Document of The World Bank
Public Disclosure Authorized FOR OFFICIAL USE ONLY
Report No: 49557-GW
PROJECT APPRAISAL DOCUMENT
ON A
Public Disclosure Authorized PROPOSED GRANT
IN THE AMOUNT OF SDR3.3 MILLION (US$5.0 MILLION EQUIVALENT)
TO THE
FOR A
RURAL COMMUNITY-DRIVEN DEVELOPMENT PROJECT (RCDD) Public Disclosure Authorized
August 28,2009
Human Development Sector Africa Technical Families, Social Protection (AFTSP) Country Department 1 AFCF 1 Africa Region
Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS
(Exchange Rate Effective July 3 1,2009) CurrencyUnit = XOF US$1 = 475 XOF 1 XOF = US$0.0021
FISCAL YEAR January 1 - December 31
ABBREVIATIONS AND ACRONYMS
AfDB African Development Bank ASC Administrative Sector Council (Conselho Directivo Sectorial) CAIA Ce'ZuZa de AvaZiaqGo dos Impactos Ambientais (Cell for Environmental Impact Evaluation) CBMP Coastal and Biodiversity Management Project CBO Community-based Organization CDD Community-Driven Development CEM Country Economic Memorandum CG Comite' de GestGo (Community Management Committee) CIFA Country Integrated Fiduciary Assessment CPAR Country Procurement Assessment Report CQS Consultant' s Qualification Selection cso Civil Society Organization DA Designated Account DGCP DirecqGo Geral dos Concursos Pdblicos (Directorate for Public Procurement) EC European Commision EFSSP Emergency Food Security Support Project ESMF Environmental and Social Management Framework FCFA African Financial Community Franc FIAL Fundo para Iniciativas Am bientais Locais (Local Environment Initiative Fund) FMR Financial Management Reporting FMS Financial Management System GDP Gross Domestic Product GP Grupo Promotor (Micro-project Implementation Group) GPN General Procurement Notice GoGB Government of Guinea-Bissau IBRD International Bank for Reconstruction and Development IC Individual Consultant ICB International Competitive Bidding IDA International Development Association IEG Independent Evaluation Group IFAD International Fund for Agricultural Development IFR Interim Financial Report IMF International Monetary Fund .. 11 FOR OFFICIAL USE ONLY IPSAS International Public Sector Accounting Standards IRR Internal Rate of Return ISA International Standards on Auditing ISN Interim Strategy Note LDP Local Development Plan M&E Monitoring and Evaluation MEPRI Ministry of Economy, Planning and Regional Integration MFI Micro-finance Institution MIS Management Information System NCB National Competitive Bidding NGO Non-Governmental Organization NPV Net Present Value NSC National Steering Committee NTT National Technical Team O&M Operations and Maintenance PAD Project Appraisal Document PAIGC Partido African0 da Independhcia da Guind-Bissau e Cabo Verde (African Party for Independence of Guinea-Bissau and Cape Verde) PCU Project Coordination Unit PAP Proj ect-Affected PeoplePopulation PDO Project Development Objective PER Public Expenditure Review PIM Project Implementation Manual PM&E Participatory Monitoring and Evaluation POM Project Operational Manuel PPF Project Preparation Facility PRD Participatory Rural Development PRSP Poverty Reduction Strategy Paper QCBS Quality- and Cost-Based Selection RA Regional Advisor RAP Resettlement Action Plan RC Regional Council (Conselho Directivo Regional) RPD Regional Planning Delegate RCDD Rural Community-Driven Development RPF Resettlement Policy Framework RPO Regional Planning Office (Gabinete de Planifcaqclo Regional) SPF State and Peace-Building Fund SYSCOA SystBme Comptable Ouest Afiicain (West African Accounting System) TORS Terms of Reference UN United Nations UNCDF United Nations Capital Development Fund UNDB United Nations Development Business UNDP United Nations Development Program US$ United States Dollar WAEMU West African Economic and Monetary Union WB World Bank
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. XOF West African CFA
Vice President: Obiageli Katryn Ezekwesili Country Director: Habib Fetini Sector Director Yaw Ansu Sector Manager: Lynne D. Sherburne-Benz Task Team Leader: Michael Drabble
iv TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT AND RATIONALE ...... 3 A . Country and sector issues ...... 3 B.. Rationale for Bank involvement ...... 4 C . Higher-level objectives to which the Project contributes ...... 6 I1. PROJECT DESCRIPTION...... 6 A . Lending inst~ment...... 6 .. B. Project development objective ...... 7 C . Project Components ...... 7 D. Lessons learned and reflected in the project design ...... 12 E. Alternatives considered and reasons for rejection ...... 13 I11. IMPLEMENTATION...... 14 A . Partnership arrangements ...... 14 B. Institutional and implementation arrangements ...... 15 C . Monitoring and evaluation of outcomes/results ...... 16 D. Sustainability ...... -17 E. Critical risks and possible controversial aspects ...... 18 F. Grant conditions and covenants ...... -20 IV. APPRAISAL SUMMARY ...... 21 A . Economic and financial analyses...... 21 B. Technical ...... 22 C . Governance ...... 23 D. Fiduciary ...... 23 E. Social ...... 24 F. Environment ...... 25 G. Safeguard policies...... 26 H. Policy Exceptions and Readiness ...... 26 Annex 1: Country and Sector or Program Background...... 27 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies and Main Interventions in the Area of Community Development and Support for Decentralization .32
V Annex 3: Results Framework and Monitoring ...... 35 Annex 4: Detailed Project Description ...... 43 Annex 5: Project Costs ...... 53 Annex 6: Implementation Arrangements ...... 55 Annex 7: Financial Management and Disbursement Arrangements ...... 60 Annex 8: Procurement Arrangements ...... 75 Annex 9: Economic and Financial Analysis of CDD Micro-projects ...... 86 Annex 10: Safeguard Policy Issues...... 90 Annex 11: Project Preparation and Supervision ...... 94 Annex 12: Documents in the Project File ...... 95 Annex 13: Statement of Loans and Credits...... 96 Annex 14: Country at a Glance ...... 97 Annex 15: MAP (IBRD 33415) ...... 99
List of Tables Table 1: Critical Risks and Possible Controversial Aspects ...... 18 Table 2:Summary of Economic and Effectiveness Performance of...... 21 Table 3: Project Costs by Component ...... 53 Table 4: Project Financing Sources ...... 53 Table 5: Project Components by Year ...... 53 Table 6: Allocation of Grant Proceeds ...... 54 Table 7: Summary ofProject’s Auditing Requirements ...... 65 Table 8: Funds Transferred in Tranches and ActivitiedMilestones to be completed ...... 66 Table 9: Disbursement Category ...... 67 Table 10: Prior Review Threshold (Goods and Works and Non-Consulting Services) ...... 82 Table 11: Procurement Packages with Methods and Time Schedule ...... 83 Table 12: Prior Review Threshold ...... 83 Table 13 : Consultancy Assignments with Selection Methods and Time Schedule ...... 84 Table 14: Capacity Building Activities with Time Schedule ...... 85 Table 15: Summary of Economic and Effectiveness Performance of...... 87 Table 16: Summary of Administrative Efficiency of Potential Micro-Projects ...... 88 Table 17: Project cost and Estimation of Management Overhead ...... 89 Table 18: Summary ofProject Stages and Institutional Responsibilities ...... 91
List of Figures Figure 1: Annual Investment Cycle ...... 43 vi Figure 2: Summary of Project’s Implementation Arrangements ...... 56 Figure 3 : Summary of ImplementationArrangements at Local Level for the Elaboration of the LDPs and the Implementationof Micro-Projects ...... 59
List of Appendixes Appendix 1: PCU Staffing ...... 70 Appendix 2: Summary of Risk Analysis and Mitigation Measures ...... 71 Appendix 3: Action Plan ofthe Rural Community-Driven Project ...... 73 Appendix 4: Flow of Funds and Information ...... 74
vii
GUINEA-BISSAU
RURAL COMMUNITY-DRIVEN DEVELOPMENT PROJECT (RCDD)
PROJECT APPRAISAL DOCUMENT
AFRICA REGION
Date: August 28,2009 Team Leader: Michael Drabble Country Director: Habib Fetini Sectors: General education sector (30%); Sector ManagerKIirector: Lynne D. General agriculture, fishing and forestry sector Sherburne-Benz/Yaw Ansu (30%); Other social services (25%); Water supply (15%) Project ID: PO907 12 Environmental screening category: B Lending Instrument: SIL
[-3 Loan [-ICredit [XI Grant [-IGuarantee [- ] Other:
For Loans/Credits/Others: Total Bank financing (US$M.): 5.0 Proposed terms: Standard IDA Grant
Local Communities 0.4 0.0 0.4 Total: 4.0 1.4 5.4
FY 10 11 12 13 14 15 Annual 0.4 1.1 1.6 1.o 0.5 0.4 Cumulative1 0.4 I 1.5 I 3.1 I 4.1 I 4.6 I 5.0 I Project implementation period: Start: December 1,2009 End: December 1,2014 Expected effectiveness date: December 3 1, 2009 Expected closing date: December 31,2014 Does the project depart from the CAS in content or other significant respects? No Re$ PAD A.3 Does the project require any exceptions from Bank policies? Re$ PAD D. 7 [-]Yes [XINO Have these been approved by Bank management? [-]Yes [-INo
1 [s approval for any policy exception sought from the Board? [-]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? [XIYes [-]No Ref:.I PAD III.E Does the project meet the Regional criteria for readiness for implementation? [XIYes [-]No Ref:.I PAD IKH Project development objective Ref. PAD II.B To increase access to priority basic social and economic infrastructures and services in participating communities in at least two regions of Guinea-Bissau.
Project description Ref. PAD II.C, TechnicalAnnex 4 The Project will include three components: a) Capacity-building for Local Development aimed at supporting capacity development of institutions at regional, administrative sector and community level, to plan and carry out investments in a participatory and transparent manner; b) Local Investment Fund aimed at improving basic social and economic infrastructures and services through the financing of micro-projects included as part of the beneficiary community’s participatory Local Development Plan; and c) Project Coordination and Monitoring & Evaluation, which will be responsible for all operational and fiduciary management of the Project, and for monitoring and evaluation of project activities. The Project will intervene in at least two regions out of eight, Cacheu and Biombo. It is estimated that 85 percent of the communities will benefit from the Project, receiving up to US$30,000 in support of micro- projects identified and prioritized in their participatory Local Development Plan.
Which safeguard policies are triggered, if any? Re$ PAD IKG, TechnicalAnnex 10 Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Pest Management (OP 4.09) Physical Cultural Property (OP/BP 4.1 1) Involuntary Resettlement (OP/BP 4.12) Significant, nonstandard conditions, if any, for: Ref. PAD IKH Board presentation: September 24,2009 Loadcredit effectiveness: December 3 1,2009 Effectiveness: The Recipient shall elaborate and adopt a Project Implementation Manual, in form and substance satisfactory to the Association.
Covenants applicable to project implementation: Four months after Effectiveness the Recipient has appointed the independent auditors in terms accePtable to the Bank.
2 I. STRATEGIC CONTEXT AND RATIONALE
A. Country and sector issues
1. Guinea-Bissau is one of the poorest countries in the world, with two out of every three people living below the poverty line (US$2/day), and one out of every five living in extreme poverty. It is estimated that rural areas - essentially all of the country outside of the capital city of Bissau - are home to some 80 percent of the 764,672 people estimated to be living below the poverty line. Of the key drivers of poverty highlighted in the 2007 Poverty Reduction Strategy Paper (PRSP), such as the 1998 conflict and ongoing political instability', many are specific to the rural areas, including: (i)a vacuum of local government, and subsequent lack of social services and basic infrastructure outside of Bissau and (ii)a lack of growth in (and diversity of) key economic sectors (e.g., agriculture, livestock and fishing) that support a majority of the population.
2. After independence the presence of local Government in rural areas was essentially limited to local committees established to expand and support the political party. This committee system was abolished with the introduction of a multi-party system of governance in 1994, leaving the Government with few resources, little presence, and weak legitimacy at the local level. This lack of effective local government is one of the principle challenges to stimulating local development in rural areas. There is limited delivery of social services and basic infrastructure throughout much of the country, as highlighted by the following: (i)the net school enrollment rate is 53.5 percent for boys and 36.3 percent for girls; (ii)the adult illiteracy rate is 63.3 percent; (iii)only 38 percent of children suffering from simple malaria and 29 percent with cases of serious malaria are treated properly; (iv) infant mortality is 122 per 1,000; and (v) 95 percent of people in the country journey an average of 30 minutes for access to drinking water. Outside of Bissau, agriculture is the engine of the country's economy and the source of 42 percent of the revenue of the poorest quintile of the population. Due to post-war stagnation of the economy, there are currently few economic opportunities for the rural population outside ofthe agriculture sector.
Political Economy
3. Since achieving independence in 1974, the country has been marked by deep political instability. Jog0 Bernard0 Vieira, who seized power in 1980, ruled the country for almost 20 years until he was ousted after the conflict of 1998-99. In the past eight years, three elections have taken place - two legislative in 2004 and 2008, and a presidential election in 2005 where Vieira returned as elected President. In November 2008 legislative elections saw the historic independence party African Party for Independence of Guinea-Bissau and Cape Verde (PAIGC) earning a strong majority in the National Assembly. Shortly after the elections, an attempt to kill the President in his residence failed. In the night from March lStto 2nd 2009 both the Chief Staff of Army and the President of the Republic were killed in short order. The country remained calm and the Speaker of the National Assembly was sworn in as Interim President on March 3,
' According to the 2006/2007 World Bank Integrated Poverty and Social Assessment, GDP per capita would be an estimated 42 to 43 percent higher today if the 1998-1999 war had not occurred, and an estimated one in three persons in poverty today might not be if the conflict had not taken place. 2009 as per the National Constitution. Presidential elections were held on June 28, 2009. The Presidential run-off was held in July 2009 and Mr. Malam Bacai Sanha of the PAIGC was elected President.
Decentralization in Guinea-Bissau
4. The country is divided into eight administrative regions. The capital, Bissau, enjoys a specific status. At the regional level, the state is represented by a governor who is appointed by and reports directly to the central government. The Governor is responsible for supervising and coordinating all deconcentrated services of the line ministries at local level (delegacias). The regions are divided into sectors, which are mere administrative subdivisions of the region and headed by a Sector Administrator. Sectors are further subdivided into sections, where the government in most cases does not have a representative and relies on the traditional authorities, (rkgulos). Within the sections, the lowest levels of population settlements are the villages (tabancas).
5. There are various consultative and planning bodies at the regional and administrative sector level, the main ones being: (i)the Conselho Directivo Regional (Regional Council - RC); (ii)the Gabinete de Planifzca@o Regional (Regional Planning Office - RPO), and (iii)the Conselho Directivo Sectorial (Administrative Sector Council - ASC). The role of each ofthese varies greatly from region to region and sector to sector. The RC is a broad forum for analysis and debate of regional matters and issues submitted by the Governor. The members are representatives of line ministries, Sector Administrators, representatives of the population nominated by the Governor and members nominated for their expertise. The RPO also functions as a consultative body and includes the various representatives of the ministries at local level, representatives of civil society, of NGOs (Non Governmental Organizations), and of traditional authorities. The ASC meets at a variable frequency depending on the sector. It includes the sector administrator, the ministries’ staff at sector level, representatives ofcivil society and ofthe traditional authorities, and provides some legitimacy to the decisions taken by the sector authorities and offers communication channels with the population.
6. In 1996, a series of decentralization laws were adopted. The laws organized government structures at local level and defined competencies among the various levels of local governments Le., the regions and municipalities. However, the armed conflict erupted not long after the adoption ofthe decentralization laws, which were therefore not implemented. To date there have been no local elections, and the regions and sectors (that correspond to the municipalities envisaged in the law) are administered by central government representatives. Capacity is also weak at the local level, since there is no budget for development allocated to the regional and administrative sectors, and human resources are scarce and ill-equipped.
B. Rationale for Bank involvement
7. The proposed operation (the “Project”) builds upon previous positive experiences with World Bank-financed Community-Driven Development (CDD) activities in Guinea-Bissau. It will adapt and expand an initiative already piloted by the Government, with the support of the World Bank, in the Coastal and Biodiversity Management Project (CBMP). The CBMP includes a CDD-component that targets communities living in and around five parks and protected areas.
4 The results from the CBMP revealed a strong and well-articulated demand in many rural areas for social service delivery and basic infrastructure through a CDD approach, and significant capacity among communities and traditional institutions to take charge oftheir own development agenda. The experience gained though the CBMP contributed directly to the concept and design ofthe Project.
8. The Project will complement three new World Bank ’operations with interventions supporting rural local development. The first one is the recently approved Emergency Food Security Support Project (EFSSP), which includes direct support for the development of small community-based agriculture projects. The second one is a National Health grant from the State and Peace-Building Fund (SPF), which will finance inter alia access to health services in rural communities by supporting the functioning of health posts. The third one is a proposal for a Participatory Rural Development (PRD) grant of US$5 million by the SPF, which supports the same objective, activities and implementation arrangements as those proposed in this Project, with a focus on two other regions of the country. The design, scope and institutional arrangements of the Project take into account the specificities of the previously mentioned interventions with a view to their harmonization.
9. The Project also takes advantage of the World Bank’s extensive experience with rural community-based/driven development projects in Africa and elsewhere. These projects, which increased from two percent of the Bank’s portfolio in 1989 to 25 percent in 2003, address decentralized, participatory development and local governance issues in a wide variety of settings, and include considerable CDD experience in post-conflict and fragile states such as Sierra Leone, Liberia, Angola and others.2 This wide ranging CDD experience leaves the Bank well placed to assist Guinea-Bissau in the adaptation to and application of CDD approaches in the Guinea-Bissau context.
10. The proposed CDD operation is a key element of the overall World Bank assistance strategy for Guinea-Bissau (Interim Strategy Note - ISN). Due to the current political situation and the uncertainties an ISN as opposed to a full Country Assistance Strategy was discussed by the Board in June 2009. The ISNhas two major pillars: (i)Strengthening economic management and laying the foundations for improvements in the productive sectors; (ii)Increasing access to basic social services, especially in rural areas; as well as a third cross-cutting theme; and (iii) Strengthening individual and institutional capacity for efficient governance (leadership, management of public financial resources and public dialogue, Extractive Industries Trade Initiative ++) and project implementation. It also seeks to build stronger partnerships with other traditional and non-traditional donors. This Project will directly support the two pillars by promoting a local level participatory planning process specifically designed to ensure identification and inclusion of the needs of vulnerable groups in Local Development Plans (LDP), and by providing grants to communities (to finance micro-projects), enabling them to rehabilitate and/or establish their priority basic social and economic infrastructure and services. A community’s LDP is a simple time-bound and prioritized action plan, which reflects the opportunity and constraints faced. The Project will also contribute to the third, cross cutting theme by reinforcing the regional and local level consultation forums and decision-making
CDD initiatives are often selected in conflict-affected and fragile environments to quickly develop or regain a sense of community; to improve infrastructure; to enable livelihoods, to improve capacity and to empower a community; and to begin building more transparent governance.
5 bodies, as well as building capacity of and empowering regional and local level stakeholders to lead and participate in future development planning and decentralization debates.
11. The World Bank supported CDD operation fits within the Government’s strategy to test and develop a framework for participatory local development. There are several other donors active in the local development arena, including UNDP/UNCDF gab^), African Development Bank, (Oio, Bafata, gab^, Cacheu, Biombo), and IFAD (Tombali, Quinera). Each of which is testing a slightly different approach to local development planning and intervening at a slightly different level. These operations focus principally on regional and adminstrative sector governments, which the RCDD and PRD operations complement with a focus on empowering the communities themselves to become actors in their own development. (See Annex 2 for a further description of the main interventions of the World Bank and other donors in the area of community development and support for decentralization). At the Government’s request, this Project will play a catalyst role in coordinating and harmonizing various interventions in favor of rural local de~elopment.~
C. Higher-level objectives to which the Project contributes
12. The Project contributes to the long-term, overarching development objective of poverty alleviation and to improvement of living conditions of rural communities in Guinea-Bissau. The 2007 PRSP calls for a special emphasis on tackling rural poverty and addressing the needs of vulnerable groups. It has four pillars: (i)strengthening governance, modernizing the public administration, and ensuring macroeconomic stability; (ii)promoting economic growth and job creation; (iii)increasing access to social services and basic infrastructure; and (iv) improving the living conditions of vulnerable group^.^ This Project, therefore, seeks to respond directly to three of the four pillars of the PRSP by increasing access to social services and infrastructures as well as creating job opportunities, thereby improving living conditions for the vulnerable groups. It will also contribute to strengthening local governance, a key element of the fourth PRSP pillar, by building capacity for and encouraging dialogue between government and civil society stakeholders at the local level.
11. PROJECT DESCRIPTION
A. Lending instrument
13. A Sector Investment Grant of US$5.0 million equivalent is proposed, with an additional US$0.44 million in beneficiary contributions.
The MEPRI is setting up a thematic group on local development, which includes donor representatives and NGOs with activities in this area. ‘ Vulnerable groups are defined by the PRSP as people who have no means to solve their daily basic needs due to lack of income or resources, or people who are confronted with specific situations that endanger their lives andor physical integrity. These groups are identified not just by their limited resources for subsistence, but also by the geographical areas in which they reside, because most of them live in rural areas and outlying urban areas. Particularly vulnerable groups include women, youth and children.
6 B. Project development objective
14. The Project Development Objective is to increase access to priority basic social and economic infrastructures and services in participating communities in at least two regions of Guinea-Bissau .
15. To achieve this, rural communities will be assisted to identify, implement and manage their priority investments through a transparent and participatory process. The Project will also contribute to the current efforts ofthe government to improve local governance and will develop mechanisms to effectively involve both government and citizens in decision-making at the local level.
C. Project Components
16. The Project will include three components: a) Capacity-building for Local Development; b) Local Investment Fund; and c) Project Coordination and Monitoring & Evaluation. The components will be implemented over five years in at least two regions (Cacheu and Biombo).
Component 1: Capacity-building for Local Development (US$1.37 million).
17. The objective of this component is twofold: (i)to support capacity development of institutions at regional, administrative sector and community levels in order to prepare LDPs and carry out micro-projects in a participatory and transparent manner (this entire process will be described in detail in the Project Operational Manual’ - POM, which is a subset of the Project Implementation Manual - PIM6); and (ii)to promote greater harmonization and synergy between stakeholders on local development issues through outreach and learning activities at central and local levels.
Information and communication 18. The component will finance preparation of a communication strategy and action plan at the start of Project which will be updated annually thereafter. It will also finance the
’ The POM provides guidance and describes the operational procedures and guidelines to be used for the implementation of the Project. In particular, the POM will provide the procedures and guidelines to be used by PCU staff, Regional Advisors (RAs), Facilitators, beneficiary- communities and local institutions for: (i)preparing and validating the Local Development Plan (LDP); and (ii)elaborating, appraising and executing the micro-projects (see for further details Part IV section B of the PAD). The POM will include: (i)Guidelines of Fiduciary Management for Community-Driven Development projects; and (ii)procedures and technical fiches to be used by the beneficiary-communities (e.g., simple guidelines for community-based financial management and procurement will be prepared and form part of the POM). Those will be needed at the start of the Project implementation for the training of RAs and Facilitators (capacity-building will be among the first activities to be implemented at the local level). The Project Coordination Unit (PCU) on behalf of the Recipient is responsible for preparing the POM. At the beginning of the Project preparation, the Recipient recruited an experienced consultant to advise the Government and to elaborate the POM. The POM currently in preparation draws heavily on the implementation procedures and guidelines set up for the Coastal and Biodiversity Management Project and its CDD component (Fundo pura Iniciutivus Ambient& Locuis - Local Environment Initiative Fund) financed by IDA and the Global Environment Facility. The POM will adopt the lessons learned and other best practices with CDD that would be relevant to this Project (e&, the POM will reflect the Guidelines of Fiduciary Management for Community-Driven Development projects). The RAs and Facilitators who have already been recruited by the Project are receiving a first level training on the Project basic principles and guidelines (see for further references on training of RAs and Facilitators the Annex 6 on “Implementation Arrangements”, paragraph 8. They will provide inputs to be included in the final POM. It is expected that the POM will be finalized by end of October 2009. The PIM will include the following manuals: (i) the POM; (ii)the Administrative and Accounting Manual of Procedures; (iii) the Manual of Monitoring and Evaluation; (iv) the Environmental and Social Management Framework (ESMF); and (v) the Resettlement Policy Framework (RF’F). (The ESMF and RPF were approved by IDA on March 2”*, 2009 before Project appraisal and disclosed in the country and a final draft of the Manual of Monitoring and Evaluation has been elaborated by the PCU and will be reviewed shortly by IDA). The adoption of a PIM satisfactory in form and substance to IDA is an effectiveness condition.
7 implementation of targeted communication activities which will be conducted at the, local level to raise stakeholders’ awareness, disseminate good practices and keep beneficiary-communities informed. These communication activities will focus on key principles of CDD such as social inclusion, participation, transparency, accountability, environment and social safeguards. The communication activities will be critical instruments to accompany the annual investment cycle and other project activities.
Community mobilization and preparation of Local Development Plan 19. The Project will recruit Regional Advisors (Ms) and Facilitators who will engage with local institutions represented in the RPO and in the ASC as well as with other key stakeholders such as NGO and Civil Society Organization (CSO) representatives. The capacity of these local stakeholders for local planning and decision making will be strengthened. The composition and functioning of existing spaces of consultation and decision-making at regional and administrative sector levels will be reinforced.
20. The RAs7 will play a key role in the implementation of the Project, and in particular for the activities (LDP and micro-projects) carried out in their respective region. Additionally, they will continuously train, support and supervise Facilitators. The Facilitators will support beneficiary communities in the preparation of their LDPs8 and the micro-projects (to be financed under Component 2). The elaboration of the LDP and micro-projects will follow the principles and guidelines of participatory planning, using methodologies described in the POM. LDPs will be validated in a community-wide meeting, after which it will be presented by the Comitks de Gestifo Comunitdrios (Community Management Committees - CGs) to the ASC. The Facilitators will work with the CGs formed by the communities to represent them and take responsibility for the implementation of their LDP.
Preparation, appraisal and implementation support for micro-projects 2 1. For each micro-project to be prepared and then implemented, an implementing committee called Grupo Promotor (Micro-project Promotion Group - GP) will be identified or established by the community. The preparation of a micro-project will include a budget; a technical design; specifications for equipment; an implementation and monitoring plan; provision for future operation and maintenance; and a check list of environmental and social safeguards. Each micro-project will be appraised before the request for financing is approved. The RAs, together with support as needed of RPO, will be responsible for ensuring the technical and financial appraisal of the micro-project. Ongoing support and capacity building will be provided by the Facilitators and RAs to the CGs and GPs responsible for oversight and implementation of the LDPs and specific micro-projects, respectively.
Cross-cutting capacity-building activities 22. Other capacity building activities will be developed during the life of the Project at the national level under the leadership of the Ministry of Economy, Planning and Regional Integration (MEPRI - the Recipient of the IDA grant) targeting both the multi-sectorhtakeholder
’ See Annex 6 on: “Implementation Arrangements” for a description of the role and responsibilities of RAs and Facilitators. * As defined earlier, a community’s LDP is a simple time-bound and prioritized action plan, which reflects the opportunity and constraints faced by the beneficiary-communities.
8 National Steering Committee’ (NSC) and broader audiences. Additionally, the component will support the functioning of the Local Development thematic group, which is being established with a view to sharing information and knowledge of the experience gained under different projects in support of local development. This group will seek, when possible, to harmonize approaches when working with local communities and promote a greater synergy. In this regard, the component may support other expenditures required by the Government of GB to develop lessons and facilitate harmonization ofongoing local development initiatives such as the FIAL.
Expenditures financed under this component 23. The component will finance two RAs, one per region and six Facilitators on average per region. The RAs will have an office at the RPO. The component will finance minor office rehabilitation, office equipment, a vehicle and operating costs related to the RAs’ missions. The Facilitators will work at the level of the administrative sector. They will be assigned to one region, but could provide support in other regions on an as needed basis. The Facilitators will have an “informal” working space in the administrative sectors where they will be able to conduct business and meet with stakeholders and the ASC (arrangement will be worked on a case by case). The Facilitators will have a motorcycle and a budget covering operating costs in order to carry out their missions. Finally, this component will also finance: (i)training that might be required by the RPO, ASC and community beneficiaries with a view to strengthening their basic skills in participatory planning, management and budgeting; (ii)technical assistance; (iii)exchange visits between administrative sectors and regions; (iv) workshops to disseminate best practices and to share experience; (v) training and workshops at the national level for the NSC; (vi) some operating costs; and (vii) logistical support for the Local Development thematic group.
Component 2: Local Investment Fund (US$2.93 million)
24. This component will finance micro-projects identified and prioritized by the communities themselves through a participatory process, and included as part of their validated participatory LDPs. A community is defined by a group of tabancas(s) that might have common traditional authorities, common resources, and cultural and social bonds. On average a community includes 3,600 people. A LDP will include various micro-projects, in order of priority, and the community will decide which micro-projects will be submitted to the Project for financing and which ones may be presented to other donors or sources of funding. The maximum amount per micro-project will be US$12,000, and a community will be able to implement several micro- projects (up to the maximum contribution per LDP of US$30,000, equivalent to a per capita investment of US$8.33). Beneficiary-communities will contribute a minimum of 15 percent in cash or in kind. However, a community will only be able to implement two micro-projects at the same time. Only once these first two micro-projects are successfully completed will the community be able to access the remaining funding. By doing so, it will ensure that the Project will not exceed the absorptive capacity of communities and it will also create an incentive for
The National Steering Committee will replace and expand the National Technical Team - set up in July 2007 by MEPRI as the counterpart of the World Bank team for the preparation of the RCCD. The NSC will comprise representatives from at least five ministries (MEPRI, Ministry of Finance, Ministry of Education, Ministry of Health and Ministry of Agriculture), civil society (two NGOs), and the private sector. The NSC will be chaired by the Minister of MEPRI and/or hisihers delegate as per PIM guidelines.
9 communities to complete their micro-projects in line with the agreed technical quality standard and timing.
25. Each micro-project will be designed by the communities, with support from the Facilitator, and on a case-by-case with support from inter alia: the RAYtechnicians from the delegacias and even in some cases with external assistance from technicians from NGOsAocal associations. Micro-proj ects will be appraised following a number of appraisal criteria which include: technical design, costing, social and financial sustainability, environment and social safeguards and the existence of Operations & Maintenance (O&M). The POM will detail the guidelines, procedures to be followed by the beneficiary-communities for the elaboration of the LDP and the preparation of micro-projects. The final validation of the micro-project appraisal will be the responsibility ofthe RA.
26. The implementation ofmicro-projects will be carried out by the communities themselves, with the support of the Facilitators. Communities will have previously received trainings on fiduciary management. A CG selected by the community, will be responsible for managing funds received from the Project, and will open an account to this end at the nearest available commercial bank (in most cases in Bissau). A GP composed of community members having a special knowledge or interest in the micro-project (for example, parents ofa school in the case of renovation of a school) will be responsible for supervising the implementation, organizing community labor and procuring materials and goods (see Annex 6 for further description of the CG and the GP). The communities themselves will follow the implementation progress oftheir plans and micro-projects by monitoring progress on indicators that they will have themselves identified. The results and progress will be shared through public meetings and other local channels of information.
27. There will not be a menu of eligible micro-projects. However, a negative list will define ineligibility criteria and activities which may not be financed by the Project. This negative list will be specified in the POM (see Annex 4, paragraph 31, for examples of activities which by their own nature may not be considered for financing). Furthermore, micro-projects to be financed by the Project will be kept simple to avoid overextending the limited technical capacity at the local level (see Part IV. B, paragraphs 67 and 68 on technical appraisal). The procedures for the technical appraisal ofmicro-projects (described in the POM) will ensure that the principle of simplicity in the design and implementation of micro-projects is enforced. Micro-projects which do not meet this criterion might not be financed. Examples of possible micro-projects include: support to community productive and economic activities; construction or rehabilitation of productive infrastructure; construction or rehabilitation of community schools; equipment for schools; construction or rehabilitation ofcommunity health posts or health centers; equipment of health posts; community feeder roads; training and capacity building (alphabetization, etc.); information and awareness sessions (nutrition, HIV, etc.); etc.
Component 3: Project Coordination and Monitoring & Evaluation (US$l, 14 million).
28. This component will finance a Project Coordination Unit (PCU) within the MEPRI, which will be responsible for all operational and fiduciary management ofthe Project, including monitoring and evaluation. The PCU staff will include a Project Coordinator, Capacity Building Specialist, Monitoring and Evaluation (M&E) Specialist, Financial Management Specialist,
10 Senior Accountant, Procurement Specialist, part-time Rural Engineer, and administrative staff. Operating cost of the PCU as well as some staff positions will be shared between the Project and the SPF-financed PRD. A detailed costing table for both sources offunds has been prepared.
29. The component will also finance the development and implementation of a participatory M&E system, in particular the set up of a management information system (MIS) and the associated data gathering plan and tools. The PCU will produce regular project progress reports, and quarterly financial management reports. The elaboration of the M&E Manual has been financed by the Project Preparation Facility (PPF"). An experienced international consultant has been hired. A first mission took place in May 2009 and a final draft has been elaborated and will ' now be reviewed by IDA. The final Manual will be available shortly. This M&E Manual describes in detail the roles and responsibilities of project staff and stakeholders as well as the tools, data type and periodicity for data collection and analysis. The M&E Manual will also identify target audiences and provide guidance on how information flows and is to be used (see Annex 3 for further details on for the form and substance of the M&E system to be set up by the Project).
30. Lastly, the component will finance costs incurred by the multi-sector/stakeholder NSC in the execution ofits Project oversight and guidance responsibilities.
Geographical coverage and beneficiary communities
3 1. An inter-ministerial government team (the Equipa Te'cnica Nacional) prioritized four regions for project intervention: Oio, Bafata, Cacheu and Biombo, through the following process: e exclusion of urban conglomerates: The capital city (Sector Autonorno de Bissau) was excluded as it is an urban area with a comparatively high concentration of services, infrastructure and resources; e exclusion of regions with ongoing substantial local development initiatives: Regions benefiting from substantial funding for local development activities from other donors (such a UNDP, the ABD and IFAD) were excluded. This eliminated the regions of Gabu, Quinara and Tombali; assessment ofaccessibility constraints: Out ofthe remaining five regions, it was decided that the region ofBolamaBijagos (a coastal archipelago) was too difficult to access to be included in the project areas; and e assessment of need and likelihood of success: The remaining four regions were then prioritized using combined criteria ofpoverty level (high priority) and dynamism ofcivil society and local governments (therefore higher level ofpotential success).
32. The Project will thus focus predominantly on implementation in Cacheu and Biombo complementing the SPF-financed PRD in Oio and Bafata.
33. During the first 18 months of implementation of the Project, two administrative sectors per region will be selected by the RPO. (Each region has between 5 and 6 administrative
IoThe PPF has financed the elaboration of all the manuals included in the Project ImplementationManual (see footnotes #5 and #6).
11 sectors.) These will serve as pilots to test and refine processes and procedures prior to scaling up to full regional coverage. The selection criteria' for these pilot administrative sectors are: administrative sectors where the ASC has shown a higher level of dynamism and initiative (for example, where these ASC meet regularly); 0 administrative sectors that might have already identified their priorities through a validated sector-level plan; and administrative sectors which are relatively easier to access in terms of transport and communications.
34. Individual beneficiary communities will be selected annually by the ASC. Over the five year-duration ofthe project, an estimated 85 percent ofthe communities will be covered and the sequence oftheir inclusion will be annually determined through a participatory selection process led by the ASC, with support from the RA. Prioritization criteria12 for selecting beneficiary communities include inter alia:
the existence ofrecognized community leaders; some level ofcommunity self-organization, such as a local development committee; 0 comparatively poor access to economic infrastructures and social services in comparison with other communities within the same administrative sector; and 0 the lack ofsubstantial funding from donors or NGOs in recent years.
D. Lessons learned and reflected in the project design
35. CDD has demonstrated its effectiveness in addressing several key concerns in conflict affected contexts. Those concerns are:
the demand for rapid implementation through quick disbursement and delivery channels, in order to deliver cost-effective goods and services at the community level; 0 the need to promote participatory models of local governance and service delivery based on principles of downward accountability, civic engagement, agency responsiveness, and information transparency; and the need to rebuild or strengthen social capital and foster peaceful, representative, and inclusive forms ofplanning and decision-making at the local level.
36. Project design takes into account lessons derived from the independent evaluation of the pilot phase of FIAL and those of the Mid-Term Review of FIAL which emphasized the importance of:
putting in place a well designed communication strategy that differentially targets key stakeholders and ensures the transparent flow of information. This is particularly important at the community level as it is central to ensuring direct and indirect beneficiary ownership and satisfaction;
I' The selection criteria and processes for pilot administrative sectors are described in the Project Operational Manual The selection criteria and processes for beneficiary communities are described in the Project Operational Manual.
12 0 encouraging the active participation of all key regional and local actors in preparation of LDPs as well as in the design, implementation and monitoring and evaluation of micro- projects; ensuring that the design of LDPs and individual micro-projects takes an integrated view of the resources available at the community level and aims to maximize their joint contribution to attain the community’s short, medium and long term development vision and objectives; 0 building capacity of and empowering community beneficiaries on a continual “on-the- job” basis which extends beyond the specific micro-project cycle. Beneficiary capacity should be tracked so as to know when the communities have fully developed the capacity to manage and sustain their investments on their own; building upon and strengthening existing community institutional structures and partnerships whenever possible; and taking into account the constraints imposed by Guinea-Bissau’s rainy seasons in project planning and implementation.
37. Additional lessons drawn from broader CDD portfolio and the Independent Evaluation Group’s (2005) review include:
standardizing, to the extent possible, micro-project documents, technical designs and unit costs so as to simplify the micro-project design and evaluation processes, improve micro- project quality, facilitate procurement of goods and works and prevent over-design; facilitating micro-project safeguard and fiduciary compliance through the development of simple tools for environmental and social screening of micro-projects and simple guidelines for community based procurement and financial management and the provision of continuous support and supervision; recognizing the critical contribution of supervision and monitoring, including a combination of internal monitoring by project and government staff, regular supervision by Bank staff, independent external monitoring by consultants and by NGOs and media, and community self-assessments. The monitoring system should be designed as a learning system, drawing on insights derived from monitoring to address project design and implementation issues; and in countries where the decentralization policy is weak or not yet in place, the involvement and familiarization of local government with participatory community driven development principles and approaches can help build mutual accountability mechanisms between local government, non-government and civil society stakeholders and thus help lay the foundations for a formal decentralization of governance in the future.
E. Alternatives considered and reasons for rejection
38. , Geographic scope and poverty targeting. Initially the team considered implementing a national CDD program, however, this option was rejected since several other donors are launching related initiatives to test alternative approaches to local development in some regions, and hence a national CDD project would give rise to stakeholder confusion and absorptive capacity concerns. Government and donor partners have agreed that the lessons learned from
13 each donor program will be shared, with a view to adopting a common, nationwide CDD framework following the completion ofthese initial local development pilots.
39. Degree of emphasis on the evolving decentralization agenda. Over the long term moving towards true decentralization will be crucial to bring decision-making closer to the citizens at local level. However, it was decided that it was premature for the Project to explicitly support the decentralization agenda as: (i)the decentralization debate in Guinea-Bissau is not advanced and (ii)promoting decentralization reforms is beyond the reach of a five-year project with limited resources. At this early stage it was agreed that the CDD should mostly focus on helping the poor and should rely on the existing social and institutional structures to the extent possible.
40. Micro credit. Inclusion ofmicro credit activities in the Project was rejected as the skills and knowledge needed to achieve the overall goal of equipping beneficiaries with basic social and economic infrastructure and services through a transparent and participatory process are substantively different to those necessary for developing durable financial systems. Attempting to achieve both would overstretch limited in-country capacity, and make project design overly complex, putting at risk the Project development objective.
111. IMPLEMENTATION
A. Partnership arrangements
41. The Government of Guinea-Bissau (GoGB) and its donor and NGO partners are increasingly adopting approaches that favor a participatory approach to local development. Donors and NGOs have been consulted during project preparation. There are several related on- going and planned parallel donor initiatives that complement the Project's approaches, each of which is testing a slightly different approach to local development planning and intervening at a slightly different level; central, regional and local administrative sector. Together these programs will test various frameworks for local governance and development planning, with the lessons learned being shared with a view to developing a common decentralizatiodlocal governance and CDD approach in the future. The majority of these donor interventions, however, are focused on regional and administrative sector governments and the development of regional development plans as opposed to empowering communities to become actors in their
own development. '
42. There is a growing convergence amongst major donors and local NGOs as to the desirability of developing a nation-wide CDD framework. To this end a local development thematic group (its core members will include the NSC) is being established with representation from government, donors and civil society, with the objective to coordinate the different interventions, share information and lessons learned, and to serve as a discussion forum for local development concerns. In the medium term, it is envisaged that the lessons learned during the implementation ofthese various local development initiatives will lead to adoption of a common national framework for CDD. The Project will contribute to this learning effort through its unique approach of directly involving and empowering beneficiary communities in local development planning. The Project will have a full time monitoring and evaluation specialist who will liaise with project teams charged with implementation of these other donor-funded
14 local development initiatives. The objective is to collect relevant information that can be fed to the local development thematic group, and used to stimulate discussion and eventual harmonization of approaches. In the short-term, project design and its placement in the MEPRI, with NSC oversight, will facilitate active co-financing by other donors should the opportunity arise.
43. As mentioned previously other IDA-financed interventions will support rural development. Among those the PRD SPF-grant is in fact, quasi co-financing of this Project. The PRD will adopt the same institutional and implementation arrangements described in the next section. A single PCU will implement both the RCDD and PRD projects. The PRD will intervene in two regions of Guinea-Bissau, therefore, bringing the total number of regions to benefit from these CDD-interventions to four. The PRD is expected to begin its intervention in August 2009 and it will, thus, pave the way for this Project, in particular in relation to the development of capacity building activities under the project first component.
44. Project teams for the four projects (RCDD, PRD, EFSSP and National Health) have begun to work together with a view to maximizing potential synergies between these operations. In practical terms it is expected that some capacity building activities could be done jointly both at the central and local levels in order to further increase the impact of the four operations supporting rural development. More importantly, it is recognized that it is important to harmonize the processes and procedures, avoiding duplication, and support a coherent and cohesive dialogue at the regional and local level, and avoid overwhelming capacity of counterparts and communities.
B. Institutional and implementation arrangements
45. The general coordination of the Project will be the responsibility of the MEPRI. Guidance, strategic and technical advice will be provided by the NSC which will meet on quarterly basis or ad-hoc required. The NSC will also endorse annual work plans and budgets, and review progress reports, audit recommendations and supervision reports. A PCU will be hosted by MEPRI and will be responsible for the day-to-day coordination of the Project. This PCU will be adequately staffed and trained to include the required fiduciary monitoring capacity, for both financial management and procurement.
46. RAs located in the regional capitals are the face of the Project vis-a-vis regional authorities. RAs, working closely with the Regional Directors for Planning, will play a key role in the implementation of the Project in their region. They will support and build the capacity of stakeholders and institutions within the region. They will in particular: (i)continuously train, support and supervise Facilitators; (ii)coordinate all project capacity-building activities in the region; (iii)ensure quality control at all the steps of the annual investment cycle, and in particular guarantee that micro-projects are fully appraised and properly designed; (iv) co-sign financing agreements with communities on behalf of the project coordinator, and monitor and ensure that the agreements are respected by all parties; (v) produce progress reports; (vi) support and contribute to the strengthening of the RC, RPO and the ASCs; and (vii) ensure the coordination and coherence of project activities with other projects and development initiatives in the region.
15 47. The Project will contract, on a full-time basis, six Facilitators per region with experience in participatory community development. The regional office will serve as their base, but the bulk of their work will be in the field with the communities. The Facilitators will be one of the keys to Project success, as they will be the main contact point of the communities with the Project. They will support: (i)communities during the participatory planning process, (ii)GP in the design, implementation and procurement under their micro-projects, and (iii)CG in oversight of the LDP implementation and financial management of the micro-projects. Additionally, they will play a significant role in local level data gathering and related project monitoring and evaluation. The Facilitators will receive in-depth training in participatory planning and M&E tools and methodologies at the beginning of the Project.
48. The ASC will be responsible for the selection of beneficiary communities within the administrative sector on a yearly basis. They will review LDPs produced by communities and ensure that the plans are coordinated with other development activities in the sector. They will secure the collaboration and support of all stakeholders in the administrative sector in the implementation of the micro-projects. The RA will review the composition of each ASC with a view to ensuring that its membership is representative and strengthening its legitimacy.
49. The delegacias are expected to play an important role during project implementation. They will be involved in both participatory planning with the Facilitators, in reviewing and appraising micro-project designs, and in monitoring progress of micro-project implementation. They will receive training in participatory tools and safeguard issues. The Project will finance some operational costs for delegacias staff to be able to actively participate in project activities.
50. The CG will be selected by communities to represent them. They will oversee the implementation of LDP and keep the community informed. They will also be responsible for all financial management and payments related to the financing of micro-projects. The composition of the CG will include women’s representatives and youth representatives. Depending on the local context, the Project will ensure that existing CG that meet these criteria are simply re- confirmed by the communities in order not to duplicate existing structures that have proved to be well functioning and trusted by the communities.
51. The GP, which are responsible for implementation of the micro-projects, will be identified by the community and may be created for the purpose of the micro-project, or may be an existing formal or informal group, association or Community-Based Organization (CBO) with a particular interest or expertise. The GP will be entrusted by the community and be responsible for designing and implementing the micro-project that will have been previously included in community’s LDP. They will be responsible in particular for all micro-project related procurement. They will be accountable to the CG and the community.
C. Monitoring and evaluation of outcomes/results
52. The Project M&E system is currently being designed by the PCU with support from the PPF. A final draft of the M&E Manual has been submitted and will be reviewed shortly by IDA. The M&E Specialist has been identified and will soon be contracted by the PCU. It is expected that the M&E system will be fully operational when the RAs and Facilitators will begin the fist activities of community mobilization. This system will track and assess, inter alia,
16 implementation efficacy, beneficiary satisfaction, use and maintenance of investments, and degree of stakeholder participation. The M&E information will be used to provide feedback and improve project operations. The M&E system will comprise: (i)M&E plan, (ii)various tools/questionnaires for collection of key data, and (iii)computerized Management Information System (MIS). Both quantitative and qualitative information will be tracked.
53. Overall M&E responsibilities will lie with the M&E Specialist working in the PCU in Bissau and reporting to the Project Coordinator. The PCU will prepare 6-monthly interim progress reports for internal use and a formal annual report for broader dissemination to all stakeholders. RAswill be responsible for compilation ofthe information gathered by Facilitators and participating stakeholders from each of their regions on a quarterly basis. Participatory monitoring and evaluation (PM&E) will be one ofthe key means by which data will be gathered and analyzed. PM&E will promote ownership and empower stakeholders, particularly beneficiary communities, by involving them directly in the exercise of data collection and analysis ofthe implementation of activities, and by encouraging them to express their views and suggestions for improvement.
D. Sustainability
54. Institutional sustainability. Although there are no democratically elected local governments at present in Guinea-Bissau, nor well functioning and accountable local institutions representing and serving the interests of communities, the Project will strive to involve the existing local fora and institutions that have some legitimacy, build on their strengths and develop their capacity. The Project will give an increasing role to the ASC and will rely to the extent possible on the delegacias at the local level to support communities. Their involvement will provide an opportunity for local institutions to test participatory mechanisms and support new local partnerships which will contribute in the longer term, to the decentralization debate and the future decentralization reforms.
55. At the community level, the Project will seek to build upon and strengthen the capacity of community institutions. Emphasis will be on strengthening existing institutional structures although establishment of new institutional structures may be encouraged if appropriate. Targeted training in procurement and financial management as well as in assorted technical areas will be provided. The delivery of ongoing, continuous support to community representatives serving on the CG and GP and on-the-job skill building will be core elements of the RAs and Facilitators terms of reference.
56. Sustainability of micro-projects. The interventions financed by the Project will follow national policies and quality standards. The participation of the technical staff of the line ministries will be sought all steps of the local investment cycle to ensure compliance with national norms, thus promoting sound design and physical sustainability. Beneficiary participation at all stages of LDP preparation and the micro-project cycle, together with a minimum 15 percent community counterpart contribution will foster local ownership and hence enhance the likelihood that investments will be maintained. In addition, operation and maintenance plans (O&M) will be developed as part ofthe micro-project proposals submitted by communities, and financial sustainability will be one of the technical appraisal criteria used to review the proposals. Finally, Usand Facilitators will remain involved with communities after
17 the implementation phase of a micro-project is completed, thus reinforcing the capacity of the beneficiary-community to sustain the investment over the long-term.
E. Critical risks and possible controversial aspects
57. Table 1 provides an overview ofthe main risks affecting the CDD operation.
The country remains H The Bank cannot mitigate these risks S vulnerable to significant alone. In order to mitigate the overall political instability. The key political risks, several donors are internal risks are political supporting and advising the country. instability that can flare up The Bank has selected operations again and the closely related carefully in that they are considered risk ofmilitary mutinies or both technically feasible (having attempts to seize power. More benefitted from extensive analytical generally, political and social work) and politically achievable pressures could lead to a (having benefitted from numerous weakening of fiscal discipline. internal governmental discussions and In the medium-term, there may consultations with stakeholders). also be a risk of social tension Moreover, the Bank has strengthened its due to the large proportion of emphasis on demand-led community- unemployed or under driven development approaches so as to employed young people in the encourage broad participation and population. clearly respond to community priorities.
11. Operation-specific Risks This CDD approach working H Staff (Facilitators and Regional S with poor rural communities Advisors), working directly with the through project contracted staff communities, will have previous and not NGOs, has not been professional experience working on tested in the regions before and community development issues. might not be successful at Staff will receive intensive training mobilizing the communities to at the beginning of the Project to prepare and implement their ensure that they have achieved the Local Development Plans and level of performance required from micro-projects. them. PCU staff will include a capacity- building specialist. Staff from line Ministries will be brought into the preparation and validation of the LDPs as well as serving as resource persons for the
micro-projects.~~ A rigorous M&E system, including
18 Risk Risk Mitigation MeasureslFactors
technical audits will ensure that any implementation issues ofthe Project and specifically micro-projects are detected at an early stage and appropriate remedial actions taken. Comprehensive, integrated S The PCU has installed appropriate S budgeting and accounting accounting software and will system is not yet in place elaborate an Administrative and Existing financial Financial Manual of Procedures. management capacity may be The activities to be financed by the inadequate. Project are clearly identified. CDD activities are risky from A Financial Management Specialist the fiduciary perspective and a Senior Accountant have been given the fact that financial recruited. resources are entrusted to RAs and Facilitators will be CGs’ often with limited extensively trained during the first 6 experience in financial months ofthe Project in community management. project and financial management techniques. They will be responsible for training and supporting CG. CG will prepare monthly progress and financial reports for their constituents. Regular review of these will enable detection of issues.
0 GPs have little prior H Community procurement methods H experience in applying will be kept simple and GPs will community level receive training from the procurement rules. There is a Facilitators, RAs and Procurement risk of misprocurement. Specialist. Facilitators together with RAswill prepare monthly progress reports.
0 Procurement audits will be conducted by Facilitators, RAs and the project procurement specialist on a regular basis. WB procurement specialist will conduct random spot checks ofcommunitv Drocurement.
0 Although the environmental M An ESMF and a RPF have been L and social impacts of the prepared and all project staff will be activities are expected to be trained in its application. minimal, site specific, and Additionally, government and manageable to an acceptable beneficiary communities will be level, certain micro-projects sensitized to these issues and will be may have potentially apply the processes and procedures
19 Risk Risk Mitigation MeasureslFactors
negative environmental and as part ofmicro-project preparation. social impacts. Annual independent technical audits will be undertaken to verify ESMF compliance and detect any cumulative impacts. Local government officials S CDD processes and procedures to M and political appointees may be adopted by the Project will be try to hijack project resources explicitly designed to encourage the and/or influencing local full participation and inclusion of all development in line with stakeholders, and to ensure their own interests. transparency. RAs and Facilitators will be responsible for ensuring the effectiveness ofthe participation process at the regional and community levels, respectively. A communication strategy will be prepared at the beginning ofthe Project and updated annually thereafter. It will include targeted communication activities which will be conducted at the local level to raise stakeholders’ awareness, disseminate good practices and keep beneficiary-communities informed. The communication strategy will be paramount in reducing the risk of political cauture from local elites. 111. Overall Risk (including Reputational Risks) iven that CDD approaches are relatively S new endeavors in Guinea-Bissau and hence in-country experience-is still low and that the country situation remains fragile, an overall risk rating of substantial isjustified for this operation. Rating of risks on a four-point scale-High, Substantial, Moderate, and Low-according to the probability of occurrence and magnitude of adverse impact
F. Grant conditions and covenants
58. Effectiveness: 0 The Recipient shall elaborate and adopt a Project Implementation Manual, in form and substance satisfactory to the Association.
59. Covenants: 0 Four months after Effectiveness the Recipient has appointed the independent auditor in terms acceptable to the Bank.
20 IV. APPRAISAL SUMMARY
A. Economic and financial analyses
60. Economic. The expected tangible benefits of this Project are: the generation of income and employment through the financing of commercially viable micro-projects and the increase in well being through the provision of basic social services such as education, health, and water infrastructure in the targeted, disadvantaged rural areas. Other less tangible benefits expected from the Project include strengthened community social capital, improved capacity of local government, and enhanced mutual trust and accountability between government, non- government and civil society.
61. Using examples drawn from the FIAL as case-studies, an economic and financial analysis was completed to estimate likely Net Present Value (NPV) and Internal Rate of Return (IRR) for commercial activities, and an incremental cost analysis for evaluating public goods, such as education and health. A detailed analysis for these case studies was undertaken, the results of which are summarized in Table 2 below.
Rehabilitation ofdykes for 28.87% 1,48 1,593 mangrove rice Water wells 22.81% 5,283,260 Palm oil production 50.13% 8,24 1,89 1 Schools Increment in per student cost: 45%. Increment in student outmt: 466%
2. Finan~ial'~NPV=US$ million; FRR = % (see Annex 9)
62. The recurrent cost implications of the Project are largely associated with the implementation of the micro-projects, in particular those in the social sectors. It is recognized that the central government will not be able to support these costs in the short to medium term and hence responsibility for meeting the recurrent costs of micro-project investments will fall upon beneficiaries. Given this, it will be important that beneficiary communities take into consideration all the resources at their disposal (technical support from local government and line ministries as well as in-kind or cash support from NGOs, church groups, and other development partners) so as to meet the micro-project investment and recurrent costs. A plan for
l3The Financial analysis calculation was based on the assumption that each LDP would receive up to US$20,000. During appraisal these figures were adjusted an estimated 85 percent of communities receiving up to US$30,000 each and the total investment in micro-project remaining equal to US$2.4 million.
21 the O&M of these investments will be an integral part of the micro-project design, the viability of which will be assessed during micro-project appraisal and later monitored after micro-project completion (see the table presented in Annex 3 on Arrangements for Results and Monitoring).
63. The fiscal impact ofthe Project will be positive although small. At the level ofthe project office in Bissau, it will be mostly in the form ofpayment ofsales taxes for project purchases and any other taxes that may accrue to project staff.
64. About 60 percent ofthe US$2.82 million (not including in-kind community participation) used for financing micro-projects will be used to purchase construction materials not available in the communities, transportation, and lodging. In all of these cases the fiscal impact will be indirect, through increased sales taxes and import taxes. At the project level if US$2 million of the total US$5 million are used for purchases, they would generate tax revenues amounting to less than US$0.5 million over the life ofthe Project.
65. Based on the original project assumptions that 120 communities receive micro-project grants of about US$20,000 each (now increased to US$30,000) and that 75 percent of these grants finance income-generating activities (equivalent to a total ofUS$ 1.8 million), a minimum of 25 percent in revenues to local communities would be generated. This would be equivalent to US$450,000 in net earnings over the life ofthe micro-projects.
B. Technical
66. Because the beneficiary communities will be selecting their priority investments in their LDP based on an open menu, it is not possible to carry out advanced technical appraisal of micro-projects. However, the POM will detail the guidelines and procedures to be followed by the beneficiary communities for the preparation ofmicro-projects. The RAs and Facilitators will work with the beneficiary communities throughout the LDP and micro-project cycles from LDP development through micro-project technical feasibility assessment, to implementation and monitoring. Guidelines, procedures and tools included in the POMwill be written in Portuguese and in any other vernacular language most frequently spoken in the three regions. The instruments developed will be kept simple to ensure that they can be mastered by the beneficiary communities.
67. The LDPs and especially the micro-projects will go through a rigorous appraisal conducted by the RAs with support from experts (engineers and/or architects) and technical staff from line ministries with a view to ensure that they meet the quality standards defined in the POM for each type of micro-project. Micro-projects to be financed by the Project will be kept simple (i.e., basic economic and social infrastructures) so that they can be undertaken by local small entrepreneurs with direct support from beneficiary communities when needed. In most cases, they will not require use of any heavy equipment. The key concern will be to ensure that: (i)the micro-project design is sound; (ii)the capacity within the community and/or outside can be mobilized for an effective and efficient micro-project implementation; (iii)micro-projects effectively respond to the priorities identified by the beneficiary communities in their LDP; and finally (iv) conditions for micro-project sustainability are met.
22 C. Governance
68. The overall country context is one of weak governance as illustrated by sustained political instability, conflict and weak institutions. The high turnover among senior policy makers, senior civil servants and public enterprise managers has undermined the state’s performance. Short-lived governments, focused on managing day to day business, have had limited ability to develop, let alone implement, long term strategies. The continuous intervention of the military in the political arena adds another level of complexity to a difficult governance situation.
69. Experience has shown that the use of a CDD instrument is well-adapted to these types of situations. This Project will emphasize participatory planning, capacity-building and accountability. It will mobilize and empower local community groups, including local government, by giving them control over planning decisions and investment resources. In so doing, it will contribute to social and governance outcomes, while building infrastructure assets. The focus on local management of resources and decision-making will promote a shift in existing power arrangements, creating opportunities for poor and marginalized groups to gain voice and control over their own development. The CG and GP will be required to keep the beneficiary-community continually informed of implementation progress and transactions. This will enable the community members to hold the CG and GP accountable, thus promoting principles oftransparency and good governance.
D. Fiduciary
70. Financial Management and Disbursement Arrangements: The PCU will have the overall financial management responsibility for the Project. The PCU will recruit a Financial Management Specialist and a Senior Accountant with qualifications acceptable to IDA. A Designated Account (DA) will be opened in a commercial bank acceptable to the World Bank and managed jointly by the PCU and the Treasury Department. At the beneficiary level, accounts will be opened in a commercial bank in Bissau and/or in the region by the recipients of micro-project grants and will be managed by three designated members of the CG on behalf of the community. Funds will be transferred to these community accounts in tranches in accordance with the specifications of the micro-project grant agreement, and upon the presentation ofsupporting documentation in the form ofprogress and financial reports.
7 1. Reporting: Periodic financial reporting will consist of: (i)quarterly un-audited Interim Financial Reports (IFRs), submitted by the PCU to the World Bank no later than 45 days after the end of each quarter; (ii)annual financial statements prepared by the PCU in accordance with International Accounting Standards; (iii)micro-project progress and financial reports prepared by the CG, presented to their communities and submitted to the Facilitators on a monthly basis for transmission to the Project’s Senior Financial Specialist, through the RA; (iv) quarterly consolidated financial and progress reports prepared by the RAs and submitted to the PCU; and (v) annual independent safeguard compliance reviews.
72. Auditing: The Project’s financial statements will be audited on an annual basis by independent external auditors with qualifications acceptable to the Bank, and in compliance with International Standards on Auditing. The audit will include audits ofa sample ofthe community
23 financial reports. The audit report of the Project's financial statement will be submitted to the World Bank within six months of 31 December of each year. The independent auditors will be recruited within four months ofProject effectiveness.
73. The POM will reflect the Guidelines of Fiduciary Management for Community-Driven Development projects. Details ofthe accounting, financial management and audit arrangements are presented in Annex 7 (see footnote #5).
74. Procurement Management. Procurement for the Project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 and revised on October 2006; and "Guidelines: Selection and Employment ofConsultants by World Bank Borrowers" dated May 2004 and revised on October 2006, and the provisions stipulated in the Legal Agreement. Procurement functions will be carried out by a Procurement Specialist, who will: (i)draft the procurement documents; (ii) advise the team when it comes to the evaluation process and the contract award; and (iii)monitor the procurement activities conducted at the community levels for the implementation of micro- projects.
75. Micro-projects will be implemented by the GP together with CG. The GPs will be responsible in particular for all procurement to be done to implement the micro-project. The members of the GP and CG will receive training on procurement which will be provided by the Facilitators and/or the R4s with the support ofthe project's Procurement Specialist in the initial phase of the micro-project. The training will familiarize the GPs with simple procurement procedures and how to obtain the best price and the best quality for the material or services required.
E. Social
76. There is a high level of diversity and inequality in Guinea-Bissau. The country hosts 20 ethnic groups which makes the formation of social capital challenging. Despite this, it has been shown that religion; age and gender are perceived to be the more important factors in determining inequality than ethnicity. Geographic location, while not perceived by the population to be as important, has been demonstrated to play an important role in explaining differences in well-being between households.
77. During preparation the Government commissioned two key studies; one examining the institutional frameworks in place at regional and local levels, and the other a social and economic survey. These identified the key actors and stakeholders, and provided an overview ofthe social and economic conditions in the project regions (population demographics, access to basic social services, sources of income and seasonality, perceptions of well-being, and potential sources/mechanisms for resolution of conflict). Direct interviews were conducted in a representative sample of communities. Several consultations, led by members of the National Technical Team (NTT), which oversaw project preparation, were held with the actors in the proposed project regions throughout the preparation process to inform them of and solicit their feedback on the project objectives and design.
24 78. The CDD approach is designed to include all stakeholders at community and local levels. The participatory process supported by the project is specifically designed to encourage and support the involvement of usually excluded social groups such as women, youth and handicapped. The level of social inclusion and the social impact of the project will be specifically tracked as part of the project's monitoring and evaluation program.
F. Environment
79. The environmental category of the Project is B. The Project through the micro-projects could potentially trigger the following safeguard policies: OP 4.0 1: Environmental Assessment; OP 4.04, Natural Habitats; OP 4.09, Pest Management; OP 4.1 1, Physical Cultural Propriety and OP 4.12, Involuntary Resettlement. However, as individual micro-projects are small no large scale, significant or irreversible impacts are expected. Environmental and social safeguard risks are the typical ones for a rural CDD project supporting small scale basic social and economic infrastructure, and might include: (i)localized degradatiodencroachment of natural habitats and associated loss of biodiversity; (ii)soil degradation and erosion; (iii)decline in water quality; (iv) inappropriate waste disposal; (v) cutting of trees; (vi) use of pesticide and (vii) potential public health concerns. Possible social issues were identified to include: loss of/damage to cultural property and involuntary resettlement, including loss of access to resources.
80. As part of project preparation the Government has prepared an ESMF14 and a RPF to ensure that any potential negative safeguard impacts are detected during the micro-project design phase, allowing appropriate design and mitigation measures to be incorporated prior to submission of micro-project proposals for appraisal and approval. The ESMF also includes detailed Terms of Reference for the preparation of a Pest Management Plan. The processes and procedures defined within these will be an integral part of the PIM. The ESMF details the environmental and social screening criteria and mechanisms to be used during micro-project appraisal. This screening tool will include a checklist designed to detect any potential environmental or social negative impacts linked to an individual micro-project and ensure that an appropriate Environmental Management Plan and/or Resettlement Action Plan and/or Pest Management Plan is prepared and appropriate mitigating measures are put in place, if necessary. The ESMF also includes provisions for an annual review for safeguard compliance and to detect potential cumulative environmental impacts that might arise across several micro-projects. In addition, a negative list will define ineligibility criteria and activities which may not be financed by the Project.
81. Environment and social safeguard compliance will be assured through a three tiered process. First, at the micro-project preparation stage, beneficiary communities, assisted by trained Facilitators, will be required to complete an environmental and social safeguard checklist as part of the micro-project funding application. This will help them identify any safeguard issues of concern, and prompt the incorporation of appropriate mitigation measures into micro- project design. Provision exists under the Project to contract specialized technical assistance to support the preparation of environmental management plans and resettlement action plans when deemed necessary. Second, at the micro-project appraisal stage, the Ustogether with relevant
l4The ESMF and RPF have been disclosed in Infoshop on March 3', 2009. The disclosure of both ESMF and RPF in Guinea-Bissau took place on March 2"*, 2009. Workshops were held in each of the region targeted by the Project.
25 regional technical representatives will conduct a desk and field review of the proposal prior to its approval. The RA’s role explicitly includes the verification of the appropriate identification of safeguard issues as well as the mitigation of safeguard concerns. Third, at the project level, the M&E Specialist, working together with the RA and Facilitators in the field will be responsible inter alia for tracking safeguard compliance across the Project as a whole and identifying and addressing any issues that arise during micro-project implementation. Additionally, an independent specialist will be recruited to conduct an annual review of safeguard compliance, including detection of potential cumulative environmental impacts that might arise across several micro-projects. Finally, the M&E Specialist will work in close collaboration with the government’s Cell for Environmental Impact Evaluation (CAIA), the agency mandated to oversee the application of the country’s environmental impact legislation.
82. Recognizing that existing capacity of government officials at the central and local level to ensure compliance with environmental and social safeguards is weak; project staff as well as central and local government representatives will all be sensitized and trained in these issues. Furthermore, general sensitization of beneficiaries will form part of the formal project communication strategy.
G. Safeguard policies
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPBP 4.01) [XI [I Natural Habitats (OP/BP 4.04) [XI [I Pest Management (OP 4.09) [XI [I Physical Cultural Resources (OPBP 4.1 1) [XI [I Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OP/BP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP 7.60)* [I [XI Projects on International Waterways (OPBP 7.50) [I [XI *By supporting the Project, the Bank does not intend to prejudice the final determination of the parties’ claims on the disputed areas.
H. Policy Exceptions and Readiness
83. There are no policy exceptions sought.
84. The Project is ready for implementation. A PCU has been established under the PPF, the Project Coordinator and Senior Accountant are in place and the remaining key PCU staff are in the final stages of recruitment. The procurement plan has been completed prior to Negotiations. The preparation of the POM is on-going. A first mission took place in early August. A first draft for review and comments by IDA will be available by early October 2009. At the regional level, office space has been made available by the regional governments and the RAs and Facilitators have been recruited and are undergoing training.
26 Annex 1: Country and Sector or Program Background
Political Economy
1. The short post-independence history of Guinea-Bissau has been marked by deep political instability. While most neighboring countries became independent in 1960, it took a long and fierce guerilla struggle for Guinea-Bissau to achieve independence in 1974, leaving it with few structures for effective governance in place. Jog0 Bernard0 Vieira, who had seized power in 1980, ruled the country for almost 20 years until he was ousted after the conflict of 1998-99. In the past 8 years, three elections took place - two legislative in 2004 and 2008, and a presidential election in 2005 where Vieira returned as elected President. All elections were deemed reasonably free and fair. The National Assembly is a vibrant but highly polarized legislative chamber. Despite broadly successful electoral contexts, however, instability has been sustained. From 2000 to early 2009, eight Prime Ministers have been appointed for eight different governments - an average time-in-office of about one year.
2. Sustained political instability, conflict and weak institutions make for a complex socio- political landscape and a precarious governance structure. The high turnover among senior policy makers, senior civil servants and public enterprise managers has undermined the state's performance. Short-lived governments, focused on managing day-to-day business, have had limited ability to develop, let alone implement, long term strategies. Recurrent delays in paying salaries, pensions, and meeting contractual obligations are fostering deep discontent among the civil service, and domestic suppliers, and causing the exodus of qualified human resources.
3. The continuous intervention of the military in the political arena adds another level of complexity to a difficult governance situation. The military has historically intervened in civilian politics on numerous occasions. Pension and salary payment backlogs, very poor living conditions in the barracks and insufficient sustenance have increased the military's discontent with civilian authorities, and weakened their ability and resolve to address one of Guinea- Bissau's most serious sources of insecurity, namely drug-trafficking.
4. In spite of these challenges, a democratic drive began to take root. The November 2008 legislative elections saw the historic independence party PAIGC earning a strong majority with 67 seats out of 100 in the National Assembly. Shortly after the elections, an attempt to kill the President in his residence failed. In the night from March lSfto 2"d, 2009, both the Chief Staff of Army and the President of the Republic were killed in short order. The population remained calm. As provided by the constitution, the Speaker of the National Assembly was sworn in as Interim President on March 3 , 2009. Presidential elections, which according to the constitution are supposed to take place within 60 days, were meanwhile postponed to June 2009. Little more than three weeks after the tragic events, the National Assembly passed both the new Government Program and the new budget with a clear majority. However, political violence continues to threaten the fragile consensus that emerged in the aftermath of the tragic incidents in early March. Despite this, the first round of presidential elections was held successfully on June 28, 2009, and a run-off was held in July 2009, leading to the election of President Malam Bacai Sanhh.
27 Social and economic context
5. Poverty is widespread in Guinea-Bissau, but even higher in rural areas. Guinea-Bissau is one of the poorest countries in the world, with two out of every three people living below the poverty line (US$2/day), and one out of every five living in extreme poverty. It is estimated that rural areas - essentially all of the country outside of the capital city of Bissau - are home to some 80 percent of the 764,672 people estimated to be living below the poverty line. Of the key drivers of poverty highlighted in the 2004 Poverty Reduction Strategy Paper (PRSP), such as the 1998 conflict and ongoing political in~tability’~,many are specific to the rural areas, including: (i)a vacuum of local government, and subsequent lack of social services and basic infrastructure outside of Bissau and (ii)a lack of growth in (and diversity from) key economic sectors (e.g., agriculture, livestock and fishing) that support a majority of the population.
6. More specifically, after independence the presence of local Government in rural areas was essentially limited to local committees established to expand and support the political party. This committee system was abolished with the introduction of a multi-party system of governance in 1994, leaving the Government with few resources, little presence, and weak legitimacy at the local level. A recent study on the delivery of social services, “Guinea-Bissau - Meeting the Demand of the Poor and Vulnerable - The Road to Better Social Service Delivery ”, confirmed that social service delivery, specifically education, health and social protection, is chronically underfunded and poorly managed, and highlights the critical role non-government stakeholders (NGOs, communities, etc.) need to play in improving delivery of these services in the short to medium term. In some parts of the country, non-governmental organizations are in fact filling the vacuum by assuming the functions of service delivery.
7. The limited delivery of social services and basic infrastructure throughout much of the country, is highlighted by the following: (i)the net school enrollment rate is 53.5 percent for boys and 36.3 percent for girls; (ii)the adult illiteracy rate is 63.3 percent; (iii)only 38 percent of children suffering from simple malaria and 29 percent with cases of serious malaria are treated properly; (iv) infant mortality is 122 per 1,000; and (v) 95 percent of people in the country journey an average of 30 minutes for access to drinking water. Outside of Bissau, agriculture is the engine of the country’s economy and the source of 42 percent of the revenue of the poorest quintile of the population. There are currently few economic opportunities for the rural population outside of the agriculture sector, or even outside of planting and processing cashews (this crop alone provides work for 82 percent of the rural workforce).
8. The result is a growing ‘rural exodus’ to Bissau and to other countries. On average the poverty rate in Bissau is at 5 1.6 percent. In addition, the disparity between the capital and the rest of the country is growing, particularly in terms of access to social services and infrastructure, as well as economic opportunities. Though the data are not yet conclusive, it seems that Bissau has been characterized by an influx of unemployed youth, a reduction in employment opportunities
’’According to the 2006/2007 World Bank Integrated Poverty and Social Assessment, GDP per capita would be an estimated 42 to 43 percent higher today if the 1998-1999 war had not occurred, and an estimated one in three persons in poverty today might not be if the conflict had not taken place.
28 and a decline in average income over the last few years. Meanwhile, the availability of labor in rural areas seems to be decreasing.
9. Guinea-Bissau produced a PRSP in 2004 (later revised in 2005 and 2006), with strategies to address rural poverty and emigration. The four pillars of the PRSP are: (i)modernizing the public administration, strengthening governance and ensuring macroeconomic stability; (ii) fostering economic growth and job creation; (iii)increasing access to social services and basic infrastructure; and (iv) improving the living conditions of vulnerable groups. l6
Livelihoods in Rural Areas”
10. In Guinea-Bissau, rural livelihoods are characterized in large part by their dependence on the cashew and rice sectors, as well as subsistence agriculture. Rice remains the most widely grown staple crop in the country, although in the east and among the Fula and Madinga, corn is the preferred staple crop. Crop diversification is the norm-dictated by the necessity to reduce risks in order to ensure food security. Cashews (including production and sale of cashew wine) have played a particularly important role for many households, providing an important source of income-as well as consumption if traded for rice-during parts of the dry season. Other sources of consumption and income come from cultivation of peanuts, cassava, beans and so forth. Horticultures (tomatoes, onions, etc.), fruit production (mangos and bananas in particular), and exploration of forest products (wood, coal, straw, extraction of palm oil and wine, etc.) are also pursued, partly as a complement to rice and corn for consumption purposes, but increasingly as a source of income as well. Some households breed chickens, hens, goats, and other small animals. While fishing has traditionally been considered as a marginal activity undertaken during times of poor harvest and during the “hunger season,” it is an important coping strategy for those community based along the coast and rivers.
11. Across the country, living conditions are especially difficult for rural households, who face a range of constraints in improving their livelihoods. Agriculture activities are mainly non- mechanized and rely in most areas on manual labor. Many households, furthermore, lack basic tools and implements, such as plows and rice husking tools. Access to markets, credit and inputs (such as seeds and fertilizers) is low across the country, something, which is exacerbated by the devastated transport and energy infrastructure, the limited activities of the private sector particularly in rural and remote areas, as well as a retreating and reduced State with limited capacity and resources to provide agriculture extension services to the rural poor. Given many of these constraints, many households reported that the low value of local products and the inherent difficulties related to reaping the benefits of their production. The lack of certainty that results from this leads to low and sub-optimal investments, in addition, of course, to subsistence-level harvest and consumption. While a lot of these constraints and obstacles could be overcome with a minimal level of investment, a lot of these investments presume a present and capable State, as well as a functioning and vibrant private sector. In the current context, however, the vacuum left
Vulnerable groups are defined by the PRSP as people who have no means to solve their daily basic needs due to lack of income or resources, or people who are confronted with specific situations that endanger their lives and/or physical integrity. These groups are identified not just by their limited resources for subsistence, but also by the geographical areas in which they reside, because most of them live in rural areas and outlying urban areas. ” This section is abstracted from World Bank Paper No.88: “Conflict, Livelihoods, and Poverty in Guinea-Bissau”. Edited by Bany Boubacar- Sid, Edward G. E. Creppy, Estanislao Gacitua-Mario, and Quentin Wodon.
29 by the State, particularly in rural regions, has left the provision of most basic services to traditional and informal authorities and organizations.
Institutional context and local government
12. Since independence, local governments in Guinea-Bissau have been conceived as deconcentrated levels of the central State. After independence, local administrations became Party Committees (Cornitis do Partido) or State Committees (Cornitis do Estado) and were headed by a president. Its organs were the Regional Councils (Conselhos Regionais, later replaced by the Conselhos Directivos) which selected the members of the Popular National Assembly, in reality formed entirely by members of the Party. During the same period, the traditional authorities (rbgulos) lost most of their power and responsibilities and in some cases disappeared altogether.
13. In 1996, a series of decentralization laws were adopted and organized government at local level and defined competencies among the various levels of local governments Le., the regions and municipalities. The constitution was also modified in 1995 to include the existence ofregions and municipalities. However, the armed conflict erupted not long after the adoption of the decentralization laws, which were therefore not implemented.
14. The country is divided into eight administrative regions. The capital, Bissau, enjoys a specific status. At the regional level, the state is represented by a governor who reports directly to the Ministry of Territorial Administration, through the Secretary of State for Administration. The Governor is the highest government representative in the region and is responsible for supervising and coordinating all deconcentrated services of the ministries at local level. The Governor is assisted in his functions by a Regional Secretary and administrative and finance staff.
15. The regional government comprises also two consultative bodies:
16. The Conselho Directivo (formerly Conselho Regional) which is a broad forum ofanalysis and debate for regional matters and issues submitted by the Governor. The members are the Sector Administrators, representatives of the population nominated by the Governor and members nominated for their expertise.
17. The Regional Planning Office (Gabinete de Planzjkqclo Regional), although not a structure considered by law, functions also as a consultative body. It includes the various representatives of the ministries at local level, representatives of civil society, of NGOs, and of traditional authorities.
18. The regions are divided into administrative sectors. The geographical boundaries of the sectors correspond to the municipalities and are the only level where local elections are contemplated in the law. In the current situation, the administrative sectors are just . administrative and political subdivisions of the region and headed by a Sector Administrator, assisted by a Sector Secretary and as small administration of assistants and tax collectors. A Conselho Directivo Sectorial exists also in practice, though its functioning varies from sector to sector. Its members include the ministries’ staff at sector level, representatives of civil society and of the traditional authorities. It meets at a variable frequency depending on the sector, and
30 provides some legitimacy to the decisions taken by the sector authorities and offers communication channels with the population.
19. Sectors are further subdivided into sections, where the government in most cases doesn’t possess representative and relies on the traditional authorities, the rkgulos. Some sections which now have a large population (sometimes bigger than some sectors) may be headed by an administrator nominated and reporting to the Sector Administrator. Within the sections, the lowest levels ofpopulation settlements are the tabancas.
20. The current efforts of the government concentrate on strengthening the capacity of local administrations and promoting initiatives to build capacity at local level for development planning. The longer term objective is to devise a decentralization strategy that takes into account in a realistic manner the institutional and financial capacity in the country, and to initiate a revision ofthe laws of 1996.
21. At present, neither the regions nor the administrative sectors receive any investment funds from the central government and the fiscal transfers to the regions are used entirely to cover salaries and operational costs. Additionally, any local revenues collected by the regions and administrative sectors are applied to salaries and administrative costs.
Role of Social Network in Guinea-Bissau”
22. There is a high degree of poverty and vulnerability in Guinea-Bissau. Yet social networks often seem to provide crucial sources of support for poor households, particularly during times of stress and coping. Indeed the resilience ofthe population in the face ofhardship could probably not be explained if it had not been for the minimal protection offered to many households by “safety nets’’ that poor households build. Nevertheless, the poorest ofthe poor are sometimes excluded from such networks-social asset, which like other assets, may be resources to which they do not have access. Other networks are based on hierarchical and non-egalitarian patron-client relations, although while providing some source of security to the poorer client, these relationships may still be abusive. Hence, social networks are not necessarily a panacea to solve the welfare problems ofthe poor.
23. Finally, it is worth noting that there is a high level of inequality in Guinea-Bissau. This inequality, as well as to some extent diversity itself, are likely to undermine the formation or maintenance of social capital. The country comprises some 20 different ethnic groups, underscoring the fact that social capital formation may not be durable and sustainable, particularly in urban settings where inequality and diversity is a greater display.
18 This section is abstracted from World Bank Paper No.88: “Conflict, Livelihoods, and Poverty in Guinea-Bissau”. Edited by Bany Boubacar- Sid, Edward G. E. Creppy, Estanislao Gacitua-Mario, and Quentin Wodon.
31 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies and Main Interventions in the Area of Community Development and Support for Decentralization
CDD and environment Coastal and Marine MS Biodiversity Management Project Not yet effective Participatory Rural Development Project (SPF) HIV/AIDS HIV/AIDS Global MS Mitigation Support Program Budget support to Emergency Public Service 0s education sector Delivery SIL Health National Health MS Development Program (completed) National Health Project Recently effective (SPF) Education Basic Education Support MS Project (completed) Agriculture Emergency Food Security 0s Support Project Other Donors UNDPLJNCDF Regional and Local Development Support Project AfDB Rural and Agricultural Rehabilitation Project IFAD Rural Rehabilitation and Community Development Project EC FIAL (Coastal and Marine Biodiversity Project’s CDD component - cofinanced by the World Bank; Global Environmental Facility - GEF; and European Commission)
1. The proposed project will learn from various initiatives in the area of community development already piloted by the Government, donors and development partners. In particular, the Project will make use of the lessons learned from the FIAL, and the selection of the project areas also reflect coordination with these other projects in order not to concentrate resources on a few regions. Most ofthe interventions are, however, at an initial stage.
2. Fund for Local Environmental Initiatives (FIAL). FIAL is a Community Development project covering five protected areas and is part of the CBMP financed by Word Bank, the Global Environment Facility and the European Union. FIAL finance micro-projects identified and implemented by communities in selected protected areas in accordance with the
32 programmatic objectives of FIAL, which intends in particular to: (i)reduce pressure on natural resources in the protected areas and their immediate surroundings; (ii)improve living conditions ofcommunities within the protected areas; (iii)promote environmentalhiodiversity conservation and protection; and (iv) strengthen local institutions in participatory planning and in their capacity to influence policies and activities related to the management of environmental and natural resources.
3. The project has already produced a detailed implementation CDD manual and the pilot phase has resulted in the implementation of several micro-projects that gave benefits to about 18 communities and more than 8.000 people. The FIAL results have shown a strong and well articulated community demand for better social services and infrastructure in many rural areas, and a significant capacity amongst communities and traditional institutions to assume their own development agenda. The pilot phase is being expanded in other areas ofthe project.
4. The Emergency Food Security Support Project (EFSSP). This US$5 million IDA grant approved in September 2008 will help finance short- and medium-term activities to mitigate the impact of rising food prices in Guinea-Bissau as a result of the global food price trends. The project will include three components: (i)support to improve food security of the most vulnerable populations through school feeding and food for work programs; (ii)support for the country’s Emergency Plan for the Agriculture Campaign 2008-10 to increase food production with a particular focus on rice; and (iii)project coordination, monitoring and evaluation. The proposed Project is expected to be implemented over a period ofthree years and will focus on six regions in the country, Bafata, Biombo, Bissau, Cacheu, Gabd and Oio.
5. The first sub-component of the project second component will intervene at the community level providing demand-based support, in the form of matching grants to communities and smallholders farmer groups, for small-scale agricultural infrastructure, production, processing and marketing sub-projects that would deal with rice and other staple food crops only (i.e. no cashew). The key results expected from the implementation ofthis sub- component are: (i)increased adoption of new technology to enhance production of food crops, particularly rice; and (ii)increased assistance to smallholder production activities and access to agricultural markets through provision of matching grants. Increased adoption of new technologies will be achieved through assistance of about 500 smallholder farmers groups to adopt new technologies. Increased assistance to smallholder production and access to markets through provision ofresources for production and marketing through the matching grants.
6. Regional and Local Development Support Project (PDRL). This project is mainly financed by UNDP and UNCDF (for a total amount of approximately US$5 million) and is being implemented in the region of Gabd. Its objective is to strengthen the capacity of the envisaged future municipalities in the region of Gabd, and more specifically to: (i)promote the regional capacity for coordination and enable local economic development; (ii)reinforce the management capacity at the central Government, regional and local level; (iii)support the socio-economical development of the region; and (iv) produce lessons and best practices in the area of local governance.
33 7. Project for Rural Rehabilitation and Community Development (PRRDC). This project of US$4.7 million is financed by IFAD in the regions of Tombali and Quinara. The duration of the project is 4 years (2008-2012). The project, which was approved in September 2007, finances mainly: (i)the rehabilitation of infra-structures and basic services such as rural roads, schools, water and sanitation, etc; (ii)the capacity building of local associations, through a Fund for Local Development Initiatives; and (iii)general support to the rural economy.
8. Project for Rehabilitation of the Rural and Agricultural Sector (PREZAR). This project of US$8,5 million is financed by the AfBD in the regions of Gabu, Bafath, Oio, Cacheu and Biombo. The main activities of the project are: (i)the rehabilitation of rural infra-structures, in particular rural roads and productive infi-a-structures such as rice fields; (ii)support to production; and (iii)support to the commercialization of local agricultural products.
9. Regional Planning (SNV - Netherlands Development Organization and the French Association of Volunteers of ProgressIAssociation Franqaise des Volontaires du Progr2s - AFVP). There are also recent experiences to assist in the elaboration of regional plans, in the region of Gabu with the support of AFVP and in the regions of Bafata and Cacheu with the assistance of SNV, and with the collaboration of the Ministry of Territorial Administration, and the State Secretary of Planning. The planning processes were led by the Regional Governments and in particular the Regional Planning Commission, under the responsibility of a technical team comprising the regional Governor, .the regional Secretary, the representative of the State Secretary for Planning, representatives of the ministries at local level and of civil society.
10. These planning processes have not resulted in any significant investment, since a severe limitation was the lack of resources beyond the production of the regional plans themselves. However, the initiative has strengthened the capacity of the selected regions and sectors and tested a general planning framework at local level to be taken into account by the proposed CDD project.
34 Annex 3: Results Framework and Monitoring
To increase access to - Micro-projects attaining at least - Demonstrate that MP priority basic social and 50% oftheir target for increased investments have economic access to the relevant brought about significant infrastructures and social/economic positive impacts for the services in participating infrastructure/service, as defined beneficiaries. communities in at least in the approved micro-project two regions ofGuinea- proposal (%) Bissau. Selective specijk project outcomes will in~lude'~: - People in project areas with access to an improved water source (number) - Students in project areas enrolled in primary education (number) - People receiving a basic package ofhealth, nutrition, or population services" (number) - People with access to an all-season road (number) m
Outcome 1: Local - Participating communities that - Verify that participatory Development Plans have adopted LDPs developed planning process (LDPs) are prepared in through a participatory process accurately reflects a participatory manner (number) community priorities at the local level. - Community members who feel (bottom up approachho that the LDP accurately reflects elite capture). the community priorities (%) (broken down by gender and age group)
Outcome 2: - Priority micro-projects completed - Verify successful Communities according to design and within timc completion ofmicro- implement their priority frame (%) (as per technical audits) project. basic social and - Micro-projects operated and - Demonstrates likely economic investments maintained one year after sustainability of in a transparent manner. completion (as per technical audits) investment. (YO) - Assess the level of
Given the community driven nature of this project, actual outcome cannot be defined apriori. This list (nonexhaustive) of potential micro- project types and targets will be refined as project implementation progresses. 2o Basic health package as defined in the National Health Plan.
35 . Community members (by gender transparency and and age group) that can cite the appropriate use of type and budget ofmicro-projects funds. implemented in their communities (%I
Proiect Outputs2' Improved community water points constructed in rural areas served by project (number) Classrooms built and/or rehabilitated (number) Community health posts constructed, renovated or equipped (number) Roads rehabilitated, rural (kms) Agricultural transformation projects implemented (e.g., rice dehusker, oil presses, bee hives) (number) Rice fields recuperated (ha) Horticultural projects implemented (number, ha) People trained in literacy (number) Youth centers built (number)
Outcome 3: Project - National Steering Committee - Demonstrates ongoing activities are effectively meetings held in accordance with discussion oflocal coordinated, the timetable and TORS defined in development and implemented and the POM (%) decentralization. monitored. - Comprehensive annual M&E - Demonstrates reports produced on time, capturing ownership and all relevant project information, coordination by the including that generated by the various ministries. communities, being used to inform - Demonstrates that M& project management (number). E information is used and lessons are actively learned and implementation is adapted accordingly.
*'Given the community-driven nature ofthis project, actual outputs cannot be defined apriori. This list (non-exhaustive) of potential micro- project types and targets will be refined as project implementationprogresses.
36 0 2 -2 -2 -2 -2
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0 0 0 0 0 3 1. An independent consultant financed through the PPF has prepared the M&E Manual. This M&E Manual describes in detail the roles and responsibilities of project staff and stakeholders as well as the tools, data types and periodicity for data collection and analysis. The M&E Manual also identifies target audiences and provides guidance on how information flows and is to be used.
2. The main sources of data will be generated at the community level, including (i) collection of baseline information during preparation of the LDPs and the appraisal of micro- projects, (ii)on-going monitoring of micro-project implementation, and (iii)data gathered upon micro-project completion. Data will also be collected at the regional level with respect to the participation and capacity building efforts targeting the broader array of stakeholders (government, private sector, NGO, CBO, etc.).
3. Project data will be gathered through a variety of means throughout the life ofthe Project. At the community level, data will be gathered by Facilitators through structured and semi- structured interviews with community members, direct observation of community context and characteristics that will take place during the preparation of the participatory LDPs and micro- project proposals. More technical data may be required for the appraisal of the micro-projects themselves which may require support from technical experts. Community members will also contribute to data collection, particularly in the monitoring of the implementation of specific micro-projects and the LDPs themselves. Facilitators in collaboration with the communities will prepare the micro-project completion report which will gather information on and detail the output, impact, and the effectiveness ofthe implementation process.
4. Every year the Project will commission an independent technical audit on a sample of micro-projects. The main thrust will be to confirm that the information gathered by Facilitators, community members and other project stakeholders is accurate. The audit will pay particular attention to both the technical quality of design and the sustainability.
5. Two independent beneficiary assessments will be carried out on a representative sample ofthe project stakeholders during the course ofthe Project. The first will be integrated within the 18 month broader process evaluation and the second within the last six months of project completion. These assessments will be designed to ensure that the views and perceptions of stakeholders are accurately heard and taken into account, particularly those ofvulnerable groups.
6. Annual, independent evaluations of environmental and social safeguard compliance will also be conducted on a representative sample of micro-projects. These will evaluate the quality of the analysis of these issues during micro-project preparation and appraisal, as well as of the implementation of any associated mitigation measures. The evaluation will also investigate existing or potential cumulative impact issues.
7. M&E System. A Project M&E system will be designed in the first six months of the launch of the project implementation. The elaboration of the Manual of M&E, which will describe the entire Project M&E system, has already been initiated with the PPF financing. A final draft manual has been elaborated and will be reviewed shortly by IDA. The Project M&E system will track and assess, inter alia, implementation efficacy, beneficiary satisfaction, use and maintenance of investments, and degree of stakeholder participation. The M&E information will
40 be used to provide feedback and improve project operations. The M&E system will comprise: (i) M&E plan, (ii)various tools/questionnaires for collection of key data, and (iii)computerized Management Information System (MIS). Both quantitative and qualitative information will be tracked.
8. The backbone of the M&E system will be based on the following activities: (i)baseline surveys, to be conducted by the Facilitators in each beneficiary community prior to/as part of the LDP and micro-proj ect preparation processes, (ii) micro-project completion evaluations, allowing measurement of micro-project impact in relation to the baseline data, conducted by Facilitators with technical expert support as needed; (iii)a detailed evaluation of project processes 18 months into implementation, including a beneficiary assessment, to inform the scaling-up from two administrative sectors per region to full regional coverage; (iv) a second independent beneficiary assessment within six months of project completion; (v) annual independent technical audits of completed micro-project investments, and (vi) annual independent environmental and social safeguard compliance evaluations, including detection of potential cumulative environmental impacts that might arise across several micro-projects. These will be complemented by ongoing data gathering activities implemented by project staff and stakeholders throughout the Project. Sample tools and standardized questionnaires and survey materials, including for LDP and micro-project baseline surveys, beneficiary satisfaction and capacity of CBO assessments will be developed by the M&E consultants in collaboration with the project staff, and form part of the M&E Manual.
9. M&E responsibilities. M&E responsibilities will be shared by various project actors. Overall M&E responsibilities will lie with the Monitoring and Evaluation Specialist working in the PCU in Bissau and reporting to the Project Coordinator. The PCU will prepare 6-monthly interim progress reports for internal use and a formal annual report for broader dissemination to all stakeholders. RAs will be responsible for compilation of the information gathered by Facilitators and participating stakeholders from each of their regions on a quarterly basis. Participatory Monitoring and Evaluation (PM&E) will be one of the key means by which data will be gathered and analyzed. PM&E will promote ownership and empower stakeholders, particularly beneficiary communities, by involving them directly in the exercise of data collection and analysis of the implementation of activities, and by encouraging them to express their views and suggestions for improvement.
10. PM&E will include the following: (i)CG will organize monthly community sessions, with the support of the Facilitators, to inform community members about progress of activities. During the meetings, they will identify, jointly with the GPs and community members, constraining factors as well as gather suggestions for the introduction of corrective measures. Community members will also provide feedback on their level of satisfaction with the progress of the activity and these community meetings will contribute to foster transparency, build trust and help track achievements along the implementation process; (ii)at the end of each LDP implementation cycle, the CG will organize, with the support of the Facilitator, a final evaluation meeting with community members to evaluate results achieved vs. results planned for the LDP, to evaluate the use of funds, to assess the performance of the CG and the GPs and to identify the major constraints encountered during implementation and find ways to overcome them.
41 11. Monitoring and evaluation of environmental and social safeguards. As part of project preparation the Government has prepared an ESMF and a RPF. The processes and procedures defined within these will be an integral part of the PIM. Recognizing that existing capacity of government officials at the central and local level to ensure compliance with environmental and social safeguards is weak; project staff as well as central and local government representatives will all be sensitized and trained in these issues (PCU, Regional Advisors and Facilitators). Furthermore, general sensitization of beneficiaries will form part of the formal project communication strategy.
12. Environment and social safeguard compliance will be assured through a three tiered process. First, at the micro-project preparation stage, beneficiary communities, assisted by trained Facilitators, will be required to complete an environmental and social safeguard checklist as part of the micro-project funding application. This will help them identify any safeguard issues of concern, and prompt the incorporation of appropriate mitigation measures into micro- project design. Provision exists under the Project to contract specialized technical assistance to support the preparation of environmental management plans and resettlement action plans when deemed necessary. Second, at the micro-project appraisal stage, the RAs together with relevant regional technical representatives will conduct a desk and field review of the proposal prior to its approval. The R4's role explicitly includes the verification of the appropriate identification of safeguard issues as well as the mitigation of safeguard concerns. Third, at the project level, a part-time Monitoring and Evaluation Specialist will form part of the PCU team, and, working together with the R4 and Facilitators in the field will be responsible inter alia for tracking safeguard compliance across the Project as a whole and identifying and addressing any issues that arise during micro-project implementation. Additionally, an independent specialist will be recruited to conduct an annual review of safeguard compliance, including detection of potential cumulative environmental impacts that might arise across several micro-projects.
42 Annex 4: Detailed Project Description
Introduction
1. The Project Development Objective is to increase access to priority basic social and economic infrastructures and services in participating communities in at least two regions of Guinea-Bissau.
2. To achieve this objective, rural communities will be assisted to identify, implement and manage their priority investments through a transparent and participatory process. This process will have a number of mandatory steps which constitute the annual investment cycle (see graph below). The Project will also contribute to the current efforts ofthe government to improve local governance and will test mechanisms to effectively involve citizens in decision making at the local level. It might therefore, together with other current government, civil society and donors’ initiatives, contribute to the preparation of a future decentralization program, if the Government decided to support it.
3. The following graph summarizes the main steps ofthe annual investment cycle (Figure 1)
Figure 1: Annual Investment Cycle
1 Information and 2 Annual communication selection of beneficiary communities
3 Community mobilization and I.Monitoring and Preparation of the Evaluation local development plans (LOP)
6. Implementation of micro-projects the micro-projects and request for tinancinp
5 Technical appraisal of micro-projects and financing agreement
Selection of the administrative sectors and the beneficiary communities 4. The Project will be implemented in two phases. During the first 18 months of implementation ofthe Project, two administrative sectors per region will be selected by the RPO.
43 (Each region has between 5 and 6 administrative sectors.) These will serve as pilots to test and refine processes and rocedures prior to scaling up to full regional coverage in the second phase. The selection criteriaE3 for these pilot administrative sectors are: administrative sectors where the ASC has shown a higher level of dynamism and initiative (for example, where these ASC meet regularly); administrative sectors that might have already identified their priorities through a validated sector-level plan; and administrative sectors which are relatively easier to access in terms of transport and communications.
5. Annual selection of individual beneficiary communities (tabancas or groups of tabancas) within administrative sectors will be done through a participatory selection process led by the ASC with support from the RA. Over the five year-duration of the project, an estimated 85 percent of the communities will be covered. Prioritization criteria2’ for selecting beneficiary communities include inter alia:
the existence ofrecognized community leaders; some level ofcommunity self-organization, such as a local development committee; comparatively poor access to economic infrastructures and social services in comparison with other communities within the same administrative sector; and the lack of substantial funding from donors or NGOs in recent years.
6. Within the regions, funds will be allocated among administrative sectors according to a simple formula based on the total population figure of the administrative sector: sectors will be classified into two groups of more than 30,000 inhabitants and less than 30,000 inhabitants. The objective of this methodology is to allow communities in all administrative sectors to implement a minimum number of micro-projects while guaranteeing a certain degree of equity. All administrative sectors ofthe target regions will be eligible for and will receive project funding.
7. The Project is comprised ofthree components:
Component 1: Capacity-building for Local Development (US$1.37 million).
8. The objective of this component is twofold: (i)to support capacity development of institutions at regional, administrative sector and community levels in order to prepare LDPs and carry out micro-projects in a participatory and transparent manner (this entire process will be described in detail in the POM, which is a subset of the PIM); and (ii)to promote greater harmonization and synergy between stakeholders on local development issues through outreach and learning activities at central and local levels.
’*The selection criteria and processes for pilot administrative sectors are described in the Project Operational Manual ’’ The selection criteria and processes for beneficiary communities are described in the Project Operational Manual.
44 Information and communication
9. Improving the flow and exchange of information is an essential condition for promoting good governance at the local level and a culture of transparency and accountability among local stakeholders. Therefore, this component will finance preparation of a communication strategy and action plan at the start of Project which will be updated annually thereafter. These will be critical instruments to accompany the annual investment cycle and other project activities.
10. The strategy will focus on key principles of CDD such as social inclusion, participation, transparency, accountability, environment and social safeguards, etc. as well as disseminating information on the project’s objectives, rules and procedures, the roles and responsibilities ofthe different actors and on the condition of access and use of the project’s funds. RAs will also implement targeted information and communication activities at the local level to raise stakeholders’ awareness, build community of practices and better inform the beneficiary- communities. The target audience will include the key stakeholders in the participating regions (of which the priority regions are Biombo and Cacheu) at regional, administrative sector and community level. National level stakeholders will also be targeted as a secondary audience. Information sessions will be organized in the form of workshops and training programs. Communication activities will also be implemented through local service providers such as radios, local media and NGOs. Exchange visits will be organized between administrative sectors and regions, as well as annual workshops to exchange best practices and to share experience.
11. The various steps ofthe investment cycle, from the selection of beneficiary communities to the implementation of micro-projects, will follow mandatory requirements of information sharing and accountability: communications activities; mandatory open community meetings at various stages of the process; regular meetings to present progress of implementation of the micro-projects; etc.
Community mobilization and preparation of the Local Development Plans (LDP)
12. The Facilitators, working in teams comprised of at least one man and one woman, will support beneficiary communities in the preparation of their LDPs and the micro-projects (to be financed under Component 2). The elaboration of the LDP will follow the principles and guidelines of participatory planning, using methodologies described in the POM. The inclusion of vulnerable or marginalized groups of citizens in the decision-making processes is one of the key aspects to be supported. The objective is to give a voice to groups, particularly women and youth, which traditionally do not have the same opportunities to present their views and have their own interests taken into account. The communication strategy will include tools targeting these groups, and their representation on all the local decision-making bodies will be guaranteed and monitored, and will be a condition for approval ofthe micro-projects. The planning process will involve not only community members, but also ASC and other key local stakeholders. The total duration of a participatory planning process in one given community is expected to be no more than three months. Its timing will, in addition, take into account the availability of community members according to the period of the year, particularly of women and other vulnerable groups, and the rainy seasons.
45 13. As defined earlier, a community's LDP is a simple time-bound and prioritized action plan, which reflects the opportunity and constraints faced. The LDPs may include a range of very diverse activities. The resources to be mobilized by the communities themselves will be identified in the plans, as well as those to be requested from the Project and those to be provided by other sources. In order to reach a critical number ofcommunities in each region and to remain within reach of existing absorptive capacity, the maximum amount of financing per LDP will be in the order of$30,000.
14. In the final stages of the planning process, the Facilitators will assist the communities reexamine their representative structures, where they already exist, and to decide how they should be reformed to be more inclusive and representative with a view to establishing a Community Management Committee (Comite' de Gestfio Comunithio or CG). It is advisable that the CG are formed towards the end of the planning process, once the community members have a better idea ofthe roles, responsibilities and challenges to be faced by these committees.
15. The CG will be composed of 5 to 7 members selected and trusted by the community. The composition will reflect the need to include and give a voice to marginalized groups in the community decision-making.
16. Once the LDPs have been prepared they will be validated in a community-wide meeting, during which the participation of vulnerable groups such as women and youth will be actively encouraged and monitored. Following validation by the communities, the LDPs will be presented by a CG to the ASC, with the support of the Facilitator and/or the RA. The ASC will be entitled to make comments and suggestions to improve the plans. Information on the LDPs will also be shared with the WOand the RC by the RA.
Preparation of the micro-projects and the requests for financing
17. For each micro-project to be implemented, an implementing committee (called Grupo Promotor or GP) will be identified or established by the community. The GPs will work with the assistance of the Facilitators and the local level representatives of the ministries, wherever possible, or other sources ofexpertise and technical assistance to prepare micro-projects and the requests for financing. For instance, a school association will coordinate with the staff of the Ministry of Education at the local level for the construction or rehabilitation of a school. The preparation of a micro-project will include a budget; a technical design; specifications for equipment; an implementation and monitoring plan; provisions for future operation and maintenance; and a check-list of environmental and social safeguards.
Technical appraisal of micro-projects and financing agreement
18. Each micro-project will be appraised before the request for financing is approved. The RAs, together with support as needed of RPO, will be responsible for ensuring the technical and financial appraisal ofthe micro-project and will require the collaboration of line ministry staff at regional level, or in some cases at central level and/or from the private sector depending on the nature of the micro-project. The appraisal will include:
consistency with national norms and policies;
46 0 compliance with social and environmental criteria, as defined in the ESMF; community contribution, in accordance with the stipulations ofthe POM; maintenance arrangements for the asset created, if any; 0 social, economic and financial sustainability; and 0 quality of technical design.
Implementation support for micro-projects.
19. Ongoing support and capacity building will be provided by the Facilitators and RAs to the CGs and GPs responsible for oversight and implementation of the LDPs and specific micro- projects, respectively. The CG and GP members will receive training to support them in their responsibilities and obligations towards the communities during the implementation of the LDPs and micro-projects. These trainings will include, inter alia, basic financial management and book keeping; project management; procurement; works supervision; etc. , enabling them to be progressively involved in supporting community participatory planning and micro-proj ect implementation, monitoring and evaluation. Most training will be delivered by the Facilitators themselves, but will also draw upon the services of the line ministries as well as local consultants and associations depending on the focus of the training. Community representatives will also receive training in participatory monitoring and evaluation (PM&E).
Participatory monitoring and evaluation
20. The communities themselves will follow the implementation progress of their plans and micro-projects by monitoring progress on indicators that they will have themselves identified. The results and progress will be shared through public meetings and other local channels of information. Meetings and discussions will also be organized with the ASC. The Facilitators and RAs, with support from the M&E Specialist, will ensure that all necessary information regarding the preparation and implementation of LDPs and micro-projects is being collected as per the requirement of the M&E Manual. The external monitoring will aim at ensuring that micro- project implementation is properly carried out and responds to the principles of transparency; accountability; social inclusion; and social and environmental safeguards.
Cross-cutting capacity-building activities
2 1. Capacity-building activities will be supported at both the regional and national levels so as to gradually transfer to key government and non-government stakeholders the skills necessary to participate in and eventually lead participatory local development processes.
22. At the regional level, the component will strengthen the functioning of existing spaces of consultation and decision-making at regional and administrative sector levels. This will include the RPOs and the ASCs, currently the local government bodies with the highest legitimacy and widest representativity. The RAs will assist stakeholders in reviewing and improving the composition and functioning of these decision-making bodies. To this end, the RAs will work closely with the regional representatives of the Directorate of Planning at MEPRI.
23. Exchange visits will also be organized among administrative sectors and regions, as well as annual workshops to exchange best practices and to share experience. Training sessions will
47 be organized for the Planning Delegates of MEPRI at the regional level and for other line ministries' staff at the regional and local levels with a view to strengthening their basic skills in management and budgeting. The content of this training is not yet defined and will be based on a needs assessment to be carried out jointly by RPO staff with support from R4s and in consultation with other donor-funded projects that are already intervening in this key area.30
24. At the national level, capacity-building activities will be developed under the leadership of MEPRI, targeting both the multi-sectorhtakeholder National Steering Committee3' (NSC) and broader audiences. Additionally, the component will support the functioning of the Local Development thematic group, which is being established with a view to sharing information and knowledge of the experience gained under different projects in support of local development. This group will seek, when possible, to harmonize approaches when working with local communities and promote a greater synergy. More specifically, this component may support other expenditures that might be required by the GoGB to develop lessons and facilitate harmonization of ongoing local development initiatives such as the FIAL as well as a series of workshops and meetings with the actors at the national level, mobilizing expertise from the local level as well as from abroad. The Project will seek to develop a common framework for M&E of these donor-funded projects which could be used by the Government to monitor progress in accordance with the objectives laid out in its PRSP.
Expenditures financed under this component
25. This component will finance two Us, one per region. These R4s will have an office at the RPO, which also hosts several other services ofthe regional administration. The component will also finance minor office rehabilitation, office equipment, a vehicle and operating costs related to the RAs' missions.
26. At the administrative sector level, the component will finance 12 Facilitators, six per region. They will not have a permanent office, but a working space will be provided in some of the administrative sector offices where they will be able to conduct business and meet with stakeholders and the ASC as necessary. Facilitators will have a motorcycle and a budget covering operating costs in order to carry out their missions.
27. Finally, this component will also finance: (i)training that might be required by the WO, ' ASC and community beneficiaries with a view to strengthening their basic skills in participatory planning, management and budgeting; (ii)technical assistance through short term consulting assignments; (iii)exchange visits between administrative sectors and regions; (iv) workshops to disseminate best practices and to share experience; (v) training and workshops at the national level for the NSC; (vi) some operating costs and (vii) logistical support for the Local Development thematic group.
30 Guinea-Bissau has a National School for Public Administration (Centro Nucionul de FormqLio Administrativu) which provides short and long- term training for civil servants and administrators. This School could be hired to provide training to RPO and ASC staff The National Steering Committee will replace and expand the National Technical Team - set up in July 2007 by MEPRI as the counterpart of the World Bank team for the preparation of the RCCD. The NSC will comprise representatives from at least five ministries (MEPRI, Ministry of Finance, Ministry of Education, Ministry of Health and Ministry of Agriculture), civil society (two NGOs), and the private sector. The NSC will be chaired by the Minister ofMEPRI and/or hishers delegate as per PIM guidelines.
48 Component 2: Local Investment Fund (U$2.93 million)
28. The objective of this component is to finance micro-projects identified and prioritized by the communities themselves through a participatory process, and included as part of their participatory LDP. A LDP will include various micro-projects, in order of priority, and the community will decide which micro-projects will be submitted to the Project for financing and which ones may be presented to other donors or sources offunding.
Size of micro-projects
29. Initially, the matching grant ceiling per micro-project will be US$12,000 (this may be exceeded in exceptional cases upon authorization of the Project C~ordinator)~~.A community will be allowed to implement several micro-projects during the life of the Project up to the ceiling of US$30,000 per LDP. Beneficiary-communities will be required to contribute a minimum of 15 percent of total costs (in cash or in kind) for each micro-project as specified in the MOP. Experience under FIAL has shown that communities will pool resources to finance larger-scale micro-projects such as rural road rehabilitation or recuperation of communal rice fields.
30. It is recognized that there is a strong correlation between multiple project cycles, community commitment and project sustainability. Hence, to encourage micro-project success and sustainability, no community will be allowed to implement more than two micro-projects simultaneously and access to future tranches of Project funds will be linked to inter alia the implementation success of earlier micro-projects as well as other factors such as availability of funding and duration of implementation ,of micro-project. By doing so, it will ensure that the Project will not exceed the absorptive capacity of communities and it will also create an incentive for communities to complete their micro-projects under the agreed technical quality standard and timing. The specific ceilings and matching grant contribution requirements may be modified during the course ofthe Project, in light ofimplementation experience on the ground).
Eligible activities
31. There will not be a specific menu of micro-projects eligible for financing, but only a negative list of activities which by their own nature may not be considered for financing. This negative list will be specified in the operations manual and will include, inter alia:
0 private activities and goods, unless they bring benefits to the entire community; 0 salaries and sitting allowances for civil servants and community representatives; 0 political or religious infrastructure and activities; 0 activities that may have a negative effect from an environmental or social point of view (in the conditions described in the ESMF); and activities that are not indentified within the LDP.
’*In such case, the entire micro-project appraisal package, including a note from the Regional Advisor, will be sent for evaluation to the Project Coordinator.
49 32. The micro-projects to be financed by the component will be identified by the communities themselves in their LDP and may for example include (but are not limited to):
construction or rehabilitation of productive infrastructure (“bolanhas”, storage facilities, rice mills, etc.); construction ofwells; construction or rehabilitation of community schools; equipment for schools; construction or rehabilitation ofcommunity health posts or health centers; equipment ofhealth posts; rehabilitation of community feeder roads; training and capacity building (e.g., alphabetization); and information and awareness sessions (nutrition, HIV, etc.).
Steps of implementation of micro-projects
33. It may take up to 24 months for a community to implement the various micro-projects it has identified as priority in its LDP. The implementation of micro-projects will include:
signing of a micro-project grant agreement between the Project, Government and the beneficiary communities; implementation ofmicro-projects; participatory monitoring and evaluation; and dissemination and exchange knowledge.
Signing of a micro-project grant agreement
34. Once the technical appraisal for a micro-project has been validated by the RA, the community will be notified of its approval and a micro-project grant agreement will be signed between the CG, GP, the Project (represented by the M), and the regional Government (represented by the Governor or hisher designee). Each CG will then open a bank account in a commercial bank in Bissau andor the region to which Project funds will be transferred to the community account in tranches in accordance with the specifications of the micro-project implementation requirements (as reflected in the micro-project grant agreement).
Procurement and financial management of micro-projects
35. Procurement of goods and services and selection of contractors (if needed, though it is expected that most micro-projects will be entirely implemented through community arrangements and will not require contractors) will be the responsibility of the GP. Members of the GP will receive procurement training from the Facilitators andor the RAYwith support from the Procurement Specialist of the PCU. The training will familiarize the GPs with simple procurement procedures and how to obtain the best price and the best quality for the material or services required. The GPs will be responsible for the implementation and supervision of all micro-project activities, and will be accountable to the CG and to the community.
50 36. Payments will be done by the CG, which is responsible for financial management of the grants provided by the Project to the community. Three members of the CG will be entrusted by the community with the management of the account and the signing of payments, on the basis of the documents presented by the GPs. They will be trained in simple financial management by the Facilitators and RAs with support from the Financial Management Specialist.
37. The GPs and the CGs will be required to report on implementation progress and to present and explain financial activities to the community at regular meetings. A summary of the transactions will be posted in a visible location within the community, and the books of accounts should be always available for review by any community member upon request.
Component 3: Project Coordination and Monitoring & Evaluation (US$l. 14 million)
38. The objective of this component is to ensure an efficient and coordinated implementation of the Project across regions. This component will ensure: (i)the sound fiduciary management and technical quality of Project activities and (ii)the overall M&E of, and learning from Project experience.
Project Coordination
39. The Project will be implemented by the Ministry of Economy, Planning and Regional Integration (MEPRI). A National Steering Committee (replacing the National Technical Team responsible for preparation) will be established at the beginning of the Project and will provide guidance and ensure coordination and commitment of the various ministries.
40. A Project Coordination Unit (PCU) will be set up within the General Directorate for Planning at MEPRI. The PCU will consist of contractual staff and will be responsible for all the operational and fiduciary management of the Project; and for the monitoring and evaluation of project activities. The PCU will ensure that the Project is coordinated among the participating regions and that information and best practices are exchanged; it will also control the quality of the interventions and revise the POM periodically.
41. The PCU will comprise the following staff:
Project Coordinator; Financial Management Specialist; Senior Accountant; Procurement Specialist; Part-time Rural Engineer; Monitoring and Evaluation Specialist; Capacity-building Specialist; and Administrative staff.
Monitoring and Evaluation of the Project
42. The component will finance the development and implementation of a M&E system, in particular the set up and operation of a management information system and the associated data
51 gathering plan and tools. The PCU will produce regular project progress reports, and quarterly financial management reports and annual environment and safeguard compliance reports. In addition the component will finance two beneficiary assessments during the life of the project, annual technical audits, and external evaluation of environmental and social safeguards. The elaboration of the M&E Manual was financed by the PPF, a final draft has been elaborated by the PCU and will be reviewed shortly by IDA. This M&E Manual describes in detail the roles and responsibilities of project staff and stakeholders as well as the tools, data type and periodicity for data collection and analysis. The M&E also identifies target audiences and provides guidance on how information flows and is to be used (see Annex 3 for fixther details on for the form and substance of the M&E system to be set up by the Project).
43. This component will essentially finance: (i)salary expenditures of contractual PCU staff and short-term consultants and (ii)non-salary expenditures to finance the Project’s operational and administrative costs to manage, monitor and evaluate the project realizations and outcomes. Most important equipment needed for the Project has already been financed via the PPF.
44. Lastly, the component will finance costs incurred by the multi-sector/stakeholder NSC in the execution of its Project oversight and guidance responsibilities.
52 Annex 5: Project Costs
Table 3: Project Costs by Component Local Foreign Total Project Cost By Component and/or Activity US$ million US$ million US$ million
Component 1: Capacity-building for Local Development 0.94 0.32 1.26 Component 2: Local Investment Fund 2.64 0.29 2.93 Component 3 : Project Coordination and Monitoring & Evaluation 0.48 0.59 1.07 Total Baseline Cost 4.06 1.20 5.26 Physical C~ntingencies~~ 0.07 Price Contingencies 0.11 Total Project Costs' 5.44 Identifiable taxes and duties are US$1.32 million and the total project cost, net of taxes, is US$4.10 million. Therefore, the share of project cost net of taxes is 76 percent.
Table 4: Project Financing Sources
Components by Financiers (US$ %of Comm- Yo of Total %of Comm- (incl. Million) IDA IDA unities Total unities conting.)
Amount YO Communities Driven Development 5.00 100% 0.44 100 Yo 5.44 100 Project Component 1: Capacity-building for 0.00 1.37 25% Local Development .37 27% 0% Component 2: Local Investment Fund 2.49 50% 0.44 100% 2.93 54% Component 3: Project Coordination 1.14 23% 0.00 0% 1.14 21% and Monitoring & Evaluation
Table 5: Project Components by Year
Totals Including contingencies
(US%Million) 2009 2010 2011 2012 2013 2014 Total Component 1: Capacity-building for 0.24 0.23 0.24 0.24 0.25 0.18 1.37 local development Regional administration 0.10 0.08 0.08 0.08 0.08 0.06 0.48
33 Physical and price contingencies (equal to altogether US$O.l8 million) are allocated to component 1 (US$O.l 1 million, adding up to US$l.37 million) and component 3 (US$0.07 million, adding up to USOl.14 million) respectively.
53 Sectorial administration 0.13 0.14 0.14 0.14 0.15 0.11 0.82 Other 0.01 0.01 0.02 0.01 0.02 0.00 0.07 Component 2: Local Investment Fund 0.00 0.64 0.85 0.78 0.67 0.00 2.93 Bafath region 0.00 0.14 0.18 0.18 0.18 0.00 0.67 Cacheu region 0.00 0.35 0.49 0.46 0.35 0.00 1.66 Biombo region 0.00 0.14 0.18 0.14 0.14 0.00 0.60
Component 3: Project Coordination 0.50 0.13 0.15 0.13 0.12 0.11 1.14 and Monitoring & Evaluation National coordination of project 0.50 0.10 0.10 0.10 0.08 0.03 0.91 Monitoring & evaluation 0.00 0.03 0.05 0.03 0.04 0.08 0.23
TOTAL PROJECT COST 0.74 0.99 1.24 1.14 1.04 0.29 5.44 INCLUDING CONTINGENCIES
Table 6: Allocation of Grant Proceeds Expenditure Category Allocation of Grant Financing Percentage Proceeds (in US$ equivalent) (1).. Goods, works, consultant services 2,010,000 100% (including audits), Training and Workshops, Operating Costs, and Micro-projects (2) Sub-grants for Micro-Projects under 2,490,000 100% Parts B of the Project (3) Project Preparation Facility (PPF) 500,000 100% TOTAL 5,000,000
54 Annex 6: Implementation Arrangements
At national level
1. Ministry of Economy, Planning and Regional Integration (MEPRI) and National Steering Committee (NSC). The general coordination of the Project will be the responsibility of the MEPRI. Guidance and strategic advice will be provided by a NSC. This Committee will endorse annual work plans and budgets, will review progress reports, audit recommendations and supervision reports and facilitate cross sectoral collaboration. The NSC will be chaired by the Director General of Planning at MEPRI, and will include inter alia representatives of the ministries of Finance; Territorial Administration; Health; Education; Agriculture; Water; Environment and Natural Resources as well as representatives of civil society. The Project Coordinator will serve as the Committee’s Executive Secretary.
2. Project Coordination Unit (PCU). A Project Coordination Unit will be hosted at MEPRI and will be responsible for: (i)the day-to-day coordination of the Project and (ii)the Monitoring and Evaluation of the Project activities (see component description of Component 3 in Annex 4). Among its responsibilities, the PCU will support the work of the NSC and the Local Development Thematic Group. It will be composed of contractual staff, including a Project Coordinator, a Financial Management Specialist, a Senior Accountant, a Procurement Specialist, Monitoring and an Evaluation Specialist, a Capacity Building Specialist, a part-time Rural Engineer, and administrative staff.
3. Regular functioning of the PCU which includes, inter alia, the payment of salary for regular contracted staff; recruiting of short-term consultants; trainings; workshops; field visits; and all other regular administrative and office expenses, will be assigned to the Project’s third component.
4. The following graph (Figure 2) summarizes the implementation arrangements for the Project:
55 Figure 2: Summary of Project’s Implementation Arrangements
Ministry of Economy, National Steering Planning and Regional Tnte ation ~------...... I Project I Coordinator I I
I I I I I + Financial Management/ I I Procurement/Capacity I I I building/M&E Specialists, I I Rural Engineer and Accountant I ------,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,I
(6 per region) (6 per region)
At regional or administrative sector level
5. Contracted Regional Advisors (R4s) located in the regional capitals will be the face of the Project vis-his regional authorities. The R4s will be professional staff, with previous experience in community development who have achieved tertiary education level. The regional government will make an office available to them, which will be equipped and have an operating budget provided by the Project.
6. Us,working closely with the Regional Directors for Planning, will play a key role in the implementation of the Project in their region. They will support and build the capacity of stakeholders and institutions within the region. They will in particular: (i)continuously train, support and supervise Facilitators; (ii)coordinate all project capacity-building activities in the region; (iii)ensure quality control at all the steps of the annual investment cycle, and in particular guarantee that micro-projects are fully appraised and properly designed; (iv) co-sign financing agreements with communities on behalf of the project coordinator, together with the Governor (or hisher designee), and monitor and ensure that the agreements are respected by all parties; (v) produce progress reports; (vi) support and contribute to the strengthening of the RPOs and RCs and the ASCs; and (vii) ensure the coordination and coherence of project activities with other projects and development initiatives in the region.
7. The Facilitators are the main face of the Project at the community level. They will be key in supporting communities during both the participatory planning process and the implementation of the micro-projects. They will receive extensive training in participatory
56 planning tools at the beginning ofthe Project from the RAs and local trainers (such as the NGOs and staff currently implementing the FIAL-CBMP). The Facilitators will not have a permanent office, but a working space will be provided in some of the administrative sector offices where they will be able to conduct business and meet with stakeholders and the ASC as necessary.
8. Initially, six facilitators per region will be recruited by the Project. Facilitators will specifically: (i)mobilize communities for the participatory planning phase; (ii)use the methodology and the participatory planning tools as described in the Project guides and conduct participatory planning with the beneficiary communities, and work as a team with the other facilitators in the region for this exercise; (iii)be the main interface between communities and the Project, and liaise with authorities at the administrative sector level and regional level, with support from the RA; (iv) support GPs in the design and implementation of micro-projects, and provide continuous support regarding procurement issues; (v) support the CGs execute their LDP oversight and financial management responsibilities; (vi) ensure execution of the monitoring activities, in particular participatory M&E by the communities themselves; (vii) support and regularly inform the ASCs; and (viii) identify, together with stakeholders and in particular with CGs and ASCs, areas where capacity building is needed and provide regular feedback to the Us on capacity building needs at local level.
9. Although R4s and Facilitators will have prior experience in the area of participatory local development, they will receive training on the specific approaches and methodologies being adopted by the Project. To expedite implementation, RAs and Facilitators will be recruited and trained before project effectiveness under the Project Preparation Facility. Training themes for the preparation and implementation of LDPs and micro-projects include inter alia: participatory planning, community-mobilization techniques, micro-project appraisal, micro- project management, financial management, community-based procurement and PM&E techniques, which are all essential skills to be mastered for a satisfactory and successful implementation of the Project activities. The trainings will cover all the tools to be used by Facilitators and communities included in the POM.
10. Conselhos Directivos Sectoriuis (Administrative Sector Councils - ASC). These assemblies exist at the level of the administrative sectors and although their functioning and composition varies, they usually are composed of the sector administrator, representatives of the traditional authorities, of civil society and of the ministries present at the local level (usually education, health and water and sanitation). Their composition will be reexamined at the start of the Project in the targeted administrative sectors in collaboration with the regional government to ensure that they are representative to the largest extent possible of the communities ofthe sector, have a balanced composition in terms of gender and competencies, and have a recognized legitimacy. The responsibilities of the ASCs will include: (i)selecting beneficiary communities within the administrative sector on a yearly basis, following predefined criteria; (ii)reviewing local development plans produced by communities and provide comments and suggestions, ensuring that the plans are coordinated with other development activities in the sector; (iii) ensuring the collaboration of all stakeholders in the sector and providing support to the implementation of the micro-projects; and (iv) reviewing progress of the Project through presentations done by the facilitators during regular meetings ofthe ASCs.
57 11. Deconcentrated services of ministries at local level. Various ministries have staff posted at regional and administrative sector level (called delegacias). These staff are expected to play an important role during project implementation. They will be involved in both participatory planning with the Facilitators, in reviewing and appraising micro-project designs, and in monitoring progress ofmicro-project implementation. They will receive training in participatory tools and the Project will also finance some operational costs for staff to be able to actively participate in project activities.
At community level
12. Comites de Gestio Comunitdrios (Community Management Committees - CGs). Communities will form CGs that will represent them and take responsibility for the implementation of their participatory plans. The composition of these CG will have to meet a number of pre-defined criteria and include women’s representatives, youth representatives, etc. (criteria to be defined in the POM). The members ofthe CG will be volunteers and will receive small trainings and orientation on their role and responsibilities. They will be responsible for the overall implementation of the LDPs and for all financial management and payments. Three ofits members will be signatories of the community account where funds granted by the Project will be deposited. They will be accountable to the community and will inform the community about progress ofthe plans and financial transactions in regular community meetings.
13. Grupos Promotores (Promotion Groups - GPs). Each micro-project will be implemented by a community GP. The GP will have the procurement responsibility under the micro-project under its responsibility but the payments and financial management will be done by the CG. The GP will be identified by the community and may be created for the purpose of the micro-project, or may be an existing formal or informal group, association or CBO with a particular interest or expertise: a professional association, a women’s group, a school association, etc. The GP will be entrusted by the community and be responsible for designing and implementing the micro-project, previously identified as a priority in the LDP ofthe community. They will be responsible in particular for all the required procurement for implementation of the micro-project, in particular purchase of materials or contracting oftechnical assistance, and will receive training in simple procurement rules and guidelines, work supervision, etc. They will be accountable to the CG and the community, and will in particular present documents justifying the payments to be made by the CG.
14. The following graphic (Figure 3) summarizes implementation arrangements at local level for the elaboration ofthe LDPs and the implementation ofthe micro-projects:
58 Figure 3: Summary of Implementation Arrangements at Local Level for the Elaboration of the LDPs and the Implementation of Micro-Projects
Regional Planning Office
.....$upport and capacity buidimg
supe+isron
+ Support and capacity building Administrative Sector Counc ...... I rn
Annual selection of benejicraiy commknities 4ccountobilify
Support and$ tation in the Community Management elaboration of LDPs and the ...... Committee imdementation iicro-~roiects ...... accountobt/it'......
accountability Identijkation of the grupospromotores
I
community
59 Annex 7: Financial Management and Disbursement Arrangements
A. Introduction
1. A financial management capacity assessment was carried out during project preparation in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective of this assessment was to determine whether the implementing entities have acceptable financial management arrangements to ensure that: (i)the 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 entity’s assets are safeguarded.
B. Summary of the project design and implementation arrangement
Summary of the project design 2. A detailed project description is available in the main text and Annex 4 of the PAD and detailed institutional and implementation arrangements are provided in Annex 6 and Appendix 1 of this Annex 7. This section summarizes the main features that are relevant to the financial management arrangements.
3. The Project Development Objective is to increase access to priority basic social and economic infrastructures and services in participating communities in at least two regions of Guinea-Bissau.
Component 1: Capacity-building for Local Development will finance capacity building activities to support, on the one hand, the local investment cycle and on the other hand, the promotion of dialogue and consultation among local stakeholders and institutions. The targeted beneficiaries of this component will be the local governments (regional and administrative sectors), civil society and community-based organizations.
Component 2: Local Investment Fund will finance basic social and economic infrastructure and services in the regions covered by the Project through micro-projects, which will be identified by the communities themselves through a participatory process, as part of their participatory LDPs.
Component 3: Project Coordination and Monitoring and Evaluation will finance incremental costs associated with the development and implementation of a monitoring and evaluation system, in particular the set up and operation of a management information system through its PCU which operates under the oversight of the Ministry of Economy, Planning and Regional Integration (MEPRI).
C. Country Accountability Issues 4. Due to the social and political conflict situation in the country, the Country Integrated Fiduciary Assessment (CIFA) carried out by the Bank in March 2006 has not yet been implemented. However, the main finding of the report in terms of budget execution is that the budget execution process suffers from a number of failings and is generally weak. One of the
60 main issues is the strong centralization of the expenditure control that in a situation of loose management and cash shortage could be seen as an effective alternative to assure at least some budgetary discipline. The main weakness is the fact that the government has been unable to adjust to a deteriorating macroeconomic environment in a transparent way and the almost complete absence ofeffective reporting on the budget execution.
D. Assessment of risks
Inherent risks
At the country level 5. The CIFA ofthe budget preparation, execution and ontrol was conducted i 2006. The report found budget executionin-general in Guinea-Bissau to be weak. One of the main weaknesses identified was the strong centralization of the expenditure control. However, in a situation ofloose management and cash shortage this could be considered an effective alternative to assure at least some budgetary discipline. Other key weaknesses identified were that the government had been unable to adjust to a deteriorating macroeconomic environment in a transparent way and the almost complete absence ofeffective reporting on the budget execution. This situation highlighted the dysfunctional aspects of the budget execution process, including: (i)final accounts of the fiscal years were not consolidated in a timely fashion resulting in disruptions in the flow ofinformation about the execution ofthe budget; (ii)the Treasury did not yet have a sufficiently developed State Accounting System; (iii)the staff kept records according to single entry bookkeeping methods, instead of double entry; and (iv) there was no balance sheet. Since 2005, and especially since 2007, the situation has improved. The activation of the treasury committee and other public expenditure management reforms has helped improve the prioritization of expenditures and reduced fiduciary issues.
6. On the budget control side, there is still no efficient mechanism of internal control to address budget execution problems. The General Audit Office does not operate well, especially for the ex-post control of the public accounts which have not been audited (or even prepared by the accountant general) since 1987. Based on the main findings of the PER, even though the situation has improved, the mission concluded that the risk at the country level is still high.
At the Entity level 7. The risk rating is substantial. To avoid slippage, the fiduciary aspects of Bank projects are strengthened through outsourced experts. Accounting staff are hired as consultants to work on projects, even when a Ministry implements those projects. World Bank assisted projects are invariably audited by independent and competent audit firms and in accordance with internationally recognized accounting standards.
At the Proiect level 8. Because ofthe high fiduciary risk at the country level, IDA has taken special measures to ensure adequate financial management of the projects. Project management units are often established to manage IDA-financed projects and Bank funding is following special mechanisms to mitigate fiduciary risks. The Project level risk rating is high, reduced to substantial with the proposed mitigating measures.
61 Control Risk
Accounting 9. Due to the lack of a comprehensive, integrated budgeting and accounting system, the risk rating is substantial.
Budget 10. The process of implementation and monitoring of the Budget is weak in the MEPRI. The risk rating is substantial.
Internal Control 11. Internal audit function does not exist and the internal control is weak. The risk rating is high.
External Audit 12. The system of external control of Supreme Audit Institution is weak in Guinea-Bissau and this institution cannot conduct an external audit in conformity with the Bank standards. The risk rating is substantial.
Flow of funds 13. To avoid mingling of funds, a Segregated Designated Account will be opened in a commercial bank acceptable to the World Bank to track the project expenditures. The MEPRI and the Treasury Department of the Ministry of Finance will manage this account. This risk rating is substantial.
Reporting 14. Due to the inconsistent reporting system in MEPRI, the PCU will prepare a quarterly un- audited Interim Financial Report (IFR) in form and substance satisfactory to the Bank and Annual Financial Statements with International Accounting Standards (IAS) and Bank requirements. This rate is substantial.
Staffing 15. MEPRI has not staff experienced in managing IDA funds. Therefore a Financial Management Specialist and Senior Accountant will be competitively recruited for the PCU. This rate is substantial.
16. In view of the general country financial management issues and the issues peculiar to the Project, the overall financial management risk rating for this Project is Substantial (see Summary risks in the Appendix 2).
E. Strengths and Weaknesses Strengths 17. A Financial Management Specialist and a Senior Accountant with experience and qualifications satisfactory to the Bank will be recruited on a competitive basis. They will receive training on World Bank procedures before the PCU start their activities. The FL4s and Facilitators will also receive a minimum training in financial management.
62 Weaknesses 18. Similar to other post-conflict countries, the general overall fiduciary environment in Guinea-Bissau is very weak. With the exception of the CBMP Project Implementation Unit and the existing accounting staff, it is difficult to find people with strong experience in World Bank financial and disbursement procedures. In addition, some issues in the financial aspects were raised during the preparation of the Project, including weaknesses in the financial management capacity ofthe local associations and CBOs and lack ofbanking institution in the regions.
F. Financial and management arrangements
Staffing Arrangements
19. The competitively recruited Financial Management Specialist and Senior Accountant will work under the supervision of the Coordinator of the PCU and will work closely with the Regional Advisors and the Facilitators based in each ofthe participating regions.
20. As far as financial management is concerned, the Financial Management Specialist’s responsibilities will include: to collect and control invoices, maintain the books, enter data in the accounting software, manage the Project’s bank accounts, keep the books of accounts and prepare the IFR as well as the withdrawal and direct payments applications. Additionally, the Financial Management Specialist will oversee and provide periodic training to the RAs and Facilitators to enable them to support the communities’ in the management oftheir funds, as well as conduct regular random audits of micro-projects. The Senior Accountant will work closely with the Financial Management Specialist and will be responsible in particular for undertaking the financial monitoring of micro-projects. The Terms of Reference (TORs) for these positions were elaborated during the pre-appraisal mission. The recruitment of the Financial Management Specialist and Senior Accountant will be completed under the PPF.
21. The RAs will be recruited on a competitive basis and be based in the regional capitals. Their TORs will include validating the monthly or every other month progress and financial reports prepared by the CGs and the replenishment requests (with all receipts attached) made by communities when they have exhausted the funds under one tranche. The RAs will submit these reports to the Project Coordinator and Financial Management Specialist.
22. The Facilitators, with experience and qualifications satisfactory to the Bank in accounting, will be recruited on a competitive basis. They will be located in the regions and their responsibilities will include supporting the CGs and GPs in all matters related to micro-project preparation and implementation including the management of the micro-project funds. In this capacity, the Facilitator will ensure that the CG maintains proper financial records and prepares monthly financial and progress reports for presentation to the community and submission to the RAS.
Accounting Policies Procedures 23. The PCU will put in place a comprehensive, integrated budgeting and accounting system. There will be an internal control system to ensure proper authorization of expenditures in
63 accordance with budget, and proper authorization ofpayments. As part of project preparation, an administrative and accounting manual will be developed. It will include all the required details on accounting and financial procedures. It will set out in particular: (i)the institutional arrangements and the relationship between all the stakeholders of the Project (Steering committee, PCU Staff, beneficiaries, etc.); (ii)the planning and budgeting arrangements; (iii)the treasury procedures; (iv) the procurement procedures; and (v) the reporting formats and arrangements. Simple guidelines for community-based financial management and procurement will be prepared and form part of the POM. Accounting transaction processing and reporting will be based on use of accounting software. Preparation of the financial statements is governed by the International Public Accounting Standards (IPSAS) and the West African Accounting System (SYSCOA).
Accounting Software 24. The PCU will establish a sound computerized information system. This system will provide the following data: un-Audited Interim Financial Report (IFR), financial statements, withdrawal applications, Bank reconciliations and all financial reports needed. The books of accounts will also be maintained electronically in this software.
Internal Audit and Internal Control 25. The internal audit function within the Government does not exist. Hence, key internal control mechanisms (approval and authorization controls, bank reconciliation statements) will be included in the administrative and accounting procedure manual in order to minimize the controls risks. During supervision mission, the World Bank’s Financial Management Specialist will review and provide technical support as needed for the strengthening of the internal control environment and he/she will pay attention to the effectiveness ofthe internal control system.
26. The mechanism of internal control system of the GoGB does not operate effectively to ensure proper authorization of expenditures in accordance with budget, and proper authorization ofpayments. The Bank will organize capacity-building workshops regarding these aspects.
27. The system of audit in Guinea-Bissau is not consistent and does not give guarantee that the funds are used in accordance with the objectives of the Project. Therefore, the Bank will pay particular attention to the internal control system during the supervision missions.
External Audit 28. A competitively recruited external auditor with experience and qualifications satisfactory to the Bank will conduct an annual audit of the project’s financial statements. This audit should be carried out in accordance with International Standards on Auditing (ISA), and will include such tests and controls, as the auditor considers necessary under the circumstances. Besides expressing an opinion on the Project’s financial statements in accordance with ISA, the auditors will be expected to prepare a report on internal controls, management letters giving observations and comments, and providing recommendations for improvement in accounting records, systems, controls and compliance with financial covenants in the Financing Agreement of the Bank. The audit report and opinions in respect to the financial statements including the management letter and management response shall be submitted to IDA within six months ofthe end of the GoGB fiscal year. The GoGB will prepare TORS acceptable to the Bank for the appointment ofthe auditor.
64 29. Table 7 below summarized the auditing requirements under this Project:
Table 7: Summary of Project’s Auditing Requirements Audit report Entity Due date 1) Project’s financial statements PCU June 30
30. All the audit reports will be submitted to the Bank within six months after December 31 each year.
Reporting and Monitoring
National Level 31. The PCU will prepare and furnish to the World Bank a quarterly un-audited Interim Financial Report (IFR), in form and substance satisfactory to the World Bank. It will:
(i) set forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Credit, and explaining variances between the actual and planned uses of such funds; and
(ii) describe use of funds by activity/components, both cumulatively and for the period covered by said report, and explain variances between the actual and planned Project implementation.
32. The first IFR shall be furnished to the Association not later than 45 days after the end of the first calendar quarter after the Effective Date. It shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter; thereafter, each IFR shall be furnished to the Association not later than 45 days after each subsequent calendar quarter, and shall cover such calendar quarter. Formats for the un-audited financial report and financial statements will be defined during the appraisal mission and/or before negotiations and will be attached to the disbursement letter.
Local Level 33. The CG will produce and submit to the Facilitator monthly and/or every other month implementation reports and periodic replenishment requests for their micro-proj ects. The reports will describe use of funds and the physical progress of the micro-project. Each CG will maintain an acceptable financial management system and ensure that all transactions are recorded in a simple format and supporting documents are retained. The format ofthis report will be defined in the POM. The periodic replenishment requests will be prepared by the CG when the funds of the current tranche are exhausted and will include all receipts and invoices.
34. As the CG will be expected to manage micro-project funds directly, they will need to have minimum financial management capacity. Financial management capacity will not be a precondition for micro-project approval; nevertheless, the micro-project review process will include assessment of the CG’s financial management capacity. CGs with no or weak financial management capacity will be required to undergo financial management training prior to receiving the initial disbursement of micro-project funds. The Facilitator, in coordination with
65 the RA, will design and agree on a training plan with the CG. Funds will be transferred in tranches to the CG following the indicative table below.34
Table 8: Funds Transferred in Tranches and Activities/Milestones to be completed before release of tranche Tranche Number ActivityMilestone to be completed before release of tranche and Percentage
Tranche 1: 25% of 0 Approval of LDP the total grant 0 Signing of Sub Grant Agreement
Tranche 2: 50% of 0 Receipt of Replenishment request for the second tranche from the the total grant CG stating the intended use of the tranche consistent with the LDP. 0 Receipt of all monthly Financial and Physical Progress Reports from the CG by the Financial Management Specialist. 0 Financial and Physical Reports show satisfactory progress in implementation of activities in the LDP. 0 CG is providing complete information regarding physical and financial progress to the entire community on a monthly basis using Monitoring Logs and monthly public community meetings. Tranche 3: 25% of 0 Receipt of Replenishment request for the third tranche from the CG the total grant stating the intended use ofthe tranche consistent with the LDP. 0 Receipt of all monthly Financial and Physical Progress Reports from the CG by the Financial Management Specialist. Financial and Physical Reports show satisfactory progress in implementation of activities in the LDP. 0 CG is providing complete information regarding physical and financial progress to the entire community on a monthly basis using Monitoring Logs and monthly public community meetings.
35. The PCU will iroduce Annual Financial Statements for these statements in compliance with IAS and World Bank requirements.
36. The Financial Statements35will comprise:
0 a Statement of Sources and Uses of Funds; 0 a Statement of Commitments; the Accounting Policies Adopted and Explanatory Notes; and 0 a Management Assertion that project funds have been expended for the intended purposes as specified in the relevant Grant agreement.
34 Tranche size and percentage may be adjusted in accordance with specific needs of individual micro-projects. 35 It should be noted that the program financial statements should be all inclusive and cover all sources and uses of funds and not only those provided through World Bank funding. They thus reflect all program activities, financing, and expenditures, including funds from other development partners.
66 37. The PCU will also be required to produce, no later than June 30 of the following fiscal year, audited annual financial statements. These financial statements will be subject to periodic audits (see paragraph on audits).
G. Disbursement and flow of funds arrangements
Disbursement arrangements
38. Disbursements will be made in accordance with procedures outlined in the Disbursement Handbook for World Bank Clients. The proceeds ofthe grant will be disbursed over a five-year period or less depending on the implementation speed. On project closure, a period of four (4) months (grace period) after the closing date, as agreed with the Bank, will be allowed to complete processing of disbursement for eligible expenditures incurred up to and until the closing date ofthe grant.
Allocation of Grant proceeds
39. The table below sets out the expenditure categories to be financed out of the Credit proceeds. The allocations for each expenditure category are the following:
Categories Credit % of expenditures Allocated to be financed (in US$ equivalent) (1) Goods, works, consultant services 2,010,000 100% (including audits), Training and Workshops, Operating Costs, and Micro-projects (2) Sub-grants for Micro-Projects under Parts B of 2,490,000 100% the Project (3) Project Preparation Facility Advance 500,000 100% TOTAL 5,000,000
Disbursement Methods
40. Disbursements for this project will be transaction based under the direct, advance, special commitment and reimbursement payment methods. All replenishment applications will be submitted monthly. All replenishment or reimbursement applications will be fully documented except for contracts below Statement of Expenditures ceilings which will be indicated in the disbursement letter. SOE documentation will be retained at the PCU for review by Bank staff and auditors.
Designated Account (DA)
67 41. A segregated DA in FCFA will be opened in a commercial bank acceptable to the Bank. This Account will be managed jointly by the PCU and the Treasury Department (Ministry of Finance). The DA will be used for all payments financed by the grant as indicated in the specific terms and condition of the Grant Agreement. Supporting documentation for SOE will be retained and kept in a safe place by the PCU, which has the primary responsibility for maintaining all documentation (see Appendix 4). The Disbursement letter, which will form an integral part ofthe Grant Agreement, will provide details of the disbursement methods, required documentation, DA ceiling and minimum application size. These will also be discussed and agreed during negotiation ofthe Grant Agreement.
42. At the beneficiary level, bank accounts in FCFA will be opened in a commercial bank by the recipients of micro-projects and will be managed by three designated members ofthe CG on behalf ofthe community. These accounts may be located in the region or in Bissau should there be no banking facilities available in the region. These accounts will be used for all payments regarding the micro-projects.
Financial Management at the Community Level
43. Beneficiary communities will follow procurement and disbursement rule procedures agreed upon between the Bank and the GoGB and laid out in the POM and in the project administrative and accounting manual. The CG will take responsibility for all financial management and payments. The CG members will be trained in simple accounting and financial management procedures. A training module for community-based financing will be developed (and will be part of the manuals mentioned above) by the financial team ofthe PCU.
44. Due to the current absence of any formal financialhanking system in the regional capitals, the CG will be required to carry out most transactions in cash.
45. All financial transaction will be kept at the community level. During the implementation of a micro-project, the beneficiary CG will call monthly and/or every other month, community meetings to present its financial and physical progress report. The financial report will provide details of funds received from the funding agency, expenditures incurred by category, the balance of funds, and supporting documentation. These reports must be available for inspection by any member of the community during the meeting. Finally, these reports will be audited on a sample basis both by the Financial Management Specialist recruited by the PCU as well as during the yearly external audit ofthe Project.
Governance & Anti-Corruption Arrangement (GAC)
46. Good governance, effective and efficient management ofpublic finances at decentralized levels is an integral part of development and is viewed as central to poverty alleviation. Arrangements should be made to insure that local authorities are involved in the design of the activities or investment to be made in their regions. Some encouraging practices noted in the others countries at the community level, should be extended, namely the use of local radio stations to report fraud and corruption, the ‘report card’ system. Periodic reports on budget execution should be prepared and effectively disseminated to prevent fraud. Management tools, manuals and illustrated guides that can be easily understood by beneficiaries should be
68 developed to provide details (where to file complaints, the processing period for complaints, guaranteeing the confidentiality of the complaint, the criteria for the admissibility of complaints, for example complaints accompanied by supporting documentation without citing names, and/or complaints based on objectively observed acts, and means ofrecourse).
H. Loan condition and other financial covenants
47. Effectiveness conditions
0 The Recipient shall elaborate and adopt a Project Implementation Manual, in form and substance satisfactory to the Association.
48. Dated covenants
e Four months after Effectiveness the Recipient has appointed the independent auditors in terms acceptable to the Bank.
I. Supervision Plan
49. Supervision of the financial management arrangements will be risk-based. In this regard, in view of the overall financial management residual risk rated for this project, the financial system will be reviewed and assessed at the national and regional level and the supervision strategy will be two-site supervision and will be complemented by desk review of the quarterly IFRs submitted to IDA at the end of each calendar quarter. In addition, the Financial Management Specialist will annually also review the audited project annual financial statements and the auditor’s report and management letter thereon.
69 Appendix 1: PCU Staffing
70 Appendix 2: Summary of Risk Analysis and Mitigation Measures
-Risk Risk Risk MitiPation Measure Conditionalitv Residual Rating -Risk
I.Inherent Risks: H S 1. Country Level Poor governancelcorruption. H The staff ofthe PCU and the external None H auditor will be recruited on a competitive basis, a system of information will be installed in the PCU and an Administrative and Financial Manual ofProcedures will be prepared. 2. Entity Level Low capacity ofMEPRI to S The project will be implemented by the None M implement and monitor the MEPRI through a PCU and the Bank project. will pay a special attention during the supervision missions to the adequacy ofthe financial management system for Project implementation. 3. Project Level CDD activities are risky from the H A PCU will be installed in order to None S fiduciary perspective given the implement the activities of the CDD nature of activities involved. Project and will contribute to the proposed risk mitigating measures. 11. Control Risks: S S
A comprehensive, integrated S The PCU will install appropriate None M budgeting and accounting system accounting software and will elaborate is not yet in place. an Administrative and Financial Manual of Procedures. The activities to be financed by the Project are clearly identified
The process of budget S Annual budgets and work plans will be None M (implementation and monitoring) prepared by the PCU and submitted to is weak in MEPRI. the Bank by November 30 of each year. The Bank will pay a particular attention during the supervision in the implementation and monitoring process ofthe budget.
The Bank will pay a particular attention None S doesn’t operate effectively to to the internal control system during ensure proper authorization of supervision missions and check if the expenditures in accordance with duties are segregated between the staff, budget, and proper authorization Key internal control mechanisms (approval and authorization controls,
71 I bank reconciliation statements, etc.) I will be included in the manual of procedures. 4. External Audit The system of external control of S External auditor with qualifications and Four months after M Supreme Audit Institution is experience satisfactory to the World Effectiveness the weak in Guinea-Bissau and this Bank will conduct an annual audit of Recipient has institution cannot conduct an the project’s financial statements. This appointed the external audit in conformity with audit should be carried out in independent the Bank standards. accordance with International auditors in terms Standards on Auditing (ISA), and will acceptable to the include such tests and controls as the Bank. auditor considers necessary under the circumstances.
The external audit firm will be selected under a competitive basis and acceptable TORS.
Due to the Treasury difficulties in S At the national level, a segregated None. M the Ministry of Finance, the designated account will be opened in a possibility of mingling funds commercial bank acceptable to the exists and the bank facilities at Bank, to track the project expenditures. the communities’ levels are weak. This DA will be managed by the MEPRI and Treasury Department of the Ministry ofFinance.
At pth: de;tralized level, arrangements will be set up to ensure a 1 rapid transfer of fund to have the micro- ro’ects im lemented faster.
The reporting system ofMEPRI S The PCU will prepare quarterly IFRs The IFR format M is not consistent. and Financial Statements ofthe project will be agreed in format and substance acceptable to during the Bank. negotiations. 7. Staffing MEPRI has not staff experienced S The financial staff of PCU (Financial The Financial S in managing IDA funds. Management Specialist and Senior Management Accountant) will be recruited under a Specialist assigned competitive basis. to the Project Coordination Unit has been recruited. Overall Risk S S
72 Appendix 3: Action Plan of the Rural Community-Driven Project
Action Tasks htity Responsible Target Completion Date
[uman Resources J Recruitment of a Financial Management Specialist satisfactory to IDA
J Preparation ofthe TOR J PCU J Done J Launch the invitation J PCU J Done J Select the consultant J Committee J Done J Sign the Contract J Coordinator J Aug. 30,2009 lanual of Procedures Elaboration of the administrative and accounting manual of procedures
J Preparation ofthe TOR J PCU J Done J Manifestation of interest J PCU J Done J Confection of Short List J PCU J Done J Launch the invitation J PCU J Done J Select the consultant satisfactory to IDA J Committee J Aug. 30,2009 J Sign the Contract J Coordinator J Sept, 15,2009 Draft Manual J Consultant J Oct. 15,2009 J Comments J BankPCU J Oct. 30,2009 J Final Manual including IDA’S J Consultant J Nov. 15,2009 comments ‘xternal Audit J Recruitment of an auditor satisfactory to 1IDA J Preparation ofthe TOR J PCU J Done J Manifestation of interest J PCU J Sept.l5,2009 J Confection of Short List J PCU J Sept. 30,2009 J Launch the invitation J PCU J Oct. 15,2009 J Select the auditor J Committee J Nov. 30,2009 J Sign the Contract J Coordinator J Dec. 15,2009 ccountin s stem J Installation of the accounting system F satisfactory to IDA J Preparation of the TOR J PCU J Done J Manifestation of interest J PCU J Done J Confection of Short List J PCU J Done J Launch the invitation J PCU J Done J Select the consultant J Committee J Done J Sign the Contract J Coordinator J Done J Installation of software J Consultant J Done J Traininn for staff J Consultant J Done
73
Annex 8: Procurement Arrangements
A. General
1. Procurement for the Project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 and revised on October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised on October 2006, and the provisions stipulated in the Grant Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the World Bank and reflected in the procurement plan. The procurement plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
Country procurement system - General procurement environment in the country and reforms
2. There is currently a national procurement code in the Republic of Guinea-Bissau which has only been tested in five line Ministries; it was agreed to extend its application to additional key line ministries and train the main users for a short period before its generalization. This action has not been completed due to lack of means and the occurrence of political and civil strife during the same period. No Country Procurement Assessment Report has been conducted recently in the country; a Public Expenditure Review is expected to be conducted in FY09-10.
3. The current procurement code needs to be updated in line with the West African Economic and Monetary Union's (WAEMU). Procurement directives, and implementing regulations and documentation are to be prepared and disseminated. Internal and external controls of procurement transactions shall be appropriately ensured by making fully operational the new established Public Procurement Department (Direc@o Geral dos Concursos Pziblicos- DGCP) and by creating the Public procurement regulatory authority to deal with procurement policy and complaints in a transparent manner.
4. The Bank is currently contributing, through a State and Peace-Building Fund (SPF), to the establishment of an acceptable procurement legal, regulatory and institutional framework in line with the WAEMU's procurement directives and develop procurement capacity ofkey actors from public and private sectors. However, the current resources allocated to procurement reform through this SPF are not enough and there is a need to increase donors' awareness ofthe urgency to contribute to improve transparency and efficiency ofthe national system in order to get better impact on overall procurement and financial management reforms and on the implementation of all Donors' financed projects in Guinea-Bissau.
75 Advertising
5. A General Procurement Notice (GPN) will be prepared and published in the United Nations Development Business (UNDB), in the Development Gateway (dgMarket), and in at least one national newspaper after the project is approved by the Board, and before effectiveness. The GPN would show, if any, a summary of all International Competitive Bidding (ICB) for works and goods contracts and a summary all consulting services involving international firms. Specific Procurement Notices for all goods and works to be procured under ICB, and Expressions of Interest for all consulting services to cost the equivalent of US$200,000 and above would also be published in the UNDB, dgMarket as well as in the national press. The Recipient may also advertize such information in an international newspaper or a technical magazine.
Procurement methods to be used for the project implementation
6. Procurement of works. No international procurement for works or goods is foreseen under this Project. Civil works primarily consist of small-scale rehabilitation of agricultural lands, feeder roads and small-scale social and economic infrastructures to be implemented as part of community micro-projects, as well minor repairs and upgrades to project offices (part of which repairs may be financed under the Participatory Rural Development SPF Grant). Hence, the highest procurement method for goods will be National Competitive Bidding (NCB).
7. In exceptional cases in which large contracts may happen to be procured, ICB may be used and the procurement will be done using the Bank’s Standard Bidding Documents (SBD) for all ICB and National SBD agreed with (or satisfactory to) the Bank for all NCB. In the eventual case of ICB, the provisions of paragraphs 2.55 and 2.56 of the Procurement Guidelines, providing for domestic preference in the evaluation of bids, shall apply to works to be carried out by domestic contractors.
8. In case of NCB, the following special requirements will be taken into account: (i)bids should be advertised in national newspapers with wide circulation; (ii)any bidder is given sufficient time to submit bids (4 weeks); (iii)bid evaluation and bidder qualifications criteria are clearly specified in the bidding documents; (iv) no preference margin is granted to domestic contractors; (v) eligible firms are not precluded from the competition; (vi) prior to issuing the first call for bids, a draft standard bidding document is submitted to and deemed acceptable to IDA; and, (vii) the procedures also include the publication of the results of evaluation and of the award ofthe contract, and provisions for bidders to protest.
9. Small works for which there is not likely any possibility for grouping of contracts, and estimated at less than US$50,000 equivalent per contract may be procured through shopping on the basis of quotations obtained from not less than three (3) qualified domestic contractors (preferably more in order to obtain at least three comparable quotations) invited in writing to bid, in accordance with paragraphs 3.1 and 3.5 of the procurement Guidelines.
10. Micro-projects under Component 2 (see the related paragraph below) may include small works which will be procured in accordance with paragraph 3.17 of the procurement guidelines, dealing with Community Participation in Procurement.
76 11. Procurement of goods. No international procurement for goods is foreseen under this Project. The largest contracts for goods for the Project will be three 4x4 (double cabin) and 12 motorcycle estimated to cost US$140,000. Additionally, there will be a need to procure US$15,000 worth of computers and furniture. Hence, the highest procurement method for goods will be NCB. The financing of these contracts may be shared with the PRD SPF grant.
12. In exceptional cases in which large contracts may happen to be procured, ICB may be used and the procurement will be done using the Bank’s SBD for all ICB and National SBD agreed with (or satisfactory to) the Bank for all NCB. In the case of ICB, the provisions of paragraphs 2.55 and 2.56 of the Procurement Guidelines, providing for domestic preference in the evaluation of bids, shall apply to goods manufactured in the territory of the Recipient.
13. In case of NCB, the following special requirements as will be taken into account: (i)bids should be advertised in national newspapers with wide circulation; (ii)any bidder is given sufficient time to submit bids (4 weeks); (iii)bid evaluation and bidder qualifications criteria are clearly specified in the bidding documents; (iv) no preference margin is granted to domestic manufacturers; (v) eligible firms are not precluded from the competition; (vi) prior to issuing the first call for bids, a draft standard bidding document is submitted to and deemed acceptable to IDA; and (vii) the procedures also include the publication of the results of evaluation and of the award of the contract, and provisions for bidders to protest.
14. Goods for which there is not likely any possibility for grouping of contracts, and estimated at less than US$50,000 equivalent per contract may be procured through shopping on the basis of quotations obtained from .not less than three (3) qualified domestic suppliers (preferably more in order to obtain at least three comparable quotations) invited in writing to bid, in accordance with paragraphs 3.1 and 3.5 of the procurement Guidelines.
15. Micro-projects under Component 2 (see the related paragraph below) may include acquisitions for small value which will be procured in accordance with paragraph 3.17 of the procurement guidelines, dealing with Community Participation in Procurement.
16. Procurement under micro-projects by communities and their representatives. Micro-projects under Component 2 for beneficiary-communities may only require small works or acquisitions of goods for small value, involving community participation in their implementation, and for which any possibility for grouping of contracts is unlikely. Given the size of these contracts, they would be procured through shopping, or direct acquisitions from the shelf by the said communities. Therefore, they will be procured in accordance with paragraphs 3.17 of the procurement guidelines, dealing with Community Participation in Procurement. The specific procurement arrangements of procurement for these micro-projects will be detailed in the POM.
17. Procurement of non-consulting services. Non-consulting services will include services related to workshops, training and capacity building for project staff and other regional and local stakeholders, including local communities and their representatives. Additionally, it will include some operating costs (transport, insurance, maintenance, etc.). Regarding the size of these contracts which are not expected to be more than US$50,000, the procurement process will be done under shopping on the basis of quotations obtained from not less than three (3) qualified
77 firms (preferably more in order to obtain at least three comparable quotations) invited in writing to bid, in accordance with paragraph 3.5 of the procurement Guidelines. For contracts more of US$100,000 or more, NCB procedure as described above would apply.
18. Selection of Consultants. Consulting Services for this Project will include the selection of key project staff and specialized assignments (information and communication, technical audits, financial audits, monitoring and evaluation, operational manuals, environmental and social safeguards, etc.) for international and national expertise for firms and for individuals. Consultants will be selected through Quality and Cost Based Selection method, and when appropriate, through other specific methods such as fixed budget selection, least cost selection, consultants’ qualifications, or single source, under the relevant provisions of the Consultants Guidelines. Individual consultants will be selected in accordance with the relevant provisions of the Consultants Guidelines. The procurement method for each contract will be set out in the procurement plan.
19. Short lists of consultants for services estimated to cost less than $100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
Language of procurement documents to be used
20. The language ofthe documents and contracts will be as follows:
ICB - Bidding documents in French, with Portuguese translation; bids can be submitted in French or Portuguese; contracts for ICB to be signed in the same language as that of the bid, Le., either French (with translation into Portuguese if desired) or in Portuguese (with translation into French for IDA), according to paragraph 2.15 of the Guidelines; NCB - The documents may be prepared only in Portuguese, according to paragraph 3.4 of the Guidelines; Shopping - The documents may be prepared only in Portuguese. However, the Recipient is encouraged to proceed as follows: request for quotations can be prepared: (i)in the case of shopping involving foreign suppliers, in French with Portuguese translation, similarly to the case of ICB contracts; and (ii)in case of shopping involving only national suppliers/contractors, they may be prepared only in Portuguese similarly to NCB contracts. Contracts or purchase orders for shopping with a foreign supplier may be signed in the same language as that of the quotation (in French with translation into Portuguese if desired) or in Portuguese (with translation into French for IDA); Direct contracting - The documents may be prepared only in Portuguese. However, the Recipient is encouraged to proceed as follows: (i)in the case of a direct contract with a foreign supplier, in French with Portuguese translation, similarly to ICB contracts; and (ii)in case of direct contract with a national supplier/contractor, they may be prepared only in Portuguese similarly to NCB contracts. Contracts or purchase orders for direct contract with a foreign supplier may be signed in the same language as that of the offer (in French with translation into Portuguese if desired) or in Portuguese (with translation into French for IDA); Consultants - Requests for proposals in French, with Portuguese translation; consultants can submit their proposals in French or Portuguese; contracts to be signed in the same
78 language as that of the proposal, that is either French (with translation into Portuguese if desired) or Portuguese (with translation into French for IDA), according to paragraphs 1.20 and 1.21 of the Consultants Guidelines.
21. The procurement procedures and standard bidding documents to be used for each procurement method, including those for community-based procurement, as well as model contracts for works and goods procured, will be presented in the POM.
22. Operating Costs. Operating costs financed by the Project are incremental expenses, including office supplies, vehicle operation and maintenance, maintenance of equipment, communication costs, rental expenses, utilities expenses, consumable, transport and accommodation, per diem, supervision costs and salaries of locally contracted staff. They will be procured using the Project implementing unit's administrative procedures, which will be detailed in the Project Administrative and Financial Manual, reviewed and found acceptable to the Bank.
B. Assessment of the agency's capacity to implement procurement
23. The general coordination of the Project will be the responsibility of the MEPRI who will set up a National Steering Committee (NSC) chaired by the Director General of Planning; the said NSC will include representatives of various ministries, including inter alia: Finance, Territorial Administration, Health, Education, and Agriculture as well as representatives of the civil society (see main text of PAD for full description of the NCS).
24. A Project Coordination Unit (PCU) will be responsible for the day-to-day coordination of the project, including all fiduciary requirements. The PCU will be composed of contractual staff, including a Project Coordinator, a Financial Management Specialist, a Senior Account, a Procurement Specialist, a Capacity-Building Specialist, a M&E Specialist, a part-time Rural Engineer and administrative staff. The selection of the Procurement Specialist is underway: it is expected that the successful candidate will be in place well in advance prior to the grant effectiveness.
25. Micro-projects will be implemented by the Grupo Promotores (GPs) together with Cornite' de GestCro Comunitdrios (CGs). The GPs will be entrusted by the community and be responsible for designing and implementing micro-projects that will have been previously included in the LDP. They will be responsible in particular for all procurement to be done to implement the micro-project. They will work in partnership with the CG, which will be responsible for managing the micro-project funds. Both the GP and CG will be accountable to their communities.
Procurement Risk Assessment and Related Mitigation Measures
26. Issuedrisks concerning the procurement component for implementation of the Project have been identified and include:
possible absence of commitment of the PCU technical staff in procurement activities related to the implementation of the project components under their responsibility, as it has been seen in other PCUs;
79 absence of capacity or little experience at community level in procurement activities, for both: (i)GPs and CGs, and (ii)Facilitators and RAs who will train GPs and CGs as part of their capacity building responsibilities towards the communities for an adequate implementation ofmicro-projects; lack of control from DGCP (Direcqfio Geral dos Concursos Pziblicos) due to insufficient means either for procurement control and or to visit the project central and regional procurement activities; and political interferences at the central and regional levels.
Measures to mitigate the said risks:
0 the PCU will recruit an experienced Procurement Specialist; 0 the Procurement Specialist will:
(i) work in close collaboration with other technical staff from the PCU to draft the procurement documents; (ii) train Facilitators and RAs in procurement activities, in particular in their role of training and assisting GP and CG in procurement at community level for the implementation ofmicro-projects, ensuring that procurement methods are kept simple; and (iii) assist Facilitators and RAs in monitoring the procurement activities conducted at community level for the implementation of micro-projects; Community procurement methods will be kept simple and GPs will receive training from the Facilitators, RAs and Procurement Specialist.
0 in order to permit DGCP to assist and advise the PCU, DGCP will establish a program for control of the procurement activities and inform the PCU about the implementation requirement of this program; the PCU will finance the mission excluding payment of salaries. In order to provide improved services for assistance and control, staff from DGCP will be trained in CDD procurement supervision under the project financing; 0 Facilitators together with RAs will prepare monthly progress reports highlighting capacity building needs; 0 procurement supervision at community level will be conducted by the Procurement Specialist of the PCU and by the DGCP staff on a regular basis; in addition, the World Bank procurement specialist will conduct random spot checks of community procurement; and 0 technical audits will be conducted on an annual basis for the implementation of the micro-proj ects related components.
27. The overall project risk for procurement is high.
C. Procurement Plan
28. The Recipient is developing a procurement plan for project implementation in order to provide the basis for the procurement methods. It has been agreed that the Recipient will finalize this procurement plan prior to negotiations. Once it is agreed between the Recipient and the
80 Project Team, it will be available at the Coordination Unit located in Bissau. It will also be available in the project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
D. Frequency of Procurement Supervision
29. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended at least two supervision missions to visit the field each year to carry out post reviews of procurement actions. If required, additional supervision or ad hoc training missions may be undertaken to assist in the project implementation.
30. To provide meaningful quality recommendations to the PCU on procurement related to micro-projects at community level under Component 2, and given the large number of micro- projects, it is recommended to conduct (as mentioned among the risks mitigation measures) technical audits by independent consultants on an annual basis.
E. Details of the Procurement Arrangements
I.General
1. Project information: Guinea-Bissau, Community Driven Development Project 2. Bank’s approval Date of the Procurement Plan: Original: August 18,2009; Revision 1: N/A 3. Date of General Procurement Notice: Immediately after the Board’s approval 4. Period covered by this procurement plan: 2009 to 2014 (there is no major operational procurement activity at the central level at PCU headquarters. Most procurement activities will take place at the community level.
11. Goods and Works and non-consultinp services.
1. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement:
81 Table 10: Prior Review Tk eshold (Goods and Works ai I Non-Consulting Services) Procurement Method Prior Review Threshold Comments 1. [CB (Goods) = or >US$200,000 ICB for goods will be used for US$200,000 and above 2. NCB (Goods) The first two contract, NCB for goods will be used for irrespective oftheir cost less than US$200,000 estimate, and any other contract identified by the Bank in the procurement - plan 3. ICB (Works) = or >US$500,000 ICB for works will be used for - US$500,000 and above 4. NCB (Works) The first two contracts, NCB for works will be used for irrespective oftheir cost less than US$500,000 estimate, and any other contract identified by the Bank in the procurement - plan 5. ICB (Non-Consultant = or >US$200,000 ICB for non-consultant services Services), if any will be used for US$200,000 and above 6. NCB won-Consultant The first two contracts, NCB for non-consultants Services) irrespective ofthe cost services will be used for less estimate, and any other than US$200,000 contract identified by the Bank in the procurement - plan 7. Shopping = or >US$50,000; the Shopping for works, goods and first two contract under non-consultants services, will US$50,000, and any other be used for less than or contract identified by the equivalent to US$50,000. If Bank in the procurement more than US$50,000, prior plan clearance is needed from IDA with relevant justifications. The cost estimate will not exceed us$loo,ooo. 8. Direct contracting All, irrespective of the None cost estimate 9 Community The first two contracts, None participation in irrespective ofthe cost procurement estimate, and any other contract identified by the Bank in the procurement - plan
2. Prequalification:Not applicable.
3. Proposed Procedures for CDD Components (as per paragraph. 3.17 of the Guidelines): See the POM to be elaborated.
82 4. Any Other Special Procurement Arrangements: Domestic preference will be used in ICBs.
5. Procurement Packages with Methods and Time Schedule
Table 11: Procurement Packages with Methods and Time Schedule
1 2 3 4 5 6 I 7 8 9 Review Expected Estimated Ref. Contract Procurement Domestic by Bank Bid- cost Preference Comments No. (Description) Method P-Q (Prior I Opening (yestno) WSW Post) Date Purchase of cars and motorcycles: This is the lst Lot 1: two vehicles 4 by 4 1 NCB contract: (Pick-up double cabines February 140,000 NCB No No Yes must be for RA~ 15'' 2010 reviewed by the Lot 2: 12 motorcycles 125 Bank CC et accessories for Facilitators. This is the Is' Purchase of two sets of contract through January 2 hrniture and AC units for 5,000 No No Yes shopping: must Shopping 3lSt,2010 the Ras'offices. be reviewed by the Bank This is the 2nd Purchase and installation contract through January 3 of complete computer sets 36,500 No No Yes shopping: must Shopping 3lSt,2010 and 12 laptops be reviewed by the Bank Purchase of 6 digital February, No No cameras I No 15~,2010 3 micro-projects of LDP of the region of Cacheu CDD March 3 1'', 5 106jooo No No Yes (85% IDA + 15% procurement 2010 Communities) 3 micro-projects of LDP of the region of Biombo April 30"' No No Yes (85% IDA + 15% 2010 Communities) Note: goods and services (other than consulting services) for operational purpose may be purchased through 1 relevant procedures described in the PIM.
111. Selection of Consultants
1. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants:
Selection Method Prior Review Comments Threshold 1. Competitive Methods (Firms) = or >US$IOO,OOO, None
83 and any other contract r identified by the Bank in the procurement plan Single Source (Firms) All, irrespective ofthe None cost estimate Individual Consultants = or >US$50,000 None Single source for Individual Consultants All, irrespective of the None cost estimate Contracts for specific assignments such as All, irrespective ofthe Those contracts contracts for the elaboratiodupdate of cost estimate are not selection manual ofthe project implementation and the methods; but due manual ofprocedures, contracts for to their monitoring and evaluation assignments; sensitivity, they contracts for financial assistance will be subject to assignments; contracts for financial audit; prior review contracts for technical audit; contracts for environmental and social issues; contracts for legal assignments
2. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than $100,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions ofparagraph 2.7 ofthe Consultant Guidelines.
3. Any Other Special Selection Arrangements: None
4. Consultancy Assignments with Selection Methods and Time Schedule
Table 13: Consultancy Assignments with Selection Methods and Time Schedule 1 1 2 3 4 5 6 7 Ref. Description of Assignment Estimated Selection Review Expected Comments No. cost Method by Bank Proposals grS$) (Prior / Submission PnsB Date Communication Specialist (short- Oct 1st, 10,000 IC Prior Review 2o09 term technical assistance) I I 1 I I 60 months 2 12 Facilitators x 60 months 33,200 IC Prior Review 31 Dec 09 per Facilitator 3 Annual Audit ofIDA accounts 37,200 LCS Prior Review 15-Jan-10 Independent technical auditor of the 80,000 QCBS Prior Review 15 Feb 10 Project Firm specialized in assessing project 56,000 QCBS Prior Review 15 Mar 10 impact on beneficiary-communities External independent evaluation of 53,000 QCBS Prior Review 3 1-Mar- 11 ESMFandRPF Project Coordinator (6 months in Already Contract 87,000 Prior Review 20 13 and 12 months in 2014) sss selected extension Procurement Specialist (6 months in Already 39,000 IC Prior Review 2013 and 12 months in 2014) selected 9 Senior Accountant (6 months in 39,000 sss Prior Review Already Contract
84 2013 and 12 months in 2014) selected extension Monitoring and Evaluation 10 Specialist (6 months in 2013 and 12 35,000 IC Prior Review 3 1-Oct-09 months in 2014) Financial Management Specialist (6 11 months in 2013 and 12 months in 48,000 IC Prior Review 3 1-Oct-09 2014) Rural Development Specialist (6 1,650 IC Prior Review 3 1-Oct-09 months in 20 14)
Note: Contracts for the staff of the PCU are financed under SPF grant up to 1'' semester of 2013, than under IDA financing for 2"d semester 20 13 and year 20 14. Staff for administrative assistance (Assistant to the Coordinator of the PCU, driver, watcher, housekeeper, clerk, .. .) will be selected through the relevant procedures described in the PIM.
IV. Implementing Agency Capacitv Buildinp Activities with Time Schedule
1. In this section the agreed Capacity Building Activities are listed with time schedule
Table 14: Capac y Building Ac vities with ' me Schedule Expected outcome / Estimated Estimated NO Start Date Comments Activity Description cost Duration The Procurement Specialist and the designated staff from DGCP, trained in procurement Included in Immediately after 1 related to CDD projects and the project 2 weeks the Procurement able to train Facilitators and operating cost Specialist is hired Regional Advisors in CDD procurement implementation Staff from the Project 1 week each Coordination Unit to be trained quarter Upon Project Included in in the World Bank's during the approval by the the project procurement procedures, and in 1'' year of Bank, or as soon as operating cost the elaboration and update of implementat the staff is hired the procurement plan ion Facilitators and RAstrained in Included in Immediately after procurement related to CDD the project 2 weeks Facilitators and Droiects operating cost RAs are hired 2ndquarter after project approval by The Procurement Specialist and Included in the Bank: the designated staff from 4 the project 3 weeks approximately after DGCP, trained in advanced operating cost the training for procurement Facilitators and RAS
85 Annex 9: Economic and Financial Analysis of CDD Micro-projects
1. The main focus of this Project is to increase access to priority basic social and economic infrastructures and services in participating communities in at least two regions of Guinea- Bissau. This is to be achieved through a transparent and community-driven participatory process. As such it does not lend itself to a standard economic valuation for several reasons:
a. About 48 percent of the project’s total funds will be used to fund micro-projects considered as priority by each eligible community. Therefore, the final composition of the project portfolio is not known in advance. The final portfolio is expected to include a portion ofpublic goods and services, such as education, health, and potable water. b. The benefits from the provision of public goods and services (basic education, basic health, community organization) have not been quantified for Guinea-Bissau. The impact on future earnings of increased education, the savings resulting from reductions in the number of sick days in a community or the impact of improved community organization are not known yet. C. Income generating micro-projects will need assistance in the form of community organization, supervision, training, and institutional strengthening. As a result, the value oftheir economic and financial benefits may be difficult to separate from non-economic activities. d. The benefits of decentralization, the benefits of better cohesion at the household and community levels, and the value of reduced environmental degradation are not known and cannot be estimated ex ante.
2. Given these issues, the economic analysis of the Prqject has two components: the first one used a standard NPV and IRR to evaluate each micro-project engaged in income generation, and the second one used an incremental cost analysis for the case of public goods, such as education and health,
3. As part ofproject preparation, the team carried out a detailed analysis offive examples of micro-projects to that could be funded by the Project. These examples are based upon the practical experience accrued during implementation of the ongoing CBMP’s Fund for Local Environmental Initiatives. In general the overall analysis shows that production and income- generating micro-projects have positive IRRs and positive NPVs. It should be mentioned, however, that the yield coefficients used to generate the analysis are from a different geographical area. Nonetheless, these yields are considered reasonable and can be adapted to the project areas without much loss ofgenerality. For micro-projects that provide public goods, such as schools, an incremental cost analysis is used as a criterion, but in the case of water wells, which can have health and economic impacts at the same time, the analysis is based on the value of time saved-time that can be used for productive activities.
4. Table 15 shows a summary of the analytical results for several types of micro-projects that might be selected by communities for funding under the Project. The first example: the rehabilitation of rice dykes in low lands (basfonds) has an internal rate of return of 21 percent, but a relatively low NPV. However, this type of micro-project is important because it allows for
86 the more intensive use ofexisting low lands, which will reduce substantially the need to deforest neighboring areas, as it is currently done in the absence ofa dyke.
5. The second micro-project example is for rice grown in mangrove areas “bolunhas”, where the dykes are used for flood control. Rice yields in these fields are higher than in low land rice, and the IRR and NPV show it.
6. The third micro-project example examined is the construction of water wells, where the key variable is the value of time saved by having the well close to home. Since farmers-both men and women-grow crops and vegetables for subsistence and, to a lesser extent, for the market, the time spent fetching water does have an opportunity cost. As a result, the IRR ofthe water well is 22 percent and the NPV is quite large, since a well can produce benefits for 20 years.
7. The fourth example, a palm oil micro-project-generally administered by women’s groups-shows high returns, since cash sales in nearby markets are a good source of income. The IRR is more than 50 percent and the NPV is more than 8 million FCFA.
8. Finally, in the case of construction of a primary school, the analysis of the incremental costs shows that the cost per student increases by 45 percent. This increase looks high at face value, but in reality it only reflects the dismal amount spent now. The benefits of a new school are shown in the overall increase in student output: 466 percent higher than the current output.
Water wells 6,946,892 122.81% 5,283,260 I I ~~ I I I 0-44 on4 I Palm oil production 2,160,000 50.13% I O,L+L,OY~ I Schools 14,299,441 I Increment in per student cost: 45%. Increment in student output: 466%
2. Financial Implications
9. The budgetary implications of the Project are minimal, since 48 percent of the funds- approximately US$2.4 million-will be assigned to micro-projects that do not require counterpart funding from the central Government. In addition, communities will provide counterpart funding through their own labor, and construction materials found locally at no additional financial cost. For the remaining 52 percent of the funds-approximately US$2.8 million-the central and local governments will participate with mostly in-kind contributions,
87 such as office space at the central and regional levels, and the sharing of some utilities. In addition it is expected that Government officials and local representatives fkom line Ministries will be actively involved in the different phases of the Project (i.e.: discussion and validation of LDP and technical expertise for the design and implementation of micro-projects)
10. The fiscal impact of the Project would be small. At the level of the central CDD Project office in Bissau, the fiscal impact of the Project would be positive but small, since it would be mostly in the form of payment of sales taxes for purchases made by project employees and subcontractors, and any other taxes that may accrue to formal employment. In addition, about 60 percent of the US$2.4 million (not including in-kind community participation) used for funding micro-projects would be used to purchase construction materials not available in the communities, transportation, and lodging. In all of these cases the fiscal impact would be indirect, through increased sales taxes and import taxes. If US$2 million of the total US$5 million are used for purchases, they would generate tax revenues amounting to less than US$0.5 million over the life of the Project.
11. The Project is expected to assist about 120 communities with micro-project grants of about US$20,000 each. If 75 percent of these grants are used in income-generating micro- projects-a safe assumption given the FIAL experience-then the US$1.8 million project funding assigned to these types of micro-projects would generate a minimum of 25 percent in revenues to local communities, or at least US$450,000 in net earnings over the life of the micro- projects.
Program Efficiency
12. Because the Project has a large institutional development component the overhead expenditures assigned to training, community organization, supervision, and follow up may go as high as 16percent of the value of the micro-project (Table 16).
I Schools I I
13. Given that the main objective of the Project is community development, the above percentages for overhead activities are not excessive. These percentages are already included in the budgets of each micro-project and in the IRR and NPV calculations. This means that the overall overhead rate would depend on the ratio of central administrative expenditures to the total cost of the Project (Table 17).
88 Table 17: Project cost and Estimation of Management Overhead Estimated Proiect Costs I 2008 I 2009 I 2010 I 2011 I 2012 I Total
Monitoring and Evaluation
14. Although a Living Standards Measurement Survey for Guinea-Bissau has been undertaken, it is currently being analyzed. Hence, the country still lacks recent and reliable information about agricultural production and productivity. In addition, it lacks localized evidence about the cost of labor, the seasonality of labor, and the opportunity cost for household labor. These data are crucial for understanding appropriate technology in the context of micro- project promotion, and the expectation about yields and benefits.
15. Given the dearth ofreliable field data on land areas, production, and the nature ofmicro- project benefits, the Project will develop a protocol for promoters and supervisors so they can include relevant data in their community file. At a minimum the field data from each community will include:
a. Measurement ofsample land parcels to determine the land covered by exactly 1 hectare. b. At harvest time, exact weighing ofthe amount harvested in that one hectare parcel. This is very important and it may require that the promoter or supervisor be present at harvest time ofthat particular one hectare parcel. c. Exact distribution of the population in the community, and a head count of children of school age. d. If a well is required, measurement of the distance to the nearest functioning source of potable water. The distance can be made in terms ofKm and in terms oftravel time.
e. ' For palm oil micro-projects, estimate the number of palm trees harvested per month, the approximate number of palm trees that can be harvested, and the amount of total production that can be obtained. These estimates may require a visual inspection ofthe fields available for harvest and a sample palm tree count ofa given land area.
89 Annex 10: Safeguard Policy Issues
1. The environmental category of the Project is B. The Project through the micro-projects triggers the following safeguard policies: OP 4.0 1: Environmental Assessment; OP 4.04, Natural Habitats; OP 4.09, Pest Management; OP 4.11, Physical Cultural Resources and OP 4.12, Involuntary Resettlement. Individual micro-projects are small and no large scale, significant or irreversible impacts are expected. Environmental and social safeguard risks are the typical ones for a rural CDD project supporting small scale basic social and economic infkastructure, and might include: (i)localized degradatiordencroachrnent of natural habitats and associated loss of biodiversity; (ii)soil degradation and erosion; (iii)decline in water quality; (iv) inappropriate waste disposal; (v) cutting of trees; (vi) use of pesticide; and (vii) potential public health concerns. Possible social issues were identified to include: loss of/damage to cultural property and involuntary resettlement, including loss of access to resources.
2. As part of project preparation the Government has prepared an Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF). The ESMF also includes detailed Terms of Reference for the preparation of a Pest Management Plan. The processes and procedures defined within these will be an integral part of the PIM. The ESMF details the environmental and social screening criteria and mechanisms to be used during micro- project appraisal. This screening tool will include a checklist designed ,to detect any potential environmental or social negative impacts linked to an individual micro-project and ensure that an appropriate Environmental Management Plan and/or Resettlement Action Plan and/or Pest Management Plan is prepared and appropriate mitigating measures are put in place, if necessary. The ESMF also includes provisions for an annual review for safeguard compliance and to detect potential cumulative environmental impacts that might arise across several micro-projects. In addition, there is a list of ineligible micro-projects.
National Environmental Legislation
3. The project will first rely on the draft law governing impact studies, which specifies the circumstances and conditions under which an Environmental Impact Study (EIS) is mandatory. Regarding the environmental evaluation, the national legislation does not provide for a detailed categorization of projects and micro-projects that must be subject to an EIS. The draft law appendixes, which govern the EIS, simply indicate a classification of a branch of industry.
4. Recognizing that existing capacity of government officials at the central and local level to ensure compliance with environmental and social safeguards is weak; project staff as well as central and local government representatives will all be sensitized and trained in these issues (PCU, Regional Advisors and Facilitators). National and/or international experts will be mobilized for designing specific training content and methodology adapted to different public. Training will be organized on a continuous basis during project implementation in order to incorporate early lessons from the implementation of micro-projects. Furthermore, general sensitization of beneficiaries will form part of the formal project communication strategy.
5. Safeguard compliance will be assured through a three tiered process. First, at the micro- project preparation stage, beneficiary communities assisted by trained Facilitators will be required to complete an environmental and social safeguard checklist as part of the micro-project
90 funding application. This will help them identify any safeguard issues of concern, and prompt the incorporation of appropriate mitigation measures into micro-proj ect design. Second, at the micro-project appraisal stage, the RA together with relevant regional technical representatives will conduct a desk and field review of the proposal prior to its approval. The RA’s role explicitly includes verification of the appropriate identification and mitigation of safeguard concerns. Third, at the project level, a full-time Monitoring and Evaluation Specialist working with the RA and Facilitators in the field will be responsible inter alia for tracking safeguard compliance across the project as a whole and identifying and addressing any issues that arise during micro-project implementation. Additionally, an independent specialist will be recruited to conduct an annual review of safeguard compliance, including detection of potential cumulative environmental impacts that might arise across several micro-projects.
Table 18 summarizes project stages and institutional responsibilities.
Table 18: Summary of Project Stages and Institutional ResDonsibilities Stages ResDonsibilities Sensitizing agents at the tabanca (village) 1. Filling out the project form for the level environmental and social screening 2. Micro-projects environmental and social selection and classification validation 2.1 Selection validation CFUPFE/Director of Planning with the CPR 2.2 Project classification and support, if necessary environmental work (determining simple mitigation measures or EIS) 3. If Environmental Management Plan is necessarv 4.1 TORs preparation Project’s staff 4.2 TORs approval CAIA 4.3 Choice of consultant CR/PFE/CPR 4.4 PGE execution Consultants in EIS 4.5 Impact study approval CAIA PCU CAIA 4. Dissemination CR/PFE/CPR Tabanca
6. A Resettlement Policy Framework has been prepared to guide all land-acquisition activities financed by the project.
Resettlement principles
7. The most effective measure for avoiding disruption of people’s lives and livelihoods is to avoid taking land in the first place. When land acquisition is unavoidable, the area taken will be the smallest area possible, so that the extent of physical and economic dislocation is reduced to the absolute unavoidable minimum. Further, Project-Affected Person or Population (PAP) will
91 be afforded full and meaningful opportunity to participate and contribute to the design and implementation of the project. Also, all PAP will be compensated fully for the loss of any and all assets, and payments will be effected in a timely manner so that the PAPs are not further inconvenienced. Finally, PAP will be assisted in case ofphysical relocation or resettlement, and, no less importantly, PAP will be provided all reasonable and necessary assistance to restore their livelihoods, to the extent these are affected.
Process for preparing and approving resettlement plans
8. RAP preparation is a two-step process tailored to project procedures. The first step is an initial screening when project opportunities are first under consideration; if land acquisition is required, the second step is the development of a RAP with project assistance.
9. The Environmental and Social Screening Checklist (ESSC) is designed to inform local communities and their leaders about critical issues and to make available to reviewers key information so that mitigation measures, if any, can be identified and/or that requirements for further analysis can be determined at an early stage of the micro-project cycle for compliance. Thus, once a community decides what activity it wants to undertake, the micro-project is checked by the community against the ESSC that has been prepared to assist in the environmental and social evaluation of micro-projects. The answer to each ESSC question is either ‘Yes’ or ‘No’. If all of the answers are ‘No’, the subproject poses no particular environmental or social concern, and can be forwarded to the RA for field verification of the findings and for final processing.
10. When one or more items indicate that further environmental or social (specifically, in this case, resettlement) investigation is required, the community, in consultation and collaboration with the RA staff, will develop the required plan. In practice, the CG will conduct a census of the affected population and an inventory ofthe assets each PAP will lose. At the same time, the CG supported by the Facilitators will record basic demographic and economic information, specifically, the name, age, marital status, number of dependents, primary and secondary occupations of each PAP household. In addition, the enumerators will record the extent and type of impact and the importance of the area lost to each PAP family. This work will be carried out with the assistance of the assigned the Facilitator, supplemented, if necessary, with external technical assistance financed from the Project.
11. Once it is determined how many people are affected and how severely, the CG will consult with the PAPs on remedial measures. Ideally, all land lost will be replaced by land ofthe same size and of the same characteristics. Structures can be replaced in-kind by the micro- project or by the PAP using his or her indemnification payment(s). Annual crops that are lost before harvest are compensated at the market rate for that production at the mid-point between harvests. And economic trees are either valued for their lumber (timber trees) or, in the case of fruit trees, valued at the amount ofproduction lost for the period it takes a replacement seedling to come into production.
12. Although there is no standard format or length for a RAP, the plan will: a. Describe the project (and alternatives considered to minimize resettlement)
92 b. Define the impacts (including those identified during the census and socio-economic survey) C. Census the population affected and undertake a baseline socio-economic survey d. Detail the type and extent of loss incurred by each PAP e. Specify whether compensation is in-kind for each loss or, for those assets whose indemnification is in cash, the unit compensation rates and overall cost for monetary compensation, including transport, administrative and other (e.g., contractor hiring) costs f. Determine and prepare the resettlement site, if any, including institutional arrangements g. Present any economic rehabilitation measures required h. Provide a timetable for resettlement and sub-project activities 1. Present a detailed budget, and identify the sources of funds.
13. The RAP approval process involves three steps. First, once the micro-project has been selected and the ESSC completed, the CG will review the proposal, and sign the submission to indicate their support for and agreement with the initiative. If a RAP is required, the committee members, as well as the Facilitator who worked on the development of the micro-project, will sign the RAP in order to indicate their familiarity with the compensation and economic assistance measures and their willingness to carry them out efficaciously. The CG then forwards the proposal to the Facilitator. Second, the RA will review the submission, and carry out any field verification that he or she believes to be warranted. The RA will indicate that he or she is satisfied that the proposal and its annexes by signing the proposal and forwarding it to the national Project Coordinator for review. When the Project Coordinator concurs, he or she will sign the proposal and return it to the RA for final processing. In the contrary case, the RA or the Project Coordinator, or both, will specify for the community what additional information is necessary before the RAP can be approved. Third, the RA will forward the proposal to the RPO, which is the body that will grant formal approval of all proposals.
Eligibility Criteria
14. Under this Policy Framework, any individual who loses land or other assets (e.g., residence, business premise, crops or economic trees) or whose livelihood is affected by land acquisition or changed land use by the Project is eligible for indemnification and/or assistance. The nature and extent of indemnification and assistance depend on the rights that individual has to the land taken and on the nature and extent of the impact. This policy also defines the procedures to be followed for valuing property that will be lost, and the agencies responsible for each step of the process.
15. The cut-off date for eligibility will be set by each micro-project as the date when the CG completes the census of people occupying the land to be acquired, including the inventory of their assets (land, built structures, and other infrastructure such as wells, latrines, and fences) and the socio-economic survey.
93 Annex 11: Project Preparation and Supervision
Planned Actual PCN review 10/29/2007 11/01/2007 Initial PID to PIC 03/10/2008 11/09/2007 Initial ISDS to PIC 04/22/200 8 11/09/2007 Appraisal 11/17/2008 03/16/2009 Negotiations 08/18/2009 08/19/2009 BoardRVP approval 09/24/20 09 Planned date of effectiveness 12/3 1/2009 Planned date of midterm review 06/0 1/20 12 Planned closing date 12/3 1/20 14
Key institutions responsible for preparation of the Project: 1. The Project was prepared by a cross-sectoral NTT, under the leadership of the Ministry of Economy, Planning and Regional Integration.
Bank staff and consultants who worked on the Project include: Name Title Unit Michael Drabble Sr. Education Specialist LCSHE Setareh Razmara Lead Social Protection Specialist AFTSP Maurizia Tovo Lead Technical Specialist . AFTSP John Virdin Sr. Natural Resource Management Specialist AFTEN Cheick Traore Sr. Procurement Specialist AFTPC Bourama Diate Sr. Procurement Specialist AFTPC Osval Romao Financial Management Specialist AFTFM Carmen Pereira Liaison Officer AFMGW Eric Dacosta Team Assistant AFMGW Adriana Costa Language Program Assistant AFTED Luz Meza-Bartina Sr. Counsel LEGAF Edith Mwenda Sr. Counsel LEGAF Anthony Molle Counsel LEGAF Jose Janeiro Senior Finance Office CTRFC Carry Anne Cadman Forestry Specialist AFTEN Tanya Yudelman CDD Consultant AFTED
2. Bank funds expended to date on project preparation: 0 Bank resources: US$200,000 0 Trust funds: 0 0 Total: US$200,000
3. Estimated Approval and Supervision costs: 0 Remaining costs to approval: US$35,000 0 Estimated annual supervision cost: US$lOO,OOO
94 Annex 12: Documents in the Project File
1. African Development Bank. 2007. Supporting Community-Driven Development in Developing Member Countries.
2. Arcia, G. 2008. Economic and Financial Analysis of Five Micro-project Examples.
3. FIAL. 2007. Simplified User Guide: Preparation of Local Development Plans.
4. FIAL. 2007. Simplified User Guide: Preparation of a Micro-project.
5. Government of Guinea-Bissau. 2007. Poverty Reduction Strategy Paper.
6. Government of Guinea-Bissau. 2005, Operations Manual, Fund for Local Environmental Initiatives (FIAL)
7. INEP. 2007. Estudo Quantitativo e Qualitativo sobre as ONGs e Outras Entidades Implicadas no Desenvolvimento ComunitArio na GuinC-Bissau.
8. Ocante da Silva, A. '2007. Diagn6stico Institucional nas heas do Project0 de Desenvolvimento dirigido pelas Comunidades.
9. World Bank. 2004. Coastal and Marine Biodiversity Project (CBMP). Project Appraisal Document.
10. World Bank. 2005. The Effectiveness of World Bank Support for Community-Based and Driven Development. Independent Evaluation Group. Washington, D.C.
1 1. World Bank. 2006. Community-Driven Development in the Context of Conflict-Affected Countries: Challenges and Opportunities.
12. World Bank. 2007 Working Paper No 88. Conflict, Livelihoods, and Poverty in Guinea- Bissau
13. World Bank. 2008. Rural Community-Driven Development Project Concept Note.
14. World Bank. 2008. Rural Community-Driven Development PCN Review Minutes.
15. World Bank. 2008. Guinea-Bissau. Meeting the Demand of the Poor and Vulnerable - The Road to Better Social Service Delivery.
16. World Bank (2009). Africa Development Indicators 2008/9. Youth and Employment in Africa: The Potential, the Problem, the Promise.
95 Annex 13: Statement of Loans and Credits STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars
Difference between expected and actual Original Amount in US$ Millions disbursements ProjectID FY Purpose IBRLI IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d P107493 2009 GW-Economic Governance DPL 1 0.00 8.00 0.00 0.00 0.00 8.39 0.00 0.00 PO97975 2006 GW-MS Infrastructure Rehab SIM (FY06) 0.00 15.00 0.00 0.00 0.00 9.91 6.73 0.00 PO83453 2005 GW-Coastal & Biodiv Mgmt (FY05) 0.00 3.00 0.00 0.00 0.00 0.51 0.20 0.00 PO01001 2002 GW-Priv Sec Rehab & Dev (FY02) 0.00 26.00 0.00 0.00 0.00 0.02 -4.91 -5.08 Total: 0.00 52.00 0.00 0.00 0.00 18.83 2.02 - 5.08
GUINEA-BI S S AU STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars
Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1998 Banco de Africa 0.00 0.28 0.00 0.00 0.00 0.28 0.00 0.00 Total portfolio: 0.00 0.28 0.00 0.00 0.00 0.28 0.00 0.00
Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic.
Total pending commitment: 0.00 0.00 0.00 0.00
96 Annex 14: Country at a Glance
Guinea-Bissau at a glance w4#8
sub- Saharan LOW- Bsscuu Africa incane
I.7 m t,= 200 952 578 0 33 762 749
3.0 25 2.2 2.9 2.6 2.7
66 30 36 32 46 51 57 119 94 85 n 29 57 58 68 5B 61 70 94 94 84 99 1w 56 ea 89
1997 2006 2007 Economicntios' 027 0.31 0.36 24.0 17.2 17.2 21.0 41.8 42.6 5.1 6.3 13.3 2.5 22 .7 23.4 -21.5 5.5 6.2 1.1 3.0 343.1 231.3 17.1 21.9 249.1 496.3
2006 2007 2007-1 1
1.8 27 -1 3 0.3 5.1 5.1
1987 1997 2006 2007
57.6 54.6 61.8 63.6 132 15.3 11.5 12.2 0.5 112 7.2 7.8 29.2 33.1 26.0 24.2 61.7 87.8 76.0 m.5 10.7 7.0 17.7 16.3 39.0 39.9 52.7 46.5
$987-97 199707 2006 2007
5.3 32 5.5 7.0 6.0 1.5 6.0 6.0 6.3 1.3 6.0 6.0 3.3 0.6 0.7 -2.1 6.3 -22 0.1 0.1 1.9 1.7 4.0 4.5 -2.1 -2.4 7A 10.4 -1.3 3.1 10.0 8.9
97 Guinea-Bissau 1987 1997 2M)6 I 49.1 20 2.0 5 94.3 3A.z -0.5 3.6
4 21.0 17.5 322 22.6 3.9 22 3.2 4.3 I -24.4.1 -15.6 -7.6 -17.7
1987 1997 2006
15 4a 110 11 46 66 71 1 0 I 1 'w .. 75 50 69 28 28 50 11 31 5 9 20 20% 7 18 8 80 1OB e4 86 61 9f 209 177 93 7%
4987 1997 2006
20 56 $29 60 107 162 la 48 -51 -33 -14 ' -15 -10 -9 -10 8 60 45 -ID -!?a 17 22 102 a -= -1 1 44
10 55 21 0 a7 86 583.7 522 g 479.3
1987 1997 m
480 921 71 1 0 0 0 87 22$ 297 TWdebtserviee 11 10 34 BRD 0 0 0 . IDA 1 3 a
42 52 71 32 2s a 5 0 0 0 11 42 0 0 0
24 14 0 E - Bilzltenl 19 18 5 0 I 6 6 0 - sbt-lerm 19 16 0 5 1 2 2 2 18 15 -2 3
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DECEMBER 2004