Document of The WorldBank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No: 43472-ET
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 14.2 MILLION Public Disclosure Authorized (US$23.4 MILLION EQUIVALENT)
ANDA
PROPOSED GRANT
IN THE AMOUNT OF SDR 34.4 MILLION (US$56.6 MILLION EQUIVALENT)
TO THE
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA Public Disclosure Authorized
FOR A
PASTORAL COMMUNITY DEVELOPMENT PROJECT I1
May 5,2008
Sustainable Development Department Agriculture and Rural Development 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 April 18,2008)
Currency Unit = Ethiopian Birr (ETB) 9.58ETB = US$1 US$1 = SDR0.608
Ethiopian FISCAL YEAR July8 - July7
ABBREVIATIONS AND ACRONYMS
AfDB African Development Bank APL Adaptable Program Loan APR Annual Progress Review ASC Audit Services Corporation ATVET Agricultural Technical and Vocational Educational Training BOARD Bureau of Agriculture and Rural Development CAHW Community-based Animal Health Worker CAP Community Action Plan CAS Country Assistance Strategy CDD Community-Driven Development CF Community Facilitator CF Community Investment Fund CPAR Country Procurement Assessment Report cso Civil Society Organization DA Development Agent DER Disaster Early Response DFID Department for International Development (UK) DPCF Disaster Preparedness and Contingency Fund DPCP Disaster Preparedness Contingency Plan DPIP Disaster Preparedness Investment Plan DPPB Disaster Preparedness and Prevention Bureau DPPO Disaster Preparedness and Prevention Office EMCP Expenditure Management and Control Program ESMF Environmental and Social Management Framework EPADGoN Ethiopian Pastoral and Agro-Pastoral Development and Governance Network EU European Union EWRB Early Warning and Response Bureau (regional) EWRDMoARD Early Warning and Response Department (MoARD) EWRD Early Warning and Response Desk (woredu) EWS Early Warning System FA Fiduciary Assessment FCA Federal Cooperatives Agency FFSCB Federal Food Security Coordination Bureau FOR OFFICIAL USE ONLY FIB Federal Inter-ministerial Board FMS Financial Management System FPCU Federal Project Coordination Unit FSP Food Security Program GoE Government ofEthiopia GPS Global Positioning System HSDP Health Sector Development Program ICAS Interim Country Assistance Strategy IDA International Development Association IFAD International Fund for Agricultural Development IFR Interim Financial Report IGA Income-Generating Activities ILRI International Livestock Research Institute IT Information Technology JBAR Joint Budget and Aid Review JSDF Japanese Social Development Fund LDP Local Development Plan LIG Local Investment Grant LIU Livelihood Integration Unit M&E Monitoring and Evaluation MDG Millennium Development Goal MIS Management Information System MoARD Ministry ofAgriculture and Rural Development MoE Ministry ofEducation MoFA Ministry ofFederal Affairs MoFED Ministry ofFinance and Economic Development MoH Ministry ofHealth MOT Mobile Outreach Teams MoU Memorandum ofUnderstanding MST Mobile Support Team MoWR Ministry ofWater Resources NRM Natural Resource Management O&M Operations and Maintenance OFAG Office ofthe Federal Auditor General PADS Pastoral Area Development Strategy PAL Participatory Action Learning PASDEP Plan for Accelerated and Sustained Development to End Poverty PBS Protection ofBasic Services PCA Public Accounts Committee PCDP Pastoral Community Development Program / Project PDC Pastoral Development Commission PDN Pastoral Development Network PDO Pastoral Development Office/r PDB Pastoral Development Bureau PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PIM Project Implementation Manual PLA Participatory Learning and Action PLKM Participatory Learning and Knowledge Management
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. PM&E Participatory Monitoring and Evaluation PRA Participatory Rural Appraisal PRM Pastoral Risk Management PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper PSC Project Steering Committee PSCAP Public Sector Capacity Building Program PSCPD Parliamentary Standing Committee on Pastoral Development PSNP Productive Safety Net Program REWFSSC Regional Early Warning and Food Security Steering Committee RCBP Regional Cooperative Promotion Bureau RLP Rural Livelihoods Program RPCU Regional Project Coordination Unit RUFIP Rural Financial Intermediation Program RUSACCO Rural Savings and Credit Cooperative SBD Standard Bidding Document SCF/UK Save the Children Fund/UK SDPRP Sustainable Development and Poverty Reduction Program SLE Sustainable Livelihoods Enhancement SNNPR Southern Nations, Nationalities and Peoples National Regional State SOE Statement ofExpenditure TA Technical Assistance TBA Traditional Birth Attendant TOR Terms ofReference UEAP Universal Electrification Access Program UNOCHA United Nations Agency for the Coordination ofHumanitarian Affairs USAID United States Agency for International Development WaSH Water Supply, Sanitation and Hygiene WCPD Woreda Cooperative Promotion Desk WDC Woredu Development Committee WSSP Water Supply and Sanitation Project WWDP Woreda Water Development Plan
Vice President: Obiageli Katryn Ezekwesili Country Director: Kenichi Ohashi Sector Manager: Karen McConnell Brooks Task Team Leader: Ingo Wiederhofer ETHIOPIA Pastoral Community Development Project I1
CONTENTS
Page
I. STRATEGIC CONTEXT AND RATIONALE ...... 4 A . Country and Sector Issues ...... 4 B. Rationale for Bank involvement ...... 4 C . Higher-level objectives to which the project contributes ...... 5
I1. PROJECT DESCRIPTION ...... 6 A . Lending Instrument ...... 6 B. Program Objective and Phases...... 6 C . Project Development Objective, Key Indicators and Triggers ...... 8 D. Project Coverage and Components ...... 10 E. Lessons Learned and Reflected in the Project Design...... 14 F. Alternatives Considered and Reasons for Rejection...... 16 I11. IMPLEMENTATION ...... 17 A . Partnership Arrangements., ...... 17 B. Institutional and Implementation Arrangements ...... 17 C . Monitoring and Evaluation of Outcomes and Results ...... 19 ... D. Sustainability...... 20 E. Critical Risks and Possible Controversial Aspects ...... 21 F. IDA Financing Conditions and Covenants ...... 23 IV. APPRAISAL SUMMARY ...... 24 A . Economic and Financial Analyses ...... 24 B. Technical ...... 24 C . Fiduciary ...... 26 D. Social...... 28 E. Environment...... 30 F. Safeguard Policies ...... 30 G. Policy Exceptions and Readiness ...... 31 Annex 1: Country and Sector or Program Background...... 32 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 39 Annex 3: Results Framework and Monitoring ...... 40 Annex 4: Detailed Project Description...... 53 Annex 5: Project Costs ...... 64 Annex 6: Implementation Arrangements ...... 66 Implementation Arrangements Specific to Project Components ...... 68 Annex 7: Financial Management and Disbursement Arrangements ...... 71 Annex 8: Procurement Arrangements ...... 87 Annex 9: Anti-Corruption Action Plan...... 95 Annex 10: Economic and Financial Analysis ...... 102 Annex 11: Safeguard Policy Issues ...... 107 Annex 12: Project Preparation and Supervision ...... 109 Annex 13: Documents in the Project File ...... 111 Annex 14: Statement of Loans and Credits ...... 113 Annex 15: Country at a Glance ...... 114 Annex 16: Map IBRD 36134 ...... 117 ETHIOPIA
PASTORAL COMMUNITY DEVELOPMENT PROJECT I1
PROJECT APPRAISAL DOCUMENT
AGRICULTURE AND RURAL DEVELOPMENT
AFRICA REGION
Date: May 5,2008 Team Leader: Ingo Wiederhofer Country Director: Kenichi Ohashi Sectors: General agriculture, fishing and Sector Managermirector: Karen McConnell forestry sector (20%);General education sector Brooks (20%);Animal production (20%);0ther social services (20%);General water, sanitation and flood protection sector (20%) Themes: Rural services and infrastructure (P); Water resource management (S);Natural disaster management (S);Decentralization (S);Rural policies and institutions (S) Project ID: P108932 Environmental screening category: Partial Assessment Lending Instrument: Adaptable Program Loan
[ ] Loan [XI Credit [XI Grant [ 3 Guarantee [ ] Other:
For Loans/Credits/Others: Total Bank financing (US$m.): 80.00
Borrower: Government ofthe Federal Democratic Republic ofEthiopia Responsible Agency: Ministry ofFederal Affairs P.O. Box 5608 Ethiopia Tel: 251-1-154858 Fax: 251-1-511200 mofa@,telecom.net.et Project implementation period: Start July 1,2008 End: June 30,2013 Expected effectiveness date: July 1, 2008 Expected closing date: December 3 1, 2013 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? [ ]Yes [x ]No Re$ PAD D. 7 Have these been approved by Bank management? Is approval for any policy exception sought from the Board? [ ]Yes [x ]No Does the project include any critical risks rated “substantial” or “high”? [ x]Yes [ ]No Re$ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [ [ No Re$ PAD D. 7 Project development objective Re$ PAD B.2, Technical Annex 3 To increase the resilience ofEthiopian pastoralists to external shocks and to improve the livelihoods ofbeneficiary communities. Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 Component 1 - Sustainable Livelihoods Enhancement: This component would further strengthen decentralized and participatory planning procedures at the community/ kebele (sub-district) and woreda levels through a Community Investment Fund, and it would provide access to savings and cooperatives support systems and grants through a Rural Livelihoods Program.
Component 2 - Pastoral Risk Management: The goal ofthis component would be to improve the existing Pastoral Early Warning System through a participatory approach as well as the establishment ofan early response Fund, and to support Strategic Disaster Preparedness and Mitigation investment planning and financing ofassociated subprojects.
Component 3 - Participatory Learning and Knowledge Management: this component would strengthen demand driven participatory learning, knowledge generation and research methodologies at the community level; and support knowledge management and information exchange/networking system at the federal and regional levels.
Component 4 - Project Management: this component would assist project management units at the regional and federal levels to effectively coordinate, supervise and implement project activities under the direction ofthe Ministry ofFederal Affairs and Pastoral CommissionsBureaus ofeach region.
Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 10
Environmental Assessment (OP/BP 4.0 1) Pest Management (OP/BP 4.04)
2 Projects on International Waterways (OPBP 7.50)
Significant, non-standard conditions, if any, for: Re$ PAD C. 7 Board presentation: None
Loadcredit effectiveness: (a) The Recipient has adopted a Project Implementation Manual, setting out the administrative and financial procedures including procurement and disbursement procedures, in form and substance satisfactory to the Association.
(b) The Recipient has submitted a project implementation plan for the first eighteen months ofthe Project, in form and substance satisfactory to the Association.
(c) The Recipient has submitted evidence satisfactory to the Association demonstrating the clearance ofany material balances in the inter-fbnd accounts under the first phase ofthe Program.
Covenants applicable to project implementation
The Recipient undertakes that: (a) Not later than 60 days following the Effective Date, the Recipient shall ensure that a memorandum ofunderstanding for the management ofthe Pastoral Early Warning and Response Program has been duly executed between the Early Warning and Response Department ofMinistry ofAgriculture and Rural Development (MoARD) and the Federal Project Coordination Unit (FPCU) within Ministry ofFederal Affairs (MoFA), in form and substance satisfactory to the Association;
(b) Not later than 60 days following the Effective Date, the Recipient shall ensure that a memorandum ofunderstanding for the management of the rural livelihoods program has been duly executed between the Federal Cooperatives Agency (FCA) and the FPCU within MoFA, in form and substance satisfactory to the Association; and
(c) In order to ensure the proper financing of the Project, it shall make available to the FPCU not later than: (i)October 15,2008 an initial amount equivalent to $1,000,000 for the first year ofimplementation ofthe Project; and (ii)October 15 ofeach Fiscal Year thereafter during Project implementation, such amount as shall be required to ensure that the FPCU has available to it a total ofthe initial amount referred to in paragraph (i)above for the following Fiscal Year.
3
I. STRATEGIC CONTEXT AND RATIONALE
A. Country and Sector Issues
1. Ethiopia ’s Development Strategy. Ethiopia is currently implementing its second Poverty Reduction Strategy (PROS), known as the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). The PASDEP’s strategic vision is one ofrapid and sustained growth primarily through scaled-up development assistance and large domestic investments targeted at eliminating the poverty traps that have hindered the development ofthe country. While building upon the first PRS (Sustainable Development and Poverty Reduction Program, SDPRP), the PASDEP contains several new elements, including an explicit link with the Millennium Development Goals (MDGs) and a greater focus on growth. 2. Pastoralism in Ethiopia. In Ethiopia, pastoralism is extensively practiced in the Afar and Somali Regional States (Regions), in some Zones ofthe Oromiya Region, and in some Zones of the Southern Nations, Nationalities and Peoples National Regional States (SNNPR), referred to hereafter as the Southern Region). Pastoralists are also found in other parts ofthe country. These lowlands encompass at least twelve million people, over 500,000km2 (almost half ofthe surface area ofEthiopia) and over eleven million animals. People living in the pastoral and agro-pastoral areas ofEthiopia comprise: (i)the comparatively wealthy who hold substantial livestock assets; (ii)a larger number ofpoor people who have small herds and flocks and those who, to a greater or lesser extent, depend upon cropping or sale oftheir labor (“ago-pastoralists”); and (iii)a significant number who are gradually abandoning pastoral livelihoods due to loss of assets and degradation ofgrazing lands. Although climatic conditions and hardships are similar for most pastoral areas, the people inhabiting these areas differ in their social structure, herd composition, coping strategies and the extent oftheir integration into the market economy. 3. In the past, development ofpastoral areas received relatively little attention from policymakers, and pastoral peoples were economically, socially and politically marginalized in Ethiopia. Key development issues in these areas include: (i)land-tenure security for grazing land and encroachment by sedentary populations as well as large-scale development schemes; (ii) poor access to public and social services; (iii)a restrictive livestock marketing and export policy; (iv) vulnerability to drought shocks; (v) environmental degradation, in particular ofrangelands; and (vi) restrictions on movement and conflicts related to natural resource management (NRM) as well as regional competition. The relative severity ofpastoralists’ socio-economic status prompted the Government of Ethiopia (GoE) to intensify its search for sustainable development strategies in these areas from 2002 onwards.
4. The GoE’s current vision for addressing development in pastoral areas is stipulated in PASDEP. The dedicated section on “Pastoralist Livelihoods and Development” acknowledges the previous marginalization ofpastoral populations and recognizes that they are among the poorest ofthe poor in Ethiopia. It proposes a range ofadapted livelihoods and service-delivery interventions to remedy this situation.
B. Rationale for Bank involvement
5. The Bank is supporting the Government’s program through a three-stage Adaptable Program Loan (APL) initiated in 2003. The rationale for Bank involvement as defined for Phase Iof the
4 Pastoral Community Development Program (PCDP) remains valid and continues to provide a strong impetus for continued Bank involvement. (9 First, the current Interim Country Assistance Strategy (ICAS) identifies good governance, addressing vulnerability and growth as central pillars ofBank support to Ethiopia. The PCDP 11, identified in the ICAS, is the primary investment program supporting these objectives in lowland areas ofthe country. The proposed Country Assistance Strategy (CAS) that is currently under preparation maintains this focus, with an additional emphasis on enhancing the scale and quality ofservice delivery. (ii) Communities and local governments have demonstrated their desire for capacity to implement PCDP Iresources beyond initial expectations. Approximately 94% ofthe PCDP Iresources were disbursed 12 months ahead ofthe scheduled closing date. Further financing is required to consolidate the gains in existing target woredas (districts) as well as to expand access to financing to other pastoral communities and woredas which have expressed strong demand for access to PCDP I1resources. (iii) The establishment ofeffective state support to pastoralist livelihoods and service delivery in the Ethiopian lowlands is a long-term process. The GoE, the Bank and the International Fund for Agricultural Development (IFAD) need to continue their engagement with the PCDP I1in order to realize its full potential. (iv> Finally, Bank resources are required to fill a financing gap. The Bank’s financial contribution continues to be critical in leveraging financing from IFAD, and may be instrumental in helping the GoE to hrther broaden the donor base for the PCDP 11.
C. Higher-level objectives to which the project contributes
6. The Government’s PASDEP (covering 200415-2009/10) supports pastoralist livelihoods and development as an important means in achieving poverty reduction and economic growth. PASDEP clearly states the main elements ofthe pastoralist program: (i)improving pastoral livelihoods and asset bases; (ii)improving the lack of basic services in pastoral areas; and (iii) improving the institutional issues related to pastoralists.
7. The proposed PCDP I1supports a number of strategic objectives ofthe Bank’s new CAS, expected to be presented to the Board in FY08, including fostering economic growth, improving access to and quality ofbasic service delivery, reducing vulnerability and fostering governance.
5 11. PROJECT DESCRIPTION
A. Lending Instrument
8. The PCDP I1is the second phase ofa three-phase APL launched in 2003. PCDP I1is planned to run from June 2008 to June 2013. Performance triggers for the completion ofPhase Ihave been met, opening the way to the development ofPhase 11.
9. IDA funding totaling SDR 48,600,000 (US$ 80,000,000) is proposed for PCDP 11. In addition, US$33.5 million will be made available from IFAD as of2009. The GoE and beneficiary communities will provide US$19.7 million in support ofthis Project. PCDP I1is designed to accommodate contributions from other donors as and when these become available.
B. Program Objective and Phases
10. The overall objective ofthe Program is to sustainably improve the livelihoods ofpastoralists living in the arid and semi-arid Ethiopian lowlands. A “livelihood” is defined as a people- centered concept comprising four key elements related to the wellbeing ofindividuals and families: (i)growth and stability ofincome; (ii)access to social and public services; (iii)the social relations, institutions and natural environment that facilitate or constrain standards of living; and (iv) reduction ofvulnerability to disaster.
11. Over a 15-year period, the Program’s interventions are designed to empower communities and district (woreda) and regional governments to better manage local development in pastoral areas, with the aim ofincreasing and diversifying incomes, improving social infrastructure and increasing access to public services. This is to be achieved through a community-based process ofdevelopment planning linked to a community investment hnd which flows through local government. The Program also supports a participatory disaster risk management program to reduce the risk ofpastoral communities to drought and other disasters. While recognizing the central role that animal production plays and will continue to play in pastoral life, the PCDP I1 also helps to identify and develop alternative livelihoods with a view to enhancing the development prospects ofdifferent segments ofthe pastoral and agro-pastoral populations.
12. The Program has multiple phases, using the APL instrument with a “horizontal approach”, expanding geographically over time.
Table 1: Overview of PCDP three-phase APL (2003-2018) Phase Objective Basic feature-
community development Identify and pilot Establish and test Community Investment Fund, PCDP I processes and including income-generating activities. 2003 - 2o08 institutional 0 Establish and pilot community-based pastoral risk mechanisms management mechanisms.
6 ble 1: Overview of PCDP three-phase APL (2003 2018)
0 Target up to 213 ofpastoral and agro-pastoral woredas for community development. 0 Institutionalize income-generating activities in national Expand community savings and credit cooperative systems PCDP I1 development and 0 Expand pastoral risk management system to all pastoral 2008 - 2013 pastoral risk and ago-pastoral woredas management systems. 0 Expand pastoral development networking at regional level.
Target all pastoral and agro-pastoral woredas for Further expand community development and mainstream into geographically while decentralization initiatives to maximize sustainability consolidating and Expand national savings and credit cooperative systems PCDPIII institutionalizing to most pastoral and agro-pastoral woredas. 2013 - 2018 community Refine pastoral risk management system and ensure development and institutional sustainability pastoral risk management systems.
13. The Project Development Objective for PCDP Iwas “$or a selected set of woredas, to provide capacity-building and establish effective models of public service delivery, investment and disaster management in pastoral areas that address communities ’priority needs and reduce their vulnerability.” Implementation ofPCDP Iis on track (see section B.4) and agreed triggers required to move to the second phase have been met. A full description ofthe achievement of triggers is summarized in Table 2 below:
ofcommuhties and local stakeholders are satisfied with the PCDP and wish to stakeholders are satisfied with PCDP approach and wish continue. to continue.
At least 50% of communities in woredas targeted in the first phase have received of communities in woredas targeted in the first phase capacity-building support and have have received capacity-building support and have formally articulated their local formally articulated their Community Action Plans development plans (LDP). (CAPS).
At least two-thirds ofworedas have Achieved. A total of 23 project woredas (72%) have submitted approved Disaster Preparedness developed their DPCPs. Contingency Plans (DPCPs)
7 At least one-half of the Community Achieved. According to the report ofthe external Investment Fund (CIF) has been disbursed consultant and financial records of the Project about 72% for micro-projects which were approved ofthe resources set aside for CIF has been disbursed for and successfully implemented. community-prioritized micro-projects that have been completed; and at least 59% ofthe completed subprojects are functional.
At least one-half ofthe Disaster Achieved. According to Project records and assessment Preparedness and Contingency Fund report of the external consultant, about 86% ofDPCF (DPCF) has been disbursed for subprojects resources have been disbursed for approved sub-projects, which were approved and successfully and 60% ofthe completed subprojects are operational. implemented.
The Pastoral Development Network Achieved. The Ethiopian Pastoral and Ago-Pastoral (PDN) is active and operational and has Development and Governance Network (EPADGoN) was made substantial progress towards established in 2007, with significant civil society harmonization ofdecentralized participation. development approaches. Progress on decentralization approaches is being addressed largely through larger national programs (see trigger 7 below).
Govemment, through its reforms and Achieved. Government continues to support national support to phase 1, continues to decentralization process with donor assistance, including demonstrate strong support for through large programs such as the Protection ofBasic decentralization and community-based Services Project and Public Sector Capacity-Building development in pastoral areas, and has Program. produced a Pastoral Area Development Government included a dedicated section on pastoralist Strategy (PADS) that has been validated at livelihoods in the PASDEP (2006), which was developed the regional and local level through with consultation at regional and civil society levels. consultation with a broad spectrum of Government also prepared a revised Policy Statement for stakeholders. the Sustainable Development ofPastoral and Ago Pastoral Areas of Ethiopia (2008) to further guide implementation ofthe PASDEP in these areas.
C. Project Development Objective, Key Indicators and Triggers
14. The objective ofPCDP I1is to contribute to: (i)increasing the resilience of Ethiopian pastoralists to external shocks; and (ii)improving the livelihoods ofbeneficiary communities, and thereby to contribute to overall poverty alleviation in Ethiopia. Accordingly, the Project is designed to: (i) Increase access to and effective delivery of social services in pastoral and agro- pastoral areas; (ii) Enhance pastoralists’ access to savings and credit resources and services;
8 (iii) Increase pastoral community engagement in woreda processes and local development decision-making;' (iv) Expand and institutionalize the pastoral early warning system and the responsiveness ofdecentralized disaster early response financing; (v) Prepare and implement regional disaster preparedness investment strategies and plans; and (vi) Improve access to information and awareness ofpastoral development issues.
15. Progress towards achieving the outcome ofthe Project will be measured by the following Project Development Objective Outcome Indicators: (i) Percent ofBeneficiary communities are satisfied with service delivery through the social infrastructure financed under the Project; (ii) Income ofpastoral saving and credit loan clients in Beneficiary Communities has increased ; (iii) Disaster early warning data are made available in a regular and timely manner at woreda, regional and federal levels for pastoral and agro-pastoral woredas in Ethiopia. (iv) Percent ofBeneficiary Communities are satisfied with timeliness, quantity and quality ofdisaster early response.
16. Triggers for Moving to a Third Phase. Moving from Phase I1to Phase I11 ofthe Program will depend on achieving performance triggers related to the satisfactory implementation ofagreed Phase I1activities and the readiness ofthe PCDP and national capacity to expand geographically. These triggers are the following:
decentralization and community-based de areas, and this will be reflected in its next Strategy Paper (PRSP).
World Bank task team.
* The GoE has in the past few years launched a number ofnational programs to strengthen decentralized public- sector management (Public Sector Capacity Building Program, PSCAP), decentralized service delivery (Protection ofBasic Services, PBS) and food security (Productive Safety Net Program, PSNP). Phase I1of the PCDP will complement these initiatives by enhancing the capacities ofpastoral communities and woredu authorities in these areas to engage in participatory local development and disaster-management activities.
9 CDP (2008 - 2012)
Verification Mechanism Combined evaluation and delivery through PCDP-financed social infrastructure as well as beneficiary assessment by with procedures for community participation in training, sub- consultant to be project identification and implementation, financial management, contracted by procurement and safeguards. MoFNFPCUPCDP. 5. The FPCUPCDP, in consultation with regions and communities, Review by World Bank has developed a graduation strategy for phase ICIF beneficiary task team. woredas to facilitate their access to mainstream Government decentralization support. 6. At least 150 Pastoral Rural Savings and Credit Cooperatives have Evaluation by consultant been established and its members and management trained, having to be contracted by the appropriate governance structure and being actively involved in MoFAEPCUPCDP. collecting savings and providing credit to its members on a sustainable basis. 7. The Pastoral Early Warning System (PEWS) is operational in at Evaluation commissioned least 80% ofpastoral and agro-pastoral woredas and reports are by MoFNFPCUPCDP. disseminated on a regular basis.
~~ 8. At least four regions with pastoral woredas have prepared regional Evaluation commissioned Disaster Preparedness Strategic Investment Plans for pastoral areas by MoFNFPCUPCDP. and have disbursed at least 50% of the DPSI finding allocation.
D. Project Coverage and Components
17. The primary target population for Phase I1is about 600,000 rural households in pastoral and agro-pastoral communities in 57 woredas ofthe Afar, Somali, Southern and Oromiya Regions.2 This represents approximately 45% ofpastoral and agro-pastoral woredas in Ethiopia. The Program is expected to have a positive impact on the income and wellbeing of several millionpeople living throughout the lowlands of Ethiopia.
18. The second phase ofthe PCDP will consist offour components: (i)Sustainable Livelihoods Enhancement, (ii)Pastoral Risk Management, (iii)Participatory Learning and Knowledge Management; and (iv) Project Management.
Criteria for the selection of the 23 new woredus eligible for Community Investment Fund assistance include: (i) adequate security conditions for implementation, supervision, monitoring and evaluation (M&E); (ii)road and communications accessibility; (iii)population; (iv) poverty and vulnerability as measured by food security needs; (v) the need to minimize overlap with woredus where similar activities are being supported by other projects; and (vi) proximity to existing Project woredas. Ofthese woredas, 16 have been identified and will be included from 2008 onwards, while an additional 9 will be added once IFAD financing becomes available in 2009.
10 Component 1: Sustainable Livelihoods Enhancement (SLE) (US$93.4 million, including US$5 1.9 million from the World Bank, US$21.7 million from IFAD, US$5.0 million from the Regional States and US$14.7 million from the Beneficiaries)
19. This component will further strengthen decentralized and participatory planning at the communitylkebele (sub-district) and woreda level, operating within the regional government structure. Women and men in pastoral and agro-pastoral communities will design and implement Community Action Plans (CAPs) that reflect their development priorities. Based on these CAPs, they will identify, budget, implement and evaluate subprojects. Capacity- building around community-based conflict management will also be emphasized, with training provided to a range ofactors including local officials (kebele, woreda) as well as leaders of customary institutions, pastoral associations and community-based organizations - to empower these actors and to help them develop the tools they need to be effective peace advocates within their communities and mitigate against intercommunity resource conflicts. Beneficiary communities will be supported by Project-financed Mobile Support Teams (MSTs), who will work with woreda administrations and associated sector offices.
20. Sub-component A: Community Investment Fund (CIF): Proposed community subprojects will be financed as grants through the CIF sub-component. In order to respect the diverse priorities ofthe pastoral communities, giving particular attention to poorer subgroups and to women, investments covered under the CIF will not be limited to specific sectors, with the exception of a short negative list. This sub-component will finance subprojects including but not limited to water supply, micro-scale irrigation, healthcare, education and rangeland management.
2 1. A Woreda Development Committee (WDC), comprising representatives ofthe woreda administration, customary institutions and beneficiary communities, will appraise and endorse CIF requests with the support of MSTs. CIF subproject proposals will be appraised against transparent criteria known in advance to all stakeholders and evaluated in accordance with technical standards of sector ministries. CIF subprojects will be implemented directly by beneficiary communities to build capacity, ensure correspondence ofinvestments to prioritized needs and guarantee accountability to the community. Beneficiary communities will be required to make at least a 15% community cash or in-kind contribution to demonstrate commitment, and this contribution will increase should communities wish to benefit from additional rounds of CIF support.
22. Sub-component B: Rural Livelihoods Program (RLP): This sub-component will support the establishment ofrural savings and credit cooperatives in beneficiary communities at woreda and regional levels, and the capacity-building ofassociated support services. The sub- component will draw upon the experience ofthe Ethiopian Rural Financial Intermediation Program (RUFIP) and other micro-finance projects in rural Ethiopia, with appropriate modifications to respond to pastoral social and economic environments and characteristics. Support for establishing pastoral Rural Savings and Credit Cooperative (RUSACCO) will be extended to both members ofincome generating grant beneficiary groups established under PCDP Iand other members ofthe respective communities as well as to interested new groups in selected woredas.
11 23. Support for establishing pastoral RUSACCOs will include awareness building programs and training. Once registered, pastoral RUSACCOs will be eligible for Project financing ofbasic office equipment, account books and promotional material, as well as a grant ofup to 200% of their pre-registration compulsory and voluntary savings as seed capital for income-generating activities for beneficiary communities, up to a limit ofBirr 50,000 each. The amount ofseed capital per pastoral RUSACCO may be increased for those pastoral RUSACCOs comprising more than 50 members, depending on their performance with respect to members’ savings mobilization and repayments of loans. Pastoral RUSACCOs will lend to their members under commercially viable lending terms and conditions, including at least two loan guarantors, with members’ borrowing limited to 200% oftheir savings at the time ofloan signature.
24. The RLP will be overseen by the Federal Cooperative Agency (FCA) and implemented through the Regional Cooperative Promotion Bureaus (RCPBs) and relevant Woreda Cooperative Promotion Desks (WCPDs). MSTs will provide basic training and support to pastoral RUSACCO’s at community level in areas where WCPDs require support.
Component 2: Pastoral Risk Management (PRM) (US$29.0 million, including US$20.4 million from the World Bank, and US$8.6 million from FAD.)
25. Sub-component A: Pastoral Early Warning and Response Program (PEWRP): A PEWRP will build on and expand geographically an ongoing woreda and livelihoods zone- based early warning process through the provision ofstudies, training and equipment. The program will be managed by the Early Warning and Response Department (EWRD) ofthe MoARD under a Memorandum ofUnderstanding (MoU) with the MoFA. It will be implemented by the regional Early Warning and Response Bureaus (EWRB) and woreda Early Warning and Response Desks (EWRD) with the support ofpartner civil society organizations (CSOs), which will help to collect and analyze basic household-welfare data for the early identification ofthe onset ofdisasters. In the medium term, and using part-time data monitors at community level, woredas will compile and analyze trends in household, environmental, economic and social conditions in discrete livelihood areas. These data will flow to regional EWRBs and the federal EWRD ofthe MoARD on a regular basis, providing information to trigger early non-food responses to declines in the welfare ofpastoral communities.
26. The pastoral Early Warning System (EWS) will provide information to assign each participating woreda to one offive “disaster stages”, with appropriate responses corresponding to each stage. Early response will be financed through Disaster Early Response (DER) Grants, which will be administered at regional level under a EWRD/EWRB management system supported by Regional Project Coordination Units (RPCUs). The Project will build sector capacity at woreda level to prepare Disaster Preparedness Contingency Plans (DPCPs) that identify both disaster mitigation and early response activities. Early response activities will be prepared in advance and held as “shelf plans” for implementation at the appropriate disaster stage.
27. DPCPs will also include information on disaster mitigation activities and will be aggregated at regional level. DPCPs will be prepared for all 132 lowland woredas during the first three
12 years ofPCDP 11. The plans will be developed in conjunction with the PSNP planning process at woreda level, with a particular focus on identifying vulnerable communities and households.
28. Sub-component B: Disaster Preparedness Investment Program: Regional Pastoral Development Office/Commission (PDO/C) will integrate DPCPs into a long-term strategic disaster preparedness strategy and prioritized Disaster Preparedness Investment Program (DPIP) for their respective regions. DPIPs will identify community, woreda and regional needs for long-term regional disaster preparedness and mitigation. To the extent possible, PSNP catchment-management proposals will be integrated into the DPIPs. The disaster preparedness strategy will be approved by a regional Steering Committee.
29. Each region will receive funding from PCDP I1to finance a number ofstrategic disaster preparedness subprojects prioritized in the DPIP through Disaster Preparedness Strategic Investment Grants (DPSI Grants). It is expected that these investments will include construction and rehabilitation of feeder roads, improved water supply and catchment management, fodder banks and rangeland improvement. The Project will provide technical assistance and staff capacity-building to support the development ofthe regional disaster preparedness strategies, DPIPs, and DPSI subprojects. Additional funding for strategic disaster mitigation investment is also likely to be available through the European Union (EU) Disaster Preparedness I1Program, other donor programs and, for more labor-intensive disaster preparedness investments, through the PSNP.
30. The Pastoral Risk Management (PRM) component will be coordinated by the PRM Officer in the FPCU and supported at regional level by PRM Officers located in the RPCUs. The Pastoral Early Warning and Response sub-component will be managed by the MoARD Early Warning and Response Department under the terms ofa MoUwith the FPCUiMoFA. The Disaster Preparedness Planning and Investment Program will be implemented by the regional PDO/Cs with the support ofthe PCDP PRM Officers and fiduciary staff.
Component 3: Participatory Learning and Knowledge Management (PLKM) (US$1.8 million, including US$1.3 million from the World Bank and US$0.5 million from FAD)
3 1. Sub-Component A: Participatory Action Learning: Participatory Action Learning pilots will be undertaken in selected beneficiary communities to apply and further develop methodologies for demand-driven approaches to participatory knowledge generation and innovation. This will start on a small scale with two Participatory Action Learning (PAL) facilitators per Project region. These facilitators will work with pastoral communities to help them identify their research and knowledge priorities. The Project will finance studies, equipment and advisory support from other research and development partners as requested by communities.
32. Sub-Component B: Knowledge Management and Networking: Knowledge management will be supported at regional and community levels; including through the establishment of small resource units on pastoral research and development as well as pastoral development networks at regional level. These networks will provide a forum for interested actors to share lessons and information on pastoral development issues in respective regions. This sub-component will also
13 support information exchanges and peace-building at community level, including through financing of studies ofinterest to communities in conflict. Finally, the Project will also support a knowledge fair to be held in conjunction with the annual Pastoral Day.
33. Sub-component C: Policy Studies: A modest budget will be made available to the MoFA and Regional Pastoral Development Commissions/ Bureaus to commission studies they regard as necessary to inform the implementation ofsocial and economic pastoral development policies.
Component 4: Project Management (US$8.9 million, including US$6.3 million from the World Bank and US$2.6 million from IFAD)
34. As during PCDP I,the Federal Project Coordination Unit (FPCU) located in the MoFA will continue to be responsible for overall PCDP I1management, annual planning, and fiduciary management, liaison with stakeholder groups at federal level, communication, M&E and reporting, staff capacity-building, and mobilization oftechnical backstopping. Given the decentralized structure ofthe PCDP 11, the Project will be managed substantially at the regional and woreda levels. At regional level, the Pastoral Commissions and Pastoral Development Bureaus will house the Regional Project Coordination Units (RPCUs), which have overall responsibility for PCDP I1implementation at regional level.
E. Lessons Learned and Reflected in the Project Design
35. Sustainable Livelihoods Enhancement. This was the largest component ofPhase I,and several key lessons have been learned with respect in particular to CIF activities. Key lessons include the following: The importance ofestablishing, in advance, annual budgets and work plans for beneficiary woredas and communities; The importance ofeffective sanctions for non-performing communities and woredas; The need for thorough and sustained capacity-building ofbeneficiary communities as well as MSTs and WDCs; The importance ofempowering communities with information and processes to enable them to lead local development processes and to hold WDCs accountable; The need to provide thorough procedures and systems to support IGAs if they are to be sustainable; The fact that the majority of Income Generating Activities (IGAs) are implemented by women groups and that these groups are based on and acceptable to local customs and culture; The importance offollowing through on community contributions as a measure to ensure genuine community ownership; and The need to ensure effective linkages with relevant sector counterparts at woreda and regional level.
36. Income-Generating Activities (IGAs). As rural cooperatives and micro-finance institutions were largely absent from pastoral areas, PCDP Isupported IGAs for vulnerable groups through
14 the CIF. As a means ofimproving the prospects for sustainability ofIGA investments in Phase 11, new activities in this area will be financed through Pastoral Rural Savings and Credit Cooperatives (RUSACCOs) under strict commercial lending conditions. Intensive capacity- building assistance will be provided for group formation, compulsory and voluntary savings and establishment ofRUSACCOS in beneficiary communities. This effort will be overseen by the FCA and coordinated with the ongoing Rural Finance Intermediation Project (RUFIP).
37. Water Supply and Sanitation. During PCDP I,the drilling ofboreholes was under the negative list ofPCDP-financed activities due to concerns associated with environment, cost and management. Given the importance ofdrinking water to pastoral communities, for both humans and livestock, PCDP I1plans to continue financing small schemes under the CIF and DER sub- components, while also strengthening linkages with Regional Water Bureaus to benefit from the established capacity at the regional level. In view ofthe recent up-scaling and expansion ofthe Water Supply and Sanitation Project (WSSP) into pastoral areas, requests for motorized boreholes will be referred to the WSSP wherever possible. In areas where the WSSP is not operational, the Project will apply relevant procedures outlined in the WSSP guidelines for pastoral areas as well as in the Project Implementation Manual (PIM) in appraising any proposed activities related to motorized boreholes.
38. Pastoral Risk Management. The PRM component ofPCDP Idid not achieve its development objectives fully for a number ofreasons, leading to the following lessons learned: (i) The importance ofa comprehensive approach that addresses early warning, mitigation and early response in an integrated manner and looks beyond short-term emergency responses focused on food; (ii) The need to develop clear operational procedures and implementation arrangements for such a system; and (iii) The value ofhousehold economic analysis approaches based on livelihood zones.
39. Research and Policy Reform. During PCDP I,the identification ofresearch to be commissioned by the Project was centralized. While the research undertaken provided some potentially usefbl information to guide policy and action, regional stakeholders had little say in what research was conducted. Moreover, the results ofthe research were neither widely disseminated nor translated into action. As a project seeking to empower communities, the PCDP I1will focus on involving pastoralists and local development-support organizations in forms of research that stimulate participatory innovation and adaptation to problems and opportunities and that enhance community capacities to make demands on formal research and extension services, Moreover, the PCDP I1will facilitate better networking and access to user-friendly information relevant for pastoral community development.
40. Conflict Management. Conflict is one ofthe major risks to pastoral livelihoods. Therefore, Phase I1will support activities related to peace-building and conflict resolution at the community-level across all components. As conflict dynamics in each ofthe Project’s regions of intervention vary, these activities will be adapted to local needs and opportunities and will be implemented in close partnership with experienced agencies.
15 41. Accountability. While PCDP Iincluded efforts to improve participation ofpastoral communities in subproject planning and implementation, and also engaged woreda and ministry line staff in community development processes, it did not seek to develop a structured effort to empower citizens to engage in woreda budgeting. PCDP I1will strengthen accountability measures in its procedures and will pilot accountability measures appropriate for local development in pastoral areas.
42. Project Management. In Phase I,a relatively small number ofProject staff accomplished a great deal in a challenging environment. Lessons for what is required for effective implementation ofPCDP I1activities include the following: The need for a clear set and shared understanding ofroles and responsibilities at all levels ofthe Project, as well as incentive and enforcement mechanisms for performance; The need for continuous staff training and adequate allocation ofresources to enable the FPCU and RPCUs to provide effective support to beneficiary communities and woredas, including through MSTs; The value ofpartnerships with sectoral and regional stakeholders, as well as civil society actors; The need for timely and effective M&E and Management Information System (MIS) in order to effectively assess progress and impacts, and to facilitate informed management; The need for a communication strategy to ensure greater awareness ofPCDP I1 activities and accomplishments among partners; and The importance ofensuring strict adherence to financial management and procurement systems, in particular the need for sustained support and oversight of procurement at the sub-national level.
F. Alternatives Considered and Reasons for Rejection
43. Sectoral vs. Holistic Focus. Past Bank interventions in Ethiopia's lowlands have been sectoral, focusing on livestock health, NRM and rural infrastructure. While successfbl in providing services in the short term, the narrow focus ofthese programs and their lack of community participation compromised their sustainability. Government policy now favors more holistic and participatory approaches to pastoral development.
44. Centralized vs. Decentralized Implementation. Past lowland projects have been centrally managed. However, this project has had good success to date with the devolution ofmany management functions to regional, woreda and particularly community level. The federal government, in turn, focuses on coordination, advocacy and policy reform issues. Decentralized implementation supports the GoE's commitment to strengthen the role ofworedas and communities in development planning and enhances accountability.
16 111. IMPLEMENTATION
A. Partnership Arrangements
45. IFAD will continue to co-finance Phase I1 ofthe PCDP. It has earmarked US$33.5 million for this purpose. These resources are expected to become available by June 2009.
B. Institutional and Implementation Arrangements
46. Project Oversight. The Ministry ofFederal Affairs will have overall responsibility for supervision ofthe Project. Oversight for Phase I1will be provided by the Federal Inter- ministerial Board (FIB). At regional level, Project Steering Committees will be established and will include a representative ofthe office for Women’s Affairs. The FIB will review progress ofthe PCDP I1 on a semi-annual basis and work plans on an annual basis. The MoUwill govern the operational relationships with Ministry ofWater Resources (MoWR) and FCA.
47. Federal Management: As during PCDP I,overall project coordination will continue to be carried out by the Federal Project Coordination Unit (FPCU) attached to the Ministry of Federal Affairs (MoFA). The FPCU will continue to be responsible for overall project management, annual planning, fiduciary management, liaison with federal stakeholder groups, project communication, overall M&E and reporting, strategic staff capacity-building and mobilization oftechnical backstopping.
48. Regional and Woreda Management. The Project will seek to continue to strengthen existing government structures at regional and woreda level, as appropriate. RPCUs will continue to report to existing regional institutions, i.e. the Pastoral Development Commission (Oromiya); the Pastoral Development Coordination Office (Somali), the Pastoral and Rural Development Bureau (Afar) and the Food Security and Pastoral Development Coordination Bureau (Southern Region). The Project has established RPCUs within these offices. The role ofthe RPCUs will be at regional level to: (i)manage project fund flows and liaise with relevant bureaus and the federal level; (ii)oversee the CIF; (iii)supervise MSTs; (ii)oversee the PRM component; (iv) oversee the PLKM component; (v) facilitate capacity-building activities at community and woreda level to improve planning and provision ofsupport services; (vi) monitor and report; and (vii) provide technical assistance in procurement management at woreda and community levels.
49. The RPCUs are supported by Project-financed MSTs, which will provide capacity-building with the aim offilling existing capacity gaps at both community and local-government level. The roles ofthe MSTs are to: (i)provide initial orientation and ongoing training using a “learning-by-doing’’ approach and introduce communities and woredas to the Project; (ii) support the preparation and review of community sub-proj ect procurement plans; (iii)facilitate communication between communities and formal government structures; (iv) assist woredas to appraise and approve CIF subprojects; (v) provide support to the formation ofpastoral RUSACCOs and related livelihood activities; (vi) monitor; and (vii) assist with woreda funding mechanisms. An MST will cover no more than three woredas and some MSTs will be based in small sub-regional offices to improve their access to beneficiary communities. In
17 addition, the Project will deploy financial accountants in each CIF beneficiary woreda to support sub-proj ect financial management.
50. Sustainable Livelihoods Enhancement. The concept ofCommunity-Driven Development (CDD) is central to this Project, and communities themselves constitute the primary implementing agencies for the CIF sub-component. Communities will identify, appraise, implement, monitor and evaluate subprojects which are financed through the CIF. They will also be closely involved, as part ofthe woreda prioritization process, in the design and implementation ofDPCPs through the DER sub-component ofthe Project. In addition, they will participate in the M&E. Up to two percent of the CIF community sub-project investment can be used to cover the operational costs ofcommunity participation in its development. Communities could designate a Community Facilitator (CF) to serve as a focal point if they wish. The CF would help coordinate the investment implementation and represent the community’s interests at various fora. The CFs will also be able to assist in group formation and provide support for savings and loan groups to be financed via pastoral RUSACCOs. Procedures for selection of CFs will be specified in the PIM.
5 1. Definition of “Community ’I. This varies from region to region and also within regions, requiring a flexible approach to identifying social groupings with which the Project can work. Local institutions and social groupings may take different forms and names. Therefore, all community-based interventions will be informed by a participatory analysis oflocal socio- economic structures. It is intended that a coalition of community groups, including traditional organizations and groups representing specific interests (women, youth, environment, culture etc) will work together to set community development priorities and manage their implementation. Inter-community dialogue will be promoted to encourage peace-building and intercommunity conflict resolution where necessary.
52. Implementation ofthe formation and establishment ofpastoral RUSACCOs will be overseen by the Federal Cooperative Agency (FCA) and implemented through the Regional Cooperative Promotion Bureaus (RCPBs) and relevant Woreda Cooperative Promotion Desks (WCPDs), supported by MSTs, who will be trained in savings and credit cooperative development. Pastoral RUSACCO operating procedures will be specified in the PIM.
53. Pastoral RiskManagement. The Pastoral Early Warning and Response Program will be implemented by the EWRD/MoARD under the terms of a MoUsigned with MoFA. The EWRD/MoARD will undertake the day-to-day management ofthe Project-financed early warning and response activities, including the preparation ofDPCPs, collection ofhousehold economic data at woreda level, and its processing and analysis at regional level through Early Warning and Response Bureaus (EWRBs). CSOs are expected to play a role in supporting DPCP preparation and data collection. The DER Grants will be managed by regional EWRBs with the fiduciary support ofRPCUs.
54. The Disaster Preparedness Investment Program (DPIP) sub-component will be coordinated by the regional PDO, based on information collected from woreda DPCPs and a wider analysis ofthe natural resource base and its traditional use. Prioritized disaster preparedness investments will be financed through procedures specified in the PIM. The
18 FPCU/PCDP will support the implementation ofthe PRM component through the appointment ofa PRM coordinator in the FPCU and PRM officers in each RPCU. The PRM staff ofthe FPCU and RPCUs will work closely with the EWRD, regional and woreda PDOs, regional Disaster Prevention and Preparedness Bureaus (DPPBs) and woreda Disaster Prevention and Preparedness Offices (DPPOs) and other stakeholders to support PRM implementation.
55. Participatory Learning and Knowledge Management. The PLKM component will be coordinated by the Participatory Learning and Knowledge Management Officer in the FPCU in collaboration with the Communication Officer in each RPCU. The FPCU will be responsible for setting up the information unit at national level, whereas the RPCUs will be responsible for setting up the regional information units in the offices ofthe Pastoral Development Offices, Pastoral Development Bureaus, or a regional pastoral forum. The RPCUs will be responsible for facilitating regional pastoral development networks.
C. Monitoring and Evaluation of Outcomes and Results
56. Monitoring and evaluation (M&E) ofPCDP I1will be a results-based framework with an emphasis on project impacts and outcomes, as well as the regular monitoring ofinputs and outputs covering the four project components. Based on the M&E experience from PCDP I, procedures and tools will be simplified. The system will include the following areas: (i) outcome/impact evaluation; (ii)implementation and process M&E; and (iii)Participatory Monitoring and Evaluation (PM&E). The PIMwill include a detailed outlining M&E systems, procedures and tools.
57. The outcomes/results ofactivities will be measured by a set ofqualitative and quantitative indicators (see Annex 3). Baselines for these key indicators will be collected through secondary data available through partner organizations. Any gaps in the data will be filled by data collection during the first year ofPCDP 11. Monitoring data will be entered into the Management Information System (MIS) and shared through semi-annual MIS-generated reports. This information will be used to make adjustments to the strategies, mechanisms and activities during project implementation. The current MIS will be upgraded to include a range of data on the agreed performance indicators, some qualitative data derived from participatory monitoring and household economic analysis available through the EWRD and monthly monitoring of contingency plans.
58. PCDP I1will revise and simplify the phase one PM&E approach and train its staff and communities on a new and user-friendly PM&E procedures to be specified in the PIM. PM&E will be instrumental in promoting community participation and improving the effectiveness of Project M&E. Relevant instruments will be used to gauge user perceptions (on availability, access, satisfaction and quality) ofbasic services, as well as RUSACCOs, and provide valuable feedback to service providers. PM&E will also be used to assess communities’ perceptions of empowerment and participation.
59. Overall responsibility for M&E will rest with the M&E specialist ofthe FPCU, who will be supported by an MISAT Specialist. At regional level, the Project will recruit Regional Monitoring Officers and MISAT Specialists. The Regional Monitoring Officers will work closely
19 with the MSTs, which will including a monitoring focal point. Woreda Project officers will have a monitoring and reporting function. MSTs will support communities’ PM&E efforts.
60. Evaluation activities will be contracted out to a qualified organization to be selected on a competitive basis. This organization will undertake impact assessments and performance evaluations ofall project components at mid-term and in the final year ofPhase 11.
D. Sustainability
61. Sustainable Livelihoods Enhancement. Institutional sustainability ofthis Project will depend primarily on capacity-building and community ownership. While community action plans will be implemented with external technical and financial assistance, decisions on the content ofsuch plans will rest ultimately with communities. Once communities acquire the knowledge, awareness and necessary skills to design, implement and maintain subprojects, sustainability of institutional objectives will be likely, provided that financing is available. Local governments have demonstrated their support for participatory approaches in Phase I.Greater ownership by the Regional Governments would firther improve the effectiveness and sustainability ofthe approach. To this end, PCDP I1will seek to engage the regional governments systematically in annual planning and reviews, as well as co-financing.
62. Financing for local development in Ethiopia will continue to rely on central and donor sources for the foreseeable future, since the level ofpoverty is such that substantial local revenue generation is challenging in most ofthe communities. PCDP I1 financing flows are intended to “prime the pump” offiscal decentralization through woredas. In this context, linkages with the Local Investment Grant (LIG) activities planned under the next phase ofthe PBS program will be explored as the programs respectively develop.
63, Adequate planning for operations and maintenance will be reinforced by CIF, DER and DPSI Grant procedures committing communities to identify funding mechanisms and set aside finds for the fiture repair and maintenance ofProject-financed capital investments as appropriate. Where relevant, woreda offices and regional sector bureaus will be required to commit resources for complementary services (e.g. teachers, books) for social infrastructure prior to the approval ofsuch subprojects.
64. Pastoral Risk Management. The Project will provide the necessary resources and capacity- building to enhance the effectiveness and geographic coverage ofgovernment’s institutional arrangements. The PEWsub-component will help to institutionalize the government’s disaster monitoring and reporting procedures across all lowland woredas and establish systems and software for data reporting and analysis. For the DPIP sub-component, the management and maintenance ofdisaster preparedness resources will be transferred to either woreda administrations or communities depending on their size, type and location. Woreda budgets will include finding for the operation and maintenance ofrelevant Project-supported investments as necessary.
65. Participatory Learning and Knowledge Management. The sustainability ofPLKM activities will depend primarily on the quality of capacity-building that can be provided. Once pastoral
20 communities acquire the confidence, skills and linkages to formulate demands on research and extension services (both governmental and non-governmental), sustainability ofinstitutional objectives will be likelier. Also, the capacity-building and experiential learning within research organizations working together with the PCDP 11, as well as sharing ofexperiences with other projects and agencies via the pastoral development fora at regional level should create support for a more demand-driven approach to generating knowledge and innovations suitable for pastoral areas.
66. Environmental sustainability should be enhanced through the incorporation ofmultiple sources ofknowledge, including pastoralists’ own knowledge oftheir environment, and the development ofappropriate technologies and institutions to manage natural resources in a more sustainable way. The participatory research should lead to sustainable strategies for addressing environmental challenges such as bush encroachment and weed invasion. The approach adopted carries a high probability that the results ofthe Participatory Action Learning and adaptive research will lead to innovations that will be relevant for pastoral areas, low-cost and largely dependent on locally available resources and skills.
67. Responsibility for managing, maintaining and improving the pastoral resource units to be built up in Phase I1will be progressively assumed by appropriate state or civil-society organizations (CSOs) such as the regional Pastoral Development Commissions or pastoral associations. The mechanisms for this will be developed during this second phase ofthe PCDP.
E. Critical Risks and Possible Controversial Aspects
68. Before the start ofimplementation ofPhase Iin 2003, the Project Appraisal Document identified seven potential risks faced by the program. These included: (i)competition for a diminishing natural resource base exacerbating conflicts; (ii)lack ofcooperation between Government and CSOs; (iii)timing and implementation ofpolicy reform measures; (iv) lack of experience with participatory development; (v) lack ofcapacity among project staff; (vi) inadequate animal health coverage in remote areas; and (vii) capture ofProject resources by local elites. Overall, program risk was determined to be substantial. After four years of dialogue, Project implementation, and capacity-building, many ofthese risks have been reduced significantly. Phase I1must however continue to address these risks, as well as additional risks to achievement ofthe long-run development objectives ofthe Program. Key risks to PCDP I1 and associated mitigation measures are identified in table 4 below:
21 isk Factors Mitigation Substantial PCDP I1will continue to invest in the capacity oreda and kebele levels) of local government personnel and to advocate n many pastoral areas. with regional governments for greater over of assigned local continuity of local government staffing. Clearer guidelines, more frequent visits from project MSTs, access to training and a more robust M&E system will also help to mitigate against this risk. Additional investments in the capacity of communities will allow them to play a leading role in CIF sub-projects. PCDP I1will strengthen fiduciary systems at all levels, including through the deployment ofFinance Assistants to all project CIF woredas and procurement experts in MSTs. Substantial PCDP Iwas designed to reduce this risk and has largely worked effectively in the past. This will be reinforced in Phase I1by strengthening ofMSTs to enable them to support improved compliance of communities and local government officials with project rules and safeguard interests of the poor. The Project will recruit internal auditors in high-risk regions. There will also be further strengthening of subproject accountability measures at community and woreda levels. PCDP activities may be disrupted due to Substantial The Project will establish criteria for conflict. (High in continuing with and/or initiating new Somali region) activities in conflict-affected areas. In areas where conflict significantly hampers implementation, supervision or monitoring, project activities may be suspended. The Project will establish criteria and procedures for re-engagement in such areas when the security situation stabilizes. The Project will also invest in community- based conflict resolution capacity-building activities, and conflict resolution training will be provided to Project staff and local government personnel Social analyses will be conducted in new areas of operation and will include an assessment ofconflict risks. Monitoring systems will include conflict indicators. GoE fails to develop a comprehensive Substantial Government is currently reviewing its national policy and institutional framework for disaster management policy and the associated risk management in pastoral areas institutional framework. PCDP I1will seek to strengthen the capacity ofthe reformed framework through support to
22 Table 4: PCDP I1Risk Factors Description of Risk I Probability I Mitigation the EWRDMoARD and the expansion of the livelihoods based EWS in pastoral areas. PCDP activities as well as livelihood Substantial The PRM component is designed to mitigate gains may be undermined by a natural against this risk through the strengthening of disaster, in particular a severe drought early warning and response systems. Project monitoring and evaluation fails to Substantial Monitoring procedures and systems to be provide timely and useful information on reinforced at all levels of Project Project implementation progress and implementation arrangements. results. Mid-term review and final evaluation to be contracted to a qualified external organization.
F. IDA Financing Conditions and Covenants
Conditions for Effectiveness (i) The Recipient has adopted a Project Implementation Manual, setting out the administrative and financial procedures including procurement and disbursement procedures, in form and substance satisfactory to the Association. (ii) The Recipient has submitted a project implementation plan for the first eighteen months ofthe Project, in form and substance satisfactory to the Association. (iii) The Recipient has submitted evidence satisfactory to the Association demonstrating the clearance of any material balances in the inter-fund accounts under the first phase ofthe Program.
Covenants (0 Not later than 60 days following the Effective Date, the Recipient shall ensure that a memorandum ofunderstanding for the management ofthe Pastoral Early Warning and Response program has been duly executed between the Early Warning and Response Department ofMoARD and the FPCU within MoFA, in form and substance satisfactory to the Association; (ii) Not later than 60 days following the Effective Date, the Recipient shall ensure that a memorandum ofunderstanding for the management ofthe rural livelihoods program has been duly executed between the Federal Cooperatives Agency (FCA) and the FPCU within MoFA, in form and substance satisfactory to the Association; and (iii) In order to ensure the proper financing ofthe Project, it shall make available to the FPCU not later than: (i)October 15,2008 an initial amount equivalent to $1,000,000 for the first year of implementation ofthe Project; and (ii)October 15 ofeach Fiscal Year thereafter during Project implementation, such amount as shall be required to ensure that the FPCU has available to it a total ofthe initial amount referred to in point (i)above ofthis section for the following Fiscal Year.
23 IV. APPRAISAL SUMMARY
A. Economic and Financial Analyses
69. The Project is expected to have significant economic and social benefits in four areas: (i) increased capacity for risk management and early response at local and national level; (ii) effective citizens’ consultation and participatory development, strengthening local ownership and generating improvements in access to and provision ofbasic public facilities and social services; (iii)increased pastoral community access to sustainable financial services and associated increases in incomes; and (iv) greater effectiveness in public administration through capacity- building, community participation and accountability.
B. Technical
70. The following issues are likely to feature prominently during the implementation ofPCDP 11. The specific types oftechnical innovations that will be addressed by the Project will depend on the interests and needs identified by the pastoral communities and woredas.
71. Water Supply and Sanitation. The GoE is implementing a national Water Supply, Sanitation and Hygiene (WaSH) program, which includes the pastoral regions. This follows the Water Supply and Sanitation Project (WSSP), which began in November 2004. The WSSP aims to ensure sustainability through increased local participation and capacity-building. In addition to creating implementation capacity at regional, woreda and community level, the program has supported the preparation of a number ofguidelines, manuals, systems and procedures, including: “Implementation Guideline for Water Supply Sanitation and Hygiene Projects in Pastoral Areas”. PCDP I1will seek to benefit from the existing capacity at the regional level, Woreda Support Groups and Community Facilitation Teams to assist in the preparation, training, study, design and construction supervision, and M&E ofwater-related subprojects wherever possible.
72. Motorized Boreholes. Appropriately located and effectively managed boreholes can be highly valued sources ofclean, reliable and ofien cheap water supply. However, experience in many arid and semi-arid areas has shown that, where water becomes available in large quantities, there is a risk that the concentration ofpeople and livestock can lead to significant ecological damage. Control by one community or subsection ofa community over a new or large source of water in arid lowlands can lead to exclusion or inequity within the communities and potentially exacerbates conflicts. Moreover, the costs involved in locating and drilling deep aquifers are high (preliminary estimates in Ethiopia indicate drilling in the Afar and Somali lowlands to be about 3000-3500 Ethiopian Birr per linear meter). The operation and management ofsuch schemes typically exceeds communities’ financial and technical capacities. Therefore, the CIF and DER sub-components ofthe Project will focus on financing small schemes such as hand-dug wells and shallow drilled wells fitted with hand pumps, spring development, ponds, hafirs and birkas.
73. PCDP I1will further strengthen links with Regional Water Bureaus to benefit from the established capacity at regional level. Requests for motorized boreholes under the regional DPSI sub-component will be referred to the WSSP wherever possible. In areas where the WSSP is not
24 operational, the Project will apply relevant procedures outlined in the WSSP guidelines for pastoral areas as well as in the PIh4 in reviewing any activities related to motorized boreholes. This will include: (i)preparation of Woreda Water Development Plan (WWDP) in pastoral areas is a necessary condition to ensure efficient and sustainable water development initiatives; and (ii) completion of an Environmental and Social Impact Assessment Report on any the planned drilling ofboreholes that will be sent to IDA for review and clearance prior to the commencement ofconstruction activities.
74. Animal Health is ofprimary concern to pastoralists. Effective interventions depend on a sound understanding ofdisease epidemiology, particularly when related to disaster-based interventions. Ethiopia’s epidemiological capabilities have been constrained by conflicts, inadequate resources, limited technical service outreach and lack ofcommunity-based disease- surveillance capability. To the extent that animal health is prioritized by pastoral communities, the Project will support an integrated approach to animal health services through: (i)training of Community-based Animal Health Workers (CAHWs) in traditional ethno-veterinary and “first- aid” clinical procedures and as frontline disease-surveillance scouts at community level; and (ii)establishing linkages between central public-sector support services and private-sector woreda- and community-based practitioners.
75. Forage Supply is central to livestock performance. It is likely that demand-driven Participatory Action Learning (PAL) and supportive research will address some issues in this connection, e.g., setting aside pasture areas for range rehabilitation and drought reserves, expanded use ofindigenous fodder, testing ofintroduced fodder species, fodder conservation and strategic feeding strategies for immature and lactating female stock.
76. Natural Resource Management (NRM). Two interdependent components oftraditional rangeland management which have maintained a sustainable pastoral production system are: (i) controlling access to water resources; and (ii)managing wet-season and dry-season pasture. For the most part, the Ethiopian rangelands have to date escaped the worst excesses ofunfettered access and unsustainable water exploitation. Water and pasture management is also an essential element for effective disaster preparedness. The participatory planning processes at woreda and community level to be continued in PCDP I1will permit more effective management ofwater and pasture resources.
77. Livestock and Animal Product Marketing are central to improving pastoral livelihoods, implementing environmentally sound NRM practices and formulating plans for disaster preparedness. Timely herd off-take and easy access to markets are essential in drought- preparedness planning. The Project will encourage pastoral communities to develop culturally acceptable strategies for commercial destocking in the event ofdrought and for restocking during the drought-recovery phase.
78. Bush Encroachment is one ofthe most critical problems in rangeland management, with invasive species advancing onto the fertile riverine soils ofthe Awash Valley (Afar) and into the more productive valley bottoms (Borana). While manual, chemical and mechanized packages have been successfully employed elsewhere for bush control, the current GoE policy on bush burning, tree felling and charcoal making has constrained options for countering bush
25 encroachment. Although pastoralists are adapting to their changing environment through shifts in herd composition, bush encroachment threatens the sustainability of some pastoral systems. The PCDP I1will support pastoral-led research into the role offire, rangeland set-aside procedures and various forms ofclearing to inform relevant policy reform where required.
79. Irrigated Farming. This offers some potential for improving food security ofpeople in the lowlands, if it can be done in ways that do not disturb the pastoral grazing and watering systems. High river banks along many lowland rivers often necessitate pumped irrigation, although water-spreading technology, primarily for fodder production, may be possible in some areas. The cost ofpumped irrigation must be carefully evaluated against the value ofthe crops produced. Reliable water supply can also be a constraint. Irrigated farming, when combined with ill-defined land-use rights, also carries the risk ofelite capture and conflict.
80. Subproject Plans involving simple infrastructure will require careful planning prior to presentation for financing approval. The plans will be assessed according to technical, financial, environmental, operations and maintenance, and sustainability criteria to be specified in the PIM. As ministries such as health, works and urban development, education, roads, environment and agriculture will be involved, protocols will be drawn up to formalize collaborative guidelines at regional level. Woreda-based technical staff will be closely associated with the entire process, providing support to communities from the initial planning and design stage, to implementation and, finally, to ongoing management ofsubprojects.
C. Fiduciary
8 1. Procurement. A procurement capacity assessment has been carried out at MoFA and the FPCU, as well as on a sample ofthe woredas that will be implementing PCDP 11. Under PCDP 11, the definition of a community is area-specific, but the project structures i.e. Project Management Committees, Project Procurement Committees and the Project Audit Committees will be accountable for the procurements by the communities.
82. Several-studies in various areas ofprocurement have been or are being undertaken as part of the GoE’s ongoing procurement reforms. The Public Procurement Agency is in the process of finalizing a Manual ofPublic Procurement, and is also in advanced stages ofconducting an assessment ofthe actions needed to professionalize the public procurement function. These activities are supported by various development partners including the Bank through the PSCAP, and are geared to fill the enormous capacity gap in the public procurement fbnction.
83. The last Country Procurement Assessment Report (CPAR) done in 2002 identified procurement capacity as one ofthe major weaknesses in public sector procurement. Some progress has been recorded from the measures taken to implement the recommendations ofthe CPAR. A public procurement law was enacted in January 2005, and Standard Bidding Documents (SBDs) were prepared and issued to be used for all procurements financed by public funds. The autonomous Regional Governments are expected to adopt the public procurement law, the Determining Procedures of Public Procurement and establishing its Supervisory Agency Proclamation No. 430/2005 as well as the Federal, Public Government Procurement Directive to govern public procurement in the region.
26 84. Except for Harar region and Dire Dawa city administration, all other regional governments and Addis Ababa city administration have adopted the public procurement law as well as the public government procurement directive to govern public procurement at the sub-national level. All procurement under the project will therefore take place under the new legal framework for public procurement. The Bank has not been actively involved with the procurement reforms at the sub-national level, and only the CPAR update planned for FY2010 will provide an insight of the standard and practices ofpublic procurement at the sub-national level.
85. The capacity gap to implement Bank financed procurement is widespread at the national level and is even bigger at the sub-national level across Ethiopia. Therefore, the PCDP 11: (i)will provide to staff involved in the project procurement fbnction access to procurement training, refresher procurement courses, and hand-holding support from the MSTs; (ii)will finance at least one Procurement Officer position at the RPCU in addition to the Procurement Officer and Procurement Assistant positions at the FPCU to provide oversight for the procurement function at the sub-national level while each MST will include a Procurement Officer to support procurement planning, implementation, and reporting at the Woreda and Community levels; and (iii)the standard bidding documents/templates and the procedures for Community Participation in procurement will be detailed in the Procurement and Contract Administration Manual part of the Project Implementation Manual that the government is preparing and will submit to the Bank for approval. Manuals will be translated into the local languages commonly used by the project implementation agencies and communities.
86. Financial Management. All implementing entities follow the government accounting system - double entry accounting system on a modified cash basis. The project has a financial management manual which spells out important internal control and accounting procedure. The current manual, however, lacks adequate information on the formats ofInterim Financial Report (IFR), updated chart ofaccounts, and important internal control procedures on imprest / petty cash system and segregation ofduties, etc.
87. The FPCU, all RPCUs and most woredas offices are using Peachtree accounting software for the project find. This system is capable ofproducing the required financial deliverables for the project. However, few woredas have not yet introduced a computerized accounting system due to lack of electricity, computer and other facilities. Instruction has been given by the FPCU that all woredas should use the project fund to acquire the necessary facilities and introduce the computerized system.
88. Each ofthe implementing agencies (RPCUs, FPCUs and woredas) are responsible for maintaining the project’s records and documents for all financial transactions occurred in their offices. These documents and records will be made available to the Bank’s regular supervision missions and to the external auditors.
89. Each community audit committee will maintain a simple accounting book, which shows the amount ofmoney received and expenditures made for CIF subprojects. All the supporting documents from the community should be submitted to the respective woreda finance office along with regular financial reports.
27 90. Actions outlined in the Financial Management Action Plan will be undertaken by the project to strengthen the financial management system. The actions required before effectiveness ofthe IDA Credit and Grant financing are: (i)the revision ofthe Financial Management Manual for the project, and (ii)clearing all material inter-find account balances. The other actions that will strengthen the financial management system and should be implemented are: (i)the recruitment ofthe external auditor to ensure the project accounts are audited and submitted to the Bank in time within 90 days ofIDA Credit and Grant Effectiveness; (ii)recruitment ofinternal auditors in Somalia and Afar regions within 180 days ofEffectiveness.
91. In order to ensure that the project is effectively implemented, the FPCU and RPCUs will ensure that appropriate staffing arrangements are maintained throughout the life ofthe project.
92. The overall conclusion ofthe financial management assessment is that the project’s financial management arrangements satisfy IDA’Sminimum requirements under OPBP 10.02 except for the issues mentioned in the Action Plan shown in Annex 7.
D. Social
93. Over the centuries, pastoral communities have devised coping strategies, including mobility ofhouseholds and herds, to suit the fluctuating climatic conditions in which they live. The Project will strive to respect and build on these indigenous mechanisms and strategies. The Project is expected to contribute to the following social development outcomes: (i)improved living conditions ofpastoral communities, through diversifying and increasing production and income ofpastoral households and increasing their access to social and technical services; (ii) increased capacity ofbeneficiary communities to manage their own development in an equitable and sustainable way, through promoting gender and poverty-sensitive decision-making and implementation ofdevelopment-oriented activities under their ownership; (iii)increased influence ofpastoral communities on research and development agendas and policies; and (iv) increased community capacity for conflict-management and conflict resolution.
94. However, the Project must continue to be aware ofthe potential constraints it will face in decentralizing social and technical support services and in implementing community development activities in an equitable and inclusive way. These include: conflicting traditional and modern systems for access to and tenure of natural resources; expansion ofcrop farming into key grazing areas; reduced mobility and greater concentration ofpeople and livestock around permanent water points; limited opportunities for employment and income generation outside ofagriculture; the weak economic position ofwomen in pastoral society; erosion of traditional social safety nets; scarcity oftechnical support facilities; low levels offormal education and literacy; limited access to market, financial services and information; and incidences ofviolent conflict.
95. No single project is able to address this range ofchallenges. However, PCDP I1will include the following elements to address some ofthe key challenges identified above:
28 Ensuring an improved understanding ofpastoral social dynamics by undertaking social analyses in new Project woredas, especially in Southern and Oromiya Regions; Strengthening community participation by: (a) institutionalizing participation of communities in community-led planning and implementation ofCIF subproject; (b) use ofParticipatory Learning and Action (PLA) tools to ensure that all members of the community (men, women, young, old, rich, poor) are able to express their views and needs; (c) strengthening the capacity ofcommunity leadership to engage with woreda authorities; and (d) use ofcommunity-based M&E methods to enable the communities to assess the impact ofProject activities on their lives; Integrating conflict resolution capacity-building activities in all Project components; Helping pastoral communities to diversify their livelihood options; Providing capital financing to improve access to and delivery ofeducation services; Encouraging greater awareness of and providing information about pastoral issues among relevant policymakers.
96. In order to institutionalize participation, the Project will invest in training for communities and local government authorities. PCDP I1will seek to further empower citizens and pastoral communities to engage in local development decision-making and performance monitoring. Identification ofcapacity constraints and priority issues will be carried out at the local level and determine the types ofinstruments to be adopted. Instruments may include mapping, community score cards and citizen report cards, participatory planning and budgeting, budget reviews and budget tracking.
97. The experiences in Phase Ihave shown complementarities in the work ofthe PCDP and CSOs in pastoral area. There is a shared understanding that capacity-building and awareness- raising activities by CSOs working together with MSTs can usefully extend and deepen the latter’s outreach. CSOs may similarly be an important resource to MSTs and RPCU staff around conflict analyses and conflict management activities. CSOs involved in the Japanese Social Development Fund (JSDF) supported work have appreciated the opportunity to participate in the planning ofPCDP 11. In addition to the ongoing work supported under the current JSDF grant, the PCDP I1may contract CSOs to provide training services (including refresher training) for community groups, and providing them with follow-up backstopping support as necessary.
98. Attention to women’s issues will remain an important feature ofthe PCDP 11. Women in pastoral societies have heavy physical tasks not only related to homemaking (e.g. fetching water and fuel, building and dismantling huts) but also in caring for livestock, milking cattle and goats, and processing and selling milk products. Some agro-pastoral women are also involved in petty trading and other activities such as teashops, handicrafts and small-scale gardening. Men, however, typically still control factors ofproduction in livestock keeping and crop farming, and dominate decision-making in the traditional socio-political structures. The Project will continue to seek ways to involve women in situation analysis and planning of development, so that community projects will also address women’s needs. In addition, the development ofwomen- pastoral RUSACCOs will be encouraged, in order to build upon the
29 positive experiences with women-led IGAs during Phase I.The Project team will be trained and will train others in gender awareness.
E. Environment
99. PCDP I1is directly focused on enhancing the livelihoods ofpoor pastoralists through improved management ofnatural resources and reduced vulnerability to environmental shocks such as drought. To enhance sustainable pastoral livelihoods, the CIF will support investments in, for example, micro-scale irrigation and rangeland management, and the RL,P will support investments in rural livelihood activities less susceptible to environmental shocks. The DPIP will make strategic natural resource investments for disaster preparedness such as improved water supply, catchment management and range improvement. PCDP I1will also support the development ofregional preparedness strategies for natural disasters, and will fund priority investments to implement those strategies.
F. Safeguard Policies
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [XI [I Natural Habitats (OP/BP 4.04) [I [XI Pest Management (OP 4.09) 1x1 [I Physical Cultural Resources (OP/BP 4.1 1) [I [XI Involuntary Resettlement (OP/BP 4.12) [I [XI Indigenous Peoples (OP/BP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety ofDams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP 7.60)* 11 [XI Projects on International Waterways (OP/BP 7.50) [X 1 [I
100. PCDP I1is an Environmental Assessment Category “B” project. It will finance small- scale community-driven subprojects under the CIF, RLP and DPIP, some ofwhich will require environmental management. These can include schools, health posts, veterinary posts, small- scale water supply and irrigation, small feeder roads, catchment management and rangeland improvements. An Environmental and Social Management Framework (ESMF) for community subprojects was prepared that specifies subproject screening procedures, the preparation of environmental and pest management plans as required, and implementation supervision to ensure that adverse impacts are avoided or minimized. Since Borrower capacity to address safeguards issues is relatively weak, the ESMF specifies training and capacity-building requirements at federal, regional and woreda level to support effective implementation. M&E procedures will track ESMF implementation and provide for annual reviews to support continuous performance improvement. The ESMF was made available at the InfoShop on March 26,2008 and in-country on the same date.
’ By supporting theproposedproject, the Bank does not intend to prejudice the final determination of the parties‘ claims on the disputed areas
30 101. Indigenous Peoples: PCDP Iwas largely implemented by and with the pastoral peoples that form the dominant society in the respective Project areas. They will continue to be the beneficiaries ofthe Project investments in phase 11. Such groups cannot be regarded as "indigenous peoples" in terms ofOP 4.10, i.e. social groups distinct from the dominant society that are vulnerable to being disadvantaged by the Project. Therefore, this safeguard policy is not triggered. PCDP I1will institute social screening and social analysis in any new areas into which it expands in the Southern and Oromiya regions in Phase I1to ensure that any minority and/or marginalized groups are recognized and their needs addressed. In the event that this social screening identifies the need to trigger the World Bank's Indigenous People's policy, an Indigenous Peoples Development Plan will be developed to ensure the interests and needs of such groups are addressed in accordance with Operational Policy 4.10.
102. Safety of dams: This Project will not finance large investments aimed at dam construction and is in accordance with this safeguard policy.
103. Projects on International Waterways: OP 7.50 is triggered because the project will finance small-scale irrigation investments along international waterways. Riparian notification was given to the governments ofKenya and Somalia for PCDP I,and PCDP I1investments will not result, cumulatively, in more project-financed irrigated area than specified in that notification. Thus, a new OP 7.50 notification is not required. PCDP I1will not finance irrigation investments in areas not covered by the original notification.
G. Policy Exceptions and Readiness
104. Readiness. The main design parameters and operating systems for he Project were established under APL I.The design for APL I1was strengthened in numerous ways, particularly with respect to community participation methodologies, institutionalization ofincome-generating and pastoral risk management activities, implementation arrangements for fiduciary aspects and M&E in particular, accountability mechanisms and reporting. The FPCU is in place and leading the preparation ofPhase 11. RPCUs are in place in four regions. The MoFA is negotiating the terms ofa MoUwith the MoARD for the implementation ofthe PRM component and a separate MoUwith the FCA for the implementation ofthe rural savings and credit activities. The Project is deemed ready for implementation, subject to fulfillment ofthe conditions for effectiveness.
105. Audits. The annual external audit for PCDP Iwas submitted in a timely manner. The audit was qualified due to the presence ofunreconciled balances between federal and regional local currency Project accounts. The clearance ofmaterial inter-fund balances identified in this audit is currently in progress and has been made a condition for Effectiveness for PCDP 11.
106. Policy Compliance. This project complies with all applicable Bank policies.
31 Annex 1: Country and Sector or Program Background ETHIOPIA: Pastoral Community Development Project I1
Recent Economic Developments 1. Ethiopia is experiencing a strong spell ofeconomic growth, albeit from a low base. Over the last four years, Ethiopia’s economy has grown at over 11% per annum -extraordinary by its own past performance as well as by world comparison, averaging more than twice the rate ofgrowth ofother countries in sub-Saharan Africa. The average Ethiopian income is now 43% higher than the level in 1990s. However, given the low initial per capita income, the country remains one of the poorest in the world, underscoring the urgency of sustained and equitable growth.
Poverty Context 2. Over the past decade, Ethiopia has made significant strides in improving the living standards ofits citizens. Household-survey evidence suggests that, between 1999/00 and 2004/05, the real total expenditure per capita grew by 19% (15% with respect to 1995/96). As a result, the poverty headcount fell by 12.4 percentage points between 1999/00 and 2004/05 and by 18.5 percentage points since the mid-1990s. Yet, 39% ofthe population (slightly lower as per World Bank estimates), still remain mired in poverty. Gender disparities persist despite a significant increase in female enrolment in school at secondary level. While HIV prevalence is relatively low, AIDS is the leading cause ofmortality among 15-49-year-olds and accounts for an estimated 43% of all adult deaths. The severity and persistence ofpoverty in rural areas is disconcerting, as is the growing income inequality among urban households.
Ethiopia’s Development Strategy 3. Ethiopia is currently implementing its second Poverty Reduction Strategy (PRS), known as the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). PASDEP’s strategic vision is rapid and sustained growth primarily through scaled-up development assistance and large domestic investments targeted at eliminating the poverty traps. This vision extends development trajectory ofthe previous Sustainable Development and Poverty Reduction Program (SDPW) in areas such as infrastructure, human development, rural development, human security and capacity-building, but includes new elements including an explicit link to MDGs as well as a new focus on growth in the areas ofprivate-sector and urban development, industry and the commercial agriculture. PASDEP includes the following priorities:
4. Market-based Development of Agriculture. Subsistence agriculture predominates, characterized by fragmented land management and a limited resource base, low supply and dissemination oftechnology and limited information flow and implementation capacity as the major problems in the sector. In response, PASDEP focuses on human resource development, technology and economic infrastructure in the context of a strong enabling environment for private-sector activity, and improved infrastructure.
5. Private-Sector Development. PASDEP emphasizes the integration and interdependence between the agricultural and industrial sectors. PASDEP thus seeks to encourage export-oriented development by providing support to the private sector and addressing market failures. An active industrial policy is central to the program. Selected value chains and clusters are to be targeted, following the successful example ofthe floriculture sector. Infrastructure, power generation, and
32 construction and supply opportunities are also highlighted in PASDEP as high-potential areas for private-sector participation, as is the growth ofprivate schools in urban areas.
6. Urban Development. The PASDEP urban development strategy emphases regional equity and good governance. The strategy is built on four pillars: (i)support for micro and small enterprises and job creation; (ii)integrated housing development; (iii)improved access to land infrastructure and services; and (iv) promoting urban-rural and urban-urban linkages.
7. Infrastructure. Road and utility network expansions are seen as central to the growth agenda. The Universal Electrification Access Program (UEAP) will extend electrification to 24 million people, reaching penetration of 50% ofthe country over five years. PASDEP also aims to provide access to clean potable water to the entire population within seven years. Finally, the strategy’s goal is for the entire population to have access to telecommunications within a 5km radius. Coverage for 2005/2006 is 47%, up from 13% in the base year 2004/05.
8. Human Development. The Government aims to implement a 20-year education plan aimed at improving the quality, equity and relevance ofeducation, with special emphasis on primary education for all by 2015, as well as Agricultural Technical and Vocational Educational Training (ATVET), teachers’ training and cross-cutting issues such as gender, civic, ethics and HIV/AIDS education. In the area ofhealth services, the Government continues implementing its Health Sector Development Program (HSDP) I and I1and will extend it into HSDP I11 with an increased focus on poverty-related health conditions such as communicable diseases (HIV/AIDS, tuberculosis, malaria) and health problems that affect mothers and children.
9. Governance. PASDEP includes a number ofinterventions to implement Ethiopia’s commitment to transparent and inclusive governance. A series ofreforms has been planned under PASDEP, including participatory mechanisms to be established at the local level. The independence ofthe judiciary will be improved as will the performance ofthe police, prosecutors and the prison system and strengthen journalistic freedom.
10. Vulnerability. The Food Security Program (FSP) remains the GoE’s strategy to overcome food insecurity and reduce reliance on food aid. The key interventions under the FSP are: (i) building household assets through on-farm activities; (ii)voluntary resettlement from environmentally degraded to more productive areas; (iii)the Productive Safety Net Program (PSNP) to help transition from food aid to cash aid while building community assets; and (iv) promoting non-agricultural IGAs. Related efforts include an increased focus on nutrition and putting in place flood preparedness and EWS. The PCDP I1will work closely with the FSP.
Pastoralism in Ethiopia3 11. Background. In Ethiopia, pastoralism, which is the primary livelihood for 29 different Cushitic and Nilotic ethnic groups, is extensively practiced in the Somali and Afar National
This summary ofEthiopian pastoralism draws extensively from reports prepared for the EU in 2002 (Short-Term Technical Assistance to Identify Appropriate Pastoral Intervention Areas for EC Support), the 2004 Pastoral Areas Development Study financed by the African Development Bank and various social and livelihood studies undertaken during the preparation and implementation ofPCDP I.
33 Regional States (Regions), in parts ofOromiya and Southern National Regional States, and in other pockets ofthe country. The pastoral lowlands encompass almost seven million people, about 545,000km2 (almost half ofthe surface area ofEthiopia) and over 11 million animals including an estimated 28% ofthe cattle, 26% ofthe sheep, 66% ofthe goats and almost 100% ofthe camels in Ethiopia. About 20% ofthe rangeland vegetation cover is in good condition, 30% fair, 40% poor and 10% depleted, with continued range degradation, exacerbated by unregulated water development, a worrisome trend. Another half a million ha ofhigh-potential grasslands have been abandoned because ofethnic conflicts along the Afar-Somali border in the northeastern part ofthe country, and more that 2 million ha ofrangeland in western Ethiopia are underutilized due to tsetse infestation.
12. People living in lowland Ethiopia comprise both the comparatively wealthy who hold substantial assets in the form oflivestock, a larger number ofpoor people who have small herds and flocks and those who, to a greater or lesser extent, depend upon cropping or sale oftheir labor (“agro-pastoralists”), Livestock production provides just half of pastoral incomes, the balance coming from rain fed agriculture (20% ofthe average income), natural products as game, wood and wild hits(lo%), crafts and services (lo%), remittances (5%) and humanitarian aid (5% - mainly cereal food relief). Collectively, the pastoral areas ofEthiopia have among the highest rates ofpoverty and lowest human development indices in Ethiopia.
13. Declining access to communal rangeland due to increased private use and expansion of farming, combined with an annual population growth ofaround 2.6%, has had a significant effect on pastoral livelihoods. The increasing frequency ofdrought firther constrains livelihoods, driving a growing number ofhouseholds to destitution, from which recovery back into pastoralism is difficult. According to a report by the Agriculture Bureau of Somali Region, droughts occurred in the years 1918-19, 1928-29, 1933-34, 194345,1958-59,1970-73, 1975- 76, 1983-86, 1995-96 and 1999-2000. In the Borana area, currently afflicted by drought (2008), the three previous droughts were in 1983-84,1991-92 and 1999-2000.
14. The supply ofveterinary services including health posts, veterinary drugs and trained veterinarians is inadequate in lowland areas. Vaccination coverage against communicable diseases, treatment ofcommon livestock ailments and prevention against insect infestation (ticks) are poor, except in the limited locations in Somali Region and the Borana area of Oromiya Region where private veterinary services are evolving. The control ofendemic diseases such as Foot and Mouth, Contagious Caprine Pleuro-Pneumonia, Contagious Bovine Pleuro- Pneumonia, Rift Valley Fever and camel trypanosomiasis in pastoral areas remains inadequate.
15. Pastoralists’ access to education and health services, although improving, remains low. Adult literacy rates in rural Afar and Somali are 17% and 13% respectively, well below the national average of3 1%. Gross school enrolment rates in rural areas, at 37% and 15% in Afar and Somali Regions, are also low compared to 67% nationally. In the Southern Region, however, 70% of rural children have access to primary education, while in pastoral areas of Oromiya the enrolment rate is 45%. Government health service coverage is also constrained in pastoral areas. A study in the Afar Region in 2000 found that there was one general practitioner per 95,732 persons, under-5-year-old health service coverage of2% and fill vaccination ofonly 3.7% of
34 children. Lack ofsector staff and budgets as well as inappropriate service-delivery modes for nomadic populations constrain pastoralists’ access to health services.
16. The 1995 Proclamation on the Right ofProperty states “Ethiopian pastoralists have the right to free land for grazing and cultivation as well as the right not to be displaced from their own land”. Those rights are included in the Constitution, but have yet to be legislated. Government policies on lowland agricultural development and settlement, and pastoral society’s inability to effectively balance private and public land use both challenge pastoral land rights and require urgent policy and planning direction.
17. Decreasing per capita livestock numbers, a declining natural resource base exacerbated by private land enclosure, weakening ofcustomary NRM institutions, rising sedenterization and associated engagement in low-value agriculture, often driven by destitution due to drought and the limited availability ofalternative sources oflivelihood, compounded by low education levels are placing pastoral communities under high economic and social stress. Alternative livelihood opportunities are few. Voluntary sedenterization ofpastoralists, particularly along perennial rivers, is a long-term policy goal ofthe government, and riverine irrigated agriculture has been promoted in the lowlands through schemes funded and managed by the Government. Notwithstanding some successes, this policy is yet to have a significant positive impact on pastoralist livelihoods.
18. Although the climatic conditions and hardships are similar for most pastoral areas, the people inhabiting these areas differ in their social structure, composition oftheir herds, coping strategies and extent oftheir integration in the market economy.
19. Afar Region, located in the northeastern part ofthe country, borders Tigray Region in the north and northwest, Amhara Region in the west and southwest, Oromiya Region in the south and Somali Region in the southwest and shares international borders with Djibouti and Eritrea to the west and northwest, respectively. Afar Region is divided into five zones, 29 woredas and 358 kebeles. Covering 97,970km2, the population is estimated to be 1.2 million, ofwhich 90% are pastoralists and 10% agro-pastoralists. Casual employment in irrigated farms and urban settlements along the main Addis-Djibouti Road are minor livelihood activities in the region. There are about 1.5 million livestock in the region, ofwhich 0.55 million (36%) are goats, 0.39 million (26%) are sheep, 0.33 million (22%) are cattle and 0.19 million (2%) are camels. Livestock production depends on rain fed natural pasture. Productivity is declining as a result of recurrent droughts, land degradation, encroachment ofcrop farming, conflicts and invasion of Prosopis. Agro-pastoralism is common in the Awsa-Gewane areas and specific woredas adjacent to Oromiya, Amhara and Tigray Regions. An estimated area of30,000ha is used for crop farming, mainly teff, barley, wheat, maize, sorghum, millet, pulses, and cotton and oil crops such as noug, linseed and rapeseed. Afar Region is categorized by the Government as food-insecure.
20. Somali Region occupies an area of about 8 1,900km2, bordering Oromiya Region in the west, Afar Region and the Republic ofDjibouti in the north, Kenya in the south and Somalia in the south and east. The region is divided into nine zones and 52 woredas. About 87% ofthe region is undulating, except the area adjoining the upland plateau has moderately steep topography. The 200 and 700mm/rainfall is bimodal, with a main wet season from March to June and short rains
35 from September to December. Only Jijiga and Shinile have rainfall ofover 700mm/year. The population is estimated at about 3.4 million, of which about 85% are pastoralists. The rest are either agro-pastoralists, sedentary farmers or urban-based. About 450,000ha are cropped, mostly for rain fed crops in the Jijiga and Shinile Zones, with smaller areas in Liben and Gode Zones. Irrigated agriculture is practiced on about 20,000ha along the perennial Genale, Dawa and Wabi Shebelle Rivers, although the potentially irrigable land may exceed 500,000ha. Conflict is currently hampering development in some parts ofthis Region.
21, The Southern Region includes 112 woredas occupying most ofsouthwest Ethiopia. The region contains up to one-fifth ofthe country’s population: about 12-14 million. The region has by far the greatest number ofethnic and language groups, including Gurage, Hadiya, Kambata, Wolayta, Sidama, Gamo, Goffa, Ari, Sheko and the pastoraVagro-pastoral Hamer and Surma of the Omo River area. With a total land area of about 112,000km2, the Southern Region occupies some 10% ofEthiopia. Rainfall in lowland areas is modest, with the Hamer rangeland receiving about 600mm per annum and the lowlands around Lake Abaya around 9OOmm. In the south, trypanosomiasis has constrained cattle rearing.
22. Oromiya Region includes the Borana Zone in southern Ethiopia, bordering Kenya, consisting of 12 woredas, ofwhich six (Liben, Yabello, Dire, Arero, Taltele and Moyale) are in the lowlands, where pastoral and agro-pastoralism are the main modes of land use, with livestock production dominant. The Borana pastoral system combines a relatively settled family with highly mobile herds. The Sagan and Dawa Rivers serve as dry-season water sources supported by traditional wells and stock ponds. During drought periods, livestock concentrations reach alarming numbers around higher-yielding wells and ponds
Pastoral Development Issues 23, The following sector issues are important for pastoral development in Ethiopia:
(a) Good governance and community participation. The establishment ofthe Regional States has improved the opportunity for participatory development. Much remains to be done, however, to improve transparency, accountability and citizens’ participation in local development activities in the lowland areas o Ethiopia. (b) Periodic drought. With increasing human and livestock population pressure and an apparent increase in frequency ofdrought, the capacity to cope with drought has declined to the point where the survival ofviable pastoral production systems is threatened in some areas. Government has established a disaster prevention and preparedness system, but its primary focus to date has been on upland agricultural systems, with lowland administration lacking the resources and knowledge to protect pastoral livelihoods effectively against natural disasters; (c) Rangeland degradation, is increasing, evidenced by soil loss, bush encroachment, reduced biodiversity, weed invasion and deforestation. Traditional range management systems based on indigenous knowledge, mobility, reciprocity agreements, fluid boundaries and traditional law are facing new pressures calling for new institutions, technologies and systems; (d) Poor support livestock marketing and trade continue to constrain the economic potential of the lowlands. Ethiopian pastoralists have traditionally engaged in cross-border livestock trade, mostly directed on Kenyan and Gulf markets. Recent restrictions to both these markets, primarily due to sanitary concerns, caused price falls and reduced trade to the Gulf States. Key
36 constraints are: (i)weak sanitary control; (ii)deficient market and transport infrastructure; (iii) cumbersome documentation needs; and (iv) inadequate banking systems. (e) Animal health services rarely extend beyond lowland woreda towns and information on disease incidence and risk, essential to high-value export markets, is not systematically available. Drug supply, now privatized, has improved, however, drug quality, including dilution and unregistered imports, remains a problem. The Government is progressively privatizing veterinary services and has integrated CAHWs into the national animal health services, providing a platform for investment in animal health service for pastoral communities; fl Human health services. The Government has developed Traditional Birth Attendants (TBAs) and Community Health Assistants training in pastoral areas and a training-of-trainers program for pastoral region health specialists. Further investment in capacity-building and community- based pastoral health and posts is required. HIV/AIDS is a major health concern in Ethiopia, but little is known about the rates ofHIV prevalence in pastoral populations; (g) Education services reach less than one-third ofpastoralists, limiting opportunities to diversify livelihoods. Government has launched a pastoralist education initiative focused on both an expanded school network and mobile primary education services. The need for further investment in teacher training facilities and capacity and in community schools is indicated. In the longer term, higher education services will also be needed close to pastoral communities; (h) Agricultural advisory services are poor in pastoral areas and market information services inadequate. Despite the Government’s new thrust to decentralize political and economic decision-making to woreda level, serious gaps in skills and technology remain. (0 Rural infrastructure. Stock routes and watering points for marketed livestock are often poor, with resultant weak ownership and maintenance. Voice communication systems are equally weak, isolating pastoralist communities from the national mainstream. j) Land-use issues: Ethiopia’s increasing farming population and area under cultivation is reducing pastoral community dry season grazing. Customary law and NRM practices are giving way to population pressure and landlessness. As in other countries conflicts between sedentary farmers and pastoralists are prevalent. Land-use security also constitutes a major factor for achieving increased investment and productivity and relieving land degradation and poor management ofwater resources. (k) Sedentarization ofpastoralists and non-livestock sources of income: The emergence of dryland agriculture and some irrigated agriculture has resulted in rising agro-pastoralism. The Government is promoting sedentary livelihoods for pastoralists. Few pastoralists have pursued irrigated agriculture, but a larger number have shown interest in diversifying income sources. (1) Food security: Food-security programs are penetrating lowland areas, but need to be tailored to protect the livelihoods ofmobile pastoralists. For poorer pastoralists, interventions that increase livestock productivity and enhance water access and drought security are important.
Government Strategy for Pastoral Area Development 24. Government’s strategy for pastoral area development is outlined in the Poverty Reduction Strategy paper, the Rural Development Strategy and the Food Security Strategy and in the Government’s Letter ofDevelopment Policy (MoFA, 2008). The PASDEP states that “the problem offood security and agricultural growth in the nomadic areas is being conceived in
37 terms ofthe development ofthe pastoral economy in its entirety”. The PCDP I1corresponds with Government’s pastoral area development strategy by promoting an integrated and holistic approach that focuses on people, not merely their animals or the rangeland they inhabit.
25. Decentralization The Government and has made significant progress with decentralization in the highlands, though progress has to date been limited in the lowlands. The Government is committed to ensuring that the Project rests firmly with the Regions, which will receive substantial capacity-building support from the Project. PCDP I1will also support the PASDEP’s emphasis on community empowerment, by enabling communities to identify their own priorities, to propose modest development plans and to gain access to the financial resources and training necessary for their implementation.
26. Land-usepolicy. The Constitution stipulates that land is owned by the State, being administered by the Regions for the benefit ofthe local communities. Power to regulate on land allocation, management and tenure is devolved to regions. However, some ofthose with pastoral populations have not passed supporting laws. Currently, the 1997 proclamation ofthe Federal Rural Land Administration provides that “demarcation of land for house building, grazing, forests, social services and such other communal use shall be carried out in accordance with the particular conditions ofthe locality and through communal participation”. There appears to be growing support for community/clan certification ofrural land.
27. Voluntary Sedentarization ofpastoralists. MoFA promotes settlement ofpastoralists as a long-term strategy, recognizing that this must be voluntary. The PASDEP acknowledges the right ofpastoral groups not to be coerced into any form ofresettlement, just as the 1994 Constitution provides for pastoralists “not to be displaced without their wish”.
28. The Government has mandated MoFA to address the governance and administrative needs of the “emerging regions” including Afar and Somali Regions. MoFA also chairs the Federal Inter-ministerial Board (FIB), which has a mandate that includes lowland development. Because ofthis mandate, and the multi-sectoral nature ofthe PCDP 11, MoFA provides the high-level institutional support to PCDP 11.
38 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ETHIOPIA: Pastoral Community Development Project I1
Service delivery 3 3 Protecting Basic Services 1 I Active II Institutional capacity- S S Public Sector Capacity Building Active building
Water Supply and Sanitation Project Water supply Active I I ISISI I
Pastoralist Livelihoods Initiative Food security I Risk
Program
Y Irrigated Pasture in Afar FA0 Ongoing Pastoral Livelihood Program Norwegian Ongoing Development Agency Emerging Regions Development Institutional capacity- UNCDF/UNDP Ongoing Program building Pastoral Communication Initiative Conflict resolution I UNOCHA Ongoing Research and advocacy Disaster Preparedness Program Early warning and SCF/UK Ongoing disaster risk management
39 Annex 3: Results Framework and Monitoring ETHIOPIA: Pastoral Community Development Project I1
Results Framework
70% ofcommunity members Assess the effectiveness ofthe ofEthiopian pastoralists to external satisfied with timeliness, quantity disaster early response system shocks and (ii)improved livelihoods and quality of disaster early response oftargeted communities 70% ofthe targeted community Assess the effectiveness ofPCDP I1 members satisfied with service investments in social infrastructure delivery through PCDP 11-financed social infrastructure
Increased average income of Assess the effectiveness ofthe pastoral saving and credit loan saving and credit intervention on beneficiaries in beneficiary project loan provided to pastoral communities credit and saving beneficiaries
Early warning information on Assess the effectiveness ofthe EWS disaster risks available for all pastoral and agro-pastoral woredas
Subcomponent (a): Community Investment Fund (CIF) Communities identify and % ofcommunity members, Captures active participation of implement subprojects addressing disaggregated by gender attending community members in Project- priorities agreed upon in their CAPS Project-related meetings (m, f, y) related issues
% ofapproved (budgeted) An indication that priorities are met community sub-projects completed and supported by woredas each year
% of sub-projects completed that An indication that woredas are receive recurrent costs associated providing recurrent costs associated with PCDP CIF social investments with subprojects, such as teachers’ and health workers’ salaries, to ensure that subprojects are running, to increase the likelihood of sustaining the projects
First and second cycle education net MDG-related indicator to measure enrolment rate for Grade 1-8 (f, m) accessibility by communities to frst disaggregated by region and second cycle education Determine if key input will reach the % ofHHs in beneficiary community targeted number ofbeneficiaries with access to potable water
40 O&M arrangements are in place and I Determine if program needs to functioning for >80% of increase its inspection and infrastructure that requires supervision oftechnical works and maintenance. O&M arrangements
Woredas and their communities establish transparent accountability plans, budgets and service accountability ofworedas to processes performance at public centers community members % ofworedas with a complaint redressal system for CIF
Subcomponent (b): Rural Livelihoods Program (RLP) Sustainable savings & credit service established in selected pastoral areas
financial services to marginalized communities - increasing their
% ofsavings & credit groups with <5 % 30 day overdue payments.
% ofsavings and credit beneficiaries whose HH income has increased
Subcomponent (a): Pastoral Early Warning and Response Program 1. EWS: Early warning system established and operational (national and regional) by EWRDMoARD
80 % ofpastoral and agro-pastoral Assess whether communities are Project prepare and review DPCPs engaged in the DPCP process.
2. Disaster Early Response Fund % ofDER Grants-financed early Evaluates the timeliness ofthe DER operational response activities within one month Grants to response to identified ofpastoral area EWS identifying changes change from “normal” conditions
Subcomponent (b): Disaster Preparedness Strategic Investment Program % ofavailable DPSIP resources Measures the utilization ofDPIP 1. Regions identify, prioritize and expended on prioritized strategic resources based onprioritized implement disaster preparedness investments by region strategic investments investments
41 Four regions prepare comprehensive Assess the effectiveness ofthe strategic disaster preparedness region in preparing comprehensive investment plans strategic preparedness investment plans
% ofcommunity-based disaster Determine the sustainability of preparedness infrastructure infrastructure related to disaster investments that are operational and preparedness have maintenance plans.
ment (PLKM) Number ofwebsite visits per month Ensures website is providing 1. Improved access to information relevant information on development issues in pastoral areas # ofPAL groups that have To ensure research outputs are 2. Participatory research being completed research activities relevant to pastoralist needs. carried out on issues identified by pastoral communities # ofquarterly regional EPADGON To ensure pastoralist networking on meetings held and recorded development issues.
# ofpolicy implementation studies To ensure expansion and 3, Improved information on and # ofdecisions legislated in implementation ofgovernment pastoral development issues for support ofpolicy frameworks pastoralist policy framework policymakers
% ofsemi-annual project progress 1. Improved project management reports submitted at federal (4 management ofProject activities and performance: planning, weeks), regional (3 weeks) and will allow management to address budgeting and evidence-based woredu (2 weeks) level after end of quickly any issues or obstacles to decision-making each semester achieving results
% ofquarterly financial reports submitted at federal (4 weeks), regional (3 weeks) and woredu (2 week) level after end ofeach quarter
External audit report submitted Findings from reports and audits will within six months ofend offinancial allow the Project to adjust and year improve its operations and Consolidated annual work plan and procedures budget prepared in accordance with government fiscal planning cycle.
% ofagreed training plans Training needs have been identified completed each year (gender, by the Project; this indicator will communications, social measure PCDP management accountability, conflict, MIS, M&E commitment to filling capacity gaps and IT) by training Project staff and other direct beneficiaries ofthe Project
42 1. Monitoring and Evaluation in PCDP I1will be an integrated system covering the four project components. It is a results-based framework, developed in a participatory manner, with a strong emphasis on project impacts and outcomes, as well as the regular monitoring ofoutputs and inputs. Based on the M&E experience from PCDP I,the integrated M&E system will be simplified and consist ofthe following areas: (i)outcome/ impact evaluation; (ii)implementation and process M&E; and (iii)Participatory Monitoring and Evaluation (PM&E) tools. In parallel to the overall monitoring ofthe Project, a modular approach to monitoring will measure the outcomes and performance of each ofthe functions and mechanisms under each component. The PIM for each ofthe four components ofthe Project will include a section on M&E and will be owned by the respective mechanisms/institutions, with oversight from the FPCU.
2. Impact/Outcome M&E. Monitoring and evaluation ofproject impact/outcome at the level of the Project Development Objective will be based on a set ofquantitative and qualitative indicators shown in the above table. Following PCDP I,substantial changes have been made to these indicators to make them more measurable, attributable to project interventions and outcome-oriented. The key indicators will measure the benefits and impact ofthe Project related to social impact, disaster preparedness, improved livelihoods, service delivery, IGAs and project management. In addition, a set ofintermediate outcome indicators were developed and simplified, based on the objective ofeach component, to support the M&E at the level ofthe Project Development Objective.
3. Data will be collected through various instruments, including the output information from the MIS and internal supervisions, social assessments/community and household surveys, participatory and interactive evaluation by the communities (community supervisors and evaluators etc). To the extent possible, secondary data sources will be used to fill out the baselines and provide follow-up data. Those will include data from the EWRD (MoARD), the Ministries ofHealth, Water and Education at both federal and regional level, UNICEF, DFID and others, as appropriate. This will minimize the cost and duration ofthe baseline collection process. Baselines for indicators related to empowerment, participation and community satisfaction will be collected early on in the Project by the Regional Monitoring Officers, with support from the MSTs. Given the complexity and cross-sectoral nature ofthe project interventions, a consulting firm will be hired to analyze data available on the four regions to fill out the baseline and fill in any gaps, and to conduct the mid-term and end-of-project evaluation surveys using consistent sampling size and methodology. The M&E information will be used to make adjustments to Project strategies and activities during implementation, draw lessons at mid-term and end ofthe project, and provide guidance to Phase I11 and future operations.
4. Participatory Monitoring and Evaluation. PCDP I1will revise, simplify and customize its PM&E approach and train its staff on a new and user-friendly PM&E manual. PCDP I1will adjust its approach continuously to adapt to the heterogeneous characteristics ofcommunities. PM&E will be instrumental in promoting community participation and improving the effectiveness ofthe M&E. The PM&E approach was applied in communities in Phase I,but to a limited extent, because ofhigh turnover rates in the Mobile Outreach Teams (MOTS) and the lack ofuser-friendly and easy-to-use formats at community level. Phase I1will fully integrate the PM&E approach, including capacity-building at all levels, simplification ofthe PM&E forms and improvement in participatory mechanisms. PM&E can promote information disclosure, and
43 citizen report cards will be used to gauge user perceptions (on availability, access, satisfaction and quality) ofbasic services as well as IGAs, and to provide valuable feedback to service providers. It can also capture citizens’ perceptions ofempowerment and participation.
5, Implementation/Process M&E. The MIS will be upgraded to facilitate implementation process and input/output monitoring. It will integrate a wide, but manageable, range of information on the key performance indicators, including qualitative and quantitative data derived from participatory M&E and semester monitoring reports, which will include outcome and output data on woreda activities. This will improve timeliness and reliability ofdata collection and reporting and reduce the workload ofevaluation surveys. Secondly, it will integrate the Pastoral Risk Management component by including a set ofdata provided by the EWRDMOARD.~The MIS will also contain baselines for the DPCPs, and data will be updated accordingly. In addition, the MIS will be linked to the Financial Management System (FMS) to monitor the physical and financial progress ofproject implementation in parallel. Data will be manually collected from kebele level and processed at woreda level, using basic reporting formats through Microsoft Excel. Data will then be aggregated at regional level by the monitoring officers and entered into the MIS by the MIS specialists in the RPCUs. The system will allow on-line data sharing with PCDP I1management at national level and between regions.
6. Reporting Mechanisms and Policy. PCDP I1will have four levels ofreporting, using simple basic formats with a set ofindicators to be monitored, in addition to any other monitoring data on which the different levels in the Project and the communities want to report: (i)Monitoring at kebelelcommunity level with the support ofMSTs and MOTs, following a basic format and submitted to woredas; (ii)Each woreda, with the support ofthe designated MST, will aggregate kebele data, after checking for quality, based on an agreed-upon basic format in Microsoft Excel to report on outcomes, outputs and financial progress; (iii)Each Regional Monitoring Officer will then be responsible for aggregating data coming from the different woredas and entering the woreda data and aggregated data in the MIS, after checking it for quality; (iv)The FPCU will then receive the data, enter it into the MIS, and develop quarterly and annual progress reports to be shared with all levels ofthe organization; (v) If a woreda does not submit timely and quality reports that demonstrate progress, it will not be eligible for additional funding until performance data are provided, based on a basic set ofindicators to be monitored at all PCDP I1woredas.
7. Safeguard M&E. Throughout implementation, PCDP I1is required to carry out safeguard monitoring to ensure that the Project brings intended benefits, while ensuring that any adverse environmental and social impacts are avoided or minimized. Arrangements for monitoring safeguard activities during project implementation will be incorporated into the overall M&E system for PCDP 11. Safeguard monitoring will be twofold: (i)ensuring that subproject environmental and social screening and checklist forms are properly completed by MOTs with the support ofMSTs; and (ii)Environmental and Social Performance Reviews by a local consultant contracted to visit each Project woreda at least once a year to support compliance with
EWRD/MOARD coordinates and receive reporting data from and received from Livelihood Integration Unit and Save the Children on livelihoods and disaster preparedness.
44 ESMF procedures, determine lessons learnt and provide guidance for improving future performance. Safeguard monitoring will be built into the overall M&E training for the Project.
8. Institutional Arrangements. The institutional set-up for M&E has multiple levels and is well aligned with the PCDP I1management system. Overall responsibility for M&E will rest with the PCDP management, specifically in the M&E Unit, to be staffed with a manager for M&E activities, an M&E officer and an MIS/IT specialist. At the four regions, monitoring officers and MIS/IT specialists will report directly to the M&E specialist in the FPCU. The Regional Monitoring Officers will work closely with MSTs, which will have a focal point for supporting monitoring activities at woreda level. MSTs will support the PDOs and MOTSin their monitoring work with communities. The data management, analytical and reporting capacities of MSTs and at local levels need to be enhanced. Therefore, training programs and Technical Assistance (TA) are planned and budgeted to strengthen the capacity at local levels, which is crucial for the success ofthe scaling up.
9. In order to support the matrix ofan integrated M&E system, the M&E team will work closely with staff in charge of each component. M&E will draw on and strengthen the existing institutions in M&E, in particular the Statistics Bureau at national and regional level. Officers from the Statistics Bureaus will be members ofthe working groups, and meetings and workshops will be held to exchange experience, especially on indicators for the national survey and on the process ofcommunity participation.
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c c Annex 4: Detailed Project Description ETHIOPIA: Pastoral Community Development Project I1
By Component:
Component 1: Sustainable Livelihoods Enhancement (SLE) (US$93.4 million, including US$5 1.9 million from the World Bank, US$21.7 million from IFAD, US$5.0 million from the Regional States and US$14.7 million from the Beneficiaries)
Sub-component A: Community Investment Fund (CIF)
1, The purpose ofthe Community Investment Fund (CIF) is to make capital resources available for small-scale community-driven local investments. These investments should be identified, prioritized, implemented and monitored by beneficiary communities. Communities will also be tasked with procurement and financial management ofthese subprojects. Therefore, the Project will initially focus on renewing community Participatory Rural Appraisal (PRA) exercises and capacity-building ofCommunity Project Committees, Community Procurement Committees and Community Audit Committees. These committees will include men and women, as well as a representative ofcustomary institutions and youth representatives. Customary leadership institutions will be requested to confirm their support for the CIF processes and to adjudicate disputes as appropriate. After an initial PRA exercise and capacity-building, communities will prioritize subprojects on the basis ofa vote of all adult community members. PCDP I1will pilot the use of community focal points to serve as a liaison between the Project and communities.
2. Eligibility criteria for financing under the CIF will be kept as broad as possible to respect the priorities ofpastoral communities. It may include investment in social infrastructure, such as revolving drug funds; community health workers and community drug shops; TBAs and kits; mobile schools, static schools or hostels or parts thereof; static health clinics or parts thereof; a domestic water point or part ofone. It may also involve funds for building capacity in social service delivery.
3. The Project will provide Birr2.2 million per to participating woreda per year (except for first- time woredas which will receive Birr 1.2 million in their first year). Individual community groups will be eligible for up to three grants ofup to US$35,000 each, dependent on performance. The percentage share ofcommunity contribution will increase progressively over the three rounds. Accordingly, 1st round ...... 15% (5% cash) 0 2ndround ...... 20% (7% cash) 0 3rd round ...... 25% (10 % cash)7
' NB: for communities who suffered from any disaster or became more vulnerable the cash part of the community contribution will be half of the proposed one, as the situation is declared and get approval from WDC and documented by facilitating MST
53 4. The sustainability and success of this sub-component will depend on the capacities of the communities to effectively assume responsibility for the planning, prioritization, implementation, subproject management and monitoring activities, and for the woreda authorities to provide necessary support. Therefore, PCDP I1 will invest significantly in strengthening the capacity of communities to assume these responsibilities. This will include skills training in key areas such as basic literacy and numeracy, proposal development, subproject management, budgeting, procurement, financial management, contract management, environmental screening, conflict resolution and management, and PM&E. Needs assessment methods, including PLA tools, consensus-building techniques and constraint analyses will be used to formulate Community Action Plans (CAPS), which will be amalgamated into Woreda Development Plans. Procedures for identifying, preparing, managing, implementing and monitoring progress and quality of subprojects will be described in the PIM.
5. PCDP I1will also invest in strengthening the capacity ofrelevant woreda officials to appraise and review subprojects, and to support project sustainability and participatory development efforts as part ofthe Woreda Development Committee. The woreda PDO will be the focal point for the CIF at the woreda level and will be supported by a PDO assistant funded by the Project.
6. Graduation. In light ofthe limited coverage ofcommunities in target woredas, PCDP I1will not seek to exit from current beneficiary woredas in Phase 11. However, PCDP I1will develop a strategy for woreda graduation from the CIF at the end ofthis phase on the basis ofcriteria related to community coverage, poverty, capacity to attract and mobilize resources, and the roll- out ofdecentralized capital investment financing for pastoral woredas. The terms and conditions ofall Project components, notably Community Investment Fund (CIF) subprojects and the Rural Livelihoods Program (UP) will be made clear to community members and discussed with community and woreda authorities so that the terms for community targeting, rotation and exit are accepted. In addition, written records and agreements ofroles and responsibilities for handover ofProject investments will be developed to improve prospects for sustainability and for record-keeping.
Sub-component B: Rural Livelihoods Program (RLP)
7. In Phase I,426 community-prioritized IGA subprojects were undertaken in 28 Project woredas. These subprojects strengthened targeted disadvantaged pastoral and agro-pastoral households to supplement and diversify their income and asset base. Project supervision reports and external evaluation ofthe first phase, however, indicate that procedures for IGA establishment need to be strengthened to improve: (i)the sustainability of these investments, (ii) beneficiary contributions, (iii)capital recycling, (iv) capacity building for business management, (v) market linkages, and; (vi) linkages to banking systems.
8. PCDP I1will continue to support income generation and diversification in the existing and also in new Project woredas. Rather than using revolving funds, in PCDP I1this will be achieved through the provision ofcapacity-building assistance to the formation and strengthening of pastoral Rural Savings and Credit Cooperatives (RUSACCO) and seed capital to the pastoral RUSACCOs in targeted kebeles. The pastoral RUSACCO will provide financial services in a savings-based approach for the income-generating groups and individuals. Pastoral RUSACCO
54 will be eligible for grants of200% ofcompulsory and voluntary savings up to a limit of Birr 50,000 (US$5,050) per pastoral RUSACCO to capitalize their lending operations (seed capital), The amount ofseed capital per pastoral RUSACCO can be increased for those pastoral RUSACCOs with more than 50 members, based on their performance regarding savings mobilization and repayments of loans. The initial period ofthe Project will focus on preparing the ground for establishment ofviable groups and a functioning cooperative system. The RLP resources will not be released before these conditions have been met. Existing IGA group members will be encouraged to join with the wider community to form pastoral RUSACCO and will be provided with training to strengthen the management oftheir PCDP IIGA and to organize it as a (separate) cooperative or limited liability company.
9. Project support will be provided to new primary pastoral RUSACCOs to enable them to administer savings based credit funds to support income generating investments. The pastoral RUSACCOs will be responsible for record keeping and ledgers on their grant leveraged savings fund, appraising loan applications, lending to members, determining loan conditions, monitoring the use ofthe funds for intended purposes and collection ofinterest (or service fee) and capital payments when due. Loans will be secured by at least two guarantors with securable assets. To ensure the delivery of these services, the Project will commission the FCA and RCPBs and WCPDs to provide technical assistance to capacity-building for up to 400 new primary pastoral RUSACCOs in selected kebeles for developing their governance structures, policies and procedures. This will include: (i)training to committee members on savings and credit cooperative management skills; (ii)community sensitization and awareness creation; (iii) providing basic office materials; and (iv) the provision ofoperational resources at woreda level.
10. Pastoral RUSACCOs will be established as self-reliant community-based financial intermediaries. They will be member-managed and fully autonomous. Each pastoral RUSACCO will be governed by its own bylaws and be subject to the cooperative legal and policy framework. In accordance with the cooperative system, pastoral RUSACCOs should reach full- fledged operation within one year ofbeing legally established. During the first six months, their primary focus will be promotion ofcompulsory and voluntary savings. The pastoral RUSACCOs will decide on their operating procedures, credit and savings products, and lending interest rates (or service fees) with due attention to financial and operational sustainability under the rules and procedures set by the FCA and the respective Regional Cooperative Promotion Bureaus. The existing RUSACCO manual used by the cooperative system will be adapted to the pastoral situation and a Pastoral Savings and Credit Cooperative Manual will be produced. This manual will then be used to guide the operation ofpastoral RUSACCO in the Project.
11. The cooperative development aspect ofthis sub-component will be implemented by the Federal Cooperative Agency, Regional Cooperative Promotion Bureau and Woreda Cooperative Desk. The Project will provide financial resources and technical backstopping via rural savings and loans specialists in the MSTs. This partnership will be further clarified and endorsed in a MoUto be signed between the Federal Cooperative Agency and MoFA. Details ofthe operational procedures, implementation arrangements including reporting, auditing system, supervision mechanisms, and specific roles and responsibilities ofparticipating institutions will be specified in the PIM.
55 Component 2: Pastoral Risk Management (PRM) (US$29.0 million, including US$20.4 million from the World Bank, and US$8.6 million from WAD.)
12. Pastoral Risk Management (PRM) will be addressed through: (i)expanding and strengthening the management capacity ofthe GoE’s EWS in lowland woredas; (ii)development ofworeda Disaster Preparedness Contingency Plans (DPCPs) that will include early response “shelf plans” in relation to specific warning stages; (iii)financing drought early response subprojects to enable timely responses to disasters; and (iv) preparation ofregional strategic disaster preparedness plans and hnding associated subprojects that address strategic, longer-term risk mitigation. These elements are contained in two sub-components: (i)a Pastoral Early Warning and Response Program (PEWRP, including contingency planning and early response fbnding; and (ii)a Regional Disaster Preparedness Investment Program (DPIP).
Sub-component A: Pastoral Early Warning and Response Program (PEWRP)
13, The PEWRP sub-component includes a participatory pastoral early warning and response program and strengthening ofits management capacity. This will expand and further institutionalize the ongoing EWRDMoARD EWS for lowland areas, including through supporting systems for the collection and analysis ofbasic household livelihood and natural resource, economic and conflict-related data. Using part-time data monitors at kebeZe and community level, woredas will collect household, child nutrition and environmental, economic and social information by livelihood zones. Survey forms will be collected from enumerators by the Woredu Early Warning and Response Desk officer, entered into a database, collated into a woreda early warning report and periodically passed on to the regional EWRB. These reports will initially be prepared quarterly, but may be increased to monthly if conditions warrant and capacity allows. EWRBs will prepare a regional EWS report for consideration by the Regional Early Warning and Food Security Steering Committee (REWFSSC).
14. Building on the pilot work already completed under the PCDP Iand the ongoing EWS development in lowland areas by the EWRDMoARD and associated donors and CSOs, the sub- component will be rolled out across all lowland woredas over the first three years ofthis Project. PCDP I1will finance the provision ofstudies, training and equipment to support the EWS program. This will includes community capacity-building, EWRDMoARD staff capacity- building, equipping and mobilization, database and communications system development and operating budget. The Project will also support remote-sensed data capture where appropriate.
15. The Project will finance the following to support the EWRDMoARD in the refinement of the EWS: (i)technical assistance to support the development of a computerized database, (ii) training offederal and regional staff in its use as part ofa larger capacity-building program, (iii) financing ofan additional database manager and data-processing coordinator, (iv) office equipment and hmiture, (v) computing and Global Positioning System (GPS) equipment and printers including a plotter, (vi) employment of five part-time household monitors at each woreda, phased in over the Project, (vii) a food security analyst for each participating EWRO from Project Year 1 to coordinate the development ofhousehold food-security monitoring systems and (viii) two regional food security analysts in each ofthe six EWRBs covering
56 lowland woredas. EWRD staff in participating woredas will be provided with a motorcycle to track field monitors and collect survey reports. Participating EWRB regional offices have been provided with a 4WD double-cabin pickups under PCDP Ito support community monitoring and disaster contingency planning. Voreda, zonal and regional early warning and response offices will also be equipped with computing, office and GPS equipment and provided office and field- operating expenses related to managing the EWS. Project resources will also be provided for training programs in EWS management.
16. The EWS will trigger responses to one ofthe five levels of disaster threat summarized below: Normal All the main indicators - household economy, child nutrition, rainfall, pasture production and availability, pastoral terms oftrade, conflict - are likely to remain within normal ranges for the time ofyear. Dry-season preparations have been carried out satisfactorily. Alert Some indicators are outside their normal range and there are reasons for concern. Specific preparations are required locally. Alarm Most indicators are outside their normal range and the rural economy is under heavy stress. National support is required to overcome upcoming disaster. Emergency There is widespread disruption and suffering. Animal deaths are increasing, and normal patterns oflife have been abandoned. Recovery All the main indicators are returningto their normal ranges, but livestock numbers are reduced and communities need continuing support to maintain purchasing power and entitlements.
17. Disaster Preparedness Contingency Planning. The EWS process will include the preparation and periodic (3-4 years) updating ofcommunity-driven woreda Disaster Preparedness Contingency Plans (DPCPs). The Project will invest in capacity-building in woreda and regional level to prepare DPCPs8, It is expected that woreda-level disaster contingency plans will identify both disaster mitigation activities, such as small feeder roads, improved water and catchment management, fodder banks and range improvement, to be implemented through Component (b), as well as early response activities, such as destocking, water tankering, response to human and animal disease outbreaks and the like. Each warning level identified above will trigger appropriate reactions to mitigate the threat to household welfare, prepared in advance as “shelf plans” under the DPCPs.
18. DER Grant funds will be available during the early mitigation stage (e.g., livestock destocking and water tinkering) as well as the “recovery” warning stage for livelihood rehabilitation activities (e.g. provision oftools and seeds, or livestock restocking). Woreda DPCPs will be reviewed and consolidated at regional level. The woreda disaster contingency manual will be periodically updated (every 3-4 years) and underpin the implementation ofcontingency plans. The manual will contain a description ofthe strategy, the early warning and rapid reaction system .The manual will also contain inventories of equipment and supplies (such as vaccines or
A DPCP operational manual has been prepared under Phase I,and will be annexed to the PIM for PCDP 11.
57 tools for public works projects) needed in the event ofan emergency, so no time is lost in ordering these. It may contain instructions for emergency cash-for-work or feeding programs.
19. The woreda-level DPCP processes will integrate the work ofthe PCDP I1and PSNP in lowland areas to better protect communities from disaster. The responsible MST, together with representation from the regional Public Works Focal Unit, EWRB and partner CSOs, will conduct a single woreda planning exercise addressing the needs ofboth projects. Parallel PCDP I1and PSNP programs, coordinated through a joint Regional Steering Committee, will ensure complementarity between PCDP I1CIF (Component 1) and PSNP contingency finding, e.g. PSNP contingency funds providing paid labor for more capital-intensive civil works.
20. Disaster Early Response Grants (DER) Grants. The Project will finance Disaster Early Response sub-proj ects implemented through the EWRDMoARD and its regional counterparts with the fiduciary support ofthe RPCUs. The FPCU/PCDP will specify procedures for the DER Grants in the PIM. DER Grants will finance early response and rehabilitation subprojects identified in DPCPs in disaster-affected woredas.
Sub-component B: Disaster Preparedness Investment Program
21. The DPIP process will identify community and woreda perceived needs for strategic long- term disaster preparedness and mitigation, many ofwhich are anticipated to be cross-woredu or regional in their application. These proposals will be aggregated at regional level and integrated into a long-term disaster preparedness strategy and prioritized investment plan. PSNP catchment management proposals will also be integrated into this plan.
22. Each region will receive finding from PCDP I1to finance subprojects through the provision f Disaster Preparedness Strategic Investment Grants. The disaster preparedness strategy will be approved by the Regional PCDP IUPSNP Steering Committee and implemented in accordance with available fbnding under the oversight ofthe PDO, supported by the RPCU finance and procurement units. It is expected that these investments will include, inter alia, construction and rehabilitation offeeder roads, improved water supply and catchment management, fodder banks and rangeland improvement.
23. The Project will provide technical assistance and staff capacity-building to support the development ofthe regional disaster preparedness strategies and prioritized investment plans and a budget for strategic disaster preparedness investments. Procedures for the development of regional disaster preparedness strategies and the management ofresulting investment projects will be specified in the PIM.
Component 3: Participatory Learning and Knowledge Management (PLM) (US$1.8 million, including US$1.3 million from the World Bank and US$0.5 million from IFAD)
24. During PCDP I,the procedure ofselecting research to be commissioned by the project was centralized at federal level. The research conducted, particularly the policy gap analysis and the gender and social analyses in Afar, Oromiya and Somali Regions, provided some potentially useful information to guide policy and action. However, regional stakeholders had little say in
58 what research was conducted. Aside from the research on participatory varietal selection in Somali and the field testing ofintroduced tree species in Afar Region and pastoralists’ responses to researchers in focus-group discussions, there has been little involvement oflocal resource- users in the research process. Moreover, the results ofthe research have not been widely disseminated and translated into action.
25, PCDP I1will focus on involving pastoralists and local development-support organizations in forms ofresearch that stimulate participatory innovation and adaptation to new problems and opportunities and that enhance community capacities to make demands on formal research and extension services. The second phase will also focus on making research results, not only from the project but also from other organizations involved in pastoral research and development in Ethiopia, available to key stakeholders, including the pastoralists themselves. In addition, PCDP I1will support a limited number ofstudies designed to provide a better basis for policy implementation at federal and regional levels.
26. Under PCDP 11, the Participatory Learning and Knowledge Management will consist ofthe following three sub-components: a. Participatory Learning: pilots in participatory knowledge generation and innovation development in selected woredas; b. Knowledge management: compilation and exchange ofinformation, networking and policy dialogue at federal and regional levels; and c. Policy Implementation Studies: to assist federal and regional policymakers with the implementation ofkey policy priorities.
Sub-component A: Participatory Action Learning
27. Most research in or for pastoral areas is not community-driven, action-oriented and participatory. This is partly because there is a strong culture oftop-down research and there is little experience with community-driven research in pastoral areas. PCDP I1will initiate ways to fill this gap by promoting community-driven learning. On a pilot basis, in each ofthe four regions included in Phase I,two Participatory Action Learning (PAL) facilitators - preferably one male and one female - will be associated to MSTs. They will work with pastoral and agro- pastoral communities in selected kebeles in the three woredas covered by the MST to help the communities identify priority topics for community-led investigation and experimentation.
28. The topics to be studied may stem from indigenous knowledge and local innovation or may be promising technologies that have been developed elsewhere and can be tested and adapted locally. The topics could encompass institutional topics such as seeking a better understanding of the marketing chain or exploring new (or revitalized and adapted traditional) forms ofnatural resource management. These investigations will be conducted as joint efforts ofpastoralists; development agents (DAs) and/or subject-matter specialists; researchers with relevant expertise from a nearby research centre, college or university; andor private-sector people with relevant expertise. The innovations being tested by community groups can serve as a basis for demonstration and discussion by visiting pastoral and agro-pastoral groups.
59 29. In the pilot period (2 years), the PAL activities will be limited to 10 kebeles in each region (5 kebeles per PAL facilitator). The criteria for selecting the pilot areas will include:
(i) presence ofDAs and subject-matter specialists interested in testing this approach; (ii) proximity to research station or university interested in supporting this approach; and (iii) balance ofpastoral and agro-pastoral communities over the selected pilot areas.
30. Resources will be made available to PAL groups in the pilot areas for purchasing equipment and materials they need for experimentation and to cover the expenses ofspecialists and researchers whom they want to draw in from outside the kebele or woreda to support them. These resources can also be used for study tours by the communities to sources ofinformation, such as other communities, research centers or private enterprises with relevant knowledge and experience. The WDC will appraise proposals from the communities to access these resources and will give balanced opportunity to proposals from women’s, men’s and mixed groups.
3 1. Training in facilitating community-led situation and problem analysis will be part ofthe Participatory Rural Appraisal (PRA) training for all MSTs. The PAL facilitators will likewise receive this training. In addition, they will receive training from a trainer in identifying local innovations and facilitating participatory experimentation/ innovation development. They will meet twice a year to share and analyze the processes that they are facilitating, to learn from each other and to improve the methodology. The federal PLKMOfficer and the regional Communication Officers will also attend these meetings. The meetings will offer an opportunity for additional capacity building by the national trainer.
32. The PAL facilitators will, to the extent possible, integrate the identification ofresearch issues at community level with the activities around PRA and community planning for the CIF. In addition to issues that communities want to investigate themselves, they may also identify issues that need more formal research. The PAL facilitators will convey these issues to the nearest research centre or collegehniversity.
33. During the Mid-Term Review, the experiences with this pilot will be assessed by interviewing the pastoralists and agro-pastoralists directly involved and randomly selected members oftheir communities, both male and female, about the process and interim results of the community-led investigations and experimentation. It will then be decided whether and how the PAL activities should be continued and scaled up. It will be important to do this in concert with the activities ofthe Rural Capacity Building Project to develop farmer-responsive research, which eventually intends to work in pastoral areas.
Sub-component B: Knowledge Management and Networking
34. A gap between research and practice, resulting partly from the conventional research approach but also from a lack ofcommunication, networking and dissemination ofresearch outputs, was noted during PCDP I.Documentation on research and learning results and project experiences related to pastoralism and agro-pastoralism are scattered and not widely known. Policy makers and development workers do not use research outputs because these are not readily available and/or are not in a user-friendly form. Moreover, the general impression is that
60 many research outputs are not appropriate for pastoral conditions. PCDP I1has an important role to play in facilitating better networking and better access to useful information relevant for pastoral community development. It will thus step up its efforts to link different stakeholders for information sharing, dialogue and building partnerships in research for development on issues identified by stakeholders, foremost by pastoralists.
35. PCDP I1will support information units and networking at both federal and regional levels. It will post relevant information, research outputs and activities in pastoral development on a website, to serve as sources ofrelevant information and expertise for pastoral communities and other stakeholders seeking partnership in pastoral research and development. It will support the dissemination ofdevelopment-relevant information in digital and printed form, also in local languages via radio and in posters, brochures, leaflets and booklets that can also be used in literacy training in pastoral areas.
36. PCDP I1will also facilitate peace-building meetings and exchanges between communities through supporting knowledge management and information exchange activities. While adapting the approach in different regions to local specificities, the project will have a role to play in promoting dialogue between communities throughout the project’s zones ofintervention - through activities including undertaking preparatory discussions with the different communities, facilitating meetings ofcommunity elders, and organizing exchanges, including supporting transport, neutral venues, trained facilitators etc. Studies ofinterest to conflicting communities are one theme around which inter-community dialogue could be promoted.
37. The information units at national and regional levels respectively will be overseen in each case by a multi-stakeholder group involving volunteers from research institutions, higher learning institutions, the MoARD (BOARDat regional level) and representatives from CSOs and communityhased organizations from pastoral areas. The information unit at national level could initially be housed in the FPCU but should be transferred to a government institution. At regional level, the unit could be hosted by the Pastoral Development CommissionlBureau or by a regional pastoral forum. The information units will seek and store the documents ofall organizations involved in research and development to improve livelihoods in the lowlands. They will be open to the public for on-site reference.
38. At the national level, the PLKM Officer, will have the task to outsource, supervise and facilitate activities that:
(i) build up information units with hard and soft copies ofpublications and reports, as well as audiovisual materials, on pastoral research and development in Ethiopia; (ii) post digital versions ofdocuments on the Web, preferably by building on existing websites such as the ELDIS website operated by the University ofSussex in the UK or the WISP site; links should also be made to other relevant websites, e.g. ofthe Dryland Coordination Group-Ethiopia. (iii) develop and regularly update an inventory ofresearch organizations and activities in Ethiopia (understanding the term “research” in a wide sense as systematic activities to generate knowledge and innovations); the rapid scan oforganizations doing research on different aspects ofpastoral development, which was made for the consultative workshop on pastoral research, can serve as a starting point;
61 (iv) identify research and development experiences from other countries that appear to be relevant for PCDP I1partners in the regions and acquiring documentation on these experiences; publish and disseminate overview/synthesis papers, issue papers and policy briefs based on the outputs ofrelevant research; produce CDs with pastoral research updates; and ensure that research on issues demanded from pastoral communities in any one region is disseminated to other regions; and (v) once a year, organize a fair, attached to the Ethiopian Pastoralists Day, on pastoral knowledge and innovation with participation from representatives ofpastoralists involved in this component from all four regions, that will give an opportunity for the pastoralists to show and explain their knowledge and innovations to others.
39. The tasks ofthe information units at regional level will be similar to those at national level, but will also include ensuring the following:
(i) documentation ofthe Participatory Action Learning (PAL) processes and results; (ii) translating research overviewshyntheses, issue papers, policy briefs and research demanded by pastoral communities into local languages; (iii) providing information from the Region for the website on pastoralism in Ethiopia; (iv) organizing study tours for collegehniversity staff and students to visit pastoral communities to learn about local innovation and development activities; and (v) organizing study tours for woreda- and kebele-level government staff and pastoral leaders to visit development and PAL activities in their own and other regions.
Sub-component C: Policy Studies
40. A modest budget will be set aside at national and regional levels to be used by MoFA and the Regional Pastoral Development CommissionsBureaus, to commission studies that they regard as necessary to inform pastoral policy implementation. The outputs ofthis research will be made available through thefora and information units at national and regional level. A review committee will be established at national level to determine the topics ofoverview/ synthesis papers and policy briefs to be commissioned by the PCDP 11. This committee will consist of volunteer resource persons with experience on pastoral development and policy issues.
Component 4: Project Management (US$8.9 million, including US$6.3 million from the World Bank and US$2.6 million from FAD)
41. MoFA will retain overall responsibility for project implementation. The FPCU based in Addis Ababa will be tasked with the following responsibilities: (i)coordination at federal level; (ii)annual work planning; (ii)fiduciary obligations; (iv) liaison with stakeholder groups; (v) communication; (vi) M&E and reporting; and (vii) mobilization oftechnical backstopping and training. Based on lessons learned from Phase I,the FPCU will be strengthened in the following functional areas: (i)dedicated staff capacity for oversight ofeach Project component and procurement; (ii)M&E (including MIS); (iii)communications; and (iv) human resource development / training. The RPCUs will retain primary responsibility for: (i)coordination at
62 regional level; (ii)the implementation ofthe CIF; (iii)monitoring ofproject activities at regional level; (iv) regional fiduciary obligations; and (v) liaison with similar interventions. Further details on the institutional arrangements are provided in Annex 6.
Project Management Issues by Project Components:
42. Rural Livelihoods Program: A Sustainable Livelihoods Enhancement coordinator at federal level will be responsible for coordination ofCIF and RLP activities at federal level. At the regional level, MSTs will be strengthened with enterprise and cooperative development as well as procurement skills. Overall management ofthis sub-component will be delegated to the Federal Cooperative Agency.
43. Pastoral Early Warning and Response Program: The MoFA will sign a MoUwith the MoARD Early Warning and Response Department for the implementation ofthis program through Regional Early Warning and Food Security Committees and downwards through regional Em,EWRO and EWRD offices. The FPCU PRM officer will provide technical guidance and oversight for the program.
44. Disaster Preparedness Strategic Investment Program: Regional PDOs will work with RPCUs, interested donors, contracted experts and regional donor and CSO programs to develop regional disaster preparedness strategies and prioritized investment plans. The strategy and investment plans will be reviewed and approved by the Regional PCDP IUPSNP Steering Committee and implemented in accordance with available resources for the region.
45. Participatory Learning and Knowledge Management: The FPCU will be responsible for setting up the resource unit and network at national level, and the RPCUs for setting up the resource units and networks at regional level. The website and resource units will be managed by a webmaster/documentation specialist at national level and one document manager each at regional level, responsible initially to the FPCU and RPCU, respectively. The PAL sub- component will be coordinated by the PLKM Officer in the FPCU. In each region, two PAL facilitators will be hired as members ofthe MSTs working in the woredas selected for this pilot activity and will report to the RPCU.
63 Annex 5: Project Costs ETHIOPIA: Pastoral Community Development Project I1
Table 1: Total Project Costs by Component
I I I Price Contingencies 4.81 0.35 5.1
53.42 79.82 133.25 Total Project Costs Total Financing Required 47.5 1 66.03 113.50 Total Financing Required (IDA) 33.47 46.54 80.00 I I I I
Table 2: Total Project Costs by Source of Financing
Subtotal: Sustainable Livelihoods
Project Management Project Support and Coordination 6.30 2.65 8.95 Total Project Cost 5.00 80.00 33.54 14.70 133.25
64 Table 1: IDA Credit and Grant Financing by Disbursement Category
Subprojects
(2) Consultant’s Services including audits for all activities other than CIF Subprojects, IG 800,000 2,000,000 100% Subprojects, DPSI and DER Subprojects
I I I (3) Training 800,000 2,000,000 100%
(4) Goods, works and services for CIF 6,700,000 16,300,000 100% Subprojects
(5) Goods and Works and services for IG 300,000 700,000 100% Subprojects
(6) Goods, works and services for DER 600,000 1,500,000 100% Subprojects
(7) Goods works and services for DPSI 2,300,000 5,500,000 100% Subprojects
(9) Unallocated 500,000 1,200,000
14,200,000 34,400,000 TOTAL AMOUNT 48,600,000
65 Annex 6: Implementation Arrangements ETHIOPIA: Pastoral Community Development Project I1
Key Institutions for Project Implementation
1. National Oversight. The Ministry ofFederal Affairs will have overall responsibility for supervision ofthe Project. Oversight for Phase I1will be provided by the Federal Inter- ministerial Board (FIB). The FIB will review progress ofthe PCDP I1on a semi-annual basis, and will assess work plans on an annual basis. Measures to promote a proactive role for the FIB in Phase I1include: a training seminar for FIB members upon project launch; the inclusion of guidelines and procedures for FIB meetings (recommended on a semi-annual basis) in the PIM; dissemination to the FIB ofall project semester reports and discussion ofsaid reports on a semi- annual basis; and inclusion ofa measure ofthe timeliness and regularity ofFIB oversight of Project performance in relation to key indicators.
2. As in Phase I,a lean FPCU will be maintained in Addis Ababa to perform the following functions: overall project management, annual planning, fiduciary management, liaison with federal stakeholder groups, project communication, overall M&E and reporting, strategic staff capacity-building and mobilization oftechnical backstopping. The FPCU will include: (a) a Project Coordinator; (b) a Monitoring and Evaluation Team; (c) two Financial Management Specialists; (d) one Procurement Officer and one Procurement Assistant; (e) a Participatory Learning and Knowledge Management Officer; (0 a Pastoral Risk Management Officer; (g) a Communications Officer; (h) a Training Officer; (i)a Logistics Officer and 6) a Sustainable Livelihoods Officer; and (k) appropriate support staff. Terms ofReference (TOR) for these posts will be appended to the PIM. Capacity-building will be provided to all staff around cross-cutting issues that feature prominently in Phase 11, including community-based conflict management, accountability and anti-corruption measures.
3. Regional Project Steering Committees will be established to oversee RPCU operations at regional level also, with a view to improving integration into regional planning and budgeting exercises. The regional PSC shall be responsible at regional level for: (i)providing overall supervision for Project implementation; (ii)approving the overall annual regional Project work program and budget; and (iii)reviewing the annual implementation performance report prepared by the RPCU in relation to key performance indicators
4. At present, four RPCUs have been established within the four Project regions. At regional level, the role ofthe RPCUs will be to: (i)manage project fund flows and liaise with relevant bureaus and the federal level; (ii)oversee the CIF, (iii)supervise MSTs; (ii)oversee the PRM component; (iv) oversee the PLKM component; (v) facilitate capacity-building activities at community and woreda level to improve planning and provision ofsupport services; (vi) monitor and report on Project implementation; and (vii) provide technical assistance in procurement management at woreda and community levels. The RPCUwill consist ofthe following: (a) a Regional Project Coordinator; (b) a Communications Specialist; (c) an Accountant; (d) a Procurement Officer; (e) a Regional Monitoring Officer; (0 a Training Officer; (g) an MIS Officer; (h) a Pastoral Risk Management Officer; (i)a CIF Officer; 6) a RLP Officer; and (k) support staff. The Project will also establish up to 10 sub-regional offices, staffed by a
66 secretary and caretaker, to support out-posted MSTs. Finally, the Project will recruit internal auditors in high-risk regions.
5. Woreda and community level. The day-to-day field operations ofthe CIF at woreda and community level are undertaken by Project-financed Mobile Support Teams (MSTs), each of which operates within a subset ofworedas. The roles ofthe MSTs are to: (i)introduce communities and local authorities to the Project and provide initial orientation and training using a “learning-by-doing” approach; (ii)train communities to identify, manage and monitor subprojects, including procurement aspects; (iii)facilitate communication between communities and formal government structures; (iv) assist Woreda Development Committees to appraise and approve CIF subprojects, and observe and validate such decision-making; (v) carry out Project monitoring; and (vi) “trouble-shoot”. MSTs will be composed of: (a) a Team Leader; (b) a Training Officer; (c) a Savings and Cooperatives specialist; (d) a Procurement specialist; and (d) support staff. MST staff have technical qualifications (e.g. in veterinary, range, education, water and/or health), but should be primarily experienced facilitators, drawing upon technical staff in regional and zonal bureaus for training and technical backstopping as needed. Based on evaluations and assessments during Phase I,the number ofMSTs will be increased significantly for Phase 11. Each MST will cover no more than three woredas.
6. Communities. Community-Driven Development (CDD) is central to this project, and communities themselves constitute the key implementing agencies for several sub-components ofthe PCDP 11. Building on the levels ofcommunity involvement fostered during Phase I, beneficiary communities will play the primary role in identifying, appraising, implementing, monitoring and evaluating subprojects financed through the CIF. They will also be closely involved, with the support oftheir respective woredas, in designing and implementing disaster preparedness plans and related investments through the PRM component ofthe Project. The role ofcommunities in research and policy dialogue will be enhanced, with participatory action research being used as a key tool to involve communities in setting the research agenda and to prioritize demand-driven, applied research ofdirect benefit to pastoral communities. Finally, communities will have a stronger role to play in M&E activities.
7. As the success ofthe Project’s core programs depends on strong community-based organizations, including customary institutions, their knowledge and experiences will be applied to the identification ofgroupings and forms oforganization that can best promote development at local levels. It is intended that a coalition ofcommunity groups, including traditional organizations and groups representing specific interests (women, youth, environment, culture etc) will work together to set community development priorities and to manage their implementation. Strengthening the capacities ofcommunities to undertake local development activities and to hold woreda authorities accountable for service delivery will thus be a priority in Phase 11.
Links with other IDA-financed projects
14. The PCDP I1will seek to collaborate closely with a number ofWorld Bank-supported projects, including the following:
67 PSNP. This project is currently piloting activities in pastoral areas. PCDP I1will seek to cooperate closely with the PSNP with a view to harmonizing the following key elements: (i)early warning systems; (ii)woreda development planning; (iii) contingency responses; and (iv) approaches to social infrastructure investments; FSP. In the highlands, this project is initiating work with Rural Savings and Credit Cooperatives (RUSACCOs) which may provide opportunities for learning and cross-fertilization with the PCDP 11; Protection ofBasic Services (PBS). PCDP I1will seek to build the capacity of pastoral woredas to be able to draw upon Local Investment Grant resources under the PBS in the medium term, and will seek to inform community participation approaches used by PBS. PBS may also offer some examples ofrelevant social accountability approaches which the PCDP I1could test in lowland areas; and Water Sector Supply Project (WSSP). As this project expands its presence in pastoral areas, the PCDP I1will seek to build upon the WSSP guidelines for water interventions in pastoral areas, and will also try to call upon the resources of WSSP in particular for larger and more complex water investments (e.g. boreholes).
ImplementationArrangements Specific to Project Components
Component 1: Sustainable Livelihoods Enhancement
15. Community Investment Fund. Communities will be requested to identify and prioritize subprojects at most once a year according to a schedule prepared by the MSTs in consultation with woreda authorities. Proposals will be consolidated at woreda level by the PDOs. Proposals will be appraised by relevant WDCs for appraisal and review with a view to ensuring consistency with any other investment plans, feasibility ofany recurrent expenditure implications and coherence with Government standards. Once appraised, subprojects will be submitted to elected Woreda Councils for consideration and approval. Where there are no elected Woreda Councils in place, the Project will continue to rely on WDCs to select sub-projects. WDC’s will be restructured to include a number ofcommunity representatives from beneficiary communities in addition to relevant woreda sector officials. Project selection criteria will be specified in the PIM, and will include environmental screening and scoping guidelines (including mitigation of environmental impacts), future sustainability prospects etc prior to acceptance for financing.
16. All woreda subproject decision meetings will be observed and validated by an MST representative, who will act as the Secretary to the WDC. Representatives ofcommunities submitting proposals will be invited to present the proposals and to observe the decision meeting. All committee proceedings will be documented in writing. Councilhommittee subproject decisions and budgets will be posted at woreda offices and other relevant locations. Woredas that demonstrate a capacity to support communities will attract higher levels of funding. Those that demonstrate poor interaction with communities and/or poor levels ofimplementation will obtain less support. Details ofthe procedures and criteria for CIF use will be included in the PIM.
17. Rural Livelihoods Program (RLP). This sub-component will be implemented by Rural Savings and Credit Cooperatives at community and woreda levels. At federal and regional level,
68 this activity will be overseen by the Federal Cooperatives Agency under the terms ofa MoUto be signed with MoFA (see section on RLP in Annex 4 above). Details ofthe implementation arrangements including reporting, auditing system, supervision mechanisms and roles and responsibilities ofparticipating institutions will be provided in the PIM.
Component 2: Pastoral Risk Management
19. Data Management. EWS data will be collected periodically by part-time field enumerators resident in the community. Field enumerators will be required to have at least an gth grade education and could include, inter alia, teachers, health workers or educated pastoralists. Data forms completed by the enumerators will be collected by the woreda EWRD officer and entered at woreda level into an electronic database according to livelihood zones. Woreda EWS reports will go directly to regional EWRBs. At each level, livelihood zone data will be analyzed against base-year information and seasonal trends to detect any significant shifts in livelihood. Any significant deterioration in the value ofa key indicator (e.g. a drop ofmore than 15% in milk yield over a one-month period) would trigger a shift in to “Alert” status in the disaster cycle, triggering an appropriate early response in accordance with “shelf plans” identified in the woreda DPCPs, which will have been aggregated by livelihood zone. The regional EWRB will send the aggregated regional database, together with its interpretation ofthe disaster status by livelihood zone to the federal EWRD/MoARD within five days of its receipt from woreda level.
20. Early response interventions to a shift from “Normal” to “Alert” or “Alarm” phase will be requested by the regional EWRB and authorized by the Regional Early Warning and Food Security Steering Committee (REWFSSC), chaired by a representative ofthe Regional President’s office. The early response will be applied by either administrative or livelihood zone, depending on the nature ofthe emergency, and will be based on pre-approved and priced “shelf plans” identified through the woreda DPCPs and collated at regional level. The EWRD procure framework contracts covering the “shelf plans,” and will hnd early response measures through DER Grants. Detailed procedures for the DER Grants will be specified in the PIM.
Component 3: Participatory Learning and Knowledge Management
22. Participatory Action Learning. The PAL sub-component will be coordinated by the Participatory Learning and Knowledge Management (PLKM) Officer in the FPCU in collaboration with the Communication Officer in each RPCU and with representatives from the Regional Pastoral Development Commission/ Bureau.
23. A Participatory Action Learning (PAL) trainer will be contracted by the FPCU to provide initial training to the eight PAL facilitators, the PLKM Officer and the Communication Officers in the RPCUs. The trainer will provide additional capacity-building during the semi-annual experience-sharing meetings ofthese project staff and will also accompany each PAL facilitator at least twice per year (one week each time) to provide coaching in the field.
24. In each ofthe four regions that were involved in PCDP I,two Participatory Action Learning (PAL) facilitators will be attached to one MST team each. They will initiate and support the pilot activities in demand-driven experimentation and innovation development. They will preferably
69 have a background in adaptive research but will be, above all, facilitators and networkers bringing stakeholders together in user-led research in a wide sense ofthe term. Budgets for community research will be managed by the PAL trainers. Proposals from community groups will be reviewed by the WDC / Woreda Council. The RPCUs will manage these resources at regional level. The regional allocation for these activities will be transferred to the RPCUs on an annual basis. The RPCU will make quarterly progress reports ofPAL activities and use offunds to the respective Regional Pastoral Development Commission/ Bureau and to the FPCU. The process and outputs ofthe activities supported through these funds will also be communicated in relevant regionalforu.
25. The FPCUFCDP will consult with MoARD to explore possibilities ofcollaboration in the Rural Capacity Building Project in building capacities in agricultural research, extension and education (in the ATVET colleges) and promoting participatory innovation development around Pastoral Training Centers in lowland kebeles. The Communication Officer in the RPCU will establish and maintain close contact with the Rural Capacity Building Project, with a view to subsequent scaling up ofthe PAL and demand-led research initiated under PCDP 11.
26. The FPCU will be responsible for setting up the information unit at national level, initially within the FPCU office, whereas the RPCUs will be responsible for setting up the regional information units in the offices ofthe Pastoral Development CommissionsBureaus or a regional pastoral forum. PCDP I1will provide IT expertise to the information units at national and regional level. The website and national information unit will by managed by a webmaster/ documentation specialist responsible to the PLKM Officer. Each regional information unit will be under a document manager responsible to the Communication Officer in the RPCU.
27. The bdsfor policy-informing research commissioned by MoFA and the Regional Pastoral Development Commissions/Bureaus will be transferred annually from the FPCUFCDP to the relevant offices at national and regional levels. A committee ofvoluntary resource persons will review proposals for studies to assure the appropriateness ofthe methodology.
Component 4: Project Management
30. Federal Management: See paragraphs 1 - 2 above ofAnnex 6.
3 1. Regional and Woreda Management. See paragraphs 3 - 9 above ofAnnex 6
70 Annex 7: Financial Management and Disbursement Arrangements ETHIOPIA: Pastoral Community Development Project I1
Introduction
1. The financial management (FM) assessment is conducted in line with the Financial Management Practice Manual issued by the FM Board on 3 November 2005. The objective of the assessment is to determine whether the implementing entities have acceptable financial management arrangements, which will ensure: (i)the funds are used only for the intended purposes in an efficient and economical way; (ii)the preparation ofaccurate, reliable and timely periodic financial reports; (iii)ensure that finds are properly managed and flow smoothly, rapidly, adequately, regularly and predictably to implementing agencies at all levels (federal, regional and woreda); (iv) enable project management to monitor the efficient implementation of the project and (iii)safeguard the entities’ assets and resources.
2. As part ofthe FM assessment, the financial management team visited the Federal Project Coordination Unit (FPCU) and the Oromiya Region Project Coordination Unit (ORPCU). Furthermore, the cumulative knowledge and experience about the country and the project that is being implemented by PCDP Ihave been considered during the assessment. This assessment was conducted in the month ofFebruary 2008.
Summary Project Description
3. The objective ofPCDP I1is to contribute to: (i)increasing the resilience ofEthiopian pastoralists to external shocks; and (ii)improving the livelihoods ofbeneficiary communities. The second phase will seek to consolidate the progress made under PCDP I,and to expand the geographic impact area in order to establish the platform from which the long-run development objective ofsustainable pastoralist livelihoods can be met.
4. The second five year phase ofthe PCDP APL (US$50 million) is scheduled to begin by June 30,2008. PCDP I1will continue implementation ofmost PCDP Iprogram components, subject to modifications to further strengthen and focus on community development activities. PCDP I1 components will be: (i)support to sustainable livelihoods (including CF); (ii)pastoral risk management (including pastoral Early Warning Systems, woreda Disaster Prevention Contingency Plans, and disaster coordination activities); (iii)participatory research; and (iv) project management (including monitoring and evaluation activities).
Country Issues
5. The recently completed Joint budget and Aid review (JBAR) and the Fiduciary Assessment (FA) show that Ethiopia has made significant progress in strengthening public financial management in recent years. The JBAR, which was conducted by the Bank in collaboration with other donors, reviewed the Public Financial Management (PFM) system using the Public Expenditure and Financial Accountability (PEFA) framework. Out ofthe sixteen indicators covered under this review, fourteen were on government’s systems for public expenditure
71 planning, budgeting and reporting. The remaining two indicators are means to assess donor performance. Ethiopia scored high on seven ofthe fourteen indictors, i.e. macroeconomic management, including aggregate fiscal discipline and minimizing fiscal risks. The JBAR observes satisfactory progress in budgeting and accounting reform but notes that the adequacy and quality ofbudget reporting leaves room for improvement and remain a key concern.
6. The Fiduciary Assessment completed in early 2005, notes that considerable progress has been made in implementing PFMreforms in both federal and regional levels. The areas of improvements include budget processes, internal controls and cash management. Also, some steps have been taken in reforming internal and external audits. The status ofPFM reform and performance varies among regions. Southern Nation and Nationalities Peoples (SNNP) and Tigray regions have been the beneficiaries ofinvestment and local initiatives to support PFM reform. They both show improvement in the overall public finance function and a consequential reduction in fiduciary risk. Few other Regions, such as Amhara and Oromiya, have also exhibited significant progress in public financial management while others are at an earlier stage ofinvestment in PFM. However, there continues to be capacity and staffing issues in areas such as audit in all the regions.
7. Ethiopia’s public financial management reforms have been carried out through the Expenditure Management and Control sub-program (EMCP) ofthe government’s civil service reform program (CSRP). EMCP has developed a revised strategic plan to implement the nine components ofthe sub-program. Mobilization behind the EMCP (in terms offinancial and human resources) is a key component ofthe Public Sector Capacity Building Program (PSCAP) and has now been considered a priority in order to achieve hrther improvement in all aspects of financial management.
Overview of the PEFA Assessment Report
8. An evaluation ofPublic Financial Management (PFM) performance in Ethiopia was conducted in early 2007 based on an international reference framework - the PEFA or Public Expenditure and Financial Accountability framework. The assessment was done at the federal and regional levels and two separate reports were issued. Seven regions were included in the assessment. The draft assessment report issued in April 2007 observed significant improvement in the area offinancial management at regions, including budgetary transparency in recent years, robust budget preparation, regular internal audit scrutiny and follow up ofinternal audit recommendations, timeliness ofin-year and annual financial reports, and mutual supportiveness of the federal and regional Auditor Generals. Nonetheless, the report noted that the quality and nature ofinternal audit is uneven across the regions. It also reported untimely clearance of suspense accounts and that some regions are still experiencing significant delays in producing timely in-year and end ofyear information.
9. The report for the assessment conducted at the federal level shows that the classification of the budget meets international standards and the information included in the budget documentation is ofgood quality. The fiscal relations between the federal government and the regions are transparent. The report also noted that the budget process is well ordered with the existence of a budget calendar generally adhered to, and a budget circular issued to budgetary
72 institutions. Payroll and procurement controls are identified as being satisfactory while control for non-salary expenditure shows some weaknesses. Internal audits are also improved over recent years although the department does not share its work with the Federal Auditor General. The report indicated that the quality ofin-year budget reports and annual financial statements is satisfactory and delays in submitting financial statements to OFAG have been significantly reduced.
10. The Federal government report also shows that the OFAG adheres to INTOSAI auditing standards and focuses on significant issues. OFAG forwards audited accounts on time and these are reviewed by the parliamentary Public Accounts Committee (PCA).
11. The report also looked at the status ofthe government reform processes. It is highlighted that the first phase ofthe reform (transaction platform) has taken place through budgeting, planning, accounting, and information systems. The second phase ofthe reform, policy platform, is continuing at the sub-national level with reforms to the block grant mechanisms and a move towards more performance based budgeting. The government leadership and ownership regarding ongoing PFM reform efforts are both high. The report, however observed challenges in carrying out these reforms.
Risk Assessment and Mitigation
Inherent risk S Country level S N The risk arises mainly from weak capacity, including shortage of qualified accountants and auditors, and weaknesses in the country’s PFM system. It is being addressed by the Government outside this project through the ongoing Expenditure Management and Control Program which is supported by the Public Sector Capacity Building Project (PSCAP). Also, the Private Sector Capacity Development Project is supporting some private sector initiatives.
73 Entity level S S N The number of accountants at every level is low and this is aggravated by high turnover ofstaff. Accounting, financial reporting and auditing not timely
Project level S S N Due to the nature ofthe project (Le. CDD project), the ongoing AF'L-I was prone to miss-procurement and other FM related deficiencies. The implementing units are widely dispersed specifically woredas and beneficiary communities. Control Risk M Budgeting M M N Budgeting mainly follows the government budgeting system Accounting S The FM manual M Y (for FM Under revision ofthe FM will further be manual and manual the existing chart of revised to clearing of accounts will be revised in accommodate inter-fund light ofthe APL-I1 specific the needs of account needs. new activities balances) added into APL- I1and comments given by the auditors and the Bank in previous missions.
Clear inter-fund account balances upon consolidation of the accounts of implementing (N) entities. (Recruitment To be completed within 90 ofaccountants days ofEffectiveness. PIMto Recruitment of in new specify that no CIF accountants in woredas) disbursements to take place to the new woredas where no accountant woredas is in place. Internal S High risk M N The internal audit department Control regions such as ofthe FPCU has become Somali and Afar operational. It should be
74 Remarks
region will I augmented with support from recruit internal the internal audit unit ofthe auditors and all MoFA. The FM manual sets implementing out important control agencies procedures. internal audit units will include the project into their work program Funds Flow A new M The fimd flow arrangement Designated will largely follow the account will be existing arrangement for opened at the APL-I. FPCU Financial Formats of the I M Regular and enhanced quality Reporting un-audited IFRs (through time) have Interim been submitted to IDA by the Financial Report ongoing APL-I project. (IFR) for APL- I1were agreed during Negotiations of the Project
Auditing Early M N Audit reports for APL-I have notification and been received on a timely follow-up will basis, and there is no be exercised to I outstanding audit report from ensure that audit Phase-I. is completed within the due date. In addition the external auditor will conduct interim audit on the accounts. Overall Risk
Rating I '-High, S-Substantial, M-Moa 'ate, L-Low
12. Considering the above risk assessment and mitigation table the overall residual risk ofthe project will be Moderate after- the risk mitigation measures are undertaken. 75 Strengths 13, The country’s discipline in executing budget and complying with the existing government regulations are the major strengths indicated in most ofthe PFM diagnostic works conducted so far. The woreda Finance Offices will be involved in processing most ofthe project financial transactions in which the woredas are strictly following-up the budgetary discipline and regular government reporting mechanism. MoFA has previous experience in implementing donor- financed projects, including the ongoing PCDP Ijointly financed by IDA and FAD. PCDP Ihas been submitting regular IFRs and audit reports on a timely manner and, at present, there is no outstanding report from the project.
Weaknesses and Action Plan
Significant Weaknesses Action Responsible Completion Person The FM manual is not up-to-date Revise the manual FPCU effectiveness Uncleared inter-fund account Clear material inter-fund FPCU, RPCUs, balances upon consolidation ofthe account balances woredas effectiveness accounts the implementing entities. The project is implemented by Recruitment of FPCU, RPCUs Within 90 days of various agencies, mainly woredas accountants at new Effectiveness woredas and providing training to them Lack ofsubmission ofregular FPCU, RPCUs, Regular financial information, mainly from Closer follow-up on the woredas the new woredas to be added in submission ofIFRs Phase-I1 1 WB, FPCU, RPCUs The ongoing APL-I was prone to Recruit internal auditors FPCU and, misprocurement and other FM in Somalia and Afar RPCUs ofeffectiveness related deficiencies. region
Implementing entities
14. The existing Federal Project Coordinating Unit (FPCU) will be responsible for coordinating the project (APL-11). To ensure appropriate fiduciary management, the FPCU will have a Project Coordinator, Financial Officers (2) and one Finance Assistant, a Procurement Officer, a Procurement Assistant and a Monitoring and Evaluation expert. Its roles would be to release funds against agreed plans, disburse funds to all implementing levels, and co-ordinate monitoring and evaluation ofthe project as a whole. It would not be an implementing agency.
15. The Regional PCUs (RPCUs) will be responsible for supporting, coordinating and overseeing the operational and financial functions ofthe woreda offices.
16. The flow offunds to communities will be overseen by the Woreda Development Committee (WDC), which includes heads ofrelevant bureaus (agriculture, health, labor and social affairs), and representatives ofthe private sector and civil society. The woreda Finance
76 Office will be responsible for overseeing the financial transactions ofthe project at the woreda and for providing support to communities to manage resources for CIF sub-projects. Assistant finance officers will be required for those new woredas which will be added in the APLI-11.
17. Communities, with the support of Woreda and MSTs, will prepare Community Action Plans (CAPS) for appraisal by their respective WDCs. Funds for approved plans will flow from woredas to communities in appropriately sized and phased tranches as shall be determined in the PIM. Expenditure on any tranche must be completed before a new tranche is released.
Budgeting
18. The Ethiopian budget system is complex, reflecting the fiscal decentralization structure. Budget is processed at federal, regional, zonal (in some regions), woreda and municipality levels. The federal budgeting process usually begins by issuing the budget preparation note to the Budgetary Institutions. Based on the budget manual, the Budgetary Institutions prepare their budgets in line with the budget ceilings and submit these to MoFED within six weeks following the budget call. The budgets are reviewed at first by MoFED and then by the Council of Ministers. The final recommended draft budget is sent to parliament around early June and expected to be cleared at the latest by the end ofthe fiscal year.
19. MoFA prepares annual budgets based on its strategic plans following the government budget processes. The project budget is included in the annual budget proclamation ofthe federal government, under the name ofMoFA. The project prepares regular reports comparing actual and budget and submit the same for management and donors for information and decision making. The financial management manual will explain the detailed budgeting and budget control processes in the project.
Accounting
20. All implementing entities follow the government accounting system - double entry accounting system on a modified cash basis. The project has a financial management manual which spells out important internal control and accounting procedure. The current manual however lacks needs to be updated to reflect adequate information on the formats ofInterim Financial Report (IFR), updated chart ofaccounts, and important internal control procedures on imprestlpetty cash system and segregation of duties, etc. The manual will therefore be revised so as to incorporate the above issues. The revision ofthe manual, which will be attached to the overall PIM, will be an effectiveness condition for the project. Efforts are already made to address in the manual comments given by external auditors and IDA’Svarious supervision mission in respect ofthe recognition ofincome from donors and accounting for inter-fund accounts.
2 1. The FPCU, all RPCUs and most woredas offices are using Peachtree accounting software for the project hnd. This system is capable ofproducing the required financial deliverables for the project. However, a few woredas have not yet introduced a computerized accounting system due
77 to a lack ofelectricity, computers and other facilities. The FPCU provided the woredas the necessary facilities and instructions to introduce the computerized system.
22. A standardized reporting format and chart of accounts have been used by the APL-I. These formats shall be used in the APL-11. However, the existing chart ofaccounts will be revised in light ofthe new activities included in PCDP I1must be able to report expenditures on a component and on a category basis.
23. Presently, the FPCU has two finance officers and one assistant accountant. Each ofthe RPCUs has a finance officer and assistant. The woreda finance offices have each recruited one assistant finance officer for the project. The existing staffing arrangement will be used for APL- 11. However, project accountants should be hired in each ofthose new woredas to be included in the APL-11. The FPCU finance officers should build the capacity ofRPCUs, who will in turn build the capacity ofworeda finance offices through regular visits and formal trainings.
24. The FPCU and RPCUs should ensure that each ofthe newly added woredas in APL-I1 have hired project accountant, with the required educational background and experience, before transferring funds to them. Moreover, the FPCU and RPCUs should ensure that these new woredas have opened separate bank account for the project.
25. Each ofthe implementing agencies (RPCUs, FPCUs and woredas) is responsible for maintaining the project’s records and documents for all financial transactions occurred in their offices. These documents and records will be made available to the Bank’s regular supervision missions and to the external auditors.
26. Each community committee will maintain a simple book for registering transactions, which shows the amount ofmoney received and expenditures made. All the supporting documents from the community should be submitted to the respective woreda finance office along with regular financial reports.
Internal Controls and Internal Auditing:
27. Internal control comprises the whole system of control, financial or otherwise, and has been established by management in order to (i)carry out the project activities in an orderly and efficient manner, (ii)ensure adherence to policies and procedures, (iii)ensure maintenance of complete and accurate accounting records, and (iv) safeguard the assets ofthe project.
28. The FPCU, RPCUs and woreda offices are using those control procedures prescribed by the financial management manual. These procedures are adequate to ensure authorization, recording and custody controls. As noted above, the existing financial management manual (of APL-I) should be revised to clarify important control, reporting and auditing procedures for APL-11.
29. The FPCU has an internal auditor. MoFA has also an internal audit unit performing internal audit on government funds. However, the MoFA internal audit unit has been passive over the project. The two audit units should work complementarily so as to attain the project objectives. The MoFA internal audit should help to perform internal audits on the projectfinancial
78 transactions. The internal audit units at the FPCU and MoFA will include the project in their annual work programs and perform the necessary internal audit on the project financial transaction.
30. The RPCUs do not have separate internal audit units, nor do they receive adequate audit service from the regional pastoral offices they are housed in. Some RPCUs have expressed interest in having separate audit unit in their offices that will continuously assess and evaluate the project’s operations, implementation of control procedures, management’s efficiency in managing risks, etc at the regional and woreda levels. The project should recruit internal auditors in high-risk regions, specifically in the Somali and Afar regions and it should ensure that these auditors work in close collaboration with the regional pastoral office internal audit departments.
3 1. The government Civil Service Reform Program is building the capacity ofinternal audit in the country. So far, internal audit manuals have been issued and training has been provided to internal auditors. The improvement in internal audit has been recognized in recent diagnostic works, e.g., the FA assessment.
Funds Flow and Disbursement Arrangements
Disbursement Mechanism 32. The project may follow one or a combination ofthe following disbursement methods: Designated Account, Direct Payment, Reimbursement and Special Commitment.
Designated Account and Disbursement Method: 33. The FPCU will open a new Designated Account denominated in US Dollars. The existing Local Account in Birr will also be used to receive transfer from the USD account. The local account in Birr would finance all eligible project expenditures at the respective offices and would be used by FPCU to transfer funds to RPCUs. The authorized ceiling ofthe Designated Account would be US$ 10 million. The amount has been calculated to cover approximately six months expected expenditures ofthe project.
34. Each ofthe RPCUs and woreda finance offices will continue operating the existing project Birr accounts to receive funds from the FPCU. Advances to these regiondworedas from the FPCU will be based on the approved work plan. The initial advance will cover four months expected expenditures and the subsequent transfer will be based on actual expenditures justified through statement of expenditures, and will only be made to those regiondworedas that provide regular financial reports to FPCU.
35. Before transferring any money to the lower level, the FPCU and RPCUs will ensure that separate bank accounts have been opened for the project (mainly in those new woredas included in APL-11) and there are adequate financial management systems including financial management staff capable ofproducing the required financial deliverables.
36. On the recommendation ofthe WDC, the woreda Finance Offices will transfer money to the Community Based Organizations implementing CIF sub-projects. Community Participation in
79 procurement method will be used widely; which implies the use oflocal currency in contractual payments, and that SOEs will be the basis for replenishment ofthe Special Account on a regular basis.
37. Disbursement ofIDA finds to the Designated Account will initially follow Transaction- Based Disbursement through the use ofstatement ofexpenditures (SOE). The Transaction- Based Disbursement Method will be used during at least the first two years ofimplementation. In order for the project to move from transaction based disbursement to report based disbursement where six monthly forecasts ofexpenditure are paid quarterly hence ensuring the project has adequate funding at all times, PCDP I1will during implementation have to meet the following requirements: (a) sustain satisfactory financial management rating during the project's supervision; (b) submit Interim Financial Reports consistent with the agreed form and content within 45 days ofthe end ofeach reporting period, and (c) submit all expected Audit Reports by the due date.
38. The find flow arrangement for the project is summarized in the following chart.
IDA Credit IFAD Credit A
Designated Designated Account A in US$ Account B in US$ nt MnF A /FPf'T T nt MnF A /FPf'T T
Birr account A at Birr account B at MoFNFPCU MoFNFPCU
Birr account at 1woreda finance
39. The allocation ofIDA Credit and Grant proceeds will be "ased on the project components. This will facilitate the monitoring ofthe project performance indicators as well as financial aspects since expenditures are directly allocated to components. Requests for replenishment of the Designated Account for expenditures incurred under each component will be based on expenditures incurred at the implementing agencies for which justification ofutilization has been provided.
80 40. The FPCU will be responsible for paying to contractors, service providers and suppliers for all works done, goods procured and services obtained at the federal level. Likewise, RPCUs will be responsible for effecting payments for all services obtained and goods procured in their offices. Communities will be responsible for the same with respect to the implementation ofCIF sub-projects, with support from woreda finance officers if necessary.
Reporting on use of IDA Credit and Grant Proceeds and SOE limits
41, Disbursements for all expenditures should be made against full documentation except for contracts valued at less than as follows: i)US$200,000 for works; (ii)US$200,000 for goods; (iii)US$ 100,000 for consulting firms and (iv) US$ 50,000 for individual consultants (v) training and workshops, and operating costs on all contracts regardless ofthe amount which will be claimed on the basis ofStatement ofExpenditures (SOEs). All supporting documentation for SOEs will be retained at each ofthe offices where financial transactions occurred. They will be kept in a manner readily accessible for review by regular IDA missions and internal and external auditors. The statement ofexpenditures will be included in the Withdrawal Applications that will be submitted to IDA on a monthly basis.
42. The supporting documentation for reporting eligible expenditures paid from the Designated Account will be summary reports and records evidencing eligible expenditures for payments against contacts valued above the SOE thresholds defined above. The supporting documentation for direct payment requests should be records evidencing eligible expenditures (i.e., copies of receipts, suppliers’ invoices, etc). The project will submit a bank statement and a reconciliation ofthe Designated Account together with the Withdrawal Application on a monthly basis.
Minimum Value ofApplication
43. The Minimum Value ofApplications for Direct Payment US$ 100,000, and for Reimbursement and Special Commitments the minimum amount is US$200,000.
Counterpart Funding
Regional Governments will make an amount of US$ Smillion available to support implementation of CIF subprojects in the course of the Project. The first installment of these resources will be made available to the FPCU not later than: (i)October 15, 2008 an initial amount equivalent to $1,000,000 for the first year of implementation of the Project. Subsequently, on October 15 of each Fiscal Year thereafter during Project implementation, such amount as shall be required to ensure that the FPCU has available to it a total of the initial amount referred to above for the following Fiscal Year
81 Allocation of IDA Credit and Grant Proceeds
1,400,000 100%
2,000,000 Subprojects, DPSI and DER 100%
2,000,000 100%
16,300,000 100%
700,000 100%
DER Subprojects 1,500,000 100%
5,500,000 100%
3,800,000 100%
44. The Closing Date ofthe proposed IDA Credit and IDA Grant will be December 31,2013. The proposed IDA Credit and IDA Grant would be disbursed against the categories shown in the above table in a proportionate manner across all disbursement categories. Disbursements will be
82 made in accordance with procedures and policies outlined in the Bank's Disbursement Handbook.
Financial Reporting
45. Financial reports will be designed to provide quality and timely information on project performance to project management, IDA and other relevant stakeholders. The existing accounting and reporting systems ofFPCU, RPCUs and woreda finance offices are capable of producing the required information regarding project resources and expenditures. Duties ofeach implementing entity in the preparation ofthe regular financial reports are explained below.
1. Based on the regular reports received from RPCUs, it is the responsibility of FPCU to prepare consolidated quarterly Interim un-audited Financial Reports (IFRs) and annual accounts and facilitate the external audit ofthe consolidated accounts. 2. Based on regular reports received from woreda finance offices, RPCUs prepare and submit to FPCU a consolidated quarterly financial report. 3. Woreda finance offices are responsible for preparing and submitting quarterly reports to RPCUs. 46. Formats ofthe interim financial reports for this project (APL-11) will largely be the ones used by the ongoing APL-I and it will be agreed with IDA during project negotiation. In addition, the formats will be included in the financial management manual ofthe project.
47. On the basis offinancial reports received from RPCUs, the FPCU will submit a consolidated IFR to IDA within 45 days after the end ofeach quarter. As explained above, submission of regular financial reports to the higher tiers will be conducted within the timeframe prescribed in the financial management manual. The consolidated IFR by the FPCU shall include, at a minimum, the following: statement ofsources and uses offunds; statement ofexpenditures classified by Project components and or disbursement category (with additional information on expenditure types) showing comparisons with budgets for the reporting quarter and cumulatively for the project life; beginning and ending cash balances; cash forecast for the next six months; explanatory notes to the IFR; Designated Account activity statements.
48. In compliance with International Accounting Standards and IDA requirements, the FPCU will produce annual financial statements. These include: (i)a Balance Sheet that shows Assets, Liabilities and Fund balances; (ii)a Statement ofSources and Uses ofFunds showing all the sources ofProject finds, expenditures analyzed by Project component and or category; (iii)a Designated Account Activity Statement; (iv) a Summary ofWithdrawals using SOE, listing individual withdrawal applications by reference number, date and amount; and (v) Notes related to significant accounting policies and accounting standards adopted by management and underlying the preparation offinancial statements. These financial statements will be submitted for audit at the end ofeach year.
49. The FPCU has submitted to IDA quarterly IFRs up to December 31,2007. Contents and quality ofIFRs have improved over time taking into account recommendations given by the
83 Bank’s various supervision missions. Further attempts are being made by the FPCU to address measures recommended in the last supervision mission (Nov 2007).
50. No later than April 30 ofeach year, the FPCU will submit to the project steering committee, with a copy to IDA, the proposed Annual Work Programs. This will detail activities, associated unit costs and an implementation timetable. It will also include monitor able progress indicators for each proposed activity. In addition, the FPCU will submit semi-annual progress reports to its Board showing budgeted and actual expenditures, source offunds used, statements ofprogress achieved on the basis ofthe agreed upon indicators and the (revised) objectives and financial reports for the forthcoming six months
Auditing
5 1. The Office ofthe Federal Auditor General (OFAG) is responsible to carry out the audit ofall the financial transactions ofthe federal government and subsidies to the regions. Each ofthe regions has regional auditor general responsible to audit financial transactions in the region. OFAG usually delegate its responsibility mostly to the Audit Services Corporations (ASC), the government owned audit firm, and in some cases to private audit firms to carry out the audit of donor-financed projects. The ASC and most ofthe private audit firms conduct audits in accordance with international standards on auditing. For this project, OFAG will assign external auditors acceptable to IDA. The project external auditors with qualifications experience and TORS satisfactory to IDA, should be recruited within 90 days after IDA Credit and IDA Grant effectiveness. The auditor will conduct interim audit ofthe accounts within six months of effectiveness and will produce an interim management letter indicating internal control weakness if there are any.
52. According to the audit policy ofIDA, the FPCU will each prepare consolidated project annual accounts, including all the statements explained above, and the auditors will express a single opinion on each ofthese consolidated accounts.
53. The FPCU will submit to IDA audit reports six months after the end ofeach fiscal year, which ends on 7 July ofeach year.
Audit Report Due Date The project audit report - by FPCU By January 7 of each year (starting 2008)
84 Conditionalities
1. The Recipient has adopted a Project Implementation Manual, setting out the administrative and financial procedures including procurement and disbursement procedures, in form and substance satisfactory to the Association. 2. The Recipient has submitted a project implementation plan for the first eighteen months of the Project, in form and substance satisfactory to the Association. 3, The Recipient has submitted evidence satisfactory to the Association demonstrating the clearance of any material balances in the inter-fund accounts under the first phase of the Program.
Supervision Plan A financial management supervision mission will be conducted over the project lifetime. Considering the nature ofthe project, the Bank's supervision mission should be as regular as possible. Each year, there should be at least two main supervision missions and another two interim supervision missions by the country office staff and the FPCU. This explains the FMS supervision needs based on the risk analysis.
Financial Covenants 1. The project will submit the audited project accounts to IDA within six months after the end of each fiscal year. The fiscal year ends on 7 July of each year. In addition, the Government shall submit to the World Bank an interim audit reports, on a semi-annual basis, for the initial two years of Project implementation, no later than 90 days after the end of each relevant semi-annual period. 2. The FPCU, after receiving the financial reports from all implementing agencies (WCUs and woreda finance offices), will submit Interim un-audited Financial Reports (IFR) to IDA forty-five days after the end ofeach quarter.
Undertakings 1. Recruitment of internal auditors in Somalia and Afar region within 180 after Credit and Grant Effectiveness. 2. The PIM will specify that no resources for CIF sub-projects will be disbursed to beneficiary woredas where no financial accountant is in place.
85 Financial Management Action Plan
Item Action to be taken Expected completion Responsible date Body 1 Revise the existing FM manual and annex to PIM Before effectiveness FPCU 2 Clear inter-fund account balances( Inter-fund Before effectiveness FPCU, balances between implementing agenesis should RPCUS, agree and be eliminated at consolidation) woredas 3 Recruit accountants in the new woredas, Within 90 days of FPCU and Effectiveness RPCU 4 Recruit internal auditors Somalia and Afar region’ Six months after FPCU and effectiveness RPCU 5 Recruit external auditor for APL-I1 (contract 90 days after Credit and FPCU signed) Grant effectiveness (dated covenant)
’ One for each Region
86 Annex 8: Procurement Arrangements ETHIOPIA: Pastoral Community Development Project I1
A. General
1. Procurement for the proposed project would be carried out in accordance wLthe Woi 1 Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004, revised October 2006; and “Guidelines: Selection and Employment ofConsultants by World Bank Borrowers” dated May 2004, revised October 2006 and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the IDA Credit and the IDA 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 Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
2. Procurement of Works: Works procured under this project would include: (i)interventions under the Sustainable Livelihoods Enhancement Component for sub-projects costing $5,000 equivalent excluding community contribution per community of 100 persons, or $30,000 equivalent excluding community contribution per 500 households. These would involve shallow hand dug or drilled wells, springs, ponds, haJirs, and birkas for water supply improvements; as well as micro-scale irrigation; Healthcare; and Education infrastructure. (ii)interventions for Pastoral Risk Management including framework contracts to implement works from the “shelf plans”; small feeder roads; improved catchment management, and fodder banks under the Disaster Contingency Fund and the Disaster Prevention Strategic Investment Program (DPSIP). 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. Communities will be facilitated to plan, select, design and implement sub-projects oftheir choice and will contribute at least 15% ofthe cost ofthe sub-project. The details ofthe community participation in procurement under such sub-projects can be found in the Procurement and Contract Administration Manual as part ofthe Project Implementation Manual (PIM)
3. Procurement of Goods: Goods procured under this project would include human and animal vaccines, farm tools for strategic restocking under the DER Grants through framework contract to supply goods in the “shelf plans”; vehicles and motorcycles for monitoring and survey work; office equipment and hiture; and GPS equipment and seeds and animals for restocking using Community Participation in procurement. The procurement will be done using the Bank’s SBD for all ICB and National SBD agreed with or satisfactory to the Bank.
4. Procurement of non-consulting services: Non-consulting services to be procured under the project would involve a framework contract for the provision oftransport ofwater, and livestock or fodder movements, under the DER Grants; as well as contracts for the installation and maintenance ofVHF radio communication on vehicles; and the provision ofinternet connectivity using the Bank’s sample bidding documents for the procurement ofnon-consulting services.
87 5. Selection of Consultants: The consulting assignments to be contracted to firms will include: Income Generating Group formation and support, under the Rural Livelihoods Program; preparation of“shelf plans”, Research Grants, Environmental Impact Assessments, and Strategic Disaster Preparedness Plans under the Pastoral Risk Management component; and assignments for knowledge management and participatory learning under the and Participatory Learning and Knowledge Management (PLKM) Component. Assignments to be contracted to individual consultants will be in the areas of: preparing the Pastoral Savings and Credit Manual, organization ofpeace building meetings, project staff and strengthened MSTs. Short lists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely ofnational consultants in accordance with the provisions ofparagraph 2.7 of the Consultant Guidelines. Under the Pastoral Risk Management component, a Memorandum of Understanding will be signed with the Ministry ofAgriculture and Rural Development’s Early Warning and Response Department to implement the Pastoral Early Warning program.
6. Universities, government research institutions, public training institutions, CSOs, may be engaged under the PLKM component on exceptional and case-by-case basis to participate in policy and other demand driven research and knowledge management contracts.
7. Operating Costs: The operating costs which would be financed by the project include fuel and vehicle running and maintenance costs, stationary and sundries; advertising and other office running costs. These would be procured using the Government’s administrative procedures which were reviewed and found acceptable to the Bank. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procurement, will be included in the Procurement and Contracts Administration Manual.
B. Assessment of the Agency’s Capacity to Implement Procurement
8. The PCDP I1will follow a Community Driven Development (CDD) approach to project implementation; therefore the majority ofthe procurement activities will be carried out by the beneficiary communities, while the large ticket items will be procured by the FPCU and the RPCUs under the Ministry ofFederal Affairs and Pastoral Development Offices respectively. The FPCU function includes overall project coordination and management, monitoring and evaluation, capacity building and project reporting. Each region will have a RPCUto manage project funds flows link the government institutions with the civil society and facilitate beneficiary community participation in the project across the woredas and kebeles. The procurement function is staffed by an FPCU Procurement Officer, RPCU Procurement Officers in each region and procurement officers in MSTs at the woreda level.
9. An assessment ofthe capacity ofthe Implementing Agencies to implement procurement actions for the project has been carried out by Henry Mutwiri Riungu; Samuel Haile Selassie; and Richard Olowo between March 3 and 19,2008 and supplemented by the Post Procurement Review (PPR) mission report prepared by a Consultant for the SNNP Region prepared by a Consultant. The assessment reviewed the organizational structure for implementing the project and the interaction between the project’s staff responsible for procurement and the Ministry’s relevant central unit for administration and finance.
88 10. The key issues and risks concerning procurement for implementation ofthe project have been identified and include:
a. The Procurement Environment. The PCDP I1will involve a few contracts for large ticket items procured by the FPCU and RPCU, as well as numerous small contracts procured by the beneficiaries, with community participation in procurement. The legal framework and Standard Bidding Documents (SBDs) for public procurement in Ethiopia are fairly robust, but there is lack ofcapacity for the oversight and operational functions. Procurement Units and a procurement cadre have not been institutionalized in the civil service structures, and there is no capacity-building strategy being implemented to professionalize the procurement fiction. The definition of“Community” is broad, and therefore the communities will likely vary in size, name and organization depending on where and by whom it is formed, e.g.: (i) by group ofyouth with common interest, or (ii)by a kebele.
b. Organization of the Procurement Function. There are three levels at which procurement is done: (i)At the federal level, the FPCU processes procurement for both federal level and consolidated requirements from the regions. A Procurement Committee offive members chaired by a senior official ofthe Ministry ofFederal Affairs meets for public bid opening and contracts adjudication. The Project Coordinator has the authority to approve the Procurement Committee recommendations. The Procurement Specialist has contract management responsibilities. (ii)At the regional level, a similar arrangement exists at the RPCU, and the Procurement Committee is chaired by a senior official for the Pastoralist Affairs Bureau. Again, the Project Coordinator has the authority to approve the Procurement Committee recommendations. (iii)At the woreda and communitylkebele level, there are slight variations ofthe organization, but each kebele has three committees for: Project Management with five members; Procurement with three members; and Project Audit with three members. The Woreda Development Committee (WDC) has the approval authority ofthe community priorities.
c. StafJing. At the FPCU, only one Procurement Officer out oftwo is in place. At the two regions that were sampled, SNNPR had a Procurement specialist at the RPCU but two Procurement Officers at the woreda level had left their jobs. The Oromiya region did not have any Procurement staff at the RPCU, and the Finance Officer was acting and in Fantale woreda there was no Procurement staff although a Community volunteer was acting. The Oromiya region reported that it had a high turn-over of staff with staff lasting on average three months before they move on.
d. Procurement Planning and Execution. The FPCU, RPCUs and woredas that have implemented PCDP Ihave been trained to, and now have experience in systematically preparing project procurement plans. Procurement plans are prepared by consolidating the requests ofbeneficiaries, estimating the contract amount, selecting the procurement method, scheduling the procurement activities including the contract management activities, and obtaining approval ofthe plans. Bidding
89 opportunities are advertised in the press or posted on local notice boards for sealed bids; the Procurement Committees witness the public bid openings and endorse the bids. Bids are evaluated by technical persons supported by Procurement Officers who prepare the bid evaluation reports for consideration by the Procurement Committees. At both the FPCU and RPCU the Project Coordinator is the procurement approval authority, while the at the woreda and Kebele level, the WDC is the procurement approval authority. The procurement approval is required first for the membership to the evaluation teams, and then for the contract award recommendations made by the Procurement Committees.
e. A project Procurement and Contract Administration Manual is available, but with translation only to the Amharic language but not to the Oromifa and other local languages. Two misprocurements were declared under PCDP I,leading to the temporary suspension ofdisbursements to the Somali region. The misprocurement at the FPCU was due to non-compliance with the procurement rules in the selection of consultants. However, misprocurement at the Somali region, was due to suspected collusion in the preparation ofbids leading to uncompetitive contract prices for furniture. The Project Audit Committees inspect to verify delivery and witness storage ofsupplies; witness, and verify the issue ofproject supplies from woredu stores; and verify the proper use ofproject supplies at the final project sites.
f. Procurement Records Management. There are procurement files in place, however they all lack financial information which is separately kept in the Finance section. The information on record is mostly in Amharic, but some in the English language and is not systematically filed.
g. Internal Controls and Oversight. Procurement Specialists are also responsible for contract management which may create a potential or perceived conflict ofinterest. However, national oversight at the political level is provided by the Federal Inter Ministerial Board (FIB) which will bring together the ministries ofAgriculture and Rural Development, Water, Health, Water, Infrastructure as well as the Livestock Marketing Authority and the Parliamentary Standing Committee on Pastoral Development (PSCPD). Below that, the Public Procurement Authority (PPA) has started conducting procurement audits at the federal level, but the PPA has serious capacity constraints and has not audited any Bank-financed projects yet. At the regions, the Project Audit Committees are the oversight arrangement.
11. The overall project risk for procurement is HIGH.
12. The corrective measures which have been agreed are in the table below:
90 Schedule of Corrective Actions to be Carried Out
Lack ofadequate Preparing and submitting to IDA the draft guidance on updated Project Procurement and Contract community Administration Manual (forming part of Participation in the PIM) with a description of a PCDP IIRegions Prior to effectiveness Procurement procurement monitoring and reporting including the system based on which the PCDP I1will detailed procedures regularly review the procurement and documentation. activities in each o f the regions. Inadequate National Competitive Bidding (NCB) competitive bidding shall follow the Recipient’s procurement procedures ofthe procedures subject to the following Recipient additional procedures: (i)the Recipient’s standard bid documents for procurement ofgoods and works shall be used; (ii)if pre-qualification is used, the Bank’s standard prequalification document shall Whenever NCB be used; (iii)margin ofpreference shall PCDP IVRegions procurement method is not be applicable; (iv) bidders shall be used. given a minimum of30 days to submit bids from the date ofavailability ofthe bidding documents; (v) the use ofthe merit point system shall not be allowed in bid evaluation, (vi) the process does not preclude participation by foreign bidders; and (vii) results ofevaluation and award ofcontract shall be made public. Procurement Staff Strengthen the MSTs by revising the TOR turn-over and including Procurement officers on the PCDP I1 Prior to effectiveness teams. Procurement training session program PCDP I1I Regions I Project launching focused on procurement planning and Woredas I Kebeles workshop contract management issues
Insufficient As needed during the Participation ofthe procurement staff in life ofthe Project and in procurement skills PCDP I1I Regions / World Bank procurement workshops accordance with an Woredas Kebeles andor training events approved annual training program
13. The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on April 10,2008 and is available at the Federal Project Coordination Unit ofthe PCDP at the Ministry of Federal Affairs. 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.
91 D. Frequency of Procurement Supervision
14. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment ofthe Implementing Agency has recommended semi-annual supervision missions to visit the field to carry out post review ofprocurement actions.
E. Procurement Plan
1. Goods, Works, and Non Consulting Services
(a) List ofcontract packages:
- ~ 1 2 I3 4 5 6 718 9 Review Pre Estimated Procure Demestic Ref. Qualifica Contract (description) cost ment Preference Comments tion Yes/ No. %(OOO) method Yes/No No - ~ ~~ Goods Equipment, Materials and a. I -1 ICB No No 2 ICB No No - First package Computer equipment, 3 ICB No No Prior of IT networks and soft ware - I 09/01/09 equipment. Second Computer equipment, 4 $660 ICB No No Prior 07/09/09 package of IT networks and soft ware equipment. Specialized Equipments for Early warnings (GPS, A0 5 $265 ICB No No Prior 08110109 Plotter, and GPS software - eis) Supplies and office Office Equipment and materials supplies to New Region, procurement 6 $117 NS No No FPCU and all other region will be planned for all project years -IPost 1 Tbd according to needs identified All 5 regions Field Equipment and will execute 7 Extension Aids for 18 $259 NS Post Tbd as per their woredas in 5 RPCU specific schedule Office Furniture and All 5 regions Apparatus for New woredas will execute 8 and additional for existing $216 NS No No Post Tbd as per their offices (FPCU, WCU, specific PDOs) schedule Total $6,155
92 (b) Contracts estimated to cost US$200,000 equivalent or more per contract and all direct contracting will be subject to prior review by the Bank. Contracts estimated to cost US$200,000 equivalent or more per contract will be procured using the International Competitive Bidding (ICB) procedure
2. Consulting Services
(a) List of consulting assignments with short-list of international firms.
1 2 3 5 6 7
Expected Estimated Review Ref. Selection proposal Contract (description) cost by Bank Comments No. method submission $(OOO) (Prior I date Post) Consulting Services International Technical Assistance Environment Impact For 30 existing 1 Assessment and studies $22 1 QCBS No 02/23/09 woredas for existing CIF woredas Environment Impact Forthe 18 new 2 Assessment and studies $277 QCBS No 03/25/09 PCDP I1woredas I for existing CIF woredas I I M&E and MIS soft ware I 3 1 development and I $80 CQ No 0 113 1/09 I upgrading I Design WANILAN connection and internet $79 No 0 1/12/08 accessing ofRPCUPCDP CQ woredas Regional strategic disaster 5to6CQ preparedness plan - and selections will be 100 Woredas DPCP - carried out. $403 No various CQ (contracts for less than $100 000 each) Project component/ At least 4 subcomponent manual individual development: pastoral consultants are RUSACCO, CIF, DPSI, expected to carry $200 IC No various DER and fiduciary out the listed manuals. assignments (contracts for less than $50 000 each). Project implementation To be determined assessment and evaluation after MTR. QCBS No 101231 1 0 after execution of 1st half
Total $1,400
93 (b) Consultancy services provided by consulting firms estimated to cost US $100,000 equivalent or more per contract and single source selection ofconsultants (firms) will be subject to prior review by the Bank. Consultants’ services contracts ofindividual consultant for procurement officers and single source selection, will be subject to prior review by the Bank.
(c) Short lists composed entirely ofnational consultants: Short lists ofconsultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 ofthe Consultant Guidelines.
94 Annex 9: Anti-Corruption Action Plan Pastoral Community Development Project I1
1. The objective ofthis Anti-corruption Action Plan for this project is to identify corruption risks and mitigation measures beyond the standard control systems employed by the Bank. While more detailed, program-specific control systems are outlined in Annex 7: Financial Management & Disbursement Arrangements and Annex 8: Procurement Arrangements, this Action Plan: (a) proposes the mapping of the potential risks of corruption; and (b) presents a suggested program ofactivities to address potential risks in the form ofan Action Plan.
A. Corruption Mapping
2. Limiting the occurrence of corruption in this project starts with identifying potential risk areas - this is called corruption mapping. A corruption matrix identifies potential risks of corruption and specifies specific mitigation measures that have been agreed by the FPCUPCDP. The mapping exercise will be repeated during the lifetime of the project to incorporate innovations and lessons learned.
Transfer of funds M Leakage of funds in transfer from L national, to regional, to woreda level
PROGRAM DESIGN AND MAN/ ZEMENT Staff turnover has meant that a PCDP I1will supplement woreda staff M capacity of FPCC, significant percentage of PCDP staff in each woreda with MST procurement RPCU, and woreda has changed specialist, one assistant finance officer staff There is also a high level of staff and one assistant pastoralist turnover of Government woreda development officer personnel PCDP I1will provide regular training to Technical qualifications of woreda its personnel sector personnel sometimes Increased focus of PCDP I1CIF on questionable community level should reduce burden / responsibility ofworeda offices Favoritism in S Nepotism and favoritism in The PCDP I1 PIMwill specify M personnel appointment ofRPCU and Woreda procedures for competitive recruitment management staff as well as sanctions in cases where procedures not respected
Lack of accountability S Conflict of interest for staff The PIMwill clearly specify roles and M ofmanagement and members responsibilities of all staff implementation staff. Overlapping roles and The PIMwill specify criteria and responsibilities; performance indicators for key staff, Dual accountability - staff and there will be an annual accountable to both regional and performance review of all staff woreda levels A training plan for the first year ofthe
95 Absenteeism - Risk of project staff uromam will be submitted bv the not attending posts. kP&JPCDPas part of the PIM Abuse of facilities, vehicles for The PIM will include procedures to private use measure absenteeism and sanctions for absenteeism The PIM will include procedures for vehicle management, and measures to sanction abuse. Logistics officers to be recruited at federal and regional levels should improve project asset management Audit Report M Risk of unavailability of information The FPCUPCDP will make final audit Publication on the progress and results of reports promptly and publicly available project implementation(including on the project website, along with the misuse, collusion and nepotism, if formal government response to issues
I
TENDERING AND P )CUREM JT Capacity ofthe FPCU S Non-independent judgment of the Independent professionals included as M and TendedEvaluation consultant evaluation process. part of the proposal evaluation team for any major procurement. Committee Decisions bias towards consultants as “instructed” by the higher level Capacity building for all actors or officials other parties. involved in procurement.
PIM to specify and streamline all procedures and sanctiodcomplaint handling mechanisms.
Proposal evaluation S Delay in evaluation process that The procurement plan, with detailed M would benefit exclusive consultants timeline, will be binding in the legal agreement, and will set as the basis for any procurement actions.
Proposals are rejected due to reasons The Bank would impose appropriate unrelated to the capacity of sanctions for any unjustified extension consultants in carrying out of the of validity of proposals. contractsiservices
Significantly high technical scores The estimated budget for each contract allocated to the “preferred” package will be based on actual consultants, such that no other experience determined through phase I consultants can effectively beat their proposals regardless of the prices, which could result to significantly high prices Any evidence of collusion or fraud will False data provided by the result in rejection of proposal and consultants disqualification of the bidders.
At community-level, proposal evaluation to be conducted publicly
96 Award of Contract, S Negotiation with prospective winner M including in sub- on contract amount outside of rigid. Prices will be carefully reviewed projects regular procedures. based on PCDP Iexperience. WB post-procurement reviews will be Project management does not conducted on an annual basis execute award as described by the Tender Evaluation Committee
Collusion and nepotism in awarding Mandatory disclosure of contract the contract awards. Procurement Planning, M Risk of kickback, and budget Mandatory review by the Bank of L including in sub- markup annual project procurement planning projects and disclosure ofprocurement plan in public domain, including disclosing the contract amount in PCDP website and in every RPCU
Woreda procurement assistants to review all community sub-project procurement plans
Regular assessment and analysis of the unit Drices bv the Bank team. Overall Procurement M Risk of kickback, collusive practices Enhanced control system (internal and L to “award” the contract to external) including internal audit offices “preferred” consultants, and lower quality of services Regular checks on a random sampling of project invoices. Inclusion of clear procurement arrangements in the PIM. Quality & Cost of S The delivered services are of lower Involvement of community groups in M delivered services quality than those specified in the monitoring the quality of the TOR, with “savings” possibly used consultants’ deliverables at community as kickbacks to local officials. and woreda levels: (for example: community accountability and audit Significant changes of key staff of committee, woreda accountability consultants at the early stage of the committee) assignment Intentionally low quality of Stronger presence and accountability supervision of contracts, and role of MSTs kickback from the consultants MIS will track budgeted vs. actual expenditures for each sub-project
Enhanced complaint handling mechanism.
Sanctions will be specified in the PIM
All sub-project financial information is made public at the woreda office
For purchases above US$5,000 each, the project requires the conduct to conduct a limited bid whereby quotations must be read out in public. For smaller purchases, local shopping
97 I must be carried out by two persons seeking quotations from local suppliers.
CONSTRUCTION Fraud linked to S Poor quality materials, workmanship Strengthening ofcommunity-level, M materials and bv contractors project.I management, procurement as construction Cover up and silence payments well accountability &monitoring (including at linked to poor construction committees community level) Collusion and bribery of inspection Clear accountability for woreda M ctnff procurement assistant Enhanced oversight from regional audit M personnel Materials diverted to officials or M Enhanced monitoring from MSTs, non-beneficiaries use woreda assistant pastoral development officers and RPCUs External audit frequency increased FPCU to review RPCUprocurement on semi-annual basis
WOREDA & COMMl UTY LE\ L CORRUPTION Sub-project selection S Interference in decision-making in Clear procedures for sub-project M at woreda level selection and approval of plans / selection at woreda level in PIM proposals Greater presence, sensitization, training Non-transparent selection of and facilitation by MSTs projects Strengthening of woreda accountability At woreda level approval of projects committees could be influenced by few woreda Availability ofworeda level complaints officials mechanism Capture of sub- S Funds expropriated for personal use Clear and inclusive procedures for sub- M projects at community Clan leaders and other elite project selection at woreda level in PIM level by elite or by members ofthe community capture Greater presence, sensitization, training particular ethnic/clan benefits intended for all, or intended and facilitation by MSTs & Community groups for other members ofthe community Facilitators (e.g. women). Strengthening ofcommunity Leaders fund their own not accountability & monitoring community preferences committees Availability ofworeda level complaints mechanism Selection ofProject S Non-transparent process of Clear and inclusive procedures for M committee members committee member selection at committee election in PIM (at woreda and woreda and/or community levels Committee establishment to be community levels) resulting in low integrity facilitated and monitored by MSTs RPCU monitoring of this process to be strengthened ~ Facilitators manipulate S MSTs/Community Facilitators do Woreda assistant PDO to monitor M project benefits not reflect kebele needs and Availability ofworeda level complaints priorities/ change proposals mechanism RPCU to monitor MST performance Fraudulent Eligibility S Communities say they have Enhanced project monitoring through M achieved certain criteria (e.g. woreda-level assistant PDO as well as
98 community contributions, group formation) FPCU to conduct regular supervision visits to all project woredas Limited dissemination S Information is kept limited to certain Socialization will be carried out M of information related circulation or group of people only through meetings, workshops and focus to PCDP (e.g. such that non-qualifiedproposals group discussions at community, accessibility could be expected woreda and regional levels. It will also requirements) include a campaign through newspaper spots and radio programs. The socialization strategy is geared towards making communities aware of the project’s goals, and its rules and regulations. These are aimed to ensure that stakeholders know what their respective roles and responsibilities are, and how to hold each other accountable for their actions. All project decisions to be posted at woreda level PCDP I1will have project website Implementationof the S Misuse of funds by the community All communities and woredas are M sub-project and/or Woreda required to prepare and submit reports investments on progress and their use of project funds to the RPCU and the FPCU.
All financial information is made public and displayed in the woreda offices. Minutes of meetings, community quarterly financial status, and names and amounts for funded proposals are posted on signboards that are displayed around the woreda and at RPCUs.
Discretion of actors is limited by setting rules that all financial transactions require at least three signatures, two from the elected community members and one from the project woreda procurement assistant. Any procurement beyond the sub- project will be undertaken either at RPCU or FPCU levels PCDP I1 finances will be audited each year. There will be at least one community accountability meeting per sub-project cycle.
99 B. The Action Plan
3. Risks identified through the below mapping exercise will be mitigated through a set of anti-corruption activities. This anti-corruption strategy has been developed to tackle the framework of implementation and the community driven dimensions to the program. Along with the supply side mechanisms envisaged, community participation and empowerment are crucial to the success of the project and to the mitigation of corruption risks. Together, these factors will encourage greater accountability and better governance.
4. The most important aspects ofthe anti-corruption action plan can be summarized into the five key elements that follow. Underpinning each of these elements is the participatory methodology and the high levels of oversight in pastoralist communities - this needs to be harnessed to project ends with appropriate training and exposure at the outset.
(i)Enhanced Disclosure Provisions and Transparency. The program will involve government’s own disclosure requirements, further simplifying disclosed materials and making them readily available through FPCUs and RpCUs. Key information on planning, budgets and performance will be made available to communities by a range ofmeans, including public meetings and notice boards. Specific disclosure measures will include, but not be limited to:
Public disclosure of annual procurement plans and schedules (and their updates), bidding documents and requests for proposals. Disclosure to all bidders of the summary of the evaluation and comparison of bids, proposals, offers, and quotations, after the successful bidder is notified. Disclosure ofaudit reports.
(ii)Multi-stakeholder Oversight. The program recognizes that greater oversight by a range ofstakeholders is likely to reduce the risk ofcorruption and misuse ofpower. The program involves a high degree offormal participation by community groups, such as beneficiaries, community project management committees, woreda development committees, private sector, and traditional leaders, at the planning stage. This will be extended to mechanisms such as the monitoring ofthe projectdend results, placing citizens as members in tender committees oflarger sub-projects, and the evaluation ofthe quality ofdelivery procured services/products. The role of civil society organizations will also be considered as evaluators on a random basis.
(iii)Mitigating Collusion, Fraud & Nepotism. Opportunities for collusion and fraud exist in any project and this is also the case with PCDP I1which operates at woreda, kebele and sub-kebele levels. At the outset, collusion, fraud and nepotism will be reduced through transparent and well-advertised procurement activities. Additional auditing and procurement procedures are proposed, such as oversight by technical assistance (TA) and capacity building, with TA procurement and financial management specialists mapped to each region. The FPCU Will commission an independent consultant to carry out Annual Performance evaluations ofworeda activities (including the behavior of consultants and contractors) hired at the federal, regional and woreda levels. The FPCU will circulate
100 results to relevant technical parties. Cases ofcollusion, fraud and nepotism will be reported directly to the institution mandated by Ethiopian law.
(iv) Complaints Handling Mechanism. Complaint handling procedures, as currently defined at kebele and woreda level will be assessed and compared with the reality ofcomplaints, and complaints handling on the ground in the four participating regions. Appropriate mechanisms will be set up at the regional level (in consultation with the REACs). This mechanism should also increase the social cost ofmisuse offunds. Complaints will be properly documented and acted upon in a professional and timely fashion, and without risk ofreprisal to 'whistleblowers' in the public. Wider access for community input is provided through the establishment ofan independent organization nominated by the project to handle and receive complaints by mail. This address will be posted to public centers along with other public information materials (such as posters) to be made publicly available on an ongoing basis.
(v) Sanctions & Remedies. Clear sanctions and remedies are important final steps in the effort to fight corruption. Formal sanctions will be applied through formal channels in all cases. Any official (government, non-government, etc.), community member, or private sector entity participating in the project can be prosecuted if sufficient evidence is available for its involvement and acts ofcorruption. It is intended that in all procurement contracts, evidence ofcorruption, collusion or nepotism will result in termination ofthe relevant contract, with additional penalties potentially imposed (such as fines, blacklisting, returning disbursed finds, etc.) in accordance with Bank and Government regulations. If annual performance assessments detect the misuse offunds, further allocation will cease to the financial entity (region, woreda, community) in question. Information regarding successful cases, where lessons are learned and funds are retrieved, will be widely disseminated.
101 Annex 10: Economic and Financial Analysis ETHIOPIA: Pastoral Community Development Project I1
INTRODUCTION
1, The Project addresses improvements in rural livelihoods in the Ethiopian lowlands in a holistic way through an integrated set ofinterventions with individual components and activities being mutually reinforcing and producing a diverse range ofbenefits. PRh4 measures, for example, increase the potential for profitable bio-off-take (i.e. meat, fiber, milk) and mitigate the effects ofanimal losses on society and the economy (e.g. disruption ofschooling and other social services and reduced government exposure to post-disaster recovery costs). One also needs to estimate the intervening factors which may impede or enhance the effects ofthe Project components, such as external (climatic, epidemic or macro-economic) shocks, interventions from other national projects and overall changes in the macro-environment.
2. Given the complementarities ofcomponents, a calculation ofeconomic benefits by component is oflimited value as it does not illustrate the multiple anticipated spillover effects between the Project’s activities. The analysis, therefore, focuses on: (i)disaster early warning and response; (ii)IGAs under the RLP; and (iii)the introduction ofa process ensuring sustainability and cost-effectiveness ofall project-supported investments. This annex presents steps that would need to be taken to ensure adherence to these principles.
FINANCIAL ANALYSIS
A. Sustainable Livelihoods Enhancement
(i)Community Investment Fund
3. The SLE component aims to improve access to and provision ofbasic public facilities and social services by establishing effective, transparent and socially inclusive mechanisms that facilitate pastoralists’ participation in prioritization and selection ofinvestments in PCDP I1 woredas and kebeles. These investments in terms ofsubprojects are characterized by: (i)their relatively small size in monetary terms; (ii)the demand-driven nature with an open menu to choose from; (iii)their multi-sectoral composition; and (iv) designs based on government standards. This makes conventional economic evaluation techniques not fblly relevant. Poor communities often value a minimum level ofsocial services and the associated building of human and social capital well above their actual economic value. Furthermore, the synergy ofthe development ofa range ofsocial services subprojects across a woreda is difficult to capture. At the same time, the CIF’s objective also targets the institutionalization ofmechanisms that facilitate citizens’ participation in the prioritization and selection ofinvestments in local public facilities throughout lowland Ethiopia and the establishment of systems of social accountability to ensure transparent use ofresources. The component is, therefore, seen as establishing the conditions and mechanisms for a delivery system ofpublic facilities and social services provided by local woreda governments throughout lowland Ethiopia. The analysis ofthe CIF investments in Phase Irevealed that most ofthe more than 2000 civil works implemented by community
102 groups through subprojects were cost-effective and timely relative to the alternative of government contracting their construction to private contractors.
(ii)Income-Generating Activities
4. The most important IGAs implemented during PCDP Iin the kebeles and woredas in all four regions included: (i)grain milling; sheep and goat rearing, fattening and marketing; (ii)milk processing and marketing; (iii)grain purchase and reselling; and (iv) petty trading. IGAs under Phase I,however, were poorly managed and monitored by the project, with minimum attention to counterpart contribution and little or no attempt to revolve finds. A PCDP I- financed study is currently evaluating their financial impact. The examples cited below are representative ofthe types of investment made by pastoral groups under Phase I.
Revenue from Total variable Net sale (per head) cost/head returdhead (ETW (ETB) (ETW Household: Grazing (plus 400g teff straws 73.5 44 29 per headday due to poor pasture) Household 2: Grazing plus supplementation (200g teff straw, 50g noug cake and 50g 154 101 53 wheat bran Der headfdav)
6. Under PCDP 11, IGAs will be financed by commercial credit issued through PCDP-supported cooperative credit unions, typically secured through group joint and several liability. Borrowers will have to have saved at least 20% oftheir investment in cash over an extended (6-8 month) period, during which their capacity to evaluate and manage their proposed investment will be enhanced.
B. Pastoral Risk Management
7. In eastern Africa, disaster early warning and response interventions are very recent, and little empirical data are available to quantify the linkage between ex ante adaptation and mitigation measures. However, experience indicates that preventive measures are more effective than post- disaster arrangements. In this analysis, livestock mortality is used as a measure ofpastoral risk, although the declines in health and productivity preceding livestock death (e.g. milk production, weight, conception rate) are likely to be equally important sources ofrisk. Since livestock account for most ofthe wealth ofEthiopian pastoralists, mortality provides a reasonable proxy for project-related PRM benefits throughout the Ethiopian lowlands. The direct economic benefits ofmanaging pastoral risks consist ofa reduction in livestock mortality and retention of livestock productive value, while wider economic and social benefits include, for example, the cost ofpost-disaster recovery including the social and financial cost ofthe urbanization of destitute pastoralists. The direct economic benefits ofthe PRM component can therefore be
103 estimated as a share ofthe sum ofthe replacement value ofadult livestock (including camels, cattle, sheep and goats) over project years.
8. Livestock mortality in “normal years” is estimated at 2% oftotal livestock per annum across livestock species. Livestock mortality during drought, which typically occurs one in five years, fiequently exceeds 30% ofthe total herd. Early response measures (vaccination, subsidized transportation, water and fodder carting, early herd movement to unaffected areas) are estimated to allow for the commercial off-take of up to 10% ofthe herd and a reduction in losses ofthe remainder of 10-20%.
Table 1: Costs and Potential Benefits: Scenario for PRM-based Livestock Mortality Savings
08/09 09/10 10/11 11/12 12/13
(US$ X1O6) (US$ X1O6) (US$ X1O6) (US$ X1O6) (US$ X1O6) PRM component: investment & recurrent 7.8 6.8 7.2 6.5 6.6 cost Total capital value ofpastoral herd (US$ 4,53 433 1 433 1 433 1 433 1 x106) Cost oflosses in normal year (2%) 90.6 90.6 90.6 90.6 90.6 Annualized cost ofcyclical drought (assume 25% oflivestock population 56.6 56.6 56.6 56.6 56.6 affected, 25% loss and drought occurrence every 5 years) Assume 15% oflosses avoidable through 8.5 8.5 8.5 8.5 8.5 PRM
9. Assuming the occurrence ofdrought every five years, a modest impact of25% losses for 25% ofthe total lowland herd, the average annual cost is estimated at US$70 million. Assuming that the PRM is able to prevent just 15% ofthose deaths through drought-mitigation measures, the annual cost ofthe PRM component would be economic. This estimate is conservative, given that the analysis does not include the future productivity ofbreeding livestock or the impact of productivity losses due to morbidity. The main assumptions for the economic analysis are that: (i)the livestock base stays constant over the life ofthe project, including relative distribution between animal species; and (ii)the average replacement value per adult animal (February 2007) is constant throughout the project at US$400 per camel, US$320 per cow, US$30 per sheep and US$20 per goat.
C. Sustainability and Cost Effectiveness
10. Sustainability and cost effectiveness are two key requirements for every investment funded by the Project. The sustainability requirement for IGAs also includes the demand that the investment should provide a decent long-term financial income for the owner whereas, for pure public goods, maintenance and management are more important aspects. The following definitions of sustainability and cost effectiveness will guide IGA and social investments under PCDP 11.
104 Sustainability would require that:
(9 The investment is profitable, namely that: a operational profits be positive: i.e. sales revenues minus (input cost + maintenance charge); e financial profits be positive: i.e. operational profits minus depreciation I savings charge; e financial profits per day of family labor should be high enough to offset alternative labor opportunities; e adequate savings are made to replace the investment good or an equivalent good at the end ofthe expected life-time of the investment good.
(ii) A maintenance plan for assets is established, including: e a description ofplanned periodical maintenance; and estimated cost ofspare parts and servicing needed.
(iii) A risk analysis and mitigation plan is established, including: e a description ofthe three main risks to profitability; and e a description ofmitigation measures to avoid these risks.
(W An agreed management structure and plan is established, including: e a simple worksheet addressing the requirements described above has been developed and will be included in the Project Implementation Plan, for use: a. during the CDD capacity-building efforts as part ofthe curriculum; b. during the PRA exercises to assess sustainability with the communities; c. as the baseline for PM&E; and d. during the Community Action Plan (CAP) decision meetings ofthe WDC.
11. The WDCs will approve fhding for CAPSonly when sustainability criteria are met. This worksheet would be used only for “public” or “social safety net” activities ofthe CDD component. Credit cooperatives, which will be the primary financiers ofprivate IGAs, will use credit manuals established under the FAD-supported RUSACCOs movement.
12. Cost eflectiveness would require that the least-costly assets be purchased that fulfill certain requirements which, bearing in mind the isolation, climatic and physical conditions in the project area, could be quite stringent and might exclude the cheapest available solutions (it is the cost- effectiveness ofthe investment over the entire required lifespan that matters). Public buildings will be built to government construction standards. The community procurement system that will be employed under PCDP I1will facilitate the cost effectiveness ofthe CDD projects. A provision in the budget has been made to review and enhance the community procurement system and to develop manuals for the MSTs and community partners. The MSTs and woreda procurement assistants will receive training in the use ofthe community procurement system.
105 D. Fiscal Impact
13. In the short run, the fiscal impact ofthe proposed project would be relatively neutral, given that only around 15% ofthe total project cost will be financed by the Government, primarily in the form ofdeferred taxes. In the long run, it is expected that the fiscal impact ofthe proposed project would be highly positive, owing to the increased tax base with the rise in economic activities and the savings ofpublic expenditure on climate-related relief efforts as a result of improved pastoral risk management. The Project’s recurrent cost implications would include the staffing and operation and maintenance ofpublic facilities such as schools and public health and veterinary clinics together with the supporting equipment. These recurrent costs, which will be partially met through service charges to users, are already factored into the Government’s long- term budget plan, which aims to provide universal education and health services to lowland communities.
106 Annex 11: Safeguard Policy Issues ETHIOPIA: Pastoral Community Development Project I1
1. PCDP-I1 environmental safeguard issues may arise fkom community-level project investments through the Community Investment Fund (CIF), Rural Livelihoods Program (RLP) and Disaster Preparedness Investment Program (DPIP). Typical investments are anticipated to include:
CIF RLP DPIP Schools 0 Grain mills Small-scale water Health posts 0 Milk collection and marketing supply Veterinary Posts 0 Rental houses Catchment management Small-scale water 0 Petty trade Small feeder roads supply (ponds, 0 Livestock fattening Boreholes: new and shallow wells, 0 Grain store and milling rehabilitation cisterns, water 0 Services shops and milk Rangeland pipeline extension, collection centers improvement spring development) Public shower and toilet Small damdponds and Small-scale irrigation service reservoirs Small feeder roads 0 Workshops River dikes Etc
2. These small-scale, geographically dispersed investments are expected to create little to no adverse impacts that will anyway be largely avoidable through informed, common-sense subproject planning. Pest management issues may arise through PCDP I1promotion ofrain fed and/or small-scale irrigated farming, or ofthe use ofanimal pesticides (e.g. livestock dips). Involuntary resettlement will be avoided, given the small footprints ofsubprojects, the vast amounts ofland available to pastoralists and the low marginal cost ofland. Large-scale, significant, cumulative and/or irreversible impacts are highly unlikely.
3. The applicable safeguard policies are Environmental Assessment (OP 4.01), Pest Management (OP 4.09) and Projects on International Waterways (OP 7.50.
4. The FPCU distilled the key operational elements of the PCDP IEnvironmental Assessment Management Framework and prepared an “Environmental and Social Screening List for Community Sub-Projects”. Project staff and implementing agencies received training in its use, but gained little to no implementation experience. Based on this work, a PCDP I1Environmental and Social Management Framework (ESMF) was prepared, and hrther training, implementation support and M&E will strengthen institutional capacities to meet safeguards requirements. The ESMF specifies subproject screening; the preparation ofenvironmental and pest management plans as required; and implementation supervision to ensure that adverse impacts are avoided or minimized.
5. All proposed subprojects will be based on community consultations and planning for subproject investments, and proposals will be aggregated at the woredu, zonal or regional level
107 for review and approval. The consultations will, among other things, examine alternatives to avoid or minimize adverse environmental and social impacts.
6. Overall responsibility for implementing the ESMF will rest with the FPCU, while day-to-day implementation will be the responsibility ofPCDP I1staff at the regional level in support of woreda staff. The MSTs will be particularly important in providing technical assistance, training and implementation support at woreda level. A training consultant will be retained to design the ESMF training program, and to train regional staff both substantively and as subsequent trainers ofworeda staff. A long-term local consultant will be retained to periodically review ESMF implementation performance, to identify lessons learnt and any needed performance improvement measures, and to provide on-the-job training as needed. It is expected that ESMF training and implementation procedures will be harmonized with other Bank-hnded projects working through the woreda administrations.
7. The following is the estimated cost ofimplementing the provisions ofthe ESMF:
Item cost 0 Materials (forms, checklists, brochures, monitoring formats $200,000 etc for use at regional and woreda offices) 0 EMPs / PMPs (consultancy allowance) $ 100,000 0 Training (materials, staff and participant travel, venue, consultants, etc 0 Existing and new woreda (approx. 50) $ 150,000 0 Refresher trainings (allowance) $ 75,000
0 Performance Reviews (5yrs x 50 woreda /yr x 3 day/ $175,000 woreda) Total $700,000
8. The safeguards policy on Projects on International Waterways (OP 7.50) is triggered because the Project will finance small-scale irrigation investments from international waterways. Riparian notification was given for PCDP I,and PCDP I1investments will not result, cumulatively, in more project-financed irrigated area than specified in that notification. Thus, a new OP 7.50 notification is not required. PCDP I1will not finance irrigation investments in areas not covered by the original notification.
108 Annex 12: Project Preparation and Supervision ETHIOPIA: Pastoral Community Development Project I1
1. The following project preparation timeline has been established:
Planned Actual Project Concept Note review January 2008 January 27,2008 Initial PID to PIC January 2008 February 28,2008 Initial ISDS to PIC January 2008 February 23,2008 Appraisal April 2008 April 8,2008 Negotiations April 2008 April 26,2008 BoardRVP approval May 2008 Planned date of effectiveness June 2008 Planned date of Mid-Term Review September 2010 Planned closing date December 3 1.201 3
2. Key institutions responsible for preparation ofthe project:
Federal Project Coordination Unit of the PCDP, Ministry ofFederal Affairs
3. Bank staff and consultants who worked on the project included:
Name Title Unit Ingo Wiederhofer Senior Operations Officer AFTCS Azeb Fissha operations Analyst AFTAR Eyerusalem Fasika Research Analyst AFTP3 Richard Olowo Senior Procurement Specialist AFTPC Tafesse Freminatos Abrham Financial Management Specialist AFTFM Christine Cornelius Lead Operations Officer/Program Coordinator AFTAR Sarah Michael Social Development Specialist AFTCS Janelle Plummer Governance Advisor AFCE3 John Boyle Senior Environmental Specialist AFTEN Gelila Woodeneh Communications Officer AFREX Almaz Teklesenbet Program Assistant AFTRA Rahel Lulu Program Assistant AFMET Basma Ammari Consultant AFTRL Mulat Negash Tegegn Consultant AFTFM Ingrid Pierre Mollard Consultant AFTAR Tesfaye Bekalu Consultant AFTUl Jonathan Pavluk Senior Counsel LEGAF Luz Meza Bartrina Senior Counsel LEGAF Ngozichukwu C. Njemanze Legal Associate LEGAF Renate Kloeppinger-Todd Advisor ARD Garry Smith Consultant Ann Waters-Bayer Consultant
109 4. Bank funds expended to date on project preparation:
0 Bank resources: US$90,000 (variable only) 0 Trust funds: NIA 0 Total: US$90,000 (variable only)
5. Estimated approval and supervision costs:
0 Remaining costs to approval: US$50,000 (variable only) 0 Estimated annual supervision cost: US$50,000 (variable only)
110 Annex 13: Documents in the Project File ETHIOPIA: Pastoral Community Development Project I1
Government Documents 1. MoFED: A Plan for Accelerated and Sustainable Development to End Poverty (2005/06 - 2009/10), September 2006. 2. MoFA: Beneficiary Assessment of the PCDP Community Investment Fund and Disaster Contingency and Planning Fund. 2007 3. MoFA: Implementation Assessment of the PCDP Community Investment Fund and Disaster Contingency and Planning Fund. 2007 4. MoFA: Pastoral Community Development Project I1Project Proposal (draft). February 2008 5. MoFA: Pastoral Policy Gap Analysis. 2006 6. MoFA: Assessment of the First Phase PCDP. 2008 7. MoFA: PCDP Quarterly Progress Reports from 2003-2008 8. MoARDFCA: A Project Proposal to Establish RUSACCOs Based on PCDP Initiated Income Generating Groups. April, 2008
World Bank/International Fund for Agriculture Documents
9. PCDP, Project Appraisal Document for Pastoral Community Development Project APL I, April 2003. 10. PCDP, Mid-Term Review Report. August 2006 11. PCDP , Aide-Memoires and Back-to-Office Reports of Supervision Missions, FY03-FY08 12. PCDP I1Appraisal Aide - Memoire, 17 April 2008 13. PCDP, Proceedings of the Consultative Workshop on Phase I1of the Pastoral Community Development Project. February, 2008 14. PCDP, Proceedings of the Consultative Workshop on Research for Development in the Lowlands of Ethiopia. February, 2008 15. Ethiopia: IFAD country evaluation report 2007. 16. Ethiopia: Protection of Basic Services, Joint Budget Review. 2007 17. Ethiopia: PCDP I1Concept Note. January, 2008 18. Ethiopia: Project Appraisal Document for Productive Safety Net Program APL 11. December 11,2006. 19. Ethiopia: Guidelines for the Implementation of the Productive Safety Net Program Pastoral Area Pilot, October 2007.
111 Others
20. Delsol, Herve. 2008. Preliminary thematic note on possible fields ofintervention for a 1ivestocWpastoral sector-based initiative. EC Rural Development and Food Security Section. PPT, 22 January 2008. 21. Pastoral Forum Ethiopia. 2008. Japanese Social Development Fund (JSDF) activity and financial progress report (1st July 2006 through 3 1st December 2007). Addis Ababa. 22. Somali Regional State Bureau of Capacity Building. 2007. Operations Manual: Effective investment at the local level: infiastructure provision for service delivery. Supported by UNCDFLJNDP. October 2007. 23. Action research on extension on Participatory Variety Selection under rain fed (Jijiga) and irrigated (Gode, Adadle, Kelafo) conditions. 24. Vegetation dynamics, restoration and the perception ofpastoralists in the rangeland of Shinile Zone, Somali Region. PCDP, 2007 25. The role ofmicro finance for pastoral household food security: the case ofDolo Ado Woreda, Somali Region. PCDP, 2006 26. Basic issues and plantation problems in the process ofnursery establishment in Afar Region. PCDP, 2007 27. Community-based natural resource management in pastoral areas: the case ofHamer, Bena Tsemay, SNNP Region. PCDP. 2006 28. Regional enhanced livelihoods in pastoral areas: Mandera Triangle baseline assessment. USAID, 2007 29. Impact of drought-related vaccination on livestock mortality in pastoralist areas ofEthiopia; Andy Catley, Dawit Abebe, Berhanu Admassu, Gem Bekele, Bayou Abera, Gezahegn Eshete,Tesfaye Rufael and Tesfaye Haile, 2008 30. Community based animal health care in the Somali regions ofAfrica: A review PARCNAC, OAU/IBAR, Andy Catley, 1999 3 1. Saving lives through livelihoods: critical gaps in the response to the drought in the Greater Horn ofAfrica; HPG Briefing Note, ODI, London May 2006 32. Delivering the agenda Addressing chronic underdevelopment in Kenya's arid lands, Oxfam, 2006 33. Regional enhanced livelihoods in pastoral areas. Mandera Triangle baseline assessment. USAID, 2007 34. Linking livelihoods and protection: A preliminary analysis based on a review ofthe literature and agency practice Susanne Jaspars, Sorcha 0 'Callaghan and Elizabeth Stites HPG Working Paper December 2007 35. National policy for the sustainable development ofthe arid and semi arid lands ofKenya, office ofthe President, Special Programs, Kenya, April 2007. 36. Report ofthe Pastoral Appraisal Team on emergency response interventions in pastoral areas of Ethiopia, Stephen Sandford and Yohannes Habtu, DFID, 2000
112 Annex 14: Statement of Loans and Credits ETHIOPIA: Pastoral Community Development Project I1
Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d P101556 2008 ET-Elect. Access Rural I1 SIL (FY07) 0.00 130.00 0.00 0.00 0.00 132.05 0.00 0.00 PO74011 2008 ET/Nile Basin Initiative:ET-SU Interconn 0.00 41.05 0.00 0.00 0.00 41.89 0.00 0.00 P101473 2007 ET-Urban WSS SIL FY07) 0.00 100.00 0.00 0.00 0.00 92.29 -10.00 0.00 PO98093 2007 ET-Productive Safety Nets I1 (FY07) 0.00 175.00 0.00 0.00 0.00 146.53 53.33 0.00 PO98031 2007 ET-Multi-Sectoral HIVlAIDS I1(FY07) 0.00 30.00 0.00 0.00 0.00 27.34 14.78 0.00 PO91077 2007 ET-APL3-RSDP Stage I11 Proj (FY07) 0.00 225.00 0.00 0.00 0.00 226.87 0.00 0.00 PO92353 2007 ET-Irrigation & Drainage SIL (FY07) 0.00 100.00 0.00 0.00 0.00 100.36 0.00 0.00 PO77380 2006 ET-GEF Energy Access Pq (FY06) 0.00 0.00 0.00 4.93 0.00 4.63 3.54 0.00 PO79275 2006 ET- Cap. Building for Agric. Serv (FY06) 0.00 54.00 0.00 0.00 0.00 47.50 0.17 0.00 PO94704 2006 ET-Financial Sector Cap Bldg. Project 0.00 15.00 0.00 0.00 0.00 14.58 1.86 0.00 PO97271 2006 ET-Electricity Access (Rural) Expansion 0.00 133.40 0.00 0.00 0.00 141.09 64.85 0.00 PO74015 2006 ET-Protection of Basic Services (FY06) 0.00 215.00 0.00 0.00 0.00 329.99 2.96 0.00 PO50272 2005 ET-Priv Sec Dev CB (FY05) 0.00 24.00 0.00 0.00 0.00 21.44 5.41 0.00 PO82998 2005 ET-Road Sec Dev Prgm Ph 2 Sup1 2 0.00 160.90 0.00 0.00 0.00 199.63 41.05 -3.29 (FY05) PO78692 2005 ET-Post Secondary Education SIL (FY05) 0.00 40.00 0.00 0.00 0.00 35.19 28.02 0.00 PO78458 2005 ET-ICT Assisted Dev SJM (FY05) 0.00 25.00 0.00 0.00 0.00 21.53 13.48 2.46 PO74020 2004 ET-Pub Sec Cap Bldg Pi(FY04) 0.00 100.00 0.00 0.00 0.00 50.09 22.34 0.00 PO76735 2004 ET-Water Sply & Sanitation SIL (FY04) 0.00 100.00 0.00 0.00 0.00 77.1 1 27.31 0.00 PO75915 2003 ET-Pastoral Community Dev APL (FY03) 0.00 30.00 0.00 0.00 0.00 1.22 -4.91 0.00 PO44613 2003 ET-RSDP APLl (FY03) 0.00 126.80 0.00 0.00 0.00 64.86 35.69 0.00 PO49395 2003 ET-Energy Access SIL (FY03) 0.00 132.70 0.00 0.00 0.00 126.07 94.77 0.00 PO50938 2003 ET-Dec Serv Del CB (FY03) 0.00 26.20 0.00 0.00 0.00 10.16 4.95 2.44 PO57770 2002 ET-Cultural Heritage LIL (FY02) 0.00 5.00 0.00 0.00 0.00 1.77 0.77 -0.38 PO50383 2002 ET-Food Security SIL (FY02) 0.00 85.00 0.00 0.00 0.00 54.33 21.33 0.00 Total: 0.00 2,074.05 0.00 4.93 0.00 1,968.52 421.70 1.23
113 Annex 15: Country at a Glance ETHIOPIA: Pastoral Community Development Project I1
Sub- POVERTY and SOCIAL Saharan Low- >evelomnent diamond. Ethlopla Afrlca Income 2006 Population, mid-year (miilions) 72.7 770 2,403 Life expectancy GNIpercapita(Atiasmethod, US$) 80 642 650 GNl(Atias method, US$ biiiions) 13.1 648 1562 Average annual growth, 2000-06 Population (%) 2.0 24 19 GN I Gross Laborforce (%) 2.2 26 2.3 per wary Most recent estlmate (latest year avallable, 2000-06) capita enrollment Poverty (% o f population beio w natio nal po verty line) 44 Urban population (%of totalpopulation) 13 36 30 Life expectancyat birth (rears) 43 47 59 Infant mortality (per 1000 live births) 60 96 75 Childmalnutrition (%ofchildrenunder5) 36 30 Access to improvedwatersource Access to an improvedwter source (%ofpopulation) 22 56 75 Literacy(%ofpopuiafion age St) 36 59 61 Gmss primary enrollment (%of schooi-age population) '00 92 '02 -Ethiopia Male a7 96 '06 Lo wincoma group Female 94 66 96
KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1986 1996 2005 2006 Economic ratloa' GDP (US$ billions) 9.6 8.5 114 Q.3 Gross capital formation1GDP 17.0 8.6 20 5 8.6 Trade Exports of goods and services1GDP 6.9 9.3 163 15.6 Gross domestic savings1GDP 116 9,6 -16 -6.1 Gross national savings1GDP 14.3 17.4 137 9.4 Current account baiance1GDP -2.7 0.6 -6 6 -a.4 Domestic Capital Interest paynentslGDP 0.6 0.6 05 , , savings \ ,/' formation Total debt1GDP 62.8 18.8 550 :
STRUCTURE of the ECONOMY
114 1986 1998 2005 2006 (%oFGDPj Agriculture 56.3 56.7 46.6 47.3 Industry 117 0.5 U.6 13.5 Manufacturing 4.6 5.1 5.4 5.3 Services 32.0 32.8 39.6 39.2 Household final consumption expenditure 77.7 82.1 87.6 93.7 General gov't final consumption expenditure a.6 6.3 13.8 P.4 -GCF dGDP Imports of goods and sawices P.2 6.3 38.4 417
2005 2006 1986-96 1996-08 IGrowth of exports and Imports (%) (average annual gm dh) I Agriculture 3.0 2.8 0.4 112 industry -2.1 8.2 8.1 7.4 Manufacturing -3.5 4.4 8.0 8.1 Sewices 14 5.9 8.1 8.5 Household final consumption expenditure 3.3 4.1 8.9 20.4 Genera gov't final consumption eqenditure -3.2 7.7 4.5 -5.1 Gross capital formation -2.8 7.1 5.7 2.9 I ---Exports -Imports imports of goods and sewices 4.3 13.4 24.3 22.8 1
Note: 2006 data are preiiminaryestimates. This table was produced from the Development Economics LDB database. 'Thediamonds showfourkeyindicators in thecountry(in bo1d)comparedwithits income-groupaverage. Ifdataaremissing,thediamondhili
Ethiopia
PRICES and GOVERNM ENT FiNANCE 1986 1998 2005 2006 inflatlon (%) Domestic prices I (%change) Consumer prices -9.8 -5.1 It6 implicit GDP deflator -5.3 4.4 9.2 7.8 Government finance (%of GDP, Includes current grants) Current revenue 15.3 X.8 B.9 19.1 Current budget balance 2.4 4.4 5.5 5.9 -GDPddiator -CPI Overall SUrDlUSIdefiCit 4.8 4.2 -8.3 -8.3 I 1
TRADE 1986 1996 2005 2006 Export and Import levels (US$ mlll.) (US%mlllionsj
Total exports (fob) 455 40 847 1000 5,000 7 Coffee 32 1 273 335 354 Pulses and oil seeds a +a 80 248 4.000 Manufactures 86 81 86 94 %OW 1068 3,633 4,592 Total imports (cif) 1144 2,OW Food 294 a3 247 333 Fuel and energy 02 X8 669 861 1,000 Capital goods 354 458 1265 1552 0 W 01 02 03 M 05 OB Export price Index (2OOO=WO) IP P4 98 11) import price index(2OOO=WO) 115 90 09 a9 exports mimports Terms of trade (20OO=WO) 97 t38 75 79 I I
115 BALANCE of PAYMENTS 1986 1996 2005 2006 /Current account balance to GDP (%) (US$ millions) Exports of goods and services 67 1 784 1,858 2.05 Imports of goods and services 1,82 1.378 4,367 5,548 Resource balance -521 -594 -2,509 -3,443 Net income -3 1 -44 -36 -38 Net current transfers 289 705 1773 2,095 Current account balance -263 68 -771 -1386 Financing items (net) 429 221 983 90 Changes in net reserves -165 -289 -211 476 Memo: Reserves including gold (US$ millions) 332 875 1555 1079 Conversion rate (DEC, /ocal/US$) 21 6.3 8.7 8.7
EXTERNAL DEBT and RESOURCE FLOWS 1886 1896 2005 2006 lComposition of 2005 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 6,04 0.078 6,259 IBRD 54 0 0 0 G 36 IDA 486 1,555 3,359 553 I F 4?" Total debt service 225 347 89 iB RD 0 0 0 0 IDA 8 25 5 39 Composition of net resource flows B 3,359 Official grants 447 393 1,324 Official creditors 394 211 385 Pnvate creditos 26 -209 116 Foreign direct investment (net inflows) 1 22 265 Portfolio equity(net inflows) 0 0 0 c 160 World Bank program 15 245 3 Commitments 56 A. IBRD E- Bilaterei Disbursemenis 38 142 162 95 B - IDA D .Othwmultilaterei F - Private Pnncipal repayments 9 14 0 23 C-iMF G- Short-teri Net flows 29 P7 162 72 In terest papents 8 11 5 16 Net transfers 21 I16 147 56
Note This tablewas producedfrom theDevelopment Economtcs LDB database 9/28/07
116 IBRD 36134
35° 40° 45°
ERITREA Red 15° 15° Red ERITREA Sea REP. OF YEMEN REPUBLIC Khartoum Asmara . Mereb R. Teke e R SUDAN z Adi Adigrat Sea Abun OF Humera Axum Adwa YEMEN TIGRAY TIGRAYT I G R AY Gulf of SUDAN Mekele AFAR DJIBOUTI Aden Djibouti L. Afdera Dinder R. AMHARA Atbara
White Blue AFARA F A R BENSHANGUL Gonder DIRE Sekota DAWA Korem HARARI Nile
Meri R. SOMALIA Addis Ababa Nile Lalibela L. Tana Debra Tabor Roseires Weldiya GAMBELA Dam DJIBOUTI Gulf of OROMIYA SOMALI Bahir Dar AMHARAA M H A R A Mile Aden S.N.N.P.R. Abay L. Abe Dese Mota Awash R. Kombolcha Finote
Dabus R. Selam Kurmuk Debre Guder R. Mehal INDIAN Markos Meda BENSHANGULBENSHANGUL OCEAN Dejen Asosa Jihur 10° 10 ° UGANDA KENYA Mogadishu Mendi Debre Debre Sina Birhan Dire Dawa Jijiga Addis Harer ETHIOPIA Bako Ababa Asbe Deder Gimbi Gedo Awash Nekempti DIREDIRE DAWADAWA Hagere PASTORAL COMMUNITY Hiywar HARARIHARARI Tulubolo Metehara Mojo DEVELOPMENT PROJECT II Nazret Mechara Jikao Gambela Aware Baro Metu Welkite Degeh Bur Gore Butajira GAMBELAGAMBELA Asela Gila R. OROMIYAOROMIYA SOMALISOMALI Domo PROJECT REGIONS Gog Jima Hosaina ASPHALT, ALL-WEATHER ROADS Akobo R. Tepi Bonga Shashemene Ginir GRAVEL, ALL-WEATHER ROADS Sodo Awasa Dodola Adabe Goba Warder Dubub Kebri Dehar RURAL AND/ OR DRY-WEATHER ROADS Abaya Wendo S.N.N.P.R.S.N.N.P.R. Imi SELECTED TOWNS Hayk W a Chencha Dila b Maji Felege i NATIONAL CAPITALS
Kibre Gode Neway
Ch’amo Mengist G Wabi e Shebele STATE / REGION (UNOFFICIAL 1994 BOUNDARIES) Hayk s Jinka tr SUDAN o R. Kelafo Omo Gidole INTERNATIONAL BOUNDARIES
Ganale Mustahil Sagan Negele SOMALIA Ferfer 5° 5° Yavello L. Chew Dawa Bahir 0 100 200 300 Dolo Odo Lake KILOMETERS Turkana Mega
This map was produced by the Map Design Unit of The World Bank. INDIAN The boundaries, colors, denominations and any other information Moyale shown on this map do not imply, on the part of The World Bank UGANDA Group, any judgment on the legal status of any territory, or any KENYA OCEAN endorsement or acceptance of such boundaries. 35° 40° 45° MAY 2008