Document of The World Bank FOR OFFICIAL USE ONLY Report No. 52988-GH INTERNATIONAL DEVELOPMENT ASSOCIATION COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT FOR THE REPUBLIC OF GHANA March 1,2010 World Bank West Africa Country Department 1 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the World Bank's authorization. Date of Last CAS May 31,2007 CURRENCY EQUIVALENTS (As of February, 2010) US$1=9,256.70 GH$ (1.4198) FISCAL YEAR (January 1- December 31) ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Assistance AfDB African Development Bank AgDPO Agriculture Development Policy Operation BOP Balance of Payment CAADP Comprehensive Africa Agricultural Development Program CAS Country Assistance Strategy CBT Competency based Training cos0 Committee of Sponsoring Organizations of the Treadway Commission [internal control standards] CPPR Country Portfolio Performance Review DNIDA Danish Agency for International Development DPL Development Policy Operation DP Development partners EACC Economics of Adaptation to Climate Change EITI Extractive Industry Transparency Initiative EdSeP Education Sector Projecflrogram EFA Education For All (TF) EMCBP Economic Management and Capacity Building project EPA Environmental Protection Agency FOI Freedom Of Information (bill) GEDAP Ghana Energy Development Access Project GDP Gross Domestic Product GEF Global Environment Facility GFDRR Global Facility for Disaster Reduction and Recovery GIFMIS Ghana Integrated Financial Management Information System GFS Government Finance Statistics GNI Gross National Income GPRS Ghana Poverty Reduction Strategy GOG-DP Government of Ghana-Development Partners GSS Ghana Statistical Service 1 FOR OFFICIAL USE ONLY HIPC Highly Indebted Poor Countries ICT Information and Communication Technologies IDA International Development Association IDF Institutional Development Fund IFC International Finance Corporation IMF International Monetary Fund JICA Japan International Cooperation Agency LAP Land Administration Project LEAP Livelihood and Economic Advancement Program MDBS Multi Donor Budget Support MDG Millennium Development Goals M&E Monitoring and Evaluation MDRI Multi Debt Relief Initiative MIGA Multilateral Investment Guarantee Agency MMDAs Metropolitan Municipal District Assembly MSME Medium and Small Enterprises (initiative project) MTDF Medium Term Development Framework NHIS National Health Insurance Scheme NREG Natural Resources and Environmental ODA Overseas Development Aid PAF Performance Assessment Framework PFM Public Financial Management PPP Purchasing Power Parities PRGF Poverty Reduction Grant Facility PEFA Public Expenditure and Financial Accountability REDD Reduction of Emissions from Deforestation and Degradation RELC Research Extension Liaison Committee SLM Sustainable Land Management S WAp Sector Wide Approach WAAP West Africa Power Pool IBRD IFC ~ ~ Vice President: Obiageli Ezekwesili Country Director: Ishac Diwan Mary-Jean Lindile Ndlovu Task Team Leader: Katherine Bain This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. TABLE OF CONTENTS Country Assistance Strategy Progress Report for the Republic Of Ghana .................................... 1 1. Introduction ............................................................................................................................ 1 2 . Economic and Policy Developments ....................................................................................... 1 3. Progress Towards CAS Outcomes ........................................................................................... 4 4 . Adjustments in the CAS and Progress Implementation ............................................................ 4 List of Figures Figure 1: Ghana's Progress towards MDGs ................................................................................. 2 List of Annexes Annex 1: Active Portfolio and Revised Assistance Program ...................................................... 14 Annex 2: Forward Looking Results Matrix: FY 10-FY 12........................................................... 15 Annex 3: Overview of Results Achieved To-Date .................................................................... 25 Annex 4: GoG and DP Sector Groups and WB Division of Labor ............................................. 35 List of Appendixes Appendix 1 ............................................................................................................................... 39 Standard CAS Annexes ............................................................................................................. 46 ... 111 Country Assistance Strategy Progress Report for the Republic Of Ghana 1. Introduction 1. This Country Assistance Strategy Progress Report assesses implementation of the Bank's FYO7-11 CAS at mid-term. The CAS was aligned with Ghana's Growth and Poverty Reduction Strategy (GPRS 11) and the priorities identified by the Government of President Kufuor. It had three broad objectives, to: (i) sustain economic growth of at least 6 percent per year; (ii) surpass the Millennium Development Goal of halving poverty to 26 percent during this CAS period; and (iii) start to reduce inequalities. The CAS was aligned with sector specific results that contribute to the country's results matrix under the three pillars of: (i) raise private sector competitiveness, (ii) improve human development outcomes; and (iii) strengthen governance. The CAS was presented in two parts with the joint development partners assistance strategy (G-JAS) presented as Part I and the World Bank strategy as Part 11. 2. The objectives of the CAS remain relevant but the original lending strategy requires significant modification to respond to the new administration's priorities, as well as an evolving country context, namely large macro-economic imbalances and the discovery of oil and gas. In addition, the resources allocated to Ghana, under IDA 15, were significantly higher than predicted when the CAS was prepared. 2. Economic and Policy Developments 3. Building on earlier macroeconomic stabilization efforts, economic growth accelerated in 2007 and 2008. The year 2006 marked the end of the International Monetary Fund-backed stabilization program, and the successful completion of the Multi Debt Relief Initiative (MDRI) and Highly Indebted Poor Countries (HIPC) debt relief initiatives, which provided considerable fiscal space. One year later, the external budget constraint was further relaxed by accessing the international financial markets'. As a result, government expenditures grew rapidly, from 31 percent of GDP in 2005 (and an average of 30 percent between 2000 and 2005) to 42 percent in 2008. This expansion was used to support MDG-related programs (in education and health notably), and to close the infrastructure gap, especially in electricity generation capacity. After several years of public wage containment, the civil service wage bill also rose rapidly, reaching 11.3 percent of GDP in 2008, up from 8.5 in 2005. 4. Economic Growth and fiscal expansion allowed significant progress towards the MDGs. Available data by mid-2009 suggest that Ghana is on track to meet income poverty, hunger, primary completion, gender parity at school and access to water goals. While health goals are still off-track, progress recorded over the period 2003-8 was, nevertheless, impressive most notably with a large decline in under-5 mortality rate. In contrast, progress on access to improved sanitation remains disappointing. In November 2007, Ghana issued successhlly U S 7 5 0 million worth of Eurobonds (5 percent of GDP). 1 Figure 1: Ghana's Progress towards MDGs MDG7b: Access to sanitation MDG7a: Access to safe water MDG5: Maternal mortality MDG4: Child mortality MDG3: Gender parity at school MDG2: Primary education MDGlb: Hunger MDGla: Income poverty 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Progress needed to be on track Actual progress towards MDG 5. While growth was pro poor overall in Ghana in the last two decades, inequalities were not reduced and disparities in North-South poverty have risen. Most of Ghana's growth and poverty reduction has been located in the South while in contrast, the North recorded slow growth and no significant poverty reduction, despite some progress in education and health. As such, poverty alleviation and growth efforts will now need to focus much more on Northern-specific problems. Without a spatial focus, poverty could be broadly eliminated in the South by 2030 but two fifths of the Northern population would still be poor. Global warming complicates the challenges of the fragile Savanna ecological zone of the North, increasing climatic variability, and providing additional sources of vulnerability for the poor. 6. In recent years, accelerated economic growth did not reflect a major improvement in productivity. Economic growth rose to 6.3 percent between 2006 and 2008, up from 5.4 percent between 2001 and 2006. In retrospect, this acceleration can be related to demand pressures stimulated by expansionary fiscal policies, increased external support, rising remittances, positive terms of trade, and optimistic expectations related to the discovery of oil. Doing business slightly eased but did not suffice to offset growing syndromes of Dutch Disease and related low external competitiveness. Following some improvements in ease of doing business rankings in 2006 and 2007, Ghana saw its relative position deteriorate in 2008 and 2009. 7. A series of shocks in 2008 exacerbated the unsustainable nature of the development path and underlined the need for better control systems, as well as greater transparency and accountability of the executive. Rapid fiscal expansion in 2007 and especially in 2008 coincided with a sudden closure of access to international capital markets in September 2008 and, as a result, the Ghanaian economy was hit hard by the combination of a widening current account deficit and a contracting capital account. Fiscal expansion was partly the result of a combination of important exogenous shocks, including an energy crisis in 2006, floods and droughts in late 2006, and the rise in world oil and food 2 prices in 2008, prompting the Government to reduce the pass-through to consumers through higher subsidies and lower taxes. By end 2008, the current account deficit rose to 18.7 percent of GDP, and the fiscal deficit to 14.5 percent - and actually more if the large expenditures arrears, accumulated in 2008, are accounted for. This sudden and unexpected downturn coincided with the election of a new Government which had to embark on a multi-year fiscal stabilization plan, with the support of international financial institutions. In doing so, it is facing the challenge of balancing the need to deliver on campaign promises while committing to more prudent spending, in the context of a divided political arena where the ruling party holds a slim majority in Parliament. The new Government and civil society now recognize the need to improve transparency, executive accountability and oversight on public financial management systems to avoid fiscal recklessness going unchecked in the future and to turn the oil discovery into a blessing rather than a curse. 8. In 2009, the economy has started to show signs of stabilization, but challenges on the macroeconomic front remain substantial. Lower fiscal deficits, the depreciation of the Ghana Cedi, low oil prices, high gold and cocoa prices, and good rains all contributed to stabilize the economy. By midyear, the exchange rate began to stabilize (after a fall of 50 percent against the US dollar), and inflation started to decelerate. The fiscal deficit and Balance of Payments deficits closed the year lower at 10 and 12 percent of GDP respectively. But the disclosure of unexpectedly high public expenditure arrears, accumulated during 2008, and the weak financial situation of several commercial banks and energy-related state-owned enterprises imposed additional constraints to the medium term macroeconomic targets adopted just months earlier2. The 20 10 budget, which was submitted to Parliament in November 2009, revised the fiscal deficit target, initially envisaged at the signature of the Poverty Reduction Grant Facility (PRGF) at 6 percent of GDP, upwards to 7.5 percent of GDP. The target of increasing revenues by about 4 percent GDP will be challenging and it is still unclear to staff how this target would be met. 9. The arrival of oil in 2011 provides both important opportunities, but also risks. Public expenditures are likely to rise even further, to well above 40 percent GDP, and this brings more to the fore the challenge of improving the quality of expenditure. There is a clear recognition of the need to pursue stabilization efforts over several years, while encouraging growth through supply-side reforms (productive infrastructure, agricultural modernization, private sector development). Oil revenues are projected to start flowing in 201 1 and could be instrumental in supporting a new growth agenda. Efforts are ongoing to ensure a developmental use of oil revenues through sound legislation and strong institutions that ensure an effective, transparent and accountable use of these new resources. But pressures to increase public wages and subsidies, as well as existing structural ineficiencies if left unattended, would lead to use oil revenues for consumption rather than to finance much needed investments. There is also an urgent need to improve the quality of spending, including a better targeting of programs meant to support the poor, to strengthen the management and control systems, and to improve the effectiveness of public servants. Improving stabilization efforts in the face of volatile oil revenues is also key since a return to a cycle of boom and bust would have negative implications for social cohesion and growth. In addition, the likely appreciation of the real exchange rate and the related risk of lost agricultural competitiveness are significant, and would reduce the potential for poverty alleviation through the modernization of agriculture. To mitigate these risks, policy-making and public expenditure management will have to impr6ve substantially. The role of civil society in influencing policy and in shaping well informed developmental debates, as well as tracking actions, has thus become more crucial, and underlies the importance of access to timely and unbiased information on public spending and developmental results. * The review at Parliament in August 2009 of the budget 2009 execution at mid-year revealed a stock of outstanding public expenditure arrears and commitments largely exceeding that budgeted (US$ 1.2 billion or 7.9 percent of GDP, against 2.5 percent budgeted). 3. Progress towards CAS Outcomes 10. Progress towards the CAS outcomes has been largely positive, with notable advances in agricultural crop production, natural resources governance, land management, household electrification, ICT, primary education completion, social protection, and safe water supply. Weaker progress was registered in private sector development, transport, health, and public sector. Overall, out of a total of the 28 indicators selected to measure progress towards achieving the CAS objectives, approximately 70 percent show good progress, with 36 percent of the indicators having already reached their target. The picture with regard to the milestones appears less positive but this reflects the weak alignment between milestones and CAS outcomes rather than lack of progress. The World Bank?s program has provided the bulk of its support for Pillar 1 (60 percent), with 35 percent of commitments for Pillar 2 and 5 percent for Pillar 3, which mirrors the distribution among pillars in the national budget. The results matrix summarizing progress made to-date is shown in Annex 3; Appendix I contains a detailed review of the specific progress made under each of the three pillars. 11. Since 2006, the disbursement rate of the Ghana portfolio has steadily fallen and is now below the regional average, detracting from additional results that could be achieved. A number of factors have contributed to the poor performance of the investment portfolio, including: (a) a high number of infrastructure projects, which are inherently slow-disbursing, amid slow procurement readiness and weak client capacities in disbursement planning and execution; (b) reliance of task teams on traditional, arms length supervision tools - with a view to mitigating Bank?s exposure to reputational risks - rather than direct implementation support and capacity building; and (c) no project readiness filter. The long political transition has worsened the situation. The country team, and senior management, has raised this issue repeatedly with Government officials. A series of portfolio reviews with the relevant MDAs and the new Chief Director of the Ministry of Finance was carried out in early February and specific steps to improve project performance and overall portfolio coordination agreed upon. The decentralization of lead financial management and procurement staff also provides the necessary tools to help address this challenge. In addition, the management of social and environmental safeguards had also been weak, as reflected in two Inspection Panel cases. A work plan has since been in place to considerably strengthen the oversight of Bank policies. 4. Adjustments in the CAS and Progress Implementation 12. While the overall objectives of reducing poverty and inequality set out under the CAS remain relevant, its content needs to be adjusted to the more difficult macroeconomic situation, the new administration priorities, and the discovery of substantial amounts of oil and gas. The Ghana Poverty Reduction Strategy 11, which ended in December 2009, is being replaced by a new Medium Term Development Framework 20 10-2012. The updating of the national development plan provides the new Government with the opportunity to incorporate its own priorities into medium-term planning, while responding to the country?s emerging priorities. While the forthcoming Medium Term Development Framework (MDTF) draws on the longer-term 2015 plan which was developed under the National Development Planning Commission (NDPC) in 2008, it gives additional weight to areas highlighted under the National Democratic Congress (NDC)?s manifesto, and in particular, good governance, water and sanitation, agriculture, and climate change. The new Government is also supporting a more spatial 4 approach to development planning as a means to addressing both lagging regions, especially the North, as well as promoting growth poles in areas with high potential, and in particular, the Western Corridor, the Accra plains, and Accra city. The development of the Western Corridor is also meant to ensure that local communities benefit from the discovery of oil. The development of the Accra Plains, and other areas, are being seen as a way of attracting commercial agriculture and improving agricultural productivity. Plans to improve the growth of Accra are undertaken with the view of promoting the city as a regional hub within West Africa, during the oil era. The public expenditure review, to be delivered in FY10, will support the NDPC in better costing sector interventions and, thus, producing a fully costed development strategy - something that has been missing in the past. 13. The World Bank proposes to adjust its strategy accordingly with the addition of seven new instruments and the scaling up of four others. These adjustments are made possible due to the larger than foreseen annual allocation of IDA resources for Ghana which has risen to US$450 million per year. The new operations planned to respond to the administration new priorities are in oil and gas, commercial agriculture, fisheries, energy, water and sanitation, skills and technology, and statistics development. Two cross cutting issues are identified for mainstreaming going forward, namely social accountability and gender. The effort on regional integration will be intensified and efforts to start dealing with water resources development and climate change will be initiated. The Bank will reduce the number of sectors in which it operates with a view to becoming more focused on issues of comparative advantage relative to other development partners. A more strategic collaboration in agriculture, energy, and SME development is envisaged with IFC and MIGA. 14. To ensure a smooth transition from IDA 15 to IDA 16 and deliver the large portfolio now under preparation during the remaining period of the present administration, it is proposed that the present CAS be extended to FY12. A new CAS would be prepared towards the end of the present administration, ensuring some flexibility for the incoming administration. Annex 1 provides a summary of the revised lending and non-lending deliverables with amounts already approved, under this CAS period, updated. Some pipeline projects may have to be moved further into the IDA16 period3. Annex 2 provides a new results framework, drawing on lessons from the original CAS results matrix and selecting a more streamlined set of higher level results that can be directly linked to Bank interventions. This revision was carried out to take into account the adjustments in the CAS. At the same time, the quality of the matrix was improved by weeding out indicators that did not have baselines andor those that failed to meet SMART criteria (specific, measurable, attributable, realistic and time-bound). All indicators are taken from the projects results frameworks, to reduce the reporting burden and ensure alignment between expected results and the portfolio. 15. In order to respond to the new context, the new administration has requested additional, front loaded budget support, as well as an investment intervention in public financial management, as it aims to regain control over a difficult fiscal environment, as well as a scaled up social protection investment project to protect the poor from responses to this new context. The World Bank has put together a large two-tranche budget support operation in FY09. Additional budget support credits are also foreseen for the first quarter of FYI 1 and for FY 12. While four different sector budget support operations were foreseen in the CAS, two have been delivered, and we propose to consolidate future plans so as to remain with two sector programs - one for agriculture, and one for natural resources, in order to reduce transaction costs. Overall, the share of budget support in new lending will remain roughly similar to what was foreseen in the CAS. In the future, after fiscal stabilization has been achieved, general budget support will resume regular, annual contributions of about US$lOO million, All lending amounts in the text for FY 12 are indicative and subject to IDA16 allocation. 5 while sector budget support will rise. These budget support operations will be informed by regular Public Expenditure Reviews (PERs), as well as the forthcoming poverty assessment. The PERs will shift to a more in-depth analysis of the budget at the sector level and the poverty assessment will focus on regional disparities, mirroring the Government?s own interest in spatial development. Ghana has received US$49m from the Crisis Response Window and this will be applied to the proposed Social Opportunities project (FY 10) to support Government in establishing a more comprehensive social protection strategy while improving targeting in poverty spending, increasing access to conditional cash transfers nationwide as well as access to employment and cash-earning opportunities for the rural poor during the agricultural off- season. 16. The World Bank is also responding favorably to the request for strengthening of budget control and financial management systems, through new investments in public financial management and budget systems, as well as support to other national stakeholders to create a more open environment for expenditure management. The new administration has presented the underpinnings of a sector wide strategy - in the form of a Ghana Integrated Financial Management Information System (GIFMIS) Charter - for public financial management to development partners and has asked the Bank to rejoin this sector to provide international best practice and the needed financial resources. This support will take the form of an additional financing for the e-Ghana project to be presented to the Board in the fourth quarter of FY 10, and is being done in coordination with support from DFID and the European Union. Combining revenue and expenditure systems within one project will provide a more coherent fkamework for budget management and ensure systems are well integrated. In addition, the World Bank is also supporting, through its budget support, a number of reforms related to transparency and accountability, including the presentation of Freedom of Information bill (FOI). A number of practitioner workshops have been organized to help Ghanaian civil society, journalists and parliamentarians learn from peers in other countries in areas such as institutional arrangements for implementing a FOI law, budget literacy for journalists, and the implications of the freedom of information bill for the governance of the oil and gas sector. The Development Dialogue Series, which is hosted by the Ghana Office, is providing a forum for more informed debates on the main issues of the day. 17. The country team is responding quickly to the discovery of oil and gas in commercial quantities. The front-loaded general budget support has helped lay out a legislative and policy agenda in the sector and the World Bank is providing technical support through analytical work on the potential impacts of oil and gas and helping government in the design of the new legislation. Along with other development partners, the World Bank is supporting the new administration in honoring its commitment to transparency and accountability in the oil and gas sector by adjusting the EITI institutional framework to the oil and gas sector (beyond mining). A non-lending advisory piece on the Western Corridor will provide support for the initial vision for a growth corridor in the Central and Western region and feed into the IDA capacity development operation for oil and gas. This credit, foreseen for FY 10, seeks to develop Government?s capacity to manage and oversee the new oil and gas industry, beginning with a government-led process that reaches out to all stakeholders in the design, implementation and oversight of new legislation, policies and institutions in the sector. The credit, thus, addresses government?s commitment to good governance of the sector, through strong revenue management and transparency and accountability efforts. In addition, support for existing oversight institutions such as the EPA, Ministry of Energy will be provided. A proposed IBRD enclave loan4 to finance gas infrastructure that is crucial to Ghana?s desire to profit from its newly found reserves is proposed in FY 1 1. This loan would permit local gas to replace imported oil used for power generation, thereby saving significant foreign exchange resources and lowering the cost of electricity production. The World Bank Group is coordinating closely 4 Such an operation will be subject to the availability of appropriate credit enhancements for IBRD. 6 and developing a joint strategy for this sector, since IFC is already invested in two of the partners in the Jubilee oil field and has also signaled its support for the gas infrastructure. 18. With the arrival of oil and gas, we are also considering extending the NREG development policy series, foreseen under the original CAS, to include the emerging policy and institutional reform agenda in the oil and gas sector. The new series of development policy loans, planned to start in FY 12, will focus on the whole value chain of natural resources, following up on reforms initiated under the first series of NREG, and building on the findings of the EITI++ scoping paper, finalized in August 2009. The scoping paper identifies a number of areas for policy and institutional support such as the strengthening of a new, independent regulator in the petroleum sector, better revenue management across extractive industries sectors, reforms to improve local content, and increased transparency and accountability through vertical, as well as horizontal mechanisms of accountability. It will also provide complementary support to the (new) investment operations in oil and gas, as well as the fisheries sector and the on-going and new land administration projects. A capacity building project for the oil and gas sector is also under preparation to improve the ability of the institutions involved in regulating, taxing, and developing skills in this sector. 19. The Medium Term Development Framework and the Food and Agriculture Development Plan (FASDEP) and the action plan resulting from the recently hosted CAADP process, all illustrate the new administration's commitment to sustained agricultural growth. This is timely given that the global food price crisis which negatively affected many net food consuming households whilst also reinforcing the prospects of Ghana as a regional food producer. In addition, the potential loss of competitiveness associated with the oil discovery is a real risk. The CAADP process in Ghana provides an impetus for refining the policy agenda and articulating a clear implementation strategy. In response, the Bank proposes to terminate the current series of agriculture development policy operations after the second operation and will immediately begin preparation of a new series. In addition to the budget support and the on-going and planned investments in land administration and fisheries, a new ambitious commercial agriculture operation is foreseen for FY 11. This new operation will support private investment in commercial farming through the expansion of out-grower schemes linking small- holders with larger commercial enterprises and the expansion of irrigation schemes. This is seen as a sector for a joint strategy with IFC, which will contribute both advisory services and investments. IFC will continue to address the constraint of inadequate agricultural credit to the farming and agribusiness sector by Ghana's commercial banks. In FY2009, IFC entered into a partial risk sharing arrangement, with Standard Bank Ghana, to increase its lending to the cocoa sector by US$30 million. IFC will look to expand and replicate this facility to other commercial banks and commodities. Also, IFC will support the efficient delivery by the private sector of key inputs, such as seeds and fertilizer. 20. An ambitious reform program in the fisheries sector is also being developed and the Bank is proposing to support it through the new series of the West Africa Regional Fisheries Program in FY12. The program aims at improving efficiency and sustainability by reduced marine overfishing and increase aquaculture in the Volta Lake. It also aims to build effective fisheries management capacity and to invest in value addition. The proposed project will complement the institutional reform agenda for fisheries, laid out under the agriculture development policy loan, with investments focusing on the strengthening of the country's capacity to sustainably govern and manage its fisheries, reducing illegal fishing, and increasing the scope, value, and profitability generated by fish resources. 21. With future access to low cost gas and the recent progress in expansion of electricity generation capacity, Ghana proposes to greatly increase its electricity exports to neighboring countries and this paves the way for additional investments in regional and national energy projects. As a result, the high voltage inter-transmission link with Burkina Faso, supported under the 7 proposed WAPP 111, provides the physical means to achieve this objective while also benefitting Burkina Faso which currently depends on high-cost oil-based generation. At the national level, an additional financing of the Ghana Energy Development Access project (GEDAP) is foreseen to support the new administration in its desire to improve the quality of electricity supply in densely populated urban areas where rapid urbanization has led to a fast increase in demand, overloading the antiquated system. Under the existing GEDAP, a technical review of the partially completed public power plants, that used funds from the Eurobond, will be carried out, in association with IFC, with a view to finalizing them either as public private partnerships or as complete divestitures. 22. With Ghana on track to meet the MDG on water, but woefully behind on sanitation, the new administration is keen to continue investments in water to keep up with the increasing demand, while providing the necessary support to address Ghana's poor standing in the area of sanitation. As such, a new investment of US$75m is being proposed under the Sustainable Rural Water Services Project. This project will include a community-based approach to both water and sanitation and will focus on a more sustainable approach to investments in the sector through fees and/or a transparent mechanism for subsidy, and maintenance schemes. The approach aims to promote a behavioral change in communities and to increase demand for sanitation, while providing some government support for the construction of sanitation facilities. The project will focus on three of the eight regions, with a view to influencing developments in the rest of the country in ways consistent with the emerging decentralized framework for service delivery. A new project (FY12, about US$lOO m) is also being prepared for urban water and sanitation that will provide support to low income peri-urban and urban communities that have historically lagged behind access to safe water supply and improved sanitation. The project will support private sector investments in water treatment possibly through Partial Risk Guarantee and MIGA guarantees, and public investment in sewage facilities and water connections to poor communities in the peri-urban areas, particularly in Accra. The project will also support the establishment of a national sector information system to track access to water and sanitation as well as the quality and sustainability of the services provided. 23. The Skills and Technology Development Project, proposed for FY12, will respond to Ghana's low level of competitiveness that is attributed, in large part, to the low uptake of new skills and technology by the private sector. The project will support the new administration's program to stimulate skills and technology-based development in key economic sectors. It will do this by establishing demand-driven institutional and financing mechanisms that support formal and informal training and development and adoption of new technologies. It will support collaborative projects between firms, universities, and research institutes to provide firms with appropriate technology, generate improvements in the quality of skills training through introduction of a national competency-based training (CBT) framework, and strengthen the role of the private sector in designing and executing training programs, in partnership with training providers. The project will build on lessons learned from earlier projects in this sector, including the Vocational Skills and Informal Sector Support project, which closed in 2001, and will address cutting issues relating to skills development activities underway in the SMEs, transport, agriculture, ICT, oil and gas, and fisheries sector, with support from other investment projects. It will be developed in close cooperation with other bilateral agencies including DANIDA, JICA, and others. The three main instruments to support private sector development: MSME, EMCB and LAP will have follow up operations when they expire in FY12. 24. Finally, a new program of support for the Ghana Statistics Development Plan is envisaged for FY11 to provide more targeted support towards a results based approached to public policy formulation in Ghana. This investment operation will continue to be supported by actions at the institutional level under general budget support, as well as through the Statistics for Results Facility Catalytic Fund and IDA. It will focus on modernizing and streamlining the Ghana national statistical 8 system so that it is sufficiently resourced in terms of human resources, as well as essential tools and infrastructure to provide reliable and timely statistics, in accordance with international standards. The program will help to address the underlying legal, policy and institutional issues affecting the ability of the Ghana Statistical Service (GSS) to produce good quality data. It will support GSS and the Ministries, Departments and Agencies to improve data development and management and ensure that adequate physical infrastructure and equipment are in place to enhance data production and dissemination. Efforts to increase the demand for data through strengthening government M&E systems will also be covered. 25. In addition, to the proposed adjustments in the lending strategy to meet the country's new priorities, the AAA program also needs to adjust to the new economic and political environment. During the first half of the CAS period, analytical and technical assistance efforts focused on private sector development, gender, growth, job creation, geographical disparities, public financial management and, more recently, oil. In the second half of the CAS and in order to support the new priorities identified above, the AAA program will focus on the strengthening of country systems and, particularly, public financial management and effectiveness, with country status reports on health and education and general public expenditure reviews. In addition, a poverty and social impact of electricity tariffs, commercial agriculture, the economics of adaptation to climate change, and social accountability will all feed into new lending opportunities. To increase the World Bank's capacity to adapt quickly to changing realities, the country team will increasingly resort to just in time policy notes to complement more formal and fully blown economic and sector work. 26. In addition to these proposed adjustments to respond to an evolving country context, three operations, originally proposed under the CAS, are being scaled up and adjusted in order to respond better to the new administration's priorities. The f r s t project to finance capacity building for service delivery is now being prepared to support the new administration's ambitious reform program, led by the Ministry of Local Government and Rural Development. After a rich and inclusive national consultation process which culminated in mid January 20 10, the new administration has announced plans to move towards a more decentralized framework for service delivery, with a reform agenda that includes political, fiscal and administrative devolution. The World Bank, has joined other development partners in the decentralization sector group to support Government in preparing a SWAP approach which will complement existing support from development partners, mainly in capacity building, with support for institutional and policy reform, as well as investments to attract and. provide service providers at the local level with the necessary tools and systems for governance. The World Bank is preparing this new credit in close coordination with the European Union with a view to sharing preparation and supervision costs, as well as harmonizing support around this agenda. On-going health, education and water projects will ensure that communities continue to receive public services in these sectors, during this transition period. 27. The second is an investment operation in social protection (foreseen in the CAS as a DPL), now proposed for the end of FY10. This project will address regional inequalities by complementing existing social protection interventions with a labor intensive works program. It will also seek to strengthen the targeting and effectiveness of the main social protection programs in the country. The World Bank has been asked to come back into this sector, which it exited in 2004, to support government in better understanding how best to protect the vulnerable from a series of crises, target better social expenditures, and initiate a conditional cash transfer mechanism. The project responds to Government's new focus on lagging regions, with support for the development of needed small scale development infrastructure in the poorer parts of the county, with a special focus on the Savannah area in the North of the country. The project will also provide capacity building support to programs under the national social protection strategy, including the LEAP to improve their efficiency and effectiveness, following up on the recommendations of the poverty analytical work done in 2009. 9 28. Third, the new administration has asked for scaled up support for the transport sector. A new project which was presented to the Board in June 2009 was scaled up with an additional US$125 million, to support the expansion of the national roads network, including in the Western corridor and Accra. This project will support Government in addressing the urgent need to provide adequate resources for road maintenance. The new administration also requested that additional resources be provided to the Department of Feeder Roads with a view to rehabilitating feeder roads critical to improving agricultural productivity. The Bank is working with the Department of Feeder Roads to find labor intensive solutions for road maintenance and thereby create jobs for the poor, while improving the quality of these roads. 29. In addition to these proposed adjustments in instruments, the Bank is also proposing to mainstream good governance and gender. The development of increased transparency and accountability in Ghana is an important principle in the administration of President Mills and the World Bank is proposing a number of initiatives, including increased transparency over its own portfolio through participatory monitoring of its own projects, starting with the water and sanitation sectors. The publication of ISRs in the future will facilitate the work of the country team in increasing the transparency and accountability of Bank investments. In addition to the support of more traditional, horizontal mechanisms of accountability through PFM systems and the auditor general, the Bank program is also proposing to support a variety of complementary, vertical accountability mechanisms. Under its fi-ont- loaded budget support, the Bank has supported the passage of the Freedom of Information act as well as the extension of the EITI principles to the oil and gas sector and will now provide technical assistance support to implementing this agenda - both with Government and citizens. In addition, a pilot of user scorecards undertaken in FY10, which establishes a baseline of user's perspectives on a range of public services in Accra will be repeated and scaled up to new urban centers. The Governance Partnership Facility, which approved a Ghana proposal in January 20 10, will support this mainstreaming of transparency and accountability agenda. The country team is also engaged in a rich, proactive external engagement strategy that aims to transfer knowledge to government and nongovernmental actors, promote issues-based public debate and provide fora for creating local consensus and coalitions in support of reforms. 30. The CAS will seek to mainstream gender as a cross cutting issue. In order to understand better gender differences in Ghana and assist government in developing the appropriate policy response to increase the economic empowerment of women, the Bank is in the process of initiating a number of new activities. First, the Ghana Gender Assessment is being updated in the forthcoming poverty assessment. Second, the Bank in coordination with MIDA and local partners will conduct a rigorous impact evaluation with gender differentiated analysis of the pilot land title registration currently taking place. Third, the Bank will support and evaluate a pilot financial literacy intervention for women, which will provide evidence on the returns to this kind of training and its potential complementarities with increased property rights. Fourth, as part of the forthcoming social opportunities project, the Bank will provide technical support to carry out a gender differentiated impact evaluation. Taken together, these activities will provide rigorous evidence over the coming years to assist government and development partners to make gender sensitive policies, particularly in the rural areas. 3 1. In line with the Africa Region's strategy of making Development Climate Resilient, going fonrard the CAS will initiate efforts to support climate change adaptation and mitigation. The World Bank is undertaking a study on the Economics of Adaptation to Climate Change (EACC) to provide guidance on the adaptation required for Ghana in a 2010 to 2050 horizon to maintain projects economic growth. Natural risks and disasters are not new to Ghana, but will be exacerbated by the effect of climate change in the country, including frequency of severe weather events such as floods and droughts. An on-going Water Resources Management Note is being prepared to increase the team's understanding of how to use water assets to improve the resiliency of growth. A GEF project will pilot the 10 use of small reservoirs, SLM, and high yield agriculture in the North, and will plan for a scaled up watershed management strategy in the future. The Bank will continue to be engaged in the climate change dialogue and disaster risk management in support of the Government's Natural Resources and Environmental Governance Program (NREG), as well as through the Global Facility for Disaster Reduction and Recovery (GFDRR). The Bank will also work with the country to position itself well in terms of current and future financing mechanisms, as they may become available. A review of Carbon Finance opportunities in Ghana, completed in FY10, showed that major opportunities exist in the Reduction of Emissions from Deforestation and Degradation (REDD), as well as in the avoidance of gas flaring, both of which will be supported in the future. 32. The Bank has been increasingly supportive of the regional cooperation agenda but needs to do more. There are a total of seven existing and planned regional projects in the areas of transport, energy, fisheries, and agriculture. We are also exploring new projects in ICT and Trade Insurance. Cooperation between CDs in West Africa is being increased to improve the quality of the portfolio, as projects status tend to adjust to the state of the weakest link. More importantly, there is a new push to use the emerging regional assets to improve regional trade, as a means to creating larger markets and, thus, improve efficiency and FDI, while lowering production costs. In doing so, the Bank will be working closely with ECOWAS, as well as key donors in the field such as the EC, USAID and DFID. 33. Going forward, the Bank is laying the foundation for improved disbursement rates and reduced disbursement lags, although sustainable improvements will require new government leadership in portfolio monitoring. The adoption of the following measures are proposed: (a) close follow up on specific steps agreed to in the CPPR and a system put in place to hold MDAs for low proactivity; (b) a more aggressive screening of project readiness with the use of Project Preparation Facility (PPF) to support implementation readiness of new projects entering into the pipeline; (c) increase the proactivity of task teams, including the disbursement team, in pursuing risk-based implementation and disbursement-related support for projects; and (d) adoption of report-based, rather than statement of expenditure-based, disbursement arrangements for most new operations, supplemented by client capacity enhancements by project launch. Since most projects in the portfolio have reached their third year of implementation, accelerating implementation and hence disbursements is key to ensure that closing date extensions do not become widespread. 34. Ghana is piloting government PFM and country procurement systems in line with the Board approval of pilots in 2005. The Bank has now carried out a formal assessment of the readiness of Ghana's country systems and is in the process of selecting investment projects for pilots. In the case of PFM, the conclusion of the draft assessment calls for further improvement of the government PFM systems and in procurement, while the formal assessment is still ongoing, the next steps will result in the identification of one pilot project with significant bidding through international competitive bidding, that would be done entirely through country systems without prior review by the Bank. This will take place in FYIl. 35. Ghana continues to enjoy the support of a range of development partners, as well as nontraditional partners, and the Government of Ghana-Development partners (GOG-DP) relationship continues to evolve, as outlined in the new Aid Policy Paper. At present, official development assistance to Ghana (grants and loans) finances 24 percent of Government spending and will remain an important, but decreasing, proportion of revenue with the onset of oil. Non-traditional partners are also likely to take a more prominent role. A recent review of the Ghana Joint Assistance Strategy (2007-2010) finds that progress was made in a number of areas of harmonization but also underlined weak Government leadership, as well as low quality of dialogue between development partners and the Government, as areas of concern. A long-awaited Aid Strategy was presented in December 2009. It 11 commits the Government to a more active role in sector dialogue and acknowledges the need for a modified approach to general budget support that combines predictability with flexibility. In this context, a recent retreat of all the DPs providing multi donor budget support have agreed to open a flexible window for support during extraordinary times, while adding a more strategic level of dialogue to capture cross-cutting priorities that had been missing in the more technical, sector focused dialogue around general budget support to-date. This process was finalized at end January 2010 and has resulted in the significant strengthening of the Performance Assessment Framework (PAF), with support for on-going reforms in the areas of public financial management, public sector reform, protecting the poor from expenditure cuts and ensuring a solid revenue management framework for oil and gas. With this updating of the PAF, the Bank can now fully align its support through a harmonized process. 36. The World Bank is committed to the principles of harmonization through the decentralization of key staff and active participation, including leadership, in key sector working groups. At present, 60 percent of the Ghana portfolio is managed by staff based in country. We continue to move more staff to the front line and aim at managing 80% of the portfolio from the field by the end of the CAS period. The decentralization of staff has enabled the Bank to participate actively in all sector working groups where it provides support. Bank Staff now, more frequently, take on the leadership of sector groups. We presently lead the MDBS, energy, and oil sector groups, and until recently, the agriculture, water and sanitation and education groups. The Bank is the permanent co chair of the Heads of Mission group which brings the Ambassadors together and chaired the Heads of Cooperation Group for the first quarter of 2009. A strong partnership has been developed with the European Commission and the African Development Bank, under the Limelette agreement, with joint work in the area of country systems, budget support and infrastructure. 37. As a response to the recent joint review of the Ghana Joint Assistance Strategy and the World Bank's commitment to division of labor, the Bank is reviewing its participation in sector groups, with a view to reducing the number of sectors in which it participates and focusing on deepening its engagement in a more select number of sectors. Annex 4 shows the World Bank's present sector participation as well as its exit and entry strategy of sector working groups in the future. The Bank has consulted broadly with other partners and, of course, Government and agreed that based on others' projected activities and the value added of the World Bank, a phased reduction of sector participation from 13 sector groups to 10 in 2010 and 8 or 9 in 201 1 is possible. It has also paved the way for other development partners to present exit and entry strategies that will ultimately lead to a better planned shared staffing strategy among agencies. Of note, is that the Bank participation in the health sector which will be defined more narrowly around health systems finance, as long as project performance improves. There will be no new lending in basic education and under the private sector working group, we will rely much more on IFC, while focusing in the future on niche products such as skills and technology. In the medium term, the Bank will phase out of separate activities in environment and natural resources, instead mainstreaming our work in this cross cutting area in other sectors, such as energy, oil and gas. The Bank will rejoin the social protection and vulnerability sector group, at the request of government and other partners, to scale up initiatives financed until now on a smaller scale by other partners, and to provide the missing pieces of a more comprehensive approach to social protection. After initiating and even leading sector work in areas of country systems, such as monitoring and evaluation, and rejoining the public financial management group to support the present stabilization efforts, the Bank will exit and allow other development partners to provide continued support. Co- location with IFC, planned for around 2013, will facilitate the deepening of this partnership. 38. Risks and Opportunities. The Country Office recently undertook a C O S 0 risk and opportunity assessment and this has provided the country team with an objective assessment of the operating environment for the proposed strategy. The exercise found a number of strengths in the operating environment, including a strong relationship with the client and donors, a cohesive country team and, in 12 general, adequate resources. A number of challenges and risks were also identified. In terms of the country context, these include: (i) the impact of the discovery of oil and gas on the Ghanaian economy; (ii) the mismatch between the expectations for the country program and the capacity of counterparts to deliver, and (ii) lingering negative, public perceptions about the World Bank's role. In terms of the internal World Bank environment, additional challenges identified include: (i) dificulty in securing key, specialized skills that are needed in the Ghana program; (ii) balancing implementation and drive for development results with internal controls and procedures; and (iii) the need for better cross sector collaboration with few incentives for this presently within the Bank's systems. 13 r n % e + + I L W Y) 8 'E x ? ! u '5 Y I- .- I -0 5 LL 2 Y b 3 t I W Y .- e 13 m B - a 0 a .- a s * e, V '3 R h: 4 VI W m 0 0 8 E c! 2 A 0 m L E 5 Y 5 8 s n 9 LC e, + 2 -c .- a 0 I M .ti n 0 c E E a 3 s U 9 E L Y d d N 0 m m 0 0 N 0 .- Y hl m rn m od 0 0 N s .- -5 - c e, g n. f U d m n 0 Y .- v1 - .- m e .- 5 e L e L K - e, e .- C - a e , & 5 e e, < a Y +z m v) o m 2 e, I e g a m e a C 4 Y 5 0 P c < B u - a Y 3 3: e x .- Y C 6 Y - 0 e E m Y .C 1 - m a B e, m m b 8 Y P m e, v, m 5 c, e, * g 9 e, 6 E e, 2 d e 9 0 5 Z 3 - 3 2 2 a c LL w Y d 5 .` 3 8 3 5 n Q fl u e 00 m f Appendix 1 Review of the specific progress made under the pillars of the CAS 1. A significant proportion of World Bank assistance has been provided through general budget support and this has supported achievement in outcomes across the three pillars of the country's development strategy. Under Pillar I, Accelerating private sector-led growth, support focused on ensuring solid macroeconomic performance; enacting energy sector reforms; improving financing for development; eliminating barriers to private sector development and trade; and encouraging rural development and natural resource management. Progress toward this goal was uneven as far as growth is concerned, as its acceleration in 2007-8 (followed by a sudden deceleration in 2009) reflected, to a large extent, the unsustainable fiscal stance of the earlier years. Structural progress was achieved, however, in the area of financing development and removing barriers to private sector development and trade, while progress in the areas of rural development and natural resource management focused on laying the groundwork for separate multi-donor budget support instruments. Meanwhile the most lasting contribution to energy sector reforms was the amendment of the legal framework for the Volta River Authority to allow the setting up of an independent operator for the transmission system. Otherwise, progress on energy reforms was limited to instances where electricity tariffs were brought closer to cost recovery levels, and to ensuring needed budget support to the energy utility companies to offset delays in these tariff adjustments. These delays in adjusting tariffs to cost recovery levels deepened, however, worsening the financial difficulties of the utility companies and, postponing needed investments contributing to the Governments already widening fiscal imbalance. Under Pillar 11, Improving service delivery for human development, progress towards the PRSP's priority sectors was the strongest achievement under these operations, with gains in education health, social protection and water and sanitation. The PRSCs contributed directly to these outcomes by enabling the Government to increase spending in these areas while (until 2008) maintaining macroeconomic stability. Pillar 111. Improving governance, decentralization, and public sector reform: There was more progress in public financial management than in governance, decentralization and public sector reform. This disparity in achievements was due to the complexity of the reforms in these latter areas and likely related to the challenging political economic aspects of the reforms. 2. There has been mixed progress, under multi donor budget support, in strengthening its building blocks and improving public financial management and procurement. While there were positive developments in public financial management including the consolidation of public accounts and the passage of the procurement law, implementation of policy reforms in this area is an unfinished agenda. . As the Public Expenditure and Financial Accountability (PEFA 2009) illustrates, while the budget documentation in Ghana is fairly complete, budget credibility has been, hampered by several factors including: (a) ineffective expenditure controls undermining preset budget ceilings; (b) unpredictability of budget releases to service delivery agencies; (c) a budget classification system that is not fully Government Finance Statistics (GFS)-compliant and that is incapable of supporting an outcome based budget management system, and (d) the limited ability to effectively cost strategies resulting in a weak link between planned and executed activities. In terms of evidence-based policy making, another building 39 block for effective budget support, there has been some improvements in monitoring and statistical systems with the regular production of the Annual Progress Report, the development of a comprehensive National Monitoring and Evaluation (M&E) plan for the GPRS I1 and the launch of the 5-year Ghana Statistical Development Plan. Despite this, weaknesses still remain with an M&E systems of MDAs being poorly aligned with the national M&E framework and institutional weaknesses that undermine the ability of the GSS to produce good quality, relevant and timely data. 3. Budget Support has enabled the World Bank to respond flexibly to a series of crisis. In June 2008, the World Bank provided additional budget support under the PRSC 6 and the Agriculture Development Policy loan to scale up social protection and health interventions and provide subsidies for fertilizers, in an attempt to address the needs of the rural poor in the aftermath of the droughts in the North of the country. In June 2009, additional budget support was provided once again in support of the new authorities' efforts to bring their fiscal stance onto a sound and sustainable track by restoring fiscal discipline, tackling long standing issues in the energy and public sectors while also protecting the poor. The Economic Governance and Poverty Reduction Credit (EGPRC), approved by the Board in June 2009, was designed with urgency and provided support to the new authority's commitment to a more transparent and accountable use of the country's resources, through a freedom of information law, while preparing for the arrival of oil with the adoption of sound regulatory and fiscal frameworks. While the World Bank designed this emergency response in coordination with the sector group aid architecture that exists in Accra, it temporarily moved outside the joint performance assessment framework for budget support, in order to respond with flexibility. 4. Other World Bank interventions have contributed to the achievement of a number of Pillar I goals but the performance of projects focusing on the private sector has been less than stellar. In the area of Private Sector Competitiveness, the World Bank's four investment projects (MSME, EMCB, LAP, e- Ghana) have contributed to the country's goals by increasing private sector credit and foreign direct investment. However, credit growth has mainly benefitted consumption, and has remained costly and of short term duration. Time taken to register deeds and titles to land have also decreased substantially from 36 months to 2.5 and 7 months respectively, and this was supported primarily through the World Bank- financed Land Administration Project. PPP legislation has been designed and is pending approval. Notwithstanding this progress around specific CAS milestones, Ghana's competitiveness remains weak, as witnessed by its decline in the Global Competitiveness Index. This decline is attributed to poor skills and technological infrastructure and merits specific attention in the future. The MSME project has experienced a very slow start, partly because of difficulties that IFC experienced in setting the credit line component in place, and partly because of its sheer complexity. It is now being restructured. 5. There has been significant progress in the ICT Sector. Phone penetrations rates (especially mobile) and the number of connections to internet rose fast. Competition in the telecommunications sector increased: there are now six mobile operators, with two joining in the last 3 years, and the liberalization of the international gateway and landing rights has attracted two new submarine. cable 40 providers. As a result, access has been expanded, and the cost of communication has been reduced. The recent reduction of bandwidth prices by 50 percent promises to further accelerate progress. The IT and IT enabled services sector (ITES) has benefitted from the telecom boom as well as from the creation of dedicated support institutions, both public and private, and Ghana has been rated for two years in a row as the most competitive ITES destination in Africa. The eGhana project is contributing to these achievements by supporting critical applications, skills development, and regulatory institutions. It includes a US$60m PPP investment to automate the Revenue Agencies and the Registrar General's Department (US$20m through eGhana), completion of key legislation to facilitate electronic transactions, the development of a national curriculum, and the accreditation and skills standards for BPO training. eGhana, however, has not advanced as quickly as expected due to the re-bidding of two of its largest contracts. 6. Progress in Agriculture has continued during the CAS period. Since the approval of the CAS, the sector has reached its outcomes in terms of crop yields per hectare and improved production. Irrigation has also improved with greater support for small-holders and better management of existing irrigation schemes. The Bank had supported progress in the sector earlier through an investment project, but it moved two years ago to a DPL series which has initiated better planning and budgeting within the sector, greater efficiency in public spending, as well as increased spending at the decentralized level and a targeting of funds in the three lagging regions of the North. Additional financing under PRSC6, following the food price crisis of 2008, has allowed for the initiation of a fertilizers subsidy program that has led to important expansion of yields in the poorer Northern regions. Going forward, the targeting of this program will, however, need to be improved before it is scaled up further. A more strategic, cross- sector approach has been enshrined in the revised sector strategy and embedded in Ghana's adoption of the Comprehensive Africa Agriculture Development Program (CAADAP). A costed sector strategy is being finalized, as the main output of CAADP, and will provide the basis for increased agricultural spending. At the regional level, the West African Agricultural Productivity project is now progressing, after a slow start, and 15 research projects, that will increase knowledge about productivity, have been approved. 7. Under sustainable natural resource management, the World Bank has provided support through a development policy operation, the Natural Resources and Environmental Governance (NREG) credit. This harmonized budget support has supported the adoption of key policies in the mining, forestry, and environment sectors, including the Voluntary Partnership Agreement guaranteeing legality of timber exports to European Community, improved mining regulations and the elaboration of a Climate Change Strategy. The operation has also helped the government to improve its sector planning and budgeting processes to ensure that adequate funds are available to enact the existing environmental policies in the country. Multi-donor Budget Support has also contributed to progress in this sector, with the refinement of institutional responsibilities under the new Inter-Ministerial Advisory Panel on Environment and Natural Resources, led by the new Ministry of Environment, Science and Technology. Support to the Extractive Industries Transparency Initiative Secretariat has been provided, under the multi donor EITI trust fund, and general budget support has provided support in extending the commitment to the 41 principles of transparency to Ghana's new found natural resource - its oil and gas. A cross sector analysis of a value chain approach to the natural resources sectors has provided valuable recommendations for future management of oil and gas reserves, as well as a number of common governance challenges in the renewable and non-renewable natural resources, which could be supported. by a future operation. 8. In the area of land management, significant progress has been made at the country level and the Bank has contributed to this though its investment project with the development and approval of a spatial development planning framework paving the way for the preparation of a comprehensive land-use Bill. The Land Administration Project has also resulted in the strengthening and streamlining the institutional arrangements for land administration in Ghana with the passage of the Lands Commission Act 767 (2008) by Parliament on October 29, 2008. The decentralization of the deeds registry to all the nine regional capitals, under the Lands Administration Project, has brought the registration of deeds closer to the clients making it easier to access land for agricultural purposes. The eight pilot activities which includes systematic titling, customary lands demarcation, Geodetic reference network, land valuation database, land information systems, deed registration, community-based land use planning and land courts geared towards testing best practices have all yielded useful lessons for scaling-up. A follow on project will be presented to the Board, as originally planned in FYI 1 and will focus on deepening the institutional and legal framework for land administration and decentralizing services closer to the client. 9. There has been impressive progress in the energy sector, with household electrification rates rising to 58 percent and distribution losses declining to 25 percent but the sector remains financially precarious. During 2005-2006, demand had outstripped supply and the level of the Akosombo dam was allowed to go down. This resulted in several years of load shedding, and a scramble to add thermal capacity quickly, which was achieved at high costs. Tariffs were only raised in 2008 when supply became adequate, resulting in large subsidies to the sector from 2005-2008, and contributing to the large fiscal deficits. The Ghana Energy Development Project has been the main instrument to support Government's progress in this sector and, as described later, will be further scaled up to ensure that progress continues. The performance of the World Bank regional portfolio, however, has been less impressive, with significant delays in the implementation of both the regional West African Power Pool project, and the West Africa Gas Pipeline. 10. In the transport sector, the quality of the overall network has not improved as expected. While the target for the trunk road network has been met, an increase in the share of "good" and "fair" for feeder and urban roads was not achieved, mainly due to the inadequacy of the programmed maintenance of the road n.etwork. Indeed, the very large expansion of the feeder roads network (which increased from 10,000 to 42,000 km between 2003 and 2008) is requiring a disproportionate increase in maintenance. Management and administration of the road fund which is dedicated to maintenance would need to be further strengthened. Key focus in the coming years will be on: (a) developing a prioritized road maintenance program to ensure that road quality is maintained or improved; (b) strengthening the 42 capacity of domestic contractors to deliver good quality road works; (c) supporting implementation of the axle load control management system to reduce premature deterioration of road works; (d) improving the GIS database, especially its predictive capacity, for effective anticipation of the needs in road asset management; and (e) reviewing the policy on road user charges to ensure that annual maintenance resources are adequate to address the planned maintenance 1 1. Under Pillar I1 in the area of Human Development and Basic services, support has been provided under general budget support, as well as through investment operations in health, HIV-Aids, education and water and sanitation. Outcomes in health have been impressive at the country level but the performance of the World Bank portfolio has been weak. At the country level, under 5 mortality rates have been reduced over time (from 111 to 80 per 1,000 live births from 2003 to 2008) due to improved provision of maternal and child health care. Antenatal care remains high (above 90 percent), and women giving birth under the attendance of skilled personnel has increased (from 46 percent in 2003 to 59 percent in 2008). Neonatal mortality has declined and immunization coverage has improved over time (from 69 percent in 2003 to 79 percent in 2008). Child nutrition status has also improved, although infants continue to suffer from poor nutrition. All these outcomes have been supported by the Nutrition and Malaria control project However, in spite of recent progress in under-5 mortality after some years of stagnation; the MDG target for maternal mortality remains off-track. More targeted interventions are required to improve the delivery of pregnant women under the attendance of skilled personnel, particularly at health facilities, where immediate attention can be provided for delivery complications. Through the Results Based Financing (RBF) support, a study will pilot incentives to health facilities and to pregnant women to help improve attendance by skilled providers during childbirth. The on-going country status report on health and the investment projects on the national health insurance and child malaria and nutrition, which are presently being restructured, provide the opportunity to address these challenges. The specific World Bank CAS milestone of moving towards the Abuja target (of health expenditures at 15 percent of Government spending) is on track. However, the three specific Bank projects in this sector have not performed as expected: the National Health Insurance Scheme project and the Child Malaria and Nutrition project are experiencing significant delays and the World Bank-financed multi sector HIV project is rated unsatisfactory. 12. In the education sector, access and completion rates have improved steadily with primary completion increasing from 80.1 in 2007 to 86.3 in 2009, but quality remains low. The improvements in access to education across the country have been supported by the World Bank-financed Education Sector project and are impressive yet learning achievements have not improved significantly (as reflected by test results). In addition, efforts to improve equity and address geographic and gender disparities have not yielded the expected results, and geographical disparities in the textbook per pupil ratio and in the percentage of untrained teachers remain significant. The textbook per pupil ratio is, on average, 23 percent worse and there are approximately twice as many pupils per trained teachers in the 53 deprived districts of the country. To increase the quality of education service delivery in the future, a more focused attention on teacher absenteeism, which is estimated at around 27 percent, is needed. In addition, increased attention is needed to ensure that public policy measures aimed at stimulating education 43 performance, such as the Ghana School Feeding Program or the capitation grants, are well targeted, monitored and evaluated, and geographic and gender disparities are addressed in a more deliberate. and concerted way. 13. The GPRS I1 target for social protection to increase the number of households living in extreme poverty has been surpassed, with 16,000 households benefitting from this conditional transfer. The World Bank supported this goal through the provision of additional support under PRSC 6, in the wake of the floods and droughts in the three regions of the North in September 2007. In addition and as proposed under the CAS, a social protection strategy has beendeveloped and indicators have been agreed, although it is yet to be approved by Cabinet. A recent review by the Bank of all pro poor spending in Ghana finds that many programs tend not to reach the poor. The study recommends that Ghana should adopt a mix of geographic targeting across regions combined with household targeting either through a proxy means test or categorical targeting. 14. In the water and sanitation sectors, rural access to water has increased from 53 percent to 57 percent during this CAS period. This program has been supported by three projects, the Small Towns Water Supply and Sanitation, Urban Water and the second Urban Environmental Sanitation projects. Ghana needs to make a special effort in urban areas if water coverage is to keep up with a high urban growth of about 4 to 5 percent per year. Between 2003 and 2008, the proportion of people with access to an improved source of safer water went down from 83 to 79 percent. The situation is particularly critical in peri-urban areas where 80 percent of the people without access to piped water live, depending on private vendors who charge exorbitant prices. Increasing access to water supply in these communities is key to achieving health outcomes and sustained poverty reduction. The situation regarding access to improved sanitation is worse, with only 11 percent of the population having access - at the bottom of Sub-Saharan countries. As such, Ghana will not meet the MDG sanitation target of 53 percent by 2015. The situation is particularly critical in peri-urban areas where the combination of lack of facilities and high population density has a serious, negative effect on health and the environment. The Urban Water and the second Urban Environmental Sanitation project have not performed well but procurements are now progressing and performance is expected to pick up. The controversy over the location of the landfill for Accra, financed under the UESP 11, has hampered performance. A more system-wide approach to solid waste management for the greater Accra is now being sought. The Small Towns Water project has performed well in water but less well in sanitation. 15. Under Pillar 3, Good Governance and Civic Responsibility, progress has been mixed at the country level, as well as within the World Bank?s portfolio. The APR attributes the lack of progress to a failure to build consensus around the pace and the models for public sector reform and decentralization. In the area of decentralization, little progress has been made in devolving decision making and resources, although a number of specific papers and draft policies have been prepared, paving the way for future action. A harmonized initiative, chaired by the World Bank, to better understand the limited impact of past public sector reform initiatives in Ghana recommends that future approaches: (i) be more incremental and 44 sequenced and less "big bang" (ii) build support across line ministries through an inclusive process, (iii) tailor strategies more carefully to local realities and capacities, and (iv) avoid technocratic solutions. The World Bank has supported Pillar 3 through multi donor budget support, the Economic Management and Capacity Building project, and the Community-Based Rural Development Project. Several concrete outputs have been delivered, including the elimination of ghost workers in the Ministries of Health and Education, the development of a decentralization policy, and the development of a single wage spine reform for civil servants which was helped by timely inputs from the Bank's Global Expert Team. These outputs now provide the opportunity for the new administration to build momentum in implementing specific public sector reforms. In addition, the Ghana Community-Based Rural Development Project has helped district assemblies and area councils to improve their capacity to procure and manage contracts, leading to the creation of a host of new local assets. Three IDFs in support of the judicial service, the internal audit agency, and the audit service have led to a better understanding of the benefits of traditional methods of dispute resolution, and, based on this, training manuals for traditional authorities and the judicial service have been developed. But as noted earlier, outcomes in economic governance remain weak and call for specific interventions to strengthen public financial management and budget processes. 45 Standard CAS Annexes 46 sub- Key Development Indicators Saharan Low Ghana Africa income Age distribution, 2007 72007) Female Population, mid-year (millions) 23.5 aoo 1,296 Surface area (thousand sq k m ) 239 24,242 21.846 Popuiationgrowth ( O h ) 2 .o 2.4 21 Urban population (%of total population) 49 36 32 GNI (Atlas method, US$ billions) 0.9 762 749 GNI per capita (Atlas method, US$) 590 952 578 GNI percapita(PPP,international$) 1,330 1,870 1.500 I GDP growth (%) 6.3 6.2 65 20 10 0 10 GDP percapitagrowth (%) 4.2 37 43 prcent ( m o s t r e c e n t estimate, 2 0 0 0 - 2 0 0 7 ) I Poverty headcount ratio at $125 a day (PPP Oh) I 50 U n d e r d m o r t a l i t y rate(per 1,000) Povertyheadcount ratio at$200aday(PPP.%) 72 Life expectancy at birth (years) 60 50 57 Infant mortality(per 1000 live births) 76 94 85 1 Child malnutrition (%of children under5) 19 27 29 150 Adult literacy. male (%of ages `6 and older) 66 69 72 Adult literacy,female (%of ages 15 and older) 50 50 50 100 Gross primaryenrollment. male (%of age group) 98 99 130 Gross prirnaryenrollment female (%of age group) 97 88 50 89 0 Access to an improved water source (%of population) 80 58 68 Access to improved sanitation facilities (%of population) 13 31 39 1990 1995 2000 2006 OGhana .SubSaharan Afnca 7 N e t A i d Flows 1980 1990 2000 2007 a (US$ millions) Net ODA and official aid 191 560 600 1,V6 Growth of GDP and GDP per capita (%) Top3donors (in 2006) United ffingdom 35 22 80 67 Netherlands 5 25 28 97 United States 19 0 63 68 Aid(%of GNI) 4.3 9.7 72.4 93 Aid percapita (US$) l7 36 30 51 Long-Term Economic Trends Consumer pnces (annual %change) 50.1 37.3 25.2 94 GDP implicit deflator(annua1 %change) 511 3 12 27.2 148 Exchange rate (annual average, local per US$) 9.6 326.3 5,455 1 9,339 3 Terms of trade index(2000 = WO) 83 x10 84 - 19 8 0 -9 0 199 0 2 0 00 2 00 0-0 7 (average annualgrowth %) Population, mid-year(mil1ions) 114 `6.6 20.1 23 5 31 26 22 GDP (US$ millions) 4,445 5,886 4,977 15.246 30 43 55 (%of GDP) Agriculture 57.9 448 35 3 36 3 10 34 39 Industry 119 8 8 25 4 25 3 33 27 75 M anufacturing 7.8 98 90 82 39 4 5 Services 30.2 38 4 39 3 38 4 57 56 62 Household f inal consumption expenditure 83.9 85 2 84 3 77 5 28 41 57 General gov't final consumption expenditure 112 93 a 2 P7 24 48 -1 0 Gross caoital formation 5.6 144 24 0 32 9 33 43 147 Exports of goods and services 8.5 6 9 48 8 36 2 2.5 13.1 3.9 Imports of goods and services 9.2 25 9 67 2 59 3 0.6 1 .4 ) 7.2 Gross savings 4.5 70 157 27 8 Note Figures in italics are for years other than those specrfied 2007 data are preliminary indicates data are not available a Aid data are for 2006 Development Economics Development Data Group (DECDG) Ghana B a l a n c e o f P a y m e n t s a n d Trade 2000 2007 Governance indicators, 2000 and 2007 (US$millions) Total merchandiseexports (fob) 1936 4,P5 Total merchandise imports (cif) 3,031 8,091 Voice an? axomta&lity Net trade in goods and services -922 -3,444 Political stability Workers' remittances and compensation of employees (receipts) 32 135 Regulatory quai ily Rule of l a v Current account balance -4 19 -725 a s a % o f GDP -8.4 -48 Cmlrd d corruptim R?!ServeS, including gold 264 2,396 I 0 25 50 75 100 Central Government Finance .zoo7 Ccuntry's percentile ra& (0-100) hrghervalues im#ybe!feriatngs ozooo (%ofGDP) Current revenue (including grants) 19.8 24 5 Tax revenue 73.3 8.3 . ~.Omentexpenditure------- -%S - I - + T e c h n o l o g y and I n f r a s t r u c t u r e 2000 2007 Overall surplusideficit -6.7 -80 Paved roads (%of total) 29.6 17.9 Highest marginal taxrate (YO) Fixed lineandmobile phone Individual 30 25 subscribers (per 1,000 people) 2 34 Comorate 33 22 High technology exports (%of manufactured exports) 19 0.2 E x t e r n a l D e b t a n d R e s o u r c e Flows Environment (US$millions) Total debt outstanding and disbursed 6,173 3,192 Agricultural land (%of land area) 64 65 Total debt service 388 261 Forest area (%of land area) 26.8 24.2 Debt relief (HIPC, M DRI) 2,742 2938 Nationally protected areas (%of land area) ,. E.2 Totaldebt (%of GDP) P2.9 25 1 Freshwater resources percapita (cu. meters) .. 1,345 Total debt service (%of exports) 15.7 56 Freshwaterwithdrawal (%of internal resources) 3.2 Foreign direct investment (net inflows) 156 435 C 0 2 emissions percapita (mt) 0.31 0.33 Portfolio equity(net inflows) 0 0 GDP per unit of energy use (2005 P P P $ per kg o f oil equivalent) 2.6 2.9 Composition oftotal external debt, 2006 Energy use per capita (kg o f oil equivalent) 392 397 JERD, 0 \ IDA. 810 S hod-term 1143 (US%mrlhons) IBRD Total debt outstanding and disbursed 9 0 Disbursements 0 0 Pnncipal repayments 8 0 interest payments 1 0 IDA Total debt outstanding and disbursed 3,730 ID4 Disbursements 204 248 Private Sector Development 2000 2008 Total debt service 47 8 Time required to start a business (days) - 34 IFC (ftscalyear) C o s t t o starta busrness (%of GNI percapita) - 327 fotaldtsbuffiedandoutstandtngpoitfoIro 24 57 Time required to register property (days) - 34 of which IFG own account 24 57 Disbursementsfor IFC own account 0 8 Ranked as a major constraint to business 2000 2007 Portfolio saies prepayments and (%of managers surveyed who agreed) repayments for IFC own account 7 5 na na M IGA Gross exposure 15 03 Stock market capitalization (%of GDP) '01 156 Bank capital to asset ratio (YO) 118 124 48 Mi I lenni urn DeveloDment Goa Is Ghana with selected targets to achieve between 1990 and 2015 (estimate closest to date shown, W-2years) : G o a l I halve the rates f o r extreme poverty and malnutrition 1990 1995 2000 2007 Povertyheadcount ratio at $125aday(PPP,%of population) Poverty headcount ratio at national poverty line (%of population) 50.0 39.5 28.5 Share of income orconsumption to the poorest qunitile ( O h ) 7.0 5.6 Prevalence of malnutrition (%of children under 5) 24.1 25.1 20.3 8.8 G o a l 2: ensure t h a t children are able t o c o m p l e t e p r i m a r y s c h o o l i n g Primaryschool enrollment (net, %) 54 60 72 Pnmarycompletion rate (%of relevant agegroup) 61 62 71 Secondaryschool enrollment (gross, Y )o 34 36 49 Youth literacyrate(%of people ages 15-24) 71 G o a l 3: eliminate gender disparity i n e d u c a t i o n and empower women Ratio of girls to boys in primaryand secondaryeducation (YO) 79 69 95 W m e n employed in thenonagricultural sector (%of nonagriculturalemployment) 57 Proportion of seats held bywomen in national parliament ( o Y) 9 11 G o a l 4 : reduce under-5 m o r t a l i t y by two-thirds Under-5 mortality rate (per 1,000) PO in 1 13 PO Infant mortality rate (per 1,000 live births) 76 71 72 76 Measles immunization (proportion of one-yearoids immunized, %) 61 70 84 85 G o a l 5: reduce maternal m o r t a l i t y by t h r e e - f o u r t h s M atemal mortality ratio (modeled estimate, per 100,000 live births) 560 Births attended by skilled health staff (%of total) 40 44 44 50 Contraceptive prevalence (%of women ages 1549) a 20 22 7 l G o a l 6: h a l t and begin t o reverse the spread o f H l V l A l D S and o t h e r m a j o r d i s e a s e s Prevalence of HIV (%of population ages 1549) 2.3 19 Incidence of tuberculosis (per 100,000people) 224 217 210 203 Tuberculosis cases detected under DOTS (%) s 37 38 G o a l 7: halve the p r o p o r t i o n o f people without sustainable a c c e s s t o basic needs . 64 - Access to an improved water source (%of population) 56 72 80 Access to improved sanitation facilities (%of population) 6 7 9 W Forest area (%of total land area) 32 7 26.8 24.2 Nationally protected areas (%of total land area) 16.2 C02emissions (metnc tons percapita) 02 0.3 0.3 0.3 GDP per unit of energy use (constant 2005 P PP $ per kg of oil equivalent) 25 2.5 2.6 2.9 G o a l 8: d e v e l o p a g l o b a l partnership f o r d e v e l o p m e n t Telephone mainlines (per D people)O 0.3 0.4 11 16 Mobile phonesubscribers (per D people) O . 00 0.0 0.6 32.4 lntemet users (per 100 people) 0.0 0 .o 0.1 2.8 Personal computers (per D people) O 0.0 0.1 0.3 0.6 Education indicators (%) Measles immunization (% o f I-year ICT indicators (per 1,000 people) olds) I 40 1 75j 1 50 2: 2000 2002 2004 2006 1990 1995 2000 2006 2000 2002 2004 2006 d p n m a r y netenmliment ratio OFixed t mobile subscribers +Ratio ofgirls 10 boys in pnmary 8 secondary OGhana .SubSaharan Africa minternet usem education 49 Selected Indicators of Bank Portfolio Performance and Management As Of Date 211 612010 Indicator 2007 2008 2009 2010 Portfolio Assessment Number of Projects Under Implementation a 15 18 18 16 Average Implementation Period (years) 3.5 3.2 3.8 4.3 Percent of Problem Projects by Number a, C 13.3 0.0 33.3 37.5 Percent of Problem Projects by Amount 9.9 0.0 19.0 22.1 Percent of Projects at Risk by Number a, 13.3 16.7 38.9 56.3 Percent of Projects at Risk by Amount 9.9 22.5 25.8 38.3 31 6Y.U a q L .." ~ n I U. C C U cn - Portfolio Management CPPR during the year (yes/no) Yes Supervision Resources (total US$) Average Supervision (US$/project) Memorandum Item Since FY 80 Last Five FYs Proj Eva1 by OED by Number 107 11 Proj Eva1 by OED by Amt (US$ millions) 4,663.2 801.2 YOof OED Projects Rated U or HU by Number 34.6 36.4 % of OED Projects Rated U or HU by Amt 31.8 37.1 a.As shown in the Annual Report on Portfolio Performance (except for current FY). b.Average age of projects in the Bank's country portfolio. c.Percent of projects rated U or HU on development objectives (DO) and/or implementation progress ( 5 d.As defined under the Portfolio Improvement Program. . e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 50 Proposed IBRDllDA Base-Case Lending Program a Fiscal proj ID Strategic Rewards Implementation b US$(M) b (WM/L) Risks (H/M/L) year 2010 GH Agriculture DPL 2 25 GH- Add Fin for the GEDAP (FYIO) 70 GH:Gas and Oil Capacity Building Project 35 GH:Natural Resources Env Governance DP03 10 GHSustainable Rural Water & Sanit Serv 75 Ghana Social Opportunities Project 40 Result 255 2011 GH - Gas Infrastructure Project (IBRD) 300 H H GH Land Administration-2 30 H M GH-Econ. Gov. Pov Red.Cr.-P (EGPRC-2) 200 H L GH-Agriculture DPL 3 50 H M GH-Decentralization & Basic Services 100 H H GH-VocationallSkills 40 H L GH-Urban Water and Sanitation Project ' 100 H L Ghana Commercial Agriculture 100 H H Ghana EITI++ Natural Res. Value Chain 50 H H GH - Statistics Development Program 30 H L Result 1000 2012 GH PRSC 8 100 M GH-Agriculture DPL 4 50 M GH Urban Water and Sanitation Project 100 L GH Land Administration Project 2 30 M GH Medium and Small Enterprises Initiative AF 30 L GH Vocational Skills Development Project 50 L GH Econ Managmnt and Cap Building project AF 20 L GH ElTl ++ 50 H Result 430 51 I 2007 2008 2009 2010* Commitments (US$m) Gross 156.74 96.88 427.46 20.60 Net** 106.74 96.88 369.96 20.60 Net Commitments by Sector (%) EQUITY 0.53 0.53 GUARANTEE 29.73 14.62 16.35 100 LOAN 70.27 53.88 64.2 QUASI LOAN 30.97 18.92 Total 100 100 100 100 Net Commitments by Investment Instrument (%) Equity 0.53 0.53 Guarantee 29.73 14.62 16.35 100 Loan 70.27 53.88 64.2 Quasi loan 30.97 18.92 Total 100 100 100 100 * As of March 31, 2010 ** IFC's Own Account only 52 Product Completion FY Cost (US$OOO) Audiencea Objectiveb Recent completions Investment Climate Ass. FYO9 Government KG/PS Ext. Review of PFM/PER FYO9 Government KG/PS Agriculture Sector Review FYO9 Government KG/PS Oil & External Competit. FYO9 Government KG/PS Jobs Creation and Skills Development TA FYO9 Government Undetway Commercial Agriculture Notes FYI0 Government KG/PS Water Resources Policy FYI0 Government KG/PS Non Concessional Borrowing FYI0 Government KG/PS Pro-Poor Expenditure FYI0 Government KG/PS Health Status Report FYI0 Government KG/PS Skills & Vocational Training FYI0 Government KG/PS Education Sector Review FYI0 Poverty Assessment FYI0 Government KG/PS Ghana Science, Technology, and innovation Policy (STIP) Review FYI0 Government KG/PS FYI0 Government KG/PS Planned PER & Instit.for Svce Del ICT Review FYll Government KG/PS PElR W&S FYI1 Government KG/PS Economics of Adaptation of cc FYll Government KG/PS Western Corridor Study FYll Government KG/PS FYll Government KG/PS a. Government, donor, Bank, public dissemination. b. Knowledge generation, public debate, problem-solving. 53 .AUpdate from Ghana - Key Economic Indicators Actual Estimate Projected Indicator 2005 2006 2007 2008 2009 2010 2011 2012 2013 National accounts (as % of GDP) Gross domestic producta 100 100 00 100 100 100 100 100 100 Agriculture 37 36 34 33 34 34 29 29 Industry 25 26 25 25 25 25 35 37 Services 37 38 41 41 41 41 36 35 Total Consumption % 95 93 97 95 91 77 78 Gross domestic fixed investment 29 30 34 36 30 37 37 35 Government investment 12 12 14 16 12 12 13 13 Private investment 17 18 19 20 18 25 24 22 Ekports ( W S f 36 40 40 42 51 53 59 60 Imports (GNFS) 62 65 67 75 77 81 73 73 Gross domestic savings 4 5 7 3 5 ~ r o s national savings' s 7 12 10 0 -4 Memorandum items Gross domestic product 10720 12722 14942 16653 14761 15302 18913 19880 (US$ million at current prices) GNI per capita (US$, Atlas method) 460 530 590 630 600 Real annual growth rates (%, calculated fiom 75 prices) Gross domestic product at market prices 5.9 6.4 5.7 7.3 4.5 5.0 21.5 7.0 -100.0 Gross Domestic Income 4.4 6.2 7.3 8.3 6.2 4.0 18.7 6.2 Real annual per capita growth rates (YO, calculated fiom 75 prices) Gross domestic product at market prices 3.6 4.1 3.5 5.1 . 2.4 2.9 Total consumption 1.7 -9.7 -0.6 7.3 11.3 -4.1 Private consumption 13.3 -9.7 -2.0 7.6 14.3 -4.2 Balance of Payments (US%millions) Exports (GNFST 3869 5111 6004 7071 7509 8091 11179 11968 0 Merchandise FOB 2803 3728 4172 5270 5786 6125 9104 9823 0 Imports (GNFST 6620 8287 10065 12569 11320 12416 13845 14483 0 Merchandise FOB 5347 6754 8066 10269 9334 10132 11505 12059 0 Resource balance -2751 -3175 -4061 -5498 -3812 -4325 -2666 -2515 0 Net current transfers 2117 2600 2833 2900 2967 0 Current account balance -821 -703 -1366 -2856 -1024 -1407 -2666 -25 15 0 Net private foreign direct investment 145 636 855 1212 1084 1900 0 0 0 Long-term loans (net) 140 624 5 13 555 620 681 0 0 0 Official 311 208 255 367 380 474 310 197 Private -171 416 258 188 240 207 -310 -197 Other capital (net, incl errors & ommissions) 845 -154 302 1506 -215 0 d . Change in reserves -309 -403 -305 -416 -465 0 Memorandum items Resource balance (% of GDP) -25.7 -25.0 -27.2 -33.0 -25.8 -28.3 -14.1 -12.6 Real annual growth rates ( YR75 prices) Merchandise exports (FOB) 4.0 4.0 3.6 3.5 3.5 Prinrary 4.5 4.5 3.8 3.8 3.8 Manufactures 2.6 2.6 3.0 3.0 3.0 Merchandise imports (CIF) 7.5 6.2 4.6 5.4 54 (Continued) Ghana - Key Economic Indicators (Continued) AChA Indicator Public finance (as YOof GDP at market prices)e - Current revenues 24.1 25.4 33.6 25.2 26.8 27.0 28.1 27.9 Current expenditures 20.0 22.5 23.7 26.3 26.8 26.5 228 22.2 Current account surplus (+) or deficit (-) 4.1 2.9 9.9 -1.1 0.0 0.6 5.3 5.7 Cap ita 1 expe n ditu re 12.0 12.4 14.4 15.7 12.4 11.8 12.9 12.6, Foreign financing 5.5 3.9 8.6 3.2 6.9 6.7 4.1 - 4.1 - Monetary indicators MYGDP 0.3 0.4 0.4 0.5 0.5 0.5 0.4 0.5 Growth of M2 (%) 14.3 38.8 35.9 40.2 22.5 16.5 29.3 I 23.5 Private sector credit growth / -44.2 76.6 55.1 31.5 total credit growth (YO) Price indices( yR75 =loo) Merchandise export price index 144.0 184.2 199.0 242.8 257.7 - Merchandise import price index 144.0 171.2 195.5 236.2 Merchandise terms oftrade index 100.0 107.6 101.8 102.8 Real exchange rate (US$/LCU)' 0.0 0.0 0.0 0.0 Real interest rates - . - - Consumer price index (YOchange) 14.4 8.2 7.7 7.3 7.3 GDP deflator (% change) 15.0 12.8 13.8 16.9 17.2 11.0 9.0 3.0 a. CDP at market prices b."GNFS" denotes "goods and nonfactor services." c.Includes net unrequited transfers excluding official capital grants. d.Includes use ofIMF resources. 1 . e. Consolidated central government. f "LCU" n denotes "local currency units." An increase i US$/LCU denotes appreciation. 55 Ghana Social Indicators Latest single year Same regionfincome group Sub- Saharan Low - 1980-85 1990-95 2002-08 Africa income POPULATION Total population, mid-year (millions) 13.0 17.2 23.4 800.0 1,295.8 Growth rate (% annual average for period) 3.3 2.8 2.2 2.4 2.2 Urban population (% ofpopulation) 32.9 40.1 50.0 35.9 31.7 Total fertility rate (births per woman) 5.1 4.2 POVERTY (% of population) National headcount index 50.0 28.5 Urban headcount index Rural headcount index INCOME GNI per capita (US) 350 360 630 951 574 Consumer price index (2000=700) 2 32 344 144 152 Food price index (2000=700) INCOMElCONSLlMPTlON DISTRIBUTION Gini index Low est quintile (% of income or consumption) 6.7 5.2 Highest quintile (% of income or consumption) 45.3 48.6 SOCIAL INDICATORS Public expenditure Health (% of GDP) 2.4 1.6 Mucation ("Aof GNl) 4.3 3.4 Net primary school enrollment rate (% of age group) Total 70 73 Male 72 76 Female 67 69 Access to an improved water source (% of population) Total 64 80 58 68 Urban 87 90 81 84 Rural 49 71 46 60 Immunization rate (% of children ages 72-23 months) Measles 73 76 DFT 73 77 Child malnutrition ("A under Spars) 25 14 27 28 Life expectancy at birth (vears) Total 55 59 57 51 58 Ma le 50 57 Female 52 59 Mortality Infant (per 7,OOOlive births) 88 71 73 89 80 Under 5 (per 7,000) 142 111 115 146 126 Adult (15-59) ' Male (per 7,000 population) 41 7 306 Female (per 7,000 population) 390 269 Maternal (per 700,000 live births) 900 780 Births attended by skilled health staff (%) 45 42 CAS Annex B5. This table was produced from the CMU LDB system. 02/19/13 Note: 0 or 0.0 m a n s zero or less than half the unit shown. Net enrollment rate: break in series between 1997 and 1998 due to change from WED76 to IsCED97. Imnunization: refers to children ages 12-23 months who received vaccinations before one year of age or at any time before the survey. o o o o o o o o o o o o o o o N o o a 2 2 m 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 m E G S m c 2 v) o m o o o o o o o o o o o o o o c o o o m 6 I .- (v (v '0 E Q 20 S a 3 0 0 0 0 0 0 0 0 N ~ 0 0 0 0 0 0 0 0 Q "! v) 6 0 E 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ( v 0 0 ~ r- Lo 0 0 0 0 0 0 d 0 0 0 0 0 0 0 0 0 0 0 0 7 D C '0 .- Q t: 0 0 0 0 0 0 0 0 ~ 0 0 0 0 0 0 0 ~ 0 0 "! hl Lo (v : E 0 0 '0 m S 2 2 20 co0000?000hl~00000000 m P zco*aQ) a m co o m m m o g co.rmcoQ)co o m o o o o (0 m 0 0 0 o m m m o o m o o o o 0 0 0 hl~vv~0a0(v?(v(vLY(v0(v0(vN y x 7 !I v) 3 .- I B I m 00 m