2. MANAGING AID FOR TRADE AND DEVELOPMENT RESULTS
GHANA CASE STUDY
By
Bernardin Senadza, PhD
A.D. Amarquaye Laryea, PhD
November 2012
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ACKNOWLEDGEMENT
The authors wish thank staff of MoFEP, MoTI and MoFA who provided valuable insights for the preparation of this paper. Our thanks, in particularly, goes to Mr. Lambert Abusah of MoFA for providing us with many sector related documents and data. We also wish to thank development partners for providing information on various issues. Our interactions with Mr. Claude Maerten, EU Ambassador/ Head of Delegation to Ghana also proved useful. Mr. Masato Hayashikawa of the OECD provided useful comments on an earlier draft. We acknowledge very good research assistance from Louis Hodey, Godson Korbla Aloryito and Theophilus Eyram Kwami. Any errors and omissions are ours.
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TABLE OF CONTENTS
ACKNOWLEDGEMENT ...................................................................................................................... 1
TABLE OF CONTENTS ........................................................................................................................ 2
LIST OF FIGURES ................................................................................................................................ 4
LIST OF BOXES .................................................................................................................................... 5
LIST OF ACRONYMS .......................................................................................................................... 6
Executive Summary ................................................................................................................................ 8
1 Introduction ................................................................................................................................... 10
1.1 Background to the Economy of Ghana ................................................................................. 10
1.2 Rationale for Aid-for-Trade .................................................................................................. 10
1.3 Terms of Reference ............................................................................................................... 11
1.4 Methodology ......................................................................................................................... 11
1.5 Outline of Report .................................................................................................................. 11
2 Role of Trade in Development ...................................................................................................... 11
3 Ghana‟s Past and Present Trade Policies and Current Development Framework ........................ 12
3.1 Past and Present Trade Policies ............................................................................................ 12
3.2 The Current Development Policy Framework ...................................................................... 14
4 Agricultural Trade, Development Cooperation and Aid Flows .................................................... 16
4.1 Agricultural Trade Performance ........................................................................................... 16
4.2 Development Cooperation .................................................................................................... 17
4.3 Aid-for-Trade Flows ............................................................................................................. 18
4.4 Donor Activities in the Agriculture Sector ........................................................................... 19
5 Monitoring and Evaluation of Development Programmes ........................................................... 22
5.1 Introduction ........................................................................................................................... 22
5.2 Indicators for Measuring Outcomes of Agriculture Sector Programmes .............................. 22
5.3 The Monitoring and Evaluation Framework ......................................................................... 24
5.3.1 National Monitoring and Evaluation Arrangements ..................................................... 24
5.3.2 Sectoral Monitoring and Evaluation Arrangements ...................................................... 25
5.3.3 Decentralised System of Monitoring and Evaluation ................................................... 26
5.4 Donor Monitoring & Evaluation and Coordination between Donors and MoFA ................. 27
5.5 Challenges and Constraints of the M&E System .................................................................. 29
5.6 Managing Aid for Trade for Results ..................................................................................... 29
6 Conclusion .................................................................................................................................... 31
References ............................................................................................................................................. 32
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Annex A: On-going Donor Projects in Agriculture .............................................................................. 33
Annex B: Key Indicators for Measuring Results in Agriculture Sector ............................................... 40
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LIST OF FIGURES
Figure 1 Sector shares in GDP (%) ........................................................................................... 16
Figure 2 Export and import shares of GDP (%) ....................................................................... 16
Figure 3 Export destination shares (%) .................................................................................... 16
Figure 4 Agriculture export revenues (US$ m) ........................................................................ 16
Figure 5 Export earnings shares (%) ........................................................................................ 17
Figure 6 Export concentration and diversification indices ....................................................... 17
Figure 7 Gross AfT commitments (2010 US$ m) ..................................................................... 18
Figure 8 Agriculture share of productive capacity AfT commitments (%) .............................. 18
Figure 9 Top 10 ODA donors, all sectors 2001-2010 (2010 US$ m) ...................................... 19
Figure 10 Top 10 ODA donors, agriculture 2001-2010 (2010 US$ m) ..................................... 19
Figure 11 National monitoring and evaluation framework ......................................................... 25
Figure 12 Sector monitoring and evaluation framework ............................................................. 25
Figure 13 Decentralised monitoring and evaluation framework ................................................ 26
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LIST OF BOXES
Box 1 USAID Agriculture Activity in Ghana .................................................................................... 20
Box 2 German Development Cooperation in Agriculture ................................................................. 21
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LIST OF ACRONYMS
ADVANCE Agriculture Development Value Chain Enhancement Programme
ACP African Caribbean Pacific
AfT Aid-for-trade
AfDB African Development Bank
AFD Agence Francais dѐ Development
AGI Association of Ghanaian Industries
AGRA Alliance for Green Revolution for Africa
APR Annual Progress Report
ASWG Agricultural Sector Working Group
BUSAC Business Sector Advocacy Challenge
CAADP Comprehensive Africa Agriculture Development Programme
CEPS Customs, Excise and Preventive Service
CIDA Canadian International Development Agency
COCOBOD Cocoa Board
CRS Creditor Reporting System
CSOs Civil Society Organisations
CSP Country Strategy Paper
CSPGs Cross Sectoral Planning Groups
DAC Development Assistance Committee
DPCUs District Planning Coordinating Units
DPs Development Partners
EC European Commission
EDF European Development Fund
EMBRAPA Empresa Brasileira de Pesquisa Agropecuária
ERP Economic Reforms Programme
EU European Union
EWB Engineers without Borders
FAGE Federation of Associations of Ghanaian Exporters
FAO Food and Agricultural Organization
FASDEP ΙΙ Food and Agriculture Sector Development Programme II
FC Financial Cooperation
FtF Feed the Future
GCAP Ghana Commercial Agriculture project
GDP Gross Domestic Product
GIZ Gesellschaft fϋr Internationale Zusammenarbeit
GoG Government of Ghana
GPRS I Ghana Poverty Reduction Strategy
GPRS II Growth and Poverty Reduction Strategy
GSGDA Ghana Shared Growth and Development Agenda
GSS Ghana Statistical Service
GSSP Ghana Strategic Support Programme
ICFG Integrated Coastal and Fisheries Governance
IDA International Development Association
IFAD International Fund for Agricultural Development
IFPRI International Food Policy Research Institute
IMF International Monetary Fund
IWMI International Water Management Institute
JICA Japan International Cooperation Agency
JIRCAS Japan International Research Centre for Agricultural Science
JSR Joint Sector Review
KfW Kreditanstallt fϋr Wiederaufbau
MCC Millennium Challenge Corporation
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METASIP Medium-Term Agricultural Sector Investment Plan
METSS Monitoring, Evaluation, and Technical Support Service
MDAs Ministries, Departments and Agencies
MDBS Multi-Donor Budgetary Support
MOAP Market Oriented Agricultural Programme
MoFA Ministry of Food and Agriculture
MoFEP Ministry Finance and Economic Planning
MoTI Ministry of Trade and Industry
M&E Monitoring and Evaluation
Mt Metric tonnes
NDPC National Development Planning Commission
NGOs Non-Governmental Organisations
NIP National Indicative Programme
NTEs Non-traditional Exports
ODA Official Development Assistance
OECD Organisation for Economic Co-operation and Development
OVCF Outgrower and Value Chain Fund
PEF Private Enterprise Foundation
PPMEDs Policy Planning, Monitoring and Evaluation Divisions
PTB German Institute of Metrology
RCC Regional Coordinating Council
RPCUs Regional Planning Coordinating Units
RSD Regional Sector Department
SAP Structural Adjustment Programme
TC Technical Cooperation USAID United States Agency for International Development
USDA United States Department of Agriculture
WB World Bank
WFP World Food Programme
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Executive Summary
Ghana‟s long term development goal is to achieve a per capita income of at least US$3,000 by 2020. The agriculture sector is expected to play a major role in this regard. However, productive capacity constraints, arising largely from human, institutional and other bottlenecks pose a major challenge to the attainment of this goal. Aid-for-trade, particularly, into the agriculture sector can propel the achievement of this development objective.
This report sets out to examine the mechanisms for tracking the outcomes of AfT interventions in the agricultural sector and recommend ways of improving on existing frameworks to enable the measurement of the performance of AfT interventions towards quantifiable targets and objectives.
The current development policy framework is the Ghana Shared Growth and Development Agenda (GSGDA 2010-2013). Within the framework, trade features prominently, and emphasises improving export competitiveness, diversifying and increasing exports and markets. The GSGDA policy document also emphasises the importance of the agriculture sector, and more directly related to trade is the objective of achieving increased competitiveness. The agriculture sector objectives are to be pursued based on the FASDEP II document and its accompanying investment plan, the METASP.
Ghana‟s main agricultural exports are cocoa and non-traditional agriculture products. Non-traditional exports have been promoted as part of the ERP/SAP. In spite of efforts at diversifying the export base, however, the country‟s exports continue to be dominated by a few products. As at 2011, export earnings from agriculture amounted to just a little over 30 percent. Clearly, there is need to intensify efforts at increasing the share of agriculture in Ghana‟s trade.
Ghana receives a significant amount of aid by African standards. Data on ODA commitments as captured by the OECD CRS indicates that most AfT goes into economic infrastructure and the building of productive capacities of the real sectors of the economy. These receipts into the agriculture sector can go a long way in improving productive capacity of the sector for it to be able to achieve both domestic and international market objectives of the sector. Improving export competitiveness, diversifying and increasing exports and markets is one such international market objectives. Thus trade is mainstreamed in development policy. Trade features prominently in the GSGDA and aspects of Ghana‟s trade policy are embedded in it but the country currently does not have coherent aid-for-trade strategy in place to ensure that aid flows into the agriculture sector have the desired impact on Ghana‟s agricultural trade and that the impacts and outcomes can be adequately ascertained. And while there is a significant donor presence in the agriculture sector of Ghana and many of the projects and programmes seem to be aligned to the country‟s development objectives in agriculture as contained in the GSGDA/FASDEP documents, examination of these activities however indicates that only a few donors focus explicitly on activities with a trade element. While the GSGDA and FASDEP II have some agriculture trade related indicators, the problem though is the lack of harmonization between the indicators for the two sets of documents.
Apart from the national M&E framework that also applies to the agriculture sector to enable the measurement of outcomes based on pre-determined agriculture sector indicators, a lot of coordination also goes on between MoFA and development partners. Coordination takes place largely within the annual joint sector reviews. However, what is missing from the JSRs is the lack of discussions on the impact of donor support on agriculture trade outcomes. While there are a lot of donor activities ongoing in the agriculture sector, most of them lack direct trade objectives. Apart from the fact that trade impacts of aid may not be a direct objective of many donors, MoFA‟s indicators as derived from agriculture sector policy objectives tend to focus more on domestic outcomes. For instance, increasing food production and ensuring food security is one often highlighted objective and many donors, including CIDA, are increasingly involved in helping the country achieve such objectives. Another reason for low discussions on the impact of donor assistance on trade is that MoFA‟s objectives have
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also focused more on reducing the importation of agriculture products (for example, rice) rather than pursuing an export agenda.
Against the backdrop of the substantial AfT flows into the agriculture sector of Ghana, it is imperative for the country to adopt a framework that enables the measurement of the trade impacts of aid based on some identified trade-related indicators and the development of a workable M&E system to measure results.
In 2011 Ghana introduced an aid policy, titled Ghana Aid Policy and Strategy, which spans the period 2011 and 2015. The aid policy was developed in „response to available evidence showing that recipient country policies and procedures, human capacity, economic management and institutional arrangements determine to a large extent the optimal allocation of aid and its impact on growth and poverty reduction‟. The policy was fashioned out of the objectives of the Paris Declaration on Aid Effectiveness, 2005 and the Accra Agenda for Action, 2008. The aim of the aid policy is to ensure that aid is managed and monitored properly, i.e. to ensure effectiveness and coordination by aligning external aid to national development priorities.
The aid policy spells out some measures to ensure effective monitoring and evaluation of aid in general, and can thus serve as minimal framework for introducing trade objectives and indicators to measure the impact of AfT. The ingredients that must go into this should include Ghana‟s own targets as defined in its development policies. Indicators could include increase in the diversification of agriculture exports, increase in export earnings and the number of export markets, and increase in the proportion of processed (value-added) agriculture products. Also important is finding targets that can be monitored without expending too many resources – both human and financial. The mechanism should also reflect donors‟ views on mutual accountability.
For an aid-for-trade strategy in agriculture to work, there would be the need to strengthen the intra- sectoral and inter-ministerial coordination through a platform for joint planning. Thus there would be the need for a review in the development and implementation of a communication strategy to improve institutional coordination as well as create and strengthen the framework for coordinating activities among all stakeholders in the sector. This must include each ministry identifying an agricultural content in its strategic policy. The strategy should thus create effective internal coordination linkages among three key stakeholders, namely, MoFA, MoFEP and MoTI on one hand and between these ministries and DPs on the other to ensure effective monitoring and evaluation for results. Mutual accountability in terms of resource flow and achievement of results makes it imperative to strengthen existing M&E systems for trade results. Mainstreaming aid-for-trade into the country‟s development agenda would improve monitoring and evaluation.
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1 Introduction
1.1 Background to the Economy of Ghana
Ghana gained political independence from Great Britain on March 6, 1957. With an estimated population of 24 million in 2010, the economy of Ghana has a diverse and rich resource base, and has one of the highest GDP per capita in Africa. The country however remains somewhat dependent on international financial and technical assistance as well as remittances from an extensive Ghanaian diaspora. Gold, cocoa, timber, diamonds, bauxite, and manganese continue to be the country‟s main exports and major sources of foreign exchange. Subsistence agriculture is still pronounced and accounts for 35 percent of GDP and employs 55 percent of the work force. In 2007, Ghana discovered oil in commercial quantities and this has raised hopes but has also generated some fears about the resource curse.
Ghana‟s post-independence growth record has been one of unevenness. GDP growth was reasonably high in the 1950s and early 1960s. However, the economy‟s growth began to slow down in 1964 due mainly to policy failure. By 1983, the economy was almost on the brink of a collapse.
Economic reforms (ERP/SAP) supported by the IMF and the World Bank were instituted to stabilise the economy and correct a number of structural imbalances in order to spur growth. The economy responded positively to the ERP/SAP and the favourable trend has continued since that time, with growth settling around 5 percent for most parts of the almost three decades following the reforms. In the past six years much higher growth rates have been recorded and with the onset of the production of oil in commercial quantities in 2010, an exceptionally high real GDP growth of 14 percent was recorded in 2011.
Ghana‟s long term development goal as contained in the Ghana Shared Growth and Development Agenda (GSGDA) is to achieve a per capita income of at least US$3,000 by 2020.
1.2 Rationale for Aid-for-Trade
It has long been recognised that low-income countries cannot integrate into the international trading system on the same terms and conditions as their high-income counterparts. Various concessions such as trade preferences have been introduced to help low-income countries fully benefit from the international trading system. However due to productive capacity constraints, arising largely from human, institutional and other bottlenecks, the challenges low-income economies face in exploiting market access opportunities continue to persist. Market access - which has assumed centre stage in multilateral trade negotiations - is thus a necessary but insufficient condition for harnessing the opportunities trade presents for development in low-income countries.
Aid-for-trade (AfT) is development assistance to bolster trade capacity and reduce trade costs in low income countries. For it to be effective, however, AfT must address national trade-related priorities identified through domestic policy formulation processes. Much of the focus of AfT is on agriculture because of its importance to the economy. Equally important is the need to have a monitoring and evaluation (M&E) mechanism for assessing the impacts of AfT, particularly in the context of the country‟s development goals and/or trade policy objectives.
This report sets out to examine the mechanisms for tracking the outcomes of AfT interventions in the agricultural sector and/ or recommend ways of improving on existing frameworks to enable the measurement of the performance of AfT interventions towards quantifiable targets and objectives.
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1.3 Terms of Reference
In line with the terms of reference, the report provides:
1. a concise but comprehensive survey of existing mechanisms used in Ghana to manage aid for trade and development results (including targets and performance indicators);
2. an assessment of the targets and indicators donors use to monitor progress with their aid for trade-related projects and programmes; and
3. an assessment of the main challenges and constraints -as well as the way they have been addressed or should be addressed- regarding the introducing of a country-managed aid-for- trade results framework, which would contribute to fulfilling mutual accountability requirements.
1.4 Methodology
The approach to the assignment involved an assessment of the existing national monitoring and evaluation framework for development plans, as well as agriculture sector-specific and donor M&E systems. It also involved a review of existing national and sectoral development policies, trade policy, aid policy, and the analyses of data on aid-for-trade flows and donor activities in the agriculture sector.
Interviews with key state actors and development partners within the national landscape of trade- related assistance were conducted. Three key MDAs were consulted, namely, the Ministry of Finance and Economic Planning (MoFEP), whose responsibilities include national aid management and coordination; the Ministry of Trade and Industry (MoTI), responsible for trade policy formulation and the development of domestic and international trade; and the Ministry of Food and Agriculture (MoFA), responsible for developing and executing policies and strategies for the agriculture sector within the context of a coordinated national socio-economic growth and development agenda. Interviews were conducted with and data obtained from some development partners active in Ghana‟s agriculture sector.
1.5 Outline of Report
The rest of the report is structured as follows. Section 2 gives a theoretical background and outlines some empirical results on the role of trade in development. Ghana‟s past and present trade policies and the current development framework is discussed in Section 3. Section 4 gives an overview of Ghana‟s agriculture trade, development cooperation, aid-for-trade flows, and donor activities in the agriculture sector. Chapter 5 discusses the institutional framework for monitoring and evaluating development programmes and project, the role of donors, the indicators used for monitoring agriculture sector objectives, and an assessment of the challenges and constraints in the M&E system. Concluding remarks on how to manage AfT for results are offered in chapter 6.
2 Role of Trade in Development
The importance of trade to development and growth is well grounded in theory. The rationale for gains from trade is provided by comparative advantage theory which says all countries gain when each concentrates on and exports goods that they can produce at lower opportunity cost than their trading partners. Different explanations have been given for the basis of comparative advantage but the most dominant one is the Hecksher-Ohlin Model. This says that a country can produce a product at lower opportunity cost if that product requires intensive use of inputs the country has in relative abundance. Thus a country well endowed with arable land will tend to have an advantage in producing agricultural commodities. So long as its trading partners also adhere to the same principle
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they will also gain. The recommendation for countries then is to follow the dictates of comparative advantage and allow the free interplay of market forces.
The gains derived however are only static. Dynamic gains and growth come in when „resource allocation according to comparative advantage, higher capacity utilisation and the exploitation of economies of scale under an outward oriented development strategy improve investment efficiency where the resulting savings in capital may be used to increase output and employment elsewhere in the economy.i Other dynamic gains that can lead to growth include the ability of a developing country especially to acquire the vital inputs such as technology to aid in the development process. Learning effects are also achieved from the development of new product technologies and information sources.
However, it has been observed that the transmission of economic growth from the export sector to the rest of the economy will depend on the capital intensity of the production process, the economies of scale in export production, the transportation requirements of exports, the availability of underutilised factors in the rest of the economy, the level of entrepreneurial skills among others. This then hinges on policies that can be put in place. Studies have shown that this is important. For instance time series analysis involving 27 developing countries in the 1970s led to the conclusion that the country‟s own policies rather than external factors dominated export growth in the developing countries. According to the authors „the results are consistent with the hypothesis that export success is related to favourable internal factors influencing a country‟s ability to compete and diversify‟.ii
The weight of evidence both theoretical and empirical then points to the fact that trade presents an opportunity for growth but does not guarantee it. Consequently the onus lies with government to adopt policies that will create the necessary environment that will ensure positive benefits from trade. The kinds of policies that matter in this respect involve the building and enhancement of economic infrastructure and institutions, the building of productive capacity, the kind of trade policies and regulations undertaken and trade related infrastructure. Since developing countries typically lack adequate resources to undertake the policies mentioned external resources especially aid are needed. This is where the question of aid for trade comes in. The need is to create a more competitive economy.
3 Ghana’s Past and Present Trade Policies and Current Development Framework
3.1 Past and Present Trade Policies
Before Ghana gained political independence in 1957 the trade regime was generally a liberal one with few restrictions. There was no deliberate effort to promote exports or generally to interfere with the trading process. This all changed with the coming of independence as Dr. Kwame Nkrumah, the first president, had ambitious plans to accelerate the pace of development of the country.
Nkrumah‟s policies were modelled on those of the former Soviet Union and other socialist states that required the heavy hand of government in economic activity. The motivation for Nkrumah‟s policies were reinforced by the ideas of standard development economics of the day which believed that serious market failure in economies such as Ghana‟s required a lot of government intervention in economic activity. The level of entrepreneurship was perceived to be low, the kind of investment that needed to be made required saving levels far in excess of what was forthcoming, the financial system was undeveloped and markets generally did not work well.iii
To make up for these shortcomings the government established numerous state enterprises in the agricultural, manufacturing and the services sectors. Massive infrastructural projects such as the
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Akosombo Hydro Electric Dam, the artificial harbour at Tema and the Accra-Tema Motorway were built. In this kind of strategy, market forces had to take a back seat. With respect to trade and industrial policy the import substitution strategy was pursued. This required state support for industries based more on „national interest‟ than economics. The exchange rate was kept overvalued to let in cheap inputs for the industries but heavy restrictions were placed on final good imports to curtail competition for the industries created. The result of such a policy was to penalise exports as foreign exchange earnings exchanged for relatively fewer local currency units. The policy thus led to a shrinking trade sector to which the government responded with more interventions, restrictions and controls. Even after the overthrow of the Nkrumah regime in 1966 such policies were largely pursued with disastrous results
Given the poor state of the Ghanaian economy by the early 1980s, there was obviously the need for economic reforms. Increasing globalisation and the need to respond to it also made reforms imperative. Ghana thus launched the Economic Recovery and Structural Adjustment Programmes (ERP/SAP) in 1983 with the support of the IMF and the World Bank. The main goal of Ghana‟s ERP/SAP was to shift the trade regime towards more liberal, market oriented and outward oriented policies. The objectives for the external sector were to restore incentives for the production of exports and increase the overall availability of foreign exchange, and to improve the foreign exchange allocation and channel it into selected high priority areas. Trade policy under the Programme included tariff reductions, removal of quantitative restrictions on imports, liberalisation of foreign exchange, deregulation of domestic market prices and controls and institutional reforms that particularly affected revenue-generating bodies such as the Customs, Excise and Preventive Service (CEPS). Performance improved and both exports and imports have been growing since 1984.
These policies were further reinforced in 2005 when a new trade policy was adopted. This policy was set within the context of Ghana‟s long-term strategic vision of achieving middle-income status by 2012 and becoming a leading agro-industrial country in Africa. The policy provides clear and transparent guidelines for the implementation of Government‟s domestic and international trade agenda. It is also designed to ensure a consistent and stable policy environment within which the private sector and consumers can operate effectively and with certainty.
This policy emphasised two parallel strategies: an export led industrialisation strategy and a domestic market led industrialisation on import competition. These new strategies are supported through the promotion of increased competitiveness of local producers in domestic and international markets based on fair and equal competition and by introducing an import and domestic trade regime which promotes and protects consumer interests.
Apart from the realisation that it was necessary to encourage the full interplay of market forces it was also recognised that the business environment mattered to the private sector and that infrastructure, both institutional and economic mattered. Additional policies that specifically targeted the export sector were also adopted. While the bias against exports was largely removed by the adoption of a market determined exchange rate more specific measures were taken to support the sector. For cocoa, Ghana‟s main agricultural export, the aim was to increase foreign exchange earnings and to maintain Ghana‟s distinctive position as the supplier of the finest and most consistent quality cocoa in addition to retaining the traditional premium obtained by Ghana‟s cocoa on world markets. While subsidies on inputs were removed, the distribution of inputs to farmers was privatised and credit was made available to farmers to purchase inputs. The most important measure though was the increase in the producer price paid to farmers. By the start of the reforms the percentage of the world price received by farmers had fallen to as low as 25%. It was even in single digits if assessed at parallel market rates.iv This percentage was thus gradually increased and was 76.04% in 2011.v Since 2001 the government has also intensified the mass spraying of cocoa farms. The operations of Ghana Cocoa Board (COCOBOD) were also streamlined in order to reduce overhead costs and to intensify research on diseases and pest controls.
Other traditional exports benefited from reforms as seen from Section 4. One of the principal aims of
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the reform programme was the diversification of exports and right from the beginning non-traditional exports were targeted. Duty free imports of machinery were allowed and income tax rebates were given to exporters. A foreign exchange retention scheme for non-traditional exports was gradually liberalised and eventually the policy whereby exporters were to surrender their foreign exchange earnings to the central bank was abolished. Currently, non-traditional exporters pay a company tax rate of 8 percent instead of 35 percent. All these incentives led to a big increase in the agricultural sector as seen in Section 4.
3.2 The Current Development Policy Framework
Since 1957, several policies and programmes to accelerate the growth of the economy and raise the living standards of citizens have been pursued with varying degrees of success. Policies pursued over the past two decades include Ghana Vision 2020: The First Step (1996-2000); the First Medium-Term Plan (1997- 2000); Ghana Poverty Reduction Strategy (2003-2005); and the Growth and Poverty Reduction Strategy (2006-2009). The overall policy framework being used now is the Ghana Shared Growth and Development Agenda (GSGDA 2010-2013). This is what guides overall policy and is quite comprehensive.
The GSGDA is anchored on the following themes:
i. Ensuring and sustaining macroeconomic stability;
ii. Enhanced competitiveness of Ghana‟s private sector;
iii. Accelerated agricultural modernisation and natural resource management;
iv. Oil and gas development;
v. Infrastructure, energy and human settlements development;
vi. Human development, employment and productivity; and
vii. Transparent and accountable governance.
The overarching goal of this medium-term economic development policy is to achieve and sustain economic stability while placing the economy on a path of higher growth in order to attain a per capita income of at least US$3,000 by 2020. The macroeconomic framework emphasises interventions in the following policy areas:
1. Monetary and financial sectors;
2. Fiscal policy management;
3. Economic policy management;
4. International trade management ; and
5. Employment, unemployment and wage policies.
Thus within the framework, trade features prominently and aspects of Ghana‟s Trade Policy document are firmly embedded within it. International trade management under the policy emphasises on improving export competitiveness and diversifying and increasing exports and markets. The chapter of the GSGDA on „Enhancing the Competitiveness of the private sector‟ stresses on removing barriers to trade and investment, reducing the cost of doing business by removing internal value chain and institutional constraints. Also recognised in the document is the need to invest in modern infrastructure and to enhance institutions to reduce the cost of doing business. Thus trade policy is mainstreamed and is recognised as an integral part of overall policy.
The GSGDA policy document also emphasises clearly the importance of the agriculture sector. Ghana‟s agriculture is dominated by subsistence small holder production units with weak linkages to industry and the services sectors. The sector is also characterised by low level of technology and productivity, low income and uncompetitiveness in production, processing and distribution. The main focus of agriculture development, over the medium-term, will be to accelerate the modernisation of agriculture through the implementation of sector-specific policy programmes, namely, the Food and Agriculture Sector Development Policy (FASDEP II) and the corresponding investment plan as
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detailed in the Medium-Term Agricultural Sector Investment Plan (METASIP) and ensure an effective linkage between agriculture and industry.
FASDEP II has six objectives which are
1. Food Security and Emergency Preparedness
2. Increased growth in incomes
3. Increased competitiveness and enhanced integration into domestic and international markets
4. Sustainable management of Land and the Environment
5. Science and Technology for Food and Agricultural Development
6. Institutional co-ordination
These are envisaged to have a high degree of synergy and they all contribute to the attainment of the overall objective of modernised agriculture, a structurally transformed economy, food security, employment and reduced poverty. Thus under the second objective rural infrastructure is to be enhanced but this will also enhance the third objective. Overall the aim is to enhance learning and innovation which will provide the basis for high technology adoption and subsequent high productivity and income growth.
More directly related to trade is the third objective which talks about increased competitiveness. Here FASDEP II identifies the global food crisis as an opportunity, which Ghana can take advantage of, given our resource endowment in agriculture. The overarching goal then is to enhance Ghana‟s comparative advantage with measures that will complement the resource endowment. Three main areas are identified for more attention. These are expanding production for the growing internal market, further development of agricultural exports and post-production management. Within each area constraints are identified and appropriate policy interventions proposed. For domestic marketing the main proposal is to „encourage partnership between private sector and District Assemblies to develop trade in local and regional markets with improved market infrastructure and sanitary conditions, and enforce standard of good agricultural practices‟ (FASDEP II). To complement this it is proposed to build capacity within the Ministry of Food and Agriculture to provide marketing extension. For expanding exports the main strategy is to „provide comprehensive support of improved access of operators to market information and intelligence, technology, relevant market infrastructure and financing to enable operators to respond to the changing needs of market‟ (ditto). For post- production management the main strategy is to „improve supply chain management with emphasis on developing clusters of small to medium-scale farmers and processors to enhance access to technical advice and logistics‟ (ditto).
FASDEP II is being implemented through METASIP and there is a consistency between the objectives of the two. There is however a slight disconnect between the objectives specified under FASDEP II and the GSGDA even though GSGDA talks about achieving its objectives through the implementation of FASDEP II. In the GSGDA document the main components of the agriculture modernization strategy are
a) Improving Agricultural Productivity
b) Increasing Agricultural Competitiveness and Enhanced Integration into Domestic and International Markets
c) Reducing Production and Distribution Risks/Bottlenecks in Agriculture and Industry
d) Selected Crops Development
e) Livestock and Poultry Development
f) Promotion of Fisheries Development
g) Improving Institutional Coordination (GSGDA, 2010)
While some of these might overlap the differences suggest some challenges with co-ordination that will need to be rectified. The result of this disconnect is that the indicators used to assess progress in the various documents are different.
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It is expected that implementation of these agricultural and other complementary strategies would
enhance the competitiveness of the agricultural sector to promote exports. These sector specific plans
have M&E systems based on a national M&E framework with clearly defined targets and indicators
for measuring outcomes. This M&E framework is discussed in Section 5.
4 Agricultural Trade, Development Cooperation and Aid Flows
4.1 Agricultural Trade Performance
The economy of Ghana is largely agrarian. The agriculture sector has been the largest contributor to
the country‟s GDP until recently when the services sector took over (Figure 1). The economy is quite
open to trade with exports constituting about 20 percent of GDP and imports hovering around 32
percent on average over the past 10 years (Figure 2) but these values remain below the Sub-African
average. Exports in particularly have exhibited stronger positive growth than imports over the past 10
years. Europe imports the bulk of Ghana‟s exports. The Netherlands has been the single largest
destination of Ghana‟s exports, consistently recording above a share of 11 percent over the 10 year
period 2000-2010 (Figure 3). The dominance of cocoa in Ghana‟s agriculture trade is obvious from
Figure 4. Export revenues from cocoa have exhibited remarkable increases due to both price and
output increases in the last few years. Revenues from the export of non-traditional agricultural
products have remained largely stagnant over the last 10 years (Figure 4).
Figure 1 Sector shares in GDP (%) Figure 2 Exports and imports shares of GDP (%)
Figure 3 Export destination shares (%) Figure 4 Agriculture export revenues (US$ m)
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Agriculture Services Industry
0
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10
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40
2006 2007 2008 2009 2010
Exports/GDP Imports/GDP
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UK USA Netherlands France Belgium
0
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Cocoa Timber Non-traditional Agriculture
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Figure 5 Export earnings shares (%) Figure 6 Export concentration and diversification
indices
Figure 5 shows that non-agriculture products (mainly gold)vi and cocoa remain the country‟s two
major commodity export earners. Cocoa and gold account for more than 70 percent of total export
earnings with minerals having a slight edge. Cocoa exports displaced minerals as the major export
earner in 2004, the first time in over a decade. Non-traditional exports (NTEs) have been promoted as
part of the ERP/SAP. Figure 5 shows that agricultural NTEs contribute less than 10 percent of export
earnings and this share has been declining in recent years. In spite of efforts at diversifying the export
base, however, the country‟s exports continue to be dominated by a few products as revealed by the
export concentrationvii and diversification indices in Figure 6.
As at 2011, export earnings from agriculture amounted to just a little over 30 percent. Clearly, there is
need to intensify efforts at increasing the share of agriculture in Ghana‟s trade. Aid-for-trade can be a
catalyst in this regard.
4.2 Development Cooperation
Ghana has been involved in development cooperation agreements and arrangements with both
industrialized and developing countries for many years. Development cooperation is both bilateral and
multilateral in nature. The most important development cooperation is with the European Union. The
Ghana-EU development cooperation dates back to more than 35 years. Development cooperation
between the EU and Ghana began with the first Lome Convention in 1975. Since 1975 the European
Commission (EC) has provided an estimated amount of 1.2 billion Euros in terms of development aid
to Ghana. This has over the years been allocated to sectors such as transport and infrastructure,
agriculture and rural development, macro-economic and budget support, governance and social
sectors, environment and natural resources, trade and private sector development, and other activities
such as technical cooperation, support activities etc. At present, between 40-50 percent of all Official
Development Assistance (ODA) received by Ghana is financed by the EU (both European
Commission and EU Member States). Unlike the World Bank, African Development Bank and some
other major donors, the overwhelming majority of the ODA that stems from the EU is provided in the
form of grants.
As a member of the ACP group of countries, the main source for EC funding to Ghana is the five year
European Development Fund (EDF), which at present is in its 10th edition (2008-2013). For all ACP
countries together a total amount of 21,966 billion Euros is available in the 10th EDF. Throughout the
years, subsequent EDF‟s have funded in Ghana a multitude of projects and programmes in the
following sectors: rural development, infrastructure, water and sanitation, governance, private sector
development and macroeconomic support. The selection of focal sectors (applying the principle of
complementarity between development partners and thus concentrating EC assistance in a limited
number of sectors) is done once every five years jointly between the European Commission and the
0
10
20
30
40
50
60
70
80
Cocoa Timber
Non-traditional agriculture Non-agriculture
0
0.1
0.2
0.3
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0.5
0.6
0.7
0.8
0.9
Export Diversification Index
Export Concentration Index
20. Managing AfT for Results in Ghana Final Draft Report
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Government of Ghana in a Country Strategy Paper (CSP) and an ensuing multi-year National
Indicative Programme (NIP).
Other stakeholders, such as civil society, Ministries, Departments and Agencies (MDAs) and
development partners are systematically consulted during the preparation process. In this whole
process, the EU is committed to the principle of „ownership‟, meaning that partner countries are
expected to set the priorities of the strategies and programmes which affect them. The European
Commission also aligns its CSP and NIP to the national development strategy of the country. In
Ghana this was the case with the Growth and Poverty Reduction Strategy (GPRS) for the period
2003-2009. The current development framework, the Ghana Shared Growth and Development
Agenda (GSGDA) also provides the framework in which development partners will operate in Ghana
between 2010 and 2013.
A renewed EU development policy framework in support of inclusive growth and sustainable
development and aimed at increasing the impact of EU development policy underpins the 11th EDF
programmed for 2014-2020. There are three main priority areas for the 11th EDF, namely,
1. Good Governance (democracy, human resource, gender, public financial management, public
sector management, civil society, natural resources management).
2. Sustainable Growth (key sectors are private sector development, trade, regional integration,
agriculture and energy).
3. Social Inclusiveness (social and human development, i.e., health, education, social
protection).
According to the EU, national development strategy provides a sufficient basis for implementing the
programme. The GoG-DP Compact for Ghana‟s transition until 2022, based on GSGDA 2010-2013
and the Ghana Aid Policy and Strategy 2011-2015 are therefore to serve as strategy documents.
4.3 Aid-for-Trade Flows
Ghana receives a significant amount of aid by African standards. Figure 7 shows ODA commitments
as captured by the OECD CRS into three sectors often associated with aid-for-trade for the period
1995-2010. The bulk of AfT goes into economic infrastructure and the building of productive
capacities of the real sectors of the economy (such as agriculture). Except for the years 1995, 1998,
2002, 2003 and 2005 the agriculture sector received at least 50 percent of aid into building productive
capacity (Figure 8). It received a high of 93.6 percent of the total flows into building productive
capacity in 2007.
Figure 7 Gross ODA commitments, Figure 8 Agriculture share of productive capacity
2010 US$ m AfT commitments (%)
0 200 400 600 800 1000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Economic infrastructure Building productive capacity Trade policy
0
50
100
150
200
250
300
350
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Building productive capacity
Agriculture capacity
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Figure 9 Top 10 donors -all sectors, 2001-2010 Figure 10 Top 10 donors -agriculture, 2001-2010
(2010 US$ m) (2010 US$ m)
Figure 9 shows the 10 top donors, both bilateral and multilateral over the ten year period 2001-2010.
The 10 major sources of AfT flows into agriculture over the past 10 years are the United States,
Canada, IDA, France, Germany, United Kingdom, Japan, IFAD, the EU and the Netherlands (Figure
10).
4.4 Donor Activities in the Agriculture Sector
There is significant donor presence in the agriculture sector of Ghana. Both bilateral and multilateral
are involved. The United Kingdom, the United States, Denmark, Canada, Germany France,
Netherlands, and Japan are among Ghana‟s most important bilateral donors. Multilateral assistance
comes from institutions like the World Bank, the EU, the African Development Bank and United
Nations agencies like IFAD, WFP and FAO as well as international NGOs.
Most of the projects and programmes by donors are aligned with the country‟s development
objectives in agriculture as contained in the GSGDA/FASDEP documents. However examination of
their activities shows that only a few of them focus explicitly on activities with a trade element. For
example, the German GIZ is engaged in what is called the Market Oriented Agriculture Programme
(MOAP), which is aimed at agricultural producers and other actors in the agriculture sector involved
in processing and trade. The project‟s objective is to improve their ability to compete in national,
regional and international markets. Components of the programme are a) promotion of selected value
chains; b) strengthening of private sector organisations; and c) improving service delivery of public
sector institutions. Similarly, the USAID‟s Agricultural Development and Value Chain Enhancement
(ADVANCE) programme, which aims to transform Ghana‟s agricultural sector through increased
competitiveness in domestic, regional and international markets. The ADVANCE has as its
components a) value chain competitiveness; b) market access and development; and c) access to
financial services. The AfDB is also engaged in the Export Marketing and Quality Awareness Project.
The project has the goal of increasing export earnings of non-traditional agricultural products.
Targeted products are pineapple, mango, pawpaw, and vegetables. It is expected that the incomes of
horticultural crop farmers and exporters of cassava products will be increased. Components of the
project are a) production and productivity enhancement; b) export marketing promotion and
infrastructure improvement; c) capacity building; and d) project management and coordination.
Boxes 1 and 2 present some exemplary donor activities by the US and German governments in
Ghana‟s agriculture sector.
0
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Box 1: USAID Agriculture Activity in Ghana
Ghana is a „focus‟ country for a US Government-wide initiative Feed the Future (FtF).The USAID 2011-2015 multi-year FtF strategy is aligned with the Government of Ghana‟s Medium Term Agricultural Strategic Implementation Plan (METASIP) and the Comprehensive Africa Agriculture Development Program (CAADP) compact.
The strategic focus is on commercializing staple crop systems, such as rice, maize and soya, and improving management of coastal resources such as marine fisheries. The approach includes closing the yield gaps and reducing pre- and post-harvest losses, improving the efficiency of value chains, and strengthening the regulatory system and policy frameworks to support regional trade. Investments in rural infrastructure and attention to improving access to financing are central to the strategy.
Current Activities
Agriculture Development Value Chain Enhancement Program (ADVANCE) is a $32M; four-year program (2009-2013) designed to improve the competitiveness of key agricultural commodity value chains in domestic and regional markets, with a significant focus on the three northern regions.
Ghana Strategic Support Program (GSSP) has $17M to focus on agricultural research and policy platforms that will ultimately modernize the agriculture sector, particularly staple crops, through 2013.
Integrated Coastal and Fisheries Governance (ICFG) is a four-year, $10M program designed to assist Ghana to sustainably manage its coastal and marine ecosystems and improve the livelihoods and food security of coastal communities through 2013.
Peace Corps volunteers will support agricultural production of maize, rice, and soybean, improve farmer business and marketing skills, ensure a greater role for women, build bankable credit-worthy programs, test alternative on-farm or processing energy options, and extend new technologies in the three northern regions of Ghana through 2013.
Business Sector Advocacy Challenge (BUSAC), a challenge fund with pooled funding from Danida and the EU is receiving $4M from USAID to work on improving the business environment in Ghana to facilitate private sector growth, including in the agricultural sector, through 2014.
Monitoring, Evaluation, and Technical Support Services (METSS) is a 3 year program implemented by USDA ending in 2013. METSS supports USAID/Ghana in the design and oversight of new programs under FtF, provides direct technical support to the implementation of Ghana‟s Medium Term Agriculture Sector Investment Plan (METASIP), and provides monitoring and evaluation services for both FtF and METASIP.
Box 2: German Development Cooperation in Agriculture
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Overall context and objectives of the German Development Cooperation
Agriculture is one of the three focal sectors of the German Development Cooperation. The overall objective of German involvement in the agricultural sector is to improve the income of the rural population by supporting value chain approaches and to strengthen small-scale commercial farmers to be able to compete in national, regional and international markets.
Key issues
1. Improve productivity along agricultural value chains to increase competitiveness
2. Increase compliance with international quality and standard demands
3. Recognize the role of the private sector as a main driver of development
4. Adapt capacities of the civil service to the changing role of government
5. Improve the access to finance of the actors in the value chain
GDC Strategic areas of focus
The German Government support to the agriculture sector has two components: Financial Cooperation (FC) and Technical Cooperation (TC).
The FC component provides innovative agricultural financing under the Programme for the Promotion of Perennial Crops and the Outgrower and Value Chain Fund (OVCF). The objectives of OVCF are to:
1. Improve access to medium to long-term finance using market mechanisms in cooperation with the banking sector.
2. Promote outgrowers, outgrowers‟ schemes and integration of smallholders into commercial agriculture.
The TC component, under the Market Oriented Agricultural Programme (MOAP), provides support in three key areas:
1. Support to specific value chains development and value addition.
2. Institutional and policy support to government.
3. Support to private sector organisation and development.
Institutions of the German Development Cooperation in Ghana are Kreditanstallt für Wiederaufbau (KfW) for Financial Cooperation, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) for Technical Cooperation and the German Institute of Metrology (PTB).
To date, nine value chains have been supported (rubber, mango, pineapple, citrus, chili pepper, maize, guinea fowl, grass cutter and fish) in five regions of Ghana. 5800 farmers have been directly supported in addition to processing companies.
Key achievements include increased income and gender participation, improved access to finance/markets and job creation.
Some Specific activities supported
FC: KfW access to finance (2004-2013) - Promotion of Perennial Crops Programme (6 million €, co-financed with AFD) and Outgrower and Value Chain Fund (11 million €)
TC: GIZ Market Oriented Agriculture Programme (25 million € for 9 years 2004 – 2013)
Future support areas
24 more million € are committed to the Outgrower and Value Chain Fund, 3 million € for supporting climate adaptation of agricultural ecosystems.
Currently many other donors both bilateral and multilateral including CIDA, USAID, GIZ, AFD, JICA, the World Bank, IFAD, amongst others are engaged in various programmes and projects to support to the agriculture sector to meet both domestic and international objectives, such as food security, poverty reduction, and ability to compete in national, regional and international markets.
Annex A summarizes some selected ongoing activities of donors in the agriculture sector.
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5 Monitoring and Evaluation of Development Programmes
5.1 Introduction
Monitoring and Evaluation (M&E) has served as an essential management tool under previous development strategies such as GPRS I and GPRS II. This M&E framework has provided an additional impetus both in the pursuit of policy, programme and project effectiveness, as well as ensuring accountability, responsiveness and transparency in the allocation of resources. The M&E system for the GSGDA is based on that of GPRS II and has been designed to ensure the availability of reliable and comparable information at the national, regional and district levels for policy makers and planners. Institutional arrangements for coordinating the system, including analyses and mode of reporting on impacts and outcomes of the GSGDA to different stakeholders, including the Government of Ghana, private sector, and civil society as well as development partners, have been set up..
The remainder of this section discusses the indicators for measuring outcomes of agriculture sector programmes, institutional arrangements for monitoring and evaluating projects and programmes, particularly into the agriculture sector, how the M&E system is functioning, the extent of involvement of development partners and an assessment of the challenges and constraints of the M&E system.
5.2 Indicators for Measuring Outcomes of Agriculture Sector Programmes
The focus of the agricultural development strategy under the GSGDA is to enhance the modernisation of agriculture to substantially contribute to the structural transformation of the economy. There are a set of indicators for the assessment of progress made over time in relation to the agriculture sector objectives. While only a couple of indicators might be considered as having direct focus on agriculture trade, achievement of other indicators may also have an indirect impact on trade. Thus some indicators that might have an indirect effect on trade outcomes are also discussed. However, due to some differences between GSGDA and FASDEP II, indicators from both documents are presented.
Under the GSGDA strategies for the agriculture sector that have a direct trade element are:
1. Improving agricultural productivity;
2. Increasing agricultural competitiveness and enhanced integration into domestic and international markets; and
3. Promotion of selected (export) crops development
Specific indicators to achieve the objectives are
- Percentage change in output of production of selected crops.
- Percentage change in output /yield per unit area (Mt/ha).
- Total volume and value of agricultural commodities exported.
- Total volume of cocoa produced (Mt).
- Share of cocoa output processed locally.
- Tonnage of shea butter exported annually.
Other GSGDA strategies that do not explicitly have trade objectives but might impact trade outcomes indirectly include:
a) Reduction of production and distribution risks/bottlenecks in agriculture and industry
b) Improved institutional coordination
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Indicators to measure progress on these fronts include the following:
- Percentage change in number of outlets and sales points of agro-inputs.
- Percentage change in agro-chemical imports.
- Production of foundation seeds (Mt):
- Fertilizer imports (Mt).
- Tractor-farmer ratio.
- Number of agricultural mechanization services centres established.
- Total number of famers trained in the proper use and handling of farm machinery.
- Extension officer-farmer ratio.
- Total number of beneficiaries with access to various agriculture technologies.
- Percentage of cultivated lands under irrigation.
- Share of credit to agriculture, forestry and fishing by deposit money banks (excluding cocoa).
- Percentage change in post-harvest losses.
- Percentage of agriculture sector budget allocated to support extension services.
- Number of intra-sectoral and inter-ministerial coordination activities undertaken.
Annex B provides a summary of specific indicators, their definitions and progress made in achieving these targets as at 2010.
There is another extensive set of indicators under the objectives of FASDEP II, which while similar in some cases to that of GSGDA are different for the most part. As was done above, indicators with both expect direct and indirect trade impacts are discussed.
The main trade strategy under FASDEP II is increased competitiveness and enhanced integration into domestic and international markets, which is similar to the GSGDA. Indicators are however quite from the GSGSA and include,
- Export of non-traditional agricultural commodities by men and women smallholders increased by 50% by 2015.
- Grading and standardization systems of agricultural commodities (crops, livestock and fish) made functional and effective by 2012.
Other FASDEP strategies that might have an indirect effect on trade and/or meet other broader development goals of the country such wealth creation and poverty reduction include, Application of science and technology in food and agriculture development, improved institutional coordination (same as GSGDA) and increased growth in incomes.
The indicators under these strategies are quite many and include the following:
- Adoption of improved technologies by men and women along the value chain increased by 25%.
- Laws and regulations to enhance the application of biotechnology in agriculture in place by 2011 and assessment of the country‟s biotechnology research potential by 2012.
- Increased number of agricultural technologies developed.
- Research extension linkage strengthened and made functional.
- Capacity for planning, policy analysis and M&E at national, regional and district level developed by 2015.
- A communications strategy within MOFA is developed and implemented by 2012.
- All cost centres within MOFA and relevant MDAs are adequately resourced and capacities for electronic financial data capture and reporting and asset management are built by 2011.
- The human, material, logistics and skills resource capacity of all directorates of MOFA and relevant MDAs are built by 2012.
- A joint platform for collaboration between MOFA and other MDAs established by end of 2011.
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- A platform for private sector and civil society engagement with MDAs established by end of 2011.
- Income from cash crop production by men and women increased by 20% and 30% respectively by 2015.
- Efficient pilot value chains developed for two selected commodities in each agro-ecological zone.
- Development of out-grower schemes and FBOs intensified and three-tier FBO structure achieved in all districts by 2015.
- Cost of transportation of agriculture produce in rural areas reduced by at least 5% in areas where infrastructure has been improved.
While the FASDEP II is the main agriculture sector strategy and is expected to feed into the national framework, which is the GSGDA, the problem though is the lack of harmonization between the indicators for the two sets of documents. Only two of the components match somewhat. Under GSGDA, the second component is „Increasing Agricultural Competitiveness and Enhance Integration into Domestic and International Markets‟ while under FASDEP II the third component is „Increased Competitiveness and Integration into Markets‟. The problem though is that even here the indicators are different as shown above. The last component for each of them is “Improved Institutional coordination”. Here also there is a difference in the indicators.
5.3 The Monitoring and Evaluation Framework
5.3.1 National Monitoring and Evaluation Arrangements
The institutional arrangements for monitoring and evaluation of government policies and programmes are derived primarily from the country‟s political and administrative system, which in itself is anchored on the country‟s constitution. Key institutions involved in the M&E system include: Office of the President, Parliament, National Development Planning Commission (NDPC), MoFEP, Ghana Statistical Service, Policy Planning Monitoring and Evaluation Divisions (PPMEDs) of MDAs, Cross Sectoral Planning Groups (CSPGs), Regional Monitoring Groups, District Monitoring Groups and Civil Society Organisations. The National Development Planning Commission is expected to provide technical coordination of the system in collaboration with MoFEP and the Ghana Statistical Service (GSS).
To ensure improved implementation of the M&E plan the institutional arrangements currently in place give greater responsibility to the PPMEDs of MDAs and the Regional and District Monitoring groups. These institutions are required to monitor the key indicators and prepare annual reports on their performance. The NDPC will then collate, synthesise and harmonise these reports into a national Annual Progress Report (APR).
Figure 11 shows the institutional arrangements in place to monitor and evaluate the implementation of national development policy.
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Figure 11 National monitoring and evaluation framework
NDPC
MDAs
CSOs
Think-
Tanks
Cross
Sectoral
Planning
Groups
(CSPGs) (4
District Monitoring
Groups (DMGs)
EBPM Technical
Committee
Ministry of Finance and
Economic Planning
Office of the President
Parliament/Parliamentary
Sub-Committees on Finance
& Poverty Reduction
Ghana Statistical Service
Regional
Monitoring
Groups
(RMG)
The MoFEP, NDPC and GSS are the key government institution responsible for ensuring proper
functioning of the national M&E system. The success of the M&E system therefore hinges on how
effectively these institutions play their coordination roles. Apart from these key institutions, there is
the Cross Sectoral Planning Group (CSPGs) which comprises stakeholders from MDAs, DPs, Private
Sector and NGOs/CSOs at the national level. It is the framework within which Annual Progress
Reports are prepared.
5.3.2 Sectoral Monitoring and Evaluation Arrangements
Apart from the national M&E system, there is the sectoral M&E system. Key stakeholders involved in
M&E at the sectoral level include MDAs (at regional and district levels), Regional Planning
Coordinating Units and the District Planning Coordinating Units. Development Partners and Civil
Society Organizations (CSOs) are integral part of all the groups operating at all levels, particularly
with the advent of sector dialogues under the MDBS arrangement. Figure 12 illustrates the structure
for the sector M&E system.
Figure 12 Sector monitoring and evaluation framework
District Sector
Department
DPCU
Regional Sector
Department
RPCU
PPMED NDPC
The responsibilities for M&E are different at each level of the structure. The PPMED has oversight
and support responsibilities at the sector level. The Regional Sector Department (RSD) has an
important function in providing the link between the districts and the national level. RSDs act as a
major clearinghouse that validate and verify information on projects and indicator achievements from
the district level, before they are received at the Regional Planning Coordinating Units (RPCU) and
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PPMED. The District Sector Department has direct responsibility for the development and
implementation of the District Sector M&E Work Plan and collating and coordinating feedback from
the sub-district levels for onward transmission to the RSD.
5.3.3 Decentralised System of Monitoring and Evaluation
Another important component of the national M&E system is the District M&E system. It comprises
the regional and district planning coordinating units.
5.3.3.1 Monitoring and Evaluation Functions of RPCU
The Regional Planning Coordinating Unit serves as a secretariat for the Regional Coordinating
Council (RCC) to perform its coordination, monitoring, evaluation, and harmonization functions
specified under Section 8 of the National Development Planning (Systems) Act, 1994, Act 480. The
RPCU is mandated to co-opt other sector agency heads, persons from the private sector and civil
society organizations who have special expertise in a given field.
5.3.3.2 Monitoring and Evaluation Functions of DPCU
The District Planning Coordinating Unit (DPCU) assists the District Assembly to execute designated
development planning functions. The National Development Planning (Systems) Act, 1994, Act 480
defines the DPCU‟s planning, programming, monitoring, evaluation and co-ordinating functions. The
DPCU is mandated to co-opt representatives from other sector agencies, persons from the private
sector and civil society organizations with relevant expertise in a given area.
The responsibilities of the DPCU amongst others are to liaise with RPCU to agree on goals and
targets, and to collect and collate feedback from the sub-district levels for preparation of the District
APR.
The decentralized M&E institutional and reporting framework is summarised in Figure 13.
Figure 13 Decentralised monitoring and evaluation framework
Roles
DPCU
• Prepare Guidelines, Training
Manuals and Build M&E capacity
•Assist to create the necessary
supporting conditions for M&E,
etc.
•Guide districts to develop and
implement M&E Plans
•Conduct review workshops
•Prepare Regional APRs, etc.
RPCU
NDPC
Key Actors
•Develop & implement M&E
Plans
•Collect, Collate & Analyse Data
•Prepare District APRs, etc.
• NDPC
•Cross-Sectoral Planning
Group
•RPCU
•Other sector agencies
•Representatives of CSOs
•Private sector actors
•DPCU
•Other sector agencies
•Representatives of TAs and
CSOs
•Private sector actors
Information Flow and
Feedback
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In order to strengthen the capacities of the sectors, regions, and districts to respond to the current M&E needs at the national level, M&E guidelines have been developed for the sectors and Districts to develop their respective M&E plans. The objective of this is to ensure that all sectors and districts prepare Annual Progress Reports on the implementation of their sector and district plans respectively, based on agreed set of indicators.
Thus MoFA monitoring and evaluation of agriculture sector programmes and projects follows the above three-tier framework. Actual outcomes of various agriculture sector indicators are collated at the district level by district statisticians and forward to the regional level for aggregation. The regional values are then aggregated to obtain the national level outcomes. The national level outcomes form the basis for the preparation of the Annual Performance Reports of MoFA which also feeds into the preparation of the GSGDA Annual Progres Reports.
5.4 Donor Monitoring & Evaluation and Coordination between Donors and MoFA
Donor monitoring and evaluation of agriculture sector projects and programmes occurs through three main channels.
Project reports
MoFA Annual Performance Reports
Joint Sector Reviews (JSR)
The JSR is an annual platform agreed in 2007 for key agriculture sector stakeholders to assess the extent of implementation of the METASIP and ascertain progress towards the achievement of expected outputs, outcomes and challenges of the agricultural sector. It also serves as a forum to make recommendations to feed into the medium-term planning and budgeting exercises, build a consensus on sector priorities, and to inform future plans and budgets for MoFA and sector-related MDAs and also provide the focus for Development Partners (DP) support and private sector participation. The JSR was formed so as to aid in the harmonization and alignment of development aid and the Agriculture Sector Wide Approach (SWAp) Agenda. Main actors in the JSR include MoFA (Ministers, Chief Director, National and Regional Directors and other staff), Development Partners (DPs), other Ministries, Departments and Agencies (MDAs), private sector and civil society.
The first JSR was carried out in 2008, and to date five of such reviews have been conducted. The JSR reviews performance of the agriculture sector based on MoFA‟s Annual Performance Review report. Under the JSR, four working groups are constituted each year to deal with specific but revolving priority areas. For instance, 2012 had the following priority areas, namely, a) sector performance in 2011 and achievement of policy/programme objectives and performance benchmarks, b) review of recommendations of MoFA policy initiatives, including fertilizer subsidy, NAFCO, AMSEC and block farm programme, c) review of policies/concepts to improve agricultural research and environmental sustainability, and d) agricultural finance and financial management. Discussions during the JSR centre on progress made in achieving targets set on agreed priority areas, what constraints and challenges were encountered and recommendations for dealing with these constraints. Thus the reviews highlight areas in which significant achievements have been made and areas where problems still persist.
From the above it can be argued that by and large donors use country systems for monitoring and evaluation and this takes place within the JSR. In spite of this joint review system, however, some donors continue to use their own systems of monitoring and evaluation. For instance, in the areas of projects, CIDA uses a blend of its own and GoG M&E systems.
There is also the Agricultural Sector Working Group (ASWG), which is a policy dialogue platform for engaging Government of Ghana (GoG) and Development Partners (DPs) on delivering on the
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agriculture sector objectives of GSGDA (2010-2013). The ASWG is smaller in membership than the JSR and meetings are held monthly and quarterly compared to the JSR which is an annual forum. The ASWG implements the recommendations from the JSR. Presently 11 OECD-DAC members are engaged in the Agriculture Sector Working Group. There are also a number of development partners from philanthropic foundations, NGOs and Civil Society Organisations (CSOs) who participate in the dialogue process of the Sector Group.
Development partners who are members of the Agriculture Sector working Group are:
African Development Bank (AfDB)
Agence Français de Développement (AFD – France)
Alliance for Green Revolution for Africa (AGRA)
Canadian International Development Agency (CIDA)
Engineers Without Borders (EWB)
Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA)
Food and Agricultural Organization of the UN (FAO)
German Development Cooperation (GIZ-KfW)
International Food Policy Research Institute (IFPRI)
International Fund for Agricultural Development (IFAD)
International Water Management Institute (IWMI)
Japan International Corporation Agency (JICA)
Japan International Research Centre for Agricultural Science (JIRCAS)
Millennium Challenge Corporation (MCC)
United States Agency for International Development (USAID)
World Bank (WB)
World Food Programme (WFP)
The structure of the dialogue process is as follows:
Multi Donor Budgetary Support (MDBS) consultations and negotiations are coordinated by MoFEP and the MDBS Core Group based on prior consultation at the sector level.
There are monthly meetings of the DPs Agriculture Sector Group, jointly chaired by rotating DP representatives and MoFA.
There are three thematic MoFA - DP sub-groups chaired jointly by a MoFA Director and a DP for;
a) Policy, harmonization and Monitoring & Evaluation (M&E) issues;
b) Human Resource, Development & Management; and
c) Public Finance and Administration.
These groups meet irregularly on demand, mandated by the dynamics of the issues at stake.
Apart from the above joint engagements there are exchanges and dialogues between the individual DPs and MoFA on a broad variety of issues from policy to implementation issues and administrative requirements of individual DPs and their project implementation arrangements.
The ASWG platform offers the opportunity to jointly discuss the implementation of agriculture sector objectives and priorities, and ascertain progress towards the achievement of expected outputs, outcomes and challenges of the agricultural sector and make clear and operationally-focused recommendations of priority reforms/ measures to feed into the medium-term planning and budgeting exercises. Achievement of consensus on priorities is to inform future plans and budgets for MOFA and sector-related MDAs and also provide the focus for Development Partners (DP) support and private sector participation. Coordination issues between DP programmes and between MDAs are also discussed. Thus it helps in avoiding duplication of efforts by DPs and MDAs and narrow gaps in coordination and development efforts.
While stakeholders of the JSR generally agree that the forum offers the opportunity for harmonising donor and government programmes for the agriculture sector, very often, recommendations arising from the reviews have been observed to be repetitions from previous years. This development may be
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read as an indication of weak follow-up on and/or implementation of recommendations from the JSR, which might imply weak human and institutional capacities. It may also be an indication that some of the problems are structural in nature and cannot be overcome quickly and easily.
5.5 Challenges and Constraints of the M&E System
Measuring aid-for-trade impacts is not an easy task. Any M&E system put in place to measure impacts and outcomes must therefore be well coordinated to function effectively. While the measurement of agriculture sector targets derive from well structured national and sectoral M&E systems, there seems to be weak coordination among the three key ministries, namely, MoFEP, MoFA and MoTI. Interactions with some officials from these three ministries do not point to the existence of a well coordinated system for the three ministries in terms of aid-for-trade in agriculture. Thus there is a lack of appreciation of critical linkages between these ministries.
One key challenge to M&E from the perspective of MoFA is human and financial capacity constraints. Very often there is inadequate provision of GoG budget to cover critical costs not eligible for financing by DPs. The inadequacy of the agricultural data collection process and the unreliability of available data has been a serious challenge to M&E for the agriculture sector.
On the part of donors challenges of the M&E system include the following:
Lack of data analysis
Over- ambitious targets
National M&E systems putting little emphasis on evaluation
National M&E systems not linking performance results and budgeting
The Ministry of Food and Agriculture, the government ministry in charge of agriculture sector policies and programmes does not seem to have a firm focus on AfT. In the same vein some donors do not explicitly focus on AfT in their programmes. However the Ministry of Trade and Industry is very much in the picture on AfT. It will be useful therefore for MoTI to collaborate more effectively with MoFA if Ghana is to achieve desired results from AfT.
According to MoFA, there is currently a matrix of 58 indicators for measuring the objectives of the FASDEP II/METASIP. These indicators are not only many and therefore make monitoring and evaluation difficult but also for adequate measurement of the impact of AfT, there would be need to develop more focused indicators to measure trade impacts of aid-for-trade. Worse still there seems to be a lack of harmonization between the indicators for the agriculture strategies for GSGDA and FASDEP II.
5.6 Managing Aid for Trade for Results
Ghana receives substantial amounts of aid into the agriculture sector which can go a long way in improving productive capacity of the sector in order to be able to achieve both domestic and international market objectives of the sector. Improving export competitiveness and diversifying and increasing exports and markets is one such international market objectives. Thus trade is mainstreamed in development policy. While trade features prominently in the GSGDA and aspects of Ghana‟s trade policy are embedded in it, the country currently does not have coherent aid-for-trade strategy in place to ensure that aid flows into the agriculture sector have the desired impact on Ghana‟s agricultural trade and that the impacts and outcomes can be adequately ascertained.And while there is a significant donor presence in the agriculture sector of Ghana and many of the projects and programmes seem to be aligned to the country‟s development objectives in agriculture as contained in the GSGDA/FASDEP documents, examination of these activities however indicates that only a few donors focus explicitly on activities with a trade element. While the GSGDA and FASDEP
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II have some agriculture trade related indicators, the problem though is the lack of harmonization between the indicators for the two sets of documents.
Apart from the national M&E framework that also applies to the agriculture sector to enable the measurement of outcomes based on pre-determined agriculture sector indicators, a lot of coordination is also going on between MoFA and development partners. Coordination takes place largely within the annual joint sector reviews. However, what is missing from the five JSRs held to date is the lack of discussions on the impact of donor support on agriculture trade outcomes. While there are a lot of donor activities ongoing in the agriculture sector, most of them lack direct trade objectives (see Appendix A). Apart from the fact that trade impacts of aid may not be a direct objective of many donors1, MoFA‟s indicators as derived from agriculture sector policy objectives tend to focus more on domestic outcomes. For instance, increasing food production and ensuring food security is one often highlighted objective and many donors, including CIDA, are increasingly involved in helping the country achieve such objectives. Another reason for low discussions on the impact of donor assistance on trade is that MoFA‟s objectives have also focused more on reducing the importation of agriculture products (for example, rice) rather than pursuing an export agenda.
Against the backdrop of the substantial AfT flows into the agriculture sector of Ghana, it is imperative for the country to adopt a framework that enables the measurement of the trade impacts of aid based on some identified trade-related indicators and the development of a workable M&E system to measure results.
In 2011 Ghana introduced an aid policy, titled Ghana Aid Policy and Strategy, which spans the period 2011 and 2015. The aid policy was developed in „response to available evidence showing that recipient country policies and procedures, human capacity, economic management and institutional arrangements determine to a large extent the optimal allocation of aid and its impact on growth and poverty reduction‟viii. The policy was fashioned out of the objectives of the Paris Declaration on Aid Effectiveness, 2005 and the Accra Agenda for Action, 2008. The aim of the aid policy is to ensure that aid is managed and monitored properly, i.e. to ensure effectiveness and coordination by aligning external aid to national development priorities.
The aid policy spells out some measures to ensure effective monitoring and evaluation of aid in general, and can thus serve as minimal framework for introducing trade objectives and indicators to measure the impact of AfT. The ingredients that must go into this should include Ghana‟s own targets as defined in its policies and the nature of AfT flows. Also important is finding targets that can be monitored without expending too many resources – both human and financial. The mechanism should also reflect donors‟ views on mutual accountability.
For an aid-for-trade strategy in agriculture to work, there would be the need to strengthen the intra- sectoral and inter-ministerial coordination through a platform for joint planning. Thus there would be the need for a review in the development and implementation of a communication strategy to improve institutional coordination as well as create and strengthen the framework for coordinating activities among all stakeholders in the sector. This must include each ministry identifying an agricultural content in its strategic policy. The strategy should thus create effective internal coordination linkages among three key stakeholders, namely, MoFA, MoFEP and MoTI on one hand and between these ministries and DPs on the other to ensure effective monitoring and evaluation for results. Lastly, it would also be important to develop more focused indicators to measure the trade impacts of aid. Indicators could include increase in the diversification of agriculture exports, increase in export earnings and the number of export markets, and increase in the proportion of processed (value-added) agriculture products.
1 CIDA for instance has observed that aid for trade is not their area of focus.
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6 Conclusion
This report has assessed the mechanisms for monitoring and evaluating outcomes of aid flows into the agriculture sector of Ghana. Given that substantial flows of aid flow into productive sectors, including agriculture and the political demand for results of such interventions, it is important that adequate structures are put in place to ensure that adequate measurement of impacts and outcomes. For this to happen there is the need for coherent aid-for-trade strategy to ensure that aid flows into the agriculture sector have the desired impact on Ghana‟s agricultural trade and outcomes are adequately measured.
The existing M&E system shows weak coordination among the three key ministries, namely, MoFEP, MoFA and MoTI. Interactions with some officials from these three ministries do not point to the existence of a well coordinated system for the three ministries in terms of aid-for-trade in agriculture. In other words, there is a lack of appreciation of critical linkages between these ministries. Mutual accountability in terms of resource flow and achievement of results makes it imperative to strengthen existing M&E systems for trade results. Mainstreaming aid-for-trade into the country‟s development agenda would improve monitoring and evaluation.
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References
Aryeetey, E., Laryea, A.D.A., Antwi-Asare, T. O. 2007. „An Evaluation of Ghana‟s Trade and Investment Policy Reforms: Towards Further Commitments to Reforms‟, African Economic Research Consortium (AERC)
Balassa, Bela. 1989. „Outward Orientation‟ in H. Chenery and T. N. Srinivasan (Ed) Handbook of Development Economics, Volume II, Elsevier Science Publishers B.V.,
Caves, R. E. 1965. „Export-led growth and the new economic history‟, in J.N. Bhagwati, et. al., (Ed) Trade, balance and payments, and growth. Amsterdam: North-Holland
Government of Ghana. 2004. Ghana Trade Policy and Strategy. Ministry of Trade and Industry, Accra, Ghana.
Government of Ghana. 2010. Ghana Aid Policy and Strategy: 2011-2015. Ministry of Finance and Economic Planning, Accra, Ghana.
Government of Ghana. 2010. Ghana Shared Growth and Development Strategy: 2010-2013. Volume I: Policy Framework. National Development Planning Commission, Accra, Ghana.
Government of Ghana, 2010. Aid Coordination under the Ghana Aid Policy and Strategy 2011 -2015: Towards Middle –Income Status (Phase One), Ministry of Finance and Economic Planning, 2010, Accra, Ghana.
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Government of Ghana, 2007, Guidelines for the Preparation of the District Monitoring and Evaluation Plan under the GPRS II (2006 -2009), National Development Planning Commission, Accra, Ghana.
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Government of Ghana, 2011, The Implementation of the Ghana Shared Growth and Development Agenda (GSGDA) 2010 -2013, Annual Progress Report, National Development Planning Commission Accra, Ghana.
Hoekman, Bernard and Njinkeu, Dominique. 2007. “Aid for Trade Competitiveness: New Opportunities for Africa” AERC Framework Paper on Export Supply Response Capacity Constraints in Africa.
Jebuni C. D., Oduro A., Tutu K. A. 1994. Trade, Payments Liberalization and Economic Performance in Ghana, AERC research Paper 27, African Economic Research Consortium
OECD. 2006. Aid for Trade: Making it Effective. The Development Dimension. OECD Publishing
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Annex A: On-going Donor Projects in Agriculture
36. DPTitle CategoryMain ObjectivesComponents Total budgetCurrencyType of funding grant=0loan=1RuntimeGDC(Jan-12) GTZ/DED 1Market Oriented Agriculture Programme (MOAP) Value ChainAgricultural producers and other actors in the agricultural sector involved in processing and trade improve their ability to compete in national, regional and international markets1. Promotion of selected value chains2. Strengthening of private sector organisations3. Improve service delivery of public sector institutions23.2Eur02004 - 2013GDC(Jan-12) KfW 2Outgrower and value chain fund(Successor of "Promotion of Perennial Crops") Value Chain1. Poverty Reduction2. Integration of Smallholders into commercial agric. 3. Improve access to Agri-FinanceOutgrower101Eur102010 - 2014USAID(Jan- 12) USAID 1Agicultural Development & Value Chain Enhancement (ADVANCE) Value Chain [Value Chain Competitiveness, Market Access and Development, Financial Services] To transform Ghana‟s agricultural sector through increased competitiveness in domestic, regional and international market. Value Chain Competitiveness; Market Access and Development; Access to Financial Services 32US$02009 - 2013USAID(Jan- 12) USAID 2Integrated Coastal Fisheries Governance Management (ICFG) ProgramFishery [Governance, fisheries management, food security, biodiversity conservation, spatial planning] Support the government of Ghana in achieving its development objectives of poverty reduction, food security, sustainable fisheries management and biodiversity conservation Develop a Nested Governance Systems for Fisheries and Landscape Governance and Co- Management from the community to the District and Regional Levels. Landscape Governance (with a focus on conservation and managed areas and species with possibilities , climate change adaptation planning and alternative livelihoods that enhance food security and poverty reduction in the region). Seascape Governance (with an emphasis on fisheries management and planning and a preparing for a marine protected areas network ).Capacity building within regional institutions and civil society organizations as well as national universities. 10US$02009 - 2013
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DPTitle CategoryMain ObjectivesComponents Total budgetCurrencyType of funding grant=0loan=1RuntimeUSAID(Jan- 12) USAID 3Ghana Strategice Support Program (GSSP)Policy Research [Agricultural Research and policy] Agricultural research and policy programs designed to help Ghana develop an informed policy agenda that promotes agricultural modernization. Increase the availability of information and knowledge, strategy design and policy formulation17US$02005 - 2013USAID(Jan- 12) USAID 5Business Sector Advocacy Challenge Fund (BUSAC II) Other [Advocacy, Private Sector, Agricultural Sector] A grant mechanism for the Ghanaian private sector to advocate at the local, regional and national levels for changes in the legal and regulatory framework. 4US$02011 - 2014USAID(Jan- 12) USAID 6Development Credit AuthorityAgricultural FinanceTo increase short, medium, and long-term financing to SME‟s, group-lending loan product targeting rural farmers, guarantee key credit enhancement for new rural loan products. 9.3US$02009 - 2013USAID(Jan- 12) USAID 8Feed the Future Initiative PartnershipOther [Increased Agriculture Productivity, 2. Accelerate Participation of the Ultra Poor in Rural Growth, 3. Improving Nutrition, Cross- Cutting Theme: Engaging Women ] 1. Assist increased food production in Ghana, in amount and nutritional value, and the capacity of communities to sustain higher production in the long term. 2. Facilitate agricultural producers‟ increased technical expertise and access to the resources needed for professional development. 3. Raise communities‟ ability to generate income by enhancing the value of agricultural goods. 4. Improve communities‟ capacity to insulate themselves from food price and production fluctuations through improved organization, planning and coordination. 5. Increase communities‟ capacity to reduce malnutrition through improved agricultural and agroforestry practices and dietary education. Intervention at the grass- roots level, this program aims to increase the capacity of partner communities to address their food security needs. 0.91US$02010 - 2013AFD(Jan-12) AFD 2Programme for the Promotion of Perennial CropsNon Food Crops [Rubber, Oil palm] Increase the areas planted in perennial crops, within outgrowers schemes and public-private partnershipsOutgowers plantations : 7000 ha rubber, 3000 ha oil palmSupport to FBOsResearchRoadsInstitutional support to MOFAMiscellaneous40.65EUR0 (2.0 mill DP) 1 (17.4 mill DP) 2006 - 2012AFD(Jan-12) AFD 4Rubber Outgrower phase IVNon Food Crops [Rubber] To promote rubber plantations at village level (10500ha)17.7EUR1=142010 - tbd