Documentof The World Bank FOR OFFICIALUSEONLY ReportNo: 36786-GM PROJECTAPPRAISAL DOCUMENT ONA PROPOSEDGRANT INTHEAMOUNT OF SDR8.3 MILLION (US$12.0 MILLION EQUIVALENT) TO THE REPUBLIC OF THE GAMBIA FORA COMMUNITY-DRIVENDEVELOPMENT PROJECT August 4,2006 RuralDevelopmentIV Country Department 14 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosedwithout Wokld Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate EffectiveApril 30,2006) Currency Unit = GambianDalasi 28.25 GMDalasi = US$1 U S $ l = SDR 1.4614 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS AfDB African DevelopmentBank APL Adaptable ProgramLoan CAS Country Assistance Strategy CBEMP Capacity Buildingand Economic Management Project CBO Community-based organization CDA Community DevelopmentAssistant CDD Community-Driven Development CDDP Community-Driven DevelopmentProject CDF Community DevelopmentFund CDO Community Development Officer CPAR Country Procurement Assessment Review cso Civil Society Organization DoSA Department of State for Agriculture DOSE Department o f State for Education DoSFEA Department of State for Finance and Economic Affairs DoSHSW Department of State for Health and Social Welfare DoSLGL Department of State for Local Government andLands DoSWR Department of State for Water Resources EC European Commission ERR Economic Rate o f Return ESMF Environmental and Social Management Framework FAA Financial Accountability Assessment FMR Financial Management Report GALGA Gambian Association of Local Government Authorities GGF Good Governance Facility ICB International Competitive Bidding IDA InternationalDevelopmentAssociation IFAD InternationalFundfor Agricultural Development IFMIS IntegratedFinancialManagement Information System IFR InterimFinancialReport LAC Local Area Council LGA Local Government Area M&E Monitoring& Evaluation MDFT Multi-Disciplinary FacilitationTeam MDG MillenniumDevelopmentGoals MFI Micro-finance Institutions .. 11 MIS Management Information System , NAO NationalAudit Office NCB National Competitive Bidding NGO Non-Governmental Organization NMWMP NationalMedicalWaste Management Plan NaNA NationalNutrition Agency O&M Organization and Management PCT Project CoordinatingTeam PHRD Policy and HumanResources Development PIM Project ImplementationManual PMP Pest Management Plan PRSP Poverty Reduction Strategy Paper PSC Project Steering Committee RFP Rural Finance Project RPF ResettlementPolicy Framework RRA RapidResults Approach SBD Standard BiddingDocuments SOE Statement o f expense TAC Technical Advisory Committee TOR Terms o f Reference V D C Village Development Committee VDP Village Development Plan WDC Ward Development Committee Vice President: Gobind T. Nankani Country Director: Madani M.Tall Sector Managers: MaryBarton-Dock, EvaJarawan Task Team Leaders: Renato Nardello, Astrid Helgeland-Lawson GAMBIA. THE CommunityDevelopmentProject CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 1. Country and sector issues.................................................................................................... 1 2 . Rationale for World Bankinvolvement.............................................................................. 2 3. Higher level objectives to which the project contributes .................................................... 2 B. PROJECTDESCRIPTION ................................................................................................. 2 1. Lendinginstrument ............................................................................................................. 2 2 . Project development objective andkey indicators .............................................................. 3 3. Project components............................................................................................................. 3 4 . Lessons learned and reflected inthe project design ............................................................ 4 5 . Alternatives considered andreasons for rejection .............................................................. 5 C. IMPLEMENTATION .......................................................................................................... 5 1. Partnershiparrangements.................................................................................................... 5 2 . Institutional andimplementation arrangements. ................................................................. 6 3. Monitoringand evaluation o f outcomes/results .................................................................. 9 4 . Sustainability . . . ....................................................................................................................... 9 5 . Critical risks andpossible controversial aspects ............................................................... 10 6 . Grant conditions and covenants ........................................................................................ 11 D APPRAISAL SUMMARY . ................................................................................................. 12 1. Economic and financial analyses...................................................................................... 12 2 . Technical........................................................................................................................... 12 3. Fiduciary ........................................................................................................................... 13 4. Social................................................................................................................................. 14 5 . Environment...................................................................................................................... 15 6. Safeguard policies............................................................................................................. 15 7. PolicyExceptions andReadiness...................................................................................... 16 V Annex 1:Country andSector or ProgramBackground ......................................................... 17 Annex 2: Major RelatedProjectsFinancedby the World Bankand/or other Agencies .....20 Annex 3: ResultsFrameworkandMonitoring ........................................................................ 21 Annex 4: DetailedProjectDescription ...................................................................................... 25 Annex 5: ProjectCosts ............................................................................................................... 30 Annex 6: ImplementationArrangements ................................................................................. 31 Annex 7: FinancialManagementandDisbursementArrangements ..................................... 39 Annex 8: ProcurementArrangements ...................................................................................... 50 Annex 9: EconomicandFinancialAnalysis ............................................................................. 55 Annex 10: SafeguardPolicyIssues ............................................................................................ 58 Annex 11:ProjectPreparationand Supervision ..................................................................... 61 Annex 12: Documentsinthe ProjectFile ................................................................................. 62 Annex 13: Statementof LoansandCredits .............................................................................. 64 Annex 14: Countryat a Glance ................................................................................................. 65 Annex 15: Map ............................................................................................................................ 67 (Map: IBRD-34958) vi GAMBIA, THE COMMUNITY-DRIVEN DEVELOPMENT PROJECT PROJECTAPPRAISAL DOCUMENT AFRICA AFTS4 Date: August 4,2006 Team Leaders: Renato Nardello, Astrid Helgeland-Lawson Country Director: MadaniM.Tall Sectors: General agnculture, fishing and forestry Sector Managers: Mary A. Barton-Dock, Eva sector (40%); Health(30%); Other social services Jarawan (15%); Sub-national government administration (lO%);General water, sanitation and flood protection sector (5%) Themes: Rural services and infrastructure (P);Health systemperformance (P); Other rural development (P); Participation and civic engagement (S); Rural non-farm income generation (S) Project ID: PO82969 Environmental screening category: Partial I LendingInstrument: Assessment Specific InvestmentLoan [ ] Loan [ 3 Credit [XIGrant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total World Bank financing (US$m.): 12.00 IDA Grant 6.00 6.00 12.00 JAPAN: MINISTRYOF FINANCE PHRD - 2.00 2.80 4.80 GRANTS Total: 10.20 8.80 19.00 Borrower: Department of State for Finance and Economic Affairs Banjul, Gambia, The ResponsibleAgency: Department of State for Local Government and Lands Banjul, Gambia, The vii b u a l 0.74 1.85 3.10 3.43 2.15 0.73 0.00 0.00 0.00 hmulative 0.74 2.59 5.69 9.12 11.27 12.00 12.00 12.00 12.00 Project implementation period: Start February 26,2007 End: February 24,2012 Expected effectiveness date: February 26,2007 Expected closing date: February 24,2012 Does the project depart from the CAS incontent or other significant respects? Re$ PADA.3 [ ]Yes [XINO Does the project require any exceptions from World Bank policies? Re$ PAD D.7 [ ]Yes [XINO Have these been approved by World Bankmanagement? [ ]Yes [ IN0 Is approval for any policy exception sought from the Board? [ ]Yes [ ]No Does the project include any critical risks rated "substantial" or "high"? Re$ PAD C.5 [XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Re$ PAD D.7 [XIYes [ ] N o Project development objective Re$ PAD B.2, TechnicalAnnex 3 Rural communities, inpartnership with Local Government Authorities, plan, implement and maintain their priority social and economic investments. Project description Re$ PAD B.3.a, TechnicalAnnex 4 Component A: Community Development Facility will finance community-driven activities identified on the basis o f a participatory strategic planningprocess. Component B : Strengthening Capacity for Community Development will address the technical and fiduciary skills needed at the different decentralized levels to implement local development activities. Component C: Project Coordination, Monitoringand Evaluationwill support a Project Coordination Team (PCT) responsible for technical and fiduciary oversight o fthe project and the Monitoringand Evaluation (M&E) will focus on results-oriented data collection to inform decision-making and impact evaluation. Which safeguard policies are triggered, if any? Re$ PAD D.6, TechnicalAnnex 10 The project has triggered (i) 4.01 Environmental Assessment due to future construction and OP rehabilitation activities as well as potential impacts related to medical waste management; (ii)OP 4.09 Pest Management due to the potential increase inthe use o fpesticides to improve agriculturalproduction; and (iii)OP 4.12 InvoluntaryResettlement due to the potential needfor land acquisition for future sub- projects. The safeguard screening category i s S2, and the environmental screening category i s B. Significant, non-standard conditions, if any, for: Refi PAD C.7 Board mesentation: The overdue audits on TF025078 related to the Community Driven Rural Services Support (a predecessor project) for the period 1999-2001mustbe provided before Board Presentation. Grant effectiveness conditions: a)The PHRDco-financing agreement has been executed and delivered and all conditions precedent to its effectiveness (other than the effectiveness o f the Financing Agreement) have been fulfilled; b)The Recipient has appointed external auditors with qualifications and experience satisfactory to the Association; c)The Recipient has adopted the PIM, including administrative, accounting and financial procedures, as ... Vlll well as guidelines for environmental and social screening, inform and substancesatisfactory to the Association; d)The Recipienthas establishedthe PCT under terms ofreference acceptableto IDAwith the following key staffwith qualificationsand experience satisfactory to the Association: Project Coordinator, Community DevelopmentFacility Manager, Capacity BuildingManager, Financial Manager, Procurement Specialist, and M&ESpecialist; e)The Recipient has recruited a Financial Controller for at least three LGAs,with qualifications and experience satisfactory to the Association; QEstablishment of a FinancialManagement Systeminform and substance satisfactory to the Association. Covenantsapplicableto proiectimplementation: - Conditions ofDisbursement :No withdrawal shall bemade under Category (4)(b) untilit i s confirmed that the three outstanding LGAs, inaddition to those referredto inthe effectiveness condition (e), have eachrecruiteda financial controller under terms ofreference, and with qualifications and experience satisfactory to the Association; - Other Covenants a)Submission of a Progressreport every six months (each quarter for the first year o f implementation); b)Submission of Annual Work Plans and Budgets acceptableto IDAby October 31 of eachyear (the first one 60 days after effectiveness); c)Mid-term review of the Project to be undertakenby the 30thmonth from effectiveness; d)Implementation of the Project inaccordancewith the PIM, ESMF, and RPF; e)Maintain throughout Project implementation the PCT, PSC and FCs. ix A. STRATEGIC CONTEXTAND RATIONALE 1. Country andsector issues 1. Key elements of The Gambia's poverty reduction strategy. Poverty in The Gambia i s pervasive and largely a rural phenomenon. Two thirds o f Gambians live below the poverty line while almost 40 percent o f the households are food poor. Three-quarters o f the poor live inrural areas, where extreme poverty is increasing. The objective o f The Gambia's Poverty Reduction Strategy (PRSP) is to reduce disparities inaccess to sources o f income and empowerment, and is articulated around five pillars: (i)the creation o f an enabling environment for economic growth and poverty reduction; (ii) enhancing the productive capacity and social protection o f the poor; (iii)improving the coverage o f and access to basic social services; (iv) building the capacity o f local communities and their organizations to play a greater role in poverty reduction; and (v) mainstreaming cross-cutting poverty issues (Gender, Environment, Nutrition, HIV/AIDS, etc.). The PRSP also emphasizes decentralizing the public sector and directly intervening at the community level. However, recent poor economic performance has underminedprogress toward both the PRSP and the Millennium Development Goals (MDGs). 2. Key issues and constraints. Poverty in The Gambia i s much higher in rural areas, where it has increased considerably since 1992. This situation arose despite being addressed in The Gambia Poverty Reduction Strategy, and i s largely attributable to insufficient resources reaching the poorest areas o f the country. Severe capacity constraints have limited the ability o f The Gambia to identify, recruit, deploy, and retain high-calibre extension staff to tackle the multiple determinants o f poverty. Outcomes inkey sectors reinforce this reality: agriculture i s constrained by its lack of diversification; education lacks sufficient humancapital; health outcomes compare poorly to neighbouring countries and are constrained by insufficient funding, lack o f qualified personnel, and drug shortages. 3. While the Local Government Act o f 2002 articulates a strong framework for decentralization in the country, its implementation is lagging. Though participation and community empowerment are seen as critical contributors to reducing poverty, they conflict with entrenched interests and approaches that are top-down and supply-driven across the major sectors. Political decentralization i s in place, with local elections occurring every four years. Administrative decentralization i s only partially effective, with a fair amount o f deconcentration o f line ministry staff outside o f Banjul, but with no functional devolution to date. Fiscal decentralization instruments mandated by the Act are not utilized by either central or local governments, leading to a massive financing gap for critical services at decentralized levels. At ward and village levels, structures established under the Act are often not functional unless provided with external support. These weaknesses translate into poor development outcomes at decentralized levels, particularly in the poorest and most vulnerable localities and in the most critical sectors. 4. What the country is doing to address these issues. Some o f the key constraints identified above also serve as potential catalysts to address poor development outcomes in rural areas. In particular, the Government has established enabling legislation such as The Local Government Act (2002) and the Audit and Finance Act (2004) in order to stimulate local development. The Government has stated its commitment to a meaningful process o f devolution, whereby citizens, local governments, and civil servants have the mandate, ability, andresources to achieve tangible development results. 2. Rationalefor World Bankinvolvement 5. Inorderto addressthe multiple determinants ofpoverty inruralareas, andinconsideration o f the limited size o f the cofintry, the Government requested that the World Bank support a multi-sectoral project based on the community-driven development approach. By supporting communities and local governments, the proposed Community-Driven Development Project (CDDP) provides a single mechanism for working across sectors. This will allow the project to efficiently tackle some o f the priority issues affecting rural areas, particularly related to past weaknesses associated with a centralized, supply-driven approach to poverty reduction. This approach will transfer the requisite skills andresources to decentralized administrative structures inorder to addresskeypoverty issues. 6. The International Development Association's (IDA) support can help promote local institutions as key partners in the local development process, be catalytic in helping to consolidate a transparent and equitable resource allocation at the local level, and provide a demonstration effect related to decentralization that could be supported by other donors. Inthis vein, the proposed project will complement the efforts o f other development partners who support rural development and decentralization (see Annex 2). The World Bank's comparative advantage to support the CDDP lies in its long track record and corresponding technical leadership with respect to community-driven development (CDD) approaches around the world. 3. Higherlevel objectives to which the projectcontributes 7. As noted above and in Annex 1, The Gambia's first PRSP was articulated around five pillars. A new PRSP is currently under preparation along the same lines. The current Country Assistance Strategy (CAS, February 2003) supports three o f the five pillars: (i)improving an enabling policy environment to promote growth and poverty reduction; (ii)improving the coverage o f m e t basic social services needs; and (iii)building the capacity o f local communities and civil society organizations (CSOs) to play an active role in the development process. The proposed project addresses all three focus pillars in that it seeks to create an environment conducive to growth and poverty reduction, empower rural communities to become agents o f development, and aims to improve their access to quality social and economic services. At the same time, the project addresses the other two pillars o f the PRSP (productive capacity and cross-cutting issues). A new CAS is beingprepared inFiscalYear 2007 (the expected Board Presentation i s inJune 2007) 8. The project replaces two operations initially foreseen inthe FiscalYears 2003-2005 CAS: a Community-Based Rural Development Project and a follow-up operation to the Participatory Health, Nutrition, and Population Project. Based on lessons learned from previous support to agricultural and health sectors, the World Bank and the Government agreed that future operations would focus on downstream, decentralized support to the sectors. The participatory assessment undertaken in preparation o f the current CAS and the growing importance o f rural poverty in The Gambia further validate the proposed decentralized, multi-sectoral, and community-driven approach. B. PROJECTDESCRIPTION 1. Lendinginstrument 9. The proposed Community-Driven Development Project will be a five-year Specific Investment Loan (SIL). 2 2. Projectdevelopmentobjectiveandkey indicators 10. The project development objective is the following: Rural communities, inpartnership with Local Government Authorities, plan, implement and maintain their priority social and economic investments. 11. Keyoutcome indicators (disaggregated bygendedage group whenever possible) include: 0 At least 70percent o fCommunity Subprojects' results are achieved; 0 Satisfaction with the results o f the Community Subprojects increases by 10 percent each year insample targeted rural population up to 90 percent byYear 5; 0 At least 70 percent o f Community Subprojects are fully functional two years after their completion. 3. Projectcomponents 12. The project will target 88 wards and approximately 600 villages in the six rural Local Government Areas (LGAs) o f The Gambia, and will benefit a population estimated at 435,000 people, which i s about 50 percent o f rural population (See Section C.2 for details on the decentralized administrative structures targeted by the project). 13. The project has three components: A) Community Development Facility, B) Capacity strengthening for community development, and C) Project coordination, monitoring and evaluation. 14. Component A: Community Development Facility (CDF) US$10.8 million (of which - IDA US$9.2 million and PHRD US$0.5 million). The CDF will finance community-driven activities identified on the basis o f a participatory strategic planning process. It provides an opportunity for communities to take charge o f local development challenges through experience with participatory planning, budgeting, financial management, and implementation of development activities. The project will be demand-driven, and participating villages and wards will have an open menu o f social and economic activities, including capacity buildingactivities andincome generating activities. Criteria and procedures for use o fthe CDF will be described in detail in the Project Implementation Manual (PIM). The technical and fiduciary review o f the activities will be placed at levels corresponding to their area o f implementation and their complexity. The budget allocation for participating villages andwards will be determined with a formula based on population and poverty levels. The investment envelope will be made known at the outset o f the planning cycle. Each Local Government Authority will manage a project designated sub-account to disburse grant allocations to villages and wards. Village and ward development committees (VDCs and WDCs) will manage funds to implement their own development plans. About five percent o f the CDF will be earmarked for a Good Governance Facility, which will finance activities to strengthen accountability andtransparency related to the project. Gambian CSOs will develop proposals and implement activities under the Good Governance Facility. 15. ComponentB: StrengtheningCapacity for CommunityDevelopment - US$6.3 million (of which IDA US$2.1 million and PHRD US$3.35 million). Capacity-building activities will address the technical and fiduciary skills needed at the different decentralized levels to implement local development activities. In particular, the component will: (i)develop the capacity o f villages and wards to undertake participatory planningand resource allocation based on a simple, results-oriented approach grounded in the principles o f community empowerment, 3 transparency, and ownership; (ii) strengthen the capacity o f deconcentrated staff to facilitate community-level development planning and investment; (iii)strengthen capacities o f Local Government Authorities to effectively monitor local development plans and to manage and account for funds provided to villages and wards for investment activities; (iv) provide limited support for capacity building for key sectoral government agencies, geared toward strengthening sectoral capacities to support community-level social and economic activities; (v) support implementation o f the project's public outreach campaign; and (vi) support strengthening o f environmental management capacity. Training packages for at least the first eighteen months o f project activity will be definedbefore project effectiveness. 16. ComponentC: ProjectCoordination,MonitoringandEvaluation US$1.65 million(of - which IDA US$0.45 million and PHRD US$0.95 million). The component will support a Project Coordination Team (PCT) responsible for technical and fiduciary oversight o f the project. It will be mainstreamed within the Department o f State for Local Government and Lands (DOSLGL) and its size will be limited to core fbnctions critical to the project's success and for which severe capacity constraints exist in the Gambian civil service (overall coordination, monitoring and evaluation, and fiduciary matters). Monitoring and Evaluation (M&E) will focus on results-oriented data collection to inform decision-making and impact evaluation. It will enable beneficiaries and DOSLGL to: monitor due diligence focused on whether project implementation complies with fiduciary guidelines as well as with social and environmental safeguard policies; monitor and evaluate achievement o f the development objectives; evaluate whether the project's implementation approach will be sustainable and have the desired outcomes; assess project impacts on local governance and decision-making; and assess the extent to which project activities empower marginalized groups (women and youth). The project will finance fiduciary specialists both at the central level (one Financial Manager and one Procurement Specialist) and at the decentralized level (one Financial Controller ineach of the six Local Government Authorities). 4. Lessonslearnedand reflectedinthe projectdesign 17. The CDDP will support multi-sectoral community development. Its design adopts several lessons from other CDD projects: (i)Project implementation should build, not undermine, local capacity. Establishing parallel structures for project implementation undermines sustainability and the transfer o f knowledge. Therefore, CDDP's implementation will be mainstreamed within Government structures. (ii)Empowering communities achieves better outcomes. Enabling beneficiaries to make decisions about -and act on- development opportunities enhances sustainability and builds capacity. Therefore, the CDDP will use community involvement as a catalyst to achieve project outcomes. (iii)Balance top-down with bottom-up. In order to improve outreach and ensure sustainability, it is crucial to find a good balance between community-led initiatives and national level responses to poverty reduction. The project will, therefore, provide support to central level for coordination andcapacity building. (iv) Make M&E meaningful. Project indicators should be focused, realistic, and results- oriented. Active collection and reflection on progress toward these objectives enables 4 M&E to act as amanagement tool. The CDDP will fully incorporatethese lessons into its M&Esystem. (See SectionC3 for details). (v) Supply of services does not necessarily increase utilization rates. Experiences demonstrate the need to initiate specific activities to improve the knowledge of, and the demand for, services. The CDDP will focus capacity building efforts at decentralized levels on this issue. (vi) Capacity building is more efective if it is through learning by doing. Experiential learning i s an effective means to develop capacity and achieve sustainable results. The CDDP will adopt "learning by doing" throughout the project's activities, including the use o fthe Rapid Results Approach at decentralized levels. 5. Alternativesconsideredand reasonsfor rejection 18. Other instruments and approaches also considered were: 0 Two freestanding operations were initiallyproposedinthe Fiscal Years 2003-2005 CAS: a Community-based Rural Development Project and a successor to the Participatory Health, Nutrition andPopulation Project. Inthe context of reduced IDA allocation for The Gambia and considering the small size o f the country (The Gambia is the smallest country o f continental Africa), the two operations were replaced by this multi-sectoral community- driven development project, considered as the best approach for working efficiently and effectively across sectors at decentralized levels. 0 The choice o f an Adaptable Program Loan (APL)was discussed andrejected at the Project Concept stage. While an APL inprinciple ensures long-term commitment from the World Bank, it was considered that the small size o f the country does not require a phased approach. In addition, it was considered that the World Bank long-term commitment i s implicit inits support to the PRSP process. C. IMPLEMENTATION 1. Partnershiparrangements 19. The project will be co-financed by the Government o f Japan, which has made available a co-financing grant o f US$4.8 million under its Policy and Human Resources Development (PHRD) Fund. The PHRD co-financing grant will support up to 75 percent o fin-country training and technical assistance for capacity building. The PHRD funds will be pooled with IDA funds andthe closing date o fthe grant will coincide with the closing date o fthe project. 20. The project will coordinate its activities with the following donor-supported interventions that are currently under preparation: The International Fund for Agricultural Development (IFAD) will provide support the Rural Finance Project, the successor to the ongoing Rural Finance and Community Initiatives Project (RFC1P)-expected to close in December 2006. The Rural Finance Project i s expected to concentrate on the development o f Micro-Finance Institutions (MFI) at decentralized levels. It will provide on-demand capacity development to communities and individuals willing to engage in economic activities that can be supported byMFIs.The Rural FinanceProject i s expected to become effective in2007. 5 The African Development Bank (AfDB) will support the Entrepreneurship Development and Livelihoods Promotion (EDLPP) project. This project is expected to become effective in early 2007, and i s anticipated to be a grant o f about US$12 million. The project will focus on support to MFIs and to entrepreneurship activities nationwide. The European Commission (EC) i s preparing a program o f Support to Decentralization and Local Development. The program, currently being prepared, is expected to start in 2007. It will buildon lessons learned from the implementation o f the EC-funded Support to Decentralization and Rural Development Project, closed in2004. It is expected that the EC project, with an estimated allocation o f Euro 5 million (about US$6.0 million), would focus on policy reforms and institutional capacity building related to deepening decentralization inThe Gambia. 2. Institutionalandimplementationarrangements 2.1. AdministrativestructuresinThe Gambia 21. Implementation arrangements are grounded inThe Local Government Act o f 2002. Table 1 below provides a summary o f the administrative structures in The Gambia. It also provides an overview o fproject coverage o f these levels. TABLE1:GOVERNMENTORGANIZATION Level Numbers Representative Body Central 1 Parliament Local Areas 8 total, o f which 6 Local Area Council (LAC) covered by CDDP Wards 114total, of which 88 Ward Development Committee (WDC) (all rural wards) covered by CDDP Villages 1896 total, of which Village Development Committee (VDC) about 600 coveredby 22. Table 2 outlines the composition and development mandate of critical structures referenced inthe Act. TABLE DECENTRALIZED 2: STRUCTURESINTHEGAMBIA Level Structures Development Mandate inthe Local Government Act LGAs Local GovernmentAuthority (Local Area -- Promote development plans andprograms; Coordinate ~~ Council) economic, social, spatial, and human -1Elected Councilor from eachward settlement policies. - Finance,Establishment,Development Committees Local GovernmentServices -Departments of Finance, Services, - Plan and implement any program or project for Planning and Development, and developing the infrastructure, improving social Administration services, developing human and financial resources; - Prepare thedevelopment plan for areas 6 Level Structures DevelopmentMandate inthe Local Government Act incorporating all ward plans. TechnicalAdvisory Committee (TAC): - Provides technical advice to LAC, WDCs, and -Central Government's technical VDCs to ensure localprojectsconform to the departments that have extension workers national standards, policies, and priorities. at village and ward levels (MDFTs); -Representatives o f locally involved NGOS. Ward -WDCs Councillor (Chair); Ward - Coordinate andprioritize all development -Male and female elected planning at the ward level; representative from each VDC; - Representatives o f organizations -- Prepare ward development plans; Coordinate development assistance at ward involved inward level development; level; -- MOther co-opted members; - Review village plans to identify shared a y establish subcommittees. priorities and concerns; - M a y operate bank accounts. Village -VDCS and female representatives from Male - Identifying andprioritizing local development -eachkabilofemale representative o f each (clan); needs, inconsultation with the local community; Male and - Developingplans; raising, coordinatingand community-based organization (CBO); - Youth representative; managing financial resources at village level; -- May - Implementing and managingdevelopment plans Other co-opted members; establish subcommittees. -and projects at village level; Carrying out other functions as assignedby the LAC or WDC; - Mav oDerate bank accounts. 2.2 ImplementationArrangements 23. The project will be housed at the DOSLGL. Its implementation structure will comprise: (i) a Project Steering Committee (PSC); (ii)Project Coordination Team (PCT); and (iii) staff a field comprising Community Development Officers (CDOs) and Agents (CDAs), and extension workers o f various governmental agencies. 24. The PSCwill be responsible for the overall coordination andpolicy guidance o fthe project. It will reflect the multi sectoral nature o f the project, and will include representatives o f inter alia: Department o f State for Finance and Economic Affairs (DoSFEA), DoSLGL, Department o f State for Agriculture (DoSA), Department o f State for Health and Social Welfare (DoSHSW), Department o f State for Water Resources (DoSWR), Department o f State for Education (DOSE), National Nutrition Agency (NaNA), NGO representatives, and The Gambian Association o f Local Government Authorities (GALGA). The PSC will be responsible for: (i) approving the project's annual work plan and budget prepared by the project coordination team; (ii) providing overall co-ordination and policy advice; and (iii) approving subsequent updates o f the PIM. The PSC will meet at least quarterly. It will be chaired by the Permanent Secretary o f DOSLGL and have the Project Coordinator as Secretary. The exact composition and terms o f reference o f the PSC will be defined inthe PIM. 7 25. The PCT will be responsible for the day-to-day coordination o f the project, including oversight o f all technical, social, environmental, fiduciary, and administrative matters. It will be located in the DOSLGL, whose mandate includes decentralization reforms and community development issues. This arrangement will ensure skills transfer within an appropriate institutional context, which leads to a higher likelihood o f sustainability once the project closes. 26. At the central level, the key staff o f the PCT will comprise: (i) Project Coordinator; (ii) the the CDF Manager (Component A); (iii) Capacity BuildingManager (Component B); (iv) the the M&E Specialist (Component C); (v) the Procurement Specialist; (vi) the Financial Manager; (vii) the Administrative Assistant, and (viii) the Accountant. In addition, in each of the six targeted LGAs, the project will recruit a Financial Controller to provide technical assistance to the Local Government Authority and to ensure compliance o f financial management with the provisions o f the PIM. The PCT will report to DOSLGL's Permanent Secretary. The CDF Manager will be the Environmental Focal Point inthe PCT. 27. The CDDP field staff (notably the cadre o f DOSLGL CDAs and CDOs as well as extension staff o f various agencies) will be responsible for coordinating the project activities at village and ward levels. The project will build upon the successful model o f the Multi- Disciplinary Facilitation Teams (MDFTs), which bring together extension workers from government agencies and NGOs to address development issues at village and ward levels. Annual work plans will be usedto coordinate project activities at local level. DOSLGL staff will assist with the identification and provision o f support services by relevant sectoral line departments on a demand-driven basis. Significant capacity building activities will be undertaken at the inception o f the project in order to strengthen the skills and abilities o f field staff to effectively play these roles. An environmental focal point will be nominated within each MDFT for the purpose o f the implementation o f the Environmental and Social Management Framework (ESMF). 28. Villages and wards will take the lead in identifying and implementing development activities, with support from the project field staff, Their respective VDCs and WDCs will coordinate and monitor development planning and implementation o f identified activities. They will leverage the requisite resources to undertake project activities, including mobilizing community traditional leadership, civil society organizations, andthe private sector. 2.3 Flow of Funds 29. Local Government Authorities will be responsible for disbursing the formula-based grants for development activities at village and ward levels. Each Local Government Authority will set up a designated sub-account to receive project funds for the purpose o f disbursing grants. Disbursements o f funds from Local Government Authorities to villages and wards will be based on a tripartite agreement signed by the village/ward, the Local Government Authorities and the CDDP. The tripartite agreement will include the village/ward development plan and the indicative list and costing o f sub-projects (see also Annex 7 Appendix 3). The VDCs and WDCs will be responsible for the management o f financial and procurement aspects related to their grant allocation. VDCs and WDCs will request f h d replenishments to their respective Local Government Authority on the basis o f physical progress, certified by the relevant C D M D F T . Disbursements to VDC and WDC will be effected by the local Project Financial Controller and the ChiefExecutive Officer. 8 30. Local Government Authorities, via the project Financial Controller at LGA level, will submit replenishment requests to the PCT accompanied by a schedule detailing resources to be used for: (i)facilitation o f planning and technical backstopping o f identified development activities by MDFTs; and (ii) transfers to VDCs and WDCs to finance approved development activities. 3. Monitoring and evaluation of outcomes/results 31. Monitoring and evaluation i s seen as a key part o f the CDDP implementation process. Annex 3 outlines the indicators to measure the achievement o f the project's development objective and intermediate outcomes. The project's M&E will be geared toward tracking the CDDP's key outcomes and results. The system will be results-oriented and conceived as a management tool to be used by both project staff and participating communities. The M&E system will be oriented towards: (i) Monitoring due diligence, focused on compliance with the PIM; (ii) Monitoring and evaluating the achievement o f development objectives and outcomes; (iii)Assessing sustainability of outcomes; (iv) Assessing impact on local governance and decision-making; (v) Evaluating the level o f empowerment o f marginalized groups (women and youth); and (vi) Monitoring compliance with the ESMF and the Resettlement Policy Framework (RPF). 32. An M&E Specialist in the PCT will supervise all M&E activities under the project, be responsible for ensuring quality control o f data from decentralized levels, and take the lead in compiling the data for quarterly reporting. The Financial Manager will be responsible for analyzing the data related to fiduciary matters. All technical and financial data will be captured in a Management Information System (MIS). A mid-term evaluation will be carried out at the latest 30 months from the date o fproject effectiveness. 33. At the LGA level, the focus o f M&E will be on fiduciary aspects, particularly with respect to monitoring the use o f funds at village and ward levels. This function will be monitored by the project Financial Controller in each LGA. The Capacity Building Manager will monitor the technical aspects o f implementation, including the LGA, ward, and village capacity building activities. The project staff will also monitor outcomes related to the coordination function assigned to the LGA's TAC. 34. At village and ward levels, citizens will use Participatory M&E to track the progress with respect to desired outcomes and results they have identified as part o f the Development Planning process. This level o f M&E will be self-standing, inthat it will be managed by the communities themselves and will utilize the community scorecard approach, with technical support from CDAs when necessary. Fiduciary and technical audits will be undertaken within samples o f participating villages to ensure compliance with PIM procedures. Baseline data for the purpose o f impact evaluation will be collected, in treatment and control villages, by a third party before project activities begin. CDAs and CDOs will coordinate data collection referring to the intermediate outcomes at village and ward levels, and will provide periodic reports to the PCT for management andreporting purposes. 4. Sustainability 35. Project sustainability is based on three justifications. First, the design and implementation arrangements for the project are grounded in the Local Government Act o f 2002 (See Section C.2 for details). While this legislation demonstrates The Government o f The Gambia's overall 9 commitment to decentralization, the CDDP provides the necessary catalyst to put portions o f The Act into action through its focused support to lower institutional levels (inparticular villages and wards). Admittedly, strong political will at central level will be critical for these gains to be realized and sustained, particularly once the project closes. Other donors strengthening their support for decentralization, particularly as the project phases out, will also contribute significantly to sustainability. 36. Second, the project will avoid creating parallel structures at the levels o f coordination and implementation, given that it will strengthen the capacities o f the Local Government Authorities, WDCs, and VDCs. Existing staff of the Government Departments o f State will be integral to project implementation, including Local Government Authorities' civil servants and deconcentrated extension workers from line ministries. The project's significant focus on capacity building is geared toward skills enhancement of civil servants and citizens who will participate inproject activities. Risks RiskMitigationMeasures RiskRatingwith Mitigation To project development objective Slow implementation of the By supportingthe provisions ofthe Local Substantial decentralization process delays Government Act, the project will progress toward or contradicts ultimately contribute to the buildingo f project objectives. political will for decentralization. In addition, the project will work with other development partners (i.e. European Union, World BanWIMF macro colleagues) to further support the implementation of the decentralization framework. Weak technical and fiduciary Strong emphasison capacity development Substantial capacity within DOSLGL, MDFTs, to buildskills across administrative levels. LGAs,wards, andvillages leadsto Donors should engage inpolicy dialogue poor outcomes. withthe Government ofThe Gambia on civil service reform. Politicization o fproject activities, Project's public outreach programwill Substantial particularly duringelectoral periods. sensitize stakeholders about the needto keep development activities apolitical. To component results Duplication of activities by different Strong focus on coordinationwith other Modest projects causes confusion at major projects working at decentralized decentralized levels. levels. Elitecapture ofplanningand Planning process focused on Modest implementation at village and ward empowerment of diverse stakeholders. 10 levels. Accountability mechanisms to be put in dace at decentralized levels. Lack o f capacity and brain drain The project will support adequate Modest hampers recruitment o f qualified incentives to attract and retain staff and staff, both at the project and LGA other support workers. levels, and retention o f capacity buildingactivities. Misappropriation o fproject funds. Strong fiduciary, accountability, and Modest transparency mechanisms built into design. To fiduciary aspects Procurement Lack o f experience with Bank Recruitment o f a qualified procurement High procedures specialist and training at different levels Insufficient capacity at the local level The preparation o f a PIMwhich defines High the procurement methods and procedures for community-based contracting; standardbiddingdocuments for NCB, small works and consulting assignments Frequent supervision and control from the mainprocurement specialist to advice local communitiesresponsible on all Drocurement matters Overall risk rating Modest 6. Grant conditionsandcovenants 6.1 Conditionsof effectiveness a) The PHRD co-financing agreement has been executed and delivered and all conditions precedent to its effectiveness (other than the effectiveness o f the Financing Agreement) have been fulfilled; b) The Recipient has appointed external auditors with qualifications and experience satisfactory to IDA; c) The Recipient has adopted the PIM, including administrative, accounting and financial procedures, as well as guidelines for environmental and social screening, in form and substance satisfactory to IDA; d) The Recipient has established the PCT under terms o f reference acceptable to IDA with the following key staff with qualifications and experience satisfactory to IDA: Project Coordinator, Community Development Facility Manager, Capacity Building Manager, Financial Manager, Procurement Specialist, and M&E Specialist; e) The Recipient has recruited a Financial Controller for at least three LGAs, with qualifications and experience satisfactory to IDA; f) The Recipient has established a Financial Management System in form and substance satisfactory to IDA. 11 6.2 Conditionof Disbursement 38. No withdrawal shall be made under Category (4)(b) until it is confirmed that the three outstanding LGAs, in addition to those referred to in the effectiveness condition (e), have each recruited a financial controller under terms o f reference, and with qualifications and experience satisfactory to IDA. 6.3 Other covenants a) Submission o f a Progress report every six months (each quarter for the first year o f implementation); b) Submissiono fAnnual Work Plans andBudgets acceptable to IDAbyOctober 31o f each year (the first one is due 60 days after effectiveness); c) Mid-term review o f the Project to be undertakenby the 30thmonth from effectiveness; d) Implementationo fthe Project inaccordance with the PIM, ESMF, andRPF; e) Maintain throughout Project implementationthe PCT, PSC andthe Financial Controllers. D. APPRAISAL SUMMARY 1. Economicandfinancialanalyses 39. The project comprises three components, o f which Component A (Community Development Facility) will have direct economic or social impact on the beneficiaries, Component B (StrengtheningCapacity for Community Development) will contribute directly to these benefits, while Component C (Project Coordination, Monitoring and Evaluation) will be a precondition for delivering the project outputs under Components A and B as planned and achieving the desired impact. Given the demand-driven nature o f the project, it is not possible to determine beforehand the type andmix o fprojects that will be implementedby the communities. Furthermore, the benefits o f many social investments may be difficult or impossible to quantify in monetary terms. A meaningful quantification of project costs and benefits is, therefore, difficult. However, on the basis o f existing ward and village development plans and making conservative assumptions regarding the economic returns o f likely subprojects, the economic rate of return (ERR) has been calculated for various scenarios (see Annex 9). Taking into account the quantifiable benefits under Component A, the ERR for the whole project i s estimated at about 6.4 percent. The ERR increases to 15.3 percent (net present value: US$1.39 million), ifthe costs of only Component A are included inthe analysis. Given the fact that capacity buildingprojects are generally not subject to economic analysis, as they only yield longer-term, intangible benefits, the project can bejustified on the grounds o f the ERR for Component A, particularly as many social benefits that directly contribute to improved livelihoods o f the rural poor have not been captured by the analysis. 2. Technical 40. The guiding premise o f the CDDP is that there i s considerable latent technical and managerial capacity at the local level, which can be released through a participatory strategic planningprocess that is followed with a predictable investment envelope to finance activities. In addition, because the anticipated investments will likely be simple infrastructure, local artisans and entrepreneurs have sufficient technical knowledge and experience to implement andmanage them. The technical quality o f subprojects would be ensured by: (i) allowing communities to choose activities and technologies they are familiar with; (ii) allowing communities to procure technical assistance from the public or private sector if they choose to do so; and (iii)ensuring 12 that deconcentrated sectoral extension workers (MDFTs) and the expertise o f line agencies would be available to assist communities with guidance on issues related to their specific technical disciplines. Activities related to the different sectors would be carried out within the respective policy framework and general guidelines o fthe Government. 3. Fiduciary 3.1 FinancialManagement 41. A financial management assessment was carried out to determine whether the project implementing agencies at the central and local levels have acceptable financial management arrangements. The conclusion o f the assessment i s that, in order to satisfy the World Bank's minimum requirements under OP/BP 10.02, the financial management arrangements for the project need to be improved before project effectiveness. Strengthening o f financial management arrangements shall be achieved with the implementation o f the action planprovided in appendix 1o fAnnex 7. Key actions identified are: (i) o fthe PCT and the LGA with qualified and staffing experienced Financial Controllers; (ii) elaboration and adoption o f a PIM in form and substance satisfactory to IDA; (iii)setting up accounting software; and (iv) appointment o f external auditors with experience and qualifications satisfactory to IDA. Once the action plan i s implemented, the financial management arrangement will be adequate to provide, with reasonable assurance, accurate and timely information on the status o f the project as required by IDA. 3.2 Procurement 42. A Country Procurement Assessment Review (CPAR), carried out in The Gambia in October 1998, flagged the main issues such as the lack o f capacity regarding the Recipient's staff, the absence o f standardbiddingdocuments at the national level, the insufficient capacity o f local contractors for contracts subject to International Competitive Bidding (ICB), and corruption. Recommendations were made to address these issues. The World Bank, through the Capacity Buildingand Economic Management Project (CBEMP), provided support to strengthen the Recipient's capacity in procurement, modernize the procurement process and improve regulation (approval o f Gambia Public Procurement Act). Thanks to this plan, some o f the issues, such as training staff responsible for procurement and designing standard bidding documents, including provisions in the Code against corruption have been addressed. Nonetheless, the situation remains risky. 43. A CPIP has been carried out in2005 as anupdate o f the CPAR but the report is not yet commentedby the Government and subsequently and actionplanwith clear recommendations (capacity building, institutional reinforcement through a regulatory body, an appeal body, strengthening o f the private sector, judiciary reinforcement, etc.) i s not yet discussed and agreed. Assessment of the agency's capacityto implementprocurement 44. Procurement activities will be carried out by the Project Coordination Unit located in the DOSLGL. The project procurement functions will be assured by a Procurement Specialist. Given the difficulty o f finding qualified procurement specialists in The Gambia, the CDDP Procurement Specialist, recruited on a competitive basis, will be eligible for short-term consulting fees. The recruitment o f the procurement specialist, and other key staff inthe project, i s condition o fproject effectiveness. 13 45. An assessment o f the capacity o f the Implementing Agency to implement procurement actions for the project reviewed the organizational structure for implementing the project and the interactionbetween the project's staff responsible for procurement and the Government's central unitfor administration andfinance. 46. The key issues and risks concerning procurement for implementation o f the project have been identified and include lack o f experience in World Bank procurement procedures and insufficient capacity at the local level. The corrective measures which have been agreed are: (i) recruitment o f a highly qualified procurement specialist knowledgeable o f World Bank guidelines; (ii)training o f project, LGA staff and communities on procurement issues; and (iii) preparation o f a PIM which defines the procurement methods and procedures for community- based contracting; standard bidding documents for N C B, small works and consulting assignments and (iv) Frequent supervision and control from the main procurement specialist to advice local communities responsible on all procurement matters. 47. The overall project risk for procurement is high. 4. Social 48. A social and gender assessment was financed as part o fproject preparation, and outlines the key opportunities, constraints, and prospective impacts and risks arising out o f The Gambia's socio-cultural and political context, particularly in rural areas. The CDDP design draws from these recommendations, and builds upon the country's rich legacy with respect to participatory and demand-driven development activities at community level. Project design also responds to the institutional opportunity to work in concert with LGAs to develop their capacity to support community-driven initiatives. The design also reflects concern raised in the social and gender assessment with respect to the issue o f inclusion, particularly o f women and youth in decision- making and access to resources. The CDDP strategic planning methodology is broadly participatory and geared toward fostering inclusion throughout all stages o f project work at the local level. This approach will give voice to those who are typically on the margins, and enable them to have meaningfulroles in articulating the community's future andputtingthat vision into action through the project's CDF. Existing leadership structures at the village level, notably the VDC, will be validated for their representativeness and leadership qualities during the planning process supported by the project. This approach will mitigate exclusionary and elite captured entities that would diminish the project's ability to promote transparency, inclusion, and strengthened village governance. Mechanisms to monitor inclusiveness, satisfaction with project outcomes, transparency, and local governance are also developed in the M&E framework, and will be disaggregated by gender inorder to take corrective action when necessary. Inaddition to conventional M&E, communities themselves will monitor progress with respect to these indicators through the use o f community scorecards. 49. Project preparation has been broadly participatory. A Core Team, comprising representatives of government agencies and civil society organizations, has overseen the project design, including oversight o f the social and gender assessmerit and the ESMF. These assessments, in addition to field visits by project preparation staff, engaged various stakeholders at community and local government levels in technical discussions to vet the proposed project design. These stakeholders, particularly at village and LGA level, will be the leading actors in project implementation. 14 5. Environment 50. Under Component A, the CDDP will finance community-driven activities which will be identified on the basis o f a participatory strategic planning process. Activities are likely to include sub-projects such as: construction and rehabilitation o f feeder roads, health care facilities, andvaccination parks; and activities related to improvements inagricultural production and thus an increased use o f pesticides. Based on experience with similar sub-projects, potential negative environmental and social impacts are likely to include soil erosion, water and soil pollution, loss o f vegetation, increase in solid and liquid waste, including medical waste, pesticide poisoning, andpesticide residues inthe food chain. 51. Since the locations and potential negative localized impacts o f the future sub-projects were not known at appraisal, the Recipient has prepared an ESMF that outlines an environmental and social screening process for sub-projects and includes: i)Guidelines for an Environmental Management Plan (EMP); ii)Environmental Guidelines for Contractors; iii)a summary o f the World Bank's safeguard policies; iv) a Pest Management Plan (PMP); andv) a National Medical Waste Management Plan (NMWMP). A RPF was prepared for identifying and mitigating potential negative environmental and social impacts at the sub-project planning stage. The RPF outlines the policies and procedures to be followed in the event that sub-projects require land acquisition. To ensure that the sub-projects are implemented in an environmentally and socially sustainable manner, the ESMF formulates recommendations to strengthen environmental management capacity, as well as implementation and monitoring o f corrective measures. Annex 10provides further detail on the ESMF and RPF. 52. In coordination with the PCT, the day-to-day monitoring activities will be carried out by technical agents o f the MDFT, the LGAs and V D C to follow-up on environmental and social indicators andthe implementation o f corrective measures, ifnecessary. 6. Safeguardpolicies 53. The project has triggered (i) 4.01 Environmental Assessment due to future construction OP and rehabilitation activities as well as potential impacts related to medical waste management; (ii)OP4.09 PestManagementduetothepotentialincreaseintheuseofpesticidestoimprove agricultural production; and (iii)OP 4.12 Involuntary Resettlement due to the potential need for land acquisition for future sub-projects. The safeguard screening category is S2, and the environmental screening category is B. 54. In an effort to address potential negative environmental and social impacts o f future sub- projects, the Recipient has prepared an ESMF and an RPF. Both documents have been approved and disclosed inThe Gambia andat the World Bank's InfoShop onFebruary 17,2006. 55. The ESMF outlines an environmental and social screening process for sub-projects and includes: (i)Guidelines for an EMP; (ii) Environmental Guidelines for Contractors; (iii)a Summary o f the World Bank's safeguard policies; (iv) a PMP; and (v) a NMWMP. 56. The RPF outlines the policies and procedures to be followed inthe event that sub-projects require land acquisition. 15 Yes No EnvironmentalAssessment (OP/BP/GP 4.01) [XI [ I Natural Habitats(OPBP 4.04) [ I [XI PestManagement(OP 4.09) [XI [I Cultural Property(OPN 11.03, beingrevised as OP 4.11) [ I [XI Involuntary Resettlement (OPBP 4.12) [XI [ I IndigenousPeoples (OD 4.20, beingrevisedas OP 4.10) [I [XI Forests(OP/BP 4.36) [I [XI Safety ofDams (OPBP 4.37) [ I [XI ProjectsinDisputedAreas (OPBP/GP 7.60)' [ I [XI Projectson InternationalWaterways (OPBP/GP 7.50) [ I [XI 7. PolicyExceptionsandReadiness Procurementplanfor the first 18 monthsof activities:This was providedat Negotiations. Disclosurerequirementsmet: All disclosurearrangementshavebeenmet.The ESMFandthe RPFwere hllydisclosed. Resultsassessments arrangementscompleted:TheResultsFrameworkhasbeendiscussedand agreeduponwith the Government. --- By supportingtheproposedproject,the World Bank does not intend toprejudice thefinal determination of theparties' claims on the disputed areas 16 Annex 1:Countryand Sector or ProgramBackground THE GAMBIA, Community-DrivenDevelopmentProject 1.1Key elementsof The Gambia's poverty reductionstrategy 1. Poverty in The Gambia is pervasive and i s largely a rural phenomenon. Two thirds o f Gambians live below the poverty line while almost 40 percent o f the households are food poor. Three-quarters o f the poor live inrural areas, where extreme poverty i s increasing. The objective o f The Gambia's Poverty Reduction Strategy i s to reduce disparities in access to sources o f income and empowerment, and is articulated around five pillars: (i)creating an enabling environment for economic growth and poverty reduction; (ii) enhancing the productive capacity and social protection o f the poor; (iii) improving the coverage o f and access to basic social services; (iv) buildingthe capacity o f local communities and their organizations to play a greater role in poverty reduction; and (v) mainstreaming cross-cutting poverty issues (gender, environment, nutrition, HIV/AIDS, etc.). The strategy emphasizes decentralization and direct interventions at the community level, thus enabling local governments to develop the capacity and responsibility for implementing and monitoring the PRSP with the goal o f attaining the MDGs. 2. However, recent poor economic performance has undermined progress toward both the PRSP and MDGs. The poverty headcount target and half o f the country's education and health indicators are substantially off-track. The Gambia's health and social indicators are among the lowest in sub-Saharan Africa. While health status in the country has improved over the last decade, infant and child mortality rates are still high and maternal mortality remains a critical issue due to malnutrition and infectious diseases, including HIV/AIDS andmalaria. 1.2 Key issuesand constraints 3. Poverty in The Gambia is much higher in rural areas, where it has increased considerably since 1992. The latest Household Poverty Survey revealed a highincidence o f poverty and threat to livelihood security inthe country, with an increasingproportion o f the population livingbelow the poverty line over the past decade: overall poverty is 69 percent. Seventy-four percent o f the total population is rural while only 52 percent o f the total population is literate. Almost 30 percent o f the total population is categorized as undernourished and 20 percent o f the under five children are said to be suffering malnutrition. Women and youth are particularly disadvantaged due to lack o f diversified access to resources and income generation opportunities. The 2003 Food Security and Nutrition Survey reports that up to 11percent o f the rural population in The Gambia i s categorized as most vulnerable to food insecurity. This group has less than four months o f food self sufficiency, against a food stress period o f about six months per year. 4. The capacity o f the Gambian population to achieve sustainable household livelihood security in terms o f access to income and resources to meet basic needs (including adequate access to food, potable water, quality health services, educational opportunities, housing, and time for community participation and social integration) has increasinglybeen eroded inthe past decade. The World Human Development Report (WHDR, 2005) has ranked The Gambia 155th among 174countries and as one o f the least developedcountries. This situation is directly related to the agricultural sector, the principal income-generating activity in rural areas. Overall agricultural production and productivity are low and over-dependent on groundnut. Livestock 17 and fisheries remain predominantly traditional. The causes o f this situation include the lack o f diversification within and from agricultural activities, the absence o f a basic rural infrastructure ' base (storage, processing, transport), poor extension services, and insufficient access to capital and new technologies. 5. While the Local Government Act o f 2002 articulates a strong framework for decentralizationinthe country, implementation o f the legislation i s lagging. Under this Act, local governments became critical to the fight against poverty. They are now full stakeholders in social and economic development and are expected to fulfill Government's mission o f continuity, presence and proximity in the implementation o f national policies and the delivery o f public services in their areas o f administrative control. Through decentralization, local government authorities are now expected to consolidate the spatial and institutional environments for the performance o f economic operators, guarantee equal access to social services and ensure the consistency o f economic development, social action and inclusion. The integration o f local potential into the new national strategies o f development i s the basis o f local government policy and it i s recognized inparticular that local government authorities need to be able to meet fully the demands relating to service delivery, local development, democracy and participation. 6. Though participation and community empowerment are seen as critical contributors to reducing poverty, this conflicts with entrenched interests and approaches that are top-down and supply-driven across the major sectors. Political decentralization is in place, with local government elections occurring every four years. Administrative decentralization i s only partially affected, with a fair amount o f deconcentration o f line ministry staff outside o f Banjul, but with no functional devolution having taken place to date. As a result o f this centralized accountability chain, extension staff o f key Departments o f State lack the ability to make meaningful and informed decisions about issues that directly affect poverty outcomes in rural areas, Fiscal decentralization instruments mandated by the Act are not operational, leading to a massive financing gap for critical services at decentralized levels. In short, the Local Government Authorities are clearly not yet fulfilling many o f the functional roles mandated to them under the Act. At ward and village levels, structures established under the Local Government Act are often not h c t i o n a l unless externally supported. Linkages between deconcentrated line department staff andward andvillage committees are not clearly defined and interactions are on an ad hoc basis. These weaknesses translate into poor development outcomes at decentralized levels, particularly in the poorest and most vulnerable localities and inthe most critical sectors. 1.3 What the country is doingto addresstheseissues. 7. Some o f the key constraints identified above also serve as potential catalysts to address poor development outcomes in rural areas. Inparticular, the Government has demonstrated its priority inenabling legislation such as The Local Government Act (2002) and Audit and Finance Act (2004). It acknowledges its past weaknesses and the failure o f the state to provide adequate social services, capacity building activities at local levels, and access to markets to make a meaningful and sustained impact on poverty and has stated its commitment to a meaningful process o f devolution, whereby citizens, local governments, and civil servants have the mandate, ability, and resources to achieve tangible development results. This situation arose despite being addressed in the Gambia PRSP, and i s largely attributable to insufficient resources reaching the poorest areas o f the country. Inparticular, the public sector has failed to deliver critical services 18 inrural areas. Severe capacity constraints havelimitedthe ability ofthe stateto recruit andretain high-calibre extension staff to tackle the multiple determinants o f poverty. As a result, rural communities in non-served or underserved settlements get by with poor socio-economic conditions. Outcomes inkey sectors reinforce this reality: agriculture i s constrained by its lack o f diversification; education lacks sufficient human capital; health outcomes compare poorly to neighbouring countries and are constrained by insufficient fhding, lack o f qualified personnel, anddrug shortages. 19 Annex 2: Major RelatedProjectsFinancedby the World Bankand/or other Agencies THE GAMBIA, Community-DrivenDevelopmentProject A P B : Social Development Fund. Objectives: (i)increased access to social and economic services and infrastructure; (ii)strengthened grassroots institutions and local administration through better governance and effective decentralizationpolicy implementation. APB: Community Skills Improvement Project. Objectives: (i) strengthen capacities o f partner to implementing agencies; (ii) to provide access to functional literacy and income-generating skills to women andout-of-school youth; and (iii) to ensure access to micro-credit. IFAD: Rural Finance and Community Initiatives Project. Objective: Improvement o f household food security and incomes in the rural areas o f The Gambia by developing on and off- farm production activities by increasing access to rural microfinance services and agricultural technical support. European Union: Support to Decentralized Rural Development. Objective: To reduce poverty. It consisted o f five pillars of intervention: (i)Support to local government reform; (ii) Divisional projects; (iii) Village water supplies; (iv) Micro-credit; and (v) Discretionary interventions. WorldBank enablingenvironment 20 Annex 3: ResultsFrameworkand Monitoring THE GAMBIA, Community-DrivenDevelopmentProject ProjectOutcomeIndicators Use of ProjectOutcome (Allindicators gender disaggregated) Information Rural communities, inpartnership 70 percent of Community Subprojects Determines need to adjust the with Local Government Authorities, results' achieved. planning and implementation plan, implement and maintain their process andresource allocation. priority social and economic investments. Satisfaction2 with the results o f the Determines relevance o f investments subprojects increasesby 10percent each selected andneedto adjust planning year insample targeted ruralpopulation up and implementation process. to 90 percent by the end o f the project. completion. ComponentOne: CommunityDeve pment Facility Local Government Authorities, 100percent o f annually budgetedfunds are Indicates the needto adjust project villages and wards receive and disbursedeach year. procedures. account for funds ina timely and transparent manner. Average replenishment time for LGA, Indicates process improvement and WDC andVDC i s reduced by 50 percent enhanced organizational compared to Year 1. effectiveness. Flags skill, motivation and training deficits. 80 percent of surveyed citizens invillages know the use and the amount o ffunds disbursedthrough their VDC. Determines iftransparency has been 60 percent of surveyed citizens inwards achieved inthe use o f funds at the know the use and the amount o f funds local levels. disbursedthrough their WDC. All fundsutilizedinaccordance withPIM Financial and Procurement guidelines. Shows if financial management and procurement capacity is inplace and ifstrategy for compliance needsto be changed. 'Sample Results: (a) Percentageofproducereachingmarketsellers fresh andon time; (b) Reduceabsenteeisminfifthandsixthgradesinthree public schoolsinlow-incomedistrictsby 30% in 90days; (c) Increase availability of seedsbyx% basedon Marchbaselinefor communitybank andindividualhouseholds. Criteriafor "functional" and"satisfied" definedinthe PIM 21 Targeted rural villages and wards are All targeted villages and wards have Indicates ifplanning o f capacity able to plan and manage social and strategic development plans, developed in buildingactivities are effective and economic investment activities. accordance with PIM technical guidelines. ifstrategy for complianceneedsto be changed. 90 percent o f village and ward development Indicates ifimplementation capacity plan activities implemented in accordance buildingactivities are effective. with PIMtechnical standards. Services delivered insupport o f Satisfaction with quality3 o f services Indicates ifcapacity-strengthening community-driven development provided insupport o f CDD increases by 10 activities for service providers and improved. percent each year in sample rural coordination o f services at ward populationup to 75 percent by Year 5. level are effective. Project components are effectively 90percent o f regular andrandomtechnical, Indicates ifmanagement and coordinated and monitored. financial and procurement audits at PCT, oversight o fproject activities on LGA, ward and village level are annual basis at national and unaualified. decentralized levels i s effective. "Quality", includingtiming of servicedefined in the PIM 22 E+o > g 0 W \ cd m 0 m 00 0 g c r p g 0 22 \W P O 3 22 F g 2 s ..0 W 0 N g g s 0 W \0 F 2 2 00 g 0 2 0 ru 0 5 -8 a 7% 0 .CI aM ? 3m90x .r( cp m g 0 0 5: E1 m m m 0 b 2 m 0 E1 0 E1 m m m 0 \o m 0 E1 0 5: m m m m 0m 0 5: 0 E1 m Vl m 0 d m s m s g m m m 5: Annex 4: DetailedProjectDescription THE GAMBIA, Community-DrivenDevelopmentProject 4.1 ProjectCoverage 1. The project will target 88 wards and approximately 600 villages in the six rural Local Government Areas o f The Gambia, and will benefit a population estimated at 435,000 people. (See Annex 6 for details on the decentralized administrative structures within LGAs that will participate inthe project). 2. The project will be based on the following key designprinciples: Address the priority concerns o f the communities, ensuring that they play an effective role inproject cycle (from planningto evaluation) o f local development activities; Select participating villages based on a transparent and equitable criteria; Strengthen the capacities o f decentralized actors, from community members to Local Government administrators and representatives; Limit its support at central-level to: (a) few key government agencies (agriculture, health, local government, nutrition); and b) activities needed to supervise, coordinate andmonitor activities at the decentralized level; Work with existing institutional arrangements that take into account the multi-sectoral nature o f the project and the evolutiontowards a fully decentralized context; Coordinate with other development partners to maximize synergies and complementarity; Develop a results-oriented - yet simple - monitoring and evaluation system; Buildcapacitythrough "learning bydoing". 4.2 ProjectComponents 3. The project would be built around three components: A) Community Development Facility; B) Strengthening Capacity for Community Development; and C) Project Coordination and Monitoringand Evaluation. Component A: Community Development Facility (US$10.8 million, of which IDA US$9.2 millionandPHRDUS$0.5 million) 4. The component will support an investment facility to finance community-driven activities identified on the basis o f a participatory strategic planning process. The CDF provides an opportunity for communities to take charge o f local development challenges through experience with participatory planning, budgeting, financial management, and implementation of development activities. Given the demand-driven nature o f the project, participating villages and wards will have an open menu o f social and economic activities, including capacity building activities and matching grants for income generating activities. Criteria and procedures for use o f the CDF will be described in detail in the PIM. Technical and fiduciary reviews o f the activities will be placed at levels corresponding to their area o f intervention and their level o f complexity. The budget allocation for participating villages and wards will be determined via a formula based on population and poverty levels (see below). The investment envelope will be made known at the outset o f the planning cycle. Each Local Government Authority will manage a project designated sub-account to disburse the formula-based grant allocations to villages and wards. In turn, villages and wards will manage funds to implement their Development Plans and 25 subprojects. While the PIM will describe in detail the CDF's criteria and procedures, the followingparagraphs present the main features o f Component A. 5. Resource allocation. Inthe six targeted rural LGAs, the CDF will cover all o f the 88 wards, and approximately 600 villages (about one third o f villages). A formula, based on population, will determine the grant allocation for each ward and village. Calculations will be made for each participating ward and village, and funds will be allocated on the basis o f activity plans. It is anticipated that, on average, each village and ward will receive US$12,000 and US$30,000, respectively. Communities will contribute ten percent, through cash and/or in-kindcontributions (e.g. localmaterials, voluntary labor). 6. Selection of participating villages. Given that all wards will participate, the list o f participating villages in a given ward will be decided at the ward level. A transparent and equitable approach to select participating villages will be presented in the PIM, based on criteria that include village size and poverty proxies. The final list o f villages selected to participate inthe project willbe validated by the PSC. 7. Village and Ward Development Planning. Strategic (three-year) development planswill be prepared by participating villages and wards. The DOSLGL's CDAs will facilitate this process. They will work inpartnership with extension workers from other government agencies and civil society organizations, building on the MDFT model that was successfully introduced in the country by an EC financed project. The planning cycle will comprise: village/ward preparation and sensitization, diagnosis, three-year strategic development planning, results-oriented activity planning for specific goals from the strategic plan, M&E. Strategic plans will be prepared under the guidance o f village and ward development committees and will be validated by the communities themselves. Both village and ward Strategic Plans will be endorsed by Local Government Authority through the Technical Advisory Committee. Disbursements o f funds from Local Government Authorities to villages andwards will be based on a tripartiteagreement signed by the village/ward, the Local Government Authorities and the CDDP. The tripartite agreement will include the village/ward Strategic Plan as well as the indicative list and costing o f sub- projects (see also Annex 6). This will be followed by implementation o f activities that are identified in the Strategic Plans. Village planning will be the initial priority o f the project, with ward plans and financing commencing inYear Two o fthe project. 8. Eligible activities. Criteria for eligibility o f activities to be financed by the fund will be described inthe PIM. Ingeneral, an open menuwill be used, and the PIM will provide a negative list and general qualifying criteria for eligible activities. CDAs will ensure that VDCslWDCs are knowledgeable o f these criteria and carry out their planningaccordingly. 9. Activities to be financed are expected to fall under the following broad categories: i) Socialandeconomicinfrastructure; ii) Capacity-buildingactivities; iii) Incomegeneratingactivitiesthatwilleitherbeintroducedonapilotbasis,orbeofa "public-good" nature. 10. For activities o f a reasonable technical and financial threshold, line ministry extension workers will provide necessary advice and reviews. Only in the case o f technically complex or expensive (above US$lS,OOO) individual activities will authorities at the level o f the LGA be required to review and approve specific activities. Details o f this arrangement will be outlined in the PIM. 26 11. VDCs and WDCs will manage finances to be spent on their plans, CDAs will facilitate the planning process, supervised by the CDOs. Supervision o f activities under the plan will be undertaken by sectoral extension workers (MDFTs), except where technically complex. In this case, contracted technical assistancewill support supervision. 12. With respect to M&E, both process- and outcome-oriented indicators will be monitored by project stakeholders. PCT staff will monitor prescribed indicators for both management and reportingpurposes, andstakeholders at the local level will engage inparticipatory M&E. 13. The Good Governance Facility (GGF). Component A will also support accountability activities that are conceptualized, proposed, and implemented by Gambian civil society organizations (CSOs). Resources will be channeled to CSOs to promote good governance at decentralized levels, particularly focused on Area Councils, WDCs, and VDCs. An annual Call for Proposals will explain the principles o f the CDDP and the GGF, outline application guidelines, and invite CSOs to submit proposals based on a simplified proposal format. A selection committee, reflecting the composition o f the PSC, will review proposals for their feasibility, prospective impact, cost effectiveness, and innovation. The PIM will provide details o f the fhctioning o f the GGF. 14. The component will support civil works, equipment, training, study tours, technical assistance, consulting studies, goods, services, operating costs o f field staff, including salaries and/or allowances. Component B: Strengthening Capacity for Community Development (US$6.3 million, of which IDA US$2.1 millionand PHRDUS$3.35 million) 15. Villages and Wards. At this level, intensive training will be undertaken to build the capacities o f citizens to understand their roles and responsibilities in a decentralized governance context, and put these into action. Villages and wards will be trained in a simplified, results oriented strategic planning approach that i s transparent and broadly participatory. This methodology will be described in the project's Field Guide, which forms part o f the PIM. This process will be coordinated by VDCs and WDCs, but will rely upon broad engagement o f diverse stakeholders (civil society, private sector, traditional leaders, etc.) at the local level to succeed. Villages and wards will also be trained inthe Rapid Results Approach (RRA), a methodology that provides a direct means o f achieving intermediate outcomes. RRA provides quick success, results and learning that is grounded in: capacity-building and learning; stakeholder exchanges for mid- term and final reviews across villages, wards and LGAs; proven tools including team operating plans, work plans, tracking charts, andprogress reviews; andtransparency, including participatory monitoring and public display o f development activities at village and ward levels. RRA will be used in implementing activities identified intheir strategic development plans. VDCs and WDCs will also receive focused training on fiduciary matters in order to efficiently and transparently handle financial resources made available to them under the CDF. As mentioned above, representatives from villages and wards will also be trained in participatory monitoring and evaluation, in order for them to track progress over time with respect to the goals set in their development plans. 16. Local Government Authorities. Given that the main entry-point and locus o f project activities will be within the six rural LGAs, the project will work intensively to develop the skills and abilities o f existing staff at this level to support and sustain community development. The first target audience will be the Planning and Development and Finance Departments o f each Local Government Authority. These staff will be trained inkey areas related to project implementation, 27 and will "learn by doing" through their support to downstream activities at village and ward levels, in addition to their technical and fiduciary reporting and oversight responsibilities under the project. The Technical Advisory Committee will be another target audience, given their mandate under the Local Government Act to ensure that development activities at LGA, ward, andvillage levelconform to national standards, priorities, andpolicies. 17. Staff of GovernmentAgencies. This will develop the capacity o f sectoral extension workers to assist with identification, appraisal, and supervision o f activities financed by the CDF. The project will build upon the successful model o f the MDFTs, which brings together sectoral extension workers and other key stakeholders to address development issues at village and ward levels. Significant capacity building activities will need to be undertaken at the inception o f the project in order to strengthen the skills and abilities o f deconcentrated staff in the relevant government agencies to undertake these roles. Staff will be trained to enhance their role in supporting decentralized planning and implementation at village and ward levels, and the component will support sensitization and training in key areas such as participatory planning, reporting and work planning, team building and coordination, facilitation techniques, coaching skills, conflict resolution, M&E (especially as it relates to community-level activities within their sectoral discipline). Inparticular, training will focus on undertaking feasibility studies that verify the technical and fiduciary viability o f development activities that are identifiedby participating communities. This support will be provided in the form o f training, equipment (e.g. motorcycle transport for CDAs), andrecurrent costs (e.g. fuel, allowances, etc). 18. The component will support civil works (office rehabilitation at LGA level), equipment, training, study tours, technical assistance, consulting studies, goods, services, operating costs o f field staff, salaries and allowances o f trainers. ComponentC: ProjectCoordination,MonitoringandEvaluation(US$1.65 million,ofwhich IDA US$0.45 millionandPHRDUS$0.95 million) 19. The component will be based on the principles o f simple design geared toward effective oversight o f technical and fiduciary aspects o f the project, and will be mainstreamed within DoSLGL. At the central level, the project will be implementedunder the overall supervision o f an Inter-Departmental Steering Committee responsible for policy orientation, for the approval o f annual work plans and budgets, and for reviewing progress activities. A PCT will be responsible for oversight o f project activities, and is justified in the Gambian context because o f severe capacity constraints within the civil service. Its size will be limited to core functions critical to the project's success (overall coordination, monitoring and evaluation, and fiduciary matters). The PCT will be located within the DOSLGL and reports to the Permanent Secretary o f the latter. The key staff o f the PCT at central level will comprise: (i) the Project Coordinator; (ii) CDF the Manager4 (Component A); (iii) the Capacity Building Manager (Component B); (iv) the M&E Specialist (Component C); (v) the Procurement Specialist; (vi) the Financial Manager; (vii) the Administrative Assistant, and (viii) the Accountant. In addition, at LGA level, a Financial Controller will provide technical assistance to the LGAs and will ensure compliance o f financial management with World Bankrequirements. 20. Monitoring and Evaluation (M&E) will focus on results-oriented data collection for the purpose o f management decisions and impact evaluation. It will enable beneficiaries and DOSLGL to: monitor due diligence focused in compliance with the PIM; monitor and evaluate achievement o f the development objectives; evaluate whether the project's implementation The CDF Manager will also be the Environmental Focal Point inthe PCT 28 approach will be sustainable and have the desired outcomes; and assessing project's impacts on local governance and decision-making, along with evaluating the extent to which project activities empower marginalized groups (women and youth). 21. The M&E system will be based on four inter-related activities: 0 Project-levelM&E: the project team will monitor and evaluate project inputs, processes andoutputs, andtake management decisions based on findings; 0 Participatory M&E: communities will identify indicators, decide on monitoring arrangements (source and frequency of data collection) and track progress toward the achievement o f results identified intheir development plans. Given rich experience inThe Gambia with the Community Scorecard, this approach is likely to be employed; 0 Randomized technical and financial audits: a third party will undertake, every year, random technical and financial audits o f at least 10% o f subprojects inparticipating wards andvillages; 0 Impact evaluation: a third party will conduct an external evaluation o f the project, including developing and fielding a baseline survey at the beginning o fthe project. 22. The M&E Specialist o f the PCT will supervise all M&E activities under the project. Collected data at all levels will be captured ina MIS. 23. The component will support civil works (rehabilitation), equipment, training, study tours, technical assistance, consulting studies, goods, services, operating costs o f PCT and field staff, salaries and allowances o f PCT staff andtrainers. 29 Annex 5: Project Costs THE GAMBIA, Community-DrivenDevelopmentProject TABLE5.1:PROJECT BASELINECOSTSBYCOMPONENT AND TOTAL COSTS (US$ '000) Component Local Foreign Total A. Community DevelopmentFacility 10,500 10,500 B. Capacity Strengthening 4000 2100 6100 C. ProjectCoordinationandM&E 1000 500 1500 D.PPFRefinancing 245 245 TOTAL BASELINECOST 15,500 2,845 18,345 PhysicalContingencies 2 5 7 Price Contingencies 498 150 648 TOTAL PROJECTCOST' 16,000 3,000 19,000 Identifiable taxes and duties are US$471,500 and the total project cost, including taxes, i s US$19,000,000. Therefore, taxes amount to 2.5 percent of total project cost. TABLE5.2: SUMMARY OFPROJECTCOMPONENT COSTSBYFINANCIERS (US$ '000, rounded) IDA Grant PHRDGrant Government Beneficiaries Total Component Amount YO Amount YO Amount YO Amount YO Amount YO A. Community DevelopmentFacility 9,200 85% 500 4% 0% 1,100 10% 10,800 56% B. Capacity Strengthening 2,100 34% 3,350 53% 850 13% 0% 6,300 34% C. ProjectCoordination and M&E 450 27% 950 58% 250 15% 0% 1,655 9% D.PPFRefinancing 250 100% 0% 0% 0% 250 1% Total PROJECTCOSTS 12,000 63% 4,800 25% 1,100 6% 1,100 6% 19,000 100% 30 Annex 6: ImplementationArrangements THE GAMBIA, Community-DrivenDevelopmentProject 6.1. AdministrativestructuresinThe Gambia 1. The Project, whose implementation arrangements are grounded in The Local Government Act o f 2002, will support the six rural LGAs o f The Gambia. Table 6.1 below provides a summary o f the administrative structures in The Gambia and an overview of project coverage o f these levels. Level Numbers ElectedBody Administrative Body Central 1 Parliament Departments of State Local Areas 8 total, of which 6 LAC LGA covered by CDDP Ward 114 total, o fwhich 88 WDC WDC covered by CDDP Village 1896total, of which 600 VDC VDC covered by CDDP Unit Structures DevelopmentMandate inthe Local Government Act LGA LAC -- Promote development plans andprograms; Coordinate -1 Elected Councilor from each economic, social, spatial, and human ward settlement policies. - Finance, Development Committees LGA: - Plan and implement any programor project for -Departments of Finance, developing the infrastructure, improving social Services, Planning and services, developinghumanand financial Development, and resources; Administration - Preparethe development plan for areas incorporating all ward plans. TAC: - Provides technical advice to Area Council, -Central Government's WDCs, and VDCs to ensure local projects technical departments that have conform with the national standards, policies, and extension workers at village priorities. and ward levels (MDFTs); -Representatives of locally involved NGOs. 31 WDCS - Ward Councillor (Chair); - Coordinateandprioritize all development -Male and female elected planningat the ward level; representative from each VDC; - Representatives of -- Preparewarddevelopment plans.; Coordinatedevelopmentassistance at ward organizationsinvolvedinward level; level developmentactivities; - Reviewvillage plans to identify sharedpriorities VDCs --- Mav Other co-optedmembers; andconcerns; establish subcommittees. Male and female -- May operatebankaccounts. Identifying andprioritizinglocal development representatives from each needs, inconsultation with the local community; kubilo (clan) - Developingplans; raising, coordinatingand - Male andfemale managingfinancial resources at village level; representative of each CBOs - Implementing andmanagingdevelopment --- May plans Youthrepresentative andprojects at village level; Other co-optedmembers - Carrying out other functions as assignedby the establish subcommittees LAC or WDC; - May operatebank accounts. 6.2. ImplementationArrangements 3. The project will be housed in the Department o f DoSLGL, and implementation will comprise (See Figure 6.1): (i)PSC; (ii)PCT; and (iii) staff o f DOSLGL (CDOsKDAs) a a field andsectoral extension workers (MDFTs). 4. The PSC will be responsible for the overall coordination and policy guidance. It will reflect the multi sectoral nature o f the project, and will include representatives o f inter alia: DoSFEA, DoSLGL, DoSA, NaNA, DoSHSW, DoSWR, DOSE,NGO representatives, andthe GALGA. The PSC will be responsible for: (i) approving the project's annual work plan and budget prepared by the PCT; (ii) providing overall co-ordination, policy advice, and control o f operations; and (iii) approving subsequent updates o f the PIM andthe financial and accounting manuals. The PSC will meet at least quarterly. It will be chaired by the Permanent Secretary o f DoSLGL and will have the Project Coordinator as Secretary. 5. Day-to-day management and coordination o f the project will involve a mix o f existing staff from the DoSLGL andinterim PCT Staff. 6. The PCT will be responsible for the day-to-day coordination o f the project, including oversight o f all technical, fiduciary, and administrative matters. It will be located inthe DOSLGL, whose mandate includes decentralization reforms and community development issues. This arrangement will ensure skills transfer within an appropriate institutional context, which leads to a higher likelihood o f sustainability once the project closes. The key staff o f the PCT at central level will comprise: (i)the Project Coordinator; (ii) CDF Manager' (Component A); (iii) the the Capacity Building Manager (Component B); (iv) the M&E Specialist (Component C); (v) the Procurement Specialist; (vi) the Financial Manager; (vii) the Administrative Assistant, and (viii) the Accountant. Inaddition, at LGA level, a Financial Controller will provide technical assistance to the Local Government Authorities and will ensure compliance o f financial management with World Bank requirements. The PCT will report to DOSLGL's Permanent Secretary. Detailed terms o freference for the PCT and its staff will be developed inthe PIM. The CDF Manager will also be the EnvironmentalFocalPoint inthe PCT 32 FIGURE6.1:PROJECT INSTITUTIONAL CHART 7. The CDDP field staff (notably the cadre o f DOSLGL CDAs and CDOs as well as extension staff o f various agencies) will be responsible for coordinating the project activities at village and wardlevels, The project will builduponthe successful model o fthe MDFTs, which bringtogether extension workers from government agencies and NGOs to address development issues at village and ward levels. Annual work plans will be used to coordinate project activities at local level. DOSLGL staff will assist with the identification and provision o f support services by relevant sectoral line departments on a demand-driven basis. Significant capacity buildingactivities will be undertaken at the inception o f the project inorder to strengthen the skills and abilities of field staff to effectively play these roles. Figure 6.2below provides an overview o f these arrangements. 33 FIGURE CDDP's TEAMORGANIZATIONALCHART 6.2: I CDDP Coordinator I MBESpecialirt Financial ................. .................... ......**..*..... .................... .....*.*................**.*.* I .......... Istanotthe project .... ...................................... :Staffof public service -I ................ 1 -ICollaborabon Hierarchy 6.3 Sub-project Cycle 8. Ultimately, project implementation responsibilities will rest with villages and wards themselves. Their respective VDCs and WDCs will act as the umbrella institutions to spearhead development planning and implementation of activities that are identified. They will leverage the requisite resources to undertake project activities, including mobilizing community traditional leadership, civil society organizations, and the private sector. Table 6.3 provides an overview of the key phases and steps inthe sub-project cycle at the village level. Similar phases and steps will be used at ward level in year 3 o f ward participation, in order to develop ward level plans and undertake development activities identified therein.Intensive capacity buildingactivities will also be built into the sub-project cycle to strengthen communities' awareness and abilities within the context o f decentralization. 34 TABLE6.3: SUBPROJECTCYCLEPHASESAND STEPS sieps ...Baseline study (for impactevaluation) Briefinglocal leadership; Training o f trainers for CDOs; r --- Training of CDAs; Village leadership agreement; Definitiono ftasks, profile and incentives for village Facilitator and village FacilitationTeam; Village diagnosis Village planning informationmeeting; Actor inventory and analysis; Inventory and analysis of village situation; IVillageplanning ------ Village sensitization. Validation of diagnosis invillage plenary meeting. --- Development disclosed ; Visioning: development of long-term vision; CDF allocation of three-year results-oriented strategic plan; Validation of the 3-year plan; I Identification ofpriority results areas, scope andbudget allocation; Feasibility studies for the priorityresults areas; Creation (ifnot existing) or strengthening (ifexisting) o fVDC; Establishment of Participatory M&E committee. Developmentof rules and criteria for review of village plans by TAC Review actionplan (annualized) ------------ Work Communication of village planto Ward; Presentation o f village planto TAC and Local Government Authority. Training on rapidresults approach; Rapidresults leaders identified; Rapidresults initiative teams formed; Plans and monitoring arrangements developed; Feasibility studies adjusted, ifnecessarybasedon work plan, and implemented; --- Verification Establishment of PMEcommittee. Disbursements to VDC Feasibility studies verified; - Randomaudits satisfactory (at least 10%o f subprojects will undergo of subproject physicalprogress; technicaVfinancia1 audit). Progress Reporting ---- Regular updatingby PMEcommittee ofperformance indicators; Simplifiedreporting submitted quarterly to CDDP. Evaluation of actionplan Preparation of evaluation by PME committee; implementation Village meetingto validate, take corrective action on findings. (annualized) Operation and Outline Maintenance -- Identifyrecurrent costs; source of funds for recurrent costs. Development of subsequent See above Rapid Results Initiatives and other activities based on a 3-year strategic plan 35 6.4. Project Phasing, `Scaling Up' and `Scaling Out' 9. Because o f the large number o f villages involved and the intensive sub-project cycle, the project has made the strategic choice to phase in its implementation to all participating villages. Such phasing and flexibility in design will also allow for continuous improvement o f key facilitation and training processes over the course o f the project. In this way, a CDA and their cohort o f MDFTs will be assigned to a given ward, and will support all village and ward level activities within that geographic locality. Figure 6.3 shows the intended sequence to be followed. The precise number o f villages in the Year One, Two, and Three cohorts will be defined in the first annual workplan o f the project (within 60 days from effectiveness). Scaling out to new geographic communities will occur within wards on an annualized basis. `Scaling up' to the ward level will occur inYear 3 o f the project. 36 . - FIGURE PROJECTPHASING 6.3: Cohort2 (years 2-4) & Years 3-5 Cohort 1 Cohort3 (years 3-5) (scaling-up (years 1-3) New villages added to ward level) (scaling-out) 1Sensitisation Diagnosis Year 1 I Planning Approve villageplans 1-1 I Implementation , I I I 1 Attend evaluation Evaluation meeting inPhase 1 Ward planning villages I I I I 77 Sensitisation I Implementation Diagnosis I I Evaluation I Planning Subsequent reportsandvillage plans years Ward Planning u u Evaluation Evaluation Implementation t 37 Flow of Funds 10. Figure 6.4 below illustrates the flow o f funds. Local Government Authorities will be responsible for disbursing the formula-based grants for village and ward development activities. Each Local Government Authority will set up a designated sub-account to receive project funds for the purpose o f disbursing grants. Disbursements from LGA level to villages andwards will be defined in a tripartite agreement signed by the village/ward, the Local Government Authority and the CDDP. The tripartite agreement will include the village/ward development plan and the indicative costing o f sub-projects. Disbursements to WDC and VDC accounts will be based on their overall grant allocation as determined by a formula. VDCs and WDCs will then be responsible for financial management and procurement matters at their level, and will provide expenditure justifications to their respective LGA. The justification o f the use o f funds for subsequent installments will be based on physical progress certified by the relevant CDNCDO. Local Government Authorities' replenishment request to the PCT will be accompanied by a schedule detailing resources that are to be used for: (i)facilitation o f planning and technical backstopping o f identified development activities by MDFTs; and (ii) transfers to VDCs and WDCs to finance approved development activities. FIGURE PROJECTFLOW FUNDS 6.4: OF - Washington, Credlt Acwunt :Withdrawal requests ' Replenishments "lFC Req fordirectpayments Direct payments A Prouders of goods Penodic reports ! Replenishments and sefuces at - - - -:- i - ' CEO/LFC ii Replenishments Two tranchedy - LFC=Local Financial Controller FlowOf hnds Signatures ) . .................Flow WDCP=Wam' Development CommrtteePlan of info VDCP=Vfllagedevelopment CommrtteePlen 38 Annex 7: FinancialManagementandDisbursementArrangements THE GAMBIA, Community-DrivenDevelopmentProject 7.1. Executivesummaryandconclusions 1. The Country Financial Accountability Assessment (CFAA) o f The Gambia was conducted in 2003. The table inAppendix 1 shows the Financial Management Risk Assessment at the Country level. The overall risk rating o f the public financial management system was high. Since that exercise, no major progress was noted. The weaknesses noted include poor resource allocation, non-compliance, limitedexecution, inadequate monitoring and scrutiny, insufficient capacity, lack o f enforcement, non-transparency and poor parliamentary oversight. In response, the authorities have been implementing various initiatives to strengthen public financial management including reclassification o f the budget according to Government Finance Statistics, implementation o f a cash management system, and the ongoing implementation o f an integrated financial management information system (IFMIS). 2. However, no major progress was made on decentralization and local government finance. Various studies in The Gambia including the CFAA show serious weaknesses at that level, notably, budgetary controls, financial recording and use o f manual ledgers are generally very poor. Accounting records are not kept up to date, basic controls are not inoperation, there i s very little segregation o f duties between record keeping and authorization of expenditure, and credit control procedures are weak. The LACShave not prepared financial statements in recent years. There are many problems with the draft Financial & Accounting Manual. The internal audit function does not exist in most councils and the external audits performed by the National Audit Office (NAO) is done on a transactional basis and has not extended to an effective review o f operational controls o f the provision o f an opinion on council financial statements. Finally, inadequate intergovernmental fiscal transfers, cumbersome procedures, and a weak system for tax collection also seriously hamper local development. 3. The CDDP will assist in addressing some o f the deficiencies, notably institutional capacity and accountability and transparency. It will be coordinated by a PCT at the central level while Local Government Authorities will be assisted by Financial Controllers at the LGA level. 4. A financial management assessment was carried out to determine whether the project implementing agencies (the PCT at the central level and the LGAs at the local level) have acceptable financial management arrangements. The conclusion o f the assessment is that the financial management arrangements for the project need to be improved before project effectiveness to satisfy the World Bank's minimumrequirements under OPE3P10.02 andwill then be adequate to provide, with reasonable assurance, accurate and timely information on the status o f the project requiredby IDA.The financial management arrangements will be strengthened with the implementationo fthe actionplaninAppendix 1. 7.2. Staffingandimplementationarrangements 5. Overall project orientation and coordination. The overall policy guidance will be entrusted to a national steering committee. The steering committee will comprise high-level representatives from the main stakeholders concerned with CDDP: the DoSFEA, the DoSLGL, DoSA, DoSHSW, DoSWR, DOSE, NaNA, the GALGA, representatives o f the private sector, and civil society. 39 6. Project Coordination. The PCT will be responsible for day-to-day coordination of the project, and will be located in the DoSLGL. It will operate in conformity with the principles procedures and conditions laid out inthe Grant Agreement and inthe PIM. Its responsibilities will include: Coordination and provision o f technical support to communities with regard to the formulation, design, appraisal and implementation o f development plans with technical support fiom the relevant social line departments; Support the preparation, review, financing and M&E o f capacity building programs o f concerned line departments, 0 Liaise with Local Government Authorities to ensure they are informed o f the project's development initiatives plannedfor villages andWards withintheirjurisdiction, and 0 Management o fthe Designated Account 7. At the local level, the PCT will be supported for the teckical implementationbyDOSLGL's field staff, notably its cadre o f CDAs and CDOs responsible for supporting the implementationo f CDDP activities at village andward levels. 8. Financialmanagement: Management o f project resources will be under the responsibility o f the PCT. A Financial Manager with qualifications and experience satisfactory to the World Bank will be recruited at the PCT. He will be assisted by an Accountant at the central level and six Financial Controllers at the LGAs level. The Financial Manager has, as far as financial management is concerned, the responsibility to collect and control invoices, manage the project's bank accounts, keep the books o f accounts, prepare and produce quarterly Un-AuditedInterim Financial Reports (IFR) and make the necessary arrangements for the annual financial audit of project account. The recruitment o f the Financial Manager within the PCT and o f a Financial Controller inat least three LGAswill be effectiveness conditions o f the project. 7.3. Accountingandfinancialmanagementproceduresandcomputerizedmanagement informationsystem 9. Accounting policies and Procedures. Accounting procedures will follow the Companies Act6 in The Gambia. The project accounts will therefore be maintained under the private accounting rules and on an accrual basis. The Chart o f Account will be drawn up using the cost tables o f the project. A PIM will be developed and will provide all the required details on accounting and financial procedures. It will set out in particular the flow o f accounting and financial information o f the Project and the beneficiaries i.e. DoSLGL, Local Government Authorities and local Communities (VDCs and WDCs) as well as the modalities and formats of periodic reports.. The basis o f the intervention at the local level will be the World Bank Guidelines Fiduciary Management for CDD Projects. The basis for the disbursement o f hnds will be a simple financial report and milestones (for instance, assessments o f subproject progress) defined in the financing agreement between the PCT and the beneficiary community. An overview of funding flows and cash management mechanisms is provided in the paragraph on disbursements and inAppendix 3. The project will provide funds to also buildthe capacity o f local communities. The selection o f local communities will be done through a formula that takes into account population and poverty data. The formula will be detailed inthe PIM, whose endorsement by the PSC will be a condition o f effectiveness. A new Accounting Standard was recently elaborated and should soonbe tabledbeforethe National Assembly. This standard i s much closer to the Generally Accepted Accounting Principles (GAAP) as enunciated inthe International Accounting Standardspronouncedby the International FederationofAccountants (IFAC). 40 10. Reporting and Monitoring. The PCT will be responsible o f the overall reporting o f the project. The Financial Manager will make sure that quarterly Un-AuditedIFRs are produced and transmitted to the World Bank not later than one month after the end o f each quarter. The first IFR shall be provided to the World Bank not later than one month after the end o f the first calendar quarter after following the date o f effectiveness and shall cover the period from the incurrence o f the first project expenditure to the end o f the relevant quarter. The format o f the IFR was discussed and agreed upon during project negotiations. The Financial Controller at LGAs level will address to the PCT monthly reports on the use o f funds. Annually, the PCT will prepare, not later than June 30 o f the following year, audited annual financial statements. These financial statements will be subject to periodic audits (see paragraph on audits), 11. Informationsystem. A computerized information system will be established at the PCT. The computerized information system will be defined insuch a way as to provide all o f the above data, inaddition to providing data for the purposes o fmonitoring grants to local communities. The system will be integrated with the LGA level in order to avoid any delay in submission o f the withdrawal applications. The accounting system will be elaborated based on the reporting requirements as defined in the accounting manual. The installation o f this system satisfactory to IDAwill be an effectiveness condition. 12. Internal Audit. The Project i s required to have in place satisfactory internal audit arrangements to assist management in ensuring the continuing adequacy o f and conformity with the project's procedures. Although the project does not have an internal audit body, key internal controls will be undertaken. Thus several controls will be undertaken by all the highlevel staff o f the PCT: approval and authorization controls (including for procurement) will be documented in the manual, bank reconciliations will be prepared regularly and on a timely basis by staff independent of the payment function, subsidiary records o f fixed assets and stocks will be maintained and all assets will be duly insured. The PIM, therefore, will outline the specific internal controls to be carried out by each staff member o f the PCT as well as the PSC and LACS. In addition, the external auditors, during their reviews, will pay attention to the continuing adequacy o f and conformity with the project's procedures bythe PCT. 13. Externalaudits. An annual audit o f the project will be conducted by external auditors with qualifications and experiences satisfactory to the IDA. Besides expressing an opinion on the Project Financial Statements in accordance with International Standards on Auditing, the auditors will be required to verify a randomly selected sample o f about 10 percent o f sub-projects grants approved in the year under review, to verify whether the Grants for local communities have been disbursed according to the PIM and that the intended identified beneficiaries have received the funds. In addition to the audit report, the auditors will be expected to prepare management's letters giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants inthe World Bank agreement. The selection process o f the auditor will be conducted by the NAO. A selection o f an auditor with experience and qualifications satisfactory to the World Bank will be an effectiveness condition. The audit report for the fiscal year ended must be submitted no later than June 30 following the end o f that fiscal year. Audit report Due Date 1) Project financial statements June 30 2) Special opinion on the Grant to the Local Communities June 30 3) Management letter June 30 41 7.4. Risks analysis 14. At the country level. The fiduciary risk at the Country level was rated Highafter the CFAA in 2003. Since that exercise, key elements of the financial management reform that have been followed up are: (i)general and sector specific Public Expenditure Reviews have been undertaken; (ii) backlog of audited accounts i s being reduced; and (iii) Government, with the the IDA funding, is implementing an IFMIS which, once completed, would improve the transparency and timeliness o f public accounts. Despite these gains, the Public Financial Management risk remains high. 15. At the project level. Because o fthe highfiduciary risk at the country level, IDAhas taken special measures to ensure adequate financial management o f its portfolio. Project management staff are appointed on a competitive basis andWorld Bank funding is following special mechanisms to mitigate fiduciary risk. IDAprojects are invariably auditedby independent and competent auditing firms. The table inAppendix 2 identifies the key risks at the project level and provides a basis for determining how management should address these risks. 7.5 Grant Conditions and financial covenants 16. The financial management related effectiveness conditions o f the Grant are: a) the Recipient has appointed external auditors with qualifications and experience satisfactory to IDA; b) the Recipient has adopted the PlM, including administrative, accounting and financial procedures, inform and substance satisfactory to IDA; c) the Recipient has installed the Financial Management System in form and substance satisfactory to IDA; d) the Recipient has appointed the core staff o f the PCT (Project Coordinator, Procurement Specialist, Financial Manager andM&E Specialist); e) the Recipient has recruited a Financial Controller, with qualifications and experience satisfactory to IDA, for at least three LGAs. 7.6 Flow of funds 17. The flow o f funds, described inAppendix 3, comprises: 0 One DesignatedAccount at the central level at the Central Bank (managed by the PCT); 0 Six sub-accounts at the LGAs level, each managed by the Chief Executing Officer o f the L A C andthe CDDP Local Financial Controller; 0 Accounts o f Local Communities (open ina commercial bank or a financial institution acceptable to the World Bank). 18. Table 7.1 below specifies the bank accounts to be opened at the various Levels. 42 Administrative Account Type Signatories Bank Number of Level accounts National Designated 1.Project coordinator or Central Bank o f 1 Account inUS$ Permanent Secretary, DOSLGL The Gambia 2. CDDP Financial Controller (PCT) or the Accountant-General LGA Sub Account in 1. Chief Executing Officer o fthe Commercial 6 Dalasis L A C 2. CDDP Financial Controller, LGAlevel Local Accounts 1.Chairperson of LocallWard Commercial or As required Communities Development Committee an acceptable 2. Treasurer o fWDCNDC financial institution Reporting on the use o f hnds for the designated account and the sub accounts will be based on Statement o f Expenditures (SOE). 0 Reporting on the use of funds by Local Communities will be based on a simple financial report and milestones (for instance, assessments o f subproject progress) defined in the tripartite financing agreement between the Local Government Authority (represented by the Chairman o f the Council), the VDC/WDC (represented by its chairman), and the CDDP (represented by the CDO). Payments will be made in installments. The initial installment will be a minimumo f 25% o f the approved subprojects' proposals. Subsequent payments (no more than 2) will be based on physical progress, certified by the CDA/MDFT, and not on financial progress. However, VDC and WDC will be required to produce periodic financial reports inorder to demonstrate good accounting practices at the community level. 7.7 Disbursementarrangements 19. Disbursement Methods. The project will start with the disbursement methods based on Reimbursement, Designated Account Advance, Direct Payment and Special Commitment. These methods will be used at the beginning o f the project. The project i s expected to shift to the quarterly IFR-based disbursement as soon as IDA i s satisfied with the ability o f the implementing entity. 20. Minimum Value of Applications. The minimum value o f Direct Payment and Special Commitment will be US$80,000. 21. Reportingon Use of Loan Proceeds Initially, the supporting documentation for replenishment applications should be a summary sheet and an SOE andrecords evidencing eligible expenditures against contracts valued at: (i) US$250,000 for works; (ii) US$150,000 for goods; (iii) US$lOO,OOO for consulting firms; (iv) US$50,000 for individual consultants; (v) workshops and training; and (vi) Sub-project grants and operating costs, all under such terms and conditions as IDAshall specify bynotice to the Recipient, The supporting documentation for requests for direct payment should be records evidencing eligible expenditures (copies of receipts, suppliers' invoices). The project will submit on a monthly basis a bank statement and a reconciliation o f the designated account together with the replenishment application. 43 Credit YOof expenditures Categories Allocated to be financed (in US$ 44 7.8 Financialcovenants 26. The standard financial covenants will be included inthe Financing Agreement. 7.9 Supervisionplan 27. Ona regular basis (at least once per year), the system will be reviewed and assessed. The IFRwillbe reviewedas well as the annual audit reports. 45 Annex 7, Appendix 1:Action Planfor FinancialManagement Action Tasks Entity Target CompletionDate 'taffing 0Recruitmentof the Financial August 31,2006 Manager at the PCT satisfactory to IDA Prior to effectiveness Recruitmentof three Financial Controllers at the LGA level satisfactory to IDA Prior to disbursement Recruitment of three remaining for the remainingLGAs FinancialControllers at the LGA level satisfactory to IDA 'rocedures 0 Selection of a consultant satisfactory July 31,2006 to IDA Elaboration o f the administrative and August 31,2006 accounting manual 0 Draftmanual Finalmanual including IDA'S September 15,2006 comments September 30,2006 iccounting system 0 Setting up an integrated accounting September30,2006 systemsatisfactory to IDA {xternalAudit 0 Recruitment o f an auditor (A0 September 30,2006 satisfactory to IDA 46 Annex 7, Appendix2: Assessment of FiduciaryRisks S L Comments [nherentRisk The fiduciary risk at the Country level was rated High after the CFAA in 2003. Since that exercise, key elements 4. Weak management capacity X o fthe financial management reform Overall Inherent Risk X that have been followed up are: (i) general and sector specific PERs have beenundertaken; (ii) the backlog o f audited accounts is being reduced; and (iii) Government,withIDA the funding, is implementing an IFMIS which, once completed, would improve the transparency andtimeliness o f public accounts. However, the PFM riskremainshigh. To mitigate the high fiduciary risk, the Financial Management Action Plan in Appendix 1will be implementedprior to project effectiveness. To mitigate the risks, the Legal and Institutional Framework as defined in Annex 6 will be set upprior to project effectiveness. The PSC will include the respective representatives o fthe Government as well as NGO and the GALGA.A PCT will also be set up to coordinate the implementationo fthe program. Subprojects will involve communities' organizations and wards. 2. I FundsFlow X Flow o f funds arrangements are complex and involve many levels including village levels. The PCT and beneficiaries will be trained on the arrangements and reporting I requirements. A manual will outline all the details. 3. Counterpart funds X Counterpart contributions will be mobilized through Value Added Tax andbyparallel financing o f some activities. N o major risk is anticipated. 4. Staffing X The difficulty inattractinghigh qualified accounting staff is a major riskfor this project. To mitigate this risk, the project fiduciary staff (Financial Manager, Financial Controllers, andProcurement Specialist) will be recruited on a competitive basis and will be eligible for short-term consulting fees. The recruitment o fthe key staff i s an effectiveness condition o fthe project. 47 lisk As ssmeni H S M L Comments 5. Accounting Policies and Procedures x The adoption o fthe manualby the PSC is part of effectiveness conditions. 6. Internal Audit IIInternal audit function does not exist. However, key internal control mechanisms (approval and authorization controls, bank reconciliationstatements, etc.) will be included inthe manual. Moreover, the Bank will pay attention to the internal control system during supervision missions and the review o f the letter o f comments o f the external auditor. 7. ExternalAudit x Prior to project effectiveness, an external auditor under TORSacceptable to IDA will be recruited. The recruitment process o f the auditor as well as the assessment o f their performance will be done by the NAO. The audit will be conducted in accordance with the International Standards on Auditing. 8. Reporting and Monitoring X The format and contents o f the IFRs have been agreed upon during the negotiations. Giventhe fiduciary risks, the project will, however, use the transactions based disbursement mechanism inthe beginning. The reporting format and contents o f the subprojects will be included inthe manual 9. Information Systems X The accounting software will be developed prior to project effectiveness. Overall ControlRisk x Although the fiduciary risk is Substantial, the actions above will be implemented prior to project effectiveness andtheir compliance will be monitored regularly during the imdementation of the Droiect. H: High,S: Substantial,M:Moderate, L:, 48 Annex 7, Appendix3: Flow of Funds 49 Annex 8: ProcurementArrangements THE GAMBIA, Community-DrivenDevelopmentProject 8.1. General 8.1.1. Procurementcontextinthe country 1. A CPAR, carried out inThe Gambia inOctober 1998, flagged the main issues such as the lack o f capacity regarding the Recipient's staff, the absence o f standard biddingdocuments at the national level, the insufficient capacity o f local contractors for contracts subject to ICB, and corruption. Recommendations were made to address these issues. The Bank, through the CBEMP, provided support to strengthen the Recipient's capacity in procurement, modernize the procurement process and improve regulation (approval o f Gambia Public Procurement Act). Thanks to this plan, some o f the issues have been addressed, including: training staff responsible for procurement, designing standardbidding documents, including provisions inthe Code against corruption. Nonetheless, the situation remains risky. 2. A Country Procurement Issues Paper has beencarried out in2005 as anupdate o fthe CPAR. The Government has not yet provided its comments on the report and, therefore, the proposed action plan and recommendations (capacity building, institutional reinforcement through a regulatory body, an appeal body, strengthening o f the private sector, judiciary reinforcement, etc.) have not yet been discussed and agreed upon. 8.2.2. Procurementmethodsfor the project 3. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under JBRD Loans and IDA Credits" dated May 2004, "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated in the Financing Agreement. The various items under different expenditure categories are described in general terms hereafter. For each contract to be financed by the project, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements ininstitutional capacity. 4. Procurement of Works. Works procured under this project would be limited to rehabilitation o f office buildingat LGA and central levels. There will not be any major civil works contract under the project. All works estimated to cost at least US$250,000 equivalent per contract will be procured under ICB procedures. The procurement will be done using the Bank's SBD for all ICB, and National SBD agreed with or satisfactory to the Bank for contracts procured under N C B or shopping. Contracts for works estimated to cost less than US$250,000 equivalent would be procured under NCB procedures. Contracts for small works estimated to cost less than US$50,000 will be based on shopping with a written proposal addressed to a minimum o f three contractors regularly established and in order with the administration o f the Recipient interms o f their fiscal and social status. The contract may only be awarded to the bidder who has offered the lowest price, after comparing at least three bids and provided he has the capacity to successfully perform the works. 50 5. Procurement of Goods. Goods procured under this project would-include, but not be limited to: vehicles; motorcycles; office equipment; office furniture; IT, communication and multimedia equipment; medical equipment anddrugs; farm equipment and inputs, etc. 6. When possible, goods will be grouped inbidpackages estimated to cost at least US$150,000 equivalent per contract and will be procured under ICB procedures. The procurement will be done using the Bank's SBD for all ICB, and National SBD agreed with or satisfactory to the Bank for other procurement methods. Contracts estimated to cost less than US$l50,000 equivalent for goods available locally would be procured under N C B procedures. Small articles and office supplies as well as small equipment and furniture available locally and whose estimated cost is less than US$50,000 may be awarded through Shopping. In those cases, the written request proposal shall be addressed to several suppliers regularly established and in order with the administration o f the Recipient in terms o f their fiscal and social status. The contract will be awarded, after comparing a minimumo fthree quotations, to the bidder who has offered the lowest price and has demonstrated capacity to successfully perform the contract. Procurement under Direct Contracting may be allowed in accordance with provisions 3.6 and 3.7 o f the Procurement Guidelines. Finally procurement o f goods from agencies o f the United Nation or through such agencies (like inthe case o f IAPSO) will also be allowed, according to articles 3.9 and 3.10 o f the Procurement Guidelines. 7. Community Participation. Under component A (Community Development Facility), the project will finance community subprojects for a total value o f US$11.0 million o f which IDA will finance US$8.5 million. Fundingfor the subprojects will be inthe form o fgrants to the VDCs and WDC. Communities will be required to contribute a minimumo f 10percent o f the subproject budget in labor, kind, cash, or a combination thereof. The subprojects will comprise small social and economic infrastructures, communication activities and materials, minor repairs or works, capacity buildingetc. These subprojects are estimated to cost US$50,000 or less per contract. 8. Financing o f subprojects will depend on proposal formulated by VDCs and WDCs. Due to their demand-driven nature, it is not possible to determine the exact mix o f goods, small works, and services to be procured under the subprojects. Procurement for the implementation o f subprojects would be carried out in accordance with simplifiedprocurement procedures referred to in the PIM. The PIM will contain a special section describing the procedures and tools in accordance with the Bank's Guidelines for Simplified Procurement and Disbursement for Community-Based Investments (February 1998). The PCT will be responsible for ensuring compliance with these guidelines. Ex-post reviews o f random subprojects will be conducted periodically by independent technical audits. 9. Procurement of non-consulting services. Non-consulting services can include security services, banking services, insurance, transportation, catering, cleaning services, etc. Regarding the size o f these types o f contracts, the procurement process will be conducted under procedures acceptable to the Bank. 10. Selection of Consultants. Consulting services would include technical assistance, training, auditing, M&E, work supervision, information and communication, etc. Consultants will be selected through the following methods: (i) Quality and Cost Based Selection for firms (QCBS); (ii) CostSelection(LCS) maybeusedfor financialaudits; (iii) Least Selection under a Fixed Budget (FBS) for recruitment o f facilitators to assist or advise rural communities and community- based organizations; (iv) selection based on the Consultant's Qualification (CQS) for the selection o f firms or Individual Consultants for specialized local training contracts whose amount are less thanUS$lOO,OOO equivalent; (v) SingleSource Selection (SSS) willbeused, withprior agreement 51 o f IDA, for services in accordance with paragraphs 3.10 to 3.12 o f the Guidelines for selecting consulting services; and (vi) Individual Consultant (IC) who will be selected in accordance with paragraphs 5.1 to 5.4 o fthe Bank Guidelines. 11. Short lists o f consultants for services estimated to cost less than $ 75,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 12. The Standard Request for Proposal (RFP) and the sample form o f Evaluation Report for consultants, as developed by the Bank, will be used for appointment o f consultants. Simplified contracts will be used for short-term assignments (not exceeding six months), carried out by firms or individual consultants. 13. Operating Costs. Operating costs financed by the Project are incremental expenses, including office supplies, vehicle operation and maintenance, maintenance o f equipment, communication costs, rental expenses, utilities expenses, consumable, transport and accommodation, per diem, supervision costs, salaries and allowances o f locally contracted staff. They will be procured using the implementing unit's administrative procedures, which will be detailed inthe PIM. 14. Others. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procured, will be detailed inthe PIM. 8.2 Assessment of the agency's capacityto implementprocurement 15. Procurement activities will be carried out by the PCT located at the DOSLGL. The agency is staffed by a Project Coordinator, a Capacity Building Manager, a CDF Manager, an M&E Specialist, a Financial Manager, and a Procurement Specialist. The Procurement Specialist will assure the procurement functions. Giving the difficulty o f finding qualified fiduciary staff in The Gambia, the CDDP Procurement Specialist, recruited on a competitive basis, will be eligible for short-term consulting fees. The recruitment o f the Procurement Specialist, and other key staff in the project, is a condition o fproject effectiveness. 16. An assessment o f the capacity o f the Implementing Agency to implement procurement actions for the project has been carried out by the Senior Procurement Specialist o f the World Bank Senegal Country Office. The assessment reviewed the organizational structure for implementing the project and the interaction between the project's staff responsible for procurement and the government central unit for administration and finance. 17. The key issues and risks concerning procurement for implementation o f the project have been identified and include lack o f experience in World Bank procurement procedures and insufficient capacity at the local level. The corrective measures which have been agreed upon are: (i)recruitment o f a qualified procurement specialist knowledgeable o f World Bank guidelines; (ii) training on procurement aspects for staff o f the project, members o f MDFT, staff o f Local Government Authorities, and community members; and (iii)preparation o f a Project Implementation Manual which defines the procurement methods and procedures for community- based contracting; standardbiddingdocuments for NCB, small works and consulting assignments and (iv) Frequent supervision and control from the main procurement specialist to advice local communities responsible on all procurement matters, (v) the fact that PIM is an effectiveness condition; (vi) the fact that the supervision and prior review thresholds are consistent with the highrisk levelidentified. 18. The overall project risk for procurement i s h&&. 52 8.3 ProcurementPlan 19. The Recipient, at appraisal, developed a procurement plan for project implementationwhich provides the basis for the procurement methods. This planhas been agreed between the Recipient andthe Project Team and finalized on May 24, 2006 and is available at DOSLGL. Itwill also be available inthe project's database and inthe Bank's external website. The Procurement Plan will be updated, inagreement with the World Bank, annually or as required to reflect the actual project implementationneeds andimprovements ininstitutional capacity. 8.4 Frequency of ProcurementSupervision 20. Inaddition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the Implementing Agency has recommended at least two supervision missions to visit the field to carry out post review o fprocurement actions. 8.5 Detailsof the ProcurementArrangementsInvolvingInternationalCompetition Goods,Works, andNonConsultingServices (a) List o f contract packages to be procured following I C B anddirect contracting: 1 2 3 4 5 6 7 8 19 I Ref.No. Contract Estimated Procurement P-Q Domestic Review Expected Comments (Description) Cost (US$) Method Preference by Bank Bid- (yes/no) (Prior / Post) Opening Date Purchase of " 1 2 5 ~ ~four- " PP1'G8 stroke Nov motorcycles 170,620 ICB No No Prior 24,2006 and accessories (b) ICB contracts for goods, works and Non Consulting Services estimated to cost respectively US$150,000, US$250,000 and US$50,000 and above per contract and all direct contracting will be subject to prior review by the Bank. 53 Consulting Services (a) List o f consulting assignments with short-list o f international firms. 1 1 1 2 13 14 15 16 7 Ref. No. Descriptionof Estimated Selection Review Expected Comments Assignment cost US$ Method byBank Proposals (PriorI Submission Post) Date Capacity PPl/CSl strengtheningfor 394,550 VDCs and WDCs I I Capacity I PPllCS2 strengtheningat LGA 595,200 level Capacity PPllCS3 strengtheningat Central Government 559,338 level Implementation of PPllCS4 communication 73,750 QCBS Prior Dec 02,2006 strategy International PPllCS7 Technical Assistance 166,500 I QcBs impact evaluation& Prior 15,2006 baselinesurvey (b) Consulting services for firms and individual consultants estimated to cost respectively the equivalent o f US$lOO,OOO and US$50,000 and above per contract and all single source selection o f consultants with firms and individuals will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: Short lists o f consultants for services estimated to cost less than US$75,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 54 Annex 9: Economic and FinancialAnalysis THE GAMBIA, Community-Driven Development Project 9.1 Economic Analysis 1. Given the demand-driven nature o f the project, support to villages and wards under the CDF will be within the framework o f an "open menu" o f social and economic infrastructures and activities, capacity building activities, and income generating activities that are o f a public good nature. Therefore, it is difficult to quantify the benefits and costs o f the project ex ante, as it i s impossible to predict: (a) which investment activities will be pursued by the communities; and (b) which ones will actually receive funding. Consequently, there are inherent uncertainties in attempting to perform a traditional economic analysis, as: (i) benefits and costs o f each the individual subproject vary due to the localized planning, design, construction, implementation, operation and maintenance (O&M) and utilization; (ii) the actual distribution o f the types o f subprojects to be selected by the local communities across the entire Project i s not known; and (iii) socialandcapacitybuildingactivitieshaveonly indirect economicbenefitsthat are most difficult or impossible to quantify in monetary terms. It is for these reasons that economic analyses are usually not carried out for Bank funded CDD-type operations. 2. Nevertheless, an attempt has been made to capture as much as possible the potential economic benefits that are likely to result from the project and to calculate the ERR for the project for various scenarios. The analysis takes into account: (i) a likelymix o f subprojects that would be prioritized by communities, based on existing ward andvillage development plans and experience from other projects in The Gambia; and (ii) economic analyses carried out in the course o f preparing projects that support similar community investments, while making conservative assumptions regarding the economic returns o f individual subprojects hnded by the CDF. In the absence o f meaningful data available for The Gambia, a number o f analyses from other countries have been used as reference. The subprojects included inthe analysis as well as the assumptions concerningindividual subprojects' ERR and share o f CDF are presented inTable 1below. TABLE 9.1:OVERVIEW OF SUBPROJECTSAND ASSUMPTIONSMADEFORECONOMICANALYSIS IQuantifiedI I ` Economi Infra- structure Social Infra- School Rehabilitation Yes 16% I 4 I 16% 10% structure Other (e.g. Sanitation, Community Centres) No Other Community-driven Public Health Activities No 20% Activities Environmental Protection and Conservation No Canacitv Buildingof Communities No 5% 55 3. Profiles o f generic subprojects were modelled for estimating expected cost and benefits per subproject. The following assumptions were made: (i) Each subproject generates a net stream o f incremental benefits over 15 years, which results inthe ERR specified inTable 1, regardless o f the size o fthe subproject (Le., if the investment cost per subproject changes, the recurrent costs andbenefits will change proportionally); (ii) 0 &Mcosts arecalculated as ashareofinvestmentcosts andareconstant throughout the subproject life cycle; (iii) No replacement costs havebeen added (included inO&M) andthe investmenthas a residuallsalvage value o f zero inYear 15; (iv) Fullbenefits from each subproject materialize inYear 3 after the investment; (v) Benefits cease immediately after the subproject life o f 15 years; (vi) Subproject models o f one type are assumed to be representative for all subprojects o f the same type; (vii) Annual subproject investments are calculated as a share o f total annual CDF disbursement (village andward grants) as presented inthe detailed cost table for Component A. 9.2 Results of Economic Analysis and Sensitivity Analysis 4. Taking into account only the quantifiable benefits under Component A, the ERR for the whole project i s estimated at about 6.4percent. The ERR increases to 15.3 percent (net present value: US$1.39 million), if the costs o f only Component A are included in the analysis. Table 2 below provides an overview, on the basis o f the project components considered, o f how the ERR i s affected by changes o f benefits and costs and a delay o fbenefits. Table 2: SensitivityAnalysis ERRunder Various Scenarios - ComponentCosts Base Changeof Increasein Delay taken into account' Case Benefits -10% -20% + l o % +20% + l o %Costs2 of Benefits' +20% 1year 2years 1 15.3% 12.7% 9.7% 17.6% 19.6% 12.3% 9.7% 14.3% 13.4% 192 7.6% 6.0% 3.9% 9.0% 10.2% 5.4% 3.3% 7.0% 6.5% 1,293 6.4% 4.8% 2.9% 7.7% 8.8% 4.2% 2.2% 5.9% 5.5% i s not possible to quantify the potential impact of the project on the Government's revenue earnings. However, inthe long term, the fiscal impact of the project i s expected to be positive, as the Government is able to tax economically productive activities. 9.4 Concluding Remarks 7. The economic analysis o f the project on the basis of the assumptions described above provides sufficient justification for the project. Given the fact that capacity buildingprojects are generally not subject to economic analysis, as they only yield longer-term, intangible benefits, the project can bejustified on the grounds of the ERR for Component A (15.3 percent), particularly as many social benefits that directly contribute to improved livelihoods o f the rural poor have not been captured by the analysis. Indirect benefits or those that could not be readily quantified, including those from community empowerment and strengthening of local institutions and communities, were not included inthe analysis. Inaddition, the analysis i s based on conservative estimates o f ERR for individual subprojects. Therefore, the results are believed to be on the low side o f the actual economic returns which will be realizedwhen the project i s implemented. 57 Annex 10: SafeguardPolicyIssues THE GAMBIA, Community-DrivenDevelopmentProject 1. The project has triggered (i)OP 4.01 Environmental Assessment due to potential construction and rehabilitation activities as well as potential impacts related to potential medical waste; (ii) OP 4.09 Pest Management due to the potential increase in the use o f pesticides to improve agricultural production; and (iii) OP 4.12 Involuntary Resettlement due to the potential need for land acquisition for future sub-projects. The safeguard screening category i s S2, and the environmental screening category is B. OP 4.01 EnvironmentalAssessment 2. Under Component A, the CDDP will finance community-driven activities which will be identified on the basis o f a participatory strategic planningprocess. Activities are likely to include sub-projects such as the construction and rehabilitation o f feeder roads, health care facilities, and vaccination parks,, and activities related to improvements in agricultural production and a concomitant increase inthe use o fpesticides. 3. To identify and mitigate potential negative environmental and social impacts o f future sub- projects, the Recipient has prepared an ESMF and a RPF. Both documents have been approved anddisclosed inThe Gambia andat the Bank's InfoShop onFebruary 17,2006. 4. These documents were prepared because the precise locations and potential localized negative environmental and social impacts o f sub-projects were not known at the time of appraisal. However, based on experience with similar sub-projects, potential negative environmental and social impacts are likely to include soil erosion, water and soil pollution, loss of vegetation, increase insolid and liquidwaste, including medical waste, pesticide poisoning, and highlevels o fpesticideresidues inthe food chain. 5. The ESMF outlines an environmental and social screening process for sub-projects to be implemented by qualified personnel at the sub-project planning stage as follows: (i) screening o f sub-projects and sites using the Environmental and Social Screening Form (see Annex 1 o f the ESMF); (ii) assigning the appropriate environmental categories based on the screening results; (iii)carrying out the appropriate environmental work (either the application o f simple mitigation measures or the preparation o f a separate EL4 report) (see Annexes 2, 3, 6 o f the ESMF); (iv) review and approval o f the relevant environmental documents; (v) public consultations and disclosure; and (vi) environmental monitoring. 6. The ESMF includes (i)Guidelines for an EMP; (ii)Environmental Guidelines for Contractors (Annex 4 o f the ESMF); (iii) a Summary o f the Bank's safeguard policies (Annex 5 o f the ESMF); (iv) a PMP (Annex 11 o f the ESMF); and (v) a NMWMP (Annex 12 o f the ESMF). 7. To ensure that the sub-projects are implemented in an environmentally and socially sustainable manner, the ESMF recommends that an Environmental Focal Point (EFP) be appointed within the MDFT in each division to serve as the environmental and social expert during the implementation o f sub-projects, and to be responsible at the level o f the CDD for the coordination and supervision (overseeing) o f the implementation o f the ESMF. To carry out these tasks, the EFP should visit all the sites where project activities will be implemented, only once at the beginning o f the works, in order to complete the screening forms. This expert will take advantage o f the support and permanent assistance o f the environmental experts at the National Environment Agency (NEA). In coordination with the Project Coordination Unit, the day-to-day 58 monitoring activities will be carried out by technical agents o f the MDFT, the municipalities, and VDC to follow-up on environmental and social indicators and the implementation o f corrective measures, ifnecessary. 8. Capacity for environmental management and monitoring will be required at the national, divisional, district and village levels as follows: (a) The EFP and the other members o f the MDFT in each Division will need to strengthen their capacity to apply and implement the screening process as outlined in the ESMF; (b) Selected members o f the technical services o f the municipalities, wards and members o f the V D C will need to strengthen their environmental monitoring capacity; and (c) As necessary, members o f the MDFT will require environmental training to enable them to assist the EFP o f the Project Coordination Unit o f the CDD. The ESMF provides details regarding the recommended training topics and related cost estimates as well as monitoring indicators. 9. Medical Waste Management: As regards safe medical waste management relevant to sub- project implementers will refer to the NMWM (Annex 12 o f the ESMF), for guidance according to the type o f health care facility to be constructed or rehabilitated, operated andmaintained under the CDD. The plan includes an action plan and cost estimates for the proposed activities, including health care training program reviews andworkshops for health care workers. 10. Thus, to ensure that all health care facilities nationwide use a proper health care waste management system, the plan proposed that they focus on: (i) proper methods for medical waste segregation, collection, storage, treatment, transportation, and disposal; (ii) provision o f adequate personal protective equipment and waste handling, storage and transportation equipment; (iii) continual training and education on risks and hazards, proper procedures and methods; and (iv) enforcing and monitoring compliance with health and safety procedures and precautions through the establishment o f Infection ControlNaste Management Committees, including the designation o f a Waste Management Officer in each health care facility. Target groups for such training include, among others, municipal staff, domestic staff (orderlies, cleaners), medical staff and administration, private hospitals, clinics andpractitioners. OP4.09 PestManagement 11. As part o f the ESMF, the Recipient has prepared a PMP. This plan discusses, among other things, the current problems encountered with pest management inthe agriculture sector. In 1995, the Agricultural Pest Management Unit (APMU) carried out an inventory o f pests and diseases o f crops in the country to identify the key pests for each crop and their management, developed a fieldmanual for extension agents to be used as reference material by farmers insolving their pest problems. Tables 8 and 9 in the EMSF list the major insect and pests (such as red spider mites, seed bugs, rodents, h i t worms, blister beetles) and diseases (such as nematodes, hit-rot, downey mildew, rosettes, smut) o f individual crops (cereals, legumes, roots and tubers, and vegetables) inThe Gambia which have reduced yields significantly over the years. OP 4.12 InvoluntaryResettlement 12. Given that the exact locations and potential negative social impacts related to land acquisition for sub-projects could not be determined beforehand, the Recipient has prepared a RPF. The RPF outlines the policies and procedures to be followed inthe event that sub-projects require land acquisition. The overall responsibility for the implementation o f the RPFwill be with the: (i) at the divisional level; (ii) WDC; and (iii) VDC (at the village level). These Council the the institutions will ensure that the framework i s publicly disseminated and that project staff have the 59 requisite skills and knowledge, or, when necessary, receive appropriate training to implement the framework. 60 Annex 11:ProjectPreparationand Supervision THE GAMBIA, Community-DrivenDevelopmentProject Planned Actual PCNreview 01/17/2005 01/18/2005 InitialPID to PIC 01/24/2005 01/25/2005 InitialISDS to PIC 01/24/2005 01/25/2005 Appraisal 04/10/2006 04/10/2006 Negotiations 05/15/2006 05/22/2006 Boardapproval 08/31/2006 Planned date of effectiveness 12/01/2006 Planned date of mid-termreview 03/30/2009 Plannedclosing date 04/30/2012 Key institutionsresponsiblefor preparationofthe project: Secretaryo f State for Finance andEconomic Affairs Secretaryo f State for Local Government andLands Bankstaff andconsultantswho workedon the projectincluded: Name Title Unit RenatoNardello Sr. Operations Off. (co-TTL) AFTS4 Astrid Helgeland-Lawson Sr. Operations Off. (co-TTL) AFTH2 MuthoniKaniaru Counsel LEGAF DanielMurphy Social Development Spec. AFTS4 Fily Sissoko Sr. Fin.Management Spec. AFTFM Osval RochaAndrade Romao Fin.ManagementSpec. AFTFM BouramaDiaite Sr. Procurement Spec. AFTPC Christiane Frischmuth Results Specialist HRSCE Edeltraut Gilgan-Hunt Environmental Specialist AFTS1 Yvette Djacheci Sr. Social Development Spec. AFTS3 ElisabethMekonnen LanguageProgramAssistant AFTS4 Sossena Tassew LanguageProgramAssistant AFTS4 Yassin Saine Njie Team Assistant AFMGM Marie-JeanneNdiaye LanguageProgram Assistant AFTS4 John May Sr. Population Spec. AFTH2 Thomas Muenzel Consultant (FAO) Thomas Jorgenssen Consultant Y Bankfunds expended on projectpreparation: 1. Bank resources:US$398,847 2. Trust hds:US$101,522 3. Total:US$500,369 EstimatedSupervisioncosts: 1. Remaining coststo approval: US$3,000 2. Estimatedannual supervision cost: US$120,000 61 Annex 12: Documentsinthe ProjectFile THE GAMBIA, Community-DrivenDevelopmentProject N Year Author Title 1. DOSLGL Consultancy Report: A Survey OfCapacities And Capabilities O f Civil Society InThe Gambia To MakeRecommendationsFor The Development OfA Communication Strategy InThe Implementation OfThe Decentralization ProgrammeUnderThe Local Government ReformProcess 2. DOSLGL Draft OfPolicyMeasuresTo ImplementThe Local Government Act - A Divisional PlanningMechanism AndDecentralization 3. DOSLGL The Gambia's Community-Driven Development Project (CDD) - Regional Sensitization And Training Workshop Report For Mansakonko Local Government Area; From 11To 15 April 2005 4. DOSLGL ProcessFacilitationReport -Decentralization O fEducational Services 5. DOSLGL FinalDraft Policy For The Establishment And Operationalization Of The Council Development Fund(CDF) 6. 2006 2003 Population And Housing Census Provisional Results 7. 2005 EC EndOfProject ProgramEvaluation For The Support To Decentralized RuralDevelopment (SDRD) flth EuropeanDevelopment Fund 8. EC SDRD-Local Government Reform-ProcessFacilitationOf Decentralization Within The Agriculture And NaturalResources Sector 9. DOSLGL Study On The FutureO fDivisionalPlanningInThe Gambia 10. DOSLGL Local Government Decentralization FinalReport OfHealthSector Facilitation (Local Government Act 2000) 11. Children InThe Gambia "Precious Assets" -A Parenting ManualAnd GuideFor TrainingFacilitators On Integrated EarlyChildhood Development 12. 2005 IFAD RuralFinanceAnd Community Initiatives Project (RFCIP) - Appraisal Report 13. DOSTIA Restructuring O fThe Indigenous Business Advisory Services (BAS) OfThe DepartmentOf StateFor Trade, IndustryAnd Employment 14. 2002 UNICEF Gambia-UNICEF Programme o f Co-Operation, 2002-2006 -Report OnNeeds Assessment For The Implementation Of The Basic Services Programme 15. SPACO Poverty Reduction Strategy (Prs) Planning Cycle 62 16. Report O fThe 2003/2004 NationalAgricultural Sample Survey (NASS)-StatisticalYearbook OfGambianAgriculture 17. NationalYouth Service Scheme (Nyss) -An Impact Assessment And Tracer StudyReport 18. SPACO The Gambia Social Development FundOperations Manual 19. 2003 DOSLGL Decentralization Local Government Reform 20. 2002 WE3 FiduciaryManagement for CDD Project: A ReferenceGuide 21. 2002 de Silva, Communities Takingthe Lead. A Handbook on Direct Financing of Samantha Community Subprojects. World Bank. 63 Annex 13: Statementof LoansandCredits THE GAMBIA, Community-DrivenDevelopmentProject OperationsPortfolio (as at 8/2/06) Difference between expectedand Original Amount inUS$ actual Millions disbursements Project FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. ID Rev'd PO57394 2002 GM GATEWAY 0.00 16.00 0.00 0.00 0.00 7.80 5.01 0.00 PROJECT PO57995 2002 GM-Econ MgmtCap 0.00 15.00 0.00 0.00 0.00 5.41 2.90 2.00 Bldg SIL (FY02) PO60329 2001 HIV/AIDS Rapid 0.00 15.00 0.00 0.00 0.00 0.65 -1.49 -2.18 Response PO77903 2006 31dEducation, Phase2 0.00 20.00 0.00 0.00 0.00 8.23 0.01 0.00 PO57997 1999 PVRTY 0.00 19.00 0.00 0.00 0.00 2.52 -1.29 1.11 ALL.&MUNIC.DEV Total: 0.00 0.00 0.00 0.00 5.14 0.933 85.00 24.611 THE GAMBIA STATEMENT OF IFC's HeldandDisbursedPortfolio InMillionsofUS Dollars (as at 04/30/06) Held Disbursed IFC IFC FY Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Approval 1997 AEF KKFI1 0.19 0.00 0.00 0.00 0.19 0.00 0.00 0.00 1994 AEF Lyefish 0.36 0.00 0.00 0.00 0.36 0.00 0.00 0.00 1993 AEF Ndebaan 0.20 0.00 0.00 0.00 0.20 0.00 0.00 0.00 Total portfolio: 0.00 0.00 0.00 0.75 0.00 0.00 0.00 0.755 64 Annex 14: Countryat a Glance THE GAMBIA, Community-DrivenDevelopmentProject Gambia, The at a glance 4f5f06 Sub- I POVERTY and SOCIAL The Saharan Low- Gambia Africa income DQuelopmentdiamond' i2004 1 GNIpercapita Population.mid-year 1.4 719 2,338 @ r / a + m p l M LW.l 280 600 510 ~ GNI (Af/acm&+& L&Xki&v~:i 0.40 432 1.184 i Average annual growth. 1998-04 j Population &? 2.8 2.2 1.8 Labor force 2.9 1.0 2.1 GNI Gross !Mostrecent estimate [latest gear auailable, 1998-04) Per primary capita nrdlment I Povert ~ y p ' d m a i + ~ n a ~ d ~ < v . & + 58 Urbanpopulation fis'ce'?mdpqmda&/ 26 37 31 LifeQHpQCtanCyI t birth [W& ~ 53 46 58 .I. ' Infantmortality fi?d&M~#Wft 90 ~ ($lM&k&?&t 101 79 Childmalnutrition 17 44 Access to improvedwater source 1! ACCQSSto an improvedwater source p'c8&&&y! 82 58 75 I Literacyprimaryenrollmmt fi~ce',nqmdai+ap&? 65 61 Gross f i : ' d - c M q e & a & t 85 95 94 , Male 86 102 101 I Female 84 88 88 !KEYECONOMIC RATIOS and LONG-TERM TRENDS 1984 1994 2003 2004 j GDP /LtWiWh+ 0.18 0.36 0.37 0.40 1 Gross capitalformationfGDP 1i EHportsof goods and SQrviceslGDP 18.3 18.1 20.3 28.1 51.1 43.7 43.1 46.0 i Gross nationalsavingsfGDP dOmestlC srvingsfGDP 4.6 2.8 10.2 10.5 Gross 17.7 13.7 I Current account balancelGDP -19.3 -5.0 .4.9 -11.8 lntQlQSt prymentslGDP 3.9 2.1 2.5 2.2 :TotaldebtfGDP 129.9 116.5 V2.8 168.2 1 Total debt SQlViCQfQxpOrlS ' Presentvalue 16.1 15.3 11.9 15.9 of dQbtfGDP 91.1 i Presentvalue of dQbtfQxpOrtS 19+.6 1984-94 1991-04 2003 2004 2004-08 ~ (MWm d - w m w GDP ~ 3.4 4.0 6.9 5.1 4.8 j GDP per capita -0.7 0.9 4.) 3.0 2.9 ExportsOf goods and SQlViOQS 1.7 2.7 9.3 5.4 2.7 jISTRUCTURE of the ECONOMY 1984 1994 2003 2001 i(7s dLKep) Growthof capital and GDP [%I I : AgrlCUltUrQ 31.2 27.5 31.1 33.1 ' Industry 18.5 13.6 14.0 13.3 Manufacturing 9.7 6.1 5.3 5.3 SQrVlCQS 50.3 58.9 54.5 53.6 HOUSQhOldfinalCOnSUmptiOnQHpQndltUrQ 40.8 82.7 78.8 78.5 GeneralgOV't final COnSUmptlOnQxpQndltUrQ 54.5 14.5 11.0 11.1 ImportsOf goods and SQrVICQS 64.8 59.0 52.3 63.7 ~~ ~ ~ 1984-94 1994-04 2003 2004 Growth of esportr and imports [%I 1 Industry I Agriculture . d - w m w {MWm -1.2 5.0 19.7 14.2 30 T 1 5.6 4.4 6.4 5.9 20 1 , Services Manufacturing 3.6 2.3 4.7 4.7 I0 3.5 5.6 2.5 38.8 0 1 Householdfinal consumption expenditure 6.6 3.0 -io 10.4 10.5 -20 gross capitalformation I Generalgov't finalconsumption expenditure -5.1 5.8 1.3 1.2 -30 i Imports 5.4 2.6 0.0 6.9 ofgoods andservices 3.7 1.3 10.7 7.2 -Exports -Import$ I 'NotQ: ~ 2004 data are preliminaryestimates. 'Thediamondsshowfourkeyindicatorsinthecountry[inbold)comparedwithitsincome-groupaverage.Ifdataaremissing,thediamondwill be incomplete. 65 Gambia, ?%e IPRICES and GOVERNMENT FINANCE I1 Lpk.$a& 1984 1994 2003 2004 k m s r k p k e s Inflation [%] I 1I Consumerprices ~ 22.1 4.0 17.0 14.2 ImplicitGDP deflator 9.0 3.8 27.4 14.3 ~ Gmemmesr&aarce ~ &dm cW/twpMq .45&wkc Current revenue 21.7 21.9 18.2 25.5 $4 QQ 01 Q2 03 Current budgetbalance -0.8 3.6 1.1 8.5 Overallsurplustdeficit -15.5 -3.1 -4.7 -5.7 -GDP dcflator -CPI i TRADE I 1984 1994 2003 2004 I p/ssCm?! Exportand import Ieuels [US$ mill.] I 25Q1 ~ Totalexports [fob] 57 124 102 118 , 10 6 6 ~ Groundnuts Fish 2 3 3 2QQ Manufactures i50 j Total imports[cif] 81 179 161 197 iQ0 i, Food 46 53 65 Fuelandenergy 30 21 25 5Q Capitalgoods 39 33 41 Q 1 Exportpriceindex /,r##);mt 1 Importpriceindex &W=mt 113 112 121 91 $9 00 01 Q2 Q3 Q4 111 109 121 Exports Imports Termsof trade &W=R'il?t 102 103 100 BALANCE of PAYMENTS 1984 1994 2003 2004 fI/ssCA?t Current account balance to GDP [ X ] Exportsof goodsand services 80 181 152 185 0 importsof goodsand services 108 239 185 255 2 Resourcebalance -28 -58 -33 -71 4 Net income 1 -5 -19 -20 1 Net currenttransfers 45 30 39 1 Currentaccountbalance -34 -18 -18 .47 -18 I Financingitems[net] 52 27 13 80 4 2 I , Changes innet reserves -18 -9 5 -33 Mm: Reservesincludinggold /M$m#h:l 62 78 Conversionrate /EGh&hSF,' 3.6 9.6 27.3 30.0 EXTERNAL DEBT and RESOURCE FLOVS1984 1994 2003 2004 pwm7t Composition of 2004 debt [US$ mill.] Totaldebt outstandinganddisbursed 230 423 635 674 IBRD 0 0 0 0 IDA 30 148 220 247 Totaldebtservice 13 31 20 34 IBRD 0 0 0 0 IDA 0 2 2 3 Compositionof netresourceflows Officialgrants 30 38 18 Officialcreditors 11 7 29 36 Privatecreditors 0 -4 0 0 Foreigndirectinvestment[netinflows] 0 10 60 Portfolio equity[netinflows) 0 0 0 World BankDroaram Commitmint; 20 14 0 0 A . IBRO E Bilatcral 1 Disbursements 3 9 11 21 B IDA 0 . Other multilatcral F Private -- I Principalrepayments 0 1 1 1 C IMF .. 0. Short-term Net flows 2 9 10 19 1 Interestpayments 0 1 1 2 Net transfers 2 8 9 18 ! DevelopmentEconomics 4/5/06 I 1 66 MAP SECTIOK'