 42.02 140,000.00 140,042.02 519,877.73 2,353,906.25 2,630,017.00 9,723,889.25 9,583,091.7618 755.47 42.02 140,000.00 140,797.49 519,877.73 12,353,906.25 2,630,018.00 9,723,888.25 9,583,846.2319 0 42.02 140,000.00 140,042.02 519,877.73 17,762,500.00 2,630,019.00 15,132,481.00 14,992,438.9820 0 42.02 140,000.00 140,042.02 519,877.73 17,762,500.00 2,630,020.00 15,132,480.00 14,992,437.9821 0 42.02 140,000.00 140,042.02 519,877.73 3,062,500.00 2,630,021.00 432,479.00 292,436.9822 0 42.02 140,000.00 140,042.02 519,877.73 3,062,500.00 2,630,022.00 432,478.00 292,435.9823 0 42.02 140,000.00 140,042.02 519,877.73 3,062,500.00 2,630,023.00 432,477.00 291,679.5124 755.47 42.02 140,000.00 140,797.49 519,877.73 - 2,630,024.00 (2,630,024.00) (2,770,066.02)25 0 42.02 140,000.00 140,042.02 519,877.73 - 2,630,025.00 (2,630,025.00) (2,770,067.02)26 0 42.02 140,000.00 140,042.02 519,877.73 3,781,640.63 2,630,026.00 1,151,614.63 1,011,572.6027 0 42.02 140,000.00 140,042.02 519,877.73 3,781,640.63 2,630,027.00 1,151,613.63 1,011,571.6028 0 42.02 140,000.00 140,042.02 519,877.73 3,781,640.63 2,630,028.00 1,151,612.63 1,011,570.6029 0 42.02 140,000.00 140,042.02 519,877.73 2,928,515.63 2,630,029.00 298,486.63 157,689.1330 755.47 42.02 140,000.00 140,797.49 519,877.73 2,928,515.63 2,630,030.00 298,485.63 298,485.63
EIRR 20%
44
Annexe
GHANA : THE COMMUNITY FORESTRY MANAGEMENT PROJECT
CORRIGENDUM
Appraisal Report
1. Under Project Information Sheet the following corrections are made:
a) Executing Agency is amended to read: Ministry of Lands and Forestry b) Under Procurement of goods, Works and Services: First word in the
penultimate line is corrected to read, “through”.
2. The Executive Summary under Purpose of the Loan: the last line is amended to read, “(UA 5.01 million) and 48.51% of local cost (UA 1.99 million)”.
3. Paragraph 4.5.4: Insert the words, “and District Assemblies” after the acronym
MoFA in the penultimate sentence. The paragraph should end with a new sentence reading, “In addition, the project will provide support to communities to replant watershed areas threatened with degradation and also conserve sensitive biodiversity sites”.
4. Paragraph 4.5.11: The end of the last sentence should be revised to read, ”the
Department of Feeder Roads and other relevant agencies will include these roads and paths in heir annual maintenance programmes”.
5. Paragraph 4.5.21: Insert the phrase, “one double cabin Four Wheel Drive pick-
up,” after the word “with” at the end of the 9th line.
6. Paragraph 4.9.2: In the first sentence, replace the figure “21.86%” with “45.07%”; insert the phrase, “of which ADF is to finance UA 1.99 million or 48.51%” after the words “project cost”; and delete the last four words at the end of the sentence.
7. Paragraph 5.2.1: Add the word “plantation”, after the acronym NRMP in the third
line of the first sentence. Also add the words, “plantation activities” after the acronym NRMP in the third sentence.
8. Paragraph 5.2.2: Insert the word “enhanced” in brackets after the abbreviation
MoLF in the second sentence. Also insert the word, “existing” before the term Projects Co-ordination Committee in the last sentence.
9. Paragraph 5.3.2: Insert the phrase, “through MoLF” between the words “Bank”
and “following” in the third sentence.
10. Paragraph 5.3.5: Replace the words, “beneficiaries will be involved in” with the phrase, “activities would include” in the first line, insert the word, “and” before the word “Training” in the third line, and insert the word, “of” after the words “as well as” in the third line.
11. Paragraph 5.5.1: Replace the word, “two” with “three” and “other” with “others”
in the third sentence. Also delete the word, “Matching” in the second bullet.
12. Paragraph 5.5.2: Replace the phrase, “on a quarterly basis” with the word “annually” at the end of the penultimate sentence.
13. The last sentence at the bottom of the Map of the Project area should
read, “The names used and the borders shown do not imply on the part of the Bank and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders.” And the first word in the legend of the map should read, “Western”.
