Documentof TheWorldBank FOR OFFICIAL USEONLY ReportNo. 44941-GW FOODPRICE CRISISRESPONSETRUST FUND EMERGENCY PROJECTPAPER ONA PROPOSEDGRANT UNDERTHE GLOBAL FOODCRISISRESPONSEPROGRAM INTHE AMOUNT OFUS$5.0MILLION TO THE REPUBLIC OF GUINEA-BISSAU FORAN EMERGENCY FOOD SECURITY SUPPORT PROJECT September9,2008 AgricultureandRuralDevelopment CountryDepartmentAFCFl AfricaRegion This document has a restricteddistribution andmaybe usedbyrecipients only inthe performance of their official duties. Its contentsmaynot otherwise bedisclosed without WorldBank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective July 31,2008) Currency Unit = CFA franc (CFAF) US$ 1 = CFAF413.85 FISCALYEAR January 1-December 31 ABBREVIATIONSAND ACRONYMS AH1 Avian and Human Influenza CAIA Environmental Impacts Assessment Unit (of the Prime Minister's office) CAS Country Assistance Strategy CBMP Coastal and Biodiversity Management Project CDD Community DrivenDevelopment CFA Communauti FinanciBreAfricaine (Financial Community of Africa) CGIAR Consultative Group for International Agriculture Research CPI Consumer Price Index CPIA Country Policy and Institutional Assessment CSB Corn Soya Blend DENARP Guinea-Bissau Poverty Reduction Strategy Paper (PSRP) DP DevelopmentPartner ESMF Environmental and Social Management Framework EFSSP Emergency Food Security Support Project EPP Emergency Project Paper ESW Economic Sector Work EU European Union FA0 Food and Agriculture Organizationof the UnitedNations FFW Food for Work (WFP) FIAL Fundo de Initiatives Ambientais Locais (Local Environmental InitiativesFunds) FM Financial Management FPCR FoodPrices Crisis Response FY Fiscal Year GB-FCRP Guinea-Bissau FoodCrisis ResponseProgram GDP Gross Domestic Product GEF Global Environment Facility GFRP Global FoodCrisis ResponseProgram GoGB Government of Guinea-Bissau HIPC Heavily IndebtedPoor Country IDA International DevelopmentAssociation (World Bank Group) IFAD International Fundfor Agricultural Development IFRs Interimun-auditedFinancial Reports IITA International Institute for Tropical Agriculture IMF International Monetary Fund IPSA IntegratedPoverty and Social Assessment IRRI International Rice ResearchInstitute 11 ISR Implementation Status Report LICUS Low Income Country Under Stress M&E Monitoringand Evaluation MARD MinistryofAgriculture andRuralDevelopment MDG MillenniumDevelopmentGoal MIS Management Information System M O U Memorandumof Understanding NGO Non-Governmental Organization PDO Project DevelopmentObjective PER Public Expenditure Review PIU Project ImplementationUnit PRRO Protracted Reliefand Recovery Operation(WFP) PRSP Poverty Reduction Strategy Paper PSC Project Steering Committee PSRDP Private Sector Rehabilitation and Development Project SOE Statement of Expenditures TCU Technical Coordination Unit TF Trust Fund TOR Terms o f Reference WARDA West African Rice DevelopmentAssociation (Africa Rice Center) WBI World Bank Institute WFP World FoodProgramme WHO World Health Organization Vice President : ObiageliKatrynEzekwesili Country Director (acting) : Antonella Bassani Sector Manager ; KarenMcconnell Brooks Task Team Leader : Aniceto Bila ... 111 FOR OFFICIAL USEONLY This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization. GUINEA-BISSAU Emergency Food Security Support Project CONTENTS Page Emergency OperationProject Data Sheet .......................................................................................... v A. Introduction ........................................................................................................................... 1 B. Country Context, Recovery Strategy and Rationale for Emergency Project ........................ 1 C. Bank Responseand Strategy ................................................................................................ 6 D. Appraisal o f Project Activities, Benefits, and Risks ........................................................... 12 E. Implementation Arrangements andFinancingPlan ............................................................ 15 F. Risks ................................................................................................................................... 20 G. Terms and Conditions ......................................................................................................... 22 Annexes Annex 1: Description of Project Components and Implementation ................................................ 24 Annex 2: Results Framework ......................................................................................................... 29 Annex 3: Summary o f EstimatedProject Cost ................................................................................ 32 Annex 4: Financial Management and Disbursement Arrangements ............................................... 33 Annex 5: Procurement Arrangements .............................................................................................. 45 Annex 6: Implementationand MonitoringArrangements ............................................................... 51 Annex 7: Project Preparation and Appraisal Team Members .......................................................... 56 Annex 8: Guinea-Bissau at a Glance ............................................................................................... 57 Annex 9: Guinea-Bissau Map .......................................................................................................... 59 iv EMERGENCY OPERATIONPROJECTDATA SHEET Guinea-Bissau EmergencyFood SecuritySupportProject AfricaRegion Date: September 9, 2008 1Team Leader: Aniceto Bila Country Director (Acting): Antonella Bassani Sectors: Agriculture, Social Protection Sector Manager: KarenMcconnell Brooks and Education Lendinginstrument: Emergency Operation Themes: Agriculture, SocialProtection and Education Project ID(s):P113468 Total Amount: US$5.0million Proposedterms: Grant (from FPCR Trust Fund) Expectedimplementation period: 3 years Expectedeffectivenessdate: Expectedrevised closing date: September20,2008 September 30,201 1 Borrower: Responsibleagency: Government of Guinea-Bissau Component 1:World FoodProgramme (WFP) Component 2 and 3: Ministryof Agricultureand Rural Development Borrower Total IBFWIDA Trust Funds 3.5 1.5 5 .O Others Total 2009 2010 2011 2012 2013 2014 Total IBRD/IDA Trust Funds 1.o 2.0 1.5 0.5 V Does the emergency operation require any exceptions from Bankpolicies? Yes [ X I No [I Have these been approved by Bank management? Yes[X] No[] Are there any critical risksrated "substantial" or "high"? Yes[X] N o [ ] What safeguard policies are triggered, ifany? Environmental Assessment (OP 4.01) Pest Management (OP 4.09) A. Boardcondition: none B.Effectiveness condition: appointment ofTechnical CoordinatingUnitcoordinator satisfactory to IDA. C. Disbursement Conditions: For Component 1 0 Disbursement Conditions for purposes o f Category (1) inthe agreementto be entered with the World FoodProgram: The Government of Guinea-Bissau will have signed a letter of understanding with WFP settingforth the scope, modalities, targeting of beneficiaries, and other matters for implementation of component 1. D.LegalCovenants For Component 2 0 Not later than 30 days after effectiveness: o EstablishaProject Steering Committee o EstablishaTechnical CoordinationUnit o Prepare draft Annual Action Plans to be submittedto the World Bank andthe Project Steering Committee for approval o Preparethe Project Operations Manual 0 Not later than October 31eachyear the Recipientshall: o Preparea Communication Strategy 0 Not later than 3 months after effectiveness the Recipient shall: o Select three project coordinators for the regional offices for purposesofcarrying out Project activities o Prepareand disclose the EnvironmentalandSocialManagementFramework (ESMF). vi GUINEA-BISSAU EmergencyFoodSecuritySupportProject A. Introduction 1. This emergency project paper (EPP) proposes support for a Guinea-Bissau Emergency FoodSecurity Support Project (EFSSP) inthe amount o f US$5 million to be financed from the FoodPrice Crisis Response - Trust Fund(FPCR-TF). 2. The proposed EFSSP would help finance short- and medium-termactivities to mitigatethe impact of risingfood pricesin Guinea-Bissau as a result of the globalfood price trends. The project would help the Government o f Guinea-Bissau's response to the food crisis and will include three components: (i) support to improve food security for the most vulnerable population through school feeding and food for work programs; (ii) support for the country's Emergency Plan for the Agricultural Campaign 2008-2010 proposedby the Ministry of Agriculture and Rural Development (MARD) to increase food production and productivity, with a particular focus on rice; and (iii) coordination, monitoring and project evaluation. The proposedProject is expected to be completed over a period o f three years. 3. The EFSSP was formulated in the context of the Government's own strategic response to the food crisis and constitutes the Bank's contribution to ajoint UNresponse. Donor co-financing o f the project components is not anticipated at this time. However, certain activities will be implemented by partners within the UNframework and this is likely to result in significant contributions from these partners. Due to the emergency nature o f the food crisis, the proposed project was prepared under OP/BP 8.00 guidelines that provide the Bank's policy framework for arapidresponse to the food crisis inGuinea-Bissau. B. CountryContext, RecoveryStrategyand Rationalefor EmergencyProject B1 CountryContext 4. Guinea-Bissau is a fragile state emerging from a post-conflictsituation. Ranked 175th out o f 177 countries on the 2007/08 UNDP Development Index, the country is not likely to reach any o f the MDGs by 2015 without significant donor support. It i s estimated that three fifths o f the population live inpoverty'. Poverty i s concentrated inrural areas, with a rate o f 64 percent compared to 46 percent inurbanareas. Since 30 percent o f the population (about half a million) live in urban areas (mostly in the capital Bissau) and many are net buyers o f food with food being a significant proportion o f their consumption basket, rising food prices are eroding real incomes and pose risks o f increasing poverty and political instability. Similarly, for the rural poor, net food buyers risk being thrown into deeper poverty, unless appropriate measures are taken to help boost their capacity for increased staple food production and productivity. World Bank (AFTP4): IntegratedPovertyandSocialAssessment, (IPSA) Vol. 11, Conflict, Livelihoods and PovertyinGuinea-Bissau; May 2006. 1 5. Guinea-Bissau has recently made progress in stabilizing its macroeconomic situationunder difficult circumstances, and is movingsteadily to implement structural reforms. The country's performance on the EPCA-supported program has been good. The fiscal situation improved in the first part o f 2008 and the country i s making progress in advancing reforms in the areas o f expenditure control and revenue collection. However, the macroeconomic situation remains difficult, with a high primary fiscal deficit (-10.8 percent o f GDP in 2007), a high external debt (about 400 percent o f GDP) and internal debt burden (including arrears on civil servant salary payments accumulated since the conflict), and low GDPgrowth (2.7 percent in2007). Inaddition, the recent surge inworld food and fuel prices i s puttingpressure on the already tight fiscal situation. 6. The economy is predominantly agricultural, with cashews accounting for approximately 98 percent o f export revenues and 17 percent o f government revenues. Other export cash crops include peanuts and coconuts. Food crops are cultivated largely for subsistence purposes and comprise rice (the country's main staple), sorghum, millet, maize and cassava. Rice is grown both in swampy coastal areas (mangrove rice) and in drier savannah areas (upland and lowland rice). Subsistence food crop production accounts for about 46 percent o f the country's GDP and employs over 80 percent o f the local workforce. 7. Guinea-Bissau has good agro-ecologicalconditions but weak capacity. Despite fertile soil and good rainfall, Guinea-Bissau is handicapped by weak institutional capacity, poor agricultural practices, inadequate and irregular input supply (ie., seed, fertilizer, pesticides and credit), lack o f small farm equipment - especially for cultivation and post- harvest operations, weak agricultural research and extension support and lack o f a well- defined rice policy. These constraints, combined with poor infrastructure and severely limited integration with markets, undermine the country's capacity to attain food security. 8. Food represents more than a third of total imports. Rice constitutes about 50 percent o f food imports for Guinea-Bissau. Rice, the main staple food, also accounts for 37 percent o f the value o f food consumption and about 40 percent o f daily calorific intake o f the average household. According to IRRI, Guinea Bissau's rice consumption per person per year i s estimated at 87.3 kg in 1999. With a population currently estimated at 1.6 million and, usingcurrent rice consumption rates per personper year, the country requires approximately 140,000 tons o f rice annually to reach national rice self sufficiency. The national rice production in 2007/08 was estimated to be 85,000 tons o f clean rice, implyingthat domestic rice production in 2007108 accounted for only about 60 percent national rice consumption. The increasing and large rice deficit is generally met through imports and food aid. Rice production, however, can be considerably increased by following both extensive and intensive approaches. When current production i s measured against national requirements, this suggests Guinea-Bissau requires an average o f 55,000 tons o f additional rice production annually to become self-sufficient. With the price o f rice almost doubling in international markets between 2007 and 2008, import cost have increased significantly for Guinea-Bissau and made the country extremely susceptible to the consequences of highfood price inflation. Furthermore, the country faces weather-related shocks such as erratic rains, which have serious implications for food production, particularly rice. 9. The rice deficit has been filled by barter transactions between rice and raw cashew nuts startingin 1984. Inrecent years, more cash has been entering the value chain o f cashew production, but the cashew-rice nexus and barter system still persists. This is 2 particularly dominant during the early stages o f the cashew season, which is the most acute part o f the dry season. Today, between 50 percent and 70 percent o f all imported rice i s likely to be part o f the barter transactions. While there are upsides to the barter system, in that it helps address the primary needs access to rice - o f households particularly inthe early parts - o fthe cashew harvest season, it often means that money i s not entering the value chain at this level, and small farmers do not get to benefit from the value o f the cashew that they produce. Moreover, the price o f cashew, which is Guinea-Bissau's main export, has not kept pace with recent increases inthe price o f rice. Economicand SocialImpactof the Crisis 10. Guinea-Bissauhasbeenhardhit by risinginternationalfood andfuel prices.The country's 12-month inflation rate rose to 9.3 percent by end-2007, from 3.2 percent at end- 2006, driven mainly by a 14 percent rise in food prices. Annual inflation has remained high in2008, at 9.1 percent at end-May, while food prices rose by 15.5 percent duringthe period. Consumer prices for rice, the most important and preferred staple food, reportedly have risen from 250 CFAFkg (US$0.61, at current exchange rate) to 430 CFAFkg (US$l.05) over the last few months. The inflationary trend i s likely to persist over the medium term. For 2008, annual average inflation is now projected at about 7 percent, as compared to the initial projection o f 3.3 percent. Labor unions are exerting pressures to raise wages, since nominal wages remain fixed for more than three years. Given the large share o f the poorest group's consumption basket on food expenditures, the increased food prices are likely to increase poverty levels and affect food security for the vulnerable part o f the population. Also, the fiscal costs o f the tariff reductions granted for imports o f rice and fuel since March 2008 are estimated to be approximately US$7.3 million. 11. Given that 62 percent of the populationis below the poverty line and that rice constitutes an important share of the consumption basket, measures to mitigate the impact of food price increases are particularly needed for the vulnerable population. Many urbandwellers are more vulnerable to the food and fuel price increases because they cannot survive in subsistence agriculture. This refers both to the current food and fuel price increases. The latter will affect the urban poor through higher transport costs. Economic activities, and thus employment opportunities, are also likely to be negatively impacted by increased fuel prices inurban areas. 12. In rural areas, the currently rising prices for rice have a twofold effect. First, they risk further reducing the value local farmers might be able to get for bartering their cashew harvest for rice, as the price o f cashew nuts has not kept pace with that o f price for rice. Duringthe lean season in 2007, it was reported that 43 percent o f people inrural areas were without adequate food and about 20 percent o f the population o f 1.6 million received food aid. Current reports suggest that the situation is worse this year. Secondly, in a positive sense, the higher rice prices constitute an incentive for farmers to engage in rice production for improved both food security and household income. These positive incentives can be furtherenhancedbyadequate supportive measuresproposedunderthis project. 3 InstitutionalandCapacityIssues 13. Guinea-Bissau is recoveringfrom years of political instability and the legacy of the internal conflict of 1998/99. In 2006, the Government formulated a full Poverty Reduction Strategy (DENARP), but its capacity for implementation o f both policies and programs remains extremely weak. In particular, while some progress has been made in terms o f Government leadership on the policy and strategy, its capacity to mobilize financing and to implement development programs remains very weak. The strengthening o f institutional capacity has begun through financial and technical assistance from development partners, including the World Bank. The Bank has focused on buildinginstitutional capacity, particularly for economic governance in the Ministry o f Finance through a LICUS Trust Fund. This source o f funding has also helped the PRSP Inter-Ministerial Committee to coordinate PRSP monitoring and establish working groups. The IDA-funded Coastal and Biodiversity Management Project (CBMP) is providing support strengthening the Environmental Impacts Assessment Unit (CAIA) under the Prime Minister's Office. The World Bank Institute (WBI) also stands ready to launch new activities, in particular: a leadership development program, a set o f activities for enhancing social accountability o f non-traditional Bank partners, and a country diagnostic on governance and the country's political economy. B2 GovernmentResponseto the Crisis 14. In June 2008, the government elaborated an Emergency Plan for the Agricultural Campaign of 2008-10, in close collaboration with UNagencies like the Food andAgriculture Organization (FAO) andthe World FoodProgramme (WFP). This planaims to ensure immediate availability, access and stability o f staple food to ensure food security in the country through: provision o f seeds 0 provision o fproduction tools 0 creation o f phyto-sanitary stocks 0 provision o f fertilizers 0 re-launching o f seedproduction 0 introductiono f an early warning system, and 0 support to improved monitoring and evaluation systems. 15. Inaddition, sinceMarch2008, allrice importshavebeentemporarily exempted from import taxes2 and customs fees have been reduced on diesel imports-using below-market reference prices for taxation purpose^.^ These are meant to be temporary measures aimed at mitigating the impact o f the food price increases till an agricultural supply response (particularly for rice) takes place. * Riceimportspayonly WAEMU-relatedtaxes (at a rate of about 2.5 percent). The reference price for calculatingimport duties on fuel productshas beenabout 77 percent of the estimatedCIF price, while the reference price for rice import duties hasremained unchangedfrom the 2007 leveland is well below actual import prices. 4 DevelopmentPartners'Strategiesand Programs 16. Intensive discussions on support for the government's efforts in responding to the crisis have taken place amongst the Thematic Group on Food Security, Rural and Agricultural Development, coordinated by WFP and FAO, and comprising government agencies and key development partners. 17. Donorswith existingor proposedinterventionsof relevanceinclude the FA0with a special Program on Food Security, including activities for the distribution o f seeds for food crops (rice, coconut), tools for transformation o f cashew nuts in 120 villages (cutting, nut extraction, conservation, diversification o f agriculture in close collaboration with Italy). A FAO-supported project on the development o f peri-urban agriculture (in close collaboration with Spain) is mostly targeting youth and women and small livestock production. The African Development Bank has set up a Project for the Rehabilitation o f the Agricultural andRural Sector (covering 5 regions inthe West andthe Northo fthe country andplannedto be implemented until 2010), covering basically rice production, horticulture production, small livestock, together with cross-cutting activities like trade and marketing, rural mud roads ("pistes rurales") and micro-finance institutions. The International Fund for Agricultural Development (IFAD) is preparing a similar project for the South o f the country. The EU will provide substantial support to the System for Agricultural Statistics (SISA, Systeme d'hformation Statistique Agricole) in the period o f 2008-10. The World Food Programme (WFP) is currently implementing a Protracted Relief and Recovery Operation (PRRO) which i s targeting needy segments o f the population in regions identified as most food insecure, namely regions o f Oio, Bafata and Gabu. These regions are also identified as the highest vulnerability to food insecurity, highest acute malnutrition rates and lowest primary school enrolment rates. These regions constitute the core regions where 85 percent o f WFP food assistance has been targeted. Other regions have been receiving limited support. 18. The WFP PRRO,with totalbudgetofUS$14.6 million,was approvedinJanuary 2006 for an initial period o f 2 years. PRRO was scheduled to close in December 2007, but due to the continued need for food assistance to Guinea-Bissau the project has been extended for another year, until December 31, 2008. For this purpose, WFP approved additional US$1.16 million under PRRO to cover additional imports o f 1,600 metric tons o f food commodities and all operational costs for 2008. The additional support is being used mainly on WFP's intervention in education and food-for-work, WFP's intervention inthe education sector, through assistance to school feeding programs and take-home rations for girls has proven its effectiveness in increasing admissions in schools and reducing the gender gap. As a result, a Memorandum o f Understanding (MOU) was signed between WFP, UNICEF, FA0 and PLAN International on November 2006 to cover additional schools inBafata, Gabu, and Oio regions. WFP plans for 2008 are to increase the number o f pre-schools and primary school children assisted from 88,000 to 130,000 beneficiaries. By extending the assistance to additional schools inthe same regions. WFP plans also to enhance its partnership with other institutions in those regions, which will cause an increase o f the numbers o f school children under assistance, Related to food-for-work, W P is targeting 90,000 beneficiaries in Oio, Quinara and Tobali regions this year through FFW activities. The 2008 program also covers other areas such as health and nutrition, and capacity building. On the latter, WFP will continue working with the MARD, and Ministry o f Health on the implementation and 5 monitoring o f WFP assistance. In addition, WFP will provide a regular capacity building training sessions to government partners at the national and regional levels and to NGOs partners in providing food aid. WFP will reinforce its partnership with (i) UNICEF, FAO, PLAN Guinea-Bissau in School feeding Program component; (ii)WHO, UNICEF in the nutrition activities; and (iii) FA0andEuropean Unioninthe food security matters. 19. The WFP will continue to provide food assistance to Guinea-Bissau in the coming two years, andhas prepared a new Protracted Relief andRecovery Operation (PRRO) for the next two years, from January 1, 2009 to December 31, 2010, estimated to cost US$21.0 million. It i s anticipated that this program will purchase about 16,180 mt o f food and will benefit about 559,400 people. About 95 percent o f the beneficiaries will be under school feeding program and food for work programs. The proposed program is designed to extend the ongoing program and extend the coverage, where appropriate. The main elements o f the proposed program are (i) the school feeding program (approximately 180,000 beneficiaries in year 1 and 196,000 beneficiaries in year 2); and (ii)the food for work program (approximately 90,000 beneficiaries in each o f the two year program). Funding i s not yet fully secured but the probability is very high that the proposed funding will be made available to the program. C.BankResponse:The Project C1. The Bank's strategy for emergency support is aligned with the Government's strategic approach. 20. The Bank emergency program focuses on measures to address the short and medium term implications o f the global food crisis for Guinea-Bissau. The proposedprogram reflects the Bank's comparative advantage and builds on current strengths -including its existing portfolio o f programs in Guinea-Bissau- and is cognizant o f proposed responses o f Government and other Development Partners (DPs). It is also fully consistent with the Bank's Global FoodCrisis ResponseProgram(GFRP). Inthis context, it shouldbe noted that Guinea-Bissau is very fragile and unable to reallocate existing IDA resources for this project, since IDA supports only a limited number o f quite critical core interventions with no flexibility for reallocation in light o f the very small overall IDA allocation. Thus, the food crisis interventions are proposed to be financed out o f the newly created Food Price Crisis Response Trust Fund. 21. Specifically, the Bank would support the proposed Guinea-Bissau Emergency Food Security Support Project (GB-EFSSP) in the amount o f US$5 million from the new Food Price Crisis Response Trust Fund. The proposed financing would support both short and medium-term activities to support the most vulnerable population and to increase small- holders' rice production andproductivity. The implementation o f the proposed project would be inpartnership with WFP and incollaboration with the FAO. C2. ProjectDevelopmentObjective 22. The objective o f this project is to improve food security for the most vulnerable population, including children, and increase smallholder rice production inproject areas. 6 C3. Summary of ProjectComponents 23. The project would help the Government o f Guinea-Bissau's response to the food price crisis and will include three components: (i) support to improve food security for the most vulnerable population through school feeding and food for work programs; (ii) support for the country's Emergency Plan for the Agricultural Campaign 2008-2010 proposedby the MARDto increase foodproduction andproductivity, with aparticular focus onrice; and(iii) project coordination, monitoring and evaluation. The proposed Project i s expected to be implementedover a period o f three years andwill focus on six regions inthe country, Bafata, Biombo, Bissau, Cacheu, Gabu and Oio. Component1:Supportfor the MostVulnerablePopulation(US$1.5 million) 24. This component will be implemented by the WFP and is designed to support the most vulnerable populationthrough (i) a school feeding program; and (ii)food-for-work program a to rehabilitate land under rice. Since the WFP program i s already under implementation, channeling fbnds from this project through the WFP will very efficiently and quickly allow providing an emergency response to meet the needs o f the most vulnerable population o f Guinea-Bissau. Using the existing WFP framework and partners will also minimize the implementation delays as well as the risk o f elite capture. The WFP will enter into a specific Grant Agreement with the Government o f Guinea-Bissau and with the World Bank for the implementation o f Component 1. The implementation period o f this component will be for one year for the school feeding program (October 20, 2008 to September 20, 2009) and two years for the food-for-work program (October 2008 to September 2010). 25. WFP has been selected to implement this component due to its in-country experience accumulated during the implementation o f the ongoing Protracted Relief and Recovery Operation (PRRO) since 2006. The PRRO i s expected to be extended up to December 31, 2010. The main objective o f the WFP programs under implementation i s to: increase enrolment and attendance rates, especially for girls, at pre-primary andprimary schools inthe most vulnerable areas o f the country (through the school feeding program); improve household food security in target areas through the rehabilitation o f land and creation o f community assets (through the food for work program); and strengthening capacities o f government and local NGOs to establish and manage food-assistance and hunger-reduction programs. 26. In terms of overall food purchase for the next two years, this component will purchase about 930 mt o f food commodities for both programs (school feeding program and food for work), which represent 5.4 percent o f overall WFP projected food commodities purchase for the same period 27. Sub-component 1.1: School Feeding Activities (US$O.S million). The sub- component will support school feeding for pre-school andprimary school students intargeted regions. It will support the ongoing WFP project, adopting the same implementation modalities. The school feeding activities will be funded for one school-year only, and are expected to serve about 14,000 additional students in 95 schools within the six regions covered by the proposed project, which would expand the coverage o f the WFP school feeding program by around 11 percent, relative to the current targets for 2008. The food basket will contain cereals, corn-soya blend (CSB) food, pulses, vitamin A-enriched 7 vegetable oil, sugar and iodized salt. Two meals will be served in the pre-primary and primary schools, including porridge in the morning and a hot meal at noon for lunch. In addition, the proposed program will provide "girls take home rations". Overall, the proposed activities are expected to have a positive effect on the nutrition o f participating students as well as school attendance and performance o f those students. Furthermore, it i s expected that school feeding activities will have a positive impact on school attendance o f girls, as a result o f the distribution o f take-home rations for girls. 28. Sub-component 1.2: Food-for- Work to increasefood production (US$l.O million). The food-for-work activities will support the rehabilitationo frice landby rehabilitating dikes for mangrove rice (about 2,000 ha) and drainage channels and anti-erosionbanks for lowland rice (about 3,000 ha). This program is expected to provide employment opportunities to rural dwellers (about 160,000 work days) and rehabilitate much needed rice land in order to facilitate an increase in rice production. Part o f the beneficiaries from the food for work program will be women. WFP assistance program i s projected to benefit 180,000 beneficiaries. This sub-component would expand WFP coverage under food for work by only 2 percent. The first harvest on the rehabilitated land will be in November 09 with an estimated production o f 2700 tons o fpaddy rice. Overall it i s excepted it is expected that this rehabilitated landwill produce about 7,500 tons o f paddy rice annually, at the end o f the third year, worth about US$5 million. This sub-component is likely to reduce the current national deficit by about 8 percent, Inputs will be purchased in the local market or through partnerships with NGOs operating in the project area. The rehabilitation o f dykes and drainage channels i s expected to start soon after project effectiveness to ensure that enough landisprepared for plantinginthe next seasonbeginningMay 2009. Component2: Supportfor IncreasingFood Production(US$3.0 million) 29. This component will be implemented by the MARD through a Technical Coordination Unit (TCU) and it is designed to provide (i)matching grants to smallholder farmer groups aimed at increasing food production; and (ii)to strengthen the technical capacity o f the MARD to assist smallholders and their organizations. While the project would support diversification and production o f all food crops, the main focus o f intervention will be to increase rice production. 30. Sub-component 2.1: Matching Grantsfor Food Production (US$2.5 million). This sub-component will provide demand-based support, in the form o f matching grants to communities and smallholders f m e r groups, for small-scale agricultural infrastructure, production, processing and marketing sub-projects that would deal with rice and other staple food crops only (i.e. no cashew). The key results expected from the implementation o f this sub-component are (i) increased adoption o f new technology to enhance production o f food crops, particularly rice; and (ii) increased assistance to smallholder production activities and access to agricultural markets through provision o f matching grants. Increased adoption o f new technologies will be achieved through assistance o f about 500 smallholder farmers groups to adopt new technologies. Increased assistance to smallholder production and access to markets through provision o f resources for production and marketing through the matching grants. 8 31. The demand-based matching grants approach is currently being used in Guinea- Bissau under three projects: CBMP funded by the Bank, GEF and EU; Project0 de Reabilitaq6o Social do Sector Agrario funded by the AfDB; and by Community Support Program funded by the EU. These programs developed simple methodologies that allow communities to prepare sub-projects with support from NGOs for fimding. The demand based matching grants have been successful since they respond to community needs and use simplified procurement procedures. In addition, they involve community during the preparation and implementation. The EFSSP will adopt these methodologies for the implementationo f this sub-component. 32. It is expected that this component will support 500 smallholder farmer groups already engaged inproduction to adopt new technologies to increase production and productivity by providing agricultural inputs and seeds. Assuming smallholder groups with about 20 farmers (each with 0.5 ha o f land), this sub-component can produce additional 10,000 tons o f paddy rice (as a result o f the support by the project), which can contribute to reducing the deficit by 10 percent. The main source o f increase in rice production would be (i) increase in area an under rice, and (ii)an increase in rice yields by providing improved inputs and technical assistance. Inaddition, these sub-projects are expected to increase production o f other food crops as well as reduce losses o f crops through improved post-harvest management, including storage. 33. The sub-projects to be funded under this sub-component will be initiated upon the request o f communities and smallholder groups and will be prepared with the assistance o f NGOs that will be trained and equipped for this task. Further details on the sub-project screening and approval criteria, are provided inAnnex 1. Eligibilitycriteria for participation in the project by beneficiary groups will be provided in the Operations Manual. The smallholder farmer groups will make in-kind contribution o f at least 10 percent to the matching grants. The ratios and funding ceilings may be reviewed periodically and recalibrated to take into account the changing circumstances and lessons learned during implementation. 34. Smallholder groups will be eligible to receive support, provided that the sub-project proposals result from a community-level participatory planning exercise involving a cross section o f the population, including women. Smallholders groups or associations will also be eligible for support, provided that these are either formally registered or informally recognized by the local community and authorities, and have the ability to keep records. Duringimplementation, the eligibility criteria would be further refined and strictly followed to avoid elite capture o f these groups. The project implementation operations manual will include a positive and negative list o f activities to be supported by the project (see Annex 1). 35. Sub-component 2.1 will focus its activities in the regions o f Oio, Cacheu, Biombo andBissau (northern part o f the country), andBafata andGabu (eastern part o f the country). Details on the criteria for the selection o f the project areas for this sub-component are provided in Annex 1. The Northern areas represent the regions that have been most vulnerable to poverty, characterized by high levels o f food insecurity and a high proportion o f vulnerable groups, but also with a significant potential for long-tern sustainable development. 9 36. Sub-component 2.2: Technical Support (US$O.5 million). The objective o f this sub- component i s to strengthen the technical capacity of the MARD to assist smallholders and their organizations. The expected results under this sub-component include: (i)improved technical capacity o f the MARD to assist the beneficiary stakeholders involved in food production; and (ii) improved government capacity as a whole to support smallholder farmers inthe project area. This sub-component also takes a gender and vulnerable group sensitive approach to capacity buildingby targeting female smallholder farmers. 37. Smallholder groups will be supported by NGOs hired under the project as well as by MARD staff and the TCU. In addition to being responsible for project implementation, MARDwill particularly be involved inhighquality rice seedproduction, organizing farmer demonstrations dealing with new technology and management practices for rice and provision o f agricultural extension and farmer information. FA0 has arranged for the production o f about 85 tons o f rice seed during the forthcoming season, and has agreed to distribute free o f charge the seeds to farmers selected under this project. Furthermore, the project would strengthen the capacity o f MARD through training, technical assistance and limited equipment. The project may also request WARDA and IITA to provide high-quality technical assistance for increasing the production o f rice and other food crops, respectively. Component3: ProjectCoordination,MonitoringandEvaluation(US$0.5 million) 38. The objective o f this component i s to coordinate project implementation, monitoring andevaluationandthe resources inaccordance with the project objectives andprocedures. 39. Sub-component 3.1: Project Coordination (US$0.35 million). The MARD i s responsible for overall project implementation and has delegated the Department o f Rural Engineeringto be accountable for the coordination, management and oversight o fthe project in order to attain its objectives, as well as communications outreach. At the specific request o f the MARD, a T C U will be established within the Department o f Rural Engineering, but it will outsource the services o f financial management and procurement from the PIU o f the ongoing World Bank supported CBMP. 40. Sub-component 3.2: Monitoring and Evaluation (US$O.15million). Monitoringand evaluation focuses on data collection and reporting on key performance output and impact indicators, including data collection, surveys, participatory assessments and mid-term and final evaluations. A specialized monitoring and evaluation section will be set up within the TCU, and a management information system will be prepared to the satisfaction o f the World Bank. 41. Monitoring and evaluation will be carried out by the TCU, with support from the MARD Planning Office. An M&E specialist will be recruited in the TCU and will be responsible for: (i) overseeing data collection; (ii) storing, consolidating and analyzing data, and providing feedback at all levels (project coordinator, collaborating public institutions, farmers associations etc.); (iii) providing training on specific M&E tasks to colleagues and partners; and (iv) facilitating project management self-assessment during yearly and mid- term evaluation workshops. C4. Eligibilityfor Processingunder OP/BP8.0 10 42. Consistent with OPBP 8.00, the activities planned under the project are intended to address the impact o f what has been characterized as "a silent tsunami", the global food price crisis. The proposed project is designed to improve food security by supporting the most vulnerable population and increasing food production and productivity, with a particular focus on rice. The project will provide emergency support to the most vulnerable population through school feeding and food-for-work programs as well as critical support to increase food production andproductivity, with a particular focus on rice, inthe medium-term. 43. The success o f the activities financed under the project inthe time frame necessary to have an impact depends on the use o f flexible and accelerated procedures allowed under OPBP 8.OO, particularly with respect to project preparation, safeguards compliance, procurement, and financial management and disbursement arrangements. Without such a provision, the project resources would not be mobilized quickly enough to address the emergency food crisis needs o f the country. C5. Consistency with CountryStrategy 44. A new CountryAssistance Strategy (CAS) for the periodof FYO9-12, in linewith the pillars and objectives of the DENARP, is currently under preparation (Board Presentation is planned for late 2008). The new CAS will propose to concentrate on two pillars: (i)economic stabilization and revitalization, and (ii) service delivery basic - in parallel with a cross-cutting task on capacity building for institutional development, governance and communication. This response to the food crisis, while unforeseen, responds to the Government's and the Bank's continued focus on short-term economic stabilization and revitalization through improvements in agricultural productivity, particularly for food crops. C6. ExpectedOutcomes 45. The expected outcomes o f the proposed project are increased access o f vulnerable groups, including children, to food for consumption and increased food production and productivity (for rice as well as other food crops such as millet, sorghum maize and tubers). Over the medium-term, it will help provide a sustainable response to the impact o f higher world food prices to the population in both the rural and urban areas. Project outcome and output indicators, as well as monitoring and evaluation arrangements, can be found in the Results Framework inAnnex 2. 46. Specifically, it i s expected that about 14,000 students would benefit from the school feeding program in 95 schools and about 160,000 work days would be created under the food-for-work program. About 2,000 ha o f dikes for mangrove rice and about 3,000 ha o f drainage channels and anti-erosionbanks for lowland rice would be rehabilitated, allowing to produce about 7,500 tons o f paddy rice per year startingwith year 3. It i s also expected that about 500 smallholder groups will adopt new technologies aimed at increasing food production and productivity. In addition to rice, this will also help increase production and productivity for other food crops. Furthermore, food losses are expected to be reduced through improvedpost-harvest management methods to be supported by the matching grants. 11 D.AppraisalofProjectActivities D1.Technical 47. The Government o f Guinea-Bissau's underinvestment in agriculture and lack o f a coherent rice-cashew strategy represents a major impediment to rice production and food security. Volatility in international cashew prices has contributed to volatility in export and smallholder earnings. In recent years, smallholders grew cashew as a cash crop and used their earnings to barter for rice. This meant that increasingly land used for rice production was replacedwith cashew production. This strategy made sensewhen the farm gate terms-of- trade between cashew and rice favored the former. Inrecent years, with the almost doubling o f the price o f rice, the incentives would be in favor o f returningthe land to rice production. This, together with the serious food security challenges that Guinea-Bissau faces, implies that the country needs to diversify away from cashew into a more diversified food production (ie., rice, millet, sorghum, maize, cassava and sweet potatoes). 48. Staple food production (especially o f rice) can be scaled up through both area expansion andproductivity increases. Fundamental would be to ensure that staple production i s financially and economically remunerative, based on available crop and farm budgets, factoring inthe rising costs o f fertilizer. This requires a strong emphasis on increasing yields perhectare. Average rice yields inGuinea-Bissau are 0.9 ton per hectare for rain fed and 1.2- 2.5 tons per hectare for lowland and mangrove rice cultivation. In the case o f rain fed rice, the yields are considerably below the agronomic potential o f 2.5 tons per hectare for traditional rain fed varieties. Rice yields per hectare could be considerably increased by distributing modem varieties, such as NERICA, which can readily give 2.5 tons per hectare with low inputs and 5 tons per hectare with a minimum increase in fertilizer use. NERICA has other attractive features inthat it i s short maturing, allowing farmers to grow extra crops and can be saved and replanted, without having to purchase seeds annually. There are also local rice varieties that are highyielding and preferred by the local consumers (e.g. Cablock, Thom and Atanha varieties for mangrove rice and Banimalo and Sabel2 varieties for lowland rice). Inother words, high quality rice seed should be made available to smallholder rice farmers for NERICA as well as highyielding local rice varieties. 49. Concerted effort is needed to distribute and provide good agronomic advice on modem varieties o f rice and on appropriate fertilizer application, make available complementary agricultural implements to small-scale poor farmers to increase the productivity o f key food crops and rehabilitate degraded landand support small scale water structures. Depending on the specific local context, technical support and advice to farmers will be provided by using either farmer field schools through farmer-based organizations to deliver extension services or local NGOs, with experience on organizing and training farmers. Practical agronomic expertise could also be hired from experienced CGIAR centers, such as the West African Rice Development Association or Africa Rice Center (WARDA) and International Institute for Tropical Agriculture (IITA), to work with national agricultural institutions to disseminate good practices in the production o f these staples, on demand o f local communities. Expertise from Bangladesh, which has a unique experience in growing rice, may also be relevant for Guinea-Bissau. In addition to rice, planting material may be distributed for semi-traded food staples, like cassava and sweet potatoes. 12 D2.EconomicandFinancialAspects 50. The benefits from the proposed components dealing with food production are direct and indirect as well as short-term and long-term. Direct benefits will accrue from incremental yields per hectare as a result o f dissemination o f new knowledge, provision o f improved seeds and fertilizer application and as a result o f rehabilitation o f degraded land (mangrove rice and lowland rice). Indirect benefits would come from increased employment o f rural labor as well as increased employment o f agricultural technicians to assist with project implementation. Other indirect benefits may involve downstream and upstream employment triggered by project works and related to the crop value chain. The emergency nature o f this response precludes quantitative financial and economic analysis. However, the low current rice yields and high rice prices indicate significant potential for high rates o f return from investment in rice production. The project will support baseline data collection in its first year as part o fthe M&E to enable calculation o freturns at the project completion. D3.Fiduciary Component1 51. The Financial Management for component 1 will follow the Financial Management Framework Agreement (FMFA) signed on March 10,2006 between the World Bank and the United Nations. The WFP will prepare its annual budget forecast for Bank review and approval. WFP will handle all the financial management aspects usingits own procedures set out in the WFP Financial Regulations. It will maintain a separate account for recording the transactions relating to this project. As per FMFA, the Bank's audit requirements are met through the normal biennium audit to the WFP. Therefore, separate audited financial statements and audit reports from WFP for this project are not required. 52. The procurement arrangements for component 1 will also follow WFP procurement procedures. The Bank procurement and Consultant Guidelines will not be followed and the Bank will not exercise its regular procurement oversight through post and prior review. To mitigate any risks, the Bank will conduct intensified supervision o f the outcomes and results o f the project. In addition, the Grant Agreement between the Bank and WFP will contain alternative provision to the Bank standard clauses regarding audit, fraud and corruption consistent with the provisions insimilar legal documents between the Bank and WFP Components2 and3 53. Given the weak institutional capacity o f the MARD, the project will outsource the project-specific financial management and procurement arrangements from the ongoing CBMP PIU. The PIU o f the CBMP currently operates financial management (FM), procurement and disbursement procedures that are acceptable to the Bank. 54. The financial management and disbursement arrangements for this project will follow the arrangements agreed for the ongoing CBMP. These include: budgeting; accounting; internal control; flow o f funds; financial reporting; and external audit. The PIU has succeeded in recording, processing, preparing and submitting quarterly interim un-audited financial reports (IFRs). It has also succeeded in timely submission o f audit reports. During the mid-term review, some financial management issues (IFR not acceptable, weakness inthe monitoring o f budget and weakness in the internal control) were raised and an action plan 13 proposed to strengthen the financial management system. The Bank's FMteam will continue to intensify its supervision o f the projects inthe portfolio, including the proposed project; and provide FM implementation support to ensure that established financial management procedures are strictly adhered to and, where necessary, strengthened. As o f June 2008, the CBMP PIU complied with fiduciary requirements and continued to record transactions properly. Also, it has successfully submitted withdrawal applications in the format required by the Bank. An accountant will be hiredto specifically work on this project but under the technical supervision o f FMspecialist inthe CBMP PIU. 55. Procurement arrangements. Similarly to financial management, procurement activities will be handled by the PIU for the CBMP, inparticular the Local Initiatives Funds, (FIAL). The procurement activities will follow a specific procurement plan prepared by the borrower and agreed with the Bank during the project preparation. The implementation and the follow up o f all procurement activities to ensure timely response will be done in close collaboration with the MARD Department o f Rural Engineering. A procurement assistant, who has adequate qualification and experience, will be recruited on a competitive basis and positioned within the Department o f Rural Engineering. Hisher role will be to facilitate the procurement work with the Procurement Officer in CBMP PIU and supporting the Department on procurement issues directly related to producers' needs. D4. SafeguardsPolicies 56. The activities supported by the project are expected to have minimal environmental implications. However, because o f the likely use o f pesticides, the project has been rated as Category B and three safeguard policies are triggered; i.e. Environmental Assessment (OP 4.01), Natural Habitats (OP4.04), and Pest Management (OP4.09). To ensure compliance with Bank Safeguard Policies, the Government will be required to prepare and disclose in country and at the InfoShop an Environmental and Social Management Framework (ESMF), within three months o f effectiveness o f the Grant Agreement. The ESMF will formulate guidelines and procedures for environmental and social screening. It will also provide guidelines for pesticides use and management. In addition, the ESMF will discuss institutional arrangements for implementation o f safeguard measures, along with any capacity strengthening and awareness raising measures deemed necessary for relevant stakeholder groups involved in implementation and monitoring. The safeguards policies that are triggered for this project are summarizedbelow: 14 Projectson InternationalWaterways(OP/BP 7.50) X ProjectsinDisputedAreas (OPBP 7.60) X D5.LessonsfromExperience 57. The design o f the project takes into account lessons learned from the implementation of the Coastal Biodiversity Management Project. The most relevant lessons include: (i) Theimportanceofearly,decisive,andvisibleon-the-groundactivitiesbacked by sustained and unequivocal political commitment. In addition, the project allows beneficiaries to influence both project activities and implementation arrangements; and (ii) Effective project implementation requires good project management and intensive supervision, including b c t i o n i n g and sound monitoring and evaluation system. This i s particularly important in Guinea-Bissau, given the weak capacity and limited managerial experience. This is taken into account in the project design by establishing T C U to handle day to day implementation issues. D6. PolicyExemptions 58. The implementation o f component 1 will be undertaken by WFP. The WFP procurement and FM procedures will be applicable in place o f the Bank Procurement and Consultants Guidelines, and the Bank will not exercise its regular procurement oversight through post and prior review. To mitigate any risks, the Bank will conduct intensified supervision of the outcome and results of the project. In addition, the Grant Agreement between the Bank and WFP will contain alternatives provisions in similar legal agreements betweenthe Bank and WFP. E.ImplementationArrangementsandFinancingPlan El.ImplementationArrangements 59. Component 1 will be implemented by WFP whereas Components 2 and 3 will be implemented by the MARD. The project will be under the general oversight o f the Project Steering Committee (PSC), chaired by the Minister of MARD. The PSC will include 15 representatives from the Ministries o f Finance, Education, Social Affairs, and other relevant government entities. The PSC will be responsible for approving the annual work program and budget, providing necessary policy guidance to the TCU, addressing any emerging problems that are likely to affect project implementation and finally to provide oversight duringthe implementationo fthis project. 60. The coordination and technical implementation o f the project will be the responsibility o f a TCU, reporting to the MARD, specifically the Department o f Rural Engineering. The T C U will include a Project Coordinator, Agricultural Specialist, Communication Specialist, Safeguard Expert, and Monitoring and Evaluation Expert and other relevant positions to support project implementation. 61. At the regional level, the TCUwill include three regional offices, eachresponsible for two regions. The regional offices will have a maximum o f three staff, including a Regional Coordinator, and will collaborate with the Regional Agriculture Offices to facilitate implementation o f the project at the regional level. The project will finance the salaries o f externally hired staff, and limited technical assistance and training, office equipment and vehicles, and operational costs. The project will also finance the costs o f periodic financial audits. 62. Component 1 o f the project will be implemented by WFP under a specific Grant Agreement with the World Bank as well as the Government o f Guinea-Bissau. The WFP will implement the school feeding and the food for work programs, as part o f its ongoing program, which is expected to be extended up to December 31,2010. This i s the quickest way to respond and improve food security for the most vulnerable population, i.e. children and unemployed. While the program will improve food security for the beneficiaries, it is designed to rehabilitate dikes for mangrove rice and drainage channels for lowland rice, thereby expanding area under rice cultivation. WFP will report to the Bank and to the MARD through TCU but will follow its own FMandprocurement procedures. This will be specified inthe GrantAgreement andthe MOUto be signed betweenthe WFP andMARD. 63. Component 2 will be implemented by the MARD, with support from T C U and NGOs. In consultation with MARD, task team explored the possibility o f implementing the activities under the Matching Grants Program (component 2.1) directly by the Government or by FAO. Given limitedand weak capacity o f MARD and given the necessity to respond to the urgent needs o f smallholder's farmer groups, it was agreed that the appropriate activities proposed under component 2.1 would be implemented by the communities/smallholder farmer groups through a matching grants program, with the support from T C U and NGOs. FA0 does not have the capacity either to implement such a project in Guinea-Bissau but agreed to collaborate with MARD by supplying free-of-charge rice seeds to smallholder farmers selected under component 2.1 64. Component 2 o f the project will provide demand-based support, in the form o f matching grants to smallholder farmer groups, for small-scale production, processing and marketing sub-projects. The sub-project implementation arrangements include the following steps and elements: (i) Identification, which originates at the beneficiary level, through a facilitated participatory development planning exercise, resulting in an identified sub-project proposal. An NGO will be hired to support the formation and capacity building o f smallholder farmer groups and associations to identify and prepare sub-projects using 16 participatory planning exercises. The sub-project proposals, after approval by local smallholder committees, are submitted to the Regional Agriculture Office. (ii) Appraisal, the selected service providers (NGOs) will prepare the respective sub-project documentation for submission to the Regional Office. All sub-proj ects are screened for technical, financial, economic, social and environmental feasibility. With the consent of the Regional Agriculture director, the regional project coordinator submits the sub-project document to the TCU. (iii) Evaluation, all sub-project proposals are evaluated bythe TCU. This includes verification o f all eligibility and feasibility criteria. (iv) Approval, depending on the project cost, and based on criteria described in Annex 1, and the operations manual, the sub-projects will be approved or rejected. (v) Implementation, the TCU will be responsible for overall coordination for the implementation o f approved sub-projects. The FM and procurement services will be outsourced from CBMP PlU, with in-house capacity in T C U as well. Whenever possible andjustifiable, procurement will be done by the beneficiaries or with full involvement o f the beneficiaries through the local smallholder committees and the project will process the payments on their behalf. 65. While the actual implementation o f component 1 can begin as soon as the project becomes effective, the implementation o f component 2 will begin infull when the plantingo f next rice season starts, i.e. in May-August 2009 (the rice planting for the 2008 season i s almost complete). However, the implementation o f activities related to post-harvest management o f rice and other food crops for the 2008 season as well as production o f other food crops i s likely to happen as soon as the sub-projects are approved. Every effort would be made to select appropriate, existing smallholder farmer groups to save time, particularly for year 1. Inother words, the process o f preparation o f sub-project proposals can start soon after the project i s declared effective. 66. Simultaneous to the preparation of sub-project proposals, the TCU will make necessary arrangements to complete other activities as follows: 0 Establish Project Steering Committee, TCU, regional coordination offices, and prepare operations manual and communications strategy within 3 months after effectiveness; 0 Prepare, discuss, disclose and approve the Environmental and Social Management Framework (ESMF) within three months after effectiveness. 67. The recruitment o f the project coordinator is the condition for effectiveness and MARD has prepared the TORSfor the project coordinator and submitted to the Bank for review inmid-August. 68. Given shortage o f resources with MARD, these activities would be financed under the project. The FA0will collaborate with MARDto provide rice seeds at no cost under sub- component 2.1. This will be formalized through a memorandum o f understanding (see detailed implementationtimeline inAnnex 6 for further information). 69. Component 3- Project coordination, monitoring and evaluation, will be implemented by MARD. At the specific request of the MARD, a TCU will be established within the Department o f Rural Engineering and will be accountable for the coordination, management and oversight o f the project inorder to attain its objectives. 17 E2. ProjectCost 70. Summary costs by Categories are presented in the following summary table, and details are provided inAnnex 4. Total project cost is expectedto be US$5.0 million: US$1.5 for component 1; US$3.0 million for component 2; andUS$0.5 million for component 3. The project cost by expenditure categories is summarizedbelow: Category Amount of the Grant Percentageto be Financed Allocated(expressedin (inclusive of Taxes) USD) Component 1 1,500,000 100 J (1) Direct OperatingCosts for the School 465,000 100% FeedingProgram (2) Direct OperatingCosts for the Food- 937,000 100% for-Work Program (3) Indirect Support Costs 98,000 100% Component 2 2,500,000 (1) Goods, works, consultants' services, 2,500,000 100% Sub-grants under Subcomponent2.1 of the Project Goods, consultant services, and 500,000 100% operatingcosts under component 2.2 Component 3 500,O00 100% Goods, consultants' services 250,000 100% (Component3) Operatingcosts (component 3) 250,000 100% I I 5,000,000 I 100% I E3.FinancialManagementArrangements 71. Component 1. Financial Management arrangements with WFP will follow the Financial Management Framework Agreement (FMFA) signed on March 10, 2006 between the World Bank and the UnitedNations. The WFP will prepareits annual budget forecast for Bank review and approval. WFP will handle all the financial management aspects using its own procedures set out inthe WFP Financial Regulations. It will maintain a separate account for recording the transactions relating to this project. As per FMFA, the Bank's audit requirements are met through the normal biennium audit of the WFP. Therefore, separate 18 audited financial statements and audit reports from WFP for this project are not required. Upon effectiveness, the funds will be advanced to WFP as recipient on annual forecast to be submitted by WFP. Disbursements shall be made into a WFP Bank account that may be pooled with WFP resources. Replenishment o f the advance for the rest o f the period shall be based on the forecast and Interim Financial Reports (IFRs). 72. Components 2 and 3. The project will use the existing procurement and financial management arrangements o f the CBMP and its fiduciary responsibility will be borne by the CBMP Project Implementation Unit (PIU). However, the T C U will also hire a Procurement Assistant and an Accountant, which could eventually help transfer the fiduciary responsibility to MARD once the CBMP project closes (expected to close in 2010). The project will finance the salaries o f externally hired staff, limited technical assistance and training, office equipment and vehicles, project monitoring and evaluation costs, and operational costs, including incremental operational costs o f the CBMP PIU. The disbursements will be made through a Designated Account. While the account will be maintained under the MARD, payments will be issuedby the CBMP PIU. E4.ProcurementImplementationandArrangements 73. Component 1will be managed by WFP, while components 2 and 3 will be managed byMARDthrough TCU, with the support o fthe PIUo fthe CBMP. 74. In the implementation of component 1, the WFP procurement procedures will be applicable inplace o f the Bank procurement and Consultant Guidelines and the Bank will not exercise its regular procurement oversight through post and prior review. To mitigate any risks, the Bank will conduct intensified supervision o f the outcomes and results of the project. Inaddition, the Grant Agreement betweenthe Bank and WFP will contain alternative provision to the Bank standard clauses regarding audit, fraud and corruption consistent with theprovisions insimilar legal documents betweenthe Bank andWFP. 75. Similarly to financial management, procurement activities for components 2 and 3 will be handled by the CBMP PIU, and follow the procedures and arrangements established inparticular for the LocalInitiatives Funds,FIAL.The procurement activities will follow the specific procurement plan prepared by that has been prepared by the Recipient and agreed with the Bank during the project appraisal. The implementation and the follow up o f all procurement activities to ensure timely response will be done in close collaboration with the MARDDepartment o f Rural Engineering. A procurement assistant, who has adequate qualification and experience, will be recruited on a competitive basis and positioned within the Department o f Rural Engineering. Hisher role will be to facilitate the procurement work with the Procurement Officer inCBMP PIU and supporting the Department on procurement issues related to this project. E5. Arrangementsfor BankSupervision,MonitoringandEvaluation 76. As required under the OP/BP 8.00, the shift from ex-ante risk mitigation and control measures requires task team to intensify supervision efforts through frequent missions and ex-post reviews. The project will have a minimum o f four supervision missions per year: two missions covering fiduciary aspects and two full-fledged missions covering all aspects o f project implementation. 19 77. The duration o f the project will be three years. Component 1 will be completed within 24 months, i.e. by September 14, 2010, and implementation o f components 2 and 3 will be completed in 36 months; i.e. by September, 2011. The mid-term review will be carried out 18 months after project effectiveness. The project will close on September 30, 2011. 78. Impact assessment surveys will be undertaken and they are aimed to collect information about project's contribution to the enhancement o f participant smallholder fanners' agricultural production and income as well as to appraise how this i s distributed by gender, social groups and geographical area. F.ProjectRisksandMitigationMeasures 79. Due to the emergency nature o f the proposed interventions, this project was prepared with great speed. As a result, the assessment o f the implementationreadiness o f the various components was not as comprehensive as it would otherwise be. Consequently, in order to minimize the implementation risks, some o f these implementation requirements will be further refined during implementation. These actions include the fine-tuning o f the targeting mechanisms (eligibility criteria) and identification o f the target beneficiaries; preparation o f terms o f reference for hiring NGO and T C U staff; preparation o f Terms o f Reference for hiringtechnical support staff; andpreparation, discussion anddisclosure o fEnvironment and Social Management Framework (detailed timetable is shown inAnnex 6). 80. The specific country, sector and project operational risks that could jeopardize the success o f the program and individual components are summarized in the following table, along with the mitigating measures. Rating Riskfactors DescrZptionof risk Rating of Of rhk Mitigation measures residual risk I.Country-and `ector-LevelRisks Macro- + An IMF-financedEPCA is under H economic exogenousshocks, including climateshocks and implementation andis currentlyon track. This framework commodity price volatility (notably food andoil programwill help build atrack record for a PRGF price increases). andthe achievement of the HIPCcompletionpoint + The country i s facing significant which is expected for mid 2009. HIPC and MDRI challengesinmaintainingmacro-economic debt reliefwill significantly reduce the external stability. Inparticular,the difficult fiscal debt burdenand ease the fiscal situation. situation, with alarge external debt overhang + InJanuary2008, theBoardoftheWorld andinternalarrears, posechallengesto the Bank approvedanexceptional increaseinthe financingof the PRSP and increasethe ceiling for HIPC interimdebt relieffrom 30% to country's vulnerability to external shocks. 50%, which helpedto reducethe debt service to be Moreover, the government may beunableto paidby the country. implement its cashflow managementplanor the + The proposedprogramaims at mitigating the envisioneddonor support may not materialize short term impactof food price increaseson the vulnerable populationand supporting growth in agriculturalproductionandproductivity to ensure an accelerated supply response insupport of sustainedimprovement infood security. 20 Rating Riskfactors Descriptionof risk Rating Of risk Mitigation measures of residual risk PoliticalRisk + Fundingof legislativeelectionsto beheld H + Other donors arepledgingsupport towards H onNovember 16,2008, after already 6months the fundingof the elections,and are working with of extensionofthecurrentParliamentsmandate governmentto elaboratea realistic budgetand inthe2004-08 legislativeperiod,is notsecured preparetheprocess. - whichcouldleadto a furtherpostponementof the elections andincreasedpoliticaltensions. Country + Weak capacity affects portfolio S + CombinedBankmissionsfrom Washington S Engagement management. andDakarensureclose supervisionofprojects. WithWorld + Tight fiscal situationmakes it challenging + Strongeffortstaken fromthe Bank-sideto to meetdebt service requirements on a regular mobilizeadditionalresourcesthroughtrust funds; basis. also, Bank has beenheavily engagedto mobilize additionaldonor funding. + For Guinea-Bissauas a whole, risks of H + This programcontains well definedtargeted poorgovernanceinimplementationremain activities,provisionoftechnicalsupport, will highand anti-corruptioninstrumentsintheir utilizealready existingimplementation infancy. mechanismsthat contain financial management + Weak nationalinstitutionsandincreased andprocurement frameworkswhichhavebeen narco traffickingjeopardize rule of law and testedandare underconstant monitoring,and security. whenpossible,existingdeliverymechanisms + Limitedgovernmentleadershipfor and (e.g., WFP). adherenceto reformprograms inthe face of fiscal difficulties,politicalinstabilityand constant fluctuationonbothsenior government and administrationlevelaffectprogram implementation. + Lack ofdecentralizationframework,and weak institutions, capacityandgovernanceat local level also poseconstraintsonproject implementation.Inparticular, the lack of trainedcivil servantsmakesproject implementationin Guinea-Bissaurisky. + Weak institutionsanddifficult economic H + A fiduciary hub, staffedwith experienced corruption environment highlysusceptible to corruption membersof currentprojectimplementationunits, andpoliticalinterference. i s intheprocess of beingestablished. The hub will beinchargeof financial management and procurement for several IDA-fundedprojectsby shared arrangementsfor project coordination. This projectwill benefit fromthe services of this fiduciaryhubonce it is established. Procurement + The currentprocurement code is not H + At current,the Banksupports only limited updatedin linewith WAEMU's directives; activities with respectto the mitigationof I----- deficientinstitutions for regulationandcontrol; procurementrisks outsidethe contextof weak procurement capacitythroughoutall individualprojects. institutions. 11. Project spe ic Risks + Availabilityandaccessibilityof + The issueofavailabilityofagricultural inputs agriculturalinputsis a risk.The input supply M i s an itemofparticular focus for the earlystages M depends onthe availabilityofwholesale input of project implementation.Arrangementshave suppliers andretailerswho canprocureinputs beenmadewith FA0 andWFP to providefor the inbulkandhavethe requireddistribution seeds inthe first year ofprojectimplementation. networkinplacein areas benefitingfrom the The design incorporatesbroadoversightfor the project. projectto beimplementedby the MARD. + Sub-projectfailure risks due to inadequate Technicalaudits will beusedto monitor the oversight. implementationof the sub-projectsand recommendremedialactions.Poorperformance by implementingpartnerswoulddisqualifythem for future funding. 21 Rating Riskfactors Descriptionof risk Rating of Of risk Mitigationmeasures residual risk Implementation Implementationcapacity is generally weak + capacityand reflectingthe low levelsof skills withinthe S Provisionhasbeenmadeintheprojectto augment existingweak technicalcapacity inthe S sustain-ability publicsector. This mayincrease the riskof publicsectorbyrecruitingon a need-basislocal timelypreparationof all the necessary andinternationalconsultants to trainandsupport documentsand establishmentof implementation localtechnicians. arrangements. + Fiduciaryarrangementswill beoutsourced from the oneoineCBMP PIU. Matching + For Guinea-Bissauas a whole, risks of H + S ~~ Establishmentoflow ceilings grants to be poor governanceinimplementationremain capturedby + Fundswill notbegrantedto individuals. highandanti-corruptioninstruments intheir elite infancy. + Beneficiarieswill beinvolvedindecision making, includingchoice of sub-projects. + Effectivesupervisionandmonitoringto ensurethat thebenefitsare goingto the intended target group. + Representativesof CBO/NGOs, andcivil societywill berepresentedas partofthe approval committees. + Appointmentofa technicalauditorto review qualityof service providersinthe sub-projects as well as themanagement of funds by beneficiaries. + Transparency inthe useof funds for sub- projectswouldbe ensured throughproper accountingandauditing. Financial + Existingfinancial managementcapacity in + The project is makingresourceprovisionfor management the CoastalManagementandBiodiversity S the recruitmentof accountant. Projectmaybeinadequate. Procurement + Existingprocurementcapacityinthe S + The project is makingprovisionfor the hiring CoastalManagementandBiodiversityProject of anadditionalexperiencedprocurement maybeinadequateto handleprocurement specialistto handlethe incrementalprocurement volumes associatedwith additionalactivitiesof work. the proposedproject. Social and + The environmentaland social impactsof + Provisionhasbeenmadeto hire a Safeguards environ-mental the addedactivities are expectedto beminimal, Expertto providenecessarysupport to the farm safeguards L site specific,andmanageableto an acceptable groups andmonitorcompliance. level. I 111. OverallRisl includingReputational Risks) Despitethe limitedscope ofthe activitiesproposedandthe useofexistingor testedimplementationmechanismsincountry,the governance,fiduciary andcapacityenvironmentof Guinea-Bissaujustifies the ratingof the overall risk as substantialfor this operation. Memoitems: Abbreviations: L=Low; LH=Lwith WS Element; M=Moderate; S = Substantial;H=High G.Terms and Conditions 81. The Terms and Conditions are as follows: A. Board condition: none B.Effectiveness condition: appointment ofTechnical Coordinating Unitcoordinator satisfactory to IDA. 22 C. Disbursement Conditions: For Component 1 Disbursement Conditions for purposes o f Category (1) inthe agreement to be entered with the World FoodProgram: The Government o fGuinea-Bissau will have signed a letter o f understanding with WFP setting forth the scope, modalities, targeting o f beneficiaries, andother matters for implementationo fcomponent 1. D.LegalCovenants For Component 2 Not later than 30 days after effectiveness: o Establish aProject Steering Committee o Establish aTechnical CoordinationUnit o Prepare draft Annual ActionPlansto be submittedto the World Bank andthe Project Steering Committee for approval o Prepare the Operations Manual Not later than October 31each year the Recipient shall: o Prepare a Communication Strategy 0 Not later than 3 months after effectiveness the Recipient shall: o Select three project coordinators for the regional offices for purposes o f carrying out Project activities o Prepare and disclose the Environmental and Social Management Framework (ESMF). 82. FinancingInstrument.The proposed interventions will be financed by a grant from the Food Price Crisis Response Trust Fund (FPCR-TF). The FPCR-TF is financed from IBRD surplus with the specific objective o f supporting a food crisis response in the most fragile and vulnerable countries with little or no access to alternative sources o f financing, including IDA. The project is consistent with primary objectives o f the FPCR-TF, which include: (i) reducing the negative impact o f high and more volatile food prices on the lives o f the poor in a timely manner; (ii)supportinggovernments inthedesign ofsustainable policies that mitigatethe adverse impacts o f highand more volatile food prices on poverty; and (iii)supporting broad-based growth in productivity and market participation in agriculture to ensure an accelerated supply response in support o f sustained improvement infood security. 23 Annex 1: Descriptionof ProjectComponents GUINEA-BISSAU:EmergencyFoodSecuritySupportProject Background 1. Guinea-Bissau has the potential to be self-sufficient in food production; however, the economy has been dominated by cashew production, which accounts for about 98 percent o f national export earnings. Cashew has also been increasingly diverting valuable land from rice and other food crop production. The strategic focus on cashew would have made sense in a world in which cashew prices were stable and predictable and food prices low; however, in the recent situation of high food prices and volatile cashew earnings, Guinea-Bissau needs to re-examine its agricultural strategy with a view to giving greater weight to food production and to diversifying agricultural production more generally. In recent years, the country has been facing a chronic rice production shortage with rising rice import costs contributing to an increase inthe current account deficit. For example, in 2007/08 domestic rice production was estimated to be 85,000 ton o f milled rice and, with the country's rice consumption estimated at about 140,000 ton, this leaves the country particularly vulnerable to rising import costs, particularly for rice. 2. Objective and Rationale. The objective o f this project is to improve food security for the most vulnerable population including children, and increase smallholder rice production inproject areas. With respect to the latter, the project would support small scale farmers to increase food production, especially focusing on rice. This would include: (i) the rapid provision, on a demand-driven basis, o f critical inputs (seeds and fertilizers) and agricultural implements to small scale/poor farmers to increase the productivity o f key food crops; (ii) rehabilitation o f degraded land to restore land the productivity and support for small scale water structures (dykes and drainage channels) andwater management to reduce water stress; and (iii) provision o f capacity support the to affected small-scale farmers. Bank involvement brings in considerable global experience and knowledge on supporting pro-poor programs and smallholder farmers in countries emerging from conflicts such as Guinea-Bissau. The project design therefore adopts community and demand-based approach to ensure that project beneficiaries do have a say in determining the project activities that best meets their needs and can be sustained. The project will target six regions: Oio, Cacheu, Biombo and Bissau in the northern part o f the country, and Bafata and Gabu inthe eastern part o f the country. The selection o f the project area for this sub-component has been guided by the following criteria: favorable agro-climatic conditions for rice production; significant population density; accessibility throughout the year, market access; existence o f some supporting infrastructure. The Northern areas represent the area that has been most vulnerable to poverty, characterized by high levels o f food insecurity and a high proportion of vulnerable groups, but also with a significant potential for long term sustainable development. 24 ProjectComponents 3. The project would help the Government o f Guinea-Bissau's response to the food price crisis and will include three components: (i) support to improve food security for the most vulnerable population through school feeding and food for work programs; (ii) support for the country's Emergency Plan for the Agricultural Campaign 2008-2010 proposed by the MARD to increase food production and productivity, with a particular focus on rice; and (iii) project coordination, monitoring and evaluation. The proposed Project i s expected to be implemented over a period o f three years. Component1:Support for the MostVulnerablePopulation(US$l. 5 million) 4. This component o fthe project will be implementedbythe WFP, who will enter into a specific grant agreement with the Bank and a Memorandum o f Understanding with the Government o f Guinea-Bissau. Component 1is designed to support (i) the school feeding program; and (ii)the food for work program to rehabilitate land under rice. Since the WFP program is already under implementation, channeling fhds from this project through the WFP will supplement the WFP program and provide an emergency response to the most vulnerable population o f Guinea-Bissau. 5. WFP has been selected to implement this component due to in-country experience accumulated during the implementation o f the ongoing Protracted Relief and Recovery Operation since 2006. The program i s expected to be extended up to December 31,2010. The main objective o f this program is to: increase enrolment and attendance rates, especially for girls, at pre-primary and primary schools in the most vulnerable areas o f the country (through the school feeding program); improve household food security in target areas through the rehabilitation o f landand creation o f community assets (through the food for work program); and strengthening capacities o f government and local NGOs to establish and manage food-assistance andhunger-reduction programs. 6. For 2008, WFP approved additional US$1.16 million to cover additional imports o f 1,600 metric tones o f food commodities and all operational costs for the extension period to support additional 90,000 beneficiaries in Oio, Quinara and Tobali regions through Food-for-Work (FFW) activities. WFP will continue working with the MARD on the implementation and monitoring o f WFP assistance. WFP will provide regular capacity building training sessions to government partners at the national and regional levels and to NGOs partners in providing food aid. WFP will reinforce its partnership with (i) UNICEF, FAO, PLANGuinea-Bissau in School FeedingProgram component; (ii) WHO, UNICEF in the nutrition activities, and (iii)FA0 and European Union in the food security matters. 7. Sub-component 1.1: School Feeding Program (US$0.5 million) The school feeding program will support school feeding for the pre-primary and primary school students in targeted regions within the ongoing WFP project. This program will be funded by the project for only one year, and it is expected to serve about 14,000 students in about 95 schools, which are additional to the ongoing WFP school feeding program. The food basket will contain cereals, corn-soya blend (CSB) food, pulses, vitamin A- enriched vegetable oil, sugar and iodized salt. One meal will be served inthe pre-primary 25 and primary schools. In addition, the proposed program will provide "girls take home rations". Overall, the proposed program i s expected to have a positive effect on the nutrition o f participating students as well as attendance and performance o f those students. Furthermore, the proposed program will have a positive impact on the schooling o f girls. 8. Sub-component 1.2: Food for Work Program (US$l.O million). The food for work program, on the other hand, will support the rehabilitation o f rice land by rehabilitating dikes for mangrove rice (about 2,000 ha) anddrainage channels for lowland rice (about 3,000 ha). This program is expected to provide employment opportunities to the unemployed (about 160,000 work days) and rehabilitate much needed rice land in order to facilitate an increase in rice production. Part o f the beneficiaries from the food for work program will be women. This rehabilitated land, is expected to produce about 7,500 tons o fpaddy rice annually, worth about US$S.O million. Component2: Support for IncreasingFoodProduction(US$3.0 million) 9. This component will be implemented by the MARDand is designed to support (i) matching grants for food production; and (ii)strengthening MARD capacity and provision o f technical support to the farm groups. The key results expected from the implementation o f this component are (i) increased adoption o f new technologies; and (ii) increased assistance to smallholder food production activities. While the project would support diversification and production o f all food crops, the main focus will be to increase rice production. Prior to independence in 1974, Guinea-Bissau was a net exporter o f rice whereas in2007/08 domestic production will meet only 60 percent o f the rice requirements inthe country. 10. Sub-component 2.1: MatchingGrants for FoodProduction(US$2.5 million). This sub-component will provide demand-based support, in the form o f matching grants to communities and smallholders groups, for small-scale agricultural infrastructure, production, processing and marketing sub-projects. The key results expected from the implementation o f this sub-component are (i)increased adoption o f new technologies mainly high yielding varieties seeds and fertilizers; and (ii)enhanced access to agricultural markets. The sub-projects will be initiated upon the request o f communities and smallholder farmer groups and will bepreparedwith the assistance o fNGOsthat will be trained and equipped for this task. The sub-projects will then be screened for technical, financial, economic, social and environmental feasibility, before they are approved for funding. To be approved for funding, the sub-projects will have to meet stringent eligibility criteria, which will be spelled out in the Operations Manual that is under preparation. The matching grant ratios and funding ceilings that apply will be periodically reviewed and recalibrated to take into account the changing circumstances and lessons learned duringimplementation. 11. The beneficiary groups will be expected to provide in-kindcontributions, belong to the targeted regions, deal primarily in food production, consist o f smallholders, proposes to address problems in a viable fashion, so as to ensure that the proposed sub- project is likely to have highpayoffs interms o f food production, and food production i s sustainable after the project is over due to the investments and participatory approach. 26 Smallholder groups will be eligible to receive support, provided that the sub-project proposals result from a community-level participatory planning exercise with a cross section o f the population, including women and young people. Smallholders groups or associations will also be eligible for support, provided that these are either formally registered or informally recognized by the local community and authorities, that they have a democratic structure andhave the ability to keep records. 12. The project will have an operations manual that will include a positive and negative list o f activities to be supported by the project. The positive list will include activities that are related to increased productivity o f food crops, such as: 0 provision o f critical inputs (seeds, fertilizers, andpesticides) and agricultural tools and small investments to small scale/poor farmers to increase the productivity o f rice and other food crops; 0 provision o f facilities for improvedpost-harvest management; 0 seedmultiplication; and 0 low cost agricultural processing andmarketing equipment. 13. The negative list will include a list o f activities that will not qualify for funding support, this would include activities that: have a negative impact on the environment and/or do not comply with the Environmental Safeguards, such as: (i)any sub-projects not screened for environmental or social impacts; (ii)sub-projects with any activities inside protected areas or critical natural habitants; (iii) dams more than 10 meters high; (iv) sub-projects requiringthe use o f agro-chemicals inWHO categories IA, Il3 or H; (v) sub-projects that would damage non-replicable cultural property; (vi) sub- projects involving logging in natural forests, or processing o f timber other than from plantations; (vii) sub-projects that require the use o fwater from international rivers; and (viii) sub-projects that require involuntary resettlement 0 are for private use or non-related to improvement o f food productivity, such as houses, schools, health centers, etc.; or cashew production; and 0 configure a conflict o f interest, such as sub-projects inwhich the beneficiaries are members or staff o f (i) the Project Committees at all levels; (ii) PIUand TCU; the (iii) government(regionaldirectors,regionalcoordinatorsandassistant local administrators, etc). 14. Sub-component 2.2: Provision of Technical Support (US$0.5 million). The objective o f this sub-component i s to strengthen the technical capacity o f the MARD to assist smallholders and their organizations. The expected results under this sub- component include: (i)improved technical capacity o f the MARD to assist the beneficiary stakeholders involved in agricultural production; (ii) improved participation o f smallholder farmers in farm organizations; (iii)improved community capacity to prepare agricultural investments support opportunities; and (iv) improved government capacity as a whole to support smallholder farmers in the project area. The component also takes a gender andvulnerable group sensitive approach to capacity building. 27 15. The smallholder groups will be supported by an NGO hired under the project as well as by MARD staff and the TCU staff. In addition to being responsible for project implementation, the MARD will be involved in rice seed production, organizing farmer demonstrations dealing with new technology and management practices for rice, and provision o f agricultural extension and farmer information. FA0 has arranged for the production o f about 85 tons o f rice seed during the forthcoming season. FA0 has agreed to distribute flee o f charge the seeds to farmers selected under this project. Furthermore, the project would strengthenthe capacity of MARDthrough training, technical assistance and limited equipment. It would be useful to request WARDA and IITA to provide necessary technical assistance for increasing the production o f rice and other food crops, respectively. Component3: ProjectCoordination,MonitoringandEvaluation(US$0.5 million) 16. This component will coordinate project implementation, monitoring and evaluation and the resources, inaccordance with the project objectives and procedures. 17. Sub-component 3.1: Project Coordination (US$0.35 million). The MARD is responsible for overall project implementationand has delegated the Department o f Rural Engineering to be accountable for the coordination, management and oversight o f the project in order to attain its objectives. At the specific request o f the MARD, a T C U will be established within the Department o fRural Engineering. 18. Sub-component 3.2: Monitoring and Evaluation (US$O.l5 million). Monitoring and evaluation focuses on data collection and reporting on key performance output and impact indicators, including targeted data collection, surveys, participatory assessments and mid-termand final evaluations. A specialized monitoring and evaluation section will be set up within the TCU, and a management information system will be prepared to the satisfaction o f the World Bank. 28 Annex 2: ResultsFramework GUINEA-BISSAU: EmergencyFoodSecurity SupportProject PDOOutcomes OutcomeIndicators Use of ProjectOutcome (indicatorswillbegender-disaggregated) Information Improve access to food 14,000 studentsreceive one meal a day Monitor assistanceto vulnerable for TOUPS A total of 160,000 work-days (rations population, including children including children distributed)to ruralproducers infood-for- work activities Increasedrice production 7,500 tons o f rice produced in the new Monitor the effectiveness o f the rehabilitatedareas under the project. assistance IntermediateResults IntermediateResultIndicators Use of IntermediateResult Monitoring Component 1: Support to the mostvulnerable population New landbrought into 2,000 ha for mangrove ricerehabilitated To monitor quantity ofnewland cultivation under the food 3,000 ha lowlandrice rehabilitated brought into production. for work program (ha). To monitor impact of efforts to improve food security. Component2: Increasingfood production Increased adoption of 500 smallholder farmers groups with access To ensure increasedproductivity new technology to agricultural inputsby year 3, of food production. Increased assistanceto 300 sub-projects approved and under To ensure adequate quantity o f smallholder production implementationby Year 3, land i s brought into production for activities smallholder production and productivity increases. Improveproject reporting Level of project implementation according Monitor the progress o f project and management to annual plan. implementation Arrangementsfor ResultsMonitoring 1. Results monitoring will assist project management in making implementation decisions and generate lessons to effectively implement the project. Result monitoring will include two aspects: (i) Impact assessment surveys, focussing primarily o n the degree o f achievement o f overall project development objective, against baseline data that will be collected; and (ii) Ongoing management information system (MIS) for assessment of intermediate results o f project components. 29 2. A detailed description o f project's output and activities monitoring procedures will be developed inthe project implementationoperations manual. ImpactAssessment Surveys 3. Impact assessment surveys aim to collect information about project's contribution to the enhancement o f participant smallholder farmers' agricultural production and income as well as to appraise how this i s distributed by gender, social groups and geographical area. 4. In addition to the household surveys, a direct appraisal of income generated by participation in project activities will be carried out by collecting annual official accounting data (e.g. revenue, capitalization) o f a sample o f farmer associations and cooperatives. Perception o f change in income and capitalization will also be explored in further detail through in-depth interviews or focus groups with project participants. 5. Triangulation among these sources (surveys, farmer association accounts and in- depth interviews/focus groups) is expected to enhance the validity o f the overall impact assessment findings. PeriodicManagementInformationSystem 6. Achievement o f intermediate results for Component I (Support to the most vulnerable groups) will be monitored by keeping track o f the quantity o f land brought into production in hectares as a result o f rehabilitation o f dikes for mangrove rice and drainage channels for lowland rice. 7. Achievement o f intermediate results for Component 2 (support for increasing food production) will be monitored by keeping track on the number o f smallholder farmers with access to agricultural inputs and numbers o f sub-projects approved and under implementation. 8. A strong project management information system is required to deal with the geographical dispersion o f this project. Beyond regular monitoring meetings, an annual internal evaluation and re-planning workshop among the TCU and its main institutional partners is recommended to assess progress made by the different project components and draft the work planfor the forthcoming year. Organizationalset up of the ResultMonitoringSystem 9. To manage the above data collection, processing and use procedures, an M&E unit will be established in the national level TCU, with a full-time M&E specialist, responsible for (i) overseeing data collection; (ii)storing, consolidating and analyzing data, and providing feedback at all levels (project manager, collaborating public institutions, private outsourcers, farmers associations etc.); (iii) providing training on specific M&E tasks to colleagues and partners; and (iv) facilitating project coordination self-assessment during yearly and mid-tern evaluation workshops. 30 t?0 L8 1 x 3 2 8 3 m I m 0 0 0 8 2 I 0 3 - 0 I 0 3 3 : s n.B .I P I 0 0 IO e 9 00 a 0 0 Annex 3: Summary of EstimatedProjectCost ComponentCostsby Source cJS%million) TF Grant Component Amount YO Component 1- Support to the Most 1.5 30 VulnerablePopulation 1 1 SchoolFeedingProgram 0.5 10 I 1.2Food For work Program 1.o 20 Component2- Support for the 3.0 60 Incre'asingRice Production 2.1. Matching Grants* 2.5 50 2.2 Provision ofTechnical Support 0.5 10 Component3. ProjectCoordination, Total * The smallholder beneficiaries will make in-kind contributions of at least 10 percent of the size of the sub-projects. TableA3.2 Summary of ComponentCostsby Type of Expenditures(US$ million) (US$ million) Component Local Foreign Total Component 1- Support to the Most VulnerablePopulation 0.9 0.6 1.5 1.1School FeedingProgram 0.4 0.1 0.5 1.2 Food For work Program 0.5 0.5 1.o Component2- Support for the IncreasingRice Production 2.3 0.7 3.0 2.1. Matching Grants 2.0 0.5 2.5 2.2 Provision ofTechnical Support 0.3 0.2 0.5 Component3. ProjectCoordination, monitoring and Evaluation 0.3 0.2 0.5 32 Annex 4: FinancialManagementandDisbursementArrangements GUINEA BISSAU: Emergency Food Security Support Project INTRODUCTION 1. The Bank policy requires that the Recipient put in place adequate Financial Management arrangements including budgeting, accounting, internal controls, funds flow, financial reporting and auditing arrangements. These arrangements need to be inplace before project implementation begins, and should be maintained during project implementation. According to OP 8.00, Emergency operations, as is the case here, are processed under accelerated, consolidated, and simplified procedures and are subject to streamlined ex-ante requirements, includinginfiduciary and safeguards areas. 2. A financial management assessment (FMA) was carried out in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective o f the assessment was to determine whether the implementing entity in place has acceptable financial management arrangements, which will ensure: (i) funds are used only for the intended purposes in an efficient and economical the way; (ii) the preparation of accurate, reliable, and timely periodic financial reports; and (iii) safeguard the entity's assets. 3. The Bank financing will be a new project which includes short-term support to the most vulnerable populations and medium-term actions to enhance food production and productivity. For the latter, similar activities are being implemented by the CBMP through the demand based approach already in place under the "Local Environmental Initiatives Funds" (FIAL). 4. Four investment projects funded by the World Bank are currently active. The private sector project will close inJanuary 2009, the HIV Project will close its activities inDecember 2008 and the Multi Sector Project started its activities inMay 2007. The CBMP, funded by a US$3 million IDA grant plus a $4.8 million GEF Grant, became effective on March 14, 2005 and will close on September 30, 2010. The PIU has an established FM system and has been producing regular interim financial reports. The CBMP PIU has complied with fiduciary requirements, including timely conduct o f audits. For the proposed project, the fiduciary arrangement o f the CBMP will be used with the implementation o f some improvements indicated inthe financial management action plan. SUMMARYOF THE PROJECT 5. The project will help the Government o f Guinea-Bissau's response to the food price crisis and will include three components: a. support to improve food security for the most vulnerable population through school feeding and food for work programs to be implemented by the World Food Program; b. support for the country's Emergency Plan for the Agricultural Campaign 2008- 2010 proposedby the MARDto increase food production and productivity, with a particular focus on rice; and C. project coordination, monitoring and evaluation. The proposedProject i s expected to be completed over a periodo f three years. 33 CountryAccountabilityIssues 6. Dueto the social andpolitical conflict situation inthe country, the Country Financial Accountability Assessment (CFAA) carried out by the Bank in March 2006 has not yet been implemented. However some studies conducted by donors suggest that the Government has made considerable progress inthe area o f financial management since 2006. However, a few aspects have been identified for further strengthening, including the need to improve the budget classification system; increase the computerization o f FM systems; improve accounting that will eventually move towards an accrual basis; and improve the quality o f expenditure reporting through IFRs. So, the Bank has taken special measures to ensure adequate financial management o f the projects. Project management units are often established to manage IDA-financed projects and Bank funding i s following special mechanisms to mitigate fiduciary risks. ASSESSMENTOF RISKS Inherentrisks At the country level 7. The Country Integrated Fiduciary Assessment (CIFA) o f the budget preparation, execution and control was conducted in 2004. The main finding o f the report in terms of budget execution is that in Guinea-Bissau, the budget execution process suffered from a number o f weaknesses and i s generally weak. Thus, one o f the main issues was the strong centralization o f the expenditure control that in a situation o f loose management and cash shortage could be seen as an effective alternative to assure at least some budgetary discipline. The main weakness i s the fact that the government had been unable to adjust to a deteriorating macroeconomic environment in a transparent way and the almost complete absence o f effective reporting on the budget execution. This situation highlighted the dysfunctional aspects o f the budget execution process. The final accounts o f the fiscal years were not consolidated in time creating disruptions in the flow o f information about the execution o f the budget. The Treasury did not have yet a sufficiently developed State accounting system. The staff kept records according to single entry bookkeeping methods, instead of double entry, and there was no balance sheet. Since 2005, and especially during 2007, the situation has improved. The activation o f the treasury committee and other public expenditure management reforms have helped improve the prioritization o f expenditures and reduced fiduciary issues. 8. However, on the budget control side, there i s still no efficient mechanism o f internal control to address budget execution problems. The General Audit Office did not operate well, especially for the ex-post control o f the public accounts not audited (even prepared by the accountant general) since 1987. Based on the main findings o f the PER, even though the situation has improved, the mission concluded that the risk at the country level is still high. At theEntity level 9. The riskrating i s substantial. To avoid slippage, the fiduciary aspects o f Bank projects are strengthened through outsourced experts. Accounting staff are hired as consultants to work on projects, even when a Ministry implements those projects. World Bank assisted projects are invariably audited by independent and competent audit firms and in accordance with internationally recognizedaccounting standards. 34 At the Project level 10. Because of the high fiduciary risk at the country level, IDA has taken special measures to ensure adequate financial management o f the projects. Project management units are often established to manage IDA-financedprojects and Bank funding i s following special mechanisms to mitigate fiduciary risks. The project level risk rating i s high, reduced to moderate with the proposedmitigatingmeasures. ControlRisk Accounting and budget execution 11. The risk i s moderate. Funds of Flow 12. For component 1the funds will be disbursement directly to WFP and the management and reporting will follow the provisions under the Financial Management Framework Agreement (FMFA) signed March 10,2006 betweenthe Bank and the UnitedNations. 13. For component 2, separate DesignatedAccount will be opened ina commercial bank to track the project expenditures. This account will be managed by the Minister of Agriculture and Rural Development, and the Treasury Department o f the Minister o f Finance with technical support from the PIUofthe CBMP. Reporting 14. A quarterly un-audited Interim Financial Report (IFR) will be prepared in form and substance satisfactory to the World Bank. An experienced accountant in place will prepare financial report informat and substance acceptable to the Bank Summary of RiskAnalysisand mitigation measures Risk Risk RiskMitigationMeasure Conditionality Residual Rating - Risk Rating Inherent Risks: H S Country: Key FM oversight elements ofthe project Poor governance/Corruption/ are entrusted to the Government system. Capacity for external audit is enhancedby the recruitment of the external private H sector audit firm to carry out the external No H Entity Levels Low capacity of MARD to implement The project will be implementedby the and monitorthe project S MARD and the project's fiduciary M aspects will be implemented through the CBMP PIU. An Accountant will be Project level CDD activities are risky from the The existing CBMP PIU is familiar with fiduciary perspective given the nature H the implementation of CDD operations M of activitiesinvolved. and the internal and external auditing measures in place will contribute to the proposedriskmitigating measures ControlRisks: M M 35 Accounting and budget execution An administrative and accounting The Bank will organize a workshop manual of procedures has been M regardingthis aspect. developed and provide all the required details on accounting and financial procedures. However, the internal control system does not operate effectively to ensure proper authorization of expenditures in accordance with budget, and proper authorization of payments. Internal Audit Internal audit hnction does not exist. The Bank will pay attention to the However, key internal control effectiveness of the internal control mechanisms (approval and s system during supervision missions and authorization controls, bank the review o f the annual audit reports as reconciliation statements, etc.) are well the auditor's management letter. included inthe manual. External Audit External auditor with qualification and experience satisfactory to the World M The external audit firm will be selected Bank will conduct an annual audit of under a competitive basis and acceptable the project's financial statements. This TORS audit should be carried out in accordance with International Standards on Auditing (ISA), and will include such tests and controls as the auditor considers necessary under the circumstances Funds Flow A Designatedaccountwill be opened ina Delay in financing of the component commercial bank to finance activities of Local Environmental Initiatives Funds M the project. (FIAL). Funds may not reach the final beneficiaries. Reporting The CBMP PIU prepares quarterly The quality of these IFR will be IFRs M improved, mainly in the following areas: (i)justification of discrepancies; (ii) justification of evidences of payments and (iii)tables such as sources and use of funds, bank reconciliation and use of funds by activity/component are done but the requiredforms are not being utilized Overall Risk S Legends H: High s: Substantial M: Moderate L: Low Strengthsand Weaknesses Strengths 15. The CBMP PIU has been functional for about 3 years and it is responsible for the project financial management. The staff o f the PIU have acquired experience in managing Bank financed projects, which will benefit this operation as well. The use o f the existing PIU 36 will also ensure the speedy and timely implementation o f the proposed component. Some financial aspects as the internal control, the monitoring o f the budget and the format o f the IFRneedto be strengthened. Weaknesses 16. Similar to other post-conflict countries, the general overall fiduciary environment in Guinea Bissau i s very weak. With the exception o f the PIU and the existing accounting staff, it is difficult to findpeople with strong experience inWorldBank financial and disbursement procedures. In addition, some issues inthe financial aspects were raised during the mid term review o f the CBMP: weaknesses inthe internal control system, monitoring o f the budget and quality of IFR. Action plan 17. Since Component 1will be implemented by WFP, the following action plan refers to component 2 and 3 and will help to strengthen the financial capacity o f the CBMP unit: Action ByWhom ByWhen 1 Update the content o f the existing IFR format by CBMP Immediately including the Component FIAL activities 2 Recruit and train the accountant within CBMP PIU CBMP Within 3 montho f effectiveness 3 Review CBMP TORS for the Auditor to expand CBMP Within 3 scope of work to incorporate new project months o f effectiveness 4 Holda capacity buildingworkshop, including Financial Staff Endo f aspects o f the monitoring o fbudget; internal o f CBMP October control; and quality o f IFR 2008 5 Recruitment o f an accountant by the TCU to TCU Endo f2009 support project implementation when the CBMP closes in2010 FINANCIALMANAGEMENTAND DISBURSEMENTARRANGEMENTS Financial ManagementArrangements Component 1- FinancialManagement Arrangements with WFP 18. Financial Management Arrangements with WFP will follow the Financial Management Framework Agreement (FMFA) signed March 10, 2006 between the World Bank and the UnitedNations. 19. WFP will prepare its annual plan budget forecast for review and approval by the Bank. WFP will handle all the financial management aspects usingits own procedures set out in the WFP Financial regulations. It will maintain separate account for recording the transactions relating to this project. As per the FMFA, the Bank audit requirements are met through the normal biennium audit o f the WFP. Therefore, separate audited financial statements and audit reports from WFP for this project are not required. WFP would submit half-yearly interim financial reports (IFRs) for the periods ending June and December to the 37 Bank. The IFRs would include sources and uses o f funds, expenditures appropriately classified with comparative actual and budgeted amounts, and balance o f advances received from the Bank. 20. Disbursement arrangements. Upon effectiveness and fulfillment of disbursement conditions funds will be advanced to WFP Bank account that may be pooled with WFP resources. Replenishment o f the advance for the rest o f the period shall be based on the forecast and IFRsdiscussed above. FinancialManagementfor Components2 and 3 21. Subcomponent 2.1 will provide demand-based support (matching grants) to communities and smallholders groups, for small-scale agricultural infrastructure, production, processing, and marketing sub-projects. The focus i s on the activities in the regions o f Oio, Cacheu, Biombo and Bissau (northern part o f the country), and Bafata and Gabu (eastern part of the country). The selection o f the project area for this sub-component was guided by the criteria briefly outlined in the implementation manuals. The sub-projects will be initiated upon the request o f communities and smallholder groups and will be prepared with the assistanceo f NGOsthat will be assessed, trained and equipped for this task. The sub-projects will be screened for technical, financial, social and environmental feasibility, before they are approved for funding. To be approved for funding, the sub-projects will have to meet stringent eligibility criteria, which will be spelled out inthe Operations Manual that is under preparation. The matching grant ratios and funding ceilings that apply will be periodically reviewed and recalibrated to take into account the changing circumstances and lessons learnedduringimplementation. 22. The communities, when submitting proposals, will include a simple subproject plan complete with basic specifications and budget plans indicating the financial requirements for the subproject. The plan should identify the actions needed to complete the subproject, its approximate cost and timing and financing requirements (cash forecast) at each stage. If approved, this will be disbursed in three tranches (depends on the size o f the project, the length o f the implementation period and the capacity o f the subproject). The initial tranche will be based on approved subprojects' proposal and subsequent payments will be based on physical and financial progress report. For accountability and transparency o f this sub- component which forms 50 percent o f the entire Grant, a trained bookkeeper and/or treasurer will be appointed in the community. Social accountability, public disclosure and anti- corruption complaints handling arrangement will be documented inthe financing agreements with the Communities. This will include disclosure o f the accounts andproject activities at a public place in the community and design o f a simple complaints structure to the Agencies. A firm CDD arrangement, including flow of funds will be described in the Operations Manual. 23. The FA0 will collaborate with the MARDto provide rice seeds under component 2. 38 StaffingArrangements 24. The CBMP PIU will handle the financial management o f this project. The PIUis well staffed with qualified Chief Financial and Accounting Officer and an accountant who are familiar with the World Bank disbursement and financial management procedures. The accountant works under the technical supervision o f the Private Sector Rehabilitation and Development Project PSDRP chief financial and accounting officer. 25. Due to the expected expansion o f activities created by the proposed project and as already recommended by the external auditor, an accountant will be recruited to help strengthen the financial management department o f the CBMP. The responsibilities o f the accountant will include keeping o f the books o f accounts, preparation o f the un-audited interim financial reports (IFRs) as well as the withdrawal applications. The recruitment should be completedwithin three months following the grant effectiveness. Accounting Procedures 26. A comprehensive, integrated budgeting and accounting system is in place. An administrative and accounting manual o f procedures has been developed and provide all the required details on accounting and financial procedures. It sets out in particular: (i)the institutional arrangements and the relationship between all the stakeholders o f the project (Steering committee, PIU Staff, beneficiaries etc.); (ii)the planning and budgeting arrangements; (iii) the treasury procedures; (iv) the procurement procedures; and (v) the reporting formats and arrangements. Accounting transaction processing and reporting are based on use o f "TOMPRO" accounting software. Preparation o f the financial statements i s governedby the "SYSCOA" and IPSAS/AIS. 27. The proposed project will follow the existing accounting system based on the FM procedures and accounting manual that provides for adequate segregation o f functions, capable o f recording all accounting transactions, and reporting correctly all assets and liabilities o fthe project. BudgetingArrangement 28. Cash budgeting arrangement will be adopted. The annual budget will be based on an agreed annual work program and closely monitored during implementation. The monitoring o f the budget o f CBMP i s not hlly satisfactory. In order to address this issue, a capacity buildingworkshop will be heldat the endo f September 2008 for all the finance staff working on World Bank assisted projects. InternalControland InternalAudit 29. An internal audit function does not exist. However, the existing internal control framework i s considered adequate for the time being. Key internal control mechanisms (approval and authorization controls, bank reconciliation, segregation o f duties etc.) are included inthe administrative and accounting manual o f procedures in order to minimize the controls risks. Duringsupervision mission, the FMS will review and ensure strengthening o f the internal control environment and pay attention to effectiveness o f the internal control system. However, the internal control system does not operate effectively to ensure proper authorization o f expenditures in accordance with budget, and proper authorization of payments. The Bank will organize capacity buildingworkshops regardingthese aspects. 39 30. The system o f audit in Guinea Bissau i s not consistent and does not give guarantee that the funds are used in accordance with the objectives of the Program. So the Bank pays attention to the internal control system during supervision missions. ExternalAudit 31. External auditor with experience and qualifications satisfactory to the World Bank will conduct the annual audit of the project's financial statements. This audit should be carried out in accordance with International Standards on Auditing (ISA), and will include such tests and controls as the auditor considers necessary under the circumstances. Besides expressing an opinion on the Project Financial Statements in accordance with ISA, the auditor will be expected to prepare a report on internal controls, management letters giving observations and comments and providing recommendations for improvement in accounting records, systems, controls and compliance with financial covenants in the Financing Agreement o f the Bank. The audit report and opinions in respect to the financial statements including the management letter and management response shall be submitted to the Bank within six months of the end of the GoGB fiscal year. The TORSacceptable to the Bank for appointment o f the auditor will be prepared by GoGB. 32. The table below summarizes the auditing requirementsunder this project: Audit report Entity DueDate 1)Project's financial statements PIU June 30 33. All the audit reports will be submitted to the Bank within six months after year end, December 31each year. Reportingand Monitoring 34. A sound computerized information system has been established at the PIU o f the CBMP. This system has been updated in such a way as to allow the production o f the financial report. 35. The CBMP PIU prepares quarterly IFRs. However, the quality o f these IFR needs to be improved, mainly inthe following areas: (i) justification o f discrepancies; (ii) evidence o f payments; and (iii) tables such as sources and use o f funds, bank reconciliation and use o f funds by activity/component statements are done but the required forms are not being utilized. The IFRsformat will be updatedto include the proposedproject. 36. Regarding component 1, WFP will submit unaudited interim financial reports (IFRs) (also referred to as Interim Consumption Reports) prepared in accordance with accounting standards established pursuant to WFP Financial Regulations and in the format agreed. The reports will be adequate to reflect the resources and expenditures related to the project. The first set o f IFRs will be submitted to the Bank not later than July 31 2009, and cover the resources and expenditures for the six-month period o f the project life. Subsequent interim IFRswill be submitted to the Bank not later than July 31 of each consecutive calendar year and will cover the resources and expenditures for the first six-month period o f that calendar year. Formats of the IFRs have been agreed between the Bank and WFP during the negotiation. 37. For components 2 and 3, the project will submit quarterly IFRs consisting o f sources and uses o f funds by main expenditures classification for the quarter and cumulatively. The 40 IFRwill also include a comparison ofbudgetedand actual project expenditures (commitment and disbursement) to date and for the quarter. The format will remainthe same already inuse and content have been agreed at the negotiation. 38. The first IFR will be produced and submitted to the Bank in the quarter following project effectiveness. Quarterly submission will thereafter be within 45 days o f the end o f the quarter to which the IFRrelates. 39. The CBMP PIU will produce Annual Financial Statements for component 2 and 3, and these statements will comply with International Accounting Standards (IAS) and World Bank requirements. 40. The Financial Statements4will comprise o f a. A Statement of Sources and Uses of Funds b. A statement o fCommitments c. The Accounting Policies Adopted and Explanatory Notes d. A Management Assertion that project funds have been expended for the intended purposes as specified inthe relevant Grant agreements Flow of Funds Arrangement Disbursement Arrangements 41. For component 1 the funds will be disbursed directly to WFP and the management and reporting will follow the provisions under the Financial Management Framework Agreement (FMFA) signed March 10,2006 betweenthe Bank and the UnitedNations. 42. Disbursement for Components 2 and 3 o f the project will be managed by the CBMP PIU and will follow the ongoing CBMP disbursement arrangements. The committees o f the smallholder groups will be responsible for preparation and implementation o f approved sub projects. The committees, depending on the modality established will either manage the Grant funds received from the DA to implementthe activities described inthe sub projects, or make procurement and request payments from the PIUto be made on their behalf. Respective individual agreements will be entered into with the grantees. The sub-grant eligibility criteria and implementation arrangements will be detailed inthe Operations Manual. 43. The proceeds o f the grant will be disbursed over a three year period or less depending on the implementation speed. On project closure, a period o f four (4) months (grace period) after the closing date, as agreed with the Bank, will be allowed to complete processing o f disbursement for eligible expenditures incurred up to and untilthe closing date o f the grant. However, the TCU will also hire a ProcurementAssistant and an Accountant, to facilitate the eventual transfer o f the fiduciary responsibility to the Ministryo f Agriculture once the CBMP project closes (in2010). It should benotedthat the program financial statements shouldbe all inclusiveand cover all sources and uses of funds andnot only those providedthrough World Bank funding.They thus reflect all programactivities, financing, and expenditures, includingfunds from other developmentpartners. 41 Flow of FundsDiapram Legends - b Paymentsto suppliers and consultants TransfersofFunds $. Direct Payments t b Withdrawalapplications Supportingdocuments Allocationof Grant Proceeds 44. The table below sets out the expenditure components to be financed out o f the Grant proceeds. The allocations for each expenditure component are the following: 42 Table A.4.1 Allocation of the Grant Proceeds Category Amount of the Grant Allocated Percentage to be Financed (expressed in USD) (inclusive of Taxes) Component 1 1,500,000 100 (1) DirectOperatingCosts for the 465,000 100% School FeedingProgram (2) DirectOperatingCosts for the 937,000 100% Food-for-WorkProgram (3) IndirectSupportCosts 98,000 100% Component 2 2,500,000 (1) Goods, works, consultants' 2,500,000 100% services, Sub-grantsunder Subcomponent 2.1 ofthe Project Goods, consultant services, and 500,000 100% operatingcosts under component 2.2 Component 3 500,000 100% Goods, consultants' services 250,000 100% (Component3) Operatingcosts (component 3) 250,000 100% Total 5,000,000 100% DisbursementMethods 45. Disbursements will be made according to the expenditure categories and percentages agreed in the Grant Agreement. The project will use the Reimbursement, Advance, and Direct Payment disbursement methods. Component 2 and 3 will use Transaction-based disbursement procedures (SOE). As mentioned above, the CBMP PIU has capacity to produce acceptable IFRs. Use o f the Report-based disbursement procedures will be considered at the appropriate time, when the project's financial management system i s able to effectively produce the IFRs.Withdrawal applications will be submittedon a regular monthly basis. All replenishment or reimbursement applications will be fully documented except for contracts under the prior review threshold. SOE documentation will be retained at the CBMP PIU office for reviewby Bank staff and auditors. DesignatedAccount @A) 46. A Separate DA in FCFA will be opened in a commercial Bank acceptable to IDA. This Account will be managed by the MARD, and the Treasury Department, and the PIU at 43 CBMP will be responsible for issuingthe checks. The DA will be used for all payments for the implementation o f components 2 and 3. Transaction-supporting documentation for SOE or IFR will be retained and kept in a safe place by the PIU which has the primary responsibility for maintaining all documentation. The Disbursement letter, which will form an integral part o f the Grant Agreement, will provide details o f the disbursement methods, required documentation, DA ceiling and minimum application size. These will also be discussed and agreed duringnegotiation o f the Agreement. SupervisionPlan 47. The financial system will be reviewed and assessed twice a year by the Bank Financial Management team. The review will also cover the quarterly un-audited interim financial reports as well as the annual audit reports. Conclusion 48. The FMcapacity inthe CBMP PIUhasbeenassessedand under the condition that the action plan (see paragraph 16 above) i s implemented, the capacity i s adequate to easily accommodate the additional responsibilities arising from the implementation o f the proposed project. 44 Annex 5: Procurement Arrangements GUINEA BISSAU:Emergency Food Security Support Project A. General 1. With exception o f component 1 which will follow WFP procurement procedures, Procurement for components 2 and 3 o f the proposed project would be carried out in accordance with the (i) Bank's "Guidelines: ProcurementUnder IBRDLoans and IDA World Credits" dated May 2004 and revised on October 2006; (ii)"Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004 and revised on October 2006; (iii) Requirements o f OP8.00 for Rapid Response to Crises and Emergencies; and (iv) the provisions stipulated inthe Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the Bank and reflected inthe Procurement Plan. The Procurement Plan will be updated at least annually, or as required, to reflect the actual project implementation needs and improvements ininstitutional capacity. B. Countryprocurement system: Generalprocurementenvironment inthe country 2. There is currently a national procurement code in the Republic o f Guinea-Bissau which has beenjust tested in five line Ministries; it was agreed to extend its application to additional key line ministries and train the main users during a short period before its generalization. But this action has not been completed because there were no means to do it and in addition to this there was a political and military conflict at the same period. A CPAR has not been conducted recently in the country; a Public Expenditure Review i s expected to be conducted inFY09-10. C. Procurementmethodsto beused for the projectimplementation 3. In the implementation of component 1 WFP will use its own procurement procedures. The WFP procurement procedures will be applicable in place o f the Bank procurement and Consultant Guidelines and the Bank will not exercise its regular procurement oversight through post and prior review. To mitigate any risks, the Bank will conduct intensified supervision o f the outcomes and results o f the project. In addition, the Grant Agreement between the Bank and WFP will contain alternative provision to the Bank standard clauses regarding audit, fraud and corruption consistent with the provisions in similar legal documents between the Bank and WFP. 4. Procurementof works and goods under components 2 and 3 Inresponse to the - new Framework for Rapid Response to Crises and Emergencies captured in OP8.00, and to facilitate project implementation and quick delivery o f results, no objections will be given, where appropriate, to the application o f the following: Using rapid procurement methods (Fast track LIB, direct contracting or simple shopping) for the procurement o f services o f qualified UN agenciedprograms andor suppliers (for goods) and civil works contractors already mobilized and working in emergency areas (for works). Also using accelerated NCB for short period o f time, for bid submission and streamlined procedures and applying Bank provisions on elimination, as necessary, o f bid securities. At least 20 working days should be provided for preparation and submission o f bids, after the issuance o f the Invitation for Bids 45 or availability o f the bidding documents, whichever is later. For all procurement o f goods and works, the SBD and biddingdocuments acceptable to the Bank will be used. 5 . Procurement of Works: Works procured under this project would mainly include the small storage at village level, rehabilitation o f degraded land to restore land productivity and support for small scale water structures. Since these works are widely spread in diflerent regions of the country and of small quantities and amount (less than the equivalent value of US$50,000)per region, the procurement will be shopping incompliance with clauses 3-1 and 3-5 o f the guidelines for procurement o f goods and works edited in May 2004 and revised in October 2006. 6. Procurement of Goods: Goods procured under this project would include supply o f agricultural equipment, vehicles, motor cycles, seeds, commodities fertilizers, pesticides, etc. Some o f these goods will be grouped inbid packages estimated to cost at least US$150,000 equivalent per contract and will be procured under International Competitive Bidding (ICB) procedures. Contracts estimated to cost less than US$150,000 equivalent for goods available locally would be procured under accelerated NCB procedures. Small articles and office supplies as well as small equipment and furniture available locally and whose estimated cost i s less than US$50,000 may be awarded through Shopping in compliance with clauses 3-1 and 3-5 o f the guidelines for procurement o f goods and works edited in May 2004 and revised on October 2006. 7. Procurement of non-consulting services under components 2 and 3: This will include workshops and capacity building for staff in the coordination unit or the local communities and their representatives; additionally, it will include some operating costs (transport, insurance, maintenance, etc.), expenditures for workshops if any, and the Ministries o f Public Works and Transport staffvisits inother SSATP country members. 8. Consulting services and capacity building program for this project under components 2 and 3 will include capacity support to affected small-scale farmers and the TCU (including agronomic extension officers, irrigation engineers and procurement specialists) and audit o f the project. For consulting services, Accelerated and Streamlined Procedures may apply to improve the flexibility and speediness. The use o f a "pool o f experts," or a list o f "pre-selected' consulting firms andor individuals may be used. Firms already working inthe area and which have a proven track record insimilar assignments may be the most suitable; selection o f consulting firms through Consultants' Qualification Selection (CQS) method for contracting firms already working in the area and which have a proven track record for the provision o f technical assistance. The selection o f Consultants will be also done through the following methods: (a) Quality and Cost Based Selection for firms (QCBS); (b) selection based on the Consultant's Qualification (CQS) for the selection Individual Consultants; (c) least cost selection method for selection o f auditors or consultant assigned for the supervision o f works; (d) Sole-sourcing (single-sourcing) (SSS) o f consulting firms may be used, where it presents a clear advantage over competition, with prior agreement o f IDA, for services in accordance with the paragraphs 3.10 to 3.12 o f the Guidelines for selecting consultant services; and (e) Individual Consultant (IC) who will be selected inaccordance with paragraph 5.1 to 5.4 o f Bank Guidelines 5.1 to 5.4. 9. Short lists o f consultants for services estimated to cost less than US$75,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions of paragraph 2.7 o f the Consultant Guidelines whenever a short list o f at least six qualified and experienced firms can be composed. 46 10. The Standard Request for Proposal (RFP) and the Sample Form o f Evaluation Report for the Consultant, as developed by the Bank, will be used for appointment o f consultants. Simplified contracts will be used for short-term assignments, i.e. not exceeding six months, carried out by firms or individualconsultants. Type of procurementdocumentsto be usedunder components 2 and 3 11. The Bank's standard bidding documents, including those for evaluation reports, will be used for all procurement under ICB and N C B procedures and for the selection o f consultants. The language o f the documents and contracts will be as follows: ICB for goods - Biddingdocuments are drafted inFrench with Portuguese translation ifnecessary; bidscanbe submittedinFrenchor Portuguese andthe contracts for ICB to be signed inthe same language as that o f the bid, i.e. either French (with translation into Portuguese if desired) or in Portuguese (with translation into French for IDA), accordingto paragraph2.15 o f the Guidelines 0 Fast track NCB and Shopping - The documents may be prepared only in Portuguese, according to paragraph3.4 o f the Guidelines. 0 Consultants - Request for proposals in French, with Portuguese translation; consultants can submit their proposals inFrench or Portuguese; contract to be signed inthe same language as that ofthe proposal, that is either French(withtranslation into Portuguese if desired) or Portuguese (with translation into French for IDA), according to paragraphs 1.20 and 1.21 o f the Consultants Guidelines. 12. Operating Costs: Operating costs financed by the Project are incremental expenses, including office supplies, vehicle operation and maintenance, maintenance o f equipment, communication costs, rental expenses, utilities expenses, consumable, transport and accommodation, per diem, supervision costs and salaries o f locally contracted staff. They will be procured using the implementing unit's administrative procedures, which were detailed in the project administrative and financial manuals, reviewed and found acceptable to the Bank. Others: 13. All procurement process and relatedcontracts below Bank review will be reviewedby DGCP (Direction Generale du Concours Public) to ensure the rules are respected. D. Assessmentof the Agency's Capacityto ImplementProcurement 1-InstitutionalArrangementfor Procurement 14. Components 2 and 3 o f the project will be implemented by the Department o f Rural Engineering within the MARD. A small coordination team headed by a coordinator will be established within this directorate and charged with day to day management o f the project. Procurement activities will be handled by the CBMP PIU, in particular the Local Environmental Initiatives Funds. The implementation and the follow up o f all procurement activities to ensure timely response will be done in close collaboration with the MARD / Department o f Rural Engineering. 15. In addition to this, a procurement assistant who has adequate qualification and experience will be recruited on a competitive basis and positioned within the Department o f Rural Engineering. Hidher role will consist in facilitating the work with the Procurement 47 Officer in CBMP PIU and supporting the Department on procurement issues which are directly relatedto producers' needs. 16. The Procurement Specialist will: (a) prepare and update the procurement plan for the project; (b) monitor the progress o f procurement; (c) assist the coordinator in the preparation o f bidding documents and advertisements for goods and works contracts and request for proposals for consulting assignments; and (d) advise the contract committee members on bid opening and evaluation processes. The Procurement Specialist will also advise the implementing agencies on contract management issues ifnecessary. 17. In hisher assignment, the procurement assistant will focus hisher role in (i) collecting and treating technical information useful for procurement; (ii)supporting the regional representative o f the MARD on activities related to the local implementation o f the program; and (iii)assisting the Department o f Rural Engineering in the follow up o f procurement activities so as to timely identify delays on the process and address them. At the closing o f the CBMP, the Procurement assistant will continue to support the food crisis emergency response program without any interruption. 18. In the implementation of Component 1, the WFP procurement procedures will be applicable inplace o f the Bank Procurement and Consultant Guidelines and the Bank will not exercise its regular procurement oversight through post and prior review. To mitigate any risks, the Bank will conduct intensified supervision o f the outcome and results o f the project. In addition, the Grant Agreement between the Bank and WFP will contain alternative provisions to the Bank standard clauses regarding audit, fraud and corruption consistent with provisions insimilar legal agreements betweenthe Bank and WFP. 19. The procedures proposed to be carried out by community participation under Component 2. 1will be further detailed in an Operational Manual, acceptable to the Bank, to be finalized by end o f October 2008. . 2- Capacityof the ImplementationAgency on Procurement 20. A detailed assessment o f the capacities o f the unit responsible for procurement (CBMP PIU) is not necessary due to the knowledge o f the existing one; the last Post Procurement Review has shown good performance o f the team even though minor shortcomings were found. The main findings are that the CBMP Procurement Officer, who i s efficiently assisted by his colleague from PSDRP (Private Sector Development and Rehabilitation Project), has had significant experience with the World Bank procedures and feels comfortable in applying them. As noted above, the responsibility for all procurement under components 2 and 3 o f the proposed project will rest with an existing CBMP PIU, which has been functioning since March 2006. The agent who i s currently responsible for procurement is qualified and has experience in fulfilling the procurement tasks which are required. E. RisksAssessmenton ProcurementandMeasuresto Mitigate 1- Mainrisksthe missionhasidentifiedinclude: Lack o f control from DGCP (DireqBo Geral dos Concursos Publicos) due to insufficient means to visit the project central and regionalprocurement activities 48 0 Insufficient involvement o f the beneficiaries inthe procurement process conducted by the representative o f the MARDat the regional level 0 Political interference at the central and regional level 2- Measuresto mitigatethe said risks 0 DGCP will establish a control program and inform the executive agency on the implementation o f this program; the agency will finance the mission excluding payment o f salaries. 0 The representative of the MARD at the regional level may collect the project beneficiaries' needs and associate them in the final selection and the procurement process (technical specifications and contract award decision). 0 The procurement officer located in the CBMP PIU should work independently and should refise any kind o f pressure. His performance should be measured on the basis o f the delays and the quality o f the job. 21. The overallproject riskfor procurement is medium. F. Procurement Plan 22. The Borrower, at appraisal, developed a draft procurement plan for project implementation which provides the basis for the procurement methods. This plan has been discussed between the Recipient and the Bank on August 7, 2008 and it i s available at the Coordination Unit located inthe Department o f Rural Engineering (MARD). 23. It will be also available inthe project's database and inthe Bank's external website. The Procurement Plan will be updated in agreement with the Project Team on an annual basis or as required to reflect the actual project implementation needs and improvements in institutional capacity. G. Frequencyof ProcurementSupervision 24. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the Implementing Agency has recommended at least two supervision missions to visit the field each year to carry out post review o f procurement actions. 25. To ensure that adequate recommendations are provided to the TCU on procurement aspects, the post reviews of procurement will be done on at least 25 percent of contracts below prior review threshold. H. DetailsoftheProcurementArrangements InvolvingInternationalCompetition 1 2 3 4 5 6 7 8 9 Ref. Contract Estimated Procurement P-Q Domestic Review Expected Comments No. (Description) Cost Method Preference by Bank Bid-Opening (yesho) (Prior / Post) Date 1 Vehicles and 200,000 ICB N A N A Prior 1November motor cycles 2008 49 2 Agricultural 45,000 NCB N A N A Post 15 October equipment 2008 3 45,000 Shopping N A N A Post 30 September Fertilizers 2008 4 45,000 N A N A Post 30 September Pesticides Shopping 2. Consulting Services (a) List o f consulting assignments: 1 12 13 I 4 15 16 I Ref. No. Description of Estimated Selection Review Expected Assignment cost Method by Bank Proposals (Prior I Submission Post) Date 1 Audit of the program 50,000 LCS Post December2008 2 Project Coordinator 36.000 IC Post September 15, 08 3 Agricultural 36,000 IC Post September 30,08 Specialist 4 Communication 30,000 IC Post September30,08 Specialist 5 Monitoring and 30,000 IC Post September 30,08 Evaluation specialist 6 SafeguardSpecialist 30,000 IC Post September 30, 08 7 RegionalProject 72,000 IC Post September 30,08 coordinators(3) 8 Procurement 18,000 IC Post September 30,08 assistant 9 Accountant 18,000 IC Post September 30,08 10 Operations Manual 10,000 IC Post September 30, 08 11 ESMF 5,000 IC Post October 30, 08 (b) Consultancy services for firms and individual consultants estimated to cost respectively the equivalent value o f US$lOO,OOO and US$50,000 and above per contract and all single source selection o f consultants with firms and individuals will be subject to prior review by the Bank. (c) Component 2.2 and 3: Provision o f technical support will include the recruitment o f consultants inaccordance to the Bank Guidelines. 26. All TORSand short lists for firms and individual consultants will be subject to prior review by the Bank, regardless o f the value o f the contract. 27. Short lists o f consultants for services estimated to cost less than US$75,000 equivalent per contract may be composed entirely o f national consultants in accordance with theprovisions o fparagraph2.7 o fthe Consultant Guidelines. 50 Annex 6: Implementationand MonitoringArrangements GUINEA BISSAU:Emergency Food Security Support Project ImplementationArrangements 1. Component 1 will be implemented by WFP and Component 2 by a TCU under the Department of Rural Engineering at the MARD.The TCU will be based inthe Department o f Rural Engineering which will be headed by a Project Coordinator and supported by essential staff, includingregional coordinators in selected regions o f the target area. 2. The TCU will be under the supervision o f the Project Steering Committee (PSC) that will be chaired by the Minister o f MARD. The PSC will be responsible for approving the annual work program, approving the annual budget, providing necessary guidance to TCU, addressing any emerging problems that are likely to affect project implementation and finally to provide oversight duringthe implementation o f this project. 3. The TCU will include a Project Coordinator, Agricultural Specialist, Communication Specialist, Safeguards Expert, and Monitoring and Evaluation Expert and other relevant positions to support project implementation. The project will use the existing procurement and financial management arrangements o f the CBMP. The project will finance the salaries o f externally hired staff, limited technical assistance and training, office equipment and vehicles, project monitoringand evaluation costs and operational costs. 4. At the regional level, the MARDwill establish a position of regional coordinator. The office o f the regional coordinator will have a maximum o f three positions, with Regional Agriculture Offices to facilitate implementation and operational management o f the project at the regional level, including a Regional Coordinator. The project will finance the salaries o f externally hired staff, and limited technical assistance and training, office equipment and vehicles, and operational costs. The project will also finance the costs o f periodic financial audits. 5. At the start o f the project, a Communication Strategy will be designed to stimulate demand for project support and increase participation by existing as well as new smallholder groups. The design o f the communication strategy will be contracted out to a specialized service provider. 6. Furthermore, the implementation arrangements and the project supervision will be designedto minimize elite capture and leakages. Measures to minimize elite capture include: effective supervision and monitoring to ensure that the benefits are going to the intended target group, representatives o f CBO/NGOs, and civil society included as part o f the approval committees, appointment o f a technical auditor to review quality o f service providers in the sub-projects as well as the management o f funds by beneficiaries. Additional measures will include the establishment o f low ceilings for sub-grants, and allocation o f funds to groups, not to individuals. ImplementationSchedule 7. The agreed implementation schedule for the project i s summarized intable A.6.1, 51 Alternativesconsideredand reasonsfor rejection 8. The following alternatives were considered and rejected inthe project design a. Implementation agency. There were three potential implementation alternatives as project implementation agency including: (i) linkingthe project to the CBMP; (ii) WFP and (iii) MARD. The first was rejected due to the risk of diluting the core emergency and food security and production focus o f the project. The second was rejected due to risk o f poor involvement o f government during implementation; and the third was rejected due to poor capacity o f the MARD to immediately address emergency issues. b. Focus more on emergencyfood supply. In a post-conflict situation, investment in the smallholder farmer groups is essential to ensure food production, and social stability inrural areas. FinancialManagement, pronuement,and Disbursement Arrangements for Components 2 and 3 9. Given the weak institutional capacity the MARD, the procurement and financial management for component 2 and 3 o f the project will be executed by the PIU o f the CBMP. 10. The financial management and disbursement arrangements for this project will follow the arrangements agreed for the ongoing CBMP. These include: budgeting; accounting; internal control; flow o f funds; financial reporting; and external audit. The PIUhas succeeded in recording, processing, preparing and submitting quarterly interim un-audited financial reports (IFRs). It has also succeeded in timely submission o f audit reports. During the mid- term review in February 2008, some financial management issues (IFR not acceptable, weakness in the monitoring o f budget and weakness in the internal control) were raised and an action plan proposedto strengthen the financial management system. The Bank's FMteam will continue to intensify its supervision o f the projects in the portfolio, including the proposed project; and provide FMimplementation support to ensure that established financial management procedures are strictly adhered to and where necessary strengthened. As o f June 2008, the CBMP PIU complied with fiduciary requirements and continued to record transactions properly. Also, it has successfully submitted withdrawal applications in the format requiredby the Bank. 11. Similarly to financial management, procurement activities for components 2 and 3 will be handledby the CBMP PIU and follow, inparticular, the arrangements and procedures established by the Local Initiatives Funds, FIAL. The procurement activities will follow a specific procurement plan prepared by the Borrower and agreed with the Bank during the project preparation. The implementation and the follow up o f all procurement activities to ensure timely response will be done in close collaboration with the MARD / Department of Rural Engineering. A procurement assistant, who has adequate qualification and experience, will be recruited on a competitive basis and positioned within the Department o f Rural Engineering. Hisher role will be to facilitate the procurement work with the Procurement Officer in CBMP PIU and supporting the Department on procurement issues directly related to producers' needs. Environmentaland Social Safeguards 12. The Project i s rated Category B. The environmental and social impacts o f the project activities are expected to be minimal, site specific, and manageable to an acceptable level. 53 The Environment and Social Management Framework (ESMF) will be prepared within three months o f project effectiveness. The ESMF will formulate guidelines and procedures for environmental and social screening. It will also provide guidelines for pest and pesticides use and management, as efforts, under the project, to boost food production and productivity may have pest and pesticide management implications. In addition, the ESMF will discuss institutional arrangements for implementation, along with any capacity strengthening and awareness raising measures deemed necessary for relevant stakeholder groups involved in implementation and monitoringo fproject safeguard measures. Arrangements for ResultsMonitoring 13. Baseline data will be collected inthe first year o f implementation. 14. Results monitoring will assist project management in making implementation decisions and generate lessons to effectively implement the project. Result monitoring will include two aspects: (iii) Impact assessment surveys, focussing primarily on the degree o f achievement o f overall project development objective; and (iv) Ongoing management information system (MIS) for assessment o f intermediate results o fproject components. 15. A detailed description o f project's output and activities monitoringprocedures will be developed inthe project implementation operations manual. ImpactAssessment Surveys 16. Impact assessment surveys aim to collect information about project's contribution to the enhancement o f participant smallholder farmers' agricultural production and income as well as to appraise how this is distributedby gender, social groups and geographical area. 17. In addition to the household surveys, a direct appraisal of income generated by participation in project activities will be carried out by collecting annual official accounting data (e.g. revenue, capitalization) o f a sample o f farmer associations and cooperatives. Perception o f change in income and capitalization will also be explored in further detail through in-depth interviews or focus groups with project participants. 18. Triangulation among these sources (surveys, farmer association accounts and in-depth interviews/focus groups) is expected to enhance the validity o f the overall impact assessment findings. PeriodicManagement InformationSystem 19. A strong project management information system is required to deal with the geographical dispersion o f this project. Beyond regular monitoring meetings, an annual internal evaluation and re-planning workshop among the TCU and its main institutional partners is recommended to assess progress made by the different project components and draft the work plan for the forthcoming year. Organizationalset up ofthe ResultMonitoringSystem 20. To manage the above data collection, processing and use procedures, an M&E unit will be established inthe national level TCU, with a full-time M&E specialist, responsible for (i)overseeing data collection; (ii)storing, consolidating and analyzing data, and providing 54 feedback at all levels (project manager, collaborating public institutions, private outsourcers, farmers associations etc.); (iii) providing training on specific M&E tasks to colleagues and partners; and (iv) facilitating project coordination self-assessment duringyearly and mid-term evaluationworkshops. 55 Annex 7: ProjectPreparationandAppraisalTeamMembers GUINEA BISSAU:EmergencyFood SecuritySupportProject Keyinstitutionsresponsible for preparationof the Project:M A D . TableA7.1: ProjectProcessingSchedule Planned Revised Actual RRC review July 25,2008 August 19, 2008 PIDto PIC August 5,2008 ISDS to PIC August 5,2008 September 5,2008 Appraisal August 5,2008 Negotiations August 7,2008 August 27,2008 RVP approval August 8,2008 September 10,2008 Plannedeffectiveness September 15,2008 September 20,2008 Mid-ternreview January 30,20 10 Closing date September 30,201 1 TableA7.2: Bank staff and Consultantswho workedon the Programincluded Name Title Unit 56 Annex 8: Country at a Glance GUINEABISSAU: Emergency FoodSecurity Support Project Guinea-Bissau at a glance 318/08 Sub- Key Development Indicators Guinea- Saharan LOW Bissau Africa income Age distribution, 2006 (2006) Male Female Population, mid-year (millions) 1.6 770 2,403 70.74 Surface area (thousandsq. km) 36 24,265 29,215 me4 Populationgrowth (%) 2.9 2.3 1.8 5054 Urbanpopulation(% of total population) 30 36 30 40-44 GNI (Atlasmethod, US5billions) 0.3 E48 1,562 30 34 GNi per capita(Atlas method, US$) 190 842 650 20-24 GNIper capita(PPP, international$) 830 2,032 2,698 1014 0 4 GDP growth("A) 1.8 5.6 8.0 30 20 10 0 10 20 3c GDP per capitagrowth (%) -1.1 3.2 6.1 DRrCBnt (mostrecent estimate,2000-2006) Poverty headcount ratioat $1 a day (PPP, %) 41 Povertyheadcountratioat 52 a day (PPP, %) 72 Under-5 mortality rate (per 1,000) Lifeexpectancy at birth (years) 45 47 59 Infant mortality(per 1,000live births) 124 96 75 3001 Chiidmalnutrition(% of children under 5) 25 29 250 200 Adult literacy,male (% of ages 15and older) 69 72 Adult literacy,female (%of ages 15and older) 50 50 150 Gross primaryenrollment, male (% of age group) 84 98 108 iw Gross primaryenrollment,female (%of age group) 56 86 96 50 Access to an improvedwater source (%of population) 59 56 75 0 Access to improvedsanitationfacilities ("4of population) 35 37 38 1890 iQ85 2000 2005 Guinea.0issau CISub-SaharanAfrica Net Aid Flows 1980 1990 2000 2006 * 1201 (US5 millions) NetODA andofficialaid 58 126 80 79 Growth of GDPand GDP per capita (%) Top3 donors(in 2005): France 3 9 7 16 Portugal 13 15 14 $0 Netherlands 14 6 11 3 0 Aid (%of GNi) 55.5 54.2 39.5 27.4 -*0 Aid per capita (US$) 73 124 59 50 -20 -30 Long-Term EconomicTrends w 95 w 05 Consumer prices(annual%change) 33.0 8.6 2.0 GDP implicitdeflator (annual%change) 11.5 30.2 3.3 -0.5 I --O-GDP -GDP per capita Exchange rate (annualaverage, localper US$) 0.8 33.6 712.0 522.4 Terms of trade index (2000= 100) 127 100 78 1980-90 1990-2000 2000-06 (averageannualgrowth %) Population, mid-year (millions) 0.8 1.o 1.4 1.6 2.5 3.0 3.0 GDP (US$ millions) 111 244 215 308 4.0 1.2 -0.2 PA of GDP) Agriculture 44.3 60.6 56.4 61.1 4.7 3.9 4.4 industry 19.7 18.6 13.0 11.3 2.2 -3.1 3.7 Manufacturing 8.4 10.5 7.1 -2.0 3.7 Services 36.1 20.6 30.6 27.6 3.5 -0.6 0.6 Householdfinal consumptionexpenditure 73.3 86.9 94.6 96.0 -1.2 2.0 -1.1 Generalgov't final consumptionexpenditure 27.6 10.3 14.0 17.7 7.2 1.9 -2.1 Gross capitalformation 28.2 29.9 11.3 17.2 12.9 -6.5 -2.8 Exportsof goodsandseivices 12.7 9.9 31.8 22.9 -1.7 15.4 4.3 importsof goods andservices 41.8 37.0 51.6 53.7 0.3 -0.4 -1.1 Gross savings .73.6 15.3 -2.7 2.2 Note: Figures in italicsare for yearsother thanthose specified. 2006data are preliminary...indicatesdataare not available. a. Aid data are for 2005. DevelopmentEconomics,DevelopmentData Group (DECDG). 57 Guinea-Bissau ~~ ~ ~ Balanceof Paymentsand Trade 2000 2006 IGovernance Indicators,2000 and 2006 (US$millions) Total merchandiseexports (fob) 62 61 Total merchandise imports(cif) 86 121 Voice and accountability Nettrade in goods and services -43 -96 Political stability Currentaccount balance -30 -35 as a Yoof GDP -14.0 -11.3 Regulatory quality Workers' remittances and Rule of law compensation of employees(receipts) 2 28 Control of corruption Reserves, includinggold 87 210 Central Government Finance 32006 Country%percentile rank (0.100) 02000 hiQhwvalUeS implybene!iafmgs (%of GDP) Current revenue(including grants) 27.4 31.5 Tax revenue 11.4 11.5 Currentexpenditure 33.8 29.0 Technologyand Infrastructure 2000 2005 Overall surpiusldeficit -16.4 -9.7 Pavedroads ("Aof total) 10.3 Highestmarginaltax rate("A) Fixedlineand mobile phone Individual subscribers (per1,000 people) 6 8 Corporate Hightechnology exports ("A of manufacturedexports) External Debt and Resource Flows Environment (US$ millions) Totaldebt outstanding and disbursed 804 993 Agriculturalland(%of landarea) 58 58 Total debt service 20 12 Forest area (% of landarea) 75.4 73.7 Debt relief (HIPC,MDRI) 515 Nationally protectedareas (% of landarea) .. 0.0 Total debt (%of GDP) 373.3 322.8 Freshwater resources per capita(cu.meters) .. 10,086 Totaldebt service("hof exports) 28.3 12.3 Freshwaterwithdrawal (% of internal resources) 1.1 Foreigndirect investment (netinflows) 1 2 CO2 emissions percapita (mt) 0.19 0.18 Portfolioequity (net inflows) 0 0 GDP per unitof energyuse (2000 PPP $ per kg of oil equivalent) :omposition of total external debt, 2006 Energy use per capita(kg of oil equivalent) (US$ millions) IBRD Total debt outstandingand disbursed 0 0 Disbursements 0 0 Principalrepayments 0 0 Other muiti Interestpayments 0 0 leted, 186 IDA Total debt outstandinganddisbursed 228 284 Disbursements 14 7 PrivateSector Development 2000 2006 TotaldebtseNice 4 6 Time requiredto start a business (days) - 233 Cost to start a business(%ofGNI per capita) - 261.2 sbursedandoutstandingpomolio 1 0 Time requiredto register properly(days) - 211 ch IFC ownaccount 1 0 0 0 Rankedas a majorconstraintto business ("A of managerssurveyedwho agreed) repaymentsfor iFC own account 0 0 Electricity .. 41.4 Access tolcostof financing .. 19.6 MlGA Gross exposure Stock marketcapitalization ("A of GDP) -- -- Bank capitalto asset ratio ("A) Note: Figures in italicsare foryears other than those specified. 2006 data are preliminary ..indicatesdataare notavailable. -indicatesObSeNatiOnisnotapplicable. 3 18/08 DevelopmentEconomics,Development DataGroup (DECDG) 58 16°W 15°W 14°W To S E N E G A L To Kounkané Sédhiou To Kolda To Kolda To Sédhiou Cuntima Cambaju Sare Bácar Bácar Pirada (300 m) Dungal Bajocunda Jumbembem Canhâmina Canhâmina To Canquelifá Canquelifá Ziguinchor To Diiattakounda Farim Cambaju Buruntuma To To Oussouye Kabrousse Ignoré Ignoré Canjambari Contuboel Camajábá Camajábá São Domingos São Barro Cacheu To Youkounkoun Olossato Mansaina Mansabá Mansabá Pitchie Varela Susana Gabu Olossato Mansabá Mansabá Cacheu Cacheu Gêba Gamamudo Jolmete Bissorã Bissorã To O I O Youkounkoun Gêba Gêba Uacaba C A C H E U Bafatá Bafatá G A B Ú Bula Calequisse Binar Encheia B A FAT Á Canchungo Mansôa Mansôa Cabuca 12°N Bambadinca 12°N Safim Nhacra Galomaro Caió Xime Porto Gole Corubal Quinhámel Quinhámel BISSAU Gêba Ganquecuta Ché Ché Ché Ché Jabedá Jabedá Garfanhapa Béli Béli ATLANTIC MansôaB I O M B O Dulombi Prábis Prábis BISSAU Enxudé Enxudé Corubal Vendu Iljante Fulacunda Boé Boé Leidi OCEAN Tite Ondame Xitole Q U I N A R A Guilege CanaldoGêba To Buba Koumbia To Ilha de São João São João Féfiné Caravela lha de Ilha de Ilha de Bolama BubaEmpada Quebo Saafa Caravela Carache Formosa Bolama To Abu I. das Bénnsané Galhinas Rio Grandede Arquipélago Gandembel G U I N E A dos Bijagós I. de Soga I. Madina de de Baixo B O L A M A Rubane Bubaque Tombali Bedanda Catió Catió T O M B A L I To Ilha de Tombali I. de Ilha de Boké 14°W Uno Uno Canogo Bubaque Ilha de Cachamba Balanta Songonha Eticoga Roxa Ilha de Ilha de Orangozinho Cacine To GUINEA-BISSAU Orango CacinCampeane e Boké I. de IIlha Meneque Joao Vieira 11°N Ilhéu SELECTED CITIES AND TOWNS do Meio REGION CAPITALS GUINEA- NATIONAL CAPITAL BISSAU 0 10 20 30 40 Kilometers RIVERS MAIN ROADS 0 10 20 30 40 Miles DECEMBER RAILROADS IBRD This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information REGION BOUNDARIES shown on this map do not imply, on the part of The World Bank 33415 Group, any judgment on the legal status of any territory, or any 2004 INTERNATIONAL BOUNDARIES endorsement or acceptance of such boundaries. 16°W 15°W