Document of The World Bank FOR OFFICIAL USE ONLY

Report No. 66196-GN

Public Disclosure Authorized

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

Public Disclosure Authorized IN THE AMOUNT OF SDR 16.2 MILLION (US$25.0 MILLION EQUIVALENT)

TO THE

REPUBLIC OF

FOR A

Public Disclosure Authorized

PRODUCTIVE SOCIAL SAFETY NET PROJECT

May 23, 2012

Social Protection Unit Country Department AFCW3 Africa Region

Public Disclosure Authorized This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank‘s policy on Access to Information. CURRENCY EQUIVALENTS Exchange Rate Effective: April 30, 2012

Currency Unit = Guinean Franc FGN7,150 = US$1 US$0.64493 = SDR 1

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AFD French Development Agency /Agence Francaise de Développement CFS Safety Net Unit /Cellule Filets Sociaux CNSS National Social Security Funds / Caisse Nationale de la Sécurité Sociale CPAR Country Procurement Assessment and Procurement Reform CRD Rural Development Community / Communauté Rurale de Développement COMEF Committee of Mothers of Female Studens/Comité des Mères des Elèves Filles CT Cash Transfer DA Designated Account DRUH Regional Directorate of Urban Development and Housing EFC Error, Fraud, and Corruption EFP Essential Family Practices ESMF Environmental and Social Management Framework EMP Environmental Management Plan EU European Union FED European Development Funds / Fonds Européen de Développement FM Financial Management GDP Gross Domestic Product GER Gross Enrollment Rate GNF Guinean Francs GoG Government of Guinea GFRP Global Food Crisis Response Program HDI Human Development Index HIPC Heavily Indebted Poor Countries (Initiative) ICB International Competitive Bidding IDA International Development Association IFR Interim Financial Reports ILO International Labor Organization INS National Institute of Statistics / Institut National de la Statistique IPR Independent Procurement Review ISN Interim Strategy Note IMF International Monetary Fund IRE Inspection Unit Regional Offices LIPW Labor Intensive Public Works M&E Monitoring and Evaluation MEF Ministry of Economy and Finance MIS Management Information System MSAWC Ministry of Social Affairs, Women, and Children MUDH Ministry of Urban Development and Housing NCB National Competitive Bidding NGO Non-Governmental Organization ONFPP National Office for Professional Training / Office National de la Formation et du Perfectionnement Professionnel ORAF Operational Risk Assessment Framework PCAV Village Communities Support Program PDO Project Development Objective PDU3 Urban Development Project /Projet de Développement Urbain PFM Public Financial Management PIM Project Implementation Manual PNIR National Rural Infrastructure Program / Programme National d’Infrastructure Rurale PPR Post Procurement Reviews PRSP Poverty Reduction Strategy Paper PTA Parent–Teacher Association PCU Project Coordination Unit PUHIMO Urban Development Labor Intensive Public Works Project/Project Urbain de Travaux à Haute Intensité de Main d’œuvre PWP Public Works Programs PW Public Works RAP Resettlement Action Plan RFP Request for Proposal RPF Resettlement Policy Framework SBD Standard Bidding Documents SIL Specific Investment Loan SOE Statement of Expenses SP Social Protection SYSCOHADA Organization for the Harmonization of Business Law in Africa / Organisation pour l’Harmonisation en Afrique du Droit des Affaires SW Staff Week TA Technical Assistance TF Trust Fund UNICEF United Nations Children‘s Fund UNIDO United Nations Industrial Development Organization UNDP United Nations Development Program WFP World Food Program

Regional Vice President : Makhtar Diop Country Director : Ousmane Diagana Sector Director : Ritva S. Reinikka Sector Manager : Lynne D. Sherburne-Benz Task Team Leaders : Azedine Ouerghi and Fanta Touré

GUINEA PRODUCTIVE SOCIAL SAFETY NET PROJECT

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ...... 1 A. Country Context ...... 1 B. Sectoral and Institutional Context ...... 2 C. Higher Level Objectives to which the Project Contributes ...... 6

II. Project Development Objectives ...... 8 A. Project Development Objective ...... 8 B. Project Beneficiaries ...... 9 C. PDO Level Results Indicators ...... 9

III. PROJECT DESCRIPTION ...... 10 A. Project Components ...... 10 B. Project Financing ...... 15 1. Lending Instrument ...... 15 2. Project Cost and Financing (US$25.0 million) ...... 16 C. Lessons Learned and Reflected in the Project Design ...... 16

IV. IMPLEMENTATION ...... 19 A. Institutional and Implementation Arrangements ...... 19 B. Results Monitoring and Evaluation ...... 21 C. Sustainability...... 22

V. KEY RISKS AND MITIGATION MEASURES ...... 23 A. Risk Ratings Summary Table ...... 23 B. Overall Risk Rating Explanation ...... 23

VI. APPRAISAL SUMMARY ...... 24 A. Economic and Financial Analyses ...... 24 B. Technical ...... 26 C. Financial Management ...... 26 D. Procurement ...... 27 E. Social (including Safeguards) ...... 28 F. Environment (including Safeguards) ...... 29 Annex 1: Results Framework and Monitoring ...... 30

Annex 2: Detailed Project Description ...... 34

Annex 3: Implementation Arrangements ...... 45

Annex 4: Operational Risk Assessment Framework (ORAF) ...... 65

Annex 5: Implementation Support Plan ...... 75

Annex 6: Team Composition...... 80

Annex 7: Governance and Accountability Action Plan ...... 81

IBRD Map No. 33414 ...... 101

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PAD DATA SHEET Guinea Productive Social Safety Net Project (P123900) PROJECT APPRAISAL DOCUMENT AFRICA AFTSP

. Basic Information Date: 23-May-2012 Sectors: Other social services (100%) Country Director: Ousmane Diagana Themes: Social safety nets (95%), Improving labor Sector Lynne D. Sherburne- markets (5%) Manager/Director: Benz/Ritva S. Reinikka Project ID: P123900 EA Category: B - Partial Assessment Lending Specific Investment Instrument: Loan Team Leader(s): Azedine Ouerghi and Fanta Touré Joint IFC: No Borrower: Ministry of Finance Project Implementation Start Date: 01-Oct- End 02-Oct- 2017 Period: 2012 Date: Expected Effectiveness Date: 01-Oct-2012 Expected Closing Date: 02-Oct-2017 . Project Financing Data(US$M) [ ] Loan [ X Grant [ ] Other ] [ ] Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost (US$M): 25.00 Total Bank Financing 25.00 (US$M): .

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Financing Source Amount(US$M) BORROWER/RECIPIENT 0.00 IDA Grant 25.00 Total 25.00 . Expected Disbursements (in USD Million) Fiscal 2013 2014 2015 2016 2017 2018 0000 0000 0000 Year Annual 1.00 6.00 8.00 8.00 2.00 0.00 0.00 0.00 0.00 Cumulative 1.00 7.00 15.00 23.00 25.00 00.00 0.00 0.00 0.00 . Project Development Objective(s) The Project Development Objective (PDO) is to provide income support to vulnerable groups and to lay the foundations of a social safety net strategy by testing some of the building blocks necessary for a larger system. . Components Component Name Cost (USD Millions) Labor intensive public works and life skills training 16.50 Pilot cash transfer project 4.50 Project coordination and institutional capacity building 4.00 . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ ] No [ X ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X

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Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Dated covenant 01-Feb-2013 Description of Covenant The Recipient shall recruit, no later than four (4) months after the Effective Date, an independent external auditor in accordance with the provisions of Section III of Schedule 2 of the financing agreement Name Recurrent Due Date Frequency Dated covenant 01-Jan-2013 Description of Covenant The Recipient shall install and thereafter maintain operational throughout the implementation of the Project a computerized accounting system within the CFS, in form and substance acceptable to the Association, no later than three (3) months after the Effective Date. Name Recurrent Due Date Frequency Dated covenant 01-Feb-2013 Description of Covenant The Recipient shall recruit for the CFS an internal auditor according to terms of references acceptable to the Association no later than four (4) months after the Effective Date.

Conditions Name Type Condition of effectiveness Effectiveness Description of Condition The Recipient shall have adopted the Project Implementation Manual (other than the Cash Transfer Pilot Operations Manual), in form and substance satisfactory to the Association Name Type

v

Condition of effectiveness. Effectiveness Description of Condition The MoF shall have entered into a memorandum of understanding with the Ministry of Urban Development, Housing and Construction in form and substance acceptable to the Association and the Recipient shall have amended the PCU‘s constituent documentation (in form and substance acceptable to the Association) to enable the PCU to implement Part A of the Project Name Type Condition of effectiveness Effectiveness Description of Condition The Recipient shall have recruited for the CFS: (i) an accountant; (ii) a financial manager; (iii) a specialist for procurement; and (iv) a social safety nets coordinator, each in accordance with the provisions of Section III of Schedule 2 to the Financial Agreement. Name Type Disbursement condition Disbursement Description of Condition Evidence has been furnished to the Association that the conditions below have been satisfied in form and substance acceptable to the Association: (i) the CTP Service Agreement has been entered into by the parties thereto no later than 3 months after effectiveness, and (ii) the Recipient has adopted the CTP Operations Manual no later than 2 months after the date of the CTP Service Agreement Team Composition Bank Staff Name Title Specialization Unit Josiane M. S. Luchmun Program Assistant Program Assistant AFTSP Wolfgang M. T. Chadab Senior Finance Officer Senior Finance Officer CTRLA Azedine Ouerghi Sector Leader Team Leader AFTSP Yacouba Konate Consultant Consultant AFTTR Fanta Touré Operations Officer Co-Task Team Leader AFTSP Phillippe George Pereira Economist Economist HDNSP Guimaraes Leite Celestin Adjalou Financial Management Financial Management AFTFM Niamien Specialist Specialist Africa Eshogba Olojoba Senior Environmental Senior Environmental AFTEN Specialist Specialist Damien B. C. M. de Senior Economist Senior Economist DECHD Walque

vi

Anna Victoria Gyllerup Senior Operations Senior Operations AFTDE Officer Officer Kadidiatou Bah Program Assistant Program Assistant AFMGN Thierno Hamidou Diallo Disbursement Asst. Disbursement Asst. AFMGN Enagnon Ernest Eric Financial Management E T Consultant AFTFM Adda Specialist Alpha Mamoudou Bah Procurement Specialist Procurement Specialist AFTPC Anthony Molle Senior Counsel Counsel LEGAF Mamadou Saliou Diallo Communications Communications AFRSC Associate Associate . Locations Country First Location Planne Actua Comments Administrative d l Division Guinea Prefecture de Prefecture de X Nzerekore Nzerekore Guinea Prefecture de Prefecture de X Mamou Mamou Guinea Prefecture de Labe Prefecture de Labe X Guinea Prefecture de Prefecture de X Kindia Kindia Guinea Prefecture de Prefecture de X Kankan Kankan Guinea Prefecture de Prefecture de X Faranah Faranah Guinea Capitale d'Etat- Capitale d'Etat- X Zone Speciale de Zone Speciale de Conakry Guinea Prefecture de Boke Prefecture de Boke X Guinea Prefecture de Boke Prefecture de Boke X Guinea Prefecture de Boke Prefecture de Boke X .

vii

I. STRATEGIC CONTEXT

A. Country Context

1. Despite its vast natural wealth, poverty is widespread in Guinea. Guinea has a thriving mineral industry that could potentially lift large segments of the population out of poverty and secure job opportunities for the country‘s growing labor force. Conditions for agriculture are excellent given the availability of untapped arable lands. The country also constitutes a watershed for many major rivers in the region. Notwithstanding its endowments and strategic geographic location, Guinea is one of Africa‘s poorest countries. Its population, now totaling 10 million and growing at a rate of over 2.6 percent each year, is increasingly urban and overwhelmingly young: More than one-third of the population is estimated to live in urban areas and about 60 percent of the total population is under the age of 25. Household survey data in 2007 indicated that over 53 percent of the population lived below the poverty line.1 Recent political instability and the 2008 food and fuel crisis may have pushed the poverty rate upwards to approximately 58 percent in 2010.

2. On the economic front, Guinea has lagged behind most of its neighbors. While the economies of a number of countries, including Ghana, Liberia and Nigeria, have consistently grown, Guinea‘s macroeconomic performance has worsened due to the unstable political situation and the impact of the global slowdown. After a long period of fiscal profligacy, government spending was finally contained in 2007 and 2008, contributing to a 3 percent primary surplus on average. However, this positive trend was interrupted in 2009 when the military junta that had seized power in a coup in December 2008 relaxed fiscal controls, reversing the macroeconomic progress made the years before. Strong pressures for increased spending without an accompanying increase in revenues or external financing widened the deficit. Budget estimates for 2009 indicated that the basic primary balance declined from a 2.9 percent surplus in 2008 to a 4 percent deficit in 2009. Between 2008 and 2010, economic growth decelerated resulting in a 2 percent decline of Gross Domestic Product (GDP) per capita.2

3. However, efforts are underway to improve the fiscal balance and stabilize the macroeconomic environment. In early 2010, the Ministry of the Economy and Finance started to close many ad hoc and extra-budgetary accounts, reintegrating them into a single account at the National Treasury, strengthening at the same time procurement procedures, and reviewing outstanding commitments that had not been paid. A census of public servants is also planned to identify and eliminate ghost workers. Notwithstanding Guinea‘s poor macroeconomic performance, there are some signs of economic recovery and stabilization. Thanks to the normalization of the political situation and a push by an above average performance of agriculture and mining and high commodity prices, Guinea‘s economy is expected to grow by 3.6 percent in real terms in 2011 versus 1.9 percent in 2010.3

1 INS. 2008. Conakry: Rapid Poverty Assessment Survey 2007-2008-Republic of Guinea, National Institute of Statistics. 2 IMF. 2011. World Economic Outlook 2011. Washington DC: International Monetary Fund. Available at: http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weoselgr.aspx. 3 Ibid. 1

4. Guinea has some of the world’s lowest human development indicators. With a Human Development Index (HDI) of 0.34, Guinea ranks 178 out of 187 countries with comparable data in the United Nations Development Program HDI in 2011. Life expectancy at birth is 54.1 years, versus for example 64.2 in Ghana. The infant mortality rate is 81 per 1,000, compared to 56.9 in the Gambia, and the maternal mortality rate is one of the highest in Africa at 740 per 100,000 live births, versus 410 per 100,000 in Senegal. Malaria remains the leading cause of morbidity and mortality among children, and many children die each year as a result of other treatable diseases (diarrheal diseases and acute respiratory infections). Malnutrition may be associated with most cases of premature death.

5. Spending in the social sectors is considered low by international standards. The share of the education budget fell from 2.3 percent of GDP in 2002 to 1.8 percent of GDP in 2008, far below the average of 4 percent observed in Sub Saharan Africa. Meanwhile, in the same year, public expenditure on health accounted for 0.7 percent of GDP or US$21 per capita per year, while the average for the region was 2.3 percent or US$71 per year. Spending on social safety nets remains negligible.

6. These socio-economic challenges threaten to undermine the fragile peace that Guinea has recently secured. While the population has high expectations following the first free elections since independence in 1958, the political environment remains fragile, particularly in view of the reforms required to guide the country back to sustainable growth and development. In addition to the need to narrow the fiscal gap (estimated at about 15 percent of GDP in February 2011),4 Guinea is facing new external shocks in the form of looming food and fuel price increases. This will put additional pressure on an already poor and vulnerable population, further threatening the fragile socio-economic and political stability.

B. Sectoral and Institutional Context

7. The poverty rate has increased dramatically over the past decade and a half. The rapid poverty assessment survey (2007-2008) estimated the poverty incidence at 53 percent. Contrary to trends observed in other African countries like Burundi, Ghana, and Malawi, the incidence of poverty in Guinea, after a decline between 1994 (62.2 per cent) and 2002 (49.1 per cent) increased to 53 per cent in 2007 and 58 per cent in 2010. The proportion of the urban population living below the poverty line peaked at 30.5 percent in 2007, up from 23.5 percent in 2002 and 17.5 percent in 1994. In rural areas, where 82.3 percent of the poor live, poverty declined from 82.1 to 60 percent between 1994 and 2002 (although it registered a slight increase in 2007 at 63 percent), pointing to a stronger deterioration in relative terms in urban areas.

4 IMF. 2011. World Economic Outlook 2011. Washington DC: International Monetary Fund. Available at: http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weoselgr.aspx.

2 Figure 1: Evolution of Urban and Rural Poverty, 1994-2007

Source: World Bank Staff calculations

8. Guinean households are increasingly vulnerable to shocks, particularly fluctuations in food and oil prices and employ different coping mechanisms. According to the above mentioned rapid poverty survey (2007-2008), the share of food items in total consumption is consistently high across quintiles (ranging from 67 to 76 percent). The share is 69.9 and 75.2 percent among the non-poor and poor, respectively. It also varies across locations (77.5 percent in rural areas and 62.8 percent in urban dwellings). This denotes a high vulnerability to food price fluctuations, especially in urban areas. Rural areas are largely subsistence-based economies where the share of self-produced food consumption reaches close to 50 percent (versus 5.7 percent in Conakry); thus households are more vulnerable to the availability of food. The consumption of petroleum products (for lightning and transportation, public and private), in contrast, is strongly differentiated between the poor (2.5 percent of their total consumption) and non-poor (5.7 percent of their total consumption), with urban households devoting a significantly larger share of their disposable income to petroleum products. The World Food Program (WFP) surveys conducted in 2009 indicate that coping mechanisms between urban and rural households also differ. Households in urban areas tend to rely on borrowing from relatives and/or coworkers (78 and 32 percent respectively) to face price increases. Rural households resort to lowering the quality and/or the quantity of their food consumption (48 and 42 percent respectively).

9. The majority of the population relies on subsistence agriculture and the informal sector for employment and income. Despite a significant reduction in the inactivity rate5 from 35.6 to 21.3 percent between 2002 and 2007, the overwhelming majority of Guineans are employed in low productivity, low wage jobs. Over two-thirds of the labor force relies on the agricultural sector as a primary source of income. Almost 9 out of 10 workers are employed in micro-enterprises, often earning very low wages under inadequate working conditions. Only 1 percent of the labor force is enrolled in the public social security system, the Caisse Nationale de la Securité Sociale - CNSS, one of the world‘s lowest rates.

5 Proportion of the working age population that is not in the labor force.

3 10. Child Malnutrition is endemic in several regions. The latest figures estimate that 40 percent of children less than five years old suffer from chronic malnutrition, of which 21 percent are severely malnourished. This compares unfavorably with other neighboring countries such as Mauritania and Togo, where the chronic malnutrition rate is 25 and 28 percent respectively.6 The rates vary from one region to the other, with the most affected being Kankan (reaching 57 percent in Prefecture), N'Zérékoré (reaching 50 percent in Guéckédou), and Labé (reaching 48 percent in Koubia). Generally, food insecurity in Guinea is caused by poverty and lack of physical accessibility. A recent study suggests that chronic malnutrition in Guinea is highly correlated to poverty.7 For instance, Labé and N'Zérékoré, where chronic severe malnutrition rates are among the highest in the country (26 and 23 percent, respectively), are also some of the country‘s poorest regions, with 59 and 64 percent respectively.8 In Conakry, where poverty is about 26 percent (the lowest poverty rate in the country), chronic severe malnutrition was significantly lower than all other regions at around 12 percent. Across the country, the level of chronic malnutrition declines with the level of wealth; 24 percent of households in the lowest wealth quintile are considered chronically malnourished (severe) as compared to 17 percent of those in the highest quintile. More alarmingly, between 2005 and 2007, severe chronic malnutrition rates increased significantly across all wealth quintiles (from 18 to 24 percent for the poorest quintile and from 9 to 17 percent for the richest quintile). Aside from poverty and accessibility, the country‘s persistently high malnutrition rate can be explained by other aspects, including improper nutritional practices, insufficient knowledge on the importance of adequate nutrition for physical and cognitive development, and poor food sanitation.

Figure 2: Malnutrition and Poverty in Guinea

Chronic malnutrition is correlated to poverty Chronic malnutrition is correlated to poverty …………………….. in space …………………….. and time

Chronic Malnutrition and Poverty Rate by Region 2007 Chronic Malnutrition by Wealth Quintile

70%

30% 60%

25% 50% 2007

R² = 0.7676 20% 40% 2005

30% 15%

20% 10%

10% 5%

Chronic Malnutrition 0% 0% 0% 5% 10% 15% 20% 25% 30% 0 1 2 3 4 5 11-Nov-11 12 MICS 2007 ELP2007 11-Nov-11 13 EDS 2005 MICS 2007 Source: UNICEF (2011).

6 World Development Indicators. World Bank (2011). 7 UNICEF. 2011. Country Program Document 2013-2017. New York: United Nations Children‘s Fund. 8 INS. 2008. Annuaire des Statistiques Démographiques et Sociales 2007. Conakry: République de Guinée, Institute National de la Statistique.

4 11. Since 2005, almost all education indicators have either stagnated or deteriorated with more unfavorable outcomes for girls. The gross enrollment rate (GER) has stagnated at around 83 percent since 2007 and for girls, at around 77 percent (in 2011). The dropout rate however shot up from 5.9 percent in 2007 to 11.6 percent in 2010, and as a result, the primary completion rate fell to 58 percent in 2011 and for girls, 50 percent. There are significant disparities between access to and completion of education for boys and girls, with a significant disadvantage for the latter. The statistics of the 2009-2010 school-year showed a 12 percentage point difference in the GER and a 24 percentage point difference in the completion rate for the primary cycle in favor of boys, pointing to a higher dropout rate among girls in the high school years. Furthermore, Guinea is one of the countries in the sub-region with the largest rural–urban gap in terms of school attendance, particularly for girls. Besides common supply-side constraints to education like poor infrastructure and teacher absenteeism, demand-side constraints such as direct costs associated with sending children to school and opportunity costs often influence the decision to send children to school; these constraints tend to rise relative to the age of the children. The 2007 household survey investigated the reasons for not attending schools among children age 7 to 19 years: For both girls and boys, work (22.8 percent) and the cost of schooling (13.7 percent) were among the key reasons compared to failure at exams (14.5 percent), not needed (11.2 percent), and distance (4.8 percent). For girls, the pattern is similar but in addition to work (23.9 percent) and the cost (12.8 percent), pregnancy and marriage were important factors as well, representing 11.6 percent. The most recent study conducted by the United Nations Children‘s Fund (UNICEF) in 20009 indicated that the opportunity costs associated with basic education increase threefold between the 6-8 and the 12-15 age brackets. In addition, the same study shows that the opportunity costs of children in rural areas are 5-10 times higher than for urban children. The study is being updated, but the situation is expected to have worsened due to the increase in poverty. The charts below indicate a link between poverty and school attendance differentiated by gender, showing a clear disadvantage for girls, markedly in rural areas.

Figure 3: Poverty and School Attendance Differentiated by Gender, 2007

9 UNICEF. 2000. Opportunity Costs of Child Schooling in Guinea New York: United Nations Children‘s Fund.

5 Source: Enquête Légère pour l‘Evaluation de la Pauvreté 2007-2008.

12. Youth suffer disproportionately from unemployment and underemployment. Political instability and uneven macroeconomic performance have hindered job creation in the last decade, notably for new labor market entrants. At the same time, the youth cohort has consistently expanded and is now at a historical high. Guinean youth are also entering the labor market with a deficit in the range of skills needed for long-lasting and productive employment. Many, especially girls, have not completed basic education. The absence of higher-level job- relevant skills coupled with insufficient labor demand to absorb the growing labor force has forced Guinean youth to make a living in low productivity, low earning occupations and sectors.

13. Factoring in the political economy and fragile nature of the country. After years of military dictatorship and instability, Guinea‘s first democratically elected president assumed power in December 2010. The new President was elected on a platform of a radical break with the practices of the former military regime. Its vision is to transform Guinea‘s political and economic governance, in order to start reaping and sharing the benefits of its very rich agricultural and geological endowment in an equitable and inclusive way. That being said, the political environment remains fragile: the painful reforms needed to stabilize the economy such as price increases of subsidized items, including fuel, are juxtaposed with high expectations of a population that is eager to reap the benefits of democracy.

14. Within this context, the rapidly growing urban and predominantly young population is generating concerted political pressures. Over the last ten years, the young population has played a key role in conflicts driven by political tension and economic grievances. With the high prevalence of underemployment/unemployment among this group, violent outbreaks could erupt, threatening the country‘s democratic consolidation and social peace as well as deflating expectations for the country‘s nascent democracy. The government, keen to contain this potential risk while advancing the reform process, is making a special effort to show quick and tangible results, decidedly in urban and potentially volatile areas.

15. Households lack adequate risk-coping instruments. They rely either on informal solidarity networks, which are ineffective in reducing poverty and tend to collapse during large- scale and generalized shocks, or resort to detrimental coping mechanisms affecting their future growth. Interventions aimed at reducing poverty and vulnerability are largely driven by donors and non-governmental organizations (NGO) on an ad hoc basis. A recent review conducted by the World Bank (included in Annex 8) identifies two types of interventions in the country: a public work program in Conakry as an emergency response to the 2008 crisis and WFP school feeding programs. According to this review, these interventions are very limited in scope and coverage. There are no national institutional arrangements in place to coordinate and monitor implementation or to determine the financing needs that are fiscally sustainable. Although the Ministry of Social Affairs, Women, and Children (MSAWC) is mandated to lead interventions in the sector, it has very limited capacity to effectively pursue this objective.

C. Higher Level Objectives to which the Project Contributes

16. The return to civil government provides a window of opportunity to implement pro-poor economic and social policies. For the first time, Guinea, a fragile state, is attempting

6 to design a coherent safety net package of interventions to support vulnerable households who have historically lacked risk management mechanisms to weather shocks. The government recently published an updated version of its Poverty Reduction Strategy Paper (PRSP), which defines in detail the reforms and actions to be initiated in 2011-2012. Extending safety nets to fight poverty, improve living conditions, and extend access to and coverage of basic social services is one of the themes that figures prominently.

17. Diagnostic work suggests a differentiated approach in rural and urban areas. In rural areas where poverty is characterized by limited access to food due to poverty, protecting the human capital from depletion, especially among children, should be a priority in the short term. In urban areas, where the poor are most vulnerable to price fluctuations, increasing their purchasing power should be a priority. Social safety nets can play an important role in protecting human capital from depletion, providing temporary income-generating activities, and helping smooth consumption during times of crisis and reforms.

18. The proposed project is consistent with the policy dialogue and is aligned with the priorities of Guinea’s Interim Strategy Note (ISN) for Fiscal Year 2011-2012 and the Bank’s new Social Protection Strategy 2012-2022. The ISN is closely aligned with the main pillars identified in the PRSP. It advocates a two-stage approach towards social protection: in the short term, assisting the poorest and most vulnerable population groups to weather the negative effects of reforms and rising prices, while moving towards developing a comprehensive safety net system in the medium to longer term. The Social Protection Strategy emphasizes: (i) prevention against income and expenditure shocks; (ii) protection from destitution and human capital loss; and (iii) promotion of improved opportunities, livelihoods, and better jobs, as well as paying more attention to fragile states. Finally, the proposed intervention is consistent with the Africa Social Protection Strategy and two key pillars of the Africa Strategy: (a) vulnerability and resilience, and (b) competitiveness and employment.

19. With regard to the Africa Social Protection Strategy, which puts special emphasis on the productive aspects of safety nets, the proposed project will focus on interventions with the potential of asset creation in addition to their traditional protective roles. The productive role of the proposed interventions spans three levels: (i) at the level of participating individuals or households, by actively promoting the development of their human capital through increased demand for nutrition and education among the poor and vulnerable; (ii) at the community level, by spurring the local economy and well-being via new and rehabilitated community infrastructure, increased demand, and spillovers from beneficiaries to non- beneficiaries; and (iii) at the macro level by improving social cohesion and permitting growth- enhancing reforms like general price subsidy reforms.

20. The proposed project complements wider government effort as supported by other World Bank and development partner projects. This includes the World Bank National Rural Infrastructure Program (Programme National d’Infrastructure Rurale - PNIR), which has been engaged in the improvement and maintenance of prefecture roads and small bridges in rural areas. As part of the reengagement efforts, the project has elaborated a reactivation strategy that would among other things scale up labor intensive road maintenance works programs to achieve impact in terms of rural accessibility and youth employment. The Bank‘s Village Communities Support Program (PCAV) has been operating in rural areas providing support and financing to

7 communities to design and implement their development plans. The second phase of this project intends to expand to all Rural Communes (formerly Communautés Rurales de Développement - CRD) and increase the range of eligible micro-projects. The World Bank‘s Second Emergency Agricultural Productivity Support Project aims at improving the productivity and value-added of targeted commodities in key agro-ecological zones. The direct beneficiaries of support to crop production are the approximately 100,000 small-holder farmers. In sectors related to human development, the Bank is administering an ―Education for All‖ grant which aims to assist the Recipient in its efforts to improve the conditions for teaching and learning in its territory, through: (i) expanded access to education, (ii) enhanced quality of learning, and (iii) strengthened human resource management. Finally, a Bank-funded health project aims to improve the coverage and quality of maternal and child health services in targeted districts and targeted health centers in the peri-urban areas of Conakry. Other donors are also active in rural areas, including the United Nations Development Program (UNDP), European Union (EU), French Development Agency (AFD), and World Food Program (WFP). The WFP food for work programs in Guinea Forestière are of particular interest because they were designed to mitigate the impact of the massive influx of migrants from Liberia and Sierra Leone and aimed at enhancing the assets of local communities through the rehabilitation of marshland, creation of fruit tree nurseries, horticulture, and school gardens, and maintenance of rural roads. The proposed productive safety nets project aims at filling a gap: in urban areas, where the population is most vulnerable to commodity price fluctuation, by increasing income through Labor Intensive Public Works (LIPW); and in rural areas, where human capital development is at risk, by encouraging girls‘ education and child nutrition through targeted cash transfers.

II. PROJECT DEVELOPMENT OBJECTIVES

A. Project Development Objective

21. The Project Development Objective (PDO) is to provide income support to vulnerable groups and to lay the foundations of a social safety net strategy by testing some of the building blocks necessary for a larger system.

22. More specifically, the project will: (i) implement a labor intensive public works program (LIPW) and life skills development in urban areas targeted at youth to rehabilitate and construct critical urban infrastructure and create short term employment; (ii) pilot a cash transfer project to improve human capital in rural areas; and (iii) strengthen the institutional capacity of the government to design and coordinate social safety net interventions. The proposed PDO reflects several aspects emerging from the country context. First, the urgent need to protect households from increased commodity prices requires the use of existing instruments with a proven record, a LIPW program in this case. However, this instrument has limitations as it only targets work- capable beneficiaries. Second, because Guinea does not have experience in other formal safety nets capable of meeting the needs of a large spectrum of poor and vulnerable groups, the proposed project intends to test the viability of other interventions before committing the country to large-scale programs. The proposed pilot will provide information on both the relevance of the tested interventions and the implementation parameters within the country‘s context. Third, because of Guinea‘s limited fiscal space and political economy considerations (low tolerance for pure transfers), the proposed project focuses on asset-building and growth-enhancing safety net types of interventions.

8 B. Project Beneficiaries

23. The proposed intervention adopted an approach that favors larger transfers through an extended working period for public works in order to show tangible results on poverty reduction per beneficiary. The transferred amount has the potential to reduce the poverty gap in urban areas by an estimated 12 percent. An estimated 34,000 individuals will receive direct transfers through the project (24,000 for LIPW and 10,000 for the pilot cash transfers). This figure translates into an overall estimated 200,000 beneficiaries (assuming six members per household). In addition, infrastructure rehabilitated and constructed through the project (100 micro-projects in poor neighborhoods in all eight administrative regions of the country10) will directly benefit populations in the targeted areas. Through these micro-projects, an estimated 500,000 people will benefit from improved infrastructures.

24. Direct beneficiaries will be selected among highly vulnerable population groups. The LIPW component will benefit underemployed and unemployed youth older than 18 years in the regional capitals, with 30 percent of participants being women. The pilot cash transfer component will directly benefit malnourished children and primary school girls in the sub- prefectures in Boké, Kankan, and Labé, where child malnutrition rates are high and where girls‘ primary school completion rates are low.

C. PDO Level Results Indicators

25. The following indicators have been designed to monitor progress towards the Project Development Objective:

 Number of direct project beneficiaries (percentage of which are women)  Beneficiaries with access to LIPW (number)  Beneficiaries with access to cash transfer (number)  Beneficiaries with access to life skills development (number)  Beneficiaries with access to essential family practices training (number)  Beneficiaries with access to improved infrastructure (number)  Findings from the impact evaluation of the cash transfer pilot are discussed and included in the Social Protection Strategy (yes/no).

10 Boké, Conakry, Faranah, Kankan, Kindia, Labé, Mamou, and N'Zérékoré.

9 III. PROJECT DESCRIPTION

A. Project Components

26. The operation will comprise the following three components: (i) a labor intensive public works program and life skills development in urban areas targeted at youth to construct, rehabilitate, and maintain critical urban infrastructure and create short term employment; (ii) a pilot cash transfer to improve human capital in poor and food insecure rural areas; and (iii) institutional and capacity building and project management aimed at supporting the operational units of the program in the development of key elements of a social protection strategy.

27. The total International Development Association (IDA) allocation for the proposed intervention is US$25 million. The total budget envelope will be allocated, including contingencies, as follows:

 LIPW and life skills development: US$16.5 million  Cash Transfer Pilot: US$4.5 million  Project coordination, capacity building, monitoring and evaluation and impact evaluation of the pilot: US$4.0 million

28. Although the share of the LIPW may appear large compared to the cash transfer, this is because of the pilot nature of the latter. The pilot is designed to test the feasibility and effectiveness of cash transfers in this specific context before committing larger amounts. On the other hand, the LIPW component was designed to scale up existing interventions, in order to respond to the government‘s urgent need to provide resources to households in order to mitigate the impact of increased prices from the ongoing reforms.

Component 1: Labor intensive public works program in urban areas with a focus on youth and life skills development (US$16.5 million - Total costs including contingencies)

29. Preparatory diagnostic work indicated that urban households tend to have high vulnerability to commodity price fluctuations. The share of food items, mainly purchased, is high across income groups in urban areas (close to 62.8 percent of total expenditure on average). Furthermore, the presence of a large cohort of idle youth in major urban centers presents a serious risk to the country‘s stability, especially in light of the upcoming economic reforms. The need for life skills development has emerged to address the issue of skills inadequacy that inexperienced and poor youth face as they try to enter the labor force. This component will have two sub-components: (i) temporary employment opportunities to increase a household‘s income while rehabilitating and creating community infrastructure in urban areas; and (ii) life skills development to reinforce basic life skills and workforce readiness behavior to complement the experience acquired in the LIPW.

10 Sub-component 1.1: Temporary employment opportunities (US$15.5 million —total cost including contingency)

30. This sub-component aims to temporarily increase the revenues of the underemployed and unemployed in the country‘s regional capitals. It will build on lessons learned from the emergency operation under the Bank‘s Projet de Développement Urbain or PDU3 (Urban Development Project) to mitigate the impact of the 2008 fuel and food price crisis.11 It will provide temporary employment opportunities through labor intensive public works (LIPW) to about 24,000 unskilled/semi skilled people older than 18 years in the five communes of the special zone of Conakry and seven regional capitals. The micro-projects will be drawn from local municipal development plans and selected in consultation with the local populations. These micro-projects are expected to include activities like road rehabilitation and maintenance, paving streets, painting, upgrading/rehabilitating/maintaining/constructing public and economic infrastructures, gardening, sanitary works, etc. In order to promote the participation of women, 30 percent of all LIPW participants must be women. A sensitization campaign will ensure that information is shared about the requirement of women participating in the public works. Further, the list of eligible micro-projects will be reviewed and updated to ensure that gender-friendly activities such as fetching water, preliminary cleaning of sites, breaking and carrying small stones, etc. are included. An estimated 2.4 million person-days of labor (or 100 days of work per beneficiary) will be created through the project.

31. Local contractors will be recruited to execute the micro-projects and facilitate payments to beneficiaries. Wage levels have been set at 20,000-25,000 GNF (est. US$3-4) on average per day, depending on the areas of intervention and their respective ongoing market rates. This rate is aligned with wages paid by similar ongoing interventions under the Project Coordination Unit of the Bank-funded PDU 3 (PCU/PDU3). It is slightly below the market rate for unskilled workers, which is expected to deter participation of the less vulnerable. Eligible neighborhoods will be selected by the PCU/PDU3 in consultation with municipal authorities based on poverty and vulnerability criteria that will be specified in the Project Implementation Manual (PIM). Beneficiary selection will be conducted by neighborhood leaders in consultation with local authorities and local contractors under the supervision of the PCU/PDU3. Selection will mainly rely on self-targeting based on the wage levels. If demand for labor exceeds supply, beneficiaries will be selected based on a list of poverty criteria to be specified in the PIM, including being at least 18 years old, a resident in the neighborhood targeted, not having another source of income, household size, etc.

11 A quick survey targeting beneficiaries, contractors, communities, and local officials was undertaken to draw lessons from the experience of PDU3 in this area. Lessons learned are being incorporated in the design of this component.

11

Sub-component 1.2: Life skills development for youth (US$1.0 million —total cost including contingency)

32. This sub-component aims to provide 5,000 youths with trainings in non-cognitive skills. The youth will be selected from the LIPW beneficiaries based on demand, a minimum educational level, and regular attendance at the LIPW programs. Training content will focus on topics such as civic education, the rights and responsibilities of workers, conflict prevention and resolution, HIV/AIDS prevention and treatment, entrepreneurship, management, environmental protection, etc. The training curriculum will be validated by a consultative commission with representation from the private sector, civil society, and training professionals. A total number of 100 training sessions will be offered over the five years of project implementation. Each year after completion of the LIPW activities, the selected LIPW beneficiaries will be organized in groups of 25 to attend 5-10 days of trainings, and will receive a daily stipend during the training and a certificate after successful completion of the training.

Component 2: Pilot cash transfer program to protect human capital (US$4.5 million - Total costs including contingencies)

33. Preparatory diagnostic work indicates that Guinea suffers from extremely low human capital, and that poverty is a key factor in this trend. Current human development indicators are worrisome and if not addressed, will compromise the long term development of the country. The pilot will focus on two indicators: chronic malnutrition and low primary school completion rates of girls. Chronic malnutrition among children 0-24 months old is among the highest in the world and largely affects the rural poor. In the education sector, primary school completion rates, and particularly those of girls, is very low; girls‘ dropout rates are higher than those of boys. Girls tend to get married at a very early age, and the average year of first pregnancy is about 16. Both indicators are strongly correlated with poverty and the uncertainty of income.12 These two human development outcomes were selected as part of the project‘s strategic attempt to build on the presence and strength of partners involved in this field. The pilot cash transfer will have three sub-components: (i) design; (ii) pilot cash transfer (CT) for nutrition; and (iii) pilot CT for girls‘ education. In addition, the pilot will include accompanying measures such as training and awareness-raising to maximize the impact of the cash transfers.

Sub-component 2.1: Design of the pilot project

34. This sub-component aims to guarantee the quality of the pilot cash transfer intervention. UNICEF, as the only agency with the national network of local institutional infrastructure and the technical capacity required to rapidly facilitate one of the first cash transfer interventions for nutrition and education in the country, will be contracted for the execution of this sub-component. Sub-component 2.1 will consist of signing the contract, which will include detailed terms of references, expected deliverables, and modalities of payments and reporting. In addition, this sub-component will finance the elaboration of a technical Annex on targeting, beneficiary selection, registration, and payment methods for the pilot cash transfer, as a first step

12 Background document for the World Food Program Strategy 2013-2017. Analysis of Food Security and Nutrition in Guinea. Internal document.: World Food Program.

12 towards the establishment of cash transfer systems. This technical Annex will be inserted in the PIM. The partnership with UNICEF will guarantee the quality of the pilot and will provide a framework to strengthen the capacity of national institutions.

Sub-component 2.2: Cash transfer for nutrition (US$2.25 million —total cost including contingency)

35. This sub-component will test the effectiveness of cash transfers in reducing the malnutrition rate of targeted children. It will benefit at least 5,000 children aged 0-24 months that are affected by chronic malnutrition in at least two of the regions with some of the highest chronic malnutrition rates in the country (Kankan and Labé). Within these regions, the prefectures of Koubia (48 percent of chronic malnutrition) and Mandiana (52 percent of chronic malnutrition) will be targeted, but other prefectures might be added if needed to reach a coverage of 5,000 eligible children. Four sub-prefectures that feature different socio-cultural and agro- ecological characteristics will be retained within these prefectures to inform the pilot so that the pilot can provide lessons on the effectiveness of cash transfers in dealing with malnutrition in different settings (see Annex 2 on project description for more details).

36. Beneficiary selection will be based on poverty and chronic malnutrition levels of children and will involve community participation. After the villages have been selected, a baseline survey will be conducted to identify eligible beneficiaries and create a composite list. The survey will be premised on: (i) age, 0-24 months; (ii) chronic malnutrition, -2 standard deviation for the age-to-height indicator; and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households that are considered vulnerable but that were not identified during the survey. The final list will be shared publicly with the communities. Selected beneficiaries will be registered in a centralized database that will be managed by UNICEF. During the registration process, each beneficiary will receive an identification card to facilitate payments and promote transparency.

37. Cash transfers to the beneficiaries will be made by payment agencies based on a list of selected beneficiaries. The transfers will be provided publicly to the mothers of the malnourished children, once they present their beneficiary IDs. The payments will be made once every two months to reduce the transaction cost but at the same time, to allow beneficiary households to purchase food as needed.

38. The amount of transfer per child was determined based on household consumption levels and best international practices. Differentiated amounts will be tested for the purpose of the impact evaluation. Hence, each household will receive the local equivalent of US$7, US$14, or US$21 per child per month for 18 months. The amount that each household will receive throughout the intervention will be determined through randomization at the beginning of the project. A maximum of two children are eligible per household. The transfers are expected to increase the quality and quantity of food consumption, particularly for the children within the households. Community health workers working for the project will monitor improvement in the children‘s nutritional status. Children showing no improvements due to prior health conditions or medical reasons will be directed to the nearest medical facility, or to complementary UNICEF

13 interventions, and will continue to receive support from the program. In case there are no improvements after the third payment due to willful neglect of the households, the beneficiaries will be suspended. However, they will be given the opportunity to reintegrate into the program if the children show improvement in their weight-to-height indicator. In these specific instances, the household that seek to reintegrate the project will request UNICEF to assess changes in the anthropometric indicators of the children who participated in the project. Prior to the suspension, the mother will receive follow up visits by health workers for additional awareness-raising and will also involve local Mothers‘ Associations.

39. Training on health, nutrition, and sanitation have been included in the package to maximize the impact of the cash transfer on nutrition. Beneficiary and non-beneficiary households in targeted communities will be trained in essential family practices (EFP) including: (i) breastfeeding; (ii) hand washing; (iii) oral re-hydration to treat diarrhea; (iv) supplementary feeding after the sixth month; (v) use of mosquito nets; (vi) awareness-raising around the risks of malaria, diarrhea, and pneumonia; (vii) use of preventative services such as vaccination, de- worming, and vitamin A; and (viii) birth spacing. In addition to the EFP training, beneficiary households will receive nutritional trainings and supervision from community health workers attached to the health centers that are connected to the community. Participation of cash transfer beneficiaries in the training will be recorded.

Sub-component 2.3: Cash transfer for girls’ education (US$2.25 million total cost including contingencies)

40. This component aims to test the efficiency of cash transfers in increasing the primary school completion rate among beneficiaries. The intervention will target at least 5,000 girls in the fifth and sixth grade in at least three regions where the girls‘ completion rate is among the lowest, namely Boké, Kankan, and Labé. These regions also have the lowest ratio of girls‘ enrollment rate of the poorest quintile over the same rate of the richest quintile. Within these regions, the four most affected prefectures (namely, Gaoual, Mandiana, Kerouane, and Koubia) have been selected. A committee including representatives from the Parent–Teacher Association (PTA), the Ministry of Primary Education, and the Rural Development Communities (Communautés Rurales de Développement - CRD) will be established to select the schools that will benefit from the project based on the highest ratio of girls‘ dropout. Beneficiary households will be selected at the community level by the CRD based on poverty criteria.

41. Beneficiary selection will be based on poverty criteria drawing on the findings of the new household survey and will involve community participation. After the villages have been selected, a baseline survey will be conducted to identify eligible beneficiaries and create a composite list. The survey will be premised on: (i) households with girls enrolled in the third to sixth grade of primary school; (ii) households with girls of age to benefit from the program (girls who have left school for more than one academic year will be eligible, provided that they are at least 12 years old for the fifth grade and 13 years old for the sixth grade); and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households that are considered vulnerable but were not identified by the survey. The final list of beneficiaries will be shared publicly with the communities. Selected beneficiaries will be registered in a centralized

14 database that will be managed by UNICEF. During the registration process, each beneficiary will receive an identification card to facilitate payments and promote transparency.

42. Cash transfers to the beneficiaries will be made by payment agencies based on beneficiary lists submitted by UNICEF. The transfers will be given publicly to the mothers of the girls, once they present their beneficiary IDs. The payments will be made at the beginning of each trimester to reduce the transaction cost while at the same time, allowing households to contribute to the costs associated with sending the girls to school.

43. The amount of transfer per child was determined based on household consumption levels and best international practices. Differentiated amounts will be tested for the purpose of the impact evaluation. Hence, each household will receive the local equivalent of US$7, US$14, or US$21 per child per month until the end of their sixth grade school year. The amount that each household will receive throughout the intervention will be determined through randomization at the beginning of the project. A maximum number of two girls will be targeted per eligible household. Beneficiaries will be required to attend at least 90 percent of the school sessions. Students who miss school for more than 10 percent of any given term without acceptable justification (as determined by the PTA) will have their next installment cancelled. Students who miss a term or drop out of school without an acceptable justification will be dropped from the program. Compliance will be recorded in students‘ attendance and performance records, which will be regularly transmitted to the project.

44. Supporting measures will be added to maximize the impact of the transfers on girls’ education. All households in the targeted villages will be sensitized to the importance of girls‘ education, and the capacity of the PTAs to monitor school attendance will be strengthened.

Component 3: Project coordination and institutional capacity building (US$4.0 million - Total costs including contingencies)

45. Component 3 will ensure that the unit coordinating project implementation, the Safety Net Unit (Cellule Filets Sociaux - CFS), is operational. In addition, component 3 will ensure that the CFS successfully and efficiently manages contracts with partners involved in implementation, and conducts supervision to ensure that the project is implemented in conformity with key project documents including the Financing Agreement, the Procurement Plan, and the Project Implementation Manual. This component will finance institutional capacity building, to support the development of the social protection strategy. In view of the government‘s weak capacity and to support the work of the CFS, the proposed project will develop a strong and sustained supervision work program, particularly at the beginning of the project. Finally, and to ensure horizontal capacity strengthening, the CFS will have a full-time staff member seconded from the Ministry of Social Affairs, Women, and Children (MSAWC).

B. Project Financing

1. Lending Instrument

46. The project will be implemented through a Specific Investment Loan (SIL) given in the form of an IDA grant over a period of five years. A SIL was deemed appropriate in light

15 of the social character of the intervention, and as the project supports the creation, rehabilitation, and maintenance of economic and social infrastructure as well as capacity building.

2. Project Cost and Financing (US$25.0 million)

Project Components Project IBRD or Percentage Cost IDA of Financing Financing 1. Labor intensive public works and life skills development 16.5 16.5 100% 1.1 LIPW 15.5 15.5 1.2 Life skills development 1.0 1.0

2. Cash transfer pilot to promote human capital 4.5 4.5 100% 2.1 Design of the cash transfer pilot 0.0 0.0 2.2 Cash transfer for child nutrition 2.25 2.25 2.3 Cash transfer for girls‘ education 2.25 2.25

3. Project coordination, institutional capacity building and 4.0 4.0 100% monitoring and evaluation

Total project costs 25.00 25.00

Total financing required 25.00 25.00

C. Lessons Learned and Reflected in the Project Design

47. The project design is based on analytical work, consultations, and policy dialogue with the government and its development partners. Past Bank-financed interventions in labor intensive public works interventions, youth targeted life skills development programs, and conditional and unconditional cash transfer in other countries and comparable contexts have been taken into consideration. The LIPW component is incorporating findings from a rapid review of the LIPW activities that were implemented in 2008-2010 by the PCU/PDU3 as part of a Global Food Crisis Response Program (GFRP) grant. The following lessons have been incorporated in the current project:

 Partnership with local stakeholders: Effective management of LIPW activities requires close partnership with local stakeholders. Experience indicates that the involvement of local communities and municipalities in the selection of micro-projects has been key in promoting ownership and ensuring consistency of the intervention with government and local priorities. Community involvement and supervision of works is a common element across most public works operations to improve project accountability and citizen participation. Likewise, partnerships with local entrepreneurs for the execution of the works have proven effective in delivering quality rehabilitation works and cultivating local entrepreneurs. The PCU/PDU3 was consistent in these areas during the implementation of the LIPW for the GFRP-funded emergency operation. These standards will be maintained for the proposed intervention.

16  Participation of women in LIPW activities: A rapid review of the LIPW activities indicates a low participation rate of women (9 percent). To prevent a recurrence, the proposed intervention will conduct an extensive sensitization campaign to encourage women to participate in the public works programs. A quota of a minimum 30 percent of beneficiaries will be reserved for women. Eligible micro-projects will be broken down in sub-activities that are gender friendly, and specific micro-projects that traditionally attract high participation among women will be included. Women will be prioritized in beneficiary selection. Additional measures (e.g., recruiting one woman as a LIPW worker to look after the children of the women participating in the works) will be adopted.

 Beneficiary recruitment: An estimated 80 percent of workers recruited as part of the GFRP-funded LIPW were recruited based on the recommendation of local authorities. Although exclusion errors in Guinea are limited given the depth and scope of poverty, the selection method should be more transparent to avoid possible conflicts. The proposed intervention will be conducted with local authorities to select beneficiaries in a more transparent manner. Furthermore, the micro-projects will be implemented in poor neighborhoods to increase the odds of selecting the poorest, and participation in the activities will be restricted to those living in the targeted neighborhoods. If demand for labor exceeds supply, additional criteria such as being at least 18 years old, a resident in the neighborhood targeted, not having another source of income, household size, etc will be used to select workers. The final list of beneficiaries will be displayed publicly.

 Work norms: Work norms will be improved based on lessons learned from the GFRP. Hence, all workers will be required to sign a contract prior to the beginning of activities. The work day will not exceed eight hours. Emergency health care will be provided to workers in case of work-related accidents. The local contractors responsible for executing the micro-projects will be required to provide some protective equipment to all workers.

 Sustainability of LIPW activities: International experience suggests that micro-projects should be simple in design and implementation, emphasizing small-scale infrastructure construction or maintenance of existing infrastructure as opposed to large-scale projects. In addition, sustainability must be reinforced by other factors such as adequate professional training activities for contractors and Public Works (PW) staff and effective monitoring. As such, the micro-projects envisioned as part of this component are expected to follow standard practices for the execution of urban micro-projects emphasizing their employment-generation potential, the skills adequacy vis-à-vis the pool of potential beneficiaries, and their cost-effectiveness. Several of these measures fall in line with past experience of the PCU/PDU3. However, shortfalls have also been identified and would need to be factored in the design of the proposed interventions. For example, the sanitation interventions will not entail any heavy waste disposal activities unless a specific non-objection is provided by the World Bank, as this activity has proven challenging to successfully manage. On the other hand, the construction of latrines is envisaged in extremely poor communes. Residents will also be targeted with awareness- raising campaigns on health, sanitation, and hygiene to encourage them to contribute to the cleanliness and maintenance of rehabilitated sites.

17  Life skills development: Although the evidence is relatively thin in Africa, international experience from the evaluation of the youth-targeted training programs points to positive results in terms of increased employability and earnings. ―Public Works Plus programs,‖ which finance cash for work and skills development, are fairly new in Africa but are now under implementation in Cote d‘Ivoire, Kenya, Liberia, and Sierra Leone. All of these interventions have been designed based on internationally proven experience. This component was designed to add much needed life skills to a largely unskilled youth in the context of a fragile state where youth have frequently been manipulated and drawn into violent situations.

 Effectiveness of cash transfer instruments: Cash transfers (CT) are widely considered cost-effective instruments to reduce poverty and manage risks while improving human development outcomes. In South Africa and Namibia, the national CT programs contributed to reducing the poverty headcount and the poverty gap between 12 and 18 percent. Cash transfers also have shown to contribute to a significant increase in food and other basic goods consumption. In Malawi‘s Food and Cash Transfer Program (FACT), about 75 percent of the transfer is spent on groceries; in Lesotho, the proportion of old pensioners that never went hungry increased from 19 to 48 percent following the cash transfer; and in Zambia, beneficiary households raised their daily protein intake by 12 percent and oil consumption by 35 percent when compared to control groups. In Kenya as well, the results of implementing the CT program for households with Orphan and Vulnerable Children yielded a 13 percent poverty reduction, in addition to increased food consumption and dietary diversity. Finally, evidence suggests that CTs also have a direct impact on certain human development outcomes. Both conditional and unconditional cash transfers have led to positive impacts on schooling outcomes, which in turn should lead to several other long term benefits for the household. A study conducted in Latin America,13 identified positive enrollment, attendance, and, in some cases, learning and achievement effects of CT programs. Outside of Latin America too, the human development effect is discernible. In Bangladesh and Cambodia, CT exposure increased the female enrollment rate by 12 and 31 percentage points respectively.

 Sustainability of CT programs: One of the key roles of a CT program is that it allows governments to target poor and vulnerable groups instead of relying on the costly and regressive general price subsidies. Other generally recognized benefits of CTs include their multiplier effects on the wider economy and their potential to maintain relatively low administrative costs for a key social safety net intervention, encourage inter- institutional coordination and institutional strengthening, and support the development of national social protection policies and strategies. The pilot CT of the proposed intervention will help lay the foundations of an effective safety net system that could be scaled up gradually using Guinea‘s own fiscal resources. A rigorous impact evaluation of the pilot will be conducted.

 Accompanying measures such as information and awareness campaigns on essential family practices strengthen the impact of cash transfers on the beneficiaries. Recent analysis of such interventions shows a direct positive impact on the general health status

13 Fizbein and Schady- World Bank (2009)

18 of participants and the nutritional status of children up to 24 months and under five years old. Similar results have also been found in Mexico where there is evidence that training sessions contributed to better diets14 even after taking into account the income effect of the transfers. In addition, there was a ―spillover‖ effect on non-participant households in the community. Another evaluation in Mexico15 found that the workshops had a positive impact on knowledge and practices in health, with higher impacts for those related to diet and childcare. Positive impacts of group training sessions have been found for several parenting programs in low income settings. Hence, the proposed project will include participation in sensitization campaigns and EFP trainings in its design, as part of the component on cash transfer.

 Building the government’s capacity to coordinate and manage safety net interventions and systems is essential to project sustainability. The proposed project will invest significant resources as part of component 3 to improve the institutional capacity of the Government of Guinea. The end goal being, to lay the foundation of a safety net system anchored in a comprehensive social protection strategy and developed in parallel with this project. Sub-component 2.1 will also take into consideration the requirements to build the capacity of the national institutions that will be involved in the pilot cash transfer.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

48. Institutional and implementation arrangements for this project were driven by the need to deliver quick results on the grounds while building the government’s capacity to lay the building blocks for a well-targeted safety net strategy. Alternative options (discussed in Annex 3) were considered, and the implementation arrangements retained were deemed the most appropriate. The following actors will play a key role:

 A Safety Net Unit (Cellule Filets Sociaux - CFS) was established by ministerial decree (A/2012/1340/MEF/CAB/SGG) on March 9, 2012 to coordinate project implementation. The CFS is anchored within the Ministry of Economy and Finance (MEF) under the Poverty Reduction Strategy Paper (PRSP) Permanent Secretariat and will be comprised of two key staff: (i) a coordinator; and (ii) a monitoring and evaluation (M&E) specialist. A fiduciary team including a financial manager, an accountant, and a procurement specialist will be recruited competitively and according to terms and conditions satisfactory to the Bank before effectiveness. An internal auditor will be recruited no later than 4 months after effectiveness. The CFS will be the key interlocutor of the Bank on the project and will be responsible for: (i) entering into the required contractual/institutional arrangements with service provider(s) for the implementation of the pilot cash transfer; (ii) coordinating with the Project Coordination Unit of the PDU3 to ensure the implementation of component 1 of the Project; (iii) approving the annual work plan and budget of the contracted agencies; (iv) monitoring and evaluating

14 Hoddinott and Skoufias (2004). 15 Duarte Gomez et al. (2004).

19 activities; (v) consolidating progress reports and interim financial management reports submitted by the contracted agencies; and (vi) liaising with the national social protection group to ensure synergy with national social protection priorities.

 The PCU/PDU3 successfully implemented LIPW activities through a GFRP-funded emergency operation in Guinea; therefore, it will provide technical support to the CFS for the implementation of component 1 on LIPW and life skills development. This support will include assisting the CFS in: (i) recruiting local entrepreneurs who will execute the micro-projects; (ii) working with the local authorities, municipalities, and local entrepreneurs for beneficiary selection; (iii) working with the municipalities for micro- project selection, supervision, and evaluation; and (iv) supervising the office of national and professional training, which will be involved in the implementation of the life skills development. Prior to effectiveness, a Memorandum of Understanding will be signed between the MEF and the MUDH to clarify the roles and responsibilities of the CFS and the PCU/PDU3. The Ministry of Urban Development will amend the arrêté that created the PCU/PDU3 and the other structure involved in the implementation of the PDU3 (the Cellule de Voirie Secondaire) in order to allow these structures to provide technical assistance in the implementation of component 1. The roles and responsibilities of all involved in implementation will be specified in the implementation manual.

 UNICEF, the only actor with the capacity to effectively pilot a cash transfer of this scale and nature in the country, will be contracted as a service provider by the CFS to execute all activities related to component 2. UNICEF will work closely with the Ministry of Health, the Ministry of Education, the Ministry of Social Affairs, the Ministry of Interior, Administration of Territory and Decentralization, and other relevant national institutions. Sub-component 2.1 (the signature of the contract with detailed terms of reference, payment, and reporting modalities between UNICEF and the CFS) is a condition of disbursement of the actual cash transfers to the beneficiaries. Provisions for government capacity building will be included in the contract.

 Local Communities will be involved at different levels in project implementation, including beneficiary and micro-projects selection, project implementation, and monitoring and evaluation. A grievance system will be established and discussed in the Project Implementation Manual. This will provide a venue, systems, and mechanisms for beneficiaries and non-beneficiaries alike to share feedback on governance and accountability as per the provisions of the Governance and Accountability Plan included in Annex 7 of this PAD.

20 Implementation Arrangements

Ministry of Economy and Finances

Safety Nets Unit (in the PRSP Secretariat)

Project Coordination Unit/Urban UNICEF Development Project III

Municipal Council (LIPW) , Payment agencies and ONFPP (skills development), survey firms and local entrepreneurs

Beneficiaries Beneficiaries

B. Results Monitoring and Evaluation

49. The monitoring and evaluation (M&E) activities as well as the impact evaluation of the Guinea Productive Social Safety Net Project will be coordinated by the Safety Net Unit (CFS), more specifically, by its M&E specialist. The CFS will be responsible for supervising the consolidation and management of the different databases described below. Consultants will be contracted to support the development of these databases and the data collection processes for the impact evaluation. The consultants will also be responsible for the technical monitoring of the databases, which will be centralized in the CFS. The CFS will share the information with the World Bank to facilitate the monitoring of the project activities and to draw lessons from project implementation.

50. An M&E database will be established for each component to collect basic information on all beneficiaries. Once the project starts, more in-depth surveys will collect information on a sample of participants. The database for the public works programs will be designed to manage information collection during surveys that will be conducted through short questionnaires to be administered to workers, local entrepreneurs, and municipalities in each of the eight cities targeted. The database will also include the date and amounts received by each worker, along with the date of exit and reason for exiting. For the pilot cash transfers, a database will be established to include the list of beneficiaries in the targeted areas. It will also include information related to the eligibility of the beneficiaries, including levels of household poverty, a standard deviation of -2 for the age-to-height indicator, and school registration. The database will regularly be updated to include progress on anthropometric measures, school attendance, and amount and dates of transfers to the beneficiaries. For the nutrition sub-component, the list of participants at the EFP trainings will be included. The unique identification number of all beneficiaries will also be included to help reconcile different elements of the database.

51. The results monitoring framework will assess progress towards the PDO through key indicators. In addition, intermediate indicators will monitor the progress of each component

21 over the life of the project (Annex 1). For each component, the implementing agencies will use additional indicators to monitor progress towards improving human capital.

52. A robust evaluation of the pilot will be critical to inform the establishment of a Safety Net System (see Annex 3 on the M&E and impact evaluation strategy). The evaluation requirements were built into the project design to facilitate learning. For instance, areas of project intervention feature different ecological, social, and cultural characteristics. Moreover, differentiated transfer amounts will be tested in each village. The impact evaluation of cash transfers for child nutrition and girls‘ education will rely on a prospective design and include both a baseline and a follow-up survey with a random allocation of intervention units (villages for the nutrition sub-component and schools for the girls‘ education subcomponent) between control and intervention groups. A random allocation of the schools and villages that will be included in the control group (i.e., without intervention for the duration of the project) and of the intervention groups will be done by organizing a public lottery in the presence of the heads of villages and the directors of schools and health centers in order to facilitate the acceptance and credibility of the procedure. Randomization will also be used to allocate the different levels of transfer amounts. A workshop on the techniques of the impact evaluation will be held to present the different methods and the benefits of randomization. It will involve all of the different project stakeholders.

C. Sustainability

53. In the short run, donor funding will be essential to finance this intervention. Through its work program on social protection in Guinea, the Bank will look into three aspects of sustainability of the project.

 Fiscal sustainability: Currently, fiscal space is extremely limited. Nevertheless, providing adequate social services and contributing to job creation remains a key priority for the government. The institutional anchorage of this intervention in the Ministry of Economic and Finance (MEF) is indicative of the government‘s willingness to prioritize social protection and employment. The Bank will help the government research the fiscal implications of financing a safety net system entirely from its own budget. As mentioned in the economic analysis section, the high social returns to these investments justify public expenditures in these priority areas.

 Institutional sustainability: Project sub-component 2.1 includes several provisions to build the capacity of the government and key stakeholders in managing this type of intervention and laying the building blocks of a well-targeted safety net system. UNICEF will report to the CFS in the implementation of component 2, and will closely associate the relevant ministries in the technical design and execution of activities. The financial manager of the PCU/PDU3 will train his/her counterpart recruited in the CFS as a transfer of expertise and knowledge.

 Knowledge and technical expertise: Technical assistance provided through this structure will help key officials develop technical expertise on issues related to social protection and safety nets, an expertise which will remain at the service of the country after project end. Component 2 allows the country to experiment with an instrument that

22 has proven effective in comparable contexts. At the end of the project, Guinea will have developed a local knowledge base for this type of intervention, which could then be added to the menu of options to include in its social protection strategy.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Risk Rating Stakeholder Risk Low Implementing Agency Risk Capacity High Governance High Project Risk Design High Social and Environmental Low Program and Donor Low Delivery Monitoring and Sustainability High Overall Implementation Risk High

B. Overall Risk Rating Explanation

54. Overall risk rating for this project is High. The Operational Risk Assessment Framework (ORAF) attached in Annex 4 identifies and rates a set of risks that could prevent the achievement of the PDO. The main risks are as follows:

 Risks related to overall political stability: Although the outlook for political stability has improved markedly since the return to civilian government, the country's situation remains fragile and could deteriorate if economic programs and reforms are not properly implemented. Policy reforms, and in particular general subsidy reforms, produce losers and winners and depending on how vocal and politically strong the losers are, they may derail the process and in extreme cases this could lead to violence. The LIPW activities and the pilot cash transfers are expected to mitigate the impact of the reforms on the most vulnerable segments of the populations through an increase in income earning.

 Risks related to error, fraud, and corruption: Projects of this scope and nature are vulnerable to errors, fraud, and corruption. The likelihood of occurrence is high in Guinea where capacity is limited and corruption is fairly widespread. The project chose to mitigate these risks by adopting a Governance and Accountability Action Plan, which provides detailed mitigation measures for these risks, and will be enforced throughout the project life (see Annex 7). In addition, grievance mechanisms will be established as part

23 of the Project Implementation Manual (PIM) to empower communities to provide feedback on the project processes. Finally, UNICEF and the PCU/PDU3 have been selected for their technical expertise and their track record in implementing comparable interventions.

 Risks related to governance: To ensure a clear definition of the roles and responsibilities between the key institutions involved in the project, a Memorandum of Understanding between the MEF (for the CFS) and the Ministry of Urban Development and Housing (for the PCU/PDU3) and a contract between the CFS and UNICEF will be signed before the project starts. The PIM will also clearly define the roles of all involved, and trainings will be provided to project staff as needed to ensure a common understanding.

 Risks related to the capacity of the CFS: The MEF was selected to provide institutional anchorage for the project given its experience handling large amounts of funding for international donors, including the Bank. To address potential risks of delays in disbursement, fiduciary staff who are familiar with Bank procedures will be recruited competitively as a condition of effectiveness. The capacity of the PCU/PDU3 to provide technical assistance to the CFS for component 1 will be strengthened through recruitment of additional staff and equipment as needed. Regarding component 2, UNICEF‘s expertise on nutrition and education interventions is well established. The institution has also carried out cash transfers in other countries.

 Risks related to the capacity of the PDU3: The PDU3 was restructured in December 2011 in order to address a series of changes in the project implementation environment that contributed to the moderately unsatisfactory performance of the project. The restructuring facilitated the following: ((i) cancellation of solid waste management in Conakry and reallocation of the corresponding proceeds within the project; (ii) extension of project closing date from December 31, 2011 to June 30, 2013 to provide enough time for full completion of the revised program of activities; and (iii) revision of the project results framework to better account for realistic results attributable to the restructured project. The restructuring, which was preceded by the effective recruitment of a new project coordinator, is expected to benefit the proposed intervention. The PCU/PDU3 will contribute the strong technical expertise that it has developed through satisfactory implementation of the GFRP-financed Emergency response project which most closely resembles the proposed intervention.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

55. The public works interventions are expected to be cost-effective, with a labor intensity averaging 60 percent, an effective geographical targeting mechanism of poor neighborhoods, and a participatory and transparent mechanism for prioritizing micro-projects. The component is expected to generate 2.4 million person-days of work involving about 24,000 workers which translates into 140,000 persons (assuming 6 member household per worker). About 30 percent of the workers will be women. The wage transfer will be GNF 20,000-25,000

24 on average per day of work for a total of up to 100 days per year. This generates an estimated net income transfer of over GNF 53.4 billion in total. Using the 2007 poverty line and a U.S. dollar equivalent, the amount transferred under the project has the potential of reducing the poverty gap in urban areas by 12 percent. Factoring in the expenses related to non-labor inputs, administrative expenses, and profit for the contractors, the cost of transferring US$1 in net wage benefit to a public works beneficiary will be approximately US$1, which compares favorably with international practice.16

56. Micro-projects will create or rehabilitate the productive and social infrastructure of the participating communities thereby improving the quality of living. A total of 100 micro-projects worth over US$12.0 million of assets will be created through the LIPW component. The main works to be contracted include maintenance of tertiary roads, urban drainage repairs, water/sanitation quality improvement, and waste collection activities largely contributing to better living standards in poor neighborhoods. An estimated 500,000 people in the targeted areas will benefit from improved living conditions as a result of the infrastructures that will be rehabilitated through micro-projects. Municipal councils will ensure a high degree of community involvement in the selection of assets and in the oversight of the quality of assets created. This, in turn should increase the likelihood that the assets created generate collective return to the community.

57. Life skills development. About 5,000 youth participating in the LIPW will apply and be selected for the life skills development activities. Training activities will cover much needed areas as civic education, citizenship, the rights and responsibilities of workers, conflict prevention and resolution and national cohesion, hygiene and security in the workplace, HIV/AIDS prevention and treatment, team work, entrepreneurship, and, among others, democratic values.

58. Experimenting with a pilot cash transfer (CT) is a prudent choice. The pilot is designed to test the extent to which a CT intervention could help improve human capital by combating chronic malnutrition and girls dropping out of primary schools. It is also an effective way to test the design parameters, including delivery mechanisms and institutional arrangements, in a country that does not have experience with the instrument. As explained in the section on lessons learned, CTs conditioned on education and nutrition have led to desirable changes in human development outcomes in many countries. In the case of Guinea, a rural household spends a significant amount of direct and opportunity cost on education with a significant bias towards boys‘ education. By promoting household behavioral changes, this instrument has the potential to improve the existing gender imbalance observed in Guinea‘s educational indicators as well as influence other aspects like early marriage and teenage pregnancy. Similarly, malnutrition is linked to physical and financial accessibility to food and CCTs may also trigger changes in nutrition and health status. The planned impact evaluation will provide information on the human development outcomes of the pilot CT and based on the observed results, the intervention may be scaled up as a follow up intervention.

16 For example, the cost of transferring US$1 to workers, taking into account salaries, non-labor inputs, administrative costs, and profit made by the local contractors was US$1.50 in Ethiopia, US$1.61 in Madagascar, US$1.96 in Sierra Leone, and US$2.14 in the Democratic Republic of Congo.

25 59. The project is financially affordable. It could be scaled up in the longer term without increased fiscal resources. The proposed intervention will help the government develop a vision for social protection, explore the feasibility to establish a safety net system, and build local institutional capacity to formulate policies and design and implement projects in this area. Once a safety net system is in place, the government would be less inclined to use other measures like general price subsidies, which are regressive and fiscally unsustainable. Indeed, the savings from price subsidy reforms could be used for targeted safety net interventions. According to International Monetary Fund (IMF) estimates, Guinea currently spends over 2 percent of GDP on subsidies. The total budget envelope of US$25.0 million over five years represents less than 0.5 percent of 2011 GDP. Based on international experience, most countries that have a safety net system generally spend about 1 percent of GDP per year. In the case of Guinea, this would represent a budget envelop of US$46.0 million. Additional resources from HIPC and mining activities as well as savings from price subsidy reforms should be able to provide the fiscal space for the respective investment in human capital and protection of the poor.

B. Technical

60. The design of the youth-targeted public works and life skills development as well as the cash transfer pilot conforms to international best practices. These components have been designed to : (i) be cost-effective and efficient in terms of beneficiary identification and subsequent enrollment; (ii) provide an adequate benefit level or sum that does not create dependency or disincentives to work; (iii) deliver benefits and payments with relative ease; and (iv) facilitate a well-balanced system for managing information and monitoring and evaluating data. All of these aspects will be supported under components 1 and 2 of the proposed project, and a rigorous impact evaluation for the pilot will be conducted.

C. Financial Management

61. In line with the Financial Management Manual for World Bank-financed Investment Operations that entered into effect on March 1, 2011 and the ORAF framework, a financial management (FM) assessment of the project implementing entities (CFS and PCU/PDU3) was performed. The objective of the assessment was to determine whether the implementing entities have adequate FM capacity to ensure that: (i) project funds will be used for their intended purposes in an efficient and economical way; (ii) financial reports will be prepared in an accurate, reliable, and timely manner; and (iii) project assets will be safeguarded.

62. Based on the recommendations from the assessment, FM arrangements for the Productive Social Safety Net project will be coordinated by the CFS, which will carry overall fiduciary responsibility for the project.

63. The overall FM risk rating of the project at the preparation phase is considered High, and is expected to be Substantial after the implementation of mitigation measures. The FM arrangements, subject to the effective implementation of mitigating measures, are considered adequate and fulfill the OP/BP 10.02 requirements. These mitigating measures consist mainly of: (i) recruitment of a financial manager and an accountant with qualifications and experience satisfactory to the Bank to be located at the CFS before project effectiveness; (ii) recruitment of

26 an internal auditor no later than 4 months after effectiveness; (iii) design of an administrative, accounting, and financial procedures manual with a clear segregation of duties to be approved by the Bank before project effectiveness; (iv) installation of a computerized information system to ensure the financial management of the project activities; and (v) recruitment of an independent external auditor not later than four months after effectiveness, to ensure that annual audit reports are prepared and transmitted to the World Bank in a timely manner. The detailed FM arrangements are described in Annex 3.

D. Procurement

64. Country Procurement Assessment and Reform (CPAR) status: A CPAR, carried out in Guinea in February 2002, flagged such key procurement issues as the limited capacity of government staff, the absence of standard bidding documents at the national level, the insufficient capacity of local contractors for contracts subject to international competitive bidding (ICB), and the common occurrence of corruption. Recommendations were made to address these issues. The Bank, through an Institutional Development Fund (Trust Fund No. 55853) signed in November 2005, provided support for public procurement reforms. The main objectives were to: (i) enhance transparency of the procurement system; (ii) put in place the new institutional framework (public procurement directorate controlling procurement transactions, public procurement regulatory body including an appeals committee for complaints; (iii) update the procurement code; and (iv) design standard bidding documents. On March 2009, the legal framework was revised and the procurement law and the new procurement code were drafted and subsequently validated on September 2011 by a national workshop comprising the representatives of government, civil society, and the private sector. The documents were expected to be approved by the government and by the National Transitional Council by end of March 2012.

65. The following Bank guidelines will apply: (i) ―Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants‖, dated October 15, 2006 and revised in January 2011; (ii) ―Guidelines on Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers‖ dated January 2011; and (iii) ―Guidelines on Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers‖ dated January 2011 will apply.

66. Capacity assessment, risk and mitigation measures: The procurement capacity of the Ministry of Economy and Finance (MEF) and the Ministry of Social Affairs, Women, and Children (MSAWC) was assessed during project preparation. The assessment reviewed the organizational structure for implementing the project, taking into account a number of actors and stakeholders. It was agreed that the government would establish a Safety Net Unit (CFS) in the MEF under the Permanent Secretariat of the PRSP to coordinate project implementation. The fiduciary, financial management and procurement functions of the project will be managed by the CFS. In addition, the CFS will rely on the PCU/PDU3 for technical assistance in implementing component 1, and on UNICEF for component 2. CFS responsibilities will include: (i) coordination and quality assurance of all contracting documents; these are expected to include tender documents, request for proposals, MOUs, and contracts; (ii) regularly updating the

27 Procurement Plan in close collaboration with the PCU/PDU3; and (iii) processing and submitting to the Bank all requests for non-objection with respect to tenders and contracts.

67. Several potential risks were identified during the procurement capacity assessment. These include: (i) poor governance associated with the multiplicity of actors involved; and (ii) delays in implementation due to the lack of familiarity of the CFS staff with the Bank‘s procurement procedures. In addition, all the members of the procurement commission are not familiar with international procurement procedures, and could ostensibly obstruct or delay the procurement process, especially the evaluation of bids and consultant proposals. The mitigation measures recommended are: (i) prior to effectiveness, recruit one procurement officer for the CFS who will be responsible for all procurement activities envisaged; (ii) elaborate an administrative, accounting, and financial procedures manual, including a procurement section that clearly defines the roles and responsibilities of each actor in the procurement process prior to effectiveness; (iii) strengthen the capacity of the fiduciary team on World Bank procurement and consultant guidelines four months after project effectiveness and as needed during the project‘s life; and (iv) put in place an effective filing system.

68. The overall procurement risk has been rated Substantial.

Procurement Action Plan

Action To Be Undertaken Time-Frame Responsible Body

1. Recruit a procurement officer Before effectiveness Safety Net Unit (CFS) coordination 2. Finalize and submit the Before effectiveness CFS coordination administrative, accounting, and financial procedures manual to include a detailed procurement section 3. Strengthen the capacity of the project Four months after CFS coordination with fiduciary team and the procurement project effectiveness Bank procurement commissions on the Bank and as needed during staff if need be procurement and consultant the project life guidelines

E. Social (including Safeguards)

69. Social impacts of the project are expected to be overly positive, as the intervention seeks to generate employment for youth in urban areas through labor intensive public works (LIPW) and improve the human capital of the poor in rural areas. The income support provided is expected to help targeted households improve access to basic social services as well as invest in productive assets. Trainings in the eight essential family practices are designed to stimulate long term changes that will positively contribute to the improved nutrition status of children. Risks of conflicts exist if the targeting process is not perceived as transparent and inclusive. In order to minimize possible tensions, the Project Implementation Manual will set clear criteria and transparent procedures for beneficiary selection and registration. For the cash transfer (CT) pilot,

28 in order to avoid envy and social tensions, objective criteria (chronic malnutrition and high dropout rates of girls) have been chosen to identify beneficiaries among the poor households. The potential negative impact of the LIPW is marginal given the scope and the nature of the sub- projects to be undertaken. Indeed, these projects will not exceed the ceiling of US$100,000 per micro-project and will include street and canal cleaning, filling potholes, construction of drainage, and small works to prevent flooding, cleaning of culverts, rock breaking for the roads, maintenance, rehabilitation, and construction of key community infrastructure including markets, public latrines, open spaces and gardens, and other activities in the inner city with the goal of improving community living. However, to mitigate all potential risks associated with resettlement and compensations, in particular as the nature and locations of the LIPW micro- projects are unknown, a Resettlement Policy Framework (RPF) was prepared and disclosed in- country on April 9, 2012 and on May 2, 2012 at the Infoshop.

F. Environment (including Safeguards)

70. The project falls under environmental classification B, primarily because the labor intensive public works may only have a limited and localized environmental and social impact. The World Bank safeguard policy 4.01 on environmental assessments was triggered because of the activities associated with the LIPW. The appropriate safeguards instruments, an Environmental and Social Management Framework (ESMF), was prepared and disclosed in- country and at the Infoshop on April 9, 2012 and April 30, 2012, respectively. The implementing agency is expected to use Bank screening procedures contained in the ESMF to identify, assess, evaluate, mitigate, and monitor the impact of the LIPW sub-projects on the environment. These assessments will involve consultations with key stakeholders and will inform the design of specific Resettlement Action Plans (RAP) and Environment Management Plans (EMP) when necessary. Once the action plans have been drafted, public consultations will be held, and community systems to handle grievances will be established. All key stakeholders will be sensitized and trained on the mitigation measures. Further details are provided in Annex 3.

29

Annex 1: Results Framework and Monitoring

Country: Guinea Project Name: Productive Social Safety Net Project (P123900) Results Framework . Project Development Objectives PDO Statement The Project Development Objective (PDO) is to provide income support to vulnerable groups and to lay the foundations of a social safety net strategy by testing some of the building blocks necessary for a larger system. . Project Development Objective Indicators Cumulative Target Values Data Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End Target Frequency Methodology Data Collection Beneficiaries of CFS Quarterly and Safety Nets Number 0.00 0.00 12317 21070 29010 30000 consolidated CFS annual programs (number) reports Beneficiaries of Safety Nets programs - Cash- Number 0.00 0.00 8317 13070 19010 24000 for-work, food-for- work and public works (number) Beneficiaries of Safety Nets programs - Number 0.00 0.00 4000 8000 10000 10000 Unconditional cash transfers (number) Beneficiaries of CFS Quarterly and Safety Nets Number 0.00 0.00 4926 8428 11604 13600 Consolidated CFFS annual programs - Female reports

30 (number) Beneficiaries CFS Quarterly and enrolled in life skills Number 0.00 0.00 1000 3500 4500 5000 consolidated CFS annual development reports People with access to sensitization on CFS nutrition, health, Quarterly and Number TBC TBC TBC TBC TBC TBC Consolidated CFS sanitation, and annual reports education campaigns17 People with access CFS Quarterly and to improved Number 0.00 0.00 100000 350000 450000 500000 consolidated PCU/PDU3 annual infrastructures reports Findings from the impact evaluation of the pilots are CFS discussed and Yes/No No No No No No Yes Once Consolidated CFS incorporated in the reports social safety net strategy . Intermediate Results Indicators Cumulative Target Values Data Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End Target Frequency Methodology Data Collection CFS Person days of work Quarterly and Number 0.00 0.00 831696 13069500 1901019 2400000 consolidated PCU/PDU3 provided annual reports CFS Wages distributed to Quarterly and Amount(USD) 0.00 0.00 26608 4181250 6081818 7602272 Consolidated PCU/PDU3 workers annual reports Basic socio- Quarterly and CFS Number 0.00 0.00 50 100 150 200 PCU/PDU3 economic annual consolidated

17 Will be updated prior to the implementation of the pilot cash transfer

31 infrastructures reports rehabilitated/constru cted/maintained to benefit poor neighborhoods of targeted cities (to be broken down by the 5 sub-indicators below) Market places CFS Annual and constructed and Number 0.00 0.00 0.00 0.00 0.00 0.00 consolidated PCU/PDU3 quarterly improved reports CFS Annual and Drainage cleaned Number 0.00 0.00 0.00 0.00 0.00 0.00 consolidated PCU/PDU3 quarterly reports CFS Latrines constructed Annual and Number 0.00 0.00 0.00 0.00 0.00 0.00 Consolidated PCU/PDU3 and rehabilitated quarterly reports CFS Roads rehabilitated Quarterly and Number 0.00 0.00 0.00 0.00 0.00 0.00 consolidated PCU/PDU3 non rural annual reports CFS Roads constructed Quarterly and Number 0.00 0.00 0.00 0.00 0.00 0.00 consolidated PCU/PDU3 non rurals annual reports Public works CFS programs completed Quarterly and Percentage 0.00 0.00 80.00 85.00 90.00 90.00 consolidated PCU/PDU3 with satisfactory annual reports technical quality Registered CT CFS Quarterly and households who are Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF annual receiving the CT reports Registered CT CFS households who are Quarterly and Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF receiving the CT for annual reports education

32 Registered CT CFS households who are Quarterly and Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF receiving the CT for annual reports nutrition CT Beneficiaries CFS Quarterly and complying with Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF annual requirements reports CT for education CFS beneficiaries Quarterly and Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF complying with annual reports requirements CT for nutrition CFS beneficiaries Quarterly and Percentage 0.00 0.00 85.00 90.00 95.00 95.00 consolidated UNICEF complying with annual reports requirements A central database CFS to manage the list of Quarterly and Yes/No No No Yes Yes Yes Yes consolidated CFS beneficiaries is annual reports established Consolidated reports CFS Quarterly and are submitted to the Yes/No No No Yes Yes Yes Yes consolidated CFS annual WB on schedule reports Rapid beneficiary CFS satisfaction surveys Consolidated Yes/No No No Yes Yes Yes Yes Annual CFS conducted on an reports; Survey annual basis reports .

*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators) **Target values should be entered for the years data will be available, not necessarily annually

33

Annex 2: Detailed Project Description Guinea: Productive Social Safety Net Project

1. The Project Development Objective (PDO) is to provide income support to vulnerable groups and to lay the foundations of a social safety net strategy by testing some of the building blocks necessary for a larger system. More specifically, the project will: (i) implement a labor intensive public works program (LIPW) and life skills development in urban areas targeted at youth to rehabilitate and construct critical urban infrastructure and create short term employment; (ii) pilot two cash transfer projects to improve human capital in rural areas; and (iii) strengthen the institutional capacity of the government to design and coordinate social safety net interventions.

Component 1. Labor intensive public works programs in urban areas with a focus on youth and life skills development (US$16.5 million - Total costs including contingencies).

2. Overview: This component comprises two sub-components: (i) temporary employment creation in urban areas focused on youth to increase their income and improve local community assets; and (ii) provision of complementary life skills development.

Sub-component 1.1: Temporary employment opportunities (US$15.5 million- Total costs including contingencies)

3. Sub-component 1.1 will scale up LIPW activities ongoing under the Bank-funded Urban Development Project 3 (Project de Développement Urbain - PDU3). The main objective is to create short term jobs and thus a source of income-generation for youth in major urban centers through the execution of small-scale micro-projects requiring use of unskilled and semi-skilled labor. The project is expected to provide direct, short term employment to 24,000 beneficiaries via LIPW while creating or rehabilitating community assets in poor neighborhoods.

4. On average 600,000 work days per year will be created, for a total of 2.4 millions working days over the duration of the project. It is projected that this will provide additional income of GNF 53.4 billion by the end of the project.

5. Level of wages: Wage levels have been set at GNF 20,000-25,000 (est. US$3-4) on average per day, depending on the areas of operation and their respective market rates. The rates are aligned with the wages paid by similar ongoing interventions under the PDU3 and the new European Union funding for LIPW. It is slightly below the market rate for unskilled workers, which is expected to deter participation from the less vulnerable.

6. Eligible activities: The list below provides a menu of activities that could be carried out under the LIPW. A sensitization campaign will be conducted before activities start to ensure that the quota of women comprising 30 percent of the workers is met. Some women will be recruited to look after the children of other female workers at the project site, in order to reduce one of the constraints inhibiting the participation of women. A list of eligible micro-projects that is considered conducive to the participation of women is found below and includes:

34  Cleaning streets and canals  Filling potholes  Paving streets and public places  Painting and upgrading community buildings  Rehabilitation of public gardens  Constructing and rehabilitating gutters  Small works to prevent flooding  Cleaning or rehabilitating culverts  Maintaining, rehabilitating, and constructing key community infrastructure, including commercial infrastructures (e.g., markets)  Constructing and rehabilitating public latrines  Other activities that contribute to improving the environment in urban areas

7. Timeframe for the implementation of LIPW activities: Given that these activities will take place in urban areas, the agricultural calendar does not need to be taken into consideration for their planning. However, other factors such as the rainy season (June to November) have been considered in proposing the calendar below.

Table A2.1 Proposed Annual Implementation Schedule of the LIPW Component Step/Project Cycle Period/Month Lead Sensitization campaign on the Before, during, and after micro- PCU/PDU3 objective of the intervention, project implementation target groups, types of micro- projects, and implementation mechanisms Expression Of Interest (EOI) for After an information campaign PCU/PDU3 consultant services in view of targeting small and medium establishing the shortlist of pre- enterprises, women‘s groups, and qualified local entrepreneurs NGOs. The pre-qualification list will be updated once a year while the micro-projects are being designed. These activities will be conducted during the rainy season each year (July-Sept.) Selection and signing of contract Before submitting micro-projects PCU/PDU3 with pre-qualified local proposals (rainy season, July- consultant firms for the Sept.) identification of the micro- projects and technical studies Contracting with local consulting Before submitting the proposal CFS firms packages Mission in partnership with the Once a year: June-July PCU/PDU3 communal authorities to identify micro-projects based on the local development plans and needs expressed

35 Micro-project identification, After recruitment of the local Local consultant firms in followed by a transmission of the consultant firms consultations with local youth micro-projects proposals to the associations, with assistance PDU3 by local consulting firms from the communes and technical services of the Ministry of Urban Development and Housing (MUDH). The PCU/PDU3 will elaborate a proposal template. Micro-projects selection by the Once a year after the recruitment PCU/PDU3 PCU/PDU3 and validation by the of the local consultant firms local authorities Project design After validation of the proposed Local consultant firms in micro-projects partnership with local youth associations with assistance from communes and technical services of the MUDH. The PCU/PDU3 will issue sample procurement packages for shopping and Calls for Proposals Procurement including issuance After project design CFS of Calls for Proposals to recruit the local entrepreneurs responsible for micro-project execution Execution of activities and During the dry season Local entrepreneurs monitoring Payment of local entrepreneurs Upon submission and approval of CFS accounting documents End of micro-projects 4-5 months after the beginning of PCU/PDU3 and municipalities the micro-projects

8. Role of agencies involved in micro-project execution: Urban municipalities (communes urbaines) will facilitate (maitrise d’ouvrage) the execution of the micro-projects. They will be involved in:

 Identifying micro-projects based on a template and eligibility criteria specified in the implementation manual and transmitted by the PCU/PDU3  Submitting micro-project proposals to PCU/PDU3 for verification and approval  Participating in worker selection in collaboration with urban neighborhoods  Supervising the work with guidance from the MUDH (for municipalities in regional capitals) and from the Technical Units of the city and municipalities (for Conakry)

9. For cities other than Conakry, local consulting firms recruited with technical support from the PCU/PDU3 will be mandated to conduct the technical assessment and supervision of the micro-projects. They will report to the PCU/PDU3. The consulting firms will be involved in the preparation of technical proposals and the EOI to recruit the local entrepreneurs. They could take part in the evaluation of the offer in accordance with procurement guidelines.

36 10. In Conakry, the Regional Directorate of Urban Development and Housing (DRUH) will assume the roles and responsibilities described above in partnership with the technical services of the commune. The PCU/PDU3 will play a coordinating role through the following tasks:

 Micro-project approval in consultation with communal authorities  Transmitting project proposals for technical studies and tenders to the DRUH or the City of Conakry  Payment of local enterprises by the CFS based on accounts submitted  Collection and analysis of information on the public works  Provision of all technical, financial, and social reports

11. Selection of local entrepreneurs: Local entrepreneurs will be selected through a tender process conducted by the relevant procurement commission. They will be responsible for:

 Participating in the recruitment of eligible youth with the support of the targeted municipalities/districts  Executing the work  Signing contracts with all workers, and cancelling contracts based on the worker‘s performance  Providing tools and other equipments needed for the execution of the work  Paying workers  Transmitting payroll documents and progress reports to the PCU/PDU3 through the DRUH for Conakry, and the prefectoral services for other regional capitals

12. Selection of contractors: Contracts will be awarded to the bidder who meets all the social (jobs created), technical, and financial requirements of the project and whose bid has been determined: (i) to be substantially responsive to the bidding documents; and (ii) to offer the lowest evaluated cost. Procurement will be done through the relevant procurement commission. The project will encourage participation from small local enterprises, NGOs, and women groups by launching a communication campaign targeting these groups before issuing bidding documents.

13. Micro-project selection and design: The micro-projects will be selected by the municipalities in consultations with neighborhood leaders or their representatives. Each urban municipality (commune urbaine) will supervise the execution of the micro-projects in their respective areas. The recruited local consultant firms will propose a simple technical design, using standard plans to allow for extensive use of unskilled labor. Each micro-project should not exceed US$100,000. To promote the participation of women in the public works projects, a quota of 30 percent women workers has been set.

14. Beneficiary targeting: This component will primarily target unemployed or underemployed people of at least 18 years old that are able-bodied and willing to work in high intensity manual activities in urban centers. Targeting will occur at the geographical level and at the community level based on the poverty indicators discussed below.

 Selection of cities, communes and neighborhoods: The five communes in Conakry and the seven regional capitals (Boké, Faranah, Kankan, Kindia, Labé, Mamou, and

37 N'Zérékoré) were selected given their high levels of demographic pressures and accelerated degradation of living conditions. The municipalities will identify the specific communes and neighborhoods to be targeted. Slums and other areas that are particularly disadvantaged will be prioritized. The allocation of resources will take into consideration the intervention zones of EU-financed labor intensive public works projects. An estimated US$3 million will be allocated to Conakry as the capital city to complement the resources allocated by the EU and given the large concentration of people. All other regional capitals will receive at least US$1.0 million. The remainder will be distributed among the regional capitals based on population size. The table below summarizes the proposed resource allocation per city.

Table A2.2 Resource Allocation per City for LIPW* City Population 2007 Total

Labé 74,000 1,000,000 Mamou 86,000 1,000,000 Faranah 148,000 1,500,000 Kindia 199,000 1,500,000 Kankan 214,000 1,500,000 Boké 231,000 1,500,000 N'Zérékoré 298,000 2,000,000 Conakry 1,726,000 3,000,000 Total 2,976,000 13,000,000 Note: * Administration and delivery cost estimated at 15 percent not included.

 Identification of beneficiary households: The PCU/PDU3, local authorities, and representatives from the community will be involved in the worker selection process. An information campaign will be conducted to educate the public about the project and beneficiary registration, as well as to encourage women to participate in the project. Workers will be selected among unemployed/underemployed residents who are at least 18 years old in the targeted districts. The lower wage rate is expected to discourage the less vulnerable from participating. However, if demand for labor exceeds supply, additional targeting criteria will be applied in order to: (i) include the maximum number of vulnerable households; and (ii) limit the enrollment to one worker per household. These criteria will include being at least 18 years old, a resident in the neighborhood targeted, not having another source of income, household size, etc

15. Enrollment of workers: The local entrepreneurs will enroll selected workers, register their information, and sign contracts. Upon finalization, the list of workers will be shared with the PCU/PDU3 for validation, which is required before the project can start.

16. Payment of beneficiaries: Beneficiaries will be paid in cash by the entrepreneurs at intervals that are agreed and stipulated in the contracts. Records from payments will be shared with the PCU/PDU3. At the signing of contracts, the CFS will pay the contractors an advance of

38 20 percent of the total contracts signed. This will provide assurance of timely payments for the labor input. These payments will be made by the CFS.

Sub-component 1.2. Life skills development for youth(US$1.0 million - Total costs including contingencies)

17. Overview: This sub-component will finance life skills development programs for LIPW beneficiaries with the purpose of providing complementary skills and knowledge to the youth, in order to facilitate their socio-economic insertion. Over the span of five years, this sub-component will support a total of 5,000 youth among the 24,000 LIPW participants. Participants will be trained in civic education, environmental protection, the rights and responsibilities of workers, conflict resolution, HIV/AIDS prevention, management, entrepreneurship, etc… Cohorts of 25 participants will be organized in groups and attend 5-10 day training cycles.

18. Selection of beneficiaries: The PCU/PDU3 will pre-select eligible youth based on the list of LIPW beneficiaries submitted by the local entrepreneurs. Selection criteria will include: (i) age: youth aged 18-30 years old; (ii) basic education and ability to benefit from the training; (iii) commitment: required to have completed the LIPW with maximum levels of attendance. All pre- qualified beneficiaries will be requested to submit a letter of interest to the PCU/PDU3. The final list will be validated by the PCU/PDU3 in consultations with the CFS. All eligible women will be given priority admission into the program.

19. Implementation arrangements: The PCU/PDU3 will provide technical support to the CFS for the implementation of this component, which will be executed by the National Office for Professional Training (ONFPP). The ONFPP will oversee: (i) the development and finalization of a curriculum in consultation with the relevant private sector associations and partners; and (ii) the selection of qualified training centers (based on a capacity assessment) and the consultants to deliver trainings in Conakry and the regional capitals. Beneficiaries will receive a daily stipend during the training and a certificate upon completion of training.

20. Component 2: Pilot cash transfer program to protect human capital (US$4.5 million - Total costs including contingencies)Overview: This component aims at piloting a cash transfer to improve human capital and lay the foundations for effective actions that could break the intergenerational transmission of poverty by focusing on child nutrition and girls‘ education in rural areas. This component will have three sub-components: (i) pilot design; (ii) pilot CT for child nutrition; and (iii) pilot CT for girls‘ education. In addition, the pilot will include accompanying measures such as trainings and awareness-raising to maximize the impact of the cash transfer.

21. Implementation arrangements: UNICEF, as the only agency with the national network of local institutional infrastructure and the technical capacity required to rapidly facilitate one of the first cash transfer interventions for nutrition and education in the country, will be contracted by the CFS to execute this pilot CT. It will work in partnership with relevant partners, including the Ministries of Health, Education and Social Affairs to facilitate this pilot.

39 Sub-component 2.1: Design of the pilot project

22. Sub-component 2.1 will consist of signing the contract with UNICEF, which will include detailed terms of references, expected deliverables, and modalities of payments and reporting. In addition, this sub-component will finance the elaboration of a technical Annex on targeting, beneficiary selection, registration, and payment methods for the pilot cash transfer, as a first step towards the establishment of cash transfer systems. This technical Annex will be inserted in the Project Implementation Manual (PIM). The partnership will guarantee the quality of the pilot and will provide a framework to strengthen the capacity of national institutions.

Sub-component 2.2: Pilot cash transfer for nutrition (US$2.25 million - Total costs including contingencies)

23. Description: This sub-component will provide small, regular cash transfers to 5,000 rural households whose children are affected by chronic malnutrition (-2 standard deviation for the age-to-height indicator). This intervention, combined with participation of the beneficiaries in trainings and awareness campaigns on essential family practices in health, education, and nutrition, is expected to improve access and utilization of food, thus improving human capital.

24. Identification of regions and prefectures: This pilot operation will take place in at least two administrative regions with high chronic malnutrition rates, Kankan and Labé. Within these regions, the prefectures of Koubia and Mandiana, where the chronic malnutrition rate is the highest will be selected. Four sub-prefectures that feature different socio-cultural and agro- ecological characteristics will be retained within these prefectures to inform the impact evaluation of the pilot. In each region, the governors and the prefects in partnership with the relevant technical departments will nominate technical staff, who will be responsible for identifying the villages and communities to be targeted in partnership with UNICEF. This staff will participate in all sensitization and information campaigns of the project, and will be involved in project supervision and oversight. The rural mayor‘s office will also play a key role in the final selection of villages. In addition to being involved in project implementation, they will also take part in the communication and sensitization campaigns to provide information about the project to the communities.

25. Identification of beneficiaries: After the villages have been selected, a baseline survey will be conducted to identify eligible beneficiaries and create a composite list. The survey will be premised on: (i) age, 0-24 months; (ii) chronic malnutrition, -2 standard deviation for the age-to- height indicator; and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households that are considered vulnerable but were not identified by the survey. The final list of beneficiaries will be shared publicly with the communities.

26. Registration process: UNICEF will lead the registration process by ensuring that data on all of the beneficiaries from the final list are entered into a database. In addition, UNICEF will facilitate the production of ID cards that will include the name, photo, personal information, and ID number of each mother whose children are targeted. The names of benefitting children also will be included. The registration and distribution of picture ID cards will take place in the

40 presence of village representatives, commune officials, and the community health workers. The picture IDs will be used by women to collect the cash payments. It is a critical document that is expected to help ensure transparency and protect participants against fraud.

27. Amount, frequency, and duration of the monetary benefit: Differentiated amounts will be tested for the purpose of the impact evaluation. Beneficiary households will receive the equivalent of US$7, US$14, or US$21 per child per month for 18 months. The selection of the amount that each household will receive will be made through a public lottery in the village. The total allocation per household will be based on the number of children to be targeted with a maximum of two eligible children per household. An estimated 5,000 children will be targeted for 18 months. The transfers will be given to women as representatives of their households once every two months, and are expected to increase the level and quality of food consumption.

28. Implementation approach: The pilot phase, including training on essential family practices (see paragraph 30 below), will be first conducted through a start up phase, with two villages being registered, targeted, and paid. After a joint GoG-UNICEF-Bank mission validates the approach and methodology, the pilot will be scaled up to other regions. It will be implemented as follows:

 Carry out information campaign  Randomly select two villages for the start up phase  Identify, register, and distribute one round of payments to beneficiaries  Test the monitoring system  Carry out a joint GoG-UNICEF-Bank review mission  Scale up project to the selected pilot regions and pay all beneficiaries for a total of 18 months; beneficiaries paid during the test period receive benefits for 16 additional months  Conduct the impact evaluation

29. Payment system: UNICEF will recruit payment agencies (micro-finance agencies or NGOs) based on their capacity, integrity, and network coverage as well as the traceability of funds from start to finish.

30. Accompanying measures: Information and awareness-raising campaigns on health and nutrition practices will accompany the cash transfers to maximize their impact on the improvement of human capital. All households in the targeted communities (CT beneficiaries and non-beneficiaries alike) will participate in community activities to induce behavioral change both at the household and at the community level; participation of CT beneficiaries in the trainings will be recorded. Participation for CT beneficiaries will be mandatory and will be recorded and monitored. Community activities will include strong and well-integrated communication events, using both new and old media, including an image box, sketches, singing sessions, and animations. The trainings on essential family practices (EFP) will include:

 Breastfeeding exclusively for the first six months of a child‘s life  Sleeping under a mosquito net  Providing children with oral rehydration solution in case of diarrhea  Washing hands with soap

41  Introducing other nutritious foods to children after six months  Bringing children to a health post at the first sign of illness  Family planning and birth spacing  Stimulating young infants

31. The awareness campaigns will be implemented by the community health workers who will monitor improvements in the nutritional status of the malnourished children of targeted households. The community health workers will work with relevant institutions (Ministries of Social Affairs and Health, etc.), and will report to the communities and regional UNICEF office. They will conduct home visits to provide advice on meals and take monthly anthropometric measurements for children under five years old to assess their nutritional status. UNICEF will train the community health workers as part of this project.

32. Ensuring compliance: Children will be monitored for improvement in their nutritional status. Beneficiary mothers whose children do not show improvement after the first payment will be subject to close monitoring by the community health workers. Support and advices will be provided to reverse the trend. If the nutritional status of the child worsens or does not improve due to health conditions, the child will be referred to the nearest health center or to other UNICEF programs (for acute malnutrition, for instance). If the stagnation or deterioration in the health status of the child persists after the third payment and is linked to poor utilization of the transfers, the targeted household will be suspended from the program. Suspended households will have the option to reintegrate the program. However, they will have to request UNICEF to assess changes in the anthropometric indicators of the formerly targeted children..

33. Management Information System: UNICEF will design and implement a simple MIS to ensure transparent identification and registration of the targeted beneficiaries and their timely payment. An external random control of anthropometric measures of the children will be regularly conducted.

Sub-component 2.3: Pilot cash transfer for girls’ education (US$2.25 million - Total costs including contingencies)

34. Description: This component will provide cash transfers to about 5,000 girls in grades five and six, with the aim to improve girls‘ retention and reduce their dropout rates, thus contributing to the improvement of human capital and furthering gender parity in school.

35. Identification of regions and prefectures: This pilot will take place in three regions where the enrollment rate is very low among the poorest quintile of the population, namely Boké, Kankan, and Labé. In each of these regions, the four prefectures with the lowest gross completion rate for girls and the highest girls‘ dropout rate (namely, Gaoual, Mandiana, Kerouane, and Koubia) have been selected. Within these prefectures, the sub-prefectures and villages will be identified based on the above indicators. A committee including representatives from the Parent–Teacher Associations, the Ministry of Primary Education, the delegation of primary education, and the Rural Development Communities (Communautés Rurales de Développement - CRD) will be established to select the schools that will benefit from the project. This committee will compile a list of eligible schools featuring locations where girls‘ dropout rates are relatively higher than that of boys.

42 36. Identification of beneficiaries: After the villages have been selected, a baseline survey will be conducted to identify eligible beneficiaries and create a composite list. The survey will be premised on: (i) households with girls enrolled in the third to sixth grade of primary school; (ii) households with girls of age to benefit from the program (girls who have left school for more than one academic year will be eligible, provided that they are at least 12 years old for the fifth grade and 13 years old for the sixth grade); and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households (to be determined in the next phase) that are considered vulnerable but were not identified by the survey. The final list of beneficiaries will be shared publicly with the communities.

37. Registration process: UNICEF will lead the registration process by ensuring that data on all beneficiaries is entered into a database. In addition, UNICEF will facilitate the production of ID cards which will include the name, photo, personal information, and ID number of each mother whose children will be targeted. The names of benefiting children will also be included. The registration and distribution of ID cards will take place in the presence of the PTA and the Committee of Mothers of Girl Students (Comité des Mères des Elèves Filles - COMEF). The picture IDs will be used by the women to collect the cash payments. It is a critical document that is expected to help ensure transparency and protect participants against fraud.

38. Amount, frequency, and duration of the monetary benefits: Differentiated amounts will be tested for the purpose of the impact evaluation. Hence, each household will receive the local equivalent of US$7, US$14, or US$21 per child per month until the end of their sixth grade school year. The selection of the amount that each household will receive will be made through a public lottery in the village. A maximum number of two girls will be targeted per eligible household. The payments will be made at the beginning of each school term for a total of three payments per school year.

39. Means of verification and corrective measures: Under the supervision of the principals and school heads, the teachers will document school attendance of the beneficiaries. Supervisors from the Ministry of Education will regularly double check these documents to confirm their accuracy. Students who miss school for more than 10 percent of any given term without any acceptable justification (as determined by the PTA) will have their next installment cancelled. Students who miss a term or drop out of school without an acceptable justification will be dropped from the program.

40. Implementation approach: Beneficiaries registered in fifth grade will receive the allocation for two years. Beneficiaries in sixth grade will receive the allocation for a year. During the project‘s second year, beneficiaries in fifth grade will only participate for a year given the duration of the pilot.

41. Payment systems: Similar to project component 2.2, payments will be effected by the payment agencies (micro-finance or NGOs), which will be recruited by UNICEF. Parents will collect their transfers at the schools at the beginning of every school term.

43 42. Management information system: UNICEF will design and implement a simple MIS to ensure transparent identification and registration of targeted beneficiaries and their timely payment. Random external controls of the girls ‗attendance will be regularly conducted and recorded.

43. Implementation timeline: The baseline survey for the impact evaluation will be conducted in the first half of 2013. The start up phase will start by October 2013.

Component 3. Project coordination and institutional capacity building (US$4 million - Total costs including contingencies)

44. This component will finance costs related to the management of the project. It will ensure that the Safety Net Unit (CFS) is operational and that it successfully and efficiently implements the project in conformity with the Financing Agreement, project documents, and the PIM. This component will finance: (i) staff (non-civil servant) salaries; (ii) equipment and operating costs directly linked to the daily management of the project (utilities and supplies, bank charges, communications, vehicle operation, maintenance and insurance, building and equipment maintenance costs, travel and supervision costs, etc.); and (iii) training of personnel. It will finance the implementation of the monitoring and evaluation (M&E) system and the regular monitoring activities of each stage of the project cycle, including measuring project efficiency, effectiveness, and progress. Regular monitoring will also help to identify any arising issues and to promptly consider and adopt solutions. Within the framework of the monitoring cycle, a mid- term review will involve project stakeholders and civil society in the review of project performance, intermediary results, and outcomes. The progress and impact of the project will be measured using the data collected throughout implementation. This component will also support the development of a social protection strategy being spearheaded by the National Social Protection Group.

44

Annex 3: Implementation Arrangements Guinea: Productive Social Safety Net Project Project Institutional and Implementation Arrangements

Project Administration Mechanisms

1. The project team explored several alternatives for institutional arrangements in partnership with the Government of Guinea (GoG). The final set up was primarily driven by the need to deliver quick results on the ground while building the government‘s capacity to lay the building blocks for a well-targeted safety net system.

2. Option 1: The Social Fund for Social Development and Solidarity within the Ministry of Social Affairs, Women and Children (MSAWC) as the implementing agency for the project. This option was considered given the fact that the MSAWC is mandated to formulate and implement the country‘s social policy. However, neither the Ministry nor the Fund has a proven track record in project implementation, and both institutions would require substantial capacity building support to play the role of a Project Coordinating Unit. In view of the need to move fast with the implementation of the Productive Social Safety Nets Project, this option was not retained. Nevertheless, it was agreed that the MSAWC would second one staff to the Project Coordinating Unit, and would be closely associated with project preparation and implementation for a transfer of skills and capacity.

3. Option 2: Office of the Prime Minister. The Office of the Prime Minister was considered as an Anchor Unit for the project given the cross-cutting nature of the issues to be addressed, and the fact that the Office of the Prime Ministers integrates the policy-making process for different sectors and levels of government. However, the Office of the Prime Minister has no experience in project design and implementation, which is critical in such a comprehensive operation.

4. Option 3: Ministry of Economy and Finance (MEF). The MEF houses a Permanent Secretariat in charge of the Poverty Reduction Strategy Paper (PRSP) established in early 2000, which chairs the multi-sectoral social protection group in charge of supporting the development of a Social Protection Strategy for Guinea. The multi-sectoral nature of the MEF and the experience of the PRSP Secretariat in policy-setting and coordination provided an advantage over the other options. The project team and the government opted for the creation of a small unit within the PRSP Secretariat focusing exclusively on the Productive Social Safety Net Project. This option appeared the most viable, with the caveat that: (i) the MSAWC would be represented in the unit; and (ii) a team of fiduciary experts would be recruited competitively as members of the unit.

The main institutional actors are listed below:

5. A Safety Net Unit (Cellule Filets Sociaux - CFS) was established by a ministerial decree (A/2012/1340/MEF/CAB/SGG) on March 9, 2012 to coordinate project implementation. The CFS is anchored in the Ministry of Economy and Finance (MEF) within the PRSP

45 Secretariat and will be comprised of two key staff: (i) a coordinator; and (ii) a monitoring and evaluation (M&E) specialist. A fiduciary team including a financial management specialist, an accountant, and a procurement specialist will be recruited competitively and according to terms and conditions satisfactory to the Bank before effectiveness. An internal auditor will be recruited no later than 4 months after effectiveness. The CFS will be the key interlocutor of the World Bank on the project and will be responsible for: (i) entering into the required contractual/institutional arrangements with service provider(s) for the implementation of the pilot cash transfer; (ii) coordinating with the Project Coordination Unit of the PDU3 to ensure the implementation of component 1 of the Project; (iii) approving the annual work plan and budget of the contracted agencies; (iv) monitoring and evaluating activities; (v) consolidating progress reports and interim financial management reports submitted by the contracted agencies; and (vi) liaising with the national social protection group to ensure synergy with national social protection priorities.

6. The PCU/PDU3 successfully implemented LIPW activities through a GFRP-funded emergency operation in Guinea; therefore, it will provide technical support to the CFS for the implementation of component 1. This support will include assisting the CFS in (i) recruiting local entrepreneurs who will execute the micro-projects; (ii) working with the local authorities, municipalities, and local entrepreneurs for beneficiary selection; (iii) working with the municipalities for micro-project selection, supervision and evaluation; and (iv) working with the Office Nationale pour la Formation Profesionelle et le Perfectionnement (ONFPP) recruiting and supervising the office of national and professional training, which will be involved in the implementation of the life skills development. Prior to effectiveness, a Memorandum of Understanding will be signed between the Ministry of Economy and Finance and the Ministry of Urban Development to clarify the institutional linkage between the CFS and the PCU/PDU3. The Ministry of Urban Development will amend the arrete that created the PCU/PDU3 and the other structure involved in the implementation of the PDU3 (the Cellule de Voirie Secondaire) in order to allow these structures to provide technical assistance in the implementation of component 1. the project implementation manual will specify the roles and responsibilities of all involved in implementation.

7. UNICEF, the only actor with the capacity to effectively pilot a cash transfer of this scale and nature in the country will be contracted as a service provider by the CFS to execute all activities related to component 2 in partnership with the Ministry of Health, the Ministry of Education, the Ministry of Social Affairs, the Ministry of Interior, Administration of the Territory and Decentralization, and other relevant national institutions. Sub-component 2.1 (the signature of the contract with detailed terms of reference, payment and reporting modalities between UNICEF and the CFS) is a condition of disbursement of the actual cash transfers to the beneficiaries. Provisions for government capacity building will be included in the contract.

8. Local Communities will be involved at different levels in project implementation, including beneficiary and micro-projects selection, project implementation, and monitoring and evaluation. A grievance system will be established and discussed in the Project Implementation Manual. This will provide a venue, systems, and mechanisms for beneficiaries and non- beneficiaries alike to share feedback on governance and accountability as per the provisions of the Governance and Accountability Plan included in Annex 7 of this PAD.

46

Financial Management, Disbursements and Procurement

9. Risk assessment and mitigation. The project fiduciary management will rely on the existing Project Implementing Unit (PDU3) for component 1 for technical support, and the newly created Safety Net Unit (CFS) for project implementation. The overall residual risk rating is High. Upon satisfactory implementation of the mitigation measures, the risk rating might shift to Substantial. The assessment recommends among other measures:

10. Budgeting. The overall responsibility to prepare a consolidated annual work program and budget lies with the CFS. The PCU/PDU3 will provide input for the part related to their respective components. The different steps of budget management (preparation, revision, adoption, and execution) will be detailed in the Project Implementation Manual. The CFS will prepare and consolidate the annual work program and budget yearly and submit these documents to the Bank for non-objection. A budget execution report will be included in a quarterly interim financial report to monitor the project‘s implementation.

11. Accounting arrangements and system. The CFS will have the overall responsibility in maintaining the project activity accounts and ensuring that the annual financial statements are produced in a timely manner and in accordance with accounting standards in effect in Guinea (Organisation pour l’Harmonisation en Afrique du Droit des Affaires). The CFS will acquire a computerized accounting system (multi-project version) and the PCU/PDU3 will upgrade its existing accounting system to manage the project. The CFS will recruit a financial manager and an accountant with the qualifications and experience satisfactory to IDA on a competitive basis to manage the project by CFS.

12. Internal control and accounting procedures. The administrative, accounting, and financial procedures will be defined in the administrative, accounting, and financial procedures manual. The manual will include a clear description of the initiation and approval processes with respect to the segregation of duties and principles. The reporting relationship between the CFS, PCU/PDU3, and UNICEF will be clearly described in the manual. The CFS and PCU/PDU3 will further make use of the computerized accounting system to capture all project-related transactions. The financial staff of the CFS (a financial manager an accountant, and an auditor) will be responsible for maintenance of all other necessary controls to ensure that: (i) the project funds are used only for the intended purposes in an efficient and economical way; (ii) accurate, reliable, and timely periodic financial reports are prepared; and (iii) the project‘s assets are adequately safeguarded. The Bank‘s Disbursement Unit and Financial Management Units will provide adequate training in disbursement and FM procedures to the CFS‘s FM team. All these measures are expected to enhance the internal control system.

13. Internal audit. An internal auditor will be hired to perform risk-based approach audit according to qualifications and terms of reference satisfactory to IDA. The internal auditor will submit periodic reports on his findings and recommendations to strengthen the internal control system.

47 14. Financial reporting and monitoring. Quarterly interim financial reports (IFR) to be generated from the CFS computerized financial management system will be based on a format agreed with the IDA and submitted to the IDA within 45 days of the end of each calendar quarter. The IFRs will include: (i) sources and uses of funds by project expenditures classification; (ii) a comparison of budgeted and actual project expenditures (commitment and disbursement) to date and for the quarter; (iii) statement of uses of funds by component/activity; (iv) designated account activity; and (v) physical progress report.

15. External auditing. The annual financial statements and quarterly IFR prepared by the CFS as well as the internal control system will be subject to an annual audit by a reputable and independent auditing firm based on terms of reference that are satisfactory to the IDA. The audit scope will be tailored to the project‘s specific risks in accordance with Bank requirements and agreed upon with the government. In line with the new access to information policy, the project will comply with the Bank‘s disclosure policy of audit reports (e.g., make publicly available, promptly after receipt of all final financial audit reports -including qualified audit reports). The project‘s external auditor will be hired within four months of effectiveness. A single audit opinion, in compliance with International Standards on Auditing, will be issued and will cover all project receipts and payments, and accounts. The audited financial statements, along with the auditor‘s report and management letter (incorporating management‘s comments) covering identified internal control and accounting system weaknesses, will be submitted to IDA within six months of the end of each financial year.

16. Funds flow. Funds will flow from the IDA Account to one designated account (DA) denominated in US dollars and opened in a reputable commercial bank acceptable to the IDA by the CFS (Figure A3.1). The allocation will cover approximately four months of expenditures. The designated account will be managed according to the disbursement procedures described in the administrative, accounting, and financial procedures manual and disbursement letter. Disbursements under the Grant would be transaction based. Direct Payment and Statement of Expenditures (SoE) methods will apply as appropriate. The conversion to report-based disbursements may be envisaged when the CFS has the capacity to produce reliable and acceptable IFRs. The minimum value of Direct Payment and Special Commitment will be 20 percent of the designated account ceiling.

48 Figure A3.1 Flow of Funds

IDA

SOE (+supportive documentation prepared by CFS)

Designated Account (DA) (commercial bank) managed by the CFS

(cosignature coordinator and FMS)

Suppliers, contractors

Funds Reports, invoices, goods,..

17. Table A3.1 specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing (―Category‖), the allocations of the amounts of the Credit and of the Grant to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. The Country Financing Parameters (CFP) for Guinea allows 100 percent funding, inclusive of taxes, of eligible expenditures.

49 Table A 3.1

Amount of Percentage of Expenditures Category Financing to be Financed(inclusive of (expressed in US$) Taxes)

(1) Goods, works, non-consulting services, 21,476,000 100 percent consultants‘ services, Training, Stipends and Operating Costs for the Project (other than for Parts B.2 (i) and B.3 of the Project)

(2) Cash Transfers under Parts B.2 (i) and B.3 3,024,000 100 percent of amount of the Project disbursed

(3) Refund of Preparation Advance 18 500,000

TOTAL AMOUNT US$25.0 million 100 percent

18 In order to ensure project readiness, a project preparation advance has been requested by the Government of Guinea in the amount of US$500,000 and is currently being processed. Activities to be facilitated through this PPA will include (i) all activities associated with the respect of the effectiveness conditions; (ii) setting up an office for the CFS; and (iii) paying consultant salaries and operational costs for 6 months. The PPA will be managed by the PCU/PDU3 until effectiveness. It was agreed during negotiations that if the PPA agreement is not countersigned by the Republic of Guinea on or prior to the date on which this project is presented to the Board, then the Financing Agreement would be adjusted in order to delete Category (3) and reallocate the amount Category (1).

50 Financial Management Action Plan

Action To Be Undertaken Time-Frame Responsible Body

1. Appointment of a financial manager and an accountant Effectiveness CFS dedicated to the project 2. Design of administrative, accounting, and financial Effectiveness CFS procedures manual in form and substance satisfactory to the IDA

3. Installation of a computerized information system for the Three months after CFS financial management of project activities effectiveness

4. Preparation of appropriate terms of references for the Effectiveness (not a CFS recruitment of an external auditor condition) 5. Recruitment of external auditor to ensure that annual audit Within four months of CFS reports are timely carried out and transmitted effectiveness

6. Recruitment of internal auditor Within four months of CFS effectiveness

Procurement

18. All procurement activities will be managed by the Safety Net Unit team with PDU3 team support for the component 1 and UNICEF team support for component 2, including: (i) coordination and quality assurance of all documents related to contracting and procurement (tender documents, request for proposals, MOUs, contracts) prepared by the implementing entities; (ii) the actualization of the Procurement Plan in close collaboration with implementing entities; and (iii) all requests for non-objection with respect to tenders and contracts.

19. Capacity assessment, risks, and mitigation measures. A procurement capacity assessment of the Ministry of Economy and Finances (MEF) and the Ministry of Social Affairs, Women and Children (MSAWC) to implement procurement actions for the project was conducted during project preparation. The assessment reviewed the organization structure for implementing the project taking into account a number of actors and stakeholders. It was agreed with the GoG to establish a small Safety Net Unit in the MEF under the PRSP Secretariat to coordinate project implementation. The fiduciary function, financial management, and procurement will be managed by the Safety Net Unit.

20. The potential risks identified are a large number of actors, the weakness of experience and skills in the Bank‘s procurement procedures for the newly created Safety Net Unit staff, and

51 the lack of a procurement manual. In addition, all of the procurement commission members are not familiar with international procurement procedures, which may obstruct or delay the procurement process—especially the evaluation of bids and consultant proposals. The mitigation measures recommended are: (i) the recruitment of one procurement officer prior to effectiveness; this procurement officer will be responsible for all procurement activities envisaged; (ii) the elaboration of an administrative, accounting, and financial procedures manual, including a procurement section that will clearly define the roles and responsibilities of each actor in the procurement process prior to effectiveness; (iii) strengthen the capacity of the fiduciary team on the Bank‘s procurement and consultant guidelines four months after project effectiveness and as needed during the project; and (iv) and put in place an effective filing system.

The overall project procurement risk has been rated Substantial.

21. Guidelines. Procurement for the proposed project will be carried out in accordance with (i) the World Bank‘s ―Guidelines: Procurement under IBRD Loans and IDA Credits‖ dated January 2011; (ii) ―Guidelines: Selection and Employment of Consultants by World Bank Borrowers‖ dated January 2011; and (iii) the provisions of the Financial Agreement. Guidelines on Preventing and Combating Fraud and Corruption in Projects financed by IBRD Loans and IDA Credits and Grants dated October 15, 2006, revised in January 2011 applies to the project. A Procurement Plan covering the first 18 months of the project has been developed.

22. Procurement documents. Procurement will be carried out using the Bank‘s Standard Bidding Documents (SBD) or Standard Request for Proposal (RFP) respectively for all International Competitive Bidding (ICB) for goods and selection of consultants. For National Competitive Bidding (NCB), the borrower may ensure that the following special requirements are taken into account: (i) four weeks will be provided for preparation and submission of bids after the issuance of the Invitation for Bids or availability of the bidding documents, whichever is later; (ii) for all procurement of goods and works, the SBD published by the Bank for ICB will be used and modified in order to adapt it to the current situation; (iii) bids will be advertised in national newspapers with wide circulation; (iv) bids will be presented and submitted only in one internal envelope (no system with two envelopes will be used); (v) bid evaluation, bidder qualifications criteria, and the contract award criteria will be clearly specified in the bidding documents; (vi) no preference margin will be granted to domestic bidders; (vii) eligible firms, including foreign firms, will not be excluded from the competition; (viii) procedures will include the publication of the results of the evaluation and award of the contract, and provisions for bidders to file grievances; (ix) procurement audits will be included in the terms of reference of project financial audits; and (x) if the procurement Code does not apply to small contracts, the procedures will require that for such contracts, a competitive method be used (reference for example to the shopping method described in this Annex). In addition, any other proposed adjustments will be reviewed by the Bank as necessary in order to ensure economy, efficiency, transparency, and broad consistency with the provisions included in the Section I of the Guidelines.

23. Frequency of procurement reviews and supervision. The Bank‘s prior and post reviews will be carried out on the basis of thresholds indicated in Table A3.2. The Bank will conduct two supervision missions per year and annual post procurement reviews (PPR); the ratio

52 of post review is at least 1-5 contracts. The Bank could also conduct an independent procurement review (IPR) at any time until after two years of the closing date of the project.

Table A3.2: Procurement and Selection Review Thresholds Procurement/Selection Prior Review Comments Methods Threshold (US$) 1. Works and goods ICB Review of all contracts. Works ≥ 500,000 Goods ≥ 200,000 LIB All contracts Review of all contracts. NCB Review of the first three (3) contracts independent of Works < 500,000 amount. Method applicable for contracts less than Goods < 200,000 US$500,000 for Works and US$200,000 for Goods. Shopping < 50,000 Review of the first three (3) contracts independent of amount. Method applicable for works, goods and non-consultant services contracts less than US$50,000. Direct Contracting All contracts Review of all contracts. 2. Consulting services QCBS ≥ 200,000 Review of all contracts. LCS ≥ 200,000 With review of the first two contracts independent of amount. Selection under a Fixed ≥ 200,000 Review of all contracts Budget (FBS) CQS ≥ 50,000 With review of the first two contracts independent of <100,000 amount. Method applicable for contracts less than US$100,000. Individual Consultants (IC) ≥ 50,000 Review of all contracts.

Single Source Selection (SSS) All contracts Review of all contracts. 3. Trainings and workshops Training and workshops ≥ 15,000 On basis of detailed and approved annual plan (with indication of venue, number of participants, duration, and exhaustive budget, etc.).

24. All trainings, terms of reference for contracts estimated at more than US$15,000, and all amendments of contracts raising the initial contract value by more than 15 percent of the original amount or above the prior review thresholds will be subject to IDA prior review. All contracts not submitted to the prior review will be submitted to IDA post review in accordance with the provisions of paragraph 4 of Annex 1 of the Bank‘s Consultant Selection Guidelines and the Bank‘s Procurement Guidelines.

53 25. Procurement plan. All procurement activities will be carried out in accordance with the approved original or updated Procurement Plans. The Procurement Plans will be updated at least annually or as required to reflect the actual project implementation needs and capacity improvements. All Procurement Plans should be published on the Bank website according to the guidelines. The MEF and the Bank will agree on a Procurement Plan covering the first 18 months of the project prior to negotiations. Procurement documents will be submitted to the Bank for review.

(a) Summary of works and goods contract packages for the first 18 months of implementation.

1 2 3 4 5 6 7 8 10

Ref. No. Description Estimated Amount (US$ 000) Procurement Method Pre qualification(yes/no) Domestic preference (y/n) Prior Review (y/n) Estimated openingBids Date Comments

Works: 12 846

City of CONAKRY 2 958

1 Labor intensive public 486 NCB No No Yes 03/21/2013 works - Contract N. 1 (5 lots for 5 Communes of Conakry: Kaloum, Dixinn, Matam, Ratoma and Matoto)

2 Labor intensive public 490 NCB No No Yes 01/21/2014 works - Contract N. 2 (5 lots for 5 Communes of Conakry)

3 Labor intensive public 495 NCB No No No 2014 works - Contract N. 3 (5 lots for 5 Communes of Conakry)

4 Labor intensive public 498 NCB No No No 2014 works - Contract N. 4 (5 lots for 5 Communes of Conakry)

\5 Labor intensive public 492 NCB No No No 2014 works - Contract N. 5 (5 lots for 5 Communes

54 of Conakry

6 Labor intensive public 497 NCB No No No 2014 works - Contract N. 6 (5 lots for 5 Communes of Conakry)

REGIONS 9 888

KINDIA 1465.5

7 Labor intensive public 477.5 NCB No No Yes 05/31/2013 works - Contract N. 1 (5 lots)

8 Labor intensive public 494 NCB No No No 11/04/2013 works - Contract N. 2 (5 lots)

9 Labor intensive public 396 NCB No No No 2014 works - Contract N. 3 (4 lots)

10 Labor intensive public 98 NCB No No No 2014 works - Contract N. 4 (1 lot)

MAMOU 988.5

11 Labor intensive public 290.5 NCB No No Yes 05/31/2013 works - Contract N. 1 (3 lots)

12 Labor intensive public 400 NCB No No No 12/04/2013 works - Contract N. 2 (4 lots)

13 Labor intensive public 200 NCB No No No 2014 works - Contract N. 3 (2 lots)

13 Labor intensive public 98 NCB No No No 2014 works - Contract N. 4 (1 lot)

BOKE 1 474

15 Labor intensive public 474 NCB No No Yes 05/31/2013 works - Contract N. 1 (5 lots)

16 Labor intensive public 400 NCB No No No 12/16/2013 works - Contract N. 2 (4 lots)

55 17 Labor intensive public 300 NCB No No No 2014 works - Contract N. 3 (3 lots)

18 Labor intensive public 300 NCB No No No 2014 works - Contract N. 4 (3 lots)

LABE 1 000

19 Labor intensive public 400 NCB No No No 04/02/2014 works - Contract N. 1 (4 lots)

20 Labor intensive public 400 NCB No No No 2014 works - Contract N. 2 (4 lots)

21 Labor intensive public 200 NCB No No No 2014 works - Contract N. 3 (2 lots)

KANKAN 1 490

22 Labor intensive public 497 NCB No No No 03/04/2014 works - Contract N. 1 (5 lots)

23 Labor intensive public 495 NCB No No No 2014 works - Contract N. 2 (5 lots)

24 Labor intensive public 498 NCB No No No 2014 works - Contract N. 3 (5 lots)

FARANAH 1 485

25 Labor intensive public 490 NCB No No No 03/17/2014 works - Contract N. 1 (5 lots)

26 Labor intensive public 498 NCB No No No 2014 works - Contract N. 2 (5 lots)

27 Labor intensive public 497 NCB No No No 2014 works - Contract N. 3 (5 lots)

N’ZEREKORE 1 985

28 Labor intensive public 497 NCB No No Yes 03/31/2014

56 works - Contract N. 1 (5 lots)

29 Labor intensive public 498 NCB No No No 2014 works - Contract N. 2 (5 lots)

30 Labor intensive public 494 NCB No No No 2014 works - Contract N. 3 (5 lots)

31 Labor intensive public 496 NCB No No No 2014 works - Contract N. 4 (5 lots)

Goods, services, and non consultant services

1 car and 80 NCB No No Yes 01/12/12/ motorcycles

Computer 15 Shopping No No Yes 10/12/2012 equipments and accessories

Office equipment 10 Shopping No No Yes 03/12/2012

Office supplies 20 Shopping No No No 2013

Office rent 312 Direct No No Yes 01/04/2013 contracting

Car insurance 312 Direct No No Yes 15/01/2013 Contracting

Health insurance 25 Shopping No No No 01/12/13 for consultants

Car maintenance 49.5 Shopping No No No 15/01/2013

Equipment 25 Shopping No No No 15/01/2013 maintenance

Total goods, works 611.5 and non consulting services

(b) Summary of Consultant‘s contract packages for the first 18 months of implementation.

1 2 3 4 5 6 8

57

Ref No: Ref

Method

(Yes/No)

Selection Selection

(US$ 000) (US$

Amount Est. Est. Amount

Prior Review

Opening Date Opening

Estimated Bid Bid Estimated

Description Comments Recruitment of 2 firms for technical studies, monitoring, 1 800 QCBS Yes 03/12/2012 and supervision of works in the regional capitals Recruitment of 3 NGOs to 2 400 QCBS Yes 03/12/2012 conduct community sensitization Recruitment of 6 engineers to 3 follow up and supervise works 162 IC Yes 03/12/2012 on behalf of the PCU/PDU3 Memorandum of understanding Direct Yes 4 600 01/01/2013 with ONFPP for component 1.2 Contracting 5 Contract with l‘UNICEF for Direct 4.000 Yes 01/12/2012 component 2 Contracting

6 Recruitment of an external audit 100 CQS Yes 15/12/2012 firms to audit the CFS accounts

7 Recruitment of an impact 1.000 QCBS Yes 01/03/2013 evaluation firm

Consultant to supervise the 8 implementation of safeguards 12 IC No 12/03/2013

measures 9 4 months after Internal auditor 85.5 IC Yes 01/01/2013 Effective date

10 Communication consultant Direct Yes 81 15/02/2013 (contract renewal) Contracting Administrative and Financial Direct 11 Management Specialist (contract 151.2 Contracting Yes 15/02/2013 extension) Direct 12 Accountant (contract extension) 81 15/02/2013 Contracting Yes Procurement specialist (contract Direct 13 151.2 15/02/2013 extension) Contracting Yes

Recrutement of support staff and 14 extension of staff contract 162 IC Yes 15/02/2013 finalized under the PPA

26. Procurement filing. Procurement documents must be maintained in the project files and archived in a safe place until at least two years after the closing date of the project. The Procurement Unit will be responsible for the filing of procurement documents.

58 Environmental and social (including safeguards)

27. The project falls under environmental classification B, primarily because the labor intensive public works (LIPW) may only have limited and localized environmental and social impacts. Two World Bank safeguards policies were triggered: Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP.BP 4.12). An Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF) were prepared, reviewed, approved, and disclosed in-country and at the Infoshop. The implementing agency is expected to use Bank screening procedures to identify, assess, evaluate, mitigate, and monitor the impact of the LIPW sub-projects on the environment. The project will recruit a part-time environmental and social consultant to follow up on environmental and social safeguards in the project.

28. Social impacts of the project are expected to be overly positive, as the intervention seeks to: (i) generate employment for youth in urban areas through LIPW and increase their employability through skills development; and (ii) improve the human capital of the poor in rural areas through cash transfers to households whose children are affected by malnutrition and have low primary school completion rates. The income support provided will help targeted households improve access to basic needs as well as invest in productive assets. Training in the eight essential family practices will stimulate long term changes in health, nutrition, and sanitation that will positively contribute to food security. Risks of conflicts exist if the targeting process is not perceived as transparent and inclusive. In order to minimize possible tensions, the Project Implementation Manual will set clear criteria and transparent procedures for beneficiary selection and registration. For the CT pilot, in order to avoid envy and social tensions, objective criteria (chronic malnutrition and high dropout rates of girls) have been chosen to identify beneficiaries among the poor households. The potential negative impact of the LIPW is marginal given the scope and the nature of the sub-projects to be undertaken. Indeed, these projects will not exceed the ceiling of US$100,000 per operation. The part-time environmental and social consultant will also be responsible for following up on social issues including resettlement and compensation if and when necessary.

59 Monitoring and evaluation

29. The monitoring and evaluation (M&E) activities as well as the impact evaluation of the Guinea Productive Social Safety Net Project will be coordinated by the Safety Net Unit (Cellule Filets Sociaux - CFS) more specifically, by its M&E specialist. The CFS will be responsible for coordinating and supervising the collection and management of the different databases described in the present document. In addition, the consultants recruited to support the development of the database and the data collection processes for the impact evaluation will be in charge of the technical monitoring of these databases. The databases will be centralized in the CFS, which will share them with the World Bank in order to draw lessons from project implementation. A monitoring and evaluation database will be established for each component to collect specific basic information on all beneficiaries, while more in-depth surveys will gather information on a sample of participants.

30. The various elements of the monitoring and evaluation and impact evaluation system (including the responsibilities of each stakeholder) are listed below:

Component Supervision & Technical Use and Management Responsibility Analysis 1. LIPW programs in urban M&E database: All CFS Technical CFS and areas with a focus on youth participants consultant World Bank and life skills development Quick surveys CFS Technical CFS and covering a sample consultant World Bank of participants 2. Pilot CT program to protect M&E database: All CFS Technical CFS and human capital participants consultant World Bank Baseline and CFS Technical CFS and follow-up surveys consultant /INS World Bank for impact eval.

(1) Component 1: Labor intensive public works programs in urban areas with a focus on youth and life skills development 31. This component will be supported by a monitoring and evaluation system. This system will rely on two key elements: (i) a database of beneficiaries participating in labor intensive public works (LIPW) and life skills development and projects implemented; and (ii) a series of short surveys, conducted after finalization of public works and training, with participating beneficiaries, local contractors, and municipalities. 32. At first, short questionnaires will be administered to beneficiaries (see example in Annex 1), local contractors, and municipalities. A database will be developed to collect and manage the information gathered from these questionnaires. The database will also trace the date and amount of each payment received by a beneficiary, as well as the date and reason for program exit. The design of the database, probably in Microsoft Access format, the training of officers in charge of data entry at municipal level, and the monitoring of the database will be entrusted to a consultant or to the National Statistics Institute (Institute National de la Statistique - INS) which based on a rapid initial assessment, has the required capacity for this work.

60 33. Short surveys will be conducted on the basis of the model used by the Rapid Assessment of the Emergency Labor Intensive Public Works Program (Enquête sur le Programme d’Urgence à Haute Intensité de Main-d’œuvre (PUHIMO)) conducted in February 2012 for the city of Conakry. Depending on the budget, these short surveys will be held in each of the eight cities covered by the public works program and life skills development, or in some of these.

(2) Component 2: Pilot cash transfer program to protect human capital 34. This component will be supported by a monitoring and evaluation system and a rigorous impact evaluation. 1. Monitoring and evaluation 35. The monitoring and evaluation system will comprise databases on the beneficiaries of the respective two sub-components: first, children aged 0-24 months for nutrition and secondly, girls‘ education in the fifth and sixth grades. After the villages have been selected, a baseline survey will be conducted to identify eligible beneficiaries and create a composite list. The databases will be elaborated from the lists. 36. For the nutrition sub-component, the list of eligible beneficiaries will be will be premised on: (i) age, 0-24 months; (ii) chronic malnutrition, -2 standard deviation for the age-to-height indicator; and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households (to be determined in the next phase) that are considered vulnerable but were not identified during the survey. 37. For the girls‘ education sub-component, the list of eligible beneficiaries will be will be premised on: (i) households with girls enrolled in the third to sixth grade of primary school; (ii) households with girls of age to benefit from the program (girls who have left school for more than one academic year will be eligible, provided that they are at least 12 years old for the fifth grade and 13 years old for the sixth grade); and (iii) poverty criteria, using the results of the new poverty survey and based on durable asset ownership to approximate revenue. This list will be submitted for validation to the village authorities and committees and, if necessary, for the addition of a limited number of households (to be determined in the next phase) that are considered vulnerable but were not identified by the survey. 38. These two beneficiary lists (nutrition and girls‘ education) will be regularly updated and will include the following data: anthropometric measurements and monthly transfers (amounts and dates) for the nutrition sub-component and assessment of attendance and academic progress as well as recording of quarterly transfers (amounts and dates) for the girls‘ education sub- component. 39. In the case of the nutrition sub-component, the list of participants and the topics discussed during the monthly essential family practices sessions will also be included in the database. 40. The unique identification number figuring on the project‘s identity cards will be entered in each of the lists included in the databases, so as to facilitate the aggregation of the different components of the global database.

61 41. The design of the database, probably in Microsoft Access format, the training of officers in charge of the data at the district or sub-prefectures levels, and the monitoring of the database will be entrusted to a consultant or to the National Statistical Institute (Institut National de la Statistique - INS), which appears to have the capacity for this work.

2. (b) Impact evaluation 42. The impact evaluation of cash transfers for child nutrition and girls‘ education will be prospective and include both a baseline and a follow-up survey with a random allocation of intervention units (villages for the nutrition sub-component and schools for the girls‘ education subcomponent) between control and intervention groups. 43. A random allocation (randomization) of the schools and villages that will be included in the control group (i.e., without intervention for the duration of the project) and of the intervention groups will be organized. A ceremony of public randomization, to which the heads of villages and the directors of schools and health centers will be invited, will facilitate the acceptance and credibility of the procedure. A workshop on the techniques of the impact evaluation will also be organized; it will regroup the different stakeholders of the project and present the different methods of impact evaluation and the benefits of randomization. Evaluation plan 44. The intervention units will be the primary school in the case of cash transfers for girls‘ education and the village in the case of cash transfers for child nutrition. In the prefectures and sub-prefectures where both types of transfers will be implemented, the two processes of randomization will be conducted separately and independently in such a way that, in these areas, the four following combinations will be possible:

No Cash Transfers for Girls’ Cash Transfers for Girls’ Education Education No Cash Transfers 1) Control group: no cash transfers for 2) NO cash transfers for nutrition but for Child Nutrition nutrition, no cash transfers for girls‘ cash transfers for girls‘ education education Cash Transfers for 3) Cash transfers for nutrition but NO 4) Cash transfers for nutrition AND Child Nutrition cash transfers for girls‘ education cash transfers for girls‘ education

45. To estimate the number of comparisons possible (control groups - different intervention groups) and, ultimately, to perform a calculation of statistical stature, it is important to know precisely the number of primary schools (sub-component girls‘ education) and villages (nutrition sub-component) included in the sub-prefectures where interventions will be conducted.

46. Subject to a sufficient number of randomization units, the evaluation plan may look like this:

i) Nutrition sub-component: Villages randomly assigned to one of seven groups.

62 No Cash Transfers Cash Transfers Cash Transfers But Plus But Essential Family Practices Essential Family Practices No Essential Family Practices 1) Control Group: no cash 1) Cash transfers for nutrition 2) Cash transfers for nutrition transfers for nutrition but US$7/month, monthly US$7/month, but no monthly monthly sessions on essential sessions on essential family sessions on essential family family practices practices practices 3) Cash transfers for nutrition 5) Cash transfers for nutrition US1$4/month, monthly US$14/month, but no monthly sessions on essential family sessions on essential family practices practices 4) Cash transfers for nutrition 6) Cash transfers for nutrition US$21/month, monthly US$21/month, but no monthly sessions on essential family sessions on essential family practices practices Note: If possible, the addition of an eighth group receiving no essential family practices training and no cash transfers could facilitate the isolated effect of the essential family practices sessions.

47. If the number of villages is not sufficient to compare seven or eight groups, the options are either (i) to exclude Groups 5-7 (cash transfers without essential family practices sessions) or (ii) to randomize the transfer amounts at the household level rather than at the village level. This last option would substantially increase the statistical power of the investigation and has already been used in several projects (e.g., pilot Zomba Malawi). A final decision will be taken when the number of villages and schools selected will be determined.

ii) Girls’ education sub-component: villages randomly divided into four groups

No Cash Transfers Cash Transfers 1) Control Group: No cash transfers 2) Cash transfers for girls‘ education, US$7/month for girls‘ education 3) Cash transfers for girls‘ education, US$14/month 4) Cash transfers for girls‘ education, US$21/month

Surveys and calendar

48. The impact evaluation will be based on two surveys: a baseline survey completed prior to the launch of cash transfers and a follow-up survey at the end of the pilot experience. Surveys will take the form of typical household surveys, with strengthened modules on health and education issues (use of services, health and education expenses). They will include anthropometric measurements, knowledge tests (French, mathematics), and a module on the development and stimulation of young children. Modules on schools and health centers will also be included in the baseline and follow-up surveys. These will collect the information contained in the attendance records.

49. For logistical and budgetary considerations, it would be advantageous to conduct both baseline nutrition and education surveys simultaneously, at least in the joint implementation areas. It would also be important to maximize this particular aspect.

63 50. The following calendar would allow a combination of both surveys:

 Baseline Survey: March-May 2013  Cash transfers for nutrition sub-component (18 months): September 2013-February 2015  Cash transfers for girls‘ education sub-component (18 months, covering 2 school years): September 2013-June 2014; September 2014-June 2015  Follow-up survey: March-May 2015.

51. Both the baseline survey and the follow-up surveys must be conducted during the same period of the year to avoid the interference of seasonality effects. A consultant/service provider with the required capacity will be recruited to conduct the surveys.

64 Annex 4: Operational Risk Assessment Framework (ORAF)

Guinea: Productive Social Safety Net Project (P123900) Stage: Board Project Stakeholder Risks Stakeholder Risk Rating Low Description: Risk Management:

Project design will be validated at meetings with key stakeholders including other donors and private Stakeholders raise objections to project sectors during the project preparation and pre-appraisal missions. design and implementation. Resp: Bank Stage: Prepa Recurrent: Due 31-Jan-2012 Frequency Status: Compl Communities may show resistance to the ration Date: : eted randomization of the amount of transfers. Risk Management: This could raise tensions in the communities. The project is in line with key government priorities as expressed by the Minister of Finance during meeting with RBZ; the Spring Meetings 2011; and the Annual Meetings 2011. Resp: Client Stage: Prepa Recurrent: Due 31-Oct-2011 Frequency Status: Compl ration Date: : eted Risk Management: Trainings will be provided to UNICEF and to field facilitators to ensure buy in from the community on the transparent targeting approach suggested. Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Risk Management: Communities will be sensitized about beneficiary targeting methodologies and approaches through rigorous community mobilization campaigns. Resp: Client Stage: Imple Recurrent: Due Frequency Qua Status: Not menta Date: : rterl Yet tion y Due Close monitoring of on-the ground country environment, building on the 2011 WDR lessons in

65 devising tailored operational responses to address the fragility and risk situation. Resp: Bank Stage: Both Recurrent: Due Frequency Status: In Date: : Progres s Risk Management: Close monitoring of the macroeconomic environment with the IMF and the Guinean authorities as well as close support to assess implementation of the HIPC Completion Point (CP) triggers and update the roadmap of sequences to reach CP. Resp: Bank Stage: Both Recurrent: Frequency Status: In : Progres s Risk Management: Delayed response or insufficient results against high expectations and perception of corruption could weaken the political feasibility of reforms. Therefore, the Bank is developing new investment operations to help strengthen the legitimacy of state institutions, improve the country‘s governance environment (including transparency, accountability and rule of law in the public and mining sectors), support the public sector reform, address constraints in the electricity sector, and to contribute to conflict prevention (through the set up of social safety nets to mitigate the effects of recent decisions like the petroleum price increase). Resp: Bank Stage: Both Recurrent: Due Frequency Status: In Date: : Progres s Sector and Multi-Sector Rating High Description: Risk Management:

A Bank-funded Technical assistance project will be implemented starting FY13, and will complement There is no official framework for safety the proposed intervention to help the government elaborate an SP policy. Through this TA, a consultant nets interventions. Neither a social will be recruited by the World Bank to assist the Government in drafting a SP strategy that will be the protection policy nor a strategy exists. basis for a SP policy and inform the next Poverty Reduction Strategy Paper.

Resp: Bank Stage: Imple Recurrent: Due 16-Jun-2014 Frequency Status: Not Institutional mandate to work on issues menta Date: : Yet tion Due

66 related to SP spreads across various Risk Management: ministries with limited capacity, which The Government has formed a high level multi-sectoral social protection group made up by increases the likelihood of poor representatives of several Government institutions and representative from civil society to help draft a coordination and inefficient use of National Social Protection Policy. The National Social Protection Group is headed by the secretariat of available resources the PRSP. These efforts will help establish a framework for social protection and safety nets interventions in the country. Resp: Client Stage: Prepa Recurrent: Due 31-Dec-2011 Frequency Status: Compl ration Date: : eted Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating High Description: Risk Management: A fiduciary team including a financial and administrative management specialist, a procurement Project implementation will be coordinated specialist, and an accountant will be recruited competitively as staff of the CFS. by a newly created Safety Nets Unit (CFS) within the Ministry of Finance. The CFS's Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not capacity to effectively implement bank- menta Date: : Yet funded operations has to be strengthened. tion Due Risk Management: An accounting software will be installed to handle the project‘s transactions and generate the required financial information Resp: Bank Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet tion Due Risk Management: Recruitment of a qualified and independent external auditor and an internal auditor under TORs satisfactory to the Bank Resp: Client Stage: Imple Recurrent: Due 01-Feb-2013 Frequency Status: Not menta Date: : Yet tion Due Risk Management:

67 A Memorandum of Understanding will be signed between the Ministry of Economy and Finance and the Ministry of Urban Development and Housing to enable the PCU/PDU3 to provide technical assistance to the CFS for project component 1. Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet tion Due Risk Management: The CFS will sign a contract with UNICEF who will execute the pilot cash transfer in partnership with relevant sectoral ministries. The contract with UNICEF will specify the terms of reference, payment and reporting modalities for the pilot. Resp: Client Stage: Imple Recurrent: Due 01-Jan-2013 Frequency Status: Not menta Date: : Yet tion Due Risk Management: A project implementation manual and a manual of administrative, financial and accounting procedures detailing implementation and budget management procedures will be required as a condition of effectiveness. Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet tion Due Risk Management: Key staff in the PCU/PDU3 will receive financial compensation to provide technical assistance to the CFS in the implementation of component 1. Resp: Client Stage: Imple Recurrent: Due Frequency Mon Status: Not menta Date: : thly Yet tion Due Risk Management: Capacity of the PCU/PDU3 to manage the project will be reinforced through upgrading of material equipments (including computers) as appropriate and recruitment of consultants to provide technical assistance to the CFS

68 Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Governance Rating High Description: Risk Management:

The roles and responsibilities of each stakeholder will be clearly explained in the project The project is simple in its design, but implementation manual. Provisions for regular meetings between all stakeholders will be included in involves at least three line ministries (social the manual. affairs, Economy and finance, and Urban Development) Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet The risk of interference in the targeting and tion Due selection of beneficiaries is high, and this Risk Management: could result in the inclusion of communities or individuals that do not The CFS will facilitate some refresher trainings on project operations as needed. During these trainings, satisfy selection criteria (e.g. relatively a module focusing on the governance structure of the project will help ensure a common understanding rich) and consequently in the exclusion of about key roles and responsibilities. more deserving communities or individuals Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not

menta Date: : ly Yet Getting the intended amount to the tion Due beneficiaries Risk Management: Beneficiaries satisfaction survey will be conducted by the CFS on an annual basis Resp: Bank Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Risk Management: Accounting documents and payment registries (with beneficiary and witnesses signature) will be systematically submitted to UNICEF for verification Resp: Client Stage: Imple Recurrent: Due Frequency Mon Status: Not menta Date: : thly Yet tion Due Risk Management:

69 Effective and confidential grievance mechanisms will be developed as part of the implementation manual to provide a venue for beneficiaries to voice their complaints. The CFS will be responsible for managing and addressing these complaints. Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet tion Due Risk Management: Social, internal, and external audits of records kept by the project and the payment agencies will be conducted. Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Risk Management: Clear institutional links will be defined with UNICEF (contract including terms of references) and the PCU/PDU3 (memorandum of understanding between the Ministry of Economy and Finance and the Ministry of Urban Development). Both UNICEF and the PCU/PDU3 will be responsible for managing relationships with companies/agencies that will play a role in implementation of their component as per the terms of the convention/contract signed. Resp: Client Stage: Imple Recurrent: Due 01-Jan-2013 Frequency Status: Not menta Date: : Yet tion Due Risk Management: As per the terms of their contracts., the PCU/PDU3 and UNICEF will supervise the targeting process to ensure consistency with the process described in the project implementation Resp: Client Stage: Imple Recurrent: Due Frequency Qua Status: Not menta Date: : rterl Yet tion y Due Risk Management: For component 1 the micro-projects will be implemented in poor neighborhoods. Worker‘s salaries will be set below market rate to discourage participation of the less vulnerable. In case demand for work exceeds the supply, additional criteria such as residency in the neighborhood, household size, age, and

70 gender will be used to ensure that the most vulnerable are selected. For the pilot cash transfer, beneficiaries will be selected after a household survey based on eligibility criteria specified in the PAD (households poverty level, malnutrition rate among children 0-24 for sub-component 2.2.; household poverty level and risks to dropout of schools for subcomponent 2.3). This information will be specified in the Project Manual Resp: Client Stage: Imple Recurrent: Due 01-Oct-2012 Frequency Status: Not menta Date: : Yet tion Due Risk Management: Beneficiary lists will be reviewed and validated by the communities before being finalized Resp: Client Stage: Imple Recurrent: Due Frequency Mon Status: Not menta Date: : thly Yet tion Due Risk Management: Beneficiary lists will be displayed publicly and communities will be sensitized on a grievance mechanisms to voice concerns Resp: Client Stage: Imple Recurrent: Due Frequency Qua Status: Not menta Date: : rterl Yet tion y Due Risk Management: The Internal auditor of the CFS will conduct random assessments of 10 percent of registered beneficiaries to confirm their eligibility to the project. Resp: Client Stage: Imple Recurrent: Due Frequency Qua Status: Not menta Date: : rterl Yet tion y Due Risk Management: For component 1, the PCU/PDU3 will recruit local entrepreneurs who will pay the beneficiaries per the term of contract signed. For component 2, UNICEF will recruit some payment agencies based on the capacity, network, and capacity for traceability of funds within these agencies to facilitate payments. CT beneficiaries will receive a photo ID with a unique number, name, and name of benefiting children to promote transparency during payments. Payments will be done publicly.

71 Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Project Risks Design Rating High Description: Risk Management:

The project will rely on UNICEF and the PCU/PDU 3 who both have significant technical expertise on Risk rating is high given the low capacity the issues to be addressed and have a national network of local executing agencies on which they can context, the scope of the intervention, and rely for implementation. the number of actors involved in implementation. Resp: Bank Stage: Prepa Recurrent: Due 01-Oct-2012 Frequency Status: Compl ration Date: : eted Risk Management: Additional studies will be commissioned as needed during implementation to inform the design of the pilot cash transfer Resp: Client Stage: Imple Recurrent: Due 02-Oct-2017 Frequency Status: Not menta Date: : Yet tion Due Risk Management: Staff from the implementing agency will be trained on the specific technical requirements of the components and of implementation procedures as per the project implementation manual after effectiveness Resp: Client Stage: Imple Recurrent: Due Frequency Year Status: Not menta Date: : ly Yet tion Due Social and Environmental Rating Low Description: Risk Management: Overall the project is expected to be rated A Resettlement Policy Framework and Environmental and Social Management Policy Framework have environmental category B to reflect the been elaborated and disclosed. Mitigation measures will be identified to be executed and monitored limited negative impact that it may have on during implementation.

72 the environment compared to the benefits Resp: Client Stage: Both Recurrent: Due Frequency Qua Status: In that it will provide. The public work Date: : rterl Progres activities can lead to restrictions in access y s to areas being rehabilitated. In addition, they could cause noise, create basic safety risks, and require handling and management of waste. The cash transfer pilot could create minor conflicts in the community, given the scope of the needs relative to the resources available to the project. Program and Donor Rating Low Description: Risk Management: No other donors are co-financing this The project will be designed on an adjustable scale in order to be expanded if additional resources intervention. become available. Resp: Client Stage: Prepa Recurrent: Due 12-Jun-2017 Frequency Status: Compl ration Date: : eted Delivery Monitoring and Rating High Sustainability Description: Risk Management:

The budget includes provisions for the recruitment of a monitoring consultant who will provide Capacity of the CFS to effectively technical assistance to the CFS coordinate project implementation has yet to be assessed. Resp: Client Stage: Prepa Recurrent: Due 04-Apr-2012 Frequency Status: Compl ration Date: : eted The fiscal space has often been a major Risk Management: constraint in financing safety net interventions in low-income countries such A parallel TA grant will fund technical studies that could inform government decisions on gradually as Guinea, and hence their long term increasing the share allocated to safety nets in the transfers as its fiscal space improves. sustainability. Resp: Bank Stage: Imple Recurrent: Due 31-Jul-2015 Frequency Status: Not menta Date: : Yet tion Due 5. Project Team Proposed Rating Before Review

73 Implementation Risk Preparation Risk Rating: High High Rating: Description: Description: There is no experience with safety net systems in Guinea. Governance This safety net intervention is the first of its scope and type in Guinea. risks are high, and capacity is limited. 6. Overall Risk Implementation Risk Preparation Risk Rating: High High Rating: Description: Description: Significant risks may have a relevant impact on project implementation This risk stems from poor capacity and coordination within the State and and because of Guinea‘s condition of fragile state the likelihood of their line ministries working in the social sectors. In the short term, the project occurrence is high. The project will introduce and implement adequate will build on existing interventions utilizing the systems and mitigation risk measures. The ORAF attached in Annex 1 provides methodologies that are already in place, and have shown positive results further details. (e.g. public work programs implemented by the PIU of the PDU3). Nondisclosable Information for Management Attention (Optional) Comments: This risk stems from poor capacity and coordination within the State and line ministries working in the social sectors. In the short term, the project will build on existing interventions utilizing the systems and methodologies that are already in place, and have shown positive results (e.g. public work programs implemented by the PCU of the PDU3).

74 Annex 5: Implementation Support Plan Guinea: Productive Social Safety Net Project

1. The strategy and approach for implementation support address the main risks of the project and are geared to ensure the achievement of its development objective. Project-level risks regarding the labor intensive public works (LIPW) are limited because the design of the component benefited from the rapid evaluation of a similar intervention in the country. However, implementing other project activities, including the life skills development and the pilot cash transfer face higher risks, will require extensive support from the World Bank. The implementation support plan will rely on in-depth preparation, decentralized supervision, appropriate fiduciary oversight, and increased partnership with the United Nations Children‘s Fund (UNICEF), the International Labor Organization (ILO), as well as adequate Bank technical assistance/technical support activities.

 Preparation. The LIPW and life skills development sub-component benefited from extensive input from the ILO during its elaboration. The project would continue to rely on technical input from this partner for supervision and assistance during implementation. UNICEF contributed substantial expertise to the design of the pilot cash transfer (CT). Additional support may be required as this key partner facilitates the first operation of cash transfer in the country. The pilot will rely on the establishment of efficient targeting, registration and payment mechanisms, and monitoring and evaluation (M&E) system. A rigorous impact evaluation of this component will be critical to draw lessons that will inform a potential scale up of the intervention. Project supervision by the client. Client supervision will take place at different levels: (i) the Project Coordination Unit of the PCU/PDU3 will supervise LIPW and skills development implementation and report to the Safety Net Unit (CFS); (ii) UNICEF will supervise cash transfer activities and report to the CFS; and (iii) the CFS will consolidate all reports for submission to the Bank, and will also conduct project supervision. Communities themselves will be part of mechanisms that will be set up to strengthen social accountability and foster demand- driven governance. Local and national authorities including the municipalities, the Directorate of Urban Development And Housing (both national and regional), the Ministries of Health and Education, and technical services of line ministries at the local level will also be involved in project supervision.

 Grievance management system. As part of the project, an efficient and cost-effective grievance management system will be designed, established, and maintained. The objective is to achieve accountability in the interventions, and to provide a vehicle for addressing complaints and grievances that arise during the implementation process. Communities (beneficiaries and non-beneficiaries) will have access to the system, which will also be important to manage fiduciary risks and enhance social accountability, to detect inclusions and exclusion errors, and corruption and to intervene accordingly.

75  Frequency and scope of fiduciary oversight. Bank procurement and financial management (FM) specialists will provide ongoing support to the staff of the implementing agencies and the CFS to ensure transparent and rigorous procurement processes and financial management.

 FM Implementation Support: The project will be supervised with a risk-based approach. Supervision will focus on the status of the FM system, to verify whether the system continues to operate well, and provide support where needed. It will comprise, inter alia, the review of audit reports and interim financial reports (IFR), advice to task team on all FM issues, and the review of annual audited financial statements and management letters. Based on the current risk assessment, there will be two on-site supervision visits per year during implementation and a review of transactions will be performed on that occasion. In addition to the yearly on-site missions, the FM staff will provide advice on possible issues raised during the task team supervision missions.

 Role of partners. There is strong commitment and ownership by the government on the project. The government created a National Social Protection Group with the objective of moving forward social protection dialogue and developing a national social protection strategy, including a safety net strategy. UNICEF will play a key role in the implementation of the cash transfer program by contributing to beneficiary identification, and will be in charge of supporting the government in designing, implementing, and supervising the training activities on nutrition, health, and hygiene that constitute the conditionality for receiving the cash transfers.

 Technical support. A parallel technical assistance grant will enable the Bank to provide extensive technical support, particularly for the pilot cash transfer. Additional trust fund money will be sought as needed to secure Bank-executed funds, which could help provide technical support to the implementing agencies. The Bank, through a partnership with its Economic Research Department, will provide assistance on the impact evaluation of the pilot.

Implementation Support Plan

2. The World Bank is well placed to provide implementation support based on its worldwide experience with safety net operations, in particular cash transfers and labor intensive public works programs. UNICEF will provide additional technical support in the complementary training to be provided to beneficiary households given its comparative advantage on issues related to children‘s health, nutrition, and hygiene.

76

Time Focus Skills Needed Resource Estimate Partner Role First twelve LIPW and life skills LIPW and skills Bank ILO will provide months development: development: TTL/operation support in the elaboration of Experience officer and design and curriculum for life designing consultants – 36 implementation of skills development curriculum for life Staff week (SW) the life skills skills development development sub- in countries FM specialist – 12 component comparable to SW Guinea Procurement specialist – 12 SW

Pilot cash Disbursement Pilot cash transfer: all transfers: specialist- 12 SW implementation Experience in UNICEF will design and fiduciary designing pilot Social safeguard – design and aspects- mainly cash transfer 2 SW implement of related to establishing projects conditionality for the targeting, Environmental the CT for grievance and Technical safeguards – 2 SW education (trainings payment systems for knowledge on on health, nutrition the cash transfers. targeting, Impact evaluation and hygiene) registration, and specialist- 6 SW payment mechanisms, and on M&E

12-24 months All projects Intensive support Bank UNICEF facilitates components are to implementation TTL/operation the implementation implemented analysts and of the CT Ensuring consultants - 36 satisfactory SW progress towards achieving project FM specialist – 12 goals and SW objectives Procurement specialist – 12 SW

Social safeguard – 1 SW

Environmental safeguards – 1 SW

M&E specialist- 10 SW

77 Communication specialist- 5 SW

24-36 months Lessons learned from Support to Bank Bank will provide MTR are implementation TTL/Operations support through its implemented through officer and budget action plan to ensure Fiduciary and Consultants- 36 SW a continued safeguards satisfactory project specialists support FM specialist- 10 rating towards in supervising SW achieving the PDO compliance with Bank requirements Procurement specialist- 10 SW Expertise in evaluating the Social safeguards impact of LIPW specialist- 2 SW and cash transfer interventions Environmental safeguards specialist- 2 SW

Communication specialist- 1 SW

M&E specialist- 12 SW

3. The implementation support plan will be reviewed at least once a year to ensure that it continues to meet the implementation support needs of the project.

Skills Mix Required

Skills Needed Number of Staff Number of Trips Comments Weeks TTL 15 SW annually At least 3 the first year, at Based in Cote d‘Ivoire least 2 the following years STC (social protection 10 SW Based in Guinea (to be specialist) recruited) M&E Specialist 10 SW (first 2 years) 1 or 2 Based in HQ Operation Officer 8 SW 1 Based in HQ Specialist in cash 3 SW annually 2 the first year, 1 the To be recruited transfers (Cons) following years PR specialist 12 SW annually 2 annually Based in Guinea FM specialist 10 SW annually 1 annually Based in Senegal Social safeguard 2 SW annually 1 annually Based in HQ specialist Env. safeguards 2 SW annually 1 or 2 as required Based in Senegal specialist

78 Partners Name Institution/Country Role UNICEF UNICEF- Guinea Implementing agency of the cash transfers ILO ILO Provides technical support for the preparation of the LIPW and life skills development component as needed PDU3 Ministry of Urban Development and Implementing agency of the LIPW Housing-Guinea and life skills development National Office for Ministry of Labor and Professional Executing agency for the life skills Professional Training Training- Guinea development sub-component

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Annex 6: Team Composition Guinea: Productive Social Safety Net Project

Bank Staff Name Title Unit Josiane M. S. Luchmun Program Assistant AFTSP Philippe Leite Economist HDNSP Damien de Walque Senior Economist DECHD Wolfgang M. T. Chadab Senior Finance Officer CTRLA Azedine Ouerghi HD Sector Leader AFTSP Africa Eshogba Olojoba Senior Environmental Specialist AFTEN Anna Victoria Gyllerup Senior Operations Officer AFTDE Thierno Hamidou Diallo Disbursement Assistant AFMGN Alpha Mamoudou Bah Procurement Specialist AFTPC Anthony Molle Senior Counsel LEGAF Mamadou Saliou Diallo Communications Associate AFRSC Fanta Touré Operations Officer AFTSP Salimatou Bah-Drame Program Assistant AFMGN Celestin Niamien Financial Management Specialist AFTFM Yacouba Konaté Social Development Specialist AFTTR Meera Shekar Lead Health Specialist AFTHE

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Annex 7: Governance and Accountability Action Plan Guinea: Productive Social Safety Net Project

1. Any reduction in the intended amount of money that goes to the beneficiaries diminishes the economic efficiency of safety net interventions and erodes political support for the program. Because the Guinea Productive Social Safety Net Project will channel public resources through a large number of transactions, ensuring that these reach the intended beneficiaries is very important. In assessing governance risks, the team took into consideration five key risks related to: (i) clarity over the rules of the game; (ii) clarity over the roles and responsibilities of all stakeholders involved in the program; (iii) targeting efficiency; (iv) getting the intended amount to the beneficiaries; and (v) promoting effectiveness in project management and accountability to local communities.

2. Rules of the game: A Country Procurement Assessment Report was carried out in February 2002 and flagged key issues such as, limited capacity of recipient staff, the absence of standard bidding documents at the national level, the insufficient capacity of local contractors for contracts subject to international competitive bidding (ICB), and corruption. Recommendations were made to address these issues. The Bank, through an IDF (TF 55853) signed in November 2005, provided support on the public procurement reform. The main objectives were to: (i) enhance transparency of the procurement system; (ii) put in place the new institutional framework (public procurement directorate controlling procurement transactions, public procurement regulatory body including an appeal committee for complaints); (iii) an update of the procurement code; and (iv) design of standard bidding documents. On March 2009, the legal framework was revisited and the procurement law and the new procurement code were drafted. These documents were validated in September 2011 during a national workshop that was attended by representatives from the government, civil society, and the private sector. They have yet to be approved by the government.

3. Clarity of roles and responsibilities of all stakeholders involved. Setting clear roles and responsibilities across levels of government and the institutions involved in social protection is another key ingredient for making accountability relationships work. A relatively large number of actors are involved in the implementation of the proposed intervention, hence the importance of establishing institutional relationships and clarifying job descriptions for providers.

4. Targeting efficiency (getting the right people into the project). All safety net programs aim, explicitly or implicitly, to channel their benefits to the poor, or a subset of them, typically the poorest. Risks to efficiency targeting usually consist in inclusion errors (whereby less deserving people are targeted) and exclusion errors (whereby some of the right people are not included). In Guinea, where poverty is deep and widespread, inclusion errors are not a significant source of concern because the difference between the second and third quintile is not that large especially when factoring in vulnerability. On the other hand, there could be some exclusion errors, although these errors are likely to result from the limited scope of the program in relations to the needs.

5. Getting the intended amount to the beneficiaries. Although most safety net programs strive to transfer all their resources to registered beneficiaries in the right amount and at the right

81 time, a fraction is lost to Error, Fraud, and Corruption (EFC).19 The risks of EFC are high in Guinea, where corruption is widespread and experience with cash transfers is limited. Furthermore, the labor intensive public works present significant risks for corruption as far as contract awarding is concerned. Indeed, in the most recent national study on corruption conducted in the country in 2003,20 over 40 percent local contractors report having been subjected to bribes to be awarded contracts.

6. Improving accountability and transparency in project management and accountability to local communities. The above-mentioned study on corruption indicates low trust in government institutions, due to the widespread nature of corruption and lack of transparency in decision making. As such, strengthening accountability and transparency in the management of the Productive Social Safety Net project will be key to building trust with the communities (beneficiaries and non-beneficiaries alike), addressing the ―perception of corruption,‖ and creating an enabling environment for the project to perform well.

7. The table below shows the mitigation measures that have been designed to address the above-mentioned issues. These mitigation measures along with control processes for beneficiaries‘ registration, targeting, and payments are described in detail in the corresponding sections of the Project Implementation Manual.

19 Error is an unintentional violation of program or benefit rules that results in the wrong benefit amount being paid or in payment to an ineligible applicant. Official errors are due to staff mistakes, and customer errors occur when customers inadvertently provide incorrect information. Fraud occurs when a claimant deliberately makes a false statement or conceals or distorts relevant information regarding program eligibility or level of benefits. Corruption is intentional abuses by the program management staff, payment agencies, etc. 20 National Corruption and Governance Survey 2003 (Enquête nationale sur la corruption et la gouvernance en Guinée. ENAGCOG, 2003).

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Governance and Accountability Matrix

Issue Agreed Actions/Activities Person/Agency

Responsible for

Implementation

Milestones Preparation/ Implementation Status Year 1 2 3 4 5 6 Component 1: LIPW and Soft Skills Trainings Rules of the Bank procurement rules, policies, CFS x x x x x x game and guidelines will apply to strengthen fiduciary control. The Bank is implementing an Bank-funded x x x x x x economic governance project to economic strengthen the fiduciary governance environment. project Roles and The project implementation manual CFS x responsibilities (PIM) includes an organigram that clearly defines the roles and responsibilities of all actors involved in implementation. A memorandum is signed between MEF; MUDH x the Ministry of Economy and Finance (institutional anchorage of the CFS) and the Ministry of Urban Development and Housing (institutional anchorage of the PCU/PDU3) to allow the PDU3 to provide technical support to the CFS. This memorandum clearly lays out the institutional link between the two parties, as well as the roles and responsibilities of each. PDU3/CFS/UNICEF will receive a CFS/PDU3 x short training on the PIM to have a clear understanding of the lines of reporting and institutional relationships among actors involved in the project. Getting the The PDU3 will supervise the PDU3 x x x x x right people targeting process to ensure into the LIPW consistency with the process described in the project implementation. The project will be implemented in CFS x x x x x poor neighborhoods in the seven regional capitals of the country and in Conakry to ensure selection of the

83 most vulnerable and that assets are created in poor neighborhoods. For beneficiary selection, self- PDU3 x x x x x targeting should discourage less vulnerable households from participating. Additional poverty criteria will be adopted when too many eligible participants apply. CFS staff will conduct informal and CFS x x x x x random targeting assessments and spot checks (conducted in the absence of PDU3 staff). The internal auditor21 will conduct CFS x x x x x x random assessment of 10% of registered beneficiaries to confirm their eligibility to the project. Getting the The contractors recruited for the Contractors x x x x x intended execution of the micro-projects will amount to the be responsible for beneficiary beneficiaries payments given their demonstrated experience in conducting this task and given their track record in terms of integrity. All beneficiaries will have a Contractors x x x x x contract spelling hiring conditions to facilitate monitoring, and on the basis of which they will be paid. Payment processing information CFS x x x x x x will be verified (reconciled) against the list of eligible beneficiaries using the program‘s monitoring. Effective and confidential grievance CFS x x x x x x mechanisms will be established to enable beneficiaries to voice their complaints. External audits of records kept by CFS and x x x x x the project and the payment external audit agencies will be conducted. firms Reducing risks The Bank‘s procurement procedures CFS x x x x x of corruption and guidelines will apply for the in contract selection of the local entrepreneurs awarding and in contract awarding to increase transparency and reduce risks of corruption. Key information about the project CFS x x x x x will be shared with potential contractors to encourage them to apply. Effective and confidential grievance CFS x x x x x x mechanisms will be established to enable contractors to voice their complaints.

21 Internal auditor independence is maintained through: (i) ToRs, (ii) internal auditor charter, and (iii) compliance with international standards on internal auditing and code of ethics.

84 Component 2: Pilot Cash Transfers Rules of the The CFS, UNICEF, and local UNICEF x x x x x game authorities will conduct a sensitization campaign before any activity is implemented to share information about project objectives, operational mechanisms, eligibility, entry and exit, wage levels, and feedback mechanisms. Roles and The PIM includes an organigram CFS x responsibilities that clearly defines the roles and responsibilities of all actors involved in implementation. A contract with clear ToRs is signed CFS x between the government and UNICEF as a condition of disbursement, affecting the actual transfer of cash to the beneficiaries. The nature of this relationship, reporting modalities, and ToRs are included in the contract. Stakeholders receive a short training CFS/UNICEF x on the PIM to have a clear understanding of the lines of reporting and institutional relationships among all actors involved. Getting the UNICEF will supervise the targeting UNICEF x x x right people process to ensure conformity with into the cash the guidelines spelled out in the transfer pilot implementation manual. The project will be implemented in CFS/UNICEF x x x rural areas with high prevalence of malnutrition and high dropout rates of girls in 5th and 6th grade. Targeting will be conducted based CFS/UNICEF x x on objective eligibility criteria defined in the PAD/project manual in partnership with the technical services of relevant ministries. Community representatives Community x x (including representatives of local representatives NGOs with good knowledge of the and local communities) will validate NGOs beneficiary lists during a public meeting. Beneficiary lists will be displayed in UNICEF x x x the communities. Beneficiary lists will be documented UNICEF x x x in a register that will be managed by UNICEF. CFS staff will conduct informal and CFS x x x random targeting assessments and spot checks (conducted in the absence of UNICEF staff).

85 The Internal auditor of the CFS will CFS x x x conduct random assessments of 10% of registered beneficiaries to confirm their eligibility to the project. Getting the UNICEF will recruit payment UNICEF x intended agencies to transfer the cash to the amount to the beneficiaries. Criteria such as beneficiaries capacity, coverage, ability to conduct regular reporting, integrity, and the traceability of funds transferred to the beneficiaries will be used to select the payment agencies. Each mother of beneficiary children UNICEF x x will receive an identification card with a unique registration number. The ID card will be presented to the payment agents before any payment can be made. Payments will be made publicly in UNICEF, local x x x the presence of local authorities. authorities, UNICEF‘s community-based health and payment workers will randomly attend agencies payment sessions. Payment registries (with beneficiary Payment x x x and witnesses signature) will be agencies systematically submitted to UNICEF for verification. Payment processing information UNICEF x x x will be verified (reconciled) against the list of eligible beneficiaries using the program‘s monitoring. Effective and confidential grievance CFS x mechanisms will be established in the PIM to enable beneficiaries to voice their complaints. Social, internal, and external audits CFS and x x x x of records kept by the project and external audit the payment agencies will be firms conducted. The internal auditor will randomly CFS x x x cross-check 10% of the list of beneficiaries against actual beneficiaries to verify conformity.

Component 3: Project Management Promoting A comprehensive communication CFS x x x x x x effectiveness, strategy will be developed to efficiency, facilitate improved transparency, transparency, efficiency, and accountability. The and strategy will include use of the mass accountability media to effectively communicate in project with the target audiences (including

86 management continuously sharing information about the scope of the project, its objectives, targeting and payment mechanisms, entry and exit strategy, wage levels, feedback mechanisms, grievance systems, etc.). This continuous communication will target beneficiaries as well as non- beneficiaries. It also will include provisions to build trust with the communities. Certain elements of the strategy will be conducted by the project in partnership with the local authorities and implementing agencies. Project information will be CFS x x x x x x disseminated in the communities; websites, radio, and other media will be used to transmit program objectives and results to stakeholders as well as information on the beneficiaries. Technically qualified and MEF x experienced staff (including staff responsible for the fiduciary management of the project) will be recruited at the CFS according to Bank rules and procedures (including procurement and financial management risks) to manage the project. Annual internal and external audits Internal x x x x x x will be required each fiscal year and auditor (CFS); will be issued within six months external audit from the end of the fiscal year. The firms process will include an analysis of the registry records of the beneficiaries, payment records, and random spot checks (conducted in the absence of project staff) to verify the existence of the beneficiaries in the villages. The CFS will produce a CFS x x x x x x consolidated quarterly status and annual report related to progress on implementation. These reports will include updates on implementing the governance and accountability action plan. A report template will be agreed upon with the Bank before project implementation. Increasing Beneficiary satisfaction surveys will Third party x x x x x accountability be conducted annually to gather recruited by to local information on program CFS to communities performance, including the conduct the performance of the targeting and survey. Civil

87 payment systems. society will be asked to participate in this survey. A robust financial management CFS x system consistent with Bank rules, and guidelines will be established. The CFS will comprise four fiduciary staff (administrative and financial management specialist, procurement specialist, an internal auditor, and an accountant) who will be recruited according to Bank rules and procedures. Communities will be involved in Communes; x x x x x x beneficiary selection (through the community validation of the lists proposed), representatives micro-project selections, and project implementation.

88

ANNEX 8: Weaving the Social Safety Net in Guinea In Support of Reforms and Beyond

Background 1. Despite its rich endowment of natural resources, Guinea is one of the world‘s poorest countries. Recent estimates suggest that over half of the population is now poor, with inflation and currency depreciation eroding revenues, especially in urban areas. The 2008 food and fuel crisis might have pushed the poverty index upwards. The effects of the crises were also exacerbated by governance problems and an unstable political context, which lead to a military coup in December 2008. Economic performance in Guinea has deteriorated significantly. Real GDP grew by 1.8 percent in 2007 and 4.9 percent in 2008 while the population grew at the rate 2.6 percent per year. In 2009 and 2010, Guinea‘s macroeconomic performance worsened due to the unstable political situation and the impact of the global slowdown. Two-thirds of Guineans rely on agriculture as their primary source of income. Despite this, agriculture, livestock, and fisheries account for only 20 percent of GDP and 10 percent of exports. Most production is for direct consumption and a poor road network precludes getting produce to the markets.

2. After years of military dictatorship and instability, Guinea‘s first democratically elected president assumed power in December 2010. The new government was elected on a platform of radical break with the practices of the former military regime. Its vision is to transform Guinea‘s political and economic governance, in order to start reaping and sharing the benefits of its very rich agricultural and geological endowment in an equitable and inclusive way.

3. However, the country faces serious challenges. The population has high expectations following the first free elections since independence in 1958, but the political environment will remain fragile. In particular, painful reforms are needed to put back the country on the track of sustainable growth and development. Furthermore, and in addition to the urgent need to narrow the huge fiscal gap (estimated at about 15 percent of GDP in February 2011), Guinea is facing new external shocks due to the looming food and fuel price increases. This will put additional pressure on an already very poor and vulnerable population, further threatening the fragile socio- economic and political situation. Chronically vulnerable households in Guinea lacked adequate risk-coping instruments to withstand shocks; they rely largely on informal safety nets, which tend to be insufficient in high poverty contexts and during large covariate shocks.

Brief poverty and vulnerability diagnosis

4. Low human development indicators: Chronic malnutrition in 2007 was 36 percent, up from the previous survey in 2002. Less than 16 percent of the population consulted health care workers. Malaria remains the leading cause of morbidity and mortality among children. The infant mortality rate is 101 per 1,000 (2004) and the maternal mortality rate is one the highest in Africa at 740 per 100,000. The gross enrolment rate has stagnated at around 83 percent since 2007 ), and for girls, at around 77 percent. The dropout rate, on the other hand, shot up from 5.9 percent in 2007 to 11.6 percent in 2010, and as a result, the primary completion rate fell to 58 percent in 2011. Enrolment in secondary schools has also remained flat at about 44 and 25 percent GER respectively for secondary 1 and 2 since 2007.

89 5. High prevalence of poverty: The last household survey undertaken in 2007 suggested that more than half – 53 percent – of the population was living below the poverty line, up from 49 percent in 2002.The proportion of the rural population living below the poverty line was 63 percent, versus 31 percent for the urban population. The survey also indicated that although favorable trends were observed in a number of key social indicators (e.g., the gross and net enrollment ratio both in primary and secondary schools, the rate of accessibility to health center, the share of women having used prenatal care, and the share of assisted birth), these indicators remain very low. Furthermore, the percentage of children suffering from chronic malnutrition had increasing, from 33 to 36 percent. Given macroeconomic developments since 2006, it is likely that poverty further increased. Using the household 2007 survey and an estimated cumulative decline in average per capita private consumption of 6.4 percent, the poverty rate would have reached 58 percent in 2010 (assuming the decline affected all households in similar proportion).

Table A8.1. Evolution of Urban and Rural Poverty, 1994-2007 Poverty 1994 2002 2007 Urban Rural Total Urban Rural Total Urban Rural Total Incidence 17.5 82.1 62.6 23.5 59.9 49.1 30.5 63.0 53.0 Gap 4.2 39.1 28.5 6.0 21.9 17.2 7.7 22.0 17.6 Severity 1.5 22.5 16.1 2.4 10.5 8.1 3.0 10.5 8.2 Source : Prospere Backiny-Yetna and Quentin Wodon- Draft May 2010 based on the 2007 ELEP survey.

6. Poverty profile: The population in Guinea is relatively young (one in two people are 16 years old or younger and only 4.5 percent are 65 years old or older), largely rural (69.3 percent), and in general engaged in subsistence agriculture and the informal sector, with a pointedly low education level among heads of households (three out of four people live in a household headed by a member with no education). The poverty profile seems to follow similar defining features. First, the characteristics of the heads of household are tightly associated with high incidence of poverty. A large share of the poor live in households headed by a member 40 year old or older (82.9 percent of the poor), without education (79.9 percent of the poor), or farmers (68 percent) who largely practice subsistance agriculture. Second, poverty is associated with the geographic location of households. According to the 2007 survey, 82.3 percent of the poor are located in rural areas with a poverty incidence of 63 percent compared to 30.5 percent in urban areas which house 17.7 percent of the country‘s poor. While poverty incidence is notably low in Conakry (26.3 percent), it is consistently high in the other regions ranging from 50 to 64 percent. Three out of the seven regions (Kankan, Kindia, and N'Zérékoré) house close to 55 percent of the poor in Guinea.

90 Table A8.2. Poverty Profile, 2007

Factors Poverty Structure

Incidence Gap Severity Total Population The Poor Residence Rural 63.0 22.0 10.5 69.3 82.3 Urban 30.5 7.7 3.0 30.7 17.7 Region Boké 52.0 15.7 6.8 10.3 10.1 Conakry 26.3 6.1 2.2 17.8 8.9 Faranah 53.0 14.9 6.1 8.5 8.5 Kankan 58.7 24.0 13.4 13.0 14.4 Kindia 64.1 25.0 12.5 15.5 18.7 Labé 59.8 17.8 7.4 9.6 10.8 Mamou 50.1 16.2 7.2 7.7 7.3 N'Zérékoré 64.3 20.8 9.2 17.7 21.4 Sex of Household (HH) Head Male 54.1 18.2 8.5 85.5 87.3 Female 46.4 14.1 5.9 14.5 12.7 Age of HH Head Less than 30 years old 48.0 13.6 5.2 2.6 2.3 30-39 years old 53.2 17.6 8.1 14.6 14.7 40-49 years old 52.3 17.0 7.7 25.2 24.8 50-59 years old 53.4 17.7 8.5 26.0 26.2 60 years old or older 53.5 18.3 8.6 31.6 31.9 Education Level of HH Head Without Education 57.7 19.3 9.0 73.4 79.9 Primary 49.8 16.7 7.6 9.9 9.3 Middle School 48.6 16.8 8.2 6.4 5.9 High School 35.7 8.0 3.1 2.3 1.5 Trade School 25.7 8.2 4.1 3.8 1.9 High School 19.9 4.6 1.8 4.2 1.6 GSE du chef Salaried Public Sector 30.4 9.5 4.8 7.0 4.0 Salaried Private Sector 30.8 7.5 2.8 4.6 2.6 Independent Farmer 64.9 22.8 10.9 55.7 68.2 Independent Non-farmer 37.9 10.6 4.3 21.7 15.5 Unemployed 46.3 14.4 6.2 11.1 9.7 Total 53.0 17.6 8.2 100.0 100.0 Source : Prospere Backiny-Yetna and Quentin Wodon- Draft May 2010 based on the 2007 ELEP survey.

7. Poverty and consumption patterns: The 2007 survey revealed significant differences between household expenditure across several aspects, including by quintile (a ratio of 5 between the fifth and the first quintile), poverty (a ratio of 2.5 between the poor and non-poor), and location (a ratio of 1.5 between urban and rural). The level of expenditure in the capital city of Conakry is situated between those of the fourth and fifth quintile (Table A8.3 below). However, when looking at the composition of expenditure by food and non-food items, a significant finding comes to light. The share of food items is consistently high across quintiles (ranging

91 from 67 to 76 percent), between non-poor and poor (69.9 and 75.2 percent respectively) and across locations (77.5 percent in rural areas and 62.8 percent urban dwelling with the lowest share of 59.2 percent observed in Conakry).22 This denotes a high vulnerability to food price fluctuations.

8. A further refinement of the analysis showed, however, a significant difference between income quintiles and geographic location in terms of self-produced consumed food. The ratio of self-produced consumed food over the total food consumption is about 20 percentage points between the first and fifth quintile. Close to 50 percent of the total food consumed by rural households is self-produced compared to 16.2 percent in urban areas (excluding Conakry) and as low as 5.7 percent in Conakry. This raises two issues. In view of the large proportion of food expenditure in the overall household consumption described above, urban households and in particular those residing in Conakry are much more vulnerable to food price fluctuations. Rural households may appear to be relatively protected against direct price hikes, yet they suffer a high opportunity cost as they could benefit from price increases if they sell their products. The share of the imputed rent in total household consumption is rather small across key characteristics (see Table A8.3).

Table A8.3. Household Expenditure, 2007

-

-

food food

-

food

Food

Total Total Items

Items

on Food Food on

Share of of Share

Imputed Imputed

n Non n onsumption/ onsumption/

Rent/Total

o

Expenditure Expenditure Expenditure Expenditure

Share of Self of Share

Share of Non of Share

Share of Food of Share C FGN per Capita per Year (2007) Share (%) (%) (%) Quintile 1 519,162 181,756 700,918 74.1 25.9 100 48.1% 2.8% 2 884,345 279,478 1,163,823 76.0 24.0 100 44.3% 2.1% 3 1,148,086 386,300 1,534,387 74.8 25.2 100 40.0% 1.8% 4 1,507,238 537,176 2,044,414 73.7 26.3 100 35.7% 1.6% 5 2,356,938 1,163,025 3,519,963 67.0 33.0 100 28.0% 1.4% Poverty Poor 800,046 263,246 1,063,292 75.2 24.8 100 Non-poor 1,828,250 787,436 2,615,686 69.9 30.1 100 Location Rural 1,197,564 347,603 1,545,167 77.5 22.5 100 Urban 1,476,071 874,453 2,350,524 62.8 37.2 100 Location Conakry 1,477,272 1,018,502 2,495,774 59.2 40.8 100 5.7% 1.8% Other 16.2% 1.8% urban 1,474,414 675,611 2,150,026 68.6 31.4 100 Rural 1,197,564 347,603 1,545,167 77.5 22.5 100 49.9% 1.7%

TOTAL 1,283,174 509,550 1,792,725 71.6 28.4 100 35.8% 1.7% Source: World Bank Staff calculations based on 2007 ELEP survey.

22 The National Institute of Statistics uses a weight of 0.37 for food items in the household consumption basket to calculate price indices.

92 9. High vulnerability to shocks: The consumption of essential food items (rice, maize, oil, fish, meat, and vegetables) in total consumption is high and very similar across households (at about 45 percent), with the exception of the richest quintile (37 percent). As such, increases in the relative price of essential food commodities, the result of global commodities prices increases, would significantly affect the poor and near poor, as observed in 2008. In contrast, the consumption of petroleum products (for lightning and transportation, public and private) is strongly differentiated between poor (2.5 percent of their total consumption) and non-poor (5.7 percent of their total consumption). Thus, a 30 percent increase in petroleum prices (including a 15 percent increase of public transports) would entail a decline of about 1.3 percent in the purchasing power of poor households, versus 2.9 percent for non-poor (1.9 percent for the fourth quintile and 3.7 percent for the richest quintile). The impact would also be significantly differentiated between rural and urban areas, 1.5 versus 3.7 percent.

Table A8.4. Estimated Household Vulnerability to Various Price Shocks (Negative and Positive) Imported Rice (+5%) Flour and Oil (-13%) Petroleum (+30%) Prices Purchasing Nominal Purchasing Nominal Purchasing Nominal Power Amount ($) Power Amount ($) Power Amount ($)

Quintile 1 -0.2% -0.3 0.0% 0.1 -1.1% -1.7 Quintile 2 -0.3% -0.7 0.0% 0.1 -1.3% -3.4 Quintile 3 -0.3% -0.9 0.1% 0.2 -1.5% -5.2 Quintile 4 -0.2% -1.1 0.1% 0.3 -1.9% -8.6 Quintile 5 -0.2% -1.4 0.1% 0.5 -3.7% -29.1

Poor -0.2% -0.6 0.0% 0.1 -1.3% -3.0 Non-poor -0.2% -1.2 0.1% 0.4 -2.9% -17.0

Rural -0.2% -0.8 0.0% 0.2 -1.5% -5.2 Urban -0.2% -1.2 0.1% 0.5 -3.7% -19.5

Average -0.2% -0.9 0.1% 0.2 -1.9% -9.6 Source: World Bank Staff calculations (2012).

Poverty and food security

10. The World Food Program (WFP) developed a conceptual framework to assess the extent to which households are food insecure based on a food consumption score. This indicator is based on the diversity of the household‘s diet, frequency of food items‘ consumption, and nutritional values of consumed food groups. WFP surveys indicate that the food security of rural households worsened between 2005 and 2009. In this last year, the proportion of rural households suffering food insecurity doubled from 16 to 32 percent and affected about 2.3 million people. Food insecurity has a regional dimension and predominantly affects the poor. The regions of N'Zérékoré (52.7 percent are food insecure), Labé (38 percent), and Mamou (31.3 percent) were the most affected. Table A8.5 below shows that almost half of the households in the poorest quintile were food insecure, whereas only 17.5 percent of the richest quintile suffered from a similar situation.

93 11. According to the same WFP survey (2009), food insecure households adopt coping strategies that seem to affect their food security further. This is especially true among the poorest. The three most frequent coping mechanisms cited by households were: (i) shifting to less preferred food items because they cost less (48 percent); (ii) reducing food quantity during meals (40 percent); and (iii) reducting the number of meals per day (30 percent).23 The poor are the most affected. The survey showed that the same coping mechanisms, respectively, accounted for 65, 51, and 35 percent among the poorest quintile.

12. A similar survey conducted by WFP in the second half of 2009 focused on the capital city, Conakry. It found that only 6.4 percent of the households were food insecure, ranging from 7.1 percent for the poorest quintile to 3.3 percent for the richest quintile. The same survey found that during hard times, households tended to rely on relatives and family members (78 percent) and/or coworkers and colleagues (32 percent). Government support was among the last of the list (1.4 to 3.6 percent).

Table A8.5. Food Insecure Share of the Population, 2009

Qunitile Food Insecure Share of the Population Rural Areas Conakry 1 48.8 7.1 2 38.5 8.1 3 31.5 5.7 4 24.0 4.4 5 17.5 3.3 Average 32.1 5.7 Source: WFP National Food Security Survey 2010. The rural survey was conducted in early 2009 and the Conakry survey was conducted during the second half of 2009.

Perception of poverty

13. The household perception of poverty and vulnerability also follows a similar trend, that is, a perceived deterioration in particular among the poorest and urban dwellers (see Table A8.6). Over half of the population reported a reduced level of satisfaction of their needs over the five years preceding the 2007 survey: The poorest quintile reported 10 percentage points higher than the richest quintile. In urban areas the poorest quintile reported close to 24 percentage points higher than the region‘s average of about 50 percent who reported degradation. The disparity between income levels in rural areas is less marked than that observed in urban areas (58 percent for the poorest quintile versus 43 percent for the richest quintile). This disparity between urban and rural areas may also be influenced by the price increase of purchased essential food items. For example, between December 2009 and 2010, households in Conakry witnessed a jump of 40- 50 percent in prices in nominal terms for such essential items such as rice, maize flour, oil, meat, and fish.

23 Households were asked to cite the coping mechanisms they adopted for the seven days preceding the interview. Households may adopt several mechanisms simultaneously and therefore the total answer could exceed 100 percent.

94 Table A8.6. Ability to Meet Household Needs in the Last Five Years, 2007

Poorer Q2 Q3 Q4 Richer Total Conakry Improved 12.08 6.63 7.28 12.49 14.57 11.71 Steady 12.76 21.38 30.72 40.74 44.46 36.8 Deteriorated 73.96 71.79 61.41 44.94 39.92 50.4 Undeclared 1.19 0.20 0.59 1.83 1.05 1.09 Total 100.00 100.00 100.00 100.00 100.00 100.00 Other Urban Improved 8.11 5.85 6.75 9.5 16.81 10.51 Steady 17.42 41.08 35.83 39.73 46.47 39.04 Deteriorated 73.88 51.84 56.78 50.37 36.3 49.87 Undeclared 0.58 1.22 0.65 0.40 0.42 0.59 Total 100.00 100.00 100.00 100.00 100.00 100.00 Rural Improved 9.09 11.30 9.32 10.48 14.91 10.65 Steady 31.66 36.15 39.15 42.58 40.62 37.3 Deteriorated 58.69 51.53 51.04 45.81 43.22 51.21 Undeclared 0.56 1.02 0.49 1.13 1.25 0.84 Total 100.00 100.00 100.00 100.00 100.00 100.00 National Improved 9.17 10.31 8.70 10.78 15.15 10.82 Steady 29.9 35.11 37.45 41.63 43.09 37.43 Deteriorated 60.34 53.62 53.33 46.42 40.73 50.89 Undeclared 0.59 0.96 0.52 1.17 1.02 0.85 Total 100.00 100.00 100.00 100.00 100.00 100.00 Prospere Backiny-Yetna and Quentin Wodon- Draft May 2010 based on the 2007 ELEP survey.

Policy implications

14. Guinea faces serious challenges. It needs to stabilize its economy, including narrowing its fiscal gap, while protecting its already impoverished populations from shocks, maintain social peace, and respond to high expectations of quickly reaping dividends from the nascent democracy. Social safety nets can play an important role. Social safety nets can be defined as private (both formal and informal) and public initiatives that connect men and women to labor markets, reduce people‘s exposure to risks, enhance their capacity to protect themselves against hazards and loss of income that threaten their present and future well-being, and increase their resilience to take advantage of economic growth opportunities.

15. The poverty and vulnerability analysis presented above clearly indicates that Guinea needs differentiated approaches to respond to the needs of various groups. In rural areas where poverty is combined with food insecurity, protecting the human capital from depletion especially among children should be a priority in the short term. In this regard, interventions can play an important role not only in improving food security for children but also in promoting education, especially among young girls. In parallel, interventions aimed at creating rural assets and improving agricultural productivity should be pursued. In urban areas, where the poor are most vulnerable to price fluctuations, increasing their earning capacity should be a priority. Public works programs could play an important role in the short term not only through temporary work opportunities for the poor but also through rehabilitation and creation of urban assets. In parallel increasing people‘s skills and capacity should be pursued so they can take advantage of opportunities as the economy develops.

95 16. Fortunately, Guinea has experience in this type of programs – an established foundation from which to build on. That being said, the country has very limited or no experience in other programs capable of reaching those left out of public works programs (e.g., the poorest who are not capable of participating in works programs, low paid public sector workers who may be affected by sudden price increase in food items or transport, etc.). Piloting innovative, targeted cash transfer programs should be explored.

Review of existing safety net programs in Guinea

17. Guinea’s social safety net system is very limited in scope, coverage, and effectiveness. The country has largely relied on an informal system (solidarity) that is ineffective in wide-spread poverty and tends to collapse during large-scale and generalized shocks. Formal social safety net interventions are small-scale, scattered, and largely driven by donors and NGOs. Two types of interventions emerge as the main safety net system in Guinea: public works programs and school feeding programs.

Public works programs

18. Introduced in the early 1990‘s, public works programs (PWP) have evolved over time, equipping Guinea with a rich experience both in terms of sectors (basic infrastructure, rehabilitation, agriculture and environment) and regions (urban and rural). Only recently did safety nets begin to focus on PWPs, especially in the aftermath of 2008 food and fuel crisis (focused on Conakry) and the refugee influx following the unrest in Sierra Leone and Liberia (focused in Guinea Forestière). They generally provided cash or food for work or for training and in some cases, they targeted youth. The programs have been supported by such international organizations as WFP, UNIDO, UNDP, ILO, and the Bank. A quick review is presented below.

19. Urban Development Program (Programme de Développement Urbain - PDU). The World Bank supported an emergency program to mitigate the impact of the 2008 food and fuel crisis through its PDU3 with an amount of US$2.5 million. The program targets a selected number of poor neighborhoods in Conakry with the objective of providing temporary jobs in exchange of basic infrastructure rehabilitation (flood water drainage, improved accessibility, etc.). The project uses local SMEs to deliver the program and involves local communities and authorities. About US$500,000 remains in the budget and is expected to be disbursed by June 30, 2013. On December 31, 2011, the project had delivered over 320,000 person-days of work, the equivalent of 1,280 full-time jobs (on the basis of 250 days per year). Since the project was designed to provide on average two months of work to program participants, about 5,300 workers would be involved. About US$1.6 million or 63 percent of the cost is directly transferred as salary to the program participants over the three-year period of the project (effective in October 2008 and expected to complete December 2011). Operationally, the project seems to have been quite successful in terms of targeting beneficiaries, contracting procedures, involvement of local authorities, etc. It also achieved noticeable improvements, especially in flood-water drainage in certain neighborhoods (based on mission interviews). However, challenges remain and in particular with regard to clear understanding of the program objectives and operations among program participants and communities on one hand and on the sustainability of delivered services on the other hand. The biggest limitation of this program is

96 its scale both in terms of geographic coverage and allocated financial resources as it is too small to make any noticeable impact.

20. National Rural Infrastructure Program (Programme National d’Infrastructure Rurale - PNIR). This World Bank program involves a series of PNIR that started 1992 with the objective of building rural infrastructure premised on the concept of public works. The public works component in PNIR2 (launched in 2006 and suspended in 2008) has a budget of US$4 million with a disbursement rate of about 20 percent. The project team estimates a much faster execution pace once operations resume due to a large number of expected contracts that could be completed in three month. Due to the nature of the activities (rehabilitation and construction of rural roads as primary objective), the share of salary transferred to program beneficiaries is about 25 percent of the total cost or a US$1 million, which would probably provide some 200,000 man-days of work. This represents a very small amount to make a visible impact especially in view of the high prevalence of poverty.

21. Food for Work Programs. The World Food Program (WFP) has an established program of food for work targeted to food insecure areas albeit in a modest scale with a budget of about US$3.8 million over the past five-year period. The main activities are built around the project in Guinea Forestière, Réhabilitation des moyens de survie de l’intervention prolongée de secours et de redressement. It was designed largely to mitigate the impact of the massive influx of migrants from Liberia and Sierra Leone. Its aim is to enhance the assets of local communities through rehabilitation of marshland (935 ha), creation of fruit tree nurseries (660 ha), horticulture (1,283 ha), school gardens (15 ha), and maintenance of rural roads (792 km). The work is done through local communities; NGOs and decentralized government services. Participants are paid in food rations the equivalent of 1,700 Kcal per day of work. The program would have generated about 1.6 million person days of work over its life time, but WFP is no longer able to raise the amount of food needed to continue running the program. The program, therefore, has been discontinued. Besides the output achieved (mentioned above) and the food distributed, no information exists on the long term impact and its sustainability. A much smaller WFP food for training program targeted to low income youth in Conakry through an apprenticeship program with artisans also faced similar problems and will most likely be discontinued. This program was designed as an emergency intervention following the food and fuel crisis. However, it suffered from conceptual design flaws and could not achieved its primarily objectives – job opportunities to the trained beneficiaries after nine months of apprenticeship. The end result, for participants of low or no education, the necessary skills in the areas offered could not be mastered in a short period of time.

22. Village Communities Support Program (PCAV): The PCAV is a community driven development type of project in rural areas with the main objective of providing support and financing to communities to design and implement their development plans. This World Bank program started through a first phase covering the period of 1999-2007 and began a learning process for implementing decentralized rural development by supporting local infrastructure investment and institutional reforms. Achievements of Phase 1 were deemed satisfactory as it improved the access of rural communities to basic services, including health, education, and potable water as well as strengthened local governance. In July 2007, the Bank approved a second phase of this APL in the amount of US$17 million. The intention is to expand the PACV project to all Rural Development Communities (Communautés Rurales de Développement -

97 CRD) and increase the range of eligible micro-projects. This US$17.0 million project has three components: (i) a local investment fund; (ii) capacity building for decentralized rural development; and (iii) project management, and monitoring and evaluation. Bank operations were suspended following the 2008 events.

23. Other programs: Other development partners have also been involved, mainly through income-generating opportunities targeted to youth. For example, UNIDO has programs dealing with solid waste recycling and a fund designed to support youth to develop their own activities. UNDP is also supporting a fund designed to facilitate youth to access subsidized micro-finance.24 NGOs like Action contre la Faim and PLAN international also have small-scale interventions. Finally, Guinea is attempting to revive its AGETIP program under new leadership. Most of these activities are small scale with budgets not to exceed US$1 million. None has been rigorously evaluated.

School feeding programs

24. The World Food Program seems to have the most significant program in the country. Its school canteens program targets pupils at public primary schools in poor rural areas that are exposed to food insecurity and where enrollment is below the national average. The direct beneficiaries of this activity are pupils from the targeted primary schools receiving daily hot food rations. Female students and their families, along with school cooks and their families, also directly benefit from a take-home food ration once a trimester. Indirect beneficiaries include the pupils‘ families and the wider community, who benefit from improvements to child health and education. The total cost of the program has been about US$12.0 million over the past five-year period and reached cumulatively about 300,000 primary students in close to 1,500 schools.

25. A recent independent evaluation of the WFP country program showed positive results of the school feeding component.25 The review indicated that the areas where the school feeding program operated registered a higher gross enrollment rate (GER) (71 percent in 2007) than the national average for rural areas (60 percent); an increased number of pupils of 15-20 percent per year; an increased attendance from 88 to 93 percent for girls in 2008; and an increased girls–boys ratio from 42 to 46 percent in 2009. A comparative analysis in the region of Labé and the prefectures of Dalaba and Pita showed differences between the achievements of schools covered by the program and schools not covered by the program. In the absence of a rigorous impact evaluation, it is not possible to assign the exact impact of the school feeding program. However, the observed achievement seems to indicate some impact: the schools assisted by the program had double GER and double success rate while displaying about half the dropout and repeat rates. This is somehow reinforced by the observation that once the program exited in some areas the enrollment gains were halved. In sectors related to Human Development, the Bank is administering an ―Education for All‖ grant which aims to assist the Recipient in its efforts to improve the conditions for teaching and learning in its territory, through: (i) expanded access to

24 By subsidizing credit, the program has the potential of distorting what appears to be an expanding market of microfinance (almost threefold in the last five years). Furthermore, to minimize their risk the microfinance institutions managing the revolving fund seem to have favored bankable beneficiaries who could have had access to the existing unsubsidized microcredit system. 25 This is a review based on field visits, interviews, and comparative analysis to assess the extent to which the overall WFP program is reaching its primary objectives (not a rigorous impact evaluation).

98 education, (ii) enhanced quality of learning, and (iii) strengthened human resource management. Finally, a Bank-funded health project aims to improve the coverage and quality of maternal and child health services in targeted districts and targeted health centers in the peri-urban areas of Conakry.

Existing policy and institutional arrangement

26. Guinea does not have an explicit social protection policy. Furthermore, the current limited interventions are scattered among several institutions with very limited or no coordination. Financing is small and largely funded by donors on an ad-hoc basis. There is an urgent need for Guinea to develop a comprehensive social protection strategy, define the institutional arrangement capable of formulating policies and coordinating and monitoring their implementation, and determine the financing needs that are fiscally sustainable.

Price policy and market stabilization

27. Countries may reduce import taxes or value added-taxes on essential items such as fuel and food products albeit at some fiscal cost. This option may be of limited use in the current context of Guinea. First, because Guinea has a rather very large budget deficit and a small tax base, this option would have limited traction. Second, reducing import taxes on food items may have limited impact and possible side effects. For example, the distribution of rice is believed to be controlled by a small number of companies that may end up reaping part of the "margin" and without coordination at the sub-regional level, cross-border traffic may make things worse. Third, this option may prove difficult to remove once in place because of the political economy associated with price increase in general. Finally, higher prices of imported food items may act as a catalyst and encourage local farmers. Where these measures are used, it is good practice to announce and implement them as temporary measure.

Options for weaving the social safety net in Guinea

28. Based on the Guinean context–a high prevalence of poverty and high vulnerability to shocks–and the need for urgent reforms to stabilize the economy, a two stage-approach is proposed: (i) short term measures to help mitigate the expected price increase shocks, using existing instruments but with large enough resources to make a difference; and (ii) laying the foundations for a more stable, effective, and fiscally sustainable safety net system capable of protecting the most vulnerable of the society while also increasing people‘s resilience to shocks and promoting asset creation. Such a system should be able to expand and contract depending on the need with clear exiting strategies to avoid long term dependence.

Supporting the reform process: assessing, prioritizing, sequencing, and generating public support

29. Policy reforms produce losers and winners and depending on how vocal and politically strong the losers are, they may derail the process and in extreme cases could lead to violence. Policy reforms should: (i) undertake a sound assessment to identify those who will be most affected by the reform, the extent to which they are likely to be impacted, and the type and effectiveness of existing instruments to which they may resort; (ii) design a package of supporting interventions to mitigate the impact of reform on the those most affected; and (iii)

99 develop an action plan that sequence the reforms and the supporting interventions taking into account the levels of urgency of the reform needed, the impact, and socio-political acceptance. It should also contain a well thought out and designed public campaign targeted to key stakeholders explaining the challenges facing the country, the need for action, and the mitigating package put in place and a good monitoring system to help with quick adjustments as warranted.

100 NOVEMBER 2004 NOVEMBER 10 12 ° ° GUINEA-BISSAU

N N

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Sokourala Sokourala

(1752 m) Mt. Nimba (1752 m)

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D'IVOIRE D'IVOIRE

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10 12

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